Full text of Federal Reserve Bulletin : September 1995
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VOLUME 81 •
NUMBER 9 •
SEPTEMBER 1 9 9 5
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
817 OVERVIEW OF DERIVATIVES
DISCLOSURES BY MAJOR US. BANKS
This article discusses the disclosures about
derivatives activities in the 1993 and 1994
annual reports of the top ten U.S. banks that
deal in derivatives. It also summarizes the
accounting standards and recommendations of
industry groups and regulators that contributed to the 1994 disclosures. The main thrust
of these efforts has been to make derivatives
more "transparent," in that relevant information is presented in a way that allows the
public and regulatory authorities to make
informed judgments about a company's derivatives activity. Finally, the article reviews
the improvements in qualitative and quantitative disclosures since 1993.
832 TREASURY AND FEDERAL RESERVE
FOREIGN EXCHANGE OPERATIONS
During the second quarter of 1995, the dollar
rose 0.6 percent against the German mark, but
it declined 2.1 percent against the Japanese
yen, 1.9 percent against the Canadian dollar,
and 0.3 percent on a trade-weighted basis.
By the end of the second quarter, the dollar
had risen 2.8 percent and 6.1 percent from its
historic lows against the mark and the yen
respectively.
838 INDUSTRIAL PRODUCTION AND
CAPACITY UTILIZATION FOR JULY
Edward W. Kelley, Jr., member, Board of
Governors, presents the views of the Board on
a bill that would provide for substituting a
$1 coin for the $1 bank note now in circulation and says that the $1 coin would produce
a substantial budgetary gain for the federal
government, provided that the $1 note is
withdrawn from circulation, but that the convenience and needs of the American public, as
well as cost savings, should weigh heavily in
any decision to replace the $1 note, before the
Senate Committee on Banking, Housing, and
Urban Affairs, July 13, 1995.
844 Alan Greenspan, Chairman, Board of Governors, presents the Federal Reserve's semiannual report on monetary policy and says
that the economic outlook, on balance, is
encouraging, despite the inevitable risks and
that the U.S. economy rests on a solid foundation of entrepreneurial initiative and competitive markets, before the Subcommittee on
Domestic and International Monetary Policy
of the House Committee on Banking and
Financial Services, July 19, 1995.
849
ANNOUNCEMENTS
Action by
Committee.
the
Federal
Open
Market
Final guidelines and a final rule on safety and
soundness standards for state member banks.
1995
Industrial production was little changed in
July for a third consecutive month. At
121.3 percent of its 1987 average, industrial
production was 2.6 percent above its level
of July 1994. Capacity utilization decreased
0.2 percentage point, to 83.4 percent.
841 STATEMENTS TO THE CONGRESS
Final rule on risk-based capital standards.
Interim final
guidelines.
rule
on capital
adequacy
Proposal to amend risk-based capital requirements to incorporate a measure for market risk
in foreign exchange and commodity activities
and in the trading of debt and equity instruments; proposed approach to setting capital
requirements for market risk.
Federal Reserve sponsorship of educational
television programs on the homebuying
process.
Public meetings on the application of Fleet
Financial Group to acquire Shawmut National
Corporation.
A1 FINANCIAL AND BUSINESS STATISTICS
These tables reflect data available as of
July 27, 1995.
A3 GUIDE TO TABULAR
PRESENTATION
A4 Domestic Financial Statistics
A45 Domestic Nonfinancial Statistics
A53 International Statistics
Publication of the revised lists of OTC stocks
and of foreign stocks subject to margin
regulations.
A67 GUIDE TO STATISTICAL RELEASES AND
SPECIAL TABLES
Publication of a group of new statistical tables
in the Federal Reserve Bulletin with annual
data reported under the Home Mortgage
Disclosure Act.
A76 INDEX TO STATISTICAL TABLES
853 MINUTES OF THE FEDERAL OPEN
MARKET COMMITTEE MEETING
HELD ON MAY 23, 1995
At its meeting on May 23, 1995, the Committee adopted a directive that called for maintaining the existing degree of pressure on
reserve positions and that did not include a
presumption about the likely direction of any
adjustments to policy during the intermeeting
period.
861 LEGAL
DEVELOPMENTS
Various bank holding company, bank service
corporation, and bank merger orders; and
pending cases.
A78 BOARD OF GOVERNORS AND STAFF
A80 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY COUNCILS
A82 FEDERAL RESERVE BOARD
PUBLICATIONS
A84 MAPS OF THE FEDERAL
SYSTEM
RESERVE
A86 FEDERAL RESERVE BANKS,
AND OFFICES
BRANCHES,
Overview of Derivatives Disclosures
by Major U.S. Banks
Gerald. A. Edwards, Jr., Assistant Director, and
Gregory E. Eller, of the Board's Division of Banking Supervision and Regulation, prepared this
article.
An important source of information about derivatives activities has been the published annual
reports and other publicly available financial
reports of banks and other companies. Meaningful
disclosures about derivatives help users of financial
statements to better understand derivatives activities and thus promote market discipline. Banking
organizations and the accounting profession have
taken a number of steps in recent years to improve
the quality of disclosures about derivatives activities. Promoting meaningful disclosures and analyzing this information are important parts of the
Federal Reserve's supervisory approach to derivatives activities of banks. 1
This article discusses the disclosures about
derivatives activities in the 1993 and 1994 annual
reports of the top ten U.S. banks that deal in derivatives. It also summarizes the accounting standards
and recommendations of industry groups and regulators that contributed to the 1994 disclosures. The
main thrust of these efforts has been to make
derivatives more "transparent," in that relevant
information is presented in a way that allows the
public and regulatory authorities to make informed
judgments about a company's derivatives activity.
Finally, the article reviews the improvements in
qualitative and quantitative disclosures since 1993.
1. Other components to supervision include on-site examinations and related off-site monitoring of regulatory reports and
capital standards. The Federal Reserve has also developed extensive examination guidance that works to reinforce the development
of strong risk management policies within banking organizations.
Furthermore, the Federal Reserve has been encouraging improvement in accounting standards for hedging and other derivatives
activities.
BACKGROUND
In the past year, some highly publicized financial
losses were attributed to derivative contracts that
were held by several large corporations and municipalities. As a result, public attention has focused on
derivatives. Although most financial market professionals see derivatives as efficient tools for managing risk, widespread confusion about them persists
among the public. Much of the confusion may stem
from the recent increase in the complexity of these
instruments.
A standard definition, which will be used here, is
that a derivative is a financial contract whose market value depends on the value of one or more
underlying "goods." The underlying good can be a
commodity, such as a metal or an agricultural product; a financial instrument, such as a stock, bond, or
foreign currency; or an index, such as an interest
rate or equity index. More simply, a derivative is
a contract between two parties in which they agree
to fix the price of something today for exchange, or
settlement, on a future date. The amount of cash
changing hands between the parties is calculated on
the settlement date and is based on the difference
between the prevailing market price for the good
and the price specified in the contract.
The following example illustrates a frequently
used type of derivative, a forward contract, in
which the buyer agrees to purchase and the seller
agrees to deliver a commodity at a specified price
on a certain date.
Two companies, a fuel distributor and a manufacturer, decide to enter into a derivative contract.
The distributor has an inventory of 1,000 gallons of
gasoline, about three months' supply. The manufacturer purchases 1,000 gallons of gasoline about
every three months for use in its factory. On the
one hand, the distributor is worried that the price
of gasoline will fall in the near term from its
current, or spot, price of $1 per gallon; on the other
818
Federal Reserve Bulletin • September 1995
hand, the manufacturer is concerned about price
increases. They enter into a derivative contract in
which the distributor agrees to sell 1,000 gallons of
gasoline on a specific date three months hence at
$1 per gallon, and the manufacturer agrees to buy it
then at that price. Rather than deliver the gasoline
on a date that may be close to but not exactly the
same as the date on which the manufacturer needs
to buy it, they will instead settle in cash. Three
months later, the spot price is $0.85 per gallon. In
settlement of the contract, the manufacturer pays
the distributor $150, that is, $1.00 per gallon
(contract price) - $0.85 per gallon (spot price) x
1,000 gallons. (If the gasoline price had increased
to $1.15, the distributor would have paid the manufacturer $150.) The distributor then sells its inventory in the open market for $850, and the manufacturer buys its gasoline for $850 on the open market.
In this example, both parties have hedged against
the risk of unfavorable price changes in a commodity by entering into the derivative contract that
compensates them for such a change. The distributor forgoes the gain from a price increase to avoid
a loss on the value of its fuel inventory, and the
manufacturer forgoes the savings from a price drop
to avoid increased production costs resulting from
a rise in the price of gasoline. When the derivative
contract and the physical commodity are viewed
together, the benefit to the companies is clear: They
have effectively locked in the price of 1,000 gallons of gasoline at $1 per gallon for three months.
The distributor and the manufacturer are seeking,
in the example, to manage their risk from changes
in market prices through the derivative contract.
Reducing their risk exposures is one of the main
purposes for which both financial and nonfinancial
companies use derivatives.
Derivatives may also be entered into for speculative or trading purposes. In the example, either the
distributor or the manufacturer or both could have
entered into the contract to profit from their respective predictions about price changes. Alternatively,
a financial intermediary could take opposite positions in two forward contracts, promising to pay
the distributor a fixed price for the gasoline on a
certain date and to accept another fixed price from
the manufacturer for the same quantity of fuel.
Then, no matter whether the price rose or fell,
the intermediary, settling in cash, would pay (or
receive), on the contract with the distributor, an
amount of money that would offset the amount of
money that it received (or paid) on the contract
with the manufacturer. The intermediary's compensation is the difference between the fixed prices
specified in the two contracts.
Derivatives can be designed to fit a multitude of
situations. For example, derivatives are available
on "catastrophe indexes" for the West Coast
(earthquakes), Midwest (floods), and East Coast
(hurricanes) that insurance companies may find
useful as alternatives to negotiating reinsurance
contracts with other insurers. Derivative contracts
on electricity are being devised, and these may
become the basis of an important market for utilities and their customers as electric utilities are
deregulated.
Despite this apparent profusion, basically there
are only two classes of contracts: forwards (illustrated in the example) and options. Each can be
viewed as a "building block," in that it may be
combined with the other in various ways to create
instruments of greater complexity that may be
used in sophisticated hedging strategies or in
speculative transactions. (See box "Classes of
Derivatives" for an overview of various types of
derivatives.) Because these contracts can be
quickly negotiated, a firm's susceptibility to loss
from changes in prices (its "risk profile") can be
vastly altered in a matter of days or even hours
through the use of derivatives.
Derivatives themselves generally involve risks to
which banks and other companies have long been
exposed, for example, credit, market, liquidity, and
legal risks (see box "Risks Associated with Derivatives"). However, because derivatives are often
more complex, for example, than traditional bank
products, their risks can be more difficult to measure and manage.
USE OF DERIVATIVES BY BANKS
During the past few years, the use of derivatives in
the banking industry has grown rapidly (see box
"Some Uses of Derivatives by Financial Intermediaries"). Derivatives are now an important product
of many banks, yet measures of the size of this
activity are difficult to devise, in part because the
contracts represent promises of cash flows in the
future. As a result, many market observers rely on
Overview of Derivatives Disclosures by Major U.S. Banks
819
Classes of Derivatives
Derivatives are contracts that derive their market values
by reference to a physical commodity or to another
contract, such as a debt or equity instrument, or by
reference to an interest rate or equity index (collectively
referred to as "goods"). Some derivative instruments can
be settled by the delivery of the referenced good or by the
payment of cash, while others are settled strictly in cash.
There are two basic classes of derivatives—forwards and
options.
Forward Contracts
A forward is a bilateral agreement in which one party, the
buyer, is obligated to purchase the contracted-for good,
and the second party, the seller, is obligated to sell the
good to the buyer. A party who is buying or selling a
good at some time in the future may wish to hedge
against the risk of interim changes in the price of the
good by entering into a forward contract today. At the
inception of the forward contract, the price, quantity, and
grade of the good, the delivery date, and the place of
delivery are fixed. The price to be paid in the future under
a new forward contract will be closely related to the
good's current market price (its spot price), with adjustments for costs to maintain or carry an inventory of the
good, such as for storage, insurance, and interest.
Futures. A futures contract is a type of forward in
which a clearinghouse normally serves as a counterparty
to both the buyer and seller. In this arrangement, the time
and cost of finding a willing counterparty are reduced;
credit risk is also reduced because the parties are looking
to the clearinghouse for performance. Clearinghouses
typically reduce their credit risk by requiring collateral
and marking positions to market frequently. In order to
be traded on organized exchanges, futures contracts must
have standard commodity-unit and delivery terms to
ensure their liquidity. Futures are available for agricultural products and other commodities, bonds and other
interest-bearing instruments, equity interests, and foreign
exchange.
Forward Rate Agreement (FRA). As the name indicates, an FRA is a forward contract, settled in cash, in
which required payments are based on the difference
between a spot market rate and the contractual forward
rate. If the spot rate at expiry is higher than the forward
rate, the seller pays the difference; if the spot rate is
lower, the buyer pays the difference.
Swaps. An interest rate swap may be viewed as a series
of forward rate agreements packaged into a single instrument. In a simple interest rate swap contract, one party
agrees to make fixed cash payments, and the counterparty
agrees to make variable payments based on a floating-
rate index, such as the London Interbank Offered Rate
(LIBOR). The parties then exchange payments according
to a certain schedule for the life of the swap, which may
be several years. Besides interest rates, the structure of
exchanging a fixed payment for a floating payment has
been applied to such goods as foreign exchange, precious
metals, and bulk commodities.
Option Contracts
An option contract is a unilateral agreement in which one
party, the option writer, is obligated to perform under the
contract if the option holder exercises his or her option.
(The option holder pays a fee or "premium" to the writer
for this option.) The option holder, however, is not under
any obligation and will require performance only when
the exercise price is favorable relative to current market
prices. If, on the one hand, prices move unfavorably to
the option holder, the holder loses only the premium. If,
on the other hand, prices move favorably for the option
holder, the holder has theoretically unlimited gain at the
expense of the option writer. In an option contract the
exercise price (strike price), delivery date (maturity date
or expiry), and quantity and quality of the commodity are
fixed.
The main types of options are calls and puts. A call
option grants the holder of the contract the right, but not
the obligation, to purchase a good from the writer of the
option in consideration for the payment of cash (the
option premium). A put option grants the the holder the
right, but not the obligation, to sell the underlying good
to the option writer.
Interest Rate Caps and Floors. Caps and floors may be
viewed as a series of call options packaged into a single
financial instrument in which the underlying good is an
interest rate index. For example, a borrower arranges to
borrow at a variable rate reset quarterly at LIBOR. He
also purchases a 6.5 percent rate cap. If LIBOR rises to
9 percent, the borrower pays his creditor 9 percent and
receives from the cap writer 2.5 percent (9 percent 6.5 percent option exercise price). The borrower has
effectively limited his interest expense to a maximum of
6.5 percent plus the premium paid for the interest rate
cap.
Under a floor contract, the borrower writes an option in
which he agrees to pay the difference between the strike
price and the interest rate index specified in the contract.
The premium received offsets a portion of the overall
interest expense of the obligation; however, the debtor
retains exposure to higher interest rates and forgoes
the benefit of lower interest rates on his floating-rate
obligation.
820
Federal Reserve Bulletin • September 1995
notional or principal a m o u n t s of contracts in assessing the size of the market. T h e notional a m o u n t is
the f a c e a m o u n t of a contract to w h i c h the rates or
i n d e x e s that h a v e b e e n specified in the contract are
applied to determine c a s h flows. F o r e x a m p l e , in an
interest rate s w a p in w h i c h t w o parties agree to
e x c h a n g e fixed f o r floating interest p a y m e n t s on
$ 1 0 million of debt, the notional a m o u n t of the
contract is $ 1 0 million. In general, the notional
a m o u n t is never e x c h a n g e d and d o e s not reflect
the risk of the position. Furthermore, aggregate
notional a m o u n t s are o f t e n overstated b e c a u s e of
d o u b l e counting of contracts b e t w e e n dealers and
b e c a u s e contracts are o f t e n used to offset the effect
of other derivatives. Nevertheless, c h a n g e s in
notional a m o u n t s o v e r time give an indication of
the growth of derivatives activities.
F r o m 1990 to the e n d of the first quarter of 1995,
the total assets of those U.S. b a n k s involved in
derivatives grew almost 35 percent, f r o m $2.3 trillion to $3.1 trillion. D u r i n g the s a m e period, h o w ever, the notional a m o u n t s of derivatives contracts
almost tripled, rising f r o m $6.8 trillion to almost
$18 trillion.
A l t h o u g h the n u m b e r of b a n k s i n v o l v e d in
derivatives has risen since 1990, it is still relatively
small—about 600 as of March 31, 1995. Also, the
largest b a n k s a c c o u n t f o r m o s t of the activity: T h e
top fifteen b a n k s h o l d m o r e than 9 5 percent of the
derivatives contracts (as m e a s u r e d b y notional
a m o u n t s ) of the U.S. b a n k i n g industry.
ACCOUNTING
FOR
DERIVATIVES
T h e issues involved in the accounting treatment of
derivative contracts are also c o m p l e x . A c c o u n t i n g
theory h a s n o t k e p t u p w i t h the i n n o v a t i o n s
Risks Associated with Derivatives
Generally, the risks associated with derivative instruments are the same as those arising from other bank
financial instruments. The major categories of risk are the
following.
Credit Risk is the possibility of loss from the failure of
a counterparty to fully perform on its contractual obligations. Types of information that may be disclosed about
credit risk include the following:
• Gross positive market value—the gross replacement
cost of a contract, without the effects of any netting
arrangements
• Current credit exposure—the replacement cost of a
contract, including the effect of netting arrangements
• Potential credit exposure—possible replacement
costs if favorable price movements (making the contract
more onerous to the counterparty) occur in the future
• Credit risk concentrations—indicators of a lack of
diversification in either geographic areas or industry
groups
• Collateral and other credit enhancements that may
reduce credit risk
• Counterparty credit quality, nonperforming contracts, and actual credit losses
Market Risk is the possibility that the value of on- or
off-balance-sheet positions will adversely change before
the positions can be liquidated or offset with other posi-
tions. For banks, the value of these positions may change
because of changes in domestic interest rates (interest
rate risk) or foreign exchange rates (foreign exchange
rate risk).
For some of the larger institutions, information about
their internal value-at-risk measures and methodology
can improve the understanding of their exposure to market risk. Value at risk involves the assessment of potential losses in portfolio value because of adverse movements in market risk factors for a specified statistical
confidence level over a defined holding period.
Liquidity Risk has two broad types: market liquidity
risk and funding risk. Market liquidity risk arises from
the possibility that a position cannot be eliminated
quickly either by liquidating it or by establishing offsetting positions. Funding risk arises from the possibility
that a firm will be unable to meet the cash requirements
of its contracts.
Operational Risk is the possibility that losses may
occur because of inadequate systems and controls, human
error, or mismanagement.
Legal Risk is the possibility of loss that arises when a
contract cannot be enforced—for example, because of
poor documentation, insufficient capacity or authority of
the counterparty, or uncertain enforceability of the contract in a bankruptcy or insolvency proceeding.
Overview
represented by the d e v e l o p m e n t of derivatives. A t
present, financial statements d o not effectively
represent the risk profile of a c o m p a n y that uses
derivatives nor its m a n a g e m e n t ' s intentions f o r
controlling risk relating to derivatives.
Derivative instruments, like traditional loan c o m mitments, are executory contracts. T h a t is, the t w o
parties to the contract h a v e m a d e mutual promises,
but they h a v e not yet p e r f o r m e d their p r o m i s e d
of Derivatives
Disclosures
by Major U.S. Banks
821
duties. C o m p a n i e s typically report a contract in
their financial statements only after s o m e perform a n c e has taken place. F o r e x a m p l e , in a firm
c o m m i t m e n t to lend, the a m o u n t of the financial
contract does not appear on the balance sheet until
the b o r r o w e r actually d r a w s on the loan. A n o t h e r
e x a m p l e is a firm p u r c h a s e order received by a
manufacturer. T h e s e orders m a k e u p the c o m p a n y ' s b a c k l o g but are not generally recognized in
S o m e U s e s of D e r i v a t i v e s b y F i n a n c i a l I n t e r m e d i a r i e s
Use of Interest Rate
Swaps
A finance company of a manufacturer purchases equipment sales contracts, bearing fixed interest rates, from the
dealer network. The overall portfolio of sales contracts
has a weighted-average life of three years and a yield of
12 percent. To finance its operations, the finance company sells short-term commercial paper in the secondary
market. If a sudden increase in short-term rates occurs,
the finance company's net interest margin will be
decreased.
To reduce this risk, the finance company could enter
into a three-year interest rate swap in which it receives
the commercial paper rate and pays a fixed amount, with
a notional amount equal to the amount of commercial
paper outstanding. Because the cash received on the swap
equals the company's interest expense on the commercial
paper, the finance company has effectively locked in its
net interest margin as the difference between the fixed
rate received on the sales contract portfolio and the fixed
payments on the interest rate swap. The finance company
could have achieved the same goal by issuing three-year
bonds bearing a fixed interest rate; however, using a swap
may be preferable if it offers greater flexibility, speed, or
a higher net interest margin.
A bank performs a gap analysis to analyze its interest
rate sensitivity, and management finds that for the interval of less than three months, liabilities exceed assets by
$100 million, whereas in the one-year interval, assets
exceed liabilities by $120 million. Management is concerned that a sudden increase in interest rates would
adversely affect income as its liabilities reprice at the
higher rates more quickly than its assets do, and its goal
is to have no more than a net $25 million in any period.
One solution for reducing this exposure would be to
enter into a one-year interest rate swap, with a notional
amount of $100 million, in which the bank pays fixed
interest and receives a quarterly floating rate of interest.
The $100 million notional amount, when analyzed as a
component of the gap schedule, reduces the liability
sensitivity for the interval of less than three months and
decreases the one-year asset sensitivity, resulting in a
balanced three-month interval and a $20 million asset
sensitivity in the one-year interval, a result that meets
management's goal.
Use of a Put
Option
A mortgage company experiences a large increase in
demand for home mortgages as a result of a downward
trend in rates. It normally sells the loans it originates in
the secondary market. The company is concerned that
mortgage rates may unexpectedly increase, in which case
many more consumers than usual will seek to fund commitments that were made earlier, at lower rates. These
mortgages, bearing below-market rates, will sell at a
discount in the secondary market. If rates continue to fall,
most consumers will allow the commitments to expire.
One approach to hedging against the risk of loss from
funding below-market-rate commitments would be to
purchase put options on a bond whose market value
tracks that of home mortgages as interest rates change.
The option gives the company the right to sell the bond at
the strike price, and if interest rates do indeed rise, the
company profits if the bond's market value falls relative
to the option's strike price. This profit on the option helps
offset the loss from selling the below-market-rate mortgages resulting from the loan commitments. If rates are
unchanged or if they fall, the market value of the bond
underlying the option may exceed the option's strike
price, which would render the option worthless at expiration. The company then loses the premium. Mortgages,
however, will be originated and sold at face value. At the
cost of the premium paid for the option, the bank has
insured against incurring a loss on the commitments
resulting from an increase in rates.
822
Federal Reserve Bulletin • September 1995
the financial statements until some performance
takes place, such as shipment of the manufacturer's
product. An important focus of accounting is
matching performance under a contract with its
recognition in the financial statements. Because
executory contracts will affect future financial
results as their terms are fulfilled, under generally
accepted accounting principles companies must
nevertheless describe in their current financial
statements material, binding commitments that will
be performed in the future.
In keeping with this treatment of executory
contracts, the accounting treatment of derivative
instruments may reflect only the next required contractual performance, such as accruing the expected
payment or receipt of cash, as of the balance sheet
date. Under this procedure, an example of accrual
accounting, even though a party to a derivative—an
interest rate swap, for example—may be obligated
to make a series of cash payments over several
years because of changes in interest rates, these
potential future obligations are not reflected on
the current balance sheet. Hence, the derivative
contract is "off balance sheet," and its risks and
rewards are not clear to the financial statement
reader. Furthermore, when used as hedges, gains
or losses on derivative contracts may be deferred
to match interest income from loans, or interest
expense on deposits or other items being hedged.
Future benefits or obligations associated with offbalance-sheet contracts, then, are not well captured
in the financial statements and therefore lack
transparency.
Although executory contracts may not be
reported on a balance sheet, they nonetheless have
economic value. A manufacturer with a two-year
sales backlog is probably better off than one with
no backlog. Similarly, an interest rate swap entitling a company to receive a fixed rate of 8 percent
will be more valuable than a contract that pays
7 percent. The traditional accounting requirement
that some performance occur before a contract
appears on the balance sheet, however, is replaced
in some situations (such as for a dealer's trading
portfolio) by an estimation of the contract's
economic value. This accounting practice, called
"marking to market," is the process of determining
the market value of financial contracts (by market
quote, if available; otherwise through estimation
techniques), recording that value on the balance
sheet, and reflecting the change in value in reported
earnings.
The accounting treatment of derivatives is now
a hodgepodge of mark-to-market accounting and
accrual accounting and depends on the type of
contract and the purpose for which the party
entered into the contract. As the use of derivatives
has expanded, the deficiencies of their accounting
treatment have become more evident, and the need
for more consistency is widely recognized.
Professional organizations that set accounting
standards have been exploring a number of alternatives to current practice but have had much difficulty in reaching a consensus. Although accountants cannot now agree whether marking to market
or accruing cash flows is the appropriate method
for accounting for derivative contracts in every
instance, all would agree that until a more consistent accounting method is devised, an interim step
to improving the transparency of off-balance-sheet
instruments is more thorough disclosures about the
contractual terms of derivatives and discussions
by management of their hedging programs and the
results of those programs.
CHANGES IN DISCLOSURE
AND RECOMMENDATIONS
REQUIREMENTS
A new accounting standard issued by the Financial
Accounting Standards Board (FASB) significantly
expanded the required disclosures about derivatives and was effective for the 1994 annual reports
of both financial and nonfinancial companies.
Financial institutions also responded to initiatives
by several industry and regulatory groups that
called for additional disclosure of derivatives
activities.
FASB Requirements
before
1994
Before 1994, the FASB required that all firms
preparing financial statements in conformance with
generally accepted accounting principles disclose
the following information about financial instruments with off-balance-sheet risk of accounting
loss: 2
2. "Accounting loss" on a financial contract is a potential loss in
excess of the amount of the contract reported on the balance sheet.
Overview of Derivatives Disclosures by Major U.S. Banks
• The face, contract, or notional principal
amount
• The nature and terms of the instrument and
a discussion of its credit and market risk, cash
requirements, and related accounting policies
• The accounting loss the company would incur
if any party to the financial instrument did not
perform according to the contract's terms and any
collateral proved to have no value
• The company's policy for requiring collateral
or other security and a description of collateral
presently held.
For all financial instruments (those with offbalance-sheet risk of accounting loss and those
without), significant concentrations of credit risk
from an individual counterparty or groups of counterparties must also be reported. Furthermore, companies must disclose the fair market value of their
financial instruments, both assets and liabilities,
whether or not they are recognized on the balance
sheet.
SFAS
119
In response to calls for improved disclosure of
derivatives activities, the FASB issued Statement
of Financial Accounting Standards Number 119,
Disclosure about Derivative Financial Instruments
and Fair
Value of Financial
Instruments
(SFAS 119). Under this new standard, which was
effective for 1994 year-end reports, a company that
issues or holds derivatives is required to differentiate in its disclosures between derivatives used for
trading purposes and those used for risk management or other end-user reasons.
Trading Activities
A dealer is required to report the fair value (both
year-end and annual average) of its derivatives
For example, an interest rate swap that has a value of $100 on the
balance sheet date after it is marked to market could result in more
than $100 of loss if there is an unfavorable movement in interest
rates. This contract, though reported at market value, has offbalance-sheet risk of accounting loss. In contrast, a loan of $100
has no off-balance-sheet risk of accounting loss (ignoring environmental or lender liability claims) because the possible loss is
capped at $100 even if there is a full charge-off of the loan.
823
positions and disaggregate from trading revenues
the share earned from derivatives. This disaggregation may be either reported for derivatives alone or
broken down by some other method, such as lines
of business or types of risk exposure (for example, interest rate or foreign exchange), as long as
trading profits from derivative instruments are
clearly presented. The FASB encouraged, but did
not require, the disclosure of similar data about
nonderivative trading assets and liabilities, whether
they are financial instruments or nonfinancial items,
to give a more comprehensive picture of the firm's
trading business.
End-User Activities
For derivatives used for hedging or other riskmanagement purposes, a firm is now required to
describe its objectives in using derivatives and
discuss its strategies for achieving those objectives.
The firm must also describe how it reports derivatives in its financial statements and give certain
details about gains or losses being deferred. The
fair values of end-user derivatives must also be
shown separately from the fair value of items
hedged by the derivatives; previously most companies combined the fair values of the two.
SFAS 119 also encourages a firm to disclose
quantitative information, in a manner consistent
with its method for managing risk, that would be
useful to readers of its financial statement in evaluating its activities.
Private Groups
In 1993, the Group of Thirty presented a report
containing a number of recommendations on
derivatives disclosure. 3 The report said that financial statements of dealers and end-users should
contain sufficient information about their use of
derivatives to provide an understanding of the
purposes for which transactions are undertaken,
the extent of the transactions, the degree of risk
3. Group of Thirty, Derivatives: Practices and Principles, report
by the Global Derivatives Study Group (Washington: July 1993).
The Group of Thirty is a private, nonprofit research organization
involved with international economic and financial issues.
824
Federal Reserve Bulletin • September 1995
involved, and the way the company has accounted
for these transactions. The report also recommended the disclosure of information about management's attitude toward financial risks, the ways
financial instruments are used, the ways risks
are monitored and controlled, and analyses of
derivatives positions at the balance sheet date as
well as the credit risk inherent in those positions.
The report also recommended that dealers provide
additional information on the extent of their activities in financial instruments.
In 1994, a banking industry group, the Institute
of International Finance (IIF), developed a framework for reporting credit exposures arising from
derivatives. 4 The framework consisted of management discussions about policies and controls affecting credit risk and the reporting of quantitative data
on counterparty credit quality and more information about contractual terms.
Federal Bank Regulatory
Agencies
In 1994, the Federal Reserve and the other federal
banking agencies proposed and issued in final form
expanded regulatory reporting requirements that
applied to all banking organizations. They required,
among other things, a more detailed breakdown of
notional amounts and, for larger banks, the market
values of derivative instruments according to broad
risk exposure and management objectives. For
larger banks, they also required additional information on trading revenues and the effects of end-user
derivatives on income. This information became
available to the public beginning with regulatory
reports for the first quarter of 1995. These regulatory requirements may also have influenced disclosure in the annual reports for 1994.
Euro-currency Standing Committee
of the Group of Ten Central Banks
Even though the derivatives market is considered
global, disclosure practices among countries are
4. The Institute of International Finance, Inc., A Preliminary
Framework for Public Disclosure of Derivatives Activities and
Related Credit Exposures (Washington: August 1994).
quite diverse. As a result, several efforts have been
made to harmonize and improve disclosure about
derivatives activities internationally. A working
group of the Euro-currency Standing Committee of
the Group of Ten central banks, chaired by Peter R.
Fisher, Executive Vice President of the Federal
Reserve Bank of New York, developed recommendations regarding ways to improve the financial
reporting of derivative activities; these recommendations may have influenced the 1994 annual
reports of firms involved in derivatives activity. 5
The Fisher Group recommended principally that a
firm disclose quantitative information about its
market and credit risk exposures and its performance at managing these risks to frame its discussion of qualitative information. The report recommended that, to the extent feasible, quantitative
information on a firm's consolidated portfolios
(that is, derivatives and on-balance-sheet financial instruments relating to traditional banking
activities) should also be reported. These data
should reveal the portfolios' riskiness and management's success at managing that risk. A key recommendation was that firms base their annual report
disclosures on the kinds of information the firm's
own management uses for analyzing risk. Many
firms might, for example, disclose value-at-risk
measures for market risk if they use that method in
their risk management processes. Such measures
assess the likelihood of loss from adverse market
price movements over a specified time period (see
box "Risks Associated with Derivatives").
For credit risk, the Fisher Group noted that most
firms were disclosing only current credit exposure.
It suggested that transparency would be improved
if information about counterparty credit quality,
potential exposure, and the variability of credit risk
exposure were disclosed. 6 Management's success
5. See Bank for International Settlements, Public Disclosure of
Market and Credit Risks by Financial Intermediaries, discussion
paper prepared by a working group of the Euro-currency Standing
Committee of the Central Banks of the Group of Ten countries
(Basle: September 1994).
6. Current credit exposure is the loss that would be experienced
if a counterparty defaulted today. The contract's fair market value
today, or replacement cost, is widely viewed as its current credit
exposure. Only a contract that is favorable to the bank (that is, an
asset) has current credit exposure. A contract that is unfavorable to
the bank (a liability) presents credit risk to the bank's counterparty.
Potential credit exposure attempts to measure the maximum loss
on a derivative contract that may occur over the life of the contract
Overview of Derivatives Disclosures by Major U.S. Banks
at controlling credit risk would be indicated to
financial statement users by the disclosure of actual
losses and other details about derivatives with
credit problems.
COMPARISON OF 1993 AND 1994
ANNUAL REPORTS OF THE TOP TEN
U.S. DEALER BANKS
The analysis of the derivatives disclosures focused
on information presented by the top ten U.S. dealer
banks (measured by the notional amounts of their
derivatives holdings) in their 1994 annual financial
reports (table l). 7
In general, substantial improvements were made
in the 1994 annual reports relative to 1993 reports. 8
In particular, banks expanded their management's
discussion and analysis of their derivatives activities and provided more quantitative information
about these activities than in the 1993 reports.
When the 1994 annual reports are compared with
1992 year-end financial statements (which generally disclosed little more than notional amounts,
credit exposures, the total value of the trading
account, and total trading profits), it is clear that the
groups pushing for improved standards have had
significant influence in improving the overall quality of disclosures about derivatives activities.
Banks make disclosures about derivative instruments on a consolidated basis in two main sections
of a typical annual report: management's discussion and analysis and the annual financial statements. The first is an analysis of the bank's financial condition and performance (including financial
data) and typically includes a narrative of the
bank's risk exposures and techniques for managing
if the counterparty defaults in the future. This potential loss can be
estimated by projecting the fair market value of the contract based
on the occurrence of favorable (unfavorable to the counterparty)
rate or price changes. The statistical likelihood of favorable price
movements can be assessed from historical price data.
7. In this article, "bank" means banking organizations that
comprise bank holding companies and their bank affiliates and
other subsidiaries that are consolidated for presentation in an annual
report.
8. The banks making up the top ten changed from 1993 to 1994.
Continental Bancorp., which was ranked in the top ten in 1993, was
acquired by BankAmerica Corp. in 1994. It was replaced by Bank
of New York, which had been eleventh in 1993.
825
risk. This section of the annual report is not audited
by independent accountants. The second section,
the annual financial statements, reports the financial position, income, changes in stockholders'
equity, and cash flow and include many footnotes.
The financial statements and their footnotes are
audited.
For purposes of this article, disclosures in both
sections of the annual report were reviewed. In
analyzing these reports, certain decisions were
made to assess whether or not an institution had
made a particular disclosure. For example, one
institution might explicitly state certain quantitative information. In another bank's annual report
similar information could be inferred from other
complementary data. To distinguish between the
two types of presentation, the analysis did not
consider indirect presentation to be disclosure.
Qualitative
Information
As indicated earlier, SFAS 119 now requires firms
to discuss the use of derivatives in risk management activities (table 2). Although firms are not
explicitly required to make this qualitative disclosure about trading activities, virtually all of the
banks discussed in some detail the various risks
they face in their trading operations and their processes for controlling their exposures. Nine of the
top ten banks (the one missing had the smallest
trading portfolio) discussed measurement and con-
1.
Ten U.S. banks with the largest notional amount of
derivative contracts outstanding on December 31, 1994
Billions of dollars
1. The fair market value, sometimes referred to as the replacement cost or
current credit exposure, is for off-balance-sheet derivatives subject to the
risk-based capital standards.
SOURCE. Publicly available regulatory financial statements filed with the
Federal Reserve.
826
Federal Reserve Bulletin • September 1995
trol of credit and market risks. More than half
described how they manage the liquidity demands
of their operations. Three banks rounded out their
management discussion and analysis by describing
how they control operating and legal risks. All
institutions (to varying degrees) included cash
market financial instruments (for example, bonds)
within the scope of their narrative of risk management, an approach that provides a more balanced,
broad-based discussion of managing risk exposures
than would a strict focus on derivatives. The number of banks discussing these specific risks and
their methods of controlling risk exposure has
increased significantly since the 1993 annual
reports, in which only the four largest dealers did
so. Few banks explicitly discussed operational
risks, but all discussed legal risks in varying detail
in describing the legal characteristics of their net-
Number of top ten banks discussing management
objectives and derivative risks in their annual reports,
1993 and 1994
1. Generally, disclosures about risk management methods and approaches
for estimating market value were not as extensive in 1993 as they were in
1994.
ting arrangements with counterparties. 9 In addition,
half of the organizations indicated in their 1994
reports whether or not they used leveraged derivatives (contracts using multipliers or other means to
scale up cash flows relative to the reported notional
amounts) in their business. This issue was not
discussed in earlier annual reports.
Most organizations described their risk control
processes by identifying the management group
responsible for setting trading policies and describing the managerial procedures that were in place to
ensure compliance with these policies. The typical
report gave an overview of risk management that
briefly sketched the bank's business objectives and
its management philosophies (for example, describing the extent to which its operations are centralized or diffuse). Most banks described the information systems and management tools used for
assessing results.
As required under generally accepted accounting
principles, all organizations discussed in the footnotes to their financial statements their methods for
reporting derivatives used for trading or end-user
purposes. Under these standards, a firm must discuss its accounting policies and describe how it
values derivative contracts, recognizes income and
expense from derivatives, and nets derivatives for
financial reporting purposes. Firms have long been
required to describe their accounting policies in
their annual reports; however, the disclosures in
1994 were much more specific regarding the
accounting treatments for derivatives. More
recently, firms have been required to disclose the
fair value of financial instruments and their means
of determining fair value. In line with these requirements, all banks provided much more detailed and
useful descriptions of the methods and assumptions
used in valuing financial instruments that do not
have observable market prices.
9. Under a master netting agreement, the counterparties agree to
settle a number of derivatives subject to the agreement on a net
basis in the event of default. Thus, the nondefaulting party can
offset favorable contracts (assets) against unfavorable contracts
(liabilities) owed to the defaulting party. Although master netting
agreements are generally enforceable in the United States, in some
jurisdictions it is uncertain whether the nondefaulting party's
favorable contracts could be abrogated and unfavorable contracts
enforced in an insolvency proceeding of the defaulting party.
Overview of Derivatives Disclosures by Major U.S. Banks
Quantitative
827
Trading Disclosures
Information
The top ten institutions continued to expand the
disclosure of the general terms of their derivative
contracts (table 3). All banks last year reported the
notional amounts of various types of derivative
contracts, in almost all cases distinguishing dealer
positions from those used for end-user purposes.
This year, all banks not only presented the notional
amounts of their derivatives but also provided a
schedule of certain derivative positions listing their
notional amounts by maturity; seven banks provided this type of schedule last year. More than half
of the banks this year reported gross positive and
negative market values of their derivative positions
as of the report date in contrast to 1993 when no
banks reported gross negative values.
For 1994 most dealers expanded the level of detail
in the reporting of their trading positions and trading revenues (table 4). The trading account for the
first time disaggregated the fair values of derivative
contracts in a gain position (assets) from those with
losses (liabilities) because of more restrictive rules
on netting for accounting purposes that were effec-
4.
Number of top ten banks disclosing in their annual
reports data on risks and income relating to derivatives
they trade, 1993 and 1994
Type of quantitative disclosure
Number of banks
disclosing
1993
1994
10
7
10
—
Number of top ten banks disclosing the general terms
of derivative contracts in their annual reports, 1993 and
1994
Number of
banks
g
Type of quantitative disclosure
j
1993
5
10
B
0
rates
Receive or pay rates
Receive or pay notional amounts .
!
1994
9
10
4
0
1
7
2
6
10
1
- ' ' -'X^SBSi:
3
2
10
10
MARKET VALUE DATA
Gross positive market value
Gross negative market value
Tradinf
.6. a£e°ts
....
liabilities S e P a r a t e d . f r ° m . t n l d ! n g .
Cash instrument detail
End-of-period
^Average for period „ . . .
End-of-period
Average for period
No detail of trading a c c o u n t totals only
End-user derivatives positions
Overall market value ..
By related asset or liability being hedged
By type of derivative
RISKS OF OFF-BAT ANCE-SHEE r
INSTRUMENTS
f activities
• level,
holding]
High and low value at risk.
Average value at risk
Confidence band determined by
aaiiy value at USK
Daily change in value of portfolio ..
Average daily change in value of
portfolio
Change in portfolio value exceeded
value at risk
Credit risk
Current credit exposure (that is.
with netting)
Maturity schedule
Volatility of credit exposure . . .
Gross positive market value
Potential credit exposure
Counterparty credit quality
Concentrations
Exposure by geographic area ..
Exposure by industry group or
government entity
Other (for example, exposures
than percentage of capital)
Collateral and other credit enhancements
Actual credit losses
Nonperforming contracts
Risk-based capital credit equivalent
for derivatives
10
0
0
0
0
10
8
6
9
7
Liquidity risk
exchange traded derivatives
Other
DISAGGREGATION OF TRADING INCOME
Risk; exposure or
< line of business
Type of instrument
Cash positions versus derivative
instruments
Other
Net interest revenue from cash positions .
0
7
1
4
9
0
7
2
5
4
6
6
2
6
828
Federal Reserve Bulletin • September 1995
tive in 1994.10 These details were supplemented
with more information on the types of instruments,
both cash market and derivative, that made up the
trading portfolio.
Market Risk. The four largest derivatives dealers
(according to the share net trading profits contributed to 1994 pretax income) reported both management's intended limits on risk exposure (daily
value at risk at year-end, and high, low, and average value at risk during the year) and actual results
in trading portfolio volatility. This value-at-risk
disclosure also included the likelihood, or statistical confidence level, that such results would be
observed, although assumptions about the holding
period for estimating the results were typically not
specified. The disclosure of numerical details of
value at risk by the larger dealers is a significant
innovation for 1994. In the previous year's annual
reports the banks disclosed that their risk management methods relied on value at risk without
disclosing value-at-risk data, whereas in their 1992
reports many banks were virtually silent about their
risk management techniques. The indicators of
actual trading portfolio performance used in 1994
by these four banks included histograms of daily
price changes, reporting the annual high, low, and
average price changes of the trading portfolio, and
the frequency of daily price changes in excess of
the day's value at risk.
Four other banks also interwove quantitative
details in the qualitative discussion about risk management policies, indicating value-at-risk measurements (or other methods analogous to value at
risk). These banks, however, did not publish information about the actual performance of their trading portfolios. Only one of these four banks gave
some flavor to the dynamics of their risk-taking
during the year by disclosing the high and low
limits of its value at risk during 1994.
In its paper, the Fisher Group illustrated its
recommendations with several approaches to disclosing market risk and the firm's performance in
managing the risk. Some of the top ten banks used
these approaches in their 1994 annual reports
(table 5). Four banks used a graphical approach to
convey information about their trading portfolios.
One bank provided a scatter diagram of daily value
at risk and daily changes in portfolio value. Two
institutions published a histogram of actual portfolio performance, indicating the distribution of
daily profit or loss but not daily value at risk, so
that gauging results against management's intentions was difficult. The fourth institution showed
a bar chart of quarterly high, low, and average
value at risk and quarterly trading revenue.
Credit Risk. Besides increasing information on
market risk, the banks disclosed more about their
credit risk in the 1994 annual reports (table 4). As
in the 1993 reports, all banks reported their current
credit exposure. Five banks gave indications of
the credit quality of their derivatives portfolio by
disclosing the proportion of credit exposures to
investment-grade and unrated counterparties. One
institution broke down its derivatives credit exposure by its internal risk rating—the first time this
disclosure has been made in the annual report of
a top ten dealer bank. Six institutions published
details about the concentration of current exposure
according to industry or government entity. Several
among these also reported current exposure by
geographic concentration. Moreover, two institutions reported the value of collateral and other
credit enhancements connected with their trading
portfolios. The banks provided little quantitative
information of this type in 1993, when some gave
only limited data on industry concentrations.
5.
10. Beginning in 1994, for accounting purposes companies were
permitted to net assets and liabilities relating to those derivative
contracts with a counterparty that were subject to a legally enforceable master netting agreement and were not permitted to net across
counterparties. In previous years, industry practice was to "grandslam" net—that is, report the net fair market value of all derivative
contracts across all counterparties. As a result of this change in
method, several large dealer institutions saw their assets and liabilities increase by several billions in 1994.
Number of top ten banks with 1994 disclosures about
market risk based on Fisher Group recommendations
Overview of Derivatives Disclosures by Major U.S. Banks
In 1993, only four banks quantified their actual
credit losses and nonperforming derivatives contracts or explicitly stated that the amounts were
immaterial. In 1994, two additional banks reported
information about derivatives with credit problems.
Nine institutions furnished a maturity schedule of
derivatives contracts to indicate credit (and market) risk.
Although these types of disclosure are an
improvement over 1993 reports, other measures of
credit risk have yet to be explored in these annual
reports. For example, potential credit exposure
has been reported by only two banks (which also
reported such estimates in 1993), and none of the
top ten reported any measure of the volatility of
credit risk arising from derivatives. Most banks,
however, quantified in their annual reports the
benefits of reduced credit exposure resulting from
netting agreements with counterparties.
The Fisher Group suggested several means of
indicating the firm's credit risk and its performance
in managing it. Many of the quantitative measures
were adopted in 1994 by the top ten banks or had
been disclosed in previous years (table 6).
As a supplement to their disclosures of credit
risk and capital adequacy, seven dealer banks
reported the credit-equivalent amount of risk-based
capital for off-balance-sheet contracts in describing
their risk-weighted assets and risk-based capital
ratios.
Liquidity Risk. As in 1993, quantitative information about liquidity risk was limited in 1994 annual
reports (table 4). Three banks distinguished
exchange-traded contracts from over-the-counter
instruments, generally through disclosure of the
notional amounts related to futures contracts and
exchange-traded purchased options versus overthe-counter contracts. Exchange-traded contracts
6.
Number of top ten banks with 1994 disclosures about
credit risk based on Fisher Group recommendations
829
are generally considered more liquid than over-thecounter instruments because of their standardized
terms, readily available price information, and low
credit risk.
Dealer Income. To comply with SFAS 119, all
of the top ten banks disaggregated their trading
revenues in their 1994 annual reports compared
with eight institutions in 1993 (table 4). Seven
banks reported results according to the type of
instrument that earned the income. Five banks
(compared with two in 1993) reported their trading
income according to their lines of business or risk
exposure with little differentiation between derivatives and cash-market instruments. There was considerable variability among the income disclosures,
with some providing only the information required
under SFAS 119 and others giving a more complete picture of profits from trading both derivative
and nonderivative financial instruments. Five institutions also disclosed net interest income from
traded cash positions.
Disclosures about End-User Derivatives
The primary focus of disclosure about derivatives
used for hedging or other risk management purposes is market risk. Market risk incorporates information about the institution's exposure to interest
rate (and to a lesser extent foreign exchange) risk
arising primarily from traditional bank activities,
such as those involving investments, loans, and
deposits. The most common disclosures about
derivatives that had been designated for hedging or
other risk management purposes were schedules of
contractual terms: notional amounts, maturities,
and (for swaps) rates paid and received.
Market Risk. Almost all banks limited their discussion of market risk (outside the trading portfolio) to interest rate risk. The most prevalent
means of communicating how derivatives are used
to manage a bank's interest rate risk was a gap
position schedule, which was used by eight
banks—the same number as in 1993 (table 7). Gap
schedules are used in a method of managing
interest rate risk that organizes financial assets and
liabilities according to maturity or repricing frequency in a number of time intervals. The differ-
830
Federal Reserve Bulletin • September 1995
ence between assets and liabilities in each time
interval ( " g a p " or net exposure) forms the basis
for assessing interest rate risk. Under this approach,
derivatives of various maturities can be used to
adjust the net exposure of each time interval to
alter the overall interest rate risk of the institution.
Gap analysis is the simplest approach to assessing interest rate risk. It is a "snapshot" that portrays the risk for only the date of the balance sheet.
Thus, it does not capture the dynamics of changes
in the bank's mix of products or the effect of
changes in rates on instruments that can be called
or redeemed. To remedy this deficiency, banks
supplemented the gap schedule with either a discussion of the effect on earnings of a specified rate
shock or a discussion of earnings-at-risk methods
(a method analogous to value at risk) applied to
nontrading portfolios. Four institutions described
the consequences to earnings of an interest rate
shock. One indicated the effect large changes in
rates that were observed in 1994 would have had
on that year's earnings had derivatives not been
in place for hedging purposes. The other three
reported the effect on projected 1995 income of an
arbitrary shock of 100, 150, or 200 basis points in
interest rates. The assumptions in the analysis about
how quickly the arbitrary rate shocks developed
were either not stated or only vaguely described.
One bank disclosed the duration (the weightedaverage collection time of an instrument's cash
flows) of its risk management derivatives but did
not provide the duration of cash positions; this
omission makes it difficult to assess the effect of
7.
N u m b e r of top ten banks disclosing details of end-user
derivatives in their annual reports, 1993 and 1 9 9 4
the derivatives on the overall duration of the institution's financial instruments. Most banks, in varying detail, described whether the derivatives were
linked to specific components of the balance sheet
or were used to manage overall risk exposures.
In recognition of the expansion of value-at-risk
methods to activities not related to trading, two
banks furnished quantitative information on the
value at risk related to end-user derivatives. Also,
one institution provided a corporate-wide value-atrisk measure that took into account both trading
and end-user derivatives as well as traditional
financial instruments.
SFAS 119 made technical changes to the way
that the fair value of financial instruments is to be
disclosed in annual reports. As a result, disclosure
of the fair value of financial instruments in the
1994 reports was generally clearer and more understandable than before. For the first time, firms were
required to disclose the fair value of financial assets
and liabilities carried at historical cost separately
from the fair value of derivatives used to hedge
those instruments. Made in this way, the disclosure
showed more clearly whether an instrument was
favorable (an asset) or unfavorable (a liability) at
year-end.
Effect of Derivatives on Earnings. Details of the
way derivatives affect income and expense
accounted for on an accrual basis (that is, instances
in which instruments are not marked to market
with gains or losses recognized in income but instead track cash flows) were more widely reported
in 1994. Eight banks, compared with four in 1993,
reported the effect that derivatives accounted for on
an accrual basis had on revenue. Half of these
institutions also reported the overall effect on net
interest margins of their end-user derivatives activities. Five banks disclosed deferred gains or losses
on end-user derivatives and provided details of
when the deferrals would be reflected in future
earnings; only two banks published this information in 1993.
CONCLUSION
I
The level of detail and clarity of annual report
disclosures about derivatives activities greatly
improved for the top ten dealer banks as a group
Overview of Derivatives Disclosures by Major U.S. Banks
for 1994. The banks that published the more innovative annual reports in 1993 continued to lead the
group in 1994 with quantitative details of value at
risk and actual results of their trading activities.
The disclosures in 1994 (as in 1993) were more
informative for those banks whose trading revenues composed a larger share of their overall
income. Institutions that focused primarily on traditional banking activities made fewer disclosures
about trading than other dealers, perhaps because
trading was an adjunct to their primary business.
The experimentation encouraged by the FASB,
regulators, and industry groups is evident from the
diversity of methods used by the top ten banks in
presenting information about their derivatives
831
activities. No annual report can be singled out as
having the best method, and several banks had
unique approaches to disclosing some aspects of
their derivatives activities. As new approaches
are developed by the major banks, further progress
in improving derivatives disclosure will likely be
made.
The Federal Reserve has long supported balanced improvements in annual report disclosures,
particularly those about derivatives activities. The
U.S. federal banking agencies will continue to be
interested in improved disclosures about these
activities and will likely coordinate more extensively with national supervisors from other countries in this important area.
•
832
Treasury and Federal Reserve
Foreign Exchange Operations
This quarterly report describes Treasury and System foreign exchange operations for the period
from April through June 1995. It was prepared by
Peter R. Fisher, Executive Vice President, Federal
Reserve Bank of New York, and Manager for Foreign Operations, System Open Market Account.
Claudia Corra was primarily responsible for
preparation of the report.1
During the second quarter of 1995, the dollar rose
0.6 percent against the German mark but it declined
2.1 percent against the Japanese yen, 1.9 percent
against the Canadian dollar, and 0.3 percent on a
trade-weighted basis. 2 The dollar, which had
declined sharply during the first quarter of 1995 as
expectations of higher U.S. interest rates subsided,
remained under pressure through much of April.
The dollar subsequently stabilized as diminished
expectations of strong economic growth in Japan
and Germany prompted market participants to consider the prospect for lower interest rates in these
two countries and as market participants began to
focus on a G-7 communique released in late April.
By June, foreign exchange market activity had
declined substantially as the dollar proceeded to
settle into fairly narrow trading ranges despite
increased volatility in U.S. interest rate markets. By
the end of the second quarter, the dollar had risen
2.8 percent and 6.1 percent from its historic lows
against the mark and the yen respectively.
The U.S. monetary authorities intervened in
the foreign exchange markets on three occasions
during the period—on April 3, April 5, and
May 31—purchasing a total of $3.6 billion against
1. The charts for the report are available on request from Publications Services, Mail Stop 127, Board of Governors of the Federal
Reserve System, Washington, DC 20551.
2. The dollar's movements on a trade-weighted basis in terms of
other Group of Ten (G-10) currencies are measured using an index
developed by staff at the Board of Governors of the Federal
Reserve System.
the German mark and the Japanese yen. On each
occasion purchases by the U.S. monetary authorities were divided evenly between the Federal
Reserve System and the U.S. Treasury Department's Exchange Stabilization Fund (ESF). In
other operations, the Mexican authorities drew a
total of $5 billion on their medium-term swap
facility with the ESF. The Bank of Mexico also
renewed its short-term swaps with the Federal
Reserve and the ESF, each for $1 billion for an
additional ninety days.
THE DOLLAR ENTERS THE QUARTER
UNDER PRESSURE
Toward the end of the first quarter the dollar continued to reach successive all-time lows against the
yen and proceeded to close the quarter at ¥86.50
and DM 1.3735. Several factors weighing on the
dollar at that time carried over into the second
quarter. First, increasingly strong rhetoric from
both sides surrounding the U.S.-Japan trade talks
on automobiles and parts, as well as press reports
that the United States was considering sanctions,
appeared to herald a breakdown in the negotiations.
Second, heavy dollar sales against the yen by Japanese corporations and financial institutions continued in early April despite the April 1 start of the
new Japanese fiscal year. Finally, market rumors of
dollar sales by Asian central banks added pressure
on the U.S. currency.
U.S. MONETARY AUTHORITIES PURCHASE
DOLLARS AGAINST THE MARK AND THE YEN
On April 3, with the dollar trading at ¥86.50, the
Federal Reserve Bank of New York's Foreign
Exchange Desk entered the market in Asian trading for the U.S. monetary authorities, purchasing
833
$500 million against the yen from dealers in Tokyo,
Singapore, Hong Kong, and Sydney. The dollar
rallied briefly after the intervention but gave up
all of its gains by the New York open. At about
11:20 a.m. in New York, the Desk entered the
market again, buying $750 million against the mark
and $250 million against the yen. The dollar-yen
operation was coordinated with the Bank of Japan.
Treasury Secretary Robert E. Rubin confirmed the
operation, stating, "This Administration believes
a strong dollar is in America's interest, and we
remain committed to strengthening the fundamentals that are ultimately important to maintaining
a strong and stable currency." Overall, the U.S.
monetary authorities purchased $1.5 billion during
the course of the global trading day. However, the
official purchases met sustained selling on any
rally, and the dollar ended the day slightly lower, at
DM 1.3722 and ¥86.10.
On behalf of the U.S. monetary authorities, on
April 5 the Desk again entered the market, at about
10:20 a.m., with the dollar trading at DM 1.3737
1.
and ¥86.00. The Desk was joined in this operation
by the Bundesbank and the Bank of Japan. Treasury Secretary Rubin confirmed the coordinated
intervention, stating, "In effect, what you have is a
shared commitment to a strong dollar, because it is
in our interest and in the interests of the other
economies of the world." During the day, the U.S.
monetary authorities purchased $850 million
against the mark and $250 million against the yen.
The dollar initially rallied on the intervention,
reaching intraday highs of DM 1.3860 and ¥86.63,
before drifting lower in thin afternoon markets to
close essentially unchanged at DM 1.3720 and
¥86.01.
THE DOLLAR REACHES A NEW
LOW AGAINST THE YEN
HISTORICAL
After these operations in early April, the dollar
continued to decline against the yen. Increasingly,
market participants viewed the sustained apprecia-
F o r e i g n e x c h a n g e h o l d i n g s o f U.S. m o n e t a r y authorities, b a s e d o n current e x c h a n g e rates
Millions of dollars
217.9
102.45
NOTE. Figures may not sum to totals because of rounding.
1. Purchases and sales include foreign currency sales and purchases
related to official activity, swap drawings and repayments, and warehousing.
2. Calculated using marked-to-market exchange rates; represents the difference between the sale exchange rate and the most recent revaluation
exchange rate. Realized profits and losses on sales of foreign currencies,
computed as the difference between the historic cost-of-acquisition exchange
rate and the sale exchange rate, are shown in table 2.
3. Foreign currency balances are marked to market monthly at monthend exchange rates. ;•:
4. See table 4 for a breakdown of Mexican swap activities. Note that the
investment income on Mexican swaps is sold back to the Bank of Mexico.
5. Valuation adjustments on peso balances do not affect profit and loss
because the effect is offset by the unwinding of the forward contract at the
repayment date. Note that the ESF does not mark-to-market its peso holdings, but the Federal Reserve System does. However, Mexico is obligated
to maintain in dollar terms the value of ESF peso holdings resulting from
Mexican drawings under the Medium-Term Exchange Stabilization
Agreement.
6. Interest receivables for the ESF are revalued at month-end exchange
rates. Interest receivables for the Federal Reserve System are carried at cost
and are not marked-to-market until interest is paid.
834
Federal Reserve Bulletin • September 1995
tion of the yen as a symptom of underlying structural problems in the Japanese economy. As a
result, they began to focus their attention on the
need for new monetary, fiscal, and deregulatory
measures from the Japanese authorities to stimulate
domestic demand and spur import growth. To
help stem the yen's rise, the Japanese authorities
unveiled an emergency economic plan on April 14.
That day the Bank of Japan also cut its official
discount rate (ODR) 75 basis points, to 1 percent.
Despite the cut in interest rates, the dollar-yen
exchange rate received little support from the package as many dealers viewed the fiscal and deregulatory measures as lacking in specifics. In addition,
the absence of progress in the U.S.-Japan auto talks
led U.S. officials to raise publicly the possibility of
imposing trade sanctions against Japan, adding
further downward pressure on the dollar. On
Wednesday, April 19, the dollar reached a new low
of ¥79.75.
The dollar also reached a period low that day of
DM 1.3472 against the mark—close to the historical low of DM 1.3438 reached on March 8, 1995.
Other factors weighing on the dollar-mark
exchange rate included heightened political concerns ahead of the first round of the French presidential election and regional elections in Italy, both
scheduled for April 23, which led to renewed
appreciation of the mark within Europe. Moreover,
in the United States, expectations unwound for any
further monetary tightening as a series of weakerthan-expected U.S. economic data releases—
particularly declines in retail sales, industrial production, and housing starts—appeared to signal a
clear slowdown in the pace of U.S. economic
growth.
THE DOLLAR BEGINS TO STABILIZE
The dollar began to stabilize against both the mark
and the yen in late April and early May. First, the
overhang of long-dollar positions against the yen,
evident at the start of the period, apparently began
to dissipate. Second, anticipation of the April 25
meeting of G-7 finance ministers and central bank
governors helped lift the dollar off its lows as
dealers began to speculate about the possibility of a
coordinated policy response to dollar weakness.
Subsequent to the meeting, the G-7 finance minis-
ters and central bank governors released the following statement:
The Ministers and Governors expressed concern about
recent developments in exchange markets. They agreed
that recent movements have gone beyond the levels
justified by underlying economic conditions in the major
countries. They also agreed that orderly reversal of those
movements is desirable, would provide a better basis for
a continued expansion of international trade and investment, and would contribute to our common objectives of
sustained non-inflationary growth. They further agreed
to strengthen their efforts in reducing internal and external imbalances and to continue to cooperate closely in
exchange markets.
By the end of April the dollar reached
DM 1.3855 and ¥84.15.
In early May, international investors began to
unwind their long German mark positions established during the first quarter, when exchange
rate volatility had created a rush toward markdenominated assets. First, investors began to
increase their exposure to the higher yielding European markets, particularly after pre-election uncer-
N e t profits or l o s s e s ( - ) o n U . S . Treasury
and Federal R e s e r v e f o r e i g n e x c h a n g e operations,
b a s e d o n historical c o s t - o f - a c q u i s i t i o n e x c h a n g e rates
Millions of dollars
Valuation profits
outstanding as
Mar. 31. 1995
Deutsche
Japanese yen
3,747.2
3,520.5
1.569.8
4.939.9
Total
7,267.7
6,509.8
Realized profits and losses
from foreign currency sales,1
Mar. 31-June 30, 1995
Deutsche i
Japanese yen
259.0
284.7
196.6
285.1
Total
1
543.7
481.7
Valuation profits and losses on
outstanding assets and liabilities,
June 30, 1995*
Deutsche marks
Japanese yen . . .
3,433.5
3,454.8
1,342.0
4.966.4
Ibtal
6,888.3
6.308.5
NOTE. Figures may not sum to totals because of rounding.
1. As indicated in table 1. foreign currency sales totaled $2,100 million
against German Deutsche marks and $1,500 million against Japanese
yen.
2. Valuation profits or losses are not affected by peso holdings, which are
canceled by forward contracts.
Treasury and Federal Reserve Foreign Exchange Operations
tainties in Italy and France receded, and these flows
helped weaken the mark within Europe. Second,
portfolio managers, many of whom were underweight U.S. assets, began to underperform their
benchmarks when the U.S. bond market rally accelerated. As these investors, in turn, increased their
exposure to the U.S. market, the dollar moved
further off its lows.
Buoyed by these flows, the dollar remained
steady despite further signs of weakness in the U.S.
economy, particularly the April nonfarm payroll
report, and associated speculation that the Federal
Reserve might need to lower interest rates. Similarly, the dollar had little reaction to the May 10
announcement that, because of a breakdown in
U.S.-Japan trade talks on automobiles and parts,
the United States would initiate sanctions against
Japan. The dollar's ability to trade through these
ostensibly negative developments suggested to
some market participants that, by early May, the
dollar's recent problems had become fairly well
discounted.
THE DOLLAR RALLIES
SUDDENLY
On May 11 and 12, several factors came together to
propel the dollar higher. Early on May 11, the U.S.
House Budget Committee approved a series of
deficit reduction measures, causing some shortcovering on increased optimism over the U.S. fiscal
outlook. During the European trading session, holders of short-dollar positions were further unnerved
by market reports of dollar buying by some
large Asian accounts. These factors helped lift the
dollar through the technical resistance level of
D M 13920, bringing the dollar to D M 1.4120 by
the time the New York market opened. Later that
morning, Bundesbank President Hans Tietmeyer
said that both Germany and its partner economies
would suffer if the mark remained overvalued and
added that, "We are not . . . interested in a sustained currency overvaluation." The dollar subsequently broke through the long-standing technical
resistance level of D M 1.4225, causing the dollar
to spike higher as dealers scrambled to cover substantial short-dollar positions. Over the two-day
period, the dollar rose six pfennigs, to D M 1.4465,
and three yen, to ¥86.65. Buoyed by the dollar's
sharp rise, sentiment toward the U.S. currency
http://fraser.stlouisfed.org/
Federal Reserve
Bank of St. Louis
tfc'-'
835
turned quickly positive, a shift that encouraged
some fresh dollar buying. On May 18 and 22, the
dollar reached intraquarter highs of DM 1.4618 and
¥87.72 respectively.
However, a lack of follow-through buying disappointed some market participants. The dollar was
also adversely affected by weaker-than-expected
U.S. durable goods data and existing home sales
data, which prompted market participants to speculate on a possible interest rate ease by autumn.
With market liquidity reduced because of holidays
in Europe, the dollar fell sharply on May 25 and
26, reaching D M 1.3740 and ¥82.45.
G-10 COUNTRIES INTERVENE TO SUPPORT
THE DOLLAR
On the morning of Wednesday, May 31, with the
dollar trading at D M 1.3850 and ¥82.70, the Desk
entered the market in concert with the central banks
of the other G-10 countries, purchasing dollars
against marks and yen in an operation initiated by
the U.S. monetary authorities. The U.S. monetary
authorities' purchases totaled $500 million against
the mark and $500 million against the yen.
The operation took the market by surprise, triggering a shortcovering rally. Treasury Secretary
Rubin confirmed the intervention as consistent with
objectives expressed in the G-7 communique of
April 25. Market participants interpreted the operation as a signal of increased coordination by the
major central banks and a reflection of their mutual
desire for a stronger dollar. The dollar closed the
day at D M 1.4135 and ¥84.40.
THE DOLLAR TRADES IN NARROW RANGES
AGAINST THE MARK AND THE YEN DURING
MOST OF JUNE
During June, the dollar settled in narrow trading
ranges of DM 1.3880 to D M 1.4200 and ¥84.00 to
¥85.50. Dealers became increasingly reluctant to
take risks, in part because of M a y ' s volatile dollar
moves but also because of fears of further coordinated intervention ahead of the G-7 summit, held
in Halifax, Canada, on June 15-17. While the G-7
Halifax communique offered no new initiatives on
the dollar, it endorsed the April statement of the
836
Federal Reserve Bulletin • September 1995
G-7 finance ministers and central bank governors,
which called for an "orderly reversal" of the dollar's decline.
Increased uncertainty over the near-term outlook
for interest rate differentials with Germany and
Japan also kept the dollar pinned in narrow trading
ranges. The surprisingly weak May nonfarm payroll number released on June 2 reinforced market
perceptions of slower U.S. economic growth and
increased market participants' expectations of an
ease in U.S. monetary policy. At the same time,
market participants also began to focus on the
prospects for rate cuts in Germany and Japan.
In Germany, weak industrial production data for
February and M3 data for the first quarter introduced the idea of a possible Bundesbank ease
before the Bundesbank council's midsummer
recess. In Japan, continued signs of stagnant
3.
Currency a r r a n g e m e n t s
demand and growing concerns over the health of
Japan's banking system prompted fears that Japan
would slip back into recession.
Throughout June, market participants increasingly took the view that the United States would
impose trade sanctions on Japan on June 28, as
announced in early May. Despite this possibility,
the dollar-yen exchange rate traded with a steady
tone, in part, because market participants were
unable to reach a consensus on the ultimate impact
of sanctions. Some viewed the likely imposition of
sanctions as negative for the dollar, while others
held the opposite view, expecting that sanctions
would effect a faster reduction in the Japanese
trade surplus. The dollar briefly rallied after the
June 28 agreement between the United States and
Japan on automobiles and parts but soon gave up
its gains as dealers came to view the commitments
involved as insufficient to materially reduce
Japan's trade surplus. The dollar closed the quarter
at DM 1.3812 and ¥84.65.
Millions of dollars
MEXICAN FINANCIAL MARKETS FIND A
RANGE OF STABILITY
FEDERAL RESERVE
RECIPROCAL ARRANGEMENTS
: of Canada
Bank of England
Bank of France
Deutsche
Bundesbank I
»
• X*
JoanK ot Italy
Bank of Japan
J
Bank of Mexico'
Regular swaps
Temporary swaps ..
Netherlands Bank . . . .
Bank of Norway
Bank of Sweden
Swiss National Bank .
for International Settlements
against Swiss francs
against other auth
250
1,000
2.000
250
3,000
2,000
6,000
3.000
5,000
0
*
3,000
3,000
500
250
300
4,000
1,000
0
4.
Millions of dollars
1'
55,400
1,000
1,000
0
U.S. TREASURY
EXCHANGE
STABILIZATION FUND
3,000
1,000
8,000
9,000
1. Facilities available to Mexico comprise regular and temporary shortterm swaps between the Bank of Mexico and both the Federal Reserve and
the ESF, as well as medium-term swaps and government guarantees between
the government of Mexico and the ESF. The total amount available from
both medium-term swaps and government guarantees is $20 billion, less any
outstanding drawings on the short-term facilities.
D r a w i n g s and r e p a y m e n t s ( - ) b y M e x i c a n m o n e t a r y
authorities
600
1,250
Bundesbank
of Mexico 1
Regular swaps . . . . . . . . . .
" Mexican States
Over the period, Mexican financial markets recovered substantially as the economy began to show
the effects of tough monetary and fiscal policies
and as some foreign investors cautiously returned
Reciprocal currency
arrangements with
the Federal Resent
Bank of Mexico
Currency arrangements
with the U.S. Treasury
Exchange Stabilization
Fund
Bank of Mexico
(regular)
Medium-term
NOTE. Data are on a value-date basis.
1. Drawing of February 2 was renewed on May 3 for an additional ninety
days.
Treasury and Federal Reserve Foreign Exchange Operations
837
to the Mexican markets. The Mexican peso steadied for the first time since the December 1994
devaluation, appreciating approximately 7.5 percent against the dollar during the quarter. Mexico's
Indice de Precios y Cotizaciones stock market
index recovered as well, rising 19.8 percent in local
currency terms. Nominal interest rates fell dramatically, reflecting diminished inflation expectations.
Mexico's inflation rate peaked in April and then
started to decline, prompting most market analysts
to anticipate further declines later this year.
quarter at Can$ 1.3990, reached a period high of
Can$ 1.3475 on May 15.
On May 8, the Bank of Canada began to ease
monetary policy after a succession of weaker-thanexpected Canadian economic data releases. Over
the period, the call money target range declined a
cumulative 75 basis points, to 7.00-7.50 percent.
Initially pressured by the easier monetary policy
stance, the Canadian dollar withstood the successive declines in interest rates and proceeded to
consolidate in a range of Can$1.3720-Can$ 1.3820.
MEXICAN SWAP ACTIVITY
TREASURY AND FEDERAL RESERVE
FOREIGN EXCHANGE RESERVES
The Mexican authorities drew $3 billion on
April 19 and $2 billion on May 19 on their
medium-term facility with the ESF, bringing the
total amount drawn by Mexico under the MediumTerm Exchange Stabilization agreement to $8 billion. In addition, on May 3, the Bank of Mexico
renewed its short-term swaps with the ESF and the
Federal Reserve System for an additional ninety
days, each for $1 billion.
CANADIAN MONETARY POLICY EASES
Canadian financial markets performed positively
over the period, as concerns over the federal budget
deficit and fears of Quebec independence receded.
The April 12 decision by Moody's to downgrade
the federal government's foreign currency debt to
Aa2 from Aal, and its domestic debt to Aal from
Aaa, was largely anticipated and had little market
impact. The Canadian dollar, having opened the
The U.S. monetary authorities intervened three
times during the period, buying a total of $1.5 billion against yen and $2.1 billion against marks. On
all three occasions, intervention operations were
divided evenly by the Federal Reserve System and
the ESF.
At the end of the period, the current values of the
foreign exchange reserve holdings of the Federal
Reserve System and the ESF were $24 billion and
$29.1 billion respectively. The U.S. monetary
authorities regularly invest their foreign currency
balances in a variety of instruments that yield
market-related rates of return and have a high
degree of liquidity and credit quality. A portion of
the balances is invested in foreign-governmentissued securities. As of June 30, the Federal
Reserve System and the ESF held, either directly
or under repurchase agreement, $9.8 billion and
$13.5 billion respectively in foreign-governmentissued securities.
•
838
Industrial Production and Capacity Utilization
for July 1995
Released for publication August 15
Industrial production was little changed in July for
a third consecutive month. Manufacturing output
decreased 0.2 percent, but the output of utilities
jumped 3.6 percent owing to abnormally high temperatures through much of the month; mining output increased 1 percent. The decline in manufacturing was led by a 3.2 percent drop in the output of
motor vehicles and parts, but the output of many
Industrial production indexes
Twelve-month percent change
Twelve-month percent change
10
10
5
5
Materials
Products
1989
1990
1991
1992
1993
1994
1995
1989
1990
1991
1992
1993
1994
1995
Capacity and industrial production
Ratio scale, 1987 production = 100
- Total industry
Capacity
—--""•"- 140
^
—^
Ratio scale, 1987 production = 100
-Manufacturing
^
120
^
Capacity^,
- 140
120
100
Production
100
s—-—Production
80
I I
1
1
1
80
1
1
1
1
1
1
1
1
1
1
1
Percent of capacity
90
Utilization
1 1
1983
1
1
1
Manufacturing
Total industry
1
1981
1
Percent of capacity
1985
1987
1989
1
1991
1
1
1993
1
1995
80
80
70
70
i
1981
i
i
1983
i
i
1985
All series are seasonally adjusted. Latest series, July. Capacity is an index of potential industrial production.
90
Utilization
i
i
1987
i
i
1989
i
i
1991
i
i
1993
i
1995
839
Industrial production and capacity utilization, July 1995
Industrial production, index, 1987=100
Percentage change
Category
1995
19951
Total
May'
Apr.'
May/
June'
JulyP
Apr.'
June'
121.2
121.2
121.1
121.3
-.6
.0
-.1
-.7
-.1
.1
JulyP
July 1994
to
July 1995
.1
2.6
Previous estimate
121.1
120.9
121.0
Major market groups
Products, total2
Consumer goods
Business equipment
Construction supplies
Materials
118.0
114.4
154.9
108.6
126.1
118.0
114.2
154.9
107.3
126.2
118.1
114.2
156.0
107.4
125.8
118.1
114.2
156.5
106.5
126.3
-.7
-.5
-.6
-1.8
-.5
.0
-.2
-.1
-1.1
.1
.1
.0
.7
.1
-.3
.0
.0
.4
-.8
.4
1.6
.8
6.6
-1.3
4.0
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
123.3
130.4
115.4
100.7
118.0
123.2
130.1
115.5
100.6
120.3
123.1
130.5
114.8
100.9
119.2
122.8
130.2
114.6
101.9
123.5
-.7
-.9
-.4
.5
-.7
-.1
-.3
.1
-.1
1.9
-.1
.3
-.6
.3
-.9
-.2
-.2
-.3
1.0
3.6
2.6
4.0
.8
1.8
3.8
MEMO
Capacity utilization, percent
1994
Average,
1967-94
Total
82.0
Low,
1982
71.8
84.9
July
Apr.'
May'
June'
JulyP
84.1
84.1
83.9
83.6
83.4
3.4
84.1
83.7
83.5
83.5
81.8
88.0
90.4
86.4
83.1
81.4
87.5
90.3
87.9
82.8
81.3
86.5
90.6
87.1
82.3
80.9
85.8
91.5
90.0
3.8
4.3
2.6
-.1
1.4
Previous estimate
Manufacturing
Advanced processing
Primary processing
Mining
Utilities
81.3
80.7
82.5
87.4
86.7
70.0
71.4
66.8
80.6
76.2
85.2
83.5
89.0
86.5
92.6
NOTE. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
1. Change from preceding month.
other industries also decreased significantly. Gains
at producers of electrical machinery, industrial
machinery and computer equipment, and paper
helped stanch the decline. Small offsetting revisions were made to the output growth estimates
for April to June. At 121.3 percent of its 1987
average, industrial production in July was 2.6 percent above its level of July 1994. Capacity utilization decreased 0.2 percentage point in July, to
83.4 percent.
When analyzed by market group, the data show
that the output of consumer goods was unchanged
in July, as a gain in residential sales by electric
utilities was largely offset by a decline in consumer
truck production. Despite an increase in the production of appliances, the output of consumer durable
goods other than automotive products decreased
0.5 percent, with weakness in furniture and miscel-
1995
High,
1988-89
Capacity,
percentage
change,
July 1994
to
July 1995
83.3
81.5
87.7
89.8
88.0
2. Contains components in addition to those shown,
r Revised,
p Preliminary.
laneous consumer goods. The production of nondurable consumer goods increased 0.4 percent, a
rise that was more than accounted for by the
increase in electricity sales; decreases in the output
of clothing and tobacco products limited the gain.
The production of business equipment picked up
0.4 percent, again led by significant gains in the
output of information processing and related equipment; the production of industrial equipment also
posted a small gain. The output of transit equipment fell off sharply in July, with decreases in the
output of trucks and aircraft and related equipment.
The production of other types of business equipment edged down. The output of construction supplies fell; cutbacks occurred in lumber products
and fabricated metal products.
The output of durable and nondurable goods
materials was little changed, whereas the surge in
840
Federal Reserve Bulletin • September 1995
electricity generation pushed the growth in energy
materials to 1.7 percent. Among durable goods
materials, decreases in metals and in motor vehicle
parts and related equipment were offset by further
strong gains among electronics components.
Among nondurables, the output of paper materials
partly retraced its June loss, but the production of
textile materials fell further.
When analyzed by industry group, the data show
that factory output fell 0.2 percent in July, with
decreases at manufacturers of both durable and
nondurable goods; manufacturing production last
increased in January. Several major durable goods
industries experienced decreases of 1 percent or
more; these industries included transportation
equipment, primary metals, fabricated metals products, lumber and products, and miscellaneous
manufactures. Another strong advance in the output of computers contributed to an increase of
about 1 percent in industrial machinery and equipment; a rise in semiconductor and appliance output
contributed to a 2.2 percent increase in electrical
machinery. Over the past twelve months, the production of industrial machinery and equipment has
increased 9.4 percent, and the output of electrical
machinery has risen 13.1 percent. Most nondurable
goods industries cut production in July; only the
production of paper products, which rebounded
from a large drop in June, showed a sizable
increase.
The factory operating rate fell 0.5 percentage
point in July, retreating further from the peak
attained around the turn of the year. Last month's
rate, 82.3 percent, is the lowest rate since February
1994 but remains 1 percentage point above the
1967-94 average. The rate for advanced-processing
industries has declined about 2 percentage points
since its recent peak, while utilization for primaryprocessing industries has fallen 5 percentage
points. The largest decreases in operating rates
since last December have occurred in motor
vehicles and parts, primary metals, lumber, textiles,
apparel, rubber and plastics products, and leather
and products.
The initial estimate of the July operating rate at
utilities was 90 percent, its highest level this year
and just above last year's peak. Gains in coal
mining and in oil and gas extraction contributed to
an increase of nearly 1 percentage point in the
operating rate for mining.
•
841
Statements to the Congress
Statement by Edward W. Kelley, Jr., Member, Board
of Governors of the Federal Reserve System, before
the Committee on Banking, Housing, and Urban
Affairs, U.S. Senate, July 13, 1995
The Board of Governors is pleased to have the
opportunity to present its views on S.874, which
would provide for substituting a $1 coin for the
$1 bank note now in circulation and on several
benefits and costs of making such a replacement.
In summary, a $1 coin would produce a substantial budgetary gain for the federal government,
provided that the $1 note is withdrawn from circulation. The Board's staff estimates that the gain
would be about $2.28 billion, in nominal terms,
during the first five years after introduction of the
new coin and would average about $456 million
per year, in real discounted present value terms,
over the assumed thirty-year life of the $1 coin.
The Board believes, however, that the convenience
and needs of the American public, as well as cost
savings, should weigh heavily in this decision.
Experience in Canada and other countries where
similar changes have been made in recent years
suggests that the public will, over time, find a
$1 coin more convenient than the $1 note. Finally,
we would note that the significance of the U.S.
dollar goes beyond the purchasing power it represents or the utility it provides; for Americans, the
dollar is a symbol of economic and political stability and a source of national pride; consequently,
any change should be made only for the most
compelling reasons. If, after taking account of all
these considerations, the Congress is inclined
toward replacing the $1 note, it should enact legislation with a reasonably delayed effective date so
that all those affected can plan adequately for the
transition.
The effect on the federal budget of issuing coins
and currency notes is not widely understood by
the public, so it may be useful to devote a part
of this statement to reviewing those fundamentals.
Although the accounting processes and budget pre-
sentations are quite different for notes and coins, in
substance:
• Both issuing coins and issuing currency notes
lower the government's effective cost of borrowing
from the public, by approximately the value of the
coin or currency notes in circulation times the
interest rate that the government pays on its debt.
• There is an offsetting cost to the government
associated with servicing the outstanding circulating coins or notes, which involves replacing
"unfit" coins and notes as they wear out and operating the Federal Reserve currency and coinprocessing facilities that provide the public with
good-quality, genuine coins and notes.
Let us start with the following assumptions to
illustrate the budget and accounting processes:
(1) the Treasury's borrowing rate is 5.5 percent;
(2) 7 billion $1 notes will already be in circulation
at the time of the changeover; (3) $1 notes have
a useful life of one and one-half years and cost
3.8 cents each to produce; (4) $1 coins would have
a useful life of thirty years and cost 8 cents each to
produce; and (5) $1 notes and $1 coins would cost
75 cents and 30 cents per thousand pieces respectively to be processed at Federal Reserve Banks.
In the issuance of currency notes, the reduction
in net governmental borrowing from the public
occurs indirectly. The federal government's total
borrowing and total interest outlays are not
affected, but the Federal Reserve System holds a
portfolio of government securities equal to the
value of Federal Reserve notes outstanding, and, at
the margin, the Federal Reserve returns to the
Treasury its full earnings on those securities. These
earnings are, from the Treasury's viewpoint, a
return of its own interest outlays. 1
• In our simplified model, the $7 billion of out1. The federal government budget accounts treat Federal
Reserve earnings paid to the Treasury as a miscellaneous receipt.
842
Federal Reserve Bulletin • September 1995
standing $1 notes provides a gross benefit to the
Treasury of $385 million per year.2
• The cost of servicing the $1 note issue is the
cost of replacing each note every one and one-half
years, or $177 million per year,3 and of processing
it 1.3 times per year at Reserve Banks, or $7 million per year.4
Thus the net benefit to the Treasury associated with
7 billion of outstanding $1 notes is $201 million
per year.5
In the issuance of coins, the reduction in net
governmental borrowing from the public occurs
directly. When the Treasury deposits newly minted
coins at Federal Reserve Banks, it receives credit to
its checking account, and thus the government is
able to make budgeted expenditures without additional borrowing, in the amount of the face value of
the newly deposited coins less their production cost
(which amount we call "seigniorage"). 6
• Seven billion new $1 coins would reduce the
federal government's total borrowing $6.44 billion 7 and total interest outlays $354 million per
year, 8 a gross benefit not much different from the
gross benefit from 7 billion notes.
• But the cost of replacing each coin every thirty
years would be only $19 million per year 9 and of
processing $1 coins at Reserve Banks 0.2 times
only $1 million per year. 10
Thus the net benefit to the Treasury associated with
7 billion of outstanding $1 coins would be
2. $7 billion x 5.5 percent.
3. 7 billion notes -s- 1.5 x $.038.
4. 7 billion notes x 1.3 x $.00075 ($.75 per 1,000 pieces ).
5. $385 million - $177 million - $7 million.
6. The budgetary accounting process for coin production sometimes gives rise to the belief that the booking of seigniorage per se
reduces the Treasury's borrowing requirement. This is not so. It is
being able to spend the newly minted coins that reduces the
Treasury's need to borrow. Such spending seldom occurs directly,
of course; the Treasury ordinarily deposits newly minted coins at
Federal Reserve Banks for credit to its checking account. Reserve
Banks accept only as many new coins as they expect to need to
meet the requirements of depository financial institutions in their
Districts.
7. $7 billion face value - $560 million production cost.
8. $6.44 billion x 5.5 percent.
9. 7 billion coins 30 x $.08.
10. 7 billion coins x 0.2 x $.00030. Note that $1 notes are
typically deposited at Federal Reserve Banks an average of
1.3 times per year. We expect that $1 coins would be deposited
only 0.2 times.
$334 million per year, considerably higher than
that for an equal number of currency notes. 11
At this point in the analysis, replacing $1 notes
with $1 coins would have a favorable effect on the
governmental budget of $133 million per year. 12
However, such a replacement would have a further,
and even more significant, benefit. Based on the
experience of numerous countries that have made a
comparable substitution, as reported by the General
Accounting Office, the government can expect to
issue at least twice as many $1 coins as it would
have issued $1 notes. 13 (This may result partly
from the habit of many people to save their pocket
change at the end of the day, partly from the stock
of uncollected coins in a larger number of vending
machines, and partly from a tendency for banking
and retail establishments to hold larger quantities
of coins than of notes because of higher transportation costs.) In our simplified model, doubling the
number of $1 coins in circulation would add
another $334 million per year to the Treasury's
benefit, for a total benefit of $467 million. 14
The simplified model, of course, does not fully
reflect the real world. There are factors that would
both increase and decrease the $467 million annual
benefit shown above. In particular, growth in
the volume of $1 currency pieces outstanding—
historically, more than 4 percent per year—would,
over time, considerably increase the benefit of substituting coins for notes. On the other hand, some
increase in the use of $2 notes by the public seems
very likely if the $1 note is no longer issued, and
any such increase would reduce the budgetary
gain. In addition, the production cost for higherdenomination notes would rise because fixed costs
at the Bureau of Engraving and Printing would be
spread over a smaller production volume. ($1 notes
account for nearly 50 percent of the total annual
currency note production.)
11. $354 million - $20 million.
12. $334 million - $201 million.
13. In six countries that replaced a note valued at about $1 with
a coin, the General Accounting Office found coin-for-note replacement rates ranging from 1.6 to 1 to 4 to 1. General Accounting
Office, National Coinage Proposals, Limited Public Demand for
New Dollar Coin or Elimination of Pennies (GAO, May 1990),
p. 39.
14. An attachment to this statement summarizes these effects
and is available from Publications Services, Mail Stop 127, Board
of Governors of the Federal Reserve System, Washington, DC
20551.
Statements to the Congress
Taking account of these additional factors, the
Board's staff estimates that, in the first five years of
the implementation, the federal government budget
position would be improved by a total of $2.28 billion (in nominal terms). The average yearly gain
in real present-value terms, over the assumed
thirty-year life of a $1 coin is estimated to be
$456 million. 15
There are other factors that could substantially
add to the gains of such a substitution but that are
inestimable and so are not included in our calculations. For example, there is likely to be a very
considerable numismatic, or sentimental, collecting
of $1 notes as a result of an announcement that
they soon would no longer be issued (although $1
notes would continue to be legal tender).
These gains are unlikely to be achieved, however, if the $1 note is not withdrawn from circulation. First of all, many people, at least initially,
would continue to prefer the note if given a choice.
That being true, the private sector (notably banking
and retail establishments), not knowing how extensively the public would use the $1 coin, would be
reluctant to make the infrastructure outlays necessary for the coin to succeed (training employees on
new cash-register-drawer procedures, ordering of
$1 coin inventories, new arrangements with financial institutions, and the like). Likewise, the public
would refrain from using the new coin if the retail
sector were not prepared. 16 In the meantime, the
public sector (particularly the Bureau of Engraving
and Printing, the Bureau of the Mint, and the
Federal Reserve System; perhaps also the Postal
Service and mass transit systems), not knowing
what the respective demands would be for $1 notes
and coins, and wanting to be able to meet any
likely demand, would inevitably overinvest in production and processing capacity.
As important as the budgetary gains would be,
the Board believes that the convenience and needs
15. The thirty-year estimate uses an inflation rate of zero, a
Treasury borrowing rate of 3 percent, and a rate for discounting
future values to the present of 3 percent. The advantage of expressing the longer-run financial effects in real present-value terms is
that it adjusts for inflation and the time value of the magnitudes
involved.
16. For an excellent treatment of "network externalities" in
currency systems, see John P. Caskey and Simon St. Laurent, "The
Susan B. Anthony Dollar and the Theory of Coin/Note Substitutions," Journal of Money, Credit, and Banking, vol. 26 (August
1994, Part 1), pp. 495-510.
843
of the public should also weigh heavily in this
decision. In this regard, opinion surveys indicate
that the American public generally is satisfied with
the present currency system and may not initially
welcome replacing the $1 note. There is evidence
in the experience of other countries including Canada, however, that over time a $1 coin would come
to be recognized as more convenient, cleaner, and
more efficient than the $1 note.
If designed properly, a $1 coin may well be able
to evoke confidence in the currency system and be
a source of national pride to the same extent that
the $1 note does now. Market testing, such as with
focus groups, can help to achieve this result.
If this committee decides to move forward with
$1 coin legislation, you should be aware that S.874
would not, in our view, provide enough preparation
time for those most involved—the Nation's banking and retail establishments, the Treasury Bureaus
of the Mint and of Engraving and Printing, and the
Federal Reserve Banks. We have two concerns.
First, any legislation should, in our view, give
the mint adequate time in which to be certain that
the coin design will meet the needs of users well
into the next century. This change has both physical and aesthetic design implications and presumably would require considerable market testing.
Closely related is the need for adequate time in
which to produce a large stock of new $1 coins
once the design is approved. In our view, any
legislation should give the Treasury Department a
good deal of freedom to set the mint's production
schedule so as to optimize costs and resource usage
at the mint, the Bureau of Engraving and Printing,
where the effect on bank note production will be
substantial; at the Federal Reserve Banks, which
will need to adjust considerably their capacity for
processing notes and coins as well as draw down
their inventories of $1 notes; and at commercial
banks and retail establishments. Eighteen months,
as S.874 provides, would not be enough time for
this planning and production. The Board believes
that any legislation should provide at least thirtysix months.
Our second concern is with the requirement in
S.874 that the Federal Reserve discontinue ordering and paying out $1 Federal Reserve notes immediately upon introduction of the $1 coin. The length
of time in which the Federal Reserve must pay out
both coins and notes would be a function not only
844
Federal Reserve Bulletin • September 1995
of the mint's production capacity but also of other
variables, such as the substitution rate of $1 coins
for $1 notes and the public's demand for $2 notes,
that could not be predicted accurately in advance.
The Board believes that any legislation should give
the Federal Reserve freedom to adjust the timetable
for discontinuing the issuance of $1 notes within a
period of two years after introduction of the new
$1 coin.
Moreover, beginning in 1996, the Treasury and
the Federal Reserve will begin a multiyear introduction of new designs for Federal Reserve notes
that will be completed (with the introduction of a
newly designed $5 note) in about 1999. It would be
preferable that these important changes not occur
contemporaneously with the introduction of a
$1 coin.
A reasonable approach may be for the Congress
to explore thoroughly the implications—for the
federal budget, for the convenience and needs of
the public, and for the public's feelings toward the
currency—of replacing the $1 note with a coin. If
the Congress judges that the balance of considerations weighs in favor of replacing the note, it
should adopt legislation as promptly as possible
that would establish dates in the future for introducing the new $1 coin, say in about three years, and
for no longer issuing $1 notes, say within two years
after that. In that way, both the public and private
sectors would have a sound basis for beginning
immediately to plan for the change.
•
Statement by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before
the Subcommittee on Domestic and International
Monetary Policy, Committee on Banking and
Financial Services, U.S. House of Representatives,
July 19, 1995
Reflecting market pressures, prices of raw materials and intermediate goods had already risen considerably, and a surge in the prices of a variety of
imported goods could be expected to follow the
weakening in the dollar through early 1995.
Monetary policy tightenings over the previous
year had been designed to foster the type of moderation in final demand that would help damp inflation pressures going forward and sustain the economic expansion. When we began the policytightening process, we knew the previous drags on
the economy stemming from balance sheet stresses
and restraints on lending were largely behind us.
But that still did not make it a simple matter to
gauge just what degree of firming in reserve market
conditions would be necessary to produce a financial environment consistent with sustainable economic growth. In the event, the federal funds rate
was raised to 6 percent, as the surprising strength in
the economy and associated pressures on resources
required a degree of monetary policy restraint to
ensure that inflation would be contained.
Fortunately, we started the tightening process
early enough and advanced it far enough that
monetary restraint began to bite before some potential problems could assume major proportions.
With inadequate monetary restraint, aggregate
demand could have significantly overshot the
economy's long-run supply potential and created
serious inflationary instabilities. Moreover, the per-
I am pleased to appear today to present the Federal
Reserve's semiannual report on monetary policy.
In February, when I was last here for this purpose,
I reported that the U.S. economy had turned in a
remarkable performance in 1994. Growth had been
quite rapid, reaching a torrid pace by the final
quarter of the year, when real gross domestic product rose at a 5 percent annual rate and final sales
increased at a 53/4 percent rate. Inflation had
remained subdued through year-end, although productive resources were stretched: The unemployment rate had fallen to its lowest level in years,
while manufacturing capacity utilization had been
pushed up to a historically high level.
As I indicated in February, a slowing of economic growth to a more sustainable pace, with
resource use settling in around its long-run potential, was required to avoid inflationary instabilities
and the adverse consequences for economic activity that would invariably follow. After having
posted three straight years of consumer price
increases of less than 3 percent for the first time in
decades, inflation seemed poised to move upward.
Statements to the Congress
ceived capacity constraints and lengthening delivery times that come with an overheated economy
could have fostered the development of more serious inventory overaccumulation. In such circumstances, the longer the moderation in output growth
is delayed, the larger will be the inventory overhang and the more severe will be the subsequent
production correction. As hoped, final sales slowed
appreciably in the first quarter of this year, but
inventory investment did not match that slowing, and overall inventory-sales ratios increased
slightly. Although the aggregate level of inventories remained modest, a few major industries,
such as motor vehicles and home goods, found
themselves with substantial excesses. Attempts to
control inventory levels triggered cutbacks in
orders and output that inevitably put a damper on
employment and income.
How the ongoing pattern of inventory investment unfolds is a crucial element in the near-term
outlook for the economy. Production adjustments
could fairly quickly shut off unintended inventory
accumulation without a prolonged period of slack
output—one that could adversely affect personal
incomes and business profitability, which, in turn,
could undermine confidence and depress spending
plans. Under these conditions, final sales should
continue to grow through and beyond the inventory
correction, leading to sustained moderate economic
expansion. But a less favorable scenario certainly
cannot be ruled out. The inventory adjustment
could be extended and severe enough to drive
down incomes, disrupt final demand, and set in
motion a period of weak growth or even a recession.
Useful insights into how an inventory correction
is proceeding can often be gained by evaluating
developments in industries that supply producers of
final durable products with key primary inputs—
such as steel, aluminum, and capital equipment
components and parts. This is because inventory
adjustments are often larger in durable goods and
they become magnified at progressively earlier
stages in the production process. Typically, when
purchasing managers for firms producing durable
goods find their inventories at excessive levels,
they reduce orders for materials and also for components of capital goods, and as a consequence
suppliers shorten promised delivery times and cut
back on production. In the current instance, domestic orders for steel and aluminum and for some
845
capital equipment components have weakened but
not enough to have had more than modest effects
on production. Prices of key inputs also suggest
that demand so far is holding up and the inventory
correction is contained. The price of steel scrap, for
example, has not fallen, and spot prices of nonferrous metals on average have stabilized recently
after considerable weakness in the first part of the
year. Though still lethargic, the behavior of markets for durable goods materials and supplies
scarcely evidences the type of broader inventory
liquidation that has usually been at the forefront of
the major inventory recessions of the past.
At the finished goods level, we experienced
significant inventory liquidation in both cars and
trucks in May and June. We do not have comprehensive, up-to-date inventory evaluations for
recent months as yet, but inferring what we can
from scattered and partial data, the prospects seem
reasonably good for a reduction in inventory
investment that moves us a considerable way
toward eliminating unwanted stocks.
That process and the longer-run outlook for the
economy depend ultimately on the behavior of final
sales. In that regard, the slowing of the growth of
final sales that began in the first quarter seems to
have continued a little further in the second quarter.
Combining final sales and the likely reduced
second-quarter pace of inventory investment, the
level of overall domestic production of final goods
and services, or real GDP, evidently changed little
last quarter.
Going forward, the most probable of the several
credible outlooks is for an upturn in the growth rate
of final sales and real GDP over the rest of this year
and a moderate pace of expansion next year with
the economy operating in the neighborhood of its
potential. One area of improvement should be our
external sector. A significant downside risk when
I testified in February related to the situation in
Mexico. The economic contraction in that country
and the depreciation of the peso did act to depress
our net exports in the first half of the year. But with
the external adjustment of the Mexican economy
apparently near completion, this drag should be
largely behind us. Moreover, our trade with the rest
of the world should begin to impart a positive
impetus to our economic activity, partly because of
the strong competitive position of U.S. goods in
world markets.
846
Federal Reserve Bulletin • September 1995
Regarding domestic final demand, financial
developments so far this year should provide
important support over coming quarters. Interest
rates, especially on intermediate- and long-term
instruments, have fallen a great deal since last fall,
in reaction to the improved fiscal outlook, the
effects on inflation expectations of our earlier
monetary tightening, and, of course, recently, the
slowed economy. Lower interest rates have helped
to buoy stock prices, which have soared ever
higher. The positive implications of the rally in
financial markets for household debt-service
burdens and wealth and for the cost of capital to
businesses augur well for spending on consumer
durables, on housing, and on plant and equipment.
These influences should be reinforced by the generally strong financial condition and the willingness
to lend of depository institutions, as well as the
receptiveness of capital markets to offerings of
debt and equity.
Early signs of a little firming in consumer
durables spending are already visible in the stabilization of the motor vehicles sector. Residential
construction has also started to revive, judging by
the recent data on home sales and mortgage applications. Unfilled orders are sizable in the capital
goods area, suggesting business investment in
equipment will continue growing, albeit perhaps
more slowly than in the recent past. Finally, rising permits suggest expansion in nonresidential
construction.
An outlook embodying a resumption of moderate economic growth is conveyed by the central
tendencies of the expectations of the Federal
Reserve governors and Reserve Bank presidents
for real GDR After the second-quarter pause, a
projected pickup in activity in the second half
would put output growth over the four quarters of
the year in the neighborhood of Wi to 2 percent.
For next year, projections of real GDP growth
center on 2Vi percent.
The inflation picture is less worrisome than when
I testified six months ago, just after our last policy
tightening. Demands on productive resources
should press less heavily on available capacity in
the future than we envisioned in February. This
prospect is evident in the central tendency of the
expectations of the governors and presidents for
the unemployment rate in the fourth quarter of this
year, which has been revised up from about
5Vi percent in February to 53A percent to 6Vs percent. This outlook for unemployment has been
extended through next year as well. Increases in
employment costs to date have been modest, and
labor compensation evinces few signs of exacerbating inflation pressures, although the recent unusually favorable behavior of benefit costs is unlikely
to continue. Declines in industrial output over
recent months have already eased factory utilization rates closer to their long-term averages.
Reflecting a slowing in foreign industrial economies as well as in the United States, the earlier
surge in prices of materials and supplies has
tapered off. Moreover, the stability of the exchange
value of the dollar in recent months bodes well for
an abatement of the recent faster increase in import
prices.
Against this background, most governors and
presidents see lower inflation over coming quarters
than that experienced in earlier months of 1995.
The central tendency for this year's four-quarter
rise in the consumer price index (CPI) is 3V& to
33/s percent. And for next year, the central tendency
suggests that CPI inflation will be shaved to 27/s to
3V4 percent.
The success of our previous policy tightenings in
damping prospective inflation pressures set the
stage for our recent modest policy easing. Because
the risks of inflation apparently have receded, the
previous degree of restriction in policy no longer
seemed needed, and we were able at the last meeting of the Federal Open Market Committee
(FOMC) to reduce the federal funds rate lA percentage point, to around 53A percent.
Indeed, inflation pressures were damped somewhat more quickly than we might have expected.
This experience underlines the uncertainties and
risks in any forecasting exercise. The projections of
the governors and presidents are for a rather benign
outlook, as are the views of many private sector
forecasters. But these expectations cannot convey
the risks and subtleties in the developing economic
situation.
A month or so ago, I noted publicly that a
moderation in growth was both inevitable and
desirable but that the process could not reasonably
be expected to be entirely smooth and that accordingly the risks of a near-term inventory-led recession, though small, had increased. More recent
evidence suggests that we may have passed the
Statements to the Congress
point of maximum risk. But we have certainly not
yet reached the point at which no risk of undue
economic weakness remains. We do not as yet fully
understand all the reasons for the degree of slowing
in economic activity in the first half of the year, so
we need to be somewhat tentative in our projections of a rebound. Imbalances seem to be limited;
financial conditions should be supportive of spending; and businesses and consumers are largely
optimistic about the future. Nonetheless, questions
remain about the strength of demand for goods and
services, not only in the United States but abroad as
well.
Upside risks to the forecast can also be readily
identified, particularly if the inventory correction is
masking a much stronger underlying economy than
that which appears from other evidence to be the
case. If so, spending could strengthen appreciably,
especially in light of the very substantial increases
in financial market values so far this year.
In a transition period to sustainable growth such
as this, reactions to unexpected events may be
especially pronounced. This is not a time for the
Federal Reserve to relax its surveillance of, and
efforts to analyze, the evolving situation. The Federal Reserve must do its best to understand developing economic trends. Although we cannot expect
to eliminate cyclical booms and busts—human
nature being what it is—we should nonetheless try
where possible to reduce their amplitude.
Some observers have viewed prospective yearby-year budget-deficit reduction as constituting an
important downside risk to the economy. I do not
share this concern. In response to fiscal consolidation, financial markets provide an important shock
absorber for the economy. Declines in long-term
rates help stimulate private, interest-sensitive
spending when government spending and transfers
are reduced. Clearly, the Federal Reserve will have
to watch this process carefully and take the likely
effects of fiscal policy into account in considering
the appropriate stance in monetary policy. But there
is no doubt, in my judgment, that the net result of
moving to budget balance will be a more efficient,
more productive U.S. economy.
With regard to the money and debt ranges chosen by the FOMC for this year, the specifications
for M2 and domestic nonfinancial debt were left
unchanged, at 1 percent to 5 percent and 3 percent
to 7 percent respectively. The FOMC also made a
847
purely technical upward revision to the M3 range.
Last February's Humphrey-Hawkins testimony
and report had noted the potential need for such a
revision to this year's M3 range. Starting in 1989,
the restructuring of thrift institutions and the difficulties facing commercial banks depressed their
lending and their need for managed liabilities. The
FOMC responded by reducing the upper and lower
bounds of the range for M3 to below those of the
M2 range. This year, M3 growth has begun to
significantly outpace that of M2, as it did for several decades before 1989. Overall credit flows have
picked up some, and a higher proportion has gone
through depositories. As a consequence, while M2
and debt remain within their respective annual
ranges, M3 has appreciably overshot the upper end
of its range. The 2 percentage point increase in the
upper and lower bounds of the M3 range, to 2 percent to 6 percent, was made in recognition of the
evident return this year to a more normal pattern of
M3 growth. The ranges specified for M2, M3, and
debt this year also were provisionally carried over
to 1996. The Committee stressed that uncertainties
about evolving relationships of these variables to
income continued to impair their usefulness in
policy.
In summary, the economic outlook, on balance,
is encouraging, despite the inevitable risks. The
U.S. economy rests on a solid foundation of entrepreneurial initiative and competitive markets. With
the cyclical expansion more than likely to persist in
the period ahead, the circumstances are particularly
opportune for pressing forward with plans to institute further significant deficit reduction. By raising
the share of national saving available to the private
sector, such actions should foster declines in real
interest rates and spur capital accumulation. Higher
levels of capital investment, in turn, will raise the
growth in productivity and living standards well
into the next century.
The Federal Reserve believes that the main contribution it can make to enhancing the long-run
health of the U.S. economy is to promote price
stability over time. Our short-run policy adjustments, although necessarily undertaken against the
background of the current condition of the U.S.
economy, must be consistent with moving toward
the long-run goal of price stability. Our recent
policy action to reduce the federal funds rate
25 basis points was made in this context. As I
848
Federal Reserve Bulletin • September 1995
noted in my February testimony, easing would be
appropriate if underlying forces were clearly pointing toward reduced inflation pressures in the future.
Considerable progress toward price stability has
occurred across successive business cycles in the
last fifteen years. We at the Federal Reserve are
committed to further progress in this direction.
•
849
Announcements
FEDERAL OPEN MARKET
ACTION
COMMITTEE
Chairman Alan Greenspan announced on July 6,
1995, that the Federal Open Market Committee had
decided to decrease slightly the degree of pressure
on bank reserve positions.
As a result of the monetary tightening initiated
in early 1994, inflationary pressures had receded
enough to accommodate a modest adjustment in
monetary conditions.
The action would be reflected in a decline of 25
basis points in the federal funds rate from about
6 percent to about 53A percent.
SAFETY AND SOUNDNESS STANDARDS FOR
STATE MEMBER BANKS: FINAL GUIDELINES
AND A FINAL RULE
The Federal Reserve Board on July 7, 1995, issued
final guidelines and a final rule regarding safety
and soundness standards for state member banks
as required by section 132 of the Federal
Deposit Insurance Corporation Improvement Act.
The final rule and guidelines were effective
August 9, 1995.
The final guidelines and final rule reflect amendments pursuant to the Reigle Community Development and Regulatory Improvement Act of 1994
(Community Development Act), which authorized
the agencies to prescribe safety and soundness standards by regulation or guideline and eliminated
holding companies from the scope of section 132.
The agencies sought comment on methods to
meet the requirements of section 132 through
an advance notice of proposed rulemaking in
July 1992 and a notice of proposed rulemaking in
November 1993. The final guidelines take into
account public comments and set forth broad,
principle-based standards that establish the objectives that proper operations and management
should achieve, while leaving the methods for
achieving those objectives to each institution. The
final rule establishes deadlines for submission and
review of safety and soundness compliance plans
that the agencies may require for insured depositories that fail to meet the guidelines.
The Federal Reserve also issued proposed guidelines for safety and soundness standards relating
to asset quality and earnings. As amended by the
Community Development Act, section 132 no
longer requires the agencies to prescribe quantitative standards in these areas but rather requires the
agencies to prescribe standards they deem appropriate. The agencies are therefore proposing asset
quality and earnings standards, in the form of
guidelines, that emphasize monitoring, reporting,
and preventive or corrective action. Comments on
the proposed asset quality and earnings guidelines
were requested by August 24, 1995.
The Board initially approved the final rule, final
guidelines, and proposed guidelines on February 2,
1995. Publication of the joint guidelines, rule,
and proposal was delayed to reach interagency
agreement.
RISK-BASED CAPITAL
FINAL RULE
STANDARDS:
The Federal Reserve Board issued on August 2,
1995, a final rule revising risk-based capital standards to implement section 305 of the Federal
Deposit Insurance Corporation Improvement Act
regarding interest rate risk (IRR). The revision
states that the Board will consider "a bank's exposure to declines in the economic value of its capital
due to changes in interest rates" in determining the
institution's capital needs. The final rule was effective September 1, 1995.
The Board also requested public comment on a
proposed interagency policy statement regarding
the measurement and assessment of IRR. The
850
Federal Reserve Bulletin • September 1995
proposed policy statement describes a measurement framework that comprises exemption screens,
a supervisory model, and use of a bank's own
internal model. Comments were requested by
October 2, 1995.
CAPITAL ADEQUACY GUIDELINES:
INTERIM FINAL RULE
The Federal Reserve Board, along with the other
banking agencies, is amending the capital adequacy
guidelines for banks, bank holding companies, and
savings associations (banking organizations) to
treat originated mortgage servicing rights (OMSRs)
the same as purchased mortgage servicing rights
(PMSRs) for regulatory capital purposes. The agencies are issuing an interim final rule effective
August 1, 1995, and requesting comment on this
rule by October 2, 1995.
The interim final capital rules were developed in
response to the Financial Accounting Standards
Board's issuance of Statement No. 122, "Accounting for Mortgage Servicing Rights," which eliminates the accounting distinction between OMSRs
and PMSRs by requiring OMSRs to be capitalized
as balance sheet assets, a treatment previously
required only for PMSRs.
Under the interim rule, both OMSRs and PMSRs
are "included in" (not deducted from) regulatory
capital when determining tier 1 (core) capital for
purposes of the agencies' risk-based and leverage
capital standards and, when calculating tangible
equity for purposes of prompt corrective action, are
subject to the regulatory capital limitations that
previously applied only to PMSRs. Thus, the effect
of the interim rule is to permit OMSRs in regulatory capital, subject to certain limitations.
PROPOSED
ACTIONS
The Federal Reserve Board on July 14, 1995,
requested comment on a proposal to amend its
risk-based capital requirements to incorporate a
measure for market risk in foreign exchange and
commodity activities and in the trading of debt and
equity instruments. Comments were requested by
September 18, 1995.
The Board is also requesting comment on a
possible approach to setting capital requirements
for market risk, which, if feasible, might form the
basis for future enhancements to supervisory procedures. Comments were requested by November 1,
1995.
EDUCATIONAL PROGRAMS
ON THE HOMEBUYING PROCESS
The Federal Reserve Board announced on July 25,
1995, that it will sponsor two hour-long educational programs on the homebuying process to be
broadcast nationwide via satellite on October 14
and October 21.
These live telecasts, designed for first-time buyers and households with limited resources, will
originate from the LeCroy Center for Educational
Telecommunications of the Dallas County Community College District beginning at 1:00 p.m. EST.
Both community college and U.S. Department of
Agriculture (USDA) extension service facilities
will serve as downlink sites for these programs.
The Federal Reserve Board is joined in this
outreach effort by the National Foundation for Consumer Credit and the USDA Cooperative State
Research Education and Extension Service.
The goal of these nationwide distance learning
programs is to assist first-time buyers and limitedresource households with some of the complicated
steps in the homebuying process. To accomplish
this objective, the two programs will focus on
financial preparedness, the various terms and types
of mortgages, the application process, and closing
or settlement. Participants will be encouraged to
ask questions of the industry experts during each
hour-long program by telephone and facsimile.
The Federal Reserve and its program partners
encourage financial institutions, civic and community leaders, and religious groups involved in
homebuyer education to take advantage of these
teleseminars. Recognizing that many of these organizations may already sponsor homebuying seminars, these live broadcasts are intended to bring
communities together. The opportunity is to allow
someone else to present the basic homebuying
information so that individualized attention can be
focused on the needs of the participants at the
downlink sites.
Announcements
Financial institutions, civic and community leaders, religious groups, and other parties interested in
learning more about the teleseminars may call their
local Consumer Credit Counseling Service, USDA
Extension Service, or the Federal Reserve Board.
At the Federal Reserve, the program coordinator is
Marci Schneider (202-872-7550).
After the live telecasts, the program will be publicly available in videotape. Single or bulk copies
of each of the two hour-long programs may be
purchased from VIDICOPY, 650 Vaqueros Avenue,
Sunnyvale, CA 94086, at the following rates:
1-30 copies @ $12.95, including shipping
31-99 copies @ $11.45, including shipping.
For additional information on pricing and how to
order copies of the videotapes, contact VIDICOPY
at 1-800-708-7080.
PUBLIC MEETINGS REGARDING THE
APPLICATION OF FLEET FINANCIAL GROUP
TO ACQUIRE SHAWMUT NATIONAL CORP.
The Federal Reserve Board announced on July 27,
1995, that public meetings would be held in
Boston, Hartford, and Albany, beginning on
August 26, in connection with the application of
Fleet Financial Group, Inc., to acquire Shawmut
National Corporation.
The purpose of these meetings was to collect
information concerning the effect of this proposal
on the convenience and needs of the communities
to be served, including the records of performance
of the institutions under the Community Reinvestment Act.
The specific dates, times, and locations of the
meetings were the following:
Boston—Saturday, August 26, beginning at
9:00 a.m., EDT, at the Federal Reserve Bank of
Boston, 600 Atlantic Avenue, Boston, MA 02106.
Hartford—Monday, August 28, beginning at
12:00 noon, EDT, at the Wild Auditorium, Gray
Conference Center, University of Hartford, 200
Bloomfield Avenue, West Hartford, CT 06117.
Albany—Tuesday, August 29, beginning at
12:00 noon, EDT, at the New York State Museum,
Museum Theater, West Gallery, Cultural Education
851
Center, Empire State Plaza, Madison Avenue,
Albany, NY 12230.
The Federal Reserve Board also announced on
July 27 that it would extend the comment period
on these applications through September 12, 1995.
This extension of the comment period permitted
interested parties approximately sixty days in
which to submit comments on the applications.
PUBLICATION OF THE REVISED LISTS OF
OTC STOCKS AND OF FOREIGN STOCKS
SUBJECT TO MARGIN REGULATIONS
The Federal Reserve Board on July 31, 1995, published a revised list of over-the-counter stocks that
are subject to its margin regulations (OTC list).
Also published was a revised list of foreign equity
securities (foreign list) that meet the margin criteria
in Regulation T (Credit by Brokers and Dealers).
These lists are published for the information of
lenders and the general public.
The lists became effective August 14, 1995, and
supersede the previous lists that were effective
May 8, 1995. The next revision of the lists is
scheduled to be effective November 1995.
The changes that were made to the revised OTC
list, which now contains 4,159 OTC stocks, are as
follows:
• One hundred ninety-five stocks have been
included for the first time, 166 under National
Market System (NMS) designation.
• Fifty-six stocks previously on the list have
been removed for substantially failing to meet the
requirements for continued listing.
• Sixty-eight stocks have been removed for
reasons such as listing on a national securities
exchange or involvement in an acquisition.
The OTC list is composed of OTC stocks that
have been determined by the Board to be subject to
margin requirements in Regulations G (Securities
Credit by Persons other than Banks, Brokers, or
Dealers), T, and U (Credit by Banks for Purchasing
or Carrying Margin Stocks). It includes OTC stocks
qualifying under Board criteria and also includes
all OTC stocks designated as NMS securities.
Additional NMS securities may be added in the
852
Federal Reserve Bulletin • September 1995
interim between quarterly Board publications; these
securities are immediately marginable upon designation as NMS securities.
The foreign list specifies those foreign equity
securities that are eligible for margin treatment at
broker-dealers. There were no additions to nor
deletions from the foreign list; it now contains 701
foreign equity securities.
SUMMARY TABLES OF 1994 H M D A DATA
N o w AVAILABLE IN THE
FEDERAL RESERVE BULLETIN
The Home Mortgage Disclosure Act of 1975
(HMDA) requires most depository institutions and
mortgage companies with offices in metropolitan
areas to report the geographic location of the prop-
erties related to home purchase, home refinancing,
and home improvement loans they originate or buy.
The reporting institutions also disclose information
about the disposition of home loan applications and
on the race or national origin, sex, and annual
income of applicants. The type of purchaser of a
loan must also be reported if the loan was sold the
same year in which it was originated or acquired.
A summary of the 1994 HMDA data is provided
in a series of tables in the Financial and Business
Statistics section of this issue of the Bulletin (see
pages A68-A75). Statistical tables similar to these
covering prior years' HMDA information have
appeared in Bulletin articles describing the HMDA
data since 1990. Summary tables similar to those in
this issue will appear each year in the Financial and
Business Statistics section of the September issue
of the Bulletin.
•
853
Minutes of the
Federal Open Market Committee Meeting
Held on May 23,1995
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, M a y 23, 1995, at 9:00 a.m.
Mr. Simpson, Associate Director, Division of
Research and Statistics, Board of Governors
Ms. Low, Open Market Secretariat Assistant,
Division of Monetary Affairs, Board of
Governors
Present:
Mr. Greenspan, Chairman
Mr. McDonough, Vice Chairman
Mr. Blinder
Mr. Hoenig
Mr. Kelley
Mr. Lindsey
Mr. Melzer
Ms. Minehan
Mr. Moskow
Ms. Phillips
Ms. Yellen
Messrs. Beebe, Goodfriend, Lang, and Rosenblum
and Mses. Tschinkel and White, Senior Vice
Presidents, Federal Reserve Banks of
San Francisco, Richmond, Philadelphia,
Dallas, Atlanta, and New York respectively
Mr. McNees, Vice President, Federal Reserve Bank
of Boston
Mr. Altig, Assistant Vice President, Federal
Reserve Bank of Cleveland
Mr. Weber, Senior Research Officer, Federal
Reserve Bank of Minneapolis
Messrs. Boehne, Jordan, McTeer, and Stern,
Alternate Members of the Federal Open
Market Committee
Messrs. Broaddus, Forrestal, and Parry, Presidents
of the Federal Reserve Banks of Richmond,
Atlanta, and San Francisco respectively
Mr. Kohn, Secretary and Economist
Mr. Bernard, Deputy Secretary
Mr. Coyne, Assistant Secretary
Mr. Gillum, Assistant Secretary
Mr. Mattingly, General Counsel
Mr. Baxter, Deputy General Counsel
Mr. Prell, Economist
Mr. Truman, Economist
Messrs. Davis, Dewald, Hunter, Mishkin, Promisel,
Siegman, Slifman, and Stockton, Associate
Economists
Mr. Fisher, Manager, System Open Market Account
Mr. Ettin, Deputy Director, Division of Research
and Statistics, Board of Governors
Mr. Madigan, Associate Director, Division of
Monetary Affairs, Board of Governors
Secretary's Note. Advice had been received that
Ernest T. Patrikis had been elected by the board of
directors of the Federal Reserve Bank of New York as an
alternate member of the Federal Open Market Committee for the period June 1, 1995, through December 31,
1995, and that he had executed his oath of office.
PROGRAM FOR
SAFEGUARDING
FOMC
INFORMATION
At this meeting the C o m m i t t e e a m e n d e d its
" P r o g r a m f o r Security of F O M C Information."
The changes included an increase in the n u m b e r of
staff at the Federal Reserve B a n k s w h o could b e
given access to confidential Class I and Class II
F O M C information. T h e Committee also liberalized its rule relating to attendance at F O M C meetings to allow first vice presidents of the Federal
Reserve Banks to attend meetings on a rotating
basis. Other changes of a technical or updating
nature also were m a d e to the program. The C o m mittee's brief discussion of this organizational matter was not recorded in keeping with the decision
854
Federal Reserve Bulletin • September 1995
made at the meeting on January 31-February 1,
1995, normally not to record discussions unrelated
to monetary policy.
By unanimous vote, the minutes of the meeting
of the Federal Open Market Committee held on
March 28, 1995, were approved.
The Manager of the System Open Market
Account reported on developments in foreign
exchange markets and on System foreign currency
transactions during the period March 28, 1995,
through May 22, 1995. By unanimous vote, the
Committee ratified these transactions.
The Manager also reported on developments in
domestic financial markets and on System open
market transactions in government securities and
federal agency obligations during the period
March 28, 1995, through May 22, 1995. By
unanimous vote, the Committee ratified these
transactions.
The Manager requested a temporary increase of
$2 billion, to $10 billion, in the limit on intermeeting changes in outright System Account holdings
of U.S. government and federal agency securities.
He advised the Committee that the current leeway
of $8 billion might not be sufficient to accommodate the potentially large need for additional
reserves over the intermeeting period to meet an
anticipated seasonal rise in the domestic demand
for currency as well as continued currency outflows
to foreign countries. By unanimous vote, the Committee amended paragraph 1(a) of the Authorization for Domestic Open Market Operations to raise
the limit to $10 billion for the intermeeting period
ending with the close of business on July 5,
1995.
The Committee then turned to a discussion of the
economic and financial 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 expansion of economic activity
had slowed considerably further and that rates of
resource utilization had declined. Although business investment in equipment and structures had
remained strong, overall final sales had expanded
less rapidly and inventories had continued to build.
Manufacturing output appeared to be down appreciably, in large measure reflecting cutbacks in
motor vehicle production, and the slump in housing
starts since the turn of the year was depressing
construction activity. Broad indexes of consumer
and producer prices had increased a little faster
thus far this year, while advances in labor compensation costs had remained subdued.
Nonfarm payroll employment posted reduced
gains in the first quarter and changed little in April;
special factors and seasonal adjustment difficulties
may have depressed reported job growth in April.
Hiring in service-producing industries was down
sharply from the pace in previous months, with
jobs in personnel supply services falling for a second consecutive month after three years of rapid
growth. Employment in manufacturing decreased
further, and the number of construction jobs contracted after a sizable weather-related surge in
March. Initial claims for unemployment insurance
increased considerably in recent weeks, and the
civilian unemployment rate rose to 5.8 percent in
April.
Industrial production fell further in April, with
manufacturing registering a substantial decline. The
drop in industrial output largely reflected a cutback
in the production of motor vehicles and parts, but
declines in output also were evident in other cyclically sensitive sectors, such as non-auto consumer
durables and construction supplies. Production of
business equipment other than motor vehicles registered a small gain. Total utilization of industrial
capacity continued to decline in April; however,
operating rates in manufacturing remained at relatively high levels.
Retail sales were down in April after having
risen moderately over the first quarter; a steep drop
in sales of motor vehicles accounted for all of the
April decline. Total expenditures on other types of
goods edged higher in April, even though sales
of apparel, furniture, and home appliances were
noticeably weaker. Housing starts changed little in
April after having declined sharply in the first
quarter, and the inventory of new homes for sale
remained relatively large. On the other hand, sales
of both new and existing homes rose moderately
in March after sizable declines in February, and
recent surveys indicated some improvement in attitudes toward homebuying.
Minutes of the Federal Open Market Committee
Shipments of nondefense capital goods remained
on a strong uptrend in March, with outlays for
office and computing equipment registering another
sharp increase. Manufacturers of heavy trucks continued to operate at capacity to meet demand; by
contrast, business expenditures for motor vehicles
reportedly plunged in April. Data on orders for
nondefense capital goods pointed to further strong
expansion of spending on business equipment in
the months ahead, although gains appeared likely
to be smaller than those of the past several quarters.
Nonresidential construction continued to rise in
March, and data on permits for new construction
suggested that building activity would advance further in coming months, though perhaps at a somewhat slower rate.
Business inventories surged again in March, and
the pace of inventory accumulation over the first
quarter was substantially higher than the average
rate for the second half of 1994. Much of the
first-quarter increase in stocks reflected a buildup
in inventories of motor vehicles at the wholesale
and retail levels. Non-auto stocks also increased at
a brisk pace in the first quarter, accompanied by the
emergence of scattered signs of inventory imbalances in furniture, appliances, and apparel at the
retail level and in construction supplies at earlier
stages of production and distribution. The stockto-sales ratio in manufacturing was unchanged in
March from the very low fourth-quarter level. At
the wholesale level, the ratio of inventories to sales
rose in March but remained within the range of the
past several years. Inventory accumulation in the
retail sector slowed in March despite a further rise
in inventories of motor vehicles. For the retail
sector as a whole, the inventory-to-sales ratio
increased in March to the top end of its range of the
past two years; when the motor vehicle components
of stocks and sales are excluded, however, the ratio
was near the middle of its range in recent years.
The nominal deficit on U.S. trade in goods and
services was little changed in March from the February level and remained substantially narrower
than in January. On a quarterly average basis, the
trade deficit widened in the first quarter as growth
in the value of exports slowed while the expansion
in the value of imports continued unabated. A drop
in shipments to Mexico was among the factors
holding down export growth in March. Data available for the first quarter indicated that economic
855
recovery continued in the major foreign industrial
countries as a group but that the pace varied significantly across countries. There were signs of sustained growth in the United Kingdom, slower
growth in Canada, renewed recovery in Japan, and
weakness in France and Italy.
Inflation had picked up somewhat in the early
months of 1995. At the consumer level, prices rose
a little more rapidly in the first quarter, despite
unchanged food prices and lower energy prices.
In April, a surge in food prices and a rebound in
energy prices contributed to a further step-up in
consumer inflation. At the producer level, prices of
finished goods followed a roughly similar pattern,
increasing at a slightly faster pace in the first quarter and then more briskly in April. The April rise
partly reflected a sharp jump in the prices of finished energy goods, but prices of non-energy, nonfood items also advanced at a somewhat faster rate.
At earlier stages of production, prices of intermediate materials continued to increase rapidly in April.
By contrast, trends in labor compensation costs
remained subdued. Gains in hourly compensation
of private industry workers slowed further in the
first quarter of 1995, with a continuing moderation
in the cost of benefits accounting for all of the
deceleration in compensation.
At its meeting on March 28, 1995, the Committee adopted a directive that called for maintaining
the existing degree of pressure on reserve positions
but that included a bias toward the possible firming
of reserve conditions during the intermeeting
period. Accordingly, the directive stated 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, somewhat
greater reserve restraint would be acceptable or
slightly lesser reserve restraint might be acceptable
during the intermeeting period. The reserve
conditions associated with this directive were
expected to be consistent with moderate growth in
the broader monetary aggregates over coming
months.
Open market operations during the intermeeting
period were directed toward maintaining the existing degree of pressure on reserve positions. Adjustment plus seasonal borrowing trended higher over
the period, reflecting a rising need for seasonal
credit at the beginning of the planting season, while
856
Federal Reserve Bulletin • September 1995
the federal funds rate continued to average close to
6 percent.
Most market interest rates moved lower over the
intermeeting period in reaction to weaker-thanexpected incoming economic data, which market
participants interpreted as signaling a considerable
slowing of the economic expansion and a growing
likelihood that the next monetary policy move
would be in an easing direction. Market assessments that the prospects for major reductions in
budget deficits were improving also seemed to
contribute to the drop in rates. In this environment,
the release of data indicating large increases in
consumer and producer prices for April only
temporarily interrupted the decline in rates.
Intermediate- and long-term interest rates posted
the largest declines over the intermeeting period.
In foreign exchange markets, the trade-weighted
value of the dollar in terms of the other G-10
currencies declined substantially further over the
first half of the intermeeting period. In mid-April,
the dollar reached a record low against the Japanese yen and approached a record low against the
German mark. The dollar's weakness appeared to
have been related in part to further indications of
softening economic activity and related declines in
interest rates in the United States and to increasing
trade tensions with Japan. Late in the period, the
dollar reversed its course and moved up sharply
against the yen and the mark; monetary easing
abroad, improving prospects for reductions in the
U.S. budget deficit, and stabilizing financial conditions in Mexico appeared to contribute to the
turnaround. The dollar ended the intermeeting
period higher on balance against the other G-10
currencies.
The growth of M2 picked up further in April,
reflecting in part the need for additional liquid
balances to make unusually heavy final tax payments; these payments resulted from the stronger
economy in 1994 and from new tax regulations
allowing individuals to delay a larger portion of
their tax payments until April. The expansion of
M2 also appeared to be boosted by the increased
relative attractiveness of small time deposits and
money market funds following declines in market
interest rates. For the year through April, M2 grew
at a rate in the lower half of its range for 1995
while M3 expanded at a rate somewhat above its
range. The persisting strength of M3 in April
largely reflected the needs of commercial banks to
fund continuing heavy credit demands by households and businesses. Total domestic nonfinancial
debt had grown at a rate a little above the midpoint
of its monitoring range in recent months.
The staff forecast prepared for this meeting suggested that growth of economic activity was slowing somewhat more than previously anticipated,
with the recent plunge in motor vehicle sales
prompting a deeper-than-expected reduction in the
production of cars and light trucks. Economic
expansion would average less than the rate of
increase in the economy's potential output for a
number of months, but the favorable wealth and
interest-cost effects of the extended rally that had
occurred in stock and bond markets were expected
to provide underlying support for aggregate
demand later in the year and in 1996. The forecast
continued to anticipate that consumer spending
would be restrained by smaller gains in real
incomes and the satisfaction of pent-up demands
for motor vehicles and other durable goods. Business outlays for new equipment were expected to
decelerate substantially in response to the slower
growth of sales and profits. Homebuilding was
projected to pick up somewhat in lagged response
to the recent decline in mortgage rates. Developments in Mexico might depress U.S. exports further, but mainly in the very near term given the size
of the adjustments already evident in the Mexican
current account. With this influence waning, sustained growth in the economies of other U.S. trading partners was expected to boost export demand.
Considerable uncertainty continued to surround the
fiscal outlook, but the forecast maintained the
greater degree of fiscal restraint that had been
assumed since early in the year. In the staff's
judgment, the prospects for some easing of pressures on resources suggested that price inflation
would likely moderate from its recently higher
level.
In the Committee's discussion of current and
prospective economic conditions,
members
reported on statistical and anecdotal indications of
further slowing in the expansion of economic activity and some related easing of pressures on labor
and other producer resources. A number commented that they anticipated a relatively sluggish
economic performance over coming months as production was cut back to bring inventories into
Minutes of the Federal Open Market Committee
better balance with sales. However, underlying
demand was likely to remain sufficiently robust,
especially in light of developments in financial
markets, to avert a cumulative decline in business
activity and, indeed, to return economic growth to
a pace broadly in line with potential. Members
cited in particular the strength in business fixed
investment and the potential for improvement in
housing activity and the trade balance as factors
that should help to sustain the expansion. Nonetheless, the longer-run outlook remained subject to
considerable uncertainty, especially given the
undecided course of fiscal policy and the ongoing
inventory correction; the ultimate extent of that
correction and its effects on overall economic performance were subject to a cyclical dynamic whose
outcome could not be predicted with confidence. A
worsening in key measures of inflation, including
the consumer price index and the producer price
index for finished goods, was a disappointing—if
not unexpected—development. A number of members expressed concern that the risks were still
tilted in the direction of some further step-up in
inflation; however, others were more inclined to the
view that inflation was not likely to rise much
further in a climate of moderate growth in demand,
intense competitive pressures in many markets, and
relatively subdued increases in labor costs.
Members commented that a reduction in the rate
of inventory investment was likely to be the dominant influence on the near-term performance of the
economy. Some also saw a risk that a significantly
greater-than-expected softening in inventory accumulation might have adverse, and possibly cumulative, effects of a longer-term nature on production
and incomes and thus on consumer and business
spending. With the exception of the motor vehicle
industry, however, current inventory levels generally were quite low in relation to sales and potential
inventory adjustments were likely to be limited in
size. Once further inventory adjustments were completed, the rate of accumulation could be expected
to remain well below the unsustainable pace experienced over the past year and perhaps settle into a
pattern where changes in inventories became a
relatively neutral factor in the ongoing economic
expansion.
In their comments about broad factors underlying the economic outlook, members reported that
current business and consumer sentiment remained
857
generally favorable across the nation. Despite the
softening demand in some markets or industries,
notably that for motor vehicles, business contacts
continued to express optimism about the outlook
for their firms, though some of their comments
were tempered by greater caution than had been
observed earlier. A number of members referred to
the general financial climate as an important element in the outlook for sustained economic expansion. They noted that the decline in interest rates
had favorable implications for demand in interestsensitive sectors of the economy. The rise in equity
prices also was contributing to reductions in the
cost of capital to businesses, and banks continued
to ease terms and standards on loans. In addition,
the rise in stock and bond prices had increased the
net worth of many households, though some concern was expressed about the sustainability of the
stock market's strong performance.
With regard to developments in key sectors of
the economy, the slowdown in the growth of consumer spending was somewhat more pronounced
than anticipated earlier. Some rebound in consumer
demand seemed likely and already appeared to be
occurring in the motor vehicle industry in May.
Underlying conditions for further growth in
consumer spending were viewed as relatively
favorable; these conditions included strengthened
balance sheets stemming from developments in
financial markets, continued growth of incomes,
and aggressive extensions of consumer credit by a
number of lenders. In at least one view, however,
consumer credit had been growing at a pace that
could not be sustained, and the inevitable correction could coincide with and exacerbate emerging
weakness in consumer demand. On balance, growth
in personal consumption expenditures was seen as
likely to continue over coming quarters but at a
reduced pace given the apparent satisfaction of a
large portion of earlier pent-up demands for consumer durables and some expected moderation in
the growth of jobs and incomes.
Business investment remained on a strong
uptrend as numerous firms continued to respond to
the need to relieve pressures on existing capacity
and to increase operating efficiencies in the face of
vigorous competition. Rapid growth in profits and
a ready availability of financing also were cited
as factors tending to support business investment
spending. The increase in such spending was likely
858
Federal Reserve Bulletin • September 1995
to moderate over the projection horizon, though to
a still brisk pace, as declining growth in demand
and easing pressures on capacity induced growing
caution in business investment decisions. Indeed,
the growth in expenditures for producer durable
equipment already appeared to be moderating from
an extremely rapid pace, though nonresidential
construction was reported to be posting solid gains
in several parts of the country.
Members also expected some strengthening
in residential construction following the large
declines in mortgage interest rates that had
occurred since late 1994. Housing construction had
trended lower since the start of the year, but several
indicators pointed to a revival. The latter included
surveys showing improving homebuyer attitudes
and builder assessments of the outlook for new
home sales, and rising applications to purchase
homes. Sizable inventories of unsold new homes
would probably continue to damp construction
activity for some months, but contacts in the real
estate and mortgage finance industries were more
optimistic about the outlook for housing.
The foreign trade sector likewise was expected
to make an appreciable contribution to the expansion of economic activity in coming quarters. The
robust uptrend in U.S. exports during 1994 had
been slowed to a considerable extent thus far this
year by the sharp adjustment in trade with Mexico,
but in the view of several members that adjustment
might now be largely completed. In that event,
gains in exports could be expected to resume at a
fairly brisk pace despite indications of reduced
economic growth in some key foreign countries.
This assessment was supported by anecdotal
reports of rising foreign demand for some U.S.
products in the context of the generally improved
international competitive position of the United
States. Concurrently, growth in imports would tend
to be held down by the projected slowing in the
expansion of domestic demand. On the negative
side, some members referred to the possibility that
a longer period might be needed to resolve the
difficulties being experienced by Mexico, and several expressed particular concern about the potential for relatively severe disruptions to trade if
current negotiations with Japan were not successfully concluded.
Fiscal policy was seen as a major uncertainty in
the economic outlook. Federal purchases of goods
and services were expected to continue trending
lower and the growth of transfer payments was
likely to be trimmed, but the extent and timing of
fiscal restraint could not be determined while federal deficit reduction continued to be debated in the
Congress. In the view of at least some members,
however, a larger fiscal contraction than was commonly expected might well materialize, perhaps
starting later this year. The course of fiscal legislation undoubtedly would continue to affect financial
markets and, in the opinion of some members,
would need to be taken into account in the formulation of monetary policy.
Concerning inflation, several members commented that the rise in consumer prices and some
other broad measures of inflation in recent months
appeared to reflect cyclical developments relating
to the tightening of resource and product markets
over the past year, including the partial passthrough of sizable increases in prices at earlier
stages of production. In addition, higher import
prices might have been playing a role. A number of
members expressed concern that, with the economy already producing at or even slightly above its
sustainable potential, inflation pressures were likely
to intensify if the current pause in the expansion
were to be followed by a period of above-average
growth. On the other hand, members who saw the
odds as pointing to a more moderate rebound after
a period of relatively sluggish economic performance were inclined to the view that an upward
trend in inflation was likely to be averted. In addition, the ongoing competitive pressures in many
markets, the restraint in compensation increases,
and the continuing efforts to cut production costs
would help to contain pressures on prices over
time.
In the Committee's discussion of policy for the
intermeeting period ahead, all the members
endorsed a proposal to maintain the current
stance of policy. The higher interest rates of 1994
clearly had damped demand, but since year-end
intermediate- and long-term market rates had
declined, stock market prices had risen, bank lending terms had continued to ease, and the dollar had
fallen against the currencies of many major industrial countries. On balance, it appeared that the
current configuration of financial market conditions
and degree of monetary restraint was likely to be
consistent with moderate expansion in nominal
Minutes of the Federal Open Market Committee
GDP and prices following a period of some weakness in the economy as inventory imbalances were
corrected. The risks of a different outcome, in
either direction, seemed to be reasonably balanced.
In the circumstances, because the dimensions of
the near-term deceleration and the potential
strength of underlying demand remained uncertain,
the members concluded that it was desirable to
monitor developments carefully and wait for additional information before deciding on the next policy move.
With regard to the possible need to adjust policy
during the intermeeting period, all the members
were in favor of shifting to an unbiased instruction
that did not incorporate any presumption with
regard to the direction of potential intermeeting
changes. The members agreed that no compelling
case could be made at this point for potential
adjustments to policy in either direction during
the period ahead, and retaining a bias in the
directive would give a misleading indication
of the Committee's current intentions for the
period. One member expressed the view that the
costs of being wrong currently seemed higher in
the direction of accommodating too much inflation,
though signs of a possible cumulative deterioration
in economic activity could not be ignored should
they materialize. Another member, who saw the
longer-term risks to the economy as tilted to the
downside of current projections, indicated that
while the recent performance of the economy might
argue for some easing of monetary policy, a steady
policy course without any bias in the intermeeting
instruction was appropriate for now in light of the
generally accommodative financial and banking
markets.
At the conclusion of the Committee's discussion,
all the members supported a directive that called
for maintaining the existing degree of pressure on
reserve positions and that did not include a presumption about the likely direction of any adjustments to policy 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
somewhat greater or somewhat lesser reserve
restraint would be acceptable during the intermeeting period. The reserve conditions contemplated at
859
this meeting were expected to be consistent with
moderate growth in M2 and M3 over the months
ahead.
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 expansion of economic activity has slowed considerably further. In April, nonfarm payroll employment
was about unchanged after posting reduced gains in the
first quarter, and the civilian unemployment rate rose to
5.8 percent. Industrial production fell in April, largely
reflecting a cutback in the production of motor vehicles,
and capacity utilization rates declined somewhat.
Reflecting markedly weaker demand for motor vehicles,
total retail sales were down in April after rising moderately over the first quarter. Housing starts were
unchanged in April after declining sharply in the first
quarter. Orders for nondefense capital goods point to
further strong expansion of spending on business equipment; nonresidential construction has continued to trend
appreciably higher. The nominal deficit on U.S. trade in
goods and services widened in the first quarter from its
average rate in the fourth quarter. Broad indexes of
consumer and producer prices have increased faster on
average thus far this year, while advances in labor compensation costs have remained subdued.
Intermediate- and long-term interest rates have
declined considerably further since the Committee meeting on March 28, while short-term rates have registered
small decreases. In foreign exchange markets, the tradeweighted value of the dollar in terms of the other G-10
currencies, after falling to low levels, rose on balance
over the intermeeting period.
M2 and M3 strengthened in March and April. For the
year through April, M2 expanded at a rate in the lower
half of its range for 1995 and M3 grew at a rate somewhat above its range. Total domestic nonfinancial debt
has grown at a rate a bit above the midpoint of its
monitoring range in recent months.
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 on
January 31-February 1 established ranges for growth of
M2 and M3 of 1 to 5 percent and 0 to 4 percent
respectively, measured from the fourth quarter of 1994
to the fourth quarter of 1995. The Committee anticipated
that money growth within these ranges would be consistent with its broad policy objectives. The monitoring
range for growth of total domestic nonfinancial debt was
lowered to 3 to 7 percent for the year. The behavior of
the monetary aggregates will continue to be evaluated
in the light of progress toward price level stability,
860
Federal Reserve Bulletin • September 1995
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, somewhat greater reserve restraint or
somewhat lesser reserve restraint would be acceptable in
the intermeeting period. The contemplated reserve conditions are expected to be consistent with moderate
growth in M2 and M3 over coming months.
Votes for this action: Messrs. Greenspan, McDonough, Blinder, Hoenig, Kelley, Lindsey, Melzer,
Ms. Minehan, Mr. Moskow, Mses. Phillips and Yellen.
Votes against this action: None.
It w a s agreed that the next meeting of the C o m mittee w o u l d b e held o n W e d n e s d a y - T h u r s d a y ,
July 5 - 6 , 1995.
T h e m e e t i n g a d j o u r n e d at 12:15 p . m .
D o n a l d L. K o h n
Secretary
861
Legal Developments
FINAL RULE—STANDARDS FOR SAFETY AND
SOUNDNESS
As required by section 132 of the Federal Deposit
Insurance Corporation Improvement Act of 1991
("FDICIA"), the Office of the Comptroller of the Currency ("OCC"), the Board of Governors of the Federal
Reserve System ("Board of Governors"), the Federal
Deposit Insurance Corporation ("FDIC"), and the Office
of Thrift Supervision ("OTS") (collectively, the agencies) have adopted a final rule establishing deadlines for
submission and review of safety and soundness compliance plans. The agencies may require compliance plans
to be filed by an insured depository institution for failure
to meet the safety and soundness standards prescribed by
guideline pursuant to section 39 of the Federal Deposit
Insurance Act (FDI Act). In conjunction with this final
rule, the agencies have adopted Interagency Guidelines
Establishing Standards for Safety and Soundness (Guidelines). The Guidelines will appear as an appendix to each
of the agencies' final rule. The agencies view the final
rule and Guidelines as a realistic balance between the
objectives of section 132 of FDICIA and avoiding overly
burdensome regulation.
Effective August 9, 1995, 12C.F.R. Parts 30, 208,
263, 303, 308, 364, and 570 are amended as follows:
Section 30.1—Scope.
The rules and procedures set forth in this part apply to
national banks and federal branches of foreign banks,
that are subject to the provisions of section 39 of the
Federal Deposit Insurance Act ("FDI Act") (section 39)
(12 U.S.C. 183lp-1).
Section 30.2—Purpose.
Section 39 of the FDI Act, 12 U.S.C. 1831p-l, requires
the Office of the Comptroller of the Currency ("OCC")
to establish safety and soundness standards. Pursuant to
section 39, a bank may be required to submit a compliance plan if it is not in compliance with a safety and
soundness standard prescribed by guideline under section 39(a) or (b). An enforceable order under section 8 of
the FDI Act, 12 U.S.C. 1818(b), may be issued if, after
being notified that it is in violation of a safety and
soundness standard prescribed under section 39, the bank
fails to submit an acceptable compliance plan or fails in
any material respect to implement an accepted plan. This
part establishes procedures for requiring submission of a
compliance plan and issuing an enforceable order pursuant to section 39. The Interagency Guidelines Establishing Standards for Safety and Soundness are set forth in
Appendix A to this part.
1. A new part 30 is added to read as follows:
Part 30—Safety and Soundness Standards
Section 30.1—Scope.
Section 30.2—Purpose.
Section 30.3—Determination and notification of failure
to meet safety and soundness standard and request for
compliance plan.
Section 30.4—Filing of safety and soundness compliance plan.
Section 30.5—Issuance of orders to correct deficiencies
and to take or refrain from taking other actions.
Section 30.6—Enforcement of orders.
Authority: 12U.S.C. 1831p-l.
Section 30.3—Determination and notification of
failure to meet safety and soundness standard and
request for compliance plan.
(a) Determination. The OCC may, based upon an examination, inspection, or any other information that becomes available to the OCC, determine that a bank has
failed to satisfy the safety and soundness standards contained in the Interagency Guidelines Establishing Standards for Safety and Soundness set forth in Appendix A
to this part.
(b) Request for compliance plan. If the OCC determines
that a bank has failed a safety and soundness standard
pursuant to paragraph (a) of this section, the OCC may
request, by letter or through a report of examination, the
submission of a compliance plan and the bank shall be
deemed to have notice of the deficiency three days after
862
Federal Reserve Bulletin • September 1995
mailing of the letter by the OCC or delivery of the report
of examination.
Section 30.4—Filing of safety and soundness
compliance plan.
(a) Schedule for filing compliance plan—
(1) In general. A bank shall file a written safety and
soundness compliance plan with the OCC within 30
days of receiving a request for a compliance plan
pursuant to section 30.3(b) unless the OCC notifies
the bank in writing that the plan is to be filed within a
different period.
(2) Other plans. If a bank is obligated to file, or is
currently operating under, a capital restoration plan
submitted pursuant to section 38 of the FDI Act
(12U.S.C. 183 lo), a cease-and-desist order entered
into pursuant to section 8 of the FDI Act (12U.S.C.
1818(b)), a formal or informal agreement, or a response to a report of examination or report of inspection, it may, with the permission of the OCC, submit a
compliance plan under this section as part of that plan,
order, agreement, or response, subject to the deadline
provided in paragraph (a) of this section.
(b) Contents of plan. The compliance plan shall include
a description of the steps the bank will take to correct the
deficiency and the time within which those steps will be
taken.
(c) Review of safety and soundness compliance plans.
Within 30 days after receiving a safety and soundness
compliance plan under this part, the OCC shall provide
written notice to the bank of whether the plan has been
approved or seek additional information from the bank
regarding the plan. The OCC may extend the time within
which notice regarding approval of a plan will be provided.
(d) Failure to submit or implement a compliance plan—
(1) Supervisory actions. If a bank fails to submit an
acceptable plan within the time specified by the OCC
or fails in any material respect to implement a compliance plan, then the OCC shall, by order, require the
bank to correct the deficiency and may take further
actions provided in section 39(e)(2)(B). Pursuant to
section 39(e)(3), the OCC may be required to take
certain actions if the bank commenced operations or
experienced a change in control within the previous
24-month period, or the bank experienced extraordinary growth during the previous 18-month period.
(2) Extraordinary growth. For purposes of paragraph
(d)(1) of this section, extraordinary growth means an
increase in assets of more than 7.5 percent during any
quarter within the 18-month period preceding the issuance of a request for submission of a compliance plan,
by a bank that is not well capitalized for purposes of
section 38 of the FDI Act. For purposes of calculating
an increase in assets, assets acquired through merger
or acquisition approved pursuant to the Bank Merger
Act (12 U.S.C. 1828(c)) will be excluded,
(e) Amendment of compliance plan. A bank that has filed
an approved compliance plan may, after prior written
notice to and approval by the OCC, amend the plan to
reflect a change in circumstance. Until such time as a
proposed amendment has been approved, the bank shall
implement the compliance plan as previously approved.
Section 30.5—Issuance of orders to correct
deficiencies and to take or refrain from taking
other actions.
(a) Notice of intent to issue order—
(1) In general. The OCC shall provide a bank prior
written notice of the OCC's intention to issue an order
requiring the bank to correct a safety and soundness
deficiency or to take or refrain from taking other
actions pursuant to section 39 of the FDI Act. The
bank shall have such time to respond to a proposed
order as provided by the OCC under paragraph (c) of
this section.
(2) Immediate issuance of final order. If the OCC
finds it necessary in order to carry out the purposes of
section 39 of the FDI Act, the OCC may, without
providing the notice prescribed in paragraph (a)(1) of
this section, issue an order requiring a bank immediately to take actions to correct a safety and soundness
deficiency or take or refrain from taking other actions
pursuant to section 39. A bank that is subject to such
an immediately effective order may submit a written
appeal of the order to the OCC. Such an appeal must
be received by the OCC within 14 calendar days of
the issuance of the order, unless the OCC permits a
longer period. The OCC shall consider any such appeal, if filed in a timely matter, within 60 days of
receiving the appeal. During such period of review,
the order shall remain in effect unless the OCC, in its
sole discretion, stays the effectiveness of the order.
(b) Content of notice. A notice of intent to issue an order
shall include:
(1) A statement of the safety and soundness deficiency
or deficiencies that have been identified at the bank;
(2) A description of any restrictions, prohibitions, or
affirmative actions that the OCC proposes to impose
or require;
(3) The proposed date when such restrictions or prohibitions would be effective or the proposed date for
completion of any required action; and
(4) The date by which the bank subject to the order
may file with the OCC a written response to the
notice.
Legal Developments
(c) Response to notice—
(1) Time for response. A bank may file a written
response to a notice of intent to issue an order within
the time period set by the OCC. Such a response must
be received by the OCC within 14 calendar days from
the date of the notice unless the OCC determines that
a different period is appropriate in light of the safety
and soundness of the bank or other relevant circumstances.
(2) Content of response. The response should include:
(i) An explanation why the action proposed by the
OCC is not an appropriate exercise of discretion
under section 39;
(ii) Any recommended modification of the proposed order; and
(iii) Any other relevant information, mitigating circumstances, documentation, or other evidence in
support of the position of the bank regarding the
proposed order.
(d) Agency consideration of response. After considering
the response, the OCC may:
(1) Issue the order as proposed or in modified form;
(2) Determine not to issue the order and so notify the
bank; or
(3) Seek additional information or clarification of the
response from the bank, or any other relevant source.
(e) Failure to file response. Failure by a bank to file with
the OCC, within the specified time period, a written
response to a proposed order shall constitute a waiver of
the opportunity to respond and shall constitute consent
to the issuance of the order.
(f) Request for modification or rescission of order. Any
bank that is subject to an order under this part may, upon
a change in circumstances, request in writing that the
OCC reconsider the terms of the order, and may propose
that the order be rescinded or modified. Unless otherwise
ordered by the OCC, the order shall continue in place
while such request is pending before the OCC.
Section 3 0 . 6 — E n f o r c e m e n t of orders.
(a) Judicial remedies. Whenever a bank fails to comply
with an order issued under section 39, the OCC may
seek enforcement of the order in the appropriate United
States district court pursuant to section 8(i)(l) of the FDI
Act.
(b) Failure to comply with order. Pursuant to section 8(i)(2)(A) of the FDI Act, the OCC may assess a
civil money penalty against any bank that violates or
otherwise fails to comply with any final order issued
under section 39 and against any institution-affiliated
party who participates in such violation or noncompliance.
(c) Other enforcement action. In addition to the actions
described in paragraphs (a) and (b) of this section, the
863
OCC may seek enforcement of the provisions of section
39 or this part through any other judicial or administrative proceeding authorized by law.
2. A new Appendix A is added to part 30 as set forth at
the end of the common preamble:
A p p e n d i x A to Part 3 0 — I n t e r a g e n c y Guidelines
Establishing Standards f o r Safety and S o u n d n e s s
Part 208—Membership
of State Banking
Institutions in the Federal Reserve
System
(Regulation
H)
1. The authority citation for 12 C.F.R. Part 208 is revised
to read as follows:
Authority: 12U.S.C. 36, 248(a) and (c), 321-338, 461,
481, 486, 601, and 611, 1814, 1823(j), 1831o, 1831p-l,
3906, 3909, 3310, 3331-3351; 15 U.S.C. 78b, 78o4(c)(5), 78q, 78q-l, 78w, 781(b), 781 (i), and 1781(g).
2. A new Subpart D comprising section 208.60 is added
to part 208 to read as follows:
Subpart
D—Standards
for Safety and
Soundness
Section 2 0 8 . 6 0 — S t a n d a r d s f o r safety and
soundness.
The Interagency Guidelines Establishing Standards for
Safety and Soundness prescribed pursuant to section 39
of the Federal Deposit Insurance Act (12 U.S.C.
1831p-l), as set forth as Appendix D to this part apply to
all state member banks.
3. A new Appendix D is added to part 208 as set forth at
the end of the common preamble:
A p p e n d i x D to Part 2 0 8 — I n t e r a g e n c y Guidelines
Establishing Standards f o r Safety and Soundness
Part 263—Rules
of Practice
for
Hearings
1. The authority citation for 12 C.F.R. Part 263 is revised
to read as follows:
Authority: 5 U.S.C. 504; 12 U.S.C. 248, 324, 504, 505,
18170), 1818, 1828(c), 1831o, 1831p-l, 1847(b),
1847(d), 1884(b), 1972(2)(F), 3105, 3107, 3108, 3907,
3909; 15 U.S.C. 21, 78o-4, 78o-5, and 78u-2.
2. A new Subpart I, comprising sections 263.300 through
263.305, is added to part 263 to read as follows:
864
Federal Reserve Bulletin • September 1995
Subpart I—Submission and Review of Safety and
Soundness Compliance Plans and Issuance of
Orders to Correct Safety and Soundness
Deficiencies
Section 263.300—Scope.
Section 263.301—Purpose.
Section 263.302—Determination and notification of failure to meet safety and soundness standard and request
for compliance plan.
Section 263.303—Filing of safety and soundness compliance plan.
Section 263.304—Issuance of orders to correct deficiencies and to take or refrain from taking other actions.
Section 263.305—Enforcement of orders.
Subpart I—Submission and Review of Safety and
Soundness Compliance Plans and Issuance of
Orders to Correct Safety and Soundness
Deficiencies
Section 2 6 3 . 3 0 0 — S c o p e .
The rules and procedures set forth in this subpart apply
to State member banks that are subject to the provisions
of section 39 of the Federal Deposit Insurance Act
("FDI ACT") (section 39) (12 U.S.C. 1831p-l).
Section 2 6 3 . 3 0 1 — P u r p o s e .
Section 39 of the FDI Act requires the Board to establish
safety and soundness standards. Pursuant to section 39, a
bank may be required to submit a compliance plan if it is
not in compliance with a safety and soundness standard
established by guideline under section 39(a) or (b). An
enforceable order under section 8 may be issued if, after
being notified that it is in violation of a safety and
soundness standard established under section 39, the
bank fails to submit an acceptable compliance plan or
fails in any material respect to implement an accepted
plan. This subpart establishes procedures for requiring
submission of a compliance plan and issuing an enforceable order pursuant to section 39.
Section 2 6 3 . 3 0 2 — D e t e r m i n a t i o n and notification
of failure to m e e t safety and soundness standard
and request f o r c o m p l i a n c e plan.
(a) Determination. The Board may, based upon an examination, inspection, or any other information that becomes available to the Board, determine that a bank has
failed to satisfy the safety and soundness standards contained in the Interagency Guidelines Establishing Standards for Safety and Soundness set out in Appendix B to
part 208 of this chapter.
(b) Request for compliance plan. If the Board determines
that a State member bank has failed a safety and soundness standard pursuant to paragraph (a) of this section,
the Board may request, by letter or through a report of
examination, the submission of a compliance plan, and
the bank shall be deemed to have notice of the request
three days after mailing of the letter by the Board or
delivery of the report of examination.
Section 2 6 3 . 3 0 3 — F i l i n g of safety and soundness
c o m p l i a n c e plan.
(a) Schedule for filing compliance plan—
(1) In general. A State member bank shall file a
written safety and soundness compliance plan with the
Board within 30 days of receiving a request for a
compliance plan pursuant to section 263.302(b), unless the Board notifies the bank in writing that the plan
is to be filed within a different period.
(2) Other plans. If a State member bank is obligated
to file, or is currently operating under, a capital restoration plan submitted pursuant to section 38 of the
FDI Act (12 U.S.C. 1831o), a cease-and-desist order
entered into pursuant to section 8 of the FDI Act, a
formal or informal agreement, or a response to a
report of examination or report of inspection, it may,
with the permission of the Board, submit a compliance plan under this section as part of that plan, order,
agreement, or response, subject to the deadline provided in paragraph (a)(1) of this section.
(b) Contents of plan. The compliance plan shall include
a description of the steps the State member bank will
take to correct the deficiency and the time within which
those steps will be taken.
(c) Review of safety and soundness compliance plans.
Within 30 days after receiving a safety and soundness
compliance plan under this subpart, the Board shall
provide written notice to the bank of whether the plan
has been approved or seek additional information from
the bank regarding the plan. The Board may extend the
time within which notice regarding approval of a plan
will be provided.
(d) Failure to submit or implement a compliance plan.
(1) Supervisory actions. If a State member bank fails
to submit an acceptable plan within the time specified
by the Board or fails in any material respect to implement a compliance plan, then the Board shall, by
order, require the bank to correct the deficiency and
may take further actions provided in section
39(e)(2)(B). Pursuant to section 39(e)(3), the Board
may be required to take certain actions if the bank
commenced operations or experienced a change in
control within the previous 24-month period, or the
bank experienced extraordinary growth during the previous 18-month period.
Legal Developments
(2) Extraordinary growth. For purposes of paragraph
(d)(1) of this section, extraordinary growth means an
increase in assets of more than 7.5 percent during any
quarter within the 18-month period preceding the issuance of a request for submission of a compliance plan,
by a bank that is not well capitalized for purposes of
section 38 of the FDI Act. For purposes of calculating
an increase in assets, assets acquired through merger
or acquisition approved pursuant to the Bank Merger
Act (12 U.S.C. 1828(c)) will be excluded,
(e) Amendment of compliance plan. A State member
bank that has filed an approved compliance plan may,
after prior written notice to and approval by the Board,
amend the plan to reflect a change in circumstance. Until
such time as a proposed amendment has been approved,
the bank shall implement the compliance plan as previously approved.
Section 263.304—Issuance of orders to correct
deficiencies and to take or refrain from taking
other actions.
(a) Notice of intent to issue order—
(1) In general. The Board shall provide a bank prior
written notice of the Board's intention to issue an
order requiring the bank to correct a safety and soundness deficiency or to take or refrain from taking other
actions pursuant to section 39 of the FDI Act. The
bank shall have such time to respond to a proposed
order as provided by the Board under paragraph (c) of
this section.
(2) Immediate issuance of final order. If the Board
finds it necessary in order to carry out the purposes of
section 39 of the FDI Act, the Board may, without
providing the notice prescribed in paragraph (a)(1) of
this section, issue an order requiring a bank immediately to take actions to correct a safety and soundness
deficiency or take or refrain from taking other actions
pursuant to section 39. A State member bank that is
subject to such an immediately effective order may
submit a written appeal of the order to the Board.
Such an appeal must be received by the Board within
14 calendar days of the issuance of the order, unless
the Board permits a longer period. The Board shall
consider any such appeal, if filed in a timely matter,
within 60 days of receiving the appeal. During such
period of review, the order shall remain in effect
unless the Board, in its sole discretion, stays the
effectiveness of the order.
(b) Contents of notice. A notice of intent to issue an
order shall include:
(1) A statement of the safety and soundness deficiency
or deficiencies that have been identified at the bank;
865
(2) A description of any restrictions, prohibitions, or
affirmative actions that the Board proposes to impose
or require;
(3) The proposed date when such restrictions or prohibitions would be effective or the proposed date for
completion of any required action; and
(4) The date by which the bank subject to the order
may file with the Board a written response to the
notice.
(c) Response to notice—
(1) Time for response. A bank may file a written
response to a notice of intent to issue an order within
the time period set by the Board. Such a response
must be received by the Board within 14 calendar
days from the date of the notice unless the Board
determines that a different period is appropriate in
light of the safety and soundness of the bank or other
relevant circumstances.
(2) Contents of response. The response should include:
(i) An explanation why the action proposed by the
Board is not an appropriate exercise of discretion
under section 39;
(ii) Any recommended modification of the proposed order; and
(iii) Any other relevant information, mitigating circumstances, documentation, or other evidence in
support of the position of the bank regarding the
proposed order.
(d) Agency consideration of response. After considering
the response, the Board may:
(1) Issue the order as proposed or in modified form;
(2) Determine not to issue the order and so notify the
bank; or
(3) Seek additional information or clarification of the
response from the bank, or any other relevant source.
(e) Failure to file response. Failure by a bank to file with
the Board, within the specified time period, a written
response to a proposed order shall constitute a waiver of
the opportunity to respond and shall constitute consent
to the issuance of the order.
(f) Request for modification or rescission of order. Any
bank that is subject to an order under this subpart may,
upon a change in circumstances, request in writing that
the Board reconsider the terms of the order, and may
propose that the order be rescinded or modified. Unless
otherwise ordered by the Board, the order shall continue
in place while such request is pending before the Board.
Section 263.305—Enforcement of orders.
(a) Judicial remedies. Whenever a State member bank
fails to comply with an order issued under section 39,
the Board may seek enforcement of the order in the
866
Federal Reserve Bulletin • September 1995
appropriate United States district court pursuant to section 8(i)(l) of the FDI Act.
(b) Failure to comply with order. Pursuant to section 8(i)(2)(A) of the FDI Act, the Board may assess a
civil money penalty against any State member bank that
violates or otherwise fails to comply with any final order
issued under section 39 and against any institutionaffiliated party who participates in such violation or
noncompliance.
(c) Other enforcement action. In addition to the actions
described in paragraphs (a) and (b) of this section, the
Board may seek enforcement of the provisions of section 39 or this part through any other judicial or administrative proceeding authorized by law.
Part 303—Applications, Requests, Submittals,
Delegations of Authority, and Notices Required to
be Filed by Statute or Regulation
1. The authority citation for 12 C.F.R. Part 303 is revised
to read as follows:
Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817(j),
1818, 1819(Seventh and Tenth), 1828, 1831e, 1831o,
1831p-l; 15 U.S.C. 1607.
2. In section 303.9, a new paragraph (o) is added to read
as follows:
Section 303.9—Delegation of authority to act on
certain enforcement matters.
(o) Compliance plans under section 39 of the FDI Act
(standards for safety and soundness) and part 308 of this
chapter.
(1) Authority is delegated to the Director, and where
confirmed in writing by the Director, to an associate
director, or to the appropriate regional director or
deputy regional director, to accept, to reject, to require
new or revised compliance plans or to make any other
determinations with respect to the implementation of
compliance plans pursuant to Subpart R of Part 308 of
this chapter.
(2) Authority is delegated to the Director, and where
confirmed in writing by the Director, to an associate
director, to:
(i) Issue notices of intent to issue an order requiring
the bank to correct a safety and soundness deficiency or to take or refrain from taking other actions pursuant to section 39 of the FDI Act
(12 U.S.C. 1831p-l) and in accordance with the
requirements contained in section 308.304(a)(1) of
this chapter;
(ii) Issue an order requiring the bank immediately
to correct a safety and soundness deficiency or to
take or refrain from taking other actions pursuant to
section 39 of the FDI Act (12 U.S.C. 1831p-l) and
in accordance with the requirements contained in
section 308.304(a)(2) of this chapter; and
(iii) Act on requests for modification or rescission
of an order.
(3) The authority delegated under paragraph (o)(l) of
this section shall be exercised only upon the concurrent certification by the Associate General Counsel for
Compliance and Enforcement, or in cases where a
regional director or deputy regional director accepts,
rejects or requires new or revised compliance plans or
makes any other determinations with respect to compliance plans, by the appropriate regional counsel, that
the action taken is not inconsistent with the Act.
(4) The authority delegated under paragraph (o)(2) of
this section shall be exercised only upon the concurrent certification by the Associate General Counsel for
Compliance and Enforcement that the allegations contained in the notice of intent, if proven, constitute a
basis for the issuance of a final order pursuant to
section 39 of the FDI Act or that the issuance of a final
order is not inconsistent with section 39 of the FDI
Act or that the stipulated section 39 order is not
inconsistent with section 39 and is an order which has
become final for purposes of enforcement pursuant to
the FDI Act.
Part 308—Rules of Practice and Procedure
3. The authority citation for Part 308 is revised to read as
follows:
Authority. 5 U.S.C. 504, 554-557; 12 U.S.C. 1815(e),
1817(a) and 1818(j), 1818, 1828(j), 1829, 1831i, 1831o,
1831p-l; 15 U.S.C. 781(h), 78(m), 78n(a), 78n(c),
78n(d), 78n(f), 78(o), 78o-4(c)(5), 78(p), 78(q), 78q-l,
78s.
4. A new Subpart R, comprising sections 308.300
through 308.305, is added to part 308 to read as follows:
Subpart R—Submission and Review of Safety and
Soundness Compliance Plans and Issuance of
Orders to Correct Safety and Soundness
Deficiencies
Section 308.300—Scope.
Section 308.301—Purpose.
Legal Developments
Section 308.302—Determination and notification of failure to meet a safety and soundness standard and
request for compliance plan.
Section 308.303—Filing of safety and soundness compliance plan.
Section 308.304—Issuance of orders to correct deficiencies and to take or refrain from taking other actions.
Section 308.305—Enforcement of orders.
Subpart R—Submission and Review of Safety and
Soundness Compliance Plans and Issuance of
Orders to Correct Safety and Soundness
Deficiencies
Section 308.300—Scope.
The rules and procedures set forth in this subpart apply
to insured state nonmember banks and to state-licensed
insured branches of foreign banks, that are subject to the
provisions of section 39 of the Federal Deposit Insurance Act ("FDI Act") (section 39) (12 U.S.C. 1831p-l).
Section 308.301—Purpose.
Section 39 of the FDI Act requires the FDIC to establish
safety and soundness standards. Pursuant to section 39, a
bank may be required to submit a compliance plan if it is
not in compliance with a safety and soundness standard
established by guideline under section 39(a) or (b). An
enforceable order under section 8 of the FDI Act may be
issued if, after being notified that it is in violation of a
safety and soundness standard established under section 39, the bank fails to submit an acceptable compliance plan or fails in any material respect to implement
an accepted plan. This subpart establishes procedures for
requiring submission of a compliance plan and issuing
an enforceable order pursuant to section 39.
Section 308.302—Determination and notification
of failure to meet a safety and soundness
standard and request for compliance plan.
(a) Determination. The FDIC may, based upon an examination, inspection, or any other information that becomes available to the FDIC, determine that a bank has
failed to satisfy the safety and soundness standards set
out in part 364 of this chapter and in the Interagency
Guidelines Establishing Standards for Safety and Soundness set forth in Appendix A to Part 364 of this chapter.
(b) Request for compliance plan. If the FDIC determines
that a bank has failed a safety and soundness standard
pursuant to paragraph (a) of this section, the FDIC may
request, by letter or through a report of examination, the
submission of a compliance plan and the bank shall be
deemed to have notice of the request three days after
867
mailing of the letter by the FDIC or delivery of the
report of examination.
Section 308.303—Filing of safety and soundness
compliance plan.
(a) Schedule for filing compliance plan—
(1) In general. A bank shall file a written safety and
soundness compliance plan with the FDIC within 30
days of receiving a request for a compliance plan
pursuant to section 308.302(b), unless the FDIC notifies the bank in writing that the plan is to be filed
within a different period.
(2) Other plans. If a bank is obligated to file, or is
currently operating under, a capital restoration plan
submitted pursuant to section 38 of the FDI Act
(12 U.S.C. 1831o), a cease-and-desist order entered
into pursuant to section 8 of the FDI Act, a formal or
informal agreement, or a response to a report of examination or report of inspection, it may, with the permission of the FDIC, submit a compliance plan under this
section as part of that plan, order, agreement, or response, subject to the deadline provided in paragraph
(a)(1) of this section.
(b) Contents of plan. The compliance plan shall include
a description of the steps the bank will take to correct the
deficiency and the time within which those steps will be
taken.
(c) Review of safety and soundness compliance plans.
Within 30 days after receiving a safety and soundness
compliance plan under this subpart, the FDIC shall provide written notice to the bank of whether the plan has
been approved or seek additional information from the
bank regarding the plan. The FDIC may extend the time
within which notice regarding approval of a plan will be
provided.
(d) Failure to submit or implement a compliance plan—
(1) Supervisory actions. If a bank fails to submit an
acceptable plan within the time specified by the FDIC
or fails in any material respect to implement a compliance plan, then the FDIC shall, by order, require the
bank to correct the deficiency and may take further
actions provided in section 39(e)(2)(B). Pursuant to
section 39(e)(3), the FDIC may be required to take
certain actions if the bank commenced operations or
experienced a change in control within the previous
24-month period, or the bank experienced extraordinary growth during the previous 18-month period.
(2) Extraordinary growth. For purposes of paragraph
(d)(1) of this section, extraordinary growth means an
increase in assets of more than 7.5 percent during any
quarter within the 18-month period preceding the issuance of a request for submission of a compliance plan,
by a bank that is not well capitalized for purposes of
section 38 of the FDI Act. For purposes of calculating
868
Federal Reserve Bulletin • September 1995
an increase in assets, assets acquired through merger
or acquisition approved pursuant to the Bank Merger
Act (12 U.S.C. 1828(c)) will be excluded,
(e) Amendment of compliance plan. A bank that has filed
an approved compliance plan may, after prior written
notice to and approval by the FDIC, amend the plan to
reflect a change in circumstance. Until such time as a
proposed amendment has been approved, the bank shall
implement the compliance plan as previously approved.
Section 308.304—Issuance of orders to correct
deficiencies and to take or refrain from taking
other actions.
(a) Notice of intent to issue order—
(1) In general. The FDIC shall provide a bank prior
written notice of the FDIC's intention to issue an
order requiring the bank to correct a safety and soundness deficiency or to take or refrain from taking other
actions pursuant to section 39 of the FDI Act. The
bank shall have such time to respond to a proposed
order as provided by the FDIC under paragraph (c) of
this section.
(2) Immediate issuance of final order. If the FDIC
finds it necessary in order to carry out the purposes of
section 39 of the FDI Act, the FDIC may, without
providing the notice prescribed in paragraph (a)(1) of
this section, issue an order requiring a bank immediately to take actions to correct a safety and soundness
deficiency or take or refrain from taking other actions
pursuant to section 39. A bank that is subject to such
an immediately effective order may submit a written
appeal of the order to the FDIC. Such an appeal must
be received by the FDIC within 14 calendar days of
the issuance of the order, unless the FDIC permits a
longer period. The FDIC shall consider any such
appeal, if filed in a timely matter, within 60 days of
receiving the appeal. During such period of review,
the order shall remain in effect unless the FDIC, in its
sole discretion, stays the effectiveness of the order.
(b) Contents of notice. A notice of intent to issue an
order shall include:
(1) A statement of the safety and soundness deficiency
or deficiencies that have been identified at the bank;
(2) A description of any restrictions, prohibitions, or
affirmative actions that the FDIC proposes to impose
or require;
(3) The proposed date when such restrictions or prohibitions would be effective or the proposed date for
completion of any required action; and
(4) The date by which the bank subject to the order
may file with the FDIC a written response to the
notice.
(c) Response to notice—
(1) Time for response. A bank may file a written
response to a notice of intent to issue an order within
the time period set by the FDIC. Such a response must
be received by the FDIC within 14 calendar days from
the date of the notice unless the FDIC determines that
a different period is appropriate in light of the safety
and soundness of the bank or other relevant circumstances.
(2) Contents of response. The response should include:
(i) An explanation why the action proposed by the
FDIC is not an appropriate exercise of discretion
under section 39;
(ii) Any recommended modification of the proposed order; and
(iii) Any other relevant information, mitigating circumstances, documentation, or other evidence in
support of the position of the bank regarding the
proposed order.
(d) Agency consideration of response. After considering
the response, the FDIC may:
(1) Issue the order as proposed or in modified form;
(2) Determine not to issue the order and so notify the
bank; or
(3) Seek additional information or clarification of the
response from the bank, or any other relevant source.
(e) Failure to file response. Failure by a bank to file with
the FDIC, within the specified time period, a written
response to a proposed order shall constitute a waiver of
the opportunity to respond and shall constitute consent
to the issuance of the order.
(f) Request for modification or rescission of order. Any
bank that is subject to an order under this subpart may,
upon a change in circumstances, request in writing that
the FDIC reconsider the terms of the order, and may
propose that the order be rescinded or modified. Unless
otherwise ordered by the FDIC, the order shall continue
in place while such request is pending before the FDIC.
Section 308.305—Enforcement of orders.
(a) Judicial remedies. Whenever a bank fails to comply
with an order issued under section 39, the FDIC may
seek enforcement of the order in the appropriate United
States district court pursuant to section 8(i)(l) of the FDI
Act.
(b) Failure to comply with order. Pursuant to section 8(i)(2)(A) of the FDI Act, the FDIC may assess a
civil money penalty against any bank that violates or
otherwise fails to comply with any final order issued
under section 39 and against any institution-affiliated
party who participates in such violation or noncompliance.
(c) Other enforcement action. In addition to the actions
described in paragraphs (a) and (b) of this section, the
Legal Developments
FDIC may seek enforcement of the provisions of section 39 or this part through any other judicial or administrative proceeding authorized by law.
869
Section 570.4—Issuance of orders to correct deficiencies
and to take or refrain from taking other actions.
Section 570.5—Enforcement of orders.
5. A new part 364 is added to read as follows:
Authority: 12 U.S.C. 1831p-l.
Part 364—Standards for Safety and Soundness
Section 364.100—Purpose.
Section 570.1—Authority, purpose, scope and
preservation of existing authority.
Section 364.101—Standards for safety and soundness.
Authority: 12 U.S.C. 1819(Tenth), 1831p-l.
Section 364.100—Purpose.
Section 39 of the Federal Deposit Insurance Act requires
the Federal Deposit Insurance Corporation to establish
safety and soundness standards. Pursuant to section 39,
this part establishes safety and soundness standards by
guideline.
Section 364.101—Standards for safety and
soundness.
The Interagency Guidelines Establishing Standards for
Safety and Soundness prescribed pursuant to section 39
of the Federal Deposit Insurance Act (12 U.S.C.
1831p-l), as set forth as Appendix A to this part apply to
all insured state nonmember banks and to state-licensed
insured branches of foreign banks, that are subject to the
provisions of section 39 of the Federal Deposit Insurance Act.
6. A new Appendix A is added to Part 364 as set forth at
the end of the common preamble:
Appendix A to Part 364—Interagency Guidelines
Establishing Standards for Safety and Soundness
1. A new part 570 is added to read as follows:
Part 570—Submission and Review of Safety and
Soundness Compliance Plans and Issuance of
Orders to Correct Safety and Soundness
Deficiencies
Section 570.1—Authority, purpose, scope and preservation of existing authority.
Section 570.2—Determination and notification of failure
to meet safety and soundness standards and request
for compliance plan.
Section 570.3—Filing of safety and soundness compliance plan.
(a) Authority. This part and the Guidelines in Appendix A to this part are issued by the OTS pursuant to
section 39 (section 39) of the Federal Deposit Insurance
Act ("FDI Act") (12 U.S.C. 1831p-l) as added by section 132 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (FDICIA) (Pub. L. 102-242,
105 Stat. 2236 (1991)), and as amended by section 956
of the Housing and Community Development Act of
1992 (Pub. L. 102-550, 106 Stat. 3895 (1992)), and as
amended by section 318 of the Community Development Banking Act of 1994 (Pub. L. 103-325, 108 Stat.
2160 (1994)).
(b) Purpose. Section 39 of the FDI Act requires the OTS
to establish safety and soundness standards. Pursuant to
section 39, a savings association may be required to
submit a compliance plan if it is not in compliance with
a safety and soundness standard established by guideline
under section 39(a) or (b). An enforceable order under
section 8 of the FDI Act may be issued if, after being
notified that it is in violation of a safety and soundness
standard prescribed under section 39, the savings association fails to submit an acceptable compliance plan or
fails in any material respect to implement an accepted
plan. This part establishes procedures for submission
and review of safety and soundness compliance plans
and for issuance and review of orders pursuant to section 39. Interagency Guidelines Establishing Standards
for Safety and Soundness pursuant to section 39 of the
FDI Act are set forth in Appendix A to this part.
(c) Scope. This part and the Interagency Guidelines
Establishing Standards for Safety and Soundness in Appendix A to this part implement the provisions of section 39 of the FDI Act as they apply to savings associations.
(d) Preservation of existing authority. Neither section 39
of the FDI Act nor this part in any way limits the
authority of the OTS under any other provision of law to
take supervisory actions to address unsafe or unsound
practices, violations of law, unsafe or unsound conditions, or other practices. Action under section 39 and this
part may be taken independently of, in conjunction with,
or in addition to any other enforcement action available
to the OTS.
870
Federal Reserve Bulletin • September 1995
Section 570.2—Determination and notification of
failure to meet safety and soundness standards
and request for compliance plan.
(a) Determination of failure to meet safety and soundness standards. The OTS may, based upon an examination, inspection, or any other information that becomes
available to the OTS, determine that a savings association has failed to satisfy the safety and soundness standards contained in the Interagency Guidelines Establishing Standards for Safety and Soundness as set forth in
Appendix A to this part.
(b) Request for compliance plan. If the OTS determines
that a savings association has failed to meet a safety and
soundness standard pursuant to paragraph (a) of this
section, the OTS may request by letter or through a
report of examination, the submission of a compliance
plan. The savings association shall be deemed to have
notice of the request three days after mailing or delivery
of the letter or report of examination by the OTS.
(d) Failure to submit or implement a compliance plan. If
a savings association fails to submit an acceptable plan
within the time specified by the OTS or fails in any
material respect to implement a compliance plan, then
the OTS shall, by order, require the savings association
to correct the deficiency and may take further actions
provided in section 39(e)(2)(B) of the FDI Act. Pursuant
to section 39(e)(3), the OTS may be required to take
certain actions if the savings association commenced
operations or experienced a change in control within the
previous 24-month period, or the savings association
experienced extraordinary growth during the previous
18-month period.
(e) Amendment of compliance plan. A savings association that has filed an approved compliance plan may,
after prior written notice to and approval by the OTS,
amend the plan to reflect a change in circumstance. Until
such time as a proposed amendment has been approved,
the savings association shall implement the compliance
plan as previously approved.
Section 570.3—Filing of safety and soundness
compliance plan.
Section 570.4—Issuance of orders to correct
deficiencies and to take or refrain from taking
other actions.
(a) Schedule for filing compliance plan—
(a) Notice of intent to issue order—
(1) In general. A savings association shall file a written safety and soundness compliance plan with the
OTS within 30 days of receiving a request for a
compliance plan pursuant to section 570.2(b), unless
the OTS notifies the savings association in writing that
the plan is to be filed within a different period.
(2) Other plans. If a savings association is obligated to
file, or is currently operating under, a capital restoration plan submitted pursuant to section 38 of the FDI
Act (12 U.S.C. 1831o), a cease-and-desist order entered into pursuant to section 8 of the FDI Act, a
formal or informal agreement, or a response to a
report of examination, it may, with the permission of
the OTS, submit a compliance plan under this section
as part of that plan, order, agreement, or response,
subject to the deadline provided in paragraph (a)(1) of
this section.
(b) Contents of plan. The compliance plan shall include
a description of the steps the savings association will
take to correct the deficiency and the time within which
those steps will be taken.
(c) Review of safety and soundness compliance plans.
Within 30 days after receiving a safety and soundness
compliance plan under this subpart, the OTS shall provide written notice to the savings association of whether
the plan has been approved or seek additional information from the savings association regarding the plan. The
OTS may extend the time within which notice regarding
approval of a plan will be provided.
(1) In general. The OTS shall provide a savings
association prior written notice of the OTS's intention
to issue an order requiring the savings association to
correct a safety and soundness deficiency or to take or
refrain from taking other actions pursuant to section 39 of the FDI Act. The savings association shall
have such time to respond to a proposed order as
provided by the OTS under paragraph (c) of this
section.
(2) Immediate issuance offinalorder. If the OTS finds
it necessary in order to carry out the purposes of
section 39 of the FDI Act, the OTS may, without
providing the notice prescribed in paragraph (a)(1) of
this section, issue an order requiring a savings association immediately to take actions to correct a safety
and soundness deficiency or to take or refrain from
taking other actions pursuant to section 39. A savings
association that is subject to such an immediately
effective order may submit a written appeal of the
order to the OTS. Such an appeal must be received by
the OTS within 14 calendar days of the issuance of the
order, unless the OTS permits a longer period. The
OTS shall consider any such appeal, if filed in a
timely manner, within 60 days of receiving the appeal.
During such period of review, the order shall remain
in effect unless the OTS, in its sole discretion, stays
the effectiveness of the order.
(b) Contents of notice. A notice of intent to issue an
order shall include:
Legal Developments
(1) A statement of the safety and soundness deficiency
or deficiencies that have been identified at the savings
association;
(2) A description of any restrictions, prohibitions, or
affirmative actions that the OTS proposes to impose or
require;
(3) The proposed date when such restrictions or prohibitions would be effective or the proposed date for
completion of any required action; and
(4) The date by which the savings association subject
to the order may file with the OTS a written response
to the notice.
(c) Response to notice—
(1) Time for response. A savings association may file
a written response to a notice of intent to issue an
order within the time period set by the OTS. Such a
response must be received by the OTS within 14
calendar days from the date of the notice unless the
OTS determines that a different period is appropriate
in light of the safety and soundness of the savings
association or other relevant circumstances.
(2) Contents of response. The response should include:
(i) An explanation why the action proposed by the
OTS is not an appropriate exercise of discretion
under section 39 of the FDI Act;
(ii) Any recommended modification of the proposed order; and
(iii) Any other relevant information, mitigating circumstances, documentation, or other evidence in
support of the position of the savings association
regarding the proposed order.
(d) OTS consideration of response. After considering the
response, the OTS may:
(1) Issue the order as proposed or in modified form;
(2) Determine not to issue the order and so notify the
savings association; or
(3) Seek additional information or clarification of the
response from the savings association, or any other
relevant source.
(e) Failure to file response. Failure by a savings association to file with the OTS, within the specified time
period, a written response to a proposed order shall
constitute a waiver of the opportunity to respond and
shall constitute consent to the issuance of the order.
(f) Request for modification or rescission of order. Any
savings association that is subject to an order under this
subpart may, upon a change in circumstances, request in
writing that the OTS reconsider the terms of the order,
and may propose that the order be rescinded or modified.
Unless otherwise ordered by the OTS, the order shall
continue in place while such request is pending before
the OTS.
871
Section 570.5—Enforcement of orders.
(a) Judicial remedies. Whenever a savings association
fails to comply with an order issued under section 39 of
the FDI Act, the OTS may seek enforcement of the order
in the appropriate United States district court pursuant to
section 8(i)(l) of the FDI Act.
(b) Administrative
remedies.
Pursuant to section
8(i)(2)(A) of the FDI Act, the OTS may assess a civil
money penalty against any savings association that violates or otherwise fails to comply with any final order
issued under section 39 and against any savings
association-affiliated party who participates in such violation or noncompliance.
(c) Other enforcement action. In addition to the actions
described in paragraphs (a) and (b) of this section, the
OTS may seek enforcement of the provisions of section
39 of the FDI Act or this part through any other judicial
or administrative proceeding authorized by law.
2. A new Appendix A is added to Part 570 as set forth at
the end of the common preamble:
Appendix A to Part 570—Interagency Guidelines
Establishing Standards for Safety and Soundness
FINAL RULE—STANDARD FLOOD HAZARD
DETERMINATION FORM
The Office of the Comptroller of the Currency ("OCC"),
the Board of Governors of the Federal Reserve System
("Board"), the Federal Deposit Insurance Corporation
("FDIC"), the Office of Thrift Supervision ("OTS"),
and the National Credit Union Administration
("NCUA") (collectively, "the Federal entities for lending regulation" or "the agencies"), are amending their
regulations concerning loans in areas having special
flood hazards to require depository institutions to use the
Standard Flood Hazard Determination Form (the standard form) in determining whether real property offered
as collateral for a loan is located in a special flood hazard
area. The Farm Credit Administration ("FCA") is adopting this same requirement in new regulations. The standard form has been developed by the Federal Emergency
Management Agency ("FEMA") in consultation with
the Federal entities for lending regulation and other
agencies.
Effective January 2, 1996, 12 C.F.R. Parts 22, 208,
339, 563, 614, and 760 are amended as follows:
872
Federal Reserve Bulletin • September 1995
Part 22—Loans
Hazards
in Areas Having Special
Flood
1. The authority citation for Part 22 is revised to read as
follows:
collateral security for a loan is located in an area
identified by the Director of the FEMA as having
special flood hazards and in which flood insurance has
been made available under the National Rood Insurance Act of 1968. The standard flood hazard determination form may be used in a printed, computerized,
or electronic manner.
Authority: 42 U.S.C. 4012a, 4104a, 4104b, 4106, and
4128.
2. A new section 22.6 is added to read as follows:
Part 339—Loans
Hazards
in Areas Having
Special
Flood
Section 2 2 . 6 — R e q u i r e d use of Standard F l o o d
H a z a r d Determination F o r m .
A bank shall use the standard flood hazard determination
form developed by the Director of the FEMA (as set
forth in Appendix A of 44 C.F.R. Part 65) when determining whether improved real estate or a mobile home
offered as collateral security for a loan is located in an
area identified by the Director of the FEMA as having
special flood hazards and in which flood insurance has
been made available under the National Flood Insurance
Act of 1968 (12 U.S.C. 4001 et seq.). The standard flood
hazard determination form may be used in a printed,
computerized, or electronic manner.
Part 208—Membership
of State Banking
Institutions in the Federal Reserve
System
(Regulation
H)
1. The authority citation for Part 208 is revised to read as
follows:
Authority: 12 U.S.C. 36, 248(a), 248(c), 321-338a, 37Id,
461, 481-486, 601, 611, 1814, 1823(j), 1828(o), 1831o,
1831p-l, 3105, 3310, 3331-3351, and 3906-3909;
15 U.S.C. 78b, 781(b), 781(g), 781(j), 78o-4(c)(5), 78q,
78q-l, and 78w; 31 U.S.C. 5318; 42 U.S.C. 4012a,
4104a, 4104b, 4106, and 4128.
2. Section 208.8 is amended by the addition of a new
paragraph (e)(4) to read as follows:
Section 2 0 8 . 8 — B a n k i n g practices.
(4) Required use of Standard Flood Hazard Determination Form. A state member bank shall use the
standard flood hazard determination form developed
by the Director of the FEMA (as set forth in Appendix
A of 44 C.F.R. Part 65) when determining whether
improved real estate or a mobile home offered as
1. The authority citation for Part 339 is revised to read as
follows:
Authority: 42 U.S.C. 4012a, 4104a, 4104b, 4106, and
4128.
2. Section 339.7 is added to read as follows:
Section 3 3 9 . 7 — R e q u i r e d u s e of Standard F l o o d
Hazard Determination Form.
A bank shall use the standard flood hazard determination
form developed by the Director of the FEMA (as set
forth in Appendix A of 44 C.F.R. Part 65) when determining whether improved real estate or a mobile home
offered as collateral security for a loan (as that term is
defined in section 339.2(b)) is located in an area identified by the Director of the FEMA as having special flood
hazards and in which flood insurance has been made
available under the National Flood Insurance Act of
1968. The standard flood hazard determination form
may be used in a printed, computerized, or electronic
manner.
Part
563—Operations
1. The authority citation for Part 563 is revised to read as
follows:
Authority: 12 U.S.C. 375b, 1462, 1462a, 1463, 1464,
1467a, 1468, 1817, 1828, 3806, 42 U.S.C. 4012a, 4104a,
4104b, 4106, 4128.
2. Section 563.48 is amended by the addition of a new
paragraph (f) to read as follows:
Section 5 6 3 . 4 8 — F l o o d disaster protection.
Legal Developments
(f) Required use of Standard Flood Hazard Determination Form. A savings association shall use the standard
flood hazard determination form developed by the Director of the FEMA (as set forth in Appendix A of
44 C.F.R. Part 65) when determining whether improved
real estate or a mobile home offered as collateral security
for a loan is located in an area identified by the Director
of the FEMA as having special flood hazards and in
which flood insurance has been made available under the
National Flood Insurance Act of 1968. The standard
flood hazard determination form may be used in a
printed, computerized, or electronic manner.
Part 614—Loan
Policies
and
Operations
1. The authority citation for Part 614 is revised to read as
follows:
873
flood hazard determination form may be used in a
printed, computerized, or electronic manner.
Part
760—Flood
Insurance
1. The authority citation for Part 760 is revised to read as
follows:
Authority: 12 U.S.C. 1757, 1789; 42 U.S.C. 4012a,
4104a, 4104b, 4106, and 4128.
2. Section 760.12 is added to read as follows:
S e c t i o n 7 6 0 . 1 2 — R e q u i r e d u s e of S t a n d a r d F l o o d
Hazard Determination Form.
Authority: 42 U.S.C. 4012a, 4104a, 4104b, 4106, and
4128: 1.3, 1.5, 1.6, 1.7, 1.9, 1.10, 2.0, 2.2, 2.3, 2.4, 2.10,
2.12, 2.13, 2.15, 3.0, 3.1, 3.3, 3.7, 3.8, 3.10, 3.20, 3.28,
4.12, 4.12A, 4.13, 4.13B, 4.14, 4.14A, 4.14C, 4.14D,
4.14E, 4.18, 4.19, 4.36, 4.37, 5.9, 5.10, 5.17, 7.0, 7.2,
7.6, 7.7, 7.8, 7.12, 7.13, 8.0, 8.5 of the Farm Credit Act
(12 U.S.C. 2011, 2013, 2014, 2015, 2017, 2018, 2071,
2073, 2074, 2075, 2091, 2093, 2094, 2096, 2121, 2122,
2124, 2128, 2129, 2131, 2141, 2149, 2183, 2184, 2199,
2201, 2202, 2202a, 2202c, 2202d, 2202e, 2206, 2207,
2219a, 2219b, 2243, 2244, 2252, 2279a, 2279a-2, 2279b,
2279b-1, 2279b-2, 2279f, 2279f-l, 2279aa, 2279aa-5);
sec. 413 of Pub. L. 100-233, 101 Stat. 1568, 1639.
A credit union shall use the standard flood hazard determination form developed by the Director of the FEMA
(as set forth in Appendix A of 44 C.F.R. Part 65) when
determining whether improved real estate or a mobile
home offered as collateral security for a loan is located in
an area identified by the Director of the FEMA as having
special flood hazards and in which flood insurance has
been made available under the National Flood Insurance
Act of 1968. The standard flood hazard determination
form may be used in a printed, computerized, or electronic manner.
2. Part 614 is amended by adding a new Subpart S to
read as follows:
ORDERS ISSUED UNDER BANK HOLDING COMPANY
ACT
Subpart
Orders Issued Under Section
Holding Company
Act
S—Flood
Insurance
Requirements
3 of the
Bank
S e c t i o n 6 1 4 . 4 9 4 0 — R e q u i r e d u s e of S t a n d a r d
Flood Hazard Determination Form.
Subpart
S—Flood
Insurance
Requirements
S e c t i o n 6 1 4 . 4 9 4 0 — R e q u i r e d u s e of S t a n d a r d
Flood Hazard Determination Form.
An institution of the Farm Credit System shall use the
standard flood hazard determination form developed by
the Director of the FEMA (as set forth in Appendix A of
44 C.F.R. Part 65) when determining whether improved
real estate or a mobile home offered as collateral security
for a loan is located in an area identified by the Director
of the FEMA as having special flood hazards and in
which flood insurance has been made available under the
National Flood Insurance Act of 1968. The standard
H e n d e r s o n B a n c s h a r e s , Inc.
Troy, A l a b a m a
The Charles Henderson Trust
Troy, A l a b a m a
Order Approving Formation of a Bank Holding
Company
Henderson Bancshares, Inc. ("Henderson"), and The
Charles Henderson Trust ("Trust"), a registered bank
holding company, have filed applications under section 3
of the Bank Holding Company Act ("BHC Act")
(12 U.S.C. § 1842) in connection with a corporate reor-
874
Federal Reserve Bulletin • September 1995
ganization of Troy Bank & Trust Company ("Bank"),
all of Troy, Alabama.1
Notice of the applications, affording interested persons
an opportunity to submit comments, has been published
(60 Federal Register 20,095 (1995)). 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 of the BHC Act.
Henderson is a nonoperating corporation formed for
the purpose of acquiring Bank. Bank is the 127th largest
commercial banking organization in Alabama, controlling deposits of approximately $123 million, representing less than 1 percent of total deposits in commercial
banking organizations in the state.2 Based on all the facts
of record, including the fact that this transaction would
constitute a corporate reorganization, the Board believes
that consummation of this proposal would not have a
significantly adverse effect on competition or the concentration of banking resources in any relevant banking
market. Accordingly, the Board concludes that competitive considerations are consistent with approval.
The Board also concludes that the financial and managerial resources and future prospects of Henderson, Trust
and Bank,3 are consistent with approval of this proposal,
as are the convenience and needs and other supervisory
factors that the Board is required to consider under
section 3 of the BHC Act. 4
1. Henderson would be formed as an intermediate holding company through a share exchange with Bank's current shareholders.
Shares not exchanged would be purchased by Bank resulting in
Henderson owning all of Bank's shares. Trust currently owns
51 percent of Bank, and after the reorganization, Trust would own
at least 51 percent of Henderson.
2. Deposit data are as of December 31, 1994.
3. The Board has received comments from the Charles Henderson Memorial Association, Troy, Alabama ("Protestant"), a charitable association established under the will of Charles Henderson
("Will") as the instrumentality responsible for the distribution of
Trust's income in accordance with the provisions of the Will. The
trustee under the Will is responsible for the management of the
Trust. Protestant contends that this proposal could impair income
from Trust by reducing the value of Trust's assets and Trust's
voting majority, adversely affect the financial condition of Bank,
and permit Bank's management to redeem its equity investment in
Bank while retaining control of Bank. The Board has carefully
reviewed these comments in light of all the facts of record, including reports of examination by federal supervisors assessing the
financial and managerial strength of Bank and financial information
and projections provided by Henderson in connection with these
applications. The Board also notes that Protestant has challenged in
an Alabama state circuit court the right of Bank's management,
who vote the shares owned by Trust, to vote in favor of this
proposal. The court approved the trustee's actions and indicated
that this proposal was in the best interest of Trust. Based on these
and other facts of record, the Board does not believe that these
comments warrant denial of this proposal.
4. Protestant also contends that a majority vote by the shareholders of Bank is insufficient to approve this proposal under Alabama
law. The Alabama Superintendent of Banks has reviewed the
Based on the foregoing and all the facts of record, the
Board has determined that the applications should be,
and hereby are, approved.5 The Board's approval is
expressly conditioned on compliance with all the commitments made by Henderson and Trust in connection
with these applications. 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 and decision, and,
as such, may be enforced in proceedings under applicable law.
This transaction shall not be consummated before the
fifteenth 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 Federal Reserve Bank of Atlanta, acting pursuant
to delegated authority.
By order of the Board of Governors, effective
July 24, 1995.
Voting for this action: Chairman Greenspan, and Governors
Kelley, Lindsey, Phillips, and Yellen. Absent and not voting: Vice
Chairman Blinder.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Pilot Bancshares, Inc.
Tampa, Florida
Order Approving Formation of a Bank Holding
Company, Merger of Banks, and Increase of
Investment in Bank Premises
Pilot Bancshares, Inc. ("Pilot"), 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 by acquiring all the voting shares of The
Terrace Bank of Florida, both of Tampa, Florida ("Terrace Bank"), a state member bank. Terrace Bank also
current proposal and concluded that approval of this transaction by
a majority of Bank's shareholders is in accordance with Alabama
law. See Ala. Code §§ 10-2B-11.02, 5-7A-2, 5-2A-8 (1994). See
also Eva Bancshares, Inc., 79 Federal Reserve Bulletin 504 (1993).
5. As noted above, Protestant's claims have been adjudicated by
an Alabama state circuit court. Protestant requests that the Board
delay consideration of the proposal until final disposition of its
request to the Alabama Supreme Court for review of the circuit
court's ruling in favor of the proposal. The BHC Act and the
Board's Rules require the Board to act on applications within
specified time periods, and the Board believes that the present
record is sufficient to act on these applications. Moreover, Alabama
courts have authority to provide Protestant with an appropriate
remedy if its allegations can be sustained. Based on all facts of
record, the Board has concluded that delay or denial of these
applications on this basis is not warranted.
Legal Developments
has applied under section 18(c) of the Federal Deposit
Insurance Act (12 U.S.C. § 1828(c)) ("Bank Merger
Act") to merge with University State Bank, Tampa,
Florida ("University Bank"). 1 Terrace Bank also has
applied to increase its investment in bank premises pursuant to section 24A of the Federal Reserve Act
(12 U.S.C. §37Id).
Notice of the applications, affording interested persons
an opportunity to submit comments, has been given in
accordance with the BHC Act, the Bank Merger Act,
and the Board's Rules of Procedure (12 C.F.R.
262.3(b)). 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, the Bank
Merger Act, and the Federal Reserve Act.
Pilot is a non-operating company formed for the purpose of acquiring Terrace Bank and University Bank.
Terrace Bank, with $41 million in assets,2 is the 161st
largest commercial banking organization in Florida, controlling deposits of $33.3 million, representing less than
1 percent of total deposits in commercial banking organizations in the state.3 University Bank, with assets of
$21 million, is the 188th largest commercial banking
organization in Florida, controlling deposits of
$16.9 million, also representing less than 1 percent of
total deposits in commercial banking organizations in
the state. Upon consummation of this proposal, Terrace
Bank would become the 120th largest commercial banking organization in Florida with $50.2 million in deposits and would continue to control less than 1 percent of
the state's banking deposits.
Terrace Bank and University Bank compete directly in
the Tampa Bay, Florida, banking market.4 Terrace Bank
and University Bank are the 47th and 58th largest depository institutions, respectively, in the market. Upon consummation, Terrace Bank would become the 35th largest
depository institution in the market, controlling total
1. Pilot would acquire Terrace Bank after Terrace Bank acquires
University Bank. To facilitate this acquisition, Terrace Bank would
be acquired by an interim bank holding company, Pilot First.
Terrace Bank and University Bank would merge, and Pilot First
would merge with University Bank's parent holding company,
University State Bank Corporation, with Terrace Bank and Pilot
First as the surviving entities. Pilot would then acquire Terrace
Bank through a newly chartered interim bank, with Terrace Bank as
the survivor, and Pilot First would be dissolved.
2. Asset data are as of March 31, 1995.
3. State and market deposit data are as of December 31, 1994.
4. The Tampa Bay banking market is approximated by Hernando,
Hillsborough, Pasco, and Pinellas Counties in Florida.
875
deposits of approximately $50 million, representing less
than 1 percent of total deposits in depository institutions
in the market.5 After consummation of this proposal,
numerous competitors would remain in the market, the
market would remain moderately concentrated, as measured by the Herfindahl-Hirschman Index ("HHI"), and
would not exceed the threshold standards in the Department of Justice's revised guidelines. 6 Based on all the
facts of record, the Board concludes that consummation
of this proposal is not likely to result in significantly
adverse effects on competition or the concentration of
banking resources in the Tampa Bay banking market or
any other relevant banking market.
Convenience and Needs Considerations
In considering an application to acquire a depository
institution under the BHC and Bank Merger Acts, 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").
Terrace Bank received a preliminary rating of "satisfactory" for its record of performance under the CRA as
of June 12, 1995. Although examiners noted some minor
deficiencies, examiners did not find any pattern or practice of illegal discrimination or other illegal practices
intended to discourage applications for credit during the
time period covered by this examination. Moreover,
Terrace Bank has taken steps to address the deficiencies
identified in the examination.7 University Bank also
5. In this context, depository institutions include commercial and
savings banks. 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).
6. Under the revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (1984), a market in which the postmerger HHI is between 1000 and 1800 is considered moderately
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 or
acquisition increases the HHI by at least 200 points. The Department of Justice has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognizes the competitive effect of limited purpose lenders and
other non-depository financial entities. Upon consummation of this
transaction, the HHI in the Tampa Bay market would remain
unchanged at 1650.
7. For example, Terrace Bank has expanded its delineated service
area and has agreed to hold quarterly meetings with community
leaders and to distribute more information to the community about
the bank's credit offerings. In addition, Terrace Bank has developed
876
Federal Reserve Bulletin • September 1995
received a "satisfactory" rating from its primary federal
supervisor, the Federal Deposit Insurance Corporation at
its most recent CRA examination as of January 18, 1994.
The Board also notes that it has received no comments
from the public opposing this proposal or contending
that Terrace Bank is not serving the credit needs of its
local community, including the low- and moderateincome neighborhoods.
Based on these and all other facts of record, the Board
concludes that convenience and needs considerations are
consistent with approval of this proposal. The Board
expects Terrace Bank to continue to improve its record
of compliance and CRA performance and to comply
with all commitments regarding its compliance and CRA
activities given in connection with these applications.
Other Considerations
The Board also concludes that the financial and managerial resources and future prospects of University Bank
and Terrace Bank, and the other supervisory factors the
Board must consider, are consistent with approval of
these applications.
Terrace Bank also has applied under section 24A of
the Federal Reserve Act (12 U.S.C. § 371d) to increase
its investment in bank premises. The Board has considered the factors it is required to consider when reviewing
an application for increasing investment in bank premises and finds those factors to be consistent with approval.
Based on the foregoing and other facts of record, the
Board has determined that the applications under the
BHC Act, the Bank Merger Act, and the Federal Reserve
Act should be, and hereby are, approved. The Board's
approval is specifically conditioned on compliance with
all the commitments made in connection with these
applications. For purposes of this action, both the commitments and conditions relied on by the Board in reaching its decision are commitments 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
fifteenth calendar day following the effective date of this
order, or later than three months following the effective
date of this order, unless such period is extended for
good cause by the Board or by the Federal Reserve Bank
of Atlanta, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 3, 1995.
a plan to better ascertain the credit needs of its community and
market the bank's services.
Voting for this action: Chairman Greenspan, Vice Chairman
Blinder, and Governors Kelley, Lindsey, Phillips, and Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Totalbank Corporation of Florida
Miami, Florida
Order Denying the Acquisition of a Bank
Totalbank Corporation of Florida, Miami, Florida ("Applicant"), a bank holding company within the meaning
of the Bank Holding Company Act ("BHC Act"), has
applied under section 3(a)(3) of the BHC Act
(12 U.S.C. § 1842(a)(3)) to acquire Florida International
Bank, Perrine, Florida ("Florida Bank").
Notice of the application, affording interested persons
an opportunity to submit comments, has been published
(60 Federal Register 32,013 (1995)). 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 of the BHC Act.
Applicant operates two subsidiary banks in Florida.
Applicant is the 50th largest commercial banking organization in Florida, controlling deposits of $171.2 million,
representing less than 1 percent of total deposits in
commercial banking organizations in the state.1 Florida
Bank is the 87th largest commercial banking organization in Florida, controlling deposits of $103.6 million,
representing less than 1 percent of total deposits in
commercial banking organizations in the state. Upon
consummation of this proposal, Applicant would become the 29th largest commercial banking organization
in Florida, controlling deposits of $274.8 million, representing less than 1 percent of total deposits in commercial banking organizations in the state.
Applicant and Florida Bank do not compete directly in
any relevant banking market. Based on all the facts of
record, the Board concludes that consummation of this
proposal would not have a significantly adverse effect on
competition or the concentration of banking resources in
any relevant banking market.
Convenience and Needs Considerations
In acting on 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
1. All banking data are as of June 30, 1994.
Legal Developments
financial institutions to help meet the credit needs of the
local communities in which they operate, consistent with
their safe and sound operation. 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 lowand moderate-income neighborhoods, consistent with
the safe and sound operation of such institution," and to
take that record into account in its evaluation of bank
expansion proposals.2
The Board has carefully reviewed the CRA performance record of Applicant and its subsidiary banks,
Totalbank ("Totalbank") and Trade National Bank
("Trade Bank"), both in Miami, Florida, in light of the
CRA, the Board's regulations, and the jointly issued
Statement of the Federal Financial Supervisory Agencies
Regarding the Community Reinvestment Act ("Agency
CRA Statement").3 The Agency CRA Statement states
that decisions by agencies to allow a financial institution
to expand will be made pursuant to an analysis of the
institution's overall CRA performance and will be based
on the actual record of performance of the institution.4
Record of Performance Under the CRA
A. CRA Performance Examinations
The Board has stated that a CRA examination is an
important and often controlling factor in determining
whether convenience and needs factors are consistent
with approval of an expansionary proposal. In the most
recent CRA performance examinations by their primary
federal supervisors, both Totalbank and Trade Bank
received less than satisfactory performance ratings.
Totalbank received a "needs to improve" rating from
the Federal Deposit Insurance Corporation ("FDIC"), as
of August 16, 1994, and Trade Bank received a "needs
to improve" rating from the Office of the Comptroller of
the Currency ("OCC"), as of March 27, 1995.
B. CRA Performance Records of Applicant's
Banks
Totalbank. Totalbank is Applicant's largest subsidiary
bank, and represents 65 percent of Applicant's consolidated assets. Examiners noted deficiencies in a number
of areas of CRA performance, including Totalbank's
2. 12 U.S.C. §2903.
3. 54 Federal Registerl3,742
(1989).
4. See First Interstate BancSystem of Montana, Inc., 77 Federal
Reserve Bulletin 1007 (1991) ("First Interstate of Montana");
Continental Bank Corporation, 75 Federal Reserve Bulletin 304
(1989); Agency CRA Statement, 54 Federal Register 13,743
(1989).
877
lending record, ascertainment and marketing efforts, and
overall CRA policies.
For example, FDIC examiners found that the geographic distribution of Totalbank's credit extensions,
credit applications, and credit denials reflected disparate
lending patterns. The report of examination revealed that
the bank extended a low percentage of loans within its
delineated community. Examiners also concluded that
Totalbank's activities to ascertain community credit
needs and to market its products and services within its
delineated community were inadequate, and noted particularly that Totalbank had not performed ascertainment
or marketing efforts in low- and moderate-income areas
in its delineated community.
The report of examination also indicated weaknesses
in the bank's overall implementation of CRA policies
and programs. For example, the bank has no board of
director oversight of CRA activities, no CRA program
structured to the needs and goals of the bank, and no
formal activities under written guidelines for management. Examiners also considered the CRA training of
bank personnel to be inadequate.
Trade Bank. The OCC noted deficiencies in several
areas of Trade Bank's CRA performance. For example,
the OCC examiners indicated that Trade Bank's participation in governmentally insured, guaranteed or subsidized loan programs is very limited and Trade Bank has
not participated in local community development or
redevelopment projects or programs. Examiners also
concluded that the bank has not developed a CRA program to ensure that it is adequately fulfilling its CRA
responsibilities.
OCC examiners also found that Trade Bank's activities to ascertain its credit needs and to market its products and services were limited. Examiners also indicated
that the bank's marketing efforts, which focused on
existing small business loan customers, were informal
and that there was no other program to ensure consistent
targeting of all sectors in the community, including lowand moderate-income areas.
C. Additional CRA Considerations
Applicant maintains that it has taken steps to improve its
CRA record since these examinations. Applicant describes efforts by Totalbank that have included increased
ascertainment and marketing programs, the adoption of a
comprehensive compliance plan to be implemented under the direction of the new CRA and Compliance
Committee of the board of directors, and implementation
of a compliance training program.5 The FDIC reviewed
5. Applicant also has identified similar initiatives to address
deficiencies in Trade Bank's record of CRA performance, includ-
878
Federal Reserve Bulletin • September 1995
these initiatives and concluded that additional efforts by
Totalbank would be required to address all the deficiencies in the bank's performance record. The FDIC also
noted that several recommendations made as a result of
the examination have not been implemented.
The Board has also carefully reviewed the CRA performance records of Applicant's banks, taking into consideration the fact that Totalbank has recently devoted
substantial managerial resources to improving its asset
quality. The Board believes, nevertheless, that before a
banking organization files an application to expand its
deposit-taking facilities, the organization should address
its CRA responsibilities and have the necessary policies
in place and working well. 6 The record in this application indicates that Totalbank and Trade Bank do not
have satisfactory records of performance in place, and
that efforts to address weaknesses in their performance
have not been fully implemented.
The Board also notes that Totalbank's report of examination cites technical violations of the Equal Credit
Opportunity, Home Mortgage Disclosure, and Fair Housing Acts. In addition, the Board has considered other
supervisory information provided by the FDIC on Totalbank's record of consumer compliance. The Board has
previously stated that disregard for consumer compliance laws provides a separate basis for concluding that
convenience and needs considerations do not warrant
approval of an application, even if an applicant has a
satisfactory record of performance under the CRA. 7
Based on the foregoing and other facts of record, the
Board has concluded that convenience and needs considerations are not consistent with approval of this proposal. While the Board believes that financial, managerial and competitive factors are consistent with approval,
it concludes that these factors do not lend sufficient
weight to warrant approval of this application. It is,
therefore, the judgment of the Board that approval of this
application would not be in the public interest and that
this application should be, and hereby is, denied. The
Board notes that this denial is without prejudice to future
applications that might be submitted when Applicant's
CRA programs are in place and working well at its
ing the hiring of a CRA officer and implementing CRA and
compliance training. The OCC has stated that these initiatives are
relatively new and have not been in place for a sufficient period of
time to allow for an adequate evaluation of their effectiveness.
6. First Interstate of Montana, at 1009.
7. See First State Holding Company, Inc., 67 Federal Reserve
Bulletin 802 (1981); see also Johnson International, Inc., 81 Federal Reserve Bulletin 507 (1995). The Board notes that Totalbank
has undertaken steps to improve its record of consumer compliance. However, these initiatives have not been in place for a
sufficient period of time to allow an adequate evaluation of their
effectiveness or sufficiency.
subsidiary banks and Totalbank is in compliance with all
applicable consumer lending laws. 8
By order of the Board of Governors, effective
July 12, 1995.
Voting for this action: Chairman Greenspan and Governors
Kelley, Phillips, and Yellen. Absent and not voting: Vice Chairman
Blinder and Governor Lindsey.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Orders Issued Under Section 4 of the Bank
Holding Company Act
Canadian Imperial Bank of Commerce
Toronto, Ontario, Canada
Order Approving a Notice to Continue to Engage in
Securities and Securities-Related Activities
Canadian Imperial Bank of Commerce, Toronto, Ontario, Canada ("Canadian Imperial"), a foreign bank
subject to the Bank Holding Company Act ("BHC
Act"), has provided notice under section 4(c)(8) of the
BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23 of
the Board's Regulation Y (12 C.F.R. 225.23) of its proposal to acquire certain assets and assume certain liabilities of The Argosy Securities Group, L.P., and The
Argosy Group, L.P., both of New York, New York
(collectively, "Argosy"), indirectly through its subsidiary Wood Gundy Corporation, New York, New York
("Company"). Argosy engages in:
(1) Underwriting and dealing in all types of debt and
equity securities;
(2) Acting as agent in the private placement of all
types of securities;
(3) Acting as a riskless principal in the purchase and
sale of all types of securities on the order of investors;
(4) Providing investment advisory services as described in section 225.25(b)(4) of Regulation Y
(12 C.F.R. 225.25(b)(4));
(5) Providing advice on swaps and related contracts as
described in section 225.25(b)(4)(vi)(A)(2) of Regulation Y (12 C.F.R. 225.25(b)(4)(vi)(A)(2)); and
(6) Providing financial advice, such as advice on
mergers, divestitures, recapitalizations and loan syndications, as described in section 225.25(b)(4)(vi)(A)(l)
of Regulation Y (12 C.F.R. 225.25(b)(4)(vi)(A)(l)).
8. See Farmers & Merchants Bank of Long Beach, 79 Federal
Reserve Bulletin 365 (1993).
Legal Developments
Notificant previously received Board approval to engage in each of these activities through Company.1 Notificant will continue to adhere to the conditions and
limitations imposed by the Board in the Canadian Impe-
rial Orders.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published (60
Federal Register 32,681 (1995)). The time for filing
comments has expired, and the Board has considered the
notice and all comments received in light of the factors
set forth in section 4(c)(8) of the BHC Act.
Canadian Imperial, with total consolidated assets
equivalent to approximately $106.2 billion, is the 63d
largest banking organization in the world.2 In the United
States, Canadian Imperial controls a bank in New York,
New York. In addition, Canadian Imperial operates a
branch in Chicago, Illinois; agencies in Atlanta, Georgia;
New York, New York; and Los Angeles and San Francisco, California; and a representative office in Houston,
Texas. Canadian Imperial also engages directly and
through subsidiaries in permissible nonbanking activities
in the United States and abroad.
Company is, and will continue to be, a broker-dealer
registered with the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934
(15 U.S.C. § 78a et seq.) and is a member of the National
Association of Securities Dealers, Inc. ("NASD"). Accordingly, Company is subject to the record-keeping and
reporting obligations, fiduciary standards, and other requirements of the Securities Exchange Act of 1934, the
SEC, and the NASD.
As noted above, Company currently is engaged in
limited underwriting and dealing activities that are permissible under section 20 of the Glass-Steagall Act
(12 U.S.C. § 377). The Board has determined that the
conduct of these securities underwriting and dealing
activities is consistent with section 20 of the GlassSteagall 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 over any two-year period from underwriting and
dealing in securities that a bank may not underwrite or
deal in directly ("bank-ineligible securities").3 Canadian
1. See Canadian Imperial Bank of Commerce, 76 Federal Reserve Bulletin 548 (1990); 76 Federal Reserve Bulletin 158 (1990);
and 74 Federal Reserve Bulletin 571 (1988) (collectively, "Canadian Imperial Orders").
2. Asset data are as of December 31, 1994.
3. See Canadian Imperial Bank of Commerce, et al., 76 Federal
Reserve Bulletin 158 (1990); J.P. Morgan & Company Incorporated, et al, 75 Federal Reserve Bulletin 192 (1989), aff'd sub
nom, Securities Industry Association 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), aff'd sub nom,
Securities Industry Association v. Board of Governors of the Fed-
879
Imperial has committed that Company will conduct its
underwriting and dealing activities in bank-ineligible
securities subject to the 10-percent revenue test.4
The Board also must determine that the proposed
acquisition can reasonably be expected to produce public
benefits that would outweigh possible adverse effects
under the proper incident to banking standard of section 4(c)(8) of the BHC Act. Under the framework
established in this and prior decisions, consummation of
this proposal is not 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. The Board expects that consummation of the proposal would provide
gains in efficiency to Canadian Imperial and Argosy, and
added convenience to their customers.
Under section 4(c)(8) of the BHC Act, the Board
considers the financial and managerial resources of the
notificant and its subsidiaries and the effect of the transaction upon such resources.5 The Board has reviewed the
capitalization of Canadian Imperial 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. The determination on the capitalization of Company is based on all the facts of record,
including Company's projections of the volume of Company's underwriting and dealing activities in bankineligible securities. Accordingly, the Board concludes
that financial and managerial considerations are consistent with approval of this proposal.6
eral Reserve System, 839 F.2d 47 (2d Cir.), cert, denied, 486 U.S.
1059 (1988) (collectively, "Section 20 Orders"). 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"). The Board notes that Canadian
Imperial has not adopted the Board's alternative indexed-revenue
test to measure compliance with the 10-percent limitation on bankineligible securities activities, and, absent such election, Canadian
Imperial will continue to employ the Board's original 10-percent
revenue test.
4. The Board notes that Company may engage in activities that
are necessary incidents to the proposed underwriting and dealing
activities, provided that any such activities are 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
them independently. Until such approval is obtained, any revenues
from the incidental activities must continue to 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.
5. See 12 C.F.R. 225.24.
6. The Board received comments from a customer of Canadian
Imperial ("Protestant") criticizing the proposed acquisition. Specif-
880
Federal Reserve Bulletin • September 1995
Based on all the facts of record, and for the reasons set
forth in this order, the Canadian Imperial Orders, and
other relevant orders, the Board has concluded that
Canadian Imperial's proposal to acquire Argosy is consistent with the Glass-Steagall Act, and that the proposed activities are so closely related to banking as to be
proper incidents thereto within the meaning of section 4(c)(8) of the BHC Act, provided that Canadian
Imperial limits Company's activities as specified in this
order, the Canadian Imperial Orders, and other relevant
orders. Accordingly, the Board has determined that the
acquisition of Argosy and the performance of the proposed activities by Canadian Imperial could reasonably
be expected to produce public benefits that would outweigh possible adverse effects under the proper incident
to banking standard of section 4(c)(8) of the BHC Act.
Based on all the facts of record, the Board has determined to, and hereby does, approve this notice subject to
all the terms and conditions discussed in this order and
in the Canadian Imperial 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. Company is not authorized to engage in
underwriting and dealing in any manner other than as
approved in this order and the Canadian Imperial Or-
ders.
The Board's determination also is subject to all the
terms and conditions set forth in Regulation Y, including
those in sections 225.7 and 225.23(b) (12 C.F.R. 225.7
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 is specifically conditioned on compliance with all the commitments made in connection with
this notice, including the commitments discussed in this
ically, Protestant believes that the acquisition of Argosy's highyield debt underwriting and dealing business would compromise
the fiduciary interests of customers of Canadian Imperial and
endanger the safety and soundness of Canadian Imperial. In response, Canadian Imperial states that it made the decision to
acquire Argosy after considerable due diligence and that Company's entry into the high-yield debt underwriting and dealing business would not compromise Canadian Imperial's fiduciary responsibility to its customers or place the money of depositors or the
safety and soundness of Canadian Imperial at risk. Based on all the
facts of record, including relevant examination reports and other
supervisory information, the Board concludes that these comments
do not warrant denial of this notice.
order and the Canadian Imperial Orders and the conditions set forth in the above noted Board regulations and
orders.7 These commitments and conditions shall be
deemed to be conditions imposed in writing by the
Board in connection with its findings and decisions, 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 New York, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 31, 1995.
Voting for this action: Chairman Greenspan, Vice Chairman
Blinder, and Governor Kelley. Absent and not voting: Governors
Lindsey, Phillips, and Yellen.
WILLIAM W. WILES
Secretary of the Board
Societe Generale
Paris, France
Order Approving a Notification to Engage in Futures
Commission Merchant and Foreign Exchange-Related
Activities
Societe Generale, Paris, France ("Societe Generale"), a
foreign banking organization subject to the provisions of
the Bank Holding Company Act ("BHC Act"), has
provided notice under section 4(c)(8) of the BHC Act
(12 U.S.C. § 1843(c)(8)) and section 225.23 of the
Board's Regulation Y (12 C.F.R. 225.23) of the proposal
that its indirect subsidiary, FTMAT Futures USA, Inc.,
Chicago, Illinois ("FIMAT"),1 acquire certain assets and
assume certain liabilities of Brody, White & Company,
Inc., New York, New York ("Brody White"). 2 Societe
7. As noted below, Canadian Imperial may commence the proposed activities immediately. The Board previously has determined
that Company has in place the operational and managerial infrastructure necessary to ensure compliance with the conditions in the
Canadian Imperial Orders and the Section 20 Orders.
1. FIMAT is wholly owned by Fimat International Banque, Paris,
France, a wholly owned subsidiary of Societe Generale. FIMAT
currently engages in various futures commission merchant
("FCM"), foreign exchange and securities-related activities. See
Societe Generale, 80 Federal Reserve Bulletin 646 (1994) ("Societe Generate")', Societe Generale, 80 Federal Reserve Bulletin 649
(1994).
2. Brody White is a clearing member of certain commodities
exchanges, including the Coffee, Sugar & Cocoa Exchange, Inc.;
Commodity Exchange, Inc.; New York Cotton Exchange; New
York Futures Exchange; and Financial Futures Exchange. Societe
Generale has stated that FTMAT would become a clearing member
of these exchanges. In addition, FIMAT would provide FCM ser-
Legal Developments
Generate would thereby engage indirectly in FCM execution, clearance and advisory activities with respect to
futures and options on futures on financial and nonfinancial commodities3 and buying and selling foreign
exchange in the spot, forward and over-the-counter options markets on the order of investors as riskless principal.4
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published (60
Federal Register 28,412 (1995); 60 Federal Register
31,157 (1995)). The time for filing comments has expired, and the Board has considered the notice and all
comments received in light of the factors set forth in
section 4(c)(8) of the BHC Act.
Societe Generate, with total consolidated assets equivalent to approximately $275 billion, is the third largest
commercial banking organization in France.5 In the
United States, Societe Generate operates branches in
New York, New York; Chicago, Illinois; and Los Angeles, California; an agency in Dallas, Texas; and representative offices in Atlanta, Georgia; Houston, Texas; and
San Francisco, California.
FIMAT is an FCM registered with the Commodity
Futures Trading Commission ("CFTC") and a member
of the National Futures Association ("NFA"), and, therefore, is subject to the recordkeeping, reporting, fiduciary
standards, and other requirements of the Commodity
Exchange Act (7 U.S.C. § 1 et seq.), the CFTC, and the
NFA. In addition, FIMAT is a broker-dealer registered
with the Securities and Exchange Commission ("SEC"),
and has applied to become a member of the National
Association of Securities Dealers, Inc. ("NASD"). Accordingly, FIMAT is subject to the recordkeeping, reporting, fiduciary standards, and other requirements of the
Securities Exchange Act of 1934 (15 U.S.C. § 78a
et seq.) and the SEC, and would become subject to the
vices with respect to two contracts traded on the New York Mercantile Exchange that have not previously been approved by the Board,
Heating Oil Crack Spread Options and Gasoline Crack Spread
Options, and would purchase and sell through the use of omnibus
account arrangements certain futures and options on futures on
non-financial commodities traded on the Winnipeg Commodity
Exchange and the London Commodity Exchange.
3. These activities include providing execution-only and clearingonly services to customers. See Northern Trust Corporation, 79
Federal Reserve Bulletin 723 (1993) ("Northern Trust"); J.P. Morgan & Co. Incorporated, 80 Federal Reserve Bulletin 151 (1994)
("J.P. Morgan").
4. FIMAT would provide the proposed riskless principal services
only to institutional customers, except that FIMAT would provide
such services to certain non-institutional customers when such
customers direct FIMAT to convert funds from one currency to
another in order to trade futures and options on futures contracts.
FIMAT would not provide foreign exchange-related advisory services to these non-institutional customers.
5. Asset and ranking data are as of December 31, 1994, and
employ exchange rates then in effect.
881
requirements of the NASD upon approval of its membership application.
The Board previously has determined by order and
regulation that the proposed activities are closely related
to banking within the meaning of section 4 of the BHC
Act. 6 The Board also must determine that the proposed
activities "can reasonably be expected to produce benefits to the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of
interest,
or
unsound
banking
practices."
12 U.S.C. § 1843(c)(8).
Societe Generate has committed that FIMAT will engage in the proposed activities in accordance with the
conditions and limitations previously relied on by the
Board, with two exceptions.
Provision of Services to Certain Sophisticated
Non-institutional Customers
First, Societe Generate proposes that FIMAT provide
FCM execution, clearance and advisory services with
respect to contracts on both financial and non-financial
commodities to persons that do not qualify as institutional customers7 but that trade futures and options on
futures solely to hedge risks arising from their business
activities ("non-institutional commercial hedger customers"), such as farmers. The Board previously has limited
bank holding companies to providing non-financial
commodities-related FCM services to institutional customers. Similarly, with respect to contracts on financial
commodities, the Board has not permitted bank holding
companies to provide execution-only or clearing-only
services to non-institutional customers and only permits
bank holding companies to provide advisory services to
financially sophisticated customers that have significant
dealings in the underlying commodities. 8
6. See 12 C.F.R. 225.25(b)(18) and (19); Northern Trust, J.P.
Morgan; Banca Commerciale Italiana S.p.A., 76 Federal Reserve
Bulletin 649 (1990) ("BC/").
7. Under the Board's regulations, "institutional customer" includes an organization or natural person whose net worth exceeds
$1 million. 12 C.F.R. 225.2(g). A non-institutional commercial
hedger customer would have a net worth of less than $1 million.
8. See Bank of Montreal, 79 Federal Reserve Bulletin 1049
(1993) and J.P Morgan (contracts on non-financial commodities);
Northern Trust and 12 C.F.R. 225.25(b)(19) (contracts on financial
commodities). These limitations address concerns that, in futures
transactions, unsophisticated customers may place undue reliance
on investment advice received from a banking organization and
may not be able to detect investment advice that is motivated by the
advisor's self-interest. Similarly, in cases involving clearing-only
transactions, the limitation helps address the added risk to the bank
holding company that results from the more limited ability of the
882
Federal Reserve Bulletin • September 1995
FIMAT's non-institutional commercial hedger customers would be engaged, or would be affiliated with a
commercial enterprise that is engaged, in producing,
manufacturing, processing or merchandising products or
providing services related to the commodities underlying
the futures and options on futures contracts in which the
customers would trade, and would not be engaged in
executing their own trades on the floor of any commodities exchanges. Societe Generale has stated that noninstitutional commercial hedger customers would be required by FIMAT to state in writing that they would
engage in "bona fide hedging transactions," as defined
by the CFTC.9 In addition, FIMAT would establish an
initial credit review process to determine whether a
non-institutional commercial hedger customer's proposed hedging activities are appropriate, in light of the
customer's net worth and business activities. FIMAT
would not permit a non-institutional commercial hedger
customer to trade in any commodities other than those
that the customer would trade to hedge risks that arise
from its commercial activities and would establish a
system to detect any unauthorized trading activities.
By limiting transactional services and advice to areas
in which the customer has special expertise, the proposed limitations address the concern that the customer
would rely unduly on the bank holding company's advice or be unable to detect conflicts of interest or advice
that is motivated by the bank holding company's selfinterest. Moreover, Societe Generale would abide by all
the other limitations designed to address more specifically the potential risks that may result from clearingonly and execution-only services provided to these customers.10
foreign exchange-related transactional and advisory services in a subsidiary that purchases and sells foreign
exchange for its own account.12 For example, the Board
has permitted bank holding companies to provide foreign exchange-related advice and transactional services
through a subsidiary engaged in purchasing and selling
foreign exchange for its own account to hedge positions
in permissible interest rate or currency swap transactions
or to hedge risks arising from the permissible securities
underwriting and dealing activities of the subsidiary.13
FIMAT would take positions in foreign exchange only
as a means to hedge financial statement translations of
income for its French parent and as necessary for the
payment of invoices denominated in foreign currencies,
and would not enter into a foreign exchange transaction
for its own account with a customer if the customer is
receiving foreign exchange services from FIMAT relating to such transaction. Societe Generale has committed
that FIMAT will observe the standards of care and
conduct applicable to fiduciaries with respect to its foreign exchange-related advisory activities and will provide foreign exchange-related execution and advisory
services only to institutional customers. Societe Generale also has committed that FIMAT personnel engaged
in purchasing and selling foreign exchange for FIMAT's
account will not have access to information about the
foreign exchange trading activities of customers, and
FIMAT's customer representatives will not have access
to information about the foreign exchange activities of
personnel engaged in purchasing and selling foreign
exchange for FIMAT's account.14
Foreign Exchange Activities
In every case under section 4 of the BHC Act, the Board
must consider the financial condition and resources of
the notificant and its subsidiaries and the effect of the
Second, in connection with the proposal that FIMAT buy
and sell foreign exchange on the order of customers as
riskless principal, Societe Generale has proposed that
FIMAT be permitted to purchase and sell foreign exchange for its own account for limited purposes while
also providing foreign exchange-related execution and
advisory services.11 In several limited circumstances, the
Board has permitted a bank holding company to provide
bank holding company to review and reject trades that have been
executed through another FCM.
9. See 17 C.F.R. 1.3(z).
10. See J.P. Morgan and Northern Trust.
11. FIMAT currently provides foreign exchange-related execution and advisory services to its customers. See Societe Generale.
In permitting bank holding companies to provide foreign exchange
execution and advisory services on a combined basis, the Board has
relied on the representation that the subsidiary providing the foreign exchange-related services would not purchase or sell foreign
exchange for its own account. See BCI; Societe Generale.
Other Considerations
12. The Board also previously has noted that in conducting
foreign exchange operations, commercial banks combine the functions of giving advice, executing transactions and taking positions
in foreign exchange. See Hongkong and Shanghai Banking Corporation, et al., 69 Federal Reserve Bulletin 221, 223 (1983).
13. See The Sumitomo Bank, Limited, 80 Federal Reserve Bulletin 157 (1994); NationsBank Corporation, 79 Federal Reserve
Bulletin 892 (1993) ("NationsBank").
14. See NationsBank at 894. In addition, Societe Generale has
committed that in order to address potential conflicts of interests
that may arise in connection with providing the proposed foreign
exchange riskless principal services, FIMAT will disclose to each
customer that receives advice relating to over-the-counter transactions in the foreign exchange market that FIMAT may have an
interest as a counterparty principal in the course of action ultimately chosen by the customer. Also, in any case in which FIMAT
has an interest in a specific over-the-counter foreign exchange
transaction as counterparty principal, FIMAT will advise its customer of that fact before recommending participation in that transaction.
Legal Developments
proposal on these resources.15 In this case, the Board
notes that Societe Generale's capital ratios satisfy the
applicable risk-based standards established under the
Basle Accord, and are considered equivalent to those
that would be required of a U.S. banking organization. In
view of these and other facts of record, the Board has
determined that financial factors are consistent with approval of this proposal. The managerial resources of
Societe Generale also are consistent with approval.
The Board expects that consummation of the proposal
would provide added convenience to Societe Generale's
and Brody White's customers and would increase the
level of competition among existing providers of these
services. Accordingly, based on the commitments made
by Societe Generale regarding its conduct of the proposed activities, the limitations on the activities noted in
this order, and all the facts of record, the Board has
determined that the performance of the proposed activities by Societe Generale could reasonably be expected to
produce public benefits that would outweigh the possible
adverse effects under the proper incident to banking
standard of section 4(c)(8) of the BHC Act.
Conclusion
Based on the foregoing and all the facts of record, the
Board has determined to, and hereby does, approve the
notification subject to all the terms and conditions set
forth in this order, and in the above-noted Board regulations and orders that relate to these activities. The
Board's determination also is subject to all the terms and
conditions set forth in the Board's Regulation Y, including those in sections 225.7 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 is specifically
conditioned on compliance with all the commitments
made by Societe Generale in this notice, including the
commitments discussed in this order and the conditions
set forth in this order and in the above-noted Board
regulations and orders. For purposes of this action, these
commitments and conditions shall be deemed to be
conditions imposed in writing by the Board in connection with its findings and decisions, 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
15. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal
Reserve Bulletin 155 (1987).
883
by the Federal Reserve Bank of New York, pursuant to
delegated authority.
By order of the Board of Governors, effective
July 14, 1995.
Voting for this action: Chairman Greenspan and Governors
Kelley, Phillips, and Yellen. Absent and not voting: Vice Chairman
Blinder and Governor Lindsey.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Orders Issued Under Sections 3 and 4 of the
Bank Holding Company Act
The Chase Manhattan Corporation
New York, New York
Order Approving the Acquisition of a Bank Holding
Company and Notice to Engage in Nonbanking
Activities
The Chase Manhattan Corporation, New York, New
York ("Chase"), 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 merge with U.S. Trust Corporation, New York, New York ("UST"), and thereby indirectly acquire United States Trust Company of New
York, New York, New York ("USTNY"), in order to
acquire the securities processing and related back office
activities of these organizations.1 Chase also has filed
notice, 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
U.S. Trust Company of Wyoming, Cody, Wyoming
("USTWY"), a nonbanking subsidiary of UST, and
thereby engage in providing investment advisory services pursuant to section 225.25(b)(4) of Regulation Y
(12 C.F.R. 225.25(b)(4)); and to acquire Mutual Funds
Service Company, Boston, Massachusetts ("MF Service"), a nonbanking subsidiary of UST, and thereby
provide administrative services to open-end investment
1. Prior to the merger with Chase, UST would undergo a corporate reorganization that will include the transfer by USTNY of all
of its businesses, other than its securities processing and related
back office activities to be acquired by Chase, to a newly established state-chartered bank. A new holding company would also
acquire all of UST's banking and nonbanking subsidiaries that are
not acquired by Chase upon consummation of this proposal. See
U.S. Trust Corporation, 81 Federal Reserve Bulletin 893 (1995),
{"U.S. Trust Order").
In the proposed merger, Chase also would acquire certain custodial accounts of U.S. Trust Company of California, N.A., a wholly
owned subsidiary of UST.
884
Federal Reserve Bulletin • September 1995
companies ("mutual funds") and closed-end investment
companies. 2
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(60 Federal Register 16,653 and 24,632 (1995)). The
time for filing comments has expired, and the Board has
considered the application and notices and all comments
received in light of the factors set forth in sections 3
and 4 of the BHC Act.
Competitive Considerations
Chase, with consolidated assets of $114 billion, operates
subsidiary banks in New York, Connecticut, Delaware,
Florida, Maryland and New Jersey.3 Chase is the sixth
largest banking organization in the United States, controlling approximately 2 percent of total U.S. banking
assets. Chase also engages in a number of permissible
nonbanking activities nationwide. UST, a bank holding
company with consolidated assets of $3 billion, is the
118th largest banking organization in the United States,
controlling less than 1 percent of total U.S. banking
assets.
Chase and UST own depository institutions that compete directly in the Metropolitan New York-New Jersey
banking market.4 Chase is the third largest banking or
thrift organization ("depository institution") in this market, controlling deposits of $27.6 billion, representing
approximately 8 percent of total deposits in depository
institutions in the market.5 Prior to consummation of the
2. After the merger of UST into Chase, Chase would merge
USTNY with and into Chase Manhattan Bank, N.A., New York,
New York ("Manhattan Bank"). Chase intends to contribute
USTWY and MF Service to Manhattan Bank immediately following the merger of UST into Chase. Chase has applied to the Office
of the Comptroller of the Currency ("OCC") for approval of the
merger of USTNY and Manhattan Bank and has filed notice with
the OCC to contribute USTWY and MF Service to Manhattan
Bank.
3. Asset data are as of December 31, 1994.
4. The Metropolitan New York-New Jersey banking market is
approximated by New York City; Long Island, and Orange, Putnam, Rockland, Sullivan and Westchester Counties in New York;
Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, Warren and portions
of Mercer Counties in New Jersey, Pike County in Pennsylvania;
and portions of Fairfield and Litchfield Counties in Connecticut.
5. Deposit and market share data for the Metropolitan New
York-New Jersey banking market are as of June 30, 1994. Market
share data are based on calculations in which the deposits of thrift
institutions are included on a 50 percent weighted basis. 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). Thus, the Board has regularly included thrift
deposits in the calculation of market share on a 50 percent weighted
basis. See e.g., Comerica Inc., 81 Federal Reserve Bulletin 476, n.3
(1995); First Hawaiian Inc., 77 Federal Reserve Bulletin 52 (1991).
proposal, UST would transfer to a newly formed bank
substantially all the deposits currently in USTNY. Therefore, Chase would only acquire approximately
$522 million in deposits associated with USTNY's securities processing business, representing less than 1 percent of total deposits in depository institutions in the
market.6 Upon consummation of the proposal, Chase
would remain the third largest depository institution in
the Metropolitan New York-New Jersey banking market,
controlling $28.1 billion in deposits, representing approximately 8.2 percent of total deposits in the market.
After consummation of this proposal, numerous competitors would remain in the market, including a newly
reorganized UST, and the market would remain unconcentrated, and the increase in market concentration, as
measured by the Herfindahl-Hirschman Index ("HHI"),
would be minimal.7
Through its acquisition of UST, Chase would acquire
the business units of UST that provide the following
types of services:
(1) Acting as a trustee for unit investment trusts as
defined in section 4 of the Investment Company Act
of 1940 (unit investment trust services or "UITS");
(2) Providing processing, custody, funds management
and investment manager services to corporate, pension and public entities (institutional asset services or
"IAS"); and
(3) Providing administrative, custody, transfer agency
and cash management services to registered investment companies as defined in section 3 of the Investment Company Act of 1940 (mutual fund administrative services or "MFAS").
In delineating the relevant product market in which to
assess the competitive effects of a bank acquisition or
merger, the Supreme Court has determined that "commercial banking" is the appropriate line of commerce
because the cluster of banking products and services
provided by commercial banks is unique relative to other
6. Deposit data for UST on a pro forma basis prior to the
proposed merger with Chase is as of December 31, 1994.
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 below 1000 is considered unconcentrated.
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 postmerger 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 recognizes the competitive effect
of limited-purpose lenders and other non-depository financial lenders. In this case, the HHI for the Metropolitan New York-New
Jersey banking market would increase by only 2 points to 538 as a
result of this proposal.
Legal Developments
institutions.8 UITS, IAS, and MFAS generally are provided by depository institutions and involve a combination of services that banks have traditionally provided,
including trust, custody, transfer agency, asset management, accounting and administration services. In this
regard, the Board notes that Chase currently provides
each of these services through Manhattan Bank.9 After
carefully considering all the facts of record, the Board
concludes that UITS, IAS, and MFAS are elements of
the cluster of products and services included within the
commercial banking line of commerce. 10 Based on all
the facts of record, the Board concludes that consummation of the proposal would not result in any significantly
adverse effects on competition or the concentration of
banking resources in the Metropolitan New York-New
Jersey banking market or any other relevant banking
market.
In light of the unique structure of this proposal, the
Board also has analyzed the competitive effects of the
proposal assuming that UITS, IAS, and MFAS were not
included in the commercial banking product market. As
noted above, this transaction involves essentially the
transfer by UST of its UITS, IAS, and MFAS lines of
business and the acquisition by Chase of only those
deposits associated with these lines of business. Inner
City Press/Community on the Move ("Protestant") has
submitted comments alleging that UITS, IAS, and
MFAS should be regarded as separate and distinct product markets for purposes of competitive analysis. Protestant contends that this proposal would have significant
adverse effects on competition in the separate markets
for IAS and MFAS, and in particular, for UITS. Protestant has provided the Board no evidence that supports its
contention that UITS, IAS, and MFAS are separate product markets. Chase argues that these services are not
distinct product markets and that the proposal would
have no adverse competitive effects.
Based on all the facts of record, including information
provided by Chase and Protestant's comments, the Board
concludes that, even if UITS, IAS, and MFAS are not
considered part of the commercial banking product market, each such service should not be considered a separate product market for purposes of competitive analysis.
Institutions providing UITS, IAS, or MFAS generally
have the capacity to provide an array of custody, transfer
8. See United States v. Phillipsburg National Bank, 399 U.S. 350,
359 (1970); United States v. Philadelphia National Bank, 374 U.S.
321, 356 (1963). To measure the "cluster of products and services," the Court has used bank deposits as a proxy for the market
share of the institution.
9. As indicated above, Chase has applied to the OCC to merge
USTNY into Manhattan Bank and to contribute USTWY and MF
Service to Manhattan Bank.
10. See The Bank of New York Company, Inc., 74 Federal
Reserve Bulletin 257 (1988).
885
agent, administrative and informational services to their
customers, because the resources required to engage in
any one type of service are essentially the same as those
required to engage in either, or both, of the other two
types of service. For example, firms providing UITS,
IAS, or MFAS generally maintain data processing, custody, accounting and recordkeeping systems that are
substantially similar and easily adapted to provide any
one of these services. In addition, the personnel resources and skills required to provide the trustee, custody, money management and transfer agency functions
for any of these services are substantially similar.
Accordingly, whether a firm offers only one type of
service, or all three types of service, will depend on the
supplying firm's perception of market demand and
whether a service is likely to be profitable, given the
nature of the supplying firm's existing and potential
customer base. In this regard, firms supplying UITS,
IAS, or MFAS generally have the capacity to respond to
shifts in demand for a particular service, thereby making
low barriers to providers of one service entering the
market for other services.11
There are currently 48 firms offering UITS, IAS, or
MFAS. 12 These firms include 16 of the 20 largest banking organizations in the United States.13 UST is the tenth
largest provider of these services, with a market share of
approximately 2.9 percent, and Chase is the second
largest provider with a market share of approximately
12.1 percent.14 Upon consummation of this proposal,
Chase would become the largest provider of these services, with a market share of 15 percent. The combined
market for such services, as measured by the HHI,
would be considered moderately concentrated, with the
HHI increasing 70 points from 1001 to 1071. 15 The
Department of Justice has concluded that this proposal
11. Evidence suggests that UITS, IAS, and MFAS may be part of
a larger product market that would include, for example, American
depositary receipts ("ADR") processing and government securities
clearing. While there are a larger number of competitors in this
broader market, the Board, for purposes of its alternative competitive analysis, has analyzed this case on the basis of the narrower
market discussed above. UST and Chase currently play either a
minor role or no role in the businesses of ADR processing and
government securities clearing.
12. Because of the nature of these businesses and geographic
dispersion of customers seeking these services, the Board has
determined that competition for UITS, IAS, and MFAS is, at least,
national.
13. The total consolidated assets of these 16 firms, as of December 31, 1994, range from $40 billion to $250 billion.
14. Market share for these services is calculated on the basis of
the dollar value of UITS, IAS, and MFAS assets held by organizations providing such services.
15. Under the revised Department of Justice Merger Guidelines,
a market in which the post-merger HHI is between 1000 and 1800
is considered moderately concentrated. In a moderately concentrated market, the Justice Department will not challenge an acquisi-
886
Federal Reserve Bulletin • September 1995
would not have a significantly adverse effect on competition. Based on all the facts of record, including comments by Protestant and Chase, the Board concludes
that, even if UITS, IAS, and MFAS are not considered
part of the commercial banking product market, consummation of this proposal would not result in a significantly adverse effect on competition in the relevant
market for these services.
Convenience and Needs Considerations
In acting on 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, consistent with
their safe and sound operation. 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 lowand moderate-income neighborhoods, consistent with
the safe and sound operation of such institution," and to
take that record into account in its evaluation of applications. 16
Protestant has submitted comments alleging deficiencies in Chase's record of performance under the CRA. In
particular, Protestant contends that Manhattan Bank,
Chase Manhattan Bank of Connecticut, Bridgeport, Connecticut ("Connecticut Bank") 17 and Chase's mortgage
subsidiaries18 have failed to ascertain credit needs, market their services or extend credit in neighborhoods with
low- and moderate-income and minority residents in the
South Bronx, Upper Manhattan and Brooklyn in New
York and in Connecticut.19 In addition, Protestant main-
tion (in the absence of other factors indicating anti-competitive
effects) unless the merger increases the HHI by 100 points.
16. See 12 U.S.C. § 2903.
17. Through a multi-step corporate reorganization, Chase merged
Connecticut Bank with and into Manhattan Bank, effective May 1,
1995. See Chase Manhattan Corporation, 81 Federal Reserve
Bulletin 467 (1995) ("Chase Order").
18. Chase recently reorganized its mortgage lending operations
into a subsidiary of Manhattan Bank, Chase Manhattan Mortgage
Corporation ("CMMC"). CMMC was formed by merging Chase
Home Mortgage Corporation with Troy & Nichols, Inc. ("Troy &
Nichols") and American Residential Mortgage Company ("American Residential"), which Chase acquired in 1993 and 1994, respectively. CMMC also includes Chase Manhattan Personal Financial
Services, Inc., which formerly was a subsidiary of Chase U.S.
Consumer Services, Inc ("CUSCS").
19. Protestant also makes similar allegations regarding the CRA
performance of Chase and its subsidiary bank, The Chase Manhat-
tains, on the basis of data filed under the Home Mortgage Disclosure Act (12 U.S.C. § 2801 et
seq.)
("HMDA"), that Manhattan Bank, Connecticut Bank,
and Chase's mortgage subsidiaries have failed to assist
in meeting the housing-related credit needs of areas
within their service communities in New York City and
Binghamton, both of New York, and Bridgeport, Connecticut. Protestant also alleges that Chase and its mortgage subsidiaries have violated the Equal Credit Opportunity Act (15 U.S.C. § 1691 et seq.) and the Fair
Housing Act (42 U.S.C. § 3601 et seq.) (together, "fair
lending laws").
The Board has carefully reviewed the CRA performance record of Chase and its subsidiaries in light of the
CRA, relevant fair lending laws and related regulatory
materials, the Board's regulations, the Statement of the
Federal Financial Supervisory Agencies Regarding the
Community Reinvestment Act ("Agency CRA Statement"), 20 all comments received, and Chase's response
to these comments.
Evaluation of CRA Performance
A. Examination Record 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 of examination will be given great weight
in the applications process.21 In this case, the Board
notes that all of Chase's subsidiary banks received "outstanding" or "satisfactory" ratings at the most recent
examinations of their CRA performance by their primary
federal supervisors. In particular, Chase's lead bank,
tan Bank of New Jersey, N.A., Oradell, New Jersey ("New Jersey
Bank"), in Bergen and Passaic Counties in New Jersey. New Jersey
Bank was established in March 1995 to acquire the assets and
liabilities of three branches of a failed savings association from the
Resolution Trust Corporation. Chase has hired a community investment officer for New Jersey Bank and has developed a CRA
statement and community investment plan for the bank. The community investment plan establishes preliminary lending goals for
the bank in its delineated communities, including loans to low- and
moderate-income individuals and small businesses. The plan also
includes proposed methods for ascertaining the credit needs of the
community and calls for New Jersey Bank to sponsor educational
seminars for members of its community, including first-time home
buyers and small businesses. Moreover, Chase intends to model
New Jersey Bank's CRA program on the CRA programs implemented by Chase's other banks, including Manhattan Bank, all of
which, as discussed above, have satisfactory or outstanding records
of CRA performance. In light of these and other facts of record, the
Board does not believe that Protestant's comments regarding
Chase's CRA performance in New Jersey warrant denial of this
proposal.
20. 54 Federal Register 13,742 (1989).
21. See Agency CRA Statement at 13,745.
Legal Developments
Manhattan Bank, and Connecticut Bank received "satisfactory" ratings from the OCC at their most recent
examinations for CRA performance both as of October
1993.22 USTNY also received a "satisfactory" rating
from the Federal Reserve Bank of New York at its most
recent examination for CRA performance in September
1994.23
B. Previous Review of Chase's Compliance and
CRA Records
The Board recently reviewed Chase's record of compliance with fair lending laws and record of performance
under the CRA in connection with an application to
establish a de novo savings bank to effect the merger of
Manhattan Bank and Connecticut Bank in a corporate
reorganization.24 This review was conducted in light of
substantial comments filed by Protestant and involved
careful consideration of a number of the issues that the
Protestant has raised again in this application.
In considering Chase's compliance with fair lending
laws, the Chase Order noted the conclusions by the
OCC, the primaiy federal supervisor for Manhattan Bank
and Connecticut Bank, that neither these banks nor the
Chase mortgage subsidiaries have engaged in illegal
discriminatory lending or credit practices.25 In particular,
the OCC reviewed allegations raised by Protestant that
Manhattan Bank's practice of referring loan applicants
to specialized lending units on the basis of product
profile and financing requirements violated fair lending
laws.26 The Board also considered Protestant's criticisms
of lending activities conducted by Manhattan Bank, in
22. The Chase Manhattan Bank of Florida, Tampa, Florida,
received a "satisfactory" rating from the OCC as of October 1993;
and The Chase Manhattan Bank of Maryland, Baltimore, Maryland, received a "satisfactory" rating from the Federal Reserve
Bank of Richmond as of February 1995. The Chase Manhattan
Bank (USA), Wilmington, Delaware, a specialized bank engaged in
credit card operations, received an "outstanding" rating from its
primary supervisor, the Federal Deposit Insurance Corporation, as
of August 1994.
23. In connection with an application filed by UST to reorganize
as part of the proposed sale of assets and businesses to Chase, the
Board has reviewed USTNY's record of CRA performance and
concluded that it is consistent with approval of a proposal under the
convenience and needs considerations in the BHC Act. See U.S.
Trust Order.
24. See Chase Order.
25. The OCC's conclusion was based on the results of its
performance examinations and fair lending examinations for Manhattan Bank, Connecticut Bank and several of Chase's mortgage
subsidiaries. These examinations included a review of samples of
loan files at Manhattan Bank and Connecticut Bank as well as
Chase Home Mortgage Corporation, Chase Manhattan Personal
Financial Services, Inc., and other nonbank affiliates that sell mortgages to Chase's subsidiary banks.
26. Protestant contends that another aspect of Chase's organizational structure into specialized lending subsidiaries—CUSCS's
887
cooperation with affordable housing organizations and
private redevelopers, as illegally discouraging a reasonable person from making or pursuing an application on a
prohibited basis such as race, national origin or gender
("pre-screening"). Finally, the Board considered
Chase's mortgage-backed securities activities conducted
through Chase Mortgage Finance Corporation in light of
Protestant's allegations of fair lending law violations.
Based on all the facts of record, and for the reasons
stated in the Chase Order, the Board concluded that
Protestant's allegations did not support a finding that fair
lending laws had been violated.27
As explained in the Chase Order, the Board also
carefully reviewed the CRA performance records of
Manhattan Bank and Connecticut Bank. A number of
steps initiated by Manhattan Bank to assist in meeting
the housing-related credit needs in low- and moderateincome areas of its communities, including Upper Manhattan and the South Bronx, were discussed in the Chase
Order.28 The activities of Chase's Small Business Group,
which included a pilot lending program to be introduced
in the Bronx,29 and the bank's participation in governmentally sponsored programs, were also noted.30 Manhattan Bank's outreach and marketing efforts were found
policy of lending on properties valued in excess of $350,000—
violates fair lending laws.
27. Protestant also asserts that CMMC violates fair lending laws
by originating mortgage loans that do not meet the underwriting
criteria used by government-sponsored secondary market purchasers, such as the Federal National Mortgage Association ("FNMA").
The fact that CMMC originates loans that do not conform to the
underwriting criteria of FNMA does not in and of itself constitute a
fair lending violation. Rather, a finding of a fair lending violation
must be based on evidence that a lender has discriminated against
an applicant for credit on a prohibited basis, including on the basis
of race, national origin or gender. 15 U.S.C. § 1691 and
42 U.S.C. § 3604. In addition, the Board notes that, as a subsidiary
of Manhattan Bank, CMMC's lending practices are subject to fair
lending examination by the OCC. As explained above, the OCC
found no fair lending violations in the most recent fair lending
examinations for Manhattan Bank and several of Chase's mortgage
subsidiaries.
28. These programs included the Tax Advantaged Installment
Loan ("TAIL") product (featuring 100 percent financing and minimal closing costs) for residents purchasing cooperative units in two
projects located in the Bronx, and the Ownership Transfer Program
which provided $8.9 million for 487 units of affordable housing in
Upper Manhattan and the Bronx.
29. The Small Business Group's development in 1993 of a Small
Business Plan to achieve higher levels of lending to small businesses in low- and moderate-income areas has resulted in 20 small
business loans totalling $1.9 million, with the majority of the
applicants located in low- to moderate-income areas. The Group
has allocated $500,000 for its pilot program in the Bronx.
30. Manhattan Bank has $5 million in Small Business Administration loans for the first half of 1993, $2 million in outstanding
loans under the New York Business Development Loan Program,
and the largest outstanding amount of loans for lenders under the
New York City Small Business Reserve Fund, with $1.3 million
outstanding in 1993.
888
Federal Reserve Bulletin • September 1995
to involve a formal process to ascertain community
credit needs through focus groups, community contacts,
and independent market research, and marketing programs that included specific low- and moderate-income
areas and communities with predominately minority residents. OCC examiners also have concluded that Manhattan Bank's branch locations provided reasonable access to most segments of its delineated community, and
have noted with approval Chase's efforts to provide
banking services to underserved areas through the use of
mobile banking units.31 In addition, the Chase Order
considered the findings of OCC examiners that Chase's
branch closing policy took into account the views of
local community groups and political leaders in order to
minimize any impact a closing would have on an area,
and that branch office closings have had no adverse
impact on Chase's communities.
Connecticut Bank's record of CRA performance was
found to demonstrate that the bank affirmatively solicits
mortgage loans in low- and moderate-income census
tracts and neighborhoods with predominately minority
residents. The Chase Order noted steps taken by the
bank to increase mortgage lending in underserved lowand moderate-income neighborhoods, including originations at bank branches, hiring low- and moderate-income
mortgage origination specialists, offering governmentally sponsored loans, and increased marketing efforts.32
Connecticut Bank's small business lending activities
were also found to assist in meeting credit needs. 33
Finally, OCC examination findings that the bank's outreach and marketing efforts informed its entire community of the credit products and services available, and
that branch locations were reasonably accessible were
noted.34 For these and other reasons discussed in the
Chase Order, the Board determined that Protestant's
comments relating to Chase's compliance with fair lending laws, and the CRA performance records of Connecticut Bank and Manhattan Bank, particularly in Upper
Manhattan and South Bronx, did not warrant denial of
the proposal involved in the Chase Order. Because Prot-
31. The Chase Order noted that 9 of Manhattan Bank's 14 Bronx
branches and mobile banking units are located in low- to moderateincome census tracts, and that 11 of the bank's 48 Manhattan
branches are located in low- to moderate-income census tracts.
32. Connecticut Bank also initiated a pre-approval program for
low- and moderate-income home buyers.
33. For example, at the time of Connecticut Bank's October 1993
CRA performance examination, the bank originated $1.6 million in
Small Business Administration loans, $3.9 million in loans under
the Connecticut Works Guarantee Fund (a program to create and
maintain jobs in Connecticut by means of state guaranteed loans),
and $900,000 in loans under the Urbank Fund (a lending program
specifically designed to assist small businesses).
34. For example, the OCC examination noted that 17 of Connecticut Bank's 51 branches are located in low- and moderate-income
communities.
estant reiterates in comments on this application many of
the issues raised and considered recently in connection
with the Chase reorganization, the Board has reaffirmed
and incorporated in this case the reasons, evidence and
conclusions explained in the Chase Order?5
C. CRA-Related Activities in Brooklyn
Protestant alleges that Manhattan Bank has failed to
ascertain and meet the credit needs of low- and
moderate-income residents in Brooklyn, particularly in
the Bushwick and Brownsville sections. As a general
matter, Manhattan Bank has initiated a number of steps
to strengthen its already satisfactory record of meeting
the credit needs of residents in low- and moderateincome areas throughout its designated communities,
and the various components of the bank's CRA program
are available in all areas of New York City, including
Brooklyn. For example, Manhattan Bank makes affordable housing loans available through the Community
Homebuyers Program ("CHBP") to assist in addressing
housing-related credit needs. The CHBP provides mortgage loans with such features as a low down payment
and flexible underwriting criteria.36 In addition, the
Chase
Community
Development
Corporation
("CCDC") is active in providing financing for low- and
moderate-income housing in Brooklyn. During 1994,
CCDC provided $9.9 million to finance the construction
of 53 new three-family houses in Brooklyn; $6.6 million
through the New York City Housing Authority Turnkey
Program to finance the construction of a 78 unit apartment building in Brooklyn; and $185,000 through the
HPD's Vacant Building Program to finance the rehabilitation of a 41 unit apartment building in Brooklyn.
35. Protestant maintains that the conclusions reached in the
Chase Order should not control consideration of the same issues in
this application. For example, Protestant maintains that the OCC's
fair lending examinations were unreliable because they involved
the examination of only a sample of loan files. In addition, Protestant maintains that Chase's organizational structure should be reexamined because a substantial number of Manhattan Bank's mortgage loans are sold on the secondary mortgage market, and, thus,
may not offer flexible underwriting options. The Board notes that
file sampling is a recognized examination methodology (see e.g.,
OCC Examination Bulletin 93-3, Examining for Residential Lending Discrimination (April 30, 1993)), and that banks are not required to maintain CRA- related loans in their portfolio. Furthermore, the Board notes that Manhattan Bank offers a variety of
mortgage products that offer flexible underwriting criteria, including, for example, the TAIL program. Finally, because many of the
issues raised by Protestant in this case regarding Chase's record are
similar or identical to the issues raised by Protestant in the past case
and considered less than four months ago, the Board believes that,
to the extent there has been no material change in circumstances,
the Board may, and should, rely on its previous findings.
36. During the first half of 1993, Manhattan Bank originated 140
CHBP loans totalling $17 million.
Legal Developments
As noted in the Chase Order, Manhattan Bank also
has implemented specific efforts to communicate with
and ascertain the credit needs of low- and moderateincome and minority residents within its delineated communities. These outreach and ascertainment efforts have
led to a number of new products, many of which are
housing related. For example, to assist the housingrelated needs of low- and moderate-income residents of
Brooklyn, Chase offers a 97 percent loan-to-value mortgage product and a "Qualifier" mortgage with reduced
loan-to-value requirements and flexible income and debt
underwriting criteria. Chase also has established a mortgage settlement assistance program, which provides installment loans to help borrowers finance closing costs.
As previously noted, Manhattan Bank's branch locations
also provide reasonable access to most segments of its
delineated community, and six of Manhattan Bank's
16 Brooklyn branches are in low- to moderate-income
census tracts.
D. HMDA Data
The Board has carefully reviewed 1993 and preliminary
1994 HMDA data for Manhattan Bank and Connecticut
Bank,37 including the relevant mortgage subsidiaries and
CUSCS, for Brooklyn and Binghamton, New York, and
Bridgeport, Connecticut, in light of Protestant's comments.38 These data generally indicate that Chase has
continued to provide housing-related loans to low- and
moderate-income and minority neighborhoods throughout the communities served by these subsidiaries.39 For
example, Chase's preliminary 1994 HMDA data for
Brooklyn indicate an increase in the number of applications received from, and loan originations to, minori-
37. Protestant maintains that Chase has incorrectly prepared its
1994 Loan Application Register, because the property location for
approximately 16,000 of the entries is listed as "N/A". Chase states
that these entries represent transactions involving properties located outside a Metropolitan Statistical Area or applications in
which the address of the property was not provided by the applicant, such as prequalification applications. Protestant also objects
to being provided HMDA data in written rather than electronic
form and for CMMC on an aggregate basis. Based on all the facts
of record, including information provided by Chase, it appears that
the property location entries listed as "N/A" were appropriate and
that the data have been provided to Protestant in accordance with
applicable regulations.
38. The Board previously has considered 1993 HMDA data and
preliminary 1994 HMDA data reported by Chase for the South
Bronx and Manhattan and, for the reasons discussed in the Chase
Order, does not believe that these data would warrant denial of this
proposal.
39. The 1993 HMDA data does not include data reported by Troy
& Nichols, which Chase acquired in 1993. The 1994 HMDA data
include data for Troy & Nichols and American Residential, both of
which now are part of CMMC.
889
ties.40 In addition, these data indicate an increase in the
number of loan applications from, and originations in,
minority census tracts.41 Preliminary 1994 HMDA data
also indicate that Chase received an increased number of
applications from the Bushwick/Brownsville sections of
Brooklyn. HMDA data for Binghamton, New York, and
Bridgeport, Connecticut, indicate that Chase has assisted
in meeting the housing-related credit needs of minorities
in these communities. For example, these data indicate
that, in Binghamton, the percentage of applications received by Chase from African Americans in 1993 exceeded the percentage received by lenders in the aggregate during 1993 42 Similarly, in Bridgeport, these data
indicate an increase from 1993 to 1994 in the number of
applications received from minorities, as well as an
increase in the number of loan originations to minorities
during the same period.
However, HMDA data for Chase and its mortgage
subsidiaries in its delineated communities also indicate
some disparities in the rate of loan originations, denials,
and applications by racial group and income levels. The
Board is concerned when an institution's record indicates disparities in lending to minority applicants and
believes that all banks are obligated to ensure that their
lending practices are based on criteria that assure not
only safe and sound lending, but also equal access to
credit by creditworthy applicants regardless of race. The
Board recognizes, however, that HMDA data alone provide an incomplete measure of an institution's lending in
its community, and have limitations that make the data
an inadequate basis, absent other information, for concluding that an institution has engaged in illegal discrimination in making lending decisions.
OCC examiners found no evidence of prohibited discrimination or other illegal credit practices during the
most recent CRA performance examinations of Manhattan Bank and Connecticut Bank. The examination also
found no evidence of practices intended to discourage
applications for the types of credit listed in the banks'
CRA statements. Furthermore, Chase has initiated a
number of steps designed to insure the equal treatment
of low- and moderate-income and minority borrowers by
all Chase entities. These efforts are discussed in detail in
the Chase Order and include a second review program, a
40. Applications received from African Americans in Brooklyn
increased from 296 in 1993 to 403 in 1994, and originations
increased from 221 to 256 during this period.
41. During 1994, Chase received 387 applications from minority
census tracts in Brooklyn, and originated 228 HMDA loans in these
tracts. This reflects an increase from the 351 applications and 222
originations reported for 1993 in minority census tracts.
42. In addition, the percentage of applications from African
Americans that Chase received during 1994 in Binghamton exceeded the percentage of African Americans in the Binghamton
Metropolitan Statistical Area.
890
Federal Reserve Bulletin • September 1995
periodic analysis of HMDA data, a comparative mortgage loan file review, special advertising programs directed toward minority borrowers in certain geographical areas, and a "mystery shopper" program.43
Conclusion Regarding Convenience and Needs
Considerations
The Board has carefully considered all the facts of
record, including all comments received, in reviewing
the convenience and needs factors under the BHC Act. 44
Based on a review of the entire record of performance,
including information submitted by both Chase and Protestant in connection with this proposal and the application in the Chase Order, and for the reasons discussed in
this order and the Chase Order, the Board believes that
the efforts of Chase and its subsidiaries to help meet the
credit needs of all segments of their communities, including low- and moderate-income neighborhoods, and
their compliance with fair lending laws, are consistent
with approval of this application.45
43. Protestant alleges that certain programs offered by Manhattan
Bank that permit customers to avoid transaction or account fees by
maintaining minimum balances in accounts with Manhattan Bank
or affiliated entities, including mutual funds advised by Manhattan
Bank, may violate the fair lending laws and the anti-tying restrictions of Regulation Y (12 C.F.R. 225.7). However, Protestant has
presented no evidence suggesting that such programs have a discriminatory effect on any group protected by the fair lending laws.
The Board also notes that recent amendments to Regulation Y
permit a bank to offer discounts to customers who maintain a
combined minimum balance in products specified by the bank. See
12 C.F.R. 225.7(b)(4).
44. The Board has concluded that a number of issues considered
by the Board in the Chase Order and raised again by the Protestant
in this proposal do not warrant denial. For example, Protestant
maintains that Chase's CRA performance and fair lending compliance should be reviewed on a nationwide basis. For the reasons
discussed in the Chase Order, the Board believes that the scope of
consideration for Chase's CRA-related activities is consistent with
the requirements of the CRA. The Board also believes that the
scope of review accorded Protestant's fair lending issues is appropriate in light of all the facts of record. Protestant continues to
allege that American Residential has violated fair lending laws in
light of its 1993 HMDA data. The Board noted in the Chase Order
that these allegations predated Chase's acquisition of American
Residential and that, as a subsidiary of CMMC, American Residential is now subject to the fair lending and HMDA compliance
policies and procedures generally applicable to all CMMC units. In
addition, as subsidiaries of a national bank, CMMC and all its
lending subsidiaries are subject to the supervisory authority of the
OCC.
45. Protestant suggests a number of grounds for delaying consideration of this proposal, including the need for additional information from Chase on its small business lending and certain specialized mortgage lending programs, resubmission of Chase's 1994
HMDA data in light of a programming error discovered in American Residential's reporting of its 1993 HMDA data (which Chase
states has been corrected), and new CRA and fair lending examinations for Chase's banking and nonbanking subsidiaries (the most
Other Considerations
The Board also concludes that the financial46 and managerial resources and future prospects47 of Chase and its
bank subsidiaries, and other supervisory factors the
Board must consider under the BHC Act, are consistent
with approval of this proposal.
Chase also has filed notice pursuant to section 4(c)(8)
to acquire MF Service and thereby provide administrative services to closed-end investment companies48 and
mutual funds.49 The administrative services MF Service
provides to closed-end funds and mutual funds include
recent examinations were determined by the OCC at the time of the
Chase Order to be current). The Board is required by the BHC Act
and the Board's rules to act on applications submitted under sections 3 and 4 of the BHC Act within specified time periods. Based
on all the facts of record, including reasons discussed in the Chase
Order, the Board concludes that the record is sufficient to act on
this application and these notices at this time and that delay or, in
the alternative, denial on the grounds of informational insufficiency
of this application and these notices is not warranted.
46. Protestant argues that a number of recent publicly announced
events raise adverse financial considerations, including statements
by investors and others that Chase's stock is undervalued, reductions in first quarter 1995 earnings, proposed branch sales, Chase's
international activities, employment of a cost cutting consultant,
currency trading and swap activities, and certain proposed activities
and transactions. The Board has carefully reviewed these events in
light of the overall financial condition of Chase and its subsidiaries.
Based on all the facts of record, including reports of examination
and other supervisory information from Chase's primary federal
supervisors, the Board does not believe that these matters warrant
denial of the proposal.
47. Protestant alleges that certain actions taken by the management of Chase reflect adversely on the managerial resources of
Chase. These include investing in a Norwegian company doing
business with Libya, failure of Manhattan Bank to reimburse a
couple for an unauthorized ATM withdrawal, failure of Manhattan
Bank to provide proper disclosure to a bank customer in connection
with the sale of an uninsured investment product, release of a press
statement that Protestant maintains inflates the number of mortgage
loans made by Chase to minorities, and the proposed investment in
an insurance company by a limited partnership affiliated with
Chase. The Board has noted that these actions involve, for the most
part, individual complaints or allegations that may be addressed
through the supervisory authority of the appropriate federal supervisor if such action is appropriate. The Board has carefully reviewed these matters in light of the overall performance record of
the management of Chase. The Board concludes, based on all the
facts of record, including reports of examination assessing the
managerial resources and policies of Chase and its subsidiaries,
that these isolated events, even if assumed to be true, do not
warrant denial of this proposal. Protestant also has raised managerial and supervisory matters with respect to UST. These issues have
been reviewed by the Board and are discussed in the U.S. Trust
Order.
48. The Board has by regulation authorized bank holding companies to sponsor, organize, and manage closed-end investment companies pursuant to 12 C.F.R. 225.25(b)(4).
49. MF Service would not act as a sponsor of any new mutual
fund. In addition, MF Service would not provide any administrative
services to the Vista Funds or to mutual funds the shares of which
Legal Developments
computing the fund's net asset value and performance
data, coordinating communications and activities between the investment advisor and the other service providers, accounting and recordkeeping, disbursing payments for the fund's expenses, providing office space for
the fund, and preparing and filing tax and regulatory
reports for the fund. 50 The Board previously has determined that these activities are closely related to banking,
and MF Service has committed to conduct these activities subject to the prudential and other limitations previously established by the Board.51 Under these circumstances, and for the reasons discussed in Mellon, the
Board concludes that the administrative activities for
mutual funds proposed to be provided by MF Service 52
are not prohibited by the Glass-Steagall Act
(12 U.S.C. §§ 221a and 377) and are permissible nonbanking activities for bank holding companies. 53
In order to approve this notice, the Board also must
find that the performance of the proposed activities by
are sold or marketed primarily to customers of Chase's subsidiary
banks.
50. A list of the proposed administrative services is included in
the Appendix.
51. See State Street Boston Corporation, 81 Federal Reserve
Bulletin 297 (1995) ("State Street")-, Mellon Bank Corporation, 79
Federal Reserve Bulletin 626 (1993) ("Mellon"). In particular, the
distributor of the mutual funds would not be affiliated with MF
Service or Chase, and neither Chase nor MF Service would be
involved in the distribution of the shares of any mutual fund. MF
Service would not be involved in the promotion or sale of the
shares of any mutual fund, and would not engage in any marketing,
sales or advertising activities relative to any mutual fund. MF
Service would provide the distributor of a mutual fund with performance and portfolio data, and MF Service would review marketing
materials prepared by the distributor for the sole purpose of ensuring compliance with all pertinent regulatory requirements. Chase
would not acquire for its own account more than 5 percent of the
shares of any mutual fund administered by MF Service, and Chase
has committed not to provide administrative services to any mutual
fund to which it or any of its affiliates provides advisory services.
52. Chase also seeks approval for MF Service to provide telephone shareholder services ("telephone services") as an additional
administrative service through a toll-free 800 number specific to
each mutual fund family. Telephone services operators would provide a variety of information including general share holdings and
valuation information to current shareholders and will mail a prospectus upon the request of existing and potential new shareholders. Telephone services operators would not solicit callers to purchase shares in particular mutual funds. Substantive questions
regarding mutual fund performance or strategies would be referred
to specific mutual fund distributors or investment advisors. In this
light, the telephone services are primarily ministerial or clerical in
nature and do not involve Chase in the distribution of mutual funds.
Based on all the facts of record, and Chase's representations with
regard to these telephone services, the Board believes that the
proposed additional telephone services are consistent with the
activities that the Board approved in State Street and Mellon.
53. Chase proposes to have limited director and/or employee
interlocks with certain mutual funds to which it provides administrative services. These interlocks must be in accordance with the
limitations contained in Mellon and State Street.
891
MF Service "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 previously has determined that the provision of the proposed administrative services within certain parameters is not likely to result in the types of
subtle hazards at which the Glass-Steagall Act is aimed
or any other adverse effects. 54 The Board believes that
the performance of the proposed activities by MF Service can reasonably be expected to produce benefits to
the public such as a wider range of products, increased
efficiency, and greater convenience for Chase's customers. Based on all the facts of record, the Board finds that
the public benefits of MF Service's proposed activities
outweigh any adverse effects and, therefore, the activities are a proper incident to banking for purposes of
section 4(c)(8) of the BHC Act. 55
Request for a Hearing
Protestant has requested that the Board hold a public
meeting or hearing on the section 3 application to clarify
factual disputes and present certain facts as part of the
record.56 Section 3(b) of the BHC Act does not require
54. See Mellon. Protestant disagrees with this conclusion and
maintains generally that Chase's acquisition of MF Service would
result in a violation of the BHC Act and the Glass-Steagall Act.
For the reasons discussed above and in Mellon, the Board concludes that, subject to the conditions contained in this order, consummation of the proposed transaction is consistent with the BHC
Act and the Glass-Steagall Act. Protestant also alleges that information submitted by Chase on the activities of MF Service conflict
with information in press releases submitted by Protestant. Based
on all the facts of record, including a review of the relevant
documents, the Board does not believe that the information in the
documents is inconsistent.
55. Chase also has filed notice pursuant to section 4(c)(8) to
acquire USTWY and engage in organizing and providing administrative services to limited liability companies ("LLCs") established
pursuant to Wyoming law to operate as private investment companies for institutional investors and high-net-worth individuals. Protestant argues that USTWY's activities violate the BHC Act and the
Glass-Steagall Act. Chase proposes to transfer this company immediately to Manhattan Bank and conduct these activities pursuant to
the OCC's rules governing operating subsidiaries of banks. The
Board's regulations provide that a national bank controlled by a
bank holding company may acquire securities of a company in
accordance with the rules of the OCC. The Board has determined to
approve this notice on the basis that USTWY will be transferred to
Manhattan Bank and that Chase will conduct these activities in
accordance with the regulations of and conditions imposed by the
OCC upon its acquisition. In the event that Chase does not transfer
USTWY to Manhattan Bank immediately following the acquisition
of these shares, Chase has committed that it will conform the
activities of USTWY to the requirements of the BHC Act.
56. A substantial portion of the factual disputes alleged by
Protestant, including issues relating to the alleged disparate treat-
892
Federal Reserve Bulletin • September 1995
the Board to hold a public hearing or meeting on an
application unless the appropriate supervisory authority
for the bank to be acquired makes a timely written
recommendation of denial of the application.57 No supervisory agency has recommended denial of the proposal.
Generally, under its rules, the Board may, in its discretion, hold a public hearing or meeting on an application
to clarify factual issues related to the application and to
provide an opportunity for testimony, if appropriate.
12 C.F.R. 262.3(e) and 262.25(d). In the Board's view,
all interested parties have had ample opportunity to
submit their views, and substantial written submissions
have been received.58 Protestant's request fails to demonstrate why its substantial written submissions do not
adequately present its allegations or why a public hearing or meeting is otherwise warranted in this case. 59
ment of borrowers resulting from Chase's specialized lending
operations and the alleged pre-screening by developers in housing
projects involving Chase, were considered in the Chase Order and
for the reasons set forth in that order and incorporated herein, found
not to warrant a hearing or meeting. Other grounds cited by
Protestant for a hearing include the opportunity to contest Chase's
description of its small business activities, to obtain information on
various Chase lending activities, to present oral testimony on
alleged improper disclosures made in connection with the sale of an
uninsured investment product, and to determine whether Chase has
integrated the CRA into its overall business plans. Protestant also
has requested a hearing on the grounds that the acquisition of MF
Service by Chase would create interlocks between Chase and
mutual funds that are impermissible under the Glass-Steagall Act.
57. Under section 4 of the BHC Act, a protestant is not entitled to
a hearing on every notice, but only when there are issues of
material fact in dispute. See Connecticut Bankers Association v.
Board of Governors, 627 F.2d 245, 251 (D.C. Cir. 1980). After
review of the record in this case, the Board has concluded that there
are no material issues of fact in dispute and that the issues raised by
Protestant relate principally to interpretations of statutory provisions and conclusions of law and fact that must be made by the
Board. In light of this, and the fact that Protestant has had an
opportunity to comment and has submitted substantial written
comments, the Board does not believe that a public hearing or
meeting regarding this matter would be useful or appropriate.
58. Protestant alleges that discussions between Chase and Board
staff during the processing of this proposal have violated the
Board's processing procedures. These procedures state that, after
the receipt of a protest, System staff should refrain from discussing
issues raised by the protest directly with the applicant or protestant
without first notifying the other, so that all parties may have an
opportunity to participate in the discussion. The record indicates
that Protestant has raised new issues throughout the processing of
this proposal. When issues were raised by the Protestant, discussions by staff with Chase on these issues were limited to requests
for information needed to clarify the record, and the information
was promptly provided to Protestant. Moreover, Protestant has
been given the opportunity to comment on these issues, and has in
fact presented substantial submissions that have been considered
part of the record in this case. For these reasons, and based on all
the facts of record, the Board does not believe that Protestant's
comments warrant denial of this proposal.
59. Protestant's request does not identify the evidence Protestant
would present to clarify factual issues or explain why written
Moreover, after a careful review of all the facts of
record, the Board concludes that Protestant's request
disputes the weight that should be accorded to, and the
conclusions that may be drawn from, the existing facts
of record, or disputes facts that are not material to the
Board's decision. For these reasons, and based on all the
facts of record, the Board has determined that a public
meeting or hearing is not necessary to clarify the factual
record in this application, or otherwise warranted in this
case. Accordingly, Protestant's request for a public hearing or meeting on this application is denied.
Conclusion
Based on the foregoing and all the facts of record,
including all of Chase's commitments and representations, and subject to all the terms and conditions set forth
in this order, the Board has determined that the section 3
application and the section 4 notice with regard to MF
Service should be, and hereby are, approved.60 The
Board's determination is subject to all the conditions set
forth in Regulation Y, including those in sections 225.7
and 225.23(b)(3) of Regulation Y (12 C.F.R. 225.7 and
225.23(b)(3)), 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
presentations are insufficient. The Board's Rules require that a
hearing request must "include a statement of why a written presentation would not suffice in lieu of a hearing, identifying specifically
any questions of fact that are in dispute and summarizing the
evidence that would be presented at a hearing." 12 C.F.R. 262.3(e).
Protestant contends that this rule unfairly penalizes a requestor
because compliance would provide the basis for concluding that
written submissions would suffice. The Board believes that this rule
provides a reasonable means to assist the Board in determining
whether factual disputes cannot be addressed through written submissions.
60. Protestant has criticized Chase's record with respect to the
number of minorities in top management and on the board of
directors. In this regard, the Board notes that because Manhattan
Bank employs more than 50 people, serves as a depository of
government funds, and acts as agent in selling or redeeming U.S.
savings bonds and notes, it is required by Department of Labor
regulations to:
(i) File annual reports with the Equal Employment Opportunity
Commission ("EEOC"); and
(ii) Have in place a written affirmative action compliance program which states its efforts and plans to achieve equal opportunity in the employment, hiring, promotion, and separation of
personnel.
See 41 C.F.R. 60-1.7(a), 60-1.40. The Board notes that, pursuant to
Department of Labor regulations, Chase, as the parent of Manhattan Bank, also is required to file an annual report with the EEOC
covering all employees in its entire corporate structure.
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Board's regulations and orders issued thereunder. The
Board's decision is specifically conditioned on Chase's
compliance with all the commitments and representations made in connection with this application and the
notices, including the commitments and conditions discussed in this order. The commitments and conditions
relied on in reaching this decision shall be 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.
The acquisition of UST's banking subsidiary shall not
be consummated before the fifteenth calendar day following the effective date of this order, and the acquisition of the bank and nonbank subsidiaries shall not be
consummated later than three months after the effective
date of this order, unless such period is extended for
good cause by the Board or by the Federal Reserve Bank
of New York, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 24, 1995.
Voting for this action: Chairman Greenspan, and Governors
Kelley, Lindsey, Phillips, and Yellen. Absent and not voting: Vice
Chairman Blinder.
WILLIAM W. WILES
Secretary of the Board
Appendix
List of Administrative Services
(1) Maintaining and preserving the records of the fund,
including financial and corporate records;
(2) Computing net asset value, dividends, performance
data and financial information regarding the fund;
(3) Furnishing statistical and research data;
(4) Preparing and filing with the SEC and state securities
regulators registration statements, notices, reports and
other material required to be filed under applicable laws;
(5) Preparing reports and other informational materials
regarding the fund including proxies and other shareholder communications and reviewing prospectuses;
(6) Providing legal and regulatory advice in connection
with its other administrative services;
(7) Providing office facilities and clerical support for the
fund;
(8) Developing and implementing procedures for monitoring compliance with regulatory requirements and
compliance with the fund's investment objectives, policies, and restrictions as established by the fund's board;
(9) Providing routine fund accounting services and liaison with outside auditors;
(10) Preparing and filing tax returns;
893
(11) Reviewing and arranging for payment of the fund's
expenses;
(12) Providing communication and coordination services
with regard to the fund's investment advisor, transfer
agent, custodian, distributor and other service organizations that render recordkeeping or shareholder communication services;
(13) Reviewing and providing advice to the distributor,
the fund and investment advisor regarding sales literature and marketing plans to assure regulatory compliance;
(14) Providing information to the distributor's personnel
concerning the fund's performance and administration;
(15) Participation in seminars, meetings, and conferences designed to present information to brokers and
investment companies, but not in connection with the
sale of shares of the funds to the public, concerning the
operations of the funds, including administrative services provided by MF Service to the funds;
(16) Assisting existing funds in the development of
additional portfolios;
(17) Providing reports to the fund's board with regard to
its activities; and
(18) Providing telephone shareholder services through a
toll-free 800 number.
U.S. Trust Corporation
New York, New York
Order Approving the Formation of a Bank Holding
Company, Merger of Banks, Establishment of
Branches, Membership in the Federal Reserve System
and Notice to Engage in Nonbanking Activities
U.S. Trust Corporation ("U.S. Trust"), a bank holding
company within the meaning of the Bank Holding Company Act ("BHC Act"), United States Trust Company
of New York ("USTNY"), New USTC Holdings Corporation ("New Holdings"), and New U.S. Trust Company
of New York ("New USTNY"), all of New York, New
York (collectively "Applicants"), have filed applications
under section 3 of the BHC Act (12 U.S.C. § 1842),
section 18(c) of the Federal Deposit Insurance Act
(12 U.S.C. § 1828(c)) ("Bank Merger Act"), sections 9
and 25 of the Federal Reserve Act (12 U.S.C. §§ 321 and
601), 1 and notices under section 4 of the BHC Act
(12 U.S.C. § 1843), 2 in connection with the corporate
reorganization of U.S. Trust.3 The proposed internal
1. These applications are described in Appendix A.
2. The nonbanking subsidiaries to be acquired by New Holdings
are listed in Appendix B.
3. As part of this proposal, the 401 (k) Plan and Employee Stock
Option Plan of USTNY and affiliated companies ("Notificant")
have filed a notice under the Change in Bank Control Act
894
Federal Reserve Bulletin • September 1995
reorganization is a multi-step transaction in which U.S.
Trust would retain ownership of two nonbank subsidiaries and the securities processing business of USTNY,
and a new holding company (New Holdings) would own
all the remaining subsidiaries of U.S. Trust.4
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(60 Federal Register 16,139 (1995)). As required by the
Bank Merger Act, reports on the competitive effects of
the merger were requested from the United States Attorney General and the Federal Deposit Insurance Corporation. The time for filing comments has expired, and the
Board has considered the applications and notices and
all comments received in light of the factors set forth in
the BHC Act, the Bank Merger Act, and the Federal
Reserve Act.
New Holdings is a non-operating company formed for
the purpose of acquiring certain banking and nonbanking
subsidiaries of U.S. Trust. U.S. Trust, with total consolidated assets of $3 billion, controls three depository institutions in New York, New York; Dallas, Texas; and
Los Angeles, California.5 Based on all the facts of
record, including the fact that this transaction constitutes
a corporate reorganization, the Board believes that consummation of this proposal would not have a significantly adverse effect on competition or the concentration
of banking resources in any relevant banking market.
Accordingly, the Board concludes that competitive considerations are consistent with approval.6
Convenience and Needs Considerations
In acting on the applications under the relevant banking
statutes, 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
(12 U.S.C. § 18170)) ("CIBC Act") to acquire 24.9 percent of the
voting shares of New Holdings (60 Federal Register 26,886
(1995)). Notificant currently is a shareholder of U.S. Trust, and
would receive shares of New Holdings as a result of the reorganization. Based on all the facts of record, the Board hereby determines
not to disapprove this CIBC Act notice.
4. U.S. Trust proposes to then merge with The Chase Manhattan
Corporation, New York, New York ("Chase"), in a transaction that
will be considered by the Board in a separate order. See Chase
Manhattan Corporation, 81 Federal Reserve Bulletin 883 (1995).
5. Asset data are as of December 31, 1994.
6. The Board has determined that the interstate banking statutes
of Texas and California permit a New York bank holding company
to acquire banking organizations in these states. See State First
Financial Corporation, 73 Federal Reserve Bulletin 307 (1987)
(Texas) and Citicorp, 77 Federal Reserve Bulletin 325 (1991)
(California). Thus, consummation of this transaction is not barred
by section 3(d) of the BHC Act (12 U.S.C. § 1842(d)).
the federal financial supervisory agencies to encourage
financial institutions to help meet the credit needs of the
local communities in which they operate, consistent with
their safe and sound operation. 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 lowand moderate-income neighborhoods, consistent with
the safe and sound operation of such institution," and to
take that record into account in its evaluation of bank
holding company applications.7
In connection with these applications, the Board has
received comments from Inner City Press/Community
on the Move, Bronx, New York ("Protestant"), raising
issues regarding the CRA performance record of
USTNY. In particular, Protestant maintains that USTNY
has concentrated its mortgage lending in affluent, nonminority census tracts and provided an overall low level
of CRA-related investments in its local community. Protestant also has alleged that U.S. Trust's subsidiary thrift
in Florida (U.S. Trust Company of Florida Federal Savings Bank, Palm Beach, Florida, "USTFL") has generally failed to assist in meeting the credit needs, particularly the housing-related credit needs, of low- and
moderate-income residents in its local community.8
7. 12 U.S.C. § 2903.
8. Protestant also maintains that USTNY and USTFL have failed
to comply with requirements in the Home Mortgage Disclosure Act
(12 U.S.C. § 2801 et seq.) ("HMDA"), the Equal Credit Opportunity Act (15 U.S.C. § 1691 et seq.) ("ECOA"), and the Fair Housing Act (42 U.S.C. § 3601 et seq.) ("FHA") to report the race and
gender of borrowers receiving mortgage loans. Most of the mortgage applications of these institutions are received by telephone.
For written applications, these institutions request race and gender
information for government monitoring purposes, and these data
are reported unless an applicant elects not to provide race and
gender information as permitted by Regulations B and C. The
Board also notes that, contrary to Protestant's allegations, the FHA
does not require the reporting of race and gender data for home
mortgages.
Under regulations implementing the HMDA and ECOA, an
institution is specifically exempted from the requirement of recording the race, national origin or gender of an applicant when a
mortgage application is made entirely by telephone. See 12 C.F.R.
203, Appendix A, § V(D)(2) and Appendix B, § 1(B)(4); Official
Staff Commentary on Regulation B, F.R.R.S. f 6-197.6(3). The
Board does not believe that providing additional financial and tax
information to an institution after the telephone contact to verify
the information supplied by the applicant makes this exemption
inapplicable. Furthermore, an institution is not required to record
race and gender data under this exemption even if the telephone
applicant has an existing banking relationship with the institution.
For these reasons, the Board concludes that the reporting practices
with respect to the collection of race and gender used in mortgage
applications taken by USTNY and USTFL do not violate the
HMDA or ECOA and, in light of this conclusion, that Protestant's
request for a file review of mortgage applications of USTNY and
USTFL is not warranted.
Legal Developments
The Board has carefully reviewed the CRA performance records of U.S. Trust and its subsidiary depository institutions, all comments received regarding these
applications, U.S. Trust's responses to those comments,
and 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").9
Evaluation of CRA Performance
A. Examination Record 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
reports of these examinations will be given great weight
in the applications process. 10 The Board notes that
USTNY received a "satisfactory" rating from the Federal Reserve Bank of New York ("Reserve Bank") at its
most recent examination for CRA performance in September 1994 ("1994 USTNY Examination"), and
USTFL received a "satisfactory" rating from its primary
federal supervisor, the Office of Thrift Supervision
("OTS"), at its most recent examination for CRA performance in February 1995 ("1995 USTFL Examination").11 U.S. Trust's remaining two subsidiary banks
received "satisfactory" ratings from their primary federal supervisor in the most recent examinations of their
CRA performance.12
B. USTNY's Record of CRA Performance
Protestant maintains that USTNY's 1993 HMD A data
indicates that a substantial number of the bank's reported mortgage loans were made to borrowers in upperincome, non-minority census tracts and evidences noncompliance by USTNY with fair lending laws and the
purpose of the CRA. Protestant also alleges that USTNY
discourages applications from low- and moderateincome individuals through its underwriting criteria and
advertising. The Board has recognized that HMDA data
alone provide an incomplete measure of an institution's
lending in its community, and that these data have limitations that make that data an inadequate basis, absent
9. 54 Federal Register 13,742 (1989).
10. Id. at 13,745.
11. Protestant disagrees with the 1995 USTFL Examination and
has requested the OTS to review the procedures used and conclusions drawn in this examination.
12. U.S. Trust Company of California, N.A., Los Angeles, California ("USTCA"), received a "satisfactory" rating from the Office of the Comptroller of the Currency ("OCC") in August 1994,
and U.S. Trust Company of Texas N.A., Dallas, Texas ("USTTX"),
received a "satisfactory" rating from the OCC in March 1995.
895
other information, for conclusively determining that an
institution has engaged in illegal discrimination in making lending decisions. The Board has carefully reviewed
Protestant's allegations in this light and in light of all the
facts of record.
USTNY is a wholesale institution that specializes in
providing trust and banking services to institutional customers such as corporations, other types of institutions,
and high net worth individuals. USTNY does not engage
in residential mortgage lending (or provide other traditional retail credit products) and does not hold itself out
as a retail lender.13 Examiners found that the bank engages in mortgage lending only as an accommodation
for its existing customers or as a means of soliciting trust
and banking services from new customers on a referral
basis. The 1994 USTNY Examination also found that
the bank had adequate procedures to ensure compliance
with nondiscriminatory credit practices, and identified
no credit practices that were inconsistent with the substantive provisions of the antidiscrimination laws and
regulations or that were intended to discourage credit
applications.14
While the CRA does not require a bank to extend any
particular type of credit, an institution such as USTNY is
not relieved from having its performance record assessed
under the CRA. 15 USTNY has taken a number of steps
to help meet the credit needs of its community.
As part of its CRA-related activities, USTNY engages
in a variety of indirect lending activities to assist in
meeting the housing needs of low- and moderate-income
families in New York City.16 For example, the bank has
loaned $415,000 to the Neighborhood Housing Services
of New York, which offers programs to help rehabilitate
houses in low- and moderate-income neighborhoods.
Examiners also noted in the 1994 USTNY Examination
13. USTNY's advertisements and business strategy focus on
asset management and trust services for institutional customers
rather than soliciting customers for retail banking products.
14. Protestant also alleges that 1994 HMDA data for U.S. Trust's
California subsidiary (USTCA) and Texas subsidiary (USTTX)
show few loans to or applications from minorities in California and
Texas. The most recent CRA performance evaluations for both
banks noted that USTCA and USTTX are, like USTNY, wholesale
banks that focus on trust administration. In addition, examiners did
not find evidence of prohibited discriminatory or other illegal credit
practices.
15. See Continental Bank Corporation, 75 Federal Reserve Bulletin 304 (1989).
16. Protestant maintains that USTNY's delineation of its service
community is too narrow because it does not include all of New
York City and that USTNY does not make investments or grants in
the South Bronx or Upper Manhattan. The 1994 USTNY Examination concluded that the bank's delineation of its local community
complied with the requirements of the CRA and the regulations
thereunder and did not arbitrarily exclude low- and moderateincome areas. USTNY recently expanded its local community to
include the entire Borough of Manhattan.
896
Federal Reserve Bulletin • September 1995
that the bank has loaned $676,000 to the Community
Preservation Corporation's ("CPC") revolving credit facility, which finances the construction and rehabilitation
of low-income housing in New York City.
USTNY has also provided $623,000 in loans under
another CPC program to help refinance underlying mortgages on co-op apartment buildings in low- and
moderate-income areas in New York City. U.S. Trust has
indicated that an additional $416,000 has been committed to this program since the 1994 USTNY examination.
In addition, the bank invested $500,000 in the New York
Equity Fund's ("NYEF") 1992 Limited Partnership,
$500,000 in NYEF's 1993 Limited Partnership, and an
additional $1 million in NYEF's 1994 Limited Partnership. These funds are used by NYEF to leverage other
private and public sector financing and help rehabilitate
family and single room housing for low- and moderateincome individuals.
USTNY offers several other programs that provide
assistance to neighborhood and community organizations that are committed to improving their communities. In particular, the bank invested $250,000 in the
Non-Profit Facilities Fund, which provides term financing to non-profit organizations that otherwise would
have no financing options. USTNY has invested $25,000
in the Union Settlement Federal Credit Union, which
provides consumer banking services to East Harlem, a
low- and moderate-income community with limited
banking services.
The 1994 USTNY Examination also found that the
bank participated in small business lending programs.
For example, USTNY has committed $578,000 to the
New York Business Development Fund, which operates
a revolving credit facility that extends loans to small
businesses. In addition, while USTNY is not a direct
small business lender, examiners found that in 1993, the
bank purchased $11 million in Small Business Administration loan pools, generated from loans originated in
New York.
U.S. Trust has created the U.S. Trust Foundation
("Foundation") to administer its corporate contributions
program. Through the Foundation, the bank supports
not-for-profit community organizations involved in
housing, economic and community development to lowand moderate-income individuals and neighborhoods.
Examiners noted that the Foundation contributed
$143,000 to CRA-related organizations between May
1993 and the 1994 USTNY Examination.
planning, and trust and estate services, and USTFL does
not offer typical retail bank products, such as small
business loans, consumer installment loans, or credit
cards. Examiners found no evidence of prohibited discriminatory or other illegal credit practices. The 1995
USTFL Examination also disclosed no evidence of practices intended to discourage credit applications that were
not inherent in USTFL's focus on private banking activities for affluent customers, and determined that USTFL's
delineation of its community was reasonable.
Examiners concluded that USTFL addressed housing
credit needs by originating single-family residential
mortgage loans consistent with the needs identified in its
delineated communities. The thrift's loan volume, including the percentage of loans within its local communities, was considered reasonable by examiners. 17
USTFL also assists in meeting the housing credit needs
of low- and moderate-income borrowers through local
financial intermediaries. For example, USTFL has provided funding for a first-time homebuyers program sponsored by Collier County which includes the institution's
Naples community. This program provides low- and
moderate-income borrowers with interest free loans for
down payment and closing costs. USTFL also has purchased several loans, totalling over $400,000, that are
secured by property in Palm Beach County and originated by another institution under a program designed to
assist low- and moderate-income borrowers through
lower fees and flexible underwriting criteria. USTFL
plans to purchase an additional $1 million in loans made
under this program in 1995.
The 1995 USTFL Examination also noted that the
institution continually explores potential activities or
services that would help meet the credit needs of its local
communities. For example, USTFL has provided financial and managerial expertise to the Consumer Credit
Counseling Service of Palm Beach County. The institution also has supported minority business programs
within its local community, including the Minority Business Committee of Naples and the Latin-American Business and Professional Scholarship Program.
D. Conclusion Regarding Convenience and Needs
Factors
The Board has carefully considered the entire record,
including the comments filed in this case, in reviewing
the convenience and needs factors under the relevant
C. USTFL's Record of CRA Performance
The 1995 USTFL Examination notes that USTFL engages in private banking activities designed primarily to
meet the needs of its trust customers. The institution's
business strategy focuses on asset management, financial
17. The 1995 USTFL examination noted that residential mortgage loan volume, which represented 9.6 percent of average assets
during 1994, was slightly below that of other savings associations
of similar size. Nevertheless, examiners noted that USTFL consistently met the regulatory requirements of mortgage lending under
the Qualified Lender Test.
Legal Developments
banking statutes. Based on a review of the entire record
of performance, including information provided by Protestant and U.S. Trust, and the CRA performance examinations and other information obtained through the supervisory process, the Board believes that the efforts of
U.S. Trust to help meet the credit needs of all segments
of the communities served by its subsidiary banks, including low- and moderate-income neighborhoods, are
consistent with approval. For these reasons, and based
on all the facts of record, the Board concludes that
convenience and needs considerations, including the
CRA performance records of the companies and banks
involved in these proposals, are consistent with approval
of these applications.
Other Considerations
The Board has concluded that the financial18 and managerial19 resources and future prospects of the holding
companies and their subsidiaries are consistent with
18. Protestant has objected to U.S. Trust's request for certain
approvals from the Board relating to its reorganization, including
requests to reduce its capital stock; to effect a material change in its
business under Regulation H (12 C.F.R. 208 et seq.); and to allow
New USTNY to pay dividends in the future out of net profits
generated after the reorganization and exclusive of charges associated with the reorganization. Protestant has provided no material
evidence to support its objections. Based on all the facts of record,
including reports of examinations, financial information provided
by U.S. Trust and the overall nature of the proposed reorganization,
the Board has determined that U.S. Trust's requests should be
approved, provided that the Reserve Bank may restrict the payment
of dividends by New USTNY during the first three years after
consummation of the reorganization.
19. Protestant contends that the recent removal of USTNY as the
co-executor of the Doris Duke estate by a Manhattan Surrogate
Court judge warrants delay or denial of this proposal. Protestant
also maintains that USTNY breached its fiduciary duty and engaged in unsafe and unsound practices with respect to the Doris
Duke estate. Protestant argues that these matters reflect so adversely on the management of USTNY as to warrant denial of this
proposal. The Board notes that this matter is based on determinations of state law and that review of the matter is pending before
the Supreme Court of the State of New York. The Board also notes
that the proposal under consideration involves a sale of non-core
businesses by U.S. Trust and a reorganization of existing operations
of U.S. Trust that should permit management of U.S. Trust to focus
on its core businesses, which includes providing trust related services. Based on all the facts, including a review of the Surrogate
Court's opinion, USTNY's policies and procedures, USTNY's
managerial resources, management's record of performance, relevant reports of examination, and other supervisory information, the
Board concludes that the managerial resources of Applicants are
consistent with approval of this proposal and that delay of Board
action on the reorganization represented by this proposal until the
matter is resolved by the courts is not warranted. The Board has
sufficient supervisory authority to address, as appropriate, any
issues under the federal banking laws that may be raised by final
adjudication of this matter.
897
approval.20 Other supervisory factors that the Board
must consider under section 3 of the BHC Act, the Bank
Merger Act, and the Federal Reserve Act, are also consistent with approval of this proposal.21
New Holdings also has filed notice, pursuant to section 4(c)(8) of the BHC Act, to operate a savings association, and engage in trust company, community development, investment advisory, securities brokerage and
riskless principal activities. The Board has determined
by regulation that the operation of a savings association,
and that trust company, community development, investment advisory, and securities brokerage activities are
closely related to banking for purposes of section 4(c)(8)
of the BHC Act. 22 The Board also has determined by
order that, subject to a number of prudential limitations
that address the potential for conflicts of interests, unsound banking practices, and other adverse effects, the
proposed riskless principal activities are so closely related to banking as to be a proper incident thereto within
20. Protestant has requested denial of these applications and
notices based on several supervisory matters including the financial
condition of one of U.S. Trust's bank subsidiaries and allegations of
violation of section 23A of the Federal Reserve Act
(12 U.S.C. § 371c). The Board has carefully considered these comments in light of the facts of record, including confidential reports
of examination, supervisory information, and financial information,
and the Board concludes that these comments do not warrant denial
of the applications and notices.
The Board also has considered Protestant's contention that operation by U.S. Trust of U.S. Trust Company of Wyoming, Cody,
Wyoming ("USTWY"), and Mutual Funds Service Company, Boston, Massachusetts ("MF Service"), required prior Board approval
and violated the BHC Act and the Glass-Steagall Act. As part of
the proposed reorganization, U.S. Trust is divesting all ownership
and control of USTWY and MF Service. The Board has considered
Protestant's comments, U.S. Trust's responses, the length of time
these activities were conducted, and the proposed divestiture of
USTWY and MF Service. Based on all the facts of record, the
Board has determined that these allegations do not warrant denial
of the applications and notices.
21. Protestant contends that the proxy materials ("Statement")
provided to U.S. Trust shareholders in connection with the March
1995 vote to approve the proposed acquisition of U.S. Trust by
Chase materially misled these shareholders about their rights as
Chase shareholders to call a special meeting, because Chase's
board of directors later eliminated this right by amending the Chase
by-laws in May 1995. The Statement specifically stated, however,
that the board of directors of Chase has authority to alter, amend or
repeal the by-laws of Chase, and this by-law repeal does not appear
to have violated any applicable covenant of Chase contained in the
Agreement and Plan of Merger between U.S. Trust and Chase.
Moreover, the Board notes that the Securities and Exchange Commission has the necessary regulatory authority under its rules,
including Rule 14a-9 implementing Section 14 of the Securities
Exchange Act of 1934, to investigate and redress any materially
false or misleading statement contained in the Statement.
22. See 12 C.F.R. 225.25(b)(3), (b)(4), (b)(6), (b)(9), and (b)(15).
898
Federal Reserve Bulletin • September 1995
the meaning of section 4(c)(8) of the BHC Act. 23 Moreover, the Board has previously approved applications by
U.S. Trust to engage in all the proposed activities. New
Holdings has committed that it will conduct these activities in accordance with the Board's regulations and
orders approving these activities for bank holding companies.
In order to approve these applications and notices, the
Board also must determine that the performance of the
proposed activities by U.S. Trust's nonbanking subsidiaries "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). This reorganization has been structured to facilitate the sale of the
securities processing business of U.S. Trust to Chase.
This divestiture will give U.S. Trust the opportunity to
focus on its private banking, asset and investment management, corporate trust and agency and special fiduciary services businesses, and thereby provide services
more economically and efficiently. The record in this
case indicates that there are numerous providers of these
nonbanking services, and 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. 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.
Request for a Hearing
Protestant has requested that the Board hold a public
meeting or hearing on these applications to clarify factual disputes.24 Protestant also believes that testimony is
needed to present certain facts as part of the record.25
23. See Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989); J. P. Morgan & Company Incorporated,
76 Federal Reserve Bulletin 26 (1990).
24. Protestant argues that factual disputes exist on several matters, including the percentage of mortgages made to U.S. Trust's
existing customers, the size and relevance of projects included in
USTNY's CRA program, and the role of USTNY's delineated
community in determining which projects are eligible for the
bank's CRA-related investments.
25. For example, Protestant contends that testimony is necessary
to show how USTNY excludes low- and moderate-income and
racial groups from the bank's marketing plan, to present evidence
concerning particular projects and programs that are part of
USTNY's CRA activities, to elicit evidence from U.S. Trust staff
on how U.S. Trust markets and processes mortgage applications,
and to challenge USTNY's representation that almost all its mortgage applications are received by telephone.
Section 3(b) of the BHC Act does not require the Board
to hold a public hearing or meeting on an application
unless the appropriate supervisory authority for the bank
to be acquired makes a timely written recommendation
of denial of the application. No supervisory agency has
recommended denial of the proposal.
Generally, under its rules, the Board may, in its discretion, hold a public hearing or meeting on an application
to clarify factual issues related to the application and to
provide an opportunity for testimony, if appropriate.
12 C.F.R. 262.3(e) and 262.25(d). In the Board's view,
all interested parties have had ample opportunity to
submit their views, and substantial written submissions
have been received. Protestant's request fails to demonstrate why its substantial written submissions do not
adequately present its allegations or why a public hearing or meeting is otherwise warranted.26 Moreover, after
a careful review of all the facts of record, the Board
concludes that Protestant's request disputes the weight
that should be accorded to, and the conclusions that may
be drawn from, the existing facts of record, or disputes
facts that are not material to the Board's decision. For
these reasons, and based on all the facts of record, the
Board has determined that a public meeting or hearing is
not necessary to clarify the factual record in these applications, or otherwise warranted in this case. Accordingly, Protestant's request for a public hearing or meeting on these applications is denied.
Conclusion
Based on the foregoing, including the commitments
made to the Board by Applicants in connection with
these applications and notices, and in light of all the
facts of record, the Board has determined that these
applications and notices should be, and hereby are, approved. The Board's approval is specifically conditioned
on compliance by Applicants with all commitments
made in connection with these applications and notices
as well as the conditions discussed in this order and in
the above-referenced orders.
The Board's determinations as to the nonbanking activities to be conducted by New Holdings are subject to
all the conditions in the Board's Regulation Y, including
those in sections 225.7 and 225.23(b)(3) (12 C.F.R.
225.7 and 225.23(b)(3)), and to the Board's authority to
require such modification or termination of the activities
26. Protestant's request does not identify the evidence it would
present to clarify factual issues or explain why written presentations are insufficient. The Board's Rules require that a hearing
request must "include a statement of why a written presentation
would not suffice in lieu of a hearing, identifying specifically any
questions of fact that are in dispute and summarizing the evidence
that would be presented at a hearing." 12 C.F.R. 262.3(e).
Legal Developments
of a holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with, or to
prevent evasion of, the provisions and purposes of the
BHC Act and the Board's regulations and orders issued
thereunder. 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 and decision, and as such may be
enforced in proceedings under applicable law.
The acquisition of U.S. Trust's subsidiary banks shall
not be consummated before the fifteenth calendar day
following the effective date of this order, and the banking and the nonbanking transactions shall not be consummated later than three months following the effective
date of this order, unless such period is extended for
good cause by the Board or by the Federal Reserve Bank
of New York, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 24, 1995.
Voting for this action: Chairman Greenspan, and Governors
Kelley, Lindsey, Phillips, and Yellen. Absent and not voting: Vice
Chairman Blinder.
WILLIAM W. WILES
Secretary of the Board
Appendix A
U.S. Trust Corporation ("U.S. Trust"), United States
Trust Company of New York ("USTNY"), New USTC
Holdings Corporation ("New Holdings"), and New
U.S. Trust Company of New York ("New USTNY"), all
of New York, New York, have filed the following
applications to effect the internal reorganization:
(1) New Holdings to become a bank holding company
by acquiring New USTNY; U.S. Trust Company of
Texas, N.A., Dallas, Texas; U.S. Trust Company of
California, N.A., Los Angeles, California; and USTLPO
Corporation, Wilmington, Delaware, pursuant to section
3(a)(1) of the BHC Act;1
(2) USTNY to become a bank holding company, for a
moment in time, by acquiring New USTNY, pursuant to
section 3(a)(1) of the BHC Act;
(3) U.S. Trust to acquire New USTNY, for a moment in
time, pursuant to section 3(a)(3) of the BHC Act;
(4) New USTNY to merge with USTNY, pursuant to
section 18(c) of the Federal Deposit Insurance Act,
12 U.S.C. § 1828(c);
1. In connection with the application under section 3 of the BHC
Act, USTNY will transfer ownership of its Edge Act subsidiary to
New USTNY.
899
(5) New USTNY to establish branches at each of the
locations where USTNY now operates a branch,2 pursuant to sections 9 and 25 of the Federal Reserve Act,
12 U.S.C. §§321 and 601; and
(6) New USTNY to become a member of the Federal
Reserve System, pursuant to section 9 of the Federal
Reserve Act, 12 U.S.C. §§ 321-328 and invest in bank
premises in excess of its capital stock account.
Appendix B
New Holdings has filed notices under section 4 of the
BHC Act to acquire the following nonbanking
subsidiaries of U.S. Trust:
(1) U.S. Trust Company of Connecticut, Stamford, Connecticut, and thereby perform trust company functions
and engage in investment advisory activities, pursuant to
sections 225.25(b)(3) and (b)(4) of the Board's Regulation Y (12 C.F.R. 225.25(b)(3) and (b)(4));
(2) U.S. Trust Company of Florida Savings Bank, Palm
Beach, Florida, and thereby perform trust company functions, engage in investment advisory activities, engage in
community development activities, and operate a savings association, pursuant to sections 225.25(b)(3),
(b)(4), (b)(6) and (b)(9) of Regulation Y (12 C.F.R.
225.25(b)(3), (b)(4), (b)(6) and (b)(9));
(3) U.S. Trust Company of New Jersey, and its wholly
owned subsidiary, UST Securities Corporation, both of
Princeton, New Jersey, and thereby provide discount and
full-service securities brokerage services, pursuant to
sections 225.25(b)(4) and (b)(15) of Regulation Y
(12 C.F.R. 225.25(b)(4) and (b)(15)), and purchasing
and selling all types of securities on the order of investors as a "riskless principal" on the order of customers,
pursuant to previous Board orders;
(4) CTMC Holding Company, and its wholly owned
subsidiaries, U.S. Trust Company of the Pacific Northwest, and CTC Consulting, Inc., all of Portland, Oregon,
and thereby perform trust company functions and engage
in investment advisory activities, pursuant to sections
225.25(b)(3) and (b)(4) of Regulation Y (12 C.F.R.
225.25(b)(3) and (b)(4));
(5) Campbell, Cowperthwait & Company, New York,
New York, and thereby engage in investment advisory
activities, pursuant to section 225.25(b)(4) of Regulation Y (12 C.F.R. 225.25(b)(4)); and
2. USTNY will close its branch at 20 Exchange Place, New
York, New York, before the merger. The remaining branches would
be located as follows:
(1)11 West 54th Street, New York, New York;
(2) 100 Park Avenue, New York, New York;
(3) 111 Broadway, New York, New York; and
(4) Cayman Islands.
900
Federal Reserve Bulletin • September 1995
(6) UST Financial Services Corporation, New York,
New York, currently inactive.
Competitive
Considerations
A. Definition of Relevant Banking Market
ORDERS ISSUED UNDER BANK MERGER ACT
Westamerica Bank
San Rafael, California
Order Approving the Merger of Banks and
Establishment of a Bank Branch
Westamerica Bank, San Rafael, California ("Westamerica"), a state member bank, has applied under section 18(c) of the Federal Deposit Insurance Act
(12 U.S.C. § 1828(c)) (the "Bank Merger Act") to acquire certain assets and assume certain liabilities of the
Point Arena, California, branch ("Branch") of Bank of
America, NT & SA, San Francisco, California ("Bank
of America"). Westamerica also has applied under section 9 of the Federal Reserve Act (12 U.S.C. § 321) to
establish a branch at 200 Main Street, Point Arena, the
current location of Branch.
Notice of the applications, 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)). 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 Bank Merger Act and section 9 of the
Federal Reserve Act.
Westamerica is a subsidiary of Westamerica Bancorporation, San Rafael, California, which is the 12th largest commercial banking organization in California, controlling approximately $1.8 billion in deposits,
representing less than 1 percent of total deposits in
commercial banks in the state.1 Bank of America, a
subsidiary of BankAmerica Corporation, San Francisco,
California, is the largest commercial banking organization in California, controlling deposits of $77.6 billion,
representing approximately 35.1 percent of total deposits
in commercial banks in the state. Branch controls deposits of $13.6 million, representing less than 1 percent of
Bank of America's deposits in the state. Upon consummation of the proposed transaction, Westamerica Bancorporation would remain the 12th largest commercial
banking organization in California.
1. State deposit data are as of March 31,1995.
Under the Bank Merger Act, the Board may not approve
a proposal that would result in a monopoly or substantially lessen competition in any relevant 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." 12 U.S.C. § 1828(c)(5). In evaluating the
competitive factors in this case, the Board has carefully
considered the comments submitted by three individuals
and the Board of Supervisors of Mendocino County,
California ("Protestants"), who maintain that the proposed acquisition would substantially lessen competition
for banking services, because it would result in Westamerica operating the only branch in Point Arena. Protestants also contend that Point Arena residents would
have no alternative for banking services because Westamerica currently operates the only branch in the neighboring town of Gualala, California, which is approximately 15 miles south of Point Arena.
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. 2 The Board has
considered all the facts in this case, including information provided by Westamerica, Protestants' comments,
and an on-site review conducted by the Federal Reserve
Bank of San Francisco ("Reserve Bank"). Based on all
the facts of record, the Board concludes that the relevant
geographic market in which to evaluate the competitive
effects of this proposal is defined as the southern coastal
region of Mendocino County, California, which includes
the towns of Point Arena, Gualala, Mendocino, and Fort
Bragg (the "Mendocino Coast banking market"). Point
Arena and Gualala are small towns located on the Pacific
coast in the southern portion of Mendocino County. 3
Residents in the area are principally employed in the
construction and agricultural sectors of the economy and
employment in manufacturing is significantly lower than
in the rest of California. 4 The largest town in the coastal
region of Mendocino County is Fort Bragg, which has a
2. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673,
674 (1982).
3. Point Arena has a population of 400 and Gualala has a
population of 1500.
4. Data from the 1990 U.S. Census indicate that manufacturing
accounts for approximately 4.5 percent of total employment in the
area compared to approximately 16.8 percent of total employment
for the state.
Legal Developments
901
population of 6000, and is 42 miles north of Point Arena.
Point Arena and Gualala are connected to Fort Bragg by
Highway 1, a well maintained two-lane state highway
that runs along the California coast of the Pacific Ocean.5
The estimated travel time between Point Arena and Fort
Bragg is less than an hour.6
Fort Bragg is the primary commercial center in the
southern coastal area and has substantial economic and
social links to Point Arena and Gualala. For example,
Fort Bragg has many retail stores, including the only
chain department store, that are a primary source of
products and services for residents in this area.7 Businesses in Fort Bragg advertise toll-free telephone numbers that may be used by residents in Point Arena and
Gualala.8 Fort Bragg also is the only coastal town in
Mendocino County with a hospital and critical care
facility.
that Fort Bragg banks have noncommercial deposit relationships with residents of the census tract that includes
Point Arena and Gualala, and that Gualala customers
have account and lending relationships with institutions
located outside of Gualala and Point Arena.
After review of the data described above and other
facts of record in this case, including comments from the
Protestants, the Board concludes that the record indicates that customers in Point Arena reasonably can turn
to providers of banking services throughout the Mendocino Coast banking market. Based on all the facts of
record, the Board finds that the relevant geographic
market in this case is the Mendocino Coast banking
market.
Numerous departments of the county and state governments are also located in Fort Bragg, including the
Mendocino County District Attorney, building inspection office, food stamp office, Public Health Department,
Child Health Services, Housing Authority, and Social
Services Department. The California Department of Motor Vehicles, and Employment Development Department
also maintain offices in Fort Bragg. There are no offices
for these county and state services in any other towns in
Mendocino County, except Ukiah, which is the county
seat.9
Westamerica is the fourth largest of the five depository
institutions that operate in the Mendocino Coast banking
market, controlling deposits of $26.3 million, representing 10.7 percent of the total deposits in depository institutions in the market ("market deposits"). 11 Bank of
America is the second largest depository institution in
the market, controlling deposits of $54.6 million, representing 22.2 percent of market deposits. Upon consummation of this proposal, Westamerica would become the
third largest depository institution in the market, controlling $39.5 million in deposits, representing 16 percent of
market deposits, and Bank of America would control
$41.4 million in deposits, representing 16.8 percent of
market deposits. Five depository institutions, including a
branch of Bank of America, would continue to operate in
the market, and the concentration in the market as measured by the Herfindahl-Hirschman Index ("HHI") for
the market would decrease. 12 Reports on the competitive
Financial institutions in Fort Bragg and the surrounding area compete for the banking business in Point
Arena and Gualala. The Fort Bragg Advocate-News, a
weekly newspaper with a circulation of approximately
5200 that is distributed throughout the Mendocino Coast
banking market, regularly carries advertisements for
financial institutions located in Fort Bragg and Mendocino. 10 Account data provided by Westamerica indicate
5. Mendocino, a small town with a population of 1000, is located
between Fort Bragg and Point Arena on Highway 1.
6. The Reserve Bank's on-site review found moderate traffic
traveling in both directions between Point Arena and Fort Bragg on
a normal weekday.
7. Fort Bragg has a 10-block downtown shopping area, a 20-store
shopping center, and an 18-store boutique shopping mall. Fort
Bragg also offers the only major supermarket and pharmacies in the
southern coastal region of Mendocino County.
8. The Reserve Bank's review noted that one advertisement
specifies that the toll-free telephone number is for the use of its
customers located in the southern portion of Mendocino County.
9. Ukiah, California, with a population of 14,600, is the only
town in Mendocino County with a larger population than Fort
Bragg. It is in the central region of Mendocino County, approximately 40 miles from Point Arena and is separated from the
southern coastal region by a small mountain range. Travel between
Point Arena and Ukiah is difficult because of road conditions, and
the estimated travel time is approximately two hours.
10. The Reserve Bank's on-site review indicated that all financial
institutions in Fort Bragg regularly place advertisements in the Fort
B. Effects in the Relevant Banking Market
Bragg Advocate-News. Bank of America, Westamerica, Savings
Bank of Mendocino County and American Savings Bank have
branch offices in Fort Bragg. Savings Bank of Mendocino County
also has a branch in Mendocino, which is ten miles south of Fort
Bragg.
11. Deposit and market data for the Mendocino Coast banking
market are as of June 30, 1994. Market share data are based on
calculations in which the deposits of thrift institutions are included
on a 50-percent weighted basis. 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). Thus, the Board
has regularly included thrift deposits in the calculation of market
share on a 50-percent weighted basis. See e.g., Comerica Inc., 81
Federal Reserve Bulletin 476 (1995); First Hawaiian Inc., 77
Federal Reserve Bulletin 52 (1991).
12. 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 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
902
Federal Reserve Bulletin • September 1995
effects of this proposal were sought from the Attorney
General, the OCC, and the FDIC. The Department of
Justice has concluded that consummation of the proposal
would not have any significantly adverse competitive
effects, and none of these agencies have objected to
consummation of this proposal.
In light of all the facts of record, and for the reasons
discussed in this order, the Board concludes that consummation of this proposal is not likely to result in any
significantly adverse effect on competition in the Mendocino Coast banking market or any other relevant market.
Other Considerations
The Board also concludes that the financial and managerial resources and future prospects of Westamerica, and
the factors the Board is required to consider under the
Bank Merger Act and the Federal Reserve Act are consistent with approval of these applications. Considerations relating to the convenience and needs of the
communities to be served are also consistent with approval. 13
Based on the foregoing and all the facts of record, the
Board has determined that these applications should be,
and hereby are, approved. 14 The Board's approval of this
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 limitedpurpose lenders and other non-depository financial entities. Upon
consummation of this proposal, the HHI for the market would
decrease by 66 points and the post-merger HHI would be 2691.
13. The Board has carefully considered comments from Protestants that consummation of the proposal may result in changes in
the Branch's lending policies, which could have a negative effect
on business development in Point Arena, and may result in the
eventual closure of the Branch. Westamerica has indicated that
Branch will focus on developing deposit and lending relationships
with commercial customers in the Point Arena area, and that
Westamerica does not intend to close Branch. The Board also notes
that all of Westamerica's subsidiary banks that have been examined
for performance under the Community Reinvestment Act
(12 U.S.C. § 2901 et seq.) ("CRA") received a "satisfactory" rating from their primary supervisor in their most recent CRA performance examinations. In light of all the facts of record, the Board
concludes that these comments do not warrant denial of this proposal.
14. One Protestant has requested that the Board extend the public
comment period and hold a public meeting or hearing on these
applications. The Board is not required to hold a public meeting or
hearing on these applications under the Bank Merger Act or the
Federal Reserve Act. Under its rules, the Board may, in its discretion, hold a public meeting or hearing on an application to clarify
factual issues related to the application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d).
The Board has carefully considered Protestants' requests, and all
proposal is conditioned on compliance by Westamerica
with the commitments made in connection with these
applications. For purposes of this action, the commitments and conditions relied on in reaching this decision
are conditions imposed in writing by the Board and, as
such, may be enforced in proceedings under applicable
law.
The acquisition by Westamerica may not be consummated before the fifteenth calendar day following the
effective date of this order, and this proposal may not be
consummated later than three months after the effective
date of this order, unless such period is extended by the
Board or by the Reserve Bank of San Francisco, acting
pursuant to delegated authority.
By order of the Board of Governors, effective
July 31, 1995.
Voting for this action: Chairman Greenspan and Governors
Kelley, Phillips, and Yellen. Absent and not voting: Vice Chairman
Blinder and Governor Lindsey.
WILLIAM W. WILES
Secretary of Board
ORDERS ISSUED UNDER INTERNATIONAL BANKING
ACT
The Hongkong and Shanghai Banking
Corporation, Limited
Hong Kong
Order Approving Establishment of a Representative
Office
The Hongkong and Shanghai Banking Corporation, Limited ("Bank"), Hong Kong, 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 Dallas,
Texas. The Foreign Bank Supervision Enhancement Act
of 1991 ("FBSEA"), 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.
written comments submitted by Protestants. In the Board's view,
interested parties have had ample opportunity to submit comments,
including the opportunity to supplement their comments after the
close of the comment period, and they have submitted written
comments that have been considered by the Board. In light of the
foregoing and all the facts of record, the Board has determined that
an adequate period has been provided for public comment and that
a public meeting or hearing is not necessary to clarify the factual
record on these applications, or otherwise warranted in this case.
Accordingly, the requests to extend the comment period and hold a
public meeting or hearing on these applications are hereby denied.
Legal Developments
903
Notice of the application, affording interested persons
an opportunity to submit comments, has been published
in a newspaper of general circulation in Dallas, Texas
(Dallas Morning News, May 15, 1995). The time for
filing comments has expired and the Board has considered the application and all comments received.
Bank, with total consolidated assets of approximately
$139.4 billion as of December 31, 1994, is the largest
bank in Hong Kong. Bank engages in a broad range of
retail and commercial banking activities and related financial services through a network of branches in Hong
Kong. In addition, Bank has six principal subsidiaries,
including four in Hong Kong, that are engaged in banking, insurance, merchant banking, and finance. Bank also
operates a banking subsidiary in Australia and a finance
subsidiary in Singapore. Together with its subsidiaries,
Bank operates 535 offices in 19 countries in Asia, and 40
offices in nine other countries.
Bank operates in the United States directly and
through its subsidiary, Hang Seng Bank, Limited ("Hang
Seng"), Hong Kong. Bank operates branches in New
York, New York; Los Angeles and San Francisco, California; Chicago, Illinois; Seattle, Washington; and Portland, Oregon; agencies in Guam and Houston, Texas;
and representative offices in Alhambra and Newport
Beach, California. Hang Seng operates two federally
licensed branches in New York, New York; and a federally licensed limited branch in San Francisco, California.
Bank is wholly owned indirectly by HSBC Holdings
pic ("Holdings"), London, England, a holding company
that engages through its subsidiaries in financial activities in over 3,000 offices in 65 countries.1 Holdings also
directly owns all the outstanding voting shares of Midland Bank pic ("Midland Bank"), London, the fourth
largest bank in England. In addition to Bank's operations
in the United States, Holdings engages in commercial
banking activities in the United States through Midland
Bank's branch in New York, New York, and through
Marine Midland Banks, Inc., a holding company in
Buffalo, New York, and its subsidiary, Marine Midland
Bank, Buffalo, New York. Holdings also engages in a
variety of nonbanking activities in the United States
through various subsidiaries engaged in investment
banking, securities activities, asset management, finance,
and capital markets activities.
The proposed representative office would engage in
traditional representative functions, including acting as a
liaison in the Dallas-Fort Worth, Texas, area between
Bank and its clients in the area engaged in international
trade, market research, new business development, and
preparing loan applications. The proposed representative
office will not accept any deposits, make any loans,
make any business decision for the account of Bank, or
otherwise transact any banking business.
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 bank
engages directly in the business of banking outside of
the United States and has furnished the Board the information it needs to assess the application adequately. The
Board also shall take into account whether the foreign
bank and any foreign bank parent 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 stated previously 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.2 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.3 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 of the United States.
Finally, 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 the bank and its affiliates
necessary to determine compliance with U.S. laws.
The Monetary Authority, Bank's primary supervisor,
is authorized by law to regulate the domestic and foreign
activities of banks licensed in Hong Kong. The duties of
the Monetary Authority include licensing banks, enforcing the provisions of Hong Kong's banking laws, and
conducting examinations of banks and their foreign offices. In executing its responsibilities, the Monetary Authority normally conducts annual examinations of Bank,
receives frequent and comprehensive financial reports
from Bank on a worldwide consolidated basis, and holds
1. Holdings owns Bank through a wholly owned subsidiary,
HSBC Holdings BV, a Netherlands holding company.
2. See 58 Federal Register 6348,6351 (1993).
3. Citizens National Bank, 79 Federal Reserve
(1993).
Bulletin
805
904
Federal Reserve Bulletin • September 1995
periodic discussions with Bank's senior management
and external auditor. In addition, Bank is required to
report affiliate-related transactions to the Monetary Authority quarterly.4
The Board has previously determined, in connection
with an application involving another Hong Kong bank,
that the bank was subject to home country supervision
on a consolidated basis.5 In this case, Bank is supervised
by the Monetary Authority on essentially the same terms
and conditions as the other Hong Kong bank. Based on
all the facts of record, the Board has determined that
Bank is subject to comprehensive supervision or regulation on a consolidated basis by its home country supervisor.
The Board also notes that Bank engages directly in the
business of banking outside of the United States through
its extensive banking operations in Asia and elsewhere.
Bank has provided the Board with the information necessary to assess the application through submissions that
address the relevant issues.
The Board has also taken into account the additional
standards set forth in section 7 of the IBA and
Regulation K. 12 U.S.C. § 3105(d)(3),(4); 12 C.F.R.
211.24(c)(2). The Board notes that the Monetary Authority has approved the request by Bank to establish the
proposed representative office.
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 representative
office and has also established controls and procedures
for the proposed representative office to ensure compliance with U.S. law.
Finally, with respect to access to information on
Bank's operations, the Board has reviewed the restrictions on disclosure in certain jurisdictions where Bank
and Holdings have material operations and has communicated with the relevant government authorities regarding access to information. Bank and its ultimate parent
have each committed that they will make available to the
Board such information on the operations of Bank and
its affiliates 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. To the extent that the provision of such
information to the Board is prohibited or impeded by
law, Bank and its ultimate parent have committed to
cooperate with the Board in obtaining any necessary
consents or waivers that might be required from third
parties in connection with the disclosure of certain information. In addition, subject to certain conditions, the
Monetary Authority may share information on Bank's
operations with other supervisors, including the Board.
In light of these commitments and other facts of record,
and subject to the conditions 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 and its ultimate parent,
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. Should any restrictions on access to information on the operations or activities of Bank and 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 Bank's direct or indirect activities in the
United States. Approval of this application is also specifically conditioned on compliance by Bank and its ultimate parent with the commitments made in connection
with this application, and with the conditions of this
order.6 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 12 U.S.C. § 1818 against Bank and its
affiliates.
By order of the Board of Governors, effective
July 20, 1995.
4. Holdings has also provided information to the Board that it is
supervised as a holding company by the Bank of England. Holdings has stated that the Bank of England monitors the operations of
Holdings on a worldwide basis, including Holdings's consolidated
capital adequacy and exposures between Holdings and its subsidiaries and between the subsidiaries.
5. Dah Sing Bank, Limited, 80 Federal Reserve Bulletin 182
(1994).
6. The Board's authority to approve the establishment of the
proposed representative office parallels any authority of the Texas
State Banking Department to license offices of a foreign bank. The
Board's approval of this application would not supplant the authority of the State of Texas, and its agent, the Texas State Banking
Department, to license the proposed office of Bank in accordance
with any terms or conditions that the Texas State Banking Department may impose.
Voting for this action: Vice Chairman Blinder, and Governors
Kelley, Lindsey, Phillips, and Yellen. Absent and not voting: Chairman Greenspan.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Legal Developments
Liu Chong Hing Bank Limited
Hong Kong
Order Approving Establishment of a Branch
Liu Chong Hing Bank Limited ("Bank"), Hong Kong, a
foreign bank within the meaning of the International
Banking Act ("IBA"), has applied under section 7(d) of
the IBA (12 U.S.C. § 3105(d)) to establish a statelicensed branch in San Francisco, California.1 A foreign
bank must obtain the approval of the Board to establish a
branch, agency, commercial lending company, or representative office in the United States under the Foreign
Bank Supervision Enhancement Act of
1991
("FBSEA"), which amended the IBA.
Notice of the application, affording interested persons
an opportunity to submit comments, has been published
in a newspaper of general circulation (San Francisco
Chronicle, September 6, 1993). The time for filing comments has expired and the Board has considered the
application and all comments received.
Bank, with total consolidated assets of approximately
$2.5 billion as of December 31, 1994, is the 21st largest
bank in Hong Kong. Bank's ultimate parent is Liu's
Holdings Limited ("Holdings"), Hong Kong, a holding
company in Hong Kong. 2 Bank operates approximately
30 branches throughout Hong Kong and a branch and a
representative office in the People's Republic of China,
as well as ten wholly owned subsidiaries in Hong Kong
and elsewhere. The activities of Bank's subsidiaries include property management, deposit-taking, nominee services, electronic data processing, banking, merchant
banking, stock brokerage, investments, and property investment. The activities of Bank's San Francisco agency
include commercial and mortgage lending and negotiating U.S. dollar letters of credit issued by the head office.
Bank proposes to convert its existing San Francisco
agency to a branch to expand its deposit base. It also
would expand its lending activities in such areas as trade
finance, accounts receivable and inventory financing,
and commercial and real estate lending. Other services
to be offered by the branch include remittances, foreign
exchange, and gold coin trading. Neither Bank nor its
parent companies engage in nonbanking activities in the
United States, and Bank and its parent companies would
1. By this application, Bank proposes to convert its existing state
licensed agency to a branch.
2. Holdings, which is controlled by members of the Liu family in
Hong Kong, indirectly controls 50.6 percent of Bank's outstanding
shares through its subsidiaries, Liu Chong Hing Investment Limited and Liu Chong Estate Company Limited, both of Hong Kong.
Liu family members also directly hold 8.3 percent of Bank's
shares. The Mitsubishi Bank, Limited ("Mitsubishi"), Tokyo, Japan, owns 11.3 percent of Bank's shares and the remaining
29.8 percent is widely held.
905
continue to be qualifying foreign banking organizations
within the meaning of Regulation K after Bank establishes the proposed branch (12 C.F.R. 211.23(b)).
Bank has received approvals to convert its agency to a
branch from the Hong Kong Monetary Authority (the
"Monetary Authority") and the California State Banking Department.
In order to approve an application by a foreign bank to
establish a branch in the United States, the IBA and
Regulation K require the Board to determine that the
foreign bank applicant engages directly in the business
of banking outside of the United States, and has furnished to the Board the information it needs to adequately assess the application. The Board must also
determine that the foreign bank applicant is subject to
comprehensive supervision or regulation on a consolidated basis by its home country supervisors.
(12 U.S.C. § 3105(d)(2); 12 C.F.R. 211.24(c)(1).) 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)).
Bank engages directly in the business of banking
outside of the United States through its banking operations in Hong Kong and the People's Republic of China.
Bank also has provided the Board with the information
necessary to assess the application through submissions
that address the relevant issues.
Regulation K provides that a foreign bank will be
considered to be subject to comprehensive supervision
or regulation on a consolidated basis if the Board determines that the bank is supervised and regulated in such a
manner that its home country supervisor receives sufficient information on the foreign bank's worldwide operations, including the relationship of the foreign bank to
any affiliate, to assess the overall financial condition of
the foreign bank and its compliance with law and regulation (12 C.F.R 211.24(c)(1)). 3 In making its determina-
3. In assessing this standard, the Board considers, among other
factors, the extent to which the home country supervisor:
(i) Ensures that the bank has adequate procedures for monitoring
and controlling its activities worldwide;
(ii) Obtains information on the condition of the bank and its
subsidiaries and offices through regular examination reports,
audit reports, or otherwise;
(iii) Obtains information on the dealings with and relationship
between the bank and its affiliates, both foreign and domestic;
(iv) Receives from the bank financial reports that are consolidated on a worldwide basis, or comparable information that
permits analysis of the bank's financial condition on a worldwide
consolidated basis; and
(v) Evaluates prudential standards, such as capital adequacy and
risk asset exposure, on a worldwide basis.
These are indicia of comprehensive, consolidated supervision. No
single factor is essential and other elements may inform the Board's
determination.
906
Federal Reserve Bulletin • September 1995
tion under this standard, the Board has considered the
following information.
The Monetary Authority, Bank's primary supervisor,
is authorized by law to regulate the domestic and foreign
activities of banks licensed in Hong Kong. The duties of
the Monetary Authority include licensing banks, enforcing the provisions of Hong Kong's banking laws, and
conducting examinations of banks and their foreign offices. In executing its responsibilities, the Monetary Authority normally conducts annual examinations of Bank,
receives frequent and comprehensive financial reports
from Bank on a worldwide consolidated basis, and holds
periodic discussions with Bank's senior management
and external auditor. In addition, Bank is required to
report affiliate-related transactions to the Monetary Authority quarterly.
The Board has previously determined, in connection
with an application involving another Hong Kong bank,
that the bank was subject to home country supervision
on a consolidated basis.4 In this case, Bank is supervised
by the Monetary Authority on essentially the same terms
and conditions as the other Hong Kong bank.5 Based on
all the facts of record, the Board has determined that
Bank is subject to comprehensive supervision or regulation on a consolidated basis by its home country supervisor.
The Board must also take into account the additional
standards set forth in section 7 of the IBA. (See 12 U.S.C.
§ 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2).) Bank has provided the Board with the information necessary to assess
the application through submissions that address the
relevant issues. As noted above, Bank has received the
consent of its home country authorities to establish the
proposed state licensed branch. In addition, subject to
certain conditions, the Monetary Authority may share
information on Bank's operations with other supervisors, including the Board.
Bank must comply with Hong Kong capital standards.
Hong Kong has voluntarily subscribed to the Basle Capital Accord ("Accord"). Bank's capital exceeds the minimum standards of the Accord and is equivalent to
capital that would be required of a U.S. banking organization. Managerial and other financial resources of Bank
are also considered consistent with approval, and Bank
4. Dah Sing Bank, 80 Federal Reserve Bulletin 182 (1994).
5. As noted above, Bank operates several foreign offices and
subsidiaries. Bank states that the books and records of its foreign
subsidiaries are maintained at its head office in Hong Kong. Consequently, the operations of these companies are subject to review by
the Monetary Authority during its regular on-site examinations of
Bank's Hong Kong operations, as well as to review under Bank's
own internal monitoring procedures. The Monetary Authority also
reviews the results of Bank's internal audits. Finally, Bank's external auditors evaluate Bank's internal controls during their reviews
and report any identified weaknesses to the Monetary Authority.
appears to have the experience and capacity to support
the proposed branch. Bank has established controls and
procedures for the proposed branch in order to ensure
compliance with U.S. law.
Finally, with respect to access to information on
Bank's operations, the Board has reviewed the relevant
provisions of law in Hong Kong and has communicated
with appropriate government authorities regarding access to information. Bank and its ultimate parent have
each committed to 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. To the extent that the provision of such
information is prohibited or impeded by law, Bank and
its ultimate parent have committed to cooperate with the
Board to obtain any necessary consents or waivers that
might be required from third parties in connection with
disclosure of certain information. In addition, subject to
certain conditions, the Monetary Authority may share
information on Bank's operations with other supervisors, including the Board. 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 and its ultimate parent,
as well as the terms and conditions set forth in this order,
the Board has determined that Bank's application to
establish the branch should be, and hereby is, approved.
Should any restrictions on access to information on the
operations or activities of Bank and its affiliates subsequently interfere with the Board's ability to determine
the safety and soundness of Bank's U.S operations or the
compliance by Bank or its affiliates with applicable
federal statutes, the Board may require termination of
any of Bank's direct or indirect activities in the United
States. Approval of this application is also specifically
conditioned on compliance with the commitments made
by Bank and its ultimate parent in connection with this
application, and with the conditions of this order.6 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
6. The Board's authority to approve the establishment of the
proposed branch parallels the continuing authority of the California
State Banking Department to license offices of a foreign bank. The
Board's approval of this application does not supplant the authority
of the State of California, and its agent, the California State
Banking Department, to license the proposed branch of Bank in
accordance with any terms or conditions that the California State
Banking Department may impose.
Legal Developments
12 U.S.C. § 1818 or 12 U.S.C. § 1847 against Bank, its
office and its affiliates.
By order of the Board of Governors, effective
July 20, 1995.
Voting for this action: Vice Chairman Blinder, and Governors
Kelley, Lindsey, Phillips, and Yellen. Absent and not voting: Chairman Greenspan.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT
INSURANCE CORPORATION IMPROVEMENT ACT OF
1991
By the Board
The Provident Bank
Cincinnati, Ohio
Order Approving the Merger of a Savings Bank
The Provident Bank ("Provident"), a state member
bank, has applied under section 18(c) of the Federal
Deposit Insurance Act (12 U.S.C. § 1828(c)) ("Bank
Merger Act") and section 5(d)(3) of the Federal Deposit
Insurance Act (12 U.S.C. § 1815(d)(3)) ("FDI Act") to
acquire by merger Heritage Savings Bank ("Heritage"),
both of Cincinnati, Ohio. 1 Provident and Heritage are
wholly owned subsidiaries of Provident Bancorp, Inc.,
Cincinnati, Ohio ("Bancorp"), and this proposal represents a corporate reorganization of Bancorp.
Notice of the proposal, 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)). 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 Thrift Supervision
("OTS"), and the Federal Deposit Insurance Corporation. The time for filing comments has expired, and the
Board has considered the proposal, and all comments
received in light of the factors set forth in the Bank
Merger Act.
1. Prior to the proposed merger, Heritage will transfer its deposit
liabilities in connection with the sale of its main office and branch
facilities to a third party. However, Heritage will remain a member
of the Savings Association Insurance Fund ("SAIF"), and the
merger of a member of SAIF with a member of the Bank Insurance
Fund requires prior Board approval under section 5(d)(3) of the
FDI Act. In considering such mergers, Section 5(d)(3) requires the
Board to follow the procedures and consider the factors set forth in
the Bank Merger Act.
907
Provident is the eighth largest commercial bank in
Ohio, controlling deposits of $3.8 billion, representing
approximately 4 percent of total deposits in commercial
banks in the state.2 Based on all the facts of record, the
Board concludes that consummation of the proposed
reorganization of Bancorp's current subsidiaries would
not have a significantly adverse effect on competition or
the concentration of banking resources in any relevant
banking market. The Board also concludes that the financial and managerial resources and future prospects of
Provident are consistent with approval.
Convenience and Needs Considerations
In acting on an application under the Bank Merger Act,
the Board is required to 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, consistent with
their safe and sound operation. 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 lowand moderate-income neighborhoods, consistent with
the safe and sound operation of such institution," and to
take that record into account in its evaluation of applications under the Bank Merger Act. 3
The Board has received comments from an individual
("Protestant") alleging that Provident has generally
failed to comply with the CRA and has engaged in a
pattern of illegal discrimination against AfricanAmerican borrowers.4 In considering the convenience
and needs factor under the Bank Merger Act, the Board
2. Deposit data are as of March 31, 1995.
3. 12 U.S.C. § 2903.
4. Protestant also alleges that Provident's foreclosure on a loan
made to him to renovate his rental property for commercial use
under Cincinnati's Rental Rehabilitation Program ("RRP") evidenced racial discrimination and violated fair housing laws and
guidelines of the U.S. Department of Housing and Urban Development ("HUD") applicable to RRP programs. Provident maintains
that foreclosure was initiated only after Protestant defaulted on his
mortgage payments and was unable to provide suitable additional
collateral and to correct building code violations and tax and utility
payment delinquencies that caused matching HUD funds to be
withheld. Investigations of Protestant's allegations by the Federal
Reserve Bank of Cleveland and HUD found, respectively, no
illegal discriminatory actions by Provident or improper administration by Cincinnati of RRP funds. The Board also notes that Protestant has initiated a civil action in this matter that would afford him
appropriate relief if his allegations could be sustained. Based on all
the facts of record, the Board does not believe that these allegations
warrant denial of this proposal.
908
Federal Reserve Bulletin • September 1995
has carefully reviewed the entire record of CRA performance of Provident, the comments received, and 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").5
Record of CRA Performance
A. Evaluation 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
reports of these examinations will be given great weight
in the applications process.6 The Board notes that Provident received an "outstanding" rating from the Federal
Reserve Bank of Cleveland in its most recent CRA
performance examination as of October 18, 1993 ("1993
Examination"). Heritage received a "satisfactory" rating from its primary supervisor, the OTS, in its most
recent CRA performance examination as of August 9,
1994.
The 1993 Examination did not find any evidence of
practices intended to discourage applications for any
kind of credit and indicated that Provident generally
solicits credit applications from all segments of its delineated community. Examiners also indicated that Provident is in compliance with the substantive provisions of
antidiscrimination laws and regulations, including the
Equal Credit Opportunity Act, Fair Housing Act, and
other regulations pertaining to nondiscriminatory treatment of credit applicants.
B. Other Aspects of CRA Performance
The 1993 Examination also found a variety of programs
designed to assist commercial borrowers in low- and
moderate-income areas. In February 1993, Provident
opened a Business Outreach Center in a predominantly
minority, low- and moderate-income area of Cincinnati
to serve as a loan production office and provide information and developmental assistance to small businesses.
Provident has made approximately $21.9 million in
small business loans since the 1993 Examination.
In addition, Provident maintains a high level of participation in development and redevelopment programs in
its community by providing revolving lines of credit,
equity investments, and construction, rehabilitation, and
permanent financing. Since the 1993 Examination, Provident has funded or committed to fund approximately
5. 54 Federal Register 13,742 (1989).
6. Id. at 13,745.
$4.6 million in community development and redevelopment projects.
Provident's ascertainment and outreach efforts include
an officer calling program, contacts with local government and community development groups, homeownership counseling and small business seminars. The bank's
Community Service Action Plan is revised periodically
to reflect recommendations received from local community groups. Provident also offers the Key Mortgage
Loan program to finance the purchase of single-family
housing in low- and moderate- income areas.7 All denied
mortgage applications are subject to a second review to
ensure that lending criteria are being applied equally.
C. Conclusion Regarding Convenience and Needs
Considerations
The Board has carefully considered all the facts of
record, including Protestant's comments, Provident's
CRA record of performance, and information provided
by Provident on its CRA activities, in reviewing the
convenience and needs considerations in this proposal.
In light of these facts, the Board believes that considerations relating to Provident's record of CRA performance, as well as all other convenience and needs considerations, are consistent with approval of this proposal.
Other
Considerations
The Board also has considered the specific factors it
must review under section 5(d)(3) of the FDI Act, and
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) Bancorp and Provident currently meet, and upon
consummation of the proposed transaction, will continue to meet, all applicable capital standards; and
(3) The proposed transaction would comply with the
interstate banking provision of the Bank Holding
Company Act (12 U.S.C. § 1842(d)) if Heritage were
a state bank that Provident was applying to acquire.
See 12 U.S.C. § 1815(d)(3).
Based on the foregoing and all the facts of record, the
Board has determined that the proposal should be, and
hereby is, approved. The Board's approval is specifically
conditioned on compliance by Provident with all com-
7. This program offers reduced down payment requirements,
below-market interest rates and flexible underwriting criteria. The
1993 Examination indicates that Provident has made approximately
650 Key Mortgage loans totalling over $35 million.
Legal Developments
mitments made in connection with this proposal. The
commitments and conditions relied on by the Board are
deemed 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 merger of Provident and Heritage may not be
consummated before the fifteenth 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 by the Federal Reserve Bank
of Cleveland, acting pursuant to delegated authority.
By order of the Board of Governors,
July 31, 1995.
909
effective
Voting for this action: Chairman Greenspan and Governors
Kelley, Phillips, and Yellen. Absent and not voting: Vice Chairman
Blinder and Governor Lindsey.
WILLIAM W. WILES
Secretary of the Board
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
Applicant(s)
Bank(s)
Effective Date
The Bank of New York Company, Inc.,
New York, New York
Lisco State Company,
Lisco, Nebraska
Simmons First National Corporation,
Pine Bluff, Arkansas
Sun Banks, Inc.,
Orlando, Florida
Putnam Trust Company of Greenwich,
Greenwich, Connecticut
Woodstock Land & Cattle Company,
Fullerton, Nebraska
DSB Bancshares Inc.,
Dermott, Arkansas
Key Biscayne Bankcorp, Inc.,
Key Biscayne, Florida
Key Biscayne Bank and Trust
Company,
July 26, 1995
July 12, 1995
July 14, 1995
July 21, 1995
K e y Biscayne, Florida
Section 4
Applicant(s)
Bank(s)
Effective Date
The Bank of New York Company, Inc.,
New York, New York
Continental Trust Company,
Chicago, Illinois
BankAmerica Corporation,
San Francisco, California
GNB Financial Co.,
Grundy Center, Iowa
To engage de novo in leasing personal
or real property or acting as agent,
broker, or adviser in leasing such
property
July 14, 1995
GNB Bancorporation,
Grundy Center, Iowa
SunTrust Banks, Inc.,
Atlanta, Georgia
July 20, 1995
July 28, 1995
910
Federal Reserve Bulletin • September 1995
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)
Bank(s)
Reserve Bank
Effective Date
Andrews Bancshares, Inc.,
Andrews, Texas
Andrews Delaware Financial
Corporation,
Dover, Delaware
The National Bank of Andrews,
Andrews, Texas
The National Bank of Andrews,
Andrews, Texas
Dallas
July 24, 1995
Dallas
July 24, 1995
GN Bancorp, Inc.,
Chicago, Illinois
Chicago
July 14, 1995
Capitol Bank,
Madison, Wisconsin
Princess Anne Bank,
Virginia Beach, Virginia
Pleasant Hope Bancshares, Inc.,
Pleasant Hope, Missouri
Webster County Bank,
Marshfield, Missouri
Centralia Savings Bank,
Centralia, Illinois
First National Bank of McClusky,
McClusky, North Dakota
The Eastside Bank & Trust Company,
Snellville, Georgia
Bank of Naples,
Naples, Florida
Bank of Naples,
Naples, Florida
Chicago
July 25, 1995
Richmond
June 29, 1995
St. Louis
July 26, 1995
St. Louis
July 13, 1995
Minneapolis
July 11, 1995
Atlanta
June 27, 1995
Cleveland
July 20, 1995
Cleveland
July 20, 1995
First National Bank of Central Florida,
Longwood, Florida
SNB Financial Corporation,
Summerville, South Carolina
Atlanta
June 27, 1995
Richmond
July 27, 1995
First Dakota Financial Corporation,
Yankton, South Dakota
Minneapolis
July 5, 1995
Andrews Delaware Financial
Corporation,
Dover, Delaware
Associated Banc-Corp.,
Green Bay, Wisconsin
Associated Illinois Banc-Corp,
Green Bay, Wisconsin
Capitol Bankshares, Inc.,
Madison, Wisconsin
CENIT Bancorp, Inc.,
Norfolk, Virginia
Central Bancompany, Inc.,
Jefferson City, Missouri
CSB Financial Group, Inc.,
Centralia, Illinois
Davis Bancshares, Inc.,
McClusky, North Dakota
Eastside Holding Corporation,
Snellville, Georgia
Fifth Third Bancorp,
Cincinnati, Ohio
Fifth Third Trust Co. & Savings
Bank, FSB,
Naples, Florida
First Bankshares, Inc.,
Longwood, Florida
First Citizens Bancorporation of
South Carolina, Inc.,
Columbia, South Carolina
First Dakota Financial Corporation
Employee Stock Ownership
Plan,
Yankton, South Dakota
Legal Developments
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
First National Corporation,
Folkston, Georgia
First Peoples Bankshares, Inc.,
Pine Mountain, Georgia
First Southern Holding Bancorp,
Inc.,
Boca Raton, Florida
First Sterling Bancshares, Inc.,
Auburndale, Florida
Foursquare Cornerstone, Inc.,
Brookfield, Wisconsin
General Bancshares, Inc.,
Little Rock, Arkansas
Heartland Financial USA, Inc.,
Dubuque, Iowa
InterWest Bancorp, Inc.,
Oak Harbor, Washington
Keene Bancorp, Inc., 401(k)
Employee Stock Ownership
Plan and Trust,
Keene, Texas
First National Bank,
Folkston, Georgia
First Peoples Bank,
Pine Mountain, Georgia
First Southern Bank,
Boca Raton, Florida
Atlanta
July 14, 1995
Atlanta
July 5, 1995
Atlanta
July 7, 1995
Atlanta
July 21, 1995
Chicago
July 20, 1995
St.. Louis
July 7, 1995
Chicago
July 14, 1995
San Francisco
June 27, 1995
Dallas
June 27, 1995
Richmond
June 30, 1995
Atlanta
June 23, 1995
Minneapolis
July 26, 1995
Minneapolis
July 26, 1995
Philadelphia
June 26, 1995
Kansas City
July 20, 1995
Dallas
July 11, 1995
Dallas
July 11, 1995
Dallas
June 30, 1995
Dallas
July 18, 1995
Dallas
July 18, 1995
Mason-Dixon Bancshares, Inc.,
Westminster, Maryland
Moundville Bancshares, Inc.,
Moundville, Alabama
Northern Plains Investment, Inc.,
Jamestown, North Dakota
Norwest Corporation,
Minneapolis, Minnesota
Omega Financial Corporation,
State College, Pennsylvania
Pony Express Bancorp, Inc.,
Elwood, Kansas
SNB Bancshares, Inc.,
Houston, Texas
SNB Corporation,
Wilmington, Delaware
Southern Bancshares, Inc.,
Houston, Texas
Southwestern Bancshares, Inc.,
Glen Rose, Texas
Southwestern Delaware Financial
Corporation,
Dover, Delaware
Commerce Bank Corporation,
Winter Haven, Florida
Cornerstone Bank,
Brookfield, Wisconsin
Sparkman Bancshares, Inc.,
Sparkman, Arkansas
Riverside Community Bank,
Rockford, Illinois
InterWest Savings Bank,
Oak Harbor, Washington
Keene Bancorp, Inc.,
Keene, Texas
Itasca State Bank,
Itasca, Texas
First State Bank,
Keene, Texas
Bank Maryland Corp,
Towson, Maryland
Bank of Moundville,
Moundville, Alabama
Stutsman County State Bank,
Jamestown, North Dakota
Alice Bancshares, Inc.,
Alice, Texas
Montour Bank,
Danville, Pennsylvania
Farmers State Bank,
Lucas, Kansas
SNB Corporation,
Wilmington, Delaware
Southern National Bank of Texas,
Houston, Texas
Southern National Bank of Texas,
Houston, Texas
First State Bank Brazoria,
Brazoria, Texas
Southwestern Delaware Financial
Corporation,
Dover, Delaware
First National Bank,
Glen Rose, Texas
911
912
Federal Reserve Bulletin • September 1995
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Trenton Bankshares, Inc.,
Trenton, Texas
Victoria Bankshares, Inc.,
Victoria, Texas
Victoria Financial Services, Inc.,
Wilmington, Delaware
Watford City Bancshares, Inc.,
Watford City, North Dakota
Whitcorp Financial Company,
Leoti, Kansas
First National Bank of Trenton,
Trenton, Texas
Cattlemen's Financial Services, Inc.,
Austin, Texas
Cattlemen's State Bank,
Austin, Texas
First International Bank & Trust,
Scottsdale, Arizona
Western Bancorp, Inc.,
Garden City, Kansas
Dallas
July 13, 1995
Dallas
July 5, 1995
Dallas
July 5, 1995
Minneapolis
July 19, 1995
Kansas City
July 12, 1995
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Abess Properties, Ltd.,
Miami, Florida
City National Bancshares, Inc.,
Miami, Florida
Allied Irish Banks, p.l.c.,
Dublin, Ireland
Associated Banc-Corp,
Green Bay, Wisconsin
Citizens Bancshares Corporation,
Olanta, South Carolina
Commercial Bancgroup, Inc.,
Harrogate, Tennessee
Community National Corporation,
Grand Forks, North Dakota
Turnberry Savings & Loan
Association,
North Miami Beach, Florida
Atlanta
July 20, 1995
AIB Investment Managers Limited,
Dublin, Ireland
Great Northern Mortgage,
Rolling Meadows, Illinois
E Z Loan Company, Inc.,
Lake City, South Carolina
Tennessee Finance Company, Inc.,
Harrogate, Tennessee
Document Processing and Imaging
Corporation,
Grand Forks, North Dakota
Rabo Capital Services, Inc.,
New York, New York
Richmond
July 7, 1995
Chicago
July 3, 1995
Richmond
July 27, 1995
Atlanta
July 6, 1995
Minneapolis
July 3, 1995
New York
July 3, 1995
To engage in trust activities
Chicago
June 27, 1995
First Madison Capital Corp.,
Madison, Wisconsin
First Hawaiian Leasing, Inc.,
Honolulu, Hawaii
Dakota First Insurance Company,
Grand Forks, North Dakota
Chicago
July 19, 1995
San Francisco
July 14, 1995
Minneapolis
July 26, 1995
To engage de novo in providing data
processing services to other financial
institutions
Minneapolis
July 26, 1995
Section 4
Cooperatieve Centrale Raiffeisen Boerenleenbank B.A., Rabobank
Nederland,
Utrecht, Netherlands
Firstar Bank Illinois,
Naperville, Illinois
First Business Bancshares, Inc.,
Madison, Wisconsin
First Hawaiian, Inc.,
Honolulu, Hawaii
First National Corporation North
Dakota,
Grand Forks, North Dakota
First State Banking Corporation,
Alcester, South Dakota
Legal Developments
Section 4—Continued
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Intervest Bancshares Corporation,
New York, New York
To engage de novo in making,
acquiring, participating in and/or
servicing loans secured by
mortgages on real estate
Mutual Services, Inc.,
Braintree, Massachusetts
Financial Institution Service, Inc.,
Green Forest, Arkansas
Transplatinum Service Corp.,
Nashville, Tennessee
Atlanta
July 17, 1995
Chicago
July 3, 1995
St. Louis
June 29, 1995
St. Louis
July 14, 1995
Minneapolis
July 14, 1995
Atlanta
July 14, 1995
Richmond
July 19, 1995
New York
June 30, 1995
Chicago
July 21, 1995
Marshall & Usley Corporation,
Milwaukee, Wisconsin
Mountain Bancshares, Inc.,
Yellville, Arkansas
National Commerce
Bancorporation,
Memphis, Tennessee
Norwest Corporation,
Minneapolis, Minnesota
Regions Financial Corporation,
Birmingham, Alabama
Summit Financial Corporation,
Greenville, South Carolina
Swiss Bank Corporation,
Basle, Switzerland
Wisconsin Bank Services, Inc.,
Black River Falls, Wisconsin
Valley-Hi National Bank,
San Antonio, Texas
Interstate Billing Service, Inc.,
Decatur, Alabama
Courtesy Management Corporation,
DBA Courtesy Finance,
St. George, South Carolina
Government Pricing Information
System, Inc.,
New York, New York
To make and service loans
Sections 3 and 4
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Lexington Holding, Inc.,
Waltham, Massachusetts
Affiliated Community Bancorp,
Inc.,
Waltham, Massachusetts
Lexington Savings Bank,
Lexington, Massachusetts
Main Street Community Bancorp, Inc.,
Waltham, Massachusetts
The Federal Savings Bank,
Waltham, Massachusetts
Boston
June 28, 1995
913
914
Federal Reserve Bulletin • September 1995
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)
Bank(s)
Reserve Bank
Effective Date
Bank of Naples,
Naples, Florida
Fifth Third Trust Co. & Savings Bank,
F.S.B.,
Naples, Florida
Citizens Federal Bank, a Federal
Savings Bank,
Miami, Florida
Montour Bank,
Danville, Pennsylvania
CENIT Bank, F.S.B.,
Norfolk, Virginia
First Union National Bank of
Maryland,
Rockville, Maryland
First National Bank of South Texas,
San Antonio, Texas
Novato National Bank,
Novato, California
Atlanta
July 20, 1995
Richmond
July 20, 1995
Philadelphia
June 26, 1995
Richmond
June 29, 1995
Richmond
June 29, 1995
Dallas
July 19, 1995
San Francisco
June 21, 1995
First Virginia Bank-Colonial,
Richmond, Virginia
Montour Interim Bank,
Danville, Pennsylvania
Princess Anne Bank,
Virginia Beach, Virginia
Sterling Bank and Trust Co.,
Baltimore, Maryland
Texas State Bank,
McAllen, Texas
Westamerica Bank,
San Rafael, California
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.
March 31, 1995 denial of Money Station's request for
reconsideration of the Board's March 1 order (D.C. Cir.,
No. 95-1243). The cases were consolidated on June 2,
1995.
Jones v. Board of Governors, No. 95-1359 (D.C. Cir., filed
July 17, 1995). Petition for review of a Board order dated
June 19, 1995, approving the application by First Commerce Corporation, New Orleans, Louisiana, to acquire
Lakeside Bancshares, Lake Charles, Louisiana.
Board of Governors v. Scott, Misc. No. 95-127 (LFO/PJA)
(D. D.C., filed April 14, 1995). Application to enforce
investigatory subpoenas for documents and testimony.
Oral argument took place on June 8, 1995.
Money Station, Inc. v. Board of Governors, No. 95-1182
(D.C. Cir., filed March 30, 1995). Petition for review of a
Board order dated March 1, 1995, approving notices by
Bank One Corporation, Columbus, Ohio; CoreStates Financial Corp., Philadelphia, Pennsylvania; PNC Bank
Corp., Pittsburgh, Pennsylvania; and KeyCorp, Cleveland, Ohio, to acquire certain data processing assets of
National City Corporation, Cleveland, Ohio, through a
joint venture subsidiary. On May 1, 1995, Money Station
filed a separate petition for review of the Board's
Jones v. Board of Governors, No. 95-1142 (D.C. Cir., filed
March 3, 1995). Petition for review of a Board order
dated February 2, 1995, approving the applications by
First Commerce Corporation, New Orleans, Louisiana, to
merge with City Bancorp, Inc., New Iberia, Louisiana,
and First Bankshares, Inc., Slidell, Louisiana. Petitioner
filed a motion for injunctive relief on April 3, 1995. On
April 17, 1995, the Board filed its opposition to the
motion.
Board of Governors v. Interamericas Investments, Ltd., No.
H-95-565 (S.D. Texas, filed February 24, 1995). Action
to freeze certain assets of a company pending administrative adjudication of civil money penalty. On March 1,
1995, the court issued a stipulated order requiring the
company to deposit $1 million into the registry of the
court.
In re Subpoena Duces Tecum, No. 95-5034 (D.C. Cir., filed
January 26, 1995). Appeal of partial denial of plaintiff's
motion to compel production of examination and other
Legal Developments
supervisory material in connection with a shareholder
derivative action against a bank holding company. Oral
argument is scheduled for November 7, 1995.
Kuntz v. Board of Governors, No. 95-3044 (6th Cir., filed
January 12, 1995). Petition for review of a Board order
dated December 19, 1994, approving an application by
KeyCorp, Cleveland, Ohio, to acquire BANKVERMONT
Corp., Burlington, Vermont. On February 10, 1995, the
Board filed its motion to dismiss.
In re Subpoena Duces Tecum, Misc. No. 95-06 (D.D.C.,
filed January 6, 1995). Action to enforce subpoena seeking pre-decisional supervisory documents sought in connection with an action by Bank of New England Corporation's trustee in bankruptcy against the Federal Deposit
Insurance Corporation. The Board filed its opposition on
January 20, 1995.
Beckman v. Greenspan, No. CV 94-41-BCG-RWA (D.
Mont., filed April 13, 1994). Action against Board and
others seeking damages for alleged violations of constitutional and common law rights. On April 24, 1995, the
court granted the Board's motion to dismiss. Plaintiffs
filed a notice of appeal on May 4, 1995.
Board of Governors v. Ghaith R. Pharaon, No. 91-CIV6250 (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.
915
Stuart G. Urban
Cobb, Wisconsin
The Federal Reserve Board announced on July 14, 1995,
the issuance of Orders of Assessment of Civil Money
Penalties against Stuart G. Urban, John C. Kirkpatrick,
Leslie R. Cohen, Byung Ho Chang, and Robert Armbruster, institution-affiliated parties of CSB Investors,
Cobb, Wisconsin, and Iowa-Grant Bankshares, Inc.,
Cobb, Wisconsin, former bank holding companies.
TERMINATION OF ENFORCEMENT ACTIONS
The Federal Reserve Board announced on July 12, 1995,
the termination of the following enforcement actions:
Banca Nazionale del Lavaro
Rome, Italy, and New York, New York
Cease and Desist Order dated March 8, 1991; terminated
May 22, 1995.
Citizens State Bank & Trust Co.
Ellsworth, Kansas
CSB Bancshares, Inc.
Ellsworth, Kansas
Written Agreements dated August 23, 1993; terminated
May 30, 1995.
FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD
OF GOVERNORS
Columbus Junction State Bank
Columbus Junction, Iowa
Dane D. Britton
Ellsworth, Kansas
Written Agreement dated October 29, 1992; terminated
June 1, 1995.
The Federal Reserve Board announced on July 12, 1995,
the issuance of an Order of Assessment of a Civil Money
Penalty against Dane D. Britton, a former officer and
institution-affiliated party of the Citizens State Bank and
Trust Company, and Britton Bancshares, Inc., Ellsworth,
Kansas.
First Prairie Bankshares, Inc.
Georgetown, Illinois
John "Bud" Harlow, Jr.
Mission, Kansas
WRITTEN AGREEMENTS APPROVED BY FEDERAL
RESERVE BANKS
The Federal Reserve Board announced on July 18, 1995,
the issuance of a combined Order of Prohibition and For
Other Affirmative Relief against John "Bud" Harlow,
Jr., an appraiser for, and institution-affiliated party of, the
Midland Bank of Kansas, Mission, Kansas; the Midland
Bank, Kansas City, Missouri; the College Boulevard
National Bank, Overland Park, Kansas; and the Premier
Bank, Lenexa, Kansas, a state member bank.
United Bank Limited
Karachi, Pakistan
Written Agreement dated December 18, 1991; terminated June 15, 1995.
The Federal Reserve Board announced on July 17, 1995,
the execution of a Written Agreement among the Federal
Reserve Bank of New York, the Superintendent of Banks
of the State of New York, and the United Bank Limited,
Karachi, Pakistan, and its New York Branch.
Al
Financial and Business Statistics
A3
DOMESTIC FINANCIAL STATISTICS
Money Stock and Bank Credit
A4
A5
A6
A7
Financial Markets
GUIDE TO TABULAR PRESENTATION
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
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
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
Commercial Banking Institutions
A18 Assets and liabilities, Wednesday figures
Weekly Reporting Commercial Banks—
Assets and liabilities
A21 Large reporting banks
A23 Branches and agencies of foreign banks
A24 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
All Stock market—Selected statistics
Federal Finance
A28
A29
A30
A30
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—
Types and ownership
A31 U.S. government securities
dealers—Transactions
A32 U.S. government securities dealers—
Positions and financing
A3 3 Federal and federally sponsored credit
agencies—Debt outstanding
Securities Markets and Corporate Finance
A34 New security issues—Tax-exempt state and local
governments and corporations
A35 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
Real Estate
A37 Mortgage markets
A3 8 Mortgage debt outstanding
Consumer Installment Credit
A39 Total outstanding
A39 Terms
2
Federal Reserve Bulletin • September 1995
DOMESTIC FINANCIAL STATISTICSCONTINUED
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
A58 Banks' own claims on foreigners
A59 Banks' own and domestic customers' claims on
foreigners
A59 Banks' own claims on unaffiliated foreigners
A60 Claims on foreign countries—
Combined domestic offices and foreign branches
Reported by Nonbanking Business
Enterprises in the United States
A61 Liabilities to unaffiliated foreigners
A62 Claims on unaffiliated foreigners
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
Securities Holdings and Transactions
A63 Foreign transactions in securities
A64 Marketable U.S. Treasury bonds and
notes—Foreign transactions
Interest and Exchange Rates
A65 Discount rates of foreign central banks
A65 Foreign short-term interest rates
A66 Foreign exchange rates
INTERNATIONAL STATISTICS
Summary Statistics
A53
A54
A54
A54
U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A55 Selected U.S. liabilities to foreign official
institutions
Reported by Banks in the United States
A55 Liabilities to and claims on foreigners
A56 Liabilities to foreigners
A67 GUIDE TO STATISTICAL RELEASES AND
SPECIAL TABLES
Special Tables
A68 Residential lending reported under the Home
Mortgage Disclosure Act, 1994
A76 INDEX TO STATISTICAL TABLES
A3
Guide to Tabular Presentation
SYMBOLS AND
ABBREVIATIONS
ATS
BIF
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
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
Fanners Home Administration
Federal National Mortgage Association
Federal Savings and Loan Insurance Corporation
Group of Seven
GENERAL
INFORMATION
c
e
n.a.
n.e.c.
P
r
*
0
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
G-10
GNMA
GDP
HUD
IMF
IO
IPCs
IRA
MMDA
MSA
NOW
OCD
OPEC
OTS
PO
REIT
REMIC
RP
RTC
SAIF
SCO
SDR
SIC
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
Metropolitan statistical area
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
Department of Veterans Affairs
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
1.10
Domestic Financial Statistics • September 1995
RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Percent annual rate of change, seasonally adjusted1
1994
1995
1995
Monetary or credit aggregate
Q3
Q4
Q1
Q2
Feb.
Mar.
Apr.
-1.9
-1.9
-3.5
7.5
-3.3
-3.0
-2.1
6.9
-3.7
-4.0
-2.4
6.4
-8.0
-7.0
-8.6
6.2
-4.2
3.9
-2.6
3.6
-7.5
-4.5
-7.7
8.6
2.4
1.0r
2.2r
2.3r
4.2
-1.2
-.3
1.7
3.4
5.2
.0
1.6
4.4
7.9
5.5r
-.9
4.2
6.7
n.a.
n.a.
-1.8
-1.5
2.4
9.5
7.4
.3r
8.8r
.<y
13.1r
2.4
18.9
6.5
19.5
May
June
-12.2
-11.5
-13.0
7.8
—4.1r
-6.8
-4.9 r
7.2r
-8.5
-10.4
-11.0
-2.7
.6'
2.5
6.2r
10. l r
5.51
4.1
6.ff
9.9
4.8'
-7.1
5.1r
7.7r
6.9
5.4
.8
11.4
12.0
n.a.
n.a.
-1.4
22.8r
3.2
25.0r
5.2
15.&
10.7r
20.3r
16.3
14.5
2
1
2
3
4
Reserves of depository institutions
Total
Required
Nonborrowed
Monetary base3
5
6
7
8
9
Concepts of money, liquid assets, and debt*
Ml
M2
M3
L
Debt
Nontransaction components
10 In M25
11 In M3 only6
Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time7
Large time8,9
Thrift institutions
15 Savings, including MMDAs
16 Small time7
17 Large time8
12
13
14
Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only
Debt components4
20 Federal
21 Nonfederal
-4.6
9.4
13.4r
—8.5
16.0
20.(f
-13.2
24.2
14.0r
-7.3
23.4
14.5
-16.0
27.2
30.2r
-17.8
31.1
19.6r
-12.1
23.0
,8r
2.2r
17.3
24.7r
17.9
14.5
8.3
-11.5
.9r
8.3r
-17.6 r
10.4
14.1r
-20.5
20.7r
23.3r
-14.5
25.4
14.3
-24.9
30.5
25.2r
-19.4
33.3'
35.2r
-16.5
28.9
18.8r
-7.2
19.6
-15.2 r
-4.0
1.7
6.8
5.7
-4.5
7.5
7.3
7.9
10.0
17.9
27.1
-1.8
-38.0
-1.8
57.2
15.7
24.8
28.2
11.8
61.0
66.5
3.9
4.3
5.9
5.0
5.2
5.7r
10.6
6.2
7.4
4.8'
.7
6.3r
5.9
5.2
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 "breaks," 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 Cash" 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:
Ml: (1) currency outside the US. 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
US. 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 Ml.
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
n.a.
n.a.
n.a.
n.a.
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 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: The debt aggregate is the outstanding credit market debt of the domestic
nonfinancial sectors—the federal sector (U.S. government, not including governmentsponsored enterprises or federally related mortgage pools) and the nonfederal sectors
(state and local governments, households and nonprofit organizations, nonfinancial corporate and nonfarm noncorporate businesses, and farms). Nonfederal debt consists of
mortgages, tax-exempt and corporate bonds, consumer credit, bank loans, commercial
paper, and other loans. The data, which are derived from the Federal Reserve Board's flow
of funds accounts, are break-adjusted (that is, discontinuities in the data have been
smoothed into the series) and month-averaged (that is, the data have been derived by
averaging adjacent month-end levels).
5. 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.
6. 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 institutiononly 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, the U.S. government, and foreign banks and official institutions.
Money Stock and Bank Credit
1.11
A5
RESERVES OF DEPOSITORY INSTITUTIONS A N D RESERVE BANK CREDIT 1
Millions of dollars
Average of
daily figures
Average of daily figures for week ending on date indicated
1995
1995
Apr.
May
June
May 17
May 24
May 31
June 7
June 14
June 21
June 28
411,557
411,139
413,474
410,575
410,252
411,239
411,093
411,523
417,507
411,027
367,512
4,257
368,962
2,773
372,815
2,672
369,414
1,663
368,386
3,201
368,747
3,659
372,924
796
373,605
0
372,056
6,743
372,841
449
3,404
462
0
3,367
591
0
3,140
180
0
3,358
429
0
3,358
830
0
3,358
925
0
3,232
56
0
3,137
0
0
3,104
596
0
3,101
0
0
30
81
0
531
35,278
8
140
0
364
34,934
69
169
0
360
34,068
5
134
0
400
35,172
4
145
0
272
34,056
5
159
0
77
34,310
25
141
0
279
33,640
1
132
0
751
33,896
260
178
0
299
34,271
9
212
0
131
34,283
11,054
8,018
23,268
11,055
8,018
23,335
11,054
8,018
23,397
11,055
8,018
23,332
11,055
8,018
23,346
11,054
8,018
23,360
11,054
8,018
23,374
11,054
8,018
23,388
11,054
8,018
23,402
11,054
8,018
23,416
405,072
361
408,336
340
409,113
316
408,540
345
408,040
335
409,698
325
410,241
322
409,721
316
408,397
313
407,788
313
6,155
198
4,107
360
13,498
24,145
5,791
184
4,226r
312
12,926
21,431
7,530
209
4,363
284
12,971
21,157
5,582
185
4,182
320
12,925
20,899
4,823
196
4,186
316
12,880
21,893
5,320
175
4,336r
287
12,768
20,76 l r
4,424
221
4,267
282
12,783
20,999
5,286
180
4,255
290
13,010
20,925
11,241
218
4,421
295
13,073
22,023
6,977
226
4,468
281
12,905
20,557
SUPPLYING RESERVE F U N D S
1 Reserve Bank credit outstanding
U.S. government securities
Bought outright—System account .
Held under repurchase agreements
Federal agency obligations
Bought outright
Held under repurchase agreements
Acceptances
Loans to depository institutions
Adjustment credit
Seasonal credit
Extended credit
Float
Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account .
14 Treasury currency outstanding
ABSORBING RESERVE FUNDS
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 Banks3
Wednesday figures
End-of-month figures
Apr.
May
June
May 17
May 24
May 31
June 7
June 14
June 21
June 28
411,541
412,804
427,848
412,011
414,353
412,804
416,414
410,861
426,352
413,205
368,554
2,750
370,047
3,531
372,641
16,324
368,850
3,880
367,388
7,214
370,047
3,531
372,706
5,571
372,805
0
371,937
15,914
372,540
3,146
3,388
500
0
3,358
700
0
3,096
461
0
3,358
1,000
0
3,358
1,650
0
3,358
700
0
3,172
393
0
3,104
0
0
3,104
87
0
3,096
0
0
43
112
0
384
35,809
9
160
0
994
34,005r
2
214
0
296
34,814
4
138
0
713
34,069
6
153
0
217
34,367
9
160
0
994
34,005r
3
126
0
578
33,865
2
150
0
811
33,989
7
196
0
398
34,710
2
226
0
-244
34,439
11,055
8,018
23,304
11,054
8,018
23,360
11,054
8,018
23,430
11,055
8,018
23,332
11,054
8,018
23,346
11,054
8,018
23,360
11,054
8,018
23,374
11,054
8,018
23,388
11,054
8,018
23,402
11,054
8,018
23,416
405,285
356
411,104
322
410,414
319
409,144
336
409,324
326
411,104
322
411,000
317
409,970
313
408,713
312
409,587
319
8,241
166
4,390
339
13,095
22,045
4,646
227
4,336r
215
12,181
22,204r
20,977
168
4,504
242
13,519
20,207
5,835
179
4,182
320
12,688
21,731
4,901
164
4,186
328
12,690
24,850
4,646
227
4,336r
215
12,181
22,204r
5,139
244
4,267
271
12,847
24,774
5,000
164
4,255
292
12,788
20,540
13,636
306
4,421
280
12,919
28,240
7,721
260
4,468
282
12,696
20,359
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
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10 Float
11 Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
ABSORBING RESERVE FUNDS
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:
1. Amounts of cash held as reserves are shown in table 1.12, line 2.
2. Includes securities loaned—fully guaranteed by US. 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
Domestic Financial Statistics • September 1995
1.12
RESERVES AND BORROWINGS
Depository Institutions1
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 Banks2
Total vault cash3
Applied vault cash4
Surplus vault cash
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9
1992
1993
1994
1994
Dec.
Dec.
Dec.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June
25,368
34,541
31,172
3,370
56,540
55,385
1,155
124
18
1
29,374
36,818
33,484
3,334
62,858
61,795
1,063
82
31
0
24,658
40,365
36,682
3,683
61,340
60,172
1,168
209
100
0
24,658
40,365
36,682
3,683
61,340
60,172
1,168
209
100
0
22,291
42,291
38,230
4,061
60,521
59,182
1,339
136
46
4
21,758
39,795
35,941
3,855
57,699
56,752
946
59
33
0
22,649
38,518
34,934
3,584
57,583
56,789
794
69
51
0
24,217
38,099
34,657
3,442
58,874
58,120
753
111
82
0
21,476
39,038
35,281
3,757
56,757
55,877
880
150
137
0
21,058
39,839
35,986
3,853
57,045
56,079
965
272
172
0
1995
Biweekly averages of daily figures for two week periods ending on dates indicated
1995
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks
Total vault cash
Applied vault cash4
Surplus vault cash5
Total reserves
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9
Mar. 1
Mar. 15
Mar. 29
Apr. 12
Apr. 26
May 10
May 24
June 7r
June 21
July 5
22,710
37,924
34,286
3,638
56,995
56,111
885
60
36
0
22,316
39,318
35,636
3,682
57,952
57,385
566
59
44
0
22,869
37,773
34,278
3,496
57,147
56,077
1,070
79
59
0
23,412
38,433
34,941
3,492
58,353
57,939
414
76
61
0
25,542
37,481
34,158
3,323
59,700
58,737
963
130
90
0
21,994
39,261
35,550
3,712
57,543
56,508
1,035
148
124
0
21,406
38,711
34,955
3,756
56,361
55,552
810
144
140
0
20,875
39,373
35,549
3,824
56,424
55,627
798
165
150
0
21,478
40,146
36,240
3,906
57,718
56,703
1,015
286
155
0
20,548
39,724
35,932
3,792
56,480
55,462
1,018
336
214
0
1. Data in this table also appear in the Board's H.3 (S02) 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 "as-of' 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 may 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 Banks 1
Millions of dollars, averages of daily figures
1995, week ending Monday
Source and maturity
May
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
For one day or under continuing contract
For all other maturities
Repurchase agreements on US. government and federal
agency securities
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
For all other maturities
1
May
8
May
15
May
22
May
29
June 5
June 12
June 19
June 26
80,972
81,756
17,723
78,511
17,936
73,118
18,342
28,276
23,479
27,768
20,391
27,115
24,232
26,675
69,011
70,032
18,272
73,783
18,673
74,449
17,801
18,903
74,345
18,242
19,489
31,644
22,258
29,667
20,877
30,035
25,502
30,041
22,007
32,946
23,793
36,810
23,211
41,578
24,516
41,498
21,952
21,963
41,078
39,816
21,082
39,921
21,848
39,524
20,890
39,292
21,803
36,274
38,404
35,816
38,061
17,579
39,016
18,925
18,351
38,330
19,198
38,658
17,423
37,061
17,000
37,314
17,186
38,866
18,928
65,791
26,765
62,208
28,062
62,760
31,005
59,955
26,904
61,464
27,906
62,407
59,245
33,345
61,144
17,062
22,878
19,419
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 customers2
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.S (507) weekly statistical release. For
ordering address, see inside front cover.
32,232
31,458
59,182
30,147
2. Brokers and nonbank dealers in securities, other depository institutions, foreign
banks and official institutions, and U.S. government agencies,
A8
1.14
Domestic Financial Statistics • September 1995
FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit1
Federal Reserve
Bank
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Seasonal credit2
Extended credit3
On
8/4/95
Effective date
Previous rate
On
8/4/95
Effective date
Previous rate
On
8/4/95
Effective date
Previous rate
5.25
2/1/95
2/1/95
2/2/95
2/9/95
2/1/95
2/2/95
4.75
5.80
8/3/95
5.75
6.30
8/3/95
6.25
4.75
5.80
8/3/95
5.75
6.30
8/3/95
6.25
2/1/95
2/1/95
2/2/95
2/1/95
2/2/95
2/1/95
5.25
4
Range of rates for adjustment credit in recent years
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
9
20
May 11
12
July 3
10
Aug. 21
Sept. 22
Oct. 16
20
Nov. 1
3
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
6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5
1979—July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
10
10-10.5
10.5
10.5-11
12
12
12
1980—Feb. 15
19
May 29
30
June 13
16
July 28
29
Sept. 26
Nov. 17
Dec. 5
8
1981—May 5
12-13
13
12-13
12
13
13
13
12
11-12
11
11
In effect Dec. 31, 1977
1978—Jan.
11
11-12
11
10-11
10
11
12
12-13
13
13-14
14
10
10.5
10.5
11
11
10
10
11
12
13
13
14
14
Range (or
level)—
All F.R.
Banks
1981—Nov. 2
6
Dec. 4
13-14
13
12
1982—July 20
23
Aug. 2
3
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17
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
1984—Apr. 9
13
Nov. 21
26
Dec. 24
8.5-9
9
8.5-9
8.5
8
9
9
8.5
8.5
8
1985—May 20
24
7.5-8
7.5
7.5
7.5
1986—Mar. 7
10
Apr. 21
23.
July 11
Aug. 21
22
7-7.5
7
6.5-7
6.5
6
5.5-6
5.5
7
7
6.5
6.5
6
5.5
5.5
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 charged by 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 ordinarily is charged on extended-credit loans outstanding less than
F.R.
Bank
of
N.Y.
13
13
12
Effective date
Range (or
level)—
AH F.R.
Banks
F.R.
Bank
of
N.Y.
1987—Sept. 4
11
5.5-6
6
6
6
1988—Aug. 9
11
6-6.5
6.5
6.5
6.5
1989—Feb. 24
27
6.5-7
7
7
7
1990—Dec. 19
1991—Feb.
1
4
Apr. 30
May 2
Sept. 13
17
Nov. 6
7
Dec. 20
24
1992—July
6.5
6.5
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
1994—May 17
18
Aug. 16
18
Nov. 15
17
3-3.5
3.5
3.5-4
4
4-4.75
4.75
3.5
3.5
4
4
4.75
4.75
4.75-5.25
5.25
5.25
5.25
5.25
5.25
1995—Feb.
1
9
In effect Aug. 4, 1995
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 charged 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 to short-term adjustmentcredit 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 to 3
percent effective Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1,
1981, the formula for applying the surcharge was changed from a calendar quarter to a
moving thirteen-week period. The surcharge was eliminated on Nov. 17, 1981.
Policy Instruments
1.15
A9
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 1
Requirement
Type of deposit2
Percentage of
deposits
Effective date
3
10
12/20/94
12/20/94
0
12/27/90
0
12/27/90
Net transaction accounts3
2 More than $54.0 million4
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
of 1980, depository institutions include commercial banks, mutual savings banks,
savings and loan associations, credit unions, agencies and branches of foreign banks,
and Edge Act corporations.
2. The Garn-St Germain Depository Institutions Act of 1982 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. 20, 1994, the exemption was raised from $4.0 million to
$4.2 million. The exemption applies only to accounts that would be subject to a 3 percent
reserve requirement.
3. Includes 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 for the purpose of making payments to third persons
or others, other than money market deposit accounts (MMDAs) and similar accounts that
permit no more than six preauthorized, automatic, or other transfers per month, of which
no more than three may be checks (accounts subject to such limits are considered 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 of each year. Effective Dec. 20, 1994, the amount was
increased from $51.9 million to $54.0 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 1 l /i years was reduced from 3 percent to
I n 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 11/2 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 1VS 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 was the reserve requirement on
nonpersonal time deposits with an original maturity of less than 1 V5 years (see note 5).
A10
Domestic Financial Statistics • September 1995
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
Millions of dollars
1994
Type of transaction
and maturity
1992
1995
1994
1993
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
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 matched
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 transactions
25 Gross purchase
26 Gross sales
Repurchase agreements
27 Gross purchases
28 Gross sales
29 Net change in U.S. Treasury securities
14,714
1,628
308,699
1,600
17,717
0
332,229
0
17,484
0
376,277'
0
6,109
0
29,700'
0
444
0
36,726'
0
0
0
30,150'
0
0
0
31,530
0
0
0
36,449
0
0
0
30,983
0
0
0
31,663
0
1,096
1,223
0
31,368
-36,582
0
1,238
36,662
-30,543
0
-21,444
0
0
0
1,790
-5,795
0
125
0
-2,430
1,680
0
0
0
2,835
-3,167
0
0
0
5,872
-4,881
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
13,118
0
-34,478
25,811
10,350
0
-27,140
0
9,168
0
-6,004
17,801
200
0
-1,123
4,192
2,208
0
2,430
-1,680
0
0
-2,145
3,167
0
0
-5,115
3,031
0
0
0
0
2,549
0
0
0
0
0
0
0
2,818
0
-1,915
3,532
4,168
0
3,818
-3,145
2,903
0
0
-278
1,603
660
0
0
0
0
-690
0
0
0
-757
1,150
0
0
0
0
839
0
0
0
0
0
0
0
2,333
3,457
0
3,606
0
-918
775
0
0
-389
0
1,252
0
0
0
0
0
0
0
0
0
0
700
0
0
0
0
1,138
0
0
0
0
0
0
0
35,314
6,309
0
0
4,689
0
0
0
621
0
0
0
0
0
0
4,526
0
370
0
0
0
0
0
0
0
-269
1,200
0
34,079
1,628
1,600
36,915
0
767
1,480,140
1,482,467
0
0
0
0
0
2,337
0
0
1,475,941 1,700,836
1,475,085 1,701,309
148,425
147,858
166,648
166,007
163,615'
164,526'
178,877
176,232
168,800
170,724
148,306
147,616
155,027
153,534
378,374
386,257
475,447
470,723
309,276
311,898
35,456
32,561
29,406
26,351
32,201
39,756
1,300
3,310
22,070
16,477
36,314
39,157
35,158
34,377
20,642
41,729
29,882
9,771
8,385
-9,087'
634
3,669
2,004
2,274
0
FEDERAL AGENCY OBLIGATIONS
Outright transactions
30 Gross purchases
31 Gross sales
32 Redemptions
Repurchase agreements
33 Gross purchases
34 Gross sales
35 Net change in federal agency obligations
36 Total net change in System Open Market Account...
0
0
0
0
632
774
1,002
70
0
0
37
0
0
91
0
0
55
0
0
83
0
0
20
0
0
30
14,565
14,486
35,063
34,669
52,696
52,696
8,615
7,360
5,090
5,720
5,243
4,948
25
1,345
4,926
3,821
4,415
5,020
6,155
5,955
-554
-380
-1,002
1,185
-667
204
-1,375
1,022
-625
170
20,089
41,348
28,880
10,956
7,718
-8,883'
-741
4,691
1,379
2,444
1. Sales, redemptions, and negative figures reduce holdings of the System Open Market
Account; all other figures increase such holdings.
0
0
0
Federal Reserve Banks
1.18
FEDERAL RESERVE BANKS
All
Condition and Federal Reserve Note Statements1
Millions of dollars
Account
May 31
June 7
Wednesday
End of month
1995
1995
June 14
June 21
June 28
Apr. 30
May 31
June 30
Consolidated condition statement
ASSETS
1 Gold certificate account
2 Special drawing rights certificate account
3
Loans
4 To depository institutions
5
6 Acceptances held under repurchase agreements
Federal agency obligations
7 Bought outright
8 Held under repurchase agreements
9 Total U.S. Treasury securities
11,054
8,018
380
11,054
8,018
378
11,054
8,018
379
11,054
8,018
379
11,054
8,018
368
11,055
8,018
417
11,054
8,018
380
11,054
8,018
358
169
0
0
129
0
0
151
0
0
202
0
0
228
0
0
155
0
0
169
0
0
217
0
0
3,358
700
3,172
393
3,104
0
3,104
87
3,096
0
3,388
500
3,358
700
3,096
461
373,578
378,277
372,805
387,851
375,686
371,304
373,578
388,965
10 Bought outright
11 Bills
1? Notes
Bonds
N
14 Held under repurchase agreements
370,047
179,371
146,998
43,679
3,531
372,706
182,030
146,998
43,679
5,571
372,805
182,129
146,998
43,679
0
371,937
181,261
146,998
43,679
15,914
372,540
181,863
146,998
43,679
3,146
368,554
177,878
146,454
44,222
2,750
370,047
179,371
146,998
43,679
3,531
372,641
181,965
146,998
43,679
16,324
15 Total loans and securities
377,805
381,971
376,060
391,245
379,010
375,347
377,805
392,739
2
16 Items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies
19 All other4
20 Total assets
8,361
1,090
6,147
1,091
5,561
1,096
5,274
1,097
5,106
1,097
4,312
1,085
8,361
1,090
4,067
1,090
24,122
8,702
23,636
9,058
23,652
9,106
23,668
9,818
23,683
9,620
24,405
10,309
24,122
8,702
23,961
9,936
439,533
441,354
434,926
450,552
437,955
434,948
439,533
451,223
LIABILITIES
388,447
388,321
387,274
386,003
386,858
382,754
388,447
387,661
22 Total deposits
31,718
34,916
30,239
46,744
33,766
35,085
31,718
46,320
23 Depository institutions
24 U.S. Treasury—General account
25 Foreign—Official accounts
26
26,630
4,646
227
215
29,263
5,139
244
271
24,784
5,000
164
292
32,524
13,636
306
280
25,503
7,721
260
282
26,338
8,241
166
339
26,630
4,646
227
215
24,946
20,977
168
242
7,187
4,481
5,268
4,818
4,624
4,701
4,887
4,824
4,635
4,610
4,014
4,578
7,187
4,481
3,723
5,018
431,832
433,324
426,839
21 Federal Reserve notes
7.7 Deferred credit items
28 Other liabilities and accrued dividends
29 Total liabilities
442,458
429,869
426,432
431,832
442,723
3,807
3,670
222
3,815
3,683
1,002
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts
33 Total liabilities and capital accounts
3,807
3,670
222
3,817
3,683
529
3,821
3,683
583
3,817
3,683
594
3,814
3,683
589
3,794
3,683
1,039
439,533
441,354
434,926
450,552
437,955
434,948
439,533
451,223
446,653
450,921
452,735
452,305
447,726
440,236
446,653
456,421
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 Banks)
36 LESS: Held by Federal Reserve Banks
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
465,987
77,541
388,447
466,137
77,816
388,321
466,712
79,438
387,274
466,807
80,805
386,003
466,470
79,612
386,858
459,648
76,894
382,754
465,987
77,541
388,447
466,985
79,324
387,661
11,054
8,018
0
369,374
11,054
8,018
0
369,249
11,054
8,018
0
368,202
11,054
8,018
0
366,931
11,054
8,018
0
367,787
11,055
8,018
0
363,681
11,054
8,018
0
369,374
11,054
8,018
0
368,590
388,447
388,321
387,274
386,003
386,858
382,754
388,447
387,661
1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly
statistical release. For ordering address, see inside front cover.
2. Includes securities loaned—fully guaranteed by US. 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
1.19
Domestic Financial Statistics • September 1995
FEDERAL RESERVE BANKS
Maturity Distribution of Loan and Security Holding
Millions of dollars
Type of holding and maturity
May 31
June 7
Wednesday
End of month
1995
1995
June 14
June 21
June 28
Apr. 30
May 31
June 30
169
129
151
202
228
153
163
239
81
88
24
105
27
125
178
24
205
23
146
7
134
29
163
75
373,578
378,277
372,805
387,851
375,686
368,554
373,578
372,641
22,173
89,258
112,151
86,530
28,511
34,955
17,907
91,654
118,720
86,530
28,511
34,955
16,372
87,667
118,770
86,530
28,511
34,955
33,190
85,645
119,020
86,530
28,511
34,955
21,088
89,811
114,790
86,530
28,511
34,955
11,454
94,921
112,383
87,850
25,263
36,683
22,173
89,258
112,151
86,530
28,511
34,955
6,277
95,686
121,467
85,746
28,511
34,955
11 Total federal agency obligations
4,057
3,565
3,104
3,191
3,096
3388
4,057
3,096
12
13
14
15
16
17
1,134
408
790
1,284
417
25
451
668
795
1,209
417
25
8
680
795
1,179
417
25
305
470
795
1,179
417
25
210
516
749
1,179
417
25
160
587
831
1,368
417
25
1,134
408
790
1,284
417
25
210
516
749
1,179
417
25
1 Total loans
2 Within fifteen days'
3 Sixteen days to ninety days
4 Total U.S. Treasury securities
5
6
7
8
9
10
Within fifteen days'
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
Within fifteen days'
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
1. Holdings under repurchase agreements are classified as maturing within fifteen days
in accordance with maximum maturity of the agreements.
NOTE. Total acceptances data have been deleted from this table because data are no
longer available.
Monetary and Credit Aggregates
1.20
A13
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
1994
Item
1991
Dec.
1992
Dec.
1995
1994
Dec.
1993
Dec.
Nov.
Dec.
Feb.
Mar.
Apr.
May'
June
58.92
58.86
58.86
57.97
422.31
58.55
58.48
58.48
57.76
425.35
57.96
57.85
57.85
57.20
428.13
57.76
57.61
57.61
56.88
430.69
57.35
57.08
57.08
56.39
429.73
Jan.
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
Total reserves3
Nonborrowed reserves4
Nonborrowed reserves plus extended credit
Required reserves
Monetary base
45.54
45.34
45.34
44.56
317.43
54.35
54.23
54.23
53.20
351.12
60.50
60.42
60.42
59.44
386.60
59.34
59.13
59.13
58.17
418.22
59.40
59.15
59.15
58.39
416.79
59.34
59.13
59.13
58.17
418.22
59.12
58.99
58.99
57.79
421.05
Not seasonally adjusted
6
7
8
9
10
Total reserves7
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base9
46.98
46.78
46.78
46.00
321.07
56.06
55.93
55.93
54.90
354.55
62.37
62.29
62.29
61.31
390.59
61.13
60.92
60.92
59.96
422.51
59.73
59.48
59.48
58.72
417.08
61.13
60.92
60.92
59.96
422.51
60.52
60.38
60.39
59.18
421.84
57.72
57.66
57.66
56.78
419.25
57.62
57.55
57.55
56.83
423.27
58.93
58.82
58.82
58.18
428.74
56.82
56.68
56.68
55.95
429.29
57.13
56.86
56.86
56.16
430.23
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
62.86
62.78
62.78
61.80
397.62
1.06
.08
61.34
61.13
61.13
60.17
427.25
1.17
.21
60.01
59.76
59.76
59.00
421.90
1.01
.25
61.34
61.13
61.13
60.17
427.25
1.17
.21
60.52
60.39
60.39
59.18
426.31
1.34
.14
57.70
57.64
57.64
56.75
423.57
.95
.06
57.58
57.51
57.51
56.79
427.56
.79
.07
58.87
58.76
58.76
58.12
432.79
.75
.11
56.76
56.61
56.61
55.88
433.47
.88
.15
57.05
56.77
56.77
56.08
434.54
.97
.27
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 0
11
12
13
14
15
16
17
Total reserves"
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base12
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 starting in 1959 and estimates of the impact on
required reserves of changes in reserve requirements are available from the Money 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 "breaks," associated with regulatory changes in reserve requirements. (See also table 1.10)
3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, breakadjusted 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 short-term 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 cuirency
component of the money stock, plus (3) (for all quarterly reporters on the "Report of
Transaction Accounts, Other Deposits and Vault Cash" 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 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 ail
quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" 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 regulatory
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 (1)
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 Cash" 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 contemporaneous reserve
requirements in February 1984, 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
1.21
Domestic Financial Statistics • September 1995
MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES 1
Billions of dollars, averages of daily figures
1995r
Item
1991
Dec.
1992
Dec.
1993
Dec.
1994
Dec.
Mar.
Apr.
May
June
Seasonally adjusted
Measures2
1 Ml
2 M2
3 M3
4L
5 Debt
897.3
3,457.9
4,176.0
4,990.9
11,178.2
1,024.4
3,515.3
4,182.9
5,061.1
11,716.7
1,128.6
3,583.6
4,242.5
5,150.3
12,343.8
1,148.0"
3,615.6r
4,305.0r
5,294.5r
12,955.5
1,147.9
3,630.1
4,359.0
5,409.3
13,149.9
1,149.7
3,642.6
4,380.7
5,454.0
13,202.2
1,142.9
3,658.1
4,408.7
5,485.4
13,261.3
1,143.7
3,693.0
4,452.7
n.a.
n.a.
267.4
7.7
289.5
332.7
292.8
8.1
338.9
384.6
322.1
7.9
383.9
414.7
354.5
8.4
382.2r
402.9
362.5
8.8
383.3
393.3
365.7
9.2
381.3
393.6
368.1
9.2
380.7
385.0
367.4
9.0
386.9
380.5
2,560.6
718.1
2,490.9
667.6
2,455.0
658.9
2,467.6r
689.4
2,482.1
729.0
2,492.9
738.1
2,515.2
750.6
2,549.3
759.7
Commercial banks
12 Savings deposits, including MMDAs
13 Small time deposits
14 Large time deposits ' "
665.6
602.5
333.3
754.7
508.1
286.7
785.8
468.6
271.2
752.3
502.4
299.2r
723.3
537.6
310.6
716.0
547.9
310.8
717.3
555.8
317.2
728.0
562.5
319.4
Thrift institutions
15 Savings deposits, including MMDAs
16 Small time deposits
17 Large time deposits
375.6
464.1
83.3
428.9
361.1
67.1
429.8
316.5
61.6
391.9
317.7r
64.9f
371.5
340.4
70.1
366.4
348.6
71.2
364.2
354.3
70.3
363.0
354.8
70.7
Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only
374.2
180.0
356.9
200.2
360.1
198.1
389.0
180.8
390.9
189.0
396.0
192.9
405.3
194.8
425.9
205.6
2,763.3
8,414.8
3,067.9
8,648.8
3,328.0
9,015.9
3,497.4
9,458.1
3,557.5
9,592.4
3,559.5
9,642.7
3,577.0
9,684.3
n.a.
n.a.
6
7
8
9
Ml components
Currency
Travelers checks4
Demand deposits5
Other checkable deposits
Nontrqnsaction components
10 In M27
11 In M38 only
Debt components
20 Federal debt
21 Nonfederal debt
Not seasonally adjusted
22
23
24
25
26
Measures1
Ml
M2
M3
L
Debt
27
28
29
30
Ml components
Currency3
Travelers checks4
Demand deposits5
Other chectable deposits6
916.0
3,472.7
4,189.4
5,015.5
11,175.5
1,046.0
3,533.6
4,201.4
5,090.8
11,719.5
1,153.7
3,606.1
4,266.3
5,184.9
12,336.0
1,173.7C
3,639. l r
4,331.0r
5,332.2r
12,947.2
1,138.1
3,628.1
4,354.9
5,408.5
13,102.1
1,158.7
3,659.0
4,392.4
5,464.1
13,135.9
1,132.0
3,645.7
4,398.5
5,464.1
13,174.6
1,139.1
3,688.5
4,446.4
n.a.
n.a.
269.9
7.4
302.4
336.3
295.0
7.8
354.4
388.9
324.8
7.6
401.8
419.4
357.6
8.1
400.3r
407.6
361.4
8.4
374.1
394.2
365.5
8.8
382.0
402.3
367.8
8.9
372.9
382.4
368.1
9.2
382.7
379.1
2,556.6
716.7
2,487.7
667.7
2,452.4
660.2
2,465.4r
691.9'
2,490.0
726.8
2,500.3
733.5
2,513.7
752.7
2,549.4
757.8
Commercial banks
33 Savings deposits, including MMDAs
34 Small time deposits9
35 Large time deposits ' 11
664.0
601.9
332.6
752.9
507.8
286.2
784.3
468.2
270.8
751.1
502.0
298.9r
723.4
537.4
308.5
717.9
547.3
308.7
717.9
554.7
319.6
730.1
562.0
320.8
Thrift institutions
36 Savings deposits, including MMDAs
37 Small time deposits9
38 Large time deposits
374.8
463.7
83.1
427.9
360.9
67.0
429.0
316.2
61.5
391.2
317.4r
64.8r
371.6
340.3
69.6
367.4
348.2
70.7
364.5
353.6
70.9
364.1
354.6
71.1
Money market mutual funds
39 General purpose and broker-dealer
40 Institution-only
372.2
180.8
355.1
201.7
358.3
200.0
387.1
183.1
399.8
190.8
404.8
191.3
407.8
193.8
423.6
199.2
Repurchase agreements and Eurodollars
41 Overnight and continuing
42 Term
79.9
132.7
83.2
127.8
96.5
144.1
116.7
157.6r
117.6
171.0
114.8
175.4
115.2
181.2
115.0
180.0
2,765.0
8,410.5
3,069.8
8,649.7
3,329.5
9,006.5
3,499.0
9,448.2
3,551.1
9,551.0
3,544.1
9,591.8
3,552.6
9,621.9
Nontransaction components
31 InM2 78
32 In M3
Debt components
43 Federal debt
44 Nonfederal debt
Footnotes appear on following page.
n.a.
n.a.
Monetary and Credit Aggregates
A15
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 starting in 1959 are available from the Money
and Reserves Projections 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 (IRLAS) 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 Ml.
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 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: The debt aggregate is the outstanding credit market debt of the domestic
nonfinancial sectors—the federal sector (U.S. government, not including governmentsponsored enterprises or federally related mortgage pools) and the nonfederal sectors
(state and local governments, households and nonprofit organizations, nonfinancial corporate and nonfarm noncorporate businesses, and farms). Nonfederal debt consists of
mortgages, tax-exempt and corporate bonds, consumer credit, bank loans, commercial
paper, and other loans. The data, which are derived from the Federal Reserve Board's flow
of funds accounts, are break-adjusted (that is, discontinuities in the data have been
smoothed into the series) and month-averaged (that is, the data have been derived by
averaging adjacent month-end levels).
3. Currency outside the US. 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 institutiononly 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, the U.S. government, and foreign banks and official institutions.
A16
1.22
Domestic Financial Statistics • September 1995
DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING
Commercial and BIF-insured saving banks1
1994
-
1992
1993
Dec.
Dec.
Oct.
1995
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
1.96
1.94
3.20
3.20
4.19
4.82
June
Interest rates (annual effective yields)2
INSURED COMMERCIAL B A N K S
1 Negotiable order of withdrawal accounts
2 Savings deposits3
3
4
5
6
7
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 2 Vi years
More than 2 vi years
BIF-INSURED SAVINGS
1.86
2.46
2.90
2.65
3.16
3.37
2.91
3.88
3.13
3.55
4.77
4.29
2.45
3.20
1.87
2.63
3.13
3.44
2.70
3.02
3.61
4.02
3.31
1.88
2.72
1.92
2.81
2.91
1.98
2.98
2.01
3.09
2.00
3.14
1.95
3.17
3.65
4.22
3.81
4.44
3.96
4.19
4.24
4.67
4.83
4.97
4.28
4.94
4.25
3.93
4.50
5.08
4.85
5.42
5.12
5.74
5.39
6.00
5.57
6.12
5.60
6.12
5.60
6.05
5.49
5.83
5.77
6.09
6.30
6.47
6.52
6.45
6.37
6.11
5.53
5.79
1.88
2.76
1.91
2.83
1.95
2.88
1.99
2.91
2.04
1.99
2.94
1.99
2.93
2.00
2.95
2.01
2.99
3.32
3.51
3.98
5.13
4.21
5.37
5.39
4.42
5.18
5.70
3.80
4.89
5.52
4.17
4.10
4.80
5.79
6.18
6.09
6.43
6.29
6.68
3.47
1.96
4.93
5.27
BANKS4
8 Negotiable order of withdrawal accounts
9 Savings deposits3
10
11
12
13
14
2.33
2.88
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 2 Vi years
More than 2 Vi years
5.00
3.66
4.62
5.75
2.95
5.33
5.94
6.37
6.75
4.18
4.24
4.22
5.38
5.87
5.31
5.20
5.94
5.63
6.32
6.68
6.25
6.59
5.83
6.08
6.32
5.99
5.77
Amounts outstanding (millions of dollars)
INSURED COMMERCIAL BANKS
15 Negotiable order of withdrawal accounts
16 Savings deposits3
17 Personal
18 Nonpersonal
19
20
21
22
23
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 2 Vi years
More than 2 Vz years
24 IRA and Keogh plan deposits
286,541
738,253
578,757
159,496
305,223
766,413
597,838
168,575
294,072
751,183
590,875
160,308
294,282
746,605
584,628
161,977
303,724
734,519
578,459
156,060
291,355
723,295
569,619
153,676
290,188
714,955
564,877
150,078
292,811
713,440
564,086
149,354
286,987
698,963
550,674
148,289
274,281
714,989
560,563
154,426
274,620
717,293
562,367
154,926
38,474
127,831
163,098
152,977
169,708
29,455
110,069
146,565
141,223
181,528
31,447
95,359
158,753
155,111
188,479
31,077
94,692
159,645
158,382
189,741
32,375
95,901
161,831
162,486
190,897
32,154
96,895
163,939
168,515
190,215
31,777
98,248
169,103
176,877
191,383
31,623
95,583
176,657
183,275
194,722
31,530
94,368
179,625
189,652
194,426
31,472
93,188
184,560
194,963
192,542
32,321
91,707
187,514
199,330
194,272
147,350
143,985
142,896
143,075
143,428
143,900
145,040
145,959
146,679
146,842
148,843
10,871
81,786
78,695
3,091
11,151
80,115
77,035
3,079
11,120
73,416
70,215
3,201
11,002
72,622
69,412
3,211
11,317
70,642
67,673
2,969
11,127
71,639
68,760
2,878
10,950
69,982
67,144
2,837
11,218
68,595
65,692
2,902
11,005
67,453
64,204
3,248
11,019
67,322
64,484
2,838
11,355
67,159
64,323
2,836
3,867
17,345
21,780
18,442
18,845
2,793
12,946
17,426
16,546
20,464
2,245
11,987
18,123
17,519
21,624
2,209
11,913
18,509
17,999
21,687
2,166
11,793
18,753
17,842
21,600
2,041
12,084
19,336
20,460
21,888
2,086
11,953
19,979
21,870
22,275
1,943
11,707
20,277
22,648
22,446
1,780
11,245
21,051
23,445
22,671
1,885
11,449
20,956
24,014
22,819
1,618
11,144
21,056
24,801
23,193
21,713
19,356
19,550
19,532
19,325
19,802
20,099
20,221
20,388
20,236
20,458
BIF-INSURED SAVINGS B A N K S 4
25 Negotiable order of withdrawal accounts
26 Savings deposits3
27
Personal
28
Nonpersonal
29
30
31
32
33
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 2Vi years
34 IRA and 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 425 commercial banks and 75 savings banks on the last
day of each month. Data are not seasonally adjusted and include IRA and Keogh deposits
and foreign currency-denominated deposits. Data exclude retail repurchase agreements
and deposits held in U.S. branches and agencies of foreign banks.
2. As of October 31, 1994, interest rate data for NOW accounts and savings deposits
reflect a series break caused by a change in the survey used to collect these data.
3. Includes personal and nonpersonal money market deposits.
4. Includes both mutual and federal savings banks.
Monetary and Credit Aggregates
1.23
A17
BANK DEBITS AND DEPOSIT TURNOVER 1
Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates
1995r
1994
Bank group, or type of deposit
19922
19932
19942
Nov.
Dec.
4 Other checkable deposits4
5 Savings deposits (including MMDAs)
Feb.
Mar.
Apr.
Seasonally adjusted
DEBITS
Demand depositP
1 All insured banks
2 Major New York City banks
3 Other banks
Jan.
313,128.1
165,447.7
147,680.4
334,245.6
171,227.3
163,018.3
367,129.2
191,169.8
175,959.4
369,211.3
186,350.6
182,860.7
371,048.0
187,955.6
183,092.4
370,350.3
183,457.9
186,892.5
384,430.7
195,127.7
189,303.0
393,984.5
197,659.6
1%,324.9
363,199.3
185,763.1
177,436.2
3,780.3
3,309.1
3,467.1
3,508.8
3,831.4
3,737.1
4,116.4
3,835.7
4,199.0
4,033.1
4,000.1
3,930.8
3,900.0
3,994.7
4,036.0
3,894.2
3,658.8
3,572.0
825.9
4,795.3
428.7
785.3
4,198.1
423.6
813.0
4,481.6
430.3
826.5
4,544.7
450.7
820.6
4,490.8
446.3
822.3
4,338.4
458.0
857.6
4,662.0
465.8
881.8
4,753.9
484.5
808.9
4,551.5
434.7
14.4
4.7
11.8
4.6
12.8
4.9
13.9
5.1
14.2
5.4
13.6
5.4
13.3
5.5
13.9
5.4
12.6
5.0
DEPOSIT TURNOVER
Demand depositS3
6 All insured banks
7 Major New York City banks
8 Other banks
9 Other checkable deposits4
10 Savings deposits (including MMDAs)5
Not seasonally adjusted
DEBITS
Demand deposits^
11 All insured banks
12 Major New York City banks
13 Other banks
14 Other checkable deposits4
15 Savings deposits (including MMDAs)5
313,344.9
165,595.0
147,749.9
334,354.6
171,283.5
163,071.0
367,218.8
191,226.1
175,992.8
359,229.9
184,656.3
174,573.5
384,218.7
194,120.1
190,098.6
369,311.0
181,602.7
187,708.3
356,062.1
181,697.8
174,364.4
412,887.7
209,255.5
203,632.2
358,224.1
180,169.1
178,055.0
3,783.6
3,310.0
3,467.5
3,509.5
3,827.9
3,734.9
3,845.9
3,640.4
4,365.1
4,244.8
4,343.2
4,109.1
3,593.1
3,615.8
4,075.0
3,994.3
3,866.4
3,733.7
826.1
4,803.5
428.8
785.4
4,197.9
423.8
813.8
4,490.3
430.6
785.9
4,391.6
420.6
814.9
4,343.4
445.4
803.0
4,128.1
451.3
812.8
4,334.9
440.2
947.9
5,145.1
515.6
797.7
4,459.5
435.7
14.4
4.7
11.8
4.6
12.7
4.9
13.0
4.8
14.5
5.7
14.4
5.6
12.3
5.0
14.0
5.6
13.0
5.2
DEPOSIT TURNOVER
Demand deposits3
16 All insured banks
17 Major New York City banks
18 Other banks
19 Other checkable deposits4
20 Savings deposits (including MMDAs)
1. Historical tables containing revised data for earlier periods can be obtained from the
Publications Section, Division of Support Services, Board of Governors of the Federal
Reserve System, Washington, DC 20551.
Data in this table also appear in 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. As of January 1994, other checkable deposits (OCDs), previously defined as
automatic transfer to demand deposits (ATSs) and negotiable order of withdrawal (NOW)
accounts, were expanded to include telephone and preauthorized transfer accounts. This
change redefined OCDs for debits data to be consistent with OCDs for deposits data.
5. Money market deposit accounts.
A18
1.26
Domestic Financial Statistics • September 1995
ASSETS A N D LIABILITIES OF COMMERCIAL BANKS 1
Billions of dollars
Monthly averages
Account
1994
1994
June'
Dec.
Wednesday figures
1995r
Jan.
Feb.
Mar.
A L L COMMERCIAL
1995
Apr.
May
June
June 7
June 14
June 21
June 28
Seasonally adjusted
B A N K I N G INSTITUTIONS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other
Interbank loans4
Cash assets5
Other assets6
16 Total assets7
17
18
19
20
21
22
23
24
25
26
3,220.0
968.4
752.1
216.3
2,251.6
611.3
957.3
73.8
883.5
416.1
76.2
190.7
155.4
215.1
223.2
3,316.5r
947. l r
720.2
226.9r
2,369.4r
644.6
999.8
76.2
923.6
452.2
70.9
201.9r
175.0
209.0
227.4
3,756.7
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices
Other liabilities8
27 Total liabilities
28 Residual (assets less liabilities)9
3,349.4
945.6
721.9
223.7
2,403.8
657.7
1,015.1
76.7
938.5
457.5
68.6
204.9
179.0
219.4
237.0
3,363.0
937.4
717.0
220.4
2,425.6
669.5
1,022.8
77.0
945.8
459.7
67.8
205.8
177.8
216.0
242.4
3,387.6
941.5
704.8
236.7
2,446.0
673.0
1,028.4
77.3
951.2
465.3
69.7
209.6
180.2
206.9
242.8
3,447.0
974.8
704.7
270.1
2,472.2
681.5
1,035.9
78.0
958.0
471.1
73.1
210.6
178.7
208.1
232.0
3,473.0
971.6
707.4
264.1
2,501.4
689.7
1,040.2
78.7
961.5
472.8
84.5
214.3
183.9
210.5
231.8
3,492.2
975.3
709.4
265.9
2,516.9
692.4
1,047.5
79.3
968.2
478.0
85.3
213.6
187.8
211.1
226.2
3,484.1
970.8
707.8
263.0
2,513.3
689.6
1,044.1
79.1
965.0
478.0
89.9
211.6
186.1
211.4
234.4
3,491.7
977.4
710.7
266.7
2,514.3
692.1
1,046.1
79.2
966.9
478.2
84.2
213.7
185.1
207.7
235.9
3,494.2
978.5
710.4
268.1
2,515.7
693.8
1,049.0
79.2
969.7
476.4
83.1
213.5
190.2
216.1
219.2
3,499.4
977.1
710.8
266.3
2,522.3
693.4
1,049.5
79.5
970.0
479.0
85.5
215.0
187.8
206.5
213.4
3,928.0
3,942.7
3,961.0
4,00&8
4,0423
4,060.0
4,058.9
4,063.2
4,0625
4,049.6
2,508.0
811.4
1,696.6
333.7
1,362.9
565.1
154.4
• 410.6
186.6
181.0
2,528.8'
797.6
l,731.2r
362.0"
l,369.2r
602.9'
176.8
426.1r
225.6
185.3r
2,544.0
808.6
1,735.4
366.4
1,369.0
635.5
181.1
454.4
244.8
179.9
2,547.3
804.9
1,742.4
373.7
1,368.7
637.6
178.4
459.2
252.5
184.1
2^48.2
795.5
1,752.7
380.1
1,372.6
642.9
182.0
460.9
241.3
202.0
2,556.7
791.2
1,765.5
385.8
1,379.7
667.8
181.5
486.4
234.9
224.4
2,570.9
788.4
1,782.5
389.7
1,392.7
674.5
183.5
491.0
240.0
219.8
2,590.3
785.3
1,805.0
392.4
1,412.5
661.7
185.0
476.7
245.8
218.5
2,589.6
783.3
1,806.3
396.5
1,409.8
644.6
183.4
461.2
245.9
224.2
2,597.1
786.6
1,810.6
395.8
1,414.8
661.4
183.3
478.2
238.4
228.0
2,588.7
784.6
1,804.2
392.3
1,411.9
668.6
186.5
482.1
255.7
215.5
2,581.4
781.0
1,800.3
387.5
1,412.8
668.6
183.8
484.8
244.1
208.2
3,440.6
3,5425'
3,6043
3,621.5
3,6344
3,683.9
3,705.1
3,7163
3,7044
3,725.0
3,7284
3,7023
316.1
329.2r
323.7
321.2
326.6
324.9
337.1
343.7
354.5
338.2
334.1
347.3
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Assets
Bank credit
Securities in bank credit
US. government securities
Other securities
Loans and leases in bank credit2 . ..
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other
Interbank loans4
Cash assets5
Other assets6
44 Total assets7
45
46
47
48
49
50
51
52
53
54
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices
Other liabilities8
55 Total Uabilities
9
56 Residual (assets less liabilities)
Footnotes appear onfollowingpage.
3,217.6
969.1
752.2
216.9
2,248.5
612.9
957.1
73.8
883.3
413.8
73.3
191.3
153.7
213.4
221.7
3,332.5r
942.4r
719.1
223.3r
2,390. l r
645.3
1,006.2
76.3
930.0
457.2
75.5
205.9'
185.7
222.9
233.2
3,345.5'
939.6'
715.7
223.9'
2,405.9'
654.4'
1,013.4
76.6
936.8
462.2
70.8
205.0'
185.9
224.8
236.9
3,358.9
936.2
712.6
223.6
2,422.7
668.1
1,018.9
76.7
942.3
461.0
71.0
203.7
179.9
212.6
240.1
3,388.1
949.3
709.8
239.5
2,438.8
676.1
1,023.6
76.6
947.0
461.8
70.9
206.4
178.5
201.3
238.0
3,448.1
981.4
709.0
272.4
2,466.7
685.9
1,031.7
77.4
954.3
467.9
74.0
207.2
178.2
204.4
228.0
3,464.7
973.1
706.6
266.5
2,491.6
692.8
1,038.5
78.6
960.0
471.3
78.8
210.1
178.5
208.0
231.1
3,488.7
975.7
708.6
267.2
2,513.0
694.4
1,047.3
79.3
968.0
475.4
81.5
214.4
184.8
209.3
224.8
3,482.7
975.9
710.1
265.8
2,506.8
691.7
1,043.4
79.0
964.5
475.1
83.7
212.9
185.6
207.0
232.4
3,490.8
978.1
710.1
268.0
2,512.8
692.9
1,046.4
79.2
967.2
475.2
84.4
213.8
186.0
208.3
233.7
3,493.5
980.5
711.1
269.4
2,513.0
696.5
1,047.9
79.3
968.6
474.2
80.8
213.6
181.5
210.2
215.5
3,488.0
972.5
706.0
266.4
2,515.6
695.1
1,049.6
79.7
970.0
477.0
78.7
215.2
181.7
202.9
213.9
3,7494
wn.r
3,936.6'
3,934.9
3,949.2
4,002.1
4,0253
4,0504
4,050.6
4,061.6
4,0434
4,0294
2,506.1
807.2
1,698.9
335.8
1,363.1
571.3
153.8
417.5
181.3
176.9
2,561.6r
833.3
l,728.3r
360.5'
1,367.8'
615.4'
185.7
429.7'
230.3
188.4'
2^48.0'
818.9
1,729.0
363.2'
1365.9^
629.0'
185.9
443.1'
251.4
182.9'
2,538.0
796.0
1,742.0
373.9
1,368.0
634.3
179.7
454.5
249.5
184.7
2,538.5
783.3
1,755.1
381.3
1,373.8
632.4
178.3
454.1
245.2
201.2
2,559.7
796.1
1,763.6
384.4
1,379.2
650.8
178.0
472.9
237.4
219.1
2,561.8
777.2
1,784.7
394.0
1,390.7
660.9
178.2
482.6
246.0
218.0
2,587.5
779.7
1,807.8
394.9
1,412.9
668.0
184.8
483.2
240.0
213.7
2,599.8
783.2
1,816.7
401.7
1,415.0
652.0
185.3
466.7
237.2
219.2
2,607.4
790.1
1,817.3
399.9
1,417.4
658.5
186.0
472.5
231.7
222.0
2,566.5
762.4
1,804.1
394.9
1,409.2
682.2
181.5
500.7
246.2
208.6
2,559.5
764.3
1,795.2
386.9
1,408.3
676.4
181.7
494.7
246.3
206.8
3/435.6
3^95^
3,61U r
3,606.5
3,617.2
3,667.1
3,686.7
3,709.2
3,7083
3,719.6
3,7034
3,689.0
313.8
322.0'
325.3'
328.4
331.9
334.9
338.6
341.2
342.3
342.0
339.9
340.4
Commercial Banking Institutions
1.26
A19
ASSETS AND LIABILITIES OF COMMERCIAL BANKS 1 —Continued
Billions of dollars
Wednesday figures
Monthly averages
Account
1994
1994
June"
Dec.
1995
1995"
Jan.
Feb.
Mar.
Apr.
May
June
June 7
June 14
June 21
June 28
Seasonally adjusted
DOMESTICALLY CHARTERED
COMMERCIAL B A N K S
Assets
57 Bank credit
58 Securities in bank credit
59
U.S. government securities
60
Other securities
61 Loans and leases in bank credit2
Commercial and industrial
67
63
Real estate
Revolving home equity
64
65
Other
Consumer
66
Security3
67
68
Other
69 Interbank loans4
70
71 Other assets6
2,877.0
884.3
691.8
192.5
1,992.6
455.7
913.8
73.8
840.0
416.1
49.7
157.5
130.4
188.4
169.9
2,966. l r
868.7"
669.0
199.7r
2,097.4
480.3
958.7
76.2
882.5
452.2
45.4
160.8
151.4
181.8
167.7
2,997.6
864.3
668.6
195.8
2,133.2
492.1
974.6
76.7
897.9
457.5
45.5
163.5
155.0
192.2
171.8
3,001.3
848.8
656.9
191.9
2,152.5
499.0
982.7
77.0
905.7
459.7
46.5
164.5
155.1
190.2
173.3
3,020.5
852.7
646.4
206.3
2,167.9
502.3
988.9
77.2
911.6
465.3
45.9
165.5
156.4
180.9
167.9
3,052.8
862.2
643.5
218.6
2,190.7
510.4
997.2
77.9
919.3
471.1
45.4
166.6
157.2
181.2
165.2
3,074.7
859.0
644.4
214.6
2215.7
516.3
1,002.2
78.7
923.5
472.8
54.0
170.3
160.2
181.5
164.2
3,088.9
856.1
643.3
212.8
2232.8
518.6
1,009.8
79.3
930.5
478.0
55.5
170.9
164.8
183.4
165.2
3,088.7
857.1
645.0
212.1
231.5
517.2
1,006.3
79.1
927.2
478.0
59.6
170.5
163.5
183.1
164.9
3,090.7
861.0
646.3
214.7
2229.7
517.9
1,008.2
79.2
929.1
478.2
55.2
170.2
165.7
179.9
167.6
3,085.5
856.0
642.7
213.3
2229.6
518.7
1,011.3
79.2
9321
476.4
52.9
170.2
163.3
188.6
164.9
3,089.5
852.0
640.6
211.4
2237.6
519.2
1,011.7
195
932.2
479.0
55.8
171.8
164.0
179.0
163.4
72 Total assets7
3,308.7
3,410.9"
3,459.8
3,463.5
3,4693
3,499.5
3,523.6
3,545.1
3,543.2
3£46£
3^45.1
3£38£
Liabilities
73 Deposits
74
75 Nontransaction
76
Large time
Other
77
78 Borrowings
79 From banks in the U.S
80 From nonbanks in the U.S
81 Net due to related foreign offices....
82 Other liabilities8
2,368.7
800.9
1,567.8
208.2
1,359.6
460.1
134.8
325.3
34.9
137.7
2,370.9"
787.3
1,583.5
219.2"
1,364.3"
501.8"
162.3
339.5"
77.4
133.4"
2,390.3
798.6
1,591.7
226.7
1,365.0
535.4
164.6
370.8
91.5
125.2
2,395.8
794.6
1,601.1
235.9
1,365.3
534.3
161.5
372.8
87.9
126.4
2,394.0
784.8
1,609.1
240.5
1,368.7
532.0
164.4
367.6
85.2
137.0
2,396.1
780.8
1,615.3
241.6
1,373.6
555.1
162.4
392.7
82.3
148.9
2,406.8
778.2
1,628.6
243.9
1,384.7
561.4
163.2
398.3
84.3
143.4
2,422.2
775.1
1,647.1
244.1
1,403.0
555.4
167.8
387.6
91.0
142.5
2,417.2
772.7
1,644.5
245.3
1,399.2
541.5
168.1
373.4
91.3
146.7
2,425.5
776.2
1,649.3
245.2
1,404.1
555.1
165.6
389.6
89.8
147.7
2,422.2
774.9
1,647.3
244.1
1,403.2
5626
168.8
393.8
95.8
141.4
2416.8
770.9
1,645.8
242.0
1,403.9
560.7
166.6
394.1
89.0
136.0
83 Total liabilities
3,001.4
3,083.5"
3,1424
3,144.4
3,148.2
3,1824
3,195.9
3,211.1
3,196.7
3^183
3^224
3,2025
307.3
327.4"
317.4
319.1
321.2
317.1
327.7
334.1
346.6
328.6
323.1
336.0
84 Residual (assets less liabilities)9
Not seasonally adjusted
Assets
S5 Bank credit
86 Securities in bank credit
U.S. government securities
87
88
Other securities
89 Loans and leases in bank credit2
90
Commercial and industrial
91
Real estate
97
Revolving home equity
Other
Consumer
94
95
Security3
96
Other
97 Interbank loans4
98
99 Other assets6
100 Total assets7
101
10?
103
104
105
106
107
108
109
110
Liabilities
Deposits
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices....
Other liabilities8
111 Total liabilities
9
112 Residual (assets less liabilities)
Footnotes appear on following page.
2,877/7
886.8
693.0
193.8
1,990.9
457.2
913.7
73.8
839.9
413.8
48.8
157.5
129.9
186.1
169.1
2,993.7"
862.4"
665.9
196.6"
2,111.3
480.1
965.1
76.2
888.9
457.2
45.9
163.1
159.7
195.5
170.0
2,988.6
856.9
661.1
195.8
2,131.6
488.5
973.0
76.6
896.4
462.2
44.9
162.9
160.4
198.0
171.3
2,996.7
847.9
653.8
194.2
2,148.7
498.5
978.7
76.6
902.1
461.0
47.8
162.7
158.1
187.8
171.1
3,019.8
859.5
650.8
208.7
2,160.4
505.0
983.9
76.6
907.4
461.8
46.6
163.0
155.8
175.8
164.9
3,057.1
870.0
648.9
221.1
2,187.1
514.7
993.4
77.4
916.0
467.9
46.8
164.4
157.0
178.3
162.9
3,073.1
861.4
645.3
216.1
2,211.7
520.1
1,000.6
78.6
922.1
4713
51.9
167.8
155.3
180.3
163.6
3,089.9
859.2
644.2
215.0
2,230.7
520.4
1,009.6
79.3
930.3
475.4
54.3
170.9
163.2
181.0
164.6
3,092.2
863.8
648.6
215.2
2,228.4
519.5
1,005.6
78.9
926.7
475.1
57.6
170.6
165.1
178.6
163.4
3,095.1
864.7
647.5
217.3
2,230.3
519.4
1,008.6
79.2
929.4
475.2
57.1
170.1
168.2
179.9
166.3
3,087.5
860.0
644.3
215.7
2,227.4
521.1
1,010.1
79.3
930.9
474.2
52.4
169.6
158.5
182.2
162.2
3,083.7
851.2
638.7
212.5
2232.5
520.3
1,012.2
79.6
932.5
477.0
51.6
171.5
155.8
174.4
164.6
3,306.0
3&2Ar
3,461.9"
3/157.1
3,459.8
3,498.6
3,5153
3^414
3^42-2
3,5523
3,533.1
3^214
2,364.3
796.9
1,567.4
207.9
1,359.6
464.6
133.9
330.6
34.4
134.1
2,403.7
822.8
1,580.9
217.6"
1,363.3"
513.0"
169.8
343.2"
74.3
134.6"
2,394.7
808.7
1,585.9
224.6
1,361.3
529.8
168.8
361.0
90.2
127.1
2,385.8
785.8
1,600.0
236.1
1,363.9
533.3
163.2
370.1
88.7
126.1
2,382.3
773.1
1,609.2
239.3
1,369.9
523.2
160.7
362.4
90.1
137.4
2,400.3
786.1
1,614.2
240.9
1,373.2
538.3
160.0
378.2
84.6
145.7
2,395.8
767.5
1,628.3
245.5
1,382.8
552.1
159.9
392.2
92.6
141.3
2,416.3
769.6
1,646.7
243.6
1,403.1
559.9
167.5
392.4
90.4
138.7
2,423.8
773.1
1,650.8
246.9
1,403.9
547.8
169.8
378.0
91.4
142.1
2,432.6
780.1
1,652.5
245.9
1,406.6
550.3
167.4
383.0
89.3
143.2
2396.5
753.0
1,643.6
243.7
1,399.8
573.3
164.8
408.6
92.3
136.2
2391.7
753.7
1,638.0
238.9
1,399.1
568.2
164.6
403.5
91.8
134.5
2^974
3,125.r
3,141.8
3,133.9
3,133.0
3,168*
3,181.8
3,2053
3,205.0
3,215.4
3,1984
3,1862
320.1
323.2
333.5
336.1
337.2
336.9
334.8
335.2
308.6
316.7"
326.8
329.8
A20
Domestic Financial Statistics • September 1995
NOTES TO TABLE 1.26
1. Covers the following types of institutions in the fifty states and the District of
Columbia: domestically chartered commercial banks that submit a weekly report of
condition (large domestic); other domestically chartered commercial banks (small domestic); branches and agencies of foreign banks; New York State investment companies, and
Edge Act and agreement corporations (foreign-related institutions). Excludes international banking facilities. Data are Wednesday values, or pro rata averages of Wednesday
values. Large domestic banks constitute a universe; data for small domestic banks and
foreign-related institutions are estimates based on weekly samples and on quarter-end
condition reports. Data are adjusted for breaks caused by reclassifications of assets and
liabilities.
2. Excludes federal funds sold to, reverse repurchase agreements with, and loans to
commercial banks in the United States.
3. Consists of reserve repurchase agreements with broker-dealers and loans to purchase and carry securities.
4. Consists of federal funds sold to, reverse repurchase agreements with, and loans to
commercial banks in the United States.
5. Includes vault cash, cash items in process of collection, demand balances due from
depository institutions in the United States, balances due from Federal Reserve Banks,
and other cash assets.
6. Excludes the due-from position with related foreign offices, which is included in
lines 25, 53, 81, and 109.
7. Excludes unearned income, reserves for losses on loans and leases, and reserves for
transfer risk. Loans are reported gross of these items.
8. Excludes the due-to position with related foreign offices, which is included in lines
25,53, 81, and 109.
9. This balancing item is not intended as a measure of equity capital for use in capital
adequacy analysis.
Weekly Reporting Commercial Banks
1.27
A21
ASSETS A N D LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS
Millions of dollars, Wednesday figures
June 14
June 21
June 28
May 3
May 10
May 17
May 24
May 31
June 7
1 Cash and balances due from depository institutions ..
2 U.S. Treasury and government securities
3 Trading account
4 Investment account
5
Mortgage-backed securities1
All others, by maturity
6
One year or less
One year through five years
7
More than five years
8
9 Other securities
10 Trading account
11 Investment account
12
State and local government, by maturity
13
One year or less
14
More than one year
15
Other bonds, corporate stocks, and securities . . .
16 Other trading account assets
110,882
294,122
21,656
272,467
94,065
106,284r
291,243
20,644
270,599
94,475
106,788'
295,674
22,787
272,888
93,892
105,169'
298,499
22,872
275,627
96,006
132,771'
303,389'
24,832
278,557'
97,308'
111,792
305,870
27,474
278,396
97,619
113,901
303,419
26,576
276,842
96,945
116,232
300,719
22,574
278,145
97,543
109,017
295,435
20,888
274,547
96,790
47,852
69,271
61,280
134,420r
1,575
60,818
20,007
5,554
14,452
40,811
72,027r
46,735
69,144
60,245
133,750'
1,475
61,853
20,867
5,537
15,330
40,986
70,422'
47,223
71,329
60,443
129,360'
1,313
62,240
20,878
5,552
15,326
41,361
65,808'
46,417
71,843
61,361
129,031'
1,277
62,610
20,898
5,562
15,336
41,712
65,144'
46,704
72,630'
61,915
130,293'
1,392
63,012'
21,055
5,607
15,449
41,956'
65,889'
47,320
72,278
61,179
130,484
1,418
62,875
20,842
5,603
15,239
42,033
66,191
46,745
71,736
61,415
132,364
1,477
63,655
20,843
5,590
15,253
42,812
67,232
46,475
72,978
61,149
130,966
1,487
63,014
20,839
5,601
15,239
42,175
66,465
44,623
72,329
60,804
127,795
1,660
62,539
20,600
5,573
15,026
41,939
63,596
Federal funds sold2
To commercial banks in the United States
To nonbank brokers and dealers in securities
To others3
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 depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank depository and otherfinancialinstitutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions . . .
All other loans4
Lease-financing receivables
LESS: Unearned income
Loan and lease reserve3
Other loans and leases, net
All other assets
105,209
70,158
29,294
5,756
1,208,744
343,955'
1,965
341,990r
339,344r
2,646
476,831
47,726
429,105
241,477
55,470
35,462
2,873
17,135
14,183
6,317
11,128
904
24,779r
33,699
1,632
34,546
1,172,566
134,214r
109,162
72,949
29,752
6,461
1,208,417
343,823'
2,022
341,801'
339,172'
2,629
477,893
47,858
430,035
240,331
56,508
35,758
3,346
17,404
14,410
6,284
11,091
890
23,393'
33,793
1,640
34,534
1,172,243
134,046'
104,452
66,393
31,392
6,666
1,207,698
342,967'
1,733
341,235'
338,592'
2,643
477,338
47,928
429,410
240,701
55,497
35,395
3,114
16,988
14,439
6,373
11,161
941
24,362'
33,919
1,630
34,527
1,171,541
134,712'
108,442
70,194
32,003
6,245
1,210,259
342,249'
1,748
340,501'
337,765'
2,736
477,632
47,948
429,684
241,270
57,241
36,778
3,446
17,017
15,735
6,396
11,053
930
23,728'
34,025
1,667
34,512
1,174,080
130,053'
110,584
67,921
32,484
10,179
1,224,565
344,209'
1,786
342,423'
339,734'
2,689
481,264
48,555
432,709
244,520
57,808
37,083
3,144
17,580
17,550
6,500
11,139
1,040
26,017'
34,517
1,646
34,490
1,188,429
135,001'
111,104
67,716
37,069
6,319
1,223,268
342,502
1,691
340,811
338,193
2,618
483,872
48,503
435,369
244,797
59,420
37,638
3,635
18,147
14,663
6,475
11,089
928
24,940
34,584
1,676
34,613
1,186,979
134,984
113,505
70,843
36,353
6,309
1,223,610
342,080
1,830
340,250
337,593
2,657
483,940
48,606
435,334
245,595
59,507
38,141
3,374
17,993
14,899
6,491
11,073
908
24,447
34,669
1,688
34,621
1,187,301
138,533
104,656
68,225
29,581
6,850
1,226,473
343,178
1,606
341,572
339,012
2,560
484,972
48,667
436,305
243,567
59,749
38,663
3,067
18,019
17,440
6,555
11,177
989
24,106
34,740
1,689
34,573
1,190,211
132,627
103,240
65,807
30,755
6,677
1,228,699
342,201
1,580
340,621
338,077
2,544
485,778
48,809
436,969
245,313
61,089
39,219
3,203
18,668
15,483
6,559
11,164
863
25,288
34,963
1,675
34,400
1,192,624
133,717
1,942,527' l,945,275r 2,000,466'
1,981,213
1,989,023
1,975,411
1,961,828
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
45 Total assets6
Footnotes appear on the following page.
r
1,951,413'
1,951,413r l,946,727
A22
1.27
Domestic Financial Statistics • September 1995
ASSETS A N D LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued
Millions of dollars, Wednesday figures
1995
Account
May
3
May
10
May
17
June 7
June 14
June 21
June 28
1,184,022
315,230
264,974
1,173,811
293,741
248,414
1,181,821
303,459
256,612
1,157,823
288,478
242,372
1,153,798
50,257
8,473
1,919
45,327
7,653
2,152
46,847
46,105
8,747
2,863
43,587
8,527
5,376
581
22,489
5,880
866
18,885
5,617
17,642
5,298
8,619
115,252
744,196
720,480
10,629
114,653
754,139
730,137
617
11,598
113,653
23,715
19,792
2,033
1,577
24,002
20,251
2,001
763
10,257
114,670
765,400
741,356
24,044
May
24
May
31
LIABILITIES
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Deposits
Demand deposits
Individuals, partnerships, and corporations
Other holders
States and political subdivisions
U.S. government
Depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits4
Nontransaction balances
Individuals, partnerships, and corporations
Other holders
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions, and banks ..
65
66
67
68
Liabilities for borrowed money5
Borrowings from Federal Reserve Banks
Treasury tax and loan notes
Other liabilities for borrowed money
Other liabilities (including subordinated notes and debentures)...
69
Total liabilities
64
70
1,157,987
293,518
247,812
1,145,821
282,000
239,647
1,147,480
284,993
243,584
45,705
9,301
2,131
42,353
7,788
1,638
41,409
7,695
1,595
19,692
5,264
17,613
5,818
633
17,401
5,139
633
8,947
623
8,694
123,845
740,625
716,864
23,761
19,730
2,038
1,682
311
396,445R
15
22,834
373,596R
215,353'
l,769,785r
7
Residual (total assets less total liabilities)
181,628
8,863
120,684
743,138
718,753
24,384
119,760
742,727
719,002
20,055
2,059
23,725
19,817
2,022
1,959
311
1,575
312
1,137,953
278,505
236,211
42,294
8,127
1,719
17,871
313
1,461
306
1,457
321
1,391
317
413,656'
0
407,789
0
407,415
0
218,290'
70
407,719
214,976
4,917
402,498
214,805
423,423
0
28,714
416,654
0
14,539
399,117'
1,796,576
184,637
1,665,372
l,763,754r l,760,050r
l,762,514r
l,815,968r
182,760
184,498
215,433'
182,973
182,477
619
9,719
109,226
754,023
731,788
312
1,439
312
406,986'
0
6,929
400,057'
217,576'
11,259
110,595
1,583
17,358
5,781
758,750
735,663
23,087
19,291
2,019
20,198
2,050
1,484
764,709
741,042
17,881
4,759
597
23,666
19,885
2,015
401,616'
0
10,968
390,648'
210,954'
402,500'
0
17,446
385,054'
8,218
3,474
290,550
246,963
22,235
18,511
2,016
394,709
209,400
26,166
390,488
206,467
1,804,041
1,790,645
1,776,919
184,982
184,766
184,909
1,663,913
108,472
559
292
1,655,926
106,882
559
1,650,143
103,504
558
267
25,115
292
267
25,347
292
266
25,164
85,373
87,871
86,487
MEMO
71
72
73
74
75
76
77
Total loans and leases, gross, adjusted, plus securities8
Time deposits in amounts of $ 1 0 0 , 0 0 0 or more
Loans sold outright to affiliates9
Commercial and industrial
Other
Foreign branch credit extended to U.S. residents10
Net owed to related institutions abroad
1,636,875'
108,470
563
294
269
24,941
82,624
1,633,864'
108,969
562
268
24,875
268
25,019
86,410
85,809
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 (NOWs) and automatic transfer service
(ATS) accounts, and telephone and preauthorized transfers of savings deposits.
5. Includes borrowings only from other than directly related institutions.
6. Includes federal fijnds 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.
1,635,396'
108,823
562
294
294
L,639,260R
108,585
564
294
270
25,487
95,627
1,663,826'
108,075
561
292
109,392
560
292
268
25,334
89,030
267
25,163
87,514
8. Excludes loans to and federal funds transactions with commercial banks in the
United States.
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.
Weekly Reporting Commercial Banks A23
1.28
LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS
Assets and Liabilities
Millions of dollars, Wednesday figures
1995
Account
May 3
May 10
May 17
May 24
May 31
June 7
June 14
June 21
June 28
16,421r
17,099'
17,155r
17,346r
17,004'
17,795
17,277
17,010
17,070
ASSETS
1 Cash and balances due from depository
institutions
2 U.S. Treasury and government agency
3
4 Federal funds sold1
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
1?
13
14
Non-U.S. addressees
Loans secured by real estate
Loans to depository and financial
Commercial banks in the United States
Banks in foreign countries
Nonbank financial institutions
For purchasing and carrying securities
19
To foreign governments and official
institutions
70
All other
21 Other assets (claims on nonrelated parties)
15
16
17
18
22 Total assets 3
42,244
15,107r
30,457
5,653
24,804
170,136
110,855
3,010
107,845
103,089
4,756
23,887
43,003
15,705r
30,648
5,577
25,071
170,579
110,926
2,993
107,932
103,240
4,692
23,770
42,016
15,151r
27,013
5,919
21,094
171,101
111,058
2,882
108,176
103,467
4,709
23,689
41,271
14,815r
28,182
8,737
19,445
171,675
111,219
3,133
108,086
103,249
4,837
23,645
42,557
15,498'
29,208
7,301
21,908
172,421
110,709
2,889
107,821
102,926
4,894
23,593
41,698
15,238
24,932
5,474
19,458
172,120
110,522
3,097
107,425
102,634
4,791
23,626
36,572
13,681
24,505
4,150
20,355
173,052
110,687
3,134
107,554
102,741
4,813
23,541
36,129
13,782
27,813
6,648
21,165
175,467
111,937
3,132
108,805
104,007
4,798
23,488
39,512
16,410
30,346
8,114
22,232
174,534
112,695
3,513
109,182
104,236
4,946
23,496
27,374
4,847
2,143
20,385
3,790
27,080
4,866
2,321
19,893
4,319
27,364
4,892
2,229
20,244
4,728
27,215
4,659
2,169
20,387
5,239
27,389
4,561
2,312
20,516
6,150
27,767
4,652
2,259
20,856
5,462
28,286
4,811
2,106
21,369
5,719
28,799
4,825
2,137
21,837
6,732
28,647
4,860
2,134
21,653
4,969
378
3,852
65,148 r
392
4,092
62,679 r
370
3,891
61,628 r
381
3,975
58,734 r
386
4,194
63,423'
426
4,317
63,579
567
4,253
71,470
350
4,161
66,398
361
4,366
57,756
366,650
366,837
360,648
359,141
371,230
364,140
366,534
363,490
360,126
101,206
3,649
2,901
748
97,557
66,013
31,543
102,503
3,521
2,607
914
98,982
67,268
31,714
102,604
3,158
2,493
665
99,447
67,433
32,013
104,349
3,637
2,910
727
100,712
69,136
31,576
107,080
4,224
3,336
888
102,856
69,367
33,489
110,581
3,871
3,033
838
106,710
71,130
35,581
109,512
3,778
3,030
748
105,734
69,299
36,435
107,095
3,513
2,843
670
103,582
68,496
35,087
104,195
4,095
3,269
826
100,100
65,315
34,785
87,524 r
48,634
8,375
40,259
38,890 r
5,535
33,355 r
61,844 r
89,725 r
50,613
11,844
38,768
39,112 r
5,655
33,457 r
60,85 f
78,936 r
43,972
8,372
35,600
34,963 r
5,378
29,586 r
58,903 r
75,833 r
41,832
7,559
34,272
34,001'
4,715
29,286 r
57,068'
84,345'
48,118
11,919
36,199
36,227'
5,046
31,182'
59,883'
80,410
44,818
8,110
36,708
35,592
4,420
31,172
59,998
82,058
45,536
10,318
35,218
36,522
5,275
31,247
61,213
82,763
44,859
8,558
36,301
37,904
5,705
32,198
56,375
80,814
42,968
8,175
34,793
37,846
5,840
32,006
55,660
366,650
366,837
360,648
359,141
371,230
364,140
366,534
363,490
360,126
247,444 r
88,939
249,491 r
86,632
244,470 r
93,621
242,548'
94,775
247,823'
88,803
243,862
84,372
238,849
83,774
241,719
90,367
247,828
94,959
LIABILITIES
73 Deposits or credit balances owed to other
than directly related institutions
74 Demand deposits 4
Individuals, partnerships, and corporations . . . .
25
76
Other
77 Nontransaction accounts
Individuals, partnerships, and corporations
78
29
Other
30 Borrowings from other than directly
related institutions
31 Federal funds purchased
37
From commercial banks in the United States . .
33
34 Other liabilities for borrowed money
35
To commercial banks in the United States
36
37 Other liabilities to nonrelated parties
38 Total liabilities 6
MEMO
39 Total loans (gross) and securities, adjusted
40 Net owed to related institutions abroad
1. Includes securities purchased under agreements to resell.
2. Includes transactions with nonbank brokers and dealers in securities.
3. For U.S. branches and agencies of foreign banks having a net "due from" position,
includes net due from related institutions abroad.
4. Includes other transaction deposits.
5. Includes securities sold under agreements to repurchase.
6. For U.S. branches and agencies of foreign banks having a net "due to" position,
includes net owed to related institutions abroad.
7. Excludes loans to and federal funds transactions with commercial banks in the
United States.
A24
1.32
DomesticNonfinancialStatistics • September 1995
C O M M E R C I A L PAPER A N D B A N K E R S D O L L A R ACCEPTANCES O U T S T A N D I N G
Millions of dollars, end of period
Year ending December
1994
1995
Item
1990
1991
1992
1993
1994
Dec.
Jan.
Feb.
Mar.
Apr.
May
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
Financial companies 1
2
Dealer-placed paper 2 , total
3
Directly placed paper 3 , total
4 Nonfinancial companies
4
562,656
528,832
545,619
555,075
595,382
595,382
612,554
619,150
633,324
651,128
650,580
214,706
200,036
212,999
182,463
226,456
17,1,605
218,947
180,389
223,038
207,701
223,038
207,701
231,318
215,423
232,231
218,570
243,949
218,269
252,846
219,281
258,006
216,879
147,914
133,370
147,558
155,739
164,643
164,643
165,813
168,349
171,106
179,001
175,695
n.a.
n.a.
n.a.
Bankers dollar acceptances (not seasonally adjusted) 5
5 Total
6
7
8
9
10
By holder
Accepting banks
Own bills
Bills bought from other banks
Federal Reserve Banks 6
Foreign correspondents
Others
By basis
11 Imports into United States
12 Exports from United States
13 All other
54,771
43,770
38,194
32,348
29,835
29,835
9,017
7,930
1,087
11,017
9,347
1,670
10,555
9,097
1,458
12,421
10,707
1,714
11,783
10,462
1,321
11,783
10,462
1,321
918
44,836
1,739
31,014
1,276
26,364
725
19,202
410
17,642
410
17,642
13,095
12,703
28,973
12,843
10,351
20,577
12,209
8,096
17,890
10,217
7,293
14,838
10,062
6,355
13,417
10,062
6,355
13,417
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 all financial-company paper sold by dealers in the open market.
3. As reported by financial companies that place their paper directly with investors.
4. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation,
and services.
n.a.
n.a.
5. Data on bankers dollar acceptances are gathered from approximately 100 institutions. The reporting group is revised every January. Beginning January 1995, data for
Bankers dollar acceptances will be reported annually in September.
6. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances
for its own account.
Financial Markets
1.33
PRIME RATE CHARGED BY BANKS
A25
Short-Term Business Loans1
Percent per year
Date of change
Rate
1992—Jan.
July
1
2
6.50
6.00
1994—Mar.
Apr.
May
Aug.
Nov.
24
19
17
16
15
6.25
6.75
7.25
7.75
8.50
1995—Feb.
July
1
7
9.00
8.75
Period
Average
rate
1992
1993
1994
6.25
6.00
7.15
1992—Jan
Feb
Mar
Apr.
May
June
July
Aug
Sept
Oct
Nov
Dec
6.50
6.50
6.50
6.50
6.50
6.50
6.02
6.00
6.00
6.00
6.00
6.00
Period
Average
rate
1993—Jan
Feb
Mar.
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
1994—Jan
Feb
6.00
6.00
6.06
Period
1994—Apr.
May
June
Jul)
Aug
Sept
Oct
Nov.
Dec
6.45
6.99
7.25
7.25
7.51
7.75
7.75
8.15
8.50
1995—Jan.
Feb
Mai
Apr
May
8.50
9.00
9.00
9.00
9.00
9.00
8.80
July
1. The prime rate is one of several base rates that banks use to price short-term
business loans. The table shows the date on which a new rate came to be the predominant
one quoted by a majority of the twenty-five largest banks by asset size, based on the most
Average
rate
recent Call Report. 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,
A26
1.35
DomesticNonfinancialStatistics • September 1995
INTEREST RATES
M o n e y and Capital Markets
Percent per year; figures are averages of business day data unless otherwise noted
1995, week ending
1995
Item
1992
1993
1994
Mar.
Apr.
May
June
June 2
June 9
June 16
June 23
June 30
MONEY MARKET INSTRUMENTS
1
2
Federal funds 1 ' 2 ' 3
Discount window borrowing 2,4
3.52
3.25
3.02
3.00
4.21
3.60
5.98
5.25
6.05
5.25
6.01
5.25
6.00
5.25
6.02
5.25
6.03
5.25
6.02
5.25
6.00
5.25
5.95
5.25
3
4
5
Commercial paper*
1-month
3-month
6-month
3.71
3.75
3.80
3.17
3.22
3.30
4.43
4.66
4.93
6.07
6.15
6.30
6.06
6.12
6.19
6.05
6.06
6.07
6.05
5.94
5.79
6.04
5.98
5.92
6.01
5.91
5.75
6.05
5.96
5.82
6.07
5.94
5.79
6.09
5.94
5.76
6
7
8
Finance paper, directly
1-month
3-month
6-month
3.62
3.65
3.63
3.12
3.16
3.15
4.33
4.53
4.56
5.95
6.03
6.04
5.96
6.01
6.01
5.94
5.91
5.81
5.92
5.73
5.47
5.91
5.80
5.61
5.89
5.74
5.45
5.93
5.78
5.52
5.93
5.73
5.46
5.93
5.68
5.44
3.62
3.67
3.13
3.21
4.56
4.83
6.04
6.14
6.00
6.06
5.91
5.90
5.80
5.65
5.82
5.71
5.79
5.66
5.83
5.68
5.81
5.63
5.79
5.64
3.64
3.68
3.76
3.11
3.17
3.28
4.38
4.63
4.96
6.02
6.15
6.34
6.01
6.11
6.27
5.98
6.02
6.07
5.97
5.90
5.80
5.96
5.91
5.86
5.94
5.88
5.78
5.98
5.93
5.84
5.97
5.91
5.78
6.00
5.91
5.80
3.70
3.18
4.63
6.15
6.13
6.03
5.89
5.95
5.85
5.92
5.89
5.87
3.43
3.54
3.71
3.00
3.12
3.29
4.25
4.64
5.02
5.73
5.89
6.03
5.65
5.77
5.88
5.67
5.67
5.65
5.47
5.42
5.33
5.55
5.49
5.38
5.56
5.48
5.37
5.48
5.45
5.35
5.42
5.40
5.29
5.43
5.37
5.33
3.45
3.57
3.02
3.14
4.29
4.66
5.64
5.61
3.33
4.98
5.73
5.91
6.16
5.67
5.80
3.75
3.89
4.77
5.30
3.43
4.05
4.44
6.19
5.14
5.32
5.94
6.27
6.69
6.43
6.78
6.89
7.05
6.63
6.91
7.14
n.a.
7.67
5.54
5.87
6.29
6.59
7.09
7.49
7.37
7.20
7.57
7.45
6.27
6.57
6.68
6.86
6.95
7.06
7.45
7.36
6.95
7.52
6.45
7.41
7.52
7.41
6.09
6.48
6.44
5.38
5.83
5.60
6.50 r
5.74
6.17
6.18
6.01
6.10
8.55
7.54
8.26
8.35
8.14
8.46
8.62
8.98
8.52
7.22
7.40
7.58
7.93
7.46
7.97
8.15
8.28
8.63
8.29
2.99
2.78
2.82
2.76
placed3,5,7
9
10
Bankers
acceptances3,5,8
3-month
6-month
11
1?
13
Certificates of deposit, secondary
1-month
3-month
6-month
14
Eurodollar deposits, 3-month 3 , i 0
15
16
17
18
19
20
market1
U.S. Treasury bills
Secondary market 3,5
3-month
6-month
1-year
Auction average 3,5,11
3-month
6-month
1-year
5.70
5.50
5.73
5.90
5.46
5.38
6.00
5.64
5.72
5.80
5.93
6.05
5.48
5.57
5.46
5.35
5.35
n.a.
5.56
n.a.
5.42
n.a.
5.34
5.22
5.69
5.74
5.83
5.96
6.07
6.20
6.60
6.57
5.66
5.75
5.83
5.96
6.09
5.59
5.66
5.73
5.86
5.99
5.65
5.75
5.83
5.95
6.07
6.21
6.10
6.17
6.59
6.57
5.76
5.83
5.98
6.08
6.23
6.66
6.62
6.64
6.61
6.54
6.53
6.60
6.58
6.99
6.59
6.65
6.60
6.64
6.55
6.59
5.68
5.98
5.95
5.62
5.89
5.84
5.60
5.60
5.91
5.91
6.02
5.79
5.75
5.55
5.88
5.86
5.70
5.80
5.82
5.65
5.93
5.97
8.25
7.86
7.54
7.55
7.51
7.61
7.51
7.54
8.12
8.03
8.24
8.33
8.70
8.40
8.12
7.30
7.43
7.53
7.90
7.60
7.33
7.43
7.55
7.51
7.43
7.54
7.49
7.71
7.37
7.50
7.60
7.97
7.62
7.27
7.40
7.91
7.28
7.40
7.50
7.87
8.31
7.65
7.74
7.86
8.20
7.89
7.87
7.52
7.64
2.68
2.60
2.55
2.58
2.58
2.56
2.53
2.53
6.02
5.54
U S . TREASURY NOTES AND B O N D S
21
22
23
24
25
26
71
28
Constant maturities12
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
Composite
29 More than 10 years (long-term)
7.01
6.17
6.27
6.41
6.50
6.63
7.01
6.17
5.71
STATE AND LOCAL NOTES AND BONDS
Moody's series13
30
31 Baa
32 Bond Buyer series 14
5.77
5.91 R
CORPORATE BONDS
33 Seasoned issues, all industries 15
34
35
36
37
38
Rating group
Aaa
Aa
A
Baa
A-rated, recently offered utility bonds16
8.23
8.60
7.31
7.91
MEMO
Dividend-price
ratio17
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 for 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 11:00 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.
Department of the Treasury.
13. General obligation bonds based on Thursday figures; Moody's Investors Service.
14. State and local government general obligation bonds maturing in twenty years are
used in compiling this index. The twenty-bond index has a rating roughly equivalent to
Moodys' A l rating. Based on Thursday figures.
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. Common stock ratio is based on the 500 stocks
in the price index.
NOTE. Some of the 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
1994
Indicator
1993
1992
1995
1994
Oct.
Nov.
Dec.
Jan.
Feb.
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
229.00
284.26
201.02
99.48
179.29
249.71
300.10
242.68
114.55
216.55
254.16
315.32
247.17
104.96
209.75
255.22
321.53
230.71
101.67
203.33
252.48
319.33
227.44
100.07
198.38
248.65
313.92
218.93
100.01
195.25
253.56
319.93
230.25
100.58
201.05
261.86
328.98
237.29
103.87
211.76
266.81
337.96
252.37
102.08
213.29
274.38
347.69
254.36
104.70
219.38
281.81
357.01
254.70
106.02
228.45
289.52
366.75
256.80
108.12
236.26
6 Standard & Poor's Corporation
( 1 9 4 1 - 4 3 = 10)'
415.75
451.63
460.42
463.81
461.01
455.19
465.25
481.92
493.20
507.91
523.83
539.35
7 American Stock Exchange
(Aug. 31, 1973 = 50)
391.28
438.77
449.49
456.25
445.16
427.39
436.09
446.37
456.06
471.54
487.03
492.60
202,558
14,171
263,374
18,188
290,652
17,951
301,327
20,731
297,001
18,465
302,049
18,745
326,652
18,829
333,020
18,424
338,733
17,905
331,184
19,404
341,905
19,266
345,547
24,622
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
43,990
60,310
61,160
62,150
61,000
61,160
64,380
59,800
60,270
62,520
64,070
66,340
Free credit balances at brokers4
11 Margin accounts 5
12 Cash accounts
8,970
22,510
12,360
27,715
14,095
28,870
12,875
24,180
13,635
25,625
14,095
28,870
13,225
26,440
12,380
25,860
12,745
26,680
12,440
26,670
13,403
27,464
13,710
29,860
Margin requirements (percent of market value and effective date)
13 Margin stocks
14 Convertible bonds
15 Short sales
Mar. 11, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
1. In July 1976 a financial group, composed of banks and insurance companies, was
added to the group of stocks on which the index is based. The index is now based on 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 broker-dealers 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. Series initiated in June 1984.
6. Margin 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
Jan. 3, 1974
50
50
50
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
1.38
Domestic Financial Statistics • September 1995
FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Fiscal year
Calendar year
Type of account or operation
1995
1992
US budget1
1 Receipts, total
On-budget
2
Off-budget
3
4 Outlays, total
On-budget
5
Off-budget
6
7 Surplus or deficit ( - ) , total
On-budget
8
Off-budget
9
Source of financing (total)
10 Borrowing from the public
11 Operating cash (decrease, or increase ( - ) )
12 Other 2
1993
1994
Jan.
Feb.
Mar.
Apr.
May
June
1,090,453
788,027
302,426
1,380,856
1,128,518
252,339
-290,403
-340,490
50,087
1,153,226
841,292
311,934
1,408,532
1,141,945
266,587
-255,306
-300,653
45,347
1,257,187
922,161
335,026
1,461,067
1,460,557
279,372
-203,370
-259,024
55,654
131,801
101,036
30,765
115,172
89,890
25,282
16,628
11,146
5,483
82,544
54,405
28,139
120,527r
94,050 r
26,478
-37,983 r
-39,644 r
1,661
92,532
61,971
30,561
142,458
116,508
25,951
-49,927
-54,537
4,610
165,392
126,170
39,222
115,673
90,628
25,045
49,720
35,542
14,178
90,405
61,027
29,378
129,355
102,581
26,774
-38,950
-41,554
2,604
147,868
115,998
31,870
134,296
119,478
14,819
13,571
-3,480
17,051
310,918
-17,305
-3,210
248,594
6,283
429
184,998
16,564
1,808
13,337
-23,264
-6,701
38,964 r
14,000
-14,980
13,645
17,747
18,535
-27,638
-19,972
-2,110
44,740
11,841
22,578
8,491
-34,312
12,250
58,789
24,586
34,203
52,506
17,289
35,217
35,942
6,848
29,094
49,844
13,964
35,880
35,844
6,890
28,954
18,097
4,543
13,554
38,069
8,241
29,828
26,228
4,646
21,582
60,540
20,977
39,563
MEMO
13 Treasury operating balance (level, end of
period)
Federal Reserve Banks
14
Tax and loan accounts
15
1. Since 1990, off-budget items have been the social security trust funds (federal
old-age survivors insurance and federal disability insurance) and the U.S. Postal Service.
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 IMF
loan-valuation adjustment; and profit on sale of gold.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of Receipts
and Outlays of the US. Government; and U.S. Office of Management and Budget, Budget
of the U.S Government.
Federal FinanceA33
1.39
U.S. BUDGET RECEIPTS AND OUTLAYS1
Millions of dollars
Calendar year
Fiscal year
1993
1995
1994
1993
Source or type
1995
1994
H2
HI
H2
HI
Apr.
May
June
RECEIPTS
1,153,226
1,257,453
582,038
652,234'
625,557
710,542
165,392
90,405
147,868
509,680
430,211
28
154,989
75,546
543,055
459,699
70
160,364
77,077
262,073
228,423
2
41,768
8,115
275,052 r
225,387
63
117,937'
68,325'
273,474
240,062
10
42,031
9,207
307,498
251,398
58
132,006
75,958
76,441
32,447
16
64,937
20,959
29,729
43,414
12
8,691
22,388
61,457
40,901
8
23,053
2,505
131,548
14,027
428,300
396,939
20,604
26,556
4,805
154,205
13,820
461,475
428,810
24,433
28,004
4,661
68,266
6,514
206,176
192,749
4,335
11,010
2,417
80,536
6,933
248,301
228,714
20,762
17,301
2,284
78,392
7,331
220,141
206,613
4,135
11,177
2,349
92,132
10,399
261,837
228,663
23,429
18,001
2,267
25,779
2,297
53,839
50,423
12,640
3,061
354
3,572
1,379
48,183
37,226
1,898
10,601
355
36,645
768
41,341
40,605
4,032
320
416
48,057
18,802
12,577
18,273
55,225
20,099
15,225
22,041
25,994
10,215
6,617
9,227
26,444
9,500
8,197
11,170
30,062
11,042
7,071
13,305
27,452
8,847
7,424
15,749
4,602
1,349
1,906
3,774
4,770
1,471
1,339
2,719
4,897
1,583
1,040
1,674
1,408,532
1,460,722
727,685
710,620
751,645
757,480
115,673
129,355
134,296
291,086
16,826
17,030
4,319
20,239
20,443
281,451
17,249
17,602
5,398
20,902
15,131
146,672
10,186
8,880
1,663
11,221
7,516
133,844'
5,800
8,502
2,237'
10,111'
7,451
141,108
12,056
8,979
3,101
12,750
7,697
132,588
4,727
8,611
2,358
10,273
4,039
17,753
95
1,298
196
1,587
623
22,194
1,282
1,596
244
1,820
236
26,148
818
1,521
601
1,698
-328
Commerce and housing credit
76 Transportation
27 Community and regional development
28 Education, training, employment, and
social services
-22,725
35,004
9,051
-4,851
36,835
11,877
-1,490
19,570
4,288
-4,962'
16,739'
4,571'
-4,094
20,489
6,688
-13,936
18,192
4,858
-1,092
2,560
896
-1,988
3,154
860
-3,041
3,432
1,035
50,012
44,730
26,753
19,262'
25,887
25,738
3,647
4,205
4,480
?9 Health
30 Social security and Medicare
31 Income security
99,415
435,137
207,257
106,495
464,314
213,972
52,958
223,735
102,380
53,195
232,777
109,080
54,123
236,819
101,743
58,759
251,975
117,639
9,281
39,463
18,963
9,952
42,387
20,633
10,543
47,721
16,426
3?
33
34
35
36
35,720
14,955
13,009
198,811
-37,386
37,637
15,283
11,348
202,957
-37,772
19,852
7,400
6,531
99,914
-20,344
16,686
7,718
5,084
99,844
-17,308
19,757
7,800
7,384
109,435
-20,065
19,267
8,062
5,797
116,170
-17,632
1,850
1,359
299
20,017
-3,121
3,204
1,129
1,109
20,295
-2,956
4,552
1,419
1,781
18,617
-3,127
1 All sources
? Individual income taxes, net
3
Withheld
4
Presidential Election Campaign Fund
5
6
Refunds
Corporation income taxes
7
Gross receipts
8
9 Social insurance taxes and contributions, net . . .
10
Employment taxes and contributions
Self-employment taxes and contributions .
11
Unemployment insurance
1?
13
Other net receipts 4
14
15 Customs deposits
16 Estate and gift taxes
17 Miscellaneous receipts
OUTLAYS
18 All types
19
70
21
77
73
24
National defense
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
Veterans benefits and services
Administration of justice
General government
Net interest 6
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 fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Federal employee retirement contributions and civil service retirement and
disability fund.
5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
6. Includes interest received by trust funds.
7. Rents and royalties for the outer continental shelf, U.S. government contributions for
employee retirement, and certain asset sales.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of Receipts
and Outlays of the US. Government; and US. Office of Management and Budget, Budget
of the US. Government, Fiscal Year 1996.
A30
DomesticNonfinancialStatistics • September 1995
1.40
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1993
1994
1995
Item
Sept. 30
1 Federal debt outstanding
4,373
4,436
4,562
4,602
4,673
4,721
4,827
4,864
n.a.
2 Public debt securities
3
Held by public
4
Held by agencies
4,352
3,252
1,100
4,412
3,295
1,117
4,536
3,382
1,154
4,576
3,434
1,142
4,646
3,443
1,203
4,693
3,480
1,213
4,800
3,543
1,257
4,864
3,610
1,255
4,951
21
21
0
25
25
0
27
27
0
26
26
0
28
27
0
29
29
0
27
27
0
27
26
0
4,256
4,316
4,446
4,491
4,559
4,605
4,711
4,775
4,861
4,256
0
4,315
0
4,445
0
4,491
0
4,559
0
4,605
0
4,711
0
4,774
0
4,861
0
4,370
4,900
4,900
4,900
4,900
4,900
4,900
4,900
4,900
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
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30 r
June 30
1
n.a.
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
SOURCES. U.S. Department of the Treasury, Monthly Statement of the Public Debt of
the United States and Treasury Bulletin.
Types and Ownership
Billions of dollars, end of period
1994
Type and holder
1 Total gross public debt
By type
7. Interest-bearing
3
Marketable
4
Bills
5
Notes
6
Bonds
Nonmarketable 1
7
State and local government series
8
9
Foreign issues 2
to
Government
Public
11
Savings bonds and notes
17,
Government account series 3
n
14 Non-interest-bearing
By holder4
15 U.S. Treasury and other federal agencies and trust funds
16 Federal Reserve Banks
17 Private investors
Commercial banks
18
19
Money market funds
Insurance companies
20
Other companies
21
State and local treasuries
22
Individuals
Savings bonds
23
Other securities
24
Foreign and international 5
25
Other miscellaneous investors 6
26
1991
1993
1995
1994
Q3
Q4
Q1
Q2
3,801.7
4,177.0
4,535.7
4,800.2
4,692.8
4,800.2
4,864.1
4,951.4
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
4,532.3
2,989.5
714.6
1,764.0
495.9
1,542.9
149.5
43.5
43.5
.0
169.4
1,150.0
3.4
4,769.2
3,126.0
733.8
1,867.0
510.3
1,643.1
132.6
42.5
42.5
.0
177.8
1,259.8
31.0
4,689.5
3,091.6
697.3
1,867.5
511.8
1,597.9
137.4
42.0
42.0
.0
176.4
1,211.7
3.2
4,769.2
3,126.0
733.8
1,867.0
510.3
1,643.1
132.6
42.5
42.5
.0
177.8
1,259.8
31.0
4,860.5
3,227.3
756.5
1,938.2
517.7
1,633.2
122.9
41.8
41.8
.0
178.8
1,259.2
3.6
4,947.8
3,252.6
748.3
1,974.7
514.7
1,695.2
121.2
41.4
41.4
.0
180.1
1,322.0
3.6
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
294.0
79.4
197.5
192.5
534.8
1,153.5
334.2
3,047.7
316.0
80.5
216.0
213.0
564.0
1,257.1
374.1
3,168.0
296.4
67.6
256.8
230.2
488.3
1,213.1
355.2
3,127.8
313.9'
60.1'
253.4'
229.3
504.6'
1,257.1
374.1
3,168.0
296.4
67.6
256.8
230.2
488.3
1,254.7
369.3
3,239.1
285.0
67.8
260.0
230.3
480.0
138.1
125.8
491.8
651.3
157.3
131.9
549.7
702.4
171.9
137.9
623.3
725.0
180.5
152.5
688.1
807.6
178.6
148.6
ess.c
784.3'
180.5
152.5
688.1
807.6
181.4
161.4
728.1
845.1
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.
1992
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 A3 3
1.42
Transactions1
U.S. GOVERNMENT SECURITIES DEALERS
Millions of dollars, daily averages
1995
1995, week ending
Item
Mar.
Apr.
May
May 3
May 10
May 17
May 24
May 31
49,948
49,515
52,894
50,191
55,258
53,988
47,285
56,666
96,107
45,128
23,485
26,637
86,779
38,590
22,120
26,963
102,560
59,066
21,890
29,333
84,904
38,391
22,431
21,890
121,759
80,621
22,095
48,781
106,732
60,340
22,791
31,367
98,410
48,827
19,767
21,861
93,934
58,883
22,584
19,788
113,505
745
8,758
102,048
778
8,353
125,478
868
10,050
101,552
865
6,512
146,327
1,143
15,179
132,562
761
11,645
116,186
698
8,541
121,191
872
6,960
77,677
22,740
17,879
72,836
21,342
18,610
89,043
21,022
19,282
71,934
21,567
15,378
111,310
20,952
33,602
88,498
22,030
19,721
78,337
19,069
13,320
88,292
21,712
12,828
June 7
June 14
June 21
June 28
55,756
47,982
45,813
45,809
110,345
72,572
22,244
46,142
103,903
61,528
21,415
44,273
84,282
44,886
22,591
24,387
106,808
50,487
24,449
18,041
142,306
758
14,907
128,968
731
15,660
104,834
427
9,470
122,119
724
6,315
96,366
21,486
31,234
84,445
20,684
28,613
70,147
22,164
14,917
80,985
23,725
11,726
OUTRIGHT TRANSACTIONS 2
By type of security
1 U.S. Treasury bills
Coupon securities, by maturity
2
Five years or less
3
More than five years
4 Federal agency
5 Mortgage-backed
By type of counterparty
With interdealer broker
U.S. Treasury
Federal agency
Mortgage-backed
With other
9
U.S. Treasury
10
Federal agency
11
Mortgage-backed
6
7
8
FUTURES TRANSACTIONS 3
By type of deliverable security
12 U.S. Treasury bills
Coupon securities, by maturity
13
Five years or less
14
More than five years
15 Federal agency
16 Mortgage-backed
1,785
910
1,371
1,133
1,730
1,392
1,636
2,303 r
15,604r
0
0
2,152 r
ll,781 r
0
0
2,877 r
17,425r
0
0
2,267 r
9,685 r
0
0
3,443r
24,534'
0
0
2,613'
17,471'
0
0
2,917'
14,979'
0
0
867
1,664
1,045
721
358
2,901
17,358
0
0
3,862
24,310
0
0
2,865
20,562
0
0
2,638
15,249
0
0
2,044
13,055
0
0
OPTIONS TRANSACTIONS 4
By type of underlying security
17 U.S. Treasury bills
Coupon securities, by maturity
18
Five years or less
19
More than five years
20 Federal agency
21 Mortgage-backed
0
0
0
0
0
0
0
0
0
0
0
0
2,47 l r
3,892 r
0
760
2,585 r
3,425 r
0
726
2,695 r
5,230 r
0
1,199
2,297 r
3,395 r
0
752
3,570'
7,361'
0
2,495
2,213'
4,748'
0
723
2,471
5,137'
0
834
2,765
4,777'
0
1,014
3,694
6,272
0
2,227
2,534
3,884
0
1,058
1,298
3,460
n.a.
540
2,888
3,851
n.a.
903
1. Transactions are market purchases and sales of securities as reported to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list
of primary dealers. Monthly averages are based on the number of trading days in the
month. Transactions are assumed evenly distributed among the trading days of the report
week. 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. Outright transactions include immediate and forward transactions. Immediate delivery refers to purchases or sales of securities (other than mortgage-backed federal agency
securities) for which delivery is scheduled in five business days or less and "whenissued" 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 business days or less. Stripped securities are reported at market value by maturity of
coupon or corpus.
Forward transactions are agreements made in the over-the-counter market that specify
delayed 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 business days.
3. Futures transactions are standardized agreements arranged on an exchange. All
futures transactions are included regardless of time to delivery.
4. 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, "n.a." indicates that data are not published because of insufficient activity.
Major changes in the report form filed by primary dealers induced a break in the dealer
data series as of the week ending July 6, 1994.
A32
1.43
DomesticNonfinancialStatistics • September 1995
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing1
Millions of dollars
1995, week ending
1995
Item
Apr.
Mar.
May
May 3
May 1 0
May 17
May 2 4
May 31
June 7
June 14
June 21
Positions 2
NET OUTRIGHT POSITIONS 3
1
2
3
4
5
By type of security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
10,749
7,472
4,533
4,730
6,234
7,102
-1,443
6,156
586
-3,351
-3,877
-5,840
-1,887
1,996
2,245
3,685
-4,108
4,525
3,774
7,342
-28,898
23,373
32,766
-30,458
22,961
30,809
-20,487
22,564
34,798
-31,238
21,524
30,334
-19,902
24,332
35,417
-20,133
23,744
34,895
-19,869
21,592
36,454
-17,437
21,034
34,338
-13,788
26,935
32,723
3,172
-12,788
26,399
31,277
1,073
-16,055
22,082
30,370
-10,230
-10,906
-11,208
-11,647
-11,816
-11,035
-10,826
-10,966
-10,222
-8,585
-6,777
2,296 r
2,427 r
0
0
1,128
-4,195
0
l,638 r
-5,360r
l,331 r
-5,402 r
-868
-5,185
1,893
-8,364
0
0
2,475
-9,305
0
0
NET FUTURES POSITIONS 4
6
7
8
9
10
By type of deliverable security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
1,411r
79 R
0
0
3,195 r
l,662 r
0
0
0
l,523 r
—3,345r
0
0
0
0
0
0
0
0
1,289
-7,772
0
0
Financing 5
Reverse repurchase agreements
11 Overnight and continuing
12 Term
225,309
360,597
227,539
370,576
224,729
369,097
250,508
378,900
221,649
416,466
225,460
353,483
208,143
368,132
232,616
334,105
249,171
378,821
242,805
399,352
238,006
399,890
Securities borrowed
13 Overnight and continuing
14 Term
173,921
58,737
170,977
59,415
163,757
55,704
170,853
61,233
167,201
58,505
167,764
54,996
158,299
57,720
158,722
49,225
163,119
51,928
158,069
54,099
155,799
57,640
3,374
54
3,526
64
2,552
103
2,639
187
2,560
203
2,640
46
2,405
56
2,564
70
3,101
145
3,085
118
3,117
51
Repurchase agreements
17 Overnight and continuing
18 Term
468,711
320,370
469,832
330,717
465,539
323,351
489,735
336,599
469,837
374,489
476,041
311,086
440,719
317,486
465,191
284,665
522,828
308,397
510,791
334,407
482,517
360,675
Securities loaned
19 Overnight and continuing
20 Term
3,927
1,216
4,946
2,146
4,879
1,842
4,723
2,022
4,651
1,754
4,769
1,835
4,627
1,837
5,534
1,863
5,283
2,002
5,181
1,949
5,108
1,862
Securities pledged
21 Overnight and continuing
22 Term
29,195
3,258
29,139
3,184
28,703
3,742
27,493
3,565
29,671
3,498
28,820 r
3,073
27,214
4,427
29,627
4,046
28,227
4,488
27,922
4,428
32,184
4,168
Collateralized loans
23 Overnight and continuing
24 Term
13,998
n.a.
16,973
n.a.
13,004
n.a.
14,747
n.a.
12,264
n.a.
12,439
n.a.
15,373
n.a.
11,193
n.a.
12,525
n.a.
13,693
n.a.
12,563
n.a.
MEMO: Matched book 6
Securities in
7.5 Overnight and continuing
26 Term
219,569
334,781
219,256
344,373
212,193
346,228
239,196
356,047
215,699
384,117
215,418
326,509
198,568
352,595
207,514
317,481
227,691
349,979
224,856
366,146
220,108
374,452
Securities out
77 Overnight and continuing
28 Term
282,171
263,970
289,764
275,791
273,963
272,206
312,051
284,786
274,864
323,542
275,662
257,719
262,320
269,823
266,681
232,349
308,103
258,318
299,780
276,819
277,861
302,085
Securities received as pledge
15 Overnight and continuing
16 Term
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. Positions for
calendar days of the report week are assumed to be constant. Monthly averages are based
on the number of calendar days in the month.
2. Securities positions are reported at market value.
3. Net outright positions include immediate and forward positions. 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 for mortgage-backed agency securities include securities purchased or sold that
have been delivered or are scheduled to be delivered in thirty business days or less.
Forward positions reflect agreements made in the over-the-counter market that specify
delayed 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 business days.
4. Futures positions reflect standardized agreements arranged on an exchange. All
futures positions are included regardless of time to delivery.
5. 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. Financing data are reported in terms of actual funds paid or received,
including accrued interest.
6. 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, "n.a." indicates that data are not published because of insufficient activity.
Major changes in the report form filed by primary dealers induced a break in the dealer
data series as of the week ending July 6, 1994.
Federal Finance A3 3
1.44
FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
Debt Outstanding
Millions of dollars, end of period
1994
Agency
1990
1 Federal and federally sponsored agencies
2 Federal agencies
3
Defense Department 1
4
Export-Import Bank 2 ' 3
5
Federal Housing Administration 4
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
13
Federal National Mortgage Association
14
Farm Credit Banks 8
15
Student Loan Marketing Association 9
16
Financing Corporation10
17
Farm Credit Financial Assistance Corporation 11
18
Resolution Funding Corporation 12
1992
1991
1995
1993
Dec.
Jan.
Feb.
Mar.
Apr.
434,668
442,772
483,970
570,711
741,992
740,521
749,285
757,859
n.a.
42,159
7
11,376
393
41,035
7
9,809
397
41,829
45,193
6
5,315
255
39,186
6
3,455
116
39,196
6
3,455
59
39,054
6
3,455
60
38,759
6
3,156
65
38,777
6
3,156
70
n.a.
n.a.
6,948
23,435
8,421
22,401
7
7,208
374
n.a.
10,660
23,580
n.a.
n.a.
n.a.
n.a.
n.a.
9,732
29,885
8,073
27,536
8,073
27,603
7,873
27,660
7,873
27,659
n.a.
7,873
27,672
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
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
525,518
141,577
49,993
201,112
53,123
39,784
8,170
1,261
29,996
702,806
208,881
93,279
257,230
53,175
50,335
8,170
1,261
29,996
701,325
210,905
95,060
250,467
55,558
49,425
8,170
1,261
29,996
710,231
208,843
101,417
255,719
53,846
50,506
8,170
1,261
29,996
719,100
213,373
101,673
258,653
53,947
51,554
8,170
1,261
29,996
n.a.
179,083
185,576
154,994
128,187
103,817
101,157
100,388
98,266
11,370
6,698
4,850
14,055
9,803
8,201
4,820
10,725
7,202
10,440
4,790
6,975
5,309
9,732
4,760
6,325
215,223
106,432
258,176
53,629
n.a.
8,170
1,261
29,996
MEMO
19 Federal Financing Bank debt 13
20
21
22
23
24
Lending to federal and federally sponsored
Export-Import Bank 3
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6
Other lending14
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other
3,449
8,073
3,449
8,073
3,449
7,873
3,150
7,873
3,150
7,873
n.a.
n.a.
n.a.
n.a.
n.a.
3,200
3,200
3,200
3,200
3,200
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
52,324
18,890
70,896
48,534
18,562
84,931
42,979
18,172
64,436
38,619
17,578
45,864
33,719
17,392
37,984
33,669
17,309
35,457
33,574
17,360
34,932
32,759
17,293
33,991
31,769
17,299
32,083
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 Farmers 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. Includes Federal Agricultural Mortgage Corporation, therefore details do not sum to total.
Some data are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is
shown on line 17.
9. Before late 1982, the association obtained financing through the Federal Financing
Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22.
95,374
agencies
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 FFB incurs debt
solely for the purpose of lending to other agencies, its debt is not included in the main
portion of the table in order to avoid double counting.
14. Includes FFB 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 Fanners Home Administration entry consists exclusively of
agency assets, whereas the Rural Electrification Administration entry consists of both
agency assets and guaranteed loans.
A34
1.45
DomesticNonfinancialStatistics • September 1995
NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
1994
Type of issue or issuer,
or use
1992
1993
1995
1994
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
1 All issues, new and refunding 1
226,818
279,945
153,950
11,856
9,541
7,717
7,366
11,844
8,552
11,804
17,956
By type of issue
2 General obligation
3 Revenue
78,611
136,580
90,599
189,346
54,404
99,546
5,781
6,075
2,272
7,269
3,770
3,947
3,714
3,652
5,459
6,385
3,536
5,016
4,332
7,472
5,755
12,201
By type of issuer
4 State
5 Special district or statutory authority 2
6 Municipality, county, or township
24,874
138,327
63,617
27,999
178,714
73,232
19,186
95,896 r
38,868
1,530
6,228
4,098
151
7,352
2,038
738
4,835
2,144
1,032
4,889
1,445
2,315
6,572
2,957
994
5,814
1,744
1,315
8,039
2,450
1,329
11,382
5,245
7 Issues for new capital
101,865
91,434
105,972
9,629
8,444
5,737
5,670
10,538
6,497
8,406
13,796
18,852
14,357
12,164
16,744
6,188
33,560
16,831
9,167
12,014
13,837
6,862
32,723
21,267
10,836
10,192
20,289
8,161
35,227
1,780
623
974
1,416
981
3,855
1,701
307
1,292
2,208
1,046
1,890
1,411
625
538
1,182
384
1,597
1,464
671
249
869
215
2,202
1,666
454
633
2,556
1,011
4,218
1,863
615
345
1,547
391
1,736
2,594
606
1,282
1,738
416
1,770
2,494
3,127
1,235
2,062
411
4,467
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
Dealer's Digest before then.
Company
beginning
January
1993;
Investment
U.S. Corporations
Millions of dollars
1994
Type of issue, offering,
or issuer
1 All issues 1
2 Bonds
2
1992
559,827
1993
754,969
1995
1994
n.a.
Oct.
Nov.
Dec.
Jan.
34,481
38,258
23,267
37,216 r
r
Mar.
Apr.r
42,079 r
39,590 r
32,617
50,943
r
36,670 r
27,088
44,944
Feb.
May
471,502
641,498
n.a.
30,909
33,286
20,493
34,312
378,058
65,853
27,591
486,879
116,240
38,379
365,050
n.a.
56,238
25,192
n.a.
5,718
27,278
n.a.
6,008
17,809
n.a.
2,684
24,353 r
n.a.
9,959
29,350 r
n.a.
7,898 r
32,703 r
n.a.
3,967 r
24,615
n.a.
2,473
38,671
n.a.
6,273
82,058
43,111
9,979
48,055
15,394
272,904
88,002
60,293
10,756
56,272
31,950
394,226
31,981
27,900
4,573
11,713
11,986
333,135
2,498
2,204
227
695
279
25,007
2,491
1,578
239
744
333
27,902
1,508
2,469
269
273
419
15,556
1,497
2,334
0
659
813
29,009 r
4,405 r
3,038
100
215
1,122
28,368 r
2,126 r
1,941
403
839
399
30,962 r
2,814
2,128
978
297
323
20,548
1,609
6,093
1,045
2,546
1,716
31,935
12 Stocks 2
88,325
113,472
n.a.
3,572
4,972
2,774
2,902 r
4,831
2,920 r
3,529
5,998
By type of offering
13 Public preferred
14 Common
15 Private placement 3
21,339
57,118
9,867
18,897
82,657
11,917
12,504
47,884
713
2,859
n.a.
279
4,693
n.a.
178
2,595
n.a.
430
2,472 r
n.a.
296
4,535 r
n.a.
205
2,715 r
n.a.
381
3,148
n.a.
1,407
4,591
n.a.
22,723
20,231
2,595
6,532
2,366
33,879
22,271
25,761
2,237
7,050
3,439
52,021
745
1,105
79
4
0
1,639
1,963
1,789
76
333
0
791
1,203
857
0
165
21
527
1,086
39(f
19
134
496
776
1,582'
l,413 r
15
258
0
1,564
1,010
907 r
60
137
20
786
612
1,841
48
141
0
887
2,356
1,050
101
185
74
2,232
By type of offering
3 Public, domestic
4 Private placement, domestic 3
5 Sold abroad
6
7
8
9
10
11
16
17
18
19
20
21
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
t
1
n.a.
1
1
1
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.
37,248
2. Monthly data cover only public offerings.
3. Monthly data are not available.
SOURCES. Beginning July 1993, Securities Data Company and the Board of Governors
of the Federal Reserve System.
Securities
1.47
Market
and Corporate
Finance
A35
Net Sales and Assets1
OPEN-END INVESTMENT COMPANIES
Millions of dollars
1994
Item
1995
1994
1993
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
1 Sales of own shares 2
851,885
841,286
59,285
56,849
73,183
75,099
59,121
69,898
68,294
70,939
2 Redemptions of own shares
3 Net sales 3
567,881
284,004
699,823
141,463
53,743
5,543
55,757
1,092
70,747
2,436
63,737
11,362
50,738
8,383
60,970
8,928
59,957
8,337
57,033
13,906
4 Assets 4
1,510,209
1,550,490
1,601^63
1,549,186
1,550,490
1,563,187
1,619,705
1,657,370
1,710,280
1,769,249
5 Cash 5
6 Other
100,209
1,409,838
121,296
1,429,195
126,766
1,474,597
125,843
1,423,344
121,296
1,429,195
124,351
1,438,836
126,307
1,493,399
121,424
1,535,946
124,092
1,586,187
128,866
1,640,383
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 newly formed companies after
their initial offering of securities.
1. Data on sales and redemptions exclude money market mutual funds but include
limited-maturity municipal bond funds. Data on asset positions exclude both money
market mutual funds and limited-maturity municipal bond funds.
2. Includes reinvestment of net income dividends. Excludes reinvestment of capital
gains distributions and share issue of conversions from one fund to another in the same
group.
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
1993
1992
Account
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
7 Inventory valuation
8 Capital consumption adjustment
1993
1994
1995
1994
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Qlr
405.1
395.9
139.7
256.2
171.1
85.1
485.8
462.4
173.2
289.2
191.7
97.5
542.7
524.5
202.5
322.0
205.2
116.9
473.1
456.6
171.8
284.8
190.7
94.1
493.5
458.7
169.9
288.9
193.2
95.6
533.9
501.7
191.5
310.2
194.6
115.6
508.2
483.5
184.1
299.4
196.3
103.0
546.4
523.1
201.7
321.4
202.5
118.9
556.0
538.1
208.6
329.5
207.9
121.6
560.3
553.5
215.6
337.9
213.9
124.0
569.7
570.6
220.0
350.7
217.1
133.5
-6.4
15.7
-6.2
29.5
-19.5
37.7
-10.0
26.5
3.0
31.7
-6.5
38.8
-12.3
37.0
-14.1
37.4
-19.6
37.5
-32.1
38.8
-39.0
38.1
Q2
Q3
Q41
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
1994
1993
Industry
1992
1993
19941
Q1
Q2
Q3
Q4
Q1
1 Total nonfarm business
546.60
586.73
638.37
563.48
578.95
594.56
604.51
61934
637.08
651.92
645.13
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
73.32
100.69
81.45
98.02
92.78
99.77
78.19
95.80
80.33
97.22
82.74
99.74
83.64
98.51
86.03
99.02
91.71
102.28
98.97
98.39
94.44
99.39
Nonmanufacturing
4 Mining
Transportation
5
Railroad
6
Air
7
Other
Public utilities
8
Electric
9
Gas and other
10 Commercial and o t h e r
8.88
10.08
11.24
8.98
9.10
11.09
10.92
11.43
10.70
11.57
11.27
6.67
8.93
7.04
6.14
6.42
9.22
6.72
3.95
10.53
6.16
7.26
8.96
5.94
6.63
8.92
5.89
6.70
8.74
6.55
5.06
10.23
7.46
4.23
10.77
5.36
4.53
9.70
6.65
3.86
10.22
7.40
3.16
11.42
48.22
23.99
268.84
52.55
23.43
299.44
52.25
24.20
336.93
49.98
23.79
284.35
50.61
23.83
296.35
52.96
22.98
303.74
55.60
23.27
310.73
48.68
24.51
327.20
53.55
22.96
336.28
54.15
24.35
343.76
52.60
24.97
340.48
1. Figures are amounts anticipated by business.
2. "Other" 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
1.51
DomesticNonfinancialStatistics • September 1995
DOMESTIC FINANCE COMPANIES
Assets and Liabilities1
Billions of dollars, end of period; not seasonally adjusted
1993
Account
1992
1994
1995
1994r
1993
Q3
Q4
Ql
Q2
Q3
Q4'
Ql
ASSETS
1 Accounts receivable, gross 2
2
Consumer
3
Business
4
Real estate
491.8
118.3
301.3
72.2
482.8
116.5
294.6
71.7
551.0
134.8
337.6
78.5
474.0
111.0
291.9
71.1
482.8
116.5
294.6
71.7
494.5
120.1
302.3
72.1
511.3
124.3
313.2
73.8
524.1
130.3
317.2
76.6
551.0
134.8
337.6
78.5
568.5
135.8
351.9
80.8
53.2
16.2
50.7
11.2
55.0
12.4
49.5
11.2
50.7
11.2
51.2
11.6
51.9
12.1
51.1
12.1
55.0
12.4
58.9
12.9
7 Accounts receivable, net
8 All other
422.4
142.5
420.9
170.9
483.5
183.4
413.3
163.9
420.9
170.9
431.7
171.2
447.3
174.6
460.9
177.2
483.5
183.4
496.7
194.6
9 Total assets
564.9
591.8
666.9
577.3
591.8
602.9
621.9
638.1
666.9
691.4
37.6
156.4
25.3
159.2
21.2
184.6
25.8
149.9
25.3
159.2
24.2
165.9
23.3
171.2
21.6
171.0
21.2
184.6
21.0
181.3
n.a.
n.a.
39.5
196.3
68.0
67.1
n.a.
n.a.
42.7
206.0
87.1
71.4
n.a.
n.a.
51.0
235.0
99.5
75.7
n.a.
n.a.
44.6
204.2
83.8
68.9
n.a.
n.a.
42.7
206.0
87.1
71.4
n.a.
n.a.
41.1
211.7
90.5
69.5
n.a.
n.a.
44.7
219.6
89.9
73.2
n.a.
n.a.
50.0
228.2
95.0
72.3
n.a.
n.a.
51.0
235.0
99.5
75.7
n.a.
n.a.
52.5
254.4
102.5
79.7
564.9
591.8
666.9
577.3
591.8
602.9
621.9
638.1
666.9
691.4
5
6
LESS: Reserves for unearned income
Reserves for losses
LIABILITIES AND CAPITAL
10 Bank loans
11 Commercial paper
12
13
14
15
16
17
Debt
Other short-term
Long-term
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits
18 Total 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, as 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
1994
1995'
Type of credit
Jan.
Dec.'
Feb.
Mar.
Apr.
May
Seasonally adjusted
1 Total
539,996'
545,533'
614,784
614,784
624,038
630,388
637,911
643,131
651,914
2 Consumer
3 Real estate 2
4 Business
157,579'
72,473 r
309,944'
160,349'
71,965'
313,219'
176,198
78,770
359,816
176,198
78,770
359,816
178,430
79,210
366,398
178,623
80,326
371,439
180,029
81,210
376,672
181,849
81,784
379,497
186,521
82,656
382,737
Not seasonally adjusted
5 Total
6 Consumer
7
Motor vehicles
Other consumer 3
8
9
Securitized motor vehicles 4
10
Securitized other consumer 4
11 Real estate 2
12 Business
Motor vehicles
13
14
Retail 5
15
Wholesale 6
16
Leasing
17
Equipment
18
Retail
19
Wholesale 6
20
Leasing
Other business 7
21
22
Securitized business assets 4
23
Retail
24
Wholesale
25
Leasing
544,691
550,751'
620,975
620,975
624,281
629,486
640,378
645,704
651,538
159,558
57,259
61,020
29,734
11,545
72,243
312,890
89,011
20,541
29,890
38,580
151,424
33,521
8,680
109,223
60,856
11,599
1,120
5,756
4,723
162,770
56,057
60,396
36,024
10,293
71,727
316,254'
95,173
18,091
31,148
45,934
145,452
35,513
8,001
101,938
53,997
21,632'
2,869'
10,584
8,179'
178,999
61,609
73,221
31,897
12,272
78,479
363,497
118,197
21,514
35,037
61,646
157,953
39,680
9,678
108,595
61,495
25,852
4,494
14,826
6,532
178,999
61,609
73,221
31,897
12,272
78,479
363,497
118,197
21,514
35,037
61,646
157,953
39,680
9,678
108,595
61,495
25,852
4,494
14,826
6,532
179,979
62,321
75,147
30,262
12,249
79,592
364,710
118,979
21,809
34,493
62,677
158,820
40,387
9,372
109,061
61,304
25,607
4,251
14,945
6,411
178,601
61,067
73,691
31,304
12,539
80,754
370,131
121,818
21,577
36,759
63,482
159,333
40,329
9,462
109,542
63,339
25,641
4,035
15,465
6,141
180,653
61,256
74,534
32,155
12,708
80,762
378,963
125,805
21,652
38,868
65,285
161,306
42,024
8,913
110,369
64,815
27,037
4,404
16,653
5,980
181,672
62,434
75,447
31,261
12,530
82,011
382,021
128,052
22,303
39,617
66,132
162,212
41,182
9,660
111,370
64,475
27,282
4,937
16,561
5,784
184,554
63,687
75,958
32,047
12,862
82,548
384,436
127,272
21,093
39,598
66,581
164,477
41,868
10,721
111,888
64,197
28,490
5,224
17,676
5,590
1. Includes finance company subsidiaries of bank holding companies but not of
retailer? 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.
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.
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
1994
Item
1992
1993
1995
1994
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) 2
Yield (percent per year)
6 Contract rate1
7 Effective rate 1,3
8 Contract rate (HUD series) 4
158.1
118.1
76.6
25.6
1.60
163.1
123.0
78.0
26.1
1.30
170.4
130.8
78.8
27.5
1.29
184.9
136.2
76.9
28.0
1.38
176.5
134.2
78.0
28.0
1.31
175.6
135.6
79.3
28.3
1.32
173.3
132.6
78.2
28.6
1.18
174.7
134.6
79.2
28.1
1.14
178.1
136.3
78.7
28.4
1.30
181.7
137.7
78.2
27.2
1.18
7.98
8.25
8.43
7.03
7.24
7.37
7.26
7.47
8.58
7.61
7.83
9.32
7.96
8.18
9.11
8.07
8.28
8.79
8.02
8.21
8.60
7.96
8.15
8.44
7.79
7.99
7.84
7.54
7.73
7.80
8.46
7.71
7.46
6.65
8.68
7.96
9.54
8.76
9.10
8.69
9.05
8.38
8.60
8.08
8.56
7.96
8.03
7.53
8.00
7.24
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (Section 203) 5
10 GNMA securities 6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
FHA/VA insured
12
13
Conventional
158,119
22,593
135,526
190,861
23,857
167,004
222,057
28,377
194,499
222,057
28,377
194,499
222,774
28,368
195,170
223,137
28,420
195,439
223,956
28,672
195,998
226,197
28,664
198,161
228,078
28,576
200,004
232,534
28,886
204,022
Mortgage transactions (during period)
14 Purchases
75,905
92,037
62,389
3,399
2,154
1,802
2,390
3,709
3,787
6,575
Mortgage commitments (during period)
15 Issued7
16 To sell 8
74,970
10,493
92,537
5,097
54,038
1,820
2,910
55
1,720
57
1,683
82
3,372
64
3,277
22
6,085
28
5,605
9
33,665
352
33,313
55,012
321
54,691
72,693
276
72,416
72,693
276
72,416
73,553
272
73,281
75,184
270
74,914
77,313
266
77,047
79,147
262
78,885
81,008
257 r
80,75 l r
85,532
253
85,278
Mortgage transactions (during period)
20 Purchases
21
191,125
179,208
229,242
208,723
124,697
117,110
4,890
3,769
3,254
2,862
5,537
4,806
4,609
3,546
4,530
3,805
10,982
10,479
7,001
5,326
Mortgage commitments (during period)9
22 Contracted
261,637
274,599
136,067
2,412
6,541
7,741
12,704
13,437
4,549
6,198
FEDERAL HOME LOAN MORTGAGE CORPORATION
Mortgage holdings (end of period f
17 Total
FHA/VA insured
18
19
Conventional
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 "points" 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 thirty-year 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 FNMA
exclude swap activity.
A38
1.54
DomesticNonfinancialStatistics • September 1995
MORTGAGE DEBT OUTSTANDING1
Millions of dollars, end of period
1994
Type of holder and property
1991
1992
1995
1993
Q1
Q2
Q3
Q4
Q1
4,425,886
4,466,957
1 All holders
3,926,154
4,056,233
4,229,592
4,258,823
4,314,991
4,374,353
By type of property
2 One- to four-family residences
3 Multifamily residences
4 Commercial
5
2,781,327
306,551
759,154
79,122
2,963,391
295,417
716,687
80,738
3,149,634
291,985
706,780
81,194
3,185,330
292,533
699,690
81,269
3,236,909
294,709
701,541
81,832
3,293,166
297,315
701,617
82,255
3,345,755
296,633
700,997
82,500
3,379,380
297,691
707,217
82,669
1,846,726
876,100
483,623
36,935
337,095
18,447
705,367
538,358
79,881
86,741
388
265,258
11,547
29,562
214,105
10,044
1,769,187
894,513
507,780
38,024
328,826
19,882
627,972
489,622
69,791
68,235
324
246,702
11,441
27,770
198,269
9,222
1,767,835
940,444
556,538
38,635
324,409
20,862
598,330
469,959
67,362
60,704
305
229,061
9,458
25,814
184,305
9,484
1,746,474
937,944
553,894
38,690
324,106
21,254
584,531
458,057
66,924
59,253
297
223,999
9,245
25,232
180,152
9,370
1,763,296
956,840
569,512
38,609
326,800
21,918
585,671
462,219
66,281
56,872
299
220,785
9,107
24,855
177,463
9,360
1,786,178
981,365
592,021
38,004
328,931
22,408
587,545
466,704
65,532
55,017
291
217,269
8,956
24,442
174,514
9,357
1,815,949
1,004,280
611,697
38,916
331,100
22,567
596,198
477,499
64,400
54,011
289
215,471
8,876
24,224
172,957
9,414
1,839,114
1,024,772
625,335
39,734
336,767
22,935
601,636
483,476
63,748
54,120
292
212,706
8,756
23,898
170,624
9,429
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
0
0
0
0
0
112,283
100,387
11,896
28,767
1,693
27,074
26,809
24,125
2,684
286,263
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
0
0
0
0
0
137,584
124,016
13,568
28,664
1,687
26,977
33,665
31,032
2,633
328,598
22
15
7
41,386
15,303
10,940
5,406
9,739
12,215
5,364
6,851
17,284
7,203
5,327
4,754
0
14,112
2,367
1,426
10,319
0
166,642
151,310
15,332
28,460
1,675
26,785
48,476
45,929
2,547
329,160
20
13
7
41,209
14,870
11,037
5,399
9,903
11,344
4,738
6,606
14,241
6,308
4,208
3,726
0
12,696
1,956
2,167
8,573
0
172,343
156,576
15,767
28,181
1,658
26,523
49,127
46,571
2,556
329,725
12
12
0
41,370
14,459
11,147
5,526
10,239
11,169
4,826
6,343
13,908
6,045
4,230
3,633
0
11,407
1,706
1,701
8,000
0
175,377
159,437
15,940
28,475
1,675
26,800
48,007
45,427
2,580
329,304
12
12
0
41,587
14,084
11,243
5,608
10,652
10,533
4,321
6,212
15,403
6,998
4,569
3,836
0
9,169
1,241
2,090
5,838
0
177,200
161,255
15,945
28,538
1,679
26,859
46,863
44,208
2,655
323,491
6
6
0
41,781
13,826
11,319
5,670
10,966
10,964
4,753
6,211
10,428
5,200
2,859
2,369
0
7,821
1,049
1,595
5,177
0
178,059
162,160
15,899
28,555
1,671
26,885
45,876
43,046
2,830
319,770
15
15
0
41,857
13,507
11,418
5,807
11,124
10,890
4,715
6,175
9,342
4,755
2,494
2,092
0
6,730
840
1,310
4,580
0
177,615
161,780
15,835
28,065
1,651
26,414
45,256
42,122
3,134
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
1,425,546
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
1,553,818
414,066
404,864
9,202
446,029
441,494
4,535
495,525
486,804
8,721
28
5
0
13
10
198,171
164,000
8,701
25,469
0
1,611,449
423,446
414,194
9,251
466,949
462,779
4,170
507,376
498,489
8,887
26
5
0
12
9
213,653
177,000
9,202
27,451
0
1,652,999
435,709
426,363
9,346
479,555
475,733
3,822
514,855
505,730
9,125
22
4
0
10
8
222,858
179,500
11,514
31,844
0
1,682,421
444,976
435,511
9,465
482,987
479,539
3,448
523,512
514,375
9,137
20
4
0
9
7
230,926
182,300
13,891
34,735
0
1,703,076
450,934
441,198
9,736
486,480
483,354
3,126
530,343
520,763
9,580
19
3
0
9
7
235,300
183,600
14,925
36,774
0
1,714,357
454,401
444,632
9,769
488,723
485,643
3,080
533,262
523,903
9,359
14
2
0
7
5
237,957
184,400
15,743
37,814
0
562,616
370,157
83,937
93,541
14,981
575,237
382,572
85,871
91,524
15,270
579,341
387,345
86,586
91,401
14,009
571,739
378,977
87,829
91,020
13,912
568,970
375,152
89,216
91,393
13,209
576,450
379,959
90,681
93,130
12,681
583,370
387,055
91,013
92,929
12,373
593,715
393,848
91,991
95,406
12,470
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 3
13
One- to four-family
14
Multifamily
15
Commercial
16
Farm
17
Life insurance companies
18
One- to four-family
19
Multifamily
20
Commercial
Farm
21
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
Federal Housing and Veterans' Administrations
31
32
One- to four-family
33
Multifamily
34
Resolution Trust Corporation
35
One- to four-family
36
Multifamily
37
Commercial
38
Farm
39
Federal Deposit Insurance Corporation
40
One- to four-family
41
Multifamily
42
Commercial
43
Farm
44
Federal National Mortgage Association
45
One- to four-family
46
Multifamily
47
Federal Land Banks
48
One- to four-family
49
Farm
50
Federal Home Loan Mortgage Corporation
51
One- to four-family
Multifamily
52
53 Mortgage pools or trusts 5
54
Government National Mortgage Association
55
One- to four-family
56
Multifamily
57
Federal Home Loan Mortgage Corporation
58
One- to four-family
59
Multifamily
60
Federal National Mortgage Association
61
One- to four-family
62
Multifamily
63
Farmers Home Administration 4
64
One- to four-family
Multifamily
65
66
Commercial
67
Farm
68
Private mortgage conduits
69
One- to four-family
70
Multifamily
71
Commercial
72
Farm
73 Individuals and others 6
74
One- to four-family
Multifamily
75
76
Commercial
77
1. 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 FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of
accounting changes by the Fanners 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.
SOURCES. Based on data from various institutional and government sources. Separation
of nonfarm mortgage debt by type of property, if not reported directly, and interpolations
and extrapolations, when required for some quarters, are estimated in part by the Federal
Reserve. Line 64 from Inside Mortgage Securities.
Consumer Installment Credit
A39
CONSUMER INSTALLMENT CREDIT1
1.55
Millions of dollars, amounts outstanding, end of period
1995r
1994
Holder and type of credit
1992r
1993r
1994'
Dec. r
Jan.
Feb.
Mar.
Apr.
May
Seasonally adjusted
1 Total
730,847
790,351
902,853
902,853
914,260
918,968
933,717
945,314
956,822
7
3
4 Other
257,436
258,081
215,331
280,566
286,588
223,197
317,237
334,511
251,106
317,237
334,511
251,106
319,408
340,450
254,402
321,175
345,630
252,164
323,502
352,741
257,474
325,231
359,641
260,443
328,417
366,276
262,129
Not seasonally adjusted
748,057
809,440
925,000
925,000
922,788
917,652
927,260
936,979
948,345
330,088
118,279
91,694
37,049
49,561
121,386
367,566
116,453
101,634
37,855
55,296
130,636
427,851
134,830
119,594
38,468
60,957
143,300
427,851
134,830
119,594
38,468
60,957
143,300
425,941
137,468
120,029
38,153
57,819
143,378
423,144
134,758
120,603
37,835
55,828
145,484
425,208
135,790
121,946
37,519
55,351
151,446
431,444
137,881
123,233
37,499
55,116
151,806
434,340
139,645
125,076
37,500
55,914
155,870
Commercial banks
Finance companies
Pools of securitized assets 2
258,226
109,623
57,259
33,888
281,458
122,000
56,057
39,481
318,213
141,851
61,609
34,918
318,213
141,851
61,609
34,918
317,869
141,546
62,321
33,265
319,042
141,801
61,067
34,312
321,592
141,857
61,256
35,172
322,955
142,014
62,434
34,129
326,968
142,421
63,687
34,984
16 Revolving
17
Commercial banks
18
Nonfinancial business
19
Pools of securitized assets 2
271,850
132,966
44,466
74,921
301,837
149,920
50,125
79,878
352,266
180,183
55,341
94,376
352,266
180,183
55,341
94,376
347,641
176,959
52,299
95,826
345,354
175,574
50,405
96,613
348,411
175,800
49,959
101,571
354,998
180,609
49,773
103,174
361,453
182,907
50,595
106,077
70 Other
Commercial banks
71
Finance companies
77,
73
Nonfinancial business
24
Pools of securitized assets
217,981
87,499
61,020
5,095
12,577
226,145
95,646
60,396
5,171
11,277
254,521
105,817
73,221
5,616
14,006
254,521
105,817
73,221
5,616
14,006
257,278
107,436
75,147
5,520
14,287
253,256
105,769
73,691
5,423
14,559
257,257
107,551
74,534
5,392
14,703
259,026
108,821
75,447
5,343
14,503
259,924
109,012
75,958
5,319
14,809
5
By major holder
6 Commercial banks
7 Finance companies
8
9 Savings institutions
10 Nonfinancial business
11 Pools of securitized assets
By major type of credit3
17
13
14
15
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.
1.56
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.
TERMS OF CONSUMER INSTALLMENT CREDIT1
Percent per year except as noted
1995
1994
Item
1992
1993
1994
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
INTEREST RATES
Commercial banks2
1 48-month new car
2 24-month personal
9.29
14.04
8.09
13.47
8.12
13.19
8.75
13.59
n.a.
n.a.
n.a.
n.a.
9.70
14.10
n.a.
n.a.
n.a.
n.a.
9.78
14.03
Credit card plan
3 All accounts
4 Accounts assessed interest
n.a.
n.a.
n.a.
n.a.
15.69'
15.77r
15.69r
15.77r
n.a.
n.a.
n.a.
n.a.
16.14r
15.27r
n.a.
n.a.
n.a.
n.a.
16.15
16.23
Auto finance companies
5 New car
6 Used car
9.93
13.80
9.48
12.79
9.79
13.49
10.53
14.19
10.72
14.48
11.35
14.57
11.89
15.06
11.95
15.10
11.74
14.99
11.43
14.78
54.0
47.9
54.5
48.8
54.0
50.2
54.6
50.3
53.9
50.3
53.9
52.0
54.1
52.0
54.5
52.1
54.6
52.2
54.4
52.2
89
97
91
98
92
99
93
100
92
100
92
99
92
99
92
99
92
100
92
99
13,584
9,119
14,332
9,875
15,375
10,709
15,971
11,202
16,187
11,309
16,068
11,185
15,774
11,181
15,826
11,220
16,029
11,505
16,155
11,396
OTHER TERMS 3
Maturity (months)
7 New car
8 Used car
Loan-to-value
9 New car
10 Used car
ratio
Amount financed (dollars)
11 New car
12 Used car
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. Data are available for only the second month of each quarter,
3. At auto finance companies,
A40
1.57
D o m e s t i c Financial Statistics •
September
1995
F U N D S R A I S E D IN U.S. CREDIT M A R K E T S 1
Billions of dollars; quarterly data at seasonally adjusted annual rates
1993
1990
1991
1992
1993
1994
1995
1994
Q3
Q4
Q1
Q2
Q3
04
Ql
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial s e c t o r s . . . .
635.6
475.8
536.1
622.1
595.0
613.8
659.6
634.7
530.2
580.8
634.4
816.0
By sector and instrument
2 U.S. government
3
Treasury securities
4
Budget agency issues and mortgages
246.9
238.7
8.2
278.2
292.0
-13.8
304.0
303.8
.2
256.1
248.3
7.8
155.9
155.7
.2
173.4
157.2
16.2
274.2
266.5
7.7
210.5
211.8
-1.3
122.9
118.2
4.7
135.0
130.7
4.3
155.0
162.1
-7.1
271.8
273.0
-1.2
5 Private
388.7
197.5
232.1
366.0
439.2
440.4
385.5
424.1
407.3
445.8
479.4
544.2
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
Commercial paper
Other loans
48.7
47.1
199.5
185.6
4.8
9.3
-.3
16.0
.4
9.7
67.4
68.7
78.8
161.4
163.8
-3.1
.4
.4
-15.0
-40.9
-18.4
-37.1
31.1
67.5
123.9
179.5
-11.2
-45.5
1.1
5.5
-13.8
8.6
9.2
75.5
75.2
155.7
183.9
-6.0
-22.6
.5
62.3
5.0
10.0
-17.7
-34.1
22.0
186.5
196.1
1.4
-12.3
1.3
117.5
74.0
21.4
51.8
65.2
72.0
222.1
236.5
-4.9
-9.9
.4
76.2
7.8
17.2
-20.2
27.3
67.4
148.5
184.6
-2.3
-33.9
.2
111.3
28.5
3.8
-1.3
2.6
35.4
162.8
198.5
-1.0
-34.9
.3
72.7
65.8
8.2
76.6
-25.4
35.9
170.4
164.5
4.6
-.9
2.3
121.9
55.5
16.4
32.7
-63.2
14.2
221.2
220.8
6.5
-7.7
1.7
125.9
86.8
33.8
27.1
-50.4
2.7
191.6
200.7
-4.3
-5.8
1.0
149.4
88.0
27.2
70.9
-65.6
41.4
213.0
188.3
2.6
21.5
.7
83.4
156.7
1.1
114.3
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
218.9
123.7
2.3
10.1
111.3
46.0
170.9
-35.9
2.1
-28.5
-9.6
62.6
217.7
-2.0
1.0
-43.9
40.9
16.4
284.5
18.5
2.0
-24.7
41.2
63.0
351.6
135.8
2.4
13.5
119.9
-48.2
368.5
25.6
4.1
-23.2
44.8
46.3
337.7
30.8
3.6
-15.6
42.7
17.0
310.3
127.3
2.6
5.4
119.3
-13.4
307.3
144.3
8.1
12.5
123.7
-44.3
381.9
134.0
1.6
17.9
114.5
-70.2
407.0
137.5
-2.8
18.2
122.1
-65.1
304.7
302.7
-.5
68.8
234.3
-63.1
23 Foreign net borrowing in United States
24
Bonds
25
Bank loans n.e.c
26
Commercial paper
27
U.S. government and other loans
23.9
21.4
-2.9
12.3
-7.0
13.9
14.1
3.1
6.4
-9.8
21.3
14.4
2.3
5.2
-.6
46.9
59.4
.7
-9.0
-4.2
-9.8
17.6
1.4
-27.3
-1.5
83.1
84.5
1.0
-1.6
-.8
22.9
41.4
-6.3
-12.0
-.1
-66.3
29.0
6.0
-101.8
.5
-10.1
9.4
-4.5
-5.2
-9.8
8.3
8.6
4.7
-8.1
3.2
29.0
23.4
-.5
5.9
.2
55.7
11.0
8.3
37.9
-1.5
28 Total domestic plus foreign
659.4
489.6
557.4
669.1
585.2
696.9
682.6
568.3
520.1
589.1
6633
871.7
Financial sectors
29 Total net borrowing by financial sectors
30
31
32
33
34
35
36
37
38
39
By instrument
U.S. government-related
Government-sponsored enterprises securities
Mortgage pool securities
Loans from U.S. government
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks
By borrowing sector
40 Government-sponsored enterprises
41 Federally related mortgage pools
42
43
Commercial banks
44
Bank holding companies
45
Funding corporations
46
Savings institutions
47
Credit unions
48
Life insurance companies
49
Finance companies
Mortgage companies
50
Real estate investment trusts (REITs)
51
52
Issuers of asset-backed securities (ABSs)
202.9
152.6
237.1
289.1
451.8
438.9
361.6
518.7
366.7
403.1
518.5
282.5
167.4
17.1
150.3
-.1
145.7
9.2
136.6
.0
155.8
40.3
115.6
.0
164.2
80.6
83.6
.0
284.3
176.9
112.1
-4.8
287.3
167.8
119.5
.0
143.3
53.4
89.9
.0
336.8
160.0
196.0
-19.2
254.7
146.6
108.1
.0
243.1
152.1
91.0
.0
302.4
249.0
53.4
.0
125.4
62.9
62.5
.0
35.5
46.3
.6
4.7
8.6
-24.7
6.8
67.6
.5
8.8
-32.0
-38.0
81.3
78.5
.6
2.2
-.7
.8
124.9
118.2
3.6
-14.0
-6.2
23.3
167.5
105.6
9.8
-12.3
41.6
22.8
151.6
143.4
6.2
-16.1
-9.4
27.4
218.4
138.1
5.5
-18.0
76.0
16.8
182.0
156.3
9.8
-9.9
36.6
-10.8
112.0
91.4
12.4
-27.7
3.6
32.3
160.0
86.9
12.0
-11.9
42.3
30.7
216.1
87.9
4.9
.5
84.0
38.8
157.1
115.2
5.1
11.6
48.9
-23.6
17.0
150.3
35.5
-.7
-27.7
15.4
-30.2
.0
.0
24.0
.0
.8
52.3
9.1
136.6
6.8
-11.7
-2.5
-6.5
-44.5
.0
.0
18.6
-2.4
1.2
51.0
40.2
115.6
81.3
8.8
2.3
13.2
-6.7
.0
.0
-3.6
8.0
.3
56.3
80.6
83.6
124.9
5.6
8.8
2.9
11.1
.2
.2
.2
-1.0
3.4
81.5
172.1
112.1
167.5
10.0
10.3
24.2
12.8
.2
.3
52.4
-11.5
13.7
54.5
167.8
119.5
151.6
6.5
.5
7.9
13.5
.3
-.1
17.5
-.8
6.0
85.8
53.4
89.9
218.4
1.2
12.2
36.7
8.8
.1
.4
16.3
-10.4
6.1
117.6
140.8
196.0
182.0
2.0
3.5
48.8
-5.6
.1
.0
63.3
-21.6
14.5
86.9
146.6
108.1
112.0
12.4
10.1
-17.2
5.8
.2
.0
67.0
-18.2
15.3
36.5
152.1
91.0
160.0
22.8
11.5
47.2
14.8
.5
.0
16.9
-7.0
18.8
42.1
249.0
53.4
216.1
2.9
16.0
17.9
36.1
.2
1.3
62.6
1.0
6.3
52.5
62.9
62.5
157.1
9.6
9.5
62.9
-21.7
-.3
.0
72.5
2.0
6.9
45.3
Flow of Funds A41
1.57
FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued
1994
1993
Transaction category or sector
1990
1991
1992
1993
1995
1994
Q3
Q4
Ql
Q2
Q3
Q4
Ql
53 Total net borrowing, all sectors
862.3
642.2
794.5
958.2
1,037.0
1,135.8
1,044.2
1,087.1
886.8
992.2
1,181.9
1,154.2
54
55
56
57
58
59
60
61
414.4
48.7
114.7
200.1
16.0
2.2
30.7
35.6
424.0
68.7
160.5
161.9
-15.0
-29.1
-44.0
-84.9
459.8
31.1
160.4
124.5
5.5
-9.4
13.1
9.5
420.3
75.5
252.9
159.2
62.3
-8.3
-5.1
1.3
444.9
-34.1
145.2
196.3
117.5
63.2
35.7
68.3
460.7
65.2
299.9
228.3
76.2
-7.3
6.3
6.4
417.5
27.3
246.9
154.0
111.3
4.2
67.7
15.4
566.5
2.6
220.6
172.6
72.7
61.9
-57.0
47.1
377.6
-25.4
136.6
182.8
121.9
23.3
14.8
55.2
378.1
-63.2
109.7
233.2
125.9
79.5
68.0
61.1
457.4
-50.4
114.0
196.5
149.4
88.0
117.1
109.9
397.2
-65.6
167.5
218.1
83.4
176.6
87.9
89.2
U.S. government securities
Tax-exempt securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
Funds raised through mutual funds and corporate equities
62 Total net share issues
63 Mutual funds
64 Corporate equities
Nonfinancial corporations
65
66
Financial corporations
67
Foreign shares purchased in United States
19.7
215.4
296.0
440.1
169.1
513.0
430.1
344.4
213.1
162.9
-44.1
100.9
65.3
-45.6
-63.0
10.0
7.4
151.5
64.0
18.3
15.1
30.7
211.9
84.1
27.0
26.4
30.7
320.0
120.1
21.3
38.2
60.6
138.3
30.7
-40.9
28.6
43.0
363.9
149.1
32.3
38.2
78.6
287.7
142.4
21.5
40.9
80.0
236.2
108.1
-9.6
48.3
69.4
144.0
69.1
-2.0
24.4
46.7
165.4
-2.5
-50.0
23.7
23.8
7.7
-51.8
-102.0
17.9
32.2
113.9
-13.0
-46.8
15.9
17.9
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
DomesticNonfinancialStatistics • September 1995
S U M M A R Y OF FINANCIAL T R A N S A C T I O N S '
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
1993
Transaction category or sector
N E T LENDING IN CREDIT MARKETS
1992
1993
1994
1995
1994
Q3
Q4
QL
Q2
Q3
Q4
QL
2
862.3
642.2
794.5
958.2
1,037.0
1,135.8
1,044.2
1,087.1
886.8
992.2
1,181.9
1,154.2
190.1
157.2
-1.7
-3.7
38.3
33.7
85.5
553.0
13.9
150.3
8.1
125.1
94.9
28.4
-2.8
4.5
16.1
-154.0
94.4
26.5
17.2
34.9
29.0
.0
41.4
.2
80.9
-.7
2.8
51.1
15.9
-7.5
-39.6
-3.7
6.7
29.2
10.5
26.6
612.5
15.2
136.6
31.1
80.8
35.7
48.5
-1.5
-1.9
15.8
-123.5
83.2
32.6
85.7
46.0
-12.7
11.2
90.3
14.7
30.1
-.7
17.5
48.9
10.0
72.0
70.7
-1.1
29.2
-26.8
-11.9
100.5
633.9
69.0
115.6
27.9
95.3
69.5
16.5
5.6
3.7
23.5
-61.3
79.1
12.8
37.3
34.4
1.7
.1
123.7
17.4
1.3
1.1
-6.9
53.8
8.0
-3.4
-19.7
-3.2
18.0
1.5
-18.4
122.6
857.3
90.2
83.6
36.2
142.2
149.6
-9.8
.0
2.4
18.1
-1.7
105.1
33.3
40.2
25.5
-9.0
.0
169.6
10.2
14.6
.6
9.2
80.1
9.5
235.8
319.4
-2.0
25.5
-107.1
-24.1
133.3
692.0
123.3
112.1
31.5
162.0
148.1
11.2
.9
1.9
13.8
35.2
61.1
21.1
-42.4
60.8
68.2
-22.9
7.6
3.5
28.5
4.7
-34.0
51.0
7.1
-52.8
-83.0
-3.3
41.2
-7.7
-15.4
125.0
1,079.0
144.8
119.5
28.2
146.7
160.3
-16.9
1.2
2.2
32.4
21.0
111.8
37.6
91.9
27.4
9.4
-1.6
186.9
5.9
25.3
1.0
-7.8
88.6
9.9
85.8
174.3
-3.5
16.0
-101.0
-7.9
203.7
762.5
71.2
89.9
38.5
188.1
197.3
-6.5
-4.8
2.1
42.6
-13.3
86.4
32.1
-60.1
36.9
22.6
-13.3
138.9
7.7
56.9
.2
-82.8
111.1
8.9
295.0
350.1
-3.6
23.0
-74.4
-46.5
127.7
710.9
92.4
196.0
48.8
184.7
120.6
59.0
3.1
2.1
19.5
13.6
53.7
27.9
-97.7
72.9
72.1
-43.5
61.5
8.3
-45.0
6.6
-55.7
86.0
8.9
299.1
400.0
-1.8
16.8
-115.9
-16.2
65.1
538.8
101.1
108.1
17.9
109.1
128.4
-21.5
.2
1.9
33.5
42.6
6.1
20.8
-30.7
69.3
49.8
-36.3
9.3
3.2
32.2
6.6
-52.6
38.7
10.2
109.5
183.5
-1.9
25.5
-97.6
-9.4
124.1
768.0
125.6
91.0
24.0
191.3
164.6
22.1
2.7
1.9
25.1
50.9
83.4
16.0
-17.6
26.3
58.9
-14.0
24.3
1.4
50.0
5.5
-19.3
37.3
7.7
239.7
344.0
-.5
36.6
-140.5
-24.3
216.1
750.4
174.3
53.4
35.4
163.0
178.7
-15.0
-2.4
1.8
-23.0
33.5
101.1
19.7
-23.6
74.6
91.8
2.1
-64.7
1.0
76.7
.2
-8.6
42.1
1.4
-26.0
81.1
-.1
15.4
-122.3
-19.2
267.9
931.5
12.2
62.5
24.8
337.1
177.2
157.8
.4
1.7
11.3
36.2
72.3
13.0
97.6
67.4
95.7
4.0
-5.3
.8
26.5
2.5
32.2
38.9
1.6
Net flows through credit markets
862.3
642.2
794.5
958.2
1,037.0
1,135.8
1,044.2
1,087.1
886.8
992.2
1,181.9
1,154.2
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
Other financial sources
Official foreign exchange
Special drawing rights certificates
Treasury currency
Life insurance reserves
Pension fund reserves
Interbank claims
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
Investment in bank personal trusts
Miscellaneous
2.0
1.5
1.0
25.7
165.1
35.4
43.3
63.7
-66.1
70.3
-24.2
38.2
65.3
-45.6
3.5
37.0
-4.8
-28.3
29.7
135.7
-5.9
.0
.0
25.7
360.3
-3.9
86.4
1.5
-58.5
41.2
-16.5
-16.7
151.5
64.0
51.4
3.6
-6.2
-3.3
16.1
197.2
-1.6
-2.0
.2
27.3
249.7
61.7
113.8
-57.2
-73.2
3.9
35.5
-7.2
211.9
84.1
4.2
41.5
8.5
18.4
-7.1
257.6
.8
.0
.4
35.2
309.2
44.6
117.3
-70.3
-23.5
19.2
65.5
-11.7
320.0
120.1
61.9
49.0
4.6
-11.6
1.6
290.4
-5.8
.0
.7
20.1
96.1
94.0
-10.1
-40.5
19.0
45.4
84.3
30.1
138.3
30.7
-2.3
92.2
3.4
-27.4
18.8
260.9
1.7
.0
.4
36.6
349.9
-5.0
73.1
-68.1
-59.5
.6
67.8
-50.7
363.9
149.1
76.6
49.6
-1.8
3.4
.1
221.4
2.2
.0
.7
35.5
251.6
-14.0
81.9
-36.6
13.7
61.1
-14.4
32.8
287.7
142.4
86.5
51.9
4.9
-27.2
17.6
344.7
-.2
.0
.7
20.0
-.7
156.0
173.1
2.5
-39.6
-35.1
23.0
16.0
236.2
108.1
29.9
35.3
14.9
-43.1
15.0
377.4
-14.6
.0
.6
8.1
90.1
180.5
-66.1
-62.4
-4.4
68.5
176.4
16.9
144.0
69.1
-17.7
96.3
-12.7
-24.1
24.7
262.6
.2
.0
.8
23.8
147.9
-22.1
-89.2
-57.2
81.2
49.9
82.9
23.2
165.4
-2.5
-62.3
116.0
5.9
-15.5
23.6
299.1
-8.6
.0
.7
28.7
147.1
61.5
-58.0
-44.9
39.0
98.4
54.8
64.3
7.7
-51.8
40.9
121.3
5.5
-26.9
11.9
104.7
27.7
.0
.7
25.4
323.0
23.1
118.0
52.8
94.3
-7.3
159.6
5.0
113.9
-13.0
-33.4
118.2
18.9
-45.8
21.0
301.0
54
Total financial sources.
1,410.6
1,530.2
1,764.5
2,280.9
1,885.1
2,345.2
2,367.2
2,176.6
1,822.6
1,763.2
1,778.1
2,457.2
3.3
8.5
9.1
-13.1
4.5
9.7
.7
1.6
4.1
-1.5
-1.3
16.5
-4.8
-2.8
5.3
2.1
-5.2
22.2
-15.5
-6.2
12.5
-2.4
.6
-26.9
-1.4
-1.1
16.2
15.2
-6.2
29.0
-30.7
-4.3
2.8
18.8
-5.0
9.1
.2
1.6
-24.0
-35.4
-.6
26.2
6.2
1.3
-45.3
-.2
-4.9
27.9
14.0
-46.0
-.2
4.2
82.5
1.0
-49.1
-.2
-2.7
50.1
-1.6
2.5
-.2
-10.4
66.6
1.2
-19.6
-.2
24.0
23.1
-8.6
15.4
-.2
-29.1
12.2
.4
3.2
-.2
5.3
118.7
3.1
-197.4
-.2
11.3
66.3
-1.4
157.6
-.2
1.5
3.0
-8.7
46.6
-.2
-3.5
74.1
-23.5
-191.7
1,447.2
1,541.2
1,767.2
2,228.8
1,839.5
2,288.6
2,322.7
2,218.9
1,879.3
1,491.7
1,768.1
2,579.2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Total net lending in credit markets
1991
1990
Private domestic nonlinancial sectors
Households
Nonfarm noncorporate business
Nonlinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Government sponsored enterprises
Federally related mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank holding companies
Banks in U.S. affiliated areas
Funding corporations
Thrift institutions
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds
Finance companies
Mortgage companies
Mutual funds
Closed-end funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Asset-backed securities issuers (ABSs)
Bank personal trusts
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
33
34
35
36
Floats not included in assets ( - )
5 5 U.S. government checkable deposits
5 6 Other checkable deposits
5 7 Trade credit
58
59
60
61
62
Liabilities not identified as assets (—)
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous
63
Total identified to sectors as assets
.1
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release,
tables F.6 and E7. 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 OUTSTANDING1
Billions of dollars, end of period
1994
1993
Transaction category or sector
1991
1992
1993
1995
1994
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
11,181.5
11,720.7
12,370.7
12,965.6
12,1533
12,370.7
12,488.9
12,629.9
12,7673
12,965.6
13,128.5
By sector and instrument
2 U.S. government
3
Treasury securities
Budget agency issues and mortgages
4
2,776.4
2,757.8
18.6
3,080.3
3,061.6
18.8
3,336.5
3,309.9
26.6
3,492.3
3,465.6
26.7
3,247.3
3,222.6
24.7
3,336.5
3,309.9
26.6
3,387.7
3,361.4
26.3
3,395.4
3,368.0
27.4
3,432.6
3,404.1
28.5
3,492.3
3,465.6
26.7
3,557.9
3,531.5
26.4
5 Private
8,405.1
8,640.4
9,034.2
9,473.3
8,906.0
9,034.2
9,101.2
9,234.4
9,334.6
9,473.3
9,570.5
7
8
9
10
11
1?
n
14
15
16
By instrument
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans
1,108.6
1,086.9
3,920.0
2,780.0
304.8
755.8
79.3
797.4
686.0
98.5
707.8
1,139.7
1,154.4
4,043.9
2,959.6
293.6
710.3
80.4
803.0
672.1
107.1
720.2
1,215.2
1,229.6
4,220.6
3,149.6
289.0
700.8
81.2
866.5
677.2
117.8
707.2
1,181.1
1,251.7
4,407.2
3,345.8
290.4
688.5
82.5
984.0
751.1
139.2
759.0
1,207.4
1,212.8
4,166.6
3,098.3
288.2
699.0
81.1
824.3
665.6
123.2
706.0
1,215.2
1,229.6
4,220.6
3,149.6
289.0
700.8
81.2
866.5
677.2
117.8
707.2
1,214.6
1,238.5
4,247.4
3,185.3
288.8
692.1
81.3
863.6
686.7
129.9
720.4
1,218.0
1,247.4
4,300.5
3,236.9
289.9
691.8
81.8
895.3
706.2
135.7
731.3
1,192.9
1,251.0
4,356.8
3,293.2
291.5
689.9
82.3
931.8
724.5
138.7
738.9
1,181.1
1,251.7
4,407.2
3,345.8
290.4
688.5
82.5
984.0
751.1
139.2
759.0
1,163.4
1,262.0
4,447.0
3,379.4
291.1
693.8
82.7
983.8
783.9
149.8
780.7
17
18
19
70
7.1
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
3,784.7
3,709.3
135.0
1,116.4
2,458.0
911.1
4,002.3
3,710.5
136.0
1,074.1
2,500.4
927.5
4,294.3
3,749.3
138.3
1,050.3
2,560.7
990.6
4,645.6
3,885.4
140.7
1,063.8
2,680.8
942.3
4,190.9
3,729.7
138.7
1,053.4
2,537.5
985.4
4,294.3
3,749.3
138.3
1,050.3
2,560.7
990.6
4,335.5
3,779.7
136.6
1,050.9
2,592.2
986.0
4,426.7
3,823.1
141.3
1,054.6
2,627.2
984.6
4,527.4
3,849.5
142.8
1,058.4
2,648.3
957.8
4,645.6
3,885.4
140.7
1,063.8
2,680.8
942.3
4,686.6
3,958.7
138.2
1,080.2
2,740.3
925.3
?3 Foreign credit market debt held in
United States
298.8
310.9
357.8
348.1
351.3
357.8
340.3
339.2
339.8
348.1
361.1
Bonds
Bank loans n.e.c
Commercial paper
U.S. government and other loans
129.5
21.6
81.8
65.9
143.9
23.9
77.7
65.3
203.4
24.6
68.7
61.1
220.9
26.1
41.4
59.6
193.0
26.2
71.7
60.3
203.4
24.6
68.7
61.1
210.6
26.2
43.3
60.3
212.9
25.1
42.0
59.2
215.1
26.3
39.9
58.6
220.9
26.1
41.4
59.6
223.7
28.2
50.9
58.3
11,480.3
12,031.6
12,728.5
13,313.7
12,504.5
12,728.5
12,8293
12,969.0
13,107.1
13313.7
13,489.5
74
?5
76
27
7.8 Total credit market debt owed by nonfinancial
sectors, domestic and foreign
Financial sectors
79 Total credit market debt owed by
financial sectors
TO
31
32
33
34
35
36
37
38
39
By instrument
U.S. government-related
Government-sponsored enterprises 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 Government-sponsored enterprises
41 Federally related mortgage pools
4? Private financial sectors
43 Commercial banks
Bank holding companies
44
Funding coiporations
45
46
Savings institutions
Credit unions
47
48 Life insurance companies
49
Finance companies
Mortgage companies
50
51
Real estate investment trusts (REITs)
52 Issuers of asset-backed securities (ABSs)
2,752.1
3,004.7
3,300.2
3,757.3
3,204.7
3300.2
3,425.7
3323.9
3,622.8
3,7573
3,818.4
1,564.2
402.9
1,156.5
4.8
1,187.9
640.0
4.8
78.4
385.7
79.1
1,720.0
443.1
1,272.0
4.8
1,284.8
724.8
5.4
80.5
394.3
79.9
1,884.1
523.7
1,355.6
4.8
1,416.1
844.0
8.9
66.5
393.5
103.1
2,168.4
700.6
1,467.8
.0
1,588.9
947.2
18.7
54.3
442.8
125.9
1,845.2
510.3
1,330.1
4.8
1,359.5
810.5
7.6
69.2
373.2
98.9
1,884.1
523.7
1,355.6
4.8
1,416.1
844.0
8.9
66.5
393.5
103.1
1,961.5
563.7
1,397.8
.0
1,464.3
881.2
11.4
62.4
408.8
100.4
2,030.5
600.3
1,430.1
.0
1,493.4
904.8
14.5
55.3
410.3
108.5
2,089.8
638.3
1,451.5
.0
1,532.9
926.3
17.5
52.4
420.5
116.2
2,168.4
700.6
1,467.8
.0
1,588.9
947.2
18.7
54.3
442.8
125.9
2,192.7
716.3
1,476.4
.0
1,625.7
976.6
20.0
55.5
453.6
120.0
407.7
1,156.5
1,187.9
65.0
112.3
139.1
94.6
.0
.0
393.0
22.2
13.6
329.1
447.9
1,272.0
1,284.8
73.8
114.6
161.6
87.8
.0
.0
389.4
30.2
13.9
391.7
528.5
1,355.6
1,416.1
79.5
123.4
169.9
99.0
.2
.2
390.5
29.2
17.4
473.2
700.6
1,467.8
1,588.9
89.5
133.6
199.3
111.7
.5
.6
443.0
17.8
31.1
527.6
515.1
1,330.1
1,359.5
77.9
120.3
166.3
96.8
.2
.1
380.0
31.8
15.8
443.8
528.5
1,355.6
1,416.1
79.5
123.4
169.9
99.0
.2
.2
390.5
29.2
17.4
473.2
563.7
1,397.8
1,464.3
78.4
124.2
190.7
97.6
.3
.3
401.9
23.8
21.0
494.9
600.3
1,430.1
1,493.4
82.1
126.8
191.5
99.0
.3
.3
414.2
19.3
24.8
504.0
638.3
1,451.5
1,532.9
87.5
129.6
200.6
102.7
.4
.3
420.9
17.5
29.5
514.5
700.6
1,467.8
1,588.9
89.5
133.6
199.3
111.7
.5
.6
443.0
17.8
31.1
527.6
716.3
1,476.4
1,625.7
90.4
136.0
218.7
106.3
.4
.6
456.4
18.3
32.8
539.0
All sectors
53 Total credit market debt, domestic and foreign....
54
55
56
57
58
59
60
61
U.S. government securities
Tax-exempt securities
Corporate and foreign bonds
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
14,2323
15,036.3
16,028.7
17,071.0
15,709.2
16,028.7
16,255.0
16,492.9
16,729.9
17,071.0
17307.9
4,335.7
1,108.6
1,856.5
3,924.8
797.4
785.9
565.9
857.5
4,795.5
1,139.7
2,023.1
4,049.3
803.0
776.6
579.0
870.2
5,215.8
1,215.2
2,277.0
4,229.6
866.5
768.4
580.0
876.2
5,660.7
1,181.1
2,419.8
4,425.9
984.0
831.5
623.5
944.5
5,087.7
1,207.4
2,216.3
4,174.2
824.3
761.0
568.2
870.1
5,215.8
1,215.2
2,277.0
4,229.6
866.5
768.4
580.0
876.2
5,349.2
1,214.6
2,330.3
4,258.8
863.6
775.4
582.0
881.1
5,425.9
1,218.0
2,365.2
4,315.0
895.3
786.6
587.9
899.0
5,522.5
1,192.9
2,392.4
4,374.4
931.8
803.2
599.2
913.7
5,660.7
1,181.1
2,419.8
4,425.9
984.0
831.5
623.5
944.5
5,750.6
1,163.4
2,462.2
4,467.0
983.8
867.7
654.2
959.0
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
1.60
DomesticNonfinancialStatistics • September 1995
SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1
Billions of dollars except as noted, end of period
1993
Transaction category or sector
1991
1992
1993
1994
1995
1994
Q3
Q4
Ql
Q2
Q3
Q4
Ql
CREDIT MARKET D E B T OUTSTANDING 2
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
Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Government-sponsored enterprises
Federally related mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank holding companies
Banks in U.S. affiliated areas
Funding corporations
Thrift institutions
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds
Finance companies
Mortgage companies
Mutual funds
Closed-end funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Asset-backed securities issuers (ABSs)
Bank personal trusts
14,232.3
15,036.3
16,028.7
17,071.0
15,709.2
16,028.7
16,255.0
16,492.9
16,729.9
17,071.0
17,307.9
2,240.2
1,446.5
44.1
196.2
553.3
246.9
958.1
10,787.2
390.7
1,156.5
272.5
2,853.3
2,502.5
319.2
11.9
19.7
51.5
1,192.6
1,199.6
376.6
693.0
479.9
484.9
60.3
450.5
50.3
402.7
7.0
124.0
317.8
223.5
2,318.0
1,523.1
42.9
225.4
526.5
235.0
1,052.7
11,430.6
459.7
1,272.0
300.4
2,948.6
2,571.9
335.8
17.5
23.4
75.0
1,134.5
1,278.8
389.4
730.4
514.3
486.6
60.5
574.2
67.7
404.1
8.1
117.1
377.9
231.5
2,330.7
1,517.8
39.7
248.1
525.2
230.7
1,171.3
12,296.0
549.8
1,355.6
336.7
3,090.8
2,721.5
326.0
17.5
25.8
93.1
1,132.7
1,383.9
422.7
770.6
542.6
482.8
60.4
743.8
77.9
418.7
8.6
126.3
458.0
240.9
2,571.8
1,873.0
37.7
273.5
387.5
206.6
1,304.6
12,988.0
673.2
1,467.8
368.2
3,252.8
2,869.6
337.1
18.4
27.8
106.9
1,167.9
1,445.0
443.8
728.2
603.3
551.0
37.5
751.4
81.4
447.1
13.3
92.3
509.0
248.0
2,276.8
1,451.6
40.6
234.7
549.9
218.8
1,118.6
12,095.0
531.8
1,330.1
324.2
3,036.4
2,670.2
322.3
18.7
25.3
82.4
1,136.5
1,372.1
414.6
785.6
533.4
474.0
63.8
709.0
76.0
400.6
8.6
147.1
430.2
238.7
2,330.7
1,517.8
39.7
248.1
525.2
230.7
1,171.3
12,296.0
549.8
1,355.6
336.7
3,090.8
2,721.5
326.0
17.5
25.8
93.1
1,132.7
1,383.9
422.7
770.6
542.6
482.8
60.4
743.8
77.9
418.7
8.6
126.3
458.0
240.9
2,378.0
1,619.7
38.8
244.0
475.5
219.0
1,203.0
12,455.0
572.0
1,397.8
341.5
3,120.2
2,743.8
331.8
18.2
26.4
97.9
1,134.2
1,404.2
429.6
746.2
560.8
494.5
49.5
759.2
80.0
422.0
10.3
112.4
479.5
243.2
2,448.6
1,710.0
38.4
251.1
449.2
215.4
1,218.6
12,610.3
597.9
1,430.1
351.6
3,156.2
2,780.3
330.8
18.3
26.8
106.3
1,146.1
1,409.1
434.8
738.5
578.1
511.3
40.4
761.5
80.8
421.4
11.9
99.3
489.2
245.7
2,475.3
1,760.2
37.9
255.0
422.3
212.6
1,252.5
12,789.4
629.4
1,451.5
356.8
3,204.2
2,822.4
335.5
19.0
27.3
112.6
1,159.9
1,430.3
438.8
734.1
584.7
524.1
37.0
767.5
81.1
423.4
13.3
94.5
498.5
247.7
2,571.8
1,873.0
37.7
273.5
387.5
206.6
1,304.6
12,988.0
673.2
1,467.8
368.2
3,252.8
2,869.6
337.1
18.4
27.8
106.9
1,167.9
1,445.0
443.8
728.2
603.3
551.0
37.5
751.4
81.4
447.1
13.3
92.3
509.0
248.0
2,533.0
1,872.4
37.7
266.7
356.2
201.7
1,370.7
13,202.5
675.3
1,476.4
367.1
3,320.5
2,906.4
367.4
18.5
28.2
109.7
1,175.1
1,470.4
447.0
752.6
620.2
568.5
38.5
750.1
81.6
468.1
13.9
100.4
518.8
248.4
14,232.3
15,036.3
16,028.7
17,071.0
15,709.2
16,028.7
16,255.0
16,492.9
16,729.9
17,071.0
17,307.9
55.4
10.0
16.3
405.7
4,138.3
96.4
5,044.8
1,020.6
2,350.7
488.4
539.6
355.8
289.6
813.9
188.9
935.9
71.2
608.3
2,992.2
51.8
8.0
16.5
433.0
4,516.5
132.8
5,059.1
1,134.4
2,293.5
415.2
543.6
392.3
280.1
1,042.1
217.3
977.4
79.6
629.6
3,160.2
53.4
8.0
17.0
468.2
4,974.7
177.7
5,155.5
1,251.7
2,223.2
391.7
562.7
457.8
268.4
1,446.3
279.3
1,026.4
84.2
660.9
3,403.0
53.2
8.0
17.6
488.4
5,009.5
272.6
5,283.8
1,241.6
2,182.7
410.7
608.2
542.1
298.5
1,563.9
277.0
1,118.6
87.6
670.0
3,717.2
55.6
8.0
16.8
459.4
4,887.8
166.9
5,088.5
1,181.9
2,236.6
389.4
547.9
472.5
260.2
1,351.7
254.5
1,009.6
82.8
651.2
3,314.6
53.4
8.0
17.0
468.2
4,974.7
177.7
5,155.5
1,251.7
2,223.2
391.7
562.7
457.8
268.4
1,446.3
279.3
1,026.4
84.2
660.9
3,403.0
56.4
8.0
17.1
473.2
4,894.5
205.4
5,163.7
1,220.5
2,233.8
382.6
579.7
474.9
272.4
1,484.8
282.8
1,023.6
89.1
655.2
3,515.9
54.9
8.0
17.3
475.2
4,893.5
223.9
5,186.2
1,229.7
2,214.1
379.0
573.9
512.9
276.6
1,507.8
278.0
1,047.9
82.3
650.1
3,573.5
55.5
8.0
17.5
481.2
5,006.5
244.6
5,211.9
1,204.9
2,198.7
402.2
583.5
540.2
282.4
1,588.6
263.2
1,084.7
86.1
671.5
3,668.4
53.2
8.0
17.6
488.4
5,009.5
272.6
5,283.8
1,241.6
2,182.7
410.7
608.2
542.1
298.5
1,563.9
277.0
1,118.6
87.6
670.0
3,717.2
64.1
8.0
17.8
494.7
5,228.1
267.5
5,361.2
1,193.6
2,206.3
435.0
632.9
593.6
299.7
1,656.4
264.2
1,136.2
93.4
707.2
3,714.7
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
33 Total credit market debt
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Other liabilities
Official foreign exchange
Special drawing rights certificates
Treasury currency
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
Investment in bank personal trusts
Miscellaneous
29,609.6
31,360.1
33,783.1
35,638.3
33,056.5
33,783.1
34,124.7
34,491.7
35,117.5
35,6383
36,321.3
Financial assets not included in liabilities (+)
54 Gold and special drawing rights
55 Corporate equities
56 Household equity in noncorporate business
22.3
4,863.6
2,444.4
19.6
5,462.9
2,411.5
20.1
6,186.5
2,420.5
21.1
6,048.8
2,510.7
20.3
5,941.7
2,446.1
20.1
6,186.5
2,420.5
20.4
6,052.2
2,471.4
20.8
5,877.7
2,500.1
21.0
6,135.1
2,524.4
21.1
6,048.8
2,510.7
22.7
6,573.6
2,474.6
Floats not included in assets ( - )
57 U.S. government checkable deposits
58 Other checkable deposits
59 Trade credit
3.8
40.4
-129.3
6.8
42.0
-124.6
5.6
40.7
-101.7
3.4
38.0
-96.4
2.2
33.7
-130.4
5.6
40.7
-101.7
.3
36.3
-120.9
.9
38.7
-128.3
1.2
30.6
-121.4
3.4
38.0
-96.4
4.2
32.3
-108.5
-4.8
-4.2
9.2
17.8
-330.7
-4.9
-9.3
38.1
25.2
-398.4
-5.1
-4.7
120.6
26.2
-484.8
-5.4
-6.5
170.8
24.6
-469.6
-5.1
-7.8
132.6
24.3
-480.0
-5.1
-4.7
120.6
26.2
-484.8
-5.2
-7.7
135.7
15.4
-453.1
-5.2
-7.4
162.7
21.6
-442.7
-5.3
-3.5
189.4
21.7
-449.9
-5.4
-6.5
170.8
24.6
-469.6
-5.4
-2.8
201.6
6.4
-559.7
37,337.6
39,679.1
42,813.4
44,560.0
41,895.2
42,813.4
43,068.0
43,250.0
44,135.2
44,560.0
45,824.1
53 Total UabiUties
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.1 (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
NONFINANCIAL BUSINESS ACTIVITY
A45
Selected Measures
Monthly data seasonally adjusted, and indexes 1987 = 100, except as noted
1995r
Oct.
Nov.
116.9
119.2
113.0
128.8
109.9
123.4
117.5
119.8
113.9
128.9
Apr.
1 Industrial production 1
Market groupings
2 Products, total
3
Final, total
4
Consumer goods
5
Equipment
6
Intermediate
7 Materials
Industry
118.7
118.9
121.6
114.9
132.0
110.7
126.7
117.8
120.6
113.9
131.2
109.3
126.1
115.5
130.1
110.9
126.3
119.1
121.6
115.7
130.9
111.3
126.5
84.4
85.2
85.2
115.0r
116^
108.0 r
HO.O1
113.0
114.0
104.0
111.3
95.6
95.1
96.1
116.3
150.0
145.0
126.0
150.8
145.2
112.7
97.6
96.8
98.1
117.6
153.7
148.2
128.8
154.8
149.3
113.2
98.0
97.1
98.5
118.1
153.7
148.1
127.9
154.7
149.8
113.4
98.2
97.2
98.7
118.3
154.7
149.0
128.6
155.8
150.0
113.6
98.5
97.4
98.9
118.4
156.0
150.0
129.0
156.8
150.7
113.9
98.6
97.5
99.1
156.8
150.7
131.0
157.6
149.6
114.1
98.8
97.5
99.1
119.0
157.6
150.9
130.6
158.4
150.6
114.1
98.6
97.4
99.0
119.0
157.8
151.7
129.0
157.0
150.5
148.2
125.5
149.5
125.8
149.7
126.1
149.7
126.2
150.3
126.6
150.9
126.9
151.4
126.9
151.9
127.6
110.7
113.4
109.4
119.3
102.4
114.1
115.9
118.4
113.2
126.5
108.1
121.5
112.9
119.7
80.9
83.4
83.8
97.3 r
105.l r
114.1'
106.5
94.2
95.3
94.9
110.5
135.6
131.6
118.0
137.0
126.4
108.4
94.3
94.8
94.9
112.9
141.4
136.2
120.0
142.5
134.7
140.3
123.2
144.5
124.7
106.5
109.0
105.9
113.4
98.8
109.2
121.2
110.6
124.6
groupings
119.1
121.8
115.7
131.2
110.9
126.7
122.6
123.2
8 Manufacturing
9 Capacity utilization, manufacturing (percent)'
10 Construction contracts 3
11 Nonagricultural employment, total 4
12
Goods-producing, total
13
Manufacturing, total
14
Manufacturing, production workers
15
Service-producing
16 Personal income, total
17
Wages and salary disbursements
18
Manufacturing
19
Disposable personal income
20 Retail sales 5
Prices6
21 Consumer (1982-84=100)
22 Producer finished goods (1982=100)
118.8
5. Based on data from U.S. Department of Commerce, Survey of Current Business.
6. 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 and 5, and indexes for
series mentioned in notes 3 and 6, 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. See al^> "Industrial Production Capacity and Capacity Utilization
since 1987," Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605.
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release.
For the ordering address, see die inside front cover. The latest historical revision of the
industrial production index and the capacity utilization rates was released in November
1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve
Bulletin, vol. 81 (January 1995), pp. 16-26. For a detailed description of the industrial
production index, 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 Company, 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.
2.11
83.4
LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted except as noted
1995
1994
Category
1992
1993
1994
Nov.
Dec.
Jan.
Feb.
Mar.
Apr/
May r
June
HOUSEHOLD SURVEY DATA 1
1 Civilian labor force 2
7
3
4
5
Nonagricultural industries 3
Agriculture
Unemployment
Number
Rate (percent of civilian labor force)
126,982
128,040
131,056
131,718
131,725
132,136
132,308
132,511
132,737
131,811
131,869
114,391
3,207
116,232
3,074
119,651
3,409
120,903
3,500
121,038
3,532
121,064
3,575
121,469
3,656
121,576
3,698
121,478
3,594
120,962
3,357
121,034
3,451
9,384
7.4
8,734
6.8
7,996
6.1
7,315
5.6
7,155
5.4
7,498
5.7
7,183
5.4
7,237
5.5
7,665
5.8
7,492
5.7
7,384
5.6
108,604
110,525
113,423
115,427
115,624
115,810
116,123
116,302
116,310
116,264
116,479
18,104
635
4,492
5,721
25,354
6,602
29,052
18,653
18,003
611
4,642
5,787
25,675
6,712
30,278
18,817
18,064
604
4,916
5,842
26,362
6,789
31,805
19,041
18,439
592
5,144
6,092
26,913
6,937
32,035
19,275
18,472
592
5,166
6,121
26,988
6,931
32,135
19,219
18,502
590
5,201
6,129
27,011
6,927
32,228
19,222
18,523
588
5,213
6,156
27,069
6,929
32,404
19,241
18,525
589
5,256
6,175
27,047
6,938
32,524
19,248
18,506
583
5,242
6,184
27,062
6,924
32,548
19,261
18,461
582
5,191
6,177
27,046
6,926
32,632
19,249
18,421
583
5,233
6,195
27,083
6,934
32,746
19,284
ESTABLISHMENT SURVEY D A T A
6 Nonagricultural payroll employment 4
7
8
9
10
11
1?
13
14
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Government
1. Beginning January 1994, reflects redesign of current population survey and population controls from the 1990 census.
2. 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.
3. Includes self-employed, unpaid family, and domestic service workers.
4. 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, selfemployed persons, household and unpaid family workers, and members of the armed
forces. Data are adjusted to the March 1992 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
2.12
Domestic Nonfinancial Statistics • September 1995
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1
Seasonally adjusted
1994
Q3
1995
Q4
Qlr
1994
Q2
Output (1987=100)
Q3
1994
1995
Q4
Q1
Q2
Capacity (percent of 1987 output)
1995
Q4
Q3
Ql
Q2
Capacity utilization rate (percent) 2
1 Total industry
118.8
120.5
122.0
121.0
140.9
141.9
143.1
144.5
84.3
84.9
85.2
83.8
2 Manufacturing
120.5
122.7
124.3
123.1
144.2
145.3
146.6
148.2
83.6
84.5
84.7
83.1
Primary processing 3
Advanced processing 4
115.9
122.7
118.4
124.8
119.3
126.6
117.2
125.8
131.6
150.0
132.3
151.3
133.2
152.9
134.2
154.7
88.1
81.8
89.5
82.5
89.5 r
82.8
87.4
81.3
5
6
7
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment . . .
126.5
106.6
114.1
115.8
111.4
162.6
163.5
135.0
129.4
107.9
119.4
123.3
113.9
167.5
169.4
141.5
131.6
107.6
120.4
125.4
113.7
171.5
174.0
145.9
130.3
104.1
117.3
121.8
111.3
173.0
177.3
135.8
151.6
116.0
125.2
128.4
120.5
181.6
184.1
160.3
153.1
116.5
125.4
128.8
120.5
184.1
188.5
162.2
154.9
117.1
126.7
130.9
120.9
187.8
193.8
164.2
157.1
118.0
127.5
131.7
121.6
192.6
199.9
166.5
83.4
91.9
91.1
90.2
92.4
89.6
88.8
84.2
84.6
92.7
95.2
95.8
94.5
91.0
89.9
87.2
84.9
91.9
95.0
95.9
94. l r
91.3
89.8
88.8
83.0
88.3
92.0
92.5
91.5
89.8
88.7
81.5
82.1
80.8
81.5
81.6
129.4
129.1
128.8
128.5
63.5
62.6
63.3 r
63.5
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
113.8
108.9
118.5
124.4
126.9
104.9
115.3
111.6
120.6
126.0
130.2
106.5
116.1
111.8
120.3
129.7
134.3
107.8
115.0
109.3
118.8
128.1
136.3
122.0
127.7
154.7
131.6
115.1
137.1
122.7
128.4
156.2
132.6
115.1
138.0
123.5
129.3
157.6
115.3
84.0
89.7
93.2
81.1
97.0
91.1
84.6
91.4
94.4
81.4
98.9
92.5
84.7
91.l r
93.6
83.1
101.3
93.7
83.3
88.5
91.9
81.3
106.4
135.5
121.4
127.1
153.3
130.8
115.2
100.1
118.1
118.2
99.2
116.3
117.3
100.3
118.2
118.5
100.9
118.5
118.7
111.5
135.4
133.1
111.4
135.8
133.6
111.4
136.3
134.1
111.4
136.8
134.7
89.8
87.2
88.8
89.0
85.6
87.8
90.0 r
86.8
88.4
90.6
86.7
88.1
1973
1975
Previous cycle 5
High
Low
High
3
4
20 Mining
21 Utilities
22
Electric
Low
Latest cycle 6
High
Low
1994
June
92.3
1995
Jan.
Feb.
Mar. r
Apr.r
May
June p
Capacity utilization rate (percent' 2
1 Total industry
89.2
72.$
87.3
71.8
84.9
78.0
84.1
85.5
85.3
84.9
84.1
83.7
83.5
2 Manufacturing
88.9
70.8
87.3
70.0
85.2
76.6
83.2
85.2
84.7
84.4
83.4
83.0
82.7
92.2
87.5
68.9
72.0
89.7
86.3
66.8
71.4
89.0
83.5
77.9
76.2
87.5
81.5
90.2
83.2
89.4
82.8
89.0
82.5
88.0
81.6
87.4
81.2
86.8
81.2
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and
equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment
88.8
90.1
100.6
105.8
92.9
68.5
62.2
66.2
66.6
61.3
86.9
87.6
102.4
110.4
90.5
65.0
60.9
46.8
38.3
62.2
84.0
93.3
92.8
95.7
88.7
73.7
76.3
74.0
72.1
75.0
82.7
91.8
90.9
92.3
89.3
85.3
94.3
95.6
96.5
94.6
84.9
91.7
94.5
94.9
94.2
84.6
89.6
94.9
96.2
93.4
83.4
88.9
92.6
93.3
91.9
82.8
88.2
91.9
92.5
91.2
82.7
87.7
91.6
91.8
91.5
96.4
87.8
93.4
74.5
63.8
51.1
92.1
89.4
93.0
64.9
71.1
44.5
84.0
84.9
85.1
72.5
76.6
57.6
88.4
87.9
83.1
92.0
90.1
89.4
91.1
89.8
89.3
90.8
89.5
87.8
90.4
88.7
83.7
89.7
88.7
80.6
89.5
88.8
80.3
77.0
66.6
81.1
66.9
88.4
79.4
64.7
62.4
63.4
64.0
63.7
63.6
63.3
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
87.9
92.0
96.9
87.9
102.0
96.7
71.8
60.4
69.0
69.9
50.6
81.1
87.0
91.7
94.2
85.1
90.9
89.5
76.9
73.8
82.0
70.1
63.4
68.2
86.7
92.1
94.8
85.9
97.0
88.5
80.4
78.9
86.5
78.9
74.8
83.7
84.0
89.8
92.0
81.7
97.0
90.7
85.1
92.5
93.5
83.8
105.6
93.4
84.6
90.4
93.7
83.0
100.6
93.5
84.3
90.4
93.7
82.5
97.5
94.2
83.6
90.2
93.1
81.3
97.1
93.0
83.4
87.9
93.2
81.1
83.0
87.5
89.4
81.4
91.9
92.0
94.4
95.6
99.0
88.4
82.5
82.7
96.6
88.3
88.3
80.6
76.2
78.7
86.5
92.6
94.8
86.0
83.2
86.5
90.3
89.6
91.4
89.7
85.6
87.5
90.3
87.5
88.7
89.9
87.1
88.8
90.4
86.7
88.1
90.2
87.1
88.6
91.1
86.2
87.6
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Primary processing 3
Advanced processing 4
20 Mining
21 Utilities
22
Electric
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release.
For the ordering address, see the inside front cover. The latest historical revision of the
industrial production index and the capacity utilization rates was released in November
1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve
Bulletin, vol. 81 (January 1995), pp. 16-26. For a detailed description of the industrial
production index, see "Industrial Production: 1989 Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally
adjusted index of industrial production to the corresponding index of capacity.
3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic
materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and
glass; primary metals; and fabricated metals.
4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing and publishing; chemical products such as drugs and toiletries; agricultural chemicals;
leather and products; machinery; transportation equipment; instruments; and miscellaneous manufactures.
5. Monthly highs, 1978-80; monthly lows, 1982.
6. Monthly highs, 1988-89; monthly lows, 1990-91.
Selected Measures
2.13
INDUSTRIAL PRODUCTION
A47
Indexes and Gross Value1
Monthly data seasonally adjusted
portion
1995
1994
1992
Group
1994
avg.
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar/
Apr.r
May
June p
Index (1987 = 100)
MAJOR MARKETS
100.0
118.1
118.0
118.2
119.1
119.0
119.5
120J
121.7
122.0
122.1
122.0
121.1
120.9
121.0
60.9
46.6
28.5
5.5
2.5
1.6
.9
.7
.9
3.0
115.9
118.4
113.2
119.4
125.5
125.4
94.9
180.7
123.2
114.1
115.9
118.4
113.5
118.0
121.0
118.5
89.6
170.7
123.8
115.4
116.2
118.5
113.3
118.0
119.5
115.0
86.5
166.6
126.6
116.7
116.7
119.2
113.8
120.7
124.9
126.0
91.7
189.0
120.0
117.1
116.4
118.9
113.0
119.1
123.8
122.5
90.2
181.5
123.9
115.2
116.9
119.2
113.0
119.4
124.5
122.3
92.9
175.5
126.6
115.2
117.5
119.8
113.9
120.5
127.1
126.5
94.0
185.8
125.7
115.0
118.7
121.2
115.5
123.4
131.1
131.4
100.5
187.3
127.8
116.8
119.1
121.6
115.7
124.5
131.7
132.7
103.6
184.6
126.9
118.3
119.1
121.8
115.7
123.4
132.3
133.5
103.6
187.1
127.0
115.9
118.9
121.6
114.9
121.4
129.7
130.8
103.1
180.0
124.8
114.3
117.8
120.6
113.9
119.2
125.9
124.6
93.9
180.2
126.1
113.5
117.7
120.5
113.7
116.4
120.7
118.5
87.5
175.3
122.9
112.7
117.7
120.7
113.9
116.7
121.1
118.8
87.4
176.2
123.5
113.1
.7
.8
1.5
23.0
10.3
2.4
4.5
2.9
2.9
.9
2.1
126.0
105.0
113.8
111.8
110.5
95.9
129.7
104.7
113.9
106.7
116.8
132.8
103.6
114.2
112.5
110.5
96.3
131.4
105.8
115.5
106.5
119.3
129.7
108.4
115.3
112.2
110.6
96.5
131.1
105.2
114.3
105.8
117.8
135.1
106.9
114.6
112.2
111.2
95.9
129.8
105.9
113.1
105.8
116.1
130.2
104.1
114.6
111.7
111.9
95.5
127.5
105.2
110.5
107.4
111.8
124.9
107.4
114.9
111.5
112.2
96.2
127.2
103.6
109.8
103.9
112.2
126.9
105.9
114.5
112.4
112.4
96.2
130.5
104.6
110.6
109.8
110.7
131.5
108.0
114.9
113.7
114.3
96.8
134.0
104.3
109.6
107.4
110.3
132.1
110.2
116.5
113.6
113.1
96.1
137.0
103.4
110.4
107.4
111.6
125.8
107.9
115.8
113.9
112.9
94.7
136.6
104.1
114.1
109.1
116.0
122.7
106.5
114.7
113.5
112.9
94.6
135.9
102.9
113.3
110.6
114.3
120.7
106.9
113.7
112.7
112.3
93.6
133.7
104.2
111.9
109.9
112.6
124.2
104.0
112.1
113.2
113.2
93.3
134.0
104.2
112.0
108.6
113.3
125.5
104.0
112.4
113.3
114.0
92.3
135.1
102.9
111.3
108.6
112.3
Equipment
Business equipment
Information processing and related
Computer and office equipment
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes
18.1
14.0
5.7
1.5
4.0
2.6
1.2
1.7
3.4
.5
.2
126.5
146.7
176.4
284.2
120.9
137.9
148.0
129.4
71.0
90.8
137.3
125.8
145.5
173.7
276.5
120.6
136.1
141.7
130.5
71.3
94.2
137.8
126.4
146.9
177.1
282.6
122.1
132.6
138.2
132.6
69.9
93.7
133.3
127.5
148.9
179.7
288.9
122.3
137.9
149.4
133.5
69.2
89.6
134.5
128.0
149.5
181.1
295.8
123.0
136.8
147.7
133.3
68.8
93.9
138.4
128.8
150.9
183.2
300.5
124.4
137.1
149.2
134.3
68.7
88.3
142.0
128.9
151.0
184.2
305.7
124.1
137.5
151.6
133.1
69.0
86.0
143.1
130.1
152.6
188.3
311.9
124.1
137.8
152.6
133.1
68.7
86.0
153.6
130.9
153.7
188.7
318.0
125.9
139.7
157.2
133.5
68.6
86.7
153.6
131.2
154.5
189.1
325.3
126.1
143.4
157.7
132.9
67.7
89.1
147.4
132.0
155.9
192.3
331.8
126.2
144.7
154.9
132.6
67.5
85.7
148.3
131.2
154.8
193.7
340.0
124.8
140.1
146.7
130.3
66.7
89.2
147.2
131.1
154.5
194.2
346.1
125.0
137.0
142.3
130.3
66.5
91.9
150.4
131.2
155.2
196.1
354.2
125.5
136.8
142.4
129.2
66.4
86.4
36
Intermediate products, total
Construction supplies
Business supplies
14.3
5.3
9.0
108.1
106.8
109.1
108.5
106.4
110.1
109.1
107.9
110.0
109.2
108.2
109.9
108.6
108.6
108.7
109.9
109.7
110.1
110.6
109.8
111.3
110.9
111.6
110.7
111.3
112.2
110.9
110.9
111.0
111.0
110.7
110.5
110.9
109.3
109.0
109.7
109.3
108.1
110.3
108.6
107.9
109.2
37
38
39
40
41
4?
43
44
45
46
47
48
49
50
Durable goods materials
Durable consumer parts
Equipment parts
Other
Basic metal materials
Nondurable goods materials
Textile materials
Paper materials
Chemical materials
Other
Energy materials
Primary energy
Converted fuel materials
39.1
20.6
3.9
7.5
9.1
3.0
8.9
1.1
1.8
4.0
2.0
9.6
6.3
3.3
121.5
131.2
132.2
143.1
121.3
119.7
118.4
105.3
118.7
123.2
116.9
105.2
100.3
114.9
121.2
130.0
129.2
142.1
120.8
119.6
118.1
104.8
118.4
122.9
116.5
106.7
100.2
119.9
121.4
130.9
130.4
143.8
121.1
118.8
118.6
104.8
117.5
123.4
118.6
105.2
100.3
114.9
122.8
132.6
133.2
145.2
122.3
119.3
120.3
105.7
122.5
124.8
118.1
106.1
100.9
116.3
122.9
133.3
133.1
146.7
122.8
121.1
119.8
105.9
121.5
124.0
118.2
105.6
100.8
115.1
123.4
134.2
133.8
149.0
122.7
121.3
120.3
106.9
120.5
124.6
119.5
105.2
100.3
115.1
124.6
136.0
135.8
150.7
124.6
123.2
121.5
110.3
122.1
125.9
119.3
104.9
100.7
113.4
126.3
138.6
139.7
152.3
127.3
126.0
122.8
108.7
121.3
127.5
123.4
105.3
101.7
112.3
126.5
139.1
139.1
153.6
127.6
125.6
122.3
109.8
120.8
128.6
119.1
105.6
101.7
113.4
126.7
139.2
139.1
155.1
126.7
124.8
121.8
108.5
122.1
128.3
116.8
106.6
102.0
115.6
126.7
139.2
138.3
156.2
126.3
125.2
121.7
108.8
124.1
127.6
116.0
106.6
102.5
114.7
126.1
138.4
134.7
157.5
125.2
123.7
121.0
108.1
122.5
126.9
115.8
106.7
102.4
115.2
125.9
138.1
132.4
158.8
124.5
123.4
121.0
105.2
123.9
127.1
115.8
106.4
101.9
115.4
126.2
138.6
132.3
160.5
124.4
123.5
120.1
105.6
119.0
127.8
114.9
107.3
103.5
114.6
97.2
95.2
117.6
117.1
117.7
117.3
118.1
117.7
118.7
118.2
118.6
U8.0
119.1
118.5
119.8
119.2
121.1
120.5
121.4
120.8
121.4
120.8
121.4
120.8
120.7
120.2
120.7
120.3
120.8
120.3
98.3
26.9
25.6
115.4
112.4
113.1
115.4
113.2
113.2
115.5
113.2
113.2
116.4
113.0
113.8
116.1
112.4
113.3
116.6
112.4
113.3
117.4
113.1
114.2
118.7
114.5
116.2
118.9
114.6
116.3
118.9
114.5
115.9
118.7
113.9
115.1
117.8
113.2
114.1
117.6
113.4
113.9
117.6
113.6
114.2
12.8
146.5
145.7
147.7
148.8
149.5
151.0
150.9
152.5
153.3
154.1
155.9
155.5
155.6
156.3
12.5
29.5
130.7
127.3
130.0
126.4
131.1
127.2
132.7
128.8
132.7
129.2
133.8
129.9
133.6
131.6
134.7
133.8
135.4
134.0
135.6
133.9
136.6
133.9
134.8
133.1
134.1
132.9
134.1
133.0
1 Total index
7
4
5
6
7
8
9
10
11
1?
N
14
15
16
17
18
19
70
71
22
73
74
75
76
77
78
?9
30
31
37
33
34
Final products
Consumer goods, total
Durable consumer goods
Automotive products
Autos, consumer
Trucks, consumer
Auto parts and allied goods
Other
Appliances televisions and air
conditioners
Carpeting and furniture
Miscellaneous home goods
Nondurable consumer goods
Clothing
Chemical products
Paper products
Energy
Residential utilities
SPECIAL AGGREGATES
51 Total excluding autos and trucks
52 Total excluding motor vehicles and parts
53 Total excluding computer and office
equipment
54 Consumer goods excluding autos and trucks .
Consumer
goods excluding energy
55
56 Business equipment excluding autos and
trucks
57 Business equipment excluding computer and
office equipment
58 Materials excluding energy
A48
2.13
Domestic Nonfinancial Statistics • September 1995
Indexes and Gross Value1—Continued
INDUSTRIAL PRODUCTION
1994
1992
Group
SIC 2
code
proportion
1995
1994
avg.
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar. r
Apr/
May
June p
Index (1987 = 100)
MAJOR INDUSTRIES
5 9 Tbtal index
100.0
118.1
118.0
118.2
119.1
119.0
119.5
120.3
121.7
122.0
122.1
122.0
121.1
120.9
121.0
85.5
26.5
59.0
119.7
115.3
121.8
119.3
114.7
121.5
119.8
115.3
121.9
120.9
116.3
123.1
120.9
116.2
123.1
121.5
116.6
123.8
122.6
118.4
124.6
124.2
120.3
126.0
124.5
119.8
126.6
124.2
119.1
126.6
124.2
118.9
126.7
123.2
117.8
125.8
123.0
117.3
125.6
123.0
116.7
126.0
45.1
2.0
1.4
125.5
106.0
111.4
124.6
106.2
111.8
125.2
106.8
114.0
127.0
105.5
115.5
127.2
107.6
112.4
128.0
106.7
114.8
129.1
106.7
113.0
131.2
110.4
114.7
131.6
110.2
116.0
131.5
107.4
115.6
131.6
105.2
113.8
130.4
104.6
112.5
130.0
104.0
111.3
130.4
103.7
111.6
2.1
3.1
1.7
.1
1.4
5.0
104.9
114.5
118.3
107.9
109.3
110.8
104.4
113.7
118.2
106.3
107.6
110.2
104.3
112.7
116.1
104.7
108.0
111.7
105.8
113.5
113.0
107.0
113.6
112.4
105.8
116.0
118.2
109.9
112.7
111.6
105.4
115.9
118.8
109.0
111.8
112.2
106.9
119.1
121.9
114.2
115.2
113.3
110.1
123.0
129.3
121.9
114.8
115.3
108.7
120.9
125.9
114.6
114.2
115.3
107.4
119.8
124.3
117.2
113.8
114.9
108.1
120.5
126.1
117.2
113.1
114.6
106.0
117.8
122.5
114.3
111.5
112.9
107.7
117.1
121.8
112.4
110.9
113.4
108.1
117.1
121.2
79
80
Durable goods
"24
Lumber and products
Furniture and fixtures
25
Stone, clay, and glass
32
products
Primaty metals
33
Iron and steel
331,2
Raw steel
Nonferrous
333-6,9
34
Fabricated metal products.. .
Industrial machinery and
35
equipment
Computer and office
equipment
357
Electrical machinery
36
Transportation equipment. . .
37
371
Motor vehicles and parts .
371
Autos and light trucks .
Aerospace and
miscellaneous
transportation
equipment
372-6,9
38
Instruments
39
Miscellaneous
81
82
83
84
85
86
87
88
89
90
91
Nondurable goods
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products . . . .
Petroleum products
Rubber and plastic products .
Leather and products
6 0 Manufacturing
Primary processing
61
62
Advanced processing
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
9 2 Mining
Metal
93
94
Coal
95
Oil and gas extraction
Stone and earth minerals
96
97 Utilities
Electric
98
99
Gas
111.5
113.0
7.9
159.9
158.9
160.6
162.6
164.6
166.5
167.5
168.5
171.4
171.1
172.0
172.6
172.7
173.7
1.7
7.3
9.6
4.8
2.5
284.2
160.0
109.7
137.9
131.9
276.5
159.5
107.5
132.2
124.6
282.6
161.5
105.7
129.6
120.8
288.9
164.1
109.5
138.1
131.9
295.8
165.0
108.8
137.4
128.4
300.5
166.9
109.0
138.4
128.6
305.7
168.8
110.5
141.4
132.7
311.9
172.5
111.9
144.6
138.4
318.0
172.9
112.6
146.1
140.0
325.3
174.0
113.5
146.7
140.8
331.8
175.2
112.9
144.8
138.2
340.0
175.4
109.7
138.8
130.9
346.1
177.3
107.4
134.2
124.2
354.2
179.3
107.2
134.3
124.4
4.8
5.4
1.3
82.6
107.4
116.2
83.8
106.8
115.8
82.8
108.5
118.6
82.3
108.7
117.1
81.4
108.0
117.0
80.8
108.2
118.4
80.9
107.7
118.6
80.6
108.9
117.6
80.4
108.4
119.1
81.7
107.7
120.3
82.3
108.5
119.0
81.9
108.4
118.2
81.7
107.1
117.3
81.3
106.9
117.9
"20
21
22
23
26
27
28
29
30
31
40.5
9.4
1.6
1.8
2.2
3.6
6.8
9.9
1.4
3.5
.3
113.3
112.8
96.5
109.0
96.3
117.4
101.1
124.1
105.3
133.5
85.8
113.4
112.8
95.9
108.7
97.0
116.6
102.4
124.4
104.5
132.8
85.5
113.6
113.4
93.7
109.4
97.0
116.6
102.1
124.7
104.3
134.5
86.3
114.0
113.7
96.2
109.0
96.8
120.2
101.5
124.7
105.2
134.5
85.5
113.7
114.6
96.1
108.3
96.8
118.7
100.9
123.7
105.3
134.7
85.4
114.2
113.4
104.5
110.6
96.9
118.9
101.4
123.8
104.0
136.7
85.6
115.4
113.9
101.5
112.0
96.8
121.3
102.0
126.2
107.6
138.3
84.5
116.4
114.7
108.0
112.2
97.0
121.7
101.6
128.0
107.7
140.0
84.4
116.5
115.9
97.3
113.3
96.6
119.8
101.3
130.4
107.4
140.2
82.9
116.1
115.7
96.4
110.9
95.8
120.3
100.8
129.7
107.6
140.5
82.8
115.8
115.4
97.9
111.2
95.4
120.6
100.4
129.2
108.5
139.1
82.7
115.2
115.1
98.0
111.2
93.9
120.1
99.9
127.7
107.2
139.6
80.5
115.1
116.4
96.7
108.5
93.7
120.4
100.0
127.9
106.0
136.8
80.8
114.8
116.9
98.4
108.3
92.3
115.8
99.4
128.7
106.1
136.4
78.8
10
12
13
14
6.8
.4
1.0
4.7
.6
99.8
159.4
112.0
93.0
107.0
100.6
162.8
113.4
93.8
105.6
100.1
159.5
108.6
93.9
107.9
100.0
156.6
111.4
93.5
106.6
100.1
160.0
110.7
93.7
106.7
99.2
158.9
110.2
92.2
109.3
98.3
154.3
110.1
91.2
109.9
100.1
156.2
117.8
92.2
109.9
100.0
158.5
117.9
91.2
115.1
100.6
160.4
118.6
92.3
112.0
100.2
159.3
117.4
91.6
114.8
100.7
159.0
114.1
93.1
114.2
100.5
161.7
109.7
93.6
113.0
101.5
162.8
115.8
93.6
113.2
7.7
6.1
1.6
118.1
117.8
119.2
121.1
121.4
120.0
119.0
119.0
118.9
118.8
118.4
120.4
116.5
117.1
114.2
117.2
117.9
114.4
116.5
117.5
112.3
115.2
116.5
109.8
116.5
117.2
113.7
119.2
119.0
120.1
118.9
119.3
117.3
118.4
118.6
117.6
119.1
119.3
118.2
118.1
118.1
117.8
80.7
118.6
118.6
119.2
119.8
119.9
120.5
121.5
122.9
123.2
122.9
122.9
122.3
122.3
122.4
83.8
116.5
116.2
116.6
117.6
117.5
118.1
119.1
120.6
120.8
120.5
120.4
119.3
119.0
119.0
49L3PT
492,3PT
SPECIAL AGGREGATES
100 Manufacturing excluding motor
vehicles and parts
101 Manufacturing excluding ofiice
and computing machines . . .
Gross value (billions of 1987 dollars, annual rates)
MAJOR MARKETS
102 Products, total
1,707.0 2,006.2 2,002.5 2,002.1 2,020.2 2,015.6 2,020.4 2,037.2 2,056.5 2,063.2 2,066.5 2,065.1 2,048.2 2,045.4 2,045.7
103
104
Consumer goods
105
Equipment
106 Intermediate
1,314.6 1,576.3
982.5
866.6
448.0
593.8
392.5
429.8
1,571.1
983.0
588.1
431.4
1,569.3 1,586.6 1,584.2
979.0
987.3
981.5
599.3
602.7
590.3
433.5
431.4
432.9
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release.
For the ordering address, see die inside front cover. The latest historical revision of the
industrial production index and the capacity utilization rates was released in November
1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve
1,584.4 1,598.4 1,615.1
977.0
988.5
999.6
607.3
609.9
615.5
436.0
438.8
441.4
1,621.1
1,000.2
620.9
442.0
1,626.4 1,626.1 1,613.0 1,610.5
1,001.9
997.3
987.8
984.6
628.7
624.5
625.2
625.9
439.0
435.2
434.9
440.1
1,613.6
985.5
628.1
432.1
Bulletin, vol. 81 (January 1995), pp. 16-26. For a detailed description of the industrial
production index, see "Industrial Production: 1989 Developments and Historical Revision," Federal Reserve Bulletin, vol. 76, (April 1990), pp. 187-204.
2. Standard industrial classification.
Selected Measures
2.14
A49
HOUSING A N D CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
1995
1994
Item
1992
1993
1994
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar. r
Apr/
May
1,235
911
324
1,238
987
251
769
552
217
1,443
1,222
221
333
1,243
905
338
1,269
1,009
260
761
545
216
1,328
1,081
247
318
1,243
930
313
1,264
974
290
753
536
217
1,338
1,080
258
329
611
346
602
346
722
345
Private residential real estate activity (thousands of units except as noted)
NEW UNITS
6
7
8
9
10
11
12
13
Permits authorized
One-family
Two-family or more
Started
One-family
Two-family or more
Under constraction at end of period1
One-family
Two-family or more
Completed
One-family
Two-family or more
Mobile homes shipped
14
15
Merchant builder activity in
one-family units
Number sold
Number for sale at end of period1
16
17
Price of units sold (thousands
of dollars)2
Median
Average
18
Number sold
1
?.
3
4
1,095
911
184
1,200
1,030
170
612
473
140
1,158
964
194
210
1,199
987
213
1,288
1,126
162
680
543
137
1,193
1,040
153
254
1,372
1,068
303
1,457
1,198
259
762
558
204
1,347
1,160
187
304
1,386
1,063
323
1,463
1,174
289
770
589
181
1,337
1,144
193
295
1,426
1,066
360
1,511
1,235
276
773
590
183
1,400
1,158
242
307
1,401
1,046
355
1,451
1,164
287
779
587
192
1,376
1,169
207
314
1,358
1,025
333
1,536
1,186
350
787
587
200
1,371
1,136
235
322
1,420
1,105
315
1,545
1,250
295
791
584
207
1,388
1,173
215
347
1,293
990
303
1,366
1,055
311
792
578
214
1,436
1,209
227
361
1,282
931
351
1,319
1,048
271
797
579
218
1,302
1,080
222
335
610
265
666
293
670
338
672
322
691
328
707
330
642
335
627
338
643
342
575 R
347
121.3
144.9
126.1
147.6
130.4
153.7
133.3
154.9
129.7
157.2
132.0
153.0
129.9
155.4
135.0
159.6
127.9
147.4
160.2 R
130.0
153.4
133.0
157.8
134.9
158.1
3,520
3,800
3,946
3,910
3,870
3,820
3,690
3,760
3,610
3,420
3,620
3,390
3,550
103.6
130.8
106.5
133.1
109.6
136.4
113.0
141.2
108.9
135.8
107.5
133.0
108.7
134.7
109.1
135.6
108.1
135.3
107.0
133.4
107.9
134.5
108.1
134.2
109.0
135.4
m.tf
EXISTING UNITS ( o n e - f a m i l y )
Price of units sold (thousands
of dollars)2
1 9 Median
2 0 Average
Value of new construction (millions of dollars) 3
CONSTRUCTION
21
Total put in place
?? Private
73
Residential
7.4 Nonresidential
25
Industrial buildings
76
Commercial buildings
Other
buildings
?7
28
Public utilities and other
?9
30
11
32
33
Public
Military
Highway
Conservation and development
Other
435,022' 464,504 r 506,904 r 509,853 r 518^24' 521,296' 520,183' 521,771' 521,054' 521,429'
523,467
522,402
514,736
315,695R
187,870
127,825R
20,720
41,523
21,494
44,088R
339,161R
210,455
128,706R
19,533
42,627
23,626
42,920R
376,566R
238,884R
137,682R
21,121R
48,552R
23,912R
44,097R
379,658R
240,090'
139,568'
21,272'
48,396'
23,610'
46,290'
384,460'
242,215'
142,245'
21,935'
50,738'
23,559'
46,013'
382,946'
240,484'
142,462'
21,894'
51,195'
23,677'
45,696'
387,052'
242,447'
144,605'
25,060'
52,008'
24,147'
43,390'
386,103'
243,565'
142,538'
22,769'
53,491'
24,694'
41,584'
384,806'
241,938'
142,868'
22,715'
53,338'
24,373'
42,442'
383,652'
240,207'
143,445'
23,370'
53,687'
24,039'
42,349'
383,301
237,894
145,407
23,911
55,439
23,062
42,995
382,126
234,361
147,765
24,707
54,839
23,999
44,220
376,493
231,142
145,351
23,654
53,248
24,639
43,810
119,322R
2,502
34,899
6,021
75,900R
125,342'
2,454
3 7 , 4 3 LR
5,978R
130,337'
2,319 R
39,882R
6,228R
81,908R
130,195'
2,364'
40,137'
5,775'
81,919'
133,865'
2,361'
40,519'
7,339'
83,646'
138,349'
2,344'
40,992'
7,197'
87,816'
133,131'
2,354'
39,283'
6,331'
85,163'
135,668'
2,784'
38,464'
7,466'
86,954'
136,248'
2,925'
38,574'
6,681'
88,068'
137,777'
2,624'
38,681'
7,128'
89,344'
140,166
3,048
40,667
7,139
89,312
140,276
2,872
40,937
6,392
90,075
138,243
2,592
38,685
5,897
91,069
19,419'
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 Bureau of the Census 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.
SOURCES. Bureau of the Census estimates for all series except (1) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing Institute and
seasonally adjusted by the Census Bureau, and (2) sales and prices of existing units,
which are published by the National Association of Realtors. All back and current figures
are available from the originating agency. Permit authorizations are those reported to the
Census Bureau from 19,000 jurisdictions beginning in 1994.
A50
2.15
Domestic Nonfinancial Statistics • September 1995
C O N S U M E R A N D PRODUCER PRICES
Percentage changes based on seasonally adjusted data except as noted
Change from 12
months earlier
Change from 3 months earlier
(annual rate)
Item
1994
1994
June
Change from 1 month earlier
1995
Index
level,
June
1995 1
1995
1995
June
Sept.
Dec.
Mar.
June
Feb.
Mar.
Apr.
May
June
CONSUMER PRICES 2
(1982-84=100)
1 All items
2.5
3.0
3.6
1.9
3.2
3.2
3
.2
.4
3
.1
152.5
2 Food
3 Energy items
4 All items less food and energy
5
Commodities
Services
6
2.2
-.8
2.9
1.8
3.5
3.1
3.4
3.0
1.2
3.8
5.1
9.2
2.6
.9
3.6
3.9
.4
2.0
.3
2.6
.0
-1.1
4.1
2.6
4.8
3.6
5.4
3.0
.6
4.3
.3
-.1
.3
.1
.4
.0
-.5
.3
.1
.4
.7
.4
.4
.2
.4
.1
.5
.2
.0
.3
.1
.5
.2
-.1
.3
147.9
109.3
160.9
138.9
173.4
.1
.4
-2.7
-.4
2.4
2.1
1.2
4.1
2.1
1.8
1.9
1.9
3.2
1.7
2.1
2.2
9.2
.0
.6
-.3
2.6
-1.8
9.1
2.6
2.4
1.6
-4.3
4.1
3.5
3.0
.2
,3r
.3
.2'
.R
.0
-.2
-.5
,l r
.(f
.5
-.2
2.3
.3
.3
.0
-.6
-.2
.4
.2
-.1
-.3
-1.0
.2
.2
128.2
127.4
81.5
141.8
136.6
1.1
2.1
7.0
7.4
6.2
6.8
7.2
8.3
9.9
9.8
4.6
4.9
.8r
.8
.2'
,3r
.8
.7
.3
.2
.0
.2
126.6
135.7
.6
-7.0
7.6
-5.2
-4.8
18.4
-13.5
-19.2
20.3
-1.2
-7.6
27.9
-5.0
-3.9
20.0
.0
14.6
5.8
1.3r
-,3r
l.lr
-2.5'
-.6'
.5
-.9
5.3
1.2
-3.0
1.6
-.3
4.0
-3.4
.6
102.2
71.6
180.4
PRODUCER PRICES
(1982=100)
7 Finished goods
8
Consumer foods
9
Consumer energy
Other consumer goods
10
11
Capital equipment
Intermediate materials
12 Excluding foods and feeds
Excluding energy
13
Crude materials
14 Foods
15 Energy
16 Other
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a rentalequivalence measure of homeownership.
SOURCE. U.S. Department of Labor, 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
1995
Q1
Q2
Q3
Q4
GROSS DOMESTIC PRODUCT
1 Total
6,020.2
6,343.3
6,738.4
6,574.7
6,689.9
6,791.7
6,897.2
By source
2 Personal consumption expenditures
3
Durable goods
4
Nondurable goods
Services
5
4,136.9
492.7
1,295.5
2,348.7
4,378.2
538.0
1,339.2
2,501.0
4,628.4
591.5
1,394.3
2,642.7
4,535.0
576.2
1,368.9
2,589.9
4,586.4
580.3
1,381.4
2,624.7
4,657.5
591.5
1,406.1
2,659.9
4,734.8
617.7
1.420.7
2,696.4
788.3
785.2
561.4
171.1
390.3
223.8
882.0
866.7
616.1
173.4
442.7
250.6
1,032.9
980.7
697.6
514.8
283.0
966.6
942.5
665.4
172.7
492.7
277.1
1,034.4
967.0
683.3
181.8
501.5
283.6
1,055.1
992.5
709.1
184.6
524.5
283.4
1,075.6
1.020.8
732.8
192.0
540.7
288.0
3.0
-2.7
15.4
20.1
52.2
45.9
24.1
22.3
67.4
60.4
62.6
53.4
54.8
47.4
-30.3
638.1
668.4
-65.3
659.1
724.3
-98.2
718.7
816.9
-86.7
674.2
760.9
-97.6
704.5
802.1
-109.6
730.5
840.1
-98.9
765.5
864.4
1,125.3
449.0
676.3
1,148.4
443.6
704.7
1,175.3
437.3
738.0
1,159.8
437.8
722.0
1,166.7
435.1
731.5
1,188.8
444.3
744.5
1,185.8
431.9
753.8
6,017.2
2,292.0
968.6
1,323.4
3,227.2
498.1
6,327.9
2,390.4
1.032.4
1,358.1
3.405.5
532.0
6,686.2
2,532.4
1,413.6
3,576.2
577.6
6,550.6
2.489.1
1.098.2
1,390.9
3,503.8
557.7
6,622.5
2,493.7
1,099.4
1.394.3
3.555.4
573.4
6,729.1
2,543.6
1,125.8
1,417.8
3,603.6
581.9
6.842.4
2,603.3
1.151.8
1.451.5
3.641.9
597.3
3.0
-13.0
16.0
15.4
8.6
6.7
52.2
34.8
17.4
24.1
20.6
3.5
67.4
38.2
29.2
62.6
44.1
18.5
54.8
36.3
18.5
4,9793
5,134.5
5,344.0
5,261.1
5,314.1
5,367.0
5,433.8
4,829.5
5,131.4
5,458.4
5,308.7
5,430.7
5,494.9
5,599.4
3,591.2
2,954.8
567.3
2,387.5
636.4
307.7
328.7
3,780.4
3,100.8
583.8
2,517.0
679.6
324.3
355.3
4,004.6
3,279.0
602.8
2,676.2
725.6
344.6
381.0
3,920.0
3,208.3
595.7
2,612.6
711.7
338.5
373.2
3.979.3
3,257.2
601.9
2.655.4
722.0
343.6
378.4
4,023.7
3,293.9
604.4
2,689.6
729.7
346.0
383.7
4.095.3
3.356.4
609.0
2,747.4
738.9
350.2
388.7
418.7
374.4
44.4
441.6
404.3
37.3
473.7
434.2
39.5
471.0
423.8
47.2
471.3
431.9
39.3
467.0
437.1
29.8
485.7
444.0
41.7
6 Gross private domestic investment
7
Fixed investment
8
Nonresidential
Structures
9
10
Producers' durable equipment
11
Residential structures
12
13
Change in business inventories
Nonfarm
14 Net exports of goods and services
15
Exports
16
Imports
17 Government purchases of goods and services
18
Federal
19
State and local
...
By major type of product
20 Final sales, total
21
Goods
Durable
22
23
Nondurable
24
Services
25
Structures
26 Change in business inventories
27
Durable goods
28
Nondurable goods
182.8
1,118.8
MEMO
29 Total G D P in 1987 dollars
NATIONAL INCOME
30 Total
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
38 Proprietors' income 1
39
Business and professional 1
40
Farm 1
41 Rental income of persons 2
-5.5
24.1
27.7
15.3
34.1
32.6
29.0
42 Corporate profits
43
Profits before tax 3
44
Inventory valuation adjustment
45
Capital consumption adjustment
405.1
395.9
-6.4
15.7
485.8
462.4
-6.2
29.5
542.7
524.5
-19.5
37.7
508.2
483.5
-12.3
37.0
546.4
523.1
-14.1
37.4
556.0
538.1
-19.6
37.5
560.3
553.5
-32.1
38.8
46 Net interest
420.0
399.5
409.7
394.2
399.7
415.7
429.2
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.
A52
2.17
Domestic Nonfinancial Statistics • September 1995
PERSONAL INCOME AND SAVING
B i l l i o n s of c u r r e n t dollars e x c e p t as n o t e d ; q u a r t e r l y d a t a at s e a s o n a l l y a d j u s t e d a n n u a l rates
1995
1994
1992
1993
1994
Ql
Q2
Q3
Qlr
Q4
PERSONAL INCOME AND SAVING
1 Total personal income
5,1543
5375.1
5,701.7
5,555.8
5,659.9
5,734.5
5,856.6
5,962.0
2 Wage and salary disbursements
3
Commodity-producing industries
4
Manufacturing
5
Distributive industries
6
Service industries
7
Government and government enterprises
2,974.8
757.6
578.3
682.3
967.6
567.3
3,080.8
773.8
588.4
701.9
1,021.4
583.8
3,279.0
818.2
617.5
748.5
1,109.5
602.8
3,208.3
801.9
609.4
728.6
1,082.0
595.7
3,257.2
811.6
612.8
742.5
1,101.2
601.9
3,293.9
821.8
618.3
753.5
1,114.3
604.4
3.356.4
837.3
629.5
769.6
1.140.5
609.0
3,403.4
848.5
638.1
776.8
1,160.9
617.2
328.7
418.7
374.4
44.4
-5.5
161.0
665.2
860.2
414.0
355.3
441.6
404.3
37.3
24.1
181.3
637.9
915.4
444.4
381.0
473.7
434.2
39.5
27.7
194.3
664.0
963.4
473.5
373.2
471.0
423.8
47.2
15.3
185.7
631.1
947.4
463.8
378.4
471.3
431.9
39.3
34.1
191.7
649.4
957.6
470.7
383.7
467.0
437.1
29.8
32.6
196.9
674.2
969.0
476.5
388.7
485.7
444.0
41.7
29.0
202.7
701.1
979.7
483.1
399.6
493.6
449.2
44.4
25.4
205.5
723.6
1,004.8
496.7
8
9
10
11
12
13
14
15
16
17
Other labor income
Proprietors' income 1
Business and professional 1
Farm 1
Rental income of persons
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
248.7
261.3
281.4
276.3
279.9
282.9
286.6
293.8
5,154.3
5,375.1
5,701.7
5,555.8
5,659.9
5,734.5
5,856.6
5,962.0
648.6
686.4
742.1
723.0
746.4
744.1
754.7
777.6
20 EQUALS: Disposable personal income
4,505.8
4,688.7
4,959.6
4,832.8
4,913.5
4,990.3
5,101.9
5,184.4
21
LESS: Personal outlays
4,257.8
4,496.2
4,756.5
4,657.3
4,712.4
4,787.0
4,869.3
4,920.7
22 EQUALS: Personal saving
247.9
192.6
203.1
175.5
201.1
203.3
232.6
263.7
19,489.7
13,110.4
14,279.0
19,878.8
13,390.8
14,341.0
20,475.8
13,715.4
14,696.0
20,235.2
13,639.8
14,535.0
20,389.7
13,650.9
14,625.0
20.536.5
13.716.6
14,697.0
20,739.8
13,853.5
14,927.0
20,836.3
13,880.1
15,048.0
5.5
4.1
4.1
3.6
4.1
4.1
4.6
5.1
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
722.9
787.5
920.6
886.2
923.3
922.6
9503
1,006.0
28 Gross private saving
980.8
1,002.5
1,053.5
1,037.3
1,041.4
1,052.7
1,082.7
1,126.4
29 Personal saving
30 Undistributed corporate profits'
31 Corporate inventory valuation adjustment
247.9
94.3
-6.4
192.6
120.9
-6.2
203.1
135.1
-19.5
175.5
127.7
-12.3
201.1
142.3
-14.1
203.3
139.5
-19.6
232.6
130.7
-32.1
263.7
132.6
-39.0
Capital consumption
32 Corporate
33 Noncorporate
396.8
261.8
407.8
261.2
432.2
283.1
432.2
301.8
425.9
272.1
432.6
277.3
438.0
281.3
445.3
284.7
-257.8
-282.7
24.8
-215.0
-241.4
26.3
-132.9
-159.1
26.2
-151.1
-176.2
25.2
-118.1
-145.1
27.0
-130.1
-154.0
23.9
-132.3
-161.1
28.8
-120.4
-148.6
28.2
731.7
789.8
889.7
850.2
8993
901.5
907.9
947.4
1,055.1
-153.6
1,075.6
-167.7
1,107.8
-160.4
-21.1
-42.4
-58.6
allowances
34 Government surplus, or deficit ( - ) , national income and
product accounts
35
Federal
36
State and local
37 Gross investment
38 Gross private domestic investment
39 Net foreign investment
40 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
788.3
-56.6
882.0
-92.3
1,032.9
-143.2
966.6
-116.4
1,034.4
-135.1
8.8
23
-30.9
-36.1
-24.0
SOURCE. U.S. Department of Commerce, Survey of Current Business.
Summary Statistics
3.10
U.S. INTERNATIONAL T R A N S A C T I O N S
A53
Summary
Millions of dollars; quarterly data seasonally adjusted except as noted1
1995
1994"
Item credits or debits
1 Balance on current account.
2
Merchandise trade balance
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
1993"
1992
-61,548 r
-96,106 r
440,352 r
-536,458
-2,142 r
58,767r
10,080"
-15,083"
-3,735
-13,330"
11 Change in U.S. government assets other than official
reserve assets, net (increase, - )
-1,661"
12 Change in U.S. official reserve assets (increase, - ) .
13
Gold
14
Special drawing rights (SDRs)
15
Reserve position in International Monetary Fund .
16
Foreign currencies
3,901
0
2,316
-2,692
4,277
17 Change in U.S. private assets abroad (increase, - ) .
18
Bank-reported claims
19
Nonbank-reported claims
20
U.S. purchases of foreign securities, net
21
U.S. direct investments abroad, net
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 liabilities4
26
Other U.S. liabilities reported by U.S. banks 3
27
Other foreign official assets 5
Change in foreign private assets in United States (increase, + ) . . .
U.S. bank-reported liabilities
U.S. nonbank-reported liabilities
Foreign private purchases of U.S. Treasury securities, n e t .
Foreign purchases of other U.S. securities, net
Foreign direct investments in United States, net
34 Allocation of special drawing rights.
35 Discrepancy
36
Due to seasonal adjustment
37
Before seasonal adjustment
1994"
-99,925
-132,618
456,823
-589,441
448
57,328
9,000
-16,311
-3,785
-13,988
-151,245
-166,099
502,485
-668,584
2,148
57,739
-9,272
-15,814
-4,247
-15,700
Q1
Q2
Q3
Q4
Qlp
-30,271
-36,490
118,445
-154,935
-31
13,505
116
-2,378
-1,057
-3,936
-37,986
-41,494
122,730
-164,224
376
14,195
-2,285
-3,703
-1,063
-4,012
-39,714
-44,627
127,384
-172,011
1,124
14,696
-2,533
-3,488
-1,064
-3,822
-43,276
-43,488
133,926
-177,414
679
15,342
-4,570
-6,245
-1,063
-3,931
-40,503
-45,052
138,059
-183,111
621
14,408
-2,698
-2,954
-782
-4,046
-330
-322
401
491
-283
-931
23
-1,379
0
-537
-44
-797
5,346
0
-441
494
5,293
-59
0
-101
-3
45
3,537
0
-108
251
3,394
-165
0
-111
273
-327
2,033
0
-121
-27
2,181
-5,318
0
-867
-526
-3,925
-68,115"
20,895"
45
-46,415"
-42,640"
-182,880
29,947
1,581
-141,807
-72,601
-130,875
915
-32,621
-49,799
-49,370
-37,125
869
-1,891
-16,457
-19,646
-10,001
15,107
-10,230
-7,128
-7,750
-27,492
1,590
-8,051
-10,976
-10,055
-56,258
-16,651
-12,449
-15,238
-11,920
-58,656
-34,474
-5,778
-18,404
40,466"
18,454
3,949
2,180"
16,571
-688
72,146
48,952
4,062
1,706
14,841
2,585
39,409
30,723
6,025
2,211
2,923
-2,473
10,977
857
215
851
9,807
-753
9,162
5,919
2,360
174
1,674
-965
19,691
16,477
2,222
494
1,298
-800
-421
7,470
1,228
692
-9,856
45
• 21,336
9,949
982
-242
10,382
265
113,357"
15,461
13,573
36,857
29,867
17,599"
176,382
20,859
10,489
24,063
79,864
41,107
251,956
114,396
-4,324
33,811
58,625
49,448
69,413
31,839
2,478
9,771
21,117
4,208
37,364
28,231
-2,047
-7,317
12,551
5,946
60,045
19,650
487
5,428
14,762
19,718
85,136
34,676
-5,242
25,929
10,195
19,578
63,744
8,647
0
-13,336
5,274
-18,610
0
-2,567
587
-3,154
0
-12,082
-6,641
-5,441
0
13,718
782
12,936
0
19,374
6,537
13,017
-59
3,537
-165
2,033
-5,318
-1,113
21,578
1,120
-379
0
0
-26,399"
35,985
-14,269
-26,399"
35,985
- i 4,269
-1,379
5,346
0
29,670
15,647
9,780
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)
3,901
38,286
70,440
37,198
10,126
8,988
19,197
5,942
-3,717
-1,184
-1,651
-4,217
3,564
1. Seasonal factors are not calculated for lines 12-16, 18-20,22-34, and 38^H).
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 5.
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, Bureau of Economic Analysis, Survey of
Current Business.
A54
3.11
International Statistics • September 1995
U.S. FOREIGN TRADE1
Millions of dollars; monthly data seasonally adjusted
1994
Item
1992
1993
1995
1994
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.r
May p
1 Goods and services, balance
2
Merchandise
3
Services
-39,480
-96,106
56,626
-74,842
-132,618
57,777
-106,214
-166,101
59,887
-9,735
-15,292
5,557
-7,894
-13,272
5,378
-10,616
-15,946
5,330
-9,610
-14,426
4,816
-9,792
-14,678
4,886
-11,374
-16,504
5,130
-11,428
-16,483
5,055
4 Goods and services, exports
5
Merchandise
6
Services
618,969
440,352
178,617
644,579
456,824
187,755
701,200
502,484
198,716
61,713
44,441
17,272
63,185
46,172
17,013
61,989
44,772
17,217
62,093
45,482
16,611
64,820
47,805
17,015
63,977
46,923
17,054
64,807
47,758
17,049
7 Goods and services, imports
8
Merchandise
9
Services
-658,449
-536,458
-121,991
-719,421
-589,442
-129,979
-807,414
-668,585
-138,829
-71,448
-59,733
-11,715
-71,079
-59,444
-11,635
-72,605
-60,718
-11,887
-71,704
-59,909
-11,795
-74,613
-62,484
-12,129
-75,351
-63,427
-11,924
-76,235
-64,241
-11,994
-84,501
-115,568
-150,629
-14,202
-12,010
-15,047
-13,507
-13,024
-14,906
-14,521
MEMO
10 Balance on merchandise trade, Census
basis
1. Data show monthly values consistent with quarterly figures in the U.S. balance of
payments accounts.
3.12
SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of
Economic Analysis.
U.S. RESERVE ASSETS
Millions of dollars, end of period
1994
Asset
1 Total
2 Gold stock, including Exchange
Stabilization Fund 1
3 Special drawing rights2'3
4 Reserve position in International Monetary
Fund 2
5 Foreign currencies 4
1992
1993
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June p
77,719
71,323
73,442
74,000
74,335
76,027
81,439
86,761
88,756
90,549
90,063
11,057
11,240
11,056
8,503
11,053
9,039
11,052
10,017
11,051
10,039
11,050
10,154
11,050
11,158
11,053
11,651
11,055
11,743
11,054
11,923
11,054
11,869
9,488
45,934
11,759
40,005
11,818
41,532
12,037
40,894
12,030
41,215
12,120
42,703
12,853
46,378
13,418
50,639
14,206
51,752
14,278
53,294
14,276
52,864
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.
1. Gold held "under earmark" at Federal Reserve Banks for foreign and international
accounts is not included in the gold stock of the United States; see table 3.13, 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 1981, five currencies have
3.13
1995
1994
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1
Millions of dollars, end of period
1994
Asset
1991
1992
Nov.
1 Deposits
Held in custody
2 U.S. Treasury securities 2
3 Earmarked gold 3
Dec.
Jan.
Feb.
Mar.
Apr.
May
June p
968
205
386
230
250
185
188
370
166
227
167
281,107
13,303
314,481
13,118
379,394
12,327
444,339
12,037
441,866
12,033
439,139
12,033
447,206
12,033
459,694
11,964
469,482
11,897
474,181
11,800
482,506
11,725
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, in each case measured at face (not market) value.
1995
1993
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
3.15
A55
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1994r
1 Total1
By type
2 Liabilities reported by banks in the United States
3 U.S. Treasury bills and certificates
U.S. Treasury bonds and notes
4
Marketable
5
Nonmarketable 4
v
6 U.S. securities other than U.S. Treasury securities1
7
8
9
10
11
12
By area
Europe 1
Canada
Latin America and Caribbean
Asia
Africa
Other countries 6
Feb/
Mar/
Apr.
412,624
483,002
523,896
520,278
517,028
527,311
542,494
552,094
54,967
104,596
69,808
151,100
73,530
143,222
72,731
139,570
74,109
133,014
80,326
134,341
83,423
141,716
85,048
146,417
210,931
4,532
37,598
212,237
5,652
44,205
253,451
6,069
47,624
254,059
6,109
47,809
255,888
6,137
47,880
257,998
6,095
48,551
262,020
6,135
49,200
265,164
6,174
49,291
189,230
13,700
37,973
164,690
3,723
3,306
207,121
15,285
55,898
197,702
4,052
2,942
217,022
17,528
45,209
234,318
4,673
5,144
215,024
17,235
41,192
236,819
4,179
5,827
212,376
18,041
36,982
240,019
4,335
5,273
213,876
18,655
42,201
244,650
4,066
3,861
218,355
19,268
39,599
256,849
4,583
3,838
216,537
19,248
42,176
266,093
4,200
3,838
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.
3.16
Jan. r
LIABILITIES TO, AND CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies
5. Debt securities of U.S. government corporations and federally sponsored agencies,
and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
SOURCE. Based on U.S. Department of the Treasury data and on data reported to the
department by banks (including Federal Reserve Banks) and securities dealers in the
United States, and on the 1989 benchmark survey of foreign portfolio investment in the
United States.
Reported by Banks in the United States1
Millions of dollars, end of period
1994r
Item
1 Banks' liabilities
2 Banks' claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers 2
1991
75,129
73,195
26,192
47,003
3,398
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
1992
72,796
62,799
24,240
38,559
4,432
1995
1993r
78,120
60,663
20,289
40,374
7,320
June
Sept.
Dec.
Mar/
73,016
56,852
21,562
35,290
6,734
83,343
63,446
20,493
42,953
7,367
89,475
59,711
19,445
40,266
12,229
96,003
72,384
24,172
48,212
11,487
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.
A56
3.17
International Statistics • September 1995
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States'
Millions of dollars, end of period
1994 R
Item
1992
1995
1994 R
1993
Nov.
Dec.
Jan.'
Feb.
Mar.
Apr.
May p
B Y HOLDER AND TYPE OF LIABILITY
1
2
3
4
5
6
Total, all foreigners
Banks' own liabilities
Demand deposits
Time deposits 2
Other 3
Own foreign offices 4
Banks' custodial liabilities5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
10
Other
7
8
9
11
12
13
14
15
16
17
18
19
20
71
22
73
24
75
26
27
28
79
30
31
32
33
34
35
36
37
38
39
40
41
47.
43
44
45
46
47
48
Nonmonetary international and regional organizations 8 ...
Banks' own liabilities
Demand deposits
Time deposits 2
Other 3
Banks' custodial liabilities5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other
Official institutions 9
Banks' own liabilities
Demand deposits
Time deposits 2
Other 3
Banks' custodial liabilities5
US. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other
Banks 10
Banks' own liabilities
Unaffiliated foreign banks
Demand deposits
Time deposits 2
Other 3
Own foreign offices 4
Banks' custodial liabilities5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other
Other foreigners
Banks' own liabilities
Demand deposits
Time deposits 2
Other 3
Banks' custodial liabilities5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other
810,259
925,418 r
1,017,034
995,331
1,017,034
1,036,452
1,042,197
606,444
21,828
160,385
93,237
330,994
R
625,665
21,573
175,078
110,635R
318,379R
721,751
23,373
186,363
115,269
396,746
692,288
23,954
178,430
128,793
361,111
721,751
23,373
186,363
115,269
396,746
724,503
23,424
187,988
124,844
388,247
725,495R
24,058
185,726R
125,641R
390,070"
723,940'
22,656
184,282R
120,129R
396,873R
719,775
22,916
180,714
123,072
393,073
723,496
23,526
185,273
126,272
388,425
203,815
127,644
299,753R
176,739
295,283
162,825
303,043
169,056
295,283
162,825
288,413
156,670
294,597
160,353
306,083
170,138
316,677
175,540
318,701
182,044
21,974
54,197
36,289
86,725R
42,177
90,281
39,834
94,153
42,177
90,281
40,502
91,241
43,378
90,866
44,921
91,024
48,427
92,710
40,333
96,324
9,350
6,951
46
3,214
3,691
10,936
5,639
15
2,780
2,844
8,506
8,076
29
3,198
4,849
9,441
8,675
35
2,917
5,723
8,506
8,076
29
3,198
4,849
9,821
9,355
24
3,715
5,616
8,690
7,527
214
3,954
3,359
7,923
6,956
34
3,491
3,431
2,399
1,908
5,297
4,275
430
281
766
501
430
281
466
280
649
407
624
314
1,163
763
967
510
486
5
1,022
0
149
0
265
0
149
0
181
5
242
0
307
3
400
0
456
1
159,563
51,202
1,302
17,939
31,961
220,908
64,231
1,601
21,654
40,976
212,301
59,280
1,564
23,211
34,505
216,752
60,740
1,682
20,661
38,397
212,301
59,280
1,564
23,211
34,505
207,123
62,097
1,598
22,673
37,826
214,667
67,314
1,587
25,384R
40,343R
225,139R
68,922'
1,705
23,651'
43,566'
231,465
67,483
1,485
25,492
40,506
238,957
68,497
1,575
27,335
39,587
108,361
104,596
156,677
151,100
153,021
139,570
156,012
143,222
153,021
139,570
145,026
133,014
147,353
134,341
156,217
141,716
163,982
146,417
170,460
154,575
3,726
39
5,482
95
13,245
206
12,773
17
13,245
206
11,972
40
12,943
69
14,351
150
17,473
92
15,771
114
1,012,916 1,020,092' l,030,023 r
8,291R
7,642R
35
3,484
4,123R
9,263F
8,639R
31
3,899
4,709R
547,320
476,117
145,123
10,170
90,296
44,657
330,994
592,208R
478,792R
160,413
9,719
105,192
45,502
318,379R
681,727
567,776
171,030
10,628
111,460
48,942
396,746
650,108
534,901
173,790
11,259
105,998
56,533
361,111
681,727
567,776
171,030
10,628
111,460
48,942
396,746
678,182
564,116
175,869
10,243
112,178
53,448
388,247
678,595'
561,898R
171,828R
10,954
107,429
53,445'
390,070R
685,528'
565,479'
168,606'
10,788
107,905
49,913'
396,873'
681,514
558,950
165,877
10,667
99,379
55,831
393,073
680,008
560,503
172,078
11,365
102,345
58,368
388,425
71,203
11,087
113,416R
10,712
113,951
11,218
115,207
11,792
113,951
11,218
114,066
10,992
116,697
12,328
120,049
15,723
122,564
15,717
119,505
14,437
7,555
52,561
17,020
85,684R
14,234
88,499
13,530
89,885
14,234
88,499
14,137
88,937
15,232
89,137
15,254
89,072
15,964
90,883
10,955
94,113
94,026
72,174
10,310
48,936
12,928
101,366'
77,003R
10,238
45,452
21,313R
114,500
86,619
11,152
48,494
26,973
119,030
87,972
10,978
48,854
28,140
114,500
86,619
11,152
48,494
26,973
117,790
88,935
11,559
49,422
27,954
118,539R
88,641R
11,482
49,429'
27,730
110,093'
80,900'
10,132
48,827'
21,941'
114,783
85,815
10,550
51,889
23,376
115,309
87,540
10,552
52,102
24,886
21,852
10,053
24,363
10,652
27,881
11,756
31,058
13,541
27,881
11,756
28,855
12,384
29,898
13,277
29,193
12,385
28,968
12,643
27,769
12,522
10,207
1,592
12,765
946
14,549
1,576
13,266
4,251
14,549
1,576
14,212
2,259
14,961
1,660
15,009
1,799
14,590
1,735
13,151
2,096
9,111
17,567
17,895
17,397
17,895
16,442
17,137
16,759
17,651
11,938
MEMO
49
Negotiable time certificates of deposit in custody for
foreigners
1. Reporting banks include all types of depository institutions, 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 quarterly Consolidated Reports of Condition filed with bank
regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign
banks, consists principally of amounts owed to the head office or parent foreign bank, and
to foreign branches, agencies, or wholly owned subsidiaries of the 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 InterAmerican 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
3.17
Data
LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued
1994r
Item
1992
1995
1994r
1993
Nov.
Dec.
995,331
1,017,034
Jan. r
Feb.
Mar.
Apr.
May p
AREA
50 Total, all foreigners
51 Foreign countries
5?
53
54
55
56
57
58
59
60
61
6?
63
64
65
66
67
68
69
70
71
Belgium and Luxembourg
Denmark
Italy
Turkey
United Kingdom
Other Europe and other former U.S.S.R.
11?
113
114
377,193
1,917
28,621
4,517
1,872
39,746
26,613
1,519
11,759
16,096
2,966
3,366
2,511
20,493
2,572
41,561
3,227
133,936
570
33,331
1,008,528
393,021
3,649
21,758
2,784
1,436
44,971
27,175
1,393
10,882
16,723
2,338
2,846
2,714
14,655
3,093
41,881
3,341
163,577
245
27,760
985,890
394,684
4,267
22,324
2,320
1,590
41,309
31,073
1,489
9,800
17,961
2,810
2,921
2,843
15,038
3,361
41,759
3,061
162,796
240
27,922
1,008,528
393,021
3,649
21,758
2,784
1,436
44,971
27,175
1,393
10,882
16,723
2,338
2,846
2,714
14,655
3,093
41,881
3,341
163,577
245
27,760
1,036,452
1,042,197
r
1,027,762
1,034,274
375,743
3,963
25,673
2,811
1,709
40,907
31,939
2,199
9,815
14,623
1,289
2,860
7,042
9,827
1,445
40,011
3,188
149,897
229
26,316
1,012,916 1,020,092' 1,030,023'
1,003,095 l,011,801
393,767
3,236
21,679
2,662
2,403
42,464
28,521
1,234
10,269
15,629
2,309
2,863
2,047
15,149
2,258
39,518
3,621
173,906
261
23,938
r
l,020,760
1
r
380,685
4,012
23,886
2,396
1,223
41,300
28,276
2,264
8,686
15,784
2,066
2,810
3,469
11,675
2,474
39,355
2,513
159,908'
211
28,477
367,143
4,030
22,813
2,567
2,029
38,410
28,453
2,195
9,417
12,545
1,374
2,940
5,011
9,859
1,801
41,258
3,624
152,912
222
25,683
386,599
4,021
22,094
1,971
1,754
44,314
27,497
2,065
12,021
15,891
2,147
4,007
2,642
11,106
2,247
40,100
2,701
162,638r
258
27,325
20,229 r
24,612
23,297
24,612
26,503
26,568
27,034
28,563
27,721
422,720
17,199
103,684
8,467
9,140
229,560
3,114
4,579
13
873
1,121
529
12,243
4,530
4,542
899
1,594
13,975
6,658
398,529
15,971
90,277
7,628
6,739
216,290
3,741
4,389
7
823
1,037
533
19,202
4,863
4,608
941
1,188
13,845
6,447
422,720
17,199
103,684
8,467
9,140
229,560
3,114
4,579
13
873
1,121
529
12,243
4,530
4,542
899
1,594
13,975
6,658
410,039
12,790
95,227
8,906
9,004
229,934
2,966
4,309
12
1,340
1,057
447
12,608
3,834
4,836
901
1,798
13,461
6,609
421,335 r
11,886
98,833
8,554
10,628
233,318 r
3,327
4,037
5
1,511
1,079
464
16,770
4,495
4,281
892
1,610
12,970
6,675
421,976'
9,978'
100,370
8,798
10,860
235,839'
3,587
3,644
5
1,117
1,062
491
15,750
4,013
4,361
893
1,754
12,632
6,822
431,162
10,154
97,352
8,764
13,114
243,856
3,446
3,598
6
1,054
1,094
422
17,246
4,076
4,810
931
1,930
12,130
7,179
430,536
10,368
92,473
8,589
15,613
242,487
2,958
3,432
5
1,050
1,071
542
18,263
6,011
5,002
1,014
2,105
12,318
7,235
143,540
144,575
155,629
157,517
155,629
159,796
166,066r
178,464'
187,669
187,088
3,202
8,408
18,499
1,399
1,480
3,773
58,435
3,337
2,275
5,582
21,437
15,713
4,011
10,627
17,178
1,114
1,986
4,435
61,466
4,913
2,035
6,137
15,824
14,849
10,066
9,825
17,165
2,338
1,587
5,155
64,256
5,124
2,714
6,466
15,475
15,458
8,020
10,954
17,559
2,380
1,634
5,067
63,493
5,026
3,065
5,946
17,701
16,672
10,066
9,825
17,165
2,338
1,587
5,155
64,256
12,911
9,168
18,446
2,296
1,612
5,471
61,878
12,017
10,021
19,952'
2,354
2,107
5,003
77,846
5,124
4,781
2,714
6,466
15,475
15,458
2,616
8,226
16,189
16,202
15,661
9,941
18,ISO1
2,119
1,957
4,953
63,200
4,175
2,363
9,906
14,935
18,706
2,297
9,564
15,516
17,430
12,138
9,630
20,117
2,194
1,696
5,411
84,761
4,747
2,257
10,416
15,730
18,572
9,459
9,187
23,020
1,942
2,632
5,331
83,180
5,034
2,722
11,595
15,639
17,347
Oil-exporting countries 14
Other
5,884
2,472
76
190
19
1,346
1,781
6,633
2,208
99
451
12
1,303
2,560
6,511
1,867
97
433
9
1,343
2,762
7,001
2,134
73
693
10
1,227
2,864
6,511
1,867
97
433
9
1,343
2,762
6,363
1,749
92
285
10
1,409
2,818
6,203
1,830
73
400
10
1,122
2,768
6,817
1,781
70
706
9
1,599
2,652
7,218
2,102
66
401
12
1,328
3,309
8,145
2,045
73
542
10
1,303
4,172
Other
4,167
3,043
1,124
4,192
3,308
884
6,035
5,141
894
4,862
4,094
768
6,035
5,141
894
6,627
5,395
1,232
5,030
4,351
679
5,784
5,024
760
6,007
4,912
1,095
5,041
4,256
785
9,350
7,434
1,415
501
10,936
6,851
3,218
867
8,506
7,437
613
456
9,441
7,592
1,094
755
8,506
7,437
613
456
9,821
8,455
865
501
8,291 r
7,138 r
582
571
9,263'
8,092'
576
595
8,690
7,153
666
871
7,923
5,944
1,067
912
Other
China
People's Republic of China
Republic of China (Taiwan)
101
105
106
107
108
109
110
111
307,670
1,611
20,567
3,060
1,299
41,411
18,630
913
10,041
7,365
3.314
2,465
577
9,793
2,953
39,440
2,666
111,805
504
29,256
914,482
1,017,034
361,660 r
14,477
73,800
7,841
5,301
193,574r
3,183
3,171
33
880
1,207
410
28,018
4,686 r
3,582
926
1,611
12,786
6,174
9?
10?
103
104
800,909
r
22,420
90
93
94
95
96
97
98
99
100
925,418 r
317,228
9,477
82,284
7,079
5,584
153,033
3,035
4,580
3
993
1,377
371
19,454
5,205
4,177
1,080
1,955
11,387
6,154
72 Canada
73 Latin America and Caribbean
74
75
76
77
78
British West Indies
Chile
79
80
81
Cuba
8?
83
84
85
86
Netherlands Antilles
87
88
89
91
810,259
Thailand
Middle Eastern oil-exporting countries
Other
Morocco
South Africa
115 Nonmonetary international and regional organizations...
116
Latin American regional
117
Other regional 17
118
11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
12. Includes the Bank for International Settlements. Since December 1992, has
included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and
Slovenia.
13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United
Arab Emirates (Trucial States).
4,357
14. Comprises Algeria, Gabon, Libya, and Nigeria.
15. Principally the International Bank for Reconstruction and Development. Excludes
"holdings of dollars" of the International Monetary Fund.
16. Principally the Inter-American Development Bank.
17. Asian, African, Middle Eastern, and European regional organizations, except the
Bank for International Settlements, which is included in "Other Europe."
A57
A58
3.18
International Statistics • September 1995
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States'
Payable in U.S. Dollars
Millions of dollars, end of period
1994r
Area or country
1992
1993r
1995
1994r
Nov.
Dec.
Jan. r
Feb/
Mar/
Apr.
May p
1 Total, all foreigners
499,437
484,689
480,962
466,097
480,962
482,534
475,227
490,479
478,812
481,064
2 Foreign countries
494,355
482,284
476,371
464,549
476,371
478,952
474,343
486,745
475,875
479,442
123,377
331
6,404
707
1,418
14,723
4,222
717
9,047
2,468
355
325
3,147
2,755
4,923
4,717
962
63,430
569
2,157
121,934
413
6,529
382
594
11,537
7,693
679
8,835
3,063
396
834
2,310
2,761
4,082
6,565
1,300
61,641
536
1,784
123,669
692
6,649
1,029
691
12,244
6,652
592
6,041
3,709
504
938
949
3,529
4,096
7,490
874
65,560
265
1,165
120,521
369
6,241
658
713
12,994
8,320
518
5,907
4,086
1,004
1,006
1,172
2,171
3,581
6,543
926
62,594
266
1,452
123,669
692
6,649
1,029
691
12,244
6,652
592
6,041
3,709
504
938
949
3,529
4,096
7,490
874
65,560
265
1,165
125,768
350
5,553
478
716
12,702
8,460
668
6,609
3,741
1,069
988
1,148
2,941
3,826
9,020
560
64,933
265
1,741
122,435
425
4,816
636
452
11,948
7,640
751
6,538
4,200
988
1,045
759
2,800
4,038
8,056
882
64,650
265
1,546
127,390
589
7,327
723
564
13,259
7,009
586
6,399
4,076
1,442
907
770
3,066
3,372
7,837
690
67,497
247
1,030
121,680
461
8,390
549
700
12,858
7,090
535
6,209
3,527
1,295
915
657
2,076
3,522
7,381
810
63,307
247
1,151
121,883
756
8,016
508
431
13,822
6,574
391
6,219
5,978
1,382
990
511
2,138
3,319
7,613
722
61,222
247
1,044
3 Europe
4
Austria
5
Belgium and Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
10
Greece
11
Italy
12
Netherlands
13
Norway
14
Portugal
Russia
15
16
Spain
17
Sweden
18
Switzerland
Turkey
19
20
United Kingdom
21
Yugoslavia^.
Other Europe and other former U.S.S.R.3
22
13,845
18,534
18,030
17,809
18,030
18,859
18,933
20,207
17,417
20,492
24 Latin America and Caribbean
25
Argentina
26
Bahamas
27
Bermuda
28
Brazil
29
British West Indies
Chile
30
31
Colombia
Cuba
32
Ecuador
33
34
Guatemala
35
Jamaica
36
Mexico
37
Netherlands Antilles
38
Panama
39
Peru
Uruguay
40
41
Venezuela
Other
42
218,078
4,958
60,835
5,935
10,773
101,507
3,397
2,750
0
884
262
162
14,991
1,379
4,654
730
936
2,525
1,400
223,345
4,416
63,256
8,059
11,813
98,661
3,619
3,179
0
680
288
195
15,864
2,682
2,893
656
954
2,907
3,223
221,388
5,788
66,042
7,526
9,485
95,744
3,794
4,003
0
680
366
254
17,672
1,055
2,179
996
486
1,828
3,490
217,043
5,728
60,879
6,730
9,793
96,964
3,628
3,768
0
635
335
251
17,286
1,818
2,304
911
652
1,931
3,430
221,388
5,788
66,042
7,526
9,485
95,744
3,794
4,003
0
680
366
254
17,672
1,055
2,179
996
486
1,828
3,490
221,874
5,837
64,728
14,594
9,744
90,577
3,866
3,816
0
707
346
253
17,338
1,205
2,155
1,057
420
1,705
3,526
220,111
6,312
63,877
10,944
10,016
91,924
4,207
3,818
0
659
349
278
17,216
1,437
2,340
1,117
390
1,725
3,502
224,035
6,253
65,105
8,522
10,751
96,315
4,348
3,983
0
567
379
275
17,186
1,187
2,466
1,096
344
1,649
3,609
224,065
6,142
64,352
11,423
10,760
93,962
4,248
3,926
2
564
360
262
17,181
1,333
2,503
1,116
345
1,679
3,907
222,457
6,316
62,169
10,244
11,039
95,059
3,867
4,034
0
663
353
638
16,991
1,778
2,429
1,095
377
1,661
3,744
43 Asia
China
People's Republic of China
Republic of China (Taiwan)
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
Middle Eastern oil-exporting countries 4
Other
131,789
111,720
107,114
103,307
107,114
105,673
106,788
109,389
106,604
108,550
906
2,046
9,642
529
1,189
820
79,172
6,179
2,145
1,867
18,540
8,754
2,271
2,623
10,872
589
1,527
826
59,945
7,536
1,409
2,170
15,109
6,843
845
1,381
9,237
990
1,462
692
59,230
10,276
636
2,902
13,732
5,731
827
1,479
11,313
1,021
1,364
697
53,547
8,863
583
2,720
14,454
6,439
845
1,381
9,237
990
1,462
692
59,230
10,276
636
2,902
13,732
5,731
933
1,245
10,271
1,103
1,486
672
55,268
10,848
564
2,880
14,044
6,359
869
1,213
11,285
1,059
1,424
683
57,191
10,754
548
2,635
13,341
5,786
841
1,471
14,459
1,039
1,511
811
55,512
12,284
548
2,778
13,069
5,066
980
1,451
11,642
1,139
1,461
683
55,150
11,913
494
2,740
13,292
5,659
879
1,437
12,082
1,126
1,424
783
58,390
12,197
530
2,752
11,643
5,307
4,279
186
441
1,041
4
1,002
1,605
3,857
196
481
633
4
1,129
1,414
3,008
225
429
665
2
842
845
3,090
229
480
454
3
879
1,045
3,008
225
429
665
2
842
845
2,942
227
415
657
2
825
816
2,902
234
442
596
2
772
856
2,858
205
424
644
2
731
852
2,724
181
440
584
2
700
817
2,729
237
454
579
2
658
799
63 Other
64
Australia
Other
65
2,987
2,243
744
2,894
2,071
823
3,162
2,219
943
2,779
1,682
1,097
3,162
2,219
943
3,836
2,198
1,638
3,174
1,912
1,262
2,866
1,758
1,108
3,385
1,804
1,581
3,331
1,918
1,413
66 Nonmonetary international and regional organizations 6 ...
5,082
2,405
4,591
1,548
4,591
3,582
884
3,734
2,937
1,622
23 Canada
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
Egypt
Morocco
South Africa
Zaire
Oil-exporting countries 5
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. Since December 1992, has included
all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Setdements, which is included in "Other
Europe."
Nonbank-Reported
3.19
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
Payable in U.S. Dollars
Data
Reported by Banks in the United States1
Millions of dollars, end of period
1994r
Type of claim
1992
1993r
1995
1994r
Nov.
Dec.
466,097
21,334
276,808
103,686
50,902
52,784
64,269
480,962
23,470
283,135
110,862
59,065
51,797
63,495
Jan. r
Feb/
Mar/
482,534
24,100
278,928
104,330
54,445
49,885
75,176
475,227
18,181
279,276
105,383
54,145
51,238
72,387
490,479
23,712
293,119
104,434
53,178
51,256
69,214
1 Total
559,495
538,471
556,191
2 Banks' claims
Foreign public borrowers
3
4
Own foreign offices
5
Unaffiliated foreign banks
6
Deposits
Other
7
All other foreigners
8
499,437
31,367
303,991
109,342
61,550
47,792
54,737
484,689
29,095
284,310
100,030
48,841
51,189
71,254
480,962
23,470
283,135
110,862
59,065
51,797
63,495
60,058
15,452
53,782
21,111
75,229
36,190
75,229
36,190
81,834
36,528
31,474
18,991
25,731
25,731
30,823
13,132
13,680
13,308
13,308
14,483
8,655
7,829
8,313
8,313
8,394
38,623
26,364
27,185
9 Claims of banks' domestic customers 3
10
Deposits
Negotiable and readily transferable
11
instruments 4
12
Outstanding collections and other
claims
556,191
Apr.
May p
478,812
22,173
282,696
103,981
54,648
49,333
69,962
481,064
19,077
286,091
102,970
51,095
51,875
72,926
24,927
n.a.
572,313
MEMO
13 Customer liability on acceptances
14 Dollar deposits in banks abroad, reported by
nonbanking business enterprises in the
United States 5
27,168
27,459
28,726
26,792
and to foreign branches, agencies, or wholly owned subsidiaries of the 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 for quarter ending with month indicated.
Reporting banks include all types of depository institution, as well as some brokers and
dealers.
2. For US. banks, includes amounts due from own foreign branches and foreign
subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank
regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign
banks, consists principally of amounts due from the head office or parent foreign bank,
3.20
27,185
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U.S. Dollars
Reported by Banks in the United States1
Millions of dollars, end of period
1994r
Maturity, by borrower and area 2
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
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
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 3
1991
1995
1993r
June
Sept.
Dec.
Mar.
195,302
195,119
199,844
190,777
193,973
197,587
197,075
162,573
21,050
141,523
32,729
15,859
16,870
163,325
17,813
145,512
31,794
13,266
18,528
170,134
17,765
152,369
29,710
10,809
18,901
164,960
13,244
151,716
25,817
8,053
17,764
167,271
17,370
149,901
26,702
7,385
19,317
171,949
15,530
156,419
25,638
7,697
17,941
168,824
15,739
153,085
28,251
7,695
20,556
51,835
6,444
43,597
51,059
2,549
7,089
53,300
6,091
50,376
45,709
1,784
6,065
56,574
7,664
58,948
41,335
1,820
3,793
51,153
8,278
59,723
39,036
1,798
4,972
58,784
7,212
57,782
36,661
1,520
5,312
56,500
7,266
60,031
40,422
1,365
6,365
53,699
7,333
62,929
38,105
1,223
5,535
3,878
3,595
18,277
4,459
2,335
185
5,367
3,287
15,312
5,038
2,380
410
5,205
2,558
13,976
5,587
1,936
448
3,744
2,474
12,551
4,763
1,850
435
4,034
2,654
12,665
5,047
1,840
462
3,861
2,459
12,220
4,732
1,553
813
4,490
3,603
12,952
5,138
1,592
476
1. Reporting banks include all kinds of depository institutions besides commercial
banks, as well as some brokers and dealers.
1992
2. Maturity is time remaining to maturity,
3. Includes nonmonetary international and regional organizations.
A59
A60
3.21
International Statistics • September 1995
CLAIMS ON FOREIGN COUNTRIES
Held by U.S. and Foreign Offices of U.S. Banks1
Billions of dollars, end of period
1993
Area or country
1991
1994
1995
1992
Mar.
June
Sept.
Dec.
Mar.
r
Sept.
June
r
r
Dec.
r
Mar.
r
555.5
343.6
346.5
361.1
377.1
388.4
404.5
137.6
.0
11.0
8.3
5.6
.0
1.9
3.4
68.5
5.8
22.6
132.9
5.6
15.3
9.3
6.5
2.8
2.3
4.8
60.8
6.3
19.3
142.5
6.1
13.5
9.9
6.7
3.6
3.0
5.3
65.7
8.2
20.4
150.0
7.0
14.0
10.8
7.9
3.7
2.5
4.7
73.5
8.0
17.9
153.3
7.1
12.3
12.4
8.7
3.7
2.5
5.6
74.7
9.7
16.8
161.8r
7.4
11.7
12.6
7.6 r
4.7
2.5
5.9
84.7
6.8 r
17.8
179.0r
8.0
16.4
28.9 r
15.5
4.1
2.8
6.3
70.3 r
7.7
19.01
174.1r
8.7 r
18.9r
25.9 r
14.0
3.6
2.9
6.5
63.5 r
9.6
20.5
188.3r
9.7
20.7
25.ff
11.6
3.5
2.6
6.2
82.8
9.8
16.4
176.3r
6.9
19.2r
24.5
11.8
3.6
2.7
6.9
70.4 r
9.6 r
20.7
194.3
8.1
19.8
30.3
12.2
3.5
3.1
6.2
76.2
10.5
24.3
13 Other industrialized countries
14
Austria
15
Denmark
16
Finland
17
Greece
18
Norway
19
Portugal
20
Spain
21
Turkey
22
Other Western Europe
23
South Africa
24
Australia
22.8
.6
.9
.7
2.6
1.4
.6
8.3
1.4
1.8
1.9
2.7
24.0
1.2
.9
.7
3.0
1.2
.4
8.9
1.3
1.7
1.7
2.9
25.4
1.2
.8
.7
2.7
1.8
.7
9.5
1.4
2.0
1.6
2.9
27.2
1.3
1.0
.9
3.1
1.8
.9
10.5
2.1
1.7
1.3
2.5
26.0
.6
1.1
.6
3.2
2.1
1.0
9.3
2.1
2.2
1.2
2.8
24.6
.4
1.0
.4
3.2
1.7
.8
8.9
2.1
2.6
1.1
2.3
41.3 r
1.0
1.1
1.0
3.8
1.6
1.2
12.3
2.4
3.1 r
1.2
12.7
41.7
1.0
1.1
.8
4.6
1.6
1.1
11.7
2.1
2.8
1.2
13.7
41.5
1.0
.8
.8
4.3
1.6
1.0
13.1
1.8
1.0
1.2
15.0
45.2
1.1
1.2
1.0
4.5
2.0
1.2
13.6
1.6
2.7
1.0
15.4
43.9
.9
1.6
1.1
4.9
2.4
1.0
14.1
1.4
2.5
1.4
12.6
25 OPEC 2
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
14.5
.7
5.4
2.7
4.2
1.5
16.1
.6
5.2
3.0
6.2
1.1
16.6
.6
5.1
3.1
6.6
1.1
15.7
.6
5.5
3.1
5.4
1.1
14.8
.5
5.4
2.8
4.9
1.1
17.4
.5
5.1
3.3
7.4
1.2
22.9
.5
4.7
3.4
13.2
1.1
21.5
.5
4.4
3.2
12.4
1.1
21.7
.4
3.9
3.3
13.1
1.0
22.1
.5
3.7
3.6
13.4
.9
19.3
.5
3.5
3.8
10.7
.7
31 Non-OPEC developing countries
63.9
72.1
74.4
76.7
77.0
82.6
93.9 r
94.3 r
94.1
98.4 r
100.3
4.8
9.6
3.6
1.7
15.5
.4
2.1
6.6
10.8
4.4
1.8
16.0
.5
2.6
7.1
11.6
4.6
1.9
16.8
.4
2.7
6.6
12.3
4.6
1.9
16.8
.4
2.7
7.2
11.7
4.7
2.0
17.5
.3
2.7
7.7
12.0
4.7
2.1
17.8r
.4
3.0
8.7
12.6
5.1
2.2
18.7r
.6r
2.8 r
9.8
11.9
5.1
2.4
18.4r
.6
2.7
10.5
9.2
5.4
2.4
19.5r
.6
2.7
11.1
8.3 r
6.1
2.6
18.3r
.5
2.6 r
11.4
9.1
6.3
2.6
17.8
.6
2.4
.3
4.1
3.0
.5
6.8
2.3
3.7
1.7
2.0
.7
5.2
3.2
.4
6.6
3.1
3.6
2.2
2.7
.6
5.3
3.1
.5
6.5
3.4
3.4
2.2
2.7
1.6
5.9
3.1
.4
6.9
3.7
2.9
2.4
2.6
.5
6.4
2.9
.4
6.5
4.1
2.6
2.8
3.0
2.0
7.3
3.2
.5
6.7
4.4
3.1
3.1
2.9
.8
7.5
3.6
.4
i4. r
5.2
3.4
3.(f
3.1
,8r
7.1
3.7
.4
14.3r
5.2
3.2
3.3
3.5
1.0
6.9
3.9
.4
14.1
5.7
2.9
3.5
3.6
1.1
9.1
4.2
.4
16.2r
4.4
3.3
3.8 r
4.8
1.1
10.5
3.8
.6
16.9
3.8
3.0
3.3
5.2
.4
.7
.0
.7
.2
.6
.0
1.0
.2
.5
.0
.8
.2
.6
.0
.9
.2
.6
.0
.8
.4
.7
.0
.8
.4
.7
.0
1.0
.5
.7
.0
.9
.3
.7
.0
.9
.3
.6
.0
.8
.4
.6
.0
.7
2.4
.9
.9
.7
3.1
1.9
.6
.6
2.9
1.7
.6
.7
3.2
1.9
.6
.8
3.0
1.7
.6
.7
3.1
1.6
.6
.9
3.4
1.5
.5
1.4
3.0
1.2
.5
1.4
3.0
1.1
.5
1.5
2.7
.8
.5
1.4
2.4
.6
.4
1.3
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama 6
62
Lebanon
63
Hong Kong
64
Singapore
65
Other'
54.2
11.9
2.3
15.8
1.2
1.4
.1
14.4
7.1
.0
58.3
6.9
6.2
21.8
1.1
1.9
.1
13.8
6.5
.0
60.3
9.7
4.1
17.6
1.6
2.0
.1
16.7
8.4
.0
58.0
7.1
4.5
15.6
2.5
2.1
.1
16.9
9.3
.0
67.9
12.7
5.5
15.1
2.8
2.1
.1
19.1
10.4
.0
71.4 r
10.8r
8.1
17.4r
2.6 r
2.4
.1
18.7
11.2
.1
78. l r
13.7r
8.5 r
17.6r
3.5 r
2.0
.1
19.7
13.0*
.0
79.1'
13.4r
6.1
23.3 r
2.5
1.9
.1
21.7
10.6'
.0
76.0 r
13.6r
5.4r
21.2 r
1.7
1.9
.1
20.3
11.8
.0
69.7 r
9.8 r
7.4
19.9r
1.0
1.3
.1
19.9
10.2
.1
84.0
12.2
8.4
19.2
.9
1.1
.1
22.8
19.2
.0
66 Miscellaneous and unallocated 8
48.0
39.7
38.8
46.2
46.3
43.4
59.9
91.2'
85.5
87.3 r
111.1
1 Total
2 G-10 countries and Switzerland
3
Belgium and Luxembourg
4
France
5
Germany
6
Italy
7
Netherlands
8
Sweden
Switzerland
9
10
United Kingdom
11
Canada
12
Japan
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other
Asia
China
People's Republic of China
Republic of China (Taiwan)
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
Africa
Egypt
Morocco
Other Africa 3
52 Eastern Europe
53
Russia 4
Yugoslavia 5
54
55
Other
1. The banking offices covered by these data include U.S. offices and foreign branches
of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not
covered include U.S. agencies and branches of foreign banks. Beginning March 1994, the
data include large foreign subsidiaries of U.S. banks. The data also include other types of
U.S. depository institutions as well as some types of brokers and dealers. To eliminate
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.
These data are on a gross claims basis and do not necessarily reflect the ultimate
country risk or exposure of U.S. banks. More complete data on the country risk exposure
of U.S. banks are available in the quarterly Country Exposure Lending Survey published
by the Federal Financial Institutions Examination Council.
478.9
505.8
510.6
501.9
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. Beginning March 1994 includes Namibia.
4. As of December 1992, excludes other republics of the former Soviet Union.
5. As of December 1992, excludes Croatia, Bosnia and Hercegovinia, and Slovenia.
6. Includes Canal Zone.
7. Foreign branch claims only.
8. Includes New Zealand, Liberia, and international and regional organizations.
Nonbank-Reported Data
3.22
A61
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States1
Millions of dollars, end of period
1991
1992
1995
1994
1993
Type of liability, and area or country
1993r
Dec.
Mar.
June
Sept.
Dec.
Mar. p
1 Total
44,708
45,511
50369
50,369*
52,059*
55,383'
57,204'
54,644
51,488
2 Payable in dollars
3 Payable in foreign currencies
39,029
5,679
37,456
8,055
38,750
11,619
38,750 r
11,619"^
38,552 r
13,507r
42,957 r
12,426r
42,734'
14,470*
39,700
14,944
37,600
13,888
By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies
22,518
18,104
4,414
23,841
16,960
6,881
28,959
18,545
10,414
28,959 r
18,545r
10,414r
30,413 r
18,930*
U,483 r
33,245 r
22,819 r
10,426 r
35,850*
23,262'
12,588'
32,848
19,792
13,056
29,852
17,745
12,107
7 Commercial liabilities
8
Trade payables
9
Advance receipts and other liabilities . . .
22,190
9,252
12,938
21,670
9,566
12,104
21,410
8,811
12,599
21,410
8,811
12,599
21,646 r
8,976 r
12,670
22,138
9,913
12,225
21,354
9,552
11,802
21,796
10,013
11,783
21,636
10,162
11,474
10
11
Payable in dollars
Payable in foreign currencies
20,925
1,265
20,496
1,174
20,205
1,205
20,205
1,205
19,622r
2,024
20,138
2,000
19,472
1,882
19,908
1,888
19,855
1,781
12
13
14
15
16
17
18
By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
12,003
216
2,106
682
1,056
408
6,528
13,387
414
1,623
889
606
569
8,610
18,810
175
2,539
975
534
634
13,332
ls.sio1
175
2,539 r
975
534
634
13,332r
20,5 l C
525
2,606
1,214
564
1,200
13,793r
23,689 r
524
1,590
939
533
631
18,255'
23,792'
661
2,241
1,467
648
633
16,827'
20,870
495
1,727
1,961
552
688
14,709
16,804
612
2,046
1,755
633
883
10,025
292
544
859
859
508
698
19
Canada
r
r
618
625
1,817
3,024
931
149
58
1,231
10
5
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
4,784
537
114
6
3,524
7
4
4,053
379
114
19
2,850
12
6
3,359
1,148
0
18
1,533
17
5
3,359
1,148
0
18
1,533
17
5
3,554
l,158 r
120
18
1,613
14
5
3,125
1,052
115
18
1,297'
13
5
3,139'
1,112
15
7
1,344'
15
5
3,021
926
80
207
1,160
0
5
27
28
29
Asia 2
Japan
Middle Eastern oil-exporting countries"
5,381
4,116
13
5,818
4,750
19
5,689
4,620
23
5,689
4,620
23
5,650
4,638
24
5,694
4,760
24
8,149
6,947
31
8,147
7,013
35
8,011
6,990
27
30
Africa
6
4
6
0
133
123
133
123
133
124
9
0
133
123
135
123
156
122
52
33
109
109
58
30
19
50
40
6,921
254
712
670
649
473
2,311
6,867
287
742
552
674
391
2,351
6,855
231
763
611
723
335
2,450
6,906
273
696
510
576
389
2,857
31
32
Oil-exporting countries 4
All other 5
33
34
35
36
37
38
39
40
Commercial liabilities
Europe
Belgium and Luxembourg . . :
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
8,701
248
1,039
1,052
710
575
2,297
7,398
298
700
729
535
350
2,505
6,835
239
655
684
688
375
2,047
6,835
239
655
684
688
375
2,047
6,550
251
554
577
628
388
2,151
1,014
1,002
879
879
l,039 r
1,070
1,068
1,038
1,203
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,355
3
310
219
107
307
94
1,533
3
307
209
33
457
142
1,666
21
350
216
27
483
126
1,666
21
350
216
27
483
126
1,908
8
493
211
20
556
150
2,007
2
418
217
24
705
194
1,790
6
200
148
33
673
192
1,865
19
345
163
23
576
279
1,547
8
265
100
29
512
276
48
49
50
Asia 2
Japan
Middle Eastern oil-exporting countries
9,334
3,721
1,498
10,594
3,612
1,889
10,992
4,314
1,542
10,992
4,314
1,542
10,939
4,617
1,542
10,979
4,389
1,841
10,514
4,235
1,688
11,077
4,808
1,610
10,966
4,793
1,810
51
52
Africa
Oil-exporting countries
715
327
568
309
464
171
464
171
490
199
523
247
482
271
442
262
472
256
53
Other 5
1,071
575
574
574
720
638
633
519
542
1. For a description of the changes in the international statistics tables, see Federal
Reserve Bulletin, vol. 65, (July 1979), p. 550.
2. Revisions include a reclassification of transactions, which also affects the totals for
Asia and the grand totals.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Includes nonmonetary international and regional organizations.
A62
International Statistics • September 1995
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
the United States1
Reported by Nonbanking Business Enterprises in
Millions of dollars, end of period
1994r
1993
Type of claim, and area or country
1991
1992
1995
1993r
Dec. r
Mar.
June
Sept.
Dec.
Mar. p
1 Total
45,262
45,073
48,197
48,197
49,125
48,436
50,320
55,783
50458
2 Payable in dollars
3 Payable in foreign currencies
42,564
2,698
42,281
2,792
44,920
3,277
44,920
3,277
45,746
3,379
44,763
3,673
46,839
3,481
52,641
3,142
47,067
3,491
By type
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
27,882
20,080
19,080
1,000
7,802
6,910
892
26,509
17,695
16,872
823
8,814
7,890
924
27,528
15,681
15,146
535
11,847
10,655
1,192
27,528
15,681
15,146
535
11,847
10,655
1,192
28,461
15,973
15,471
502
12,488
11,301
1,187
27,064
15,769
15,164
605
11,295
9,972
1,323
28,672
16,570
16,009
561
12,102
10,914
1,188
32,714
18,645
18,194
451
14,069
13,009
1,060
27,920
16,573
15,979
594
11,347
10,180
1,167
11 Commercial claims
12
Trade receivables
13
Advance payments and other claims
17,380
14,468
2,912
18,564
16,007
2,557
20,669
17,666
3,003
20,669
17,666
3,003
20,664
17,769
2,895
21,372
18,552
2,820
21,648
18,867
2,781
23,069
20,204
2,865
22,638
19,676
2,962
14
15
Payable in dollars
Payable in foreign currencies
16,574
806
17,519
1,045
19,119
1,550
19,119
1,550
18,974
1,690
19,627
1,745
19,916
1,732
21,438
1,631
20,908
1,730
16
17
18
19
20
21
22
By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
13,441
13
269
283
334
581
11,534
9,331
8
764
326
515
490
6,252
7,249
134
826
526
502
530
3,535
7,249
134
826
526
502
530
3,535
7,257
125
790
466
503
535
3,699
6,698
83
995
459
472
509
3,062
8,042
114
831
413
503
747
4,326
7,638
86
800
540
429
523
4,395
7,222
69
805
443
606
490
3,867
23
Canada
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
31
32
33
Japan
Middle Eastern oil-exporting countries
34
35
Africa
Oil-exporting countries 3
36
All other 4
37
38
39
40
41
42
43
Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
2,642
1,833
2,032
2,032
2,207
3,080
3,164
3,801
4,090
10,717
827
8
351
9,056
212
40
13,893
778
40
686
11,747
445
29
16,031
1,310
125
654
12,536
868
161
16,031
1,310
125
654
12,536
868
161
15,968
1,285
34
672
12,704
850
26
14,591
1,281
39
466
11,792
614
33
14,808
1,070
52
411
12,143
655
32
18,723
2,329
27
520
14,802
606
35
14,798
905
37
487
12,574
472
27
640
350
5
864
668
3
1,657
892
3
1,657
892
3
2,550
1,657
5
2,234
1,349
2
2,175
662
19
1,835
931
141
1,457
584
4
57
1
83
9
99
1
99
1
76
0
74
1
87
1
249
0
77
9
385
505
460
460
403
387
396
468
276
8,193
194
1,585
955
645
295
2,086
8,451
189
1,537
933
552
362
2,094
9,097
184
1,947
1,018
423
432
2,369
9,097
184
1,947
1,018
423
432
2,369
8,772
177
1,830
947
355
415
2,342
8,925
179
1,779
938
294
686
2,434
8,783
174
1,766
880
330
538
2,490
9,579
217
1,886
1,046
314
559
2,554
9,070
199
1,797
1,000
334
562
2,403
44
Canada
1,121
1,286
1,360
1,360
1,483
1,468
1,503
1,543
1,587
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,655
13
264
427
41
842
203
3,043
28
255
357
40
924
345
3,284
11
182
463
71
994
296
3,284
11
182
463
71
994
296
3,573
13
222
422
58
1,014
296
3,903
18
295
502
67
1,047
305
3,971
34
246
473
49
1,137
394
4,147
9
234
614
83
1,244
355
4,122
16
202
679
58
1,099
298
4,591
1,899
620
4,866
1,903
693
5,906
2,173
716
5,906
2,173
716
5,851
2,353
668
6,141
2,359
616
6,433
2,448
616
6,745
2,497
700
6,840
2,595
697
52
53
54
Japan
Middle Eastern oil-exporting countries
55
56
Africa
Oil-exporting countries
430
95
554
78
521
85
521
85
515
102
492
90
462
68
473
76
481
82
57
Other 4
390
364
501
501
470
443
496
582
538
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
3.24
A63
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1993
1995
1994
1995
Transaction, and area or country
1994
Jan.May
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May p
29,443
29,685
35,332
37,653
30,080
29,204
38,702
36,018
U.S. corporate securities
STOCKS
319,664
298,086
1 Foreign purchases
2 Foreign sales
350,558
348,648
158,556
158,453
28,696
27,653
28,094
29,727
24,999
25,893
3 Net purchases, or sales ( - )
21,578
1,910
103
1,043
-1,633
-894
-242
-2^21
876
2,684
4 Foreign countries
21,306
1,900
153
1,020
-1,635
-930
-197
-2,291
877
2,694
5 Europe
10,658
-103
1,642
-602
2,986
4,559
-3,213
5,719
-321
8,198
3,825
63
202
6,717
-201
2,110
2,251
-30
840
-1,160
-2,108
-1,142
-1,207
1,190
29
771
-1,291
-678
-1,244
1,329
-2,094
2,396
-289
2,057
-256
-335
-1,607
-15
282
226
-25
-55
265
-551
566
-109
650
1
251
262
-4
5
-1,110
-119
-158
652
8
-1,265
175
-577
-86
-171
-174
-25
159
-516
-255
-157
278
-389
253
129
991
-22
-1,469
-860
-36
-7
-10
-27
-55
232
-78
-51
27
766
-133
-851
-541
0
4
-1,304
-250
-243
296
-475
-309
-333
-243
-73
-342
-321
-10
14
163
-80
-261
349
-673
1,123
-195
570
59
314
29
-10
-24
376
-66
-528
174
-479
1,380
83
-27
-87
2,013
86
41
295
272
10
-50
23
2
36
-45
-30
-1
-10
8
9
10
11
12
13
14
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
17 Other countries
18 Nonmonetary international and
regional organizations
BONDS2
20 Foreign sales
21 Net purchases, or sales ( - )
22 Foreign countries
23 Europe
25
26
27
28
29
30
31
32
33
34
35
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
283,824
217,824
291,084 r
229,520"
108,702
77,529
22,347"
15,431"
18,931"
14,702"
19,247"
12,626"
22,789
16,354
25,390
17,552
18,222
14,111
23,054
16,886
66,000
61,564 r
31,173
6,916 r
4,229 r
6,621 r
6,435
7,838
4,111
6,168
65,462
60,679"
31,407
6,932 r
3,889 r
6,417 r
6,489
8,151
4,094
6,256
38,708"
242
657
3,322
1,055
33,283"
2,958"
5,442"
771
12,153
5,486
-7"
654
25,041
-479
1,766
193
195
23,630
1,170
1,717
806
2,499
1,452
10
164
4,395"
-106
201
346
488
3,541"
194"
1,305
-96
1,137
497
-2
-1
2,711"
4
451
28
12
1,929"
445"
662
-193
240
-174
8
16
6,807"
157
1,516
-241
-85
5,416"
245
-655
59
-28
-396
8
-19
6,037
296
526
126
304
4,800
175
-480
119
595
132
-4
47
4,976
-85
-176
154
-61
5,248
289
1,285
328
1,150
570
22
101
2,330
-874
-83
-37
-87
3,455
184
889
326
356
275
-11
20
4,891
27
-17
191
124
4,711
277
678
-26
426
871
-5
15
-234
-16
340
204
-54
-313
17
-88
22,587
2,346
887
-290
-627
19,686
1,668
15,691
3,248
20,846
11,569
1,149
273
538
885
Foreign securities
-159"
26,303"
26,462"
-802"
68,120"
68,922"
-1,086"
27,154"
28,240"
-1,851"
61,226"
63,077"
-2,844"
28,995"
31,839"
-1,189"
79,056"
80,245"
-2,147
24,481
26,628
-747
53,493
54,240
-3,568
29,125
32,693
-4,224
74,152
78,376
—2,059r
—961r
—2,937 r
—4,033 r
-2,894
-7,792
—2,814r
—l,025 r
—2,773 r
-3,944"
-3,050
-7,796
-2,809"
1,643"
373"
-2,026"
-88"
93"
1,599"
-187"
-308"
-2,044"
1"
-86"
-1,290"
850"
-2,496"
13
-116
266"
-1,871"
-1,150
-1,282"
9
85
265
-1,849
-1,195
584
-533
-14
-43
-7,359
28
429
-1,353
-68
527
156
4
-62,691
245,490
308,181
-80,377
745,952
826,329
-47,232"
386,942"
434,174"
-9,332"
848,334"
857,666"
-9,804
136,058
145,862
-8,813
336,047
344,860
-2,547
28,444
30,991
-3,481"
62,555"
66,036"
-2,359"
26,332"
28,691"
300"
66,461"
66,161"
43 Net purchases, or sales ( - ) , of stocks and bonds
-143,068
-56,564"
-18,617
—6,028"'
44 Foreign countries
-143,232
—57,084 r
-18,588
—5,981 r
47 Latin America and Caribbean
48 Asia
-100,872
-15,664
-7,600
-15,159
-185
-3,752
-2,726"
-7,481"
-18,387"
-24,272"
-467"
-3,751"
-10,770
-1,654
-3,073
-3,908
-112
929
-2,709"
-512"
-1,565"
257"
-267
-1,185
37 Stocks, net purchases, or sales ( - )
40 Bonds, net purchases, or sales (—)
41
Foreign purchases
42
Foreign sales
50 Other countries
51 Nonmonetary international and
regional organizations
164
520
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 US. government
-29
-47
755
64
-164
-89
agencies and corporations. Also includes issues of new debt securities sold abroad by U.S.
corporations organized to finance direct investments abroad.
A64
3.25
International Statistics • September 1995
Foreign Transactions1
MARKETABLE U.S. TREASURY BONDS AND NOTES
Millions of dollars; net purchases, or sales (—) during period
1995
Area or country
1 Total estimated
2 Foreign countries
1993
1994
1995
1994
Jan.May
Nov.
Dec.
53,811
13,118 r
ll,752r
9,578 r
r
23,552
78,796 r
23,368
78,632
r
53,728
13,068
ll,964
Jan.
3
4
5
6
7
8
9
10
11
Europe
Belgium and Luxembourg
Germany
Netherlands
Sweden
Switzerland
United Kingdom
Other Europe and former U.S.S.R
Canada
-2,373
1,218
-9,976
-515
1,421
-1,501
6,197
783
10,309
38,608 r
1,098
5,709
1,254
794
48 l r
23,438
5,834 r
3,491
23,322
-158
-1,935
1,939
233
68
21,580
1,595
3,907
7,763
24
924
-2
211
-1,512
7,706
412
-1,350
8,300*
434
725
156
61
68 l r
6,243
0*
-559
12
13
14
15
16
17
18
19
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
Other
- 4 , 5 6 1 -10,179 r
390
-319
- 5 , 7 9 5 -20,493 r
844
10,633
20,582
47,042 r
17,070
29,518
1,156
240
-1,745
-570
2,051
673
959
419
24,786
17,705
34
-372
725
43
-2,074
2,756
4,944
4,551
-11
997
978
91
74
813
3,640
2,067
58
-453
184
-330
653
164r
526 r
-154r
83
420
-474
23 Foreign countries
24
Official institutions
25
Other foreign 2
23,368
1,306
22,062
78,632 r
41,822 r
36,810
53,728
9,295
44,433
13,068
2,760
10,308
Oil-exporting countries
26 Middle East 2
27 Africa 3
-8,836
-5
-38
0
-627
1
623
0
20 Nonmonetary international and regional organizations
21
International
22
Latin American regional
50*
86 r
4
-212r
— 131*
-3
Mar.
Apr.
May?
14,103 r
9,211
6,400
14,519
10,252*
13,385*
9,107
6,416
14,568
3,258*
134
60
2,388
-35
141*
579*
-9*
3,177
13,294*
107
-543
-239
97
165
10,448*
3,259
1,486
3,109
51
1,461
-7
30
-418
3,099
-1,107
434
3,152
62
1,216
-243
-70
-173
2,251
109
-1,391
509
-512
-4,129
40
211
353
5,203
-657
201
-3,268
329
-3,325
-272
1,730
2,316
49
94
-2,332
387
-3,358
639
8,445
4,167
-9
-540
3,212
184
2,189
839
1,189
1,487
-36
290
3,803
-16
2,425
1,394
9,845
6,291
39
171
718
608
199
104
458
-367
-16
-294
228
-49
356
-528
9,107
4,022
5,085
6,416
3,144
3,272
14,568
-1,810
16,378
152
1
733
0
-1,063
0
636
-211
3,028
-2,181
3,577*
3,444
-9
-387
-674
-708
-6
Feb.
MEMO
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.
11,964*
608*
11,356
10,252*
1,829*
8,423*
-405
-1
-360
0
13,385*
2,110
11,275*
-89
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
3.26
A65
DISCOUNT RATES OF FOREIGN CENTRAL BANKS1
Percent per year, averages of daily figures
Rate on June 30, 1995
Rate on June 30, 1995
Country
Month
effective
Austria..
Belgium.
Canada..
Denmark
France 2 .
4.0
4.0
6.97
6.0
5.0
Mar.
Mar.
June
Mar.
July
1995
1995
1995
1995
1994
Month
effective
4.0
9.0
1.0
3.75
Germany...
Italy
Japan
Netherlands
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.
3.27
Rate on June 30, 1995
Country
Country
Mar.
June
Apr.
June
1995
1995
1995
1995
Month effective
4.75
3.0
12.0
Norway
Switzerland
United Kingdom
Feb. 1994
Mar. 1995
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.
FOREIGN SHORT-TERM INTEREST RATES1
Percent per year, averages of daily figures
1995
Type or country
1
2
3
4
5
6
7
8
9
10
Eurodollars
United Kingdom
Canada
Germany
Switzerland
Netherlands
France
Italy
Belgium
Japan
1992
3.70
9.56
6.76
9.42
7.67
9.25
10.14
13.91
9.31
4.39
1993
3.18
5.88
5.14
7.17
4.79
6.73
8.30
10.09
8.10
2.96
1994
4.63
5.45
5.57
5.25
4.03
5.09
5.72
8.45
5.65
2.24
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
6.23
6.50
7.86
5.04
3.95
5.09
5.76
9.10
5.29
2.31
6.14
6.68
8.14
5.00
3.77
5.03
5.70
9.07
5.33
2.27
6.15
6.61
8.32
4.96
3.62
5.03
7.77
10.98
6.21
2.11
6.13
6.64
8.16
4.58
3.33
4.60
7.60
10.94
5.22
1.55
6.03
6.64
7.56
4.49
3.29
4.41
7.29
10.38
5.16
1.31
5.89
6.63
7.07
4.43
3.09
4.21
7.04
10.91
4.62
1.16
5.79
6.73
6.69
4.46
2.77
4.14
6.31
10.93
4.52
.91
A66
3.28
International Statistics • September 1995
FOREIGN E X C H A N G E RATES 1
Currency units per dollar except as noted
1995
Country/currency unit
1992
1993
1994
Feb.
Mar.
Apr.
May
June
July
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
73.521
10.992
32.148
1.2085
5.5206
6.0372
4.4865
5.2935
1.5618
190.81
67.993
11.639
34.581
1.2902
5.7795
6.4863
5.7251
5.6669
1.6545
229.64
73.161
11.409
33.426
1.3664
8.6404
6.3561
5.2340
5.5459
1.6216
242.50
74.473
10.573
30.908
1.4005
8.4553
5.9302
4.6547
5.2252
1.5022
236.17
73.452
9.898
29.035
1.4077
8.4483
5.6281
4.3967
4.9756
1.4061
228.53
73.564
9.720
28.419
1.3762
8.4421
5.4391
4.2884
4.8503
1.3812
225.19
72.716
9.912
29.009
1.3609
8.3370
5.5194
4.3386
4.9869
1.4096
228.46
71.959
9.854
28.790
1.3775
8.3288
5.4604
4.3134
4.9172
1.4012
226.56
72.792
9.765
28.562
1.3612
8.3207
5.4073
4.2592
4.8307
1.3886
225.45
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
7.7402
28.156
170.42
232.17
126.78
2.5463
1.7587
53.792
6.2142
135.07
7.7357
31.291
146.47
1,573.41
111.08
2.5738
1.8585
54.127
7.1009
161.08
7.7290
31.394
149.69
1,611.49
102.18
2.6237
1.8190
59.358
7.0553
165.93
7.7314
31.380
156.20
1,620.58
98.24
2.5526
1.6844
63.448
6.5974
155.36
7.7318
31.587
159.76
1,688.99
90.52
2.5464
1.5774
64.598
6.2730
147.92
7.7336
31.407
162.80
1,710.89
83.69
2.4787
1.5474
66.723
6.2050
145.89
7.7351
31.418
161.98
1,652.78
85.11
2.4684
1.5779
66.740
6.2980
148.40
7.7356
31.404
162.87
1,639.75
84.64
2.4396
1.5686
66.947
6.2387
147.63
7.7385
31.385
163.96
1,609.71
87.40
2.4500
1.5557
67.417
6.1710
145.88
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
1.6294
2.8524
784.66
102.38
44.013
5.8258
1.4064
25.160
25.411
176.63
1.6158
3.2729
805.75
127.48
48.211
7.7956
1.4781
26.416
25.333
150.16
1.5275
3.5526
806.93
133.88
49.170
7.7161
1.3667
26.465
25.161
153.19
1.4541
3.5629
793.19
130.52
49.895
7.3914
1.2715
26.339
25.020
157.20
1.4216
3.6013
781.81
128.58
49.627
7.2787
1.1709
26.102
24.760
160.02
1.3986
3.6035
770.61
124.14
49.371
7.3455
1.1384
25.491
24.572
160.73
1.3947
3.6574
764.43
123.22
49.558
7.3072
1.1693
25.537
24.663
158.74
1.3953
3.6627
763.88
121.71
50.210
7.2631
1.1588
25.784
24.672
159.48
1.3984
3.6404
760.05
119.71
50.899
7.1749
1.1556
26.278
24.755
159.52
86.61
93.18
91.32
87.29
83.69
81.81
82.73
82.27
81.90
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 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).
A67
Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List Published
Semiannually,
with Latest Bulletin
Anticipated schedule of release dates for periodic releases
SPECIAL TABLES—Data Published
Irregularly,
with Latest Bulletin
Reference
Issue
June 1995
Page
A76
Issue
Page
Reference
Title and Date
Assets and liabilities of commercial banks
March 31, 1993
June 30, 1993
September 30, 1993
December 31, 1993
August
November
February
May
1993
1993
1994
1994
A70
A70
A70
A68
Terms of lending at commercial banks
August 1994
November 1994
February 1995
May 1995
November
February
May
August
1994
1995
1995
1995
A68
A68
A68
A68
Assets and liabilities of U.S. branches and agencies of foreign banks
June 30, 1994
September 30, 1994
December 31, 1994
March 31, 1995
November
February
May
August
1994
1995
1995
1995
A72
A72
A72
A72
January
August
October
August
1992
1992
1992
1995
A70
A80
A70
A76
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
All
Residential lending reported under the Home Mortgage Disclosure Act
1994
September 1995
A68
Pro forma balance sheet and income statements for priced service operations
September 30, 1991
March 31, 1992
June 30, 1992
March 31, 1995
A68
4.34
Special Tables • September 1995
RESIDENTIAL LENDING ACTIVITY OF FINANCIAL INSTITUTIONS COVERED BY HMDA, 1982-94
Number
Item
1 Loans or applications
(millions) 2
2 Reporting institutions
3 Disclosure
reports
1982
1983
1984
1985
1986
1987
1990 1
1989
1991
1992
1993
1994
1.13
1.71
1.86
1.98
2.83
3.42
3.39
3.13
6.59
7.89
12.01
15.38
12.19
8,258
11,357
8,050
10,970
8,491
11,799
8,072
12,567
8,898
12,329
9,431
13,033
9,319
13,919
9,203
14,154
9,332
24,041
9,358
25,934
9,073
28,782
9,650
35,976
9,858
38,750
1. Before 1990, includes only home purchase, home refinancing, and home improvement loans originated by covered institutions; beginning in 1990 (first year under revised
reporting system), includes such loans originated and purchased, applications approved
but not accepted by the applicant, applications denied or withdrawn, and applications
closed because information was incomplete.
4.35
1988
2. Revised from preliminary data published in Glenn B. Canner and Dolores S. Smith,
"Home Mortgage Disclosure Act: Expanded Data on Residential Lending," Federal
Reserve Bulletin, vol. 77 (November 1991), p. 861, to reflect corrections and the reporting
of additional data.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
APPLICATIONS FOR HOME LOANS REPORTED UNDER HMDA
By Type of Dwelling, Purpose of Loan, and Loan Program, 1994
Thousands
One- to four-family dwellings
Multifamily
dwellings
Loan program
Home purchase
1
2
3
4
FHA
VA
FmHA
Conventional
5 Total
Home improvement
All
709.9
293.4
10.5
4,186.3
333.7
160.0
.6
3,298.9
231.1
1.5
1,460.7
1,274.7
454.9
11.3
8,945.8
32.9
1,275.0
455.0
11.3
8,978.7
5,200.1
3,7933
1,693.4
10,686.7
33.2
10,719.9
*
•Fewer than 500.
1. Multifamily dwellings are those for five or more families.
4.36
All
Home refinancing
*
*
•
SOURCE. FFIEC, Home Mortgage Disclosure Act.
HOME LOANS ORIGINATED BY LENDERS REPORTING UNDER HMDA
By Type of Dwelling, Purpose of Loan, and Type of Lender, 1994
Percent
One- to four-family dwellings
VAguaranteed
1
2
3
4
Commercial bank . . .
Savings association..
Credit union
Mortgage company 2 ..
5 Total
Multifamily
dwellings'
Home purchase
Type of lender
Home
refinancing
FmHAinsured
Home
improvement
8.0
10.1
.2
81.8
8.6
9.7
1.3
80.4
28.7
14.7
.4
56.2
27.8
21.7
1.8
48.8
23.7
19.2
1.5
55.6
28.9
18.5
4.0
48.6
70.6
7.9
11.5
10.0
46.9
48.1
.4
4.6
100
100
100
100
100
100
100
100
519,102
7.3
218,052
3.1
7,215
2,795,162
39.4
3,539,531
49.8
2,519,793
35.5
1,018,973
14.3
MEMO
Distribution
6 Number
7 Percent
of loans
•Less than 0.05 percent.
1. Multifamily dwellings are those for five or more families.
.1
7,078,297
99.7
23,090
.3
2. Comprises all covered mortgage companies, including those affiliated with a commercial bank, savings association, or credit union.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
Home Mortgage Disclosure
4.37
A69
APPLICATIONS FOR LOANS FOR ONE- TO FOUR-FAMILY HOMES REPORTED UNDER HMDA
By Purpose of Loan and Characteristics of Applicant and Census Tract, 1994
Home purchase
Home refinancing
Government-backed
1
Home improvement
Conventional
Characteristic
MEMO
MEMO
Number
Percent
Percentage of
characteristic's
home purchase
loans
Number
Percent
Percentage of
characteristic's
home purchase
loans
Number
Percent
Number
Percent
APPLICANT
1
Racial/ethnic
identity
American Indian or
Alaskan Native . . .
Asian or Pacific
Islander
Black
Hispanic
White
Other
All
4,813
.5
18.0
21,887
.5
82.0
17,151
.5
9,163
.7
15,508
140,900
101,919
681,071
5,233
33,809
1.6
14.3
10.4
69.3
.5
3.4
10.7
36.0
31.7
17.2
13.7
27.5
128,992
250,267
219,844
3,290,026
33,041
89,021
3.2
6.2
5.5
81.6
.8
2.2
89.3
64.0
68.3
82.8
86.3
72.5
131,306
221,910
210,231
2,641,947
33,898
74,162
3.9
6.7
6.3
79.3
1.0
2.2
21,154
155,848
119,093
1,055,069
13,983
23,805
1.5
11.1
8.5
75.5
1.0
1.7
983,253
100.0
19.6
4,033,078
100.0
80.4
3,330,605
100.0
1,398,115
100.0
12 120 or more
335,912
175,207
124,250
183,607
41.0
21.4
15.2
22.4
29.3
30.3
25.0
12.0
809,920
402,921
372,468
1,345,089
27.6
13.7
12.7
45.9
70.7
69.7
75.0
88.0
689,658
375,005
353,399
1,307,272
25.3
13.8
13.0
48.0
476,650
189,000
164,184
456,154
37.1
14.7
12.8
35.5
13 Total
818,976
100.0
21.8
2,930,398
100.0
78.2
2,725,334
100.0
1,285,988
100.0
305,923
189,742
211,458
64,801
41,538
37.6
23.3
26.0
8.0
5.1
16.6
23.1
29.9
28.8
30.2
1,536,461
629,939
496,869
160,091
96,042
52.6
21.6
17.0
5.5
3.3
83.4
76.9
70.1
71.2
69.8
1,367,155
637,288
594,298
228,933
188,931
45.3
21.1
19.7
7.6
6.3
607,071
218,633
208,429
94,344
120,853
48.6
17.5
16.7
7.6
9.7
19 Total
813,462
100.0
21.8
2,919,402
100.0
78.2
3,016,605
100.0
1,249,330
100.0
Income 3
20 Low or moderate
21 Middle
22 Upper
139,723
481,747
201,450
17.0
58.5
24.5
28.3
24.9
15.3
354,253
1,449,151
1,118,982
12.1
49.6
38.3
71.7
75.1
84.7
435,193
1,543,198
1,064,330
14.3
50.7
35.0
272,252
671,206
337,594
21.3
52.4
26.4
23 Total
822,920
100.0
22.0
2,922,386
100.0
78.0
3,042,721
100.0
1,281,052
100.0
Location
24 Central city
25 Non-central city
385,292
447,405
46.3
53.7
25.2
19.7
1,145,411
1,829,464
38.5
61.5
74.8
80.3
1,215,509
1,872,041
39.4
60.6
579,087
730,295
44.2
55.8
26 Total
832,697
100.0
21.9
2,974,875
100.0
78.1
3,087,550
100.0
1,309382
100.0
2
3
4
5
6
7
8 Total
Income (percentage of
MSA median)2
9 Less than 80
10 8 0 - 9 9
11 1 0 0 - 1 1 9
CENSUS TRACT
Racial/ethnic
compostion
(minorities as
percentage of
population)
14 Less than 10
15
16
17
18
10-19
20-49
50-79
80-100
4
NOTE. Lenders reported 10,719,915 applications for home loans in 1994. Not all
characteristics were reported for all applications; thus the number of applications being
distributed by characteristic varies by characteristic.
1. Loans backed by the Federal Housing Administration, the Department of Veterans
Affairs, or the Farmers Home Administration.
2. MSA median is median family income of the metropolitan statistical area (MSA) in
which the property related to the loan is located.
3. Census tracts are categorized by the median family income for the tract relative to
the median family income for the MSA in which the tract is located. Categories are
defined as follows: Low or moderate income, median family income for census tract less
than 80 percent of median family income for MSA; Middle income, median family
income 80 percent to 120 percent of M S A median; Upper income, median family income
more than 120 percent of MSA median.
4. For census tracts located in MSAs.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
A68
4.38
Special Tables • September 1995
APPLICATIONS FOR LOANS FOR ONE- TO FOUR-FAMILY HOMES REPORTED UNDER HMDA
By Purpose of Loan, with Denial Rate, and by Characteristic of Applicant, 1994
Home purchase
Home refinancing
Applicant
characteristic1
Distribution
1
2
3
4
5
American Indian or Alaskan Native
One male
Two males
One female
Two females
One male and one female
6 Total3
7
8
9
10
11
Asian or Pacific Islander
One male
Two males
One female
Two females
One male and one female
12 Total3
13
14
15
16
17
Black
One male
Two males
One female
Two females
One male and one female
18 Total3
19
20
21
22
23
Hispanic
One male
Two males
One female
Two females
One male and one female
24 Total3
25
26
27
28
29
White
One male
Two males
One female
Two females
One male and one female
30 Total3
31
32
33
34
35
All
One male
Two males
One female
Two females
One male and one female
36 Total3
Denial rate
Distribution
Denial rate
1.42
22.92
5.95
40.90
15.39
17.65
14.08
13.29
16.08
26.06
1.47
25.44
3.37
43.66
33.82
35.31
34.76
26.16
28.71
24.66
1.39
20.53
2.93
50.49
18.63
18.14
18.50
17.23
15.43
27.59
.94
25.87
1.09
44.51
31.35
31.76
33.90
30.30
26.46
100.00
15.27
100.00
31.62
100.00
16.91
100.00
29.91
21.46
3.76
13.04
2.38
59.36
11.09
10.81
11.08
9.49
10.16
17.68
3.15
12.78
1.90
64.49
14.70
15.31
14.42
14.13
10.49
14.72
2.05
11.66
1.61
69.96
17.19
19.58
19.18
19.59
15.79
20.45
1.21
15.83
1.19
61.31
32.05
30.98
29.16
25.90
23.15
100.00
10.50
100.00
11.97
100.00
16.54
100.00
26.17
26.84
1.03
28.89
2.70
40.55
18.13
19.96
17.85
19.57
19.64
24.74
.91
33.53
2.48
38.34
34.81
33.94
35.06
37.18
30.77
21.06
.77
27.07
1.84
49.25
22.03
27.07
21.74
22.22
18.83
25.62
.49
36.32
1.73
35.84
37.60
40.21
38.33
38.61
32.22
100.00
18.76
100.00
33.44
100.00
20.44
100.00
35.98
19.97
6.13
10.30
2.04
61.56
12.97
8.61
14.17
12.70
12.79
21.27
3.87
14.12
2.00
58.74
27.89
24.91
25.67
24.99
23.09
16.40
1.80
14.24
1.33
66.22
20.19
25.52
18.72
20.61
19.52
27.37
1.07
21.20
.96
49.40
43.70
42.43
47.66
42.46
36.03
28.81
100.00
12.71
100.00
24.60
100.00
19.64
100.00
40.74
22.89
1.22
14.71
1.05
60.13
10.98
10.24
9.47
10.74
10.44
19.47
1.20
15.19
63.13
21.00
18.37
19.25
21.24
14.14
16.77
1.09
12.85
.76
68.53
14.50
15.53
12.64
13.59
10.26
20.35
.60
16.75
.75
61.55
22.25
23.74
22.37
24.92
16.20
100.00
10.43
100.00
16.40
100.00
11.37
100.00
18.58
23.17
1.77
16.36
1.45
57.25
12.43
10.53
12.05
13.50
11.70
19.89
1.39
16.28
1.21
61.23
22.42
19.90
21.66
23.39
15.22
17.00
1.15
13.90
.92
67.02
15.63
17.39
14.53
15.93
11.55
21.62
.64
19.42
.89
57.43
26.93
28.16
28.38
29.71
19.00
100.00
11.95
100.00
17.89
100.00
12.77
100.00
22.71
1.02
1. Applicants are categorized by race of first applicant listed on Loan Application
Register, except for joint white and minority applications, which are not shown in this
table.
2. Loans backed by the Federal Housing Administration, the Department of Veterans
Affairs, or the Farmers Home Administration.
Home improvement
Government-backed
3. Includes all applicants from racial or ethnic group regardless of whether gender was
reported.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
Home Mortgage Disclosure
4.39
APPLICATIONS FOR HOME LOANS REPORTED UNDER HMDA
A71
By Loan Program and Size of Dwelling, 1994
Percent
One- to four-family dwellings
1
2
3
4
5
Home
Home purchase
Type of loan
Approved
and
accepted
Approved
but not
accepted
Denied
Withdrawn
73.1
74.3
68.4
66.8
68.1
1.8
1.0
1.6
6.2
5.3
12.1
11.8
17.7
18.1
17.0
11.2
11.3
11.3
7.7
8.4
FHA
VA
FmHA
Conventional
All
1.8
1.6
1.0
1.2
1.3
refinancing
Total
Approved
and
accepted
Approved
but not
accepted
Denied
Withdrawn
100
100
100
100
100
60.9
72.4
78.9
66.7
66.4
5.9
4.1
2.2
5.0
5.1
8.5
6.4
6.8
15.9
14.8
18.4
13.8
11.5
10.3
11.2
Total
Approved
and
accepted
Approved
but not
accepted
Denied
Withdrawn
14.7
18.8
33.3
16.0
16.0
6.1
18.8
33.3
9.9
9.9
Total
6.3
3.3
.6
2.1
2.5
100
100
100
100
100
One- to four-family dwellings
Home improvement
1
2
3
4
5
Approved
and
accepted
Approved
but not
accepted
Denied
Withdrawn
30.4
20.9
50.8
64.9
60.2
17.2
1.6
4.6
5.3
6.9
37.5
6.0
27.7
24.6
26.3
10.4
69.9
16.9
4.5
5.3
FHA
VA
FmHA
Conventional
AU
4.5
1.6
#
.8
1.3
NOTE. Loans approved and accepted were approved by the lender and accepted by the
applicant. Loans approved but not accepted were approved by the lender but not accepted
by the applicant. Applications denied were denied by the lender, and applications
withdrawn were withdrawn by the applicant. When an application was left incomplete by
the applicant, the lender reported file closed and took no further action.
100
100
100
100
100
75.9
62.5
2.4
*
16.7
3.1
3.1
69.6
69.6
*
*Less than 0.05 percent,
1. Multifamily dwellings are those for five or more families,
SOURCE. FFIEC, Home Mortgage Disclosure Act.
Total
*
.8
16.7
1.4
1.4
100
100
100
100
100
A68
4.40
Special Tables • September 1995
APPLICATIONS FOR ONE- TO FOUR-FAMILY HOME LOANS REPORTED UNDER HMDA
By Disposition of Loan and Characteristics of Applicant and Census Tract, 1994
A.
Home Purchase Loans
Percent
Government-backed
1
Conventional
Cnaractenstic
Approved
Denied
Withdrawn
File closed
Total
Approved
Denied
Withdrawn
File closed
Total
70.2
76.4
67.1
73.0
78.2
68.6
76.4
15.3
10.5
18.8
12.7
10.4
15.0
11.7
12.6
11.8
12.0
12.4
10.1
14.6
10.8
1.9
1.3
2.2
2.0
1.3
1.8
1.1
100
100
100
100
100
100
100
58.0
76.6
57.3
65.0
75.6
65.0
73.6
31.6
12.0
33.4
24.6
16.4
23.8
17.2
9.2
10.0
7.6
8.6
7.1
9.5
8.2
1.2
1.5
1.7
1.7
.9
1.6
1.0
100
100
100
100
100
100
100
APPLICANT
1
2
3
4
5
6
7
Racial or ethnic identity
American Indian or
Alaskan Native
Asian or Pacific Islander..
Black
Hispanic
White
Other
Joint 2
Income ratio (percentage
of MSA median)3
8 Less than 80
American Indian or
9
Alaskan Native . . .
10
Asian or Pacific
Islander
11
Black
12
Hispanic
13
White
14
Other
15
Joint 2
16 8 0 - 9 9
17
American Indian or
Alaskan Native . . .
18
Asian or Pacific
Islander
19
Black
20
Hispanic
21
White
Other
22
23
Joint 2
24 100-119
25
American Indian or
Alaskan Native . . .
26
Asian or Pacific
Islander
27
Black
28
Hispanic
29
White
30
Other
31
Joint 2
32 120 or more
33
American Indian or
Alaskan Native . . .
34
Asian or Pacific
Islander
35
Black
36
Hispanic
37
White
38
Other
39
Joint 2
75.9
13.1
9.8
1.3
100
69.2
22.7
7.1
1.0
100
71.7
15.8
10.8
1.7
100
59.8
30.5
8.7
1.1
100
77.3
67.9
73.6
79.1
70.4
74.4
81.1
11.1
19.1
13.9
11.0
14.5
14.4
9.3
10.5
11.1
10.9
8.9
13.7
10.2
8.7
1.1
1.9
1.6
1.0
1.3
1.0
1.0
100
100
100
100
100
100
100
74.6
59.8
64.0
71.7
62.7
64.4
77.8
15.0
30.5
27.0
21.0
27.9
27.6
13.7
9.1
7.9
7.6
6.5
8.2
7.2
7.5
1.3
1.8
1.4
.8
1.2
.8
1.0
100
100
100
100
100
100
100
75.9
11.3
11.8
.9
100
70.3
19.2
9.5
1.0
100
79.6
73.2
78.1
83.6
73.8
81.0
81.9
8.9
15.0
10.8
7.7
15.0
9.7
8.5
10.6
10.2
10.0
8.0
9.5
8.8
8.6
.9
1.6
1.1
.8
1.6
.6
1.0
100
100
100
100
100
100
100
78.5
67.1
69.4
80.5
70.9
74.8
80.5
11.1
22.2
20.7
11.9
17.8
17.1
11.0
9.2
8.9
8.4
6.8
9.6
7.5
7.5
1.2
1.8
1.5
.8
1.7
.6
1.1
100
100
100
100
100
100
100
77.7
10.4
10.8
1.1
100
72.2
15.8
10.6
1.3
100
79.2
74.4
78.1
84.3
77.8
81.4
81.5
8.3
14.3
10.0
7.1
9.7
8.9
8.2
11.3
9.8
10.6
7.8
11.3
8.9
9.4
1.2
1.5
1.3
.8
1.1
.8
1.0
100
100
100
100
100
100
100
79.3
69.8
71.1
82.9
72.6
78.8
83.2
10.4
19.0
18.6
9.5
15.0
12.6
7.8
9.0
9.4
8.5
6.9
10.5
7.9
7.9
1.3
1.9
1.8
.8
1.9
.7
1.1
100
100
100
100
100
100
100
76.1
12.4
11.0
.5
100
73.3
12.3
13.0
1.4
100
79.5
75.2
76.3
84.0
72.5
81.4
9.0
13.3
10.0
6.7
11.9
8.4
10.5
10.0
12.4
8.5
14.4
9.4
.9
1.4
1.3
.8
1.2
.8
100
100
100
100
100
100
78.7
73.5
74.4
85.1
74.4
81.9
10.0
15.1
14.1
6.7
12.3
9.2
9.9
9.5
9.7
7.3
11.6
8.0
1.4
1.9
1.7
.9
1.8
.9
100
100
100
100
100
100
81.6
79.6
76.7
72.4
68.9
9.0
10.0
11.6
14.3
15.9
8.2
9.2
10.3
11.3
12.8
1.1
1.3
1.5
2.0
2.4
100
100
100
100
100
81.7
77.6
73.0
68.6
63.3
10.5
13.0
16.8
20.4
24.3
6.9
8.2
8.8
9.4
10.2
.9
1.2
1.4
1.7
2.2
100
100
100
100
100
Income4
45 Low or moderate
46 Middle
47 Upper
73.5
79.2
79.8
13.9
10.3
9.2
10.8
9.1
9.6
1.8
1.3
1.4
100
100
100
68.4
77.2
82.1
21.6
14.4
8.7
8.4
7.4
8.1
1.5
1.1
1.1
100
100
100
Location5
48 Central city
49 Non-central city
76.8
79.6
11.8
9.7
9.7
9.4
1.6
1.4
100
100
76.5
78.8
14.3
12.5
8.0
7.6
1.2
1.1
100
100
CENSUS TRACT
40
41
42
43
44
Racial or ethnic
composition
(minorities as
percentage of
population)
Less than 10
10-19
20-49
50-79
80-100
Home Mortgage Disclosure
4.40
A73
APPLICATIONS FOR ONE- TO FOUR-FAMILY HOME LOANS REPORTED UNDER HMDA
By Disposition of Loan and Characteristics of Applicant and Census Tract, 1994—Continued
B.
Home Refinancing and Home Improvement Loans
Percent
Home improvement
Home refinancing
Characteristic
Approved
Denied
Withdrawn
File closed
Total
Approved
Denied
Withdrawn
File closed
Total
66.4
68.9
63.9
63.6
77.9
55.8
73.0
16.9
16.5
20.4
19.6
11.4
23.6
14.9
14.7
12.1
12.3
13.3
8.8
18.2
10.0
2.1
2.5
3.4
3.5
1.9
2.3
2.0
100
100
100
100
100
100
100
64.7
65.0
58.4
54.6
76.9
63.7
73.7
29.9
26.2
36.0
40.7
18.6
30.0
21.3
4.0
6.3
4.2
3.5
3.9
5.3
4.0
1.4
2.5
1.5
1.1
.7
1.0
1.0
100
100
100
100
100
100
100
65.9
20.9
11.0
2.2
100
59.0
34.8
4.7
1.4
100
63.8
21.6
13.0
1.5
100
59.0
35.7
4.4
1.0
100
64.0
59.6
60.2
74.3
48.1
68.3
72.2
20.9
25.5
26.3
15.3
31.4
21.0
15.7
12.8
12.2
11.2
8.9
18.5
9.2
10.1
2.3
2.6
2.3
1.5
2.0
1.4
2.0
100
100
100
100
100
100
100
56.1
53.2
50.8
70.1
49.1
62.7
68.5
36.3
41.3
44.0
25.3
41.9
31.9
25.4
5.1
4.1
3.8
3.9
7.9
4.2
4.9
2.5
1.5
1.5
.7
1.1
1.2
1.2
100
100
100
100
100
100
100
APPLICANT
1
2
3
4
5
6
7
Racial or ethnic identity
American Indian or
Alaskan Native
Asian or Pacific Islander..
Black
Hispanic
White
Other
Joint 2
Income ratio (percentage
of MSA median)}
8 Less than 80
9
American Indian or
Alaskan Native . . .
10
Asian or Pacific
Islander
11
Black
12
Hispanic
13
White
14
Other
15
Joint 2
16 80-99
17
American Indian or
Alaskan Native . . .
18
Asian or Pacific
Islander
19
Black
20
Hispanic
21
White
22
Other
23
Joint 2
24 100-119
25
American Indian or
Alaskan Native . . .
26
Asian or Pacific
Islander
27
Black
28
Hispanic
29
White
30
Other
31
Joint 2
32 120 or more
33
American Indian or
Alaskan Native . . .
34
Asian or Pacific
Islander
35
Black
36
Hispanic
37
White
38
Other
39
Joint 2
67.2
17.2
13.7
1.8
100
69.2
25.8
3.6
1.4
100
69.3
63.6
62.5
78.8
55.6
73.0
74.0
16.5
21.7
23.8
11.6
23.6
16.5
14.3
11.8
11.8
11.3
8.1
18.4
9.2
9.8
2.3
2.9
2.4
1.4
2.4
1.3
1.9
100
100
100
100
100
100
100
63.7
60.1
55.1
77.7
59.4
72.2
71.5
27.6
34.3
40.0
18.0
32.5
22.8
22.5
6.7
4.1
3.7
3.6
7.4
4.2
4.8
2.0
1.5
1.2
.7
.6
.7
1.2
100
100
100
100
100
100
100
67.8
16.6
13.9
1.7
100
72.4
23.1
2.7
1.8
100
69.6
65.6
62.6
79.9
57.5
74.2
76.0
16.4
20.2
23.0
10.8
23.0
15.3
12.5
11.9
11.5
12.2
7.9
17.5
9.1
9.6
2.1
2.7
2.2
1.3
2.0
1.3
1.8
100
100
100
100
100
100
100
68.9
62.9
54.5
80.1
63.8
74.8
76.0
22.5
31.2
40.8
15.7
29.5
20.5
18.1
6.4
4.5
3.7
3.5
5.1
3.8
4.7
2.2
1.4
1.1
.6
1.6
.8
1.2
100
100
100
100
100
100
100
67.5
16.6
13.9
2.0
100
75.3
20.1
4.1
.6
100
70.0
67.0
66.7
80.2
60.7
74.3
16.2
19.6
17.3
10.2
20.9
14.8
11.4
11.0
14.0
8.2
16.1
9.4
2.3
2.4
2.0
1.4
2.2
1.5
100
100
100
100
100
100
70.2
67.9
58.6
83.7
68.8
78.8
20.8
26.6
37.5
12.0
23.5
16.5
6.7
4.2
3.1
3.6
5.8
3.6
2.3
1.3
.8
.7
1.9
1.0
100
100
100
100
100
100
77.3
71.4
67.3
62.2
56.4
11.4
14.7
17.3
21.0
25.7
9.3
11.2
12.5
13.6
14.6
2.0
2.6
2.9
3.1
3.4
100
100
100
100
100
75.9
68.6
62.4
55.8
51.0
18.8
24.6
30.2
36.8
41.6
4.6
5.2
5.4
5.4
5.3
.7
1.6
1.9
2.0
2.1
100
100
100
100
100
Income4
45 Low or moderate
46 Middle
47 Upper
62.7
72.1
74.7
21.3
14.5
12.5
12.9
10.9
10.5
3.1
2.5
2.3
100
100
100
56.8
69.5
73.3
36.7
24.6
20.3
4.9
4.8
5.0
1.6
1.1
1.3
100
100
100
Location5
48 Central city
49 Non-central city
69.4
73.2
16.0
13.9
11.8
10.5
2.8
2.3
100
100
64.7
70.4
29.1
23.6
4.8
4.9
1.4
1.1
100
100
CENSUS TRACT
40
41
42
43
44
Racial or ethnic
composition
(minorities as
percentage of
population)
Less than 10
10-19
20-49
50-79
80-100
NOTE. Applicant income ratio is applicant income as a percentage of MSA median.
MSA median is median family income of the metropolitan statistical area (MSA) in which
the property related to the loan is located.
1. Loans backed by the Federal Housing Administration, the Department of Veterans
Affairs, or the Fanners Home Administration.
2. White and minority.
3. MSA median is median family income of the metropolitan statistical area (MSA) in
which the property related to the loan is located.
4. Census tracts are categorized by the median family income for the tract relative to
the median family income for the MSA in which the tract is located. Categories are
defined as follows: Low or moderate income, median family income for census tract less
than 80 percent of median family income for MSA; Middle income, median family
income 80 percent to 120 percent of MSA median; Upper income, median family income
more than 120 percent of MSA median.
5. For census tracts located in MSAs.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
A68
4.41
Special Tables • September 1995
HOME LOANS SOLD
By Purchaser and Characteristics of Borrower and Census Tract, 1994
Fannie Mae
Ginnie Mae
Freddie Mac
FmHA
Commercial bank
Characteristic
Number
Percent
Number
Percent
Number
Percent
Number
Percent
Number
Percent
1,025,443
100.0
961,032
100.0
760,122
100.0
1,603
100.0
125,283
100.0
4,543
38,623
38,223
47,891
773,373
7,092
21,073
.5
4.1
4.1
5.1
83.1
.8
2.3
3,035
11,899
74,361
68,891
483,374
3,299
22,097
.5
1.8
11.1
10.3
72.5
.5
3.3
2,269
29,862
20,748
29,906
582,623
4,754
14,655
.3
4.4
3.0
4.4
85.1
.7
2.1
176
73
62
168
999
19
41
11.4
4.7
4.0
10.9
65.0
1.2
2.7
308
2,045
8,750
6,000
75,391
710
2,337
.3
2.1
9.2
6.3
78.9
930,818
100.0
666,956
100.0
684,817
100.0
1,538
100.0
95,541
100.0
174,989
119,941
116,102
359,939
22.7
15.6
15.1
46.7
160,818
92,930
69,980
111,192
37.0
21.4
16.1
25.6
123,004
82,417
84,394
270,028
22.0
14.7
15.1
48.2
413
242
142
316
37.1
21.7
12.8
28.4
27,543
15,219
13,300
37,606
29.4
16.2
14.2
40.1
770,971
100.0
434,920
100.0
559,843
100.0
1,113
100.0
93,668
100.0
441,011
181,678
144,495
47,231
27,525
52.4
21.6
17.2
5.6
3.3
306,164
199,736
214,820
63,633
36,909
37.3
24.3
26.2
7.7
4.5
328,303
127,269
98,616
30,035
16,187
54.7
21.2
16.4
5.0
2.7
451
284
313
122
104
35.4
22.3
24.6
9.6
8.2
51,608
22,723
21,260
6,817
6,287
47.5
20.9
19.6
6.3
5.8
20 Total
841,940
100.0
821,262
100.0
600,410
100.0
1,274
100.0
108,695
100.0
Income
21 Low or moderate
22 Middle
23 Upper
80,809
427,108
334,407
9.6
50.7
39.7
124,825
492,475
216,330
15.0
59.1
26.0
52,230
304,182
244,843
8.7
50.6
40.7
239
746
290
18.7
58.5
22.7
14,940
57,247
36,927
13.7
52.5
33.8
24 Total
842,324
100.0
833,630
100.0
601,255
100.0
1,275
100.0
109,114
100.0
Location
25 Central city
26 Non-central city
323,485
519,449
38.4
61.6
380,302
453,733
45.6
54.4
215,715
386,040
35.8
64.2
561
716
43.9
56.1
42,338
66,883
38.8
61.2
27 Total
842,934
100.0
834,035
100.0
601,755
100.0
1,277
100.0
109,221
100.0
1 All
BORROWER
2
3
4
5
6
7
8
Racial or ethnic identity
American Indian or Alaskan Native . . . .
Asian or Pacific Islander
Black
Hispanic
White
Other
Joint
9 Total
10
11
12
13
Income ratio (percentage
median)
Less than 80
80-99
100-119
120 or more
.7
2.4
of MSA
14 Total
CENSUS TRACT
15
16
17
18
19
Racial or ethnic composition
(minorities
as percentage of population)
Less than 10
10-19
20-49
50-79
80-100
Home Mortgage Disclosure
4.41
HOME LOANS SOLD
A75
By Purchaser and Characteristics of Borrower and Census Tract, 1994—Continued
Savings bank or savings and
loan association
Other
Affiliate
Life insurance company
Characteristic
Number
Percent
Number
Percent
Number
Percent
Number
Percent
63,459
100.0
16,868
100.0
497,015
100.0
1,045,211
100.0
6 White
7 Other
8 Joint
219
1,905
3,077
2,894
48,673
343
1,394
.4
3.3
5.3
4.9
83.2
.6
2.4
58
350
1,618
796
11,642
79
361
.4
2.3
10.9
5.3
78.1
.5
2.4
1,673
10,498
26,779
19,312
356,188
2,763
9,049
.4
2.5
6.3
4.5
83.6
.6
2.1
5,290
31,220
76,879
63,234
740,792
8,822
25,981
.6
3.3
8.1
6.6
77.8
.9
2.7
9 Total
58,505
100.0
14,904
100.0
426,262
100.0
952,218
100.0
11,788
7,159
6,994
24,456
23.4
14.2
13.9
48.5
3,831
2,527
2,028
5,212
28.2
18.6
14.9
38.3
80,604
46,062
41,872
169,502
23.8
13.6
12.4
50.1
208,939
112,094
96,334
350,578
27.2
14.6
12.5
45.7
50,397
100.0
13,598
100.0
338,040
100.0
767,945
100.0
28,596
10,982
8,609
2,656
1,564
54.6
21.0
16.4
5.1
3.0
6,981
3,909
3,354
867
553
44.6
25.0
21.4
5.5
3.5
206,424
76,841
53,075
14,589
9,277
57.3
21.3
14.7
4.1
2.6
361,905
197,205
176,732
55,183
41,639
43.5
23.7
21.2
6.6
5.0
20 Total
52,407
100.0
15,664
100.0
360,206
100.0
832,664
100.0
22 Middle
23 Upper
5,556
25,614
21,843
10.5
48.3
41.2
1,852
8,529
5,249
11.8
54.6
33.6
37,484
171,518
153,729
10.3
47.3
42.4
111,394
407,196
315,349
13.4
48.8
37.8
24 Total
53,013
100.0
15,630
100.0
362,731
100.0
833,939
100.0
26 Non-central city
18,593
34,534
35.0
65.0
6,043
9,622
38.6
61.4
135,175
227,929
37.2
62.8
337,948
497,479
40.5
59.5
27 Total
53,127
100.0
15,665
100.0
363,104
100.0
835,427
100.0
1 All
BORROWER
Racial or ethnic identity
2 American Indian or Alaskan Native . . . .
3 Asian or Pacific Islander
4 Black
10
11
12
13
Income ratio (percentage of MSA
median)
Less than 80
80-99
100-119
120 or more
14 Total
CENSUS TRACT
15
16
17
18
19
Racial or ethnic composition
(minorities
as percentage of population)
Less than 10
10-19
20-49
50-79
80-100
NOTE. Includes securitized loans. See also notes to table 4.40.
Fannie Mae—Federal National Mortgage Association
Ginnie Mae—Government National Mortgage Association
Freddie Mac—Federal Home Loan Mortgage Corporation
FmHA—Fanners Home Administration
Affiliate—Affiliate of institution reporting the loan
SOURCE. FFIEC, Home Mortgage Disclosure Act.
A76
Index to Statistical Tables
References
are to pages A3-A75
although
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 21, 22
Assets and liabilities (See also Foreigners)
Banks, by classes, 18-23
Domestic finance companies, 36
Federal Reserve Banks, 11
Financial institutions, 28
Foreign banks, U.S. branches and agencies, 23
Automobiles
Consumer installment credit, 39
Production, 47, 48
BANKERS acceptances, 11, 12, 21-24, 26
Bankers balances, 18-23. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 34
Rates, 26
Branch banks, 23
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, 18
Federal Reserve Banks, 11
Central banks, discount rates, 65
Certificates of deposit, 26
Commercial and industrial loans
Commercial banks, 21, 22
Weekly reporting banks, 21-23
Commercial banks
Assets and liabilities, 18-23
Commercial and industrial loans, 18-23
Consumer loans held, by type and terms, 39
Deposit interest rates of insured, 16
Loans sold outright, 22
Real estate mortgages held, by holder
and property, 38, 74
Time and savings deposits, 4
Commercial paper, 24, 26, 36
Condition statements (See Assets and liabilities)
Construction, 45,49
Consumer installment credit, 39
Consumer prices, 45
Consumption expenditures, 52, 53
Corporations
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, 18-23
Ownership by individuals, partnerships, and
corporations, 22, 23
Turnover, 17
the prefix "A" is omitted
in this index
Depository institutions
Reserve requirements, 9
Reserves and related items, 4, 5, 6, 13
Deposits (See also specific types)
Banks, by classes, 4, 18—23
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
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 33
Federal funds, 7, 21, 22, 23, 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, 24, 26
Financial institutions, loans to, 21, 22, 23
Float, 5
Flow of funds, 40-44
Foreign banks, assets and liabilities of U.S. branches
and agencies, 22, 23
Foreign currency operations, 11
Foreign deposits in U.S. banks, 5, 22
Foreign exchange rates, 66
Foreign trade, 54
Foreigners
Claims on, 55, 58, 59, 60, 62
Liabilities to, 22, 54, 55, 56, 61, 63, 64
GOLD
Certificate account, 11
Stock, 5, 54
Government National Mortgage Association, 33, 37, 38
Gross domestic product, 51
A77
HOME Mortgage Disclosure Act
Applications for home loans, 68-73
Home loans by lenders, 68, 74, 75
Residential lending by financial institutions, 68, 71, 74, 75
Home refinancing and improvement loans, 73
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, 65
Money and capital markets, 26
Mortgages, 37
Prime rate, 25
International capital transactions of United States, 53-65
International organizations, 55, 56, 58, 61, 62
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 18-23
Commercial banks, 4, 18-23
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, 18—23
Commercial banks, 18-23, 74, 75
Conventional, 68, 71
Fannie Mae, 74
Federal Reserve Banks, 5, 6, 8, 11, 12
FHA, 68, 71
Financial institutions, 38
FmHA, 68, 71, 74
Freddie Mac, 74
Ginnie Mae, 74
Home purchase, 72
Insured or guaranteed by United States, 37, 38
VA, 68,71
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, 21, 22, 38
Terms, yields, and activity, 37
Type of holder and property mortgaged, 38
Repurchase agreements, 7
Reserve requirements, 9
Reserves
Commercial banks, 18
Depository institutions, 4, 5, 6, 13
Federal Reserve Banks, 11
U.S. reserve assets, 54
Residential mortgage loans, 37, 68-75
Retail credit and retail sales, 39, 45
SAVING
Flow of funds, 40-44
National income accounts, 51
Savings institutions, 38, 39, 40
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 63
New issues, 34
Prices, 27
Special drawing rights, 5, 11, 53, 54
State and local governments
Deposits, 21, 22
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 21, 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
institutions)
Time and savings deposits, 4, 14, 16, 18-23
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, 18-23
Treasury deposits at Reserve Banks, 5, 11, 28
U.S. government securities
Bank holdings, 18-23, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 5, 11, 12, 30
Foreign and international holdings and
transactions, 11, 30, 64
Open market transactions, 10
Outstanding, by type and holder, 30, 31
Rates, 26
U.S. international transactions, 53-66
Utilities, production, 48
VETERANS Administration, 37, 38
WEEKLY reporting banks, 18-23
Wholesale (producer) prices, 45, 50
YIELDS (See Interest rates)
A78
Federal Reserve Board of Governors
and Official Staff
ALAN GREENSPAN, Chairman
ALAN S. BLINDER, Vice Chairman
OFFICE OF BOARD
DIVISION OF INTERNATIONAL
MEMBERS
JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant
EDWARD W. KELLEY, JR.
LAWRENCE B . LINDSEY
to the Board
to the Board
THEODORE E. ALLISON, Assistant to the Board for Federal
Reserve System Affairs
LYNN S. FOX, Deputy Congressional Liaison
WINTHROP P. HAMBLEY, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board
PORTIA W. THOMPSON, Equal Employment Opportunity
Programs Adviser
EDWIN M. TRUMAN, Staff
LARRY J. PROMISEL, Senior Associate Director
CHARLES J. SIEGMAN, Senior Associate Director
DALE W. HENDERSON, Associate Director
DAVID H. HOWARD, Senior
Adviser
DONALD B. ADAMS, Assistant
Director
THOMAS A. CONNORS, Assistant
Director
PETER HOOPER III, Assistant
Director
KAREN H. JOHNSON, Assistant Director
CATHERINE L. MANN, Assistant Director
RALPH W. SMITH, JR., Assistant
LEGAL
FINANCE
Director
Director
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
ROBERT DEV. FRIERSON, Assistant General Counsel
KATHERINE H. WHEATLEY, Assistant General Counsel
OFFICE OF THE SECRETARY
WILLIAM W . WILES,
Secretary
JENNIFER J. JOHNSON, Deputy Secretary
BARBARA R. LOWREY, Associate Secretary and Ombudsman
DAY W. RADEBAUGH, JR., Assistant Secretary1
DIVISION OF BANKING
SUPERVISION AND REGULATION
RICHARD SPILLENKOTHEN,
Director
STEPHEN C. SCHEMERING, Deputy
DON E. KLINE, Associate
Director
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
WILLIAM SCHNEIDER, Project
Director,
National Information Center
1. On loan from the Division of Information Resources Management
DIVISION OF RESEARCH AND
MICHAEL J. PRELL,
STATISTICS
Director
EDWARD C. ETTIN, Deputy
Director
DAVID J. STOCKTON, Deputy Director
MARTHA BETHEA, Associate
Director
WILLIAM R. JONES, Associate
Director
MYRON L. KWAST, Associate
Director
PATRICK M. PARKINSON, Associate
Director
THOMAS D. SIMPSON, Associate
Director
LAWRENCE SLIFMAN, Associate Director
MARTHA S. SCANLON, Deputy Associate Director
PETER A. TINSLEY, Deputy Associate Director
FLINT BRAYTON, Assistant Director
DAVID S. JONES, Assistant
Director
STEPHEN A. RHOADES, Assistant
Director
CHARLES S. STRUCKMEYER, Assistant
Director
ALICE PATRICIA WHITE, Assistant
JOYCE K. ZICKLER, Assistant
JOHN J. MINGO, Senior
G L E N N B . CANNER,
Adviser
Adviser
DIVISION OF MONETARY
DONALD L . KOHN,
Director
Director
AFFAIRS
Director
DAVID E. LINDSEY, Deputy Director
BRIAN F. MADIGAN, Associate Director
RICHARD D. PORTER, Deputy Associate Director
VINCENT R. REINHART, Assistant
Director
NORMAND R. V. BERNARD, Special Assistant to the Board
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
GRIFFITH L . GARWOOD,
Director
GLENN E. LONEY, Associate
Director
DOLORES S. SMITH, Associate
Director
MAUREEN P. ENGLISH, Assistant
Director
IRENE SHAWN M C N U L T Y , Assistant
Director
SUSAN M . PHILLIPS
JANET L. YELLEN
OFFICE OF
STAFF DIRECTOR
FOR
S. DAVID FROST, Staff
MANAGEMENT
CLYDE H . FARNSWORTH, JR.,
Director
SHEILA CLARK, EEO Programs
DIVISION OF HUMAN
MANAGEMENT
DAVID L . S H A N N O N ,
Director
RESOURCES
Director
JOHN R. WEIS, Associate
OFFICE OF THE
Director
Director
Director
CONTROLLER
GEORGE E . LIVINGSTON,
STEPHEN J. CLARK, Assistant Controller (Programs and
Budgets)
DARRELL R. PAULEY, Assistant Controller (Finance)
DIVISION
OF SUPPORT
ROBERT E . FRAZIER,
SERVICES
Director
GEORGE M. LOPEZ, Assistant
Director
DAVID L. WILLIAMS, Assistant
Director
DIVISION OF INFORMATION
MANAGEMENT
STEPHEN R . MALPHRUS,
RESOURCES
Director
MARIANNE M. EMERSON, Assistant Director
Po KYUNG KIM, Assistant Director
RAYMOND H. MASSEY, Assistant
EDWARD T. MULRENIN, Assistant
ELIZABETH B. RIGGS, Assistant
RICHARD C. STEVENS, Assistant
Director
LOUISE L. ROSEMAN, Associate
Director
CHARLES W. BENNETT, Assistant
Director
JACK DENNIS, JR., Assistant
Director
Director
Director
Director
Director
Director
JEFFREY C. MARQUARDT, Assistant
JOHN H. PARRISH, Assistant
Director
Director
FLORENCE M. YOUNG, Assistant
Director
OFFICE OF THE INSPECTOR
BRENT L. BOWEN, Inspector
Controller
OPERATIONS
DAVID L. ROBINSON, Deputy Director (Finance and
Control)
EARL G. HAMILTON, Assistant
Director
ANTHONY V. DIGIOIA, Assistant
JOSEPH H. HAYES, JR., Assistant
FRED HOROWITZ, Assistant
DIVISION OF RESERVE BANK
AND PAYMENT SYSTEMS
GENERAL
General
DONALD L. ROBINSON, Assistant Inspector General
BARRY R. SNYDER, Assistant Inspector General
A80
Federal Reserve Bulletin • September 1995
Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN, Chairman
WILLIAM J. MCDONOUGH, Vice
A L A N S. BLINDER
LAWRENCE B . LINDSEY
THOMAS M . HOENIG
THOMAS C . MELZER
SUSAN M . PHILLIPS
EDWARD W . KELLEY, JR.
CATHY E . MINEHAN
JANET L . YELLEN
ALTERNATE
EDWARD G . BOEHNE
ROBERT D . MCTEER
JERRY L . JORDAN
ERNEST T. PATRIKIS
MICHAEL H . MOSKOW
MEMBERS
GARY H . STERN
STAFF
WILLIAM G. DEWALD, Associate
Economist
WILLIAM C. HUNTER, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
DONALD L. KOHN, Secretary and
Economist
NORMAND R.V. BERNARD, Deputy
Secretary
JOSEPH R. COYNE, Assistant
Secretary
GARY P. GILLUM, Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General
Counsel
FREDERIC S. MISHKIN, Associate
Economist
THOMAS C. BAXTER, JR., Deputy General Counsel
LARRY J. PROMISEL, Associate
CHARLES J. SIEGMAN, Associate
Economist
Economist
MICHAEL J. PRELL,
LAWRENCE SLIFMAN, Associate
Economist
DAVID J. STOCKTON, Associate
Economist
Economist
EDWIN M . TRUMAN,
Economist
LYNN E. BROWNE, Associate
THOMAS E. DAVIS, Associate
CARL E . VANDER WILT, Associate
Economist
Economist
Economist
PETER R. FISHER, Manager, System Open Market Account
FEDERAL ADVISORY
COUNCIL
ANTHONY P. TERRACCIANO,
President
MARSHALL N. CARTER, Vice
President
ROGER L. FITZSIMONDS, Seventh District
ANDREW B. CRAIG, III, Eighth District
RICHARD M. KOVACEVICH, Ninth District
CHARLES E. NELSON, Tenth District
CHARLES R. HRDLICKA, Eleventh District
EDWARD A. CARSON, Twelfth District
MARSHALL N. CARTER, First District
WALTER V. SHIPLEY, Second District
ANTHONY P. TERRACCIANO, Third District
FRANK V. CAHOUET, Fourth District
RICHARD G. TILGHMAN, Fifth District
CHARLES E. RICE, Sixth District
HERBERT V. PROCHNOW, Secretary
JAMES ANNABLE,
WILLIAM J. KORSVIK,
Emeritus
Co-Secretary
Co-Secretary
Chairman
CONSUMER ADVISORY
COUNCIL
JAMES L. WEST, Tijeras, New Mexico, Chairman
KATHARINE W. MCKEE, Durham, North Carolina, Vice Chairman
D . DOUGLAS BLANKE, St. P a u l , M i n n e s o t a
THOMAS L . HOUSTON, D a l l a s , T e x a s
THOMAS R . BUTLER, R i v e r w o o d s , I l l i n o i s
TERRY JORDE, Cando, North Dakota
ROBERT A . COOK, B a l t i m o r e , M a r y l a n d
EUGENE I. LEHRMANN, M a d i s o n , W i s c o n s i n
ALVIN J. COWANS, O r l a n d o , F l o r i d a
RONALD A . PRILL, M i n n e a p o l i s , M i n n e s o t a
MICHAEL FERRY, St. L o u i s , M i s s o u r i
LISA RICE-COLEMAN, T o l e d o , O h i o
ELIZABETH G . FLORES, L a r e d o , T e x a s
JOHN R . RINES, D e t r o i t , M i c h i g a n
EMANUEL FREEMAN, P h i l a d e l p h i a , P e n n s y l v a n i a
JULIA M . SEWARD, R i c h m o n d , V i r g i n i a
NORMA L . FREIBERG, N e w O r l e a n s , L o u i s i a n a
A N N E B . SHLAY, P h i l a d e l p h i a , P e n n s y l v a n i a
DAVID C . FYNN, C l e v e l a n d , O h i o
REGINALD J. SMITH, Kansas City, Missouri
LORI GAY, LOS Angeles, California
JOHN E. TAYLOR, W a s h i n g t o n , D . C .
ROBERT G . GREER, H o u s t o n , T e x a s
LORRAINE VANETTEN, T r o y , M i c h i g a n
KENNETH R. HARNEY, Chevy Chase, Maryland
GRACE W . WEINSTEIN, E n g l e w o o d , N e w J e r s e y
GAIL K . HILLEBRAND, S a n F r a n c i s c o , C a l i f o r n i a
LILY K. YAO, Honolulu, Hawaii
RONALD A . HOMER, B o s t o n , M a s s a c h u s e t t s
ROBERT O . ZDENEK, N e w a r k , N e w J e r s e y
THRIFT INSTITUTIONS ADVISORY
COUNCIL
CHARLES JOHN KOCH, C l e v e l a n d , O h i o ,
President
STEPHEN D. TAYLOR, Miami, Florida, Vice President
E. LEE BEARD, Hazleton, Pennsylvania
DAVID F. HOLLAND, B u r l i n g t o n , M a s s a c h u s e t t s
JOHN E . BRUBAKER, H i l l s b o r o u g h , C a l i f o r n i a
JOSEPH C . SCULLY, C h i c a g o , I l l i n o i s
MALCOLM E . COLLIER, L a k e w o o d , C o l o r a d o
JOHN M . TIPPETS, D F W A i r p o r t , T e x a s
GEORGE L. ENGELKE, JR., Lake Success, New York
LARRY T. WILSON, Raleigh, North Carolina
BEVERLY D . HARRIS, L i v i n g s t o n , M o n t a n a
WILLIAM W . ZUPPE, S p o k a n e , W a s h i n g t o n
A82
Federal Reserve Board Publications
For ordering assistance, write PUBLICATIONS SERVICES,
MS-127, 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
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Governors of the Federal Reserve System or may be ordered
via Mastercard or Visa. Payment from foreign residents should
be drawn on a U.S. bank.
THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS.
1994. 157 pp.
ANNUAL REPORT.
ANNUAL REPORT: BUDGET REVIEW, 1 9 9 4 - 9 5 .
FEDERAL RESERVE BULLETIN. M o n t h l y . $ 2 5 . 0 0 p e r y e a r or
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ANNUAL STATISTICAL DIGEST: period covered, release date,
number of pages, and price.
$ 6.50
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239 pp.
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$ 7.50
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December 1983
266 pp.
264 pp.
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1983
254 pp.
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October 1985
$15.00
231 pp.
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$15.00
288 pp.
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November 1987
272 pp.
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1987
$25.00
256 pp.
1988
November 1989
712 pp.
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1980-89
$25.00
185 pp.
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1990
$25.00
215 pp.
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1991
$25.00
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215 pp.
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281 pp.
1993
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.
THE FEDERAL RESERVE ACT and other statutory provisions
affecting the Federal Reserve System, as amended through
August 1990. 646 pp. $10.00.
REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM.
ANNUAL
PERCENTAGE RATE TABLES (Truth i n
Lending—
Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp.
Vol. II (Irregular Transactions). 1969. 116 pp. Each volume $2.25.
GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 6 7 2 pp.
each.
$8.50
FEDERAL RESERVE REGULATORY SERVICE. L o o s e - l e a f ; u p d a t e d
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. Four 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, M a y 1 9 8 4 . 5 9 0 pp. $ 1 4 . 5 0 e a c h .
INDUSTRIAL PRODUCTION—1986 EDITION. D e c e m b e r 1 9 8 6 .
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 ANALY-
SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each.
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
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
How to File a Consumer Complaint
Making Deposits: When Will Your Money Be Available?
Making Sense of Savings
SHOP: The Card You Pick Can Save You Money
Welcome to the Federal Reserve
When Your Home is on the Line: What You Should Know
About Home Equity Lines of Credit
A83
STAFF STUDIES: Only Summaries
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 1-157 are out of print.
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 5 8 . THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE
1 6 5 . THE DEMAND FOR TRADE CREDIT: A N INVESTIGATION OF
MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES,
PRODUCTS, by Mark J. Warshawsky with the assistance of
Dietrich Earnhart. September 1989. 23 pp.
by Gregory E. Elliehausen and John D. Wolken. September 1 9 9 3 . 1 8 pp.
1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, b y N e l l i e L i a n g
1 6 6 . THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET,
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
1990. 35 pp.
161. A
REVIEW OF CORPORATE RESTRUCTURING ACTIVITY,
1980-90, by Margaret Hastings Pickering. May 1991.
21pp.
by Mark Carey, Stephen Prowse, John Rea, and Gregory
Udell. January 1994. I l l pp.
1 6 7 . A SUMMARY OF MERGER PERFORMANCE STUDIES IN
BANKING, 1 9 8 0 - 9 3 , AND AN ASSESSMENT OF THE "OPERATING PERFORMANCE" AND "EVENT S T U D Y " METHOD-
OLOGIES, by Stephen A. Rhoades. July 1994. 37 pp.
A84
Maps of the Federal Reserve System
HAWAII
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 N e w 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.
A85
2-B
NH
n I
\
RI
NJ
MA
Baltimore
MD
«
j
NY
NEW YORK
BOSTON
5-E
Pittsburgh
h
Buffalo
/
CT
4-D
3-C
sc
PHILADELPHIA
CLEVELAND
RICHMOND
8-H
7-G
MO
KY
•
J
Louisville
3$%'*—TN
"JO
Jacksonville
Little
Rock
ATLANTA
CHICAGO
ST.
• Memphis
MS
Louis
9-1
MINNEAPOLIS
12-L
10-J
KANSAS CITY
11-K
• L o s Angeles
WSmmmw M M H W I I
San Aatooio^
DALLAS
SAN FRANCISCO
A86
Federal Reserve Banks, Branches,
and Offices
FEDERAL RESERVE BANK
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
Jerome H. Grossman
William C. Brainard
Cathy E. Minehan
Paul M. Connolly
NEW YORK*
10045
Maurice R. Greenberg
David A. Hamburg
Joseph J. Castiglia
William J. McDonough
Ernest T. Patrikis
Buffalo
14240
Carl W. Turnipseed'
PHILADELPHIA
19105
James M. Mead
Donald J. Kennedy
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Jerry L. Jordan
Sandra Pianalto
Cincinnati
Pittsburgh
45201
15230
A. William Reynolds
G. Watts Humphrey, Jr.
John N. Taylor, Jr.
Robert P. Bozzone
RICHMOND*
23219
J. Alfred Broaddus, Jr.
Walter A. Varvel
Baltimore
Charlotte
Culpeper
21203
28230
22701
Henry J. Faison
Claudine B. Malone
Michael R. Watson
James O. Roberson
Leo Benatar
Hugh M. Brown
Patricia B. Compton
Lana Jane Lewis-Brent
Michael T. Wilson
James E. Dalton, Jr.
Jo Ann Slaydon
Robert P. Forrestal
Jack Guynn
Robert M. Healey
Richard G. Cline
John D. Forsyth
Michael H. Moskow
William C. Conrad
Robert H. Quenon
John F. McDonnell
Janet M. Jones
Daniel L. Ash
Woods E. Eastland
Thomas C. Melzer
James R. Bowen
Gerald A. Rauenhorst
Jean D. Kinsey
Matthew J. Quinn
Gary H. Stern
Colleen K. Strand
Herman Cain
A. Drue Jennings
Sandra K. Woods
Ernest L. Holloway
vacancy
Thomas M. Hoenig
Richard K. Rasdall
Cece Smith
Roger R. Hemminghaus
W. Thomas Beard III
Isaac H. Kempner III
Carol L. Thompson
Robert D. McTeer, Jr.
Tony J. Salvaggio
Judith M. Runstad
James A. Vohs
Anita E. Landecker
Ross R. Runkel
Gerald R. Sherratt
George F. Russell, Jr.
Robert T. Parry
Patrick K. Barron
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
EI Paso
Houston
San Antonio
SAN FRANCISCO ....
Los Angeles
Portland
Salt Lake City
Seattle
59601
64198
80217
73125
68102
75201
79999
77252
78295
94120
90051
97208
84125
98124
Vice President
in charge of branch
Charles A. Cerino1
Harold J. Swart1
William J. Tignanelli1
Dan M. Bechter1
Julius Malinowski, Jr.2
Donald E. Nelson1
Fred R. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso
Roby L. Sloan1
Robert A. Hopkins
Howard Wells
John P. Baumgartner
John D. Johnson
Kent M. Scott1
Mark L. Mullinix
Harold L. Shewmaker
Sammie C. Clay
Robert Smith, III1
James L. Stull1
John F. Moore1
Raymond H. Laurence
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; Milwaukee, Wisconsin 53202; and Peoria, Illinois 61607.
1. Senior Vice President.
2. Assistant Vice President.
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.
Three booklets on the mortgage process are 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 H o m e Loan Bank Board and in consultation
with other federal agencies and trade and consumer
groups. The Board also publishes the
Consumer
Handbook
to Credit Protection
Laws, a complete
guide to consumer credit protections. This forty-fourpage booklet explains how to shop and obtain credit,
how to maintain a good credit rating, and how to
dispute unfair credit transactions.
Shop . . . The Card You Pick Can Save You Money
is designed to help consumers comparison shop when
looking for a credit card. It contains the results of the
Federal Reserve Board's survey of the terms of credit
card plans offered by credit card issuers throughout
the United States. Because the terms can affect the
amount an individual pays for using a credit card, the
booklet lists the annual percentage rate (APR), annual
fee, grace period, type of pricing (fixed or variable
rate), and a telephone number for each card issuer
surveyed.
Copies of consumer publications are available free
of charge from Publications Services, Mail Stop 127,
Board of Governors of the Federal Reserve System,
Washington, D C 20551. Multiple copies for classroom use are also available free of charge.
A Guide to
Business
Credit
for Women,
Minorities, and
Small Businesses
SHOP
Ths Card You Pick
Can Save You Money
Publications of Interest
FEDERAL
RESERVE
REGULATORY
SERVICE
To promote public understanding of its regulatory
functions, the Board publishes the Federal Reserve
Regulatory Service, a four-volume loose-leaf 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. A l s o included are the Board's list
GUIDE
TO THE FLOW
OF FUNDS
ACCOUNTS
A recent Federal Reserve publication, Guide to the
Flow of Funds Accounts, explains in detail how the
U.S. financial flow accounts are prepared. The
accounts, which are compiled by the Division of
Research and Statistics, are published in the Board's
quarterly Z . l statistical release, "Flow of Funds
Accounts, F l o w s and Outstandings." The Guide
updates and replaces Introduction to Flow of Funds,
published in 1980.
The 670-page Guide begins with an explanation of
the organization and uses of the flow of funds
accounts and their relationship to the national income
and product accounts prepared by the U.S. Department of Commerce. A l s o discussed are the individual
data series that make up the accounts and such proce-
of marginable OTC stocks and its list of foreign
margin stocks.
The Consumer and Community Affairs
Handbook
contains Regulations B, C, E, M, Z, A A , B B , and D D ,
and associated materials.
The Payment System Handbook deals with expedited funds availability, check collection, wire transfers, and risk-reduction policy. It includes Regulations CC, J, and EE, related statutes and commentaries, and policy statements on risk reduction in the
payment system.
For domestic subscribers, the annual rate is $ 2 0 0
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 $ 2 5 0 for the Service and $ 9 0 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 127, Board of Governors of the Federal Reserve
System, Washington, D C 20551.
dures as seasonal adjustment, extrapolation, and
interpolation.
The balance of the Guide contains explanatory
tables corresponding to the tables of financial flows
data that appeared in the September 1992 Z . l release.
These tables give, for each data series, the source of
the data or the methods of calculation, along with
annual data for 1991 that were published in the
September 1992 release.
Guide to the Flow of Funds Accounts is available
for $8.50 per copy from Publications Services, Board
of Governors of the Federal Reserve System, Washington, D C 20551. Orders must include a check or
money order, in U.S. dollars, made payable to the
Board of Governors of the Federal Reserve System.
@FedFRASER