Full text of Federal Reserve Bulletin : September 1993
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VOLUME 79 • NUMBER 9 • SEPTEMBER 1993 FEDERAL RESERVE 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 • Richard Spillenkothen • 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 S. Ellen Dykes, the Graphics Center under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles. Table of Contents 827 MONETARY POLICY TO THE CONGRESS Erratum regarding data in table 1.27 in the August issue of the Bulletin. REPORT The Federal Reserve expects economic activity to strengthen in the second half of 1993 and continue to expand moderately in 1994. Increases in employment are projected to be large enough to keep the unemployment rate moving down, and inflation is not expected to change materially over this period. 846 INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION FOR JUNE 1993 Industrial production, which was unchanged in May, declined 0.2 percent. Utilization of total industrial capacity eased again, to 81.2 percent. 849 STATEMENT TO THE CONGRESS Alan Greenspan, Chairman, Board of Governors, discusses the Federal Reserve's semiannual Monetary Policy Report to the Congress and says that a monetary policy that aims at price stability permits low long-term interest rates and helps provide a stable setting to foster the investment and innovation by the private sector that are key to long-run economic growth, before the Subcommittee on Economic Growth and Credit Formation of the House Committee on Banking, Finance and Urban Affairs, July 20, 1993. (Chairman Greenspan presented identical testimony before the Senate Committee on Banking, Housing, and Urban Affairs, July 22, 1993.) Availability of revised Lists of OTC Margin Stocks and of Foreign Margin Stocks. 859 MINUTES OF THE FEDERAL OPEN MARKET COMMITTEE MEETING At its meeting on May 18,1993, the Committee adopted a directive that called for maintaining the existing degree of pressure on reserve positions and that included a bias toward possible firming of reserve conditions during the intermeeting period. The directive indicated that in the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, slightly greater reserve restraint would be acceptable or slightly lesser reserve restraint might be acceptable during the intermeeting period. The reserve conditions contemplated at this meeting were expected to be consistent with appreciable growth in the broader monetary aggregates over the second quarter. 867 LEGAL DEVELOPMENTS Various bank holding company, bank service corporation, and bank merger orders; and pending cases. A1 FINANCIAL AND BUSINESS STATISTICS These tables reflect data available as of July 27, 1993. 856 ANNOUNCEMENTS Appointment of the new president of the Federal Reserve Bank of New York. Actions to ease financial stress in areas of the Midwest affected by flooding. A3 GUIDE TO TABULAR PRESENTATION A4 Domestic Financial Statistics A44 Domestic Nonfinancial Statistics A53 International Statistics A69 GUIDE TO STATISTICAL RELEASES SPECIAL TABLES A70 INDEX TO STATISTICAL AND TABLES A76 FEDERAL RESERVE PUBLICATIONS BOARD A78 MAPS OF THE FEDERAL SYSTEM RESERVE A72 BOARD OF GOVERNORS AND STAFF A74 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS A80 FEDERAL RESERVE BANKS, AND OFFICES BRANCHES, Monetary Policy Report to the Congress Report submitted to the Congress on July 20, 1993, pursuant to the Full Employment and Balanced Growth Act of 1978l MONETARY POUCY AND THE ECONOMIC OUTLOOK FOR 1993 AND 1994 In February, when the Federal Reserve prepared its monetary policy plans for 1993, the broad trends in the economy appeared favorable. After a hesitant beginning, the economic expansion had picked up steam in the latter part of 1992, while inflation seemed still to be headed downward. Most members of the Federal Open Market Committee and nonvoting presidents anticipated that 1993 would be a good year for growth and would also see further progress toward price stability. As the year has unfolded, however, the economy's performance has fallen short of these expectations. Economic growth has slowed appreciably from the pace late last year; in part, this has reflected a retreat in business and consumer confidence and the effects on our trade balance of weakness in a number of other industrial countries. Like most private forecasters, the Board members and Bank presidents generally have trimmed their projections of growth in real gross domestic product for the year as a whole, although they continue to foresee increases in output large enough to extend the reduction in the unemployment rate that began last summer. Events on the price side also have been disappointing. The inflation rate in the first part of this year was higher than in late 1992. There is evidence that some of the pickup in the consumer price index may have reflected difficulties in seasonal adjustment, and price data for the past couple of months have been much more favorable. 1. The charts for the report are available on request from Publications Services, Board of Governors of the Federal Reserve System, Washington, DC 20551. Nonetheless, a broad array of indicators points to a leveling out of the underlying inflation trend. In this circumstance, and with short-term interest rates unusually low, especially when compared with inflation, the Federal Reserve recognized a need to be alert to the possibility that the balance of risks in the economy could shift soon in a direction dictating some firming of policy; failure to act in a timely manner could lead to a buildup of inflationary pressures, to adverse reactions in financial markets, and ultimately to the disruption of the growth process. To this point, however, the moderate thrust of aggregate demand and considerable slack in the economy, taken together with the more subdued price data of late, do not suggest that a sustained upswing in inflation is at hand. Accordingly, the Federal Reserve has not adjusted its monetary policy instruments. The pace of economic growth in the final quarter of 1992 was not expected to be sustained, but the slowing in the first quarter of 1993 was surprisingly sharp. With the exception of business fixed investment, the slowdown cut across the major categories of final demand. After stepping up their spending in late 1992, consumers became more pessimistic about their economic prospects and more cautious in their spending decisions; the uncertainty surrounding the efforts to reduce the federal deficit may have been a factor in the weakening of household sentiment. Housing activity, which also had been exceptionally strong late last year, hit a lull—even before the March blizzard on the East Coast—and real defense purchases plunged. Moreover, net exports deteriorated sharply, as exports declined and imports surged; the drop in exports was attributable in part to continued weak growth in some other industrial countries and in part was an adjustment to the big increase in late 1992. The more recent statistical indicators, taken together, point to a resumption of moderate growth in real GDP in the second quarter. Most notably, on the positive side, the increase in aggregate hours 828 Federal Reserve Bulletin • September 1993 worked for the quarter as a whole—a useful indicator of movements in overall output—was the largest of the current expansion. Sales of motor vehicles also exhibited considerable vigor. But other key indicators were less robust. In particular, after allowing for the effects of the blizzard, consumer spending on items other than motor vehicles was lackluster, and housing activity improved only modestly. In the manufacturing sector, orders generally remained soft, and factory output, after having posted solid gains over the preceding seven months, is estimated to have declined somewhat over May and June. Broad measures of inflation picked up in early 1993, with monthly increases through April in the upper part of the range of the past couple of years. Although readings on consumer and producer prices were much more favorable in May and June, the cumulative price and wage data for the year to date suggest that underlying inflation has flattened out, after having trended down over the preceding two years. Excluding the especially volatile food and energy components, the twelve-month change in the CPI has held in the range of 3 lA to 3l/z percent since the summer of 1992. In financial markets, short-term interest rates have changed little so far in 1993, while intermediate- and long-term interest rates have fallen 3A to 1 percentage point, reaching their lowest levels in more than twenty years. The decline in longer-term rates seems largely to have been a response to the enhanced prospects for credible fiscal restraint, though the slower pace of economic expansion may also have played a role. Falling interest rates have helped stock market indexes set new records. Despite a decline in the dollar versus the yen, the average value of the dollar on a tradeweighted basis relative to G-10 currencies has risen, on balance, since the end of 1992. Although foreign intermediate-term interest rates have been down, on average, about as much as U.S. interest rates, short-term rates abroad have decreased substantially relative to U.S. rates, as foreign monetary authorities have taken steps to bolster weak economies. Declining U.S. market interest rates contributed to robust growth in narrow measures of money and in reserves over the first half of the year, but broad monetary aggregates were very weak and their velocities continued to show exceptional increases. Credit demands on depositories remained quite subdued relative to spending, considerable depository credit was funded from nonmonetary sources, and savers continued to demonstrate a marked preference for capital market instruments over money stock assets. In part because of the drop in bond and stock yields, as well as the desire to strengthen balance sheets, corporate borrowers have continued to concentrate credit demands on long-term securities markets, using the proceeds in part to repay bank loans; business loans at banks have not grown this year, although there were tentative signs of a pickup over May and June. Total lending and credit growth at banks has risen only slightly from the depressed pace of 1992, and these institutions have therefore not needed to pursue deposits. Thrifts have continued to contract but at a much slower pace than in recent years. Banks have eased lending standards for smaller firms for several quarters, and they recently relaxed standards for medium- and large-sized firms as well. An increased willingness to lend on the part of banks has been associated with considerably more comfortable capital positions. Banks have continued to strengthen their balance sheets by issuing large volumes of equity and subordinated debt while retaining a substantial amount of earnings. As a result, the portion of the industry that is well-capitalized (taking account of supervisory ratings as well as capital ratios) increased from about one-third at the end of 1991 to more than twothirds by March 1993. In turning to equity and other nondeposit funds, banks have reduced the share of depository credit that is financed by monetary liabilities. Depositors, for their part, have continued to shift funds into capital markets, attracted by still-high returns in these markets relative to earnings on deposits. Inflows into bond and equity mutual funds have run at record levels this year, and banks have facilitated investing in mutual fund products by increasingly offering them in their lobbies. As a consequence of these various forces, M2 increased at only a 3A percent annual rate from its fourth-quarter 1992 average through June, while M3 fell slightly. The sum of M2 and estimated household holdings of long-term mutual funds grew at about a 43A percent rate from the fourth quarter through June, a pace little changed from that of recent years. Monetary Policy Report to the Congress Debt growth has edged up this year, despite a deceleration in nominal spending, perhaps buoyed by improvements in financial positions achieved over the past few years by both borrowers and lenders. Investment outlays are estimated to have exceeded the internal funds of corporations for the first time in two years, while household borrowing has picked up relative to spending. In addition, Treasury financing needs have remained heavy. Nevertheless, nonfinancial debt has grown at only a 5 percent rate this year. Monetary Objectives for 1993 and 1994 In reviewing the annual ranges for the monetary aggregates in 1993, the Federal Open Market Committee (FOMC) noted that the relationship of broadly defined money to income has continued to depart from historical patterns. The annual velocities of these aggregates last fell in 1986, and their prolonged upward movements since then strongly suggest breaks from previous long-run trends of flat velocity for M2 and slowly decreasing velocity for M3. The rise in the velocity measures has been particularly surprising in the last four years, a period of declining interest rates, normally associated with a reduction in velocity. In February, anticipating that further balance sheet restructuring and portfolio shifts from deposits to mutual funds would result in further increases in velocity, the FOMC lowered the 1993 growth ranges for M2 and M3 by Vi percentage point from the provisional ranges set in July 1992. In fact, velocities of the broad monetary aggregates have been especially strong; in the first quarter of 1993, the velocities of M2 and M3 posted substantial 1. 829 increases of 6V4 percent and 8 percent, respectively, and appear to have recorded additional, but smaller, gains in the second quarter. As a consequence, at its meeting this month, the Committee reduced the 1993 range for M2 by an additional percentage point and the range for M3 by another V2 percentage point, leaving them at 1 to 5 percent for M2 and 0 to 4 percent for M3. The reductions of these growth ranges represented further technical adjustments in response to actual and anticipated increases in velocity and not a shift in monetary policy, which remains focused on fostering sustainable economic expansion while making continued progress toward price stability. With further substantial increases in velocities, continued sluggish expansion of M2 and M3, which are now at the lower ends of their revised ranges, would be consistent with an acceptable track for the economy. Also at the July meeting, the annual monitoring range for the domestic nonfinancial debt aggregate was reduced by V2 percentage point, to 4 to 8 percent; growth in this aggregate is likely to continue to be roughly in line with that of nominal GDP. Although the future behavior of the velocities of broad money aggregates was recognized to be difficult to predict with precision at a time of ongoing structural changes in the financial sector, it appeared likely that the forces contributing to the unusual strength in velocities would continue for some time, and the FOMC carried forward the revised 1993 ranges for the monetary and debt aggregates to 1994 as well. With considerable uncertainty persisting about the relationship of the monetary aggregates to spending, the behavior of the aggregates relative to their annual ranges will likely be of limited use in guiding policy over the next eighteen months, and the Federal Reserve will continue to utilize a broad range of financial and economic indicators in assessing its policy stance. R a n g e s f o r g r o w t h o f m o n e t a r y and d e b t a g g r e g a t e s 1 Percent Economic Projections 1993 Aggregate M2 M3 Debt2 1992 2V2-6V2 1-51 4'/2-8 /2 As of February 2-6 V2-AV2 4>/2-8>A As of July 1-5 0-4 4-8 1-5 0-4 4-8 1. Change from average for fourth quarter of preceding year to average for fourth quarter of year indicated. 2. Domestic nonfinancial sector. for 1993 and 1994 1994 The members of the Board of Governors and the Reserve Bank presidents, all of whom participate in the deliberations of the FOMC, generally anticipate that economic activity will strengthen in the second half of 1993 and continue to expand moderately in 1994. The growth of output is likely to be 830 Federal Reserve Bulletin • September 1993 accompanied by further gains in productivity, but increases in employment are projected to be large enough to keep the unemployment rate moving down. Inflation is not expected to change materially over this period. The economic growth forecasted by the Board members and Reserve Bank presidents for 1993 is somewhat weaker than that forecasted in February, mainly because of the shortfall in reed growth in the first quarter. Most expect output gains over the balance of the year to be large enough to result in a four-quarter change in real gross domestic product in the range of 2lA percent to 23A percent; for 1994, the central tendency of the forecasts spans a range of 2Vi to 3 lA percent. The civilian unemployment rate, which averaged 7 percent in the second quarter of 1993, is projected to fall to the area of 6 3 A percent by the fourth quarter of this year and to drop slightly further over the course of 1994. Recent developments in the financial sphere should be conducive to the sustained increases in spending projected for the quarters ahead. The financial positions of many households and businesses have continued to improve, and banks are showing signs of greater willingness to make loans. Short-term interest rates are relatively low, and the appreciable declines in long-term interest rates over the past several months should further the process of balance sheet adjustment and are anticipated to provide considerable impetus to business investment and residential construction. It is likely that business investment also will continue to be bolstered by the ongoing push to improve products and boost efficiency through the use of state-of-theart equipment. Moreover, with at least a moderate pickup in average growth in foreign industrial 2. countries, the external sector should be exerting a less negative influence on economic activity in the United States. Despite the improvement in financial conditions, there are reasons to be cautious about the near-term outlook. Efforts this year to bring the federal budget deficit under control already have helped to ease pressures on long-term interest rates, and a successful agreement to reduce deficits significantly will produce substantial benefits over the longer run. But such actions also are expected to exert some restraint on aggregate demand this year and next. Government outlays for defense will continue to contract, extending the dislocations and disruptions that have been evident for some time in industries and regions that depend heavily on military spending. Prospects for higher taxes may already be influencing the behavior of some households and businesses, and the constraint is likely to intensify in 1994. In addition, uncertainties about prospective federal policies reportedly are weighing on businesses and consumers; although the outcome of the congressional budget deliberations will be known shortly, uncertainties about health care reform are not anticipated to be resolved fully for some time. Most Board members and Bank presidents expect the rise in the consumer price index over the four quarters of 1993 to be in the range of 3 percent to 3Va percent, about the same as the increase over the four quarters of 1992. At this stage, the food and energy sectors are not expected to have much effect, on balance, on the broad price measures in 1993, but the flooding in the Midwest raises the risk of higher food prices in the quarters ahead. For 1994, the central tendency forecast is for CPI infla- E c o n o m i c p r o j e c t i o n s o f F O M C m e m b e r s and other F R B presidents f o r 1 9 9 3 and 1 9 9 4 Percent 1993 1994 Item Range Central tendency Range Central tendency Change, fourth quarter to fourth quarter1 Nominal GDP Real GDP Consumer price index 2 43A-6'A 2-31/2 3-3 Vi 5-53A 2'/4-23/4 3-3'/4 4'/2-63/4 2-31/4 2-4>/4 5-6V4 2'/2-3'/4 2-3 Vi Average level, fourth quarter Unemployment rate3 6'/2-7 63/4 614-7 6V4-6V4 1. Change from average for fourth quarter of preceding year to average for fourth quarter of year indicated. 2. All urban consumers, 3. Civilian labor force. Monetary Policy Report to the Congress tion in the range of 3 to 3V2 percent, not much different than in 1992 and 1993. The fundamentals remain consistent with additional disinflation; businesses continue to focus on controlling costs, and slack in labor and product markets is anticipated to decrease only gradually in the period ahead. However, the disappointing price performance in the first half of the year suggests that further progress will not come easily—in part perhaps because inflation expectations remain high. Lowering inflation and inflation expectations over time, and achieving sustained reductions in longterm interest rates, will depend importantly on a monetary policy that remains committed to fostering further progress toward price stability. The performance of prices and the economy also will depend on government policies in other areas. Namely, a sound fiscal policy, a judicious approach to foreign trade issues, and regulatory policies that preserve flexibility and minimize the costs they impose are crucial to reestablishing the disinflation trend of the past couple of years and allowing the economy to perform at its full potential. The Administration has not yet released the midyear update to its economic and budgetary projections. However, statements by Administration officials suggest that the revised forecasts for real growth and inflation in 1993 and 1994 are not likely to differ significantly from those of the Federal Reserve. THE PERFORMANCE OF THE ECONOMY IN 1993 Economic activity has continued to advance in fits and starts. After posting robust gains in the second half of 1992, real GDP rose at an annual rate of less than 1 percent in the first quarter of 1993. The slowing in activity was evident in a broad range of production and spending indicators. The more recent data suggest that the economy expanded at a firmer pace in the second quarter, although growth probably was not as rapid as in the second half of last year. To some extent, the slackening in economic activity in the first quarter of 1993 can be interpreted as a payback after two quarters of strong growth. In particular, much of the slowing was in consumer spending, where large gains in the sec 831 ond half of 1992 had outpaced income growth by a substantial margin. In addition, there was a sharp contraction in defense spending; although real defense purchases clearly will remain on a downtrend for some time, the first-quarter plunge followed a spurt in the second half of 1992 and is not likely to be repeated in coming quarters. In the external sector, exports declined in the first quarter after a big increase late last year, while imports rose markedly. Activity was also depressed, especially in the housing sector, by unusually bad weather last winter. Moderate growth in real GDP appears to have resumed in the second quarter. Nonetheless, experience thus far in 1993 has underscored that the impediments to a more rapid pace of economic expansion over the near term remain sizable. Besides defense cutbacks, the process of balance sheet adjustment goes on, as do the restructuring efforts under way at many large firms. Moreover, the continued disappointing economic performance of some major foreign industrial countries is taking a toll on U.S exports. Finally, uncertainties about prospective federal policies on a variety of fronts, although difficult to measure, are reportedly making some businesses and consumers reluctant to make major hiring and spending commitments. News on the price side was also worrisome in the first half of the year. Month-to-month movements in prices were on the high side through April, but they moderated in May and June. The more favorable recent data helped to ease concerns that a significant pickup in inflation was under way. Nonetheless, the disinflation process seemingly has stalled, with underlying inflation, as measured by the twelve-month change in the CPI excluding food and energy, holding in a narrow band between 3V4 percent and 3Vi percent since last summer. The Household Sector Growth of consumer spending on goods and services continued in a stop-and-go pattern in early 1993: It hit a lull in the first quarter after surging in the second half of 1992. Averaging through the quarterly data, consumption grew at about a 3 percent annual rate over those three quarters, and available data point to a moderate increase in the second quarter. Housing activity appears to have 832 Federal Reserve Bulletin • September 1993 revived in recent months, after sagging earlier in the year. Consumer spending increased only about 1 percent at an annual rate in real terms in the first quarter. Outlays for goods were especially weak, down at about a 2 percent annual rate; although a part of the drop was probably attributable to the severe blizzard on the East Coast in March, signs of some retreat in spending had already appeared in January and February. Meanwhile, spending on services remained on the moderate uptrend that had been evident for the past few years. Spending rose appreciably in April, spurred by a post-blizzard bounce-back in outlays for motor vehicles and other goods. Demand for motor vehicles remained strong through June, resulting in an average sales pace for the quarter of almost 14V2 million units (annual rate)—the highest since early 1990. Sales were boosted by the replacement needs of households that put off buying vehicles during the 1990-91 recession and the early recovery period. In addition, price increases—at least for models with domestic nameplates, which have accounted for almost all of the rise in sales this year—have been relatively small, and financing terms favorable. Meanwhile, real spending on goods other than motor vehicles appears to have posted a moderate gain for the quarter as a whole, and outlays for services rose slowly through May. The downshift in overall spending growth this year does not appear to be attributable to any worsening of the current trends in household incomes and financial positions, but it has coincided with a deterioration in consumer confidence. In contrast to the ebullience evident last fall, surveys conducted by the University of Michigan and the Conference Board this year have found respondents more pessimistic about their job and income prospects. Spending may also have been crimped by smaller-than-usual tax refunds—or larger tax bills—this year. Although the change in withholding schedules in March 1992 raised workers' takehome pay, and thus provided the wherewithal to fund additional purchases last year, many households may well have found themselves less liquid than usual in early 1993. More fundamentally, the slowing in spending appears to reflect a return to trend after a surge that outstripped the rise in real disposable income in the second half of last year. Indeed, after having risen somewhat over the pre- ceding couple of years, the personal saving rate dropped from 5 XA percent in the second quarter of 1992 to 4V2 percent in the fourth quarter, in the lower part of the range of recent years. The saving rate retraced some of that decline in the first quarter, but it appears to have fallen back in the spring. Real disposable income has remained on the moderate uptrend that has been evident for the past several quarters: In May, it stood about 2XA percent above the level of a year earlier. Growth in wages and salaries has stayed relatively sluggish despite the firmer pace of employment growth this year. Meanwhile, transfer payments have continued to expand, although recent increases have been diminished by a drop in unemployment insurance benefits as the number of unemployed has declined. Interest income, which fell appreciably over 1992, has only edged down thus far this year. Household financial positions have continued to show signs of improvement. The value of household assets has been buoyed by the rising stock market, while debt growth has remained moderate. Moreover, reductions in interest rates have continued to lower debt-servicing burdens; when measured in relation to disposable income, the repayment burden has fallen back to the levels of the mid-1980s. The incidence of financial stress among households also appears to have eased further. Delinquency rates on consumer loans generally dropped again in the first quarter and are down significantly from their recent peaks, and delinquencies on home mortgages are at the low end of the range of the past decade. Housing activity turned surprisingly soft in the first quarter, after a burst at the end of 1992. However, the most recent monthly indicators suggest that the sector remains on a path of gradual expansion. In the single-family area, both starts and sales of new homes fell back at the beginning of the year and remained below trend through March. Singlefamily starts rebounded in April and edged up further in May, lifting the average level for the two months about 5 percent above the first-quarter pace; new home sales gyrated in the spring but also were higher, on average, than in the first quarter. Undoubtedly, some of the recent improvement reflects a reversal of transitory factors that damped homebuilding in the first quarter. The East Coast blizzard delayed both builders and their customers in March; in addition, the weather for the nation as Monetary Policy Report to the Congress a whole was slightly worse than usual in January and February. Lumber prices ran up sharply between October and March: As measured by the producer price index, prices rose about one-third over that period, and spot market quotes for some lumber products more than doubled. The jump in lumber costs, which has since been reversed, seems not to have left much of a mark on the prices recorded in sales transactions; indeed, the inability of builders to pass along the cost increases may have accounted for some of the disruption in construction activity. In any event, low mortgage rates clearly are helping to stimulate housing demand. Interest rates on fixed-rate home mortgages, like most other long-term interest rates, fell to near their twentyyear lows last winter and have since declined further; initial rates on adjustable-rate mortgages have been the lowest since these loans first became widely available at the beginning of the 1980s. Given the trends in house prices, these interest rates have pushed the cost of home purchase—as measured by the share of household income needed to make the mortgage payments on an average home—to the lowest levels since the mid-1970s. Nonetheless, the trends in house prices this year—small rises in some markets, declines in others—have not been a uniform positive for demand, mainly because they have muted the investment motive for owning a home. Moreover, although most respondents to the Michigan survey in recent months reported that it was a good time to buy a house, only about one-third of those who already owned homes thought it was a good time to sell. In fact, industry reports suggest that first-time homebuyers have accounted for an unusually large share of all home purchases in the past two years, and that sales and prices in many localities have been strongest at the lower end of the market. Construction of multifamily housing this year has been at its lowest level since the 1950s. These structures—most of which are intended for rental use—now account for less than 5 percent of total residential investment expenditures, compared with a figure of about 15 percent in the mid-1980s. Despite the reduced production in the past several years, vacancy rates and rents have not yet shown clear signs of tightening for the nation overall. By contrast, improvements to all existing housing units have trended up over the past year and now account 833 for nearly one-fourth of total residential construction expenditures. The Business Sector Developments in the business sector generally were favorable in the first half of 1993. Business fixed investment, which continued to grow briskly, was boosted by ample profits and cash flow, the relatively low cost of capital, and ongoing efforts to improve productivity. Meanwhile, business balance sheets strengthened further as growth of business debt remained relatively slow and many firms continued to take advantage of lower bond yields and high stock prices to enhance liquidity by funding out short-term liabilities. Real business fixed investment increased at a 13 percent annual rate in the first quarter of 1993. Real outlays for equipment posted another healthy gain, and investment in structures, which had been on a protracted decline for some time, was about unchanged for a second quarter. The indicators in hand suggest that real business fixed investment remained strong in the second quarter. Equipment spending has continued to be a mainstay of economic growth. It rose at an annual rate of about 18 percent in real terms in the first quarter, after a \2Vi percent rise over the course of 1992. Real outlays for computers and related devices have continued to soar; since early 1991, they have roughly doubled, boosted by product innovations, extensive price-cutting by computer manufacturers, and the ongoing efforts of businesses to achieve efficiencies through the utilization of new information-processing technologies. However, demand for other, more traditional types of equipment also began to grow around the middle of 1992 and continued to expand in early 1993. Domestic purchases of aircraft spurted in the first quarter; but, given the financial problems besetting the airlines, this increase will likely be reversed in coming quarters. Investment in nonresidential structures appears to be stabilizing after several years of steep declines. Construction outlays were essentially flat in real terms over the fourth and first quarters, and the advance indicators suggest that the bottom has been reached or is close at hand. Trends within the construction sector have been divergent. In the 834 Federal Reserve Bulletin • September 1993 office sector, the excess of unoccupied space remains huge, and spending continues to contract. However, spending for commercial structures other than office buildings, which also had fallen sharply over the past several years, has apparently turned the corner because of both the stronger pace of retail sales over the past year and the ongoing shift of retailing activity to large suburban stores. Outlays for industrial construction have not exhibited the normal cyclical rebound—mainly because utilization of existing capacity has tightened only gradually—but they seem, at least, to be leveling out. Meanwhile, activity in the public utilities sector has continued to trend up, mainly because of capacity expansion at electric utilities but also because of the installation of pollution abatement technology, which the Clean Air Act requires be in place by 1995. In contrast, drilling activity remains depressed. Nonfarm business inventories, which had shown only small changes, on net, since the middle of 1991, rose considerably last winter and spring. Although the buildup early in the year was likely motivated in part by the need to replenish stocks drawn down by surprisingly strong sales in late 1992, some of the recent increase may be attributable to softer-than-expected sales. Notably, the inventory-sales ratio for non-auto retail stores remained in May around the high end of the range of recent years. By contrast, inventories at factories and at wholesale trade establishments generally seem to be reasonably well aligned with sales. After advancing markedly over the course of 1992, economic profits of U.S. corporations were little changed overall in the first quarter of 1993. The pretax profits earned by nonfinancial corporations on their domestic operations weakened after a fourth-quarter surge, but they still stood nearly 35 percent above the cyclical low reached in 1991; the upswing in these profits over the past two years has reflected primarily a combination of moderation in labor costs and reductions in net interest expenses. Domestic profits of financial corporations have been buffeted in recent quarters by the losses that insurance companies sustained from major natural disasters; without such losses, domestic financial profits in the first quarter would have surpassed the high reached in the first quarter of 1992. The farm economy has been beset by numerous weather disruptions so far this year. In the first quarter, severe weather in some regions retarded livestock production and damaged fruit and vegetable crops. In many regions, spring planting was hampered by wet weather, and, in parts of the Midwest, continued heavy rains around mid-year caused major flooding. Because of the planting delays and the floods, uncertainties about acreage and yields are considerably greater than usual for this time of year, and farmers in the flooded regions obviously have suffered financial losses. Despite the weather-related supply disruptions, farm income and farm financial conditions for the nation as a whole seem to have held up reasonably well in the first half of 1993. On average, farm prices in the first half were slightly above those of a year earlier, with declines for farm crops being offset by higher prices for livestock. Farm subsidies, which have been running well above their 1992 pace, have been lifting farm income and cash flow, and farm investment in new machinery has picked up. The recent jump in crop prices—a consequence of the flooding—will boost the incomes of the many farm producers whose crops are still in good condition. The Government Sector Governments at all levels continue to struggle with budgetary difficulties. At the federal level, the unified budget deficit over the first eight months of fiscal year 1993—the period from October to May—totaled $212 billion, somewhat less than during the comparable period of fiscal 1992. However, excluding deposit insurance and adjusting for the inflow of contributions to the Defense Cooperation Account in fiscal 1992, the eight-month deficit was about $230 billion in both fiscal years. In the main, the underlying deficit has failed to drop because the restraint in discretionary spending that was legislated in 1990 and the deficit-closing effects of stronger economic activity have been offset by continued large increases in spending for entitlement programs. In total, federal outlays in the first eight months of fiscal 1993 were only about 2 percent higher than during the same eight months of fiscal 1992. Outlay growth was damped significantly by a sharp Monetary Policy Report to the Congress swing in net outlays for deposit insurance that was attributable largely to the improved health of depository institutions. In fact, so far this year, receipts from insurance premiums and proceeds from sales of assets taken over by the government have exceeded by $ 18 V2 billion the gross outlays to resolve troubled institutions. Defense spending was also quite weak in the first eight months of fiscal 1993. Outlays for Medicare and Medicaid continued to rise rapidly; however, the increase so far this year—about 10 percent—was only half as large as the one in the preceding year. The deceleration in health care spending appears to stem, in part, from federal regulations issued in 1992 that limit the states' ability to shift Medicaid costs to the federal government. Federal purchases of goods and services—the part of federal spending included directly in gross domestic product—declined at an annual rate of 18 percent in real terms in the first quarter of 1993. A sharp decrease in defense spending more than accounted for the drop. Real defense purchases have been falling noticeably since early 1991, but the decline has been erratic; at least part of the first-quarter plunge can be interpreted as a correction after a few quarters of surprisingly strong spending. Meanwhile, real nondefense purchases have been almost flat over the past couple of quarters. Federal receipts in the first eight months of fiscal 1993 were about 5 percent greater than in the same period of a year earlier; the rise was roughly the same as that in nominal GDR Boosted by the upswing in business profits, corporate taxes rose sharply. However, they account for less than onetenth of total receipts, and growth in other categories was only moderate in the aggregate. States and localities continue to face sizable budget deficits: As measured in the national income and product accounts (NIPA), the combined deficit (net of social insurance funds) in the sector's operating and capital accounts has been stuck around $40 billion since late 1990. These outsized deficits have persisted despite ongoing efforts by many governments to adjust spending and taxes. As at the federal level, deficit reduction has been complicated by the upsurge in payments to individuals for health and income support; in the first quarter of 1993, state and local transfer payments for Medicaid and Aid to Families with Dependent Children 835 (in nominal terms) were nearly 20 percent above those of a year earlier. The deficit-reduction efforts of state and local governments in recent quarters have been concentrated on the spending side. Their purchases of goods and services were nearly flat in real terms in the first quarter of 1993 and have changed little, on net, since early 1992. Outlays for construction, which fell at an annual rate of 7 percent, on average, in the fourth and first quarters, have been especially weak. For all major categories except sewer and water, outlays in recent months have been running significantly below year-earlier levels. State and local employment has continued to expand at the somewhat slower pace that has been evident since 1991, while these governments have continued to hold the line on wages and benefits. The approximately 3Vz percent increase in state and local compensation rates over the year ended in March was similar to the rise for workers in private industry; by contrast, in the 1980s, state and local workers received increases that, on average, were more than 1 percentage point per year greater than those in private industry. Receipts of state and local governments, restrained by the relatively tepid cyclical upswing in the sector's tax bases, have grown only moderately over the past year. Also, these governments have lately been reluctant to raise taxes, after the sizable hikes they enacted in 1990 and 1991. All told, the sector's own-source general receipts, which comprise income, corporate, and indirect business taxes, rose 5 percent over the four quarters ended in the first quarter of 1993, an increase about the same as that in nominal GDP. The External Sector Since December 1992, the trade-weighted foreign exchange value of the dollar has risen about 5 percent, on balance, in terms of the currencies of the other Group of Ten (G-10) countries. This net increase has reflected much larger movements in the dollar's value against individual currencies: In particular, a sharp decline against the Japanese yen was more than offset by substantial increases against major European currencies. Relative to the monthly average for December 1992, the dollar has declined nearly 15 percent 836 Federal Reserve Bulletin • September 1993 against the yen to record lows, prompting heavy Japanese official purchases of dollars and moderate dollar purchases by U.S. authorities. The strengthening of the yen has occurred despite the weak performance of the Japanese economy and market expectations that Japanese short-term interest rates will remain near historically low levels over the next year; it seems to be based largely on the perception that Japan's external surplus, which has grown rapidly over this period, is not sustainable. Against the German mark, the dollar has risen almost 10 percent since December, reflecting a substantial easing of German interest rates and the expectation of further declines in light of the sharp contraction in German economic activity. The dollar has also appreciated against other European currencies, and it has remained little changed against the Canadian dollar. Economic activity in the major foreign industrial countries generally has been sluggish so far this year. The recovery in Canada now seems to be reasonably well established, and real GDP in the United Kingdom has been growing slowly. However, continental Europe remained in recession in the first quarter, with a sizable reduction in real GDP in western Germany; recent indicators point to continued weakness in the second quarter. After falling for much of 1992, Japanese real GDP advanced in the first quarter, a rise in large part reflecting the effects of earlier fiscal measures; however, indicators for the second quarter are mixed, and the appreciation of the yen will likely result over time in a drag on net exports. Unemployment rates have continued to rise (into the double-digit range in many instances) in the countries still in recession; even in the countries showing signs of recovery, unemployment has remained high. Partly as a consequence, wage pressures have ebbed, and underlying inflation has continued to decelerate, on average. A notable exception is western Germany, where the CPI rose more than 4 percent over the twelve months ended in June, partly because of an increase in the valueadded tax early this year and large increases in the prices of housing services. In contrast to the overall weakness of activity in foreign industrial countries, real growth so far this year in major developing countries, especially in Asia, appears to have remained at around the strong pace of 1992. After expanding rapidly at the end of 1992, real merchandise exports declined during the first quarter of 1993, but they bounced back to their fourthquarter 1992 high in April and May. Shipments to developing countries, which had risen sharply over 1992, dropped back during the January-to-May period. In the aggregate, exports to industrial countries rose somewhat in the first five months of 1993, but Canada and the United Kingdom accounted for most of the increase. Real merchandise imports, extending the rapid pace of growth recorded over the four quarters of 1992, rose sharply over the first five months of 1993. Trade in computers continued to soar and was responsible for about one-third of the increase in merchandise imports. More broadly, imports were boosted by the rapid growth of U.S. domestic final demand in the second half of 1992 and inventory restocking this year. In addition, the prices of non-oil imports, reflecting the lagged effects of the appreciation of the dollar during the last quarter of 1992, fell somewhat in the first quarter; much of that decline appears to have been reversed in the second quarter. The price of oil imports fluctuated in a relatively narrow range over the first half of 1993. Mild weather and strong OPEC production pushed oil prices down early in the year, but prices subsequently retraced the decline on signs that OPEC would effectively curb production. Recently, oil prices have dropped on Kuwait's decision not to participate in OPEC's quota allocations for the third quarter and speculation that Iraq may be allowed to resume exporting sooner than had been expected. The merchandise trade deficit widened to $116 billion (at an annual rate) in the first quarter of 1993, nearly $10 billion greater than in the second half of 1992; it increased somewhat further in April and May, on average. With moderate increases in net income from direct investments and a slight further widening of the surplus on net service transactions, the deficit in the current account deficit rose somewhat less than the trade deficit, to $89 billion (annual rate) in the first quarter, compared with $83 billion in the second half of 1992. Net capital inflows recorded in the first quarter of 1993 were largely attributable to substantial increases in foreign official assets held in the United States, particularly in those of some newly Monetary Policy Report to the Congress industrializing Asian economies and of certain Latin American countries. Net private capital inflows were relatively small. Private foreigners added significantly to their holdings of U.S. securities, particularly Treasury bonds. However, U.S. net purchases of foreign bonds reached record levels, and net purchases of foreign stocks, although down from peak levels reached in the last half of 1992, remained heavy. New bond issues by foreigners in the United States also were very strong. Capital inflows associated with foreign direct investment in the United States recovered substantially in the first quarter but remained far below the peaks reached in 1989. Foreign direct investment in the United States apparently has been deterred by unfavorable returns realized on earlier investments and by financial market conditions less favorable to acquisitions. In contrast, capital outflows associated with U.S. direct investment abroad remained strong. Labor Market Developments The labor market showed signs of improvement in the first half of 1993. According to the payroll survey, employment increased about 1 million; this number compares with a rise of about 600,000 over the second half of last year and brings the total increase since the cyclical low in 1991 to about 2 million. Nonetheless, job gains have continued to fall far short of the norms set by earlier business cycle expansions. For example, only in May did payroll employment return to its pre-recession peak, two years after the cyclical trough; by contrast, recessionary job losses typically have been reversed within the first year of the expansion. Job growth has continued to be restrained by the temperate pace of economic activity and employers' ongoing efforts to improve productivity. In addition, firms are confronting cost pressures associated with sizable increases in health insurance premiums and in other fringe benefits; uncertainties about the future course of government policies may also be contributing to the reluctance of some firms to expand their permanent full-time work forces. Moreover, firms are relying increasingly on temporaiy workers, in part because doing so affords them greater flexibility in responding to fluctua 837 tions in demand for their products. Indeed, employment at personnel supply firms, which consist largely of temporary-help agencies, rose more than 150,000 between December and June. Over the past two years, the increase has been about 500,000; thus, although these firms currently account for less than 2 percent of total payroll employment, they are responsible for one-quarter of the increase in total employment over this period. Job gains in the first half of 1993 also reflected a continuation of the steady uptrend in employment in health services. In addition, gains occurred at trade establishments, construction payrolls improved with the recent stronger housing activity, and there were scattered increases in services other than health and personnel supply. Meanwhile, manufacturing employment declined further, on balance, over the first six months of the year. Although factory output increased steadily through April, firms relied mainly on a combination of productivity improvements and longer workweeks to meet their output objectives; in May and June, output decreased somewhat. Job losses in the first half were concentrated in the durable goods sector, with particular weakness at producers of aircraft and motor vehicles. Since its last peak in January 1989, manufacturing employment has fallen about 13A million; layoffs in defense-related industries (those industries that depend on defense expenditures for at least 50 percent of their output) have accounted for about one-fifth of the decrease in total factory payrolls. Employment as measured by the monthly survey of households rose about 900,000 over the first six months of the year—essentially the same as in the payroll series. The number of unemployed fell appreciably at the beginning of the year, and the civilian unemployment rate dropped from 7.3 percent in December to 7.0 percent in February; it has shown little change since that time. The civilian labor force expanded only moderately over the first six months of 1993—less than 1 percent at an annual rate. Labor force growth continued to be damped by the relatively small increase in the working-age population. In addition, perceptions of meager employment opportunities evidently continued to deter many potential job seekers. The labor force participation rate, which measures the percentage of the working age popu- 838 Federal Reserve Bulletin • September 1993 lation that is either employed or looking for work, spurted in late spring; however, this spurt followed a sharp decline earlier in the year, and the level at mid-year was about the same as that in late 1992. Output-per-hour in the nonfarm business sector declined at an annual rate of IV2 percent in the first quarter, echoing the sharp deceleration in output. Nonetheless, the first-quarter drop followed a string of sizable increases; all told, the rise in productivity over the year ended in the first quarter of 1993 was IV2 percent—smaller than the gains recorded earlier in the economic expansion but still noticeably larger than the norms for the past decade. Productivity growth in the manufacturing sector, where downsizing and restructuring efforts have been under way for some time, has continued to be especially impressive, totaling more than 5 percent over the past year. Labor compensation has tilted up of late. The employment cost index for private industry—a measure that includes wages and benefits—rose at an annual rate of 4lA percent over the first three months of the year. Even so, the data are volatile, and the total increase since March 1992 amounted to only 3V2 percent; by contrast, this index had risen 4XA percent over the preceding twelve months, and, as recently as early 1990, the twelvemonth change had exceeded 5 percent. The increase in wages over the past year was less than 3 percent, whereas the cost of fringe benefits, pushed up by the steep rise in the cost of medical insurance and by higher payments for workers' compensation, rose more rapidly. Primarily because of the drop in productivity, unit labor costs deteriorated markedly in the first quarter, but they still were up less than 2 percent over the past year. Price Developments Inflation exhibited considerable month-to-month volatility in the first half of the year. Broad measures of inflation picked up somewhat in early 1993, with monthly readings through April in the upper part of the range of the past couple of years. However, price changes at the consumer and the producer levels were small in May and June. Cutting through the monthly data, the disinflation process evident in 1991 and 1992 seems to have stalled, with underlying inflation, as measured by the twelve-month change in the CPI excluding food and energy, holding in the range of 3 XA percent to 31/2 percent that has prevailed since last summer. The total CPI, held down by essentially flat energy prices, has risen 3 percent over the past twelve months. The CPI for food increased at an annual rate of 2 percent in the first half of 1993, a shade above the rate of increase during 1992. Meat prices jumped sharply during the first few months of the year as production fell short of year-earlier levels. In addition, the prices of fresh vegetables were boosted during the spring by weather-related production setbacks in several regions of the country. By late spring, these supply problems had abated, and the June CPI brought price declines in food categories where the sharpest upward pressures previously had been evident. Since the end of June, however, farm crop prices have moved up in response to the severe flooding in the Midwest. The increases in crop prices have already been reflected in the form of large advances in some commodity price indexes and have raised the possibility that renewed upward pressures on consumer food prices could soon emerge. Consumer energy prices changed little, on net, over the first half of the year. With world oil markets remaining relatively quiescent, the price of West Texas intermediate generally fluctuated between $18 and $20 per barrel but has weakened recently. Retail prices for refined petroleum products changed fairly little on the whole through April and dropped, on balance, in May and June. Residential natural gas prices rose considerably over the first half, in part because of inventory adjustments associated with last winter's colderthan-usual weather; although recent declines in wellhead prices suggest that some of the increase at the retail level may be retraced in coming months, over the longer haul, natural gas prices are being supported by an ongoing shift toward the use of cleaner-burning fuels. All told, the CPI excluding food and energy increased at an annual rate of 3XA percent over the first half of the year, after rising 3 percent over the second half of 1992. The CPI for goods soared in January and February, with large increases reported for several items. Apparel prices jumped early in the year, in part because strong sales in late 1992 limited the need for post-Christmas markdowns. Monetary Policy Report to the Congress Some retailers may also have seen opportunities to widen profit margins on other merchandise; the recent decrease in prices of home furnishings, for example, suggests that not all of these increases stuck. Increases in prices of non-energy services were steadier but also somewhat larger than in 1992. Part of the step-up was in shelter costs, which account for about half of non-energy services and had posted some unsustainably small increases last summer. However, the substantial deceleration in medical care prices (for both goods and services) that has been in train over the past few years extended into 1993. In fact, the CPI for medical care rose only about 6 percent over the twelve months ended in June; this increase was among the smallest of the past decade. To some extent, the higher underlying CPI inflation rates in the first half of 1993 may be a statistical phenomenon that will be reversed in the second half: Indeed, over the past several years, price increases early in the year have tended to exceed those for the year as a whole, even after seasonal adjustment by the Bureau of Labor Statistics. But, even allowing for this phenomenon, inflation seems to have leveled out. The lack of further deceleration is puzzling in light of the considerable slack in labor and product markets. One possible explanation is that the pickup in economic activity late last year may have triggered a round of price increases; if so, some deceleration in prices is likely in the wake of the subdued performance of the economy in the first half. Another may be the apparent failure of inflation expectations, as measured by various surveys of consumers and businessmen, to reflect fully the reduction in actual inflation over the past few years; although the survey measures vary considerably, respondents seem to share a sense that inflation has bottomed out. Prices received by domestic producers have slowed in recent months, after undergoing a pickup earlier in the year. All told, the twelve-month change in the producer price index for finished goods other than food and energy was less than 2 percent in June, down somewhat from a year earlier. At earlier stages of processing, where price movements tend to track cyclical fluctuations in demand, prices of intermediate materials (excluding food and energy) firmed a little early in the year, but they subsequently moderated; although 839 the pattern was exaggerated by the spike in lumber prices, it was evident for some other materials as well. In commodity markets, prices of precious metals have moved up sharply over the past couple of months, and some scattered increases have been evident elsewhere. More broadly, however, industrial commodity prices were down slightly, on net, over the first half of the year. MONETARY AND FINANCIAL IN 1993 DEVELOPMENTS Monetary policy in 1993 has been directed toward the goal of sustaining the economic expansion while preserving and extending the progress made toward price stability in recent years. In the first half of the year, economic activity slowed markedly from the very rapid pace of the fourth quarter, while inflation indicators fluctuated widely. Although inflation readings were a source of concern for the Federal Open Market Committee, the intensification of price pressures did not seem likely to be sustained over an extended period, and reserve conditions were kept unchanged. With short-term rates steady, prices of fixed-income securities were buoyed by prospects for significant fiscal restraint and by a slowing of the economic expansion, although fears of a pickup in inflation at times prompted partial reversals in bond rates. Yield spreads on private securities relative to Treasury rates remained historically narrow, and stock price indexes set new records. The monetary aggregates have been sluggish this year, as both the share of depository institutions in overall debt finance and the proportion of depository credit funded with monetary liabilities have fallen further. The reduced role for depositories largely reflects weak demands for loans and deposits by the public. Corporate borrowers have continued to issue heavy volumes of stocks and bonds in part to pay down bank debt, while households have withdrawn deposits to invest in bond and equity funds that finance, among others, corporate issuers. After two years of no growth, bank loans weakened further early this year, but increased fairly vigorously in May and June, posting a small net gain for the first six months of the year. The growth of nonfinancial sector debt so far this year has edged up from the subdued pace of 1992, despite a decel- 840 Federal Reserve Bulletin • September 1993 eration of nominal spending, as investment spending is estimated to have exceeded the internal funds of corporations, household borrowing has picked up relative to spending, and Treasury financing needs have remained heavy. The Implementation of Monetary Policy Early in the year, incoming data suggested that the faster pace of economic activity that had emerged in the third quarter of 1992 had been maintained through year-end. Indicators of industrial production, retail sales, business fixed investment, and residential construction activity all posted solid gains. Financial impediments to the expansion appeared to be diminishing as the balance sheets of households, business firms, and financial institutions continued to improve, although money and credit growth remained weak. Wage and price data suggested a continuing trend toward lower inflation. Intermediate- and long-term interest rates had declined somewhat, in part reflecting a view that the new Administration's fiscal stimulus package was likely to be modest and that material reductions in future deficits were in prospect. The economic outlook remained clouded, however, by uncertainties regarding details of fiscal policy plans, continued restructuring and downsizing of large businesses, and lingering restraints on credit supplies. At its early February meeting, the FOMC decided that its directive to the Federal Reserve Bank of New York regarding domestic open market operations should retain a symmetric stance regarding possible reactions over the intermeeting period to incoming indicators; such a directive, which implied no presumption in how quickly changes in operations should be made toward tightness or ease, had been instituted in December, following directives that had been biased toward easing over much of the previous two years. Economic activity appeared to decelerate in the early months of the year, however, in part because of adverse weather conditions, with softness in retail sales, housing starts, and nonresidential construction. Bank credit was failing to expand significantly, while broad money was declining because of temporary factors and a weak underlying trend. Although short-term interest rates were little changed, bond markets rallied further on weaker economic activity and improved prospects for fiscal restraint, which would reduce the government's demand for credit. Long-term rates fell to the lowest levels in almost twenty years in early March, before backing up somewhat on reports of a second month of substantial increases in consumer and producer prices. The drop in interest rates buoyed stock markets to record highs and contributed to a small decline in the weighted-average value of the dollar. The dollar depreciated substantially against the yen, as market attention focused on Japan's growing trade surplus. Signs of price pressures were a concern for the FOMC, but the fundamentals of continued slack in labor and capital utilization, subdued unit labor costs, and protracted weakness in credit and broad money suggested that a higher trend inflation rate was not setting in. With the economy slowing, reserve pressures were kept unchanged and a symmetric policy directive was retained at the meeting in March. After pausing in March, producer and consumer prices leaped again in April. Long-term interest rates backed up further in response; the price of gold surged, and the dollar fell more rapidly. With the Japanese authorities buying dollars in foreign exchange markets, the U.S. Treasury and the Federal Reserve also purchased dollars for yen in late April. After extended weakness, the monetary aggregates jumped in early May by more than could be explained by temporary factors. At its May meeting, the FOMC was confronted with weak output growth and intensified inflation readings. It was difficult to identify reasons for this juxtaposition. Price increases by business firms in early 1993 could have reflected optimism engendered by strong demand conditions in the second half of 1992 or an upward adjustment of inflation expectations. However, considerable slack remained in labor and product markets, and the pace of economic activity had slowed markedly. The Committee concluded that no policy adjustment was needed at its meeting, but the risks of increased inflation and inflation expectations warranted a directive that contemplated a relatively prompt tightening of reserve pressures if signs of intensifying inflation continued to multiply. The subsequent readings on inflation for May and June were subdued; moreover, evidence of heightened inflation expectations did not emerge in Monetary Policy Report to the Congress markets for fixed-income securities. Consequently, the stance of monetary policy was not changed following the May FOMC meeting. The dollar rebounded on foreign exchange markets in June and early July in the wake of the fall of the Japanese government and evidence that economic conditions in Europe had deteriorated further. On balance, since the beginning of the year, short-term interest rates are little changed, while intermediate- and long-term rates have fallen 3A to 1 percentage point, reaching the lowest levels in more than twenty years. In particular, the thirtyyear Treasury bond has reached a low of 6.54 percent, while the ten-year Treasury note has touched 5.71 percent, its lowest level since 1971. The interest rate on fixed-rate thirty-year mortgages has dropped to 7.16 percent, a record low in the twenty-two year history of the series. The fall in intermediate-term interest rates in the United States was roughly matched on average abroad, and the trade-weighted value of the dollar in terms of G-10 currencies has increased about 5 percent from its December average, as overseas economies weakened and foreign short-term rates declined substantially. Monetary and Credit Flows Growth of the broad money measures was quite slow over the first half of 1993, falling below the subdued pace of 1992, and leaving them near the lower arms of the revised growth cones for 1993. This deceleration did not, however, reflect a moderation in overall credit flows or a tightening in financial conditions. Rather, it resulted from a further diversion of credit flows from depository institutions as well as continued financing of depository credit through capital accumulation rather than deposits. Indeed, growth of the debt of all nonfinancial sectors is estimated to have edged up this year—to 5 percent—despite an apparent slowing in nominal GDR Continued substantial demand for credit by the federal government as well as more comfortable financial positions and consequent signs of a greater willingness to borrow and lend by private sectors likely supported debt expansion. Nevertheless, overall debt growth remains in the lower portion of its revised 4 to 8 percent annual range for 1993. Nonfederal debt growth has 841 expanded at a still-modest VA percent pace, after two years of even weaker growth. Taking advantage of low long-term interest rates and the strong stock market, businesses have issued an exceptionally large volume of bonds and equity; the proceeds have been used mainly to refund other marketable debt and repay bank loans. Stresses associated with the restructuring of the economy and the earlier buildup of debt linger. However, downgradings of corporate debt by rating agencies have dropped well below the peak levels of a few years ago, and a growing number of firms have received upgradings, as corporate cash flows have strengthened substantially relative to interest expenses. Debt service burdens of households also have continued to decline relative to disposable income, as households have repaid high interest debt or taken advantage of lower rates to refinance. Indeed, the decline in long-term interest rates during the year has brought a new surge of refinancings of mortgages. With balance sheets improved, households have become somewhat more willing to borrow, and consumer credit has begun growing moderately after two years of weakness. Some of that growth, though, may reflect heavy promotion of credit cards carrying special incentives for use in transactions, such as "frequent-flier miles" or merchandise discounts. Net mortgage debt is estimated to have grown only a bit more than the low rate of 1992. Gross issuance of state and local government debt has been particularly robust this year. However, refunding volume has accounted for nearly 70 percent of the offerings, compared with about 45 percent in 1992, a record year for refundings. Net debt of state and local governments has grown only moderately again in 1993. The budgetary situations of some state and local governments have improved, as tax receipts have been stronger than expected, but severe financial problems remain in other locales. With corporate borrowers still relying heavily on financing through capital markets, and depository lending spreads over market rates remaining high, the trend decline in the share of total credit flows provided by depository institutions was extended through the first half of 1993. From the fourth quarter of 1992 to June, bank credit expanded at a 4lA percent annual rate, only a slight pickup from 842 Federal Reserve Bulletin • September 1993 the sluggish pace of the previous two years. Securities acquisitions accounted for most of the expansion, as loans increased at only a PA percent rate. The growth of securities portfolios at banks in part reflects additions to holdings of securitized mortgage and consumer loans; bank financing of consumer spending and real estate transactions is thus stronger than indicated by bookings of loans in those sectors. Although commercial and industrial loans have been about flat on balance so far this year, a few signs of easing in bank lending terms and conditions have recently emerged, and business loans rebounded in May and June. Judging by business loan growth at smaller banks so far this year, a pickup has occurred in lending to smaller nonfinancial firms. Thus, the continuing weakness in overall business loan growth does not appear to be driven primarily by restrictive supply conditions but rather by the preference of larger firms to fund through capital markets. Lower market interest rates over the past few years have helped strengthen the financial positions of banks and thrifts. The lower rates have resulted in capital gains on securities and improved interest margins—as deposit rates have fallen more than lending rates. Lower rates also have helped bank borrowers by decreasing interest expenses and boosting economic activity, thereby reducing loan loss provisions for banks. Banks posted record earnings in 1992 and remained very profitable in early 1993; prices of their shares on equity markets have risen substantially. Thrift institutions have continued to contract in 1993, though at a much slower pace than over the past four years. A lack of funding for the Resolution Trust Corporation caused a hiatus in the closure of institutions under its conservatorship. However, privately operated thrifts have not expanded and the industry continues to consolidate. Slower growth in nominal GDP, moderate demand for credit relative to spending, and the reduced share of credit provided by depositories have all contributed to the lack of significant growth in the broad monetary aggregates this year. Another factor inhibiting money growth has been continued substantial funding of bank and thrift assets with subordinated debt and equity issues as well as with retained earnings—all a byproduct of ongoing efforts to build capital positions. Only about one-third of the industry (by asset volume) had capital ratios and supervisory ratings high enough at the end of 1991 to be considered wellcapitalized, but more than two-thirds was so positioned by early 1993. About $10 billion was added to bank equity and subordinated debt during the first quarter, a pace about the same as that in 1992; data on new debt and equity issues indicate another sizable gain over the second quarter. Depositories have also recently relied more heavily on other nondeposit sources of funds. Weak economies and credit demand abroad have prompted the U.S. offices of foreign banks to draw more funding from overseas and the domestic offices of U.S. banks to reduce foreign lending this year. Overall shifts from deposits to other sources of funding may be driven partly by regulatory inducements—including higher insurance premiums on deposits and incentives to bolster capital. But changes in investor preferences from shortterm deposits to longer-term debt and equity may also be playing a role in motivating the restructuring of bank and thrift sources of funds. Greater reliance by borrowers on capital markets has been facilitated by concurrent shifts in saving preferences away from monetary assets and into capital market investments. Such portfolio realignments are evident in record inflows to bond and stock mutual funds, and money balances were also likely invested directly in stocks and bonds. The incentives for what appears to be an extraordinary adjustment of household portfolios are varied. Interest rates paid on retail time deposits, NOW accounts, and money market deposit accounts (MMDAs) have fallen well below any rate offered since the inception of deregulated deposits in the early 1980s, and savings deposit rates are now the lowest in more than thirty years. The shock effect 3. Distribution of assets of domestic commercial banks, by adjusted capital c a t e g o r y 1 Percent End of year Capital category Well capitalized Adequately capitalized ... Undercapitalized 1991 1992 34 45 21 68 22 10 March 1993 70 20 10 1. Capital categories adjusted for overall supervisory rating according to the rule of thumb of downgrading a bank by one category for a low examination rating by its supervisory agency (CAMEL 3,4, or 5). Monetary Policy Report to the Congress of historically low deposit interest rates caused many depositors to investigate alternative investments. With the yield curve extraordinarily steep, much higher returns have been available in recent years on longer-term investments. A bond or stock mutual fund offers investors a chance to earn these higher yields and still enjoy liquidity features, including in some cases a check-writing facility. However, investment in such a mutual fund carries with it a higher risk of loss as well, because unlike monetary assets, its principal value fluctuates with market prices. Indeed, the higher yield on bonds relative to short-term instruments probably anticipates some capital losses. Whether all households accurately assess relative risks when comparing returns recently earned on mutual funds with those on money balances remains an open question. Shifts into mutual funds have become much easier and less costly for households, most notably because many banks have begun offering mutual funds for sale in their lobbies. While many banks now offer discount brokerage services, a survey by the Federal Reserve found that larger banks have recently been making special efforts to promote mutual fund investments among their depositors. An increasing number of banks have sponsored their own mutual funds or entered into exclusive sales relationships with nonbank sponsors of funds. Some banks have promoted these products as a defensive measure to retain long-run relationships with valued depositors. In other cases, however, banks have promoted funds as part of a strategy to earn fee income without booking assets, thereby avoiding the need to raise additional capital. Substitution between money and long-term mutual funds appears to have become evident in the aggregate data in recent years. There was little increase in such funds from 1987 through 1990, but inflows have surged since then, at the same time that accretions to M2 balances have declined. A comparison of the quarterly growth rates of M2 and the sum of M2 and bond and stock funds shows that growth of the sum has not weakened as dramatically as that of M2 over the last two and half years; it has averaged nearly a 5 percent annual rate, compared with less than 2 percent for M2. Although adding mutual funds and M2 together captures some substitution out of M2 in recent years, the total remains quite volatile, indicating that other forces have affected both M2 and mutual 843 funds. Partly as a consequence, the relationship of the total to aggregate spending is subject to considerable uncertainty. Investments in bond and stock funds are themselves subject to potentially volatile capital gains and losses. More fundamentally, with the public's holdings of mutual funds now vastly expanded, its responses to a variety of interest rate and stock price movements has yet to be tested. Because weakness in the demand for broad money has resulted largely from shifts of portfolio preferences rather than changes in spending intentions, it has not been reflected in comparable weakness in nominal GDP. Furthermore, the effects of a declining share for depositories in overall credit growth have been substantially offset by increased funding through capital markets, where households now invest a larger share of wealth. The velocity of M2 has been subject to extraordinary and unpredictable surges that have reduced the value of M2 as a guide to policy. Traditional models of velocity based on the difference between short-term market interest rates and interest rates on deposits and money market mutual funds, and even broader models that take account of longer-term interest rates and after-tax loan rates faced by households, cannot explain the full 4 percent rise in M2 velocity in 1992, nor what may be a somewhat faster rate of increase in the first half of 1993. Money growth in the first quarter was depressed in part by the effects of several temporary factors, including distortions of seasonal factors and a lull in mortgage refinancing. A renewed surge of mortgage refinancing began to bolster demand deposits and MMDAs in April, as mortgage servicers increased balances temporarily before making remittances to investors in mortgage-backed securities. The seasonal-factor distortions began to reverse that month as well. However, substantial shortfalls in individual nonwithheld tax payments relative to recent years produced an offsetting restraint to money growth in April, as the buildup of balances required to pay taxes was smaller than that incorporated into seasonal factors. Even excluding estimated effects of these special factors, however, underlying growth of money through the first four months of the year was far weaker than historical relationships would suggest. Despite continued heavy inflows to bond and equity funds in May, the monetary aggregates surged, boosted in part by a reversal of the tax 844 Federal Reserve Bulletin • September 1993 effects and an intensification of mortgage refinancing activity. However, the aggregates decelerated substantially in June, and by more than might be suggested by a waning of tax and mortgage refinancing effects. In 1993, household portfolio adjustments differed somewhat from their previous pattern. In the past, the realignment of household wealth toward capital market investments had mainly involved shifts from money market mutual funds and small time deposit accounts. At the same time, outflows from those accounts had also gone into NOW and savings deposits, the interest rates on which were falling only slowly as market rates declined. This year, the sum of all these M2 balances has fallen at about the same rate as in 1992, but a slower runoff of small time deposits and money funds has been offset by a sharp deceleration in the growth of NOW and savings deposits. Catch up declines in interest rates on liquid deposits may account for part of their slower growth. Some nontransactions balances held in NOW and MMDA deposits have likely been shifted into bond and equity funds. It may be that some depositors who do not ordinarily 4. shop for small rate advantages have been induced to make basic portfolio adjustments because of the historically low deposit interest rates and the increased ease of making investments in capital market instruments. Partly as a result, narrow measures of money have decelerated this year, but their expansion has remained rapid. M l has grown at a 9Vi percent rate from the fourth quarter of 1992 through June, compared with 141/* percent in 1992. Reserves, now held exclusively against transaction deposits, have grown at an 11 percent pace compared with 20 percent in 1992. The monetary base has slowed by much less, because of continued strong foreign demand for currency this year. With reduced strength in its M l component, and in savings and MMDAs, as well as continued runoffs of small time deposits and retail money funds, M2 has grown at only a 3A percent annual rate from the fourth quarter of 1992 through June 1993, well below the lower end of its growth cone set in February. The FOMC monitored the behavior of M2 carefully over the first half of the year, but in light of actual and expected strength of velocity, Growth of money and debt Percent Domestic nonfinancial debt Ml Period M2 M3 Total Nonfederal 1 Annual, fourth quarter to fourth quarter 1980 19812 1982 1983 1984 7.4 5.4 (2.5) 8.8 10.4 5.5 1985 1986 1987 1988 1989 1990 1991 1992 Semiannual (annual rate)3 1993:H1 8.9 9.3 9.1 12.2 8.1 9.5 12.3 9.9 9.9 10.8 9.5 10.0 9.3 11.4 14.3 9.0 9.7 7.4 8.8 13.9 12.0 15.5 6.3 4.3 .6 8.7 9.3 4.3 5.3 4.7 7.6 8.9 5.8 6.4 3.7 13.8 14.0 10.1 9.2 8.2 13.3 13.7 10.4 9.6 8.5 4.3 8.0 14.3 4.0 2.8 1.8 1.8 1.1 .3 6.8 4.4 4.8 5.9 2.5 2.9 8.7 .1 -.7 5.1 3.3 6.6 10.6 -2.0 2.2 3.8 2.4 4.4 5.7 3.0 3.6 9.5 .8 -.3 5.1 3.3 4 Quarter (annual rate) 1993:Q1 Q2 Fourth quarter 1992 average to June 1993 average (annual rate)5 1. From average for fourth quarter of preceding year to average for fourth quarter of year indicated. 2. Ml adjusted for shift to NOW accounts in 1981. 3. From average for 1992:Q4 to average for 1993:Q2 (for debt, estimated with data through May). 4. From average for preceding quarter to average for quarter indicated (for debt, estimated with data through May). 5. For debt, to May 1993 average. Monetary Policy Report to the Congress the Committee determined that actions to boost M2 growth were not needed to achieve its underlying objectives for prices and the economy. The aggregate is near the lower arm of the revised annual growth cone established in July, and if velocity continues to increase substantially, M2 may well come in toward the lower end of the revised growth range for the year. The non-M2 portion of M3 has declined this year at nearly the same pace as that of the previous 845 two years. Large time deposits have continued to fall, and the halt in reductions in short-term rates has ended the rapid growth of institutional money funds, as their slower-adjusting yields have come down to their usual relationship to market interest rates. From the fourth quarter of 1992 through June, M3 fell at about a LA percent annual rate; it lies slightly below its revised annual growth cone. • 846 Industrial Production and Capacity Utilization for June 1993 Released for publication July 16 Industrial production, which was unchanged in May, declined 0.2 percent in June. The output of consumer goods, construction supplies, and materials decreased; the production of business equip- ment, which posted significant advances earlier this year, edged up for a second month. At 110.1 percent of its 1987 annual average, total industrial production was the same in June as it had been in March but was 3.8 percent above its year-earlier level. For the second quarter as a whole, industrial Industrial production indexes Twelve-month percent change Twelve-month percent change 1988 1989 1990 1991 1992 1988 1993 1989 1990 1992 1991 1993 Capacity and industrial production Ratio scale, 1987 production = 100 Ratio scale, 1987 production = 100 — Total industry 140 Capacity - — Manufacturing Capacity 140 - 120 - Production 1 1 1 1 1 1 1 Production 80 1 1 1 1 1 1 1 1 1 1 1 1 80 1 1 Percent of capacity 1 1 1 Percent of capacity Manufacturing Total industry 90 90 Utilization Utilization J 1981 1983 120 100 100 1985 1987 80 80 70 70 L 1989 1991 1993 1981 1983 1985 All series are seasonally adjusted. Latest series, June. Capacity is an index of potential industrial production. 1987 1989 1991 1993 847 Industrial production and capacity utilization1 Industrial production, index, 1987=100 Percentage change Category 1993 1993: r Mar. r Apr. r May JuneP Tbtal 110.1 110.4 110.3 110.1 Previous estimate 110.1 110.2 110.4 109.5 109.5 108.3 134.4 95.9 109.4 107.9 134.7 96.9 Major market groups Products, total* Consumer goods ... Business equipment Construction supplies Materials Major industry groups Manufacturing Durable Nondurable Mining Utilities 108.6 133.4 96.4 110.9 110.8 114.1 106.6 95.3 117.8 111.6 111.3 114.8 107.0 96.4 115.0 111.6 109.1 107.1 134.9 96.3 111.6 111.2 114.7 106.9 96.9 114.9 110.8 114.3 106.6 96.3 116.4 r Mar. r r Apr. May Junef -.2 3.8 4.0 2.9 .3 -.1 .0 -.4 -.3 -.7 1.3 -1.1 1.1 .2 .0 .3 .3 .5 .2 .3 .6 -.6 1.2 .2 -2.4 .1 10.6 -.7 .0 -.1 2.9 3.5 -.1 -.3 -.4 -.3 -.7 1.3 4.0 -.1 -.1 .6 .0 1992 Total Manufacturing Advanced processing Primary processing .. Mining Utilities Low, 1982 High, 1988-89 1.3 -.8 5.8 1993 June Mar.r Apr.r Mayr Junep Capacity, percentage change, June 1992 to June 1993 81.9 71.8 84.8 79.5 81.6 81.7 81.5 81.2 1.6 81.2 80.7 82.2 87.4 86.7 70.0 71.4 66.8 80.6 76.2 85.1 83.3 89.1 87.0 92.6 78.6 77.0 82.2 86.3 83.9 80.6 79.3 83.8 85.3 89.0 80.9 79.5 84.2 86.4 86.8 80.7 79.2 84.1 86.9 86.7 80.3 78.8 83.8 86.4 87.8 1.8 2.2 .8 -.9 1.2 1. Data seasonally adjusted or calculated from seasonally adjusted monthly data. 2. Change from preceding month. production rose at a 1.9 percent annual rate, down from 5.5 percent in the first quarter. Utilization of total industrial capacity eased again in June, to 81.2 percent. When analyzed by market group, the data show that the output of consumer goods fell 0.7 percent; the bulk of the decline was in the production of consumer durables. Assemblies of both automobiles and light trucks were cut for a second month. Moreover, sizable drops in the output of appliances and room air conditioners contributed to a 1.5 percent decrease in the output of other durable consumer goods. The production of nondurable consumer goods declined for the third consecutive month. In June, reductions in the output of clothing, food, and automotive gasoline more than offset an increase in sales of residential electricity. The small gain in the production of business equipment reflected a continued increase in the 6.2 MEMO Capacity utilization, percent Average, 1967-92 June 1992 to June 1993 3. Contains components in addition to those shown, r Revised, p Preliminary. output of information-processing equipment that offset another drop in transit equipment. The production of defense and space equipment continued to contract and has fallen 9 percent in the past twelve months. Because of a sharp drop in lumber production, the output of construction supplies decreased 0.7 percent in June, after having risen more than 1 percent in May. Over the past two months, the production of both durable and nondurable materials has changed little, while the output of energy materials has fallen because of the widening coal strike. When analyzed by industry group, the data show that within manufacturing, output decreased 0.3 percent; capacity utilization slipped 0.4 percentage point, to 80.3 percent, which was about the same rate as in January and nearly 1 percentage point below the 1967-92 average. Utilization in advanced-processing industries declined to 848 Federal Reserve Bulletin • September 1993 78.8 percent in June, about 2 percentage points below its longer-run average. Although the operating rate for primary-processing industries also declined, it remained 1.6 percentage points above its longer-run average. The output of both durable and nondurable goods slackened in June. The weakness in durables was concentrated in motor vehicles, aircraft, and lumber. Motor vehicle output, which fell off after having held steady in the first part of 1993, remained well above its year-ago level. In contrast, aircraft output has fallen for nearly two years. Small declines were widespread among nondurable manufacturing industries in June, with only printing and publishing and chemicals increasing. The output at mines fell 0.7 percent, with the production cut in coal and other mining industries far exceeding a gain in the drilling of oil and gas wells. The output at utilities rose 1.3 percent. • 849 Statement to the Congress Statement by Alan Greenspan, Chairman, Board of Governors of the Federal Reserve System, before the Subcommittee on Economic Growth and Credit Formation of the Committee on Banking, Finance and Urban Affairs, U.S. House of Representatives, July 20, 1993 Thank you for this opportunity to discuss the Federal Reserve's semiannual monetary policy report to the Congress. 1 My remarks this morning will cover current monetary policy and economic settings as well as the Federal Reserve's longer-term strategy for contributing, to the best of its abilities, to the nation's economic wellbeing. As economic expansion has progressed somewhat fitfully, our earlier characterization of the economy as facing stiff headwinds has appeared increasingly appropriate. Doubtless the major headwind in this regard has been the combined efforts of households, businesses, and financial institutions to repair and rebuild their balance sheets after the damage inflicted in recent years as weakening asset values exposed excessive debt burdens. But there have been other headwinds as well. The builddown of national defense has cast a shadow over particular industries and regions of the nation. Spending on nonresidential real estate dropped dramatically in the face of overbuilding and high vacancy rates and has remained in the doldrums. At the same time, corporations across a wide range of industries have been making efforts to pare employment and expenses to improve productivity and their competitive positions. These efforts have been prompted, in part, by innovative technologies that have been applied to almost every area of economic endeavor and have boosted investment. However, their 1. See "Monetary Policy Report to the Congress," in this issue. effect on jobs and wages through much of the expansion has also made households more cautious spenders. In the past several years, as these influences have restrained the economy they have been balanced, in part, by the accommodative stance of monetary policy and, more recently, by declines in longer-term interest rates as the prospects for credible federal deficit cuts improved. From the time monetary policy began to move toward ease in 1989 until now, short-term interest rates have dropped more than two-thirds and long-term rates have also declined substantially. All along the maturity spectrum, interest rates have come down to their lowest levels in twenty or thirty years, aiding the repair of balance sheets, bolstering the cash flow of borrowers, and providing support for interest-sensitive spending. The process of easing monetary policy, however, had to be closely controlled, and generally gradual, because of the constraint imposed by the marketplace's acute sensitivity to inflation. As I pointed out in my February testimony to the Congress, this constraint did not exist in earlier years. Before the late 1970s, financial market participants and others apparently believed that although inflationary pressures might surface occasionally, the institutional structure of the U.S. economy simply would not permit sustained inflation. But as inflation and, consequently, longterm interest rates soared into the double digits at the end of the 1970s, investors became painfully aware that they had underestimated the economy's potential for inflation. As a result, monetary policy in recent years has had to remain alert to the possibility that an ill-timed easing could be undone by a flare-up of inflation expectations, pushing long-term interest rates higher and shortcircuiting essential balance sheet repair. The cumulative monetary easing over the past four years has been very substantial. Since last September, however, no further steps have been 850 Federal Reserve Bulletin • September 1993 taken, as the stance of policy has appeared broadly appropriate to the evolving economic circumstances. That stance has been quite accommodative, especially judging by the level of real short-term interest rates in the context of moderate economic growth, on average. Short-term real interest rates have been about zero over the past three quarters. In maintaining this accommodative stance, we have been persuaded by evidence of persistent slack in labor and product markets, increasing international competitiveness, and a decided absence of excessive credit and money expansion. The forces that engendered past inflationary episodes appear to have been lacking to date. Yet some of the readings on inflation earlier this year were disturbing. It appeared that prices might be accelerating despite product market slack and an unemployment rate that was noticeably above estimates of the so-called "natural" rate of unemployment—that is, the rate at which price pressures remain roughly constant. In the past, the existing degree of slack in the economy had been consistent with continuing disinflation. History tells us, however, the inflation outcome depends not only on the amount of slack remaining in labor and product markets but on other factors as well, including the rate at which that slack is changing. If the economy is growing rapidly, inflation pressures can arise, even in the face of excess capacity, as temporary bottlenecks emerge and as workers and producers raise wages and prices in anticipation of continued strengthening in demand. Near the end of last year, about the time many firms probably were finalizing their plans for 1993, sales and capacity utilization were moving up markedly and optimism about future economic activity surged. This optimism may well have set in motion a wave of price increases, which showed through to broad measures of prices earlier this year. Moreover, inflation expectations, at least by some measures, appear to have tilted upward this year, possibly contributing to price pressures. The University of Michigan survey of consumer attitudes, for example, reported an increase in the inflation rate that is expected to prevail over the next twelve months from about 3VA percent in the fourth quarter of last year to nearly 4Vi percent in the second quarter. Preliminary data imply some easing of such expectations earlier this month, but the sample from which those data are derived is too small to be persuasive. Moreover, the price of gold, which can broadly reflect inflationary expectations, has risen sharply in recent months. And at times this spring, bond yields spiked higher when incoming news about inflation was most discouraging. The role of expectations in the inflation process is crucial. Even expectations not validated by economic fundamentals can themselves add appreciably to wage and price pressures for a considerable period, potentially derailing the economy from its growth track. Why, for example, despite an above-normal rate of unemployment and permanent layoffs, have uncertainties about job security not led to further moderation in wage increases? The answer appears to lie, at least in part, in the deep-seated anticipations understandably harbored by workers that inflation is likely to reaccelerate in the near term and undercut their real wages. The Federal Open Market Committee (FOMC) became concerned that inflation expectations and price pressures, unless contained, could raise long-term interest rates and stall economic expansion. Consequently, at its meeting in May, while affirming the more accommodative policy stance in place since last September, the FOMC also deemed it appropriate to initiate a so-called asymmetric directive. With its bias in the direction of a possible firming of policy over the intermeeting period, this directive did not prejudge that action would be taken—and indeed none was taken. But it did indicate that further signs of a potential deterioration of the inflation outlook would merit serious consideration as to whether short-term rates needed to be raised slightly from their relatively low levels to ensure that financial conditions remained conducive to sustained growth. Certainly the May and June price figures have helped assuage concerns that new inflationary pressures had taken hold. Nonetheless, on balance, the news on inflation this year must be characterized as disappointing. Despite disinflationary forces and continued slack, the rate of Statement to the Congress inflation has at best stabilized, rather than easing further as past relationships would have suggested. In assessing the stance of monetary policy and the likelihood of persistent inflationary pressures, the FOMC took into account the downshift in the pace of economic expansion earlier this year. This downshift left considerable remaining slack in the economy and promised that the adverse price movements prompted by the acceleration in growth late last year would likely diminish. Although a slowdown from the unsustainably rapid growth in the latter part of last year had been anticipated, the deceleration was greater than expected. A surprisingly precipitous drop in defense spending, a sharp deterioration in net exports, a major blizzard, and some inevitable retrenchment by consumers converged to yield only meager gains in output in the first quarter. But growth apparently picked up in the second quarter, and nearly one million net new jobs were created over the first half of the year. Smoothing through the quarterly pattern, the economy appears to have accelerated gradually over the past two years, to maintain a pace of growth that should yield further reductions in the unemployment rate. Consequently, the evidence remains consistent with our diagnosis that the underlying forces at work are keeping the economy generally on a moderate upward track. However, as I have often emphasized, not all the old economic and financial verities have held in the current expansion, and changes in fiscal policy will have uncertain effects in the future. Thus, caution remains appropriate in assessing the path for the economy. Financial conditions have improved considerably, lessening the need for balance sheet restructuring that has been damping economic activity for several years. By no means is the process over, but good progress has been made. On the one hand, debt service burdens, eased by lower interest rates and lower debt-equity ratios, have fallen substantially in both the business and household sectors. On the other hand, the economies of several of our major trading partners have been quite weak, constraining the growth of demand for our exports. Although expectations of a significant, credible 851 decline in the budget deficit have induced lower long-term interest rates and favorably affected the economy, the positive influence thus far is apparently being at least partly offset by some business spending reductions as a consequence of concerns about the effects of pending tax increases. It seems that the prospective cuts in the deficit are having a variety of substantial economic effects, well in advance of any actual change in taxes or in projected outlays. Moreover, uncertainty about the final shape of the package may itself be injecting a note of caution into private spending plans. In addition, uncertainty about the outlook for health care reform may be affecting spending at least in that industry. To be sure, the conventional wisdom is that budget deficit reduction restrains economic growth for a time, and I suspect that is probably correct. However, over the long run, conventional wisdom points in the opposite direction. In fact, one can infer that recent declines in longterm interest rates are bringing forward some of these anticipated long-term gains. As a consequence, the timing and magnitude of any net restraint from deficit reduction are uncertain. Patently, the overall economic effect of fiscal policy, especially when combined with the uncertainties of the forthcoming health care reform package, has imparted several unconventional unknowns to the economic outlook. However, assuming that we constructively resolve over time the major questions about federal budget and health care policies, with further waning of earlier restraints on growth the U.S. economy should eventually emerge healthier and more vibrant than in decades. The balance sheet restructuring of both financial and nonfinancial establishments in recent years should leave the various sectors of the economy in much better shape and better able to weather untoward developments. Similarly, the ongoing efforts by corporations to pare expenses are putting our firms and our industries in a better position to compete both within the U.S. market and globally. And after a period of some dislocation the contraction in the defense sector will ultimately mean a freeing-up of resources for more productive uses. Finally, a credible and effective fiscal package would promise an improved outlook for 852 Federal Reserve Bulletin • September 1993 sustained lower long-term interest rates and a better environment for private sector investment. All told, the productive capacity of the economy will doubtless be higher and its resilience greater. Over the past two years, the forces of restraint on the economy have changed, but real growth has continued, with one sector of the economy after another taking the lead. Against this background, Federal Reserve Board governors and Reserve Bank presidents project that the U.S. economy will remain on the moderate growth path it has been following as the expansion has progressed. Their forecasts for real GDP average about 2Vi percent from the fourth quarter of 1992 to the fourth quarter of 1993 and cluster around 21/2 percent to 3lA percent over the four quarters of 1994. Reflecting this moderate rise and the outlook for labor productivity, unemployment is generally expected to edge lower, to about 63A percent by the end of this year and to perhaps a shade lower by the end of next year. For this year as a whole, FOMC participants see inflation at or just above 3 percent, and most of them have about the same forecast for next year. Besides focusing on the outlook for the economy at its July meeting, the FOMC, as required by the Humphrey-Hawkins Act, set ranges for the growth of money and debt for this year and, on a preliminary basis, for 1994. One premise of the discussion of the ranges was that the uncharacteristically slow growth of the broad monetary aggregates in the past couple years—and the atypical increases in their velocities—would persist for a while longer. M2 has been far weaker than income and interest rates would have predicted. Indeed, if the historical relationships between M2 and nominal income had remained intact, the behavior of M2 in recent years would have been consistent with that of an economy in severe contraction. To an important degree, the behavior of M2 has reflected structural changes in the financial sector: The thrift industry has downsized by necessity, and commercial banks have pulled back as well, largely reflecting the burgeoning loan losses that followed the lax lending of earlier years. With depository credit weak, there has been little bidding for deposits, and depositors in any case have been drawn to the higher returns on capital market instruments. Inflows to bond and stock mutual funds have reached record levels, and, to the extent that these inflows have come at the expense of growth in deposits or money market mutual funds, the broad monetary aggregates have been depressed. In this context, the FOMC lowered the 1993 ranges for M2 and M3—to 1 percent to 5 percent and 0 percent to 4 percent respectively. This lowering represents a reduction of 1 percentage point in the M2 range and Vi percentage point for M3. Even with these reductions, we would not be surprised to see the monetary aggregates finish the year near the lower ends of their ranges. As I emphasized in a similar context in February, the lowering of the ranges is purely a technical matter; it does not indicate, nor should it be perceived as, a shift of monetary policy toward restraint. It is indicative merely of (1) the state of our knowledge about the factors depressing the growth of the aggregates relative to spending, (2) the course of the aggregates to date, and (3) the likelihood of various outcomes through the end of the year. Although the lowering of the range reflects our judgment that shifts out of M2 will persist, the upper end of the revised range allows for a resumption of more normal behavior or even some unwinding of M2 shortfalls. The FOMC also lowered the 1993 range for debt of the domestic nonfinancial sectors Vi percentage point, to 4 percent to 8 percent. The debt aggregate is likely to come in comfortably within its new range, as it continues growing about in line with nominal GDP. The new ranges for growth of money and debt in 1993 were carried over on a preliminary basis into 1994. In reading the longer-run intentions of the FOMC, one should interpret the specific ranges cautiously. The historical relationships between money and income and between money and the price level have largely broken down, depriving the aggregates of much of their usefulness as guides to policy. At least for the time being, M2 has been downgraded as a reliable indicator of financial conditions in the economy, and no single variable has yet been identified to take its place. At one time, M2 was useful both to guide Federal Reserve policy and to communicate the thrust of monetary policy to others. Even then, Statement to the Congress however, a wide range of data was routinely evaluated to assure ourselves that M2 was capturing the important elements in the financial system that would affect the economy. The FOMC never single-mindedly adhered to a narrow path for M2, but persistent and sizable deviations of that aggregate from expectations were a warning sign that policy and the economy might not be interacting in a way that would produce the desired results. The so-called " P - s t a r " model, developed in the late 1980s, embodied a long-run relationship between M2 and prices that could anchor policy over extended periods of time. But that long-run relationship also seems to have broken down with the persistent rise in M2 velocity. M2 and P-star may reemerge as reliable indicators of income and prices once (1) the yield curve has returned to a more normal configuration, (2) borrowers' balance sheets have been restored and traditional credit demands resume, (3) savers have adjusted to the enhanced availability of alternative investments, and (4) depositories finally have reached a comfortable size relative to their capital and earnings. In the meantime, the process of probing a variety of data to ascertain underlying economic and financial conditions has become even more essential to formulating sound monetary policy. This general approach obviously has its weaknesses. When one examines many indicators, one can always find some that counsel against actions that later appear to have been necessary. In these circumstances, it is especially prudent to focus on longer-term policy guides. One important guidepost is real interest rates, which have a key bearing on longer-run spending decisions and inflation prospects. In assessing real rates, the central issue is their relationship to an equilibrium interest rate, specifically the real rate level that, if maintained, would keep the economy at its production potential over time. Rates persisting above that level, history tells us, tend to be associated with slack, disinflation, and economic stagnation, and rates below that level tend to be associated with eventual resource bottlenecks and rising inflation, which ultimately engender economic contraction. Maintaining the real rate around its equilibrium level should have a stabilizing effect on the 853 economy, directing production toward its longterm potential. The level of the equilibrium real rate—or more appropriately the equilibrium term structure of real rates—cannot be estimated with a great deal of confidence, though it can be estimated with enough confidence to be useful for monetary policy. Real rates, of course, are not directly observable but must be inferred from nominal interest rates and estimates of inflation expectations. The most important real rates for private spending decisions almost surely are the longer maturities. Moreover, the equilibrium rate structure responds to the ebb and flow of underlying forces affecting spending. So, for example, in recent years the appropriate real rate structure doubtless has been depressed by the headwinds of balance sheet restructuring and fiscal retrenchment. Despite the uncertainties about the levels of equilibrium and actual real interest rates, rough judgments about these variables can be made and used in conjunction with other indicators in the monetary policy process. Currently, short-term real rates, most directly affected by the Federal Reserve, are not far from zero; long-term rates, set primarily by the market, are appreciably higher, judging from the steep slope of the yield curve and reasonable suppositions about inflation expectations. This configuration indicates that market participants anticipate that short-term real rates will have to rise as the headwinds diminish if substantial inflationary imbalances are to be avoided. Although our guides for policy may have changed recently, our goals have not. As I have indicated many times to this committee, the Federal Reserve seeks to foster maximum sustainable economic growth and rising standards of living. And in that endeavor, the most productive function the central bank can perform is to achieve and maintain price stability. Inflation is counterproductive in many ways. Of particular importance, increased inflation has been found to be associated with reduced growth of productivity, apparently in part because it confounds relative price movements and obscures price signals. Compounding this negative effect, under the current tax code, inflation raises the effective taxation of savings and investment, discouraging the process of capital formation. 854 Federal Reserve Bulletin • September 1993 Because productivity growth is the only source of lasting increases in real incomes and because even small changes in growth rates of productivity can accumulate over time to large differences in living standards, productivity growth's association with inflation is of key importance to policymakers. The link between the control of inflation and the growth of productivity underscores the importance of providing a stable backdrop for the economy. Such an environment is especially important for an increasingly dynamic market economy, such as ours, in which technology and telecommunications are advancing rapidly. New firms, new products, new jobs, new industries, and new markets are continually being created, and they are unceremoniously displacing the old ones. The U.S. economy is a dynamic system that is always renewing itself. It is extraordinary that the system overall is as stable as it is, considering the persistent process of change in the structure of our economy. For example, a frequently cited figure is the two million new jobs that have been created since the end of 1991. This is a net change, however, which masks the many millions of people who found, lost, and changed jobs over the same period. Currently, people are being hired at a pace of approximately 400,000 per week, while job losses are running modestly below that figure. Such vast churning in the nation's labor markets is a normal and ultimately a productive process. Central planning of the type that prevailed in postwar Eastern Europe and the Soviet Union represented one attempt to fashion an economic system that eliminated this competitive churning and its presumed wastefulness. But when that system eliminated the risk of failure, it also stifled the incentive to innovate and to prosper. Central planning fostered stasis: In many respects, the eastern bloc economies marched in place for more than four decades. Risk-taking is crucial in the process that leads to a vital and progressive economy. Indeed, it is a necessary condition for wealth creation. In a market economy, competition and innovation interact; those firms that are slow to innovate or to anticipate the demands of the consumer are soon left behind. The pace of churning differs by industry, but it is present in all. At one extreme, firms in the most high tech areas must remain constantly on the cutting edge, as products and knowledge rapidly become obsolete. Many products that were at technology's leading edge, say five years ago, are virtually unsalable in today's markets. In high tech fields, leadership can shift rapidly. In some markets in which American firms were losing share just a few years ago, we have regained considerable dominance. In one case, U.S. firms have seized a commanding lead in just two years in the new laptop computer market, and now these firms account for more than 60 percent of U.S. sales last year, triple the figure for Japanese firms. More generally, it appears that the pace of dynamism has been accelerating. One indication is that the average economic life expectancy of new capital equipment has been falling. The average life of equipment purchased in 1982, for example, was I6V2 years. By 1992 that figure had declined to W/2 years, a decline more than twice as large as that over the preceding decade. In addition, telecommunications technology is obviously quickening the decisionmaking process in both financial and product markets. In such a rapidly changing marketplace, the agile survive by being flexible. One aspect of this flexibility has been the spread of "just-in-time" inventory controls at manufacturing firms. Partly as a result of innovations in inventory control techniques, the variability of inventories relative to total output appears to be on a downtrend. The possibility of failure has productive side effects, encouraging economic agents to do their best to succeed. But there are nonproductive and unnecessary risks as well. There is no way to avoid risk altogether, given the inherently uncertain outcomes of all business and household decisions. But many uncertainties and risks do not foster economic progress, and when feasible should be suppressed. A crucial risk in this category is that induced by inflation. To allow a market economy to attain its potential, the unnecessary instability engendered by inflation must be quieted. A monetary policy that aims at price stability permits low long-term interest rates and helps provide a stable setting to foster the investment and innovation by the private sector that are key to long-run economic growth. In pursuing our Statement to the Congress objectives, we must remain acutely aware that the structure of the economy has been changing and growing ever more complex. The relationships between the key variables in the economy are always shifting to a degree, and this evolution presents an ongoing challenge to the business leader, to the econometric modeler, and to those responsible for the conduct of economic policy. Clearly, the behavior of many of the forces acting on the economy over the course of the last business cycle has been different from what had gone before. The sensitivity of inflation expectations has been heightened, and, as recent evidence suggests, businesses and households may be becoming more forward-looking with respect to fiscal policies as well. I believe we are on our way toward reestablishing the trust in the purchasing power of the dollar that is crucial to maximizing and fulfilling the productive capacity of this nation. However, the public clearly remains to be convinced. Survey responses and financial market prices embody expectations that the current lower level of inflation not only will not be bettered, but it will not even persist. But there are glimmers of hope that trust is reemerging. For example, issuers have found receptive markets in recent months for fifty-year bonds. This had not happened in decades. The reopening of that market may be read as one indication that some investors once again believe that inflationary pressures will remain subdued. It is my firm belief that, with fiscal consolidation and with the monetary policy path that we have charted, the United States is well positioned to remain at the forefront of the world economy well into the next century. • Chairman Greenspan presented identical testimony before the Committee on Banking, and Urban Affairs, U.S. Senate, July 22, 1993. 855 Housing, 856 Announcements APPOINTMENT OF NEW PRESIDENT OF THE FEDERAL RESERVE BANK OF NEW YORK The Federal Reserve Bank of New York announced on July 16, 1993, that William J. McDonough, who had been Executive Vice President at that Bank, had been appointed President, effective July 19, 1993. Mr. McDonough will succeed E. Gerald Corrigan, who retired. Mr. McDonough, fifty-nine, had been Executive Vice President of the New York Reserve Bank's financial markets group and the manager of open market operations for the Federal Reserve System's Federal Open Market Committee. He was chosen as the New York Federal Reserve Bank's eighth chief executive by the Bank's board of directors, and his appointment was confirmed on July 16, 1993, by the Federal Reserve's Board of Governors. He joined the Bank in January 1992, after a twenty-two-year career at First Chicago Corp. and its bank, First National Bank of Chicago. He retired from First Chicago in 1989 as vice chairman of the board and a director of the bank holding company. Mr. Corrigan announced his retirement plans in January. He had been president of the Federal Reserve Bank of New York since January 1985. ACTIONS TO EASE FINANCIAL STRESS IN AREAS IN THE MIDWEST AFFECTED BY FLOODING The Federal Reserve Board announced on July 23, 1993, a series of steps designed to help ease financial stress in areas affected by flooding in the Midwest. A supervisory statement adopted by the Board encourages financial institutions to work constructively with borrowers who are experiencing difficulty because of the flooding. The statement says that banks may find it appropriate to ease credit terms to help new borrowers restore their financial strength, consistent with prudent banking practices, and to restructure debt or extend repayment terms for existing borrowers. The Board also waived appraisal regulations for real estate related transactions affected by the flooding, and temporarily amended its Regulation Z (Truth in Lending) to provide relief under waiver rules so that borrowers may gain ready access to loan funds when they use their primary dwelling as collateral for a loan. Under the right of rescission, a borrower normally has three business days to cancel a loan contract when it is secured by the borrowers's principal dwelling. ERRATUM: BULLETIN TABLE 1.27 The second part of table 1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," on page A23 of the August issue of the Bulletin was printed incorrectly. The previous month's data, for the period March 3, 1993, through April 28, 1993, were printed instead of the current data for that issue. The correct data, for the period March 31, 1993, through May 26, 1993, are shown opposite, on page 857. AVAILABILITY OF REVISED LISTS OF OTC MARGIN STOCKS AND OF FOREIGN MARGIN STOCKS The Federal Reserve Board published on July 23, 1993, a revised list of over-the-counter (OTC) stocks that are subject to its margin regulations. It also published the List of Foreign Margin Stocks for foreign equity securities that met the criteria in Regulation T (Credit by Brokers and Dealers). The lists are effective August 9,1993, and supersede the previous lists that were effective May 10, 1993. 857 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, W e d n e s d a y figures 1993 Account Mar. 31 R Apr. 7 Apr. 14 Apr. 21 Apr. 28F May 5 May 12 May 19 May 26 LIABILITIES 46 Deposits 47 Demand deposits 48 Individuals, partnerships, and corporations 49 Other holders 50 States and political subdivisions 51 U.S. government 52 Depository institutions in the United States . . . 53 Banks in foreign countries 54 Foreign governments and official institutions . . 55 Certified and officers' cheeks 56 Transaction balances other than demand deposits 4 . 57 Nontransaction balances 58 Individuals, partnerships, and corporations 59 Other holders 60 States and political subdivisions 61 U.S. government 62 Depository institutions in the United States . . . 63 Foreign governments, official institutions, and banks . 64 Liabilities for borrowed money 5 65 Borrowings from Federal Reserve Banks 66 Treasury tax and loan notes , 67 Other liabilities for borrowed money 68 Other liabilities (including subordinated notes and debentures) 69 Total liabilities 70 Residual (total assets less total liabilities) 7 1,102,691 268,659 221,814 46,845 8.891 2,347 20,348 5,083 712 9,463 119,220 714,812 692,241 22,571 20,151 487 1,597 336 1,118,220' 269,695' 221,337' 48,358 8,371 2,048 22,061 4,929 1,177 9,772 122,088 726,437 702,918' 23,519' 20,513' 492 2,183' 332 1,126,069' 279,838' 230,158' 49,680 8,727 3,343 21,916 4,962 687 10,046 122,233 723,997 700,707' 23,290' 20,251' 495 2,208' 336 1,095,355' 260,032' 211,797R 48,234' 8,997 3,590 21,496' 4,884 646 8,622 118,945 716,378 691,264' 25,114' 20,349' 2,199 2,232' 333 1,101,564 272,144 220,729 51,416 9,214 2,737 23,068 4,821 613 10,963 114,964 714,456 689,728 24,728 20,474 1,603 2,318 332 1,121,688 276,890 225,521 51,370 10,049 2,130 23,008 5,639 652 9,891 119,701 725,097 699,585 25,512 20,750 2,200 2,229 333 1,113,730 271,034 222,326 48,708 8,652 1,795 21,980 5,163 615 10,502 117,197 725,499 699,430 26,070 21,364 2,206 2,159 341 1,099,404 263,571 215,697 47,874 9,093 1,879 21,115 5,191 749 9,847 116,916 718,918 692,816 26,101 21,399 2,211 2,152 339 1,102,585 269,154 218,244 50,910 8,925 2,162 22,006 5,591 631 11,596 116,411 717,021 690,682 26,339 21,539 2,270 2,191 339 282,295 707 11,625 269,963 278,080' 0 2,830 275,249' 282,550' 0 278,178' 292,849' 0 28,877 263,972' 287,695 0 22,358 265,337 280,649 0 16,196 264,453 287,083 0 12,268 274,815 288,744 0 14,392 274,353 292,143 0 12,777 279,366 112,144 103,572' 103,633' 101,848' 105,371 106,865 109,332 104,660 109,029 1,499,871' 1,512,252' l,490,053 r 1,494,630 1,509,202 1,510,146 1,492,808 1,503,757 1,497,130 1,312' 145,015 145,298' 146,488' 146,918' 146,173 146,512 147,236 147,289 146,831 1,338,668 103,994 869 447 422 23,225 -12,368 1,348,529' 108,547' 876 447 429 23,227 -13,190' 1,350,364' 108,300' 875 447 429 23,321 -16,201R 1,347,422' 109,310' 875 447 429 23,464 -12,016 1,345,002 107,956 872 443 428 23,333 -8,995 1,357,422 109,578 871 442 428 23,298 -11,242 1,355,028 109,150 867 438 428 23,479 -8,661 1,352,960 107,904 866 437 428 23,182 -13,626 1,346,336 107,577 864 437 426 23,051 -9,699 MEMO 71 72 73 74 75 76 77 Total loans and leases, gross, adjusted, plus securities 1 Time deposits in amounts of $100,000 or more Loans sold outright to affiliates Commercial and industrial Other Foreign branch credit extended to U.S. residents . . . Net due to related institutions abroad 1. Includes ccrtificatcs of participation, issued or guaranteed by agendas of the U.S. government, in pools of residential mortgages. 2. Includes securities purchased under agreements to resell. 3. Includes allocated transfer risk reserve. 4. Includes negotiable order of withdrawal accounts (NOWs), automatic transfer service (ATS), and telephone and preauthorized transfers of savings deposits. 5. Includes borrowings only from other than directly related institutions. 6. Includes federal funds purchased and securities sold under agreements to repurchase. 7. This balancing item is not intended as a measure of equity capital for use in capital-adcquacy analysis. S. Excludes loans to and federal funds transactions with commercial banks in the United States. 9. Affiliates includc a bank's own foreign branches, nonconsolidatcd nonbank affiliates of the bank, the bank's holding company (if not a bank), and nonconsolidatcd nonbank subsidiaries of the holding company. 10. Credit extended by foreign branches of domestically chartered weekly reporting banks to nonbank U.S. residents. Consists mainly of commercial and industrial loans, but includes an unknown amount of credit extended to other than nonfinancial businesses. NOTE. Data that formerly appeared in table 1.28, Assets and Liabilities of Large Weekly Reporting Commercial Banks in New York City, can be obtained from the Board s H.4.2 (504) weekly statistical release. For ordering address, see inside front covcr. The Foreign List specifies those foreign equity securities that are eligible for margin treatment at broker-dealers. One security was deleted from the Foreign List, which now contains 300 foreign equity securities, and no additions were made. The changes that have been made to the revised OTC List, which now contains 3,388 OTC stocks, are as follows: • Thirty-two stocks have been removed for reasons such as listing on a national securities exchange or involvement in an acquisition. • One hundred ninety-one stocks have been included for the first time, 150 under National Market System (NMS) designation • Thirty stocks previously on the list have been removed for substantially failing to meet the requirements for continued listing The Board publishes the OTC List 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 OTC 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 publica- 858 Federal Reserve Bulletin • September 1993 tion of the Board's list is scheduled for October 1993. 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 OTC List. • 859 Minutes of the Federal Open Market Committee Meeting of May 18,1993 A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, May 18, 1993, at 9:00 a.m. Present: Mr. Greenspan, Chairman Mr. Corrigan, Vice Chairman Mr. Angell Mr. Boehne Mr. Keehn Mr. Kelley Mr. LaWare Mr. Lindsey Mr. McTeer Mr. Mullins Ms. Phillips Mr. Stern Messrs. Broaddus, Jordan, Forrestal, and Parry, Alternate Members of the Federal Open Market Committee Messrs. Hoenig, Melzer, and Syron, Presidents of the Federal Reserve Banks of Kansas City, St. Louis, and Boston respectively Mr. Bernard, Deputy Secretary Mr. Coyne, Assistant Secretary Mr. Gillum, Assistant Secretary Mr. Mattingly, General Counsel Mr. Prell, Economist Messrs. R. Davis, Lang, Lindsey, Promisel, Rolnick, Rosenblum, Scheld, Siegman, and Slifman, Associate Economists Mr. McDonough, Manager of the System Open Market Account Ms. Greene, Deputy Manager for Foreign Operations Ms. Lovett, Deputy Manager for Domestic Operations Mr. Ettin, Deputy Director, Division of Research and Statistics, Board of Governors Mr. Madigan, Associate Director, Division of Monetary Affairs, Board of Governors Mr. Stockton, Associate Director, Division of Research and Statistics, Board of Governors Mr. Hooper, Assistant Director, Division of International Finance, Board of Governors Mr. Small,1 Section Chief, Division of Monetary Affairs, Board of Governors Ms. Low, Open Market Secretariat Assistant, Division of Monetary Affairs, Board of Governors Messrs. T. Davis, Dewald, and Goodfriend, Senior Vice Presidents, Federal Reserve Banks of Kansas City, St. Louis, and Richmond respectively Ms. Browne, Mr. Judd, and Mses. Rosenbaum and White, Vice Presidents, Federal Reserve Banks of Boston, San Francisco, Atlanta, and New York respectively Mr. Eberts, Assistant Vice President, Federal Reserve Bank of Cleveland By unanimous vote, the minutes for the meeting of the Federal Open Market Committee held on March 23, 1993, were approved. The Deputy Manager for Foreign Operations reported on developments in foreign exchange markets and on System transactions in foreign currencies during the period March 23, 1993, through May 17, 1993. By unanimous vote, the Committee ratified these transactions. The M a n a g e r of the System Open M a r k e t Account reported on developments in domestic 1. Attended portion of meeting relating to a report on a study entitled "Operating Procedures and the Conduct of Monetary Policy: Conference Proceedings," edited by Marvin Goodfriend and David Small. This two-volume study has been designated Working Studies 1, Parts 1 and 2, of the Federal Reserve Board's Finance and Economic Discussion Series. 860 Federal Reserve Bulletin • September 1993 financial markets and on System open market transactions in government securities and federal agency obligations during the period March 23, 1993, through May 17, 1993. By unanimous vote, the Committee ratified these transactions. The Committee then turned to a discussion of the economic outlook and the implementation of monetary policy over the intermeeting period ahead. A summary of the economic and financial information available at the time of the meeting and of the Committee's discussion is provided below, followed by the domestic policy directive that was approved by the Committee and issued to the Federal Reserve Bank of New York. The information reviewed at this meeting suggested that the pace of the economic expansion had slowed in recent months. Business outlays for durable equipment had remained strong, but consumer spending had been quite sluggish, reflecting limited gains in employment and real labor income and diminished optimism about near-term economic prospects. Additionally, U.S. exports continued to be constrained by the disappointing performance of the major foreign industrial economies. Available data indicated relatively modest growth in payroll employment and industrial production over recent months. Despite the considerable slack in the economy, increases in wages and prices had been appreciably larger thus far in 1993 than in the second half of last year. Total nonfarm payroll employment rose only slightly on balance over March and April after registering sizable increases in the first two months of the year. Strong job gains in the services industry, notably in business and health services, were offset in considerable measure by job losses in manufacturing and construction in March and April. In manufacturing, reductions in payrolls were widespread, with particularly large declines at manufacturers of transportation equipment. Construction employment recovered only partially in April from the weather-related decline in March. The civilian unemployment rate remained at 7.0 percent. Industrial production, after having posted solid gains in previous months, was little changed in March and April. Part of the recent sluggishness reflected a decline in utility output following a weather-related runup in February, but manufacturing output also grew more slowly. In the transporta- tion industry, motor vehicle assemblies edged down and production of civilian aircraft remained weak over March and April. Elsewhere, the output of consumer goods other than motor vehicles was about unchanged, and the continuing strength in the computer industry contrasted with sluggish production of other types of business equipment. Total utilization of industrial capacity changed little over the two months. Retail sales increased substantially in April, reversing the weather-related decline in March; automotive dealers reported large sales gains in April, and expenditures at other retail outlets retraced part of the March decrease. For the year to date, however, retail sales had been lackluster after the strong increases of the latter part of 1992. Housing starts picked up in April; both singlefamily and multifamily starts rebounded from weather-depressed March levels. Business fixed investment advanced further during the first quarter of 1993, with another sizable rise in outlays for equipment outweighing continued weakness in nonresidential construction. Shipments of nondefense capital goods during the first quarter were paced by another sharp increase in shipments of office and computing equipment. By contrast, business spending for transportation equipment generally exhibited little strength; although sales of heavy trucks continued to trend up, outlays for complete aircraft apparently edged down further. Recent data on orders for nondefense capital goods other than aircraft suggested further expansion in business spending for equipment in the near term. Nonresidential construction activity was mixed in the first quarter. Office construction declined considerably further in response to the depressing effects of a continuing overhang of unoccupied space. On the other hand, building activity in the public utilities sector continued to trend up, and the construction of commercial structures other than office buildings increased for a second consecutive quarter. Business inventories appeared to have risen in the first quarter. Manufacturing inventories expanded in both February and March after a series of declines that began early in the fall; much of the recent advance occurred in the durable goods sector, where shipments were strong, and the ratio of inventories to shipments fell for manufacturing as a whole. Wholesale inventories increased apprecia- Minutes of the Federal Open Market Committee Meeting bly in March. However, the inventory-to-sales ratio for the sector moved up only slightly, and it remained near the low end of its range over the past two years. In the retail sector, available data indicated that inventories rose appreciably over January and February but that the inventory-to-sales ratio remained in the narrow range that had prevailed over the preceding year. The nominal U.S. merchandise trade deficit in February was unchanged from its January level, reflecting little change in total exports and total imports. For January-February combined, however, the trade deficit was slightly below its average level for the fourth quarter, with both exports and imports down considerably from their fourthquarter levels. Much of the drop in exports reflected a reversal of an earlier, largely transitory runup in aircraft and automotive products. The decline in imports was spread across all major trade categories; imports of aircraft and miscellaneous industrial supplies dropped appreciably, and imports of consumer goods fell further. Recent indicators pointed to further weakness in economic activity in continental Europe and Japan through the first quarter. Elsewhere, the recovery in the United Kingdom appeared to be firming, and growth continued at a modest pace in Canada. Producer prices of finished goods rose more rapidly in March and April, partly as a result of sharp increases in the prices of finished energy goods in March and in the prices of finished foods in April. Excluding the food and energy components, producer prices advanced over the first four months of 1993 at a faster pace than in 1992. At the consumer level, the increase in prices of nonfood, non-energy items over the March-April period was smaller than the outsized change over the first two months of the year; nevertheless, averaging over the first four months of the year, the rate of increase in consumer prices was higher than in 1992. The deceleration of labor costs also appeared to have stalled in 1993. Average hourly earnings of production or nonsupervisory workers had grown more rapidly thus far this year than in 1992, and total hourly compensation of private industry workers rose at a faster pace in the first quarter of 1993 than in any quarter of last year. At its meeting on March 23, the Committee adopted a directive that called for maintaining the existing degree of pressure on reserve positions and 861 that did not include a presumption about the likely direction of any adjustments to policy during the intermeeting period. Accordingly, the directive indicated that in the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, slightly greater reserve restraint or slightly lesser reserve restraint would be acceptable during the intermeeting period. The reserve conditions associated with this directive were expected to be consistent with a resumption of moderate growth in M2 and M3 over the second quarter. Open market operations during the intermeeting period were directed toward maintaining the existing degree of pressure on reserve positions. Expected levels of adjustment plus seasonal borrowing were raised during the period in anticipation of some increase in seasonal borrowing. Adjustment plus seasonal borrowing was near or a little above expected levels, except for a surge at the end of the first quarter, and the federal funds rate remained close to the 3 percent level that had prevailed for an extended period. Short-term interest rates changed little over the period since the March meeting. Long-term rates rose considerably early in the period when a sharp increase in average hourly earnings and some upward pressure on commodity prices sparked fears among market participants of a buildup in inflation pressures. Subsequently, despite growing doubts about the fate of the deficit reduction program, bond yields declined in response to a series of more favorable readings on price behavior and to indications of a slowing of the economic expansion. Adverse news about consumer and producer prices rekindled inflation concerns late in the period, and bond rates once again moved higher. On balance, most long-term market rates rose somewhat over the period. Despite unexpectedly favorable earnings reports for many firms, major indexes of stock prices were narrowly mixed over the period. In foreign exchange markets, the trade-weighted value of the dollar in terms of the other G-10 currencies declined somewhat on balance over the intermeeting period. The dollar depreciated considerably more against the Japanese yen than against the German mark. A variety of factors contributed to the dollar's weakness, including indications of 862 Federal Reserve Bulletin • September 1993 renewed sluggishness in U.S. economic activity, diminished prospects for a fiscal stimulus package, and market perceptions over much of the intermeeting period of limited official support for concerted actions to support the dollar against the yen. After falling to a historical low against the yen in late April, the dollar tended to stabilize following Treasury Secretary Bentsen's clarification of the Administration's exchange rate policy and intervention purchases of dollars against yen in a coordinated operation. Later in the period, the dollar rose somewhat against European currencies as the outlook for economic activity in Europe became more pessimistic. M2 contracted slightly on balance over March and April, while M3 was unchanged over the two months; both monetary aggregates increased substantially in early May. Much of the weakness in M2 over the March-April period owed to a smaller volume of nonwithheld tax payments in April of this year that reduced the need for a buildup in deposits to fund these payments. Abstracting from this temporary depressant, weak underlying growth in M2 continued to reflect the relatively attractive returns available on capital market instruments such as bond and stock mutual funds, which experienced heavy inflows during the two-month period. Total domestic nonfinancial debt expanded somewhat further through March. The staff projection prepared for this meeting suggested that economic activity would grow at a moderate pace and that such growth would foster a gradual reduction in margins of unemployed labor and capital. The projection continued to incorporate the essential elements of the Administration's fiscal package, excluding that portion of the shortrun stimulus initiative that seemed unlikely to be enacted by the Congress. Although the outlook for fiscal policy now seemed somewhat more contractionary than earlier, the sizable declines in longterm interest rates that had occurred in recent months were expected to support substantial additional gains in business and residential investment. Moreover, the increasingly favorable financial environment associated with expected further easing of credit supply constraints and the ongoing strengthening of balance sheets would tend to buttress private spending on housing, consumer durables, and business equipment. Increases in export demand would be damped in the near term by the continuing weakness in the economies of the major industrialized countries. The persisting slack in resource utilization was expected to be associated with a return to more subdued price increases after a spurt earlier in the year. In the Committee's discussion of current and prospective economic conditions, the members focused with some concern on the evidence of a slower economic expansion and a higher rate of inflation since late 1992. While recent indicators of economic activity were disappointing, the expansion nonetheless appeared to have sustainable momentum and the members generally viewed moderate growth in line with, or perhaps a bit below, their February forecasts as a reasonable expectation. At the same time, several emphasized that the outlook was subject to substantial uncertainty stemming to an important extent from the unsettled course of legislation aimed at reducing the federal deficit. Members expressed particular concern about the rise in various measures of inflation over the past several months. The increase seemed to reflect temporary factors and a worsening in inflationary expectations rather than any significant change in economic fundamentals. Accordingly, it was premature in the view of many members to conclude that the inflationary trend had tilted upward. Even so, higher inflation expectations, if sustained, would be detrimental to economic performance, and the risks of an uptrend in inflation clearly had increased. In their review of business developments across the nation, members continued to report uneven conditions ranging from apparently moderate gains in some parts of the country to mixed or marginally declining activity in others. Business confidence had deteriorated in many areas and firms were trimming or putting on hold new or expanded spending programs pending a resolution of federal tax and spending proposals, including prospective health care reform, and the outcome of proposed tax legislation in some states as well. Cautious business attitudes were reflected in continuing efforts to constrain costs and to hold down or reduce employment levels, notably of permanent workers in light of the large nonwage costs associated with full-time workers. Accordingly, while some job growth was occurring, especially outside major firms and the defense sector, business firms generally appeared disposed to continue to meet Minutes of the Federal Open Market Committee Meeting increases in demand through overtime work and temporary workers, and members anticipated that such attitudes were likely to persist in the absence of a major improvement in business confidence. As reflected in the available data for the national economy, anecdotal reports from around the country suggested generally lackluster retail sales over the first four months of the year. To an extent, this development probably involved some retrenchment in consumer spending following an unsustainable surge during the latter part of 1992. In some parts of the country, unusually severe weather conditions also had served to hold down retail sales earlier this year, and recovery from that slowdown had tended to be limited thus far, especially outside the automotive sector. Looking ahead, the members continued to anticipate that consumer spending would provide moderate support for a sustained economic expansion. Despite the cautious business attitudes about the economic outlook, spending for business equipment had continued to help maintain the expansion. Encouraged in part by relatively low interest rates, receptive financial markets, and the more aggressive lending policies of some depository institutions, many firms were upgrading equipment to reduce costs and improve their product offerings. Concurrently, however, numerous firms reported that they were holding off on making major new investment commitments and in some cases were revising down earlier expansion plans in light of prevailing economic uncertainties, notably those generated by the current legislative debate about federal taxes and spending. Nonresidential construction remained uneven and on the whole relatively subdued across the nation. The construction of new office structures was likely to stay depressed in much of the country as overcapacity continued to be worked down, but members saw indications of some strengthening in industrial and commercial building activity and in public works projects in some areas. Turning to the outlook for the nation's trade balance, some members referred to quite gloomy assessments from business contacts and other sources regarding current economic conditions in a number of major industrial nations and the associated prospect of little or no growth in U.S. exports to such countries. While total U.S. exports might continue to expand, reflecting sizable gains in some 863 parts of the world, imports probably would grow at a somewhat faster pace, given moderate expansion in domestic demand in line with the members' expectations. At the same time, members expressed concern about the potential impact of growing protectionist sentiment on current trade negotiations and on the longer-run outlook for domestic industries and parts of the country that relied on foreign trade. With regard to the inflation situation, members commented that it remained difficult to find a satisfactory explanation for the faster-than-projected increases in price measures thus far this year. Although temporary anomalies seemed to be involved, including measurement problems and special factors boosting some prices, higher inflation expectations also might have been playing a key role. The latter seemed to have intensified in the last month or two, perhaps as a result of growing concerns that significant deficit-reduction legislation might not be enacted. Strong competitive pressures in many markets, including competition from foreign producers, still appeared to be restraining or precluding price increases by many business firms, but efforts to raise prices seemed to be encountering somewhat less resistance recently than earlier in the economic expansion. Some price increases appeared to be associated with the earlier surge in demand, and in the case of one key industry higher prices had been facilitated by the implementation of import restrictions. The downtrend in labor compensation inflation also seemed to have stalled in recent months. Against this background, a considerable degree of uncertainty surrounded the outlook for inflation and the members differed to some extent with regard to the most likely outcome. A number of members, while they did not rule out the possibility of a more favorable result, stressed the risk that a faster rate of inflation might well tend to be sustained. Others gave more emphasis to the still considerable slack in labor and product markets and to the restrained growth in broad measures of money and credit. In this view, an inflation rate in the quarters ahead more in line with their earlier forecasts was still a reasonable expectation even though the average rate for the year as a whole was likely to be higher than they had forecast at the start of the year. In the Committee's discussion of policy for the intermeeting period ahead, many of the members 864 Federal Reserve Bulletin • September 1993 commented that recent price and wage developments were troubling but did not point persuasively at this juncture toward an extended period of higher inflation. In light of underlying economic and financial conditions, the upturn in inflation expectations and the somewhat quickened pace of inflation might well prove to be temporary. The economy was expanding, but the pace had slowed in recent months. On the other hand, the potential for a sustained increase in the rate of inflation could not be dismissed. Waiting too long to counter any emerging uptrend in inflation or further worsening in inflationary expectations would exacerbate inflationary pressures and require more substantial and more disruptive policy moves later. Indeed, in one view sensitive commodity prices and other key measures of inflation already indicated the need for a prompt move toward restraint, especially in the context of the Committee's objective of fostering progress toward price stability. However, the other members all supported a proposal to maintain an unchanged degree of pressure on reserve positions at this time. In the course of the Committee's discussion, the members took account of a staff analysis that pointed to a considerable pickup in the growth of M2 and M3 over the months of May and June. Such strengthening, which appeared to have emerged in early May, was associated in part with the reversal of earlier tax-related distortions and with a surge in prepayments of mortgage-backed securities. Monetary growth was expected to revert to a more modest pace over subsequent months, and the members recognized that in any event the interpretion of monetary growth rates needed to be approached with considerable caution in a period when traditional relationships of such growth to aggregate measures of economic performance were not reliable. In present circumstances, M2 and M3 no longer seemed to be good barometers of underlying liquidity, which appeared to be ample. One member expressed the view that the relatively robust growth of M l and reserves served as a better indicator of the thrust of monetary policy than did the broader monetary aggregates. In the view of a majority of the members, wage and price developments over recent months were sufficiently worrisome to warrant positioning policy for a move toward restraint should signs of intensifying inflation continue to multiply. In addi- tion to new information on prices and costs, such signs could include developments in markets affected by inflation psychology, such as those for bonds, foreign exchange, and sensitive commodities, all of which would need to be monitored carefully. These members supported a directive that incorporated a greater predilection to tighten than to ease over the intermeeting period. Given the special nature of current inflation concerns and attendant uncertainties, however, the Committee agreed with a proposal by the Chairman that an intermeeting consultation would be appropriate in the event that a tightening move were to be contemplated during this period. If a policy tightening action were not needed, an asymmetric directive would nonetheless underscore the Committee's concern about recent inflation readings and its judgment that a policy to encourage progress toward price stability would promote sustained economic growth. In the event that a tightening action became necessary, such action could help to moderate inflationary expectations, with positive implications over time for long-term interest rates and the performance of the economy. Monetary policy would still be stimulative after a modest tightening move in that such a move would leave short-term interest rates close to or even below their year-ago levels in real terms, given the interim rise in inflation. Some members preferred to retain a directive that did not incorporate a presumption about the likely direction of a change in policy, if any, during the intermeeting period. They were concerned that adopting a biased directive might prove to be an overreaction to temporary factors and to a shortlived upturn in inflationary sentiment that was not warranted by underlying economic conditions. They noted that, if called for by intermeeting developments, a move toward restraint could be implemented from a symmetric directive. More fundamentally, they believed that the circumstances surrounding the recent performance of the economy and the uncertainties about price developments suggested the need for considerable caution before any policy tightening was implemented and that such a policy move should be carried out only in the light of information that pointed clearly to the emergence of higher inflation. Nonetheless, all but one of these members could accept an asymmetric directive on the understanding that the Com- Minutes of the Federal Open Market Committee Meeting mittee would have a chance to discuss any possible policy action. At the conclusion of the Committee's discussion, all but two of the members indicated that they preferred or could accept a directive that called for maintaining the existing degree of pressure on reserve positions and that included a bias toward possible firming of reserve conditions during the intermeeting period. Accordingly, in the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, the Committee decided that slightly greater reserve restraint would be acceptable or slightly lesser reserve restraint might be acceptable during the intermeeting period. The reserve conditions contemplated at this meeting were expected to be consistent with appreciable growth in the broader monetary aggregates over the second quarter. At the conclusion of the meeting, the Federal Reserve Bank of New York was authorized and directed, until instructed otherwise by the Committee, to execute transactions in the System account in accordance with the following domestic policy directive: The information reviewed at this meeting suggests that the economic expansion has slowed in recent months. Total nonfarm payroll employment rose only slightly over March and April after registering sizable increases earlier in the year, and the civilian unemployment rate remained at 7.0 percent. Industrial production was little changed in March and April after posting solid gains in previous months. Retail sales increased substantially in April but were about unchanged on balance for the year to date. Housing starts picked up in April. Incoming data on orders and shipments of nondefense capital goods suggest a further brisk advance in outlays for business equipment, while nonresidential construction has remained soft. The nominal U.S. merchandise trade deficit in January-February was slightly below its average level in the fourth quarter. Increases in wages and prices have been appreciably larger this year than in the second half of 1992. Short-term interest rates have changed little since the Committee meeting on March 23 while bond yields have risen somewhat. In foreign exchange markets, the tradeweighted value of the dollar in terms of the other G-10 currencies declined somewhat on balance over the intermeeting period. After contracting during the first quarter, M2 was unchanged in April while M3 turned up; both aggregates increased substantially in early May. Total domestic 865 nonfinancial debt expanded somewhat further through March. The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and promote sustainable growth in output. In furtherance of these objectives, the Committee at its meeting in February established ranges for growth of M2 and M3 of 2 to 6 percent and xh to 4'/2 percent respectively, measured from the fourth quarter of 1992 to the fourth quarter of 1993. The Committee expects that developments contributing to unusual velocity increases are likely to persist during the year. The monitoring range for growth of total domestic nonfinancial debt was set at 4'/2 to 8Y2 percent for the year. The behavior of the monetary aggregates will continue to be evaluated in the light of progress toward price level stability, movements in their velocities, and developments in the economy and financial markets. In the implementation of policy for the immediate future, the Committee seeks to maintain the existing degree of pressure on reserve positions. In the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, slightly greater reserve restraint would or slightly lesser reserve restraint might be acceptable in the intermeeting period. The contemplated reserve conditions are expected to be consistent with appreciable growth in the broader monetary aggregates over the second quarter. Votes for this action: Messrs. Greenspan, Corrigan, Keehn, Kelley, LaWare, Lindsey, McTeer, Mullins, Ms. Phillips, and Mr. Stern. Votes against this action: Messrs. Angell and Boehne. Mr. Angell dissented because he believed that the persisting indications of rising inflation and the related deterioration in inflationary psychology called for a prompt move to tighten monetary policy. In his view, low real interest rates, a very steep yield curve, a surprisingly weak exchange value of the dollar along with the confirming price behavior of inflation-sensitive commodities such as gold underscored the need for Committee action to signal the System's continuing commitment to the eventual achievement of price stability. In his opinion, progress toward lower inflation was not likely in 1993 and 1994 in the absence of a monetary policy that was sufficiently restrictive to check inflationary expectations. He added that history demonstrated that a monetary policy focused primarily on developments in the real economy ran the risk of waiting too long to counter a worsening in inflationary expectations and thus requiring more 866 Federal Reserve Bulletin • September 1993 substantial and possibly more disruptive policy changes later. Mr. Boehne supported a steady policy course, but he dissented because he objected to a directive that was biased toward tightening. Although recent developments suggested that inflation would be somewhat higher and real growth somewhat lower during the year than had been expected earlier, he did not believe recent data indicated a fundamental shift in the outlook for inflation or the economy. He was concerned that adopting a biased directive might prove to be an overreaction to temporary factors affecting the inflation rate and inflationary sentiment. In his view, underlying economic conditions did not point toward an extended period of higher inflation. While the pace of economic growth conceivably could quicken, it seemed just as likely that the tempo of business and consumer spending could diminish in the face of uncertainty about the stance of fiscal policy, particularly with regard to potential tax increases. Given these uncertainties, he had a strong preference for keeping an open mind about possible Committee action during the intermeeting period and, accordingly, favored a balanced policy directive. It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, July 6-7, 1993. The meeting adjourned at 1:50 p.m. Normand Bernard Deputy Secretary 867 Legal Developments FINAL RULE—AMENDMENTS G, T, U AND X TO REGULATIONS The Board of Governors is amending 12 C.F.R. Parts 207, 220, 221 and 224, its Regulations G, T, U and X (Securities Credit Transactions; List of Marginable OTC Stocks; List of Foreign Margin Stocks). The List of Marginable OTC Stocks (OTC List) is composed of stocks traded over-the-counter (OTC) in the United States 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 of Foreign Margin Stocks (Foreign List) is composed of foreign equity securities that have met the Board's eligibility criteria under Regulation T. The OTC List and the Foreign List are published four times a year by the Board. This document sets forth additions to or deletions from the previous Foreign List. Both Lists were published on April 27, 1993 and effective on May 10, 1993. Effective August 9, 1993, 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 (Regulation G), 12 C.F.R. 220.2(u) and 220.17 (Regulation T), and 12 C.F.R. 221.20) and 221.7 (Regulation U), there is set forth below a listing of deletions from and additions to the OTC List, and one deletion from the Foreign List. Deletions from the List of Marginable OTC Stocks Stocks Removed for Failing Continued Listing Requirements Cardinal Distribution, Inc.: 1-Va% convertible subordinated debentures Community Financial Corp.: $.01 par common Erly Industries, Inc.: $1.00 par common F & C International, Inc.: No par common Fonic Inc.: Warrants (expire 05-20-93) GHA Group, Inc.: Class B, $.01 par common Great American Communications Company: $.01 par common Horizon Resources Corporation: $.01 par common In-Store Advertising, Inc.: $.01 par common Independent BankGroup, Inc.: $1.00 par common Intellicorp, Inc.: $.001 par common Kentucky Central Life Insurance Company: Class A, non-voting, $1.00 par common Masstor Systems Corporation: $.001 par common Metallurgical Industries, Inc.: Class A, $.10 par common National Medical Waste, Inc.: $.01 par common Nationwide Cellular Service, Inc.: Warrants (expire 06-01-93) Norsk Data A.S.: American Depositary Receipts for Class B, non-voting shares Optek Technology, Inc.: $.01 par common American Integrity Corporation: $.01 par common American Rice, Inc.: $1.00 par common Scios Nova Inc.: Class C, Warrants (expire 06-30-93) Aspen Imaging International, Inc.: No par common Spectrum Information Technologies, Inc.: Class A, Warrants (expire 06-11-93) Sungard Data Systems Inc.: 8-!/4% convertible subordinated debentures Auto-Trol Technology: $.01 par common Bioplasty, Inc.: $.01 par common Blue Ridge Real Estate Company/Big Boulder Corporation: Paired certificates TSL Holdings, Inc.: $.01 par common Boston Digital Corporation: $.10 par common Vest, H.D., Inc.: Warrants (expire 05-21-93) 868 Federal Reserve Bulletin • September 1993 Stocks Removed for Listing on a National Securities Exchange or Being Involved in an Acquisition Additions to the List of Marginable OTC Stocks 3DO Company, The: $.01 par common Bank of East Tennessee: $2.00 par common Brand Companies, Inc., The: $.10 par common Cardinal Financial Group, Inc.: $.10 par common CB&T Financial Corporation: $1.00 par common CFS Financial Corporation: $1.00 par common Colorado National Bankshares, Inc.: No par common Financial Federal Corporation: $.50 par common First Community Bancorp Inc.: $1.00 par common Goldtex, Inc.: $.10 par common Grancare Inc.: No par common Gull Laboratories, Inc.: $.001 par common Hall-Mark Electronics Corporation: $.01 par common Home Federal Savings Bank (Colorado): $1.00 par common Horizon Financial Services, Inc.: $1.00 par common Jimbo's Jumbos, Incorporation: $.001 par common Key Centurion Bancshares, Inc.: $3.00 par common Manitowoc Company, Inc.: $.01 par common Midsouth Corporation: $.20 par common Multibank Financial Corporation: $6.25 par common Northeast Bancorp, Inc.: $5.00 par common Nucorp, Inc.: $.05 par common Pulitzer Publishing Company: $.01 par common Qual-Med, Inc.: $.01 par common Ranch Industries, Inc.: $1.00 par common Regency Cruises Inc.: $.001 par common Republic Capital Group, Inc.: $.10 par common Security Tag Systems, Inc.: $.001 par common Society for Savings Bancorp, Inc.: $1.00 par common Southern California Water Company: $5.00 par common Southwestern Electric Service Co.: $1.00 par common Sundowner Offshore Services, Inc.: $.01 par common Western Financial Corporation: $1.00 par common Abraxas Petroleum Corporation: $.01 par common Absolute Entertainment, Inc.: No par common ABT Building Products Corporation: $.01 par common ACS Enterprises, Inc.: $.05 par common Action Performance Companies, Inc.: $.01 par common; Warrants (expire 04-27-98) AER Energy Resources, Inc.: No par common AGCO Corporation: Depositary Shares Alcide Corporation: $.01 par common Aldila, Inc.: $.01 par common Alpha 1 Biomedicals, Inc.: Warrants (expire 02-28-97) American National Petroleum Company: $.01 par common American Safety Razor Company: $.01 par common American Savings Bank of Florida: $.01 par common Amerihost Properties, Inc.: $.005 par common Amtran, Inc.: No par common Auspex Systems, Inc.: $.001 par common Bancfirst Ohio Corp.: $10.00 par common Banco de Galicia y Buenos Aires S.A.: American Depositary Shares Bankunited Financial Corporation (Florida): Series 1993, $.01 par non-cumulative convertible preferred Barrett Business Services, Inc.: $.01 par common Base Ten Systems, Inc.: Class B, $1.00 par common Bell Microproducts Inc.: $.01 par common Black Hawk Gaming & Development Co., Inc.: $.001 par common; Class A, Warrants (expire 12-31-94); Class B, Warrants (expire 06-30-96) Blyth Holdings, Inc.: $.01 par common Broadband Technologies, Inc.: $.01 par common California Culinary Academy, Inc.: No par common Cambridge Technology Partners (Massachusetts), Inc.: $.01 par common Care Enterprises, Inc.: $.01 par common Catalyst Semiconductor, Inc.: No par common CDW Computer Centers, Inc.: $.01 par common Celestial Seasonings, Inc.: $.01 par common Charter Bancshares, Inc. (Texas): $1.00 par common Chattahoochee Bancorp, Inc. (Georgia): $1.00 par common Citizens Bancshares, Inc. (Ohio): No par common Citizens Federal Bank, A Federal Savings Bank (Florida): 8-3/t Series A, non-cumulative preferred Clayton Williams Energy, Inc.: $.10 par common Coastal Financial Corporation (South Carolina): $.01 par common Commercial Bank of New York: $5.00 par common Legal Developments Communication Intelligence Corporation: $.01 par common Concurrent Computer Corporation: $.01 par common CPI Aerostructures, Inc.: $.001 par common; Warrants (expire 09-16-95) CTL Credit, Inc.: $.01 par common Cypros Pharmaceutical Corporation: No par common Cyrk, Inc.: $.01 par common D.I.Y. Home Warehouse, Inc.: No par common Daig Corporation: $.01 par common Delta and Pine Land Company: $.10 par common Discovery Zone, Inc.: $.01 par common Donnkenny, Inc.: $.01 par common Dovatron International, Inc.: $.01 par common Drug Emporium, Inc.: 7.75% convertible debentures (due 2014) Eagle Holdings, Inc.: No par common ECCS, Inc.: $.01 par common Edunetics Ltd.: Ordinary Shares, NIS .06 par value Electroglas, Inc.: $.01 par common Electronic Retailing Systems International, Inc.: $.01 par common Equinox Systems, Inc.: $.01 par common Erox Corporation: No par common Evergreen Media Corporation: Class A, No par common Excalibur Holding Corporation: $.00001 par common F & M Bancorporation, Inc. (Wisconsin): $.01 par common Far East National Bank (California): $1.25 par common FFBS Bancorp, Inc. (Mississippi): $.01 par common FFY Financial Corp. (Ohio): $.01 par common Fidelity New York F.S.B.: $.01 par common Flir Systems, Inc.: $.01 par common Fourth Shift Corporation: $.01 par common Frozen Food Express Industries, Inc.: $1.50 par common Future Healthcare, Inc.: No par common GAB Bancorp (Indiana): $10.00 par common General Communication, Inc.: Class A, No par common Genzyme Transgenics Corporation: $.01 par common George Mason Bankshares, Inc. (Virginia): $1.66 par common Geotek Industries: $.01 par common Gold Reserve Corporation: No par common Gotham Apparel Corporation: $.001 par common Ground Round Restaurants, Inc.: $.1667 par common Growth Financial Corp. (New Jersey); $1.00 par common 869 Hallmark Healthcare Corporation: Class A, $.01 par common Hamilton Financial Services Corporation: $.01 par common Harmony Holdings, Inc.: $.01 par common Harry's Farmers Market, Inc.: Class A, $.01 par common Healthdyne Technologies, Inc.: $.01 par common HEI Inc.: $.05 par common Hollywood Casino Corporation: $.01 par common Horizon Bancorp, Inc. (West Virginia): $1.00 par common Huntco Inc.: Class A, $.01 par common Hyde Athletic Industries, Inc.: Class B, $.33-1/3 par common Image Business Systems Corporation: $.01 par common Independence Bancorp, Inc. (New Jersey): $1,667 par common Industrial Scientific Corporation: $.10 par common Information Resource Engineering, Inc.: $.01 par common Interlinq Software Corporation: $.01 par common International Imaging Materials, Inc.: $.01 par common International Tourist Entertainment Corp.: $.001 par common IRG Technologies, Inc.: $.01 par common IVF America, Inc.: $.01 par common; Series A, $1.00 par cumulative convertible preferred Jabil Circuit, Inc.: $.01 par common Jackson County Federal Bank, A Federal Savings Bank (Oregon): $1.00 par common Kent Financial Services, Inc.: $.10 par common Laser Vision Centers, Inc.: $.01 par common Laurel Savings Association (Pennsylvania): $1.00 par common LCI International, Inc.: $.01 par common LF Bancorp, Inc. (Mississippi): $.01 par common Lottery Enterprises, Inc.: $.01 par common Lunn Industries, Inc.: $.01 par common Magnetic Technologies Corporation: $. 15 par common Mariner Health Group, Inc.: $.01 par common Martin Color-Fi, Inc.: No par common MBLA Financial Corporation (Missouri): $.01 par common Medical Care America, Inc.: 7% convertible debentures (due 2015) Megahertz Corporation: $.004 par common Megatest Corporation: $.001 par common 870 Federal Reserve Bulletin • September 1993 Metatec Corporation: Class A, $.01 par common Metro Financial Corporation (Georgia): $1.00 par common MFS Communications Company, Inc.: $.01 par common Microcarb Inc.: $.01 par common Mississippi Valley Bancshares, Inc. (Missouri): $1.00 par common National Convenience Stores, Inc.: Warrants (expire 03-09-98) National Home Centers, Inc.: $.01 par common Northern Springs Co., Inc.: Class A, $.01 par common Northstar Health Services, Inc.: $.01 par common Northwestern Steel and Wire Company: $.01 par common Norwood Promotional Products, Inc.: No par common O'Reilly Automotive, Inc.: $.01 par common Old America Stores, Inc.: $.01 par common OPTI, Inc.: No par common Pacific International Services Corporation: No par common Papa John's International, Inc.: $.01 par common Paul Harris Stores, Inc.: $.01 par common People's Bank (Connecticut): 8.5% Series A, No par convertible preferred People's Choice TV Corp.: $.01 par common Petroleum Geo-Services A/S: American Depositary Receipts Phycor, Inc.: 6.5% convertible subordinated debentures (due 2003) Pinnacle Micro, Inc.: $.001 par common Pittencrieif Communications, Inc.: $.01 par common Primadonna Resorts, Inc.: $.01 par common Projectavision, Inc.: $.0001 par common Quad Systems Corporation: $.03 par common Quality Projects, Inc.: $.00001 par common Random Access, Inc.: $.0001 par common Re Capital Corporation: $.10 par common Regal Cinemas, Inc.: No par common Regional Acceptance Corporation: No par common Reliable Life Insurance Company, The: Class A, $1.00 par common Reno Air, Inc.: $.01 par common Resource Mortgage Group, Inc. (South Carolina): $.01 par common Rexall Sundown, Inc.: $.01 par common Rhodes, Inc.: $.01 par common Robert Mondavi Corporation, The: Class A, No par common Rochester Community Savings Bank, The: Series B, $1.00 par non-cumulative convertible preferred Safety 1st, Inc.: $.01 par common Sanmina Corp.: $.01 par common Santa Cruz Operation, Inc., The: No par common Satcon Technology Corporation: $.01 par common Seaman Furniture Company, Inc.: $.01 par common Shiloh Industries, Inc.: $.01 par common Signal Technology Corporation: $.01 par common Silver King Communications, Inc.: $.01 par common Sodak Gaming, Inc.: $.01 par common Spectrum Signal Processing Inc.: No par common St. Francis Capital Corporation: $.01 par common Stanley Furniture Company, Inc.: $.02 par common State Financial Services Corporation: Class A, $.10 par common Station Casinos, Inc.: $.01 par common Stolt Comex Seaway S.A.: $2.00 par common Summit Bancshares, Inc. (Texas): $2.50 par common Suncoast Savings & Loan Assoc. FSA: Series A, $5.00 par non-cumulative convertible preferred Sundance Homes, Inc.: $.01 par common Sunglass Hut International, Inc.: $.01 par common Supreme International Corporation: $.01 par common Swisher International, Inc.: $.01 par common; Warrants (expire 04-21-96) T R Financial Corp.: $.01 par common Telor Ophthalmic Pharmaceuticals, Inc.: $.001 par common Therapeutic Discovery Corporation/ALZA Corporation: Units (expire 12-31-99) Titan Holdings, Inc.: $.01 par common Tital Wheel International, Inc.: No par common Touchstone Applied Science Associates, Inc.: $.0001 par common Trico Bancshares (California): No par common United Mobile Homes, Inc.: $.10 par common Valley Bancorp, Inc. (Pennsylvania): $5.00 par common West Coast Bancorp, Inc. (Florida): $1.00 par common Wind River Systems, Inc.: $.01 par common Zaring Homes, Inc.: No par common Deletion from the List of Foreign Margin Stocks Joshin Denki Company, Ltd.: ¥ 50 par common Legal Developments FINAL RULE—AMENDENT TO REGULATION Z The Board of Governors is amending 12 C.F.R. Part 226, its Regulation Z (Truth in Lending), to provide a temporary exception to Regulation Z provisions that prohibit the use of a preprinted form by a creditor to obtain a consumer's waiver of the right to rescind certain home-secured loans when loan proceeds are needed immediately to meet a consumer's bona fide personal financial emergency. Generally, Regulation Z requires a mandatory three-day waiting period on rescindable transactions before funds can be disbursed. In addition, a consumer's need to obtain funds immediately shall be regarded as a bona fide personal financial emergency for purposes of Regulation Z for transactions secured by consumers' principal dwellings located in areas of the Midwest recently declared to be major disaster areas because of extensive flooding. The exception expires one year from the date the area was declared a major disaster. Effective July 29, 1993, 12 C.F.R. Part 226 is amended as follows (the Board is publishing only those sections of the regulation that are affected by the changes): Part 226—Truth in Lending 1. The authority citation for Part 226 continues to read: Authority: Truth in Lending Act, 15 U.S.C. 1604 and 1637(c)(5); sec. 1204 (c), Competitive Equality Banking Act, 12 U.S.C. 3806. Subpart B—Open-End Credit 2. Section 226.15 paragraph (e) is revised to read as follows: Section 226.15—Right of Rescission. (e) Consumer's waiver of right to rescind. (1) The consumer may modify or waive the right to rescind if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency. To modify or waive the right, the consumer shall give the creditor a dated written statement that describes the emergency, specifically modifies or waives the right to rescind, and bears the signature of all the consumers entitled to rescind. Printed forms for this purpose are prohibited, except as provided in paragraph (2) of this section. 871 (2) The need of the consumer to obtain funds immediately shall be regarded as a bona fide personal financial emergency provided that the dwelling securing the extension of credit is located in an area declared during June through September 1993, pursuant to 42 U.S.C. 5170, to be a major disaster area because of severe storms and flooding in the Midwest. 363 In this instance, creditors may use printed forms for the consumer to waive the right to rescind. This exemption to paragraph (e)(1) of this section shall expire one year from the date an area was declared a major disaster. 3. Section 226.16 is amended by redesignating existing footnotes 36a and 36b as footnotes 36b and 36c, respectively. Subpart C—Closed-End Credit 4. Section 226.23 paragraph (e) is revised to read as follows: Section 226.23—Right of Rescission. (e) Consumer's waiver of right to rescind. (1) The consumer may modify or waive the right to rescind if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency. To modify or waive the right, the consumer shall give the creditor a dated written statement that describes the emergency, specifically modifies or waives the right to rescind, and bears the signature of all the consumers entitled to rescind. Printed forms for this purpose are prohibited, except as provided in paragraph (2) of this section. (2) The need of the consumer to obtain funds immediately shall be regarded as a bona fide personal financial emergency provided that the dwelling securing the extension of credit is located in an area declared during June through September 1993, pursuant to 42 U.S.C. 5170, to be a major disaster area because of severe storms and flooding in the Midwest. 483 In this instance, creditors may use printed forms for the consumer to waive the right to rescind. This exemption to paragraph (e)(1) of this section shall expire one year from the date an area was declared a major disaster. 36a. A list of the affected areas will be maintained by the Board. Such areas now include parts of Iowa, Illinois, Minnesota, Missouri, Nebraska, South Dakota, and Wisconsin. 48a. A list of the affected areas will be maintained by the Board. Such areas now include parts of Illinois, Iowa, Minnesota, Missouri, Nebraska, South Dakota, and Wisconsin. 872 Federal R e s e r v e Bulletin • September 1993 ORDERS ISSUED UNDER BANK COMPANY ACT HOLDING Orders Issued Under Section 3 of the Bank Holding Company Act $73.3 million in total assets, is the 52d largest commercial banking organization in Colorado, controlling $65.9 million in deposits, representing less than 1 percent of total deposits in commercial banks in the state. 3 Competitive Banc One Corporation Columbus, Ohio Banc One Colorado Corporation Denver, Colorado Order Approving Merger of Bank Holding Companies and Acquisition of Bank Banc One Corporation, Columbus, Ohio ("Banc One"), and its wholly owned subsidiary, Banc One Colorado Corporation, Denver, Colorado ("Banc One Colorado", and, together with Banc One, "Applicants"), bank holding companies within the meaning of the Bank Holding Company Act ("BHC Act"), have applied for the Board's approval under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire Colorado Western Bancorp, Inc., Montrose, Colorado ("Colorado Western"), and thereby indirectly acquire Colorado Western's sole subsidiary, The First National Bank of Montrose, Montrose, Colorado ("Montrose Bank"). 1 Notice of the applications, affording interested persons an opportunity to submit comments, has been published (58 Federal Register 26,785 (1993)). The time for filing comments has expired, and the Board has considered the applications and all comments received in light of the factors set forth in section 3(c) of the BHC Act. Banc One, with $73.7 billion in total consolidated assets, is the eighth largest commercial banking organization in the United States, controlling $59.6 billion in deposits. 2 Banc One operates 78 subsidiary banks in Ohio, Indiana, Michigan, Wisconsin, Illinois, Texas, Colorado, Kentucky, Arizona, California, Utah, and West Virginia. Banc One Colorado, with $2.8 billion in total assets, is the fourth largest commercial banking organization in Colorado, controlling six bank subsidiaries with $2.4 billion in total deposits, representing approximately 8.8 percent of total deposits in commercial banks in the state. Colorado Western, with 1. The transaction is structured as a merger of Colorado Western with and into Banc One Colorado. Applicants also intend to merge Montrose Bank with and into Bank One, Western Colorado, N.A., Salida, Colorado ("Bank One Western"). This bank merger has been approved by the Office of the Comptroller of the Currency ("OCC") pursuant to the Bank Merger Act (12 U.S.C. § 1828(c)). 2. Asset and deposit data are as of March 31, 1993, and reflect acquisitions consummated since that date. Considerations Banc One and Colorado Western compete in the Montrose County, Colorado, banking market ("Montrose banking market"). 4 Bank One Western is the sixth largest depository institution5 in this market, controlling deposits of $18.1 million, representing approximately 5.3 percent of total deposits in depository institutions in the market ("market deposits"). 6 Montrose Bank is the second largest depository institution in the market, controlling deposits of $61.4 million, representing approximately 18.1 percent of market deposits. Upon consummation of this proposal, Banc One would become the second largest banking organization in the Montrose banking market, controlling deposits of $79.5 million, representing approximately 23.4 percent of market deposits. The HerfindahlHirschman Index ("HHI") for the market would increase by 192 points to 2221. 7 3. Section 3(d) of the BHC Act, the Douglas Amendment, prohibits the Board from approving an application by a bank holding company to acquire control of any bank located outside the bank holding company's home state, unless such acquisition is "specifically authorized by the statute laws of the State in which such bank is located, by language to that effect and not merely by implication." 12 U.S.C. § 1842(d). Colorado's interstate banking statute permits out-of-state bank holding companies nationwide to acquire banking organizations located in Colorado, subject to specified statutory requirements and a certification by state banking officials that the acquisition satisfies such requirements. See Colo. Rev. Stat. § 116.4-103 (1992). The record in this case indicates that Banc One's proposal satisfies all relevant statutory criteria, and the Colorado banking authorities have issued a certification confirming this fact. For these reasons, the Board has concluded that Banc One is authorized under the laws of Colorado to acquire Colorado Western and Montrose Bank. Accordingly, Board approval of this proposal is not prohibited by the Douglas Amendment. 4. The Montrose banking market is approximated by Montrose County, Ouray County, and San Miguel County, all in Colorado. 5. In this context, depository institutions include commercial banks, savings banks and savings associations. Market share data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). 6. Market share data are as of June 30, 1992. 7. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (1984), a market in which the post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge a merger that increases the HHI by more than 50 points. The Justice Department has informed the Board that, as a general matter, a bank merger or acquisition will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the transaction increases the HHI by more than 200 points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects Legal Developments Ten depository institutions will remain in operation in the Montrose banking market upon consummation of this proposal. The largest such depository institution is a subsidiary of a large, regional bank holding company, and controls more than 35 percent of market deposits. The Board also has considered that Colorado permits interstate banking nationwide, and, therefore, that there are a large number of potential entrants into this market. In this regard, the Montrose banking market is relatively attractive to potential entrants, as evidenced by the fact that several banking organizations, including two de novo banks, have commenced operations in the market in the past several years. Finally, the Board sought comments on the competitive effects of this proposal from both the Department of Justice and the OCC. The Department of Justice has indicated that it does not believe the acquisition of Montrose Bank by Banc One would have a significantly adverse effect on competition in any relevant market, and the OCC has not provided any objection to consummation of the proposal or indicated that the proposal would have any significant adverse competitive effects.8 On the basis of the foregoing considerations and all the other facts of record, the Board has concluded that consummation of Applicants' proposal would not result in any significantly adverse effect on competition or the concentration of banking resources in the Montrose banking market or any other relevant banking market. Convenience and Needs Considerations In acting upon an application to acquire a depository institution under the BHC Act, the Board must consider the convenience and needs of the communities to be served, and take into account the records of the relevant depository institutions under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires the federal financial supervisory agencies to encourage financial institutions to help meet the credit needs of the local communities in which they operate consistently 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 implicitly recognize the competitive effect of limited-purpose lenders and other non-depository financial entities. 8. In addition, the Board notes that the OCC has approved the merger Montrose Bank with and into Bank One Western pursuant to the Bank Merger Act. 873 operation of such institution," and to take that record into account in its evaluation of applications.9 In connection with these applications, the Board has received comments from The Main Street Business Association ("Protestant") objecting to this proposal. Protestant criticizes generally the CRA performance record of the Banc One organization, and raises issues regarding the record of Banc One's lead subsidiary bank in Ohio, Bank One, Columbus, N.A., Columbus, Ohio ("Bank One Columbus"), including the bank's record of small business lending in minority neighborhoods.10 The Board has carefully reviewed the CRA performance records of Banc One and its subsidiary banks, the comments presented by Protestant and Banc One's responses to those comments, as well as all other relevant facts of record, in light of the CRA, the Board's regulations, and the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement").11 A. Evaluations of CRA Performance The Agency CRA Statement provides that a CRA examination is an important and often controlling factor in the consideration of an institution's CRA record and that these reports will be given great weight in the applications process.12 In this regard, Bank One Columbus received an "outstanding" rating in its most recent publicly available examination report for CRA performance conducted by the OCC as of May 1991 (the "1991 examination"). Bank One Western also received an "outstanding" rating from the OCC at its most recent examination conducted as of February 1993. Overall, the most recent CRA performance examinations for Banc One's subsidiary banks show 28 "outstanding" ratings, 48 "satisfactory" ratings, and 2 ratings of "needs to improve", one of which was assigned by the OCC to Bank One Cleveland at its most recent examination conducted as of April 1993.13 9. See 12 U.S.C. § 2903. 10. In addition, Protestant believes that there may exist some inconsistencies in the OCC's examination ratings for CRA performance by Banc One's subsidiary banks, and has encouraged the Board to examine factors in addition to these ratings. In this regard, Protestant cites data concerning denial rates of Bank One Columbus and Bank One Cleveland, N.A., Cleveland, Ohio ("Bank One Cleveland"), to African-American applicants for conventional home mortgages. 11. 54 Federal Register 13,742 (1989). 12. 54 Federal Register at 13,745 (1989). 13. The second rating of "needs to improve" was assigned to Nicholas County Bank, Summersville, West Virginia, at its most recent examination conducted by the Federal Deposit Insurance Corporation as of December 1991, before this institution was acquired by Banc One. 874 Federal Reserve Bulletin • September 1993 The Board also has considered the CRA performance record of Montrose Bank, including the most recent CRA performance examination conducted by the OCC. B. Recent Review of Banc One's CRA Record In addition to considering the record of CRA performance examinations of Montrose Bank and Banc One's subsidiary banks, the Board has carefully considered the actual CRA-related policies, procedures, and programs instituted and in place at these organizations. In this regard, the Board notes that in connection with Banc One's recent application to acquire Valley National Corporation, Phoenix, Arizona ("Valley National"), and certain of Valley National's banking and nonbanking subsidiaries, the Board conducted a thorough review of the CRA performance record of the Banc One organization.14 The Board's review included consideration of numerous comments received with respect to that proposal from various community organizations and other members of the public, including Protestant. In the Valley National Order, the Board concluded that the overall CRA performance record of the Banc One organization, including its CRA programs and policies, efforts to ascertain community credit needs, marketing programs, HMDA data and lending practices, and record of lending, community development, and other CRArelated activities, was consistent with approval of Banc One's proposal to acquire the Valley National organization. C. Record of Bank One Columbus In the area of small business lending, Bank One Columbus maintains credit relationships with over 2,700 small businesses in the Columbus MSA with annual revenues of $10 million or less. At the 1991 examination, the OCC concluded that the bank is an active small business lender, and originated a reasonable volume of small business loans. The OCC noted that Bank One Columbus is a very active participant in small business lending programs sponsored by the Small Business Administration and state and local government agencies. In 1990, the bank closed 45 loans under these programs, totalling more than $4.7 million. The Board also has noted that a substantial portion of the bank's small business loans are made to emerging businesses with annual revenues of less than 14. See Banc One Corporation, 79 Federal Reserve Bulletin 524 (1993) ("Valley National Order"). $1 million. For example, in 1992 Bank One Columbus made 744 loans to such businesses for a total of $39.8 million. Of these loans, 151 were to businesses in low- and moderate-income areas, in the aggregate amount of $9.1 million. The record also indicates that a substantial portion of these loans were to businesses in predominantly minority areas. Through the first three quarters of 1992, 9 percent of such loans were made in minority areas. Minority areas represent approximately 10 percent of the census tracts in the Columbus MSA. The Board also notes that the bank's approval and denial rates for such small business loans in minority areas is approximately the same as that for small business credit applicants located in areas where minorities represent less than 10 percent of the population. As noted previously, Bank One Columbus received an "outstanding" rating for CRA performance at the most recent publicly available examination concluded by the OCC. The record of these applications demonstrates that Banc One and Bank One Columbus have in place the types of policies and procedures that the Board and the other federal bank supervisory agencies have indicated contribute to an effective CRA program. Many of these policies and procedures, particularly those instituted at the Banc One corporate level, were discussed in the Valley National Order. The Board has specifically reviewed the policies and procedures instituted at the Columbus bank in its consideration of these applications. In this regard, the OCC concluded at the 1991 examination that the bank's board of directors is actively involved in the CRA program, and has adopted appropriate CRA policies, including policies regarding the allocation of resources and the establishment of an effective program structure. In addition, a committee of the board of directors meets quarterly to review and discuss matters relating to CRA performance. The bank's internal CRA committee, comprised of the CRA Officer, senior management, and officers representing various divisions of the bank, meets monthly to provide guidance for the CRA program. These and other policies and procedures employed by Bank One Columbus are designed to ensure an effective CRA program that includes involvement by senior management and the board of directors. Bank One Columbus has instituted an ascertainment program to identify and respond to community credit needs. At the 1991 examination, the OCC concluded that this ascertainment program included all areas of the bank's delineated community. Bank One Columbus has established a comprehensive officer calling program to establish and maintain contacts with individuals and organizations throughout the community. The calling program is overseen by the bank's CRA Legal Developments Officer and by the internal CRA committee. Other significant ascertainment efforts include meetings of the bank's Community Advisory Council, various types of marketing surveys and analyses, and community outreach activities by various levels of bank personnel. The OCC also concluded that the bank has shown flexibility in developing credit products to meet ascertained credit needs. Bank One Columbus also has instituted a marketing program designed to inform all segments of its community of the bank's services and credit products. The OCC's 1991 examination found that the bank's marketing program was comprehensive and covered all areas of the bank's delineated community, including low- and moderate-income neighborhoods. The bank uses general circulation and special media to target particular segments of the community. Other marketing efforts include seminars for potential customers for consumer and small business credit. As indicated in the Valley National Order, Bank One Columbus offers a wide range of credit products for homeowners, consumers, and small businesses, including products offered through governmental loan programs such as those sponsored by the Federal Housing Administration, the Veterans Administration, the Small Business Administration, and the Ohio Housing Finance Agency.15 At the 1991 examination, the OCC concluded that the bank's lending record demonstrated reasonable market penetration in all segments of its service communities, including lowand moderate-income areas. With respect to housing-related lending, Bank One Columbus made 1,479 mortgage loans in 1991, for a total of $117 million.16 Of these loans, 345 were to lowand moderate-income borrowers, in the aggregate amount of $10.7 million. The bank also is an active home-improvement lender, having made 2,767 such loans in 1991 for a total of $31 million within the Columbus MSA. Low- and moderate-income borrowers received 1,227 of these home improvement loans, for a total of approximately $8.4 million. Bank One Columbus also makes a substantial number of other types of consumer loans. For example, the OCC concluded at the 1991 examination that the bank was a very active lender under guaranteed student loan programs, having made over 13,000 student loans for approximately $23 million from September 1, 1990, through March 31, 1991. 15. The Board has noted that in 1990, the bank made 85 housing loans through programs sponsored by the FHA, VA, and OHFA, for a total of $4.5 million. 16. These figures are for conventional purchase money mortgages, FHA and VA loans, and refinancings, and include loans originated by Banc One Mortgage Corporation in Bank One Columbus service areas. 875 The OCC also concluded that the bank had an excellent record of participation in community development and redevelopment activities within its service areas. In addition to investing in state and local bond issues for housing projects, economic development, and other purposes, Bank One Columbus has funded development projects within its community, and, through Banc One Community Development Corporation, has invested or committed funds to various community organizations engaged in activities related to affordable housing, including the Columbus Housing Partnership and the Ohio Equity Fund. The Board also has reviewed data reported by Bank One Columbus, as well as Banc One's other subsidiary banks, under the Home Mortgage Disclosure Act ("HMDA"). These data indicate some disparities in approvals and denials of loan applications according to racial and ethnic group and income status in the areas served by these banks. Because all banks are obligated to adopt and implement lending practices that ensure not only safe and sound lending but also equal access to credit by creditworthy applicants regardless of race, the Board is concerned when the record of an institution indicates disparities in lending to minority credit applicants. The Board recognizes, however, that HMDA data alone provide only a limited measure of any given institution's lending in its community. The Board also recognizes that HMDA data have limitations that make the data an inadequate basis, absent other information, for conclusively determining whether an institution has engaged in illegal discrimination on the basis of race or ethnicity in making lending decisions. In this regard, the Board notes that the OCC determined at the 1991 examination that the community delineation of Bank One Columbus was reasonable, and did not arbitrarily exclude any low- and moderate-income neighborhoods. The OCC also concluded that the bank's geographic distribution of credit applications, extensions, and denials demonstrated reasonable penetration of all segments of its local community, including low- and moderate-income and minority areas, with no evidence of exclusionary practices. In this regard, 13.4 percent of the bank's 1991 housing-related loans were made to minorities, a proportion that is higher than the 12.6 percent of the Columbus MSA population that is minority. The Board also has noted that at the 1991 examination, the OCC found no evidence that the bank engages in illegal discrimination or other illegal credit practices. The record also indicates that Bank One Columbus supports its antidiscrimination policies and procedures with employee compliance training. 876 Federal Reserve Bulletin • September 1993 D. Initiatives by Bank One Cleveland In the Valley National Order, the Board stated that it expected Banc One to take steps that would address the areas of weakness identified in the OCC's most recent examination of Bank One Cleveland. The Board also required Banc One to submit to the Board, when delivered to the OCC, a copy of its plan to address these deficiencies in the CRA record of Bank One Cleveland, and further required Banc One to submit quarterly progress reports with respect to this improvement plan. The Board has reviewed the CRA corrective action plan for Bank One Cleveland, as well as the first quarterly progress report on the plan, in its consideration of these applications. The corrective action plan calls for the bank to evaluate existing CRA-related programs with a view toward achieving a more equitable distribution of credit throughout its service communities. To this end, the bank will conduct a thorough geographic analysis of its consumer and residential real estate lending patterns, and has established provisional quantitative indicators to measure credit distribution throughout its market. The bank also will conduct an evaluation of existing credit products and lending programs. This evaluation will include assessments of marketing and advertising programs, as well as the ability of existing loan products to meet identified community credit needs. The bank also will establish lending targets for each underserved area that has been identified as an area of market opportunity, and will develop specific strategies to achieve these objectives. Since the Valley National Order was issued, Bank One Cleveland has introduced several new loan products designed to meet the credit needs of low- and moderate-income communities, including: (1) A home mortgage product with low down payment requirements and flexible underwriting criteria; (2) A mortgage loan product that will cover both acquisition costs and rehabilitation costs; (3) A secured home improvement loan product; and (4) A mortgage loan for one-to-eight unit rental properties. The Board also notes that Bank One Cleveland has recruited a new CRA Officer, who reports directly to the chief executive officer and board of directors of the bank. This CRA Officer will coordinate the efforts of an expanded staff, including regional CRA coordinators, a community lending officer, and a low- and moderate-income market analyst. In addition, members of the bank's senior management have been assigned to a reorganized CRA Management Commit tee. The bank also has established an additional Community Advisory Council, which will focus exclusively on credit needs in the City of Cleveland. The Board will continue to monitor implementation of these and other steps developed by Banc One and Bank One Cleveland, and continues to expect Banc One and Bank One Cleveland to implement these steps fully.17 E. Conclusion Regarding Convenience and Needs Factor The Board has carefully considered all the facts of record, including the comments received, in reviewing the convenience and needs factor under the BHC Act. Based on a review of the entire record, including information provided by Protestant and the results of the most recent CRA performance examinations conducted by the relevant primary regulators, as well as the information that was also relevant to and considered in the Valley National Order, the Board believes that the efforts of Banc One and Colorado Western to help meet the credit needs of all segments of the communities served by their subsidiary banks, including low- and moderate-income neighborhoods, as well as all other convenience and needs considerations, are consistent with approval of this proposal. Other Considerations On the basis of all the facts of record, including the representations and commitments furnished by Applicants, the Board has concluded that the financial and managerial resources and future prospects of Banc One, Colorado Western, and their respective subsidiaries, and all other supervisory factors the Board must consider under section 3 of the BHC Act, are consistent with approval of this proposal. Based on the foregoing and other facts of record, the Board has determined that the applications should be, and hereby are, approved. This approval is expressly conditioned upon compliance by Applicants with all the commitments made in connection with these applications and with the conditions referenced in this Order. The commitments and conditions relied on by 17. The Board also notes that Banc One and Mayor White of Cleveland have announced a joint initiative between Bank One Cleveland and the city designed to enhance an expansion of financial services in targeted areas. Under this initiative, Bank One Cleveland committed to introduce a variety of credit products, and to seek to employ the services of a homebuyer counseling provider to assist lowand moderate-income residents of Cleveland in applying for residential loans at the bank. In addition, the initiative provides that the bank will undertake a cooperative effort with the city to finance new housing development in targeted areas. Moreover, Bank One Cleveland will conduct feasibility studies of sites identified by the city for possible new branch locations. Legal Developments the Board in reaching this decision are deemed to be conditions imposed in writing by the Board in connection with its findings and decision, and, as such, may be enforced in proceedings under applicable law. This transaction shall not be consummated before the thirtieth calendar day following the effective date of this Order, or later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of Cleveland, acting pursuant to delegated authority. By order of the Board of Governors, effective July 12, 1993. Voting for this action : Vice Chairman Mullins and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and not voting: Chairman Greenspan. JENNIFER J. JOHNSON Associate Secretary of the Board First Financial Corporation Terre Haute, Indiana Order Approving the Merger of Bank Holding Companies First Financial Corporation, Terre Haute, Indiana ("First Financial"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied under section 3(a)(5) of the BHC Act (12 U.S.C. § 1842(a)(5)) to merge with Parke Bancorp, Rockville, Indiana, and thereby to acquire the Parke State Bank, Rockville, Indiana ("Bank"). Notice of the application, affording interested persons an opportunity to submit comments, has been published (58 Federal Register 13,266 (1993)). 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. First Financial is the 11th largest commercial banking organization in Indiana, controlling deposits of approximately $826.5 million, representing 1.7 percent of total deposits in commercial banks in the state.1 Parke Bancorp is the 88th largest commercial banking organization in the state, controlling deposits of $66.9 million, representing less than 1 percent of total deposits in commercial banking organizations in the state. Upon consummation of this proposal, First Financial would remain the 11th largest commercial banking organization in the state with deposits of $893.4 million, representing approximately 1.9 percent 1. Deposit data are as of June 30, 1992. 877 of total deposits in commercial banking organizations in the state. First Financial and Bank compete directly in the Terre Haute, Indiana, banking market.2 First Financial is the largest depository institution in the market, controlling deposits of $708.3 million, representing 46.3 percent of total deposits in depository institutions in the market ("market deposits").3 Bank is the smallest depository institution in the market, with market deposits of $9.4 million, representing less than 1 percent of total deposits in depository institutions in the market. The Herfindahl-Hirschman Index ("HHI") for the market would increase by 56 points to 2781.4 Although consummation of this proposal would result in some increase in market concentration as measured by the HHI, nine depository institutions, including seven commercial banking organizations, would remain in the market. These commercial bank competitors include two of the largest commercial banking organizations in the state. In addition, several aspects of the Terre Haute banking market make it an attractive banking market for potential banking competitors to enter.5 Indiana has nationwide reciprocal interstate banking and permits de novo branch entry by commercial banks in contiguous counties and by thrifts from anywhere in the state, thus facilitating entry into the market by potential competitors. In this regard, several out-of-market banking firms have entered the Terre Haute banking market since 1985. In light of the relatively small increase in market concentration and First Financial's market share, the number of competitors remaining in the market, the 2. The Terre Haute banking market is approximated by Clay and Vigo Counties; Clinton and Helt townships in Vermillion County; Florida, Jackson, and Raccoon townships in Parke County; and Curry, Fairbanks, and Jackson townships in Sullivan County, all in Indiana. 3. Market data are as of June 30, 1992. In this context, depository institutions include commercial banks and savings banks. The Board previously has indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). In considering the competition offered by thrifts in the Terre Haute banking market, market share data are based on calculations in which the deposits of two thrift institutions in the market are included at 50 percent. 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 over 1800 is considered highly concentrated. 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 Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers and acquisitions for anticompetitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other non-depository financial entities. 5. For example, the Terre Haute banking market is one of the state's 11 Metropolitan Statistical Areas and ranks third in deposits per banking office and third in recent growth of market deposits. 878 Federal Reserve Bulletin • September 1993 attractiveness of the market to potential entrants, and other facts of record in this case, the Board concludes that consummation of the proposal would not have a significantly adverse effect on competition or the concentration of banking resources in the Terre Haute banking market, or in any other relevant banking market. Considerations relating to the financial and managerial resources and future prospects of First Financial, Parke, and their subsidiary banks, and other supervisory factors that the Board is required to consider under section 3 of the BHC Act, also are consistent with approval of this application. The Board also finds that considerations relating to the convenience and needs of the communities to be served are consistent with approval. Based on the foregoing and other facts of record, the Board has determined that the application should be, and hereby is, approved. The Board's approval of this transaction is specifically conditioned upon compliance with the commitments given in connection with this application. For the purposes of this action, the commitments and conditions relied on in reaching this decision are both considered to be conditions imposed in writing by the Board and, as such, may be enforced in proceedings under applicable laws. The transaction approved in this order shall not be consummated before the thirtieth calendar day following the effective date of this Order, or later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of Chicago, pursuant to delegated authority. By order of the Board of Governors, effective July 12, 1993. Bank of Spring Lake Park ("Bank"), both of Spring Lake Park, Minnesota.1 Notice of the application, affording interested persons an opportunity to submit comments, has been published (58 Federal Register 26,785 (1993)). 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. Norwest, with total consolidated assets of $45.5 billion, operates 85 banking subsidiaries located in 13 states.2 Norwest is the second largest commercial banking organization in Minnesota, controlling deposits of approximately $10.1 billion, representing 23.1 percent of the deposits in commercial banks in the state.3 M & D is the 113th largest commercial banking organization in Minnesota, controlling $48.2 million in deposits, representing less than 1 percent of the deposits in commercial banks in the state. Upon consummation of the proposal, Norwest would remain the second largest commercial banking organization in Minnesota, controlling deposits of $10.2 billion, representing 23.2 percent of the total deposits in commercial banks in the state. Competitive Considerations Norwest and M & D compete directly in the Minneapolis-St. Paul banking market.4 Norwest is the second largest commercial bank or thrift institution ("depository institution") in the market, controlling deposits of $7.4 billion, representing 27.8 percent of total deposits in depository institutions in the market ("market deposits").5 M & D is the 46th largest depository institution in the market, controlling approximately $48.2 million in deposits, representing Voting for this action: Vice Chairman Mullins and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and not voting: Chairman Greenspan. JENNIFER J. JOHNSON Associate Secretary of the Board Norwest Corporation Minneapolis, Minnesota Order Approving the Acquisition of a Bank Norwest Corporation, Minneapolis, Minnesota ("Norwest"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire M & D Holding Company ("M & D") and thereby indirectly acquire First State 1. Norwest proposes to acquire Bank by merging M & D into Norwest and subsequently merging Bank into a newly chartered national bank, to operate under the name of Bank of Spring Lake Park, N.A. The proposed Bank merger is subject to approval by the Office of the Comptroller of the Currency ("OCC") under the Bank Merger Act (12 U.S.C. § 1828(c)). 2. Asset data are as of March 31, 1993. 3. State and market share data are as of June 30, 1992. 4. The Minneapolis-St. Paul banking market is comprised of Anoka, Hennepin, Ramsey, Washington, Carver, Scott, and Dakota Counties, and portions of Chisago, Le Sueur, Sherburne, and Wright Counties in Minnesota, and the town of Hudson in St. Croix County in Wisconsin. 5. Market share data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included thrift deposits in the calculation of market share on a 50 percent weighted basis. See, e.g., First Hawaiian Inc., 77 Federal Reserve Bulletin 52 (1991). Legal Developments 0.18 percent of market deposits.6 Upon consummation of this proposal, Norwest would remain the second largest depository institution in the market, controlling deposits of $7.5 billion, representing 28 percent of market deposits. The Herfindahl-Hirschman Index ("HHI") would increase by 10 points to 2026.7 The Board previously has indicated that merger transactions in the Minneapolis-St. Paul banking market involving one of the two largest depository institutions in the market warrant close review because of the size of these institutions relative to other market competitors.8 In this case, M & D is one of the smaller depository organizations in the Minneapolis-St. Paul banking market, controlling 0.18 percent of market deposits. Even considering the effect on market concentration in light of previous acquisitions by the two largest depository institutions, this proposal would not have a significantly adverse competitive effect in the market. In addition, 103 competitors will remain in the market, including 93 commercial banks and 10 thrifts. The Minneapolis-St. Paul banking market is a major urban area and is attractive for entry. Seven commercial banking institutions, including two banks chartered de novo in 1990, and one thrift institution have entered the market since early 1988. Moreover, one of the commercial banking institutions that has entered the market during this period has become the fourth largest depository institution in the market. Minnesota has relaxed its restrictions on interstate banking acquisitions, which has increased the number of potential entrants into the market.9 In addition, banks with their principal office within the seven-county area that comprises most of the Minneapolis-St. Paul banking market may establish detached facilities (branches) 6. In addition to Bank, the owners of M & D also control First Bank Coon Rapids, Coon Rapids, Minnesota ("Coon Rapids Bank"), with deposits of $62 million in the Minneapolis-St. Paul banking market. The owners have reached a separate agreement to sell their interest in Coon Rapids Bank to another bank holding company that already is in the market. 7. 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 above 1800 is considered highly concentrated. In such markets, the Justice Department is likely to challenge a merger that increases the HHI by more than 50 points. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anti-competitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by 200 points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anti-competitive effects implicitly recognize the competitive effects of limited-purpose lenders and other non-depository financial entities. 8. See First Bank System, Inc., 79 Federal Reserve Bulletin 50 (1993). In this regard, acquisitions by either of these two banking organizations of a series of depository organizations with relatively small market shares could, on a cumulative basis, lead to significant anti-competitive effects. 9. See Reciprocal Interstate Banking Act, Minn. Stat. Ann. § 48.90 et seq. 879 through mergers elsewhere within these seven counties without being subject to the five-branch limitation otherwise imposed under Minnesota law.10 In light of all the facts in this case, including the number of competitors remaining in the market, the size of M & D, and other facts of record, the Board concludes that consummation of this proposal would not have a significantly adverse effect on competition or the concentration of resources in the MinneapolisSt. Paul banking market or any other relevant banking market. Other Considerations The Board concludes that the financial and managerial resources and future prospects of Norwest, its subsidiaries, and M & D are consistent with approval. The Board also concludes that considerations relating to the convenience and needs of the communities to be served and the other supervisory factors that the Board must consider under section 3 of the BHC Act are consistent with approval of this proposal.11 Based on all the facts of record, including the commitments made by Norwest in connection with this application, the Board has determined that the application should be, and hereby is, approved. The Board's approval of this proposal is expressly conditioned on compliance with the commitments made in connection with this application. The commitments and conditions relied on by the Board in reaching its decision are both deemed to be conditions imposed in writing by the Board in connection with its findings and decision, and, as such, may be enforced in proceedings under applicable law. 10. See Minn. Stat. Ann. § 49.34, subd. 2(b). 11. The Board has received a comment from a former customer of Norwest Bank Mesabi, N.A., Virginia, Minnesota ("Norwest Mesabi"), alleging improper acts by bank personnel in connection with a foreclosure proceeding initiated by Norwest Mesabi on real estate collateral securing several of the commenter's loans. Norwest denies these allegations and notes that Norwest Mesabi's right to take title to the real estate collateral has been litigated by the commenter in Minnesota state court. The Board also notes that the commenter's allegations are currently under investigation by Norwest Mesabi's primary federal banking regulator, the OCC, which has the statutory authority to take appropriate actions if the commenter's allegations can be verified. This commenter also generally asserts that Norwest Mesabi's lending practices do not meet the requirements of the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). The Board notes that Norwest Mesabi received a "satisfactory" rating from the OCC at its most recent examination for CRA performance, and 84 of the 85 subsidiary banks of Norwest received a "satisfactory" or "outstanding" rating from their primary federal banking regulator at their most recent examination for CRA performance. The remaining bank, which represents less than 1 percent of Norwest's total consolidated assets, has taken appropriate steps to address the weaknesses in its CRA program. In light of all the facts of record, including relevant examination reports, the Board does not believe that these comments warrant denial of this application. 880 Federal Reserve Bulletin • September 1993 This transaction shall not be consummated before the thirtieth calendar day following the effective date of this Order, or later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of Minneapolis, acting pursuant to delegated authority. By order of the Board of Governors, effective July 15, 1993. Voting for this action: Chairman Greenspan and Governors Mullins, Lindsey, and Phillips. Voting against this action: Governors Angell, Kelley, and LaWare. JENNIFER J. JOHNSON Associate Secretary of the Board by 714 points. This proposal is the fourth acquisition for Norwest in the last five and one-half years and represents through a series of acquisitions an increase of 8 percentage points in market share and of 291 points in market concentration as measured by the HHI. Under these circumstances, we believe that any additional acquisition in this market by these companies would result in a substantial lessening of competition and we would not approve any further acquisitions by them in this market in the absence of a significant change in the market's structure. July 15, 1993 Pinnacle Bancorp, Inc. Central City, Nebraska Dissenting Statement of Governors Angell, Kelley, and LaWare Order Approving the Acquisition of a Bank Holding Company and the Merger of Banks We disagree with the Board's action in this case. In light of previous acquisitions by this company and the other large depository institution in the MinneapolisSt. Paul banking market, we believe that this proposal would continue the trend towards a substantial concentration of banking resources in this market. In previous cases we have noted that the Minneapolis-St. Paul market is unusual among major banking markets in that the two largest depository institutions control over 60 percent of market deposits. These institutions have over the years increased their dominant position in the market through acquisitions of competitors rather than through de novo expansion. For example, the third largest competitor in the market was recently acquired by one of the two market leaders with the result that the largest remaining depository institution competing with the two market leaders is a thrift controlling market deposits of less than 5 percent. The two market leaders have been permitted to diminish competition in the Minneapolis-St. Paul market through absorption of competitors because the traditional analysis applied by the Board does not give sufficient weight to the competitive effects of a series of acquisitions by these institutions. In this regard, the two largest institutions in this market could acquire virtually every remaining competitor without reaching the threshold level for challenge under the Board's methodology. This proposal is the ninth acquisition of a competitor made by the two dominant companies in the market in the last five and one-half years. These companies have increased through a series of acquisitions their market share by 16 percentage points and market concentration as measured by the Herfindahl-Hirschman Index ("HHI") Pinnacle Bancorp, Inc., Central City, Nebraska ("Pinnacle"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire all the voting shares of Windsor Bancorporation, Inc. ("Windsor"), and thereby indirectly acquire Bank of Windsor ("Bank"), both of Windsor, Colorado. Pinnacle also has applied under section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(c)) (the "Bank Merger Act") to merge Bank with The First Security Bank of Windsor, Windsor, Colorado ("First Security Bank"), a subsidiary bank of Pinnacle.1 Notice of the applications, affording interested persons an opportunity to submit comments, has been published (58 Federal Register 26,785 (1993)). As required by the Bank Merger Act, reports on the competitive effects of the merger were requested from the United States Attorney General, the Office of the Comptroller of the Currency ("OCC"), and the Federal Deposit Insurance Corporation ("FDIC"). 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 the BHC Act and the Bank Merger Act. 2 Pinnacle, with consolidated assets of $893.9 million, controls 15 banks in Nebraska, Colorado, Wyoming, and Kansas.3 Pinnacle is the 19th largest commercial banking organization in Colorado, controlling deposits 1. Following consummation of this proposal, Bank will be merged into First Security Bank. The surviving bank will be renamed Bank of Colorado, Windsor, Colorado. 2. See 12 U.S.C. § 1842(c), 1828(c)(5). 3. Asset data are as of December 31, 1992. Legal Developments of $157.8 million, representing less than 1 percent of the total deposits in commercial banking organizations in the state.4 Windsor is the 147th largest commercial banking organization in Colorado, controlling deposits of $20.5 million, representing less than 1 percent of the total deposits in commercial banking organizations in the state. Upon consummation of this proposal, Pinnacle would become the 15th largest commercial banking organization in Colorado, controlling deposits of $178.3 million, representing less than 1 percent of the total deposits in commercial banking organizations in the state. Douglas Amendment Section 3(d) of the BHC Act, the Douglas Amendment, prohibits the Board from approving an application by a bank holding company to acquire any bank located outside the bank holding company's home state, unless such acquisition is "specifically authorized by the statute laws of the State in which such bank is located, by language to that effect and not merely by implication."5 For the purposes of the Douglas Amendment, the home state of Pinnacle is Nebraska.6 Colorado law permits a bank holding company located outside of Colorado to acquire a bank in Colorado, subject to certain conditions.7 After reviewing this proposal, the Colorado State Banking Board has determined that Pinnacle's proposed acquisition of Windsor is permissible under Colorado law, and has approved this acquisition. Accordingly, Board approval of this proposal is not prohibited by the Douglas Amendment. Definition of the Relevant Banking Market The BHC Act and the Bank Merger Act provide that the Board may not approve a proposal submitted under these statutes if the proposal would result in a monopoly or the effect of the proposal may be substantially to lessen competition in any relevant banking market, unless the Board finds "that the anticom- 4. State deposit data are as of December 31, 1992. 5. 12 U.S.C. § 1842(d). 6. A bank holding company's home state is that state in which the operations of the bank holding company's banking subsidiaries were principally conducted on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. The operations of a bank holding company are considered principally conducted in that state in which the total deposits of all such banking subsidiaries are largest. 7. See Colo. Rev. Stat. § 11-6.4-103 (Supp. 1992). See also First Western Corporation, 79 Federal Reserve Bulletin 69, 72 (1993) (approval of the acquisition of a Colorado bank by a Nebraska bank holding company). 881 petitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served."8 In evaluating the competitive factors in this case, the Board has carefully considered comments from a number of individuals ("Protestants") who maintain that the proposal would result in significantly adverse competitive effects in the market for banking services in the town of Windsor, Colorado ("Windsor"). Bank and First Security Bank are the only two banking organizations located in Windsor. The Board and the courts have found that the relevant banking market for analyzing the competitive effects of a proposal must reflect commercial and banking realities and must consist of the local area where local customers can practicably turn for alternatives.9 The Board has considered all the facts in this case, including comments from the Protestants, and concludes that the relevant geographic market to evaluate the competitive effects of this proposal is the area that includes all of Weld County, Colorado, except the towns of Erie, Fort Lupton, Frederick, and Keenesburg (hereinafter referred to as the "Greeley banking market"). Windsor, a town of approximately 5,000 in Weld County, is 12 miles northwest of Greeley. Greeley has a population of more than 60,000 and is the business center of Weld County. Travel time to Greeley from Windsor is relatively short, and data on traffic patterns collected by the Colorado Highway Department indicate that there is substantial commuting between Greeley and the western portions of Weld County, including Windsor. Greeley also has been designated as a Rand McNally Basic Trading Center for the area that includes Windsor, because Greeley serves as a center for shopping by residents of that area. This Trading Center designation is based on a determination that consumers in this area ordinarily travel to Greeley to purchase retail goods.10 Residents of Windsor are informed of available practicable alternatives for banking services in the Greeley banking market through commercial advertising. For example, the daily newspaper in Greeley, The Greeley Tribune, has a paid circulation in Windsor of approximately 1,200, reaching more than half of the 8. 12 U.S.C. §§ 1842(c), 1828(c)(5). 9. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673, 674 (1982). 10. In this regard, Windsor has no supermarkets and only one small grocery store. Trading Centers such as Greeley also are viewed as serving their surrounding areas with various specialized services, such as medical care, entertainment, higher education and a daily newspaper. 882 Federal Reserve Bulletin • September 1993 2,000 households in Windsor. In addition, bankers interviewed by the Federal Reserve Bank of Kansas City in Greeley confirm that their institutions are in competition with banks in Windsor,11 and that the residents of Windsor consider Greeley banks as their primary alternatives for banking services outside Windsor. After review of this data and the other facts of record, the Board believes that the record indicates that customers in Windsor reasonably can and do turn to providers of banking services throughout the Greeley banking market. Based on all the facts of record, the Board finds that the relevant geographic market in this case is the Greeley banking market as defined above. The Attorney General, the OCC, and the FDIC have not objected to consummation of this proposal or indicated that the proposal would have any significantly adverse competitive effects. Accordingly, in light of the small increase in concentration, the number of competitors remaining in the market, and other facts of record, the Board concludes that consummation of this proposal is not likely to result in any significantly adverse effect on competition in the Greeley banking market or any other relevant banking market. Other Considerations Pinnacle is the fifteenth largest commercial bank or thrift institution ("depository institution") in the market, controlling deposits of $16.6 million, representing 2 percent of total deposits in depository institutions in the market ("market deposits").12 Windsor is the fourteenth largest depository institution in the market, controlling deposits of $17.5 million, representing 2.2 percent of market deposits. Upon consummation of this proposal, Pinnacle would become the fifth largest depository institution in the Greeley banking market, controlling deposits of $34.1 million, representing 4.2 percent of market deposits. Sixteen competitors would remain in the Greeley banking market, including subsidiary banks of two large interstate banking organizations, each with market shares exceeding 20 percent. The banking market would remain moderately concentrated, and the Herfindahl-Hirschman Index ("HHI") would increase by nine points to 1551.13 The Board concludes that the financial and managerial resources, supervisory factors, and future prospects of Pinnacle and Windsor are consistent with approval of these applications. The Board also finds that considerations relating to the convenience and needs of the communities to be served are consistent with approval.14 Based on the foregoing and other facts of record, the Board has determined that the applications should be, and hereby are, approved. The Board's approval is specifically conditioned upon compliance with all of the commitments made by Pinnacle in connection with these applications. For the purpose of this action, these commitments and conditions will both be considered conditions imposed in writing and, as such, may be enforced in proceedings under applicable law. This transaction shall not be consummated before the thirtieth calendar day following the effective date of this Order, or later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the 11. The Reserve Bank surveyed all the banks headquartered in Greeley. 12. Market data are as of June 30,1992. Market share data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included thrift deposits in the calculation of market share on a 50 percent weighted basis. See, e.g., First Hawaiian Inc., 77 Federal Reserve Bulletin 52 (1991). 13. 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. A market in which the post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge a merger that increases the HHI by more than 50 points. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anti-competitive effects) unless the post-merger HHI is at least 1800 and the merger or acquisition increases the HHI by at least 200 points. The Justice Department has stated that the higher than normal threshold for an increase in the HHI when screening bank mergers and acquisitions for anti-competitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other non-depository financial entities. 14. Several Protestants have alleged in general terms that this proposal is not in the best interests of the community served by Bank and First Security Bank and, in particular, the elderly residents of Windsor. The Board notes that both Bank and First Security Bank received "satisfactory" ratings during their most recent examinations for performance under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) from their primary regulators (Bank—Federal Reserve Bank of Kansas City as of June 1992; First Security Bank—FDIC as of July 1992). In this regard, examiners found that the lending record of both banks, including small business lending, satisfactorily assisted in meeting the credit needs of the community, including low- and moderate-income areas. The record also indicates that First Security Bank offers a variety of banking services to customers, age 59 or over, including a no-fee checking account that features free money orders, travelers checks, safety deposit boxes, and notary service. Based on all facts of record, including reports of examination, the Board does not believe that the comments warrant denial of these applications. Competitive Effects in the Greeley Banking Market Legal Developments Federal Reserve Bank of Kansas City, pursuant to delegated authority. By order of the Board of Governors, effective July 12, 1993. Voting for this action: Vice Chairman Mullins and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and not voting: Chairman Greenspan. JENNIFER J. JOHNSON Associate Secretary of the Board Rice Insurance Agency, Inc. Strasburg, Colorado Order Approving Acquisition of Bank Rice Insurance Agency, Inc., Strasburg, Colorado ("Rice"), 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 (12 U.S.C. § 1842) to acquire 90.1 percent of the voting shares of The Byers State Bank, Byers, Colorado ("Byers Bank").1 Notice of the application, affording interested persons an opportunity to submit comments, has been published (58 Federal Register 27,573 (1993)). 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. Rice operates one subsidiary bank in Colorado. The principal shareholders of Rice control other banks that operate in Colorado and New Mexico (collectively, the "Moore Chain"). The Moore Chain is the 16th largest commercial banking organization in Colorado, controlling $169.3 million in deposits, representing less than 1 percent of total deposits in commercial banks in the state.2 Byers Bank is the 158th largest commercial banking organization in Colorado, controlling $17.4 million in deposits, representing less than 1 percent of total deposits in commercial banks in the state. Upon consummation of the proposed acquisition, the Moore Chain would become the 15th largest commercial banking organization in Colorado, controlling $186.7 million in deposits, representing less than 1 percent of total deposits in commercial banks in the state. 1. Rice intends to merge Byers Bank with and into Rice's sole subsidiary, The First National Bank of Strasburg, Strasburg, Colorado ("Strasburg Bank"). This bank merger is subject to the approval of the Office of the Comptroller of the Currency ("OCC") pursuant to the Bank Merger Act (12 U.S.C. § 1828(c)). 2. State deposit data are as of December 31, 1992. 883 Competitive Considerations The BHC Act provides that the Board may not approve a proposal submitted under section 3 of the BHC Act if: (1) The proposal would result in a monopoly in any relevant banking market, or (2) The effect of the proposal may be substantially to lessen competition in any relevant banking market, unless the Board finds "that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served."3 The Board has received comments from several members of the Byers community ("Protestants") objecting to Rice's proposed acquisition of Byers Bank on competitive grounds. These objections are based upon Protestants' concerns that consummation of the proposal would have anticompetitive effects in the market for banking services in the area currently served by Byers Bank. Protestants contend that the acquisition would eliminate competition in this relatively rural area.4 Definition of the Relevant Banking Market The Board and the courts have found that the relevant banking market for analyzing the competitive effects of a proposal must reflect commercial and banking realities and must consist of the local area where the banks involved offer their services and where local customers can practicably turn for alternatives.5 In determining the relevant geographic market in this case, the Board has carefully considered all the facts of record, including Protestants' comments and data collected by the Federal Reserve Bank of Kansas City and Board staff. A number of factors in this case indicate that the communities served by Strasburg Bank and Byers Bank are, as an economic matter, part of the Denver metropolitan area. Bennett, Strasburg, and Byers are relatively small communities, each having a population of fewer than 2,000 persons.6 Few services or employment opportunities are available locally. For example, among the three communities there are no 3. 12 U.S.C. § 1842(c)(1). 4. Protestants assert that the anticompetitive effects of the proposal could include a reduction of banking services in Byers, as well as increased fees and less competitive interest rates, all to the detriment of the local economy. 5. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673,674 (1982). 6. Population data are based on 1990 U.S. Census data. 884 Federal Reserve Bulletin • September 1993 supermarkets, automobile dealerships, or hospitals, and only one physician, dentist, and pharmacist. The more developed portion of the Denver metropolitan area is the nearest location where these and other services and employment opportunities are readily available. In addition, each of these communities is a part of the Denver, Colorado, Primary Metropolitan Statistical Area ("Denver PMSA")7 as defined by the United States government. A PMSA represents a core geographic area containing a large population nucleus, together with adjacent communities having a high degree of economic and social integration with that core.8 The Board also notes that these communities are a part of the television and other media markets of the Denver area. In addition, commuting data indicate that a substantial portion of the labor force of these communities travels to Denver or adjacent areas for employment.9 For example, Byers, which is the furthest of these communities from Denver, has a local labor force of 403 persons. Of these persons, 282 were employed outside Byers, and 234 commuted for at least a halfhour to work. The Board notes that, in view of the presence of Interstate 70, Denver and adjacent areas are accessible to the Byers population within this time frame. Highway vehicle counts confirm that much of the local labor force travels toward Denver for employment. Vehicle counts along Interstate 70 between these communities and Denver are substantially greater than highway vehicle counts east of Byers.10 After review of these data and the other facts of record, the Board believes that customers in Bennett, Strasburg, and Byers, and other eastern portions of the Denver PMSA, practicably can turn to providers of banking services in more urban portions of the metropolitan area. Based on all the facts of record, the 7. Strasburg Bank and Byers Bank operate in the eastern portion of the Denver PMSA. The Denver PMSA is comprised of Adams County, Arapahoe County, Denver County, Douglas County, and Jefferson County, all in Colorado. Strasburg Bank has offices in Bennett, Colorado, and Strasburg, Colorado, and the sole office of Byers Bank is located in Byers, Colorado. Each of these towns is situated along a major highway, Interstate 70, between 15 and 30 miles east of Aurora, Colorado, a Denver suburb. Interstate 70 connects these towns to Aurora and Denver. 8. Executive Office of the President, Office of Management and Budget, Uses of Metropolitan Areas by Federal Agencies, p. 1 (June 30, 1993). The Board notes that a PMSA, such as the Denver PMSA, is a component part of a larger metropolitan area usually referred to as a Consolidated Metropolitan Statistical Area. 9. Commuting data are derived from 1990 U.S. Census data, and were obtained from the Denver Regional Council of Governments. 10. In addition, the Board notes that the more developed portions of the Denver MSA are expanding eastward toward these communities. In this regard, the Board notes that a major international airport is being constructed less than 15 miles from Bennett. Both the construction and operation of this facility are expected to result in expanded employment opportunities and greater economic integration of these portions of the Denver PMSA. Board has determined that the relevant geographic market within which to evaluate the competitive effects of this proposal is the Denver, Colorado, banking market ("Denver banking market").11 Competitive Effects in the Denver Banking Market The Moore Chain is the 13th largest commercial banking organization in the Denver banking market, controlling deposits of $158.2 million, representing approximately 1.1 percent of total deposits in depository institutions12 in the market ("market deposits").13 Byers Bank is the 62d largest depository institution in the market, controlling deposits of $16.2 million, representing less than 1 percent of market deposits. Upon consummation of this proposal, the Moore Chain would remain the 13th largest depository institution in the Denver banking market, controlling deposits of $174.4 million, representing approximately 1.2 percent of market deposits. The Herfindahl-Hirschman Index ("HHI") for the market would increase by 1 point to 831.14 Numerous depository institutions would remain in operation in the Denver banking market upon consummation of this proposal. In addition, the Board sought comments on the competitive effects of this proposal from both the Department of Justice and the OCC. Neither the Department of Justice nor the OCC objected to consummation of the proposal or indicated that the proposal would have any significant adverse competitive effects. On the basis of the foregoing considerations and all the other facts of record, the Board has concluded that consummation of the proposed bank acquisition would not result in any significantly adverse effect on competition or the concen11. The Denver banking market is approximated by the Denver RMA; the Boulder RMA; the non-RMA portions of Adams County, Arapahoe County, and Boulder County; the southern portion of Weld County, including the towns of Erie, Fort Lupton, Frederick, and Kennesburg; and the town of Parker in Douglas County. 12. In this context, depository institutions include commercial banks, savings banks and savings associations. Market share data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). 13. Market deposit data are as of June 30, 1992. 14. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (1984), a market in which the post-merger HHI is below 1000 is considered to be unconcentrated. The Justice Department has informed the Board that, as a general matter, a bank merger or acquisition will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the transaction increases the HHI by more than 200 points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other non-depository financial entities. Legal Developments tration of banking resources in the Denver banking market or any other relevant banking market. Convenience and Needs Considerations The Board also has evaluated considerations relating to the convenience and needs of the communities to be served. In this regard, the Board has carefully considered Protestants' comments praising the convenience, services, and other aspects of Byers Bank, and expressing concern that these positive features of Byers Bank will be diminished if this proposal is consummated. In response to these comments, Rice has stated that it will retain many of the personnel currently employed by Byers Bank. Rice also has stated that it is committed to serve its entire customer base, and has noted that, as a branch of Strasburg Bank, the Byers operation will be able to offer significantly larger lending limits to its consumer and business customers. The Board also has noted that Strasburg Bank received a "satisfactory" rating for performance under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA") from the OCC at its most recent examination conducted as of February 1993, and that Rice has committed to implement the CRA programs and policies of Strasburg Bank at the acquired institution in Byers. On the basis of the foregoing considerations and all the other facts of record, the Board has concluded that considerations relating to the convenience and needs of the communities to be served, including matters relating to CRA performance, are consistent with approval of this proposal. Other Considerations On the basis of all the facts of record, including all the representations and commitments furnished in this case, the Board also has concluded that the financial and managerial resources and future prospects of Rice, Strasburg Bank, and Byers Bank, as well as affiliated organizations in the Moore Chain, and all other supervisory factors the Board must consider under section 3 of the BHC Act, are consistent with approval of this proposal. Based on the foregoing and other facts of record, the Board has determined that the application should be, and hereby is, approved. This approval is expressly conditioned upon compliance with all of the commitments made in connection with this proposal and with the conditions referenced in this Order. The commitments and conditions relied on by the Board in reaching this decision are deemed to be conditions imposed in writing by the Board in connection with its findings 885 and decision, and, as such, may be enforced in proceedings under applicable law. The acquisition 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 Kansas City, acting pursuant to delegated authority. By order of the Board of Governors, effective July 14, 1993. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. JENNIFER J. JOHNSON Associate Secretary of the Board SouthTrust Corporation Birmingham, Alabama Order Approving the Merger of Bank Holding Companies SouthTrust Corporation, Birmingham, Alabama, and SouthTrust of Covington County, Inc., Opp, Alabama (together, "SouthTrust"), bank holding companies within the meaning of the Bank Holding Company Act ("BHC Act"), have applied under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire County Bancshares, Inc., Troy, Alabama ("CBI"), and thereby acquire indirectly CBI's subsidiary bank, Pike County Bank, Troy, Alabama.1 Notice of the application, affording interested persons an opportunity to submit comments, has been published (58 Federal Register 28,878 (1993)). 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. SouthTrust, with consolidated assets of approximately $13.4 billion, controls 41 subsidiary banks in Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee.2 SouthTrust is the second largest commercial banking organization in Alabama, controlling deposits of approximately $6.1 billion, representing 18.1 percent of total deposits in commercial banking organizations in the state.3 CBI is the 40th largest commercial banking organization in Alabama, 1. SouthTrust proposes to acquire CBI by merging CBI into SouthTrust of Covington County, Inc., and subsequently merging Pike County Bank with SouthTrust's subsidiary bank, SouthTrust Bank, N.A., Montgomery, Alabama ("SouthTrust Bank"). 2. Asset data are as of March 31, 1993. 3. Deposit data are as of June 30, 1992. 886 Federal Reserve Bulletin • September 1993 controlling deposits of $86.2 million, representing less than 1 percent of the total deposits in commercial banking organizations in the state. Upon consummation of the proposed transaction, SouthTrust would remain the second largest commercial banking organization in Alabama, controlling deposits of $6.2 billion, representing 18.4 percent of total deposits in commercial banking organizations in the state. SouthTrust and CBI compete directly in the Pike County banking market.4 SouthTrust is the smallest of the six commercial banking organizations in the market, controlling deposits of approximately $15.5 million, representing 4.6 percent of total deposits in commercial banks in the market ("market deposits").5 CBI is the second largest commercial banking organization in the market, controlling deposits of approximately $86.2 million, representing 25.9 percent of market deposits. Upon consummation of this proposal, SouthTrust would become the second largest commercial banking organization in the Pike County banking market, controlling deposits of approximately $101.6 million, representing approximately 30.5 percent of the total deposits in commercial banks in the market. The Herfindahl-Hirschman Index ("HHI") would increase by 240 points to 2608.6 A number of factors indicate that the increase in concentration levels in the Pike County banking market as measured by the HHI tends to overstate the competitive effects of this proposal. For example, upon consummation of this proposal, five commercial bank competitors, including the third largest bank holding company in the state, would continue to serve the market. The Pike County market also has experienced a decrease in concentration in recent years; between 1989 and 1992, the market HHI for commercial banks decreased by 177 points. The Board also notes that the Pike County banking market is relatively attractive for entry. The economy of Pike County is relatively diverse for a predominantly rural community. The deposit growth rate and the deposits per banking office exceed comparable state averages. In addition, the legal barriers to entry 4. The Pike County banking market is approximated by Pike County, Alabama. 5. No thrift organizations operate in the Pike County banking market. 6. 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 above 1800 is considered highly concentrated. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anti-competitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by 200 points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anti-competitive effects implicitly recognize the competitive effect of limited purpose lenders and other non-depository financial entities. for the market are low. Alabama permits statewide branching, and is part of the Southeast Regional Banking Pact,7 which allows bank holding companies in other Southeast Regional Pact states to acquire banks in Alabama. The Board has sought comments from the Attorney General on the competitive effects of this proposal. The Attorney General reviewed the competitive effects of the proposal in the context of the merger of Pike County Bank and SouthTrust Bank under the Bank Merger Act and has indicated that the proposal is not likely to result in any significantly adverse competitive effects in any market. Based on all the facts of record in this case, the Board concludes that consummation of this proposal is not likely to have a significantly adverse effect on competition or concentration of banking resources in the Pike County banking market or in any other relevant banking market. The Board also concludes that the financial and managerial resources and future prospects of SouthTrust, CBI and their subsidiary banks are consistent with approval of this proposal. Convenience and needs considerations and the other supervisory factors that the Board is required to consider under section 3 of the BHC Act, also are consistent with approval. Based on the foregoing, and other facts of the record, and subject to the commitments made by SouthTrust in this case, the Board has determined that this application should be, and hereby is, approved. The Board's approval of this proposal is specifically conditioned on compliance with the commitments made by SouthTrust in connection with this application and with the conditions referenced in this Order. For purposes of this action, the commitments and conditions relied on in reaching this decision are both conditions imposed in writing by the Board, and, as such, may be enforced in proceedings under applicable law. This transaction shall not be consummated before the thirtieth calendar day following the effective date of this Order, or later than three months after the effective date of the Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of Atlanta, acting pursuant to delegated authority. By order of the Board of Governors, effective July 14, 1993. 7. The Alabama Regional Reciprocal Banking Act of 1986 defines the "region" to include the states of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia, and the District of Columbia. Ala. Code § 5-13A-2(10) (Supp. 1987). Legal Developments Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. JENNIFER J. JOHNSON Associate Secretary of the Board Orders Issued Under Section 4 of the Bank Holding Company Act AMCORE Financial, Inc. Rockford, Illinois Order Approving an Application to Act as Agent in the Private Placement of Securities AMCORE Financial, Inc., Rockford, Illinois ("Applicant"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied, pursuant to 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 wholly owned subsidiary, AMCORE Investment Banking, Inc., Rockford, Illinois ("Company"), to act as agent for issuers in the private placement of all types of securities. Notice of the application, affording interested persons an opportunity to submit comments, has been published (58 Federal Register 13,493 (1993)). 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.1 Applicant, with total consolidated assets of $1.2 billion, is the 18th largest commercial banking organization in Illinois.2 Applicant operates five banking subsidiaries in Illinois, and engages in a variety of permissible nonbanking activities. Private Placement Activities Private placement involves the placement of new securities with a limited number of sophisticated purchasers in a nonpublic offering. A financial intermediary in a private placement transaction acts solely as an agent for the issuer in soliciting purchasers, and does not purchase the securities and attempt to resell them. Securities that are privately placed are not subject to 1. The Board received a joint comment from two organizations maintaining that Applicant's record of lending to African-Americanowned businesses in southwest Rockford is deficient under the Community Reinvestment Act ("CRA"). The Board previously has determined that the CRA by its terms generally does not apply to applications by bank holding companies to acquire nonbanking companies under section 4(c)(8) of the BHC Act. See The Mitsui Bank, Limited, 76 Federal Reserve Bulletin 381 (1990). 2. Data are as of December 31, 1992. 887 the registration requirements of the Securities Act of 1933, and are offered only to financially sophisticated institutions and individuals and not the public. Applicant will not privately place registered securities and will only place securities with customers who qualify as accredited investors. The Board previously has determined by Order that, subject to prudential limitations that address the potential for conflicts of interests, unsound banking practices, or other adverse effects, the proposed private placement 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. 3 The Board also previously has determined that acting as agent in the private placement of securities does not constitute underwriting and dealing in securities for purposes of section 20 of the Glass-Steagall Act, and that revenue derived from these activities is not subject to the 10 percent revenue limitation on bank-ineligible securities underwriting and dealing.4 In order to address the potential for conflicts of interests, unsound banking practices, and other adverse effects, Applicant has committed that Company will conduct its private placement activities using the same methods and procedures, and subject to the same prudential limitations established by the Board in the Bankers Trust and J.P. Morgan orders.5 Applicant has requested a modification of these limitations to allow Company to have one of three directors in common with an AMCORE subsidiary bank.6 The prohibition against interlocks originally was intended to preclude a member bank from engaging in impermissible securities activities, to prevent common control of the decision-making process within a bank and its securities affiliate, and to protect investors against potential conflicts of interest where one individual is required to advance the differing objectives of a bank and its securities affiliate. These concerns do not appear to be significant in this application. The applicant is not seeking authority to engage in securities underwriting or dealing activities. The Board has ruled that private placement activities conducted directly by a bank do not constitute "underwriting" or "dealing" in securities, be- 3. See Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) ("Bankers Trust"); J.P. Morgan and Company, Inc., 76 Federal Reserve Bulletin 26 (1990) ("/.P. Morgan"). 4. See Bankers Trust. 5. See Bankers Trust; J.P. Morgan. Among the restrictions governing private placement activities are that Company will not privately place registered investment company securities, and will not privately place any securities of investment companies that are advised by Applicant or any of its affiliates. 6. The director who will serve on the boards of both the bank and Company also will serve as an officer of Applicant. In addition, another director of Company will serve as an officer of Applicant. 888 Federal Reserve Bulletin • September 1993 cause these activities do not involve a "public offering" of the securities and are conducted solely as agent.7 All the proposed activities could be performed directly by Applicant's subsidiary banks. Consequently, in this instance a management interlock is not prohibited by the Glass-Steagall Act. Because Company has no salesman's stake in the securities it recommends, the potential for conflicts of interest is substantially mitigated. Moreover, it is unlikely that investors would confuse Company with Applicant's subsidiary banks, because the customers of Company will be sophisticated "institutional customers." Under these circumstances, the Board believes that a prohibition against director interlocks is not required by law, and the requested director interlock between Company and Applicant's subsidiary bank would be appropriate.8 Financial Factors, Managerial Resources, and Other Considerations In every case involving a nonbanking acquisition by a bank holding company under section 4 of the BHC Act, the Board considers the financial condition and resources of Applicant and its subsidiaries and the effect of the transaction on these resources.9 Based on the facts of this case, the Board concludes that financial considerations are consistent with approval of this application. The managerial resources of Applicant also are consistent with approval. In order to approve this application, the Board is required to determine that the performance of the proposed activities by Applicant can reasonably be expected to produce public benefits that outweigh adverse effects under the proper incident to banking standard of section (4)(c)(8) of the BHC Act. Under the framework established in this Order and prior decisions, consummation of this proposal is not likely to result in any significant adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. In addition, the Board expects that the de novo entry of Company into the market for these services would increase the level of competition among providers of these services. Accordingly, the Board has determined that the performance of the proposed activities by Company can reasonably be 7. Statement Concerning Applicability of the Glass-Steagall Act to the Commercial Paper Placement Activities of Bankers Trust Company (June 4, 1985), affd sub nom. Securities Industry Association v. Board of Governors, 807 F.2d 1052 (D.C. Cir. 1986), cert, denied, 483 U.S. 1005 (1987). 8. See First Eastern Corporation, 76 Federal Reserve Bulletin 764 (1990). 9. See 12 C.F.R. 225.24. expected to produce public benefits that would outweigh possible adverse effects under the proper incident to banking standard of section (c)(8) of the BHC Act. Based on the foregoing and all the facts of record, the Board has determined to, and hereby does, approve the application subject to all the commitments made by Applicant in connection with this application, and the terms and conditions set forth in this Order, and in the above-noted Board orders. The Board's determination also is subject to all the terms and conditions set forth in Regulation Y, including those in sections 225.4(d) and 225.23(b), and to the Board's authority to require modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, and to prevent evasion of, the provisions of the BHC Act, and the Board's regulations and orders issued thereunder. The Board's decision specifically is conditioned on compliance with all the commitments made in connection with this application, including the commitments discussed in this Order and the conditions set forth in the above-noted Board regulations and orders. These commitments and conditions are deemed to be conditions imposed in writing by the Board in connection with its findings and decision, and may be enforced in proceedings under applicable law. 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 Chicago pursuant to delegated authority. By order of the Board of Governors, effective July 2, 1993. Voting for this action: Chairman Greenspan and Governors Angell, Kelley, Lindsey, and Phillips. Absent and not voting: Governors Mullins and LaWare. JENNIFER J. JOHNSON Associate Secretary of the Board Continental Bank Corporation Chicago, Illinois Order Approving Application to Engage De Novo in Asset Management, Servicing, and Collection Activities Continental Bank Corporation, Chicago, Illinois ("Continental"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(3) Legal Developments of the Board's Regulation Y (12 C.F.R. 225.23(a)(3)), to engage de novo in asset management, servicing, and collection activities through its wholly owned subsidiary Repechage Partners Ltd., Chicago, Illinois ("Repechage"). Notice of the application, affording interested persons an opportunity to submit comments, has been published (58 Federal Register 34,436 (1993)). The time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set forth in section 4(c)(8) of the BHC Act. Continental, with total consolidated assets of approximately $22 billion, is the second largest banking organization in Illinois.1 Continental operates one subsidiary bank and engages directly and through subsidiaries in a variety of nonbanking activities. Repechage would provide asset management services to the Resolution Trust Corporation ("RTC") and the Federal Deposit Insurance Corporation ("FDIC").2 In addition, Repechage proposes to provide these services to unaffiliated third party investors that purchase pools of assets assembled by the RTC or the FDIC from troubled financial institutions, and generally to unaffiliated financial and non-financial institutions with troubled assets. Under the proposal, neither Continental nor Repechage would directly or indirectly acquire an ownership interest in the assets that they manage or in the institutions for which they provide asset management services. In addition, Repechage would not engage in providing real property management or real estate brokerage services as part of its proposed activities.3 The Board has previously determined that, within certain parameters, providing asset management ser- 1. Data are as of March 31, 1993. 2. Asset management encompasses the liquidation (or other disposition) of loans and their underlying collateral, including real estate and other assets acquired through foreclosure or in satisfaction of debts previously contracted ("DPC property"). Specific individual activities include: classifying and valuing loan portfolios; filing reviews of loan documentation; developing collection strategies; negotiating renewals, extensions, and restructuring agreements; initiating foreclosure, bankruptcy, and other legal proceedings, where appropriate; and developing and implementing market strategies for the sale or refinancing of individual loans and for the packaging and sale of whole or securitized loan portfolios. In addition, Continental would conduct and review (either directly or through independent contractors) appraisals and environmental inspections; provide asset valuations; perform cash-flow and asset-review analyses; contract with and supervise independent property managers; and lease (either directly or through independent contractors) real estate and other DPC property. Continental also would dispose of DPC property by developing and implementing marketing strategies for the sale of DPC property, either individually or packaged for investors or developers. 3. Continental will contract with independent third parties to obtain these services for assets under the management of Repechage. 889 vices for assets originated by financial institutions4 and their bank holding company affiliates is an activity that is closely related to banking for purposes of the BHC Act.5 Continental proposes to conduct all asset management activities under the same terms, and subject to the same conditions as in previous Board orders regarding this activity.6 For example, Continental has committed that it will not own the stock of, or be represented on the board of directors of, any unaffiliated institution for which Repechage provides asset management services or own the assets under management. In addition, Continental has committed that Repechage will not establish policies or procedures of general applicability for the institutions whose assets it manages, and that the services of Repechage for unaffiliated institutions would be limited to asset management, servicing, and collection activities.7 Continental proposes to engage in asset management activities for assets originated by non-financial institutions as well as financial institutions.8 These assets, however, would be limited to the types of assets that a financial institution would have the authority to originate.9 Accordingly, the Board believes that Continental would have the expertise to engage in the management of these types of assets, regardless of the originating entity, and that the proposal is within the scope of the asset management approval in the Board's prior orders.10 For these reasons, the Board concludes that Continental's proposed activities are closely related to banking. 4. Financial institutions include banks, savings associations, and credit unions. 5. See First Interstate Bancorp, 77 Federal Reserve Bulletin 334 (1991); Banc One Corporation, 77 Federal Reserve Bulletin 331 (1991); NCNB Corporation, 77 Federal Reserve Bulletin 124 (1991); First Florida Banks, Inc., 74 Federal Reserve Bulletin 111 (1988). 6. Id. 7. Continental also would provide these services for a limited period of time. The Board notes that, while Continental would manage the assets on an ongoing basis, the owner of the assets would retain the right to make all final decisions regarding asset dispositions and to terminate Continental as asset manager. 8. These assets include: real estate; commercial, consumer and other loans; equipment leases; and extensions of credit. Non-financial institutions include pension funds, leasing companies, finance companies, and investment companies formed to engage in asset management activities. 9. These assets would include: equipment leases that conform to section 225.25(b)(5) of the Board's Regulation Y (12 C.F.R. 225.25(b)(5)); loans secured by equipment and equipment acquired through foreclosure or in satisfaction of such leases and loans; consumer loans financing manufactured housing, vessels, vehicles, and residences; asset-based commercial loans; factored accounts receivables; and collateral for the aforementioned types of loans acquired through foreclosure or in satisfaction of such loans. Prior approval of the Board would be required before providing asset management services in connection with pools of assets of the type impermissible for a financial institution to originate. 10. See, e.g., The Dai-Ichi Kangyo Bank, Ltd., 79 Federal Reserve Bulletin 131 (1993). 890 Federal Reserve Bulletin • September 1993 The Board is also required to determine whether the performance of the proposed activity by Continental is a proper incident to banking—that is, whether the proposed activity "can reasonably be expected to produce benefits, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition conflicts of interests, or unsound banking practices." 12 U.S.C. § 1843(c)(8). Consummation of the proposal can reasonably be expected to result in public benefits. Continental's proposal would facilitate the disposal of assets of financial institutions in receivership as well as financial and non-financial institutions with troubled financial assets. Moreover, the efficient disposition of such assets can reasonably be expected to produce benefits to the public. Repechage would own no equity in the institutions for which it provides asset management services or in the assets it manages. Continental's de novo entry into the market would increase competition for these services. Continental has indicated that it may, in certain instances, seek approval to acquire institutions whose assets are being managed by Repechage. In previous cases, the Board has expressed concern that a bank holding company might obtain confidential information in providing its asset management services that would give the bank holding company a competitive advantage over other institutions in the bidding process for the failed institution under management.11 The Board also noted that such information could give the managing bank holding company a competitive advantage over the ultimate acquiror of the failed institution in markets where they both compete. To address these concerns, Continental has committed to establish and implement procedures to preserve the confidentiality of information obtained in the course of providing asset management services.12 These procedures would prevent the use of information obtained by Repechage through its asset management activities in preparing any bid that Continental may prepare to acquire an institution managed by Repechage, and would prevent Continental from competing unfairly against the winning bidder. There is no evidence in the record to indicate that consummation of this proposal is likely to result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. 11. See, e.g., NCNB Corporation, 77 Federal Reserve Bulletin 124 (1991). 12. Continental's procedures will be subject to review by the Federal Reserve System. The financial and managerial resources of Continental and its subsidiaries are also consistent with approval. Accordingly, on the basis of all the facts of record and commitments made by Continental, the Board concludes that the public benefits that would result from approval of this application outweighs the potential adverse effects, and that the public interest factors it must consider under section 4(c)(8) of the BHC Act are consistent with approval. Based upon the foregoing and all the other facts of record, including commitments made by Continental and conditions in this order, the Board has determined that this application should be, and hereby is, approved. The Board's approval is expressly conditioned upon compliance with all the commitments made by Continental in connection with this application and the conditions referred to in this order and the orders mentioned above. For the purpose of this action, these commitments and conditions will both be considered conditions imposed in writing and, as such, may be enforced in proceedings under applicable law. The Board's determination is also subject to all 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. 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 Chicago, acting pursuant to delegated authority. By order of the Board of Governors, effective July 26, 1993. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, LaWare, and Lindsey. Absent and not voting: Governor Phillips. JENNIFER J. JOHNSON Associate Secretary of the Board National Commerce Bancorporation Memphis, Tennessee Order Approving the Acquisition of a Savings Association and the Sale of Credit-Related Insurance National Commerce Bancorporation, Memphis, Tennessee ("NCB"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Legal Developments 891 This activity is permissible for bank holding companies under the Board's Regulation Y, and NCB proposes to conduct these activities in accordance with the Board's regulations. 12 C.F.R. 225.25(b)(8)(i). Notice of the applications, affording interested persons an opportunity to submit comments, has been published (58 Federal Register 30,789 (1993)). The time for filing comments has expired, and the Board has considered the applications and all comments received in light of the public interest factors set forth in section 4(c)(8) of the BHC Act. The Board has determined that the operation of a savings association is closely related to banking and permissible for bank holding companies. 12 C.F.R. 225.25(b)(9). In making this determination, the Board required that savings associations acquired by bank holding companies conform their direct and indirect activities to those permissible for bank holding companies under section 4 of the BHC Act. 2 As noted above, the proposed insurance activities are related to extensions of credit and are permissible activities under the Board's regulations. Following the acquisition of FFSB, NCB proposes to establish branches of FFSB in Roanoke, Virginia, and in other states. Neither the BHC Act nor the Board's regulations currently restrict the ability of a savings association owned by a bank holding company to establish interstate branches. The regulations adopted by the Office of Thrift Supervision ("OTS") permit federally chartered savings associations to operate interstate branches, under certain circumstances, with the approval of the OTS.3 The Board's action in this matter is conditioned upon compliance by FFSB with all applicable laws governing its activities and branching, including all applicable OTS regulations. In considering an application under section 4(c)(8) of the BHC Act, the Board is required to determine that the applicant's ownership and operation of the acquired company "can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices." 12 U.S.C. § 1843(c)(8). NCB, with total consolidated assets of approximately $2.3 billion, controls three banks in Tennessee. 4 NCB is the seventh largest banking organization in Tennessee, controlling deposits of $1.7 billion, representing 3.9 percent of total deposits in commercial banking organizations in the state.5 FFSB is the 21st largest thrift organization in Mississippi, controlling deposits of $4.3 million, representing less than 1 percent of total deposits in thrift institutions in the state.6 The banking subsidiaries of NCB and FFSB do not compete in any of the same banking markets. Accordingly, the Board concludes that this proposal would not have a significantly adverse effect on competition in any relevant banking market. The financial and managerial resources of NCB, its subsidiaries, and FFSB also are consistent with approval. In light of the facts of record, the Board concludes that NCB's proposal would not significantly affect competition in any relevant market. Furthermore, there is no evidence in the record to indicate that consummation of this proposal is likely to result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practice. Accordingly, the Board has determined that the balance of public interest factors it must consider under section 4(c)(8) of the BHC Act is favorable and consistent with approval of NCB's application to engage in this activity. 1. "Extension of credit" includes direct loans to borrowers, loans purchased from other lenders, and leases of real or personal property so long as the leases are nonoperating and full payout leases that meet the requirements of section 225.25(b)(5) of the Board's Regulation Y (12 C.F.R. 225.25(b)(5)). 2. In this regard, NCB has committed that FFSB will not engage in any activity not permitted for bank holding companies and their subsidiaries under section 4(c)(8) of the BHC Act. 3. Board approval also may be required in certain circumstances under the provisions of section 225.23 of the Board's Regulation Y (12 C.F.R. 225.23). 4. Asset data are as of March 31, 1993. 5. State commercial bank deposit data are as of June 30, 1992. 6. State thrift deposit data are as of June 30, 1992. Act"), has applied pursuant to 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 First Federal Savings Bank, Belzoni, Mississippi ("FFSB"). FFSB would be owned by NCB in accordance with section 225.25(b)(9) of the Board's Regulation Y (12 C.F.R. 225.25(b)(9)). NCB also has applied, pursuant to section 4(c)(8) of the BHC Act, to sell, indirectly through FFSB, credit insurance as principal, agent or broker (including home mortgage redemption insurance) that is: (A) Directly related to an extension of credit by NCB or any of its subsidiaries; and (B) Limited to assuring the repayment of the outstanding balance due on the extension of credit1 in the event of the death, disability, or involuntary unemployment of the debtor. 892 Federal Reserve Bulletin • September 1993 Based on the foregoing, the Board has determined that the application should be, and hereby is, approved. The Board's approval is specifically conditioned on compliance by NCB with all of the commitments and conditions made in connection with this application. This determination also is subject to all of the conditions contained in the Board's Regulation Y, including those in sections 225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and 225.23(b)(3)), 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 it finds necessary to assure compliance with, or prevent evasions of, the provisions and purposes of the BHC Act and the Board's regulations and orders issued thereunder. All the commitments and conditions relied on in reaching this decision in this case are deemed to be conditions imposed in writing by the Board in connection with its findings and decision, and as such may be enforced in proceedings under applicable law. 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 St. Louis, acting pursuant to delegated authority. By order of the Board of Governors, effective July 12, 1993. Voting for this action: Vice Chairman Mullins and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and not voting: Chairman Greenspan. JENNIFER J. JOHNSON Associate Secretary of the Board NationsBank Corporation Charlotte, North Carolina Order Approving Application to Engage De Novo in Underwriting and Dealing in All Types of Debt and Equity Securities on a Limited Basis, and Certain Foreign Exchange-Related Activities NationsBank Corporation, Charlotte, North Carolina ("NationsBank"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied under section 4(c)(8) of the BHC Act (12 U.S.C. 1843(c)(8)) and section 225.23(a) of the Board's Regulation Y (12 C.F.R. 225.23(a)) to engage de novo through its wholly owned subsidiary, NationsBanc Capital Markets, Inc., Charlotte, North Carolina ("Company"), in the following nonbanking activities: (1) Underwriting and dealing in, to a limited extent, all types of debt and equity securities (other than securities issued by open-end investment companies), including without limitation sovereign debt securities, corporate debt securities, debt securities convertible into equity securities, debt securities issued by a trust or other vehicle secured by or representing interests in debt obligations, preferred stock, common stock, American Depositary Receipts, and other direct and indirect equity ownership interests in corporations and other entities; and (2) Providing foreign exchange advisory and transactional services while also taking positions in foreign exchange, for hedging purposes only, for its own account. NationsBank proposes to conduct these activities throughout the United States. Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been published (58 Federal Register 33,273 (1993)). The time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set forth in section 4(c)(8) of the BHC Act. NationsBank, with total consolidated assets of $122 billion, is the fifth largest commercial banking organization in the United States, and operates bank subsidiaries in North Carolina, Texas, Georgia, Virginia, Maryland, the District of Columbia, Tennessee, Kentucky, Florida, South Carolina, and Delaware.1 Company currently is engaged in limited bank-ineligible securities underwriting and dealing activities that are permissible under section 20 of the Glass-Steagall Act (12 U.S.C. § 377).2 Company is, and will continue to be, a broker-dealer registered with the Securities and Exchange Commission ("SEC") and a member of the National Association of Securities Dealers, Inc. ("NASD"). Accordingly, Company is subject to the record-keeping, reporting, fiduciary standards, and other requirements of the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), the SEC, and the NASD. 3 1. Asset data are as of March 31, 1993. 2. In particular, Company has authority to underwrite and deal in, to a limited extent, certain municipal revenue bonds, 1-4 family mortgage-backed securities, commercial paper, and consumer receivable-related securities (together with the types of securities which Company now seeks authority to underwrite and deal in, collectively, "bank-ineligible securities"). 3. Company currently has authority to conduct a variety of securities-related activities, including: (1) Underwriting and dealing in securities that state member banks are authorized to underwrite and deal in under sections 5(c) and 16 of the Glass-Steagall Act (12 U.S.C. §§ 335 and 24(7)), pursuant to section 225.25(b)(16) of Regulation Y (12 C.F.R. 225.25(b)(16)); (2) Providing securities brokerage and investment advisory services, on both a separate and combined basis, pursuant to sections 225.25(b)(4) and (b)(15) of Regulation Y (12 C.F.R. 225.25(b)(4) and (b)(15)); Legal Developments Underwriting and Dealing Activities The Board has determined that, subject to the prudential framework of limitations established in previous decisions to address the potential for conflicts of interests, unsound banking practices, or other adverse effects, the proposed underwriting and dealing activities involving bank-ineligible securities are so closely related to banking as to be proper incidents thereto within the meaning of section 4(c)(8) of the BHC Act. 4 NationsBank has committed that Company will conduct the proposed underwriting and dealing activities using the same methods and procedures, and subject to the same prudential limitations, as were established by the Board in the Section 20 Orders. The Board also has determined that the conduct of these securities underwriting and dealing activities is consistent with section 20 of the Glass-Steagall Act (12 U.S.C. § 377), provided that the company engaged in the underwriting and dealing activities derives no more than 10 percent of its total gross revenue from underwriting and dealing in bank-ineligible securities over any twoyear period.5 NationsBank has committed that Company will conduct its underwriting and dealing activities with respect to bank-ineligible securities subject to this 10 percent revenue test.6 (3) Acting as agent in the private placement of all types of securities, and providing related advisory services; and (4) Buying and selling all types of securities on customer order as a "riskless principal". See NCNB Corporation, 76 Federal Reserve Bulletin 864 (1990); NCNB Corporation, 75 Federal Reserve Bulletin 520 (1989). See also NCNB Corporation, 78 Federal Reserve Bulletin 141,158 n. 86 (1991), and NCNB Corporation, 78 Federal Reserve Bulletin 92,93-94 (1991). 4. See Canadian Imperial Bank of Commerce, et al., 76 Federal Reserve Bulletin 158 (1990); J.P. Morgan & Co. Incorporated, et al., 75 Federal Reserve Bulletin 192 (1989), affd sub nom. Securities Industries Ass'n v. Board of Governors of the Federal Reserve System, 900 F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 73 Federal Reserve Bulletin 473 (1987), affd sub nom. Securities Industry Ass'n v. Board of Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, den., 486 U.S. 1059 (1988) (collectively, "Section 20 Orders"). 5. See id. Compliance with the 10 percent revenue limitation shall be calculated in accordance with the method stated in the Section 20 Orders, as modified by the Order Approving Modifications to the Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989), the Order Approving Modifications to the Section 20 Orders, 79 Federal Reserve Bulletin 226 (1993), and the Supplement to Order Approving Modifications to Section 20 Orders, 79 Federal Reserve Bulletin 360 (1993) (collectively, "Modification Orders"). In this regard, the Board notes that NationsBank has not adopted the Board's alternative indexed revenue test to measure compliance with the 10 percent limitation on bank-ineligible securities activities, and, absent such election, will continue to employ the Board's original 10 percent revenue standard. 6. NationsBank also has proposed that Company engage in certain other activities in connection with the proposed underwriting and dealing activities, including certain securities clearing and investment advisory activities. NationsBank maintains that these additional activities are incidental to the proposed underwriting and dealing activities. In this regard, the Board notes that Company may provide services that are necessary incidents to the proposed underwriting and dealing activities, provided that any activities conducted as a neces- 893 The Board has reviewed the capitalization of NationsBank and Company in accordance with the standards set forth in the Section 20 Orders, and finds the capitalization of each to be consistent with approval. With respect to the capitalization of Company, this determination is based upon all the facts of record, including NationsBank's projections with respect to the volume of Company's underwriting and dealing activities in bank-ineligible securities. The Federal Reserve Bank of Richmond has reviewed the operational and managerial infrastructure of Company, including its computer, audit, and accounting systems, and internal risk management procedures and controls. The Reserve Bank has determined that Company has established an operational and managerial infrastructure for underwriting and dealing in all types of debt securities that is adequate to ensure compliance with the requirements of the Section 20 Orders. On the basis of the Reserve Bank's review and all the facts of record, the Board has determined that Company has in place, with respect to its proposal to underwrite and deal in all types of debt securities, the managerial and operational infrastructure and other policies and procedures necessary to comply with the requirements of the Section 20 Orders and this order. Accordingly, the Board concludes that financial and managerial considerations are consistent with approval of the proposal for Company to underwrite and deal in all types of debt securities on a limited basis. With respect to the proposed underwriting and dealing activities involving equity securities, NationsBank has informed the Board that it does not intend that Company engage in these activities in the first year after approval of this proposal. Accordingly, and in light of all the facts of record, the Board's approval of NationsBank's proposal that Company engage in these activities is conditioned upon a satisfactory determination that Company's operational and managerial infrastructure and policies and procedures relating to underwriting and dealing in equity securities are adequate to ensure compliance with the requirements of the Section 20 Orders following a second review by the Reserve Bank. In order to approve this proposal, the Board also must determine that the performance of the proposed underwriting and dealing activities by Company can reasonably be expected to produce public benefits that sary incident to the bank-ineligible securities activities must be treated as part of the bank-ineligible securities activities unless Company has received specific approval under section 4(c)(8) of the BHC Act to conduct the activities independently. Until such approval is obtained, any revenues from the incidental activities must be counted as ineligible revenues subject to the 10 percent revenue limitation set forth in the Section 20 Orders, as modified by the Modification Orders. 894 Federal Reserve Bulletin • September 1993 would outweigh possible adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC Act. Under the framework and conditions established in this and prior decisions, consummation of this proposal is not likely to result in any significant adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. Moreover, the Board expects that the de novo entry of Company into the market for the proposed services in the United States would provide added convenience to NationsBank's customers, and would increase the level of competition among existing providers of these services. Accordingly, the Board has determined that the performance of the proposed activities by NationsBank can reasonably be expected to produce public benefits that will outweigh possible adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC Act. Accordingly, and for the reasons set forth in the Section 20 Orders, the Board concludes that NationsBank's proposal to engage through Company in the proposed underwriting and dealing activities is consistent with the Glass-Steagall Act, and is so closely related to banking as to be a proper incident thereto within the meaning of section 4(c)(8) of the BHC Act, provided that NationsBank limits Company's activities as specified in this order and the Section 20 Orders, as modified by the Modification Orders. Foreign Exchange-Related Activities The Board previously has determined by regulation that the provision of foreign exchange advisory and transactional services is an activity so closely related to banking as to be a proper incident thereto within the meaning of the BHC Act, provided that the activity is conducted through a separately incorporated subsidiary of the bank holding company which, inter alia, does not take positions in foreign exchange for its own account. See 12 C.F.R. 225.25(b)(17). Company will conduct the proposed foreign exchange advisory and transactional services in accordance with the limitations set forth in Regulation Y, except that Company will take positions in foreign exchange for its own account for purposes of hedging its proposed underwriting and dealing activities. Bank holding companies have been authorized to take positions in foreign exchange for hedging purposes, 7 and the Board has previously noted that in 7. See, e.g., The Nippon Credit Bank, Ltd., 75 Federal Reserve Bulletin 308 (1989). See also 12 C.F.R. 225.142. conducting foreign exchange operations, commercial banks do combine the functions of giving advice, executing transactions, and taking positions in foreign exchange.8 Accordingly, the Board concludes that NationsBank's proposal to conduct foreign exchange advisory and transactional activities in a nonbanking subsidiary which also takes positions in foreign exchange for hedging purposes only is closely related to banking within the meaning of the BHC Act. In regard to the proper incident to banking standard of section 4(c)(8) of the BHC Act, the limitation in Regulation Y on taking positions in foreign exchange in combination with providing foreign exchange advisory and transactional services is based upon the potential conflict of interest involved in conducting these activities on a combined basis. 9 In order to address the potential for conflicts of interest which could arise from the combined conduct of these activities in one nonbanking subsidiary, NationsBank has committed that Company's personnel engaged in trading foreign exchange for hedging purposes will not have access to information about the foreign exchange activities of customer representatives. Similarly, Company's customer representatives will not have access to information about the foreign exchange activities of its hedging traders. The Board also notes that Company will only take foreign exchange positions for purposes of hedging its proposed underwriting and dealing activities. On the basis of these and other commitments furnished by NationsBank and all the other facts of record, the Board believes that Company's conduct of the proposed foreign exchange-related activities is not likely to result in any significant adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices.10 Moreover, the Board expects that the de novo entry of Company into the market for the proposed services in the United States would provide added convenience to NationsBank's customers, and would increase the level of competition among existing providers of these services. Accordingly, the Board has determined that the performance 8. See Hongkong and Shanghai Banking Corporation, et al., 69 Federal Reserve Bulletin 221, 223 (1983). 9. See The Nippon Credit Bank, Ltd., supra, at 310; Hongkong and Shanghai Banking Corporation, et al., supra, at 223. 10. The Board notes that it previously has approved proposals for a nonbanking subsidiary to take positions in foreign exchange while also providing general information, statistical forecasting, and limited general advice regarding foreign exchange. See The Long-Term Credit Bank of Japan, Limited, 79 Federal Reserve Bulletin 347, 349 (1993); The Bank of Tokyo, Ltd., 76 Federal Reserve Bulletin 654, 656-657 (1990). Legal Developments of the proposed activities by NationsBank can reasonably be expected to produce public benefits that will outweigh possible adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC Act. On the basis of the foregoing and all the facts of record, including the commitments furnished by NationsBank, the Board has determined that the application should be, and hereby is, approved, subject to all the terms and conditions of this order and the Section 20 Orders, as modified by the Modification Orders. The Board's approval of this proposal extends only to activities conducted within the limitations of those Orders and this order, including the Board's reservation of authority to establish additional limitations to ensure that Company's activities are consistent with safety and soundness, conflicts of interests, and other relevant considerations under the BHC Act. Underwriting and dealing in any manner other than as approved in the Section 20 Orders is not within the scope of the Board's approval and is not authorized for Company. The Board's determination also is subject to all the terms and conditions set forth in Regulation Y, including those in sections 225.4(d) and 225.23(b) of Regulation Y, and to the Board's authority to require such modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to ensure compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's regulations and orders issued thereunder. The Board's decision is specifically conditioned on compliance with all the commitments made in connection with this application, including the commitments discussed in this Order, and the conditions set forth in the above-noted Board regulations and orders. These commitments and conditions are deemed to be conditions imposed in writing by the Board in connection with its findings and decision, and, as such, may be enforced in proceedings under applicable law. 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, acting pursuant to delegated authority. By order of the Board of Governors, effective July 26, 1993. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, LaWare, and Lindsey. Absent and not voting: Governor Phillips. JENNIFER J. JOHNSON Associate Secretary of the Board 895 Orders Issued Under Sections 3 and 4 of the Bank Holding Company Act Meridian Bancorp, Inc. Reading, Pennsylvania Order Approving Acquisition of a Bank Holding Company Meridian Bancorp, Inc., Reading, Pennsylvania ("Meridian"), 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 (12 U.S.C. § 1842) to acquire all of the voting shares of Commonwealth Bancshares Corporation ("Commonwealth"), and thereby to acquire indirectly Commonwealth's subsidiary bank, Commonwealth Bank ("Commonwealth Bank"), both of Williamsport, Pennsylvania.1 Meridian's wholly owned subsidiary state member bank, Meridian Bank, Reading, Pennsylvania ("Meridian Bank"), also has applied for the Board's approval under section 18(c) of the Federal Deposit Insurance Act (the "Bank Merger Act") to merge with Commonwealth Bank, and, under sections 9 and 24A of the Federal Reserve Act, to establish additional branches and invest in bank premises. 2 Meridian also has applied under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) to acquire Susquehanna Life Insurance Company, Phoenix, Arizona ("Susquehanna Life"), and thereby engage in the sale of credit-related insurance pursuant to 12 C.F.R. 225.25(b)(8)(i), and Commonwealth Bancshares Community Development Corporation, Williamsport, Pennsylvania ("Commonwealth CDC"), and thereby engage in community development activities pursuant to 12 C.F.R. 225.25(b)(6). Notice of the applications, affording interested persons an opportunity to submit comments, has been published (58 Federal Register 28,878 (1993)). The time for filing comments has expired, and the Board has considered these applications and all comments received in light of the factors set forth in section 3(c) of the BHC Act, the Bank Merger Act, and the Federal Reserve Act. As required by the Bank Merger Act, reports on the competitive effects of the merger were requested from the United States Attorney General, 1. In connection with Meridian's proposed acquisition of Commonwealth, Meridian also has requested Board approval under section 3 of the BHC Act to acquire an option to purchase up to 19.9 percent of the voting shares of Commonwealth. This option will become moot upon consummation of Meridian's application to acquire Commonwealth. 2. Meridian will establish branches at each of the locations set forth in the Appendix. 896 Federal Reserve Bulletin • September 1993 the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation. Meridian, with $12 billion in consolidated assets, controls subsidiary banks located in Pennsylvania, Delaware, and New Jersey.3 Meridian controls deposits of $9 billion in Pennsylvania and is the fifth largest commercial banking organization in that state. Commonwealth, with deposits of $1.6 billion, is the fourteenth largest commercial banking organization in Pennsylvania.4 Upon consummation of the transaction, Meridian would become the fourth largest commercial banking organization in Pennsylvania, controlling deposits of approximately $10.6 billion in the state, representing 8.1 percent of deposits in commercial banks in Pennsylvania. Meridian and Commonwealth do not compete directly in any banking market. Based on all the facts of record, the Board has concluded that consummation of the proposal would not have a significantly adverse effect on competition in any relevant banking market. The Board also concludes that the financial and managerial resources and future prospects of Meridian and Commonwealth, and their subsidiary banks, the convenience and needs of the communities to be served, and the other factors that the Board must consider under section 3 of the BHC Act and the Bank Merger Act, are consistent with approval.5 Meridian Bank also has applied under sections 9 and 24A of the Federal Reserve Act to establish branches and invest in branch premises. The Board has considered the factors it is required to consider when reviewing applications pursuant to these sections of the Federal Reserve Act and finds those factors to be consistent with approval. Meridian also has applied, pursuant to section 4(c)(8) of the BHC Act, to acquire Susquehanna Life, a company that provides credit-related life and disability insurance issued in connection with extensions of credit by Commonwealth, and Commonwealth CDC, a company that makes equity and debt investments in 3. Asset and deposit data are as of June 30, 1992. 4. These data include deposits of Valley Community Bank, Kingston, Pennsylvania, which Commonwealth has received approval to acquire. 5. The Board has received a comment from a former customer of Commonwealth Bank alleging improper alterations of a mortgage that is the subject of a foreclosure proceeding by the bank. The Board has carefully considered these comments in light of all facts of record, including relevant reports of examination by Commonwealth Bank's primary federal regulator, the Federal Reserve Bank of Philadelphia, and Commonwealth Bank's loan documentation policies, which Meridian states are consistent with the policies to be established upon consummation of this proposal. The Board notes that these policies specifically address alterations of commercial loan documents and provide audit procedures to review for compliance. In light of all the facts of record, the Board does not believe that commenter's allegations warrant denial of these applications. corporations or projects designed primarily to promote community welfare in north central Pennsylvania. These activities are permissible for bank holding companies under the Board's Regulation Y, 6 and Meridian proposes to conduct these activities in accordance with the Board's regulations. In order to approve this application, the Board also must find that the performance of the proposed activities by Susquehanna Life and Commonwealth CDC "can reasonably be expected to produce benefits to the public . . . that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices." 12 U.S.C. § 1843(c)(8). The Board expects that the continuance of these activities by these nonbanking subsidiaries would maintain the level of competition among providers of these services. In addition, there is no evidence in the record that consummation of this proposal would result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. Accordingly, the Board concludes that the balance of the public interest factors that it is required to consider under section 4(c)(8) of the BHC Act is favorable, and consistent with approval of Meridian's section 4 application. Based on the foregoing and other facts of record, the Board has determined that the applications should be, and hereby are, approved. This approval is specifically conditioned upon compliance by Meridian with all the commitments made in connection with this application. The Board's determination with respect to its nonbanking activities also is subject to all of the conditions set forth in Regulation Y, including those in sections 225.4(d) and 225.23(b), and to the Board's authority to require such modification or termination of the activities of a 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. For purposes of this action, the commitments and conditions relied on in reaching this decision shall be deemed to be conditions imposed in writing by the Board and, as such, may be enforced in proceedings under applicable law. The banking acquisition approved in this Order shall not be consummated before the thirtieth calendar day after the effective date of this Order, and the proposal shall not be consummated later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by 6. See 12 C.F.R. 225.25(b)(8)® and 225.25(b)(6). Legal Developments the Federal Reserve Bank of Philadelphia, acting pursuant to delegated authority. By order of the Board of Governors, effective July 26, 1993. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, LaWare, and Lindsey. Absent and not voting: Governor Phillips. JENNIFER J. JOHNSON Associate Secretary of the Board Appendix Meridian Bank has applied pursuant to section 9 of the Federal Reserve Act to establish branches at the following locations: (1) (2) (3) (4) (5) Turner Street, Austin, Pennsylvania Main Street, Beech Creek, Pennsylvania 20 West Main Street, Canton, Pennsylvania 302 North East Street, Coudersport, Pennsylvania 100 North Academy Avenue, Geisinger Medical Center, Danville, Pennsylvania* (6) 608 Continental Boulevard, Danville, Pennsylvania (7) 101 Mill Street, Danville, Pennsylvania (8) 12 West Valley Avenue, Elysburg, Pennsylvania (9) R.D. No. 1, Box 100A, Route 267, Friendsville, Pennsylvania (10) 30 West Street, Galeton, Pennsylvania (11) Route 14 North, South Creek Township, Gillett, Pennsylvania (12) Route 11, Mountain View Plaza, Great Bend, Pennsylvania (13) 32-42 North Main Street, Hughesville, Pennsylvania (14) Main and Walnut Streets, Howard, Pennsylvania (15) 222 Allegheny Street, Jersey Shore, Pennsylvania (16) R.R. No. 1, Routes 92 and 106, Kingsley, Pennsylvania (17) 541 Pierce Street, Kingston, Pennsylvania (18) Lake Como Road and Route 370, Lakewood, Pennsylvania (19) 53 Main Street, Lawrenceville, Pennsylvania (20) Box 150, Main Street, LeRaysville, Pennsylvania (21) 239 Market Street, Lewisburg, Pennsylvania (22) Route 15 and Loan Road, Lewisburg, Pennsylvania (23) Route 45 and Fairground, Lewisburg, Pennsylvania* (24) Pennsylvania Avenue, Little Meadows, Pennsylvania (25) 448 Bellfonte Avenue, Lock Haven, Pennsylvania 897 (26) 25 East Main Street, Lock Haven, Pennsylvania (27) 50 South Main Street, Mansfield, Pennsylvania (28) R.D. No. 2, Box 41D, Route 328, Millerton, Pennsylvania (29) 14 South Front Street, Milton, Pennsylvania (30) 537 Mahoning Street, Milton, Pennsylvania (31) 355 Broad Street, Montoursville, Pennsylvania (32) 780 Broad Street, Montoursville, Pennsylvania* (33) R.D. No. 1, Route 87 and Beltway, Montoursville, Pennsylvania (34) 10 Public Avenue, Montrose, Pennsylvania (35) Route 706, Montrose, Pennsylvania (36) 49 West Third Street, Mount Carmel, Pennsylvania (37) 50 West Third Street, Mount Carmel, Pennsylvania (38) Box 80, Lycoming Mall, Muncy, Pennsylvania (39) Lycoming Mall, Muncy, Pennsylvania* (40) 20 South Main Street, Muncy, Pennsylvania (41) Rear 405, South Main Street, Old Forge, Pennsylvania (42) 1 South Main Street, Pittston, Pennsylvania (43) Route 11, Pittston Plaza By-Pass, Pittston, Pennsylvania (44) 300 Highway 315, Pittston Township, Pennsylvania (45) Route 54 and Mill Street, Riverside, Pennsylvania* (46) 364 Erie Avenue, Renovo, Pennsylvania (47) 102 Desmond Street, Sayre, Pennsylvania (48) 430 North Keystone Avenue, Sayre, Pennsylvania* (49) 51 Academy Street, Shinglehouse, Pennsylvania (50) Route 29 South, South Montrose, Pennsylvania* (51) 251 Market Street, South Williamsport, Pennsylvania (52) Main Street, Springville, Pennsylvania (53) 1300 North Atherton Street, State College, Pennsylvania (54) 2200 South Atherton Street, State College, Pennsylvania (55) 121 South Pugh Street, State College, Pennsylvania (56) 133 Main Street, Susquehanna, Pennsylvania (57) Jackson Street, Thompson, Pennsylvania (58) 111-113 Main Street, Towanda, Pennsylvania (59) Main and Exchange Streets, Troy, Pennsylvania (60) 109 Main Street, Watsontown, Pennsylvania (61) 61 Main Street, Wellsboro, Pennsylvania (62) 16 Main Street, Wellsboro, Pennsylvania (63) 801 Wyoming Avenue, West Pittston, Pennsylvania (64) 100 Main Street, Westfield, Pennsylvania (65) 12 South Main Street, Wilkes-Barre, Pennsylvania 898 Federal Reserve Bulletin • September 1993 (66) 1100 Grampian Boulevard, Williamsport, Pennsylvania* (67) 1916 Lycoming Creek Road, Williamsport, Pennsylvania (68) 301 Shiffler Avenue, Williamsport, Pennsylvania (69) 325 Washington Boulevard, Williamsport, Pennsylvania* (70) 101 West Third Street, Williamsport, Pennsylvania (71) 1005 West Third Street, Williamsport, Pennsylvania* * Denotes automated teller machines owned or leased by Commonwealth Bank. R. Banking Limited Partnership Oklahoma City, Oklahoma Order Approving the Formation of a Bank Holding Company R. Banking Limited Partnership, Oklahoma City, Oklahoma ("R. Banking"), has applied 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 within the meaning of the BHC Act by acquiring from 21.8 percent to 100 percent of the ten bank holding companies ("Holding Companies") and their subsidiary banks ("Banks") listed in the Appendix of this Order.1 R. Banking also has applied under section 4(c)(8) of the BHC Act to acquire the nonbanking subsidiaries of Holding Companies and thereby engage in credit insurance activities pursuant to section 225.25(b)(8)(i) of the Board's Regulation Y (12 C.F.R. 225.25(b)(8)(i)). Notice of the applications, affording interested persons an opportunity to submit comments, has been published (57 Federal Register 29,874 (1992)). 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 BHC Act. R. Banking is a nonoperating limited partnership formed for the purpose of acquiring Holding Companies. Upon consummation of the proposal, R. Banking would become the third largest banking organization in Oklahoma, controlling deposits of $783 million, representing approximately 3.3 percent of total deposits in commercial banking organizations in the state.2 All of the banks to be acquired operate in different banking markets except for BancFirst and McLoud 1. This transaction constitutes a reorganization of a chain banking organization. 2. All deposit data are as of June 30, 1991. Bank, which operate in the Oklahoma City banking market.3 The Oklahoma City banking market would remain unconcentrated after consummation of this proposal,4 and numerous competitors would remain in the market. Accordingly, the Board concludes that consummation of the proposal would not have a significantly adverse effect on competition in any relevant banking market. The Board has carefully reviewed the financial and managerial resources and future prospects factors under the BHC Act in light of comments submitted by an individual ("Protestant"). Protestant generally alleges that financial considerations associated with the proposal are not consistent with approval and that a principal of R. Banking ("Principal") has engaged in unsafe and unsound banking practices at banking institutions currently or formerly controlled by Principal. Protestant also claims that this transaction will adversely affect the value of other shareholders' stock. The Board initially notes that the proposal represents a reorganization of certain interests in several bank holding companies into a single holding company structure and does not change the existing ownership interests of other shareholders in the holding companies. In this regard, the principal shareholders would continue to own their interest in the same proportion as they do now, and the proposal would simply permit ownership through a partnership rather than individually. Protestant presents no information on how this reorganization will affect other shareholders. In addition, the Board has considered Protestant's comments regarding the financial aspects of the proposal in light of all the facts of record and concludes that these comments do not warrant denial of the applications. The Board has reviewed court documents regarding transactions that serve as the basis of Protestant's allegations of unsafe and unsound practices, as well as relevant examination information regarding these transactions. The Board has also consulted with the 3. The Oklahoma City banking market is defined as the Oklahoma City Ranally Metro Area. 4. Upon consummation of the proposal, the Herfindahl-Hirschman Index ("HHI") in the Oklahoma City banking market will increase less than 1 point to 531. 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 under 1000 is considered to be unconcentrated. A market in which the post-merger HHI is above 1800 is considered to be highly concentrated, and the Justice Department is likely to challenge a merger that increases the HHI by more than 50 points. The Justice Department 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 more than 200 points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other non-depository financial entities. Legal Developments Federal Deposit Insurance Corporation, the primary regulator of the banks involved, and law enforcement agencies regarding these transactions. In addition, the Board has considered the history of management by Principal at other banks in the chain. In light of these and all the facts of record, the Board does not believe considerations relating to the managerial factor warrant denial of these applications. Based on all the facts of record, the Board concludes that the financial and managerial resources and the future prospects of R. Banking, as well as other factors the Board must consider under section 3 of the BHC Act, are consistent with approval. R. Banking also has applied pursuant to section 4(c)(8) of the BHC Act to acquire the nonbanking subsidiaries of Holding Companies and thereby engage in credit insurance activities. The Board has determined by regulation (12 C.F.R. 225.25(b)(8)(i)) that this activity is closely related to banking and permissible for bank holding companies under section 4(c)(8) of the BHC Act. In order to approve an application under section 4(c)(8) of the BHC Act, the Board also is required to determine that the performance of the proposed activities by R. Banking "can reasonably be expected to produce benefits to the public . . . that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices." 12 U.S.C. § 1843(c)(8). The record does not indicate that consummation of this proposal is likely to result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. Accordingly, the Board has determined that the balance of public interest factors it must consider under section 4(c)(8) of the BHC Act is favorable and consistent with approval of R. Banking's application to acquire the nonbanking subsidiaries of Holding Companies. Based on the foregoing and other facts of record, and subject to the commitments made by R. Banking in this case, the Board has determined that the applications should be, and hereby are, approved. This approval is specifically conditioned on compliance by R. Banking with all of the commitments made in connection with these applications and with the conditions referenced in this Order. The determinations as to R. Banking's nonbanking activities are also subject to all the conditions contained in the Board's Regulation Y, including those in sections 225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and 225.23(b)(3)), and to the Board's authority to require such modification or termination of the activities of a holding company or any of its subsidiaries as it finds necessary to assure 899 compliance with, or prevent evasion of, the provisions and purposes of the BHC Act and the Board's regulations and orders issued thereunder. For purposes of this action, all of these commitments and conditions are considered conditions imposed in writing and, as such, may be enforced in proceedings under applicable law. The acquisition of Holding Companies shall not be consummated before the thirtieth calendar day after the effective date of this Order, and the acquisition of Holding Companies and nonbanking companies 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 Kansas City, acting pursuant to delegated authority. By order of the Board of Governors, effective July 8, 1993. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, LaWare, Lindsey, and Phillips. Absent and not voting: Governor Kelley. JENNIFER J. JOHNSON Associate Secretary of the Board Appendix Bank Holding Companies to be Acquired by R. Banking Limited Partnership: (1) BancFirst Corporation (47.6 percent), and its subsidiary, BancFirst, both of Oklahoma City, Oklahoma; (2) Buffalo Bancshares, Inc. (42.7 percent), and its subsidiary, Oklahoma State Bank, both of Buffalo, Oklahoma; (3) Commerce Bancorporation, Inc. (45.9 percent), and its subsidiary, Bank of Commerce, both of McLoud, Oklahoma; (4) Coweta Bancshares, Inc. (100 percent), and its subsidiary, Security Bank, both of Coweta, Oklahoma; (5) Dewey County Bancorporation, Inc. (33.7 percent), and its subsidiary, Dewey County State Bank, both of Taloga, Oklahoma; (6) Erick Bancorporation, Inc. (66 percent), and its subsidiary, First American Bank, both of Erick, Oklahoma; (7) First Stratford Bancorporation, Inc. (88.2 percent), and its subsidiary, First American Bank, Stratford, Oklahoma; (8) Johnston County Bancshares, Inc. (46.7 percent), and its subsidiary, Bank of Johnston County, both of Tishomingo, Oklahoma; (9) Weatherford Bancorporation, Inc. (34.3 percent), 900 Federal Reserve Bulletin • September 1993 and its subsidiary, United Community Bank, both of Weatherford, Oklahoma; and (10) Wilburton Bancorporation, Inc. (21.8 percent), and its subsidiary, Wilburton State Bank, both of Wilburton, Oklahoma. Orders Issued Under International Banking Act Banque Transatlantique Paris, France Order Approving Establishment of a Representative Office Banque Transatlantique, Paris, France ("Bank"), a foreign bank within the meaning of the International Banking Act ("IBA"), has applied under section 10(a) of the IBA (12 U.S.C. § 3107(a)) to establish a representative office in Washington, D.C. The Foreign Bank Supervision Enhancement Act of 1991, which amended the IBA, provides that a foreign bank must obtain the approval of the Board to establish a representative office in the United States. Notice of the application affording interested persons an opportunity to submit comments has been published in a newspaper of general circulation in Washington, D.C. (The Washington Times, September 9, 1992). The time for filing comments has expired, and the Board has considered the application and all comments received. Bank, with $786.9 million in consolidated assets,1 is a commercial bank chartered in France. Bank's only office outside France is a representative office in London.2 Bank does not engage, directly or indirectly, in any nonbanking activities in the United States. The proposed representative office would engage in traditional representational functions, including promoting Bank's name, products and services to potential customers and serving as a liaison between customers and Bank's offices in France. Bank is a subsidiary of Credit Industriel et Commercial de Paris ("CIC Paris"), which owns 61 percent of Bank.3 In acting on an application to establish a representative office, the IBA and Regulation K provide that the Board shall take into account whether the foreign 1. Data are as of December 31, 1992, unless otherwise noted. 2. Bank has five subsidiaries that engage in real estate lending, management and distribution of mutual funds, holding of bank premises, and provision of French goods and services overseas. None of these subsidiaries operates in the United States. 3. Credito Italiano, an Italian government-controlled commercial bank, owns 20 percent of Bank. All the shares of CIC Paris are owned by Union Europeene de CIC, ("CIC"), a commercial bank chartered in France. Societe Centrale de Groupment des Assurances Nationales, a French government-controlled holding company, directly owns CIC. bank engages directly in the business of banking outside of the United States, has furnished to the Board the information it needs to assess adequately the application, and is subject to comprehensive supervision or regulation on a consolidated basis by its home country supervisor (12 U.S.C. § 3105(d)(2); 12 C.F.R. 211.24). The Board may also take into account additional standards as set forth in the IBA (12 U.S.C. § 3105(d)(3)-(4)) and Regulation K (12 C.F.R. 211.24(c)). The Board has previously stated that the standards that apply to the establishment of a branch or agency need not in every case apply to the establishment of a representative office because representative offices do not engage in a banking business and cannot take deposits or make loans (see 58 Federal Register 6348, 6351 (1993)). In evaluating an application to establish a representative office under the IBA and Regulation K, the Board will take into account the standards that apply to establishment of branches and agencies, subject to the following considerations. With respect to supervision by home country authorities, a foreign bank that proposes to establish a representative office must be subject to a significant degree of supervision by its home country supervisor. Among the factors the Board may consider are the extent to which there is regular review of a substantial portion of the bank's operations by the home country supervisor through examination, review of external audits, or a comparable method; submission of periodic reports relating to financial performance; and assurance that the bank itself has a system of internal monitoring and control that enables bank management to administer properly the bank's operations. The home country supervisor must also have indicated that it does not object to the establishment of the representative office in the United States. A foreign bank's financial and managerial resources will be reviewed to determine whether its financial condition and performance demonstrate that it is capable of complying with applicable laws and has an operating record that would be consistent with the establishment of a representative office in the United States. If the financial condition of the foreign bank significantly differs from international norms, the foreign bank would be evaluated to determine whether such difference could be justified in the context of the operations of the applicant and the proposed representative office. All foreign banks, whether operating through branches, agencies or representative offices, will be required to provide adequate assurances of access to information on the operations of bank and its affiliates necessary to determine compliance with U.S. laws. In this case, with respect to the issue of supervision Legal Developments by home country authorities, the Board has considered the following information. Bank, as well as its parent banks, CIC Paris and CIC, are subject to the supervisory authority of the French Ministry of Finance, the Bank of France, the National Credit Counsel, the Credit Establishment Committee, and the Banking Commission. The Bank of France, which has authority regarding, inter alia, the proposed expansion of operations of credit institutions, has indicated that it does not object to Bank's establishment of the representative office. The Banking Commission, which has primary responsibility for supervising Bank, monitors its compliance with French law and regulatory standards as well as its financial condition. The Banking Commission reviews periodic financial reports submitted by Bank and annual reports prepared by independent auditors.4 Bank is required to file annual, semiannual and quarterly financial reports with the Banking Commission. Audited consolidated financial statements of Bank are submitted to the Banking Commission annually. Bank's quarterly and semiannual reports include unaudited balance sheets and income statements, and basic financial statements and key financial ratios covering such areas as risk-based capital, liquidity, foreign exchange, and concentration of credit. In addition to reviewing these reports, the Banking Commission meets with Bank management on a regular basis. Examiners from the Bank of France perform on-site examinations of Bank on behalf of the Banking Commission. The examinations of Bank are performed approximately once every five years and take approximately three months to complete. A written report is provided to Bank, and Bank is requested to forward a copy of the report to its statutory auditors. Bank's board of directors is required to meet to discuss the examination's findings. The examiners also meet with Bank's statutory auditors during the examination. The examination includes review of Bank's loan portfolio, deposit composition, banking services, securities and portfolio management activities, operations and profitability. If any problems are detected, the Banking Commission has the authority to conduct more frequent examinations and to require additional information from Bank at any time. Bank is required to maintain records on all of its subsidiaries and operations worldwide. Bank represents that it has procedures and policies in place to monitor and control its worldwide activities in accordance with regulatory requirements. Bank conducts 4. Bank's auditors are chosen from a list of firms approved by the Banking Commission. Representatives from these firms meet frequently with the Banking Commission to discuss general banking issues. 901 annual internal audits of its offices and subsidiaries. Based on all the facts of record, which include the information described above, the Board concludes that factors relating to the supervision of Bank by its home country supervisors are consistent with approval of the proposed representative office. Factors relating to the supervision of CIC and CIC Paris are also consistent with approval. The Board has also found that Bank engages directly in the business of banking outside of the United States through its commercial banking operations in France. Bank has provided the Board with the information necessary to assess the application through submissions that address relevant issues. The Board has also taken into account the additional standards set forth in section 7 of the IBA and Regulation K (see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). As noted above, the Bank of France has indicated that it does not object to Bank's establishing the proposed representative office. With respect to the financial and managerial resources of Bank, given Bank's record of operations in its home country, its overall financial resources, and its standing with its home country supervisors, the Board has determined that financial and managerial factors are consistent with approval of the proposed representative office. Bank appears to have the experience and capacity to support the proposed office and has also established controls and procedures for the proposed representative office to ensure compliance with U.S. law. Bank has committed that it will make available to the Board such information on the operations of Bank and any affiliate of Bank that the Board deems necessary to determine and enforce compliance with the IBA, the Bank Holding Company Act of 1956, as amended, and other applicable Federal law. If the disclosure of such information is prohibited by law, Bank and its ultimate parent have committed to cooperate with the Board to obtain approvals or consents that may be required for the Board to gain access to information that the Board may request. The Board has reviewed the restrictions on disclosure of information in France, and has communicated with certain government authorities regarding access to information. In light of these commitments and other facts of record, and subject to the condition described below, the Board concludes that Bank has provided adequate assurances of access to any necessary information the Board may request. On the basis of all the facts of record, and subject to the commitments made by Bank, as well as the terms and conditions set forth in this Order, the Board has determined that Bank's application to establish a representative office should be, and hereby is, approved. 902 Federal Reserve Bulletin • September 1993 If any restrictions on access to information on the operations or activities of Bank and any of its affiliates subsequently interfere with the Board's ability to determine the compliance by Bank or its affiliates with applicable federal statutes, the Board may require termination of any of the Bank's direct or indirect activities in the United States. Approval of this application is also specifically conditioned on compliance by Bank with the commitments made in connection with this application, and with the conditions contained in this Order. The commitments and conditions referred to above are conditions imposed in writing by the Board in connection with its decision, and may be enforced in proceedings under 12U.S.C. § 1818 or 12 U.S.C. § 1847 against Bank, its offices, and its affiliates. By order of the Board of Governors, effective July 26, 1993. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, LaWare, and Lindsey. Absent and not voting: Governor Phillips. JENNIFER J. JOHNSON Associate Secretary of the Board ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT By the Board State Financial Services Corporation Hales Corners, Wisconsin Order Approving Application to Acquire a Branch of a Savings Bank State Financial Services Corporation, Hales Corners, Wisconsin ("State Financial"), proposes to purchase certain assets and assume certain liabilities of the Waukesha branch office of North Shore Savings Bank, FSB, Brookfield, Wisconsin ("North Shore Bank"), through State Financial's wholly owned, nonmember, state-chartered bank subsidiary, Eastbrook State Bank, Brookfield, Wisconsin ("Eastbrook Bank"). State Financial has requested Board approval of this transaction pursuant to section 5(d)(3) of the Federal Deposit Insurance Act (12 U.S.C. § 1815(d)(3) ("FDI Act")), as amended by the Federal Deposit Insurance Corporation Improvement Act of 1991 (Pub. L. No. 102-242, § 501, 105 Stat. 2236, 2388 (1991)). Section 5(d)(3) of the FDI Act requires the Board to review any proposed merger between a bank owned by a bank holding company and a savings association, or branch of a savings association, in which the resulting institution is insured by the Bank Insurance Fund, and, in reviewing these proposals, to follow the procedures and consider the factors set forth in section 18(c) of the FDI Act (12 U.S.C. § 1828(c) ("the Bank Merger Act")). 12 U.S.C. § 1815(d)(3)(E).1 This transaction is also subject to review under the Bank Merger Act by the Federal Deposit Insurance Corporation ("FDIC"), which is the primary banking regulator for Eastbrook Bank. The FDIC has recently announced its approval of the transaction. Notice of the application, affording interested persons an opportunity to submit comments, has been given in accordance with the Bank Merger Act and the Board's Rules of Procedure (12 C.F.R. 262.3(b)). Reports on the competitive effects of the merger were requested from the United States Attorney General, the Office of the Comptroller of the Currency ("OCC"), and the FDIC. 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 the Bank Merger Act and section 5(d)(3) of the FDI Act. State Financial is the 21st largest commercial banking organization in Wisconsin, controlling deposits of $174.0 million, representing less than 1 percent of total deposits in commercial banking organizations in the state.2 The Waukesha branch office of North Shore Bank controls deposits of $17.9 million, representing less than 1 percent of total deposits in thrift institutions in the state. Upon consummation of the proposed transaction, State Financial would become the 20th largest commercial banking organization in Wisconsin, controlling deposits of $191.8 million, representing less than 1 percent of total deposits in commercial banking organizations in the state. State Financial and North Shore Bank compete in the Milwaukee banking market.3 State Financial is the 15th largest depository institution in that market,4 1. These factors include considerations relating to competition, financial and managerial resources, and future prospects of the existing and proposed institutions, and the convenience and needs of the communities to be served. 12 U.S.C. § 1828(c). 2. Bank deposit and state data are as of June 30,1992. Thrift deposit data are as of June 30, 1991. 3. The Milwaukee banking market is approximated by Milwaukee County, Waukesha County, Ozaukee County, and portions of Jefferson County, Racine County, Walworth County, and Washington County, all in Wisconsin. 4. In this context, depository institutions include commercial banks, savings banks, and savings associations. Market share data before consummation are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Because the deposits of Legal Developments 903 controlling deposits of $169.4 million, representing approximately 1 percent of total deposits in depository institutions in the market ("market deposits").5 The Waukesha branch office of North Shore Bank controls deposits of $8.9 million, representing less than 1 percent of market deposits. Upon consummation of this proposal, State Financial would control $187.3 million in deposits, representing approximately 1 percent of market deposits. The Herfindahl-Hirschman Index ("HHI") for this market would remain unchanged at 1120 points.6 Based on all the facts of record in this case, including the relatively small increase in market share and the de minimis effect on market concentration as measured by the HHI, the Board concludes that consummation of this proposal would not have a significantly adverse effect on competition or the concentration of banking resources in the Milwaukee banking market. The Board also concludes that consummation of this proposal would not have a significantly adverse effect on competition in any other relevant banking market. In assessing the impact of this proposal on the convenience and needs of the communities to be served, the Board also has considered the programs that State Financial has in place to serve community needs, and the programs that State Financial proposes to implement in connection with this acquisition. The Board also has taken into account the past record of performance of the State Financial organization under the Community Reinvestment Act ("CRA"). In addition, the Board has considered that the FDIC has also reviewed the CRA record of the banks involved in this transaction in light of the comments submitted by Protestant, and has approved the merger of the bank with North Shore Bank under the Bank Merger Act. Convenience and Needs Considerations A. CRA Examinations In analyzing the convenience and needs factor, the Board has considered the comments of the Fair Lending Coalition, Milwaukee, Wisconsin ("Protestant"), submitted in connection with this application. Protestant alleges that State Financial is not satisfactorily meeting the convenience and needs of the communities it serves because: (1) State Financial's subsidiary banks exclude from their service community delineations large portions of Milwaukee's central city specifically defined by the City of Milwaukee Comptroller ("the City of Milwaukee") as a "Target Area";7 and All of State Financial's subsidiary banks have received "satisfactory" ratings from their primary regulators in their most recent examinations for CRA performance.9 In this regard, Eastbrook Bank, chartered in 1990 and acquired by State Financial in July 1992, received a "satisfactory" rating in the examination of its CRA performance by the FDIC as of February 16, 1993 ("1993 examination"). North Shore Bank received a "satisfactory" rating from its primary regulator, the Office of Thrift Supervision, in December 1991. the Waukesha branch office of North Shore Bank will be transferred to a commercial bank under this proposal, those deposits are included at 100 percent in the calculation of pro forma market share. See Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve Bulletin 669, 670 n.9 (1990). 5. Market data are as of June 30, 1991. 6. 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. The Justice Department 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 more than 200 points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other non-depository financial institutions. 7. The City of Milwaukee has defined this area as having the following four characteristics: (1) Median assessed property value of one- and two-family dwellings is less than or equal to 80 percent of the median assessed property value of similar dwellings in the City of Milwaukee; (2) Protestant believes that the 1990 and 1991 Home Mortgage Disclosure Act ("HMDA") data indicate that State Financial's subsidiary banks have failed to meet the credit needs of African-Americans, Hispanics, and the residents of the Target Area.8 (2) Median family income of the area is less than or equal to 80 percent of the median family income of the City of Milwaukee; (3) The proportion of owner-occupied dwellings in the area is less than or equal to 80 percent of the proportion of owner-occupied dwellings in the City of Milwaukee; and (4) The vacancy rate of dwellings in the area is greater than or equal to 120 percent of the vacancy rate in the City of Milwaukee. 8. In particular, Protestant notes that of the 152 residential loans made by State Financial's subsidiary banks in the Milwaukee Metropolitan area in 1991, none of the loans was made in the Target Area or to African-Americans or Hispanics. Protestant also alleges that North Shore Bank's record of residential lending in the Target Area and to African-Americans and Hispanics is inadequate. 9. The following subsidiaries, all located in Wisconsin, received "satisfactory" CRA performance ratings as follows: (1) Edgewood State Bank, Greenfield ("Edgewood Bank"), from the FDIC as of November 23, 1992; (2) University National Bank, Milwaukee ("University Bank"), from the OCC as of September 30, 1990; and (3) State Bank, Hales Corners ("State Bank"), from the FDIC as of February 17, 1993. 904 Federal Reserve Bulletin • September 1993 B. Reasonableness of Delineated Communities Protestant has raised questions regarding whether the delineated service communities for State Financial's subsidiary banks improperly excludes the Milwaukee Comptroller's Target Area for the central city. A bank's delineated community under the CRA is "that local area or areas around each office or group of offices where [the bank! makes a substantial portion of its loans and all other areas equidistant from its offices or those areas."10 In the case of small banks like the State Financial subsidiaries, the CRA permits the banks to delineate communities that consist of portions of Standard Metropolitan Statistical Areas ("SMSA") or counties reasonably expected to be served by the institution. State Financial has undertaken a number of steps to ensure that its delineated communities encompass all appropriate low- and moderate-income neighborhoods, including census tracts located in the City of Milwaukee's Target Area. Eastbrook Bank's delineated community is in the Western portion of the Milwaukee SMSA, which is five miles from the Target Area. University Bank, which is a subsidiary of State Financial located near the Target Area, currently serves 16 of the Target Area's census tracts.11 State Financial has committed to expand the number of Target Area census tracts served in this area by University Bank to 41. Moreover, Eastbrook Bank would add four low- and moderate-income or minority census tracts to its delineated area as a result of this acquisition.12 The delineated service communities for State Financial's remaining banks, Edgewood Bank and State Bank, were found to be appropriate in their most recent examination for CRA performance by the primary supervisor for these banks. C. HMD A Data and Lending Practices The Board has carefully reviewed available 1990 and 1991 HMDA data of the State Financial subsidiary banks and North Shore Bank in light of Protestant's comments.13 While these data show denial rates that vary according to race, none of the recent CRA 10. 12 C.F.R. 228.4(b)(2). 11. The OCC has preliminarily indicated that this service area addresses concerns noted in University Bank's 1990 CRA examination. 12. Applicant has also committed to amend Eastbrook Bank's CRA statement to reflect Eastbrook's current delineated area and its focus on consumer lending. The FDIC has preliminarily indicated that the changes will adequately address its comments in the 1993 examination. 13. Since Eastbrook Bank was not required to file HMDA reports until 1992, 1990 and 1991 data were unavailable. performance examinations found any evidence of illegal discrimination or illegal credit practices.14 In addition, the Board notes that State Financial has taken steps designed to increase its lending activities in low- and moderate-income and minority areas, including the Target Area. For example, State Financial has committed that University Bank will originate $1 million of residential loans in the Target Area within the next five years. At least 60 percent of these loans will be to owner-occupants. State Financial has further committed that University Bank will participate in various initiatives in the Target Area with officials of the Eastside Housing Action Coalition ("ESHAC")15 and the North Central Branch of the Metropolitan Milwaukee YMCA. D. Other Aspects of CRA Performance Eastbrook Bank employs a variety of methods to assist in ascertaining and marketing credit products to its entire community. These efforts include a customer call program in which bank officers contact area customers regarding local credit needs. Reports of these contacts are reviewed by the president of Eastbrook Bank regularly, as well as by its board of directors on a monthly basis. Eastbrook Bank also contacts local community organizations to ascertain community credit needs,16 and intends to expand these contacts to include local government officials, churches, and other community organizations. Eastbrook Bank's marketing efforts include local newspapers and radio stations and special advertising in various church bulletins. Eastbrook Bank also offers a variety of consumer loans and mortgage loans for purchase or construction of one- to four-family dwelling units. With respect to small business lending, Eastbrook Bank participates in a number of government programs designed to help meet the credit needs of small business owners. For 14. Although the Board is concerned when the record of an institution indicates disparities in lending to minority applicants, the Board recognizes that HMDA data alone provide a limited measure of any given institution's lending in the communities that the institution serves. The Board also recognizes that HMDA data have limitations that make the data an inadequate basis, absent other information, for conclusively demonstrating whether an institution has engaged in illegal discrimination on the basis of race or ethnicity in making lending decisions. 15. ESHAC is an organization that provides rental housing, housing rehabilitation, youth activities, youth counseling, and commercial rehabilitation in Milwaukee's central city. University Bank's involvement with ESHAC began in 1980 when the bank's president served as a director of ESHAC. During the 1980's, University Bank served as a lender to ESHAC for housing rehabilitation purposes. 16. In this regard, Eastbrook Bank has met with First Heritage Management Company, which operates Heritage Place, a local housing complex for the elderly. As a result of these meetings, the bank has determined a need for personal banking services, and is in the process of assessing the feasibility of such a service. Legal Developments example, the bank recently approved a Small Business Administration guaranteed loan and a Wisconsin Business Development Finance Corporation 504 program debenture for a total of $1.4 million. The bank also has invested $750,000 in mortgage-related federal agency bonds. Based on these and other facts of record, the Board concludes that convenience and needs considerations, including the CRA performance records of State Financial, Eastbrook Bank, and North Shore Bank, are consistent with approval of this application. Other Considerations The Board also concludes that the financial and managerial resources and future prospects of State Financial and North Shore Bank are consistent with approval of this application. Moreover, the record in this case shows that: (1) The transaction will not result in the transfer of any federally insured depository institution's federal deposit insurance from one federal deposit insurance fund to the other; (2) State Financial and North Shore Bank currently meet, and upon consummation of the proposed transaction will continue to meet, all applicable capital standards; and (3) Since Eastbrook Bank is in Wisconsin and is acquiring certain assets and assuming certain liabilities of a Wisconsin federal savings bank, the proposed transaction would comply with the Douglas Amendment if North Shore Bank were a state bank 905 that State Financial was applying to acquire directly. See 12 U.S.C. § 1815(d)(3). Based on the foregoing and all the facts of record, the Board has determined that this application should be, and hereby is, approved. The Board's approval of this application is conditioned upon State Financial's compliance with the commitments made in connection with this application. For purposes of this action, the commitments and conditions relied on in reaching this decision are both conditions imposed in writing by the Board and, as such, may be enforced in proceedings under applicable law. This approval is limited to the proposal presented to the Board by State Financial, and may not be construed as applying to any other transaction. This transaction may not be consummated before the thirtieth calendar day after the effective date of this Order, or later than three months after the effective date of this Order, unless such period is extended by the Board or the Federal Reserve Bank of Chicago, acting pursuant to delegated authority. By order of the Board of Governors, effective July 8, 1993. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, LaWare, Lindsey, and Phillips. Absent and not voting: Governor Kelley. JENNIFER J. JOHNSON Associate Secretary of the Board ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991 By Federal Reserve Banks 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. Bank Holding Company Liberty Holding Company, Inc., Pensacola, Florida Acquired Thrift Liberty Bank of Fort Walton, Fort Walton Beach, Florida Surviving Bank(s) Liberty Bank, Pensacola, Florida Approval Date July 9, 1993 906 Federal Reserve Bulletin • September 1993 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY 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 3 Firstbank Holding Company of Colorado, Lakewood, Colorado FirstBank Holding Company of Colorado Employee Stock Ownership Plan, Lakewood, Colorado United Bankshares, Inc., Charleston, West Virginia Effective Date Bank(s) Applicant(s) FirstBank Holding Company of California, Lakewood, Colorado July 28, 1993 Financial Future Corporation, Ceredo, West Virginia July 8, 1993 Sections 3 and 4 . . Nonbanking Activity/ Company Appllcant(s) National City Corporation, Cleveland, Ohio Ohio Bancorp, Youngstown, Ohio Cortland Bancorp, Cortland, Ohio Florida Trust Services of Ohio Bancorp, Naples, Florida Effective Date July 22, 1993 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By Federal Reserve 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(s) American Bancorp of Oklahoma, Inc., Edmond, Oklahoma „ ,, . Bank(s) Texas Guaranty National Bank, Houston, Texas Reserve Bank Kansas City Effective Date July 6, 1993 Legal Developments Section 3—Continued Applicant(s) CCB Corporation, Kansas City, Missouri Central Financial Corporation, Columbia, Pennsylvania Central Mortgage Bancshares, Inc., Kansas City, Missouri Centura Banks, Inc., Rocky Mount, North Carolina Chemical Financial Corporation, Midland, Michigan Columbia Banking System, Inc., Bellevue, Washington J.E. Coonley Company, Hampton, Iowa Firstar Corporation, Milwaukee, Wisconsin F.W.S.F. Corporation, Milwaukee, Wisconsin First Community Financial Corporation, Elgin, Illinois First State Bancshares of DeKalb County, Inc., Fort Payne, Alabama FMB Bancshares, Inc., Lakeland, Georgia Huntington Bancshares, Incorporated, Columbus, Ohio Huntington Bancshares West Virginia, Inc., Columbus, Ohio Independent Bankshares, Inc., Abilene, Texas Independent Financial Corp., Dover, Delaware Lansing Financial Corporation, Lansing, Kansas Mark Twain Bancshares, Inc., St. Louis, Missouri Marquette Bancshares, Inc., Minneapolis, Minnesota Reserve Bank Bank(s) Acquisition Corporation, Leawood, Kansas Farmers First Savings Bank, Columbia, Pennsylvania Blue Springs Bank, Blue Springs, Missouri Effective Date Kansas City June 30, 1993 Philadelphia June 24, 1993 Kansas City July 26, 1993 Richmond July 7, 1993 Chicago July 21, 1993 San Francisco July 6, 1993 Chicago July 21, 1993 Chicago July 1, 1993 Chicago July 15, 1993 Atlanta July 16, 1993 Atlanta July 1, 1993 Cleveland July 9, 1993 The Winters State Bank, Winters, Texas Dallas July 26, 1993 The First State Bank of Lansing, Lansing, Kansas Parkway Financial, Inc., Overland Park, Kansas First State Holding Company, Coon Rapids, Minnesota Kansas City July 16, 1993 St. Louis June 23, 1993 Minneapolis July 21, 1993 Interim Bank, Forest City, North Carolina Key State Bank, Owosso, Michigan Columbia National Bankshares, Inc., Longview, Washington Sheffield Savings Bank, Sheffield, Iowa Athens Bancorp, Inc., Wausau, Wisconsin Bank of Athens, Wausau, Wisconsin First Community Bank, Elgin, Illinois First State Bank of DeKalb County, Fort Payne, Alabama United Bankshares, Inc., Nashville, Georgia Commerce Banc Corporation, Charleston, West Virginia 907 908 Federal Reserve Bulletin • September 1993 Section 3—Continued Applicant(s) Montgomery Bancshares, Inc., Montgomery, Illinois Northeast Bancorp, Inc., Brandon, South Dakota Nowata Bancshares, Inc., Nowata, Oklahoma Paloma Bancshares, Inc., Paloma, Illinois Prestige Financial Corp., Flemington, New Jersey Rolla Holding Company, Inc., Rolla, North Dakota Southeast Capital Corporation ESOP, Idabel, Oklahoma South Plains Financial, Inc., Morton, Texas SouthTrust Corporation, Birmingham, Alabama Susquehanna Bancshares, Inc., Lititz, Pennsylvania Western Bancshares, Inc., Van Horn, Texas Wisconsin Bancshares, Inc., Newport, Minnesota Reserve Bank Bank(s) Bank of Montgomery, Montgomery, Illinois Wilmot State Bank, Wilmot, South Dakota The First National Bank of Nowata, Nowata, Oklahoma Western Illinois Bancorp, Inc., Blandinsville, Illinois Prestige State Bank, Flemington, New Jersey First National Bank, Hettinger, North Dakota Southeast Capital Corporation, Idabel, Oklahoma South Plains Delaware Financial Corporation, Dover, Delaware Morton Financial Corporation, Morton, Texas South Plains Financial Corporation, Dover, Delaware Hub Financial Corporation, Lubbock, Texas SouthTrust Bank, F.S.B., Concord, North Carolina Central Financial Corporation, Columbia, Pennsylvania First State Bank, Loraine, Texas Security Bancorporation, Inc., Newport, Minnesota Effective Date Chicago July 21, 1993 Minneapolis July 13, 1993 Kansas City July 14, 1993 St. Louis June 25, 1993 New York June 25, 1993 Minneapolis July 19, 1993 Kansas City July 2, 1993 Dallas July 19, 1993 Atlanta July 9, 1993 Philadelphia June 24, 1993 Dallas July 13, 1993 Minneapolis July 16, 1993 Legal Developments 909 Section 4 Applicant(s) BB&T Financial Corporation, Wilson, North Carolina Centura Banks, Inc., Rocky Mount, North Carolina CoreStates Financial Corp., Philadelphia, Pennsylvania Fifth Third Bancorp, Cincinnati, Ohio Menomonie Financial Services, Inc., Menomonie, Wisconsin Mountain Parks Financial Corporation, Minneapolis, Minnesota U.S. Trust Corporation, New York, New York Nonbanking Activity/ Company Southeast Switch, Inc., Maitland, Florida CFS Venture Corporation, Rocky Mount, North Carolina CoreStates Community Development Corporation, Philadelphia, Pennsylvania Shelby County Bancorp, Shelbyville, Indiana to engage de novo in the activities of data processing and providing management consulting to nonaffiliated depository institutions Mountain Parks Data Corp., Golden, Colorado CTMC Holding Company, Portland, Oregon Reserve Bank Effective Date Richmond July 15, 1993 Richmond July 8, 1993 Philadelphia July 20, 1993 Cleveland July 20, 1993 Minneapolis July 8, 1993 Kansas City July 12, 1993 New York July 7, 1993 APPLICATIONS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Applicant(s) Colorado National Bank—Grand Junction, Grand Junction, Colorado F & M Bank—Winchester, Winchester, Virginia Interim Bank, Forest City, North Carolina Bank(s) Colorado National Bank—Glen wood, Glenwood Springs, Colorado The Farmers and Merchants National Bank of Hamilton, Hamilton, Virginia Centura Bank, Rocky Mount, North Carolina Reserve Bank Effective Date Kansas City June 30, 1993 Richmond June 30, 1993 Richmond July 7, 1993 910 Federal Reserve Bulletin • September 1993 Applications Approved Under Bank Merger Act—Continued Applicant(s) New Bank, Morristown, Tennessee Sun Bank of Tampa Bay , Tampa, Florida Union Bank and Trust Company, Bowling Green, Virginia United Southern Bank of Morristown, Morristown, Tennessee The Hillsboro Sun Bank, Plant City, Florida Dominion Bank, N.A., Roanoke, Virginia PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Federal Reserve Banks in which the Board of Governors is not named a party. Kubany v. Board of Governors, et al., No. 93-1428 (D. D.C., filed July 9, 1993). Action challenging Board determination under the Freedom of Information Act. Bennett v. Greenspan, No. 93-1813 (D. D.C., filed April 20, 1993). Employment discrimination action. Ezell v. Federal Reserve Board, No. 93-0361 (D. D.C., filed February 19, 1993). Action seeking damages for personal injuries arising from motor vehicle collision. The Board's motion to dismiss was filed July 2, 1993. Amann v. Prudential Home Mortgage Co., et al., No. 93-10320 WD (D. Massachusetts, filed February 12, 1993). Action for fraud and breach of contract arising out of a home mortgage. On April 17, 1993, the Board filed a motion to dismiss. Adams v. Greenspan, No. 93-0167 (D. D.C., filed January 27,1993). Action by former employee under the Civil Rights Act of 1964 and the Rehabilitation Act of 1973 concerning termination of employment. Sisti v. Board of Governors, No. 93-0033 (D. D.C., filed January 6, 1993). Challenge to Board staff interpretation with respect to margin accounts. The Board's motion to dismiss was granted on May 13, 1993. On June 3,1993, the petitioner filed a notice of appeal. U.S. Check v. Board of Governors, No. 92-2892 (D. D.C., filed December 30, 1992). Challenge to partial denial of request for information under the Freedom of Information Act. CBC, Inc. v. Board of Governors, No. 92-9572 (10th Cir., filed December 2, 1992). Petition for review of Reserve Bank Bank(s) Effective Date Atlanta July 9, 1993 Atlanta June 30, 1993 Richmond July 7, 1993 civil money penalty assessment against a bank holding company and three of its officers and directors for failure to comply with reporting requirements. The Board's brief was filed on March 19, 1993. DLG Financial Corporation v. Board of Governors, No. 392 Civ. 2086-G (N.D. Texas, filed October 9, 1992). Action to enjoin the Board and the Federal Reserve Bank of Dallas from taking certain enforcement actions, and seeking money damages on a variety of tort and contract theories. On October 9, 1992, the court denied plaintiffs' motion for a temporary restraining order. On March 30, 1993, the court granted the Board's motion to dismiss as to it, and also dismissed certain claims against the Reserve Bank. On April 29, the plaintiffs filed an amended complaint. The Board's motion to dismiss the amended complaint was filed on May 17. Zemel v. Board of Governors, No. 92-1056 (D. D.C., filed May 4, 1992). Age Discrimination in Employment Act case. The parties' cross-motions for summary judgment are pending. State of Idaho, Department of Finance v. Board of Governors, No. 92-70107 (9th Cir., filed February 24, 1992). Petition for review of Board order returning without action a bank holding company application to relocate its subsidiary bank from Washington to Idaho. On June 4, 1993, the Court of Appeals denied the petition for review. In re Subpoena Served on the Board of Governors, Nos. 91-5427, 91-5428 (D.C. Cir., filed December 27,1991). Appeal of order of district court, dated December 3, 1991, requiring the Board and the Office of the Comptroller of the Currency to produce confidential examination material to a private litigant. On June 26,1992, the court of appeals affirmed the district court order in part, but held that the bank examination privilege was not waived by the agencies' provision of examination materials to the examined institution, and remanded for further consideration of the privilege issue. On August 6, 1992, the Legal Developments district court ordered the matter held in abeyance pending settlement of the underlying action. Board of Governors v. Kemal Shoaib, No. CV 91-5152 (C.D. California, filed September 24, 1991). Action to freeze assets of individual pending administrative adjudication of civil money penalty assessment by the Board. On October 15, 1991, the court issued a preliminary injunction restraining the transfer or disposition of the individual's assets. Board of Governors v. Ghaith R. Pharaon, No. 91CIV-6250 (S.D. New York, filed September 17, 1991). Action to freeze assets of individual pending administrative adjudication of civil money penalty assessment by the Board. On September 17, 1991, the court issued an order temporarily restraining the transfer or disposition of the individual's assets. FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD OF GOVERNORS Colonial Bancshares, Inc. Des Peres, Missouri The Federal Reserve Board announced on July 19, 1993, the issuance of a Cease and Desist Order against Colonial Bancshares, Inc., Des Peres, Missouri, and Kenneth Davis, Kenneth Tiemeyer, David Fairchild, and John Weber, institution-affiliated parties of Colonial Bancshares, Inc. The Dollar Savings and Trust Company Youngstown, Ohio The Federal Reserve Board announced on July 23, 1993, the issuance of a Cease and Desist Order against The Dollar Savings and Trust Company, Youngstown, Ohio. Dan S. Geiger Beverly Hills, California The Federal Reserve Board announced on July 19, 1993, the issuance of an Order of Assessment of a Civil Money Penalty against Dan S. Geiger, an institutionaffiliated party of First Pacific Bancorp, Inc., Beverly Hills, California. 911 International Bancshares, Inc. Gladstone, Missouri The Federal Reserve Board announced on July 19, 1993, the issuance of a Cease and Desist Order against International Bancshares, Inc., Gladstone, Missouri. WRITTEN AGREEMENTS APPROVED BY FEDERAL RESERVE BANKS American Pacific Bank Aumsville, Oregon The Federal Reserve Board announced on July 13, 1993, the execution of a Written Agreement among the Federal Reserve Bank of San Francisco, the Administrator of the Division of Finance and Corporate Securities of the State of Oregon, and the American Pacific Bank, Aumsville, Oregon. The Dollar Savings and Trust Company Youngstown, Ohio The Federal Reserve Board announced on July 23, 1993, the execution of a Written Agreement among The Dollar Savings and Trust Company, Youngstown, Ohio, the Federal Reserve Bank of Cleveland, and the Superintendent of Banks for the State of Ohio. Glendale Bancorporation Voorhees, New Jersey The Federal Reserve Board announced on July 13, 1993, the execution of a Written Agreement between the Federal Reserve Bank of Philadelphia and Glendale Bancorporation, Voorhees, New Jersey. Ohio Bancorp Youngstown, Ohio The Federal Reserve Board announced on July 23, 1993, the execution of a Written Agreement among Ohio Bancorp, Youngstown, Ohio, the parent bank holding company of The Dollar Savings and Trust Company, Youngstown, Ohio, the Federal Reserve Bank of Cleveland, and the Superintendent of Banks for the State of Ohio. Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS A3 Guide to Tabular Presentation Assets and liabilities A22 Large reporting banks A24 Branches and agencies of foreign banks Domestic Financial Statistics MONEY STOCK AND BANK CREDIT FINANCIAL MARKETS A4 A25 Commercial paper and bankers dollar acceptances outstanding A25 Prime rate charged by banks on short-term business loans A26 Interest rates—money and capital markets A27 Stock market—Selected statistics A5 A6 A7 Reserves, money stock, liquid assets, and debt measures Reserves of depository institutions, Reserve Bank credit Reserves and borrowings—Depository institutions Selected borrowings in immediately available funds—Large member banks FEDERAL FINANCE POLICY INSTRUMENTS A8 Federal Reserve Bank interest rates A9 Reserve requirements of depository institutions A10 Federal Reserve open market transactions FEDERAL RESERVE BANKS A l l Condition and Federal Reserve note statements A12 Maturity distribution of loan and security holdings A28 A29 A30 A30 Federal fiscal and financing operations U.S. budget receipts and outlays Federal debt subject to statutory limitation Gross public debt of U.S. Treasury—Types and ownership A31 U.S. government securities dealers—Transactions A32 U.S. government securities dealers—Positions and financing A3 3 Federal and federally sponsored credit agencies—Debt outstanding MONETARY AND CREDIT AGGREGATES A13 Aggregate reserves of depository institutions and monetary base A14 Money stock, liquid assets, and debt measures A16 Deposit interest rates and amounts outstanding— commercial and BIF-insured banks A17 Bank debits and deposit turnover A18 Loans and securities—All commercial banks COMMERCIAL BANKING INSTITUTIONS A19 Major nondeposit funds A20 Assets and liabilities, Wednesday figures SECURITIES MARKETS AND CORPORATE FINANCE A34 New security issues—Tax-exempt state and local governments and corporations A3 5 Open-end investment companies—Net sales and assets A35 Corporate profits and their distribution A35 Nonfarm business expenditures on new plant and equipment A36 Domestic finance companies—Assets and liabilities, and consumer, real estate, and business credit 2 Federal Reserve Bulletin • September 1993 Domestic Financial Statistics—Continued REAL ESTATE A37 Mortgage markets A3 8 Mortgage debt outstanding CONSUMER INSTALLMENT CREDIT A39 Total outstanding A39 Terms FLOW OF FUNDS A40 A42 A43 A44 Funds raised in U.S. credit markets Summary of financial transactions Summary of credit market debt outstanding Summary of financial assets and liabilities Domestic Nonfinancial Statistics A54 Foreign official assets held at Federal Reserve Banks A55 Foreign branches of U.S. banks—Balance sheet data A57 Selected U.S. liabilities to foreign official institutions REPORTED BY BANKS IN THE UNITED STATES A57 A58 A60 A61 Liabilities to and claims on foreigners Liabilities to foreigners Banks' own claims on foreigners Banks' own and domestic customers' claims on foreigners A61 Banks' own claims on unaffiliated foreigners A62 Claims on foreign countries—Combined domestic offices and foreign branches REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES SELECTED MEASURES A45 Nonfinancial business activity—Selected measures A45 Labor force, employment, and unemployment A46 Output, capacity, and capacity utilization A47 Industrial production—Indexes and gross value A49 Housing and construction A50 Consumer and producer prices A51 Gross domestic product and income A52 Personal income and saving International Statistics A63 Liabilities to unaffiliated foreigners A64 Claims on unaffiliated foreigners SECURITIES HOLDINGS AND TRANSACTIONS A65 Foreign transactions in securities A66 Marketable U.S. Treasury bonds and notes—Foreign transactions INTEREST AND EXCHANGE RATES SUMMARY STATISTICS A67 Discount rates of foreign central banks A67 Foreign short-term interest rates A68 Foreign exchange rates A53 U.S. international transactions—Summary A54 U.S. foreign trade A54 U.S. reserve assets A69 Guide to Statistical Releases and Special Tables A3 Guide to Tabular Presentation SYMBOLS AND c e n.a. n.e.c. P r * 0 ATS BIF CD CMO FFB FHA FHLBB FHLMC FmHA FNMA FSLIC G-7 GENERAL ABBREVIATIONS Corrected Estimated Not available Not elsewhere classified 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) Calculated to be zero Cell not applicable Automatic transfer service Bank insurance fund Certificate of deposit Collateralized mortgage obligation Federal Financing Bank Federal Housing Administration Federal Home Loan Bank Board Federal Home Loan Mortgage Corporation Farmers Home Administration Federal National Mortgage Association Federal Savings and Loan Insurance Corporation Group of Seven G-10 GNMA GDP HUD IMF IO IPCs IRA MMDA NOW OCD OPEC OTS PO REIT REMIC RP RTC SAIF SCO SDR SIC SMSA VA Group of Ten Government National Mortgage Association Gross domestic product Department of Housing and Urban Development International Monetary Fund Interest only Individuals, partnerships, and corporations Individual retirement account Money market deposit account Negotiable order of withdrawal Other checkable deposit Organization of Petroleum Exporting Countries Office of Thrift Supervision Principal only Real estate investment trust Real estate mortgage investment conduit Repurchase agreement Resolution Trust Corporation Savings Association Insurance Fund Securitized credit obligation Special drawing right Standard Industrial Classification Standard metropolitan statistical area Veterans Administration INFORMATION In many of the tables, components do not sum to totals because of rounding. Minus signs are used to indicate (1) a decrease, (2) a negative figure, or (3) an outflow. "U.S. government securities" may include guaranteed issues of U.S. government agencies (the flow of funds figures also include not fully guaranteed issues) as well as direct obligations of the Treasury. "State and local government" also includes municipalities, special districts, and other political subdivisions. A4 DomesticNonfinancialStatistics • September 1993 1.10 R E S E R V E S , M O N E Y STOCK, L I Q U I D A S S E T S , A N D D E B T M E A S U R E S Percent annual rate of change, seasonally adjusted1 1992 1993 1993 Monetary or credit aggregate Q4 9.3 9.9 8.4 10.5 25.8 25.3 27.1 12.6 9.3 8.7 9.5 9.1 11.7 .8 .1 1.1 4.9 16.8 2.7 -.2 1.6r 4.3 6.6 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 components Time and savings deposits Commercial banks Savings, including MMDAs Small time Large time ' Thrift institutions 15 Savings, including MMDAs Small time 16 17 Large time 8 ' 12 13 14 Money market mutual funds 18 General purpose and broker-dealer 19 Institution-only Debt components4 20 Nonfederal 21 June Mar. Apr/ May 10.8 12.4 10.6 9.8 5.6 9.3 8.3 8.5 5.3 3.0 4.3 8.9 .7 3.3 1.1 7.6 36.5 39.5 35.5 13.8 5.1 7.0 3.8 10.9 -3.8 -2.5r 4.4 10.6 2.2 2.4 n.a. n.a. -.2 -4.0r -1.6r -1.2r 3.9 2.6 r -.9 -1.3 -.6 5.5 9.2 .6 3.2 4.0 5.8 27.6 10.7r 8.5 r 10.0 6.1 7.3 2.2 -1.3 n.a. n.a. -2.4 —3.3r -3.0 16.8 3.5 r -1.9 -.1 -19.5 -3.2 -3.5 -2.8 -14.4 -5.4r -B.O1 -1.4 3.2 -5.5r ll.O 1 10.9 -17.4 -18.6 12.9 -17.2r -18.4 1.6 -7.6 -17.9 4.6 -6.7 .1 2.7 r 3.3 r -12.3 -2.9 -2.9 -20.9 3.2 -9.1 21.3 13.8r -10.3 3.4 r 6.9 -10.2 -14.5 9.2 -18.6 -14.9 8.7 -21.7 -11.3 -.2 -19.0r -17.3 1.0 -11.2 -7.5 -10.0 -24.1 -28.6 -5.1 — 12.3r -18.3 2.3 -9.3 13.0 9.6 —5.9 -14.7r 3.1 -13.3 -11.2 -7.4 32.9 -4.2 -19.4 -10.1 -14.1 -.8 .5 -21.2 25.5 -1.8 -5.9 -5.0 -3.0 17.4 14.4 -1.4 -27.8 10.7 3.0 6.0 3.7 8.6 2.9 5.3 3.4 15.0 2.2 10.9 4.0 10.9 4.3 n.a. n.a. 1. Unless otherwise noted, rates of change are calculated from average amounts outstanding during preceding month or quarter. 2. Figures incorporate adjustments for discontinuities, or " b r e a k s , " associated with regulatory changes in reserve requirements. (See also table 1.20.) 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency component of the money stock, plus (3) (for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits, and Vault C a s h " and for all weekly reporters whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. 4. Composition of the money stock measures and debt is as follows: M l : (1) currency outside the U.S. 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 owed 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 (OCDs), 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. Seasonally adjusted M l is computed by summing currency, travelers checks, demand deposits, and OCDs, each seasonally adjusted separately. M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements (RPs) issued by all depository institutions and overnight Eurodollars issued to U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in both taxable and tax-exempt general-purpose and broker-dealer money market funds. Excludes individual retirement accounts (IRAs) 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. Seasonally adjusted M2 is computed by adjusting its non-Mi component as a whole and then adding this result to seasonally adjusted M l . M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of $100,000 or more) issued by all depository institutions, (2) 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 (3) balances in both taxable and Q2 Feb. Q1 institutions2 1 2 3 4 Nontrgnsaction 10 In M2 y 11 In M3 only 6 Q3 n.a. n.a. tax-exempt, institution-only money market funds. Excludes amounts held by depository institutions, the U.S. government, money market funds, and foreign banks and official institutions. Also excluded is the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds. Seasonally adjusted M3 is computed by adjusting its non-M2 component as a whole and then adding this result to seasonally adjusted M2. 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 fund holdings of these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted separately, and then adding this result to M3. 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. Data are derived from the Federal Reserve Board's flow of funds accounts. Data on debt of domestic nonfinancial sectors are monthly averages, derived by averaging adjacent month-end levels. Growth rates for debt reflect adjustments for discontinuities over time in the levels of debt presented in other tables. 5. Sum of (1) overnight RPs and Eurodollars, (2) money market fund balances (general purpose and broker-dealer), (3) savings deposits (including MMDAs), and (4) small time deposits. 6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U . S . residents, and (4) money market ftind balances (institution-only), less (5) a consolidation adjustment that represents the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds. This sum is seasonally adjusted as a whole. 7. Small time deposits—including retail RPs—are those issued in amounts of less than $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions are subtracted from small time deposits. 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those booked at international banking facilities. 9. Large time deposits at commercial banks less those held by money market funds, depository institutions, U.S. government and foreign banks and official institutions. Money Stock and Bank Credit A5 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT 1 Millions of dollars Apr. Average of daily figures Average of daily figures for week ending on date indicated 1993 1993 May June May 19 May 26 June 2 June 9 June 16 June 23 June 30 SUPPLYING RESERVE F U N D S 1 Reserve Bank credit outstanding U.S. government securities 2 Bought outright—System account 3 Held under repurchase agreements . . . Federal agency obligations 4 Bought outright 5 Held under repurchase agreements . . . 6 Acceptances Loans to depository institutions Adjustment credit 7 Seasonal credit 8 9 Extended credit 10 Float 11 Other Federal Reserve assets 344,222 346,081r 354,054 344,923 348,867 347,506 351,713 350,351 354,576 361,081 303,316 3,293 305,421 2,598 312,928 3,537 305,724 904 305,947 5,686 305,007 5,473 311,167 3,401 313,630 0 314,888 2,351 314,052 7,754 5,106 25 0 5,086 117 0 5,050 220 0 5,095 114 0 5,084 390 0 5,054 34 0 5,054 152 0 5,054 0 0 5,054 178 0 5,035 581 0 29 40 0 618 31,794 43 83 0 435r 32,298 55 143 0 468 31,652 8 87 0 671 32,319 20 93 0 161 31,485 27 97 0 57 31,757 7 105 0 422 31,405 5 130 0 412 31,119 19 160 0 402 31,525 202 185 0 650 32,622 12 Gold stock 13 Special drawing rights certificate account . 14 Treasury currency outstanding 11,054 8,018 21,605 11,054 8,018 21,657 11,056 8,018 21,718 11,054 8,018 21,657 11,054 8,018 21,671 11,053 8,018 21,685 11,054 8,018 21,699 11,055 8,018 21,713 11,058 8,018 21,727 11,057 8,018 21,741 335,293 514 338,480 497 342,797 469 338,604 498 338,602 488 341,189 488 342,816 481 342,988 481 342,701 461 342,877 448 6,062 241 5,851 272 8,781 238 5,937 268 6,110 196 5,984 332 4,468 186 5,364 225 9,667 206 16,256 218 6,391 317 6,193 310 6,224 284 6,296 322 6,324 312 6,297 305 6,238 278 6,135 284 6,209 274 6,295 291 ABSORBING RESERVE F U N D S 15 Currency in circulation 16 Treasury cash holdings Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 18 Foreign 19 Service-related balances and adjustments 20 Other 21 Other Federal Reserve liabilities and capital 22 Reserve balances with Federal Reserve Banks 3 9,148 9,509 9,360 9,243 9,267 9,235 9,369 9,440 9,379 9,301 26,933 25,699r 26,692 24,485 28,311 24,433 28,648 26,220 26,481 26,212 June 16 June 23 June 30 Wednesday figures End-of-month figures Apr. May June May 19 May 26 June 2 June 9 SUPPLYING RESERVE F U N D S 1 Reserve Bank credit outstanding U.S. government securities 2 Bought outright—System account 2 3 Held under repurchase agreements . . . Federal agency obligations Bought outright 4 5 Held under repurchase agreements . . . Acceptances. 6 Loans to depository institutions 7 Adjustment credit 8 Seasonal credit 9 Extended credit 10 Float 11 Other Federal Reserve assets 343,696 346,958r 368,869 342,687 356,734 349,642 349,213 351,462 362,036 368,869 305,381 0 304,494 5,347 313,143 15,056 305,540 35 306,148 11,930 305,878 6,163 311,994 312 314,658 0 313,453 10,261 313,143 15,056 5,095 0 0 5,054 0 0 5,032 949 0 5,095 10 0 5,054 1,120 0 5,054 140 0 5,054 75 0 5,054 0 0 5,054 993 0 5,032 949 0 20 63 2 619 32,517 37 92 0 52r 31,881 1,357 177 0 232 32,924 5 94 0 895 31,012 19 93 0 351 32,019 8 110 0 594 31,694 3 116 0 455 31,204 12 144 0 414 31,180 22 181 0 -229 32,301 1,357 177 0 232 32,924 12 Gold stock 13 Special drawing rights certificate account . 14 Treasury currency outstanding 11,054 8,018 21,629 11,053 8,018 21,685 11,057 8,018 21,741 11,054 8,018 21,657 11,054 8,018 21,671 11,053 8,018 21,685 11,053 8,018 21,699 11,058 8,018 21,713 11,058 8,018 21,727 11,057 8,018 21,741 335,907 505 340,867 489 344,154 432 338,568 489 339,528 483 342,437 481 343,054 481 342,993 481 342,643 451 344,154 432 7,273 221 5,787 194 28,386 286 6,080 263 5,369 246 6,751 451 5,238 203 8,605 292 13,673 186 28,386 286 6,048 291 6,297r 300 6,295 297 6,296 323 6,324 311 6,297 307 6,238 274 6,135 348 6,209 268 6,295 297 ABSORBING RESERVE F U N D S 15 Currency in circulation 16 Treasury cash holdings Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 18 Foreign 19 Service-related balances and adjustments 20 Other 21 Other Federal Reserve liabilities and capital 22 Reserve balances with Federal Reserve Banks 3 9,847 9,263 8,705 9,094 9,139 9,045 9,294 9,238 9,240 8,705 24,305 24,518r 21,131 22,302 36,077 24,630 25,202 24,158 30,169 21,131 1. For amounts of cash held as reserves, see table 1.12. 2. Includes securities loaned—fully guaranteed by U.S. government securities pledged with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back under matched sale-purchase transactions. 3. Excludes required clearing balances and adjustments to compensate for float, A6 DomesticNonfinancialStatistics • September 1993 1.12 RESERVES A N D BORROWINGS Depository Institutions 1 Millions of dollars Prorated monthly averages of biweekly averages Reserve classification 1 2 3 4 5 6 7 8 9 10 Reserve balances with Reserve Banks Total vault cash 3 Applied vault cash 4 , Surplus vault cash Total reserves 6 Required reserves Excess reserve balances at Reserve Banks . . . Total borrowings at Reserve Banks 8 Seasonal borrowings Extended credit 9 1990 1991 1992 1992 Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June 30,237 31,789 28,884 2,905 59,120 57,456 1,664 326 76 23 26,659 32,510 28,872 3,638 55,532 54,553 979 192 38 1 25,368 34,535 31,172 3,364 56,540 55,385 1,155 124 18 1 25,368 34,535 31,172 3,364 56,540 55,385 1,155 124 18 1 23,636 35,991 32,368 3,623 56,004 54,744 1,260 165 11 1 23,515 33,914 30,368 3,546 53,882 52,778 1,104 45 18 0 24,383 33,293 29,912 3,381 54,296 53,083 1,213 91 26 0 26,975 32,721 29,567 3,154 56,541 55,445 1,096 73 41 0 25,968 33,462 30,133 3,329 56,101r 55,104 996r 121 84 0 26,462 34,106 30,776 3,330 57,238 56,325 913 181 142 0 1993 Biweekly averages of daily figures for weeks ending on date indicated 1993 1 2 3 4 5 6 7 8 9 10 Reserve balances with Reserve Banks Total vault cash* Applied vault cash Surplus vault cash 5 Total reserves Required reserves Excess reserve balances at Reserve Banks Total borrowings at Reserve Banks 8 Seasonal borrowings Extended credit 9 ... Mar. 3 Mar. 17 Mar. 31 Apr. 14 Apr. 28 May 12 May 26 June 9 r June 23 July 7 24,335 32,163 28,902 3,261 53,237 52,666 571 56 20 0 24,029 34,487 30,944 3,543 54,973 53,683 1,290 93 22 0 24,747 32,343 29,098 3,245 53,845 52,572 1,273 98 32 0 26,612 33,218 29,995 3,223 56,607 55,763 844 38 31 0 27,586 32,010 28,960 3,050 56,546 55,160 1,387 99 47 1 25,228 34,225 30,816 3,409 56,044 55,217 828 142 71 1 26,396 32,728 29,455 3,273 55,851 54,649 1,202 105 90 0 26,543 33,685 30,391 3,294 56,933 56,109 824 118 101 0 26,352 34,237 30,897 3,341 57,248 56,477 772 158 145 0 26,578 34,385 31,030 3,355 57,608 56,300 1,308 311 190 0 1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For ordering address, see inside front cover. 2. Excludes required clearing balances and adjustments to compensate for float and includes other off-balance-sheet " a s - o f ' adjustments. 3. Total "lagged" vault cash held by depository institutions subject to reserve requirements. Dates refer to the maintenance periods during which the vault cash can be used to satisfy reserve requirements. The maintenance period for weekly reporters ends sixteen days after the lagged computation period during which the vault cash is held. Before Nov. 25,1992, the maintenance period ended thirty days after the lagged computation period. 4. All vault cash held during the lagged computation period by "bound" institutions (that is, those whose required reserves exceed their vault cash) plus the amount of vault cash applied during the maintenance period by "nonbound" institutions (that is, those whose vault cash exceeds their required reserves) to satisfy current reserve requirements. 5. Total vault cash (line 2) less applied vault cash (line 3). 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash (line 3). 7. Total reserves (line 5) less required reserves (line 6). 8. Also includes adjustment credit. 9. 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 with traditional short-term adjustment credit, the money market impact of extended credit is similar to that of nonborrowed reserves. Money Stock and Bank Credit 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS A7 Large Banks1 Millions of dollars, averages of daily figures 1993, week ending Monday Source and maturity 1 2 3 4 5 6 7 8 Federal funds purchased, repurchase agreements, and other selected borrowings 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 official institutions, and U.S. government agencies F o r one day or under continuing contract For all other maturities Repurchase agreements on U.S. government agency securities Brokers and nonbank dealers in securities F o r one day or under continuing contract F o r all other maturities All other customers For one day or under continuing contract For all other maturities May 3 May 10 May 17 May 24 May 31 June 7 June 14 June 21 June 28 68,032 13,709 68,197 13,490 69,117 13,227 65,952 12,864 70,624 12,825 74,804 13,802 76,818 14,807 72,102 14,560 67,613 13,505 16,829 19,943 15,975 19,771 18,618 21,278 21,775 20,739 18,376 20,968 19,975 21,003 18,784 21,028 19,191 18,699 20,843 19,745 12,017 26,812 12,028 26,127 12,650 26,634 13,386 27,626 13,028 27,872 15,690 28,435 15,708 28,888 13,790 27,625 11,380 27,186 24,272 14,152 22,777 13,650 23,066 13,877 23,164 13,886 24,170 14,364 23,262 14,441 25,386 14,530 24,028 14,457 23,209 15,108 42,605 22,042 41,271 22,351 40,746 23,830 39,174 20,707 43,503 20,169 r 44,107 23,201 43,067 24,632 44,117 25,825 41,742 21,259 and federal 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 2 1. Banks with assets of $4 billion or more as of Dec. 31, 1988. Data in this table also appear in the Board's H.5 (507) weekly statistical release. For ordering address, see inside front cover. 2. Brokers and nonbank dealers in securities, other depository institutions, foreign banks and official institutions, and U.S. government agencies. A8 DomesticNonfinancialStatistics • September 1993 1.14 FEDERAL RESERVE B A N K INTEREST RATES Percent per year Current and previous levels Adjustment credit 1 Federal Reserve Bank On 7/30/93 Seasonal credit 2 Effective date Previous rate On 7/30/93 Boston New York . . . Philadelphia.. Cleveland Richmond.... Atlanta 7/2/92 7/2/92 7/2/92 7/6/92 7/2/92 7/2/92 3.5 3.10 Chicago St. Louis Minneapolis.. Kansas C i t y . . Dallas San Francisco 7/2/92 7/7/92 7/2/92 7/2/92 7/2/92 7/2/92 3.5 3.10 Extended credit On 7/30/93 Effective date Previous rate 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 3.65 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 7/22/93 Effective date Previous rate 3.15 3.60 3.65 Range of rates for adjustment credit in recent years 4 Effective date In effect Dec. 31, 1977 1978—Jan. May July Aug. Sept. Oct. Nov. 9 20 11 12 3 10 21 22 16 20 1 3 1979—July 20 Aug. 17 20 Sept. 19 21 Oct. 8 10 1980—Feb. 15 19 May 29 30 June 13 16 29 July 28 Sept. 26 Nov. 17 Dec. 5 Range (or level)— All F.R. Banks 6 6-6.5 6.5 6.5-7 7 7-7.25 7.25 7.75 8 8-8.5 8.5 8.5-9.5 9.5 10 10-10.5 10.5 10.5-11 11 11-12 12 12-13 13 12-13 12 11-12 11 10 10-11 11 12 12-13 F.R. Bank of N.Y. 6 6.5 6.5 7 7 7.25 7.25 7.75 8 8.5 8.5 9.5 9.5 10 10.5 10.5 11 11 12 12 13 13 13 12 11 11 10 10 11 12 13 Effective 1981-—May 5 Nov. 7 6 4 Effective date Range (or level)— All F.R. Banks F.R. Bank of N.Y. 1986—Aug. 21 22 5.5-6 5.5 5.5 5.5 1987—Sept. 4 11 5.5-6 6 6 6 11.5-12 11.5 11-11.5 11 10.5 10-10.5 10 9.5-10 9.5 9-9.5 9 8.5-9 8.5-9 8.5 11.5 11.5 11 11 10.5 10 10 9.5 9.5 9 9 9 8.5 8.5 1988—Aug. 9 11 6-6.5 6.5 6.5 6.5 1989—Feb. 24 27 6.5-7 7 7 7 9 13 Nov. 71 76 Dec. 74 8.5-9 9 8.5-9 8.5 8 9 9 8.5 8.5 8 1985-—May —May 70 74 7.5-8 7.5 7.5 7.5 1986-- M a r . 7-7.5 7 6.5-7 6 7 7 6.5 6 Dec. 1982--- J u l y 70 7.3 7. 3 16 77 30 Oct. 17 n Nov. 7? 76 Dec. 14 15 17 Aug. 13-14 14 13-14 13 12 F.R. Bank of N.Y. 14 14 13 13 12 6.5 6.5 1 4 30 2 13 17 6 7 20 24 6-6.5 6 5.5-6 5.5 5-5.5 5 4.5-5 4.5 3.5-4.5 3.5 6 6 5.5 5.5 5 5 4.5 4.5 3.5 3.5 2 7 3-3.5 3 3 3 3 3 1990—Dec. 19 1991—Feb. Apr. May Sept. Nov. 1984-—Apr. —Apr. Dec. 1992—July In effect July 30, 1993 7 10 Apr. 71 July 11 1. Available on a short-term basis to help depository institutions meet temporary needs for funds that cannot be met through reasonable alternative sources. 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. 2. Available to help relatively small depository institutions meet regular seasonal needs for funds that arise from a clear pattern of intrayearly movements in their deposits and loans and that cannot be met through special industry lenders. The discount rate on seasonal credit takes into account rates on market sources of funds and ordinarily is reestablished on the first business day of each two-week reserve maintenance period; however, it is never less than the discount rate applicable to adjustment credit. 3. May be made available to depository institutions when similar assistance is not reasonably available from other sources, including special industry lenders. Such credit may be provided when exceptional circumstances (including sustained deposit drains, impaired access to money market funds, or sudden deterioration in loan repayment performance) or practices involve only a particular institution, or to meet the needs of institutions experiencing difficulties adjusting to changing market conditions over a longer period (particularly at times of deposit disintermediation). The discount rate applicable to adjustment credit Range (or level)— All F.R. Banks ordinarily is charged on extended-credit loans outstanding less than thirty days; however, at the discretion of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a flexible rate somewhat above rates on market sources of funds is charged. The rate ordinarily is reestablished on the first business day of each two-week reserve maintenance period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis points. 4. For earlier data, see the following publications of the Board of Governors: Banking and Monetary Statistics, 1914-1941, and 1941-1970; and the Annual Statistical Digest, 1970-1979. In 1980 and 1981, the Federal Reserve applied a surcharge t o 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. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5,1980, and to 4 percent on May 5, 1981. The surcharge was reduced t o 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 thirteen-week period. The surcharge was eliminated on N o v . 17, 1981. Policy Instruments A9 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Type of deposit Net transaction accounts 1 $0 million-$46.8 million... 2 More than $46.8 million 4 .. 12/15/92 12/15/92 3 Nonpersonal time deposits 5 12/27/90 4 Eurocurrency liabilities 6 . . 12/27/90 1. Required reserves must be held in the form of deposits with Federal Reserve Banks or vault cash. Nonmember institutions 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 or 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 of each depository institution be subject to a zero percent reserve requirement. The Board is to adjust the amount of reservable liabilities subject to this zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage increase in the total reservable liabilities of all depository institutions, measured on an annual basis as of June 30. No corresponding adjustment is to be made in the event of a decrease. On Dec. 15, 1992, the exemption was raised from $3.6 million to $3.8 million. The exemption applies in the following order: (1) net negotiable order of withdrawal (NOW) accounts (NOW accounts less allowable deductions); and (2) net other transaction accounts. The exemption applies only to accounts that would be subject to a 3 percent reserve requirement. 3. Include all deposits against 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, money market deposit accounts (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 may be checks, are not transaction accounts (such accounts are savings deposits). 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 change in transaction accounts held by all depository institutions, determined as of June 30 each year. Effective Dec. 15, 1992, for institutions reporting quarterly, and Dec. 24, 1992, for institutions reporting weekly, the amount was increased from $42.2 million to $46.8 million. 4. The reserve requirement was reduced from 12 percent to 10 percent on Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that report quarterly. 5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits with an original maturity of less than IVi years was reduced from 3 percent to IV2 percent for the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that began Dec. 27, 1990. The reserve requirement on nonpersonal time deposits with an original maturity of 1 Vi years or more has been zero since Oct. 6, 1983. For institutions that report quarterly, the reserve requirement on nonpersonal time deposits with an original maturity of less than 1 Vi years was reduced from 3 percent to zero on Jan. 17, 1991. 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero in the same manner and on the same dates as were the reserve requirement on nonpersonal time deposits with an original maturity of less than 1V2 years (see note 4). A10 1.17 DomesticNonfinancialStatistics • September 1993 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1992 Type of transaction and maturity 1990 1991 1993 1992 Nov. Dec. Jan. Feb. Mar. Apr. May 0 0 24,542 0 0 0 19,832 0 0 0 23,796 0 121 0 30,124 0 349 0 26,610 0 U . S . TREASURY SECURITIES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Outright transactions (excluding transactions) Treasury bills Gross purchases Gross sales Exchanges Redemptions Others within one year Gross purchases Gross sales Maturity shifts Exchanges Redemptions One to five years Gross purchases Gross sales Maturity shifts Exchanges Five to ten years Gross purchases Gross sales Maturity shifts Exchanges More than ten years Gross purchases Gross sales Maturity shifts Exchanges All maturities Gross purchases Gross sales Redemptions matched Matched transactions 25 Gross sales 26 Gross purchases Repurchase agreements 27 Gross purchases 28 Gross sales 29 Net change in U.S. Treasury securities 24,739 7,291 241,086 4,400 20,158 120 277,314 1,000 14,714 1,628 308,699 1,600 1,064 0 25,468 0 3,669 0 29,562 0 425 0 25,638 -27,424 0 3,043 0 24,454 -28,090 1,000 1,096 0 36,662 -30,543 0 461 0 7,160 -4,615 0 0 0 2,777 -1,570 0 0 0 561 -1,202 0 0 0 2,892 -6,044 0 279 0 4,303 -2,602 0 244 0 1,950 -1,100 0 0 0 4,108 -4,013 0 250 200 -21,770 25,410 6,583 -21,211 24,594 13,118 0 -34,478 25,811 4,172 0 -6,800 3,415 200 0 -2,777 1,570 0 0 -64 882 0 0 -2,617 4,564 1,441 0 -4,303 2,602 2,490 0 -1,630 800 0 0 -3,652 3,245 1,280 0 -2,037 2,894 2,818 0 -1,915 3,532 1,176 0 -187 800 100 0 0 0 0 0 -497 0 0 0 -98 1,000 716 0 0 0 1,147 0 -320 300 0 0 -333 468 -1,681 1,226 375 0 -1,209 600 2,333 0 -269 1,200 947 0 -173 400 0 0 0 0 0 0 0 0 0 0 -177 480 705 0 0 0 1,110 0 0 0 0 0 -123 300 25,414 7,591 4,400 31,439 120 1,000 34,079 1,628 1,600 7,820 0 0 3,969 0 0 0 0 0 0 0 0 3,141 0 0 5,111 0 0 349 0 0 1,369,052 1,363,434 1,570,456 1,571,534 1,482,467 1,480,140 115,020 117,020 144,232 142,578 114,543 116,510 111,491 113,349 146,563 143,049 127,115 128,924 124,462 123,227 219,632 202,551 310,084 311,752 378,374 386,257 42,373 39,117 48,904 44,697 34,768 42,231 28,544 25,889 37,815 33,714 30,197 36,953 33,987 28,640 24,886 29,729 20,642 13,075 6,521 -5,497 4,513 3,728 163 4,461 0 0 100 -2,186 789 0 0 0 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 31 Gross sales 32 Redemptions 0 5 292 0 0 183 632 0 0 0 121 103 0 0 85 0 0 101 0 0 28 0 0 41 41,836 40,461 22,807 23,595 14,565 14,486 2,760 2,506 1,601 1,224 2,237 2,868 1,107 832 1,811 1,519 197 764 2,105 2,105 35 Net change in federal agency obligations 1,192 -1,085 -554 254 256 -734 190 191 -595 -41 36 Total net change in System Open Market Account 26,078 28,644 20,089 13,329 6,777 -6,231 4,703 3,918 -431 4,420 Repurchase agreements 33 Gross purchases 34 Gross sales 0 0 0 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. 0 0 Federal Reserve Banks 1.18 FEDERAL RESERVE BANKS All Condition and Federal Reserve Note Statements1 Millions of dollars Account June 2 June 9 Wednesday End of month 1993 1993 June 16 June 23 June 30 Apr. 30 May 31 June 30 Consolidated condition statement ASSETS 1 Gold certificate account 2 Special drawing rights certificate account 3 Coin Loans 4 To depository institutions 5 Other 6 Acceptances held under repurchase agreements . Federal agency obligations 7 Bought outright 8 Held under repurchase agreements 11,053 8,018 424 11,053 8,018 421 11,058 8,018 425 11,058 8,018 427 11,057 8,018 408 11,054 8,018 487 11,053 8,018 441 11,057 8,018 408 118 0 0 119 0 0 156 0 0 202 0 0 1,534 0 0 84 0 0 129 0 0 1,534 0 0 5,054 140 5,054 75 5,054 0 5,054 993 5,032 949 5,095 0 5,054 0 5,032 949 312,041 312,306 314,658 323,714 328,199 305,381 309,841 328,199 10 Bought outright 2 11 Bills 12 Notes 13 Bonds 14 Held under repurchase agreements 305,878 144,531 123,870 37,477 6,163 311,994 150,647 123,870 37,477 312 314,658 153,311 123,870 37,477 0 313,453 152,106 123,870 37,477 10,261 313,143 151,796 123,870 37,477 15,056 305,381 144,034 123,936 37,411 0 304,494 143,148 123,870 37,477 5,347 313,143 151,796 123,870 37,477 15,056 15 Total loans and securities..... 317,354 317,555 319,868 329,964 335,714 310,560 315,025 335,714 16 Items in process of collection 17 Bank premises 9,196 1,039 5,763 1,040 5,924 1,040 5,145 1,041 5,522 1,041 5,359 1,034 4,473 1,039 5,522 1,041 22,811 7,892 22,846 7,482 22,668 7,551 22,726 8,652 22,334 9,614 23,043 8,550 23,143 7,820 22,334 9,614 377,787 374,178 376,553 387,030 393,709 368,106 371,013 393,709 321,657 322,257 322,187 321,793 323,253 315,270 320,112 323,253 37,547 39,528 51,244 56,693 38,365 37,279 56,693 31,379 6,751 451 307 31,832 5,238 203 274 30,282 8,605 292 348 37,118 13,673 186 268 27,724 28,386 286 297 30,579 7,273 221 291 31,000 5,787 194 300 27,724 28,386 286 297 8,197 2,216 5,080 2,366 5,600 2,336 4,753 2,340 5,059 2,229 4,624 2,220 4,358 2,217 5,059 2,229 370,958 367,250 369,651 380,131 387,233 360,479 363,966 387,233 3,300 3,054 475 3,289 3,054 584 3,291 3,054 557 3,287 3,054 559 3,288 3,038 150 3,260 3,054 1,313 3,300 3,054 693 3,288 3,038 150 377,787 374,178 376,553 387,030 393,709 368,106 371,013 393,709 319,112 323,213 324,459 324,112 314,236 310,903 313,505 314,236 9 Total U.S. Treasury securities. Other assets 18 Denominated in foreign currencies 19 All other 4 20 Total assets LIABILITIES 21 Federal Reserve notes 38,888 22 Total deposits 23 24 25 26 Depository institutions institutions U.S. Treasury—General account Foreign—Official accounts Other 27 Deferred credit items ^ 28 Other liabilities and accrued dividends 29 Total liabilities. CAPITAL ACCOUNTS 30 Capital paid in 31 Surplus 32 Other capital accounts. 33 Total liabilities and capital accounts MEMO 34 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 Federal Reserve Bank 37 Federal Reserve notes, net 38 39 40 41 Collateral held against notes, net: Gold certificate account Special drawing rights certificate account. Other eligible assets U.S. Treasury and agency securities 42 Total collateral. 382,302 60,645 321,657 383,619 61,362 322,257 384,889 62,702 322,187 385,805 64,012 321,793 385,553 62,301 323,253 378,585 63,315 315,270 382,009 61,897 320,112 385,553 62,301 323,253 11,053 8,018 0 302,586 11,053 8,018 0 303,186 11,058 8,018 0 303,111 11,058 8,018 0 302,717 11,057 8,018 0 304,178 11,054 8,018 0 296,198 11,053 8,018 0 301,040 11,057 8,018 0 304,178 321,657 322,257 322,187 321,793 323,253 315,270 320,112 323,253 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical release. F o r ordering 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 ninety days. 5. Includes exchange-translation account reflecting the monthly revaluation at market exchange rates of foreign exchange commitments. A12 DomesticNonfinancialStatistics • September 1993 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding Millions of dollars Type of holding and maturity 1 Total loans 1 2 Within fifteen days 3 Sixteen days to ninety days . . . 4 Ninety-one days to one year . . 5 Total acceptances . Wednesday End of month 1993 1993 June 2 June 9 June 16 June 23 June 30 Apr. 30 May 31 June 30 118 119 156 202 1,534 84 129 1,534 1,447 87 0 54 30 0 82 47 0 1,447 87 0 33 85 0 33 86 0 145 11 0 183 19 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 Within fifteen days 7 Sixteen days to ninety days . . . 8 Ninety-one days to one year . . 0 0 0 0 0 0 0 0 0 0 0 0 9 Total U.S. Treasury securities.. 312,041 312,306 314,658 323,714 328,199 305,381 304,494 328,199 Within fifteen day s Sixteen days to ninety days . . . Ninety-one days to one year . . One year to five years Five years to ten years More than ten years 19,630 74,732 94,361 71,613 21,606 30,099 10,327 77,360 101,300 71,613 21,606 30,099 18,248 71,674 101,418 71,613 21,606 30,099 27,122 71,631 101,643 71,613 21,606 30,099 29,971 74,113 101,750 70,660 21,606 30,099 11,295 74,524 95,254 72,915 21,471 29,922 8,196 79,097 94,431 71,065 21,606 30,099 29,971 74,113 101,750 70,660 21,606 30,099 16 Total federal agency obligations 5,194 5,129 5,054 6,047 5,981 5,095 5,054 5,981 Within fifteen day s 1 Sixteen days to ninety days . . . Ninety-one days to one year . . One year to five years Five years to ten years More than ten years 165 527 1,412 2,237 711 142 100 829 1,110 2,237 711 142 237 592 1,135 2,213 736 142 1,230 592 1,135 2,213 736 142 1,179 612 1,132 2,181 736 142 115 643 1,177 2,307 711 142 301 527 1,136 2,237 711 142 1,179 612 1,132 2,181 736 142 1 10 11 12 13 14 15 17 18 19 20 21 22 1 1. Holdings under repurchase agreements are classified as maturing within fifteen days in accordance with maximum maturity of the agreements. Monetary and Credit Aggregates A13 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1 Billions of dollars, averages of daily figures 1992 Item 1989 Dec. 1990 Dec. 1991 Dec. Nov. Total reserves 3 Nonborrowed reserves Nonborrowed reserves plus extended credit 5 Required reserves Monetary base 6 Dec. Jan. Feb. Mar. Apr. May June 54.92 54.88 54.88 53.82 355.73 55.17 55.07 55.07 53.95 358.37 55.20 55.12 55.12 54.10 360.64 56.88 56.76 56.76 55.88 364.78 57.12 56.94 56.94 56.21 368.09 Seasonally adjusted A D J U S T E D FOR C H A N G E S IN R E S E R V E R E Q U I R E M E N T S 2 1 2 3 4 5 1993 1992 Dec. 40.49 40.23 40.25 39.57 267.73 41.77 41.44 41.46 40.10 293.19 45.53 45.34 45.34 44.56 317.17 54.35 54.23 54.23 53.20 350.80 53.82 53.71 53.71 52.77 347.83 54.35 54.23 54.23 53.20 350.80 54.67 54.50 54.50 53.41 353.22 Not seasonally adjusted 6 7 8 9 10 Total reserves Nonborrowed reserves Nonborrowed reserves plus extended credit 5 Required reserves 8 Monetary base 41.77 41.51 41.53 40.85 271.18 43.07 42.74 42.77 41.40 296.68 46.98 46.78 46.78 46.00 321.07 56.06 55.93 55.93 54.90 354.55 54.08 53.97 53.97 53.04 347.89 56.06 55.93 55.93 54.90 354.55 55.97 55.80 55.80 54.71 354.41 53.81 53.77 53.77 52.71 353.18 54.18 54.09 54.09 52.96 356.00 56.37 56.29 56.29 55.27 361.64 55.88 55.76 r 55.76 r 54.88 364.09 56.% 56.78 56.78 56.05 368.75 62.81 62.54 62.56 61.89 292.55 .92 .27 59.12 58.80 58.82 57.46 313.70 1.66 .33 55.53 55.34 55.34 54.55 333.61 .98 .19 56.54 56.42 56.42 55.39 360.90 1.16 .12 54.67 54.56 54.56 53.62 354.25 1.04 .10 56.54 56.42 56.42 55.39 360.90 1.16 .12 56.00 55.84 55.84 54.74 360.88 1.26 .17 53.88 53.84 53.84 52.78 359.56 1.10 .05 54.30 54.20 54.20 53.08 362.59 1.21 .09 56.54 56.47 56.47 55.45 368.18 1.10 .07 56.10 55.98 55.98 55.10 370.47 57.24 57.06 57.06 56.33 375.21 .91 .18 N O T A D J U S T E D FOR C H A N G E S IN R E S E R V E R E Q U I R E M E N T S 1 9 11 12 13 14 15 16 17 Total reserves 1 1 Nonborrowed reserves Nonborrowed reserves plus extended credit 5 Required reserves Monetary base 1 2 Excess reserves Borrowings from the Federal Reserve 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly 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, DC 20551. 2. Figures reflect adjustments for discontinuities, or " b r e a k s , " associated with regulatory changes in reserve requirements. (See also table 1.10) 3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break-adjusted required reserves (line 4) plus excess reserves (line 16). 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, break-adjusted total reserves (line 1) less total borrowings of depository institutions from the Federal Reserve (line 17). 5. 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 with traditional shortterm adjustment credit, the money market impact of extended credit is similar to that of nonborrowed reserves. 6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency component of the money stock, plus (3) (for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault C a s h " and for all those weekly reporters whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess reserves (line 16). 8. To adjust required reserves for discontinuities that are due to regulatory changes in reserve requirements, a multiplicative procedure is used to estimate 1.00 .12 what required reserves would have been in past periods had current reserve requirements been in effect. Break-adjusted required reserves include required reserves against transactions deposits and nonpersonal time and savings deposits (but not reservable nondeposit liabilities). 9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus (2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault C a s h " and for all those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. 10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated with changes in reserve requirements. 11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve requirements. 12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (l) total reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault C a s h " and for all those weekly reporters whose vault cash exceeds their required reserves) the difference between current vault cash and the amount applied to satisfy current reserve requirements. Since the introduction of changes in reserve requirements (CRR), currency and vault cash figures have been measured over the computation periods ending on Mondays. 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). A14 DomesticNonfinancialStatistics • September 1993 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES 1 Billions of dollars, averages of daily figures 1993 1989 Dec. J item 1990 Dec. 1991 Dec. 1992 Dec. Mar. Apr." May June Seasonally adjusted 1 2 3 4 5 Measures2 Ml M2 M3 L Debt 6 7 8 9 Ml components Currency Travelers checks* Demand deposits Other checkable deposits 827.2 3,345.5 4,116.7 4,966.6 r 10,755.3r 899.3 3,445.8 4,168.1 4,982.2 11,219.3 1,026.6 3,4%.9 r 4,166.4 r 5,043.6 r 11,779.7 l,035.3 r 3,472.9 r 4,131.0 r 5,010.6 r 11,903.2 1,043.2 3,474.6 4,142.1 5,027.3 11,960.9 1,067.2 3,505.7" 4,171.6" 5,069.1 12,021.3 1,073.7 3,512.1 4,167.1 n.a. n.a. 222.7 6.9 279.8 285.3 246.7 7.8 278.2 294.5 267.2 7.8 290.5 333.8 292.3 8.1 340.9 385.2 299.0 8.0 342.0 386.3" 301.4 8.1 347.3 386.3 304.0 8.2 359.2 395.7" 306.8 8.0 360.7 398.2 2,438.7 822.8 2,518.3 771.2 2,546.6 722.3 2,470.2 r 669.6 2,437.5 r 658.2 r 2,431.5 667.4 2,438.6" 665.8" 2,438.4 655.0 Commercial banks 12 Savings deposits, including MMDAs 13 Small time deposits . . 14 Large time deposits 1 0 , 1 541.4 534.9 387.7 582.2 610.3 368.7 666.2 601.5 341.3 756.1 506.9" 290.2 754.0" 502.8 275.9 756.0 499.0 280.8 764.7 494.7 281.6" 769.1 490.5 278.2 Thrift institutions 15 Savings deposits, including MMDAs 16 Small time deposits 17 Large time deposits 1 0 349.6 617.8 161.1 338.6 562.0 120.9 376.3 463.2 83.4 429.9 363.2 67.3 424.8 347.5 r 64.5 425.6 344.8 65.2 429.0 343.1 64.4 430.1 339.3 63.8 Money market mutual funds 18 General purpose and broker-dealer 19 Institution-only 317.4 108.8 350.5 135.9 363.9 182.1 342.3 202.3 333.1 200.9 331.7 200.4 336.5 202.8 336.1 198.1 2,249.5 7,837.0" 2,493.4 8,261.9" 2,764.8 8,454.5 3,069.0 8,710.7 3,128.5 8,774.7 3,156.8 8,804.1 3,185.5 8,835.8 794.6 3,233.3 4,056.1 4,886.1 10,086.5 r Nontrgnsaction 10 In M 2 ' 11 In M3 components Debt components 20 Federal debt 21 Nonfederal debt n.a. n.a. Not seasonally adjusted 22 23 24 25 26 Measures2 Ml M2 M3 L Debt 27 28 29 30 Ml components Currency 3 Travelers checks 4 Demand deposits 5 Other checkable deposits 6 811.5 3,245.1 4,066.4 4,906.0 10,073.4" 843.7 3,357.0 4,126.3 4,988.0 r 10,743.9r 916.4 3,457.9 4,178.1 5,004.2 11,209.4 1,045.8 3,511.l r 4,178.5 r 5,068.1 r 11,771.3 1,030.8 3,479.7" 4,141.0" 5,024.2 r 11,863.5 1,058.4 3,498.1 4,161.1 5,045.2 11,919.1 1,057.9" 3,490.1" 4,158.1" 5,043.9 11,974.3 1,073.1 3,507.7 4,162.3 n.a. n.a. 225.3 6.5 291.5 288.1 249.5 7.4 289.9 296.9 269.9 7.4 302.9 336.3 295.0 7.8 355.3 387.7 297.9 7.8 336.4 388.8 r 301.4 7.8 350.7 398.6 2,433.6 821.4 2,513.2 769.3 2,541.5 720.1 2,465.3 r 667.4 2,448.9" 661.3 r 2,439.7 663.0 2,432.2" 668.0" 2,434.6 654.6 Commercial banks 33 Savings deposits, including MMDAs 34 Small time deposits'' . . 35 Large time deposits • 11 543.0 533.8 386.9 580.1 610.5 367.7 663.3 602.0 340.1 752.3 507,7 r 289.1 757.5 502.1 276.8 760.8 497.8 280.0 765.8 492.4 283.3" 772.4 488.6 279.8 Thrift institutions 36 Savings deposits, including MMDAs 37 Small time deposits® 38 Large time deposits 10 347.4 616.2 162.0 337.3 562.1 120.6 374.7 463.6 83.1 427.8 363.8 67.1 426.8 347.0" 64.7 428.3 343.9 65.0 429.6 341.6" 64.8" 432.0 338.0 64.2 Money market mutual funds 39 General purpose and broker-dealer 40 Institution-only 315.7 109.1 348.4 136.2 361.5 182.4 340.0 202.4 342.2 203.6 337.9 199.5 334.8 203.0 333.0 194.3 Repurchase 41 Overnight 42 Term 77.5 178.4 74.7 158.3 76.3 130.1 73.9 126.3 73.2 136.3" 71.0 138.6 68.0" 139.6" 70.6 139.8 2,491.3 8,252.5 r 2,765.0 8,444.4 3,069.8 8,701.5 Nontrgnsaction 31 In M2 32 In M3 8 components agreements and 307.5 8.2 359.6 397.9 Eurodollars Debt components 43 Federal debt 44 Nonfederal debt Footnotes appear on following page. 304.4 7.9 352.1 393.5 2,247.5 7,826.0" 3,121.4 8,742.1 3,142.9 8,776.2 3,161.1 8,813.2 n.a. n.a. Monetary and Credit Aggregates NOTES TO TABLE 1.21 1. Latest monthly and weekly figures are available from the Board's H.6 (508) weekly statistical release. Historical data are available from the Money and Reserves Projection Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551. 2. Composition of the money stock measures and debt is as follows: Ml: (1) currency outside the U.S. 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 owed 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 (OCDs), 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. Seasonally adjusted Ml is computed by summing currency, travelers checks, demand deposits, and OCDs, each seasonally adjusted separately. M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements (RPs) issued by all depository institutions and overnight Eurodollars issued to U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in both taxable and tax-exempt general-purpose and broker-dealer money market funds. Excludes individual retirement accounts (IRAs) 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-deader), foreign governments and commercial banks, and the U.S. government. Seasonally adjusted M2 is computed by adjusting its non-Mi component as a whole and then adding this result to seasonally adjusted M l . M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of $100,000 or more) issued by all depository institutions, (2) 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 (3) balances in both taxable and tax-exempt, institution-only money market funds. Excludes amounts held by depository institutions, the U.S. government, money market funds, and foreign banks and official institutions. Also excluded is the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds. Seasonally adjusted M3 is computed by adjusting its non-M2 component as a whole and then adding this result to seasonally adjusted M2. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury securities, commercial paper, and bankers acceptances, net of money A15 market fund holdings of these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted separately, and then adding this result to M3. 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. Data are derived from the Federal Reserve Board's flow of funds accounts. Debt data are based on monthly averages. This sum is seasonally adjusted as a whole. 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 owed 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 account balances at all depository institutions, credit union share draft account balances, and demand deposits at thrift institutions. 7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund balances (general purpose and broker-dealer), (3) savings deposits (including MMDAs). and (4) small time deposits. 8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. residents, and (4) money market fund balances (institution-only), less (5) a consolidation adjustment that represents the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds. 9. Small time deposits—including retail RPs—are those issued in amounts of less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are subtracted from small time deposits. 10. Large time deposits are those issued in amounts of $100,000 or more, excluding those booked at international banking facilities. 11. Large time deposits at commercial banks less those held by money market funds, depository institutions, U.S. government, and foreign banks and official institutions. A16 1.22 DomesticNonfinancialStatistics • September 1993 DEPOSIT INTEREST RATES A N D A M O U N T S OUTSTANDING Commercial and BIF-insured saving banks 1 1993R 1992 It m Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Interest rates (annual effective yields) INSURED COMMERCIAL BANKS 1 2 Negotiable order of withdrawal accounts . . . Savings deposits 2 4.89 5.84 3.76 4.30 2.39 2.94 2.36 2.90 2.33 2.88 2.32 2.85 2.27 2.80 2.21 2.73 2.16 2.68 2.12 2.65 2.09 2.61 3 4 5 6 7 Interest-bearing time deposits with balances of less than $100,000, by maturity 1 to 91 days 92 to 182 days 183 days to 1 year More than 1 year to 2Vi years More than 2 Vz years 6.94 7.19 7.33 7.42 7.53 4.18 4.41 4.59 4.95 5.52 2.89 3.11 3.30 3.78 4.60 2.91 3.14 3.34 3.83 4.70 2.90 3.16 3.37 3.88 4.77 2.86 3.13 3.35 3.88 4.72 2.81 3.08 3.29 3.83 4.59 2.75 3.03 3.22 3.74 4.52 2.72 2.99 3.19 3.67 4.47 2.70 2.98 3.18 3.64 4.47 2.68 2.98 3.18 3.64 4.44 8 Y Negotiable order of withdrawal accounts . . . Savings deposits 5.38 4.44 2.57 2.52 2.45 2.40 2.37 2.21 2.14 4.97 3.29 3.22 3.20 3.17 3.14 2.32 3.05 2.25 6.01 2.97 2.93 2.88 7.64 7.69 7.85 7.91 7.99 4.68 4.92 4.99 3.08 3.41 3.10 3.42 3.01 2.95 3.28 5.23 3.90 4.84 3.93 4.88 2.91 3.23 3.48 3.88 4.84 2.87 3.19 3.59 3.13 3.44 3.61 4.02 5.00 3.06 3.38 3.56 2.85 3.17 3.43 3.80 4.74 B I F - I N S U R E D SAVINGS BANKS3 Interest-bearing time deposits with balances of less than $100,000, by maturity 10 7 to 91 days n 92 to 182 days 12 183 days to 1 year 13 More than 1 year to iVi years 14 More than 2 Vl years 5.98 3.58 3.35 3.57 3.94 5.02 3.89 4.97 3.52 3.83 4.89 3.45 3.79 4.78 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts . . . 16 Savings deposits 2 17 Personal 18 Nonpersonal 209,855 570,270 n.a. n.a. 244,637 652,058 508,191 143,867 267,709 275,465 740,841 575,399 165,442 286,541 738,253 578,757 159,496 277,271 733,836 579,701 154,135 279,944 742,952 585,189 157,764 288,410 748,311 591,784 156,527 281,208 745,627 284,404 570,532 165,525 587,301 158,327 591,694 162,348 Interest-bearing time deposits with balances of less than $100,000, by maturity 7 to 91 days 92 to 182 days 183 days to 1 year More than 1 year to 2Vi years More than 2 Vl years 50,189 168,044 221,007 150,188 139,420 47,094 158,605 209,672 171,721 158,078 39,472 128,683 171,263 155,668 168,556 38,985 38,474 127,831 163,098 152,977 169,708 38,256 127,636 166,995 153,784 168,586 128,083 160,630 151,905 169,371 36,738 128,209 159,631 151,798 172,362 35,519 125,778 158,337 147,958 177,735 34,743 122,306 157,143 147,030 179,006 131,006 147,266 147,664 147,319 147,350 147,069 146,841 146,673 25 Negotiable order of withdrawal a c c o u n t s . . . . 26 Savings deposits Personal 2V Nonpersonal 28 8,404 64,456 n.a. n.a. 9,624 71,215 68,638 2,577 10,126 81,022 77,798 3,224 10,642 82,919 79,667 3,252 10,871 81,786 78,695 3,091 9,858 79,271 76,337 2,934 9,821 79,649 76,634 3,016 Interest-bearing time deposits with balances of less than $100,000, by maturity 7 to 91 days 92 to 182 days 183 days to 1 year More than 1 year to 2Vl years More than 2Vl years 5,724 25,864 37,929 26,103 20,243 4,146 21,686 29,715 25,379 18,665 3,695 17,298 23,085 19,330 19,128 3,895 17,632 22,888 19,258 19,543 3,867 17,345 21,780 18,442 18,845 3,541 16,088 20,627 17,524 18,461 23,535 23,007 22,069 22,265 21,713 21,320 19 20 21 22 23 24 IRA/Keogh Plan deposits 736,057 754,043 33,423 288,425 755,131 592,890 162,241 156,938 144,944 180,077 31,778 115,267 155,398 144,752 178,738 145,492 144,736 144,636 10,219 77,340 74,382 2,957 9,894 76,910 74,020 2,889 10,037 77,489 74,505 2,984 10,402 77,544 74,623 2,921 3,468 15,857 20,301 17,387 18,759 3,194 14,445 19,048 16,835 18,550 3,161 14,308 18,753 16,426 18,632 3,113 14,157 18,549 16,275 18,780 3,022 13,818 18,434 16,088 19,025 21,260 20,096 19,975 19,902 19,845 119,365 B I F - I N S U R E D SAVINGS BANKS3 29 30 31 32 33 34 IRA/Keogh Plan accounts 1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6 (508) Special Supplementary Table monthly statistical release. For ordering address, see inside front cover. Estimates are based on data collected by the Federal Reserve System from a stratified random sample of about 460 commercial banks and 80 savings banks on the last Wednesday of each period. Data are not seasonally adjusted and include IRA/Keogh deposits and foriegn currency denominated deposits. Data exclude retail repurchase agreements and deposits held in U.S. branches and agencies of foreign banks. 2. Includes personal and nonpersonal money market deposits. 3. BIF-insured savings banks include both mutual and federal savings banks. Monetary and Credit Aggregates 1.23 A17 B A N K DEBITS A N D DEPOSIT TURNOVER1 Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates 1992 Bank group, or type of customer 1990 2 1991 2 1993 19922 Nov. Dec. Jan. r Feb/ Mar. Apr. Seasonally adjusted Demand deposits 1 All insured banks 2 Major New York City banks 3 Other banks 4 Other checkable deposits 4 ^ 5 Savings deposits including MMDAs 277,157.5 131,699.1 145,458.4 277,758.0 137,352.3 140,405.7 315,806.1 165,572.7 150,233.5 322,187.1 173,393.4 148,793.7 331,038.8 176,089.1 154,949.8 300,602.9 159,191.7 141,411.3 331,126.3 176,683.2 154,443.1 331,026.3 r 166,866.6 164,159.7 r 324,877.0 163,542.4 161,334.6 3,349.0 3,483.3 3,645.5 3,266.1 3,788.1 3,331.3 3,610.0 3,497.2 3,683.9 3,407.3 3,292.5 3,032.3 3,601.4 3,363.3 3,572.6 r 3,562.8 r 3,579.3 3,510.2 797.8 3,819.8 464.9 803.5 4,270.8 447.9 832.4 4,797.9 435.9 796.1 4,624.0 405.2 830.5 4,693.3 429.1 746.5 4,154.7 388.1 817.3 4,525.8 421.9 811.3 r 4,129.1 446.6 792.0 4,120.9 435.5 16.5 6.2 16.2 5.3 14.4 4.7 12.9 4.7 13.1 4.6 11.6 4.1 12.6 4.5 12.5 4.8 12.7 4.7 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 7 Major New York City banks 8 Other banks 9 Other checkable deposits 4 ^ 10 Savings deposits including MMDAs Not seasonally adjusted DEBITS TO Demand deposits3 All insured banks 12 Major New York City banks 13 Other banks 11 14 Other checkable deposits 4 15 Savings deposits including MMDAs 277,290.5 131,784.7 145,505.8 277,715.4 137,307.2 140,408.3 315,808.2 165,595.0 150,213.3 308,015.6 167,578.4 140,437.2 340,982.1 179,987.6 160,994.5 304,760.9 159,198.8 145,562.0 303,619.8 161,174.1 142,445.7 339,172.4 r 170,855.0 168,317.4 r 324,768.4 161,923.2 162,845.2 3,346.7 3,483.0 3,645.6 3,267.7 3,788.1 3,329.0 3,351.3 3,240.4 3,849.3 3,588.0 3,596.2 3,248.8 3,296.7 3,080.3 3,630.2 r 3,529.2 r 3,799.5 3,727.3 798.2 3,825.9 465.0 803.4 4,274.3 447.9 832.5 4,803,5 436.0 754.3 4,494.4 378.5 815.2 4,418.1 426.5 738.2 3,936.3 390.9 771.7 4,213.4 401.1 854.5 4,385.4 470.2 786.7 4,108.4 436.1 16.4 6.2 16.2 5.3 14.4 4.7 12.1 4.4 13.5 4.8 12.4 4.4 11.6 4.1 12.6 4.7 13.0 4.9 DEPOSIT TURNOVER Demand deposits3 16 All insured banks 17 Major New York City banks 18 Other banks 19 Other checkable deposits 4 20 Savings deposits including MMDAs 1. Historical tables containing revised data for earlier periods can be obtained from the Banking and Money Market Statistics Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551. Data in this table also appear on the Board's G.6 (406) monthly statistical release. For ordering 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 (NOWs) and accounts authorized for automatic transfer to demand deposits (ATSs). 5. Money market deposit accounts. A18 1.24 DomesticNonfinancialStatistics • September 1993 LOANS A N D SECURITIES All Commercial Banks' Billions of dollars, averages of Wednesday figures 1992 1993 Item July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. r Apr. r May r June Seasonally adjusted 1 Total loans and securities1 2 U.S. government securities 3 Other securities 4 Total loans and leases' Commercial and industrial . . . . . Bankers acceptances held . . . 6 V Other commercial and industrial 8 U.S. addressees 3 Non-U.S. addressees 3 9 Real estate 10 11 Individual Security 12 13 Nonbank financial institutions 14 Agricultural 15 State and political subdivisions 16 Foreign banks 17 Foreign official institutions Lease-financing receivables . . . . 18 19 All other loans 2,886.9 2,902.2 2,917.4 2,926.0 2,932.4 2,937.6 2,933.4 2,937.7 2,950.7 r 2,960.8 2,982.9 3,006.8 619.2 177.9 2,089.8 602.5 6.5 632.6 178.2 2,091.4 601.4 6.5 640.6 178.2 2,098.6 601.2 6.3 647.3 178.8 2,099.8 600.8 7.5 651.4 177.3 2,103.8 600.5 7.9 657.1 176.0 2,104.6 597.6 7.8 656.9 174.0 2,102.5 r 598.0 r 7.5 667.3 175.3r 2,095.l r 596.1 8.7 681.5 r 177.0 2,092.2 r 592.4 r 8.9 691.5 177.7 2,091.5 589.6 9.0 694.3 178.4 2,110.3 592.5 9.6 704.5 177.9 2,124.3 594.2 9.5 596.0 585.3 10.7 881.5 358.6 60.5 594.9 584.3 10.6 883.1 357.4 61.6 594.9 583.6 11.3 886.8 357.0 64.0 593.3 582.6 10.7 890.7 355.8 64.7 592.6 582.3 10.3 892.5 355.4 64.2 589.9 580.2 9.7 892.4 355.5 64.8 590.5 r 580.9 9.7 889.9 358.2 63.0 587.3 r 577.5 r 9.8 887.8 360.4 61.7 583.4 r 573.3 r 10.1 888. l r 360.8 r 62.5 580.5 570.8 9.7 887.6 362.6 60.8 582.9 573.2 9.6 893.8 365.7 66.9 584.6 575.6 9.0 900.0 366.9 69.4 41.5 34.9 42.0 35.3 44.0 35.2 43.9 35.1 44.7 35.2 43.6 35.0 45,0 r 34.5 44.8 r 34.3 44.5 34.0 45.3 33.7 45.9 33.8 45.7 33.7 26.2 7.7 2.2 30.8 43.2 25.9 7.2 2.3 30.8 44.3 25.8 7.9 2.5 31.0 43.2 25.4 7.6 2.4 30.8 42.6 25.1 7.5 2.8 30.9 45.0 24.8 7.7 2.8 30.9 49.5 24.2 7.7 2.8 30.3 48.8 23.7 8.5 3.0 30.4 44.5 23.4 8.1 2.9 30.3 45.3 23.1 8.0 2.9 30.3 47.7 23.3 8.1 2.8 30.7 46.8 23.3 8.2 2.9 30.9 49.1 Not seasonally adjusted 20 Total loans and securities' 2,876.1 2,894.5 2,914.9 21 U.S. government securities 22 Other securities 23 Total loans and leases' Commercial and industrial 24 25 Bankers acceptances held 2 . . . Other commercial and 26 industrial U.S. addressees 3 27 Non-U.S. addressees 3 28 29 Real estate Individual 30 31 Security Nonbank financial 32 institutions Agricultural 33 34 State and political subdivisions Foreign banks 35 36 Foreign official institutions Lease-financing receivables . . . . 37 All other loans 38 615.3 176.8 2,084.0 601.5 6.3 631.3 178.1 2,085.0 597.6 6.3 638.7 177.9 2,098.3 597.6 6.2 645.1 179.2 2,100.9 598.4 7.4 654.1 178.3 2,106.6 600.8 8.2 655.8 176.2 2,115.4 600.6 8.0 595.2 584.2 11.0 881.6 356.4 58.0 591.4 580.5 10.8 883.7 356.9 59.4 591.4 580.3 11.1 887.6 358.6 62.5 591.0 580.7 10.3 891.5 356.2 64.2 592.6 582.8 9.8 893.9 356.3 63.5 41.3 35.8 41.8 36.5 43.5 36.7 43.5 36.1 26.1 7.8 2.2 30.6 42.6 25.9 7.0 2.3 30.6 43.2 25.9 8.1 2.5 30.8 44.6 25.5 7.8 2.4 30.8 44.4 2,925.2 1. Adjusted to exclude loans to commercial banks in the United States. 2. Includes nonfinancial commercial paper held. 2,954.5 r 2,962.3 2,977.9 3,006.5 657.3 174.6 2,103.6 596.5 7.7 r 670.8 175.5r 2,094.l r 595.2 r 9.1 687.3 r 176.7 r 2,090.6 r 595.6 r 9.0 693.3 177.2 2,091.8 592.5 8.9 693.2 177.9 2,106.8 594.2 9.5 702.3 177.4 2,126.8 596.0 9.4 592.5 583.0 9.5 893.7 360.0 65.5 588.8 r 579.2 9.6 889.6 362.3 64.5 586.l r 576.3 9.8 886.0 360.4 64.6 r 586.5 r 576.5 r 10.0 885.5 r 358.4 r 64.6 583.6 573.9 9.8 886.5 359.9 64.1 584.7 575.1 9.6 893.9 363.9 63.9 586.6 576.8 9.8 900.3 365.1 69.0 45.0 35.2 45.6 34.8 45.2 r 33.6 44.6 33.0 44.2 32.6 r 44.7 32.8 45.3 33.5 46.3 34.2 25.2 7.8 2.8 30.8 45.4 24.8 8.2 2.8 30.9 48.6 24.0 7.7 2.8 30.7 46.6 23.6 8.4 3.0 30.6 44.6 r 23.5 7.8 2.9 30.5 45.0 23.1 7.7 2.9 30.4 47.2 23.3 7.9 2.8 30.7 47.4 23.3 8.0 2.9 30.9 50.9 2,939.0 2,947.4 2,935.5 2,940.5 3. United States includes the fifty states and the District of Columbia. Commercial Banking Institutions A19 1.25 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS 1 Billions of dollars, monthly averages 1992r 1993 Source of funds July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Seasonally adjusted 1 Total nondeposit funds 2 2 Net balances owed to related foreign offices 3 .. 3 Borrowings from other than commercial banks in United States 4 4 Domestically chartered banks 5 Foreign-related banks 297.4 62.2 302.3 61.5 309.3 63.9 303.4 62.6 307.5 67.3 311.4 71.1 311.l r 74.1 309.7 r 73.3 319.6 r 79.1 328.3 88.2 r 324. l r 83.1 332.1 84.4 235.2 147.4 87.8 240.8 151.7 89.2 245.4 153.4 91.9 240.8 154.6 86.2 240.2 153.9 86.4 240.4 154.8 85.6 236.9" 155.4r 81.6 236.3 r 155.5 r 80.9 240.6 159.8 80.8 240.l r 164.4 r 75.6 241.0 r 162.5 78.5 247.8 168.7 79.1 Not seasonally adjusted 6 Total nondeposit funds 2 7 Net balances owed to related foreign offices 3 .. 8 Domestically chartered banks 9 Foreign-related banks 10 Borrowings from other than commercial banks in United States 11 Domestically chartered banks 12 Federal funds and security RP borrowings 5 13 Other 14 Foreign-related banks 6 291.9 58.9 -6.6 65.5 297.3 57.7 -9.2 66.9 303.8 61.6 -11.2 72.7 305.7 63.8 -13.4 77.2 312.8 68.9 -12.4 81.4 311.4 75.2 -15.0 90.2 76.7 -15.8 92.5 3I3.9 r 75.2 r -10.6 85.7 324.4 r 79.8 -7.0 86.8 324.5 85.3 r -9.5 94.8 r 328.8 r 85.3 -9.8 95.1 331.2 82.4 -15.4 97.8 232.9 144.3 239.6 150.5 242.3 152.3 241.9 155.8 243.9 158.3 236.2 153.8 233.2 r 152.3r 238.8 r 157.2 r 244.6 r 162.6r 239.2 r 162.4r 243.5 r 164. R 248.8 168.5 140.1 4.2 88.7 146.7 3.9 89.1 148.4 3.8 90.0 152.2 3.6 86.1 154.2 4.1 85.5 149.9 4.0 82.3 148.7r 3.6 80.9 154.0r 3.2 81.6 159.3 3.3 82.0 159.01 3.5 76.8 160.3 3.8 r 79.4 164.7 3.8 80.3 387.7 387.4 385.8 387.1 383.2 383.6 375.7 374.9 371.3 371.1 366.5 365.5 359.9 358.0 358.4 358.0 355.7 356.5 355.0 354.2 356.2 357.9 352.4 353.9 23.1 19.6 28.0 22.4 24.1 28.6 21.5 21.9 20.7 16.5 20.4 19.5 25.6 33.1 23.6 29.5 18.8 17.4 24.2 20.3 19.1 20.3 26.2 26.6 MEMO Gross large time deposits 15 Seasonally adjusted 16 Not seasonally adjusted U.S. Treasury demand balances commercial banks 17 Seasonally adjusted 18 Not seasonally adjusted at 1. Commercial banks are nationally and state-chartered banks in the fifty states and the District of Columbia, agencies and branches of foreign banks, New York State investment companies majority owned by foreign banks, and Edge Act and agreement corporations owned by domestically chartered and foreign banks. Data in this table also appear in the Board's G.10 (411) monthly release. For ordering address, see inside front cover. 2. Includes federal funds, repurchase agreements (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 International Banking Facilities (IBFs). 4. 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. Figures are based on averages of daily data reported weekly by approximately 120 large banks and on quarterly or annual data reported by other banks. 6. Figures are partly averages of daily data 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. A20 DomesticNonfinancialStatistics • September 1993 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS 1 Wednesday figures Millions of dollars 1993 Account May 5 r May 12r May 191 May 26 r June 2 June 9 June 16 June 23 June 30 3,123,682 833,066 669,498 163,568 39,679 25,640 2,676 3,122,233 830,586 666,738 163,848 40,591 25,330 2,649 Other cash assets n 24 Other assets 2,250,937 148,653 2,102,284 594,882 890,884 74,339 816,546 362,371 254,147 211,777 29,306 29,357 32,065 81,914 39,134 276,743 3,126,037 833,365 669,437 163,928 36,011 22,142 2,488 11,382 2,256,661 150,431 2,106,230 592,577 894,640 74,416 820,224 363,258 255,755 215,102 35,087 31,573 30,487 78,835 39,121 270,765 2,251,057 147,552 2,103,505 593,431 892,670 74,382 818,289 363,719 253,685 199,981 24,594 31,804 29,895 74,090 39,598 273,830 3,119,586 827,496 665,010 162,487 36,429 21,413 2,844 12,173 2,255,660 151,751 2,103,909 593,465 893,720 74,500 819,221 364,875 251,849 216,950 38,277 32,609 30,680 74,857 40,527 268,455 3,156,959 838,119 676,005 162,114 43,947 28,805 2,405 12,737 2,274,892 154,282 2,120,611 598,110 897,566 74,505 823,061 365,216 259,718 240,658 27,645 32,810 35,943 101,670 42,590 288,925 3,165,855 838,891 677,499 161,391 43,587 27,421 2,495 13,671 2,283,377 163,804 2,119,573 593,562 899,737 74,449 825,287 364,449 261,825 213,838 27,083 32,261 32,069 79,719 42,708 278,541 3,177,550 835,650 675,293 160,356 43,448 27,598 2,296 13,554 2,298,453 161,710 2,136,743 597,780 900,730 74,867 825,864 364,106 274,127 217,639 26,530 32,207 31,706 83,190 44,006 282,400 3,147,184 834,503 673,547 160,956 45,503 29,153 2,619 13,730 2,267,178 149,257 2,117,921 594,718 897,705 74,757 822,948 365,019 260,479 211,167 32,905 32,436 29,762 73,303 42,761 272,884 3,162,824 840,103 676,925 163,178 33,814 19,088 2,732 11,993 2,288,908 155,329 2,133,578 597,218 902,840 74,822 828,018 366,472 267,049 219,261 23,826 33,152 30,355 86,505 45,423 279,821 25 Total assets 3,612,202 3,611,904 3,596,044 3,604,990 3,686,541 3,658,234 3,677,589 3,631,235 3,661,906 2,510,585 774,213 3,564 40,210 730,439 760,815 621,495 354,061 488,740 18,546 470,194 330,976 2,498,297 760,951 3,011 38,621 719,319 763,898 620,726 352,723 490,736 14,143 476,593 339,094 2,478,437 747,850 3,133 38,019 706,698 758,811 619,332 352,443 500,672 16,620 484,052 333,636 2,481,930 753,296 3,331 38,961 711,005 758,309 618,035 352,290 497,098 14,738 482,360 342,771 2,549,635 807,875 4,225 45,779 757,871 769,140 618,209 354,410 506,257 18,785 487,472 344,949 2,520,120 778,456 3,501 39,281 735,674 772,890 616,658 352,115 512,421 4,890 507,531 338,165 2,530,874 791,150 7,487 39,962 743,701 770,404 616,871 352,449 529,506 30,676 498,830 331,627 2,472,343 746,%5 3,161 37,674 706,130 760,900 615,026 349,452 527,897 35,240 492,657 344,836 2,507,409 795,187 4,281 38,447 752,459 759,265 615,412 337,545 508,883 31,241 477,642 359,176 3,330,302 3,328,127 3,312,745 3,321,800 3,400,841 3,370,706 3,392,007 3,345,076 3,375,468 281,900 283,777 283,190 285,700 287,528 285,582 286,159 286,438 A L L COMMERCIAL BANKING INSTITUTIONS2 Assets 1 Loans and securities Investment securities 7 U.S. government securities 4 Other 5 Trading account assets 6 U.S. government securities 7 Other securities 8 Other trading account assets 9 10 11 Loans excluding interbank 1? N Real estate Revolving home equity 14 IS Other Individual 16 17 All other 18 Total cash assets 19 Balances with Federal Reserve Banks 70 Cash in vault 71 Demand balances at U.S. depository institutions . . 77 11,363 Liabilities 76 77 78 79 30 31 V Demand, U.S. government Demand, depository institutions Other demand and all checkable deposits Savings deposits (excluding checkable) Small time deposits Time deposits over $100,000 34 35 Treasury tax and loan notes 36 Other 37 Other liabilities 38 Total liabilities 39 Residual (assets less liabilities) 3 Footnotes appear on following page. 12,612 283,299 Commercial Banking Institutions 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS 1 A21 Wednesday figures—Continued Millions of dollars Account May 5 r May 12r May 191 May 26 r June 2 June 9 June 16 June 23 June 30 Assets 40 Loans and securities 41 Investment securities 42 U.S. government securities 43 Other 44 Trading account assets 45 U.S. government securities 46 Other securities 47 Other trading account assets 48 Total loans 49 Interbank loans 50 Loans excluding interbank 51 Commercial and industrial 52 Real estate 53 Revolving home equity 54 Other 55 Individual 56 All other 57 Total cash assets 58 Balances with Federal Reserve Banks 59 Cash in vault 60 Demand balances at U.S. depository institutions . 61 Cash items 62 Other cash assets 63 Other assets 2,781,597 761,059 620,722 140,337 39,679 25,640 2,676 11,363 1,980,860 130,299 1,850,561 441,791 842,326 74,339 767,988 362,371 204,073 185,189 28,808 29,328 30,599 79,796 16,658 177,655 2,779,891 762,531 622,008 140,524 36,011 22,142 2,488 11,382 1,981,349 128,086 1,853,263 439,602 846,215 74,416 771,799 363,258 204,189 188,209 34,279 31,542 28,711 76,633 17,044 177,060 2,774,645 759,952 619,484 140,467 40,591 25,330 2,649 12,612 1,974,102 126,334 1,847,768 438,991 844,241 74,382 769,859 363,719 2.770.751 756,870 617,159 139,710 36,429 21,413 2,844 12,173 1,977,452 129,700 1.847.752 439,371 845,217 74,500 770,718 364,875 198,289 190,206 37,487 32,579 29,231 72,811 170,075 2,804,229 766,639 626,386 140,253 43,947 28,805 2,405 12,737 1,993,643 133,279 1,860,363 441,019 849,283 74,505 774,778 365,216 204,846 213,525 27,234 32,778 34,509 99,367 19,637 185,079 2,811,430 768,815 628,146 140,669 43,587 27,421 2,495 13,671 1,999,028 137,455 1,861,573 438,261 851,500 74,449 777,051 364,449 207,364 185,042 26,404 32,229 30,665 77,012 18,731 176,409 2,821,731 765,833 625,030 140,804 43,448 27,598 2,296 13,554 2,012,450 143,350 1,869,100 439,886 852,007 74,867 777,140 364,106 213,101 189,556 26,046 32,176 30,471 81,286 19,578 181,623 2,787,725 765,722 624,891 140,831 45,503 29,153 2,619 13,730 1,976,501 123,137 1,853,364 438,002 849,690 74,757 774,933 365,019 200,652 182,077 32,034 32,401 28,549 71,153 17,941 180,214 2,797,738 767,445 626,741 140,704 33,814 19,088 2,732 11,993 1,996,480 128,582 1,867,898 439,875 855,085 74,822 780,263 366,472 206,466 188,878 23,018 33,119 29,012 83,793 19,936 181,760 64 Total assets 3,144,441 3,145,159 3,122,396 3,131,032 3,202,833 3,172,881 3,192,910 3,150,017 3,168,376 2,357,417 763,345 3,564 37,422 722,359 756,572 619,332 370,377 18,546 351,831 137,965 2,345,383 749,048 3,010 35,829 710,209 759,570 618,617 218,149 378,521 14,143 364,378 140,6% 2,325,554 737,255 3,133 35,225 698,897 754,516 617,215 216,567 380,727 16,620 364,107 136,034 2,328,358 742,161 3,331 36,161 702,669 754,007 615,933 216,258 382,237 14,738 367,499 140,464 2,393,450 796,570 4,225 42,890 749,455 764,751 616,090 216,041 385,843 18,785 367,058 141,057 2,366,149 766,543 3,501 36,292 726,751 768,571 614,565 216,471 383,537 4,890 378,647 138,885 2,375,030 780,226 7,486 37,022 735,718 765,932 614,778 214,094 400,881 30,676 370,205 134,635 2,316,782 736,364 3,160 34,825 698,379 756,587 612,929 210,901 414,353 35,240 379,113 135,941 2,353,649 782,531 4,280 35,323 742,928 754,999 613,332 202,787 385,9% 31,241 354,755 145,511 2,865,759 2,864,599 2,842,315 2,851,059 2,920,350 2,888,571 2,910,546 2,867,075 2,885,156 278,683 280,559 280,082 279,973 282,483 284,310 282,364 282,941 283,220 DOMESTICALLY CHARTERED COMMERCIAL BANKS4 Liabilities 65 Total deposits 66 Transaction accounts 67 Demand, U.S. government 68 Demand, depository institutions 69 Other demand and all checkable deposits 70 Savings deposits (excluding checkable) 71 Small time deposits 72 Time deposits over $100,000 73 Borrowings 74 Treasury tax and loan notes 75 Other 76 Other liabilities 77 Total liabilities 78 Residual (assets less liabilities) 3 218,168 1. Excludes assets and liabilities of international banking facilities. 2. Includes insured domestically chartered commercial banks, agencies and branches of foreign banks, Edge Act and agreement corporations, and New York State investment corporations majority owned by foreign banks. Data are estimates for the last Wednesday of the month based on a sample of weekly reporting foreign-related and domestic institutions and quarter-end condition reports. 200,818 174,171 24,195 31,774 28,581 71,901 17,721 173,580 18,100 3. This balancing item is not intended as a measure of equity capital for use in capital-adequacy analysis. 4. Includes all member banks and insured nonmember banks. Loans and securities data are estimates for the last Wednesday of the month based on a sample of weekly reporting banks and quarter-end condition reports. A22 DomesticNonfinancialStatistics • September 1993 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS Millions of dollars, Wednesday figures 1993 Account May 5 May 12 May 19 106,657 291,533 r 23,455 268,077 r 84,170 r 110,686 287,911" 19,998 267,913" 83,720" 97,947 289,761" 23,059 266,703" 81,567" 113,587 284,656" 19,204 265,451" 81,776" 123,642 298,769 26,418 272,351 82,991 107,686 297,489 25,254 272,235 83,204 110,042 294,662 24,990 269,672 82,957 106,219 295,586 26,847 268,739 82,918 106,087 287,115 17,023 270,092 84,036 42,333 r 73,628 r 67,947 r 55,819" 2,492 53,328 r 19,777r 3,410" 16,367 33,551 11,240 43,283" 73,818" 67,092" 55,847" 2,303 53,544" 19,808" 3,455" 16,354" 33,735" 11,258 45,217" 73,738" 66,182" 55,889" 2,466 53,423" 19,814 3,447" 16,367" 33,609" 12,490 44,830" 74,386" 64,460" 55,644" 2,666 52,978" 19,828 3,467" 16,361" 33,150" 12,052 46,785 74,058 68,517 55,637 2,230 53,407 19,699 3,366 16,332 33,709 12,628 47,567 73,959 67,505 55,893 2,319 53,575 19,754 3,428 16,326 33,820 13,561 48,490 71,471 66,755 55,829 2,118 53,711 19,780 3,455 16,325 33,932 13,434 47,526 71,551 66,744 56,077 2,443 53,635 19,800 3,471 16,329 33,835 13,608 45,486 70,477 70,093 56,305 2,556 53,749 19,387 3,206 16,181 34,362 11,872 86,252 53,820 26,538 5,893 978,479" 277,523" 3,090 274,433" 272,836" 1,597 395,631" 43,855" 351,776" 185,356" 35,189 12,072 2,385 20,731 16,150" 5,648 13,777 1,522 23,142" 24,541 2,084 36,447 939,948" 164,251" 85,455" 53,475 26,309" 5,670 980,072" 275,709" 3,045 272,665" 271,098" 1,567 398,030" 43,847" 354,183" 185,627 34,854 11,954 2,431 20,470 16,882" 5,639 13,671 1,380 23,735" 24,545 2,086 36,384 941,602" 164,605" 81,413 52,407 24,746 4,259 978,955" 275,228" 3,079 272,149" 270,644" 1,505 395,859" 43,851" 352,008" 186,093 35,793 13,153 2,629 20,011 16,752" 5,688 14,082 1,344 23,543" 24,574 2,094 36,401 940,459" 162,104" 81,305 55,686 20,464 5,156 982,237" 275,761" 3,134 272,626" 271,039" 1,587 396,189" 43,904" 352,285" 186,766 36,703 13,863 2,479 20,361 16,602" 5,6% 14,053 1,339 24,439" 24,689 2,084 36,313 943,840" 159,492" 86,571 56,298 24,309 5,965 987,201 277,115 3,150 273,964 272,316 1,648 398,365 43,763 354,602 186,414 39,574 14,641 3,358 21,574 14,813 5,755 14,001 1,550 24,878 24,737 2,039 36,579 948,584 169,972 92,486 58,088 27,353 7,045 983,486 274,713 3,238 271,475 269,741 1,734 400,463 43,696 356,767 185,367 38,385 14,428 2,224 21,733 15,441 5,737 13,859 1,430 23,319 24,772 2,057 36,657 944,772 165,032 103,490 64,049 31,870 7,571 986,607 276,343 3,198 273,144 271,312 1,833 400,332 44,018 356,314 186,497 37,161 14,594 2,220 20,347 16,220 5,743 13,853 1,350 24,334 24,773 2,057 36,634 947,915 171,617 84,676 53,995 23,612 7,068 981,078 275,029 2,801 272,228 270,416 1,812 398,515 43,942 354,573 187,445 35,384 13,412 2,240 19,733 16,134 5,750 13,700 1,339 23,020 24,760 2,048 36,413 942,616 169,503 83,827 57,389 20,459 5,978 995,567 276,631 2,993 273,638 271,805 1,833 401,2% 43,921 357,376 188,255 37,715 14,225 2,606 20,884 19,250 5,799 13,695 1,451 26,580 24,897 2,111 35,618 957,838 167,682 1,655,70^ 1,657,363' 1,640,064' 1,650,576' 1,695,803 1,676,920 1,696,989 1,668,287 1,670,726 May 26 June 2 June 9 June 16 June 23 June 30 ASSETS 1 Cash and balances due from depository institutions 2 U.S. Treasury and government securities 3 Trading account 4 Investment account 5 Mortgage-backed securities' All others, by maturity 6 One year or less 7 One year through five years 8 More than five years 9 Other securities Trading account 10 11 Investment account 12 State and political subdivisions, by maturity 13 One year or less 14 More than one year 15 Other bonds, corporate stocks, and securities 16 Other trading account assets 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Federal funds sold 2 To commercial banks in the United States To nonbank brokers and dealers To others 3 Other loans and leases, 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 financial institutions Commercial banks in the United States Banks in foreign countries Nonbank financial institutions For purchasing and carrying securities T o finance agricultural production To states and political subdivisions To foreign governments and official institutions All other loans 4 Lease-financing receivables LESS: Unearned income Loan and lease reserve 5 Other loans and leases, net Other assets 45 Total assets Footnotes appear on the following page. Weekly Reporting Commercial Banks A23 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1993 Account May 5 May 12 May 19 May 26 June 2 June 9 June 16 June 23 June 30 l,102,573 r 269,142 r 217,932 r 51,210"^ 8,925 2,162 22,306 r 5,591 631 11,596 116,411 717,021 690,682 26,339 21,539 2,270 2,191 339 1,142,493 296,175 239,334 56,842 9,555 2,572 26,994 5,940 852 10,928 121,241 725,077 698,526 26,551 21,338 2,653 2,235 325 1,125,960 278,548 227,108 51,440 8,407 2,275 23,404 4,658 550 12,146 120,320 727,093 700,562 26,531 21,351 2,635 2,218 327 1,135,524 289,747 234,529 55,217 9,195 5,414 23,431 5,199 658 11,321 120,711 725,066 699,247 25,819 20,556 2,678 2,260 325 1,092,820 263,260 213,379 49,881 9,559 2,016 21,870 4,962 597 10,876 116,093 713,467 688,308 25,158 20,253 2,688 1,894 324 1,114,637 290,932 240,455 50,477 9,023 2,461 21,771 5,406 768 11,048 118,545 705,160 684,496 20,664 18,352 498 1,488 326 295,427 0 16,728 278,699 294,764 0 3,676 291,087 308,635 0 27,515 281,120 321,194 0 31,458 289,736 292,782 1,260 27,483 264,039 LIABILITIES l,121,675 r l,113,712 r l,099,371 r 46 Deposits 276,877" 271,015 r 263,537 r 47 Demand deposits 225,207 r 222,007 r 215,363 r Individuals, partnerships, and corporations 48 r 51,670" 49,008 48,174 r 49 Other holders 10,049 8,652 9,093 50 States and political subdivisions 2,130 1,795 1,879 51 U.S. government 23,308 r 21,415 r 22,280 r Depository institutions in the United States 52 5,639 5,163 5,191 53 Banks in foreign countries 652 615 749 Foreign governments and official institutions 54 9,891 10,502 9,847 55 Certified and officers' checks 119,701 117,197 116,916 56 Transaction balances other than demand deposits 4 725,097 725,499 718,918 Nontransaction balances 57 699,585 699,429" 692,816 58 Individuals, partnerships, and corporations 25,512 26,070 26,101 59 Other holders 20,750 21,364 21,399 60 States and political subdivisions 2,200 2,206 2,211 61 U.S. government 2,229 2,159 2,152 Depository institutions in the United States 62 333 341 339 Foreign governments, official institutions, and banks . . . . 63 64 Liabilities for borrowed money 5 65 Borrowings from Federal Reserve Banks 66 Treasury tax and loan notes 67 Other liabilities for borrowed money 68 Other liabilities (including subordinated notes and debentures) 69 Total liabilities 70 Residual (total assets less total liabilities) 7 280,649 0 16,196 264,453 106,865 l,509,189 r 146,512 MEMO 71 7? 73 74 75 76 77 Total loans and leases, gross, adjusted, plus securities . . 1,357,430"r 109,684 Time deposits in amounts of $100,000 or more 871 Loans sold outright to affiliates 9 442 Commercial and industrial 428 Other 23,333 r Foreign branch credit extended to U.S. residents 10 -ll,323r Net owed to related institutions abroad 287,083 0 12,268 274,815 288,744 0 14,391r 274,353 292,143 0 12,779" 279,365 r 109,333r 104,660 109,029 109,460 107,170 103,375 104,493 114,033 1,510,128r 1,492,775" l,503,745 r 1,547,380 1,527,894 1,547,534 1,518,507 1,521,452 148,422 149,026 149,455 149,780 149,274 1,369,867 107,739 862 437 425 23,715 -15,779 1,370,399 108,161 863 437 426 23,320 -15,072 1,375,379 106,118 854 430 425 23,026 -23,926 1,363,619 103,453 853 428 425 22,929 -20,377 1,363,072 96,471 813 411 402 22,643 -9,667 147,236 1,355,113r 109,258r 867 438 428 23,547 r -9,oor 1. Includes certificates of participation, issued or guaranteed by agencies of the U.S. government, in pools of residential mortgages. 2. Includes securities purchased under agreements to resell. 3. Includes allocated transfer risk reserve. 4. Includes negotiable order of withdrawal accounts (NOWs), automatic transfer service (ATS), and telephone and preauthorized transfers of savings deposits. 5. Includes borrowings only from other than directly related institutions. 6. Includes federal funds purchased and securities sold under agreements to repurchase. 7. This balancing item is not intended as a measure of equity capital for use in capital-adequacy analysis. 8. Excludes loans to and federal funds transactions with commercial banks in the United States. 147,289 146,831 l,352,948 r l,346,345 r 108,008r 107,680" 866 864 437 437 428 426 23,250"" 23,118 r -13,967 r -10,039" 9. Affiliates include a bank's own foreign branches, nonconsolidated nonbank affiliates of the bank, the bank's holding company (if not a bank), and nonconsolidated nonbank subsidiaries of the holding company. 10. Credit extended by foreign branches of domestically chartered weekly reporting banks to nonbank U.S. residents. Consists mainly of commercial and industrial loans, but includes an unknown amount of credit extended to other than nonfinancial businesses. NOTE. Data that formerly appeared in table 1.28, Assets and Liabilities of Large Weekly Reporting Commercial Banks in New York City, can be obtained from the Board's H.4.2 (504) weekly statistical release. For ordering address, see inside front cover. A24 DomesticNonfinancialStatistics • September 1993 1.28 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS Liabilities1 Assets and Millions of dollars, Wednesday figures 1993 Account May 5 1 Cash and balances due from depository institutions 2 U.S. Treasury and government agency securities 3 Other securities 4 Federal funds sold' 5 To commercial banks in the United States . . . 6 To others 2 7 Other loans and leases, gross 8 Commercial and industrial 9 Bankers acceptances and commercial paper 10 All other 11 U . S . addressees 12 Non-U.S. addressees Loans secured by real estate 13 14 To financial institutions 15 Commercial banks in the United S t a t e s . . 16 Banks in foreign countries 17 Nonbank financial institutions For purchasing and carrying securities 18 19 To foreign governments ana official institutions 70 All other 21 Other assets (claims on nonrelated parties) . . 22 Total assets3 23 Deposits or credit balances owed to other than directly related institutions 24 Demand deposits 25 Individuals, partnerships, and corporations 76 Other 27 Nontransaction accounts 28 Individuals, partnerships, and corporations 29 Other 30 Borrowings from other than directly related institutions . , 31 Federal funds purchased 32 From commercial banks in the United States 33 From others 34 Other liabilities for borrowed money 35 To commercial banks in the United States 36 To others 37 Other liabilities to nonrelated parties 38 Total liabilities6 MEMO 39 Total loans (gross) and securities, a d j u s t e d 7 . . 40 Net owed to related institutions abroad May 12 May 19 June 2 June 9 June 16 June 23 June 30 17,361 17,608 16,845 17,458 17,694 18,839 18,181 18,974 19,843 30,723 8,988 r 18,481 3,872 14,609 158,085r 95,381 r 29,924 9,073 r 20,572 5,889 14,683 159,484r 95.8071 29,750 9,049 r 21,077 5,341 15,736 160,190* 96,548 r 30,099 8,804" 22,557 5,585 16,973 159,426" 96,326" 31,259 8,436 22,070 5,269 16,802 161,940 98,110 31,131 8,001 24,960 7,740 17,220 160,545 97,113 31,405 7,470 25,446 3,592 21,854 162,054 97,739 30,592 7,740 28,861 7,436 21,426 161,073 97,562 31,572 8,665 27,808 7,570 20,238 163,676 98,074 2,549 92,831 r 89,596 r 3,235 r 32,201 r 23,875 r 5,360 1,732 16,783r 3,375 2,474 93,333 r 89,992 r 3,342 32,068 r 24,950 r 5,392 1,722 17,836r 3,533 2,612 93,936 r 90,508 r 3,428 32,020 r 25,139"" 5,268 1,740 18,131r 3,491 2,594 93,732" 90,454" 3,278 32,035" 25,094" 5,453 1,810 17,832" 2,965 2,718 95,392 92,075 3,317 31,847 25,693 5,205 1,920 18,567 3,299 2,574 94,539 91,261 3,277 31,858 25,237 5,417 1,788 18,032 3,332 2,525 95,214 91,845 3,368 31,889 26,285 5,602 1,901 18,782 3,130 2,463 95,099 91,745 3,353 31,627 25,618 5,618 1,997 18,004 3,105 2,520 95,554 92,288 3,266 31,471 26,637 5,840 2,026 18,772 4,574 389 2,863 r 33,359 r 372 2,753 32,015 r 340 2,651 31,820" 375 2,630 32,176" 372 2,619 31,293 372 2,632 31,698 378 2,633 30,654 459 2,702 30,558 401 2,518 31,428 297,935 297,323 301,790 301,975 308,469 309,608 309,015 306,735 314,715 101,440 3,961 101,271 4,396 101,527 3,829 102,538 4,130 103,993 4,149 102,021 4,359 103,491 3,956 103,969 3,849 102,617 4,951 3,134 827 97,479 3,111 1,285 96,875 3,056 774 97,698 3,332 798 98,408 3,088 1,061 99,844 2,915 1,444 97,662 2,968 987 99,536 3,060 789 100,121 4,057 895 97,665 68,601 28,878 68,173 28,702 68,175 29,523 68,352 30,057 69,517 30,327 67,898 29,763 68,720 30,816 69,144 30,977 67,650 30,016 85,582 44,173 81,673 39,990 86,786 42,050 82,644 38,777 87,088 42,527 92,885 45,760 92,669 51,026 82,619 41,608 88,518 50,151 13,997 30,176 41,409 11,530 28,460 41,683 13,393 28,657 44,735 13,528 25,249 43,867 14,494 28,033 44,562 16,449 29,311 47,125 18,569 32,457 41,643 10,884 30,724 41,011 18,568 31,582 38,367 7,363 34,046 30,691 6,871 34,812 31,295 7,533 37,202 30,095 8,064 35,803 30,533 7,848 36,713 30,358 8,125 39,000 30,158 8,000 33,643 28,643 7,954 33,057 29,430 8,464 29,903 31,619 297,935 297,323 301,790 301,975 308,469 309,608 309,015 306,735 314,715 207,045 r 49,283 207,771 r 54,437 209,457" 50,323 209,849" 54,806 213,231 51,253 211,480 50,110 217,183 50,408 215,212 61,780 218,310 60,237 1. Includes securities purchased under agreements to resell. 2. Includes transactions with nonhank brokers and dealers in securities. 3. Includes net due from related institutions abroad for U.S. branches and agencies of foreign banks having a net " d u e f r o m " position. 4. Includes other transaction deposits. May 26 5. Includes securities sold under agreements to repurchase. 6. Includes net owed to related institutions abroad for U.S. branches and agencies of foreign banks having a net " d u e t o " position. 7. Excludes loans to and federal funds transactions with commercial banks in the United States. Financial Markets A25 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period Year ending December 1993 1992 Item 1988 1989 1991 1990 1992 Dec. Jan. Feb. Mar. Apr. May Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers. Financial companies Dealer-placed paper Total Bank-related (not seasonally adjusted) 3 Directly placed paper Total , Bank-related (not seasonally adjusted) 458,464 525,831 562,656 531,724 549,433 549,433 540,198 r 527,531 r 534,118' 535,966 r 541,671 159,777 183,622 214,706 213,823 228,260 228,260 212,682 r 202,046 r 218,925 r 210,230 r 214,558 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 183,379 172,813 172,813 181,264 177,370 171,959 175,384 174,468 n.a. n.a. 194,931 210,930 200,036 43,155 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 131,279 147,914 134,522 148,360 148,360 146,252r 148,115r 143,234r 150,352r 152,645 1,248 103,756 6 Nonfinancial companies Bankers dollar acceptances (not seasonally adjusted) 6 7 Total 66,631 62,972 54,771 43,770 38,200 38,200 36,001 35,221 34,939 35,317 34,864 By holder 8 Accepting b a n k s . 9 Own bills 10 Bills bought from other banks . Federal Reserve Banks 7 11 Foreign correspondents. 12 Others 9,086 8,022 1,064 9,433 8,510 924 9,017 7,930 1,087 11,017 9,347 1,670 10,561 9,103 1,458 10,561 9,103 1,458 9,121 7,927 1,193 9,878 8,361 1,516 11,036 9,162 1,873 10,688r 9,315 r l,372 r 10,934 9,624 1,310 1,493 56,052 1,066 52,473 918 44,836 1,739 31,014 1,276 26,364 1,276 26,364 1,317 25,563 1,169 24,175 1,108 22,795 909 23,720 r 690 23,239 By basis 13 Imports into United States . . 14 Exports from United States . 15 All other 14,984 14,410 37,237 15,651 13,683 33,638 13,095 12,703 28,973 12,843 10,351 20,577 12,212 8,096 17,893 12,212 8,0% 17,893 11,148 7,740 17,112 11,126 7,547 16,548 11,129 7,304 16,506 10,746 7,629 16,942 10,2% 7,901 16,667 1. Institutions engaged primarily in 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 aU financial-company paper sold by dealers in the open market. 3. Series were discontinued in January 1989. 4. As reported by financial companies that place their paper directly with investors. 1.33 PRIME RATE CHARGED BY BANKS 5. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and services. 6. Data on bankers dollar acceptances are gathered from approximately 100 institutions. The reporting group is revised every January. 7. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances for its own account. Short-Term Business Loans1 Percent per year Average rate 1990— Jan. 1991— Jan. Feb. May Sept. Nov. Dec. 1992— July 1 8 10.50 10.00 2 4 1 13 6 23 9.50 9.00 8.50 8.00 7.50 6.50 2 6.00 1990 1991 1992 1990—Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 10.01 8.46 6.25 10.11 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 1. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415) monthly statistical releases. For ordering address, see inside front cover. Average rate 1991—Jan. . Feb. Mar. Apr. May June July . Aug. Sept. Oct. Nov. Dec. 9.52 9.05 9.00 9.00 8.50 8.50 8.50 8.50 8.20 8.00 7.58 7.21 1992—Jan. . Feb. Mar. Apr. 6.50 6.50 6.50 6.50 Period 1992— May . June July . Aug. Sept Oct. Nov. Dec. 1993—Jan. . Feb Mar. Apr. May June July . A26 1.35 DomesticNonfinancialStatistics • September 1993 INTEREST RATES M o n e y and Capital Markets Averages, percent per year; figures are averages of business day data unless otherwise noted 1993 1990 Item 1991 1993, week ending 1992 Mar. Apr. May June May 28 June 4 June 11 June 18 June 25 MONEY MARKET INSTRUMENTS Federal funds 1 2 - 3 2 Discount window borrowing 8.10 6.98 5.69 5.45 3.52 3.25 3.07 3.00 2.% 3.00 3.00 3.00 3.04 3.00 3.07 3.00 3.09 3.00 2.96 3.00 3.01 3.00 3.00 3.00 8.15 8.06 7.95 5.89 5.87 5.85 3.71 3.75 3.80 3.15 3.17 3.24 3.13 3.14 3.19 3.11 3.14 3.20 3.19 3.25 3.38 3.15 3.19 3.30 3.18 3.23 3.34 3.20 3.28 3.41 3.18 3.24 3.34 3.20 3.26 3.39 8.00 7.87 7.53 5.73 5.71 5.60 3.62 3.65 3.63 3.15 3.17 3.14 3.06 3.06 3.07 3.05 3.07 3.07 3.12 3.16 3.16 3.09 3.13 3.13 3.07 3.15 3.15 3.15 3.19 3.17 3.12 3.14 3.15 3.14 3.15 3.15 7.93 7.80 5.70 5.67 3.62 3.67 3.07 3.14 3.05 3.10 3.06 3.13 3.16 3.28 3.12 3.23 3.16 3.28 3.21 3.33 3.13 3.25 3.16 3.28 8.15 8.15 8.17 5.82 5.83 5.91 3.64 3.68 3.76 3.10 3.11 3.20 3.08 3.09 3.16 3.07 3.10 3.20 3.13 3.21 3.36 3.10 3.16 3.29 3.11 3.21 3.35 3.16 3.25 3.42 3.10 3.17 3.30 3.13 3.21 3.35 8.16 5.86 3.70 3.11 3.10 3.12 3.21 3.20 3.21 3.25 3.19 3.21 7.50 7.46 7.35 5.38 5.44 5.52 3.43 3.54 3.71 2.95 3.05 3.20 2.87 2.97 3.11 2.96 3.07 3.23 3.07 3.20 3.39 3.06 3.20 3.39 3.06 3.21 3.44 3.10 3.26 3.46 3.05 3.16 3.33 3.09 3.19 3.37 7.51 7.47 7.36 5.42 5.49 5.54 3.45 3.57 3.75 2.97 3.08 3.09 2.89 3.00 3.24 2.% 3.07 3.13 3.10 3.23 3.40 3.06 3.19 n.a. 3.08 3.22 3.40 3.14 3.30 n.a. 3.07 3.19 n.a. 3.10 3.19 n.a. 7.89 8.16 8.26 8.37 8.52 8.55 8.61 5.86 6.49 6.82 7.37 7.68 7.86 8.14 3.89 4.77 5.30 6.19 6.63 7.01 7.67 3.33 3.95 4.40 5.19 5.66 5.98 6.82 3.24 3.84 4.30 5.13 5.59 5.97 6.85 3.36 3.98 4.40 5.20 5.66 6.04 6.92 3.54 4.16 4.53 5.22 5.61 5.% 6.81 3.55 4.21 4.60 5.36 5.78 6.14 6.97 3.58 4.20 4.58 5.29 5.70 6.07 6.88 3.61 4.27 4.65 5.32 5.70 6.06 6.87 3.49 4.11 4.50 5.19 5.59 5.% 6.82 3.53 4.15 4.50 5.18 5.56 5.89 6.76 8.74 8.16 7.52 6.65 6.64 6.68 6.55 6.75 6.65 6.63 6.55 6.48 6.96 7.29 7.27 6.56 6.99 6.92 6.09 6.48 6.44 5.42 5.81 5.64 5.47 5.88 5.76 5.47 5.88 5.73 5.35 5.80 5.63 5.66 6.09 5.73 5.33 5.78 5.67 5.42 5.86 5.68 5.33 5.80 5.61 5.41 5.86 5.57 9.77 9.23 8.55 7.83 7.76 7.78 7.66 7.82 7.74 7.72 7.66 7.61 33 34 Aa 35 A 36 Baa 9.32 9.56 9.82 10.36 8.77 9.05 9.30 9.80 8.14 8.46 8.62 8.98 7.58 7.72 7.86 8.15 7.46 7.62 7.80 8.14 7.43 7.61 7.85 8.21 7.33 7.51 7.74 8.07 7.46 7.64 7.89 8.27 7.39 7.58 7.82 8.16 7.38 7.57 7.81 8.13 7.32 7.50 7.74 8.06 7.29 7.46 7.69 8.01 37 A-rated, recently offered utility bonds 16 10.01 9.32 8.52 7.61 7.66 7.75 7.59 7.77 7.69 7.59 7.58 7.48 8.% 3.61 8.17 3.24 r 7.46 2.99 6.70 2.76 6.69 2.82 6.65 2.77 6.97 2.81 6.74 2.77 6.78 2.77 7.05 2.82 7.03 2.82 6.99 2.84 1 ,4 paper3,5,6 3 4 5 Commercial 1-month 3-month 6-month 6 7 8 Finance paper, directly 1-month 3-month 6-month 9 10 Bankers acceptances3,5,8 3-month 6-month 11 12 13 Certificates of deposit, marker'9 1-month 3-month 6-month placed3,5,1 secondary 14 Eurodollar deposits, 3-month 3 , 1 0 18 19 20 U.S. Treasury bills Secondary market ' 3-month 6-month 1-year Auction average ' ' 3-month 6-month 1-year 21 22 23 24 25 26 27 Constant maturities12 1-year 2-year 3-year 5-year 7-year 10-year 30-year 15 16 17 U . S . TREASURY N O T E S AND B O N D S Composite 28 More than 10 years (long-term) STATE AND LOCAL NOTES AND BONDS Moody's series13 29 30 Baa 31 Bond Buyer series CORPORATE B O N D S 32 Seasoned issues, all industries 15 Rating group MEMO Dividend-price ratio 38 Preferred stocks 39 Common stocks 1. The daily effective federal funds rate is a weighted average of rates on trades through New York brokers. 2. Weekly figures are averages of seven calendar days ending on Wednesday of the current week; monthly figures include each calendar day in the month. 3. Annualized using a 360-day year or bank interest. 4. Rate for the Federal Reserve Bank of New York. 5. Quoted on a discount basis. 6. An average of offering rates on commercial paper placed by several leading dealers for firms whose bond rating is AA or the equivalent. 7. An average of offering rates on paper directly placed by finance companies. 8. Representative closing yields for acceptances of the highest-rated money center banks. 9. An average of dealer offering rates on nationally traded certificates of deposit. 10. Bid rates for Eurodollar deposits at 11 a.m. London time. Data are for indication purposes only. 11. Auction date for daily data; weekly and monthly averages computed on an issue-date basis. 12. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Treasury. 13. General obligations based on Thursday figures; Moody's Investors Service. 14. General obligations only, with twenty years to maturity, issued by twenty state and local governmental units of mixed quality. Based on figures for Thursday. 15. Daily figures from Moody's Investors Service. Based on yields to maturity on selected long-term bonds. 16. Compilation of the Federal Reserve. This series is an estimate of the yield on recently offered, A-rated utility bonds with a thirty-year maturity and five years of call protection. Weekly data are based on Friday quotations. 17. Standard & Poor's corporate series. Preferred stock ratio is based on a sample of ten issues: four public utilities, four industrials, one financial, and one transportation. Common stock ratio is based on the 500 stocks in the price index. NOTE. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415) monthly statistical releases. For ordering address, see inside front cover. Financial Markets 1.36 STOCK MARKET All Selected Statistics 1993 1992 Indicator 1990 1991 1992 Oct. Nov. Dec. Feb. Jan. Mar. Apr. May June Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 2 Industrial 3 Transportation 4 Utility 5 Finance 183.66 226.06 158.80 90.72 133.21 206.35 258.16 173.97 92.64 150.84 229.00 284.26 201.02 99.48 179.29 226.97 279.70 192.30 101.62 181.36 232.84 287.80 204.63 101.13 189.27 239.47 290.77 212.35 103.85 196.87 239.75 292.11 221.00 105.52 203.38 243.41 294.40 226.96 109.45 209.93 248.12 298.75 229.42 112.53 217.01 244.72 292.19 237.97 113.78 216.02 246.02 297.83 237.80 111.21 209.40 247.16 298.78 234.30 113.27 209.75 6 Standard & Poor's Corporation (1941-43 = 10)' 335.01 376.20 415.75 412.50 422.84 435.64 435.40 441.76 450.15 443.08 445.25 448.06 7 American Stock Exchange (Aug. 31, 1973 = 50F 338.32 360.32 391.28 371.27 387.75 392.69 402.75 409.39 418.56 418.54 429.72 436.13 156,359 13,155 179,411 12,486 202,558 14,171 204,787 11,966 208,221 14,925 222,736 16,523 266,011 17,184 288,540 18,154 251,170 16,150 279,778 15,521 255,843 20,433 250,230 17,744 Volume of trading (thousands of shares) 8 New York Stock Exchange 9 American Stock Exchange Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers 3 28,210 36,660 43,990 41,590 43,630 43,990 44,020 44,290 45,160 47,420 48,630 49,550 Free credit balances at brokers* 11 Margin accounts 5 12 Cash accounts 8,050 19,285 8,290 19,255 8,970 22,510 8,355 18,700 8,500 19,310 8,970 22,510 8,980 20,360 9,790 22,190 9,650 21,395 9,805 21,450 9,560 21,610 9,820 22,625 Margin requirements (percent of market value and effective date) 6 13 Margin stocks 14 Convertible bonds 15 Short sales Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 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. On July 5,1983, the American Stock Exchange rebased its index, effectively cutting previous readings in half. 3. Since July 1983, under the revised Regulation T, margin credit at brokerdealers has included credit extended against stocks, convertible bonds, stocks acquired through the 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 amounts in accounts with no unfulfilled commitments to brokers and are subject to withdrawal by customers on demand. 5. New series since June 1984. 6. These requirements, stated in regulations adopted by the Board of Governors pursuant to the Securities Exchange Act of 1934, limit the amount of credit that can be used 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. Effective June 8, 1988, margins were set to be the price of the option plus 20 percent of the market value of the stock underlying the option (or 15 percent in the case of stock-index options). A28 Domestic Financial Statistics • September 1993 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year Type of account or operation 1993 1990 U.S. budget1 1 Receipts, total 2 On-budget 3 Off-budget 4 Outlays, total 5 On-budget 6 Off-budget 7 Surplus or deficit ( - ) , total 8 On-budget 9 Off-budget Source of financing (total) 10 Borrowing from the public 11 Operating cash (decrease, or increase ( - ) ) . . . 12 Other 1991 1992 Jan. Feb. Mar. Apr. May June 1,031,308 749,654 281,654 l,252,691 r l,027,626 r 225,064 -221,384 r -277,974 r 56,590 1,054,265 760,382 293,883 l,323,785 r l,082,098 r 241,685 -269,521 r —321,719r 52,198 1,090,513 788,087 302,426 1,380,657 1,128,318 252,339 -290,144 -340,231 50,087 112,718 90,129 22,589 82,903 84,928 -2,025 29,815 5,201 24,614 66,138 41,038 25,100 113,732 89,276 24,456 -47,594 -48,238 644 83,453 57,259 26,194 128,030 103,793 24,237 —44,577r -46,534 1,957 132,122 96,413 35,709 124,034 101,861 22,174 8,088 -5,448 13,535 70,758 44,636 26,122 107,716 83,320 24,395 -36,957 -38,684 1,727 128,591 98,685 29,906 117,495 103,501 13,994 11,096 -4,816 15,912 220,101 818 -461 276,802 -1,329 -5,981 310,918 -17,305 -3,469 -8,355 -16,436 -5,024 30,689 27,227 -10,322 37,727 -2,452 9,302 5,464 -18,945 5,393 30,832 20,1% -14,071 24,757 -40,288 4,435 40,155 7,638 32,517 41,484 7,928 33,556 58,789 24,586 34,203 46,326 9,572 36,754 19,099 5,350 13,749 21,551 6,752 14,799 40,496 7,273 33,223 r 20,300 5,787 14,514 60,588 28,386 32,202 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. Federal Financing Bank (FFB) activities are now shown as separate accounts under the agencies that use the F F B to finance their programs. The act also moved two social security trust funds (federal old-age survivors insurance and federal disability insurance) off budget. The Postal Service is included as an off-budget item in the Monthly Treasury Statement beginning in 1990. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous liability (including checks outstanding) and asset accounts; seigniorage; increment on gold; net gain or loss for U . S . currency valuation adjustment; net gain or loss for I M F loan-valuation adjustment; and profit on sale of gold. SOURCES. Monthly Treasury Statement of Receipts and Outlays of the U.S. Government and Budget of the U.S. Government. Federal Finance A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS 1 Millions of dollars Calendar year Fiscal year 1993 1991 Source or type 1991 1992 H2 HI H2 HI Apr. May RECEIPTS 1 All sources 2 Individual income taxes, net 3 Withheld 4 Presidential Election Campaign Fund . 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 4 14 15 16 17 Excise taxes Customs deposits Estate and gift taxes . . Miscellaneous receipts 5 1,054,265 1,090,513 519,181 560,350 540,506 593,780 132,122 70,758 467,827 404,152 32 142,693 79,050 475,979 r 408,352 30 149,430 81,834 r 234,939 210,552 33,296 8,910 236,576 r 198,868 20 110,995 73,308 r 246,961 215,591 10 39,371 8,011 256,105 210,066 25 113,482 67,468 56,137 32,691 6 44,755 21,315 17,919 31,264 5 2,281 15,631 113,599 15,513 117,949 17,679 54,016 8,649 61,682 9,403 r 58,022 7,219 69,044 7,198 19,272 1,477 3,022 646 396,011 413,689 186,839 224,569 192,599 227,177 49,176 42,277 370,526 385,491 175,802 208,110 180,758 208,776 45,164 33,062 25,457 20,922 4,563 24,421 23,410 4,788 3,306 8,721 2,317 20,434 r 14,070 2,389 3,988 9,397 2,445 16,270 16,074 2,326 12,183 3,581 431 1,620 8,849 365 42,430 15,921 11,138 22,852 45,570 17,359 11,143 26,517 r 24,429 8,694 5,507 13,406 22,389 r 8,146 5,701 r 10,690r 23,456 9,497 5,733 11,472 23,398 8,860 6,494 9,900 4,168 1,544 1,898 1,404 3,502 1,419 1,009 2,257 1,323,757 1,380,657 694,364 704,288 723,367 673,910 124,034 107,716 298,361 16,106 16,409 4,509 20,017 14,997 147,669 7,691 8,472 1,698 11,130 7,418 147,065 8,540 7,951 1,442 8,594 r 7,526 155,501 9,911 8,521 3,109 11,617 8,881 140,535 6,565 7,9% 2.462 8,588 11,824 27,192 536 1,444 431 1,709 2,666 20,460 1,410 1,382 453 1,071 1,739 -7,843 18,477 4,540 -15,112 16,109 4,935 -3,%1 2,591 987 -1,896 2,398 862 1 OUTLAYS 18 AH types 19 20 21 22 23 24 National defense International affairs General science, space, and technology . Energy Natural resources and environment Agriculture 272,514 16,167 15,946 2,511 18,708 14,864 25 26 27 28 Commerce and housing credit Transportation Community and regional development . . Education, training, employment, and social services 75,639 31,531 7,432 9,753 33,759 7,923 36,534 17,093 3,783 15,615 15,673 3,903 41,479 45,248 21,114 23,767 r 20,922 23,983 3,695 3,433 29 Health 30 Social security and Medicare 31 Income security 71,183 373,494 171,618 89,570 406,569 197,867 41,459 193,098 87,693 44,164 r 205,500 104,537r 47,223 232,109 98,693 49,882 195,933 108,559 8,883 37,236 20,408 7,758 35,020 15,900 32 33 34 35 36 31,344 12,295 11,358 195,012 -39,356 34,133 14,450 12,939 199,429 -39,280 17,425 6,574 6,794 99,149 -20,436 18,561 7,283 8,138 98,549 -20,914 16,384 7.463 5,205 99,635 -17,035 4,332 1,581 655 16,585 -2,935 801 1,199 886 17,420 -2,579 Veterans benefits and services Administration of justice General government Net interest® Undistributed offsetting receipts' 1. Functional details do not sum 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 fiilly 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 fimd. 15,597 7,435 5,050 r 100,161 -18,229 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. 6. Includes interest received by trust funds. 7. Consists of rents and royalties for 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 1994. A30 Domestic Financial Statistics • September 1993 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1991 1993 1992 Item June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 3,563 3,683 3,820 3,897 4,001 4,083 4,196 4,250 n.a. ? Public debt securities 3 Held by public 4 Held by agencies 3,538 2,643 895 3,665 2,746 920 3,802 2,833 969 3,881 2,918 964 3,985 2,977 1,008 4,065 3,048 1,016 4,177 3,129 1,048 4,231 3,188 1,043 4,352 n.a. n.a. 25 25 0 18 18 0 19 19 0 16 16 0 16 16 0 18 18 0 19 19 0 20 20 0 3,450 3,569 3,707 3,784 3,891 3,973 4,086 4,140 4,256 3,450 0 3,569 0 3,706 0 3,783 0 3,890 0 3,972 0 4,085 0 4,139 0 4,256 0 4,145 4,145 4,145 4,145 4,145 4,145 4,145 4,145 4,370 5 Agency securities 6 Held by public 7 Held by agencies 8 Debt subject to statutory limit 9 Public debt securities 10 Other debt 1 MEMO 11 Statutory debt limit 1. Consists of guaranteed debt of U.S. 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 June 30 n.a. n.a. n.a. SOURCES. U.S. Treasury Department, Monthly Statement of the Public Debt of the United States and Treasury Bulletin. Types and Ownership Billions of dollars, end of period 1993 1992 Type and holder 1 Total gross public debt 2 3 4 5 6 7 8 9 10 11 12 13 14 By type Interest-bearing Marketable Bills Notes Bonds Nonmarketable' State and local government series Foreign issues 2 Government Public Savings bonds and n o t e s . . Government account series Non-interest-bearing By holder 4 15 U.S. Treasury and other federal agencies and trust funds, 16 Federal Reserve Banks 17 Private investors 18 Commercial banks 19 Money market funds 20 Insurance companies 21 Other companies 22 State and local treasuries Individuals 23 Savings bonds 24 Other securities 25 Foreign and international 5 26 Other miscellaneous investors 6 1989 1991 1992 Q3 Q4 Ql Q2 2,953.0 3,364.8 3,801.7 4,177.0 4,064.6 4,177.0 4,230.6 4,352.0 2,931.8 1,945.4 430.6 1,151.5 348.2 986.4 163.3 6.8 6.8 .0 115.7 695.6 21.2 3,362.0 2,195.8 527.4 1,265.2 388.2 1,166.2 160.8 43.5 43.5 .0 124.1 813.8 2.8 3,798.9 2,471.6 590.4 1,430.8 435.5 1,327.2 159.7 41.9 41.9 .0 135.9 959.2 2.8 4,173.9 2,754.1 657.7 1,608.9 472.5 1,419.8 153.5 37.4 37.4 .0 155.0 1,043.5 3.1 4,061.8 2,677.5 634.3 1,566.4 461.8 1,384.3 157.6 37.0 37.0 .0 148.3 1,011.0 2.8 4,173.9 2,754.1 657.7 1,608.9 472.5 1,419.8 153.5 37.4 37.4 .0 155.0 1,043.5 3.1 4,227.6 2,807.1 659.9 1,652.1 480.2 1,420.5 151.6 37.0 37.0 .0 161.4 1,040.0 3.0 4,349.0 2,860.6 659.3 1,698.7 487.6 1,4!8 . 4 152.8 43.0 43.0 .0 164.4 1,097.8 2.9 707.8 228.4 2,015.8 164.9 14.9 125.1 93.4 487.5 828.3 259.8 2,288.3 171.5 45.4 142.0 108.9 490.4 968.7 281.8 2,563.2 233.4 80.0 168.7 150.8 520.3 1,047.8 302.5 2,839.9 293.4 80.6 190.3 192.5 534.8 1,016.3 296.4 2,765.5 287.4 79.8 185.6 180.8 529.5 1,047.8 302.5 2,839.9 293.4 80.6 190.3 192.5 534.8 1,043.2 305.2 2,895.0 296.0 77.6 194.0 199.3 536.0 117.7 98.7 392.9 520.7 126.2 107.6 421.7 674.5 138.1 125.8 455.0 691.1 157.3 131.9 512.5 746.6 150.3 130.9 499.0 722.1 157.3 131.9 512.5 746.6 163.6 134.1 528.4 766.0 1. Includes (not shown separately) securities issued to the Rural Electrification Administration, depository bonds, retirement plan bonds, and individual retirement bonds. 2. Nonmarketable series denominated in dollars, and series denominated in foreign currency held by foreigners. 3. Held almost entirely by U.S. Treasury and other federal agencies and trust funds. 4. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual holdings; data for other groups are Treasury estimates. 1990 n.a. 5. Consists of investments of foreign balances and international accounts in the United States. 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. U.S. Treasury Department, data by type of security, Monthly Statement of the Public Debt of the United States; data by holder, Treasury Bulletin. Federal Finance 1.42 U.S. GOVERNMENT SECURITIES DEALERS A31 Transactions1 Millions of dollars, daily averages 1993, week ending 1993 Item June 23 June 30 44,523 35,942 47,620 45,023 43,317 21,350 18,306 48,194 38,002 17,810 15,826 42,376 41,320 21,189 16,141 5,616 772 522 7,154 646 368 6,946 620 375 9,425 559 529 14,214 2,302 19,781 2,776 22,913 2,752 12,933 2,861 14,136 3,664 116,255 110,126 93,090 106,410 96,279 100,919 1,013 8,940 1,035 7,970 1,005 9,713 1,147 12,487 907 7,053 1,554 7,145 76,504 65,784 67,801 57,113 66,108 59,495 67,728 7,404 13,134 5,847 9,348 5,914 8,547 5,905 12,844 7,020 13,178 7,033 8,741 8,959 10,655 May 12 May 19 May 26 June 2 June 9 June 16 38,696 30,411 50,017 40,679 55,905 44,212 42,379 40,316 17,817 14,160 48,407 41,351 28,140 16,146 61,051 47,856 21,645 19,793 60,388 47,314 18,731 14,926 47,800 40,879 16,586 16,757 39,242 35,809 17,800 13,139 6,033 657 350 4,867 702 424 7,242 665 373 6,104 427 330 6,371 358 220 18,294 3,262 12,820 4,414 24,851 3,556 20,592 2,998 15,170 3,118 97,491 111,243 96,439 103,168 123,857 1,155 8,855 1,019 9,484 1,137 6,489 1,089 11,762 876 10,456 66,539 59,531 66,289 56,928 61,288 5,931 11,378 5,778 11,775 6,011 12,072 5,903 10,745 4,903 16,646 Mar. Apr. May 43,300 41,043 42,349 47,300 45,252 23,269 17,592 36,975 42,812 19,229 16,963 53,322 44,104 21,228 16,527 5,790 788 1,125 5,715 640 578 6,108 572 350 14,705 4,059 17,293 3,336 110,173 1,771 7,388 May 5 IMMEDIATE TRANSACTIONS2 By type of security U.S. Treasury securities 1 Bills Coupon securities, by maturity 2 Less than 3.5 years 3.5 to 7.5 years 3 4 7.5 to 15 years 5 15 years or more Federal agency securities Debt, by maturity Less than 3.5 years 6 7 3.5 to 7.5 years 7.5 years or more 8 Mortgage-backed Pass-throughs 9 All others 10 11 12 13 14 15 16 By type of counterparty Primary dealers and brokers U.S. Treasury securities Federal agency securities Debt Mortgage-backed Customers U.S. Treasury securities Federal agency securities Debt Mortgage-backed FUTURES AND FORWARD TRANSACTIONS4 By type of deliverable security U . S . Treasury securities 17 Bills Coupon securities, by maturity 18 Less than 3.5 years 3.5 to 7.5 years 19 7.5 to 15 years 20 21 15 years or more Federal agency securities Debt, by maturity Less than 3.5 years 22 23 3.5 to 7.5 years 24 7.5 years or more Mortgage-backed Pass-tlyoughs 25 Others 3 26 2,205 2,378 2,586 2,078 1,976 3,439 2,741 2,434 3,636 3,331 3,779 2,268 2,348 2,287 3,542 11,335 1,942 1,384 2,377 9,025 1,937 1,799 3,067 10,406 1,947 1,646 2,420 8,896 1,526 1,326 3,608 8,855 2,168 1,483 2,844 12,552 2,012 2,084 2,985 10,952 2,100 2,793 3,318 10,012 2,113 2,366 3,280 9,236 1,785 1,744 3,310 10,702 2,121 1,806 2,471 8,247 1,638 1,502 2,670 8,320 92 103 32 102 128 33 153 73 15 67 236 7 94 100 22 320 32 17 55 20 13 219 20 9 112 34 10 340 51 175 236 42 85 199 104 98 22,141 1,471 21,378 1,463 19,462 1,743 18,768 1,479 23,463 1,968 22,108 1,900 14,529 1,636 17,298 1,551 26,016 1,434 27,446 1,280 21,243 1,068 22,362 2,003 1,662 431 687 972 1,611 564 507 1,084 1,108 667 521 1,183 1,257 472 357 1,180 1,312 868 390 953 1,248 419 473 1,111 900 1,038 774 1,713 733 325 562 804 783 420 288 814 1,426 677 1,020 986 1,117 482 421 767 793 220 673 752 586 664 465 415 674 357 333 569 871 461 411 671 OPTIONS TRANSACTIONS5 27 28 29 30 31 By type of underlying security U.S. Treasury, coupon securities, by maturity Less than 3.5 years 3.5 to 7.5 years 7.5 to 15 years 15 years or more Federal agency, mortgagebacked securities Pass-throughs 1. Transactions are market purchases and sales of securities as reported to the Federal Reserve Bank of N e w York by the U.S. government securities dealers on its published list of primary dealers. Averages are based on the number of trading days in the period. Immediate, forward, and futures transactions are reported at principal value, which does not include accrued interest; options transactions are reported at the face value of the underlying securities. Dealers report cumulative transactions for each week ending Wednesday. 2. Transactions for immediate delivery include purchases or sales of securities (other than mortgage-backed agency securities) for which delivery is scheduled in five business days or less and "when-issued" securities that settle on the issue date of offering. Transactions for immediate delivery of mortgage-backed agency securities include purchases and sales for which delivery is scheduled in thirty days or less. Stripped securities are reported at market value by maturity of coupon or corpus. 3. Includes such securities as collateralized mortgage obligations (CMOs), real estate mortgage investment conduits (REMICs), interest-only securities (IOs), and principal-only securities (POs). 4. Futures transactions are standardized agreements arranged on an exchange. Forward transactions are agreements made in the over-the-counter market that specify delayed delivery. All futures transactions are included regardless of time to delivery. Forward contracts for U.S. Treasury securities and federal agency debt securities are included when the time to delivery is more than five business days. Forward contracts for mortgage-backed agency securities are included when the time to delivery is more than thirty days. 5. Options transactions are purchases or sales of put-and-call options, whether arranged on an organized exchange or in the over-the-counter market, and include options on futures contracts on U.S. Treasury and federal agency securities. NOTE. In tables 1.42 and 1.43, " n . a . " indicates that data are not published because of insufficient activity. Data for several types of options transactions—U.S. Treasury securities, bills; Federal agency securities, debt; and federal agency securities, mortgage-backed, other than pass-throughs—are no longer available because activity is insufficient. A32 DomesticNonfinancialStatistics • September 1993 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1993 1993, week ending xiem Mar. Apr. May May 5 May 12 May 19 May 26 June 2 June 9 June 16 June 23 Positions 2 N E T IMMEDIATE POSITIONS3 By type of security U.S. Treasury securities 1 Bills Coupon securities, by maturity Less than 3.5 years 2 3.5 to 7.5 years 3 7.5 to 15 years 4 15 years or more 5 Federal agency securities Debt, by maturity 6 Less than 3.5 years 3.5 to 7.5 years 7 7.5 years or more 8 Mortgage-backed Pass-throughs 9 10 All others Other money market instruments Certificates of deposit 11 Commercial paper 12 Bankers acceptances 13 13,550 18,483 7,999 13,757 4,818 8,062 5,285 10,408 -266 3,776 7,002 1,628 -14,104 -10,240 9,342 2,928 -17,023 -12,805 9,248 10,275 -19,900 -10,222 8,228 6,038 -16,651 -11,584 8,447 11,219 -17,854 -6,990 7,707 8,007 -23,033 -8,787 7,439 13,584 -20,542 -11,841 7,687 11,734 -20,726 -13,127 10,600 9,691 -20,498 -11,570 11,233 8,957 -16,896 -12,150 12,062 14,549 -14,357 -10,155 11,268 6,451 3,332 4,896 6,342 3,178 3,958 5,389 2,798 2,957 4,274 3,510 3,408 5,910 3,197 3,416 3,829 2,617 2,943 6,819 2,379 2,391 5,954 2,370 2,678 6,085 1,610 2,754 6,697 2,233 2,853 7,794 2,303 2,825 33,009 25,734 34,056 25,866 29,356 27,158 22,530 27,808 40,102 26,619 29,843 25,617 28,498 27,363 21,660 29,135 36,490 26,877 44,287 24,848 39,859 24,899 3,212 6,237 l,138 r 3,203 5,145 972 3,681 r 6,066 862 3,280 4,671 574 2,699 5,403 739 3,544 5,387 921 4,602 7,245 921 4,357 7,687 1,159 3,247 6,504 1,024 3,386 7,998 989 2,555 5,721 994 FUTURES A N D FORWARD POSITIONS5 14 15 16 17 18 19 20 21 22 23 24 By type of deliverable security U.S. Treasury securities Bills Coupon securities, by maturity Less than 3.5 years 3.5 to 7.5 years 7.5 to 15 years 15 years or more Federal agency securities Debt, by maturity Less than 3.5 years 3.5 to 7.5 years 7.5 years or more Mortgage-backed Pass-throughs All others 4 ^ Certificates of deposit -5,103 -7,951 -5,222 -10,315 -8,312 -2,732 -2,851 -2,610 -2,373 -4,8% -8,102 -568 4,333 2,954 -5,119 -1,433 4,857 4,385 -5,103 -1,556 4,626 4,410 -4,613 -409 4,086 4,861 -4,433 -1,679 4,763 3,877 -5,518 -1,376 5,267 5,681 -4,244 -1,408 4,949 3,744 -3,857 -2,993 3,627 3,858 -5,101 -3,388 3,747 3,400 -5,277 -4,597 3,441 1,789 -6,256 -2,900 3,515 1,148 -6,188 -194 -39 33 -285 -50 -74 -209 -111 -85 -844 -128 -27 -272 -93 -100 18 -71 -220 -97 -143 -20 38 -133 -21 403 -102 -45 81 60 93 -104 -65 131 -13,086 3,376 r -12,900 4,770 -160,960 -6,758 1,773 -155,044 -3,124 3,139 -144,995 -18,952 2,907 -161,008 -6,724 2,164 -161,550 -3,061 1,135 -154,231 1,459 -837 -148,775 -13,453 977 -152,557 -20,674 1,930 -144,525 -17,761 2,615 -145,753 Financing? Reverse repurchase agreements 25 Overnight and continuing 26 233,038 360,955 223,214 393,238 223,931 r 373,495 r 216,856 387,767 228,208 409,092 235,710 357,602 209,018 365,809 229,404 342,400 223,498 375,852 228,081 394,328 217,109 392,882 Repurchase agreements 27 Overnight and continuing 28 Term 403,942 349,516 406,560 369,281 399,943 346,717 386,607 352,304 397,630 387,153 419,306 333,158 390,122 345,364 403,158 305,395 3%,460 339,048 416,8% 357,665 401,316 367,531 Securities borrowed 29 Overnight and continuing 30 Terni 115,244 40,753 117,774 44,365 123,353 42,805 120,427 43,553 120,229 43,315 125,020 41,154 123,144 45,152 128,611 40,368 132,690 39,756 132,367 41,689 130,809 43,267 Securities loaned 31 Overnight and continuing 32 Term 3,504 482 4,762 587 5,055 938 4,484 489 4,668 1,189 5,358 1,221 5,581 1,025 5,007 518 4,311 360 4,997 793 4,662 665 Collateralized loans 33 Overnight and continuing 14,209 14,434 14,538r 14,622 15,839 14,596 14,483 12,630 14,508 16,428 15,735 MEMO: Matched book Reverse repurchase agreements 34 Overnight and continuing 35 Term 156,399 313,182 148,137 341,856 146,741 321,698 140,334 336,744 142,860 356,067 152,953 303,795 141,791 314,935 156,812 293,069 152,901 320,084 155,918 339,480 152,407 336,714 Repurchase agreements 36 Overnight and continuing 37 Term 214,034 266,309 204,658 283,791 210,160 257,391 210,027 265,052 213,256 288,478 210,595 242,717 201,427 252,758 217,574 233,235 212,836 254,572 218,737 269,369 198,694 282,080 7 1. Data for positions and financing are obtained from reports submitted to the Federal Reserve Bank of New York by the U.S. government securities dealers on its published list of primary dealers. Weekly figures are close-of-business Wednesday data; monthly figures are averages of weekly data. 2. Securities positions are reported at market value. 3. Net immediate positions include securities purchased or sold (other than mortgage-backed agency securities) that have been delivered or are scheduled to be delivered in five business days or less and "when-issued" securities that settle on the issue date of offering. Net immediate positions of mortgage-backed agency securities include securities purchased or sold that have been delivered or are scheduled to be delivered in thirty days or less. 4. Includes such securities as collateralized mortgage obligations (CMOs), real estate mortgage investment conduits (REMICs), interest-only securities (ids), and principal-only securities (POs). 5. Futures positions reflect standardized agreements arranged on an exchange. Forward positions reflect agreements made in the over-the-counter market that specify delayed delivery. All futures positions are included regardless of time to delivery. Forward contracts for U.S. Treasury securities and federal agency debt securities are included when the time to delivery is more than five business days. Forward contracts for mortgage-backed agency securities are included when the time to delivery is more than thirty days. 6. Overnight financing refers to agreements made on one business day that mature on the next business day; continuing contracts are agreements that remain in effect for more than one business day but have no specific maturity and can be terminated without advance notice by either party; term agreements have a fixed maturity of more than one business day. 7. Matched-book data reflect financial intermediation activity in which the borrowing and lending transactions are matched. Matched-book data are included in the financing breakdowns given above. The reverse repurchase and repurchase numbers are not always equal because of the "matching" of securities of different values or different types of collateralization. NOTE. Data for futures and forward commercial paper and bankers acceptances and for term financing of collateralized loans are no longer available because of insufficient activity. Federal Finance 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES A33 Debt Outstanding Millions of dollars, end of period 1992 Agency 1988 1 Federal and federally sponsored agencies 2 Federal agencies f 3 Defense Department 1 4 Export-Import Bank 2 , ^ 5 Federal Housing Administration 6 Government National Mortgage Association certificates of participation 5 7 Postal Service 6 8 Tennessee Valley Authority 9 United States Railway Association 6 10 Federally sponsored agencies 7 11 Federal Home Loan Banks 12 Federal Home Loan Mortgage Corporation H Federal National Mortgage Association 14 Farm Credit Banks 8 15 Student Loan Marketing Association 9 16 Financing Corporation 17 Farm Credit Financial Assistance Corporation 1 1 18 Resolution Funding Corporation 2 1989 1990 1993 1991 Dec. Jan. Feb. Mar. Apr. 381,498 411,805 434,668 442,772 483,970 487,331 494,739 494,656 0 35,668 8 11,033 150 35,664 7 10,985 328 42,159 7 11,376 393 41,035 7 9,809 397 41,829 7 7,208 374 41,641 7 7,208 231 42,115 7 7,208 237 42,051 7 6,749 259 42,619 7 6,749 263 0 6,142 18,335 0 0 6,445 17,899 0 0 6,948 23,435 0 0 8,421 22,401 0 0 10,660 23,580 0 0 10,660 23,535 0 0 10,660 24,003 0 0 10,440 24,5% 0 0 10,440 25,160 0 345,832 135,836 22,797 105,459 53,127 22,073 5,850 690 0 375,428 136,108 26,148 116,064 54,864 28,705 8,170 847 4,522 392,509 117,895 30,941 123,403 53,590 34,194 8,170 1,261 23,055 401,737 107,543 30,262 133,937 52,199 38,319 8,170 1,261 29,996 442,141 114,733 29,631 166,300 51,910 39,650 8,170 1,261 29,996 445,690 113,253 34,479 165,958 52,264 39,812 8,170 1,261 29,996 452,624 113,347 44,490 163,538 51,502 39,822 8,170 1,261 29,996 452,605 115,272 41,183 165,818 51,630 38,776 8,170 1,261 29,9% 0 117,363 0 165,135 51,210 0 8,170 1,261 29,9% 142,850 134,873 179,083 185,576 154,994 151,059 147,464 146,097 140,807 11,027 5,892 4,910 16,955 0 10,979 6,195 4,880 16,519 0 11,370 6,698 4,850 14,055 0 9,803 8,201 4,820 10,725 0 7,202 10,440 4,790 6,975 0 7,202 10,440 4,790 6,825 0 7,202 10,440 4,790 6,825 0 6,743 10,440 4,790 6,675 0 6,743 10,440 4,790 6,675 0 58,496 19,246 26,324 53,311 19,265 23,724 52,324 18,890 70,896 48,534 18,562 84,931 42,979 18,172 64,436 42,979 18,037 60,786 42,979 18,036 57,192 42,979 17,966 56,504 41,629 18,008 52,522 MEMO 19 Federal Financing Bank debt" 20 21 22 23 24 Lending to federal and federally sponsored Export-Import Bank 3 Postal Service Student Loan Marketing Association Tennessee Valley Authority United States Railway Association 6 Other lending14 25 F a n n e r s Home Administration 26 Rural Electrification Administration 27 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. On-budget since Sept. 30, 1976. 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 year 1969 by the Government National Mortgage Association acting as trustee for the F a n n e r s Home Administration, the Department of Health, Education, and Welfare, the Department of Housing and Urban Development, the 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 on line 17. 9. Before late 1982, the Association obtained financing through the Federal Financing Bank (FFB). Borrowing excludes that obtained from the F F B , which is shown on line 22. 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 Resolution Funding Corporation, established by the Financial Institutions Reform, Recovery and Enforcement Act of 1989, undertook its first borrowing in October 1989. 13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations issued, sold, or guaranteed by other federal agencies. Because F F B incurs debt solely for the purpose of lending to other agencies, its debt is not included in the main portion of the table in order to avoid double counting. 14. Includes F F B purchases of agency assets and guaranteed loans; the latter are loans guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally being small. The Farmers Home Administration entry consists exclusively of agency assets, whereas the Rural Electrification Administration entry consists of both agency assets and guaranteed loans. A34 DomesticNonfinancialStatistics • September 1993 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1992 Type of issue or issuer, or use 1990 1 All issues, new and refunding1 1991 1993 1992 Nov. Dec. Jan. Feb. Mar. Apr. May June 120,339 154,402 215,191 14,133 19,577 18,039" 18,285 r 28,920" 20,956' 27,178' 28,529 By type of issue 2 General obligation 3 Revenue 39,610 81,295 55,100 99,302 78,611 136,580 5,203 8,930 6,024 13,553 4,840 13,199 6,%3 11,322 8,254 20,666 8,272 12,684 9,452 17,726 8,415 20,114 By type of issuer 4 State 5 Special district or statutory authority 2 6 Municipality, county, or township 15,149 72,661 32,510 24,939 80,614 48,849 25,295 127,618 60,210 1,688 8,197 4,248 2,339 11,159 6,079 1,339 12,706 3,994 3,485 10,146 4,654 2,139 19,804 6,977 1,463 9,923 9,570 2,910 15,441 8,827 3,562 18,132 6,835 103,235 116,953 120,272 8,028 8,010 5,604 r 4,775 r 9,741 r 4,941 r 8,681 r 11,208 17,042 11,650 11,739 23,099 6,117 34,607 21,121 13,395 21,039 25,648 8,376 30,275 22,071 17,334 20,058 21,7% 5,424 33,589 1,800 531 960 1,070 581 3,086 1,658 831 1,258 1,121 339 2,803 1,033 829 894 777 337 1,734 1,264 131 423 618 69 2,270 1,482 2,111 538 1,556 765 3,289 833 699 806 942 134 1,527 1,596 813 955 1,756 601 2,960 2,208 772 1,629 2,073 1,042 3,484 7 Issues for new capital 8 9 10 11 12 13 By use of proceeds Education Transportation Utilities and conservation Social welfare Industrial aid Other purposes 1. Par amounts of long-term issues based on date of sale. 2. Includes school districts. 1.46 NEW SECURITY ISSUES SOURCES. Securities Data Company beginning January 1993; Dealer's Digest before then. Investment U.S. Corporations Millions of dollars 1992 Type of issue, offering, or issuer 1990 1991 1993 1992 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May 1 All issues1 340,049 465,243' n.a. 39,280 35,525 39,424 50,692' 59,427' 55,929" 40,173' 43,108 2 Bonds2 299,884 389,822' 471,125' 32,314 31,026 33,375 45,458' 49,367" 47,091' 33,922' 34,100 By type of offering 3 Public, domestic 4 Private placement, domestic 3 5 Sold abroad 188,848 86,982 23,054 286,930" 74,930 27,%2 377,681" 65,853 27,591" 30,249 n.a. 2,066 28,774 n.a. 2,252 31,835 n.a. 1,540 41,575" n.a. 3,884 47,084" n.a. 2,283" 41,888" n.a. 5,203" 30,718" n.a. 3,204" 31,100 n.a. 3,000 51,779 40,733 12,776 17,621 6,687 170,288 86,628 36,666 13,598 23,945 9,431 219,750 81,998" 42,869" 9,979" 48,055" 15,394" 272,830" 7,975 2,813 290 3,700 427 17,110 3,467 2,3% 0 1,289 374 23,499 4,232 2,176 611 2,867 516 22,973 9,393 3,074 316 4,282 3,019 25,374" 8,150 2,268 248 5,624 2,890 30,187" 8,067 2,695 1,067 7,058 3,270 24,935" 6,234" 2,194" 123" 5,767" 2,015" 17,588" 3,950 3,450 800 3,000 2,100 20,800 6 7 8 9 10 11 By industry group Manufacturing Commercial and miscellaneous Transportation Public utility Communication Real estate and financial 12 Stocks 2 40,175' 75,424' 88,324 6,966 4,499 6,049 5,234 10,060 8,838 6,251 8,698 By type of offering 13 Public preferred 14 Common 15 Private placement 3,998 19,442 16,736 17,085" 48,230" 10,109 21,339 57,119 9,866 2,901 4,065 n.a. 1,540 2,958 n.a. 1,608 4,441 n.a. 1,112 4,122 n.a. 1,898 8,161 n.a. 1,647 7,191 n.a. 702 5,549 n.a. 3,124 5,574 n.a. 5,649 10,171 369 416 3,822 19,738 24,111" 19,418 2,439 3,474 475 25,507 22,722 20,231 2,595 6,532 2,365 33,879 1,779 940 53 359 99 3,735 288 1,366 304 150 22 2,369 1,468 2,226 118 92 126 2,019 722 1,688 65 310 0 2,438 2,616 2,021 64 350 0 5,009 1,741 2,488 336 743 7 3,522 1,387 1,564 250 412 30 2,579 1,413 2,836 111 753 279 3,307 16 17 18 19 20 21 By industry group Manufacturing Commercial and miscellaneous Transportation Public utility Communication Real estate and financial 1. Figures represent gross proceeds of issues maturing in more than one year; they are the principal amount or number of units calculated by multiplying by the offering price. Figures exclude 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 cover only public offerings. 3. Monthly data are not available. SOURCES. IDD Information Services, Inc., Securities Data Company, and the Board of Governors of the Federal Reserve System. Securities Market and Corporate Finance A35 Net Sales and Assets 1 1.47 OPEN-END INVESTMENT COMPANIES Millions of dollars 1992 Item 1991 1993 1992 Oct. Nov. Dec. Jan. Feb. Mar. Apr. r May 1 Sales of own shares2 463,645 647,055 52,214 52,019 70,618 71,607 60,676 69,080 66,766 60,594 2 Redemptions of own shares 3 Net sales 342,547 121,098 447,140 199,915 37,134 15,080 34,126 17,893 51,993 18,625 46,545 25,062 39,684 20,992 47,414 21,666 46,518 20,248 38,792 21,802 4 Assets 4 808,582 1,056,310 983,151 1,019,618 1,056,310 1,082,653 1,116,784 1,154,445 1,178,663 1,219,443 5 Cash 5 6 Other 60,292 748,290 73,999 982,311 75,808 907,343 80,247 939,371 73,999 982,311 76,764 1,005,889 79,763 1,037,021 81,536 1,072,910 87,140 1,091,523 84,993 1,134,450 4. Market value at end of period, less current liabilities. 5. Includes all U.S. Treasury securities and other short-term debt securities. SOURCE. Investment Company Institute. Data based on reports of membership, which comprises substantially all open-end investment companies registered with the Securities and Exchange Commission. Data reflect underwritings of new companies. 1. Data on sales and redemptions exclude money market mutual funds but include limited-maturity municipal bond funds. Data on assets exclude both money market mutual funds and limited-maturity municipal bond funds. 2. Includes reinvestment of dividends. Excludes reinvestment of capital gains distributions. 3. Excludes sales and redemptions resulting from transfers of shares into or out of money market mutual funds within the same fund family. 1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data at seasonally adjusted annual rates 1992 1991 Account 1991 1990 1993 1992 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Qlr 1 Profits with inventory valuation and capital consumption adjustment 2 Profits before taxes 3 Profits tax liability 4 Profits after taxes 5 Dividends 6 Undistributed profits 361.7 355.4 136.7 218.7 149.3 69.4 346.3 334.7 124.0 210.7 146.5 64.2 393.8 371.6 140.2 231.4 149.3 82.1 347.3 332.3 122.9 209.4 146.2 63.2 341.2 336.7 127.0 209.6 145.1 64.5 347.1 332.3 125.0 207.4 143.9 63.4 384.0 366.1 136.4 229.7 143.6 86.2 388.4 376.8 144.1 232.7 146.6 86.1 374.1 354.1 131.8 222.2 151.1 71.1 428.5 389.4 148.5 241.0 155.9 85.0 424.2 393.0 147.2 245.7 160.2 85.5 7 Inventory valuation 8 Capital consumption adjustment -14.2 20.5 3.1 8.4 -7.4 29.5 9.9 5.1 -4.8 9.3 .7 14.1 -5.4 23.3 -15.5 27.0 -9.7 29.7 1.0 38.1 -9.4 40.6 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.50 NONFARM BUSINESS EXPENDITURES New Plant and Equipment Billions of dollars; quarterly data at seasonally adjusted annual rates 1991 Industry 1991 1992 1992 1993 19931 Q4 Ql Q2 Q3 Q4 Ql Q2 Q31 1 Total nonfarm business 528.39 546.08 581.12 529.87 535.72 540.91 547.53 560.16 564.81 587.29 587.05 Manufacturing 2 Durable goods industries 3 Nondurable goods industries 77.64 105.17 73.41 100.50 77.49 100.74 76.40 102.66 74.19 99.79 74.26 97.52 71.84 100.39 73.34 104.28 79.32 95.85 78.06 104.73 75.01 102.17 10.02 8.90 9.51 9.99 8.87 9.18 9.09 8.44 8.84 10.10 10.15 5.95 10.17 6.54 6.77 8.97 7.04 6.71 7.50 9.12 5.44 10.41 6.45 6.65 8.86 6.37 6.50 9.75 7.27 6.87 10.13 7.69 7.08 7.13 6.84 6.01 7.43 9.06 6.68 8.89 8.42 6.87 7.59 9.09 43.76 22.82 246.32 48.05 23.91 268.54 52.75 22.99 294.32 44.75 22.67 251.11 46.06 22.75 262.17 48.45 24.19 263.80 47.73 23.92 269.86 49.95 24.78 278.32 49.87 23.44 284.99 54.11 23.58 292.72 53.66 22.54 299.% Nonmanufacturing 4 Mining Transportation 5 Railroad 6 Air 7 Other Public utilities 8 Electric 9 Gas and other 10 Commercial and other 2 1. Figures are amounts anticipated by business. 2. " O t h e r " consists of construction, wholesale and retail trade, finance and insurance, personal and business services, and communication. SOURCE. U.S. Department of Commerce, Survey of Current Business. A36 DomesticNonfinancialStatistics • September 1993 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1991 Account 1990 1991 1992 1993 1992 Q3 Q4 Q1 Q2 Q3 Q4 Q1 ASSETS 1 Accounts receivable, gross 2 2 Consumer i Business 4 Real estate 492.3 133.3 293.6 65.5 480.6 121.9 292.9 65.8 482.1 117.1 296.5 68.4 485.2 125.3 293.7 66.2 480.6 121.9 292.9 65.8 475.6 118.4 290.8 66.4 476.7 116.7 293.2 66.8 473.9 116.7 288.5 68.8 482.1 117.1 296.5 68.4 473.7 111.9 293.7 68.1 57.6 9.6 55.1 12.9 50.8 15.8 57.6 13.1 55.1 12.9 53.6 13.0 51.2 12.3 50.8 12.0 50.8 15.8 48.1 14.9 7 Accounts receivable, net 8 All other 425.1 113.9 412.6 149.0 415.5 150.6 414.6 136.4 412.6 149.0 409.0 145.5 413.2 139.4 411.1 146.5 415.5 150.6 410.7 153.0 9 Total assets 539.0 561.6 566.1 551.1 561.6 554.5 552.6 557.6 566.1 563.7 10 Bank loans 11 Commercial paper 31.0 165.3 42.3 159.5 37.6 156.4 39.6 156.8 42.3 159.5 38.0 154.4 37.8 147.7 38.1 153.2 37.6 156.4 34.1 149.8 12 13 14 15 Debt Other short-term Long-term Owed to parent Not elsewhere classified lb All other liabilities 1/ Capital, surplus, and undivided profits n.a. n.a. 37.5 178.2 63.9 63.7 n.a. n.a. 34.5 191.3 69.0 64.8 n.a. n.a. 37.8 195.3 71.2 67.8 n.a. n.a. 36.5 185.0 68.8 63.8 n.a. n.a. 34.5 191.3 69.0 64.8 n.a. n.a. 34.5 189.8 72.0 66.0 n.a. n.a. 34.8 191.9 73.4 67.1 n.a. n.a. 34.9 191.4 73.7 68.1 n.a. n.a. 37.8 195.3 71.2 67.8 n.a. n.a. 41.9 195.1 76.2 66.7 18 Total liabilities and capital 539.6 561.2 566.1 550.5 561.2 554.6 552.7 559.4 566.1 563.7 5 LESS: Reserves for unearned income b Reserves for losses LIABILITIES AND CAPITAL 1. Includes finance company subsidiaries of bank holding companies but not of retailers and banks. Data are amounts carried on the balance sheets of finance companies; securitized pools are not shown, since they are not on the books. 1.52 DOMESTIC FINANCE COMPANIES 2. Before deduction for unearned income and losses, Consumer, Real Estate, and Business Credit1 Millions of dollars, amounts outstanding, end of period 1992 Type of credit 1990 1991 1993 1992 Dec. Jan. Feb. Mar. Apr. r May Seasonally adjusted Total 522,474 519,910 534,845 534,845 529,256 531,398 532,144 532,468 522,449 Consumer Real estate 2 Business 160,468 65,147 296,858 154,822 65,383 299,705 157,707 68,011 309,127 157,707 68,011 309,127 156,551 68,942 303,763 157,733 70,016 303,649 156,277 68,726 307,141 156,390 69,803 306,276 152,638 66,361 303,450 Not seasonally adjusted Total 525,888 523,192 538,158 538,158 528,847 528,490 532,298 534,328 523,520 Consumer Motor vehicles Other c o n s u m e r Securitized motor vehicles 4 Securitized other consumer 4 Real estate 2 Business Motor vehicles Retail 5 Wholesale 6 Leasing Equipment Retail Wholesale 6 Leasing Other business Securitized business assets 4 Retail Wholesale Leasing 161,360 75,045 58,213 19,837 8,265 65,509 299,019 92,125 26,454 33,573 32,098 137,654 31,968 11,101 94,585 63,773 5,467 667 3,281 1,519 155,713 63,415 58,522 23,166 10,610 65,760 301,719 90,613 22,957 31,216 36,440 141,399 30,962 9,671 100,766 60,900 8,807 576 5,285 2,946 158,631 57,605 59,522 29,775 11,729 68,410 311,118 87,456 19,303 29,962 38,191 151,607 32,212 8,669 110,726 57,464 14,590 1,118 8,756 4,716 158,631 57,605 59,522 29,775 11,729 68,410 311,118 87,456 19,303 29,962 38,191 151,607 32,212 8,669 110,726 57,464 14,590 1,118 8,756 4,716 156,430 57,165 58,844 28,894 11,527 68,889 303,527 86,491 19,124 28,727 38,640 146,820 32,458 8,582 105,780 55,760 14,457 1,036 8,582 4,839 155,929 54,036 58,651 32,860 10,383 69,216 303,345 86,412 17,881 30,059 38,472 145,886 32,430 8,318 105,138 55,962 15,085 973 9,408 4,704 154,933 53,508 58,346 32,915 10,164 68,135 309,230 91,647 16,961 35,894 38,792 145,878 32,560 8,656 104,662 56,153 15,552 904 9,824 4,824 155,389 53,977 58,546 32,443 10,423 69,356 309,583 91,692 17,228 35,063 39,400 145,877 32,170 8,642 105,066 56,144 15,870 1,434 9,745 4,691 152,073 53,907 55,344 32,717 10,105 66,115 305,332 89,328 16,524 32,242 40,562 145,237 32,384 8,556 104,297 54,487 16,280 1,375 9,590 5,315 1. Includes finance company subsidiaries of bank holding companies but not of retailers and banks. Data are before deductions for unearned income and losses. Data in this table also appear in the Board's G.20 (422) monthly statistical release. For ordering address, see inside front cover. 2. Includes all loans secured by liens on any type of real estate, for example, first and junior mortgages and home equity loans. 3. Includes personal cash loans, mobile home loans, and loans to purchase other types of consumer goods such as appliances, apparel, general merchandise, and recreation vehicles. FRASER 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. Digitized for 5. Passenger car fleets and commercial land vehicles for which licenses are required. 6. Credit arising from transactions between manufacturers and dealers, that is, floor plan financing. 7. includes loans on commercial accounts receivable, factored commercial accounts, and receivable dealer capital; small loans used primarily for business or farm purposes; and wholesale and lease paper for mobile homes, campers, and travel trailers. Real Estate 1.53 MORTGAGE MARKETS A37 Mortgages on New Homes Millions of dollars except as noted 1992 Item 1990 1991 1993 1992 Dec. Jan. Feb. Mar. Apr. May June Terms and yields in primary and secondary markets PRIMARY MARKETS 1 2 3 4 5 Terms1 Purchase price (thousands of dollars) Amount of loan (thousands of dollars) Loan-to-price ratio (percent) Maturity (years) Fees and charges (percent of loan amount) Yield (percent per year) 6 Contract rate 1 , 7 Effective rate 1 ' 3 8 Contract rate ( H U D series) 4 153.2 112.4 74.8 27.3 1.93 155.0 114.0 75.0 26.8 1.71 158.1 118.1 76.6 25.6 1.60 154.0 117.7 77.7 26.1 1.31 158.6 119.5 76.8 25.7 1.49 159.7 114.5 75.4 23.8 1.43 156.2 121.5 79.3 26.9 1.50 150.9 115.0 78.5 24.9 1.23 153.1 118.8 79.5 26.9 1.43 185.6 125.3 75.3 25.4 1.32 9.68 10.01 10.08 9.02 9.30 9.20 7.98 8.25 8.43 7.65 7.88 8.19 7.57 7.82 7.93 7.52 7.77 7.63 7.22 7.46 7.59 7.26 7.46 7.51 7.14 7.37 7.59 7.02 7.23 7.52 10.17 9.51 9.25 8.59 8.46 7.77 8.12 7.57 8.04 7.39 7.55 7.02 7.57 6.79 7.56 6.77 7.59 6.79 7.33 6.75 SECONDARY MARKETS Yield (percent per year) 9 F H A mortgages (Section 203)5 10 G N M A securities 6 Activity in secondary markets F E D E R A L N A T I O N A L MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 12 FHA/VA 13 Conventional Mortgage transactions 14 Purchases (during Mortgage commitments 15 Issued 16 To sell 8 (during 113,329 21,028 92,302 122,837 21,702 101,135 142,833 22,168 120,664 158,119 22,593 135,526 159,204 22,640 136,564 159,766 22,573 137,193 161,147 22,700 138,447 163,719 22,682 141,037 166,849 22,691 144,158 171,232 22,656 148,576 23,959 37,202 75,905 8,832 4,993 4,118 4,730 6,761 7,526 9,131 23,689 5,270 40,010 7,608 74,970 10,493 6,185 1,811 4,189 1,159 4,177 221 6,644 0 7,764 112 7,791 30 8,697 323 20,419 547 19,871 24,131 484 23,283 29,959 408 29,552 33,665 352 33,313 32,370 347 32,023 32,454 343 32,112 35,421 337 35,084 38,361 330 38,031 39,960 325 39,635 n.a. n.a. n.a. 75,517 73,817 97,727 92,478 191,125 179,208 20,792 19,602 15,512 16,536 12,063 12,105 12,587 10,286 15,885 13,807 18,842 17,532 n.a. 18,159 102,401 114,031 261,637 32,453 17,591 23,366 21,103 20,731 18,908 n.a. period) period) FEDERAL H O M E L O A N MORTGAGE CORPORATION Mortgage holdings (end of period)8 17 Total 18 FHA/VA 19 Conventional Mortgage transactions 20 Purchases 21 Sales (during Mortgage commitments 22 Contracted (during period) periodf 1. Weighted averages based on sample surveys of mortgages originated by major institutional lender groups for purchase of newly built homes; compiled by the Federal Housing Finance Board in cooperation with the Federal Deposit Insurance Corporation. 2. Includes all fees, commissions, discounts, and " p o i n t s " paid (by the borrower or the seller) to obtain a loan. 3. Average effective interest rate on loans closed for purchase of newly built homes, assuming prepayment at the end of ten years. 4. Average contract rate on new commitments for conventional first mortgages; from U.S. Department of Housing and Urban Development (HUD). Based on transactions on the first day of the subsequent month. 5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured by the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. 6. Average net yields to investors on fully modified pass-through securities backed by mortgages and guaranteed by the Government National Mortgage Association (GNMA), assuming prepayment in twelve years on pools of thirtyyear mortgages insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. 7. Does not include standby commitments issued, but includes standby commitments converted. 8. Includes participation loans as well as whole loans. 9. Includes conventional and government-underwritten loans. The Federal Home Loan Mortgage Corporation's mortgage commitments and mortgage transactions include activity under mortgage securities swap programs, whereas the corresponding data for F N M A exclude swap activity. A38 DomesticNonfinancialStatistics • September 1993 1.54 MORTGAGE DEBT OUTSTANDING 1 Millions of dollars, end of period 1993 1992 Type of holder and property 1989 1990 1991 Q1 Q2 Q3 Q4 QLP 3,537,301 3,751,476 3,890,830 3,933,754 3,%7,017 4,003,714 4,035,405 4,059,391 2,392,742 307,045 757,038 80,476 2,597,175 310,095 765,458 78,748 2,741,824 307,944 761,782 79,281 2,788,987 308,514 753,578 82,676 2,833,318 304,104 746,357 83,237 2,887,877 300,728 731,407 83,702 2,940,165 293,376 718,910 82,953 2,976,623 289,202 710,208 83,359 1,931,537 767,069 389,632 38,876 321,906 16,656 910,254 669,220 106,014 134,370 650 254,214 12,231 26,907 205,472 9,604 1,914,315 844,826 455,931 37,015 334,648 17,231 801,628 600,154 91,806 109,168 500 267,861 13,005 28,979 215,121 10,756 1,846,910 876,284 486,572 37,424 333,852 18,436 705,367 538,358 79,881 86,741 388 265,258 11,547 29,562 214,105 10,044 1,825,983 880,377 492,910 37,710 330,837 18,919 682,338 524,536 77,166 80,278 358 263,269 11,214 29,693 212,865 9,497 1,803,488 884,598 4%,518 38,314 330,229 19,538 659,624 508,545 74,788 75,947 345 259,266 10,676 29,425 210,139 9,026 1,793,505 891,484 506,658 38,985 325,934 19,906 648,178 501,604 73,723 72,517 334 253,843 10,451 28,804 205,709 8,878 1,769,058 894,549 511,976 38,011 324,681 19,882 627,972 489,622 69,791 68,235 324 246,537 10,158 27,997 199,943 8,439 1,750,365 888,395 508,4% 37,814 322,166 19,919 620,755 486,126 67,491 66,812 327 241,214 9,830 27,454 195,816 8,114 22 Federal and related agencies 23 Government National Mortgage Association 24 One- to four-family 25 Multifamily 26 Farmers Home Administration 4 27 One- to four-family 28 Multifamily 29 Commercial 30 Farm 31 Federal Housing and Veterans' Administrations 32 One- to four-family 33 Multifamily 34 Resolution Trust Corporation 35 One- to four-family 36 Multifamily 37 Commercial 38 Farm 39 Federal National Mortgage Association 40 One- to four-family 41 Multifamily 42 Federal Land Banks 43 One- to four-family 44 Farm 45 Federal Home Loan Mortgage Corporation 46 One- to four-family 47 Multifamily 197,778 23 23 0 41,176 18,422 9,054 4,443 9,257 6,087 2,875 3,212 0 0 0 0 0 99,001 90,575 8,426 29,640 1,210 28,430 21,851 18,248 3,603 239,003 20 20 0 41,439 18,527 9,640 4,690 8,582 8,801 3,593 5,208 32,600 15,800 8,064 8,736 0 104,870 94,323 10,547 29,416 1,838 27,577 21,857 19,185 2,672 266,146 19 19 0 41,713 18,496 10,141 4,905 8,171 10,733 4,036 6,697 45,822 14,535 15,018 16,269 0 112,283 100,387 11,896 28,767 1,693 27,074 26,809 24,125 2,684 278,3% 19 19 0 41,791 18,488 10,270 4,%1 8,072 11,332 4,254 7,078 49,345 15,458 16,266 17,621 0 118,238 105,869 12,369 28,776 1,693 27,083 28,895 26,182 2,713 278,091 23 23 0 41,628 17,718 10,356 4,998 8,557 11,480 4,403 7,077 44,624 15,032 13,316 16,276 0 122,939 110,223 12,716 28,775 1,693 27,082 28,621 26,001 2,620 277,485 27 27 0 41,671 17,292 10,468 5,072 8,839 11,768 4,531 7,236 37,099 12,614 11,130 13,356 0 126,476 113,407 13,069 28,815 1,695 27,119 31,629 29,039 2,591 285,%5 30 30 0 41,695 16,912 10,575 5,158 9,050 12,581 5,153 7,428 32,045 12,960 9,621 9,464 0 137,584 124,016 13,568 28,365 1,669 26,6% 33,665 31,032 2,633 288,199 45 37 8 41,724 16,418 10,679 5,226 9,402 13,950 6,159 7,791 27,331 11,375 8,070 7,886 0 141,192 127,252 13,940 28,536 1,679 26,857 35,421 32,831 2,589 48 Mortgage pools or trusts 5 49 Government National Mortgage Association 50 One- to four-family 51 Multifamily 52 Federal Home Loan Mortgage Corporation 53 One- to four-family 54 Multifamily 55 Federal National Mortgage Association 56 One- to four-family 57 Multifamily 58 Farmers Home Administration 59 One- to four-family 60 Multifamily 61 Commercial 62 Farm 63 Private mortgage conduits 64 One- to four-family 65 Multifamily 66 Commercial 67 Farm 917,848 368,367 358,142 10,225 272,870 266,060 6,810 228,232 219,577 8,655 80 21 0 26 33 48,299 43,325 462 4,512 0 1,079,103 403,613 391,505 12,108 316,359 308,369 7,990 299,833 291,194 8,639 66 17 0 24 26 59,232 53,335 731 5,166 0 1,250,666 425,295 415,767 9,528 359,163 351,906 7,257 371,984 362,667 9,317 47 11 0 19 17 94,177 84,000 3,698 6,479 0 1,288,823 421,977 412,574 9,404 367,878 360,887 6,991 389,853 380,617 9,236 43 10 0 18 16 109,071 95,600 4,686 8,784 0 1,341,338 422,922 413,828 9,094 382,797 376,177 6,620 413,226 403,940 9,286 43 9 0 18 15 122,350 105,700 5,7% 10,855 0 1,385,460 422,255 413,063 9,192 391,762 385,400 6,362 429,935 420,835 9,100 41 9 0 18 14 141,468 123,000 5,7% 12,673 0 1,425,546 419,516 410,675 8,841 407,514 401,525 5,989 444,979 435,979 9,000 38 8 0 17 13 153,499 132,000 6,305 15,194 0 1,459,899 421,514 412,798 8,716 420,932 415,279 5,654 457,316 448,483 8,833 36 7 0 17 13 160,100 137,000 6,858 16,242 0 68 Individuals and others 6 69 One- to four-family 70 Multifamily 71 Commercial 72 Farm 490,138 303,181 84,800 86,310 15,846 519,055 330,378 86,695 87,905 14,077 527,108 327,704 84,842 99,411 15,150 540,552 338,676 84,932 98,213 18,732 544,100 342,832 84,698 97,8% 18,675 547,263 348,252 84,272 %,129 18,610 554,836 356,451 83,617 96,218 18,549 560,929 362,853 83,306 %,043 18,727 1 All holders 2 3 4 5 By type of property One- to four-family residences Multifamily residences Commercial Farm By type of holder 6 Major financial institutions 7 Commercial banks 8 One- to four-family 9 Multifamily 10 Commercial 11 Farm 12 Savings institutions 13 One- to four-family 14 Multifamily 15 Commercial 16 Farm 17 Life insurance companies 18 One- to four-family 19 Multifamily 20 Commercial 21 Farm 1. Based on data from various institutional and governmental sources; figures for some quarters estimated in part by the Federcd Reserve. Multifamily debt refers to loans on structures of five or more units. 2. Includes loans held by nondeposit trust companies but not loans held by bank trust departments. 3. Includes savings banks and savings and loan associations. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from F m H A mortgage pools to F m H A mortgage holdings in 1986:Q4 because of accounting changes by the Farmers Home Administration. 5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by the agency indicated. 6. Other holders include mortgage companies, real estate investment trusts, state and local credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and finance companies. SOURCE. Line 64, Inside Mortgage Securities. Consumer Installment Credit A39 1.55 CONSUMER INSTALLMENT CREDIT1 Millions of dollars, amounts outstanding, end of period 1992 Holder and type of credit 1990 1991 1993 1992 Dec. Jan. Feb. Mar. Apr. r May Seasonally adjusted 1 Total 738,765 733,510 741,093 741,093 744,196 748,765 751,727 754,719 753,917 2 Automobile 3 Revolving 4 Other 284,739 222,552 231,474 260,898 243,564 229,048 259,627 254,299 227,167 259,627 254,299 227,167 258,463 256,435 229,299 260,945 259,378 228,443 261,449 260,990 229,288 261,826 262,700 230,193 263,552 263,642 226,723 Not seasonally adjusted 752,883 749,052 756,944 756,944 749,153 746,914 744,713 748,955 748,375 By major holder Commercial banks Finance companies Credit unions Retailers Savings institutions Gasoline companies Pools of securitized assets 347,087 133,258 93,057 43,464 52,164 4,822 79,030 340,713 121,937 92,681 39,832 45,965 4,362 103,562 331,869 117,127 97,641 42,079 43,461 4,365 120,402 331,869 117,127 97,641 42,079 43,461 4,365 120,402 330,355 116,009 98,261 40,057 43,428 4,366 116,677 330,060 112,686 98,785 38,462 43,516 4,148 119,257 329,764 111,854 99,778 38,030 43,255 4,080 117,952 331,649 112,523 101,534 38,218 43,451 4,280 117,300 333,314 109,251 102,967 38,681 43,785 4,486 115,891 By major type of credit* 13 Automobile 14 Commercial banks Finance companies 15 16 Pools of securitized assets 284,903 124,913 75,045 24,620 261,219 112,666 63,415 28,915 259,964 109,743 57,605 33,878 259,964 109,743 57,605 33,878 257,744 109,671 57,165 32,388 259,344 111,005 54,036 36,031 259,089 111,287 53,508 36,096 260,224 111,351 53,977 36,178 262,407 113,322 53,907 35,974 17 Revolving Commercial banks 18 Retailers 19 Gasoline companies 20 21 Pools of securitized assets 2 234,801 133,385 38,448 4,822 45,637 256,876 138,005 34,712 4,362 63,595 267,949 132,582 36,629 4,365 74,243 267,949 132,582 36,629 4,365 74,243 261,217 129,567 34,666 4,366 71,927 258,430 127,877 33,110 4,148 72,024 257,544 128,079 32,681 4,080 70,890 259,015 129,464 32,838 4,280 69,919 260,506 130,531 33,254 4,486 69,054 22 Other Commercial banks 23 24 Finance companies Retailers 25 26 Pools of securitized assets 233,178 88,789 58,213 5,016 8,773 230,957 90,042 58,522 5,120 11,052 229,031 89,544 59,522 5,450 12,281 229,031 89,544 59,522 5,450 12,281 230,192 91,117 58,844 5,391 12,362 229,141 91,178 58,651 5,352 11,202 228,080 90,398 58,346 5,349 10,966 229,716 90,834 58,546 5,380 11,203 225,462 89,461 55,344 5,427 10,863 5 Total 6 7 8 9 10 11 12 1. The Board's series on amounts of credit covers 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. Data in this table also appear in the Board's G.19 (421) monthly statistical release. For ordering address, see inside front cover. 2. Outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originator. 3. Totals include estimates for certain holders for which only consumer credit totals are available. 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent per year except as noted 1993 1992 Item 1990 1991 1992 Nov. Dec. Jan. Feb. Mar. Apr. May INTEREST RATES Commercial banks2 48-month new car 24-month personal 120-month mobile home Credit card 11.78 15.46 14.02 18.17 11.14 15.18 13.70 18.23 9.29 14.04 12.67 17.78 8.60 13.55 12.36 17.38 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8.57 13.57 12.38 17.26 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8.17 13.63 12.00 17.15 Auto finance companies 5 New car 6 Used car 12.54 15.99 12.41 15.60 9.93 13.80 9.65 13.37 9.65 13.66 10.08 13.72 10.32 13.90 9.95 13.21 9.61 12.74 9.51 12.61 54.6 46.0 55.1 47.2 54.0 47.9 54.1 47.8 53.6 47.7 53.9 49.2 54.3 49.0 54.6 49.0 54.5 48.9 54.4 48.9 87 95 88 % 89 97 89 97 90 97 90 97 91 98 90 98 90 98 91 98 12,071 8,289 12,494 8,884 13,584 9,119 14,043 9,475 14,315 9,464 13,975 9,472 13,849 9,457 14,013 9,641 14,021 9,731 14,146 9,829 1 2 3 4 OTHER TERMS3 Maturity (months) 7 New car 8 Used car Loan-to-value 9 New car 10 Used car ratio Amount financed 11 New car 12 Used car (dollars) 1. Data in this table also appear in the Board's G.19 (421) monthly statistical release. For ordering address, see inside front cover. 2. Data are available for only the second month of each quarter, 3. At auto finance companies. A40 1.57 Domestic Financial Statistics • September 1993 F U N D S RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1991 1988 1989 1990 1991 1992 1993 1992 Q3 Q4 Ql Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors . . 775.8 740.8 665.0 461.0 574.4 411.5 403.8 672.2 560.3 486.7 578.2 539.2 By sector and instrument 2 U.S. government 3 Treasury securities Agency issues and mortgages 4 155.1 137.7 17.4 146.4 144.7 1.6 246.9 238.7 8.2 278.2 292.0 -13.8 304.0 303.8 .2 288.4 317.2 -28.8 320.4 316.6 3.8 368.9 380.1 -11.2 351.9 351.5 .4 193.4 184.4 9.0 301.7 299.1 2.7 274.7 271.6 3.2 5 Private 620.7 594.4 418.2 182.8 270.4 123.1 83.4 303.3 208.5 293.2 276.5 264.4 6 7 8 9 10 U 12 13 14 15 16 By instrument Tax-exempt obligations Corporate bonds Mortgages Home mortgages Multifamily residential Commercial Farm Consumer credit Bank loans n.e.c Open market paper Other 53.7 103.1 317.3 241.8 16.7 60.8 -2.1 50.1 41.0 11.9 43.6 65.0 73.8 303.0 245.3 16.4 42.7 -1.5 41.7 40.2 21.4 49.3 51.2 47.1 244.0 219.4 3.7 21.0 -.1 17.5 4.4 9.7 44.2 45.8 78.8 138.5 144.6 -2.4 -4.3 .5 -13.1 -33.3 -18.4 -15.6 53.3 67.3 140.9 198.3 -14.6 -42.9 .1 9.3 -17.7 8.6 8.6 53.5 81.6 53.3 135.4 -36.3 -45.3 -.4 -24.8 -18.2 -36.3 13.8 45.5 60.2 106.3 128.4 10.2 -32.4 .0 -11.9 -65.3 -7.0 -44.3 52.0 76.3 194.1 225.0 2.4 -32.5 -.8 -2.0 -22.9 13.3 -7.5 73.0 77.8 96.5 140.9 -17.7 -28.9 2.2 -15.5 -22.9 -3.1 2.7 52.3 61.3 140.9 212.6 -13.6 -60.0 1.9 9.2 -4.5 .5 33.5 35.9 53.7 132.3 214.9 -29.5 -50.1 -3.0 45.6 -20.6 23.8 5.8 50.8 75.0 130.8 180.6 -16.7 -34.7 1.6 27.8 -5.4 -9.6 -5.0 17 18 19 20 21 22 By borrowing sector State and local government Household Nonfinancial business Farm Nonfarm noncorporate Corporate 48.9 318.6 253.1 -7.5 61.8 198.8 63.2 305.6 225.6 1.6 50.4 173.6 48.3 254.2 115.6 2.5 26.7 86.4 38.5 160.2 -15.9 2.2 -23.4 5.3 47.0 222.6 .8 .0 -40.1 40.9 37.6 148.3 -62.8 1.9 -65.8 1.2 41.9 136.5 -95.0 -2.2 -51.9 -40.9 46.1 231.5 25.8 -1.4 -22.9 50.0 63.4 157.9 -12.9 6.6 -49.9 30.5 50.0 238.0 5.2 1.0 -38.6 42.8 28.6 262.8 -14.9 -6.2 -49.0 40.3 58.8 224.1 -18.4 2.3 -36.9 16.2 23 Foreign net borrowing in United States 24 Bonds 25 Bank loans n.e.c Open market paper 26 27 U.S. government loans 6.4 6.9 -1.8 8.7 -7.5 10.2 4.9 -.1 13.1 -7.6 23.9 21.4 -2.9 12.3 -6.9 14.1 14.9 3.1 6.4 -10.2 23.9 17.8 2.3 5.2 -1.4 15.6 15.5 1.4 16.0 -17.2 41.0 22.3 6.5 14.9 -2.7 9.7 4.9 1.5 -8.0 11.4 55.2 21.9 14.1 27.8 -8.5 29.5 21.0 3.9 13.1 -8.6 1.1 23.5 -10.3 -12.1 .0 64.4 76.2 1.8 -21.7 8.0 28 Total domestic plus foreign 782.2 750.9 688.9 475.1 598.2 427.1 444.8 681.8 615.5 516.2 579.3 603.5 Financial sectors 29 Total net borrowing by financial sectors 30 31 32 33 By instrument U.S. government-related Sponsored-credit-agency securities Mortgage pool securities Loans from U.S. government 34 Private Corporate bonds 35 36 Mortgages Bank loans n.e.c 37 Open market paper 38 39 Loans from Federal Home Loan Banks 40 41 42 43 44 45 46 47 48 49 By borrowing sector Sponsored credit agencies Mortgage pools Private Commercial banks Bank affiliates Savings and loan associations Mutual savings banks Finance companies Real estate investment trusts (REITs) Securitized credit obligation (SCO) issuers 211.4 220.1 187.1 138.4 226.0 146.0 170.0 155.9 233.8 277.7 236.4 228.5 119.8 44.9 74.9 .0 151.0 25.2 125.8 .0 167.4 17.1 150.3 -.1 150.0 9.2 140.9 .0 167.1 40.2 126.9 .0 156.0 20.6 135.5 .0 158.5 32.6 125.9 -.1 137.4 11.5 125.9 .0 222.8 48.3 174.4 .0 165.6 67.7 97.9 .0 142.7 33.5 109.2 .0 172.3 35.4 137.0 .0 91.7 16.2 .3 .6 54.8 19.7 69.1 46.8 .0 1.9 31.3 -11.6 54.3 .9 3.2 -32.0 -38.0 58.8 51.5 .0 7.2 -.7 .8 -10.0 31.8 .4 10.2 -16.7 -35.7 11.6 50.6 2.1 4.5 -12.7 -33.0 18.5 11.4 -.4 8.2 8.8 -9.5 11.0 -11.0 19.7 34.4 .3 1.2 8.6 -24.7 112.1 73.5 .3 5.4 11.6 21.3 93.7 106.1 .2 11.3 -9.7 -14.2 56.2 98.0 -.1 3.1 -64.4 19.6 44.9 74.9 91.7 -3.0 5.2 19.9 1.9 31.5 3.6 32.5 25.2 125.8 69.1 -1.4 6.2 -14.1 -1.4 59.7 -1.9 22.0 17.0 150.3 19.7 -1.1 -27.7 -29.9 -.5 35.6 -1.9 45.2 9.1 140.9 -11.6 -13.3 -2.5 -39.5 -3.5 7.8 .9 38.5 40.2 126.9 58.8 4.5 2.3 -4.7 1.8 16.4 .6 38.0 20.6 135.5 -10.0 -9.2 -6.8 -41.1 -5.5 11.8 -.3 41.1 32.5 125.9 11.6 -14.1 9.6 -25.1 -8.7 12.8 3.6 33.3 11.5 125.9 18.5 7.2 2.7 -20.3 4.3 1.1 1.1 22.4 67.7 97.9 112.1 1.6 10.5 10.0 8.3 28.6 1.3 52.0 33.5 109.2 93.7 8.3 4.0 -11.2 -5.6 55.9 -.9 43.2 35.4 137.0 56.2 6.4 8.1 10.0 6.1 -12.6 1.0 37.1 14.9 .1 3.9 -13.4 5.7 48.3 174.4 11.0 .8 -8.2 2.7 .3 -20.0 .9 34.5 Flow of Funds A41 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued 1991 Transaction category or sector 1988 1989 1990 1991 1992 1993 1992 Q3 Q4 Ql Q2 Q3 Q4 Ql All sectors 50 Total net borrowing, all sectors 993.6 971.0 876.0 613.5 824.2 573.1 614.8 837.8 849.4 793.9 815.7 832.0 51 52 53 54 55 56 57 58 274.9 53.7 126.3 317.5 50.1 39.9 75.4 55.8 297.3 65.0 125.5 303.0 41.7 41.9 65.9 30.6 414.4 51.2 102.9 244.3 17.5 2.8 30.7 12.4 428.3 45.8 147.9 139.4 -13.1 -26.9 -44.0 -63.9 471.1 53.3 136.6 141.0 9.3 -8.2 13.1 8.0 444.4 53.5 128.9 53.7 -24.8 -6.7 -37.0 -39.0 479.0 45.5 133.2 108.4 -11.9 -54.3 -4.9 -80.1 506.3 52.0 92.6 193.6 -2.0 -13.2 14.1 -5.6 574.7 73.0 114.5 96.6 -15.5 -4.9 11.2 -.2 359.0 52.3 155.8 141.1 9.2 4.9 25.2 46.3 444.4 35.9 183.3 132.5 45.6 -19.6 2.0 -8.4 447.1 50.8 249.2 130.7 27.8 -.5 -95.7 22.5 U.S. government securities State and local obligations Corporate and foreign bonds Mortgages Consumer credit Bank loans n.e.c Open market paper Other loans External corporate equity funds raised in United States 59 Total net share issues -118.4 -65.7 22.1 198.9 279.6 232.5 268.5 263.6 291.7 286.8 276.5 342.8 60 Mutual funds 61 All other 62 Nonfinancial corporations 63 Financial corporations 64 Foreign shares purchased in United States 6.1 -124.5 -129.5 4.1 .9 38.5 -104.2 -124.2 2.7 17.2 67.9 -45.8 -63.0 9.8 7.4 150.5 48.4 18.3 .0 30.2 215.4 64.3 26.8 6.4 31.2 182.5 50.0 19.0 -3.2 34.1 195.9 72.6 48.0 1.7 22.9 183.5 80.1 46.0 4.1 29.9 236.2 55.5 36.0 8.5 11.0 233.3 53.6 11.0 7.9 34.7 208.4 68.1 14.0 5.0 49.1 274.4 68.4 27.0 7.8 33.6 1. Data in this table also appear in the Board's Z . l (780) quarterly statistical release, tables F.2 through F.5. For ordering address, see inside front cover. A42 1.58 Domestic Financial Statistics • September 1993 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1992 1991 Transaction category or sector 1988 1989 1990 1991 1993 1992 Q3 Q4 Ql Q2 Q3 Q4 QL N E T L E N D I N G IN C R E D I T MARKETS2 1 Total net lending in credit markets Private domestic nonfinancial sectors Households Nonfarm noncorporate business Nonfinancial corporate business State and local governments U.S. government Foreign Financial sectors Sponsored credit agencies Mortgage pools Monetary authority Commercial banking U.S. commercial banks Foreign banking offices Bank affiliates Banks in U.S. possession Private nonbank finance Thrift institutions Savings and loan associations Mutual savings banks 72 Credit unions Insurance 73 24 Life insurance companies 25 Other insurance companies 26 Private pension funds 27 State and local government retirement funds 78 Finance n.e.c 29 Finance companies 30 Mutual funds 31 Money market funds 32 Real estate investment trusts (REITs) 33 Brokers and dealers 34 Securitized credit obligation (SCOs) issuers . . . 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 993.6 971.0 876.0 613.5 824.2 573.1 614.8 837.8 849.4 793.9 815.7 832.0 226.2 198.9 3.1 5.7 18.6 -10.6 96.3 681.8 37.1 74.9 10.5 157.1 127.1 29.4 -.1 .7 402.2 119.0 • 87.4 15.3 16.3 186.2 103.8 29.2 18.1 35.1 96.9 49.2 11.9 10.7 .9 -8.2 32.5 209.6 179.5 -.8 12.9 17.9 -3.1 74.1 690.4 -.5 125.8 -7.3 176.8 145.7 26.7 2.8 1.6 395.7 -91.0 -93.9 -4.8 7.7 207.7 93.1 29.7 36.2 48.7 278.9 69.3 23.8 67.1 .5 96.3 22.0 203.8 172.3 -1.4 6.6 26.2 33.7 58.4 580.2 16.4 150.3 8.1 125.4 95.2 28.4 -2.8 4.5 279.9 -151.9 -143.9 -16.5 8.5 188.5 94.4 26.5 16.6 51.0 243.3 41.6 41.4 80.9 -.7 34.9 45.2 31.8 .4 -2.3 17.5 16.3 10.0 42.6 529.1 14.2 140.9 31.1 84.0 38.9 48.5 -1.5 -1.9 259.0 -144.9 -140.9 -15.5 11.5 219.5 83.2 34.7 64.7 37.0 184.4 -22.5 90.3 30.1 -1.0 49.0 38.5 75.0 79.9 -2.2 8.8 -11.5 -12.7 95.3 666.5 68.7 126.9 27.9 91.9 69.5 16.5 5.7 .3 351.1 -61.7 -76.7 -1.4 16.4 178.9 89.7 17.3 36.9 35.0 233.9 21.5 132.3 1.3 .6 40.2 38.0 -131.1 -170.1 -1.9 28.8 12.1 -2.1 37.3 669.0 31.7 135.5 48.1 82.4 26.5 56.7 2.4 -3.3 371.3 -176.8 -156.3 -30.8 10.3 259.0 73.8 36.8 115.0 33.4 289.2 -5.4 117.1 1.1 -.6 135.8 41.1 -25.9 -67.8 -2.8 26.6 18.2 -17.9 71.0 587.6 19.7 125.9 22.3 104.3 45.6 61.3 -1.1 -1.5 315.3 -49.5 -83.3 11.5 22.3 159.2 13.2 32.1 96.9 17.0 205.6 -54.9 124.8 53.8 -1.9 50.5 33.3 162.4 181.9 -1.9 -1.4 -16.1 13.9 88.4 573.0 93.1 125.9 33.2 98.9 91.9 .6 6.4 .0 222.0 -113.1 -137.9 7.6 17.2 110.7 80.6 33.1 -32.2 29.2 224.4 39.2 99.1 65.8 .3 -2.4 22.4 118.0 105.3 -2.6 11.8 3.4 -24.9 139.2 617.0 39.9 174.4 9.8 58.4 .5 58.6 -.6 -.1 334.5 -81.4 -92.4 -7.4 18.5 183.9 81.9 22.2 49.7 30.0 232.0 -22.3 169.0 -24.8 2.6 73.0 34.5 -166.4 -159.0 -2.2 10.6 -15.9 -27.0 63.4 924.0 76.5 97.9 10.8 157.4 132.0 6.5 18.5 .4 581.3 -40.5 -38.5 -13.0 247.1 96.5 2.5 109.8 38.2 374.8 8.5 150.7 -16.3 -.3 180.3 52.0 186.1 191.5 -2.2 14.3 -17.6 -12.8 90.3 552.1 65.3 109.2 57.8 53.1 53.4 .4 -1.6 .8 266.8 -11.8 -38.1 7.4 18.9 174.0 99.9 11.2 20.3 42.6 104.5 60.5 110.4 -19.2 -.1 -90.2 43.2 -20.4 -1.5 -2.0 -9.2 -7.7 -16.7 86.1 783.1 16.9 137.0 49.6 131.7 103.9 27.9 -1.2 1.1 447.9 -14.7 -32.5 -9.5 27.3 192.8 74.3 9.4 60.6 48.5 269.8 11.1 161.0 -16.8 .8 76.5 37.1 11.0 RELATION OF LIABILITIES TO F I N A N C I A L ASSETS 35 Net flows through credit markets 993.6 971.0 876.0 613.5 824.2 573.1 614.8 837.8 849.4 793.9 815.7 832.0 36 37 38 39 40 41 47 43 44 45 46 47 48 49 50 51 52 53 54 Other financial sources Official foreign exchange Treasury currency and special drawing rights Life insurance reserves Pension fund reserves Interbank claims Deposits at financial institutions Checkable deposits and currency Small time and savings deposits Large time deposits Money market fund shares Security repurchase agreements Foreign deposits Mutual fund shares Corporate equities Security credit Trade debt Taxes payable Noncorporate proprietors' equity Miscellaneous 4.0 .5 25.3 193.6 2.9 259.9 43.2 120.8 53.6 21.9 23.5 -3.1 6.1 -124.5 3.0 89.2 5.3 -31.2 222.3 24.8 4.1 28.8 221.4 -16.5 290.0 6.1 96.7 17.6 90.1 78.3 1.1 38.5 -104.2 15.6 60.0 2.0 -32.5 269.9 2.0 2.5 25.7 186.8 34.2 96.8 44.2 59.9 -66.7 70.3 -23.5 12.6 67.9 -45.8 3.5 44.1 -.5 -39.3 120.5 -5.9 .0 24.5 268.6 -3.7 61.1 75.8 16.7 -60.9 41.2 -16.4 4.6 150.5 48.4 51.4 10.4 -9.0 -2.7 136.8 -1.6 -1.8 29.9 232.9 50.5 14.5 122.7 -61.1 -79.7 3.9 34.1 -5.5 215.4 64.3 4.2 52.5 7.8 -4.3 186.3 -15.5 .4 19.4 344.1 99.9 27.3 104.5 -42.4 -78.1 4.0 36.3 3.0 182.5 50.0 82.4 47.6 13.1 43.2 39.0 -5.0 .5 19.2 244.2 -32.5 47.8 114.4 13.0 -117.4 26.8 16.0 -5.0 195.9 72.6 120.7 -7.3 -3.2 4.8 204.4 3.5 .1 30.5 125.5 55.4 73.5 88.6 -29.9 -78.8 110.2 10.2 -26.9 183.5 80.1 -72.1 71.1 10.6 -16.7 181.9 -6.5 .3 28.4 178.6 22.1 -77.2 92.8 -89.3 -104.9 -42.3 118.9 -52.5 236.2 55.5 -5.3 38.8 9.4 10.7 260.8 -8.5 .2 33.3 325.8 118.0 194.2 202.7 -83.0 -54.8 -13.0 77.1 65.2 233.3 53.6 84.9 64.8 -.6 -18.2 225.2 5.1 -7.7 27.5 301.6 6.4 -132.4 106.8 -42.1 -80.4 -39.1 -69.7 -8.0 208.4 68.1 9.3 35.1 11.7 7.0 77.3 7.6 .3 27.6 286.1 80.2 99.3 31.9 -111.4 -3.7 33.4 152.2 -3.0 274.4 68.4 31.9 38.3 .1 -12.3 166.1 55 Total financial sources 1,650.2 1,772.7 1,374.3 1,343.9 1,674.7 1,506.5 1,477.1 1,564.6 1,601.2 2,099.8 1,433.0 1,900.2 56 57 58 Floats not included in assets ( - ) U.S. government checking deposits Other checkable deposits Trade credit 1.6 .8 -.9 8.4 -3.2 .6 3.3 2.5 21.5 -13.1 2.0 15.0 .7 1.6 22.4 23.9 -2.1 23.8 -73.1 -6.1 -7.1 4.4 16.7 24.3 -11.7 2.5 -7.8 -5.3 -13.9 55.3 15.3 1.1 17.7 -6.2 -18.4 11.1 59 60 61 62 63 Liabilities not identified as assets ( - ) Treasury currency Interbank claims Security repurchase agreements Taxes payable Miscellaneous -.1 -3.0 -29.8 6.3 4.4 -.2 -4.4 23.9 2.3 -95.6 .2 1.6 -34.8 6.5 -13.8 -.6 26.2 10.4 5.6 -34.1 -.2 -5.5 11.5 14.4 -38.6 -.2 28.4 36.9 23.4 -195.7 -.1 .2 44.0 11.4 182.3 -.4 13.4 -46.5 1.6 -119.0 -.1 -15.1 86.3 24.5 -95.7 -.3 -2.6 26.1 15.3 27.6 -.1 -17.7 -19.8 16.3 32.8 -.1 10.8 122.4 -10.3 -92.5 64 Total identified to sectors as assets 1,670.7 1,841.0 1,387.5 1,332.5 1,668.5 1,568.1 1,325.7 1,670.2 1,618.4 1,997.7 1,387.6 1,883.4 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.6 and F.7. For ordering address, see inside front cover. 2. Excludes corporate equities and mutual fund shares, Flow of Funds A43 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING 1 Billions of dollars, end of period 1989 1990 1991 1993 1992 1991 Transaction category or sector 1992 Q4 Q3 Ql Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 10,087.1 10,760.8 11,222.9 11,801.3 11,095.2 11,222.9 11,353.6 11,488.0 11,634.5 11,801.3 11,897.1 By lending sector and instrument 2 U.S. government 3 Treasury securities 4 Agency issues and mortgages 2,251.2 2,227.0 24.2 2,498.1 2,465.8 32.4 2,776.4 2,757.8 18.6 3,080.3 3,061.6 18.8 2,687.2 2,669.6 17.6 2,776.4 2,757.8 18.6 2,859.7 2,844.0 15.8 2.923.3 2.907.4 15.9 2,998.9 2,980.7 18.1 3,080.3 3,061.6 18.8 3,140.2 3,120.6 19.6 5 Private 7,835.9 8,262.6 8,446.6 8,720.9 8,408.0 8,446.6 8,493.9 8,564.7 8,635.6 8,720.9 8,756.9 6 7 8 9 10 11 12 13 14 15 16 By instrument Tax-exempt obligations Corporate bonds Mortgages Home mortgages Multifamily residential Commercial Farm Consumer credit Bank loans n.e.c Open market paper Other 1.004.4 926.1 3.647.5 2,515.1 304.4 742.6 85.3 791.8 760.7 107.1 598.4 1,055.6 973.2 3,907.3 2,760.0 305.8 757.6 84.0 809.3 758.0 116.9 642.6 1,101.4 1,051.9 4,045.7 2,904.6 303.3 753.3 84.5 799.9 724.7 98.5 624.5 1,154.7 1,119.2 4,190.2 3,102.9 288.7 710.4 88.2 809.2 707.0 107.1 633.5 1,089.3 1,036.9 4,020.3 2,873.6 300.8 761.4 84.5 790.1 734.1 107.0 630.3 1,101.4 1,051.9 4,045.7 2,904.6 303.3 753.3 84.5 799.9 724.7 98.5 624.5 1,111.5 1,071.0 4.088.7 2.951.8 303.9 745.2 87.9 777.6 713.7 110.4 620.8 1,128.6 1,090.4 4.122.0 2.996.1 299.5 737.9 88.5 776.9 710.3 112.0 624.5 1,145.6 1,105.8 4.158.6 3.050.7 296.1 722.9 88.9 784.5 705.7 108.2 627.3 1,154.7 1,119.2 4,190.2 3,102.9 288.7 710.4 88.2 809.2 707.0 107.1 633.5 1,164.8 1,138.0 4.214.3 3.139.4 284.6 701.7 88.6 794.0 700.9 114.9 630.2 17 18 19 20 21 22 By borrowing sector State and local government Household Nonfinancial business Farm Nonfarm noncorporate Corporate 815.7 3.508.2 3,512.0 139.2 1,177.5 2.195.3 864.0 3,780.6 3,618.0 140.5 1,204.2 2,273.4 902.5 3.944.5 3.599.6 140.1 1.180.7 2,278.7 949.6 4,167.0 3,604.3 143.8 1,140.6 2,319.9 891.4 3,897.0 3.619.6 141.7 1,191.3 2.286.7 902.5 3.944.5 3.599.6 140.1 1.180.7 2,278.7 911.3 3,970.3 3,612.3 141.3 1,174.5 2,296.5 925.9 4,023.0 3,615.8 145.1 1,163.5 2,307.2 942.3 4,087.8 3,605.5 146.2 1,150.8 2,308.5 949.6 4,167.0 3,604.3 143.8 1,140.6 2,319.9 961.6 4,191.5 3,603.8 142.3 1.130.7 2.330.8 254.8 278.6 292.7 307.3 282.2 292.7 282.3 298.3 306.6 307.3 319.5 88.0 21.4 63.0 82.4 109.4 18.5 75.3 75.4 124.2 21.6 81.8 65.2 142.0 23.9 77.7 63.7 118.6 20.0 78.0 65.6 124.2 21.6 81.8 65.2 125.4 22.0 70.5 64.4 130.9 25.5 77.4 64.5 136.2 26.5 80.7 63.3 142.0 23.9 77.7 63.7 161.1 24.4 72.3 61.8 10,341.9 11,039.4 11,515.7 12,108.6 11,377.5 11,515.7 11,635.9 11,786.3 11,941.1 12,108.6 12,216.6 23 Foreign credit market debt held in United States 24 25 26 27 Bonds Bank loans n.e.c Open market paper U.S. government loans 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign Financial sectors 29 Total credit market debt owed by financial sectors 30 31 32 33 34 35 36 37 38 39 By instrument U.S. government-related Sponsored credit-agency securities Mortgage pool securities Loans from U.S. government Private Corporate bonds Mortgages Bank loans n.e.c Open market paper Loans from Federal Home Loan Banks By borrowing sector 40 Sponsored credit agencies 41 Mortgage pools 42 Private financial sectors 43 Commercial banks 44 Bank affiliates 45 Savings and loan associations 46 Mutual savings banks 47 Finance companies 48 Real estate investment trusts (REITs) 49 Securitized credit obligation (SCO) issuers... 2,333.0 2,524.2 2,670.3 2,897.0 2,618.4 2,670.3 2,701.2 2,758.1 2,828.6 2,897.0 2,946.6 1,249.3 373.3 871.0 5.0 1,083.7 491.9 3.4 37.5 409.1 141.8 1,418.4 393.7 1,019.9 4.9 1,105.8 528.2 4.2 38.6 417.7 117.1 1,574.3 402.9 1,166.7 4.8 1,095.9 584.2 5.1 41.8 385.7 79.1 1,741.5 443.1 1,293.5 4.8 1,155.6 627.2 5.1 49.0 394.3 79.9 1,531.1 394.7 1,131.5 4.9 1,087.3 572.8 4.6 39.0 387.0 83.9 1,574.3 402.9 1,166.7 4.8 1,095.9 584.2 5.1 41.8 385.7 79.1 1,603.8 405.7 1,193.2 4.8 1,097.4 581.3 5.0 41.6 393.2 76.3 1,658.3 417.8 1,235.6 4.8 1,099.8 583.7 5.0 43.7 390.5 76.9 1,702.0 434.7 1,262.5 4.8 1,126.6 602.3 5.1 44.5 394.6 80.2 1,741.5 443.1 1,293.5 4.8 1,155.6 627.2 5.1 49.0 394.3 79.9 1,779.7 451.9 1,322.9 4.8 1,167.0 650.0 5.1 47.6 379.3 85.0 378.3 871.0 1,083.7 77.4 142.5 145.2 17.2 504.2 10.1 187.1 398.5 1,019.9 1,105.8 76.3 114.8 115.3 16.7 539.8 10.6 232.3 407.7 1,166.7 1,095.9 63.0 112.3 75.9 13.2 547.5 12.3 271.9 447.9 1,293.5 1,155.6 67.4 114.6 71.1 15.1 563.8 13.6 309.9 399.5 1,131.5 1,087.3 64.6 110.6 79.0 15.2 543.3 11.2 263.6 407.7 1,166.7 1,095.9 63.0 112.3 75.9 13.2 547.5 12.3 271.9 410.5 1,193.2 1,097.4 60.8 115.0 71.2 13.5 546.7 12.7 277.5 422.6 1,235.6 1,099.8 61.7 112.7 70.3 14.3 541.6 13.2 286.1 439.5 1,262.5 1,126.6 63.3 114.4 70.9 16.2 549.1 13.7 299.1 447.9 1,293.5 1,155.6 67.4 114.6 71.1 15.1 563.8 13.6 309.9 456.8 1,322.9 1,167.0 64.8 118.7 74.8 15.7 559.8 14.1 319.2 All sectors 50 Total credit market debt, domestic and foreign.. 51 52 53 54 55 56 57 58 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 12,674.9 13,563.6 14,186.0 15,005.6 13,995.8 14,186.0 14,337.1 14,544.4 14,769.7 15,005.6 15,163.3 3,495.6 1,004.4 1,506.0 3,650.9 791.8 819.6 579.2 827.5 3,911.7 1,055.6 1,610.7 3,911.5 809.3 815.1 609.9 839.9 4,345.9 1,101.4 1,760.4 4,050.8 799.9 788.2 565.9 773.5 4,817.0 1,154.7 1,888.5 4,195.4 809.2 780.0 579.0 781.9 4,213.5 1,089.3 1,728.3 4,024.9 790.1 793.2 572.0 784.7 4,345.9 1,101.4 1,760.4 4,050.8 799.9 788.2 565.9 773.5 4,458.7 1,111.5 1,777.8 4,093.8 777.6 777.3 574.1 766.3 4,576.8 1,128.6 1,805.0 4,127.0 776.9 779.5 579.9 770.7 4,696.0 1,145.6 1,844.2 4,163.7 784.5 776.6 583.6 775.5 4,817.0 1,154.7 1,888.5 4,195.4 809.2 780.0 579.0 781.9 4,915.0 1,164.8 1,949.0 4,219.4 794.0 772.8 566.4 781.8 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. A44 DomesticNonfinancialStatistics • September 1993 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1989 1990 1991 1993 1992 1991 Transaction category or sector 1992 Q3 Q4 Ql Q2 Q3 Q4 Ql CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Private domestic nonfinancial sectors Households Nonfarm noncorporate business Nonfinancial corporate business State and local governments U.S. government Foreign Financial sectors Sponsored credit agencies Mortgage pools Monetary authority Commercial banking U.S. commercial banks Foreign banking offices Bank affiliates Banks in U.S. possession Private nonbank finance Thrift institutions Savings and loan associations Mutual savings banks Credit unions Insurance Life insurance companies Other insurance companies Private pension funds State and local government retirement funds. Finance n.e.c Finance companies Mutual funds Money market funds Real estate investment trusts (REITs) Brokers and dealers Securitized credit obligation (SCOs) issuers . 12,674.9 13,563.6 14,186.0 15,005.6 13,995.8 14,186.0 14,337.1 14,544.4 14,769.7 15,005.6 15,163.3 2,666.2 1,897.3 52.6 186.3 530.0 252.0 817.2 10,260.3 389.0 1,131.5 264.7 2,817.8 2,488.7 297.5 11.6 20.0 5,657.2 1,205.1 826.1 208.7 170.2 2,508.7 1,201.4 370.7 466.6 470.1 1,943.5 647.5 421.4 389.5 7.2 214.3 263.6 2,552.8 1,760.5 52.6 203.4 536.2 246.2 835.1 10,552.0 397.7 1,166.7 272.5 2,853.3 2,502.5 319.2 11.9 19.7 5,861.7 1,190.7 804.2 211.5 174.9 2,676.8 1,199.6 378.7 624.2 474.3 1,994.3 635.5 450.5 402.7 6.8 226.9 271.9 2,559.5 1,784.6 51.4 192.1 531.4 250.2 857.2 10,670.2 419.9 1,193.2 271.8 2,860.6 2,514.0 313.3 13.6 19.7 5,924.8 1,161.8 771.1 213.4 177.3 2,709.0 1,224.3 387.0 616.1 481.6 2,053.9 640.5 478.8 424.0 6.8 226.3 277.5 2,561.6 1,773.4 50.8 204.2 533.3 245.3 892.0 10,845.5 429.0 1,235.6 282.6 2,882.9 2,521.9 328.2 13.1 19.7 6,015.4 1,143.1 748.8 211.6 182.7 2,757.3 1,247.1 392.5 628.5 489.1 2,115.0 641.2 522.0 413.5 7.5 244.6 286.1 2,551.6 1,776.1 50.2 197.7 527.6 238.1 908.2 11,071.8 446.3 1,262.5 285.2 2,922.9 2,556.7 328.9 17.5 19.8 6,155.0 1,133.7 737.9 208.3 187.4 2,818.1 1,270.3 393.1 656.0 498.7 2,203.1 640.7 557.5 408.8 7.4 289.6 299.1 2,622.8 1,835.5 50.4 212.3 524.7 233.5 930.8 11,218.5 466.4 1,293.5 300.4 2,945.2 2,571.9 335.8 17.6 20.0 6,212.9 1,129.0 727.5 210.2 191.3 2,855.7 1,289.4 396.0 661.1 509.3 2,228.2 656.9 582.8 404.1 7.4 267.1 309.9 2,599.4 1,829.5 49.2 198.8 521.9 229.8 943.7 11,390.4 470.2 1,322.9 303.6 2,961.1 2,587.0 336.5 17.4 20.2 6,332.7 1,124.8 720.8 207.8 196.2 2,908.9 1,313.0 398.3 676.2 521.5 2,298.9 654.8 626.6 404.5 7.6 286.2 319.2 14,186.0 14,337.1 14,544.4 14,769.7 15,005.6 15,163.3 2,440.5 1,710.1 56.4 180.3 493.7 205.1 734.2 9,295.1 367.2 871.0 233.3 2,643.9 2,368.4 242.3 16.2 17.1 5,179.7 1,484.9 1,088.9 241.1 154.9 2,140.3 1,013.1 317.5 394.7 414.9 1,554.5 617.1 307.2 291.8 8.4 142.9 187.1 2,644.2 1,882.3 55.0 186.9 519.9 238.7 792.4 9,888.3 383.6 1,019.9 241.4 2,769.3 2,463.6 270.8 13.4 21.6 5,474.1 1,335.5 945.1 227.1 163.4 2,329.1 1,116.5 344.0 431.3 437.4 1,809.4 658.7 360.2 372.7 7.7 177.9 232.3 2,552.8 1,760.5 52.6 203.4 536.2 246.2 835.1 10,552.0 397.7 1,166.7 272.5 2,853.3 2,502.5 319.2 11.9 19.7 5,861.7 1,190.7 804.2 211.5 174.9 2,676.8 1,199.6 378.7 624.2 474.3 1,994.3 635.5 450.5 402.7 6.8 226.9 271.9 2,622.8 1,835.5 50.4 212.3 524.7 233.5 930.8 11,218.5 466.4 1,293.5 300.4 2,945.2 2,571.9 335.8 17.6 20.0 6,212.9 1,129.0 727.5 210.2 191.3 2,855.7 1,289.4 396.0 661.1 509.3 2,228.2 656.9 582.8 404.1 7.4 267.1 309.9 12,674.9 13,563.6 14,186.0 15,005.6 13,995.8 53.6 61.3 55.4 51.8 52.9 55.4 52.7 54.4 55.4 51.8 54.5 23.8 354.3 3,210.5 32.4 4,644.6 888.6 2,265.4 615.4 428.1 403.2 43.9 566.2 133.9 903.9 81.8 2,508.3 26.3 380.0 3,303.0 64.0 4,741.4 932.8 2,325.3 548.7 498.4 379.7 56.6 602.1 137.4 938.0 81.4 2,678.8 26.3 402.0 4,208.8 65.2 4,802.5 1,008.5 2,342.0 487.9 539.6 363.4 61.2 813.9 188.9 940.9 72.3 2,817.3 24.5 431.9 4,573.7 115.4 4,817.0 1,131.0 2,281.0 408.4 543.6 397.5 55.6 1,050.2 217.3 1,003.6 80.1 2,931.8 26.2 397.2 3,717.7 60.9 4,769.5 948.3 2,339.7 517.1 533.1 368.9 62.4 744.2 158.1 935.3 71.9 2,733.9 26.3 402.0 4,208.8 65.2 4,802.5 1,008.5 2,342.0 487.9 539.6 363.4 61.2 813.9 188.9 940.9 72.3 2,817.3 26.3 409.6 4,226.3 67.2 4,796.4 984.3 2,340.9 469.7 572.0 375.1 54.4 860.4 194.6 939.8 77.4 2,834.5 26.4 416.7 4,278.7 70.8 4,785.1 1,032.3 2,314.7 438.7 557.2 401.0 41.3 928.3 193.3 944.9 72.7 2,876.0 26.5 425.0 4,418.1 101.6 4,829.9 1,071.6 2,293.3 428.8 553.2 425.4 57.6 971.2 214.5 987.7 75.8 2,911.5 24.5 431.9 4,573.7 115.4 4,817.0 1,131.0 2,281.0 408.4 543.6 397.5 55.6 1,050.2 217.3 1,003.6 80.1 2,931.8 24.6 438.8 4,688.0 123.5 4,818.6 1,093.2 2,259.7 409.2 556.6 444.9 54.9 1,155.7 224.8 993.6 82.6 2,953.8 RELATION OF LIABILITIES TO F I N A N C I A L ASSETS 35 Total credit market debt 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Other liabilities Official foreign exchange Treasury currency and special drawing rights certificates Life insurance reserves Pension fund reserves Interbank claims Deposits at financial institutions Checkable deposits and currency Small time and savings deposits Large time deposits Money market fund shares Security repurchase agreements Foreign deposits Mutual fund shares Security credit Trade debt Taxes payable Miscellaneous 25,188.3 26,577.2 28,579.6 30,303.0 27,663.7 28,579.6 28,822.3 29,191.8 29,786.8 30,303.0 30,721.8 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 55 Corporate equities 56 Household equity in noncorporate business 21.0 3,819.7 2,524.9 22.0 3,506.6 2,449.4 22.6 4,357.9 2,366.0 19.6 4,827.2 2,260.8 22.1 4,170.5 2,493.4 22.6 4,357.9 2,366.0 22.7 4,461.9 2,365.5 23.2 4,404.7 2,346.4 24.5 4,576.8 2,322.2 19.6 4,827.2 2,260.8 19.8 4,964.0 2,260.9 Floats not included in assets ( - ) 57 U.S. government checking deposits 58 Other checkable deposits 59 Trade credit 6.1 26.5 -159.7 15.0 28.9 -148.0 3.8 30.9 -138.5 6.8 32.5 -105.9 19.8 23.6 -157.7 3.8 30.9 -138.5 .9 29.5 -135.3 1.4 32.6 -149.5 4.0 23.3 -131.3 6.8 32.5 -105.9 3.4 22.2 -104.0 -4.3 -31.0 11.5 20.6 -251.1 -4.1 -32.0 -23.3 21.8 -247.3 -4.8 -4.2 -12.9 18.9 -458.5 -5.0 -9.9 -2.8 32.0 -558.3 -4.7 -4.7 -10.6 17.6 -300.6 -4.8 -4.2 -12.9 18.9 -458.5 -4.9 -1.8 -11.4 14.7 -458.1 -4.9 -4.0 5.8 20.9 -476.5 -5.0 -5.9 16.7 25.4 -527.9 -5.0 -9.9 -2.8 32.0 -558.3 -5.0 -7.5 41.4 29.2 -540.0 31,935.2 32,944.3 35,891.3 38,021.1 34,767.1 35,891.3 36,238.9 36,540.2 37,311.0 38,021.1 38,526.9 53 Total liabilities 60 61 62 63 64 Liabilities not identified as assets ( - ) Treasury currency Interbank claims Security repurchase agreements Taxes payable Miscellaneous 65 Total identified to sectors as assets 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.6 and L.7. For ordering address, see inside front cover. 2. Excludes corporate equities and mutual fund shares, Selected Measures 2.10 N O N F I N A N C I A L B U S I N E S S ACTIVITY A45 Selected Measures Monthly data seasonally adjusted, and indexes 1987=100, except as noted 1993 1992 1990 Measure 1991 1992 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June 1 1 Industrial production 106.0 104.1 106.5 107.5 108.4 108.9 109.3 109.9 110.1 110.4 r 110.3 r 110.1 Market groupings Products, total Final, total Consumer goods Equipment Intermediate Materials 105.5 107.0 103.4 112.1 101.2 106.8 103.1 105.3 102.8 108.9 96.5 105.5 105.6 108.2 105.2 112.7 97.6 107.9 107.1 110.1 106.4 115.4 97.8 108.1 107.8 107.1 116.7 98.1 109.3 108.2 111.5 107.5 117.2 98.3 110.0 108.5 111.9 107.6 118.1 98.2 110.4 109.2 112.4 108.5 118.0 99.3 110.9 109.5 112.7r 108.6r 118.7 r 99.6 110.9 109.5 112.8r 108.3 r 119.4 r 99.6 r 111.6 r 109.4 r 112.6 r 107.9* 119.5 99.6 111.6 109.1 112.2 107.1 119.6 99.5 111.6 106.1 103.7 106.9 108.0 108.9 109.2 109.9 110.5 110.8r 111.3 r 111.2' 110.8 81.1 77.8 78.8 ? 3 4 5 6 7 Industry groupings 8 Manufacturing 9 Capacity utilization, manufacturing (percent) 2 3 111.0 79.2 79.7 79.8 80.3 80.5 80.6 80.9* 80.7 r 80.3 r 104.0 92.0 90.0 100.0 95.0 94.0 94.0 91.0 104.0 106.7 93.2 94.3 93.9 107.0 93.2 94.3 94.1 111.4 136.6 132.3 118.0 138.2 131.9 107.1 93.2 94.4 94.3 111.6 137.4 133.1 117.2 138.8 132.0 107.4 93.5 94.5 94.5 111.9 137.5 132.9 117.8 139.0 131.9 107.5 93.3 94.4 94.4 112.0 138.4 132.8 117.8 140.0 130.5 107.7 93.1 94.0 94.0 112.4 r 138.5 133.3 118.1 140.1 133.0* 107.9 93.2 93.8 93.8 112.6 139.3 134.6 118.0 140.9 133.5r 107.9 92.9 93.5 93.5 112.7 n.a. n.a. n.a. n.a. 134.0 141.9 123.8 142.6 124.2 143.1 124.5r 143.6 124.6 144.0 125.3 144.2 125.7 144.4 125.6 95.3 89.7 94.5 11 Nonagricultural employment, total 4 Goods-producing, total 17 Manufacturing, total 13 Manufacturing, production workers . . . 14 15 Service-producing 16 Personal income, total Wages and salary disbursements 17 Manufacturing 18 19 Disposable personal income 20 Retail sales 6 107.7 101.2 100.6 100.2 109.8 122.7 121.3 113.5 122.9 120.2 106.2 96.6 97.1 96.3 109.3 127.0 124.4 113.6 128.0 121.3 106.4 94.9 95.8 95.3 110.0 133.0 129.0 115.4 134.7 127.l r 135.3 130.5 116.5 137.0 130.7 106.8 93.2 94.3 94.0 111.2 135.3 131.2 116.0 136.8 130.5 Prices7 71 Consumer (1982-84=100) 22 Producer finished goods (1982=100) 130.7 119.2 136.2 121.7 140.3 123.2 141.8 124.4 142.0 124.0 10 Construction contracts 111.0 1. A major revision of the industrial production index and the capacity utilization rates was released in April 1990. See "Industrial Production: 1989 Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. 2. Ratio of index of production to index of capacity. Based on data from the Federal Reserve, DRI McGraw-Hill, U.S. 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 Co., F.W. Dodge Division. 4. Based on data from U.S. Department of Labor, Employment and Earnings. Series covers employees only, excluding personnel in the armed forces. 5. Based on data from U.S. Department of Commerce, Survey of Current Business. 2.11 6. Based on data from U.S. Department of Commerce, Survey of Current Business. 7. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics, Monthly Labor Review. NOTE. Basic data (not indexes) for series mentioned in notes 4, 5,and 6, and indexes for series mentioned in notes 3 and 7 can also be found in the Survey of Current Business. Figures for industrial production for the latest month are preliminary, and many figures for the three months preceding the latest month have been revised. See "Recent Developments in Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pp. 411-35. LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted except as noted 1993 1992 Category 1990 1991 1992 Nov. Dec. Jan. Feb. Mar. Apr. May r June HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 ? Labor force 1 Civilian labor force 3 4 5 6 7 8 Nonagricultural industries Agriculture Unemployment Number Rate (percent of civilian labor force) Not in labor force — 189,686 191,329 193,142 193,847 194,026 194,159 194,298 194,456 194,618 194,767 194,933 126,424 124,787 126,867 125,303 128,548 126,982 128,896 127,365 129,108 127,591 128,598 127,083 128,839 127,327 128,926 127,429 128,833 127,341 129,615 128,131 129,604 128,127 114,728 3,186 114,644 3,233 114,391 3,207 114,855 3,209 115,049 3,262 114,879 3,191 115,335 3,116 115,483 3,082 115,356 3,060 116,203 3,070 116,195 3,024 6,874 5.5 63,262 8,426 6.7 64,462 9,384 7.4 64,594 9,301 7.3 64,951 9,280 7.3 64,918 9,013 7.1 65,561 8,876 7.0 65,459 8,864 7.0 65,530 8,925 7.0 65,785 8,858 6.9 65,152 8,908 7.0 65,329 109,782 108,310 108,434 108,921 109,079 109,235 109,539 109,565 109,820 r 110,035 110,048 19,117 710 5,133 5,808 25,877 6,729 28,130 18,304 18,455 691 4,685 5,772 25,328 6,678 28,323 18,380 18,192 635 4,594 5,741 25,120 6,672 28,903 18,578 17,917 616 4,462 5,699 25,466 6,569 29,430 18,762 17,913 613 4,459 5,707 25,522 6,575 29,524 18,766 17,936 611 4,454 5,719 25,609 6,578 29,573 18,755 17,954 600 4,515 5,725 25,726 6,577 29,665 18,777 17,935 600 4,481 5,724 25,707 6,574 29,756 18,788 17,863R 600R 4,517 5,720* 25,758R 6,585R 29,977R 18,800* 17,820 602 4,572 5,723 25,809 6,590 30,096 18,823 17,767 595 4,566 5,718 25,835 6,587 30,152 18,828 ESTABLISHMENT SURVEY DATA 9 10 11 17 N 14 15 16 17 Nonagricultural payroll employment 3 Manufacturing Mining Contract construction Transportation and public utilities Trade Finance Service Government 1. Persons sixteen years of age and older, including Resident Armed Forces. Monthly figures are based on sample data collected during the calendar week that contains the twelfth day; annual data are averages of monthly figures. By definition, seasonality does not exist in population figures. 2. Includes self-employed, unpaid family, and domestic service workers. 3. Includes all full- and part-time employees who worked during, or received pay for, the pay period that includes the twelfth day of the month; excludes proprietors, self-employed persons, household and 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. SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings. A46 Domestic Nonfinancial Statistics • September 1993 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1992 1993 1993 Series Q3 Q4 Ql r Q2 Output (1987-100) Q3 Q4 Ql Q2 Capacity (percent of 1987 output) Q3 Q4 Qlr Q2 Capacity utilization rate (percent) 1 Total industry 106.5 108.3 109.7 110.3 133.7 134.2 134.8 135.3 79.7 80.7 81.4 2 Manufacturing 107.0 108.7 110.4 111.1 136.0 136.6 137.2 137.8 78.7 79.6 80.5 80.6 3 4 Primary processing Advanced processing 103.7 108.5 104.7 106.4 112.3 106.8 113.1 126.4 140.6 126.6 141.3 126.8 142.1 127.1 142.9 82.1 77.2 82.7 78.3 83.9 79.0 84.0 79.2 5 6 7 8 9 10 11 12 13 Durable goods Lumber and products Primary metals Iron and steel Nonferrous Nonelectrical machinery Electrical machinery Motor vehicles and parts Aerospace and miscellaneous transportation equipment 108.3 96.0 99.7 103.5 94.5 110.8 113.6 99.7 105.0 109.1 99.3 137.1 127.1 120.6 114.6 97.0 104.2 108.3 98.5 143.8 129.1 141.9 112.4 125.3 130.4 118.3 142.6 112.5 125.0 129.9 143.4 118.2 162.1 118.1 151.3 152.9 152.6 154.5 163.7 154.1 155.8 76.3 85.4 79.6 79.4 79.8 79.0 80.0 67.7 77.7 87.6 160.6 144.1 112.7 124.9 130.0 117.9 165.5 155.7 156.8 72.1 79.2 88.5 84.1 84.1 84.1 83.8 82.5 77.4 79.5 86.1 83.4 83.4 83.5 86.9 82.9 75.7 99.5 97.7 95.7 93.0 135.7 135.8 135.7 135.5 73.3 72.0 70.5 68.6 14 15 16 17 18 19 Nondurable goods Textile mill products Paper and products Chemicals and products Plastics materials Petroleum products 105.4 105.2 106.1 105.2 107.9 116.9 106.5 106.8 128.7 104.8 116.6 112.8 129.6 116.9 122.5 144.4 129.5 115.9 130.1 117.1 122.9 145.4 115.7 81.9 90.3 89.2 80.4 86.2 85.9 82.1 106.2 110.0 129.1 116.7 122.1 143.5 90.1 88.4 81.4 82.8 89.7 82.2 90.8 89.8 80.9 86.2 89.9 89.5 91.7 81.2 86.4 90.7 111.7 132.2 129.0 111.5 132.5 129.4 86.9 84.5 86.4 87.4 87.1 89.0 86.3 87.8 89.3 86.6 87.1 88.9 126.8 120.9 103.6 108.6 114.7 110.5 20 Mining 21 Utilities 22 Electric 110.6 98.5 101.5 105.0 96.7 132.4 124.0 111.4 106.6 100.2 104.2 97.5 110.9 97.9 114.7 114.3 110.6 118.6 116.9 111.7 104.2 118.0 104.9 121.7 142.6 128.3 116.6 96.5 96.5 115.4 115.1 112.3 131.4 127.9 116.0 115.2 1973 1975 Previous cycle High Low High Low Latest cycle 3 High Low 128.8 116.2 112.0 131.8 128.5 112.6 124.9 129.8 1992 June 81.2 80.8 81.8 81.7 81.2 82.1 1993 Jan. Feb. Mar/ Apr/ May r June p 81.2 Capacity utilization rate (percent) 1 Total industry 99.0 82.7 87.3 71.8 84.8 78.3 79.5 81.2 81.5 81.6 81.7 81.5 2 Manufacturing 99.0 82.7 87.3 70.0 85.1 76.6 78.6 80.3 80.5 80.6 80.9 80.7 80.3 Primary processing Advanced processing 99.0 99.0 82.7 82.7 89.7 86.3 66.8 71.4 89.1 83.3 77.9 76.1 82.2 77.0 83.5 78.9 84.3 79.0 83.8 79.3 84.2 79.5 84.1 79.2 83.8 78.8 5 6 7 8 9 10 11 12 13 Durable goods Lumber and products Primary metals Iron and steel Nonferrous Nonelectrical machinery Electrical machinery Motor vehicles and parts Aerospace and miscellaneous transportation equipment. 99.0 99.0 99.0 99.0 99.0 99.0 99.0 99.0 82.7 82.7 82.7 82.7 82.7 82.7 82.7 82.7 86.9 87.6 102.4 110.4 90.5 92.1 89.4 93.0 65.0 60.9 46.8 38.3 62.2 64.9 71.1 44.5 83.9 93.3 92.9 95.7 88.9 83.7 84.9 84.5 73.8 76.8 74.3 72.3 75.9 73.0 76.8 57.9 76.1 83.5 80.6 79.4 82.3 77.6 79.3 69.1 78.9 88.2 82.3 82.4 82.2 82.8 82.0 77.7 79.4 90.4 86.5 87.0 85.9 83.5 82.5 77.5 79.5 87.0 83.4 82.9 84.3 85.0 83.1 76.9 79.8 86.5 83.5 83.5 83.6 86.4 82.9 77.3 79.6 86.8 83.4 83.2 83.6 86.9 83.1 75.9 79.1 85.0 83.4 83.4 83.4 87.3 82.7 73.8 99.0 82.7 81.1 66.9 88.3 78.1 74.2 71.2 70.6 69.8 69.3 68.7 67.9 14 15 16 17 18 19 Nondurable goods Textile mill products Paper and products Chemicals and products Plastics materials Petroleum products 99.0 99.0 99.0 99.0 99.0 99.0 82.7 82.7 82.7 82.7 82.7 82.7 87.0 91.7 94.2 85.1 90.9 89.5 76.9 73.8 82.0 70.1 63.4 68.2 86.8 92.1 94.9 85.9 97.0 88.5 80.4 78.7 86.0 78.5 75.5 84.2 81.9 89.1 89.5 80.9 86.3 87.2 82.2 91.5 88.8 81.1 86.0 89.0 82.1 90.8 90.1 80.4 85.3 90.3 82.2 90.1 90.6 81.3 87.4 90.4 82.4 89.1 92.2 81.1 87.7 90.1 82.1 90.0 91.8 81.2 85.7 91.4 81.8 89.3 91.3 81.3 85.9 90.6 99.0 99.0 99.0 82.7 82.7 82.7 96.6 88.3 88.3 80.6 76.2 78.7 87.0 92.6 94.8 86.8 83.4 87.4 86.3 83.9 85.8 87.9 85.4 87.7 85.8 88.9 90.3 85.3 89.0 90.0 86.4 86.8 88.6 86.9 86.7 88.5 86.4 87.8 89.8 3 4 20 Mining 21 Utilities Electric 22 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For ordering address, see inside front cover. For a detailed description of the series, see "Recent Developments in Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pp. 411-35. See also "Industrial Production Capacity and Capacity Utilization Since 1987," Federal Bulletin, vol. 79, (June 1993), pp. 590-605. 2. Monthly highs, 1978 through 1980; monthly lows, 1982. 3. Monthly highs, 1988-89; monthly lows, 1990-91. Reserve Selected Measures 2.13 INDUSTRIAL PRODUCTION A47 Indexes and Gross Value1 Monthly data seasonally adjusted Group 1987 proportion 1993 1992 1992 avg. June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. r Apr. r May r June p Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 106.5 106.0 106.8 106.6 106.2 107.5 108.4 108.9 109.3 109.9 110.1 110.4 110.3 110.1 105.7 108.1 104.9 102.8 98.8 95.3 81.2 119.8 104.6 106.3 109.7 101.7 107.4 105.5 105.0 95.1 117.3 100.1 106.3 104.1 107.2 105.9 108.9 105.1 101.9 99.5 96.0 77.0 128.8 105.3 104.0 107.1 110.1 106.4 104.1 103.1 101.5 78.5 141.3 105.9 104.9 110.8 98.5 105.8 107.1 105.9 94.5 121.1 100.1 107.8 97.7 104.1 106.0 107.0 94.0 116.5 100.2 105.6 98.9 108.2 105.3 108.1 104.4 100.9 97.3 93.5 77.9 120.4 103.7 104.1 112.9 98.2 102.9 105.3 104.9 94.3 118.5 100.4 104.6 103.5 105.1 109.8 111.6 107.1 105.7 104.1 102.9 79.6 143.3 106.0 107.1 110.8 103.7 107.1 107.5 105.2 95.9 123.3 100.9 112.0 107.7 113.6 108.2 111.5 107.5 107.9 108.7 111.7 86.9 154.6 103.8 107.2 110.5 105.4 106.6 107.4 104.8 96.0 121.7 100.9 114.4 106.1 117.5 108.5 111.9 107.6 110.9 112.7 116.8 86.6 169.1 105.8 109.3 116.0 105.5 108.0 106.7 104.6 95.7 122.4 100.2 109.5 106.5 110.7 109.2 112.4 108.5 111.3 111.9 114.6 90.2 156.9 107.4 110.7 117.6 106.7 109.5 107.7 105.5 95.0 121.1 101.8 115.5 108.9 118.0 109.5 112.7 108.6 111.5 111.2 113.4 90.5 153.1 107.5 111.7 125.0 104.5 108.9 107.7 104.3 94.6 123.7 102.1 116.0 107.1 119.5 109.5 112.8 108.3 112.1 112.1 114.3 90.2 155.9 108.5 112.0 123.9 105.3 109.6 107.2 104.6 94.8 123.1 101.7 111.7 106.6 113.6 109.4 112.6 107.9 110.8 109.3 110.1 86.5 150.9 108.1 112.1 122.4 108.5 108.7 107.0 104.4 94.6 122.7 101.2 112.6 109.0 113.9 109.1 112.2 107.1 108.4 106.0 104.9 83.5 142.1 107.9 110.5 118.2 107.0 108.3 106.7 103.7 94.1 122.3 101.4 112.9 106.6 115.3 2 Products 3 Final products 4 Consumer goods, total 5 Durable consumer goods 6 Automotive products 7 Autos and trucks 8 Autos, consumer 9 Trucks, consumer 10 Auto parts and allied g o o d s . . 11 Other 12 Appliances, A/C, and T V — 13 Carpeting and furniture 14 Miscellaneous home goods . . 15 Nondurable consumer goods 16 Foods and tobacco 17 Clothing Chemical products 18 19 Paper products 20 Energy 21 Fuels 22 Residential utilities 60.8 46.0 26.0 5.6 2.5 1.5 .9 .6 1.0 3.1 .8 .9 1.4 20.4 9.1 2.6 3.5 2.5 2.7 .7 2.0 105.6 108.2 105.2 102.5 99.4 96.9 79.0 127.9 103.7 105.2 110.4 99.9 105.6 105.9 104.7 95.0 118.7 100.8 108.3 104.7 109.6 104.8 107.1 104.0 102.0 99.0 96.5 83.5 119.2 103.2 104.6 109.6 98.0 106.0 104.6 103.3 94.5 117.6 100.6 105.2 103.8 105.8 23 24 25 26 27 28 29 30 31 32 33 Equipment Business equipment Information processing and related . Office and computing Industrial Transit Autos and trucks Other Defense and space equipment Oil and gas well drilling Manufactured homes 20.0 13.9 5.6 1.9 4.0 2.5 1.2 1.9 5.4 .6 .2 112.7 123.2 134.7 168.3 108.5 137.1 117.9 104.7 85.9 78.3 99.7 111.6 121.9 134.3 167.3 108.7 133.9 117.2 99.2 86.5 73.1 90.1 112.7 123.7 137.4 171.8 109.1 135.3 114.2 100.2 85.1 73.8 101.3 114.3 126.1 138.5 173.7 109.2 143.3 117.3 105.6 84.5 75.6 96.9 113.5 125.0 138.2 178.3 109.6 134.5 114.7 107.3 84.4 76.3 100.9 115.4 127.5 142.2 183.1 110.1 137.4 121.7 108.8 83.5 82.7 110.4 116.7 129.0 142.9 184.5 112.0 140.4 123.9 110.7 83.2 86.4 118.5 117.2 129.6 143.2 186.4 112.3 144.1 131.4 109.2 82.5 91.2 128.6 118.1 131.2 144.4 192.0 113.1 146.7 136.7 112.6 82.0 89.0 129.4 118.0 131.7 146.1 198.0 112.2 146.5 136.8 113.4 81.5 77.9 127.1 118.7 133.4 149.1 203.3 113.7 145.0 135.8 114.9 80.7 71.1 116.2 119.4 134.4 150.4 209.1 114.6 144.2 136.2 117.3 80.5 72.4 114.9 119.5 134.7 152.4 214.9 114.7 141.2 133.1 116.4 79.8 75.1 112.1 119.6 134.9 153.9 220.3 114.6 136.9 127.3 117.9 78.8 82.4 112.3 34 35 36 Intermediate products, total Construction supplies Business supplies 14.7 6.0 8.7 97.6 93.8 8.3 97.7 93.6 100.6 98.6 94.3 101.4 97.0 94.1 99.0 96.9 93.0 99.5 97.8 94.7 99.9 98.1 95.1 100.0 98.3 94.5 100.8 98.2 94.8 100.5 99.3 97.5 100.5 99.6 96.4 101.8 99.6 95.9 102.0 99.6 96.9 101.4 99.5 96.3 101.6 37 Materials 38 Durable goods materials 39 Durable consumer parts 40 Equipment parts 41 Other 42 Basic metal materials 43 Nondurable goods materials 44 Textile materials 45 Pulp and paper materials 46 Chemical materials 47 Other 48 Energy materials 49 Primary energy 50 Converted fuel materials 39.2 19.4 4.2 7.3 7.9 2.8 9.0 1.2 1.9 3.8 2.1 10.9 7.2 3.7 107.9 108.9 3.9 116.5 106.0 108.3 110.9 102.8 109.9 114.2 110.4 103.4 99.7 110.6 107.8 108.7 101.5 116.6 105.4 107.8 111.5 101.8 110.8 114.8 111.6 103.1 99.6 109.9 108.5 109.3 100.6 117.7 106.3 108.7 111.5 107.7 110.3 114.1 110.0 104.4 100.4 112.3 107.6 108.9 101.4 117.1 105.5 107.7 110.7 101.6 108.7 114.5 110.5 102.5 99.4 108.7 107.4 107.6 98.5 116.2 104.6 105.8 111.7 103.3 112.3 114.5 110.5 103.6 99.6 111.4 108.1 109.7 101.8 118.3 106.2 108.3 110.7 102.7 109.1 114.4 109.7 103.0 99.4 110.0 109.3 104.3 119.3 107.4 109.8 112.0 103.4 110.2 115.6 112.0 103.9 100.2 111.I 110.0 111.9 107.5 119.7 107.5 108.8 111.5 102.9 110.7 114.6 111.3 105.1 101.3 112.4 110.4 113.3 110.8 120.4 108.6 110.4 112.4 104.2 110.7 114.9 114.1 103.4 100.4 109.1 110.9 114.2 111.8 121.0 109.7 113.2 112.1 103.2 111.9 114.6 112.5 103.8 98.3 114.6 110.9 114.1 112.2 121.3 108.9 109.9 112.8 104.2 112.8 115.6 112.6 103.5 97.4 115.4 111.6 114.8 113.0 122.3 109.4 110.3 113.8 103.0 115.4 116.0 114.4 103.8 99.9 111.5 111.6 115.0 113.0 123.0 109.3 111.0 111.6 114.9 113.0 123.3 108.9 110.6 113.9 101.6 114.0 118.1 112.7 103.5 99.0 112.2 97.3 95.3 106.6 106.6 106.1 106.1 107.0 107.0 106.7 106.7 106.3 106.4 107.4 107.5 108.4 108.4 108.6 108.6 108.9 108.7 109.5 109.3 109.7 109.6 110.0 109.8 110.1 109.9 110.0 109.8 97.5 105.0 104.6 105.3 105.0 104.5 105.7 106.6 107.1 107.3 107.8 107.8 108.0 107.8 107.4 24.5 23.3 105.7 104.8 104.6 103.9 105.5 104.7 105.7 105.0 105.1 104.3 106.8 105.9 107.4 106.6 107.3 106.8 107.0 107.4 108.1 107.7 108.2 107.7 107.9 107.9 107.7 107.3 107.2 106.4 12.7 123.7 122.3 124.5 126.9 125.9 128.0 129.5 129.5 130.7 131.3 133.2 134.2 134.8 135.5 120.6 113.6 121.6 113.7 121.8 114.5 121.2 114.6 120.5 114.6 111.0 111.1 111.0 111.1 111.1 113.7 102.1 114.7 117.3 112.7 103.6 99.9 SPECIAL AGGREGATES 51 Total excluding autos and trucks 52 Total excluding motor vehicles and p a r t s . . 53 Total excluding office and computing machines 54 Consumer goods excluding autos and trucks 55 Consumer goods excluding energy 56 Business equipment excluding autos and trucks 57 Business equipment excluding office and computing equipment 58 Materials excluding energy 12.0 28.4 115.7 109.5 114.3 109.5 115.6 110.0 118.1 109.4 116.1 108.8 118.1 110.0 119.7 111.4 120.1 111.8 121.0 113.0 A48 Domestic Nonfinancial Statistics • September 1993 2.13 INDUSTRIAL PRODUCTION r ro p SIC code 2 1987 proportion Indexes and Gross Value1—Continued 1992 1993 1992 avg. June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. r Apr/ May r June p Index (1987 = 100) MAJOR INDUSTRIES 59 Total index 100.0 106.5 106.0 106.8 106.6 106.2 107.5 108.4 108.9 109.3 109.9 110.1 110.4 110.3 110.1 60 Manufacturing 61 Primary processing 62 Advanced processing 84.3 27.1 57.1 106.9 103.8 108.3 106.5 103.7 107.9 107.1 104.3 108.4 107.0 103.5 108.7 106.8 103.3 108.4 108.0 104.1 109.9 108.9 105.1 110.7 109.2 105.0 111.3 109.9 105.8 111.9 110.5 106.9 112.2 110.8 106.4 112.9 111.3 106.9 113.4 111.2 106.9 113.2 110.8 106.7 112.8 63 64 65 66 Durable goods Lumber and p r o d u c t s . . . "24 Furniture and fixtures... 25 Clay, glass, and stone products 32 Primary metals 33 Iron and steel 331,2 Raw steel Nonferrous 333-6,9 Fabricated metal products 34 Industrial and commercial machinery and computer equipment . 35 Office and computing machines 357 Electrical machinery 36 Transportation equipment 37 Motor vehicles and parts 371 Autos and light trucks Aerospace and miscellaneous transportation equipment... 3 7 2 - 6,9 Instruments 38 Miscellaneous 39 46.5 2.1 1.5 108.1 96.4 99.0 107.6 93.8 94.2 108.2 96.6 97.5 108.5 96.6 99.2 108.1 94.7 100.5 109.8 97.8 100.4 110.9 99.8 102.3 111.8 98.0 103.9 112.9 99.3 105.2 113.8 101.8 106.0 114.1 98.0 107.3 114.8 97.4 108.1 114.7 97.9 107.8 114.3 95.8 108.3 2.4 3.3 1.9 .1 1.4 96.0 101.1 104.7 101.2 96.1 95.6 101.2 103.8 101.6 97.5 96.8 100.6 104.7 101.7 95.0 95.7 100.5 103.8 99.1 96.1 96.5 98.0 102.0 98.9 92.4 96.8 100.5 104.1 99.8 95.6 97.6 101.6 103.6 102.8 98.7 98.0 102.4 107.4 104.6 95.7 97.0 102.8 107.0 103.4 97.1 98.9 108.0 112.9 105.9 101.4 98.6 104.2 107.6 102.0 99.4 99.8 104.3 108.4 102.6 98.6 98.8 104.1 108.2 105.1 98.5 98.8 104.1 108.4 5.4 96.7 97.1 97.0 97.0 96.5 97.5 97.6 97.8 99.8 99.7 100.3 101.0 100.2 100.3 8.5 124.8 123.8 125.7 126.9 127.9 130.6 132.8 133.8 135.0 136.7 139.6 142.5 143.9 145.0 2.3 6.9 168.3 119.8 167.3 119.3 171.8 120.7 173.7 120.6 178.3 121.5 183.1 122.6 184.5 124.4 186.4 124.8 192.0 125.8 198.0 127.1 203.3 128.5 209.1 128.6 214.9 129.4 220.3 129.2 9.9 102.6 102.7 101.4 102.4 100.5 103.0 103.6 106.3 108.4 107.8 106.9 107.0 105.6 103.6 4.8 104.8 104.8 103.1 105.0 102.6 108.0 109.9 116.2 120.9 120.7 120.1 120.9 119.0 116.0 2.2 101.4 102.7 100.8 99.7 97.9 104.1 105.4 114.4 118.2 117.8 116.9 117.5 113.1 108.1 5.1 5.1 1.3 100.6 104.2 109.7 100.8 104.4 109.7 99.8 104.9 111.6 100.0 104.3 109.1 98.6 103.7 108.7 98.3 103.7 110.5 97.7 103.6 111.4 97.1 103.3 111.8 96.7 103.0 110.9 95.8 102.2 111.9 94.6 103.3 112.6 93.9 102.5 114.5 93.2 102.3 113.8 91.9 101.6 112.8 Nondurable goods Foods Tobacco products Textile mill p r o d u c t s . . . . Apparel products Paper and products Printing and publishing.. Chemicals and products. Petroleum products Rubber and plastic products Leather and products . . . "20 21 22 23 26 27 28 29 37.8 8.8 1.0 1.8 2.3 3.6 6.5 8.8 1.3 105.4 106.0 99.2 104.7 92.3 108.2 95.0 115.0 102.0 105.2 105.4 96.4 103.8 91.7 108.7 95.6 114.9 101.8 105.7 105.9 101.5 107.0 92.7 109.1 95.7 114.6 101.5 105.2 106.3 115.5 103.5 91.3 107.1 93.5 114.4 98.0 105.2 105.6 101.7 105.1 91.5 109.5 94.1 115.2 101.1 105.8 106.8 102.4 103.5 91.7 107.3 94.5 116.2 105.3 106.4 106.4 101.9 106.0 92.9 108.2 94.2 117.7 103.9 106.0 106.2 96.1 106.0 92.7 108.3 94.7 116.7 103.4 106.4 105.9 100.5 106.9 93.1 108.6 94.7 116.8 103.2 106.4 106.9 99.3 106.2 92.5 110.4 94.0 116.2 104.7 106.6 106.7 92.4 105.4 92.1 111.1 94.7 117.6 104.7 107.0 106.8 96.2 104.3 92.0 113.2 94.9 117.7 104.3 106.9 106.1 98.1 105.4 91.6 112.8 94.5 118.1 105.7 106.6 105.3 98.0 104.7 91.0 112.3 94.8 118.4 104.7 30 31 3.2 .3 109.7 92.6 109.7 92.3 110.7 93.6 110.7 92.0 108.5 93.8 109.9 95.1 111.3 96.6 111.3 96.7 113.6 97.1 112.7 99.0 112.9 99.1 113.4 100.2 112.9 98.0 112.2 96.2 "lO 11,12 13 14 8.0 .3 1.2 5.8 .7 97.6 161.7 105.5 92.6 93.8 97.1 157.8 101.9 93.1 92.7 98.5 156.5 108.0 93.6 94.1 97.0 165.5 103.9 91.9 93.8 97.1 159.8 103.6 92.7 91.9 97.6 168.1 103.8 92.7 93.6 97.8 171.6 103.5 92.8 94.4 98.2 158.1 107.9 93.4 92.6 98.3 167.7 108.2 92.7 93.8 95.9 163.0 101.7 90.9 95.2 95.3 158.2 102.3 90.4 93.4 96.4 163.2 108.2 90.5 92.4 96.9 170.7 103.8 91.5 94.3 96.3 167.6 99.5 91.8 93.6 7.7 6.1 1.6 112.0 111.6 113.2 110.0 109.5 112.0 111.2 110.8 112.8 110.4 110.0 112.1 111.2 110.9 112.0 112.7 112.6 113.2 114.7 114.1 117.3 116.8 116.4 118.2 112.8 112.9 112.4 117.5 116.5 121.4 117.8 116.3 123.3 115.0 114.5 116.7 114.9 114.6 116.2 116.4 116.3 116.9 79.5 107.0 106.6 107.4 107.2 107.1 108.0 108.8 108.8 109.3 109.8 110.2 110.7 110.7 110.5 81.9 105.1 104.8 105.3 105.1 104.8 105.9 106.7 107.0 107.6 108.0 108.1 108.5 108.2 107.7 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 Mining 93 Metal 94 Coal 95 Oil and gas extraction 96 Stone and earth minerals . . 97 Utilities 98 Electric 99 Gas 49I,3PT 492,3PT 98!2 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 101 Manufacturing excluding office and computing machines Gross value (billions of 1987 dollars, annual rates) MAJOR M A R K E T S 102 Products, total 1,707.0 1,806.4 1,794.6 1,806.8 1,802.7 1,799.9 1,835.6 1,846.7 1,857.5 1,864.9 1,880.2 1,880.3 1,881.5 1,878.0 1,868.4 103 Final 104 Consumer goods 105 Equipment 106 Intermediate 1,314.6 1,420.1 1,408.8 1,416.7 1,417.8 1,415.7 1,448.1 1,457.1 1,466.8 1,476.4 1,485.7 1,484.3 1,486.0 1,482.8 1,473.2 866.6 913.0 906.6 912.6 908.1 905.1 928.4 931.6 936.3 940.0 949.4 946.1 945.1 934.5 942.8 448.0 507.1 502.2 504.1 509.7 510.6 519.7 525.5 530.5 536.5 536.3 538.2 540.8 540.0 538.7 392.5 386.4 385.9 385.0 390.1 384.2 387.4 389.6 390.7 388.4 394.5 395.5 396.0 395.2 395.2 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For ordering address, see inside front cover. A revision of the industrial production index and the capacity utilization rates was released in May 1993. See "Industrial Production, Capacity, and Capacity Utilization since 1987," Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605. 2. Standard industrial classification. Selected Measures 2.14 A49 HOUSING A N D CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1993 1992 1990 Item 1991 1992 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. r Apr. r May Private residential real estate activity (thousands of units except as noted) N E W UNITS Permits authorized One-family Two-or-more-family Started One-family Two-or-more-family Under construction at end of period One-family Two-or-more-family Completed One-family Two-or-more-family Mobile homes shipped 1,111 794 317 1,193 895 298 711 449 262 1,308 966 342 188 949 754 195 1,014 840 174 606 434 173 1,091 838 253 171 1,095 911 184 1,200 1,030 169 612 473 140 1,158 964 194 210 1,081 885 196 1,229 1,038 191 633 479 154 1,133 945 188 202 1,120 918 202 1,218 1,045 173 637 485 152 1,128 942 186 217 1,141 954 187 1,226 1,079 147 645 493 152 1,137 964 173 228 1,136 963 173 1,226 1,089 137 641 498 143 1,229 1,002 227 244 1,196 1,037 159 1,286 1,133 153 644 501 143 1,227 1,016 211 266 1,157 972 185 1,171 1,051 120 641 506 135 1,136 980 156 267 1,141 957 184 1,180 1,036 144 641 508 133 1,241 1,049 192 262 1,034 871 163 1,124 987 137 635 502 133 1,108 995 113 247 1,101 925 176 1,206 1,059 147 639 507 132 1,198 1,070 128 241 1,121 919 202 1,254 1,110 144 647 513 134 1,125 986 139 230 Merchant builder activity in one-family units 14 Number sold 15 Number for sale at end of period 1 . 535 321 507 284 610 265 625 270 672 267 637 264 615 262 662 265 603 266 597 r 268 595 271 723 271 571 278 122.3 149.0 120.0 147.0 121.3 144.9 123.5 145.3 119.5 142.2 125.0 148.4 128.9 147.2 126.0 146.2 118.0 138.9 129.4r 149.4r 125.0 147.0 126.9 147.1 128.4 153.4 3,211 3,219 3,520 3,340 3,380 3,710 3,860 4,040 3,780 3,460 3,370 3,450 3,620 95.2 118.3 99.7 127.4 103.6 130.8 105.0 132.4 103.5 131.0 103.4 129.3 102.7 128.8 104.2 131.0 103.1 129.4 103.6 129.6 105.1 131.5 105.8 133.0 106.1 132.4 1 2 3 4 5 6 7 8 9 10 11 12 13 Price of units sold of dollars) 16 Median 17 Average (thousands EXISTING UNITS ( o n e - f a m i l y ) 18 Number sold Price of units said of dollars) 19 Median 20 Average (thousands Value of new construction (millions of dollars) 3 CONSTRUCTION 436,043R 453,820" 454,465 451,447 453,473 336,972 205,519 131,453 22,152 41,323 21,484 46,494 331,260 200,466 130,794 19,519 42,121 22,531 46,623 334,792 200,771 134,021 20,087 42,107 23,322 48,505 r 107,461r 109,900" 118,784 r 118,084" 116,097" 117,723" 121,073" 119,885" 115,786" 119,019" Public 2,621" 2,703" 2,557" 2,394" 2,503" 3,032" 2,502 2,504" 1,837 2,664 Military r 34,929" 35,546" 35,545" 33,408" 37,698" 33,411" 30,648" 33,009" 32,108" 32,026 Highway 5,732" 6,688" 6,441" 8,144" 6,148" 5,790" 5,918 r 5,497" 4,861 r 4,557 r Conservation and d e v e l o p m e n t . . . r 75,435" 74,537" 71,901" 75,493" 74,377" 75,936" 76,785" 76,619" 68,132 r 71,176 Other 117,493 2,586 33,413 7,112 74,382 120,187 2,416 34,012 5,916 77,843 118,681 22 Private 23 Residential 24 Nonresidential 25 Industrial buildings 26 Commercial buildings 27 Other buildings 28 Public utilities and other 29 30 31 32 33 403,439R r r 334,681 r 293,536 317,256 r 312,266" 317,448" 324,842" 328,196" 335,354" 335,484" 334,801" 182,856 157,837 187,820 r 187,297" 189,221" 194,578" 199,304" 206,417" 207,214" 205,730" 151,825 r 135,699" 129,436r 124,969" 128,227" 130,264" 128,892" 128,937" 128,270" 129,071" 20,720 18,899" 19,277" 19,400" 19,246" 19,961" 19,600" 20,484" 22,281 23,849 41,523 r 39,126" 40,398" 41,691" 41,143" 39,602" 41,414" 42,317" 48,482 62,866 r 21,494 21,139" 21,978" 21,418" 21,517" 20,900" 21,123" 21,564" 20,797 21,591 44,139" 45,699" 45,805" 46,574" 47,755" 46,986" 48,474" 46,133" 44,706" 21 Total put in place 442,142R 430,350" 442,565" 449,269" 455,239" 451,271" 43,5^ 1. Not at annual rates. 2. Not seasonally adjusted. 3. Recent data on value of new construction may not be strictly comparable with data for previous periods because of changes by the Census Bureau in its estimating techniques. For a description of these changes, see Construction Reports (C-30-76-5), issued by the Census Bureau in July 1976. SOURCE. Census Bureau estimates for all series except (1) mobile homes, which are private, domestic shipments as reported by the Manufactured Housing 433,545" 2,320 31,983 5,974 78,404 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 17,000 jurisdictions beginning in 1984. A50 2.15 Domestic Nonfinancial Statistics • September 1993 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 (annual rate) Item Index level, June 1993 1 19931 1993 1992 1992 June Change from 1 month earlier 1993 June Sept. Dec. Mar. June Feb. Mar. Apr. May June CONSUMER PRICES2 (1982-84=100) 1 All items 3.1 3.0 2.6 3.2 4.0 2.2 .3 .1 .4 .1 .0 144.4 2 3 Energy items 4 All items less food and energy 5 Commodities 6 Services .1 2.3 3.8 3.0 4.2 2.2 .6 3.3 2.0 4.0 3.2 1.2 2.5 1.8 2.9 1.4 1.9 3.8 1.5 4.7 2.6 3.1 4.3 4.6 4.4 1.4 -3.8 2.9 .6 4.1 .1 -.4 .5 .5 .4 .1 .1 .1 .2 .4 .2 .4 .3 .4 .4 -1.0 .2 .0 .3 -.4 -.2 .1 -.1 .2 140.4 106.5 151.8 134.9 161.5 1.4 1.9 -.3 3.3 -10.2 1.2 .6 3.9 -2.2 17.2 2.9 3.4 1.0 1.9 -4.0 1.4 2.2 ,4 r .ff 1.7 .3 .3 r .2 r .OF 1.3 .1 .<f .6 1.4 .1 .4 .2 .0 -.1 -.6 .2 .2 -.3 -.9 -.5 -.3 .2 125.6 125.4 80.4 139.7 131.2 .7 .6 .5 r .3 .2 .1 .2 -.2 -.2 .3 .1 117.0 123.6 -,2r ,4 r .y 2.5 -.6 1.8 .5 4.8 .4 -3.1 .2 .2 107.3 81.2 141.5 .7 PRODUCER PRICES (1982=100) 1.6 -1.8 3.3 3.0 1.9 -.7 1.7 1.8 1.3 4.3 -3.5 1.5 1.2 Intermediate materials 12 Excluding foods and feeds Excluding energy 13 1.0 .5 1.2 1.3 -2.1 -.3 5.3 4.3 .7 1.3 Crude materials 14 Foods 15 Energy 16 Other .0 3.9 1.9 -.1 1.4 9.5 -4.8 19.8 2.2 5.1 -17.8 1.9 1.1 -9.7 25.0 -.8 18.7 10.2 7 8 9 10 11 Finished goods Consumer foods Consumer energy Other consumer goods Capital equipment 1. Not seasonally adjusted. 2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence measure of homeownership. .0 .(f — 1.4r 2.0 r SOURCE. Bureau of Labor Statistics. Selected Measures 2.16 A51 GROSS DOMESTIC PRODUCT A N D INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1993 1992 Account 1990 1991 1992 Ql Q2 Q3 Q4 Ql GROSS DOMESTIC PRODUCT 1 Total 5,522.2 5,677.5 5,950.7 5,840.2 5,902.2 5,978.5 6,081.8 6,145.8 By source 2 Personal consumption expenditures 3 Durable goods 4 Nondurable goods 5 Services 3.748.4 464.3 1.224.5 2,059.7 3,887.7 446.1 1,251.5 2,190.1 4,095.8 480.4 1,290.7 2,324.7 4,022.8 469.4 1,274.1 2,279.3 4,057.1 470.6 1,277.5 2,309.0 4.108.7 482.5 1.292.8 2,333.3 4,194.8 499.1 1,318.6 2,377.1 4.234.7 498.8 1.320.8 2,415.1 799.5 793.2 577.6 201.1 376.5 215.6 721.1 731.3 541.1 180.1 360.9 190.3 770.4 766.0 548.2 168.4 379.9 217.7 722.4 738.2 531.0 170.1 360.8 207.2 773.2 765.1 550.3 170.3 380.0 214.8 781.6 766.6 549.6 166.1 383.5 217.0 804.3 794.0 562.1 167.0 395.1 231.9 844.0 809.0 573.8 168.0 405.8 235.2 6.3 3.3 -10.2 -10.3 4.4 2.2 -15.8 -13.3 8.1 6.4 15.0 9.7 10.3 6.2 34.9 32.6 -68.9 557.0 625.9 -21.8 598.2 620.0 -30.4 636.3 666.7 -8.1 628.1 636.2 -37.1 625.4 662.5 -36.0 639.0 675.0 -40.5 652.7 693.2 -49.4 649.4 698.9 17 Government purchases of goods and services . . 18 Federal 19 State and local 1,043.2 426.4 616.8 1,090.5 447.3 643.2 1,114.9 449.1 665.8 1,103.1 445.0 658.0 1,109.1 444.8 664.3 1,124.2 455.2 669.0 1,123.3 451.6 671.7 1,116.6 441.1 675.4 By major type of product 20 Final sales, total 21 Goods 22 Durable 23 Nondurable 24 Services 25 Structures 5,515.9 2,160.1 920.6 1,239.5 2,846.4 509.4 5.687.7 2.192.8 907.6 1,285.1 3,030.3 464.7 5,946.3 2.260.3 943.9 1.316.4 3,197.1 488.8 5,855.9 2,233.6 923.6 1,310.0 3,142.2 480.1 5.894.1 2.233.2 932.3 1,300.8 3,173.4 487.6 5.963.5 2,258.4 943.8 1.314.6 3,217.8 487.3 6,071.5 2,316.1 975.8 1,340.3 3,255.1 500.3 6,110.8 2,309.2 968.8 1,340.4 3,299.4 502.3 6.3 -.9 7.2 -10.2 -19.3 9.0 4.4 -3.5 7.9 -15.8 -19.3 3.5 8.1 9.5 -1.4 15.0 2.7 12.3 10.3 -6.9 17.2 34.9 17.8 17.2 4,877.5 4,821.0 4,922.6 4,873.7 4,892.4 4,933.7 4,990.8 4,999.9 4,468.3 4,544.2 4,743.4 4,679.4 4,716.5 4,719.6 4,858.0 4,914.2 r 3,583.7 2,963.9 569.6 2,394.3 619.8 307.6 312.2 3,628.4 2,999.8 578.2 2,421.6 628.6 312.0 316.5 428.4 380.4 48.1 441.9 389.0 52.9 6 Gross private domestic investment 7 Fixed investment 8 Nonresidential 9 Structures 10 Producers' durable equipment 11 Residential structures 12 13 Change in business inventories Nonfarm 14 Net exports of goods and services 15 Exports Imports 16 26 Change in business inventories 27 Durable goods 28 Nondurable goods MEMO 29 Total GDP in 1987 dollars NATIONAL INCOME 30 Total 3,291.2 2,742.9 514.8 2,228.0 548.4 277.4 271.0 3,390.8 2,812.2 543.5 2,268.7 578.7 290.4 288.3 3,525.2 2,916.6 562.5 2,354.1 608.6 302.9 305.7 3,476.3 2,877.6 554.6 2,323.0 598.7 299.4 299.2 3,506.3 2,901.3 561.4 2,339.9 605.0 301.5 303.6 3,534.3 2,923.5 564.3 2,359.1 610.8 302.9 307.9 38 Proprietors'income 1 . 39 Business and professional 40 Farm 1 366.9 325.2 41.7 368.0 332.2 35.8 404.5 364.9 39.5 393.6 353.6 40.1 398.4 359.9 38.5 397.4 365.9 31.5 41 Rental income of persons 2 -12.3 -10.4 4.7 -4.5 3.3 6.4 13.6 374.1 354.1 -9.7 29.7 428.5 389.4 1.0 38.1 424.2 r 393.0" -9.4 40.6 407.3 403.6 402.0 31 Compensation of employees 32 Wages and salaries 33 Government and government enterprises . . 34 Other 35 Supplement to wages and salaries 36 Employer contributions for social insurance 37 Other labor income 42 Corporate profits . . 43 Profits before tax 3 44 Inventory valuation adjustment 45 Capital consumption adjustment 361.7 355.4 -14.2 20.5 346.3 334.7 3.1 8.4 393.8 371.6 -7.4 29.5 384.0 366.1 -5.4 23.3 388.4 376.8 -15.5 27.0 46 Net interest 460.7 449.5 415.2 430.0 420.0 1 1. With inventory valuation and capital consumption adjustments. 2. With capital consumption adjustment. 3. For after-tax profits, dividends, and the like, see table 1.48. SOURCE. U.S. Department of Commerce, Survey of Current Business. 17.7 A52 2.17 Domestic Nonfinancial Statistics • September 1993 PERSONAL INCOME A N D SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1993 1992 1990 1991 1992 Ql Q2 Q3 Q4 Ql PERSONAL INCOME AND SAVING 1 Total personal income 4,664.2 4,828.3 5,058.1 4,980.5 5,028.9 5,062.0 5,160.9 5,237.6 2 Wage and salary disbursements 3 Commodity-producing industries 4 Manufacturing 5 Distributive industries 6 Service industries 7 Government and government enterprises 2,742.8 745.6 556.1 634.6 847.8 514.8 2,812.2 737.4 556.9 647.4 883.9 543.6 2,918.1 743.2 565.7 666.8 945.5 562.5 2,877.6 736.8 559.9 660.9 925.3 554.6 2,901.3 743.1 564.7 662.9 933.9 561.4 2,923.5 742.4 565.5 667.7 949.1 564.3 2,969.9 750.6 572.8 675.8 973.9 569.6 3,005.8 754.4 576.5 685.0 988.2 578.2 271.0 366.9 325.2 41.7 -12.3 140.3 694.5 685.8 352.0 288.3 368.0 332.2 35.8 -10.4 137.0 700.6 771.1 382.0 305.7 404.5 364.9 39.5 4.7 139.3 670.2 866.1 414.1 299.2 393.6 353.6 40.1 -4.5 133.9 684.8 842.7 405.7 303.6 398.4 359.9 38.5 3.3 136.6 675.2 859.7 412.1 307.9 397.4 365.9 31.5 6.4 141.0 663.2 874.1 417.1 312.2 428.4 380.4 48.1 13.6 145.8 657.8 888.0 421.6 316.5 441.9 389.0 52.9 17.7 149.9 656.4 909.9 434.1 8 9 10 11 12 13 14 15 16 17 Other labor income Proprietors' income Business and professional Farm' Rental income of persons Dividends Personal interest income Transfer payments Old-age survivors, disability, and health insurance benefits . . . LESS: Personal contributions for social insurance 18 EQUALS: Personal income 224.8 238.4 250.6 246.8 249.3 251.5 254.8 260.4 4,664.2 4,828.3 5,058.1 4,980.5 5,028.9 5,062.0 5,160.9 5,237.6 621.3 618.7 627.3 619.6 617.1 628.8 643.6 656.0 20 EQUALS: Disposable personal income 4,042.9 4,209.6 4,430.8 4,360.9 4,411.8 4,433.2 4,517.3 4,581.7 21 LESS: Personal outlays 3,867.3 4,009.9 4,218.1 4,146.3 4,179.5 4,229.9 4,316.9 4,358.8 22 EQUALS: Personal saving 175.6 199.6 212.6 214.6 232.3 203.3 200.4 222.9 19,513.0 13,043.6 14,068.0 19,077.1 12,824.1 13,886.0 19,271.4 12,973.9 14,035.0 19,158.5 12,930.2 14,017.0 19,181.8 12,893.3 14,021.0 19,288.4 12,973.3 13,998.0 19.456.3 13.098.4 14,105.0 19,444.3 13,092.1 14,165.0 4.3 4.7 4.8 4.9 5.3 4.6 4.4 4.9 19 LESS: Personal tax and nontax payments MEMO Per capita (1987 dollars) 23 Gross domestic product 24 Personal consumption expenditures 25 Disposable personal income 26 Saving rate (percent) GROSS SAVING 27 Gross saving 718.0 708.2 686.3 677.5 682.9 696.9 687.9 732.8R 28 Gross private saving 854.1 901.5 968.8 950.1 968.1 992.1 965.0 994.8 r 29 Personal saving 30 Undistributed corporate profits 31 Corporate inventory valuation adjustment 175.6 75.7 -14.2 199.6 75.8 3.1 212.6 104.3 -7.4 214.6 104.0 -5.4 232.3 97.7 -15.5 203.3 91.2 -9.7 200.4 124.1 1.0 222.9 116.8r -9.4 Capital consumption 32 Corporate 33 Noncorporate 368.3 234.6 383.0 243.1 394.8 258.6 386.1 245.3 391.2 247.0 407.2 290.4 394.7 251.8 400.0 261.2 -136.1 -166.2 30.1 -193.3 -210.4 17.1 -282.5 -298.0 15.5 -272.6 -289.2 16.6 -285.2 -302.9 17.7 -295.2 -304.4 9.2 -277.2 -295.5 18.3 -262.0 -272.1 10.1 723.4 730.1 720.4 706.5 713.8 732.0 729.5 776.3R 799.5 -76.1 721.1 9.0 770.4 -49.9 722.4 -16.0 773.2 -59.4 781.6 -49.6 804.3 -74.7 844.0 —67.7r 5.4 21.9 34.1 29.0 30.9 35.1 41.7 allowances 34 Government surplus, or deficit ( - ) , national income and product accounts Federal 35 36 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. U.S. Department of Commerce, Survey of Current Business. 43.4 Summary Statistics 3.10 U.S. INTERNATIONAL TRANSACTIONS A53 Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1993 1990 1 Balance on current account 2 Merchandise trade balance 2 3 Merchandise exports 4 Merchandise imports 5 Military transactions, net 6 Other service transactions, net 7 Investment income, net 8 U.S. government grants 9 U.S. government pensions and other transfers 10 Private remittances and other transfers 11 Change in U.S. government assets other than official reserve assets, net (increase, - ) 12 Change in U.S. official reserve assets (increase, - ) 13 Gold 14 Special drawing rights (SDRs) 15 Reserve position in International Monetary Fund 16 Foreign currencies 1992 1991 Ql Q2 Q3 Q4 Qlp -22,249 -29,068 111,627 -140,695 -383 15,006 273 -3,412 -971 -3,694 -91,861 -109,033 389,303 -498,336 -7,834 38,485 20,348 -17,434 -2,934 -13,459 -8,324 -73,802 416,937 -490,739 -5,851 51,733 13,021 24,073 -3,461 -14,037 -66,400 -96,138 440,138 -536,276 -2,751 59,163 6,222 -14,688 -3,735 -14,473 -6,685 -17,763 108,347 -126,110 -571 14,619 4,419 -2,788 -830 -3,770 -18,253 -24,801 108,306 -133,107 -727 14,378 907 -3,234 -1,118 -3,659 -17,775 -27,612 109,493 -137,105 -617 15,898 1,703 -2,783 -940 -3,424 -23,687 -25,962 113,992 -139,954 -836 14,265 -806 -5,883 -846 -3,619 2,307 2,905 -1,609 -275 -293 -305 -737 309 -983 -2,158 5,763 3,901 -1,057 1,464 1,952 1,542 -192 731 -2,697 -177 -367 6,307 2,316 -2,692 4,277 -172 111 -9% -168 -173 2,829 -2,685 1,398 -140 -2,639 33,921 0 0 0 0 0 1 1,631 0 -118 2,243 0 0 -228 -615 -44,280 16,027 -4,433 -28,765 -27,109 -68,643 3,278 1,932 -44,740 -29,113 -53,253 24,948 4,551 -47,961 -34,791 303 17,795 5,339 -8,493 -14,338 -9,866 4,050 1,294 -8,276 -6,934 -12,445 6,584 -3,214 -13,787 -2,028 -31,243 -3,481 1,132 -17,405 -11,489 -26,578 -9,982 22 Change in foreign official assets in United States (increase, +) . . 23 U.S. Treasury securities 24 Other U.S. government obligations 25 Other U.S. government liabilities 26 Other U.S. liabilities reported by U.S. banks' 27 Other foreign official assets 5 34,198 29,576 667 2,156 3,385 -1,586 17,564 14,846 1,301 1,542 -1,484 1,359 40,684 18,454 3,949 2,542 16,427 21,124 14,916 464 58 5,573 113 21,008 11,240 1,699 678 7,466 -75 -7,378 -323 912 864 -7,831 -1,000 5,931 -7,379 874 943 11,219 274 10,990 1,039 710 -210 8,046 1,404 28 Change in foreign private assets in United States (increase, + ) . . 29 U.S. bank-reported liabilities 3 30 U.S. nonbank-reported liabilities 31 Foreign private purchases of U.S. Treasury securities, net 32 Foreign purchases of other U.S. securities, net 33 Foreign direct investments in United States, net 70,976 16,370 7,533 -2,534 1,592 48,015 65,875 -11,371 -699 18,826 35,144 23,975 88,895 18,609 741 36,893 30,274 2,378 -1,290 -3,339 926 623 4,613 -4,113 23,442 -528 979 10,168 10,453 2,370 33,828 23,647 1,553 4,870 2,730 1,028 32,914 -1,171 -2,717 21,232 12,478 3,092 8,600 -22,048 34 Allocation of special drawing rights 35 Discrepancy 36 Due to seasonal adjustment 37 Before seasonal adjustment 30,820 17 Change in U.S. private assets abroad (increase, - ) 18 Bank-reported claims 3 19 Nonbank-reported claims 20 U.S. purchases of foreign securities, net 21 U.S. direct investments abroad, net 0 0 -15,140 0 -12,218 -12,218 30,820 0 -12,120 4,878 -16,998 0 -17,502 653 -18,155 0 2,123 -6,754 8,877 0 15,280 1,222 14,058 14,179 10,635 5,834 0 5,973 5,726 247 MEMO Changes in official assets 38 U.S. official reserve assets (increase, - ) 39 Foreign official assets in United States, excluding line 25 (increase, + ) 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) -2,158 5,763 3,901 -1,057 1,464 1,952 1,542 -983 32,042 16,022 38,142 21,066 20,330 -8,242 4,988 11,199 5,857 2,583 -2,113 3,051 2,336 639 1,707 1. Seasonal factors not calculated for lines 12-16, 18-20, 22-34, and 38-40. 2. Data are on an international accounts basis. The data differ from the Census basis data, shown in table 3.11, for reasons of coverage and timing. Military exports are excluded from merchandise trade data and are included in line 6. 3. Reporting banks include all types of depository institution as well as some brokers and dealers. 4. Associated primarily 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. SOURCE. U.S. Department of Commerce, Survey of Current Business. A54 International Statistics • September 1993 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1992 Item 1 Exports of domestic and foreign merchandise, excluding grant-aid shipments 2 General imports including merchandise for immediate consumption plus entries into bonded warehouses 3 Trade balance 1990 393,592 1991 421,730 1993 1992 448,164 Nov. Dec. Jan. Feb. Mar. Apr. r May? 37,7% 39,178 37,505 36,928 38,895 38,479 38,953 495,311 488,453 532,665 45,633 46,143 45,176 44,832 49,347 48,660 47,319 -101,718 -66,723 -84,501 -7,837 -6,965 -7,672 -7,904 -10,453 -10,182 -8,366 1. Government and nongovernment shipments of merchandise between foreign countries and the fifty states, including the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and U.S. Foreign Trade Zones. Data exclude (1) shipments among the United States, Puerto Rico, the U.S. Virgin Islands, and other U.S. affiliated insular areas, (2) shipments to U.S. Armed Forces and diplomatic missions abroad for their own use, (3) U.S. goods returned to the United States by its Armed Forces, (4) personal and household effects of travelers, and (5) in-transit shipments. Data reflect the total arrival of merchandise from foreign countries that immediately entered consumption channels, warehouses, or U.S. Foreign Trade Zones (general imports). Import data are Customs value; export data are F.A.S. value. Since 1990, data for U.S. exports to Canada have been derived from import data compiled by Canada; similarly, in Canadian statistics, Canadian exports to the United States are derived from import data compiled by the United States. Since Jan. 1, 1987, merchandise trade data have been released forty-five days after the end of the month; the previous month is revised to reflect late documents. Data in this table differ from figures for merchandise trade shown in the U.S. balance of payments accounts (table 3.10, lines 2 through 4) primarily for reasons of coverage. For both exports and imports, a large part of the difference is the treatment of military sales and purchases. The military sales to foreigners (exports) and purchases from foreigners (imports) that are included in this table as merchandise trade are shifted, in the balance of payments accounts, from "merchandise trade" into the broader category "military transactions." SOURCE. (U.S. Department of Commerce, Bureau of the Census), FT900, U.S. Merchandise Trade. 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1992 Asset 1 Total 2 Gold stock, including Exchange Stabilization Fund 1 3 Special drawing rights 2 ' 3 4 Reserve position in International Monetary Fund 5 Foreign currencies 4 1989 1993 1991 Jan. Feb. Mar. Apr. May 74,609 83,316 77,719 71,323 71,962 72,847 74,378 75,644 76,711 11,059 9,951 11,058 10,989 11,057 11,240 11,056 8,503 11,055 8,546 11,055 8,651 11,054 8,787 11,054 8,947 11,053 9,147 9,048 44,551 9,076 52,193 9,488 45,934 11,759 40,005 12,079 40,282 12,021 41,120 12,184 42,353 12,317 43,326 12,195 44,316 1. Gold held "under e a r m a r k " at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold stock is valued at $42.22 per fine troy ounce. 2. Special drawing rights (SDRs) are valued according to a technique adopted by the International Monetary Fund (IMF) in July 1974. Values are based on a weighted average of exchange rates for the currencies of member countries. From July 1974 through December 1980, sixteen currencies were used; since January June p 1981, five currencies have been used. U.S. SDR holdings and reserve positions in the IMF also have been valued on this basis since July 1974. 3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1 of the year indicated, as follows: 1970—$867 million; 1971—$717 million; 1972— $710 million; 1979—$1,139 million; 1980—$1,152 million; 1981—$1,093 million; plus net transactions in SDRs. 4. Valued at current market exchange rates. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1 Millions of dollars, end of period 1992 Asset 1989 1990 Dec. 1 Deposits Held in custody 2 U.S. Treasury securities 3 Earmarked gold 3 Jan. Feb. Mar. Apr. May June p 589 369 %8 205 325 2% 317 221 193 286 224,911 13,456 278,499 13,387 281,107 13,303 314,481 13,686 324,356 13,077 329,183 13,074 326,486 12,989 339,3% 12,924 345,060 12,854 343,672 12,829 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 at face value in dollars or foreign currencies. 1993 1991 3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; not included in the gold stock of the United States. Summary Statistics 3.14 FOREIGN BRANCHES OF U.S. BANKS A55 Balance Sheet Data1 Millions of dollars, end of period 1993 1992 1989 Account 1990 1991 Nov. Dec. Jan. Feb. Mar. Apr. All foreign countries ASSETS ... 545,366 556,925 548,999' 566,721 542,545 543,624 554,280 546,941 543,833 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 198,835 157,092 17,042 24,701 300,575 113,810 90,703 16,456 79,606 45,956 188,496 148,837 13,296 26,363 312,449 135,003 72,602 17,555 87,289 55,980 176,487r 137,695r 12,884 25,908 303,934 111,729 81,970 18,652 91,583 68,578 r 177,443 141,542 10,019 25,882 328,592 125,143 86,086 20,378 96,985 60,686 166,798 132,275 9,703 24,820 318,071 123,256 82,190 20,756 91,869 57,676 169,278 134,218 9,570 25,490 314,736 116,325 81,812 19,984 96.615 59,610 172,304 139,170 9,249 23,885 317,868 115,323 84,439 19,822 98,284 64,108 171,648 138,532 9,073 24,043 314,912 112,598 84,909 18,915 98,490 60,381 164,142 128,611 10,830 24,701 315,428 110,189 87,225 18,694 99,320 64,263 12 Total payable in U.S. dollars 382,498 379,479 364,078' 374,420 365,824 353,643 361,251 353,315 344,319 180,174 142,962 12,513 24,699 174,451 95,298 36,440 12,298 30,415 24,854 r 171,938 138,424 9,291 24,223 182,360 83,902 45,931 13,995 38,532 20,122 162,125 129,329 9,266 23,530 183,527 83,117 47,250 14,313 38,847 20,172 164,681 131,554 9,213 23,914 171,120 77,606 41.616 13,883 38,015 17,842 167,773 136,650 8,704 22,419 174,726 77,681 43,067 13,710 40,268 18,752 167,051 135,939 8,336 22,776 170,338 75,871 41,266 13,068 40,133 15,926 159,541 126,181 10,168 23,192 169,206 73,049 43,566 12,537 40,054 15,572 1 Total payable in any currency May 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 22 Other assets 191,184 152,294 16,386 22,504 169,690 82,949 48,396 10,961 27,384 21,624 169,848 133,662r 12,025 24,161 167,010 78,114 41,635 13,685 33,576 27,220" United Kingdom ... 161,947 184,818 175,599 168,333 165,850 164,360 165,132 162,122 163,194 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 Other assets 39,212 35,847 1,058 2,307 107,657 37,728 36,159 3,293 30,477 15,078 45,560 42,413 792 2,355 115,536 46,367 31,604 3,860 33,705 23,722 35,257 31,931 1,267 2,059 109,692 35,735 36,394 3,306 34,257 30,650 38,358 35,027 925 2,406 113,193 45,092 34,559 3,370 30,172 16,782 36,403 33,460 1,298 1,645 111,623 46,165 33,399 3,329 28,730 17,824 37,609 34,290 886 2,433 108,362 42,894 33,513 3,059 28,896 18,389 34,919 32,779 783 1,357 110,420 41,317 36,601 2,542 29,960 19,793 34,989 31,719 892 2,378 106,944 39,466 34,914 2,531 30,033 20,189 33,353 29,605 757 2,991 109,428 39,673 38,138 2,755 28,862 20,413 34 Total payable in U.S. dollars 103,208 116,762 105,974 109,479 109,493 101,375 99,755 94,870 95,612 41,259 39,609 334 1,316 63,701 37,142 13,135 3,143 10,281 32,418 30,370 822 1,226 58,791 28,667 15,219 2,853 12,052 14,765 35,956 33,765 438 1,753 65,164 34,434 16,848 2,501 11,381 8,359 34,508 32,186 1,022 1,300 66,335 34,124 17,089 2,349 12,773 8,650 35,481 33,070 684 1,727 59,505 30,823 14,316 2,154 12,212 6,389 32,929 31,559 428 942 60,695 28,856 16,800 1,883 13,156 6,131 32,783 30,443 413 1,927 57,530 30,017 13,422 1,949 12,142 4,557 31,233 28,420 393 2,420 60,180 29,388 16,903 1,888 12,001 4,637 151,175 148,867 143,859 142,184 94.292 65,568 7,184 21,540 41.293 6,999 18,442 6,527 9,325 6,599 137,514 23 Total payable in any currency — 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 36,404 34,329 843 1,232 59,062 29,872 16,579 2,371 10,240 7,742 11,802 Bahamas and Cayman Islands 45 Total payable in any currency . . 176,006 162,316 168,512' 156,176 147,422 144,894 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 54 Nonbank foreigners 55 Other assets 124,205 87,882 15,071 21,252 44,168 11,309 22,611 5,217 5,031 7,633 112,989 77,873 11,869 23,247 41,356 13,416 16,310 5,807 5,823 7,971 115,430" 81,706' 10,907 22,817 45,229 11,098 20,174 7,161 6,796 7,853 104,245 73,856 8,282 22,107 44,156 8,238 20,122 7,209 8,587 7,775 96,280 66,608 7,828 21,844 44,509 7,293 21,212 7,786 8,218 6,633 96,976 67,219 7,962 21,795 41,185 7,041 18,464 7,564 8,116 6,733 102,836 73,825 7,892 21,119 40,821 7,311 17,440 7,422 8,648 7,518 100,687 72,841 7,424 20,422 41,314 6,650 18,797 7,188 8,679 6,866 96,829 67,190 9,279 20,360 40,442 6,873 17,662 6,690 9,217 6,588 56 Total payable in U.S. dollars 170,780 158,390 163,957' 151,436 142,861 140,332 146,809 144,627 139,351 1. Since June 1984, reported claims held by foreign branches have been reduced by an increase in the reporting threshold for " s h e l l " branches from $50 million to $150 million equivalent in total assets, the threshold now applicable to all reporting branches. A56 3.14 International Statistics • September 1993 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data1—Continued 1992 A 1993 * Nov. Dec. Jan. Feb. Mar. Apr. May All foreign countries LIABILITIES 57 Total payable in any currency 545,366 556,925 548,999" 566,721 542,545 543,624 554,280 546,941 543,833 548,340 58 59 60 61 62 Negotiable certificates of deposit (CDs) . . T o United States Parent bank Other banks in United States Nonbanks 23,500 197,239 138,412 11,704 47,123 18,060 189,412 138,748 7,463 43,201 16,284 198,307" 136,431 13,260 48,616" 12,342 188,116 131,918 13,392 42,806 10,032 189,444 134,339 12,182 42,923 12,320 175,978 122,627 12,829 40,522 11,872 184,155 124,123 12,373 47,659 11,596 187,088 125,650 13,306 48,132 13,748 176,082 114,%5" 11,952 49,165" 14,348 174,889 116,691 14,062 44,136 63 64 65 66 67 68 To foreigners Other branches of parent bank Banks Official institutions Nonbank foreigners Other liabilities 296,850 119,591 76,452 16,750 84,057 27,777 311,668 139,113 58,986 14,791 98,778 37,785 288,254 112,033 63,097 15,5% 97,528 46,154" 330,315 126,018 74,536 20,645 109,116 35,948 309,704 125,160 62,189 19,731 102,624 33,365 321,297 120,179 67,843 23,654 109,621 34,029 319,638 119,601 70,056 21,469 108,512 38,615 312,417 115,535 68,411 18,312 110,159 35,840 316,661 113,845 68,381" 21,326 113,109" 37,342 322,140 115,189 69,323 22,271 115,357 36,%3 69 Total payable in U.S. dollars 396,613 383,522 370,7^ 372,819 368,773 353,725 363,285 353,431 343,867 343,766 70 71 72 73 74 Negotiable CDs To United States Parent bank Other banks in United States Nonbanks 19,619 187,286 132,563 10,519 44,204 14,094 175,654 130,510 6,052 39,092 11,909 185,472" 129,669 11,707 44,0%" 7,503 175,%9 124,770 12,246 38,953 6,238 178,674 127,948 11,512 39,214 7,102 164,634 116,008 11,710 36,916 6,640 172,223 117,228 11,418 43,577 6,519 175,354 119,040 12,467 43,847 7,062 163,715 107,949" 11,282 44,484" 7,248 161,775 109,645 13,126 39,004 75 76 77 78 79 80 To foreigners Other branches of parent bank Banks Official institutions Nonbank foreigners Other liabilities 176,460 87,636 30,537 9,873 48,414 13,248 179,002 98,128 20,251 7,921 52,702 14,772 158,993 76,601 24,156 10,304 47,932 14,336" 175,791 82,957 28,404 12,342 52,088 13,556 172,189 83,700 26,118 12,430 49,941 11,672 169,595 79,144 23,281 14,067 53,103 12,394 170,756 79,594 25,571 14,034 51,557 13,666 160,774 77,685 21,227 10,762 51,100 10,784 163,149 75,682 22,150 12,627 52,690 9,941 165,162 75,313 22,%9 12,653 54,227 9,581 United Kingdom 81 Total payable in any currency 82 83 84 85 86 Negotiable CDs To United States Parent bank Other banks in United States Nonbanks To foreigners Other branches of parent bank Banks Official institutions Nonbank foreigners 92 Other liabilities 87 88 89 90 91 161,947 184,818 175,599 168,333 165,850 164,360 165,132 162,122 163,194 165,044 20,056 36,036 29,726 1,256 5,054 14,256 39,928 31,806 1,505 6,617 11,333 37,720 29,834 1,438 6,448 5,636 34,532 26,471 1,689 6,372 4,517 39,174 31,100 1,065 7,009 5,774 32,780 25,099 1,742 5,939 5,597 33,092 24,250 1,633 7,209 4,753 38,011 29,759 1,192 7,060 5,414 34,661 22,611 1,110 10,940 5,644 37,272 28,095 1,652 7,525 92,307 27,397 29,780 8,551 26,579 13,548 108,531 36,709 25,126 8,361 38,335 22,103 98,167 30,054 25,541 9,670 32,902 28,379 113,395 35,560 30,609 11,438 35,788 14,770 107,176 35,983 25,231 12,090 33,872 14,983 111,351 35,376 25,%5 14,188 35,822 14,455 110,514 35,143 27,227 12,938 35,206 15,929 104,356 33,424 23,985 10,531 36,416 15,002 108,670 33,545 26,082 12,342 36,701 14,449 106,834 31,437 27,184 11,752 36,461 15,294 93 Total payable in U.S. dollars 108,178 116,094 108,755 105,699 108,214 100,731 101,342 95,892 94,159 96,152 94 95 96 97 98 Negotiable CDs To United States Parent bank Other banks in United States Nonbanks 18,143 33,056 28,812 1,065 3,179 12,710 34,697 29,955 1,156 3,586 10,076 33,003 28,260 1,177 3,566 4,494 30,204 25,160 906 4,138 3,894 35,417 29,957 709 4,751 4,770 28,545 23,767 1,063 3,715 4,444 28,874 23,097 1,097 4,680 3,765 33,552 28,405 707 4,440 4,214 30,170 21,145 676 8,349 4,392 32,457 26,631 1,311 4,515 T o foreigners Other branches of parent bank Banks Official institutions Nonbank foreigners Other liabilities 50,517 18,384 12,244 5,454 14,435 6,462 60,014 25,957 9,488 4,692 19,877 8,673 56,626 20,800 11,069 7,156 17,601 9,050 62,899 22,8% 13,050 8,459 18,494 8,102 62,048 22,026 12,540 8,847 18,635 6,855 60,107 20,807 9,740 10,114 19,446 7,309 59,643 20,516 10,359 9,%7 18,801 8,381 51,850 19,516 6,702 7,008 18,624 6,725 54,407 18,958 8,327 8,803 18,319 5,368 54,576 17,449 9,065 8,210 19,852 4,727 99 100 101 102 103 104 Bahamas and Cayman Islands 105 Total payable in any currency 176,006 162,316 168,512r 156,176 147,422 144,894 151,175 148,867 143,859 142,184 106 107 108 109 110 Negotiable CDs To United States Parent bank Other banks in United States Nonbanks 678 124,859 75,188 8,883 40,788 646 114,738 74,941 4,526 35,271 1,173 130,058" 79,394 10,231 40,433" 1,939 116,699 71,381 10,944 34,374 1,350 111,861 67,347 10,445 34,069 1,355 108,150 65,122 10,265 32,763 1,142 110,729 62,336 10,059 38,334 1,713 110,391 59,668 11,492 39,231 1,692 105,895 59,416" 10,291 36,188" 1,812 102,211 56,566 11,220 34,425 To foreigners Other branches of parent bank Banks Official institutions Nonbank foreigners 116 Other liabilities 47,382 23,414 8,823 1,097 14,048 3,087 44,444 24,715 5,588 622 13,519 2,488 35,200 17,388 5,662 572 11,578 2,081 35,411 16,287 7,574 932 10,618 2,127 32,556 15,169 6,422 805 10,160 1,655 33,766 15,411 6,350 932 11,073 1,623 37,690 18,056 7,%7 1,036 10,631 1,614 35,369 18,015 6,476 858 10,020 1,394 34,773 17,462 6,219 905 10,187 1,499 36,146 18,626 6,123 1,052 10,345 2,015 Total payable in U.S. dollars 171,250 157,132 151,527 143,150 140,734 146,875 144,291 138,741 137,159 111 112 113 114 115 117 163,789" Summary Statistics A57 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1993 1992 Item 1990 1991 Nov. 1 Total 1 2 3 4 5 6 7 8 9 10 11 12 Dec. 344,529 360,530 394,841 39,880 79,424 38,3% 92,692 54,007 100,702 r By type Liabilities reported by banks in the United States-' U.S. Treasury bills and certificates 3 U.S. Treasury bonds and notes Marketable Nonmarketable U.S. securities other than U.S. Treasury securities 202,487 4,491 18,247 203,677 4,858 20,907 211,268 4,503 24,361 By area Western Europe 1 Canada Latin America and Caribbean Asia Africa Other countries 6 167,191 8,671 21,184 138,0% 1,434 7,955 168,365 7,460 33,554 139,465 2,092 9,592 184,204r 6,381 38,945 154,493 3,779 7,037 r 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; zero coupon bonds are included at current value. r Jan. 398,672 411,802 54,823 104,5% 63,792 111,540 Feb. r 413,220 r Mar. Apr.* May? 409,977* 413,255 423,033 66,454 113,594 62,974 113,547 62,480 113,293 67,624 120,785 210,553 4,532 24,168 207,573 4,563 24,334 r 203,209* 4,592 25,371 202,552* 4,622 26,282 205,138 5,431 26,913 201,851 5,417 27,356 188,700* 7,920 40,015 152,142r 3,565 6,328 r l%,232 r 8,411 41,388 156,205r 3,705 5,859 r 199,65l r 7,886 42,502 154,009* 3,866 5,304* 187,394* 9,326 44,509 157,912* 3,919 6,915* 184,986 8,302 48,970 159,623 3,782 7,590 190,992 8,899 47,592 164,114 3,782 7,652 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. SOURCE. 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 and on the 1984 benchmark survey of foreign portfolio investment in the United States. 3.16 LIABILITIES TO, AND CLAIMS ON, FOREIGNERS Reported by Banks in the United States1 Payable in Foreign Currencies Millions of dollars, end of period 1993* 1992* Item 1 Banks' liabilities 2 Banks' claims 3 Deposits 4 Other claims 5 Claims of banks' domestic customers 1989 67,835 65,127 20,491 44,636 3,507 1. Data on claims exclude foreign currencies held by U.S. monetary authorities. 1990 70,477 66,7% 29,672 37,124 6,309 1991 75,129 73,195 26,192 47,003 3,398 June Sept. Dec. Mar. 70,%9 58,354 23,468 34,886 4,375 84,162 72,164 28,074 44,090 3,987 72,7% 62,789 24,240 38,549 4,432 82,201 64,061 25,014 39,047 2,625 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. A58 International Statistics • September 1993 3.17 LIABILITIES TO FOREIGNERS Payable in U.S. dollars Reported by Banks in the United States1 Millions of dollars, end of period 1992 1990 Item 1991 1993 1992 Nov. Dec. Jan. Feb. Mar." Apr." May" HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 759,634 756,066 810,025r 801,930 r 810,025 r 802,216" 814,725 r 798,117 791,119 793,006 2 Banks' own liabilities 3 Demand deposits 4 Time deposits 2 5 Other. Own foreign offices 6 577,229 21,723 168,017 65,822 321,667 575,374 20,321 159,649 66,305 329,099 606,210" 21,823 r 160,374r 93,840" 330,173r 603,413" 21,935 156,601" 96,547" 328,330" 606,210" 21,823" 160,374" 93,840" 330,173" 592,754" 21,106 150,062" 103,910" 317,676" 606,005" 22,310 147,284" 106,262" 330,149" 586,175 21,582 141,905 99,193 323,495 581,291 22,239 145,659 103,328 310,065 574,204 22,136 145,155 106,386 300,527 182,405 96,796 180,692 110,734 203,815 r 127,649 198,517 122,480 203,815" 127,649 209,462" 133,799 208,720" 135,300 211,942 137,062 209,828 138,016 218,802 144,725 17,578 68,031 18,664 51,294 21,982 54,184 r 21,755 54,282 21,982 54,184" 22,%9 52,694" 20,735 52,685" 22,309 52,571 21,550 50,262 23,971 50,106 5,918 4,540 36 1,050 3,455 8,981 6,827 43 2,714 4,070 9,350 6,951 46 3,214 3,691 9,915 6,982 58 2,561 4,363 9,350 6,951 46 3,214 3,691 11,099 7,837 39 2,702" 5,0%" 11,538 8,884 47 2,311" 6,526" 9,160 5,902 2,622 3,084 10,731 5,834 33 1,687 4,114 8,974 6,481 35 2,989 3,457 1,378 364 2,154 1,730 2,399 1,908 2,933 2,371 2,399 1,908 3,262 2,774 2,654 2,348 3,258 2,876 4,897 4,461 2,493 1,883 1,014 0 424 0 486 5 561 1 486 5 488 0 306 0 382 0 433 3 604 6 119,303 34,910 1,924 14,359 18,628 131,088 34,411 2,626 16,504 15,281 159,419 51,058 1,274 17,823r 31,961 r 154,709 50,027 1,492 17,735" 30,800" 159,419 51,058 1,274 17,823" 31,961" 175,332 59,577 1,397 18,685 39,495 180,048 62,687 1,764 18,9% 41,927 176,521 59,471 1,457 18,727 39,287 175,773 59,059 1,358 18,853 38,848 188,409 62,741 1,385 21,416 39,940 84,393 79,424 96,677 92,692 108,361 104,596 104,682 100,702 108,361 104,5% 115,755 111,540 117,361 113,594 117,050 113,547 116,714 113,293 125,668 120,785 4,766 203 3,879 106 3,726 39 3,784 196 3,726 39 4,054 161 3,648 119 3,411 92 3,284 137 4,739 144 540,805 458,470 136,802 10,053 88,541 38,208 321,667 522,265 459,335 130,236 8,648 82,857 38,731 329,099 546,556r 475,340" 145,167r 10,168 90,175 r 44,824 r 82,335 10,669 62,930 7,471 5,341 66,325 7 Banks' custodial liabilities 5 8 U.S. Treasury bills and certificates Other negotiable and readily transferable 9 instruments 7 Other 10 11 Nonmonetary international and regional organizations Banks' own liabilities 12 13 Demand deposits 14 Time deposits 15 Other. 16 17 18 19 Banks' custodial liabilities 5 U.S. Treasury bills and certificates 6 Other negotiable and readily transferable instruments 7 Other 20 Official institutions 9 Banks' own liabilities 21 Demand deposits 22 Time deposits 23 24 Other 25 26 27 28 Banks' custodial liabilities 5 U.S. Treasury bills and certificates 6 Other negotiable and readily transferable instruments 7 Other 29 Banks 1 0 Banks' own liabilities 30 Unaffiliated foreign banks 31 Demand deposits 32 Time deposits 33 34 Other. Own foreign offices 35 36 37 38 39 5 Banks' custodial liabilities U.S. Treasury bills and certificates 6 Other negotiable and readily transferable instruments 7 Other Other foreigners Banks' own liabilities Demand deposits 43 Time deposits Other 44 40 41 42 45 46 47 48 Banks' custodial liabilities 5 U.S. Treasury bills and certificates 6 Other negotiable and readily transferable instruments 7 Other 1% 546,350" 475,319" 146,989" 10,088 87,477" 49,424" 328,330" 546,556" 475,340" 145,167" 10,168 90,175" 44,824" 330,173" 522,700" 453,849" 136,173" 9,903 80,351 45,919" 317,676" 530,365" 462,769" 132,620" 10,974 77,823 43,823" 330,149" 520,516 451,438 127,943 10,495 72,422 45,026 323,495 511,473 445,235 135,170 10,883 77,457 46,830 310,065 503,753 436,864 136,337 11,382 74,035 50,920 300,527 71,216R 71,031 11,087 10,444 71,216" 11,087 68,851" 9,685 67,5%" 9,2% 69,078 9,976 66,238 9,908 66,889 10,837 5,694 49,765 7,568 52,561 r 7,572 53,015 7,568 52,561" 7,708 51,458" 6,692 51,608" 7,957 51,145 7,360 48,970 7,412 48,640 93,608 79,309 9,711 64,067 5,530 93,732 74,801 9,004 57,574 8,223 94,700" 72,861" 10,335" 49,162" 13,364" 90,956" 71,085" 10,297 48,828" 11,960" 94,700" 72,861" 10,335" 49,162" 13,364" 93,085" 71,491" 9,767 48,324" 13,400" 92,774" 71,665" 9,525 48,154" 13,986" 91,920 69,364 9,434 48,134 11,7% 93,142 71,163 9,%5 47,662 13,536 91,870 68,118 9,334 46,715 12,069 14,299 6,339 18,931 8,841 21,839 10,058 19,871 8,963 21,839 10,058 21,594 9,800 21,109 10,062 22,556 10,663 21,979 10,354 23,752 11,220 6,457 1,503 8,667 1,423 10,202 9,838 1,070 10,202 1,579 10,719 1,075 10,089 958 10,559 1,334 10,473 1,579 1,152 11,216 1,316 7,073 7,456 9,114 7,716 9,114 9,724 9,499 9,548 9,410 9,585 330,173R MEMO 49 Negotiable time certificates of deposit in custody for foreigners 1. Reporting banks include all types of depository institution, 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. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiaries consolidated in Consolidated Report of Condition filed with bank regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists principally of amounts owed 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, the Inter-American Development Bank, and the Asian Development Bank. Excludes "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 1993 1990 1991 1992 Nov. Dec Jan. Feb. Mar. Apr/ AREA 1 Total, all foreigners . 759,634 756,066 810,025r 801,930 r 810,025* 802,216 r 814,725' 798,117' 791,119 2 Foreign countries . . . 753,716 747,085 800,675' 792,015' 800,675* 791,117* 803,187* 788,957' 780,388 254,452 1,229 12,382 1,399 602 30,946 7,485 934 17,735 5,350 2,357 2,958 7.544 1,837 36,690 1,169 109,555 928 11,689 119 1.545 249,097 1,193 13,337 937 1,341 31,808 8,619 765 13,541 7,161 1,866 2,184 11,391 2,222 37,238 1,598 100,292 622 9,274 241 3,467 308,418r 1,611 20,572 3,060 1,299 41,459 18,631 910 10,041 7,372 3,319 2,465 9,796 2,986 39,440 2,666 112,454r 504 25,834 577 3,422 311,838 r l,356 r 19,662 1,481 1,144 39,968 15,401 749 12,494 8,411 2,014 2,255 10,390* 4,424 r 40,791 2,360 117,373* 575 26,690* 601 3,699 308,418* 1,611 20,572 3,060 1,299 41,459 18,631 910 10,041 7,372 3,319 2,465 9,7% 2,986 39,440 2,666 112,454* 504 25,834 577 3,422 303,751* 1,158 21,255 1,885 1,862 34,285 20,685 815 8,759 8,722* 3,550 2,518 14,904 2,%2 41,533 2,533 106,739* 506 25,926 436 2,718 304,752' 1,942 19,729 2,835 2,049 32,457 18,934 758 10,701 11,702* 2,521 2,508 17,233 1,902 40,227 2,862 105,510* 512 27,491 497 2,382 293,346* 1,256 19,475 1,536 2,297 31,712 16,107 763* 8,889* 11,409* 2,350 2,489 15,735 1,619 39,5% 2,520 106,328* 523 25,748 535 2,459 298,874 1,497 19,775 1,229 2,265 31,087 19,803 742 8,094 11,502 2,355 2,476 14,055 3,149 39,703 2,664 109,553 507 24,521 726 3,171 3 Europe 4 Austria Belgium and Luxembourg . . Denmark Finland France Germany Greece 11 Italy 12 Netherlands 13 Norway 14 Portugal 15 Spain 16 Sweden 17 Switzerland 18 Turkey 19 United Kingdom 20 Yugoslavia. 21 Others in Western Europe 1 2 22 Russia 23 Other Eastern Europe 1 3 — 20,349 21,605 22,746 22,052 22,746 21,467 22,898 25,040 22,302 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 332,997 7,365 107,386 2,822 5,834 147,321 3,145 4,492 11 1,379 1,541 257 16,650 7,357 4,574 1,294 2,520 12,271 6,779 345,529 7,753 100,622 3,178 5,704 163,620 3,283 4,661 2 1,232 1,594 231 19,957 5,592 4,695 1,249 2,096 13,181 6,879 316,020r 9,477 82,222r 7.079 5,584 151,886 3,035 4,580 3 993 1,377 371 19,456 5,205 4,177 1.080 1,955 11,387 6,153 r 312,118* 8,716* 86,318* 6,355 5,236* 145,375* 2,931* 4,675* 11 1,022* 1,324* 271 19,567* 6,098* 3,965* 1,059* 2,092 11,020* 6,083* 316,020* 9,477 82,222* 7.079 5,584 151,886 3,035 4,580 3 993 1,377 371 19,456 5,205 4,177 1.080 1,955 11,387 6,153* 313,754* 10,792 84,777* 6,319 5,321 147,375* 3,638 4,438 2 945 1,311 294 20,023 4,352 4,013 1,052 1,898 11,106 6,098 321,062* 10,608 87,812* 6,508 5,304 150,063* 3,420 4,417 3 886 1,311 279 21,1%* 4,869 4,214 1,045 2,061 10,984 6,082 318,681* 11,568 83,597* 6,269* 5,462 151,216* 3,325 4,183 3 928 1,382 309 21,762* 4,221 3,927 995 1,815 11,446 6,273* 316,472 10,856 81,737 6,135 5.463 147,386 3,479 4,359 2 919 1,352 293 24,8% 4,537 4,154 1,070 1,767 11,511 6,556 44 Asia China 45 People's Republic of China 46 Republic of China (Taiwan) 47 Hong Kong 48 India 49 Indonesia 50 Israel 51 Japan 52 Korea (South) 53 Philippines 54 Thailand 55 Middle Eastern oil-exporting countries 1 4 56 Other 136,844 120,462 143,436r 136,120* 143,436* 141,633* 143,636* 140,335* 130,994 2,421 11,246 12,754 1,233 1,238 2,767 67,076 2,287 1,585 1.443 15,829 16,965 2,626 11,491 14,269 2,418 1.463 2,015 47,069 2,587 2,449 2,252 15,752 16,071 3,202 8,379 18,509* 1,396 1,480 3,775 58,342 r 3,336 2,275 5,582 21,446 15,714 2,559 8,750 16,322 1,210 1,217 3,691 55,365* 3,698 2,223 5,797 20,266 15,022 3,202 8,379 18,509* 1,3% 1,480 3,775 58,342* 3,336 2,275 5,582 21,446 15,714 3,114 8,929 17,588* 1,323 1,392 3,389 56,009* 3,444* 2,350 5,722 19,877 18,4% 3,007 9,102 19,543* 1,377 1,460 3,371 57,993 3,488* 2,746 5,375 19,897 16,277 2,957 9,022 17,041* 1,399 1,871 3,930 56,845 3,337* 2,774 5,342 19,718* 16,099 3,527 8,856 16,353 989 1.464 3,763 51,104 3,591 2,785 4,%7 19,687 13,908 57 Africa 58 Egypt 59 Morocco 60 South Africa 61 Zaire 62 OA-exporting countries 63 Other 4,630 1,425 104 228 53 1,110 1,710 4,825 1,621 79 228 31 1,082 1,784 5,884 2,472 76 190 19 1,346 1,781 6,062 2,601 93 214 23 1,402 1,729 5,884 2,472 76 190 19 1,346 1,781 5,913 2,756 88 158 25 1,125 1,761 6,364 3,077 92 319 17 1,135 1,724 6,508* 3,084 87 243 13 1,239 1,842* 6,438 2,938 151 246 14 1,294 1,795 64 Other 65 Australia 66 Other . . . 4.444 3,807 637 5,567 4.464 1,103 4,171 3,047 1,124 3,825 2,654 1,171 4,171 3,047 1,124 4,599 3,502 1,097 4,475 3,388 1,087 5,047 4,013 1,034 5,308 4,056 1,252 67 Nonmonetary international and regional organizations International 1 6 Latin American regional 1 Other regional 18 5,918 4,390 1,048 479 8,981 6,485 1,181 1,315 9,350 7,434 1,415 501 9,915 6,764 2,248 903 9,350 7,434 1,415 501 11,099 7,864 2,327 908 11,538 8,857 1,738 943 9,160 6,116 2,021 1,023 10,731 7,590 2,223 918 24 Canada. 68 69 70 11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 12. Includes the Bank for International Settlements and Eastern European countries not listed in line 23. Since December 1992, has included, in addition, all former parts of the U.S.S.R. (except Russia), and Bosnia-Hercegovina, Croatia, and Slovenia. 13. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. 14. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 15. Comprises Algeria, Gabon, Libya, and Nigeria. 16. Principally the International Bank for Reconstruction and Development. Excludes "holdings of dollars" of the International Monetary Fund. 17. Principally the Inter-American Development Bank. 18. Asian, African, Middle Eastern, and European regional organizations, except the Bank for International Settlements, which is included in "Other Western E u r o p e . " A59 A60 International Statistics • September 1993 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Payable in U.S. Dollars Reported by Banks in the United States1 Millions of dollars, end of period 1992 Area and country 1990 1991 1993 1992 Nov. Dec. Jan. Feb. Mar." Apr." May" 1 Total, all foreigners 511,543 514,339 495,761 r 490,768" 495,761" 484,670" 495,033" 473,944 469,559 458,629 2 Foreign countries 506,750 508,056 490,679" 487,887" 490,679" 481,570" 490,925" 470,622 467,142 456,947 113,093 362 5,473 497 1,047 14,468 3,343 727 6,052 1,761 782 292 2,668 2,094 4,202 1,405 65,151 1,142 597 530 499 114,310 327 6,158 686 1,907 15,112 3,371 553 8,242 2,546 669 344 1,881 2,335 4,540 1,063 60,395 825 789 1,970 597 124,130 341 6,404 707 1,419 14,847 4,229 718 9,048 2,497 356 325 2,772 4,929 4,722 %2 63,980 569 1,706 3,147 452 122,156" 463 6,423 1,056 1,230 15,718 5,328 598 9,443 3,006 435 330 3,481 5,781" 3,591 950 59,009" 661 1,019 3,174 460 124,130 341 6,404 707 1,419 14,847 4,229 718 9,048 2,497 356 325 2,772 4,929 4,722 %2 63,980 569 1,706 3,147 452 117,355" 366 6,473 705 1,275 14,012 5,544 670" 8,716 2,927 649 390 2,593 5,340 4,493 1,071 56,308" 571 1,607 3,154 491 124,763" 530 5,886 785 1,226 14,670 5,370 668 8,466 3,279 750 494 4,158 5,155 4,971 1,041 61,433" 567 1,607 3,154 553 122,721 1,101 6,066 682 1,010 13,340 5,800 583 8,493 2,676 645 454 3,889 4,809 4,423 943 62,098 553 1,780 2,906 470 120,310 1,013 6,177 645 998 13,141 5,322 618 8,724 2,607 714 513 3,642 4,509 4,355 1,285 60,722 551 1,316 2,889 569 118,175 1,357 5,097 628 885 11,614 6,089 5% 8,218 3,278 676 593 3,441 4,229 4,729 1,508 59,665 550 1,455 3,080 487 3 4 5 6 7 8 9 10 11 17 13 14 IS 16 17 18 19 70 71 ?? 23 Belgium and Luxembourg Italy Netherlands Turkey United Kingdom Others in Western Europe Other Eastern Europe 16,091 15,113 14,185 15,834 14,185 16,465" 14,972 18,356 17,090 16,461 75 Latin America and Caribbean 76 77 78 79 Brazil 30 31 Chile 37 33 Cuba 34 35 36 37 Netherlands Antilles 38 39 40 41 47 Other 43 231,506 6,967 76,525 4,056 17,995 88,565 3,271 2,587 0 1,387 191 238 14,851 7,998 1,471 663 786 2,571 1,384 246,137 5,869 87,138 2,270 11,894 107,846 2,805 2,425 0 1,053 228 158 16,567 1,207 1,560 739 599 2,516 1,263 213,772 4,882 59,532 5,934 10,733 98,738 3,397 2,750 0 884 262 167 15,049 1,379 4,474 730 936 2,525 1,400 217,036" 4,605 65,139 6,035 11,581" %,323" 3,309 2,698 0 926 255 162 16,495 1,529 2,080 723 877 2,880 1,419 213,772 4,882 59,532 5,934 10,733 98,738 3,397 2,750 0 884 262 167 15,049 1,379 4,474 730 936 2,525 1,400 219,079" 4,804 62,831 6,797 10,924 101,614" 3,690 2,752 0 853 240 170 15,216 1,735 2,024 735 895 2,409 1,390 212,204" 4,859 63,898 2,851 10,507 %,324" 3,795 2,819 0 835 257 164 15,988 1,938 2,307 708 844 2,485 1,625" 202,343 4,835 57,030 3,910 10,863 92,666 3,638 2,807 0 809 274 168 15,103 2,107 2,539 650 846 2,558 1,540 200,804 3,922 57,721 5,609 10,799 89,191 3,548 2,786 0 798 269 161 15,533 1,971 2,309 691 787 2,859 1,850 194,931 3,932 54,118 3,089 10,6% 90,023 3,717 2,875 0 760 256 158 14,966 2,354 2,268 675 778 2,541 1,725 44 138,722 125,262 131,296" 126,181" 131,2%" 121,777" 131,494 119,578 121,956 120,546 620 1,952 10,648 655 933 774 90,699 5,766 1,247 1,573 10,749 13,106 747 2,087 9,617 441 952 860 84,807 6,048 1,910 1,713 8,284 7,7% 906 2,046 9,673 529 1,189 820 78,647" 6,180" 2,145 1,867 18,559 8,735 624 1,653 9,287 539 1,135 937 77,714" 6,288 2,034 1,873 16,858 7,239 906 2,046 9,673 529 1,189 820 78,647" 6,180" 2,145 1,867 18,559 8,735 774 1,683 9,145 532 1,323 877 74,631" 6,073" 1,871 1,7% 17,083 5,989 892 1,585 10,298 549 1,292 809 79,791 6,753 1,842 1,737 17,775 8,171 939 1,630 10,542 443 1,469 8% 67,294 6,938 1,713 1,678 19,048 6,988 1,388 1,670 9,215 549 1,432 1,057 71,244 7,048 1,645 1,794 17,909 7,005 881 1,562 10,419 489 1,386 814 71,471 7,206 1,521 1,692 17,953 5,152 5,445 380 513 1,525 16 1,486 1,525 4,928 294 575 1,235 4 1,298 1,522 4,289 194 441 1,041 4 1,004 1,605 4,233 214 443 1,063 4 1,029 1,480 4,289 194 441 1,041 4 1,004 1,605 4,262 171 421 1,069 3 1,067 1,531 4,147 291 403 1,030 3 1,108 1,312 3,871 192 3% 1,011 3 1,140 1,129 3,731 151 3% 924 3 1,128 1,129 3,626 151 420 803 3 1,134 1,115 64 Other 65 Australia Other 66 1,892 1,413 479 2,306 1,665 641 3,007 2,263 744 2,447 1,601 846 3,007 2,263 744 2,632 1,8% 736 3,345 2,552 793 3,753 3,117 636 3,251 2,635 616 3,208 2,534 674 67 Nonmonetary international and regional organizations 4,793 6,283 5,082 2,881 5,082 3,100 4,108 3,322 2,417 1,682 24 Canada 45 46 47 48 49 50 51 57 53 54 55 56 57 58 59 60 61 67 63 China People's Republic of China Republic of China (Taiwan) Korea (South) Thailand < Middle Eastern oil-exporting countries 5 Other Egypt South Africa Zaire Oil-exporting countries Other 1. Reporting banks include all types of depository institutions, as well as some brokers and dealers. 2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 3. Includes the Bank for International Settlements and Eastern European countries not listed in line 23. Since December 1992, has included, in addition, all former parts of the U.S.S.R. (except Russia), and Bosnia-Hercegovina, Croatia, and Slovenia. 4. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. 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 E u r o p e . " Nonbank-Reported 3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS United States1 Payable in U.S. Dollars Data Reported by Banks in the Millions of dollars, end of period 1992r Claim 1990 579,044 1 Total 1991 579,683 1993 1992r Feb/ Mar. r 555,799 525,833 495,761 31,245 299,916 109,788 60,949 48,839 54,812 495,033 30,349 305,438 102,737 50,634 52,103 56,509 473,944 33,631 290,671 97,320 49,134 48,186 52,322 Nov. Dec. 555,799 490,768 30,849 291,126 112,308 61,752 50,556 56,485 Jan. r 511,543 41,900 304,315 117,272 65,253 52,019 48,056 514,339 37,126 318,800 116,602 69,018 47,584 41,811 495,761 31,245 299,916 109,788 60,949 48,839 54,812 67,501 14,375 65,344 15,280 60,038 15,452 60,038 15,452 51,889 12,000 41,333 37,125 31,454 31,454 27,283 11,792 12,939 13,132 13,132 12,606 13 Customer liability on acceptances 13,628 8,974 8,700 8,700 7,876 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States 44,638 40,297 r 33,604 2 Banks' claims 3 Foreign public borrowers 4 Own foreign offices 5 Unaffiliated foreign banks 6 Deposits 7 Other 8 All other foreigners 9 Claims of banks' domestic c u s t o m e r s 3 . . . 10 Deposits 11 Negotiable and readily transferable instruments 12 Outstanding collections and other claims 484,670 32,972 291,819 101,868 52,707 49,161 58,011 Apr/ May" 469,559 30,631 285,196 97,805 47,940 49,865 55,927 458,629 29,483 280,311 94,729 47,310 47,419 54,106 33,501 n.a. MEMO 33,710 33,604 36,127 36,801 36,425 foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of head office or parent foreign bank. 3. Assets held by reporting banks in the accounts 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 Federal Reserve Bulletin, vol. 65 (July 1979), p. 550. 1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are quarterly. Reporting banks include all types of depository institution, as well as some brokers and dealers. 2. For U . S . banks, includes amounts due from own foreign branches and foreign subsidiaries consolidated in Consolidated Report of Condition filed with bank regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists principally of amounts due from head office or parent 3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Payable in U.S. Dollars Reported by Banks in the United States1 Millions of dollars, end of period 1992r Maturity, by borrower and area 2 1 Total 2 3 4 5 6 7 By borrower Maturity of one year or less Foreign public borrowers All other foreigners Maturity of more than one year Foreign public borrowers All other foreigners By area Maturity of one year or less Europe Canada Latin America and Caribbean Asia Africa All other 3 Maturity of more than one year 14 Europe 15 Canada 16 Latin America and Caribbean 17 18 Africa 19 All other 3 8 9 10 11 12 13 1989 1993 1991 June Sept. Dec. Mar. 238,123 206,903 195,302 196,776 187,272 195,517 182,949 178,346 23,916 154,430 59,776 36,014 23,762 165,985 19,305 146,680 40,918 22,269 18,649 162,573 21,050 141,523 32,729 15,859 16,870 162,382 20,400 141,982 34,394 15,165 19,229 155,072 17,739 137,333 32,200 13,314 18,886 163,873 17,689 146,184 31,644 13,268 18,376 152,965 21,140 131,825 29,984 12,199 17,785 53,913 5,910 53,003 57,755 3,225 4,541 49,184 5,450 49,782 53,258 3,040 5,272 51,835 6,444 43,597 51,059 2,549 7,089 55,123 7,986 48,983 41,343 2,127 6,820 55,964 5,949 45,241 40,664 2,183 5,071 53,865 6,118 50,316 45,726 1,784 6,064 55,526 7,932 45,117 37,935 1,680 4,775 4,121 2,353 45,816 4,172 2,630 684 3,859 3,290 25,774 5,165 2,374 456 3,878 3,595 18,277 4,459 2,335 185 6,752 3,158 16,847 5,018 2,356 263 6,624 3,227 15,111 4,853 2,107 278 5,380 3,290 15,159 5,015 2,390 410 4,896 3,139 14,386 5,033 2,094 436 1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers. 1990 2. Maturity is time remaining to maturity, 3. Includes nonmonetary international and regional organizations. A61 A62 International Statistics • September 1993 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1 Billions of dollars, end of period 1989 1990 Mar. 1 Total 6 Italy 19 20 21 Portugal Spain Turkey 23 South Africa 25 OPEC 2 Latin 33 34 Brazil Chile 37 38 Peru Other 1993 1992 1991 Area or country r June r Sept. Mar. Dec. r 349.8 June r Sept. Mar. Dec. r 340.9" 320. l 322.3" 338.4" 343.6 357.4 343.9 345.6 152.9 6.3 11.7 10.5 7.4 3.1 2.0 7.1 67.2 5.4 32.3 r 132.2" 5.9 10.4 10.6 5.0 3.0 2.2 4.4 60.9" 5.9 24.0" 129.3" 6.2 9.7 8.8 4.0 3.3 2.0 3.7 61.7" 6.8 23.2 130.3" 6.1 10.5 8.3 3.6 3.3 2.5 3.3 59.5 8.2 25.1" 135.0" 5.8 11.1 9.7 4.5 3.0 2.1 3.9 65.6" 5.8 23.5" 137.6" 6.0 11.0 8.3 5.6 4.7 1.9 3.4 68.5 5.8 22.6" 131.1 5.3 10.0 8.4 5.4 4.3 2.0 3.2 64.8 6.6 21.1 136.3 6.2 12.0 8.8 8.0 3.3 1.9 4.6 65.9 6.7 18.7 137.5 6.2 15.5 10.9 6.4 3.7 2.2 5.2 61.9" 6.7 18.9 134.0 5.6 15.4 9.3 6.5 2.8 2.3 4.8 61.4 6.6 19.2 144.1 5.9 13.7 10.0 6.8 3.7 3.0 5.4 66.5 8.6 20.5 21.0 1.5 1.1 1.0 2.5 1.4 .4 7.1 1.2 1.0 2.0 1.6 22.9 1.4 1.1 .7 2.7 1.6 .6 8.3 1.7 1.2 1.8 1.8 23.5 1.4 .9 1.0 2.5 1.5 .6 9.0 1.7 1.2 1.8 1.9 21.3 1.1 1.2 .8 2.4 1.5 .6 7.1 1.9 1.1 1.8 2.0 22.1 1.0 .9 .6 2.3 1.4 .5 8.3 1.6 1.3 1.6 2.4 22.8 .6 .9 .7 2.6 1.4 .6 8.3 1.4 1.8 1.9 2.7 21.5 .8 .8 .8 2.3 1.5 .5 7.7 1.2 1.5 1.8 2.3 25.5 .8 1.3 .8 2.8 1.7 .5 10.1 1.5 2.0 1.7 2.3 25.1 .8 1.5 1.0 3.0 1.6 .5 9.8 1.5 1.5 1.7 2.3 24.1 1.2 .9 .7 3.0 1.2 .4 9.0 1.3 1.7 1.7 2.9 25.6 1.5 .8 .7 2.8 1.8 .7 9.6 1.4 2.0 1.6 2.8 17.1 1.3 7.0 2.0 5.0 1.7 12.8 1.0 5.0 2.7 2.5 1.7 17.1 .9 5.1 2.8 6.6 1.6 14.0 .9 5.3 2.6 3.7 1.5 15.6 .8 5.6 2.8 5.0 1.5 14.5" .7 5.4 2.7" 4.2 1.5 15.8 .7 5.4 3.0 5.3 1.4 16.2 .7 5.3 3.0 5.9 1.4 15.9 .7 5.4 3.0 5.4 1.4 16.1 .6 5.2 3.0 6.2 1.1 16.7 .6 5.3 3.1 6.7 1.0 77.5 65.4 66.4 64.4" 64.7" 63.9" 69.7" 68.1 72.9 72.2 74.3 6.3 19.0 4.6 1.8 17.7 .6 2.8 5.0 14.4 3.5 1.8 13.0 .5 2.3 4.7 13.9 3.6 1.7 13.7 .5 2.2 4.6 11.6 3.6 1.6 14.3 .5 2.0 4.5 10.5 3.7 1.6 16.2 .4 1.9 4.8 9.6 3.6 1.7 15.5 .4 2.1 5.0 10.8 3.9 1.6 17.7" .4 2.2 5.1 10.6 4.0 1.6 16.3 .4 2.2 6.2 10.8 4.2 1.7 17.1 .5 2.5 6.6 10.8 4.4 1.8 16.0 .5 2.6 7.0 11.6 4.6 1.9 16.8 .4 2.6 .3 4.5 3.1 .7 5.9 1.7 4.1 1.3 1.0 .2 3.5 3.3 .5 6.2 1.9 3.8 1.5 1.7 .4 3.6 3.5 .5 6.8 2.0 3.7 1.6 2.1 .3 4.8 3.6 .4 6.9 2.5 3.6 1.7 2.3 .3 4.6 3.8 .4 6.9 2.7 3.1 1.9 2.5 .3 5.0 3.6 .4 7.4 3.0 3.6 2.2 2.7 .7 5.2 3.2 .4 6.6 3.0 3.6 2.2 2.7 .6 5.3 3.1 .5 6.5 3.3 3.4 2.2 2.7 .4 .8 .0 1.0 America Asia China 326.6 360.6 .6 4.1 3.0 .5 6.9 2.1 3.7 1.7 1.8" .4 4.1 2.8 .5 6.5 2.3 3.6 1.9 2.0" .3 4.1 3.0 .5 6.8 2.3 3.7 1.7 2.0" .4 .8 .0 .8 .4 .7 .0 .8 .4 .7 .0 .8 .4 .7 .0 .7 .3 .7 .0 .7 .5 .7 .0 .6 .3 .6 .0 .9 .2 .6 .0 1.0 .2 .5 .0 1.0 2.9" 1.7 .6 .7 43 Korea (South) 46 47 Thailand Other Asia 3 48 Africa Egypt 51 Other Africa 3 .4 .9 .0 1.0 Other 3.5 .7 1.6 1.3 2.3 .2 1.2 .9 2.1 .3 1.0 .8 2.1 .4 1.0 .7 1.8 .4 .8 .7 2.4 .9 .9 .7 2.9 1.4 .8 .6 3.0 1.7 .7 .6 3.1 1.8 .7 .7 3.1 1.9 .6 .6 Other 38.4 r 5.5 1.7 9.0 2.3 1.4 .1 11.3" 7.0 .0 44.7" 2.9" 4.4 11.7" 7.9 1.4 .1 9.7" 6.6 .0 51.9" 8.3 4.4 14.1 1.1 1.5 .1 13.5" 8.9 .0 50.2" 6.8 4.2 14.9 1.4 1.3 .1 14.3" 7.2 .0 54.6" 6.7 7.1 13.8 3.9 1.3 .1 14.0" 7.7 .0 54.2" 11.9 2.3 15.8 1.2 1.4" .1 14.4" 7.1 .0 60.9" 14.5" 3.9 17.4 1.0 1.4" .1 14.0" 8.5 .0 59.4 12.2 5.1 18.1 .8 1.7 .1 15.0 6.4 .0 52.3 8.1 3.8 15.7 .7 1.8 .1 15.2 6.8 .0 55.0" 5.6 6.2 19.9" 1.1 1.7 .1 13.8 6.5 .0 57.5 8.3 4.1 16.4 1.6 1.9 .1 16.7 8.4 .0 30.5" 39.9" 36.4 40.0" 44.4" 48.0" 47.8" 48.6 36.8 41.0 39.3 55 65 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). Since June 1984, 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. 2. 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). 3. Excludes Liberia. 4. Includes Canal Zone. 5. Foreign branch claims only. 6. Includes New Zealand, Liberia, and international and regional organizations. Nonbank-Reported Data A63 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1989 1990 1993 1992 1991 Type of liability and area or country 1991r Dec. Mar. June Sept. Dec. Mar.P 1 38,764 46,043 43,453 43,453' 44,193' 44,109' 45,184' 43,144' 43,146 ? Payable in dollars 3 Payable in foreign currencies 33,973 4,791 40,786 5,257 38,061 5,392 38,061 r 5,392 38,735 r 5,458 37,616' 6,493' 36,792' 8,392' 35,739' 7,405 35,251 7,895 By type 4 Financial liabilities 5 Payable in dollars 6 Payable in foreign currencies 17,879 14,035 3,844 21,066 16,979 4,087 21,872 17,760 4,112 21,872 r 17,76c 4,112 22,185' 17,957' 4,228 21,756' 16,714' 5,042' 23,281' 16,546' 6,735' 22,047' 15,700' 6,347 22,290 15,760 6,530 7 Commercial liabilities 8 Trade payables 9 Advance receipts and other liabilities 20,885 8,070 12,815 24,977 10,683 14,294 21,581 8,662 12,919 21,581 r 8,662 r 12.9191 22,008' 9,125' 12,883' 22,353' 9,715' 12,638' 21,903' 9,586' 12,317' 21,097 9,046' 12,051' 20,856 9,437 11,419 19,938 947 23,807 1,170 20,301 1,280 20,301 r 1,280 20,778' 1,230 20,902' 1,451 20,246' 1,657' 20,039' 1,058 19,491 1,365 11,660 340 258 464 941 541 8,818 10,978 394 975 621 1,081 545 6,357 11,805 217 2,106 682 1,056 408 6,329 11,805r 217 2,106 682 1,056 408 6,329 r 12,349' 174 1,997 666 1,025 355 7,238' 12,728' 194 2,324 634' 979 490 7,244' 13,767' 256 2,785 738' 980 627 7,580' 12,53c 434' 1,608 740 606 569 7,910' 12,694 299 1,610 751 639 503 8,331 610 229 267 267 10 11 1? n 14 15 16 17 18 19 70 ?1 ?? 73 74 7,5 26 77 78 29 Payable in dollars Payable in foreign currencies By area or country Financial liabilities Europe Belgium and Luxembourg Germany Netherlands Switzerland United Kingdom Canada Latin America and Caribbean Bahamas Bermuda Brazil British West Indies Mexico Venezuela Japan Middle East oil-exporting countries 30 31 Africa Oil-exporting countries 3 32 Mother4 Commercial liabilities 33 Europe 34 Belgium and Luxembourg 35 36 Germany Netherlands 37 38 39 United Kingdom 40 41 4? 43 44 45 46 47 Latin America and Caribbean Bahamas Bermuda Brazil British West Indies Venezuela 48 49 50 Middle Eastern oil-exporting countries ' 51 52 Oil-exporting countries 3 53 2 3 Other 4 283 337 320 491 551 1,357 157 17 0 724 6 0 4,153 371 0 0 3,160 5 4 4,404 537 114 6 3,144 7 4 4,404 537 114 6 3,144' 7 4 4,092' 3% 114 8 2,96C 7 4 3,373' 343 114 10 2,232' 8 4 3,462' 220 115 18 2,408' 12 5 3,515' 349 114 19 2,342' 12 6 3,544 594 114 18 2,142 13 5 4,151 3,299 2 5,295 4,065 5 5,338 4,102 13 5,338 4,102 13 5,366 4,107 13 5,229' 4,136' 10 5,642' 4,609' 17 5,477' 4,451 19 5,451 4,479 24 2 0 2 0 6 4 6 4 7 6 0 0 5 0 6 0 6 0 100 409 52 52 88 89 85 28 44 9,071 175 877 1,392 710 693 2,620 10,310 275 1,218 1,270 844 775 2,792 8,126 248 957 944 709 575 2,310 8,126 r 248 957r 944 709 575r 2,310 7,666' 256 678 880 574 543' 2,445 7,309 r 240 659 702 605 461' 2,404 6,879 r 173 688 744 601 430' 2,262 6,704' 287 663 621' 556 398 2,250 6,471 143 653 613 666 504 2,041 892' 915 1,586 6 293 203 57 444 130 1,548 18 437 107 87 343 158 10,787' 3,994 1,792' 10,695 4,006 1,589 1,124 1,261 990 990 1,095 1,077 1,085 1,224 41 308 100 27 323 164 1,672 12 538 145 30 475 130 1,352 3 310 219 107 304 94 1,352 3 310 219 107 304 94 1,701 13 493 230 108 375 168 1,803 8 409 212 73 475 279 1,4%' 3 338 115 85 322 125' 7,550 2,914 1,632 9,483 3,651 2,016 9,330 3,720 1,498 9,330 3,720 1,498 9,890 3,549 1,591 10,439 3,537 1,778 11,006 3,909 1,813 886 339 844 422 713 327 713 327 644 253 775 389 675 335' 556 295 559 224 1,030 1,406 1,070 1,070 1,012 950 762 572 668 1. F o r a description of the changes in the international statistics tables, see Federal Reserve Bulletin, vol. 65, (July 1979), p. 550. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). r 3. Comprises Algeria, Gabon, Libya, and Nigeria. 4. Includes nonmonetary international and regional organizations. 5. Revisions include a reclassification of transactions, which also affects the totals for Asia and the grand totals. A64 International Statistics • September 1993 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS the United States1 Reported by Nonbanking Business Enterprises in Millions of dollars, end of period 1991r Type, and area or country 1989 1990 1992r 1993 1991 Dec. Mar. June Sept. Dec. Mar.P 1 Total 33,173 35,348 42,233 42,233 40,899 41,037 38,345 38,039 40,567 2 Payable in dollars 3 Payable in foreign currencies 30,773 2,400 32,760 2,589 39,688 2,545 39,688 2,545 38,281 2,618 38,071 2,966 35,460 2,885 35,562 2,477 37,884 2,683 By type 4 Financial claims 5 Deposits 6 Payable in dollars 1 Payable in foreign currencies Other financial claims 8 9 Payable in dollars 10 Payable in foreign currencies 19,297 12,353 11,364 989 6,944 6,190 754 19,874 13,577 12,552 1,025 6,297 5,280 1,017 25,264 17,290 16,415 875 7,974 7,094 880 25,264 17,290 16,415 875 7,974 7,094 880 24,289 16,262 15,076 1,186 8,027 7,305 722 24,037 15,056 13,717 1,339 8,981 8,277 704 21,311 12,436 11,353 1,083 8,875 7,868 1,007 21,041 12,615 11,826 789 8,426 7,688 738 22,046 12,774 11,720 1,054 9,272 8,546 726 11 Commercial claims 12 Trade receivables 13 Advance payments and other claims 13,876 12,253 1,624 15,475 13,657 1,817 16,969 14,244 2,725 16,969 14,244 2,725 16,610 14,044 2,566 17,000 14,538 2,462 17,034 14,330 2,704 16,998 14,711 2,287 18,521 16,457 2,064 14 15 13,219 657 14,927 548 16,179 790 16,179 790 15,900 710 16,077 923 16,239 795 16,048 950 17,618 903 8,463 28 153 152 238 153 7,496 9,645 76 371 367 265 357 7,971 13,724 13 314 335 385 591 11,445 13,724 13 314 335 385 591 11,445 14,243 12 279 285 727 682 11,669 13,225 25 788 377 732 780 8,789 11,433 16 811 319 767 602 7,915 9,514 8 776 399 537 507 6,130 10,295 5 909 437 581 493 6,838 16 17 18 19 20 21 22 Payable in dollars Payable in foreign currencies By area or country Financial claims Europe Belgium and Luxembourg France Germany Netherlands Switzerland United Kingdom 23 Canada 1,904 2,934 2,716 2,716 2,753 2,533 2,245 1,721 2,086 24 25 26 27 28 29 30 Latin America and Caribbean Bahamas Bermuda Brazil British West Indies Mexico Venezuela 8,020 1,890 7 224 5,486 94 20 6,201 1,090 3 68 4,635 177 25 7,689 758 8 144 6,304 212 40 7,689 758 8 144 6,304 212 40 6,200 493 12 143 5,124 212 34 6,849 523 12 134 5,759 244 32 6,452 1,099 65 396 4,449 239 26 8,326 618 40 4% 6,530 286 29 5,647 302 79 592 4,213 235 23 31 32 33 Asia Japan Middle East oil-exporting countries 2 590 213 8 860 523 8 675 385 5 675 385 5 642 380 3 975 728 4 727 481 4 846 683 3 3,263 3,066 8 34 35 Africa Oil-exporting countries 3 140 12 37 0 57 1 57 1 60 0 57 0 71 1 79 9 128 1 180 195 403 403 391 398 383 555 627 6,209 242 964 696 479 313 1,575 7,044 212 1,240 807 555 301 1,775 7,935 192 1,542 940 643 295 2,084 7,935 192 1,542 940 643 295 2,084 7,842 181 1,560 933 646 323 2,082 8,087 255 1,561 905 666 394 2,169 7,742 172 1,739 870 588 294 1,973 7,442 184 1,392 880 541 260 1,799 8,065 166 1,385 916 714 414 2,171 36 37 38 39 40 41 42 43 All other 4 Commercial claims Europe Belgium and Luxembourg France Germany Netherlands Switzerland United Kingdom 44 Canada 1,091 1,074 1,109 1,109 1,115 1,058 1,105 1,192 1,137 45 46 47 48 49 50 51 Latin America and Caribbean Bahamas Bermuda Brazil British West Indies Mexico Venezuela 2,184 58 323 297 36 508 147 2,375 14 246 326 40 661 192 2,562 11 263 418 41 801 202 2,562 11 263 418 41 801 202 2,544 11 272 364 45 865 206 2,653 9 291 438 32 829 251 3,113 7 245 395 43 942 302 2,827 18 237 336 39 837 317 3,255 8 194 809 17 898 320 52 53 54 Asia Japan Middle Eastern oil-exporting countries 2 3,570 1,199 518 4,127 1,460 460 4,558 1,878 621 4,558 1,878 621 4,343 1,782 635 4,456 1,786 609 4,300 1,793 511 4,649 1,850 677 5,248 2,129 764 55 56 Africa Oil-exporting countries 3 429 108 48$ 67 418 95 418 95 418 75 422 73 430 60 540 78 446 75 57 Other 4 393 367 387 387 348 324 344 348 370 1. For a description of the changes in the international statistics tables, see Federal Reserve Bulletin, vol. 65, (July 1979), 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 A65 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1992r 1993 Transaction and area or country 1991 1992 1993 r Jan.May Nov. Dec. Jan. r Feb. r Mar. r Apr/ May p 28,753 25,980 27,013 24,548 25,009 25,329 23,021 22,223 U.S. corporate securities STOCKS 211,207 200,116 1 Foreign purchases 2 Foreign sales 221,307 226,428 122,966 117,433 17,708 16,426 22,725 20,382 19,170 19,353 3 Net purchases or sales (—) 11,091 -5,121 5,533 1,282 2,343 -183 2,773 2,465 -320 798 4 Foreign countries 10,522 -5,154 5,287 1,279 2,319 -178 2,683 2,308 -328 802 53 9 -63 -227 -131 -352 3,845 2,177 -134 4,255 1,179 153 174 -4,912 -1,350 -65 -262 168 -3,301 1,407 2,203 -88 -3,943 -3,598 10 169 2,022 -225 440 187 1,388 -559 -124 1,236 -105 2,147 -422 -5 116 368 -54 46 -5 -39 361 42 647 -219 374 220 -18 85 1,505 -154 162 190 221 705 176 422 70 122 215 -7 31 52 -25 91 64 205 -350 -341 305 -92 -123 28 17 2,271 223 97 -11 501 1,135 57 -235 -65 593 -624 27 35 975 -183 103 68 356 476 176 410 -13 763 250 2 -5 -645 -154 144 32 277 -1,134 103 241 7 1 -531 -48 13 -631 -86 5 34 49 -686 -119 515 58 913 455 10 56 568 33 246 3 24 -5 90 157 8 -4 153,096 125,637 215,041 175,560 104,652 89,117 18,083 16,318 19,264 15,391 17,220 15,454 21,934 18,8% 25,223 23,275 20,728 16,233 19,547 15,259 21 Net purchases or sales ( - ) 27,459 39,481 15,535 1,765 3,873 1,766 3,038 1,948 4,495 4,288 22 Foreign countries 27,590 38,365 15,948 1,600 3,328 1,862 3,164 2,084 4,536 4,302 23 24 25 26 27 28 29 30 31 32 33 34 35 13,112 847 1,577 482 656 8,931 1,623 2,672 1,787 8,459 5,767 52 -116 17,836 1,203 2,486 540 -579 12,836 237 9,300 3,166 7,545 -450 354 -73 5,156 1,590 1,127 -329 -355 3,011 159 3,285 1,389 5,814 2,777 206 -61 -494 -7 -113 144 -261 -313 281 542 515 692 266 68 2,118 217 857 48 105 962 -38 513 360 119 9 302 -46 1,090 101 91 -119 122 334 -437 419 300 305 190 168 17 2,143 311 52 -133 -38 2,376 145 482 248 149 61 27 -30 27 75 -57 -178 11 -229 138 490 263 1,216 595 -10 -40 1,079 508 811 108 -239 394 291 632 463 2,082 991 0 -11 817 595 230 -7 -211 136 22 1,262 115 2,062 940 21 3 -131 1,116 -413 165 545 -96 -126 -136 -41 -14 -1,571 15,055 16,626 -9,528 56,046 65,574 -4,565 17,447 22,012 -4,629 70,126 74,755 -4,006 19,291 23,297 -810 55,752 56,562 -3,745 16,395 20,140 -26 59,443 59,469 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 1 Other Asia Japan Africa Other countries 18 Nonmonetary international and regional organizations 4 BONDS2 19 Foreign purchases 20 Foreign sales Europe France Germany Netherlands Switzerland United Kingdom Canada Latin America and Caribbean Middle East 1 Other Asia Japan Africa Other countries 36 Nonmonetary international and regional organizations - 4 Foreign securities 37 Stocks, net purchases or sales ( - ) 3 38 Foreign purchases 39 Foreign sales 3 40 Bonds, net purchases or sales ( - ) 41 Foreign purchases 42 Foreign sales -31,967 120,598 152,565 -14,828 330,311 345,139 -32,268 150,022 182,290 -18,277 486,238 504,515 -16,238 80,920 97,158 -20,100 279,912 300,012 -3,704 11,673 15,377 -715 52,281 52,996 -4,376 12,782 17,158 -2,866 39,617 42,483 -2,351 12,732 15,083 -5,107 38,545 43,652 43 Net purchases or sales ( - ) , of stocks and bonds -46,795 -50,545 -36,338 -4,419 -7,242 -7,458 -11,099 -9,194 -4,816 -3,771 44 Foreign countries -46,711 -53,881 -35,812 -4,492 -7,1% -6,451 -11,237 -8,925 -5,088 -4,111 45 46 47 48 49 50 -34,452 -7,004 759 -7,350 -9 1,345 -37,557 -6,635 -2,298 -6,629 -2 -760 -23,875 -9,020 507 -3,043 -226 -155 -4,958 575 -1,672 1,529 42 -8 -4,507 -1,167 511 -1,678 -11 -344 -6,486 -161 195 -394 -7 402 -6,669 -5,028 25 539 3 -107 -3,084 -3,034 68 -2,477 -18 -380 -2,773 -816 -904 -528 -18 -49 -4,863 19 1,123 -183 -186 -21 -84 3,336 -526 73 -46 -1,007 138 -269 272 340 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 securities sold abroad by U.S. corporations organized to finance direct investments abroad. 3. In a July 1989 merger, the former stockholders of a U . S . company received $5,453 million in shares of the new combined U . K . company. This transaction is not reflected in the data. A66 International Statistics • September 1993 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1993 Country or area 1991 1993 1992 1992 Jan.May Nov. Dec. r Jan/ Feb/ Mar/ Apr/ May" Transactions, net purchases or sales ( - ) during period 1 19,865 39,288r 19,687 37,935r 3 Europe 4 Belgium and Luxembourg 5 Germany 6 Netherlands 7 Sweden 8 Switzerland 9 United Kingdom 10 Other Western Europe Eastern Europe 11 12 Canada 8,663 523 -4,725 -3,735 -663 1,007 6,218 10,024 13 -3,019 r 19,625 1,985 2,076 —2,959" -804 488 r 24,184 -5,995 r 650 562 -3,056 798 -8,470 251 213 -2,835 8,546 -2,028 469 7,783 13 Latin America and Caribbean 14 Venezuela Other Latin America and Caribbean 15 16 Netherlands Antilles 17 18 Japan 19 20 10,285 10 4,179 6,097 3,367 -4,081 689 -298 -3,222 r 539 -l,956r -1,805 23,517r 9,817 1,103 -3,650" 1 Estimated total 2 Foreign countries 21 Nonmonetary international and regional organizations 22 International Latin American regional 23 Oil-exporting countries 27 Middle E a s t 2 28 439 -1,273 6,129 4,369 -853 17,644" -144 -2,166 5,577 4,513 -589 7,267" 370 -1,584 1,827 668 1,334 7,209 -2,775" 218 -1,087 3,173 -28 898 -804 -344 213 2,833 405 0 -99 -600 -59 697 -1,238 -54 -199 2,025 -1,774 2 3,302 -382 45 -1,632 206 258 -455 183 975 38 82 -3,826 622 -2,757 66 -540 -1,569 672 -509 189 2,490 1,615 -345 -1,382 731 -100 -721 2,662 631 139 1,386 137 535 -3,396 486 649 109 3,004 -1,351 101 523 -7,489 384 -6,205 -1,668 11,839 10,177 -173 -1,713 7,270 27 2,385 4,858 4,000 3,383 119 75 -4,519 11 415 -4,945 1,184 2,201 0 73 -1,495 -175 -3,309 1,989 -1,136 -743 -33 -182 445 179 -1,656 1,922 -1,032 804 -139 -1,140 -537 154 -471 -220 7,215 3,457 -66 301 -2,015 74 1,101 -3,190 3,831 3,348 67 -371 -3,887 152 -1,870 -2,169 2,961 3,311 -2 -321 1,620 354 505 -13 -38 -31 202 76 97 583 228 270 893 581 235 552 56 1 -144 -211 16 -264 -300 -17 -188 -715 527 -144 -2,980 2,836 -2,166 -4,364 2,198 5,577 -657 6,234 4,513 2,586 1,927 -589 -3,287 2,698 505 0 -238 8 -1,855 0 811 0 100 -6 -1,128 0 7,191 1,353 1,018 533 19,687 1,190 18,496 37,935r 6,876 31,059" 7,191 -8,702 15,893 -6,822 239 4,317" 11 -2,310 2 1. Official and private transactions in marketable U.S. Treasury securities having an original maturity of more than one year. Data are based on monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign countries. 14 -188 178 -358 -72 MEMO 24 Foreign countries Official institutions 25 Other foreign 2 26 17,631" 8,811 17,644" -620" 18,264 407 0 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States), 3. Comprises Algeria, Gabon, Libya, and Nigeria, Interest and Exchange Rates A67 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS 1 Percent per year Rate on July 31, 1993 Rate on July 31, 1993 Country Rate on July 31, 1993 Country Percent 6.25 6.0 4.41 9.25 Austria.. Belgium . Canada.. Denmark France . . 10.0 Country Month effective July July July July July 1993 1993 1993 1993 1993 Percent Germany... Italy Japan Netherlands 6.75 9.0 2.5 6.0 1. Rates shown are mainly those at which the central bank either discounts or makes advances against eligible commercial paper or government securities for 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 that the central bank transacts the largest proportion of its credit operations. Month effective July July July July 1993 1993 1992 1993 Norway Switzerland United Kingdom Percent Month effective 7.5 4.5 12.0 July 1993 July 1993 Sept. 1992 2. Since February 1981, the rate has been that at which the Bank of France discounts Treasury bills for seven to ten days. 3.27 FOREIGN SHORT-TERM INTEREST RATES1 Percent per year, averages of daily figures 1993 Type or country 8 Italy 1990 8.16 14.73 13.00 8.41 8.71 8.57 10.20 12.11 9.70 7.75 1991 5.86 11.47 9.07 9.15 8.01 9.19 9.49 12.04 9.30 7.33 1992 3.70 9.56 6.76 9.42 7.67 9.25 10.14 13.91 9.31 4.39 1. Rates are for three-month interbank loans, with the following exceptions: Canada, finance company paper; Belgium, three-month Treasury bills; and Japan, CD rate. Jan. Feb. Mar. Apr. May June July 3.22 6.88 7.03 8.50 5.52 8.00 11.69 12.56 8.19 3.70 3.12 6.10 6.38 8.29 5.34 7.98 11.70 11.43 8.75 3.27 3.11 5.91 5.59 7.85 5.05 7.47 10.89 11.26 8.27 3.26 3.10 5.90 5.43 7.81 4.97 7.43 8.73 11.41 7.94 3.22 3.12 5.91 5.29 7.41 4.97 6.98 7.48 10.74 7.16 3.24 3.21 5.83 4.91 7.51 4.99 6.64 7.19 10.18 6.87 3.23 3.17 5.88 4.48 7.12 4.62 6.45 7.72 9.42 7.12 3.22 A68 International Statistics • September 1993 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted Country/currency unit 1 2 3 4 5 6 7 8 9 10 Australia/dollar^ Austria/schilling Belgium/franc Canada/dollar China, P.R./yuan Denmark/krone Finland/markka France/franc Germany/deutsche mark. Greece/drachma 11 12 13 14 15 16 17 18 19 20 Hong Kong/dollar India/rupee Ireland/pound 2 Italy/lira Japan/yen Malaysia/ringgit Netherlands/guilder. New Zealand/dollar 2 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/pound 2 — 1990 1991 1992 Feb. Mar. Apr. 68.294 11.556 33.841 71.155 11.234 32.857 1.2621 5.7202 6.1339 5.6190 5.3984 1.5964 217.90 78.069 11.331 33.424 1.1668 4.7921 6.1899 3.8300 5.4467 1.6166 158.59 77.872 11.686 34.195 1.1460 5.3337 6.4038 4.0521 5.6468 1.6610 182.63 73.521 10.992 32.148 1.2085 5.5206 6.0372 4.4865 5.2935 1.5618 190.81 5.7874 6.3019 5.8534 5.5594 1.6414 220.60 70.775 11.586 33.919 1.2471 5.7455 6.3242 5.9767 5.5944 1.6466 223.57 7.7899 17.492 165.76 1,198.27 145.00 2.7057 1.8215 59.619 6.2541 142.70 7.7712 22.712 161.39 1,241.28 134.59 2.7503 1.8720 57.832 6.4912 144.77 7.7402 28.156 170.42 1,232.17 126.78 2.5463 1.7587 53.792 6.2142 135.07 7.7335 30.042 148.11 1,550.43 120.76 2.6295 1.8473 51.603 6.9779 149.89 7.7332 31.939 147.58 1,591.35 117.02 2.6051 1.8507 53.026 6.9989 152.17 7.7306 31.610 152.75 1,536.14 112.41 2.5777 1.7942 53.904 6.7399 148.25 1.8134 2.5885 710.64 101.96 40.078 5.9231 1.3901 26.918 25.609 178.41 1.7283 2.7633 736.73 104.01 41.200 6.0521 1.4356 26.759 25.528 176.74 1.6294 2.8524 784.58 102.38 44.013 5.8258 1.4064 25.160 25.411 176.63 1.6463 3.1313 799.25 117.51 46.351 7.5566 1.5178 25.837 25.508 143.95 1.6446 3.1790 796.42 117.71 47.069 7.7362 1.5206 26.026 25.425 146.17 1.6228 3.1718 798.61 115.64 47.712 7.4500 1.4599 25.987 25.251 154.47 89.09 89.84 86.61 1.2602 July May 67.492 11.637 34.009 1.2789 5.7504 6.3380 5.5674 5.5700 1.6547 225.45 67.788 12.071 35.483 1.2820 5.7756 6.6531 5.7852 5.8464 1.7157 234.77 7.7290 31.613 151.65 1,475.66 110.34 2.5661 1.8026 54.290 6.8027 151.89 7.7362 31.668 147.47 1,505.05 107.41 2.5696 1.8559 53.949 6.9986 157.63 7.7556 31.600 140.83 1,586.02 107.69 2.5672 1.9299 54.900 7.3179 167.87 1.6136 3.1787 803.19 121.30 47.965 7.3271 1.4504 25.978 25.234 154.77 1.6175 3.2408 805.91 127.11 48.073 7.4541 1.4769 26.267 25.214 150.82 1.6206 3.3518 809.58 134.93 48.643 7.9802 1.5147 26.682 25.331 149.55 91.81 94.59 69.859 11.305 33.044 1.2698 5.7392 6.1751 5.4847 5.4180 1.6071 218.12 MEMO 31 United States/dollar 3 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) monthly statistical release. For ordering address, see inside front cover. 2. Value in U.S. cents. 3. Index of weighted-average exchange value of U.S. dollar against the currencies of ten industrial countries. The weight for each of the ten countries is 93.82 90.62 the 1972-76 average world trade of that country divided by the average world trade of all ten countries combined. Series revised as of August 1978 (see Federal Reserve Bulletin, vol. 64 (August 1978), p. 700). A69 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest B U L L E T I N Reference Anticipated schedule of release dates for periodic releases Issue June 1993 Page A78 SPECIAL TABLES—Quarterly Data Published Irregularly, with Latest B U L L E T I N Reference Title and Date Issue Page Assets and liabilities of commercial banks June 30, 1992 September 30, 1992 December 31, 1992 March 31, 1993 November February May August 1992 1993 1993 1993 A70 A70 A70 A70 Terms of lending at commercial banks August 1992 November 1992 February 1993 May 1993 November February May August 1992 1993 1993 1993 A76 A76 A76 A76 Assets and liabilities of U.S. branches and agencies of foreign banks June 30, 1992 September 30, 1992 December 31, 1992 March 31, 1993 November February May August 1992 1993 1993 1993 A80 A80 A80 A80 Pro forma balance sheet and income statements for priced service operations June 30, 1991 September 30,1991 March 30, 1992 June 30, 1992 November January August October 1991 1992 1992 1992 A80 A70 A80 A70 Assets and liabilities of life insurance companies June 30, 1991 September 30, 1991 December 31, 1991 September 30, 1992 December May August March 1991 1992 1992 1993 A79 A81 A83 A71 A70 Index to Statistical Tables References are to pages A3-A68 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Agricultural loans, commercial banks, 22,23 Assets and liabilities (See also Foreigners) Banks, by classes, 20-23 Domestic finance companies, 36 Federal Reserve Banks, 11 Financial institutions, 28 Foreign banks, U.S. branches and agencies, 24 Automobiles Consumer installment credit, 39 Production, 47,48 BANKERS acceptances, 10, 23, 26 Bankers balances, 20-23. (See also Foreigners) Bonds (See also U.S. government securities) New issues, 35 Rates, 26 Branch banks, 24, 55 Business activity, nonfinancial, 45 Business expenditures on new plant and equipment, 35 Business loans (See Commercial and industrial loans) CAPACITY utilization, 46 Capital accounts Banks, by classes, 20 Federal Reserve Banks, 11 Central banks, discount rates, 67 Certificates of deposit, 26 Commercial and industrial loans Commercial banks, 18, 22 Weekly reporting banks, 22-24 Commercial banks Assets and liabilities, 20-23 Commercial and industrial loans, 18, 20, 21, 22, 23, 24 Consumer loans held, by type and terms, 39 Deposit interest rates of insured, 16 Loans sold outright, 22 Nondeposit funds, 19 Real estate mortgages held, by holder and property, 38 Time and savings deposits, 4 Commercial paper, 25, 26, 36 Condition statements (See Assets and liabilities) Construction, 45, 49 Consumer installment credit, 39 Consumer prices, 45,46 Consumption expenditures, 52, 53 Corporations Nonfinancial, assets and liabilities, 35 Profits and their distribution, 35 Security issues, 34, 65 Cost of living (See Consumer prices) Credit unions, 39 Currency in circulation, 5, 14 Customer credit, stock market, 27 DEBITS to deposit accounts, 17 Debt (See specific types of debt or securities) Demand deposits Banks, by classes, 20-24 Demand deposits—continued Ownership by individuals, partnerships, and corporations, 24 Turnover, 17 Depository institutions Reserve requirements, 9 Reserves and related items, 4, 5, 6, 13 Deposits (See also specific types) Banks, by classes, 4, 20-23, 24 Federal Reserve Banks, 5, 11 Interest rates, 16 Turnover, 17 Discount rates at Reserve Banks and at foreign central banks and foreign countries (See Interest rates) Discounts and advances by Reserve Banks (See Loans) Dividends, corporate, 35 EMPLOYMENT, 45 Eurodollars, 26 FARM mortgage loans, 38 Federal agency obligations, 5, 10, 11, 12, 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 Treasuryfinancingof surplus, or deficit, 28 Treasury operating balance, 28 Federal Financing Bank, 28, 33 Federal funds, 7, 19, 22, 23, 24, 26, 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, 11 Discount rates (See Interest rates) U.S. government securities held, 5, 11, 12, 30 Federal Reserve credit, 5, 6, 11, 12 Federal Reserve notes, 11 Federally sponsored credit agencies, 33 Finance companies Assets and liabilities, 36 Business credit, 36 Loans, 39 Paper, 25, 26 Financial institutions, loans to, 22, 23, 24 Float, 51 Flow of funds, 40, 42, 43, 44 Foreign banks, assets and liabilities of U.S. branches and agencies, 23, 24 Foreign currency operations, 11 Foreign deposits in U.S. banks, 5, 11, 22, 23 Foreign exchange rates, 68 Foreign trade, 54 Foreigners Claims on, 55, 57, 60, 61, 62, 64 Liabilities to, 23, 54, 55, 57, 58, 63, 65, 66 A71 GOLD Certificate account, 11 Stock, 5, 54 Government National Mortgage Association, 33, 37, 38 Gross domestic product, 51 HOUSING, new and existing units, 49 INCOME, personal and national, 45, 51, 52 Industrial production, 45, 47 Installment loans, 39 Insurance companies, 30, 38 Interest rates Bonds, 26 Consumer installment credit, 39 Deposits, 16 Federal Reserve Banks, 8 Foreign central banks and foreign countries, 67 Money and capital markets, 26 Mortgages, 37 Prime rate, 25 International capital transactions of United States, 53-67 International organizations, 57, 58, 60, 63, 64 Inventories, 51 Investment companies, issues and assets, 35 Investments (See also specific types) Banks, by classes, 20, 21, 22, 23, 24 Commercial banks, 4, 18, 20-23 Federal Reserve Banks, 11, 12 Financial institutions, 38 LABOR force, 45 Life insurance companies (See Insurance companies) Loans (See also specific types) Banks, by classes, 20-23 Commercial banks, 4, 18, 20-23 Federal Reserve Banks, 5, 6, 8, 11, 12 Financial institutions, 38 Insured or guaranteed by United States, 37, 38 MANUFACTURING Capacity utilization, 46 Production, 46, 48 Margin requirements, 27 Member banks (See also Depository institutions) Federal funds and repurchase agreements, 7 Reserve requirements, 9 Mining production, 48 Mobile homes shipped, 49 Monetary and credit aggregates, 4,13 Money and capital market rates, 26 Money stock measures and components, 4, 14 Mortgages (See Real estate loans) Mutual funds, 35 Mutual savings banks (See Thrift institutions) NATIONAL defense outlays, 29 National income, 51 OPEN market transactions, 10 PERSONAL income, 52 Prices Consumer and producer, 45, 50 Stock market, 27 Prime rate, 25 Producer prices, 45, 50 Production, 45,47 Profits, corporate, 35 REAL estate loans Banks, by classes, 18, 22, 23, 38 Terms, yields, and activity, 37 Type of holder and property mortgaged, 38 Repurchase agreements, 7, 19, 22, 23, 24 Reserve requirements, 9 Reserves Commercial banks, 20 Depository institutions, 4, 5, 6, 13 Federal Reserve Banks, 11 U.S. reserve assets, 54 Residential mortgage loans, 37 Retail credit and retail sales, 39,40,45 SAVING Flow of funds, 40,42,43, 44 National income accounts, 51 Savings and loan associations, 38, 39,40. (See also SAIF-insured institutions) Savings banks, 38, 39 Savings deposits (See Time and savings deposits) Securities (See also specific types) Federal and federally sponsored credit agencies, 33 Foreign transactions, 65 New issues, 34 Prices, 27 Special drawing rights, 5,11, 53, 54 State and local governments Deposits, 22, 23 Holdings of U.S. government securities, 30 New security issues, 34 Ownership of securities issued by, 22, 23 Rates on securities, 26 Stock market, selected statistics, 27 Stocks (See also Securities) New issues, 34 Prices, 27 Student Loan Marketing Association, 33 TAX receipts, federal, 29 Thrift institutions, 4. (See also Credit unions and Savings and loan associations) Time and savings deposits, 4, 14, 16, 19, 20, 21, 22, 23, 24 Trade, foreign, 54 Treasury cash, Treasury currency, 5 Treasury deposits, 5, 11, 28 Treasury operating balance, 28 UNEMPLOYMENT, 45 U.S. government balances Commercial bank holdings, 20, 21, 22, 23 Treasury deposits at Reserve Banks, 5, 11, 28 U.S. government securities Bank holdings, 20-23, 24, 30 Dealer transactions, positions, and financing, 32 Federal Reserve Bank holdings, 5, 11,12, 30 Foreign and international holdings and transactions, 11, 30, 66 Open market transactions, 10 Outstanding, by type and holder, 28, 30 Rates, 25 U.S. international transactions, 53-67 Utilities, production, 48 VETERANS Administration, 37, 38 WEEKLY reporting banks, 22-24 Wholesale (producer) prices, 45, 50 YIELDS (See Interest rates) A72 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman DAVID W . MULLINS, JR., Vice Chairman WAYNE D . ANGELL EDWARD W . KELLEY, JR. OFFICE OF BOARD MEMBERS JOSEPH R. COYNE, Assistant to the Board DONALD J. WINN, Assistant to the Board THEODORE E. ALLISON, Assistant to the Board for Federal Reserve System Affairs LYNN S. FOX, Special Assistant to the Board WINTHROP P. HAMBLEY, Special Assistant to the Board BOB STAHLY MOORE, Special Assistant to the Board DIANE E. WERNEKE, Special Assistant to the Board DIVISION OF INTERNATIONAL FINANCE EDWIN M . TRUMAN, Staff Director LARRY J. PROMISEL, Senior Associate Director CHARLES J. SIEGMAN, Senior Associate Director D A L E W . HENDERSON, Associate Director DAVID H . HOWARD, Senior Adviser DONALD B . ADAMS, Assistant Director PETER HOOPER H I , Assistant Director KAREN H . JOHNSON, Assistant Director RALPH W . SMITH, JR., Assistant Director LEGAL DIVISION J. VIRGIL MATTINGLY, JR., General Counsel SCOTT G. ALVAREZ, Associate General Counsel RICHARD M. ASHTON, Associate General Counsel OLIVER IRELAND, Associate General Counsel KATHLEEN M. O'DAY, Associate General Counsel MARYELLEN A. BROWN, Assistant to the General Counsel DIVISION OF RESEARCH AND STATISTICS Director EDWARD C . ETTIN, Deputy Director WILLIAM R . JONES, Associate Director THOMAS D . SIMPSON, Associate Director MICHAEL J. PRELL, LAWRENCE SLIFMAN, Associate Director Associate Director MARTHA BETHEA, Deputy Associate Director PETER A . TINSLEY, Deputy Associate Director MYRON L . KWAST, Assistant Director PATRICK M . PARKINSON, Assistant Director MARTHA S . SCANLON, Assistant Director JOYCE K . ZICKLER, Assistant Director DAVID J. STOCKTON, OFFICE OF THE SECRETARY WILLIAM W. WILES, Secretary JENNIFER J. JOHNSON, Associate Secretary BARBARA R. LOWREY, Associate Secretary ELLEN MALAND, Assistant Secretary DIVISION OF BANKING SUPERVISION AND REGULATION RICHARD SPILLENKOTHEN, Director STEPHEN C . SCHEMERING, Deputy Director D O N E . KLINE, Associate Director WILLIAM A . RYBACK, Associate Director FREDERICK M . STRUBLE, Associate Director HERBERT A . BIERN, Deputy Associate Director ROGER T. COLE, Deputy Associate Director JAMES I. GARNER, Deputy Associate Director HOWARD A . AMER, Assistant Director GERALD A . EDWARDS, JR., Assistant Director JAMES D . GOETZINGER, Assistant Director STEPHEN M . HOFFMAN, JR., Assistant Director LAURA M . HOMER, Assistant Director JAMES V . HOUPT, Assistant Director JACK P. JENNINGS, Assistant Director MICHAEL G . MARTINSON, Assistant Director RHOGER H PUGH, Assistant Director SIDNEY M . SUSSAN, Assistant Director MOLLY S . WASSOM, Assistant Director JOHN J. MINGO, Adviser LEVON H . GARABEDIAN, Assistant Director (Administration) DIVISION OF MONETARY AFFAIRS Director DAVID E . LINDSEY, Deputy Director BRIAN F. MADIGAN, Associate Director RICHARD D . PORTER, Deputy Associate Director DEBORAH DANKER, Assistant Director DONALD L . KOHN, NORMAND R . V . BERNARD, DIVISION OF Special Assistant to the Board CONSUMER AND COMMUNITY AFFAIRS GRIFFITH L . GARWOOD, Director G L E N N E . LONEY, Associate Director DOLORES S . SMITH, Associate Director MAUREEN P. ENGLISH, Assistant Director IRENE SHAWN MCNULTY, Assistant Director A73 JOHN P. LAWARE LAWRENCE B . LINDSEY SUSAN M . PHILLIPS OFFICE OF STAFF DIRECTOR FOR MANAGEMENT S . DAVID FROST, Staff Director WILLIAM SCHNEIDER, Special Assignment: Project Director, National Information Center PORTIA W . THOMPSON, Equal Employment Opportunity Programs Officer DIVISION OF RESERVE BANK OPERATIONS AND PAYMENT SYSTEMS CLYDE H . FARNSWORTH, JR., Director DAVID L . ROBINSON, Deputy Director (Finance and Control) CHARLES W . BENNETT, Assistant Director JACK DENNIS, JR., Assistant Director EARL G . HAMILTON, Assistant Director JEFFREY C . MARQUARDT, Assistant Director DIVISION OF HUMAN RESOURCES MANAGEMENT DAVID L . SHANNON, Director JOHN R . WEIS, Associate Director A N T H O N Y V. DIGIOIA, Assistant Director JOSEPH H . HAYES, JR., Assistant Director FRED HOROWITZ, Assistant Director OFFICE OF THE CONTROLLER Controller Assistant Controller (Programs and GEORGE E . LIVINGSTON, STEPHEN J. CLARK, Budgets) DARRELL R . PAULEY, Assistant Controller (Finance) DIVISION OF SUPPORT SERVICES Director GEORGE M . LOPEZ, Assistant Director DAVID L . WILLIAMS, Assistant Director ROBERT E . FRAZIER, DIVISION OF INFORMATION RESOURCES MANAGEMENT STEPHEN R . MALPHRUS, Director BRUCE M . BEARDSLEY, Deputy Director MARIANNE M. EMERSON, Assistant Po Director Assistant Director RAYMOND H . MASSEY, Assistant Director EDWARD T. MULRENIN, Assistant Director DAY W . RADEBAUGH, JR., Assistant Director ELIZABETH B . RIGGS, Assistant Director RICHARD C . STEVENS, Assistant Director K Y U N G KIM, JOHN H. PARRISH, Assistant Director Assistant Director YOUNG, Assistant Director LOUISE L . ROSEMAN, FLORENCE M . OFFICE OF THE INSPECTOR GENERAL BRENT L. BOWEN, Inspector General DONALD L. ROBINSON, Assistant Inspector General BARRY R. SNYDER, Assistant Inspector General 74 Federal Reserve Bulletin • September 1993 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS A L A N GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman WAYNE D . ANGELL EDWARD W . KELLEY, JR. DAVID W . MULLINS, JR. EDWARD G . BOEHNE JOHN P. LAWARE SUSAN M . PHILLIPS SILAS KEEHN LAWRENCE B . LINDSEY GARY H . STERN ROBERT D . MCTEER, JR. ALTERNATE J. ALFRED BROADDUS, JR. JERRY L . JORDAN ROBERT P. FORRESTAL JAMES H . OLTMAN MEMBERS ROBERT T. PARRY STAFF DONALD L. KOHN, Secretary NORMAND R . V . BERNARD, and RICHARD W. LANG, Associate Economist DAVID E. LINDSEY, Associate Economist LARRY J. PROMISEL, Associate Economist ARTHUR J. ROLNICK, Associate Economist HARVEY ROSENBLUM, Associate Economist KARL A. SCHELD, Associate Economist Economist CHARLES J. SIEGMAN, Associate THOMAS D. SIMPSON, Associate Economist LAWRENCE SLIFMAN, Associate Economist Economist Deputy Secretary JOSEPH R. COYNE, Assistant Secretary GARY P. GILLUM, Assistant Secretary J. VIRGIL MATTINGLY, JR., General Counsel ERNEST T. PATRIKIS, Deputy General Counsel MICHAEL J. PRELL, Economist EDWIN M. TRUMAN, Economist RICHARD G. DAVIS, Associate Economist Deputy Manager for Foreign Operations Deputy Manager for Domestic Operations MARGARET L . GREENE, JOAN E . LOVETT, FEDERAL ADVISORY COUNCIL E. B. ROBINSON, JR., JOHN B . MCCOY, First District Second District ANTHONY P. TERRACCIANO, Third District JOHN B . MCCOY, Fourth District EDWARD E . CRUTCHFIELD, JR., Fifth District E . B . ROBINSON, JR., Sixth District MARSHALL N. CARTER, CHARLES S . SANFORD, JR., President Vice President Seventh District IE, Eighth District JOHN F. GRUNDHOFER, Ninth District DAVID A . RISMILLER, Tenth District CHARLES R . HRDLICKA, Eleventh District RICHARD M . ROSENBERG, Twelfth District EUGENE A . MILLER, ANDREW B. CRAIG, HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary A75 CONSUMER ADVISORY COUNCIL DENNY D. Denver, Colorado, Chairman Chicago, Illinois, Vice Chairman DUMLER, JEAN POGGE, DOUGLAS D . BLANKE, Charlottesville, Virginia Madison, Wisconsin GARY S. HATTEM, New York, New York JULIA E. HILER, Marietta, Georgia RONALD HOMER, Boston, Massachusetts THOMAS L. HOUSTON, Dallas, Texas GENEVIEVE BROOKS, HENRY JARAMILLO, Belen, N e w Mexico BARRY A. ABBOTT, San Francisco, California JOHN R. ADAMS, Philadelphia, Pennsylvania JOHN A. BAKER, BONNIE GUITON, JOYCE HARRIS, Atlanta, Georgia Denver, Colorado VERONICA E. BARELA, MULUGETTA BIRRU, Pittsburgh, Pennsylvania St. Paul, Minnesota Bronx, New York TOYE L. BROWN, Boston, Massachusetts EDMUND MIERZWINSKI, W a s h i n g t o n , D . C . CATHY CLOUD, W a s h i n g t o n , D . C . JOHN V. SKINNER, Irving, Texas MICHAEL D. EDWARDS, Yelm, Washington St. Louis, Missouri NORMA L. FREIBERG, New Orleans, Louisiana LORI GAY, LOS Angeles, California DONALD A. GLAS, Hutchinson, Minnesota LOWELL MICHAEL FERRY, MICHAEL THRIFT INSTITUTIONS ADVISORY N. SWANSON, Portland, Oregon W. TIERNEY, Washington, D.C. GRACE W. WEINSTEIN, Englewood, N e w Jersey JAMES L . WEST, Tijeras, New Mexico ROBERT O . ZDENEK, W a s h i n g t o n , D . C . COUNCIL DANIEL C. ARNOLD, Houston, Texas, President Somerville, New Jersey, Vice President BEATRICE D'AGOSTINO, A. COOPER, Minneapolis, Minnesota L. ECKERT, Davenport, Iowa GEORGE R . GLIGOREA, Sheridan, Wyoming THOMAS J. HUGHES, Merrifield, Virginia KERRY KILLINGER, Seattle, Washington Cleveland, Ohio New Bedford, Massachusetts NICHOLAS W. MITCHELL, JR., Winston-Salem, North Carolina STEPHEN W. PROUGH, Irvine, California THOMAS R . RICKETTS, Troy, Michigan WILLIAM CHARLES JOHN KOCH, PAUL ROBERT MCCARTER, A76 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, MS-138, Board of Governors of the Federal Reserve System, Washington, DC 20551 or telephone (202) 452-3244 or FAX (202) 728-5886. When a charge is indicated, payment should accompany request and be made payable to the Board of Governors of the Federal Reserve System. Payment from foreign residents should be drawn on a U.S. bank. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. 1984. 120 pp. ANNUAL REPORT. ANNUAL REPORT: BUDGET REVIEW, 1991-92. FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or $2.50 each in the United States, its possessions, Canada, and Mexico. Elsewhere, $35.00 per year or $3.00 each. ANNUAL STATISTICAL DIGEST: period covered, release date, number of pages, and price. $ 6.50 October 1982 239 pp. 1981 $ 7.50 1982 December 1983 266 pp. October 1984 264 pp. $11.50 1983 254 pp. 1984 October 1985 $12.50 October 1986 $15.00 1985 231 pp. November 1987 $15.00 1986 288 pp. October 1988 272 pp. $15.00 1987 November 1989 $25.00 256 pp. 1988 March 1991 712 pp. $25.00 1980-89 November 1991 $25.00 185 pp. 1990 November 1992 215 pp. $25.00 1991 SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF CHARTS. Weekly. $30.00 per year or $.70 each in the United States, its possessions, Canada, and Mexico. Elsewhere, $35.00 per year or $.80 each. and other statutory provisions affecting the Federal Reserve System, as amended through August 1990. 646 pp. $10.00. THE FEDERAL RESERVE ACT REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. (Truth in Lending— Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each volume $2.25; 10 or more of same volume to one address, $2.00 each. ANNUAL PERCENTAGE RATE TABLES Introduction to Flow of Funds. 1980. 68 pp. $1.50 each; 10 or more to one address, $1.25 each. Federal Reserve Regulatory Service. Looseleaf; updated at least monthly. (Requests must be prepaid.) Consumer and Community Affairs Handbook. $75.00 per year. Monetary Policy and Reserve Requirements Handbook. $75.00 per year. Securities Credit Transactions Handbook. $75.00 per year. The Payment System Handbook. $75.00 per year. Federal Reserve Regulatory Service. 3 vols. (Contains all four Handbooks plus substantial additional material.) $200.00 per year. Rates for subscribers outside the United States are as follows and include additional air mail costs: Federal Reserve Regulatory Service, $250.00 per year. Each Handbook, $90.00 per year. THE U . S . ECONOMY IN AN INTERDEPENDENT WORLD: A MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp. INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. 440 pp. $9.00 each. FINANCIAL FUTURES AND OPTIONS IN THE U . S . ECONOMY. December 1986. 264 pp. $10.00 each. FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALYSIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. CONSUMER EDUCATION PAMPHLETS Short pamphlets suitable for classroom use. Multiple copies are available without charge. Consumer Handbook on Adjustable Rate Mortgages Consumer Handbook to Credit Protection Laws A Guide to Business Credit for Women, Minorities, and Small Businesses How to File A Consumer Credit Complaint Series on the Structure of the Federal Reserve System The Board of Governors of the Federal Reserve System The Federal Open Market Committee Federal Reserve Bank Board of Directors Federal Reserve Banks Organization and Advisory Committees A Consumer's Guide to Mortgage Lock-Ins A Consumer's Guide to Mortgage Settlement Costs A Consumer's Guide to Mortgage Refinancings Home Mortgages: Understanding the Process and Your Right to Fair Lending Making Deposits: When Will Your Money Be Available? When Your Home is on the Line: What You Should Know About Home Equity Lines of Credit All STAFF STUDIES: Summaries Only Printed in the Bulletin Studies and papers on economic and financial subjects that are of general interest. Requests to obtain single copies of the full text or to be added to the mailing list for the series may be sent to Publications Services. Staff Studies 1-145 are out of print. 1 4 6 . THE ROLE OF THE PRIME RATE IN THE PRICING OF BUSINESS LOANS BY COMMERCIAL BANKS, 1 9 7 7 - 8 4 , b y Thomas F. Brady. November 1985. 25 pp. 1 6 1 . A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY, 1980-90, by Margaret Hastings Pickering. May 1991. 21pp. 1 6 2 . EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORTGAGE LOAN RATES IN TWENTY CITIES, b y S t e p h e n A. Rhoades. February 1992. 11 pp. 1 6 3 . CLEARANCE AND SETTLEMENT IN U . S . SECURITIES MAR- KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob, Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary Ann Taylor. March 1992. 37 pp. 1 6 4 . THE 1 9 8 9 - 9 2 CREDIT CRUNCH FOR REAL ESTATE, b y James T. Fergus and John L. Goodman, Jr. July 1993. 20 pp. 1 4 7 . REVISIONS IN THE MONETARY SERVICES (DIVISIA) INDEXES OF THE MONETARY AGGREGATES, by Helen T. Farr and Deborah Johnson. December 1985. 42 pp. 1 4 8 . THE MACROECONOMIC AND SECTORAL EFFECTS OF THE ECONOMIC RECOVERY TAX ACT: SOME SIMULATION RESULTS, by Flint Brayton and Peter B. Clark. December 1985. 17 pp. 1 4 9 . THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN BANKING BEFORE AND AFTER ACQUISITION, b y S t e p h e n A. Rhoades. April 1986. 32 pp. 1 5 0 . STATISTICAL COST ACCOUNTING MODELS IN BANKING: A REEXAMINATION AND AN APPLICATION, by John T. Rose and John D. Wolken. May 1986. 13 pp. 1 5 1 . RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING FROM 1983 THROUGH 1985, by Patrick I. Mahoney, Alice P. White, Paul F. O'Brien, and Mary M. McLaughlin. January 1987. 30 pp. 1 5 2 . DETERMINANTS OF CORPORATE MERGER ACTIVITY: A REVIEW OF THE LITERATURE, by Mark J. Warshawsky. April 1987. 18 pp. by Carolyn D. Davis and Alice P. White. September 1987. 14 pp. 1 5 3 . STOCK MARKET VOLATILITY, 1 5 4 . T H E EFFECTS ON CONSUMERS AND CREDITORS OF PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES, by Glenn B. Canner and James T. Fergus. October 1987. 26 pp. 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark J. Warshawsky. November 1987. 25 pp. 1 5 6 . INTERNATIONAL TRENDS FOR U . S . BANKS AND BANKING MARKETS, by James V. Houpt. May 1988. 47 pp. 1 5 7 . M 2 PER UNIT OF POTENTIAL G N P AS AN ANCHOR FOR THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D. Porter, and David H. Small. April 1989. 28 pp. 1 5 8 . THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE PRODUCTS, by Mark J. Warshawsky with the assistance of Dietrich Eanihart. September 1989. 23 pp. 1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, by Nellie Liang and Donald Savage. February 1990. 12 pp. 1 6 0 . BANKING MARKETS AND THE USE OF FINANCIAL SERVICES BY SMALL AND MEDIUM-SIZED BUSINESSES, b y Gregory E. Elliehausen and John D. Wolken. September 1 9 9 0 . 3 5 pp. REPRINTS OF SELECTED Bulletin ARTICLES Some Bulletin articles are reprinted. The articles listed below are those for which reprints are available. Most of the articles reprinted do not exceed twelve pages. Limit of ten copies 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. Mutual Recognition: Integration of the Financial Sector in the European Community. 9/89. The Activities of Japanese Banks in the United Kingdom and in the United States, 1980-88. 2/90. Industrial Production: 1989 Developments and Historical Revision. 4/90. Recent Developments in Industrial Capacity and Utilization. 6/90. Developments Affecting the Profitability of Commercial Banks. 7/90. Recent Developments in Corporate Finance. 8/90. U.S. Exchange Rate Policy: Bretton Woods to Present. 11/90. The Transmission Channels of Monetary Policy: How Have They Changed? 12/90. Changes in Family Finances from 1983 to 1989: Evidence from the Survey of Consumer Finances. 1/92. U.S. International Transactions in 1991. 5/92. A78 Maps of the Federal Reserve System LEGEND Both pages • Federal Reserve Bank city • Board of Governors of the Federal Reserve System, Washington, D.C. Facing page • Federal Reserve Branch city — Branch boundary NOTE The Federal Reserve officially identifies Districts by number and Reserve Bank city (shown on both pages) and by letter (shown on the facing page). In the 12th District, the Seattle Branch serves Alaska, and the San Francisco Bank serves Hawaii. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth of Puerto Rico and the U.S. Virgin Islands; the San Francisco Bank serves American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. The Board of Governors revised the branch boundaries of the System most recently in December 1991. A79 1-A 3-C 2-B 5_£ 4-D Baltimore Pittsburgh VT i< NN Charlotte •Cincinnati \ Buffalo MAB CT CT / NJ KY NY VRI BOSTON NEW YORK 6-F PHILADELPHIA 7-G • Nashville RICHMOND CLEVELAND 8-H Birmingham, - M" Louisville Detroit • KY 1L • ' Jacksonville NwcTOrleans • Memphis WBtKMFmi^' „ J ATLANTA m Uttl? ) Rock * CHICAGO ST. LOUIS 9-1 MINNEAPOLIS 12-L 10-J WA • ALASKA Seattle • OklahomajCity OR /ID i(Bp(Ill ) o CA KANSAS CITY 7 NV / 11-K DALLAS 1 • i|jj||fj» \ R\ |\ P v HAWAII SAN FRANCISCO UT # Salt Lake City T AZ A80 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK Chairman branch, or facility Zip Deputy Chairman President First Vice President BOSTON* 02106 Richard F. Syron Cathy E. Minehan NEW YORK* 10045 Jerome H. Grossman Warren B. Rudman Ellen V. Futter Maurice R. Greenberg 14240 Joseph J. Castiglia William J. McDonough James H. Oltman PHILADELPHIA 19105 Jane G. Pepper James M. Mead Edward G. Boehne William H. Stone, Jr. CLEVELAND* 44101 A. William Reynolds G. Watts Humphrey, Jr. 45201 Marvin Rosenberg 15230 Robert P. Bozzone Jerry L. Jordan Sandra Pianalto 23219 J. Alfred Broaddus, Jr. Jimmie R. Monhollon Buffalo Cincinnati Pittsburgh RICHMOND* Baltimore 21203 Charlotte 28230 Culpeper Communications and Records Center 22701 ATLANTA Birmingham Jacksonville Miami Nashville New Orleans CHICAGO* Detroit ST. LOUIS Little Rock Louisville Memphis MINNEAPOLIS Helena KANSAS CITY Denver Oklahoma City Omaha DALLAS El Paso Houston San Antonio SAN FRANCISCO Los Angeles Portland Salt Lake City Seattle Anne Marie Whittemore Henry J. Faison Rebecca Hahn Windsor Anne M. Allen James O. Aston 30303 Edwin A. Huston Leo Benatar 35283 Donald E. Boomershine 32231 Joan D. Ruffier 33152 R. Kirk Landon 37203 James R. Tuerff 70161 Lucimarian Roberts Robert P. Forrestal Jack Guynn 60690 Richard G. Cline Robert M. Healey 48231 J. Michael Moore Silas Keehn William C. Conrad 63166 Robert H. Quenon Janet McAfee Weakley 72203 Robert D. Nabholz, Jr. 40232 John A. Williams 38101 Seymour B. Johnson Thomas C. Melzer James R. Bowen 55480 Gary H. Stern Colleen K. Strand 59601 Delbert W. Johnson Gerald A. Rauenhorst James E. Jenks 64198 Vice President in charge of branch Charles A. Cerino1 Harold J. Swart1 Ronald B. Duncan1 Walter A. Varvel1 John G. Stoides1 Donald E. Nelson1 Fred R. Herr1 James D. Hawkins1 James T. Curry III Melvyn K. Purcell Robert J. Musso Roby L. Sloan1 Karl W. Ashman Howard Wells John P. Baumgartner John D. Johnson Burton A. Dole, Jr. Herman Cain 80217 Barbara B. Grogan 73125 Ernest L. Holloway 68102 Sheila Griffin Thomas M. Hoenig Henry R. Czerwinski 75201 Leo E. Linbeck, Jr. Cece Smith 79999 W. Thomas Beard, III 77252 Judy Ley Allen 78295 Erich Wendl Robert D. McTeer, Jr. Tony J. Salvaggio 94120 James A. Vohs Judith M. Runstad 90051 Donald G. Phelps 97208 William A. Hilliard 84125 Gary G. Michael 98124 George F. Russell, Jr. Robert T. Parry Patrick K. Barron Kent M. Scott David J. France Harold L. Shewmaker Sammie C. Clay Robert Smith, III1 Thomas H. Robertson John F. Moore1 E. Ronald Liggett1 Andrea P. Wolcott Gordon Werkema1 •Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; East Rutherford, 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. Federal Reserve Statistical Releases Available on the Commerce Department's Economic Bulletin Board The Board of Governors of the Federal Reserve System makes some of its statistical releases available to the public through the U.S. Department of Commerce's economic bulletin board. Computer access to the releases can be obtained by sub- scription. For further information regarding a subscription to the economic bulletin board, please call (202) 482-1986. The releases transmitted to the economic bulletin board, on a regular basis, are the following: Reference Number Statistical release Frequency of release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H.8 Assets and Liabilities of Insured Domestically Chartered and Foreign Related Banking Institutions Weekly/Monday H.10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z.7 Flow of Funds Quarterly Publications of Interest FEDERAL RESERVE REGULATORY SERVICE To promote public understanding of its regulatory functions, the Board publishes the Federal Reserve Regulatory Service, a three-volume looseleaf service containing all Board regulations as well as 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 the payment system. These publications are designed to help those who must frequently refer to the Board's regulatory materials. They are updated monthly, and each contains citation indexes and a subject index. The Monetary Policy and Reserve Requirements Handbook contains Regulations A, D, and Q, plus related materials. The Securities Credit Transactions Handbook contains Regulations G, T, U, and X, dealing with extensions of credit for the purchase of securities, together with related statutes, Board interpretations, rulings, and staff opinions. Also included are the Board's list of marginable OTC stocks and its list of foreign margin stocks. The Consumer and Community Affairs Handbook contains Regulations B, C, E, M, Z, AA, and BB, and associated materials. The Payment System Handbook deals with expedited funds availability, check collection, wire transfers, and risk-reduction policy. It includes Regulation CC, Regulation J, the Expedited Funds Availability Act and related statutes, the official Board commentary on Regulation CC, and policy statements on risk reduction in the payment system. For domestic subscribers, the annual rate is $200 for the Federal Reserve Regulatory Service and $75 for each Handbook. For subscribers outside the United States, the price including additional air mail costs is $250 for the Service and $90 for each Handbook. All subscription requests must be accompanied by a check or money order payable to the 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, DC 20551. U.S. MONETARY POLICY AND FINANCIAL MARKETS U.S. Monetary Policy and Financial Markets by AnnMarie Meulendyke offers an in-depth description of the way monetary policy is developed by the Federal Open Market Committee and the techniques employed to implement policy at the Open Market Trading Desk. Written from her perspective as a senior economist in the Open Market Function at the Federal Reserve Bank of New York, Ann-Marie Meulendyke describes the tools and the setting of policy, including many of the complexities that differentiate the process from simpler textbook models. Included is an account of a day at the Trading Desk, from morning information-gathering through daily decisionmaking and the execution of an open market operation. The book also places monetary policy in a broader context, examining first the evolution of Federal Reserve monetary policy procedures from their beginnings in 1914 to the end of the 1980s. It indicates how policy operates most directly through the banking system and the financial markets and describes key features of both. Finally, the book turns its attention to the transmittal of monetary policy actions to the U.S. economy and throughout the world. The book is $5.00 a copy for U.S. purchasers and $10.00 for purchasers outside the United States. Copies are available from the Public Information Department, Federal Reserve Bank of New York, 33 Liberty Street, New York, NY 10045. Checks must accompany orders and should be payable to the Federal Reserve Bank of New York in U.S. dollars. Publications of Interest FEDERAL RESERVE CONSUMER CREDIT PUBLICATIONS The Federal Reserve Board publishes a series of pamphlets covering individual credit laws and topics, as pictured below. The series includes such subjects as how the Equal Credit Opportunity Act protects women against discrimination in their credit dealings, how to use a credit card, and how to resolve a billing error. The Board also publishes the Consumer Handbook to Credit Protection Laws, a complete guide to consumer credit protections. This forty-four-page booklet explains how to shop and obtain credit, how to maintain a good credit rating, and how to dispute unfair credit transactions. Three booklets on the mortgage process are also available: A Consumer's Guide to Mortgage Lock-Ins, A Consumer's Guide to Mortgage Refinancings, and A Consumer's Guide to Mortgage Settlement Costs. 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, DC 20551. Multiple copies for classroom use are also available free of charge. Business Credit A Consumer's Guide to Mortgage Lock-Ins for Women, Minorities, and Small B u s i n e s s e s r to Credit Protection 1