Full text of Federal Reserve Bulletin : September 1989
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VOLUME 75 •
1
NUMBER 9 •
V
SEPTEMBER 1989
FEDERAL RESERVE
BULLETIN
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood
• Donald L. Kohn • J. Virgil Mattingly, Jr. • Michael J. Prell • Edwin M. Truman
The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for
opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by Mendelle T.
Berenson, the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
591 MUTUAL RECOGNITION: INTEGRATION
OF THE FINANCIAL SECTOR IN THE
EUROPEAN COMMUNITY
In the financial sector, as in other areas, the
European Community is using the approach
of mutual recognition to achieve a single,
unified market by year-end 1992. This approach goes well beyond national treatment
and is of interest not only for its direct effect
within the Community but also in relation to
issues regarding international trade in financial services.
610 STAFF
STUDIES
"The Adequacy and Consistency of Margin
Requirements in the Markets for Stocks and
Derivative Products" is the first study to
combine a broad institutional description of
margin arrangements with an analysis of
margins and prices before and after the
October 1987 market crash to assess the
adequacy and consistency of margin requirements in the cash, futures, and options
segments of the equities market.
612 INDUSTRIAL
to the House Committee on Banking, Housing, and Urban Affairs, July 20, 1989.)
619 Griffith L. Garwood, Director, Division of
Consumer and Community Affairs, addresses issues regarding the Community
Reinvestment Act (CRA) and its enforcement by the Federal Reserve and says that
CRA enforcement poses a significant supervisory challenge because it requires looking
beyond the bank itself and focusing on the
role the bank plays in its community, before
the Subcommittee on Consumer and Regulatory Affairs of the Senate Committee on
Banking, Housing, and Urban Affairs, July
31, 1989.
625 RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET COMMITTEE
At its meeting on May 16, 1989, the Committee adopted a directive that called initially for no change in the degree of pressure on reserve positions. Some firming or
some easing of reserve conditions would be
acceptable during the intermeeting period
depending on indications of inflationary
pressures, the strength of the business expansion, the behavior of the monetary aggregates, and developments in foreign exchange and domestic financial markets. The
reserve conditions contemplated by the
Committee were expected to be consistent
with growth of M2 and M3 at annual rates of
around IV2 and 4 percent respectively over
the three-month period from March to June.
PRODUCTION
Industrial production declined 0.2 percent
in June after a revised decrease of 0.1
percent in May.
614 STATEMENTS
TO CONGRESS
Alan Greenspan, Chairman, Board of Governors, discusses monetary policy and the
state of the nation's economy and says that
the fundamental objective of monetary policy remains to maximize sustainable economic growth, which requires the achievement of price stability over time, before the
Senate Committee on Banking, Housing,
and Urban Affairs, August 1, 1989. (Chairman Greenspan presented similar testimony
631
ANNOUNCEMENTS
Nominations sought for appointees to Consumer Advisory Council.
Amendments to Regulation CC.
Proposed amendments to Regulation B to
implement provisions of the Women's Business Ownership Act.
Revised List of Marginable OTC Stocks
now available.
Settlement of enforcement proceedings.
Admission of eight state banks to membership in the Federal Reserve System.
A71 GUIDE TO TABULAR
PRESENTATION,
STATISTICAL RELEASES, AND SPECIAL
TABLES
A74 BOARD OF GOVERNORS AND STAFF
633 LEGAL DEVELOPMENTS
Various bank holding company, bank service corporation, and bank merger orders;
and pending cases.
A76 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY COUNCILS
656 MEMBERSHIP OF THE BOARD OF
GOVERNORS OF THE FEDERAL
RESERVE SYSTEM; 1913-1989
A78 FEDERAL RESERVE
PUBLICATIONS
BOARD
List of appointive and ex officio members.
A80 INDEX TO STATISTICAL
AI FINANCIAL AND BUSINESS
These tables reflect data available as of
August 1, 1989.
A3 Domestic Financial Statistics
A46 Domestic Nonfinancial Statistics
A55 International Statistics
TABLES
STATISTICS
A82 FEDERAL RESERVE
BANKS,
BRANCHES, AND OFFICES
A83 MAP OF FEDERAL RESERVE
SYSTEM
Mutual Recognition:
Integration of the Financial Sector
in the European Community
Sydney J. Key, of the Board's Division of International Finance, prepared this article.
Since the beginning of 1988, momentum toward
completion of the internal market in the European Community has increased markedly. The
target date for establishing this market, which
will allow the free movement of goods, persons,
services, and capital within the Community, is
December 31, 1992. The European Community
has already taken legislative action in many
important areas, including the liberalization of
capital movements and the establishment of a
framework for a Communitywide market for
banking services. Currently, EC member states
are taking steps to encourage industries to prepare for the more competitive post-1992 environment, and some governments are using the deadline to speed deregulation of their own financial
markets. In the private sector, companies are
developing strategic plans based on the creation
of a unified European market; one result has
been a wave of intra-European mergers and
acquisitions.
The EC program for the financial sector is
being developed and implemented at a time of
increasing internationalization of financial services and markets. Technological change and
innovation in instruments and services have
played a major role in this process of internationalization. At the same time, market forces have
both necessitated and facilitated greater international coordination with regard to supervision
NOTE. This article is based on Ms. Key's study "Financial
Integration in the European Community," International Finance Discussion Papers 349 (Board of Governors of the
Federal Reserve System, Division of International Finance,
April 1989).
and regulation. This coordination has resulted in
some movement toward harmonization of rules
among nations (in particular, the Basle Accord
on international bank capital standards) and easing of restrictive rules and practices by individual
countries. Although the EC program for financial
services and markets can be viewed as a part of
this process of international coordination, the
program is qualitatively different from what has
been achieved beyond the Community. The EC
approach to achieving internal financial integration is therefore of interest not only for its effect
within the Community but also in relation to
issues regarding international trade in financial
services that are being addressed in forums such
as the current Uruguay Round of the General
Agreement on Tariffs and Trade (GATT), the
Organisation for Economic Co-operation and Development (OECD), and the Bank for International Settlements.
The first section of this article discusses the
development of the internal market program
and the Community's use of the concept of
mutual recognition. The second section provides an overview of the EC program for creation of a "European Financial A r e a , " a term
used by the EC Commission, the Community's
executive body, to refer both to the removal of
barriers to capital movements and to the establishment of a framework for a Communitywide
market for financial services. The third section
presents a conceptual analysis of the EC approach of mutual recognition as a means of
achieving integration of the Community's financial sector. The concluding section considers
the relevance of the principle of mutual recognition in the broader international context of
approaches to domestic market access for foreign firms.
592
Federal Reserve Bulletin • September 1989
DEVELOPMENT OF THE
MARKET PROGRAM
INTERNAL
In the early 1980s, concern was widespread
within the European Community that the EC
countries were recovering very slowly, compared with the United States and Japan, from the
recessions of the late 1970s and were being
outstripped by the United States and Japan in
new high-technology industries. The conventional wisdom was that, even though tariff barriers among the member states had been dismantled more than a decade earlier, nontariflf barriers
and market fragmentation within the Community
were major impediments to EC economic
growth. Partly because of this view, in the first
half of the 1980s new initiatives were proposed to
reactivate the process of European integration.
Perhaps the most far-reaching of these proposals
was the draft treaty establishing a European
Union that the European Parliament adopted in
early 1984. This treaty had no chance of ratification by the member states; but it encouraged the
heads of the EC member states, who had previously renewed their commitment in general
terms to the goals set forth in the 1957 Treaty of
Rome, to take concrete action toward completion of the internal market. 1
By the mid-1980s, steps toward further integration of the EC market had become easier to take
because sustained economic growth had begun in
most of the EC countries after the recovery from
the 1982 recession. Moreover, the political situation had changed as governments that were
more strongly committed to free markets than
were their predecessors had come into power in
the United Kingdom (in 1979) and in Germany (in
1982).
1. The treaty that established the European Economic
Community (EEC), which is one of three European Communities established under three separate treaties, is generally
known as the Treaty of Rome. The European Coal and Steel
Community was established by a 1951 Paris treaty, and the
European Atomic Energy Community was established by
another Rome treaty in 1957. The term European Community
is commonly used to refer to all three European Communities; the EC institutions are common to all three Communities.
The 1985 White
Paper
All of these political and economic developments
created an environment in which the Commission that took office at the beginning of 1985, with
Jacques Delors as its president, could move
forward with proposals for economic integration
(see the box "Institutions of the European Community"). By mid-1985, the Commission had
prepared a white paper, Completing the Internal
Market, which the European Council subsequently adopted as the basis for the EC internal
market program. 2 The white paper identified 300
pieces of legislation (later revised to 279) that the
Community would have to enact to remove restrictions or to harmonize laws of member states.
It also set forth a timetable for the enactment of
each proposal that called for the entire program
to be in place by the end of 1992 (see the box
"Forms of EC legislation").
The white paper also announced a new strategy regarding the harmonization of national laws
and regulations. In place of the previous, unsuccessful attempt to achieve complete harmonization of standards at the Community level, the
Commission adopted an approach involving harmonization of only essential laws and regulations
(such as those affecting health and safety) for
both goods and services. Under the Commission's new approach, the harmonization of essential standards provides the basis for mutual
recognition by the member states of the equivalence and validity of each other's laws, regulations, and administrative practices that have not
been harmonized at the EC level. 3 An essential
element of such recognition is agreement not to
2. Commission of the European Communities, Completing
the Internal Market: White Paper from the Commission to
the European Council (Luxembourg: Office for Official Publications of the European Communities, 1985).
3. The term mutual recognition was used in the Treaty of
Rome only with regard to professional qualifications. Specifically, the treaty called for the Council to issue directives for
"the mutual recognition of diplomas, certificates and other
evidence of formal qualifications." See Treaty Establishing
the European Economic Community as Amended by the
Single European Act (hereafter Treaty of Rome), art. 57.
Treaties Establishing the European Communities, abridged
ed. (Luxembourg: Office for Official Publications of the
European Communities, 1987).
Mutual Recognition: Integration of the Financial Sector in the European Community
invoke differences in national rules to restrict the
access of goods and services.
Cassis de
Dijon
A 1979 decision by the European Court of Justice
interpreting the Treaty of Rome provided, at
least with regard to products, the legal basis for
the Commission's approach of mutual recognition. At issue was an article of the treaty that
prohibits in trade between member countries not
only quantitative restrictions on imports but also
"all measures having equivalent effect." In Cassis de Dijon, the Court found that Germany could
not prohibit the import of a liqueur that was
lawfully produced and sold in France solely
because its alcohol content, which was clearly
labeled, was too low for it to be deemed a liqueur
under German law. 4 The Court said that, even
though German national rules would have ap4. Rewe-Zentral AG v. Bundesmonopolverwaltung fur
Branntwein (Cassis de Dijon), Case 120/78, 1979 Eur. Ct.
Rpts. 649, 1979 Common Mkt. L. Rpts. 494.
593
plied equally to domestic and imported products, a member state may create a barrier to the
import of a product only when such a barrier is
necessary to satisfy "mandatory requirements"
such as the prevention of tax evasion, the
protection of public health, the ensuring of
fairness in commercial transactions, and the
protection of consumers. Moreover, any such
rule must be an "essential guarantee" of the
interest that is allowed to be protected. Without
such a justification, a member state may not
apply its own national rules to imported products that are lawfully produced and sold in
other member states.
In other words, although the Court did not use the
term, member states, by accepting each other's laws
regarding the production and sale of a product, are
to be governed by the principle of mutual recognition. In subsequent judgments overturning British
standards for milk, German standards for beer,
French standards for milk, and Italian standards for
pasta, the Court has continued to apply the test set
forth in Cassis de Dijon. With these decisions, as
well as with rulings in other areas, the Court has
Institutions of the European Community
The Commission
is the executive branch of the
European Community and has responsibility for
proposing legislation and for ensuring implementation of EC law by the member states. Commissioners are appointed by agreement among the
governments of the member states for four-year
terms.
The Council of Ministers, which consists of representatives of the governments of the member
states, is the decisionmaking body and enacts legislation proposed by the Commission. The presidency of the Council rotates among member states
every six months. Participants at Council meetings
change on the basis of the subject being considered.
For example, if banking legislation is being considered, the Council participants are the economic and
finance ministers. The "European Council" con-
NOTE. See generally Emile Noel, Working Together—
The Institutions of the European Communities (Luxembourg: Office for Official Publications of the European
Communities, 1988).
sists of the heads of state or government and meets
semiannually.
The European Parliament, which is elected directly
by the citizens of the member states, has an extremely
limited legislative function. It does, however, have the
final approval over the EC budget and over applications for membership in the Community and, with
regard to other matters, a consultative role in Council
decisions.
The European Court of Justice consists of thirteen
judges appointed by agreement among the governments of the member states for six-year terms. In
general, the Court has original jurisdiction in cases in
which the Commission or another Community institution is a party. Other actions are brought in national
courts but are referred to the European Court of
Justice for preliminary rulings on matters of EC law;
such rulings are binding on the national courts. (An EC
Court of First Instance was created in 1988 to hear
actions brought against Community institutions by EC
staff or by private parties in certain technical areas; the
European Court of Justice has appellate jurisdiction in
such cases.)
594
Federal Reserve Bulletin • September 1989
Forms of EC legislation
EC legislation can be in the form of regulations or
of directives. A regulation is binding in its entirety
and is directly applicable throughout the Community without any implementing legislation by the
member states. By contrast, a directive is addressed to the member states, which are obligated
to ensure that the result set forth in the directive is
achieved but have discretion as to the details of
implementation.
Most of the EC internal market legislation is in
the form of directives. Each directive specifies a
date by which member states must conform their
national laws to the provisions of the directive;
typically the states have two years to do so. There-
continued to play an important role in implementing
the internal market program.
The Single European
Act
Both the white paper's goal of implementing the
internal market by the end of 1992 and the principle
of mutual recognition were included in provisions of
the Single European Act, a 1986 agreement among
the EC member states that amended the Treaty of
Rome. 5 Although the act, like Cassis de Dijon, does
not use the term mutual recognition, it provides that
the Council "may decide that the provisions in force
in a Member State must be recognized as being
equivalent to those applied by another Member
State." 6
A major purpose of the Single European Act,
which became effective in July 1987, was to make
EC decisionmaking more efficient and thereby to
facilitate the completion of the internal market.
5. The member states of the European Community are
Belgium, Denmark, France, Germany, Greece, Ireland,
Italy, Luxembourg, the Netherlands, Portugal, Spain, and
the United Kingdom.
6. This authority is granted in the context of a provision
requiring the Commission, together with each member state,
to draw up during 1992 an inventory of national laws,
regulations, and administrative provisions within the scope of
the internal market program that have not been harmonized.
See Treaty of Rome, art. 100b, added by article 19 of the
Single European Act. See generally Jean De Ruyt, L'Acte
Unique Europien: Commentaire (Brussels: University of
Brussels, Institute of European Studies, 1987).
fore, to complete the internal market by the end of
1992, directives would need to be enacted by the
Community by the end of 1990.
If a member state does not conform its laws in
accordance with an EC directive, not only the
EC Commission but also in many cases an individual or a company may take legal action
against the member state. An individual or a
company may invoke rights under EC law in
national courts under the principle of "direct
effects," which was developed by the European
Court of Justice and has become an important
mechanism for ensuring implementation of EC
legislation.
To this end, the Single European Act replaced
unanimous voting with "qualified majority voting" for the Council's adoption of most harmonization measures necessary to achieve the internal market. Under qualified majority voting, the
number of votes that each member state exercises in the Council is weighted roughly according to its population. Fifty-four votes (out of a
total of seventy-six) are required to adopt legislation. Fiscal measures, such as the harmonization of taxes, however, still require unanimous
approval of the Council.
Other institutional provisions of the Single
European Act were designed to strengthen the
role of the European Parliament in EC decisionmaking; however, the Parliament's role remains
primarily consultative rather than legislative.
Under the new "cooperation procedure," which
applies to most measures involving harmonization, the Commission and the Council must take
into account amendments that the Parliament
proposes. However, the Commission retains
considerable power because a parliamentary
amendment that the Commission does not support requires the Council's unanimous approval.
If the Parliament rejects a measure in its entirety, the Council may enact it only by unanimous vote (see the box "The 'cooperation procedure' ").
In other areas, the Single European Act set forth
goals that the Treaty of Rome either had stated
much more generally or had not included. In the
Mutual Recognition: Integration of the Financial Sector in the European Community
monetary area, the act encouraged further cooperation among the member states to ensure the convergence of economic and monetary policies and
made it clear that such cooperation might require
institutional changes. The act also committed the
member states to encouraging improvements in social policy with regard to the health and safety of
workers, to strengthening the "economic and social
cohesion" of the Community (that is, reducing regional disparities), to promoting research and technological development, and to preserving the environment.
The Legislative Program
the Internal
Market
for
Completing
In its 1985 white paper, the Commission classified into three groups the measures that would be
necessary to complete the internal market:
1. Removal of physical barriers, such as customs
checks at frontiers for goods and for individuals.
2. Removal of technical barriers, such as differences in essential national health and safety standards for individual products. Other goals include
open access for bidding on public contracts, removal of restrictions on capital movements, removal of restrictions and harmonization of essential
standards for the provision of financial services,
recognition of educational and professional qualifications, abolishment of cartels in transportation,
establishment of a Community policy for mergers
595
and acquisitions and of a Community trademark and
patent system, and development of a uniform policy
on government subsidies.
3. Removal of fiscal barriers, such as differences in value-added tax rates.
The progress toward completion of the internal
market has been impressive, particularly because
what has already been achieved was only a few
years ago generally viewed as unachievable. As
of mid-July 1989, the Commission had submitted
to the Council more than four-fifths of the 279
pieces of legislation identified in the white paper.
The Council had acted on about half of the white
paper measures: It had taken final action on 130
pieces of legislation (5 more await enactment),
and it had adopted a common position on another
5 proposals. However, some of the remaining
proposals—for example, harmonization of indirect taxes and removal of border controls—are
particularly complicated or controversial.
CREATION OF A "EUROPEAN
FINANCIAL AREA ''
An important part of the EC program to complete
the internal market is the creation of a "European
Financial Area," which involves eliminating restrictions on the movement of capital among the member
states and establishing a framework for a Communitywide market for financial services.
The "cooperation procedure"
The cooperation procedure, which is used only for
measures that may be adopted by a qualified majority of the Council, involves two readings of the
legislation by the European Parliament. When the
EC Commission submits a proposal to the Council,
the proposal is also sent to the Parliament for a first
reading. After obtaining Parliament's opinion and
receiving any revisions proposed by the Commission, the Council adopts a "common position."
The Council must then submit its common position
to Parliament for a second reading.
If the Parliament accepts the proposal (or fails to act
within three months), the Council must adopt the
measure in accordance with its common position.
If the Parliament rejects the Council's common
position, the Council may adopt the proposal only by a
unanimous vote.
If the Parliament proposes amendments,
within
one month the Commission must reexamine the
proposal and submit to the Council a revised
proposal that either incorporates the Parliament's
amendments or justifies their omission. The Council may adopt the Commission's revised proposal
by a qualified majority. Unanimity is required for
the Council to adopt Parliamentary amendments
that were not accepted by the Commission or
otherwise to amend the Commission's revised
proposal. If the Council does not adopt the revised proposal within three months, the proposal
is deemed not to have been adopted.
596
Federal Reserve Bulletin • September 1989
Removal of Restrictions
Movements
on
Capital
Without the free movement of capital, the integration of securities markets and the crossborder provision of financial services would be
impossible. At present, four countries—the
United Kingdom, Germany, the Netherlands,
and Denmark—have fully liberalized capital
movements vis-a-vis both other member states
and third countries (that is, countries outside the
Community). Four other countries—Belgium,
Luxembourg, France, and Italy—are already
close to doing so.
Under a directive adopted in June 1988, eight
EC member states must eliminate any remaining
capital controls by July 1, 1990. (Spain and
Ireland have extensions until 1992; extensions
until 1995 are possible for Portugal and Greece.)
This directive was the final step in a lengthy
process of liberalization that began in the early
1960s, was set back by restrictions imposed by
member states during the economic difficulties of
the 1970s, and was reactivated in the early 1980s
by a major Commission initiative. With regard to
third countries, the 1988 directive states that the
EC countries "shall endeavor to attain the same
degree of liberalization" of capital movements
that applies within the Community to capital
movements to and from non-EC countries.
In response to concerns of some member
states, the Community included safeguards in the
plan for the removal of remaining capital controls. One involves creation of a new mediumterm loan facility for member states experiencing
difficulties with their balance of payments. Another consists of a clause permitting a member
state to reimpose controls in the event of a
serious exchange crisis. Under this provision, a
member state could reimpose controls, subject to
subsequent approval by the Commission, for a
maximum of six months. Because the Community is already close to achieving the free movement of capital, the concern about safeguards
does not appear to stem from a belief that the
lifting of the remaining controls would trigger a
crisis. Rather, it appears to stem from a concern
that a commitment not to impose restrictions on
capital movements could hamper response to a
crisis generated by an exogenous shock. So long
as capital is free to move in some way in response to market forces, the opening of an additional channel for such movement would, by
itself, be unlikely to precipitate a major outflow.
Nevertheless, some countries, particularly
France and Italy, are concerned that the removal
of their remaining exchange controls will create a
serious potential for tax evasion because of existing differences in taxes on interest and dividend payments within the Community. In early
1989, the Commission submitted proposals that
would require member states to impose a minimum withholding tax of 15 percent on interest
income paid to any EC resident on domestically
issued bonds and bank deposits. However, the
proposal appears to have been dropped as it
became clear that the unanimity required for
Council action could not be achieved.
Beyond financial integration, the liberalization
of capital movements, together with other aspects of the internal market program, raises the
issue of exchange rate relationships among the
member states. Within the Community there is
considerable debate as to whether the closer
coordination of monetary policy and the
strengthening of the European Monetary System
will ensure sufficient stability of exchange rates
or whether establishing an economic and monetary union will be necessary. In the context of the
European Community, "economic union" refers
not only to the integration of markets but also to
some form of coordinated or perhaps centralized
decisionmaking regarding macroeconomic policy
objectives. A true monetary union would require
irrevocably fixed exchange rates, which could
take the form of a common currency, and some
mechanism for conducting a common monetary
policy, perhaps a European central bank.
At their June 1989 summit meeting in Madrid,
the heads of the EC member states restated their
determination "to progressively achieve Economic and Monetary Union." They agreed to
begin, as of July 1990, the first of three stages
recommended in the report of the Delors committee, which had been established at the Hanover summit meeting a year earlier, and to carry
out preparatory work regarding subsequent
stages. However, the details of the plan and the
timetable remain unresolved. In any event,
though economic and monetary union may be a
Mutual Recognition: Integration of the Financial Sector in the European Community
longer-run consequence of completing the internal market, the achievement of such union is not
part of the internal market program.
Financial
Services
and
Markets
The EC plan to complete the internal market includes a comprehensive program for the financial
sector. The program is designed to provide sufficient
harmonization of essential rules to permit mutual
recognition of the equivalence and validity of national rules and practices that have not been harmonized and to permit the acceptance of home-country
control. This section offers an overview of the EC
program for financial services and markets, including the EC reciprocity proposals.
Banking. The Second Banking Directive, on
which the Council adopted a "common position"
in July 1989, is viewed as the centerpiece of EC
banking legislation because it is a comprehensive
proposal dealing with the powers and the geographic expansion of banks within the Community. Under this directive, a credit institution
could provide services throughout the Community—either through branches or across borders—under home-country control without obtaining an authorization from the host country. 7
The directive also sets forth a list of permissible
activities for a credit institution (defined as an
institution that receives deposits or other payable
funds from the public and grants credits for its
own account) that is based on a universal banking model and includes all forms of securities
activities but not insurance activities. 8 If a bank's
7. The term cross-border services refers to the provision of
services by a credit institution located in one member state to
consumers of these services in another member state without
the establishment of a branch in the host state. Within the
European Community, before the recent series of measures
to remove remaining exchange controls, such controls were a
major barrier to the provision of banking services across
borders. At present, some host-country restrictions on products or instruments, as well as national rules prohibiting the
solicitation of business by foreign entities, also have the
effect of limiting the provision of banking services across
borders.
8. The listed activities are as follows: (1) accepting deposits
or other payable funds from the public; (2) lending, including
consumer credit, mortgage lending, factoring, and financing
of commercial transactions; (3)financialleasing; (4) providing
money transmission services; (5) issuing and administering
597
home country permits a listed activity, the bank
may conduct that activity anywhere in the Community, regardless of host-country law.
The European Community plans to implement
the Second Banking Directive no later than January 1, 1993, simultaneously with measures to
harmonize bank capital standards similar to the
framework developed by the Basle Committee
on Banking Regulations and Supervisory
Practices. 9 These measures consist of the "own
funds" directive, which defines capital, and the
solvency-ratio directive, which specifies riskadjusted capital ratios. Additional harmonizing
measures—including limitations on bank ownership of nonfinancial institutions, initial capital
requirements, and provisions relating to the identity, extent of holdings, and suitability of major
shareholders—are contained in the Second
Banking Directive. Other measures, such as consolidated supervision and common accounting
standards, are already in place. Measures relating to deposit insurance and to the reporting of
large exposures are in the form of Commission
recommendations (which are not binding), with
legislation to be proposed in the future.
Investment Services. The EC program for the
securities sector encompasses two areas: first, rules
applicable to firms offering investment services to
their customers; and second, rules applicable to the
markets on which securities are traded. In general,
the latter area involves more traditional objectives
means of payment (for example, credit cards, travelers
checks, and bankers drafts); (6) issuing guarantees and commitments; (7) trading for own account or for account of
customers in (a) money market instruments (checks, bills,
certificates of deposit, and so forth), (b) foreign exchange,
(c) financial futures and options, (d) exchange and interest
rate instruments, and (e) securities; (8) participating in
share issues and providing services related to such issues;
(9) providing management consulting services and advice
with respect to investments, mergers, and acquisitions;
(10) money brokering; (11) providing portfolio management
and advice; (12) safekeeping and administration of securities; (13) providing credit reference services; and (14) providing
safe custody services.
9. The committee comprises the bank supervisory authorities from twelve major industrial countries: Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Sweden, Switzerland, the United Kingdom, and the
United States. The Basle guidelines provide for partial implementation of minimum risk-adjusted capital ratios by
year-end 1990 and full implementation by year-end 1992.
598
Federal Reserve Bulletin • September 1989
of investor protection and efficient market functioning whereas the former also involves systemic risks
comparable to those in banking.10
The area of investment services presents more
difficulties for the Community than that of banking because the process of international harmonization in investment services is much less
advanced and no equivalent of the Basle Accord
on bank capital standards exists for securities
firms. Also, the regulatory structures for investment services vary much more among the member countries than do those for banking services,
and there is no committee of regulators from
different countries comparable to the Basle Committee on Banking Regulations and Supervisory
Practices. Moreover, in investment services,
even more than in banking, the European Community confronts the problem of trying to harmonize essential elements of national regulatory
frameworks while those structures are themselves changing in response to globalization and
innovation in the financial sector. 11
In December 1988, the Commission proposed the
Investment Services Directive, which is the counterpart of the Second Banking Directive. Under this
directive, investment firms, like credit institutions,
would be able to provide services across borders
and establish branches throughout the Community
without obtaining authorization from the host country. To ensure that investment firms are able to
compete effectively in the host country, the directive also provides for the liberalization of rules
governing access to stock exchanges and to financial
futures and options exchanges.
In contrast to the Second Banking Directive, the
proposed Investment Services Directive adopts a
functional rather than an institutional approach to
defining an investment firm. Whereas a credit institution is defined separately from the activities in
which it is allowed to engage, an investment firm is
10. See generally Organisation for Economic Co-operation
and Development, "Arrangements for the Regulation and
Supervision of Securities Markets in OECD Countries,"
Financial Market Trends, vol. 41 (Paris: OECD, November
1988), pp. 17-38.
11. For a discussion of regulatory approaches to financial
services, see Tommaso Padoa-Schioppa, "The Blurring of
Financial Frontiers: In Search of an Order" (paper presented
at Commission of the European Communities Conference on
Financial Conglomerates, Brussels, March 14-15, 1988).
defined as a firm that engages in any of the activities
listed in the directive. These activities include brokering, dealing as principal, underwriting, market
making, providing portfolio management services
and investment advice, and providing safekeeping
services (other than in conjunction with management of a clearing system) with respect to any of the
instruments specified by the directive. The instruments specified are transferable securities (including
unit trusts), money market instruments (including
certificates of deposit and Eurocommercial paper),
financial futures and options, and exchange rate and
interest rate instruments.
Investment firms that engage in these activities
include firms that are also credit institutions that
would be governed by the Second Banking Directive. The proposed Investment Services Directive takes account of this overlap by specifying that only certain articles of the directive
would apply to investment firms that are also
credit institutions.
The Commission is still trying to develop a
directive on market risk for securities firms that
would be the equivalent of the directives on
capital adequacy for banking institutions. The
Commission hopes that such a directive will
come into force simultaneously with the proposed Investment Services Directive. The market risk directive is also likely to set forth requirements for the securities activities of banks
that would supplement the capital-adequacy requirements already in place.
Securities Markets. The EC program with regard
to securities markets has been under way since the
early 1980s, and a number of directives have already
been enacted. These directives are designed to
break down barriers between national stock exchanges by increasing transparency and ensuring
access for issuers to securities markets throughout
the Community. One group of measures deals with
listed securities and includes a 1987 directive providing for mutual recognition of the "listing particulars" (that is, disclosure documents) of the company's home country. A directive dealing with
unlisted securities other than Eurosecurities, enacted in April 1989, provides for mutual recognition
of prospectuses among the member states. Both
directives provide that the Community may enter
into negotiations with third countries to achieve
Mutual Recognition: Integration of the Financial Sector in the European Community
mutual recognition of home-country disclosure requirements that extends beyond the borders of the
Community.
The EC program for securities markets includes a directive regarding insider trading, on
which the Council of Economic and Finance
Ministers adopted a common position in June
1989. The Commission has also issued a recommendation that relates to a European code of
conduct for securities transactions. Although the
1985 white paper discussed creating an electronically linked, Communitywide trading system for
securities of international interest, no specific
proposals have been put forward.
An EC directive on cross-border sales of a
particular securities product—open-ended unit
trusts or "undertakings for collective investment
in transferable securities" (UCITS)—will become
effective in October 1989. At that time, UCITS
(which are similar but not identical in legal form to
mutual funds) that meet the minimum standards set
forth in the directive may be sold throughout the
Community under home-country control. However,
individual member states may continue to impose
their own rules with regard to marketing and advertising, provided that such rules are applied on the
basis of national treatment and can be justified by
the "public interest." To date, no proposals regarding harmonization of tax treatment of unit trusts
within the Community have been put forward. As a
result, upon implementation of the directive, unit
trusts marketed by entities located in Luxembourg,
which will continue to benefit from tax treatment
more liberal than that in other member states, may
be be sold throughout the Community.
Insurance. In contrast to the banking and securities sectors, the insurance industry in the European
Community, other than in the United Kingdom, has
been relatively protected from outside competition
and has not been part of any globalization process.
(Reinsurance, which has traditionally been an international business, is the exception.) In general, the
member states have imposed a multitude of restrictions on insurance services provided through
branches or agencies and on services provided
across borders. Because existing barriers to the
creation of a Communitywide regulatory framework
are much greater for insurance than they are for the
rest of the financial sector, in the insurance sector it
599
appears to be politically necessary for the Community to proceed more slowly toward the harmonization that is necessary to permit mutual recognition
and home-country control. Accordingly, the directives for insurance that were proposed or adopted in
1988 are much less far-reaching than those for
banking and investment services.
In contrast to the banking and investment
services directives, both the Second Nonlife Insurance Directive (enacted in 1988) and the proposed Second Life Insurance Directive deal only
with the cross-border provision of services and
do not provide for Communitywide branching of
insurance companies under home-country control. Unlike branches of EC banks and investment firms, branches of EC insurance companies
will continue to be authorized and regulated by
the host state in accordance with provisions of
EC directives, although the home state has responsibility for ensuring that the company meets
overall solvency standards.
Moreover, again in contrast to the directives
on banking and investment services, the insurance directives adopted or proposed during 1988
distinguish among customers on the basis of the
degree of protection that is deemed to be required. The nonlife insurance directive provides
liberalization only for wholesale customers; specifically, the cross-border provision of services
under home-country control is permitted only for
"large risks," defined primarily in terms of sales,
assets, and the number of employees. Similarly,
the proposed life insurance directive provides
liberalization only for individuals who take the
initiative in seeking life insurance from a company in another state.
Reciprocity. The Second Banking Directive
and the proposed Investment Services Directive
contain reciprocity clauses, as does the proposed
Second Life Insurance Directive. (The Second
Nonlife Insurance Directive, which was enacted
earlier, does not contain a reciprocity clause, but
the Community reportedly plans to amend the
directive to include one.) Under the EC reciprocity provisions, a non-EC financial firm would not
be permitted to establish or acquire a subsidiary
in any member state unless the firm's home
country granted reciprocal treatment to similar
financial institutions from all member states. The
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Federal Reserve Bulletin • September 1989
meaning of the reciprocity clauses and the circumstances under which they might be applied
have been the subject of considerable discussion
both within the Community and abroad. 12
The reciprocity clauses apply only to entry to
the EC market through the subsidiary form of
organization. Direct branches of non-EC financial institutions would not be subject to EC
reciprocity requirements. Such branches would
not benefit from the provisions of the directives
permitting Communitywide expansion and would
continue to be authorized and regulated separately by each host state. Existing subsidiaries of
non-EC financial institutions would, in general,
be grandfathered and would be treated like any
other financial institution in the member state in
which they were chartered.
The reciprocity provision in the Second Banking Directive is expected to serve as the model
for the reciprocity provisions in the other financial services directives. Under this provision,
before the effective date of the directive and
periodically thereafter, the Commission would
make a determination—analogous to the studies
on national treatment in the banking and securities sectors conducted by the U.S. government—
regarding the treatment of EC banks by third
countries. The reciprocity provision distinguishes between two sets of criteria under which
the Commission could take action on the basis of
such studies or "on the basis of other information:" one that could be used to limit or bar entry
to the EC market or to begin negotiations with
the threat of such action and another that could
be used as a goal in negotiations without any
threat of retaliatory action.
The first set of criteria is being widely interpreted
as reciprocal national treatment, although the concept of effective market access is also included. The
EC Commission has stated that the standard will be
"genuine national treatment," that is, de facto as
well as de jure national treatment. If it determines
that EC credit institutions in a third country "do not
receive national treatment offering the same com-
12. For an analysis of the different concepts of reciprocity
and their relation to the approach of mutual recognition being
used as the basis for integration within the Community, see
Sydney J. Key, "Financial Integration in the European
Community," section III.B..
petitive opportunities as are available to domestic
credit institutions and that the conditions of effective
market access are not fulfilled," the Commission
may initiate negotiations with the third country to
achieve such treatment. The Commission may also
require a host member state to "limit or suspend"
decisions on applications by banks from the third
country for up to three months. The Commission
may take the latter action only in accordance with a
complicated "comitology" procedure that provides
a role for the Banking Advisory Committee and for
the Council, with veto power granted to a simple
majority of the Council.13 An extension of the threemonth period would require a qualified majority
vote of the Council.
The second set of criteria involves treatment
comparable to that offered by the European
Community. If the Commission finds that a third
country does not grant EC banking institutions
"effective market access comparable to that
granted by the Community to credit institutions
from that third country," it may submit proposals to the Council for an appropriate mandate to
negotiate such access. The Council would act on
such proposals by a qualified majority. The Commission is not granted any authority to limit entry
on the basis of this standard.
The reciprocity provision in the Second Banking Directive is generally viewed as an improvement over earlier versions because it no longer
contains an automatic review procedure, it includes a grandfathering provision, and no sanctions appear to be contemplated against countries that provide EC banks with national
treatment. U.S. officials have, however, consistently expressed their concern about the unfortunate precedent being set by the introduction of
13. Under the comitology procedure used in this situation,
the Commission must submit its proposed action to the
Banking Advisory Committee, which consists of representatives of the central banks and finance ministries of the
member states. If a qualified majority of the committee
approves the Commission's proposed action, the Commission may proceed. If such approval is not obtained, the
Commission must submit its proposal to the Council, which
may either approve the measure by a qualified majority vote
or amend the proposal by a unanimous vote. If the Council
does not act within three months, the Commission may
proceed—but only if a simple majority of the Council does
not oppose the measure.
Mutual Recognition: Integration of the Financial Sector in the European Community
any kind of reciprocity provision—even reciprocal national treatment—for financial services. 14
THE CONCEPT OF MUTUAL
RECOGNITION
The goal of the internal market program for the
financial sector is to create a single, unified
market by removing barriers to the provision of
services across borders, to the establishment of
branches or subsidiaries of EC financial institutions throughout the Community, and to transactions in securities on Community stock exchanges. In determining the best method of
achieving these goals, the Community must decide what principles should be used to establish a
regulatory, supervisory, and tax structure that
would both facilitate the integration of Community financial markets and satisfy the public policy interests of the member states with regard to
safety and soundness, monetary policy, market
stability, and consumer and investor protection.
The starting point for the Community was the
principle of nondiscrimination, a term that in this
context refers to the prohibition of discrimination
between domestic and foreign residents based on
nationality. (By contrast, in the context of trade
and capital movements, nondiscrimination usually refers to the prohibition of discrimination
among foreign residents of different nationalities;
the concept is similar to that of a most-favorednation clause, that is, benefits of any liberalization must be extended to all foreign countries on
a nondiscriminatory basis.) Although the right of
establishment and the right to provide services in
other member states without being subject to any
restrictions based on nationality were set forth in
the Treaty of Rome, legislative action by the
Community and decisions of the European Court
14. See, for example, Manuel Johnson, Vice Chairman,
Board of Governors of the Federal Reserve System, "Altering Incentives in an Evolving Depository System: Safe Banking for the 1990s" (remarks before the Conference on Bank
Structure and Competition, Federal Reserve Bank of Chicago, Chicago, Illinois, May 4, 1989); and M. Peter McPherson, Deputy Secretary of the Treasury, "Global Competition
in Financial Services: A View from Washington" (speech
before the Fifth Annual San Francisco Institute of the National Center on Financial Services, University of California,
Berkeley, March 2, 1989).
601
of Justice have been necessary to give practical
effect to these rights.
Nondiscrimination by an EC member state
amounts to offering national treatment to individuals
and firms from other member states. Under a policy
of national treatment, foreign firms have the same
opportunities for establishment and the same powers with respect to their host-country operations
that their domestic counterparts have; similarly,
foreign firms operating in a host country are subject
to the same obligations as their domestic counterparts. The OECD's National Treatment Instrument
defines national treatment as treatment under hostcountry "laws, regulations, and administrative practices . . . no less favorable than that accorded in like
situations to domestic enterprises." The expression
"no less favorable" appears to allow for the possibility that exact national treatment cannot always be
achieved and that any adjustments should be resolved in favor of the foreign firm; the wording is not
meant to endorse an overall policy of "better than
national treatment." The principal purpose of a
policy of national treatment is to promote competitive equality between domestic and foreign banking
institutions by allowing them to compete on a "level
playing field" within the host country.
If the European Community had adopted national treatment as an approach to financial integration, the result would have been a level playing field for foreign and domestic institutions
within each national market. But, even though
each country's rules would have been applied on
a nondiscriminatory basis, twelve separate markets with different rules in each would still have
existed. Moreover, although national treatment
removes barriers to the provision of services by
ensuring fair treatment for entry and operation
within a country, it does not by itself address two
important issues: the extent to which multinational cooperation or agreement is necessary to
regulate and supervise financial activities conducted internationally and the de facto barriers
created by the lack of multinational harmonization of regulatory structures. The Community's
program attempts to deal with these issues.
One approach, which, as noted previously, the
Community originally used with regard to products, is to require member states to modify their
differing national laws and regulations in order to
implement comprehensive, uniform standards
602
Federal Reserve Bulletin • September 1989
established by the Community. This approach of
complete harmonization was abandoned as involving too much detailed legislation at the Community level and as totally impractical to achieve
within any reasonable period.
The Community's solution was to adopt the approach of mutual recognition. This approach requires each country to recognize the laws, regulations, and administrative practices of other member
states as equivalent to its own and thereby precludes
the use of differences in national rules to restrict
access. The concept of mutual recognition goes well
beyond that of national treatment. Under a policy of
mutual recognition, some member states in effect
agree to offer treatment that is more favorable than
national treatment to firms from other member
states.
Mutual recognition cannot simply be decreed
among a group of countries with widely divergent
legal systems, statutory provisions, and regulatory and supervisory practices. Mutual recognition of rules that differ as to what a country
regards as essential elements and characteristics
would be politically unacceptable. As a result, a
crucial prerequisite for mutual recognition is the
harmonization of essential rules. If member
states consider certain rules essential but cannot
reach agreement on initial harmonization, they
may agree explicitly to exclude such rules from
mutual recognition and home-country control
until agreement can be reached.
In the financial sector, the process of harmonization involves identifying the rules that are
essential for ensuring the safety and soundness of
financial institutions and the rules that are essential for the protection of depositors, other consumers of financial services, and investors. It
also involves determining how detailed the harmonization of these rules must be. For example,
one question is whether specifying that the major
shareholders of a financial institution must be
determined to be "suitable" by home-country
authorities is sufficient or whether more specific
criteria are needed.
Home-Country
Control
A corollary of mutual recognition is homecountry control. If national laws, regulations,
and supervisory practices that have not been
harmonized at the EC level are to be accorded
mutual recognition, home-country rules and supervisory practices must be accepted as controlling the operations of branches and the crossborder provision of services by financial
institutions. However, the principle of homecountry control adopted by the Community is not
absolute. In accordance with judgments of the
European Court of Justice and with EC directives, the host country retains the right to regulate branches or the cross-border provision of
services to the extent that doing so is necessary
to protect the public interest.
In practice, the division of responsibility between home- and host-country regulators may be
rather complicated. In general, the EC directives
that have been proposed or adopted in the area of
financial services provide for home-country control for initial authorization and for ongoing prudential supervision. However, various aspects of
the day-to-day conduct of business could be
subject to host-country control on a national
treatment basis under, for example, consumer
protection laws that are necessary to protect the
public interest but have not been harmonized by
the Community. In some directives, such hostcountry control is strictly limited or is prohibited
either because the extent of harmonization of
investor protection rules at the EC level is considered sufficient (as in the cases of securities
prospectuses and unit trusts) or because the
wholesale customers covered by the directive are
deemed not to require host-country protection
(as in the case of cross-border nonlife insurance
services). As a result, under the EC directives on
securities markets, a company headquartered in
Greece and listed on the Greek stock exchange
could, for example, be listed on the London
stock exchange under Greek rules that satisfied
the EC minimum standards but provided prospective British investors with less information
than that required of a U.K. firm.
The European Court of Justice has already
played a major role in establishing a public
interest test for host-country regulation and in
determining whether that criterion has been met,
and it will undoubtedly continue to do so. In the
case of banking, the public interest of the host
state appears to be particularly strong because of
the role of banks in the credit, monetary, and
Mutual Recognition: Integration of the Financial Sector in the European Community
payments systems and because banks are within
the so-called safety net of deposit insurance and
of lending of last resort by the monetary authorities. Rather than relying on the overall public
interest exception to home-country control, the
Second Banking Directive includes explicit exceptions for rules relating to the conduct of
host-country monetary policy. In line with the
Revised Basle Concordat, an exception to the
principle of home-country control is also provided for the supervision of liquidity. In practice,
of course, questions are likely to arise as to
whether particular restrictions are truly necessary for purposes of monetary policy and
whether particular regulations are addressed
toward liquidity or solvency.
Provision of Services through
through Branches, and across
Subsidiaries,
Borders
Analyses of issues relating to international trade in
financial services usually draw a distinction between
providing services through the establishment of subsidiaries and branches and providing them directly
across borders. In general, more attention has been
devoted to issues of establishment, whereas the
cross-border provision of services has been viewed
within the context of removing exchange controls.
Recently, however, particularly within the Organisation for Economic Co-operation and Development, where much of the multinational work on
trade in financial services has taken place, increased
attention has been given to cross-border services
that are not within the scope of the liberalization of
capital movements—for example, portfolio management and investment advice.
The conceptual grouping of services into those
provided through the establishment of subsidiaries
and branches and those provided across borders is
not of critical importance when both are being
discussed in the context of a policy of national
treatment. However, within the European Community, where the overall approach to intra-Community trade in services is mutual recognition, the
conceptual grouping does matter. In the insurance
sector, the EC directives retain the conventional
line between services provided through branches
and subsidiaries and those provided across borders.
In directives concerning banking and investment
services, however, the EC Commission has in effect
603
drawn a line between services provided through
subsidiaries and those provided through branches or
across borders.
Under the EC program for financial integration, subsidiaries of financial firms headquartered
in other member states will continue to be governed by the principle of national treatment. (The
right of a bank from one member state either to
establish or to acquire a bank in another member
state is, at least in theory, guaranteed by the
Treaty of Rome.) As a result, such subsidiaries
are treated in the same manner as other incorporated entities in the host state. For example, a
German banking subsidiary of a U.K. bank could
branch throughout the Community under German rules with respect to permissible activities.
The EC approach to the provision of services
through branches and across borders is quite
different. Mutual recognition and home-country
control are made possible through the harmonization of essential rules applicable to the parent
banking or investment firm. Such harmonization
includes, for example, general criteria for homecountry authorization and supervision; the establishment of minimum capital requirements for
banks and investment firms; and, for banks,
agreement on a list of activities considered integral to banking.
Under a regime of mutual recognition and
home-country control, the powers of, for example, a Greek branch of a U.K. bank would be
determined by U.K. rules in accordance with the
list specified by the Community, not by Greek
rules. Similarly, Greek branches of banks from
other EC countries would be governed by their
respective home-country rules. As a result, a
branch of a bank from another member state
could receive treatment that is better than national treatment from Greece. Alternatively, if
the bank's home country had rules with respect
to bank powers that were more restrictive than
those of Greece, the bank's Greek branch could
receive treatment that is worse than national
treatment in Greece.
In theory, a Greek bank (or a bank from any
EC country) could establish a subsidiary bank in
London, and the London subsidiary could
branch into Greece under home-country (that is,
U.K.) control. The Greek branch of the London
subsidiary of a Greek bank might thus have
604
Federal Reserve Bulletin • September 1989
broader powers to conduct activities in Greece than
would its parent bank. Some EC officials assert that
in practice this situation would not arise because the
prior consultation among the supervisory authorities
regarding the establishment of subsidiaries that is
required by the Second Banking Directive would
prevent such byzantine organizational structures. In
any event, the potential for such structures could
lead to increased pressure for regulatory convergence.
Regulatory
Convergence
The EC approach of mutual recognition could
result, at least in the short run, in competitive
inequalities and fragmentation of markets. With
regard to financial services, however, the Community assumes that over the longer run market
forces will create pressure on governments that
will lead to a convergence of additional national
rules and practices that have not been harmonized at the EC level. Pressures for regulatory
convergence within the Community would arise
both from the absence of restrictions on capital movements and from the regulatory advantages enjoyed by branches of banks and of investment firms from other member states and
also by the head offices of such banks and
investment firms in providing services across
borders.
In the financial sector, the Community is using
the principle of mutual recognition as a pragmatic
tool that, together with market forces, is expected to result in a more unified, less restrictive
regulatory structure. The process is interactive:
Mutual recognition requires initial harmonization, and additional harmonization results from
mutual recognition. In adopting the approach of
mutual recognition in the financial area, the Community is in effect using trade in financial services as a lever to arbitrage the regulatory policies of the member states.
Regulatory convergence is particularly likely
to occur with regard to bank powers because the
Community has reached a theoretical consensus
on what activities are permissible for banks. In
effect, the member states have agreed upon a
goal for regulatory convergence. Banks permitted by their home country to engage in any of the
activities listed in the Second Banking Directive
are specifically permitted to engage in such activities anywhere in the Community through a
branch or through cross-border provision of services. As a result, although the Community has
not required governments to give their banks the
powers on the list, it has created a situation in
which regulatory convergence toward the EC list
of activities as a result of market forces seems
almost inevitable. 15 Other areas, particularly if
the model for convergence has not been specified
in advance, could be more complicated.
An example of the absence of agreement on a
goal for regulatory convergence, namely, that
credit institutions should be permitted to become
members of stock exchanges, may explain a
notable exception to the principle of mutual
recognition in the EC proposals for the financial
sector. Under the Commission's proposals, in
accordance with the principle of mutual recognition, a host state must ensure that a branch of an
investment firm that is a stock exchange member
in its home state is permitted to become a member of the host country's stock exchange. By
contrast, a branch of a credit institution, even if
the credit institution is a member of a stock
exchange in its home country, is governed by a
policy of national treatment. As a result, if a host
member state does not allow its own credit
institutions to be members of its stock exchange,
it is not obligated to admit a branch of a credit
institution chartered in another member state.
Such a credit institution could gain access to the
host-country exchange only through a subsidiary
investment firm or through a branch of such a
firm.
Competitive pressures associated with crossborder provision of services, together with the
absence of restrictions on capital movements,
might over time also contribute to some convergence of regulations that remain exclusively under host-country control. One likely area of
convergence is the elimination of any remaining
interest rate ceilings, although the primary factor
in removal of such limitations may be the ongo-
15. Some member states may continue to require certain
securities activities to be conducted in subsidiaries; but, in
contrast to the situation within the United States, such
subsidiaries may be held by the bank itself and may be funded
by the bank.
Mutual Recognition: Integration of the Financial Sector in the European Community
ing process of deregulation in this area, including
the development of alternative financial instruments. Another possible development is some
move toward convergence of the effective tax
imposed by reserve requirements, that is, the
level of such requirements and the extent, if any,
to which interest is paid on reserve balances.
However, other factors, such as differences in
corporate taxation among the member states,
also affect the relative tax treatment of banks.
Besides leading to a regulatory convergence
that would liberalize rules such as those relating
to bank powers, market pressures could lead to
competition in laxity among supervisory authorities. Such competition could occur either with
regard to standards that have not been harmonized or that have been harmonized only in
general terms or with regard to the enforcement
of agreed-upon standards. Moreover, market
pressures could prevent governments from imposing or maintaining standards stricter than the
minimums set forth in the directives, even
though governments are usually permitted to do
so. The EC view is that no major problems will
arise with regard to competition in laxity because
the scope of harmonization is sufficiently broad
and because the minimum standards that the
Community has adopted are sufficiently high.
Problems would also be less likely to arise the
greater the theoretical agreement among the
member states as to the line between liberalization and laxity—that is, the distinction between
national rules that have primarily the effect of
imposing barriers to trade in services and national rules that are necessary for prudential
purposes or for consumer protection. For example, a consensus exists within the Community
that permitting all forms of securities activities to
be conducted in a bank or its subsidiary is a
positive, liberalizing measure.
A different possibility is that the market may
place a value on national standards that are more
stringent than those required by EC directives.
Whereas governments are obligated to accord
mutual recognition to differing national standards
that have not been harmonized, private firms and
individuals are under no such obligation. Indeed,
in a more competitive marketplace, firms and
individuals may have even greater scope to exercise their preferences. For example, customers
605
might consider a strictly regulated bank or securities firm of one member state to be preferable to
institutions authorized and supervised by authorities of another member state even though the
latter institutions might offer a price advantage.
The financial sector may be particularly suited
to the interactive process of mutual recognition
and harmonization of regulatory frameworks.
One reason is the existence, apart from the EC
program, of an ongoing internationalization of
financial services and markets. This process has
already led to cooperation among the major
industrial countries with regard to bank supervision and to agreement on basic harmonization of
national standards with regard to bank capital.
Thus, market pressures for regulatory convergence in the banking sector exist well beyond the
borders of the Community.
Another reason the financial sector may be particularly suited to an interactive process of basic
harmonization and mutual recognition is that the
rules apply primarily to the providers of financial
services; by contrast, in the product sector, standards apply principally to the products themselves.
Partly because of the intangible nature of the service
being provided, the financial sector can adapt
quickly to changes in the regulatory or market
environment. Technological developments can be
rapidly assimilated, and innovation in instruments
or practices can occur with considerable speed. This
situation contrasts sharply with that of the product
area, in which long periods of research and development may be necessary or even a simple change
in standards can require a lengthy period of implementation.
As a result, in the financial sector the approach
of harmonizing some basic standards and letting
market forces produce additional harmonization
appears easier. If market forces do not produce
further harmonization and if the member states
agree that such harmonization is necessary, it
can probably be accomplished at a later stage
without major dislocations. However, because of
the substantial public policy interests involving
macroeconomic policy, safety and soundness,
and stability of markets that are inherent in the
financial sector, in addition to consumer protection, a greater degree of harmonization than is
necessary in the nonfinancial sector may be
required to make mutual recognition and home-
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Federal Reserve Bulletin • September 1989
country control acceptable to the member states.
In any event, after the implementation of the EC
program for basic harmonization of the framework for financial services, remaining differences
in national rules that create significant barriers
could be removed not only as a result of market
pressures or additional harmonization but also as
a result of actions brought before the European
Court of Justice.
Judgments of the European
of Justice
Court
In 1986, the European Court of Justice addressed
in four insurance cases some of the issues relating to the use of mutual recognition for financial
integration within the Community. In its judgments, the Court provided guidance as to the
degree of harmonization of essential elements it
considered necessary for mutual recognition and
home-country control in the insurance sector and
established a test for determining the legality of
host-country restrictions on the cross-border
provision of services.
The Court dealt with the issue of the extent to
which a member state may impose authorization and other requirements on an insurance
company that is based in another member state
and wishes to offer cross-border services. 16 The
Court found that " t h e insurance sector is a
particularly sensitive area from the point of
view of the protection of the consumer both as
a policy-holder and as an insured person." As a
result, the Court said, in the field of insurance
16. Re Insurance Services: EC Commission v. Germany,
Case 205/84, 1987 Common Mkt. L. Rpts. 69; Re Coinsurance Services: EC Commission v. France, Case 220/83,
1987 Common Mkt. L. Rpts. 113; Re Co-insurance Services:
EC Commission v. Ireland, Case 206/84, 1987 Common Mkt.
L. Rpts. 150; Re Insurance Services: EC Commission v.
Denmark, Case 252/83,1987 Common Mkt. L. Rpts. 169. The
cases also presented the issue of whether a host country
could in effect ban the provision of cross-border services in
insurance by requiring a company to have a permanent
establishment in the host state. The Court held that "the
requirement of a permanent establishment is the very negation of [the freedom to provide services]" and would require
justification as an "indispensable requirement," a justification the Court found not to exist in this case. EC Commission
v. Germany, 1987 Common Mkt. L. Rpts. at 107-08. Similarly, in the coinsurance cases, the Court also struck down
requirements that the leading insurer have an establishment
in the host state.
"imperative reasons relating to the public intere s t " exist that may justify restrictions on the
freedom to provide services. The Court emphasized that such restrictions must apply equally
to foreign and domestic firms (that is, on a
national treatment basis) and that the restrictions could not be justified if the public interest
were already protected by the rules of the home
state or if less restrictive rules could achieve
the same result.
In examining the extent to which the public interest justified restrictions on the cross-border provision of insurance services, the Court distinguished
among types of customers on the basis of the degree
of protection deemed to be needed. For small policyholders, the Court determined that existing Community legislation did not provide sufficient harmonization to justify a claim that the public interest was
already protected by the home state. Moreover, the
Court found that the requirements the host state
imposed were not excessive. However, with regard
to authorization and other requirements for the
coinsurance of large, commercial risks that were at
issue in two of the cases, the Court found that such
restrictions could not be justified because such
policyholders did not require the same degree of
protection as that required by the smaller policyholders.
The insurance decisions confirmed that the
principle of mutual recognition and the obligation
of member states not to erect barriers that had
been established in Cassis de Dijon extended to
services as well as to goods. The judgments also
established the public interest test and a method
for applying it to determine the legality of any
barriers to the provision of services across borders. In directives on banking and investment
services, the EC Commission has in effect extended the Court's public interest test to apply
also to host-country restrictions on services provided through branches, and the directives refer
specifically to the public interest criterion for
host-country rules in both cases. This extension
is a logical consequence of the conceptual grouping of these two forms of provision of services
discussed above. The Court's decisions have
been generally interpreted to mean that a member state may continue to apply its own rules on
a national treatment basis only if the rules can be
justified by the public interest test and if Com-
Mutual Recognition: Integration of the Financial Sector in the European Community
munity legislation has not already provided harmonization of basic rules in the relevant areas.
Supranational
Structure
of the
Community
In considering mutual recognition as the approach to financial integration within the Community and its relevance in contexts beyond the
Community, one must remember that the member states have agreed to use it as a tool to
achieve an integrated market in the context of a
structure that, though not a federation, is a rather
powerful supranational structure to which the
member states have already transferred a significant degree of sovereignty. The customs union
with its common external commercial policy is
the basis of the internal market, but the internal
market is much more than a customs union. It
involves a supranational legislative process under which supranational rules ensuring the free
movement of goods, persons, services, and capital are adopted and the harmonization of basic
laws, regulations, and practices at a supranational level can be achieved. Moreover, a member state is obligated to implement or enforce all
EC rules, including those it opposed in the Community legislative process. Community law is
accepted as prevailing over national law, and
both judgments and preliminary rulings of the
European Court of Justice based on Community
law are binding and enforceable in the member
states. (The principle of supremacy of Community law was not explicitly stated in the Treaty of
Rome, but it has been confirmed by the European Court of Justice in judgments interpreting
provisions of the treaty.)
The European Community is also more than a
single, unified market. Other aspects of the Community addressed either by the original Treaty of Rome
or by the Single European Act include social policy,
economic and social cohesion, research and development, the environment, and economic and monetary union. The Single European Act also refers to
the goal of a "European Union," although there is
considerable disagreement within the Community
as to what such a union would entail.17
17. See Jacques Delors, President, European Commission,
statement before the European Parliament regarding the
Council meeting in Hanover (31 O.J. Eur. Comm. [Annex,
607
These institutional and political characteristics of
the European Community are extremely important
in considering whether the approach the Community is using for internal financial integration is
applicable to removing barriers and achieving a
more integrated regulatory structure for financial
services and markets beyond the Community. A
basic question is how much multinational harmonization would be required and the extent to which
sovereignty might need to be surrendered to use the
principle of mutual recognition more broadly among
nations.
The radical difference between what the Community is trying to achieve and other types of
economic arrangements between nations is illustrated by a comparison with the U.S.-Canada
Free Trade Agreement. Unlike a customs union,
the Free Trade Agreement has no common external tariff or commercial policy, and its goals
are limited to eliminating bilateral tariffs, reducing many nontariff barriers, liberalizing investment practices, and providing ground rules for
trade in services, which in the financial sector are
based on the principle of national treatment. The
agreement has no commitment to a single, unified
market. It entails a limited dispute-settling mechanism (from which financial services are excluded) that does not involve a sacrifice of national sovereignty, and it does not provide for
supranational legislative or judicial functions.
CONCLUSION
Although the framework for the entire internal
market, or even for the financial sector alone,
may not be in place by the end of 1992, a
sufficient number of measures will probably have
been adopted and implemented such that the
internal market may be completed by the mid1990s. An important development for achieving
this goal has already occurred: Market participants are basing their plans and governments are
framing their policies on the assumption that the
No. 2-367] 137, July 6, 1988), and "The Main Lines of
Commission Policy," statement before the European Parliament (Strasbourg, January 17, 1989). But see also Margaret
Thatcher, Prime Minister, United Kingdom, speech at the
College of Europe (Bruges, September 20, 1988).
608
Federal Reserve Bulletin • September 1989
internal market will be completed. The commitment by the more developed EC countries to use
EC structural funds to assist poorer countries
and regions is likely to be important in determining the willingness of the poorer countries not
only to support legislation to establish the internal market but also to implement it during what
might be a difficult transitional period of industrial restructuring. A further issue, which has not
yet been resolved, is what steps the Community
may need to take regarding social legislation.
The goal of free capital movements within the
Community is close to realization; by mid-1990,
eight countries are expected to permit the unrestricted movement of capital. The integration of
the EC financial sector—banking, investment
services, securities markets, and insurance—is
already well advanced, to some extent because
this process is part of a larger trend toward the
globalization of financial services and markets
and toward increased international cooperation
and coordination among regulatory authorities.
The financial sector may be particularly suited to
the EC approach of mutual recognition and
home-country control. The banking sector presents the fewest difficulties because the major
industrial countries have already achieved basic
harmonization with regard to consolidated supervision and capital standards. Investment services
are more difficult because of much greater disparities in national regulatory structures and because of the lack of a multilateral agreement on
market risk that is equivalent to the Basle Accord
on risk-based capital.
Securities markets involve complex national rules
about the disclosure of information, but market
pressures have already led some EC and non-EC
securities regulators to explore the possibility of
recognizing disclosure requirements of other countries. The insurance sector may be the most difficult
of the financial sectors to integrate. Except for
reinsurance, the insurance industry is currently
much less international in character than the banking and securities industries: More barriers protect
domestic markets, and less consultation and cooperation take place internationally among regulators.
Within the European Community, application of
the principle of mutual recognition in the financial
sector is expected to lead to market pressures for
additional harmonization of national regulatory
structures. A possibility always exists that the initial
harmonization of what are considered basic standards and supervisory practices will be insufficient
to prevent market pressures leading to competition
in laxity among national regulatory authorities; however, the market could also place a value on more
stringent regulation and supervision. Although making adjustments to the degree of harmonization in
the financial sector may be easier than in other
sectors, the financial sector may require greater
initial harmonization to make mutual recognition
acceptable because of considerations relating to
safety and soundness, monetary policy, and market
stability.
In considering the applicability of mutual recognition beyond the Community, one must keep in
mind that within the Community mutual recognition
involves political compromises to achieve a common goal and that it has been accepted and implemented within an established supranational legislative and judicial structure. Even within this
framework, many issues are unresolved with regard
to the extent to which national sovereignty is transferred to the Community, particularly with reference to the powers of the Commission and to
concerns about the democratic foundations of Community institutions.
Both the approach of mutual recognition used
within the Community and the reciprocity approach
being adopted for third countries are relevant to the
question of the interaction and appropriate relationship of different national regulatory structures in
response to the internationalization of financial activity. The 1985 white paper did not address the
external dimension of the program to complete the
internal market, and the approach to treatment of
third-country institutions has been developed in the
context of individual directives. Although the Council has now adopted a common position on a reciprocity provision for banking services, some ambiguities remain. For purposes of entry and
negotiations with the threat of retaliatory action,
reciprocity appears, at a minimum, to mean reciprocal national treatment; the criteria also include the
concept of effective market access, which, while
ambiguous, may refer both to national treatment
and to the liberalization of host-country financial
structures. For purposes of negotiating goals without the threat of retaliatory action, the reciprocity
provision appears to include not only the concept of
Mutual Recognition: Integration of the Financial Sector in the European Community
effective market access but also the concept of
treatment comparable to that of the home country.
Such a goal could be viewed as the equivalent of an
attempt to extend the principle of mutual recognition to countries outside the Community without
having established on a more international basis the
foundation for mutual recognition that exists within
the Community.
If mutual recognition were to be used beyond
the Community to achieve financial integration,
agreements among nations on basic rules and on
goals for regulatory convergence would be necessary. At present, mutual recognition is being
explored as a basis for financial integration outside the Community only with regard to disclosure requirements for securities and only among
countries in which existing rules may be sufficiently similar so that negotiated harmonization
would not be necessary. Moreover, any agreements in this area, in contrast to those in banking
and investment services, would involve primarily
investor protection rather than safety and soundness. In the areas of banking, investment services, and insurance, national treatment, as embodied in the OECD Codes of Liberalisation and
the National Treatment Instrument, is in general
the currently accepted approach. Whether national treatment, effective market access, or
some other concept may become the accepted
approach if any agreement is reached on trade in
financial services in connection with the current
Uruguay Round of GATT negotiations remains
to be seen.
Concerns have been expressed outside the
Community that the EC internal market program
for the financial sector could, in the worst case,
impede both the internationalization of financial
services and markets and the movement toward
increased regulatory cooperation and convergence. For example, if some non-EC financial
firms were to be placed at a competitive disad-
609
vantage in EC markets, pressures could be created for retaliatory measures in the firms' home
countries. Within the Community, the program
for completion of the internal market might be
associated with increased political pressures for
a more protectionist policy on external trade.
Reciprocity provisions and other barriers to international trade in goods or services could be
established and strictly interpreted as a political
response to what is likely to be a difficult period
of industrial restructuring during which efficient
producers of goods or services increase their
market share and inefficient producers (if not
subsidized by their governments) are forced out.
One hopes however, that the internal market
program will have beneficial effects externally as
well as internally. In the financial sector, because
the EC program is based on mutual recognition,
which goes well beyond national treatment, completion of the internal market will create a coordinated regulatory framework for financial services and markets and thereby remove existing
barriers to Communitywide competition that result from nondiscriminatory differences in national rules. Besides deregulation mandated by
EC directives, actual or potential competition
could create pressure for liberalization of rules in
domestic markets that are currently highly regulated and restricted. Although it is possible that
the EC reciprocity provisions could lead to the
creation of new barriers for third-country institutions, it is also possible that the liberalizing
measures being taken within the Community will
serve as a catalyst for further international progress with regard to trade in financial services. To
date, the internationalization of financial services
and markets has both necessitated and facilitated
increased regulatory and supervisory cooperation and coordination. The EC internal market
program could be a significant contribution to
this process.
610
Staff Studies
The staff members 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 studies that are of general
interest to the professions and to others are
published in the Staff Studies series and summarized in the FEDERAL RESERVE B U L L E T I N .
The analyses and conclusions set forth are
STUDY
those of the authors and do not necessarily
indicate concurrence by the Board of Governors,
by the Federal Reserve Banks, or by members of
their staffs.
Single copies of the full text of each study are
available without charge. The titles available are
shown under "Staff Studies" in the list of Federal Reserve Board publications at the back of
each B U L L E T I N .
SUMMARY
THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS
STOCKS AND DERIVATIVE PRODUCTS
Mark J. Warshawsky
with the assistance
of Dietrich
IN THE MARKETS
Earnhart—Staff,
Board
of
FOR
Governors
Prepared as a staff study in the winter of 1988 and spring of 1989
Margin requirements play an important role in
protecting markets during crises such as the
stock market crash of October 1987. Regulated
by government or by private organizations, depending on the market involved, margins constitute a performance bond posted by noncash
investors in stocks, by investors in financial
futures, and by sellers of financial options. The
margin, which can take a variety of forms such as
cash, Treasury securities, stocks (at a fraction of
their current market value), or letters of credit, is
tangible evidence of the ability of investors to
meet their obligations under nearly the full range
of likely price movements.
Deciding how much margin to require involves
a difficult issue of balance. On one hand, the
amount must be high enough to give customers
an incentive to meet their commitment and to
protect brokers, clearinghouses, and other lenders against losses if investors default on their
obligations; on the other hand, the amount must
not be so high as to drive participants from the
marketplace. In the interrelated markets for equities and for equity options and futures, the
issue of the proper balance is especially delicate.
Inconsistent levels of protection in the three
markets can create serious distortions in activity.
Some studies have examined required margins
in the equities market, others in the markets for
financial futures; they have found the size of the
required margins generally to be more than minimally adequate to protect participants from loss.
This study is the first to assess the adequacy and
consistency of margin requirements in all segments of the equities market—cash, futures, and
options—and the first to combine a broad institutional description of margin arrangements with
a detailed statistical analysis of margins and
prices before and after the crash. The study
reaches the following conclusions:
1. Differences in clearing arrangements, in the
liquidity of the relevant investor groups, and in
price volatility allow margins on derivative prod-
611
ucts to be lower than those on stocks and still
provide protection equivalent to that obtained in
the stock market.
2. For futures contracts on the Standard &
Poor's index of 500 stocks (S&P 500) and on the
New York Stock Exchange Composite (NYSE)
index, the pre-crash margin requirement on existing positions (maintenance margin) provided
clearinghouses a lower level of protection against
price moves than that provided in the stock
(cash) market. Before the October 1987 crash,
the maintenance margin in the cash market was
adequate to cover 98 percent of likely price
changes based on prices from January 1986
through April 1988. The maintenance margin on
the S&P 500 futures contract would have had to
have been 22 percent higher, and that on the
NYSE contract 80 percent higher, to provide 98
percent coverage. The protection on the contracts before the crash was lower than the protection in the cash market even if the sample
period for prices stops in early October 1987,
before the market crash.
3. The pre-crash level of protection provided
by margins on at-the-money and in-the-money
options was adequate and consistent with the
level of protection provided by margins in the
cash market. But the level of margins on outof-the-money put options may not have provided adequate protection. This conclusion is
buttressed by complaints from individual investors, who dominate the market for stock options, about excessively quick, involuntary liq-
uidations of their option positions when margin
calls were made during the stock market crash.
4. During the October 1987 crisis, the frequent
intraday margin calls, the increase in the level of
margin requirements on derivative instruments,
and the absence of cross-margining may have
exacerbated liquidity problems and helped raise
concerns about the financial health of the clearinghouses. These liquidity problems and concerns about the clearinghouses might, in turn,
have contributed to the break in the arbitrage link
between the cash and derivative markets that
sent markets into free fall on October 19.
5. The increases in the margin levels for futures and options contracts during and shortly
after the October crisis yielded the clearinghouses protection even greater than that provided by margins in the cash market. More
recently, however, margin levels have been reduced on futures contracts and in some instances
the level of protection provided as of June 1989 is
less than in the cash markets.
These findings suggest that proposals for margins of equal percentage across all segments of
the market could be harmful to the markets'
well-established mechanisms and their overall
liquidity. But because the various market segments do indeed net out to one market, weakness
in one segment can lead to weakness in others.
Hence proposals for margins that produce equal
protection from risk in all segments of the market
could strengthen market mechanisms and are
worthy of consideration.
612
Industrial Production
in June was 3.4 percent higher than it was a year
earlier. For the second quarter as a whole, production advanced about 2 percent at an annual
rate—the same rate of increase as in the first
quarter. Manufacturing output was unchanged in
June. Capacity utilization in manufacturing declined 0.3 percentage point further to 83.8 percent. Detailed data for capacity utilization are
Released for publication July 14
Industrial production declined 0.2 percent in
June following a revised May decrease of 0.1
percent. In June, the production of both autos
and energy materials fell sharply. Output of most
other major sectors showed little change. At
141.1 percent of the 1977 average, the total index
Ratio scale, 1977=100
160
Total Index
140
Manufacturing
Materials
Nondurable_
N o n d u r a b l e ^ Durable
Durable
J
I
I
I
Consumer Goods
Nondurable
, ,,
• *
/
/
'
Durable
1
1
1
Final Products
Defense and
space
Consumer goods
1983
1985
1987
All series are seasonally adjusted. Latest series: June.
1989
1983
1985
1987
1989
613
1977 = 100
Percentage change from preceding month
1989
1989
Group
May
June
Feb.
Mar.
Apr.
May
June
Percentage
change,
June 1988
to June
1989
Major market groups
Total industrial production
141.4
141.1
-.2
.1
.6
-.1
-.2
3.4
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment...
Defense and space
Intermediate products...
Construction supplies.
Materials
151.4
149.9
138.7
130.9
141.6
168.4
180.1
156.6
139.9
127.8
151.2
149.7
138.3
129.8
141.5
168.0
180.4
156.6
139.9
127.3
.0
.3
.2
.1
.2
.7
-.4
-.9
-1.9
-.5
.3
.2
-.3
-1.1
.0
.8
-.3
.6
-.1
-.1
.6
.7
.6
1.3
.4
.8
.7
.3
.3
.7
.0
.0
-.3
-.7
-.2
.4
.1
.0
.1
-.2
-.1
-.2
-.3
-.8
-.1
-.2
.2
.0
.0
-.4
4.1
4.0
4.0
3.7
4.2
6.2
-2.3
4.4
1.7
2.3
-.1
-.1
.0
-.3
-.2
.0
-.1
.1
-1.1
-1.3
4.0
3.4
4.7
-1.7
2.1
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
147.7
146.5
149.3
101.2
115.7
147.7
146.7
149.2
102.3
117.1
-.2
-.2
-.3
-2.1
2.2
.1
-.1
.4
.6
.9
.6
.7
.4
1.1
-.2
NOTE. Indexes are seasonally adjusted.
shown separately in "Capacity Utilization,"
Federal Reserve monthly statistical release G.3.
In market groups, production of consumer
goods decreased 0.3 percent in June as automobile assemblies fell to an annual rate of 6.8
million units from a rate of 7.1 million units in
May; production of light trucks also declined.
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
140.6
141.4
141.4
140.7
141.6
141.4
141.1
.1
.6
.0
.1
.6
-.1
-.2
Mar
Apr
May
June
Output of other consumer goods, on balance,
was essentially unchanged. Output of business
equipment edged down for the first time since
last October, reflecting a substantial drop in
transit equipment, particularly autos for business
use. Production of construction supplies, which
weakened earlier in the year, has changed little,
on balance, for several months. The decline in
materials production mainly resulted from curtailed output in the energy sector; coal production fell sharply because of strike activity, and
electricity generation was reduced.
In industry groups, manufacturing output was
unchanged in June as nondurables edged up but
durables fell slightly. Outside manufacturing,
production of both mines and utilities dropped
more than 1 percent.
614
Statements to Congress
Statement by Alan Greenspan, Chairman, Board
of Governors of the Federal Reserve
System,
before the Committee on Banking, Housing, and
Urban Affairs, U.S. Senate, August 1, 1989.
I appreciate this opportunity to appear before
you in connection with the Federal Reserve's
semiannual Monetary Policy Report to the
Congress. 1 In my prepared remarks today I will
adhere closely to the matter at hand—that is,
monetary policy and the state of the nation's
economy.
ECONOMIC AND MONETARY
DEVELOPMENTS THUS FAR IN 1989
Over the course of this year, the contours of the
broad economic setting have changed. As a consequence, the stance of monetary policy also has
shifted somewhat, although the fundamental objective of our policy has not. That objective
remains to maximize sustainable economic
growth, which in turn requires the achievement
of price stability over time.
Early in the year, the Federal Reserve continued on the path toward increased restraint upon
which it had embarked in the spring of 1988. At
the time of our report to the Congress in February of this year, I characterized the economy as
strong, with the risks on the side of a further
intensifying of price pressures. Labor markets
had been tightening noticeably, heightening concerns that inflationary pressures might be building. Moreover, increases in food and crude oil
prices were raising the major inflation indexes.
In view of the dimensions of the inflation
threat, the Federal Reserve tightened policy further early this year. Additional reserve restraint
1. See "Monetary Policy Report to the Congress,"
BULLETIN,
vol. 75 (August 1989), pp. 527-39.
RESERVE
was applied through open market operations, and
the discount rate was raised Vi percentage point.
The determination to resist any pickup in inflation also motivated the decision of the Federal
Open Market Committee at its February meeting
to lower the ranges for money and credit growth
for 1989. This marked the third consecutive year
in which the target ranges were reduced, and it
underscored our commitment to achieving price
stability over time.
Reflecting the economy's apparent strength
and the tighter stance of policy, interest rates
rose during the first quarter. Short-term market
rates increased about 1 percentage point over the
quarter, leaving them up more than 3 points from
a year earlier, but long-term rates held relatively
steady. The year-long rise in short-term rates had
a marked impact on growth of the monetary
aggregates, restraining the demand for money as
funds flowed instead into higher-yielding market
instruments.
By the beginning of the second quarter, the
outlook for spending and prices was becoming
more mixed. Scattered indications of an emerging softening in economic activity began to appear, prompting market interest rates to pull
back. Rates continued to fall as a variety of
factors pointed to some lessening of price pressures in the period ahead. In particular, money
growth weakened further, the underlying trend in
inflation appeared to be less severe than markets
had feared, the dollar continued to climb, and
domestic demand slackened. Against this background, the Federal Reserve began to ease reserve conditions in early June. The easing has
consisted of several steps, the most recent of
which took place last week. By the end of July,
most short-term market rates had dropped more
than IV2 percentage points from their March
peaks, and long-term interest rates were down
somewhat less, with bond rates at their lowest
levels in more than two years.
FEDERAL
Economic activity is estimated to have grown
615
in the first half of this year at a rate somewhat
below that of potential gross national product.
This stands in sharp contrast to the performance
of the preceding two years during which growth
proceeded at a pace that placed increasing pressures on labor and capital resources. Job creation
has remained the hallmark of the current expansion, however. Even with the more moderate
pace of economic growth in the first half of this
year, nearly 1V2 million new jobs were added to
payrolls. And this occurred apparently without
triggering an acceleration in wages.
Prices did accelerate in the first six months of
this year, but most of the increase may be
transitory, related to supply conditions in food
and petroleum markets. After a gradual pickup
over the preceding two years, price inflation
outside of food and energy held near its 1988
pace.
Excluding food and energy is one traditional
way of estimating the "underlying" rate of inflation. Although there is some logic in abstracting
from these prices, which are quite volatile and
can be dominated over the short run by supply
disturbances, this approach is incomplete. An
alternate picture of near-term price-setting behavior can be gleaned by examining the components of prices, that is, the cost pressures facing
firms and the behavior of their profits. Such an
analysis reveals that, in manufacturing, much of
the pickup in inflation thus far in 1989 is accounted for by higher unit energy and labor
costs. The runup in world crude oil prices, which
reflected a series of production accidents this
spring as well as a degree of output restraint on
the part of some Organization of Petroleum Exporting Countries oil producers, is the main
reason for the increase in energy costs.
In contrast, movements in hourly compensation were quite moderate in the first half of this
year, and the acceleration in unit labor costs
largely reflected slower growth in productivity.
Such a deceleration in productivity is typical as
the pace of economic activity slows. But, given
the relatively high levels of resource utilization,
it also is possible that firms were forced to draw
on less skilled workers than was the case earlier
in the expansion. A significant moderation in the
unit cost of imported materials, likely reflecting
the higher value of the dollar on foreign exchange
markets, provided a notable offset to these cost
pressures. On balance, it appears that firms have
continued to experience upward pressures on
costs. The intensity of these pressures as related
to energy inputs may well diminish in coming
months, but it remains to be seen how other
elements of the cost structure will evolve.
This approach, while helpful in understanding
the interaction of prices and costs, does not tell
us how an inflation cycle begins or why it may
persist. Short-run inflation impulses can originate
from a variety of sources, on both the demand
and the supply sides of the economy. But over
longer periods of time, inflation cannot persist
without at least passive support from the monetary authorities.
The strength of the inflation pressures in 1988
and into 1989 was, of course, the motive for the
progressive tightening of policy that the Federal
Reserve undertook over that period. And the
outlook for some reduction in these pressures
owes in part to that policy restraint. The associated rise in market interest rates, beginning early
last year, opened up wide "opportunity" costs of
holding money assets and resulted in a sharp
slowing of money growth. This was especially
the case for liquid deposits, whose rates were
adjusted upward only very sluggishly, providing
depositors with strong incentives to economize
on balances.
Besides the effect of interest rates, several
special factors played a role in slowing money
growth and boosting velocity—that is, the ratio
of nominal GNP to money. Probably the most
important of these was the unexpectedly large
size of personal tax liabilities in April. Many
individuals evidently were surprised by the size
of their liabilities, and drew down their money
balances below normal levels to make the required payments. As the Internal Revenue Service cashed those checks, M2 registered outright
declines.
The difficulties of the thrift industry also may
have affected M2 growth. Late last year, as
public attention increasingly focused on the
financial condition of the industry and its insurance fund, institutions insured by the Federal
Savings and Loan Insurance Corporation
(FSLIC) began to lose deposits at a significant
rate. These deposit withdrawals were particularly
616
Federal Reserve Bulletin • September 1989
strong in the first quarter of this year, and while
most of the funds apparently were repositioned
within M2—at commercial banks or money
funds—this factor likely also had some damping
effect on that aggregate.
More recently, growth of the broader monetary aggregates has picked up markedly. The
restraint imposed by the earlier rise in market
interest rates is fading, and households appear to
be rebuilding their tax-depleted balances. The
level of M2 on average in May was just 1 percent
at an annual rate above its fourth-quarter base,
but rapid growth in June and July has lifted the
year-to-date increase to around the lower end of
its 3 to 7 percent annual target cone. M3 also has
accelerated in June and July, placing it well into
the lower half of its range.
M l , which is the most interest sensitive of the
monetary aggregates, declined at a rate of 3V2
percent through June, although it too has
strengthened most recently. The unusual drop in
Ml in the first half of the year stemmed from
sizable declines in NOW accounts and demand
deposits. NOW accounts were reduced both by
the large personal tax payments this spring and
by the high level of interest rates, which drew
savings-type balances instead toward market instruments or other types of accounts whose
offering rates adjusted upward more quickly. The
decline in demand deposits was related in part to
a reduction in balances that businesses are required to hold to compensate their banks for
various services; for a set amount of services,
higher market rates translate into lower required
balances.
MONETARY
INTO 1990
POLICY AND THE ECONOMY
Looking ahead at the remainder of 1989 and into
1990, recent developments suggest that the balance of risks may have shifted somewhat away
from greater inflation. Even so, inflation remains
high—clearly above our objective. Any inflation
that persists will hinder the economy's ability to
perform at peak efficiency and to create jobs.
Consequently, monetary policy will need to continue to focus on laying the groundwork for
gradual progress toward price stability. Such an
outcome need not imply a marked downturn in
the economy, and policy will have to be alert to
any emerging indications of a cumulative weakening of activity. However, progress on inflation
and optimum growth over time also require that
our productive resources not be under such
pressures that their prices continue to rise without abating. In light of historical patterns of labor
and capital growth and productivity, this progress very likely will be associated with a more
moderate, and hence sustainable, expansion in
demand than we experienced in 1987 and 1988.
At its meeting earlier this month, the Federal
Open Market Committee determined that a combination of continued economic growth and reduced pressures on prices would be promoted by
growth of money and debt in 1989 within the
annual ranges that were set in February. Moreover, it tentatively decided to maintain these
same ranges through 1990.
The specified ranges, both for this year and
next, retain the 4-percentage-point width first
instituted for the broader aggregates in 1988.
Considerable uncertainties about the behavior of
money and credit remain, and the greater breadth
allows for a range of paths for these aggregates as
financial and economic developments may warrant. Uncertainties about the link between the
narrow transactions aggregate, M l , and the
economy have, if anything, increased, and the
Committee once again did not specify a range for
this aggregate.
In view of the apparent variability, particularly
over the short run, in the relationships between
the monetary aggregates and the economy, policy will continue to be carried out with attention
to a wide range of economic and financial indicators. The complex nature of the economy and
the chance of false signals demand that we cast
our net broadly—gathering information on
prices, real activity, financial and foreign exchange markets, and related data.
While the monetary aggregates may not be
preeminent on this list, they always receive careful consideration in our policy decisions. This is
especially true when they exhibit unusual
strength or weakness relative to past patterns
and relative to our announced ranges. Thus, the
very sluggish growth in M2 for the year to date
was an important influence in the decision to
Statements to Congress
begin to ease policy. Velocity may vary considerably over a few quarters, but the provision of
liquidity, as measured by one or another of the
monetary aggregates, is an important factor in
the performance of the economy over the shorter
run and over the long run broadly determines the
rate of price increase.
Over the remainder of the year, M2 should
continue to be supported by the decline in interest rates in recent months, which, along with
growth of income, is likely to result in an expansion of that aggregate well within its target range.
Growth in M2 likely will be augmented by a
cessation of the special influences I noted earlier
that depressed it in the first half of the year. In
particular, households may continue to rebuild
their money balances after the tax-related drawdowns in April and May. Also, deposit withdrawals from thrift institutions have subsided, and
enactment of legislation that restores full confidence in the industry would bode well for deposit
flows into FSLIC-insured institutions.
Further steps in the resolution of the difficulties of the thrift industry also have implications for M3. With deposits flowing in again,
thrift institutions will not have to rely so heavily
on the Federal Home Loan Banks for their
funding as they did earlier this year. Partly as a
result, we expect M3 to strengthen from its rate
of growth over the first half of the year, moving
up into the middle of its target range by year-end.
Our outlook for debt growth foresees little
change from the pace of the first two quarters.
The broad credit measure that we monitor, the
debt of domestic nonfinancial sectors, has grown
at about an 8 percent rate this year, near the
midpoint of its 6V2 to 10Vi percent range. We
have little reason to expect its growth through
the end of the year to be very different, implying
some slowing from the pace of 1988. Nevertheless, the expansion of debt is likely to exceed
nominal GNP growth again this year.
Growth of money and debt within the 1989
ranges is expected to be consistent with nominal
GNP rising this year at a pace not too far from
last year's increase, according to the projections
of FOMC members and other presidents of Reserve Banks. These projections, however, incorporate somewhat more inflation and less real
growth than we experienced in 1988. The central
617
tendency of the projections of 2 to 2Vi percent
real GNP growth over the four quarters of this
year implies continued moderate economic
growth throughout the year. For the year as a
whole, these projections anticipate that growth is
likely to be strongest in the investment and
export sectors of the economy, with expansion of
consumer expenditures and government purchases rather subdued.
A sectoral pattern of growth such as this would
in fact serve the nation's longer-term needs by
contributing to a better external balance. Fundamentally, improvement in our international payments position requires productivity-enhancing
investment and a higher national saving rate. In
this regard the federal government can play a
significant, positive role by reducing the budget
deficit.
The outlook for inflation this year, as reflected
in the central tendency of the projections expressed at the FOMC meeting, is for a 5 to 5VI
percent increase in the consumer price index. A
figure in this range would represent the highest
annual inflation rate in the United States since
1981; this is a source of concern to the Federal
Reserve. Yet this rate is below that experienced
in the first six months. This implies a considerable slowing over the remainder of the year,
reflecting earlier monetary policy restraint and a
prospective moderation in food and energy
prices.
Federal Reserve policy is focused on laying the
groundwork for more definite progress in reducing inflation pressures in 1990, while continuing
support for the economic expansion. The ranges
provisionally established for growth of money
and debt next year are consistent with these
intentions. They allow for a noticeable pickup in
money growth from that likely to prevail this
year, should that be appropriate. If pressures on
prices and in financial markets are less intense
than in recent years, velocity would not be
expected to continue to increase, and faster
money growth, perhaps in the top half of the
range, would be needed for a time to support
economic growth. Conversely, if price pressures
prove intractable, the ranges are low enough to
permit the needed degree of monetary restraint.
Thus, although the 1990 ranges do not represent another step in the gradual, multiyear low-
618
Federal Reserve Bulletin • September 1989
ering of ranges, the Federal Reserve's intent to
make further progress against inflation remains
intact. Uncertainties about the outlook suggested
a pause in the process of reducing the ranges;
however, the Committee recognizes that our goal
of price stability will require additional downward adjustments in these ranges over time. Of
course, as we draw closer to 1990, the economic
and financial conditions prevailing will become
clearer, allowing us to approach our decisions on
the ranges with more confidence. Hence, the
current ranges for money and credit growth in
1990 should be viewed as very preliminary.
The economic projections for 1990 made by
the governors and Reserve Bank presidents center in a range of IV2 to 2 percent real GNP growth
and 4V2 to 5 percent inflation for next year.
Naturally, as I have already noted, there are
considerable uncertainties surrounding forecasts
for 1990. In particular, developments in the external sector will depend in part on economic
activity abroad, as well as on the efforts of U.S.
firms to become more competitive in world markets. Domestically, performance will be affected
by a large number of influences, including importantly the budget deficit.
MONETARY
POLICY IN PERSPECTIVE
The Federal Reserve is committed to doing its
utmost to ensure prosperity and rising standards
of living over the long run. Given the powers and
responsibilities of the central bank, that means
most importantly maintaining confidence in our
currency by maintaining its purchasing power.
The principal role of monetary policy is to provide a stable backdrop against which economic
decisions can be made. A stable, predictable
price environment is essential to ensure that
resources can be put to their best use and ample
investment for the future can be made.
In the long run, the link between money and
prices is unassailable. That link is central to the
mission of the Federal Reserve, for it reminds us
that without the acquiesence of the central bank,
inflation cannot take root. Ultimately, the monetary authorities must face the responsibility for
lasting price trends. While oil price shocks,
droughts, higher taxes, or new government reg-
ulations may boost broad price indexes at one
time or another, sustained inflation requires at
least the forbearance of the central bank. Moreover, as many nations have learned, inflation can
be corrosive. As it accelerates, the signals of the
market system lose their value, financial assets
lose their worth, and economic progress becomes impossible.
Thankfully, this bleak scenario is not one that
we in the United States are confronting. We do,
however, face a difficult balancing act. The
economy has prospered in recent years: The
economic expansion has proved exceptionally
durable; employment has surpassed all but the
most optimistic expectations; and the underlying inflation rate, after coming down quickly in
the early 1980s, has accelerated only modestly.
But now signs of softness in the economy have
shown up.
Accordingly, it is prudent for the Federal Reserve to recognize the risk that such softness
conceivably could cumulate and deepen, resulting in a substantial downturn in activity. We also
recognize, however, that a degree of slack in
labor and product markets will ease the inflationary pressures that have built up. So our
policy, under current circumstances, is not oriented toward avoiding a slowdown in demand,
for a slowing from the unsustainable rates of 1987
and 1988 is probably unavoidable. Rather what
we seek to avoid is an unnecessary and destructive recession.
The balance that we must strike is to support
moderate growth of demand in the near term, while
concurrently progressing toward our longer-run goal
of a stable price level. Admittedly, the balance we
are seeking is a delicate one. I wish I could say that
the business cycle has been repealed. But some day,
some event will end the extraordinary string of
economic advances that has prevailed since late
1982. For example, an inadvertent, excess accumulation of inventories or an external supply shock
could lead to a significant retrenchment in economic
activity.
Moreover, I cannot rule out a policy mistake
as the trigger for a downturn. We at the Federal
Reserve might fail to restrain a speculative surge
in the economy or fail to recognize that we were
holding reserves too tight for too long. Given the
lags in the effects of policy, forecasts inevitably
Statements to Congress
are involved and thus errors inevitably arise. Our
job is to keep such errors to an absolute minimum. An efficient policy is one that doesn't lose
its bearings, that homes in on price stability
619
over time, but that copes with and makes
allowances for any unforeseen weakness in
economic activity. It is such a policy that the
Federal Reserve will endeavor to pursue.
•
Chairman Greenspan presented similar testimony before the Subcommittee on Domestic Monetary
Policy of the House Committee on Banking, Finance and Urban Affairs, July 20, 1989.
Statement by Griffith L. Garwood, Director, Division of Consumer and Community
Affairs,
Board of Governors of the Federal Reserve System, before the Subcommittee on Consumer and
Regulatory Affairs, Committee on Banking,
Housing, and Urban Affairs, U.S.
Senate,
July 31, 1989.
I want to thank the subcommittee for this
opportunity to address issues regarding the
Community Reinvestment Act (CRA) and its
enforcement by the Federal Reserve. I am
pleased to be here to discuss the experience of
the Board of Governors of the Federal Reserve
System, for which I serve as Director of the
Division of Consumer and Community Affairs.
The division's responsibilities include rule writing and enforcement authority for federal laws
safeguarding consumer rights in financial services, especially credit services, besides CRA.
We oversee and provide policy direction for
consumer compliance and CRA examinations
performed by Federal Reserve examiners.
Through our Systemwide Community Affairs
Program, we share knowledge about successful
approaches to community development lending
with bankers. Finally, we analyze and report to
the Board on CRA issues that arise in connection with applications.
We have worked hard over the years to
develop a multifaceted program that responds
faithfully to our mandate under the CRA. That
mandate is threefold, and can be simply stated:
(1) to encourage banks to help meet the credit
needs of their entire communities, including
low- and moderate-income areas, (2) to assess
their records during examinations, and (3) to
take their records of service under the CRA into
account when evaluating proposals for expansion.
Carrying out that mandate has been anything
but simple. In fact, CRA enforcement poses a
very significant supervisory challenge in that it
compels us to look beyond what happens within
the bank itself, focusing on the role the bank
plays in its community. That includes its interaction with individuals, organizations, and local
governments to learn about credit needs and its
response when such needs are identified. In
essence, we must look at a bank's participation
in fostering economic growth and revitalization,
and making the community a better place to live
and to do business. Rendering an informed
judgement about that role requires an understanding not only of banking, but of neighborhoods and the often complex social and economic forces at work within them.
Moreover, the statute is framed so broadly
that it provides little practical guidance as to
appropriate measures of compliance. We have
found there is a fine line between encouraging
institutions to extend CRA credit and requiring
that they do so in specified amounts or types, or
under prescribed terms. The Board strongly
believes that the Congress has not given it
authority to establish—implicitly or explicitly—
lending requirements of any kind under the
purview of the CRA. Avoiding such requirements, and still providing both the encouragement that is called for in the act and the
guidance asked of us by many bankers is not an
easy task. The Board also must determine what
weight to assign to CRA in the applications
process, given that it is obliged by law to
simultaneously consider financial, managerial,
legal, and competitive factors. Factoring the
620
Federal Reserve Bulletin • September 1989
CRA assessment into the mix of these other
considerations in itself has proved challenging.
For central bankers and other financial regulators, the duties conferred by the CRA require
them to wear a " h a t " very unlike the traditional
one we wear and, quite frankly, this has taken
some getting used to.
Nevertheless, in enforcing the CRA we have
endeavored to strike a balance between the competing interests and responsibilities of banks and
community groups. In so doing, we have been
lambasted by both—which perhaps is the best
indication that we have steered the right course.
For some years, our actions have been the subject of considerable controversy. Bankers have
charged the Federal Reserve with exhibiting bias
toward the community organizations, pressuring
applicant banks into negotiated settlements with
groups filing CRA protests, giving unclear signals
about what it takes to " p a s s " CRA examinations, and unfairly delaying decisions on challenged applications. On the other hand, community organizations have criticized the Federal
Reserve for what they perceive to be a "probanker" approach to CRA and generally lax
enforcement, as well as a reluctance to grant
protestants more time to research their case
against banks in the context of applications.
Even in this highly controversial setting, it is
my belief that the CRA process has been quite
positive, which often seems overlooked in the
rhetoric that the CRA seems to attract. My
remarks here will hopefully convey the extent of
our examination effort in which every day on an
ongoing basis we send specially trained examiners to call on banks and members of their communities to render CRA assessment and advice.
This effort is augmented by a substantial educational program that has presented new ideas in
community economic development to thousands
of participants. Through the commitments made
by banking organizations in the applications
process, a multitude of initiatives has been undertaken. In scores of other instances, private
agreements have been reached in the course of
CRA-related dialogue between banks and members of their communities.
The practical result of all this activity has
probably been many millions of dollars in credit
extended in low- and moderate-income neighbor-
hoods, and much valuable, though less quantifiable, technical collaboration among all the actors
in the CRA process. It has achieved such results
not in spite of the regulatory agencies, as critics
allege, but because we have built a solid regulatory framework to carry out our mandate. In
short, I believe the CRA process is working far
better than many perceive.
CRA
EXAMINATIONS
The cornerstone of CRA enforcement is the CRA
examination program, comprehensive in scope
yet flexible enough to take into account each
bank's asset size and market niche, as well as its
locale. CRA examinations are our best vehicle to
encourage better performance and will increasingly be the focal point of our enforcement
efforts, as indicated in the CRA Policy Statement
issued jointly by the agencies in March.
Each state member bank is examined about
every eighteen months, or more often if weaknesses have previously been identified (and less
often in the case of top-notch performance). The
Federal Reserve has long had a cadre of specialized consumer compliance examiners whose
training in CRA-related aspects of bank performance sets them apart from other examiners
solely concerned with safety and soundness matters. Examiners bring to their jobs a variety of
backgrounds in law, accounting, banking, and
finance. They are trained at Board schools here
in Washington, and in regional or Reserve Banklevel seminars. Information about time spent in
CRA training, as well as other information responding to specific questions posed by Senator
Dixon, is presented in the supplements to this
testimony.
Following uniform interagency examination
procedures, examiners review and analyze bank
activities falling under each of the twelve assessment factors spelled out in Regulation BB. The
procedures focus the examiner's attention on
each factor in a detailed, methodical way.
Through a step-by-step process for each of the
factors, examiners build a body of information
which, taken as a whole, constitutes the bank's
CRA record.
Statements to Congress
For example, for the assessment factor pertaining to bank marketing and special credit
programs, the examiner would review working
relationships with realtors servicing low- and
moderate-income neighborhoods, efforts in providing mortgage counseling, management assistance to small or minority businesses, the extent
to which bank personnel seek out potential housing and small business loan demand, advertising
practices, and other matters. Direct lending as
well as credit-related services provided in lowand moderate-income portions of the community
would be studied and compared with lending in
more affluent parts of the community. The availability of convenient hours, as well as the accessibility of bank offices to residents of low- and
moderate-income areas, would also be considered.
To give breadth and a balanced perspective to
the assessment, examiners routinely conduct interviews outside the confines of the bank with
business people, government officials, housing
and consumer advocates, realtors, trade association representatives, and many others. The
comments of these individuals—some 925 of
whom were interviewed by Federal Reserve examiners last year—are factored into the examiners' development of the record.
The examiner's objective is, of course, to
evaluate current performance—but it is also to
put banks on a path of strengthened CRA performance. Having the benefit of insight gained from
their close, hard look at bank activities and input
from community contacts, examiners communicate the findings of their review to bank management orally at the end of the examination and in
written form once they return to the office. They
stress areas of weakness and recommend measures for improvement, to which bank management must respond. Continued supervisory attention through correspondence, follow-up
visits, and subsequent examinations is given until
improvements are realized.
Ratings are assigned in accordance with the
uniform interagency CRA rating system, which
sets out five performance categories based on the
assessment factors. The standards used to measure performance are generally qualitative rather
than quantitative in nature because they must
apply to all institutions in every economic envi-
621
ronment. They describe the kinds of programs
and practices in which institutions should be
engaged to merit ratings on the scale of one to
five within each of the performance categories
and on a composite basis. Obviously, assigning
ratings involves some judgment on the part of the
examiner—yet this inherent element of judgment
does not imply that they are arbitrary.
I am well aware of the notion that because the
majority of state member banks—93 percent in
1988 and to date in 1989—are rated at least
satisfactory, something must be wrong. To the
contrary, I would be surprised if nearly all banks
were not satisfactory, given that the concept of a
community service obligation is a bedrock principle of banking. In fact, it has deep historical
roots in U.S. banking law, formally enunciated at
least as far back as the Banking Act of 1935,
which declared that banks should serve the
"convenience and needs" of their community. It
was reinforced in the Bank Holding Company
Act of 1956, which listed the convenience and
needs of the community as one of the factors the
Board must consider in handling applications
under the act. Numerous state statutes reflect
this concept as well.
Particularly with regard to the banks we examine, I would also be surprised if market forces did
not work in favor of those banks that are profitable and are making a strong contribution to the
betterment of their communities. Most of the
banks directly supervised by the Federal Reserve
have total assets of less than $100 million or are
located outside metropolitan areas. Small town
banks have traditionally been an integral force in
their communities and must be sensitive to local
concerns, or they would soon be out of business.
One should also bear in mind that we are
dealing with a ratings system that gauges performance on a case-by-case basis; we are not seeking to achieve some statistical distribution of high
and low ratings around a median. However, for
some time the agencies have been undertaking a
self-evaluation of our CRA efforts, resulting most
recently in the joint policy statement on CRA
providing additional guidance on what we believe
are effective CRA programs. This review is ongoing, and as we learn more I would not be
surprised to see an indication in the ratings of
somewhat more rigorous measurement.
622
Federal Reserve Bulletin • September 1989
COMMUNITY AFFAIRS
OUTREACH
The Community Affairs offices at the Reserve
Banks are an important companion to the CRA
examination program. It is through these offices
that we develop a body of expertise in community development financing and then share it as
widely as possible with banks, bank holding
companies, and public-sector representatives.
We have consistently sought to convey a message of "enlightened self interest," showing how
banks can grow and prosper only together with,
and not independent of, the communities surrounding them.
The need for this program became apparent in
the very early years of the CRA, when examiners
found bankers willing to tackle the tougher credit
needs in their communities, but lacking the expertise to make such loans and meet the safety
and soundness criteria the law acknowledges. In
1980, we brought to the division a person experienced in community development lending to
provide examiners with information in this field.
We soon expanded the program to each of the
twelve Reserve Banks.
Last year, community affairs staff conducted
more than 50 educational programs throughout
the country on topics ranging from tax credits for
low-income housing to the use of loan pools, loan
guarantees and the secondary market. By any
measure, I think you will find the list of these
programs impressive. Another important resource is the gamut of publications prepared by
community affairs staff on the tools and techniques of community development lending. 1
As one outgrowth of these educational efforts,
we have witnessed an increasing interest on the
part of bank holding companies and national
banks in forming subsidiary community development corporations, or CDCs, through which
broad investment powers unavailable to banks
themselves can be exercised. CDCs can invest in
real estate, take equity positions in small businesses, and coventure various projects with city,
county, or state government and nonprofit developers to benefit low-income families and poor
1. The attachments to this statement are available on
request from Publications Services, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551.
and blighted communities. In the past eighteen
months, ten new CDCs have commenced operation.
Given the complexity of inner city redevelopment and rural economic needs, the emphasis in
our community affairs program is on forging
ongoing relationships between banking and potential partners for development. Over the
years, several partners, besides government,
have emerged from such sources as the insurance industry, the philanthropic community,
neighborhood-based
development
corporations, and even new national intermediaries
such as the Local Initiatives Support Corporation, Neighborhood Housing Services, and the
Neighborhood Reinvestment Corporation, and
the development arm of the National Rural
Electric Cooperative Association. These technical and financial partners help banks leverage
their community investments and make possible deals that formerly were perceived as "unbankable."
We have done our utmost to promote such
partnerships, and have seen worthwhile results.
In 1988, for example, many California banks
formed a consortium to address low-income
housing needs. In the Boston District, an affordable housing task force involving lenders, community groups, and government officials recently
completed a credit needs assessment project. A
similarly composed council in Trenton, New
Jersey, worked with the Philadelphia Reserve
Bank to put together a lenders' profile on that
city, together with recommended financing strategies. In Atlanta earlier this year, the Federal
Reserve Bank took steps to encourage the use of
the emerging secondary market for community
development loans by a coalition of Atlanta
mortgage lenders.
The community affairs and CRA examination
functions maintain a close working relationship,
enabling examiners to keep abreast of new developments in the financial market and to put
community affairs staff in touch with bankers in
need of technical assistance in CRA matters. I
am convinced that our outreach efforts in this
area are well placed; judging by the response so
far, there is tremendous interest in learning how
community development lending can be done to
the benefit of banks and their communities.
Statements
CRA ISSUES IN BANK
PROPOSALS
EXPANSION
Let me now turn to applications processing—an
aspect of our work in which there have recently
been significant policy developments. The Board
is required by law to consider CRA performance
when reviewing applications for mergers, acquisitions, or branching. While public attention is
often drawn to an application in which a CRA
protest has been filed, the CRA merits of an
application are given careful attention in each
case, particularly when any of the banks that are
party to the application have been assigned a
CRA examination rating that is less than satisfactory.
Although our focus today is on the CRA aspects of an application, the Board is required by
statute to evaluate several factors besides convenience and needs. Protests on any of these
grounds—financial, management, competitive,
or CRA—are viewed seriously, and are handled
in exactly the same way. They are thoroughly
reviewed by members of the staff and the Board,
which sometimes involves seeking out additional
information from the applicant, its primary regulator, and the protestant.
Although we endeavor to complete our analysis so that the case can be acted on by the Board
within 60 days, we are not always able to meet
that target in both CRA and non-CRA cases.
Average processing time for the more than 4,000
domestic cases handled by the System in 1987
and 1988 was 39 days. However, the bulk of
cases included in that figure—some 86 percent—
were decided under delegated authority by the
Reserve Banks. Average processing time for the
remaining 14 percent of cases requiring Board
action, which would include most CRA cases,
was 76 days in 1987, and 72 days in 1988. For
CRA-protested applications, average processing
time was 73 days in 1987 (somewhat less than the
average), and 87 days in 1988 (somewhat more).
One area of controversy has been our practice—on rare occasions—of extending the period
for receiving comments from protestants. Our
policy on extension of the comment period reflects the Board's responsibility to process applications in a timely manner while giving public
comments the attention they deserve. Only in a
to Congress
623
few instances has the Board found extension of
the 30-day comment period warranted—when
the application has not been promptly made
available for inspection by the parties, for example, or in the uncommon event that there has
been inadequate public notice of the application.
But the Board has made clear time and again that
it is not appropriate to extend the comment
period simply because the commenter wants
more time to pursue negotiations with an applicant under the pressure of a pending application.
The agencies' critics often point to the fact that
very few applications have been denied on CRA
grounds. The Board's longstanding posture has
been to use the opportunity afforded by the
applications process to encourage banks to do a
better job under the CRA, though not necessarily
through denials. When weaknesses have been
found in the record of applicant banks—whether
or not the particular application has been the
subject of a CRA protest—many institutions
have made commitments to address them before
processing is completed. Those commitments
have been taken into account, together with
examination reports, comments from the public,
and all other information pertinent to an institution's record in coming to a disposition of the
application. Roughly one-third of the some 150
CRA-protested applications that were approved
involved such commitments. Thus, focusing on
the number of applications denied is misleading
as the only measure of agency toughness.
Because they address problem areas unique to
the case at hand, commitments vary widely.
Those made most frequently entail measures
such as enhanced advertising and outreach, often
in ways that will reach a non-English-speaking
population; the adoption of a corporate-wide
policy for CRA, accompanied by parent company review of subsidiary activities; and special
lending efforts in target neighborhoods. Through
this process, dozens of our most prominent banking organizations have made CRA commitments
for improved performance.
This approach has recognized that an adverse
CRA rating or a limited deficiency in performance may not have warranted denial of the
application, particularly if financial, competitive,
managerial, and legal factors weighed in favor of
approval. It also recognized that much could be
624
Federal Reserve Bulletin • September 1989
gained by securing commitments for improved
credit services, given that their fulfillment is
often monitored through periodic progress reports to Federal Reserve Banks and is taken into
account at the time of next application.
I mentioned earlier that the agencies have
recently issued a comprehensive CRA Policy
Statement. A product of many years of experience with the CRA and the difficult issues it
presents, the statement devotes considerable attention to the role of commitments—and suggests something of a different direction for the
future. It affirms that institutions contemplating
business expansion should have CRA policies
and programs in place, and working well, before
filing an application. While it indicates that commitments for future improvement are entirely
appropriate for addressing specific problems in
an otherwise satisfactory record, they cannot
compensate for a seriously deficient past record
of CRA performance.
This principle was illustrated earlier this year
in the Board's denial, in substantial part on
CRA grounds, of an application by Continental
Illinois Bancorp., Inc., of Chicago, Illinois, to
acquire an Arizona bank. The Board acknowledged that Continental had adopted its first
formal CRA plan tailored to correct serious
CRA shortcomings. Yet in the Board's view
Continental's past record, in light of its considerable size and resources, failed to show the
basic results on which that plan, which was in
the very early stages of implementation, could
be evaluated. The denial has been well publicized and, surprisingly, has met sharp criticism
from some Chicago community groups—even
before this subcommittee—who view the
bank's performance from a somewhat different
perspective. Nevertheless, the decision stands
as a landmark in signaling that institutions
should establish a sound CRA performance
record before considering expansion.
The joint policy statement provides precisely
that type of guidance by describing the elements
of an effective CRA program. Its key elements
are an assertive community outreach program; a
means of incorporating information gathered
through outreach into the development and refinement of products and services; marketing and
advertising that reaches the entire community;
periodic analysis of loan applications to ensure
that potential borrowers are treated in a fair,
equitable manner; and an active managerial role
in CRA planning and oversight. Adopting such a
process will help institutions more effectively
address their CRA responsibilities as a routine
part of doing business.
An important lesson underscored in the course
of our enforcement efforts is that communication
that begins and ends with a CRA protest rarely
brings about long-term benefits. So, as part of
routine compliance with CRA, the Policy Statement strongly encourages banking organizations
to expand their CRA Statements, expounding on
current and future CRA plans and results, to
provide a launching point for discussion with the
community. At the same time, it encourages
neighborhood organizations to react to those
expanded CRA statements, making known their
concerns at an early stage when they can be dealt
with most effectively by bank management.
These comments will be reviewed in the course
of the institution's CRA examination. Community members will, of course, continue to be able
to submit comments on applications, and each
protest will be analyzed carefully and thoroughly.
In all of our CRA enforcement activities—
examinations, community affairs outreach, and
applications processing—we have endeavored to
be evenhanded toward both financial institutions
and representatives of the communities they
serve, as well as faithful to the mandate given us
by the Congress. Perhaps we have not always
done it perfectly, but neither has the effort been
as limited or timid as is sometimes portrayed. We
have given significant encouragement to the private sector's participation in community development, and we believe we have made a lasting
impression on the way the banking industry
views its proper role in the community.
I appreciate this opportunity to speak to the
subcommittee and welcome any questions you
may have.
•
625
Record of Policy Actions
of the Federal Open Market Committee
MEETING HELD ON MAY 16, 1989
1. Domestic
Policy
Directive
Information reviewed at this meeting suggested that
the rate of economic expansion had slowed in recent
months. Job gains had diminished noticeably in
March and April, and industrial production was
growing more slowly than in 1988. On the demand
side, growth in consumer spending appeared to
have slackened, and housing activity had weakened
considerably. Broad measures of prices had risen
somewhat more rapidly in 1989, with a significant
contribution from sharp increases in energy prices.
Year-over-year increases in labor costs appeared to
be continuing on an upward trend but at a more
gradual rate.
Gains in total nonfarm payroll employment
moderated substantially in March and April from
the rate recorded over the previous six months.
Much of the March-April increase occurred in
the services industry, where employment continued to expand at about the 1988 pace. In April,
job growth slackened at wholesale and retail
trade establishments, and factory employment
remained a bit lower than its January level.
Although new claims for unemployment insurance continued low, the civilian unemployment
rate rose from 5.0 percent in March to 5.3
percent in April.
Industrial production increased in April after
declining on balance over the preceding two
months. The April pickup reflected a sizable rise
in motor vehicle assemblies after a weak first
quarter as well as a retracing of the March
decline in output of other consumer goods. Production of business equipment continued to rise
in April at about the strong first-quarter pace.
Total industrial capacity utilization rose in April
but remained below its January level. Operating
rates in manufacturing edged up despite a further
decline in capacity utilization in primary processing industries.
Growth in consumer spending had slowed considerably this year from the pace in 1988. A
reduction in growth of spending for services
along with smaller outlays for durable goods,
notably motor vehicles, more than offset a
pickup in expenditures for nondurable goods. In
April, enhanced manufacturer incentives spurred
spending on motor vehicles and boosted retail
sales after a flat March, but outlays on other
durable goods remained weak. After a sizable
rise in the second half of 1988, housing starts
weakened sharply this year. In April, a substantial drop in starts of multifamily units brought
overall housing starts to their lowest level since
December 1982.
By contrast, recent indicators of business capital spending showed a rebound in early 1989
after a decline in the fourth quarter. Shipments of
nondefense capital goods excluding aircraft
picked up sharply in the first quarter; among the
major components, computers posted a sizable
increase after a sharp fourth-quarter decline, and
only business purchases of motor vehicles evidenced weakness. Nonresidential construction
activity rebounded sharply in March from a
February decline, and petroleum drilling turned
up, apparently in response to increases in oil
prices. In the first quarter, inventory investment
in the manufacturing sector continued at about
the average 1988 pace; a substantial part of this
accumulation was in stocks of work-in-process in
the aircraft industry where new orders and production remained on a distinct uptrend. The
overall inventory-to-shipments ratio had changed
little from the year-end level. At the retail level,
inventory-sales ratios edged up as a result not
only of further accumulations in the automotive
area but also of some rise in apparel and general
merchandise stocks.
626
Federal Reserve Bulletin • September 1989
After rising sharply in the first two months of
the year, producer prices of finished goods advanced at a substantially less rapid pace in March
and April. The April increase reflected another
large jump in energy prices; prices of consumer
foods turned down, partially reversing their sizable first-quarter increase, and prices of other
finished goods were little changed. At the intermediate and the crude materials levels, the April
price increases were attributable entirely to the
surge in energy prices. Both food and energy
prices contributed to the rise in consumer prices
in March. Nevertheless, excluding these components, consumer prices advanced at a slightly
faster rate in the first quarter of 1989 than in the
fourth quarter of 1988. The year-over-year increase in this measure of consumer prices had
edged up only marginally since the beginning of
the year, a pattern also evident in broad measures of labor compensation.
The nominal U.S. merchandise trade deficit
widened somewhat in February, but the average
deficit for January and February together was
smaller than that for the fourth quarter. Exports
for the January-February period were well above
their fourth-quarter level; much of the increase
occurred in agricultural products. Imports advanced considerably less, as declines in automotive products, consumer goods, and foods nearly
offset increases in oil, industrial supplies, and
capital goods. Available indicators suggested
that the pace of economic growth and inflation
had increased on balance in the major foreign
industrial countries in early 1989.
In foreign exchange markets, the tradeweighted value of the dollar in terms of the other
G-10 currencies rose further on balance over the
intermeeting period. The dollar declined early in
the period as market participants perceived central bank authorities as actively seeking a lower
dollar. Despite some continued narrowing of
short-term interest rate differentials between dollar-denominated assets and both mark and yen
assets, the dollar subsequently rebounded; market concerns about political uncertainties in Germany and Japan apparently were a factor in the
rise.
At its meeting on March 28, the Committee
adopted a directive that called for no immediate
change in the degree of pressure on reserve
positions but that provided for giving particular
weight to potential developments that might require some firming during the intermeeting period. An unchanged availability of reserves over
the period was expected to be consistent with the
growth of M2 and M3 over the period from
March through June at annual rates of about 3
percent and 5 percent respectively. It was agreed
that somewhat greater reserve restraint would,
or slightly lesser reserve restraint might, be acceptable depending on indications of inflationary
pressures, the strength of the business expansion, the behavior of the monetary aggregates,
and developments in foreign exchange and domestic financial markets.
Reserve conditions remained essentially stable
over the intermeeting interval following the
March meeting, except that stronger-than-anticipated federal tax revenues and related reserve
flows associated with the April tax date contributed for a time to slightly firmer reserve markets.
In the reserve maintenance periods completed
since the March meeting, adjustment plus seasonal borrowing averaged $565 million while
federal funds generally traded around 9% percent
or a little below.
With incoming information suggesting a more
moderate pace of economic expansion, other
market interest rates declined over the intermeeting period. Rates on short- and intermediate-term
U.S. Treasury issues dropped almost 1 percentage point, and those on private money market
instruments fell somewhat less. Yields generally
were down 25 to 50 basis points in long-term debt
markets, and major indexes of stock prices rose
substantially.
M2 and M3 grew more sluggishly in April than
had been anticipated, as substantial deposit outflows began after mid-month and continued into
early May. Declines in transaction and other
liquid balances were associated primarily with
outsized personal tax payments and a shortfall in
tax refunds. Growth of the broader monetary
aggregates also continued to be restrained by the
effects of the earlier rise in market interest rates,
which had substantially increased the opportunity costs of holding deposits. Through April,
expansion of M2 had been at a rate well below
the Committee's range for the year, while growth
of M3 had been in the lower portion of its range.
Record of Policy Actions of the Federal Open Market Committee
Reflecting the persisting weakness in transactions balances in 1989, Ml was below its average
level in the fourth quarter of 1988. Growth in
total domestic nonfinancial debt slowed somewhat in April, damped by strong tax revenues
that reduced the Treasury's financing needs and
by a virtual halt in refundings of state and local
obligations owing to the earlier climb in interest
rates.
The staff projection prepared for this meeting
suggested that the expansion of the nonfarm
economy over the remainder of 1989 was likely
to be at a pace somewhat below that officially
reported for the first quarter. The projection
continued to assume that the drought had ended
and that normal agricultural growing conditions
would prevail. The staff anticipated that, with
margins of unutilized labor and other production
resources remaining relatively low, most measures of prices and labor costs would increase at
somewhat faster rates in 1989 than in 1988. A
monetary policy to contain inflation would involve slow growth of overall demand and an
easing of pressures on labor and capital resources; to the extent that strength in final demands were to persist, such a policy would imply
additional pressures in financial markets. The
staff projected sluggish consumer outlays for
goods and services and further weakness in housing construction over the remainder of 1989. The
contribution of foreign trade to growth was likely
to be limited, and fiscal policy was expected to be
moderately restrictive. Growth in business capital spending, particularly for equipment purchases, was expected to moderate over the rest
of the year from its vigorous first-quarter pace.
In the Committee's discussion of the economic
situation and outlook, members focused on accumulating indications that the expansion in business activity was slowing to a pace that they
generally viewed as more sustainable and more
consistent with reducing inflation pressures over
time. The apparent slowing in the growth of
domestic consumer demand would tend to make
more domestic resources available for the production of export goods and the expansion of
domestic capital. There was little evidence at this
point of the kinds of imbalances that normally
signal a downturn in economic activity, but some
members expressed concern that a cumulative
627
slowing of the business expansion could not be
ruled out, especially since the effects of earlier
policy tightening actions had not been felt fully.
In this regard, the extended weakness in monetary growth, at a time of slowing economic
expansion, was a worrisome development. The
latest information on prices and wages was cited
as encouraging, possibly indicating that the underlying rate of inflation might be leveling out,
although it was still undesirably high.
In the course of the Committee's discussion,
members observed that the broad indications of
slower but continuing business expansion were
supported by reports on regional economic developments. While conditions varied across the
country, overall activity appeared to be advancing in most regions, though evidence of slower
growth was apparent in some of them. Retail
sales had flattened out in a number of areas. The
weakness in sales was more widespread and
pronounced in the case of motor vehicles, particularly after taking account of incentive programs introduced recently by auto manufacturers. Consumer spending was not likely to
increase rapidly over coming quarters but should
be sustained at a moderate pace by a high level of
employment and further expansion in personal
incomes. Housing construction was depressed in
many areas, and this sector of the economy was
not expected to make much, if any, net contribution to the expansion this year, at least on the
assumption of unchanged financial conditions in
mortgage markets. Business fixed investment
presented a mixed picture by industry but, in the
context of high capacity utilization rates and
strong pressures to cut costs, further overall
growth was viewed as a reasonable prospect
following the sharp pickup in the first quarter.
Conditions in agriculture were described as favorable in most parts of the nation, though some
areas were still affected by drought conditions.
Outside the motor vehicles sector, inventories
displayed few signs of the imbalances that usually presage a downturn in production; some of
the recent build-up involved work-in-process inventories in industries such as commercial aircraft that had firm order backlogs. Gains in net
exports had contributed importantly to continued
expansion over recent quarters. While further
progress in reducing the nation's trade deficit
628
Federal Reserve Bulletin • September 1989
was anticipated, some members emphasized the
potentially adverse implications of a strengthening dollar for the nation's trade balance and
domestic economic growth. On the whole, the
economic expansion appeared to be stabilizing at
a reduced but sustainable pace that tended to
reflect both capacity constraints in some industries and some slowing in the growth of overall
domestic demand.
With regard to the outlook for prices and
wages, a number of members emphasized that
inflationary pressures were still firmly rooted in
the economy and that the rate of inflation might
well remain unacceptably high for an extended
period. However, the slowdown in economic
growth should tend to moderate pressures on
costs over time, and the most recent information
on prices and wages had been encouraging. In
addition, the overall outlook for agricultural production this year had favorable implications for
food prices, and the recent strength of the dollar
augured well for domestic inflation, albeit at the
cost of reduced export opportunities. With respect to wages, some members commented that
recent patterns were better than they had expected, given the persistence of tight labor markets in many areas and the low rate of unemployment for the nation as a whole. However,
reference also was made to indications of greater
militancy on the part of labor in some parts of the
country and to a recent labor settlement that
could have inflationary implications. On balance,
in the context of slowing economic expansion,
several members noted that the risks to the
economy apparently had become less one-sided,
having shifted from a strong potential for greater
inflation to more equally weighted risks of higher
inflation and a substantial shortfall in economic
growth.
Turning to the conduct of monetary policy,
nearly all of the members endorsed a proposal to
maintain unchanged conditions of reserve availability, at least initially in the intermeeting period. There was considerable uncertainty as to
whether monetary conditions were sufficiently
restrictive to foster lower rates of inflation or had
become so tight as to cause an even greater
slowing in the expansion than might be needed to
relieve inflation pressures. In the circumstances,
most members viewed a steady policy as offering
the best promise at this point of being associated
with the financial market conditions and monetary growth rates that would support an appropriately restrained rate of economic expansion to
accommodate the Committee's anti-inflationary
objectives. Given current uncertainties, further
developments would need to be evaluated carefully and might well call for some adjustment of
policy, in either direction, before the next meeting of the Committee.
In the course of their discussion, the members
took account of a staff analysis that indicated that
unchanged reserve conditions were likely to be
associated with some rebound in the growth of
the monetary aggregates during the intermeeting
period. Earlier increases in market interest rates
in the context of typically sluggish adjustments of
offering rates on relatively liquid consumer-type
deposits had fostered slow growth in M2 and to a
lesser extent in M3, while demand deposits had
declined appreciably on balance since year-end.
In recent weeks, transaction and other liquid
accounts had been depressed further in conjunction with larger-than-expected tax payments and
atypically small tax refunds. The staff analysis
postulated some replenishment of tax-depleted
deposits and a lessening impact from earlier
increases in market rates on interest-sensitive
deposit accounts, although there was as yet little
evidence of a rebound.
In the light of indications of slower growth in
business activity and sluggish monetary expansion that had left M2 well below the lower bound
of its annual growth cone and M3 near the lower
limit of its annual range, members attached considerable importance to the need for an upturn in
monetary growth. Indeed, the behavior of the
monetary aggregates would need to be monitored
with special care over the weeks ahead, and a
failure of monetary growth to revive during this
period might well signal some further weakening
in the business expansion and warrant a special
consultation of the Committee. A pickup in M2
would be needed fairly soon to give some assurance that this aggregate was on a track that
would bring it within the Committee's range for
the year. In one view the monetary aggregates
already were sufficiently weak to justify some
immediate easing of reserve conditions in order
to improve the prospects that adequate monetary
Record of Policy Actions of the Federal Open Market Committee
growth would occur to sustain the economic
expansion. Other members preferred a more
cautious approach, in part to avert the potential
need for, and resulting market unsettlement that
would be associated with, a subsequent reversal
of the easing, particularly if special factors depressing recent monetary growth were reversed.
With respect to possible adjustments in monetary policy during the intermeeting period ahead,
a majority of the members supported a directive
that would make an easing or a tightening of
policy equally likely, depending on economic and
financial developments and the behavior of the
monetary aggregates. However, one member
preferred a directive that was tilted toward ease
in order to help assure a prompt policy response
if monetary growth did not rebound relatively
soon. Other members indicated a preference for
retaining the previous intermeeting instruction
that tilted more toward tightening than toward
easing. Persisting inflationary pressures and, in
this view, the still tentative indications of a
slower business expansion argued for a continuing bias toward restraint. Some members were
concerned that, under prevailing circumstances,
a move to a symmetrical directive could be
misinterpreted, when published, as a lessening of
the Committee's commitment to an anti-inflationary policy.
During the Committee's discussion, consideration was given to the technical relationship
between the level of adjustment plus seasonal
borrowing and that of the federal funds rate. In
comparison with experience in earlier years,
borrowing had been low for some time in relation
to the federal funds rate. However, the shortfall
appeared to have diminished in recent weeks—
largely because of a surge in seasonal borrowing—and, according to a staff analysis, unchanged reserve conditions over the upcoming
intermeeting period might encompass somewhat
higher average borrowing. In light of the persisting uncertainties in the relationship between borrowing and the federal funds rate, the members
accepted the need for continued flexibility in the
conduct of open market operations.
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 initially for no change in the degree of
629
pressure on reserve positions. Some firming or
some easing of reserve conditions would be
acceptable during the intermeeting period depending on indications of inflationary pressures,
the strength of the business expansion, the behavior of the monetary aggregates, and developments in foreign exchange and domestic financial
markets. The reserve conditions contemplated
by the Committee were expected to be consistent
with growth of M2 and M3 at annual rates of
around Wi and 4 percent respectively over the
three-month period from March to June. The
members agreed that the intermeeting range for
the federal funds rate, which provides one mechanism for initiating consultation of the Committee when its boundaries are persistently exceeded, should be left unchanged at 8 to 12
percent.
At the conclusion of the meeting, the following
domestic policy directive was issued to the Federal Reserve Bank of New York:
The information reviewed at this meeting suggests
that the rate of economic growth has slowed in recent
months. Gains in total nonfarm payroll employment
moderated substantially in March and April, and employment in manufacturing was about unchanged over
the two months. The civilian unemployment rate rose
considerably to 5.3 percent in April. Industrial production increased in April after declining on balance in the
preceding two months. Growth in consumer spending
has slowed considerably in recent months. Housing
starts declined further in April. Recent indicators of
business capital spending show a rebound after a
decline in the fourth quarter. The nominal U.S. merchandise trade deficit was smaller on average in January and February than in the fourth quarter. Broad
measures of prices have risen somewhat more rapidly
in 1989, with a significant contribution from sharp
increases in energy prices.
Interest rates have declined considerably since the
Committee meeting in late March. In foreign exchange
markets, the trade-weighted value of the dollar in
terms of the other G-10 currencies rose further on
balance over the intermeeting period.
Growth of M2 and M3 was sluggish in April, primarily because of a sizable decline in transactions balances. Through April, expansion of M2 has been at a
rate below the Committee's range for the year, while
growth of M3 has been in the lower portion of its
range.
The Federal Open Market Committee seeks monetary and financial conditions that will foster price
stability, promote growth in output on a sustainable
basis, and contribute to an improved pattern of inter-
630
Federal Reserve Bulletin • September 1989
national transactions. In furtherance of these objectives,
the Committee at its meeting in February established
ranges for growth of M2 and M3 of 3 to 7 percent and V/i
to l x /i percent, respectively, measured from the fourth
quarter of 1988 to the fourth quarter of 1989. The monitoring range for growth of total domestic nonfinancial debt
was set at 6'/2 to 10Vi percent for the year. The behavior of
the monetary aggregates will continue to be evaluated in
the light of movements in their velocities, developments in
the economy and financial markets, and progress toward
price level stability.
In the implementation of policy for the immediate
future, the Committee seeks to maintain the existing
degree of pressure on reserve positions. Taking account of indications of inflationary pressures, the
strength of the business expansion, the behavior of the
monetary aggregates, and developments in foreign
exchange and domestic financial markets, somewhat
greater reserve restraint or somewhat lesser reserve
restraint would be acceptable in the intermeeting period. The contemplated reserve conditions are expected to be consistent with growth of M2 and M3
over the period from March through June at annual
rates of about Wi and 4 percent, respectively. 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 8 to 12 percent.
Votes for this action: Messrs. Greenspan, Corrigan, Angell, Guffey, Heller, Johnson, Keehn,
Kelley, LaWare, Ms. Seger, and Mr. Syron. Vote
against this action: Mr. Melzer.
Mr. Melzer dissented because he favored an
immediate move to slightly less pressure on reserve
positions. While inflation was currently too high and
might move even higher in the short run, he felt that
the monetary policy restraint of the past two years
would eventually reduce inflationary pressures. In
addition, he was concerned that the very restrictive
monetary policy of recent quarters, evidenced by
extremely sluggish growth of reserves, the monetary base, and the monetary aggregates, heightened
the risks of a recession unless the policy were to be
reversed soon. In the event of a recession, a policy
response aimed at a quick recovery could make the
longer-term goal of price stability even more difficult
to attain.
2. Foreign
Currency
Authorization
At this meeting the Committee approved an
increase in the limit on holdings of foreign
currencies in the System Open Market Account. Paragraph ID of the Committee's Authorization for Foreign Currency Operations permitted the Federal Reserve Bank of New York,
for the System Open Market Account, to maintain an overall open position in all foreign
currencies not exceeding $12.0 billion. System
holdings of such currencies had risen rapidly
this year and totaled nearly $11 billion, based
on historical costs. In light of the potential for
further System acquisitions of foreign currencies in coordination with similar transactions by
the U.S. Treasury and in cooperation with
foreign monetary authorities, the Committee
agreed to raise the limit in Paragraph ID of the
Authorization to $15.0 billion, effective immediately.
Votes for this action: Messrs. Greenspan, Corrigan, Angell, Guffey, Heller, Johnson, Keehn,
Kelley, Melzer, Ms. Seger, and Mr. Syron. Vote
against this action: Mr. LaWare.
Mr. LaWare dissented because he wanted to
convey his skepticism about the effectiveness
of sterilized intervention in foreign exchange
markets. He did not object to the specific
transactions that had been conducted recently.
Following the meeting the dollar remained
under strong upward pressure that was resisted
through very large additional System purchases
of foreign currencies. Effective June 14, 1989, the
Committee approved a further increase to $18.0
billion in the limit on System holdings of foreign
currencies under Paragraph ID of the Authorization for Foreign Currency Operations.
Votes for this action: Messrs. Greenspan, Corrigan, Angell, Guffey, Heller, Johnson, Keehn,
Kelley, LaWare, Melzer, Ms. Seger, and Mr. Syron. Votes against this action: None.
631
Announcements
NOMINATIONS SOUGHT FOR APPOINTEES
TO CONSUMER ADVISORY COUNCIL
The Federal Reserve Board announced on July 7,
1989, that it is seeking nominations of qualified
individuals for seven appointments to its Consumer Advisory Council, to replace members
whose terms expire on December 31,1989. Nominations should be received by August 31, 1989.
The Consumer Advisory Council was established by the Congress in 1976, at the suggestion
of the Board, to advise the Board on the exercise
of its duties under the Consumer Credit Protection Act and on other consumer-related matters.
The thirty-member Council, with staggered
three-year terms of office, meets three times a
year.
Nominations should include the name, address, and telephone number of the nominee;
past and present positions held; and special
knowledge, interests, or experience related to
consumer credit or other consumer financial services.
Nominations should be submitted in writing to
Dolores S. Smith, Assistant Director, Division of
Consumer and Community Affairs, Board of
Governors of the Federal Reserve System,
Washington, D.C. 20551.
REGULATION
CC:
AMENDMENTS
The Federal Reserve Board adopted on July 28,
1989, two amendments to Regulation CC, which
implements the Expedited Funds Availability
Act, regarding the treatment of bank payable
through checks.
The amendments are designed to help ease the
operational difficulties and lessen the risks imposed on banks as a result of a 1988 court order.
The court order ruled that payable through
checks must be treated as local or nonlocal based
on the location of the bank on which they are
written rather than that of the payable through
bank.
The two amendments require the following:
1. Payable through checks of banks are to be
conspicuously labeled with the name, location,
and first four digits of the nine-digit routing
number of the bank on which the check is written
and the legend "payable through" followed by
the name and location of the payable through
bank.
2. A bank issuing payable through checks must
bear the risk of loss for the return of such checks
from a nonlocal payable through bank, to the
extent that the return took longer than would
have been required if the check had been returned expeditiously by the bank on which it was
written.
These amendments will become effective on
February 1, 1991, and on February 1, 1990,
respectively.
PROPOSED ACTIONS
The Federal Reserve Board issued on July 12,
1989, proposed amendments to its Regulation B
(Equal Credit Opportunity) that implement provisions of the Women's Business Ownership Act
regarding notifications and recordkeeping for
business credit applications. Comments are requested by September 15, 1989.
REVISED LIST OF OTC
NOW
AVAILABLE
STOCKS
The Federal Reserve Board published on July 28,
1989, a revised list of over-the-counter (OTC)
stocks that are subject to its margin regulations,
effective August 14, 1989.
This revised List of Marginable OTC Stocks
supersedes the List of Marginable OTC Stocks
that was effective on May 8, 1989. The changes
632
Federal Reserve Bulletin • September 1989
that have been made to the list, which now
includes 2,939 OTC stocks, are as follows: 57
stocks have been included for the first time, 46
under National Market System (NMS) designation; 85 stocks previously on the list have been
removed for substantially failing to meet the
requirements for continued listing; and 54 stocks
have been removed for reasons such as listing on
a national securities exchange or involvement in
an acquisition.
This list is published by the Board for the
information of lenders and the general public. It
includes all over-the-counter securities designated by the Board pursuant to its established
criteria as well as all stocks designated as NMS
securities for which transaction reports are required to be made pursuant to an effective transaction reporting plan. Additional OTC securities
may be designated as NMS 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 November 1989.
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.
SETTLEMENT OF
ENFORCEMENT PROCEEDINGS
The Federal Reserve Board announced on July
27, 1989, an agreement by a Massachusetts
banker to pay a civil money penalty of $1 million
in settlement of enforcement proceedings instituted by the Board pursuant to the Bank Holding
Company Act.
Edward S. Buchanan, a former officer and
director of First Massachusetts Management
Corporation and First Massachusetts Financial
Corporation, Brockton, without admitting any
allegations in the proceeding, agreed to pay a fine
of $1 million over a five-year period.
SYSTEM MEMBERSHIP:
OF STATE BANKS
ADMISSION
The following state banks were admitted to membership in the Federal Reserve System during the
period June 1 through July 31, 1989.
Colorado
Aspen
Alpine Bank
Florida
Pembroke Pines
Flamingo Bank
Illinois
Sandwich
Union Bank Sandwich
Stockton
First Bank of Stockton/Warren
Streator
Union Bank Streator
Maryland
Annapolis
Bank of Annapolis
Pennsylvania
Lemoyne
Pennsylvania State Bank
Virginia
Gloucester
Peninsula Trust Bank
633
Legal Developments
FINAL RULE—AMENDMENT
G, T, U AND X
TO
REGULATIONS
The Board of Governors is amending 12 C.F.R. Parts
207, 220, 221 and 224, its Securities Credit Transactions; List of Marginable OTC Stocks. The List of
Marginable OTC Stocks is comprised of stocks traded
over-the-counter (OTC) that have been determined by
the Board of Governors of the Federal Reserve System to be subject to the margin requirements under
certain Federal Reserve regulations. The List is published four times a year by the Board as a guide for
lenders subject to the regulations and the general
public. This document sets forth additions to or deletions from the previously published List which was
effective May 8, 1989, and will serve to give notice to
the public about the changed status of certain stocks.
Effective August 14, 1989, accordingly, pursuant to
the authority of sections 7 and 23 of the Securities
Exchange Act of 1934, as amended (15 U.S.C. §§ 78g
and 78w), and in accordance with 12 C.F.R. 207.2(k)
and 207.6(c) (Regulation G), 12 C.F.R. 220.2(s) and
220.17(c) (Regulation T), and 12 C.F.R. 221.20) and
221.7(c) (Regulation U), there is set forth below a
listing of deletions from and additions to the Board's
List of Marginable OTC Stocks:
Biomerica, Inc.: $.04 par common
Bombay Palace Restaurants, Inc.: $.01 par common
BSD Medical Corporation - Delaware: $.01 par common
Butler National Corporation: $.10 par common
Candela Laser Corporation: $.01 par common
Carolin Mines, Ltd.: Class A, no par common
Celina Financial Corporation: Class A, $.50 par common
Chaparral Resources, Inc.: $.10 par common
Charlotte Charles, Inc.: $.10 par common
Charter-Crellin, Inc.: $.01 par common
Chemex Pharmaceuticals, Inc.: Warrants (expire
05-29-89), Class 1, warrants (expire 05-20-90)
Circle Express, Inc.: N o par common
CMS Advertising, Inc.: $.01 par common
Colorocs Corporation: Class D, warrants (expire
05-04-89)
Comcast Corporation: 5-Vi% convertible subordinated
debentures
Commonwealth Mortgage Company, Inc.: $.10 par
common
Comp-U-Check, Inc.: $.10 par common
Costco Wholesale Corporation: 7-V4% convertible
subordinated debentures
Crescott, Inc.: $.001 par common
Deletions From List
Stocks Removed For Failing Continued
Listing Requirements
American Carriers, Inc.: N o par common
American Continental Corporation: $.01 par common,
$1.00 par exchangeable preferred
American Insured Mortgage Investors '84: Depository
units of limited partnership interest
Animed, Inc.: $.01 par common
Applied Data Communications, Inc.: $.01 par common
Aris Corporation: $.01 par common
Ask Corporation: N o par common
Associated Companies, Inc.: N o par common
Avant-Garde Computing, Inc.: N o par common
BI Incorporated: N o par common
Big Bear, Inc.: $.01 par common
Bio-Technology General Corp.: $.01 par common
De Tomaso Industries, Inc.: $2.50 par common
Dest Corporation: $.01 par common
Digitech, Inc.: $.10 par common
Eagle Telephonies, Inc.: $.01 par common
Electro-Catheter Corporation: $.10 par common
EMS Systems, Ltd.: N o par common
Energy Conversion Devices, Inc.: $.01 par common
Exovir, Inc.: $.01 par common
Farm House Foods Corporation: $.05 par common
Great Southern Federal Savings Bank (Georgia): $1.00
par common
GTS Corporation: $.01 par common
Haber, Inc.: $.01 par common, Voting, $2.00 par
cumulative convertible preferred
634
Federal Reserve Bulletin • September 1989
Harvard Group, PLC: American Depository Receipts
for ordinary shares (par value 2p)
Health Images, Inc.: Series A, $.01 par cumulative
convertible preferred
Integrated Resources American Insured Mortgage Investors '85: Depository units of limited partnership
interest
Kaypro Corporation: N o par common
Kenilworth Systems Corporation: $.01 par common
Kimbark Oil & Gas Company: $.10 par common
Kings Road Entertainment, Inc.: $.01 par common
Kreisler Manufacturing Corporation: $.50 par common
Lund Enterprises, Inc.: Warrants (expire 04-30-91)
Margaux, Inc.: $.01 par common
Maxicare Health Plans, Inc.: No par common, 7%
convertible subordinated debentures
Municipal Development Corporation: $.01 par common
National Business Systems, Inc.: No par common
N e w Visions Entertainment Corporation: $.001 par
common, Series A, par cumulative convertible preferred
Nucorp, Inc.: Warrants (expire 10-31-89)
OCG Technology, Inc.: $.10 par common
Olson Industries, Inc.: $3.00 par common
Paper Corporation of America: Series B, $.01 par
preferred stock
Ragen Corporation: $.125 par common
Regina Company, Inc., The: $.0001 par common
Reliable Life Insurance Company, Inc.: Class A, $1.00
par common
Ridge wood Properties, Inc.: $.01 par common
Royal Business Group, Inc.: $1.00 par common
RTI, Inc.: $.01 par common
TS Industries, Inc.: $.02 par common
United Building Services Corporation of Delaware:
$.01 par common
United States Antimony Corporation: $.01 par common
Vicon Fibert Optics Corporation: $.10 par common
Vipont Pharmaceutical, Inc.: Warrants (expire
06-25-89)
Stocks Removed For Listing On A National
Securities Exchange Or Being Involved In An
Acquisition
American Income Life Insurance Company: $1.00 par
common
Apollo Computer, Inc.: $.02 par common, 1-XA% convertible subordinated debentures
Bank of Redlands: $1.25 par common
Berry Petroleum Company: Class A, $.01 par common
Blockbuster Entertainment Corp.: $.10 par common
Brandywine Savings & Loan Association (Pennsylvania): $1.00 par common
Brinkman Instruments, Inc.: $.01 par common
Brintec Corporation: $.01 par common
Cadnetix Corp.: $.01 par common
Cherokee Group, The: N o par common
Colonial American Bankshares Corporation: $5.00 par
common
Component Technology Corp.: $.01 par common
Conversion Industries, Inc.: N o par common
CPI Corporation: $.40 par common
Criterion Group, Inc.: Class A, $.01 par common
Enseco Incorporated: $.01 par common
Envirodyne Industries, Inc.: $.10 par common
Excelan, Inc.: $.01 par common
Falstaff Brewing Corporation: $1.00 par common
General Ceramics, Inc.: $1.00 par common
Sahlen & Associates, Inc.: $.001 par common
Scherer, R.P. Corporation: $1.00 par convertible preferred
Scribe Systems, Inc.: $.01 par common
Southland Financial Corporation: $1.00 par common
Staar Surgical Company: $.01 par common
Status Game Corporation: $.01 par common
Sun State Savings and Loan Association (Arizona):
$1.00 par common
Total Health Systems, Inc.: $.01 par common
Holmes, D.H. Company, Limited: $2.50 par common
HWC Distribution Corp.: $.01 par common
Irwin Magnetic Systems, Inc.: $.001 par common
ISC Systems Corporation: N o par common
Itel Corporation: $1.00 par common, Class B, Series,
C, $1.00 par convertible preferred
Kemper Corporation: $5.00 par common
Krueger, W.A. Company: $.20 par common
Legal Developments
Land of Lincoln Savings and Loan: $1.00 par common
Mayfair Industries, Inc.: $.01 par common
MBS Textbook Exchange, Inc.: $.01 par common
National FSI, Inc.: $.01 par common
Network Equipment Technologies, Inc.: $.01 par common
Pacific Western Bancshares: N o par common
Plant Genetics, Inc.: $.01 par common
Poly-Tech, Inc.: N o par common
Polymer International Corp.: $.01 par common
Princeville Corp.: $.20 par common
Property Trust of America: $1.00 par shares of beneficial interest
Rowe Furniture Corporation: $1.00 par common
Servico, Inc.: $.10 par common
Sound Warehouse, Inc.: $.01 par common
Stocker & Yale, Inc.: $1.00 par common
Stotler Group Inc.: $1.00 par common
Superior Electric Company, The: $1.00 par common
TCF Financial Corporation: $.01 par common
Thrifty Rent-A-Car System, Inc.: $.05 par common
Timberjack Corporation: $.01 par common
Total System Services, Inc.: $.10 par common
United Artists Communications, Inc.: $.01 par common
635
Chempower, Inc.: $.10 par common
Cirrus Logic, Inc.: N o par common
Columbia Pictures Entertainment, Inc.: Warrants (expire 06-01-92)
Comptronix Corporation: $.01 par common
Conservative Savings Bank (Nebraska): $.01 par common
Consilium, Inc.: N o par common
Cooker Restaurant Corporation: N o par common
CRH, PLC: American Depository Receipts
Duty Free International, Inc.: $.01 par common
Dyncorp: Class A, 17% redeemable preferred
Eastchester Financial Corporation: $.01 par common
Fidelity Federal Savings Bank (Virginia): $8.00 par
common
First Financial Management Corp.: 1% convertible
subordinated debentures
First Merchants Corporation: N o par common
First Western Bancorp, Inc. (Pennsylvania): $5.00 par
common
Fleet Aerospace, Inc.: $.01 par common
Foothill Independent Bancorp: N o par common
Goal Systems International, Inc.: N o par common
Handex Environmental Recovery, Inc.: $.01 par common
Independent Bankgroup, Inc. (Vermont): $1.00 par
common
Universal Furniture Limited: $.01 par ordinary shares
James Madison Limited: $1.00 par common
Vitronics Corporation: $.01 par common
Waxman Industries, Inc.: N o par common
Kentucky Medical Insurance Company: Class A,
$2.80 par common
Additions To The List
Lifeline Healthcare Group, Ltd.: $.10 par common
AKZO, N.V.: American Depository Receipts
Alameda Bancorporation: $2.50 par common
American First Financial Fund 1987 - A Limited
Partnership Beneficial unit certificates, representing
limited partnership interest
Miniscribe Corporation: 7-Vi% convertible subordinated debentures
Mission-Valley Bancorp (California): N o par common
Bank Maryland Corp.: $.05 par common
Biogen, Inc.: $.01 par convertible exchangeable preferred
Bytex Corporation: $.10 par common
CCAIR, Inc.: $.01 par common
Cell Technology, Inc.: $.01 par common, Warrants
(expire 08-27-92)
Chemdesign Corporation: $.01 par common
Nationwide Cellular Service, Inc.: $.01 par common,
Warrants (expire 05-04-92)
New Milford Bank & Trust Company, The (Connecticut): $5.00 par common
Pioneer Federal Savings Bank (Washington): $1.00 par
common
Pop Radio Corporation: $.01 par common
Providence and Worchester Railroad Company: $.50
par common
636
Federal Reserve Bulletin • September 1989
Rexhall Industries, Inc.: N o par common
Robert Half International, Inc.: 1-XA% convertible
subordinated debentures
Schultz Sav-o Stores, Inc.: $.05 par common
Sevenson Environmental Services, Inc.: $.10 par common
Staples, Inc.: $.0006 par common
Symantex Corporation: $.01 par common
Synetic, Inc.: $.01 par common
Tele-Communications, Inc.: Rights (expire 01-31-95)
Tocor, Inc.: Units (expire 12-31-94)
Tseng Labs, Inc.: $.005 par common
United Artists Entertainment Company: Class A,
$.001 par common, Class B, $.001 par common
Unitog Company: $.01 par common
UNR Industries, Inc.: Warrants (expire 05-31-95)
XSIRIUS Scientific, Inc.: $.01 par common
Yankee Energy System, Inc.: $5.00 par common
CORRECTION
TO REGULATION
Z
The Board of Governors is correcting a technical error
to footnote 10b of 12 C.F.R. Part 226, its Regulation Z
(Truth in Lending). On June 9, 1989, the Board issued
a final rule amending Regulation Z to implement the
Home Equity Loan Consumer Protection Act of 1988.
The final rule contained two references to footnote
10b. The first reference accompanies section
226.5b(d)(5)(ii). The second reference accompanies
section 226.16(d)(3). This notice changes the second
footnote 10b reference to refer to new footnote 36b.
The following corrections are made to 12 C.F.R.
Part 226:
1. Section 226.16(d)(3) is corrected by revising the
reference to the footnote at the end of the paragraph
and by adding a new footnote 36b to read as follows:
Section 226.16—Advertising
*
*
*
(3) * * *36b
36b. See footnote 10b.
AMENDMENT
TO REGULATION
CC
The Board of Governors is amending 12 C.F.R. Part
229, its Regulation CC, Availability of Funds and
Collection of Checks. The rule changes will alleviate
the operational difficulties and additional risks associated with the acceptance for deposit of bank payable
through checks.
The effective date for the amendments to
section 229.38 of the regulation and commentary is
February 1, 1990, the effective date for the amendments to section 229.36 of the regulation and commentary is February 1, 1991. For the reasons set out in the
preamble, 12 C.F.R. Part 229 is proposed to be
amended as follows:
Part 229—Availability of Funds and Collection
of Checks
1. The authority citation for Part 229 continues to read
as follows:
Authority: Title VI of Pub. L. 100-86, 101 Stat, 552,
635, 12 U.S.C. 4001 et seq.
2. In section 229.36, the heading is revised and a new
paragraph (e) is added to read as follows:
Section 229.36—Presentment and issuance of
checks
(e) Issuance of payable through checks. A bank that
arranges for checks payable by it to be payable
through another bank shall require that the following
information be printed conspicuously on the face of
each check:
(1) the name, location, and first four digits of the
nine-digit routing number of the bank by which the
check is payable; and
(2) the words "payable through" followed by the
name and location of the payable through bank.
This provision shall be effective February 1, 1991, and
after that date banks that use payable through arrangements must require their customers to use checks that
meet the requirements of this provision.
3. In section 229.38, paragraph (d) is redesignated as
paragraph (d)(1), a new heading is added to paragraph
(d), and a new paragraph (d)(2) is added to read as
follows:
Legal Developments
Section 229.38—Liability
%
(d)QJ * * *
Responsibility
% $
$
sc
f
for certain aspects of checks
(2) Responsibility for payable through checks. In
the case of a check that is payable by a bank and payable
through a paying bank located in a different check processing region than the bank by which the check is payable,
the bank by which the check is payable is responsible for
damages under paragraph (a) of this section, to the extent
that the check is not returned to the depositary bank
through the payable through bank as quickly as the check
would have been required to be returned under section
229.30(a) had the bank by which the check is payable —
(i) received the check as paying bank on the date
the payable through bank received the check; and
(ii) returned the check as paying bank in accordance with section 229.30(a)(1).
Responsibility under this paragraph shall be treated
as negligence of the bank by which the check is
payable for purposes of paragraph (c) of this section.
637
quired information is deemed conspicuous if it is
printed in a type size not smaller than six-point type
and if it is contained in the title plate, which is
located in the lower left quadrant of the check. The
required information may be conspicuous if it is
located elsewhere on the check.
If a payable through check does not meet the
requirements of this paragraph, the bank by which
the check is payable may be liable to the depositary
bank or others as provided in section 229.38. For
example, a bank by which a payable through check is
payable could be liable to a depositary bank that
suffers a loss, such as lost interest or liability under
Subpart B, that would not have occurred had the
check met the requirements of this paragraph. The
bank by which the check is payable may be liable for
additional damages if it fails to act in good faith.
b. Section 229.38 is amended by redesignating the first
three paragraphs of paragraph (d) as paragraph (d)(1);
by adding a new heading to paragraph (d); by adding a
new paragraph (d)(2) to follow newly redesignated
paragraph (d)(1); and by revising the last paragraph of
paragraph (d) to read as follows:
Section 229.38—Liability
4. Appendix E—Commentary to Part 229 is amended
to read as follows:
a. Section 229.36 is amended by revising the heading
and adding a new paragraph (e).
APPENDIX
E—COMMENTARY
Section 229.36—Presentment and issuance of
checks
(e) Issuance of payable through checks.
If a bank arranges for checks payable by it to be
payable through another bank, it must require its
customers to use checks that contain conspicuously
on their face the name, location, and first four digits
of the nine-digit routing number of the bank by which
the check is payable and the legend "payable
through" followed by the name and location of the
payable through bank. The first four digits of the
nine-digit routing number and the location of the
bank by which the check is payable must be associated with the same check processing region. (This
section does not affect section 229.36(b).) The re
(d)^Responsibility
***
for certain aspects of checks
(2) Responsibility for payable through checks. This
paragraph provides that the bank by which a payable through check is payable is liable for damages
under paragraph (a) of this section to the extent that
the check is not returned through the payable
through bank as quickly as would have been necessary to meet the requirements of section 229.30(a)(1)
(the 2-day/4-day test) had the bank by which it is
payable received the check as paying bank on the
day the payable through bank received it. The
location of the bank by which a check is payable for
purposes of the 2-day/4-day test may be determined
from the location or the first four digits of the routing
number of the bank by which the check is payable.
This information should be stated on the check. (See
section 229.36(e) and accompanying Commentary.)
Responsibility under paragraph (d)(2) does not include responsibility for the time required for the
forward collection of a check to the payable through
bank.
Generally, liability under paragraph (d)(2) will be
limited in amount. Under section 229.33(a), a paying
bank that returns a check in the amount of $2,500 or
638
Federal Reserve Bulletin • September 1989
more must provide notice of nonpayment to the
depositary bank by 4:00 p.m. on the second business
day following the banking day on which the check is
presented to the paying bank. Even if a payable
through check in the amount of $2,500 or more is not
returned through the payable through bank as
quickly as would have been required had the check
been received by the bank by which it is payable, the
depositary bank should not suffer damages unless it
has not received timely notice of nonpayment. Thus,
ordinarily the bank by which a payable through
check is payable would be liable under paragraph (a)
only for checks in amounts up to $2,500, and the
paying bank would be responsible for notice of
nonpayment for checks in the amount of $2,500 or
more.
Responsibility under paragraphs (d)(1) and (d)(2) is
treated as negligence for comparative negligence purposes, and the contribution to damages under paragraphs (d)(1) and (d)(2) is treated in the same way as
the degree of negligence under paragraph (c) of this
section.
ORDERS ISSUED UNDER BANK
COMPANY ACT
the Toledo, Ohio banking market.1 The principals of
Capital are not affiliated with any other depository
institutions in this market. Based on all of the facts of
record, the Board believes that consummation of the
proposal would not result in any adverse effects upon
competition or increase in the concentration of banking resources in any relevant area. Accordingly, the
Board concludes that competitive considerations are
consistent with approval.
The financial and managerial resources of Capital
and Bank are consistent with approval. Considerations relating to the convenience and needs of the
communities 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. The transaction shall
not be consummated before the thirtieth calendar
day following the effective date of this Order, or later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of
Cleveland, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 25, 1989.
HOLDING
Orders Issued Under Section 3 of the
Holding Company Act
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Kelley, and LaWare. Absent and not
voting: Governor Heller.
JENNIFER J. JOHNSON
Associate
Secretary of the Board
Capital Holdings, Inc.
Sylvania, Ohio
Order Approving the Formation of a Bank Holding
Company
Capital Holdings, Inc., Sylvania, Ohio ("Capital"),
has applied for the Board's approval under section
3(a)(1) of the Bank Holding Company Act ("BHC
Act") (12 U.S.C. § 1842(a)(1)), to become a bank
holding company by acquiring 100 percent of the
outstanding voting shares of Capital Bank, N.A.,
Sylvania, Ohio ("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (54 Federal Register 3850 (1989)). The time
for filing comments has expired, and the Board has
considered the application and all comments received
in light of the factors set forth in section 3(c) of the
BHC Act.
Capital is a nonoperating corporation organized for
the purpose of becoming a bank holding company by
acquiring Bank, a de novo bank. Bank will operate in
Fort Wayne National Corporation
Fort Wayne, Indiana
Order Approving Merger of Bank Holding
Companies
Fort Wayne National Corporation, Fort Wayne, Indiana ("Fort Wayne"), a bank holding company within
the meaning of the Bank Holding Company Act
("BHC Act"), has applied for the Board's approval
under section 3 of the BHC Act to acquire by merger
FN Bancorp, Warsaw, Indiana ("Bancorp"), and
1. The Toledo, Ohio banking market includes: Lucas County, Ohio;
Wood County, Ohio, minus the town of Fostoria; the eastern half of
Swan Creek Township and the southeastern quadrant of Fulton
Township in Fulton County, Ohio; the townships of Clay, Allen,
Harris and Benton in Ottawa County, Ohio; Woodville Township in
Sandusky County, Ohio; and the townships of Whiteford, Bedford
and Erie in Monroe County, Michigan.
Legal Developments
thereby to acquire its subsidiary bank, First National
Bank of Warsaw, Warsaw, Indiana. 1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (54 Federal Register 7882 (1989)). The time
for filing comments has expired, and the Board has
considered the application and all comments received
in light of the factors set forth in section 3(c) of the
BHC Act.
Fort Wayne is the eleventh largest commercial
banking organization in Indiana, controlling deposits
of $1.0 billion, representing approximately 2.7 percent
of the total deposits in commercial banking organizations in the state. 2 Bancorp is the twenty-ninth largest
commercial banking organization in Indiana, controlling deposits of $218.5 million, representing less than
one percent of the total deposits in commercial banking organizations in the state. Upon consummation of
this proposal, Fort Wayne would become the seventh
largest commercial banking organization in the state,
controlling deposits of $1.3 billion, representing approximately 3.2 percent of the total deposits in commercial banks in the state. Consummation of this
proposal would not significantly affect the concentration of banking resources in Indiana.
Fort Wayne and Bancorp do not compete directly in
any banking market. Accordingly, consummation of
the proposal would not eliminate any significant existing competition in any relevant banking market. Consummation also would not have any significant adverse effect on probable future competition in any
relevant banking market. In addition, the financial and
managerial resources of Fort Wayne, Bancorp, and
their subsidiaries are consistent with approval.
In considering the convenience and needs of the
community to be served, the Board has taken into
account the record of Fort Wayne's banks under the
Community Reinvestment Act (12 U.S.C. § 2901
et seq.) ("CRA"). The CRA requires the federal bank
supervisory agencies to encourage financial institutions to help meet the credit needs of the local communities in which they operate consistent with the safe
and sound operation of such institutions. To accomplish this end, the CRA requires the appropriate federal supervisory authority to "assess the institution's
record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the institution." The Board is required to "take
such record into account in its evaluation" of applications under section 3 of the BHC Act.
1. After the merger, Fort Wayne will be the surviving corporation.
2. Deposit data are as of June 30, 1987.
639
In this regard, the Board has received comments
from the Community Reinvestment Alliance, Fort
Wayne, Indiana ("Alliance"). Alliance has alleged
that the CRA record of Fort Wayne's lead bank, Fort
Wayne National Bank, Fort Wayne, Indiana
("Bank"), is deficient, particularly with regard to
mortgage lending, home improvement lending, and
other types of lending in minority and low- and moderate-income neighborhoods located in the Fort
Wayne banking market. 3
The Board has reviewed the CRA record of Bank in
accordance with its practice and procedure. The
Board notes that Bank and Fort Wayne's other subsidiary banks have received satisfactory CRA assessments from their primary supervisory agencies. The
Board also notes that a review of data submitted
pursuant to the Home Mortgage Disclosure Act shows
that Bank has been making loans in all areas of its
community, including low- and moderate-income areas. In addition, Bank has participated in several
government sponsored lending programs, providing
home mortgage and home improvement loans in minority census tracts, and recently became enrolled in
the Indiana Housing Finance Authority Mortgage Finance Program, which authorizes the bank to originate
FHA loans. Bank has made numerous loans to lowand moderate-income individuals under the Housing
Acquisition Rehabilitation Transaction program, a triparty participation program between Bank, the city of
Fort Wayne, and the Federal National Mortgage Association. Bank also participates in the Lincoln Life
Improved Housing and Indiana Housing Finance Authority Home Loan Programs, both of which assist
first time home buyers. 4
The Board notes that in 1988, Bank has been active
in extending credit in an "Enterprise Zone," a governmentally defined disadvantaged area. 5 In addition,
Bank participates in the Indiana Department of Com3. Alliance also alleges that Bank has not originated any government
guaranteed loans for the last five years despite the fact that these loans
are listed in Bank's CRA statement.
4. The Board has previously recognized that participation in these
types of programs is an effective means for assuring that the services
of depository institutions reach low- and moderate-income segments
of the communities served by these institutions (see e.g., Bank of
Ireland, 75 FEDERAL RESERVE BULLETIN 39, 41 (1989)), and recently
affirmed this position in the Community Reinvestment Act Statement
released jointly by the federal depository institutions regulatory
agencies on March 21, 1989. 54 Federal Register 13,742 (1989). As
noted in the Statement, federal agencies will continue to consider
favorably financial-institution leadership in concerted efforts to improve low- and moderate-income areas in the community and participation by financial institutions in public and private partnerships to
promote economic and community development efforts.
5. The Enterprise Zone is an area defined by the city of Fort Wayne,
the purpose of which is to revitalize the area comprising the Zone by
offering tax incentives and financing to businesses and industries
located within the Zone. The Zone is made up primarily of low- and
moderate-income and minority tracts.
640
Federal Reserve Bulletin • September 1989
merce Energy Conservation Program, providing
grants for projects such as applying weatherstripping
to homes. Bank has made a number of small business
loans to minority-owned businesses in recent years,
and is seeking to become a certified Small Business
Administration lender in 1989. Fort Wayne has committed to increase efforts to ascertain the credit needs
of the low- and moderate-income and minority areas of
its community, increase advertising of its participation
in special credit programs, and improve advertising of
its general credit programs and services. 6
On the basis of the record in this case, including the
past CRA performance of Fort Wayne and its subsidiary banks, as well as Fort Wayne's commitments, the
Board concludes that considerations relating to the
convenience and needs of the communities to be
served are consistent with approval.
Accordingly, based on the foregoing and other facts
of record, the Board has determined that the application should be, and hereby is, approved. The proposal
shall not be consummated before the thirtieth calendar
day following the effective date of this Order, or later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of
Chicago, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 17, 1989.
Voting for this action: Chairman Greenspan and Governors
Johnson, Angell, Kelley, and LaWare. Absent and not voting: Governors Seger and Heller.
JENNIFER J. JOHNSON
Associate
Secretary
of the Board
Ponte Vedra Banking Corporation
Ponte Vedra Beach, Florida
Order Approving
Company
Formation
of a Bank
Holding
Notice of the application, affording an opportunity for
interested persons to submit comments, has been duly
published (54 Federal Register 10,586 (1989)). The time
for filing comments has expired, and the Board has
considered the application and all comments received in
light of the factors set forth in section 3(c) of the Act.
Ponte Vedra is a non-operating company formed for the
purpose of acquiring Bank, a de novo institution. Bank
will operate in the St. John's County, Florida banking
market.1 The principals of Ponte Vedra are not affiliated
with any other depository institution in the market. Based
on all of the facts of record, the Board believes that
consummation of the proposal would not result in any
adverse effects upon competition or increase in the concentration of banking resources in any relevant area.
Accordingly, the Board concludes that competitive considerations under the Act are consistent with approval.
The financial and managerial resources and future
prospects of Ponte Vedra and Bank are consistent with
approval. Considerations relating to the convenience
and needs of the communities to be served also are
consistent with approval.
Based on the foregoing and all of the facts of record,
and in reliance on commitments made and conditions
agreed to by certain investors in Ponte Vedra, the
Board has determined that consummation of this
transaction would be in the public interest and 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 the Order, unless such period is extended for
good cause by the Board or the Federal Reserve Bank
of Atlanta, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 19, 1989.
Voting for this action: Chairman Greenspan and Governors
Johnson, Angell, Kelley, and LaWare. Absent and not voting: Governors Seger and Heller.
JENNIFER J. JOHNSON
Ponte Vedra Banking Corporation, Ponte Vedra
Beach, Florida ("Ponte Vedra"), has applied for the
Board's approval under section 3(a)(1) of the Bank
Holding Company Act ("Act") (12 U . S . C . § 1841
et seq.), to become a bank holding company by
acquiring all of the outstanding voting shares of Ponte
Vedra National Bank, Ponte Vedra Beach, Florida
("Bank").
6. These commitments derive in part from meetings between
representatives of Fort Wayne and Alliance. The Reserve Bank
arranged these meetings in accordance with 12 C.F.R. 262.25(c), in an
effort to narrow the issues in this case, and to provide a forum for the
resolution of differences between Alliance and Fort Wayne.
Associate
Secretary
of the
Board
Texop Bancshares, Inc.
Dallas, Texas
Order Approving
Acquisition
of a Bank
Texop Bancshares, Inc., Dallas, Texas ("Applicant"),
a bank holding company within the meaning of the
Bank Holding Company Act (the " B H C Act"), has
1. The St. John's County banking market is approximated by
St. John's County, Florida, minus the city of Hastings.
Legal Developments
applied for the Board's approval under section 3 of the
BHC Act (12 U.S.C. § 1842) to acquire control of
Texas American Bridge Bank, N.A., a bridge bank
("Bank") created by the Federal Deposit Insurance
Corporation ("FDIC"), to acquire the assets and
assume the deposits and liabilities of the 24 bank
subsidiaries of Texas American Bancshares, Inc., Fort
Worth, Texas ("TAB"). Applicant proposes to immediately enter into a management agreement with the
FDIC that provides that Applicant will operate Bank,
with general discretion over, and responsibility for,
the daily operations of Bank. Applicant also proposes
to acquire all of the assets and liabilities of Bank
through a purchase and assumption transaction.
On July 20,1989, the 24 bank subsidiaries of TAB were
declared insolvent and the FDIC was appointed receiver.1
Pursuant to section 1 l(i) of the Federal Deposit Insurance
Act ("FDI Act") as amended by the Competitive Equality Banking Act of 1987 (12 U.S.C. § 1821(i)), the FDIC
established Bank to acquire the assets and to assume the
liabilities and deposits of the closed banks. The FDIC
solicited offers for the acquisition of Bank from qualified
bidders pursuant to sections ll(i) and 13(f) of the FDI Act
(12 U.S.C. §§ 1821(i) and 1823(f)). On July 20, 1989, the
FDIC selected Applicant's bid for Bank. On the same
day, the FDIC advised that Applicant had been selected
as the winning bidder, and recommended immediate action on this application in order to permit Bank to operate
without the need for liquidation. The OCC has also
recommended approval of the transaction.
In view of this situation and the need for expeditious
action to protect the interest of Bank's depositors, it
has been determined, pursuant to section 3(b) of the
BHC Act (12 U.S.C. § 1842(b)), section 225.14(h) of
the Board's Regulation Y (12 C.F.R. 225.14(h)), and
section 262.3(1) of the Board's Rules of Procedure
(12 C.F.R. 262.3(1)), to dispense with the notice provisions of the BHC Act.
In evaluating an application under section 3 of the
BHC Act, the Board is required to consider the
financial and managerial resources and future prospects of the companies involved, the effect of the
proposal on competition, and the convenience and
needs of the communities to be served. Under the
proposal, Applicant would immediately provide Bank
with new management officials, with proven management capability, and Bank would continue to provide a
full range of services to its customers. The agreement
in principle between Applicant and the FDIC will also
recapitalize Bank. With respect to the financial factors, the Board has relied upon Applicant's commitment to maintain adequate capital for the resulting
1. See Appendix.
641
organization. As proposed by Applicant, this commitment will be satisfied through the issuance of a significant amount of equity capital and other capital instruments.
Based on these and all of the other facts of record,
including the bid proposal made by Applicant and
accepted by the FDIC, the financial and managerial
resources and future prospects of Applicant, its subsidiaries and Bank are consistent with approval of this
application. The benefits to the convenience and needs
of the communities in Texas of maintaining Bank as a
viable competitor in Texas weigh in favor of approval
of this application.
Applicant competes with Bank in the Dallas and
Houston markets. 2 Applicant is the seventh largest of
154 commercial banking organizations in the Dallas
market, with deposits of $470 million, controlling 1.7
percent of total deposits in the market. 3 Bank is the
fifth largest commercial banking organization in the
Dallas market, with deposits of $1,079 billion, controlling 3.9 percent of total deposits in commercial banks
in the market. Upon consummation, Applicant would
be the fifth largest commercial banking organization in
the market, controlling $1,549 billion in deposits, or
5.6 percent of market deposits. The Dallas market is
considered moderately concentrated, with a Herfindahl-Hirschman Index ("HHI") of 1000, which would
increase by 13 points to 1013 upon consummation of
the proposal. 4
Applicant is the sixteenth largest of 147 commercial
banking organizations in the Houston market, with
deposits of $158 million, controlling 0.7 percent of
total deposits in the market. Bank is the sixth largest
commercial banking organization in the Houston market, with deposits of $455 million, controlling 1.6
2. The Dallas banking market is approximated by Dallas County,
the southeast quadrant of Denton County (including Denton and
Lewisville), the southwest quadrant of Collin County (including
McKinney and Piano), the northern half of Rockwall County, the
communities of Forney and Terrell in Kaufman County, Midlothian,
Waxahachie, and Ferris in Ellis County, and Grapevine and Arlington
in Tarrant County.
The Houston banking market is approximated by the Houston
Ranally Metro Area.
3. Market deposit data are as of June 30, 1988.
4. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (June 29, 1984)), a market in which the
post-merger HHI is between 1000 and 1800 is considered moderately
concentrated. In such markets, the Department of Justice is unlikely
to challenge a merger or acquisition resulting in an HHI between 1000
and 1800 if the increase in the HHI is less than 100 points. The
Department of Justice has informed the Board that a bank merger or
acquisition generally will not be challenged (in the absence of other
factors indicating anticompetitive effects) unless the post-merger HHI
is at least 1800 and the merger increases the HHI by at least 200
points. The Department of Justice has stated that the higher than
normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognizes the competitive effect of limited
purpose lenders and other non-depository financial entities.
642
Federal Reserve Bulletin • September 1989
percent of total deposits in commercial banks in the
market. Upon consummation, Applicant would be the
sixth largest commercial banking organization in the
market, controlling $613 million in deposits, or 2.3
percent of market deposits. The Houston market is
considered moderately concentrated, with an HHI of
1100, which would increase by 2 points to 1102 upon
consummation of the proposal.
On the basis of the foregoing, the Board concludes
that consummation of the proposal would not have a
substantial adverse competitive effect in the Dallas or
Houston banking markets, or in any other relevant
banking market. The Board also concludes that consummation of the proposal would not have a significant adverse effect on probable future competition in
any relevant banking market.
Based on the foregoing and all of the facts of record, the
General Counsel and the Staff Director of the Division of
Banking Supervision and Regulation have determined,
acting pursuant to authority specifically delegated by the
Board in this case, that the application under section 3 of
the BHC Act should be, and hereby is, approved. This
action is limited to approval of the transaction according
to the terms and conditions of Applicant's bid as presented to the Board, and any significant change in those
terms or conditions may require further review by the
Board.
The FDIC has informed the Board that immediate
action on Applicant's proposal is necessary in order to
permit Bank to open and operate as a viable competitor
that will continue to serve its communities. In light of
these and all the facts of record in this case, the General
Counsel and the Staff Director of the Division of Banking
Supervision and Regulation, acting pursuant to authority
delegated by the Board, have determined, in accordance
with section 11(b) of the BHC Act, that Applicant may
immediately acquire control of Bank through the management agreement with the FDIC, and that Applicant may
consummate its proposed investment in Bank on or after
the fifth calendar day following the effective date of this
Order. The transaction shall not be consummated later
than three months after the effective date of this Order,
unless the period for consummation is extended for good
cause by the Board or the Federal Reserve Bank of Dallas
under delegated authority.
By order, approved pursuant to authority delegated
by the Board, effective July 21, 1989.
J. VIRGIL MATTINGLY, JR.
General
Counsel
WILLIAM TAYLOR
Staff Director
Division of Banking
Supervision and Regulation
Appendix
The bridge bank has acquired the assets and assumed
the liabilities and deposits of the following bank subsidiaries of Texas American Bancshares, Inc.:
Texas American Bank/Amarillo, N . A . , Amarillo,
Texas; Texas American Bank/Austin, N . A . , Austin,
Texas; Texas American Bank/Breckenridge, N.A.,
Breckenridge, Texas; Texas American Bank/Dallas,
N.A., Dallas, Texas; Texas American Bank/Denison,
N . A . , Denison, Texas; Texas American Bank/Duncanville, N.A., Duncanville, Texas; Texas American
Bank/Farmers Branch, N . A . , Farmers Branch, Texas;
Texas American Bank/Fort Worth, N . A . , Fort Worth,
Texas; Texas American Bank/Forum, N . A . , Arlington, Texas; Texas American Bank/Fredericksburg,
N.A., Fredericksburg, Texas; Texas American Bank/
Galleria, N.A., Houston, Texas; Texas American
Bank/Greater Southwest, Grand Prairie, Texas; Texas
American Bank/LBJ, N . A . , Dallas, Texas; Texas
American Bank/Levelland, Levelland, Texas; Texas
American Bank/Longview, N . A . , Longview, Texas;
Texas American Bank/McKinney, N . A . , McKinney,
Texas; Texas American Bank/Midland, N . A . , Midland, Texas; Texas American Bank/Piano, N . A . , Piano, Texas; Texas American Bank/Prestonwood,
N.A., Dallas, Texas; Texas American Bank/Richardson, N . A . , Richardson, Texas; Texas American Bank/
Southwest, N . A . , Stafford, Texas; Texas American
Bank/Temple, N . A . , Temple, Texas; Texas American
Bank/Tyler, N . A . , Tyler, Texas; Texas American
Bank/Wichita Falls, N . A . , Wichita Falls, Texas.
Orders Issued Under Section 4 of the
Bank Holding Company Act
Dresdner Bank AG
Frankfurt, Federal Republic of Germany
Order Approving Acquisition of a Limited
Partnership Interest in Investment
Adviser
Dresdner Bank AG, Frankfurt, Federal Republic of
Germany ("Dresdner"), a foreign bank subject to
certain provisions of the Bank Holding Company Act
("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 225.23 of the Board's Regulation Y (12 C.F.R. 225.23), to acquire indirectly
through its subsidiary, Dresdner Asset Management
(U.S.A.) Corporation, Boston, Massachusetts ("Dres-
Legal Developments
dner U.S.A."), a limited partnership interest of 49
percent in Oechsle International Advisors L.P., Boston, Massachusetts ("Oechsle"), a registered investment adviser. 1 Substantially all of the remaining interest in Oechsle would be held by the Oechsle Group,
L.P., Boston, Massachusetts ("Oechsle Group").
Oechsle will engage in the following activities that
the Board has determined to be closely related to
banking and permissible for bank holding companies in
Regulation Y:
(1) providing portfolio investment advice and investment management services to institutions and individuals pursuant to 12 C.F.R. 225.25(b)(4)(iii);2 and
(2) serving as investment adviser to investment
companies, including sponsoring, organizing and
managing closed-end investment companies pursuant to 12 C.F.R. 225.25(b)(4)(ii).
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (54 Federal Register 25,173 (1989)).
The time for filing comments has expired, and the
Board has considered the application and all comments received in light of the public interest factors set
forth in section 4(c)(8) of the BHC Act.
Dresdner, with total assets equivalent to approximately $129 billion, is the 26th largest banking organization in the world and the second largest banking
organization in the Federal Republic of Germany 3 . In
the United States, Dresdner maintains state-licensed
branches in New York and Chicago and a statelicensed agency in Los Angeles. 4 Accordingly, Dresdner is subject to the nonbankirig restrictions of section 4 of the BHC Act as if it were a domestic bank
holding company.
Dresdner also engages in activities in the United
States through subsidiaries, described below, that are
permissible under section 8(c) of the International
Banking Act ("IB A"). Section 8(c) of the IB A permits
a foreign bank such as Dresdner to continue to engage
in any nonbanking activities in which it was engaged
on July 26, 1978. This authority is subject to review by
the Board, which may, after opportunity for a hearing,
1. Dresdner U.S.A. will initially acquire a 49 percent limited
partnership interest in the profits and capital of Oechsle with an option
to acquire an additional limited partnership interest up to 51 percent
after the first anniversary of the closing date and all of the outstanding
limited partnership interests under certain conditions after the fifth
anniversary. Dresdner U.S.A. will also select three members of
Oechsle's five-member Advisory Committee.
2. Oechsle intends to provide investment management services for
tax-exempt institutional investors with respect to investments in U.S.
and non-U.S. fixed income securities, and investment management
services to high net-worth individuals.
3. Data are as of December 31, 1988.
4. Dresdner's wholly owned subsidiary, Deutsch-Suedamerikanische Bank AG maintains a state-licensed agency in Miama, Florida.
643
require termination of any grandfathered activity if
necessary to prevent adverse effects.
Dresdner currently engages in investment advisory
and management activities in the United States
through its U.S. subsidiary, A B D Securities Corporation ("ABD Securities"), and A B D Securities' wholly
owned U.S. subsidiary, ABD International Management Corporation ("ABD International"), pursuant to
section 8(c) of the IBA. 5 ABD Securities is a registered
broker-dealer that directly and through subsidiaries
engages in a broad range of securities activities not
permitted to U.S. bank holding companies, including
acting as a floor broker and specialist on the N e w York
Stock Exchange. ABD International, however, is a
registered investment adviser that engages solely in
permissible investment advisory and management activities.
Oechsle is a registered investment adviser and provides investment advice and management services to
pension plans and tax-exempt institutional investors,
principally university endowments. The acquisition of
the proposed limited partnership interest in Oechsle
would permit Dresdner to expand its investment advisory activities in the United States. Section 8(c) does
not authorize the expansion of a grandfathered nonbanking activity through the acquisition of a going
concern and, under these circumstances, an application is required. Accordingly, Dresdner has applied for
the Board's approval of the proposed acquisition under section 4(c)(8) and Regulation Y.
In applications under section 4(c)(8) of the BHC
Act, the Board also evaluates the financial resources
of the applicant, including its subsidiaries, and the
effects of the proposed transaction on those
resources. 6 In accordance with the principles of national treatment and competitive equality, the Board
has stated it expects a foreign bank to meet the same
general standards of financial strength as domestic
bank holding companies and to be able to serve as a
source of strength to its United States banking
operations. 7 The Board has noted in considering ap5. Dresdner and Bayerische Hypotheken-und Wechsel-Bank AG
own 75 percent and 25 percent, respectively, of the voting shares of
ABD Securities.
6. 12 C.F.R. 225.24; Bayerische Vereinsbank AG, 73 FEDERAL
RESERVE BULLETIN 1 5 5 , 1 5 6 ( 1 9 8 7 ) .
7. The Fuji Bank Limited, 75 FEDERAL RESERVE BULLETIN, 94, 96
(1989); Bayerische Vereinsbank AG, 73 FEDERAL RESERVE BULLETIN
155, 156 (1987); Toyo Trust and Banking Co., Ltd., 74 FEDERAL
RESERVE BULLETIN 623 (1988); Taiyo Kobe Bank, Ltd.,
74 FEDERAL
RESERVE BULLETIN 621 (1988); The Long-Term Credit Bank of Japan,
Limited,
74 FEDERAL RESERVE BULLETIN 573 (1988); The Sanwa
Bank Limited, 74 FEDERAL RESERVE BULLETIN 578 (1988); Sumitomo
Trust & Banking Co., Ltd., 73 FEDERAL RESERVE BULLETIN 749
(1987); Ljubljanska Banka-Associated Bank, 72 FEDERAL RESERVE
BULLETIN 489 (1986); The Mitsubishi Trust and Banking Corporation,
72 FEDERAL RESERVE BULLETIN 256 (1986); The Industrial Bank of
Japan, Ltd., 72 FEDERAL RESERVE BULLETIN 71 (1986); The Mitsub-
644
Federal Reserve Bulletin • September 1989
plications of foreign banking organizations that foreign
banks operate outside the United States in accordance
with different regulatory and supervisory requirements, accounting principles, asset-quality standards,
and banking practices and traditions, and that these
differences make it difficult to compare the capital
positions of domestic and foreign banks. In the past,
the Board has addressed the complex issues involved
in balancing these concerns in the context of individual
applications on a case-by-case basis, making adjustments as appropriate to an applicant's capital to reflect
differences in accounting treatment and regulatory
practices.
The Board recently has adopted a proposal to supplement its consideration of capital adequacy with a
risk-based system that is simultaneously being proposed by the member countries of the Basle Committee on Banking Regulations and Supervisory Practices
and the other domestic federal banking agencies. 8 The
Board considers the Basle Committee proposal an
important step toward a more consistent and equitable
international norm for assessing capital adequacy.
Until that framework becomes effective, however, the
Board will continue to evaluate applications involving
foreign banking organizations on a case-by-case basis
consistent with its prior precedent.
In this case, the primary capital ratio of Dresdner, as
publicly reported, is below the 5.5 percent minimum
level specified in the Board's Capital Adequacy Guidelines. After making adjustments to reflect German
banking and accounting practices, as well as consideration of other information relating to Dresdner's overall financial condition, Dresdner's capital ratio meets
U.S. standards. The Board also considered several
additional factors that mitigate its concerns in this
case. The Board notes that the application involves
nonbanking activities that generate fee income and
that require a small commitment of capital. The Board
also notes that nearly one quarter of Dresdner's consolidated assets are mortgage loans funded by mortgage-backed bonds, and that approximately 50 percent
of those loans are either made directly to state and
local governments of the Federal Republic of Germany
or backed by these public bodies. In light of all the
facts of record, the Board has determined that financial factors are consistent with approval of the application.
To approve the application, the Board must find that
Dresdner's performance of the activities in question
"can reasonably be expected to produce benefits to
the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of
resources, decreased or unfair competition, conflicts
of interest, or unsound banking practices." 12 U.S.C.
§ 1843(c)(8). In evaluating those factors, the Board
considered that Dresdner, through ABD Securities,
engages in securities activities in the United States
that are not permissible for U.S. bank holding companies. As a result, Dresdner could conceivably gain an
unfair competitive advantage over domestic bank
holding companies by combining grandfathered securities activities with activities permissible under section 4(c)(8). That would occur if the grandfathered
activities were used to support or enhance the section
4(c)(8) activities, thus allowing Dresdner to offer a
wide array of services not permissible for domestic
bank holding companies.
To address the possible adverse effects of Dresdner's proposed acquisition of an interest in Oechsle,
Dresdner has made a series of commitments which are
consistent with those made in connection with prior
Board decisions in this area. 9 These commitments
require a complete separation between the operations
of ABD Securities and its affiliates and Oechsle in
order to address these concerns. In light of these
commitments, as well as applicable legal restrictions
under federal securities registration laws, the Board
believes that Dresdner would not have an unfair
competitive advantage in conducting the activities in
question under section 4(c)(8), and that those activities
would not give rise to conflicts of interest.
In prior decisions, the Board has expressed concern that joint ventures could potentially lead to a
matrix of relationships between co-ventures that
could break down the legally mandated separation of
banking and commerce, create the possibility of
conflicts of interest and other adverse effects that the
BHC Act was designed to prevent, or impair or give
the appearance of impairing the ability of the banking
organization to function effectively as an independent and impartial provider of credit. 10 Further, joint
ventures must be carefully analyzed for any possible
adverse effects on competition and on the financial
condition of the banking organization involved in the
proposal.
9. Bayerische Vereinsbank AG, supra; Credit Suisse, 73 FEDERAL
RESERVE B U L L E T I N 1 6 0 ( 1 9 8 7 ) .
is hi Bank
Limited,
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
1 4 - 8 3 5 (1979).
8. 54 Federal Register 4186 (1989).
10. See, e.g.,
The Fuji Bank Limited,
BULLETIN 577; The Fuji Bank Limited,
75 FEDERAL RESERVE
75 FEDERAL RESERVE BUL-
LETIN 94, 95 (1989); Independent Bankers Financial Corporation, 72
F E D E R A L RESERVE B U L L E T I N 6 6 4 ( 1 9 8 6 ) ; a n d
Bank,
N.V.,
Amsterdam-Rotterdam
7 0 F E D E R A L RESERVE B U L L E T I N 8 3 5 ( 1 9 8 4 ) .
Legal Developments
Oechsle Group has stated that it engages only in
activities that are permissible for a bank holding
company. Furthermore, Dresdner has committed to
notify the Board in the event the Oechsle Group
determines to engage in any securities business that
is impermissible for a state member bank under the
G l a s s - Steagall Act, and to seek Board approval of
Dresdner's retention of its interest in Oechsle should
the Oechsle Group's securities activities be inconsistent with the Board's Order approving this application.
The Board has also considered whether other
adverse effects on competition may result from the
proposal and notes that, although Oechsle engages in
activities that are also provided by A B D Securities
and A B D International, there are numerous competitors for these services and Dresdner's proposal
would have a de minimis effect on existing competition.
Moreover, Dresdner's proposal can be expected to result in
some increase in competition due to the financial support
provided by Dresdner, thus enabling Oechsle to become a
strong competitor.
In light of the facts of record and the commitments
offered by Dresdner to enhance the separation of
Oechsle from its grandfathered securities affiliates,
the Board finds that the proposal would not result in
conflicts of interest or decreased or unfair competition. There is also no evidence in the record that
Dresdner's proposal would result in any undue concentration of resources, unsound banking practices
or other adverse effects.
Based on the foregoing and other facts of record,
including Dresdner's commitments, the Board has
determined that the balance of public interest factors
that it must consider under section 4(c)(8) of the
BHC Act is favorable. Accordingly, the Board has
determined that the application should be, and
hereby is, approved. This determination is further
subject to all of the conditions set forth in the
Board's Regulation Y , including sections 225.4(d)
and 225.23(b), and to the Board's authority to require
such modification or termination of the activities of a
bank holding company or any of its subsidiaries as
the Board finds necessary to assure compliance with
the provisions and purposes of the B H C Act and the
Board's regulations and orders issued thereunder, or
to prevent evasion thereof.
This transaction shall not be consummated later
than three months after the effective date of this
Order, unless such period is extended for good
cause by the Board or by the Federal Reserve
Bank of N e w York, pursuant to delegated
authority.
By order of the Board of Governors, effective
July 31, 1989.
645
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Kelley. Absent and not voting:
Governors Heller and LaWare.
JENNIFER J. JOHNSON
Associate
Secretary
of the
Board
First Union Corporation
Charlotte, North Carolina
Order Approving Application to Engage in
Underwriting and Dealing in Certain Securities to a
Limited Extent and in Other Securities
Related
Activities
First Union Corporation, Charlotte, North Carolina
("First Union"), a bank holding company within the
meaning of the Bank Holding Company Act ( " B H C
Act"), has applied for the Board's approval under
section 4(c)(8) of the B H C Act (12 U . S . C .
§ 1843(c)(8)) and section 225.23 of the Board's Regulation Y (12 C.F.R. 225.23) for its subsidiary, First
Union Securities, Incorporated, Charlotte, North
Carolina ("Company"), to engage to a limited extent
in underwriting and dealing in:
(1) municipal revenue bonds, including certain industrial development bonds;
(2) 1 - 4 family mortgage-related securities;
(3) commercial paper; and
(4) consumer-receivable-related securities ("CRRs")
(collectively "ineligible securities").
First Union also proposes to underwrite and deal in
securities that state member banks are permitted 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 "bank-eligible
securities"), as permitted by section 225.25(b)(16) of
the Board's Regulation Y (12 C.F.R. 225.25(b)(16)).
In addition, First Union proposes to provide investment advisory and brokerage activities separately and
on a combined basis subject to conditions established
by the Board. 1
First Union also has applied to engage in the following activities:
(1) investment advisory and brokerage activities
separately and on a combined basis to institutional
and retail customers;
(2) foreign exchange advisory activities;
(3) futures commission merchant activities;
(4) the purchase and sale of silver and gold for the
account of customers; and
(5) financial advisory services.
1. See, 12 C.F.R. 225(b)(4) and (b)(15); Bank of New
England
Corporation,
74 FEDERAL RESERVE BULLETIN 700 (1988); and
Financial Corp, 75 FEDERAL RESERVE BULLETIN 396 (1989).
PNC
646
Federal Reserve Bulletin • September 1989
The Board has previously determined that these
activities are permissible for bank holding companies. 2
Applicant has committed to conduct these activities
subject to the particular limits imposed by the Board in
previous cases.
First Union, with approximately $29.5 billion in
assets, is the third largest commercial banking organization in North Carolina. 3 It operates five subsidiary
banks and engages directly and through subsidiaries 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 (54 Federal Register 24,038
(1989)). The time for filing comments has expired, and
the Board has considered the application and all
comments received in light of the public interest
factors set forth in section 4(c)(8) of the BHC Act.
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 are so closely related to banking as to be a proper
incident thereto within the meaning of section 4(c)(8)
of the BHC Act. First Union has committed to conduct its ineligible underwriting and dealing activities
subject to the 5 percent revenue test and the prudential
limitations established by the Board in its previous
Orders. 5
Full-Service Brokerage Activities
The Board has previously determined that the conduct
of the proposed ineligible securities underwriting and
dealing activity is consistent with section 20 of the
Glass-Steagall Act (12 U.S.C. § 377), provided the
underwriting subsidiary derives no more than 5 percent of its total gross revenue from underwriting and
dealing in the approved securities over any two-year
period. 4 The Board further found that, subject to the
The Board has previously determined that full-service
securities brokerage for both institutional and retail
customers is closely related to banking, and a proper
incident to banking under section 4(c)(8) of the BHC
Act, and does not violate the Glass-Steagall Act. 6
Under this proposal, Company would provide fullservice brokerage to retail customers with respect to
ineligible securities that Company may hold as principal in connection with its authorized underwriting and
dealing activities. In connection with this activity,
First Union has made commitments regarding disclosure that have been approved by the Board in two
previous Orders. 7
Specifically, First Union has committed to provide
full and appropriate disclosure of its interest in any
transaction, as required by securities laws and fidu-
2. See, 12 C.F.R. 225.25(b)(4) (investment or financial advice),
(b)(15) (securities brokerage), (b)(17) (foreign exchange advisory and
transactional services), (b)(18) (futures commission merchant), and
(b)(19) (investment advice on financial futures and options on futures);
5 percent gross revenue limit set forth in Citicorp!Morgan!Bankers
Trust.
This 5 percent gross revenue limit should be calculated in accordance with the method stated in J.P. Morgan & Co. Incorporated,
Bank of New England Corporation,
74 FEDERAL RESERVE BULLETIN
700 (1988) and PNC Financial Corp, 75 FEDERAL RESERVE BULLETIN
et al.,
Underwriting and Dealing in Ineligible
Securities
396 (1989) (full-service brokerage to institutional and retail customers); United Virginia Bankshares, Inc., 73 FEDERAL RESERVE BULLETIN 309 (1987) (purchase and sale of silver and gold for the account
of customers); and Signet Banking Corporation, 73 FEDERAL RESERVE BULLETIN 59 (1987) and Canadian Imperial Bank of Commerce, 74 FEDERAL RESERVE BULLETIN 571 (1988) (financial advisory
services).
3. Asset data are as of March 31, 1989. Ranking, based on deposits,
is as of December 31, 1988.
4. Citicorp, J.P. Morgan & Co. Incorporated and Bankers Trust
New
York Corporation,
73 FEDERAL RESERVE BULLETIN 473 (1987)
("Citicorp/Morgan!Bankers Trust"), ajf dsub nom., Securities Industry Association v. Board of Governors of the Federal Reserve System,
839 F.2d 47 (2d Cir. 1988), cert, denied, 108 S. Ct. 2830 (1988) ("S/A
v. Board"); and 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 (1987)
("Chemical").
Company may also provide services that are necessary incidents to
these approved activities. Any activity conducted as a necessary
incident to the ineligible securities activity must be treated as part of
the ineligible securities activity unless Company has received specific
approval under section 4(c)(8) of the BHC Act to conduct the activity
independently. Until such approval is obtained, any revenues from the
incidental activity must be counted as ineligible revenue subject to the
7 5 F E D E R A L RESERVE B U L L E T I N 1 9 2 ( 1 9 8 9 ) .
5. First Union has not proposed a market share limitation. Accordingly, and in light of the decision in SI A v. Board, the Board has
determined not to require First Union to comply with a market share
limitation.
The industrial development bonds approved for First Union 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 and deal in only these types of industrial
development bonds.
The Board's approval of the proposed underwriting and dealing
activities extends only to Company. The activities may not be
conducted by First Union in any other subsidiary without prior Board
review. Pursuant to Regulation Y, no corporate reorganization of
Company, such as the establishment of subsidiaries of Company to
conduct the activities, may be consummated without prior Board
approval.
6. Bank of New England Corporation, 74 FEDERAL RESERVE
BULLETIN 700 (1988); Bankers Trust New York Corporation, 14
FEDERAL RESERVE BULLETIN 695 (1988); and PNC
Financial
Corp,
7 5 F E D E R A L RESERVE B U L L E T I N 3 % ( 1 9 8 9 ) .
7. PNC
Financial
Corp,
75 FEDERAL RESERVE BULLETIN at 3 9 7 -
398; Bankers Trust New York Corporation,
BULLETIN at 6 9 6 - 6 9 8 .
74 FEDERAL RESERVE
Legal Developments
ciary principles. Company will inform each brokerage/
advisory customer at the commencement of the customer relationship that, as a general matter, Company
might be a principal, or might be engaged in an
underwriting, with respect to, or might purchase from
an affiliate, those securities for which brokerage/advisory services are being provided. At the time a brokerage order is being taken, the customer will be informed
whether Company is acting as agent or as principal
with respect to the security. Confirmations sent to
customers also will state whether Company is acting
as agent or principal.
Moreover, Company will conduct its brokerage and
advisory activities within the same framework approved by the Board in Bank of New England Corporation. Thus, First Union has committed that, before
providing any brokerage or advisory services to retail
customers, Company will prominently disclose in writing to each such customer that Company is not a bank
and is separate from any affiliated bank, and that the
securities sold, offered, or recommended by Company
are not deposits, are not insured by the Federal
Deposit Insurance Corporation, are not guaranteed by
an affiliated bank, and are not otherwise an obligation
of an affiliated bank, unless such is in fact the case. 8
Consummation of the proposal would provide added
convenience to First Union's customers. In addition,
the Board expects that the de novo entry of First
Union into the market for these services would increase the level of competition among providers of
these services. With regard to each of the proposed
activities, First Union has committed to adhere to
limitations the Board previously has found adequate to
address the possibility of any adverse effects arising
from such activities. Accordingly, based upon the
facts of record and the commitments made by First
Union regarding the conduct of these activities the
Board has determined that the performance of the
proposed activities by First Union can reasonably be
expected to produce public benefits which would
outweigh adverse effects under the proper incident to
banking standard of section 4(c)(8) of the BHC Act.
Based on the foregoing, the Board has determined
to, and hereby does, approve the application subject to
all the terms and conditions established by the Board
in the above mentioned regulations and orders, except
the market share limitation.
8. Moreover, First Union proposes to exercise discretionary portfolio management for institutional customers only, subject to the same
limitations of the Board's J.P. Morgan & Co. Inc. Order, 73 FEDERAL
RESERVE BULLETIN 810 (1987). Investment advice would be provided
on an integrated basis, i.e., Company would not charge an explicit fee
for the investment advice and would receive fees only for transactions
executed for customers.
647
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 B H C Act and the
Board's regulations and orders issued thereunder.
This transaction shall not be consummated later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of
Richmond, pursuant to delegated authority.
By order of the Board of Governors, effective
July 31, 1989.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Kelley. Absent and not voting:
Governors Heller and LaWare.
JENNIFER J. JOHNSON
Associate
Secretary
of the
Board
SouthTrust Corporation
Birmingham, Alabama
Order Approving Application to Underwrite and
Deal in Certain Securities, to Offer Full-Service
Brokerage Services, and to Engage in Commercial
Paper
Placement
SouthTrust Corporation,
Birmingham,
Alabama
("SouthTrust"), a bank holding company within the
meaning of the Bank Holding Company Act ( " B H C
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 225.23 of the Board's Regulation Y (12 C.F.R. 225.23), for its subsidiary, SouthTrust Securities, Incorporated, Birmingham, Alabama
("Company"), to engage to a limited extent in underwriting and dealing in:
(1) municipal revenue bonds, including certain industrial development bonds;
(2) 1 - 4 family mortgage-related securities;
(3) commercial paper; and
(4) consumer-receivable-related securities (collectively referred to as "ineligible securities").
SouthTrust also proposes to underwrite and deal in
securities that state member banks are permitted to
underwrite and deal in under section 16 of the Banking
Act of 1933 (the "Glass-Steagall Act") (12 U . S . C .
§ § 2 4 Seventh and 335) (hereinafter "eligible securi-
648
Federal Reserve Bulletin • September 1989
ties"), as permitted by section 225.25(b)(16) of Regulation Y (12 C.F.R. 225.25(b)(16)).
In addition to underwriting and dealing in eligible
and ineligible securities, SouthTrust proposes to offer
securities brokerage and investment advice on a combined basis ("full-service brokerage") to institutional
and retail customers. SouthTrust also has applied to
act as agent and advisor in connection with the placement of commercial paper with institutional investors.
SouthTrust, with approximately $6.8 billion in consolidated assets, is the second largest commercial
banking organization in Alabama. 1 It operates 40 subsidiary banks and engages directly and through subsidiaries 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 (54 Federal Register 23,267
(1989)). The time for filing comments has expired, and
the Board has considered the application and all
comments received in light of the public interest
factors set forth in section 4(c)(8) of the BHC Act.
Underwriting and Dealing in Ineligible
Securities.
The Board has previously determined that the conduct
of the proposed ineligible securities underwriting and
dealing is consistent with section 20 of the GlassSteagall Act, provided the underwriting subsidiary
derives no more than 5 percent of its total gross
revenue from underwriting and dealing in ineligible
securities over any two-year period. 2 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. SouthTrust
has committed to conduct its ineligible securities underwriting and dealing activities subject to the 5 percent revenue test and the prudential limitations established by the Board in its previous Orders. 3
1. Asset data and ranking are as of March 31, 1989.
2. See Citicorp, J.P. Morgan & Co. Incorporated, and Bankers
Trust New
York Corporation,
73 FEDERAL RESERVE BULLETIN 473
(1987) ("Citicorp/Morgan/Bankers
Trust"), ajf d sub nom., Securities
Industry Association v. Board of Governors of the Federal Reserve
System,
839 F.2d 47 (2d Cir. 1988), cert, denied,
108 S. Ct. 2830 (1988)
("SM v. Board"); and Chemical New York Corporation, The Chase
Manhattan Corporation, Bankers Trust New York Corporation, Citicorp, Manufacturers Hanover Corporation, and Security Pacific
Corporation,
7 3 FEDERAL RESERVE B U L L E T I N 7 3 1 ( 1 9 8 7 ) ( " C h e m i -
cal").
3. SouthTrust has not proposed a market share limitation and, in
light of the decision in SIA v. Board, the Board has determined not to
require SouthTrust to comply with a market share limitation.
Company may also provide services that are necessary incidents to
these approved activities. Any activity conducted as a necessary
incident to the ineligible securities underwriting and dealing activity
Full-Service Brokerage Activities. The Board has
previously determined that full-service securities brokerage for both institutional and retail customers is
closely related and a proper incident to banking under
section 4(c)(8) of the BHC Act, and does not violate
the Glass-Steagall Act. Bank of New England Corporation,
74
FEDERAL
RESERVE
BULLETIN
700
(1988) ("Bank of New England").4 Under this proposal, Company will provide full-service brokerage to
retail customers with respect to ineligible securities
that Company may hold as principal in connection
with its authorized underwriting and dealing activities.
SouthTrust has made commitments regarding disclosure that have been approved by the Board previously
with regard to such activity. 5
Specifically, SouthTrust has committed to provide
full and appropriate disclosure of its interest in any
transaction, as required by securities laws, the National Association of Securities Dealers and fiduciary
principles. Company will inform each brokerage/advisory customer at the commencement of the customer relationship that, as a general matter, Company
might be a principal, or might be engaged in an
underwriting, with respect to, or might purchase from
an affiliate, those securities for which brokerage/advisory services are being provided. At the time a brokerage order is being taken, the customer will be informed
whether Company is acting as agent or as principal
with respect to the security. Confirmations sent to
customers also will state whether Company is acting
as agent or principal.
must be treated as part of the ineligible securities activity unless
Company has received specific approval under section 4(c)(8) of the
BHC Act to conduct the activity independently. Until such approval
is obtained, any revenues from the incidental activity must be counted
as ineligible revenue subject to the 5 percent gross revenue limit set
forth in Citicorp/Morgan/Bankers
Trust.
This 5 percent gross revenue limit should be calculated in accordance with the method stated in J.P. Morgan & Co. Incorporated,
et al.,
7 5 F E D E R A L RESERVE B U L L E T I N 1 9 2 ( 1 9 8 9 ) .
The industrial development bonds approved for SouthTrust 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.
The Board's approval of the proposed underwriting and dealing
activities extends only to Company. The activities may not be
conducted by SouthTrust in any other subsidiary without prior Board
review. Pursuant to Regulation Y, no corporate reorganization of
Company, such as the establishment of subsidiaries of Company to
conduct the activities, may be consummated without prior Board
approval.
4. See also National Westminster Bank PLC, et al., 72 FEDERAL
RESERVE BULLETIN 584 (1986), ajfd sub nom., Securities Industry
Ass'n v. Board of Governors of the Federal Reserve System, 821 F.2d
810 (D.C. Cir. 1987), cert, denied, 108 S.Ct. 697 (1988).
5. PNC
Financial
397-398 (1986).
Corp,
75 FEDERAL RESERVE BULLETIN at 396,
Legal Developments
Moreover, Company will conduct its brokerage and
advisory activities within the same framework approved by the Board in Bank of New England. Thus,
Company has committed that, before providing any
brokerage or advisory services to retail customers,
Company will prominently disclose in writing to each
such customer that Company is not a bank and is
separate from any affiliated bank, and that the securities sold, offered, or recommended by Company are
not deposits, are not insured by the Federal Deposit
Insurance Corporation, are not guaranteed by an affiliated bank, and are not otherwise an obligation of an
affiliated bank, unless such is in fact the case. 6 In
addition, no officer, director or employee of Company
will serve as an officer, director or employee of any
affiliated bank.
Private Placement of Commercial Paper. The Board
has previously determined that commercial paper placement is closely related to banking. See, e.g., The Bank of
Montreal,
7 4 FEDERAL RESERVE BULLETIN 5 0 0 (1988).
SouthTrust has proposed to place commercial paper in
accordance with all of the terms and conditions of the
Board's Order in The Bank of Montreal.1
Consummation of the proposal would provide added
convenience to SouthTrust's customers. In addition, the
Board expects that the de novo entry of SouthTrust into
the market for these services would increase the level of
competition among providers of these services. With
regard to each of the proposed activities, SouthTrust has
committed to adhere to limitations the Board previously
has found adequate to address the possibility of any
adverse effects arising from such activities. Accordingly,
the Board has determined that the performance of the
proposed activities by SouthTrust can reasonably be
expected to produce public benefits that would outweigh
adverse effects under the proper incident to banking
standard of section 4(c)(8) of the BHC Act.
Based on the foregoing, the Board has determined to
approve the proposed activities subject to all of the
terms and conditions established in the Citicorp/Mor-
6. As an incident to the proposed brokerage activities, SouthTrust
proposes to offer, through Company, custodial services, cash management services, margin lending, maintenance of customer accounts,
and sweep arrangements, previously approved by the Board. BankAmerica
Corporation/Schwab,
69 FEDERAL RESERVE BULLETIN 105,
108-109 (1983).
Moreover, SouthTrust proposes to exercise discretionary portfolio
management for institutional customers who desire such services, but
only within defined parameters and at the customer's request. SouthTrust does not intend to market this service. Investment advice would
be provided on an integrated basis; Company would not charge an
explicit fee for the investment advice and would receive fees only for
transactions executed for customers. See J.P. Morgan & Co. Incorporated,
7 3 F E D E R A L RESERVE B U L L E T I N 8 1 0 ( 1 9 8 7 ) .
7. SouthTrust has not proposed any quantitative limitations on its
placement activity, in accordance with the Board's determination in
The Bank of Montreal that quantitative limitations are not necessary
to ensure compliance with the Glass-Steagall Act.
649
gan/Bankers Trust, Chemical, PNC Financial
Corp,
and The Bank of Montreal Orders.
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 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 Atlanta,
pursuant to delegated authority.
By order of the Board of Governors, effective
July 10, 1989.
Voting for this action: Chairman Greenspan and Governors
Seger, Angell, and Kelley. Absent and not voting: Governors
Johnson, Heller, and LaWare.
JENNIFER J. JOHNSON
Associate
Secretary
of the
Board
Orders Issued Under Sections 3 and 4 of the
Bank Holding Company Act
Security Bancshares, Inc.
Scott City, Kansas
Order Approving Acquisition
Nonbanking
Subsidiary
of a Bank and
Security Bancshares, Inc., Scott City, Kansas
("Bancshares"), has applied for the Board's approval
under section 3(a)(3) of the Bank Holding Company
Act (the "Act") (12 U . S . C . § 1842(a)(3)) to acquire
Farmers State Bank of Oakley, Oakley, Kansas
("Bank"). Bancshares has also applied under section
4(c)(8)(C) of the Act to acquire Medlin Insurance
Agency, Inc., Oakley, Kansas ("Medlin Agency"),
currently a nonbanking subsidiary of Bank, which is
engaged in general insurance agency activities in a
community with a population of under 5,000.
Notice of the applications, affording an opportunity
for interested persons to submit comments, has been
duly published (54 Federal Register 14,864 (1989)).
The time for filing comments has expired, and the
Board has considered the applications and all comments received in light of the factors set forth in
sections 3(c) and 4(c)(8) of the Act.
650
Federal Reserve Bulletin • September 1989
Bancshares controls one subsidiary bank, Security
State Bank, Scott City, Kansas ("Security Bank").
Security Bank (deposits of $53.57 million) and Bank
(deposits of $23.28 million) are among the smaller
banking organizations in Kansas, each controlling
substantially less than one percent of statewide commercial bank deposits. 1 Consummation of this proposal would not increase significantly the concentration of banking resources in Kansas.
Bank and Security Bank do not compete in the same
banking market. In light of the facts of record, consummation of this proposal would not have a significant
adverse effect on competition in any relevant banking
market.
Bancshares's proposed capital injection into Bank will
serve to improve the condition of Bank and enhance its
fixture prospects. Based on this and other facts of record,
the Board concludes that the financial and managerial
resources and future prospects of Bancshares, Security
Bank, and Bank are consistent with approval. Considerations relating to the convenience and needs of the communities to be served also are consistent with approval.
Bancshares also has applied to acquire 100 percent of
the voting shares of Medlin Agency. Medlin Agency
conducts general insurance agency activities in Oakley,
Kansas (where Bank is located) and in surrounding Logan
County, a place with a population not exceeding 5,000.
The Board previously has determined that such activities
are permissible for bank holding companies under section
225.25(b)(8)(iii) of the Board's Regulation Y (12 C.F.R.
225.25(b)(8)(iii». Bancshares has committed to abide by
the limitations contained in that section with respect to the
conduct of such activities.
In light of the facts of record, the Board concludes that
Bancshares's acquisition of Medlin Agency would not
significantly affect competition in any relevant market.
Furthermore, there is no evidence in the record to indicate
that approval of this proposal would result in undue
concentration of resources, unfair competition, conflicts
of interest, unsound banking practices, or other adverse
effects on the public interest. Accordingly, the Board has
determined that the balance of the public interest factors it
must consider under section 4(c)(8) of the Act is favorable
and consistent with approval.
Based on the foregoing and other facts of record, the
Board has determined that the applications should be, and
hereby are, approved. The banking acquisition shall not
be consummated before the thirtieth calendar day following the effective date of this Order, and neither the
banking acquisition nor the nonbanking acquisition shall
occur later than three months after the effective date of
this Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of Kansas
City, acting pursuant to delegated authority. The determination with respect to Bancshares's acquisition of the
Medlin Agency is subject to all of the conditions set forth
in Regulation Y, including those in sections 225.4(b) and
225.23(b), and to the Board's authority to require modification or termination of the activities of a holding company or any of its subsidiaries as the Board finds necessary to assure compliance with the provisions and
purposes of the Act and the Board's regulations and
orders issued thereunder, or to prevent evasion thereof.
By order of the Board of Governors, effective
July 31, 1989.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Kelley. Absent and not voting:
Governors Heller and La Ware.
JENNIFER J. JOHNSON
Associate
1. Banking data are as of March 31, 1989.
APPLICATIONS
APPROVED
UNDER BANK
HOLDING
COMPANY
Secretary
of the
Board
ACT
By the Secretary of the Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon
request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.
Section 4
A
National City Corporation,
Cleveland, Ohio
Nonbanking Activity/
Company
Shawmut Mortgage Corporation,
Miamisburg, Ohio
Effective
date
July 13, 1989
Legal Developments
By Federal Reserve
651
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
BMR Financial Group, Inc.,
Atlanta, Georgia
BOC Banshares, Inc.,
Chouteau, Oklahoma
Bosshard Banco, Ltd.,
La Crosse, Wisconsin
Campbell Hill Bancshares, Inc.,
Campbell Hill, Illinois
Central of Kansas, Inc.,
Junction City, Kansas
Central of Kansas V, Inc.,
Junction City, Kansas
Commercial Bankstock, Inc.,
Oklahoma City, Oklahoma
Community Illinois Corporation,
Rock Falls, Illinois
Country Bank Shares, Inc.,
Milford, Nebraska
Dahlonega Bancorp, Inc.,
Dahlonega, Georgia
Fifth Third Bancorp,
Cincinnati, Ohio
Firstar Corporation,
Milwaukee, Wisconsin
Firstar Corporation,
Milwaukee, Wisconsin
F.W.S.F. Corporation,
Milwaukee, Wisconsin
First Busey Corporation,
Urbana, Illinois
First Commercial Holding
Corporation,
Asheville, North Carolina
First Financial Bancorp,
Monroe, Ohio
First Financial Bancorp,
Monroe, Ohio
Bank(s)
Bay Bankshares, Inc.,
Clearwater, Florida
Bank of Commerce,
Chouteau, Oklahoma
Bank of Stoddard,
Stoddard, Wisconsin Ferryville
State Bank,
Ferryville, Wisconsin
First State Bank of Campbell
Hill,
Campbell Hill, Illinois
The Durham State Bank,
Durham, Kansas
Mercentile Bancorp, Inc.,
Moore, Oklahoma
Community State Bank of
Rock Falls,
Rock Falls, Illinois
Farmers and Merchants Bank,
Milford, Nebraska
Georgia First Bank,
Gainesville, Georgia
C.S. Bancshares, Inc.,
Connersville, Indiana
The First National Bank of
Wisconsin Rapids,
Wisconsin Rapids, Wisconsin
Elkhorn Bankshares Corporation,
Elkhorn, Wisconsin
St. Joseph Bancorp,
St. Joseph, Illinois
First Commercial Bank,
Asheville, North Carolina
ILB Financial Corp.,
North Manchester, Indiana
Union Trust Company,
Union City, Indiana
Reserve
Bank
Effective
date
Atlanta
July 13, 1989
Kansas City
July 13, 1989
Minneapolis
June 30, 1989
St. Louis
June 29, 1989
Kansas City
July 26, 1989
Kansas City
July 24, 1989
Chicago
July 7, 1989
Kansas City
June 27, 1989
Atlanta
June 28, 1989
Cleveland
July 14, 1989
Chicago
June 26, 1989
Chicago
June 26, 1989
Chicago
July 19, 1989
Richmond
June 26, 1989
Cleveland
July 6, 1989
Cleveland
July 5, 1989
652
Federal Reserve Bulletin • September 1989
Section 3—Continued
Applicant
First Holmes Corporation,
Lexington, Mississippi
First National Financial
Corporation,
Manchester, Kentucky
Franklin Financial Corporation,
Franklin, Tennessee
Guaranty Bancshares
Corporation,
Shamokin, Pennsylvania
Heritage Bancshares
Corporation,
Pennock, Minnesota
Hutchinson Financial
Corporation,
Wichita, Kansas
Illinois Financial Services, Inc.,
Chicago, Illinois
Jefferson Bankshares, Inc.,
Charlottesville, Virginia
Lordsburg Financial Corporation,
Lordsburg, New Mexico
Madison Agency, Inc.,
Sioux Falls, South Dakota
Meridian Bancorp, Inc.,
Reading, Pennsylvania
Michigan National Corporation,
Farmington Hills, Michigan
Midlantic Corporation,
Edison, New Jersey
Mountain West Banking
Corporation,
Denver, Colorado
National Westminster Bancorp
NJ,
Jersey City, New Jersey
Bank(s)
Reserve
Bank
Effective
date
Citizens Financial Corporation,
Belzoni, Mississippi
First National Bank of
Manchester,
Manchester, Kentucky
Franklin National Bank,
Franklin, Tennessee
Guaranty Bank of Princeton,
Princeton, New Jersey
St. Louis
July 7, 1989
Cleveland
July 19, 1989
Atlanta
July 14, 1989
Philadelphia
July 12, 1989
Monticello Bancshares, Inc.,
Monticello, Minnesota
Minneapolis
June 29, 1989
Iuka Bancshares, Inc.,
Iuka, Kansas
Kansas City
June 27, 1989
PDB Investment Corporation,
Norridge, Illinois
Chesapeake Bank Corporation,
Chesapeake, Virginia
Western Bank,
Lordsburg, New Mexico
State Bank of Hendricks,
Hendricks, Minnesota
First Commercial Bank of
Philadelphia,
Philadelphia, Pennsylvania
First State Bank and Trust
Company,
Port Lavaca, Texas
Central Trust Company,
Rochester, New York
Endicott Trust Company,
Endicott, New York
The First National Bank of
Moravia,
Moravia, New York
The Merchants National Bank &
Trust Company of Syracuse,
Syracuse, New York
Union National Bank,
Albany, New York
International Bancorp,
Denver, Colorado
Chicago
July 21, 1989
Richmond
July 5, 1989
Dallas
July 20, 1989
Minneapolis
June 23, 1989
Philadelphia
July 7, 1989
Chicago
June 29, 1989
N e w York
July 14, 1989
Kansas City
July 18, 1989
Ultra Bancorporation,
Bridgewater, New Jersey
New York
July 12, 1989
Legal Developments
Section 3—Continued
Applicant
National Westminster Bank PLC,
London, England
NatWest Holdings Inc.,
Wilmington, Delaware
National Westminster Bancorp
Inc.,
New York, N e w York
N B Corporation,
Charlottesville, Virginia
N e w Richland Bancshares, Inc.,
N e w Richland, Minnesota
North Georgia National
Bancshares, Inc.,
Woodstock, Georgia
Peoples Bancorp of Winchester
Inc.,
Winchester, Kentucky
Peoples Heritage Financial
Group, Inc.,
Portland, Maine
Peoples First Corporation,
Paducah, Kentucky
Pine Creek Bancorp, Inc.,
Oakland, Illinois
Pioneer Acquisition Corp.,
Lady smith, Wisconsin
SBK Bancshares, Inc.,
Kiel, Wisconsin
State Savings Bancorp, Inc.,
Caro, Michigan
Wauneta Falls Bancorp, Inc.,
Wauneta, Nebraska
Bank(s)
Reserve
Bank
Effective
date
Ultra Bancorporation,
Bridgewater, New Jersey
New York
July 12, 1989
Chesapeake Bank & Trust,
Chesapeake, Virginia
American Bank,
Newport News, Virginia
State Bank of New Richland,
New Richland, Minnesota
North Georgia National Bank,
Woodstock, Georgia
Richmond
July 5, 1989
Minneapolis
July 14, 1989
Atlanta
July 13, 1989
Peoples Commercial Bank,
Winchester, Kentucky
Cleveland
June 23, 1989
First Coastal Banks, Inc.,
Portsmouth, New Hampshire
Boston
June 22, 1989
Salem Bank, Inc.,
Salem, Kentucky
The Oakland National Bank,
Oakland, Illinois
Pioneer National Bank of
Lady smith,
Lady smith, Wisconsin
State Bank of Kiel,
Kiel, Wisconsin
State Savings Bank of Caro,
Caro, Michigan
Wauneta Falls Bank,
Wauneta, Nebraska
St. Louis
June 23, 1989
Chicago
July 7, 1989
Minneapolis
July 6, 1989
Chicago
June 22, 1989
Chicago
July 24, 1989
Kansas City
July 11, 1989
Section 4
Applicant
Algemene Bank Nederland,
N.V.,
Amsterdam, The Netherlands
Banc One Corporation,
Columbus, Ohio
Nonbanking Activity/
Company
Reserve
Bank
Effective
date
Lease Plan Holdings N . V . ,
Amsterdam, The Netherlands
Chicago
June 23, 1989
Banc One Brokerage
Corporation,
Columbus, Ohio
Cleveland
July 24, 1989
653
654
Federal Reserve Bulletin • September 1989
Section 4—Continued
Nonbanking Activity/
Company
Applicant
First Bank System, Inc.,
Minneapolis, Minnesota
Fleet/Norstar Financial Group,
Inc.,
Providence, Rhode Island
The Fuji Bank, Limited,
Tokyo,Japan
Grand Bank Financial
Corporation,
Grand Rapids, Michigan
RHNB Corporation,
Rock Hill, South Carolina
United Saver's Bancorp, Inc.,
Manchester, N e w Hampshire
U.S. Trust Corporation,
N e w York, N e w York
APPLICATIONS
APPROVED
By Federal Reserve
V. J. Schaefer Agency,
Adams, Minnesota
Shatkin Financial Services, Inc.,
Chicago, Illinois
Reserve
Bank
Effective
date
Minneapolis
July 18, 1989
Boston
July 11, 1989
Heller Financial, Inc.,
Chicago, Illinois
Grand Financial Associates, Inc.,
Grand Rapids, Michigan
N e w York
July 12, 1989
Chicago
July 18, 1989
Sterling Commercial Corporation,
Charlotte, North Carolina
loan servicing activities
Richmond
June 30, 1989
Boston
July 11, 1989
Denker & Goodwin
Incorporated,
Dallas, Texas
N e w York
June 23, 1989
UNDER BANK MERGER
ACT
Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon
request to the Reserve Banks.
Applicant
The Bank of N e w York,
N e w York, N e w York
Bank(s)
Irving Trust Company,
N e w York, New York
Bank of Long Island,
Babylon, N e w York
Dutchess Bank & Trust
Company,
Poughkeepsie, New York
Nanuet National Bank,
Nanuet, N e w York
Scarsdale National Bank and
Trust Company,
Scarsdale, N e w York
Reserve
Bank
N e w York
Effective
date
June 29, 1989
Legal Developments
Applicant
Crestar Bank,
Richmond, Virginia
First of America Bank-Northern
Michigan,
Cheboygan, Michigan
Norstar Bank,
Hempstead, N e w York
Texas Commerce Bank-Rio
Grande Valley,
Brownsville, Texas
PENDING CASES INVOLVING
Reserve
Bank
Bank(s)
Mountain National Bank of
Clifton Forge,
Clifton Forge, Virginia
First of America Bank-Grand
Traverse, National
Association,
Traverse City, Michigan
The First National Bank of
Downsville,
Downsville, N e w York
Commerce of Brownsville,
Brownsville, Texas
THE BOARD OF
Effective
date
N e w York
June 29, 1989
Chicago
June 30, 1989
N e w York
July 5, 1989
Dallas
July 13, 1989
GOVERNORS
This list of pending cases does not include suits against the Federal Reserve
Governors is not named a party.
CB&T Bancshares, Inc. v. Board of Governors, No.
89-1394 (D.C. Cir., filed June 21, 1989).
MCorp v. Board of Governors, No. 89-1677 (S.D.
Tex. filed May 2, 1989).
Independent Insurance Agents of America, Inc. v.
Board of Governors, No. 89-4030 (2d Cir., filed
March 9, 1989).
Securities Industry Association v. Board of Governors,
No. 89-1127 (D.C. Cir., filed February 16, 1989).
American Land Title Association v. Board of Governors, No. 88-1872 (D.C. Cir., filed December 16,
1988).
MCorp v. Board of Governors, N o . CA3-88-2693-F
(N.D. Tex., filed October 28, 1988).
White v. Board of Governors, No. CU-S-88-623-RDF
(D. Nev., filed July 29, 1988).
655
Banks in which the Board
of
VanDyke v. Board of Governors, N o . 88-5280 (8th
Cir., filed July 13, 1988).
Baugh v. Board of Governors, N o . C88-3037 (N.D.
Iowa, filed April 8, 1988).
Bonilla v. Board of Governors, N o . 88-1464 (7th Cir.,
filed March 11, 1988).
Cohen v. Board of Governors, N o . 88-1061 (D.N.J.,
filed March 7, 1988).
Stoddard v. Board of Governors, No. 88-1148 (D.C.
Cir., filed February 25, 1988).
Teichgraeber v. Board of Governors, No. 87-2505-0
(D. Kan., filed Oct. 16, 1987).
The Chase Manhattan Corporation v. Board of Governors, No. 87-1333 (D.C. Cir., filed July 20, 1987).
Lewis v. Board of Governors, N o s . 87-3455, 87-3545
(11th Cir., filed June 25, Aug. 3, 1987).
656
Membership of the Board of Governors
of the Federal Reserve System, 1913-89
APPOINTIVE
MEMBERS1
Name
Federal Reserve
District
Date of initial
oath of office
Charles S. Hamlin
Boston
Paul M. Warburg
Frederic A. Delano
W.P.G. Harding
Adolph C. Miller
N e w York
Chicago
Atlanta
San Francisco
Albert Strauss
Henry A. Moehlenpah
Edmund Piatt
N e w York
Chicago
N e w York
Oct. 26, 1918
N o v . 10, 1919
June 8, 1920
David C. Wills
John R. Mitchell
Milo D. Campbell
Daniel R. Crissinger
George R. James
Cleveland
Minneapolis
Chicago
Cleveland
St. Louis
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
N e w York
Wayland W. Magee
Kansas City
Eugene R. Black
Atlanta
M.S. Symczak
Chicago
do
Oct. 4, 1927
Sept. 16, 1930
May 18, 1931
May 19, 1933
June 14, 1933
J.J. Thomas
Marriner S. Eccles
do
N o v . 15, 1934
Kansas City
San Francisco
Aug. 10, 1914
do.
do.
do.
do.
Joseph A. Broderick
N e w York
John K. McKee
Cleveland
Ronald Ransom
Atlanta
Ralph W. Morrison
Dallas
Chester C. Davis
Richmond
Ernest G. Draper
N e w 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
N e w 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, 1952
do
Aug. 12, 1954
Aug. 13, 1954
Mar. 17, 1955
Mar. 25, 1959
George W. Mitchell
Chicago
Aug. 31, 1961
Other dates and information relating
to membership2
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 N o v . 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?
Served until Aug. 13, 1954. 3
Resigned N o v . 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
657
Federal Reserve
District
Name
Date of initial
oath of office
J. D e w e y Daane
Sherman J. Maisel
Andrew F. Brimmer
William W. Sherrill
Arthur F. Burns
Richmond
San Francisco
Philadelphia
Dallas
N e w York
N o v . 29, 1963
Apr. 30, 1965
Mar. 9, 1966
May 1, 1967
Jan. 1, 1970
John E. Sheehan
Jeffrey M. Bucher
Robert C. Holland
Henry C. Wallich
Philip E. Coldwell
Philip C. Jackson, Jr
J. Charles Partee
Stephen S. 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
John P. LaWare
St. Louis
San Francisco
Kansas City
Boston
Dallas
Atlanta
Richmond
Philadelphia
Minneapolis
San Francisco
Chicago
N e w York
Atlanta
Philadelphia
Kansas City
San Francisco
Chicago
Kansas City
Richmond
San Francisco
Dallas
N e w York
Boston
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
Aug. 15, 1988
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, 1933-Aug. 15, 1934
Marriner S. Eccles
N o v . 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 N o v . 17, 1978.
Served until Feb. 7, 1986. 3
Died N o v . 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.
Resigned July 31, 1989.
Vice Chairmen4
Frederic A. Delano
Aug. 10, 1914-Aug. 9, 1916
Paul M. Warburg
Aug. 10, 1916-Aug. 9, 1918
Albert Strauss
Oct. 26, 1918-Mar. 15, 1920
Edmund Piatt
July 23, 1920-Sept. 14, 1930
J.J. Thomas
Aug 21, 1934-Feb. 10, 1936
Ronald Ransom
Aug. 6, 1956-Dec. 2, 1947
C. Canby Balderston
Mar. 11, 1955-Feb. 28, 1966
J.L. Robertson
Mar. 1, 1966-Apr. 30, 1973
George W. Mitchell
May 1, 1973-Feb. 13, 1976
Stephen S. Gardner
Feb. 13, 1976-Nov. 19, 1978
Frederick H. Schultz ....July 27, 1979-Feb. 11, 1982
Preston Martin
Mar 31, 1982-Mar. 31, 1986
Manuel H. Johnson
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
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
Other dates and information relating
to membership2
Comptrollers of the Currency
John Skelton Williams...Feb.
Daniel R. Crissinger
Mar.
Henry M. Dawes.
May
Joseph W. Mcintosh
Dec.
J.W. Pole
Nov.
J.F.T. O'Connor
May
2, 1914-Mar. 2, 1921
17, 1921-Apr. 30, 1923
1, 1923-Dec. 17, 1924
20, 1924-Nov. 20, 1928
21, 1928-Sept. 20, 1932
11, 1933-Feb. 1, 1936
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
N O T E . The following
tables may have some
discontinuities in historical data for some series
beginning with the March 1989 issue: 1.10, 1.17,
1.20,1.21,1.22,1.23,1.24,1.25,1.26,1.28,1.30,
1.31,1.32,1.35,1.36,1.37,1.39,1.40,1.41,1.42,
1.43,1.45,1.46,1.47,1.48,
1.50,1.53, 1.54, 1.55,
1.56, 2.11, 2.14, 2.15, 2.16, 2.17, 3.14, and 3.21.
For a more detailed explanation of the changes,
see the announcement on pages 288-89 of the
April 1989 BULLETIN.
CONTENTS
COMMERCIAL
Domestic
MONEY
Financial
Statistics
STOCK AND BANK
CREDIT
A3 Reserves, money stock, liquid assets, and debt
measures
A4 Reserves of depository institutions, Reserve
Bank credit
A5 Reserves and borrowings—Depository
institutions
A6 Selected borrowings in immediately available
funds—Large member banks
INSTRUMENTS
A7 Federal Reserve Bank interest rates
A8 Reserve requirements of depository institutions
A9 Federal Reserve open market transactions
FEDERAL
RESERVE
BANKS
A10 Condition and Federal Reserve note statements
A l l Maturity distribution of loan and security
holdings
WEEKLY
A19
A20
A21
A22
AND CREDIT
AGGREGATES
A12 Aggregate reserves of depository institutions
and monetary base
A13 Money stock, liquid assets, and debt measures
A15 Bank debits and deposit turnover
A16 Loans and securities—All commercial banks
REPORTING
COMMERCIAL
BANKS
Assets and liabilities
All reporting banks
Banks in N e w York City
Branches and agencies of foreign banks
Gross demand deposits—individuals,
partnerships, and corporations
MARKETS
A23 Commercial paper and bankers dollar
acceptances outstanding
A23 Prime rate charged by banks on short-term
business loans
A24 Interest rates—money and capital markets
A25 Stock market—Selected statistics
A26 Selected financial institutions—Selected assets
and liabilities
FEDERAL
MONETARY
INSTITUTIONS
A17 Major nondeposit funds
A18 Assets and liabilities, last-Wednesday-of-month
series
FINANCIAL
POLICY
BANKING
A28
A29
A30
A30
FINANCE
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U . S . Treasury—Types
and ownership
A31 U.S. government securities
dealers—Transactions
2
Federal Reserve Bulletin • September 1989
A32 U.S. government securities dealers—Positions
and financing
A33 Federal and federally sponsored credit
agencies—Debt outstanding
A34 N e w security issues—State and local
governments and corporations
A35 Open-end investment companies—Net sales
and asset position
A35 Corporate profits and their distribution
A35 Total nonfarm business expenditures on new
plant and equipment
A36 Domestic finance companies—Assets and
liabilities and business credit
ESTATE
A37 Mortgage markets
A38 Mortgage debt outstanding
CONSUMER INSTALLMENT
SUMMARY
Statistics
STATISTICS
A55
A56
A56
A56
SECURITIES MARKETS
AND
CORPORATE
FINANCE
REAL
International
U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A57 Foreign branches of U . S . banks—Balance
sheet data
A59 Selected U.S. liabilities to foreign official
institutions
REPORTED BY BANKS
IN THE UNITED
STATES
A59
A60
A62
A63
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A63 Banks' own claims on unaffiliated foreigners
A64 Claims on foreign countries—Combined
domestic offices and foreign branches
CREDIT
A39 Total outstanding and net change
A40 Terms
REPORTED BY NONBANKING
ENTERPRISES IN THE UNITED
BUSINESS
STATES
A65 Liabilities to unaffiliated foreigners
A66 Claims on unaffiliated foreigners
FLOW OF FUNDS
A41 Funds raised in U.S. credit markets
A43 Direct and indirect sources of funds to credit
markets
A44 Summary of credit market debt outstanding
A45 Summary of credit market claims, by holder
SECURITIES
Domestic
Nonfinancial
INTEREST
SELECTED
MEASURES
Statistics
A46 Nonfinancial business activity—Selected
measures
A47 Labor force, employment, and unemployment
A48 Output, capacity, and capacity utilization
A49 Industrial production—Indexes and gross value
A51 Housing and construction
A52 Consumer and producer prices
A53 Gross national product and income
A54 Personal income and saving
HOLDINGS
AND
TRANSACTIONS
A67 Foreign transactions in securities
A68 Marketable U.S. Treasury bonds and
notes—Foreign transactions
AND EXCHANGE
RATES
A69 Discount rates of foreign central banks
A69 Foreign short-term interest rates
A70 Foreign exchange rates
A71 Guide to Tabular
Statistical Releases,
Tables
SPECIAL
All
Presentation,
and Special
TABLE
Pro forma balance sheet and income statement,
March 31, 1989
Money Stock and Bank Credit
A3
1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Annual rates of change, seasonally adjusted in percent1
1988
1989
1989
Monetary and credit aggregates
Q3
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base
5
6
7
8
9
Concepts of money, liquid assets, and debt4
Ml
M2
M3
L
Debt
Nontrqnsaction
10 In M2
11 In M3 only 6
Q4
Ql
Q2
Feb.
Mar.
Apr.
May
June
3.1
2.9
1.3
6.5
-.8
-1.5
5.3
4.8
-4.2
-4.4
.0
4.6
-8.7
-7.6
-10.2
1.5
-2.2
-2.4
1.3
3.3
-8.1
-4.3
-14.9
4.6
-7.8
-4.3
-17.9
.3
-14.6
-20.0
-3.2
-1.5
-8.0
-5.5
-3.4
3.1
5.2
3.8
5.6'
7.1
8.6
2.3
3.6
4.8
5.4
9.1
-.4
1.9
3.7r
4.8
8.2
-5.5
1.3
3.1
n.a.
7.4
1.8r
1.4
2.9
3.2
8.6
— 1.7r
3.7
6.7
8.6 r
7.5
-4.7
1.0
2.4 r
4.1
7.0
-14.9
-3.3
-i.r
-.2
7.3
-4.2
6.7
6.3
n.a.
n.a.
3.3
12.2r
4.1
9.(K
2.6
10.5'
3.7
9.3
1.2
8.3 r
5.6
17.3r
3.0
7.5'
.7
6.5 r
10.3
4.9
-3.1
26.5
24.4'
-10.8
28.6
22.9
-19.0
34.6
22.1
-20.3
28.7
9.6
-6.1
12.3
2.7
—25.5''
17.5
12.5
-26.0
22.7
8.r
-8.7
17.2
1.5
2
institutions
components
Time and savings deposits
Commercial banks
Savings'
Small-denomination time
Large-denomination time 9,10
Thrift institutions
15
Savings
16
Small-denomination time
17 Large-denomination time 9
12
13
14
Debt components4
18
19 Nonfederal
7.9
11.6
18.2
4.0
18.0
13.0
-3.7
22.5
18.1
-14.1
29.2
17.8
2.1
5.4
3.9
-2.5
6.6
7.9
-7.7
4.3
1.2
-18.8
14.3
5.8
-13.6
5.4
-2.1
-10.7r
3.4
-.3
7.1
9.1
7.8
9.5
7.7
8.4
6.6
7.7
10.2
8.1
12.5
5.9
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding in preceding month or quarter.
2. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted from the actual series.
3. The monetary base not adjusted for discontinuities consists of total
reserves plus required clearing balances and adjustments to compensate for float
at Federal Reserve Banks plus the currency component of the money stock less
the amount of vault cash holdings of thrift institutions that is included in the
currency component of the money stock plus, for institutions not having required
reserve balances, the excess of current vault cash over the amount applied to
satisfy current reserve requirements. After the introduction of contemporaneous
reserve requirements (CRR), currency and vault cash figures are measured over
the weekly computation period ending Monday.
Before CRR, all components of the monetary base other than excess reserves
are seasonally adjusted as a whole, rather than by component, and excess
reserves are aldded on a not seasonally adjusted basis. After CRR, the seasonally
adjusted series consists of seasonally adjusted total reserves, which include
excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted
currency component of the money stock plus the remaining items seasonally
adjusted as a whole.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of depository institutions; (2) travelers checks of nonbank issuers; (3) demand
deposits at all commercial banks other than those due to depository institutions,
the U.S. government, and foreign banks and official institutions less cash items in
the process of collection and Federal Reserve float; and (4) other checkable
deposits (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union
share draft accounts, and demand deposits at thrift institutions.
M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S. banks worldwide, Money Market Deposit Accounts
(MMDAs), savings and small-denomination time deposits (time deposits—including retail RPs—in amounts of less than $100,000), and balances in both taxable and
tax-exempt general purpose and broker-dealer money market mutual funds.
Excludes individual retirement accounts (IRA) and Keogh balances at depository
5.1
7.6
2.9
8.7
n.a.
n.a.
institutions and money market funds. Also excludes all balances held by U.S.
commercial banks, money market funds (general purpose and broker-dealer),
foreign governments and commercial banks, and the U.S. government.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U.S. banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted
is the estimated amount of overnight RPs and Eurodollars held by institution-only
money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are based on monthly averages. Growth rates for debt reflect adjustments for
discontinuities over time in the levels of debt presented in other tables.
5. Sum of overnight RPs and Eurodollars, money market fund balances
(general purpose and broker-dealer), MMDAs, and savings and small time
deposits less the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposit liabilities.
6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents,
money market fund balances (institution-only), less a consolidation adjustment
that represents the estimated amount of overnight RPs and Eurodollars held by
institution-only money market mutual funds.
7. Excludes MMDAs.
8. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All IRA and Keogh accounts at commercial
banks and thrifts are subtracted from small time deposits.
9. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
10. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
A4
DomesticNonfinancialStatistics • September 1989
1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT
Millions of dollars
Monthly averages of
daily figures
Weekly averages of daily figures for week ending
1989
1989
Factors
Apr.
May
June
May 17
May 24
May 31
June 7
June 14
June 21
264,245
267,629
263,991
269,689
260,224
256,587
260,844
259,907
262,225
271,098
233,003
231,215
1,788
7,400
6,738
662
0
2,326
800
20,716
11,061
5,508
18,989
234,995
230,783
4,212
8,387
6,654
1,733
0
1,717
801
21,729
11,061
6,703
19,049
227,688
227,291
397
6,754
6,654
100
0
1,495
1,425
26,630
11,061
8,518
19,188
237,103
232,688
4,415
8,645
6,645
1,991
0
1,734
977
21.230
11,061
19,045
230,029
230,029
0
6,654
6,654
0
0
1,675
826
21,039
11,061
7,304
19,059
225,478
225,478
0
6,654
6,654
0
0
1,621
655
22,179
11,060
8,447
19,073
227,361
227,361
0
6,654
6,654
0
0
1,995
1,059
23,775
11,060
8,518
19,171
225,637
225,637
0
6,654
6,654
0
0
2,255
1,266
24,094
11,060
8,518
19,181
224,643
224,643
0
6,654
6,654
0
0
939
1,611
28,378
11,061
8,518
19,191
231,898
230,621
1,277
6,987
6,654
333
0
992
1,564
29,657
11,061
8,518
19,201
243,781
473
245,574
486
247,860
488
245,707
487
245,363
485
246,648
485
247,829
488
248,280
490
247,710
488
247,298
486
8,798
240
14,126
227
10,072
251
16,166
232
8,706
215
5,154
260
5,665
296
5,397
253
9,274
242
18,343
215
2,125
373
1,855
528
1,617
303
1,922
381
1,743
635
1,934
902
1,908
341
1,778
253
1,929
298
1,957
328
June 28
SUPPLYING RESERVE F U N D S
1 Reserve Bank credit
2
U.S. government securities 1
3
Bought outright
4
Held under repurchase agreements.
5
Federal agency obligations
Bought outright
6
7
Held under repurchase agreements
Acceptances
8
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
5,961
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
8,121
8,480
8,101
8,630
8,243
8,070
7,741
8,261
8,170
8,217
35,893
33,166
34,066
32.231
32,256
31,714
35,325
33,953
32,885
33,033
End-of-month figures
Wednesday figures
1989
1989
Apr.
May
June
May 17
May 24
May 31
June 7
June 14
June 21
June 28
23 Reserve Bank credit
279,013
256,669
269,037
263,081
256,318
256,669
258,186
262,688
268,271
271,518
24
U.S. government securities 1
25
Bought outright
26
Held under repurchase agreements
27
Federal agency obligations
28
Bought outright
29
Held under repurchase agreements . . .
30
Acceptances
31
Loans
32
Float
33
Other Federal Reserve assets
34 Gold stock 2
35 Special drawing rights certificate a c c o u n t . . .
36 Treasury currency outstanding
244,506
234,808
9,698
10,495
6,654
3,841
0
1,952
545
21,515
11,061
5,518
19,017
223,535
223,535
0
6,654
6,654
0
0
2,033
2,064
22,383
11,060
8,518
19,073
231,767
231,767
0
6,654
6,654
0
0
841
-203
29,978
11,063
8,518
19,211
233,232
233,232
0
6,654
6,654
0
0
1,707
1,408
20,080
11,061
6,518
19,045
224,600
224,600
0
6,654
6,654
0
0
1,586
1,680
21,798
11,060
8,018
19,059
223,535
223,535
0
6,654
6,654
0
0
2,033
2,064
22,383
11,060
8,518
19,073
224,175
224,175
0
6,654
6,654
0
0
2,082
1,644
23,631
11,060
8,518
19,171
227,654
227,654
0
6,654
6,654
0
0
2,384
1,701
24,295
11,060
8,518
19,181
230,162
230,162
0
6,654
6,654
0
0
832
1,640
28,983
11,061
8,518
19,191
231,062
231,062
0
6,654
6,654
0
0
1,759
1,338
30,705
11,062
8,518
19,201
243,411
476
247,525
488
249,139
474
245,743
485
245,921
485
247,529
485
248,280
488
248,164
490
247,489
487
247,936
481
22,952
352
5,288
429
12,153
275
9,986
227
6,922
276
5,288
429
5,207
229
5,281
293
19,822
203
19,244
287
1,667
481
1,616
524
1,616
229
1,659
600
1,616
483
'1,616
524
1,616
302
1,616
242
1,598
267
1,598
327
SUPPLYING RESERVE F U N D S
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
8,969
7,513
8,178
8,058
7,964
7,513
7,784
8,078
7,984
7,962
37,968
33,553
35,765
32,947
30,789
31,937
33,027
37,280
29,190
32,463
1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes any securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2. Revised for periods between October 1986 and April 1987. At times during
this interval, outstanding gold certificates were inadvertently in excess of the gold
stock. Revised data not included in this table are available from the Division of
Research and Statistics, Banking Section.
3. Excludes required clearing balances and adjustments to compensate for
float.
NOTE. For amounts of currency and coin held as reserves, see table 1.12.
Money Stock and Bank Credit
1.12 RESERVES AND BORROWINGS
A5
Depository Institutions'
Millions of dollars
Monthly averages 9
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks 2
Total vault cash 1
Vault4
Surplus
Total reserves
Required reserves
i
Excess reserve balances at Reserve Banks
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
1986
1987
1988
1988
Dec.
Reserve classification
Dec.
Dec.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
37,360
24,077
22,199
1,878
59,560
58,191
1,369
827
38
303
37,673
26,185
24,449
1,736
62,123
61,094
1,029
777
93
483
37,830
27,197
25,909
1,288
63,739
62,699
1,040
1,716
130
1,244
37,830
27,197
25,909
1,288
63,739
62,699
1,040
1,716
130
1,244
36,475
28,376
26,993
1,383
63,468
62,323
1,145
1,662
76
1,046
32,834
29,776
27,859
1,917
60,693
59,539
1,154
1,487
97
1,050
34,623
27,059
25,589
1,470
60,212
59,255
957
1,813
139
1,334
35,841
26,746
25,456
1,290
61,288
60,511
776
2,289
213
1,707
33,199
27,166
25,712
1,454
58,911
57,881
1,031
1,720
345
1,197
33,852
27,151
25,735
1,416
59,587
58,682
905
1,490
431
917
1989
Biweekly averages of daily figures for weeks ending
1989
Mar. 8
11
12
13
14
15
16
17
18
19
20
Reserve balances with Reserve Banks 2
Total vault cash
Vault4
Surplus 5
Total reserves
Required reserves
i
Excess reserve balances at Reserve Banks
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
Mar. 22
Apr. 5
Apr. 19
May 3
May 17
May 31
June 14
June 28
July 12
34,485
27,581
25,962
1,620
60,446
59,490
957
1,800
116
1,250
34,702
26,738
25,332
1,406
60,034
59,299
735
1,586
136
1,164
34,623
27,095
25,659
1,436
60,282
58,977
1,305
2,177
167
1,675
36,239
26,339
25,174
1,166
61,413
61,190
223
2,582
190
1,970
35,863
27,106
25,723
1,383
61,586'
60,345
1,241
1,968
265
1,387
33,864
26,644
25,352
1,292
59,216
58,357
859
1,739
336
1,206
31,964
27,701
26,071
1,631
58,034
56,877
1,158
1,649
373
1,148
34,608r
26,607
25,301
1,306
59,909''
59,012r
897r
2,126
388
1,657
32,95(f
27,630
26,104
1,526
59,054r
58,154''
901
965
467
287
34,869
27,607
26,192
1,415
61,061
60,069
992
717
483
146
1. These data also appear in the Board's H.3 (502) release. For address, see inside front cover.
2. Excludes required clearing balances and adjustments to compensate for
float.
3. Dates refer to the maintenance periods in which the vault cash can be used
to satisfy reserve requirements. Under contemporaneous reserve requirements,
maintenance periods end 30 days after the lagged computation periods in which
the balances are held.
4. Equal to all vault cash held during the lagged computation period by
institutions having required reserve balances at Federal Reserve Banks plus the
amount of vault cash equal to required reserves during the maintenance period at
institutions having no required reserve balances.
5. Total vault cash at institutions having no required reserve balances less the
amount of vault cash equal to their required reserves during the maintenance
period.
6. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash used to satisfy reserve
requirements. Such vault cash consists of all vault cash held during the lagged
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
7. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy
reserve requirements less required reserves.
8. Extended credit consists of borrowing at the discount window under the
terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
9. Data are prorated monthly averages of biweekly averages.
A6
DomesticNonfinancialStatistics • September 1989
1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS
Large Member Banks1
Averages of daily figures, in millions of dollars
1988 week ending Monday
Maturity and source
Aug. 1
1
2
3
4
Federal funds purchased, repurchase agreements, and
other selected borrowing in immediately available
funds
From commercial banks in the United States
For one day or under continuing contract
For all other maturities
From other depository institutions, foreign banks and
foreign official institutions, and U.S. government
agencies
For one day or under continuing contract
For all other maturities
Aug. 8
Aug. 15
Aug. 22
Aug. 29
Sept. 5
Sept. 12
Sept. 19
Sept. 26
71,992
11,289
67,616
10,782
69,245
11,136
66,871
10,102
64,904
10,187
69,394
10,001
69,451
9,714
65,767
9,443
62,866
9,450
26,473
5,947
28,408
6,654
27,188
7,463
26,570
6,700
26,952
6,579
27,114
6,629
29,922
6,581
26,636
6,895
27,000
6,273
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
15,502
15,402
16,127
15,083
16,293
14,913
16,304
12,587
15,212
13,177
15,337
12,365
15,072
11,524
14,596
13,136
13,683
13,293
26,956
9,970
26,384
9,845
26,803
10,381
27,452
10,559
28,070
10,701
27,866
10,279
27,761
9,691
27,123
10,429
27,616
10,341
MEMO: Federal funds loans and resale agreements in
immediately available funds in maturities of one day
or under continuing contract
9 To commercial banks in the United States
10 To all other specified customers
35,329
14,160
34,700
15,158
35,575
15,511
35,147
14,952
34,797
14,010
39,559
14,263
34,356
13,677
37,066
14,421
37,013
13,079
5
6
7
8
1. Banks with assets of $1 billion or more as of Dec. 31, 1977.
These data also appear in the Board's H.5 (507) release. For address, see inside
front cover.
2. Brokers and nonbank dealers in securities; other depository institutions;
foreign banks and official institutions; and United States government agencies,
Policy Instruments
A7
1.14 FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Extended credit 2
Adjustment credit
and
Seasonal credit 1
Federal Reserve
Bank
On
7/28/89
Effective
date
Previous
rate
On
7/28/89
Effective
date
7
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
6 Vi
7
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco . . .
7
After 30 days of borrowing 3
First 30 days of borrowing
2/24/89
2/24/89
2/24/89
2/24/89
2/27/89
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
2/27/89
2/24/89
7
6 Vi
Previous
rate
6
On
7/28/89
Effective
date
Previous
rate
Effective date
9.45
7/27/89
7/27/89
7/27/89
7/27/89
7/27/89
7/27/89
9.70
7/13/89
7/13/89
7/13/89
7/13/89
7/13/89
7/13/89
Vi
9.45
6 Vi
Range of rates for adjustment credit in recent years
Effective date
In effect Dec. 31, 1977.
1978-—Jan. 9
20
May 11
12
July 3
10
Aug. 21
Sept. 22
Oct. 16
20
Nov. 1
3
1979-- J u l y 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
1980-- F e b . 15
19
May 29
30
June 13
16
Range (or
level)—
All F.R.
Banks
6
F.R.
Bank
of
N.Y.
6
6-6V2 6Vi
6Vi
6
W
7
6Vi-7
1
7
7-714
7V4
7*
V
m
73/4
8
8-m
8
W
m-m
9 Vz
73/4
8
m
m
m
m
11
11-12
12
10
lOVi
1W
0
11
11
12
12
12-13
13
12-13
12
11-12
11
13
13
13
12
11
11
10
10-10 V
i
10 Vi
10W-11
Effective date
F.R.
Bank
of
N.Y.
7/13/89
7/13/89
7/13/89
7/13/89
7/13/89
7/13/89
9.70
4
Effective date
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
1980—July 28
29
Sept. 26
Nov. 17
Dec. 5
10-11
10
11
12
12-13
10
10
11
12
13
1984—Apr.
9
13
Nov. 21
26
Dec. 24
8Vi-9
9
8Vi-9
8Vi
8
9
9
8Vi
8W
8
1981—May
13-14
14
13-14
13
12
14
14
13
13
12
1985—May 20
24
7Vi-8
7Vi
1987—Sept. 4
11
5Vi-6
6
6
6
1988—Aug.
9
11
6-6Vi
6V2
1989—Feb. 24
27
6Vi-7
7
7
7
7
7
Nov.
Dec.
5
8
2
6
4
1982—July
20
23
2
3
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17
Aug.
1. Adjustment credit is available on a short-term basis to help depository
institutions meet temporary needs for funds that cannot be met through reasonable alternative sources. After May 19,1986, the highest rate established for loans
to depository institutions may be charged on adjustment credit loans of unusual
size that result from a major operating problem at the borrower's facility.
Seasonal credit is available to help smaller depository institutions meet regular,
seasonal needs for funds that cannot be met through special industry lenders and
that arise from a combination of expected patterns of movement in their deposits
and loans. A temporary simplified seasonal program was established on Mar. 8,
1985, and the interest rate was a fixed rate Vi percent above the rate on adjustment
credit. The program was reestablished for 1986 and 1987 but was not renewed for
1988.
2. Extended credit is available to depository institutions, when similar assistance is not reasonably available from other sources, when exceptional circumstances or practices involve only a particular institution or when an institution is
experiencing difficulties adjusting to changing market conditions over a longer
period of time.
3. For extended-credit loans outstanding more than 30 days, a flexible rate
somewhat above rates on market sources of funds ordinarily will be charged, but
Range (or
level)—
All F.R.
Banks
7/27/89
7/27/89
7/27/89
7/27/89
7/27/89
7/27/89
11W-12
llVi
11-11W
11
10W
10-10W
10
9Vi-10
9Vi
9-9 Vi
9
8W-9
8W-9
8
Yl
im
llVi
11
11
10W
10
10
9
9Vi
9
9
9
8Vi
8Vi
Vl
1986—Mar.
7
10
Apr. 21
July 11
Aug. 21
22
In effect July 28, 1989
IVi
IVi
1-1 Vi 1
1
1
6Vi-7
6 Vi
6
6
5Vl-6 5Vi
5 Vi
5Vi
6V1
6Vi
in no case will the rate charged be less than the basic discount rate plus 50 basis
points. The flexible rate is reestablished on the first business day of each
two-week reserve maintenance period. At the discretion of the Federal Reserve
Bank, the time period for which the basic discount rate is applied may be
shortened.
4. For earlier data, see the following publications of the Board of Governors:
Banking and Monetary Statistics, 1914-1941, and 1941-1970-, Annual Statistical
Digest, 1970-1979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term
adjustment credit borrowings by institutions with deposits of $500 million or more
that had borrowed in successive weeks or in more than four weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980 through May 7,
1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was
adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and
to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective
Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981 the
formula for applying the surcharge was changed from a calendar quarter to a
moving 13-week period. The surcharge was eliminated on Nov. 17, 1981.
A8
DomesticNonfinancialStatistics • September 1989
1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1
Percent of deposits
Type of deposit, and
deposit interval
Depository institution requirements
after implementation of the
Monetary Control Act
Effective date
Net transaction
accounts3'
$0 million-$41.5 million
More than $41.5 million . . .
12/20/88
12/20/88
Nonpersonal time deposits5
By original maturity
Less than 1 Vi years
1 Vi years or more
10/6/83
10/6/83
Eurocurrency
All types
liabilities
1. Reserve requirements in effect on Dec. 31, 1988. Required reserves must be
held in the form of deposits with Federal Reserve Banks or vault cash. Nonmembers may maintain reserve balances with a Federal Reserve Bank indirectly on a
pass-through basis with certain approved institutions. For previous reserve
requirements, see earlier editions of the Annual Report and of the FEDERAL
RESERVE BULLETIN. Under provisions of the Monetary Control Act, depository
institutions include commercial banks, mutual savings banks, savings and loan
associations, credit unions, agencies and branches of foreign banks, and Edge
corporations.
2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law
97-320) requires that $2 million of reservable liabilities (transaction accounts,
nonpersonal time deposits, and Eurocurrency liabilities) of each depository
institution be subject to a zero percent reserve requirement. The Board is to adjust
the amount of reservable liabilities subject to this zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage
increase in the total reservable liabilities of all depository institutions, measured
on an annual basis as of June 30. N o corresponding adjustment is to be made in
the event of a decrease. On Dec. 20, 1988, the exemption was raised from $3.2
million to $3.4 million. In determining the reserve requirements of depository
institutions, the exemption shall apply in the following order: (1) net NOW
accounts (NOW accounts less allowable deductions); (2) net other transaction
accounts; and (3) nonpersonal time deposits or Eurocurrency liabilities starting
with those with the highest reserve ratio. With respect to N O W accounts and
11/13/80
other transaction accounts, the exemption applies only to such accounts that
would be subject to a 3 percent reserve requirement.
3. Transaction accounts include all deposits on which the account holder is
permitted to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, and telephone and preauthorized transfers in excess of
three per month for the purpose of making payments to third persons or others.
However, MMDAs and similar accounts subject to the rules that permit no more
than six preauthorized, automatic, or other transfers per month, of which no more
than three can be checks, are not transaction accounts (such accounts are savings
deposits subject to time deposit reserve requirements).
4. The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement applies be modified
annually by 80 percent of the percentage increase in transaction accounts held by
all depository institutions, determined as of June 30 each year. Effective Dec. 20,
1988 for institutions reporting quarterly and Dec. 27, 1988 for institutions
reporting weekly, the amount was increased from $40.5 million to $41.5 million.
5. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which a beneficial interest is
held by a depositor that is not a natural person. Also included are certain
transferable time deposits held by natural persons and certain obligations issued
to depository institution offices located outside the United States. For details, see
section 204.2 of Regulation D.
Policy Instruments
A9
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1
Millions of dollars
1989
1988
Type of transaction
1986
1987
1988
Nov.
Dec.
Mar.
Feb.
Jan.
Apr.
May
U . S . TREASURY SECURITIES
Outright transactions (excluding matched
transactions)
1
2
3
4
Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions
5
6
7
8
9
22,604
2,502
0
1,000
18,983
6,051
0
9,029
8,223
587
0
2,200
3,599
0
0
0
1,125
0
0
0
0
154
0
600
0
3,688
0
1,600
0
0
0
0
3,077
0
0
0
311
321
0
1,200
Others within 1 year
Gross purchases
Gross sales
Maturity shift
Exchange
Redemptions
190
0
18,674
-20,180
0
3,659
300
21,504
-20,388
70
2,176
0
23,854
-24,588
0
0
0
5,264
-2,391
0
1,084
0
1,750
-1,703
0
0
0
620
-2,703
0
0
0
5,418
-2,308
0
0
0
2,646
-2,322
0
172
0
1,657
-110
0
0
0
2,863
-3,628
0
10
11
12
13
1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange
893
0
-17,058
16,985
10,231
452
-17,975
18,938
5,485
800
-17,720
22,515
0
0
-3,088
2,091
1,824
0
-1,750
1,703
0
3
-541
2,492
0
225
-5,319
2,008
0
0
-2,646
2,322
1,436
0
-1,532
0
0
75
-2,036
3,328
14
15
16
17
5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
236
0
-1,620
2,050
2,441
0
-3,529
950
1,579
175
-5,946
1,797
0
0
-2,145
300
562
0
0
0
0
20
-79
212
0
0
-100
200
0
0
0
0
287
0
-125
110
0
0
258
200
18
19
20
21
Over 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
158
0
0
1,150
1,858
0
0
500
1,398
0
-188
275
0
0
-31
0
432
0
0
0
0
0
0
0
0
0
0
100
0
0
0
0
284
0
0
0
0
0
-1,086
100
24,081
2,502
1,000
37,170
6,803
9,099
18,863
1,562
2,200
3,599
0
0
5,028
0
0
0
177
600
0
3,913
1,600
0
0
0
5,255
0
0
311
396
1,200
Matched transactions
25 Gross sales
26 Gross purchases
927,999
927,247
950,923
950,935
1,168,484
1,168,142
98,618
100,680
93,650
93,584
94,204
94,252
110,393
112,472
83,677
82,821
77,349
78,259
123,029
113,041
Repurchase
agreements1
27 Gross purchases
28 Gross sales
170,431
160,268
314,621
324,666
152,613
151,497
17,867
16,463
15,575
14,815
17,208
21,969
0
0
0
0
22,244
12,547
31,419
41,117
29,988
11,234
15,872
7,064
5,721
-5,489
-3,434
-856
15,863
-20,971
0
0
398
0
0
276
0
0
587
0
0
14
0
0
135
0
0
148
0
0
40
0
0
0
0
0
125
0
0
0
31,142
30,521
80,353
81,350
57,259
56,471
4,763
5,132
7,672
6,853
8,980
11,081
0
0
0
0
7,207
3,366
12,732
16,573
35 Net change in federal agency obligations
222
-1,274
198
-383
683
-2,249
-40
0
3,716
-3,841
36 Total net change in System Open Market
Account
30,212
9,961
16,070
6,681
6,404
-7,738
-3,474
-856
19,579
-24,812
All maturities
22 Gross purchases
23 Gross sales
24 Redemptions
29 Net change in U.S. government securities
FEDERAL AGENCY OBLIGATIONS
Outright transactions
30 Gross purchases
31 Gross sales
32 Redemptions
Repurchase
agreements2
33 Gross purchases
34 Gross sales
1. Sales, redemptions, and negative figures reduce holdings of the System Open
Market Account; all other figures increase such holdings. Details may not add to
totals because of rounding.
2. In July 1984 the Open Market Trading Desk discontinued accepting bankers
acceptances in repurchase agreements,
A10
DomesticNonfinancialStatistics • September 1989
1.18 FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements1
Millions of dollars
Wednesday
1989
Account
May 31
June 7
End of month
1989
June 14
June 21
June 28
Apr.
May
June
Consolidated condition statement
ASSETS
1 Gold certificate account
2 Special drawing rights certificate account
3 Coin
Loans
4
To depository institutions
Other
5
6 Acceptances held under repurchase agreements
Federal agency obligations
Bought outright
7
8
Held under repurchase agreements
U.S. Treasury securities
Bought outright
9
Bills
10
Notes
11
Bonds
12
Total bought outright 1
13
Held under repurchase agreements
14 Total U.S. Treasury securities
15 Total loans and securities
20 Total assets
11,060
8,518
424
11,060
8,518
436
11,061
8,518
449
11,062
8,518
449
11,061
5,518
466
11,060
8,518
432
11,063
8,518
445
2,033
0
0
2,082
0
0
2,384
0
0
832
0
0
1,759
0
0
1,952
0
0
2,033
0
0
840
0
0
6,654
0
6,654
0
6,654
0
6,654
0
6,654
0
6,654
3,841
6,654
0
6,655
0
100,799
92,322
30,414
223,535
0
223,535
101,439
92,322
30,414
224,175
0
224,175
104,918
92,322
30,414
227,654
0
227,654
107,426
92,322
30,414
230,162
0
230,162
108,326
92,322
30,414
231,062
0
231,062
111,997
92,497
30,314
234,808
9,698
244,506
100,799
92,322
30,414
223,535
0
223,535
109,031
92,322
30,414
231,767
0
231,767
232,222
232,911
236,692
237,648
239,475
256,953
232,222
239,263
10,442
761
8,137
765
7,872
766
7,621
767
6,740
767
8,294
761
10,442
761
6,550
767
13,656
7,966
14,831
8,035
15,250
8,279
18,322
9,894
18,956
10,982
10,911
9,843
13,656
7,966
19,213
10,001
285,057
16 Items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies 3
19 All other 4
11,060
8,518
432
284,681
288,873
294,280
296,949
303,807
285,057
295,816
LIABILITIES
21 Federal Reserve notes
Deposits
To depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other
229,372
230,023
229,912
229,235
229,666
225,336
229,372
230,847
22
23
24
25
33,553
5,288
429
524
34,643
5,207
229
302
38,896
5,281
293
242
30,788
19,822
203
267
34,061
19,244
287
327
37,968
22,952
352
481
33,553
5,288
429
524
37,381
12,153
275
228
26 Total deposits
39,794
40,381
44,712
51,080
53,919
61,753
39,794
50,040
8,378
3,212
6,493
3,136
6,171
3,382
5,981
3,305
5,402
3,258
7,749
3,990
8,378
3,212
6,751
3,272
280,756
280,033
284,177
289,601
292,245
298,828
280,756
290,911
2,142
2,081
78
2,143
2,107
398
2,143
2,112
441
2,145
2,112
422
2,145
2,112
447
2,135
2,112
732
2,142
2,081
78
2,146
2,117
649
285,057
284,681
288,873
294,280
296,949
303,807
285,057
295,816
234,667
234,064
232,171
227,567
233,119
236,761
234,667
362,000
27 Deferred credit items
28 Other liabilities and accrued dividends 5
29 Total liabilities
CAPITAL A C C O U N T S
30 Capital paid in
31 Surplus
32 Other capital accounts
33 Total liabilities and capital accounts
34 MEMO: Marketable U.S. Treasury securities held in
custody for foreign and international accounts ..
Federal Reserve note statement
35 Federal Reserve notes outstanding issued to bank
36
LESS: Held by bank
37
Federal Reserve notes, net
Collateral held against notes net:
38
Gold certificate account
39
Special drawing rights certificate account
40
Other eligible assets
41
U.S. Treasury and agency securities
271,562
42,190
229,372
271,888
41,865
230,023
272,540
42,628
229,912
273,067
43,832
229,235
273,315
43,649
229,666
270,007
44,671
225,336
271,562
42,190
229,372
272,983
42,135
230,847
11,060
8,518
0
209,794
11,060
8,518
0
210,445
11,060
8,518
0
210,334
11,061
8,518
0
209,656
11,062
8,518
0
210,086
11,061
5,518
0
208,757
11,060
8,518
0
209,794
11,063
8,518
0
211,266
42 Total collateral
229,372
230,023
229,912
229,235
229,666
225,336
229,372
230,847
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 Holdings1
Millions of dollars
Wednesday
1989
Type and maturity groupings
End of month
1989
May 31
June 7
June 14
June 21
June 28
Apr. 28
May 31
June 30
Within 15 days
16 days to 90 days
91 days to 1 year
2,033
1,940
93
0
1,995
1,774
222
0
2,256
2,026
230
0
939
835
104
0
991
926
65
0
2,454
2,402
52
0
2,033
1,940
93
0
1,495
1,339
156
0
5 Acceptances—Total
6
Within 15 days
16 days to 90 days
7
8
91 days to 1 year
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
223,535
4,691
49,365
76,876
52,786
13,511
26,306
224,175
11,241
47,575
72,755
52,786
13,511
26,306
227,653
7,236
52,378
75,435
52,786
13,511
26,306
230,162
11,704
50,669
75,185
52,786
13,511
26,306
231,062
12,757
50,726
74,975
52,786
13,511
26,306
228,643
7,183
53,969
76,037
51,664
12,781
27,009
223,535
4,691
49,365
76,876
52,786
13,511
26,306
231,767
8,812
56,198
74,546
52,393
13,512
26,306
6,654
347
473
1,324
3,352
969
189
6,654
48
807
1,295
3,346
969
189
6,654
29
778
1,295
3,371
992
189
6,654
151
656
1,295
3,371
992
189
6,654
152
642
1,289
3,386
996
189
6,779
240
726
1,279
3,357
988
189
6,654
347
473
1,324
3,352
969
189
6,654
152
642
1,289
3,386
996
189
2
3
4
9 U.S. Treasury securities—Total
10 Within 15 days 2
11
16 days to 90 days
12 91 days to 1 year
13 Over 1 year to 5 years
14 Over 5 years to 10 years
15 Over 10 years
16 Federal agency obligations—Total
17 Within 15 days 2
18
16 days to 90 days
19 91 days to 1 year
20
Over 1 year to 5 years
21
Over 5 years to 10 years
22
Over 10 years
1. Components may not add to totals because of rounding.
2. Holdings under repurchase agreements are classified as maturing within 15
days in accordance with maximum maturity of the agreements.
A12
1.20
DomesticNonfinancialStatistics • September 1989
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS A N D M O N E T A R Y BASE1
Billions of dollars, averages of daily figures
1988
Item
1985
Dec.
1986
Dec.
1987
Dec.
1989
1988
Dec.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 2
1 Total reserves3
2
3
4
5
Nonborrowed reserves
Nonborrowed reserves plus extended credit 4
Required reserves
Monetary base
48.49
58.14
58.69
60.71
60.85
60.71
60.37
60.26
59.85
59.46
58.74
58.35
47.17
47.67
47.44
219.51
57.31
57.62
56.77
241.45
57.92
58.40
57.66
257.99
58.99
60.23
59.67
275.50
57.99
60.31
59.73
274.38
58.99
60.23
59.67
275.50
58.71
59.75
59.23
276.78
58.77
59.82
59.11
277.55
58.04
59.38
58.90
278.61
57.17
58.88
58.69
278.67
57.02
58.22
57.71
278.33
56.86
57.78
57.44
279.06
58.94
60.01
57.72
58.41
56.00
57.20
56.69
277.49
56.92
57.84
57.51
280.18
Not seasonally adjusted
6 Total reserves3
7
8
9
10
Nonborrowed reserves
Nonborrowed reserves plus extended credit 4
Required reserves
Monetary base
49.59
59.46
60.06
62.21
60.96
62.21
62.07
48.27
48.77
48.53
222.73
58.64
58.94
58.09
245.25
59.28
59.76
59.03
262.08
60.50
61.74
61.17
279.71
58.10
60.42
59.84
275.32
60.50
61.74
61.17
279.71
60.40
61.45
60.92
277.92
57.88
58.93
58.22
274.36
57.13
58.46
57.98
275.62
57.72
59.43
59.23
278.11
48.14
59.56
62.12
63.74
62.41
63.74
63.47
60.69
60.21
61.29
58.91
59.59
46.82
47.32
47.08
223.53
58.73
59.04
58.19
247.71
61.35
61.83
61.09
266.16
62.02
63.27
62.70
283.18
59.55
61.87
61.29
278.65
62.02
63.27
62.70
283.18
61.81
62.85
62.32
281.31
59.21
60.26
59.54
277.66
58.40
59.73
59.25
278.94
59.00
60.71
60.51
281.52
57.19
58.39
57.88
280.54
58.10
59.01
58.68
283.27
59.37
N O T ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 6
11 Total reserves3
12
13
14
15
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base
1. Latest monthly and biweekly figures are available from the Board's H.3(502)
statistical release. Historical data and estimates of the impact on required reserves
of changes in reserve requirements are available from the Monetary and Reserves
Projections Section. Division of Monetary Affairs. Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
2. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted from the actual series.
3. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash held during the lagged
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
4. Extended credit consists of borrowing at the discount window under
the terms and conditions established for the extended credit program to helpdepository institutions deal with sustained liquidity pressures. Because there isnot
the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
5. The monetary base not adjusted for discontinuities consists of total reserves
plus required clearing balances and adjustments to compensate for float at Federal
Reserve Banks and the currency component of the money stock plus, for institutions not having required reserve balances, the excess of current vault cash over
the amount applied to satisfy current reserve requirements. Currency and vault
cash figures are measured over the weekly computation period ending Monday.
The seasonally adjusted monetary base consists of seasonally adjusted total
reserves, which include excess reserves on a not seasonally adjusted basis, plus
the seasonally adjusted currency component of the money stock and the remaining items seasonally adjusted as a whole.
6. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated with
implementation of the Monetary Control Act or other regulatory changes to
reserve requirements.
Monetary and Credit Aggregates
A13
1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES 1
Billions of dollars, averages of daily figures
1989
1985
Dec.
1986
Dec.
1987
Dec.
1988
Dec.
Mar.
Apr.
May
June
773.4
3,072.9'
3,954.4 r
4,739.4
9,339.5
770.7
3,090.0
3,975.1
n.a.
n.a.
Seasonally adjusted
620.5
2,567.4
3,201.7
3,830.6
6,733.3
1 Ml
7 M2
M3
4 L
5 Debt
6
7
8
9
Ml components
Currency
Travelers checks 4
Demand deposits
Other checkable deposits
725.9
2,811.2
3,494.9
4,137.1
7,596.9
752.3
2,909.9
3,677.6
4,340.2
8,310.7
790.3
3,069.4
3,914.2r
4,674.9'
9,052.1
786.3
3,078.7
3,950. r
4,724. l r
9,229.4
783.2
3,081.3
3,958.l r
4,740.2'
9,283 .C
167.8
5.9
267.3
179.5
180.5
6.5
303.2
235.8
196.4
7.1
288.3
260.4
211.8
7.6
288.6
282.3
215.6
7.3
284.3
279.1
215.9
7.3
281.5
278.5
216.4
7.3
278.3'
271.5
217.4
7.2
275.1
271.0
1,946.9
634.3
2,085.3
683.7
2,157.7
767.6
2,279.2
844.8r
2,292.5'
871.3r
2,298.1
876.8r
2,299.4
881.6r
2,319.2
885.2
10
11
Nontransactions components
In M2
In M3 only 8
12
13
Savings deposits 9
Commercial Banks
Thrift institutions
125.0
176.6
155.8
215.2
178.5
237.8
192.5
238.8
188.6
232.2
185.6
227.3
182.5
222.4
181.5
220.7
14
15
Small-denomination time deposits 10
Commercial Banks
Thrift institutions
383.3
499.2
364.6
489.3
385.3
528.8
443.1
582.2
472.0
589.0
485.6
597.6
497.2
609.0'
502.3
617.7
16
17
Money market mutual funds
General purpose and broker-dealer
Institution-only
176.5
64.5
208.0
84.4
221.1
89.6
239.4
87.6
256.0
87.6
260.2
87.7
259.9
91.6
266.2
95.1
18
19
Large-denomination time deposits 11
Commercial Banks 12
Thrift institutions
285.1
151.5
288.8
150.1
325.4
162.0
364.9
172.9
385.5
173.4
392.6
175.2
395.7
176.3
3%. 6
176.6
20
21
Debt components
Federal debt
Nonfederal debt
1,585.3
5,147.9
1,805.8
5,791.1
1,957.5
6,353.1
2,114.0
6,938.1
2,162.6
7,066.7
2,171.8
7,111-3r
2,177.0
7,162.6
n.a.
n.a.
Not seasonally adjusted
633.5
2,576.2
3,213.3
3,843.7
6,723.5
27
73
74
75
26
Ml
M2
M3
L
Debt
77
7,8
29
30
M l components
Currency 3
Travelers checks 4
Demand deposits 5
Other checkable deposits
31
32
Nontransactions components
M2T...„
M3 only 8
33
34
Money market deposit accounts
Commercial Banks
Thrift institutions
740.4
2,821.1
3,507.4
4,152.0
7,581.1
766.4
2,918.7
3,688.5
4,354.5
8,292.8
804.4
3,077.1
3,924.0r
4,688.5'
9,037.5
775.1
3,072.1
3,944.8''
4,720.7'
9,190.2
791.4'
3,092.9
3,963.6'
4,742.0'
9,246.6'
767.2
3,063.4'
3,944.3'
4,728.1
9,306.2
774.3
3,092.8
3,975.7
n.a.
n.a.
170.2
5.5
276.9
180.9
183.0
6.0
314.0
237.4
199.3
6.5
298.6
262.0
214.9
6.9
298.8
283.7
213.9
7.0
275.8
278.3
215.1
7.0
283.3
286.0
216.6
7.1
273.4'
270.2
218.5
7.5
276.5
271.7
1,942.7
637.1
2,080.7
686.3
2,152.3
769.8
2,272.8
846.9'
2,297.0
872.7'
2,301.5
870.7r
2,296.2'
2,318.5
883.0
332.8
180.7
379.6
192.9
358.8
167.5
352.5
150.3
340.1
140.2
336.3
135.0
327.1
129.9
328.3
128.6
sso^
9
35
36
Savings deposits
Commercial Banks
Thrift institutions
123.7
174.8
154.2
212.7
176.6
234.8
190.3
235.6
187.8
230.7
186.2
227.9
183.7
223.8
183.3
223.5
37
38
Small-denomination time deposits 10
Commercial Banks
Thrift institutions
384.0
499.9
365.3
489.8
386.1
529.1
444.1
582.4
473.0
592.0
483.6
598.6'
493.5
605.8
500.0
613.8
39
40
Money market mutual funds
General purpose and broker-dealer
Institution-only
176.5
64.5
208.0
84.4
221.1
89.6
239.4
87.6
256.0
87.6
260.2
87.7
259.9
91.6
266.2
95.1
41
42
Large-denomination time deposits 11
Commercial Banks 12
Thrift institutions
285.4
151.8
289.1
150.7
325.8
163.0
365.6
174.0
387.0
173.2
390.5
173.7
394.5'
175.2
395.1
174.7
43
44
Debt components
Federal debt
Nonfederal debt
1,583.7
5,139.8
1,803.9
5,777.2
1,955.6
6,337.2
2,111.8
6,925.7
2,149.0
7,041.2
2,155.1
7,091.5'
2,159.5
7,146.7
For notes see following page.
n.a.
n.a.
A14
DomesticNonfinancialStatistics • September 1989
NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508)
release. Historical data are available from the Monetary and Reserves Projection
section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.
2. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of depository institutions; (2) travelers checks of nonbank issuers; (3) demand
deposits at all commercial banks other than those due to depository institutions,
the U.S. government, and foreign banks and official institutions less cash items in
the process of collection and Federal Reserve float; and (4) other checkable
deposits (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union
share draft accounts, and demand deposits at thrift institutions.
M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S. banks worldwide, MMDAs, savings and smalldenomination time deposits (time deposits—including retail RPs—in amounts of
less than $100,000), and balances in both taxable and tax-exempt general purpose
and broker-dealer money market mutual funds. Excludes individual retirement
accounts (IRA) and Keogh balances at depository institutions and money market
funds. Also excludes all balances held by U.S. commercial banks, money market
funds (general purpose and broker-dealer), foreign governments and commercial
banks, and the U.S. government.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U.S. banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted
is the estimated amount of overnight RPs and Eurodollars held by institution-only
money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are based on monthly averages.
3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of
depository institutions.
4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in
demand deposits.
5. Demand deposits at commercial banks and foreign-related institutions other
than those due to depository institutions, the U.S. government, and foreign banks
and official institutions less cash items in the process of collection and Federal
Reserve float.
6. Consists of NOW and ATS balances at all depository institutions, credit
union share draft balances, and demand deposits at thrift institutions.
7. Sum of overnight RPs and overnight Eurodollars, money market fund
balances (general purpose and broker-dealer), MMDAs, and savings and small
time deposits.
8. Sum of large time deposits, term RPs, and term Eurodollars of U.S.
residents, money market fund balances (institution-only), less the estimated
amount of overnight RPs and Eurodollars held by institution-only money market
funds.
9. Savings deposits exclude MMDAs.
10. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All individual retirement accounts (IRA) and
Keogh accounts at commercial banks and thrifts are subtracted from small time
deposits.
11. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
12. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
Monetary and Credit Aggregates
1.22
A15
B A N K DEBITS A N D DEPOSIT TURNOVER1
Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates.
1988
Bank group, or type of customer
1986
1987
Nov.
Jan.
Dec.
Feb.
Mar.
Apr.
Seasonally adjusted
DEBITS TO
Demand deposits
1 All insured banks
Major New York City banks
2
3
Other banks
4 ATS-NOW accounts 4
5 Savings deposits
1989
1988
188,346.0
91,397.3
96,948.8
2,182.5
403.5
217,116.2
104,496.3
112,619.8
2,402.7
526.5
226,888.4
107,547.3
119,341.2
2,757.7
583.0
238,497.5
112,071.8
126,425.7
2,897.2
574.9
245,617.5
111,115.5
134,502.0
3,020.8
640.7
252,226.7
109,875.9
142,350.8
2,976.2
647.4
255,774.3
121,770.1
134,004.2
3,054.9
649.2
249,088.3
111,387.4
137,700.9
3,264.9
675.2
245,230.1
107,808.9
137,421.3
2,986.4
585.5
556.5
2,498.2
321.2
15.6
3.0
612.1
2,670.6
357.0
13.8
3.1
641.2
2,903.5
376.8
14.7
3.1
676.6
3,034.6
400.6
15.1
3.1
698.5
3,140.7
425.3
15.8
3.4
716.3
3,113.7
449.3
15.6
3.5
734.4
3,618.0
425.9
16.0
3.5
721.0
3,393.0
440.4
17.1
3.6
697.5
3,092.2
433.9
15.7
3.2
DEPOSIT TURNOVER
6
7
8
9
10
Demand deposits 3
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 4
Savings deposits
Not seasonally adjusted
DEBITS TO
Demand deposits
11 All insured banks
12 Major New York City banks
13 Other banks
14 ATS-NOW accounts 4
15 MMDA°
16 Savings deposits
188,506.7
91,500.1
97,006.7
2,184.6
1,609.4
404.1
217,125.1
104,518.8
112,606.2
2,404.8
1,954.2
526.8
556.7
2,499.1
321.2
15.6
4.5
3.0
612.3
2,674.9
356.9
13.8
5.3
3.1
227,010.7
107,565.0"
119,445.7
2,754.7
2,430.1
578.0
228,743.0
108,689.1
120,053.9
2,714.1
2,539.7
523.7
258,119.4
117,470.7
140,648.8
3,163.8
2,940.5
655.6
257,649.6
112,480.2
145,169.4
3,245.1
3,072.5
668.7
231,347.8
110,047.2
121,300.6
2,762.1
2,622.4
573.3
264,581.6
120,202.2
144,379.4
3,228.6
2,636.7
649.6
238,265.6
105,461.7
132,803.9
3,205.2
2,700.2
649.6
643.3
2,998.6
375.9
14.3
7.3
2.8
699.1
3,058.1
425.2
16.3
8.4
3.5
713.7
2,998.6
448.7
16.7
8.9
3.6
683.1
3,255.7
397.8
14.5
7.8
3.1
782.3
3,603.3
473.6
16.9
7.8
3.5
676.6
3,017.6
418.7
16.3
8.1
3.5
DEPOSIT TURNOVER
17
18
19
20
21
22
Demand deposits 3
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 4
MMDA
Savings deposits
641.7
2,901.4
377.1
14.7
6.9
3.1
1. Historical tables containing revised data for earlier periods may be obtained
from the Monetary and Reserves Projections Section, Division of Monetary
Affairs, Board of Governors of the Federal Reserve System, Washington, D.C.
20551.
These data also appear on the Board's G.6 (406) release. For address, see inside
front cover.
2. Annual averages of monthly figures.
3. Represents accounts of individuals, partnerships, and corporations and
of states and political subdivisions.
4. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts authorized for automatic transfer to demand deposits (ATS). ATS data are
available beginning December 1978.
5. Excludes ATS and NOW accounts, MMDA and special club accounts, such
as Christmas and vacation clubs.
6. Money market deposit accounts.
A16
DomesticNonfinancialStatistics • September 1989
1.23 LOANS AND SECURITIES
All Commercial Banks1
Billions of dollars; averages of Wednesday figures
1988'
1989'
Category
July
Aug.
Sept.
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
5
Commercial and industrial . . . . .
6
Bankers acceptances held . . .
7
Other commercial and
industrial
8
U.S. addressees 4
9
Non-U.S. addressees
10 Real estate
11
Individual
12 Security
13 Nonbank financial
institutions
14 Agricultural
15
State and political
subdivisions
16 Foreign banks
17 Foreign official institutions
18 Lease financing receivables
19 All other loans
2,362.7
2,377.6
2,381.5
2,401.4
2,410.2
2,417.2
2,422.8
2,451.9
2,464.9
2,470.9
2,486.3
2,496.8
349.6
196.8
1,816.3
595.0
4.3
350.9
196.5
1,830.1
597.4
4.3
353.1
195.2
1,833.2
598.1
4.1
355.6
196.8
1,848.9
601.6
4.1
358.8
195.9
1,855.6
601.8
4.3
361.4
194.0
1,861.9
601.9
4.1
360.4
189.6
1,872.9
606.6
4.4
361.8
190.4
1,899.7
619.0
4.2
368.8
189.7
1,906.5
617.8
4.0
370.7
187.2
1,913.1
620.6
4.1
373.5
186.4
1,926.5
626.3
4.2
373.8
185.7
1,937.3
624.9
4.2
590.7
583.7
6.9
635.8
345.6
38.9
593.2
586.5
6.7
643.0
347.7
39.6
594.0
587.2
6.9
650.3
350.2
36.5
597.5
590.9
6.5
659.8
351.6
38.5
597.4
591.3
6.1
665.3
353.0
38.2
597.8
591.8
5.9
672.0
355.5
38.5
602.2
596.5
5.7
678.9
357.9
37.7
614.8
609.9
4.9
685.6
358.9
44.7
613.7
608.3
5.4
691.8
360.6
43.6
616.6
611.7
4.9
699.5
362.9
40.0
622.1
616.6
5.5
705.5
365.4
38.0
620.7
615.2
5.5
712.0
366.0
41.1
31.1
29.6
31.1
29.6
30.7
29.6
30.4
29.8
30.2
30.3
30.0
30.7
30.3
30.7
30.6
30.7
29.7
30.7
29.2
30.4
29.0
30.3
30.5
30.4
48.8
8.1
5.0
28.0
50.3
48.2
8.0
5.1
28.1
52.2
48.0
7.2
5.0
28.5
49.1
48.5
7.6
4.8
28.9
47.5
47.7
8.1
4.9
29.1
47.1
46.8
7.6
4.9
29.2
44.9
44.4
7.8
4.8
29.4
44.4
44.5
8.5
4.8
29.6
42.8
44.6
8.1
4.8
29.6
45.3
44.6
8.3
4.8
29.8
43.0
44.6
9.3
4.8
30.0
43.2
44.5
9.2
4.7
29.9
43.9
Not seasonally adjusted
20 Total loans and securities
2
21 U.S. government securities
22 Other securities
23 Total loans and leases
24
Commercial and industrial . . . . .
25
Bankers acceptances held . . .
26
Other commercial and
industrial
27
U.S. addressees
28
Non-U.S. addressees 4
29
Real estate
30
Individual
31
Security
32
Nonbank financial
institutions
33
Agricultural
34
State and political
subdivisions
35
Foreign banks
36
Foreign official institutions
37
Lease financing receivables
38
All other loans
2,356.7
2,370.5
2,378.9
2,392.6
2,409.2
2,429.6
2,430.7
2,453.6
2,462.8
2,473.9
2,487.4
2,500.9
348.2
196.3
1,812.2
594.0
4.4
351.2
196.8
1,822.5
593.1
4.3
352.9
195.0
1,831.0
593.3
4.2
352.6
195.6
1,844.4
597.0
4.2
357.5
196.0
1,855.7
599.3
4.3
361.6
193.7
1,874.2
605.0
4.1
362.2
191.7
1,876.9
605.8
4.1
366.3
190.1
1,897.2
618.3
4.1
370.2
188.9
1,903.7
621.1
4.0
370.9
187.2
1,915.9
625.2
4.0
372.6
186.8
1,928.0
630.0
4.3
372.6
186.0
1,942.4
629.0
4.4
589.6
582.7
6.9
636.2
344.6
38.6
588.8
582.2
6.6
644.2
347.8
38.3
589.1
582.5
6.6
651.9
351.8
35.1
592.8
586.6
6.2
660.7
352.6
36.9
595.0
588.9
6.1
667.2
354.1
37.6
600.9
594.8
6.1
673.3
359.4
38.9
601.7
596.4
5.3
678.9
360.7
38.2
614.2
608.9
5.3
683.6
358.2
43.8
617.1
611.7
5.3
689.2
357.7
44.1
621.3
615.9
5.3
697.4
360.3
42.0
625.8
620.2
5.6
704.1
363.2
38.9
624.6
619.0
5.6
712.1
364.5
42.7
31.1
30.3
31.0
30.4
30.7
30.5
30.1
30.6
30.3
30.5
31.1
30.5
30.7
30.1
30.0
29.8
29.1
29.6
29.1
29.6
29.1
30.1
30.7
30.8
48.2
8.3
5.0
27.9
48.2
47.7
7.9
5.1
28.0
48.9
47.3
7.4
5.0
28.4
49.6
48.0
7.6
4.8
28.7
47.3
47.1
8.2
4.9
28.9
47.6
46.6
7.9
4.9
29.4
47.3
45.8
8.0
4.8
29.7
44.1
45.5
8.5
4.8
29.7
45.0
45.1
8.0
4.8
29.7
45.5
44.8
8.0
4.8
29.8
44.8
44.5
9.0
4.8
30.0
44.3
44.2
9.1
4.7
30.0
44.6
1. Data have been revised because of benchmarking beginning January 1984.
These data also appear in the Board's G.7 (407) release. For address, see inside
front cover.
2. Excludes loans to commercial banks in the United States.
3. Includes nonfinancial commercial paper held,
4. United States includes the 50 states and the District of Columbia.
Commercial Banking Institutions
A17
1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS 1
Monthly averages, billions of dollars
1989
Source
July
Seasonally adjusted
1 Total nondeposit funds
2 Net balances due to related foreign offices 3 ...
3 Borrowings from other than commercial banks
in United States 4
4
Domestically chartered banks
Foreign-related banks
5
Not seasonally adjusted
6 Total nondeposit funds
7 Net balances due to related foreign offices . . .
8
Domestically chartered banks
Foreign-related banks
9
10 Borrowings from other than commercial banks
in United States 4
11 Domestically chartered banks
12
Federal funds and security RP
borrowings
13
Other 6
14
Foreign-related banks
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
215.2
13.9
219.4
19.2
210.0
8.2
210.9
5.6
217.3
9.3
214.6
6.7
207.4
8.0
210.5
10.7
211.2r
8.r
204.3'
2.9
207.1
-.1'
223.0
8.0
201.3
166.9
34.4
200.3
165.8
34.5
201.8
165.8
36.C
205.3
167.1
38.2
208.0
168.7
39.3
207.9
168.9
39.0
199.4
162.4
37.0'
199.9
160.7
39.2
203.1'
165.1
38.0
201.4'
162.8
38.6'
207.2'
166.5
40.7'
215.0
175.0
40.0
210.8
10.8
-14.1
24.9
218.3
18.7
-7.3
26.0
206.6r
9.2
-15.7
24.9
204.9'
5.2
-20.5
25.7
214.1
10.3
-19.2
29.5
209.0
9.2
-20.7
29.9
206.5
7.7
-20.5
28.2
215.3
10.4
-17.9
28.3
216.8'
7.0
-19.8
26.9
207.0'
.8
-23.0'
23.9
214.7
2.6
-22.1'
24.6
226.0
8.1
-18.5
26.6
199.9
165.0
199.6
165.3
197.3
162.1
199.7r
162.9
203.7
167.4
199.8
162.9
198.9
160.8
204.9
164.4
209.7
170.2
206.2'
166.7
212.1
171.0
217.9
176.3
159.6
5.4
34.9
160.3
5.0
34.2
157.6
4.4
35.3
158.8
4.1
36.8
162.8
4.6
36.3
159.3
3.5
37.0
157.4
3.4
38.1
161.2
3.2
40.5
166.7
3.5
39.5
162.4
4.3
39.5'
167.3
3.7
41.1'
172.9
3.4
41.6
408.4
405.9
414.6
415.1
419.7
421.7
423.2
424.7
424.5
425.6
429.2
429.8
434.9
434.5
440.3
440.2
446.6
448.2'
452.7
450.6
456.7'
455.5
458.7
457.2
21.3
22.0
17.1
11.9
23.5
24.6
27.2
27.7
23.0
16.3
24.9
22.9
20.3
25.0
20.3
25.9
20.3
18.1
20.9
20.2
27.1
34.3
27.3
26.2
MEMO
Gross large time deposits
Seasonally adjusted
Not seasonally adjusted
U.S. Treasury demand balances at commercial
banks 8
17 Seasonally adjusted
18 Not seasonally adjusted
15
16
1. Commercial banks are those in the 50 states and the District of Columbia
with national or state charters plus agencies and branches of foreign banks, New
York investment companies majority owned by foreign banks, and Edge Act
corporations owned by domestically chartered and foreign banks.
These data also appear in the Board's G.10 (411) release. For address, see
inside front cover.
2. Includes federal funds, RPs, and other borrowing from nonbanks and net
balances due to related foreign offices.
3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and
U.S. branches and agencies of foreign banks with related foreign offices plus net
positions with own IBFs.
4. Other borrowings are borrowings through any instrument, such as a promissory note or due bill, given for the purpose of borrowing money for the banking
business. This includes borrowings from Federal Reserve Banks and from foreign
banks, term federal funds, loan RPs, and sales of participations in pooled loans.
5. Based on daily average data reported weekly by approximately 120 large
banks and quarterly or annual data reported by other banks.
6. Figures are partly daily averages and partly averages of Wednesday data.
7. Time deposits in denominations of $100,000 or more. Estimated averages of
daily data.
8. U.S. Treasury demand deposits and Treasury tax-and-loan notes at commercial banks. Averages of daily data.
A18
DomesticNonfinancialStatistics • September 1989
1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS
Last-Wednesday-of-Month Series1
Billions of dollars
1988r
1989r
Account
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
2.535.1
526.4
335.1
191.3
22.7
1,986.0
158.8
1.827.2
591.9
648.0
350.1
237.2
2.535.6
526.8
336.4
190.4
21.2
1,987.5
154.9
1.832.7
593.3
654.7
352.7
232.0
2.551.6
524.8
334.1
190.7
24.9
2,002.0
161.3
1.840.7
595.0
2,601.6
2.587.0
533.5
347.3
182.0
21.5
2.032.1
159.9
1.872.2
604.6
679.7
360.8
227.0
2,068.0
173.2
1,894.9
617.6
684.1
358.3
234.8
2,623.0
538.3
356.6
181.7
17.8
2,066.8
150.7
1,916.2
627.3
699.4
361.8
227.7
2,660.7
541.6
362.2
179.4
19.2
2,048.9
165.7
1,883.2
608.8
676.3
361.4
236.6
2.627.1
539.1
355.5
183.6
21.8
2.066.2
154.9
1,911.3
622.9
692.6
358.1
237.7
2.659.8
541.1
359.1
186.2
2,624.0
535.8
351.3
184.5
353.3
230.6
2,591.6
532.9
341.5
191.4
24.8
2,033.9
170.3
1.863.6
601.3
669.6
355.3
237.5
19.2
2.099.5
160.5
1,939.0
631.1
706.7
363.8
237.4
2,100.9
155.0
1,945.9
628.3
715.1
366.0
236.6
223.3
33.1
26.5
79.7
216.6
31.1
26.2
76.3
209.9
31.7
26.3
72.9
237.5
33.8
28.7
89.8
246.3
34.5
30.3
92.3
216.1
31.5
27.5
76.4
227.4
27.7
26.6
89.1
211.5
30.9
26.8
75.9
215.8
33.4
26.9
78.8
248.3
27.8
27.9
107.6
214.2
27.9
27.6
78.7
31.9
52.1
29.8
53.2
29.4
49.6
32.4
52.8
34.4
54.8
28.7
52.0
33.3
50.7
28.8
49.0
28.5
48.3
34.9
50.2
29.6
50.5
A L L COMMERCIAL BANKING
INSTITUTIONS 2
1 Loans and securities
2
Investment securities
3
U.S. government securities
4
Other
5
Trading account assets
6
Total loans
7
Interbank loans
8
Loans excluding interbank
9
Commercial and industrial
10
Real estate
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
19 Other assets
661.8
533.5
345.3
188.2
20.1
18.2
189.2
194.5
200.3
200.7
200.0
194.6
191.4
194.1
200.7
206.8
198.7
20 Total assets/total liabilities and capital...
2,947.6
2.946.7
2.961.8
3.029.7
3,047.9
2,997.8
3,042.8
3,032.7
3.039.5
3.114.9
3,073.6
21
22
23
24
25
26
27
2,077.4
609.9
542.3
925.3
451.0
227.2
191.9
2.062.8
588.3
536.6
937.9
471.8
220.8
191.4
2,072.2
587.8
537.8
946.7
482.6
214.5
192.5
2.125.8
628.6
541.1
956.1
479.0
229.0
195.9
2,145.7
642.7
535.6
967.5
473.1
233.7
195.3
2,097.1
586.6
528.8
981.7
493.6
209.1
198.0
2,125.2
602.6
527.3
995.3
502.9
216.5
198.2
2,123.7
583.2
523.2
1,017.3
483.6
223.9
201.4
2,134.2
594.5
512.0
1.027.6
486.7
217.4
201.2
2.182.6
628.5
509.7
1,044.3
510.6
203.2
2,138.2
580.5
507.4
1,050.2
512.7
218.4
204.4
352.0
352.6
354.0
361.0
359.4
364.4
366.2
372.1
369.5
372.3
374.4
197.1
195.4
195.7
196.7
193.4
190.5
189.7
188.8
186.6
188.0
185.4
2,340.9
499.9
323.3
176.6
22.7
1,818.4
129.9
1,688.4
491.2
628.5
349.8
219.0
2.339.8
501.7
325.0
176.7
2,389.8
507.1
329.9
177.1
24.8
1,858.0
139.7
1,718.3
498.7
647.7
354.9
217.0
2,391.9
507.2
333.2
174.0
19.2
1.865.4
133.1
1,732.3
500.6
654.3
361.1
216.3
2.385.1
507.0
334.5
172.6
21.5
1.856.6
131.4
1.725.2
498.9
657.7
360.5
208.1
2,405.9
509.0
338.1
171.0
2,407.8
513.1
342.7
170.4
20.1
21.8
1,876.8
138.9
1,737.8
503.4
661.7
358.0
214.7
1.872.8
122.3
1,750.5
506.1
669.8
357.7
216.9
2,407.8
513.8
344.1
169.7
17.8
1,876.2
120.2
1,756.0
511.3
676.0
361.4
207.3
2,446.0
516.1
345.9
170.2
19.2
1,910.6
131.5
1,779.2
515.5
683.2
363.5
217.0
2,439.9
517.3
349.5
167.8
1.816.9
126.2
1,690.7
490.2
634.8
352.3
213.3
2,353.9
499.3
322.8
176.5
24.9
1,829.8
131.3
1,698.5
492.7
641.3
353.0
211.6
203.6
31.4
26.4
79.4
194.1
29.0
26.1
75.9
190.2
29.9
26.2
72.2
216.6
32.6
28.6
89.0
223.1
33.1
30.3
91.4
193.5
30.1
27.4
75.6
206.4
26.6
26.6
191.4
29.5
88.1
75.1
195.3
30.7
26.8
77.9
227.0
26.7
27.9
106.6
192.3
26.6
27.6
77.7
30.2
36.1
27.7
35.3
27.4
34.4
30.5
35.8
32.4
35.9
26.8
33.6
31.2
33.9
26.6
33.4
26.8
33.1
32.9
33.0
27.5
32.9
132.2
135.6
128.1
129.6
130.6
134.6
133.6
131.6
49 Total assets/liabilities and capital
2,668.6
2,661.3
2,674.5
2,738.6
2.750.5
2.706.7
2,741.8
2.729.9
2,737.7
2,806.6
2,763.9
50
51
52
53
54
55
56
2,011.5
1,995.7
579.5
534.1
882.1
359.5
2,056.3
618.7
538.6
899.0
366.1
123.8
192.4
2,073.0
632.9
533.1
907.0
363.7
187.8
2,004.0
578.2
535.2
890.7
365.2
116.3
189.0
191.8
2,026.1
577.4
526.4
922.3
377.1
109.0
194.5
2,052.7
593.5
524.8
934.4
378.7
115.8
194.6
2,047.4
574.1
520.7
952.6
362.8
121.7
197.9
2,056.2
584.8
509.4
961.9
368.2
115.6
197.7
2,103.0
618.7
507.1
977.2
383.0
120.9
199.7
2,058.8
571.2
504.8
982.9
387.3
116.9
200.8
37.5
597.3
38.5
602.7
39.7
608.0
40.1
614.2
40.7
617.0
41.7
620.0
42.5
627.3
43.4
632.6
44.3
638.9
45.3
646.2
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
218.6
MEMO
28 U.S. government securities (including
trading account)
29 Other securities (including trading
account)
DOMESTICALLY CHARTERED
COMMERCIAL BANKS 3
30 Loans and securities
31
Investment securities
32
U.S. government securities
33
Other
34
Trading account assets
35
Total loans
36
Interbank loans
37
Loans excluding interbank
38
Commercial and industrial
39
Real estate
40
Individual
41
All other
42 Total cash assets
43
Reserves with Federal Reserve Banks.
44
Cash in vault
45
Cash items in process of collection . .
46
Demand balances at U.S. depository
institutions
47
Other cash assets
48 Other assets
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
21.2
127.3
601.2
539.8
870.5
345.6
123.0
188.4
118.2
122.0
26.8
18.2
1,904.5
119.3
1,785.1
511.6
691.6
365.6
216.3
MEMO
57 Real estate loans, revolving
58 Real estate loans, other
36.4
592.1
1. Data have been revised because of benchmarking beginning January 1984.
Back data are available from the Banking and Monetary Statistics section, Board
of Governors of the Federal Reserve System, Washington, D.C., 20551. These
data also appear in the Board's weekly H.8 (510) release.
Figures are partly estimated. They include all bank-premises subsidiaries and
other significant majority-owned domestic subsidiaries. Loan and securities data
for domestically chartered commercial banks are estimates for the last Wednesday of the month based on a sample of weekly reporting banks and quarter-end
condition report data. Data for other banking institutions are estimates made for
the last Wednesday of the month based on a weekly reporting sample of
foreign-related institutions and quarter-end condition reports.
2. Commercial banking institutions include insured domestically chartered
commercial banks, branches and agencies of foreign banks, Edge Act and
Agreement corporations, and New York State foreign investment corporations.
3. Insured domestically chartered commercial banks include all member banks
and insured nonmember banks.
Weekly Reporting Commercial Banks
A19
1.26 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS 1
Millions of dollars, Wednesday figures
1989
Account
May 3
1 Cash and balances due from depository institutions
2 Total loans, leases, and securities, net
3 U.S. Treasury and government agency
4 Trading account
5 Investment account
6 Mortgage-backed securities
All other maturing in
7
One year or less
Over one through five years
8
9
Over five years
10 Other securities
11 Trading account
12 Investment account
13
States and political subdivisions, by maturity
14
One year or less
15
Over one year
16
Other bonds, corporate stocks, and securities
17 Other trading account assets
May 10
May 17
May 24
May 31
June 7
114,789
101,145
111,852
99,936
126,800
103,762
1,202,577 1,187,776 1,201,383 1,196,428 1,213,512 1,201,589
135,673'
135,409'
138,362'
139,975'
137,22C
137,634
13,912
15,571
15,202
13,280
13,216
13,548
121,760'
122,13c
122,79C
124,773'
124,003'
124,086
51,250'
51,28C
51,563'
53,727'
53,763'
53,922
21,232'
41,73c
7,549'
71,672'
1,093
70,579'
44,501
5,031'
39,471'
26,078'
3,936
21,208
41,942
7,699'
71,774'
1,046
70,728'
44,440
4,974
39,467
26,288'
3,989
20,790
42,462
7,975'
71,731'
834
70,897'
44,433
4,956
39,477
26,464'
4,090
20,547
42,391
8,108'
72,079'
923
71,156'
44,439
4,%1
39,478
26,717'
4,153
21,031
41,184
8,026'
72,67C
1,138
71,533'
44,473
5,051
39,422
27.06C
4,829
21,233
41,040
7,890
72,054
842
71,211
44,216
4,981
39,235
26,9%
5,232
69
78,96C
67,192'
71,778'
66,895'
77,178'
68,424
Federal funds sold 4
54,801
45,932
48,988
42,626
51,929
To commercial banks
42,728
15,361
16,951
15,901
16,466
18,223
18,593
To nonbank brokers and dealers in securities
7,208'
5,898'
6,889'
7,802'
7,026'
7,102
To others
950,569'
947,699'
953,754'
951.67C
960,00C
956,751
Other loans and leases, gross
923,094'
Other loans, gross
925,968'
929,1%'
927,056'
935,392'
932,189
316,794'
317,898'
316,902'
316,763'
318,081'
317,247
Commercial and industrial
1,806
1,681
1,748
Bankers acceptances and commercial paper
1,740
1,978
1,840
315,221'
316,158'
314,988'
315,014'
316,103'
315,407
All other
314,220'
313,088'
313,316'
313,001'
314,144'
U.S. addressees
313,473
1,901
1,905
2,014
1,937
1,959
1,933
Non-U.S. addressees
323,332'
324,717'
Real estate loans
322,338'
324,93C
325,578'
326,386
24,113
24,217
24,314
Revolving, home equity
23,942
24,423
24,534
299,219'
298,3%'
300,50C
300,616'
301,155'
301,852
All other
169,193
169,142
169,252
169,451
169,681
169,169
To individuals for personal expenditures
44,155
44,375
46,047
45,082
To depository and financial institutions
47,523
46,786
20,180
21,438
21,005
Commercial banks in the United States
20,230
21,350
20,715
4,194
3,641
3,910
4,122
4,783
4,749
Banks in foreign countries
20,284
20,001
20,698
19,955
21,390
21,322
Nonbank depository and other financial institutions ..
13,561
13,654
14,940
14,243
15,608
14,259
For purchasing and carrying securities
5,592
5,581
5,688
5,672
5,686
5,721
To finance agricultural production
27,375
27,264
27,233
27,158
27,144
27,119
To states and political subdivisions
1,929
1,887
2,119
1,840
1,981
To foreign governments and official institutions
1,969
22,602'
21,103'
22,995'
22,376'
24,25C
23,522
All other
24,604
24,558
24,615
24,600
24,608
24,562
Lease financing receivables
4,898
4,938
4,948
4,960
4,920
4,932
LESS: Unearned income
33,337
33,348
33,384
33,465
Loan and lease reserve
33,383
33,574
912,334'
909,412'
915,422'
913,327'
921,615'
918,245
Other loans and leases, net
132,814'
131,254'
132,23C
129,339
131,337
131,974
All other assets
1,449,595' 1,421,734' 1,444,489' 1,425,703 1,471,648 1,437,324
Total assets
229,729
213,972
222,228
209,927
244,114
Demand deposits
219,785
172,058
179,074
168,217
177,649
189,983
175,662
Individuals, partnerships, and corporations
5,674
5,744
5,454
7,860
5,894
5,420
States and political subdivisions
2,886
1,645
3,435
2,678
U.S. government
6,491
3,373
21,154
19,076
20,634
18,504
25,9%
19,292
Depository institutions in the United States
6,134
5,707
5,801
8,515
Banks in foreign countries
6,048
7,206
Foreign governments and official institutions
672
816
1,039
622
669
954
9,769
7,755
8,292
7,646
10,378
7,879
Certified and officers' checks
73,950
73,531
72,482
74,271
Transaction balances other than demand deposits
76,512
75,6%
670,331'
673,545'
Nontransaction balances
669,138'
673,368
673,0%
677,506
628,66C
631,356'
631,507
627,810'
631,788
636,409
Individuals, partnerships, and corporations
31,955
32,341
32,842
States and political subdivisions
32,663
32,310
32,079
937
972
935
930
922
U.S. government
916
7,764
7,742
7,750
7,568
Depository institutions in the United States
7,420
7,391
659
629
661
701
657
711
Foreign governments, official institutions, and banks ..
288,844
278,253
292,780
284,177
289,130
277,162
Liabilities for borrowed money
1,632
1,035
1,060
985
Borrowings from Federal Reserve Banks
1,349
1,520
25,696
25,6%
25,598
24,373
21,700
8,003
Treasury tax-and-loan notes
261,614
251,522
266,024
258,819
266,081
267,639
All other liabilities for borrowed money
85,962
85,298
82,244
85,317
90,394
Other liabilities and subordinated notes and debentures ..
86,457
1,350,184' 1,321,805' 1,344,328' 1,325,271 1,371,007 1,336,607
Total liabilities
99,411
99,929
100,161
100,432
100,641
100,717
Residual (total assets minus total liabilities)7
70
71
72
73
74
75
76
77
Total loans and leases (gross) and investments adjusted . 1,165,780 1,159,950
954,498
948,778
Total loans and leases (gross) adjusted
215,464
214,705
Time deposits in amounts of $100,000 or more
19,174
19,080'
U.S. Treasury securities maturing in one year or less
1,870
1,839
Loans sold outright to affiliates—total
1,575
1,544
Commercial and industrial
295
295
Other
246,320
245,696
Nontransaction savings deposits (including MMDAs)
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
June 14
June 21
June 28
113,573
1,203,732
137,626
13,823
123,803
53,932
103,874
1,208,875
140,272
14,427
125,845
55,782
106,464
1,208,611
140,742
12,168
128,575
57,653
20,982
40,922
7,%7
72,010
1,027
70,982
44,153
4,971
39,181
26,830
4,810
69,935
44,934
19,299
5,702
957,770
933,195
316,469
1,879
314,590
312,724
1,866
328,061
24,746
303,315
169,662
45,414
19,924
3,921
21,568
15,667
5,716
27,037
1,912
23,257
24,575
4,943
33,476
919,351
130,815
20,990
40,760
8,313
72,176
1,045
71,131
44,069
4,915
39,154
27,062
4,634
21,505
40,757
8,660
71,651
1,113
70,538
43,847
4,775
39,072
26,691
4,870
72,860
48,091
18,409
6,360
956,657
931,986
314,110
1,781
312,329
310,392
1,937
1,448,120
226,209
180,985
5,890
4,547
19,817
6,020
891
8,059
74,883
676,549
635,547
31,974
882
7,466
679
282,707
1,720
7,165
273,822
86,832
70,210
45,070
18,841
6,299
959,987
935,342
316,022
1,803
314,220
312,319
1,901
329,207
24,873
304,334
169,256
45,689
19,304
4,384
22,001
16,098
5,738
27,066
1,869
24,3%
24,645
4,%1
33,442
921,583
131,739
1,444,489
330,083
25,031
305,052
169,788
42,912
17,266
3,947
21,699
16,998
5,7%
26,9%
1,813
23,489
24,671
4,949
33,220
918,488
128,170
1,443,245
219,193
173,820
6,078
2,516
20,086
6,707
1,022
8,%3
71,824
674,735
634,580
31,066
898
7,494
6%
291,8%
960
25,191
265,746
84,807
1,347,181
219,160
174,885
6,616
1,888
19,736
7,030
866
8,138
72,702
675,376
634,933
31,380
882
7,484
6%
289,438
0
25,165
264,273
87,093
1,343,770
1,342,456
100,940
100,719
100,789
1,177,293
%2,847
217,398
18,862
1,859
1,548
312
246,968
1,182,905
%5,823
216,782
18,868
1,863
1,544
319
246,010
1,181,423
964,160
216,742
18,572
1,800
1,479
320
245,348
MEMO
1. Beginning Jan. 6, 1988, the "Large bank" reporting group was revised
somewhat, eliminating some former reporters with less than $2 billion of assets
and adding some new reporters with assets greater than $3 billion.
2. For adjustment bank data see this table in the March 1989 Bulletin. The
adjustment data for 1988 should be added to the reported data for 1988 to establish
comparability with data reported for 1989.
3. Includes U.S. government-issued or guaranteed certificates of participation
in pools of residential mortgages.
4. Includes securities purchased under agreements to resell.
5. Includes allocated transfer risk reserve.
1,169,288
955,106
216,357
19,388
1,877
1,555
322
246,665
1,171,141
954,933
216,914
19,552
1,926
1,618
308
245,452
1,178,618
%3,899
215,385
19,392
1,775
1,466
309
246,395
1,176,652
961,731
217,267
19,866
1,854
1,542
312
248,402
6. Includes federal funds purchased and securities sold under agreements to
repurchase; for information on these liabilities at banks with assets of $1 biUionor
more on Dec. 31, 1977, see table 1.13.
7. This is not a measure of equity capital for use in capital-adequacy analysis or
for other analytic uses.
8. Exclusive of loans and federal funds transactions with domestic commercial
banks.
9. Loans sold are those sold outright to a bank's own foreign branches,
nonconsolidated nonbank affiliates of the bank, the bank's holding company (if
not a bank), and nonconsolidated nonbank subsidiaries of the holding company.
A20
DomesticNonfinancialStatistics • September 1989
1.28 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS
IN NEW YORK CITY1
Millions of dollars, Wednesday figures
1989
Account
May 3
June 28
21,252
28,490
20,524
25,136
21,314
24,700
212,905
222,681
216,247
217,152
216,649
215,410
0
0
15,056
7,242
0
0
15,530
7,257
0
0
15,704
7,263
0
0
15,244
7,237
0
0
15,042
7,250
0
0
15,030
7,260
0
0
15,095
7,288
0
0
15,461
7,414
2,758
3,371
1,685
0
0
17,549
12,042
1,170
10,872
5,507
0
2,659
3,900
1,714
0
0
17,589
12,001
1,166
10,835
5,588
0
2,712
4,029
1,700
0
0
17,710
11,997
1,162
10,835
5,713
0
2,804
3,500
1,703
0
0
17,777
11,990
1,161
10,828
5,787
0
2,791
3,409
1,592
0
0
17,772
11,964
1,175
10,788
5,808
0
2,781
3,412
1,576
0
0
17,927
11,932
1,178
10,755
5,995
0
2,855
3,295
1,657
0
0
18,224
11,904
1,181
10,723
6,320
0
2,930
3,517
1,601
0
0
17,761
11,707
1,079
10,628
6,054
0
25,116
13,184
7,873
4,058
172,527
166,693
59,277
325
58,952
58,321
631
51,679
3,441
48,238
19,368
17,509
8,212
2,195
7,102
6,395
161
6,034
520
5,749
5,834
1,610
12,940
157,977
59,369
20,683
10,006
7,440
3,236
169,905
164,070
58,600
355
58,245
57,606
639
51,750
3,449
48,300
19,368
17,402
7,992
2,7%
6,614
5,271
174
6,015
583
4,907
5,835
1,634
13,010
155,261
59,792
23,787
12,567
7,504
3,716
173,337
167,591
59,230
303
58,926
58,309
617
52,022
3,461
48,561
19,331
18,463
8,860
2,544
7,059
5,660
194
6,001
753
5,936
5,746
1,648
13,013
158,677
61,784
22,312
9,039
8,614
4,658
171,859
166,120
59,431
355
59,076
58,393
683
52,139
3,469
48,669
19,366
17,953
8,444
2,798
6,711
5,033
170
5,975
605
5,447
5,739
1,656
13,024
157,179
58,636
27,529
13,687
9,708
4,134
176,814
171,076
60,169
422
59,747
59,118
629
52,240
3,479
48,761
19,347
20,126
9,204
3,323
7,598
6,165
158
5,982
480
6,408
5,737
1,641
13,041
162,131
57,284
22,727
8,086
10,335
4,307
175,424
169,696
59,746
384
59,362
58,733
628
52,495
3,481
49,014
19,430
19,435
8,535
3,215
7,685
5,606
163
5,945
625
6,249
5,728
1,646
13,072
160,706
59,032
24,721
10,582
10,956
3,182
174,171
168,469
59,210
489
58,722
58,120
602
52,640
3,495
49,145
19,528
18,638
8,104
2,537
7,9%
5,971
155
5,898
504
5,923
5,701
1,655
13,041
159,474
54,848
23,950
9,875
10,384
3,690
174,092
168,363
57,929
404
57,525
56,922
603
52,7%
3,508
49,288
19,498
18,998
8,007
2,932
8,059
6,374
148
5,974
508
6,138
5,729
1,675
13,037
159,380
59,411
25,085
11,277
9,994
3,814
171,809
166,097
56,879
394
56,486
55,782
703
53,034
3,524
49,510
19,630
17,094
6,760
2,529
7,804
7,146
150
5,917
476
5,772
5,712
1,686
13,020
157,103
56,451
288,868
300,195
292,793
308,455
295,803
297,137
297,373
296,562
47,475
33,792
550
504
4,696
4,487
675
2,770
50,746
36,203
487
227
5,198
4,588
868
3,174
46,512
32,714
493
670
4,674
4,814
488
2,658
58,706
38,911
625
478
6,745
7,040
530
4,376
50,054
35,302
571
577
4,183
5,972
785
2,663
52,866
36,539
938
193
5,642
,5,710
/ 628
3,216
52,046
35,773
850
493
5,120
5,240
863
3,706
8,261
112,666
102,493
7,921
25
2,015
212
63,324
0
6,201
57,123
28,669
8,207
113,069
102,610
8,155
29
2,026
249
72,879
0
6,082
66,798
26,686
8,113
113,557
103,061
8,178
28
2,005
284
67,597
0
5,726
61,871
28,482
8,236
113,778
103,405
8,095
29
2,000
249
65,776
0
5,381
60,395
33,420
8,412
114,776
104,455
8,013
30
1,997
281
64,382
0
1,772
62,610
29,387
8,446
113,479
103,007
8,186
30
2,004
253
66,456
0
1,485
64,971
29,100
8,178
112,939
102,616
8,039
29
2,004
250
65,433
0
6,086
59,348
29,314
8,109
112,693
102,309
8,106
28
1,998
251
68,297
960
5,%9
61,368
26,802
260,395
271,587
264,261
279,916
267,011
268,299
268,730
267,947
28,172
2 10
22,828
215,583
272,249
9
20,527
208,549
8,544
112,910
102,964
7,673
24
1,996
251
70,191
0
6,202
63,990
29,935
Total loans and leases (gross) and investments adjusted '
Total loans and leases (gross) adjusted 10
Time deposits in amounts of $100,000 or more
U.S. Treasury securities maturing in one year or less
28,472
28,608
28,532
28,539
28,792
28,837
28,643
28,615
208,645
176,247
42,681
3,253
205,195
172,590
42,571
3,165
208,817
175,698
43,144
3,114
210,102
176,688
43,199
3,239
214,472
181,452
43,084
2,950
214,345
181,530
43,323
2,829
213,161
180,204
42,891
2,956
213,479
180,159
42,576
2,978
212,079
178,857
42,356
2,872
1. These data also appear in the Board's H.4.2 (504) release. For address, see
inside front cover.
2. Excludes trading account securities.
3. Not available due to confidentiality.
4. Includes U.S. government-issued or guaranteed certificates of participation
in pools of residential mortgages.
5. Includes securities purchased under agreements to resell.
FRASER
6. Includes allocated transfer risk reserve.
Digitized for
June 21
50,670
34,056
1,379
1,215
5,009
4,880
521
3,610
68 Total liabilities
70
71
72
73
June 14
300,421
Deposits
Demand deposits
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits
(ATS, NOW, Super NOW, telephone transfers)
Nontransaction balances
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions, and banks
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-loan notes
All other liabilities for borrowed money 8
Other liabilities and subordinated notes and debentures
MEMO
June 7
2,564
3,488
1,670
0
0
17,436
12,018
1,168
10,850
5,418
0
Loans and leases
Federal funds sold
To commercial banks
To nonbank brokers and dealers in securities
To others
Other loans and leases, gross
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate loans
Revolving, home equity
All other
To individuals for personal expenditures
To depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank depository and other financial institutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
Mother
Lease financing receivables
LESS: Unearned income
Loan and lease reserve
Other loans and leases, net 6
All other assets
69 Residual (total assets minus total liabilities)
May 31
0
0
14,962
7,240
47 Total assets
57
58
59
60
61
62
63
64
65
66
67
May 24
25,562
Securities
3 U.S. Treasury and government agency
4
Trading account
5
Investment account
6
Mortgage-backed securities
All other maturing in
7
One year or less
8
Over one through five years
Over five years
9
10 Other securities 3
11 Trading account
12 Investment account
13
States and political subdivisions, by maturity
14
One year or less
15
Over one year
16
Other bonds, corporate stocks, and securities
17 Other trading account assets
48
49
50
51
52
53
54
55
56
May 17
215,490
1 Cash balances due from depository institutions
2 Total loans, leases and securities, net2
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
May 10
50,818
36,199
1,057
693
4,787
4,590
749
2,743 f
7. Includes trading account securities.
8. Includes federal funds purchased and securities sold under agreements to
repurchase.
9. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
10. Exclusive of loans and federal funds transactions with domestic commercial banks.
Weekly Reporting Commercial Banks
1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS 1
Liabilities
A21
Assets and
Millions of dollars, Wednesday figures
1989
Account
May 3
1 Cash and due from depository institutions . . .
2 Total loans and securities
3 U.S. Treasury and government agency
securities
4 Other securities.
5 Federal funds sold
6 To commercial banks in the United States .
7 To others
8 Other loans, gross
9
Commercial and industrial
10
Bankers acceptances and commercial
paper
11
All other
12
U.S. addressees
13
Non-U.S. addressees
14
Loans secured by real estate
15 To financial institutions
Commercial banks in the United States..
16
17
Banks in foreign countries
18
Nonbank financial institutions
19 To foreign governments and official
institutions
20
For purchasing and carrying securities
21
All other 3
22 Other assets (claims on nonrelated parties) ..
23 Net due from related institutions
24 Total assets
25
Deposits or credit balances due to other
than directly related institutions
26
Transaction accounts and credit balances .
27
Individuals, partnerships, and
corporations
28
Other
29
Nontransaction accounts'
30
Individuals, partnerships, and
corporations
31
Other
32
Borrowings from other than directly
related institutions
33
Federal funds purchased
34
From commercial banks in the
United States
35
From others
36
Other liabilities for borrowed money
37
To commercial banks in the
United States
38
To others
39 Other liabilities to nonrelated parties
40 Net due to related institutions
41 Total liabilities
May 10
May 17
May 24
May 31
June 7
June 14
June 21
June 28
13,042
132,100
10,534
130,967
11,398
132,963
11,026
131,596
11,420
130,213
10,617
131,484
11,621
133,135
11,396
133,185
11,606
134,216
9,006
6,190
7,216
6,061
1,155
109,688
71,777
8,591
6,184
6,598
5,448
1,150
109,594
71,150
8,580
6,200
8,223
6,737
1,486
109,960
71,410
8,687
6,042
6,815
5,582
1,233
110,052
71,007
8,863
6,137
5,500
4,489
1,011
109,713
71,241
8,659
6,138
7,267
6,215
1,052
109,420
70,716
8,132
6,014
9,030
8,002
1,028
109,959
70,671
8,5%
6,006
7,955
6,915
1,040
110,628
71,341
8,557
5,988
7,286
6,079
1,207
112,385
71,337
1,773
70,004
68,366
1,638
14,581
19,679
14,600
1,612
3,467
1,858
69,292
67,532
1,760
14,770
19,832
14,876
1,555
3,401
1,794
69,616
67,918
1,698
14,814
19,776
15,122
1,434
3,220
1,761
69,246
67,543
1,703
14,728
20,505
15,564
1,611
3,330
1,648
69,593
67,894
1,699
14,691
19,894
14,492
1,944
3,458
1,789
68,927
67,189
1,738
14,736
19,880
14,651
1,758
3,471
1,888
68,783
67,048
1,735
14,664
20,352
15,147
1,783
3,422
1,892
69,449
67,778
1,671
15,173
20,362
15,512
1,438
3,412
1,863
69,474
67,736
1,738
14,912
21,972
17,036
1,490
3,446
709
1,622
1,320
32,266
14,494
191,903
818
1,607
1,417
32,488
16,677
190,667
741
1,581
1,638
32,368
15,349
192,078
746
1,576
1,490
32,351
14,506
189,480
692
1,563
1,632
32,669
18,293
192,596
686
1,484
1,918
32,146
15,789
190,038
649
2,157
1,466
32,663
14,450
191,869
622
1,642
1,488
32,638
15,520
192,741
716
1,757
1,691
32,508
14,096
192,426
48,340
3,344
48,262
3,198
48,279
3,329
48,246
3,421
48,523
3,609
48,878
3,477
47,970
3,014
48,594
3,450
48,778
4,101
1,944
1,400
44,996
2,004
1,194
45,064
1,940
1,389
44,950
1,837
1,584
44,825
2,107
1,502
44,914
2,080
1,397
45,401
1,905
1,109
44,956
1,934
1,516
45,144
2,423
1,678
44,677
38,160
6,836
38,104
6,960
37,980
6,970
37,700
7,125
37,852
7,062
38,211
7,190
37,748
7,208
37,756
7,388
37,632
7,045
82,064
35,819
83,826
37,062
83,056
36,398
83,517
38,489
83,596
38,550
82,753
38,762
81,403
37,212
86,325
41,660
81,763
34,949
18,977
16,842
46,245
19,931
17,131
46,764
20,222
16,176
46,658
18,740
19,749
45,028
21,099
17,451
45,046
20,561
18,201
43,991
21,260
15,952
44,191
21,367
20,293
44,665
17,653
17,296
46,814
31,132'
15,113'
33,479
28,020
191,903
31,615'
15,149'
33,773
24,804
190,667
31,118'
15,54(T
33,581
27,160
192,078
29,753'
15,275'
33,196
24,520
189,480
29,437'
33,782
26,694
192,596
28,777
15,214
33,141
25,266
190,038
28,940
15,251
33,333
29,165
191,869
29,058
15,607
32,472
25,350
192,741
31,098
15,716
32,829
29,056
192,426
111,439
96,243
110,643
95,868
111,104
96,324
110,450
95,721
111,232
96,232
110,618
95,821
109,986
95,840
110,758
96,156
111,101
96,556
MEMO
42 Total loans (gross) and securities adjusted
43 Total loans (gross) adjusted
..
1. Effective Jan. 4, 1989, the reporting panel includes a new group of large U.S.
branches and agencies of foreign banks. Earlier data included 65 U.S. branches
and agencies of foreign banks that included those branches and agencies with
assets of $750 million or more on June 30, 1980, plus those branches and agencies
that had reached the $750 million asset level on Dec. 31, 1984. These data also
appear in the Board's H.4.2 (504) release. For address, see inside front cover.
2. Includes securities purchased under agreements to resell.
3. Effective Jan. 4, 1989, loans secured by real estate are being reported as a
separate component of Other loans, gross. Formerly, these loans were included in
"All other", line 21.
4. Includes credit balances, demand deposits, and other checkable deposits.
5. Includes savings deposits, money market deposit accounts, and time
deposits.
6. Includes securities sold under agreements to repurchase.
7. Exclusive of loans to and federal funds sold to commercial banks in the
United States.
A22
DomesticNonfinancialStatistics • September 1989
1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations1
Billions of dollars, estimated daily-average balances, not seasonally adjusted
Commercial banks
Type of ho'der
1988
1984
1985
1986
Dec.
Dec.
1989
1987
Dec.
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
1 All holders—Individuals, partnerships, and
corporations
302.7
321.0
363.6
343.5
328.6
346.5
337.8
354.7
330.4
n.a.
2
3
4
5
6
31.7
166.3
81.5
3.6
19.7
32.3
178.5
85.5
3.5
21.2
41.4
202.0
91.1
3.3
25.8
36.3
191.9
90.0
3.4
21.9
33.9
184.1
86.9
3.5
20.3
37.2
194.3
89.8
3.4
21.9
34.8
190.3
87.8
3.2
21.7
38.6
201.2
88.3
3.7
22.8
36.3
182.2
87.4
3.7
20.7
n.a.
n.a.
n.a.
n.a.
n.a.
Financial business
Nonfinancial business
Consumer
Foreign
Other
Weekly reporting banks
1988
1984
1985
1986
Dec.
Dec.
1989
1987
Dec.
Dec.
Mar.
7
8
9
10
11
12
All holders—Individuals, partnerships, and
corporations
Financial business
Nonfinancial business
Consumer
Foreign
Other
Sept.
Dec.
Mar.
June
157.1
168.6
195.1
183.8
181.8
191.5
185.3
198.3
181.9
182.2
25.3
87.1
30.5
3.4
10.9
25.9
94.5
33.2
3.1
12.0
32.5
106.4
37.5
3.3
15.4
28.6
100.0
39.1
3.3
12.7
27.0
98.2
41.7
3.4
11.4
30.0
103.1
42.3
3.4
12.8
27.2
101.5
41.8
3.1
11.7
30.5
108.7
42.6
3.6
12.9
27.2
98.6
41.1
3.3
11.7
25.4
99.8
42.4
2.9
11.7
1. Figures include cash items in process of collection. Estimates of gross
deposits are based on reports supplied by a sample of commercial banks. Types
of depositors in each category are described in the June 1971 BULLETIN, p. 466.
Figures may not add to totals because of rounding.
2. Beginning in March 1984, these data reflect a change in the panel of weekly
reporting banks, and are not comparable to earlier data. Estimates in billions of
dollars for December 1983 based on the new weekly reporting panel are: financial
business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other
9.5.
3. Beginning March 1985, financial business deposits and, by implication, total
gross demand deposits have been redefined to exclude demand deposits due to
thrift institutions. Historical data have not been revised. The estimated volume of
such deposits for December 1984 is $5.0 billion at all insured commercial banks
and $3.0 billion at weekly reporting banks.
June
4. Historical data back to March 1985 have been revised to account for
corrections of bank reporting errors. Historical data before March 1985 have not
been revised, and may contain reporting errors. Data for all commercial banks for
March 1985 were revised as follows (in billions of dollars): all holders, - . 3 ;
financial business, - . 8 ; nonfinancial business, —.4; consumer, .9; foreign, .1;
other, - . 1 . Data for weekly reporting banks for March 1985 were revised as
follows (in billions of dollars): all holders, - . 1 ; financial business, - . 7 ; nonfinancial business, - . 5 ; consumer, 1.1; foreign, .1; other, - . 2 .
5. Beginning March 1988, these data reflect a change in the panel of weekly
reporting banks, and are not comparable to earlier data. Estimates in billions of
dollars for December 1987 based on the new weekly reporting panel are: financial
business, 29.4; nonfinancial business, 105.1; consumer, 41.1; foreign, 3.4; other,
13.1.
Financial Markets
A23
1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
1988
1984
Dec.
Instrument
1985
Dec.
1987
Dec.
1986
Dec.
1989
1988
Dec.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Commercial paper (seasonally adjusted unless noted otherwise)
237,586
2
3
4
5
6
298,779
329,991
357,129
455,017
455,017
471,066
487,771
492,821
494,292
497,369
56,485
78,443
101,072
101,958
159,947
159,947
162,884
173,944
172,950
170,549
167,795
2,035
1,602
2,265
1,428
1,248
1,248
n.a.
n.a.
n.a.
n.a.
n.a.
110,543
135,320
151,820
173,939
192,442
192,442
199,828
201,997
205,374
207,231
206,497
42,105
70,558
1 All issuers
44,778
85,016
40,860
77,099
43,173
81,232
43,155
102,628
43,155
102,628
n.a.
108,354
n.a.
111,830
n.a.
114,497
n.a.
116,512
n.a.
123,077
Financial companies'
Dealer-placed paper
Total
Bank-related (not seasonally
adjusted)
Directly placed paper
Total
Bank-related (not seasonally
adjusted)
^
Nonfinancial companies
Bankers dollar acceptances (not seasonally adjusted) 6
78,364
11
12
13
70,565
66,631
66,631
62,212
62,812
62,458
64,357
62,396
11,197
9,471
1,726
13,423
11,707
1,716
10,943
9,464
1,479
9,086
8,022
1,064
9,086
8,022
1,064
9,009
7,927
1,082
9,401
8,497
904
8,336
7,642
693
9,616'
8,107
l,509 r
8,908
8,115
794
0
937
56,279
0
1,317
50,234
0
965
58,658
0
1,493
56,052
0
1,493
56,052
0
1,596
51,608
0
1,579
51,832
0
1,544
52,579
0
1,400
53,340r
0
1,374
0
17,845
16,305
44,214
Basis
14 Imports into United States
15 Exports from United States
16 All other
8
9
10
64,974
0
671
67,881
Holder
Accepting banks
Own bills
Bills bought
Federal Reserve Banks
Own account
Foreign correspondents
Others
68,413
9,811
8,621
1,191
7 Total
15,147
13,204
40,062
14,670
12,960
37,344
16,483
15,227
38,855
14,984
14,410
37,237
14,984
14,410
37,237
14,917
13,813
33,482
15,588
13,927
33,297
14,755
13,581
34,122
15,234
14,371
34,752
14,900
14,452
33,044
1. Institutions engaged primarily in activities such as, but not limited to,
commercial savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other business lending; insurance underwriting; and other investment activities.
2. Includes all financial company paper sold by dealers in the open market.
3. Beginning January 1989, bank-related series have been discontinued.
4. As reported by financial companies that place their paper directly with
investors.
5. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
6. Beginning January 1988, the number of respondents in the bankers acceptance survey were reduced from 155 to 111 institutions—those with $100 million
or more in total acceptances. The new reporting group accounts for over 90
percent of total acceptances activity.
1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans
Percent per year
Rate
1986—Mar. 7
Apr. 21
July 11
Aug. 26
9.00
8.50
8.00
7.50
1987—Apr.
May
7.75
8.00
8.25
8.75
9.25
9.00
8.75
1
1
15
Sept. 4
Oct. 7
22
Nov. 5
2
11
14
11
28
8.50
9.00
9.50
10.00
10.50
1989—Feb. 10
24
June 5
July 31
Period
Average
rate
1986
1987
1988
8.33
8.21
9.32
1986 —Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct..
Nov.
Dec.
9.50
9.50
9.10
8.83
8.50
8.50
8.16
7.90
7.50
7.50
7.50
7.50
11.00
1988—Feb.
May
July
Aug.
Nov.
11.50
11.00
10.50
NOTE. These data also appear in the Board's H.15 (519) and G.13 (415) releases.
For address, see inside front cover.
Period
1987 —Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
Average
rate
7.50
7.50
7.50
7.75
8.14
8.25
8.25
8.25
8.70
9.07
8.78
8.75
Period
1988 —Jan.
Feb.
Mar.
Apr.
May.
June.
July .
Aug.
Sept.
Oct..
Nov.
Dec.
1989 —Jan.
Feb.
Mar.
Apr.
May.
June.
July .
A24
1.35
DomesticNonfinancialStatistics • September 1989
I N T E R E S T R A T E S M o n e y and Capital Markets
Averages, percent per year; weekly, monthly and annual figures are averages of business day data unless otherwise noted.
1989
Instrument
1986
1987
1989, week ending
1988
Mar.
Apr.
May
June
June 2
June 9
June 16
June 23
June 30
MONEY MARKET RATES
1 Federal funds 1 ' 2
2 Discount window borrowing 1, ' 3
Commercial paper 4 ' 5
3
1-month
4
3-month
5 6-month
Finance paper, directly placed 4 '
6
1-month
7
3-month
8
6-month
%
Bankers acceptances ' 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 5
Secondary market
15 3-month
16 6-month
17
1-year
Auction average 10
18 3-month
19 6-month
20
1-year
6.80
6.32
6.66
5.66
7.57
6.20
9.85
7.00
9.84
7.00
9.81
7.00
9.53
7.00
9.84
7.00
9.68
7.00
9.35
7.00
9.48
7.00
9.58
7.00
6.61
6.49
6.39
6.74
6.82
6.85
7.58
7.66
7.68
9.88
9.95
9.97
9.77
9.81
9.78
9.58
9.47
9.29
9.34
9.11
8.80
9.51
9.31
9.05
9.32
9.05
8.71
9.28
9.04
8.74
9.35
9.16
8.92
9.35
9.10
8.73
6.57
6.38
6.31
6.61
6.54
6.37
7.44
7.38
7.14
9.77
9.70
9.17
9.70
9.70
9.29
9.48
9.27
8.97
9.24
8.77
8.22
9.39
9.04
8.69
9.21
8.71
8.25
9.17
8.73
8.11
9.28
8.77
8.19
9.27
8.77
8.15
6.38
6.28
6.75
6.78
7.56
7.60
9.83
9.87
9.68
9.63
9.35
9.15
8.97
8.66
9.16
8.88
8.88
8.56
8.95
8.66
9.05
8.81
8.94
8.55
6.61
6.51
6.50
6.71
6.75
6.87
7.01
7.06
7.59
7.73
7.91
7.85
9.91
10.09
10.40
10.18
9.81
9.94
10.13
10.04
9.61
9.59
9.60
9.66
9.35
9.20
9.09
9.28
9.52
9.39
9.33
9.50
9.36
9.15
9.02
9.35
9.27
9.13
9.02
9.18
9.36
9.29
9.24
9.30
9.35
9.16
8.98
9.31
5.97
6.02
6.07
5.78
6.03
6.33
6.67
6.91
7.13
8.82
8.85
8.82
8.65
8.65
8.64
8.43
8.41
8.31
8.15
7.93
7.84
8.54
8.33
8.16
8.18
7.89
7.79
8.14
7.87
7.84
8.13
8.05
7.92
8.03
7.79
7.71
5.98
6.03
6.18
5.82
6.05
6.33
6.68
6.92
7.17
8.83
8.87
8.68
8.70
8.73
8.75
8.40
8.39
8.44
8.22
8.00
8.18
8.50
8.36
n.a.
8.17
7.99
8.18
8.13
7.79
n.a.
8.22
8.08
n.a.
8.07
7.78
n.a.
6.45
6.86
7.06
7.30
7.54
7.67
7.84
7.78
6.77
7.42
7.68
7.94
8.23
8.39
n.a.
8.59
7.65
8.10
8.26
8.47
8.71
8.85
n.a.
8.%
9.57
9.68
9.61
9.51
9.43
9.36
n.a.
9.17
9.36
9.45
9.40
9.30
9.24
9.18
n.a.
9.03
8.98
9.02
8.98
8.91
8.88
8.86
n.a.
8.83
8.44
8.41
8.37
8.29
8.31
8.28
n.a.
8.27
8.80
8.76
8.71
8.60
8.61
8.57
n.a.
8.58
8.40
8.38
8.33
8.28
8.31
8.28
n.a.
8.33
8.45
8.41
8.38
8.30
8.30
8.26
n.a.
8.22
8.53
8.50
8.45
8.37
8.38
8.34
n.a.
8.30
8.28
8.23
8.20
8.13
8.16
8.14
n.a.
8.10
8.14
8.64
8.98
9.33
9.18
8.95
8.40
8.70
8.45
8.36
8.44
8.25
6.95
7.76
7.32
7.14
8.17
7.63
7.36
7.83
7.68
7.40
7.78
7.59
7.37
7.82
7.49
7.22
7.66
7.25
6.79
7.27
7.02
6.92
7.47
7.15
6.80
7.35
6.95
6.65
7.20
6.88
6.85
7.20
7.08
6.75
7.15
7.02
9.71
9.02
9.47
9.95
10.39
9.91
9.38
9.68
9.99
10.58
10.18
9.71
9.94
10.24
10.83
10.18
9.80
9.98
10.26
10.67
10.14
9.79
9.94
10.20
10.61
9.97
9.59
9.77
10.01
10.48
9.50
9.10
9.29
9.59
10.03
9.75
9.37
9.56
9.79
10.27
9.54
9.16
9.35
9.61
10.06
9.45
9.02
9.22
9.57
9.98
9.50
9.09
9.26
9.60
10.05
9.42
9.02
9.21
9.49
9.%
9.61
9.95
10.20
10.37
10.33
10.09
9.66
9.80
9.63
9.70
9.59
9.49
8.76
3.48
8.37
3.08
9.23
3.64
9.43
3.68
9.50
3.59
9.32
3.52
8.96
3.44
9.26
3.47
9.04
3.40
8.90
3.43
8.93
3.48
8.96
3.43
CAPITAL MARKET RATES
21
22
2i
24
25
26
11
28
29
30
31
32
33
34
35
36
37
38
U.S. Treasury notes and bonds 11
Constant maturities
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
Composite 13
Over 10 years (long-term)
State and local notes and bonds
Moody's series 14
Aaa
Baa
Bond Buyer series 15
Corporate bonds
Seasoned issues 16
All industries
Aaa
Aa
A
Baa
A-rated, recently offered utility
bonds 17
MEMO: Dividend/price ratio 18
39
Preferred stocks
40
Common stocks
1. Weekly, monthly and annual figures are averages of all calendar days,
where the rate for a weekend or holiday is taken to be the rate prevailing on the
preceding business day. The daily rate is the average of the rates on a given day
weighted by the volume of transactions at these rates.
2. Weekly figures are averages for statement week ending Wednesday.
3. Rate for the Federal Reserve Bank of New York.
4. Unweighted average of offering rates quoted by at least live dealers (in the
case of commercial paper), or finance companies (in the case of finance paper).
Before November 1979, maturities for data shown are 30-59 days, 90-119 days,
and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and
150-179 days for finance paper.
5. Yields are quoted on a bank-discount basis, rather than in an investment
yield basis (which would give a higher figure).
6. Dealer closing offered rates for top-rated banks. Most representative rate
(which may be, but need not be, the average of the rates quoted by the dealers).
7. Unweighted average of offered rates quoted by at least five dealers early in
the day.
8. Calendar week average. For indication purposes only.
9. Unweighted average of closing bid rates quoted by at least five dealers.
10. Rates are recorded in the week in which bills are issued. Beginning with the
Treasury bill auction held on Apr. 18, 1983, bidders were required to state the
percentage yield (on a bank discount basis) that they would accept to two decimal
places. Thus, average issuing rates in bill auctions will be reported using two
rather than three decimal places.
11. Yields are based on closing bid prices quoted by at least five dealers.
12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields
are read from a yield curve at fixed maturities. Based on only recently issued,
actively traded securities.
13. Averages (to maturity or call) for all outstanding bonds neither due nor
callable in less than 10 years, including one very low yielding "flower" bond.
14. General obligations based on Thursday figures; Moody's Investors Service.
15. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
16. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
17. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of
call protection. Weekly data are based on Friday quotations.
18. Standard and Poor's corporate series. Preferred stock ratio based on a
sample of ten issues: four public utilities, four industrials, one financial, and one
transportation. Common stock ratios on the 500 stocks in the price index.
NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases.
For address, see inside front cover.
Financial Markets A23
1.36 STOCK MARKET
Selected Statistics
1988
1986
Indicator
1987
1989
1988
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Prices and trading (averages of daily figures)
Common stock prices
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3 Transportation
Utility
4
5
Finance
6 Standard & Poor's Corporation
(1941-43 = 10) r
136.03r
155.85
119.87
71.36
147.19
161.78'
195.31
140.39
74.29
146.48
149.97r
180.83
134.01
72.22
127.41
156.36'
188.58
141.83
74.19
136.09
152.67'
182.25
137.51
79.28
130.05
155.35'
187.75
144.06
74.81
128.83
160.35'
194.62
153.09
75.87
132.26
165.08'
200.00
162.66
77.84
137.19
164.56'
197.58
153.85
87.16
146.14
169.38'
204.81
164.32
79.69
143.26
175.3C
211.81
169.05
84.21
146.82
180.76
216.75
173.47
87.95
154.08
236.40r
287.14'
265.88
277.40'
271.02'
276.51'
285.41'
294.01'
292.71'
302.25'
313.93'
323.73
7 American Stock Exchange
(Aug. 31, 1973 = 50?
264.91r
316.78'
295.08'
302.83'
292.11'
298.59'
316.14'
323.97'
327.47'
336.82'
349.50'
362.73
159,024' 161,863' 171,495
11,395
11,529
11,699
180,680
13,519
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange
141,020' 188,922' 161,386' 162,627' 134,420' 135,233' 168,204' 169,223'
13,832
9,955
9,051
8,497
10,797
11,846
11,780
11,227
Customer financing (end-of-period balances, in millions of dollars)
10 Margin credit at broker-dealers3
36,840
31,990
32,740
33,410
33,640
32,740
32,530
31,480
32,130
32,610
33,140
34,730
4,880
19,000
4,750
15,640
5,660
16,595
5,065
14,880
4,920
15,185
5,660
16,595
5,790
15,705
5,605
16,195
5,345
16,045
5,450
16,125
5,250
15,965
6,900
19,080
4
Free credit balances at brokers
11 Margin-account
12 Cash-account
Margin requirements (percent of market value and effective date) 6
Mar. 11, 1968
n
14
15
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
Jan. 3, 1974
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
50
50
50
1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. Beginning July 5, 1983, the American Stock Exchange rebased its index
effectively cutting previous readings in half.
3. Beginning July 1983, under the revised Regulation T, margin credit at
broker-dealers includes credit extended against stocks, convertible bonds, stocks
acquired through exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds,
and subscription issues was discontinued in April 1984.
4. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.
5. New series beginning June 1984.
6. These regulations, adopted by the Board of Governors pursuant to the
Securities Exchange Act of 1934, limit the amount of credit to purchase and carry
"margin securities" (as defined in the regulations) when such credit is collateralized by securities. Margin requirements on securities other than options are the
difference between the market value (100 percent) and the maximum loan value of
collateral as prescribed by the Board. Regulation T was adopted effective Oct. 15,
1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar. 11,1968;
and Regulation X, effective Nov. 1, 1971.
On Jan. 1, 1977, the Board of Governors for the first time established in
Regulation T the initial margin required for writing options on securities, setting
it at 30 percent of the current market-value of the stock underlying the option. On
Sept. 30,1985, the Board changed the required initial margin, allowing it to be the
same as the option maintenance margin required by the appropriate exchange or
self-regulatory organization; such maintenance margin rules must be approved by
the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
A26
DomesticNonfinancialStatistics • September 1989
1.37 SELECTED FINANCIAL INSTITUTIONS
Selected Assets and Liabilities
Millions of dollars, end of period
1988
Account
1986
1989
1987
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
FSLIC-insured institutions
1 Assets
2 Mortgages
3 Mortgage-backed
securities
4
Contra-assets to
mortgage assets' .
5 Commercial loans
6 Consumer loans
7 Contra-assets to nonmortgage loans 2 ....
8 Cash and investment
securities
9 Other 3
1,163,851
1,250,855
1,299,373
1,311,668
697,451
721,593
743,083
751,421
754,389
760,788'
762,997'
764,560'
767,076'
767,422'
769,451'
773,625
158,193
201,828
208,509
210,573
211,195
211,675'
212,462'
215,052'
211,295'
212,298'
215,508'
216,543
41,799
23,683
51,622
42,344
23,163
57,902
40,296
24,964
61,571
39,078
25,099
62,417
38,500
24,782
61,558
38,303
25,413'
61,053'
37,735'
25,513'
61,504'
37,561'
33,917'
61,943'
37,798'
33,291'
62,108'
36,985'
33,293'
62,082'
38,009'
32,928'
61,491'
38,327
32,611
61,630
2,931
3,005'
3,126'
2,853
177,940'
126,409'
175,948'
126,999'
176,423
126,047
1,323,840 1,332,878' 1,332,859' 1,350,599' 1,337,731' 1,339,455' 1,341,19C 1,345,699
3,041
3,467
3,389
3,118
3,074
2,932'
2,959'
3,064'
164,844
112,898
169,717
122,462
178,459
126,472
175,793
128,561
183,178
130,313
184,796'
130,388'
179,830'
131,248'
186,995'
129,757'
10 Liabilities and net worth . 1,163,851
1,250,855
1,299,373
1,311,668
932,616
249,917
116,363
133,554
21,941
46,382
968,214
262,745
118,213
144,532
27,110
41,304
968,294
266,787
120,677
146,110
28,903
47,684
11
12
13
14
15
16
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
890,664
196,929
100,025
96,904
23,975
52,282
178,824'
125,208'
1,323,840 1,332,878' 1,332,859' 1,350,599' 1,337,731' 1,339,455' 1,341,19C 1,345,699
973,742
273,665
123,436
150,229
26,021
50,412
976,163
278,301'
124,368
153,933'
27,558'
50,856'
971,493
281,043'
127,548
153,495'
29,181
51,143'
971,680
299,291'
134,168'
165,123'
24,128'
55,499'
963,815
299,358'
135,712'
163,646'
29,76C
59,147'
957,347
305,618'
140,089'
165,529'
31,778'
59,184'
956,657'
312,959
145,992'
166,967'
29,598'
57,855'
954,484
318,662
147,984
170,678
31,678
56,274
FSLIC-insured federal savings banks
17 Assets
210,562
284,270
333,596
357,897
367,928
369,682
374,930'
425,983'
423,895'
432,69C
443,196'
455,195
18 Mortgages
19 Mortgage-backed
securities
20
Contra-assets to
mortgage assets 1 .
21 Commercial loans
22 Consumer loans
23 Contra-assets to nonmortgage loans . . . .
24 Finance leases plus
interest
25 Cash and investment . . .
26 Other
113,638
161,926
193,150
204,351
207,952
207,207
210,732'
227,869'
231,664'
235,391'
241,313'
246,716
29,766
45,826
53,027
55,688
56,399
56,630
57,815
64,957'
62,77C
65,896'
68,053'
69,935
n.a.
n.a.
13,180
9,100
6,504
17,696
10,135
7,916
21,449
10,893
8,568
22,526
10,982
8,694
22,420
10,894
8,880
22,421
10,901'
9,041'
22,679
13,14c
16,731'
24,222'
12,266'
16,171'
25,050
12,672'
16,32C
25,991'
13,168'
16,319r
26,148
13,027
16,508
26,725
678
699
734
785
789
803
889'
812'
856'
935'
828
n.a.
n.a.
19,034
591
35,347
24,069
735
40,837
27,316
791
44,859
32,740
804
48,984
34,442
804
48,818
29,178
831
48,028
29,942
88C
61,029'
35,428'
905
57,454'
33,974'
946'
57,989'
34,646'
965
59,042'
36,313'
998
61,330
37,367
27 Liabilities and net worth .
210,562
284,270
333,596
357,897
367,928
369,682
374,930'
425,983'
423,895'
432,69c
443,196'
455,195
28
29
30
31
32
33
157,872
37,329
19,897
17,432
4,263
11,098
203,196
60,716
29,617
31,099
5,324
15,034
239,590
70,015
31,941
38,074
7,051
16,843
256,223
75,859
35,357
40,502
8,052
17,661
261,862
80,674
37,245
43,429
7,374
17,886
262,922
80,779
37,510
43,269
7,667
18,194
263,984
83,628
39,630
43,998
8,319'
18,882
298,197'
99,286'
46,265'
53,021'
8,075'
20,235'
298,530
98,304'
46,47C
51,834'
8,275
21,633'
301,778
102,902'
48,951'
53,951'
8,885'
22,142'
307,588'
107,179'
51,531
55,648'
8,608'
23,218'
315,725
109,997
53,513
56,484
9,311
23,340
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
n.a.
Savings banks
34 Assets
35
36
37
38
39
40
41
42
Loans
Mortgage
Other
Securities
U.S. government
Mortgage-backed
securities
State and local
government
Corporate and other .
Cash
Other assets
236,866
259,643
252,875
253,453
255,510
257,127
258,537
261,361
254,319
254,165
255,226
255,006
118,323
35,167
138,494
33,871
139,844
32,941
141,316
32,799
143,626
32,879
145,398
33,234
146,501
33,791
147,597
31,269
144,998
32,450
145,426
32,369
145,174
33,194
145,699
32,329
14,209
13,510
11,563
11,353
11,182
10,896
10,804
11,457
10,485
10,315
10,318
10,391
25,836
32,772
30,064
30,006
29,190
29,893
29,372
29,751
29,258
29,085
29,373
29,572
2,185
20,459
6,894
13,793
2,003
18,772
5,864
14,357
1,840
17,527
5,186
13,910
1,901
17,301
4,950
13,827
1,878
17,234
5,463
14,058
1,872
16,886
4,825
14,123
1,887
16,773
5,093
14,316
1,848
17,822
7,050
14,567
1,835
15,964
5,532
13,797
1,829
15,812
5,465
13,864
1,814
15,984
5,972
13,397
1,798
15,588
6,068
13,561
43 Liabilities
236,866
259,643
252,875
253,453
255,510
257,127
258,537
261,361
254,319
254,165
255,226
255,006
44 Deposits
45
Regular 4
46
Ordinary savings ..
47
Time
48
Other
49 Other liabilities
50 General reserve
accounts
192,194
186,345
37,717
100,809
5,849
25,274
201,497
196,037
41,959
112,429
5,460
35,720
195,537
189,993
40,124
112,272
5,544
34,686
195,907
190,716
39,738
114,255
5,191
34,776
197,665
192,228
39,618
116,387
5,427
35,001
197,925
192,663
39,375
117,712
5,262
35,997
199,092
194,095
39,482
119,026
4,997
36,012
202,058
196,407
39,750
121,148
5,651
36,169
195,452
190,378
38,221
118,612
5,074
33,782
195,308
190,422
38,049
119,109
4,886
33,642
199,399
194,276
38,070
123,162
7,206
30,500
199,538
194,059
36,801
125,378
5,479
30,020
18,105
20,633
20,069
20,018
20,151
20,324
20,462
20,337
20,138
20,336
20,338
20,254
Financial Markets A23
1.37—Continued
1988
Account
1986
1989
1987
July
Aug.
Sept.
Oct.
Nov.
Credit unions
51 Total assets/liabilities
and capital
52
53
Federal
State
54 Loans outstanding..
55
Federal
56
State
57 Savings
58
Federal
59
State
147,726
95,483
52,243
86,137
55,304
30,833
134,327
87,954
46,373
f
1
n.a.
1
1
t
Dec.
Jan.
Feb.
Mar.
Apr.
5
173,276
173,044
174,649
174,722
174,406
174,593
175,027
176,270
178,175
177,417
113,068
60,208
112,686
60,358
113,383
61,266
113,474
61,248
113,717
61,135
114,566
60,027
114,909
60,118
115,543
60,727
117,555
60,620
115,416
62,001
107,065
69,626
37,439
159,314
104,256
55,058
108,974
70,944
38,030
158,731
103,657
55,074
110,939
72,200
38,739
157,944
103,698
54,246
111,624
72,551
39,073
160,174
104,184
55,990
112,452
73,100
39,352
159,021
103,223
55,798
113,191
73,766
39,425
159,010
104,431
54,579
114,012
74,083
39,927
159,106
104,629
54,477
113,880
73,917
39,963
161,073
105,262
55,811
114,572
74,395
40,177
164,322
107,368
56,954
115,249
75,003
40,246
161,388
105,208
56,180
Life insurance companies
60 Assets
61
62
63
64
65
66
67
68
69
70
71
Securities
Government
United States 6 ..
State and local .
Foreign
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets
937,551
1,044,459
1,113,547
1,121,337
1,131,179
1,139,490
1,144,854
1,157,140
1,167,184
1,173,325
1,184,%3
84,640
59,033
11,659
13,948
492,807
401,943
90,864
193,842
31,615
54,055
80,592
84,426
57,078
10,681
16,667
569,199
472,684
96,515
203,545
34,172
53,626
89,586
88,218
60,244
11,102
16,872
618,742
514,926
103,816
221,990
35,737
53,142
95,718
88,362
60,407
11,190
16,765
624,917
520,7%
104,121
233,438
35,920
53,194
95,505
87,588
59,874
11,054
16,660
630,086
525,336
104,750
225,627
35,892
53,149
98,837
88,883
60,621
11,069
17,193
633,390
527,419
105,971
227,342
36,892
53,157
99,826
89,510
61,108
11,189
17,213
638,350
532,197
106,153
229,234
36,673
53,148
94,116
88,167
60,685
11,126
16,356
644,894
538,053
106,841
232,639
37,972
53,020
95,518
88,747
61,042
11,036
16,669
655,149
545,970
109,179
233,334
38,112
53,210
98,632
88,168
60,800
10,736
16,632
659,826
550,630
109,1%
233,827
38,690
53,265
99,550
88,941
61,175
10,848
16,918
665,843
556,3%
109,447
234,910
38,942
53,364
102,963
1. Contra-assets are credit-balance accounts that must be subtracted from the
corresponding gross asset categories to yield net asset levels. Contra-assets to
mortgage loans, contracts, and pass-through securities include loans in process,
unearned discounts and deferred loan fees, valuation allowances for mortgages
"held for sale," and specific reserves and other valuation allowances.
2. Contra-assets are credit-balance accounts that must be subtracted from the
corresponding gross asset categories to yield net asset levels. Contra-assets to
nonmortgage loans include loans in process, unearned discounts and deferred loan
fees, and specific reserves and valuation allowances.
3. Holding of stock in Federal Home Loan Bank and Finance leases plus
interest are included in " O t h e r " (line 9).
4. Excludes checking, club, and school accounts.
5. Data include all federally insured credit unions, both federal and state
chartered, serving natural persons.
6. Direct and guaranteed obligations. Excludes federal agency issues not
guaranteed, which are shown in the table under "Business" securities.
7. Issues of foreign governments and their subdivisions and bonds of the
International Bank for Reconstruction and Development.
n. a.
NOTE. FSLIC-insured institutions: Estimates by the FHLBB for all institutions
insured by the FSLIC and based on the FHLBB thrift Financial Report.
FSLIC-insured federal savings banks: Estimates by the FHLBB for federal
savings banks insured by the FSLIC and based on the FHLBB thrift Financial
Report.
Savings banks: Estimates by the National Council of Savings Institutions for all
savings banks in the United States and for FDIC-insured savings banks that have
converted to federal savings banks.
Credit unions: Estimates by the National Credit Union Administration for
federally chartered and federally insured state-chartered credit unions serving
natural persons.
Life insurance companies: Estimates of the American Council of Life Insurance
for all life insurance companies in the United States. Annual figures are annualstatement asset values, with bonds carried on an amortized basis and stocks at
year-end market value. Adjustments for interest due and accrued and for
differences between market and book values are not made on each item separately
but are included, in total, in "other assets."
A28
DomesticNonfinancialStatistics • September 1989
1.38 FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Calendar year
Type of account or operation
Fiscal
year
1986
Fiscal
year
1987
Fiscal
year
1988
1989
Feb.
Apr.
May
June
128,952
99,679
29,273
88,381
71,798
16,582
40,572
27,881
12,691
71,115
49,493
21,622
96,581
77,851
18,730
-25,466
-28,358
2,891
108,317
84,110
24,206
100,528
83,994
16,534
7,789
116
7,673
1
U.S. budget
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
10
769,091
568,862
200,228
990,258
806,760
183,498
-221,167
-237,898
16,731
Source of financing (total)
Borrowing from the public
11
Operating cash (decrease, or increase
12
Othei^!!'.;'.!'.!'.'.!'.'.'.'.'.'.'.'.'.'.'.'.'.'.!'.'.'.'.
854,143
640,741
213,402
1,003,830
809,998
193,832
-149,687
-169,257
19,570
908,953
667,462
241,491
1,064,044
861,352
202,691
-155,090
-193,890
38,800
89,369
65,250
24,119
86.563
68,999
17.564
2,806
-3,749
6,555
61,978
38,473
23,505
89,850
71,324
18,526
-27,871
-32,851
4,979
68,276
44,677
23,598
104,055
85,191
18,864
-35,779
-40,513
4,735
150,070
162,062
7,359
17,190
13,405
-1,291
10,214
1,098
-14,324
-696
-5,052
4,669
-7,963
991
-8,135
-2,030
17,009
-6,328
10,154
12,221
-38,788
-493
21,396
-6,144
-11,649
2,762
31,384
7,514
23,870
36,436
9,120
27,316
44,398
13,024
31,375
41,835
11,766
30,069
24,826
6,298
18,528
14,672
4,462
10,211
53,461
22,952
30,508
32,065
5,289
26,776
43,713
12,154
31,560
MEMO
13 Treasury operating balance (level, end of
period)
14 Federal Reserve Banks
15 Tax and loan accounts
1. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. The Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the FFB to finance their programs. The act has also moved two
social security trust funds (Federal old-age survivors insurance and Federal
disability insurance trust funds) off-budget.
2. Includes SDRs; reserve position on the U.S. quota in the IMF; loans to
international monetary fund; other cash and monetary assets; accrued interest
payable to the public; allocations of special drawing rights; deposit funds;
miscellaneous liability (including checks outstanding) and asset accounts;
seigniorage; increment on gold; net gain/loss for U.S. currency valuation adjustment; net gain/loss for IMF valuation adjustment; and profit on the sale of gold.
SOURCE. Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government and the Budget of the U.S. Government.
Federal Finance
A29
1.39 U.S. BUDGET RECEIPTS AND OUTLAYS 1
Millions of dollars
Calendar year
Source or type
Fiscal
year
1987
Fiscal
year
1988
1988
1987
H2
1989
1989
HI
H2
HI
Apr.
May
June
RECEIPTS
854,143
1 All sources
2 Individual income taxes, net
3
Withheld
Presidential Election Campaign Fund
4
5
Nonwithheld
6
Refunds
Corporation income taxes
7
Gross receipts
8
Refunds
9 Social insurance taxes and contributions,
net
10
Employment taxes and
contributions
11
Self-employment taxes and
contributions
12
Unemployment insurance
13 Other net receipts
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts
908,954
421,712
476,115
449,821
528,007
128,952
71,115
108,317
392,557
322,463
33
142,957
72,896
401,181
341,435
33
132,199
72,487
192,575
170,203
4
31,223
8,853
207,659
169,300
28
101,614
63,283
200,299
179,600
4
29,880
9,187
233,568
174,230
28
121,563
62,255
68,533
23,649
6
61,704
16,826
25,336
29,085
8
14,842
18,599
49,876
33,338
4
18,509
1,975
102,859
18,933
109,683
15,487
52,821
7,119
58,002
8,706
56,409
7,384
61,585
7,812
16,412
1,723
2,994
1,068
21,418
849
303,318
334,335
143,755
181,058
157,603
200,127
39,4%
35,349
31,276
273,028
305,093
130,388
164,412
144,983
184,569
36,775
27,281
30,572
13,987
25,575
4,715
17,691
24,584
4,659
1,889
10,977
2,390
14,839
14,363
2,284
3,032
10,359
2,262
16,371
13,279
2,277
8,900
2,375
346
1,281
7,661
407
2,389
294
410
32,457
15,085
7,493
19,307
35,540
16,198
7,594
19,909
17,680
7,993
3,610
10,399
16,440
7,913
3,863
9,950
19,434
8,535
4,054
10,873
17,371
8,350
4,583
10,235
2,616
1,263
1,146
1,209
3,640
1,466
793
2,605
2,987
1,482
736
1,389
1,003,830
1,064,055
532,839
513,210
553,217
565,958
88,381
96,581
100,528
281,999
11,649
9,216
4,115
13,363
26,606
290,361
10,471
10,841
2,297
14,606
17,210
146,995
4,487
5,469
1,468
7,590
14,640
143,080
7,150
5,361
555
6,776
7,872
150,4%
2,636
5,852
1,966
8,330
7,725
148,098
6,605
6,238
2,221
7,022
9,619
21,247
1,366
929
280
951
2,364
25,012
1,398
1,128
267
1,3%
1,470
29,037
867
1,171
509
1,419
504
6,182
26,222
5,051
18,808
27,272
5,294
3,852
14,096
2,075
5,951
12,700
2,765
20,274
14,922
2,690
4,129
13,023
1,833
1,334
1,746
241
558
2,668
-25
973
2,397
563
OUTLAYS
18 All types
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services
29,724
31,938
15,592
15,451
16,152
18,0%
2,859
3,039
2,654
29 Health
30 Social security and medicare
31 Income security
39,968
282,472
123,250
44,490
297,828
129,332
20,750
158,469
61,201
22,643
135,322
65,555
23,360
149,508
64,978
24,078
162,195
70,937
4,028
25,877
11,612
4,454
27,067
12,106
4,270
30,430
9,826
32
33
34
35
36
37
26,782
7,548
5,948
1,621
138,570
-36,455
29,428
9,223
7,658
1,816
151,748
-36,967
14,956
4,291
3,560
1,175
71,933
-17,684
13,241
4,761
4,337
448
76,098
-17,766
15,797
4,778
5,137
0
78,317
-18,771
14,891
5,233
3,858
0
86,009
-18,131
1,251
949
156
0
14,076
-2,887
2,809
1,066
872
n.a.
14,605
3,590
851
1,140
n.a.
13,376
-3,050
Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Net interest 8
,
Undistributed offsetting receipts
1. Functional details do not add to total outlays for calendar year data because
revisions to monthly totals have not been distributed among functions. Fiscal year
total for outlays does not correspond to calendar year data because revisions from
the Budget have not been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Federal employee retirement contributions and civil service retirement and
disability fund.
-3,309
5. Deposits of earnings by Federal Reserve Banks and other miscellaneous
receipts.
6. Net interest function includes interest received by trust funds.
7. Consists of rents and royalties on the outer continental shelf and U.S.
government contributions for employee retirement.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government, and the U.S. Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 1990.
A30
DomesticNonfinancialStatistics • September 1989
1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars
1987
1989
1988
Item
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
1 Federal debt outstanding
2,250.7
2,313.1
2,354.3
2,435.2
2,493.2
2,555.1
2,614.6
2,707.3
2,763.6
2 Public debt securities
3
Held by public
4
Held by agencies
2,246.7
1,839.3
407.5
2,309.3
1,871.1
438.1
2,350.3
1,893.1
457.2
2,431.7
1,954.1
477.6
2,487.6
1,996.7
490.8
2,547.7
2,013.4
534.2
2,602.2
2,051.7
550.4
2,684.4
2,095.2
589.2
2,740.9
2,133.4
607.5
4.0
2.9
1.1
3.8
2.8
1.0
4.0
3.0
1.0
3.5
2.7
.8
5.6
5.1
.6
7.4
7.0
.5
12.4
12.2
.2
22.9
22.6
.3
22.7
22.3
.4
5 Agency securities
6
Held by public
7
Held by agencies
2,232.4
2,295.0
2,336.0
2,417.4
2,472.6
2,532.2
2,586.9
2,669.1
2,725.6
9 Public debt securities
10 Other debt 1
8 Debt subject to statutory limit
2,231.1
1.3
2,293.7
1.3
2,334.7
1.3
2,416.3
1.1
2,472.1
.5
2,532.1
.1
2,586.7
.1
2,668.9
.2
2,725.5
.2
11 MEMO: Statutory debt limit
2,300.0
2,320.0
2,800.0
2,800.0
2,800.0
2,800.0
2,800.0
2,800.0
1. Includes guaranteed debt of Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District
of Columbia stadium bonds.
1.41 GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCES. Treasury Bulletin and Monthly
United States.
2,800.0
Statement
of the Public Debt of the
Types and Ownership
Billions of dollars, end of period
1988
Type and holder
1985
1986
1988
Q2
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
By type
Interest-bearing debt
Marketable
Bills
Notes
Bonds
Nonmarketable
State and local government series
Foreign issues
Government
Public
Savings bonds and notes
Government account series
14 Non-interest-bearing debt
15
16
17
18
19
20
21
22
23
24
25
26
By holder4
U.S. government agencies and trust funds
Federal Reserve Banks
Private investors
Commercial banks
Money market funds
Insurance companies
Other companies
State and local Treasurys
Individuals
Savings bonds
Other securities
Foreign and international
Other miscellaneous investors
Q4
Q1
1,945.9
2,214.8
2,431.7
2,684.4
2,547.7
2,602.2
2,684.4
2,740.9
1,943.4
1,437.7
399.9
812.5
211.1
505.7
87.5
7.5
7.5
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
2,428.9
1,724.7
389.5
1,037.9
282.5
704.2
139.3
4.0
4.0
.0
99.2
461.3
2,663.1
1,821.3
414.0
1,083.6
308.9
841.8
151.5
6.6
6.6
.0
107.6
575.6
2,545.0
1,769.9
382.3
1,072.7
299.9
775.1
146.9
5.7
5.7
.0
104.5
517.5
2,599.9
1,802.9
398.5
1,089.6
299.9
797.0
147.6
6.3
6.3
.0
106.2
536.5
2,663.1
1,821.3
414.0
1,083.6
308.9
841.8
151.5
6.6
6.6
.0
107.6
575.6
2.738.3
1,871.7
417.0
1.121.4
318.4
866.6
154.4
6.7
6.7
.0
110.4
594.7
2.5
2.8
2.8
21.3
2.7
2.3
21.3
2.6
403.1
211.3
477.6
222.6
1,745.2
589.2
238.4
1,852.8
195.0
534.2
227.6
1,784.9
202.5
13.1
132.2
86.5
286.3
550.4
229.2
1,819.0
203.0
10.8
135.0
86.0
287.0
589.2
238.4
1,852.8
195.0
607.5
228.6
1,900.2
n.a.
n.a.
n.a.
n.a.
n.a.
.0
348.9
181.3
1,417.2
198.2
25.1
78.5
59.0
226.7
79.8
75.0
212.5
462.4
1. Includes (not shown separately): Securities issued to the Rural Electrification Administration; depository bonds, retirement plan bonds, and individual
retirement bonds.
2. Nonmarketable dollar-denominated and foreign currency-denominated series held by foreigners.
3. Held almost entirely by U.S. Treasury agencies and trust funds.
4. Data for Federal Reserve Banks and U.S. Treasury agencies and trust funds
are actual holdings; data for other groups are Treasury estimates.
Q3
1,602.0
203.5
28.0
105.6
68.8
262.8
201.2
84.6
282.6
n.a.
92.3
70.5
251.6
518.9
101.1
72.3
287.3
581.2
109.6
77.8
349.5 r
n.a.
14.3
120.6
18.8
n.a.
86.1
106.2
73.9
332.8 r
551.4 r
107.8
76.7
333.3 r
579.4 r
18.8
n.a.
86.1
n.a.
109.6
77.8
349.5''
n.a.
112.2
n.a.
363.1
n.a.
5. Consists of investments of foreign and international accounts. Excludes
non-interest-bearing notes issued to the International Monetary Fund.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. Treasury deposit accounts, and federally-sponsored agencies.
SOURCES. Data by type of security, U.S. Treasury Department, Monthly
Statement of the Public Debt of the United States; data by holder. Treasury
Bulletin.
Federal Finance
A31
Transactions1
1.42 U.S. GOVERNMENT SECURITIES DEALERS
Par value; averages of daily figures, in millions of dollars
1989
1989
Item
1986
1987
1988
Apr/
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Immediate delivery 2
U.S. Treasury securities
By maturity
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
By type of customer
U.S. government securities
dealers
U.S. government securities
brokers
All others 3
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures contracts
Treasury bills
Treasury coupons
Federal agency securities
Forward transactions
U.S. Treasury securities
Federal agency securities
May
June
May 24
May 31
June 7
June 14
June 21
June 28
95,444
110,050
101,623
108,025
120,937
129,260
131,402r
113,442'
137,737
134,464
116,830
122,744
34,247
2,115
24,667
20,455
13,961
37,924
3,271
27,918
24,014
16,923
29,387
3,426
27,777
24,939
16,093
29,330
3,175
31,432
29,716
14,373
29,376
3,594
38,126
30,673
19,167
30,761
3,388
34,861
35,666
24,585
29,494
3,438
44,123
32,898r
21,449
31,853'
3,172
32,279'
29,672'
16,466'
33,215
3,820
39,013
37,925
23,765
29,154
2,904
32,758
39,466
30,183
28,083
2,719
27,850
33,791
24,388
29,920
3,400
35,386
31,912
22,125
3,669
2,936
2,761
3,379
2,966
3,200
3,245
3,038
3,268
3,035
3,674
2,986
49,558
42,217
16,747
4,355
3,272
16,660
61,539
45,575
18,084
4,112
2,965
17,135
59,844
39,019
15,903
3,369
2,316
22,927
64,431
40,215
17,238
2,946
2,562
30,858
72,410
45,560
16,303
2,650
2,113
29,109
78,131
47,929
19,904
2,940
2,508
32,185
79,524
48,632'
13,952'
2,998
2,005
27,657
66, Wff
44,295'
15,115
2,575'
2,177
29,387
82,777
51,692
19,308
3,544
2,879
31,460
82,067
49,361
22,505
2,831
2,431
29,347
72,166
40,990
19,594
2,678
2,306
32,839
73,008
46,750
17,908
2,870
2,377
34,595
3,311
7,175
16
3,233
8,963
5
2,627
9,695
1
2,782
8,676
0
2,501
10,280
0
1,845
12,844
3
2,519'
12,352'
0
2,738'
9,471
0
1,724
12,326
0
1,663
15,145
0
1,695
12,824
6
1,794
11,578
6
1,876
7,830
2,029
9,290
2,095
8,008
2,021
7,875
2,752
9,976
1,526
9,820
2,378'
10,462
2,920'
6,885
1,337
9,577
1,469
13,017
1,001
10,454
2,489
7,451
1. Transactions are market purchases and sales of securities as reported to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers.
Averages for transactions are based on the number of trading days in the period.
The figures exclude allotments of, and exchanges for, new U.S. Treasury
securities, redemptions of called or matured securities, purchases or sales of
securities under repurchase agreement, reverse repurchase (resale), or similar
contracts.
2. Data for immediate transactions do not include forward transactions.
3. Includes, among others, all other dealers and brokers in commodities and
r
securities, nondealer departments of commercial banks, foreign banking agencies,
and the Federal Reserve System.
4. Futures contracts are standardized agreements arranged on an organized
exchange in which parties commit to purchase or sell securities for delivery at a
future date.
5. Forward transactions are agreements arranged in the over-the-counter
market in which securities are purchased (sold) for delivery after 5 business days
from the date of the transaction for Treasury securities (Treasury bills, notes, and
bonds) or after 30 days for mortgage-backed agency issues.
A32
DomesticNonfinancialStatistics • September 1989
1.43 U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing1
Averages of daily figures, in millions of dollars
1989
1989
1987
Item
Apr.
May'
June
May 31
June 7
June 14
June 21
June 28
Positions
Net immediate 2
U.S. Treasury securities
12,912
-6,216
-22,765
—22,592r
-14,757
-6,279
-11,0W
-7,686
-8,097
-6,556
-6,088
2
3
4
i
6
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
12,761
3,705
9,146
-9,505
-3,197
4,317
1,557
649
-6,564
-6,174
2,238
-2,236
-3,020
-9,663
-10,084
1,445
-963
-5,651
-9,143 r
-8,279
1,162
-1,727
-2,115
-6,055
-6,024
378
-435
4,651
-5,050
-5,822
162'
-786r
1,253
—5,826r
-5,823
424
53
2,504
-4,360
-6,307
-18
-112
2,099
-3,932
-6,134
-443
92
5,051
-5,395
-5,861
1,236
-1,035
5,210
-6,187
-5,313
7
8
9
10
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures positions
Treasury bills
Treasury coupons
Federal agency securities
Forward positions
U.S. Treasury securities
Federal agency securities
32,984
10,485
5,526
8,089
31,911
8,188
3,660
7,496
28,230
7,300
2,486
6,152
28,602'
6,170
2,534
9,158
27,121
5,778
1,948
8,600
29,491
6,037
2,357
8,830
25,287
6,301
1,812
9,328
26,385
6,259
2,170
11,692
29,442
5,844
2,511
9,723
33,221
5,580
2,428
7,484
29,217
6,241
2,462
7,177
-18,059
3,473
-153
-3,373
5,988
-95
-2,210
6,224
0
-5,134
877'
0
-5,729
-290
0
-4,769
-2,306
14
-5,711
-1,840
0
-5,206
-1,444
0
-4,970
-1,400
0
-4,484
-2,231
16
-4,425
-3,144
35
-2,144
-11,840
-1,211
-18,817
346
-16,348
-l,328r
-15,334
-1,378
-16,748
-1,885
-20,200
-982
-17,277
-2,081
-19,026
-1,448
-21,370
-1,699
-22,976
-2,164
-18,169
1
11
12
13
14
15
Financing 3
Reverse repurchase agreements 4
Overnight and continuing
Term
Repurchase agreements
18 Overnight and continuing
19 Term
16
1/
98,913
108,607
126,709
148,288
136,327
177,477
158,142'
226,401r
155,365
229,265
151,403
222,838
162,357
214,547
169,004
235,580
167,094
246,231
169,858
247,857
160,216
250,821
141,823
102,397
170,763
121,270
172,695
137,056
207,749'
172,647r
202,739
185,554
208,376
174,045
221,214
167,241
226,192
175,489
229,709
187,647
234,141
198,493
226,812
204,167
1. Data for dealer positions and sources of financing are obtained from reports
submitted to the Federal Reserve Bank of New York by the U.S. Treasury
securities dealers on its published list of primary dealers.
Data for positions are averages of daily figures, in terms of par value, based on
the number of trading days in the period. Positions are net amounts and are shown
on a commitment basis. Data for financing are in terms of actual amounts
borrowed or lent and are based on Wednesday figures.
2. Immediate positions are net amounts (in terms of par values) of securities
owned by nonbank dealer firms and dealer departments of commercial banks on
a commitment, that is, trade-date basis, including any such securities that have
been sold under agreements to repurchase (RPs). The maturities of some
repurchase agreements are sufficiently long, however, to suggest that the securities involved are not available for trading purposes. Immediate positions include
reverses to maturity, which are securities that were sold after having been
obtained under reverse repurchase agreements that mature on the same day as the
securities. Data for immediate positions do not include forward positions.
3. Figures cover financing involving U.S. Treasury and federal agency securities, negotiable CDs, bankers acceptances, and commercial paper.
4. Includes all reverse repurchase agreements, including those that have been
arranged to make delivery on short sales and those for which the securities
obtained have been used as collateral on borrowings, that is, matched agreements.
5. Includes both repurchase agreements undertaken to finance positions and
"matched book" repurchase agreements.
NOTE. Data on positions for the period May 1 to Sept. 30, 1986, are partially
estimated.
Federal Finance
1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
A33
Debt Outstanding
Millions of dollars, end of period
1989
1987
1986
1985
Agency
1988
Jan.
n.a.
307,361
341,386
381,498
385,959
390,803
397,318
402,734
36,958
33
14,211
138
37,981
13
11,978
183
35,668
8
11,033
150
35,727
8
11,033
143
35,768
8
11,033
165
36,348
8
11,007
172
36,402
7
11,007
182
36,275
7
11,007
1%
2,165
1,940
16,347
74
2,165
3,104
17,222
85
1,615
6,103
18,089
0
0
6,142
18,335
0
0
6,142
18,401
0
0
6,142
18,420
0
0
6,742
18,419
0
0
6,742
18,464
0
0
6,445
18,620
0
257,515
74,447
11,926
93,8%
68,851
8,395
n.a.
n.a.
270,553
88,752
13,589
93,563
62,478
12,171
n.a.
n.a.
303,405
115,725
17,645
97,057
55,275
16,503
1,200
n.a.
345,830
135,834
22,797
105,459
53,127
22,073
5,850
690
350,232
139,804
22,874
104,843
52,319
23,852
5,850
690
355,035
144,343
21,320
105,201
52,441
25,190
5,850
690
360,970
149,950
23,392
104,666
52,069
23,753
6,450
690
366,332
154,146
22,676
104,675
51,678
25,361
6,950
846
n.a.
156,354
21,620
105,404
n.a.
26,469
6,950
846
157,510
152,417
142,850
142,447
142,123
141,864
141,162r
140,220
15,670
1,690
5,000
14,622
74
14,205
2,854
4,970
15,797
85
11,972
5,853
4,940
16,709
0
11,027
5,892
4,910
16,955
0
11,027
5,892
4,910
17,021
0
11,027
5,892
4,910
17,040
0
11,001
6,492
4,910
17,039
0
11,001
6,492
4,910
17,084
0
11,001
6,195
4,910
17,240
0
64,234
20,654
31,429
65,374
21,680
32,545
59,674
21,191
32,078
58,4%
19,246
26,324
58,4%
19,225
25,876
58,4%
19,245
25,513
57,841
19,195
25,386
57,086
19,230
25,359'"
56,311
19,236
25,327
agencies
1. Consists of mortgages assumed by the Defense Department between 1957
and 1963 under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1,1976.
3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the
securities market.
5. Certificates of participation issued before fiscal 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration; Department of Health, Education, and Welfare; Department of Housing
and Urban Development; Small Business Administration; and the Veterans
Administration.
6. Off-budget.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Some data are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation,
shown in line 17.
May
36,390
71
15,678
115
MEMO
18 Federal Financing Bank debt12
Other Lending13
24 Farmers Home Administration
25 Rural Electrification Administration
26 Other
Apr.
153,373
10 Federally sponsored agencies 7
11
Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation
13 Federal National Mortgage Association
14
Farm Credit Banks 8
15
Student Loan Marketing Association 9
16 Financing Corporation
17 Farm Credit Financial Assistance Corporation
19
20
21
22
23
Mar.
293,905
1 Federal and federally sponsored agencies
2 Federal agencies
Defense Department'
3
Export-Import Bank 2 ' 3
4
5
Federal Housing Administration
6
Government National Mortgage Association participation
certificates
7
Postal Service 6
8
Tennessee Valley Authority
United States Railway Association 6
9
Lending to federal and federally sponsored
Export-Import Bank
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6
Feb.
9. Before late 1981, the Association obtained financing through the Federal
Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is
shown on line 21.
10. The Financing Corporation, established in August 1987 to recapitalize the
Federal Savings and Loan Insurance Corporation, undertook its first borrowing in
October 1987.
11. The Farm Credit Financial Assistance Corporation (established in January
1988 to provide assistance to the Farm Credit System) undertook its first
borrowing in July 1988.
12. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Since FFB
incurs debt solely for the purpose of lending to other agencies, its debt is not
included in the main portion of the table in order to avoid double counting.
13. Includes FFB purchases of agency assets and guaranteed loans; the latter
contain loans guaranteed by numerous agencies with the guarantees of any
particular agency being generally small. The Farmers Home Administration item
consists exclusively of agency assets, while the Rural Electrification Administration entry contains both agency assets and guaranteed loans.
A34
DomesticNonfinancialStatistics • September 1989
1.45 NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
1989
Type of issue or issuer,
or use
1986
1988
Nov.
Feb.
Dec.
Mar.
Apr.
Mayr
1 All issues, new and refunding 1
147,011
102,407
108,078
8,551
11,268
6,640
8,054
8,626
7,464
7,435
12,923
Type of issue
2 General obligation
3 Revenue
46,346
100,664
30,589
71,818
29,662
78,417
2,368
6,183
2,491
8,777
1,784
4,856
3,955
4,099
2,185
6,441
2,301
5,163
2,342
5,093
4,581
8,342
Type of issuer
4 State
5 Special district and statutory authority 2
6 Municipalities, counties, and townships
14,474
89,997
42,541
10,102
65,460
26,845
9,254
69,447
29,377
525
5,550
2,476
1,011
7,690
2,567
280
4,882
1,478
1,896
3,832
2,326
256
5,962
2,408
1,407
4,238
1,819
392
4,979
2,064
1,989
7,543
3,392
7 Issues for new capital, total
83,492
56,789
75,064
5,830
8,738
4,141
5,222
6,486
6,061
5,938
11,093
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
12,307
7,246
14,594
11,353
6,190
31,802
9,524
3,677
7,912
13,722
6,974
7,929
17,824
6,276
22,339
827
237
1,055
1,991
294
1,426
2,564
636
463
2,072
1,010
1,993
827
344
1,335
509
293
834
826
382
847
743
250
2,174
1,055
445
901
1,329
253
2,503
1,225
743
759
1,048
374
1,912
1,024
748
467
1,376
361
1,962
3,204
603
1,165
1,944
321
3,856
8
9
10
11
12
13
11,106
7,474
18,020
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts beginning 1986.
1.46 NEW SECURITY ISSUES
SOURCES. Securities Data/Bond Buyer Municipal Data Base beginning 1986.
Public Securities Association for earlier data.
U.S. Corporations
Millions of dollars
1988
Type of issue or issuer,
or use
1986
1987
1989
1988
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
1 All issues1
423,726
392,156
408,790
21,818
24,531
12,389
17,374 r
14,651'
26,434'
14,384'
20,851
2 Bonds 2
355,293
325,648
350,988
19,031
21,096
10,338
14,213 r
12,116'
25,512'
13,396'
19,200
Type of offering
3 Public, domestic
4 Private placement, domestic
5. Sold abroad
231,936
80,760
42,596
209,279
92,070
24,299
200,110
127,700
23,178
17,519
n.a.
1,512
16,798
n.a.
4,298
10,203
n.a.
135
11,353'
n.a.
2,860
9,922'
n.a.
2,194
22,930'
n.a.
2,582
11,471'
n.a.
1,925'
17,200
n.a.
2,000
91,548
40,124
9,971
31,426
16,659
165,564
61,666
49,327
11,974
23,004
7,340
172,343
69,669
61,836
9,975
19,318
5,901
184,286
3,552
764
605
1,346
100
12,664
2,890
3,260
45
672
289
13,940
1,485
748
0
264
158
7,683
1,660
2,047
0
635
0
9,871'
1,319
l,118 r
102
640
230
8,707'
7,456'
882'
0
153
63
16,959'
1,457'
843'
100
1,695'
453'
8,850'
7,528
2,132
150
370
122
8,898
12 Stocks 3
68,433
66,508
57,802
2,787
3,435
2,051
3,161
2,535
921
988
1,651
Type
13 Preferred
14 Common
15 Private placement 3
11,514
50,316
6,603
10,123
43,225
13,157
6,544
35,911
15,346
865
1,922
n.a.
478
2,957
n.a.
495
1,556
n.a.
275
2,886
n.a.
975
1,560
n.a.
310
611
n.a.
495
493
n.a.
375
1,276
n.a.
15,027
10,617
2,427
4,020
1,825
34,517
13,880
12,888
2,439
4,322
1,458
31,521
7,608
8,449
1,535
1,898
515
37,798
288
222
25
282
0
1,970
430
52
20
70
20
2,843
425
89
0
20
59
1,459
33
32
220
1,960
5
911
832
270
0
11
19
1,402
127
336
53
108
0
297
135
280
169
0
93
310
380
115
39
192
224
702
6
7
8
9
10
11
16
17
18
19
20
21
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
1. Figures which represent gross proceeds of issues maturing in more than one
year, are principal amount or number of units multiplied by offering price.
Excludes secondary offerings, employee stock plans, investment companies other
than closed-end, intracorporate transactions, equities sold abroad, and Yankee
bonds. Stock data include ownership securities issued by limited partnerships.
2. Monthly data include only public offerings.
3. Data are not available on a monthly basis. Before 1987, annual totals include
underwritten issues only.
SOURCES. IDD Information Services, Inc., the Board of Governors of the
Federal Reserve System, and before 1989, the U.S. Securities and Exchange
Commission.
Securities Market and Corporate Finance
1.47 OPEN-END INVESTMENT COMPANIES
A35
Net Sales and Asset Position
Millions of dollars
1988
Item
1987
1989
1988
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
INVESTMENT COMPANIES 1
1 Sales of own shares2
381,260
271,237
20,494
20,327
25,780
29,014
22,741
23,149
25,496
24,661
2 Redemptions of own shares 3
3 Net sales
314,252
67,008
267,451
3,786
19,362
1,132
20,599
-272
25,976
-196
24,494
4,520
22,252
489
24,135
-986
26,183
-687
22,483
2,178
4
453,842
472,297
481,571
470,660
472,297
487,204
482,697
483,067
497,329
509,781
5 Cash position 5
6 Other
38,006
415,836
45,090
427,207
45,976
435,595
43,488
427,172
45,090
427,207
49,661
437,543
47,908
434,789
46,262
436,805
48,788
448,541
49,177
460,604
4 Assets
1. Data on sales and redemptions exclude money market mutual funds but
include limited maturity municipal bond funds. Data on asset positions exclude
both money market mutual funds and limited maturity municipal bond funds.
2. Includes reinvestment of investment income dividends. Excludes reinvestment of capital gains distributions and share issue of conversions from one fund
to another in the same group.
3. Excludes share redemption resulting from conversions from one fund to
another in the same group.
4. Market value at end of period, less current liabilities.
5. Also includes all U.S. government securities and other short-term debt
securities.
NOTE. Investment Company Institute data based on reports of members, which
comprise substantially all open-end investment companies registered with the
Securities and Exchange Commission. Data reflect newly formed companies after
their initial offering of securities.
SOURCE. Survey of Current Business (Department of Commerce).
1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1987'
Account
1986'
1987'
1988'
1989
1988'
Q2
1 Corporate profits with inventory valuation and
capital consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits
Q3
Q4
Q1
Q2
Q3
Q4
Ql'
282.1
221.6
106.3
115.3
91.3
24.0
7 Inventory valuation
8 Capital consumption adjustment
298.7
266.7
124.7
142.0
98.7
43.3
328.6
306.8
137.9
168.9
110.4
58.5
293.7
263.4
124.0
139.4
96.9
42.6
313.0
281.0
132.7
148.3
100.0
48.3
308.2
276.2
127.3
148.9
102.8
46.1
318.1
288.8
129.0
159.9
105.7
54.2
325.3
305.3
138.4
166.9
108.6
58.3
330.9
314.4
141.2
173.2
112.2
61.1
340.2
318.8
143.2
175.6
115.2
60.4
316.3
318.0
144.4
173.6
118.5
55.1
6.7
53.8
2
3
4
5
6
-18.9
50.9
-25.0
46.8
-20.0
50.3
-19.4
51.5
-20.4
52.4
-20.7
49.9
-28.8
48.9
-30.4
46.9
-20.1
41.5
-38.3
36.6
• T r a d e and services are no longer being reported separately. They are included
in Commercial and other, line 10.
1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment A
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1987
Industry
1987
1988
1988
1989
19891
Q4
1 Total nonfarm business
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
Nonmanufacturing
4 Mining
Transportation
5
Railroad
6
Air
7
Other
Public utilities
8
Electric
9
Gas and other
10 Commercial and other 2
Q2
Q3
Q4
Ql
Q21
Q31
389.67
429.67
468.78
417.25
422.75
429.01
440.42
445.73
465.51
467.50
478.79
71.01
74.88
78.12
87.58
82.65
96.01
76.40
86.05
80.13
81.00
79.00
83.82
80.59
85.78
78.97
90.00
83.12
96.77
80.21
96.89
84.08
98.61
11.39
12.67
11.79
11.74
12.26
12.87
12.74
11.97
11.89
13.08
12.21
5.92
6.53
6.40
7.06
7.25
7.04
25.17
8.04
9.95
7.08
7.03
6.48
7.29
7.72
7.48
6.78
7.44
6.58
7.07
9.31
7.06
8.07
6.84
7.20
8.17
10.15
7.11
7.10
8.60
7.42
7.13
10.94
7.78
31.63
13.25
168.65
31.90
14.60
183.44
33.09
16.47
203.60
33.32
12.84
176.29
31.59
14.56
180.72
32.55
13.81
186.15
33.79
14.26
189.82
33.54
15.25
193.87
32.70
16.92
198.70
35.71
15.71
202.79
34.39
15.79
207.86
1. Anticipated by business.
2. "Other" consists of construction; wholesale and retail trade; finance and
Ql
insurance; personal and business services; and communication.
SOURCE. Survey of Current Business (Department of Commerce).
A36
DomesticNonfinancialStatistics • September 1989
Assets and Liabilities1
1.51 DOMESTIC FINANCE COMPANIES
Billions of dollars, end of period
1986
Account
1983
1984
1987
1985
Q2
Q3
Q4
Q1
Q2
Q3
Q4
ASSETS
Accounts receivable, gross
Consumer
Business
Real estate
Total
83.3
113.4
20.5
217.3
89.9
137.8
23.8
251.5
111.9
157.5
28.0
297.4
123.4
166.8
29.8
320.0
135.3
159.7
31.0
326.0
134.7
173.4
32.6
340.6
131.1
181.4
34.7
347.2
134.7
188.1
36.5
359.3
141.6
188.3
38.0
367.9
141.1
207.6
39.5
388.2
Less:
5 Reserves for unearned income
6 Reserves for losses
30.3
3.7
33.8
4.2
39.2
4.9
40.7
5.1
42.4
5.4
41.5
5.8
40.4
5.9
41.2
6.2
42.5
6.5
45.3
6.8
7 Accounts receivable, net
8 All other
183.2
34.4
213.5
35.7
253.3
45.3
274.2
49.5
278.2
60.0
293.3
58.6
300.9
59.0
311.9
57.7
318.9
64.5
336.1
58.2
9 Total assets
217.6
249.2
298.6
323.7
338.2
351.9
359.9
369.6
383.4
394.3
10 Bank loans
11 Commercial paper
18.3
60.5
20.0
73.1
18.0
99.2
16.3
108.4
16.8
112.8
18.6
117.8
17.2
119.1
17.3
120.4
15.9
124.2
16.4
128.4
12
Other short-term
13
Long-term
14
All other liabilities
15 Capital, surplus, and undivided profits
11.1
67.7
31.2
28.9
12.9
77.2
34.5
31.5
12.7
94.4
41.5
32.8
15.8
106.9
40.9
35.4
16.4
111.7
45.0
35.6
17.5
117.5
44.1
36.4
21.8
118.7
46.5
36.6
24.8
121.8
49.1
36.3
26.9
128.2
48.6
39.5
28.0
137.1
52.8
31.5
217.6
249.2
298.6
323.7
338.2
351.9
359.9
369.6
383.4
394.3
1
2
3
4
LIABILITIES
16 Total liabilities and capital
1. NOTE. Components may not add to totals because of rounding.
1.52 DOMESTIC FINANCE COMPANIES
Data after 1987:4 are currently unavailable. It is anticipated that these data will
be available later this year.
Business Credit Outstanding and Net Change1
Millions of dollars, seasonally adjusted
Type
1986
1987
1988
Jan.
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
Retail financing of installment sales
Automotive
Equipment
Pools of securitized assets
Wholesale
Automotive
Equipment
All other
Pools of securitized assets 2
Leasing
Automotive
Equipment
Pools of securitized assets
Loans on commercial accounts receivable and factored
commercial accounts receivable
All other business credit
Feb.
Mar.
Apr.
May
172,060
205,810
234,529
235,969
237,378
240,186
244,882
245,861
26,015
23,112
n.a.
35,782
25,170
n.a.
36,548
28,298
n.a.
37,041
28,429
724
37,301
28.385
682
37,696
28,207
855
38,415
28,790
817
38,816
27,638
846
23,010
5,348
7,033
n.a.
30,507
5,600
8,342
n.a.
33,300
5,983
9,341
n.a.
33,664
6,183
9,493
34.386
6,193
9,569
33,528
6,088
9,682
34,383
6,153
9,852
34,534
6,096
9,929
19,827
38,179
n.a.
21,952
43,335
n.a.
24,673
57,455
n.a.
24,558
58,354
721
24,847
58,045
699
25,584
59,484
756
25,544
60,246
733
26,011
61,022
824
15,978
13,557
18,078
17,043
17,7%
21,134
16,688
20,114
17,404
19,867
17,794
20,512
18,677
21,272
18,772
21,371
0
0
0
0
0
Net change
14
15
16
17
18
19
20
21
22
23
24
25
26
15,763
Retail financing of installment sales
Automotive
Equipment
Pools of securitized assets
Wholesale
Automotive
Equipment
All other
Pools of securitized assets 2
Leasing
Automotive
Equipment
Pools of securitized assets 2
Loans on commercial accounts receivable and factored
commercial accounts receivable
All other business credit
33,750
28,719
-4
1,409
2,808
4,6%
978
5,355
629
n.a.
9,767
2,058
n.a.
766
3,128
n.a.
493
131
n.a.
260
-43
-42
394
-178
173
720
583
-38
401
-1,152
29
-978
780
224
n.a.
7,497
252
1,309
n.a.
2,793
383
999
n.a.
364
200
152
n.a.
722
10
76
0
-858
-105
114
0
856
65
170
0
151
-56
78
0
3,552
3,411
n.a.
2,125
5,156
n.a.
2,721
14,120
n.a.
-115
-506
n.a.
289
-310
-22
736
1,439
57
-40
762
-23
467
776
91
213
2,576
2,100
3,486
-282
4,091
-1,108
385
716
-247
390
645
883
760
95
100
1. These data also appear in the Board's G.20 (422) release. For address, see
inside front cover.
2. Data on pools of securitized assets are not seasonally adjusted,
Real Estate
1.53
A37
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1988
Item
1986
1987
1989
1988
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
6
Conventional mortgages on new homes
Terms
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan/price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount)
Contract rate (percent per year)
Yield (percent per year)
7 FHLBB series 3
8 HUD series 4
118.1
86.2
75.2
26.6
2.48
9.82
137.0
100.5
75.2
27.8
2.26
8.94
150.0
110.5
75.5
28.0
2.19
8.81
150.0
110.8
75.6
28.3
2.08
9.04
165.2
121.3
75.2
28.8
1.90
9.20
153.7
111.8
73.5
28.3
2.14
9.46
159.7
117.7
74.4
27.7
2.11
9.63
169.2
124.5
75.0
28.4
1.70
9.88
151.8'
112.3r
75.3'
28.3 r
2.12'
9.82
150.5
111.0
75.2
27.8
1.91
10.09
10.26
10.07
9.31
10.17
9.18
10.30
9.39
10.67
9.52
10.55
9.82
10.75
9.99
10.93
10.17
10.84
10.18
10.43
10.42
10.04
9.91
9.30
10.16
9.43
10.49
9.83
10.81
10.07
10.69
10.02
10.88
10.07
11.16
10.38
10.88
10.36
10.55
10.11
10.08
9.75
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (HUD series) 5
10 GNMA securities 6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 FHA/VA-insured
13 Conventional
98,048
29,683
68,365
95,030
21,660
73,370
101,329
19,762
81,567
103,013
19,415
83,598
102,370
19,354
83,016
101,922
19,275
82,647
101,991
19,337
82,654
102,191
19,607
82,584
102,564
19,612
82,952
103,309
19,586
83,723
Mortgage transactions (during period)
14 Purchases
30,826
20,531
23,110
1,726
1,037
905
1,469
1,163
1,419
1,862
Mortgage
commitments7
15 Contracted (during period)
16 Outstanding (end of period)
32,987
3,386
25,415
4,886
23,435
2,148
1,350
2,148
1,087
2,081
3,557
4,520
1,771
4,807
1,118
4,661
1,626'
4,673'
2,573
5,236
13,517
746
12,771
12,802
686
12,116
15,105
620
14,485
17,425
590
16,834
18,378
594
17,785
18,473
594
17,880
18,714
593
16,135
18,918
599
18,320
19,443
586
18,857
Mortgage transactions (during period)
20 Purchases
21 Sales
103,474
100,236
76,845
75,082
44,077
39,780
5,843
5,510
3,586
3,408
5,088
4,385
6,373
6,037
5,861
5,554'
5,141
4,474'
n.a.
6,331
Mortgage
commitments9
22 Contracted (during period)
110,855
71,467
66,026
10,101
5,206
8,411
11,227
4,196
5,186
n.a.
FEDERAL H O M E L O A N MORTGAGE CORPORATION
Mortgage holdings (end of period)*
17 Total
18 FHAWA
19 Conventional
1. Weighted averages based on sample surveys of mortgages originated by
major institutional lender groups; compiled by the Federal Home Loan Bank
Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the
borrower or the seller) to obtain a loan.
3. Average effective interest rates on loans closed, assuming prepayment at the
end of 10 years.
4. Average contract rates on new commitments for conventional first mortgages; from Department of Housing and Urban Development.
5. Average gross yields on 30-year, minimum-downpayment, Federal Housing
Administration-insured first mortgages for immediate delivery in the private
secondary market. Based on transactions on first day of subsequent month. Large
monthly movements in average yields may reflect market adjustments to changes
in maximum permissable contract rates.
n.a.
n.a.
n.a.
6. Average net yields to investors on Government National Mortgage Association guaranteed, mortgage-backed, fully modified pass-through securities, assuming prepayment in 12 years on pools of 30-year FHAA^A mortgages carrying
the prevailing ceiling rate. Monthly figures are averages of Friday figures from the
Wall Street Journal.
7. Includes some multifamily and nonprofit hospital loan commitments in
addition to 1- to 4-family loan commitments accepted in FNMA's free market
auction system, and through the FNMA-GNMA tandem plans.
8. Includes participation as well as whole loans.
9. Includes conventional and government-underwritten loans. FHLMC's mortgage commitments and mortgage transactions include activity under mortgage/
securities swap programs, while the corresponding data for FNMA exclude swap
activity.
A38
DomesticNonfinancialStatistics • September 1989
1.54 MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
Type of holder, and type of property
1987
Q4
Q1
Q2
Q3
1 All holders.
2,597,175
2,943,222
3,200,411
2,943,222
2,984,027
3,058,006
3,132,353
2
3
4
5
1,698,524
247,831
555,039
95,781
1,925,189
273,899
655,266
88,868
2,115,184
287,611
711,093
86,523
1,925,189
273,899
655,266
88,868
1,951,400
278,144
666,461
88,022
2,012,270
278,919
679,037
87,780
2,067,929
281,468
695,774
87,182
1,507,289
502,534
235,814
31.173
222.799
12,748
1,700,820
591,151
275,761
33,296
267,663
14,431
1,852,593
665,458
313,897
34,715
301,236
15,610
1,700,820
591,151
275,761
33,296
267,663
14,431
1,723,937
604,468
280,757
33,728
275,360
14,623
1,764,221
628,383
295,425
34,184
283,598
15,176
1,813,470
649,135
306,118
33,855
293,772
15,390
777,312
558,412
97,059
121,236
605
193,842
12,827
20,952
149,111
10,952
33,601
856,945
598,886
106,359
150,943
908,355
648,275
108,319
151,016
856,945
598,886
106,359
150,943
863,245
603,516
107,722
151,251
872,450
615,795
106.367
149,536
895,230
636,794
106,377
151,307
' 2I2,375
13,226
22,524
166,722
9,903
40,349
' 233,814
15,361
23,681
185,592
9,180
44,966
' 2i2,375
13,226
22,524
166,722
9,903
40,349
214,815
13,653
22,723
168,774
9,665
41,409
' '220,870
14,172
23,021
174,086
9,591
42,518
' '225,627
14,917
23,139
178,166
9,405
43,478
203.800
889
47
842
48,421
21,625
7,608
8,446
10,742
192,721
444
25
419
43,051
18,169
8,044
6,603
10,235
198,549
67
53
14
42,018
18,347
8,513
5,343
9,815
192,721
444
25
419
43,051
18,169
8,044
6,603
10,235
196,909
434
25
409
43,076
18,185
8,115
6,640
10,136
199,474
42
24
10,018
198,027
64
51
13
41,836
18,268
8,349
5,300
9,919
5,047
2,386
5,574
2,557
3,017
96,649
89,666
6,983
34,131
32,123
12,872
11,430
1,442
5,975
2,649
3,326
103,013
95,833
7,180
32,115
1,890
30,225
15,361
13,058
2,303
5,574
2,557
3,017
96,649
89,666
6,983
34,131
2,008
32,123
12,872
11,430
1,442
5,660
2,608
3,052
99,787
92,828
6,959
33,566
1,975
31,591
14,386
12,749
1,637
5,673
2,564
3,109
102.368
95,404
6,964
33,048
1,945
31,103
15,576
13,631
1,945
5,666
2,432
3,234
102,453
95,417
7,036
32,566
1,917
30,649
15,442
13,322
2,120
565,428
262,697
256,920
5,777
171,372
166,667
4,705
97.174
95,791
1,383
348
142
718,297
317,555
309,806
7,749
212,634
205,977
6,657
139,960
137,988
1,972
245
121
809,448
340,527
331,257
9,270
224,967
218,513
6,454
178,250
172,331
5,919
104
26
718,297
317,555
309,806
7,749
212,634
205,977
6,657
139,960
137,988
1,972
245
121
732,071
318,703
310,473
8,230
214,724
208,138
6,586
145,242
142,330
2,912
172
65
754,045
322,616
314,728
7,888
216,155
209,702
6,453
157,438
153,253
4,185
106
23
782,802
333,177
324,573
8,604
220,684
214,195
6,489
167,170
132
74
63
61
38
40
63
61
58
49
41
42
38
41
320,658
177,374
66,940
53,315
23,029
331,384
171,317
75,437
63,272
21,358
339,821
173,128
77,917
67,868
20,908
331,384
171,317
75,437
63,272
21,358
331,110
169,459
76,071
64,378
21,202
340,266
177,108
76,572
65,488
21,098
338,054
172,527
77,310
67,191
21,026
1- to 4-family
Multifamily..
Commercial .
Farm
6 Selected financial institutions .
Commercial banks 2 .
1- to 4-family
Multifamily..
Commercial .
Farm
Savings institutions
1- to 4-family
Multifamily
Commercial
Farm
Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm
Finance companies 4
23 Federal and related agencies
24
Government National Mortgage Association.
25
1- to 4-family
26
Multifamily
27
Farmers Home Administration
28
1- to 4-family
29
Multifamily
30
Commercial
31
Farm
Federal Housing and Veterans Administration.
1- to 4-family
Multifamily
Federal National Mortgage Association
1- to 4-family
Multifamily
Federal Land Banks
1- to 4-family
Farm
Federal Home Loan Mortgage Corporation . . .
1- to 4-family
Multifamily
44 Mortgage pools or trusts
45
Government National Mortgage Association.
1- to 4-family
Multifamily
Federal Home Loan Mortgage Corporation .
1- to 4-family
Multifamily
Federal National Mortgage Association
1- to 4-family
Multifamily
Farmers Home Administration
1- to 4-family
Multifamily
Commercial
Farm
59 Individuals and others
60
1- to 4-family
61
Multifamily
62
Commercial
63
Farm
7
2,661
97,895
90,718
7,177
39,984
2,353
37,631
11,564
10,010
1,554
1. Based on data from various institutional and governmental sources, with
some quarters estimated in part by the Federal Reserve. Multifamily debt refers
to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not bank trust
departments.
3. Includes savings banks and savings and loan associations. Beginning 1987:1,
data reported by FSLIC-insured institutions include loans in process and other
contra assets (credit balance accounts that must be subtracted from the corresponding gross asset categories to yield net asset levels).
4. Assumed to be entirely 1- to 4-family loans.
2,008
18
42,767
18,248
8,213
6,288
162,228
4,942
106
27
5. 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.
6. Outstanding principal balances of mortgage pools backing securities insured
or guaranteed by the agency indicated. Includes private pools which are not
shown as a separate line item.
7. Other holders include mortgage companies, real estate investment trusts,
state and local credit agencies, state and local retirement funds, noninsured
pension funds, credit unions, and other U.S. agencies.
Consumer Installment Credit
A39
1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change, seasonally adjusted
Millions of dollars
1989
1988
Holder, and type of credit
1987
1988
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Amounts outstanding (end of period)
607,721
659,507
646,556
649,132
654,413
659,507
682,020
687,397
691,162
693,654
697,256
By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
Pools of securitized assets
282,910
140,281
80,087
40,975
59,851
3,618
n.a.
318,925
145,180
86,118
43,498
62,099
3,687
n.a.
310,132
143,019
84,900
42,349
62,502
3,655
n.a.
312,588
143,012
85,338
42,614
61,926
3,654
n.a.
316,683
143,488
85,740
42,910
61,922
3,671
n.a.
318,925
145,180
86,118
43,498
62,099
3,687
n.a.
316,797
141,795
87,093
40,986
62,867
3,655
28,827
318,423
143,419
87,813
41,052
63,109
3,677
29,903
318,242
143,070
88,514
41,300
62,735
3,682
33,487
320,458
144,378
89,072
41,301
61,919
3,787
32,737'
323,078
145,523
89,735
41,323
61,429
3,809
32,359
By major type of credit
9 Automobile
10 Commercial banks
Credit unions
11
12
Finance companies
Savings institutions
n
14 Pools of securitized assets 4
265,976
109,201
40,351
98,195
18,228
n.a.
281,174
123,259
41,326
97,204
19,385
n.a.
279,243
120,525
41,250
97,257
20,211
n.a.
278,902
120,939
41,293
96,877
19,793
n.a.
279,926
122,392
41,316
96,657
19,561
n.a.
281,174
123,259
41,326
97,204
19,385
n.a.
286,382
122,160
41,707
87,968
19,506
15,042
288,767
122,983
41,964
88,789
19,464
15,568
288,850
123,062
42,211
89,567
19,231
14,779
289,531
123,878
42,388
90,268
18,866
14,132
290,547
124,962
42,613
90,976
18,601
13,395
15 Revolving
16 Commercial banks
17 Retailers
18 Gasoline companies
19 Savings institutions
20
Credit unions
Pools of securitized assets 4
21
153,884
99,119
36,389
3,618
10,367
4,391
n.a.
174,792
117,572
38,692
3,687
10,151
4,691
n.a.
168,273
112,691
37,682
3,655
9,614
4,632
n.a.
170,131
114,180
37,919
3,654
9,724
4,653
n.a.
173,030
116,593
38,170
3,671
9,923
4,673
n.a.
174,792
117,572
38,692
3,687
10,151
4,691
n.a.
176,716
111,133
36,176
3,655
10,479
4,785
10,489
178,570
111,706
36,257
3,677
10,722
4,866
11,342
182,831
112,553
36,489
3,682
10,860
4,947
14,172
184,486
114,130
36,497
3,787
10,918
5,020
14,134
186,428
115,408
36,504
3,809
11,029
5,100
14,578
26,387
9,220
7,762
9,406
25,744
8,974
7,186
9,583
26,185
9,119
7,334
9,732
26,033
9,225
7,194
9,614
26,005
9,224
7,197
9,584
25,744
8,974
7,186
9,583
26,036
8,974
7,376
9,687
25,992
8,974
7,308
9,710
24,168
8,844
5,687
9,637
23,993
8,836
5,659
9,498
23,978
8,886
5,684
9,408
161,475
65,370
34,324
35,344
4,586
21,850
n.a.
177,798
69,120
40,790
40,102
4,807
22,981
n.a.
172,855
67,798
38,428
39,018
4,667
22,945
n.a.
174,066
68,244
38,941
39,392
4,694
22,794
n.a.
175,452
68,474
39,633
39,752
4,739
22,854
n.a.
177,798
69,120
40,790
40,102
4,807
22,981
n.a.
192,886
74,532
46,451
40,601
4,809
23,196
3,296
194,068
74,760
47,322
40,983
4,795
23,214
2,993
195,314
73,783
47,816
41,357
4,811
23,006
4,536
195,643
73,614
48,451
41,665
4,804
22,638
4,471r
196,302
73,822
48,863
42,022
4,819
22,390
4,386
1 Total
2
3
4
5
6
7
8
22 Mobile home
23
Commercial banks
24
Finance companies
25
Savings institutions
26 Other
27
Commercial banks
28
Finance companies
29
Credit unions
30
Retailers
31
Savings institutions
32
Pools of securitized assets
Net change (during period)
35,674
51,786
1,890
2,576
5,281
5,094
22,513
5,377
3,765
2,492
3,602
19,884
6,349
3,853
1,568
3,689
332
n.a.
36,015
4,899
6,031
2,523
2,248
69
n.a.
2,777
-973
253
228
-341
-54
n.a.
2,456
-7
438
265
-576
-1
n.a.
4,095
476
402
296
-4
17
n.a.
2,242
1,692
378
588
177
16
n.a.
-2,128
-3,385
975
-2,512
768
-32
n.a.
1,626
1,624
720
66
242
22
1,076
-181
-349
701
248
-374
5
3,584
2,216
1,308
558
1
-816
105
-750'
2,620
1,145
663
22
-490
22
-378
By major type of credit
41 Automobile
42
Commercial banks
43
Credit unions
44
Finance companies
Savings institutions
45
46
Pools of securitized assets
18,663
7,919
1,916
5,639
3,188
n.a.
15,198
14,058
975
-991
1,157
n.a.
-342
1,142
-46
-1,448
10
n.a.
-341
414
43
-380
-418
n.a.
1,024
1,453
23
-220
-232
n.a.
1,248
867
10
547
-176
n.a.
5,208
-1,099
381
-9,236
121
n.a.
2,385
823
257
821
-42
526
83
79
247
778
-233
-789
681
816
177
701
-365
-647
1,016
1,084
225
708
-265
-737
47 Revolving
Commercial banks
48
49
Retailers
50
Gasoline companies
51
Savings institutions
52
Credit unions
53
Pools of securitized assets 4
16,871
12,188
1,866
332
1,771
715
n.a.
20,908
18,453
2,303
69
-216
300
n.a.
1,148
1,175
211
-54
-195
11
n.a.
1,858
1,489
237
-1
110
21
n.a.
2,899
2,413
251
17
199
20
n.a.
1,762
979
522
16
228
18
n.a.
1,924
-6,439
-2,516
-32
328
94
n.a.
1,854
573
81
22
243
81
853
4,261
847
232
5
138
81
2,830
1,655
1,577
8
105
58
73
-38
1,942
1,278
7
22
111
80
444
54 Mobile home
55
Commercial banks
56
Finance companies
57
Savings institutions
-968
192
-1,052
-107
-643
-246
-576
177
-92
-21
-35
-36
-152
106
-140
-118
-28
-1
3
-30
-261
-250
-11
-1
292
0
190
104
-44
0
-68
23
-1,824
-130
-1,621
-73
-175
-8
-28
-139
-15
50
25
-90
58 Other
Commercial banks
59
60
Finance companies
Credit unions
61
62
Retailers
63
Savings institutions
64
Pools of securitized assets
1,108
-415
1,761
1,221
-297
-1,162
n.a.
16,323
3,750
6,466
4,758
221
1,131
n.a.
1,176
482
510
288
17
-120
n.a.
1,211
446
513
374
27
-151
n.a.
1,386
230
692
360
45
60
n.a.
2,346
646
1,157
350
68
127
n.a.
15,088
5,412
5,661
499
2
215
n.a.
1,182
228
871
382
-14
18
-303
1,246
-977
494
374
16
-208
1,543
329
-169
635
308
-7
-368
-65r
659
208
412
357
15
-248
-85
33 Total
34
35
36
37
38
39
40
By major holder
Commercial banks
Finance companies
Credit unions
Retailers 3
Savings institutions
Gasoline companies
Pools of securitized assets 4
1. The Board's series cover most short- and intermediate-term credit extended
to individuals that is scheduled to be repaid (or has the option of repayment) in
two or more installments.
These data also appear in the Board's G.19 (421) release. For address, see
inside front cover.
2. More detail for finance companies is available in the G. 20 statistical release.
3. Excludes 30-day charge credit held by travel and entertainment companies.
4. Outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator.
A40
DomesticNonfinancialStatistics • September 1989
1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1
Percent unless noted otherwise
1988
Item
1986
1987
1989
1988
Nov.
Dec
Jan.
Feb.
Mar.
Apr.
INTEREST RATES
1
2
3
4
5
6
Commercial banks 2
48-month new car 3
24-month personal
120-month mobile home
Credit card
Auto finance companies
New car
Used car
O T H E R TERMS
7
8
9
10
11
12
Maturity (months)
New car
Used car
Loan-to-value ratio
New car
Used car
Amount financed (dollars)
New car
Used car
10.85
14.68
13.54
17.78
11.22
18.26
10.45
14.22
13.38
17.92
15.06
13.61
17.77
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
11.76
15.22
14.00
17.83
n.a.
n.a.
n.a.
n.a.
9.44
15.95
10.73
14.60
12.60
15.11
13.20
15.75
13.25
15.80
13.27
15.57
13.07
15.90
13.07
16.12
50.0
42.6
53.5
45.2
56.2
46.7
56.2
46.2
56.3
46.0
56.2
47.8
55.7
47.4
55.4
47.1
11,663
7,824
11,975
7,991
12,068
11,956
8,006
11,819
8,022
11,867
7,958
11.33
14.82
13.99
4
93
10,665
6,555
11,203
7,420
1. These data also appear in the Board's G.19 (421) release. For address, see
inside front cover.
2. Data for midmonth of quarter only.
8,022
3. Before 1983 the maturity for new car loans was 36 months, and for mobile
home loans was 84 months.
4. At auto finance companies.
Flow of Funds
1.57
A41
F U N D S R A I S E D IN U . S . CREDIT M A R K E T S
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1987
Transaction category, sector
1984
1985
1986
1987
1989
1988
1988
Q3
Q4
Q1
Q2
Q3
Q4
Ql
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors
750.8
846.3
837.5
689.0
741.4
659.8
780.3
723.9
710.4
767.8
763.7
742.6
By sector and instrument
2 U.S. government
3 Treasury securities
4
Agency issues and mortgages
198.8
199.0
-.2
223.6
223.7
-.1
215.0
214.7
.4
144.9
143.4
1.5
157.5
140.0
17.4
103.1
104.0
-.9
168.2
163.2
5.0
227.7
228.2
-.5
89.2
81.5
7.7
188.6
167.7
20.9
124.4
82.8
41.6
214.4
215.6
-1.2
5 Private domestic nonfinancial sectors
6
Debt capital instruments
Tax-exempt obligations
7
8
Corporate bonds
Mortgages
9
10
Home mortgages
11
Multifamily residential
Commercial
12
13
Farm
552.0
319.3
50.4
46.1
222.8
136.7
25.2
62.2
-1.2
622.7
452.3
136.4
73.8
242.2
156.8
29.8
62.2
-6.6
622.5
468.4
30.8
121.3
316.3
218.7
33.5
73.6
-9.5
544.0
459.0
34.5
99.9
324.5
234.9
24.4
71.6
-6.4
584.0
426.1
33.1
97.2
295.8
220.0
16.3
61.6
-2.1
556.6
441.2
32.7
100.7
307.8
225.0
23.3
64.3
-4.7
612.2
430.3
33.5
81.6
315.3
222.8
16.1
78.3
-1.9
496.2
358.9
22.8
101.4
234.6
169.6
23.9
47.3
-6.1
621.2
474.8
30.6
117.9
326.3
270.7
4.2
52.7
-1.4
579.3
446.7
41.4
90.3
315.0
231.9
16.0
69.4
-2.4
639.3
423.9
37.5
79.1
307.3
207.8
20.9
77.1
1.5
528.2
372.2
19.7
82.1
270.3
187.4
26.6
61.5
-5.2
14
15
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
232.7
81.6
67.1
21.7
62.2
170.3
82.5
38.6
14.6
34.6
154.1
58.0
65.0
-9.3
40.5
85.1
32.9
10.8
2.3
39.1
157.9
51.1
47.5
11.6
47.7
115.4
54.0
21.7
1.0
38.7
181.8
56.5
75.2
3.9
46.2
137.3
38.6
34.7
-3.8
67.8
146.4
57.5
72.4
4.0
12.5
132.5
31.8
10.7
11.1
78.9
215.4
76.3
72.1
35.1
31.9
156.1
34.9
38.3
34.4
48.4
19
20
21
22
23
24
25
By borrowing sector
State and local governments
Households
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
552.0
27.4
231.5
293.1
-.4
123.2
170.3
622.7
91.8
283.6
247.3
-14.5
129.3
132.4
622.5
44.3
289.2
288.9
-16.3
103.2
202.0
544.0
34.0
267.8
242.2
-10.6
107.9
144.9
584.0
32.0
276.5
275.5
-4.0
85.3
194.2
556.6
34.8
287.3
234.5
-9.4
97.4
146.6
612.2
32.9
277.8
301.5
3.3
116.0
182.1
496.2
17.5
212.6
266.0
-15.7
86.3
195.5
621.2
27.6
330.6
262.9
-3.4
72.3
194.0
579.3
43.5
282.9
252.9
-2.6
96.0
159.5
639.3
39.4
279.8
320.1
5.5
86.7
227.8
528.2
26.0
251.7
250.5
-2.7
78.5
174.6
26 Foreign net borrowing in United States
27
Bonds
28
Bank loans n.e.c
29 Open market paper
30
U.S. government loans
8.4
3.8
-6.6
6.2
5.0
1.2
3.8
-2.8
6.2
-5.9
9.6
3.0
-1.0
11.5
-3.9
4.3
6.8
-3.6
2.1
-1.0
5.9
6.7
-1.8
9.6
-8.6
12.3
6.7
-3.7
21.6
-12.3
13.9
21.6
-6.1
-2.5
.8
-1.0
16.8
.7
1.5
-19.9
5.2
-2.7
-3.5
6.4
5.1
4.4
6.5
2.9
10.7
-15.8
15.0
6.3
-7.4
20.0
-3.9
-7.9
9.5
1.5
11.6
-30.4
31 Total domestic plus foreign
759.2
847.5
847.1
693.3
747.3
672.0
794.2
722.9
715.6
772.2
778.6
734.7
Financial sectors
148.7
198.3
307.0
303.3
254.9
306.4
250.2
193.3
263.3
227.2
335.7
358.1
By instrument
33 U.S. government related
34
Sponsored credit agency securities
35
Mortgage pool securities
36
74.9
30.4
44.4
101.5
20.6
79.9
1.1
187.9
15.2
173.1
-.4
185.8
30.2
156.4
-.7
137.5
44.9
92.6
185.5
32.0
153.5
167.5
71.6
95.9
120.3
56.8
63.4
101.8
9.4
92.4
150.6
42.8
107.8
177.2
70.5
106.7
205.7
81.7
124.0
37 Private financial sectors
38
Corporate bonds
Mortgages
39
40
Bank loans n.e.c
41
Open market paper
42
Loans from Federal Home Loan Banks
73.8
33.0
.4
.7
24.1
15.7
96.7
47.9
.1
2.6
32.0
14.2
119.1
70.9
.1
4.0
24.2
19.8
117.5
67.2
.4
-3.3
28.8
24.4
117.4
50.7
-.1
-6.6
53.6
19.7
120.8
77.7
.2
6.3
14.3
22.2
82.7
42.4
.8
-10.7
5.4
44.9
73.1
70.1
-.1
-26.8
24.6
5.4
161.5
60.5
76.6
32.5
8.7
82.2
10.1
-8.6
26.1
26.6
158.5
39.7
-.2
.6
81.7
36.8
152.4
31.0
.1
-4.6
61.6
64.4
148.7
198.3
307.0
303.3
254.9
306.4
250.2
193.3
263.3
227.2
335.7
358.1
30.4
44.4
73.8
7.3
15.6
22.7
18.2
.8
9.3
21.7
79.9
96.7
-4.9
14.5
22.3
52.7
.5
11.5
14.9
173.1
119.1
-3.6
4.6
29.8
48.4
1.0
39.0
29.5
156.4
117.5
7.1
2.9
34.9
32.7
.8
39.1
44.9
92.6
117.4
-3.9
1.4
37.8
47.8
1.7
32.5
32.0
153.5
120.8
-13.1
11.3
43.4
34.0
2.5
42.7
71.6
95.9
82.7
15.0
-22.6
48.7
33.4
2.2
6.0
56.8
63.4
73.1
-22.4
-8.5
8.6
51.4
1.0
43.0
9.4
92.4
161.5
6.2
11.4
17.1
93.7
1.7
31.5
42.8
107.8
76.6
-8.3
7.6
54.4
1.2
-1.4
23.1
70.5
106.7
158.5
8.9
-4.9
71.0
45.1
5.8
32.5
81.7
124.0
152.4
1.8
8.8
72.7
53.6
.8
14.7
32 Total net borrowing by financial sectors
By sector
43 Total
44
45
46
47
48
49
50
51
52
Sponsored credit agencies
Mortgage pools
Private financial sectors
Commercial banks
Bank affiliates
Savings and loan associations
Finance companies
REITs
CMO Issuers
*
*
A42
DomesticNonfinancialStatistics • September 1989
1.57—Continued
1987
Transaction category, sector
1984
1985
1986
1989
1988
1987
Q3
Q4
Q1
Q2
Q3
Q4
Q1
All sectors
907.9
54
55
56
57
58
59
60
61
273.8
50.4
83.0
223.1
81.6
61.1
52.0
82.9
324.2
136.4
125.4
242.2
82.5
38.3
52.8
44.0
6.3
14.4
744.5
192.5
831.9
209.3
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
62 MEMO: U.S. government, cash balance
Totals net of changes in U.S. government cash balances
63
Net borrowing by domestic nonfinancial
64
Net borrowing by U.S. government
996.6
*
837.5
215.0
978.4
1,044.4
916.2
978.9
999.4
294.9
33.1
154.6
295.7
51.1
39.1
74.9
58.8
288.6
32.7
185.1
308.0
54.0
24.3
36.9
48.7
335.7
33.5
145.6
316.1
56.5
58.4
6.7
91.9
347.9
22.8
188.2
234.5
38.6
8.6
22.3
53.3
191.0
30.6
175.8
326.3
57.5
77.6
92.5
27.7
339.2
41.4
129.4
315.0
31.8
5.0
48.0
89.7
301.6
37.5
125.1
307.1
76.3
65.3
136.8
64.7
420.1
19.7
122.7
270.4
34.9
35.1
107.6
82.4
-7.9
403.4
30.8
195.2
316.4
58.0
67.9
26.4
56.1
1,002.2
331.5
34.5
174.0
324.9
32.9
3.8
33.2
61.8
1,045.7 1,154.1
53 Total net borrowing
1,114.4 1,092.8
10.4
-19.6
-54.7
60.9
3.3
16.2
-38.8
-4.3
696.9
152.8
731.1
147.1
679.4
122.7
835.0
222.8
663.0
166.8
707.1
86.0
751.7
172.4
802.5
163.2
747.0
218.7
External corporate equity funds raised in United States
65 Total net share issues
-36.0
20.1
93.9
13.5
-115.0
-47.1
-82.7
-75.6
-131.1
-84.1
-169.1 -143.1
66
67
68
69
70
29.3
-65.3
-74.5
8.2
.9
84.4
-64.3
-81.5
13.5
3.7
161.8
-68.0
-80.7
11.5
1.3
72.3
-58.8
-76.5
20.1
-2.4
-.4
-114.5
-130.5
15.2
.7
13.8
-60.9
-78.0
18.4
-1.3
-9.1
-73.6
-88.0
26.4
-12.0
5.0
-80.5
-95.0
15.2
-.7
-8.0
-123.1
-140.0
23.4
-6.5
0.3
-84.4
-92.0
6.4
1.2
1.1
19.1
-170.2 -162.2
-195.0 -180.0
15.9
13.7
9.0
4.1
Mutual funds
All other
Nonfinancial corporations
Financial corporations
Foreign shares purchased in United States
Flow of Funds
1.58
A43
D I R E C T A N D I N D I R E C T S O U R C E S O F F U N D S TO C R E D I T M A R K E T S
Billions of dollars, except as noted; quarterly data are at seasonally adjusted annual rates.
1984
1985
1986
1987
1988
Q3
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
1989
1988
1987
Transaction category, or sector
Q4
Q
L
Q2
Q3
Q4
Q
L
750.8
846.3
837.5
689.0
741.4
659.8
780.3
723.9
710.4
767.8
763.7
742.6
157.6
38.9
56.5
15.7
46.6
193.1
37.9
94.6
14.2
46.3
314.0
69.4
170.1
19.8
54.6
256.7
68.2
153.2
24.4
10.9
239.1
84.8
104.0
19.7
30.5
211.1
35.1
146.0
22.2
7.8
265.4
123.3
102.7
44.9
-5.5
262.5
148.6
83.6
5.4
24.9
166.1
42.4
106.7
10.1
6.8
222.5
25.8
108.3
26.6
61.9
305.1
122.3
117.5
36.8
28.4
336.2
87.6
126.2
64.4
58.1
17.1
74.3
8.4
57.9
16.8
95.5
18.4
62.3
9.7
187.2
19.4
97.8
-11.9
181.4
24.7
62.5
-7.3
131.2
10.5
104.7
-24.1
187.0
29.0
19.1
-2.6
156.6
30.4
81.0
-8.8
103.1
-5.5
173.7
-20.3
103.4
4.1
78.9
9.4
138.9
17.1
57.2
-9.5
179.2
26.5
108.9
7.3
216.0
-4.9
117.8
74.9
8.4
101.5
1.2
187.9
9.6
185.8
4.3
137.5
5.9
185.5
12.3
167.5
13.9
120.3
-1.0
101.8
5.2
150.6
4.4
177.2
15.0
205.7
-7.9
U.S. government securities
State and local obligations
Corporate and foreign bonds
Residential mortgages
Other mortgages and loans
LESS: Federal Home Loan Bank advances
676.4
234.9
50.4
35.1
105.3
266.3
15.7
756.0
286.2
136.4
40.8
91.8
214.9
14.2
721.0
333.9
30.8
84.1
82.0
210.0
19.8
622.5
263.3
34.5
86.5
106.1
156.5
24.4
645.7
210.2
33.1
81.0
132.2
209.0
19.7
646.4
253.5
32.7
83.7
102.3
196.4
22.2
696.3
212.4
33.5
102.9
136.2
256.3
44.9
580.6
199.3
22.8
115.7
109.9
138.3
5.4
651.3
148.6
30.6
90.2
168.2
223.8
10.1
700.3
313.4
41.4
65.1
139.7
167.3
26.6
650.8
179.3
37.5
53.0
306.6
36.8
604.2
332.5
19.7
54.6
87.9
173.8
64.4
Private financial intermediation
20 Credit market funds advanced by private financial
institutions
21
Commercial banking
Savings institutions
22
23
Insurance and pension funds
24
Other finance
581.0
168.9
150.2
121.8
140.1
569.8
186.3
83.0
148.9
151.6
747.0
194.8
106.2
181.9
264.2
566.6
136.7
141.7
211.9
76.3
587.6
156.0
121.1
222.2
88.3
643.7
151.4
191.5
247.5
53.3
553.8
253.1
155.6
154.3
-9.2
658.1
56.8
85.3
279.3
236.7
593.3
213.8
92.9
228.9
57.8
473.2
141.3
186.3
173.9
-28.4
626.0
212.2
119.9
206.8
87.2
586.9
96.8
80.6
259.1
150.3
75 Sources of funds
26
Private domestic deposits and RPs
2.7 Credit market borrowing
28
Other sources
29
Foreign funds
30
Treasury balances
31
Insurance and pension reserves
32
Other, net
581.0
321.9
73.8
185.3
8.8
4.0
124.0
48.5
569.8
210.6
96.7
262.5
19.7
10.3
131.9
100.7
747.0
264.7
119.1
363.2
12.9
1.7
144.3
204.4
566.6
145.6
117.5
303.5
43.7
-5.8
176.1
89.6
587.6
198.4
117.4
271.8
9.2
7.3
219.9
35.4
643.7
193.9
120.8
329.0
99.5
6.1
196.1
27.2
553.8
265.6
82.7
205.5
25.2
-36.1
120.3
96.0
658.1
283.6
73.1
301.3
-80.1
53.3
265.2
62.9
593.3
135.1
161.5
296.7
106.6
-17.5
240.0
-32.4
473.2
167.3
76.6
229.2
-50.4
8.7
149.9
121.0
626.0
207.5
158.5
260.0
60.7
-15.2
224.3
-9.9
586.9
127.3
152.4
307.2
-36.3
-8.4
263.6
88.3
Private domestic nonfinancial investors
33 Direct lending in credit markets
34
U.S. government securities
35
State and local obligations
Corporate and foreign bonds
36
37
Open market paper
Other
38
169.2
115.4
26.5
-.8
4.0
24.2
282.9
175.7
39.6
2.4
45.6
19.6
93.1
59.9
-13.6
32.6
-3.6
17.9
173.3
104.4
46.1
5.3
4.3
13.3
175.5
146.5
20.0
-12.7
14.9
6.8
123.6
70.3
42.4
28.3
-29.7
12.2
225.1
117.8
56.0
42.1
-9.5
18.7
-4.4
114.4
-.5
-39.0
-71.5
-7.8
219.5
87.3
18.3
36.6
76.1
1.2
303.7
247.0
27.9
-29.2
54.0
3.9
183.3
137.2
34.4
-19.4
1.0
30.1
169.7
194.6
7.7
-.2
-2.0
-30.3
39 Deposits and currency
40
Currency
41
Checkable deposits
42
Small time and savings accounts
43
Money market fund shares
44
Large time deposits
45
Security RPs
46
Deposits in foreign countries
325.4
8.6
28.0
150.7
49.0
84.3
10.0
-5.1
220.9
12.4
40.9
138.5
8.9
7.7
14.6
-2.1
285.0
14.4
93.2
120.6
41.5
-11.4
20.8
5.9
161.8
19.0
-2.1
76.0
28.2
26.7
16.9
-2.8
205.9
14.7
12.2
120.6
23.8
32.3
9.5
-7.3
229.3
17.3
35.4
80.2
32.7
-1.0
46.6
18.1
316.3
36.8
14.3
124.1
63.3
89.4
-25.6
13.9
278.6
8.2
4.5
189.1
59.1
11.7
19.3
-13.3
136.3
11.9
18.5
152.4
-34.8
-15.7
14.7
-10.7
194.1
28.6
-23.8
70.5
3.0
122.0
-4.4
-1.8
214.4
10.2
49.6
70.4
67.9
11.2
8.2
-3.3
138.1
9.8
-59.6
50.7
59.5
55.9
20.7
1.0
47 Total of credit market instruments, deposits, and
currency
494.6
503.7
378.1
335.1
381.4
352.9
541.5
274.2
355.8
497.8
397.7
307.8
20.7
85.8
66.7
22.7
75.3
82.0
37.0
103.6
110.7
37.0
91.0
106.2
31.9
90.9
113.9
31.4
99.5
118.7
33.4
79.5
106.2
36.3
113.3
93.6
23.2
91.0
185.5
28.8
67.5
6.8
39.1
96.1
169.7
45.7
97.1
81.5
-84.1
-169.1
-143.1
2
3
4
5
6
By public agencies and foreign
Total net advances
U.S. government securities
Residential mortgages
FHLB advances to savings and loans
Other loans and securities
Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
Agency and foreign borrowing not in line 1
11
Sponsored credit agencies and mortgage pools
12 Foreign
7
8
9
10
Private domestic funds
N Total net advances
14
15
16
17
18
19
48
49
50
advanced
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
MEMO: Corporate equities not included above
51 Total net issues
-36.0
20.1
93.9
13.5
-115.0
-47.1
-82.7
-75.6
-131.1
52 Mutual fund shares
53
Other equities
54 Acquisitions by financial institutions
55 Other net purchases
29.3
-65.3
15.8
-51.8
84.4
-64.3
45.6
-25.5
161.8
-68.0
48.5
45.4
72.3
-58.8
22.6
-9.1
-.4
-114.5
4.8
-119.7
13.8
-60.9
5.2
-52.4
-9.1
-73.6
-16.5
-66.2
5.0
-80.5
-35.7
-39.9
-8.0
-123.1
-6.8
-124.3
N O T E S BY LINE N U M B E R .
1. Line 1 of table 1.57.
2. Sum of lines 3 - 6 or 7-10.
6. Includes farm and commercial mortgages.
11. Credit market funds raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities.
13. Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33.
Also sum of lines 28 and 47 less lines 40 and 46.
18. Includes farm and commercial mortgages.
26. Line 39 less lines 40 and 46.
27. Excludes equity issues and investment company shares. Includes line 19.
29. Foreign deposits at commercial banks, bank borrowings from foreign
branches, and liabilities of foreign banking agencies to foreign affiliates, less
claims on foreign affiliates and deposits by banking in foreign banks.
30. Demand deposits and note balances at commercial banks.
111.1
19.1
.3
1.1
- 8 4 . 4 -170.2 -162.2
22.4
39.1
4.1
-106.5 -208.2 -147.2
31. Excludes net investment of these reserves in corporate equities.
32. Mainly retained earnings and net miscellaneous liabilities.
33. Line 13 less line 20 plus line 27.
34-38. Lines 14-18 less amounts acquired by private finance plus amounts
borrowed by private finance. Line 38 includes mortgages.
40. Mainly an offset to line 9.
47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46.
48. Line 2/line 1.
49. Line 20/line 13.
50. Sum of lines 10 and 29.
51. 53. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types in flows and in amounts
outstanding may be obtained from Flow of Funds Section, Division of Research
and Statistics, Board of Governors of the Federal Reserve System, Washington,
D.C. 20551.
A44
DomesticNonfinancialStatistics • September 1989
1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING
Billions of dollars; period-end levels.
1987
1988
1989
1986
Q4
Q3
QI
Q2
Q3
Q4
QL
Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
5,204.3
5,953.7
6,797.0
7,638.4
8,099.4
8,330.0
8,471.0
8,658.1
8,828.8
9,049.7
9,209.4
By sector and instrument
2 U.S. government
3 Treasury securities
4 Agency issues and mortgages
1,177.9
1,174.4
3.6
1,376.8
1,373.4
3.4
1,600.4
1,597.1
3.3
1,815.4
1,811.7
3.6
1,897.8
1,893.8
3.9
1,960.3
1,955.2
5.2
2,003.2
1,998.1
5.0
2,022.3
2,015.3
7.0
2,063.9
2,051.7
12.2
2,117.8
2,095.2
22.6
2,155.7
2,133.4
22.3
5 Private domestic nonfinancial sectors
6 Debt capital instruments
Tax-exempt obligations
7
8
Corporate bonds
9
Mortgages
10
Home mortgages
11
Multifamily residential
12
Commercial
13
Farm
4,026.4
2,717.8
471.7
423.0
1,823.1
1,200.2
158.8
350.4
113.7
4,577.0
3,040.0
522.1
469.2
2,048.8
1,336.2
183.6
416.5
112.4
5,196.6
3,488.4
658.4
542.9
2,287.1
1,490.2
213.0
478.1
105.9
5,823.0
3,967.6
689.2
664.2
2,614.2
1,720.8
246.2
551.4
95.8
6,201.7
4,327.4
715.5
743.7
2,868.2
1,884.2
265.0
629.1
90.0
6,369.7
4,438.5
723.7
764.1
2,950.7
1,943.1
270.0
648.7
88.9
6,467.8
4,512.2
727.5
789.5
2,995.3
1,972.0
274.5
660.8
88.0
6,635.8
4,635.3
734.8
819.0
3,081.6
2,043.3
276.3
674.1
87.8
6,764.9
4,737.8
747.6
841.5
3,148.6
2,105.0
279.5
677.1
87.0
6,931.9
4,848.3
756.8
861.3
3,230.2
2,160.9
285.9
696.6
86.8
7,053.7
4,933.0
764.9
881.8
3,286.3
2,195.6
291.4
713.1
86.2
14
IS
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
1,308.6
437.7
490.2
36.8
344.0
1,536.9
519.3
552.9
58.5
406.2
1,708.2
601.8
592.6
72.2
441.6
1,855.5
659.8
654.2
62.9
478.6
1,874.3
674.8
637.6
68.1
493.7
1,931.1
692.7
654.4
73.8
510.3
1,955.6
688.9
665.6
73.5
527.5
2,000.5
705.8
685.7
77.8
531.2
2,027.1
721.2
686.5
80.3
539.1
2,083.6
743.7
701.9
85.4
552.7
2,120.8
746.6
713.5
95.5
565.1
19
20
21
22
23
24
25
By borrowing sector
State and local governments
Households
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
4,026.4
357.7
1,811.6
1,857.1
188.4
645.8
1,022.9
4,577.0
385.1
2,038.2
2,153.7
187.9
769.0
1,196.8
5,196.6
476.9
2,314.5
2,405.2
173.4
898.3
1,333.5
5,823.0
520.2
2,614.6
2,688.3
156.6
1,001.6
1,530.1
6,201.7
546.2
2,787.3
2,868.2
148.5
1,076.4
1,643.3
6,369.7
554.2
2,864.3
2,951.2
145.5
1,109.4
1,696.3
6,467.8
556.7
2,892.1
3,019.0
141.3
1,131.7
1,746.0
6,635.8
563.2
2,982.3
3,090.2
143.9
1,148.9
1,797.4
6,764.9
576.0
3,058.2
3,130.7
143.6
1,167.3
1,819.9
6,931.9
585.6
3,137.4
3,208.9
141.1
1,193.3
1,874.5
7,053.7
595.2
3,183.8
3,274.6
140.1
1,213.6
1,920.9
227.3
64.2
37.4
21.5
104.1
235.1
68.0
30.8
27.7
108.6
234.7
71.8
27.9
33.9
101.1
236.2
74.8
26.9
37.4
97.1
237.0
75.9
24.2
40.6
96.3
242.3
81.6
23.3
41.2
96.1
243.2
85.4
22.8
42.5
92.4
244.4
85.2
22.4
44.0
92.7
244.6
86.5
22.7
46.3
89.1
248.2
88.3
21.5
50.9
87.5
248.4
90.3
21.1
55.5
81.5
5,431.6
6,188.8
7,031.7
7,874.7
8,336.4
8,572.3
8,714.1
8,902.4
9,073.4
9,297.9
9,457.9
26 Foreign credit market debt held in
United States
27 Bonds
28 Bank loans n.e.c
29 Open market paper
30 U.S. government loans
31 Total domestic plus foreign
Financial sectors
32 Total credit market debt owed by
financial sectors
857.9
1,006.2
1,206.2
1,544.7
1,783.8
1,862.8
1,897.7
1,969.7
2,027.3
2,117.7
2,196.8
456.7
206.8
244.9
5.0
401.2
115.8
2.1
28.9
195.5
59.0
531.2
237.2
289.0
5.0
475.0
148.9
2.5
29.5
219.5
74.6
632.7
257.8
368.9
6.1
573.4
197.5
2.7
32.1
252.4
88.8
844.2
273.0
565.4
5.7
700.5
268.4
2.7
36.1
284.6
108.6
981.6
283.7
692.9
5.0
802.1
324.2
2.9
42.2
312.7
120.1
1,026.5
303.2
718.3
5.0
836.3
335.6
3.1
40.8
323.8
133.1
1,050.6
313.5
732.1
5.0
847.1
352.2
3.1
31.7
330.6
129.5
1,076.9
317.9
754.0
5.0
892.8
367.1
3.1
34.3
353.4
134.8
1,116.3
328.5
782.8
5.0
911.1
375.6
3.1
32.9
358.0
141.6
1,164.0
348.1
810.9
5.0
953.8
386.3
3.0
34.2
377.4
152.8
1,209.0
364.3
839.7
5.0
987.8
393.1
3.1
30.6
397.4
163.8
43 Total, by sector
857.9
1,006.2
1,206.2
1,544.7
1,783.8
1,862.8
1,897.7
1,969.7
2,027.3
2,117.7
2,196.8
44
45
46
47
48
49
50
51
52
211.8
244.9
401.2
76.8
71.0
73.9
171.7
3.5
4.2
242.2
289.0
475.0
84.1
86.6
93.2
193.2
4.3
13.5
263.9
368.9
573.4
79.2
101.2
115.5
246.9
5.6
25.0
278.7
565.4
700.5
75.6
101.3
145.1
308.1
6.5
64.0
288.7
692.9
802.1
78.6
109.5
165.0
340.7
6.8
101.6
308.2
718.3
836.3
82.7
104.2
180.0
359.1
7.3
103.1
318.5
732.1
847.1
76.4
103.5
176.1
369.6
7.6
113.9
322.9
754.0
892.8
77.2
106.6
186.8
392.5
8.0
121.8
333.5
782.8
911.1
76.6
106.4
197.8
395.1
7.6
127.5
353.1
810.9
953.8
78.8
105.6
218.7
406.0
9.1
135.7
369.3
839.7
987.8
78.9
109.3
230.7
420.4
9.3
139.3
33
34
35
36
37
38
39
40
41
42
By instrument
U.S. government related
Sponsored credit agency securities
Mortgage pool securities
Loans from U.S. government
Private financial sectors
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks...
Sponsored credit agencies
Mortgage pools
Private financial sectors
Commercial banks
Bank affiliates
Savings and loan associations
Finance companies
REITs
CMO issuers
All sectors
53 Total credit market debt
6,289.5
7,195.0
8,237.9
9,419.4
10,120.2
10,435.1
10,611.8
10,872.1
11,100.8
11,415.6
11,654.7
54
55
56
5/
58
59
60
61
1,629.4
471.7
603.0
1,825.4
437.7
556.5
253.8
512.1
1,902.8
522.1
686.0
2,051.4
519.3
613.2
305.7
594.4
2,227.0
658.4
812.1
2,289.8
601.8
652.6
358.5
637.6
2,653.8
689.2
1,007.4
2,617.0
659.8
717.2
384.9
690.1
2,874.4
715.5
1,143.9
2,871.1
674.8
704.0
421.4
715.1
2,981.8
723.7
1,181.4
2,953.8
692.7
718.4
438.8
744.5
3,048.8
727.5
1,227.1
2,998.4
688.9
720.1
446.7
754.4
3,094.2
734.8
1,271.3
3,084.7
705.8
742.4
475.3
763.7
3,175.2
747.6
1,303.6
3,151.7
721.2
742.1
484.6
774.7
3,276.7
756.8
1,336.0
3,233.3
743.7
757.5
513.6
797.9
3,359.7
764.9
1,365.2
3,289.3
746.6
765.2
548.4
815.4
U.S. government securities
State and local obligations
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
Flow of Funds
1.60
A45
SUMMARY OF CREDIT MARKET CLAIMS, BY HOLDER
Billions of dollars, except as noted; period-end levels.
1988
1987
Transaction category, or sector
1983
1984
1985
1989
1986
Q3
Q4
Ql
Q2
Q3
Q4
Ql
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
5,204.3
5,953.7
6,797.0
7,638.4
8,099.4
8,330.0
8,471.0
8,658.1
8,828.8
9,049.7
9,209.4
By public agencies and foreign
7. Total held
3
U.S. government securities
4
Residential mortgages
5 FHLB advances to savings and loans
Other loans and securities
6
1,101.7
339.0
367.0
59.0
336.8
1,259.2
377.9
423.5
74.6
383.1
1,457.5
421.8
518.2
88.8
428.7
1,791.2
491.2
712.3
108.6
479.0
1,965.1
525.6
834.6
120.1
484.8
2,036.2
559.4
862.0
133.1
481.8
2,092.2
592.7
880.6
129.5
489.4
2,138.8
607.1
906.1
134.8
490.8
2,188.3
610.3
934.9
141.6
501.6
2,269.9
644.2
966.0
152.8
506.9
2,343.9
662.1
995.1
163.8
522.9
7 Total held, by type of lender
8
U.S. government
9
Sponsored credit agencies and mortgage pools . . .
Monetary authority
10
11 Foreign
1,101.7
212.8
482.0
159.2
247.7
1,259.2
229.7
556.3
167.6
305.6
1,457.5
245.7
657.8
186.0
367.9
1,791.2
252.3
867.8
205.5
465.7
1,965.1
235.2
1,003.7
219.6
506.7
2,036.2
233.0
1,044.9
230.1
528.2
2,092.2
231.4
1,064.0
224.9
572.0
2,138.8
227.0
1,091.6
229.7
590.5
2,188.3
224.3
1,128.9
230.8
604.4
2,269.9
220.3
1,176.1
240.6
632.9
2,343.9
222.8
1,223.0
235.4
662.7
Agency and foreign debt not in line 1
Sponsored credit agencies and mortgage pools . . •
Foreign
456.7
227.3
531.2
235.1
632.7
234.7
844.2
236.2
981.6
237.0
1,026.5
242.3
1,050.6
243.2
1,076.9
244.4
1,116.3
244.6
1,164.0
248.2
1,209.0
248.4
Private domestic holdings
14 Total private holdings
15 U.S. government securities
16 State and local obligations
17 Corporate and foreign bonds
18 Residential mortgages
19 Other mortgages and loans
20
LESS: Federal Home Loan Bank advances
4,786.6
1,290.4
471.7
441.7
992.2
1,649.6
59.0
5,460.8
1,524.9
522.1
476.8
1,096.5
1,915.2
74.6
6,207.0
1,805.2
658.4
517.6
1,185.1
2,129.5
88.8
6,927.6
2,162.6
689.2
601.7
1,254.7
2,328.1
108.6
7,353.0
2,348.8
715.5
663.4
1,314.6
2,430.7
120.1
7,562.5
2,422.4
723.7
688.1
1,351.1
2,510.2
133.1
7,672.5
2,456.0
727.5
716.3
1,366.0
2,536.2
129.5
7,840.5
2,487.0
734.8
740.6
1,413.6
2,599.2
134.8
8,001.3
2,564.9
747.6
756.9
1,449.6
2,623.8
141.6
8,192.0
2,632.6
756.8
769.1
1,480.8
2,705.4
152.8
8,323.0
2,697.6
764.9
782.1
1,491.9
2,750.2
163.8
Private financial intermediation
21 Credit market claims held by private financial
institutions
?.?, Commercial banking
73
Savings institutions
24
Insurance and pension funds
25
Other finance
4,111.2
1,622.1
944.0
1,093.5
451.6
4,691.0
1,791.1
1,092.8
1,215.3
591.7
5,264.4
1,978.5
1,178.4
1,364.2
743.4
6,010.1
2,173.2
1,283.6
1,546.0
1,007.1
6,434.5
2,249.0
1,397.3
1,716.0
1,072.2
6,594.8
2,309.9
1,436.2
1,758.0
1,090.7
6,728.4
2,322.7
1,441.7
1,823.3
1,140.7
6,895.8
2,378.2
1,484.6
1,879.5
1,153.5
6,999.4
2,417.3
1,513.0
1,925.0
1,144.0
7,169.6
2,465.9
1,544.4
1,980.5
1,179.0
7,294.3
2,490.1
1,551.9
2,040.1
1,212.2
7,6 Sources of funds
27
Private domestic deposits and RPs
Credit market debt
28
4,111.2
2,389.8
401.2
4,691.0
2,711.5
475.0
5,264.4
2,922.1
573.4
6,010.1
3,182.6
700.5
6,434.5
3,226.9
802.1
6,594.8
3,320.6
836.3
6,728.4
3,376.5
847.1
6,895.8
3,409.8
892.8
6,999.4
3,438.1
911.1
7,169.6
3,519.0
953.8
7,294.3
3,530.3
987.8
29
30
31
32
33
1,320.2
-23.0
11.5
1,036.1
295.6
1,504.5
-14.1
15.5
1,160.8
342.2
1,768.9
5.6
25.8
1,289.5
448.0
2,127.0
18.6
27.5
1,427.9
653.0
2,405.4
52.7
33.0
1,556.7
763.1
2,437.9
62.2
21.6
1,597.2
756.8
2,504.8
45.9
23.5
1,662.4
773.1
2,593.2
62.3
32.6
1,718.6
779.7
2,650.1
51.9
34.2
1,758.0
806.0
2,696.9
71.5
29.0
1,804.6
791.8
2,776.1
69.3
14.1
1,862.0
830.7
Private domestic nonfinancial investors
34 Credit market claims
35
U.S. government securities
36 Tax-exempt obligations
Corporate and foreign bonds
37
38 Open market paper
39 Other
1,076.6
548.6
170.0
45.4
68.4
244.3
1,244.8
663.6
196.3
44.5
72.4
268.0
1,516.0
830.7
235.9
47.6
118.0
283.8
1,618.1
915.1
222.3
80.1
114.3
286.2
1,720.6
971.0
255.9
80.6
114.9
298.2
1,804.0
1,012.3
268.3
84.8
136.3
302.3
1,791.2
1,022.4
265.1
82.7
119.1
301.9
1,837.5
1,036.2
271.9
88.9
139.4
301.1
1,913.0
1,102.4
281.2
83.5
143.9
302.0
1,976.1
1,155.4
288.4
72.1
151.2
309.1
2,016.5
1,183.9
292.1
80.5
156.8
303.2
40 Deposits and currency
41
Currency
42
Checkable deposits
43
Small time and savings accounts
44
Money market fund shares
45
Large time deposits
Security RPs
46
47
Deposits in foreign countries
2,566.4
150.9
350.9
1,542.9
169.5
247.7
78.8
25.7
2,891.7
159.6
378.8
1,693.4
218.5
332.1
88.7
20.6
3,112.5
171.9
419.7
1,831.9
227.3
339.8
103.3
18.5
3,393.4
186.3
512.9
1,948.3
268.9
328.4
124.1
24.5
3,437.0
192.4
487.5
1,983.4
286.4
326.0
143.6
17.8
3,547.6
205.4
510.4
2,017.1
297.1
355.1
141.0
21.6
3,598.3
204.0
491.0
2,070.7
322.1
350.0
142.6
17.8
3,637.6
209.9
506.0
2,105.9
310.4
343.1
144.4
17.8
3,666.3
213.4
490.7
2,117.0
308.6
376.9
144.9
14.7
3,753.4
220.1
522.6
2,137.7
320.9
387.4
150.5
14.4
3,763.4
219.1
486.7
2,154.3
347.0
390.0
152.3
14.0
48 Total of credit market instruments, deposits, and
currency
3,643.0
4,136.5
4,628.5
5,011.4
5,157.6
5,351.6
5,389.5
5,475.0
5,579.3
5,729.6
5,780.0
20.2
85.8
224.7
20.3
85.9
291.5
20.7
84.8
373.5
22.7
86.7
484.2
23.5
87.5
559.4
23.7
87.2
590.5
24.0
87.6
617.8
24.0
87.9
652.8
24.1
87.4
656.3
24.4
87.5
704.3
24.7
87.6
731.9
MEMO: Corporate equities not included above
52 Total market value
2,134.0
2,158.2
2,824.5
3,362.0
4,316.0
3,318.5
3,500.2
3,619.7
3,572.5
3,600.9
3,732.4
53
54
Mutual fund shares
Other equities
112.1
2,021.9
136.7
2,021.5
240.2
2,584.3
413.5
2,948.5
525.1
3,790.9
460.1
2,858.3
479.2
3,021.0
486.8
3,133.0
478.1
3,094.4
478.3
3,122.6
486.3
3,246.0
55
56
Holdings by financial institutions
Other holdings
612.0
1,522.0
615.6
1,542.6
800.0
2,024.5
972.2
2,389.8
1,306.7
3,009.3
1,011.1
2,307.4
1,079.4
2,420.8
1,131.1
2,488.7
1,126.9
2,445.6
1,156.3
2,444.6
1,226.2
2,506.2
12
13
49
50
51
Other sources
Foreign funds
Treasury balances
Insurance and pension reserves
Other, net
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
N O T E S BY LINE NUMBER.
1. Line 1 of table 1.59.
2. Sum of lines 3 - 6 or 7-10.
6. Includes farm and commercial mortgages.
12. Credit market debt of federally sponsored agencies, and net issues of
federally related mortgage pool securities.
14. Line 1 less line 2 plus line 12 and 13. Also line 21 less line 28 plus line 34.
Also sum of lines 29 and 48 less lines 41 and 47.
19. Includes farm and commercial mortgages.
27. Line 40 less lines 41 and 47.
28. Excludes equity issues and investment company shares. Includes line 20.
30. Foreign deposits at commercial banks plus bank borrowings from foreign
affiliates, less claims on foreign affiliates and deposits by banking in foreign banks.
31. Demand deposits and note balances at commercial banks.
32. Excludes net investment of these reserves in corporate equities.
33. Mainly retained earnings and net miscellaneous liabilities.
34. Line 14 less line 21 plus line 28.
35-39. Lines 15-19 less amounts acquired by private finance plus amounts
borrowed by private finance. Line 39 includes mortgages.
41. Mainly an offset to line 10.
48. Lines 34 plus 40, or line 14 less line 29 plus 41 and 47.
49. Line 2/line 1 and 13.
50. Line 21/line 14.
51. Sum of lines 11 and 30.
52-54. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types in flows and in amounts
outstanding may be obtained from Flow of Funds Section, Stop 95, Division of
Research and Statistics, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
A46
2.10
Domestic Nonfinancial Statistics • September 1989
N O N F I N A N C I A L B U S I N E S S ACTIVITY
Selected Measures 1
1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1988
Measure
1986
1987
1989
1988
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.'
Apr.'
May'
June
1 Industrial production
125.1
129.8
137.2
139.4
139.9
140.4
140.8
140.5
140.7
141.6
141.4
141.1
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
133.3
132.5
124.0
143.6
136.2
113.8
81.1
136.8
127.7
148.8
143.5
118.2
145.9
144.3
133.9
158.2
151.5
125.3
148.1
146.4
136.4
154.0
154.0
127.5
148.4
146.8
136.8
159.9
154.2
128.3
149.4
147.7
138.2
160.4
155.0
128.3
150.1
148.2
138.5
161.1
156.6
128.1
150.0
148.6
138.7
161.6
155.1
127.4
150.5
148.9
138.4
162.8
156.1
127.3
151.5
150.0
139.2
164.3
156.6
128.1
151.4
149.9
138.7
164.8
156.6
127.8
151.2
149.7
138.3
164.7
156.6
127.3
129.1
134.6
142.8
145.3
145.8
146.3
147.2
146.8
147.0
147.8
147.7
147.7
79.7
78.6
81.1
80.5
83.5
83.7
84.3
84.7
84.4
85.1
84.4
84.9
84.7
84.6
84.3
84.0
84.1
83.7
84.4
84.1
84.1
83.8
83.8
83.3
2
i
4
5
6
7
Industry groupings
8 Manufacturing
Capacity utilization (percent) 2
9
Manufacturing
10 Industrial materials industries
11 Construction contracts (1982 = 100)3
158.0
164.0
161.0
164.0
158.0
163.0
155.0
148.0
150.0
163.0
159.0
157.0
12
13
14
15
lb
17
18
19
20
21
Nonagricultural employment, total 4
Goods-producing, total
Manufacturing, total
Manufacturing, production-worker
Service-producing
Personal income, total
Wages and salary disbursements
Manufacturing
Disposable personal income
Retail sales
120.7
100.9
96.3
91.1
129.0
219.4
210.8
177.4
218.5'
199.3
124.1
101.8
96.8
91.9
133.4
235.0
226.3
183.8
232.4'
210.8
128.6
105.0
99.2
94.3
138.5
252.8'
244.4'
196.5r
252. l r
225. r
129.1
104.3
99.1
94.2
139.5
260. r
251.2'
202.7'
259.9'
229.6
129.5
104.6
99.3
94.5
140.0
259.3'
251.7'
201.4'
259.0'
232.4
129.9
104.8
99.5
94.7
140.4
261.7'
253.2'
201.1'
261.4'
231.8
130.3
105.3
99.8
94.9
140.8
265.8
256.1'
203.C
264^
233.2
130.6
105.3
99.8
95.0
141.2
268.7'
257.3'
204.0'
268.1'
232.2
130.8
105.4
100.0
95.1
141.5
271.3
259.5
207.5
270.3
232.4
131.1
105.5
99.9
95.0
141.8
272.9
261.7
205.7
269.6
235.5
131.3
105.5
99.9
95.0
142.2
273.4
261.8
205.8
271.6
235.3
131.6
105.4
99.8
94.8
142.6
274.2
263.2
206.6
273.2
234.5
22
23
Prices 7
Consumer (1982-84 = 100)
Producer finished goods (1982 = 100) . . .
109.6
103.2
113.6
105.4
118.3
108.0
120.2
109.4
120.3
109.8
120.5
110.0
121.1
111.1
121.6
111.7
122.3
112.2
123.1
113.0
123.8
114.2
124.1
114.1
1. A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. See "A Revision of the Index of
Industrial Production" and accompanying tables that contain revised indexes
( 1 9 7 7 = 1 0 0 ) t h r o u g h D e c e m b e r 1984 i n t h e F E D E R A L R E S E R V E 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 from
the Bureau of Labor Statistics, U.S. Department of Labor.
NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5,and 6,
and indexes for series mentioned in notes 3 and 7 may also be found in the Survey
of Current Business.
Figures for industrial production for the last two months are preliminary and
estimated, respectively.
Selected Measures
2.11
A47
LABOR FORCE, EMPLOYMENT, A N D U N E M P L O Y M E N T
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1988'
1986
Category
1987
1989
1988
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June
HOUSEHOLD SURVEY DATA
1 Noninstitutional population1
2 Labor force (including Armed Forces)
3
Civilian labor force
4
5
182,822
1
Nonagricultural industries
Agriculture
Unemployment
6
Number
7
Rate (percent of civilian labor force)
8 Not in labor force
185,010
186,837
187,471
187,618
187,859
187,979
188,102
188,228
188,377
188,518
120,078
117,834
122,122
119,865
123,893
121,669
124,737
122,510
124,779
122,563
125,643
123,428
125,383
123,181
125,469
123,264
125,863
123,659
125,806
123,610
126,291
124,102
106,434
3,163
109,232
3,208
111,800
3,169
112,709
3,238
112,816
3,193
113,411
3,300
113,630
3,223
113,930
3,206
114,009
3,104
114,102
3,112
114,445
3,096
8,237
7.0
62,744
7,425
6.2
62,888
6,701
5.5
62,944
6,563
5.4
62,734
6,554
5.3
62,839
6,716
5.4
62,216
6,328
5.1
62,596
6,128
5.0
62,633
6,546
5.3
62,365
6,395
5.2
62,571
6,561
5.3
62,227
99,525
102,310
106,039
106,824
107,097
107,442
107,711
107,888
108,ior
108,308
108,488
18,965
777
4,816
5,255
23,683
6,283
23,053
16,693
19,065
721
4,998
5,385
24,381
6,549
24,196
17,015
19,536
733
5,294
5,584
25,362
6,679
25,464
17,387
19,557
712
5,191
5,616
25,386
6,726
26,111
17,525
19,589
711
5,213
5,634
25,453
6,744
26,230
17,523
19,648
711
5,267
5,654
25,553
6,746
26,318
17,545
19,648
711
5,270
5,667
25,631
6,763
26,434
17,587
19,680
714
5,252
5,666
25,685
6,774
26,520
17,597
19,672''
720
5,279'
5,682
25,695'
6,776'
?6,651'
17,626'
19,661
722
5,278
5,700
25,746
6,790
26,728
17,683
19,630
710
5,270
5,721
25,754
6,801
26,887
17,715
ESTABLISHMENT SURVEY DATA
9 Nonagricultural payroll employment3
10
11
12
13
14
15
16
17
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
1. Persons 16 years of age and over. Monthly figures, which are based on
sample data, relate to the calendar week that contains the 12th day; annual data
are averages of monthly figures. By definition, seasonality does not exist in
population figures. Based on data from Employment and Earnings (U.S. Department of Labor).
2. Includes self-employed, unpaid family, and domestic service workers.
3. Data include all full- and part-time employees who worked during, or
received pay for, the pay period that includes the 12th day of the month, and
exclude proprietors, self-employed persons, domestic servants, unpaid family
workers, and members of the Armed Forces. Data are adjusted to the March 1984
benchmark and only seasonally adjusted data are available at this time. Based on
data from Employment and Earnings (U.S. Department of Labor).
A48
2.12
Domestic Nonfinancial Statistics • September 1989
O U T P U T , C A P A C I T Y , A N D CAPACITY U T I L I Z A T I O N 1
Seasonally adjusted
1988
1989
1988
1989
1988
1989
Series
Q3
Q4
Ql'
Q2
Output (1977 = 100)
Q3
Q4
Ql
Q2
Q3
Capacity (percent of 1977 output)
Q4
Ql
Q2
Utilization rate (percent)
1 Total industry
138.4
139.9
140.7
141.4
165.2
166.3
167.5
168.7
83.8
84.1
84.0
83.8
2 Mining
103.9
115.1
104.2
114.3
101.8
116.0
102.2
116.7
126.3
140.4
125.7
140.7
125.1
141.0
124.7
141.4
82.3
82.9
81.3
81.3'
82.3'
81.8
82.6
144.0
145.8
147.0
147.7
171.5
172.8
174.3
175.7
84.4
84.4'
84.1
5 Primary processing
125.9
154.9
127.7
156.7
127.8
158.6
127.3
160.1
143.9
188.1
145.2
189.5
146.5
191.0
147.8
192.6
87.5
82.4
87.9
82.7
87.3'
83.0
6 Advanced processing
86.1
83.2
126.5
128.0
127.6
127.7
150.1
150.8
151.7
152.6
84.3
84.9
84.1
7 Materials
8 Durable goods
9
Metal materials
10 Nondurable goods
11 Textile, paper, and chemical
137.1
92.7
132.8
135.3
148.9
139.4
139.2
94.8
135.4
138.1
148.6
144.1
138.6
92.3
136.3
139.2
148.4
145.4
138.2
90.5
137.2
140.2
171.3
109.5
149.8
150.2
150.7
157.4
169.0
109.8
151.2
151.8
152.3
159.3
170.1
110.2
152.7
153.5
154.0
161.4
171.3
110.6
154.2
155.3
81.6
84.8
88.6
90.0
98.8
88.6
82.4
86.3
89.5
91.0
97.6
90.5
81.5
83.8
89.3
90.7
96.4
90.1
80.7
81.8
88.9
90.3
14 Energy materials
102.5
102.0
100.7
101.2
119.0
118.7
118.4
118.3
86.0
86.0
85.(K
85.5
June
3 Utilities
4 Manufacturing
Previous cycle
High
2
Low
Latest cycle
High
3
Low
1988
June
81.9
84.0
1988
Oct.
Nov.
83.7
1989
Dec.
Jan.
Feb.
Mar.'
Apr.'
May'
Capacity utilization rate (percent)
15 Total industry
88.6
72.1
86.9
69.5
83.0
84.0
84.1
84.3
84.3
83.9
83.8
84.1
83.8
16 Mining
17 Utilities
92.8
95.6
87.8
82.9
95.2
88.5
76.9
78.0
81.2
80.8
81.9
81.0
83.3
80.8
83.6
82.0
82.2
80.9
80.6
82.6
81.2
83.3
82.2
83.1
82.0
82.9
81.2
18 Manufacturing
87.7
69.9
86.5
68.0
83.3
84.3
84.4
84.4
84.7
84.3
84.1
84.4
84.1
83.8
19 Primary processing
20 Advanced processing..
91.9
86.0
68.3
71.1
89.1
85.1
65.0
69.5
86.6
81.7
87.9
82.6
88.1
82.6
87.9
82.8
88.4
83.1
87.0
83.0
86.4
83.0
86.6
83.4
86.1
83.2
85.7
82.9
21 Materials
92.0
70.5
89.1
68.5
83.2
84.7
85.1
84.9
84.6
84.0
83.8
84.2
84.2
22 Durable goods
23 Metal materials
24 Nondurable goods
25 Textile, paper, and
chemical
26
Paper
27
Chemical
91.8
99.2
91.1
64.4
67.1
66.7
89.8
93.6
88.1
60.9
45.7
70.7
80.7
80.8
87.4
82.4
87.3
89.3
82.7
86.9
89.4
82.1
84.6
89.8
82.1
86.1
90.1
81.5
83.8
89.0
80.9
81.5
88.8
81.1
82.8
89.2
80.6
80.9
88.9
92.8
98.4
92.5
64.8
70.6
64.4
89.4
97.3
87.9
68.8
79.9
63.5
88.6
97.1
87.0
90.9
97.8
90.2
90.9
96.7
90.5
91.8
98.4
90.7
91.5
98.1
90.7
90.3
95.8
89.8
90.2
95.3
89.7
90.7
94.7
90.1
90.2
93.5
89.5
28 Energy materials
94.6
86.9
94.0
82.3
84.9
85.3
86.2
86.5
84.9
84.9
85.4
86.2
85.9
1. These data also appear in the Board's G.3 (402) release. For address, see
inside front cover.
2. Monthly high 1973; monthly low 1975.
3. Monthly highs 1978 through 1980; monthly lows 1982.
81.8
80.3
81.7
88.7
84.6
Selected Measures
2.13 INDUSTRIAL PRODUCTION
A49
Indexes and Gross Value1
Monthly data are seasonally adjusted
Groups
1977
proportion
1988
1989
1988
avg.
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar/
Apr.
May p
June c
Index (1977 = 100)
MAJOR MARKET
100.00
137.2
136.5
138.0
138.5
138.6
139.4
139.9
140.4
140.8
140.5
140.7
141.6
141.4
141.1
57.72
44.77
25.52
19.25
12.94
42.28
145.9
144.3
133.9
158.2
151.5
125.2
145.3
144.0
133.0
158.5
150.0
124.5
146.5
145.0
134.2
159.4
151.6
126.4
147.3
145.8
135.0
160.1
152.3
126.5
147.4
145.8
134.8
160.4
152.9
126.5
148.1
146.4
136.4
159.7
154.0
127.5
148.4
146.8
136.8
159.9
154.2
128.3
149.4
147.7
138.2
160.4
155.0
128.3
150.1
148.2
138.5
161.1
156.6
128.1
150.0
148.6
138.7
161.6
155.1
127.4
150.5
148.9
138.4
162.8
156.1
127.3
151.5
150.0
139.2
164.3
156.6
128.1
151.4
149.9
138.7
164.8
156.6
127.8
151.2
149.7
138.3
164.7
156.6
127.3
6.89
2.98
1.79
1.16
.63
1.19
3.91
1.24
1.19
.96
1.71
125.3
124.9
122.7
93.4
177.0
128.1
125.6
144.1
143.6
136.2
106.3
125.3
127.1
125.3
99.0
174.1
129.7
123.9
138.0
137.1
135.9
107.0
125.3
124.4
120.8
93.8
170.8
129.9
125.9
143.3
143.8
136.6
107.4
125.7
124.2
123.1
93.0
179.0
125.9
126.8
146.5
146.1
137.2
106.8
126.3
126.4
124.8
97.7
175.3
128.8
126.2
144.9
143.7
137.1
106.6
129.3
128.9
128.3
101.3
178.4
129.8
129.7
154.4
151.9
138.8
106.7
129.2
129.5
129.5
101.0
182.4
129.5
128.9
150.4
148.9
139.8
107.3
131.9
134.5
138.0
105.1
199.1
129.3
130.0
151.0
150.0
140.5
108.9
131.5
132.5
135.6
99.6
202.3
127.9
130.7
151.0
149.5
141.1
110.1
131.6
131.6
133.1
96.0
201.9
129.4
131.6
153.9
153.0
141.3
110.1
130.1
128.9
128.3
95.0
190.0
129.8
131.1
151.6
152.3
140.7
110.9
131.8
131.2
131.7
98.8
192.8
130.5
132.2
151.7
152.5
142.8
112.3
130.9
128.1
127.4
96.0
185.5
129.2
133.0
151.3
151.4
144.0
113.7
129.8
125.5
123.6
91.4
183.3
128.3
133.2
152.7
19 Nondurable consumer goods
20 Consumer staples
Consumer foods and tobacco
21
Nonfood staples
22
Consumer chemical products
23
Consumer paper products
24
Consumer energy
25
Consumer fuel
26
27
Residential utilities
18.63
15.29
7.80
7.49
2.75
1.88
2.86
1.44
1.42
137.1
144.9
140.9
149.1
180.0
163.4
110.0
95.4
124.8
135.8
143.5
139.3
147.9
179.5
162.8
107.7
93.0
122.6
137.5
145.3
141.1
149.6
181.8
164.0
109.3
94.6
124.4
138.5
146.6
141.3
152.1
183.8
165.3
113.0
95.5
130.9
138.0
145.8
141.1
150.7
185.0
166.3
107.6
92.7
122.8
139.0
147.0
142.4
151.8
186.1
167.1
108.9
95.3
122.7
139.7
147.9
143.7
152.2
185.7
167.8
109.8
94.1
125.8
140.5
148.9
144.5
153.6
186.8
169.0
111.6
96.3
127.1
141.1
149.4
144.8
154.2
187.6
174.2
109.1
96.7
121.7
141.4
149.7
144.3
155.4
187.8
177.0
110.1
95.0
125.4
141.4
149.9
143.3
156.9
188.9
180.4
110.7
95.6
126.1
141.9
150.4
144.2
156.9
187.4
180.9
112.0
97.3
127.0
141.6
150.1
144.9
155.5
186.5
179.5
109.9
93.5
141.5
149.9
Equipment
28 Business and defense equipment
29 Business equipment
30
Construction, mining, and farm
Manufacturing
31
32
Power
Commercial
33
Transit
34
35 Defense and space equipment
18.01
14.34
2.08
3.27
1.27
5.22
2.49
3.67
163.3
157.6
71.9
131.3
89.4
245.2
114.9
185.9
163.5
158.1
72.4
130.3
88.3
247.1
115.7
184.6
164.6
159.3
73.6
132.4
89.8
248.2
115.9
184.9
165.2
160.2
73.1
134.0
90.9
249.8
115.2
184.9
165.6
160.8
74.3
135.8
92.2
248.7
116.8
184.5
165.1
160.2
74.2
136.2
91.5
245.4
120.3
184.0
165.5
161.2
74.5
136.2
92.1
247.0
122.3
182.2
166.2
162.6
74.6
137.0
91.8
248.9
124.9
180.5
167.1
163.8
74.3
136.3
92.8
252.4
125.7
180.0
167.9
165.0
75.6
137.8
92.7
254.3
125.2
179.3
168.9
166.3
76.9
138.6
93.0
257.6
123.9
178.7
170.2
167.7
77.1
139.7
93.6
260.1
124.8
179.9
170.8
168.4
76.6
140.4
93.1
262.1
124.0
180.1
170.5
168.0
76.8
140.9
92.5
262.3
120.8
180.4
Intermediate products
36 Construction supplies
37 Business supplies
38 General business supplies
39 Commercial energy products
5.95
6.99
5.67
1.31
138.6
162.5
168.5
136.3
137.6
160.6
165.9
137.5
138.4
162.8
168.6
137.6
138.1
164.4
170.6
137.7
138.4
165.2
171.8
136.7
140.0
165.9
172.3
138.2
140.7
165.7
172.9
134.3
141.4
166.7
173.8
135.8
142.3
168.8
175.9
138.2
139.5
168.4
175.4
138.3
139.3
170.4
177.4
140.3
139.7
171.0
178.4
138.8
139.9
170.8
178.1
139.3
139.9
Materials
Durable goods materials
Durable consumer parts
Equipment parts
Durable materials n.e.c
Basic metal materials
20.50
4.92
5.94
9.64
4.64
135.4
108.9
171.7
126.7
95.9
134.9
110.3
171.6
124.8
93.7
136.8
110.1
174.1
127.5
98.4
136.6
109.8
173.5
127.6
97.3
137.8
111.0
174.0
129.2
100.3
138.9
111.4
174.9
130.8
101.1
139.8
113.9
175.0
131.3
101.4
139.0
112.5
174.1
130.9
99.8
139.4
111.7
175.2
131.5
100.8
138.6
112.1
175.2
129.7
98.4
137.9
110.7
175.3
128.8
95.9
138.6
110.4
176.6
129.5
97.0
138.2
110.5
176.7
128.6
95.6
137.9
108.7
177.2
128.6
96.1
45 Nondurable goods materials
46 Textile, paper, and chemical
materials
Textile materials
47
Pulp and paper materials
48
49
Chemical materials
50 Miscellaneous nondurable materials . . .
10.09
132.0
130.1
132.8
133.1
132.6
134.7
135.1
136.3
137.1
135.9
136.0
137.1
137.2
137.3
7.53
1.52
1.55
4.46
2.57
134.4
109.9
147.3
138.3
124.9
132.1
107.5
145.4
135.8
124.2
135.3
108.5
150.3
139.2
125.6
135.7
110.1
148.3
140.0
125.6
134.9
109.2
148.1
139.0
125.9
137.4
109.5
148.4
143.1
126.6
137.9
110.1
147.2
144.2
127.0
139.1
110.0
150.3
145.1
128.0
139.9
112.1
150.4
145.7
129.1
138.6
110.7
147.5
145.0
128.0
139.0
111.8
147.3
145.4
127.2
140.3
114.6
146.9
146.8
127.6
140.1
115.7
145.7
146.4
140.3
51 Energy materials
52 Primary energy
53 Converted fuel materials
11.69
7.57
4.12
101.5
106.3
92.8
101.3
105.6
93.5
102.7
106.8
95.3
103.2
106.2
97.7
101.5
106.8
91.8
101.3
106.0
92.6
102.3
108.6
90.7
102.6
107.6
93.3
100.5
105.2
92.0
100.5
104.4
93.3
101.0
103.7
96.1
102.0
104.5
97.5
101.5
103.2
98.5
100.0
1 Total index
2 Products
3 Final products
4
Consumer goods
Equipment
5
6 Intermediate products
7 Materials
Consumer goods
8 Durable consumer goods
9 Automotive products
Autos and trucks
10
11
Autos, consumer
12
Trucks, consumer
Auto parts and allied goods
13
14 Home goods
15
Appliances, A/C and TV
Appliances and TV
16
17
Carpeting and furniture
18
Miscellaneous home goods
40
41
42
43
44
155.1
110.5
A50
D o m e s t i c N o n f i n a n c i a l Statistics •
S e p t e m b e r 1989
2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued
Groups
SIC
code
1977
proportion
1988
1989
1988
avg.
June
July
Aug.
Sept.
Oct.
Nov.
Dec
Jan.
Feb.
Mar/
Apr.
May p
June'
Index (1977 = 100)
MAJOR INDUSTRY
15.79
9.83
5.%
84.21
35.11
49.10
107.5
103.4
114.3
142.7
143.9
141.9
106.8
103.0
113.2
142.1
142.6
141.7
108.1
104.3
114.4
143.6
144.6
142.9
109.0
103.8
117.8
144.0
145.1
143.2
107.2
103.7
113.0
144.4
145.3
143.8
107.2
103.1
113.9
145.3
146.3
144.6
108.1
104.7
113.7
145.8
146.7
145.2
108.9
104.9
115.4
146.3
147.1
145.7
107.2
103.0
114.0
147.2
148.5
146.2
106.8
100.9
116.5
146.8
148.1
145.9
107.5
101.5
117.5
147.0
148.6
145.8
108.2
102.6
117.4
147.8
149.2
146.9
107.9
102.3
117.1
147.7
149.2
146.7
.50
1.60
7.07
.66
93.2
137.9
92.9
139.9
82.2
126.9
95.8
137.4
94.0
141.5
93.3
140.2
96.6
137.2
93.2
141.3
99.1
142.2
92.0
139.7
101.6
138.5
91.5
142.8
104.6
149.7
90.8
144.0
111.9
155.1
88.9
149.4
106.9
144.7
88.9
150.8
98.6
134.7
89.5
142.5
98.1
137.7
89.6
143.5
95.6
145.5
89.5
144.5
137.1
90.8
145.2
7.96
142.7
105.2
116.2
109.1
150.3
141.3
104.5
114.3
109.3
148.6
143.3
145.7
102.4
117.2
110.1
150.7
145.8
107.0
117.9
146.6
105.0
120.2
146.3
104.7
119.4
145.4
101.5
119.7
109.9
151.7
122.3
110.6
150.7
123.4
109.9
150.9
144.0
105.4
117.0
109.5
151.8
146.4
117.1
109.4
152.3
143.3
105.1
116.4
108.9
151.0
143.2
105.0
2.29
2.79
3.15
4.54
8.05
2.40
2.80
.53
184.2
151.9
96.0
174.4
59.5
182.3
150.5
94.1
174.4
58.9
184.9
153.4
95.0
175.4
59.1
186.7
154.8
96.0
175.3
59.4
188.0
188.1
156.7
96.3
176.9
61.0
188.5
157.5
95.0
177.5
61.5
188.0
155.3
93.7
175.3
59.9
158.1
98.0
177.5
60.2
193.0
159.0
98.0
175.9
62.9
194.6
158.5
96.3
175.0
62.9
198.5
159.2
97.0
176.4
61.2
200.0
159.3
97.3
176.2
61.4
199.6
158.5
95.4
176.9
59.6
24
25
32
2.30
1.27
2.72
137.3
136.4
162.1
122.6
161.2
136.6
162.9
122.2
133.8
164.9
122.6
133.5
164.9
122.6
137.5
164.5
123.3
139.4
165.4
124.7
143.0
165.4
125.1
139.9
166.3
123.4
126.6
132.8
164.8
125.4
133.4
165.8
125.5
134.8
168.0
124.7
134.4
169.0
125.3
33
331.2
34
35
36
5.33
3.49
6.46
9.54
7.15
89.2
78.1
120.9
170.8
180.1
87.5
74.2
120.4
171.2
179.5
91.5
80.2
121.7
173.1
181.5
90.8
78.9
122.1
174.1
93.1
81.4
122.5
174.8
92.7
80.8
124.6
175.4
186.1
181.7
88.4
75.9
123.8
183.0
181.6
87.7
73.5
123.8
185.6
182.2
93.2
82.2
124.5
178.7
180.9
90.1
77.0
123.1
184.7
181.8
90.0
77.6
125.1
177.8
180.9
91.1
79.1
124.5
182.2
94.2
83.1
122.6
173.8
183.0
182.1
181.0
181.5
37
371
9.13
5.25
132.1
117.2
132.8
119.1
131.9
116.6
131.8
117.5
132.7
118.5
134.8
121.7
135.2
122.9
136.8
125.5
136.7
124.9
136.4
123.4
134.8
120.4
136.4
122.0
135.1
119.1
133.4
116.1
372-6.9
38
39
3.87
2.66
1.46
152.4
154.3
107.1
151.4
153.0
107.6
152.7
156.4
107.8
151.3
156.8
108.3
151.9
157.8
108.5
152.7
159.9
107.7
151.9
160.4
109.0
152.2
159.1
110.9
152.7
161.0
154.0
161.3
112.2
110.0
154.4
161.8
112.5
155.9
163.0
115.3
156.8
164.8
116.3
157.0
165.0
1 Mining and utilities
2
Mining
3
Utilities
4 Manufacturing
Nondurable
5
6
Durable
7
8
9
10
Mining
Metal
Coal
Oil and gas extraction
Stone and earth minerals
11
12
13
14
15
Nondurable
manufactures
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
16
17
18
19
20
.62
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products
Leather and products
Durable manufactures
21 Lumber and products
22 Furniture and fixtures
23 Clay, glass, and stone products.
24
25
26
27
28
10
11.12
13
14
Primary metals
Iron and steel
Fabricated metal products
Nonelectrical machinery
Electrical machinery
29 Transportation equipment
30
Motor vehicles and parts
31
Aerospace and miscellaneous
transportation equipment
32 Instruments
33 Miscellaneous manufactures
100.6
116.2
108.8
151.7
110.2
153.8
110.2
151.7
180.8
106.6
101.2
115.7
147.7
149.3
146.5
128.5
150.3
97.3
123.4
Utilities
34 Electric
Gross value (billions of 1982 dollars, annual rates)
MAJOR MARKET
35 Products, total.
517.5 1,824.5 1,813.9 1,822.3 1,828.6 1,828.9 1.853.4 1,855.5 1,875.3 1,885.1 1,879.2 1,878.0 1.892.5 1,881.4 1874.6
36 Final
37
Consumer goods.
38
Equipment
39 Intermediate
405.7 1,401.2 1,394.3 1,398.9 1,404.2 1,404.3 1.423.5 1,426.3 1,442.1 1,447.5 1,449.6 1,442.8 1.458.6 1,446.2 1441.1
272.7
902.4 893.6 895.6 900.4 897.2 915.0 918.4 934.4 935.6 934.3 928.0 937.8 927.2 924.3
133.0
498.8 500.7 503.2 503.8 507.1 508.4 507.9 507.7 511.9 515.2 514.8 520.8 519.1 516.8
111.9
423.3 419.6 423.4 424.3 424.5 430.0 429.3 433.2 437.7 429.6 435.3 433.9 435.1 433.5
1. These data also appear in the Board's G. 12.3 (414) release. For address, see
inside front cover.
A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. See "A Revision of the Index of
Industrial Production" and accompanying tables that contain revised indexes
( 1 9 7 7 = 1 0 0 ) t h r o u g h D e c e m b e r 1984 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.
Selected Measures
A51
2.14 HOUSING AND CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1988
Item
1986
1987
1989
1988
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar. r
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
1,750
1,071
679
1,535
1,024
511
1,456
994
462
1,466
1,007
459
1,432
980
452
1,526
1,029
497
1,508
1,027
481
1,518
1,058
460
1,486
1,052
434
1,403
989
414
1,230
870
360
1,334
954
380
1,347
905
442
4 Started
1-family
5
6
2-or-more-family
1,805
1,180
626
1,621
1,146
474
1,488
1,081
407
1,459
1,076
383
1,463
1,039
424
1,532
1,136
3%
1,567
1,138
429
1,577
1,141
436
1,678
1,199
479
1,465
1,029
436
1,409
981
428
1,343
1,029
314
1,309
977
332
7 Under construction, end of period 1 .
8
1-family
9
2-or-more-family
1,074
583
490
987
591
397
919
570
350
962
601
361
955
5%
359
951
597
354
959
603
356
956
603
353
957
602
355
951
594
357
942
586
356
925
580
345
911
572
339
1,756
1,120
636
1,669
1,123
546
1,530
1,085
445
1,539
1,074
465
1,536
1,092
444
1,516
1,088
428
1,429
1,037
392
1,539
1,108
431
1,537
1,141
396
1,610
1,189
421
1,459
1,050
409
1,553
1,111
442
1,436
1,044
392
13 Mobile homes shipped
244
233
218
223
224
216
227
225
232
212
207
198
221
Merchant builder activity in
1-family units
14 Number sold
15 Number for sale, end of period 1
748
357
672
365
675
366
712
363
691
361
718
353
650
364
669
366
700
369
621
375
555
377
609
377
635
381
10 Completed
11
1-family
12 2-or-more-family
Price (thousands of dollars)2
Median
16 Units sold
Average
17 Units sold
92.2
104.7
113.3
110.0
116.6
112.9
110.4
121.0
113.0
118.0
123.0
117.6
120.0
112.2
127.9
139.0
140.6
142.7
137.3
137.3
147.7
138.6
145.3
149.0
144.5
146.8
3,566
3,530
3,594
3,690
3,650
3,680
3,710
3,920
3,550
3,480
3,400
3,400
3,210
80.3
98.3
85.6
106.2
89.2
112.5
91.5
115.4
88.5
112.6
88.9
112.3
88.5
112.4
88.7
112.0
89.7
113.0
91.9
117.8
92.0
116.1
92.9
118.0
92.6
118.0
EXISTING UNITS ( 1 - f a m i l y )
18 Number sold
Price of units sold
(thousands of dollars)
19 Median
20 Average
Value of new construction 3 (millions of dollars)
CONSTRUCTION
21 Total put in place
»7,043' 397,721' 409,663' 408,112' 411,525' 411,074' 415,442' 425,035' 424,791' 418,465' 419,152
415,867
421,279
22 Private
23 Residential
24 Nonresidential, total
Buildings
25
Industrial
26
Commercial
27
Other
Public utilities and other
28
S15,313' 320,108' 328,738' 329,231' 329,848' 331,374' 332,798' 336,254' 339,481' 335,037'
187,147 194,656' 198,101' 197,585' 198,322' 200,78C 202,048' 202,48C 204,707' 202,322'
128,166' 125,452' 130,637' 131,646' 131,526' 130,594' 130,75c 133,774' 134,774' 132,715'
340,038
204,456
135,982
335,106
203,855
131,251
335,066
200,731
134,335
13,747
56,762
13,216
44,441'
13,707
55,448
15,464
40,833'
14,931'
58,104'
17,278'
40,324'
14,953'
59,310'
17,299'
40,084'
71,727'
29 Public
30 Military
3,868
31 Highway
22,971'
32 Conservation and development... 4,646
40,242
33 Other
77,612'
4,327
25,343'
5,162
42,780'
80,922'
3,579'
28,524'
4,474'
44,345'
78,881'
3,535'
26,225'
4,761'
44,36C
1. Not at annual rates.
2. Not seasonally adjusted.
3. Value of new construction data in recent periods may not be strictly
comparable with data in previous periods because of changes by the Bureau of the
Census in its estimating techniques. For a description of these changes see
Construction Reports (C-30-76-5), issued by the Bureau in July 1976.
14,872'
58,805'
40,149'
15,515'
57,284'
17,340'
40,455'
15,413'
56,676'
17,328'
41,333'
15,045'
58,659'
17,744'
42,326'
15,89C
59,35C
17,976'
41,558'
15,098'
58,749'
17,484'
41,384'
15,698
60,653
17,634
41,997
16,209
55,699
16,801
42,542
16,119
57,734
17,504
42,978
81,677'
4,373'
26,274'
4,995'
46,035'
79,700'
2,617'
28,707'
4,343'
44,033'
82,644'
3,42C
28,992'
4,134'
46,098'
88,781'
3,905'
33,674'
4,412'
46,79C
85.31C
3,440
30,792'
4,121'
46,957'
83,428'
3,433
27,936'
4,742'
47,317'
78,714
3,740
26,091
4,210
44,673
80,762
3,350
27,883
2,995
46,534
86,214
3,432
27,404
6,613
48,765
17,70c
NOTE. Census Bureau estimates for all series except (1) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices
of existing units, which are published by the National Association of Realtors. All
back and current figures are available from the originating agency. Permit
authorizations are those reported to the Census Bureau from 16,000 jurisdictions
beginning with 1978.
A52
2.15
Domestic Nonfinancial Statistics • September 1989
C O N S U M E R A N D P R O D U C E R PRICES
Percentage changes based on seasonally adjusted data, except as noted
Change from 12
months earlier
Change from 3 months earlier
(at annual rate)
Item
1988
1988
1989
Index
level
June
1989
1989
June
Change from 1 month earlier
June
1989
Sept.
Dec.
Mar.
June
Feb.
Mar.
Apr.
May
June
CONSUMER PRICES 2
(1982-84=100)
1
All items
4.0
5.2
4.8
4.1
6.1
5.7
.4
.5
.7
.6
.2
124.1
2
3
4
5
6
Food
Energy items
All items less food and energy
Commodities
Services
3.3
.3
4.5
3.6
4.9
6.3
8.8
4.5
3.4
5.1
8.8
2.7
4.3
3.1
4.8
3.0
-.4
4.9
4.2
5.4
8.2
10.2
5.2
4.1
5.9
5.6
24.8
3.8
2.0
4.3
.4
.6
.4
.2
.5
.8
1.1
.4
.3
.5
.5
5.1
.2
.2
.2
.6
1.6
.5
.4
.5
.2
-1.0
.2
-.1
.4
125.0
99.0
128.5
119.3
133.9
2.1
1.5
-3.5
3.7
2.2
5.9
5.4
16.3
5.2
4.1
5.7
9.2
-2.7
5.9
6.1
3.0
2.1
1.4
4.4
1.7
10.2
13.5
39.2
6.1
4.6
5.1
-2.3
32.7
4.6
4.1
.9
.4
2.4 R
.6
.4R
i.r
.4
-.6
7.2
-.1
-.1
.9
.8
3.3
.5
.4
-.1
-.8
-3.1
.7
.7
114.1
118.4
70.1
124.0
118.6
5.5
6.9
5.0
4.9
4.6
7.2
4.5
6.7
9.1
6.2
2.2
-.3
.5
.3
.6
.4
.4
.0
.3
.2
-.2
-.2
112.6
120.5
8.9
-7.4
15.6
2.6
10.4
5.0
29.1
-27.0
8.5
-7.9
12.3
12.5
16.5
45.9
10.9
-18.4
24.4
-10.3
-1.4
1.1
-,5R
-2.8
5.2
-1.1
.4
2.2
-.4
-2.6
-1.8
-1.3
111.4
77.3
137.7
PRODUCER PRICES
(1982=100)
7
8
9
10
11
12
13
Finished goods
Consumer foods
Consumer energy
Other consumer goods
Capital equipment
Intermediate materials
Excluding energy
Crude materials
Foods
Energy
Other
lb
14
IS
3
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.
y
y
.4
.V
3.0
1.7
.6'
3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds.
SOURCE. Bureau of Labor Statistics.
Selected Measures
2.16
A53
GROSS NATIONAL PRODUCT A N D INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1989
1988
Account
1986 R
1987'
1988'
Q2'
Q3'
Q4'
Ql'
Q2
GROSS NATIONAL PRODUCT
4,231.6
1
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
2
3
4
5
Gross private domestic investment
Fixed investment
Nonresidential
Structures
Producers' durable equipment
Residential structures
6
7
8
9
10
11
Change in business inventories
Nonfarm
12
13
4,524.3
4,880.6
4,838.5
4,926.9
5,017.3
5,113.1
5,194.9
2,797.4
406.0
942.0
1,449.5
3,010.8
421.0
998.1
1,591.7
3,235.1
455.2
1,052.3
1,727.6
3,204.9
454.6
1,042.4
1,707.9
3,263.4
452.5
1,066.2
1,744.7
3,324.0
467.4
1,078.4
1,778.2
3,381.4
466.4
1,098.3
1,816.7
3,437.9
470.3
1,116.6
1,851.0
659.4
652.5
435.2
139.0
296.2
217.3
699.9
670.6
444.3
133.8
310.5
226.4
750.3
719.6
487.2
140.3
346.8
232.4
748.4
719.1
487.1
139.9
347.2
232.1
771.1
726.5
493.2
142.0
351.3
233.2
752.8
734.1
495.8
142.5
353.3
238.4
769.6
742.0
503.1
144.7
358.5
238.8
777.9
745.5
511.5
142.6
368.9
234.0
6.9
8.6
29.3
30.5
30.6
34.2
29.3
30.4
44.6
41.5
18.7
40.8
27.7
19.1
32.4
25.3
14
15
16
Net exports of goods and services
Exports
Imports
-97.4
396.5
493.8
-112.6
448.6
561.2
-73.7
547.7
621.3
-74.9
532.5
607.5
-66.2
556.8
623.0
-70.8
579.7
650.5
-54.0
605.6
659.6
-52.4
625.2
677.5
17
18
19
Government purchases of goods and services
Federal
State and local
872.2
366.5
505.7
926.1
381.6
544.5
968.9
381.3
587.6
960.1
377.1
583.0
958.6
367.5
591.0
1,011.4
406.4
604.9
1,016.0
399.0
617.0
1,031.4
403.9
627.5
20
21
22
23
24
25
By major type of product
Final sales, total
Goods
Durable
Nondurable
Services
Structures
4,224.8
1,686.7
721.8
964.9
2,119.3
425.6
4,495.0
1,785.2
774.3
1,010.9
2,304.5
434.6
4,850.0
1,931.9
859.1
1,072.8
2,499.2
449.5
4,809.2
1,917.4
857.2
1,060.2
2,472.3
448.8
4,882.3
1,955.8
884.0
1,071.8
2,520.3
450.8
4,998.7
1,987.4
888.5
1,098.9
2,570.0
459.9
5,085.4
2,030.9
894.7
1,136.2
2,620.8
461.3
5,162.4
2,074.3
909.1
1,165.2
2,665.1
455.4
26
27
28
Change in business inventories
Durable goods
Nondurable goods
6.9
1.2
5.6
29.3
22.0
7.2
30.6
25.0
5.6
29.3
17.0
12.3
44.6
41.4
3.2
18.7
32.0
-13.3
27.7
22.0
5.7
32.4
12.5
20.0
29
Total GNP in 1982 dollars
3,717.9
3,853.7
4,024.4
4,010.7
4,042.7
4,069.4
4,106.8
4,123.9
MEMO
NATIONAL INCOME
30
Total
3,412.6
3,665.4
3,972.6
3,933.6
4,005.7
4,097.4
4,185.2
n.a.
31
32
33
34
35
36
37
Compensation of employees
Wages and salaries
Government and government enterprises
Other
Supplement to wages and salaries
Employer contributions for social insurance
Other labor income
2,511.4
2,094.8
393.7
1,701.1
416.6
217.3
199.3
2,690.0
2,249.4
419.2
1,830.1
440.7
227.8
212.8
2,907.6
2,429.0
446.5
1,982.5
478.6
249.7
228.9
2,878.9
2,405.4
443.1
473.5
247.7
225.9
2,935.1
2,452.2
449.6
2,002.6
482.9
251.8
231.1
2,997.2
2,505.1
456.3
2,048.9
492.0
255.6
236.5
3,061.7
2,560.7
466.9
2,093.8
501.0
259.7
241.3
3,115.7
2,606.6
473.5
2,133.1
509.2
263.2
246.0
38
Proprietors' income 1
Business and professional
Farm 1
282.0
247.2
34.7
311.6
270.0
41.6
327.8
288.0
39.8
331.8
286.5
45.4
327.0
289.3
37.7
328.3
296.3
32.0
359.3
300.3
39
40
41 Rental income of persons 2
42 Corporate profits 1
43
Profits before tax
44
Inventory valuation adjustment
45
Capital consumption adjustment
46
Net interest
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
1,962.3
59.0
355.1
302.6
52.6
11.6
13.4
15.7
14.6
16.3
16.1
11.8
8.7
282.1
298.7
328.6
306.8
330.9
314.4
-30.4
340.2
318.8
316.3
-20.1
46.9
41.5
36.6
n.a.
n.a.
-21.0
31.7
396.4
415.7
436.1
458.0
-18.9
50.9
-25.0
53.8
46.8
325.3
305.3
-28.8
48.9
331.9
353.6
391.5
383.0
221.6
6.7
266.7
318.0
-38.3
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (Department of Commerce).
A54
Domestic Nonfinancial Statistics • September 1989
2.17
PERSONAL INCOME A N D SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1989
1988'
Account
1986'
1987'
1988'
Ql'
Q2
Q2
Q3
Q4
4,026.6
4,097.6
4,185.2
4,317.8
4,396.2
2,606.6
733.1
549.5
610.2
789.7
473.5
246.0
355.1
302.6
52.6
8.7
111.4
655.1
626.2
322.5
PERSONAL INCOME AND SAVING
1 Total personal income
3,526.2
2 Wage and salary disbursements
3 Commodity-producing industries
4
Manufacturing
5 Distributive industries
Service industries
6
7 Government and government enterprises
9 Proprietors' income1
10 Business and professional 1
11 Farm 1
12 Rental income of persons 2
14 Personal interest income
15 Transfer payments
16 Old-age survivors, disability, and health insurance benefits . . .
17
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
3,777.6
4,064.5
2,094.8
625.6
473.2
498.8
576.7
393.7
2,249.4
649.9
490.3
531.9
648.3
419.2
2,429.0
696.3
524.0
571.9
714.4
446.5
2,405.4
690.8
519.2
568.0
703.5
443.1
2,452.2
701.6
527.2
578.0
723.0
449.6
2,505.1
714.7
538.1
587.5
746.7
456.3
2,560.7
726.6
546.3
598.8
768.4
466.9
199.3
282.0
247.2
34.7
11.6
85.8
493.2
521.5
269.2
212.8
311.6
270.0
41.6
13.4
92.0
523.2
548.2
282.9
228.9
327.8
288.0
39.8
15.7
102.2
571.1
584.7
300.5
225.9
331.8
286.5
45.4
14.6
100.4
560.0
581.8
299.2
231.1
327.0
289.3
37.7
16.3
103.6
576.3
587.4
301.4
236.5
328.3
296.3
32.0
16.1
106.4
598.6
593.8
304.0
241.3
359.3
300.3
59.0
11.8
109.4
629.0
616.4
316.9
161.9
172.9
194.9
193.4
196.4
199.6
210.0
212.9
3,526.2
3,777.6
4,064.5
4,026.6
4,097.6
4,185.2
4,317.8
4,396.2
512.9
571.7
586.6
590.7
585.9
597.8
628.3
651.6
20 EQUALS: Disposable personal income
3,013.3
3,205.9
3,477.8
3,435.9
3,511.7
3,587.4
3,689.5
3,744.5
21
LESS: Personal outlays
2,888.5
3,104.1
3,333.1
3,301.9
3,362.1
3,424.0
3,483.8
3,540.9
22 EQUALS: Personal saving
124.9
101.8
144.7
134.0
149.6
163.4
205.7
203.7
15,385.5
10,123.7
10,905.0
4.1
15,800.3
10,306.3
10,970.0
3.2
16,346.1
10,554.0
11,337.0
4.2
16,316.9
10,524.0
11,273.0
3.9
16,400.4
10,580.5
11,377.0
4.3
16,468.6
10,634.2
11,466.0
4.6
16,579.7
10,662.1
11,625.0
5.6
n.a.
n.a.
11,609.0
5.4
525.3
553.8
642.4
633.4
669.8
647.4
693.5
n.a.
669.5
124.9
84.5
6.7
663.8
101.8
75.3
-18.9
738.6
144.7
80.3
-25.0
722.5
134.0
78.3
-28.8
742.4
149.6
77.6
-30.4
769.3
163.4
81.7
-20.1
792.1
205.7
53.4
-38.3
n.a.
203.7
n.a.
-21.0
285.9
174.2
303.1
183.6
321.7
191.9
319.0
191.2
323.1
192.1
329.7
194.4
335.2
197.8
340.3
201.3
-144.1
-206.9
62.8
-110.1
-161.4
51.3
-96.1
-145.8
49.7
-89.1
-141.5
52.4
-72.7
-122.5
49.8
-121.9
-167.6
45.7
-98.7
-147.5
48.8
523.6
549.0
632.8
633.4
661.2
630.8
669.3
677.2
659.4
-135.8
699.9
-150.9
750.3
-117.5
748.4
-115.0
771.1
-109.9
752.8
-122.0
769.6
-100.3
777.9
-100.7
-1.8
-4.7
-9.6
-0.1
-8.6
-16.6
-24.1
-24.1
19
LESS: Personal tax and nontax payments
MEMO
Per capita (1982 dollars)
23 Gross national product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING
29 Personal saving
30 Undistributed corporate profits
31 Corporate inventory valuation adjustment
Capital consumption
allowances
33 Noncorporate
34
35
36
Government surplus, or deficit ( - ) , national income and
product accounts
Federal
State and local
37 Gross investment
38 Gross private domestic
39 Net foreign
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 Statistics
3.10 U.S. INTERNATIONAL TRANSACTIONS
A55
Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted. 1
1988
Item credits or debits
1987
1986
1989
1988
Ql
1 Balance on current account
2 Not seasonally adjusted
3 Merchandise trade balance
4
Merchandise exports
Merchandise imports
5
6 Military transactions, net
7 Investment income, net
Other service transactions, net
8
Remittances, pensions, and other transfers
9
10 U.S. government grants (excluding military)
11 Change in U.S. government assets, other than official
reserve assets, net (increase, - )
Q2
Q3
Q4
Ql"
-32,340
-36,926
-30,339
80,604
-110,943
-1,006
-2,590
4,971
-1,088
-2,288
-28,677
-28,191
-32,019
83,729
-115,748
-1,604
4,489
5,475
-1,090
-3,928
-30,685
-26,131
-27,634
88,496
-116,130
-1,482
-3,508
5,359
-1,192
-2,228
-133,249
-143,700
-126,548
-145,058
223,367
-368,425
-4,576
21,647
10,517
-4,049
-11,730
-159,500
250,266
-409,766
-2,857
22,283
10,586
-4,063
-10,149
-127,215
319,251
-446,466
-4,606
2,227
17,702
-4,279
-10,377
-32,046
-27,556
-33,446
76,447
-109,893
-964
2,795
2,933
-1,131
-2,233
-33,485
-33,875
-31,411
78,471
-109,882
-1,033
-2,465
4,323
-971
-1,928
-2,024
997
2,999
-1,490
-885
1,961
3,413
1,012
12 Change in U.S. official reserve assets (increase, - )
13 Gold
14 Special drawing rights (SDRs)
15 Reserve position in International Monetary Fund
16 Foreign currencies
312
0
-246
1,501
-942
9,149
0
-509
2,070
7,588
-3,566
0
474
1,025
-5,064
1,503
0
155
446
901
39
0
180
69
-210
-7,380
0
-35
202
-7,547
2,272
0
173
307
1,791
-4,000
0
-188
316
-4,128
17 Change in U.S. private assets abroad (increase, - )
18 Bank-reported claims
19 Nonbank-reported claims
20 U.S. purchase of foreign securities, net
21 U.S. direct investments abroad, net
-97,954
-59,975
-7,396
-4,271
-26,312
-86,363
-42,119
5,201
-5,251
-44,194
-81,543
-54,481
-1,684
-7,846
-17,533
4,528
15,266
-65
-4,539
-6,134
-15,273
-12,602
-6,443
1,333
2,439
-32,467
-26,229
255
-1,592
-4,901
-38,332
-30,916
4,569
-3,047
-8,938
-28,828
-22,601
23
24
25
26
27
22 Change in foreign official assets in United States (increase,
+)
U.S. Treasury securities
Other U.S. government obligations
Other U.S. government liabilities4
^
Other U.S. liabilities reported by U.S. banks3
Other foreign official assets
35,594
34,364
-1,214
2,141
1,187
-884
45,193
43,238
1,564
-2,520
3,918
-1,007
38,882
41,683
1,309
-1,284
-331
-2,495
24,631
27,702
-162
-304
-1,772
-833
5,895
5,853
202
-517
774
-417
-2,234
-3,769
572
-232
1,703
-508
10,589
11,897
697
-232
-1,036
-737
6,914
4,585
716
-377
1,538
452
28 Change in foreign private assets in United States (increase,
+)
<
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 United States, net
186,011
79,783
-2,641
3,809
70,969
34,091
172,847
89,026
2,450
-7,643
42,120
46,894
180,418
68,832
6,558
20,144
26,448
58,436
2,396
-17,137
1,565
5,928
2,424
9,616
59,438
30,455
-59
5,458
9,699
13,885
48,413
23,291
2,350
3,422
7,454
11,896
70,170
32,223
2,702
5,336
6,871
23,038
42,163
10,398
0
11,308
0
1,878
0
-10,641
0
479
3,843
0
-15,729
-3,714
0
24,047
-4,556
0
-19,434
4,431
0
13,424
4,264
11,308
1,878
-10,641
-3,364
-12,015
28,603
-23,865
9,160
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
-2,554
-3,673
8,745
8,591
14,429
MEMO
Changes in official assets
U.S. official reserve assets (increase, - )
Foreign official assets in United States (increase, +)
excluding line 25
40 Change in Organization of Petroleum Exporting Countries
official assets in United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)
38
39
312
9,149
-3,566
1,503
39
-7,380
2,272
-4,000
33,453
47,713
40,166
24,935
6,412
-2,002
10,821
7,291
-9,327
-9,955
-3,109
-1,547
-1,776
-459
672
7,059
96
53
92
41
4
7
40
13
1. Seasonal factors are not calculated for lines 6, 10, 12-16, 18-20, 22-34, and
38-41.
2. Data are on an international accounts (IA) basis. Differs from the Census
basis data, shown in table 3.11, for reasons of coverage and timing. Military
exports are excluded from merchandise data and are included in line 6.
3. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
4. Primarily associated with military sales contracts and other transactions
arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business
(Department of Commerce).
A56
3.11
International Statistics • September 1989
U.S. FOREIGN TRADE1
Millions of dollars; monthly data are seasonally adjusted.
1988r
Item
1986
1987
1989r
1988r
Nov.
1
EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments, f.a.s. value
Jan.
Feb.
Mar.
Apr.
May p
Trade balance
3
Customs value
227,159
254,122
322,426
27,538
28,864
28,980
28,839
30,065
30,759
30,473
365,438
406,241
440,952
38,087
39,668
37,877
38,220
39,549
39,045
40,710
-138,279
GENERAL IMPORTS including
merchandise for immediate
consumption plus entries into
bonded warehouses
2
Customs value
-152,119
-118,526
-10,549
-10,805
-8,897
-9,381
-9,484
-8,286
-10,237
1. The Census basis data differ from merchandise trade data shown in table
3.10, U.S. International Transactions Summary, for reasons of coverage and
timing. On the export side, the largest adjustment is the exclusion of military sales
(which are combined with other military transactions and reported separately in
the "service account" in table 3.10, line 6). On the import side, additions are made
for gold, ship purchases, imports of electricity from Canada, and other transac-
3.12
Dec.
tions; military payments are excluded and shown separately as indicated above.
As of Jan. 1, 1987 census data are released 45 days after the end of the month; the
previous month is revised to reflect late documents. Total exports and the trade
balance reflect adjustments for undocumented exports to Canada.
SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade"
(Department of Commerce, Bureau of the Census).
U.S. RESERVE ASSETS
Millions of dollars, end of period
1986
Type
1987
Feb.
Dec.
Mar.
Apr.
May
June"
43,186
2 Gold stock, including Exchange
Stabilization Fund
3 Special drawing rights '
48,511
45,798
47,802
48,190
49,373
49,854
50,303
54,941
60,502
11,090
11,064
11,078
11,057
11,056
11,061
11,061
11,061
11,060
11,063
7,293
8,395
10,283
9,637
9,388
9,653
9,443
9,379
9,134
9,034
4
Reserve position in International
Monetary Fund 2
11,947
11,730
11,349
9,745
9,422
9,353
9,052
9,132
8,513
5
Foreign currencies
12,856
17,322
13,088
17,363
18,324
19,306
20,298
20,731
26,234
1. Gold held under earmark at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table
3.13. Gold stock is valued at $42.22 per fine troy ounce.
2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based
on a weighted average of exchange rates for the currencies of member countries.
From July 1974 through December 1980, 16 currencies were used; from January
1981, 5 currencies have been used. The U.S. SDR holdings and reserve position
in the IMF also are valued on this basis beginning July 1974.
3.13
31,517
3. Includes allocations by the International Monetary Fund of SDRs as follows:
$867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1,
1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093
million on Jan. 1, 1981; plus transactions in SDRs.
4. Valued at current market exchange rates.
FOREIGN OFFICIAL ASSETS H E L D AT FEDERAL RESERVE BANKS1
Millions of dollars, end of period
1988
Assets
1985
1986
Dec.
1 Deposits
Assets held in custody
2 U.S. Treasury securities
3 Earmarked gold
Jan.
Feb.
Mar.
Apr.
May
June p
480
287
244
347
279
325
351
352
428
275
121,004
14,245
155,835
14,048
195,126
13,919
232,547
13,636
228,399
13,635
230,860
13,609
234,075
13,602
235,145
13,576
232,004
13,612
229,914
13,545
1. Excludes deposits and U.S. Treasury securities held for international and
regional organizations.
2. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S.
Treasury securities payable in dollars and in foreign currencies.
1989
1987
3. Earmarked gold and the gold stock are valued at $42.22 per fine troy ounce,
Earmarked gold is gold held for foreign and international accounts and is not
included in the gold stock of the United States.
Summary Statistics
3.14 FOREIGN BRANCHES OF U.S. BANKS
A57
Balance Sheet Data1
Millions of dollars, end of period
1988
Asset account
1986
1989
1987
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
All foreign countries
1 Total, all currencies
2 Claims on United States
3 Parent bank
4
Other banks in United States
5 Nonbanks
6 Claims on foreigners
7
Other branches of parent bank
8
Banks
9
Public borrowers
10 Nonbank foreigners
11 Other assets
458,012
456,628
518,618
516,608'
506,062'
496,755'
501,682'
519,740'
517,276'
521,436
119,706
87,201
13,057
19,448
315,676
91,399
102,960
23,478
97,839
114,563
83,492
13,685
17,386
312,955
96,281
105,237
23,706
87,731
138,034
105,845
16,416
15,773
342,520
122,155
108,859
21,832
89,674
171,304
130,834
16,366
24,104
307,241'
106,64C
100,820'
18,223'
81,558'
169,111
129,856
14,918
24,337
299,728'
107,179'
96,932'
17,163'
78,454'
167,143
127,403
14,559
25,181
291,892'
102,482'
93,663'
16,931'
78,816'
168,558
128,115
13,506
26,937
2%,240'
103,962'
95,6%'
16,682'
79,90C
177,902'
134,002'
14,697
29,203
303,906'
110,434'
97,723'
17,020'
78,729'
170,045'
127,476
13,459'
29,110
306,493'
114,834
%,83C
16,101'
78,728'
177,987
134,026
13,040
30,921
302,808
116,506
94,042
16,095
76,165
22,630
29,110
38,064
38,063'
37,223'
37,720'
36,884'
37,932'
40,738'
40,641
12 Total payable in U.S. dollars
336,520
317,487
350,107
355,663'
358,040'
345,523'
346,990'
366,403'
359,841'
366,315
13 Claims on United States
14 Parent bank
15 Other banks in United States
16 Nonbanks
17 Claims on foreigners
18 Other branches of parent bank
19 Banks
20 Public borrowers
21
Nonbank foreigners
116,638
85,971
12,454
18,213
210,129
72,727
71,868
17,260
48,274
110,620
82,082
12,830
15,708
195,063
72,197
66,421
16,708
39,737
132,023
103,251
14,657
14,115
202,428
88,284
63,707
14,730
35,707
165,017
127,692
15,062
22,263
173,837'
77,384
53,632
12,415
30,406'
163,456
126,929
14,167
22,360
177,685'
80,736
54,884
12,131
29,934'
160,520
124,496
12,908
23,116
167,288'
76,221
49,391'
11,749'
29,927'
161,336
124,288
12,025
25,023
168,293'
76,565'
50,013'
11,781'
29,934'
170,091'
129,431'
13,259
27,401
178,134'
82,797'
53,893'
11,831'
29,613'
162,954'
123,258
12,539'
27,157
179,308'
87,777
50,815'
11,467
29,249'
169,7%
128,771
11,909
29,116
177,308
86,625
49,793
11,282
29,608
9,753
11,804
15,656
16,809
16,899
17,715
17,361
18,178
17,579'
19,211
22 Other assets
United Kingdom
23 Total, all currencies
148,599
140,917
158,695
159,556
156,835
156,529
154,879
154,856
153,146
155,532
24 Claims on United States
25
Parent bank
26
Other banks in United States
27
Nonbanks
28 Claims on foreigners
29 Other branches of parent bank
30
Banks
31
Public borrowers
32
Nonbank foreigners
33,157
26,970
1,106
5,081
110,217
31,576
39,250
5,644
33,747
24,599
19,085
1,612
3,902
109,508
33,422
39,468
4,990
31,628
32,518
27,350
1,259
3,909
115,700
39,903
36,735
4,752
34,310
39,242
33,138
1,343
4,761
110,336
33,243
40,875
4,276
31,942
40,089
34,243
1,123
4,723
106,388
35,625
36,765
4,019
29,979
40,954
34,928
1,128
4,898
104,668
35,322
34,907
4,090
30,349
40,547
34,449
1,268
4,830
103,806
33,650
36,159
3,808
30,189
40,715
35,315
1,380
4,020
103,443
35,305
35,382
3,757
28,999
39,394
34,660
1,227
3,507
102,438
32,954
37,079
3,471
28,934
39,599
35,642
1,243
2,714
104,504
35,537
37,412
3,627
27,928
33 Other assets
34 Total payable in U.S. dollars
35 Claims on United States
36 Parent bank
37
Other banks in United States
38
Nonbanks
39 Claims on foreigners
40
Other branches of parent bank
41
Banks
42 Public borrowers
43
Nonbank foreigners
44 Other assets
5,225
6,810
10,477
9,978
10,358
10,907
10,526
10,698
11,314
11,429
108,626
95,028
100,574
101,341
103,503
102,873
100,863
103,211
98,463
101,612
32,092
26,568
1,005
4,519
73,475
26,011
26,139
3,999
17,326
23,193
18,526
1,475
3,192
68,138
26,361
23,251
3,677
14,849
30,439
26,304
1,044
3,091
64,560
28,635
19,188
3,313
13,424
36,881
32,115
849
3,917
59,405
25,574
19,452
2,898
11,481
38,012
33,252
964
3,796
60,472
28,474
18,494
2,840
10,664
38,591
33,925
678
3,988
58,798
27,939
16,778
2,869
11,212
37,707
33,106
816
3,785
57,567
26,475
17,246
2,774
11,072
38,265
34,320
937
3,008
59,201
28,145
17,715
2,786
10,555
36,772
33,499
872
2,401
56,227
25,389
17,680
2,6%
10,462
36,675
34,119
862
1,694
58,395
26,036
18,458
2,737
11,164
3,059
3,697
5,575
5,055
5,019
5,484
5,589
5,745
5,464
6,542
Bahamas and Caymans
45 Total, all currencies
46 Claims on United States
47
Parent bank
48
Other banks in United States
49
Nonbanks
50 Claims on foreigners
51
Other branches of parent bank
52
Banks
53
Public borrowers
Nonbank foreigners
54
55 Other assets
56 Total payable in U.S. dollars
142,055
142,592
160,321
169,034
170,639
162,352
165,862
179,185'
172,324'
173,137
74,864
50,553
11,204
13,107
63,882
19,042
28,192
6,458
10,190
78,048
54,575
11,156
12,317
60,005
17,296
27,476
7,051
8,182
85,318
60,048
14,277
10,993
70,162
21,277
33,751
7,428
7,706
106,240
73,654
14,065
18,521
56,128
18,534
25,549
5,861
6,184
105,320
73,409
13,145
18,766
58,393
17,954
28,268
5,830
6,341
103,016
71,065
12,742
19,209
52,503
15,982
24,755
5,422
6,344
103,989
71,100
11,563
21,326
54,732
18,454
24,514
5,513
6,251
111,951'
75,234'
12,275
24,442
59,615
20,048
27,727
5,480
6,360
105,273'
68,%9
11,563'
24,741
60,103'
26,261
22,641'
5,374
5,827'
111,823
73,627
10,807
27,389
53,984
21,962
21,184
5,280
5,558
3,309
4,539
4,841
6,666
6,926
6,833
7,141
136,794
136,813
151,434
161,238
163,518
154,981
158,011
1. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
7,619
172,148'
6,948'
7,330
166,389'
166,869
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
A58
International Statistics • September 1989
3.14—Continued
1988
Liability account
1985
1986
1989
1987
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
All foreign countries
57 Total, all currencies
458,012
456,628
518,618
516,608r
506,062'
4%,755'
501,682'
519,740'
517,276'
521,436
58 Negotiable CDs
59 To United States
60
Parent bank
61
Other banks in United States
62
Nonbanks
34,607
156,281
84,657
16,894
54,730
31,629
152,465
83,394
15,646
53,425
30,929
161,390
87,606
20,559
53,225
30,734
174,459'
106,228'
13,584
54,647'
28,511
185,577'
114,720'
14,897
55,96C
28.538
172,055'
102,521'
13.539
55,995
30,013
174,956'
105,687'
12,989
56,280
30,768
185,831'
113,779'
14,659
57,393
30,278
177,583'
107,455'
14,307'
55,821
29,425
178,668
110,357
13,364
54,947
63 To foreigners
64
Other branches of parent bank
65
Banks
66
Official institutions
67
Nonbank foreigners
68 Other liabilities
245,939
89,529
76,814
19,520
60,076
21,185
253,775
95,146
77,809
17,835
62,985
18,759
304,803
124,601
87,274
19,564
73,364
21,4%
287,980'
112,315'
82,833'
17,743
75,089'
23,435'
270,923'
111,267'
72,842'
15,183
71,631'
21,051'
274,015'
109,125'
72,185'
18,867'
73,838'
22,147'
274,898'
111,582'
70,484'
17,323'
75,509'
21,815'
280,859'
116,148'
71,447'
17,911'
75,353'
22,282'
284,629'
117^
72,155'
17,933'
77,452'
24,786'
288,444
121,357
72,809
17,795
76,483
24,899
69 Total payable in U.S. dollars . . .
353,712
336,406
361,438
363,437'
367,090'
353,678'
356,597'
378,460'
371,237'
374,958
70 Negotiable CDs
71 To United States
72
Parent bank
73
Other banks in United States
74
Nonbanks
31,063
150,905
81,631
16,264
53,010
28,466
144,483
79,305
14,609
50,569
26,768
148,442
81,783
19,155
47,504
26,130
161,081'
97,898
12,230
50,953'
24,045
173,190'
107,150
13,628
52,412'
23,6%
159,650
94,531
12,413
52,706
25,452
161,449
96,714
11,535
53,200
26,287
173,471'
105,534'
13,355
54,582
25,970
164,957'
99,188'
12,781'
52,988
25,411
165,981
102,421
11,744
51,816
75 To foreigners
76
Other branches of parent bank
77
Banks
78
Official institutions
79
Nonbank foreigners
80 Other liabilities
163,583
71,078
37,365
14,359
40,781
8,161
156,806
71,181
33,850
12,371
39,404
6,651
177,711
90,469
35,065
12,409
39,768
8,517
164,828'
82,815'
31,138'
9,121
41,754'
11,398
160,373'
84,021
28,493'
8,224
39,635'
9,482
160,632'
82,149'
27,231'
10,880'
40,372'
9,700
159,542'
83,253
27,060'
8,740'
40,489'
10,154
168,257'
88,298'
28,949'
9,953'
41,057'
10,445
169,916'
89,425'
28,445'
9,591'
42,455'
10,394'
171,865
90,345
29,592
9,255
42,673
11,701
United Kingdom
148,599
140,917
158,695
159,556
156,835
156,529
154,879
154,856
153,146
155,532
82 Negotiable CDs
83 To United States
84
Parent bank
85
Other banks in United States
86
Nonbanks
31,260
29,422
19,330
2,974
7,118
27,781
24,657
14,469
2,649
7,539
26,988
23,470
13,223
1,740
8,507
26,013
32,420
23,226
1,768
7,426
24,528
36,784
27,849
2,197
6,738
24,253
34,535
24,130
2,568
7,837
25,942
35,393
25,562
1.915
7.916
26,625
32,757'
25,098'
1,984
5,675
26,157
29,715
20,455
1,551
7,709
25,539
30,986
20,329
1,720
8,937
87 To foreigners
88
Other branches of parent bank
89 Banks
90
Official institutions
91
Nonbank foreigners
92 Other liabilities
78,525
23,389
28,581
9,676
16,879
9,392
79,498
25,036
30,877
6,836
16,749
8,981
98,689
33,078
34,290
11,015
20,306
9,548
90,404
26,268
33,029
9,542
21,565
10,719
86,026
26,812
30,609
7,873
20,732
9,497
87,519
26,815
29,329
10,010
21,365
10,222
83,774
24,553
28,508
8,627
22,086
9,770
85,863'
25,781'
29,094
9,429
21,559
9,611
87,478
25,800
30,714
8,637
22,327
9,7%
88,866
26,867
30,806
8,946
22,247
10,141
93 Total payable in U.S. dollars . . .
112,697
99,707
102,550
102,933
105,514
104,462
103,302
105,942
100,514
102,840
94 Negotiable CDs
95 To United States
%
Parent bank
97
Other banks in United States
98
Nonbanks
29,337
27,756
18,956
2,826
5,974
26,169
22,075
14,021
2,325
5,729
24,926
17,752
12,026
1,512
4,214
23,543
27,123
21,003
1,366
4,754
22,063
32,588
26,404
1,912
4,272
21,500
30,032
22,069
2,362
5,601
23,419
30,442
22,998
1,600
5,844
24,302
29,578'
24,013'
1,719
3,846
24,073
25,493
18,524
1,227
5,742
23,568
26,673
18,545
1,368
6,760
99 To foreigners
100 Other branches of parent bank
101
Banks
102 Official institutions
103 Nonbank foreigners
104 Other liabilities
51,980
18,493
14,344
7,661
11,482
3,624
48,138
17,951
15,203
4,934
10,050
3,325
55,919
22,334
15,580
7,530
10,475
3,953
46,843
17,443
14,029
4,713
10,658
5,424
46,690
18,561
13,407
4,348
10,374
4,173
48,421
18,936
13,090
5,897
10,498
4,509
44,934
17,139
13,106
4,116
10,573
4,507
47,071'
18,335'
12,907
5,467
10,362
4,991
46,230
17,755
13,439
4,365
10,671
4,718
47,371
18,030
13,930
4,7%
10,615
5,228
81 Total, all currencies
Bahamas and Caymans
105 Total, all currencies
142,055
142,592
160,321
169,034
170,639
162,352
165,862
179,185'
172,324'
173,137
106 Negotiable CDs
107 To United States
108 Parent bank
109
Other banks in United States
110 Nonbanks
610
104,556
45,554
12,778
46,224
847
106,081
49,481
11,715
44,885
885
113,950
53,239
17,224
43,487
1,361
116,952
59,883
10,823
46,246
953
122,332
62,894
11,494
47,944
1,118
113,562
56,643
9,890
47,029
1,138
114,729
57,684
9,743
47,302
1,073
124,736
62,689
11,464
50,583
1,025
118,164'
59,762'
11,346'
47,056
872
120,150
64,908
10,198
45,044
111 To foreigners
112
Other branches of parent bank
113
Banks
114
Official institutions
115 Nonbank foreigners
116 Other liabilities
35,053
14,075
10,669
1,776
8,533
1,836
34,400
12,631
8,617
2,719
10,433
1,264
43,815
19,185
10,769
1,504
12,357
1,671
48,113
24,508
10,035
1,060
12,510
2,608
45,161
23,686
8,336
1,074
12,065
2,193
45,602
24,973
7,179
1,337
12,113
2,070
47,534
25,988
7,795
1,379
12,372
2,461
50,855'
28,010
8,495'
1,234
13,116
2,521
50,606'
27,655'
8,203'
1,722'
13,026'
2,529'
49,014
26,478
8,258
1,164
13,114
3,101
138,322
138,774
152,927
160,786
162,950
154,663
157,890
172,213
166,489'
166,954
117 Total payable in U.S. dollars
Summary Statistics
3.15
A59
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1988
Item
1986
1989
1987
Nov.
1 Total1
2
3
4
5
6
7
8
9
10
11
12
Dec.
Jan.
Feb.
Mar.
Apr.
May p
211,834
By area
Western Europe
Canada
Latin America and Caribbean
Africa
Other countries
259,556
300,978r
299,716'
301,756'
304,185'
307,497'
313,713'
306,087
27,920
75,650
31,838
88,829
35,nr
103,841
31,443'
103,722
36,735'
98,457
34,641'
98,192
33,417'
95,478
39,180'
96,109
37,684
91,798
91,368
1,300
15,596
122,432
300
16,157
146,813
520
14,693
149,056
523
14,972
151,075'
527
14,962
155,374'
531
15,447
161,923'
534
16,145
161,081'
538
16,805'
160,013
542
16,050
88,629
2,004
8,417
105,868
1,503
5,412
By type
Liabilities reported by banks in the United States
U.S. Treasury bills and certificates
U.S. Treasury bonds and notes
Marketable
Nonmarketable
U.S. securities other than U.S. Treasury securities
124,620
4,961
8,328
116,098
1,402
4,147
128,630'
10,066
10,525
142,826'
993
7,418
125,097'
9,584
10,094
145,548'
1,369
7,501
126,040'
9,668
9,943
147,316'
1,093
7,169
124,806'
9,856
8,875
152,236'
1,143
6,738
125,352'
10,156
7,533
156,317'
1,119
6,485
129,261'
9,994
7,216'
158,585'
1,065
7,053'
125,914
9,938
6,091
156,023
1,182
6,397
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes
bonds and notes payable in foreign currencies.
5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
NOTE. Based on Treasury Department data and on data reported to the
Treasury Department by banks (including Federal Reserve Banks) and securities
dealers in the United States.
3.16 LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in Foreign Currencies1
Millions of dollars, end of period
1988'
Item
1985
1986
1989
1987
June
1 Banks' own liabilities
2 Banks' own claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers
15,368
16,294
8,437
7,857
580
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
29,702
26,180
14,129
12,052
2,507
55,438
51,271
18,861
32,410
551
Sept.
Dec.
Mar.'
56,570
52,914
18,790
34,124
1,004
65,148
63,465
22,594
40,871
335
74,776
68,988
25,115
43,874
364
76,125
72,662
25,645
47,017
376
2. Assets owned by customers of the reporting bank located in the United
States that represent claims on foreigners held by reporting banks for the accounts
of the domestic customers.
A60
International Statistics • September 1989
3.17 LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States1
Millions of dollars, end of period
1988r
Holder and type of liability
1985
1986
1989''
1987
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Mayp
1 All foreigners
435,726
540,996
618,874
677,381
683,950
660,256
677,624
690,900
683,725
676,277
2 Banks' own liabilities
Demand deposits
3
4
Time deposits
5
Other.
6
Own foreign offices 4
341,070
21,107
117,278
29,305
173,381
406,485
23,789
130,891
42,705
209,100
470,070
22,383
148,374
51,677
247,635
504,144
22,079
149,704
53,981
278,380
513,573
21,894
152,194
51,506
287,979
493,030
20,602
145,481
52,322
274,625
507,557
21,733
151,137
51,005
283,682
523,606
22,483
157,978
54,177
288,968
517,108
22,333
157,056
56,613
281,105
513,358
22,092
155,177
58,267
277,823
94,656
69,133
134,511
90,398
148,804
101,743
173,237
116,861
170,377
114,976
167,226
111,141
170,067
110,992
167,295
108,048
166,617
106,827
162,919
102,661
17,964
7,558
15,417
28,696
16,776
30,285
16,658
39,718
16,367
39,033
16,763
39,321
17,071
42,004
16,957
42,289
17,259
42,532
18,527
41,732
11 Nonmonetary international and regional
organizations8
5,821
5,807
4,464
4,978
3,224
2,704
3,252
3,764
4,115
3,424
12 Banks' own liabilities
13 Demand deposits
14 Time deposits 2
15 O t h e r .
2,621
85
2,067
469
3,958
199
2,065
1,693
2,702
124
1,538
1,040
3,722
76
1,584
2,062
2,527
71
1,183
1,272
1,910
67
565
1,278
2,679
74
1,126
1,479
2,956
88
1,385
1,482
3,328
163
1,484
1,681
2,989
76
1,257
1,531
16 Banks' custody liabilities 5
17
U.S. Treasury bills and certificates 6
18 Other negotiable and readily transferable
instruments
19 Other
3,200
1,736
1,849
259
1,761
265
1,256
83
698
57
795
69
574
59
808
74
786
77
435
95
1,464
0
1,590
0
1,497
0
1,163
10
641
0
711
15
463
52
734
0
693
16
305
35
7 Banks' custody liabilities 5
8
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
9
instruments
10 Other
20 Official institutions
9
79,985
103,569
120,667
138,952
135,165
135,191
132,833
128,895
135,289
129,483
21 Banks' own liabilities
22
Demand deposits
23 Time deposits 2
24
Other 3
20,835
2,077
10,949
7,809
25,427
2,267
10,497
12,663
28,703
1,757
12,843
14,103
31,129
1,584
12,066
17,479
27,033
1,915
9,686
15,432
32,013
1,627
13,428
16,959
29,321
1,792
12,661
14,867
27,800
1,605
11,006
15,189
33,100
1,783
12,558
18,759
31,451
1,761
11,362
18,328
25 Banks' custody liabilities 5
26
U.S. Treasury bills and certificates 6
27
Other negotiable and readily transferable
instruments
28
Other
59,150
53,252
78,142
75,650
91,%5
88,829
107,823
103,841
108,132
103,722
103,178
98,457
103,512
98,192
101,095
95,478
102,189
%,109
98,032
91,798
5,824
75
2,347
145
2,990
146
3,768
214
4,130
280
4,598
124
5,076
244
5,466
152
5,875
205
6,049
185
29 Banks14
275,589
351,745
414,280
445,725
458,248
435,464
452,338
469,562
454,368
452,484
30 Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits 2
34
Other 1 .
35
Own foreign offices 4
252,723
79,341
10,271
49,510
19,561
173,381
310,166
101,066
10,303
64,232
26,531
209,100
371,665
124,030
10,898
79,717
33,415
247,635
395,310
116,930
10,403
75,479
31,049
278,380
408,576
120,597
9,980
80,303
30,314
287,979
384,974
110,350
9,459
71,838
29,053
274,625
399,833
116,152
9,584
76,679
29,889
283,682
417,332
128,364
11,012
84,112
33,240
288,968
402,578
121,473
10,559
80,806
30,108
281,105
400,794
123,0%
11,160
79,057
32,878
277,698
22,866
9,832
41,579
9,984
42,615
9,134
50,415
8,087
49,671
7,602
50,489
7,819
52,505
7,491
52,231
7,310
51,789
6,921
51,690
7,114
6,040
6,994
5,165
26,431
5,392
28,089
5,6%
36,632
5,666
36,403
5,870
36,800
5,894
39,120
5,254
39,667
5,032
39,836
5,476
39,100
36 Banks' custody liabilities5
37
U.S. Treasury bills and certificates 6
38
Other negotiable and readily transferable
instruments
39
Other
40 Other foreigners
74,331
79,875
79,463
87,725
87,313
86,896
89,200
88,679
89,954
90,886
41 Banks' own liabilities
42
Demand deposits
43
Time deposits 2
44
Other 3
64,892
8,673
54,752
1,467
66,934
11,019
54,097
1,818
67,000
9,604
54,277
3,119
73,982
10,017
60,575
3,391
75,438
9,928
61,022
4,487
74,132
9,450
59,651
5,032
75,724
10,282
60,671
4,771
75,518
9,777
61,475
4,265
78,101
9,828
62,208
6,066
78,124
9,095
63,500
5,529
45 Banks' custody liabilities5
46
U.S. Treasury bills and certificates 6
47
Other negotiable and readily transferable
instruments
48
Other
9,439
4,314
12,941
4,506
12,463
3,515
13,743
4,849
11,876
3,595
12,764
4,797
13,476
5,250
13,161
5,188
11,853
3,720
12,762
3,652
4,636
489
6,315
2,120
6,898
2,050
6,031
2,863
5,929
2,351
5,584
2,382
5,638
2,589
5,503
2,471
5,658
2,474
6,698
2,412
49 MEMO: Negotiable time certificates of deposit in
custody for foreigners
9,845
7,4%
7,314
6,128
6,366
6,286
6,064
5,809
5,535
5,611
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
2. Excludes negotiable time certificates of deposit, which are included in
"Other negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. U.S. banks: includes amounts due to own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of
foreign banks: principally amounts due to head office or parent foreign bank, and
foreign branches, agencies, or wholly owned subsidiaries of head office or parent
foreign bank.
5. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.
6. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
8. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks. Data exclude "holdings of
dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for
International Settlements.
10. Excludes central banks, which are included in "Official institutions."
Nonbank-Reported
Data
3.17—Continued
1988'
Area and country
1985
1986
1989
1987
Nov.
Dec.
Jan.'
Feb.
Mar.
Apr.
May p
1 Total
435,726
540,996
618,874
677,381
683,950
660,256
677,624'
690,900'
683,725
676,277
2 Foreign countries
429,905
535,189
614,411
672,403
680,726
657,551
674,371'
687,136'
679,611
672,853
164,114
693
5,243
513
4%
15,541
4,835
666
9,667
4,212
948
652
2,114
1,422
29,020
429
76,728
673
9,635
105
523
180,556
1,181
6,729
482
580
22,862
5,762
700
10,875
5,600
735
699
2,407
884
30,534
454
85,334
630
3,326
80
702
234,641
920
9,347
760
377
29,835
7,022
689
12,073
5,014
1,362
801
2,621
1,379
33,766
703
116,852
710
9,798
32
582
233,867
1,599
11,100
3,089
359
24,546
7,983
683
13,339
5,939
1,342
739
5,980
1,815
31,890
793
111,693
569
9,627
74
710
235,979
1,155
10,028
2,180
284
24,762
6,777
672
14,602
5,316
1,559
903
5,494
1,274
34,183
1,012
115,926
529
8,598
138
589
223,869
1,129
8,991
1,833
375
22,264
5,794
919
11,312
5,248
1,502
870
5,750
1,299
32,519
939
110,878
489
10,906
155
697
228,393
1,777
10,508
2,082
560
24,260
5,263
933
11,073
6,011
1,367
813
5,174
1,319
31,659
1,246
113,419^
434
9,929
108
458
231,905'
1,436
9,316'
1,639
527
26,824'
5,514
760
13,480
5,600
1,547
831
4,902
1,416
29,815'
1,023
115,325
440
10,730
102
677
230,616
1,608
10,114
1,615
397
25,734
6,968
927
12,964
5,601
1,783
824
5,794
1,730
28,873
1,046
111,604
465
11,521
90
958
228,054
1,427
8,778
1,642
432
24,318
7,785
1,172
12,543
5,862
1,479
985
5,415
1,556
28,791
812
112,295
479
11,615
218
448
3 Europe
4 Austria
5 Belgium-Luxembourg
6 Denmark
7
Finland
8 France
9
Germany
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
15 Spain
16 Sweden
17
Switzerland
18 Turkey
19 United Kingdom
20 Yugoslavia
21 Other Western Europe 1
22
U.S.S.R
Other Eastern Europe 2
23
24 Canada
17,427
26,345
30,095
26,199
21,040
19,277
20,732
25,694
22,984
18,342
167,856
6,032
57,657
2,765
5,373
42,674
2,049
3,104
11
1,239
1,071
122
14,060
4,875
7,514
1,167
1,552
11,922
4,668
210,318
4,757
73,619
2,922
4,325
72,263
2,054
4,285
7
1,236
1,123
136
13,745
4,970
6,886
1,163
1,537
10,171
5,119
220,372
5,006
74,767
2,344
4,005
81,494
2,210
4,204
12
1,082
1,082
160
14,480
4,975
7,414
1,275
1,582
9,048
5,234
256,775
7,360
83,728
2,752
5,255
103,755
2,677
4,277
9
1,381
1,187
177
15,470
5,933
4,152
1,694
1,909
9,353
5,706
266,295
7,804
86,606
2,621
5,304
109,335
2,936
4,374
10
1,379
1,195
269
15,106
6,420
4,353
1,671
1,898
9,146
5,868
257,809
7,629
82,009
2,381
4,675
107,026
2,969
4,317
10
1,365
1,236
180
15,273
5,763
4,284
1,716
2,011
9,159
5,806
263,344'
6,836
83,455
2,545
4,829
110,989'
2,975
4,470'
10
1,403'
1,259
170
14,867
5,641
4,497'
1,728
2,142
9,532
5,997'
264,598'
6,415'
85,586'
2,513'
4,925
110,809'
3,063
4,166'
10
1,422
1,271
223
14,625
5,666
4,388
1,707
2,243
9,489'
6,076'
267,284
6,280
86,053
2,367
5,554
112,838
2,933
4,190
10
1,376
1,272
222
14,273
5,767
4,348
1,763
2,258
9,553
6,227
268,611
6,493
88,882
2,427
5,297
111,663
2,988
4,032
16
1,285
1,232
188
13,979
6,075
4,435
1,716
2,328
9,404
6,173
72,280
108,831
121,288
145,620
147,246
146,594
151,237'
154,900'
148,795
147,475
1,607
7,786
8,067
712
1,466
1,601
23,077
1,665
1,140
1,358
14,523
9,276
1,476
18,902
9,393
674
1,547
1,892
47,410
1,141
1,866
1,119
12,352
11,058
1,162
21,503
10,180
582
1,404
1,292
54,322
1,637
1,085
1,345
13,988
12,788
1,401
24,747
12,437
770
995
1,063
73,000
2,654
1,139
1,205
12,876
13,334
1,892
26,058
11,727
6%
1,189
1,471
73,989
2,541
1,163
1,236
12,060
13,225
1,566
26,178
10,891
689
1,189
1,217
75,337
2,454
976
1,373
12,426
12,298
1,602
26,001
11,387
838
1,198
1,366
77,407
2,502
1,014
1,615
12,372'
13,935'
1,588'
26,143'
10,761
900
1,611
1,156
83,02c
2,827
977
1,151
12,029
12,737'
1,809
28,265
11,422
1,787
1,168
973
72,715
3,023
981
1,165
12,098
13,389
1,642
26,923
12,207
1,009
1,319
1,113
70,450
3,194
992
1,162
13,486
13,980
57 Africa
58 Egypt
59 Morocco
60 South Africa
61 Zaire
62 Oil-exporting countries 4
63 Other
4,883
1,363
163
388
163
1,494
1,312
4,021
706
92
270
74
1,519
1,360
3,945
1,151
194
202
67
1,014
1,316
3,545
758
64
267
80
952
1,425
3,991
913
68
437
85
1,017
1,472
3,690
771
90
250
74
1,024
1,480
3,793'
819
69
212
75
1,121
1,4%'
3,717'
756
60
226
77
1,062
1,536'
3,665
721
82
256
73
1,017
1,516
3,806
702
68
320
92
882
1,742
64 Other countries
65 Australia
66 All other
3,347
2,779
568
5,118
4,196
922
4,070
3,327
744
6,397
5,426
971
6,175
5,303
872
6,312
5,485
827
6,872
6,037
836
6,322
5,490
832
6,267
5,471
796
6,565
5,702
863
67 Nonmonetary international and regional
organizations
International
Latin American regional
Other regional
5,821
4,806
894
121
5,807
4,620
1,033
154
4,464
2,830
1,272
362
4,978
3,491
1,276
211
3,224
2,503
589
133
2,704
1,725
747
232
3,252
2,106
732
414
3,764'
2,546'
995
223
4,115
2,682
963
469
3,424
2,466
564
394
25 Latin America and Caribbean
26 Argentina
27 Bahamas
28
Bermuda
29 Brazil
30 British West Indies
31 Chile
32 Colombia
33 Cuba
34 Ecuador
35 Guatemala
36 Jamaica
37 Mexico
38 Netherlands Antilles
39 Panama
40 Peru
41
Uruguay
42
Venezuela
43 Other
44 Asia
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle-East oil-exporting countries
Other
45
46
47
48
49
50
51
52
53
54
55
56
68
69
70
1. Includes the Bank for International Settlements and Eastern European
countries that are not listed in line 23.
2. Comprises Bulgaria, Czechoslovakia, the German Democratic Republic,
Hungary, Poland, and Romania.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Excludes "holdings of dollars" of the International Monetary Fund.
6. Asian, African, Middle Eastern, and European regional organizations,
except the Bank for International Settlements, which is included in "Other
Western Europe."
A61
A62
International Statistics • September 1989
3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1988
Area and country
1985
1986
1989
1987
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May"
1 Total
401,608
444,745
459,877
486,686'
491,083
481,711'
493,175'
503,875
495,929
489,937
2 Foreign countries
400,577
441,724
456,472
481,877'
489,012'
479,132'
491,270'
501,836
494,094
486,652
106,413
598
5,772
706
823
9,124
1,267
991
8,848
1,258
706
1,058
1,908
2,219
3,171
1,200
62,566
1,964
998
130
1,107
107,823
728
7,498
688
987
11,356
1,816
648
9,043
3,296
672
739
1,492
1,964
3,352
1,543
58,335
1,835
539
345
948
102,348
793
9,397
717
1,010
13,548
2,039
462
7,460
2,619
934
477
1,853
2,254
2,718
1,680
50,823
1,700
619
389
852
108,212'
721
8,898'
599
1,157
12,478
2,307
601
7,100
2,763
478
253
2,054
2,083
2,984'
1,265
58,089'
1,450
916
1,218
799
117,053'
485
8,517'
480
1,065
13,243'
2,327
433
7,946
2,547
455
374
1,823
1,977
3,895
1,233
65,702'
1,390
1,152
1,255
754'
107,477'
544
8,301'
410
911
13,315
2,398
448
5,526
2,514
472
339
2,182
2,619
3,510'
1,152
58,065'
1,371
1,275
1,286
838'
113,814'
646
7,871'
790
1,114,
14,920
1,695'
517
5,581
2,475
601
331
2,153
2,622
3,780'
1,108
62,469'
1,348
1,560
1,389
845
116,279
809
7,834
548
909
15,729
3,110
586
5,866
2,808
432
367
2,133
2,613
3,822
1,039
62,877
1,455
1,262
1,298
780
111,668
805
8,102
770
1,214
16,603
4,015
561
4,890
2,732
551
281
2,309
2,164
4,853
1,005
55,858
1,369
1,465
1,346
775
112,852
764
8,435
470
1,280
16,078
3,959
595
5,627
3,183
567
371
1,893
2,157
4,2%
910
57,%1
1,366
966
1,155
820
3 Europe
4
Austria
5
Belgium-Luxembourg
Denmark
6
7
Finland
8
France
Germany
9
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
13 Spain
16 Sweden
17 Switzerland
18 Turkey
19
United Kingdom
20
Yugoslavia
21
Other Western Europe
22
U.S.S.R
Other Eastern Europe
23
16,482
21,006
25,368
23,278'
18,889'
16,733'
18,079
19,042
19,154
16,049
25 Latin America and Caribbean
26
Argentina
27
Bahamas
Bermuda
28
Brazil
29
British West Indies
30
31
Chile
32
Colombia
33
Cuba
34
Ecuador
35 Guatemala 4
36 Jamaica 4
37
Mexico
38
Netherlands Antilles
Panama
39
Peru
40
41
Uruguay
Venezuela
42
43
Other Latin America and Caribbean
24 Canada
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
208,825
12,091
59,342
418
25,716
46,284
6,558
2,821
0
2,439
140
198
30,698
1,041
5,436
1,661
940
11,108
1,936
214,789
11,996
64,587
471
25,897
50,042
6,308
2,740
1
2,286
144
188
29,532
980
4,744
1,329
963
10,843
1,738
211,855'
12,046'
67,241'
511
26,399
51,344'
5,319
2,983'
0
2,162
167
206'
25,386
1,43C
2,378'
1,014'
888
10,737'
1,642'
214,074'
11,826'
67,006'
483
25,735
55,640'
5,217'
2,944'
1
2,075
198
212'
24,636
1,312'
2,535'
1,013'
910
10,733'
1,5%'
210,439'
11,880
68,836'
475
25,835
50,542'
5,156
2,867
1
2,048
185
214
24,445
1,222
2,535
1,011
880
10,748
1,560
210,538'
11,802'
69,607'
535
25,369'
50,542
5,141'
2,813'
1
2,026
188
202
24,387'
1,150
2,535'
952
856
10,957'
1,475
220,767
11,616
72,804'
707
25,615
57,570
5,335
2,746
1
2,032
199
251
24,187
1,005
2,460
947
875
10,761
1,658
220,089
11,516
75,548
361
25,945
54,711
5,224
2,661
2
2,024
210
266
24,058
1,010
2,424
947
876
10,635
1,668
217,6%
11,381
70,442
449
25,872
57,742
5,266
2,600
1
1,944
207
271
24,007
1,000
2,475
938
832
10,600
1,670
44 Asia
China
Mainland
Taiwan
46
Hong Kong
47
India
48
Indonesia
49
50
Israel
51
Japan
52
Korea
Philippines
53
Thailand
^
54
55
Middle East oil-exporting countries
Other Asia
56
66,212
96,126
106,0%
130,258'
130,867'
135,839'
140,041'
137,055
134,681
131,613
639
1,535
6,797
450
698
1,991
31,249
9,226
2,224
845
4,298
6,260
787
2,681
8,307
321
723
1,634
59,674
7,182
2,217
578
4,122
7,901
968
4,592
8,218
510
580
1,363
68,658
5,148
2,071
4%
4,858
8,635
777
3,845
10,818'
568
767
1,231
89,509'
5,390
1,900
778
6,657
8,018
762
4,184
10,136'
560
674'
1,137
90,161'
5,219
1,876
850
6,182'
9,126'
830
3,902
8,727
645
669
1,0%'
99,056'
4,%1
1,847
887
5,371'
7,847'
881
3,960
8,004
628
735
1,043'
104,831'
4,891
1,900
931
4,681'
7,556'
993
4,179
7,884
563
649
1,050
101,471
5,183
1,913
986
5,409
6,776
816
3,952
8,333
425
726
1,054
97,877
5,198
1,839
1,023
5,130
8,309
959
3,715
8,855
411
682
1,041
93,431
5,338
1,810
975
5,515
8,881
57 Africa
58
Egypt
59
Morocco
South Africa
60
Zaire
61
Oil-exporting countries
62
Other
63
5,407
721
575
1,942
20
630
1,520
4,650
567
598
1,550
28
694
1,213
4,742
521
542
1,507
15
1,003
1,153
5,629
532
488
1,698
18
1,491
1,402
5,718'
507'
511
1,681
17
1,523
1,479
5,924
495
524
1,688
16
1,534
1,666
6,072
567
532
1,718
16
1,522
1,717
5,973
543
541
1,702
17
1,481
1,690
6,086
541
532
1,742
19
1,474
1,778
6,084
541
538
1,753
19
1,504
1,729
64 Other countries
65
Australia
66
All other
3,390
2,413
978
3,294
1,949
1,345
3,129
2,100
1,029
2,645
1,586
1,059
2,410
1,517
894
2,720
1,711
1,009
2,726
1,686
1,040
2,720
1,685
1,034
2,417
1,505
912
2,359
1,167
1,192
67 Nonmonetary international and regional
organizations
1,030
3,021
3,404
4,809'
2,071'
2,579'
1,905
2,039
1,835
3,284
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
2. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
3. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German
Democratic Republic, Hungary, Poland, and Romania.
4. Included in "Other Latin America and Caribbean" through March 1978.
5. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
6. Comprises Algeria, Gabon, Libya, and Nigeria.
7. Excludes the Bank for International Settlements, which is included in
"Other Western Europe."
Nonbank-Reported
Data
3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1988r
Type of claim
1985
1989
1987
1986
Nov.
Dec.
486,686
65,403
255,632
123,213
55,777
67,436
42,438
491,083
62,438
257,345
129,413
65,819
63,594
41,886
Jan/
Feb/
Mar/
481,711
63,974
256,848
119,040
58,389
60,650
41,850
493,175
63,245
262,810
124,495
62,616
61,879
42,626
503,875
62,696
271,915
130,075
66,553
63,522
39,189
1 Total
430,489
478,650
497,635
2 Banks' own claims on foreigners
Foreign public borrowers
3
4
Own foreign offices
5
Unaffiliated foreign banks
Deposits
6
7
Other
8
All other foreigners
401,608
60,507
174,261
116,654
48,372
68,282
50,185
444,745
64,095
211,533
122,946
57,484
65,462
46,171
459,877
64,605
224,727
127,609
60,687
66,922
42,936
28,881
3,335
33,905
4,413
37,758
3,692
47,524
8,289
24,044
26,696
25,700
5,448
7,370
13,535
25,706
23,107
19,556
43,984
40,587
46,399
n.a.
17,161
38,102
489,937
63,068
257,234
130,280
67,569
62,711
39,354
16,134
28,487
495,929
62,801
260,222
131,523
69,007
62,516
41,382
24,960
6,214
May"
53,178
12,084
19,332
Apr.
9 Claims of banks' domestic customers 3 ...
11
538,607
557,054
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 5
49,783
1. Data for banks' own claims are given on a monthly basis, but the data for
claims of banks' own domestic customers are available on a quarterly basis only.
Reporting banks include all kinds of depository institutions besides commercial
banks, as well as some brokers and dealers.
2. U.S. banks: includes amounts due from own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of
foreign banks: principally amounts due from head office or parent foreign bank,
and foreign branches, agencies, or wholly owned subsidiaries of head office or
43,360
46,294
47,775
45,419
parent foreign bank.
3. Assets owned by customers of the reporting bank located in the United
States that represent claims on foreigners held by reporting banks for the account
of their domestic customers.
4. Principally negotiable time certificates of deposit and bankers acceptances.
5. Includes demand and time deposits and negotiable and nonnegotiable
certificates of deposit denominated in U.S. dollars issued by banks abroad. For
description of changes in data reported by nonbanks, see July 1979 BULLETIN,
p. 550.
3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1988'
Maturity; by borrower and area
1985
1986
1989
1987
June
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
By borrower
Maturity of 1 year or less
Foreign public borrowers
All other foreigners
Maturity over 1 y e a r
Foreign public borrowers
All other foreigners
By area
Maturity of 1 year or less
Europe
Canada
Latin America and Caribbean
Africa
All other 3
Maturity of over 1 y e a r
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 3
Dec.
Mar.
227,903
232,295
235,130
228,219
230,401
233,152
230,888
160,824
26,302
134,522
67,078
34,512
32,567
160,555
24,842
135,714
71,740
39,103
32,637
163,997
25,889
138,108
71,133
38,625
32,507
163,762
27,551
136,211
64,456
35,792
28,664
167,956
29,389
138,567
62,444
35,156
27,288
172,571
26,581
145,990
60,581
35,067
25,514
167,943
23,822
144,121
62,945
37,941
25,004
56,585
6,401
63,328
27,966
3,753
2,791
61,784
5,895
56,271
29,457
2,882
4,267
59,027
5,680
56,535
35,919
2,833
4,003
55,971
6,664
56,219
38,902
2,914
3,092
54,283
6,410
55,552
42,375
3,120
6,216
56,037
6,283
57,867
46,160
3,336
2,888
57,624
5,137
53,198
45,545
3,610
2,830
7,634
1,805
50,674
4,502
1,538
926
6,737
1,925
56,719
4,043
1,539
777
6,696
2,661
53,817
3,830
1,747
2,381
5,315
2,333
49,755
3,622
2,433
998
5,306
2,051
48,274
3,933
2,257
625
4,682
1,922
47,572
3,603
2,301
501
4,461
2,280
49,746
3,686
2,293
480
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
Sept.
2. Remaining time to maturity,
3. Includes nonmonetary international and regional organizations.
A63
A64
International Statistics • September 1989
3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1-2
Billions of dollars, end of period
1987
Area or country
1985
1988
1989
1986
Mar.
1 Total
June
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
385.4
385.1
395.4
384.6
387.7
381.4
370.2r
350.8'
354.4'
349.6'
ssi^
146.0
9.2
12.1
10.5
9.6
3.7
2.7
4.4
63.0
6.8
23.9
156.6
8.3
13.7
11.6
9.0
4.6
2.4
5.8
71.0
5.3
24.9
162.7
9.1
13.3
12.7
8.7
4.4
3.0
5.8
73.7
5.3
26.9
158.1
8.3
12.5
11.2
7.5
7.3
2.4
5.7
72.0
4.7
26.3
155.2
8.2
13.7
10.5
6.6
4.8
2.6
5.4
72.1
4.7
26.5
160.0
10.1
13.8
12.6
7.3
4.1
2.1
5.6
69.1
5.5
29.8
157.0r
9.3
11.5
11.8
7.4
3.3
2.1
5.1
71.7
4.9
29.9 r
151.0'
9.1'
10.8
10.6
6.1
3.3
1.9
5.6
70.5
5.4
27.8'
149.5
9.5
10.0
8.9
5.8'
3.0
2.0
5.2
68.1
5.2
31.7
154.4'
9.0
10.7
9.9
6.3'
2.8
2.0
5.7
66.7
5.5
35.9
149.5'
8.6
11.2
10.0
4.9
2.9
2.4
5.2
66.1'
4.6
33.6
13 Other developed countries
14 Austria
15 Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20
Spain
21
Turkey
22
Other Western Europe
23
South Africa
24
Australia
29.9
1.5
2.3
1.6
2.6
2.9
1.2
5.8
1.8
2.0
3.2
5.0
25.7
1.7
1.7
1.4
2.3
2.4
.8
5.8
1.8
1.4
3.0
3.5
25.7
1.9
1.7
1.4
2.1
2.2
.9
6.3
1.7
1.4
3.0
3.2
25.2
1.8
1.5
1.4
2.0
2.1
.8
6.1
1.7
1.5
3.0
3.1
25.9
1.9
1.6
1.4
1.9
2.0
.8
7.4
1.5
1.6
2.9
2.9
26.2
1.9
1.7
1.3
2.0
2.3
.5
8.0
1.6
1.6
2.9
2.4
26. l r
1.6
1.4
1.0
2.3
2.0
.4
9.0
1.6
1.9
2.8
2.1
23.7
1.6
1.0
1.2
2.2
2.0
.4
7.2
1.5
1.6
2.8
2.2
22.7
1.6
1.1
1.3
2.1
2.0
.4
6.3
1.3
1.9
2.7
1.8
20.9
1.6
.9
1.2
1.9
1.8
.5
6.2
1.3
1.3
2.4
1.8
20.8
1.4
1.0
1.0
2.2
1.5
.5
6.3
1.0
1.4
2.2
2.4
25 OPEC countries 3
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
21.3
2.1
8.9
3.0
5.3
2.0
19.3
2.2
8.6
2.5
4.3
1.7
20.0
2.1
8.5
2.4
5.4
1.6
18.8
2.1
8.4
2.2
4.4
1.7
19.0
2.1
8.3
2.0
5.0
1.7
17.1
1.9
8.1
1.9
3.6
1.7
17.2
1.9
8.0
1.9
3.6
1.7
16.4
1.8
8.0
1.9
3.1
1.7
17.6
1.8
7.9
1.9
4.3
1.7
16.5
1.7
7.9
1.8'
3.3'
1.7
16.3
1.7
8.0
1.8
3.2
1.6
104.2
99.1
100.7
100.4
97.7
97.6
94.4'
91.3
87.0
85.3'
85.6'
8.8
25.4
6.9
2.6
23.9
1.8
3.4
9.5
25.2
7.1
2.1
23.8
1.4
3.1
9.5
26.2
7.3
2.0
24.1
1.4
3.0
9.5
25.1
7.2
1.9
25.3
1.3
2.9
9.3
25.1
7.0
1.9
24.8
1.2
2.8
9.4
24.7
6.9
2.0
23.7
1.1
2.7
9.5
23.9
6.6
1.9
22.5
1.1
2.8
9.4
23.7
6.4
2.1
21.1
.9
2.6
9.2
22.4
6.2
2.1
20.6
.8
2.5
8.9
22.5
5.5'
2.0
19.0
.8
2.6
8.4
22.7'
5.6
1.9
18.2'
.7
2.8'
2 G-10 countries and Switzerland
Belgium-Luxembourg
3
4
France
5 Germany
Italy
6
7
Netherlands
8
Sweden
9
Switzerland
10 United Kingdom
11 Canada
12 Japan
31 Non-OPEC developing countries
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other Latin America
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
.5
4.5
1.2
1.6
9.2
2.4
5.7
1.4
1.0
.4
4.9
1.2
1.5
6.6
2.1
5.4
.9
.7
.9
5.5
1.8
1.4
6.2
1.9
5.4
.9
.6
.6
6.6
1.7
1.3
5.6
1.7
5.4
.8
.7
.3
6.0
1.9
1.3
4.9
1.6
5.4
.7
.7
.3
8.2
1.9
1.0
4.9
1.5
5.1
.7
.7
.4
6.1
2.1
1.0
5.6
1.5
5.1
1.0
.7
.3
4.9
2.3
1.0
5.9
1.5
4.9
1.1
.8
.2
3.2
2.0
1.0
6.0
1.6
4.5
1.2
.8
.3
3.6
2.1
1.2
6.1
1.6
4.5
1.1
.9
.5
4.9
2.6
.9
6.2'
1.7
4.3
1.0
.8
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 4
1.0
.9
.1
1.9
.7
.9
.1
1.6
.6
.9
.1
1.4
.6
.9
.1
1.3
.6
.8
.1
1.3
.5
.9
.0
1.3
.5
.9
.1
1.2
.6
.9
.1
1.2
.5
.8
.0
1.2
.4
.9
0
1.1
.5
.9
0
1.1
52 Eastern Europe
53
U.S.S.R
54
Yugoslavia
55
Other
4.1
.1
2.2
1.8
3.2
.1
1.7
1.4
3.0
.1
1.6
1.3
3.3
.3
1.7
1.3
3.3
.5
1.7
1.2
3.0
.4
1.6
1.0
2.9
.3
1.7
.9
3.1
.4
1.7
1.0
3.0
.4
1.7
1.0
3.7
.7
1.8
1.2
3.5
.7
1.7
1.2
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama 5
62
Lebanon
63
Hong Kong
64
Singapore
65
Others 6
62.9
21.2
.7
11.6
2.2
6.0
.1
11.4
9.8
.0
61.3
22.0
.7
12.4
1.8
4.0
.1
11.1
9.2
.0
63.1
23.9
.8
12.2
1.7
4.3
.1
11.4
8.6
.0
60.7
19.9
.6
14.0
1.3
3.9
.1
12.5
8.3
.0
64.3
25.5
.6
12.8
1.2
3.7
.1
12.3
8.1
.0
54.3
17.1
.6
13.3
1.2
3.7
.1
11.2
7.0
.0
5i.r
15.2r
.8
11.8'
1.3
3.3
.1
11.3
7.4
.0
43.0'
8.6
1.0
10.5'
1.2
3.0
.1
11.7
6.8
.0
47.2'
12.5
.9
12.3'
1.2
2.7
.1
10.6
7.0
.0
46.5'
11.5
.8
14.0'
1.0
2.6
.1
10.2
6.2
.0
50^
15.6'
1.0
14.4'
.9
2.3
.1
9.9
6.7
.0
66 Miscellaneous and unallocated 7
16.9
19.8
20.1
18.1
22.3
23.2
21.5
22.3
27.0
21.8
24.8'
1. The banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are
adjusted to exclude the claims on foreign branches held by a U.S. office or another
foreign branch of the same banking institution. The data in this table combine
foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims
of U.S. offices in table 3.18 (excluding those held by agencies and branches of
foreign banks and those constituting claims on own foreign branches).
2. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
3. This group comprises the Organization of Petroleum Exporting Countries
shown individually, other members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait,
Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates), and Bahrain and
Oman (not formally members of OPEC).
4. Excludes Liberia.
5. Includes Canal Zone beginning December 1979.
6. Foreign branch claims only.
7. Includes New Zealand, Liberia, and international and regional organizations.
Nonbank-Reported
Data
A65
3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the
United States1
Millions of dollars, end of period
1988'
1987
Type, and area or country
1984
1985
1989
1986
Dec/
Mar.
June
Sept.
Dec.
Mar/
1 Total
29,357
27,825
25,587
28,303
29,792
30,283
32,244
33,013
35,806
2 Payable in dollars
3 Payable in foreign currencies
26,389
2,968
24,296
3,529
21,749
3,838
22,785
5,518
24,339
5,453
25,131
5,152
27,215
5,029
27,817
5,196
30,401
5,405
By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies
14,509
12,553
1,955
13,600
11,257
2,343
12,133
9,609
2,524
12,424
8,643
3,781
14,139
10,472
3,667
14,070
10,560
3,510
14,953
11,558
3,395
14,753
11,266
3,487
16,175
12,472
3,703
14,849
7,005
7,843
13,836
1,013
14,225
6,685
7,540
13,039
1,186
13,454
6,450
7,004
12,140
1,314
15,878
7,305
8,573
14,142
1,737
15,653
6,454
9,200
13,867
1,786
16,213
6,768
9,446
14,571
1,642
17,291
6,479
10,812
15,657
1,635
18,260
6,247
12,014
16,551
1,709
19,631
6,760
12,871
17,929
1,702
6,728
471
995
489
590
569
3,297
7,700
349
857
376
861
610
4,305
7,917
270
661
368
542
646
5,140
8,320
213
364
551
884
558
5,557
9,377
251
390
553
1,008
691
6,301
9,215
279
353
503
880
638
6,390
10,353
336
354
488
1,014
734
7,257
9,559
287
249
548
897
1,163
6,268
11,168
317
231
372
951
889
8,213
7 Commercial liabilities
8
Trade payables
Advance receipts and other liabilities . .
9
10 Payable in dollars
11 Payable in foreign currencies
12
13
14
15
16
17
18
By area or country
Financial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
19
Canada
863
839
399
360
394
403
421
638
603
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
5,086
1,926
13
35
2,103
367
137
3,184
1,123
4
29
1,843
15
3
1,944
614
4
32
1,146
22
0
1,189
318
0
25
13
0
1,452
289
0
0
1,099
15
2
1,448
250
0
0
1,154
26
0
1,057
238
0
0
812
2
0
1,239
184
0
0
645
1
0
677
189
0
0
471
15
0
27
28
29
Asia
Japan
Middle East oil-exporting countries 2 .
1,777
1,209
155
1,815
1,198
82
1,805
1,398
8
2,452
2,042
8
2,836
2,375
11
2,928
2,331
11
3,116
2,462
4
3,313
2,563
3
3,722
2,950
1
30
Africa
14
0
12
0
1
1
4
1
5
3
2
1
3
1
1
0
5
3
41
50
67
100
75
74
3
2
2
4,001
48
438
622
245
257
1,095
4,074
62
453
607
364
379
976
4,446
101
352
715
424
385
1,341
5,505
132
426
908
423
559
1,588
5,619
154
414
810
457
527
1,722
5,722
147
408
791
508
482
1,771
6,687
205
438
1,185
647
486
2,105
7,274
169
455
1,684
590
410
2,032
7,693
133
569
1,345
667
451
2,409
31
32
33
34
35
36
37
38
39
40
Oil-exporting countries
All other 4
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
11%
1,975
1,449
1,405
1,301
1,392
1,167
1,109
1,207
1,147
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,871
7
114
124
32
586
636
1,088
12
77
58
44
430
212
924
32
156
61
49
217
216
864
18
168
46
19
189
162
980
19
325
59
14
164
122
1,035
61
272
54
28
233
140
997
19
222
58
30
177
204
999
45
184
91
31
179
176
1,186
35
376
100
29
197
179
48
49
50
Asia
Japan
...
Middle East oil-exporting countries 2 ' 3
5,285
1,256
2,372
6,046
1,799
2,829
5,080
2,042
1,679
6,565
2,578
1,964
5,883
2,508
1,062
6,279
2,659
1,320
6,627
2,763
1,298
6,899
3,087
1,386
7,430
3,046
1,526
51
52
Africa
Oil-exporting countries
588
233
587
238
619
197
574
135
575
139
626
115
465
1065
564
201
692
271
53
All other 4
1,128
982
980
1,068
1,204
1,383
1,407
1,317
1,482
1. For a description of the changes in the International Statistics tables, see
J u l y 1979 B U L L E T I N , p . 5 5 0 .
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
5. Revisions include a reclassification of transactions, which also affects the
totals for Asia and the grand totals.
A66
International Statistics • September 1989
3.23 CLAIMS ON UNAFFILIATED FOREIGNERS
United States1
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1987
Type, and area or country
1984
1985
1988'
1989
1986
Dec/
Mar.
June
Sept.
Dec.
Mar. p
1 Total
29,901
28,876
36,265
30,942
31,067
37,633
37,415
31,882
30,049
2 Payable in dollars
3 Payable in foreign currencies
27,304
2,597
26,574
2,302
33,867
2,399
28,469
2,473
28,993
2,074
35,593
2,040
34,984
2,431
29,622
2,260
27,851
2,198
By type
4 Financial claims
5
Deposits
Payable in dollars
6
7
Payable in foreign currencies
Other financial claims
8
Payable in dollars
9
Payable in foreign currencies
10
19,254
14,621
14,202
420
4,633
3,190
1,442
18,891
15,526
14,911
615
3,364
2,330
1,035
26,273
19,916
19,331
585
6,357
5,005
1,352
20,341
14,953
13,813
1,140
5,388
4,574
814
20,304
12,693
12,105
588
7,612
6,491
1,120
26,265
19,551
18,822
730
6,714
5,819
895
26,327
19,127
18,180
947
7,200
6,257
942
20,233
14,556
13,525
1,031
5,677
4,953
724
18,346
13,610
12,759
850
4,737
3,8%
841
11 Commercial claims
12 Trade receivables
13 Advance payments and other claims
10,646
9,177
1,470
9,986
8,696
1,290
9,992
8,783
1,209
10,600
9,535
1,065
10,763
9,650
1,113
11,367
10,332
1,036
11,088
10,103
985
11,649
10,574
1,075
11,703
10,447
1,256
9,912
735
9,333
652
9,530
462
10,081
519
10,397
366
10,952
415
10,546
542
11,144
505
11,1%
507
5,762
15
126
224
66
66
4,864
6,929
10
184
223
161
74
6,007
10,744
41
138
116
151
185
9,855
9,523
7
332
103
351
65
8,455
9,812
15
308
95
335
54
8,790
11,514
16
181
169
336
105
10,428
10,534
49
278
123
359
84
9,311
9,867
10
224
138
345
215
8,578
8,888
7
230
168
379
173
7,619
14
15
16
17
18
19
20
21
22
Payable in dollars
Payable in foreign currencies
By area or country
Financial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
23
Canada
3,988
3,260
4,808
2,844
2,669
2,913
3,612
2,338
2,171
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
8,216
3,306
6
100
4,043
215
125
7,846
2,698
6
78
4,571
180
48
9,291
2,628
6
86
6,078
174
21
6,994
1,994
7
63
4,414
172
19
6,451
2,329
43
86
3,461
154
35
10,842
4,176
87
46
6,030
147
28
11,130
4,074
188
44
6,358
133
27
6,951
1,781
19
47
4,617
151
22
6,215
2,138
25
49
3,582
117
26
31
32
33
Asia
Japan
Middle East oil-exporting countries 2
961
353
13
731
475
4
1,317
999
7
883
605
10
1,2%
1,133
7
878
646
6
930
737
6
801
603
6
929
685
8
34
35
Africa
Oil-exporting countries 3
210
85
103
29
85
28
65
7
53
7
60
10
%
9
107
10
91
9
All other 4
117
21
28
33
24
58
26
169
51
3,801
165
440
374
335
271
1,063
3,533
175
426
346
284
284
898
3,725
133
431
444
164
217
999
4,180
178
650
562
133
185
1,073
4,170
193
552
637
150
173
1,059
4,694
158
684
773
172
262
1,095
4,286
171
542
613
145
183
1,172
4,835
174
665
590
207
317
1,181
4,793
198
750
626
156
242
1,193
36
37
38
39
40
41
42
43
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
1,021
1,023
934
936
1,166
937
977
970
1,0%
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,052
8
115
214
7
583
206
1,753
13
93
206
6
510
157
1,857
28
193
234
39
412
237
1,930
19
170
226
26
368
283
1,930
14
171
209
24
374
274
2,067
13
174
232
25
411
304
2,104
12
161
234
22
463
266
2,143
31
156
296
20
457
226
2,031
32
175
275
21
476
210
52
53
54
Asia
Japan
Middle East oil-exporting countries
3,073
1,191
668
2,982
1,016
638
2,755
881
563
2,915
1,158
450
2,853
1,107
408
2,994
1,168
446
3,026
%2
437
2,944
928
441
3,110
1,060
421
55
56
Africa
Oil-exporting countries 3
470
134
437
130
500
139
401
144
419
126
425
136
425
137
434
122
386
94
57
All other 4
229
257
222
238
225
250
270
324
286
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
Securities Holdings and Transactions
A67
3.24 FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
Transactions, and area or country
1988
Jan.May
1989
1988
1989
1987
Nov.
Jan.
Dec.
Feb.
Mar.
Apr.
May"
U.S. corporate securities
STOCKS
249,122
232,849
181,048
183,039
78,086
76,789
11,973
11,861
11,224
12,467
11,923
11,789
18,384
18,495'
15,811
15,442
14,079
14,235
17,890
16,828
3 Net purchases, or sales ( - )
16,272
-1,991
1,298
112
-1,243
134
-111'
370
-157
1,062
4 Foreign countries
16,321
-1,816
1,506
89
-1,198
167
-81'
507
-150
1,064
1,932
905
-70
892
-1,123
631
1,048
1,318
-1,360
12,896
11,365
123
365
-3,353
-281
218
-535
-2,242
-954
1,087
1,249
-2,473
1,365
1,922
188
121
-260
312
-53
-126
-1,868
1,549
-52
2,304
245
-928
-761
47
151
-901
-49
-20
-30
-268
-579
576
98
151
138
133
21
6
-771
-64
-53
-1
-273
-424
274
-21
-132
-567
-407
-1
19
-99
38
30
128
-345
74
320
599
-100
-603
-563
29
21
-126
159
59
-64
-1,181
800
-361
575'
265
-544
-487
4
106
71
70
59
4
91
-107
130
636
220
-536
-458
5
-19
182
168
14
-125
-141
288
-66
104
-345
-28
-16
10
-7
-289
-123
-215
-69
-293
494
-75
390
206
784
763
-1
50
-48
-176
-209
23
-45
-33
-30
-137
-6
-2
1 Foreign purchases
2 Foreign sales
5
6
7
8
9
10
11
12
13
14
15
16
17
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East'
Other Asia
Japan
Africa
Other countries
18 Nonmonetary international and
regional organizations
BONDS
2
105,856
86,362
44,328
7,650
8,423
6,137
9,610
10,423
9,736
8,421
20 Foreign sales
78,312
58,301
30,468
4,795
4,441
4,757'
4,736
7,025
5,157
8,793
21 Net purchases, or sales ( - )
27,544
28,062
13,860
2,856
3,982
1,380'
4,874
3,398
4,579
-372
22 Foreign countries
26,804
28,604r
13,710
2,825
3,978
1,360'
4,908
3,358
4,578
-494
23
24
25
26
27
28
29
30
31
32
33
34
35
21,989
194
33
269
1,587
19,770
1,296
2,857
-1,314
2,021
1,622
16
-61
17,338
143
1,344
1,514
513
13,088
711
1,930
-178'
8,900
7,686
-8
-89
8,518
251
172
139
241
7,514
696
1,539
22
2,822
1,549
24
88
1,240
13
-122
171
-13
1,141
5
58
143
1,353
1,210
-1
26
2,560
-130
75
17
273
2,468
178
240
159
840
746
0
2
499'
107
15
30
130
149'
180
229
-128
552
392
3
24
2,055
41
38
-21
131
1,751
129
651
160
1,893
1,567
2
18
2,794
-16
148
69
4
2,578
213
301
87
-50
-285
5
8
3,215
27
135
51
90
2,365
115
219
3
990
608
4
33
-45
93
-164
9
-114
670
59
139
-100
-563
-734
10
5
740
-542'
150
31
3
-34
41
1
122
19 Foreign purchases
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East'
Other Asia
Japan
Africa
Other countries
36 Nonmonetary international and
regional organizations
20
Foreign securities
1,081
-l,901r
-3,949
—237r
-1,102
-891
-629
-147
-956
-1,326
95,458
94,377
75,203r
77,104r
38,917
42,866
7,745r
7,982'
7,472
8,573
6,856
7,748
8,070
8,698
9,477
9,624
6,721
7,676
7,794
9,120
40 Bonds, net purchases, or sales ( - )
41
Foreign purchases
42
Foreign sales
-7,946
199,089
207,035
-9,869 r
217,648r
227,517r
-1,915
90,312
92,227
620'
21,258'
20,637'
-1,720
20,510
22,230
-247
14,835
15,083
-484
18,711
19,195
-653'
23,395
24,047'
-181
15,946
16,127
-350
17,425
17,775
43 Net purchases, or sales ( - ) , of stocks and bonds
-6,865
-11,770'
-5,863
383'
-2,822
-1,139
-1,112
-800'
-1,136
-1,676
44 Foreign countries
-6,757
-12,251'
-6,463
347r
-2,916
-1,115
-1,190
-992'
-1,330
-1,835
-12,101
-4,072
828
9,299
89
-800
-10,205'
-3,799
1,386
987'
-54
-567
-5,629
-1,861
407
686
-3
-61
-476
392
23
338r
18
52
-1,543
-658
-32
-189
-33
-461
-80
-378
68
-872
6
139
-797
-530
79
-34
-9
100
-1,399
-584
161
885'
-16
-40
-1,734
191
195
71
11
-65
-1,620
-561
-97
635
4
-196
-108
481r
599
36
94
-23
78
192
193
159
37 Stocks, net purchases, or sales ( - )
38
39
45
46
47
48
49
50
Foreign purchases
Foreign sales
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
51 Nonmonetary international and
regional organizations
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities, and securities of U.S.
government agencies and corporations. Also includes issues of new debt securi-
ties sold abroad by U.S. corporations organized to finance direct investments
abroad.
A68
International Statistics • September 1989
3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES
Foreign Transactions
Millions of dollars
1989
Country or area
1987
1988
1989
1988
Jan.May
Nov.
Dec.
Jan/
Feb/
Mar.
Apr.
May"
Transactions, net purchases or sales ( - ) during period 1
1 Estimated total2
25,587
48,884r
28,318
8,648'
2,828
8,783
8,640
29
8,039
30,889
48,187''
27,050
8,304'
2,384
2,040
9,907
8,297
291
6,516
3 Europe 2
4 Belgium-Luxembourg
5 Germany 2
Netherlands
6
7
Sweden
Switzerland2
8
United Kingdom
9
10 Other Western Europe
11 Eastern Europe
12 Canada
23,716
653
13,330
-913
210
1,917
3,975
4,563
-19
4,526
14,343''
923
-5,268'
-356
-323
-1,074
9,674
10,776
-10
3,761
10,716
114
-146
-636
3
2,776
4,941
3,674
-10
287
1,776''
133
-966'
135
355
-411
l,953r
577
-2
-368
33C
-90
-374'
-114
118
-18'
-232'
1,054
-15
788
2,141
9
938
268
-115
214
-348
1,175
0
54
3,775
127
-31
135
297
438
1,533
1,277
0
17
2,143
-23
-181
242
-508
1,768
1,207
-363
0
-55
-1,814
-87
-693
-643
398
440
-1,298
74
-5
114
4,472
88
-179
-638
-69
-83
3,847
1,511
-5
157
13
14
15
16
17
18
19
20
-2,192
150
-1,142
-1,200
4,488
868
-56
407
703
-109
1,120
-308
27,606'
21,752
-13
1,786
222
-108
-92
422
16,737
9,765
41
-954
582
0
506
77
6,869'
4,224
-8
-548
-104
0
140
-244
1,021'
-157
-7
358
-104
-37
-163
%
626
116
-1
-676
525
1
247
276
5,955
2,503
15
-379
113
-53
132
34
5,659
1,855
-2
439
-132
-18
-231
117
1,743
2,624
32
350
-179
0
-78
-101
2,756
2,668
-3
-687
21 Nonmonetary international and regional organizations
22 International
23 Latin America regional
'
-5,300
-4,387
3
70C
1,142
-31
1,270
1,216
31
345r
489
10
-2,000'
-2,019
10
788
777
0
-1,124
-1,072
-10
344
424
-8
-262
-252
-21
1,524
1,340
70
Memo
24 Foreign countries 2
25 Official institutions
26 Other foreign2
30,889
31,064
-181
48,187'
26,624'
21,560"
27,050
10,957
16,093
8,303'
2,1%
6,106'
2,384'
2,243'
141'
2,040
2,019
21
9,907
4,299
5,609
8,297
6,549
1,747
291
-842
1,133
6,516
-1,068
7,583
-3,142
16
1,963'
1
5,526
0
2,119'
0
1,09c
0
129
0
3,560
0
2,607
0
-471
0
-299
0
2 Foreign countries
27
28
2
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
All other
Oil-exporting countries
Middle East 1
Africa 4
1. Estimated official and private transactions in marketable U.S. Treasury
securities with an original maturity of more than 1 year. Data are based on
monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and
notes held by official institutions of foreign countries.
2. Includes U.S. Treasury notes publicly issued to private foreign residents
denominated in foreign currencies.
384'
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
Interest and Exchange Rates
A69
3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per year
Rate on July 31, 1989
Rate on July 31, 1989
Percent
June 1989
June 1989
Mar. 1981
July 1989
June 1989
Country
Month
effective
6.0
9.25
49.0
12.32
8.0
Austria..
Belgium .
Brazil . . .
Canada..
Denmark
Rate on July 31, 1989
Country
Country
Percent
France
Germany, Fed. Rep. of.
Italy
Japan
Netherlands
1. As of the end of February 1981, the rate is that at which the Bank of France
discounts Treasury bills for 7 to 10 days.
2. Minimum lending rate suspended as of Aug. 20, 1981.
NOTE. Rates shown are mainly those at which the central bank either discounts
8.75
5.0
13.5
3.25
6.0
Month
effective
June
June
Mar.
May
June
1989
1989
1989
1989
1989
Percent
8.0
4.5
June 1983
Apr. 1989
8.0
Norway
Switzerland
United Kingdom2
Venezuela
Month
effective
Oct. 1985
or makes advances against eligible commercial paper and/or government commercial banks or brokers. For countries with more than one rate applicable to
such discounts or advances, the rate shown is the one at which it is understood the
central bank transacts the largest proportion of its credit operations.
3.27 FOREIGN SHORT-TERM INTEREST RATES
Percent per year, averages of daily figures
1989
Country, or type
1986
1987
1988
Jan.
1
2
3
4
5
6
7
8
9
10
Feb.
Mar.
Apr.
May
June
July
Eurodollars
United Kingdom
Canada
Germany
Switzerland
6.70
10.87
9.18
4.58
4.19
7.07
9.65
8.38
3.97
3.67
7.86
10.28
9.63
4.28
2.94
9.28
13.06
11.34
5.63
5.31
9.61
12.97
11.69
6.36
5.69
10.18
13.00
12.22
6.57
5.75
10.01
13.09
12.58
6.42
6.05
9.66
13.08
12.44
6.96
7.26
9.28
14.17
12.35
6.93
7.09
8.86
13.91
12.24
7.00
6.92
Netherlands
France
Italy
Belgium
Japan
5.56
7.68
12.60
8.04
4.96
5.24
8.14
11.15
7.01
3.87
4.72
7.80
11.04
6.69
3.%
5.99
8.55
11.84
7.59
4.24
6.75
9.11
12.26
8.04
4.21
6.88
9.07
12.88
8.28
4.21
6.70
8.61
12.21
8.17
4.20
7.30
8.81
12.27
8.45
4.25
7.11
8.89
12.35
8.51
4.46
7.07
9.05
12.46
8.46
4.71
NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.
A70
International Statistics • September 1989
3.28 FOREIGN EXCHANGE RATES1
Currency units per dollar
1989
Country/currency
1986
1987
1988
Feb.
1
2
3
4
5
6
2
Australia/dollar
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
7
8
9
10
11
12
13
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Ireland/punt
14
15
16
17
18
19
20
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder
New Zealand/dollar2
Norway /krone
Portugal/escudo
21
22
23
24
25
26
27
28
29
30
Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound2
Mar.
Apr.
May
June
July
67.093
15.260
44.662
1.3896
3.4615
8.0954
70.136
12.649
37.357
1.3259
3.7314
6.8477
78.408
12.357
36.783
1.2306
3.7314
6.7411
85.64
13.022
38.792
1.1891
3.7314
7.2094
81.69
13.148
39.136
1.1954
3.7314
7.2912
80.35
13.161
39.148
1.1888
3.7314
7.2803
77.36
13.691
40.723
1.1925
3.7314
7.5820
75.61
13.912
41.414
1.1986
3.7314
7.7087
75.66
13.308
39.559
1.1891
3.7314
7.3527
5.0721
6.9256
2.1704
139.93
7.8037
12.597
134.14
4.4036
6.0121
1.7981
135.47
7.7985
12.943
148.79
4.1933
5.9594
1.7569
142.00
7.8071
13.899
152.49
4.3006
6.3004
1.8505
154.72
7.8009
15.240
144.10
4.2994
6.3321
1.8686
157.34
7.7969
15.467
142.84
4.1961
6.3223
1.8697
159.23
7.7828
15.718
142.67
4.3409
6.5815
1.9461
165.41
7.7799
16.102
137.39
4.4302
6.7135
1.9789
170.42
7.7934
16.420
134.92
4.2699
6.4105
1.8901
163.84
7.8040
16.416
141.26
1491.16
168.35
2.5830
2.4484
52.456
7.3984
149.80
1297.03
144.60
2.5185
2.0263
59.327
6.7408
141.20
1302.39
128.17
2.6189
1.9778
65.558
6.5242
144.26
1355.28
127.74
2.7307
2.0895
61.629
6.7254
152.10
1372.50
130.55
2.7535
2.1085
61.547
6.8059
154.05
1371.80
132.04
2.7211
2.1098
61.167
6.7964
154.54
1415.83
137.86
2.6967
2.1938
60.718
7.0337
160.71
1434.40
143.98
2.7086
2.2292
57.376
7.1852
164.92
1367.39
140.42
2.6809
2.1318
57.537
6.9480
158.31
2.1782
2.2918
884.61
140.04
27.933
7.1272
1.7979
37.837
26.314
146.77
2.1059
2.0385
825.93
123.54
29.471
6.3468
1.4918
31.756
25.774
163.98
2.0132
2.1900
734.51
116.52
31.847
6.1369
1.4642
28.636
25.312
178.13
1.9285
2.4570
680.28
115.67
33.115
6.3238
1.5740
27.716
25.386
175.34
1.9407
2.5393
675.68
116.40
33.416
6.3933
1.6110
27.591
25.542
171.34
1.9497
2.5480
672.10
116.146
34.021
6.3689
1.6469
26.998
25.524
170.08
1.9575
2.6710
669.25
121.39
34.145
6.5756
1.7290
25.788
25.757
163.07
1.9572
2.7828
669.43
126.55
33.475
6.6872
1.7089
26.023
25.909
155.30
1.9589
2.6909
669.83
118.73
34.764
6.4653
1.6281
25.816
25.771
162.68
96.94
92.72
95.77
96.99
97.24
100.81
103.09
MEMO
31 United States/dollar3
112.22
1. Averages of certified noon buying rates in New York for cable transfers.
Data in this table also appear in the Board's G.5 (405) release. For address, see
inside front cover.
2. Value in U.S. cents.
3. Index of weighted-average exchange value of U.S. dollar against the
99.12
currencies of 10 industrial countries. The weight for each of the 10 countries is the
1972-76 average world trade of that country divided by the average world trade of
all 10 countries combined. Series revised as of August 1978 (see FEDERAL
RESERVE B U L L E T I N , v o l . 6 4 , A u g u s t 1978, p . 7 0 0 ) .
71
Guide to Tabular Presentation, Statistical
Releases, and Special Tables
GUIDE TO TABULAR
Symbols and
c
e
p
r
*
PRESENTATION
Abbreviations
Corrected
Estimated
Preliminary
Revised (Notation appears on column heading when
about half of the figures in that column are changed.)
Amounts insignificant in terms of the last decimal place
shown in the table (for example, less than 500,000
when the smallest unit given is millions)
General
0
n.a.
n.e.c.
IPCs
REITs
RPs
SMSAs
Calculated to be zero
Not available
Not elsewhere classified
Individuals, partnerships, and corporations
Real estate investment trusts
Repurchase agreements
Standard metropolitan statistical areas
Cell not applicable
Information
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed
issues of U.S. government agencies (the flow of funds figures
also include not fully guaranteed issues) as well as direct
obligations of the Treasury. "State and local government"
also includes municipalities, special districts, and other political subdivisions.
In some of the tables, details do not add to totals because
of rounding.
STATISTICAL RELEASES—List Published Semiannually,
with Latest Bulletin
Reference
Issue
June 1989
SPECIAL TABLES—Published Irregularly, with Latest Bulletin
Page
A101
Issue
Anticipated schedule of release dates for periodic releases
Page
Reference
Title and Date
Assets and liabilities of commercial banks
March 31, 1988
June 30, 1988
September 30, 1988
December 31, 1988
Terms of lending at commercial banks
May 1988
August 1988
November 1988
February 1989
Assets and liabilities of U.S. branches and agencies of foreign banks
June 30, 1988
September 30, 1988
December 31, 1988
March 31, 1989
Pro forma balance sheet and income statements for priced service operations
June 30, 1987
September 30, 1987
March 31, 1988
March 31, 1989
Special tables begin
on next page.
June
June
August
August
1989
1989
1989
1989
All
A78
All
A78
September
January
April
June
1988
1989
1989
1989
A70
All
All
A84
January
May
June
August
1989
1989
1989
1989
A78
All
A90
A84
November
February
August
September
1987
1988
1988
1988
A74
A80
A70
All
A72
Special Tables • September 1989
4.31 Pro forma balance sheet for priced services of the Federal Reserve System1
Millions of dollars
Short-term assets2
Imputed reserve requirement on clearing balances
Investment in marketable securities
Receivables
Materials and supplies
Prepaid expenses
Items in process of collection
217.9
1.598.1
61.2
6.3
23.4
3.509.2
447.0
5,203.7
2,219.5
3,105.7
90.9
2,091.3
2,634.5
73.4
4,799.2
5,416.2
Total short-term liabilities
1.2
128.7
Total long-term liabilities
Total liabilities
Equity
Total liabilities and equity4
1. Details may not sum to totals because of rounding.
2. The imputed reserve requirement on clearing balances and investment in
marketable securities reflect the Federal Reserve's treatment of clearing balances
maintained on deposit with Reserve Banks by depository institutions. For
presentation of the balance sheet and the income statement, clearing balances are
reported in a manner comparable to the way correspondent banks report
compensating balances held with them by respondent institutions. That is,
respondent balances held with a correspondent are subject to a reserve requirement established by the Federal Reserve. This reserve requirement must be
satisfied with either vault cash or with nonearning balances maintained at a
Reserve Batik. Following this model, clearing balances maintained with Reserve
Banks for priced service purposes are subjected to imputed reserve requirements.
Therefore, a portion of the clearing balances held with the Federal Reserve is
classified on the asset side of the balance sheet as required reserves and is
reflected in a manner similar to vault cash and due from bank balances normally
shown on a correspondent bank's balance sheet. The remainder of clearing
balances is assumed to be available for investment. For these purposes, the
Federal Reserve assumes that all such balances are invested in three-month
Treasury bills.
The account "items in the process of collection" (CIPC) represents the gross
amount of Federal Reserve CIPC as of the balance sheet date, stated on a basis
comparable with a commercial bank. Adjustments have been made for intraSystem items that would otherwise be double-counted on a consolidated Federal
Reserve balance sheet; items associated with nonpriced items, such as items
404.5
5,863.2
Total assets
Long-term liabilities
Obligations under capita] leases
Long-term debt
4,799.2
258.7
119.4
3.0
23.4
275.8
123.9
6.2
41.1
Total long-term assets
Short-term liabilities
Clearing balances and balances arising from early credit
of uncollected items
Deferred available items
Short-term debt
222.0
1,628.0
58.4
6.0
9.0
2,875.8
5,416.2
Total short-term assets
Long-term assets3
Premises
Furniture and equipment
Leases and leasehold improvements
Prepaid pension costs
March 31, 1988
March 31, 1989
Item
1.2
120.8
129.9
122.0
5,546.1
4,921.2
317.1
282.5
5,863.2
5,203.7
collected for government agencies; and items associated with providing fixed
availability or credit prior to receipt and processing of items. The cost base for
providing services that must be recovered under the Monetary Control Act
includes the cost of float (the difference between the value of gross CIPC and the
value of deferred availability items) incurred by the Federal Reserve during the
period, valued at the federal funds rate. The amount of float, or net CIPC,
represents the portion of gross CIPC that involves a financing cost.
3. Long-term assets on the balance sheet have been allocated to priced services
with the direct determination method, which uses the Federal Reserve's Planning
and Control System to ascertain directly the value of assets used solely in priced
services operations and to apportion the value of jointly used assets between
priced services and nonpriced services. Also, long-term assets include an estimate
of the assets of the Board of Governors directly involved in the development of
priced services.
Long-term assets include amounts for capital leases and leasehold improvements and for prepaid pension costs associated with priced services. Effective
January 1, 1987, the Federal Reserve Banks implemented Financial Accounting
Standards Board Statement No. 87, Employer's Accounting for Pensions.
4. A matched-book capital structure has been used for those assets that are not
"self-financing" in determining liability and equity amounts. Short-term assets
are financed with short-term debt. Long-term assets are financed with long-term
debt and equity in a proportion equal to the ratio of long-term debt to equity for
the bank holding companies used in the model for the private sector adjustment
factor (PSAF).
73
4.32 Pro forma income statement for priced services of the Federal Reserve System1
Millions of dollars
Quarter ending March 31
Item
1989
Income services provided to depository institutions
2
177.1
14.3
4.2
1.8
.4
Income from operations after imputed costs
Other income and expenses 5
Investment income
Earnings credits
130.5
38.9
Income from operations
163.2
138.2
Production expenses 3
Imputed costs 4
Interest on float
Interest on debt
Sales taxes
FDIC insurance
1988
32.7
20.8
11.2
4.1
2.1
.4
18.1
41.1
34.4
Income before income taxes
Imputed income taxes 6
Net income
6.7
24.8
17.8
14.9
29.1
27.3
1.9
16.8
8.4
5.4
16.4
11.4
8.2
8.2
MEMO
Targeted return on equity 6
1. The income statement reflects income and expenses for priced services.
Included in these amounts are the imputed costs of float, imputed financing costs,
and the income related to clearing balances.
Details may not add to totals because of rounding.
2. Income represents charges to depository institutions for priced services.
This income is realized through one of two methods: direct charges to an
institution's account or charges against accumulated earnings credits. Income
includes charges for per-item fees, fixed fees, package fees, explicitly priced float,
account maintenance fees, shipping and insurance fees, and surcharges.
3. Production expenses include direct, indirect, and other general administrative expenses of the Federal Reserve Banks for providing priced services. Also
included are the expenses of staff members of the Board of Governors working
directly on the development of priced services, which amounted to $0.4 million in
the first quarter for both 1989 and 1988.
4. Imputed float costs represent the value of float to be recovered, either
explicitly or through per-item fees, during the period. Float costs include those for
checks, book-entry securities, noncash collection, ACH, and wire transfers.
The following table depicts the daily average recovery of float by the Federal
Reserve Banks for the first quarter of 1989. In the table, unrecovered float
includes that generated by services to government agencies or by other central
bank services.
Float recovered through income on clearing balances represents increased
investable clearing balances as a result of reducing imputed reserve requirements
through the use of a deduction for float for cash items in process of collection
when calculating the reserve requirement. This income then reduces the float
required to be recovered through other means.
As-of adjustments and direct charges refer to midweek closing float and
interterritory check float, which may be recovered from depositing institutions
through adjustments to the institution's reserve or clearing balance or by valuing
the float at the federal funds rate and billing the institution directly.
Float recovered through per-item fees is valued at the federal funds rate and has
been added to the cost base subject to recovery in the first quarter of 1989
Total
float
1,122.6
Unrecovered
float
91.2
Float subject to recovery
1,031.4
Sources of float recovery
Income on clearing balances
122.4
As of adjustments
427.7
Direct charges
159.8
Per-item fees
321.5
Also included in imputed costs is the interest on debt assumed necessary to
finance priced-service assets and the sales taxes and FDIC insurance assessment
that the Federal Reserve would have paid had it been a private-sector firm.
5. Other income and expenses consist of income on clearing balances and the
cost of earnings credits granted to depository institutions on their clearing
balances. Income on clearing balances represents the average coupon-equivalent
yield on three-month Treasury bills applied to the total clearing balance maintained, adjusted for the effect of reserve requirements on clearing balances.
Expenses for earnings credits are derived by applying the average federal funds
rate to the required portion of the clearing balances, adjusted for the net effect of
reserve requirements on clearing balances.
6. Imputed income taxes are calculated at the effective tax rate derived from a
model consisting of the 25 largest bank holding companies. The targeted return on
equity represents the after-tax rate of return on equity that the Federal Reserve
would have earned had it been a private business firm, based on the bank holding
company model.
74
Federal Reserve Board of Governors
ALAN GREENSPAN, Chairman
MANUEL H . JOHNSON, Vice Chairman
MARTHA R . SEGER
WAYNE D . ANGELL
OFFICE OF BOARD
DIVISION
MEMBERS
JOSEPH R. COYNE, Assistant to the Board
DONALD J. WINN, Assistant
to the Board
BOB STAHLY MOORE, Special Assistant to the
Board
OF INTERNATIONAL
E D W I N M . T R U M A N , Staff Director
LARRY J. PROMISEL, Senior Associate
CHARLES J. S I E G M A N , Senior Associate
D A V I D H . H O W A R D , Deputy Associate
ROBERT F. GEMMILL, Staff
LEGAL
Director
Director
Director
Adviser
D O N A L D B . A D A M S , Assistant
PETER HOOPER I I I , Assistant
DIVISION
J. VIRGIL MATTINGLY, JR., General
Counsel
RICHARD M. ASHTON, Associate General Counsel
OLIVER IRELAND, Associate General
Counsel
RICKI R. TIGERT, Associate General Counsel
SCOTT G. ALVAREZ, Assistant General
Counsel
MARYELLEN A. BROWN, Assistant to the General
OFFICE OF THE
FINANCE
KAREN H .
RALPH W .
DIVISION
Counsel
SECRETARY
Secretary
JENNIFER J. JOHNSON, Associate
BARBARA R. LOWREY, Associate
OF RESEARCH
AND
Secretary
Secretary
DIVISION OF CONSUMER
AND COMMUNITY
AFFAIRS
STATISTICS
MICHAEL J. PRELL, Director
E D W A R D C . E T T I N , Deputy Director
THOMAS D . SIMPSON, Associate
Director
LAWRENCE SLIFMAN, Associate
WILLIAM W . WILES,
GRIFFITH L . GARWOOD,
Director
Director
JOHNSON, Assistant Director
S M I T H , J R . , Assistant Director
Director
M A R T H A B E T H E A , Deputy Associate
Director
PETER A . T I N S L E Y , Deputy Associate Director
M Y R O N L . K W A S T , Assistant Director
S U S A N J. LEPPER, Assistant Director
PATRICK M . PARKINSON, Assistant Director
MARTHA S . S C A N L O N , Assistant Director
D A V I D J. STOCKTON, Assistant Director
JOYCE K . ZICKLER, Assistant Director
L E V O N H . G A R A B E D I A N , Assistant Director
(Administration)
Director
G L E N N E . L O N E Y , Assistant Director
E L L E N M A L A N D , Assistant Director
DOLORES S . S M I T H , Assistant Director
DIVISION OF BANKING
SUPERVISION AND
REGULATION
Staff Director
Director
Associate Director
WILLIAM A . RYBACK, Deputy Associate Director
S T E P H E N C . SCHEMERING, Deputy Associate Director
RICHARD SPILLENKOTHEN, Deputy Associate Director
HERBERT A . B I E R N , Assistant Director
JOE M. CLEAVER, Assistant Director
ROGER T . COLE, Assistant Director
JAMES I. G A R N E R , Assistant Director
JAMES D . GOETZINGER, Assistant Director
MICHAEL G . M A R T I N S O N , Assistant Director
ROBERT S . PLOTKIN, Assistant Director
S I D N E Y M . S U S S A N , Assistant Director
L A U R A M . H O M E R , Securities Credit Officer
DIVISION
OF MONETARY
AFFAIRS
D O N A L D L . K O H N , Director
D A V I D E . L I N D S E Y , Deputy Director
B R I A N F . M A D I G A N , Assistant Director
RICHARD D . PORTER, Assistant Director
NORMAND R.V. BERNARD, Special
Assistant
to the
W I L L I A M TAYLOR,
D O N E . K L I N E , Associate
FREDERICK M . STRUBLE,
OFFICE OF THE INSPECTOR
BRENT L. BOWEN, Inspector
BARRY R. SNYDER, Assistant
GENERAL
General
Inspector
General
Board
75
and Official Staff
EDWARD W . KELLEY, JR.
JOHN P. LA WARE
OFFICE OF
STAFF DIRECTOR
FOR
OFFICE OF STAFF DIRECTOR FOR
FEDERAL RESERVE BANK
ACTIVITIES
MANAGEMENT
S . D A V I D FROST, Staff Director
E D W A R D T . M U L R E N I N , Assistant Staff Director
PORTIA W . THOMPSON, Equal Employment Opportunity
THEODORE E. ALLISON, Staff
DIVISION OF FEDERAL
BANK
OPERATIONS
Programs Officer
DIVISION OF HUMAN
MANAGEMENT
C L Y D E H . FARNSWORTH, J R . , Director
D A V I D L . ROBINSON, Associate
Director
C . WILLIAM SCHLEICHER, J R . , Associate
Director
B R U C E J. SUMMERS, Associate
Director
CHARLES W . B E N N E T T , Assistant Director
JACK D E N N I S , J R . , Assistant Director
E A R L G . H A M I L T O N , Assistant Director
JOHN H. PARRISH, Assistant
(Programs and
Budgets)
DIVISION
Assistant Controller (Finance)
OF SUPPORT
SERVICES
Director
Assistant Director
W I L L I A M S , Assistant Director
ROBERT E . FRAZIER,
GEORGE M . L O P E Z ,
DAVID L .
OFFICE OF THE EXECUTIVE
INFORMATION RESOURCES
DIRECTOR FOR
MANAGEMENT
A L L E N E . B E U T E L , Executive Director
STEPHEN R . M A L P H R U S , Deputy Executive
DIVISION
SYSTEMS
OF HARDWARE
AND
Director
SOFTWARE
BRUCE M . B E A R D S L E Y , Director
THOMAS C . J U D D , Assistant Director
ELIZABETH B . RIGGS, Assistant Director
ROBERT J. Z E M E L , Assistant Director
DIVISION OF APPLICATIONS
STATISTICAL
SERVICES
WILLIAM R . JONES, Director
D A Y W . R A D E B A U G H , Assistant
RICHARD C . S T E V E N S , Assistant
PATRICIA A . W E L C H , Assistant
Director
LOUISE L . R O S E M A N , Assistant
FLORENCE M . Y O U N G , Assistant
CONTROLLER
GEORGE E . L I V I N G S T O N , Controller
STEPHEN J. CLARK, Assistant Controller
DARRELL R . P A U L E Y ,
RESERVE
RESOURCES
D A V I D L . S H A N N O N , Director
JOHN R . W E I S , Associate Director
A N T H O N Y V . D I G I O I A , Assistant Director
JOSEPH H . H A Y E S , J R . , Assistant Director
F R E D HOROWITZ, Assistant Director
OFFICE OF THE
Director
DEVELOPMENT
Director
Director
Director
AND
Director
Director
76
Federal Reserve Bulletin • September 1989
Federal Open Market Committee
FEDERAL
OPEN MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN,
Chairman
W A Y N E D . ANGELL
ROGER GUFFEY
M A N U E L H . JOHNSON
E . GERALD CORRIGAN,
SILAS K E E H N
E D W A R D W . KELLEY, JR.
JOHN P . L A W A R E
ALTERNATE
E D W A R D G . BOEHNE
ROBERT H . BOYKIN
Vice Chairman
THOMAS C . MELZER
MARTHA R . SEGER
RICHARD F . SYRON
MEMBERS
W . L E E HOSKINS
JAMES H . OLTMAN
GARY H . STERN
STAFF
DONALD L. KOHN, Secretary and
Economist
NORMAND R . V . BERNARD, Assistant
Secretary
GARY P . GILLUM,
Deputy Assistant Secretary
J. VIRGIL MATTINGLY, JR., General
ERNEST T . PATRIKIS,
MICHAEL J. PRELL,
EDWIN M . TRUMAN,
Counsel
Deputy General Counsel
Economist
Economist
ANATOL B. BALBACH, Associate
RICHARD G. DAVIS, Associate
Economist
Economist
THOMAS E. DAVIS, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
ALICIA H. MUNNELL, Associate
Economist
LARRY J. PROMISEL, Associate
Economist
Economist
KARL A . SCHELD, Associate
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D . SIMPSON, Associate
Economist
LAWRENCE SLIFMAN, Associate
Economist
PETER D . STERNLIGHT, Manager for Domestic Operations, System Open Market Account
SAM Y . CROSS, Manager for Foreign Operations, System Open Market Account
FEDERAL
ADVISORY
COUNCIL
DONALD N . BRANDIN,
SAMUEL A . MCCULLOUGH,
J. TERRENCE MURRAY, First District
WILLARD C . BUTCHER, Second District
SAMUEL A . MCCULLOUGH, Third District
THOMAS H . O ' B R I E N , Fourth District
FREDERICK D E A N E , JR., Fifth District
KENNETH L . ROBERTS, Sixth District
President
Vice President
B . KENNETH WEST, Seventh District
D O N A L D N. B R A N D I N , Eighth District
LLOYD P . JOHNSON, Ninth District
JORDAN L . HAINES, Tenth District
JAMES E. BURT I I I , Eleventh District
PAUL H A Z E N , Twelfth District
HERBERT V . PROCHNOW,
Secretary
WILLIAM J. KORSVIK, Associate
Secretary
All
and Advisory Councils
CONSUMER
ADVISORY
COUNCIL
JUDITH N. BROWN, Edina,
WILLIAM E. ODOM, Dearborn,
NAOMI G. ALBANESE, Greensboro, North
GEORGE H . BRAASCH, Chicago, Illinois
BETTY TOM C H U , Arcadia, California
Carolina
Minnesota, Chairman
Michigan, Vice Chairman
ROBERT A . HESS, W a s h i n g t o n , D . C .
RAMON E. JOHNSON, Salt Lake City,
BARBARA K A U F M A N , San Francisco,
Utah
California
CLIFF E. COOK, Tacoma, Washington
A. J. (JACK) KING, Kalispell, Montana
JERRY D . CRAFT, Atlanta, Georgia
D O N A L D C. D A Y , Boston, Massachusetts
R . B . ( J O E ) D E A N , JR., Columbia, South Carolina
RICHARD B . DOBY, Denver, Colorado
WILLIAM C . DUNKELBERG, Philadelphia, Pennsylvania
RICHARD H . F I N K , Washington, D.C.
JAMES FLETCHER, Chicago, Illinois
STEPHEN GARDNER, Dallas, Texas
ELENA G . HANGGI, Little Rock, Arkansas
JAMES H E A D , Berkeley, California
MICHELLE S . MEIER, W a s h i n g t o n , D . C .
RICHARD L. D . MORSE, Manhattan, Kansas
L I N D A K. PAGE, Columbus, Ohio
THRIFT INSTITUTIONS
ADVISORY
Glendale, California
ROBERT S. DUNCAN, Hattiesburg, Mississippi
A. JAHNS, Chicago, Illinois
H. C. KLEIN, Jacksonville, Arkansas
PHILIP E. L A M B , Springfield, Massachusetts
ADAM
LAWRENCE WINTHROP, Portland, Oregon
COUNCIL
GERALD M. CZARNECKI,
DONALD B . SHACKELFORD,
CHARLOTTE CHAMBERLAIN,
SANDRA PHILLIPS, Pittsburgh, Pennsylvania
VINCENT P. QUAYLE, Baltimore, Maryland
CLIFFORD N. ROSENTHAL, New York, New York
A L A N M. SILBERSTEIN, New York, New York
RALPH E. SPURGIN, Columbus, Ohio
D A V I D P. W A R D , Peapack, New Jersey
Honolulu, Hawaii, President
Columbus, Ohio, Vice President
JOE C. MORRIS, Overland Park, Kansas
JOSEPH W. MOSMILLER, Baltimore, Maryland
Louis H. PEPPER, Seattle, Washington
MARION O. SANDLER, Oakland, California
CHARLES B. STUZIN, Miami, Florida
78
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79
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155.
T H E F U N D I N G OF PRIVATE PENSION P L A N S ,
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1 5 6 . INTERNATIONAL T R E N D S FOR U . S . B A N K S A N D B A N K -
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Foreign Experience with Targets for Money Growth. 10/83.
Intervention in Foreign Exchange Markets: A Summary of
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A Financial Perspective on Agriculture. 1/84.
Survey of Consumer Finances, 1983. 9/84.
Bank Lending to Developing Countries. 10/84.
Survey of Consumer Finances, 1983: A Second Report.
12/84.
Union Settlements and Aggregate Wage Behavior in the
1980s. 12/84.
The Thrift Industry in Transition. 3/85.
A Revision of the Index of Industrial Production. 7/85.
Financial Innovation and Deregulation in Foreign Industrial
Countries. 10/85.
Recent Developments in the Bankers Acceptance Market.
1/86.
The Use of Cash and Transaction Accounts by American
Families. 2/86.
Financial Characteristics of High-Income Families. 3/86.
Prices, Profit Margins, and Exchange Rates. 6/86.
Agricultural Banks under Stress. 7/86.
Foreign Lending by Banks: A Guide to International and
U.S. Statistics. 10/86.
Recent Developments in Corporate Finance. 11/86.
Measuring the Foreign-Exchange Value of the Dollar. 6/87.
Changes in Consumer Installment Debt: Evidence from the
1983 and 1986 Surveys of Consumer Finances. 10/87.
Home Equity Lines of Credit. 6/88.
U.S. International Transactions in 1988. 5/89.
80
Index to Statistical Tables
References are to pages A3-A73 although the prefix 'A"
is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 19, 20
Assets and liabilities (See also Foreigners)
Banks, by classes, 18-20
Domestic finance companies, 36
Federal Reserve Banks, 10
Financial institutions, 26
Foreign banks, U.S. branches and agencies, 21
Automobiles
Consumer installment credit, 39, 40
Production, 49, 50
Depository institutions
Reserve requirements, 8
Reserves and related items, 3, 4, 5, 12
Deposits (See also specific types)
Banks, by classes, 3, 18-20, 21
Federal Reserve Banks, 4, 10
Turnover, 15
Discount rates at Reserve Banks and at foreign central
banks and foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
BANKERS acceptances, 9, 23, 24
Bankers balances, 18-20. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 34
Rates, 24
Branch banks, 21, 57
Business activity, nonfinancial, 46
Business expenditures on new plant and equipment, 35
Business loans (See Commercial and industrial loans)
EMPLOYMENT, 47
Eurodollars, 24
CAPACITY utilization, 48
Capital accounts
Banks, by classes, 18
Federal Reserve Banks, 10
Central banks, discount rates, 69
Certificates of deposit, 24
Commercial and industrial loans
Commercial banks, 16, 19
Weekly reporting banks, 19-21
Commercial banks
Assets and liabilities, 18-20
Commercial and industrial loans, 16, 18, 19, 20, 21
Consumer loans held, by type, and terms, 39, 40
Loans sold outright, 19
Nondeposit funds, 17
Real estate mortgages held, by holder and property, 38
Time and savings deposits, 3
Commercial paper, 23, 24, 36
Condition statements (See Assets and liabilities)
Construction, 46, 51
Consumer installment credit, 39, 40
Consumer prices, 46, 48
Consumption expenditures, 53, 54
Corporations
Nonfinancial, assets and liabilities, 35
Profits and their distribution, 35
Security issues, 34, 67
Cost of living (See Consumer prices)
Credit unions, 26, 39. (See also Thrift institutions)
Currency and coin, 18
Currency in circulation, 4, 13
Customer credit, stock market, 25
DEBITS to deposit accounts, 15
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 18-21
Ownership by individuals, partnerships, and
corporations, 22
Turnover, 15
FARM mortgage loans, 38
Federal agency obligations, 4, 9, 10, 11, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and ownership of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 6, 17, 19, 20, 21, 24, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 37, 38
Federal Housing Administration, 33, 37, 38
Federal Land Banks, 38
Federal National Mortgage Association, 33, 37, 38
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 4, 10, 11, 30
Federal Reserve credit, 4, 5, 10, 11
Federal Reserve notes, 10
Federal Reserve System
Balance sheet for priced services, 72
Condition statement for priced services, 73
Federal Savings and Loan Insurance Corporation insured
institutions, 26
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 36
Business credit, 36
Loans, 39, 40
Paper, 23, 24
Financial institutions
Loans to, 19, 20, 21
Selected assets and liabilities, 26
Float, 4, 73
Flow of funds, 41, 43, 44, 45
Foreign banks, assets and liabilities of U.S. branches and
agencies, 21
Foreign currency operations, 10
Foreign deposits in U.S. banks, 4, 10, 19, 20
Foreign exchange rates, 70
Foreign trade, 56
Foreigners
Claims on, 57, 59, 62, 63, 64, 66
Liabilities to, 20, 56, 57, 59, 60, 65, 67, 68
81
GOLD
Certificate account, 10
Stock, 4, 56
Government National Mortgage Association, 33, 37, 38
Gross national product, 53
HOUSING, new and existing units, 51
INCOME and expenses, Federal Reserve System, 76-77
Income, personal and national, 46, 53, 54
Industrial production, 46, 49
Installment loans, 39, 40
Insurance companies, 26, 30, 38
Interest rates
Bonds, 24
Consumer installment credit, 40
Federal Reserve Banks, 7
Foreign central banks and foreign countries, 69
Money and capital markets, 24
Mortgages, 37
Prime rate, 23
International capital transactions of United States, 55-69
International organizations, 59, 60, 62, 65, 66
Inventories, 53
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 18, 19, 20, 21, 26
Commercial banks, 3, 16, 18-20, 38
Federal Reserve Banks, 10, 11
Federal Reserve System, 76-77
Financial institutions, 26, 38
LABOR force, 47
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 18—20
Commercial banks, 3, 16, 18-20
Federal Reserve Banks, 4, 5, 7, 10, 11
Federal Reserve System, 76-77
Financial institutions, 26, 38
Insured or guaranteed by United States, 37, 38
MANUFACTURING
Capacity utilization, 48
Production, 48, 50
Margin requirements, 25
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Mining production, 50
Mobile homes shipped, 51
Monetary and credit aggregates, 3, 12
Money and capital market rates, 24
Money stock measures and components, 3, 13
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 53
OPEN market transactions, 9
PERSONAL income, 54
Prices
Consumer and producer, 46, 52
Stock market, 25
Prime rate, 23
Producer prices, 46, 52
Production, 46, 49
Profits, corporate, 35
REAL estate loans
Banks, by classes, 16, 19, 20, 38
Financial institutions, 26
Terms, yields, and activity, 37
Type of holder and property mortgaged, 38
Repurchase agreements, 6, 17, 19, 20, 21
Reserve requirements, 8
Reserves
Commercial banks, 18
Depository institutions, 3, 4, 5, 12
Federal Reserve Banks, 10
U.S. reserve assets, 56
Residential mortgage loans, 37
Retail credit and retail sales, 39, 40, 46
SAVING
Flow of funds, 41,43, 44,45
National income accounts, 53
Savings and loan associations, 26, 38, 39, 41. (See also
Thrift institutions)
Savings banks, 26, 38, 39
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 67
New issues, 34
Prices, 25
Special drawing rights, 4, 10, 55, 56
State and local governments
Deposits, 19, 20
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 19, 20, 26
Rates on securities, 24
Stock market, selected statistics, 25
Stocks (See also Securities)
New issues, 34
Prices, 25
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 3. (See also Credit unions and Savings
and loan associations)
Time and savings deposits, 3, 13, 17, 18, 19, 20, 21
Trade, foreign, 56
Treasury cash, Treasury currency, 4
Treasury deposits, 4, 10, 28
Treasury operating balance, 28
UNEMPLOYMENT, 47
U.S. government balances
Commercial bank holdings, 18, 19, 20
Treasury deposits at Reserve Banks, 4, 10, 28
U.S. government securities
Bank holdings, 18-20, 21, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 4, 10, 11, 30
Foreign and international holdings and transactions, 10,
30, 68
Open market transactions, 9
Outstanding, by type and holder, 26, 30
Rates, 24
U.S. international transactions, 55-69
Utilities, production, 50
VETERANS Administration, 37, 38
WEEKLY reporting banks, 19-21
Wholesale (producer) prices, 46, 52
YIELDS (See Interest rates)
82
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
George N. Hatsopoulos
Richard N. Cooper
Richard F. Syron
Robert W. Eisenmenger
NEW YORK*
10045
Cyrus R. Vance
Ellen V. Futter
Mary Ann Lambertsen
E. Gerald Corrigan
James H. Oltman
Buffalo
14240
Vice President
in charge of branch
John T. Keane
PHILADELPHIA
19105
Peter A. Benoliel
Gunnar E. Sarsten
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
W. Lee Hoskins
William H. Hendricks
Cincinnati
Pittsburgh
45201
15230
Charles W. Parry
John R. Miller
Owen B. Butler
James E. Haas
RICHMOND*
23219
Hanne Merriman
Leroy T. Canoles, Jr.
Thomas R. Shelton
William E. Masters
Robert P. Black
Jimmie R. Monhollon
Bradley Currey, Jr.
Larry L. Prince
Nelda P. Stephenson
Hugh Brown
Jose L. Saumat
Patsy R. Williams
James A. Hefner
Robert P. Forrestal
Jack Guynn
Robert J. Day
Marcus Alexis
Richard T. Lindgren
Silas Keehn
Daniel M. Doyle
Robert L. Virgil, Jr.
H. Edwin Trusheim
L. Dickson Flake
Thomas A. Alvey
Seymour B. Johnson
Thomas C. Melzer
James R. Bowen
Michael W. Wright
John A. Rollwagen
Warren H. Ross
Gary H. Stern
Thomas E. Gainor
Fred W. Lyons, Jr.
Burton A. Dole, Jr.
James C. Wilson
Patience S. Latting
Kenneth L. Morrison
Roger Guffey
Henry R. Czerwinski
Bobby R. Inman
Hugh G. Robinson
Diana S. Natalicio
Andrew L. Jefferson, Jr.
Lawrence E. Jenkins
Robert H. Boykin
William H.Wallace
Robert F. Erburu
Carolyn S. Chambers
Yvonne B. Burke
Paul E. Bragdon
Don M. Wheeler
Carol A. Nygren
Robert T. Parry
Carl E. Powell
Baltimore
21203
Charlotte
28230
Culpeper Communications
and Records Center 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75222
79999
77252
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Charles A. Cerino1
Harold J. Swart1
Robert D. McTeer, Jr.1
Albert D. Tinkelenberg1
John G. Stoides1
Donald E. Nelson
Fred R. Herr1
James D. Hawkins1
James Curry III
Melvin K. Purcell
Robert J. Musso
Roby L. Sloan1
John F. Breen1
Howard Wells
Ray Laurence
Robert F. McNellis
Kent M. Scott
David J. France
Harold L. Shewmaker
Tony J. Salvaggio1
Sammie C. Clay
Robert Smith, III1
Thomas H. Robertson
John F. Hoover1
Thomas C. Warren2
Angelo S. Carella1
E. Ronald Liggett1
Gerald R. Kelly1
*Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016;
Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West
Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.
1. Senior Vice President.
2. Executive Vice President.
83
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
A*41 1M4
•
/
•
/
ALASKA
®
\
/
1
/
/
J
/
#
y y p
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
%Ll
•AN
Publications of Interest
NEW HANDBOOK AVAILABLE
REGULATORY
SERVICE
FROM THE
The Federal Reserve Board has announced publication of The Payment System Handbook. The new
handbook, which is part of the Federal Reserve Regulatory Service, deals with expedited funds availability, check collection, wire transfers, and risk-reduction policy. It includes Regulation CC (Availability of
Funds and Collection of Checks), Regulation J (Collection of Checks and Other Items and Wire Transfers
of Funds by Federal Reserve Banks), the Expedited
Funds Availability Act and related statutes, official
Board commentary on Regulation CC, and policy
statements on risk reduction in the payment system. In
addition, it contains detailed subject and citation indexes. It is published in loose-leaf binder form and is
updated monthly.
To promote public understanding of its regulatory
functions, the Board publishes the Federal
Reserve
Regulatory Service, a three-volume loose-leaf service
containing all Board regulations and related statutes,
interpretations, policy statements, rulings, and staff
opinions. For those with a more specialized interest in
the Board's regulations, parts of this service are published separately as handbooks pertaining to monetary
policy, securities credit, consumer affairs, and, available for the first time in September 1988, The Payment
System
Handbook.
For domestic subscribers, the annual rate for The
Payment System Handbook is $75. For subscribers
outside the United States, the price, including additional air mail costs, is $90. For the Federal Reserve
Regulatory Service, not including handbooks, the annual rate is $200 for domestic subscribers and $250 for
subscribers outside the United States. All subscription
requests must be accompanied by a check payable to
"Board of Governors of the Federal Reserve
System." Orders should be addressed to Publications
Services, Mail Stop 138, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
Publications of Interest
FEDERAL RESERVE
PUBLICATIONS
CONSUMER
CREDIT
The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects as
how the Equal Credit Opportunity Act protects women against discrimination in their credit dealings, how
to use a credit card, and how to resolve a billing error.
The Board also publishes the Consumer
Handbook
to Credit Protection Laws, a complete guide to consumer credit protections. This 44-page booklet explains how to use the credit laws to shop for credit,
apply for it, keep up credit ratings, and complain about
an unfair credit.
Three booklets on the mortgage process are also
available: A Consumer's Guide to Mortgage Refinancing, A Consumer's Guide to Mortgage Lock-Ins, and
A Consumer's Guide to Mortgage Closings. These
booklets were prepared in conjunction with the Federal Home Loan Bank Board and in consultation with
other federal agencies and trade and consumer
groups.
Copies of consumer publications are available free
of charge from Publications Services, Mail Stop 138,
Board of Governors of the Federal Reserve System,
Washington, D.C. 20551. Multiple copies for classroom use are also available free of charge.
@FedFRASER