Full text of Federal Reserve Notes : January 1982

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Reserve Notes
FEDER4tef^S«ERVE BANK OF SAN FRANCISCO

•

January 1982

Serving Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah & Washington

SAN FRANCISCO RESERVE BANK BROADENS
SCOPE OF OPERATIONS IN 1981

NINE NEW DIRECTORS
NAMED FOR S.F. FED
The Federal Reserve has named

The Federal Reserve Bank of San

member

nine

Francisco operated in a new com
petitive environment during 1981,
largely in response to the passage
of the Depository Institutions De
regulation and Monetary Control

(mostly credit unions) with under $2
million in deposits. Congress is now
giving consideration to a perma
nent exemption for these smaller

new

branch

directors

offices

of

for
the

the

four

Federal

Reserve Bank of San Francisco,

including new chairmen at Los
Angeles and Seattle. Each office
has seven directors with staggered
terms—four named by the Reserve
Bank, and three (including the chair
man) named by the Fed's Board of
Governors.

Appointed to head the Federal Re
serve's largest nationwide branch
office at Los Angeles was Bruce M.

Schwaegler, president of Bullock'sBullocks Wilshire. He replaces Har
vey A. Proctor, board chairman of
Southern California Gas Company,
who served on the Los Angeles Fed
Board for seven years. An Iowa
native and graduate of Iowa State

Act of 1980 (MCA). Under this legis^
lation, Congress promoted greaterN
equity and improved monetary con
trol by applying Federal Reserve
reserve requirements to all deposi
tory institutions with transaction
(check-type) accounts or nonpersonal time deposits. In addition,
Congress promoted greater effi
ciency in financial markets by pro
viding access to Federal Reserve
services, at explicit prices, for those
institutions now subject to reserve
requirements.
Implementation of MCA

and Duke universities and the Har

As a result of the enactment of MCA,

vard Business School, Schwaegler
is active in professional and civic
organizations. He is chairman of the
Los Angeles chapter of the Amer
ican Red Cross, president of the
Central City Association, vice presi
dent of the Los Angeles Area Cham

the Reserve Bank's data-collection

ber of Commerce and director of the
California Retailers Association and

Southern California Building Funds.
Seattle's new Fed chairman is John

W. Ellis, president and chief execu
tive officer of the Puget Sound
Power & Light Company of Bellevue. Born in Seattle, Ellis heads an

investor-owned
electric
utility
serving 530,000 customers. He suc
ceeds lumber executive George H.
Weyerhaeuser, who has been
named a director of the Fed's San

(Continued on page 2)

workload expanded significantly.
Previously, the Bank collected
deposit data on a weekly basis from
only 147 member banks, but in
November 1980 it implemented
weekly reporting requirements for
996 institutions (primarily those with
$15 million or more in total de
posits), and in January 1981,
implemented quarterly reporting
requirements for 783 smaller insti
tutions (primarily those with $2 mil

lion to $15 million in deposits). Of
the total, about 350 institutions cur

rently are maintaining reserve
accounts directly with the Reserve

Bank. Several times during the year,
the

Fed's

Board

of

Governors

deferred reporting and reservemaintenance requirements for non-

depository

institutions

institutions.

A number of operating departments
began implementing open access

"and pricing for financial services on
a phased-in basis during 1981. Im
plementation of pricing began for
wire-transfer

and

net

settlement

services in January, for check and
automated clearinghouse services
in August, for securities handling in
October, and for cash-transporta

tion services in January 1982. Over
the long run, revenues derived from
providing these financial services
are expected to cover all Federal
Reserve costs in providing them,
including an amount to reflect pri
vate-sector costs (such as taxes
and capital costs) not incurred by
the Federal Reserve.

In early 1980, the Reserve Bank
established an MCA Policy Commit
tee with responsibility for super
vising implementation of the new
legislation. The committee then
organized a Pricing and Access
Project Team with the responsibility
of coordinating implementation of
the Act's provisions on a districtwide basis. In June 1981, the Bank

organized a new Financial Services
Department for offering and pricing
the

various

financial

services

provided by the Reserve Bank to
financial institutions. The new de

partment is responsible for price
administration, customer relations,
(Continued on page 4)

NEW DIRECTORS NAMED
(Continued from page 1)

Francisco head office. A law gradu
ate of the University of Washington,
Ellis serves as director of the Seat

tle Chamber of Commerce, United

Way of King County, Overlake
Hospital, the Northwest Energy
Services Company, Puget Sound
Power & Light and SAFECO Corpo
ration.

The other new directors are: Robert

R. Dockson, chairman and chief
executive officer, California Federal

Bruce Schwaegler

Savings & Loan Association, and
William L. Tooley, Managing Part
ner, Tooley & Company Investment
Builders (Los Angeles); John N.
Nordstrom, co-chairman of the
board, Nordstrom, Inc., and G.
Robert Truex Jr., chairman, Rainier

William Tooley

Bancorporation (Seattle); Carolyn
S. Chambers, executive vice presi
dent/treasurer, Liberty Communi
cations, Inc., and John A. Elorriaga,
chairman and chief executive offi

cer, United States National Bank of

Oregon (Portland); and Lela M.
Ence, executive director, University
of Utah Alumni Association (Salt
Lake City).
All of the new directors' terms are for

three years, except for Tooley and
Ellis, who are completing unexpired
terms of other directors.

John Ellis

Dockson directs operations of
America's largest federally char
tered savings-and-loan association.
The Los Angeles-based financial

John Nordstrom

institution has assets in excess of

$6 billion and operates more than
100 offices throughout California. A
native of Illinois, Dockson becomes

the first representative of a thrift
institution to serve on a Fed board in
this

district.

Active

in

numerous

business, civic and academic af
fairs, he served as chairman of the

finance committee of the Los Ange
les

Bicentennial

Committee

last

year and was a member of the Con
sumer Advisory Council of the Fed
eral Reserve Board. He also has

served on the legislative committee
of the U.S. League of Savings Asso
ciations.
Robert Dockson

G. Robert Truex, Jr.

Tooley, a graduate of Stanford and

Heart Medical

Harvard universities, is an invest

and the Eugene Arts Foundation.

ment builder. His firm develops
office buildings and industrial prop
erties and currently manages ap
proximately 2.5 million square feet
of office space. A Phi Beta Kappa
graduate of Stanford, Tooley is a
trustee of Loyola Marymount Uni
versity and serves as director of the
Central City Association in Los
Angeles, the National Realty Com

In January 1980, Elorriaga was
selected by Financial World maga
zine as one of the three top banking
CEOs of the year. The Oregon
native also has received awards

from the University of Oregon and
University of Portland for "selfless
community service." A business
graduate of the University of
Oregon, he earned a master's
degree in business from the Univer
sity of Pittsburgh and attended the
Pacific Coast Banking School. He is

mittee and the California Business

Properties Association.

An accounting graduate of the Uni
versity of Washington, Nordstrom is

a

member

of

the

International

Monetary Conference, Association
of Reserve City Bankers and the

a Seattle native. Nordstrom, Inc. is

involved in retail apparel and acces

sories for the entire family. Nord

Foundation Board

Carolyn Chambers

American

Bankers

Association.

strom serves as a director of the

Among other civic functions, he

Puget Sound Power & Light Com
pany and is a trustee of the Puget
Sound Mutual Savings Bank.

serves as chairman of St. Vincent

Hospital and Medical Center, on the
advisory council of Boise State Uni
versity's School of Business, and on

Truex joined Rainier in 1973 from

the Board of Commissioners of the
Port of Portland.

Bank of America, San Francisco,

where he served for nearly eight

Mrs. Ence has been active in civic

years as executive vice president.
Prior to that, he was a senior vice

president at Irving Trust Company

and business organizations in Salt
Lake City for several years. She was

in New York. Truex is a director and
executive committee member of

named executive director of the
Utah Alumni Association in 1970. A

National Airlines and a director of

native of Salt Lake City, she is a

Virginia Mason Hospital and the Pri
vate Export Funding Corporation of

director of Union Bank and serves

on the Chamber of Commerce's

New York. He also serves as a

Free

regent of Seattle University and a

Women's Council. In addition, she

trustee of the Seattle Chamber of
Commerce.

is vice president of the Cottonwood
Hospital Foundation and Inter-

John Elorriaga

Ms. Chambers has been associated

Utah Advertising Federation and
the Council for the Advancement

and Support of Education.
In other actions, publisher Wendell
J. Ashton of Salt Lake City was re
appointed for another three-year
term and designated to continue as

Cable Association. Also, she is
president of McKenzie River Motors
and vice president of R.A. Cham
bers and Associates. A native of

board chairman at that branch. At

Portland, she graduated from the
University of Oregon with a bache
lor of arts degree in business. Cur
rently, Ms. Chambers serves on the
of trustees and

Portland, John C. Hampton, chair
man and president of Willamina

Lumber Company, was designated
to continue as chairman for 1982.1BB»

executive

committee of the University of Ore
gon Foundation. She also serves on
the Alton

Baker Park Committee

and the Advisory Committee for the
Eugene Hearing and Speech Cen
ter, and is a director of the Sacred

mountain Health Care Association.
Mrs. Ence also is affiliated with the

with Liberty Communications since
1960 and is currently serving as a
director of the California Community
Television Association and Oregon

board

Enterprise Committee and

Lela Ence

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window administration at its San

BANK OPERATIONS
(Continued from page 1)

and the planning and development
of additional Fed services. In addi

tion, the Bank in 1981 established

Francisco headquarters office. The
Bank made the change to improve
the efficiency of its credit function,
and also to separate the personnel
responsible for approving exten

an MCA Advisory Group, consisting

sions

of twelve senior executives from all

from personnel responsible for the
sales of priced Fed services.

types of depository institutions, to
provide a two-way channel between
the Bank and the financial commu

nity regarding implementation of
MCA programs and policies. This
group met six times during the year
with Bank officials.

accounts or nonper-

sonal time deposits are entitled to
the same borrowing privileges as
member banks. Nearly 250 nonmember

institutions

established

relationships with the Twelfth Dis
trict's discount window during the
year, and 39 of those institutions
(along with 65 member banks) exer
cised their borrowing privileges.
While most of the borrowers used
the discount window for short-term

purposes, 15 member and nonmember

institutions

Federal

Reserve

credit

Computer Developments
The Bank's Computer Services

Group became closely involved in
implementing MCA programs dur
ing 1981. In addition, it completed
an automated securities-handling

Activity at the discount window in
creased sharply during 1981, large
ly as a result of the Monetary
Control Act. Under MCA, all depos
itory institutions having reservable
transaction

of

borrowed

to

meet their seasonal or other longerterm liquidity needs.

system (SHARE) and completed
the second phase of a financial-sta
tistics system (MIPE). The group
also continued to work on an auto

mated-billing system to accommo
date the pricing of securities and
cash transportation, and developed
an automated management-report
ing system to assist the Financial
Services Department in analyzing
prices, services, and product
performance.

Culminating three years of coopera
tive developmental efforts, the
Reserve Bank successfully imple

represents a major cooperative ef
fort involving software development.
In another major effort, the Bank
successfully implemented the MIPE
financial-statistics system, which
represents a highly advanced sta
tistical data-reporting application. A
number of current reports were con
verted to the MIPE system during
the year.
The

Federal

Reserve

continued

work on upgrading its electroniccommunications network in a pro
ject known as FRCS-80 (Federal
Reserve Communications System
for the '80s). The new system will be
a general-purpose data-communi
cations network, satisfying the Fed
eral

Reserve's

internal-communi

cations requirement for providing
services to the financial community,
the Treasury, and other government
agencies. The system will improve
the reliability and capacity of the
Federal Reserve's communications

operation, reduce the total cost of
communications through a more ef
ficient use of circuits, and increase

Bank assisted the Kansas City, St.

the security of data moving within
the Federal Reserve System. The
computer power of FRCS-80 will be
distributed among Federal Reserve
offices, instead of revolving around
a computerized hub as does the cur

Louis, and Dallas Reserve Banks

rent Fed Wire.Ijjfi

mented

the

SHARE

securities-

handling automation system at all
five District offices. In addition, the

with their implementations of the

In September, the Reserve Bank

system. The SHARE project, with

centralized the District's discount-

San Francisco as the lead bank,

(Additional news on 1981 opera
tions will appear in the next issue.)