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7t ca&.
HZ
IO
Hi-'Pl
/3c
C, ;g
I
c-5S
&&
of the Treasury
Department
FOR IMMEDIATE
~
Washlnyton,
Contact: Cher@1 Crisper;
RELEASE
October 15, 1990
DEPARTMENT
31
Oi
TRANSMITTALS
AGENCY':
Departmental
ACTION:
Not
SUMMARY:
CFR PART
103
SECRECY ACT REGULATIONS
FOR FUNDS
FUNDS
4810-25]
Oi THE TREASURY
TO THE BANK
TO RECORDKEEPING
AND
(202) 566-5252
e
[Billing Code:
PROPOSED AMENDMENT
D.C. e Telephone SSI-204
RELATING
TRANSFERS BY BANKS
BY OTHER
FINANCIAL
INSTITUTIONS
Offices, Treasury.
joe of Proposed Rulemaking.
Treasury
is
proposi
ng entranced
recordkeeping
relating to funds transfers by banks and
to transmittals of funds by other financial institutions
requirements
subject
to the Bank Secrecy Act. Each domestic bank involved in a funds
transfer will have to retain certain information about the
transfer. The amount and type of information will depend vapo»
the bank's role in the funds transfer process. Zn additioni
banks will be required to verify the name and address and obtain
additional identifying information on originators and
beneficiaries of funds transfers who are not deposit
Financial institutions other than banks that
accountholders.
receive funds will have similar recordkeeping
requirements.
Finally, the regulations permitting Treasury to
target for reporting certain transactions with foreign financial
transmit
and
to be amended to permit Treasury to
require reports of all funds transfers by banks and transmittals
of funds by financial institutions other than banks.
institutions
DATE:
are proposed
Comments
are due
[45
on
DAYS FROM THE DATE OF PUBLICATION
IN THE FEDERAL REGISTER].
to Amy G. Rudnick, Director,
Office of Financial Enforcement, Office of the Assistant
Secretary (Enforcement), Department of the Treasury, Room 4320,
ADDRESSES:
Comments
1500 Pennsylvania
FOR FURTHER
should
N. W. , Washington,
Avenue,
INFORMATION
(Enforcement),
D. C. 20220.
Senior Counsel
Office of the Assistant General
CONTACT:
for Financial Enforcement,
Counsel
be sent
Linda Noonan,
(202) 566-2941.
SUPPLEMENTARY
INFORMATION:
Secrecy Act, Pub. L. 91-508 (codified at 12 U-S-C1829b and 1951-1959, and 31 U. S. C. 5311-5326), authorixes the
Secretary of the Treasury to require financial institutions to
keep records and file reports that the Secretary determines have
in criminal, tax and regulatory
a high degree of usefulness
The Bank
I
matters.
identify
The primary
purpose
the sources,
volumes
and out
of the country
and
Secrecy Act is to
and movements of moneys moving into
of the
through
Bank
domestic
financial
See H. R. Rep. No. 975, 91st Cong. , 2d Sess. 11-13
institutions.
(1970). In exercising this far-reaching authority, Treasury has
of issues concerning implications of foreign laws
and has been careful not to encumber the free flow of legitimate
international trade and commerce.
been mindful
October 31, 1989, Treasury published an Advance Notice of
Proposed Rulemaking to deal with the problem of money laundering
On
through
the international
funds
transfer
system.
54 FR
457g9.
transfers are a series of messages to and through one or
more banks that are intended to result in the payment of funds
This usually is accomplished through
from one person to another.
a debit to the account of the person sending the money (the
"originato. ") and a corresponding credit to the person receiving
the funds (the "beneficiary ).
Funds
-4a
vital
are being transferred
4nd
of drug trafficking
component
activity throughout
other criminal
funds
is
laundering
looney
the world.
domestically
Currently&
and from and
i
g
to the
"cycled" through intricate money laundering
funds
payments, particularly
schemes involving international
transfers. Several recent money laundering operations, which
United
States
and
other Federal law
enforcement agencies, such as Operations C-Chase and Polar Cap,
Zn an April 26, 1989,
are testaments to this phenomenon.
submission to the Director, Office of National Drug Control
have been discovered
Bankers Association
the American
are essentially
method
by which
and
Record of
in the Congressional
Policy, reprinted
which
by Treasury
unregulated,
stated that, "Funds
have emerged
ply their
launderers
high volume
May
18, 1989,
transfers,
as the primary
trade. " 135
Cong. Rec. S5555.
The Advance
transfers
laundering
Notice of Proposed Rulemaking
through
problem
banks.
There
involving
is also
non-bank
focused on funds
serious money
financial institutions
a
that
are subject to recordkeeping and reporting requirements of the
Bank Secrecy Act, such as transmitters
of funds and telegraph
Therefore, this proposal also addresses recordkeeping
which respect to funds they
by these financial institutions
companies.
transmit
and
receive.
FiAJOR
RECEIVED TO THE ADVANCE
COMMENTS
RULEMAK
NOTICE OF PROPOSED
I NG
Notice, Treasury set forth seven different
proposals that it was considering implementing.
In the Advance
regulatory
There were a
total of 114
comments
comments,
81 were from banks.
financial
institutions,
on
these proposals.
The remainder
trade associations,
Of
those
were from non-bank
government
agencies,
institutions and individuals.
Generally,
most of the commenters noted their opposition to drugs and their
desire to assist in fighting the problem. However, they also
and
other miscellaneous
noted that the essence of the automated
international payments
system is the speed with which it moves funds and that anything
which slows down the system would make United States banks less
competitive.
Most commenters also pointed out that the vast
majority of international
payments are legitimate.
In addition,
many
commenters
noted that some of the proposals
violate foreign privacy laws and that Treasury should be
sensitive to ocher countries' concerns. Other commenters
suggested that the proposals, if adopted, would unreasonably
burden the international
payments system and financial
institutions ir. general. The comments expressed concern that
regulations wo- d be costly =o implement, and they suggested that
might
Treasury
focus on other
money
laundering
the points where cash enters the financial
criminal
points, " ~Csystem, to detect
choke
activity
of financial institutions
to cooperate in combating drug trafficking and money laundering.
In developing the regulations proposed today and in considering
Treasury will balance the law enforcement
any final regulations,
need for the information against the costs to financial
institutions and the effect on the payments system and the free
flow of legitimate funds through the funds transfer process.
Treasury understands that privacy laws in other countries may
prohibit financial institutions from disclosing the names of
customers to United States financial institutions
on a routine
basis, and has taken this into account in issuing the proposed
regulations.
Treasury
appreciates
the willingness
also raised questions about the use of domestic
funds transfers to launder money, and suggested that the
regulations cover both domestic and international funds
transfers. Currently, section 103.33 of the regulations, 31 CFR
103.33, requires only records on certain international funds
transfers, not information on domestic funds transfers. Xn
response to these comments, Treasury has included in the proposed
regulations provisions that cover both domestic and international
The comments
funds
transfers.
Records on domestic
funds
transfers
have been
it is
financial
institution to know whether an incoming funds transfer originated
abroad or whether an outgoing funds transfer is destined
ultimately for a place outside the United States.
included
because often
Comments
Received on Specific Proposals:
41:
Re
uire
a
impossible
re ort or record b
for
a ment
or received
was made
receiver is aware of
the
a
ment
unknown
an
institution
wire transfer of
the financial
ori inatin or receivin an international
for a customer which includes identif in
about the ori inator, beneficiar
and the
the
a
and
to the financial
a ment
information
account
erson on whose behalf
and whether
se arate
funds
the sender
instructions
or
re ardin
institution.
42: Re uire that all international wire transfer messa es
contain all known third
art identif in information, e.
account numbers, addresses, and names of the ori inator and
beneficiar
of the
a
ent.
vast majority of the comments received by Treasury were
directed at these two proposals. Generally, if commenters
expressed a preference, it was for recordkeeping, not reporting.
In addition to the general comments, many commenters noted that
The
transfer system was highly automated with
review, and that any requirement to delay a transfer
the funds
no manual
in order to
verify information
commenters
requested
international
disrupt
would
that,
if
payments.
reporting
with the preference
Treasury were to require
the report contain only "known" information,
Most commenters stated that
filed electronically.
it was easier to get information on transfers that originated in
the United States, as opposed to transfers that originated from
abroad, because United States financial institutions can more
readily obtain information about transfers originating at their
noted that foreign financial
institutions.
Many commenters
institution privacy laws ~ould prohibit foreign banks from
providing the name of a foreign originator.
for
it
being
There was a
exemptions
split of
should
opinion
be permitted
among
to
any
the commenters
reporting
on whether
or recordkeeping
for funds transfers.
Those expressing concern about
exemptions were worried that the system would be modeled after
the currency transaction reporting exemption system,
e. , on an
requirements
i.
account-by-account
basis.
Those in favor of exemptions
suggested
instead, suggesting that exceptions be
t
permitted for categories of transactions such as transfers
conducted for: corporations traded on one of the public stock
exchanges; the bank's own account; a company rated by one of the
securities ratings services or recognized by a credit ratings
service; public utilities; government agencies; and businesses
who make regular transfers
commensurate with their business
a broad exception
activity.
program
i
sort of monetary threshold for
records or reports for funds transfers, such as $10, 000. Several
commenters stated that Treasury should be clearer about the
Many
suggested
commenters
some
terminology
used, and that any regulation
terminology
as
Article 4A
transaction
is
used in proposed
on funds
had
information
was
transfers.
should
Uniform
use the same
Commercial
Code
(UCC)
There was concern over whether
to be refused or
not available.
payment
delayed
if
a
the required
Finally, there also were questions concerning the ability of a
financial institution to determine whether an apparently domestic
funds transfer was part of an international
This is
payment.
because ~here intermediary
financial institutions are used in
the originating financial institution or
many funds transfers,
beneficiary's financial institution may not be aware when a
particular payment order relates to funds originating with an
international funds transfer.
Some commenters
recommended
that
the same recordkeeping
domestic
would
and
requirements
international.
be administratively
be placed
Several commenters
easier for
them
on
all transfers-noted that
it
to keep the records
on
al' transfers.
to propose only enhanced recordkeeping
requirements at this time. Reporting of international
funds
transfers or of categories of funds transfers is still under
consideration.
Treasury is considering either routine reporting
Treasury
has decided
-10of suspicious funds transfers, based
transfer profile developed by Treasury and
or only reporting
suspicious
supplemented
by
be interested
reporting
individual
in comments
~ould
institutions.
on
Treasury
measures
to
continues
the concept of reporting
relate to recordkeeping
on a
and how
taken in
to this proposal.
response
the proposed
regulations, domestic banks, depending upon
their role in the funds transfer process, (originator's bank,
beneficiary's bank, or intermediary bank), will have to keep
certain records on all funds transfers, regardless of amount.
Generally, there are no exemptions from recordkeeping
Under
requirements
under
the Bank Secrecy Act.
However,
Treasury
is
that funds transfers between domestic banks for their
own accounts will be exempt from these recordkeeping
requirements
in view of the lack of law enforcement utility for such records.
In the future, if Treasury proposes reporting of funds transfers,
Treasury will consider other appropriate exemptions.
proposing
situations, it is not apparent
whether the funds involved in a funds transfer are domestic or
international in origin. Treasury has determined that there is
law enforcement value in having records of all transfers.
Treasury
Therefore,
regulations
agrees that, in
Treasury
is
many
that the recordkeeping
apply to both international
and domestic transfers.
proposing
-lluire that rior to ori inatin international
transfers
a customer's behalf, either through a book entr
credit or throu h international wire transfers of funds.
43:
Re
of
institutions a 1 model know our customer"
rocedures to verif the leoitimate nature of the customer' s
business and that the transfers are commensurate with le itimate
financial
activities.
business
stated that they felt that a "know your
customer" procedure made good business sense. Many also noted,
however, that the nature of funds transfers was different from
the nature of currency transactions and that different procedures
Many
commenters
applicable. Most commenters have difficulty with any
requirement
that they verify the nature of the customer' s
business and the amount of the transactions, because they would
be unable to determine prior to the transfer (or even after) that
the customer's business was legitimate and that the amount of the
funds transfer was commensurate with the customer's legitimate
business.
Several commenters asked Treasury to provide guidance
or prescribe what the procedures would be and to propose uniform
Ptore than one commenter noted that the
industry standards.
guidelines should avoid reliance on subjective factors.
should
be
Several commenters
as a financial
legitimate
felt that it
of
a
not part of their
function
to investigate in detail the
customer's business.
However, others
institution
nature
was
-12that know your customer procedures should be extended to
all areas of a financial institution in order to protect
that the
financial institution against money laundering, and tha
~ould have no problem in attempting to determine whether a un s
transfer was commensurate with the customer's businessthought
commenters
already have
commenters
suggested
completed
know your
procedures-
customer
the funds transfer
reviewing
so as not to disturb
after
&t ~s
process.
the payment
of the comments, Treasury has decided not
to pursue this option at the present time, but plans to address
this topic in the future in connection with mandatory and
for financial
know your customer procedures
comprehensive
After consideration
institutions.
Zn
Treasury
the meantime,
is
by the
encouraged
institutions who have voluntarily instituted know
your customer policies and procedures and reminds all financial
institutions to familiarize themselves with their customers'
many
financial
activities to
deviations
become
from
other areas.
their
aware
normal
of
any
suspicious
activities or
activities in the
Unless a financial
institution
funds
knows
transfer
its
and
customers,
it
will be vulnerable to money laundering and will not be able to
fulfill its obligation to report possible criminal violations of
law. See ~e. , 12 C. P. R. 21.12.
uire s ecial identification
rocedures and recordkee in
or re ortin of international
a ments sent or received without
44:
Re
-13established
account
relationshi
There was a consensus
among
s
institutions-
at financial
the commenters,
at least for those
institutions vho do PUPID (pay upon proper
identification) funds transfers, that they are willing to put
into place reasonable special identification procedures for
noncustomers
receiving funds transfers.
Some suggested that the
financial
procedures
not require
filling
required
when
currency
transactions
Many
banks
nondeposit
originate
more
information
payment
Report on
$10, 000.
said that they do not originate
accountholders
is currently
Transaction
out a Currency
exceeding
than
or that,
if
funds
they permit
orders for small amounts,
(~e.
transfers
them,
for
they only
. . $1, 000)
and
rarely or never receive incoming transfers for nondeposit
accountholders.
Of those banks which receive these transfers,
most said that they ask for at least one piece of identification
before releasing the funds to the beneficiary.
originators and beneficiaries vho do not
vith banks often is lacking or cannot
have account relationships
be retrieved making it difficult for law enforcement authc rities
to trace funds transfers. Thus, after consideration of the
comments, Treasury has decided to propose special identification
procedures for funds transfers involving originators or
beneficiaries of funds transfers who are nondeposit
Information
on
-14accountholders.
institutions develo a sus icious
international wire transfer
rofile and re ort eus icious
rofile mi ht include certain criteria
a ments to Treasur ; the
resence of lar e
su ested b Treasur , for exam le, the
currenc de osits rior to an out oin transfer or the existence
of an incomin transfer followed b issuance of a cashier's check
45:
uire that financial
Re
Zt was the overwhelming
opinion
of the commenters
that
institutions, should develop
suspicious wire transfer profiles, or that financial institution
regulators and/or a group of financial institutions should
develop the profile.
felt that they did not have
Many commenters
sufficient expertise to develop profiles on their own and
indicated that it is often difficult to distinguish between
suspicious and legitimate transactions.
Some commenters
pointed
out that because the nature of a funds transfer is different from
the nature of currency transactions, it is more difficult to
determine what is suspicious activity.
Treasury,
not the financial
Several commenters
system
is
automated
stressed that because the funds transfer
and most payment orders are not reviewed
before they go out, regulations requiring review prior to
transmittal could stop the payment order, and impede the
international
payments
system.
Most commenters
also noted that
-15their internal computer systems are not integrated and that, as a
result, they cannot determine ~hat account activity preceded a
funds transfer, ~e. . . whether there had been a recent large cash
deposit.
One bank
commenter
said that
it
produces
a weekly
suspected
report and runs the information against variable
parameters to identify activity that is suspicious in
relationship to an account's overall activity. Another commenter
said that it could use its current capability to sort funds
transfer activity by customer and account officer and have the
account officer identify unusual patterns of activity by certain
money
laundering
customers.
Some commenters
noted that the guidelines
should
be
clear so that the financial institution
vill not be "second-guessed" at a later date if they do not file
a suspicious activity report.
objective, specific
After consideration
and
of the comments,
Treasury
has decided not
transfers at this time.
Hovever, Treasury is encouraged by the many financial
institutions that have developed suspicious funds transfer
profiles and encourages other financial institutions to develop
their own programs to identify suspicious funds transfers and
Treasury strongly urges financial
other suspicious activity.
institutions to report suspicious activity, including suspicious
funds transfers, to the local office of the Internal Revenue
to require
reporting
of suspicious
funds
-16Service's Criminal
international
suspicious
Division,
Znvestigation
wire
transfers,
case of
notify the 1ocal 4ffice
and in the
of the U. S. Customs Special Agent in Charge, and where
applicable, also to file the required Criminal Referral Form with
the bank regulatory agency. Xn order to prevent the use of
financial institutions by money launderers and other criminals,
currency transaction reporting and recordkeeping must be coupled
with the reporting of possible violations of law or regulation.
46: Re uire that: (A) when an institution, t icall a bank,
receives a 103.25 tar etin order it must obtain to the extent
ossible, information from other domestic banks involved in the
transfer re ardin the identit of the ori inator or beneficiar
of the transfer; and (B) that those other domestic banks
coo crate in rovidin
this information on a timel basis to the
tar eted institution
Because the recordkeeping
requirements
being proposed
should
obviate the need for financial
institutions to obtain additional
information from other financial institutions in order to respond
to a targeting order issued under 31 C. F.R. 103.25, Treasury has
decided not to pursue this option.
I:Md
5
wire transfers,
d
such as
d
'
''
It tt
transfers
'
'
I,
f
~lt
~f
of credit in the books of a
t
3
lilt. tf
-17that
information
ma
be re
uested.
transfers generally are transfers of credit between
can be
These institutions
affiliated financial institutions.
foreign and domestic branches or subsidiaries of the same
financial institution corporation, for example, a corporation's
Book
New
York branch
affiliates
systems
may
through
telephone.
and
its
U. K. branch.
be made without
private
Under
Transfers
between
use of any wholesale
communication
systems
wire transfer
or even by
the Bank Secrecy Act regulations,
Part 103, a foreign branch is treated as a separate
31 C. F.R.
financial
institution.
financial institutions offered no objection to this
proposed provision, they raised several questions about
Treasury's purpose in adding a category for international book
transfers not involving the use of wholesale wire transfer
systems to 31 CFR 103.25. The commenters requested that Treasury
be very clear about what it was referring to and asked Treasury
to define all terms. Several commenters noted that they treated
book transfers the same way as they treat all other types of
funds transfers, and that book transfers should be subject to the
Several commenters
same regulations
as other funds transfers.
stated that they do not have foreign branches or do not z book
While most
transfers.
-18Treasury
has decided to specify that records relating
types of funds transfers
by banks
and
transmittals
to +l
of funds
by
institutions other than banks may be requested in any
order issued under section 103.25. The term "funds transfer
The
defined in the proposal would include book transfers.
proposal also specifies that if an order issued under section
financial
103 ' 25 calls for information
about funds
transfers
or funds
financial institutions other than banks, all
information required to be maintained with respect to the
ransfer required in proposed subsections 103.33(e) and (f) could
be required to be furnished.
transmittals
by
PROPOSED AMENDMENTS
Several amendments
Funds
Transfers
throu
are being proposed today.
h
Banks
Definitions
Initially,
is
that several additions be made
to the definitions section of the regulations, section 103.11, to
cover the funds transfer terminology used in the other proposed
regulations.
31 C. R. F. 103.11. In response to the comments,
most of the proposed definitions are based upon proposed UCC
Article 4A definitions dealing with funds transfers.
Treasury
proposing
-19A
definition
above, a
~i th the originator's
making
beginning
order, made for the purpose of
to the beneficiary of the order. The term
payment
includes
As noted
of funds transfer has been proposed.
funds transfer is a series of transactions,
payment
order issued by the originator's bank-or an
bank intended to carry out the originator's
payment
any payment
intermediary
order. Definitions of the various parties in a funds transfer
also are being proposed. The ori inator or ori inator of a
'
~
transfer.
The
h
'
p
g
beneficiar
h
'
or beneficiar
'
of
'
'
a
f
a
E
~
ent order
is
to be paid the proceeds of the funds transfer. The
ori inator's bank is the first bank to send a payment order to
carry out the originator's order. The beneficiar 's bank is the
bank that pays the beneficiary of the payment order.
An
intermediar
bank is a financial institution
in the funds
transfer process which is neither the originator's nor the
beneficiary's bank.
the person
41:
bookseller, wishes to send
$5, 000 to Allingham Books in London to pay for books she is
selling at her store. She goes to her bank, the Bank of Hain
Street, and requests that $5, 000 be transferred from her account
to the account of Allingham Books in London at Kensington Bank.
bank in the New York
The Bank of Hain Street uses a participant
Example
Clearinghouse's
with which
it
Ashley
Hartin,
Interbank
a Kansas
Payments
has a correspondent
System
(CHIPS), CHIPSBank,
relationship,
to
make
the
-20transfer
to the Kensington Bank, with which CHIPSBank has a
correspondent relationship.
Xn this example, Ashley Nartin is
the originator of the payment order; the Bank of Main Street is
the originator's banks Allingham Books is the beneficiary of the
payment order; Kensington Bank is the beneficiary's
bank
CHIPSBank is the intermediary
bank. Some funds transfers may
have more than one intermediary
bank in the funds transfer chain,
depending upon the correspondent
relationships of the banks
involved.
retention of the "date"
of the funds transfer. There are two relevant dates, definitions
of which are proposed. The Execution Date is the date upon which
a payment order is to be issued; normally the execution date is
The proposed
regulations
will require
~
the date upon which the order
h
d
d
day on which
Many
d
.
*h
the beneficiary's
is received
bank
d
is to
by the bank
d
d
pay the
t
originating
d
'
h
beneficiary.
times, these two dates are the same.
42: John James of Chicago requests his bank to send
$500 from his savings account on July 6 to his mother Nary Jones
in Omaha, payable immediately.
The bank receives the request for
the transfer on July 6th and sends out the payment order the same
day. Mary Jones' bank receives the payment order on July 6th and
immediately credits her account for $500. Zn this example,
July
Example
6th
is
both the execution
date and the payment
date.
-21A
definition
of
'
d
order" also is being proposed-
payment
'
'
f
*
p
'""
~ &
orally, electronically, or in writing, to pay, or to
cause another bank to pay, a fixed or determinable amount of
(but does not include ACH payment orders)
money to a beneficiary
if: (a) the instruction does not state a condition to payment to
transmitted
bank
is to
(b) the receiving
account of, or otherwise
other than time of payment;
the beneficiary
be reimbursed
by
debiting
an
receiving payment from, the sender; and (c) the instruction
transmitted by the originator of the payment order directly
the originator's
communication
and
example,
through
other
a
its foreign
Enhanced
Recordkee
is
internal
bank's
and domestic
in
for
system,
or
funds
transfers
but also covers book
systems,
of transmitting
ways
transfer
not only traditional
wire transfer
wholesale
entries,
links
includes
funds
to
to the receiving bank.
for transmittal
system
This definition
through
or to an agent,
bank
is
funds
for
system that
by banks,
communication
affiliates.
Funds
Transfers
institutions be required
to retain specific information concerning funds transfers except
funds transfer between domestic banks for their own accounts.
Treasury
proposing
that financial
regulations, the only information required is a
record of the advice, instruction, or request for international
Under
current
-22transfers over $1p, ppp. However, the regulation does not
specify what information must be contained in the records
result, many financial institutions have complete, compre'hensive
information on their funds transfers, while other financial
institutions have almost none, making it very difficult for law
enforcement to trace the money and for Treasury to use its
funds
Drug and
targeting authority under 31 C. F.R. 103.25 effectively.
other illegal-source money is being sent through the funds
in all amounts.
transfer system domestically and internationally,
is
that the originator's bank retain the
following information for each funds transfer:
(1) the name of the originator of the payment order, and the
Treasury
originator's
proposing
if
applicable;
(2) unless the originator is a publicly traded corporation,
public utility, or government agency, the name of any person on
whose behalf the funds transfer was originated,
if different from
the originator (1);
(3) the amount of the funds transfer;
(4) the execution date of the funds transfer;
(5) the payment instructions, if any;
(6) the identity of the beneficiary's bank; and
(7) the name of the beneficiary of the payment order, and the
account number, if applicable.
Treasury
account number,
also is proposing
that
a bank which
acts as
an
-23retain whatever information it receives from
the preceding bank, be it the originator's bank or another
intermediary
bank
intermediary
bank.
Finally, Treasury is proposing that a bank retain the following
information for each funds transfer for which it is the
beneficiary's bank:
(1) the name of the beneficiary of a payment order (whether or
and the account number, if
not a deposit accountholder),
applicable;
(2) unless the beneficiary is a publicly traded corporation,
public utility or government agency, the name of any person on
whose behalf the funds transfer was received, if different from
the benef i ci ary
(3)
(4)
(5)
(6)
(7)
(l );
of the funds transfer;
the amount
the payment
date of the funds transfer;
instructions, if any;
the identity of the originator's bank; and
the name of the originator of the payment order,
the payment
account number,
if
applicable
and the
and known.
retrievable by the
name of the originator
and the account number of the ori ginator,
if applicable, for an originator's bank, and by the name of the
beneficiary and the account number of the beneficiary, if
applicable, for a beneficiary's bank. As with other records
Treasury
is proposing that these records
be
-24the Bank Secrecy Act, these records may be
maintained on paper, microfilm or microfiche or magnetic tape so
long as they are available in readable form when requested by the
maintained
Treasury
under
Department
agency. See 31
CFR
or other law enforcement
or regulatory
103.32.
will consider comments regarding a possible delayed
effective date for certain provisions until proposed changes in
the format of wire transfer messages for wholesale wire transfer
systems can accommodate the additional information.
Treasury
The term
"on whose behalf" has the same meaning
with respect to currency
transactions
reportable
that
under
it
has
31 C. F. R.
103.22. For further guidance in this area, financial
institutions may refer to Bank Secrecy Act Administrative Ruling
89-S, dated December 21, 1989, (SS FR 1021, January 11, 1990)
discusses "on whose behalf" in the context of currency
transactions reportable under 31 C. F.R. 103.22.
which
to be receptive to alternative suggestions
for recordkeeping that would minimize costs to banks without
jeopardizing the underlying purpose of these regulations,
including suggestions for possible additional exemptions from
Treasury
continues
these requirements.
Tf in the future,
if
Treasury
requires
reporting
of funds
-25transfers, the information reported may also include the
of the originator, for a report by an originator's bank,
address of the beneficiary, for a beneficiary's bank.
osit Accountholder
Nonde
is
and the
Transactions
special identification verification and
recordkeeping procedures for a bank that acts as an originator's
bank for a funds transfer for a customer who does not have a
deposit account at the institution.
Treasury is proposing that
in that instance, prior to the initiation of the funds transfer,
the bank must verify the name and address of the person
requesting the funds transfer, and maintain a record, in addition
to any other required information, of that person's name,
address, social security number, and date of birth.
Treasury
if
Similarl',
customer
proposing
who
a bank
acts as
a
beneficiary's
does not hold a deposit
bank
for
a
account at that institution,
of the beneficiary
and maintain a record, in addition to any other required
information, of the beneficiary's name, address, social security
number, and date of birth prior to payment of the funds.
the bank must verify the
name
and address
Time Deadlines
Treasury
is proposing that
a domestic
bank which
.
ts as
-26for a funds transfer have the
required information prior to the initiation of the funds
transfer. Because the originator's bank is located in the United
originator
States, the
or originator's
bank
should
bank
be able
prior to initiating
intermediary bank merely will retain whatever
information
The
to obtain the required
the particular payment order-
received from the originator's bank or intermediary
preceding it in the chain of the funds transfer.
information
is
bank
financial institution which acts
a beneficiary who is not a deposit
as a beneficiary's bank
accountholder have the required information prior to payment of
the funds. A bank which acts as a beneficiary's bank with
respect to a funds transfer for a deposit accountholder would be
required to have the required information within 15 days after
payment of the funds transfer to the beneficiary of the payment
order if the information is not available at the time of payment.
Treasury
is
proposing
that
for
a
In the case of a deposit accountholder,
if
the beneficiary's
to secure the necessary information,
including the name of the foreign originator, either from the
information accompanying the payment order or by contacting the
deposit accountholder, it shall nevertheless not be deemed to be
in violation of the Bank Secrecy Act if: (1) it made a reasonable
effort to secure such information, and (2) it maintains a list
containing the names, addresses, and account numbers of the
bank has been unable
-27beneficiaries
of
information.
The names,
payment
orders on which there
is
addresses
numbers
and account
incompl~te
would
be
to the Secretary upon request. This is similar to
the requirement to obtain taxpayer identification numbers by
available
made
banks,
dealers
CFR
securities brokers
and
exchangers.
103.36(a); 31
and
31
dealers, casinos,
CFR
103.34(a); 31
and currency
CFR
103.35(a) ' 31
103.37(a). Treasury suggests that possible
CFR
efforts" would include contacting
accountholder by letter or telephone and then
letter if there is no response to the initial
"reasonable
the deposit
sending
a follow-up
communication.
stresses that it is not requiring that United States
financial institutions contact foreign financial institutions for
information.
any additional
Treasury realizes that a foreign
financial institution may be precluded from providing any
Treasury
information
because of
its financial
privacy
laws.
Thus,
is requiring
that United States financial institutions
obtain the necessary information from its U. S. customers.
Treasury recognizes that in situations where both the originator
and beneficiary are outside the U. S. all of the information may
not be obtainable due to the operation of foreign secrecy laws.
Treasury
These transactions
enforcement
the United
Nonbank
are of far less interest to U. S. law
than transactions that begin and end in
generally
authorities
States.
Transmitters
of
Funds
-28parallel
recordkeeping requirements on financial institutions subject to
the recordkeeping and reporting requirements of the Bank Secrecy
Act, other than banks, which transmit or receive funds for
As noted
domestically
These
above, the proposed
and
institutions
internationally.
may
regulations
impose
See. 31 C. F.R.
be doing business
l03-11(i).
as telegraph
or check cashers or "fronting" as other businesses,
companies
typically as
travel agencies. The methods of transmitting funds by non-bank
The funds may be
financial institutions also are diverse
transmitted through funds transfers through banks, through
private communications systems or by a telephone directive to
transfer credit in a corresponding nonbank financial institution,
such as a foreign exchange dealer in Latin America.
However
accomplished, records relating to these transmittals of funds and
their receipt are of comparable law enforcement interest to
records of funds transfers through banks.
Therefore, Treasury is proposing that financial institutions,
other than banks, that transmit funds for customers or receive
financial institutions or foreign financial
agencies for payment to any person be required to retain specific
information about such transmittals or receipts of funds.
funds
from other
institution transmitting funds would be
required to maintain a copy of any application or form the person
initiating the transmittal completes and to record the following
A
nonbank
financial
-29information
own
(A)
prior to transmitting
funds
for
any person
or on
its
behalf:
the name, address,
social security
number,
and date
of birth
of the person instructing that the funds be transmitted and the
account number, if applicable;
(B) the name of any person on vhose behalf the funds vere
transmitted if different from (A);
(C) the amount of funds transmitted;
(D) the date of the funds transmission;
(E) any payment instructions;
(F) the identity of the person or financial institution
receiving the funds on behalf of the recipient; and
(G) the name and address of the recipient of the funds
transmitted, and account number, if applicable.
f ~aneial institution receiving a transmittal of
funds would be required to maintain a copy of any form or receipt
the person receiving the funds completes and to record the
following information prior to making payment to any person:
A
(A)
nonbank
the name,
address,
social security
number,
and date
of the person receiving the funds and the account number,
applicable;
(8) the name of any person on whose behalf the funds are
received if different from (A);
of birth
if
-30(Q)
(D)
of funds received;
the date the funds were received;
any payment instructions;
the identity of the person or financial
the amount
the funds on behalf of the person
transmitting
transmittal
(G)
the
As in the
who
instructed
of funds; and
name
transmittal,
institution
of the person who ordered the funds
account number, if applicable and known.
and address
and
for
institution
case of banks dealing with funds transfers
financial
transmitting funds would be required to verify and record the
identity of the person instructing the transmittal prior to
transmitting funds, and a nonbank financial institution receiving
funds would be required to verify and record the identity of the
nondeposit
person
accountholders,
receiving
payment
a nonbank
prior to
making
Similar to records of funds transfers
payment.
maintained
by banks,
financial institutions will be required to maintain these
records such that they would be retrievable by Treasury or
another law enforcement agency by the name of the person
instructing the transmittal and by the account number of that
person, if applicable, for a financial institution transmitting
funds, and by the name of the recipient for financial
institutions receiving funds. These records would have to be
maintained on-site at the financial institution transmitting
or
nonbank
-31receiving the funds and like all other records under the Sank
Secrecy Act, vould have to be retained for five years.
recordkeeping
institutions
regulations.
The
for
costs to non-bank financial
the underlying purpose of these
is receptive to alternative
Treasury
that vould minimize
without jeopardizing
following
recordkeeping
of these
of the application
are examples
for
requirements
suggestions
nonbank
financial
institutions:
resident, wishes to send
$2, 500 to her son Peter in Maine. She goes into the local agent
of a telegraph company, tenders the funds and arranges to have
payment made to her son at the office of the agent of the
43:
Example
telegraph
funds.
Nary Daker,
a
California
in Maine where Peter Daker then picks up the
company
The agency
in California
communicates
the payment
to the agency in Maine through the telegraph
company's private communication network and deposits the currency
to the agency's own account in California.
instruction
The
telegraph
company
agency in California
is
a nonbank
financial institution and its transmittal of funds would be
subject to the recordkeeping requirements of proposed section
103.33(g), including the requirement that Nary Daker's identity
The record ~ould have to be mai ntained
be verified and recorded.
-32on-site at the California agency
The telegraph company agency
in Maine receiving the instruction to make payment to Peter is a
nonbank financial institution
receiving a transmittal of funds
It would be subject to the recordkeeping requirement of proposed
section 103.33(f), including the requirement that Peter' s
identity be verified and recorded. The record would have to be
maintained on-site at the Maine agency. There is no funds
transfer involving a bank in this example.
~
Example
44:
Sun and Fun
its
Travel Agency, which also transmits
is
financial institution for
purposes of the Bank Secrecy Act regulations.
Robert Smith is a
customer who wishes to send $500 to his grandmother,
Maria. Smith,
in Peru. Robert Smith gives $500 to Sun and Fun by a personal
check. Sun and Fun contacts a foreign currency broker in Peru
with ~hich it has an established relationship.
The currency
broker debits an account in the name of Sun and Fun in Peru, and
pays Maria Smith $500. Sun and Fun is acting as the transmitter
of funds and must record this transaction prior to initiating it
under proposed section 103.33(f). Sun and Fun deposits Robert
Smith's check to its account at a local bank and this transaction
would be subject to the recordkeeping
requirement in proposed
section 103.33(f)(2). Sometime later, Sun and Fun will originate
a payment to the foreign currency broker covering a number of
similar transactions by arranging a funds transfer through its
bank to the account of the foreign currency broker in a bank
in
funds
on
behalf of
customers
a
-33Peru.
Sun and
Fun's bank, as an originator
bank, ~ould be
at that time to make a record of the transaction
required by proposed section 103.33(e).
required
as
45: Casa Check Casher in New York City operates out of
a storefront in an ethnic community containing many recent
immigrants.
Casa is a financial institution under the Bank
A customer
Secrecy Act regulations.
gives Casa $3, 000 (in any
form, ~e . , cash, check or money order) to send to his mother in
his native country.
Casa does not have the ability to arrange
for a transmittal of funds directly.
Instead, Casa goes to Bank
A, its local bank, ~here it has a deposit account and arranges
for its account to be debited $3, 000 and for that amount to be
transferred through a funds transfer to Bank B, a bank in the
Example
Bank B will arrange payment
of Casa's customer.
to the customer's mother. In this situation, Casa ~ould be
native
country
to keep the records required by proposed section
103.33(f)(1)(i ) as a financial institution transmitting funds.
required
A
separate
bank would
record of the funds transfer
be maintained
103.33(e)(1)(i). Casa
transfer. Its customer
was
originating
Tar etin
Orders
payment.
by
would
originated by Casa's
Bank A pursuant
to proposed section
be the originator of the funds
would
be the person
on whose
behalf Casa
is
that in section 103.25, which permits
Treasury to issue orders to financial institutions to require
reports of certain types of transactions with foreign financial
agencies, be expanded to include in the case of a bank receiving
Treasury
proposing
order, all funds transfers, including book entries,
case of financial institutions other than a bank, all
transmittals or receipts of funds by the institution.
an
and
in the
The
information
that could be requested in the order would be the
same information
required to be maintained under proposed
subsections 103.33(f) and (g).
Example
46:
James Smith,
Metrobank
a customer
has branches
of Metrobank
in
in
New
New
York and London.
York, wishes
to
make
to Michael Blank, a customer of Metrobank in London, for
paintings.
He requests Metrobank
New York to debit his
payment
some
account $50, 000 and credit
it
to Michael Blank in London.
Metrobank New York telephones Metrobank London to convey Mr.
Smith's payment order. The bank notes in its account records
that $50, 000 was moved from one of its accounts to another.
Information required to be retained pursuant to proposed section
103.33(e) about this transaction could be requested in an order
issued under section 103.25.
SUBMISSION OF COMMENTS
-35all interested persons
concerning the proposed amendments.
While comments on all
aspects of the regulations are welcome, Treasury is particularly
Treasury
requests
comments
from
interested in receiving comments on how long financial
institutions will need to put new regulations into effectTreasury also is interested in comments on the appropriate format
for maintaining the required records in machine-readable
form if
it is determined to implement routine reporting in the future.
All comments received before the closing date will be carefully
considered.
Oral comments must be reduced to writing and
submittec to Treasury to receive consideration.
Comments
received after the closing date and too late for consideration
will be treated as possible suggestions for future action. The
Treasury
including
Department
the
name
confidential.
Any
will not recognize
any
materials
or comments,
of any person submitting comments, as
material not intended to be disclosed to the
public should not be included
in comments.
All comments
will be availab'e for public inspection during the
hours that the Treasury Library is open to the public.
The
Treasury Library is located in Room 5030, 1500 Pennsylvania Ave. ,
must be made to view
N. W. Washington,
D. C. 20220. Appointments
the comments.
Persons wishing to view the comments submitted
should contact the Office of Financial Enforcement at
submitted
(202)566-8022.
EXECUTIVE ORDER
12291
-36In the Advance Notice of Proposed Rulemaking,
commenters
to provide information
Treasury
asked
about the cost of implementing
for enhanced
Treasury did not receive detailed comments in
recordkeeping.
this regard which would lead us to conclude that this proposed
rule if adopted as a final rule, would be a major rule for
purposes of Executive Order 12291. Therefore, we have no basis
to believe that the proposal will have an annual effect on the
economy of $100 million or more.
It will not result in a major
increase in costs or prices for consumers, individual industries,
Federal, state, or local government agencies, or geographic
regions. It will not have any significant adverse effects:on
competition, employment, investment, productivity, innovation, or
on the ability of United States-based enterprises
to compete with
foreign-based enterprises in domestic or foreign markets. A
the various
Regulatory
proposals
Impact Analysis
Treasury will entertain
REGULATORY
It is
including
the proposal
therefore
comments
on
is not required.
However,
this point.
FLEXIBILITY ACT
certified under section 605(b) of the Regulatory
Flexibility Act, 5 U. S.C. 601& et ~se . , that this proposed rule,
if
hereby
adopted,
substantial
recordkeeping
institutions,
«ill
not have a significant
economic impact on a
of small entities. The requirements for
will affect a number of small non-bank financial
but we do not believe that the requirements will
number
-37pose a substantial
REDUCTION
PAPERWORK
The
recordkeeping
Rulemaking
on
those
entities-
ACT
collections of information
Proposed
burden
contained
in this Notice of
to the Office Cf
Management
and Budget for review in accordance ~ith the Paperwork
Reduction Act of 1980 (44 U. S. C. 3504(h)). Comments on the
collections of information and the burden estimate should be
directed to the Office of Financial Enforcement at the address
noted above or to the Office of l'anagement and Budget, Paperwork
Reduction Project (1505-0063), Vashington, D. C. 20503.
The
have been submitted
collections of information
in this regulation
are
by 12 U. S. C. 1829b and
authorized
1951-1959 and 31 U. S. C.
5311-5326. The likely recordkeepers are banks that perform funds
transfers or other financial institutions performing transmittals
of funds for themselves or other persons.
Estimated total annual reporting and/or recordkeeping burden:
7. 5 million hours.
Estimated
recordkeeper:
average
burden
per respondent
and/or
87 1/2 hours.
Estimated
number
Estimated
annual
DRAFTING
annual
INFORMATION
of respondents and/or recordkeepers: 40, 000
frequency of responses:
Upon request.
-38principal author of this document is the Office of the
Assistant General Counsel (Enforcement).
However, personnel from
other offices participated in its development.
The
LIST
31
OF SUBJECTS IN
Authority
Currency,
Reporting
delegations
CFR PART
103
agencies), Banks and banking,
Foreign banking, Investigations,
Law Enforcement,
and recordkeeping
Taxes.
requirements,
(Government
PROPOSED AMENDMENT
set forth in the preamble,
Part 103 as set forth below:
For the reasons
31
amend
PART
CFR
--
103
FINANCIAL
FOREIGN
TRANSACTIONS
1.
authority
The
RECORDKEEPING
AND
citation for Part 103
it is
REPORTING
would
proposed
to
OF CURRENCY AND
continue
to read as
follows:
Authority:
Pub. L. 91-508,
Title
I,
84
Stat. 1114 (12
U. S.C.
1829b and 1951-1959); and the Currency and Foreign Transactions
Reporting Act, Pub. L. 91-508, Title II, 84 Stat. 1118, as
amended
(31
U. S. C.
5311-5326).
-39-
2. It is
section 103.11
redesignating
present paragraphs (c) through (h) as (e) through (j) ' present
paragraphs (i) through (k) as (1) through (n); present paragraphs
(1) and (m) as (q) and (r); present paragraphs (n) through (q) as
(v) through (z); present paragraphs (r) through (u) as (aa)
through
(p), (s)
I 103.11
* *
proposed
to
amend
(dd);
and by adding
(t),
(u) and (v),
Meaning
new
paragraphs
all to
by
(c), (d), (k). (o)r
read as follows:
of Terms.
o
(c) Beneficiar
or Beneficiar
order. The
beneficiary of a payment order, ~ith respect to a funds transfer,
is the person to be paid the proceeds of the funds transfer.
Beneficiar 's bank.
a funds transfer,
is the
payment order.
(d)
The
bank
of
a
a ment
beneficiary's
respect to
that pays the beneficiary of the
bank, with
(k) Execution Date. In connection ~ith a funds transfers the
execution date is the date upon which a payment order is to be
issued; normally the execution date is the date upon which the
order
~
0
is received
by the
originator's
bank.
-40(o) Funds Transfer. Funds transfer means the series of
transactions, beginning with the originator's payment order,
for the purpose of making payment to the beneficiary of &he
made
order. The term includes any payment order issued by the
originator's hank or an intermediary bank intended to carry out
the originator's payment order. A funds transfer is completed by
acceptance by the beneficiary's bank of a payment order for the
benefit of the beneficiary of the originator's payment order.
hank. An intermediary bank, with respect to a
(p) Zntermediar
funds transfer, is a bank in the funds transfer chain which is
neither the originator's nor the beneficiary's bank.
(s)
of
order. The originator
funds transfer, is the
or ori inator of a
Ori inator
a ment
order, with respect to a
person causing the initiation of a funds transfer.
(t)
a payment
inator's bank. The originator's bank, with respect to
funds transfer, is the first bank to send a payment order to
carry out the originator's order.
Ori
. t
~
p y
t
~
y
the day on which the amount of the order
y
is
t
~
payable
to the
beneficiary.
~
.
p y
~
'
'
y
a
-41person given to a receiving
bank,
transmitted
orally,
electronically, or in writing, to pay, or to cause another bank
to pay, a fixed or determinable amount of money to a beneficiary
{but does not include ACH payment orders) if: {a) the instruction
does not state a condition to payment to the beneficiary other
than time of payment; {b) the receiving bank is to be reimbursed
by debiting an account of, or otherwise receiving payment from,
the sender; and (c) the instruction is transmitted by the
originator directly to the originator's bank or to an agent,
transfer system,
the receiving bank.
funds
or communication
system
for transmittal
to
* * *
3. It is
revising
*
N
4
to amend paragraph
to read as follows:
proposed
it
(b)(2) section 103.25(b)(2)
*
103.25 Report of transactions
with foreign
financial
agencies.
*
{b)
4 4 o o o
of funds received by
institution from a foreign financial agency
respondent
or sent by respondent financial institution to a foreign
financial agency, including all information required to be
{2)
Funda
transfers
financial
or transmittals
-42with respect to such transaction
maintained
by
subsections
103.33(e) or (f) of this subpart.
4. It is
proposed
(e)
subections
and
to
section 103.33
(f) to read as follows:
103.33 Records to
institutions.
S
(e)(l)
A
bank
amend
be made and retained
(A)
hy
of-
the originator's
the
name
account number,
a new
financial
shall retain either the original
other copy or reproduction
(i) the following information
it is
by adding
or a microfilm
for each funds transfer
for
which
hank:
of the originator
of the payment
order,
and the
if
applicable;
(B) unless the originator is a publicly traded corporation,
public utility or government agency, the name of any person
whose behalf the funds transfer w'as originated,
if different
on
from
(A)
of the funds transfer;
execution date of the funds transfer;
payment instructions,
if any;
identity of the beneficiary's bank; and
name of the beneficiary of the payment order,
(C)
the amount
(D)
the
(E)
the
(F) the
(G)
the
or
and the
-43-
i f applicable.
account number,
(ii)
any
acting as an intermediary bank for a funds transfer,
information received by the institution by the originator's
when
or another
bank
(iii)
the following
it is
vhich
(A)
intermediary
the
bank;
the beneficiary's
name
whose
of the
payment
order,
and the
if
applicable;
(B) unless the beneficiary is
utility
for
bank:
of the beneficiary
account number,
public
for each funds transfer
information
or government
a
publicly
agency,
behalf the funds transfer
the
traded corporation,
name
vas received,
of any person
if different
on
from
(A)'
(C)
(D)
of the funds transfer;
the payment date of the funds transfer;
the amount
instructions, if any;
(F) the identity of the originator's bank; and
(G) the name of the originator of the payment order, and the
account number, if applicable and known by the beneficiary.
(2)(i)(A) A bank which acts as the originator's bank with
respect to a funds transfer for a deposit accountholder aust
(E)
the payment
obtain the information
required
in paragraph
(f)(1)(i) prior
of the first payment order.
(S) Prior to acting as an originator's bank vith respect to
funds transfer for a nondeposit accountholder,
the financial
institution must verify the originator's name and address by
examination of a document that contains the name and address of
the initiation
-44that information and the type and
The bank
reviewed.
documentation
number of the identification
shall maintain a record, in addition to the information required
in paragraph (e)(l)(i), of the person's name, address, social
security number, end date of birth.
(ii)(A) A bank which acts as a beneficiary's bank with respect
the originator
to
transfer
a funds
information
after
and record
for
required
payment
a
deposit accountholder
must
(F)(1)(iii)
within
in paragraph
of the funds transfer
institution
event that a financial
containing
information,
the names,
it
addresses,
15 days
In the
to the beneficiary.
has been unable to secure the
shall nevertheless
in violation of this section if (1) it has
effort to secure such information, and (2)
required
obtain the
not be deemed to be
made
it
and account
a reasonable
maintains
numbers
a
list
of those
originating funds transfers on which there is incomplete
information.
The names, addresses and account numbers shall be
made available
to the Secretary upon request.
(B) Prior to acting as a beneficiary's bank with respect to a
funds transfer for a nondeposit accountholder,
the bank must
verify the name and address of the beneficiary of the funds
transfer by examination of a document that contains the name and
address of the beneficiary and record that information and the
type and number of the identification document reviewed.
In
addition, the bank also must maintain a record, in addition to
persons
the information
person's
name,
required
address,
in paragraph
social security
(e)(1)(iii),
number
and
of the
date of birth.
-45(4)
The information
required
in paragraph
(e)(1)(i) to
be
originator's bank shall be retrievable by the
name of the originator
of the funds transfer and by the
originator's account number, if applicable
The information
required in paragraph (e)(l)(iii) to be maintained by the
beneficiary's bank shall be retrievable by the name of the
beneficiary of the funds transfer and by the account number of
the beneficiary, if applicable
(5) Funds transfers between domestic banks for their own
accounts are not subject to the requirements of this paragraph
maintained
by the
(e).
(f)(1)(i )
financial institution (other than a bank) that
transmits funds for a person or on its o~ behalf shall retain
the original or a microfilm or other copy or reproduction of the
following information or record ~ith respect to each transmittal
A
of funds:
social security number, and date of birth
of the customer instructing that the funds be transmitted and the
account number, if applicable;
(B) the name of any person on whose behalf the funds vere
transmitted if different from (h);
(A)
the name,
(C)
the amount
address,
(D)
of funds transmitted;
the date of the funds transmittal;
(E)
any payment
instructions;
-46(F) the identity of the person or financial institution
receiving the funds on behalf of the recipient;
(G) the name and address of the recipient of the funds
transmitted, and account number, if applicable, and
(H) any application or form completed by the person instructing
the transmittal
(ii)
relating to the transmittal.
Prior to transmitting
verify the
transmittal
name
and address
funds,
and address
by examination
the financial
institution
of the person instructing the
of a document that contains the
of the person and record that information
must
name
and the
of the identification document reviewed.
(2)(i) A financial institution (other than a bank) that receives
funds for any person or on its own behalf, shall retain the
original or a microfilm or other copy or reproduction of the
following information with respect to each transmittal of funds
type and number
it
(A)
receives:
the name, address,
social security
number,
and
date of birth
of the person receiving the funds and the account number, if
applicable;
(B) the name of any person on whose behalf the funds were
received if different from (A);
(C) the amount of funds received;
(D) the date the funds were received;
(E) any payment instructions;
-47(F) the identity of the person or financial institution
transmitting the funds on behalf of the person who instructed
transmittal of funds;
(G) the name and address of the person ~ho ordered the funds
transmittal, and account number, if applicable and knoll; and
any receipt or form completed by the recipient relating to
(H)
the receipt of funds.
(ii)
Prior to disbursing
verify the
transmitted
and
address
name
funds,
and address
by examination
of the recipient
the financial
institution
must
of the person receiving the funds
of a document that contains the name
and
record that information.
(3) The information required in paragraph (f)(l)(i) by the
financial institution transmitting funds shall be retrievable by
the name of the customer instructing the funds to be transmitted
and by the customer's account number, if applicable, and shall be
maintained at the location of the branch, agency or office of the
The information
financial institution making the transmittal.
required in paragraph (f)(2)(i) by the financial institution
receiving a transmission of funds shall be retrievable by name of
the funds recipient of the funds transmitted and shall be
maintained at the location of the branch, agency or office of
financial institution receiving the transmittal.
-48Dated:
1990
Peter K.
Assistant
Nunez
Secretary
(Enforcement)
Department
FOR IMMEDIATE
of the Treasury
E
DEBT
PUBLI
~
Bureau of the Public Debt
RELEASE
~
M'ashinyon,
DC 20239
Of fice
of Financing
202/376-4350
CONTACT:
October 15, 1990
RESULTS OF TREASURY'S WEEKLY BILL AUCTIONS
Tenders for $9 ' 401
million of 13-week bills and for $9. 442 million
of 26-week bills, both to be issued on October 18, 1990, were accepted today.
OF ACCEPTED
COMPETITIVE BIDS:
RANGE
13-week bills
Januar
17
Discount
Investment
7. 17%
7. 18%
7. 18%
26-week
1991
Tenders
Tenders
A
Discount
~~e
7. 40%
7. 41%
7. 41%
98. 188:
98. 185:
High
98. 185:
Average
a/ Excepting $1, 000, 000 at lower yields.
Low
at the high discount rate for the
at the high discount rate for the
ril
7. 20% '~
7. 23%
7. 22%
13-week
26-week
bills
18 1991
Investment
atu
bills
bills
7. 58%
7. 61%
7. 60%
96. 360
96. 345
96. 350
allotted
allotted
were
were
52%.
43%.
TOTAL TENDERS RECEIVED AND ACCEPTED
BY FEDERAL RESERVE DISTRICTS
~~ve d
Boston
New
S
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
27, 535
34, 405
56, 205
97, 820
33, 085
2, 189, 540
40, 765
15, 185
40, 995
34, 825
843, 655
30, 305
48, 345
47, 820
32, 085
116, 540
20, 765
10, 185
40, 995
TOTALS
S
33, 620
21, 581, 965
20, 190
31, 775
39. 660
33, 040
195
209,
2,
25, 265
12, 855
48, 780
S
33, 620
7, 515, 115
20, 190
31, 775
39, 660
33, 040
763, 710
897, 245
20, 125
10, 005
48, 780
28, 205
156, 710
607 315
$25, 438, 425
$9, 441, 785
$6, 940, 465
2, 044, 060
$21, 326, 460
1 236, 825
$22, 563, 285
2, 250, 000
$5, 329, 820
1 236, 825
$6, 566, 645
2, 250, 000
416, 760
$37, 540, 310 $9. 401, 285
625, 140
$25. 438, 425
625 140
$33, 469, 545
1, 609, 945
Subtotal, Public $35, 079, 490
Federal Reserve
2, 044, 060
Institutions
27, 535
8, 308, 410
Competitive
Noncompetitive
Foreign Official
S
~e~l
~vg
gr~~&$
33, 511, 380
614 915
$37, 540, 310
TOTALS
(In Thousands)
31, 055
24, 825
78, 560
614, 915
$9, 401, 285
$5, 330, 520
1, 609 945
416, 760
:
607 315
$9, 441, 785
additional $336, 440 thousand of 13-week bills and an additional $519, 060
for
thousand of 26-week bills will be issued to foreign official institutions
new cash.
An
Equivalent
coupon-issue
yield.
of ihe Treasury
apartment
FOR RELEASE AT
4:00 P. M.
October 16, 1990
~
Washlniton,
CONTACT:
D.C. ~ Telephone $44-204
Office of Financing
202/376-4350
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice,
invites tenders for two series of Treasury bills totaling approximately $19, 200 million, to be issued October 25, 1990. This offering will provide about $1, 875 million of new cash for the Treasury,
as the maturing bills are outstanding in the amount of $17, 336
million. Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington, D. C.
20239-1500, prior to 1:00 p. m. , Eastern Daylight Saving time,
Monday, October 22, 1990. The two series offered are as follows:
91-day bills (to maturity date) for approximately $9, 600
million, representing an additional amount of bills dated July 26,
1990, and to mature January 24, 1991 (CUSIP No. 912794 VS 0), currently outstanding in the amount of $9, 184 million, the additional
and original bills to be freely interchangeable.
182-day bills for approximately $9, 600 million, to be
dated October 25, 1990, and to mature April 25, 1991 (CUSIP No.
912794 WF 7).
a
easur will ost one the auc 'ons unless 't has assurThe
ce of enactment of le islation to ra'se the statutor
debt imit
e ore the scheduled auction date of October 22 199
The bills will be issued on a discount basis under competitive
and noncompetitive
bidding, and at maturity their par amount will
Both series of bills will be issued
be payable without interest.
entirely in book-entry form in a minimum amount of $10, 000 and in
on the records either of the Federal
any higher $5, 000 multiple,
Reserve Banks and Branches, or of the Department of the Treasury.
The bills will be issued for cash and in exchange for Treasury bills maturing October 25, 1990. In addition to the maturing
13-week and 26-week bills, there are $9, 769 million of maturing
52-week bills.
The disposition of this latter amount was announced
last week. Tenders from Federal Reserve Banks for their own account
monetary authorities will
and as agents for foreign and international
be accepted at the weighted average bank discount rates of accepted
Additional amounts of the bills may be issued
competitive tenders.
to Federal Reserve Banks, as agents for foreign and international
to the extent that the aggregate amount of
monetary authorities,
tenders for such accounts exceeds the aggregate amount of matur ng
bills held by them. For purposes of determining such additional
monetary authorities are conamounts, foreign and international
the
original 13-week and 26-week
sidered to hold $1, 259 million of
Federal
issues.
Reserve Banks currently hold $1, 439 .-. . illion as
for
foreign
and international
monetary au=hori=ies, ar. d $6, ;31
agents
for
their
own
account.
million
Thee amounts represent the c";.b net
of
such
bills.
accounts
for
the
t&. ree issues of ma:vari.
holdings
Tenders for bills to be maintained on t~e book-e, ". -y records of =he
Department of the Treasury should be sub~itted on Form PD 5176-1
~r Form PD 5176-2 (for 26-.-eek series).
t.
;.
~
TREASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 2
Each tender must state the par amount of bills bid for,
which must be a minimum of $10, 000. Tenders over $10, 000 must
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
A single
two decimals, e. g. , 7. 15%. Fractions may not be used.
as defined in Treasury's single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
bidder,
and dealers who make primary
Banking institutions
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers,
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
position in the bills being offered if such position is in excess
of $200 million. This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction. Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
each customer whose net long position in the bill being offered
exceeds $200 million.
if
A noncompetitive
bidder may not have entered into an
agreement, nor make an agreement to purchase or sell or otherwise dispose of any noncompetitive awards of this issue being
auctioned prior to the designated closing time for receipt of
tenders.
Payment for the full par amount of the bills applied for
must accompany all tenders submitted for bills to be maintained
on the book-entry records of the Department of the Treasury.
A cash adjustment
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined
in the auction.
deposit need accompany tenders from incorporated banks
companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches.
No
and
8/89
trust
TfUASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 3
Public announcement will be made by the Department of the
of the amount and yield range of accepted bids. Competitive bidders will be advised of the acceptance or rejection
of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g. , 99.923, and the determinations
of the Secretary of the Treasury shall be final.
Treasury
Settlement for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
on the issue date, in cash or other immediately-available
funds
or in Treasury bills maturing on that date. Cash adjustments
will be made for differences between the par value of the
maturing bills accepted in exchange and the issue price of the
new
bills.
If a bill is
is
held to maturity,
the amount of discount is reportable as ordinary income on the
Federal income tax return of the owner for the year in which
the bill matures.
Accrual-basis taxpayers, banks, and other
persons designated in section 1281 of the Internal Revenue Code
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
purchased
at issue,
and
of the Treasury Circulars, Public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtained
from any Federal Reserve Bank or Branch, or from the Bureau of
the Public Debt.
Department
8/89
~partment
of ihe Treasury
~
Washlnyton,
D.C. ~ Telephone $66-204
v
FOR RELEASE AT
4:00 P. M.
CONTACT:
October 17, 1990
TREASURY TO AUCTION
$12, 000
Office of Financing
202/376-4350
MILLION OF 2-YEAR NOTES
The Department of the Treasury will auction $12, 000 million
of 2-year notes to refund $10, 071 million of 2-year notes maturing
October 31, 1990, and to raise about $1, 925 million new cash. The
public holds $10, 071 million of the maturing 2-year notes, including $1, 075 million currently held by Federal Reserve Banks as
agents for foreign and international monetary authorities.
The $12, 000 million is being offered to the public, and any
amounts tendered by Federal Reserve Banks as agents for foreign
and international
monetary authorities will be added to that
amount.
Tenders for such accounts will be accepted at the aver-
age price of accepted competitive
tenders.
In addition to the public holdings, Federal Reserve Banks,
for their own accounts, hold $639 million of the maturing securities that may be refunded by issuing additional amounts of the
new notes at the average price of accepted competitive
tenders.
w'll ost one the auct'o unless it has assurhe Treasur
debt limit
ance of enactment o le is ation to raise he statutor
990.
befo e t e scheduled auction da e of Octobe 24
Details about the new security are given in the attached
highlights of the offering and in the official offering circular.
oOo
Attachment
Ne-990
HIGHLIGHTS OF TREASURY
OFFERING TO THE PUBLIC
OF 2-YEAR NOTES
TO BE ISSUED OCTOBER 31, 1990
October 17, 1990
Offered:
Amount
To the public
eoe
~ ~
oo
~ o ~ ~
oo
~ ~ o ~ ~ o
Descri tion of Securit
Term and type of security
Series and CUSIP designation
Maturity
date
Interest rate
yield
or discount
Interest payment dates
available
Minimum denomination
Investment
Premium
Terms
Method
of Sale:
of sale
Competitive
tenders
tenders
Noncompetitive
Accrued interest
payable by investor
Pa ent Terms:
Payment by non-
institutional
investors
$12, 000 million
2-year notes
AF-1992
(CUSIP No. 912827 ZL 9)
October 31, 1992
To be determined based on
the average of accepted bids
To be determined at auction
To be determined after auction
April 30 and October 31
$5, 000
Yield auction
Must be expressed
None
to be
with tender
Full payment
submitted
Deposit guarantee by
designated institutions
Acceptable
Receipt of tenders
Wednesday,
(final payment
due from institutions):
a) funds immediately
available to the Treasury
readily-collectible
b)
check
Settlement
as an
yield, with two
decimals, e. g. , 7. 10%
Accepted in full at the average price up to $1, 000, 000
annual
October 24, 1990,
prior to 1:00 p. m.
October 31, 1990
October 29, 1990
Wednesday,
Monday,
, EDST
~partment
of the Treasury
FOR IMMEDIATE
~
Washlnyton,
RELEASE
TREASURY POSTPONES
AUCTION
is necessary
legislation
action
on
permit
issuance of the
Investors
202/376-4350
BILLS
OF 52-WEEK
today that
announced
auction of 52-week bills originally
postponement
Office of Financing
CONTACT:
October 18, 1990
The Treasury
O.C. ~ Telephone 566-204
it is
postponing
scheduled
for today.
the
This
because Congress has not completed
to increase the statutory
bills
on October
debt limit to
25, 1990 '
are advised to look for notice of rescheduling
this auction in the financial press or to contact their local
Federal Reserve Bank or Branch for such information.
oOo
NB-991
of
~partment
of the Treasury
~
D.C. ~ Telephone $66-204
Washlnoton,
FOR IMMEDIATE RELEASE
October 18, 1990
CONTAC1: Office of Financing
202/376-4350
TREASURY OFFERS $12,500 MILLION
OF 69-DAY CASH MANAGEMENT BILLS
The Department of the Treasury, by this public notice, invites tenders for
approximately $12,500 million of 69-day Treasury bills to be issued October 19, 1990,
representing an additional amount of bills dated June 28, 1990, maturing December 27,
1990 (CUSIP No. 912794 VN 1).
i'v
n
r
tender for the issue
$10,000, 000 must be
expressed on a bank
not be used.
r
1
h
F
will
re
iv
li h
nl
vin
h
F
r
1
R
rv
r1
B nk
1 9
m Eat rnD
Each
im
Fri
must be for a minimum amount of $10,000, 000. Tenders over
in multiples of $1,000, 000. Tenders must show the yield desired,
discount rate basis with two decimals, e.g. , 7. 15%. Fractions must
titive
m
r
nd r will n t
W hin
Tr
rv Bnk
r 1R
e a ce
n
r
.
n
T
F
nd r will n
r l
R
r
rv
iv
a
he
rBrnh
Nw Y k.
The bills will be issued on a discount basis under competitive bidding, and at
The bills will be issued
maturity their par amount will be payable without interest.
entirely in book-entry form in a minimum denomination of $10,000 and in any higher
$5, 000 multiple, on the records of the Federal Reserve Banks and Branches.
Banking institutions and dealers who nake primary markets in Government securities and report daily to the Federal Reserve Bank of New York their positions in and
borrowings on such securities may submit tenders for account of customers, if the names
of the customers and the amount for each customer are furnished. Others are only permitted to submit tenders for their own account. Each tender must state the amount of
any net long position in the bills being offered if such position is in excess of $200
million. This information should reflect positions held as of 9:30 a. m. , Eastern time, on
the day of the auction. Such positions would include bills acquired through "when issued"
trading, futures, and forward transactions as well as holdings of outstanding bills with the
same maturity date as the new offering, e.g. . bills with three months to maturiti
previously offered as six-month bills. Dealers, who make primary markets in Government
securities and report daily to the Federal Reserve Bank of ~ew York their posItIons in
and borrowings on such securities, when submitting tenders for customers, must submit
a separate tender for each customer v hose net long position in the bill being offered
exceeds $'00 million.
-2No deposit need accompany tenders from incorporated banks and trust companies
and from responsible and recognized dealers in investment securities.
Public announcement will be made by the Department of the Treasury of the
amount and yield range of accepted bids. Those submitting tenders will be advised of
the acceptance or rejection of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in whole or in part, and the
Secretary's action shall be final. The calculation of purchase prices for accepted bids
will be carried to three decimal places on the basis of price per hundred, e.g. , 99.923.
Settlement for accepted tenders in accordance with the bids must be made or completed
funds
at the Federal Reserve Bank of New York in cash or other immediately-available
on Friday, October 19, 1990.
If a bill is purchased at issue, and is held to maturity, the amount of discount is
reportable as ordinary income on the Federal income tax return of the owner for the
year in which the bill matures. Accrual-basis taxpayers, banks, and other persons designated in section 1281 of the Internal Revenue Code must include in income the portion
of the discount for the period during the taxable year such holder held the bill. If the
bill is sold or otherwise disposed of before maturity, any gain in excess of the basis is
treated as ordinary income.
Department of the Treasury Circulars, Public Debt Series - Nos. 26-76 and 27-76,
and this notice prescribe the terms of these Treasury bills and govern the conditions of
their issue. Copies of the circulars may be obtained from any Federal Reserve Bank or
Branch.
DEBT
Department
of the
FOR IMMEDIATE
Treasu~
~
EW
Bureau oi the Public Debt
RELEASE
~ K%'ashington.
CONTACT:
October 19, 1990
$R',
DC 't' '.~"
Office of Financing
202/376-4350
RESULTS OF TREASURY'S AUCTION
OF 69-DAY CASH MANAGEMENT BILLS
The Treasury has accepted $12, 546 million of the $50, 380
million of tenders received at the Federal Reserve Bank of New
York for the 69-day Treasury bills to be issued October 19, 1990,
and to mature December 27, 1990, auctioned today.
The range of
accepted bids was as follows:
Discount
Rate
Low
High
Average
Tenders
fJB-993
7. 35%
7. 38%
7. 37%
at the
Rate
Investment
(E uivalent
Cou
on-Issue Yield)
7. 56%
7. 59%
7. 58%
high discount
rate
were
Price
98. 591
98. 586
98. 587
allotted
5%.
gartmont at the Trepelllv
FOR INMEDIATE
=rI i'- T,', le=.
L
TREASURY
auctions
:
RELEASE
October 22, 1990
The Treasury
D.t;. ~ Telephone ~ Se-eo
Office of Financing
CONTACT:
~ lvttglll1Nteh
POSTPONES
announced
-",
5'U, (&
AUCTIOtl
202/376-4350
OF MEEKLY
BILLS
!:at it is postponing the
bills originally scheduled for
today
of 13-week and 26-week
is necessary because legislation to
raise the statutory deb limit has not been enacted to permit
issuance of the bills on October 25, 1990.
Investors are advi ed "o look for notice of rescheduling of
these auctions in the financial pres" or "o contact their local
today.
This postponement
Federal Reserve Bank or Branch for such 'nformation.
oQo
~
04~
~
4~ ~h
&~+~M
~
'+4$hlnIton, D.C.
FOR IMMEDIATE RELEASE
AS PREPARED FOR DELIVERY
CONTACT:
10-23-90
~
Telephone 566-204
CHERYL CRISPEN
202-566-5252
RZ3CAfU& TO THE
EM1WGING MARKETS ADVISORY COMMITTEE
BY DEPUTY SECRETARY ZOHN ROBSON
TUESDAY, OCTOBER 2
1990
WASHINGTON,
D. C.
3,
Thank you, Richard (Breeden).
It is a great pleasure
be included among the EMAC participants at this conference.
There are many critical issues to discuss here, and I
appreciate your invitation.
to
least, 1989 and 1990 have been dynamic years
for international finance. On virtually every continent, we
are witnessing political and economic changes that will
To say the
influence
century.
foreign
and domestic
markets
democracies, political
in most cases, has occurred relatively
reform is far from over. As President
In the
new
well into the 21st
reform was quick and,
peacefully.
But, the
said:
half of the
Bush has
".. . the
eclipse of communism is only one
story of our time. The other half is the ascendancy of
the democratic idea. "
And, for all nations, we believe, the democratic idea
include a free-market economy. Already we are
witnessing profound economic reform in Eastern Europe and
Latin America, where countries are rebuilding economies from
the ground floor up.
must
Since last year, East Europeans have been busy creating
framework that will transform their
the institutional
We'
ve seen the introduction of concepts such as
economies.
Other new laws allow
private property and privatization.
freedom of decision in pricing, production, and the hiring
firing of employees -- decisions that
controlled by the government.
and
FJ8-995
were
traditionally
necessity, some Eastern European countries are
establishing market institutions before they have a market.
For example, countries have adopted regulatory laws -- with
little or nothing to regulate.
the emerging
And one of the major obstacles confronting
of a free
the
concepts
on
economies is simply getting a grasp
-I recently met with
concepts we take for granted.
market
-At one
economist-reformer.
Soviet
the
Shatalin
Stanislav
leaned
Soviet
one
point, I mentioned the word "equity", and
over and asked us to define the term.
Of
And the advanced industrial
They need our help.
democracies have an important obligation -- and opportunity-to fill in the developing framework.
far, we' ve responded quickly to facilitate the
process of economic reform in Eastern Europe. For its part,
the United States Government is doing all it can to lend
assistance in tangible and important ways. We have already
committed $1 billion to Poland and Hungary, and the
Administration
has requested $300 million more for Eastern
and Central Europe in FY 1991.
So
For Latin America and the Caribbean -- where democracy
and free-market economies have taken hold broadly but with
considerably less fanfare than in Europe -- President Bush
has launched the Enterprise for the Americas initiative to
stimulate investment and trade and to address official debt
burdens.
In addition to bilateral assistance, we are working
closely with the IMF, the World Bank and other international
Just last week, President Bush
are asking the IMF for increased lending to
the Eastern European region by as much as $5 billion.
The
President also stated that we have asked the World Bank to
accelerate the $9 billion of lending it has committed
especially for the energy sector.
financial
announced
institutions.
that
The U. S.
we
is also
technical assistance
in many
including:
tax policy, banking and securities market
regulation and privatization.
In one case, for example, we
are now working with the World Bank and the Yugoslav
government and private sector to set up a banking and finance
training institution in Yugoslavia.
ways,
providing
But, clearly, the emerging free-market economies
rely only on foreign governments for advice.
cannot
Instead, reforming nations are looking for advice and
assistance from Western business leaders. They need help
from all sides:
investment and commercial bankers,
attorneys, accountants -- all types of executives will be
helpful in establishing these emerging economies.
I'm proud
pitched in.
to say that
Chairman
many
with the President
firms have already
of you were moving in
American
Breeden and
all
established EMAC. The
the Financial Services Volunteer Corps (FSVC), and the
Polish- and Hungarian-American
Enterprise Funds have already
tandem
when
you
EMAC,
been
helpful.
The Polish-American
Enterprise Fund recently announced a
commitment to invest $19 million to provide capital to small
businessmen and farmers in Poland.
That sounds modest, but
it's
for entrepreneurial
activity.
Clearly, private sector assistance and investment are
the way to go. But the efforts of government and the private
sector can be synergistic.
EMAC's goals are entirely harmonious
with the objectives
of the U. S. and the peoples of the emerging market economies.
who are ready to jump in and
We need firms and professionals
You, the members of
lend help where and when it is needed.
a
real
move
forward
are America's economic "minutemen" -- executives
who can organize assistance programs quickly and
successfully for countries that ask for guidance.
the
EMAC,
A
experts
example of this guidance is the group of
on Employee Stock Ownership Plans (ESOPs) that
The Government of
Hungary earlier this month.
is seriously considering the use of ESOPs as one
perfect
visited
Hungary
method
of privatizing
state assets.
our embassy called the Treasury Department passing
request for advice and assistance, we turned
Hungary's
along
to the SEC and the EMAC to find firms willing to help that
nation take the first step. Within only a week, three firms
with bags packed and ready to go to
had representatives
When
Budapest.
That mission
praise
returned
from the Hungarian
last week,
Government.
and we have heard
high
But, there is more to do -- much more. We have hardly
touched the surface of the deep pool of demand from both the
governments of reforming countries and their fledgling
private firms. Of particular relevance to this group, they
financial markets
need and seek our guidance in establishing
benefit of
the
and
to
efficiently,
that operate legally,
all.
participation in this advisory committee is an
important part of that effort. We know you all have
expressed a willingness to help. We know you have the
expertise and the resources to make a significant
difference. The challenge EMAC faces now is to get that
expertise and those resources in the hands of these emerging
Your
economies.
market
I
understand you have created five working groups within
to offer
EMAC, each with specific skills and backgrounds
nations with developing free markets.
Let me offer some
thoughts on possible projects your groups might undertake.
First, the
working
group on
Securities
and Futures
Stock exchanges exist in only two East European
countries, and they are rudimentary.
The Budapest exchange,
for example, has only 15 or 20 listed stocks to trade.
Yugoslavia has 2 stock markets operating and one still in the
planning stage. All six East European countries want modern
exchanges, and they all need help. That's where you can come
Markets.
in.
Adopt a new Eastern
intermediary.
You
securities firm or
could offer to sponsor travel to the
European
U. S. by officials from newly formed
Show them how your companies conduct
trading and explain the concepts of
or privatized
underwriting
firms.
and
corporate finance.
Provide training for the operators of the new stock
exchanges in Hungary, Poland and Yugoslavia.
Or,
conduct a symposium for regulators, officials, and
business owners to learn basic aspects of securities
development
and
issuance.
Your working group on Clearance and Settlement Systems
can provide urgently needed assistance.
Retail banking -- as
we operate it in the U. S.
is a mystery to these nations.
For example, in Yugoslavia this year, banks had clearance
processing codes printed on checks for the first time. But
many will not have automated processing equipment
installed
—
until 1992.
you could donate technology to upgrade the
capacity of these new banks. Our old equipment is at least
25 years ahead of what exists in Poland or Hungary.
As you
upgrade your computer systems, consider how Polish banks and
market operators could make use of old equipment.
Equipment
and "back-office expertise" are greatly needed.
You can also help to encourage savings.
For 50 years,
the safest place for Eastern European families to put their
money has been either under the mattress or out of the
They' ve got to get that money out of the
country.
mattresses, into the banks, and loaned out to businesses of
all sizes for investment capital. So, these countries must
instill a sense of confidence among their people that banks
are safe, efficient and useful institutions.
To help,
Perhaps
your working
group on Financial
Intermediaries
Institutions could consider programs to encourage more
citizens to deposit their money in the new or recently
privatized banks. For example, your firms could publish
brochures -- that working people can understand -- to explain
and
how
and savings
banking
Savings
incentives
work
in a market
are also
economy.
critical.
We
can help banks
securities dealers to encourage more savings by designing
Product ideas will go a long way
new marketing
techniques.
toward building a retail banking system.
Privatization of state-owned enterprises is also central
to the success of transitions to a free-market economy. Yet,
most of the reforming nations are struggling with this
politically and technically difficult problem. Surely, your
working group on Financial Structures and Corporate Finance
For example:
can provide advice on privatization.
and
Make
your best professionals
technical
advisors.
available
as short-term
to Eastern Europe and present lectures on basic
finance and company valuation techniques.
Or, go
Finally, your working group on Accounting and
Professional Responsibility can advise these nations and
private businesses on methods of bookkeeping and financial
If the countries are to compete in the global
analysis.
marketplace,
internationally
their accounting systems
accepted standards.
must move toward
fact is that the areas where Western expertise could
be applied to help these emerging market economies are nearly
endless. Yet, it is important to remember that this
exchange of ideas produces important benefits for American
The
firms as well.
believe these emerging democratic nations have what
it takes to establish a successful economy: potential
industrial strength, economic incentive and well-educated
What they need and want to get there are
populations.
We
American
If I
and investment.
know-how
still
in the private sector, looking for
investment opportunities
in Eastern Europe would be high on
agenda.
And, I would try to get involved as
my corporate
soon as possible.
were
Yes, the waters are a little choppy for American firms
investing in these new democracies.
But business is
competition, and if you wait until the sea is perfectly calm
and the risk profiles are low, then we' re going to lose out.
American firms cannot wait until Japan, France, Germany and
others have capitalized on this opportunity.
advice and technical
assistance will be invaluable.
You will benefit, the
emerging market economies will benefit, and economic reform
throughout the world will be encouraged.
I look forward to
working with all of you as we move these nations toward
democratic societies and market economies that work for
Your support,
investment,
everyone.
Thank you,
mission.
and good luck on your new and
¹¹¹
exciting
&portment
of the Treasury
FOR RELEASE AT
~
Washington,
4:00 P. M.
'V
D.C. ~ Telephone 566-2041
ly
CONTACT:
October 23, 1990
Office of Financing
202/376-4350
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice,
invites tenders for two series of Treasury bills totaling
approximately $19, 600 million, to be issued November 1, 1990.
This offering will provide about $1, 800 million of new cash for
the Treasury, as the maturing bills are outstanding in the amount
of $17, 812 million.
Tenders will be received at Federal Reserve
Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. 20239-1500, prior to 1:00 p. m. , Eastern Standard time,
Monday, October 29. 1990. The two series offered are as follows:
91-day bills (to maturity date) for approximately
$9, 800 million, representing an additional amount of bills dated
August 2, 1990, and to mature January 31, 1991 (CUSIP No. 912794
VT 8), currently
outstanding in the amount of $9, 585 million,
the additional and original bills to be freely interchangeable.
182-day
November
bills for
1, 1990,
The Treasur
and
will
approximately
to
mature
ost
May
$9, 800 million, to be dated
2, 1991 (CUSIP No. 912794 WG 5)
one the auctions
it
unless
to raise the statutor
ance of enactment of le islatio
date
of October 29 1990.
guet
on
scheduled
before the
has assur-
debt limit
The bills will be issued on a discount basis under competibidding, and at maturity their par amount
and noncompetitive
Both series of bills will be
will be payable without interest.
in a minimum amount of $10, 000
form
book-entry
issued entirely in
on the records either of the
and in any higher $5, 000 multiple,
Federal Reserve Banks and Branches, or of the Department of the
tive
Treasury.
The bills will be issued for cash and in exchange for
Treasury bills maturing November 1, 1990- Tenders from Federal
Reserve Banks for their own account and as agents for foreign
monetary authorities will be accepted at the
and international
weighted average bank discount rates of accepted competitive
tenders. Additional amounts of the bills may be issued to Federal
monetary
Reserve Banks, as agents for foreign and international
the
amount
tenders
that
of
aggregate
authorities, to the extent
bil's'
~a=urin-:
for such accounts exceeds the aggregate amount of
'63
mi 1
on
Federal Reser':e Banks curren- ly hold $1,
held by them.
au=hori=
an
international
mone
es,
ary
and
as agents for foreign
$3, 774 million for their own account. Tenders for bills to be
maintained on the book-entry records of the Depart-. en= of the
Treasury should be submitted on For~ PD 5176-1 (for 13-.-elk
series) or Form PD 5176-2 (for 26-«eek se ies).
.
,
TREASURY ' S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 2
Each tender must state the par amount of bills bid for,
which must be a minimum of $10, 000. Tenders over $10, 000 must
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
A single
two decimals, e. g. , 7. 154. Fractions may not be used.
bidder, as defined in Treasury s single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
and dealers who make primary
Banking institutions
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers,
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
position in the bills being offered if such position is in excess
of $200 million. This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction.
Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
each customer whose net long position in the bill being offered
exceeds $200 million.
if
noncompetitive bidder may not have entered into an
agreement, nor make an agreement to purchase or sell or otherwise dispose of any noncompetitive awards of this issue being
auctioned prior to the designated closing time for receipt of
A
tenders.
bills applied for
for bills to be maintained
of the Department of the Treasury.
A cash adjustment
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined in the auction.
Payment for the full
must accompany all tenders
on the book-entry records
par amount of the
submitted
deposit need accompany tenders from incorporated banks
companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches.
No
and
8/89
trust
TRIASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 3
Public announcement will be made by the Department of the
Treasury of the amount and yield range of accepted bids. Competitive bidders will be advised of the acceptance or rejection
of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g. , 99.923, and the determinations
of the Secretary of the Treasury shall be final.
Settlement for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
on the issue date, in cash or other immediately-available
funds
or in Treasury bills maturing on that date. Cash adjustments
will be made for differences between the par value of the
maturing bills accepted in exchange and the issue price of the
new
bills.
If
bill is
purchased at issue, and is held to maturity,
the amount of discount is reportable as ordinary income on the
Federal income tax return of the owner for the year in which
the bill matures.
Accrual-basis taxpayers, banks, and other
persons designated in section 1281 of the Internal Revenue Code
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
a
of the Treasury Circulars, Public Debt Series
26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtained
from any Federal Reserve Bank or Branch, or from the Bureau of
the Public Debt.
Nos.
8/89
Department
portment of the Yl'oalvry e Walhlngtoo,
FOB
I NMEDXATE
RELKASE
O. c. ~ Telephone
CONTACT'.
october 24, 1990
TREASURY
The Treasury
annou. -. ' cd
notes originally
a-year
necessary
POSl'POHES
because debt
AUCTION
1i
"..
Office of Fina»Cine
202/376-5350
OF 2-YEAR NOTES
t!iat it is postponinq
s., hr. .duled
for today.
the auctio» of
is
This postponement
i t 1 eg i s 1 a t i on ha s not
boen enacted
t ~~
issuance of the notes cn October 31, 1990.
permit
to look for notice of reschedulinq of
thi~; auction in the finan"' nl pre", ~ or o contact their inc. al
Federal Reserve Bank o= L~r~:. ch for su. . '. inf». r~ition.
Investors
are advised
oOo
'
B-"97
Ild-20
portment of the Ytecmsury e Wamhlngton,
I tQCEDX JUSTE RELEASE
october 24', 1990
CONTACT.
FOR
TREASURY
The Treasury
POSTPONES
announced
2-year notes originally
D.C. ~ Telephone
AUCTION
that
scheduled
it is
OF
'Office of
2- YEAR
postpone
for today.
nq
Financ)i~.
202, '376-13 ~('
)'OTES
the ~uc+ 1 on cf
This postpone~en-.
legislat. ion has not bnen enncte. ) t o
permit issuance of the notes on October 31, 1930.
Investors are qdvised to look for notice of resctic~)ul incj of
this auction in the financial press or to conta=t heir 1nc~l
necessary
because debt limit
.
)'c. deral
Reserve Bank or Branch for such information.
oOo
C.
r
"8-997
Iae-ao
~
iNN~ent 4~ thI TteasII~ o„Nashiniton,
"~V,
RELEASE
FOR IMMEDIATE
CONTACT:
October 24, 1990
JEANNE
United
O.C. ~ Telephone SIN-104|
S.
Crispen
(202) 566-5252
Cheryl
ARCHIBALD
Appointed General Counsel
States Department of the Treasury
Secretary of the Treasury Nicholas F. Brady today announced
the appointment of Jeanne ST Archibald as General Counsel of the
She was confirmed for this position by the
Treasury Department.
United States Senate on October 18, and appointed by President
Bush on October 22.
has served
as Deputy
Since April 1988, Ms. Archibald
In this capacity,
General Counsel at the Department of Treasury.
and coordinating
all of the legal
she assisted in administering
From 1986 to 1988, she served as
activities of the Department.
Affairs) at the
Deputy Assistant General Counsel (International
Treasury Department.
Prior to joining the Treasury Department, Ms. Archibald was
Associate General Counsel at the Office of the U. S. Trade
1980 to 1986 where she served as the
from
Representative
principal legal adviser on unfair trade practices and supervised
of Section 301 of the Trade Act of 1974.
the administration
served as a Professional Staff
From 1975 to 1980, Ms. Archibald
for the House Ways and Means
Member on the Trade Subcommittee
an
Committee.
from
was graduated
Brook (B.A. , 1973) and
Ms. Archibald
York
Center
at Stony
(J.D. , 1977).
the State University of
Georgetown University
of Sag Harbor, New York, Ms' Archibald
husband and son in Reston, Virginia.
her
resides with
A
native
oOo
NB-998
New
Law
currently
OVERSIGHT BOARD
Reloluhon Trust Corporahon
1 7
FOR IMMEDIATE
17
l'
STR
I E T,
N. W.
W A S H I VC T
0 N,
Contact:
RELEASE
October 24, 1990
08 90 61
D. C. 1 0 1 1 1
Art Siddon
Felisa Neuringer
(202) 786-9672
OVERSIGHT BOARD ACTS TO EXPEDITE
RTC ASSET SALES
Board for the Resolution Trust Corporation
financing strategiea today designed to speed the
talc of assets by the RTC.
The Oversight
(RTC) approved
Policies adopted by the Board encourage the RTC to
securitize all types of financial assets and expand the current
seller financing policy (statement f13) for certain real estate
assets, including affordable housing.
"The Oversight
Board recognizes the importance of seller
the uae of the private sector to accelerate the
sale of RTC asseta and reduce the coats to the taxpayer, " said
Peter H. Monroe, president of the Oversight Board.
financing
and
vill keep a close eye on hov the RTC implements the
policies and vill continue to examine additional financing
techniques that may help the RTC accomplish asset sales, " he
said.
"We
Actions taken by the Oversight
Board allov the
RTC
to:
o
Securitixe for sale all financial assets -- including
mortgage loans, high yield bonds, and any loans originated by the
RTC under seller financing -- to help speed sales. Securitixation
is the process of
pooling financial asseta to serve as collateral
for securities to be sold in the open market.
o
Uae several types of credit enhancements,
including
structures, to create a high quality,
senior/subordinated
investment grade security that is readily marketable.
Th ~ RTC
class, up to the amount of its
may hold the subordinated
participation.
- aore—
Eliminate the requirement to sell RTC financed loans to the
secondary market vithin one year of origination, as previously
specified in the seller financing policy adopted last March.
o
Raise the $1 billion revolving cap on outstanding seller
financing for real estate to $1.25 billion in order to provide
$250 million in lov-interest loans to qualified buyers of
affordable housing.
o
Negotiate vith Fannie Mae and Freddie Mac to create a
partnership to make affordable housing financing more available.
Typically, private lenders vould provide a first mortgage for
sale to Fannie Mae or Freddie Mac. RTC vould provide a much
smaller second mortgage, and the buyer vould provide a
on the home.
dovnpayment
o
o
Originate direct market rate
properties through a contract with
and properties ineligible for the
Partnership Program or other types
loans for affordable housing
loan undervriters
for families
Fannie Mae/Freddie Mac
of financing.
Provide special financing for certain families currently
o
renting properties from the RTC vho are ineligible for other
Under this plan, renters vould be required
types of financing.
to pay two months rent as a down payment.
o
Use the private sector in the funding and servicing of
seller financed mortgage loans to the greatest extent possible.
Board, established by the Financial
Institutions Reform, Recovery and Enforcement Act in 1989,
formulates the policy, approves the funding, and provides general
The Oversight
oversight
of the Resolution Trust Corporation.
|apartment of the Treasury
~
Washington,
D.C. ~ Telephone Sdd-2041
FOR IMMEDIATE RELEASE
CONTACT:
Office of Financing
0 '3", 64
October 25, 1990
0
RESCHEDULING OF TREASURY BILL AUCTIONS
The Treasury has announced
the rescheduling and revision of the size of the following
bill auctions. Bills maturing today, October U, 1990, held by Federal Reserve
previously-postponed
Banks as agents for foreign and international monetary authorities may be reinvested. However.
the aggregate amount of their new tenders may not exceed the aggregate amount of their holdings
of the maturing bills.
Treasu
Weekl
Bills to be Issued Today October 25 1990:
The Department of the Treasury hereby amends its offering announcement of October 16,
1990, to change the issue amounts, auction date, and closing times for receipt of competitive and
noncompetitive tenders for 13-week and 26-week Treasury bills to be issued Thursday, October '5,
1990.
Each bill will be issued in the amount of $8, 600 million. This is a reduction from the $9, 600
million originally
announced.
to:
Competitive tenders will be received r' r
ursda
ctobe 25 199,
0 a.
at all Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington,
D. C.
etit've tenders that were received in all Federal Reserve Districts and at the
nco
Bureau of the Public Debt, Washington, D. C., b close of business local time Wednesda
October 24 1990 will be accepted in the two auctions.
All other terms and conditions
in the announcement
of October 16 remain the same.
2-Week Bills to be Issued October 26 1990:
Treasu
The Department of the Treasury hereby amends its offering announcement of October 1'2,
1990, to change the amount, the auction and issue dates, and the closing times for receipt ot
competitive
and noncompetitive
tenders for 52-week Treasury bills.
The bills will be issued in the amount of $10,000 million.
$10,750 million originally announced.
This is a reduction
from the
The bills will be issued Friday October 26 1990.
Com etitive tenders v ill be received rior to 10:00 a. m. EDST Fridav October "6
all Federal Reserve Banks and Branches and at the Bureau of the Public Debt, w ashington,
199, ai
D. C.
oncom etitive tenders received in all Federal Reserve Districts and at the Bureau of the
October 5 1990, will be
Public Debt, Washington, D. C., bv close of business local time Thursda
accepted in the auction.
All other
te~s
and conditions
in the announcement
oOo
nt
October 12 remain the ~~me.
HUM. IC DEBT NE
of the Treasury
Department
FOR IMMEDIATE
~
Bureau of the Public Debt
RELEASE
~
Washington.
'&~CONTACT: ~
J
October 25, 1990
RESULTS OF TREASURY'S AUCTION
DC
'-'&~'-'-'~"-
Office of Financing
202-376-4350
OF 26-WEEK
/
BILLS
for $8, 631 million of 26-week bills to be issued
25, 1990 and mature on April 25, 1991 were
Tenders
on October
accepted today
RANGE
(CUSIP: 912794WF7).
OF ACCEPTED
COMPETITIVE
BIDS:
Discount
Rate
Low
High
Average
7. 15%
7. 17%
7. 16%
Investment
Rate
7. 52%
7. 54%
7. 53%
Price
96. 385
96. 375
96. 380
$1, 480, 000 was accepted at lower yields.
Tenders at the high discount rate were allotted 54%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
NB-1000
(in thousands)
Received
20, 165
24, 123, 625
9, 385
11, 030
22, 985
15, 910
2, 457, 000
18, 780
13, 355
21, 410
8, 675
548, 550
594 730
$27, 865, 600
594 710
$8, 631, 115
$23, 480, 060
$4, 245, 575
866 540
$24, 346, 600
~4;
19, 810
6, 956, 275
9, 385
11, 030
22, 985
13, 450
748, 080
13, 860
13, 355
20, 950
8, 675
198, 550
866 540
$5, 112, 115
3, 000, 000
3, 000, 000
519 000
$27, 865, 600
$8, 631, 115
519 000
PUBLI
of the Treasuri
Department
FOR IMMEDIATE
DEBT NEW
~
Bureau of the Public Debt
RELEASE
~
M'ashinyon,
CONTACT:
October 25, 1990
RESULTS OF TREASURY'S AUCTION
DC 0239
Office of Financing
202-376-4350
OF 13-WEEK
BILLS
for $8, 632 million of 13-week bills to be issued
25, 1990 and mature on January 24, 1991 were
accepted today (CUSIP: 912794VSO).
Tenders
on October
RANGE
OF ACCEPTED
COMPETITIVE
BIDS:
Discount
Rate
Low
High
Average
7. 18%
7. 21%
7. 20%
Investment
Rate
7. 41%
7. 45%
7. 44%
Price
98. 185
98. 177
98. 180
Tenders at the high discount rate were allotted 25%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
Location
Boston
Received
19, 425
(in thousands)
York
25, 885, 205
19, 425
7, 503, 100
Cleveland
17, 025
82, 920
46, 670
New
Philadelphia
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
NS-1002
11, 950
16, 715
260
671,
1,
28, 535
23, 090
23, 155
9, 265
557, 270
11, 950
16, 685
13, 965
113, 760
14, 785
23, 090
23, 155
9, 265
766 325
$29, 112, 140
69, 770
766 325
$8, 631, 945
$24, 608. 155
1 116 525
$25, 724, 680
$4, 127, 960
1 116 525
$5, 244, 485
3, 184, 160
3. 184, 160
203 300
203 300
$8, 631, 945
$29, 112, 140
OVFASIGHT
80&G)
Resolution Trust Corporation
i
5TRE
E
T. N. W.
W A 5 H IN GT
0 N,
O.
C.
2
Contact:
FOR ZMYE DIATE RZ LEAS E
October 25, 1990
OB 90-62
0232
Art, Simon
Falisa Neuriager
(202) 786-9672
I
OVERS GHT BOARD APPROVES
RTC OPERATIHQ PLAN
'The
Board of the Resolution Trust Corporation (RTC)
an R:C operating plan for the first six months of
Oversight
today approved
Year 1991 calling
F cal
192 'nsolven
approximately
for
sale
of
or liquidation
thrifts by Harch 31, 1991.
hich is dependent upon appropriate funding action
The plan,
by Congress, would bring the total number of thrifts resolved since
479.
ug. 9, 1989 to approximately
the
A,
Under the plan, the Oversight Board would authorize the RTC
$62. 2 billion in new fundizg, including $23. 3 billion to resolve
Ae '92 thrifts and $38. 9 bi lion in working capital to be borrowed
through the Federal Financing Bank (FFB).
"The RTC has proposed
.-.cnths o FY '9 which will
re -o' u-ions, " sa " Peter H.
"I &e RTc meets i s target
so 1 d or closed approx~ately
the RTC to date.
plan for the first six
to continue a high level of
Monroe, Oversight Board president.
of 192 new resolutions, it will have
90 percent of all thri fts seized by
an ambitious
allow
"It is
it
for the RTC to move forward with these
important
resolutions and o continue to accelerate the pace of asset sales,
which should only be e:"anced by ou"" recently issued policies on
he added.
securitization and seller financing,
more
OVERSIGHT BOARD
I
~
I 7
F
Resolution Trust Coqmration
STREE . NW.
WhSHINGTON,
,
D
C
101~2
2
for the six
Of the $23. 3 billion in loss funds anticipated
mont+ period, $11.3 billion vould come from Treasury appropriations
and $12 billion from the sale of Resolution Funding Corporation
(REFCORP) bonds
$5 billion of the $12 billion in REFCORP bonds
vere auctioned
--
Oct. 11.
the
The Overs ight Beard, established
by FVGKA, f ormulatas
po' icy, approves t"e fm~ .ding, and provides the general oversight
for the Resolut'on Trust Corporation, the agency responsible for
resolving the natio. ".'s failed thrifts.
October 2 5, 199 0
FACT SKEET
ul0
PIRST SIX ROUTES
OP
0 a?MMMM'I
PISCLL fEAR 1991
The Resolution Trust Corporation's operating
on the assumption Congress will provide the
funding
for
The Oversight
the
the
FY
first six
1991-
plan is based
necess~
the RTC's operating plan for
of fiscal year 1991 vhich vill permit
Board approved
months
to continue a high level of resolutions with
estimated 192 new cases, which would bring the total
number of resolved thrifts to 479.
The approved plan provides the RTC with new funding of $62. 2
billion including loss funds o $23. 3 billion (of which $12
bil ion would come from the Resolution Funding Corporation
and $11.3 bi'lion from the Treasury), and $38. 9 billion in
working capi=al from the Fede al Financing Bank (FFB) [$5
billion of the $12 billion in REFCORP funds were provided in
the Oc . 11 auction].
The Oversig. ".t Board approves the RTC rolling over its
outstanding bc=owings from the FFB of $45. 8 billion.
At the end of fiscal year 1990, the cumulative net loss on
resolved instit -ions was approximately $33 billion.
Under the ap=roved plan, the cumulative net loss Will
increase to $61. 3 b'llion based on the RTC resolving 192 new
cases.
RTC
hs of the end of FY 1990, the Oversight Board. has authorized
the use of $38 b llion in loss funds, which includes $18. 8
billion in Treasury appropriations, $1.2 billion from the
Federal Ho-. e Loan Banks, and $18 billion in REFCORP
proceeds.
.
calls for the acceleration of asset sales
to produce $12 billion in dividends during
to $2 billion during the fourth
T"is
compares
the period.
quarter of FY '90.
The fair market value of RTC's receivership claims as of the
$40 billion.
If the RTC
end of F 1990 is approximately
fair
market
the
value
of its
cases,
new
resolves 92
to
inc=ease
$79
would
approximately
receivership cia~
billion, net of the dividends fro= asset sales
The approved plan
which is expected
P U $LI
of the TreasurI
Department
~
Bureau of the Public Debt
RELEASET,
FOR IMMEDIATE
E
DEBT
October 26, 1990
, „„g
q
g .i
.
~
ii'ashington,
CONTACT:
RESULTS OF TREASURY'S AUCTION
DC '20'239
Office of Financing
202-376-'350
OF 52-WEEK
BILLS
for $10, 130 million of 52-week bills to
Tenders
be issued
26, 1990 and mature on October 24, 1991 were
accepted today (CUSIP: 912794WV2).
on October
RANGE
OF ACCEPTED
COMPETITIVE
BIDS:
Discount
Rate
Low
High
Average
6. 99%
7. 01%
7-01%
Investment
Rate
7. 48%
7. 51%
7. 51%
Price
92. 952
92. 932
92. 932
Tenders at the high discount rate were allotted 47%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Received
22, 615
44, 078, 210
22, 215
23, 095
23, 405
(in thousands)
22, 615
9, 535, 870
22, 215
23, 095
23, 405
2, 256, 185
13, 220
153, 135
24, 345
24, 890
11, 130
386, 610
226 730
$47, 128, 430
24, 890
11, 130
48, 360
226 730
$10, 130, 190
$46, 535, 340
$9, 537, 100
13, 220
15, 780
11, 780
13, 745
593 090
$47, 128, ~30
593 090
$10, 130, 190
$47, 128, 430
$10, 130, 190
Federal Reserve
Foreign Official
Institutions
TOTALS
JB-1001
at, tc
partment of the Treasury
~
I
Washfnyidn,
RELEASE
FOR IMMEDIATE
Cl.
c. ~
CONTACT:
October 26, 1990
Telephone Sdd-2041
Office of Financing
202/376-4350
2-YEAR NOTE AUCTION
TREASURY RESCHEDULES
The Department
of the Treasury hereby
amends
its offering
of October 17, 1990. The auction of $12, 000 million
of 2-year notes, originally scheduled for and postponed on
announcement
October 24, 1990, has been rescheduled
Wednesday,
for Tuesday,
October 30, 1990. The closing time for receipt of both
competitive
Standard
and noncompetitive
The notes
Time.
enactment
of
e
islat
,
Eastern
on Wednesday,
announced.
is contin ent u on the assurance of
to raise and extend the statutor debt
auction
on
imit before the guet on on October 30
All other terms and conditions
October 17, 1990, remain
the same.
oOo
NB-1004
is 1:00 p. m.
will be issued
October 31, 1990, as originally
h's rescheduled
tenders
1990.
in the announcement
of
portment of the Treasurl ~ Washington,
RELEASE
IMMEDIATE
FOR
October
for
O.c. ~ Telephone Sdd-2O40
26, 1990
Release of U. S. Reserve Assets
Monthly
The Treasury Department
the month of September
today released
1990.
U. S.
reserve assets data
As indicated
in this table, U. S. reserve assets amounted to
$80, 024 million at the end of September, up from $78, 909 million in
August.
U. S. Reserve
Assets
of dollars)
(in millions
Total
End
of
Reserve
Special
Gold
Drawing
Foreign
Currencies
Reserve
Position
Assets
Stock 1/
Rights
August
78, 909
10, 780
48, 174
8, 890.
September
80, 024
11,065
11,063
10, 666
49, 414
8, 881
Month
2/3/
4/
in IMF 2/
1990
1
2
'
Valued
at S42. 2222 per fine troy ounce.
Beginning July 1974, the IMF adopted a technique for valuing the
based on a weighted average of exchange rates for the currencies
selected
position
1974.
3/ Includes
4/ Valued
NB-1005
member countries.
in the IMF also are
allocations
at current
of
market
SDRs by
The
U. S. SDR holdings
valued
on
this
basis
and
SDR
ot
reserve
beginning
July
the I!1F plus t=ansact ions in SDRs.
exchan". e
rates.
portment of the treasury
Contact:
~
O.C. ~ Telephone $66-204$
(202) 566-5252
(202) 395-3814
Cheryl Crispen
Kimberly Gibson
FOR IMMEDIATE
Washlnyton,
RELEASE
October 26, 1990
JOINT STATEMENT OF
NICHOLAS F. BRADY
SECRETARY OF THE TREASURY,
RI CHARD
AND
G
DARMAN,
.
DIRECTOR OF THE OFFICE OF MANAGEMENT
AND
BUDGET,
ON
BUDGET RESULTS FOR FISCAL YEAR
1990
SUMMARY
is
releasing
the September Monthly
Treasury Statement- of Receipts and Outlays of the United States
Government.
The statement shows the actual financial totals for
the fiscal year that ended on September 30, 1990, as follows:
The Treasury
Department
today
total receipts of $1, 031. 5 billion;
total outlays of $1, 251. 9 billion;
a deficit of $220. 4 billion.
NB-]Qp3
and
Table
1.
TOTAL
RECEIPTS, OUTLAYS,
(in billions of dollars)
AND
DEFICITS
~l» t
1, 144. 0
-153.3
. . . . . . . . . . . . . 1, 073. 5
Estimate. . . . . 1, 044. 2
1, 197.2
1, 264. 3
-123.8
Actual. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 031.5
1, 251. 9
-220. 4
1989 Actual. . . . . . . . . . . . . . . . . . . . . . . . . . .
~
990. 7
1990:
Budget Estimate.
January
July Mid-Session Review
-220. 1
1989 actuals differ from those in the January budget
mainly because of adjustments to outlays by the Federal Savings and
Loan Insurance Corporation.
NOTE:
FY
DEFICIT
actual deficit for 1990 was $220. 4 billion, just $0. 3 billion
higher than estimated in the July Mid-Session Review (MSR). The
small increase from MSR estimates was the result of decreases in
both outlays and receipts.
While receipts fell by $12. 8 billion
The
from
the
MSR
estimate,
total outlays also decreased $12. 4 billion.
RECEIPTS
Receipts were estimated in January at $1, 073. 5 billion, and were
revised downward to $1, 044. 2 billion in the July MSR.
Actual
receipts for 1990 were $1, 031.5 billion, $12. 8 billion lower than
the July MSR estimate.
Relative to the MSR estimates, estimated
payments of liabilities by both corporations and individuals,
and
withholding
on wages and
salaries,
were
all
lower than
anticipated.
Chan
es in Recei
ts
Accordin
to Source
billion, $9. 2 billion
billion estimated in July.
for $6. 1 billion of the
shortfall in individual income tax receipts. Estimated
of 1990 liability by individuals were $3. 6
payments
billion lower than anticipated.
Refunds were $0. 4
billion lower than anticipated, partially offsetting the
shortfalls in withholding and estimated payments of tax.
Lower incomes than forecast in the MSR and deviations in
the anticipated timing pattern of collections may be the
reason for the decline in this source of receipts.
Co oration Income Taxes were $93. 5 billion, $4. 7 billion
lower than the $98. 2 billion estimated in July, largely
because estimated payments of 1990 liability were lower
than anticipated.
Excise Taxes were $1.4 billion lower than the July
estimate of $36. 7 billion, largely because refunds were
larger than expected.
Estate and Gift Taxes were $11.5 billion, $0. 8 billion
above the July estimate, primarily because collections of
gift taxes were higher than anticipated.
Miscellaneous Recei ts were $2. 0 billion higher than the
July estimate. Most of this increase is due to higherIndividual
Income Taxes were $466 ' 9
lower than the $476. 1
Withheld
taxes accounted
than-anticipated
Reserve System.
deposits
of earnings
by
the
Federal
OUTLAYS
Total outlays in the January budget were estimated at $1, 197.2
billion. This estimate was increased by $67. 1 billion to $1, 264. 3
billion in the MSR, largely due to considerably higher outlays
related to the thrift cleanup, plus the net impact of other
technical re-estimates. Actual 1990 outlays were $1, 251. 9 billion,
$12. 4 billion below the MSR estimate.
billion decrease from the MSR is due to outlays
Trust Corporation (RTC), which were $10. 6 billion
resolution of
lower than estimated due to slower-than-anticipated
failed thrifts. In addition, there were numerous smaller increases
were $2. 8
Outlays for the Treasury Department
and decreases.
for
the
Bank
Insurance
Fund $2. 5
billion higher than projected, and
billion higher. Outlays were $1. 5 billion lower than anticipated
for the Department of Agriculture, and $1. 2 billion lower for „hrMost of the $12. 4
by the Resolution
Department
of Housing
and Urban
Development.
Outla
Chan
es b
A
enc
and Pro ram
Table 2
changes since July are described below.
actual
the
and
and
Budget
MSR
estimates,
January
July
displays the
levels by agency and major program.
The major outlay
ro riated to the President. Outlays of Funds Appropriated
to the President were $10. 1 billion, $0. 6 billion lower than the
$10.7 billion estimated in the MSR. The largest single factor
causing the change was a $0. 9 billion reduction in military sales
This was due to substantially higher trust fund receipts
programs.
resulting in part from increased sales activity.
Funds
De
A
artment
of
riculture.
$46. 0 billion,
A
Outlays
of
Department
of
lower than the $47. 5
the
$1.5 billion
Agriculture were
the
MSR.
Outlays by the Commodity Credit
billion estimated in
$0. 6 billion lower than
Corporation
(CCC) were $6. 4 billion,
for P. L.
estimated in the MSR, largely due to lower disbursements
loan
repayments.
crop
480 food financing and higher-than-projected
Outlays for Forest Service were $0. 5 billion below the July
estimate, largely due to the repayment of funds borrowed to finance
prior year fire-fighting costs.
of
artment of Defense-Militar .
Outlays of the Department
Defense-Military were $289. 8 billion, $0. 5 billion lower than the
$290. 2 billion estimated in the MSR. Outlays increased by $1. 2
billion for Operation Desert Shield, however, this was offset by
lower outlays of $1.7 billion due to the moratorium on military
test, and
construction
development,
and delays
in research,
and
contracts,
maintenance
evaluation
equipment
programs,
restoration of operating supply inventory levels.
De
artment of Health and Human Services -- exce t Social Securit
Health and Human Services Department outlays were $193.7 billion,
$1.3 billion above the $192. 4 billion estimated in the MSR, largely
$1. 3
due to Medicare.
Medicare outlays were $109.7 billion,
billion higher than the $108. 4 billion estimated in MSR. Hospital
Insurance (HI) outlays were $1.7 billion higher than in the MSR,
and Supplementary
Medical Insurance (SMI) outlays were $0. 4 billion
lower than the MSR estimates which were based on preliminary trends
in spending during the first half of FY 1990. The MSR projections
also underestimated
the volume of provider bills that would be
De
processed in the third quarter
was temporarily
suspended.
De
artment
Department
of Housin
of Housing
of
FY
1990 after the payment
Outlays
and Urban Develo ment.
were $20. 2
and Urban Development
$1.2 billion below the $21. 4 billion estimated
Payments for claims in mortgage and loan insurance
in
for the
billion,
the
programs
floor
MSR.
of the
Federal
Housing
Administration
(FHA)
and
Government
National
$0. 7 billion below the July
estimate because of fewer defaults. In addition, the rate at which
state and local governments drew down their Community Development
Block Grant (CDBG) allocations was lower than expected. A variety
of other HUD programs also had slightly
lower outlays
than
anticipated.
Mortgage
Association
were
(GNMA)
of the Treasur . Outlays for the Department of Treasury
were $255. 3 billion,
$2. 9 billion higher than the MSR estimate.
Interest on the public debt was $264. 9 billion, $3. 8 billion higher
than estimated for the MSR. The largest part of this difference,
$2. 6 billion, occurred because various trust funds and other
Government
accounts underestimated
their interest earnings on
This underestimate
does not affect overall
Treasury securities.
spending or the deficit because there are corresponding offsets in
specific agency outlays in other parts of the budget.
The
remaining
$1.2 billion underestimate of interest on the public
debt, which does affect the budget totals, occurred as a result of
minor differences in interest rates, differences in the amounts of
borrowing actually undertaken,
and other technical factors.
The increase in interest on the public debt was partially offset by
higher-than-expected
receipts in the Exchange Stabilization Fund.
At year end, receipts exceeded gross outlays by $2. 9 billion,
an
increase of $1. 1 billion from the MSR estimate.
was
This
largely
due to the decline of the dollar,
and the increasing
value of
De
artment
foreign currency
denominated
assets.
Net outlays
Services Administration.
of the General
Services Administration were $0 ' 5 billion below the MSR estimate.
was largely due to lower outlays
in the Public
The difference
estimated
the
MSR.
than
in
PBS had
Buildings Service (PBS)
originally anticipated that outlays from several new construction
projects would occur in FY 1990, but these projects have not
progressed as quickly as previously anticipated.
General
ice of Personnel Mana ement. Outlays of the Office of Personnel
$0. 9 billion lower than the MSR
were $31.9 billion,
Management
estimate.
The number of Federal employees who retired was lower
than projected.
In addition, fourth quarter claims payments under
the Federal Employee Health Benefits Program did not increase as
much as anticipated.
FDIC .
FDIC outlays were
Federal De osit Insurance Cor oration
$11.7 billion, $1 ' 9 billion higher than the MSR estimate.
0
BIF .
BIF outlays
ere $6. '
billion, $2. 5 billion higher than the MSR estimate. The
increase in net outlays reflects a $2. 7 billion increase
from several large bank failures.
in cash disbursements
Bank
Insurance
Fund
The higher
additional
failures.
by higher
disbursements
include about $0. 3 billion in
purchases
of assets from earlier bank
The higher disbursements
were partially offset
receipts
FSLIC Resolution
from
asset sales.
Fund
FRF
.
FRF
outlays
were
$5. 2
billion, $0. 6 billion below the MSR estimate. Interest
declined as rates in the Southwest declined
payments
towards market rates, and asset sales were higher than
anticipated.
Trust Cor oration
for 1990, $10. 6 billion
Resolution
billion
RTC
--
RTC
outlays
were
lower than estimated
in the
$46. 5
MSR.
were lower than forecast in part because cash for certain
RTC transactions
that were resolved at the end of September, was
not actually expended until the following Monday, October 1st.
Outlays
Actual outlays also fell short of the MSR estimate
postponed several additional case resolutions until
because
FY
1991.
RTC
—1989 and 1990 BUDGET RECEIPTS BY SOURCE
Table 2.
AND OUTLAYS
BY AGENCY
(fiscal years; in millions of dollars)
1990
1989
Actual
Estimate
January
Actual minus
Actual
~Jul
Recei ts b Source
income taxes.
Corporation income taxes.
Social insurance taxes and contributions:
Employment taxes and contributions.
Individual
On-budget.
Off-budget
insurance.
Other retirement contributions
Unen~ployment
Subtotal, Social insurance taxes and contributions. . . .
Excise taxes. .
Estate and gift taxes.
Customs duties. .
Miscellaneous receipts
Total, Receipts
On-budget
Off-budget.
445, 690
103,291
489,444
112,030
476, 090
98,223
466, 884
93,507
-9,206
332,859
(69, 193)
(263,666)
22, 011
4, 546
358,598
(73, 164)
(285,434)
22, 029
4, 734
353,643
(72, 183)
(281,460)
21,778
4, 734
353,891
(72, 235)
(281,656)
21,635
248
(52)
4, 521
-143
-213
359,416
385,362
380, 156
380,047
-109
34,386
8,745
16,334
22, 839
36, 154
9,279
16,785
24, 397
36,715
10,680
16,896
25, 468
35,345
11,500
16,707
27, 470
-1,370
990,701
(727, 036)
(263,666)
1,073,451
(788, 017)
(285, 434)
1,044, 228
(762, 768)
(281,460)
1,031,461
(749,806)
(281,656)
-12,766
(-12,962)
-4, 716
(196)
820
-189
2, 002
(196)
—1989 and 1990 BUDGET RECEIPTS BY SOURCE AND OUTLAYS BY AGENCY
Table 2.
(fiscal years; in millions of dollars)
1990
1989
Actual
Outla s b Ma'or
A
to the President. . . .
Agriculture:
Commodity Credit Corporation.
Foreign assistance —P. L. 480.
Federal Crop Insurance Corporation.
Rural Electrification Administration.
Farmers Home Administration.
Food and Nutrition Service, . . . . . . . . . . . . . . . . .
Forest Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other
Subtotal, Agriculture. . . .
Commerce
J~anuar
Actual
~Jul
~Jul
enc
Legislative branch and the Judiciary.
Executive Office of the President.
Funds Appropriated to the President:
International Security Assistance:
Foreign Military Financing.
Economic Support Fund.
Other.
International development assistance
International monetary programs
Military sales programs
Other.
Subtotal, Funds Appropriated
Actual minus
Estimate
-127
3, 588
124
4, 018
174
4, 001
174
3, 874
157
-2, 241
1,928
3,414
459
3,099
3,894
3,881
4, 618
3, 769
-59
-35
3, 103
3, 528
-208
41
104
157
-738
-1,117
85
62
-738
-909
-23
4, 257
9, 162
10,696
10,087
-609
10,582
1,098
1,103
502
7, 608
20, 774
2, 944
3, 704
8, 373
978
1, 181
109
7, 124
23, 009
3, 179
4, 293
6, 941
978
980
395
6, 617
23, 932
3,420
4, 269
6, 380
978
-561
278
-117
6, 713
23, 620
2, 934
4, 130
96
48, 316
48, 246
47, 531
46, 012
-1,520
2, 571
3, 861
3, 933
3, 734
—199
3, 573
-321
2, 780
32
392
—17
724
-113
23
426
0
979
-312
-486
-139
Table 2.
—1989 and
1990 BUDGET RECEIPTS BY SOURCE
(fiscal years;
in millions
AND OUTLAYS
BY AGENCY
of dollars)
1990
1989
Actual
D&. l&. ri. ,
Df)&. r;&t«)r)
Procur
&.
and maintenance
rner) t,
R&. search, d&. v&.'In@ment,
test,
'&r)r1
evaluation.
0 Ii)&.r.
.
'. &iil)
f:
I
&
1&
it;il,
D&. lei)
se-Military
l«)s&'-Civil
Ii I &. '& l
I
() &1.
llr. 'i ly
&
;illli;iii&1 Hiiⅈiii
Services
-- except
1
1i &:, &i&. 1 . .
Piil)lic
( )tl)&'.
~Jul
H&'.
altt)
S&'. i
vice
&
'iil)total, Hr. , <l)
Soci;)I Sr'. «, iiity,
H, <i), «),
I
H
&iman
«ii&1
Human Services
Services
319
80, 676
87, 001
81,620
37, 002
8, 582
75, 259
86, 133
80, 948
36, 527
7, 925
75, 303
87, 567
80, 828
37, 612
8, 920
75, 622
88, 340
80, 972
37,458
7, 362
-1,557
294, 881
286, 791
290, 230
289, 755
—474
23, 450
21,608
11,387
24, 751
22, 316
12,290
24, 803
22, 929
12,319
24, 975
173
180
96,452
34, 604
12,250
28, 995
108,216
40, 230
14,057
109,657
41, 103
14,007
28, 671
108,354
40, 889
14, 129
28, 996
28, 910
-122
-86
172,301
191,174
192,369
193,679
1,310
227, 473
244, 587
244, 904
244, 998
93
23, 109
12,028
774
144
-154
-292
Social Security:
h, 1&'&I«")&t~
t
Actual
~Januar
-Milit;iry:
&
Milit;iry personnel.
D&
Actual minus
Estimate
1,303
214
—except
—Social Security.
Table 2.
—1989 and 1990 BUDGET RECEIPTS BY SOURCE AND OUTLAYS BY AGENCY
(fiscal years; in millions of dollars)
1990
1989
Actual
Housing and Urban Development:
Housing payments
Federal Housing Administration fund.
Government National Mortgage Association. .
Community development grants
Other
Subtotal, Housing and Urban Development.
Interior.
Justice. . . .
Actual minus
Estimate
Actual
~Januar
~Jul
-143
-355
-334
13,753
1,343
13,610
988
-134
-468
2, 995
-225
3,437
2, 770
3, 267
22, 802
21,394
20, 167
-1,227
5, 308
6, 232
5, 832
6, 898
6, 094
6, 945
5, 794
6, 739
-300
-206
3, 758
56
18,730
2, 353
-2, 240
3,892
55
19,500
1,921
3,875
30
20, 100
1,879
3, 837
0
20, 250
1,558
-38
-30
-433
-340
-328
150
-321
12
22, 657
24, 935
25, 543
25, 317
-227
3,722
3,777
3,834
3, 979
145
13,485
3, 541
13,911
3, 848
6, 468
4, 306
14,293
3, 770
6, 391
4, 182
382
5, 740
3, 841
13,911
3,498
6,468
4, 403
-78
-77
-124
26, 607
28, 281
28, 533
28, 637
103
12,335
976
13,888
-42
2, 913
3,497
47
3,020
3,501
19,680
2, 346
-170
Labor:
Training and employment services
Advances to the unemployment trust fund and other funds. . . .
Unemployment trust fund.
Other
Intrabudgetary transactions. . . . . . . . . . . . . . .
Subtotal, Labor.
State . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. . . . ... . . . . . . . . . .. . . . .. ... . . . . .
Transportation:
Federal Highway Administration.
Urban Mass Transportation Administration.
Federal Aviation Administration.
Other
Subtotal, Transportation.
Table 2.
—1989 and 1990 BUOGET RECEIPTS BY SOURCE
ANO OUTLAYS
BY AGENCY
(fiscal years; in millions of dollars)
1990
1989
~Acru
Treasury:
Exchange Stabilization Fund.
Interest on the public debt.
Offsetting receipts
Other
Siibtotal, Treasury.
Dopaiti»ent of Veterans Affairs.
Environi»ental Protection Agency.
Go»or al Services Administration.
Net&onal Aeronautics and Space Administration.
Office of Personnel Management
Sinall Business Administration.
Other independent agencies:
District of Columbia.
Exp»it-Il»poft Bank
Federal Deposit Insurance Corporation:
Bank insurance fund.
FSLIC resolution fund.
Otic&. r FDIC.
I-& d&. i, il Emergency
Management Agency
P»st;il Service:
0»-t)i&dget
r
r
( &iii&'i i»&'. t)
i
&ndepe»de»t
&
agencies
Actual
~Jul
-1,119
-1,100
-1,800
-2, 947
-1,147
240, 863
-24, 274
15,096
254, 850
264, 853
-22, 863
16,352
261,080
-23,026
16,135
3,773
310
230, 566
247, 239
252, 389
255, 269
2, 880
30,041
4,906
-462
11,036
29,073
85
28, 733
5,492
253
12,026
33,211
1,056
29, 275
5, 311
381
12,058
32,831
709
28, 998
5, 106
-277
-206
-503
12,429
31,949
692
-882
504
525
364
545
365
548
3
357
-7
1,961
5, 780
100
1,747
3,904
5,814
100
1,749
6,429
5, 213
87
2, 032
2, 525
4, 315
9, 172
348
5,813
490
2, 388
4, 414
2, 334
216
6, 318
490
1,930
4, 426
57, 132
87
6, 356
490
1,626
4, 477
46, 547
6, 027
-10,585
-398
-329
33,770
26, 637
82, 897
73,523
-9,374
47
2,847
10,166
-100
531
436
-310
Ol I —t&udg&. t
&, id R&'. I &(»I »t', »t Board.
I t, i ill
Ihr'. soli&t&«» Tiiist Cor poi etio».
I i»&r. 's&. ~. V, ill~y Authority,
~i&i&ti&t;il, »tt&r
.
Actual minus
Estimate
January
-22, 716
16,079
-122
-312
-56
370
-17
-601
-13
283
0
-304
51
—1989 and 1990 BUDGET RECEIPTS BY SOURCE
Table 2.
BY AGENCY
AND OUTLAYS
(fiscal years; in millions of dollars)
1990
1989
Actual
Undistributed offsetting receipts:
Employer share, employee retirement (on-budget). . .... .. . .. . .
Employer share, employee retirement (off-budget). . .... . . . ... .
Interest received by on-budget trust funds. .
Interest received by off-budget trust funds
Other interest
Rents and royalties on the Outer Continental Shelf lands. . . .
Subtotal, undistributed
offsetting receipts
Total Outlays.
On-budget.
Off-. budget.
Deficit
(-).
On-budget
Off-budget.
Actual minus
Estimate
~Januar
~Jul
Actual
~Jul
-28, 266
-28, 263
-28, 044
-5,581
-45, 233
-15,610
-5,567
-5, 567
219
0
-45, 272
-46, 416
-1,144
-15,762
-229
-2, 929
-2, 615
-2, 912
-15,991
-2
-3,004
-89, 155
-97,305
-97,776
-99,025
-1,249
1,197,236 1,264, 310 1,251,861
(971,452) (1,038,805) (1,026, 795)
(225, 784) (225, 505) (225, 065)
-12,449
(-12,010)
-123,785 -220, 082 -220, 400
(-206, 073) (-183,435) (-276,037) (-276, 990)
-317
-29,425
-4, 858
-40, 547
-11,395
-1
1,144,020
(933,109)
(210,911)
-153,320
(+52, 754)
(+59,650)
NOTE: Detail may not add to totals due to rounding.
NOTE: FY 1989 actual differ from those published in the January budget mainly because
of adjustments to outlays by the Federal Savings & Loan Insurance Corporation.
(+55,955)
(+56, 590)
-92
(-440)
(-953)
(635)
&portment
of the Trecisury
FOR IMMEDIATE
~
Wcishlnsion, D.C.
RELEASE
TRIASURY
The Treasury
2- YEAR
today affirmed
202/376-4350
NOTE AUCTION
that
it
will auction
$12, 000 million of 2-year notes on Tuesday,
its
Telephone $66-2041
Office of Financing
CONTACT:
October 29, 1990
~
October 30, in
of October 26 rescheduling the
The enactment of legislation to raise and extend the
debt limit permits the issuance of the notes on
accordance with
auction.
statutory
announcement
October 31, 1990, as originally
Wednesday,
announced
on
October 17, 1990. The closing time for receipt of both
competitive
Standard
and noncompetitive
Time, as announced
tenders
on October
All other terms and conditions
October 17, 1990, remain the same.
oOo
NB-1006
is 1:00 p. m. , Eastern
26.
in the announcement
of
&pclrtment
of the
Tt eclsury
~
I1
FOR IMMEDIATE
Washington,
Qi
RELEASE
CONTACT:
October 29, 1990
$9, 800 million
Monday,
today affirmed
BILL
that
AUCTION
it
will auction
each of 13-week and 26-week Treasury
October 29, in accordance with
October 23.
Office of Financing
202/376-4350
TREASURY WEEKLY
The Treasury
O.C. ~ Telephone 566-2044
The
its
bills
announcement
closing time for receipt of tenders
on
of
is 1:00
p. m. , Eastern Standard Time, today, as announced on October 23.
The bills will be issued on Thursday,
November 1, 1990.
oOo
NB-100,
r' u oui
Department
DEBT
of the Treasury
FOR IMMEDIATE
~
RELEASE
October 29, 1990
Bureau of the Public Debt
EW
~
lN'ashinyon.
2t&"&9
Office of Financing
202-376-'350
CONTACT:
I
DC
/
RESULTS OF TREASURY'S AUCTION
I
Tenders
on November
OF 26-WEEK
BILLS
r.
for $9, 835 million of'26-week bills to
1, 1990 and mature on May 2, 1991 were
be issued
accepted today (CUSIP: 912794WG5).
OF ACCEPTED
RANGE
COMPETITIVE BIDS
Discount
Rate
Low
High
Average
7. 07%
7. 13%
Investment
Rate
7. 43%
7. 50%
7. 50%
Price
96. 426
96. 395
96-395
Tenders at the high discount rate were allotted 69%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
Received
28, 825
24, 140, 860
18, 775
40, 550
40, 575
31, 350
2, 195, 780
22, 805
8, 170
51, 140
26, 415
678, 900
187 160
$27, 471, 305
(in thousands)
Acce ted
$23, 839(015
NH-1008
40, 550
40, 575
31, 040
658, 030
16, 185
8, 170
51, 140
19, 865
163, 400
187 160
$9, 834, 715
$6, 202, 425
$6, 996, 110
1, 900, 000
1, 900, 000
938 605
additional $137, 895 thousand o
issued to foreign official instit'~tions
An
28, 825
8, 571, 000
18, 775
793 685
$24, 632, 700
$27, 471, 305
793 685
938 605
$9, 834, 715
bjl]s
for
'$R)l
new
cash.
DEBT
of the Treasuri
Department
FOR IMMEDIATE
~
Bureau of the Public Debt
RELEASE
/~pj's
~
ii'ashint, ton, DC 'ti '.l9
CONTACT:
October 29, 1990
RESULTS OF TREASURY'S AUCTION
Office of Financing
202-376 —'350
BILLS
OF 13-WEEK
for $9, 836 million of 13-week bills to be issued
1, 1990 and mature on January 31, 1991 were
Tenders
on November
accepted today (CUSIP: 912794VT8).
RANGE
OF ACCEPTED
BIDS:
COMPETITIVE
Discount
Rate
Investment
Rate
Price
7. 32%
98. 208
7. 09%
Low
98. 195
7. 374
7. 144
High
98. 200
7. 12%
7. 35%
Average
Tenders at the high discount rate were allotted 44.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
t'
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
Received
39, 710
26, 322, 495
19, 440
(in thousands)
II
39, 710
8, 432, 695
19, 440
1, 981, 045
62, 425
43, 560
39, 980
365, 045
35. 185
803, 375
26, 290
45, 885
30, 185
405, 375
$29, 759, 970
$9, 836, 170
$26, 246, 435
'$6, 322, 635
62, 425
43, 560
39, 980
31, 860
46, 860
26, 290
45, 885
293 720
293 720
$27, 423, 275
176 840
'$7, 499, 475
1, 874, 400
1, 874, 400
462 295
462 295
1 176 840
$29, 759, 970
1
$9, 836t170
additional $65, 105 thousand of bills
issued to foreign off cial institutions for
An
NB-1009
~~Ll C
.,
ill
new
be
cash.
DEBT
UBLI
Department
of the Treasur
~
Bureau of the Public Debt
RELEASE
FOR IMMEDIATE
EW
~
l~ ashington,
CONTACT:
October 30, 1990
RESULTS OF TREASURY'S AUCTION
DC 2t~'~9
Office of Financing
202-376-'350
OF 2-YEAR NOTES
for $12, 107 million of 2-year notes, Series AF-1992,
to be issued
31, 1990 and mature on October 31, 1992
Tenders
on October
were accepted today
(CUSIP: 912827ZL9).
interest rate
the notes will be 7 3/4%. The range
of accepted bids and corresponding prices are as follows:
The
on
Price
Yield
7. 83%
7. 84%
7. 84%
99. 855
99. 836
99. 836
Average
$15, 000 was accepted at lower yields.
Tenders at the high yield were allotted
Low
High
TENDERS RECEIVED AND ACCEPTED
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
d
'
d
61, 060
38, 992, 020
43, 245
63, 240
103, 645
47, 615
2, 018, 765
79, 175
67, 360
104, 545
30, 295
994, 665
284 380
$42, 890, 010
52%.
(in thousands)
61, 060
10, 491, 045
42, 285
60, 240
77, 080
45, 035
563, 420
64, 215
27, 355
102, 145
25, 295
263, 505
284 355
$12, 107, 035
$12, 107 million of accepted tenders includes $1, 360
million of noncompetitive tenders and $10, 747 million of
competitive tenders from the public.
In addition, $850 million of tenders was awarded a-. the
average price to Federal Reserve Banks as agents for foreign an
$639 million
An additional
international monetary authorities.
Federal
of tenders was also accepted at the average priceforfrom
maturing
Reserve Banks for their own account in exchange
The
securities.
NB-1010
i
of the Treasury
~portment
~
Washington,
FOR RELEASE AT 4:00 P.M.
October 30, 1990
D.C. ~ Telephone $66-204
CONTACT:
Ottice ot Fin;incin.
(&-4
1+1)
TREASURY'S WEEKLY BILL OFFERING
of the Treasury, by this public notice, invites tenders for two series ot
Treasury bills totaling approximately $19,600 million, to be issued November 8, 1990. This oft'erin
will provide about $1,925 million of new cash for the Treasury, as the maturing bills are outstanding
in the amount of $17,683 million. Tenders will be received at Federal Reserve Banks and Branches
and at the Bureau of the Public Debt, Washington, D. C. 20239-1500, Monday, November &. 1990,
The Department
rior t 12:00 noon for noncom
co et' ive tender .
etitive tenders and
rior to 1:00 .m. Eastern Standard
time
tor
on Au st 15 the Treasu
has set a new 12:00 noon Eastern time deadlin«
o oncom etitive tenders for its securities uctions. The chan e will he et't««tive
with t es bill auctions scheduled for November 5 1990. The deadline for submissions of comet't'v
emai at 1:0 . . Eastern time. Unti th s auction all tenders both
e de s w'
c m et'tive ad been e u' ed to be submitted b 1:00 . m. on auction dav.
co e v
announced
t e
missi
The two series offered are as follows:
91-day bills (to maturity date) for approximately $9,800 million, representing an .iddition. il
'
amount of bills dated August 9, 1990, and to mature February 7, 1991 (CUSIP 4'o. 91 &)-) X t. 5),
currently outstanding in the amount of $9, 230 million, the additional and original bills to he treely
interchangeable.
182-day bills (to maturity date) for approximately $9, 800 million, representing an a&jditional
' bills dated May 10, 1990, and to mature May 9, 19! (CUSIP No. 912794 9,') 1 3), ciiistanding in the amount of $10, 139 million, the additional and original bills to he treeli
amour
rentl)
in t ere t . . ageable.
The bills will be issued on a discount basis under competitive and noncompetitive hid~tin&,
and at maturity their par amount will be payable without interest. Both series ot bills N, ill he I.iu«&.
entirely in book-entry form in a minimum amount of $10,000 and in any higher $5, 000 multiple, on
the records either of the Federal Reserve Banks and Branches, or of the Department ot the
Treasury.
The bills will be issued for cash and in exchange for Treasury bills maturing 4& . emh«r i.
1990. Tenders from Federal Reserve Banks for their own account and as agents for tore&i n ~nil
internat'-aal monetary authorities v ill be accepted at the weighted average bank di»'«unt r, ite» «l
ompetitive tenders. Additional amounts of the bills may be issued '«& Fe&j«r. il Re»«r «
accepts
Banks, as agents for foreign and international monetary authorities, to the exi«n'. 'l. .i, the . &«r«.
gate amount of tenders for such accounts exceeds the aggregate amount o', maturing hilt» held hi
them. Federal Reserve Banks currently hold $1. 54 million as agents for forei; ~nd intern~tiiin. il
monetary authorities, and $4, 763 million for their own account. Tenders for bills to he maini. &in«ij
Fc-. -.
on the book-entry records of the Department of the Treasury should be suhmitted on
PD 517o-I (for 13-week series) or Form PD 5176-" (for 26-w«ek serie»)
.
l
TRFASURY'S
13-, 26-,
AND
52-MEEK BZLL OFFERINGS,
Page 2
Each tender must state the par amount of bills bid for,
which must be a minimum of $10, 000- Tenders over $10, 000 must
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
A single
two decimals, e. g. , 7. 15%. Fractions may not be used.
as defined in Treasury s single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
bidder,
and dealers who make primary
Banking institutions
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers, if
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
position in the bills being offered
such position is in excess
of $200 million. This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction. Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
if
each customer whose net long position
exceeds $200 million.
in the
bill
being offered
A noncompetitive
bidder may not have entered into an
agreement, nor make an agreement to purchase or sell or otherwise dispose of any noncompetitive awards of this issue being
auctioned prior to the designated closing time for receipt of
tenders.
Payment for the full par amount of the bills applied for
must accompany all tenders submitted for bills to be maintained
on the book-entry records of the Department of the Treasury.
A cash adjustment
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined
in the auction.
deposit need accompany tenders from incorporated banks
companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches.
No
and
8/89
trust
TREASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page
3
Public a»nouncement will be made by the Department of the
of the amount and yield range of accepted bids. Cornpetitive bidders will be advised of the acceptance or rejection
of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g. , 99.923, and the determinations
of the Secretary of the Treasury shall be final.
Treasury
Settlement for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
funds
on the issue date, in cash or other immediately-available
Cash
adjustments
or in Treasury bills maturing on that date.
will be made f' or differences between the par value of the
maturing bills accepted in exchange and the issue price of the
new
bills.
If a bill is purchased at issue, and is held to maturity,
the amount of discount is reportable as ordinary income on the
Federal income tax return of' the owner for the year in which
Accrual-basis taxpayers, banks, and other
the bill matures.
persons designated in section 1281 of the Internal Revenue Code
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
of the Treasury Circulars, Public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Trea ury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtained
from any Federal Reserve Bank or Branch, or from the Bureau of
Department
the Public Debt.
8/89
'V
jpartment of the Treosurl
~
Woshlngton,
jg',
1
FOR IMMEDIATE
RELEASE
October 31, 1990
iA;v
'v V
4 v v
Contact:
Statement
O.C. I Telephone 566-204$
, Qesiree
Tucker-Sorini
(202) 566-8773
or
Cheryl Crispen
(202) 566-5252
by
Secretary of the Treasury
Nicholas
F.
Brady
The need for action by the Congress to authorize funding for
the savings and loan cleanup and the consequences of failing to
act were spelled out by the Administration repeatedly and in
great detail over a period of many months in congressional
hearings and letters to Congress urging immediate and decisive
action. The Senate acted on this information and passed a
funding authorization
prior to adjournment, but the House failed
to act. RTC Chairman Seidman has said the funding halt will
result in substantial
additional
costs to taxpayers.
this, I have asked the RTC Oversight Board to
are available to minimize additional
what alternatives
The Oversight Board will discuss options on Thursday,
In light of
examine
costs.
November
1, 1990.
oOo
NB-1012
...'9(,
I;
federal. i fina. ncing ban~
" ""SWASHINGTON,
D. C.
20220
g
'
October 31
PEDERAL FINANCING
BANK
199P
ACTIVITY
Charles D. Haworth, Secretary, Federal Financing Bank,
the following activity for the month of September 1990.
FFB holdings of obligations issued, sold or guaranteed by
other Federal agencies totaled $173.3 billion on September 30,
1990, posting an increase of $7. 3 billion from the level on
August 31, 1990. This net change was the result of increases in
holdings of agency debt of $7, 280. 9 million and in holdings of
agency assets of $109.8 million, while holdings of agencyguaranteed loans decreased by $89. 4 million.
FFB made 21
disbursements
during September.
announced
During fiscal year 1990, FFB holdings of obligations issued,
sold or guaranteed by other Federal agencies posted a net
increase of $37, 226. 6 million from the level on September 30,
1989. This change was the result of increases in holdings of
agency debt of $39, 200. 9 million and decreases in holdings of
agency assets of $1, 051. 2 million and in holdings of agencyguaranteed loans of $923. 0 million.
The Appropriations
with Rural
Act for 1989 authorized
Electrification Administration
par up to $500 million of loans. Pursuant
received prepayments of $139 ' 7 million in
an
associated loss of $40. 3 million.
FFB borrowers
to prepay at
to this Act, FFB
FY 1990. FFB suffered
guarantees
Appropriations Resolution for 1988 authorized
foreign military sales guarantees to prepay at
par their debt vith interest rates of 10 percent or higher.
The
Foreign Operations Appropriations Act of 1990 amended this
Resolution to lower the interest rate threshold to 8 percent.
Pursuant to the Resolution, FFB received prepayments of $66. 0
million in FY 1990. FFB suffered an associated loss of $5. 4
million.
The Continuing
FFB borrowers with
During fiscal year 1990, the FFB began lending to the
30, 1990, FFB
Resolution Trust Corporation.
On September
holdings of RTC obligations totaled $41, 481. 7 million.
FFB holdings
bank's history.
loan
Attached
activity
NB-1 A1 3
on September
30, 1990 vere the highest
to this release are tables presenting
and FFB holdings
as of September
in the
FFB September
30, 1990.
Page 2
FEDEKVJ FINANCING
SEPZZÃBER
Note ¹89
Nate ¹90
Note ¹91
'di
Central Li
1990 ACTIVITY
AMER'
FINAL
lÃIKREST
INTEREST
OF ADVANCE
MM'CATTY
RATE
RATE
(semiannllal)
(other than
semi-annual)
8 628%
9 016%
9 2 19%
$256 I 000
000 ~ 00
7.868%
10/26/90
7.590%
200' 000' 000 00
1, 100, 000, 000. 00
1~ 115 000 000 00
270~ 000' 000 ~ 00
3 540' 000 ' 000 00
10/1/90
10/1/90
10/1/90
10/1/90
10/1/90
10/1/90
7.752%
7.748%
7.754%
7.712%
7.760%
7.722%
9/17/90
9/24/90
10/1/90
10/2/90
7 751%
7 717%
9/24
9/28
178' 000/ 000 00
136' OOOO 000 00
27, 000, 000. 00
30, 000, 000. 00
7.759%
7.697%
9/30
272, 000, 000. 00
9/30/00
8.948%
~
8 ~ 000 g 000 00
864, 000, 000. 00
Facili
+Nate ¹527
5, 000, 000. 00
9/28
Nate No. 90-05
Advance
Advance
Advance
Advance
Advance
Advance
¹14
¹15
¹16
¹17
¹18
¹19
9/4
9/7
9/10
9/17
9/20
9/24
1 000 I 000 000 00
~
~
g
~
g
g
TENNESSEE VAIIEY AITfKRITY
Short-term
Short-term
Short-term
Short-term
Band
Band
Bond
Bond
¹51
Certificates of Beneficial
CBO
¹32
+rollover
9/6
9/17
¹52
¹53
¹54
4
BANK
9/1/00
9/1/08
3/1/91
9/4
9/4
9/4
of
~
~
~
Ownershi
8 ~ 537% qtr
cUlIl
~
~
Page 3 o=
FEDERAL FINAHCIlK
SEPTEMBER
Fo
ei
1990
BANK
ACI'IVZIY
AMER'
FINAL
INTEREST
IVI'ER EST
OF ADVANCE
%DURITY
RATE
RATE
(semi-
(other
annual)
semi-annual)
hen
Mili
Morocco 9
Morocco 13
9/14
9/14
Electric f267
S
540. 00
33, 579. 00
3/31/94
5/31/95
8. 447%
8. 547%
9/30/92
1/3/17
1/3/17
8. 156%
12/31/90
7. 707%
Plains Electric 4300
Plains Electric 4300
9/17
9/20
9/26
1,203, 000. 00
1,756, 000. 00
1,908, 000. 00
Note A-90-13
9/28
562, 888, 154.82
Old Dardzu. an
9.059%
9.193%
8. 075% qtr.
8.959% qtr.
9. 090% qtr.
Page
FEDERAL FINANCING
4
of
BANK HOLDINGS
(in millions)
Se tember
Procrram
Agency Debt:
Export-Import Bank
NCUA-Central Liquidity
$
Facility
Resolution Trust Corporation
Tennessee Valley Authority
U. S. Postal Service
sub-total*
Agency Assets:
Farmers Home Administration
DHHS-Health Maintenance Org.
DHHS Medical Facilities
Rural Electrification Admin. -CBO
Small Business Administration
+
General Services Administration
DOI-Guam Power Authority
DOI-Virgin Islands
NASA~Space Communications
Co. +
DON-Shzp Lease Financing
.ural
Electrification Administration
BA-Small Business Investment Cos.
BA-State/Local Development Cos.
VA-Seven States Energy Corp.
iOT-Section 511
~OT-WNATA
sub-total*
figures
total*
may
no
$
o a
ue
capitalized
o roun
11, 339. 8
56. 6
41, 481. 7
Au
ust 31 1990
$
xng
interest.
Net Chan e
90- 30 90
9
$195.
-0-9
11, 143.9
56. 6
14, 382. 0
6, 697. 8
73, 957. 9
34, 256. 7
14, 522. 0
6, 697. 8
66, 677. 0
52, 049. 0
52, 211.0
$
7, 280. 9
56, 616. 9
56, 507. 1
109.8
9, 755. 6
4, 880. 0
244. 0
1, 950. 8
367. 3
29. 7
25. 3
1, 095. 9
1, 672. 4
19, 042. 3
382. 5
741. 6
2,' 356. 0
23. 3
177.0
42, 743. 7
173, 318.5
9, 838. 7
-83.
-0-1
-3.
-0-0
-0-0.
-0-6
-0-0-
272. 0
-0. 2
4, 880. 0
246. 9
1, 950. 8
367. 3
30. 3
25. 3
1, 095. 9
1, 672. 4
19, 043. 5
391.5
746. 1
2, 343. 9
356. 2
-54. 8
41, 481. 7
-3, 085. 0
502. 8
39, 200. 9
-432. 9
1 2
-9.
-4. 06
12 1
-0.
-0-1
-30. 0
-39. 4
-44. 5
-10.8
-1.
-0. 27
100. 7
-48. 2
-232. 7
-172. 8
-57. 8
61. 1
-13.
-0-9
-89. 4
-923. 0
~
~
$
Net Chan
9
89-9 30
-1, 262.
-5. 02
-5. 4
224. 5
-3. 2
-1, 051.2
-162.
-0-0
-0-
8. 6
$
'90
-0-0
4, 407. 2
23. 5
177. 0
42, 833. 1
166, 017. 2
FY
225. 0
7,-140.
69. 6
82. 7
4, 135.2
8. 4
Loans:
Government-Guaranteed
DOD-Foreign Military Sales
DEd. -Student Loan Marketing Assn.
DHUD-Community
Dev. Block Grant
DHUD-Public Housing Notes +
does not include
1990
69. 6
82. 7
sub-total*
grand
30
7, 301.3
$
37, 226. 6
4
lipartment of the Treasury
~
FOR RELEASE WHEN AUTHORIZED
October 31, 1990
Washington,
AT
O.C. ~ Telephone $44-204$
PRESS CONFERENCE
CONTACT:
TREASURY NOVEMBER QUARTERLY
Office of Financing
202/376-4350
FINANCING
will raise about $10, 725 million of new cash
and refund $23, 531 million of securities maturing November 15,
1990, by issuing $12, 500 million of 3-year notes, $11, 000 million
of 10-year notes, and $10, 750 million of 29-3/4-year 8-3/4%
bonds.
The $23, 531 million of maturing securities are those held
the
public, including $3, 176 million held, as of today, by
by
Federal Reserve Banks as agents for foreign and international
The Treasury
monetary
authorities.
The three issues totaling $34, 250 million are being offered
to the public, and any amounts tendered by Federal Reserve Banks
as agents for foreign and international monetary authorities
will be added to that amount. Tenders for such accounts will be
accepted at the average prices of accepted competitive tenders.
In addition to the public holdings, Federal Reserve Banks
hold $3, 420 million of the maturing securities for their own
accounts, which may be refunded by issuing additional amounts of
the new securities at the average prices of accepted competitive
tenders.
add't'on
casu
o
n
12 000 m
on of
b'
w'
ana em nt
s that
be auctioned on hursda
6 -da
as
ta s about the cash mana ement bills are
November 8
9 .
iven 'n a se a ate announcement.
These note and bond auctions will be the first to have
different deadlines for submitting noncompetitive and competitive
tenders. Tenders will be received at Federal Reserve Banks and
Branches and the Bureau of the Public Debt, Washington, D. C.
20239-1500. Noncompetitive tenders must be received prior to
12:00
on
noon EST and competitive
the scheduled
will
auction dates.
tenders
prior to 1:00 p. m.
The 10-year note and 29-3/4-year bond being
be eligible for the STRIPS program.
EST
offered today
Details about each of the new securities are given in ~he
attached highlights of the of fering and in the of f icia'. o. . eri.
;.
circulars.
oOo
Attachment
~
HIGHLIGHTS
OF TREASURY OFFERINGS TO THE PUBLIC
1990 QUARTERLY FINANCING
NOVEMBER
October
Amount
Offered to the Public
Descri tion of Securit
Term and type of security
Series and CUSIP designation
.
CUSIP Nos.
for
STRIPS Components
Interest rate
Investment
Amount
yield
.
denomination
required
$11,000 million
$10, 750 million
3-year notes
Series V-1993
(CUSIP No. 912827
Not applicable
10-year notes
29-3/4-year bonds (reopening)
Bonds of August 2020
(CUSIP No. 912810 EG 9)
Listed in Attachment A
of offering circular
November 15, 1990
Series
ZM
7)
the average of accepted bids
To be determined at auction
To be determined after auction
May 15 and November 15
Premium or discount
Interest payment dates
Minimums
$12, 500 million
November 15, 1990
November 15, 1993
To be determined based on
Issue date
date
Maturity
available
of Sale:
of sale
Competitive tenders
Terms
Method
~
...
tenders
To be determined
May
Yield auction
up
August
15
an annual
decimals,
15, 2020
8-3/4%
To be determined at auction
To be determined after auction
February 15 and August 15 (first
payment on February 15, 1991)
$1,000
Must be expressed
in full at the average
to $1,000, 000
A
based on
15 and November
Yield auction
Accepted
5)
ZN
the average of accepted bids
To be determined at auction
To be determined after auction
Must be expressed as
an annual yield with two
decimals,
g. , 7. 10%
price
Accrued interest
payable by investor
(CUSIP No. 912827
Listed in Attachment
of offering circular
November 15, 1990
November 15, 2000
To be determined
e.
Noncompetitive
D-2000
$1, 000
$5, 000
Not applicable
for STRIPS
31, 1990
after auction
$160, 000
Yield auction
Must be expressed as
as
yield with two
e. g. , 7. 10%
Accepted in full at the average
price up to $1, 000, 000
yield with two
e. g. , 7. 10%
Accepted in full at the average
price up to $1,000, 000
an annual
decimals,
None
None
$21.875 per $1,000 (from August 15,
1990, to November 15, 1990)
Full payment to be
submitted with tender
Full payment to be
submitted with tender
Full payment, including
accrued interest, to be
submitted with tender
Acceptable
Acceptable
Acceptable
Dt Terms:
Payment by non-institutional
~sa
investors
.
Deposit guarantee by
designated institutions
Dates:
Receipt of tenders
a) Noncompetitive
b) Competitive
Settlement (final payment
~Ks
due from
a) funds
November
6, 1990
prior to 12:00 noon,
prior to 1:00 p. m. ,
EST
EST
Wednesday,
November
prior to 12:00 noon,
prior to 1:00 p. m. ,
7, 1990
EST
EST
Thursday,
November
8, 1990
prior to 12:00 noon,
prior to 1:00 p. m. ,
EST
EST
institutions):
inmediately
to the Treasury
readily-collectible check
available
b)
Tuesday,
Thursday, November 15, 1990
Tuesday, November 13, 1990
Thursday, November 15, 1990
Tuesday, November 13, 1990
Thursday, November
Tuesday, November
15, 1990
13, 1990
partment of the Treasury
FOR RELEASE WHEN
October 31, 1990
~
AUTHORIZED
Washington,
O.C. ~ Telephone S66-2041
AT PRESS CONFERENCE
CONTACT:
Office of Financing
202/376-4350
TREASURY OFFERS $12, 000 MILLION
OF 161-DAY CASH MANAGEMENT BILLS
The Department of the Treasury, by this public notice,
invites tenders for approximately $12, 000 million of 161-day
Treasury bills to be dated November 15, 1990, and to mature
April 25, 1991 (CUSIP No. 912794
WF
7).
Tenders will be received at all Federal Reserve Banks and
Branches prior to 11:00 a. m. for noncompetitive tenders and prior
to 12:00 noon, Eastern Standard time, for competitive tenders,
Thursday, November 8, 1990. The bills will. be issued on a discount basis under competitive and noncompetitive bidding, and
at maturity their par amount will be payable without interest.
This series of bills will be issued entirely in book-entry form
in a minimum amount of $10, 000 and in any higher $5, 000 multiple
on the records of the Federal Reserve Banks and Branches.
not be acce te
bil s to be ma'ntained
co ds o the De artment o t e reasur
TREASUR
. Tenders will ~o be received at the
D R C
Department of the Treasury, Washington.
e e s w'
the boo — nt
on
Additional amounts of the bills may be issued to Federal
Reserve Banks as agents for foreign and international
monetary
authorities at the average price of accepted competitive tenders.
Each tender must state the par amount of bills bid for,
be a minimum of $10, 000. Tenders over $10, 000 must be
which must
of $5. 000.
tenders must also show the
discount
rate basis with two
yield desired,
Fractions
not
be used.
A single
may
decimals, e. g. , 7. 154.
bidder, as defined in Treasury's single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
in multiples
expressed
Competitive
on a bank
institutions and dealers who make primary markets
in Government securities and report daily to the Federal Reserve
Bank of New York their positions in and borrowings on such securities may submit tenders for account of customers, if the names
of the customers and the amount for each customer are furnished.
Others are only permitted to submit tenders for their own accoun. .
Each tender must state the amount of any net long posi=ion in +.-. e
bills being offered if such position is in excess o. $200 illion.
This information should reflect positions held as of 11:30 a. m. ,
ould
Such positions
Eastern time, on the day of the auction.
Banking
-.
include
bills acquired
through
"when
issued" trading,
,
futures,
Dealers, who make primary markets in
transactions.
securities and report daily to the Federal Reserve Bank
of New York their positions in and borrowings on such securities,
tenders for customers, must submit a separate
when submitting
tender for each customer whose net long position in the bill
being offered exceeds $200 million.
bidder may not have entered into an
A noncompetitive
agreement, nor make an agreement to purchase or sell or otherwise
dispose of any noncompetitive awards of this issue being auctioned
prior to the designated closing time for receipt of tenders.
and forward
Government
deposit need accompany tenders from incorporated banks
and trust companies and from responsible and recognized dealers in
investment securities for bills to be maintained on the book-entry
records of Federal Reserve Banks and Branches.
No
Public announcement will be made by the Department of the
Treasury of the amount and yield range of accepted bids. Those
submitting competitive tenders will be advised of the acceptance
The Secretary of the Treasury
or rejection of their tenders.
expressly reserves .the right to accept or reject any or all
tenders, in whole or in part, and the Secretary's action shall be
final. The calculation of purchase prices for accepted bids will
be carried to three decimal places on the basis of price per
of the Secretary of
hundred, e. g. , 99. 923, and the determination
the Treasury shall be final. Settlement for accepted tenders in
accordance with the bids must be made or completed at the Federal
funds
Reserve Bank or Branch in cash or other immediately-available
on Thursday, November 15, 1990.
If a bill is purchased at issue, and is held to maturity,
the amount of discount is reportable as ordinary income on the
Federal income tax return of the owner for the year in which the
bill matures. Accrual-basis taxpayers, banks, and other persons
designated in section 1281 of the Internal Revenue Code must
include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
Department of the Treasury Circulars, Public Debt Series
Nos. 26-76 and 27-76, Treasury's single bidder guidelines,
and this
notice prescribe the terms of these Treasury bills and govern the
conditions of their issue. Copies of the circulars and guidelines
may be obtained from any Federal Reserve Bank or Branch.
Removal Notice
The item identified below has been removed in accordance with FRASER's policy on handling
sensitive information in digitization projects due to copyright protections.
Citation Information
Document Type: Transcript
Number of Pages Removed: 13
Author(s):
Title:
Treasury Department Quarterly Refunding Announcement
Date:
1990-10-31
Journal:
Volume:
Page(s):
URL:
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
~N~n&
4& &h &~ecIO~FY ~
FOR RELEASE WHEN
October 31, 1990
AUTHORIZED
Nashlneton,
D.C. ~ Telephone sse-204&
AT PRESS CONFERENCE
CONTACT:
Office of Financing
202/376-4350
TREASURY NOVEMBER QUARTERLY
The Treasury
FINANCING
will raise about $10, 725 million of
new
cash
and refund $23, 531 million of securities maturing November 15,
1990, by issuing $12, 500 million of 3-year notes, $11, 000 million
of 10-year notes, and $10, 750 million of 29-3/4-year 8-3/44
bonds. The $23, 531 million of maturing securities are those held
by the public, including $3, 176 million held, as of today, by
Federal Reserve Banks as agents for foreign and international
monetary
authorities.
The three issues totaling $34, 250 million are being offered
to the public, and any amounts tendered by Federal Reserve Banks
as agents for foreign and international
monetary authorities
will be added to that amount.
Tenders for such accounts will be
accepted at the average prices of accepted competitive tenders.
In addition to the public holdings, Federal Reserve Banks
hold $3, 420 million of the maturing securities for their own
accounts, which may be refunded by issuing additional amounts of
the new securities at the average prices of accepted competitive
tenders.
a
w'
en
These note and bond auctions will be the first to have
different deadlines for submitting noncompetitive and competitive
tenders. Tenders will be received at Federal Reserve Banks and
Branches and the Bureau of the Public Debt, Washington, D. C.
20239-1500. Noncompetitive tenders must be received prior to
12:00
on
noon EST and competitive
the scheduled
auction dates.
tenders prior to 1:00 p. m. EST
10-year note and 29-3/4-year bond being offered today
will be eligible for the STRIPS program.
Details about each of the new securities are given in the
attached highlights of the offering and in the official offering
The
circulars.
OF TREASURY OFFERINGS TO THE PUBLIC
NOVEMBER 1990 QUARTERLY FINANCING
HIGHLIGHTS
October
Offered to the Public
Amount
:
Descri tion of Securit
Term end type of
Series and CUSIP
security
Issue date
Maturity date
Interest rate
of Sale:
of sale
Competitive tenders
10-year notes
Accrued
November
November
7)
15, 1990
15, 1993
~
A
August
based on
..
Accepted in full at the average
price up to $1, 000, 000
None
None
Full payment to be
submitted with tender
Full payment to be
submitted with tender
Ful l payment, including
accrued interest, to be
submitted with tender
Acceptable
Acceptable
Acceptable
an annual
two
7.10X
~
........... .
~
.
Dates:
Receipt of tenders
Tuesday,
November
6, 1990
prior to 12:00 noon,
prior to 1:00 p. m. ,
a) Noncompetitive
b) Competitive
Settlement (final payment
EST
EST
Wednesday,
To be determined at auction
To be determined after auction
February 15 end August 15 (first
payment on February 15, 1991)
$1,000
To be determined
yield with
e.g. ,
the average of accepted bids
To be determined at auction
To be determined after auction
May 15 end November 15
after auction
$160, 000
Yield auction
Must be expressed es
yield with
an annual
decimals,
Accepted
price
up
two
e.g. , 7.10X
in full at the average
to $1,000, 000
$21.875 per $1, 000 (from August 15,
1990, to November 15, 1990)
~re
b)
15, 2020
8-3/4X
Yield auction
Must be expressed as
an annual yield with two
decimals, e.g. , 7. 10%
Accepted in full at the average
price up to $1, 000, 000
Deposit guarantee by
designated institutions
due from
a) funds
5)
29-3/4-year bonds (reopening)
Bonds of August 2020
(CUSIP No. 912810 EG 9)
Listed in Attachment A
of offering circular
November 15, 1990
Yield auction
Must be expressed as
non-institutional
by
ZN
I l i on
STRIPS
available
interest
investors
(CUSIP No. 912827
Listed in Attachment
of offering circular
November 15, 1990
November 15, 2000
mi
$1, 000
To be determined
tive tenders
payable by investor
Payment
ZM
applicable
decimals,
Noncompeti
Series D-2000
(CUSIP No. 912827
Not
$10, 750
$5, 000
Not applicable
denomination
Terms
Method
3-year notes
Series V-1993
.......
for
$11,000 million
To be determined
Minisun
required
$12, 500 million
based on
bids
accepted
of
average
the
To be determined at auction
To be determined after auction
May 15 and November 15
or discount
payment dates
Amount
....
Components
Interest
Premium
.
~
. .. .. . . . .
.
yield
Investment
~
designation
for STRIPS
CUSIP Nos.
.
31, 1990
7, 1990
November
prior to 12:00 noon,
prior to 1:00 p. m. ,
EST
EST
Thursday,
November
8, 1990
prior to 12:00 noon,
prior to 1:00 p. m. ,
EST
EST
institutions):
imnediately
avai lable to the Treasury
readily-collectible check
.
Thursday, November
Tuesday, November
15, 1990
13, 1990
Thursday, November
Tuesday, November
15, 1990
13, 1990
Thursday, November
Tuesday, November
15, 1990
13, 1990
IpatttNInt of the Treasury
~
FOR RELEASE WHEN AUTHORIZED
October 31, 1990
Iashi ne t on,
D.C. ~ Telephone $66-204
AT PRESS CONFERENCE
CONTACT:
Office of Financing
202/376-4350
TREASURY OFFERS $12, 000 MILLION
OF 161-DAY CASH MANAGEMENT BILLS
The Department of the Treasury, by this public notice,
invites tenders for approximately $12, 000 million of 161-day
Treasury bills to be dated November 15, 1990, and to mature
April 25, 1991 (CUSIP No. 912794 WF 7).
Tenders will be received at all Federal Reserve Banks and
Branches prior to 11:00 a. m. for noncompetitive tenders and prior
to 12:00 noon, Eastern Standard time, for competitive tenders,
Thursday, November 8, 1990. The bills will be issued on a discount basis under competitive and noncompetitive bidding, and
at maturity their par amount will be payable vithout interest.
This series of bills will be issued entirely in book-entry form
in a minimum amount of $10, 000 and in any higher $5, 000 multiple
on the records of the Federal Reserve Banks and Branches.
e
o
- t
AS
Department
~
0
e
n
Tenders will
be received
of the Treasury, Washington.
o
at the
Additional amounts of the bills may be issued to Federal
Reserve Banks as agents for foreign and international monetary
authorities at the average price of accepted competitive tenders.
Each tender must state the par amount of bills bid for,
which must be a minimum of $10, 000. Tenders over $10, 000 must be
in multiples of $5, 000. Competitive tenders must also show the
yield desired, expressed on a bank discount rate basis with two
decimals, e. g. , 7. 15\. Fractions may not be used. A single
bidder, as defined in Treasury's single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
institutions and dealers vho make primary markets
in Government securities and report daily to the Federal Reserve
Bank of Nev York their positions in and borrovings on such secuthe names
rities may submit tenders for account of customers, if furnished.
of the customers and the amount for each customer are
Others are only permitted to submit tenders for their own account.
Each tender must state the amount of any net long position in the
bills being offered if such position is in excess of $200 million.
This information should reflect positions held as of 11:30 a. m. ,
Such positions would
Eastern time, on the day of the auction.
Banking
include
bills
acquired
through
"vhen issued" trading,
futures,
transactions.
Dealers, who make primary markets in
securities and report daily to the Federal Reserve Bank
of New York their positions in and borrowings on such securities,
tenders for customers, must submit a separate
when submitting
tender for each customer whose net long position in the bill
being offered exceeds $200 million.
bidder may not have entered into an
A noncompetitive
agreement, nor make an agreement to purchase or sell or otherwise
dispose of any noncompetitive awards of this issue being auctioned
prior to the designated closing time for receipt of tenders.
and forward
Government
deposit need accompany tenders from incorporated banks
and trust companies and from responsible and recognized dealers in
investment securities for bills to be maintained on the book-entry
records of Federal Reserve Banks and Branches.
No
Public announcement will be made by the Department of the
Treasury of the amount and yield range of accepted bids. Those
submitting competitive tenders will be advised of the acceptance
or rejection of their tenders. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all
tenders, in whole or in part, and the Secretary's action shall be
final. The calculation of purchase prices for accepted bids will
be carried to three decimal places on the basis of price per
hundred, e. g. , 99.923, and the determination
of the Secretary of
the Treasury shall be final. Settlement for accepted tenders in
accordance with the bids must be made or completed at the Federal
Reserve Bank or Branch in cash or other immediately-available
funds
15, 1990.
If a bill is purchased at issue, and is held to maturity,
the amount of discount is reportable as ordinary income on the
Federal income tax return of the owner for the year in which the
on Thursday,
November
bill
Accrual-basis taxpayers, banks, and other persons
matures.
designated in section 1281 of the Internal Revenue Code must
include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
Department of the Treasury Circulars, Public Debt SeriesNos. 26-76 and 27-76, Treasury's single bidder guidelines, and this
notice prescribe the terms of these Treasury bills and govern the
conditions of their issue. Copies of the circulars and guidelines
may be obtained from any Federal Reserve Bank or Branch.
TALKING POINTS
FOR THE
FINANCING PRESS CONFERENCE
October 31, 1990
Today we
quarterly
are announcing
refunding.
the terms of our regular
November
I will also discuss the Treasury's
financing
for the balance of the current calendar quarter
our estimated cash needs for the January-March
1991 quarter.
requirements
1.
refund
November
The
We
are offering $34. 25 billion of notes
$23. 5 billion of privately-held
notes maturing
First,
maturing
on November
The minimum
on a
of $12. 50 billion
15, 1993. This note is scheduled
yield basis
denomination
on Tuesday,
on November
be auctioned
on a
15, 2000.
yield basis
denomination
Third,
3/4-year bond,
percent bond maturing
6.
of $11.0 billion
This note
is
on Wednesday,
to
scheduled
7.
November
will be $1, 000.
The minimum
a 29
November
to
will be $5, 000.
Second, a 10-year note in the amount
maturing
on
are:
a 3-year note in the amount
be auctioned
to
$10. 75 billion of cash.
15 and to raise approximately
three securities
and bonds
and
August
a reopening
of the
15, 2020 in the
8 3/4
amount
of
$10. 75 billions This bond is scheduled to be auctioned
a yield basis on Thursday, November 8. The minimum
denomination will be $1, 000.
on
2.
We
bill
management
is
are also offering $12 billion of a 161-day cash
maturing
April 25, 1991. The cash management
bill
to be auctioned on a discount basis on Thursday,
8, at 12:00 noon EST for settlement Thursday,
15. The minimum purchase amount will be $10, 000.
scheduled
November
November
3.
We
will accept noncompetitive
tenders
up
to $1, 000, 000
for each of the bill, note, and bond issues. Noncompetitive
tenders for all Treasury security auctions, beginning with the
Treasury bills to be auctioned on November 5, must be received
one hour prior to the deadline for receipt of competitive tenders
on the day of the auction or postmarked by the day before the
auction and received by the Federal Reserve Bank or Bureau of
Public Debt before COB on the issue date of the security.
4.
For the current
net market borrowing
October-December
need of $97. 7
billion,
quarter,
which
we
estimate
a
includes
to finance Resolution Trust Corporation
The estimate also assumes a $30 billion cash balance
operations.
at the end of December. We may want to have a higher balance,
depending upon our assessment of cash needs at the time.
Treasury
borrowing
this refunding ani the cash management bill,
raised $42. 0 billion of the $97. 7 billion in net
Including
we
will have
market
borrowing
needed
this October-December
was accomplished
borrowing
quarter.
This net
as follows:
$2. 9 billion of cash from the 2-
and
4-year notes which
settled October 1;
$3. 8 billion of cash from the 7-year note that settled
October 15;
$2. 9 billion of cash from the 2-year note which settles
today, October 31;
$9. 2 billion of cash in regular weekly bills, including
the
$
bills
announced
. 4 billion of
yesterday;
cash in 52-week
$10. 8 billion of cash
announced
bills;
issues
from the refunding
today; and
$12. 0 billion
from the cash management
bill
announced
today.
The
$55. 7 billion to be raised in the rest of the Octoberquarter
December
13-, 26-,
2-month
could be accomplished
and 52-week
bills,
sales of regular
a 2-year note in November,
note in early December,
the end of December.
through
Additional
and
a 5-year
2-year and 4-year notes at
bills
cash management
may
be
to cover the low point in cash in early December.
The $12. 5 billion cash management bill issued October
matures December 27 and does not affect the net arket borro
necessary
r, .
total.
19
ing
5.
The
Treasury's
October-December
borrowing
consistent with Resolution Trust Corporation
was approved
operating
act
the Oversight
by
plan was based on the assumption
for
on funding
borrowing
reviewed
estimates
We
plan.
as soon as the Oversight
estimate Treasury
assuming
Treasury's
January-March
7.
We
billion cash balance
borrowing
January
The
its
needs
estimate
on March
31.
to be
1991
The
does not include
any
activities.
that the next auction of REFCORP bonds
Wednesday, January 2, for auction on
anticipate
will be announced
8.
to
Board has
for the January-March
for Resolution Trust Corporation
allowance
Tuesday,
a $20
on
capital budget.
net market borrowing
in the range of $47 to $52 billion
quarter,
would
plans to update
Treasury
the RTC's working
and approved
6.
that Congress
Board will meet in the near future
discuss a revised operating
market
That
1991. Since the Congress did not act
FY
the Oversight
funding,
plan that.
operating
Board on October 25.
is
estimate
on
8,
and
settlement
10-year note
and 29
Tuesday,
January
15.
3/4-year bond announced
today
for conversion to STRIPS (Separate Trading of
Registered Interest and Principal of Securities) and,
accordingly, may be divided into separate interest and principal
will be eligible
components.
TREASURY FINANCING
July
$Bil.
-
REQUIREMENTS
September 1990
Uses
12B '/~
$Bil.
Sources
120
120
Coupon
100
Maturit ice
State
i
Coupon
Refunding
8
Savings
Bonds
Local
80
3
'/i
60
Foreign
Nonmarketables
20
$ Deficit
Increase
in Cash
Balance
80
2
WW
40
--
tr
60
Domestic
Series
Net Market
Borrowing
i
40
20
5 1/2
j1
Department ol the Treasury
Ollice ot Maraet Frnance
Includes budget deficit, changes in accrued interest and checks
outstanding, transfer of $5 billion of REFCORP bond proceeds
to RTC, and minor miscellaneous debt transactions.
October X), tQQO24
TREASURY FINANCING
October
-
REQUIREMENTS
December 1990
$Bil.
$Bil.
Uses
200
Coupon
Maturities
150
Foreign
Nonmarketables
t Coupon
Refunding
150
Decrease
in Cash
Balance k
Series
'/i
t
3 1/2
State and
Local
50--
I
Dome StlC
3/4
100
Sources
193'/4
$ Deficit
tr
'/r
ggi5
100
Savings
Bonds
Net Market
Borrowing
973
—
5'/
Oee o tiler et ol Ihe t feeeolf
I t i r e o r M o k o I F o1d 11ce
0
t
3ff
Includes budget deficit, changes in accrued interest and checks
outstanding, transfer of $5 billion of REFCORP bond proceeds to
RTC, and minor miscellaneous debt transactions.
Issued or announced through October 26, 1990.
Assumes a $30 billion cash balance December 31, 1990.
50
0
Oclotrer
«&
1990~
TREASURY OPERATiNG GASH BALANCE
Semi-Monthly
$Bil.
Total Operating
40
Without
Tax and Loan
Balance
Accounts
Balance
30 .
New
~Borrowing
~
20
~
~
~
~
~
~
t
~
~
~
~
~
~
~
~
1
'atsii"
—10
—20
—30
—40
—50
—60
—70
'our err urrurrrr &r&rrru"ruuuuuuuur
~
~
n ruurur uqnnnnrrunun, ~ vurI ~ r
ruuun n
~n
nty
~
~
Federal Reserve Account
l
$eee
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
1990
jt
Department ot Ihe Treasury
Ottice ot Market Finance
Assumes refunding
Jun
Jul
1991
of maturing
Aug
Sep
Oct
Nov
Dec
issues.
October
3l.
tQQO
t5
TREASURY NET MARKET BORROWING~
$Bil.
$Bil
Coupons
97 'I
90
M Over 10 yrs.
III 2 —10 yrs.
I
I
80
Bills
100
rae
I
I
I
~
50
51.2
35.3
40
I
55.0
52.8
48. 3
39.6
I
I
16.8 23.3
~
I
I
I
I
34.0
17.3
30
I
I
33.0
I
37.0
33.5
32.0
I
32.6
I
I
I
5.3
I
I
I
20
90
I
To Be
Done
64.6 ) g
I I
70
60
I
80
70
60
50
40
30
20
10
10
0
0
-10
-10
-20
-20
30
I
I I
I I I
1986
I
V
I
I I
I I I
1987
I
V
I
I I
I I I
1988
JTExcludes Federal Reserve and Government
(rorull1111oflt ol tne Treasury
r)lf1or uf Mu1kul Frnance
I
V
I
I I
I I I
I
1989
V
I
I I
I I I
IV
30
1990
Account Transactions.
October 30. t990 a
$Mil.
NET NEW CASH FROM NONCOMPETITIVE
IN WEEKLY BILL AUCTIONS
P,
ae !
~ ~
+o 4 0e 1
500
400
'.
300
oe+ H
200
a,
«ka/
I
TENDERS
Discount Rate %
8.0
7.8
P~
a+
I
7.6
t!:!.1!
41e
7.4
,
I
~
~
««'«»
7.2
""t
100
7.0
0
-100
Net NeW CaSh
26 Week
Week
(Left Scale)
".
~e:.""".
. ":.":."::::::g
-200
W13
-300
DiSCOunt Rate (Right Scale)
~~» 26 Week
~13
-400
Week
-800
Nov
Dec
1989
Jan
Feb
M Excludes
Department ot the Traaavry
Ot tice ol Martrai Finance
Preliminary
Mar
Apr
noncompetitive
Jun
1990
May
Jul
Aug
Sep
Oct'
tenders from foreign official accounts.
October
X&,
tQI&2
NONCOMPETITIVE
IN
TREASURY NOTES AND BONDS-'
~
$8il
TENDERS
$8il
7 Year
P~Z 5 Year
PQ+~ 2 4t 4 Year
M'I~ 3, 10 8 30 Year
3.5
3.0
3.5
3.0
2.5
2.5
t
I
I
2.0
l
I
2.0
t
I
I
t
1.5
1.5
l
I
1.0
1.0
t
t
]
t
t
t
I
V
0
JA SON DJF
1988
MAM J J
S
0
N
D
J F
M
1989
&Excludes noncompetitive
Department ot the Treasury
Otlice ot Marttet Finance
A
A
M
J J
1990
A
S
0
0
tenders from foreign add-ons.
Oclotter % ttttt0-t
NET STRIPS AS A PERCENT QF PRIVATELY HELD
ST R I P P A B L E SE C U R I T I E S
Held in Stripped Form
Percent
(Left Scale)
(Right Scale)
~30 Year
~20 Year
~10 Year
100
~30 Year
70
~ 00
~
20 Year
ss'10 Year
—
60
8050
60
—
oooi ~ 00 ~
'
~
0 ~ 'OOOOOOOOO
~
~0
40
~ 0 ~ 00
~ 00 ~ 0
F 000000 ~ oooo ~ 0 ~ 0 ~ ~ 000 OO ~ 000
40
30
20
20
10
I
SSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSS
~ SSSSSSSSSSSSSSSSSSSSSSS
SSSSSSI
0
0
N
1988
Deparlrnenl ot lile TreaaUrY
Oflice ol Markel Finance
D
J F
M
A
M
J J
A
S
0
N
D
J F
1989
+Through October 19, 1990
Note: Reconstitution began May 1, 1987
M
A
M
J J
1990
A
0
S O"
ISSUES
TREASURY NET BORROWING FROM NONMARKETABLE
$8il.
15
~
I~
II
~
14.0
12.5
10.7
10.6
10
$8il.
Savings Bonds
15
Domestic Series
State S Locai Series
Foreign Nonmarketabies
6.2
10
7. 1
6.5
5 7
6.0
4.6
5.8
4.9
2. 3
2.9
1.7
0
0
23
I
II
III
1986
IV
I
II
III
1987
IV
I
II
III
1988
IV
I
II
III
1989
IV
I
II
III
5
IVe
1990
e estimate
Department ol the Treasury
Ottrce of Market Finance
Cktober 30. tgttOS
STATE AND LOCAL MATURITIES 1990
—1992
$8il
0.7
8.3
6.8
6.7
5.5
5.0
4.2
4.2
3.7
'.ry
'C
0
IV
1990
Department ot Itre tteaaurtr
Olltoo ol Martrel Finance
IV
1991
IV
1992
CHANGES IN STATE & LOCAL GOVERNMENT SERIES
RELATIVE TO MUNICIPAL BOND ISSUES
$Bil.
LD New Issues
Refunding
~
~
50
$Bil.
50
Changes in SLGS
40
40
30
30
20
20
10
10
ha
0
I
11
I I I
1986
Department ot the Treasury
Ofhce ot Marttet Ftnance
I
V
I
II
III
1987
I
V
I
a aa
II
III
1988
I
V
I
0
II
III
1989
I
V
I
II
1990
111
$8il.
QUARTERLY CHANGES IN FOREIGN AND INTERNATIONAL
HOLDINGS OF PUBLIC DEBT SECURITIES
Nonmarketable
35
I
35
32.9
Marketable
Add-ons &
Other Transact/ons
30
25.8
M
25
25
18.3
20
14.8
15
1
0
20
18.3
14.4
12.9
z.e
14.0
10
8.3
8.0
-2.1
—10
-2.0
—10
-1.5
-15
-15
-7.4
I
II
III
I
V
I
1986
Department
15
ot the Treaaury
attica ol Market Finance
II
III
1987
IV
I
II
III
1988
IV
I
II
III
IV
1989
&F.R.B. purchases of marketabfe issues as agents for foreign and international
monetary authorities which are added to the amounced unmet of the issue.
&Preliminary.
I
II
1990
III
~
20
FOREIGN ADD-ONS IN TREASURY BILL AND NOTE AUCTIONS
$8il
$8il.
16.3
16
~
14
Notes
5 years and over
12
gQ
2-4 years
16
14
12.0
12
Bills
10.0 10.0
10
9.1
g
10
0
7.7
7.6
6.8
4.0
3.5
3.0
0
I
II
5. 1
4.5
III
1986
IV
4.2
4.1
3. 1
I
II
III
1987
I
V
I
II
IV
I
1988
Quarterty
Depanmeni ol Ine lisasury
Oflice ol Marael Finance
III
Totals
&Through October 26, 1990.
II
III
1989
IV
I
II
1990
III
IV&
0
SHORT TERM INTEREST RATES
Averages
Quarterly
0
20
20
federal
18
Funds
16
16
sr
~~
00 ls:
~
~:
~:
~
14
~
'.
~
~'
~
~
~ ~
~ ~
~0
12
~
10
14
Prime Rate
0~~~~'
00~
Through
~
October 24
00
~~ ~
~
,
0'
~g
~
3 Month
Treasury Bill
~
0S ~
00 00
~
~
~0
00~
Commercial
Paper
~
~0~
'sos ~ ~ soss
~0
000000 ~
0
sO
~
~ ~ s ~ ~ ~ ss
~
0~ ~
~ 00 ~ ~
1980
Dfuf. sf l frit'nl
Cftffr
0 Pl
M
\'ll
. , ki
llin
l
l
iLli
1981 1982
Tfeasu+
in.lnrn
i
~
1984
1985
~
~0
000 ~ 0~
0~
L
1983
0
s
~
indi
0 ~ 0 ~ 0 ~ 00 ~
1986
1987
L
1988
LJ
1989
I
LL4
1990
Or
fir W
r
J)
fVa&
s'l
SHQRT TERM INTEREST RATES
Weekly Averages
Through
ending
October 24
wet
Prime Rate
k
10
10
Federal Funds
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Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
1990
Di n. iitninnf ol the Treasury
Oflice Ot M.rrkrrt f=rnznce
Octotrer W lQQO13
LQNG TERM MARKET RATES
Quarterly
Averages
~0
16
16
15
15
New Aa Corporates
I
14
~0 ~~
~
~
~
13
14
P%
~
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13
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v
30-Year
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1980
1981
Det ~r trnr nl ol tfte Trsssury
Otltee of Mart et Ftharroe
1982
1983
1984
1985
1986
1987
'J
l LJ,1989
1988
1990
Or:trrber Xl. f990.23
INTERMEDIATE AND LONG TERM TREASURY RATES
Weekly Averages
'/o
'/o
9.25
9.25
9.00
9.00
I
\
8.75
Treasury 10-Year
/
/
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October 26
1A~
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Jan
of Ihr
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
8.00
7.75
.
Tii iaury
Ottrce ot Market r in. rni e
October 30
1
iytrfi
14
MARKET YIELDS QN GOVERNMENTS
Bid Yields
0
/o
October 29, 1990
8.5
~IIgIIM
8.3
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7.9—
7.7
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July 30, 1990
~gga~
8.7
8.5
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mmmmmmmam~~~~~
12
14
16
6
5
4
Years to Maturity
18
20
22
24
26
28
8.5
30
7.7
7.5
7.3
10
PRIVATE HOLDINGS OF TREASURY
MARKETABLE DEBT BY MATURITY
$Bil.
September 30, 1990 1841.9
~
~
~
COUPONS
Over 10 years
2-10 years
P//Q 1-2 years
1 year & under
BILLS
1800
1600
1400
317.9
629.9
1200
1000
t
800
267.8
600
255.7
400
370.6
200
0
1979
ttetn«trnent
1980
nl tne Treesury
Otltce ol MJrket
F Ill tttn l
1981
1982
1986
1985
1984
As of December 31
1983
1987
1988
1989
Ot:rober
%. 19'&
t t
PRIVATE HOLDINGS OF TREASURY MARKETABLE DEBT
Percent Distribution
Coupons
Over
Q
100%
10 years
2-10 years
by Maturity
Q 1-2 years
Q1 year & under
Bills
~
90
80
70
34
60
50
15
40
30
14
20
20
10
1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Sep'90
As of December
Deparlmenr
or the Treasury
Olhce ol Marrrel Finance
31
AVERAGE LENGTH OF THE MARKETABLE DEBT
Privately
Held
Years
~June
10
1947
10 Years
5 Months
September 30, 1990
6 Years, 1 Month
74
73
72
71
7O
L
J
I
F
M
A
M
J J
A
S
0
N
D
December 1975
2 Years
5 Months
2
1945 47 49 51 53 55 57
Detyarlment ot the Treasury
Oltice ol Market Finance
JJ
59 61 63
LJ
65 67 69 71 73 75 77 79 81 83 85 87 89
MATURING
November
COUPON ISSUES
1990—
March 1991
(In millions
of dollars)
September 30, 1990
Held by
Coupons
Maturing
Total
Federa
&
I Reserve
Government
Accounts
13'/o
9
5/8'/o
8o/o
8 7/8'/o
6 5/8'/o
9
1/8'/o
11 3/4'/o
9'/o
9 1/8'/o
7
3/8o/o
9
3/8'/o
6
3/4o/o
9
3/4'/o
11/15/90
11/15/90
11/15/90
11/30/90
12/31/90
12/31/90
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
1/15/91
1/31/91
2/15/91
2/15/91
2/28/91
3/31/91
3/31/91
Totals
j1
-
B
- M
-
V
-
AH
R
-
-
AJ
D
V
- H
-
R
-
W
- M
-
X
13,407
10,605
8, 393
11,007
5, 512
11,191
7, 687
11,592
11,062
8, 555
12, 147
786
249
2, 385
495
168
1, 100
397
804
461
1,483
1,000
376
1, 500
124, 702
11,204
5, 701
7, 843
F.R. B. custody accounts for foreign official institutions,
Foreign
Investors&
Private
Investors
4, 915
7, 594
498
1,474
1, 717
11,022
10, 110
710
871
8, 225
9, 907
1,018
7, 226
10, 109
10,062
8, 179
10,647
498
955
493
1,383
854
803
2, 365
113,498
13,639
5, 115
10,387
included
in Private
Invr
stor~
0 psrhment Ol the Treasury
Oftrce ol Marker Finance
Ocrooer
+
looo
7
TREASURY MARKETABLE MATURITIES
Privately
l
22
$ Br
20
16
16
14
12
10
8
6
4
2
0
28
28
1p 4
178
10
8
8
4
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30
28
28
1p 2
205
I
18
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18
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1993
20 3
123
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19.3
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173
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issued prior to 1988 E3New issues calendar year 1989
New issues calendar year 1988 ~Issued or announced through October 26, 1990
insecurities
('&aturr Imanl Ol the Treasury
Oltrrr ol Market Finance
October
ttr
too0 8
TREASURY MARKETABLE MATURITIES
Privately
Held, Excluding
Bills
6BII
16
1.3
2001
1.7
6
26
32
2.9
4
2
2003
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2006
2007
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10.3
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19.8
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year 1989
through
October 26, 1990
N
D
Gu
apartment
of the 7reasury
FOR IMMEDIATE
~
i
Washinaten. O.C.
RELEASE
CONTACT:
~
Telephone 566-2041
CHERYL
ovemoer
UNITED STATES AND BRAZIL TO DISCUSS
NEW INCOME TAX TREATY
CR
IS PEN
A
The Treasury Department announced today that representatives
of the United States and Brazil will meet in Washington, November
13-16, to discuss a possible bilateral income tax treaty. There
is no income tax treaty now in effect between the two countries.
negotiations
will take into account the model income tax
treaties published by the Organization for Economic Cooperation
the United Nations, and the U. S. Treasury
and Development,
Department, as well as tax treaties recently concluded by the two
countries with other countries, and recent changes in their
respective income tax laws.
The
tax treaties provide rules for the taxation of income
in one of the countries (the "source" country) by
residents of the other. They establish when the source country
classes of income and specify maximum rates of
may tax various
tax at source on certain items, such as dividends, interest and
royalties. They also provide for administrative cooperation
of the two countries and guarantee
between the tax authorities
taxation. Treaty benefits are limited to
non-discriminatory
residents of the two countries.
Income
derived
to offer comments or suggestions on the
are invited to write to philip D. Morrison,
Persons wishing
negotiations
International
Tax Counsel,
Treasury
20220
o 0 o
NB
1016
Department,
Washington,
DC
Z
+c'
~Rl
s1
0
C
OVERSIGHT BOARD,
1777
FOR IMMEDIATE
Contact:
RELEASE
1, 1990
November
OB
F
Resolution Trust Corporation
STREET, N. W. WASHINGTON,
90-64
D. C.
20232
Art Siddon
Felisa Neuringer
(202) 786-9672
OVERSIGHT BOARD APPROVES WORKING CAPITAL PLAN FOR
RTC TO PROCEED TEMPORARILY WITH SRL CLEANUP
Board took action today that will allow the
Trust Corporation (RTC) to continue to borrow working
capital from the Federal Financing Bank (FFB) to resolve failed
savings and loans, thus temporarily avoiding a virtual shutdown
of case resolutions threatened when Congress adjourned on Oct. 28
without authorizing additional funds for the cleanup.
The Oversight
Resolution
"The Oversight Board's action today is intended to keep the
on track until Congress can authorize additional
thrift cleanup
funding, " said Peter H. Monroe, president of the Oversight Board.
"However, Congress' failure to provide the RTC with the
needs already has caused taxpayers present
funds
"The RTC
value losses of $250 to $300 million, " Monroe added.
what
would
have
March
end
of
until
the
cannot now accomplish
done by the end of December had Congress provided the necessary
additional
it
it
money.
"
According to the RTC, if the Oversight Board had awaited a
Congressional fix of the note cap in March -- rather than acting
So
today -- the losses could have been $600 to $700 million.
save
the
American
Board
Oversight
may
today's action by the
taxpayer $350 io $4 vu zillion.
to follow strictly the note cap
Institutions
Reform, Recovery and
provisions of the Financial
Enforcement Act of 1989 (FIRREA). This will allow the RTC to make
use of the entire $50 billion already approved by Congress to
close or sell the failed savings and loans. It also will allow
the RTC to continue borrowing funds from the FFB for working
The Oversight
capital.
Board voted
-more-
This will allow the RTC to complete 18 major resolutions
otherwise have been postponed.
that
would
date, Congress has authorized $50 billion for loss funds
of $18.8 billion provided through Treasury, $1.2
contributed
billion
by the Federal Home Loan Banks, and $30
billion to be raised through bonds issued by the Resolution
Funding Corporation (REFCORP), of which $7 billion has not yet
As of the end of September, the RTC had borrowed
been auctioned.
about $46 billion for working capital -- funds to be repaid to
To
comprised
the Federal Financing
The Oversight
Bank as the RTC
sells its assets.
Board, established by FIRREA, formulates the
the funding, and provides the general oversight
policy, approves
for the RTC, the agency responsible
failed thrifts.
for resolving the nation's
Iportmeni of ihe Tl'eesury
FOR IMMEDIATE
November
~
Noshlnyion,
Contact:
RELEASE
2, 1990
HIGHER-INCOME
TAXPAYERS
O. C. o Telephone
PAY LARGER
SHARE
SII-2041
Crispen
(202) 566-5252
Cheryl
OF INCOME
TAXES
Final data from 1988 individual income tax returns show that
of federal income taxes paid by higher income taxpayers
has increased since 1981, while the share paid by lower-income
taxpayers has decreased, the Treasury Department said.
Percentiles drawn from Internal Revenue Statistics of Income
data show that the share paid by the lower 95 percent of all
taxpayers fell from 64. 6 percent in 1981 to 54. 4 percent in 1988,
while the share paid by the top 5 percent increased from 35. 4
percent in 1981 to 45. 6 percent in 1988. Note that these and
other statistics given below reflect the results of the law in
effect in past years, and do not incorporate the effects of
the
1990
Budget
in
provisions
income
tax
individual
1991.
in
Reconciliation, which take effect
the share
percentile breakdowns show:
income taxes paid by
The share of federal individual
in
was 27. 6 percent
of
taxpayers
percent
1
the top
1988--54 percent larger than the 17. 9 percent share
paid in 1981. The 1988 share is even larger than
the 25. 7 percent share in 1986, even though the 1986
data reflect the large capital gains realizations
increase in capital gains tax
stimulated
by the
rates in 1987.
The share
paid by those in the 96th percentile
through 99th percentile rose to 18. 0 percent in 1988
from 17. 5 percent in 1981.
The
share paid by those in the 51st to 95th
percentiles declined to 48. 7 percent in 1988 from
57. 2 percent in 1981.
Further
share paid by the lowest 50 percent of taxpayers
than the
5. 7 percent in 1988--23 pe~cent less lower
than
and
also
1981
in
7. 4 percent share paid
1987.
in
the 6. 1 percent share paid
The
was
NB-1017
Increases in the share of taxes paid by higher-income
taxpayers also are reflected in data by income category:
with modified
adjusted gross
In 1988, taxpayers
of $100, 000 or more paid $149. 0
incomes
(AGI j
billion in federal individual incomes taxes, or 36. 1
This was a large
percent of all taxes paid.
increase over 1987 and an even larger increase over
the 25. 7 percent share and $83. 7 billion paid in
1985.
Taxpayers with AGIs between $50, 000 and $100, 000 in
1988 paid $107. 7 billion, a 26. 1 percent share, up
from $80. 0 billion and a 24. 6 percent share in 1985.
Compared
increased,
to
1987,
but their
this group's
share declined.
tax
payments
with AGIs under $50, 000 received a net tax
cut of $5. 8 billion between 1985 and 1988, as their
total taxes paid fell from $162. 0 billion to $156. 2
billion and their share fell from' 49. 7 percent to
Taxpayers
to 1987, this group's tax
37. 8 percent.
Compared
increased but their share declined by 8
percent.
The
Tax Reform
altered the
Act of 1986 significantly
definition of adjusted gross income for 1987 and later years.
For comparability,
the IRS applied a modified adjusted gross
income to tax years 1985 through 1988. Modified adjusted gross
income was not used when compiling data for earlier years since
payments
compilation and
and the modified
publication
had been
concept became
completed
reality.
before tax reform
Data by income category
in part reflect the effects of
inflation and productivity growth pushing taxpayers into higher
income categories.
The percentile data correct for inflation and
productivity, and therefore are more meaningful.
The attached
table provides data by percentiles and income
categories. More comprehensive data appear in the Statistics of
Income Bulletin published by the Internal Revenue Service.
¹ ¹
CHANGES
IN THE DISTRIBUTION OF
FEDERAL INDIVIDUAL
I.
INCOME
Shares of Tax Pa
1981-1988
TAX PAYMENTS,
ents b
Percentile
1981
1985
1986
1987
Lowest 50%
7. 4%
7. 1%
6. 5%
6. 1%
Percentiles
Percentage
in
Shares, 1981-88
Change
1988
5. 7%
-23%
51-95'%
57. 2
53. 6
51.0
50. 7
48. 7
-15
96-99%
17.5
17.0
16.8
18.4
18.0
+ 3
1'%
17.9
22. 3
25. 7
24. 8
27. 6
+54
Top
II.
1985
Modified
Adjusted
Gross
Income
Shares of Tax Pa
Taxes
Paid
1
ents
Income Cate or
1986
1987
Taxes
Share
Paid"
Taxes
Paid
Share
1988
Share
Taxes
Paid
Share
Under
$50, 000$100, 000
Ove
r
$100, 000
Department
49. 7%
$162. 0
$50, 000
o
$160.8
43. 8%
$151.8
41. 1% $156.2
37. 8%
80. 0
24. 6
89. 6
24. 4
99.9
27. 1
107.7
26. 1
83.7
25. 7
116.9
31.8
117.5
31.8
149.0
36. 1
e Treasury
Nove
r
Office of Tax Analysis
altered the definition of Adjusted Gross
The Tax Reform Act of 1986 significantly
For comparability across years, AGI was
Income (AGI) for 1987 and subsequent years.
~odified in all four years to reflect the same concept of income.
2/
Dollar amounts
Source:
Internal
in
billions.
Revenue
Service, Statistics of
Income
Divisi n.
'W
ipe~ent ot the
TreoeelV ~ Wnelgygul&06.
For Immediate
Novembe
Release
r
iver
r 5, 19 9 0
~ Pi g- '
C~
1 Telephone $$$-2oel
3'%~
FK
'Contact:
Chervl Crisven
~'
(202J 566 5252
THE UNITED STATES AND THE REPUBLIC OF VENEZUELA
SIGN
AN
AGREEMENT
TO COMBAT MONEY LAUNDERING
of the United States and the Republic of
Venezuela today joined forces to fight illicit drug trafficking
and money laundering
by signing an agreement to exchange
financial information.
The agreement, signed by U. S. Treasury
Secretary Nicholas F. Brady, Venezuelan Finance Minister Roberto
The Governments
Pocaterra and Venezuelan Central Bank President Pedro R. Tinoco
provides a mechanism for exchanging currency transaction
information recorded by financial institutions in each country
for use in proceedings relating to the enforcement of laws
applicable to the matters indicated.
Jr. ,
this agreement, Secretary Brady said, "We take
significant step in the effort to track illegal profits
around the world and put criminals behind bars.
By developing
network of countries committed to identifying the profits of
narcotics trafficking, we can begin to deprive traffickers of
their financial lifeline and dismantle their criminal
"
In signing
another
a
organizations.
Tinoco said, "By signing
this Agreement the Venezuelan Government has taken one more step
signifying its firm commitment to fight the drug problem in
all its forms. In this instance, the establishment of a
mechanism to facilitate the exchange of financial information
with the United States of America strengthens our other domestic
initiatives aimed at combatting illicit"
and international
activities involving drugs and psychotropic substances.
Minister
Pocaterra
The agreement
and
President
is effective
on January
0 0 0
NB-1 01S
1, 1991.
~I+~
~
+olhlnIton,
D.C. ~ Telephone See-2Oes
oi the Honorable
Robert R. Glauber
Under Secretary oi the Treasury for Finance
before the
57th Annual Convention, Security Traders Association
Remarks
"The Treasury's
Once and Future
November
Initiatives"
5, 1990
Ladies and Gentlemen:
I
am delighted
to be here this morning, on the occasion of
57th
annual convention, to discuss two important financial
your
safety and soundness matters, vhich were not satisfactorily
addressed by Congress before it ad)ourned, due in part to
These issues are volatility
lobbying by special interest groups.
in financial markets and the oversight of government sponsored
enterprises (CSKs). The refusal of Congress to act conclusively
in each case continues to expose the financial system to the
potential
of serious breakdown.
you knov, last spring the Administration
submitted to Congress a proposal to clarify the jurisdictions
the Commodity Futures Trading Commission (CFTC) and the
Securities and Exchange Commission (SEC) over stock index
As many
of
of
futures. Me attempted to resolve the regulatory fragmentation
that ve believe has been at the heart of the markets' instability
since stock index futures first vere introduced in 1982. Equally
important, our proposal was intended to create a market
environment that rekindles the interest of the individual
'.".ves
or.
the 101s Concrress has now ad o ned wit~ait
Unfcrtunately,
passing either our proposai or a more limited compromise version
that seemed to be gaining momentum at the end of the session.
including various agricultural groups that
The futures industry,
vere completely unaffected by our bill, managed to delay floor
consideration until the bill was overcome by more pressing items
agenda.
on the Congressional
volatility vill
The destabilicing effects of extraordinary
"one
market& of
persist until Congress comes to grips with the
was the
That
index
futures.
stock
stocks, stock options, and
on
Force
Market
conclusion in 1988 of the Task
fundamental
Mechanisms, chaired by Secretary brady, and it remains )ust as
valid today. Recognition of the "one market" reality inherently
The
demands setting in place the requisite regulatory changes.
current regulatory fragmentation is the fundamental impediment to
reducing
the likelihood
and dangerous consequences of major
disruptions.
Congress is taking a very big risk in
perpetuating the
gg.
As much as ve all would like to believe the 508 point drop
on Slack Monday in 1987 and the 191 point drop in October last
year vere aberrations not likely to be repeated, common sense
suggests otherwise.
Certainly there have been some significant
regulatory improvements.
But the fundamental conditions that the
Brady Task Force identified as giving rise to market
instability -- unharmonised margins, disjointed clearance and
settlement systems, and uncoordinated circuit breakers -- are
either unchanged or at best partially improved. The Task Force
concluded that these conditions brought the system to the brink
of collapse in October 1987. That the system stopped short of
market
j~~
complete meltdovn
considered
may
failsaie.
be reassuring,
but
it
should
not be
fails to enact our proposal, regulators
lack the tools necessary to contain the potential fallout of
another destabiliaing shock to the system. That spells
continuing trouble and uncertainty, not only for traders and
investors, but fox' our financial markets and capital formation
process. A financial breakdovn is a risk ve simply cannot afford
Every day Congress
to take.
Let me therefore briefly explain vhat I mean by
"extraordinary volatility" and vhy ve believe regulatory
fragmentation is the underlying problem that needs to be
addressed.
In the past, large market moves vere relatively infrequent
assoc'ates wit% news e'ents ha- clearly affec. ed fundaren=a'
values. For example, in the 42 years between 1940 and 1982. t?:e
ieger stcck index futures began trading, the Dov Jones Industria'
Average declined by more than 6 percent on only three occasions:
in Nay of 1940 (6. 8
shen the Germans took the Netherlands
percent): shen they encircled the Allied forces at Dunkirk just
days later (6. 8 percent) t and vhen President Eisenhover suffered
a heart attack in September of 1955 (6. 5 percent) .
Sy contrast, such massive one&ay selloffs have occurred
and
four times in the
last three years:
October 19, 1987
October 26, 1987
I, 19$$
January
October 13, 1989
-- 22. 6
-- 0. 0
- 6. 9
-- 6. 9
percent
percent
percent
percent
In each of these episodes, minor, even untraceable events appear
have triggered precipitous, violent market declines.
They all
shared the characteristic of enormous selling pressure from the
stock index futures market floving over to the stock market. And
each episode constituted a
a period
vhere the markets for stocks and stock index futures disconnect,
vith prices spiralling dovn.
to
~
use tho term "major market disruption, " I am
talking about increased volatility ggz~. Critics have charged
that there is no compelling evidence of increased stock market
volatility or average price svings, and they may be right. But
the focus on Zgyagg volatility is a red herring.
Our concern is
When
I
volatility, violent market ireeialls vhen the
pricing relationship betveen stocks and futures break dovnr
markets in particular stocks experience difficulties in staying
opent serious supply-demand
imbalances develops and very large
market moves accur in the absence of underlying fundamental
information.
The single most important step Congress can take ta reduce
both the likelihood of major market disruptions and tho severity
af their consequences is to unify rogulatian for the "one
market. " A single regulator vould be able to coordinate tho key
intenaarkot mechanisms, such as unharmoniaod margins, disjointed
clearance and settlemont systems, and uncoordinated circuitbroakers, that disconnect to create or exacerbate major market
disruptions.
margins
Let
me
explain vhy the problem of unharmonizod
is sa crucial.
Federal oversight of margins exists
for stocks, but is basically non-existent for stock index
futures, resulting in a tremendous disparity in margin levels,
vith futures margins often dipping to dangerously lov levels. As
a result, futures traders have the paver to concentrate enormous
-- groat enough to cause a
selling pressure on the stock market
"~~
-".
ard in " =he" 1~s~ » ~-'.
"is :v~'en t a .
r. aj"r
.a". ke
=~~z a i-. via xa =.".a -acr'- u- -:.e financxai system.
futures margins create a direct prudential risk not merely to the
futures markets, but to the financial system as a vhale.
Hovevor, since these margins aro sot by the futures industry,
With no day-ta-day rogulatary oversight, there is na vay ta
harmoniae margins botveen futures and stocks to protect the
public. The exposure of the entire financial system to risk
for stock index
aandates federal oversight of margin-setting
futures by a common rogulatar that can ensure harmonized margins
The Federal Reserve Board agrees that
among linked markets.
there is a need for federal oversight af margins on stock index
futures to limit systemic risk. In fact, every athor cauntry
vith important trading in those instruments -- the Vnitod
Kingdom, Japan, and trance -- has a single regulator vith
responsibility for overseeing margin levels on stocks, stock
~
options,
and
stock index futures.
fragmentation is also creating a serious
This vas not alvays true. In tho
past, competition betveen Chicago and Nev York markets spurred
nev product development,
vhile the practices of different
regulators often promoted diversity, experimentation,
and
Regulatory
impediment
to innovation.
creativity.
But regulatory competition can also cause jurisdictional
squabbles, vhich can strangle innovation.
This is precisely vhat
happened to Index Participation Certificates (IPs). One court
has interpreted the "exclusivity clause" of the Commodity
Exchange Act to require that any non-exempt financial instrument
vith any degree of "futurity" must be traded on a futures
exchange and novhere else. But certain of the nov "hybrid"
products are not amenable to trading in this wanner.
The result
has been protracted litigation over vhat constitutes a "future"i
an inability to trade in the U. S. markets most suited to the
products and the shifting of business to more hospitable markets
overseas. An IPs-like product, for example, now trades in
Toronto rather than the United States.
last spring
First, it
To remedy these problems, the Administration
a bill containing three key provisions.
proposed
the authority to regulate stock index futures from the
to market participants,
CFTC to the SEC. To minimice disruptions
the SEC vould operate under the basic framevork of the Commodity
Exchange Act, augmented vith key enforcement and antifraud
provisions from the securities lavs.
transfers
on the moro
concentrate its expertise
. e es
~
s ..a
. . ~
ra aa
Indeed, our proposal
one been the core of its jurisdiction.
vould have minimal effect on the CFTC because stock index futures
represent only 10 percent of the futures volume under CtTC
IJ
~
The CFTC could
ac ~- .
~
&
+
.
~ ~
~
„.
'la
~
)urisdiction.
bill gives the SEC oversight authority for
The exchanges vould still have
margins on stock ibex futures.
the flexibility to initiate margin changes and minimum margin
levels vould be left to regulatory discretion. This is similar
Second, the
to the SEC's current
margin
authority
over stock options.
Third, the bill modifies the "exclusivity clause" to "end
legal disputes over vhat constitutes a "futures contract.
Hybrid equity securities like IPs could trade in both the futuree
markets (under the framevork of the Commodity Exchange Act) and
the securities markets (under the securities laws). The cpTc
could exempt other financial instruments under certain
conditions.
In response to our bill, a compromise approach between
of the Senate Agriculture Committee and members of the
Senate Banking Committee gained momentum in recent months.
Although not as comprehensive as our proposal, it vould have been
a big step forward.
members
The compromise would have authorised the Federal Reserve,
rather than the SEC, to regulate margins on stock index futures,
but tho Soard could immediately allov tho futures exchanges to
set margins, subject to Board approval, and then, after 2 1/2
years, allow such margins to be subject to CFTC approval.
1t all
times the Board would retain overall responsibility for marginsetting. Secause the Fed already has final authority for margins
on stocks and stock options, intermarket margin requirements
vould have been addressed in a consistent manner.
The compromise
would
also have modified the
CFTC' ~
exclusive
jurisdiction over futures products to allow hybrid securities
products such as IPs to trade either under the futures or the
securities regulatory system. It vould have granted the CFZC
exemptive authority to allov certain new products to trade
outside the futures regulatory system, and directed tho CFTC to
use that pover with respect to swap agreements and certain bank
certificates of deposit. Finally, it would have directed the szc
and CFTC, in consultation with the Treasury and Federal Reserve,
to develop solutions to such intoraarket issues as circuit
breakers, clearance and settlement systems, cross margining, and
intermarket fraud. Sut as I indicated, these efforts came to
nought.
8"
.
wt.
e"e does
a
l his
leave us?
~e have succeeded
in
..e way or serious ccnsidera. ion of t."8Be ssuec earl(
paving
next year. We must act promptly to complete our vork in
clarifying the jurisdictions of the CFTC and SEC, because sooner
or later events vill force Congress to move forvard. 1s the
and Finance Subcommittee of
chairman of the Telecommunications
the House of Representatives'
Energy and Commerce Committee has
to the correctness of the
"There
inevitability
an
is
put it,
"
tho
interest
of stability and
In
Srady recommendations.
competitiveness of U. l. financial markets, Congress must roso]ve
this matter next year.
The second topic
morning is our proposal
I
vould like to discuss briefly this
to enhance the financial safety and
of CSEs, such as Fannie Mao and Freddie Mac. Last
the Treasury Department issued a report to Congress,
mandated by the thrift legislatian
(FIRRRA), in vhich ve
recommended a number of refarms ta reduce CSEs' financial risk to
the Government and taxpayers.
soundness
spring,
Chief among these rocommendatians vas that all CSEs be
required to obtain a triple-A rating, absent any implicit
Government guarantee,
from at least tvo af the nationally
recognized rating agencies. A GSE receiving a lover rating vould
have to submit an acceptable business plan ta achieve the tripleA rating vithin
five years or lose its ties to the Federal
Cavornment.
The budget accord passed by Congress includes
certain action-forcing language, under vhich Congressional
cammitteee of )urisdictian over CSXs are expected to produce
legislatian by September 15, 1991 "ta ensure the financial
soundness of CSEs and to minimiao the possibility that a QSE
might require future assistance from the Government. "
~
as a group had, as af June 1990, borrovod or
guaranteed $917 billion.
The market viovs these securities as
being implicitly guaranteed by the U. S. Government and they
therefore trade at better than triplo-A rates. Yot several af
the CSEs, including tho largest, have anything but a triple-A
rating. Take for example Fannie Mao, the largest of the CSEs,
vhich incidentally
(but not surprisingly)
strongly opposed aur
M'
t
i
~
~
i
PW
on- and off-balance shoot assets. Many people have suggested
that Fannie Nae looks very much like a savings and lean because
it holds ar guarantees mortgagos. Nell, if Fannie Mao vore an
SSL, the Office of Thrift Supervision vould likely already have
it an a short leash and vould have required it to file a husinaaa
plan setting out a timetable far reaching a fu11 lovel af
The QSEs
i.
eiiyyitli
capital.
Fa.",;.'e Naa, 'n statement s this year, acne in response to c ".
study, has admitted that it needs to raise more capital and has
committed itself to da so. Sut its recent decision to authorize
i ii
ih
i PP \ t iY i ~ DD
4 iiY
UgiillUII
and equity varrants makes this commitmont to build capital appear
quite cynical. Repurchasing stock is nat the vay to build
capital. It is not the vay to increase the safety and soundnoss
iii4
of
an undorcapitalisod
financial
institution.
that hemoavners, the intended
to this GSE, vill suffer if it
is required to raise enough capital to obtain triple A status
It is not at all clear that
absent tho Government's guarantee
any graup vould be hurt by upgrading Fannie Nao's financial
Iorreving costs should not increase, so it is hard to
condition.
If there is any group vhich
~ ee hov homoovners vi11 bo hurt.
vhoso equity position
tho
shareholders,
miaht autiar. it cauld bo
Fannie Nae has also suggested
beneficiaries af Congress' mandate
experience some dilution.
Sut dilution would hardly leave
the shareholders in great distress. Return on equity has been in
the 30-354 range recently. And prior to the stock market decline
which began about mid-year, the return for a shareholder averaged
over 100\ per year during the last five years. Some reduction in
rate of return mould leave tannic Mae still a most attractive
investment.
would
of the CSEa ie in precarious financial condition
a
prolonged slevdom in the economy, and particularly
today,
veakness in the housing market, could pose serious dangers for
one or more GSEs. The thrift industry catastrophe has placed on
the Government's shoulders the responsibility to make certain
that taxpayers are not called on to rescue another industry.
While none
Asking the GSEs
in the current
to
improve
their financial condition,
economic environment,
is
especially
not asking too much.
me simply stress that these tvo safety
let
—
volatility in the financial markets and
-vill not go avay. Me vill put them before
oversight of CSEa
Congress again next year. Re hope Congress vill not again put
oii action.
Zn
conclusion,
issues
and soundness
8
UBLI
Department
of the Treasury
FOR IMMEDIATE
~
Bureau of the
ural
Q~
RESULTS OF TREASURY'S AUCTION
Tenders
on November
/ JlQshinyon.
&Eii. r--r tH& -CONTACT:
RELEASE
5, 1990
November
E
I
DC 20239
Office of Financing
202-376-4350
OF 13-WEEK
BILLS
for $9, 839 million of 13-week bills to be issued
8, 1990 and mature on February 7, 1991 were
accepted today (CUSIP: 912794VU5).
RANGE
OF ACCEPTED
COMPETITIVE
BIDS:
Discount
Rate
Low
High
Average
7. 05%
7. 07%
7. 07%
Investment
Rate
7. 28%
7. 30%
7. 30%
Price
98. 218
98. 213
98. 213
Tenders at the high discount rate were allotted 79%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
AND
ACCEPTED
Received
47, 025
32, 307, 520
(in thousands)
28. 845
53, 655
113, 105
47, 025
7, 966, 460
28, 845
53, 655
62, 055
10, 735
39, 460
28, 165
890, 260
798 910
$36, 439, 540
426, 000
798 910
$9, 839, 350
$31, 857, 095
$5, 256, 905
$33. 601, 390
$7, 001, 200
2, 339, 015
2, 339, 015
34, 280
2, 055, 240
32, 340
1 744 295
499 135
$36, 439, 540
31, 060
330, 690
16, 290
10, 735
39, 460
28, 165
1 744 295
499 135
$9, 839, 350
.
additional $128, 165 thousand of bills ill be
issued to foreign official institutions for new cash.
An
NB-1020
~+Ltd
Q
'
l'Util I
Department
f
of the Treasury
FOR IMMEDIATE
~
A~«ah
RELEASE
,
5, 1990
November
0'f't
e
lit
«5t
.
Tenders
ll'ashinyon,
=..--, ;, -"-;,, =~!e;.-, CONTACT:
RESULTS OF TREASURY'S AUCTION
on November
~
DC
2(&2'&9
Office of Financing
202-376-4350
OF 26-WEEK
BILLS
for $9, 818 million of 26-week bills to be issued
8, 1990 and mature on May 9, 1991 were
accepted today (CUSIP: 912794WH3).
OF ACCEPTED
RANGE
COMPETITIVE
BIDS:
Discount
Rate
Low
High
Average
7. 04%
7. 06%
7. 05%
Investment
Rate
7. 40%
7. 42%
7. 41%
Price
96. 441
96. 431
96. 436
Tenders at the high discount rate were allotted 15%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
Boston
New
York
Received
39, 630
27, 646, 655
(in thousands)
39, 600
8, 250, 370
17, 230
Chicago
St. Louis
Minneapolis
Kansas City
17, 230
43, 860
53, 085
32, 760
2, 393, 370
25, 150
10, 620
45, 450
TOTALS
633 355
$31, 672, 840
633 355
$9, 817, 975
$27, 197, 345
$5, 342, 480
$28, 504, 575
$6, 649, 710
2, 450, 000
2, 450, 000
718 265
$31, 672, 840
718 265
$9, 817, 975
Philadelphia
Cleveland
Richmond
Atlanta
Dallas
San Francisco
Treasury
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
19, 065
712, 610
1 307 230
43, 860
53, 085
30, 910
545, 870
19, 450
10, 620
45, 450
19, 065
109, 110
1 307 230
additional $184, 435 thousand of bills will be
issued to foreign official institutions for new cash.
An
NB-1021
r uek. ic
Department
of the Treasuri
FOR IMMEDIATE
November
T E
D
I
~
Bureau of the
RELEASE
6, 1990
I
ub tc
f
~~ T. ". ' Tf-'
ebt
Tenders
were accepted
'ashington,
;CQHTACT:
RESULTS OF TREASURY'S AUCTION
to be issued
~
DC 20239
Office of Financing
202-376-4350
OF 3-YEAR NOTES
for $12, 602 million of 3-year notes, Series V-1993,
on November 15, 1990 and mature on November 15, 1993
today
(CUSIP: 912827ZM7).
interest rate on the notes will be 7 3/4%. The range
of accepted bids and corresponding prices are as follows:
The
Yield
Low
High
Average
Tenders
7. 784
7. 79%
7. 78%
at the high yield
were
99. 921
allotted 13%.
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Received
41, 110
43, 994, 950
29, 665
49, 945
108, 865
37, 605
1, 722, 580
62, 870
28, 695
66, 990
18, 025
701, 240
98 135
$46, 960, 675
Price
99. 921
99. 895
(in thousands)
Acce ted
41, 110
11, 880, 790
29, 640
49, 945
55, 060
34, 690
204, 870
44, 860
28, 195
64, 965
18, 025
51, 250
98 110
$12, 601, 510
The $12, 602 million of accepted tenders includes
million of noncompetitive tenders and $11, 571 million
competitive tenders from the public.
$1, Q31
of
In addition, $1, 705 million of tenders was awarded at the
average price to Federal Reserve Banks as agents for foreign and
An additional
$2, 82Q million
international monetary authorities.
the
average
at
from
price
Federal
accepted
also
was
tenders
of
account
in
for
exchange
own
maturing
Reserve Banks for their
securities.
NB-1022
I
iartmeni of the Treasury
November
~
1vi
Washington,
6i 1990
O.
o
Telephone $66-2044
Contact: Barbara
CLay
202/566-2041
The Committee
on Foreign
Investment
in the United States
("CFIUS"), chaired by the Secretary of the Treasury, will
continue to receive voluntary notices of mergers, acquisitions,
and takeovers of U. S. businesses by foreign persons.
This CFIUS
function will continue despite the recent lapse of certain
sections of the Defense Production Act, including Section 721,
known as the Exon-Florio provision.
Persons wishing to file notices with CFIUS should continue to be
guided by the proposed regulations published in the Federal
Register of July 14, 1989 (54 Fed. Reg. 29744). CFIUS will
adhere to the timetable established in the Exon-Florio provision
and will advise filers of its findings.
The Exon-Florio provision, which was added to the DPA by the
Omnibus Trade and Competitiveness
Act of 1988, authorized the
President or the President's designee to receive notices of
proposed transactions by foreign persons that could result in
control of U. S. firms, and to undertake investigations of the
effects of these transactions on national security. Under this
provision, the President was authorized to take action to
prohibit or suspend transactions if he found that:
There is credible evidence to believe that the foreign
investor might take action that threatens to impair the national
security;
and
Existing laws, other than the International Emergency
Economic Powers Act and the Exon-Florio provision, do not provide
adequate
security.
and
appropriate
authority
to protect the national
created by Executive Order 11858 of May 7, 1975, which,
among other things, gave CFIUS broad power to review foreign
investment in the United States. The members of CFIUS are the
Secretaries of Treasury, State, Defense, and Commerce, the
the Chairman of
Attorney General, the U. S. Trade Representative,
the
Director
and
of the Office
Advisers,
the Council of Economic
of Management and Budget.
CFIUS was
NB-1023
~~ A. s t 'p
S
A
Department
of the Treasury
~
Bureau of the PubfidDe4't
~
FOR RELEASE AT 3:OO PM
4'ovember 6, 1990
Sl'ashinyon.
DC 20239
8Ltc
Contact: Peter Hollenbach
(202) 376-4302
PUBLIC DEBT ANNOL'ACES ACTIVITY FOR
SECURITIES IN THE STRIPS PROGRAiWI FOR OCTOBER 1990
Treasury's Bureau of the Public Debt announced activity figures for the month of October 1990, of
securities within the Separate Trading of Registered Interest and Principal of Securities program.
(STRIPS).
Dollar Amounts
in
$451,060, S20
Principal Outstanding
(Eligible Securities)
Held in Unstripped
Form
$337, 776, 650
$113,2S4, 170
Held in Stripped Form
Reconstituted
in
Thousands
$4, 571,080
October
The accompanying table gives a breakdown of STRIPS activity by individual lo, in description.
The balances in this table are subject to audit and subsequent revision. These monthly 1'igures;ire
included in Table Vl of the Monthl Statement ot the Public Debt, entitled "Holdings of Treasury
Securities in Stripped Form. " These can also be obtained through a recorded message on
(202) 447-9873.
oOo
P.4-37
TABLE Vl
—HOLDINGS
OF TREASURY SECURITIES
IN
3t,
STRIPPED FORM, OCTOBER
27
$99Q
(In thoubancIB)
to/ttnt7 Dote
Pa/tran ltotd in
Unotnpped Form
55.Sb I .354
51,087~
)
I I.l/444 Note A. IQQS
. . . . . 2/15/95
d. 033.861
8.482.021
471.4io
I
t-l/444 Note
8.199$
. . . 5/I S/95
7.I 27.086
$.857,448
I &I/2%1 Hate
C. 1 995
N1S/95
7.955.901
7 293, 901
882. 000
310~
8.$04, 550
~ 1 b. 000
8.S75. 199
8.343. 109
20~.010
20. 023, 810
9.021.237
Q. 040.037
808~
Q. 792.329
I b. 000
Q, ISO. I$0
1.180
Nt 5/98
1.I 50.084
9.I 06~7
~ .I 35.387
30.000
N15/90
I 1.342.846
11,214, 84d
128%0
-0-
1.902.87S
0.800, 475
9.714,42$
3200
Q. I 70.303
088.000
-0-0-0-0-
I
I I/1N94
1994
I I-S/dol Nolo C
9.1/2ll
6 Tldel
Hole D 1995
HOto
A-1998
7~re
Hate
C. 1998
.
. 11/15/95
Vi Vre
..
5/15/97
I/241 Note A. IQQT
&7/doe
Note C.1907
Nato
0 I/44tr
1900
0 7/041 Nate D 1910
9,
. 2/15/00
8.1918
Nat ~ C
..
I/IS/97
I
d. t/Qel Halo A-1996
Qotr
. . . 11/15/90,
.
.
9.710.82$
0.047. 103
2/15/99
5/I 5/99
'I
~
b/t S/99
I O. 183.dii
10.041, 844
I O. 773.980
10.781 180
~ . 400
10.873.033
I Q. 073.033
-0-
IQQQ
S/99
7.7/bio Nato D 1999
I
6 I/2%
2/1 5/00
Nolo
0 7/dll Nolo
Mill
I
I
i 400
-0-
0.7/8% Note A 1090
1I/0% Nolo S.1 999
4% Hat ~ C
12.640
440
-0-0-
.N1 5/97
8 1097 . .
0-5IQll Hrno
~.
19 871.243
I I /1 S/98
T. I/44l Nolo D 1998
4
7,
1,
8.2000
.
I /I
. . . ViViV
i
I
0.498.23Q
485, 030
I0
I
l~
-0-0-
12% Bond 2005.
i.280. 756
103/4rer Bond 2005.
1.280. 713
I, 000, 454
3. 7M 208
I. 712.108
113
~
Mbll
4, 755.118
i.7$4.0'14
-0-
-0-
8.005.564
1.524, 784
i, 440, 0CO
14,000
I 2, 867, 799
1.000.231
1.111,558
to. bdb. S40
7. 141.118
I
Note
C.2000
200i
I-Ndttr Bond
II
8/1 5/00
Bond 2M8
I IQI441 Sohd 2008 14
11/15/ti.
2/IS/15
I t-t/444 bond 2015
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Tho Ioropnano
rirrrrraor
ii I2021 447M73
4
571,04Q
of the TreasurV
apartment
FOR RELEASE AT
~ Wcisninyton,
O.C. ~ Telephone S66-204t
CONTACT:
Office of Financing
4:00 P. M.
6, 1990
November
202/376-4350
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by
tenders for two series of Treasury bills
this public notice, invites
totaling approximately
$20, 000 million, to be issued November 15, 1990. This offering
will provide about $2, 250 million of new cash for the Treasury,
as the maturing bills are outstanding in the amount of $17, 740
million. Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington, D. C.
20239-1500, Tuesday, November 13, 1990, prior to 12:00 noon for
noncompetitive tenders and prior to 1:00 p. m. , Eastern Standard
The two series offered are as
time, for competitive tenders.
follows:
91-day bills (to maturity date) for approximately
$10, 000 million, representing an additional amount of bills
dated February 15, 1990, and to mature February 14, 1991 (CUSIP
in the amount of $18, 880
No. 912794 VV 3), currently outstanding
million, the additional and original bills to be freely
interchangeable.
182-day bills for approximately $10, 000 million, to be
dated November 15, 1990, and to mature May 16, 1991 (CUSIP No.
912794
WJ
.
bills will
9)
basis under competitive
amount will
bidding,
and noncompetitive
Both series of bills will be issued
be payable without interest.
a minimum amount of $10, 000 and in
in
form
book-entry
entirely in
the records either of the Federal
on
any higher $5, 000 multiple,
Reserve Banks and Branches, or of the Department of the Treasury.
The
on a discount
and at maturity
be issued
their par
for cash and in exchange for Treasury
Tenders from Federal Reserve
1990.
bills maturing November 15,
Banks for their own account and as agents for foreign and international monetary authorities will be accepted at the weighted
average bank discount rates of accepted competitive tenders.
Additional amounts of the bills may be issued to Federal Reset te
monetary au=horiBanks, as agents for foreign and international
. such
amount of tenders 'or
ties, to the extent that the aggregate
held
bills
maturing
amount
of
by
accounts exceeds the aggregate
—
l'
'd
-. s
.
;
ion
as
ho.
age.
$837
Federal Reserve Banks currently
them.
—
-.
y3~
an«
=, au . . ori=ies,
;,
for foreign and international . cne=".'e=s
:"r
lls
b
e.
.
account.
~illion for their o n
reco=='s of the Depart-. . ent of he "= ~s .-,— sno
on the book-entr,
be submitted on Form PD 5176-1 (for 13- eek series) or For.
PD 51 6-2 (for 26-;. eek series) .
The
bills will
be issued
..
.
.
NB-102'
SURY ' S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 2
Each tender must state the par amount of bills bid for,
which must be a minimum of $10, 000. Tenders over $10, 000 must
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
A single
two decimals, e. g. , 7. 15%. Fractions may not be used.
bidder, as defined in Treasury s single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
and dealers who make primary
Banking institutions
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers, if
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
position in the bills being offered
such position is in excess
of $200 million. This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction. Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
if
each customer whose net long position
exceeds $200 million.
in the
bill
being offered
A noncompetitive
bidder may not have entered into an
agreement, nor make an agreement to purchase or sell or otherwise dispose of any noncompetitive
awards of this issue being
auctioned prior to the designated closing time for receipt of
tenders.
Payment for the full par amount of the bills applied for
must accompany all tenders submitted for bills to be maintained
on the book-entry records of the Department of the Treasury.
A cash adjustment
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined
in the auction.
deposit need accompany tenders from incorporated banks
companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches.
No
and
8/89
trust
TREASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 3
Public announcement will be made by the Department of the
of the amount and yield range of accepted bids. Competitive bidders will be advised of the acceptance or rejection
of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g. , 99. 923, and the determinations
of the Secretary of the Treasury shall be final.
Treasury
Settlement
for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
on the issue date, in cash or other immediately-available
funds
or in Treasury bills maturing on that date. Cash adjustments
will be made for differences between the par value of the
maturing bills accepted in exchange and the issue price of the
new
bills.
bill is purchased at issue, and is held to maturity,
the amount of discount is reportable as ordinary income on the
Federal income tax return of the owner for the year in which
the bill matures.
Accrual-basis taxpayers, banks, and other
persons designated in section 1281 of the Internal Revenue Code
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
If' a
of the Treasury Circulars, Public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtained
from any Federal Reserve Bank or Branch, or from the Bureau of
the Public Debt.
Department
8/89
)ortment ot the
FOR IMMEDIATE
November
z&g~g~i. woehlnlton, o.c. ~
RELEASE
7, 1990
CONTACT:
TREASURY UPDATES ESTIMATES OF FINANCING
Telephone $06-204$
Crispen
202/566-5252
Cheryl
REQUIREMENTS
market borrowing estimates have been revised
1990 quarter.
Treasury
downward for the October-December
estimates that market borrowing will be $87-1/2 billion during
the October-December quarter, with a cash balance of $30 billion
on December 31. As of today, the Treasury has issued or
Treasury
announced
total.
The
a
total of $58-3/4 billion of the $87-1/2 billion
revised borrowing
estimate compares with the $97-3/4
billion net market borrowing estimate announced by the Treasury
in its regular mid-quarter refunding press conference on
October 31. The downard revision reflects a shift in the timing
of Resolution Trust Corporation expenditures.
The Treasury has not revised its October 31 estimate of net
1991 quarter.
market borrowing needs during the January-March
billion
cash balance
with
a
$20
The range of $47 to $52 billion,
on March 31, 1991, did not include any allowance for Resolution
Trust Corporation activities.
NB-1025
ortment of the TreesurF'
FOR IMMEDIATE
November
~
olaehln~n.
Contact:
RELEASE
7, 1990
MONEY
I.c. ~ Telephone
LAUNDERING
sss-20sl
Cheryl Crispen
(202) 566-5252
ASSET SHARING WITH THE UNITED KINGDOM
The Department of the Treasury announced today that the
United States is sharing $3 million from assets seized in a money
laundering case known as "Operation C-Chase" with the Government
of the United Kingdom. The case was jointly investigated by U. S.
Customs and H. M. Customs and Excise (British Customs) based upon
British participation
in the case.
Following a meeting of the G-7 Financial Action Task Force
in Paris, Deputy Secretary of the Treasury,
on Money Laundering
John E. Robson presented a check for $3 million to Sir Bryan
Unwin, Chairman of the Board, H. M. Customs and Excise.
In making the presentation, Deputy Secretary Robson
said, "Cooperation between U. S. Customs and British Customs
demonstrates the progress countries are making against
international drug trafficking and drug money laundering.
Just
as international money launderers know no national borders, law
enforcement authorities must cooperate to eliminate every barrier
to international law enforcement. "
Operation C-Chase was a major money laundering investigation
launched by U. S. Customs in Florida in 1986. Customs agents
posing as professional money launderers penetrated several major
Colombian money laundering groups.
Employees of the Bank of
("BCCI"
facilitated
Credit and Commerce International
) actively
this money laundering by assisting in concealing the true source
and ownership of the funds as they moved through international
banking channels.
On January
16, 1990, BCCI pleaded guilty to money laundering
and agreed to forfeit over $15 million of which $3 million went
to the U. K. In the Summer of 1990, five officials of BCCI were
convicted of money laundering in federal court in Tampa, Florida,
and two
officials
were convicted
in the United Kingdom.
British Customs coordinated approval for U. S. Customs
activities in the case in the U. K. , obtained and executed search
warrants of corporate headquarters of BCCI, and arrested one
other official who is awaiting extradition to the U. S.
oOo
TF
p4 fMoht
of Cho TtoosUFf
J
FOR IMMEDIATE
November
I
L)
~
I,
~ 'N4$hlhytotl,
C
Contact:
RELEASE
The Department
gag-gQ4)
tl
6, 1990
MONEY
O.C. ~ Tylyyhygy
LAUNDERING
Cheryl Crispen
(202) 566-5252
ASSET SHARING WITH FRANCE
of the Treasury
United States is sharing $2 million
laundering case known as "Operation
of France. The case was investigated
French participation
in the case.
announced today that the
from assets seized in a money
C-Chase" with the Government
by U. S. Customs based upon
Following a meeting of the G-7 Financial Action Task Force
on Money Laundering
held in Paris on November 5th, Deputy
Secretary of the Treasury John E. Robson presented a check for $2
million to Michel Charasse, Minister of the Budget. The FATF
established by the heads of governments at the 1989 Economic
Summit in Paris, issued a report in April 1990 which serves as a
blueprint for comprehensive domestic programs and international
cooperation against money laundering and the drug trafficking it
sustains.
check, Robson said, "This
case is an example of how international cooperation in the fight
against drug money laundering can result in putting criminals
behind bars. Operation C-Chase gave law enforcement new insights
into the money laundering techniques and capabilities of the
established a
Colombian drug cartels and most importantly
two governments
in
between
our
coordination
close
for
precedent
"
cases.
money laundering
In presenting
the asset sharing
laundering investigation
in
1986.
Customs agents
Florida
launched by U. S. Customs in
posing as professional money launderers penetrated several major
Employees of the Bank of
Colombian money laundering groups.
("BCCI"
facilitated
International
) actively
Credit and Commerce
this money laundering by assisting in concealing the true source
and ownership of the funds as they moved through international
banking channels.
On January
16, 1990, BCCI pleaded guilty to money laundering
and agreed to forfeit over $15 million of which $10 million went
to the U. S. In the Summer of 1990, five officials of BCCI were
convicted of money laundering in federal court in Tampa, Florida,
and two officials were convicted in the United Kingdom.
Operation
C-Chase was a major money
Tomorrow,
Deputy
Secretary Robson will
make
a
similar
presentation to the British Treasury based upon assistance
by British Customs in other aspects of the case.
oOo
given
2 U&&L&
Department
of the Treasury
~ Bureau ol th«Publi«Debt
~
Kashiny~in,
DC 2023~
UQgQgg
FOR IMMIX)IATE RELEASE
7, 199o
November
CONTACT:
I. Ut
RESULTS OF TREASURY'S AUCTION
OffiCe of Financing
202-376-4350
OF 10-YEAR NOTES
Tenders ior $11,068 million of 1b-year
be issued on November 15, 1990 and mature
were accepted today (CUSIP: 912827ZN5).
to
notes, Series
on November
D-2OOO,
15, 2000
The interest rate on the notes will be 8 1/2\.
The range
of accepted bids and corresponding prices are as follows:
Low
High
Average
8. 504
8. 52%
8. 524
150.000
99. 867
99. 867
$10, 000 was accepted at lower yields.
Tenders at the high yield were allotted
TENDZRS RECEIVED AND ACCEPTED
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
24, 752
26, 840, 879
9, 019
21, 932
74, 920
25, 370
1, 529, 322
26, 255
12, 342
29, 682
70%.
(in thousands)
24, 752
10, 031, 529
9, 019
21, 892
53, 995
25, 270
783, 367
486, 600
21 I 405
12 I 332
29, 682
9, 652
40, 295
$29' 095) 865
$11 ( 068 i 330
9, 652
$11,068 million of accepted tenders includes $754
million of noncompetitive tenders and $10, 314 million of
competitive tenders from the public.
In addition,
$15 million of tenders was awarded at the
Reserve Banks as agents for foreign and
Federal
average price to
$400 million
An additional
international monetary authorities.
of tenders was also accepted at the average price from Federal
Reserve Banks for their own account in exchange for maturing
The
securities.
The minimum par amount required
Larger amounts must be in multiples
NB-1027
for sTRIPs is $400, ooo.
of that amount.
l USLl
Department
of the Treasun'
FOR IMMEDIATE
~
BureatI
RELEASE
.
8, 1990
November
i&f
t& PhtAit Qgg
;p- ~;-
CONTACT:
dit,
RESULTS OF TREASURY'S AUCTION
Tenders
on November
I QVashinyon.
DC 20'239
Office of Financing
202-376-4350
OF 161-DAY
BILLS
for $12, 032 million of 161-day bills to be issued
15, 1990 and mature on April 25, 1991 were
accepted today (CUSIP: 912794WF7).
OF ACCEPTED
COMPETITIVE BIDS:
RANGE
Discount
Rate
Low
High
Average
7. 07%
7. 08%
7. 08%
Investment
Rate
7. 404
7. 41%
7. 41%
Price
96. 838
96. 834
96. 834
Tenders at the high discount rate were allotted 53%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
Location
Boston
(in thousands)
Acce ted
Received
0
0
11, 146, 865
York
36, 423. 015
Cleveland
500
10
2, 000
3, 463, 225
618, 015
3, 000
1, 000
0
0
New
Philadelphia
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
0
0
0
0
500
10
530
0
0
1, 000, 000
265, 000
$40, 891, 750
$12, 031, 920
$40, 884, 025
$12, 024, 195
0
725
$40, 891, 750
7
0
725
$12, 031, 920
7
Federal Reserve
Foreign Official
Institutions
TOTALS
$40, 891, 750
$12, 031, 920
USZ
Department
I
of the Treasur
FOR IMMEDIATE
EW
DK
~
Bureau of the Public Debt
RELEASE
ll'ashinyon.
CONTACT:
8, 1990
November
~
RESULTS OF TREASURY'S AUCTION
DC 20239
Office of Financing
202-376 —'350
OF 29-YEAR,
9-MONTH
for $10, 754 million of 29-year, 9-month
November 15, 1990 and mature on August 15,
Tenders
issued on
accepted today (CUSIP: 912810EG9).
BONDS
bonds to be
2020 were
The interest rate on the bonds will be 8 3/4%. The range
of accepted bids and corresponding prices are as follows:
Price
Yield
100. 589
Low
8. 69%
100. 270
8. 72%
High
100. 376
8. 71%
Average
Tenders
at the
high yield were
allotted 15%.
(in thousands)
Acce ted
Received
124
2, 124
2,
10, 190. 071
20, 555, 921
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
1, 592
2, 238
7, 246
3, 956
1, 138, 400
6, 774
605
7, 659
3, 530
349. 438
820
$22, 080, 303
1, 592
2, 236
7, 246
3. 936
492, 585
6, 774
597
7, 659
3, 405
35, 428
820
$10, 754, 473
$482
$10, 754 million of accepted tenders272 includes
million
of
million of noncompetitive tenders and $10,
competitive tenders from the public.
accepted
In addition, $200 million of tenders was also
their own
for
Reserve Banks
at the average price from Federal securities.
account in exchange for maturing
The minimum par amount required for STRIPS is $16p, ppp.
Larger amounts must be in multiples of that amount.
The
87500 per $1, 000 of par gus.
Also, accrued interest of $21.1990
to No", e-, ker 15, 1~:-0.
be paid for the period August 15,
NB-']029
portment of the 7reasiry. .e Illphh%0ton,
FOR RELEASE AT 12:00
November 9, 1990
I.c. ~ Telephone
CONTACT:
NQON
I'i
SIN-ao4&
Office of Financing
(202) 376-4350
TEQASURY'S 52-WEEK BILL OFFERING
The Department of the Treasury, by this public notice,
invites tenders for approximately $11,750 million of 363-day
Treasury bills to be dated November 23, 1990, and to mature
November 21, 1991 (CUSIP No. 912794 WW 0). This issue will provide about $1, 975 million of new cash for the Treasury, as the
maturing 52-week bill is outstanding in the amount of $9, 783
million. Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington, D. C.
20239-1500, Thursday, November 15, 1990, prior to 12:00 noon for
noncompetitive tenders and prior to 1:00 p. m. , Eastern Standard
time, for competitive tenders.
The bills will be issued on a discount basis under competitive and noncompetitive bidding, and at maturity their par amount
will be payable without interest. This series of bills will be
issued entirely in book-entry form in a minimum amount of $10, 000
on the records either of the
and in any higher $5, 000 multiple,
Federal Reserve Banks and Branches, or of the Department of the
Treasury.
bills will be issued for cash and in exchange for
Treasury bills maturing November 23, 1990. In addition to the
maturing 52-week bills, there are $17, 684 million of maturing
bills which were originally issued as 13-week and 26-week bills.
The disposition of this latter amount will be announced next
The
Federal Reserve Banks currently hold $1, 362 million as
agents for foreign and international monetary authorities, and
$7, 821 million for their own account. These amounts represent
the combined holdings of such accounts for the three issues of
maturing bills. Tenders from Federal Reserve Banks for their
monetary
own account and as agents for foreign and international
authorities will be accepted at the weighted average bank disAdditional amounts
count rate of accepted competitive tenders.
Reserve
Federal
to
Banks, as agents
issued
of the bills may be
for foreign and international monetary authorities, to the extent
that the aggregate amount of tenders for such accounts exceeds
the aggregate amount of maturing bills held by them. For purposes of determining such additional amounts, foreign and international monetary authorities are considered to hold $146 million
of the original 52-week issue. Tenders for bills to be maintained on the book entry records of the Department of the
Treasury should be submitted on Form PD 5176-3.
week.
NB-3 Q3Q
TMASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 2
the par amount of bills bid for,
$10, 000. Tenders over $10, 000 must
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
two decimals, e. g. , 7. 154. Fractions may not be used.
A single
bidder, as defined in Treasury s single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
Each tender must state
which must be a minimum of
and dealers who make primary
Banking institutions
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers, if
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
position in the bills being offered if such position is in excess
of $200 million. This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction. Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
each customer whose net long position in the bill being offered
exceeds $200 million.
A noncompetitive
bidder may not have entered into an
agreement, nor make an agreement to purchase or sell or otherwise dispose of any noncompetitive awards of this issue being
auctioned prior to the designated closing time for receipt of
tenders.
Payment for the full par amount of the bills applied for
must accompany all tenders submitted for bills to be maintained
on the book-entry records of the Department of the Treasury.
A cash adjustment
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined
in the auction.
deposit need accompany tenders from incorporated banks
and trust companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches.
No
8/89
TREASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 3
Public announcement will be made by the Department of the
Treasury of the amount and yield range of accepted bids. Competitive bidders will be advised of the acceptance or rejection
of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g. , 99. 923, and the determinations
of the Secretary of the Treasury shall be final.
Settlement for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
on the issue date, in cash or other immediately-available
funds
or in Treasury bills maturing on that date. Cash adjustments
will be made for differences between the par value of the
maturing bills accepted in exchange and the issue price of the
new
bills.
If a bill is
and is held to maturity,
as
ordinary income on the
the amount of discount is reportable
Federal income tax return of the owner for the year in which
Accrual-basis taxpayers, banks, and other
the bill matures.
in section 1281 of the Internal Revenue Code
designated
persons
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
purchased
at issue,
of the Treasury Circulars, Public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtained
from any Federal Reserve Bank or Branch, or from the Bureau of
the Public Debt.
Department
8/89
KT
Department
~
of the Treasury
FOR IMMEDIATE
Bureau of fhe+ttblic Debt
''
RELEASE
13, 1990
November
~"'=, =.
"~~
Tenders
~
Office of Financing
202-3/6-4350
OF 13-WEEK
BILLS
for $10, 086 million of 13-week bills to be issued
15, 1990 and mature on February 14, 1991 were
accepted today (CUSIP: 912794VV3).
RANGE
OF ACCEPTED
COMPETITIVE
BIDS:
Discount
Rate
7. 04%
7. 05%
7. 05%
Low
High
Average
Investment
Rate
7. 27%
7. 28%
7. 28%
Price
98. 220
98. 218
98. 218
$25, 000 was accepted at lower yields.
Tenders at the high discount rate were allotted 41%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
Received
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal,
Public
Federal Reserve
Foreign Official
Institutions
TOTALS
(in thousands)
43, 280
29, 592, 210
26, 910
59, 690
60, 415
30, 140
495
861,
1,
37, 115
43, 280
8, 543. 675
26, 910
59, 690
42, 630
23, 370
42, 630
23, 370
9, 270
1, 163, 875
60. 415
28, 550
204, 380
17, 115
9, 270
139, 660
887 200
887 200
$33, 837, 600
$10, 086, 145
$29, 396, 175
1 871 390
$31, 267, 565
$5, 644, 720
1 871 390
$7, 516, 110
2, 332, 410
2, 332, 410
237 625
$33, 837, 600
$10, 086, 1. 5
237 625
".
additional $196, 075 thousand of bills will be
issued to foreign official institutions for new cash.
An
'H
DC '20'239
l~'ashinyon,
CONTACT:
RESULTS OF TREASURY'S AUCTION
on November
KW
SLI DEBT E
Department
of the Treason~
FOR IMMEDIATE
.
~ . ;86rehd
RELEASE
13, 1990"» »
November
~
'J
of 48 Pqblic Debt
0
~
ll'ashinyon.
CONTACT:
DC 20239
202-376-4350
OF 26-WEEK
BILLS
I
for $10, 016 million of 26-week bills to be issued
15, 1990 and mature on May 16, 1991 were
Tenders
on November
accepted today (CUSIP: 912794WJ9).
OF ACCEPTED
RANGE
COMPETITIVE
BIDS:
Discount
Rate
Low
High
Average
7. 00%
7. 02%
7-02%
Investment
Rate
7. 36%
7. 38%
7. 38%
Price
96. 461
96. 451
96. 451
Tenders at the high discount rate were allotted 44%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
AND
ACCEPTED
Received
34, 300
26, 762, 410
20, 165
45, 400
73, 695
36, 730
1, 667, 510
29, 600
6, 930
45, 675
20, 515
1, 025, 955
694 010
$30, 462, 895
(in thousands)
34, 300
8, 570, 615
20, 165
45, 400
73, 695
33, 110
224, 110
20, 800
6, 930
45, 675
20, 515
226, 340
694 010
$10. 015, 665
$25 , 888, 250
1 392 870
$27 , 281, 120
$5, 441, 020
2, 600, 000
2, 600, 000
581 775
895
462,
$30,
$10, 015, 665
1
392 870
$6, 833, 890
581 775
additional $502, 825 thousand of billsne..~ill be
cash.
issued to foreign official institutions for
An
NB-1032
hg(
Office of Financing
I
RESULTS OF r, TREASURY'S AUCTION
H
~4,
.
pw.
Ipartment of the treasury
~ Washlnaton, n. e. ~ Telephone 56d-2O4t
4:00 P. M.
CONTACT:
Office of Financing
FOR RELEASE AT
November 13, 1990
202/376-4350
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice,
invites tenders for two series of Treasury
bills totaling approximately $20, 000 million, to be issued November 23, 1990. This
offering will provide about $2, 325 million of new cash for the
Treasury, as the maturing bills are outstanding in the amount
of $17, 684 million. Tenders will be received at Federal Reserve
Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. 20239-1500, Monday, November 19, 1990, prior to 12:00
noon for noncompetitive
tenders and prior to 1:00 p. m. , Eastern
Standard time, for competitive tenders.
The two series offered
are as follows:
90-day bills (to maturity date) for approximately
000
$10,
million, representing an additional amount of bills dated
August 23, 1990, and to mature February 21, 1991 (CUSIP No. 912794
VW 1), currently
outstanding in the amount of $9, 265 million, the
original bills to be freely interchangeable.
181-day bills for approximately $10, 000 million, to be
dated November 23, 1990, and to mature May 23, 1991 (CUSIP No.
additional
912794
WK
and
6).
The bills will be issued on a discount basis under competitive
and noncompetitive
bidding, and at maturity their par amount will
be payable without interest.
Both series of bills will be issued
entirely in book-entry form in a minimum amount of $10, 000 and in
on the records either of the Federal
any higher $5, 000 multiple,
Reserve Banks and Branches, or of the Department of the Treasury.
bills will be issued for cash and in exchange for
bills maturing November 23, 1990. In addition to the
maturing 13-week and 26-week bills, there are $9. 783 million of
maturing 52-week bills. The disposition of this latter amount
last week. Tenders from Federal Reserve Banks for
was announced
The
Treasury
account and as agents for foreign and international
authorities will be accepted at the weighted average
Additional
bank discount rates of accepted competitive tenders.
to
Federal
issued
Reserve
be
Banks, as
amounts of the bills may
international
monetary
authorities,
to
agents for foreign and
the extent that the aggregate amount of tenders for such accoun s
For
exceeds the aggregate amount of maturing bills held by them.
purposes of determining such additional amounts, foreign and international monetary authorities are considered to hold $1, 091 million
of the original 13-week and 26-week issues. Federal Reserve Banks
currently hold $1, 237 million as agents for foreign and international monetary authorities, and $7, 846 million for =heir own
their
own
monetary
account. These amounts represent the combined holdings of such
accounts for the three issues of maturing bills. Tenders for bi;ls
to be maintained on the book-entry records of the Depar ent of the
Treasury should be submitted on Form PD 5176-1 (for 13-«eek series)
or Form PD 5176-~ (for 26-week series).
-.
,
TREASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page
2
Each tender must state the par amount of bills bid for,
which must be a minimum of $10, 000. Tenders over $10, 000 must
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
A single
two decimals, e. g. , 7. 154. Fractions may not be used.
bidder, as defined in Treasury s single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
and dealers who make primary
Banking institutions
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers, if
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
position in the bills being offered if such position is in excess
of $200 million. This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction. Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
each customer whose net long position in the bill being offered
exceeds $200 million.
noncompetitive bidder may not have entered into an
agreement, nor make an agreement to purchase or sell or otherwise dispose of any noncompetitive awards of this issue being
auctioned prior to the designated closing time for receipt of
A
tenders.
Payment for the full par amount of the bills applied for
must accompany all tenders submitted for bills to be maintained
on the book-entry records of the Department of the Treasury.
A cash adjustment
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined
in the auction.
deposit need accompany tenders from incorporated banks
companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches.
No
and
8/89
trust
TREASURY ' S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 3
Public announcement will be made by the Department of the
Treasury of the amount and yield range of accepted bids. Competitive bidders will be advised of the acceptance or rejection
of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g. , 99. 923, and the determinations
of the Secretary of the Treasury shall be final.
Settlement
for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the ederal Reserve Bank or Branch
on the issue date, in cash or other immediately-available
funds
or in Treasury bills maturing on that date. Cash adjustments
will be made for differences between the par value of the
maturing bills accepted in exchange and the issue price of the
new
bills.
If
bill is
is
held to maturity,
reportable as ordinary income on the
of the owner for the year in which
the bill matures.
Accrual-basis taxpayers, banks, and other
persons designated in section 1281 of the Internal Revenue Code
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
a
purchased
the amount of' discount is
Federal income tax return
at issue,
and
of the Treasury Circulars, Public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtained
from any Federal Reserve Bank or Branch, or from the Bureau of
the Public Debt.
Department
8/89
g%$
'PUSI. I
Department
~it
DEBT NEW
~
the Treasun,
FOR IMMEDIATE
Bureau of if~'lictDebt
RELEASE
f(07
I
Jg
~
~;
'~,
'
.
RESULTS OF TREASURY'S AUCTION
Tenders
on November
hN
«. hir1$tun. nC
-
I
\'U
I t%
.~9
202-376 —' 350
j
OF 52-WEEK
i
O
BILLS
~.
for $11, 878 million of 52-week bills to be issued
23, 1990 and mature on November 21, 1991 were
&
LJ
accepted today (CUSIP: 912794WWO).
OF ACCEPTED
RANGE
COMPETITIVE
BIDS:
Discount
Rate
6. 80%
6. 82%
6. 81%
Investment
Rate
7. 27%
7. 29%
7. 28%
Price
93. 143
93. 123
Average
93. 133
Tenders at the high discount rate were allotted 12%.
The investment rate is the equivalent coupon-issue yield.
Low
High
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
Received
20, 380
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal,
Public
Federal Reserve
Foreign Official
Institutions
TOTALS
36, 395, 575
17, 825
15, 025
20, 170
12, 955
1, 835, 480
14, 420
3, 245
21, 740
5, 815
410
000,
1,
224 190
$39, 587, 230
(in thousands)
20, 380
11, 132, 375
17, 825
15, 015
20, 170
11, 075
326, 480
10, 540
3, 245
21, 740
5, 805
69, 410
224 190
$11, 878, 250
$36, 441, 230
537 410
$8, 194, 840
537 410
$8, 732, 250
3, 000, 000
3. 000, 000
146 000
$39, 587, 230
146 000
$11, 878, 250
$35, 903, 820
additional $584, 000 thousand of bills will be
issued to foreign official institutions for new cash.
An
NB-1034
c|-
Rt
Office of Financing
CONTACT:
15, 1990
November
+
~
~
'
LI BK T
Department
of the Treasury
~
Bureau ot the Public Debt
jl
FOR IMMEDIATE
RELEASE
'
19, 1990
November
K
~
Kashtnq~ton,
Office of Financing
-U
202-376-4350
COlfZACT:
'Fr ~.RESULTS OF TREASURY'S AUCTION
on November
BILLS
OF 13-WEEK
I
Tenders
DC '02.'l9
g
for $10, 001 million of 13-week bills to be issued
23, 1990 and mature on February 21, 1991 were
accepted today (CUSIP: 912794VW1).
OF ACCEPTED
RANGE
COMPETITIVE
BIDS:
Discount
Rate
Low
High
Average
7. 07%
7. 08%
7. 08%
Investment
Rate
7. 30%
7. 31%
Price
98. 233
98. 230
98. 230
$1, 240, 000 was accepted at lower yields.
Tenders at the high discount rate were allotted 74%.
rate is the equivalent coupon-issue yield.
The investment
TENDERS RECEIVED
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
AND
ACCEPTED
Received
34, 140
25, 763, 295
21, 370
38, 230
47, 075
34, 735
1, 678, 565
34, 950
(in thousands)
34, 140
8. 329, 245
21, 370
38, 230
47, 075
33, 475
257, 065
14, 950
9, 470
33, 500
9, 470
33, 500
23, 050
917, 100
23, 050
288, 585
870 805
$29, 506, 285
870 805
$10, 000, 960
$25, 329, 475
$5. 824, 150
$27, 007, 215
$7, 501, 890
2, 329, 885
2, 329, 885
169 185
$29, 506, 285
169 185
$10, 000. 960
1 677 740
1 677
additional $77, 615 thousand of bills
issued to foreign official ins-itutions for
An
NB-1 35
740
ill
new
be
cash.
"PUBI.Ic. DEBT,
Department
of the Treasury
FOR IMMEDIATE
~
Bureau of the
RELEASE,
19, 1990
November
lic Debt
Tenders
ll'ashint, ton, DC 20239
( '$08fAtT:
i
gt
RESULTS OF TREASURY'S AUCTION
on November
~
Office of Financina
202-376-4350
OF 26-WEEK
BILLS
for $10, 043 million of 26-week bills to be issued
23, 1990 and mature on May 23, 1991 were
accepted today (CUSIP: 912794WK6).
OF ACCEPTED
COMPETITIVE BIDS:
RANGE
Discount
Rate
Low
High
Average
7. 04%
7. 05%
7. 05%
Investment
Rate
7. 40%
7. 41%
7. 41%
Price
96. 460
96. 455
96. 455
$10, 000 was accepted at lower yields.
Tenders at the high discount rate were allotted 73%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
Received
30 , 985
23 373 , 495
(in thousands)
30, 985
860
349,
8,
18, 260
36, 600
50, 700
24, 665
512, 475
15, 645
18 , 260
36 , 600
53 , 400
25 , 935
2, 106 , 815
23 , 645
7 , 805
39 , 905
16 , 890
912 , 785
607 770
$27, 254, 290
$10, 043, 290
$22, 586, 990
$5, 375, 990
$23, 816, 075
$6, 605, 075
2, 550, 000
2, 550, 000
888 215
$27, 254, 290
888 215
$10, 043, 290
1 229 085
7, 805
39, 905
16, 890
331, 730
607 770
1 229 085
additional $404, 185 thousand of bills will be
issued to foreign official institutions for new cash.
An
NB-1036
L4
partment of the Treasury ~ Nashlniton,
November
O.C. ~ Telephone $13-2041
19, 1990
Assistant
HOLLIS
S.
MCLOUGHLIN
Secretary of the Treasury (Policy
and Counselor to the Secretary
Management)
23, 1989 Hollis Samuel McLoughlin was sworn in as
Assistant Secretary of the Treasury (Policy Management).
He
was confirmed by the United States Senate for this position
on May 10, 1989 and appointed by President Bush on May 22,
1989. Mr. McLoughlin also serves as Counselor to the
On
May
Secretary.
As Assistant
Secretary (Policy Management) and Counselor to
the Secretary, Mr. McLoughlin serves as the Senior Advisor
to the Secretary and overseer of the Executive Secretariat.
He identifies
and manages policies covering the full range
of the Department's activities and coordinates departmental
policies with the White House and other executive branch
departments.
Prior to joining the Department, Mr. McLoughlin was Managing
Director of the Taggart Group. Previously, he was an
Executive of Purolator Courier Corporation, most recently as
Senior Vice-President; Chief of Staff for then U. S. Senator
Assistant to
Nicholas F. Brady; and Administrative
Milicent Fenwick. His prior business
Congresswoman
experience was as an Account Executive with Benton Bowles;
and Associate with William Sword a Co.
Mr. McLoughlin received his B.A. in 1972 from Harvard
College. He was born July 4, 1950 to John Thomas and
Harriette Hollis Mcloughlin of Princeton, New Jersey. He is
resident of Summit, New Jersey, and currently
a permanent
lives in Washington, D. C. with his wife, Caroline Bickel
Caroline.
McLoughin and their daughter,
oOo
NB-295A
of the TreaSury
apartment
~
Washington,
O. C. ~ Telephone 566-204
TEXT AS DELIVERED
Remarks by
The Honorable Nicholas
New
F.
Brady
Secretary of the Treasury
before the
York Chapter, Arthritis Foundation
Founders' Award Dinner
New York, New York
November 20, 1990
Bill
And
(Todd, Chairman, New York Chapter).
special thanks to John Birkelund and Mike Blumenthal, who put
this evening together. Also many thanks to Ross Alfieri, who has
worked so hard as President of the New York Chapter.
Thank you,
I
am
and honored
This is a very
proud
to receive the Founders' Award from
special award from an exceptional
tonight.
of people. Thanks.
New York Chapter makes life
The Arthritis Foundation's
easier, and less painful, for millions of Americans and people
Every day, arthritis sufferers benefit
throughout the world.
of your contributions, hard work and
results
from the direct
for this crippling disease. Very
compassionate understanding
often, the research and technology you support is the difference
you
group
between
pain and comfort.
37 million Americans are affected by arthritiseveryday activities like
related diseases. For them, even
-even holding a pencil -- can
or
walking, driving and cooking
be very painful.
More than
Last December, I had hip
I'm speaking from experience.
remarkable
operation, and
It was a
replacement surgery.
surgeon, Dr. Chit Ranawat, and to Dr.
thanks to an extraordinary
-- I
(Charles) Christian and the Hospital for Special Surgery
recovered quickly.
This is
And, following a short period, mobili y returned.
a
game of
last
week
in
important in my line of work. Why, just
speed golf with President Bush, I came in second beaten only by
And
two and a
half lengths.
but the traditional banking activities, mainly lending
we left in place a
to individuals and corporate customers. Andinterstate
prohibited
banking.
effectively
system of laws that
relatively safe industry that was
The result was a profitable,
anything
protected from competition.
These laws that protected and segmented the industry reflect
the reality of a half-century ago. In that. era, banks were
almost solely responsible for financing business and consumers.
They represented the primary means of payment and settlement.
it was no great handicap for most banks to do
Geographically,
intrastate business alone, and it was a great benefit not to have
Borrowers
to compete with out-of-state rivals or non-banks.
looked to local community lenders who understood local markets.
last twenty years have simply revolutionized the
financial services markets, bringing intense competition to banks
Money market funds with credit
and benefits to the consumer.
But the
card and check-writing privileges now compete directly with
traditional bank checking accounts. At the same time, the banks'
corporate customers have taken their best business to the
securities and commercial paper markets. And individuals
increasingly rely on credit extended directly to them by
manufacturers
and retailers, rather than by banks.
of these changes are a result of new technology in
processing across the spectrum of financial
institutions.
Technology has eaten away at the system of rigid
segmentation and protection.
It has, in fact, made the financial
services industry into one market. In today's world, the
Many
information
automatic
teller
restrictions
machine
interstate
and
the 800
number
have rendered
the
obsolete.
As our banks have faced ever greater competition
in their
traditional areas, they have had only limited ability to follow
their customers as new markets developed. As a result, in an
effort to maintain margins, they have found themselves choosing
among the more risky and often less attractive kinds of lending
such as commercial real estate and loans to highly leveraged
companies.
The result is a system with too much risk and too
on
banking
little profit.
the deposit insurance "safety net", by allowing
to attract funds under Uncle Sam's guarantee, has fostered
In
proliferation of banks and slowed the pace of consolidation.
the United States, we have about 12, 500 commercial banks, far
more than any of our international
competitors.
For example,
Japan has about 150; the United Kingdom 550; Canada 65; and
Germany 900.
banks
that
Moreover,
There
it's
is a hidden message behind the headlines, and
time to overhaul the system, to address these
it is
virtually all of our major bank holding companies now meet the
1992 worldwide standards for bank capital, established by the
Settlements.
This isn't the case for the
Bank for International
competitors.
banks of a number of our major international
Perhaps most important, the banks of 1990 are not the S&Ls
of the 1980s. They' re as different as chalk and cheese. By a
wide. margin, the banks have more capital, are more profitable and
better managed, and have less risky kinds of assets than the S&L
industry.
The United
States banking system's over $200 billion in
equity represents about 6% of total assets. By comparison, the
equity capital of the S&L industry was under $10 billion and less
than 1~ of assets in 1987, the year losses mushroomed in that
industry.
Finally, the Federal bank regulators -- the Federal
Reserve, the Office of the Comptroller of the Currency, and the
FDIC -- are a highly respected group with a solid tradition of
professionalism and concern for safety and soundness.
The current situation needs to be analyzed with balance,
also with the benefit of historical perspective.
From that
mixture
of both
viewpoint, our current difficulties reflect a
cyclical and structural problems'
and
Part of what is going on now is the business cycle. Many
economists say that we are now entering the down phase of the
cycle. Commercial real estate markets are overbuilt, and we 've
Although
had a sharp, temporary increase in the price of oil
some industries
and regions remain strong, the economy is
In banking, the correction appears to be a
weakening.
particularly sharp one, in part because it follows a lengthy
expansion during which the traditional lending standards applied
Despite all of that, we have
by many banks clearly eroded.
weathered this kind of storm before, and we will weather this one
as well.
In addition to the cyclical downturn, there is an underlying
structural problem that exacerbates these cyclical downturns.
I'm referring to the legal and regulatory structure of our
financial system. It is outmoded, burdensome and inefficient.
to the negative headlines
And its flaws are an unseen contributor
structural
reform, and,
fundamental
need
We
we are seeing.
committed
to
this
goal. Again,
Secretary of the Treasury, I am
~
let
history.
In the early 1930s, the banking industry entered a period o.
convulsive failures t. .at was a major factor in causing the
In response, we erected a rigid system of protection
Depression.
Banks received a number of special
around commercial banking.
benefits, including the federal deposit insurance safety n~-. A-„
the same tir. e, banks were also prohibited from engaging in
me
provide
,
some
as I' ve suggested, we
For our part in the Administration,
intend to be a strong force for careful but fundamental reform,
and for stability in the near term.
course, the most important thing that public policy can
is to create and
our financial institutions
do to strengthen
In that context,
maintain an environment of economic stability.
concluded
budget
recently
the
about
let me say a few words
Of
package.
mindful that the process was not one of Washington's
finest hours. But I am also aware that the final package is one
that will do the job of cutting the deficit by $500 billion over
is very
five years. This program is not "smoke and mirrors";
I
am
it
because it is so real that the
The
was
so
package included meaningful
very painful.
process
reform in the budget process which, among other things, puts
binding caps on spending, which is the real key to success over
time.
real.
In
fact,
it is
primarily
is the major change in fiscal policy
that we promised the American people and that the international
markets have been looking for. In these circumstances I expect
that the essential framework has been laid that should promote
And given the
renewed and welcome stability in exchange markets.
global economic situation, policies that promote stability in the
dollar exchange rate are a plus, not just for the United States,
In
fact, this
package
but for the world economy
at large.
Tonight, I want to leave you with the certainty that this
Administration
recognizes the importance of a banking system
which both inspires confidence and is competitively
strong here
and abroad. Confidence rests on profitable operations which build
financial resources. Competitive strength depends on maintaining
lending relationships with credit-worthy customers
relationships that are a cornerstone of the banking system's
traditional
franchise.
For its part, this Administration
is committed to promoting
legislation and encouraging regulation which will allow banks to
reshape their activities to operate profitably and soundly in a
business environment made new by technological change. And I
call on bankers to commit themselves to stick by their creditworthy customers and not relinquish the franchise built so
successfully over many years. I am confident these dual
commitments will strengthen
our banking system's position as a
worldwide leader.
Thank you very much.
underlying structural flaws. There is
in Washington and in the markets -- in
— that the time has come.
of
The Treasury
you are aware,
understands
will
now
a developing
consensus
fact, all over the
the need for change,
and,
come forward with a comprehensive
than two months.
Our objective is
world
as some
proposal
clear: It
to Congress in less
is to modernize our financial system, through reforms to the
deposit insurance safety net and, just as importantly, to change
those structural impediments to profitability that have
overstayed their welcome.
With the S6L experience
fresh in the minds of taxpayers and
the
the
tendency in
current environment will
legislators,
be to focus narrowly on deposit insurance reform,
understandably
to make sure that banks are safe and sound. But the
feels strongly that profitability is a key element
Administration
of safety and soundness, and that deposit insurance reform should
therefore only be considered as part of a package that also
addresses the structural flaws that impede profitability.
But most important, we have it in our power to solve the
We put these laws on the books; we can and, with
problem.
Congress' help, we will change them.
to put the entire system on a
firmer, more profitable, and thus safer and sounder footing over
time. But what about the near term? What can be done about the
growing perception that banks are backing away from their
fundamental
role of r, . ecting the financing needs of American
companies, large and small, as well as those of individuals?
Here, both the banks and the regulators have a role to play.
Let me offer a word to the banks. I urge you to keep
I understand the pressures that
lending to your good customers.
But let's not
come from building capital in a softening economy.
Your
franchise
the
regulators.
to
or
economy.
the
overreact to
y
stand
to
willingness
your
by
depends upon your continued
customers.
I urge you not to walk away from those whose trust
And there are many ways to
you have worked so hard to earn.
to shedding loans. I
addition
in
sheet
strengthen a balance
even dividends,
or
or to
costs,
that it is never easy to cut
These
are
tough
agree to combine with a long-time rival.
they'
ve
to
be
faced.
But
got
problems.
solutions to tough
I'd like to say pub'icly what I' ve sai=
To the regulators,
Apply some balance.
privately many times: Use some judgment.
in evaluating loans.
scenarios
negative
Don't use unrealistically
effect
your behavior can have
Don't overreact.
Be mindful of the
of banks to take even the reasonable risk of
on the willingness
syste™.that is
We need a banking
lending to good credits.
taker, not a shedder, of such risks.
Our
proposals
will be intended
,
In a more serious vein, the President believes the
In fact,
Government has an important role in medical research.
the
National
for
Institutes
of
President Bush increased funding
and
that
for
includes
1991,
a
percent
10
than
$7
more
Health by
research.
arthritis-related
million increase for
research dollars go a lot further than they
otherwise would thanks to the help of the Arthritis Foundation.
For example, NIH and the Arthritis Foundation work closely on
genetics research that is producing breakthroughs like the gene
discovery Dr. Christian mentioned earlier. This kind of publicprivate partnership can be effective in achieving important
advances in medical research.
arthritis
Our
I may, I'd like
and address some other
If
to change the subject for a few minutes
issues of national concern. As you have
been reading in the papers, the President is concerned about the
In fact, last week he met with groups
weakening in the economy.
of business and banking leaders, and with the senior banking
regulators, to hear their views. He heard that business is
softening, although there are areas of strength; and that banks
have tightened their lending standards,
for a number of reasons.
I'd
In that regard,
like to spend a few minutes this evening to
give you the Treasury's perspective on the current climate,
particularly as it relates to this country's financial services
industry.
We' ve all been hearing a steady stream of bad news about
financial firms -- big write-of f s; sharply declining stock market
valuations; excessive concentration in real estate loans; and
problems with loans to third world countries and LBOs. Twenty
years ago, the United States had eight banks among the top 25 in
the world, and ten years ago we had four. Now we' ve got only one.
We also hear that the fund that insures
deposits in
commercial banks is under stress, and that securities firms are
retrenching after a period of unusually rapid expansion.
At the
same time, the S&L cleanup presents a dark backdrop that adds to
the developing
should we make of
from our fears?
What
counsel
gloom.
all this?
Are we taking
too great
a
get too blue, let's make sure that we are looking
I'm not going to paint a rosy
problem with perspective.
scenario, but let's not look only at the negatives. Overall, the
banking system is healthy despite some pockets of difficulty.
Before
at this
we
U. S. banks have over $200 billion in equity capital.
And
they raised a great deal of equity in the 1980s, despite problem
loans in energy, agriculture and the third world, proving that
they can build capital even in difficult times.
In fact,
I
Iparimeni of ihe Treasury
~
Washinyion,
/
~
FOR RELEASE AT
November
4:00 P. M.
D.C. ~
j
g)~ j
CONTACT:
20, 1990
Pgl
telephone 566-204$
}L
Office of Financing
202/376-4350
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice, invites
tenders for two series of Treasury bills totaling approximately
$20, 000 million, to be issued November 29, 1990. This offering
will provide about $2, 325 million of new cash for the Treasury,
as the maturing bills are outstanding in the amount of $17, 676
million. Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington, D. C.
20239-1500, Monday, November 26, 1990, prior to 12:00 noon for
noncompetitive tenders and prior to 1:00 p. m. , Eastern Standard
time, for competitive tenders.
The two series offered are as
follows:
bills (to
maturity
bills for
approximately
date) for approximately
additional amount of bills dated
August 30, 1990, and to mature February 28, 1991 (CUSIP No. 912794
VX 9), currently
outstanding in the amount of $8, 953 million, the
additional and original bills to be freely interchangeable.
91-day
$10, 000 million,
182-day
dated November
912794 WL 4).
representing
an
$10, 000 million, to be
29, 1990, and to mature May 30. 1991 (CUSIP No.
bills will
basis under competitive
their par amount will
bidding,
and noncompetitive
Both series of bills will be issued
be payable without interest.
entirely in book-entry form in a minimum amount of $10, 000 and in
on the records either of the Federal
any higher $5, 000 multiple,
Reserve Banks and Branches, or of the Department of the Treasury.
The
on a discount
and at maturity
be issued
for cash and in exchange for Treasury
Tenders from Federal Reserve
1990.
bills maturing November 29,
Banks for their own account and as agents for foreign and international monetary authorities will be accepted at the weighted
average bank discount rates of accepted competitive tenders.
tional amounts of the bills may be issued to Federal Reserve Banks,
as agents for foreign and international monetary authorities, to
the extent that, the aggregate amount of tenders for such accounts
Fedexceeds the aggregate amount of maturing bills held by them.
eral Reserve Banks currently hold $1, 116 million as agents for
foreign and interna- onal monetary authorities, and $4, 606 million
for their own accoc . Tenders for bills to be maintained on the
book-entry records of the Department of the Treasury should be submitted on Form pD 5176-1 (for 13-week series) or Form pD 5176-2
The
bills will
be issued
.
(for
26-week
series) .
~KASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 2
Each tender must state the par amount of bills bid for,
which must be a minimum of $10, 000. Tenders over $10, 000 must,
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
e. g. , 7. 15%. Fractions
not be used. A single
bidder, as defined in Treasury s single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
two decimals,
may
and dealers who make primary
Banking institutions
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers, if
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
position in the bills being offered if such position is in excess
of $200 million. This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction. Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
each customer whose net long position in the bill being offered
exceeds $200 million.
noncompetitive bidder may not have entered into an
agreement, nor make an agreement to purchase or sell or otherwise dispose of any noncompetitive awards of this issue being
auctioned prior to the designated closing time for receipt of
A
tenders.
Payment for the full
must accompany all tenders
on the book-entry records
bills applied for
for bills to be maintained
par amount of the
submitted
of the Department
of the Treasury.
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined in the auction.
A
cash adjustment
deposit need accompany tenders from incorporated banks
trust companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches.
No
and
8/89
TREASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 3
Public announcement will be made by the Department of the
Treasury of the amount and yield range of accepted bids. Competitive bidders will be advised of the acceptance or rejection
of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g. , 99. 923, and the determinations
of the Secretary of the Treasury shall be final.
Settlement
for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
on the issue date, in cash or other immediately-available
funds
or in Treasury bills maturing on that date. Cash adjustments
will be made for differences between the par value of the
maturing bills accepted in exchange and the issue price of the
new
bills.
If a bill is purchased at issue, and is held to maturity,
the amount of discount is reportable as ordinary income on the
Federal income tax return of the owner for the year in which
the bill matures.
Accrual-basis taxpayers, banks, and other
persons designated in section 1281 of the Internal Revenue Code
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
Department of the Treasury Circulars, Public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtained
from any Federal Reserve Bank or Branch, or from the Bureau of
the Public Debt.
8/89
I&
A
ent of the Treasury
p
FOR IMMEDIATE
D.c. ~ Telephone
%ashierio
RELEASE
T. gF
-
November
u;
$66.2O41
21, 1990
}'
-'
Release of U. S. Reserve Assets
Monthly
for
~
The Treasury Department
today
the month of October 1990.
released
U. S.
reserve assets data
indicated in this table, U. S. reserve assets amounted to
$82, 852 million at the end of October, up from $80, 024 million in
As
September.
U. S. Reserve
(
in millions
Total
End
of
Reserve
Assets
of dollars)
Special
Gold
Dra~ing
Foreign
Currencies
Assets
Stock 1/
Rights
September
80, 024
10, 666
49, 414
October
82, 852
11,063
11,060
10, 876
51, 850
Month
2/3/
Reserve
Position
4/
in IMF 2/
1990
1/ Valued
8, 881
9, 066
at S42. 2222 per fine troy ounce.
2/ Beginning July 1974, the IMF adopted a technique for valuing the
based on a weighted average of exchange rates for the currencies
selected
position
1974.
3/ Includes
4/ Valued
member
in
the
countries.
IMF
allocations
The
U. S. SDR
on this
also are valued
of
SDRs by
the
IMF
at current market exchange rates.
SDR
of
holdings and reserve
basis beginning July
plus transactions
in SDRs.
ipclrtment
of the Treasury
FOR IMMEDIATE
November
~
Noshlnyton,
RELEASE
CONTACT:
21, 1990
Appointed
O.C. ~ Telephone S66-2041
Barry S.
Deputy
International
Newman
Assistant
Monetary
Cheryl
Crispen
(202) 566-5252
Secretary for
Policy
Secretary of the Treasury Nicholas F. Brady today announced the
of Barry S. Newman as Deputy Assistant Secretary of
appointment
the Treasury for International
Monetary Policy.
this position, Mr. Newman will play a key role in developing
economic and monetary
and implementing
U. S. international
policies and will focus on U. S. economic and financial
His
relationships with other industrial countries.
resonsibilities also will include matters concerning the
International Monetary Fund, the operation and evolution of the
international monetary system, international banking issues, and
foreign exchange operations.
International Division
Mr. Newman began his career in Treasury's
in 1967. Most recently, he served as advisor to the U. S.
Executive Director to the IMF. Prior to this, he was the
Director of the Office of International Monetary Policy at the
significantly over the
He has contributed
Treasury Departments
monetary policy, including
years to UPS. international
of the economic policy
development and implementation
coordination process among industrial countries, U. S. initiatives
In
to strengthen the International Monetary Fund, and the
In recognition of his outstanding
international debt strategy.
contributions, Mr. Newman was the 1989 recipient of the
Presidential
Rank Award.
B.A. in economics with honors from Ohio
(1964), where he was elected to Phi Beta
Wesleyan
(1967). He was born
Kappa, and a M. A. from Syracuse University
has two
married,
is
He
January 6, 1943, in New York City.
children, and resides in Oakton, Virginia.
Mr. Newman
received
University
a
oOo
NB-1040
department
of the Treasury
FOR RELEASE AT 12'00
November 21, 1990
~
Washinyion,
D.C. ~ Telephone 566-2041
CONTACT:
NOON
Office of Financing
202/376-4350
TREASURY TO AUCTION 2-YEAR AND 5-YEAR 2-MONTH
TOTALING $21, 250 MILLION
NOTES
The Treasury will raise about $11, 150 million of new cash
issuing $12, 250 million of 2-year notes and $9. 000 million
of 5-year 2-month notes. This offering will also refund $10, 110
million of 2-year notes maturing November 30, 1990. The $10, 110
million of maturing 2-year notes are those held by the public,
including $705 million currently held by Federal Reserve Banks
as agents for foreign and international monetary authorities.
by
The $21, 250 million is being offered to the public, and
any amounts tendered by Federal Reserve Banks as agents for
foreign and international monetary authorities will be added
to that amount. Tenders for such accounts will be accepted
at the average price of accepted competitive tenders.
In addition to the public holdings, Federal Reserve Banks
for their own accounts hold $495 million of the maturing securities that may be refunded by issuing additional amounts of the
tenders.
new notes at the average price of accepted competitive
Details about each of the new securities are given in the
attached highlights of the offerings and in the official offering
circulars.
oOo
Attachment
NB-1 041
HIGHLIGHTS
OF TREASURY OFFERINGS
OF 2-YEAR AND
TO THE PUBLIC
NOTES
5-YEAR 2-MONTH
November
Amount
Offered to the Public
. . . $12, 250 million
Descri tion of Securit
Term and type of security
Series and CUSIP designation
Issue Date
Maturity date
Interest Rate
yield
or discount
Interest payment dates
Investment
denomination
available
of Sale:
of sale
Competitive tenders
Terms
Method
Noncompetitive
Payment
investors
by
Series J-1996
(CUSIP No. 912827
December 3, 1990
ZQ
8)
15, 1996
based on
bids
accepted
of
the average
February
To be determined
payment
$1, 000
Yield auction
Must be expressed as
Yield auction
Must be expressed
with two
7. 10%
at the aver$1, 000, 000
a) Noncompetitive
b) Competitive
Settlement
available to the Treasury
Readily-collectible check
yield,
e. g. ,
Accepted in full
age price up to
an annual
decimals,
to be
with tender
Full payment
Full payment
Acceptable
Acceptable
Tuesday,
November
27, 1990
prior to 12:00 noon,
prior to 1:00 p. m. ,
Friday,
as
with two
7. 10%
at the aver$1, 000, 000
None
submitted
........
15, 1991)
on August
$5, 000
None
Receipt of tenders
b)
(CUSIP No. 912827 ZP 0)
November 30, 1990
November 30, 1992
To be determined based on
yield,
e. g. ,
in
full
Accepted
age price up to
non-institutiona
(final payment
due from institutions):
a) Funds immediately
Series AG-1992
an annual
payable
Deposit guarantee by
designated institutions
5-year 2-month notes
2-year notes
decimals,
tenders
Accrued interest
b y investor
Pa ment Terms:
$9, 000 million
the average of accepted bids
To be determined at auction
To be determined at auction
To be determined after auction To be determined after auction
30
August 15 and February 15 (first
May 31 and November
Premium
Minimum
21, 1990
EST
EST
November 30, 1990
November 28, 1990
Wednesday,
to
be
with tender
submitted
Wednesday,
November
prior to 12:00 noon,
prior to 1:00 p. m. ,
Monday,
Thursday,
December
November
28, 1990
EST
EST
3, 1990
29, 1990
8
NarCment
FOR
ef the treasury
II'tMEDIATE
November
2g
~
uti j
RELEASE
1990
UNITED
ur
STATES
NEW
Washlneion, O.C.
].I:;
')
-"
i(q
.
.
CONTACT:
~
teieyhone 3IO-211$
CHERYL
(
0
)
CRISPEN
t—
AND THAILAND
TO DISCUSS A
INCONE TAX TREATY
The Treasury Department
announced today that representatives
of the United States and Thailand ~. ill meet in Washington,
January 14-18, 1991, to discuss a possible bilateral income tax
treaty. Although there have been prior discussions, most
ecently in 1984, there is no income tax treaty now in effect
l.
between
the two countries.
will take into account the model income tax
for Economic Cooperation
the Organization
the United Nations, and the U. S. Treasury
and Development,
Department,
as well as tax treaties recently concluded by the two
countries with other countries, and recent changes in their
respective income tax laws.
Income tax treaties provide rules for the taxation of income
derived in one of the countries (the "source" country) by
residents of the other. They establish when the source country
classes of income and specify maximum rates of
may tax various
tax at source on certain items, such as dividends, interest and
royalties. They also provide for administrative cooperation
of the two countries and guarantee
between the tax authorities
taxation. Treaty benefits are limited to
non-discriminatory
residents of the two countries.
Persons wishing to offer comments or suggestions on the
negotiations are invited to write to Philip D. Morrison,
International Tax Counsel, Treasur, Depar'ment, washington, D. C.
20220.
The
negotiations
treaties published
by
o 0 o
NB-1042
Depa&'tmc nt
of tht-
~
Treats&&ry
Bureau
t&f
tht Publi~ Dt'ht
RELEASE
FOR IMMEDIATE
DC 20239
Office of Financing
202-376-4350
RESULTS OF TREASURY'S AUCTION
OF 13-WEEK
BILLS
for $10, 035 million of 13-week bills to be issued
Tenders
29, 1990 and mature
on November
on February
accepted today (CUSIP: 912794VX9).
RANGE
Hat&hinpon,
CONTACT:
26, 1990
November
~
28, 1991 were
OF ACCEPTED
BIDS:
COMPETITIVE
Discount
Investment
7 ' 22%
24%
7 ' 24%
Low
7.
High
Average
98 ' 231
98 ' 226
98 ' 226
Tenders at the high discount rate were allotted 45%.
The investment rate it= the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
'd790
p
34,
26/646, 435
20(095
43(300
47, 270
29, 195
1, 628, 100
57, 370
5, 430
34(605
Boston
New
York
Philadelphia
(in thousands)
1mlatal
34, 790
8(607, 675
20, 095
19, 255
1, 000/010
43, 300
47, 270
29, 195
266, 850
21, 870
5, 430
34, 605
19, 255
153, 760
TOTALS
$30/316, 750
$10, 034, 990
Type
~t
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
Competitive
p
tttt
Subtotal,
Public
Federal Reserve
Foreign Of'ficial
Institutions
TOTALS
75
$26, 519, 265
$6, 237, 505
$28, 033, 045
$7, 751, 285
2, 205, 600
$30, 316, 750
—
2, 205, 600
Zt
lllf
$10, 034, 990
additional $27, 895 thousand of bills will be
issued to foreign official institutions for new cash.
An
8
D
Ilrpartrtlc:r
~
pf the Treasury
t
Bureau
t&I
Tenders
pQ 2()~39
Office of Financing
OF 26-WEEK
BILLS
for $10, 083 million of 26-week bills to be issued
29, 1990 and mature
on May
accepted today (CUSIP: 912794wL4).
RANGE
+'zzhtrtgtprt
H~),
202-376-4350
RESULTS OF TREASURY'S AUCTION
on November
~
CONTACT:
26, 1990
November
NE
the Publ}(: Debt
RELEASE
FOR IMMEDIATE
'y+AOgp
30, 1991 were
OF ACCEPTED
BIDS:
COMPETITIVE
Low
High
Average
Discount
Investment
6. 964
6. 97%
6. 96%
7. 31%
7. 334
7. 314
ate
96. 481
96. 476
96. 481
Tenders at the high discount rate were allotted 24.
The investment
rate is the equivalent coupon-issue yield.
~d
(in thousands)
TENDERS RECEIVED AND ACCEPTED
Boston
New
York
Philadelphia
Atlanta
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
t it ive
An
additional
issued to foreign
6, 065
49, 785
16, 475
808, 195
18(590
6, 065
45, 235
16, 475
188, 695
$32, 560, 770
$10, 082, 655
$28, 022, 770
$5, 544, 655
1
0
Public
Federal Reserve
Foreign Official
it ti
31, 000
42, 220
24, 950
303, 705
2, 342(205
38, 490
Chicago
St. Louis
Minneapolis
Kansas City
TOTALS
22, 420
42( 220
24, 950
Richmond
Subtotal,
24, 540
8, 809( 670
31, 000
Cleveland
Noncompe
ILCaatal
24, 540
28, 605, 335
22, 420
$29, 123, 075
$6(644, 960
2, 400, 000
2, 400, 000
$32 560 770
$10(082(655
$368, 905 thousand
of bi 1 ls will be
for new cash.
official institutions
I.I(. DEBT NEW
Department
of the Treasury
'v i g
FOR IMMEDIATE
„J 0
i
bureau of the Public Debt
RELEASE
iX'ashinyon,
CONTACT:
27, , 1990
November
~
DC 20239
U
Office of Financing
202-376-4350
RESULTS OF TREASURY'S AUCTION
OF 2-YEAR NOTES
Tenders for $12, 347 million of 2-year notes, Series AG-1992,
be issued on November 30, 1990 and mature on November 30, 1992
were accepted today (CUSIP: 912827ZPO).
to
The
interest rate
of accepted bids
on the notes
and corresponding
Yield
Low
High
Average
Tenders
7. 47%
7. 49%
7. 49%
at the high yield
will be 7 3/8%. The range
prices are as follows:
Price
were
99. 826
99 ' 790
99. 790
allotted
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Received
59, 235
32, 445, 490
37, 915
52, 685
73, 495
47, 985
1, 306, 115
85, 715
30, 310
83, 335
19, 225
743, 370
252 775
$35, 237, 650
74%.
(in thousands)
59, 235
810
009,
11,
37, 915
52, 685
72, 185
42, 145
432, 310
79, 185
30, 310
83, 330
19, 185
175, 460
252 775
$12, 346, 530
$12, 347 million of accepted tenders includes $1, 208
million of noncompetitive tenders and $11, 139 million of
competitive tenders from the public.
The
In addition, $940 million of tenders was awarded at the
average price to Federal Reserve Banks as agents for foreign and
An additional
$495 million
international monetary authorities.
the
at
from
average
price
Federal
accepted
of tenders was also
Reserve Banks for their own account in exchange for maturing
securities.
NS-1045
apartment
of the Treasury
FOR RELEASE AT 4:00
November 27, 1990
~
Naehlnyton,
P. M.
tl. C.
CONTACT:
~
Telephone 566-2041
Office of Financing
202/376-4350
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice, invites
tenders for two series of Treasury bills totaling approximately
$20, 000 million, to be issued December 6, 1990 This offering will
provide about $2, 125 million of new cash for the Treasury, as the
maturing bills are outstanding in the amount of $17, 884 million.
Tenders will be received at Federal Reserve Banks and Branches and
at the Bureau of the Public Debt, Washington, D. C. 20239-1500,
Monday, December 3, 1990, prior to 12:00 noon for noncompetitive
tenders and prior to 1:00 p. m. , Eastern Standard time, for competitive tenders. The two series offered are as follows:
91-day bills (to maturity date) for approximately
$10, 000 million, representing an additional amount of bills
dated September 6, 1990, and to mature March 7, 1991 (CUSIP
No. 912794 VY 7), currently outstanding
in the amount of $9, 252
million, the additional and original bills to be freely
interchangeable.
182-day bills (to maturity date) for approximately $10, 000
million, representing an additional amount of bills dated June 7,
1990, and to mature June 6, 1991 (CUSIP No. 912794 WM 2), currently
outstanding in the amount of $10, 668 million, the additional and
original bills to be freely interchangeable.
The
bills will
on a discount
and at maturity
be issued
basis under competitive
their par amount will
noncompetitive bidding,
Both series of bills will be issued
without interest.
entirely in book-entry form in a minimum amount of $10, 000 and in
on the records either of the Federal
any higher $5, 000 multiple,
Reserve Banks and Branches, or of the Department of the Treasury.
and
be payable
The
bills will
be issued for cash and in exchange for TreasDecember 6, 1990. Tenders from Federal Reserve
ury bills maturing
Banks for their own account and as agents for foreign and international monetary authorities will be accepted at the weighted
Addiaverage bank discount rates of accepted competitive tenders.
Federal
issued
to
Reserve
be
Banks,
tional amounts of the bills may
as agents for foreign and international monetary authori-ies, to
the extent that the aggregate amount of tenders for such accounts
Fedheld by them.
exceeds the aggregate amount of maturing bills
'
eral Reserve Banks currently hold $1, 211 mi lion as agents for
foreign and international monetary authorities, and S.;, 553 m.'llion
account. Tenders for bills to be maintained on the
book-entry records of the Department of the Treasury should be
submitted on Form pD 5176-1 (for 13-week series) or For-. pD 5176-2
for their
own
,
(for 26-week series).
TREASURY ' S
13-, 26-,
AND
52-MEEK BILL OFFERINGS,
Page
2
Each tender must state the par amount of bills bid for,
which must be a minimum of $10, 000. Tenders over $10, 000 must
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
two decimals, e. g. , 7. 15%. Fractions may not be used.
A single
bidder, as defined in Treasury s single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
and dealers who make primary
Banking institutions
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers, if
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
position in the bills being offered
such position is in excess
of $200 million. This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction. Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
each customer whose net long position in the bill being offered
exceeds $200 million.
if
A noncompetitive
bidder may not have entered into an
agreement, nor make an agreement to purchase or sell or otherwise dispose of any noncompetitive awards of this issue being
auctioned prior to the designated closing time for receipt of
tenders.
for the full par amount of the bills applied for
tenders submitted for bills to be maintained
records of the Department of the TreasuryA cash adjustment
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined in the auction.
Payment,
must accompany all
on the book-entry
deposit need accompany tenders from incorporated banks
companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches.
No
and
8/89
trust
TREASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 3
Public announcement will be made by the Department of the
of the amount and yield range of accepted bids. Competitive bidders will be advised of the acceptance or rejection
of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g. , 99.923, and the determinations
of the Secretary of the Treasury shall be final.
Treasury
Settlement for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
funds
on the issue date, in cash or other immediately-available
or in Treasury bills maturing on that date. Cash adjustments
will be made for differences between the par value of the
maturing bills accepted in exchange and the issue price of the
new
bills.
If a bill is
purchased at issue, and is held to maturity,
the amount of discount is reportable as ordinary income on the
Federal income tax return of the owner for the year in which
Accrual-basis taxpayers, banks, and other
the bill matures.
persons designated in section 1281 of the Internal Revenue Code
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
of the Treasury Circulars, Public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtained
from any Federal Reserve Bank or Branch, or from the Bureau of
Department
the Public Debt.
8/89
Depart&ncnt
of thc Treasury
FOR IMNEf)XATg
November~90,
~
Bureau of the Public Debt
'i
Washington,
~NTAt„T:
RBLEASE
f990
AMENDED
DC 20239
0 f f ide of Financing
202/376-4350
RESULTS OP
TREASURY'S 5 YEAR 2-MONTH
of
~
NOTE AQCTIOH
November 2S, 1990, auction
is amended because the amount of
as a result of a reporting
was overstated,
The total acCepted tenders
5-yeaX' 2-lnonth Treasury notes
for the
tenders
accepted should have
error. The amount of noncompetitive tenders The
total amount
been 5555 million instead of $835 million.
accepted is reduced to $8, 762 million.
noncompetitive
oOo
NB-1 Q47
apartment
FOR
of the Treasury
I MME DI ATE
November
~
Washlnpton,
RELEASE
28, 1990
TREASURY TO ISSUE ZERO COUPON
D.C. ~ Telephone S66-204$
CONTACT:
Roger Bolton
(202) 566-8191
BOND TO VENEZUELA
The Treasury Department will issue a zero coupon bond of
approximately $7. 5 billion to the Republic of Venezuela for use
as collateral to back debt securities Venezuela will issue as
part of its recent agreement with its commercial banks.
of the Treasury zero coupon bond will be based on
of the two STRIP securities having maturity dates
nearest to the maturity of the Venezuela debt securities (March
31, 2020). That rate will be reduced by a 4. 7 basis point
accommodation fee which, measured as a percent of funds invested,
is the 30-year zero coupon bond equivalent of the 1/8% (12. 5
basis point) fee Treasury charges on 30-year special issue coupon
The price
the STRIPS rate
securities.
NB-1048
yortmeni of the Treasury o Washlniion,
TEXT AS PREPARED
EMBARGOED UNTIL
NOVEMBER
8:00
28, 1990
am
O. C. ~ Telephone $16-204
EST,
REMARKS BY THE HONORABLE JOHN ROBSON
DEPUTY SECRETARY OF THE TREASURY
NOVEMBER 28, 1990
BUDAPEST,
It is
HUNGARY
great pleasure to be back in Budapest. I visited
here last February -- just before your first free elections since
World War II -- when you were beginning to flex Hungary's new
democratic muscles.
At that time, you were also in the early
-- a transition from nearly five
another
transition
of
stages
decades of economic stagnation under a centrally controlled
economy to a free market system.
Your
Hungary has made considerable progress since then.
elections and political reforms at all levels of government have
a
been impressive.
Hungarian people
Democracy
is
being implemented,
and
the
are, once again, experiencing the challenges and
opportunities of a free society.
Progress has also been made in economic reform, and we have
already witnessed a number of important changes:
the economy.
New laws have been enacted to transform
a joint
be
a
owner,
to
private
is
legal
Today, it
All were
investor or a foreign entrepreneur.
illegal under the old government.
This
Investment of foreign capital is increasing.
includes several investments by U. S. firms such General
Electric's investment in Hungary's well-known lighting
projects by Levi
company, Tungsram, and substantial
Strauss, Schwinn, Guardian Glass, Intercooperation, and
venture
others.
And,
we' ve seen the beginning
markets.
under
way,
developed.
For example,
and
of Hungary's
capital
the Budapest Stock Exchange is
are being
securities regulations
is
These are important
much
more
one; there are
the trip will be worth
it,
for
But there
Hungary.
reform is not an easy
still ahead. In the end,
because the benefits of a free market
accomplishments
The road to economic
many bumps and detours
to do.
far outweigh the costs.
For the fact is that a free market economy simply works
better for the people and creates a higher standard of living
Let recent history be the judge.
than any other economic system.
nation with many international
was
competitive
a
In 1948, Hungary
Then, the imposition of a centrally controlled
trading partners.
economic regime led to stagnation, while her former Western
economic partners flourished in a free market.
Today, Hungary's Western neighbors prosper and per capita
annual incomes for all Western European nations are at least
twice the average income for Hungarians and other East Europeans.
It is time for Hungary to reassert its historical commercial
traditions and to, once again, become economically competitive.
It is time to establish a free market that offers opportunities
for any entrepreneurial
individuals to be rewarded for their
skill, ambition and hard work, instead of rewards based on
political favoritism.
But a free market system is neither tidy nor without risks
and hardships.
That
Free markets are fiercely competitive.
means there are winners and losers.
New jobs are created, but
people also lose their jobs. Firms prosper and grow, and firms
Fortunes can be won, but fortunes can also be lost.
go bankrupt.
And to make the successful transition
to a free market system, a
nation's people must understand and accept these realities.
economy
is not alone in
undertaking the difficult journey to
There are economic transitions taking place
elsewhere in Eastern Europe, in Latin America and in the Pacific.
This means many emerging market economies will be competing for a
limited amount of outside capital. To succeed in that
competition for capital, Hungary must transform herself into a
nation where investment will be attracted and entrepreneurial
effort will be rewarded. And the decisions and actions that
Hungary takes now will determine her ultimate place in the world
a
Hungary
free market.
economic community.
Hungary is a sovereign nation, and
nor any other country can tell you how
neither the United States
to conduct your affairs.
So, I'm not here to give orders. I can only offer my best
advice. Hungary needs foreign investors, and I' ve been involved
businesses and free markets long enough to
with multinational
have a pretty good idea of what investors look for.
Investors need clear evidence of economic strength
and
stability. They seek an economic environment where firms are
free to establish prices and wages, where they can earn and keep
a profit, and where the forces of supply and demand are permitted
to function naturally.
Hungary has taken some courageous steps
in this direction, but you will need to do more.
Investors will scrutinize a nation's fiscal policies and
inflationary trends. They will examine whether the government
provides subsidies that support artificial price levels and
nourish and protect inefficient enterprises.
To attract capital and credit, trade and investment regimes
must be liberalized.
Tariffs, quotas and other barriers to free
This is also important to your
trade should be eliminated.
consumers who will benefit from the competitive forces that help
keep prices down and quality up.
Investors will also seek markets where the privatization of
state enterprises is well along. You cannot keep vast portions of
the economy in state ownership and present yourself as a free
market
economy.
of privatization can create
political controversy. But these can
be a safety net to help those
First, there can
be ameliorated.
-- programs
to sustain unemployed
who are hurt by privatization
productive
jobs. And, devices
other
for
workers and train them
Yes, a vigorous program
confusion and
unemployment,
can be found to facilitate broad equity ownership by Hungarians.
For example, some countries are considering voucher systems to
distribute ownership to local citizens at a modest cost.
there must be
before privatization can go very far,
-that is, a
access to market-oriented capital and credit
markets.
to
capital
Hungary
access
and
private banking system
wellmust
be
a
there
has already made a start. However,
developed system to mobilize savings and channel resources to
efforts and to establish firms that are
entrepreneurial
competitive in the new market environment.
And,
new
States is already
working with Hungary to develop
American
firms are providing expert advice and
capital markets.
assistance. A mission from the Financial Services Volunteer
Corps recently made an investigative trip to Hungary, and the
Emerging Markets Advisory Committee has provided advice on
establishing employee stock ownership plans.
The United
Americans who have visited Hungary on technical assistance
have returned with one clear message: Hungary needs
and more of them.
Potential investors will be
better banks
scared off if they confront a financial system with long delays
ve heard stories of payments in
in payment and settlement.
hard currency that take as long as 45 to 60 days to get through
the financial system. That's not good enough. The efficiency of
is critical -- not only to foreign
your financial institutions
-investors
but to ordinary citizens and small businesses who
need safe, reliable and accessible banks.
missions
--
I'
to
Hungary must also create a broad legal infrastructure
accommodate a free market economy.
That means not only laws for
the privatization of property and state enterprises, but
establishing a legal structure in areas such as bankruptcy, antiand creating an
monopoly and unemployment
compensation
--
court system to decide commercial
disputes.
You can also be sure that potential
investors and trading
partners will carefully evaluate another, perhaps the most
critical element of a possible new market -- its human capital.
not
They will be looking for individuals
who are well-trained,
only in management, but also in a range of essential
disciplines -- accounting, marketing, cash management,
distribution, and many others. That is what it will take.
Are these difficult reform measures?
Yes. Are they easy to
achieve? No. But successful economic reform and Hungary's
ability to compete for capital and credit depend on it.
While economic forecasting is a somewhat uncertain science,
we can confidently
predict that economic reform will create
controversy.
Some will criticize you for going too fast.
Others
will criticize you for going too slow. Some will demand
government protection from the forces of the free market system.
Others will demand that government does not interfere with their
economic lives. And many will be reluctant to give up their
secure positions of power and privilege achieved under a
centrally controlled economy for the uncertainties of the
impartial
marketplace.
And, in the case of Hungary and other of its neighbors,
there will be events outside the country that will complicate
your economic reform programs:
economic disarray in the Soviet
Union; the escalation of world oil prices due to the Gulf Crisis;
and the breakup of the CEMA trading system.
These are
unfortunate and badly timed hardships.
But Hungary
must
summon
the political courage and resolution
to press forward with economic reforms. You cannot stay where
you are now -- partially free in a new economic regime, yet still
burdened with many of the restrictions of the old system.
That
will bring neither prosperity to the people of Hungary nor new
investors and lenders to your borders.
Let me be clear about one thing. The United States is
firmly behind your successful conversion to a free market
That's why our government is providing technical
economy.
assistance in many areas, including:
tax policy, banking
regulation and privatization.
Assistance
is
not only from our government.
And I'm
proud. to say that a number of American companies and business
groups have stepped forward to help with expert advice, technical
training and capital investment.
coming
There is also the Hungarian-American
Enterprise Fund, which
has received over 4, 000 requests for small business assistance.
In September, the Fund announced its first project -- a joint
venture to privatize a chain of office
Hungarian-American
automation stores, and has since made investment or loan
commitments
for food processing, printing and music recording
businesses.
The U. S. has committed $60 million to support the
Fund.
The U, S. Government is also working with the International
financial
Monetary Fund, the World Bank and other international
and
all
of
Eastern
Last
Europe.
Hungary
institutions to help
we
have
that
asked
the
IMF
for
month, president Bush announced
increased lending to the region by as much as $5 billion, and the
has
World Bank to accelerate the $9 billion of lending
Eastern
and
Central
Europe.
in
sector
committed for the energy
it
The American people have a deep admiration for Hungarians.
For half a century, we have been on the outside looking in-Now we
unable to help Hungary out of its economic stagnation.
see the prospect for economic growth and prosperity, and we want
And we are doing what we can to facilitate your
you to succeed.
transition to a market economy that works for all Hungarians.
Our goal is to help you improve your standard of living, by
establishing
competitive.
a market economy that
is internationally
Last month, the United States was honored by the visit of
Prime Minister Antall.
He received a real American welcome in
Washington, and President Bush heralded Hungary for reclaiming
"its natural
place as a valued member of the commonwealth of free
"
nations.
self-determination
is a reality in Hungary.
Political success and future economic growth are in the hands of
the Hungarian people.
Today,
luck to
all of
you involved in these tremendous reform
efforts. We are confident that Hungary will succeed in building
a thriving free market, and we look forward to working with you
in attaining our mutual goals.
Good
Thank you.
P vsLI
Department
of the Treasury
FOR IMMEDIATE
~
Bureau of the Public Debt
RELEASE
tg
28, 1990
November
E
DEBT
g
~
ll'ashington.
J OWACT:
RESULTS OF TREASURY'S AUCTION
DC '20239
Of f ice
GF- 5-YEAR,
of Financing
202-376-4350
2-MONTH
NOTES
for $9, 041 million of 5-year, 2-month notes,
Series J-1996, to be issued on December 3, 1990 and mature on
February 15, 1996 were accepted today (CUSIP: 912827ZQ8).
The interest rate on the notes will be 7 7/8%. The range
of accepted bids and corresponding prices are as follows:
Price
Yield
99. 710
7. 93%
Low
99. 626
7. 95%
High
7. 95%
99. 626
Average
$35, 000 was accepted at lower yields.
Tenders at the high yield were allotted 76%.
Tenders
TENDERS RECEIVED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
AND
ACCEPTED
Received
30, 441
20, 705. 508
20, 730
30, 628
38, 017
18, 187
(in thousands)
30, 441
292
214,
8,
20, 730
30, 628
31, 657
17, 947
25, 432
260, 123
20, 842
283 289
$22, 986, 746
283 269
$9, 041, 335
1, 301, 653
10, 253
21, 943
7, 425
493, 240
10. 253
21, 938
7, 425
91, 790
$835
$9, 041 million of accepted tenders206 includes
million
of
million of noncompetitive tenders and $8,
competitive tenders from the public.
In addition, $265 million of tenders was also awarded
Banks as agents for
at the average price to Federal Reserve
foreign and international monetary authorities.
The
NB-1
Ocj,
9
WASHINGTON,
D. C.
20220
,
FOR
IMMEDIATE
RELEASE
FEDERAL FINANCING
. 0 . 0=LI
.
2~. 1~~0
November
BANK
ACTIVITY
Charles D. Haworth, Secretary, Federal Financing Bank
(FFB), announced the following activity for the month o:
October 1990.
issued, sold o guaranteed
FFB holdings of obligations
on
by other Federal agencies totaled $180. 5 billion
bil'io-.
:rom
October 31, 1990, posting an increase of $7. 2
the level on September 30, 1990. This net change was the
loans
result of a decrease in holdings of agency-guaranteed
increased
debt
of $7. 1 million, while holding of agency assets increased
by $6, 952. 0 million and holdings of agency
during October.
FFB made 45 disbursements
by $274. 8 million.
redee. '.
On October 30, the Tennessee Valley Authority
$150 million principal amount of 12. 095 percent Po;. er
Bonds, 1985 Series B.
."
FFB holdings on October 31, 1990, ;;ere the highe
in the bank's history.
FFB
Attached to this release are tables presenting
o" October 31, 1 "r rO.
October loan activity and FFB holding s as
,
'JB-1050
Page 2
FEDERAL FINANCING
OCIOBER
1990
4
BANK
ACTIVITY
AMOUNT
OF ADVANCE
FINAL
MAIURITY
INTEREST
INTEREST
RATE
RATE
(semi-
(other than
semi-annual)
annual)
DEPI'
AGENCY
CREDIT UNION AIMINISTRATION
NATIONAL
Central Li
Note
Note
+Note
+Note
Note
of
Facili
idi
¹526
¹528
¹529
¹530
10/1
10/3
10/5
10/26
10/29
¹531
$
10, 000, 000. 00
15, 000, 000. 00
9, 600, 000. 00
5p
10
000/ 000 00
OOOI 000 00
11/27/90
12/3/90
1/3/91
11/26/90
11/28/90
7. 590%
7. 539'o
7. 485'o
7. 538'o
7. 481'o
1/2/91
1/2/91
1/2/91
1/2/91
1/2/91
7. 506%
7. 385~o
7. 607%
7.571%
7. 481%
7. 590'o
7. 485'o
7. 475~o
7. 611%
7. 481&o
7. 500&
8. 984 o
RESOIIJTION TRUST CORK)RATION
Note No. 90-06
¹1
Advance
Advance
Advance
Advance
Advance
10/22
10/25
10/29
¹5
Short-term
Short-term
Short-term
Short-term
Short-term
Short-term
AGENCY
10/1
10/9
¹2
¹3
¹4
Bond
Bond
Bond
Bond
Bond
Bond
¹55
¹56
¹57
¹58
¹59
¹60
45~790JOOOIOOO
00
573, 000, 000. 00
400, 000, 000. 00
1, 050, 000, 000. 00
350, 000, 000. 00
10/8
10/15
10/22
10/30
193, 000, 000. 00
211, 000, 000. 00
207, 000, 000. 00
188, 000, 000. 00385, 000, 000. 00
10/31
62 ~ 000 ~ 000 00
10/8/90
10/15/90
10/22/90
10/30/90
11/6/90
11/6/90
10/1
275 000& 000 00
10/1/05
10/1
ASSETS
FARMER'
S
HOME
RHIF — CBO
+rollover
AEMINISTRATION
¹57547
9. 186 o
ann
~
Page 3
FEDERAL FINANCIM
OCIOBER
BANK
1990 ACI'IVI'
ZmmZm
AmXVr
OF ADVANCE
MKIURITY
CS
annual)
(other than
semi-annual)
10/1/91
7. 815t
7. 968%
8. 185%
8. 186%
8. 183%
8. 185%
8. 186%
8. 962t
8.979%
8. 979%
8. 979%
8. 994%
9.001%
8. 103% qtr.
8. 104% qtr.
8. 101% qtr.
8. 103% qtr.
8. 104% qtr.
8. 864% qtr.
8. 880% qtr.
8. 880% qtr.
8. 880% qtr.
8. 895'4 qtr.
8. 902% qtr.
8. 902% qtr.
8. 908% qtr.
8. 908% qtr.
8. 9084 qtr.
8. 0994 qtr.
8. 099% qtr.
8. 104% qtr.
8. 103% qtr.
8. 104'4 g. r.
8. 109% qtr.
8. 829t qtr.
8. 915% qtr.
8. 794t qtr.
8. 877% qtr.
8. 789% qtr.
AND SPACE AENZNISIRATION
ce Ccnaunications
Co.
10/1 $ 1, 141, 785, 960. 57
Electric
Electric
4175A
4304
*Associated Power 4328
*Basin Electric 487A
*Cajun Electric 4197A
*Allegheny
*Allegheny
*Coloradc&3te
*Colorado-Ute
*Colorad~te
*Colorado-Ute
*Colorado-Ute
*Colorado-Ute
*Colorado-Ute
*Colorado-Ute
*Colorado-Ute
*Colorado-Ute
*KAM3
*KAN3
*New
Electric
Electric
Kmpshire
Wld Daninion
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
48A
478A
478A
478A
496A
N203A
0276
4297
4297
1297
4209A
4209A
Electric 4270
Electric 4267
~.
~
*Sho-Me Power 4324
~i-State Electric
*United Power
4250
N86A
Valley Power 4206
4206
Valley
*United Power Assoc. 4212A
*Wabash
*Wabash
Western
Illinois
Power 4294
Note A-90-14
~turity
mCension
mr ERE:~W
RATE
(semi-
ONAL
of
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/1
10/3
10/15
10/30
3, 642, 527. 44
237, 217.84
7, 658, 181.80
18, 171,428. 64
18, 131,979. 70
7, 083, 853. 20
2, 275, 659. 36
949, 703. 50
2, 941, 025. 68
2, 931, 230. 80
7, 216, 276. 56
1, 599, 313.12
6, 090, 570. 80
3, 915,965. 84
1, 225, 195.18
3, 686, 000. 00
6, 145, 000. 00
383, 890.71
2, 293, 333.36
629, 687. 48
5, 000, 000. 00
1, 141, 363. 59
295, 000. 00
186, 000. 00
306, 000. 00
1, 116,000. 00
12/31/92
12/31/92
12/31/92
12/3 1/92
12/31/92
1/3/12
12/31/13
12/31/13
12/31/13
12/3 1/15
1/3/17
1/3/17
1/2/18
1/2/18
1/2/18
12/31/92
12/31/92
12/31/92
12/31/92
12/31/92
12/31/92
12/31/13
12/3 1/18
12/3 1/19
1/2/18
8. 186%
8. 185%
8. 186%
8. 191%
8. 926%
9.014%
8. 891%
8. 976%
8. 886%
10/31
636, 246, 431.65
1/31/91
7. 512%
12/31!18
9.001%
9.007%
9.007%
9.007\
8. 181\
8. 181%
ann.
Page
FEDERAL FINANCING
(in millions)
October 31
Procrram
Agency Debt:
Export-Import
NCUA-Central
Bank
Liquidity Facility
Resolution Trust Corporation
Tennessee Valley Authority
U. S. Postal Service
$
sub-total*
Agency Assets:
Farmers
Home
Administration
Org.
Rural
Small Business Administration
Admin. -CBO
sub-total*
Government-Guaranteed
Loans:
DOD-Foreign Military Sales
DEd. -Student Loan Marketing Assn.
DHUD-Community
Dev. Block Grant
DHUD-Public Housing Notes +
+
General Services Administration
DOI-Guam Power Authority
DOI-Virgin Islands
NASA-Space Communications
Co. +
DON-Shxp Lease Financinq
Rural Electrification Administration
,", BA-Small
Business Investment Cos.
BA-State/Local Development Cos.
VA-Seven States Energy Corp.
I"'OT-Section 511
',
.
,
.
'
I
OT-WMATA
sub-total*
grand total*
1gures
may
no
does not include
$
to a ue to roun dna
capitalized interest
11,339.8
87. 3
48, 163.0
$
Net Chan e
1990 10 1 90- 0 31
11, 339.8
56. 6
41, 481. 7
of
$
'91
FY
10
9
-10
-0-
-0-
30. 7
6, 681. 3
240. 0
-0-
30. 7
6, 681.3
6, 952. 0
6, 952. 0
-0-0-0-
275.
-0-0
240.
-0-0
14, 382. 0
6, 697. 8
73, 957. 9
52, 324. 0
52, 049. 0
275 0
4, 407. 2
8. 2
56, 891.7
4, 407. 2
8. 4
-0. 2
-0. 2
56, 616.9
274. 8
274. 8
9, 747. 3
4, 880. 0
241. 0
1, 950. 8
367. 3
29. 7
25. 3
1, 203. 2
1, 672. 4
18, 965. 8
354. 6
738. 5
2, 360. 4
23. 3
177. 0
42, 736. 6
180, 538. 2
9, 755. 6
4, 880. 0
244. 0
1, 950. 8
367. 3
29. 7
25. 3
1, 095. 9
1, 672. 4
19, 042. 3
382. 5
741. 6
2, 356. 0
23. 3
177. 0
42, 743. 7
173, 318. 5
-8.
-0-3
-3.
-0-0
-8.
-0-3
-3.
-0-0
69. 6
82. 7
$
4
Net Chan e
14, 622. 0
6, 697. 8
80, 909. 9
69. 6
82. 7
DHHS-Health Maintenance
DHHS-Medical Facilities
Electrification
1990 Se tember 30
4
BANK HOLDINGS
~
-0-0-
-0-0-0107.
-0-3
-76. 5
-28. 0
-0-0-0107.
-0-3
-76. 5
-28. 0
4.
-0-4
4.
-0-4
-0-
-3. 0
-3. 0
-0-7
$7, 2'19.
-7. 1
1
7
$
7, 219.7
~
partment of Che Treeaury
I
~ WeshlnyCon
on, D.
0 C.
C ~
Telephone 58$-204&
REMMO(S BY
JAMES H. FALL,
DEPUTY ASSISTANT SECRETARY
FOR DEVELOPING NATIONS
U.
DEPARTMENT OF THE TREASURY
BEFORE THE
— ROC BUSINESS CONFERENCE
U.
TAIPEI WORLD TRADE CENTER
III
S.
S.
TAIPEI,
November
speak
It is
a pleasure and a
a distinguished
to this
and
to
have the opportunity
to
The relationship
between
an important one as we look to
Department are pleased to play a
privilege
audience.
the United States is
We at the Treasury
the future.
role in this relationship.
Taiwan
TAIWAN
15, 1990
It is also a special honor to participate in the annual
meetings of the Business Conference.
The respective Economic
Councils do an outstanding job in organizing the conference and
in providing an important forum for dialogue on financial,
economic, and commercial issues between Taiwan and the United
States.
deputate in the Treasury Department covers developing
in Latin America, Africa, and Asia. Many of you may be
amazed, as I have been, that Taiwan is included in this area of
responsibility, particularly in view of the fact that on a per
capita income base, Taiwan has surpassed several economies
notably in Europe -- that are generally categorized as
It is certainly a somewhat misleading
industrialized countries.
statement on Taiwan's economic status and the global role this
and finance.
country is playing in trading, manufacturing,
My
nations
This is my first visit to Taiwan. Although I am familiar
I am still struck by experiencing first
with Taiwan's reputation,
If the volume of
hand the vitality of its economy and society.
traffic is the standard by which to measure economic well being,
then Taiwan surely has one of the world's healthiest economies.
It
that the often mentioned "Taiwan miracle" of
economic growth, is really not a miracle at
strong
all. There is nothing miraculous about the result of hard work.
The people of Taiwan certainly are among the hardest working and
They are also among the world's most
most diligent in the world.
gracious people, as the American guests at this conference well
to see that the benefits from this hard
know
It is gratifying back
to the people of Taiwan.
work have begun to flow
The story of Taiwan's success is often told and certainly
At a time when some governments
well known to this audience.
--. ---. ol over their economies and financing
seems to me
and sustained
,
inefficient money-losing and subsidy dependent state enterprises,
the government of Taiwan was by contrast primarily tightly
controlling public expenditures and giving entrepreneurs free
rein.
in the past received a
As important as this additional
financing is or has been to a developing economy, such assistance
can only be effective over time when blended with sound
Taiwan serves as
underlying policies of the recipient economy.
the textbook example of how to conduct an aid program, while
other countries are forever being studied under the category of
Along with other economies,
significant amount of U. S. aid.
"what went wrong.
Taiwan
"
As a result of Taiwan's economic policies, average annual
economic growth has been one of the world's highest over the last
30 years.
At the same time, average annual inflation has been
among the lowest in the world.
Today, this economy's per capita
income is one of the highest in Asia. Official foreign exchange
reserves are
among
the largest in the world.
Yet, it appears fashionable in Taiwan to question the
longevity of this prosperity.
awhile there is merit in a degree
of introspection as the economic climate cools, any doubt about
the underlying economic strength of the Taiwanese economy seems a
bit misplaced.
I must say, most observers find curiosity in stories from
Taiwan about the difficulties wrought by a plummeting
of growth
from double digits in 1987 to 7 percent in 1988 and 1989. The
is true for the current official
downward revisions of
this year from 7 percent to 4 percent. There were
stories in the Taipei press that characterized the
current rate of growth as a "recession. " This definition of
recession is striking considering that it would likely be the
highest rate of growth for any of the G-7 this year.
Through the years of tremendous growth, Taiwan, like all
economies, has been buffeted by economic downturns and by oil
price fluctuations.
It is notable that in Taiwan, these
downturns have been both more intense and more brief than in most
other economies. There is no reason to believe that the decline
in growth this year will be of a different nature.
Indeed, it
can be reasonably argued that the economy needs a cooling down
period. In addition, current levels of growth are more
same
growth for
even recent
sustainable
than those which Taiwan has become accustomed to.
it a resurgence in the
levels will also not bring with
assorted problems of excess liquidity,
Such
particularly
inflation.
Taiwan's economic success is not fading.
One should not
confuse the current economic slowdown with a diminution of its
success. More accurately, the experience is that of a maturing
In fact, many of the certain problems faced by Taiwan
today are the result of Taiwan's success -- that is, the large
pool of money generated by years of sizable external trade
At its height in 1987, Taiwan's global trade surplus
surpluses.
20 percent ofJ*p13$81ihsnational product,
was equal to more than
This year, it is unlikely that
compared to 4 percent for Japan.
this ratio will fall below eight percent. This sizable pool of
money, in turn, is compounded by the lack of diverse investment
economy.
outlets.
Such difficulties have manifested themselves in the
overheating of the stock market, an unprecedented build up in
foreign exchange reserves, inflationary pressures, and rising
property values to name the most visible. However, just as
property prices, stock market values, and the production of lower
value-added goods reached unsustainably
high levels and have
fallen, so they will begin to level out. The control of
environmental
pollution has also taken on a sense of urgency and
is beginning to be addressed. Moreover, given Taiwan's record of
achievement, there is solid reason to be confident in its future.
At the same time, future economic success is by no means
will necessitate
The path is still a difficult one.
continued hard work and a further opening of the economy,
especially in the external trade and financial sectors. These
factors have been realized by other economies, particularly in
Asia. The relaxation of trade barriers and a market-oriented
It
assured.
rate policy should help lower the excessive external
of the
and internationalization
The liberalization
surpluses.
should
controls
help
of
capital
financial sector and relaxation
to address the lack of investment outlets.
exchange
The Next
Sta e
The most important
next?" Moreover, what
relations.
question
will this
for Taiwan's economy is, "what
for U. S. -Taiwan economic
mean
omestic Econom
change has taken place in Taiwan over the last
couple of years as growth has come mainly from the domestic
This mirrors similar changes in
economy instead of from exports.
Japan and Korea. As in the past, however There are areas of the
In
domestic economy that need to be given more attention.
infrastructure
particular, these include a revival of the major
projects and more social spending on education, health services,
protection. The privatization of the
housing, and environmental
A
remarkable
efficiency into
state enterprises also would introduce moreopportunities.
these sectors and broaden domestic investment
Taiwan has already taken some decisive steps in these areas, much
to the credit of current policy makers. Ensuring the completion
few
of these initiatives should go a long
in the domestic economy.
improvement
way toward
further
Trade Liberalization
relied heavily on exports to an open U. S. market
and has, hence, accumulated a large trade surplus with the United
States. It, therefore, stands to reason that the main outside
catalyst for liberalizing Taiwan's domestic market has come from
the United States.
As Taiwan continues to diversify its exports, it will also
come under increasing pressure from other economies to liberalize
its trading practices. Indeed, some of this pressure has already
Taiwan has
materialized.
The sizable external surpluses that Taiwan has enjoyed
confers an obligation on it to assume greater responsibility for
contributing to the reduction of the world's external imbalances
and promoting a sturdy and expanding world economy.
The extent
to which Taiwan takes action in this regard, will also strengthen
its own economy. Taiwan has an undeniable stake in resolving
this problem.
The reduction in Taiwan's external surpluses so
year is an improvement over last year' s performance.
prospect of a continuing downward trend is not clear,
While we remain optimistic, the size of the external
remains a concern.
Exchan e Rate
far this
The
however.
surplus
Polic
Taiwan has made significant progress in the area of exchange
rate appreciation and allowing its rate to be more marketdetermined.
This appreciation has played an important role in
reducing external imbalances, and this correction is a welcome
development.
However, the adjustment process must continue and
exchange rate appreciation must continue to play a role in this
process. Limitations on capital flows, particularly capital
inflows, and on foreign exchange transactions, remain restrictive
and impede the full operation of market forces in exchange rate
determination.
The United States will be following developments
in this area closely and we hope that the Taiwanese authorities
will do the same.
I
still fears being voiced by some in
about the effect of NT dollar appreciation -- although
there has been no significant appreciation in almost two years
and about the positive aspects of a depreciation of the NT
dollar. Taiwan's economy is still on a strong footing, however.
Moreover, the major factors influencing the rising cost of
production over the past couple of years has not been exchange
Taiwan
have heard there are
rate appreciation, but the considerable rises in wages and
Depreciation of the exchange rate would only
property values.
serve to worsen inflationary pressures at this point. Given
Taiwan's need for imported machinery and raw materials for
production, as well as the fact that it pays for oil in U. S.
dollars, inflation would rise if the NT dollar were devalued.
benefit to exporters from devaluation would likely
Any potential
be negated by this increase in the price of production inputs.
fact, appreciation
has strengthened the prospects for the
economy's sustained growth by encouraging a better balance
between production for export and for the domestic market.
The
strengthened NT dollar has also hastened the production of higher
quality goods. In this respect, it is important to bear in mind
that Taiwan has come under increasing pressure from less
developed economies in Asia in the production of lower valueadded goods.
This is no different than the situation faced most
recently by Japan, and before that by the United States, and by
Great Britain prior to that.
In
nternationalization
of the Financial
Sector
has been said about Taiwan's stated goal of becoming a
regional financial center. As a matter of fact, just last week,
the Finance Minister was quoted as saying that Taiwan can become
one of the financial centers of Asia soon. To achieve this goal
and to assure that Taiwan's economy picks up its stride, better
I
developed banking and capital markets will be a necessity.
The
have no doubt that Taiwan can achieve its goals.
There are
difficulties, however, should not be underestimated.
other economies in Asia with similar ambitions and a willingness
to quicken the pace of financial market liberalization and
expansion.
Much
Taiwan's financial sector now faces are not
particularly unique. Although of small consolation, the
financial sectors in the United States and Japan are experiencing
Irrespective of the stock market fall,
some dislocation as well.
the problems in Taiwan's financial markets are virtually
both
unchanged from a year ago. There still exist simultaneously
and an
a narrow range of regulated investment opportunities
abundance of investment companies willing to offer unreliable
advice on both regulated and underground investments.
there is little protection for the individual
Consequently,
The problems
investor.
Reliable investment opportunities could
reputable foreign banks and securities firms
This would
treatment as local institutions.
not know
do
I
the entire financial system.
center that is not, for the most part, open
In Asia, for instance,
outside competition.
be expanded if
were given the same
raise the quality of
of a financial
to internal and
the continued
strength of Hong Kong as a regional center is due primarily to
the equal freedom with which local and foreign financial
institutions are able to conduct business. This does not imply
It does mean
that there is less need for prudent regulation.
that these regulations should be applied evenly and provide
opportunity for all.
in the United States find it unfair that we are
willing, and are expected by other economies, to allow open
access to our markets while these same economies do not permit us
to have equal access to their markets, particularly in products
and services in which we have a competitive advantage.
Many
Financial services are a prime example of this imbalance.
In the past year, a number of banks from Taiwan have sought and
received U. S. government approval to open offices in the United
States on an equal footing with U. S. banks. There were no
The same
roadblocks or unnecessary delays in their applications.
cannot, unfortunately,
be said for U. S. financial institutions
wishing to expand in Taiwan and to be given equality of
competitive opportunity with local Taiwan banks. Such a
situation, were it reversed, would rightly be seen as unfair by
the people of Taiwan. No doubt they would express their
displeasure to their legislators, who run the risk of not being
returned to office in the next election if they are inattentive
to their constituents.
All the same, the Treasury Department correctly argues that
financial markets are most efficient when they are open to
outside competition.
We have, however,
come under considerable
pressure from Congress and the public to alter this position.
Indeed, there is currently broad support in Congress for
legislation that would require the Treasury to enter into
negotiations with economies deemed to maintain unfair trade
practices that restrain the operations and growth of U. S.
financial institutions.
Such legislation would undoubtedly
apply
to Taiwan given its current policies.
Relations with Less Develo ed Economies
Taiwan has made a significant contribution to furthering
economic development of less developed countries with the
implementation
of its International Economic Cooperation Fund.
Many of these countries look admiringly
to Taiwan not just as a
source of financial assistance, but also as a source of
experience. Many sincerely want to learn from Taiwan, with the
hope of repeating some of the success that it has enjoyed.
It is understandable that the people of Taiwan should be
concerned that its hard earned funds be transferred only to those
economies which are seriously implementing the same types of
policies that
Taiwan
instituted.
Happily
there are an increasing
number of examples of these economies, particularly
in Central
These countries deserve our assistance, both
and South America.
technically and financially.
faced by poorer countries are not only longterm in nature.
There are also more immediate problems.
Foremost among these is a heavy overhang of external debt. The
debt problem is very relevant to all of us. The debt burden for
is large enough to cloud hope of a return
many of these countries
The problems
to solid rates of economic growth. Without a resumption of
growth, we cannot reasonably expect these countries to play
active role in world trade nor to continue their hard-fought
progress toward political
an
pluralism.
To its credit, Taiwan has recognized the seriousness of this
issue and has played an important role in helping address the
This
debt burdens of a number of Central American economies.
assistance has not gone unnoticed by the developing countries of
the world nor by the industrial economies that have also played a
role in helping to assure a brighter future for these economies.
The people
and
experience
of
Taiwan
should
be proud
at sharing their
finances with lesser developed
economies.
Conclusion
I
like to conclude with two thoughts about the
economic relationship between Taiwan and the United States and
the consequences of Taiwan's economic success.
First, there are many areas where the economic interests of
There are still a number
the United States and Taiwan converge.
relationships which must
and
economic
trading
of problems in our
With continued cooperation these problems will be
be addressed.
It is,
resolved in a way that meets our mutual interests.
and
meet
our
challenges
to
lay the
forward
crucial that we move
for future economic progress within the overall
groundwork
framework that has meant so much to both economies through the
years.
Finally, I think it is helpful to bear in mind that success
A
is a mixed blessing. With prosperity comes responsibility.
one's
at
interest
own
best
responsibility to act not just with
heart, but to help ensure a climate worldwide that will foster
To assure that we
the further advance of economic wellbeing.
must
accept both the
succeed in reaching this goal we
responsibility and the obligation to do so.
begun to assume more responsibility.
Taiwan has undoubtedly
policy
make fundamental
It has exhibited a willingness itsto future
to be a
destined
is
reasons,
For these
changes.
well.
it
wish
bright one and we on the U. S. delegation
would
~~~a~~
o~ the Tteeaury
~
I
Nostllnaionon, O.
O C.
C
REMARKS
BY
~
Telephone $86-204
III
JAMES H. FALL,
DEPUTY ASSISTANT SECRETARY
FOR DEVELOPING NATIONS
U.
DEPARTMENT OF THE M&ASURY
BEFORE THE
S.
U. S.
— ROC BUSINESS CONFERENCE
TAIPEI
WORLD TRADE CENTER
TAIWAN
TAIPEI,
November
16, 1990
I am pleased to have this opportunity to speak to you on
of the important economic and financial issues the United
States and Taiwan face in our bilateral relationships.
This
discussion group provides a welcome forum for exploring the
expanding commercial and financial links between our two
countries.
In order to foster these ties, it is necessary that
we recognize both our achievements
and the problems that may
some
cloud those achievements.
bilateral economic issues have largely been conducted in
of cooperation.
Indeed, the close economic relationship
between us calls for such cooperation.
Problems will naturally
appear as a result of the broad scope of our economic relations.
The crucial challenge is to identify potential problem areas
The
a manner
quickly and resolve them with a view toward ensuring the future
strength of our solid relationship and of our economies.
Since last year's conference,
Taiwan has taken a number of
important steps. These measures have broadly included the
restructuring of the domestic economy, the further opening of the
trading system, the relaxation of exchange rate and capital
controls, and the liberalization of the financial market. Now we
of these
must focus on the timely and equitable implementation
measures.
In our discussion today I will focus mostly on the
continuing need for Taiwan to take decisive actions to liberalize
its financial sector. The lack of such
internationalize
action will have the real effect of limiting the restructuring
I will also review the state of play
and growth of the economy.
from our perspective in other areas of the economy that are
relevant to economic liberalization.
and
conomic
Sit ation
Taiwan's outstanding economic performance and the policies
underlying this performance are widely recognized and admired.
Over the last two decades real GNP growth on an annual basis has
At the same time, the Central
averaged roughly nine percent.
Bank has kept a tight lid on inflation, which has averaged
eercent during the same period. These two
indicators
in association
are most impressive.
Considerable time and energy at the Treasury Department is
spent on the various aspects of economics and finance for Latin
Generally speaking, there have been periods of growth
America.
Those periods,
that have been about as high as Taiwan's.
however, have been far more abbreviated and less consistent.
it is often accompanied or followed by agonizing
Unfortunately,
There are signs that this is changing.
bouts of inflation.
Nonetheless, countries in the region have some way to go to reach
the policy balance achieved in Taiwan. Offhand, it is difficult
to think of any economy, except for a smaller one like Singapore,
that has managed to balance strong growth with low inflation so
well over this same period.
is both a major trading force and a net creditor.
account surplus was $1.4 billion last year, still one
of the largest in the world. Current foreign exchange reserves
of close to $70 billion are among the largest in the world. This
is an indication of the strength of Taiwan s economy, but it is
also a point of vulnerability.
Resistance to change based on
being a small, island economy or fear that the very survival of
the economy is forever at stake are no longer credible among
Taiwan's trading partners.
Taiwan
Its current
It is
undeniable that the short-term economic trend has
worries in Taiwan, as it has for almost all economies.
Economic forecastors generally assure this attitude irrespective
of economic trends. Even so, as far as we can presently see, the
economic slowdown will not be as pronounced as those most
associated with the oil shocks of the 1970s. Indeed, as
officially projected, growth in Taiwan may turn out to be in the
very respectable range of four percent this year. While this is
a notable decline from the seven percent growth projected
originally for this year and the double digit growth of two years
ago, it is solid growth and well above what is anticipated for
most economies, large and small.
generated
A
crucial factor for
Taiwan
other
export-dependent
is the economic performance of the
United States over
the near-term.
On the positive side, an agreement
on our budget
for the current fiscal year and for substantial savings
for the
economies,
and
next five years have been achieved.
faced, however,
reality of a moderation of growthmay inbe the
near term.
It zs open to question how this moderation in U. S. growth
will effect Taiw
iwan. Much will depend on how successful Taiwan
has been at libe
iberalizing its own economy and diversifying
its
external trade. Ther
There is cause to be optimistic on this account,
but Taiwan is still likely to be affected
due
to its continued over-reliance on exports I disproportionately
part'
icu
l
ar
l
t
o
th
e
y
United States.
with the
We
Taiwan's ongoing reliance on the open U. S. market for its
exports and its large trade surplus with the United States have
focused the attention of U. S. policy makers on Taiwan's economic
practices. It has also prompted some of Taiwan's policy makers
to question the wisdom of such a reliance.
As a portion of GNP,
Taiwan's 1988 exports to the United States amounted to nearly 18
percent. Taiwan's trade surplus with the United States in 1989
was 86 percent of its total trade surplus.
This represented a
reduction from the 96 percent ratio from the year before. This
year, again, our bilateral imbalance with Taiwan will likely be
second only to our deficit with Japan.
is, consequently, the probability that Taiwan will
in the forefront of pressure from the public and Congress
to ensure that our major trading partners compete with us on a
level playing field. This is not to say that Taiwan's efforts
have not been appreciated.
In fact, they have impressed many
U. S. legislators and policy makers.
For its part, the
Administration
is still solidly committed to the principle of
free trade. We can only be successful in so far as trading
partners, like Taiwan, are willing to swiftly lower their
There
remain
barriers to open trade
The major industrial
nations have a clear responsibility for
reducing imbalances and maintaining a liberal world trading
regime.
They recognize that much of their prosperity is owed to
the opening of world trade and financial flows following the
Second World War. Economic policy coordination has been
The U. S. appreciates the
strengthened among these countries.
Both the fiscal and trade
need for further action on our part.
deficits continue to be reduced in nominal terms, as well as in
proportion to GNp. Further reductions are clearly needed,
however.
economies of Asia,
the newly industrializing
to
responsibility
significant
also have a
imbalances.
In
contribute to an orderly reduction of global
recent years, the willingness of these economies to do so has
increased.
It is essential that this willingness show continued
progress in firm action.
There is concern that some of the Asian economies may tire
This concern is heightened by the fact
of such an obligation.
the
that, relative to the major industrialized countries,
For example, the
adjustment of the NIEs' imbalances is lagging.
the first eight
in
deficit
trade
decline in the U. S. merchandise
the
33 percent or
months of this year is primarily the result of
industrialized
$12. 3 billion fall in our deficit with other
NIEs on the
Asian
four
the
countries. The trade deficit with
other hand, has fallen by
15 percent or $2. 3 billion so far this year. Our trade deficit
In addition,
including Taiwan,
with Taiwan has proportionately
13 percent or $1.2 billion.
declined by even less, that
is
ol'cies for the 1990s
As I noted, Taiwan has taken measures to try to deal with
trade surplus with the United States and
both its unsustainable
the related issue of the structural imbalance in its domestic
At the same time, there is still a need for further
economy.
action by Taiwan in specific areas to enhance our bilateral
relationship
the 1990s.
1
~
and
to put Taiwan's
economy
on
stronger
footing for
Domestic Economic Activit
an imbalance between U. S. savings and
investment so is there an imbalance in many East Asian economies,
including Taiwan.
In their case, however,
is an excess of
Just as there is
savings
As
it
over investment.
the U. S. makes further
account and
progress
fiscal deficits, savings
in reducing
its
current
and investment will likely
as the main engine of U. S. growth.
Such a
replace consumption
development could produce serious new realities for the Asian
economies, including Taiwan s. With a bit of simplification,
can foresee two scenarios.
I
first scenario would be one in which economies with
surpluses took little or no action to stimulate domestic
demand and reduce barriers to trade.
These economies would
likely suffer a reduction in growth given the reliance of exportoriented strategies on the U. S. market and on the less open
nature of other potential trading partners.
The
external
Moreover, such a lack of action would frustrate the chance
a process of synergistic economic development
in Asia,
whereby lesser developed economies would become wealthier by
for
exporting the lower value-added goods formerly produced in the
surplus economies.
This would, in turn, allow economies such as
Taiwan to be able to sell higher value-added goods and machinery
to the lesser developed economies.
The second scenario would be one in which economies with
substantial surpluses take measures to encourage
demand by
raising investment in relation to savings, increasing
spending on
social services and infrastructure, liberalizing the financial
sector and foreign exchange controls, and reducing restraints to
trade. This, of course, would seem the wisest policy direction
to pursue.
However, it is by no means assured, given the
possible influence of those with
'
'n eres s against
vested interests
t suchh
changes.
2.
Trade and Investment
In the area of trade liberalization,
the commitment in the
to a schedule of tariff cuts is most welcome.
The steps taken to improve intellectual
property protection also
will be helpful in Taiwan's relations with its trading partners
and in attracting investors.
A number
of problems remain for
access by certain imports, particularly agricultural goods, and
the enforcement of intellectual property rights. We are hopeful,
however, that these can be resolved in a spirit of cooperation.
Trade Action Plan
Besides specific actions, genuine trade liberalization
requires changing attitudes toward foreign competitors.
One of
the crucial ingredients in Taiwan's success has been its
receptiveness toward foreign investment.
enjoys significant amounts of U. S. investment and a
has a long-standing
policy of welcoming this investment.
U. S.
investment in Taiwan totalled $1.9 billion last year. This
Taiwan
investment may slow somewhat with any slowing in economic growth
in the United States, but should likely continue to be a major
force in the economy's shift to higher value-added production.
Until recently, this open attitude toward investment was
absent with respect to competition by foreign goods and services
in the domestic market.
We appreciate,
however, the sincere
efforts taken by Taiwan in welcoming products and commercial
representatives from the United States. The UPS. Government is
also making an effort to encourage sales to Taiwan.
Some observers maintain that U. S. businesses have not taken
full advantage of opportunities open to them in Taiwan. There is
admittedly some truth in this. It is also important to recognize
that many American companies that have wanted to sell to Taiwan
It will take
in the past have experienced numerous obstacles.
convince
American
to
experiences
time and a number of positive
the
from
growing
companies that the welcome mat is out. Judging
interest of American companies in this conference, it is apparent
that the message is getting through.
3.
Exchan e Rate Liberalization
countries have frequently requested Taiwan and the
other Asian NIEs to take greater responsibility for maintaining a
free trading system by permitting their currencies to reflect
fully the strength of their economies. Moreover, the U. S.
Treasury has been instructed by the Congress to report
periodically on economies deemed to manipulate their exchange
In past reports, we have
rates for competitive advantage.
its currency
concluded that Taiwan, along with Korea, manipulated
our
In
April
Bill.
Trade
Omnibus
within the meaning of the
are
no clear
there
that
report, however, it was our assessment
The G-7
that Taiwan's exchange rate is currently being
This conclusion was strengthened by the
manipulated.
authorities' willingness to allow the exchange rate to appreciate
of the
in late 1988 and early 1989 and the ongoing liberalization
exchange rate system.
Our major purpose in pressing Taiwan to appreciate its
indications
currency and permit its exchange rate to be
undervalued
determined by market forces was to facilitate the adjustment of
Some progress has been made in this
world trade imbalances.
area, and the correction that has taken place is most welcome.
However, the adjustment needs to continue and exchange rate
appreciation must continue to play a role in the process.
Limitations on capital flows, particularly capital inflows, and
remain restrictive and impede
on foreign exchange transactions,
the full operation of market forces in exchange rate
The United States will be monitoring the
determination.
situation carefully, and we hope that the Taiwanese authorities
will do the same.
it is our view
demand if it is to
that such actions
and the
We
be successful.
do not regard exchange rate action as a panacea for adjustment,
but it is an important tool. Most would agree, that the past
appreciation of the NT dollar has been an influential factor in
the reduction of Taiwan's trade surpluses and the encouragement
of production of higher value-added goods.
Irrespective of its effect on international imbalances, the
strengthening of the NT dollar has generally benefitted Taiwan's
economy.
The undervalued
currency did not correctly signal
producers as to the increasing difficulty that Taiwan would have
in exporting lower value-added consumer goods. Inevitably, other
economies with lower labor costs would have taken market shares
away from Taiwan.
The undervalued
exchange
would also
stifle an increase in the standard of living rate
as production would
have remained more focused on exporting and less on meeting the
As
I
emphasized
earlier,
also be accompanied
strengthening
of domestic
must
by
trade liberalization
of Taiwan's consumers.
Imports would have remained
expensive as well.
Even though real GNP growth fell from 12 percent in 1987 to
7 percent in 1988 and 1989, and will probably be close to 4
percent this year, such rates are less likely to lead to an
overheating of the economy and are more sustainable.
recent
rates of growth would still be the envy of most other More
economies.
All things considered, we believe that it is necessary for
Taiwan's authorities to recognize the continued
importance of the
exchange rate in furthering the adjustment process.
extent that actions are delayed in the areas of trade To the
liberalization and the expansion of domestic demand, the burden
demands
artificially
of adjustment will fall primarily on the exchange rate.
of the Financial Sector
4. Internationalization
Last week, Finance Minister Wang was reported as stating the
Taiwan can become one of the financial centers of Asia soon.
Given Taiwan's attributes,
this goal seems to be a reasonable
one. Many of Taiwan's policy makers appear to have come to
recognize that to fully benefit from its trading successes and
enhance its international
competitiveness,
it must develop an
efficient financial sector. Indeed, the recent movement in
Taiwan towards liberalizing
the securities and banking laws are a
useful foundation on which to build. The next step -- ensuring
that these liberalizations are translated into openings that
financial institutions can take advantage of -- seems to have
proven more
difficult for
Taiwan.
there is still a widely
Despite the recent liberalizations,
held view that Taiwan's financial system lags behind its economy
as a whole. In fact, the financial sector may well serve as a
to a
drag on current growth and may retard the transformation
more balanced economy with better prospects for sustainable
growth.
The advantages of an efficient financial system may be
It will reduce the
obvious but, nonetheless, are worth stating.
is
particularly
This
cost of capital for local companies'
important for the many companies that have no access to the
formal financial sector. Indeed, many of Taiwan's businessmen
have voiced active support for the opening of the financial
market to foreign firms for largely this reason.
Increased efficiency of domestic capital mobilization and
allocation can also contribute to reducing external imbalances
since it will allow sectors of the domestic economy to be able to
The growth of
command the necessary resources for expansion.
reliance on
reduced
domestic capital resources will then permit
exports for growth.
is
Freedom of activity for foreign financial institutions
international
reach
essential if Taiwan's financial sector is to
The United States has benefitted from
or even regional stature.
following a policy of national treatment which allows foreign and
domestic financial institutions equality of competitive
opportunity, or a level playing field, in the United States.
Many in Taiwan fear that such an opening would lead to foreign
In countries where
This is unlikely, however.
domination.
national treatment is granted, there is still a noticeable National
preference for local institutions based on familiarity.
financial
treatment should lead to an across-the-broad rise in progressive.
to become more
practices, forcing local institutions
institutions tend
financial
domestic
Without national treatment,
denominator.
to be satisfied with the lowest common
of Finance, in
Taiwanese authorities and the Ministry
of
for the impressive revision
particular, are to be commended
for the
some restrictions
the banking law and the relaxationare ofespecially
the
that
pleased
entry of new foreign banks. We
banks
of activity for foreign
revisions permit an expanded scope However,
although the banking
in savings and trust activities. the regulations were released in
law was revised in June 1989 and
not acted on the various
April, the Ministry of Finance has amstill
sure that I speak for many
applications by foreign banks. I
see how revision will be
in this room when I say am anxious to that
the operating
applied in practice. It is important banking
law be transparent
regulations and implementation of the
and
fair.
the whole, foreign banks are still denied national
still
treatment in Taiwan. Discrimination against foreign tobanks
fund
ability
on their
remain in many areas, particularly
the limitations on
currency,
local
in
themselves competitively
branching, and the inability to establish subsidiaries.
Foreign securities firms in Taiwan are far from receiving
In early 1990, the authorities for the first
national treatment.
time gave approval for two foreign securities firms to establish
Foreign firms are,
branches under strict qualifications.
in securities
ownership
otherwise, only permitted limited
operations and may not establish subsidiaries nor enter intoof
listing
joint ventures. In addition, Taiwan prohibits the
of
offering
the
and
market
local
foreign securities on the
firms.
securities financing services by foreign
On
Until currently, Taiwan also forbid direct foreign
Recently, however, Taiwan's SEC
investment in local securities.
announced details of a plan to allow foreign institutional
investors to participate in the local stock market. This is the
long-awaited second phase of the three-stage plan announced in
The fine print in this
1983 to liberalize the stock market.
liberalization, unfortunately, may preclude any meaningful
increase in foreign participation or the potential for a
stabilizing force in the market. Limits were imposed on the
investor,
aggregate amount of investment by each institutional
the permitted investment in each listed company, the offering of
custodial business services, the ability to trade securities,
and, notably on the movement of investment capital and earnings
in and out of Taiwan. A fair could be raised on the intent and
purpose
of such restrictions.
trade, there is a widespread perception in the United
States that our openness to foreign financial institutions is
-way street
s rect. In the past year, two highly respected
mostly a one-wa
U. S. Senators initiated legislation requiring the Treasury
\
As xn
to negotiate with economies that failed to provide
treatment.
national
Failing that, the legislation provides for
reciprocal action to be taken against the U. S. operations of
institutions headquartered in those economies. This legislation
was approved by a Senate/House
conference last month.
In addition, the Secretary of the Treasury is required by
law to report to Congress by next month on foreign treatment of
U. S. financial institutions.
The report will contain a chapter
on Taiwan for both banking and securities issues.
In large
measure because of these events, we held formal discussions with
the Ministry of Finance on Wednesday to reduce Taiwan's barriers
to foreign banks and securities firms.
Department
Foreign institutions can provide useful expertise to Taiwan
for modernizing its financial sector. In particular, foreign
institutions could be invaluable for upgrading the technology and
individual skills that are so critical in this process. We are
proud of the record of American firms in training and promoting
local citizens in their overseas branches'
I believe t at there
is ample evidence of this in Taiwan.
In the financial business where costs for a good managerial
team are high, foreign institutions
need to be assured that they
will not be subject to the vicissitudes of bureaucrats or the
discriminatory interpretation of what on paper appear to be fair
regulations.
Experience with such activities breeds a skepticism
that is hard to dislodge.
It is difficult to build regional
center in such an atmosphere.
Concludin
Remarks
In conclusion, let me say that I believe that recent changes
in Taiwan's economic policies bode well both for a more
prosperous bilateral relationship and Taiwan's economic wellbeing. These changes, of course, do not guarantee such results.
I think it is worth reiterating that further action in the above
Rigidities and inefficiencies persist in
areas is necessary.
Taiwan's financial system along with continuing inequitable
treatment of foreign financial firms. In addition, although
Taiwan's trade surplus has improved over the last two years, we
should not be overly optimistic that such improvement will
further liberalization
h'e are concerned that without
continue.
on all economic fronts, there is danger of a slowdown in reducing
Such a slowdown would clearly be
Taiwan's external balances.
unfortunate both for the international economic system and for
Taiwan's development.
Therefore, it is important for Taiwan to further its efforts
to continue it
toward trade and financial liberalization,
exchange rate
market-oriented
conviction to maintain a more
policy, and to foster policies to promote domestic investment and
10
Such policies are crucial for the future health of
consumption.
Taiwan's economy and to move the economy away from excessive
To the extent that this does
dependence on export-led growth.
not occur, the people of Taiwan will be denied the full benefit,
of economic growth and rises in per capita income levels will not,
be reflected in similar improvements
in the actual standard of
living. In a broader sense, these policies are also vital to the
reduction of global payments imbalances and the resistance of
protectionist pressure in the United States and elsewhere.
Economic history has shown that economies must be willing to
make fundamental
policy changes as their economies prosper and
move up the ladder of development.
In the past, Taiwan has
undertaken major shifts in policy which proved to be enormously
beneficial for its economy. The changes that Taiwan has recently
made in a number of important
sectors indicate that the economy
is becoming more aware of its broadened responsibilities.
While
the decisions remaining may be difficult in many instances, we
are confident that Taiwan's policy-makers will react
constructively to the challenges now before them.
~
Pa~ent'
Of
the TtOSU~
~ N4IhltlOCOtl. O.C. ~
Telephone
Contact:
%II-204~
Roger Bolton
(202) 566-8191
Cheryl Crispen
(202) 566-5252
Remarks by
The Honorable Nicholas
F. Brady
Secretary of the Treasury
before the
Annual Convention of the
Securities Industry Association
Boca Raton, Florida
November
30, 1990
This morning I'd like to talk to you about the need for
fundamental
reform in our financial markets, and about the role
of the securities industry in helping to shape that reform. I
believe that we need change to help assure a sound economy and to
strengthen the worldwide competitive standing of our financial
institutions.
Recent. developments
in the financial services markets
clearly indicate that fundamental reforms are needed. The banks
are contemplating additional write-offs, especially in the
commercial real estate sector. There are lingering concerns with
Third World loans.
problems with LBO loans are evident as well.
The media carry daily reports that banks are tightening
their
lending standards, even for good customers, and that the fund
insuring bank deposits is under stress.
the league tables tell us that we' re down
Internationally,
to one commercial bank in the world's top 25. Ten years ago we
had four.
Ten years before that we had eight.
In the securities industry, profits are way down and layoffs
continue.
in the industry
Employment
204 -- 50, 000 jobs -- since 1987.
And the S&L cleanup presents
the developing gloom.
NB-l051
has already
a dark backdrop
decreased
by
that adds to
should
from our
What
counsel
we make
fears?
of all this?
Are we taking
too
much
to put the current situation
I'm not going to paint a
in commercial banking into perspective.
the negatives.
at
let's
look
not
only
rosy scenario, but
Overall, the commercial banking system is healthy despite some
pockets of difficulty.
U. S. banks have over $200 billion in equity capital and an
additional $50 billion in reserves. And they raised a great deal
of equity in the 1980s, despite problem loans in energy,
agriculture and the Third World, proving that they can build
capital even in difficult times. In fact, virtually all of our
major bank holding companies now meet the 1992 worldwide
standards for bank capital, established by the Bank for
International Settlements.
that is not the case
By comparison,
I'd like to take
for the banks of a
a few minutes
number
of our major international
competitors.
Perhaps most important, the banks of 1990 are not the S&Ls
of the 1980s. As I' ve said before, they' re as different as chalk
and cheese.
By a wide margin, the banks have more capital, are
more profitable and better managed, and have less risky kinds of
assets than the S&L industry.
over $200 billion in equity represents
the equity capital of
By comparison,
the S&L industry was under $10 billion and less than 14 of assets
in 1987, the year industry losses mushroomed.
about
Our banking
6%
system's
of total assets.
Finally,
the Federal bank regulators
--
the Office of the
Comptroller of the Currency, the Federal Reserve and the FDIC
are a highly respected group with a solid tradition of
professionalism and concern for safety and soundness.
So the current situation needs to be analyzed with balance,
also with the benefit of historical perspective.
From that
viewpoint, our current difficulties reflect a mixture of both
cyclical and structural problems.
Part of the problem now is the business cycle. Many
economists say that we' re now entering the down
phase of the
cycle. Commercial real estate markets are overbuilt,
and we' ve
had a sharp, temporary increase in the price of
oil.
Although
some industries
and regions remain strong, the economy is
weakening.
In commercial banking, the correction
to be a
particularly sharp one, in part because it follows appears
a
lengthy
expansion during which the traditional lending standards
applied
by many banks clearly eroded.
And in the securities
industry,
the current difficulties follow a period of
unusually rapid
expansion.
and
But we have weathered
weather this one as well.
this kind of storm before,
and we
will
there is an underlying structural problem that
I'm referring to the legal
exacerbates these cyclical downturns.
and regulatory structure of our financial system.
It is
outmoded, burdensome and inefficient.
And its flaws are an
unseen contributor to our financial institutions'
current
difficulties. We need fundamental structural reform, and, as
Secretary of the Treasury, I am committed to this goal.
However,
last
The
20 years have completely
revolutionized
the
financial services markets, bringing intense competition to banks
and benefits to the consumer.
Money market funds with credit
card and check-writing privileges now compete directly with
traditional bank checking accounts. At the same time, the banks'
corporate customers have taken their best business to the
securities and commercial paper markets. And individuals
increasingly rely on credit extended directly to them by
manufacturers
and retailers, rather than by banks.
role of banks is to act as a link between
The traditional
Banks do the credit analysis for
borrowers
depositors and
depositors who are not able to do it. Over recent decades,
rating agencies have grown to perform this same credit analysis
function.
And the expertise of these rating agencies has made it
possible for investment bankers to sell commercial paper,
floating rate notes, and bonds, which reduced the importance of
the traditional bank lending function.
in
Many of these changes are a result of new technology
the
at
system
eaten
away
Technology has
information processing.
It has made the financial
of rigid segmentation and protection.
services industry into one market. Today, banks and securities
firms sell the same products and services to many of the same
customers, often with little regard for geographic boundaries.
Merrill Lynch competes with Citicorp. Salomon competes with
Bankers Trust. And Morgan Stanley competes with J.P. Morgan.
The geographic limits on domestic banking activities also
Try to imagine an
conflict with the reality of the marketplace.
separate
through
business
investment banking firm having to do
-- Merrill
state
every
corporate entities with separate boards in California
. . . paine
Lynch of New Jersey . . . First Boston of
teller
automatic
the
In today's world,
Webber of Florida.
~
machine
and
interstate
the 800
number
have rendered
the restrictions
on
activities obsolete.
in their
our banks have faced ever greater competition to
follow
only limited ability
traditional areas, they have haddeveloped.
in an
As a result,
their customers as new markets
themselves
choosing
found
effort to maintain margins, they have
As
among
— such
the more risky and often less attractive kinds of lending—
as commercial real estate and loans to highly leveraged
companies.
result is a system with too
The
little profit.
Moreover,
the deposit insurance
much
risk
"safety net",
and
too
by allowing
to attract funds under Uncle Sam's guarantee, has slowed
In the United States, we have about
the pace of consolidation.
12, 500 commercial banks, far more than any of our international
For example, Japan has about 150; the United
competitors.
Kingdom 550; Canada 65; and Germany 900.
banks
the SIA, have concluded that it's time to
to address these underlying structural
flaws. There is now a developing consensus in Washington and in
the markets -- in fact, all over the world -- that the time has
including
the system,
Many,
overhaul
come.
As representatives
of the securities industry and as direct
competitors of the banks, you have a unique role to play in this
debate. With that in mind, some may ask what the securities
industry has to gain by cooperating with what some of you may see
as an ongoing attempt by the banks to get into your business.
Or, to put it another way: Why help a competitor?
me attempt some answers.
First, I believe that it is
clearly in the interests of the securities industry to gain the
ability to offer a full range of financial products. That is
what your customers are coming to expect.
And that is what many
of your foreign competitors already offer.
Let
Second, no nation can be a world class competitor without a
class banking system. Let's face
-- the banking
industry's profitability is an important part of the
health of
our financial markets and our whole economy.
We need banks that
are strong enough to stand by their customers in bad environments
as well
it
world
as good ones.
their total share of lending is shrinking,
the largest source of credit overall,
particularly for small and mid-sized companies that do not have
ready access to the securities markets.
Banks also represent the
primary clearance and settlement mechanism for payments.
In
short, without a healthy commercial banking system, we can't
to compete in the 1990s, let alone prosper. A strong financialhope
system is good for
And
banks are
although
still
America.
those of you who may face change with
I'd
apprehension,
also point out that the securities
industry
has
taken major
regulatory changes in stride before. May 1, 1975
-- May Day
when fixed commissions
on equities were abolished.
I remember it
-- the game was over; the securities
we
industry had no future.
To
&any firms
Of course,
considered
we
resigning
were wrong.
We
from the New York Stock Exchange.
changed with the times, and the
to record profitability in the 1980s.
With the SIA's proposal for financial services reform, the
securities industry has added its voice to those who seek
productive change. The SIA deserves credit for acknowledging
that the existing division of our financial markets no longer
industry
makes
went on
sense.
also understands the need for change, and, as
you may be aware, we will come forward with a comprehensive
I'd like to outline for you some of the
proposal in January.
principles that will form the foundation of our proposal for
modernization of the financial services industry.
The Treasury
First, the
Administration
feels strongly that issues of
-insurance
reform
deposit
that is, the extent and character of
-the safety net
are so closely intertwined with questions of
reform of the industry's structure, that it makes no sense to
treat
separately.
Reform of deposit insurance will be an important step toward
But the
assuring that banks operate safely and soundly.
sound the
safe
and
to
be
believes
that
Administration
also
For that reason, deposit
banking system must be profitable.
insurance reform should only be considered as part of a package
that also addresses the underlying structural problems of our
them
system.
Second, reform must recognize the reality of the
marketplace, which is that the financial services industry has
outmoded barriers to the
We must eliminate
become one market.
and thereby
conduct of financial business that deny this reality
-banks
and
firms
financial
all
of
limit the profitability
be
should
banks
and
firms
securities firms alike. Securities
free to
We
affiliate.
must
also address the geographic
restrictions
on
modern country
interstate banking and branching. We are the only
remarkable
that, as
It is
that does not permit national banking.
financial
the European Community approaches Community-wide
on the question
stuck
still
are
services, we in the United States
to operate
firms
of whether to permit. our banks and securities
nationwide in an efficient manner.
this
Third, and of signal importance, we' ve got to carry out
the
restructuring in a way that limits, rather than expands,
In the era of the S6L cleanup, that is the
taxpayers' exposure.
will have to clear. Newly
first hurdle that any reform proposal
the
authorized financial activities must take place outside
safety net, and without the benefit of subsidy. We ill insist
strong provisions -- firewalls, so called -- to protect the
insured institution and prevent it from subsidizing its
on
affiliates.
its
business
The securities industry has always conducted
without the benefit of a government
in good times and bad
is right and should not change.
This
safety net or subsidy.
Subsidies and safety nets distort the allocation of resources and
The
bring the deadening hand of excessive government regulation.
--
industry
commercial
gets paid well to take risks that government
Fourth,
barrier is
themselves
banks should
it
not take.
You should
want
it
insured
that
way.
saying that, when the Glass-Steagall
lifted, banks and securities firms should find
on a level playing field, favoring neither side.
goes without
Fifth, I do expect that the reforms we propose will, over
time, greatly enhance the profitability,
safety and soundness of
our banks.
However, as mentioned earlier, the fund that insures
deposits in commercial banks is under stress. There may be a
need to shore up that fund.
fact is that the Bank Insurance Fund is expected to
decline to about $10 billion at the end of this year, and may
well decline further in 1991. The fund needs to be strong enough
to permit the FDIC to do its job effectively, and to warrant the
The
confidence of depositors.
The Treasury is evaluating a range of contingency plans that
shore up the Bank Insurance Fund. Any such plan would draw
only on banking industry resources to assure the soundness of the
fund without imposing a burden on the taxpayer.
Responsibility
for the fund will be placed squarely on the shoulders of
would
industry.
coming
doing
In
forward
so.
fact, responsible
banking
to accept this burden,
organizations
and
I
applaud
are already
for
them
Next year's debate on financial services reform will surely
bee an intense one. As that debate approaches, I urge the bankers
to stand by their traditional franchise of lending to sound
projects and creditworthy customers. Their customers are the
foundation blocks of their political strength and public support'
It would be a mistake
for banks to retire to the sidelines and
invest only in short-term marketable securities.
do so would
imperil not only our prospects for economic growth, To but
also the
banks' standing with the American people.
while we' re on the subject of credit I'd like
x e o say
a
p
ve saxd privately to the bank I regulators before:
y
Use some judgment.
Apply some balance. In evaluating
loans,
let's not run a competition
on pessimism.
Don't
overreact.
Be
mindful of the effect your behavior cann h ave
on th e willingness
'
And
t
f banks to take even the reasonable risk o f l ending to
credits. We need a banking system that is a taker, not
shedder, of such risks.
Q
For our part in the Administration,
force for careful but fundamental reform,
the near term.
this
we
good
a
to be a strong
for stability in
intend
and
be a time of tough sledding for financial
we do have the opportunity
to find new
to
some
of
the
fundamental
answers
questions that have defined
This time, there is a real chance that
our financial landscape.
some of the lines that were set down over 50 years ago may be
successfully redrawn.
While
firms of
may
all descriptions,
Today, I want to leave you with the certainty that this
Administration
is committed to promoting legislation that will
allow financial organizations to reshape their activities to
operate profitably and soundly in an environment made new by
technological change. With your help, we can preserve and
strengthen the American financial system as a worldwide leader.
Thank you very much.
4810-25-M
DEPARTMENT OF THE TREASURY
Of f ice
L
of Foreign Assets Contro'
31 C. F. R. Part 570
a'
Ir
,
C
Kuvaiti Assets Control Regulations
Of f ice o f Foreign
AGENCY:
t~
As
C"".. ="o', Zepa. "--.. . ~.-. =
o-
the Treasury
ACTION:
Final Rule
SURGED:
On
2, 1990,
August
the President
Iraq's invas
upon
issued Ex cutive Order
No.
12
=n o
.
.
~
" a'
Zn
order he declared a national emergency w' h respec
invoking the authority, ante +aja, oi the --e"
Emergency Economic Powers Act (50 t'. S. C. 170' e- s
"o =a=,
-. ),
specified sanctions again=
"~q, and au-hc"'=ed =he
Secretary of the Treasury, in consu' a- "n «i=h =he
Secretary of State, to take such a==ions, inc'ud ng =.-. e
promulgation o f rules and regula- ' o.".s, as migh= be necessa =y
to carry out the purposes of -he Or" er. 2 =s~a.-. t -= h' s
declaration of nat'ona' emergency, =.".e P=esi"- .-. = a'so issued
Executive Order No. 12 23, at the re~-'es= o. ='.".e rec"c.". 'zed
ordered
of
Government
property
measure.
Kuwa'
the
o
On
t,
ove=". .me.".
Augus-
Orde=s No. 12724 and
sanctions
on
b' ocking a'
o.
'
Kuwa
p==pe=t
=
a.
and
'
.", =e
es
-lye
9, '9. e
25.
4=.
~
Q
Iraq, co.".s's"e.-.
~
w'
h Res
56', "
-p
'
o the United Nations Security Council,
1990, of
6, 1990
imposing similar sanctions on Kuwait to ensure that no
and
August
benefit
from the United
States flowed to the
Iraq in militarily-occupied
those Orders,
the Treasury
of
Government
Kuwait.
In implementation
of
Department
is issuing the
Kuwaiti
("Regulations" ).
Regulations block all property and interests in
Assets Control Regulations
The
of the
property
purporting
Government
to be the
instrumentalities,
of
Kuwait
Government
or any person
of Kuwait,
its agencies,
entities, including the
Central Bank of Kuwait, that are in the United States, that
hereafter come within the United States, or that are or
hereafter come within the possession or control of U. S.
and
controlled
their overseas branches. The Regulations
also generally prohibit:
(a) imports into the United States
persons,
including
of goods or services from Kuwait; (b) exports from the
United States of goods, technology or services to Kuwait or
entities operated from Kuwait; (c) any dealing by any U. S.
person in Kuwaiti-origin goods or any other goods from
Kuwait or intended for Kuwait; (d) transactions
by U. S.
persons relating to travel by U. S. citizens and
permanent
resident aliens to Kuwait, including their activities
within
Kuwait;
(e) transactions
holding
authority
by U. S. persons
relating to
transportation to or from Kuwait; transportation
services to
or from the United States by Kuwaiti persons,
vessels, or
aircraft; or the sale in the United States by any
person
under
the Federal Aviation Act of any
transportation
air
by
which
includes
stop in Kuwait;
any
(f) performance by U. S. persons of contracts in support of
industrial, commercial, public utility, or governmental
projects in Kuwait; and (g) any transfer of funds by U. S.
persons to the Government of Kuwait or any person in Kuwait.
EFFECTIVE DATE:
FOR FURTHER
[Date of Publication]
INFORMATION:
Contact William B. Hoffman,
Chief
Tel. : (202) 535-6020, or Steven I. Pinter, Chief of
Licensing, Tel. : (202) 535-9449, Office of Foreign Assets
Counsel,
Control,
Department
SUPPLEMENTARY
of the Treasury,
INFORMATION:
Washington,
All General
D. C.
Licenses issued
by
the Office of Foreign Assets Control prior to [date of
publication] may continue to be relied on to validate
actions prior to this date during the period of their
validity. Specific licenses issued prior to this date
continue in effect according to their terms unless modified
by the Office of Foreign Assets Control.
Authorizations
contained
in General
prior to publication of these regulations
in the following sections:
License
Number
8/02/90
General
License No. 1
8/15/90
General
License No. 1,
8/08/90
General
License No.
Issuance
Licenses issued
can
now
be found
Regulation
Section
Date
2
Amended
amended
Sect-'on 570. 5Q„
Sect&on 570 5Q9
Amended
8/08/90
General
License No.
10/15/90
General
License No. 3, amended
Section 570. 512
8/08/90
General
License No.
4
Revoked
8/13/90
General
License No.
5
Section 570. 504
8/15/90
General
License No.
6
Section 570. 513
8/15/90
General
License No. 7,
Amended
10/18/90
General
License No. 7, amended
Section 570. 510
8/23/90
General
License No.
8
Section 570. 514
8/27/90
General
Li'cense No. 9
Section 570. 517
8/30/90
General
License No. 10
Section 570. 505
9/01/90
General
License No. 11
Section 570. 508
9/26/90
General
License No. 12
Section 570. 520
Transactions
otherwise
3
prohibited
under
10/2/90
this part
license contained in Subpart
by a specific license issued pursuant to the procedures
described in Section 570. 801 of Subpart H.
be authorized
by a general
Since the Regulations
function,
involve
a foreign
may
E
or
affairs
of the Administrative Procedure Act
(5 U. S.C. 553), requiring notice of proposed rulemaking,
opportunity for public participation,
and delay in effective
date, are inapplicable.
Because no notice of proposed
the provisions
is required for this rule, the Regulatory
Flexibility Act (5 U. S.C. 601, et ~se . ) does not apply.
rulemaking
Because the Regulations
are issued with respect to a foreign
affairs function of the United States, they are not subject
to Executive Order 12291 of February 17, 1981, dealing with
Federal regulations.
These regulations
public procedure
and
Act.
Procedure
the Paperwork
under
~se
. ).
pursuant.
in these regulations
to the Office of
submitted
Comments
Reduction
are being
and Budget
Management
("OMB")
Act of l980 (44 U. S. C. 3501
et
the collection of information
concerning
the accuracy of estimated
and
prior notice
to the Administrative
For this reason, the collections of
contained
information
are being issued without
average
annual
burden,
and
for reducing this burden should be directed to
Reduction Project (1505-****),Washington,
OMB, Paperwork
D. C. 20503, with copies to the Office of Foreign Assets
Control, Department of the Treasury, 1500 Pennsylvania Ave.
suggestions
N. W.
--
should
Annex,
Washington,
be submitted
publication].
p"»
The
D. C. 20220.
Any
,
such comments
not later than [60 days from date of
Notice of
OMB
action
on
these requests
will
d
collections of information
contained
in SS 570. 503, 570. 509
—
in these regulations
570. 512, 570. 515,
570. 517, 570. 518, 570. 520, 570. 521, Subpart F, and
SS 570. 703, and 570. 801. This information is required
the Office of Foreign Assets Control for licensing,
compliance,
civil penalty
are
and enforcement
purposes.
by
This
will be used to determine the eligibility of
applicants for the benefits provided through specific
licenses, to determine whether persons subject to the
information
are in compliance with applicable requ reme, „s,
and to determine whether and to what extent civil penal y oz
regulations
,
other enforcement
respondents
and
The likely
action is appropriate.
recordkeepers are individuals and business
organizations.
Estimated
burden:
total
recordkeeping
and/or
reporting
2000 hours.
The estimated
varies
annual
per respondent/recordkeeper
to 10 hours, depending on individual
estimated average of 2 hours.
from 30 minutes
circumstances,
burden
annual
with an
Estimated
number
of respondents
Estimated
annual
frequency
recordkeepers:
and/or
1000.
1 — 12.
of responses:
List of Subjects in 31 CFR Part 570:
Iraq, Kuwait, Banks, Banking, Finance, Blocking of
assets, Imports, Exports, Loan Program, Penalties, Reporting
requirements.
and recordkeeping
For the reasons set forth in the preamble,
added
to 31
CFR
Chapter
PART 570--KUWAITI
AUTHORITY:
~se
.;
(Nov.
V
Part 570 is
as follows:
ASSETS CONTROL REGULATIONS
50 U. S. C. 1701
et
~se
.;
50 U. S. C. 1601
22 U. S. C.
287c; Pub. L. 101-513, 104
5, 1990);
3 U. S. C.
et
Stat. 2047-55
301; E. O. 12722, 55
FR
31803
(Aug
3, 1990): E.O. 12723, 55
55 FR 33091 (Aug.
Subpart
A
--
FR
31805 (Aug.
3. 1990); E. O 12725,
13, 1990).
Relation of this Part to Other
Laws and
Regulations
Section 570. 101 Relation of this
Subpart
B
--
art to other
laws and
Prohibitions
Section 570. 201 Prohibited
in which the Government
transactions
involvin
of Kuwait has
an
ro ert
interest;
transactions with res ect to securities.
Section 570. 202 Effect of transfers violatin the
rovisions of this art.
Section 570. 203 Holdin of certain t es of blocked
ro ert in interest-bearin
accounts.
Section 570. 204 Prohibited im ortation of oods or services
from Kuwait'
Section 570. 205
oods
Prohibited
technolo
Section 570. 206
to
Kuwait
ex ortation
dealin
or to activities
transactions
reex ortation
or services to Kuwait.
Prohibited
Sect, ion 570. 208
and
Prohibited
involvin
in
within
ro
ert
Kuwait.
trans ortation-related
Kuwait.
of
Section 570. 209
Prohibited
erformance
of contracts.
of funds to the
Section 570. 210 Prohibited transfers
erson in Kuwait.
Government of Kuwait or an
Section 570. 211 Evasions; attem
Section 570. 212
Subpart
C
--
ts;
cons
Effective date.
General
Definitions
Section 570. 301 Blocked account; blocked
Section 570. 302
iracies.
ro ert
Effective date.
Section 570. 303 ~Entit
Section 570. 304
overnment
Entit
of the
Government
of Kuwait; Kuwaiti
entit
Section 570. 305 General license.
Section 570. 306 Government
Section 570. 307 Government
Section 570. 308
of Ira
of Kuwait.
Interest.
Section 570. 310 Kuwait; Kuwaiti.
Section 570. 311 Kuwaiti ori in.
Section 570. 312 Kuwaiti erson.
Section 570. 313 License.
Section 570. 314 Person.
Section 570. 315 Pro ert ; ro ert
Section 570. 316 S ecific license.
Section 570. 317 Transfer.
Section 570. 318
UNSC
Resolution
interest.
661.
Section 570. 319 United States.
Section 570. 320 U-S. financial institution.
Section 570. 321 United States erson; U. S. erson.
Subpart
D
--
Interpretations
Section 570. 401 Reference to amended sections.
Section 570. 402 Effect of amendment.
Section 570. 403 Termination and ac
of the Government of Kuwait.
Section 570. 404
Pa
isition of
bankers
Ac
interest
ents from blocked accounts to U. S.
ex orters and for other obli ations
Section 570. 405
an
rohibited.
isition of instruments
includin
acce tances.
Section 570. 406
Extensions
Section 570. 407
Pa
of credit or loans to Kuwait.
ents in connection with certain
transactions.
Section 570. 408 Offshore transactions.
Section 570. 409 Transshi ments throu
authorized
Section 570. 410
Im
orts of
Kuwaiti
h
the United States
oods from third
countries.
Section 570. 411 Ex orts to third countries.
Section 570. 412 Release of Kuwaiti oods from bonded
warehouse or forei n trade zone.
Section 570. 413 Goods intended for e ort to Kuwait.
Section 570. 414
Im
orts of Kuwaiti
oods and ~vrchases
of
10
oods from Kuwait.
Section 570. 415 Setoffs rohibited.
Section 570. 416 Travel transactions
activit
for 'ournalistic
in Kuwait.
Section 570. 417 Transactions
Section 570. 418 Transactions
licensed entities.
incidental to a licensed
amon
transaction.
Subpart
E
Licensing
--
and Statements
Licenses, Authorizations
of
Policy
Section 570. 501 Effect of license or authorization.
Section 570. 502 Exclusion from licenses and authorizations.
Section 570. 503
in U. S. financial
Section 570. 504
securities
Section 570. 505
Com
and
Com
to blocked accounts
ents and transfers
Pa
institutions.
letion of certain forei n exchan e,
commodities transactions.
letion of certain transactions
related to bankers acce tances authorized.
Section 570. 506 Pa ent b the Government of Kuwait of
obli ations to ersons within the United States
authorized.
Section 570. 507
Certain ex orts to Kuwait authorized.
Section 570. 508
Im
from Kuwait
Section 570. 509
ort of household
and
ersonal effects
authorized.
Pa
ent and transfers
authorized
for
shi ments of oil under contract
Un&ted
States
Section 570. 510 Pa
and en
route to the
rior to the effective date.
ent and transfers
services e orted to
date.
and
Section 570. 511 Extensions
Section 570. 512 Investment
Kuwait
for oods
rior to the effective
and renewals
authorized
authorized.
and reinvestment
of
Government
of Kuwait funds held in blocked accounts.
Section 570. 513 Transactions related to telecommunications
authorized.
Section 570. 514 Transactions related to mail authorized.
Section 570. 515 Fees for rofessional services authorized.
Section 570. 516 Certain transactions with res ect to
atents trademarks
and co ri hts authorized.
Section 570. 517 Procedures established for ex ort
transactions initiated
rior to the effective date.
Section 570. 518 Certain standb letters of credit and
erformance
bonds.
Section 570. 519 Certain
ersonnel authorized.
Section 570. 520
Donations
im
orts for di lomatic or of ficial
of food go relieve
human
sufferin authorized.
Section 570. 521 Certain e ortations of medical
authorized.
Sub
art
F
--
Re
orts
su
lies
12
ired records.
Section 570. 601 Re
602
Section 570. 60
Re
603
Section 570. 60
Re
orts to be furnished on demand.
orts on certain corres ondent bank
accounts.
Sub
art
G
--
Penalties
Section 570. 701 Penalties.
Section 570. 702
Pre enalt
Section 570. 703
Presentation
notice.
res ondin
to re enalt
notice.
notice.
Section 570. 705 Referral to United States
Justice.
Section 570. 704
Sub
art
H
--
Penalt
Decisions.
Section 570. 803
Amendment
modification
"" ' '"'"9.
Section 570. 805 Dele ation
Section 570. 806 Rules
b
of
Pa erwork
or revocation.
the Secretar
overnin
availabilit
information.
art I --
artment
Procedures
Section 570. 802
Sub
De
Reduction
Act
of the
of
13
Section 570. 901 [Reserved].
APPENDIX A TO PART 570--KUWAITI
Subpart
A
--
GOVERNMENTAL
Relation of This Part to Other
Regulations
Section 570. 101 Relation of this
(a) This part is separate
ENTITIES
Laws and
art to other
from,
laws and
and independent
of, the
other parts of this chapter. No license or authorization
contained in or issued pursuant to those other parts
authorizes any transaction prohibited by this part. No
license or authorization contained in or issued pursuant to
any other provision of law or regulation authorizes any
transaction prohibited by this part.
(b) No license or authorization contained in or issued
pursuant to this part relieves the involved parties from
complying with any other applicable laws or regulations.
Subpart
B
--
Prohibitions
Section 570. 201 Prohibited
transactions
involvin
ro
ert
14
of
in which the Government
has an
interest;
ect to securities.
with res
transactions
Kuwait
(a) Except as authorized
by
regulations,
rulings,
instructions,
licenses, or otherwise, no property or
interests in property of the Government of Kuwait that are
in the United States, that hereafter come within the United
States, or that are or hereafter come within the possession
or control of U. S. persons, including their overseas
branches,
may
otherwise
dealt in.
be transferred,
(b) Unless
otherwise
paid, exported,
withdrawn
or
this part or by a
specific license expressly referring to this section, the
transfer (including the transfer on the books of any issuer
or agent thereof), the endorsement or guaranty of
signatures
on, or any other dealing
authorized
by
in any security
thereof)
(or evidence
in the name of the
registered or inscribed
Government of Kuwait and held within the
possession or
control of a U. S. person is prohibited,
irrespective of the
fact that at any time either at or subsequent
to the
effective date the registered or inscribed owner
thereof may
have, or appears to have, assigned,
transferred, or
otherwise
disposed
of
security.
(c) A transfer of property to or from the
Government of
Kuwait and not involvin
g a U. S. person shall be recognized
for purposes of this section if th
e t ransfer complied with
all applicable United Nations Secur
ecuri t y Council
C
resolutions
any such
15
in the country of transfer
as implemented
transferred,
and was otherwise
lawful
as to the property.
in the country
of
transfer.
(d)
~xaam
le: If
a U.
s.
person acquires
which had been sold on August
to
Kuwait
would
citizen of the
a
not be considered
ha s an
Kuwait
Resolution
transfers
9 , 19 9 0 , by the Government
property
to
of
in which the Government
August
The United
661 prior to August
of securities
security
United Kingdom , the security
interest if the
in the United Kingdom.
a
and
9
transfer
Kingdom
wa
of
s lawful
implemented
UNSC
9, 1990, with respect to
from the Government of
Kuwait.
Effect of transfers violatin
rovisions of this art.
Section 570. 202
the
transfer after the effective date, which is in
violation of any provision of this part or of any regulation, ruling, instruction, license, or other direction or
authorization hereunder and involves any property in which
the Government of Kuwait has or has had an interest since
such date, is null and void and shall not be the basis for
the assertion or recognition of any interest in or righ
remedy, power or privilege with respect to such property.
(b) No transfer before the effective date shall be
basis for the assertion or recognition of any right, "e-. e"y,
power, or privilege with respect to, or interest in, arly
(a)
Any
..
16
of Kuwait has an interest,
the person
or has had an interest since such date, unless
prior to such
with whom such property is held or maintained,
date, had written notice of the transfer or by any written
property
in
wh
zc h the Government,
evidence had recognized
such
transfer.
(c) Unless otherwise provided, an appropriate license
or other authorization issued by or pursuant to the direction or authorization of the Director of the Office of
Foreign Assets Control before, during, or after a transfer
shall validate such transfer or render it enforceable to the
same
extent that
it
would
be valid or enforceable
but for
of the International Emergency Economic
Powers Act, the United Nations Participation Act, and this
part, and any ruling, order, regulation, direction, or
instruction issued hereunder.
the provisions
(d) Transfers
and void
of property
or unenforceable
by
which
otherwise
would
virtue of the provisions
be null
of
this section shall not be deemed to be null and void or
unenforceable as to any person with whom such property was
held or maintained (and as to such person only) in cases in
which such person is able to establish to the satisfaction
of the Director of the Office of Foreign Assets Control each
of the following:
(1) Such transfer did not represent a willful
violation of the provisions of this part by the person with
whom such property
was held or maintained;
17
(2) The person with
whom
did not have reasonable
maintained
or
such property
was held
cause to
or suspect,
know
all the facts and circumstances known or
available to such person, that such transfer required
in view of
a
license or authorization by or pursuant to this part and was
not so licensed or authorized, or if a license or
authorization did purport to cover the transfer, that such
license or authorization had been obtained by
misrepresentation
of a third party or the withholding of
facts or
material
was
(3) Promptly
(i)
such
otherwise
upon
transfer
fraudulently
obtained;
that
in violation
of the
and
discovery
was
of this part or any regulation, ruling,
instruction, license, or other direction or authorization
provisions
hereunder,
or
(ii)
by
such transfer
was not
licensed or authorized
the Director of the Office of Foreign Assets Control,
(iii) if a license did purport to cover the
or
transfer, such license had been obtained by misrepresentation of a third party or the withholding of material facts
or
was
otherwise
the person with
fraudulently
whom
obtained;
such property
was held
or maintained
filed with the Office of Foreign Assets Control a report
setting forth in full the circumstances relating to sue~
transfer. The filing of a report in accordance with the
provisions of this paragraph shall not be deemed evidence
that the terms of paragraphs (d)(l) and (2) of this section
have been
satisfied.
18
(e) Unless licensed or authorized pursuant to this
part, any attachment, judgment, decree, lien, execution,
or other judicial process is null and void with
garnishment,
respect to
date, there existed
Section 570. 203
ro ert
in which,
property
any
or since the effective
on
interest of the
an
Holdin
of certain
in interest-bearin
t
Government
of Kuwait.
es of blocked
accounts.
a U. S.
financial institution,
currently holding property subject to 8 570. 201 which, as of
the effective date or the date of receipt if subsequent to
the effective date, is not being held in an interest-bearing
(a)
Any
account,
person,
or otherwise
including
invested
in a manner
authorized
by the
Office of Foreign Assets Control, must transfer such
property to, or hold such property or cause such property to
be held in, an interest-bearing
account or interest-bearing
status in a U. S. financial institution as of the effective
date or the date of receipt if subsequent to the effective
date of this section, unless otherwise authorized or
directed by the Office of Foreign Assets Control. This
requirement shall apply to currency and any other
financial
assets,
deposits, accounts, and any proceeds resulting
from the sale of tangible or intangible
propertyIf
bank
interest is credited to
which the
interest-bearing
an account
separate
that in
asset is held, the name of the
from
account party on both accounts must be
the same and must
19
clearly indicate the blocked Government
having an interest in the accounts.
(b) For purposes
of Kuwait entity
of this section, the term "interest-
bearing account" means a blocked account in a U. S. financial
institution earning interest at rates that are commercially
for the
reasonable
as otherwise
of funds in the account.
amount
authorized,
held in instruments
the funds
may
Except
not be invested
or
the maturity
of which exceeds 90 days,
unless such investments are readily marketable and are
purchased at the direction of the Government of Kuwait.
(c) This section does not apply to blocked tangible
property,
affirmative
obligation
blocked tangible
and put
chattels, nor does it create
such as
an
the part of the holder of such
on
to sell or liquidate
property
the proceeds in a blocked account.
the property
However,
the
Office of Foreign Assets Control may issue licenses
permitting or directing sales of tangible property in
appropriate cases.
Section 570. 204
Prohibited
im
ortation of
oods or services
from Kuwait.
Except as otherwise
Kuwaiti
may
is
origin
may
any U. S. person
intended
authorized,
be imported
engage
to promote
no goods
or services of
into the United States, nor
in any activity
such importation.
that promotes or
20
and reex ortation of
Section 570. 205 Prohibited e ortation
or services to Kuwait.
oods technolo
Except as otherwise
authorized,
no goods,
technology
technical data or other information),
(including
or services
the United States, or, if subject to
exported or reexported from a third
U. S. jurisdiction,
country to Kuwait, to any entity owned or controlled by the
Government of Kuwait, or to any entity operated from Kuwait,
may
from
be exported
donated
5
and
medical purposes,
the
specifically licensed pursuant
570. 507, 570. 519, 570. 520 or 570. 521.
exportation
to
strictly for
intended
supplies
circumstances,
in humanitarian
except donated foodstuffs
of
which has been
Section 570. 206
Prohibited
Except as otherwise
dealin
authorized,
in
ro ert
no U. S. person
may
deal
of Kuwaiti origin exported from Kuwait or Iraq
after August 6, 1990, property intended for exportation to
Kuwait, or property intended for exportation from Kuwait to
any other country, nor may any U. S. person engage in any
in property
activity that promotes or is intended to promote such
dealing.
Section 570. 207
to
Kuwait
Prohibited
transactions
relatin
or to activities within Kuwait.
to travel
21
Except as otherwise
engage
authorized,
no U. S. person
may
in any transaction
relating to travel by any U. S.
resident alien to Kuwait, or to
citizen or
permanent
activities
by any U. S.
citizen or
permanent
resident
alien
or to activities by any U. S. citizen or
permanent resident alien within Kuwait, after the effective
date, other than transactions:
within
Kuwait,
(a) Necessary to effect the departure
or permanent
resident
alien
(b) Relating to travel
U. S.
citizen
or Iraq;
from Kuwait
and
of a
activities for the
conduct
of the official business of the United States Government
the United Nations; or
(c) Relating to journalistic activity by persons
regularly employed in such capacity by a newsgathering
organization.
This section prohibits
person of his or her
within
the unauthorized
own
payment
by a U. S.
travel or living expenses to or
Kuwait.
Section 570. 208
Prohibited
transactions
involvin
Except as otherwise
trans ortation-related
Kuwait.
authorized,
the following
are
prohibited:
(a)
Any
transportation
transaction
to or
by a U. S. person
from Kuwait;
relating
to
or
22
to or from
o transportation
ovision of
(bj The provision
or any vessel or
United States by any Kuwaiti person
aircraft of
Kuwaiti
registration;
the
or
person holding
(c) the sale in the United States by any
authority under the Federal Aviation Act of any
transportation by air which includes any stop in Kuwait.
(d)
person
~Exam
may
refueling,
le:
Unless licensed
or exempted,
no U. S.
or provide ticketing, ground, port,
bunkering, clearance, or freight forwarding
insure,
services, with respect to any sea, ground, or air
transportation the destination of which is Kuwait, or which
is intended to make a stop in Kuwait.
Section 570. 209
Prohibited
Except as otherwise
erformance
of contracts.
no U. S. person
authorized,
contract, including a financing contract,
support of an industrial, commercial, public utility,
governmental
project in Kuwait.
perform
any
Section 570. 210 Prohibited
Government
of Kuwait or
Except as otherwise
or transfer,
may
in
or
transfer of funds to the
an
erson in Kuwait.
authorized,
no U. S. person
may
directly or indirectly, funds or other
financial or economic resources to the Government of Kuwait
commit
or
any person
in Kuwait.
23
Section 570. 211 Evasions; attem ts
Any
transaction
effect of,
iracies
for the purpose of, or
or avoiding,
evading
cons
evasion or avoidance
of,
has the
which
or which facilitates
the
of the prohibitions set forth
in this subpart, is hereby prohibited.
Any attempt to
violate the prohibitions set forth in this part is hereby
prohibited.
Any conspiracy
formed for the purpose of
any
in a transaction
engaging
prohibited
by
this part is hereby
prohibited.
Section 570. 212
Effective date.
effective dates of the prohibitions
contained in this subpart B are as follows:
The
and
directives
(a) With respect to SS 570. 201, 574. 202, and 570. 211,
5:00 a. m. , Eastern Daylight Time ("EDT"), August 2, 1990;
(b) With respect to SS 570. 204, 570. 205, 570. 206,
570. 207, 570. 208, 570. 209,
August
9, 1990; and
(c) With respect to
Subpart
C
--
General
5
and
570. 210, 8:55 p. m.
EDT,
570. 203. [date of publication].
Definitions
Section 570. 301 Blocked account; blocked
o operant
24
"blocked account" and "blocked property"
The terms
shall
of
unt
any accoun
mean
Kuwait
has an
transfers,
not be
interest,
exportations,
made
in which the Government,
or property
with respect
withdrawals,
Section 570. 302
such
which payments,
or other dealings
or effected except pursuant
or license authorizing
to
to
an
may
authorization
action.
Effective date.
"effective date" refers to the effective date
of the applicable prohibition, as identified in 8570. 212.
The term
Section 570. 303 ~Entit
"entity" includes
The term
association,
a
corporation,
or other organization.
Section 570. 304
Government
Entit
entit
of the
Government
"entity of the Government
"Kuwaiti Government entity" includes:
The term
(a)
partnership,
of Kuwait; Kuwaiti
of Kuwait" or
corporation, partnership, association, or other
entity in which the Government of Kuwait
owns a majority or
controlling interest, any entity managed
or funded by that
government,
or any entity which is otherwise
controlled by
that government;
Any
25
(b)
Kuwait,
Any
agency or instrumentality
including
of the
Government
of
the Central Bank of Kuwait.
Section 570. 305 General license.
The term
authorization
"general license"
the terms of which
Section 570. 306
The term
Government
"Government
license or
are set forth in this part.
means
any
of Ira
of Iraq" includes:
(a) The state and the Government
of Iraq, as well as
any political subdivision,
agency, or instrumentality
thereof, including the Central Bank of Iraq;
(b)
Any
organization
association, corporation, or other
substantially owned or controlled by the
partnership,
foregoing;
(c)
Any
person to the extent that such person
is, or
or to the extent that there is reasonable cause to
believe that such person is, or has been, since the
effective date, acting or purporting to act directly or
indirectly on behalf of any of the foregoing; and
has been,
other person or organization determined by the
Director of the Office of Foreign Assets Control to be
(d)
included
Any
within
Section 570. 307
this section.
Government
of Kuwait.
26
of Kuwait" includes:
The term "Government
(a) The state and Government of Kuwait and any entity
purporting to be the Government of Kuwait, as well as any
political subdivision,
including
(b)
the Central
Any
organization
agency,
Bank
or instrumentality
thereof,
of Kuwait;
association, corporation, or other
substantially owned or controlled by the
partnership,
foregoing;
(c) Any person to the extent that such person is or has
been, or to the extent that there is reasonable cause to
believe that such person is or has been, since the effective
date, acting or purporting to act directly or indirectly
behalf of any of the foregoing; and
(d)
Any
other person or organization
determined
by the
Director of the Office of Foreign Assets Control to be
included
within
Section 570. 308
this section.
Interest.
Except as otherwise
provided
in this part,
on
the term
"interest" when used with respect to property (e. g. , "an
interest in property") means an interest of any nature
whatsoever, direct or indirect.
27
"I»q"
Th«erm
territory
the country of Iraq and any
under the jurisdiction or authority thereof, legal
means
"Iraqi"
defined in this section.
or illegal.
The term
means
pertaining
to Iraq as
Section 570. 310 Kuwait; Kuwaiti.
The term
territory
"Kuwait" means the country
under the
jurisdiction
term "Kuwaiti" means pertaining
of Kuwait
or authority
to
Kuwait
and any
thereof.
as defined
The
in this
section.
Section 570. 311 Kuwaiti ori in.
The term
"goods or services of Kuwaiti
origin"
includes:
(a) Goods produced,
within
manufactured,
grown,
or processed
Kuwait;
(b) Goods which have entered
into Kuwaiti commerce;
(c) Services performed in Kuwait or by a Kuwaiti
national who is acting as an agent, employee, or contractor
of the Government of Kuwait, or of a business entity located
Services of Kuwaiti origin are not imported into
in Kuwait.
the United States when such services are provided in the
United
States.
States
by a Kuwaiti
national
employed
in the United
28
Section 570. 312 Kuwaiti
't' person
erson" means any Kuwaiti
"Kuwaiti
The term
organize
any person
owned
or contro
national
erson.
d un der
er
the laws of Kuwait,
ll e d directly
or the Government
or indirectly,
citizen,
or any person
by a Kuwaiti
of Kuwait.
Section 570. 313 License.
Except as otherwise
specified, the term "license" means
any license or authorization
contained in or issued pursuant
to this part.
Section 570. 314 Person.
The term
association,
"person" means an individual, partnership,
corporation, or other organization.
Section 570. 3'15 Pro ert ;
ro ert
interest.
The terms
"property" and "property interest" include,
but are not limited to, money, checks,
drafts, bullion, bank
deposits, savings accounts, debts, indebtedness,
obligations, notes, debentures, stocks,
bonds, coupons, any
other financial instruments, banker's
acceptances,
mortgages, pledges, liens or other
rights in the nature of
security,
warehouse
receipts, bills of lading,
trust
29
receipts, bills of sale,
ownership
any
other evidences of
letters of credit
or indebtedness,
title,
and any
relating to any rights or obligations thereunder,
powers of attorney, goods, wares, merchandise,
chattels,
stocks on hand, ships, goods on ships, real estate
mortgages, deeds of trust, vendor's sales agreements, land
contracts, leaseholds, ground rents, real estate and any
other interest therein, options, negotiable instruments,
trade acceptances, royalties, book accounts, accounts
payable, judgments; patents, trademarks, or copyrights,
insurance policies, safe deposit boxes and their contents,
annuities, pooling agreements, services of any nature
whatsoever, contracts of any nature whatsoever, and any
other property, real, personal, or mixed, tangible or
intangible, or interest or interests therein, present,
documents
future or contingent.
Section 570. 316
The term
authorization
S
ecific license.
"specific license" means any license or
not set forth in this part but issued pursuant
to this part in response to
an
application.
Section 570. 317 Transfer.
The term
or transaction,
"transfer"
whether
means
any ac ual
or not evidenced
or purported
by wri
ac
ing, and
30
whether
release, convey,
surrender,
indirectly,
to
with respect
the foregoing,
of
any
is to create,
transfer, or alter, directly or
privilege, or interest
property and, without limitation upon
right,
any
the United States,
or effect of which
intent
in
se
the purpose,
delivery
within
or not done or performed
remedy,
power,
shall include the making,
any assignment,
power,
execution,
conveyance,
or
check,
trust, power of attorney, power
of appointment, bill of sale, mortgage, receipt, agreement,
contract, certificate, gift, sale, affidavit, or statement;
the appointment of any agent, trustee, or fiduciary; the
creation or transfer of any lien; the issuance, docketing,
filing, or the levy of or under any judgment, decree,
declaration,
attachment,
deed, deed of
injunction,
execution,
or other judicial or
administrative process or order, or the service of any
garnishment;
the acquisition of any interest of any nature
whatsoever by reason of a judgment or decree of any foreign
country; the fulfillment of any condition; the exercise of
any power of appointment,
power of attorney, or other power;
or the acquisition,
importation,
disposition, transportation,
exportation, or withdrawal of any security.
Section 570. 318
The term
UNSC
"UNSC
Resolution
Resolution
661.
661"
means
United Nations
Security Council Resolution No. 661, adopted
August 6, 1990,
31
certain transactions
prohibiting
with respect
to Iraq
and
Kuwait.
Section 570. 319 United States.
The term "United
territories
and
jurisdiction
States"
possessions,
or authority
person
"U. S. financial
(including
under
the
means
any U. S.
thereof.
Section 570. 320 U. S. financial
The term
all areas
and
its
the United States,
means
institution.
institution"
that is engaged in the
foreign branches)
of accepting deposits, making, granting,
transferring, holding, or brokering loans or credits, or
purchasing or selling foreign exchange, securities,
business
commodity
futures
or options,
or procuring
purchasers
and
sellers thereof, as principal or agent; including, but not
limited to, depository institutions, banks, savings banks,
trust companies, securities brokers and dealers, commodity
futures
and
options brokers
and
dealers,
forward
contract
foreign exchange merchants, securities and commodities
exchanges, clearing corporations, investment companies,
and
benefit plans, and U. S. holding companies, U. S.
affiliates, or U. S. subsidiaries of any of the foregoing.
employee
This term includes
foreign financial
those branches,
institu ions
offices
which
and
agencies
are located in =he
o~
32
States,
United
bu
t
institutions'
s
not
no such
foreign branches,
offices, or agencies.
erson; U. S. erson.
Section 570. 321 United States
The term
"United States person"
or "U. S. person"
means
resident alien;
juridical person organized under the laws of the United
States or any jurisdiction within the United States,
including foreign branches; or any person in the United
any United
States citizen; permanent
States.
Subpart
D
--
Interpretations
Section 570. 401 Reference to
Except as otherwise
amended
sections.
reference to
specified,
any
section
of this part or to any regulation, ruling, order,
instruction, direction, or license issued pursuant to this
part shall be deemed to refer to the same as currently
amended.
Section 570. 402
Any
Effect of
amendment,
amendment.
modification,
section of this part or of
any
or revocation
order, regulation,
of
any
ruling,
33
instruction, or license issued by or under the direction of
the Director of the Office of Foreign Assets Control shall
not, unless otherwise specifically provided, be deemed to
affect any act done or omitted to be done, or any civil or
criminal suit or proceeding commenced or pending prior to
modification,
such amendment,
forfeitures,
tion, ruling,
be enforced
tion
and
liabilities
instruction,
as
if
or revocation.
under
any such
All penalties,
order, regula-
or license shall continue
or revoca-
modification,
such amendment,
and may
had not been made.
Section 570. 403
Termination
of the
(a) Whenever
a
ac
and
an
interest
of Kuwait.
Government
transaction
isition of
licensed or authorized
by
or
to this part results in the transfer of property
(including any property interest) from the Government of
Kuwait, such property shall no longer be deemed to be
pursuant
property
in which the Government
of Kuwait has or has
had an
interest unless there exists in the property another such
interest, the transfer of which has not been effected
pursuant to license or other authorization.
(b) Unless otherwise specifically provided in a license
or authorization issued pursuant to this part, if property
(including any property interest) is transferred or
attempted
to be transferred
to the
Government
o
Kuwa't,
34
shall be
such property
exists
interest of the
an
Section 570. 404
to be propertY in
deemed
Government
ents from blocked accounts to U. S.
Pa
orters
and
for other obli ations
No
debits
may
be made
to
there
of Kuwait.
e
obligations
which
U. S. persons
to
rohibited.
a blocked account
or other persons,
to
pay
including
for goods, technology or services exported prior to
the effective date, except as authorized pursuant to this
payment
part.
Section 570. 405
bankers
No
Ac
isition of instruments
acce tances.
U. S. person may acquire
including
evidencing
includin
bankers
acceptances,
the obligation
or deal in any obligation,
where
indicate,
the documents
or the U. S. person has
actual knowledge, that the underlying transaction is in
violation of I 570. 201, 570. 204, or 570. 205. This interpretation does not apply to obligations arising from an
underlying
pursuant
transaction
licensed or otherwise
authorized
to this part.
Section 570. 406
Extensions
of credits or loans to Kuwait.
35
(a) The Prohibition
in S 570. 210 app] ies to
of credits or loans in existence on the
effective date, whether by affirmative action or operation
of law.
unlicensed
renewal
(b) The prohibition
in any currency.
loans extended
Section 570. 407
authorized
ents in connection with certain
Pa
transactions.
authorized
Payments
in 8 570. 210 applies to credits or
are authorized
in or pursuant
Section 570. 408
in connection
with transactions
to Subpart E.
Offshore transactions.
(a) The prohibitions
contained
in SS 570. 201 and
570. 206 apply to transactions by U. S. persons in locations
outside the United States with respect to property which the
U. S. person knows, or has reason to know, that the
Government of Kuwait has or has had an interest since the
effective date.
transactions include, but are not
limited to, importation into locations outside the United
States of, or dealings within such locations in, goods or
(b) Prohibited
services of Kuwaiti origin.
1:
United
t
I
"
p""'
States or abroad, purchase,
'Y
insure,
.
sell, 'inance,
36
act as a broker for the sale or transport
transport,
otherwise
deal in, Kuwaiti crude
oil or
petroleum
of, oI
products
refined in Kuwait.
(2)
A
U. S. person may not, within
the United
States or abroad, conduct transactions of any nature
whatsoever with an entity that he knows or has reason to
entity unless the entity is
know is a Kuwaiti Government
licensed by the Office of Foreign Assets Control to conduct
such transactions with U. S. persons.
Section 570. 409 Transshi ments throu
(a) The prohibitions
h
the United States
in 8 570. 205 apply to the
into the United States, for transshipment or
of goods which are intended or destined for Kuwait,
importation
transit,
or an entity operated
from Kuwait.
in 8 570. 204 apply to the
(b) The prohibitions
importation
into the United States, for transshipment
or
transit,
or
of goods of Kuwaiti origin which are intended
destined for third countries.
(c)
interest
Goods in which
which
the Government
are imported
into or transshipped
United States are blocked pursuant
Section 570. 410
countries.
Im
of Kuwait has
orts of Kuwaiti
an
through
to 8570. 201.
oods from third
the
37
into the United States from third
countries of goods, including refined petroleum products,
containing raw materials or components of Kuwaiti origin is
prohibited unless those raw materials or components were
(a) Importation
Iraq or Kuwait prior to the effective date.
In light of the universal prohibition in UNSC Resolution 661
of goods exported from Iraq or Kuwait
on the importation
exported
after
from
6, 1990, substantial transformation of Kuwaitiorigin goods in a third country does not exempt the
third-country products from the prohibitions contained in
August
this part.
(b) Importation
into the United States of goods of
origin which were exported from Kuwait or Iraq on or
after the effective date is prohibited pursuant to S570. 204.
Kuwaiti
Section 570. 411
Ex
orts to third countries.
(a) Exportation of goods or technology (including
technical data and other information) from the United States
to third countries is pronibited if the exporter knows, or
that the goods or technology are
for transshipment to Kuwait (including passage
or storage in, intermediate destinations) without
has reason to know,
intended
through,
third country and without being
substantially transformed or incorporated into manufactured
The exportation of goods and
products in a third country.
technology intended specifically for incorporation or
coming
to rest in
a
38
product is
a third-country
into
nsformation
orma
trans
t
l
substantial
product is to be used in
particular
the
if
prohibited
also
manufactured to fill a Kuwaiti
Kuwait, is being specifically
sales of the particular
the manufacturer's
order, or if
product are predominantly
to Kuwait.
of goods or technology from the United
where the
States to third countries is not prohibited
that:
exporter has reasonable cause to believe
third country
(1) The goods will come to rest in a
or
for purposes other than reexportation to Kuwait; .
third
The technology will come to rest in a
(b) Exportation
(2)
country
for purposes other than reexport to Kuwait.
Section 570. 412 Release of Kuwaiti oods from bonded
warehouse or forei n trade zone.
Section 570. 204 does not prohibit the release from a
bonded warehouse or a foreign trade zone of goods of Kuwaiti
origin imported into a bonded warehouse or a foreign trade
either prior to the effective date or in a transaction
authorized pursuant to this part after the effective date.
Note: Pursuant to 8570.. 201, property in which the
Government of Kuwait has an interest may not be released
unless authorized or licensed by the Office of Foreign
zone
Assets Control.
Section 570. 413
Goods intended
for ex ort to Kuwait.
39
The
prohibitions
goods manufactured,
contained
consigned,
in 5 570. 201 do not apply to
or destined
if
title
subject to 8575. 518,
Kuwait
and not
Kuwait
has never held or received
after the effective date,
and
if
for export to
the Government of
to such goods on or
received from
any payment
of Kuwait with respect to such goods is
placed in a blocked account in a ~ ST financial institution
pursuant to 8575. 503.
the Government
U
Section 570. 414
orts of Kuwaiti
Im
oods and
of
urchases
oods from Kuwait.
The
prohibitions
to the importation
in 8 570. 204
permitted
by an
~
importation
goods and services
of Kuwaiti-origin
described
this part
in 5 570. 201 shall not apply
contained
if
the importation
authorization
However,
of such goods is
or license issued pursuant
any payments
in connection
are subject to the prohibitions
to
with such
contained
in Ss
570. 201 and 570. 210 '
Section 570 ' 415 Setoffs
rohibited.
setoff against a blocked account, whether by
bank or other U. S. person, is a prohibited transfer
8 570. 201 if effected after the effective date.
A
Section 570. 416 Travel transactions
for
ournalistic
a U. S.
under
40
activit
in Kuwait.
(a) Section 570. 207 does not prohibit travel
transactions in Kuwait by persons regularly employed
activity
journalistic
by
recognized
in
newsgathering
organizations.
(b) For purposes
of this part:
(1) a person is considered regularly employed as a
journalist if he or she is employed in a constant or regular
manner
by a recognized
Free-lance journalists
newsgathering
organization.
should have an assignment
from a
travel to
Kuwait, or be able to demonstrate that publication by a
recognized newsgathering organization of a work requiring
such travel is likely.
The latter may be demonstrated
by
providing a resume listing previously-published
free-lance
works or copies of previously-published
works.
recognized
newsgathering
organization
requiring
(2) "Recognized newsgathering
organizations"
include those entities regularly and principally engaged
collecting
transmission
news
by
in
for publication in the public press,
wire services, or broadcast by radio or
television.
(c) Authorized travel transactions are limited to those
incident to travel for the purpose of collecting and
disseminating information for a recognized newsgathering
organization, and do not include travel transactions related
to any other activity in Kuwait.
41
Section 570. 417 Transactions
If
two U. S. persons
have been granted
Kuwait
part authorizing
persons,
they
them
to
amon
controlled
licensed entities.
by
specific licenses pursuant
engage
of
the Government
to this
with U. S.
in transactions
also engage in transactions with each
entity owned or controlled by the Government
may
other. If an
of Kuwait, but which is not a U. S. person, has been granted
a specific license authorizing the entity to engage in
transactions with a U. S. person, that entity may engage in
transactions with a U. S. person controlled by the Government
of Kuwait which has been licensed to operate, provided such
transactions
transactions
come within
included
the scope of authorized
in the U. S. person's
operating
license.
Section 570. 418 Transactions
transaction.
incidental
to
a
licensed
to a licensed
transaction and necessary to give effect thereto is also
authorized, except a transaction by an unlicensed, blocked
person or involving an unlicensed debit to a blocked
(a)
Any
transaction
ordinarily
incident
account.
(h)
Kuwait
~Exam
le:
to complete
activities
by
A
a
license authorizing the Government ot
securi ies sale a'so authorizes all
other parties required
to comple e the sale,
42
nsactions
i
ttransac
including
l d'
agents,
--
the buyer, brokers,
transfer
etc.
banks,
Subpart E
by
Licenses, Authorizations,
and Statements
of
Licensing Policy
Section 570. 501 Effect of license or authorization.
license or other authorization contained in this
part, or otherwise issued by or under the direction of the
Director of the Office of Foreign Assets Control, shall be
effected
deemed to authorize or validate any transaction
(a)
No
prior to the issuance of the license, unless specifically
provided in such license or authorization.
or license
(b) No regulation, ruling, instruction,
this part unless
the regulation, ruling, instruction, or license is issued by
the Office of Foreign Assets Control and specifically refers
to this part. No regulation, ruling, instruction, or
license referring to this part shall be deemed to authorize
any transaction prohibited by any provision of this chapter
unless the regulation, ruling, instruction or license
specifically refers to such provision.
(c) Any regulation, ruling, instruction, or license
authorizing any transaction otherwise prohibited under this
authorizes
any
transaction
prohibited
under
43
part has the effect of removing a prohibition or
prohibitions contained in Subpart 8 from the transaction
but only to the extent specifically stated by its terms.
Unless the regulation, ruling, instruction, or license
otherwise
specifies,
such an authorization
I
does not create
right, duty, obligation, claim, or interest in, or with
respect to, any property which would not otherwise exist
any
under
ordinary
Section 570. 502
principles
of law.
Exclusion from licenses and authorizations.
Director of the Office of Foreign Assets Control
reserves the right to exclude any person, property, or
transaction from the operation of any license, or from the
The
privileges therein conferred, or to restrict the
applicability thereof with respect to particular persons,
property, transactions, or classes thereof. Such action
shall be binding upon all persons receiving actual or
constructive notice of such exclusion or restriction.
Section 570. 503
Pa
in U. S. financial
ents and transfers
to blocked accounts
institutions.
of funds or transfer of credit or other
assets, including any payment or transfer by any U. S. person
outside the United States, to a blocked account in a U. S.
financial institution in the name of the Government of
(a)
Any
payment
44
Kuwait
is
exchange
hereby
authorized,
transactions,
including
provided
incidental
that such
payment
foreign
or
transfer shall not be made from any blocked account if such
directly or indirectly, a
payment or transfer represents,
transfer of any interest of the Government of Kuwait to any
other country or person.
(b) This section does not authorize
transfer to
any blocked
account held in a
any payment
name
or
other than
of Kuwait where such government is
the ultimate beneficiary of such payment or transfer.
(c) This section does not authorize any payment or
transfer of credit comprising an integral part of a
that of the Government
effected without the subsequent
issuance of a further license.
(d) This section does not authorize the crediting of
the proceeds of the sale of securities or other assets, held
in a blocked account or a sub-account thereof, or the income
derived from such securities or assets, to a blocked account
or sub-account, under any name or designation which differs
from the name or designation of the specific blocked account
or sub-account in which such securities or assets were or
transaction
which cannot be
are held.
(e) This section does not authorize
any payment
or
transfer from a blocked account in a U. S. financial
institution to a blocked account held under any name or
designation which differs from the name or designation of
45
the specified blocked account or sub-account
payment
or transfer
(f)
The
is
from which
the
made.
authorization
in paragraph
(a) of this section
is subject to the condition that written notification from
the U. S. financial institution receiving an authorized
payment or transfer is furnished to the Office of Foreign
Assets Control,
Blocked Assets Section, within
days from the date of payment
notification
shall confirm that the
been deposited
this part,
or transfer.
payment
10 business
This
or transfer
has
in a blocked account under the regulations
in
shall provide the account number, the name
and address of the Government of Kuwait entity in whose name
the account is held, the name and address of the transferee
and the amount of the payment or
U. S. financial institution,
and
transfer.
(g) This section authorizes transfer of the funds of a
blocked demand deposit account to a blocked interest-bearing
account under the same
name
or designation
as was the
demand
deposit account, as required pursuant to S 570. 203 or at the
instruction of the depositor, at any time. If such transfer
is to a blocked account in a different U. S. financial
institution, the transferee financial institution must
furnish,
within
the notification
10 business
described
transfer,
(f) of this section
days of the date of
in paragraph
to the Office of Foreign Assets Control, Blocked Assets
Section.
46
section authorizes
(h) This
between
in U. S. financial
blocked accounts
of assets
institutions at
the transfer
of the depositor for purposes of investment
of assets in which the Government of Kuwait.
and reinvestment
has an interest, as authorized in 8 570. 512. If such
transfer is to a blocked account in a different U. S.
financial institution, the transferee financial institution
the instruction
must
furnish,
10 business
within
days
of the date of
transfer, the notification described in paragraph (f) of
this section to the Office of Foreign Assets Control,
Blocked Assets Section.
Section 570. 504
securities
Com
and
letion of certain forei
commodities transactions.
(a) U. S. financial
institutions
n exchan
e
to
perform and complete in accordance with its terms or, in
agreement with the Government of Kuwait, to close out,
offset, or liquidate, individually or on a net basis with
subcontracts or other contracts, any contract with or on
are authorized
behalf of the Government
noted in paragraph
securities,
of Kuwait, except as otherwise
(d) below, for foreign exchange,
interest rate transactions
(including, without limitation, spot, forward, option,
and futures transactions),
and commodity option, swap,
and
futures
of
currency,
transactions
margin or settlement
and
(including
variation
the posting or payment
with respect
to
swap,
47
transactions described above, provided the contract was
entered into prior to the effective date and any of the
requirements
following
(1)
Any
funds,
is
met:
currency,
securities,
or other
assets to be paid or delivered to the Government of Kuwait
are credited to a blocked account in the name of the entity
of the Government of Kuwait with which, or on whose behalf,
the transaction was executed; or
(2) Any funds, currency, securities, or other
assets to be paid or delivered to the Government of Kuwait
are credited to a blocked account in the name of the entity
of the Government of Kuwait and in the financial institution
and location designated in the original payment instructions
or terms of settlement or delivery for that contract;
provided
that the country in
which payment,
settlement,
or
occurs has in place an arrangement satisfactory to
the Office of Foreign Assets Control for ensuring that
Government of Kuwait assets in such accounts are blocked or
delivery
restricted;
or
(3) All funds, currency, securities, or other
assets due to the Government of Kuwait in connection with
such transaction were paid or delivered to the Government of
prior to the effective date.
(b) All transactions by U. S. persons incidental
transactions authorized in paragraph (a) are also
Kuwait
authorized.
to the
48
This section does not authorize
the crediting
of
securities, or other assets received
of Kuwait in a
by or for the benefit of, the Government
transaction authorized in paragraph (a) to a blocked account
the funds,
currency,
or sub-account
or designation
for the Government of Kuwait under any name
which differs from the name or designation of
the specific blocked account or sub-account
in which the
assets utilized by, or on behalf of, the Government
were originally held.
Kuwait in such transaction,
Section 570. 505
Com
of
letion of certain transactions
related to bankers acce tances authorized.
(a) Persons other than the Government
sell,
authorized
to
buy,
Government
of
Kuwait
af
Kuwait
are
satisfy obligations with
respect to bankers acceptances, and to pay under deferred
payment undertakings,
involving an interest of the
and
as long as the bankers
created or the deferred payment
prior to the effective date.
undertakings
acceptances were
were incurred
(b) Persons other than the Government
of Kuwait are
authorized to buy, sell, and satisfy obligations with
respect to bankers acceptances, and to pay under deferred
payment
undertakings,
exportation
an
involving
the importation
or
of goods to or from Kuwait that do not involve
interest of the Government of Kuwait as long as the
49
acceptances or the deferred payment undertakings
were accepted prior to the effective date.
bankers
(c) Nothing
in this section shall authorize
or permit a
debit to a blocked account. Specific licenses for the
debiting of a blocked account may be issued on a case-bycase basis.
Section 570. 506
Pa
obli ations to
ent b
the Government
of Kuwait of
ersons within the United States
authorized.
of funds after the effective date by,
through, or to any U. S. financial institution or other U. S.
person solely for the purpose of payment of obligations of
(a) The transfer
of Kuwait to persons or accounts within the
United States is authorized, provided that the obligation
arose prior to the effective date, and the payment requires
Propert r is not blocked by
no debit to a blocked account.
virtue of being transferred or receive-" purs ant to this
the Government
section.
(b)
A
distribute
person receiving
all or part of that
under
payment
to
this section
any
of Kuwait
institution.
Section 570. 507
may
person,
that any such payment to the Government
be to a blocked account in a U. S. financial
provided
must
payment
Certain ex orts to Kuwait authorized.
50
(a) All transactions ordinarily incident to the
exportation of any item, commodity, or product from the
States to or destined for Kuwait are authorized if:
(1) such exports would ordinarily be authorized
administered by the
under one of the following regulations
Department of Commerce: 15 CFR 371.6 — General license
United
(accompanied
BAGGAGE
371.13
— General
baggage);
and unaccompanied
license
GUS
its
relief or
personnel
and
official
agencies
its
developmental
reexportation
authorized
not otherwise
or
in this part are
to the procedures
the Office of Foreign Assets
unless licensed pursuant
in Section 570. 801 by
described
use of the
(excluding
agencies).
(b) All transactions related to exportation
prohibited
and
or,
(2) such exports are for the
United Nations,
to personnel
(shipments
agencies of the U. S. Government);
15 CFR
Control.
Section 570. 508
from Kuwait
Im
origin,
of household
including
use, of persons arriving
indirectly
and
ersonal effects
authorized.
The importation
Kuwaiti
ort of household
baggage
and personal
and
effects of
articles for
family
in the United States directly
is authorized.
or
Articles included in
such effects may be imported without limitation provided
they were actually used by such persons or their family
from Kuwait
51
members
sale,
abroad,
and
are not intended
are not otherwise
Section 570. 509
for
prohibited
shi ments of oil under contract
other person or for
from importation.
ents and transfers
Pa
United States
any
authorized
and en
for
route tc. the
rior to the effective date.
(a) Oil of Kuwaiti origin or oil in which the
of Kuwait has an interest may be imported into
the United States only if:
(1) prior to the effective date, the oil was
loaded for ultimate delivery to the United States on board
vessel in Iraq, Kuwait, or a third country;
(2) the oil was imported into the United States
Government
a
before 11:59 p. m. Eastern Daylight Time, October 1, 1990;
and
(3) the bill of lading accompanying the oil was
issued prior to the effective date.
(b) Any payment owed or balance not paid to or for the
benefit of the Government of Kuwait prior to the ef fective
to paragraph (a) must be paid
into a blocked account in a U. S. financial institution.
(c) Transactions conducted pursuant to this section
must be reported in writing to the Office of Foreign Assets
Control, Blocked Assets Section, no later than 10 days a f er
date for oil imported
pursuant
the date of importation.
52
this provision have
been completed prior to [publication date]. The text of this
section is included for the convenience of the user.
Note:
Transactions
Section 570. 510 Pa
and
authorized
by
ents and transfers
services ex orted to Kuwait
for oods
rior to the effective
authorized
date.
(a) Specific licenses
basis to permit
payment
may
under
by a U. S.
be issued on a case-by-case
a financing
arrangement
institution, from a
blocked account or otherwise, of amounts owed to or for the
benefit of a person with respect to goods or services
exported prior to the effective date directly or indirectly
to Kuwait, or to third countries for an entity operated from
Kuwait, or for the benefit of the Government of Kuwait,
where the license application presents evidence satisfactory
to the Office of Foreign Assets Control that:
(1) the exportation occurred prior to the
effective date (such evidence may include, e. g. , the bill of
lading, the air waybill, the purchaser's written confirmarequiring
payment
financial
tion of completed services, customs documents,
documents);
and insurance
and
(2)
if
delivery
or performance occurred after the
effective date, due diligence was exercised to divert
delivery of the goods from Kuwait and to effect final
53
of the goods to a non-prohibited destination, or to
prevent performance of the services.
(b) This section does not authorize exportation or the
performance of services after the effective date pursuant to
a contract entered into or partially performed prior to the
effective date.
delivery
(c) Transactions conducted under specific licenses
granted pursuant to this section must be reported in writing
to the Office of Foreign Assets Control, Blocked Assets
Section, no later than 10 days after the date of payment.
criteria
to the issuance of
licenses authorizing payment from an account of or held by a
blocked U. S. bank owned or controlled by the Government of
(d) Separate
may
be applied
Kuwait.
Section 570. 511 Extensions
and renewals
authorized.
(a) The extension or renewal, at the request of the
e-"er of
account party, of a letter of credit or a s-andby
credit issued or confirmed by a U. S. financial institution
is authorized.
(b) Transactions
conducted
pursuant
to this section
to the Office of Foreign Assets Control,
Blocked Assets Section, within 10 days after completion of
the transaction.
must
be reported
Section 570. 512
Investment
and
reinvestment
O' Govern~e.
.
54
of
U. S.
to invest
the
name
funds held in blocked accounts.
Kuwait
and
financial
institutions
are hereby authorized
reinvest assets held in blocked accounts in
of the
Government
of Kuwait, subject to the
conditions:
following
assets representing such investments and
reinvestments are credited to a blocked account or
sub-account which is in the name of the Government of Kuwait
and which is located in the United States or within the
possession or control of a U. S. person;
(1)
The
(2) The proceeds of such investments
reinvestments
sub-account
the
and
are not credited to a blocked account or
under any name or designation
which
differs
from
or designation
of the specific blocked account or
sub-account in which such funds or securities were held; and
(3) No immediate financial or economic benefit
accrues to the Government of Iraq, a person in Iraq, or a
name
person in Kuwait.
U. S. persons
(b)(1)
authorization
seeking to avail themselves
of this
register with the Office of Foreign
Assets Control, Blocked Assets Section, before undertaking
transactions authorized under this section.
(2) Transactions conducted pursuant to this
section must be reported to the Office of Foreign Assets
Control,
completion
must
Blocked Assets Section, within
of the transaction.
10 days
after
55
Section 570. 513 Transactions
related to telecommunications
authorized.
All transactions
of
U. S. common
the receipt and transmission
Kuwait
are authorized,
of telecommunications
provided
blocked account in a
All transactions
to
common
any payment
involving
owed
to the
is paid into
U. S. financial institution.
Section 570. 514 Transactions
transfers
that
of Kuwait or persons in
Government
carriers with respect to
by U. S.
Kuwait
a
related to mail authorized.
persons,
including
payment
and
carriers, incident to the receipt or
of mail between the United States and Kuwait
are authorized, provided that mail is limited to items not
transmission
exceeding
12 ounces.
Section 570. 515
authorized.
Fees for
rofessional
services
Specific licenses may be issued on a case-by-case basis
to permit payment to U. S. persons providing professional
services to the Government of Kuwait including, but not
limited to, legal, accounting, and investment advisory
services.
Section 570. 516
56
and
trademarks
atents
Transactions
co
ri
hts authorized.
related to the registration
and renewal
0 f f ice or the
jn the United States Patent and Trademark
States Copyright Office of patents, trademarks, and
copyrights in which the Government of Kuwait or a person in
United
has an
Kuwait
interest are authorized.
Section 570. 517
Procedures
transactions
initiated
(a) Goods awaiting
effective date
Service
on
and
for ex ort
rior to effective date.
established
exportation
seized or detained
to
Kuwait
. by
on
the
the U. S. Customs
the effective date or thereafter
may
be released
to the exporter, provided the following documents are filed
with Customs officials at the port where such goods are
located:
(1) A copy of the contract governing the
exportation (sale or other transfer) of the goods to Kuwait
or, if no contract exists, a written explanation of the
circumstances
of exportation,
including
in either case a
description of the manner and terms of payment received or
to be received by the exporter (or other person) for, or by
reason of, the exportation of the goods;
(2) An invoice, bill of lading, or other
documentation
fully describing
the goods; and
57
(3)
A
statement
by
the exporter substantially
in
form:
the following
received from or
Any amount
on
behalf of the Government
of Kuwait by reason of the attempted exportation of the
goods released to [name of exporter] by the U. S.
Customs Service on [date], and fully described in the
attached documents, has been or will be placed into a
blocked account in a U. S. bank and the Office of
Foreign Assets Control, Blocked Assets'Section, will be
immediately notified.
[Name of exporter] agrees to
fully indemnify the U. S. Government for any amount
ultimately determined by a court of competent jurisdiction to be due or payable to or for the benefit of any
person by reason of the failure of [name of exporter]
to properly pay into a blocked account any amount
received for the goods from or on behalf of the
of Kuwait.
Government
to
waive
[Name
all claims (1) against
and placed
into
later authorized
a blocked
by law,
any
account,
except as
the U. S. Government
disposition
of the
r;. ay
be
or license,
regulations,
(2) against
amounts
also agrees
pa, ~en s received
of exporter]
with regard
and
to the
placed into a blocked
account.
The statement
upon
be dated and signed
by
the exporter or
to sign on the exporter's behalf.
Customs Service may release the goods to the exporter
receipt of the documentation and sta event described
by a person
The
should
authorized
58
above
it is satisfied
provided
I
that all customs laws
regulatj. ons have been complied with,
o f such hold harmless assurances as
approprj.
ate.
Customs
will be forwarded
Control
for review
The documentation
shal
l
determine
and statement
to be
received by
to the Office of Foreign Assets
appropriate action.
Certain standb
Section 570. 518
erformance
and
the execution
including
it
and
letters of credit
and
bonds.
of law,
payment into a blocked account in a U. S. financial
institution by an issuing or confirming bank under a standby
letter of credit in favor of a Kuwaiti beneficiary is
prohibited by I 570. 201 and not authorized, notwithstanding
the provisions of I 570. 503, if (i) a specific license has
been issued pursuant to the provisions of paragraph
(b) of
this section, or (ii) 10 business days have not expired
after notice to the account party pursuant to paragraph (b)
of this section.
(2) Nothing in this section shall affect the
obligation of an issuing or confirming bank to make payment
(a)(1)
Notwithstanding
any
other provision
into a blocked account on behalf of an entity owned or
controlled by the Government of Kuwait pursuant to a standby
letter of credit if
such entity
is (i) licensed
by the
Office of Foreign Assets Control to transact business with
U. S. persons, or (ii) listed in Appendix A to this part as
"Not Controlled/Not
Operate. "
Restricted" or "Controlled/Licensed
to
59
(b) Whenever
receive such
demand
it
of credit,
an
issuing or confirming
for
payment
under
bank
shall
letter
such a standby
shall promptly
notify the account party. The
account party may then apply within five business days for a
specific license authorizing the account party to establish
a blocked account on
books in the name of the Kuwaiti
in the amount payable under the credit,
beneficiary
of payment
its
by
the issuing or confirming
account and reimbursement
therefor
by
bank
in lieu
into a blocked
the account party.
in this section relieves any such bank or such
Nothing
account party from giving any notice of defense against
or reimbursement
payment
(c)
Where
a standby
under
that is required
there is outstanding
letter of credit,
bank has been enjoined
confirming
by
a demand
and
applicable
for
the issuing
from making
law.
payment
or
payment,
upon
of the injunction, the account party may apply for a
specific license for the same purpose and in the same manner
as that set forth in paragraph (b) of this section. The
issuing or confirming bank shall not make payment under the
removal
(1) 10 business days have
expired since the bank has received notice of the removal of
the injunction and (2) a specific license issued to the
account party pursuant to the provisions of this paragraph
letter of credit
standby
unless
to the bank.
necessary to assure the availability
has not been presented
(d)
funds
If
the Director of the Office of Foreign Asse s
at any time require the payment of the a~ouzts
blocked,
Control
may
of the
60
due under
letter of credit described in
any
(a) of
Paragraph
thj s sect j.on into a blocked account in a U. S . f inancia'1
jnstitution or the supplying of any form of security deemed
necessary.
in this section precludes
(e) Nothing
letter of credit or
on any standby
Kuwaiti
to
under the standby
demand
from a
letter of credit.
not affect the obligation of the
(f) This section does
various parties to the instruments
if
other person from at
or from raising any other legal defense
beneficiary
payment
of the
the legality
contesting
any time
any
the account party
the instruments
and payments
covered by this section
thereunder
are subsequently
unblocked.
(g) The section does not authorize
reimburse
beneficiary
a non-U.
S.
under
a
any U. S. person
to a Kuwaiti
standby letter of credit, except
bank
for
to
payment
by
into a blocked account in accordance with 8 570. 503
or paragraph (b) or (c) of this section.
payments
(h)
A
paragraph
specific license under
or (c) of this section shall certify to the
person receiving
(b)
a
Office of Foreign Assets Control within 5 business days
after receipt of that license that it has established the
blocked account on its books as provided in those
paragraphs.
may
However,
be extended
Assets Control
upon
when
in appropriate
cases, this time period
to the Office of Foreign
application
the account party has filed a petition
61
court seeking a judicial order barring
payment by the issuing or confirming bank.
(i) For the purposes of this section, (1) the term
with an appropriate
&&standby
letter of credit" shall
of, or
securing performance
payments
or deposits under,
mean
repayment
a
a
letter of credit
of
any advance
contract, or
any
similar
obligation in the nature of a performance bond; (2) the term
"account party" shall mean the person for whose account the
standby letter of credit is opened; and (3) the term
"Kuwaiti beneficiary"
in Kuwait,
person
(iii)
(ii)
official
an
mean
a
beneficiary
entity operated
that is (i)
from Kuwait,
a
or
of Kuwait.
the Government
Section 570. 519
shall
Certain
ersonnel
im
orts for di lomatic or
authorized.
to the importation
of any goods or services into the United States destined for
official or personal use by diplomatic and support personnel
employed by the recognized Government of Kuwait are
All transactions
authorized,
ordinarily
unless the importation
incident
is otherwise prohibited
by law.
Donations of food to relieve
Section 570. 520
sufferin authorized.
human
62
(a) Specific licenses
may
be issued on a case-by-case
to Kuwait of donated food
intended to relieve human suffering.
(b) In general, specific licenses will only be granted
for donations of food to be provided through the United
basis to permit exportation
Nations
in accordance with United Nations
661 and 666 and in cooperation
Resolutions
International
of the
Committee
or other
by them
or in such other manner as
or under their supervision,
may
Security Council Resolution
Security Council resolutions,
Nations
under United
be approved
with the
agencies for distribution
humanitarian
appropriate
Red Cross
Security Council
666 and any other applicable
in order to ensure that such donations
reach the intended
beneficiaries.
(c) Applications for specific licenses pursuant to
paragraph (a) shall be made in advance of the proposed
exportation,
the following
and provide
(1) the nature,
quantity,
information:
value,
and intended
use
of the donated food; and
(2) the terms and conditions
including
and
the intended
conditions
of distribution
the United Nations
body subordinate
method
of distribution,
of compliance with such terms
as
may
have been adopted
by
Security Council or a duly authorized
thereto to govern the shipment of
foodstuffs under applicable United Nations Security Council
resolutions, including Resolutions 661 and 666.
63
Section 570. 521
Certain e
ortations of medical su
lies
authorized.
(a) Specific licenses
may
be issued on a case-by-case
basis to permit exportation to Kuwait of supplies intended
strictly for medical purposes, in accordance with the
provisions of United Nations Security Council Resolutions
661 and 666, and other applicable
Security Council
resolutions.
(b)
In general,
specific licenses will
only be granted
for the exportation of medical supplies through the
International Committee of the Red Cross or other
appropriate humanitarian agencies for distribution by them
or under their supervision, or in such other manner as may
be approved under applicable Security Council resolutions,
in order to ensure that such supplies reach the intended
recipient.
(c) Applications for specific licenses pursuant to
(a) shall be
paragraph
exportation,
made
and provide
(1) the nature,
of the medical supplies;
including
in advance
the following
quantity,
of the proposed
information:
value,
and intended
(2) the terms and conditions of distribution,
the intended method of compliance with such terms
of distribution as may have been adopted
the United Nations Security Council or a duly authorized
and
use
conditions
by
64
thereto to govern the shipment of medical
ies under applicable Security Council resolutions.
body subordinate
supp]
Subpart
F
--
Reports
Section 570. 601 Re
Every person
ired records.
engaging
in any transaction
subject to the
accurate
of this part shall keep a full and
record of each such transaction in which that person
engages, regardless of whether such transaction is effected
pursuant to license or otherwise, and such record shall be
provisions
for examination
date of such transaction.
available
Section 570. 602
Every person
form
Re
for at least
orts to be furnished
is required to furnish
may
years after the
on demand.
under
oath, in the
to time and at any
complete information relative to
of reports or otherwise,
time as
2
be required,
from time
transaction, regardless of whether such transaction is
effected pursuant to license or otherwise, subject to the
provisions of this part. Such reports may be required to
any
include the production
of
any books
letters or other papers, connected
of account, contracts,
with any such transaction
65
in the custody or control of the person
or property,
to
transactions
transactions
required
make
may
such
reports.
either before or after such
The Director of Foreign Assets
be required
are completed.
Control may, through
Reports with respect to
any person
or agency, conduct
investigations, hold hearings, administer oaths, examine
witnesses, receive evidence, take depositions, and require
by subpoena
the attendance
of witnesses
and testimony
and
of all books, papers, and documents relating
to any matter under investigation, regardless of whether any
report has been required or filed in connection therewith.
the production
Section 570. 603
Re
ort
on
certain corres ondent
bank
accounts.
(a) U. S. financial institutions are required to file a
monthly report concerning any bank account held by them in
the name of a bank in which the Government of Kuwait holds
interest of 10% or more (i. e. , a correspondent
bank account).
(b) The report, consisting of a copy of a monthly bank
statement for the account, must (1) include a summary of the
an equity
average balance
report,
are
made
(2)
list
in the account for the period covered by the
the actual date on which account stateme~-s
available
to account holders,
exact location at which
credits to the account
docur.
may
.
and
ents showing
be reviewe"
and
(3) state the
debits
the
na-,
from and
,
,
e an&
66
of a person responsible for the content of
(The report should not include copies of
number
telephone
report.
credits. )
report filed pursuant to this section
showing
documents
debits
and
must arrive
(c) A
at the Office of Foreign Assets Control, Compliance Section,
no later than the last business day of the month following
the activity
in the report.
summarized
The
report
may
be
sent by facsimile to (202) 377-7222 or mailed to the
address:
following
Compliance
Unit
—
603
Office of Foreign Assets .Control
U. S. Department
1500 Pennsylvania
Washington,
Subpart
G
--
D. C.
of the Treasury
Avenue,
N. W.
--
2131
Annex
20220.
Penalties
Section 570. 701 Penalties.
(a) Section 586E of the Iraq Sanctions Act of 1990,
contained
in the Foreign Operations
Appropriation
1979, provides
Act of 1990, dated November
and
5, 1990, 104 Stat.
that:
Notwithstanding
Emergency
Authorization
section 206 of the International
Economic Powers Act (50 U. S. C. 1705) and
67
section 5(b) of the United Nations Participation
1945 (22
U
(1)
A
be imposed
~
Act of
)--
S C. 287c (b)
~
civil penalty of
on any person
not to exceed $250, 000
who,
after the
may
of
enactment
this Act, violates or evades or attempts to violate or
evade Executive Order Number
12722, 12723, 12724,
12725, or any license, order, or regulation
under such Executive Order;
issued
(2) Whoever after the date of enactment
of the
Iraq Sanctions Act of 1990 willfully violates or evades
or attempts to violate or evade Executive Order Number
12722, 12723, 12724, or 12725 or any license,
regulation
order, or
issued under any such Executive Order--
(i) shall,
conviction,
upon
if a person
(ii) if a natural
$1, 000, 000
be fined not more than
other than a natural
person,
shall
upon
conviction,
be fined not more than $1, 000, 000 be imprisoned
more than
Any
12 years,
attempt
participates
described
imposition
in a violation,
in paragraph
specified in subparagraph
provides:
agent of any corporation
(a)
of the fine, imprisonment
(b) Attention
for not
or both.
officer, director, or
knowingly
or
person;
(a) (2)
is directed to
evasion,
may
who
or
be punished
by
(or both)
(ii) of
that. paragraph.
18 U. S-C. 1001, which
68
Whoever,
in any matter within
the jurisdiction
of
any
or agency of the United States knowingly
falsifies, conceals or covers up by any
department
willfully
and
trick, scheme, or device a material fact, or makes any
false, fictitious or fraudulent statements or
representation or makes or uses any false writing or
document knowing the same to contain any false,
fictitious or fraudulent statement or entry, shall be
fined not more than $10, 000 or imprisoned
not more than
five years, or both.
(c) Violations
relevant provisions
of this part may also be subject to
of the Customs laws and other applicable
laws.
Section 570. 702
(a)
When
re
Pre enalt
ired:
If
notice.
the Director of the Office of
Foreign Assets Control has reasonable
cause to believe that
there has occurred a violation of any provision of this part
or a violation of the provisions of any license, ruling,
regulation, order, direction or instruction issued by or
pursuant to the direction or authorization
of the Secretary
of the Treasury pursuant to this part or otherwise under the
International
Emergency
Economic Powers Act, and the
Director determines that further proceedings are warranted,
he shall issue to the person concerned a notice of his
69
intent to impose a monetary penalty. The prepenalty notice
shall be issued whether or not another agency has taken ani
action with respect to this matter.
(b) Contents.
(1) Facts of violation. The prepenalty notice
shall describe the violation, specify the laws and regulations allegedly violated, and state the amount of the
proposed
monetary
penalty.
(2) Ri ht to
resentations.
make
The prepenalty
notice also shall inform the person of his right to make a
written presentation within 30 days of mailing of the notice
as to why a monetary penalty should not be imposed, or, if
imposed,
why
it
Section 570. 703
should
be in a
Presentation
lesser
amount
res ondin
to
than proposed.
re enalt
notice.
(a) Time within which to res ond. The named person
shall have 30 days from the date of mailing of the
prepenalty
notice to
make
a
written
presentation
to the
Director.
(b) Form and contents
of written
resentation.
The
particular form, but
shall contain information sufficient to indicate that it is
in response to the prepenalty notice. It should contain
responses to the allegations in the prepena'ty notice and
set forth the reasons why the person believes =he pena]t;
written
presentation
need not be in any
70
should
not be imposed
lesser
amount
No
if
imposed,
why
it
should
be in a
than proposed.
Section 570. 704
(a)
or,
Penalt
notice.
If, after
violation.
considering
any
to the prepenalty notice and
that there was
any relevant facts, the Director determines
notice,
no violation by the person named in the prepenalty
he promptly shall notify the person in writing of that
presentations
made
determination
and
in response
that
(b) Violation.
no monetary
If, after
penalty
considering
will be imposed.
any
presentations
to the prepenalty notice, the Director
determines that there was a violation by the person named in
the prepenalty notice, he promptly shall issue a written
notice of the imposition of the monetary penalty to that
made
in response
person.
Section 570. 705
Referral to United States
De
artment
of
Justice.
In the event that the person named does not pay the
penalty imposed pursuant to this subpart or make payment
acceptable to the Director within 30 days of
the mailing of the written notice of the imposition of the
penalty, the matter shall be referred to the United States
arrangements
71
DePartment
of Justice for appropriate
penalty
in a
civil suit
Subpart
H
--
Procedures
(a) General
in a Federal
licenses.
issued authorizing
under
General
appropriate
action to recover the
district court.
licenses have been
terms and conditions
certain types of transactions which are subject to the
prohibitions contained in Subpart B of this part. All such
licenses in effect on the date of publication are set forth
in Subpart E of this part. It is the policy of the Office
of Foreign Assets Control not to grant applications for
specific licenses authorizing transactions to which the
provisions of an outstanding general license are applicable.
Persons availing themselves of certain general licenses may
to file reports and statements in accordance
Failure
with the instructions specified in those licenses.
to file such reports or statements will nullify the
authority of the general license.
(b) S ecific licenses.
be required
(1) General course of rocedure. Transactions
subject to the prohibitions contained in Subpart B of this
part which are not authorized by general license ma, be
effected only
under
specific licenses.
72
(2)
Applications
transactions
filed
by
lications for s ecific licenses.
for specific licenses to engage xn any
prohibited by or pursuant to this part
A
letter or
Foreign Assets Control.
Any
person having
or proposed transaction
transaction
form with the
application
on an
may
Office of
interest in
an
file
be
may
an
a
application
for a license authorizing such transaction, but the
applicant for a specific license is required to make full
disclosure of all parties in interest to the transaction so
that a decision
on
the application
facts
of all relevant
knowledge
location of the persons
who know
full
so that the identity
may
and
be made with
about the transaction
and
may
in the event of inquiry.
be easily ascertained
to be su lied. The applicant
specified by relevant
must supply all information
instructions and/or forms, and must fully disclose the names
of all the parties who are concerned with or interested in
the proposed transaction.
If the application is filed by an
agent, the agent must disclose the name of his principal(s).
Such documents as may be relevant shall be attached to each
application as a part of such application except that
documents previously filed with the Office of Foreign Assets
(3) Information
Control may, where appropriate,
reference.
further
information
determination
an
Applicants
applicant
by
as
may
is
be incorporated
by
to furnish such
necessary to a proper
be required
deemed
the Office of Foreign Assets Control-
or other party in interest, desires to present
73
additional
he may
or discuss or argue the application,
do so at any time before or after decision.
information
Arrangements
for oral presentation
Office of Foreign Assets Control.
(4) Effect of denial.
does not preclude
filing of
a further
party in interest
the reopening
of
at
any time
be made with the
denial of a license
The
application.
may
should
an
The
or the
application
applicant
or any other
request explanation
reasons for a denial by correspondence
of the
or personal
interview.
(5) Re orts under s
ecific licenses.
As a
for the issuance of any license, the licensee may
be required to file reports with respect to the transaction
covered by the license, in such form and at such times and
places as may be prescribed in the license or otherwise.
(6) Issuance of license. Licenses will be issued
condition
the Office of Foreign Assets Control acting on behalf of
the Secretary of the Treasury or licenses may be issued by
by
acting directly or through any
person, agency, or instrumentality.
the Secretary of the Treasury
specifically designated
(c) Address. License applications, reports, and
inquiries should be addressed to the appropriate section or
individual within the Office of Foreign Assets Control, or
to its Director, at the following address:
Office of Foreign Assets Control
U. S. Department
1500 Pennsylvania
of the Treasury
Avenue,
N. W. , Annex
74
Washington,
Section 570. 802
D. C. 20220.
Decisions.
Office of Foreign Assets Control will advise each
applicant of the decision respecting filed applications.
The decision of the Office of Foreign Assets Control acting
The
on
behalf of the Secretary of the Treasury
an
application
Section 570. 803
to
final agency action.
shall constitute
modification
Amendment
with respect
or revocation.
of this part and any rulings, licenses,
whether general or specific, authorizations,
instructions,
The
provisions
orders, or forms issued hereunder
may
be amended,
modified,
or revoked at any time.
(a) All rules and other public documents
the Secretary of the Treasury
upon
are issued
recommendation
by
of the
Director of the Office of Foreign Assets Control. In
general, rulemaking by the Office of Foreign Assets Control
involves foreign affairs functions of the United States, and
for that reason is exempt from the requirements under the
Administrative
proposed
Procedure
rulemaking,
Act (5 U. S. C. 553) for notice of
opportunity
for public
comment,
and
75
delay in effective date.
possible, however,
Wherever
it
is
the practice of the Office of Foreign Assets Control to
receive written submissions or hold informal consultations
with interested
parties before the issuance of
any
rule or
other public document.
interested
petition the Director of
the Office of Foreign Assets Control in writing for the
issuance, amendment, or repeal of any rule.
(b)
Any
person
Section 570. 805 Dele ation
b
may
the Secretar
of the
action which the Secretary of the Treasury is
authorized to take pursuant to Executive Order No. 12723
Executive Order No. 12725 may be taken by the Director,
Any
and
Office of Foreign Assets Control, or by any other person to
authority
whom the Secretary of the Treasury has delegated
so to
act.
Section 570. 806 Rules
information.
availabilit
overnin
of
(a) The records of the Office of Foreign Asse s Control
which are required by 5 U. S. C. 552 to be made available to
the public shall be made available in accordance with the
definitions, procedures, payment of fees, and other
provisions
of the regulations
on
the Disclosure
o.'
Records
76
of the Office of the Secretary and of other bureaus and
offices of the Department issued under 5 U. S.C. 552 and
a Part 1 of this Title 31 of the Code of Federal
zs e as
pu blished
Regulations.
(b)
Any
or by writing
Department
Sub
for use in connection with the
Assets Control Regulations
Kuwaiti
Annex,
form issued
of the Treasury,
--
1500 Pennsylvania
or
D. C. 20220,
Pa erwork
Section 570. 901
Reduction
by
nationals
Avenue,
N. W. ,
calling (202) 566-2701.
GOVERNMENTAL
ENTITIES
has been asked about the status
in which the Government
may
have an
of Kuwait or
interest for purposes of
Executive Order Nos. 12722-12725.
Based on information
available
to the Office of Foreign Assets Control, the
following
lists
have been compiled.
entities listed as "Controlled/Blocked" have
determined to be controlled by the Government of
The
and/or
blocked
the Government
entities.
U. S.
[Reserved].
Department
various entities
Kuwaiti
in person
Act
APPENDIX A TO PART 570--KUWAITI
The Treasury
be obtained
to the Office of Foreign Assets Control,
Washington,
art I
may
of Iraq
and should
been
Kuwait
be regarded
This means U. S. persons
as
are prohibited
of
77
from engaging
assets under
in transactions
entities
with these
and
all
U. S.
jurisdiction owned or controlled by those
entities are blocked. U. S. persons are not prohibited,
however, from paying funds owed to these entities into
blocked accounts held in U. S. financial institutions.
The
entities listed as "Controlled/Licensed
to Operate"
also be regarded as controlled by the Government of
This means the Office
Kuwait, but as licensed to operate.
of Foreign Assets Control has determined that the entities
are under the effective control of the recognized Government
of Kuwait and U. S. persons are authorized to engage in
transactions with them. These authorized transactions
include entering into contracts, making and receiving
payments, and conducting other commercial or financial
If questions arise, U. S. persons should
transactions'
request from the entities concerned to see copies of the
should
operating
The
licenses.
entities listed as
"Not Controlled/No
Restrictions"
are
the Office of Foreign Assets Control as
controlled by the Government of Kuwait. The names of these
entities appear on the list solely for the purpose of
not regarded
by
clarification because requests regarding their status
Some of the entities on this list may
been received.
subject to special Treasury
reporting
requirements.
Department
licensing
or
have
be
78
to revision should new
in f ormation become available, and are not inclusive.
The absence of a
Additions to the lists are anticipated.
particular entity from any of the lists should not be
These ].ists are sub)cot
regarded
controlled
as indicative
by
of whether the entity is
the Government
of Kuwait or the
owned
or
Government
of
Iraq.
Controlled
Blocked
A1Ahli Bank of Kuwait
A1Ahlia Insurance Company
Arab Fund for Economic and Social Development
Arab Trust Company
Bahrain Arab International
Bank
Bank of Kuwait & Middle East
Burgan Bank
Central Bank of Kuwait
Commercial Bank of Kuwait
Commercial Facilities Company
The Gulf Bank
Gulf Insurance
Company
Industrial Bank of Kuwait
International Financial Advisor
KREIC
Singapore
Kuwait Cement Company
Kuwait Clearing Company
Kuwait Finance House
Kuwait Hotels Company
Kuwait Metal Pipe Industries Company
Kuwait Real Estate Bank
Kuwait Real Estate Investment Consortium
(KREIC)
Kuwait Reinsurance Company
Kuwait Supply Company
Kuwait United Poultry Company
Mobile Telephone Systems
Mubarakiah Poultry and Feed Company
National Industries Company K. S.CNational Real Estate Company
Public Warehousing Company
Rawdatain Water Bottling Company
Refrigeration
Industries
Savings and Credit Bank
Securities
Securities
Group Company
House Company
Company
79
United Fisheries of Kuwait
United Realty Company
Univest Invest Company
Warba Insurance Company
Controlled
Licensed to 0 crate
Credit des Bergues
Georgetown Industries,
subsidiaries)
Inc. (including
KFIC, Inc. (including subsidiaries)
Kuwait Airways Corporation
Kuwait Asia Bank
Kuwait Investment Office (including
controlled
entities)
Kuwait Investment Authority
Kuwait Maritime Transport Company
Kuwait & Middle East Financial Investment
Company
Kuwait
Petroleum
Corporation
Kuwait
Petroleum
—
(London)
licensed affiliates)
(including
North
Sea Holdings
(including subsidiaries)
Santa Fe International Corporation
Ltd.
(including
subsidiaries and affiliates)
Wafra Intervest Corporation (Cayman)
(including subsidiaries and affiliates)
Not Controlled
[Some
No
Restrictions
of these entities may be subject to special
requirements.
Department licensing/reporting
Bank
Alexandria Kuwait International
Bank
Arab African International
Treasury
Arab
Arab
Arab
Arab
Arab
Arab
Arab
Arab
Banking
Financial
Hellenic
Insurance
Maritime
Mining
Corporation
Services
Bank
Group
Petroleum
Company
Company
Transport
Petroleum Investments Corporation
Turkish Bank
Bahrain Islamic Bank
Bahrain Islamic Investment Company
Bahrain Middle East Bank
Banco Arabe Espanol
Banco Atlantico
Bank of Bahrain and Kuwait
Bank of Oman, Bahrain 6 Kuwait
CHENI
Dao Heng Bank
FRAB Bank International
]
80
Bank
Gulf International
Corporation
Gulf Investment
Independent Petroleum Group
Interna ional Contracting Group
Jordan Fertilizer Industry Company
Jordan Kuwait Bank
Korea Kuwait Banking Corporation
t
French Bank
Kuwait Investment Projects Company
Kuwait Lebanon Bank
Kuwait National Cinema Company
National Bank of Kuwait
Kuwa'.
National
Investment
Housing
Oman
Pearl Holding
Company
Bank
Company
Swiss Kuwaiti Bank
The Arab Investment
Company
American Bank
Arab Shipping Company
Bank of Kuwait
Gulf Bank
Kuwait Bank
UBAF Arab
United
United
United
Yemen
R. Richard
Newcomb
Director
Office of Foreign Assets Control
mber
Approved
John P- Simps
g
Assistant
Secretary
(Enforcement)
Filed:
November
Publication
~, 1990
28, 1990
date:
November
(4:34 p. m. )
30, l990
~ent
lepaFtlTI en
of the Treasury
EMBARGOED
DECEMBER
~
FOR RELEASE AT
3, 1990
TREASURY
INTERNATIONAL
Washington,
O. C. ~ Telephone
$44-204
11:00 A. M.
DEPARTMENT RE EASES REPORT ON
ECONOMIC AND EXCHANGE RATE POLICY
Department today released its report to Congress on
International Economic and Exchange Rate Policy. This report is
prepared pursuant to the Omnibus Trade and Competitiveness Act of
1988. It reviews the economic situation in the industrial
countries, developments in the foreign exchange markets and in he
U. S. balance of payments,
and economic policy coordination among the
major countries.
IC also provides a status report on developments
economies of Korea and Taiwan, and
in the Asian newly industrialized
for the f irst time, China.
The report contains a number of key conclusions.
It notes that in view of developments in the world economy, ~-7
including the U. S. budget agreement -Mich ill strengthen
policy coordination, the further adjustment of external
imbalances should rely primarily on macroeconomic and
structural policy measures, rather than on further exchange
rate adjustment.
Korea continues to maintain pervasive foreign exchange and
made in recent
capital controls, and little progress was
".
.
ese.
Although there
addressing
Financial Policy Talks in
Korea
directly
that
are no indications at this time
"manipulates" the won, the continued existence of these
exchange and capital controls and the r aggressive
that
render less relevant" the determination
implementation
rate
basic
exchange
The
there is no direct "manipulation.
prev'ous
over
the
system now in place, while an improvement
system.
regime, is far from a truly market-de-ermined
directly "-, anipulat; r. g"
Taiwan also has given no evidence of
0
' =s external
imbalance;
its exchange rate. Nevertheless,
concerns
rise
to
give
thus,
and
large,
remain persistently
-. ts are
moveme.
al
on
capi
ions
restric
that remaining
contributing to indirec= "manipu'ation" of the exchange rate.
rade surpl "es ith the
China has registered large bila-eral
bi
lion
in '989). Thes~
ears
($6
,
United States in recent
ive
pr™='u==
administra
its
of
surpluses are primarily a
not
exchange
and
however,
sector,
controls over the external
rate "manipulation. "
The Treasury
.
.
NS-1052
%
LI DE T E
Department
of the Treasury
FOR IMMEDIATE
~
.
RELEASE "(
3, 1990
December
Bureau of the Public Debt
on December
hl'ash inyon, DC
"0"39
" -''~ " " " "CONTACT: Office of
l~
Financing
202-376-4350
RESULTS OF TREASURY'-S AUCTION
Tenders
~
OF 13-WEEK
BILLS
for $10, 048 million of 13-week bills to
6, 1990 and mature on March 7, 1991 were
be issued
accepted today (CUSIP: 912794VY7).
OF ACCEPTED
COMPETITIVE BIDS:
RANGE
Discount
Rate
Low
High
Average
7. 03%
7. 07%
7. 06%
Investment
Rate
7. 26%
7. 30%
7. 29%
Price
98. 223
98. 213
98. 215
Tenders at the high discount rate were allotted 74.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
Received
40, 815
25, 851, 070
27, 120
57, 430
52, 195
33, 100
1, 799, 915
59, 460
10, 400
(in thousands)
~Acce ted
40, 815
8, 151, 480
27, 120
57, 430
52, 195
31, 240
461, 665
20, 160
10, 400
46, 010
23, 545
409, 805
46, 010
23, 545
977, 805
716 495
$29, 695, 360
716 495
$10, 048, 360
$25, 878, 030
$6, 231, 030
$27, 471, 520
$7, 824, 520
2, 153. 430
2, 153, 430
70 410
360
695,
$29,
70 410
1 593 490
1 593 490
$10, 048, 360
will be
additional $29. 690 thousand of bills
for new cash.
issued to foreign official institutions
An
NB-1053
A-
S)
pUSLI
pepartrnertt
of the Treasury
FOR IMMEDIATE
DEBT NEW
~
Bureau of the Public Debt
Washing', DC
RESULTS OF TREASURY'S AUCTION
OF 26-WEEK
ll
Tenders
on December
'
&9
BILLS
I
for $10, 000 million of 26-week bills to be issued
6, 1990 and mature on June 6, 1991 were
accepted today (CUSIP:
RANGE
't~
' CONTACT:, Office of
Financing
1 ~
202-376-4350
RELEASE
3, 1990
December
~
912794WM2)
~
OF ACCEPTED
COMPETITIVE
BIDS:
Discount
Rate
High
6. 95%
6. 97%
Average
6 ' 96%
Low
Investment
Rate
7. 30%
7. 33%
Price
96. 486
96. 476
96. 481
Tenders at the high discount rate were allotted 29%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
Received
34, 240
31, 454, 465
20, 385
43, 100
38, 190
27, 235
1, 796, 270
(in thousands)
ted
Ance
34, 240
8, 975, 645
20, 385
43, 100
37, 480
26, 525
84, 420
23, 275
7, 105
41, 825
7, 105
41, 485
21, 235
713, 090
41, 485
21, 225
120, 940
$34, 803, 180
OOO, 38O
564 555
564 555
$1O,
$30, 415, 750
$5, 612, 950
$31, 593, 490
$6, 790, 690
2, 400, 000
2, 400, 000
809 690
$34, 803, 180
$10, 000, 380
1 177 740
1 177 740
809 690
will be
additional $277, 010 thousand of bills
cash.
new
for
issued to foreign official institutions
An
NB-1054
OVERSIGHT
Resolution
1 r 7 1 F 5 T R R E T. N. W.
FOR IMMEDIATE RELEASE
December
OB
90-68
3, 1990
T~
BO&&
0 N. b. C 1 0 k g
Cqgtact: Art Siddon
Pelisa Neuringer
W A SH IN C T
X
(202) 786-9672
OVERSIGHT BOARD NAMES VZCZ PRESIDENT QP
QVZ~IGHT
Board for the Resolution
today the appointment of
The Oversight
(RTC) announced
AÃD EVALUATION
Trust Corporation
J~
as
evaluation, effective Dec. 16.
W.
Wierschem
vice president of oversight and
As vice President of oversight and evaluation,
will head the division that oversees RTC operations,
policy impact and compliance, performance standards,
measurement.
Mr. Wiersche.
including
and progress
.
Mr. Wierschem comes to the Oversight Board from the RTC's
Eastern Regional Office where he served as the supervisory
managing agent of all conservatorship
thrifts in Florida and
Puerto Rico. Yr. Wierschem also was the managing agent o. two
seized Florida savings and loans -- CenTrust of Miami and
Corrzonwealth Federal of Fort Lauderdale -- where he supervised
the operations, asset downsizing and resolution process.
"Mr. Wierschem's first-hand knowledge of RTC's operations
provides key experience essential to heading the oversight area, "
said Peter H. Monroe, president of the Oversight Board.
"Wierschem also will provide valuable insight into the workings
of the thrift industry that he gained fro- years of exper'ence ir.
the private sector. "
Prior to Joining the RTC in 1989, Mr. Wierschem spent 14
years in the thrift and banking industries where he held senior
Po sitions in both operations and lending areas. His experience
includes serving as Southeast division manager and senior vice
president for California Federal Sank of Ft. Lauderdale from 1918
to 1989r banking division manager and executive vice president
for Security First Federal og Daytona Seach from 1984 to 1988;
and division manager of consumer services for Erpire Savings and
Loan of Denver from 1975 to 1984.
for
From 1973 to 1975& Mr. Wierschem was a senior
a
Government Employees Financial Corporation,
loan
officer
subsidiary
also worked as a collection
GEZCO Insurance
in Denver from $971
Corporation
manager for Chrysler Credit
Before working for Chrysler, he served four years as a
captain in the U. s. Air Force, including a tour in the combat
zones of Southeast Asia.
Mr. Wierschem
of
Kr. Wierschem received, a bachelor's degree in business
administration from Central Missouri State University in
Mo. , in 1966 and a master's degree in management
Warrensburg,
from Webster University in Webster Groves( Mo. ) in 1980.
in the Executive Program in
Mr. Wierschem also participated
Orgavizational Nanagement at Stanford University's Graduate
School of Business in 1981, and the Executive Program in Banking
at Duke University's Fuqua Graduate School in Durham, N. C. , in
1987.
The Oversight Board formulates the policy, approves the
funding, and provides the general oversight of the RTC, the
agency responsible for resolving the nation's failed thrffts.
I
of the TreaaiirY
department
~
. t',
'„'L
FOR RELEASE AT
December
4
Washington,
('~„
F 00 P. M.
i ~C~
CONTACT:
4, 1990
o.C.
~
telephone sii-moo~
Office of Financing
202/376-4350
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice, invites
for two series of Treasury bills totaling approximately
$20, 000 million, to be issued December 13, 1990. This offering
tenders
will provide about $1, 775 million of new cash for the Treasury,
as the maturing bills are outstanding in the amount of $18, 216
million. Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington, D. C.
20239-1500, Monday, December 10, 1990, prior to 12:00 noon for
noncompetitive tenders and prior to 1:00 p. m. , Eastern Standard
time, for competitive tenders.
The two series offered are as
follows:
91-day bills (to maturity date) for approximately
$10, 000 million, representing an additional amount of bills dated
March 15, 1990, and to mature March 14, 1991 (CUSIP No. 912794
VZ 4), currently
outstanding in the amount of $19, 656 million,
the additional and original bills to be freely interchangeable.
182-day bills for approximately $10, 000 million, to be
dated December 13, 1990, and to mature June 13, 1991 (CUSIP
No. 912794 WN 0).
The
bills will
The
bills will
basis under competi ive
their par amount will
and noncompetitive
bidding,
Both series of bills will be issued
be payable without interest.
entirely in book-entry form in a minimum amount of $10, 000 and in
on the records either of the Federal
any higher $5, 000 multiple,
Reserve Banks and Branches, or of the Department of the Treasur, .
bills
Banks
maturing
for their
on a discount
and at maturity
be issued
be issued for cash and in exchange
December 13, 1990. Tenders from Federal
own
account
monetary authorities
average bank discount rates
tional amounts of the bills
national
for Treasury
Reserve
and as agents for foreign and interwill be accepted at the weighted
of accepted compe itive tenders.
to Federal Reserve Banks,
. . ay be issued
-.
monetary authori. ies, to
as agents for foreign
tenders for such accoun=s
of
amount
the extent that the aggregate
bills held by them. .. e. maturing
exceeds the aggregate amount o
083 million as agents f"r
eral Reserve Banks currently hold $1,
$4, 570 .—illjon
foreign and international monetar" authorities, and
on
he
for their own account. Tenders for-t bills to be maintained
be
s
should
,
the
Treasur.
e.
of
Depart-.
book-entry records of the
5;76-2
PD
Form
13-week
or
series)
mitted on Form PD 5176-1 (for
and
international
..
(for 26-week series).
Ne-] 055
TREASURY ' S
Each tender
13-
must
i
/
OFFERINGS,
state the par
amount
of
Page
bills bid f or,
which must be a minimum of $10, 000. Tenders over $10, 000 must
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
A single
two decimals, e. g. , 7. 154. Fractions may not be used.
bidder, as defined in Treasury s single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
and dealers who make primary
Banking institutions
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers, if
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
position in the bills being offered if such position is in excess
of $200 million.
This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction.
Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
each customer whose net long position in the bill being offered
exceeds $200 million.
not have entered into an
to purchase or sell or otherawards of this issue being
auctioned prior to the designated closing time for receipt of
tenders.
A
noncompetitive
bidder
may
agreement, nor make an agreement
wise dispose of any noncompetitive
Payment for the full
must accompany all tenders
on the book-entry records
bills applied for
for bills to be maintained
par amount of the
submitted
of the Department
of the Treasury.
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined in the auction.
A
cash adjustment
No
deposit need accompany tenders
incorporated banks
trust companies and from responsible from
and recognized dealers
in investment securities for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches.
and
8/89
TREASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 3
public announcement will be made by the Depart=ent of the
of the amount and yield range of accepted bids. Combidders
will be advised of the acceptance or rejection
petitive
of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g , 99. 923, and the determinations
of the Secretary of the Treasury shall be final.
Treasury
Settlement for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
funds
on the issue date, in cash or other immediately-available
Cash adjustments
or in Treasury bills maturing on that date
will be made for differences between the par value of the
maturing bills accepted in exchange and the issue price of the
~
new
bills.
If
bill is
is
held to maturity,
the amount of discount is reportable as ordinary income on the
Federal income tax return of the owner for the year in which
Accrual-basis taxpayers, banks, and other
the bill matures.
persons designated in section 1281 of the Internal Revenue Code
a
purchased
at issue,
and
include in income the portion of the discount for the period
during the taxable yea. - such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
must
of the Treasury Circulars, public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms ~~y be obtainedof
Department
from any Federal
the Public Debt.
8/89
Reserve Bank or Branch, or from the Bureau
~
Department
of the Treasury
~
Bureau of the Public Debt
FOR RELEASE AT 3:OO PM
December 6, 1990
~
4'ashinyon,
D(
'0'39
A
~
~
~
//
ice
Contact: Peter Hollenbach
(20") 3-. 6-4302
PUBLIC DEBT ANNOUNCES ACTIVITY FOR
SECURITIES IN THE STRIPS PROGRAM FOR NOWEIIBER 1990
Treasury's Bureau of the Public Debt announced activity figures for the month of iNovcmber
of securities within the Separate Trading of Registered Interest and Principal of Securities
program, (STRIPS).
Dollar Amounts in Thousands
$473, 539, 16"
Principal Outstanding
(Eligible Securities)
Held in Unstripped
$359, 768, 677
Form
$113, 70, 490
Held in Stripped Form
Reconstituted
1990,
$4, 633, 120
in November
The accompanying table gives a breakdown of STRIPS activity by individual loan description.
The balances in this table are subject to audit and subsequent revision. These monthly figures are
included in Table VI of the Monthl Statement of the Public Debt entitled "Iloldings of Treasury
"
Securities in Stripped Form. These can also be obtained through a recorded message on
(202) 447-9873.
o0o
PA-38
t~~ vt~~tte~
wr TREASURY SECURITIES IN STRIPPED FORM, NOVEMBER
30, 1990
gn thOuaandS)
Maturity
27
Data
. . 11/15/94
45.501.354
11-1/4% Note A-1995
. . 2/1 5/95
6, 933,861
6 482, 021
471.840
-0-
B-1005
. . 5/15/95
7, 1 27, MS
S.SM, 486
1,217,NO
825}.040
. 8/1 5/95
7.955,901
7.293.901
. . 11/15/95
682.000
7.318.550
6.487.350
831~
. . 2/15/96
8.575, 199
8.343.109
232.000
-0-0-0-
1 1-1/411 Note
Note C-1995 .
10 1/2%
9 1/2%
. ..
Note D.1995
87/$% Nota A-1098 . .
Mlb% Nota C-1006 . .
..
..
T-t/441 Note D-1906
01/2% Note A-1N7
db/811 Note B-1997 . .
dT/brttr
NOte
C-1997 . .
dt/bel Note A-1908 . .
0 1/4%
. . 5/15I96
19.S71 +43
214.400
20, 258. 810
20.023, 810
235,200
. . . 5/15/97
9.921~7
9.846, 037
. . . 8/15/97
9.362.836
9.330,838
. . . 11/15/97
S,BM, 329
9.792.320
. . . 2/1 5/98
Q. 1 59.068
9, 158, 188
2 $00
9.185.387
0, 135.387
30.000
. 8/1 5/98
11.342, 646
11,213,646
128.800
. . 11/15/98
9.NS. 475
4.400
. . 11/15/96
Note C-1008
dT/bc}tr Note
D-1098
8 7/0%
Note
*1000
. 2/15/99
9.902.875
9.71 0, 628
9 1/betr
Note B-1999
5/15/99
10,047, 103
Sl 15/90
10, 183,644
9.170,303
10,081.644
. . . 11/15/99, .
10.773, 960
10. 765.960
1000 . .
7-7/batr Note D
8.1/211
.
Note A.2000
dT/8% Note B 2000
d3/4%tr Note
0.1/2r}1
1
219,200
-0-
10.673,033
10,673,033
..
10,406.230
10.405, 030
11.200
}.080, 626
12% Bond 2005
2005
—
8/1 5/OO
1
1 1/15/00
11.519,666
11.080.826
11,519 686
11/1 5/04
8, 301,Nb
3.706.606
-0-04.506~
-036.200
5/15/05
i.260.758
1,564, }M
2.808.650
-0-
8/1 SIOS
9.269, 713
6.383.313
000.4N
63.200
-0-0-
2/1 5/08
4, 755, 016
4
755, 916
-0-
1 1@lit}1Bond
2000-14
. . 11/15/14
8.005.564
1,460, 784
~, 538.NO
11.1/411
2015. .
1.9$0.470
}0.877.020
d3/$% Bond 2006
-0-
0-
2/15/00
..
-0-0-0-
9, 716.428
. . . 5/15/OO
14011 Bond 2004
1 d3/441 Bond
18.000
..
C-2000 .
Note D.2000
I
-0-0-0-
2/15/15
12,667.799
10 5/8% Bond 201 S .
8/15/15
7, 149,916
1
674, 076
5.~ 7S.040
-0-
0 7/811
11/15/15
S.800.659
2.230.050
~ .NO. NO
4, NO
Bond
..
Bond 2015 . .
dt/44tr Bond 2016
2/1 S/18
T.l/411 Bond 2018
5/15/16
. . . 11/15/lb . .
7-1/2%1 Bond
2018
d3/4rrrr Bond
2017 . .
6 7/011 Bond 2017
01/$11 Bond 2018 .
.
6.289.254
077, 800
18 017, 151
2~.400
12.000
10,064, 448
}2.50}.M0
497$.440
$01.400
. 5/15/17
16, 104, 160
6.203.200
}.0}O.NO
2SO. MO
8/15/17
14,016.656
9.2$3.658
4.723~
204.400
SI15/16
S, TM. 639
3 063 639
5, 644.800
9,032.670
1,912,~ 70
7. 1 20, 400
0.250, 793
5.M3. 003
11.520, 712
. . . 11/15/16
0% Bond 2018
0.7/811
7.2M. 654
0.823, 551
1
2/15/19
1
dl/$11 Bond 2019
8/1S/19
20.213.632
dl/211 Bond 2020
. 2/1 5/20
10228.866
BOnd
2019
d3/4%1 Bond 2020 .
5/15/20
.
. 8/1SI20
d3/411 Bond 2020.
1
3M. 400
}.015.0N
103~
7. 1 25, 400
$, 568, 483
~ .SN. 400
4N. NO
1 M. $20
572.320
N. NO
13.770.400
4.833, 120
0
473,S30.167
' E/tactnra May
l.
1907. secuntree held
in stnpped
lonn wore etrgrbte lor reconeututron
incr
Note: On the 4th workday ot each month a eooondtnb ot Tab}a }/t wra be rartabte
Tha baiancea in the labia are cub}act lo audi and eubeequant adtuatmanta
1
io tnesr»wtnpped
3M
pm
OOO
}1.NO
8.64S. 120
1
20.045.
21.410.1SS
~0
1
i.108.NO
3,
0, 58.483
1
1
term.
The ecepnone numb» ia /202}
447~
~ partment
of the Treasury e Nashlniton,
FOR RELEASE AT
December
12:00 NOON
7, 1990
-"" "
CONTACT:
D.C. a Telephone 56+-gO4g
Office of Financing
202/376-4350
TREASURY'S 52-WEEK BILL OFFERING
The Department of the Treasury,
this public notice,
invites tenders for approximately S11,by750 million
of 364-day
Treasury bills to be dated December 20, 1990, and to mature
December 19, 1991 (CUSIP No. 912794 WX 8). This issue will provide about S1, 925 million of new cash for the Treasury, as the
maturing 52-week bill is outstanding in the amount of S9, 814
million. Tenders will be received at Federal Reserve
Banks and
Branches and at the Bureau of the Public Debt, Washington, D. C.
20239-1500, Thursday, December 13, 1990, prior to 12:00 noon for
noncompetitive tenders and prior to 1:00 p. m. , Eastern Standard
time, for competitive tenders.
The bills will be issued on a discount basis under competitive and noncompetitive bidding, and at maturity their par amount
will be payable without interest.
This series of bills will be
issued entirely in book-entry form in a minimum amount of S10, 000
and in any higher S5, 000 multiple,
on the records either of tti~.
Federal Reserve Banks and Branches, or of the Department of the
Treasury
bills will be issued for cash and in exchange for
bills maturing December 20, 1990. In addition to the
maturing 52-week bills, there are S17, 969 million of maturing
bills which were originally issued as 13-week and 26-week bills.
The disposition of this latter amount will be announced next
The
Treasury
Federal Reserve Banks currently hold S688 million as
agents for foreign and international monetary authorities, and
S6, 995 million for their own account. These amounts represent
the combined holdings of such accounts for the three issues of
maturing bills.
Tenders from Federal Reserve Banks for their
own account and as agents for foreign and international
monetary
authorities will be accepted at the weighted average bank disAdditional amoun;s
count rate of accepted competitive tenders.
of the bills may be issued to Federal Reserve Banks, as agents
for foreign and international monetary authorities, to the extent
that the aggregate amount of tenders for such accounts exceeds
the aggregate amount of maturing bills held by them. For purposes of determining such additional amoun s, foreign and international monetary authorities are considered to hold S442 million
of the original 52-week issue. Tenders for bills to be maintained on the book-entry records of the Department o'. the
Treasury should be submitted on Form PD 5176-3.
week.
NB-1056
TREASURYiS
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page
2
Each tender must state the par amount of bills bid for,
which must be a minimum of $10, 000. Tenders over $10, 000 must
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
e. g. , 7. 154. Fractions may not be used. A single
defined
in Treasury s single bidder guidelines, shall
bidder, as
not submit noncompetitive tenders totaling more than $1, 000, 000.
two decimals,
and dealers who make primary
Banking institutions
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers,
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
if
position in the bills being offered if such position is in excess
of $200 million.
This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction.
Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
each customer whose net long position in the bill being offered
exceeds $200 million.
noncompetitive
bidder
not have entered into an
to purchase or sell or otherawards of this issue being
auctioned prior to the designated closing time for receipt of
tenders.
A
may
agreement, nor make an agreement
wise dispose of any noncompetitive
Payment for the full
must accompany all tenders
on the book-entry records
par amount of the bills applied for
submitted for bills to be maintained
of the Department of the Treasury.
A cash adjustment
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined in the auction.
No
deposit need accompany tenders
incorporated banks
trust companies and from responsible from
and recognized dealers
in investment securities for bills to be maintained on the bookentry
and
records of Federal Reserve Banks and Branches.
8/89
TREASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 3
Public announcement will be made by the Department of the
of the amount and yield range of accepted bids. Competitive bidders will be advised of the acceptance or rejection
of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g. , 99.923, and the determinations
of the Secretary of the Treasury shall be final.
Treasury
Settlement
for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
funds
on the issue date, in cash or other immediately-available
or in Treasury bills maturing on that date. Cash adjustments
will be made for differences between the par value of the
maturing bills accepted in exchange and the issue price of the
new
bills.
If
purchased at issue, and is held to maturity,
discount
the amount of
is reportable as ordinary income on the
Federal income tax return of the owner for the year in which
Accrual-basis taxpayers, banks, and other
the bill matures.
persons designated in section 1281 of the Internal Revenue Code
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
a
bill is
of the Treasury Circulars, Public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtained
from any Federal Reserve Bank or Branch, or from the Bureau of
the Public Debt.
Department
8/89
iiPresent
Of
the Treasure
Wehlnoton, O.C.
"UQ/g„
RELEASE
FOR IMMEDIATE
CONTACT:
7, 1990
Decembe r
UNITED
necessary
~
Teiephone $00-20li
CHERYL CRISPEN
(202) 566-5252
STATES INCOME TAX TREATIES WITH SPAIN,
AND INDONESIA RATIFIED
The Treasury
Finland
~
FINLAND
announced today that the procedures
income tax treaties with Spain,
have been completed.
Department
to bring into force the
and
Indonesia
Instruments
of ratification
were exchanged
with
Spain on
21, 1990, bringing into force on that date the
Convention between the United States of America and the Kingdom
of Spain for the Avoidance of Double Taxation and the Prevention
of Fiscal Evasion with respect to Taxes on Income. The
provisions of the Convention will have effect for dividends,
interest and royalties paid or credited on or after January 1,
1991 and for other income of taxable years beginning on or after
January 1, 199 1.
Pursuant to the terms of the Convention between the United
States of America and the Republic of Finland for the Avoidance
of Double Taxation and the Prevention of Fiscal Evasion with
respect to Taxes on Income and on Capital, each Contracting State
notified the other on November 30, 1990 that procedures for
ratification had been completed. The Convention will enter into
force on December 30, 1990. The provisions of the Convention
shall have effect for taxes withheld at source, in the United
States, for amounts paid or credited on or after February 1,
199 1, and in Finland, for amounts derived on or after January 1,
1991, and for other taxes, in both Contracting States, for
taxable years beginning on or after January 1, 199 1.
November
of ratification of the Convention between the
United States of America and the Republic of Indonesia for the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income were exchanged on November 30,
1990. The Convention will enter into force on December 30, 1990.
of the Convention shall have effect for taxes
The provisions
withheld at source on dividends, interest and royalties, for
amounts paid or credited on or after February 1, 1991 and for
other taxes, for taxable years beginning on or after January;i 1,
1990.
Instruments
o0o
vB-1057
gL
~C
OVERSIGHT BOMU3
Resolution Trust Corporation
1777 r STREET, N. W. WASHINCTON,
REL~~E
December 7, 1990
Contact:
FOR IMMEDIATE
OB
D.
Art Siddon
Felisa Neuzinger
90-70
O'uERSIC=ET
The Over.
(202) 786 —9672
r OP~ BZVZSES
ight Boa
today approved
establish ng a pilot
(RTC)
C:o
a.
SE~R
FZ?VW
f cr Ae Resol" is
d
revised se' le=
-'
z
hG POLICY
Tr ~s' Corpora- ion
acing policy
progr+ for the sale ill'z;id assets.
llion of t?'e approz~ately $142
billion in assets now held by the RTC vill become eligible =o
se' ler financing.
This policy replaces the $3 b' llion in seller
e Boa=d b. . " con"inues to
'nmcing previously app ored by
allocate not less than $250 mll='on "= af ord- 'e housing.
the p ogram,
Under
$7 b'
"This policy gives the RTC the ad='- tional financing
"
authority w~+ch it ecues ed to se' 1 ' s more iili -. ;" asse s,
said Pe e
. Mo. roe, Oversig'"= ~ard ~resident.
"Tne goa' s of the program are -o speed as'E= sales and
e
Co gati. .'uc'
increase the va. lue o he ~~2 e s zo sue
"S' ce th- s ' a. demo s=="=io" p ogr~, i-s
Non oe.
effectiveze s in achieving Mesc „-oals w 11 be care=u' y
monitored by the Qversich Board".
.
~ —cc. C-' ed
e c-a
The R~C will dete~ne wEa assets
e i"ver igh B.card.
i lim d under two arity ':- es & =s. e=' byis no"
a ready m-rket
First, the RTC must de e~ne tha De=e
C
.
for the asset because cf De unavai'abil i"y
financing on accep able
that val=e v 11 be =2~'
such
set
alternatives
un
il
tern.
a. s ca, sh
Second,
se''c
'ng
ed u
sa'e,
se=
zzrke s improve.
more
'-iti
—
t
co™-ercial
P-C -, . e „docent
o
nancing
-
stead
o
or holing t".e
policy will apply uniform1y to all RTC illiquid
Although it
assets whether in conservatorship or receivership.
in
October,
adopted
the
f13,
supersedes e. isting policy
affordable housing provisions of the earlier policy remain in
force and not less than $250 million in seller financing will
remain availa?}le for financing of affordable housing for low-and
The new
.
moderate-income
buyers.
The loans will be
Substantial
o
o
o
o
structured
to achieve:
commitment by the buyer to provide
performance.
for
strong incentives
Maximization of value to the taxpayer.
Protection of asset value in the event of default
Expedited sale or securitization of the loan
e~ity
will subm t to the Oversight Boarci within 30 day a
set of pe forzmce targets to assist the Oversight Board in
monitoring and evaluating the effectiveness of the revised seller
financing policy
The ETC
Board, established by the Financial
Reform, Recovery and Enforcement Act of 1989
and
(FIBSTER), formulates the policy, approves the funding,
provides the general oversight of the Resolution Trust
Corporation.
The Oversight
Institutions
LI BKM' XZW
Department
of the Treasuv.
~
Bureau of the Pubhc Debt
U
RELEASE
FOR IMMEDIATE
i
RESULTS OF TREASURY'S AUCTION
Tenders
on December
'
~, l~'ashingtnn.
&
[X. 't)".l9
l
CONTACT:
10, 1990
December
&
Office of Financing
202-3/6-'350
OF 13-WEEK
BILLS
for $10, 098 million of 13-week bills to be issued
13, 1990 and mature on March 14, 1991 were
accepted today (CUSIP: 912794VZ4).
RANGE
OF ACCEPTED
COMPETITIVE
BIDS:
Discount
Rate
6. 84%
6. 86%
Low
High
Average
Tenders
at the
The investment
Investment
Rate
7. 06%
7. 08%
7. 08%
6 ' 86%
rate were allotted 50%.
rate is the equivalent coupon-issue yield.
high discount
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
Price
98. 271
98. 266
98. 266
Received
37, 020
30, 290, 905
27, 935
48, 205
52, 765
35, 140
2, 029, 595
16, 920
(in thousands)
37, 020
8, 050, 365
27, 935
48, 205
52, 765
34, 440
242, 095
46, 740
21, 210
1, 332, 430
15, 880
10, 880
45, 240
21, 150
719, 685
$34, 744, 830
$10, 097, 745
$30, 799, 105
$6, 652, 020
10, 880
795 085
792 085
$32, 434, 615
510
530
287,
$8,
2, 119,755
1, 619, 755
190 460
$34p744g830
190 460
1 635 510
1 635
$10, 097, 745
additional $5'0 thousand of bills . ill becash.
issued to foreign official institutions for new
An
LI D
Department
of the Treasury
FOR IMMEDIATE
December
~
T
Bureau of the Public Debt
'-"
RELEASE
10, 1990
'
K
~
DC '(1"39
ll'ashinqtnn,
— -CQNTAC'7:
Office of Financing
202-3&6-4350
RESULTS OF TREASURY'S AUCTION QF 26-WEEK BILLS
Tenders
on December
for $10, 015 million of 26-week bills to be issued
13, 1990 and mature on June 13, 1991 were
accepted today (CUSIP: 912794WNO).
OF ACCEPTED
RANGE
COMPETITIVE
BIDS:
Discount
Rate
Low
High
Average
6. 72%
6. 74%
6. 74%
Investment
Rate
Price
96. 603
96. 593
96. 593
7. 05%
7. 07%
7. 07%
Tenders at the high discount rate were allotted 89%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
issue
An
d
PP~Q
PqgQa
AND
ACCEPTED
(in thousands)
Received
33, 575
26, 022, 705
21, 250
32, 775
136, 185
23, 485
1, 790, 680
16, 420
6, 385
40, 780
16, 745
717, 850
569. 530
$29, 428, 365
$24, 963, 035
1 147 690
$26, 110, 725
33, 575
8, 887, 945
21, 250
32 775
36, 075
23, 485
174, 180
16, 200
6, 385
40, 780
16, 745
155, 700
569 530
$10, 01 &, 625
$6, 04'3,
1
$29, 428, 365
g5
147 690
$7, 196, 985
1, 950, 000
2, 450, 000
867 640
2
~67
c),', g
$10, 014, 625
additional $21, 860 thousand of bills ne.-ill be
cash.
or
reign official insti=utions
t o f ore'
NB-1 059
R+.
~4,.
.
~ partmeni
of the treason
EMBARGOED
December
~
Washington,
---
o.c. ~ telephone sll-20
I
FOR RELEASE AT NOON
!
CONTACT:
11, 1990
Ba rha ra Clay
(202) 566-5252
Treasury Releases 1990 National Treatment Study
Report on Foreign Treatment of U. S. Financial Institutions
Secretary of the Treasury Nicholas
Congress
F. Brady today submitted to
of U. S. Financial
the 1990 Report on Foreign Treatment
Institutions.
In transmitting
the Report,
Secretary Brady noted that progress in
a varied pace, but
generally not as rapidly as the Treasury would like. Significant
improvements
have been made in Canada and in many European
countries. Only modest progress has been made in many Asian
economies.
Numerous
Latin American countries still maintain
restrictive financial systems. Thus, while notable strides have
reducing
barriers abroad is occurring at
been made in opening and liberalizing
many markets,
the pace and
degree with which this has occurred in other regions have been
slow. The U. S. Treasury will continue to pursue vigorou"ly its
efforts to remove remaining obstacles to national treatment for
U. S. financial
firms operating abroad.
Report updates and expands upon the National Treatment Studies
completed by the U. S. Treasury in 1979, 1984, and 1986. It
examines the degree of national treatment afforded U. S. financial
institutions in twenty-one banking and eighteen securities
for
markets.
As required by law, the 1990 Report also addresses,
the first time, U. S. Government efforts to remove barriers in
those markets and reviews the „"resence and treatment of foreign
firms in the United States.
The
This Report
L. 100-418,
The
Report's
is required by the .'inane. al Reports Act of 1988
sec. 3601, et ~se . ; 22 U. S. C. 5351 et ~se . ).
Preface
and
Co.-. cl - =~
0
NB-1060
are at:ached
(Pub.
PREFACE
The
1990 National
Treatment
Study
~ ~.).
is required
by
the
Financial Reports Act of 1988 (Pub. L. 100-418, sec. 3601
22 U. S.C. 5351
The 1990 Report
expands
upon
1984 and
national
treatment
studies
1986. The Financial Reports
completed in 1979,
Act of 1988 instructs the Secretary of the Treasury to
report to the Congress every four years beginning December
1, 1990, on foreign financial institutions in the V. S. and
the kinds of services they offer, and the extent to which
foreign countries deny national treatment to V. S. banks and
securities firms, including U. S. efforts to eliminate
Thus, the 1990 National Treatment Study
discrimination.
will report for the first time on the presence and
activities of foreign providers of financial services in
the United States.
Financial Reports Act of 1988 also instructs the
President or his designee, when advantageous, to conduct
discussions with the governments of countries that are
major financial centers. These discussions are aimed at:
have
(1) ensuring that V. S. banks and securitiesin firms
markets;
those
access to and receive national treatment
and other
(2) reducing or eliminating barriers to,financial
services;
in
trade
international
distortions of,
of
the
in
types
(3) achieving reasonable comparability
services
financial
financial services permissible for
companies; and (4) developing uniform supervisory standards
for banking organizations and securitiesThe companies,
1990 National
including uniform capital standards.
time, on the
first
Treatment Study also reports, for the
progress of these financial market discussions.
The
for International
Office of the Assistant Secretary
and the Office
Affairs (OASIA) of the Treasury Department
Currency (OCC) had responsibility
of the Comptroller of theproduction
of the entire report.
for the preparation and
indicates the principal
(Appendix II, Acknowledgments,
The National
)
drafters and editors of individual chapters.
financial
The
Treatment
Study primarily
covers major
denials of national
vhich hpve achieved
treatment although
The Treasury
substantial progress are also included.
Department and the OCC solicited U. S. private sector views
through a notice in the August 25, 1989,
markets
which have
significant
some markets
covers 21 banking and 18 securities markets in 27
countries or regions. These chapters incorporate private
sector remarks. The chapters were also sent to financial
and monetary authorities
in each market for comment and
review. The final report, however, reflects the views of
Sixteen of the banking
the U. S. Treasury Department.
markets and eight of the securities markets were reviewed
in the 1986 Update. The banking markets reviewed in 1986
include Argentina, Australia, Brazil, Canada, Finland,
India, Japan, the Republic of Korea, Mexico, Norway, the
Philippines, Singapore, Sweden, Taiwan, Thailand, and
Venezuela.
New banking markets
include China, the European
Community,
Indonesia, Turkey and the USSR. Securities
markets covered in 1986 include Canada, Japan, France, the
Federal Republic of Germany, Italy, the Netherlands,
Switzerland, and the United Kingdom.
Securities markets
reviewed for the first time include Argentina, Brazil, the
European Community, Finland, India, the Republic of Korea,
Mexico, Singapore, Taiwan and Venezuela.
The European
Community chapters are based upon the actual or proposed
legal framework which is to take effect on January 1, 1993.
The 1990 National Treatment Study is broader than previous
studies in its coverage of the foreign presence in the U. S.
market and the more detailed descriptions of foreign
markets.
Previous national treatment studies focused on
the presence and treatment of U. S. firms in foreign
markets.
The 1990 study describes the structure and size
of domestic markets, the regulatory regime of the host
country, the presence of U. S. and other foreign firms, and
the treatment accorded these firms. In addition, the U. S.
section addresses a broader range of services than
previously covered. It also reviews financial market talks
the U. S. Treasury has had with foreign officials.
The study
The study is current as of June 30, 1990. Where possible,
developments
since that date have been incorporated.
This Report should be vie~ed as an expanded successor to
the 1979, 1984 and 1986 studies. The general conclusions
market assessments of these three works
and individual
provide an analytical framework to measure progress in
achieving national treatment in banking and securities,
both globally and in individual markets.
The 1979
referred to as the National
by Section 9 of the
International Banking Act of 1978, which required the
Secretary of the Treasury, in con)unction with the
Department of State, the Federal Reserve Board, the
Comptroller of the Currency, and the Federal Deposit
Insurance Corporation, to conduct a study of the extent to
which U. S. banks were granted or denied national treatment,
whether by law or practice, in conducting banking
operations abroad. The 1979 Report reviewed the degree of
national treatment accorded V. S. banks in over 140 foreign
banking markets, including in-depth analyses for 21
individual countries as well as the Andean Pact,
and offshore banking
COMECON, the European Community,
Treatment
Report,
commonly
Study, was mandated
centers.
responded to a request from Senator Jake
Garn, Ranking Republican of the Senate Committee on
Banking, Housing, and Urban Affairs to Treasury Secretary
Secretary
Donald Regan for an update to the 1979 Report.
should be
1984
Update
the
Regan and Senator Garn agreed that
banks
S.
U.
limited to a study of the 16 markets where
desired an active presence but where national treatment was
denied (to varying degrees) in 1979.
The 1984 Update
responded to a request from Senator Garn to
Treasury Secretary James A. Baker, III for an update to the
1984 Report. Senator Garn asked Secretary Baker to cover
in
other segments of the financial services industry
funds
electronic
addition to banking and to address
reviewed progress
transfer systems in the study. The study
in the 16
in granting national treatment to U. S. banks
new banking
two
in
as
well
as
markets of the 1984 Update,
assessed
also
For the first time, the study
markets.
securities markets, covering eight industrial country
The 1986 Update
markets.
IV-
securities
conclusions of the foreign banking and
financial firms have been
h t rs describing how U. S.
at the front of th iss
treated abroad, have been placed
volume for the convenience of the reader.
The
Chapter 1 reviews the concept of national treatment
principle
including the evolution of the national treatment
"
The chapter
to "equality of competitive opportunity.
discusses the application of national treatment policy
under U. S. banking and securities laws, the Commodity
Exchange Act and the key features of state insurance law.
This chapter also analyzes for the first time national
treatment as it applies to foreign participants in the U. S.
futures and options markets and in the U. S. insurance
industry.
Chapter 2 describes by nationality the origins of foreign
financial institutions operating in the U. S. and the types
of financial services offered by these firms.
section consists of chapters on 39 foreign
markets.
Chapters 3 through 26 cover 12 regions in which
both the banking and securities industries are examined.
Chapters 27 through 35 review national treatment for nine
other banking markets. Chapters 36 through 41 analyze six
additional securities markets.
The next
securities chapter consists of four main
Overview of the Domestic Market,
Treatment of U. S. Financial Institutions and Conclusions'
Each banking
sections:
An
and
Summary,
section on Financial Market Discussions is
where the Treasury Department has engaged in such
additional
provided
discussions.
The Summary
including
briefly describes treatment of foreign firms,
restrictions on entry and operations, notes
recent national
treatment developments and provides
regarding the presence of U. S. banks and
securities firms in the particular market and the presence
of banks from that market in the United States.
information
The Overview
0
has two subparts:
"Domestic Banking/Securities
features of the'structure
and
Market" describes major
regulatory regime of the
domestic banking system or securities markets,
including the number and size of banks where
available. Progress since 1986 is also noted in
markets previously reviewed.
0
U. S. Presence" indicates the number of U. S. -owned
banks and securities firms and how they enter the
market.
The U. S. presence is compared with the foreign
community as a whole.
of V. S. Financial Institutions section
analyzes national treatment in terms of entry and
establishment,
including branch, subsidiary or acquisition
of equity in existing domestic entities, and operations,
including any obstacles to full participation in all
domestic financial market activity.
The Treatment
Financial Market Discussions report on efforts by the
Treasury Department in selected countries to encourage
foreign officials to liberalize their financial markets and
provide national treatment to U. S. financial institutions.
V.
States has historically been a strong advocate
of national treatment and the free international movement
of goods, services, and capital. The International Banking
Act of 1978 tIBA) adopted the policy of national treatment,
defined as parity of treatment between foreign and domestic
In practice, the concept of
banks in like circumstances.
national
national treatment has evolved from
equality of competitive opportunity.
treatment to
national treatment, defined as
worldwide,
When implemented
equality of competitive opportunity, offers the best hope
of achieving global economic efficiency and prosperity.
The United
~
~ ~~
~
the principle of national treatment has evolved
since its adoption in the IBA, the Treasury Department has
traditionally opposed movement toward a reciprocity
in testimony before the
policy. Under Secretary Mulford, Urban
Affairs of the
and
Finance
Committee on Banking,
February 28,
on
Representatives
United States House of
Although
1990, said:
~
the concept of national treatment
national treatment to
It is not
of competitive opportunity.
Over the past decade,
has evolved from
equality
~
~ ~~
blatant discriminatory
ufficiMt simply to remove
Foreign f i rms shou l d ef f ective l y en f oy the
rriers
as domestic firms.
competitive opportunities
Despite moments of frustration and mounting pressure
have not strayed from this principle.
In testimony on April 5, 1990 before the Committee on
Banking, Housing and Urban Affairs of the United States
Senate, Treasury Under Secretary Mulford further
elaborated, noting that:
same
we
objection to even limited reciprocity has been
the risk that reciprocity vill be used and that
retaliation vould follov. The impact could be
devastating to confidence in vorld financial markets
and established patterns of monetary and capital
flovs. The President has clearly stated his opposition
to measures that might restrict the flov of capital or
increase protectionism -- the marketplace should be
free to allocate resources.
The U. S.
The Administration
believes that the United States has been
veil served by our policy of national treatment.
At home,
the U. S. domestic market has benefited.
Abroad, some
significant strides in opening foreign markets have been
made, although often as a result of arduous negotiations.
Problems arise when some countries keep their bord rs open
to foreign competition vhile others do not. The principle
of national treatment vas adopted in the IBA in the
expectation that all nations vould recognize the benefits
of foreign competition and work tovard ending
discrimination.
While many countries have opened their
markets many have also adopted reciprocity povers.
VI.
m
'
'v
of mid-year 1990, several EC countries vere adopting
of reciprocity povers to use if necessary in
order to ensure national treatment for their financial
firms. In his April 1990 testimony before the Senate
Banking Committee, Under Secretary Mulford noted that in
this regard the U. S. vas increasingly in a minority:
For example, in 1984, the OECD found that 11 of the
24 OECD members had some form of reciprocity povers
available. Since then, other countries have added
As
some type
reciprocity powers.
With the adoption of reciprocal
national treatment that will become operative on
January 1, 1993, under the EC's Second Banking
Directive, at least 18 out of 24 OECD members will
have reciprocity powers.
We have pressed
our
concerns about the consistency of these nev
reciprocity measures with OECD members.
the 27 countries in this study, at least 13 employ
reciprocity measures in banking and/or securities.
(Some of the remaining countries impose even stricter
Of
entry
restrictions.
)
in his February 1990 testimony before the
House Banking Committee, Under Secretary Mulford
underscored the benefits a policy of national treatment
can provide:
Nevertheless,
The policy of national treatment has attracted
business, capital, talent and brain pover to the
United States. It has helped us to fund and develop
our domestic and international
financial market
activity. It has helped us to press successfully
for more liberal and open markets overseas. I do
not believe a policy of reciprocity would have
It could
brought these benefits to the U. S. market.
have kept foreign firms out.
the V. S. has also repeatedly stated that it
not hesitate to take vigorous action to promote or
protect U. S. interests abroad if efforts to obtain
national treatment fail. Because of the movement
tovards reciprocity or reciprocal national treatment in
countries and the slov progress in
many other industrial
achieving effective national treatment, especially in
some Asian and Latin American financial markets, Members
of Congress have raised the need for possible tools to
increase the effectiveness of achieving U. S. policy
objectives within the framevork of national treatment
and equality of competitive opportunity.
Hovever,
vill
States has one of the most open and
competitive markets for financial services in the
world. More than 719 foreign banks operate in the
Foreign
United States representing 284 bank families.
The United
representative offices as of August 31, 1990,
comtries. BY comP rison,
totalled 453, rePresenting 59had
819 branches and 553
at year-end 1989 U. S. banks
subsidiaries in more than 70 countries.
At the end of 1989, the SEC estimated the number of
registered broker-dealers in which foreign persons have
equity interests of 25 percent or more at approximately
130. The total may include companies doing business in
the U. S. from abroad. Approximately 200 foreign
investment advisors and four foreign investment
companies are registered with the SEC.
bank
Futures Trading Corporation indicated
that as of September 1989, foreign-based registrants
consisted of 46 commodity trading advisors, 18 commodity
pool operators, and three introducing brokers and
futures commission merchants.
The Commodities
affiliates of foreign direct investors
received approximately $33 billion of premiums in 1987,
or about 8. 1 percent of total U. S. premiums, according
to the Department of Commerce. The foreign market share
of the U. S. insurance industry has greatly expanded
since 1987, largely due to acquisitions of U. S.
operations.
U. S. insurance
VIII.
n
m
role of political subdivisions in determining which
foreign banking or securities firms will be admitted to
do business can complicate the ability of a country at
the federal level to offer national treatment.
For
example, in Canada, the securities industry is regulated
primarily by the provincial governments, while the
Federal Government regulates other aspects of the
financial industry-
The
Similar situations
in banking exist in the United
States, where some individual states limit foreign
participation to less than the treatment accorded
federal law.
by
Generally, these rules also impact
domestic banks headquartered
in other states. For
example, branching prohibitions in most cases apply
equally to foreign banks and to out-of-state U. S.
banks. However, regional compacts among U. S. states
have introduced elements of discrimination
against
foreign banks established
in one of these states by not
allowing them to do business in another compact member
state although domestic banks may do so.
This situation results from the dual banking system in
the United States, +hereby banks have the option of a
state or federal charter, and states may to a large
extent determine their own banking structure.
However,
the adoption of an explicit policy of national treatment
at the federal level has led some states to adopt more
liberal policies regarding foreign bank entry. Under
the IBA, foreign banks may, by obtaining a federal
license, enter through a branch in any state that does
not expressly bar foreign bank entry. A foreign bank
also has the option to enter any one state by
establishing a national bank. Hence, foreign banks are
not denied entry absolutely, but their form of entry
depends on state la+. In addition, vhen foreign banks
have approached the Treasury Department vith concrete
problems in entering a particular state, Treasury
officials have generally been able to gain access for
those foreign banks by contacting the relevant state
authorities.
IX.
efforts through bilateral and
multilateral channels have contributed to much of the
progress noted in this Report. The U. S. Government has
conducted discussions bilaterally with Canada, the
U. S. Government
European
Community,
the Republic of Korea, Japan,
Mexico, with authorities
on Taiwan, and
officials from other countries. The U. S. has also
encouraged greater liberalization and equality of
competitive opportunity in banking and securities
Venezuela,
~ith
fora such as the Organization
markets in multilateral
for Economic Cooperation and Development (OECD), the
World Bank and the
International
Monetary
Fund.
have
Despite outstanding problems, important strides financial
Japanese
been made in opening and liberalizing
markets under the rubric of the U. S. -Japan working Group
Discussions were also important
on Financial Markets.
national treatment
to the adoption of an approximate
standard for non-EC firms in the EuropeanThe Community's
U. S.
Single Market for Financial Services.
Canadians
the
~ith
talks
Treasury's financial market
of the
resulted in a financial services section took
effect
which
U. S.-Canada Free Trade Agreement,
January 1. 1989. This agreement. the first bilateral
to cover the entire financial
t by either side
sector, removed many discriminatory practices U. S.
financial institutions previously encountered in Canada.
In general, significant improvements have been made in
Canada, in many individual European countries, and
potentially in the European Community (EC). under the
Second Banking, the Investment Services and other
In the case of the EC, the
financial directives.
greater scope of activity and liberalization will
largely benefit financial subsidiaries of U. S. firms
rather than their branches.
The U. S. Government has made only modest progress in
newly industrializing
economies, such as the Republic
Korea and Taiwan.
The Treasury Department has
encouraged
particularly
liberalization
of
in financial market talks
in these two regions.
with counterparts
disappointing area is the lack of progress in
gaining access to financial markets in most major Latin
American countries.
As Under Secretary Mulford noted in
his April 1990 testimony before the Senate Banking
One
Committee:
will continue to urge financial market reforms
and more liberal investment policies in Latin
American countries, especially in conjunction with
development bank lending.
Some of these countries,
such as Venezuela and Mexico, have adopted a new
openness in trade which I hope will spread to their
financial sectors. It is difficult to justify that
major debtor countries receiving. support from a
variety of sources under the strengthened debt
strategy should maintain financial systems that
remain substantially
closed to the world financial
We
community
U. S. Government efforts to improve treatment of U. S.
banks and securities firms are supported by our efforts
in the Uruguay Round to achieve a multilateral agreement
on financial services with legally binding obligations
calling for both market access and national treatment
for financial institutions.
Although OECD countries
-10-
considerable progress in this area, in
large part reflected in commitments through the QECD
of Capital Movements and
Codes of Liberalization
Invisible Operations, the Uruguay Round provides an
additional opportunity to pursue liberalization in a
wider range of countries, including the newly
industrializing
economies of Asia and Latin America.
have already
made
the Primary
Dealers Act of 1988, the Federal Reserve
determine whether U. S. firms operating in the
government debt markets of certain foreign countries have the
same competitive opportunities
as the domestic firms operating i.",
Information provided in this study on government
those markets.
debt markets in foreign countries does not supercede
determinations made by the Federal Reserve in accordance with the
Primary Dealers Act.
Under
Board
is required to
'
!UgltllI
Foreign banks are not
legally prohibited from entry or expansion although the
Argentine Government is not accepting applications for new
banks, domestic or foreign, because they believe that an
excessive number of banks already exists. However, foreign
investors can enter the Argentine market through the
purchase of insolvent local banks.
(( (
kEKLUK
V
m
There are no laws
foreign firm
X
that specifically discriminate against
participation in the Argentine securities markets, and U. S.
However, the
firms appear to receive national treatment.
thin, low-volume market in an uncertain economic
environment has resulted in little investor interest among
foreign brokerage firms.
Rza
~
h
(B)
n
r z'
'n'
n
'
n
hr' i
v'
nk
'
Pursuant
to
in Brazil's 1988 Constitution, Brazil has a de
facto ban on the right of entry of foreign banks as new
branches or subsidiaries.
The prohibition
remains in
effect unless new laws are promulgated authorizing entry of
foreign banking institutions.
Those foreign banks already
established in Brazil (of which three are U. S. banks) are,
in turn, barred from offering basic personal savings
accounts and are also prohibited from acting as the
Government's agent for collection of taxes and fees.
provisions
(S)
Foreign firms seeking to invest in Brazil's securities
face a de facto ban on new entry based on
provisions in Brazil's 1988 Constitution.
The ban on new
establishment may be modified or lifted by Congressional
markets
-12-
In additioni limits on foreign capital
legislation.
participation continue. Established foreign financial
firms (e. g-, Citibank and Chase Manhattan) are very active
in securities trading and other financial services.
(B)
v
'm
v
v
~
T
~
eliminated its equivalent
Act, opening the securities industry
with the U. S. canada Free Trade
(FTA), Canada eliminated the restrictions on
of the Glass-Steagall
to banks. Consistent
Agreement
Canada
additional branches by V. S. bank subsidiaries
and on the ability of U. S. parent banks to transfer capital
from
A significant
improvement,
to U. S. bank subsidiaries.
the viewpoint of U. S. banks, has been the removal of
quantitative restrictions on the growth of assets of U. S.
The most important
banks in Canada (also an FTA measure).
remaining constraint is the inability of U. S. banks to set
establishing
up
in Canada.
branches
(S)
V
Ontario has
permitted (for the first time in 20 years) the entry of
foreign securities companies and eliminated restrictions
securities companies (of vhich
remaining grandfathered
there vere tvo). At the federal level, grounds for
blocking entry are restricted to prudential reasons.
U. S. companies
Finally, the Bank of Canada permitted six
government
Canadian
the
in
become primary dealers
securities market.
V
(B)
U. S. and
on
to
to operate under the
other financial institutions have yet vhich
is to take
banking
Single Market legislation for Second
the
Directive,
Banking
effect January 1 1993. The for banking, ooffers
S.
U.
ers
centerpiece ' of the legislation-ocal national treatment.
(The
itutions recip.
i l
i
1 v i ch e
g
U. S. strongly opposed an initial proposa
unlikely
ears
a
It
pp
)
possible mirror-image reciprocity.
under the
sanctions
to
subject
be
b kss vvill
that U. S. ban
'p
With
ith zzeci rocity
Directive's reciprocity provision.
the nev
v r it is not certain that
remaining, however,
In
iscr m
vill be completely f=ee oof discrimination.
'
environment
3-
State implementing legislation, there
might occur in the
discrimination
that
is a possibility
that it is prepared
EC
maintains
future. Nevertheless, the
to offer U. S. banks national treatment provided that EC
banks receive national treatment in the U. S. The Second
Banking Directive provides for substantial liberalization
of the operations of U. S. bank subsidiaries established in
to those established
the EC and provides grandfathering
before 1993.
the absence of
(S)
Member
v
v
m
Firms engaged
in securities activities authorized under the proposed
Investment Services Directive vill, if the directive is
adopted, receive national treatment, as vill banks engaged
in securities activities authorized under the Second
Banking Directive.
Both directives provide for national
treatment of subsidiaries of non-EC institutions.
The
reciprocal national treatment provision is nearly identical
in the two directives.
Where the EC perceives that
effective market access in a third country is not
comparable to that in the EC, but national treatment is
provided, the Community may seek negotiations to obtain
comparable opportunities
for Community investment firms.
In these circumstances, the Commission reportedly would not
be authorized to take punitive action to deny entry to a
U. S. securities firm. U. S. securities sold cross-border
into the EC vill not be treated the same as securities of
an EC-chartered institution.
They vill be denied the
benefit of reduced costs in fulfilling disclosure
(prospectus) requirements for stock exchange listings or
public offerings of securities that is available to EC
securities. The prospectus for EC securities must be
mutually recognized by other Member States once approved by
one Member
State.
For non-EC securities,
approval
and
recognition is not automatic, but remains at
the discretion of each Member State. Equal treatment vith
EC securities is subject to bilateral negotiation
of
reciprocal recognition" of disclosure requirements of a
hence mutual
non-EC
state.
funds of U. S. institutions
sold cross-border to the
EC vill be subject to national
regulation.
Open-end mutual
funds may be set up and approved for sale vithin the EC on
the same basis as EC mutual funds and may be offered
throughout the Community by firms authorized under the
Investment Services Directive; however, distribution modes
would remain subject to marketing rules and practices of
Mutual
the individual
Member
States.
tialggl.
(B(
Foreign banks vere not allowed in
1Tl
prior to 1979; their presence is still very small.
Liberalization of Finland's financial markets, underway
since 1983, has continued in recent years, vith a variety
of steps to encourage a market-oriented evolution of
Finland's previously limited and tightly controlled
financial sector. Deregulation of limits on call market
interest rate spreads in 1986, folloved by the introduction
of CDs in 1987, contributed importantly to a
veil-functioning interbank money market. Nevertheless,
Finland has not been a profitable market for U. S. banks.
Pending legislation would permit the establishment
of
branches
in
1992
foreign bank
(presently only foreign
subsidiaries are permitted); hovever, this legislation
contains a reciprocity establishment provision.
In
addition, the Government has indicated its unvillingness to
permit foreign acquisition of a controlling interest (more
than 20 percent) in an established domestic bank.
Finland
EialtuUL
(
n
((
V
TTl
Substantial liberalization of
securities markets has occurred in recent years.
Regulatory changes in 1987-88 opened the vay for CDs,
commercial paper, and mutual funds; relaxation of capital
and foreign exchange controls opened access to foreign
capital markets and sharpened domestic competition. Any
registered bank, foreign or domestic, may apply for a
securities trading license. Pending legislation vould
permit direct foreign establishment of a securities firm,
vithout the current intermediate step of establishing a
The same legislation would
Finnish banking subsidiary.
also permit foreign branch establishment, sub)ect, however,
to a reciprocity provision.
m
I@&a. (B)
Restrictions remain on entry and
The number of foreign banks
banks.
expansion of foreign
India may be no greater than
in
and bank branches allo~ed
the number of Indian banks and branches vhich exist in that
foreign country. Since India's state-ovned banks find it
offices,
difficult to compete abroad and therefore have fev
of
U.
S. and
expansion
the
and
reciprocity limits new entry
other foreign banks in India. Once in the market, hovever,
'5-
—
oreign banks receive better than national treatment in
For
some areas and less than national treatment in others.
to
devote
15
required
are
only
example, foreign banks
governmentMetermined
priority
to
lending
of
percent
other
bank
all
of
40
percent
to
sectors in contrast
As noted, however, foreign banks are severely
lending.
restricted in the number of branches they may have, while
domestic banks are encouraged to open new branches.
Nevertheless, once in the market, a foreign bank reportedly
finds it profitable.
(S)
For the most
v
v
part, Indian capital markets are closed to foreign
investors. Indian stocks are not listed or traded in
overseas markets and foreign portfolio investors cannot
operate freely in Indian markets. U. S. banks have been
active in merchant banking and other investment services,
but are constrained by the fact that they are permitted
only a limited number of branches and are restricted by
Glass-Steagall from trading in foreign securities. There
has been some liberalization of investment in India by
nonresident Indians (NRIs), however, including the floating
of the India Fund, the India Growth Fund, the India Magnum
(SBI/Morgan Stanley) and the IS Himalayan Fund. U. S.
banks have been allo~ed to set up overseas funds and other
programs to attract NRI investment, but these have not been
given the same tax concessions as the Government-owned
funds. Merrill Lynch aided Unit Trust of India in floating
the India Growth Fund. Other financial services companies
are becoming interested in the Indian market, but present
regulations limit their scope of activity.
Fund
sZuaaO.
(B)
v
m
m
h v
n
m
v
w
v
v
'k
t dJP
tg b k
difficult to penetrate, particularly in traditional banking
functions. Japan has continued generally to provide
national treatment for foreign banks and in a few
isolated instances better than national treatment.
However, a number af .factors, including regulated interest
rates, restrictive operating regulations, strong ties among
related firms (keiretsu), excessive compartmentalization
of
'
~
+~
-16-
financial markets and lack of transparency, effectively
reduce foreign banks' competitive opportunities and in
certain cases burden foreign banking firms
disproportionately
relative to domestic firms.
While Japan continues to liberalize domestic financial
markets, the slow pace of reform has failed to keep up with
developments
in international financial markets.
Foreign
banks rely more heavily than their domestic counterparts
on
the domestic money markets for raising funds. While
reforms have been made, money markets remain underdeveloped
and unattractive
due to restrictive regulations,
a limited
range of permitted instruments,
and an array of taxes which
encumber virtually every instrument.
interest rates (affecting roughly 40 percent of
deposits) reduce the average cost of funds to
Japanese banks, in effect creating a subsidy which, on a
consolidated basis, gives them an advantage over foreign
banks in the Japanese market and allo~s them to tolerate
narrower profit margins overseas, thus facilitating their
expansion in these markets.
The substantial
amount of BOJ
lending to Japanese commercial banks contributes to this
Regulated
total
bank
advantage.
Finally, foreign firms have experienced
lack of transparency in the GOJ regulatory process;
participation in the rule-making process for new products,
services and markets is limited and foreign firms are not
systematically allowed early opportunity to comment on
funding
a
proposed
iZaaan.
rules.
(S)
Japanese authorities have
undertaken important market-opening measures in recent
years. These include: broadening access to the government
bond market (by increasing foreign firms' allocation in the
underwriting
syndicate in October 1988, and in April 1989
adopting a true price auction for 40 percent of 10-year
issues, which was expanded to a 60 percent auction in fall
1990); increasing the number of seats on the Tokyo Stock
Exchange in 1988 and 1990 (resulting in 10 seats for U. S.
firms of the 25 foreign-owned seats on the 125 member
exchange); introducing a variety of securities products in
domestic and Euroyen markets (e. g. , commercial paper) and
incremental liberalization of the domestic corporate bond
market (including expanding the list of eligible issuers,
and initiating shelf
some nev products such as QLOBEX
of
registration); approval
(Chicago-based electronic futures trading system);
establishment of futures and options markets and broadening
residents' access to those markets overseas; overhaul of
securities firms' capital guidelines (to eliminate
practical disadvantages foreign firms had faced); and
periodic efforts to improve transparency (e. g. , consulting
with the foreign community regarding capital guidelines and
changes in the domestic equity varrant market).
introducing
bond
ratings
Nevertheless, foreign firms argue that problems remain that
prevent them from achieving a comparable degree of success
For example, they cite
achieved in other markets.
impressive track records in investment trust management and
Yet despite
pension fund management in other markets.
recent regulatory changes to open those markets in Japan,
subsequent implementing measures and entry criteria vill
effectively keep foreign firms' participation minimal. In
addition, foreign firms have argued that a combination of
Japanese laws and practices makes difficult both the
introduction of new products into Japan and the ability of
Japanese investors to access foreign markets and products
abroad. Foreign securities firms have also maintained that
foreign exchange restrictions, vhich apply to domestic
securities firms as well, have unfairly placed them at a
disadvantage since they prohibit foreign firms from
efficiently offering innovative products and services at
which they excel worldwide.
At the May 1990 meeting of the
U. S.-Japan Working Group on Financial Markets, MOF
announced a variety of measures which, vhen fully
implemented,
should relax some of the restrictions on
introducing new products, accessing overseas markets and
offering foreign exchange services. Foreign firms have
also cited difficulties underwriting and distributing
issues. Finally, they maintain
that problems pertaining to transparency (including the
lack of a reliable consultation process) continue to place
them at a disadvantage
compared to their domestic
counterparts.
domestic bond and equity
In general, Tokyo is viewed as a key financial center, but
one in which change has not kept pace vith that in other
major centers.
By any standard of openness, Tokyo lags
substantially behind New York and London. Moreover, as new
markets and opportunities
arise in Japan, the ability of
foreign firms to use their expertise
-18-
and
take advantage
of
those possibilities is frequently hampered Qy
incremental market-opening approach Japanese authorities
Thus, despite significant steps forward/
have adopted.
process of creating a truly level playing field is far from
complete.
(B)
hl
dbms'gh&
. Us.
f
serious discriminatory restrictions on their ability to
establish and branch, obtain local currency funding,
increase their capital, mcpand their lending operations,
engage in the trust business, and have been denied access
to cash dispenser and electronic funds transfer networks.
Mhile foreign banks do enjoy some privileges, existing
restrictions on permissible activity and discrimination
result in an overall denial of equality of competitive
opportunity in the local market. Steps by the Government
of Korea to reduce discrimination have generally resulted
in reducing privileges formerly enjoyed by Q. S. and other
foreign banks, while the discriminatory restrictions
remain.
The ceilings on issuance of CDs and paid-in
capital have been raised, but remain inadequate.
As a result, the ability of V. S. and other foreign banks to
serve or expand their client base has eroded. The ROKG's
tight regulatory controls over interest rates, credit
allocation and foreign exchange operations apply to U. S.
disadvantage U. S. banks
and Korean banks, but particularly
which could otherwise excel at introducing new financial
products and services. Financial Policy Talks, initiated
by the V. S. Treasury Department with the Korean Ministry of
Finance, have produced expressions of willingness to
address some of these denials of full competitive
the measures noted above in the
from the MOF represent
November 28 communication
to begin redressing existing
measures
potentially useful
however, to ensure
problems.
It will be important,
complete articulation and follow-up on these and a range of
additional significant steps before equality of competitive
opportunity is realixed.
Furthermore,
opportunity.
(S)
OCCUjlRL
'I
liberalixation
institutions
'
4
* p
G
U
Korean
financial
allowing
have been aimed at
greater freedom to exploit opportunities in
4
~
-19-
The
the United States and other foreign capital markets.
Decmnber
revised
Korea's
for
1988
plan
Government of
liberalizing its capital markets delayed until 1991-1992
the important steps of licensing U. S. and other foreign
securities firms and allowing foreign financial
institutions and individuals direct access to the Korean
equities market. (The Government's original 1981
liberalization plan had envisioned completing these steps
by the late 1980s. ) Draft criteria for licensing U. S. and
other foreign securities firms released in late Novarer
appear highly restrictive, as are existing criteria for
Moreover, important
approving new foreign bank branches.
questions, such as equity composition and permissible
activities, remain unanswered at this time. Observers fear
that the range of permissible market opportunities may also
be severely limited when foreign securities firms and other
investors are allowed to participate directly in Korea's
capital markets. Expansion of the closed-end equities
funds, such as the Korea Fund, is a welcome development but
does not constitute a significant improvement in foreign
access to Korea's equities market. However, if the Korean
Government carries through with the measures cited during
the November 1990 Financial Policy Talks and the final
criteria for establishment are appropriately adjusted,
important improvements may be introduced over the next two
years.
i
(B)
v
m
M
n
w
j
h
i
f tg
Y
the 1930s.
nationalization of the Mexican banking
industry in 1982 reinforced barriers to direct entry.
Legislation is now in effect which will permit ma)ority
ownership of commefcial banks by the private sector. As
part of this reprivatization program, foreign investors as
a group will be allowed to own up to 30 percent of the
banks to be privatized.
Banks tend to conduct
international activity through branches and wholly owned
subsidiaries.
Therefore, it remains to be seen if any U. S.
banks will be interested in the Mexican reprivatization
program, given the remaining limitations on foreign
ownership and control.
XQISRSUl
may
\
The
h
h
d
(S)
Foreign commercial and investment banks
not establish branches or subsidiaries, although they
-20-
may
open
offices. They may only engage in
by purchasing a minority ownership of
bank, or by using a local Mexican
representative
securities activities
a brokerage
firm or
firm. Foreigners
are, ho~ever, allo~ed to
brokerage
but
purchase most public and private sector instruments,
to purchase stock directly,
have limited opportunities
although they may do so indirectly through mutual funds or
trusts.
(B)
v
Foreign banks continue to hold a large share of the
market and V. S. banks have a sizeable presence, but new
entry by foreign banks and expansion of their operations is
Fully licensed foreign banks have
generally restricted.
not been permitted to open new branches for several years.
Depending on the type of license a foreign bank holds,
is subject to restrictions limiting its ability to compete
for domestic banking business. Foreign banks have also
been restricted from introducing new technology if local
Singapore's
banks are not able to offer similar services.
offshore market, however, is significantly larger than the
it
domestic market, and foreign institutions
national treatment in this market.
are granted
(S)
past strictly
As
a
matter of policy, Singapore has in the
limited the activities of foreign firms in its securities
however, has recently pursued
market.
The Government,
market and
measures to make Singapore a major international
of
the
expertise
has thus recognized the need to tap
foreign firms. Since 1987, nine foreign securities firms
have received permission to form joint ventures with local
In October
brokerages with equity limited to 49 percent.
allow
foreign
would
1990, the Government announced it
securities firms to increase their ownership to 70 percent
this will
When implemented,
in these nine joint ventures.
new
of
share
joint
foreign
The
be a modest step forward.
49
percent.
to
limited
ventures, however, will still be
~w~
(3)
m
m
v
m
On the
in
treatment
national
~hole, foreign banks are still denied
of steps have been taken since 1987,
A number
Taiwan.
however, to liberalize the banking system and expand
foreign banks' ability to compete on an equal footing with
m
—21-
of these
Given the recent announcement
result
vill
remains
to be seen
they
liberalizations,
in actual progress. With the implementation of the revised
Banking Lav in April 1990, foreign banks are to be
Some
permitted to engage in saving and trust activities.
restrictions have also been relaxed on the entry of nev
foreign banks, the establishment of additional bank
domestic banks.
it
if
and foreign banks' ability to accept local
deposits. Nevertheless, discrimination against
foreign banks still remains in some of these areas,
particularly regarding their ability to fund themselves
competitively in local currency, the limitations on
branching, and the inability to establish subsidiaries.
Despite discriminatory treatment, the Taivan market has
been profitable for U. S. banks.
(S)
v
There has been only minor
improvement
in Taivan's treatment of foreign securities
firms since 1986. Foreign securities firms are far from
receiving national treatment.
In February 1990, the
authorities for the first time gave approval for two
foreign (U. S. ) securities firms to establish branches under
strict qualifications. Otherwise, foreign firms are only
permitted limited ovnership in securities operations and
may not establish
subsidiaries nor enter into )oint
ventures.
In addition, Taivan prohibits direct foreign
investment in local securities, the listing of foreign
securities on the local market, and the offering of
underwriting
services by foreign firms.
branches
currency
~w~
n
w
v
m
'
n
Venezuela
places severe restraints on foreign banks' establishment
and operations.
However, Venezuelan officials have
recently acknovledged the need to modernize the country' s
financial system and have indicated that a gradual opening
to foreigners vill be permitted.
In the context of a World
Bank financial sector loan, the GOV announced plans to
increase the permissible level of foreign equity
participation in commercial banks from 20 to 30 percent and
allov foreigners to purchase bank shares from Venezuelans
rather than exclusively from foreigners.
In 1990, foreign
firms vere allowed to own 100 percent equity in
domestically incorporated nonhank financial services
firms. It remains to be seen how these new developments
vill unfold in actual practice.
-22-
(S)
access, however,
offices,
is relatively
Foreign
easy via representative
in a variety of consulting and
Foreigners can also purchase any
amount of stock on the local exchange, except in the
commercial bank sector, and may purchase a seat on the
exchange provided the member company contains some minority
local content. Foreign corporations based in Venezuela can
now issue any type of stock, bond or commercial paper on
the stock exchange after meeting national requirements.
Some American firms interested in securities and investment
banking maintain that they have been able to engage in some
of these activities, primarily, however, from offshore or
by using a local Venezuelan firm.
The January 1990
promulgation of Decree 727 could result in greater direct
foreign access to Venezuelan capital markets through the
formation of wholly owned domestic subsidiary companies of
a foreign financial institution.
Although the local
capital market has been small historically, the opening of
the market to foreigners, the issuing of Central Bank
zero-coupon bonds, and the privatization of state
investment
which may engage
advisory
enterprises
may
work.
expand
this market.
significant improvement in 1985 when
licenses were offered to five U. S. banks (four
were utilized and three applications were denied), little
additional progress has been made toward national
treatment.
Additional trading bank licenses are not
expected to be offered to foreign interests in the
foreseeable future although more limited licenses are
available. Deregulation, however, has continued. The
interest rate ceiling on new housing loans was removed in
1986; the savings bank reserve asset ratio was reduced in
1987; and the distinction between savings banks and trading
banks was removed in 1989. With respect to nonbank
financial institutions, the 50 percent limit on foreign
ownership of money market dealers was removed in 1990 and
the requirement that ownership be spread among several
owners was abolished.
trading
Following
bank
-23-
entry and operations in China are
Foreign banks can only open branches
severely restricted.
zones and the Pudong area.
economic
five
special
in the
They cannot take local currency deposits or provide local
currency loans. Foreign banks may open representative
offices in other areas, but they cannot engage in direct
profit-making business.
Foreign banks'
w
v
m
w
reforms in the banking sector permit
existing foreign bank branches to expand and new foreign
entrants to establish branches, provided they form )oint
ventures with existing national banks. While restrictions
remain on capital requirements
and some lending activities,
foreign banks can conduct the same banking operations as
domestic banks and lend to customers throughout Indonesia.
In addition, in Indonesian securities markets, recent
reforms in the stock exchange and bond markets have
permitted the establishment of foreign )oint venture
securities houses which can act as stock brokers, traders
Zg~~~ Recent
and
underwriters.
E a&.
n
h
m
After initial deregulatory moves in the mid-1980s
permitting entry of foreign banks as subsidiaries,
regulatory changes in February 1990 are expected to open
the banking sector by allowing Norwegian subsidiaries of
foreign banks to open branches and branches of foreign
banks to be established (if authorities are satisfied with
depositor protection). Moreover, the Government of Norway
is considering permitting the purchase of local financial
institutions by foreign banks from countries that grant
this right to Norwegian banks. Also, subsidiaries of
foreign banks have been granted securities trading
licenses, which enable them to compete on an even footing
with the local banks.
h'
remains
financial
ni
tg
h
k
limited to minority
institutions
and
'
y
6
h'1'ppt
participation in domestic
offshore banking units, and to
representative offices in Manila. V. S. banks that were
established before restrictions were introduced on new
entries account for about one-sixth of the commercial
banking market.
They are, however, prohibited from opening
Whether they
new branches and offering trust accounts.
will be able to establish automated teller machines off
their premises remains to be seen.
'm
vm
Foreign participation in Sweden's financial markets has
been permitted since 1986. Following an official
government report recommending extensive liberalization
of
Sweden's banking law (in the context of the European
Second Banking Directive), legislation was
changes, including the opening of
foreign bank branches.
This law took effect in August
1990. In addition, by mid-1989 most remaining foreign
exchange controls (dating from World War II) were
abolished, thereby enabling foreign investors and
institutions to acquire Swedish money market instruments
and bonds.
It appears there are no substantive constraints
on foreign banks' activities in Sweden.
Community's
passed to
effect these
The treatment of
foreign banks in Thailand has not changed since 1986.
Foreign banks are still limited to only one branch office,
and may not goin a Thai ATM network nor initiate one of
their own. Operations of foreign banks are also impaired
loan to capital ratios based on branch
by stringent
capitalization and the requirement to invest their capital
Moreover, a 10
in low-yielding government securities.
percent withholding tax on foreign funds brought into
Thailand is imposed on U. S. banks because of the absence of
a bilateral tax treaty between the United States and
Thailand.
TurJmx
As a matter
v
of law and policy there is no discrimination
The establishment
against foreign financial institutions.
governed
are
by the same laws
operations
of banks and their
Despite equal
banks.
national
that govern
and regulations
status under the law, foreign banks are at the following
the value of
financial and competitive disadvantages:
limits, has
lending
legal
to
linked
their capital, which is
cannot
banks
hedge
been eroded by inflation; foreign
-25-
inflation through revaluation of fixed assets (as their
domestic competitors can) and they cannot use their global
capital to meet lending limits; and finally, as borrowers
dependent on the interbank market, they pay withholding
taxes which puts them at a price disadvantage when
on-lending, even though this cost may be credited against
annual income taxes. U. S. banks in Turkey remain
profitable, but are reexamining their options, including
the possibility of converting branches to subsidiaries.
IMR
nk
X
U. S. banks may not operate in the domestic banking
market of the Soviet Union.
They may represent foreign
clients through representative offices. There is no
securities market in the Soviet Union.
Zzm~
French authorities
are trying to
attract foreign financial firms to France as part of
a
strategy to make Paris a major European financial center:
foreign firms can now own French brokerages; 25 percent of
the members of the French futures market are foreign firms;
and foreign firms are authorized primary dealers.
With
elimination of all foreign exchange controls and the
comprehensive deregulation of financial markets, France has
become a more attractive, albeit more competitive,
financial marketplace.
can
U. S. financial institutions
enter the French securities markets on the same conditions
as French firms by establishing a subsidiary or a branch
(dependent on U. S. laws). Procedurally, they are treated
differently when making acquisitions, since non-EC firms
(defined as firms controlled by non-EC entities) must
receive prior approval from the Ministry of Finance.
French authorities bar U. S. firms from lead managing
domestic French franc bond issues, as a reciprocity protest
against Glass-Steagall restrictions on French banks
operating in the U. S.
n
v
restrictions
Some
operational
impact on U. S. firms' competitive positions.
The two most important concerns of U. S. financial
-26-
are data processing requirements
on operations of direct foreign bank
Branches may not participate in the federal bond
branches.
consortium or lead manage foreign DM bond
underwriting
flotations in the FRG, although the same restrictions do
not apply to subsidiaries.
There are also unresolved
questions concerning foreign branches' capital
requirements,
particularly for non-EC banks. In the
federal debt market, the largest securities sector, foreign
bank subsidiaries have substantially
greater opportunity
for the acquisition of federal bonds since the introduction
of an auction technique in summer 1990. The language
requirement for directors of subsidiaries alsb continues to
concern some U. S. financial institutions in the FRG.
institutions
restrictions
v
Ltalx
v
v
Although the Government
of Italy (GOI) has adopted a more relaxed policy toward
bank entry rules, reciprocity at establishment
still
applies. All foreign banks, which in Italy can engage in
securities activities, can open branches throughout Italy
and lending is no longer geographically
limited. While
capital requirements have eased for non-EC banks (lire 12.5
billion vs. previous lire 25 billion needed to establish a
branch), EC banks will be relieved of this constraint
consistent with the EC Second Banking Directive. Although
neither foreign nor domestic corporations may operate as
stockbrokers, this restriction disproportionately
impacts
on foreign firms.
Pending legislation is expected to
redress this.
v
financial
Securities
markets are generally open to foreign firms.
regulations were eased significantly in 1986. Lead
bond issues, however, is
managing guilder-denominated
which does not appear
requirement,
to
a
reciprocity
subject
Firms
not incorporated in
to be a barrier for U. S. banks.
the Netherlands or another EC country face separate
licensing requirements for securities-related activities
activities.
on their underwriting
and have limitations
Dutch
regulatory
Despite the existence of some troublesome
have
U. S. financial institutions
requirements,
-27-
operational opportunities in Switzerland which
The opening of the big
have been pursued vigorously.
to
foreign participation is a
syndicate
banks" underwriting
firms
are not involved.
welcome move, even though U. S.
Restrictions on work permits for foreigners handicap all
securities firms in Switzerland as does the tax on
considerable
securities transactions.
m
Major market and regulatory changes in the U. K. since 1986
have significantly widened the range of business
opportunities available to both domestic and foreign firms
in the securities industry in Britain. The FSA
in a manner that has provided de facto
national treatment to American firms. No bilateral
problems have arisen with respect to the reserve
reciprocity provisions of the FSA. Foreign firms, which
were only beginning to be admitted to the stock exchange in
1986, are now widely represented on the exchange and are
members of its executive board.
An American is the head of
the principal securities self-regulatory agency, TSA. U. K.
regulators have taken the lead in establishing bilateral
supervisory understandings
with the SEC, the CFTC and the
U. S. banking authorities.
These have facilitated the
smooth authorization
of U. S. firms to operate in the U. K.
consistent with the authorities' supervisory
responsibilities under the FSA. Regulation has become more
codified, more transparent and more expensive. The
opportunities provided in the U. K. have been keenly
competitive, particularly since the 1987 market decline.
Aggressive expansion by American firms has been followed by
some contraction and consolidation
over the last two years.
operating
has been implemented
-28-
Dr. David C. Mulford,
Treasury
Report on
("National
Under
Secretary for
Affairs, will brief the press on the 1990
Foreign Treatment of U. S. Financial Institutions
International
Study"
Treatment
DATE:
Tuesday,
TIME:
ll:00 a. m.
PLACE:
Room
December
4121,
).
11, 1990
EMBARGOED
Main
UNTIL
12:00
NOON.
Treasury
Press without Treasury credentials must provide name, date
of birth, social security number and organization to
Treasury Public Affaire at 566-2041 no later than 5:00 p. m.
on Monday.
1990 Report on Foreign Treatment of U. S. Financial
Institutions ("National Treatment Study" ) will be released
to the press.
The
DATE:
Tuesday,
TIME:
10:00 a. m.
PLACE:
Main
December
11, 1990
EMBARGOED
Treasury,
FOR RELEASE AT
12:00
15th Street courier entrance.
NOON.
Iriment of the Treasury
FOR IMMEDIATE
December
RELEASE
11, 1990
TREASURY ANNOUNCES
~
Wciihlnlton,
o.c. ~ Telephone sl6-204~
Crispen
(202) 566-5252
CONTACT:
Cheryl
CHANGE IN REGULAR QUARTERLY
BEGINNING IN JANUARY 1991
AUCTION
CYCLES
Department today announced that, beginning in
the
1991,
January
Treasury will auction, on a monthly basis, 5year notes for settlement on the last day of each month. They
will mature five years from the date of issue. The Treasury
expects to announce the regular monthly 2- and 5-year notes
during the third week of each month.
The announcement
of regular
2- and 5-year notes is tentatively scheduled for January 16,
1991.
The Treasury
will discontinue sales of 5-year, 2-month,
notes that have been offered in regular quarterly auctions since
February 1980. The last 5-year, 2-month note was the one
auctioned on Thursday, November 28, for settlement on Monday,
December 3. Furthermore,
following the sale of a-year notes in
scheduled to be announced on
December, which is tentatively
December 19, the Treasury will discontinue sales of 4-year notes.
The Treasury has offered 4-year notes in regular quarterly
auctions since June 1975.
The Treasury
On balance,
the change in Treasury's financing pattern will
four intermediate term coupon offerings each year, compared
with the current quarterly offerings of 4-year and 5-year, 2month notes.
The monthly cycle of 5-year notes will have the
advantage that the Treasury can raise added cash in the
intermediate term maturity sector and lessen Treasury's reliance
Moreover,
on short-term bills to finance the Federal deficit.
the end-of-month maturity dates of the 5-year notes will spread
Treasury maturities more evenly throughout the year and lessen
the build-up of maturing issues on Treasury's regular mid-quarter
refunding dates, when 3-, 10-, and 30-year securities are
add
offered.
NB-1061
iriment of the Treasury
~
4:00 P. M.
11, 1990
FOR RELEASE AT
December
washington,
CONTACT:
o.c. ~ Telephone $16-2oi1
Office of Financing
202/376-4350
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice, invites
tenders for two series of Treasury bills totaling approximately
$20, 000 million, to be issued December 20, 1990. This offering will
provide about $2, 025 million of new cash for the Treasury, as the
maturing bills are outstanding
in the amount of $17, 969 million.
Tenders will be received at Federal Reserve Banks and Branches and
at the Bureau of the Public Debt, Washington, D. C. 20239-1500,
Monday. December 17, 1990, prior to 12:00 noon for noncompetitive
tenders and prior to 1:00 p. m. , Eastern Standard time, for competitive tenders. The two series offered are as follows:
91-day bills (to maturity date) for approximately
$10, 000 million, representing an additional amount of bills dated
September 20, 1990, and to mature March 21, 1991 (CUSIP No. 912794
WA 8), currently
outstanding in the amount of $9, 252 million, the
additional and original bills to be freely interchangeable.
182-day bills for approximately $10, 000 million, to be
dated December 20, 1990, and to mature June 20, 1991 (CUSIP
No. 912794 WP 5).
The bills will
and noncompetitive
be payable without
be issued on a discount
bidding, and at maturity
basis under competitive
their par amount will
interest. Both series of bills will be issued
entirely in book-entry form in a minimum amount of $10, 000 and in
any higher $5, 000 multiple,
on the records e ther of the Federal
Reserve Banks and Branches, or of the Department of the Treasury.
bills will
be issued for cash and in exchange for Treasmaturing December 20, 1990. In addition to the maturing
13-week and 26-week bills, there are $9, 814 million of maturing
The
ury
bills
52-week bills.
The disposition
last week. Tenders from Federal
of this latter
amount
was announced
Reserve Banks for their
own
account
for foreign and international monetary authorities
will be accepted at the weighted average bank discount rates of
accepted competitive tenders.
Additional amounts of the bills
may be issued to Federal Reserve Banks, as agents for foreign and
international monetary authorities, to the extent that the aggregate amount of tenders for such accounts exceeds the aggregate
amount of maturing
bills held by t.".em. For purposes of determining
such additional
monetary authoriamounts, foreign and international
ties are considered to hold $226 million of the original 13-week and
26-week issues.
Federal Reserve Banks currently hold S667 million
as agents for foreign and international
monetary authorities,
and
These amounts represent the
$6, 995 million for their own account.
combined holdings of such accounts for the three issues of maturing
bills. Tenders for bills to be mai.".tained on the book-entry records
the Department of the Treasury shoul" be submitted on Fora
PD 5176-2 ( '"-r 26-week
5176-1 ( for 13-week series ) cr
series ).
and
as agents
Fo™
TREASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page
2
Each tender must state the par amount of bills bid for,
which must be a minimum of $10, 000. Tenders over $10, 000 must
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
A single
two decimals, e. g. , 7. 15%. Fractions may not be used.
bidder, as defined in Treasury s single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
and dealers who make primary
Banking institutions
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers, if
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
position in the bills being offered if such position is in excess
of $200 million. This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction. Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
each customer whose net long position in the bill being offered
exceeds $200 million.
noncompetitive bidder may not have entered into an
agreement, nor make an agreement to purchase or sell or otherwise dispose of any noncompetitive awards of this issue being
auctioned prior to the designated closing time for receipt of
A
tenders.
bills applied for
for bills to be maintained
records of the Department of the Treasury.
A cash adjustment
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined in the auction.
No deposit need accompany tenders from incorporated
banks
and trust companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches.
Payment for the full
accompany all tenders
must
on the book-entry
8/89
par amount of the
submitted
'IGGUJSURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 3
Public announcement will be made by the Department of the
Treasury of the amount and yield range of accepted bids. Competitive bidders will be advised of the acceptance or rejection
of their tenders.
The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g. , 99.923, and the determinations
of the Secretary of the Treasury shall be final.
Settlement
for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
on the issue date, in cash or other immediately-available
funds
or in Treasury bills maturing on that date. Cash adjustments
will be made for differences between the par value of the
maturing bills accepted in exchange and the issue price of the
new
bills.
If a bill is
purchased at issue, and is held to maturity,
the amount of' discount is reportable as ordinary income on the
Federal income tax return of the owner for the year in which
Accrual-basis taxpayers, banks, and other
the bill matures.
persons designated in section 1281 of the Internal Revenue Code
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
of the Treasury Circulars, Public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtained
Department
Federal Reserve Bank or Branch, or from the Bureau of
the Public Debt.
from any
8/89
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The item identified below has been removed in accordance with FRASER's policy on handling
sensitive information in digitization projects due to copyright protections.
Citation Information
Document Type: Transcript
Number of Pages Removed: 11
Author(s):
Title:
Date:
Briefing by Undersecretary David Mulford (Topic: The Treasury Department's 1990 Report on
Foreign Treatment of U.S. Financial Institutions)
1990-12-11
Journal:
Volume:
Page(s):
URL:
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
portment of the Treasury ~ Washlnion,
a-v
FOR IMMEDIATE
December
j;
RELEASE
i
CONTACT:
13, 1990
TREASURY
O.C. ~ Telephone S81-204'
Barbara Clay
(202) 566-5252
SETTLES CASE WITH ABC SPORTS OVER
1991
PAN
AMERICAN
GAMES
The Department
of the Treasury today announced the
of a lawsuit brought by Capital Cities/ABC, Inc. ,
regarding royalty payments to Cuba in connection with ABC Sports'
The
U. S. broadcast of the 1991 Pan American Games from Cuba.
terms
under
settlement agreement provides the
and conditions
which ABC may make limited payments to Cuba for goods received
in connection
and services provided by Cuba or Cuban nationals
with the Games' broadcast.
settlement
ABC's proposal for live coverage of the Games included an
indirect $6. 5 million royalty payment to Cuba for the exclusive
under the
U. S. broadcast rights, an illegal transaction
On
Cuba.
in
against
place
U. S. economic embargo
comprehensive
the
broadcast
that basis, ABC's application for permission to
Office of Foreign Assets
Games was turned down by Treasury's
Control.
In a lawsuit filed by ABC in December 1989, ABC asserted
that a 1988 amendment to the Trading with the Enemy Act, which
prohibited the President from regulating the importation of
materials, also prohibited the regulation
various informational
transactions in economic
of international 'telecommunications
sanctions programs under that act.
On June 29, 1990, the U. S. District Court for the Southern
transactions
District of New York ruled that telecommunications violate
the
and did not
were not covered by the 1988 amendment
was
action
Treasury's
that
ruled
also
Court
The
First Amendment.
foreign
conduct
to
authority
President's
the
a valid exercise of
which strengthens
affairs. The lawsuit resulted in an opinion
embargoes.
economic
Treasury' s ability to enforce
In July, ABC appealed the lo-'er c=urt's ruling to the U. S.
Settlement discussions
.
Circuit Court for the Second Circui
-.
the
settlement agreement
~
in
i.
t
culmina
began soon the rea f ter,
".
is
substantially similar
t
agree~e.
The settlement
signed today.
".
office
of Foreign Assets
=he
to the terms originally offered
1989.
of
summer
Control to ABC Sports in the
oOo
NB-1063
Il 11
POR IMMEDIATE
December
OB
90-71
F
OVERSIGHT%' BOARD
Resolu5an Tma Caqparalon
S 7 R R 5 T. N. W.
W A 5 H I N G T P N,
Contact:
iQKZASE
12, 1990
D. C x o 2 3 z
Palisa
M. Neuringer
(202) 786-9672
OVERSIGHT BOARD NAMES VICE PRESIDENT OF
PUBLIC AFFAIRS
AND
PUBLIC LIAISON
The Oversight Board for the Resolution Trust Corporation
Siddon as
of Arthur
(RTC) announced today the appointment
effective
affairs
and
liaison,
public
of
public
president
J.
vice
immediately.
Mr. Siddon comes to the Oversight Board from the Department
of Treasury where he served as director of public affairs,
overseeing media relations, since 1989. Mr. Siddon )oined the
Treasury Department as a senior public affairs officer in 1984.
vice president of public affairs and public liais'n, Ya.
Siddon will serve as the agency's chief spokesman and head the
division that communicates the Oversight Board's policies and
actions to the public and the press.
"Mr. Siddon has a diverse background in the press, policymaking and finance, " said Peter H. Monroe, president of the
Oversight Board. "This valuable experience makes me confident
of
that Mr. Siddon will be a great asset to the effort American
the Oversight Board's policies to the
communicating
"
public.
As
Before joining the Treasury Department, Mr. Siddon was the
Budget
press secretary for the House of Representatives
1984.
to
Committee's minority staff from 1982
Mr. Siddon made his transition to the public affairs field
for the Chicago Tribune.
after spending 18 years as a reporter
Prom 1972 to 1982, Mr. Siddon was the Tribune's chief
C. Mr. Siddon
congressional correspondent in %ashington,for D.the
Tribune in
served as a general assignment reporter
Chicago from 1964
to 1971.
more
2
Mr. Siddon received
Miami
University
a bachelor's degree in Znglish
in Oxford, Ohio, in 1961.
from
The Oversight Board formulates the policy, approves the
funding, and provides the general oversight of the RTC, t~. e
agency responsible for resolving the nation's failed thrifts.
~HT
~
~o
OVERSIGHT BOARD
I777
FOR IMMEDIATE
December
OB
90-72
F
Resoluhan Tma C
STREET. N. W. WhSHlNGTON.
RELEASE
17, 1990
Cantact:
D. C
10232
Art Siddon
Felisa Neuringer
(202) 786-9672
OVERSIGHT BOARD NAMES SENIOR ANALYSTS
The Oversight
today the appointment of
several senior analysts to the staff- Effective immediately,
Donald Bean Jr. will serve as senior oversight specialist, Karen
K. Edwards as senior policy analyst, Douglas P. Foster as senior
financial analyst, and Margot Schwadron as evaluations
Board announced.
specialist.
"The Oversight Board is fortunate to have attracted four
persons of such intellectual and analytical caliber, " said Peter
"Three of them will
H. Monroe, president of the Oversight Board.
add weight to such oversight capabilities while the fourth brings
considerable knowledge of thrift valuation to our policy side, "
he added.
senior oversight specialist, F~. Bean will analyze and
policy recommendations on the management and disposition of
As
make
RTC's
assets.
Before Joining the Oversight Board, Mr. Bean was a real
law firm of Wolf, Block, Schorr and
Pa.
Solis-Cohen in Philadelphia,
estate attorney with the
received a bachelor's degree in economics from the
University of Chicago M 1979 where he graduated with honors. He
also received a master's of business administration and law
degree from the University of Chicago in 1982.
As senior policy analyst, Ms- Edwards develops overall
strategies, policies and goals for the RTC's activities.
Ms. Edwards comes to the Oversight Board from serving as the
D. C. , office of American Appraisal
head of the Washington,
Associates Inc. since 1989. In 1987, Ms. Edwards co-founded the
Neritas Group Inc. , a financial advisory, valuation and ".
consulting firm for banks, thrifts and investors in ina. cial
institutions in Washington, D. C. , and Chapel Hill, N. C.
Mr. Bean
Ms. Edwards was vice president
Washington, D. C. , office of Trident
of corporate finance of the
Financial Corporation, an
investment banking firm specializing in the thrift industry, from
1984 to 1986. She has prior experience in commercial insurance
underwriting
and the securities industry.
A chartered
financial analyst, Ks. Edwards graduated curn
laude from Carleton College in Northfield, Minn. , in 1978 with a
bachelor's degree in French literature.
She received a master of
business administration
from the University of Virginia's Darden
School in Charlottesville
in 1984. Ms. Edwards is a member of
the board of directors of the Washington Society of Investment
Analysts and a member of Women in Housing and Finance.
As
senior financial
area of RTC's financial
analyst, Mr. Foster will oversee the
reporting.
Prior to working for the Oversight Board, Mr. Foster was the
chief accountant in the corporate and securities division of the
Office of Thrift Supervision (formerly the Federal Home Loan Bank
Board) in Washington, D. C. , since 1986. From 1984 to 1986, he
served as a staff accountant in the division of corporate finance
of the Securities and Exchange Commission
in Washington,
D. C.
Mr. Foster spent nearly three years as the manager of
financial operations of the University of Virginia Health
From 1978 to 1981, Mr.
Services Foundation in Charlottesville.
Foster worked as a cost manager and assistant plant controller
for AVX Corporation, a high-tech manufacturing firm in Myrtle
Beach, S.C. , and from 1976 to 1978, he was a senior accountant
for Coopers and Lybrand in New York.
Foster, a certified public accountant, received a
from
bachelor of science degree in business administration
Va.
1976.
in
Lexington,
in
Washington and Lee University
,
Mr.
evaluations specialist, Ms. Schwadron vill analyze and
evaluate RTC's operating and financial performance.
As
Before working for the Oversight Board, Ms. Schwadron was an
associate in the mergers and acquisitions department at the
investment bank of Wood Gundy Corp. in New York since 1988. She
also spent the summer of 1987 as an associate in Wood Gundy's
From 1984 to 1986, Ms. Schwadron
corporate finance department.
served as a financial analyst in the corporate finance departme. -, t
of Salomon Brothers Inc. in New York.
graduated
curn laude and Phi Beta Kappa
with a bachelor of science degree in economics and computer
science from Tufts University in Medford, Ma. , in 1984. She
received a master of business administration from the University
Ms. Schwadron
Of
Pennsylvania's
Wharton
summa
School M Philadelphia
in 1988.
The Oversight Board formulates the policy, approves the
funding, and provides the general oversight of the RTC, the
agency responsible for resolving the nation's failed thrii'ts.
&arimint of the treasury
FOR IMMEDIATE
December
~
Washiniton, O.C.
RELEASE
,
L;
CONTAC7
13, 1990
TREASURY ANNOUNCES
HOLIDAY
~
Telephone SS6-2041
: , Office of Financing
202/ 37 6-4 3 50
AUCTION
SCHEDULE
The Treasury Department will auction regular weekly 13- and
bills on Friday, December 21, for settlement on Thursday,
December 27, 1990. The amount to be sold will be announced on
Tuesday, December 18.
26-week
auction regular weekly 13- and
December 31, for settlement on Thursday,
3. 1991. Noncompetitive tenders will be received prior
to 11:00 a. m. and competitive tenders will be received prior to
12:00 noon Eastern Standard time. The amount to be sold will be
announced on Wednesday, December 26, prior to the deadline for
submitting tenders in the 2-year note auction.
The Department will
bills on Monday,
26-week
January
2-
and 4-year notes to be auctioned for settlement on
Monday, December 31, are scheduled to be announced on Wednesday,
December 19, and auctioned on Wednesday and Thursday, December 26
and 27, respectively.
The
will announce on Wednesday, January 2, 1991,
the regular weekly 13- and 26-week bills to be auctioned on
January 10, 1991.
Monday, January 7, and issued on Thursday,
The Department
oOo
VB-1064
''
t vuwiu
Department
DEBT NEW
~
of the Treasury
Bureau of the Public Debt
:- ~i2;, :j
FOR IMMEDIATE
ll'ashington,
CONTACT:
n
C4
t
/
DC 20239
„
RELEASE
13, 1990
December
~
~
Office of Financing
202-376-4350
~/
RESULTS OF TREASURY'S AUCTION
OF 52-WEEK
BILLS
for $11, 779 million& of 52-week bills to be issued
20, 1990 and mature on December 19, 1991 were
accepted today (CUSIP: 912794WX8).
Tenders
on December
OF ACCEPTED
COMPETITIVE BIDS:
RANGE
Discount
Rate
6. 57%
6. 59%
6. 58%
Investment
Rate
7. 01%
7. 03%
7. 02%
Price
93. 357
93 ' 337
High
Average
93. 347
Tenders at the high discount rate were allotted 45%.
The investment rate is the equivalent coupon-issue yield.
Low
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS
NB-1065
Received
20, 845
23, 377, 635
13, 680
22, 205
25, 335
25, 870
1, 604, 535
18, 405
4, 860
30, 665
7, 085
806, 505
189 095
(in thousands)
20, 845
10, 893, 635
13, 680
22, 205
25. 335
25, 850
375, 785
13, 305
4, 860
30, 655
7, 085
156, 485
189 095
$26, 146, 720
$11, 778, 820
$22, 927, 350
$8, 559, 450
2, 400, 000
2, 400, 000
249 500
$26, 146, 720
$11, 778, 820
569 870
$23, 497, 220
569 870
$9, 129, 320
249 500
sri
eni of ihe TreasuFY
~
Nashlng fon, O.C ~ Telephone Idd-204
December
ASSISTANT
13, 1990
BRYCE L. HARLOW
SECRETARY (LEGISLATIVE AFFAIRS)
TO LEAVE TREASURY
Assistant
Secretary for Legislative Affairs Bryce L. Harlow today
announced his intention to accept a position in the private
sector early next year. Mr. Harlow cited family obligations as
the reason for his decision.
Secretary of the Treasury Nicholas F. Brady commended Mr. Harlow
for his dedication and abilities.
"Larry has been an important
and valued contributor
to Treasury over the last two years and he
will be missed, " he said. "I know all of us at Treasury wish
Larry the best in the future. "
has been in government for the last decade.
He has
in his present position since 1989. He served the full
eight years of President Reagan's Administration
in several
capacities, including two appointments as Special Assistant to
the President for Legislative Affairs during President Reagan's
second term.
In. his present position, Mr. Harlow has been
responsible for" the management of all legislative matters
affecting the Department of the Treasury and has advised the
Mr. Harlow
served
Secretary
NB-1066
on
political
developments
and
congressional
relations.
OVERSIGHT BOARD
II71
FOR IMMEDIATE
December
OB
90-72
F
Resoluhon Tmk C
STREET. N- W. W h S H 1 w
RELEASE
17, 1990
GT
0 N,
Contact:
D. C z o z 3 2
Art Siddon
Felisa Neuringer
(202) 786-9672
OVERSIGHT BOARD NAMES SENIOR ANALYSTS
today the appointment of
several senior analysts to the staff. Effective immediately,
Donald Bean Jr. will serve as senior oversight specialist, Karen
K. Edwards as senior policy analyst, Douglas P- Foster as senior
financial analyst, and Margot Schwadron as evaluations
The Oversight
Board announced
specialist.
"The Oversight Board is fortunate to have attracted four
persons of such intellectual and analytical caliber, " said Peter
"Three of them will
H. Monroe, president of the Oversight Board.
add weight to such oversight capabilities while the fourth brings
considerable knowledge of thrift valuation to our policy side, "
he added.
senior oversight specialist, Mr. Bean will analyze and
policy recommendations on the management and disposition of
As
make
RTC's
assets.
Before joining the Oversight Board, Mr. Bean was a real
estate attorney with the law firm of Wolf, Block, Schorr and
Pa.
Solis-Cohen in Philadelphia,
received a bachelor's degree in economics from the
University of Chicago in 1979 where he graduated with honors.
also received a master's of business administration and law
degree from the University of Chicago in 1982.
As senior policy analyst, Ms. Edwards develops overall
strategies, policies and goals for the RTC's activities.
Ms. Edwards comes to the Oversight Board from serving as the
D. C. , office of America~ Appraisal
head of the Washington,
Associates Inc. since 1989. In 1987, Ms. Edwards co-founded the
Neritas Group Inc. , a financial advisory, valuation a;.d
consulting firm for banks, thrifts and investors in financial
institutions in Washington, D. C. , and Chapel Hill, ?'. C.
Mr. Bean
Ms. Edwards was vice president of corporate finance of the
Washington, D. C. , office of Trident Financial Corporation, an
investment banking firm specializing in the thrift industry, from
1984 to 1986. She has prior experience in commercial insurance
underwriting and the securities industry.
chartered financial analyst, Ms. Edwards graduated curn
laude from Carleton College in Northfield, Minn. , in 1978 with a
bachelor's degree in French literature.
She received a master of
business administration
from the University of Virginia's Darden
School in Charlottesville
in 1984. Ms. Edwards is a member of
the board of directors of the Washington Society of Investment
Analysts and a member of Women in Housing and Finance.
A
As
senior financial
area of RTC's financial
analyst, Mr. Foster will oversee the
reporting.
Prior to working for the Oversight Board, Mr. Foster was the
chief accountant in the corporate and securities division of the
Office of Thrift Supervision (formerly the Federal Home Loan Bank
Board) in Washington, D. C. , since 1986. From 1984 to 1986, he
served as e staff accountant in the division of corporate finance
of the Securities and Exchange Commission in Washington, D. C.
Mr. Foster spent nearly three years as the manager of
financial operations of the University of Virginia Health
From 1978 to 1981, Mr.
Services Foundation in Charlottesville.
Foster worked as a cost manager and assistant plant controller
for AVX Corporation, a high-tech manufacturing firm in Myrtle
Beach, S.C. , and from 1976 to 1978, he was a senior accountant
for Coopers and Lybrand in New York.
Mr. Foster, a certified public accountant, received a
from
bachelor of science degree in business administration
Va.
1976.
in
Lexington,
,
Washington and Lee University in
evaluations specialist, Ms. Schwadron will analyze and
evaluate RTC's operating and financial performance.
As
Before working for the Oversight Board, Ms. Schwadron was an
associate in the mergers and acquisitions department at the
investment bank of Wood Gundy Corp. in New York since 1988. she
also spent the summer of 1987 as an associate in Wood Gundy's
From 1984 to 1986, Ms. Schwadron
corporate finance department.
in
the corporate finance department
served as a financial analyst
of Salomon Brothers Inc. in New York.
Ms. Schwadron graduated summa curn laude and Phi Beta Kappa
with a bachelor of science degree in economics and computer
science from Tufts University in Medford, Ma. , in 1984. She
received a master of business administration from the University
of Pennsylvania's Wharton School in Philadelphia in 1988.
The Oversight Board formulates the policy, approves the
funding, and provides the general oversight of the RTC, the
agency responsible for resolving the nation's failed thrii'ts.
"r uzi&v
Department
of the Treasury
FOR IMMEDIATE
BT
~
Bureau of the Public Debt
.
RELEASE
DC 20239
)q~
CONTACT:
17, 1990
December
~ l~'ashington,
)
L t)
RESULTS OF TREASURY'S AUCTION
Office of Financing
202-376-4350
OF 13-WEEK
BILLS
for $10, 014 million of 13-week bills to be issued
20, 1990 and mature on March 21, 1991 were
accepted today (CUSIP: 912794WA8).
Tenders
on December
OF ACCEPTED
COMPETITIVE BIDS'
RANGE
Discount
Rate
6. 77%
6. 79%
6. 78%
Investment
Rate
Price
6. 98%
98. 289
Low
7. 00%
98. 284
High
6. 99%
98. 286
Average
Tenders at the high discount rate were allotted 8%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED
Location
Boston
New
Philadelphia
52 , 605
82 , 740
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Public
Federal Reserve
Foreign Official
Institutions
TOTALS
ACCEPTED
Received
45 , 175
31, 950 , 935
29 , 810
York
Subtotal,
AND
(in thousands)
Acce ted
45, 175
8, 925, 900
29, 810
52, 235
82, 740
34, 355
36 , 195
1, 259 , 775
62 , 640
6 , 650
45 , 910
26 , 380
094
1,
, 665
569 115
$35, 262, 595
87, 640
567 115
$10, 014, 325
$31, 592, 860
$6, 844, 590
1 460 490
$33, 053, 350
2, 145, 180
64 065
$35, 262, 595
91, 775
22, 640
6, 650
41, 910
26, 380
1 460 490
$8, 305, 080
1, 645, 180
64 065
$10, 014, 325
additional $91, 535 thousand of bills will be
issued to foreign official institutions for new cash.
An
Department
~
of the Treasury
Bureau of the Public Debt
',
i
RELEASE
FOR IMMEDIATE
December
~~'ashinyon,
CONTACT:
17, 1990
.J
DC 20239
Office of Financing
202-376-4350
2 v
RESULTS OF TREASURY'S AUCTION
for $10, 032 million of
Tenders
~
:1Ri
OF 26-WEEK
26-week
BILLS
bills to
20, 1990 and mature on June 20, 1991 were
accepted today (CUSIP: 912794WP5).
on December
RANGE
be issued
OF ACCEPTED
COMPETITIVE
BIDS'
Discount
Rate
6. 75%
6. 77%
6. 77%
Low
High
Average
Tenders
Investment
Rate
7. 08%
7. 11%
7. 11%
Price
96. 588
96. 577
96. 577
at the high discount rate were allotted 81%.
rate is the equivalent coupon-issue yield.
The investment
TENDERS RECEIVED
Location
Boston
New
York
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Public
Federal Reserve
Foreign Official
Institutions
TOTALS
ACCEPTED
Received
34, 320
25, 090, 860
Philadelphia
Subtotal,
AND
14, 225
35, 590
40, 290
26, 780
1, 291, 485
34, 315
8, 735
39, 110
23, 740
811, 965
462 735
(in thousands)
Acce ted
34, 320
8, 928, 870
14, 225
35, 590
40, 290
26, 780
223, 735
14, 315
8, 735
39, 110
23, 740
179, 615
462 735
$27, 914, 150
$10, 032, 060
$23, 985, 315
$6, 603, 225
$25, 127, 815
$7, 745, 725
2, 450, 000
1, 950, 000
336 335
$27, 914, 150
336 335
$10, 032, 060
1 142 500
1 142 500
additional $464, 865 thousand of bills will be
issued to foreign official institutions for new cash.
An
NB-1068
apartment
of the Treasury
FOR RELEASE AT
December
~
Washington,
4:00 P. M.
CONTACT:
18, 1990
O.c. ~ Telephone See-2045
Office of Financing
202/376-4350
TREASURY'S WEEKLY BILL OFFERING
The Department of the Treasury, by this public notice, invites
tenders for two series of Treasury bills totaling approximately
$20, 000 million, to be issued December 27, 1990. This offering
will result in a paydown for the Treasury of about S10, 525 million,
as the maturing bills total S30, 523 million (including the 69-day
cash management bills issued October 19, 1990, in the amount of
Tenders will be received at Federal Reserve
$12, 544 million).
Banks and Branches and at the Bureau of the Public Debt, WashingDecember 21 1990, prior to 12:00
ton, D. C. 20239-1500, Frida
noon for noncompetitive
tenders and prior to 1:00 p. m. , Eastern
Standard time, for competitive tenders.
The two series offered
are as follows:
91-day bills (to maturity date) for approximately
S10, 000 million, representing an additional amount of bills dated
September 27, 1990, and to mature March 28, 1991 (CUSIP No. 912794
WB 6), currently
outstanding in the amount of S9, 224 million, the
additional and original bills to be freely interchangeable.
182-day
bills for
$10, 000 million, to be
to mature June 27, 1991 (CUSIP
approximately
dated December 27, 1990, and
912794 WQ 3).
The bills will be
and noncompetitive
No.
issued on a discount basis under competitive
bidding, and at maturity their par amount
Both series of bills will be
will be payable without interest.
issued entirely in book-entry form in a minimum amount of S10, 00Q
on the records either of the
and in any higher $5, 000 multiple,
Federal Reserve Banks and Branches, or of the Department of the
Treasury.
The bills will be issued for cash and in exchange for
Treasury bills maturing December 27, 1990. Tenders from Federal
Reserve Banks for their own account and as agents for foreign
monetary authorities will be accepted at the
and international
discount rates of accepted competitive
bank
weighted average
of the bills may be issued to Federal
amounts
Additional
tenders'
foreign and international monetary
for
Reserve Banks, as agents
the aggregate amount of tenders
that
authorities, to the extent
amount of maturing bills
the
aggregate
for such accounts exceeds
hold S2, 602 million
currently
Banks
Federal Reserve
held by them.
authorities, and
monetary
international
as agents for foreign and
amounts
represent
These
S3, 820 million for their own account.
issues of
the
three
or
the combined holdings of such accounts
on
the bookmaintained
Tenders for bills to be
maturing bills.
subshould
be
entry records of the Department of the Treasury
5176-2
mitted on Form PD 5176-1 (for 13-week series) or Form PD
.
(for 26-week series).
TREASURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 2
Each tender must state the par amount of bills bid for,
which must be a minimum of $10, 000. Tenders over $10, 000 must
be in multiples of $5, 000. Competitive tenders must also show
the yield desired, expressed on a bank discount rate basis with
A single
two decimals, e. g. , 7. 15%. Fractions may not be used.
bidder, as defined in Treasury s single bidder guidelines, shall
not submit noncompetitive tenders totaling more than $1, 000, 000.
Banking institutions and dealers who make primary
markets in Government securities and report daily to the Federal
Reserve Bank of New York their positions in and borrowings on
such securities may submit tenders for account of customers, if
the names of the customers and the amount for each customer are
furnished.
Others are only permitted to submit tenders for their
own account.
Each tender must state the amount of any net long
position in the bills being offered if such position is in excess
of $200 million. This information should reflect positions held
as of one-half hour prior to the closing time for receipt of
tenders on the day of the auction. Such positions would include
bills acquired through "when issued" trading, and futures and
forward transactions as well as holdings of outstanding bills
with the same maturity date as the new offering, e. g. , bills
with three months to maturity previously offered as six-month
bills. Dealers, who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York
their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for
each customer whose net long position in the bill being offered
exceeds $200 million.
A noncompetitive
bidder may not have entered into an
agreement, nor make an agreement to purchase or sell or otherwise dispose of any noncompetitive awards of this issue being
auctioned prior to the designated closing time for receipt of
tenders.
Payment for the full par amount of the bills applied for
must accompany all tenders submitted for bills to be maintained
on the book-entry records of the Department of the Treasury.
A cash adjustment
will be made on all accepted tenders for the
difference between the par payment submitted and the actual
issue price as determined
in the auction.
deposit need accompany tenders from incorporated banks
and trust companies and from responsible and recognized dealers
in investment securities for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches.
No
8/89
TREJMURY'S
13-, 26-,
AND
52-WEEK BILL OFFERINGS,
Page 3
Public announcement will be made by the Department of the
of the amount and yield range of accepted bids. Competitive bidders will be advised of the acceptance or rejection
The Secretary of the Treasury expressly
of their tenders.
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder will be accepted in full at the weighted average bank
discount rate (in two decimals) of accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids will be carried to three decimal places on the
basis of price per hundred, e. g. , 99.923, and the determinations
of the Secretary of the Treasury shall be final.
Treasury
Settlement for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
funds
on the issue date, in cash or other immediately-available
adjustments
date.
Cash
on
that
or in Treasury bills maturing
will be made for differences between the par value of the
maturing bills accepted in exchange and the issue price of the
new
bills.
If a bill is
and is held to maturity,
as
ordinary income on the
the amount of discount is reportable
Federal income tax return of the owner for the year in which
Accrual-basis taxpayers, banks, and other
the bill matures.
persons designated in section 1281 of the Internal Revenue Code
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
purchased
at issue,
of the Treasury Circulars, Public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtained
from any Federal Reserve Bank or Branch, or from the Bureau of
Department
the Public Debt.
8/8 9
iepartwent
of th ~ Ti'eisuFY
FOR RELEASE AT
December
~
4:00 P. M.
19, 1990
Woshlnlion, D.C.
~
Telephone S66-204&
Office of Financing
CONTACT:
202/376-4350
TREASURY TO AUCTION 2-YEAR AND 4-YEAR NOTES
TOTALING S21, 000 MILLION
The Treasury will auction $12, 500 million of 2-year notes
$8, 500 million of 4-year notes to refund $18, 032 million of
securities maturing December 31, 1990, and to raise about S2, 975
million new cash. The S18, 032 million of maturing securities are
those held by the public, including S1, 242 million currently held
by Federal Reserve Banks as agents for foreign and international
and
monetary
authorities.
issuin 4- ear
the sale announced toda
on
notes followin
As announced
December ll the Treasu
De artment will issue 5- ear notes
monthl
in Janua
1991.
be innin
The Treasu
De
artment
will discontinue
~
The $21, 000 million is being offered to the public, and any
amounts tendered by Federal Reserve Banks as agents for foreign
and international
monetary authorities will be added to that
amount.
Tenders for such accounts will be accepted at the
prices of accepted competitive tenders.
In addition to the public holdings, Federal Reserve Banks,
for their own accounts, hold S1, 368 million of the maturing
securities that may be refunded by issuing additional amounts
of the new securities at the average prices of accepted competitive tenders.
Details about each of the new securities are given in the
attached highlights of the offerings and in the official offeraverage
ing
circulars.
oOo
Attachment
NB-1 070
HIGHLIGHTS OF TREASURY OFFERINGS TO THE PUBLIC
OF 2-YEAR AND 4-YEAR NOTES TO BE ISSUED DECEMBER 31,
1990
December
Offered to the Public
Amount
~
..
Descri tion of Securit
Term and type of
Series and CUSIP
security
yield
or discount
Interest payment dates
availa ble
Minimum denomination
Investment
Premium
~
Accrued
yield,
e. g. ,
Accepted in full
age price up to
an annual
investor
ional
Deposit guarantee by
designated institutions
........
Receipt of tenders
a) Noncompetitive
b) Competitive
(final payment
institutions):
from
due
a) funds immediately
Settlement
to the Treasury
readily-collectible check
available
the average of accepted bids
To be determined at auction
To be determined after auction
June 30 and December 31
$5, 000
decimals,
interest payabl
1nvestors
4-year notes
Yield auction
Must be expressed as
tenders
Pa ment Terms:
Payment by non-institut
b)
~
tenders
Noncompetitive
by
~
of Sale:
of sale
Competitive
2-year notes
AH-1992
(CUSIP No. 912827 ZR 6)
December 31, 1992
To be determined based on
Interest Rate
Terms
Method
$8, 500 million
Series
designation
date
Maturity
$12, 500 million
with two
7. 10%
at the aver$1, 000, 000
Series Q-1994
(CUSIP No. 912827 ZS 4)
December 31, 1994
To be determined based on
the average of accepted bids
To be determined at auction
To be determined after auction
June 30 and December 31
$1, 000
Yield auction
Must be expressed as
an annual yield, with two
decimals, e. g. , 7. 10o
Accepted in full at the average price up to $1, 000, 000
None
None
Full payment to be
submitted with tender
Full payment
Acceptable
Acceptable
Wednesday,
prior to
prior to
Monday,
Thursday,
December 26, 1990
12:00 noon, EST
1:00 p. m. , EST
December 31, 1990
December 27, 1990
19, 1990
to be
with tender
submitted
Thursday,
December
27, 1990
prior to 12:00 noon,
prior to 1:00 p. m. ,
Monday,
Thursday,
EST
EST
December 3 1, 1990
December 27, 1990
of the Treasury
~ylrnent
FOR
IlIHEDIATE
RELEASE"
Nonthly
D.c. ~ Telephone
~ weahlnpeon,
~ „„fJ ~'
( I|
i
Deceaber 20
III-2M
1990
Release of U. S. Reserve Assets
today released U. S. reserve assets data
1990.
As indicated in this table, U. S. reserve assets amounted to
$83, 059 million at the end of November, up from $82, 852 million in
The Treasury
for the
month
of
Department
November
October.
U. S. Reserve Assets
(in millions of dollars)
Total
End
Special
Reserve
Reserve
Asset
Gold
Stoch 1/
Rights 2/3/
Foreign
Currencies
October
82, 852
10, 876
51, 850
November
83, 059
11,060
11,059
11,059
52, 070
of
Nonth
Drawing
4/
Position
in INF 2/
1990
9, 066
8, 871
1/ Valued at $42. 2222 per fine troy ounce.
for valuing the SDR
based on a weighted average of exchange rates for the currencies of
The U. S. SDR holdings and reserve
selected member countries.
July
on this basis beginning
valued
are
position in the INF also
1974.
3/ Includes allocations of SDRs by the INF plus transactions in SDRs.
2/ Beginning
4/ Valued
N8-107]
July 1974, the
INF adopted
a technique
at current market exchange rates.
OVERSIGHT BOME)
ReSOl. utIOn TruSt COrPOrahOn
I'F7 1
FOR IMMEDIATE
December
OB
90-73
F
STREET,
N. W.
WhSHIYGTQN,
Contact:
RELEASE
21, 1990
OVERSIGHT BOARD NAMES
GZPTEZVQ
D. C
202S2
Art Siddon
Felisa Neuringer
(202) 786-9672
COUNSEL
The Oversight Board for the Resolution Trust Corporation
(RTC) announced today the appointment
of Richard H. Farina as
general counsel to the Oversight Board. , effective Jan. 2, 1991
As
provides
general counsel, Mr. Farina will head the division that
legal advice, guidance and direction to the Oversight
full range of activities.
"Mr. Farina's extensive experience in corporate law and
knowledge of depository institutions
as well as his impressive
academic record will allow him to provide sound legal advice to
"
Board on a
the Oversight Board,
Oversight Board.
said Peter
H. Monroe,
president
of the
Prior to joining the Oversight Board, Mr. Farina practiced
corporate law as a partner in the Washington, D. C. , office of
Reed Smith Shaw & McClay.
Before working for Reed Smith, Mr.
s Burling in Washington,
law
with
Covington
Farina practiced
D. C. , and
D. C. , and with Dechert Price & Rhoads in Washington,
Philadelphia, Pa.
Mr. Farina received a bachelor's degree and a law degree
from the University
of Notre Dame. He was editor-in-chief of
Notre Dame's Law Review.
Mr. Farina also spent a year as a
fallow at the University of Pennsylvania Center for Study of
He is a member of the
Financial Institutions in Philadelphia.
bars of the District of Columbia, Pennsylvania and Michigan.
The Oversight Board formulates the policy, approves the
funding, and provides the general oversight of the RTC, the
agency responsible for resolving the nation's failed thrjfts.
rUniC' D
Department
of the Treasury
~
Bureau of the Public Debt
~
ii'ashington,
DC 20239
L
g~e r. rc v~-
V
FOR IMMEDIATE
December
RELEASE
CONTACT:
21, 1990
Office of Financing
202-376-4350
RESULTS OF TREASURY'S AUCTION
OF 13-WEEK
BILLS
for $10, 008 million of 13-week bills to be issued
27, 1990 and mature on March 28, 1991 were
accepted today (CUSIP: 912794WB6).
Tenders
on December
OF ACCEPTED
COMPETITIVE BIDS:
RANGE
Discount
Rate
6. 48%
6. 55%
6. 52%
Low
High
Average
Investment
Rate
6. 68%
6. 75%
6. 72%
Price
98. 362
98. 344
98. 352
$1, 000, 000 was accepted at lower yields.
Tenders at the high discount rate were allotted 42%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED
Location
Boston
New
Received
Philadelphia
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal,
Public
Federal Reserve
Foreign Official
Institutions
TOTALS
NB-1072
19, 289, 765
11, 185
11, 185
26, 565
49, 580
43, 205
35, 080
1, 166, 810
Cleveland
d
31, 045
8, 119,765
31, 045
York
(in thousands)
8, 685
39, 945
23, 120
892, 165
729 575
$22, 346, 725
26, 565
49, 580
43, 205
35, 080
576, 810
8, 685
39, 945
23, 120
313, 165
729 575
$10, 007, 725
1 556 135
$20, 315, 415
$6, 920, 280
1 556 135
$8, 476, 415
1, 770, 210
1, 270, 210
261 100
$22, 346, 725
261 100
$10, 007, 725
$18, 759, 280
rUe&1t'
Department
of the Treasuv
FOR IMMEDIATE
~
E T
Bureau of the Public Debt
c';;
RELEASE
21, 1990
December
Tenders
4'yshinyon,
CONTACT:
RESULTS OF TREASURY'S AUCTION
on December
~
DC '20239
Office of Financing
202-376-4350
OF 26-WEEK
BILLS
for $10, 021 million of 26-week bills to be issued
27, 1990 and mature on June 27, 1991 were
accepted today (CUSIP: 912794WQ3).
RANGE
OF ACCEPTED
COMPETITIVE
BIDS:
Discount
Rate
Investment
Rate
6. 52%
6. 61%
6. 57%
Price
96. 704
96. 658
96. 679
6. 84%
6. 93%
6. 89%
Average
Tenders at the high discount rate were allotted 4%.
The investment rate is the equivalent coupon-issue yield.
Low
High
TENDERS RECEIVED AND ACCEPTED
Received
26, 835
Location
Boston
New
17, 149, 885
19, 535
31, 165
30, 690
33, 170
1, 033, 650
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Subtotal,
Public
Federal Reserve
Foreign Official
Institutions
TOTALS
Ne-1073
26, 835
8, 235, 885
11, 205
9, 085
37, 240
13, 555
19, 535
31, 165
30, 690
33, 170
683, 650
11, 205
9, 085
37, 240
13, 555
502 615
$19 835 025
502 615
$10. 021, 025
$15, 642, 695
$6, 328, 695
936, 395
~
Competitive
Noncompetitive
(in thousands)
~
1 025 430
$16, 668, 125
386, 395
1 025 430
$7, 354, 125
2, 050, 000
1, 550, 000
1 116 900
$1 9 8 3 5 f 0 2 5
$10, 021, 025
g
1
116 900
~ Portment
of the Treasury
FOR RELEASE AT
December
Nashlneton,
~
9:00 A. g.
CONTACT:
RS, )%90
O.C. ~ Telephone SIN-mo4
Office of Financing
202/375-4350
)
TREASURY'S WEEKLY BILL OP'FERING
)
1.
.-
The Department of
tenders for two series
the Treasury, by this public notice, invites
of Treasury bills totaling approximately
820, 000 mi, llign, to be issued January 3, 1991. This offering
will provide 4bout $1, 525 million of' new cash for the Treasury, as the
maturing bilip are outstanding
in the amount of $18, 471 tnillion.
Tenders will be received at Federal Reserve Banks and Branches and at
the Bureau of the Public Debt, Washington, D. C. 20239-1500, Nonday,
December 31, 1990,
nd
8
o
o
V
S.
or
The two series offered are as follows:
91-day bills (to maturity date) for approximately S10, 000
million, representing an additional amount of bills dated October 4,
1990, and to mature April 4, 1991 (CUSIP No. 912794 WC 4), currently
outstanding in the amount of $9, 391 million, the additional and
original bills to be freely interchangeable.
183-day bills (to maturity date) for approximately $10, 000
nillion, representing an additional amount of bills dated July 5,
1990, and to mature July 5, 1991 (CUSZP Ho. 912794 WR 1), currently
outstanding in the amount of $10, 553 million, the additional and
Original bill to be freely interchangeable.
The
bills will
on a discount
and at maturity
be issued
basis under competitive
their par
amount will
noncompetitive bidding,
Both series of bills will be issued
be payable without interest.
entirely in book-entry form in a minimum amount of $10, 000 and in
on the records either of the Federal
any higher $5, 000 multiple,
Reserve Banks and Branches, or of the Department of the Treasury.
and
be issued for cash and in exchange for Treasury
bills maturing January 3, 1991' Tenders from Federal Reserve
Banks for their own account and as agents for foreign and international monetary authorities will be accepted at the weighted
Addiaverage bank discount rates of accepted competitive tenders.
tional amounts of the bills may be issued to Federal Reserve Banks,
monetary authori. ies, to
as agents for foreign and international
the extent that the aggregate amount of tenders for such accounts
Federa'.
exceeds the aggregate amount of maturing bills held by them.
for
foreign
Reserve Banks currently hold $802 million as agents
and $4, 650 million for their
monetary authorities,
and international
on the book-entry
maintained
Tenders for bills to be
own account.
on FG.--.
records of the Depa tment of the Treasury should be submitted
26-week ser c„) .
PD 5176-1 (for 13-week series) or Form PD 5176-2 (for
The
NB-
bills will
j
TECASURY.
8
13-, 14- '. AND'. 52
NXN BILL OFFEtINdS
~
Paae 2
Each - tendez, '-aust state -thO ~par&amount of 'bills 'bid ' for p'
which;must be a ~iaua. of c010g000P;fsTendors over -$10, 000 must
be in multiples ofi.05i000a CompetitiVe'tenders
aust-also show
the yield desired, iaxpressed-on. a bank-discount rate basis wi'&
two decimals, . e.g. 7i15%. Fraotions aay not be-used. o.k single
-
.
.
as defined;in
.
~
bidder,
Treasury~i-. single'hiddez'guidelines,
'shall
not subait. noocoapetitive tenders;~&tali' lore'than $1, 000, 000.
Banking. &astitutians
and
dealers'Wo make"primary
markets in Oovornaent-. securities .and ireport: daily 'to che Federal
Reserve Sank;of.' New.; York-their. -positions in and borrovings on''
such semritias may 'submit. tendeti~for: account 'of 'customers, : if
the nalaes;, of .the. customers:and &the amount'for"each customer 'axe
furnished.
Others .are 'onlyf permitted~:to'submit 'tenders"for their
ovn account. ' Each tender. must. state the amount of any net long
position in .the;bills being offered. . if 'such position is 'in excess
of $200 million. ~.This infonaation"should reflect positions hold
ae of one-half„hour prior- to, the~'closing' time for receipt"of
.
tenders -on the day, -of:.the ''auction~4~ Such positions' leuld':include
bills acquired;. through ~when' issued~ trading, ' and futures and "forward .transactions as well'as. -holdings- ef outstanding bills'
with, .the saic. maturity. date:as the. new offering, ~ .g. , bills '
with three Ionths' to Iaturity previously offered as s|x-month
bills', Dealere, ' who aake priv. ary aarkets in Covernment securities- anil'report [daily to. the itederal Reserve"Sank of New York
their- positions. in iand borrowingst on ~such 'securities, 'when submitting tenders -.foz' customers qi aust isubmit" a' sepatate tender for
each customer vhose net long positiont in the bill being offered
exceeds = $200- Billion. .
&
noncompetitive bidder may&.-dot have entered into an'
agreement, nor make an agreement'. tc-purchase or sell' or other-' "
wise dispose of any noncompetitive: awards of this issue being
auctioned prior to the designated closing time for receipt of
A
tenders.
- Payment .for, the'-Cull- paz' amount'-of the bi11s applied 'for
must accompany. all. tenders subaitted-for' bills"to be 'maintained
of the Treasury.
%e book entry .records. of. :the~ Department
.
A cash ad)ustment~ will~ be aade;tord. a11 . accepted tenders tf6e the
difference between the par paylent submitted and the'actual~4-«
issue price as 4eteriined
in the auction.
"-
'
deposit need accoipany tenders from incorporated banks ~
and trust companies and from responsible and tecogniied dealers .
in investaent securities Cor bills'to be maintained on ths'bookentry records of. Federal Reserve=Safes'and Branches.
No
TREASURY'S
13-, 26-,
AND
52-REEK BILL OFFERINGS,
Page 3
Public announcement will be made by the Department of the
Treasury oi the amount and yield range of accepted bids. Competitive bidders vill be advised of the acceptance or rejection
of their tenders. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in
whole or in part, and the Secretary's action shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $1, 000, 000 or less without stated yield from any one
bidder vill be accepted in full at the weighted average bank
discount rate (in two decimals) oi accepted competitive bids
for the respective issues. The calculation of purchase prices
for accepted bids vill be carried to three decimal places on the
basis of price per hundred, e. g. , 99.923, and the determinations
of the Secretary of the Treasury shall be final.
Settlement
for accepted tenders for bills to be maintained
on the book-entry records of Federal Reserve Banks and Branches
must be made or completed at the Federal Reserve Bank or Branch
on the issue date, in cash or other immediately-available
funds
or in Treasury bills maturing on that date. Cash adjustments
will be
maturing
new
for differences between the par value of the
bills accepted in exchange and the issue price of the
made
bills.
If a bill is purchased at issue, and is held to maturity,
the amount of discount is reportable as ordinary income on the
Federal income tax return of the owner for the year in which
Accrual-basis taxpayers, banks, and other
the bill matures.
persons designated in section 1281 of the Internal Revenue Code
must include in income the portion of the discount for the period
during the taxable year such holder held the bill. If the bill
is sold or otherwise disposed of before maturity, any gain in
excess of the basis is treated as ordinary income.
of the Treasury Circulars, Public Debt Series
Nos. 26-76, 27-76, and 2-86, as applicable, Treasury's single
bidder guidelines, and this notice prescribe the terms of these
Treasury bills and govern the conditions of their issue. Copies
of the circulars, guidelines, and tender forms may be obtainedof
from any Federal Reserve Bank or Branch, or from the Bureau
the Public Debt.
Department
8/89
E
PUELIC DEBT
Department
nl the
FOR IMMEDIATE
December
Treasuri
~
Bureau
&it
tht Public Debt
RELEASE
'
26, 1990
Tenders
were accepted
l~'ashint, ton. DC 'ti
-CBNTA~~
RESULTS OF TREASURY'S AUCTION
to be issued
~
'39
Gffice of Financing
202-3/6-'350
OF 2-YEAR NOTES
for $12, 515 million of 2-year notes, Series AH-1992,
31, 1990 and mature on December 31, 1992
on December
today
(CUSIP: 912827ZR6).
interest rate
the notes will be 7 1/4%. The range
of accepted bids and corresponding prices are as follows:
The
on
Price
99. 908
Yield
Low
High
Average
Tenders
at the high yield
TENDERS RECEIVED
Location
Boston
New
7. 30%
7. 33%
7. 32%
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
AND
99 854
99-872
were
ACCEPTED
Received
43, 065
35, 672, 925
29, 800
51, 795
96, 060
40, 810
1, 818, 720
74, 945
23, 175
87, 410
14, 840
663, 895
264 560
$38, 882, 000
allotted
20%.
(in thousands)
Acce ted
43, 065
11, 380, 875
29, 800
51, 795
77, 060
36, 210
365, 520
64, 545
23, 175
85, 580
14, 840
77, 495
264 560
$12, 514, 520
$12, 515 million of accepted tenders includes $1, 110
million of noncompetitive tenders and $11, 405 million of
competitive tenders from the public.
In addition, $750 million of tenders was awarded at the
average price to Federal Reserve Banks as agents for foreign and
$900 million
An additional
international monetary authorities.
of tenders was also accepted at the average price from Federal
Reserve Banks for their own account in exchange for aturing
The
r, ,
securities.
NB-1075
OVERSIGHT BO&K)
I 7 T7
FOR IMMEDIATE
December
OB
90-74
26,
F
Resolution Trek Corporahon
STREET, N. W. Whs HINGTON.
RELEASE
19 9 0
Contact~
D. C
202 $2
Brian Harrington
Felisa
Neuzingez
(202) 786 -9672
NATIONAL
ADVISORY BOARD TO HOLD OPEN MEETING
of the National Advisory Board will hold an open
meeting in Washington, D. C. , on Thursday, January 10, 1991, from
The members
1 to 4 p m.
The meeting, open to all members of the public and press,
will be held in the General Services Achninistzation auditoriu~ at
18th and F Streets, N. W. , Washington, D. C.
Financial
Institutions
Recovery, and Enforcement
Act of 1989 (FZRREA) remi. red that the Oversight Board establish
one national and six regional advisory boa ds to provide advice
to the Resolution Trust Corporation (RTC) and the Oversight Boa d
on the policies and programs for the disposition of real estate
of the nation's failed thrifts.
The
Reform,
Advisory Board meets in Washington, D. C. , to
advise the Oversight Board and the RTC on the status of the rea'
es ate sales efforts of the RTC in each region. The National
Advisory Board is comprised of the national chairman and the six
The National
regional
chairmen.
a key link between the RTC and
"
H.
Peter
Monroe, President of the
zeal estate markets,
said
led to the
Oversight Board. "For example, their recommendations
'ch
e".
for s
hard-toRTC's new $7 billion seller financing prog
"
added,
Monroe
sell assets as real estate,
"The Advisory
Boards provide
meeting, the regional chairmen w' ll report
on the issues discussed at the second series of Regional Adv'sory
Board meetings held around the country from Octobe" o to November
9, 1990 ' The National Advisory Board. will discuss key topics
that emerged from the regional meetings such as seller financing,
the Standard Asset Management and Disposition Agreement, the Real
Estate Owned information management system, RTC's foreclosure
process, affordable housing financing terms, and tax ince.-.tives
for distressed property. Also, RTC staff will give a compu er' zed
demonstration of the zeal estate inventory.
During upcoming
items for the next series of regional meetings
held in January and February also will be determined.
Agenda
to be
.
." DES'I' Xr, WS
nrpar tment
vl thn
FOR IMNEDIATE
December
Treasur)
~
4
~
Bun ail of the PubIic Debt
RELEASE
were accepted
The
202 376-4350
OF 4-YEAR NO:ES
for $8, 569 million of 4-year notes, Series Q-1994,
31, 1990 and mature on December 31, 1994
today
(CUSIP: 912827ZS4).
interest rate
on the notes
and corresponding
will be 7 5/8%. The range
prices are as follows:
Yield
Low
High
Average
at the
7. 66%
7. 674
7. 664
~ice
99.881
high yield were
L~
TENDERS RECEIVED AND ACCEPTED
Boston
New
Office cf Financing
on December
of accepted bids
Tenders
DC' -'(&'-39
v
RESULTS OF TREASURY'S AUCTION
Tenders
4'ashingtnn.
CONTACT:
27, 1990
to be issued
~
York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Received
21, 624
20, 289, 359
15, 665
28, 878
123, 617
27, 956
1, 266, 767
35, 889
11,220
34, 386
6, 441
569, 819
47 48
$22, 4794102
99. 847
99. 881
allotted 51%.
(in thousands)
21, 624
7, 853, 044
15, 665
28, 878
68, 037
25, 466
374, 797
24, 909
11, 217
34I386
6(439
57, 364
4 7~48
$8, 569, 307
$8, 569 million of accepted tenders inc'udes $643
million of noncompetitive tenders and $7, 926 mi'lion of
competitive tenders from the public.
In addition, $614 million of tenders was awarded at the
average price to Federal Reserve Banks as agen s for foreign and
$468 million
An additional
international monetary authorities.
Federal
from
price
average
the
at
of tenders was also accepted
The
Reserve Banks for their
securities.
NB-1076
own
account in exchange
for maturing
)Ipartmeni of the Treasury ~ Wcuchlneton, D.C.
F R IMMEDIATE RELEASE
December
CONTACT:
27, 1990
UNITED STATES AND
TAX IMPLEMENTATION
The Treasury
GUAM
~
Telephone $54-2041
Cheryl Crispen
(202) 566-5252
AMEND
AGREEMENT
today that the United States
the tax implementation agreement to exchange
tax information and provide mutual assistance in tax matters. The
original agreement, which was executed by the United States on
April 5, 1989, was to be effective on January 1, 1991. The
amendment
announced today will delay this effective date until a
future exchange of notes by the United States and Guam.
Department
and Guam have amended
announced
The tax implementation
agreement is similar to agreements
signed by the United States with the Virgin Islands in 1987 and
with American Samoa in 1988. The United States is continuing to
discuss
entering
a tax implementation
agreement
with
the
Commonwealth
of the Northern Mariana Islands.
Sections 1271 and 1277 of the Tax Reform Act of 1986 made
certain provisions effective for these possessions upon the
effective date of a tax implementation agreement. The amendment to
Guam's
of these 1986
will delay the application
agreement
provisions in Guam until a future date mutually agreed upon by the
United States and Guam. Prior to that date, the tax system in Guam
will remain linked to the United States Internal Revenue Code (the
"mirror system" of taxation).
The Guam Tax Code Commission has been formed by the government
of Guam to plan and implement a new tax system for Guam to replace
The Commission
requested
the
the current
system.
mirror
postponement
of the effective date of the tax implementation
agreement in order to provide for an orderly transition to the new
tax system. The amendment also adds the Commission as a signatory
to the tax implementation agreement.
Copies of the amendment may be obtained by contacting the
Treasury Department, Office of Public Affairs at (202) 566-2041.
oOo
NB-1077
Iportment of ihe TreaIIIry
FOR IMMEDIATE
i"cernber
New
~
Naihlniton,
RELEASE
CONTACT:
O.C. ~ Telephone 501-204
Cheryl
Crispen
(202)566-5252
31, 1990
Income Tax Convention
Republic
Enters into Force with the
of India
The Treasury Department today announced that the U. S. -India
Income Tax Convention and accompanying
Protocol ("the treaty")
entered into force on December 18, 1990. On that date, the
States notified the Republic of India that legal
required to bring the treaty into force were completed
on November 13. 1990, when President Bush signed the instrument
of ratification.
The United States Senate approved the treaty on
September 18, 1990. The Republic of India previously notified
the United States of its completion of legal procedures in the
form of a diplomatic note from the Ministry of External Affairs
to the U. S. Embassy in New Delhi on January 24, 1990.
In the United States, the treaty will take effect January 1,
1991 with respect to taxes withheld at source. With respect to
other taxes, the treaty will take effect for taxable years
beginning on or after January 1, 1991. In the Republic of India,
the treaty will take effect for income arising in any taxable
year beginning on or after April 1, 1991.
United
procedures
oOo
NB-1078
j
W UDLL'4
Department
of the Treasury
FOR IMMEDIATE
December
-
~ Bureau
RELEASE
l
31, 1990
af the Public Debt
„,
~
M'ashinyon,
CONTACT:
RESULTS OF TREASURY'S AUCTION
DC 20239
Office of Financing
202-376-4350
OF 13-WEEK
BILLS
Tenders for $10, 018 million of 13-week bills to be issued
on January 3, 1991 and mature on April 4, 1991 were
accepted today (CUSIP: 912794WC4).
RANGE
OF ACCEPTED
COMPETITIVE
BIDS:
Discount
Investment
6. 48%
6. 53%
6. 52%
6. 681
98. 362
High
6. 73%
98. 349
Average
6. 72%
98. 352
$2, 290, 000 was accepted at lower yields.
Tenders at the high discount rate were allotted 67%.
The investment rate is the equivalent coupon-issue yield.
Low
TENDERS RECEIVED AND ACCEPTED
Boston
New
35, 835
24, 899, 525
24, 045
51, 215
48, 530
York
Philadelphia
Cleveland
Richmond
39, 685
Atlanta
(in thousands)
35, 835
8(358, 545
24, 045
51, 215
48, 530
39, 685
106, 575
Chicago
St. Louis
Minneapolis
Kansas City
764, 825
58, 235
4, 490
44, 300
28, 445
838, 990
TOTALS
$27, 633, 565
24, 935
4, 490
44, 300
28, 445
455, 990
795 445
$10, 018, 035
$23(481(035
$6, 365, 505
Dallas
San Francisco
Treasury
Type
Competitive
Noncompetitive
Subtotal,
Public
Federal Reserve
Foreign Official
Institutions
TOTALS
795 445
1 653 270
$25, 134, 305
1 653 270
$8, 018, 775
2, 349, 835
1, 849, 835
149 425
$27, 633, 565
149 425
$10, 018, 035
additional $1, 075 thousand of bills will be
issued to foreign official institutions for new cash.
An
NB-]P79
r voaiu
Department
of the Treasury
FOR IMMEDIATE
December
UKSI' NEWS
Bureau of the Public Debt
~
RELEASE
p
31, 1990
Washington,
CONTACT:
u
RESULTS OF TREASURY'S AUCTION
DC 20239
Office of Financing
202-376-4350
OF 26-WEEK
BILLS
for $10, 043 million of 26-week bills to be issued
Tenders
3, 1991
on January
I
~
and mature on July 5, 1991 were
accepted today (CUSIP: 912794WR1).
RANGE
OF ACCEPTED
COMPETITIVE
BIDS:
Discount
6. 454
6. 50%
6. 484
Investment
~IQS-
96. 721
96. 696
Average
96. 706
Tenders at the high discount rate were allotted 6%.
The investment rate is the equivalent coupon-issue yield.
Low
High
TENDERS RECEIVED AND ACCEPTED
Boston
York
47, 575
220
252,
27,
Cleveland
44, 195
New
17, 870
Philadelphia
41, 340
29, 795
883, 380
36, 315
7, 265
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTALS
Type
Competitive
Noncompetitive
Subtotal,
Public
Federal Reserve
Foreign Official
Institutions
TOTALS
45, 445
16, 820
636, 940
597 515
$29, 656, 675
(in thousands)
47, 575
9, 029, 720
17, 870
44, 195
41, 340
23, 090
70, 880
16, 315
7, 265
43, 565
16, 820
86, 940
597 515
$10, 043, 090
$25, 585, 715
1 241 185
$26, 826, 900
$6, 472, 130
2, 300, 000
1, 800, 000
529 775
$29, 656, 675
529 775
$10, 043, 090
$7, 713, 315
additional $15, 025 thousand of bills will be
issued to foreign official institutions for new cash.
An
NB-1080
@FedFRASER