The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Treas.
HJ
10
.A13
P4
v.385
Department of the Treasury
PRESS RELEASES
The following numbers were not used:
41 and 65
Number 28 is not available.
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
January 02, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 14-DAY BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
14-Day Bill
January 02, 2001
January 16, 2001
912795KF7
High Rate:
6.44 %
Investment Rate 1/:
6.53 %
Price:
99.750
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 97%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Competitive
Noncompetitive
$
TOTAL
$
Accepted
62,790,000
o
62,790,000
$
30,013,000
o
$
30,013,000
Median rate
6.40 %: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
6.38 %:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
62,790,000 / 30,013,000
=
2.09
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
LS-110S
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
January 02, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
January 04, 2001
April 05, 2001
912795GA3
Term:
Issue Date:
Maturity Date:
CUSIP Number:
5.700%
High Rate:
Investment Rate 1/:
5.864%
Price:
98.559
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 92%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tendered
Tender Type
Competitive
Noncompetitive
$
20,212,990
1,316,588
$
21,529,578
PUBLIC SUBTOTAL
Foreign Official Refunded
SUBTOTAL
$
9,733,800
1,316,588
11,050,388 2/
1,455,000
1,455,000
22,984,578
12,505,388
7,233,800
7,233,800
o
o
Federal Reserve
Foreign Official Add-On
TOTAL
Accepted
30,218,378
$
19,739,188
Median rate
5.670%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
5.650%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
21,529,578 / 11,050,388
=
1.95
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,022,604,000
http://www.publicdebt.treas.gov
LS-ll06
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
January 02, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
January 04, 2001
July OS, 2001
912795HA2
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
5.360%
Investment Rate 1/:
5.586%
Price:
97.290
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 40%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tendered
Tender Type
Competitive
Noncompetitive
$
PUBLIC SUBTOTAL
16,376,375
1,699,325
$
-----------,-----
18,075,700
SUBTOTAL
7,087,475 2/
3,422,000
21,497,700
10,509,475
5,653,846
5,653,846
Federal Reserve
Foreign Official Add-On
o
$
5,388,150
1,699,325
3,422,000
Foreign Official Refunded
TOTAL
Accepted
27,151,546
o
$
16,163,321
Median rate
5.350%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
5.320%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
18,075,700 / 7,087,475
=
2.55
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,332,154,000
http://www.publicdebt.treas.gov
LS-ll07
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
1789
omcr OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. -
U.S. International Reserve Position
20220. (202) 622-2960
01/03/01
The Treasury Department today released U.S. reserve assets data for the week ending December 29,2000. As
indicated in this table, U.S. reserve assets totaled $66,930 million as of December 29, 2000, up from $66,927
million as of December 22, 2000.
(in US millions)
I. Official U.S. Reserve Assets
De~~f1lJ?er 2~,_~OOO
TOTAL
Q.~cefT1ber
66,927
29.
~900
I
66,930
I
.--------------------------------------------------------~I
~__E~ur~O~~--y~e-n~~---T-O-T-A-L~~r_--E-Lr-O-----y-~-rl-----. TOTA~~
1, Foreign Currency Reserves
a. Securities
~-'08
:'Llie
""'1
:6.::;:'.1
"
~,-,',"
__ '-'
'<')9:u,v ~
"),::,0;
14./35
9,320
5,502
14.323
b. Total deposits with:
b.i. Other central banks and BIS
9,155
~
SSO
o
bji. Banks headquartered in the U.S.
b .. i. ,JfNrrlc,~ can~s located abroad
<J
b.rii. Banks headquartered outside the U.S.
o
J
J
C
:J. ,II
,)f ,'ihlen 8Cink s located ,n the
2. IMF Reserve Position
C
3. Special Drawing Rights (SDRs)
4. Gold Stock ~
C
uS
14.U40
1--/,021
10553
:05391
i' 1)46
I: 'J4f:i!
5. Other Reserve Assets
11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
deposits reflect carrying values.
21 The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data proVided by the IMF and are valued In
dollar terms at the official SDRJdollar exchange rate for the reporting date The IMF data for December 22 are final The entries in the table
above for December 29 (shown in italics) reflect any necessary adjustments, including revaluation, by the US. Treasury to the prior week's
IMF data.
31 Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of November 30, 2000. The October 31, 2000 value
was $11,046 million.
LS-l108
l
)1
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
December 22. 2000
1. Foreign currency loans and securities
December 29.2000
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
o
2.b. Long positions
o
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
December 22. 2000
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn. unconditional credit lines
December 29. 2000
o
o
o
o
o
o
o
o
3.a. With other central banks
3.b. With 'banks and other financial institutions
headquartered in the U.S.
3.c. With banks and other financial institutions
headquartered outside the U.S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
D E
~,
A 1\
-~' ~'E
EN T
() 'F
T
~-~ ~~
T
~~~
E );.. S U 1< Y
...
~- ~
TREASURY
NEWS
OFFICE OF PUBLIC AFFAIRS -1580 PENNSYLVANIA AVENUE. N.W. -WASHINGTON. D.C.- 20220. (202) 622.2"0
EHBARGOBD tJNT:IL 2: 30 P. H.
CONTACT:
January 3, 2001.
Office of Financing
202/'91-3550
TltEASORY '1'0 AUCTION $6,000 MILLION OF
lO-YEAR INFLA'rION-INDIDD NOTES
The Treasury will
notes to raise cash.
auc~ion
$6,000 million of 10-year inflation-indexed
Amounts b~d by Pederal Reserve B~s for their own a~counts aDd as
agents for foreign and international monetary authorities will be added
to the offering.
The auction will be co~ducted in the siDgle-prioe auction for.mat.
All cOmpetitive and ncneompecttive awards wi~l be ac ~ha highest yield of
accepted competitive tenders.
The notes being offered today are
elig~le
for the STRIPS program.
This offering of Treasury secur! ~1es is governed by ~e texm.s and
conditions set forch ~ the uniform Offering Cireular for Che Sale and :Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CPR. Part 356, as
amended).
netails about'the security are given in tbe attached offeriDg highlights.
LS-1109
H:IGlIl.J:GllTS OP ~y OFRllIllG TO 'l'D PtmLIC
or
1.0-'l'BU DDLA'l'IOlr-DlDDlm JiOTBS TO lSI: zssmw JANIDllY 16, 200l.
January 3, 2001
Offeri~
AmQUne ••••••••••••••••••.•••••••. $6,000
~escripeio: of Offering:
~ and. type of security •••••••••••••••••
.~ ••••••••••••.••••••.••••••••••••••••••
~lliou
.
..
l.O-yeaz: Ulflat1cm-1udexe4 noeee
Seri•• A-20ll
CUSIP number •••••••••••••••••••••••••••••• '12827 6R 8
Aueeion date •••••••••••••••••••••••••••••• J~ 10, 2001
~ ••u. date •••••••••••••••••••••••••••••••• JaAuary 16, 2001
~.t64 data •••••••••••••••••••••••••••••••• January lS, 200l
lIat:"Urity c!ato ••••••••••••••••••••••••••••• JaD.'g,&:y 15, 201l
Xntereat rat•••••••••••••••••••••••••••••• ».te~ned baaed on the highest
accepted competitive bi~
Real yield ••••••.••••••••••••••••••••••••• ~.te:miDed at auction
XAter•• t paymlmt dat.. . ..•........•.••.... JUly 15 and January 15
lli.nimnn bi.d. a.cunt aDd .w.c.pla. • •...••.•. $1, 000
~juatad accrued iDte~. . t
payabla ~ investor •••••••••••••••••••• Deeer.miDAd at auction
Prem1~ or ~.COUDt ••••.••••.•...•.••••••• ~eter.miaed at auc~on
STRIPS
~fo:matioul
amoUDt r~rod ••••••••••••••••••• $1,000
=.umbezo ........................ 912820 QA 9
nue cS&ee (a) a=.d CO'SIP DUlllkter Ca)
for ad4iei~ 'l'IXHCe) •••••••••••••••••• JU1y 15, 2010 - - 942833 XV 7
January 15, 2011 - - '12833 XN 5
Xini~.
CO~
c:usn
~.8ion of Bids:
Jl'oncClllllpet.i t.i va Dida: Ac:c:epte4 iD. full up to ~ s, 00 Q6000 a e the lUghes t accepted yiel.c1.
Ccapeti tive bids:
(l) li'U.et. 1M ezpreaaecl aa a real yield with three decimals, e.9'- I 3.l.AJ\.
(2) Jiet lo:g position for each !:ticSdar 1IIU8t be reported when the sua of the total !:tiel
amount, at all pel4a, &D4 ehe %let lOllS poa1t1o: 18 $2 l:>il.liou or greater.
(3) Ret long poaieiOD maat be datarmihad as of one half-hcur prior to the cl.o8~g
time for receipt of ca.patitive tenders.
Maxim"m aecognize.d Bid
at a Si=.gle Yield .••• 35. of public offeriAg
~
Avard •••••••••• 35' of pUblic offeri:g
It.ceipt of
T~a;
If'onccmpetitive
t~1I
P%'ior to 13 s 00
~ooD.
e.atexu
ataA4&~ time OD
Competitive tend.n ••• Prior to 1100 p.m • •utam .tuch.Z'd time
p!j"l!ezu: Terms:
=
auctioD. day
aucuon clay
By charge to a funds account at a Pederal Reserve B&.U
OQ
:Laaue date, or
p~t of full par ..ellDt with teAc5er.
:rz.a.uzy~z.c:t cuatomers c&u ~a. ~e Pay nirect.
faaeure which authorise. • char9'8 to th.ir accauot of record at their financial iDati~
tion
o~
Indexing
i • .ue date.
~format;i.oD.:
OPI Base aefereDce Period
19a~-198.
Ref CP7 01/15/2001 •••••••••••• 17 •. 0.516
Raf CPZ Ol/16/~OOl •••••••••.•• 174.04839
ZUQex .atio 01/16/2001 •••••••• l.00002
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
Contact: Office of Financing
(202) 691-3550
January 4, 2001
TREASURY'S lO-YEAR INFLATION-L~DEXED NOTES
JA..1WARY REFERENCE CPI N~mERS AND DAILY INDEX RATIOS
Public Debt announced today the reference Consumer Price Index (CPI) numbers and the daily
index ratios for the month of January for the lO-year Treasury inflation-indexed notes of Series A-20 11.
This information is based on the non-seasonally adjusted. U.S. City Average All Items Consumer Price
Index for All Urban Consumers (CPI-U) published by the Bureau of Labor Statistics of the U.S.
Department of Labor.
In addition to the pUblication of the reference CPI numbers (RefCPI's) and index ratios, this
release provides the non-seasonally adjusted CPI-U for the prior three-month period.
This information is a....ailable through the Treasury's Office of Public Affairs automated fax system
by calling 202-622-2040 and requesting document number 11 10. The infonnation is also available on the
Internet at Public Debt's website (http://www.publicdebt.treas.gov).
The information for February is expected to be released on January 17,2001.
000
Attacrunent
LS-lll0
http://www.publicdebt.trus.gov
~----------------------------------------------------------------~'
~REASURY 10-YEAR INFLATION-INDEXED NOTES
!
IDESCRIPTION·
Series A-2011:
PUSIP NUMBER:
912S276~5
tUCTtON D~:E:
e
January 10, 2001:
pRIGINAL ISSUE DATE:
January 16.2001;
~TURITY DATE:
January 15,
January 15.2001;
ATED OAT=..
Ref CPt on DATED DATE:
201~)
174.0451j
January 2001
IrABLE FOR MONTH OF:
31
\NUMBER OF DAYS IN MONTH:
CPI-U (NSA) September 2000
I
173.71
CP\-U (NSA) October 2000
174.Oi
CPI-U (NSA) November 2000
174.1
!
Ref CPI and Index Ratios for January 2001:
Month
Calendar Day
RetCPI
Yea
~anuary
1
2001
174.00000
~anuary
2
2001
174.00323
~anuary
3
2001
174.00645
~anuary
4
2001
174.00968
~3nuary
5
6
2001
174.01290
2001
~anuary
2001
~anuary
7
8
174.01613
174.01935
2001
174.02258
iJanuary
9
2001
174.02581
~anuary
Index RatJo
January
10
2001
174.02903
~anuary
11
2001
174.03226
Wanuary
12
2001
17403548
Wanuary
13
2001
, 74.03871
Wanuar'J
14
~anuary
15
2001
2001
174.04516
1.00000
Wanuary
16
2001
17404839
1.00002
~anuary
17
2001 1
174.05161
1.00004
174.04194
Wanuary
18
2001
17405484
~3nuary
19
2001
17405806
1.00006
1.00007
Wanuary
20
2001
• 74.06129
1.00009
~74
06452
1.00011
Wanuary
21
2001
!January
22
2001 ,
17406774
1.00013
~anuary
23
1.00015
January
24
200"
2001
17407097
17407419
1.00017
~anuary
25
2001 ,
174.07742
1.00019
~anuary
26
2001
17408065
1.00020
IUanuary
27
2001
174.08357
1.00022
Wanuary
28
29
2001
174.08710
1.00024
2001
2001
2001
174.09032
174.09355
174.09677
1.00026
1.00028
~anuary
Wanuary
lJ.anuary
30
31
1
1.00030
lJ EPA R T :\'l E :\ T
0 F
T
,.
TREASURY
~-~~::
T REA S
tr R
Y
NEWS
OFFICE A}' PlSISLIC AFFAIRS -1500 PENNSYLVANlc\ AVENUE. N.W•• WASHINGTON. D.C.- ZO;:10. (102) 6l~·2."\)
EMBARGOED UNTIL 2:30 P.M.
January 4, 200~
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEX AND 26-WEEX BILLS
The Treasury will auction bit) series of. 'l'reasury bills tota1.ing
approximately $23,000 million to refUAd $18,&72 million of publicly held
securieies maturing January 11, 2001, and to raise about $4,328 million of new
cash.
In addition to the public holdings, Federal Reserve Banks.for their own
$~0,044 million of the maturing bills, which may ~ refunded at
the highest discount rate of accepted competit~ve tenders. Amcunts issued
to these accounts will be in acldition to the offering amount.
a.ecounes hold
The maturing bills held by the public include $4,905 million held
by Federal aeserve B.nka as agents for foreign and intexuational monetary
aur.horitias, which may he refunded within the of£oring aDIOUfte at the highGst
di.coYnt rate 0: accepted competitive t~de~a. Additional amoun~s may be
issued for 3ucb account. if the aggregaeeamount of new bids exceeds the
aggregat.e amount of maturing bills.
requested ~t we reinvest their maturing hold$9&5 million into the 13-week bill and $907 million into
Tr.as~Direct eustamer~
ings of
approx~tely
the 26-week bill.
'l'1U.. of~ering o~ TraaJIury securities is governecl by the texms and conditions set forth in the l1nifonl Offering Circular for the sale and Issue of
Marketable Book-Entry Treasury Bills, Noeas, and Bonds {31 CPR Part 356 1 as
amend.ed) •
Details aboue each of ehe new securities are given in ehe attached
offering highlights.
000
LS-llll
Forpress
r~a~~i, fp~tu:1us. pKblic sd.ctlule'll4t1 offICial biographies, CtlU ollr 24-hour fax lillt! 111 (202) 61J..20~O
HIGHLIGHTS OF TREASURY OFFERINGS OP BILLS
TO 8R ISSUBD JANUARY 11, 2001
January., 2001
Oftering Amount .••.•..•.••..•..•...•... $12,500 million
$10,500 .111ion
Description of Offering:
T~rm and type of security ...•.......•.. 91-day bill
CUSIP nwnber •.••..•.•.....
0
0
•••••••••••
Auct.ion date ••.••.••••.
Issue date •••.••••.••
Ma turi ty dat~ ••••.•••••.••..•••••••••.•
Original ia8ue date •••••....•••....••..
CUrrently outstanding ••••.••••••...••.•
Minimum bid amount and KUltip18s ...••••
0
0
~following
••
•••••••••••••••
0
•
0
••••••••••••
October 12,2000
182-day bill
912795 He 8
January 8, 2001
January 11, 2001
JUly 12, 2001
January 11, 2001
$16,045 million
$1,000
$1,000
912795 GB 1
January 8, 200l
January 11, 20.01
April 12, 3001
rules apply to all securities mentioned above:
Submission of Bids:
Noncornpet'ltive bids ••....... Acoepted in full up to $1,000,000 at the highest discount rate of
accepted competitive bids.
Competitive bids ....•...•... (1) Must be.expressed as a discount rate with three decimals in
increments of .005%, e.g., 7.100\, 7.105\.
(2) Net long position for each bidder must be reported when the sum
of the total bid amount, at all discount rates, and the net long
position is $1 billion or g~.ater.
(3) Net long position must be determined a8 of one half-hour prior
to the closing tiroe for reoeipt of competitive tenders.
Ma¥imum Recognized Bid
at a Single Rate ••••••••.••• 35\ of public offering
Maximum Award
35\ of public offering
'0
••••••••••••••••
Receipt of Tenders:
Noncompetitive tenders ...• ,. Prior to 12:00 noon eastern standard time on auotion day
Competitive tenders •.•...• ,. Prior to 1100 p~m. eastern standard time on auction day
Pa~ent Ter.ms:
By charge to a funds account at a Federal Reserve Bank on issue date or payment
of full par amount with tender. TreasuryOlrect customers can use the Pay Direct feature which
authorizes a charge to their account of record at their financial institution on iSBue date.
l
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
Contact: Peter Hollenbach
(202) 691-3502
FOR RELEASE AT 3 :00 PM
January 5,2001
PUBLIC DEBT ANNOUNCES ACTIVITY FOR
SECURITIES IN THE STRIPS PROGRAM FOR DECEMBER 2000
The Bureau of the Public Debt announced activity for the month of December 2000, of securities within the
Separate Trading of Registered Interest and Principal of Securi ti es program (STRIP S).
Dollar Amounts in Thousands
Principal Outstanding
(Eligible Securities)
$2,194,221,217
Held in UnstrippedForm
$2,010,688,617
$183,532,600
Held in Stripped Form
$15,868,907
Reconstituted in December
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 V of the
Monthly Statement of the Public Debt, entitled "Holdings of Treasury Securities in Stripped Form."
The Strips Table along with the new Monthly Statement of the Public Debt is available on Public Debt's
Internet site at: www.publicdebt.treas.gov.Awide range of information about the public debt and Treasury
securities is also available at the site.
000
L5-1113
www.publicdebt.treas.gov
TABLE V· ~LDINGS OF TREASURY SECURITIES IN STRIPPED FORM, DECEMBER 31, 2000
Loan Oescnptlon
Treasury Bonds.
CUSIP
912810oM7
008
oR6
OU9
oN5
OPO
OS4
on
0V7
OW5
OX3
DYI
OZ8
EA2
EBO
EC8
E06
EE4
EFI
EG9
EH7
EJ3
EKO
EL8
EM6
EN4
EP9
E07
ES3
ET1
EV6
EW4
EX2
EYO
Ell
FA1
FB9
FE3
FFO
FG8
FJ2
FM5
Inleresl Rate:
11·5/8
12
10·3/4
9·3/8
11·3/4
11·1/4
10·5/8
9·718
9·1/4
7·1/4
7·1/2
8-3/4
8-7/8
9-1/8
9
8-7/8
8-1/8
8·112
8·3/4
8-3/4
7·718
8-1/8
8-1/8
8
7-1/4
7·5/8
7-118
6-1/4
7·1/2
7·5/8
6-7/8
6
6-3/4
6-1/2
6-5/8
6-3/8
6-1/8
5·1/2
5·1/4
5-1/4
6-118
6-1/4
Corpus
STRIP
CUSIP
912803 AB9
ADS
AG8
AJ2
912800 AA7
912803 AAI
AC7
AE3
AFO
AH6
AK9
AL7
AM5
AN3
AP8
A06
AR4
AS2
ATO
AU7
AV5
AW3
AX1
AY9
Al6
BAO
BB8
BC6
BD4
BE2
BF9
BG7
BH5
BJI
BK8
Bl6
BM4
BP7
BV4
BW2
CG6
CH4
Principal Amount Outstanding In Thousands
Tolal
Outslandlnq
11/15/04
05/15/05
08115/05
02115/06
11/15/14
02115/15
08/15/15
11/15/15
02115/16
05115/16
11115/16
05115/17
08115/17
05115/18
11/15/18
02115/19
08115/19
02115/20
05115/20
08115/20
02115/21
05115/21
08115/21
11/15/21
08115/22
11115/22
02115/23
08115/23
11115/24
02115/25
08115/25
02115126
08/15/26
11115/26
02115/27
08/15/27
11/15/27
08/15/28
11115/28
02115/29
08/15/29
05/15/30
TOlal Treasury Bonds
Treasury Inflation-Indexed Noles:
Series: Inlerest Rale
CUSIP:
3-5/8
9128273A8
J
3-3/8
A
2M3
3-5/8
A
3T7
3-7/8
A
4Y5
4-1/4
A
5W8
912820 BZ9
BV8
CL9
DN4
EK9
07/15/02
01115/07
01115/08
01115/09
01115/10
T alai Inflation-Indexed Noles ..
Treasury Inflation· Indexed Bonds:
Interest Rate:
CUSIP'
912803 BN2
3-5/8
912810 F05
CF8
3-7/8
FH6
Total Inflation-Indexed Bonds ..
I
Matunty Date
04/15/28
04115/29
Portion Held In
Unslnpped Form
Portion Held In
Slnpped Form
Reconstituted
This Monlh
8,301,806
4,260,758
9,269,713
4,755,916
6,005,584
11,350,799
5,215,916
5,925,859
6,802,754
18,823,551
18,824,448
16,856,669
12,929,358
7,367,439
7,689,470
17,061,298
19,595,932
9,918,268
8,373,783
18,872,306
10,414,573
10,718,788
10,683,482
31,731,194
10,288,790
8,844,626
17,480,261
22,669,044
10,526,662
11,476,170
12,007,007
12,837,916
10,823,818
11,483,177
10,286,071
10,415,756
22,518,539
11,776,201
10,947,052
11,350,341
11,178,580
17,043,162
4.175,406
1803,808
5,739,313
4,676,492
2,041,584
6,297039
3,667,436
3,178,659
6,063,554
18,311,551
17,537,408
11634,749
10,572,558
3,821,839
3,177,470
11,680,498
18,350,812
8,184,668
3,415,223
9,063,026
9,731,373
6,268,548
9,411,162
13,008,069
9,551,190
3,987,026
9,985,861
18,154,036
3,988,422
3,282,570
7,368,287
11,149,416
7,667,818
6,946,777
6,721,271
9,118,156
16,609,739
11,603,401
10,559,052
11,113,541
11,125,780
17,032,762
4,126,400
2,456,950
3,530,400
79,424
3,964,000
5,053,760
1,548,480
2,747,200
739,200
512,000
1,287,040
5,221,920
2,356,800
3,545,600
4,512,000
5,380,800
1,245,120
1,733,600
4,958,560
9,809,280
683,200
4,450,240
1,272,320
18,723,125
737,600
4,857,600
7,494,400
4.515,008
6,538,240
8,193,600
4,638,720
1,688,500
3,156,000
4536,400
3,564,800
1,297,600
5,908,800
172,800
388,000
236,800
52,800
10,400
73,600
22.000
507,200
0
51,200
766,240
280,000
187,200
492,000
538,400
13,120
1,420,160
478,400
790,400
518,400
1,168,000
79,040
398,000
612,640
860,320
196,800
106,880
609,600
1,639,225
97,600
60,800
385,600
285,600
299,520
345,600
105,600
210,600
108,000
141,600
96,000
99,200
420,800
0
32,000
8,800
0
0
515,702,837
367,777 ,350
147.925,487
14,506,145
18,270,207
17,305,089
18,105,535
16,871,171
11,707,574
18,270,207
17,305,089
17,997,838
16,871,171
11,645,525
0
0
107,697
0
62,049
0
0
0
0
0
82,259,576
82,089,830
169,746
0
18,081,552
20,873,480
18,027,765
20,820,561
53,787
52,919
0
0
38,955,033
38,848,327
106,706
0
TABLE V· HOLO~,GS OF TREASURY SECURITIES IN STRIPPED FORM, DECEMBER 31, 2000·. Continued
...
PrinCipal Amount Ou(standlng In Thousands
Corpus
STRIP
CUSIP
Loan Descnptlon
Treasury Notes·
Serres: Interest Rate
CUS/P'
912827 W65
5·114
E
4Z2
4·1/2
U
A
7·3/4
ZX3
S
5·3/8
3WO
F
5-5/8
X23
V
SC2
5
X49
G
6-318
4-1/8
500
W
H
6-1/4
X64
5E8
X
5
B
A85
8
T
5-5/8
4E9
6-1/2
J
Y22
Y
5-114
5Hl
Y48
6-5/8
K
5-3/4
5J7
Z
6-518
Y71
L
5-112
5L2 AS
7-7/8
892
C
6-112
M
Z39
5-112
5P3 AC
Z54
1'-1
SQl
AD
P
AE
0
Q
R
C
R
Z88
5R9
025
2C5
2E1
2G6
5X6
2L5
0
6A5
S
2P6
E
T
6B3
F
2S0
6Cl
U
F49
A
2Wl
G
V
6E7
2Y7
H
6F4
W
K
3C4
6HO
X
G55
B
3G5
l
Y
6K3
3J9
M
6L1
Z
N
3L4
P
303
6P2 AC
Q
3S9
3V2 ' C
A
J78
3Z3
0
485
E
401
F
4H2
G
4K5
H
L83
B
4N9
J
4U3
K
N81
A
5A6
E
P89
B
F
5F5
088
C
5MO
G
R87
0
5S7
H
A
Sa6
T85
B
609
E
U83
C
0
V82
F
6N7
wel
A
B
X80
C
Y55
Z62
0
B
2JO
C
2U5
0
3EO
8
3X8
4F6
C
4Vl
0
B
5G3
C
5N8
8
5Z1
C
6J6
Total Treasury ;'-lot&5
6-3/8
5-518
6-1/4
5-7/8
7-1/2
5-7/8
6-1/8
6-1/4
6-3/8
6-1/4
6-1/2
6-5/8
6-112
6-518
6-3/8
7-1/2
6-112
6-5/8
6-1/4
6-3/8
6
6-1/4
6-3/8
6-1/4
6-1/8
5-7/8
6
5-3/4
5-314
5-5/8
5-5/8
5-1/2
6-1/4
5-1/2
5-1/2
5-3/4
5-1/2
5-3/8
5-314
5-1/4
4-1/4
5-718
4-3/4
7-114
5-1/4
7-1/4
6
7-7/8
5-718
7-1/2
6-112
6-3/4
6-1/2
5-7/8
5-3/4
5-5/8
6-7/8
7
6-112
6-1/4
6-5/8
6-1/8
5-112
5-5/8
4-3/4
5-1/2
6
6-1/2
5-3/4
912820 EZ6
OP9
AZO
CPO
FAD
OR5
FB8
OS3
FC6
OTl
BM
CX3
FD4
OW4
FE2
0X2
FF9
OYO
8B2
FG7
EB9
FH5
EC7
FJl
ED5
BCD
EG8
EJ2
FK8
EL7
FL6
EN3
FM4
EP8
FN2
E06
B08
FP7
ES2
FQ5
ETO
FR3
EU7
BE6
FSl
FU6
eC9
FV4
CE5
CH8
FY8
CKl
CN5
BF3
CS4
CU9
eW5
OA2
OC8
BGl
OE4
OJ3
BH9
007
BJ5
OU8
BK2
OZ7
BlO
EE3
BM8
BN6
ER4
BP1
B09
FXO
BR7
BS5
aT3
BUD
BW6
BX4
C",-3
CQ8
CYl
OKO
OV6
EA1
EM5
FT9
Malurlly Dale
Tolal
Portion Held In
PortIon Held In
Outstanolng
Unslnpped Form
StriPped Form
06130101
07131/01
07131101
08115/01
08/31101
08/31/01
09130101
09130/01
10131/01
10/31101
11115/01
11/30101
12131/01
01131/02
01131/02
02128/02
02128102
03131/02
03131/02
04130102
04130102
05115102
05131102
05131/02
06130102
06130102
07/31/02
07131/02
08115/02
08131/02
08131/02
09130102
09130102
10131/02
11130102
11130102
12131/02
01131/03
02115103
02128/03
03131/03
04130/03
05131/03
06130/03
08115103
08115103
11/15103
02115104
02115104
05/15104
05115104
08115104
08115/04
11115/04
11115104
02115/05
05/15105
05115/05
08115/05
11/15105
11115105
02115/06
05115106
07115106
10115/06
02115/07
05115107
08115/07
02115/08
05115/08
11115/08
05115/09
08/15109
02115/10
08115110
1.S57 '303.772
,
Gf8no Tnt,::.]
12,816,189
19,775,678
6,013,602
15,367,153
12,819,771
19,586,630
14,180,740
21,579,752
13,780,470
21,031,123
7,006,658
12,873,752
13,721,702
19,785,985
14,282,240
18,997,309
14,136,833
20,083,318
7,694,385
14,000,224
20,118,595
14,518,514
18,297,028
14,639,843
19,194,402
19,359,702
33,504,627
31,087,921
13,453,346
19,381,251
13,799,902
16,538,575
14,301,310
17,235,543
14,474,673
17,390,900
7,815,037
13,503,890
14,871,823
13,058,694
14,320,609
12,231,057
15,057,900
21,113,415
12,731,742
15,072,214
12,768,414
15,144,024
26,534,682
11,838,980
15,013,633
11,862,033
13,100,640
22,732,067
13,626,354
14,172,092
12,573,248
13,132,243
13,125,179
26,915,828
19,786,663
18,304,185
12,609,477
17,797,628
14,075,572
18,925,383
12,008,867
18,089,806
14,368,960
32.658,145
13,499,314
14,739,104
28.562,370
15,002,580
14,835,520
15,812,250
15,513,267
15,090,675
22,740,446
22,459,675
13,015,006
13,822,186
25.571,203
13,576,212
27,190,961
25,038,325
14,790,790
27,149,794
23 355,709
22437 594
12,816,189
19,777,278
11,312,802
15,367,153
12,819,771
19,586,630
14,180,740
21,605,352
13,780,470
21,033,523
12,398,083
12,873,752
13,721.702
19,885,985
14,282,240
19,001,309
14,136,833
20,541,318
12,339,185
14,000,224
20,118,595
14,518,514
18,797,828
14,639,843
19,196,002
24,226,102
33,504,627
31,166,321
13,453,346
19,381,251
13,799,902
16,563,375
14,301,310
17,237,943
14,474,673
17,390,900
11,714,397
13,503,890
14,871,823
13,058,694
14,320,609
12,231,057
15,057,900
23,859,015
12,731,742
15,072,214
12,806,814
15,144,024
26,593,882
12,120,580
15,058,753
12,052,433
13,100,640
23,562,691
13,670,354
14,172,892
12,573,248
13,132,243
13,126,779
28,011,028
19,852,263
18,625,785
12,955,077
17,823,228
14,440,372
18,925,383
13,346,467
18,089,806
14,373,760
32,658,145
13,834,754
14,739,504
28,562,370
15,002,580
15,209,920
15,812,250
15,513,587
16,015,475
22,740,446
22,459,675
13,103,678
13,958,186
25,636,803
13,583,412
27,190,961
25.083,125
14,794.790
27,399,894
23,355,709
22,437,594
01/31/01
01131101
02115/01
02115/01
02128/01
02128/01
03131/01
03/31/01
04130101
04/30/01
05115/01
05115/01
05131/01
05131/01
06130101
,,-
'~,..
~
-
I
1
I
I
"
S21:3H111 :
f'J-~
,
I
0
1,600
5,299,200
0
0
0
0
25,600
0
2,400
5,391,425
0
0
100,000
0
4,000
0
458,000
4,644,800
0
0
0
500,800
0
1,600
4,866,400
0
78,400
0
0
0
24,800
0
2,400
0
0
3,899,360
0
0
0
0
0
0
2,745,600
0
0
0
525,600
0
0
0
0
0
0
0
73,050
0
0
0
0
0
0
0
52,800
0
0
0
0
0
0
42,160
0
0
0
0
0
800
0
0
0
0
72,000
0
0
0
0
0
0
371,200
0
0
0
0
0
0
14,720
0
0
38,400
0
59,200
281,600
45,120
190,400
0
°
22,912
0
0
0
0
0
48,000
0
25,600
17,600
0
32,800
0
4,000
0
3,200
0
6,720
6,000
0
0
8,000
0
0
32,000
0
0
0
1,600
0
2,000
0
0
0
0
830,624
44,000
800
0
0
1,600
1,095,200
65,600
321,600
345,600
25,600
364,800
0
1,337,600
0
4,800
0
335,440
400
0
0
374,400
0
320
924,800
0
0
88,672
136,000
65,600
7,200
0
44,800
4,000
250, :00
Q
a
0
0
35,330,661
...
)
1 3E2. ''''2
;L
.~....,:,
Reconstituted
This Month
:'
• C:;:.
r,
---~
~
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
January 08, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
182-Day Bill
January 11, 2001
July 12, 2001
912795HC8
4.825%
Investment Rate 1/:
5.014%
Price:
97.561
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 41%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tendered
Tender Type
Competitive
Noncompetitive
$
16,757,830
1,287,181
$
Foreign Official Refunded
SUBTOTAL
Federal Reserve
Foreign Official Add-On
$
5,863,030
1,287,181
7,150,211 2/
18,045,011
PUBLIC SUBTOTAL
TOTAL
Accepted
3,350,000
3,350,000
21,395,011
10,500,211
4,915,991
4,915,991
o
o
26,311,002
$
15,416,202
Median rate
4.800%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.780%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
18,045,011 / 7,150,211 = 2.52
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $987,703,000
http://www.publicdebt.treas.gov
L8-1114
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
January 08, 2001
Office of Financing
202 -691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
January 11, 2001
April 12, 2001
912795GB1
Term:
Issue Date:
Maturity Date:
CUSIP Number:
5.050%
High Rate:
Investment Rate 1/:
Price:
5.188%
98.723
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 51%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
$
21,097,772
1,430,335
1,225,000
1,225,000
23,753,107
12,511,277
5,127,907
5,127,907
Foreign Official Refunded
SUBTOTAL
9,855,942
1,430,335
11,286,277 2/
22,528,107
PUBLIC SUBTOTAL
Federal Reserve
Foreign Official Add-On
o
o
$
TOTAL
$
28,881,014
$
17,639,184
Median rate
5.020%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
5.000%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
22,528,107 / 11,286,277 = 2.00
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,082,312,000
http://www.publicdebt.treas.gov
L5-1115
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
omcr OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. -
U.S. International Reserve Position
20%%0. (%0%) 6%%-%960
01/09/01
The Treasury Depanment today released u.s. reserve assets data for the week ending January 5, 200 1. As
indicated in this table, U.s. reserve assets totaled $67,900 million as of January 5,2001, up from $67,733 million as
of December 29,2000.
(in US millions)
III
December 29,2000
67,733
Official U.S. Reserve Assets
TOTAL
l
1. Foreign Currency Reserves
a. Securities
Euro
5,510
Yen
10,992
January 5, 2001
67,900
TOTAL
Euro
16,502
5,617
Yen
TOTAL
10,818
0
Of whii::n. Issuer headquartered in the US:
16,435
0
b, Total deposits with:
9,320
b.i. Other central banks and SIS
b.iL Banks headquartered in the U.S..
5,503
14,823
9,475
5,417
14,891
0
0
b,iL Of which, banks located abroad
0
0
b.iii. Sanks headquartered outside the U.S.
0
0
0
0
14,824
14,921
10,539
10,608
11,046
11,046
0
0
I
b,iil. Of which, banks located in the U,S,
2. IMF Reserve Position,
2
3. Special Drawing Rights (SDRs)
4. Gold Stock
3
5. Other Reserve Assets
2
Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates, Foreign currency holdings ilsted as secunties reflect marked·te-market values, and
deposits reflect carrying values,
11
21 The items. "2. IMF Reserve POSition" and "3, SpeCIal DraWing Rights (SDRs): are based on data provided by the IMF and are valued in
dollar terms at the official SDRIdoliar exchange rate for the reporting date, The IMF data for December 29 are final. The entries in the table
above for January 5 (shown In italics) reflect any necessary adjustments, Indudlng revaluatJon, by the U,S, Treasury to the pnor week's IMF
data.
31 Gold stock is valued monthly at $42,2221 per fine troy ounce, Values shown are as of November 30, 2000, The October 31, 2000 value
was $11,046 million,
LS-1116
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
January 5. 2001
December 29. 2000
1. Foreign currency loans and securities
o
o
o
o
o
o
o
o
2. Aggregate short and long pOSitions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar.
2.a. Short positions
2.b. Long positions
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
January 5. 2001
December 29. 2000
1. Contingent liabilities in foreign currency
o
o
o
o
o
o
o
o
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
~. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.c. lMth banks and other financial institutions
headquartered outside the U. S.
~. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4. a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4. b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
D EPA R T MEN T. 0 F
THE
-, -":~''', :.,::
T REA SUR Y
-
,
,
"
~
, • c
"
-.
;;
;!
NEWS
OFFICE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
January 9,2001
Contact: Steve Posner
(202) 622-2960
TREASURY TESTS NEW INTERNET TAX PAYMENT FEATURE FOR BUSINESSES
The Treasury Department and the Internal Revenue Service announced today that they
are conducting a pilot program to test a new Internet-based application for businesses to pay
federal taxes on-line. The new Internet version of Treasury's Electronic Federal Tax Payment
System (EFTPS) will allow businesses to enroll in the system, securely make federal tax
payments, and receive electronic payment history -- all through the Internet.
"EFTPS-OnLine is a more convenient and cost-efficient way for businesses to pay
Federal taxes," said Treasury Secretary Lawrence H. Summers. "This program represents
another important step in Treasury and IRS efforts to improve service to American taxpayers."
"With the introduction of Internet payment capabilities, we look forward to increased
participation in the use of electronic tax payments," said IRS Commissioner Charles Rossotti.
"Initial reaction to the concept of using the Internet has been very positive, with business owners
reporting that moving EFTPS to the Internet would help them consolidate their tax business with
all other business applications."
EFTPS-OnLine will make it possible for businesses to schedule future payments through
the Internet and cancel payments if necessary. The Internet site will provide on-line help and
how-to pages with step-by-step instructions. EFTPS-OnLine will use the strongest available
security features and encryption technology to ensure taxpayer privacy and protection. After
evaluating the results ofthe pilot program, Treasury and the IRS plan to offer the feature to all
businesses in the U.S. and abroad, as well as individuals who are required to make estimated
quarterly payments.
"Allowing businesses to pay their taxes online is another example of how Treasury has
adopted new technologies to make the government work better," said Treasury Under Secretary
for Domestic Finance Gary Gensler.
EFTPS-OnLine builds on the existing EFTPS program which already serves about 3
million businesses 24 hours a day, seven days a week. Instead of the traditional method of using
paper coupons and checks, taxpayers can pay by phone, by personal computer using software, or
through their financial institution. Since the inception of EFTPS in 1996, more than 180 million
transactions have been processed, totaling $5 trillion.
-30L8-1111
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Pnntrnq Offrce. 1998· 619·559
January 9, 2001
Statement of the Parties
Following the Meetings on California's Electricity Situation
The Governor of California and the bipartisan leadership of the State legislature met with
major generators (including qualifying facilities), marketers, utilities, regulators, and
Federal officials, to discuss the electricity situation in California.
Recognizing the importance of the issue, as laid out in the Governor's State of the State
speech last evening, the participants agreed on the need for cooperation to maintain
stability and avoid bankruptcy of California utilities, and assure the long-term regularity
of market conditions.
Crucial elements of a solution include:
•
The development of approaches to promote long-term purchases of electricity,
possible by the State, from generators at an attractive fixed rate.
•
The willingness of generators, qualifying facilities, and marketers to provide on a
short-term basis forbearance of amounts owed by Pacific Gas and Electric and
Southern California Edison in the context of the framework of a comprehensive longterm solution.
•
The need to find satisfactory approaches with respect to the obligation accumulation
of the utilities for the purchase of power, consistent with contractual obligations, and
which are in the public interest.
•
Cooperation to better match supply and demand in the short and long term.
•
Review of the existing qualifying facilities payment structures.
The parties acknowledge that the problem must be addressed while taking into account
the regional nature of the market.
To advance the process further, working groups will be convened Wednesday to address
addition technical details. The principals will reconvene this weekend.
LS-1118
D EPA R T l\tI E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 1:30 PM EST
January 10,2001
Contact: Steven Posner
(202) 622-2960
TREASURY TO PROPOSE REVISED STANDARDS OF
PRACTICE FOR TAX PRACTITIONERS
The Treasury Department on Thursday will issue proposed regulations that would
modernize the standards of practice for attorneys, accountants, and others who practice before
the Internal Revenue Service. These standards, known as Circular 230, would be revised to
include stricter requirements for rendering tax shelter opinions.
"Abusive tax shelters are the most serious compliance problem in the U.S. tax system,"
Treasury Secretary Lawrence H. Summers said. "These proposed measures would deter the
purveyance of these shelters, protect the integrity of our tax system, and ultimately reduce the tax
burdens of honest taxpayers."
The proposed regulations would modify existing standards of practice. In particular, the
proposed regulations would revise standards for opinions rendered by tax practitioners regarding
tax shelter transactions. These opinions give prospective investors an assurance that the
purported tax benefit of a shelter is likely to be sustained if challenged by the IRS and may be
offered in an effort to provide a potential investor comfort that penalties will not be imposed if
the transaction is successfully challenged.
The new rules would strengthen the standards regarding factual due diligence and legal
analysis. In particular, they would help ensure that practitioners analyze and address carefully
whether a particular transaction has a legitimate business reason and is not being done solely for
the tax benefits, and that they consider and analyze all potentially relevant judicial doctrines and
anti-abuse rules. In addition, the proposed regulations would:
•
•
•
prohibit certain contingent fee arrangements where the practitioner's fee is based on the tax
benefit being sustained;
require that practitioners in firms who have responsibility for a firm's tax practice take
reasonable steps to put in place adequate procedures to ensure compliance with the Circular
230 standards; and,
authorize the IRS to issue a public reprimand, or censure, in cases warranting a sanction less
severe than suspension or disbarment.
18-1119
For press releases, speeches, public schedules and official biographies, call OU1" 24-hour fax line at (202) 622-2040
·u.s. Government Pfll1tlng Office.
1998 - 619-559
Secretary Summers announced last February that the Circular 230 opinion standards
would be revised to complement Treasury Department and IRS efforts to combat the
proliferation of abusive tax shelters. The proposed regulations were completed following a
period of public comment and input from the tax practitioner community, including the
American Bar Association, the New York State Bar Association, and the American Institute of
Certified Public Accountants A public hearing on the proposed regulations is scheduled for
May 2, 200 I. The regulations will take effect only upon publication in final form in the Federal
Register
The Treasury Department has also issued regulations requiring the reporting and
registration of tax shelters, shut down many tax shelter transactions that have come to Treasury's
attention, and proposed legislation to further halt the marketing and promotion of shelters. In
addition, the IRS has created an Office of Tax Shelter Analysis to coordinate its anti-shelter
activities and stepped up its efforts to curb abusive trusts based in tax havens.
-30-
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
January 10, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 10-YEAR INFLATION-INDEXED NOTES
Interest Rate:
Series:
CUSIP No:
STRIPS Minimum:
3 1/2%
A-2011
9128276R8
$1,000
Issue Date:
January 16, 2001
Dated Date:
January 15, 2001
Maturity Date:
January 15, 2011
TIIN Conversion Factor per $1,000
10.054861623 1/
High Yield:
3.522%
Adjusted Price:
99.818
All noncompetitive and successful competitive bidders were awarded
securities at the high yield. Tenders at the high yield were
allotted 17%. All tenders at lower yields were accepted in full.
Adjusted accrued interest of $ 0.09669 per $1,000 must be paid for
the period from January 15, 2001 to January 16, 2001.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
$
10,031,577
78,604
-$
TOTAL
$
10,110,181
$
5,921,826
78,604
6,000,430 2/
Both the unadjusted price of $ 99.816 and the unadjusted accrued interest
of $ 0.09669 were adjusted by an index ratio of
1.00002, for the period
from January 15, 2001, through January 16, 2001.
Median yield
3.470%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low yield
3.370%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
= 10,110,181 / 6,000,430 = 1.68
1/ This factor is used to calculate the Adjusted Values for any TIIN face
amount and will be maintained to 2-decimals on Book-entry systems.
2/ Awards to TREASURY DIRECT = $17,061,000
hUp://www.publicdebt.treas.gov
LS-1120
D E P '. R T :'.i E '\ r
0 i-;'
T
n:
E
T R E .\ S t; R Y
.~-
TREASURY
NEWS
OFFICE OF Pl1BLIC AFFAIRS -1580 PENNSYLVANIA AVENUE, N.W•• WASRlN~TON, D.C.. 10%18. (lU) 622·2'60
EMBARGOED ~~L 2:30 P.M.
January 11, 20ch
CONTACT:
ft.!iA.Sm\r O~ 13-WEElt
AN])
Offl.C8 of Financing
202/691-3550'
26-'BE!t BII.LS
The !:easury will auction two series of Treasury bills totaling
approximatel.y $24,000 aiUiOll to refund. $19,001 milli'on of publicly held
aGeuri:t.i.aa a&1:Uri.fttJ JaftUar.i 18, 2001, aDd. ~ raise eout $4, ;;g 1d.1.1.iOft of' DeW
cash.
In a.dcti.tion to the public' holdings I Federal Reserve Banks for thAi.r own
accounta bold. $8,861 million of the aaturinq bills, 'which may be refunded. a.t
the highest d.:i.scount rate of aecaptad campatitive tenders. Amounts issued
to these AOcounts 1ri.ll be i.D. addiuon to the offer.ing amount.
The Jlaturi.ng bi.ll.s held by' the pubiic include' $5,476 million held
by I'ec:le:al baerN Bank' as' agents :foz: fOHi.gn and international. monetary
au'thorit:i._, which lIIay l:Ht refunded within .the of~erinq amount at the higbest
d.1.sc:ount rate-.. of accap~ competitive te,!,dera. Add.l.ti~ ~ts may be
uauecl £0'1: such accounts i.f i:he &ggJ:'8g"&t:a amount of new bids exceec:ia the
.~eg'.. t:a amount o~ . .=rag l).ill=s.
~D~t: cwstomera ~.atecl that we :r:einvest their JDiLtur.inq holci:Lngs of ~ox;mate~y S868 mi1.1.ion .into the 13-week bill and $1,21; mi1.1ion
l.n-ec the 26-week bill.
Tbi. of£.J:'~g' of -:z:eaau:r:y aecuri u.s ia governed by the teJ:mS and. coneli tiona sat forth in the tJIlif01:Dl Offerinq Circular for the· Sa1"e and Issue of
Marketable Book-Bnb:y Trea.sw:y Bills, Notes, aAd. Bonds (31 en Part 356, as
amended) •
Oeta.i1a about each of the new securitiea are given .in the attachec:.i
offer1ng' big-blights.
LS-d 121
At:t=acbment
000
HIGHLIGHTS or ~REASURY OrFBRINGS or BILLS
'to BE ISSUED JANUARY 18 t 2001
January 11, 2001
Offering .AlllDunt •••••••••••••••••••••••• ~ $13,000 .llilon
Description o~ Of~.r1ni:
Term and type of •• ourity ............... 91-day bill
CUSIP nWlber ............................ 912795 Be 9
Auotion date ............................ Januar~ 16,2001
I,aue date ....•......................... January 18, 2001
Hlturity date •••••..•••.•..•..•...•••... April IlJ, 2001
Priginal iaaue dat•..•.................. OctOber 19,2000
Currently outstanding.·.................. $14,611 million
Minimum bid amount and multiples ........ $1,000
$11,000 mlllion
182-day bill
·912195 GP 0
~anuary 16, 2001
January 18, 2001
July 1.9, 2001
January 18, 2001
.$1,000
The following rules apply to all .eourities mentioned above:
SWbmi.sion of Bids:
Noncompetitive bids .........• Accepted in full up to $1,000,000 at the highest disoount rate of
accepted competitive bids.
Competitive bids .....•....... (1) Must be expre.sed as a discount rat. with ~hr.e decimal. in
incr. .ents of .005', •. g., 7.100', 1.105'.
(2) Nat long position for each bidder must be reported when the .um
oltha total bid ·amourit, at all discount rates, and the net 10nq
position is $1 billion ~r 9reater,
(3) Net long position must be determined as of one half-hour prior·
to the clOSing time for receipt of competitive tenders.
M,ximum ReCognized Bid
at a Single Rate ..•.•........
l5~
of public offering
Maximum Award .......•......••.•. 35' of pUbllcpf~.rin9
R.ceipt
o~ ~ender8:
Noncompetitive tenders ...•... Prior to 12:00 noon eastern standard time on auction day
Competit~v. t.nders •......... Prior to 1:00 p.m. eastern atandard time on auction day
p,ym~nt Teras:
By charge to a funds account at a r.deral Reserve Bank on issue date, or payment
of full par -amount with tender. TreasU~Djrect customers can use the Pay Direct feature which
.~~o~ize8 a charge to their account of record at their financial institution on issue date.
THE wrnTE HOUSE
Office of the Press Secretary
FORPL~GPURPOSESONLY
Contact: 202-456-7150
January 12, 2001
SECRETARY OF THE TREASURY, SECRETARY OF STATE,
SECRETARY OF LABOR AND NATIONAL ECONOMIC ADVISOR
TO ANNOUNCE NEW ADMINISTRATION EFFORTS
TO FIGHT SWEATSHOPS AND CHILD LABOR
Washington D.C. - Secretary of the Treasury Larry Summers, Secretary of State
Madeline Albright, Secretary of Labor Alexis Herman and National Economic Advisor Gene
Sperling will announce a series of measures that the Clinton Administration is taking to combat
international sweatshops and abusive child labor on Tuesday, January 16,2001 at 10: 15 a.m.
Under President Clinton's leadership, the United States has been the international leader
in advocating the improvement of working standards around the world, including efforts to fight
sweatshops and abusive child labor. In 1996, the President brought together a diverse group of
manufacturers, consumer groups, labor and rights organizations and universities to form the
Apparel Industry Partnership. Out of this partnership, the Fair Labor Association was created, a
coalition organization dedicated to ensuring that products purchased by Americans consumers
were not made in overseas sweatshops.
President Clinton has highlighted the importance ending abusive child labor in several
State of the Union addresses. The President has also signed ILO Convention 182, which
prohibits the worst forms of child labor and has established the United States as the largest
contributor to international efforts to eliminate abusive child labor.
WHO:
Secretary of the Treasury Summers
Secretary of State Albright
Secretary of Labor Herman
National Economic Advisor Sperling
WHAT:
Announcing new measures to combat sweatshops and abusive
child labor
WHEN:
Tuesday, January 16,2001 at 10: 15 a.m.
WHERE:
Presidential Hall
Eisenhower Executive Office Building
The White House
COVERAGE: OPEN PRESS
Pre-set
Final Access:
9:00 a.m.
10:00 a.m.
NOTE:
Media needing White House clearance to cover this event
should contact the Office of the Press Secretary at 202-456-7150.
Press should gather in the press briefing room prior to pre-set and final
access times for escorts to Presidential Hall.
-30-30-30-
Joint Release
Board of Governors of the Federal Reserve System
U.S. Department of the Treasury
FOR IMMEDIATE RELEASE
January 12, 2001
FEDERAL RESERVE AND TREASURY DEPARTMENT RELEASE REPORT
ON FEASIBILITY OF MANDATORY SUBORDINATED DEBT
The Board of Governors of the Federal Reserve System and the Secretary of the
Treasury found that subordinated debt issuance by large depository institution organizations
may encourage market discipline and generate other supervisory benefits. A joint report
released today also indicated that the Board and the Treasury's Office of the Comptroller of the
Currency and Office of Thrift Supervision (agencies) will consider ways to enhance their use
of voluntarily issued subordinated debt in supervisory monitoring. The Board and the
Secretary, however, chose not to recom mend that Congress make subordinated debt issuance
mandatory at this time.
The report to Congress, required by the Gramm-Leach-Bliley Act, called for continued
research and, most importantly, continued evaluation offinancial institution supervisors'
experience in using information derived from voluntarily issued subordinated debt. Virtually all
of the largest banking organizations already issue subordinated debt. The agencies monitor
subordinated debt yields and issuance patterns in evaluating the condition of large depository
institution organizations.
The study found that existing evidence supports the use of subordinated debt to
encourage market discipline. But it said that the net benefits of a mandatory policy are not clear
enough to justify such a policy. Going forward, if additional evidence suggests that requiring
institutions to issue subordinated debt is appropriate, either the Board or the Secretary may
recommend legislation.
Copies of the report, The Feasihility and Desirability (~fMandatOly 5/llhordinated Deht,
are available on'the web sites of the Board, \V\Vwfederalreserve.govlboarddocs/RplCongress/, and the
Treasury Department, www.uslreas.gQX
###
Media Contacts:
Federal Reserve:
Treasury:
LS-1122
Dave Skidmore (202) 452-2955
Bill Buck
(202) 622-2960
DEPARTlVIENT
OF
THE
TREASURY
NEWS
1REASURY
OFFICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASIDNGTON, D.C .• 20220. (202) 622-2960
FOR IMNIEDIATE RELEASE
January 16, 2001
Contact: Public Affairs
(202) 622-2960
NEW MONEY LAUNDERING GUIDANCE ISSUED
The Treasury Department, the Federal Reserve Board, the Office of the Comptroller of
the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and
the Department of State, today announced the issuance of new guidance to help US financial
institutions avoid transactions that may involve the proceeds of foreign official corruption.
The guidance, issued in furtherance of our National Money Laundering Strategy,
encourages U.S. financial institutions to apply enhanced scrutiny to their private banking and
similar high dollar-value accounts and transactions where such accounts or transactions may
involve the proceeds of corruption by senior foreign political figures, their immediate family or
close associates. The guidance provides a set of suggested account establishment and
maintenance procedures designed to help institutions obtain appropriate information on accounts
held by such persons, as well as a list of potentially suspicious transactions that will often
warrant enhanced scrutiny.
Treasury Secretary Lawrence H. Summers said, "Foreign official corruption undermines
US. efforts to promote democratic institutions and economic development around the world ..
This guidance will help keep US. financial institutions from providing unintended assistance to
corrupt foreign officials seeking to hide their ill-gotten gains."
The guidance, developed by an interagency group led by Treasury Deputy Secretary
Stuart E. Eizenstat, is available on Treasury's web site at www.treas.gov. Each of the issuing
agencies will disseminate the guidance through their formal channels, as well.
-30-
LS-1123
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s
Government Printing Office 1998· 619·559
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
January 17, 2001
Contact: Office of Financing
202-691-3550
TREASURY'S INFLATION-INDEXED SECURITIES
FEBRUARY REFERENCE CPI NUMBERS AND DAILY INDEX RATIOS
Public Debt announced today the reference Consumer Price Index (CPI) numbers and daily
index ratios for the month of February for the following Treasury inflation-indexed securities:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
3-3/8% 1O-year notes due January 15, 2007
3-5/8% 5-year notes due July 15, 2002
3-5/8% 10-year notes due January 15, 2008
3-5/8% 30-year bonds due April 15,2028
3-7/8% 10-yearnotesdueJanuary 15,2009
3-7/8% 30-year bonds due April 15, 2029
4-1/4% 10-year notes due January 15,2010
3-1/2% 10-year notes due January 15, 2011
This information is based on the non-seasonally adjusted U.S. City Average All Items Consumer Price
Index for All Urban Consumers (CPI-U) published by the Bureau of Labor Statistics of the U.S.
Department of Labor.
In addition to the publication of the reference CPI's (RefCPI) and index ratios, this release
provides the non-seasonally adjusted CPI-U for the prior three-month period.
This information is available through the Treasury's Office of Public Affairs automated fax
system by calling 202-622-2040 and requesting document number 1124. The information is also
available on the Internet at Public Debt's website (http://www.publicdebttreas.gov).
The information for March is expected to be released on February 21, 2001.
000
Attachment
http://www.publicdebt.treas.gov
LS-1124
TREASURY INFLATION-INDEXED SECURITIES
Ref CPI and Index Ratios for
February 2001
Security:
Description:
CUSIP Number:
Dated Date:
Original lsaue Date:
Additional Issue Datels):
3-3/8% 10-Year Notes
Series A-2007
9128272M3
January 15. 1997
February 6. 1997
April 15. 1997
3-5/8% 5-Year Notes
Series J-2002
9128273A8
July 15. 1997
July 15. 1997
October 15. 1997
3-518% 10-Year Notes
Series A-2008
9128273TI
January 15, 1998
January 15.1998
October 15. 1998
3-5/8% 30-Year Bonds
Bonds of April 2028
912810FD5
April 15. 1998
April 15. 1998
July 15. 1998
Maturity Date:
Ref CPI on Dated Date:
January 15. 2007
158.43548
July 15. 2002
160.15484
January 15, 2008
161.55484
April 15. 2028
161.74000
Date
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
CPI·U (NSA) lor'
RefCPI
Index Ratio
Index Ratio
Index Ratio
Index Ratio
174.10000
174.09843
174.09286
174.08929
174.08571
174.08214
174.07857
174.07500
174.07143
174.06786
174.06429
174.06071
174.05714
174.05357
174.05000
174.04643
174.04286
174.03929
174.03571
174.03214
174.02857
174.02500
174.02143
174.01786
174.01429
174.01071
174.00714
174.00357
1.09887
1.09885
1.09882
1.09880
1.09878
1.09876
1.09873
1.09871
1.09869
1.09867
1.09864
1.09862
1.09860
1.09858
1.09855
1.09853
1.09851
1.09849
1.09846
1.09844
1.09842
1.09840
1.09837
1.09835
1.09833
1.09831
1.09828
1.09826
1.08707
1.08705
1.08703
1.08701
1.08698
1.08696
1.08694
1.08692
1.08689
1.08687
1.08685
1.08683
1.08681
1.08678
1.08676
1.08674
1.08672
1.08669
1.08667
1.08665
1.08663
1.08660
1.08658
1.08656
1.08654
1.08652
1.08649
1.08647
1.07765
1.07763
1.07761
1.07759
1.07756
1.07754
1.07752
1.07750
1.07748
1.07745
1.07743
1.07741
1.07739
1.07737
1.07734
1.07732
1.07730
1.07728
1.07725
1.07723
1.07721
1.07719
1.07717
1.07714
1.07712
1.07710
1.07708
1.07706
1.07642
1.07640
1.07637
1.07635
1.07633
1.07631
1.07629
1.07626
1.07624
1.07622
1.07620
1.07618
1.07615
1.07613
1.07611
1.07609
1.07607
1.07604
1.07602
1.07600
1.07598
1.07596
1.07593
1.07591
1.07589
1.07587
1.07584
1.07582
October 2000
--
1740
November 2000
174.1
I
December 2000
-
174.0
TREASURY INFLATION-INDEXED SECURITIES
Ref CPI and Index Ratios for
February 2001
Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):
3-7/8% 10-Year Notes
Series A-2009
9128274Y5
January 15. 1999
January 15. 1999
July 15. 1999
Maturity Date:
Ref CPI on Dated Date:
January 15. 2009
164.00000
Date
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
CPI-U (NSA) for:
3-7/8~. 30-Year Bonds
Bonds of April 2029
912810FH6
April 15. 1999
April 15. 1999
October 15. 1999
October 15. 2000
April 15. 2029
164.39333
4-1/4% 10-Year Notes
Series A-2010
9128275W8
January 15. 2000
January 18. 2000
July 15. 2000
3-112% 10-Year Notes
Series A-2011
9128276R8
January 15. 2001
January 16. 2001
January 15. 2010
168.24516
January 15. 2011
174.04516
RefCPI
Index Ratio
Index Ratio
Index Ratio
Index Ratio
174.10000
174.09643
174.09286
174.08929
174.08571
174.08214
174.07857
174.07500
174.07143
174.06786
174.06429
174.06071
174.05714
174.05357
174.05000
174.04643
174.04286
174.03929
174.03571
174.03214
174.02857
174.02500
174.02143
174.01786
174.01429
174.01071
174.00714
174.00357
1.06159
1.06156
1.06154
1.06152
1.06150
1.06148
1.06145
1.06143
1.06141
1.06139
1.06137
1.06135
1.06132
1.06130
1.06128
1.06126
1.06124
1.06122
1.06119
1.06117
1.06115
1.06113
1.06111
1.06108
1.06106
1.06104
1.06102
1.06100
1.05905
1.05902
1.05900
1.05898
1.05896
1.05894
1.05892
1.05889
1.05887
1.05885
1.05883
1.05881
1.05878
1.05876
1.05874
1.05872
1.05870
1.05868
1.05865
1.05863
1.05861
1.05859
1.05857
1.05855
1.05852
1.05850
1.05848
1.05846
1.03480
1.03478
1.03476
1.03474
1.03471
1.03469
1.03467
1.03465
1.03463
1.03461
1.03459
1.03457
1.03454
1.03452
1.03450
1.03448
1.03446
1.03444
1.03442
1.03440
1.03437
1.03435
1.03433
1.03431
1.03429
1.03427
1.03425
1.03423
1.00032
1.00029
1.00027
1.00025
1.00023
1.00021
1.00019
1.00017
1.00015
1.00013
1.00011
1.00009
1.00007
1.00005
1.00003
1.00001
0.99999
0.99997
0.99995
0.99993
0.99990
0.99988
0.99986
0.99984
0.99982
0.99980
0.99978
0.99976
October 2000
174.0
November 2000
174.1
December 2000
174.0
01/16/01
rUE 15:00 FAX 202 647 ~17
JAN 16
~~1
~2!39PM
oce
State EUR/AGS
PR
@OOl
P.2/2
C)
Comptroller of the Currency
Administrator of National Banks
Washington, DC 20219
January 16,2001
Statement of John D. Hawke, Jr.
Comptroller of tbe Cu rrency
The ace is pleased to join with the Treasury Department, the other bank regulators and the
Department of State in issuing this guidance, which will assist banks in detecting transactions
that may involve proceeds of foreign official comJption and will help ensure that banks are not
unwittingly used to launder the proceeds of such entities.
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
January 16, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
91-Day Bill
January 18, 2001
April 19, 2001
912795GC9
High Rate:
5.220%
Investment Rate 1/:
Price:
5.361%
98.681
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted
8%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tendered
Tender Type
Competitive
Noncompetitive
$
22,100,620
1,289,281
$
880,000
880,000
24,269,901
13,005,901
4,352,666
4,352,666
Foreign Official Refunded
SUBTOTAL
Federal Reserve
Foreign Official Add-On
10,836,620
1,289,281
12,125,901 2/
23,389,901
PUBLIC SUBTOTAL
o
°
$
TOTAL
Accepted
28,622,567
$
17,358,567
Median rate
5.185%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
5.160%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
23,389,901 / 12,125,901
=
1.93
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $977,851,000
http://www .pu bl icdeb t. treas. gOY
LS-1125
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
January 16, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
182-Day Bill
January 18, 2001
July 19, 2001
912795GPO
5.055%
Investment Rate 1/:
Price:
5.261%
97.444
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 79%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
$
15,412,315
1,634,365
$
3,470,000
3,470,000
20,516,680
11,001,630
4,508,390
4,508,390
o
o
Foreign Official Refunded
SUBTOTAL
Federal Reserve
Foreign Official Add-On
$
5,897,265
1,634,365
7,531,630 2/
17,046,680
PUBLIC SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
25,025,070
$
15,510,020
Median rate
5.025%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
5.000%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 17,046,680 / 7,531,630
=
2.26
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,302,704,000
http://www. pu blicdcbt. t rcas.gov
LS-1l26
aRleE 01' !'lJRLIC AFFAUtS -1580 PENNSYLVANIA A~ENlJE. N.W•• WASHINGTON. D.C.- lOl18. (201) 622-1961)
~!iD
~lary
tJ1ft':tL 9; 00 A.lI.
17, ~OO~
PUBLIC CONTAC'r:
Office of Financing
HEDU CON'l'AC'l':
tJDa. Ga.l.lagher
202-69~-3S50
202-622-2960
em Jam1&:y 18, 2001, the 'rrea6\lrY will J:Ny back up to $1,750 million
par of i1:8 outstanding issues that mature between November 2042 azl4 lII"ovember
2027. Il're&su:l" :ras~s the right to accepe ~ess than the cumou.nced amo-..m.t.
Il'his debt bu.yl)&c:k (redemption) operation will be conducted by Treasury's
:Fiscal Agent, the Federal Reserve BaM of !!lew 'York, usill.g' its Open Market
operaticms system. Only institutions that the Federal Reserve' Ba.1:Ut of Hew
York bas approved to ccmduct Open Jlarkat Uansactions may submit offers ou
Mba' f! of tb.emael.ves
~ei.% custc:aers.
Offers at the highest accepte4.
p:d.c:. for & pa:tic:ular iasue maybe 'a.ccepted on a. prorB:t.ed basis, rou%lded up
to the next $100,000. AS a result of this roun4i:s.g, the lJ%easU%l" ~ buy
back an amcnmt slightl.y J.azoger than the cme am::t.Q'WlceCl above.
.
-=
This 4ebt ~ek operatic=. ;is g'OV'e%Xled by ue
forth in 31 CPa p~ 375 &ad this ~ement.
The dabt buyback operation
the
PUb~ic DeD~ts
regu~atiODS
~El%mS
are available on the Bureau of
website a.t www.publiedabt.treas.gov.
Detail.s about the operation and each of t.he eligible
i:. the
LS-1127
and cODdit.ions set
a~~ached ~gb.lights.
i~sues
are given.
Ja"uary 1.7, 2001.
Par a1"""Unt to be bought back •• Up to $1,7S0 lJdllion
.oa..,t
18, ~OOJ.
·
~ ..t 1Qn
....a • •••• • • • • • • • • • • • • Januarr
-.I
n..:....--
Operaticm close tiJle ........... 11:00 a.m. eastern standard time
s.ttl~t date .................. ':a:a:nary 22, 2001.
Mi"i""" par offer a1DIOW1t ••••• $1.00,000
~~iple. of par ••••••••••••• $100,000
Fo.l::aIat for offers ...... Expressed in ten1S of price per $100 of par with
three decimals. The first two decimals represent
fn..ctiocal 321Sda of a. dollar. The thi:d d.ecimJ
repreaents eiqhths of a 32aa o£ a dol.lar, and must
be A 0, 2, 4, ~ 6.
Delj,V'e%Y ~~rI.1C~.icms .......... ABA HWDber 021001208 FlUS HYC/CO'ST
'l'reasury issues eligible for debt buyback operation (in millions) :
Coupou
Kate <,,>
7.635
7.125
6.250
7.500
7.625
6.875
6.000
6.150
6.500
6.625
6.375
6.125
Maturity
Date
11/15/2022
OJ/15/2023
08/1.5/2023
11/15/202.
02/15/202508/15/2025
02/15/2026
08/1S/20~6
11/15/2026
02/15/2027
08/15/2027
11/15/2027
ct1SJ:P
!lUmber
912810 liN 4
912810 EP9
912810 EQ7
912810 ES 3
912810 E'r 1
912810 'iN' 6
912810 EW ,
91.2810 sxa
912810 EYO
91.·2810 EZ1
912810 !'A 1
912810 PB9
'focal.
Par
AmcUn~
OUtst.iUl.ding-
par Amou.nt
Par Amount
Pri.vately
Beld as
Beld*
STRl:PS-·
8,845
7,244
4,826
1.7,·480
22,669
10,527
11,476
12,007
12,838
14 1 8405
7 1 61.6
21,1.16
10,208
ll,723
3,952
6,599
8.403
4,323
1,649
9,210
9,759
9,,366
3,12'
4·,573
3.501
8, ''16
1. .. 290
).0,824
11,483
10,286
1.0,41.6
22,519
161,370
8,91.2
10,300
19,334
140,793
5,909.
55,765
•
Par amounts are as of January 16, 2001. •
•• Par amcunts are as o£ January 12, 2001.
'l"be dif~erenc:e be"bnHln the par amoun~ outstang i uS &Del 1:.he par iUIaoUZ1t
privat.~y held is the par amount of those issues held by the Peclera.l
Rase.rve System.
'
,
DEPA.RTMENT
,
'
,
OF
THE
,
~
IREASURY
TREASURY
-
NEWS
omCE OF PUBliC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W. "WASHINGTON, D.C. • 20220 • (202) 622-2960
u.s. International Reserve Position
01/17/01
The Treasury Department today rele:lsed U.S. reserve assets data for the week ending January 12, 2001. As indicated in
this table, u.s. reserve assets totaled $67,415 million as ofJanu:lry 12,2001, down from $67,990 million as of January 5,
2001.
(in US millions)
I~
OffjCia!:U:S.Reserv:e Assets
r:OTJfL
't"ForeigrlCurrency Reserves l'
i{Cl'.;.Securitles ,
January 12, 200:1'
67,415
Jamial'lES'. 2001:
67,990
I
Euro
5,617
Yen
10,818
9,475
5,417
OFwhicb;' Issuer headquartered ihdfle.· U. s.
TOT.A:L
16,435
0
Euro .
5,578
10,463
Yem:
16,041
0
9,435
5,560
14,995
0
0
TOTAL
tL T'otaFdel?osits;witfi::
tri
\<
•
~.
bLOthet'c'entral banKs, and BIS
bdL BankS2headquartered1hiJhe U1:S;~
b':ij; Ofwtiicf.li' banks' located,abroad"
jj:'ili~ Banksheadquarter.edoutside:the: U.S,
b:iiL 8f.whlch; banks, located in' the: US
14,891
0
0
0
0
0
0
,z~ IMF Reserve- Position 2
14,979
14,813
~~SpedalarawingRigh~(SDRs).2
10,639
10,521
~-;,GoJd
11,046
11,046
0
0
Ii,
I~
~;
?
'-.
'
Stock 3
5~ Otlier Reserve:Assets
11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates, Foreign currency holdings listed as securities reflect marked-to-market values, and
deposits reflect carrying values.
21 The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRJdollar exchange rate for the reporting date, The IMF data for January 5 are final. The entries in the table
above for January 12 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF
data.
31 Gold stock is valued monthly at $42.2221 per fine troy ounce, Values shown are as of November 30, 2000. The October 31,2000 value
was $11,046 million.
LS-1128
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
January 5, 2001
1. Foreign currency loans and securities
January 12, 2001
o
o
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
January 5, 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3. c.. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4,a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4. b. 1. Boug ht calls
4.b.2. Written puts
January 12, 2001
o
o
o
o
o
o
o
o
TREASURY
NEWS
ORICE OF PlJBLIC AFFAIRS e1500 PENNSYLVANIA AVENUE, N.W•• WASHINGTON, D.C.' 20220. (202) 622·2960
J'MB~
'UlI'l'n. 2 :30 It •••
COIfl:AC'1':
Jazsua:ry 17, 2001
~
Office of Pi%aanc:insJ
202/691-3550
TO AlJC"l:ION $10.000 lIaLL:tOIf OF 2-YXAR !lO'1'BS
':he ~ee.su:y will &1Iction $10,000 ai1.l.ion of 2-year ~tes ~o re£u.nd $28,398
a.illioa of pshl.i.c~ hele! _curities mat.u.r1.Dg JaDuary 31, 2001, and to pay 40wn a].)out
$18,398 million.
J:Il addit1.cm to ~ pal:ll.1c: ho1cU.DgB, !'e4eral. Re~~ BaDks b.o1Cl $4,195 zailli.cm
ma~ sec:urit.i •• for cui:- cnm ac:COWlcs, which may he ref1mde4 ~ issui=g
aD a4d1
a.mc:nm~ o£ cbo DeW' • •C\a"i.tr.
of Che
ucm&l.
Ifhe maturiD§ securities held. by the publ.ic iDclude $6,633 milliOA bolo J:Jy
rede:l:a1 llAI&erV'8 BUks as agents for foreign cm4' inter:a.at.ional. mQD8tary authorities.
~t. ~CL for theae aCCOWlts by Pederal :Reserve Banks will be added to the
offeriAg.
1"reasw:,yD:irect: custclMrs requested that. va reinvest el1eir maturiJ::asJ hola:LDgs
of QPZ'O'dNtely ,600 aillicm :LAco Cha 2-yaazo DOte.
~ &ll=iQ;l will. liM OOACN"ec:1 i.A the .LDgle-price auat.icm fomaat.
Ul cCIJIIII)8ciC1.ve aDd. DIOACCIIDP.eiti.....-.ria will. JM at ~ AgU.t rie14 o~ ace.pt.:! eeapetit!i....
~eDder••
'!he %IOtes bei.Dg
off~d
t.oday are eligible for the S'l'lUPS prograa.
~.
offerizlQ' of ftH.SU%Y sscuri.ties is gova%Ded by the t8%2S aD.C! ccm.cHt.io~
~ ~!O%m OfferiDsr C:irc:v.l.a.:t: for ~ Sal.e &m4 %ssua of IlaZ'lcetal»1e BooJEbt:.%y 1!Z'8&S'UY Bills, JIOC•• , aDd :acm4s (31 en. Itart 356, as mnended).
s.~
£orth iD
l)ot.aj.ls &bo'l~ toM
ISeW'
security
~
sriven. in cbe ati:ached offeri.nsr hisrhl.isrhts.
000
LS-1l29
For press r.z.",el, speeches, puhlic schet1uks tlnd offoUd biographies, caU our 24-hollr fQ% line flt (202) 622-2040
HI~QIl'rS OJ' '1'RDS'1JRY OYJ'DDIG TO TO POBla:tC OF
2-tBAa II10TU TO BS l:SstJEI) ~y 31, 2001
J~
O£f:aZ'iy
~t
n.acrip~i~
...............
III
•
•
•
•
•
•
•
•
.. .. •
•
•
•
.. •
17, 2001
$10 I 000 aillioZl
of Offeripg:
~ aDd ~ of ~ity ••••••••••••••••••••• 2-year DOtes
. .ri ••........................................ L-3003
~%P ~X' • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 912827 6S 6
Auo~iQD dato••••••.•••••••••••••••••••••••••••• JaDU&rY 24, 2001
x.~. da~ • . _ •••••••••••••••••••••••••••••••••• J~ 31, 2001
Dac.d d&~e •••••••••••••••••••••••••• ~ ••.•••••• J~ 31, 2001
Maturity dace ••••••••••••••••••••••••••••••••• ~ 31, 2003
DeCI!I%1ll; ned basecl em the highest
Interest rae. •.
accoptoe4 CCllllll)et.iU'¥8 bid.
.
......
...
Y1.eld .................................... • • • • • •• .... ... rm.i pe4 .to &'GC'-iOA
x:a.eereat ~c dac ••••••••••••••••••••••••• .JUly 31 aD4 Jamaarr 31
W;»;_. bie! 83D01m~ &IUS ~ltiple ••••••••••••••• $1,000
Accrued ineere.~ ~e by ~.tor •••••••••• DeCel"lP i Ded at aucticm
~um or dia~t ••••••••••••••••••••••••••• Decermined at auctioa
III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STRIPS XD£oxmation:
Minim"" amouDt re~ire4 ••••.....••.••••••.•••• Det~ed at auction
corpus
cus~
DUmber •••••••••••••••••••••••••• S12820
GB 7
Du. date (.) and cusna mzmber (.)
for additional
T~(.)
•••••••••.••••.•••..•••ot
~licahle
SUbmiaaio: of Bids:
Noncompetitive Dids:
Ac::cepte4 in ful.l up to $S,OOO,OOO at the highest Kc:epted yield.
Competitive bida:
(l) JIIl.t he expressed &IS a yield. with three 4ac:iaal.s, e.er., 7.123%.
{~} Net 10DG' poai tiou for each bic!4er zma~ be %'eportaG wbeD Us sma of tAG total
hid aw:nmt, at all yi.lcU, ~ the Det lcmg position is $2 billion. or greater.
(3) Net lonG poaiCioZl Jm.t be d..t:a",;ned as of ODe half-bour prior to the
clo.~g time for receipt of campetitive tenders.
Ma,.'Wimnm Recognized. tid a.t a SiMle yield ••••.•••••• 35% of pul)lic offeriAg
N>z;mxm AWard •••••••••••••••••••••••••••••••••••••• 35% of public offering
Rec.ipt of ~n4ers:
1Iocc~t:ld:... teaa.Z'a.
Ccapo~itive t:~:
hi~ to 1.2:00 ~ .aa~~ a~·-d • .ri t::L.a CD. aw:s~i.CD. day.
eo 1:00 p ••.••• ~.~ st~ time OIl auctioll day.
~
1"!)'MIlt: ~;
Br c:baZ'sre '-0 • ~ accOUDt:. a~ a l"eQeral. Reserve BaU DC iS8U.e
cS&ce, or ~t of full par Iall:NAt riCh taDdar. ~t c::uatQllll8~S c:a». 'Gsa
eM p~ Direcc ~•• ~ wJ:U.c:b. &utoll.orius a cb&rge to tAai.zo ac:c:CNZlt:. of Z'8co:rcl at
the1.r
f~ia.1 .t.=.~i.~ti.cm
em i • .ue elate.
DEPARTMENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
January 18,2001
TREASURY RELEASES TWO REPORTS ON CREDIT UNIONS
The Treasury Department today released two congressionally mandated reports on credit
unions, Credit Union Membership Business Lending and Comparing Credit Unions with Other
Depository Institutions, both were prepared in response to the Credit Union Membership Access
Act, which President Clinton signed into law on August 7, 1998.
In the report, Credit Union Membership Business Lending, Treasury surveyed all 1,514
credit unions that carried member business loans on their books as of June 30, 1999. The report
finds that few credit unions are active business lenders. As of June 30, 2000, only 92 of 10,337
credit unions had total member business loans outstanding exceeding their net worth. While this
group comprises less than one percent of credit unions, they account for over 46 percent of the
unpaid principal balance of all member business loans. The report also finds that over half of all
member business loans are collateralized with non-agricultural real estate, and rental properties
make up one-third of the dollar volume of all member business loans.
In preparing the second report, Comparing Credit Unions with Other Depository
Institutions, Treasury compared the federal regulations and statutes applicable to credit unions
with those applicable to other federally insured depository institutions, focusing on such areas as
safety and soundness, consumer protection, and the product offerings of these different
institutions. The report also reviews the history of credit unions' exemption from the federal
corporate income tax and estimates the potential revenue that could be raised were Congress to
remove that exemption (between $13.7 billion and $16.2 billion over a ten-year period). Finally,
the report outlines the steps taken during this Administration to promote the viability of small
banks and discusses the tax policy principles that must be satisfied to expand bank eligibility for
electing Subchapter S status.
These reports are available on Treasury's website at www.treas.gov/press
-30-
LS-1130
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s. Government Printing Office
t998 - 619-559
APPENDIX
COMPARISON OF DEPOSITORY INSTITUTION POWERS
AND REGULATORY REQUIREMENTS 1
Rule
OCC/FDIC/FRB
NCVA
OTS
Customer Base
Field of membership
National banks face no restrictions on the
customers they may serve.
Same as national banks.
Federal credit unions may only serve persons
within the field of membership who join the
credit union. 12 U.S.c. § 1759. Federal
credit unions may choose from among three
types of charters: (1) single common bond
(i.e., occupational and associational); (2)
multiple common bond (i.e., more than one
group each having a common bond of
occupation or association); and (3)
community common bond. 63 Fed. Reg.
71,998 (Dec. 30,1998).
-
The immediate family and those residing in
the household of one satisfying the common
bond requirement are themselves eligible to
join the credit union, whether or not the
eligible individuals actually join the credit
union. 12 U.s.c. § 1759(e)(I); 63 Fed. Reg.
71,998, 72,027 (Dec. 30, 1998).
-
-_..
-
---
I This table compares statutory and regulatory rules across federally chartered depository institutions (i.e., national banks, federal savings associations,
and federal credit unions), although many of these rules apply to all federally insured depository institutions. However, the table does not attempt to catalogue
all of the authority available to federally chartered depository institutions; rather, it presents a sample that will illustrate how federal credit unions compare with
other federally chartered depository institutions.
39
Rule
OeC/FDIC/FRB
OTS
NCVA
Depository Institution Powers 2
Deposits
Checking accounts
(demand deposits)
National banks may offer demand deposits
to any customer. Such accounts may not
earn interest. However, banks may offer
NOW accounts (negotiable order of
withdrawal accounts) to individuals and
nonprofit organizations. but not to
businesses. \\ hich may earn interest. The
hank rna) reserve the right to require at
least ~even da}s notice prior to withdrawal
of fund~ from such accounts. but such
restrictions are rarely enforced. 12 U.S.c.
~ 2·1( se\ enlh l. 12 Cr.R. ~~ 20-l.130 and
217.1
Similar to national banks. 12 U.S.c. §
1464(b); 12 C.F.R. part 557,
subpart Band § 561.29.
Federal credit unions may offer to their
members share draft accounts (i.e., demand
deposits). 12 U.S.c. § 1757(6); 12 C.F.R. §
701.35(a).3 Generally, credit unions may
only serve individuals. However,
community credit unions may accept
businesses as members. 63 Fed. Reg. 71,998,
72,037 (Dec. 30,1998). Similarly, credit
unions that primarily serve predom inantly
low-income members may accept deposits
from non-members, including businesses. 12
U.s.c. § 1757(6); 12 C.F.R. § 701.34(a)(I).
Unlike national banks and federal savings
associations, federal credit unions with
businesses as members may pay interest on
business checking accounts.
Time deposits
National banks may offer certificates of
deposit, savings accounts, and similar
deposits without significant restrictions.
12 U.s.c. § 24(seventh).
Same as national banks. 12 U.s.c. §
1464(b), 12 C.F.R. part 557,
subpart B.
Federal credit unions may offer share
certificate accounts. 12 U.S.c. § 1757(6); 12
C.F.R. § 701.35(a).
Trust accounts
National banks may offer trust and other
Generally the same as national banks,
Federal credit unions may not offer trust
,
- Th is portion of the table primarily addresses those activities in which depository institutions may engage directly. Activities engaged in through
affiliates are discussed elsewhere in this table.
3 Federal credit unions are member-owned cooperatives. 12 u.s.c. §§ 1752( I) and (5). Therefore, the Federal Credit Union Act refers to member
deposits as member shares, whether the share represents a demand deposit, time deposit. or certificate of deposit. 12 U.S.c. § 1752(5).
40
I
Rule
OTS
OCC/FDIC/FRB
NCVA
fiduciary accounts. 12 u.s.c. § §
24(seventh) and 92a; 12 C.F.R. part 9.
except that specific permission is
required. 12 U.S.c. § 1464(n).
services directly, but may do so through
affiliates called Credit Union Service
Organizations (CUSOs). 12 C.F.R. §
712.5(0).
National banks may offer traveler's checks
and travel information, but may not act
directly as a travel agent. However,
financial subsidiaries may act as a travel
agcnt. They may also provide directly
forcign e\changc scrviccs for thcir
cu\tol1ler\. but not for thcir own account.
()CC Interpreti\c I.etter No. 553. May 2.
11)111. ,\;11 '/'/ T"w:; v. Camp. 472 F.20
4~7 ( ht elr 11)7~ I. 12 llSC ~ 24a: 12
Same as national banks. 12 U.S.c. §
1464; FHLBB Op. Gen. Couns., Nov.
24, 1965.
Federal credit unions may offer travelers
checks, 12 U.s.c. § 1757(12), and foreign
exchange services. NCUA Op. Gen. Couns.,
Dec. 9, 1999. Like national banks, federal
credit unions may not act as travel agents
directly, but may do so through CUSOs. 12
C.F.R. § 712.5(n).
NatIonal hallJ..\ Illa) offer an) scrviccs
eicl'lronicall) that it is otherwisc
autllOri/ed to ofler. 12 l'.F .R. § 7.1019.
Same as national banks. 12 C.F.R. §
555.200(a).
Same as national banks. 12 U.s.c. §
1757( 17).
Insurancc
National banks may sell liability, casualty,
automobilc. life. hcalth, and accidcnt
insurance on an agency basis from places
of 5,000 or Icss in population without
restriction on the location of a bank's
customers. Through a financial subsidiary,
a national bank may engage in general
insurance agency activities without the
restrictions. 12 U.s.c. §§ 92 and 24a; 12
C.F.R. § § 7.1001 and 5.39.
Federal savings associations have
similar powers, but without geographic
restriction. OTS Op. Acting Ch.
Couns., Oct. 17, 1994. Moreover,
through service corporations, federal
savings associations may sell insurance
on an agency basis without geographic
restriction. 12 C.F.R. § 559.4(f)(3).
Federal credit unions may not offer insurance
products directly, but may broker and sell
any type of insurance through a CUSO. 12
C.F.R. § 712.5(g). No geographic restriction
applies to a CUSO's insurance authority.
See 12 C.F.R. part 712.
Securit ies brokerage
National banks directly and without
Federal savings associations may only
Federal credit unions may not broker
Customer Services
Travel services and
foreign exchange
services
( I R.
Liectronic hanJ..lIl!,!
scr\,lce~
~ ~ ,I)
41
Rule
Securities underwriting
NCVA
registering with the SEC may engage in
many types of securities brokerage
activities. 12 U.s.c.
78c(a)(4) and (5).
engage this activity through a service
corporation, and then only on an
agency basis. 12 C.F.R. § 545.74.
securities directly, but may do so through a
CUSO. 12 C.F.R. § 712.5(k).
National banks may provide financial and
investment advisory services, including
advising an investment company. 12
USc. § 24(seventh).
Federal savings associations may offer
certain forms of investment advice, but
only through a service corporation. 12
C.F.R. § 545.74.
Federal credit unions may not provide these
services directly, but may do so through a
CUSO. 12 C.F.R. § 712.5(e).
No similar authority.
No similar authority.
Ihrough a service corporation, federal
savings associations may sponsor,
advise, and distribute, as well as sell
shares in both proprietary and thirdparty mutual funds. 12 C.F.R. §
545.74.
Federal credit unions may only broker
mutual funds. 12 C.F.R. § 712.5(k).
**
Investment advice and
financial consulting
OTS
OCC/FD I C/FRB
I National banks may directly, and through
operating subsidiaries, underwrite various
t) pes of securities, including U.S.
govemment securities, municipal general
ohligation and re\enue bonds, and assetbad,ed ~ecuritles. Financial subsidiaries
1l1"~ eng"ge in the undem riting of all types
of ~1'(lJrltle~. 12 1J S (. ~ ~ 24( seventh)
,lIld 2·la. 12 elK par\', I and I~.
"lutu,,1 fund "etl\ ItIL'~
~dllondl
0;1111..., ;lIld their operating
~lIh~idl,lrll'~ Il1d~
olTer a broad range of
;ldl1lllll~lrdtl\e "nd ill\eqment advisory
~l'f\ len. ~ef\ e a~ custod ian and transfer
"gent. and broker inve~tment company
~hares. Interp. LeI. Nos. 406-408.
Real estate brokerage
National banks may not engage in real
estate brokerage, but may act as finders.
12 USc. § 29; 12 C.F.R. § 7.1002.
Federal savings associations may
engage in limited real estate brokerage,
but only through a service corporation.
12 C.F.R. § 559.4(e).
Federal credit unions may not engage
directly in real estate brokerage, but may do
so through a CUSO. 12 C.F.R. § 712.5(p).
Derivatives activities
National banks may engage in a variety of
derivatives activities as a financial
intermediary or to control or reduce risk.
12 U.s.c. § 24(seventh).
Similar to national banks. 12 C.F.R. §
563.172.
Federal credit unions may purchase or sell
derivatives only to manage the risk of loss
through a decrease in value of its
commitments to originate real estate loans at
specified interest rates by entering into long
put positions on Ginnie Mae, Fannie Mae,
42
Rule
OCC/FDIC/FRO
OTS
NCVA
and Freddie Mac securities. 12 C.F.R. §§
703.110(a) and 701.2I(i)(2).
Asset securitization
National banks may directly securitize
their assets. 12lJ.s.C. § 24(seventh); 12
C.F.R. § 1.3(g).
Same as national banks.
No similar authority.
Section 84 of the National Bank Act
applies to savings associations in the
same manner and to the same extent as
it applies to national banks. 12 U .S.c.
§ 1464(u)(I); 12 C.F.R. § 560.93.
A federal credit union's lending to anyone
member is limited to 10 percent of
unimpaired capital and surplus. 12 USc.
§ 1757(5)(A)(x). According to the NCUA,
th is amounts to 10% of the amount equal to a
federal credit union's net worth plus its
deposits.
Lending: Non-Commercial
Lending
limits~
Lending limits protect the safety and
soundness of banks by preventing
excessive lending to one person or to
related persons. National banks follow
federal statutory lending limits, while state
banks tilllllW state law in this regard.
A national bank's total outstanding credit
to one bOfr(mcr g.enerally may not cxceed
I S percent or the bank's capital and
~urplu~. An addit ional 10 percent is
permis~ible if fully secured by readily
marketable collateral (Ie., financial
instruments and bullion salable under
ordinary market conditions with reasonable
promptness at a fair market value
deternlined by quotations based upon
actual transactions on an auction or
similarly available daily bid and ask price
market). 12 USc. § 84(a); 12 C.F.R. part
In addition, a savings association may
make loans to one borrower of up to
$500,000 even if its general lending
limit is less than that amount. Certain
other special rules provide additional
exceptions. 12 U.S.c. § 1464(u)(2).
The term unimpaired capital and surplus has
not been defined in the lending limits
regulation,5 although the Federal Credit
Union Bylaws define paid-in and unimpaired
capital and surplus as a federal credit union's
shares and undivided earnings. Art. XVIII,
§§ I(g) and (h).
In addition, the Federal Credit Union Act
refers to member shares as equity, 12 U.s.c.
§ 1757(6). Based on this and the definition
of paid-in capital and surplus, the NCUA
.t The lending limits apply to all fonns of lending by all federally-chartered depository institutions unless specifically exempted.
A similar ternl, "paid-in and unimpaired capital and surplus" is defined, for purposes of Central Liquidity Facility rules, as generally consisting of the
paid-in balance of share accounts and deposits plus undivided earnings. 12 C.F.R. § 725.2(0). However, the regulations governing federal credit union lending
limits contain no definition.
43
Rule
OCC/FDIC/FRB
NCVA
OTS
interprets the applicable lending limit as
including a federal credit un ion's deposits
(shares) as equity for purposes of this limit.
As a result, the limit for federal credit unions
far exceeds that applicable to other federal
depository institutions, which are only based
on a proportion of capital, rather than on a
proportion of the combination of capital and
deposits.
32 (GCC).
State lending limits generally range from
10% to 20% of capital and surplus.
William A. Lovett, Banking and
Financial Institutions Law, West, 1992,
pp.156-157.
Federal credit unions also face restrictions on
commercial lending. The aggregate amount
of business loans outstanding to anyone
member may not exceed 15 percent of
reserves or $100,000, whichever is higher.
12 C.F.R. § 723.8. The aggregate amount of
member business loans made by a credit
union may not exceed 1.75 times the credit
union's net worth or 12.25% of the credit
union's total assets. 12 U.s.c. § 1757a(a);
12 C.F.R. § 723.16. Exceptions to the
aggregate loan limit apply to: (I) lowincome credit unions, or those participating
in the Community Development Financial
Institutions program; (2) those chartered for
the purpose of making business loans; and
(J) those with a history of primarily making
such loans. 12 U.S.c. § 1757a(b); 12 C.F.R.
§ 723.17. Generally, federal credit union
loans may not have terms that exceed 12
years, except for residential real estate loans.
12 U.S.c. § 1757(5).
Usury
A national bank may generally charge as
much interest as a bank chartered by the
state in wh ich the national bank is located.
Similar to national banks. 12 U.s.c. §
1463( g)( I ).
Federal credit unions may not charge more
than 18% on extensions of credit to their
members. 12 U.s.c. § 1757(5)(A)(vi)(I); 12
---
44
--
---
-
I
I
I
Rule
OCC/FDIC/FRB
NCVA
OTS
C.F.R. § 701.21(c)(7)(ii)(8).
12 u.s.c. § 85.
Loans secured by
residential real estate
National banks may make these loans
subject to oee regulation. 12 U.s.c. §
24(seventh); 12 C.F.R. part 34.
Same as national banks. 12 U.s.c. §§
1464( c)( I )(8), (E), and (R).
Federal credit unions may make long term
real estate loans only for a member's
principal residence and for a term not to
exceed 40 years. 12 U.S.c. § 1757(5)(A)(i);
12 C.F.R. § 701.21(g)(I). In addition, any
second mortgage may not exceed 20 years.
12 U.S.c. § 1757(5)(A)(ii); 12 C.F.R. §
70 1.2 1(f)(2).
Unsecured home
improvement loans
National banks may make these loans. 12
lJ.s.c. § 24(seventh).
Same as national banks. 12 U.s.c. §
1464(c)(I)(J); 12 C.F.R. § 560.30.
Same as national banks, except that such
loans may not exceed 20 years. 12 U.s.c. §
1757(5); 12 C.F.R. § 701.21(f)(3).
lJnsecured residential
construction loans
National han"s Illay Illa"e these loans. 12
I J .S.C § 24( seventh)
Federal savings associations may make
these loans subject to a limit equal to
the greater of 5% of assets or 100% or
capital. 12 U.s.c. § 1464(c)(3)(C) .
No similar authority.
ConsumCf loans
Nat ional han"s rna) ma"e these loans. 12
IISC. § 24(seventh).
Federal savings associations may make
these loans as long as the aggregate
amount does not exceed 35% of assets
when combined with commercial paper
and corporate debt securities. 12 U.S.c.
§ 1464(c)(2)(O).
Same as national banks, except for the 12year term limit. 12 U.s.c. § 1757(5); 12
C.F.R. § 701.21(a).
Credit card loans
National banks may make these loans. 12
U.s.c. § 24(seventh).
Same as national banks. 12 U .S.c. §
1464( c)( I )(T).
Same as national banks, except for the 12year term limit. 12 U.s.C. § 1757(5); 12
C.F.R. § 701.21(a).
.
Overdraft loans
-
National banks may make these loans. 12
U.s.c. § 24(seventh).
Similar to national banks. 12 U.s.c. §
1464( c)( I )(A).
Same as national banks, except for the 12year term limit. 12 U.s.c. § 1757(5); 12
C.F.R. § 70l.2I(c)(3).
Lending: Commercial
_.
45
I
I
Rule
OCC/FD I C/FRB
OTS
NCVA
Commercial loans
National banks may make these loans. 12
U.s.c. § 24(seventh).
Federal savings associations may make
these loans subject to a limit of 20% of
total assets, provided that any amount
over 10 percent of assets consists of
small business loans. 12 U.s.c. §
1464(c)(2)(A); 12 C.F.R. § 560.30.
Federal credit unions may provide business
loans to their members. The aggregate limit
on outstanding business loans is the lesser of
1.75 times the credit union's net worth or
12.25% of the credit union's total assets. 12
U.S.C. § I 757a(a); 12 C.F.R. § 723.16.
Construction and
development loans
National banks may make these loans. 12
C.F.R. part 34 (secured); 12 U.S.c. §
24( seventh) (unsecured).
Federal savings associations may make
unsecured construction loans, subject to
a limit equal to the greater of total
capital or 5% of total assets. They may
also make loans secured by nonresidential real estate, up to a limit of
400% of capital. 12 U.s.c. §§
1464(c)(2)(B) and 1464(c)(3)(C).
Federal credit unions may make member
business loans to finance the acquisition or
construction of income-producing property.
Such loans must not exceed 15% of net
worth, and the borrower must have at least a
35% equity interest in the project. 12 C.F.R.
§ 723.3.
Federal savings associations may
engage in lease financing of personal
property subject to a limit of 10% of
assets, without regard to residual value.
12 u.s.c. § 1464(c)(2)(C); 12 C.F.R. §
560.41 (d).
Federal credit unions lack express authority
to engage in lease financing. However, they
may engage in lease financing of personal
property, provided that such leases are the
functional equivalent of secured loans for
personal property. Thus, federal credit
unions must enter into only net, full-payout
leases, and they operate under rules similar
to those of national banks for their implied
leasing authority. 65 Fed. Reg. 34,581 (May
31, 2000) (codified at 12 C. F.R. part 714).
_____ --1 _ _ _ _ _
Leasing
l.easing
National hank~ may acquire personal
property for the purpose of leasing it,
provided that the lease qualifies as a net,
h
full-pa) out lease. The bank's recovery of
its investment and costs depends upon the
residual value of the property. Any
unguaranteed portion of the estimated
residual value must not exceed 25% of the
original cost of the property to the lessor.
Any amount guaranteed may exceed 25%
of the original cost if the guarantor has
sufficient resources and is not an affiliate
Federal savings associations may also
engage in lease financing that amounts
to the functional equivalent of lending.
Such leases may be for residential real
estate, non-residential real estate,
6 Under a net lease, the institution bears no obligation to service, repair, maintain, replace or insure the leased property. 12 C.F.R. § 23.2(f). With a
full-payout lease, the institution reasonably expects to realize the return of its investment in the leased property, as well as estimated costs of financing. 12
C.F.R. § 23.2(e). For federal savings associations, a full-payout lease also requires that the estimated cost of financing the property over the term of the lease
does not exceed 25% of the original cost of the property to the savings association. 12 C.F.R. § 560.4I(b)(2). Under these leases, an institution's return comes
from the periodic lease payments, tax benefits, and the residual value of the property.
46
Rule
OTS
NCVA
commercial, business, corporate, or
agricultural purposes, These leases
must be net, full-payout leases; and
(2) the amount invested counts towards
the appropriate limit on the particular
type of lending (e.g., commercial
leases must be counted towards the
limits on commercial lending). 12
C.F.R. § 560.4I(c).
Federal credit union CUSOs may engage in
lease financing of personal property without
these limitations. 12 C.F.R. § 712.5(h).
\\ nhlllit 1111111. n,ltlonal hank.., Illa) invest in
,ecllrrtlc' l"lIed or gllaranteed hy the
Ilnlted Slale'. ;111) I JS agency, or hy any
,laIc or local general obligation. 12lJ.S.C.
~ 24(,e\enlh); 12 C F.R. ~~ 1.2 and 1.3.
Subject to a 10 0 0 of capital limit on the
holdings of anyone obligor, national banks
may invest in state and local obligations
(that are not general obligations) and
municipal revenue bonds. 12 U.s.c. §
24(seventh); 12 c.r.R. §§ 1.2 and 1.3.
Sallle as national banks. 12 U.s.c. §§
1464(c)( I )(C) and (H).
Similar to national banks. Federal credit
unions face various regulatory limitations.
12 U.s.c. §§ I 757(7)(B) and (K); 12 C.F.R.
§§ 703.100 and 703.110.
Without limit, national banks may invest in
the securities of Fannie Mae, Freddie Mac,
the FIILBank System, and Ginnie Mae. 12
U.s.c. § 24(seventh); 12 C.F.R. §§ 1.2 and
1.3.
Same as national banks. 12 U.s.c. §§
1464(c)(I)(D), (E), (F), (M), (N), and
(P); 12 C.F.R. § 566. I (g)(3).
Same as national banks. 12 U .S.c. §
1757(7)(E).
OCC/FD IC/FRB
of the bank. 12 U.s.c. § 24(seventh); 12
C.F.R. §§ 23.20 and 23.21.
Under separate statutory authority, national
banks may engage in lease financing (with
minimum lease periods of90 days) up to a
limit of 10% of assets. 12 U.s.c. §
24(tenth); 12C.F.R. §§23.10-23.12.
National banks may purchase and lease
real estate only under special
circumstances, such as the purchasing and
leasing of municipal buildings. 12 C.F.R.
~ 7.1000 and part 23.
Investments
II s.
t:0\
lTnllll'nt
and ,tate and
~ecllritl\:'i
local
~ecllritie'i
Government-sponsored
enterprise securities
47
Rule
Residential mortgagebacked securities
OCC/F)) I C/FRB
Without limit, national banks may invest in
securities issued or guaranteed by Fannie
Mac, Freddie Mac, Ginnie Mac, or any
U.S. agency, and in privately issued
mortgage-backed securities if rated in one
of the two highest rating categories. 12
U.s.c. § 24(seventh); 12 C.F.R. §§ 1.2 and
OTS
NCVA
Same as national banks. 12 U.S.c. §§
1464(c)(I)(E), (F), and (R).
Generally, federal credit unions may invest
in mortgage-backed securities. However,
they may not invest in stripped mortgagebacked securities, residual interests in
CMOs/REMICS, or commercial mortgagerelated securities, unless issued by certain
government sponsored enterprises. 12
U.S.c. § 1757(7); 12 C.F.R. § 703.110(c).
1.3.
Other asset-backed
securities
Subject to a 25%) of capital limit on the
holdings of anyone obligor, national banks
may invest in non-residential asset-backed
securities (P.q .. securities backed by credit
card. auto loan'\. or small husiness loans).
1211.SC. ~ 2..the\enth); 12CF.R. ~~ 1.2
and 11
Federal savings associations may invest
in small business related securities (i.e.,
securities rated in one of the four
highest rating categories that represents
an interest in loans or leases of personal
property evidencing the obligations of a
sillall husiness. 12 U.s.c. §
14M(c)( I )(S).
Federal savings associations may also
invest in commercial real estate
mortgage-hacked securities. 12 U.s.c.
§ 1464(c)( I )(R).
Federal credit unions may invest in such
securities if issued by certain government
sponsored enterprises. 12 U .S.c. § 1757(7).
I'.lutual fund ,hare,
National han", lI1a~ purchase for their own
account ,hares in mutual funds, provided
the national hank complies with certain
investment limitations that would be
applicable to the underlying investments of
the mutual fund portfolio. 12 U.s.c. § 24
(seventh); 12 C.F.R. § 1.4(e).
Federal credit unions may invest without
limit in any mutual fund that may itself
invest in assets and engage in transactions
permissible for a federal credit union. 12
C.F.R. § 703.1 OO(d).
Corporate debt
securities
National banks may invest in corporate
debt under certain limited conditions.
Among other things, such debt must be of
investment grade and exposure to anyone
issuer may not exceed 10% of the bank's
capital. 12 U.s.c. § 24(seventh); 12
C.F.R. §§ 1.2 and 1.3.
Federal savings associations may
purchase for their own accounts,
without limit, the shares of any
registered open-end mutual fund,
provided the fund invests exclusively in
assets that federal savings associations
may hold without limitation. 12 U.s.c.
§ 1464( c)( I )(Q).
Federal savings associations may invest
in corporate debt. Among other things,
such debt must be rated in one of the
four highest rating categories by a
national statistical rating organization,
and may not exceed 35% of the
institution's assets when combined with
48
Federal credit unions may invest in zero
coupon bonds, provided that they mature no
later than 10 years after the settlement date.
12 C.F.R. § 703.110(d).
Rule
NCVA
OTS
OCC/FDIC/FRB
commercial paper and consumer loans.
12 U.s.c. §§ 1464(c)(I)(M) and
(c)(2)(0), and 183Ie(d); 12 C.F.R. §
560.40.
Affiliates 7
Operating subsidiary
National banks may establish or acquire
operating subsidiaries, which may engage
only in activities that the national bank
may engage in directly. The bank must
own more than 50°'(, of the voting stock of
its operating subsidiary or other.vise
controls the subsidiary. 12 CF.R. § 5.34.
Substantially the same as national
banks. 12 C.F.R. §§ 559.3(c) and
(e)( I).
Federal credit unions may own as a
subsidiary or jointly with others a credit
union service organization (CUSO). Federal
credit unions may only invest up to I % of
their capital in such entities, 12 U.s.c. §
1757(7)(1), and may only lend an amount up
to I % of their capital to such entities. 12
U.S.c. § 1757(5)(0).
CUSOs may engage in a wide range of
activities, only some of which a federal
credit union may engage in directly.
However, all CUSO activities must be
approved by the N C U A Board. 12 u.s. c. §
1757(5)(0). Therefore, CUSOs may engage
only in those activities specifically permitted
in regulation. Any additional activities
require an amendment to the regulation. 12
C.F.R. § 712.7. CUSO activities include
providing A TM services, data processing,
securities brokerage, insurance agency, travel
advisory service, financial consulting. and
personal property leasing. 12 C.F.R. § 712.5.
Service companies or
corporations
National banks may invest up to 10% of
their capital in anyone service company
Federal savings associations may invest
up to 2% of their assets (and in some
CUSOs may engage in some of these
activities, but generally may not engage in
7 Federal credit unions cannot be owned by a holding company, but may only exist in a cooperative form, 12 U.s.C
§ 1753, and they may not own
other depository institutions. 12 USC § 1757(7)(1). Therefore. the discllssion of affiliates does not include holding companies.
49
Rule
OCC/FD I C/FRB
and no more than 5% of their assets in all
such companies, after giving notice to the
ace.
Such companies may provide only to
depository institutions certain limited
services, such as check and deposit posting
and sorting, preparation and mailing of
checks and statements, and accounting
services, without being subject to approval
requirements and other limitations.
NCVA
OTS
cases, up to 3%) in service corporations
engaged in any activity reasonably
related to the activities of federal
savings associations. Such activities
include real estate development, real
estate management for third parties,
and selling insurance on an agency
basis. 12 U.S.c. § 1464(c)(4)(B); 12
C.F.R. § 559.4.
If a state and a national bank jointly own
the company, the company may only
pro\ ide those products and serv ices that
the state and national banks both could
provide. Ilowever, the company may not
accept deposits.
In ~ef\ ing an~ ClI\tOl1lers, including
depository institutions, a company may
engage in an~ nonbanking activity (with
the appro\ al of the Federal Reserve and
subject to certain other limitations) that the
Federal Reserve has detenn ined to be so
closely related to banking (for a bank
holding company or its subsidiary) or to
managing or controlling banks as to be a
proper incident thereto (under section
4(c)(8) of the Bank Holding Company
Act). Such activities include securities
brokerage, owning a savings association,
financial advisory services, acting as a
futures commission merchant,
underwriting and dealing in government
obligations, and engaging in insurance
brokerage pursuant to the town of 5,000
50
I 4(c)(8) activities.
12 C.F.R. § 712.5.
Rule
OTS
OCC/FDIC/FRB
NCVA
authority. 12 U.S.c. § 1861 et seq.; 12
C.F.R. § 5.35.
Financial subsidiary
A well capitalized and well managed
national bank may control or invest in a
tinancial subsidiary, subject to certain
other limitations and safeguards. A
financial subsidiary may engage: (I) in
any activity closely related to banking (as
determ ined under section 4( c)( 8) of the
Bank Holding Company Act); (2) in any
activity in the United States that a bank
holding company may engage in outside of
the United States; and (3) in the
underwriting. distributing. and dealing in
orall t)pes of securities; (4) in selling
in,urance nat ionwide: and (5) in any
activit) that the I reasury. in consultation
\\ ith the Federal Reserve. determines to be
linancial in nature or incidental to a
linancial activity. Financial subsidiaries
may also engage in activities permissible
for operating subsidiaries. 12 U.s.c. §
24a; 12 C.F.R. § 5.39.
Transactions with
affiliates
Specific limits apply to certain covered
transactions between a bank and its
affiliated companies (e.g., loans;
guarantees; and other extensions of credit
to, and purchases of assets from, those
companies). Such transactions with any
one affiliate may not exceed 10% of the
bank's capital. Such transactions with all
affiliates may not exceed 20% of capital.
Generally, high-quality collateral must
fully secure all such transactions. 12
U.s.c. § 371c.
I See service companies above.
Same as national banks. 12 U.s.c. §
1468(a).
In addition, a savings association may
not make any extension of credit to any
affiliate engaged in activities not
permissible for a bank holding
company. 12 U.S.c. § 1468(a)(I)(A).
51
No similar provision.
Federal credit unions do not have affiliate
transaction restrictions similar to those
applicable to other depository institutions.
However, a specific contlict of interest
provision prohibits a person who serves as a
credit union official or in senior
management, or any immediate family
members, from receiving any compensation
from a CUSO. All transactions with the
organization must be conducted at arm's
length. 12 C.F.R. § 712.8.
OCC/FDIC/FRO
Rule
OTS
NCUA
A federal credit union may invest up to I
percent of its total paid-in and unimpaired
capital and surplus in a CUSO. 12 U.S.c. §
1757(7)(1). In addition, a credit union may
lend another I percent of its total paid-in and
unimpaired capital and surplus to a CUSO.
12 U.S.c. § 1757(5)(0). According to the
NCUA, unimpaired capital includes deposits,
less any losses that may have been incurred
for which there are no reserves or which
have not been charged against undivided
earnings. Federal Credit Union Bylaws,
Article XVIII, Section I(g).
Most transactions between a bank and its
affiliates must also be conducted at arm's
length. 12 u.s.c. § 371 c-1. These
statutory provisions also apply to statechartered non-member banks. 12 U.S.c. §
18280). Affiliates in this context do not
generally include bank subsidiaries.
However, these affiliate restrictions do
apply to transactions between banks and
their" financial subsidiaries," subject to
certain exceptions. 12 LJ.s.c. § 371 c(e).
Safety and Soundness Rules
t--
Capital
Definition of capital
lotal capital consi~ts of core capital (Tier
and ~lIppkmentary capital Crier 2).
I)
Tier I capital includes common stock,
noncumulative perpetual preferred stock,
and minority interests in the equity
accounts of consolidated subsidiaries.
Similar. but with some minor
variations. 12 C.F.R. part 567. For
example, in the case of mutual savings
associations, Tier I capital also
includes certain nonwithdrawable
accounts and pledged deposits. 12
C.F.R. § 567(a)(iv).
Tier 2 includes cumulative perpetual
preferred stock, the allowance for loan and
lease losses. and hybrid instruments that
combine debt and equity features. Tier 2
also includes subordinated debt and limited
amounts of unrealized gains on equity
securities.
Deductions from capital include goodwill
52
Credit union capital consists of" net worth,"
that is, retained earnings, as determined
under generally accepted accounting
principles. For low-income designated credit
unions only, "net worth" includes uninsured
secondary capital accounts. which are
subordinate to the claims of creditors,
shareholders, and the National Credit Union
Share Insurance Fund. 12 U.S.c.
§ 1790d(o)(2). This statutory definition of
"net worth" reflects that credit unions are
not-for-profit entities that lack the means to
raise capital available to other federallyinsured depository institutions, for example,
by selling shares to the public.
Rule
OTS
OCC/FDIC/FRS
NCUA
and other intangibles and investments in
certain subsidiaries. 12 C.F.R. part 3, app.
A (OCC); 12 C.F.R. part 325, app. A
(FDIC); 12 C.F.R. part 208, app. A (FRB).
Capital adequacy
Banks must meet two minimum capital
requirements: (I) a minimum leverage
ratio, generally requiring 4% Tier I capital
to total assets; and (2) a total risk-based
capital ratio of 8% capital to risk-weighted
assets. 12 C.F.R. part 3, app. A (OCC); 12
C.F.R. § 325.103(b)(2) (FDIC); 12 C.F.R.
§ 208.43(h)(2) (FRB).
Savings associations must generally
meet the same basic capital
requirements as banks. 12 U.S.c. §§
1464(t)(I)(C), (2)(C); 12 C.F.R. §
567.5.
I hl: ri\k-ha\l:J ~~ \km a~signs l:ach class of
a ri,k \\ l:ight 010 0 o. 2(J°o, 50° 0, or
100° 0 I hl: 0° 0 l<lkgor~ incllllks aSSl:t~
,ul'h .. , (;I,h and dirl:cl claims on OECD
g(l\l:rJlml:nh (.> 'I 'l:l'urltil:')' Thl: 20°0
t.lkg(\r~ IIlliudl:' 11l0,t l''''illl\ on hanks
and 'l:UlrJllL', 1\\Ul:d h~ thl: kdl:ral
g(l\ l:n1IllL'nt or ih agl:lll'il:s that are not
hal'kl:d h~ Ihl: Iulliailh and crl:dit ofthl:
United Statl:s. rill: 50° ° category includes
sOllle types of mortgage loans and certain
mortgage-hacked securities. A Iso includes
most derivative transactions. The 100%
category-the standard risk categoryincludes typical commercial loans. Offhalance sheet items are also factored into
the four risk categories. 12 C.F.R. part 3,
app. A (OCC); 12 C.F.R. part 325, app. A
(FDIC); 12 C.F.R. part 208, app. A (FRB).
a~\l:h
To be "adequately capitalized," a credit
union must maintain net worth of at least 6%,
as measured by the ratio of net worth to total
assets. 12 U.s.c. § 1790d(c)(1)(B). This
statutory framework prescribes five net
worth categories (i.e., well capitalized,
adequately capitalized, undercapitalized,
significantly undercapitalized, and critically
undercapitalized). 65 Fed. Reg. 8,584 (Feb.
18,2000) (to be codified at 12 C.F.R. part
702).
To be "well capitalized," a credit union must
have at least 7% net worth. Credit unions
that have a net worth ratio of less than 7%
are required, on a quarterly basis, to set aside
quarterly as net worth an amount equal to at
least 0.1 % of their total assets. 12 U.S.c.
§ 1790d(e)(I); 65 Fed. Reg. 8,586 (Feb. 18,
2000) (to be codified at 12 C.F.R. §
702.20 I (a».
A risk-based capital requirement applies to
credit unions that meet the definition of a
complex credit union (i.e., any credit union
with more than $10 million in assets and
whose risk-based net worth requirement
exceeds 6%). 65 Fed. Reg. 44,950 (luI. 20,
2000) (to be codified at 12 C.F.R. part 702).
The risk-based requirement takes into
account material risks against which the 6%
Tier 2 capital may count toward meeting
the 8~o risk-based capital requirement, but
only up to 50% of the total capital
53
Rule
OTS
OCC/FD I C/FRB
NCVA
net worth ratio, the level required to be
adequately capitalized, does not provide
adequate protection. 12 U.S.c. § I 790d(d).
requirement. Id.
To determine whether a credit union is
complex, it must calculate its risk-based net
worth requirement by combining eight riskbased components, each consisting of a risk
portfolio multiplied by a corresponding risk
factor.8 A credit union whose net worth ratio
does not meet its risk-based requirement has
the option of substituting three specific riskbased components with any of three
corresponding alternative components that
may reduce its risk-based requirement.
----~----~
RI:~IJlator~
capital
Prompt corrective
action
No
~111111<lf allthorit~
All FDIC-insured depository institutions
are subject to a regulatory system of
prompt-corrective action: a set of statutory
provisions aimed at resolving capital
deficiencies before they grow into large
problems. The system classifies depository
institutions into five capital categories (i.e.,
well capitalized, adequatelycapitalize9~
No similar authority.
Federal credit unions serving predominantly
low-income members may offer uninsured
regulatory capital accounts to businesses and
organizations, whether they are members or
not. Such capital must be issued for at least
five years, may not be redeemable prior to
maturity, must be subordinate to all other
claims, and must be available to cover losses.
12 C.F.R. §701.34.
Same as national banks. 12 C.F.R. part
565.
Similar to the rules of the banking agencies.
65 Fed. Reg. 8,560 (Feb. 18,2000) (to be
codified at 12 C.F.R. part 702).
I
I
--
8 For example, the total value of long-term real estate loans in excess of 25% of the institution's portfolio (i.e., real estate loans and lines of
credit-excluding member business loans and lines of credit-that will not mature or reprice within five years). 12 C.F.R. § 702.1 04(b).
54
Rule
OTS
OCC/FD I C/FRB
NCVA
undercapitalized, significantly
undercapitalized, and critically
undercapitalized). These capital categories
are defined in terms of four capital
measures: (I) a total risk-based capital
ratio; (2) a Tier I risk-based capital ratio;
(3) a leverage ratio; and (4) a statutory
tangible equity ratio of2%, below which a
bank is deemed to be critically
undercapitalized. To be well capitalized, a
bank must have a total risk-based capital
ratio of 10%, Tier I risk-based capital ratio
of 6%. and a leverage ratio of 5%. 12
U.s.c. § 18310; 12 C.F.R. part 6 (OCC);
12 C.F.R. part 325, suhpart B (FDIC); 12
C.F.R part 208. suhpart B (FRB).
I----
Alldif Rl.'ljllin:ml.'lII.,
(Jcneral audit
rcqu iremcnl5
AIIIDle-insurcd institutions must suhmit
annual rcports to their appropriate federal
hanking regulator on their financial
condition and management. 12 U.s.c. §
1831 m(a).
Same as national banks. 12 U.s.c. §
1831 m(a).
A credit union's board of directors must
appoint a supervisory committee. 12 U.S.C.
§ 1761 b(5). The supervisory committee
must conduct, or hire competent parties to
conduct, an annual audit, depending on the
credit union's size. The supervisory
committee must also verify that the
institution's financial statements accurately
and fairly represent the institution's financial
condition and that management practices and
procedures sufficiently protect member
assets. 12 U.s.c. § 1761 d; 12 C.F.R.
§§ 715.3 and 715.4.
Independent audit
requirements
Each large FDIC-insured institution must
establish an independent audit committee
and obtain an annual independent audit of
Same as national banks. However, the
OTS also requires any savings
association with an unsatisfactory
Similar with respect to credit unions having
assets of$500 million or more. If a credit
union with more than $10 million in assets,
55
Rule
OCC/FD I C/FRB
OTS
NCUA
its financial statements by an independent
public accountant in accordance with
generally accepted auditing standards.
12 U.s.c. §§ 1831 m(d), (g)( I). This
requirement does not apply to institutions
with less than $500 mill ion in assets. 12
C.F.R. §§ 363.1 et seq.
CAMEL rating (3, 4, or 5) to obtain an
independent audit. 12 C.F.R.
§ 562.4(b)(I).
but less than $500 million, chooses to obtain
a financial statement audit, the audit must be
performed in a manner consistent with the
accountancy and licensing laws of the
appropriate jurisdiction. 12 U.S.c.
§ 1782(a)(6)(D); 12 C.F.R. part 715.
Frequency of safety and
soundness examinations
A II FDIC -insured institutions, must
generally be examined at least once each
year. However, an 18-month examination
c)clc is permissiblc for certain healthy,
\\cll-capitalilcd and well managed
institutions "ith less then $250 million in
asscts. 12 1l.S.C. § 1820(d).
Same as national banks.
Liquidity
Depository institutions may obtain
emergency liquidity from the Federal
Reserve discount window, as well as shortterm adjustment credit or longer-term
seasonal credit. 12 C.F.R. part 201.3 and
§§ 347a and 347b.
Same as national banks. Savings
associations must also comply with
separate statutory liquidity
requirements. 12 U.S.c. § 1465.
No statutory annual examination requirement
applies, but since 1985 the NCUA has had a
policy of exam ining federal credit unions
annually, and allowing exceptions only with
the approval of the agency's Executive
Director. Federally insured state-chartered
credit unions are examined by their
chartering state at least once every 18
months. If these institutions are troubled,
however, they may be examined every 120
days either by the NCUA alone or jointly by
the NCUA and the state. NCUA, Examiner's
Guide (Alexandria, VA: NCUA, 1996).
Same as national banks. Credit unions can
also obtain liquidity from the Central
Liquidity Facility and from corporate credit
unions. 12 U.S.c. §§ 1795-1795k; 12 C.F.R.
parts 725 and 704.
Miscellaneous
The NCUA recently provided general
guidance to federal credit unions concerning
both balance sheet liquidity management and
contingency funding. Letter to Credit
Unions 00-CU-13.
Change in offic ials
An FDIC-insured institution that does not
Same as national banks. 12 U.s.c.
56
Similar to national banks. Regional
Rule
OTS
OCC/FDIC/FRB
meet its capital requirement or is otherwise
in troubled condition must notify its federal
regulator of any new senior executive
officer or board member at least 30 days
before such additions become effective.
Notice must also be given if the agency
determines it is appropriate in connection
with its review of a plan required under the
prompt corrective action provisions of 12
USc. § 1831 i. The regulator then may
disapprove the new addition before the end
of the notice period. 12 USc. § 1831i.
I § 1831 i.
NCVA
directors, who have delegated authority to
approve or disapprove changes, must comply
with slightly different time frames. 12
C.F.R. § 701.14. In addition, the notification
of such personnel changes must be made if
the institution has been chartered for less
than two years. 12 U.S.c. § 1790a.
Bond coverage
A II officers and employees of a national
bank must have adequate fidelity coverage.
I::! CF.R. ~ 7.::!013.
Each savings association must maintain
fidelity bond coverage for each
director, officer, employee, and agent
who has control over or access to cash,
securities, or other property of the
savings association. I::! C.F.R.
§ 563.190.
Federal credit union employees and officials
must be covered by fidelity bonds. In
addition, federal credit unions must have
general insurance to cover losses due to
vandalism, theft, holdups, etc. 12 U.S.c. §§
1761a, 176Ib(2), 1766(h); 12 C.F.R. part
713, § 741.201.
Management interlocks
rhe Depository Institution Management
Interlocks Act prohibits a management
official from serving two nonaffiliated
depository institutions where such
management interlocks would be anticompetitive. 12 U.S.c. § 3201 el seq.; 12
C.F.R. part 26 (OCC); 12 C.F.R. part 348
(FDIC); 12 C.F.R. part 212 (FRB).
Same as national banks. 12 C.F.R. part
563f.
Similar to national banks. However, the
statute exempts interlocking arrangements
between two credit unions and, therefore, in
the case of credit unions, only restricts
interlocks between credit unions and other
depository institutions. 12 U.S.c. § 3204(3);
12 C.F.R. § 711.4(c).
Enforcement
Bank Secrecy Act
The Bank Secrecy Act (BSA) requires
financial institutions to file reports and
records of certain transactions where they
may have a high degree of usefu Iness in
Same as national banks. 12 C.F.R. §
563.177.
57
Same as national banks, except that the
NCUA has also promulgated guidelines for
BSA compliance. 12 C.F.R. part 748.
Rule
OCC/FDIC/FRB
NCVA
OTS
criminal, tax, or regulatory investigations
or proceedings. 31 U.s.c. § 5311 et seq.
The Treasury Department promulgates
regulations concerning the BSA that apply
to all financial institutions. Id Each
federal bank ing regu lator has
promulgated regulations to ensure BSA
compliance. 12 C.F.R. part 21, subpart B
(GCC); 12 C.F.R. part 326, subpart B
(FDIC); 12 C.F.R. § 208.63.
Cease and desist orders
If a bank or an institution-affil iated party
has engaged or will engage in an unsafe or
unsound practice or violate a statute,
regulation. written agreement, then the
regulator may iS~lIe a notice of charges
\tating the alleged violation and setting a
time for a hearing to determine if the
agency ~hollid i\\lIe a cease-and-desist
order. The hearing must occur 30 to 60
da~s atilT the notice is issued. 12 U.s.c. §
1818(b)( I)
Same as national banks. 12 U.S.c. §
1818(b)(I); 12 U.s.c. §§1818(b)(6)-
Same as national banks. 12 U.s.c. §
I 786(e)( I).
(7).
The remedies sought in the order may limit
an institution·s activities or functions or
require the institution to take affinnative
action to address the problems cited in the
order (e.g, restitution, growth restrictions,
disposition of loans or assets, and hiring
qualified officers or employees). 12
U.s.c. §§ 1818(b)(6)-(7).
Temporary cease-and-
If the regulator determines that the activity
I Same as national banks.
12 U.s.c. §
Same as national banks. 12 U.S.c. §§
9 Institution-affiliated parties include: directors, officers, employees, and agents of the institution; anyone who has or is required to file a change-incontrol notice; a shareholder, joint venture partner, or consultant who participates in the conduct of the institution's activities; and any independent contractor
who knowingly or recklessly participates in any violation of statute or regulation, any breach of fiduciary duty, or any unsafe or unsound practice which has or
may hann the institution in a significant fashion. 12 U.s.c. § 1813(u).
58
Rule
OTS
OCC/FDIC/FRB
NCVA
desist order
covered in a notice of charges may weaken
the bank or compromise its depositors
before the proceedings described above
can be completed, it can issue a temporary
cease-and-desist order, which becomes
effective immediately and remains
effective until the issue has been resolved.
12 U.s.c. § 1818(c)(I).
1818( c)( I ).
1786( e )(3 )-( 4), (f)(1).
Permanent cease-anddesist order
After a hearing on a notice of charges, the
regulator may issue a permanent ceaseand-desist order against the bank. The
order becomes effective 30 days after
issuance (except that a consensual order
hecome'i effective immediately). 12
lJSC ~~ 1818(h)(I)-Cn
Same as national banks. 12 U.S.c. §§
1818(b)( I )-(2).
Same as national banks. 12 U.s.c. §§
I 786(e)( I )-(2).
Renlll\ al and
prohihition allthllrlt~
I Same as national hanks. 12 U.s.c. §
I f the re~lIl,ltor detlTmllles that an
1818(e)( I); 12 U.s.c. §§ 1818(e)(3)lI1\titutilllhlllill;ltl'd pat1~ ha'i. directly or
(4)
1I1lhrectl~. ~'n~aged In prohihited practices.
the r~'~lIlatllr ma~ permanently remove the
p;It1~ from office or prohihit the party from
an~ further pat1icipation in the affairs of
an~ il1\llred depository institution.
Prohibited practices include violations of
statutes, regulations, cease-and-desist
orders. and written conditions or
agreements; unsafe or unsound practices;
and breaches of fiduciary duty. Such
actions must also: (I) harm or threaten to
hann the institution, prejudice or
potentially prejudice depositors, or result in
financial gain to the party; and (2) involve
dishonesty or demonstrate willful or
continuing disregard for the institution's
safety and soundness. 12 U.s.c. §
1818(e)( I). A notice of intent to remove or
prohibit must describe the charge and set a
hearing date that must occur 30 to 60 days
59
Similar to national banks. 12 U.s.c. §§
1786(g)(I), (3), (4).
Rule
OTS
oeC/FDIC/FRB
NCVA
alier issuance. If appropriate, the regulator
may suspend the party before the hearing
until the matter is resolved. 12 U.s.c. §§
I 818( e)(3 )-( 4).
Civil money penalties
For violations of statute or regulation,
permanent or temporary orders, or written
conditions or agreements, the regulator
may require an institution, or a person
affiliated with the institution, to pay a civil
money penalty of up to $5,000 for each
day the violation continues. The agency
may impose a penalty of up to $25,000 a
da~ for ~uch \iolation~. or for recklessly
l'ngaging III an un~are or unsound practice.
or hrl'adll'\ of a fiduciary duty. if those
ach (I) arl' rar1 of a rattl'rn of
IllI\lllllduct. (2) <lrl' Ilkl'l~ to came the
IIhtltlitlon a \I~nlticant lo\~: or 0) re~ult in
tinanll,d ~,lln to thl' rl'r\on committing the
;ll"I II thl' ;1I:h dl'\crihl'J ahme are
cOlllllllttL'd krlll\\ 1Il~:I~. thL' Jaily tine may
hL' lIr to S I million for inJiviJuals or the
IL'\,L'r ot S I III iIlion or 10 0 of assets for
institution~. 1211.S.C. ~~ 1818(i)(I).
Same as national banks. 12 U.S.c. §§
1818(i)( I), (2)(A)-(0).
Same as national banks. 12 U .S.c.
§§ 1786(k), (2)(A)-(0), (H).
(2)(;\ )-( \).
Consumer Protection
Truth in Savings Act
The Truth in Savings Act (TISA) requires
depository institutions to disclose in a
standard form the terms of deposit
accounts so that customers can
meaningfully compare these terms across
institutions. 12 U.s.c. § 430 I et seq.
Depository institutions must also disclose
to their existing customers changes in the
Same as national banks. 12 U.S.c. §
4305( c).
60
Same as national banks. 12 U.s.c. § 4305( c).
Rule
OTS
OCC/FDIC/FRB
NCVA
temls of deposit accounts. 12 U.s.c. §
4305(c).
Truth in lending Act
Equal Credit
Opportunity Act
liSA directs the Federal Reserve to
promulgate regulations applicable to banks
and savings associations, but permits the
other regulators to promulgate rules for
enforcing T1SA. 12 U.S.c. § 4308(a); 12
C.F.R. part 230.
Same as national banks. 12 U.S.c. §
4308(a); 12 C.F.R. part 230.
The Truth in lending Act (TllA) requires
creditors to disclose the cost and terms of
credit to promote the informed use of
credit by consumers, establishes remedies
for consumers injured by violations of the
law, and provides a process for resolving
billingdi~putes. 15lJ.s.C. § 1601 elsc(f.:
12 C.IK § 2261(b)
Same as national banks. 15 U.s.c. §
1601 elseq.; 12C.F.R. §226.I(b).
IlIA dlreU,> the I'ederal Reserve to
promulgate regulations, but permits the
other regulators to promulgate rules for
enforcing lILA. 15 U.s.c. § 1604. The
regulations of the Federal Reserve apply to
all creditors, including credit unions. 15
u.s.c. § 1602(1).
Same as national banks. 15 U.s.c. §
1602(1).
Same as national banks.
The Equal Credit Opportunity Act (ECOA)
seeks to ensure the availability of credit to
all creditworthy applicants regardless of
race, color, religion, national origin, sex,
marital status, or age. ECOA achieves this
end by directing creditors to notify
appl icants of action taken on their
appl ication, and by retain ing records of
credit applications. 15 U.s.c. § 1691 el
scq.: 15 C.F.R. § 202.I(b).
Same as national banks. 15 U .S.c. §
1691 elseq.; 12C.F.R. §202.I(b).
Same as national banks. 15 U.S.c. §
169Ic(a)(I)(C)(3); 12 C.F.R. § 701.31.
61
TISA directs the NCUA to promulgate rules
"substantially similar" to those promulgated
by the Federal Reserve. 12 U .S.c. § 4311;
12 C.F.R. part 707. Non-automated credit
unions have been exempted from TISA. 12
U.S.c. § 4313(6).
Same as national banks. 15 U .S.c. § 160 I el
seq.; 12 C.F.R. § 226.I(b).
15 § 1602(0.
Rule
OCC/FDIC/FRB
OTS
NCUA
ECOA directs the Federal Reserve to
promulgate regulations applicable to all
creditors, including credit unions, but
permits the other regulators to promulgate
rules for enforcing [COA. 15 U.s.e. §§
169Ia(e), 1691b; 12 C.F.R. part 202.
Fair Debt Collection
Practices Act
Electronic Fund
Transfer Act
L -_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
~
The Fair Debt Collection Practices Act
(FDCPA) seeks to eliminate the abusive
practices of debt collectors. 15 U.s.c. §
1692(e). FDCPA achieves this end by,
among other things, regulating the ability
of the debt collector to communicate with
consumers. hy circumscribing the manner
in \\hich deht collectors may obtain
information from consumers, prohibiting
hara~~ment h: deht collectors, and by
providing a procedure within which
con\lImers may dispute the validity of a
deht. I:' ll.S.C ~ 1692 l'I seq.
Same as national banks. 15 U.S.e. §
1692 el seq.
I he lederal I rade Comm ission generally
en forces the FDCI' A \\ ith respect to
nonhan" institutions, I:' lI.s.e. § 1692I(a),
while the federal depository institution
regulators enforce it with regard to their
regulated entities. 15 U.s.e. § 16921(b).
Same as national banks. 15 U.s.e. §
1692I(a); 15 U.s.e. § 16921(b).
The Electronic Fund Transfer Act (EFTA)
establishes the rights, liabilities, and
responsibil ities of participants in electronic
fund transfer systems (e.g, telephone,
ATM. or computer transactions). 15
liSe. § 1693.
Same as national banks. 15 U.S.e. §
1693.
The Federal Reserve promulgates EFTA
regulations applicable to any financial
institution that holds an account belonging
Same as national banks. 15 U.S.e. §§
1693b(a), 1693a(8); 12 e.F.R. part 205.
62
Same as national banks. 15 U.S.c. §
16921(b)(3 ).
Same as national banks. 15 U.s.e. §
1693a(8).
Rule
OTS
OCC/FDIC/FRB
NCVA
to a consumer or issues an access device
and agrees to provide EFT services. The
Federal Trade Commission generally
enforces the EFTA with respect to nonbank
institutions, while the federal depository
institution regu lators enforce it with regard
to their regulated entities. 15 USc. §§
1693b(a), 1693a(8); 12 C.F.R. part 205.
Home Mortgage
Disclosure Act
The Home Mortgage Disclosure Act
(HMDA) requires certain lenders to collect
loan data to detennine, among other things,
whether financial institutions serve the
housing needs of their areas and to identify
possible discriminatory lending practices.
I::! USC ~ ::!801: I::! crR. ~ ::!03.I(b).
Same as national banks. 12 USc. §
2801; 12 C.F.R. § 203.I(b);
Same as national national banks. 12 U .S.c. §
2801; 12 C.F.R. § 203.I(b);
hnancial institutions Illust report to their
~uper\ i~or: agency data about home
pun:hase and home improvcmcnt loans
thc) originatc or purchase, or for which
Same as national banks. 12 USc. §
2803; 12 C.F.R. § 203.I(c).
Same as national banks. 12 USc. § 2803;
12 C.F.R. § 203.I(c).
Same as national banks. 12 U.S.c. §
2803(f); 12 C.F.R. § 203.I(d).
Same as national banks. 12 USc. § 2803(f);
12 C.F.R. § 203.1 (d).
Same as national banks. 12 USc. §
2802; 12 C.F.R. § 203.2(e).
Same as national banks. 12 USc. § 2802;
12 C.F.R. § 203.2(e).
Same as national banks. 12 U.S.c. §
2804(a).
Same as national banks. 12 U.S.c. § 2804(a).
thc) rccci\c applications. 12 USc. §
::!803: 12 C.F.R. ~ ::!03.I(c).
Based on these data, the Federal Financial
Institutions Examination Council prepares
disclosure statements illustrating lending
patterns by area, age of housing stock,
income level, race, and sex. 12 U.S.c. §
2803(f); 12 C.F.R. § 203.I(d).
HMDA generally applies to banks, savings
associations, credit unions, and certain
mortgage banks. 12 U .S.c. § 2802; 12
C.F.R. § 203.2(e).
HMDA directs the Federal Reserve to
promulgate any necessary regulations. 12
63
OTS
OCC/FDIC/FRB
Rule
NCUA
U.s.c. § 2804(a).
Community
Reinvestment Act
Consumer
I.~asing.
Au
The federal depository institution
regulators enforce the statute for those
institutions they oversee. 12 U.s.c. §
2804(b).
Same as national banks. 12 U.S.c. §
2804(b).
Same as national banks. 12 U.S.c. § 2804(b).
The Community Reinvestment Act (CRA)
encourages insured depository institutions
to help meet the credit needs of the local
communities in which they are chartered.
12 U.s.c. § 2901(b). Each federal banking
agency maintains regulations applicable to
th~ institutions th~y ov~rs~e. 12 U.s.c. §
2905.
Same as national banks. 12 U .S.c. §
2901(b).
Federal credit unions are not subject to CRA.
However, a recent NeUA regulation requires
any federal credit union expanding,
converting to, or chartering a community
credit union to prepare a written plan for
serving its entire community. Existing
community credit unions are expected to
have their plans in place by December 31,
200 I. 65 Fed. Reg. 64,512 (Oct. 27, 2000).
Same as national banks. 15 u.s.c. § 16671667c; 12 C.F.R. § 213.I(b).
Ih~ Consum~r 1.~;I';ing
Au (CLA) requires
leasing p~rsonal property kg. cars.
rurnitur~. or arplianc~) to disclos~ in a
uniforlll Illann~r th~ terllls of th~ I~as~.
I h~ CI.A appli~s to I~as~s ~xc~~ding four
Illonths. Ih~ ("LA also r~quir~s advertised
leas~ t~rlllS to b~ accurate. and it limits the
amount of an} balloon payments in
consumer lease transactions. 15 USc. §§
1667-1667c; 12C.F.R.§213.I(b).
Same as national banks. 15 U.s.c. §
1667-1667c; 12 C.F.R. § 213.I(b).
The Federal Reserve has the authority to
promulgate regulations concerning the
CLA. 15 U.s.c. § 1604(a).
Same as national banks. 15 U.S.c. §
1604(a).
Same as national banks. 15 U.s.c. § 1604(a).
The Expedited Funds Availability Act
(EFAA) provides schedules detailing when
depository institutions must make
deposited funds available for withdrawal
and requires the disclosure of funds
availability schedules. 12 U.s.c. § 4001 et
seq.; 12 C.F.R. part 229.
Same as national banks. 12 U.s.c. §
4001 et seq.; 12 C.F.R. part 229.
Same as national banks. 12 U.s.c. § 400 I
seq.; 12 C.F.R. part 229.
thos~
Expedited Funds
Availability Act
64
el
Rule
Privacy
OCC/FDIC/FRO
OTS
NCVA
The Federal Reserve has the authority to
promulgate regulations regarding the
EFAA. 12 U.s.C § 4008.
Same as national banks. 12 U.s.C §
4008.
Same as national banks. 12 U .S.C § 4008.
National banks must disclose their privacy
policies and practices, including their
sharing of customer information with
affiliated and non-artiliated entities.
Before sharing consumers' non-public
personal information with non-affiliated
third parties, banks must provide
consumers with an opportunity to "opt
out." However, banks may share consumer
information with service providers for such
purpo\e, a\ marlo..eting the institution's
prodUl.:h and ,en ices 1:\ lJ.s.c. § 6802.
Same as national banks. 15 U .S.C §
6802; 12 CF.R. part 573.
Substantially the same as national banks, 15
U.S.C § 6802; 12 CF.R, part 716.
The Real Estate Settlement Procedures Act
(RESPA) seeks to improve the disclosure
of settlement costs to home buyers,
eliminate kickbacks or referral fees that
may unnecessarily increase the costs of
certain settlement services, and reduce the
amount of funds home buyers must place
in escrow to cover real estate tax and
insurance costs. 12 U.s.C § 2601 et seq.
Same as national banks. 12 U .S.C §
2601 et seq.
seq.
The Department of Housing and Urban
Development, in consultation with the
Same as national banks. 12 U .S.C §
2603(a); 24 CF.R. § 3500.8.
Same as national banks. 12 U.S.C § 2603(a);
24 CF.R. § 3500.8.
I aeh lkpo\itor~ in\titution regulator bears
the rl'\pon\lhilll~ lor implementing and
l'ntorLing thl'\l' rl'quirl'ml'nh l'i II.S.C.
~~ IlXO-l and 6XO~
regulation, ha\ e been published by
the hanlo..ing regulator\. 12 c.r.R. part 40
(OCC); 12 C.F.R. part 332 (FDIC); 12
C.F.R. part 216 (FRB).
JOll1l
Real Estate Settlement
Procedures Act
65
Same as national banks. 12 U.s.C § 2601 el
Rule
OCC/FDIC/FRB
OTS
Department of Veterans' Affairs, the
FDIC, and the OTS promulgates
regulations prescribing the form in which
settlement costs must be disclosed. 12
U.s.C, § 2603(a); 24 C.F.R. § 3500.8.
Federal depository institution regulators
may enforce RESPA with respect to their
regulated entities. 24 C.F.R. § 3500.19.
66
NCVA
COMPARING CREDIT UNIONS WITH
OTHER DEPOSITORY INSTITUTIONS
UNITED STATES DEPARTMENT OF THE TREASURY
January 2001
The Honorable Paul S. Sarbanes
Chairman
Committee on Banking, Housing,
and Urban Affairs
U.S. Senate
Washington, D.C. 20510-6075
Dear Mr. Chairman:
I am pleased to transmit the Department of the Treasury's report on credit union regulation and
taxation, and on preserving the growth and viability of small banks. We prepared this report as
required by sections 401 and 403 of the Credit Union Membership Access Act of 1998.
In preparing this report, we compared the safety and soundness regulations governing credit
unions with those governing all other federally insured depository institutions. We also
compared the application of regulatory enforcement authority and federal consumer protection
laws across credit unions and all other federally insured depository institutions. Finally, we
compared the product offerings of these various institutions.
We reviewed the history of credit unions' exemption from the federal corporate income tax and
estimated the potential revenue that could be raised were Congress to remove the exemption.
We also reviewed the steps taken during this Administration to promote the viability of small
banks, and discuss the tax policy principles that go\'ern any expansion of Subchapter S
eligibility.
The report contains no recommendations.
Sincerely,
Lawrence H. Summers
Enclosure
[Identical letters sent to the Honorable Phil Gramm, the Honorable Max Baucus, and the
Honorable Charles Grassley]
The Honorable Michael G. Oxley
Chairman
Committee on Financial Services
u.s. House of Representatives
Washington, D.C. 20515-6050
Dear Mr. Chairman:
I am pleased to transmit the Department of the Treasury's report on credit union regulation and
taxation, and on preserving the growth and viability of small banks. We prepared this report as
required by sections 401 and 403 of the Credit Union Membership Access Act of 1998.
In preparing this report, we compared the safety and soundness regulations governing credit
unions with those governing all other federally insured depository institutions. We also
compared the application of regulatory enforcement authority and federal consumer protection
laws across credit unions and all other federally insured depository institutions. Finally, we
compared the product offerings of these various institutions.
We reviewed the history of credit unions exemption from the federal corporate income tax and
estimated the potential revenue that could be raised were Congress to remove the exemption.
We also reviewed the steps taken during this Administration to promote the viability of small
banks, and discuss the tax policy principles that govern any expansion of Subchapter S
eligibility.
The report contains no recommendations.
Sincerely.
Lawrence II. Summers
Enclosure
[Identical letters sent to the Honorable John LaFalce. the Honorable Bill Thomas, and the
Honorable Charles Rangel]
COMPARING CREDIT UNIONS
WITH OTHER DEPOSITORY INSTITUTIONS
SUMMARY
Credit unions are depository institutions that accept deposits and make loans. As of June
30,2000, there were 10,477 federally insured credit unions with $426.8 billion in assets.
Although the average credit union is small, with only $41 million in assets, those with more than
$50 million in assets hold more than 79 percent of all credit union assets, even though they
account for only 15 percent of all credit unions.
As a group, credit unions have grown larger in recent years and have expanded their
offerings of financial products and services. According to an industry survey, more than half of
all credit unions accept loan applications through the Internet. Moreover, more than 1 percent
provide stock brokerage services or sell mutual funds, albeit through a subsidiary.
°
Although they provide many of the same products and services as banks and thrifts,
credit unions have certain distinguishing characteristics. They are member-owned cooperatives.
with each member having one vote regardless of the amount ofa member's deposits. Moreover.
they do not issue capital stock; rather, they are non-profit entities that build capital by retaining
earnings. Finally, credit unions may serve only an identifiable group of customers with a
common bond (e.g., the employees of a particular firm, the members of a certain organization, or
the members of a specific community).
Federal Laws and Regulations
Despite their relatively small size and their restricted fields of membership. federally
insured credit unions operate under banking statutes and rules virtually identical to those
applicable to banks and thrifts. Significant differences have existed in the past but have been
gradually disappearing. Recently, most of the remaining major regulatory differences between
credit unions and other depository institutions were removed.
In 1998. Congress established net worth requirements for credit unions and directed the
National Credit Union Administration (NCUA) to promulgate prompt corrective action (PCA)
rules and risk-based net worth requirements for credit unions. Although the NCUA' s final rules
mirrored those applicable to other depository institutions in most respects. a few differences can
be noted. Each of these two rules contains a placeholder for the role that "regulatory capital"
could play should the NCUA authorizes it. Such "capital" would be uninsured. but would be
viewed as adding to the net worth available to a credit union to absorb losses. However, history
shows that uninsured depositors withdraw their funds at the first sign of financial difficulty. thus
rendering such funds unavailable to absorb losses and. in some cases. precipitating runs on
institutions. In addition, under the PCA regulation. the NCUA waived its right to take certain
statutorily authorized actions against undercapitalized credit unions, such as requiring a new
election of a credit union's board of directors.
We have identified only two other important differences. First, the NCUA's loans-toone-borrower restriction greatly exceeds the limit applicable to other depository institutions,
which is typically set at 15 percent of capital. The limit for credit unions stands at 10 percent of
net worth and 10 percent of deposits. Second, credit unions are exempt from the Community
Reinvestment Act (CRA), which requires that banks and thrifts serve all customers within their
geographic area. However, the NCUA recently promulgated a regulation requiring that any
credit union seeking to expand, convert to, or charter a community credit union would have to
prepare a written plan for serving its entire community.
At this time, we do not believe these differences raise any particular safety and soundness
or competitive equity concerns. Therefore, we offer no administrative or legislative
recommendations.
The Credit Union Tax Exemption
Historically, cooperative depository institutions were generally exempted from the
federal corporate income tax. For example, cooperative banks had always been exempt, whereas
state credit unions obtained an exemption in 1917. Federal credit unions have also always
enjoyed an exemption, one that stemmed from the cooperative character of federal credit unions
and the desire to tax them in a manner consistent with federal thrift institutions.
In 1951, however, Congress removed the thrift tax exemption because these institutions
had evolved into commercial bank competitors, and had lost their "mutuality," in the sense that
the institutions' borrowers and depositors were not necessarily the same individuals. Congress
determined that, under these circumstances, their tax exemption afforded them an unfair
advantage over commercial banks. Although it removed the thrift exemption, Congress left
intact the credit union exemption.
In directing the Treasury Department to study this issue, Congress asked us to analyze
"the potential effects of the application of ... Federal tax laws ... on credit unions in the same
manner as those laws are applied to other federally insured financial institutions." Thus, we
analyzed how much revenue might be raised by removing the exemption. We estimated that
between $13.7 billion and $16.2 billion would be raised oYer a ten-year period if all credit unions
were taxed.
Preserving Small Banks
The Administration has, throughout its tenure, taken substantial steps to preserve the
growth and viability of small banks. The Credit Availability Program (CAP), for example, was
unveiled by the President shortly after taking office in 1993. In the midst of a slow economic
recovery, the CAP updated certain important regulations, thereby curtailing regulatory burden on
banks and improving the availability of credit particularly to small and medium-sized
businesses, farms, and low-income communities. Other initiatives included streamlining
2
compliance with the Bank Secrecy Act, reducing regulatory burden, streamlining eRA rules. and
simplifying small bank capital standards. Believing that we have taken those actions best
tailored to preserving the growth and viability of small banks, we recommend no new policy
initiatives at this time.
Small banks have also benefited from the tax benefits of Subchapter S status. By the end
of 1999, more than 1.260 banks were operating as S corporations. These institutions represent
over 15 percent of U.S. banks, but only about 2 percent of banking assets, suggesting that smaller
institutions have been among the first to elect S corporation status. This strong response by
smaller banks suggests that Subchapter S offers considerable advantages in terms of more
favorable tax treatment and lower compliance burdens. If further policy changes are considered.
they should satisfy two broad requirements. First, any additional measures to simplify the tax
treatment of small banks must be crafted with a recognition that small businesses electing
Subchapter S status playa vital role in the U.S. economy, and that only a small number of these
firms are banks. Second, proposed modifications to Subchapter S must be evaluated with respect
to potential effects on the competitive environment faced by smaller banks.
CHAPTER 1
INTRODUCTION
The Credit Union Membership Access Act of 1998 (CUMAA) directed the Treasury to
study several depository institution issues. I Most of these concerned credit unions, but one
addressed the viability of community banks. This report presents the results of our study with
regard to sections 401 and 403 of CUMAA. A report on section 203, which required a study of
credit union member business lending, will be submitted under separate cover.
Section 401 requires the Treasury to evaluate:
the differences between credit unions and other federally insured financial institutions,
including regulatory differences with respect to regulations enforced by the Office of
Thrift Supervision, the Office ofthe Comptroller of the Currency, the Federal Deposit
Insurance Corporation, and the Administration: and
the potential effects of the application of Federal laws. including Federal tax laws. on
credit unions in the same manner as those laws are applied to other federally insured
financial institutions.
Under section 403, Congress directed Treasury to submit:
recommendations for such legislative and administrative action as the Secretary deems
appropriate, that would reduce and simplify the tax burden for insured depository
institutions having less than $1,000,000.000 in assets: and banks having total assets of not
less than $1,000,000,000 nor more than $10.000.000.000; and
any other recommendations that the Secretary deems appropriate that would preserve the
viability and growth of small banking institutions in the United States.
I. Credit llnion Characteristics
Like banks and thrifts. credit unions are depository institutions that accept deposits and
make loans. 2 Also like banks and thrifts. their memher deposits are insured by the federal
government up to $100,000. 3 As of June 30. 2000. 10.477 federally insured credit unions with
I
Pub. L. No. 105-219, §§ 203.401, and 403. II~ Stat. 913. 9~~ and 934-935 (1998) (codified at 12 U.s.c.
§§ 1752a note and 1757a note).
2 For a thorough analysis of credit unions. thl?ir busm~'\" opnations. and how they compare to banks and
thrifts as financial service providers, see U.S. Dept. of thl? TrI?Jsur). ('redll Unions (Wash .. DC: 1997). pp. 15-27.
Congress directed the Treasury to conduct this study in sl?ction ~606 of the Economic Growth and Regulatory
Paperwork Reduction Act of 1996. Pub. L. No. I 04-208. ~ ~6()6. 1 1() Stat. 3009-473 (Sept. 30, 1996) (codified at
12 U.S.c. § 1752a note).
3
12 U.s.c. § I 787(k)( I).
5
4
$426.8 billion in assets served 76.3 million members. Thus, the average credit union asset size
is $41 million. As Table 1-1 shows, the vast majority of credit unions is small and holds a
relatively small share of credit union assets. About 57 percent of all credit unions hold less than
$10 million in assets. Moreover, credit union assets are concentrated within the largest
institutions. Credit unions with more than $50 million in assets comprise less than 15 percent of
all credit unions, but they hold over 79 percent of total federally insured credit union assets.
Table 1-1: Number of Federally Insured Credit Unions and Total Assets bv Size Category
(Dollars in billions; data as of June 2000)
Asset Size
Category
< $2 million
$2 -$10 million
$10-$50 million
> $50 million
Total
Number of
Institutions
2,537
3,457
2,939
1,544
10,477
Percent of
All Credit Unions
24%
33%
28%
15%
100%
Total Assets
$2.2
$17.9
$68.0
$338.7
$426.8
Percent of Total
Assets
0.5
4.2
15.9
79.4
100.0
Source: Sheshunoff InformatIOn ServIces, Inc., BankSearch (Austin, TX: 2000).
Credit unions have grown larger in recent years. As of year-end 1994, 67 percent of all
5
credit unions had less than $10 million in assets. compared with 57 percent as of June 30, 2000.
Of this 10 percent difference, credit unions with more than $50 million in assets account for half
of this change. 6
Although credit unions have certain characteristics in common with banks and thrifts,
(e.g., the intennediation function). they are clearly distinguishable from these other depository
institutions in their structural and operational characteristics. Many banks or thrifts exhibit one
or more of the following five characteristics: but only credit unions exhibit all five together.
First. credit unions are member-owned. - and each member is entitled to one vote in
selecting board members and in certain other decisions. x Although other mutual institutions are
4 Sheshunoff Information Services. Inc .. [JOIlJ....\c·,lrc Ii (Au'itln. TX 2000). Note that this figure will
overstate membership. because some people belong to more than one credit union.
, Ibid
(, Ihid
7 12 USc. § I 752( I) (defining a federal credit lHlIon a, "a cooperative association organized ... for the
purpose of promoting thrift among its members and creating a ,ource of credit for provident or productive
purposes .... "). Mutual thrifts are also 0\\ ned b: their dep0'iltor,. but the other credit union characteristics do not
necessarily apply to these depository institutions.
8
12US C.§1760.
6
also member-owned, voting rights are generally allocated according to the size of the mutual
member's deposits, rather than being "one member, one vote."q
Second, credit unions do not issue capital stock. Credit unions create capitaL or net
worth, by retaining earnings. Most credit unions begin with no net worth and graduallv build it
•
10
over tlme.
Third, credit unions rely on volunteer, unpaid boards of directors whom the members
elect from the ranks of membership. II
Fourth, credit unions operate as not-for-profit institutions, in contrast to shareholderowned depository institutions. All earnings are retained as capital or returned to the members in
the form of interest on share accounts, lower interest rates on loans, or otherwise used to provide
products or services.
Fifth, credit unions may only accept as members those individuals identified in a credit
union's articulated field of membership. 12 Generally, a field of membership may consist ofa
single group of individuals that share a common bond; more than one group, each of which
consists of individuals sharing a common bond; or a geographical community. 13 A common
bond may take one of three forms: an occupational bond applies to the employees of a firm; an
associational bond applies to members of an association; and a geographical bond applies to
individuals living, working, attending school, or worshiping within a particular defined
.
14
commumty.
Table 1-2 shows the number of federal credit unions and their total assets for each type of
field of membership category. A multiple common bond credit union holds more than one
occupational or associational common bond or a combination of both types of common bonds.
(Community common bonds may not be part of a multiple common bond federal credit union.)
9 12 C.F.R. § 544.1 (presenting the federal mutual charter. section 6 of which provides that "each holder of
an account shall be permitted to cast one vote for each $100 .... "). Federal mutual institutions may set the number
of votes per member anywhere from I to 1.000. 12 C.F.R. ~ 544.2(b)(4).
10 12 U.s.c. § I 790d(b)(2)(B)(ii) (requiring credit union prompt corrective action regulations "to recognize
that credit unions (as cooperatives that do not issue capital stock) initially have no net worth. and give new credit
unions reasonable time to accumulate net worth .... "). This contrasts with banks and thrifts. which will be
chartered only if they have sufficient capital with which to begin operations. 12 C.F.R. § 5.20(h)(4)(national banks):
12 C.F.R. § 552.2-1 (b)(3)(ii)(federal savings associations) Even federal mutual associations must have a minimum
amount of capital with which to begin operations. 12 C.F.R. ~ 543.2(g)(2)( ii).
II See 12 U.s.c. § 1761. Nevertheless. federal credit un ions do have the authority to permit a specified
number of paid credit union employees to serve as directors ,";ee NCUA. The Federal Credit Union Bvlaws. art. VI.
§ 2. Also, some state chartered credit unions may have paid boards of directors.
12
12 U.S.C. § 1759(b). Such requirements for state credit unions vary from state to state.
IJ
12 U.s.c. § I 759(b).
14 NCUA. Chartering and Field of Memhershtp Manual (Alexandria. VA: 1999),63 Fed. Reg. 71.998
(Dec. 30,1998). as amended, 65 Fed. Reg. 37.065 (Jun. 13.2000)
7
Note that 49 percent of federal credit unions have multiple common bonds, but they hold 71
percent of federal credit union assets. Of the institutions organized around a single common
bond, most serve particular occupational groups. Occupational bonds account for 31 percent of
all federal credit unions and 16 percent of federal credit union assets.
Table 1-2: Federal Credit Unions by Type of Membership*
(Dollars in billions; data as of December 31, 1999)
Number
3,317
Single Common
Bond
Occupational
Associational
Community
Other**
Percent of all
Federal Credit
Unions
1,978
666
649
24
Total Assets
($ in billions)
51.3%
30.6%
10.3%
10.0%
0.4%
Percent of all
Federal Credit
Union Assets
$71.7
$40.2
$3.8
$26.4
$1.3
29.3%
16.4%
1.6%
10.8%
0.5%
Multiple Common
Bond
3,149
48.7%
$172.6
70.7%
Total
6,466
100.0%
$244.3
100.0%
* Data on state chartered credit Unions were not avaIlable.
** Common bonds in this category consist of atypical common bonds that have been grandfathered.
Source: National Credit Union Administration
II. Organization of the Report
This report is divided into four chapters. Chapter:2 analyzes the differences between
federally chartered credit unions and other federally chartered depository institutions generally
and compares the different statutory and regulatory requirements applicable to all federally
chartered depository institutions. Chapter 3 examines the revenue implications of eliminating
the federal income tax exemption currently applicable to federally insured credit unions. Finally.
Chapter 4 describes actions taken by this Administration to preserve the viability and growth of
small banks. The report also contains an Appendix containing a detailed comparison of the
statutes and regulations applicable to banks. savings associations. and credit unions.
8
CHAPTER 2
COMPARING THE DIFFERENCES BETWEEN
FEDERALL y INSURED CREDIT UNIONS
AND OTHER FEDERALLY INSURED DEPOSITORY INSTITUTIONS
Pursuant to section 401 of CUMAA, this chapter identifies the major statutory and
regulatory differences between federally insured credit unions and other federally insured
depository institutions. In preparing this chapter, Treasury drew upon its 1997 credit union
study.15 In that report, we enumerated several important characteristics that differentiate credit
unions from banks and thrifts. 16 We also compiled a table comparing both the enforcement and
the safety and soundness laws and regulations applicable to federally chartered depository
institutions, that is, those depository institutions supervised by the National Credit Union
Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Office of
Thrift Supervision (OTS). I 7
Given the mandate of section 401, we updated and expanded that table (see Appendix).
The updated table compares rules applicable to federally insured depository institutions as
implemented by all six federal depository institution regulators, including the Federal Reserve
Board (FRB) and the Federal Deposit Insurance Corporation (FDIC). Where applicable,
meaningful divergences between state and federal rules are noted. Moreover, the updated table
augments the previous one by summarizing the safety and soundness rules recently implemented
by the NCUA and by comparing the basic consumer protection laws and regulations across
depository institutions. It also identifies the major powers enjoyed by national banks, federal
savings associations, and federal credit unions. 18
19
Our 1997 report included several safety and soundness recommendations. Most of
these have been enacted in the CUMAA. including credit union net worth requirements. riskbased net worth requirements, prompt corrective action. and updated audit standards. This
chapter examines the NCUA's regulations implementing these statutory requirements.
Given the important structural and operational differences between credit unions and
other depository institutions highlighted in Chapter 1. one would expect credit union rules to
15
Treasury. Credit Unions. op. cit. footnote 2.
16
Ibid. pp. 17-19.
17
Ibid. pp. pp. 131-143.
18 State depository institution powers vary by state and will not be considered in this report. Moreover. a
federally insured state bank (or its subsidiary) or savings association (or its subsidiary) may not engage in any
activity impennissible for a national bank (or its subsidiary) unless the FDIC finds that it poses no significant risk to
the appropriate deposit insurance fund and the institution complies with all applicable capital rules. 12 U.S.c. §
1831 a(a)(l )(state banks); 12 U.s.c. § 1831 e(a)(state savings associations).
19
Treasury, Credit Unions. op. cit. footnote 2. p. 128.
9
differ in some respects from those applicable to banks and thrifts. For example, credit unions'
cooperative character precludes them from issuing stock to raise capital, but also excludes them
from the myriad rules governing stock issuance and the payment of dividends. On the other
hand, banks and thrifts may serve any customer and need not limit their operations to preestablished fields of membership, whereas credit unions may only serve those who fall within
their fields of membership. This chapter examines whether the most important statutory and
regulatory requirements applicable to depository institutions differ in any significant respect for
credit unions.
This chapter has been divided into three sections. Section I evaluates the recent safety
and soundness rules promulgated by the NCUA pursuant to statutory mandates. Section II
compares the banking statutes and regulations under which depository institutions operate.
Section III summarizes our conclusions.
I. NeVA Implementation of Mandated Safety and Soundness Rules
Treasury's 1997 report, Credit Unions. noted that credit unions operated under less
rigorous and formal safety and soundness rules than did banks and thrifts even as "a growing
number of credit unions evolve into larger and more complex financial institutions .. ,20
Contending that "[s]afety and soundness regulation must keep pace with expanding credit union
operations,,,21 our report recommended, among other things, that credit unions be subject to
statutory net worth requirements, including: a risk-based net worth requirement; prompt
corrective action; and independent audit requirements for larger institutions. 22
Congress incorporated these three recommendations into the CUMAA. 23 These
requirements and the NCUA's proposed and final regulations implementing them are discussed
and evaluated below.
A. Net Worth Requirements for Credit Unions
Prior to CUMAA, NCUA regulations did not impose any net worth requirement on credit
unions. In other words, credit unions were not required to maintain a given ratio of net worth to
total assets for safety and soundness purposes. Instead. credit unions were required only to add
to their reserves a specified percentage of current earnings. If reserves reached a certain
threshold, credit unions were no longer required to add to reserves. but no law or regulation
24
stipulated that credit unions were required to reach that Icvel. The major differences between
20
Treasury, Credit Unions, op cit. footnote 2, pp. 82-83.
21
Ibid
22
Ibid
23
Pub. L. No. 105-219,112 Stat. 913 (Aug. 7.1998)
24 For example, a credit union operating for more than four years and having at least $500,000 in assets had
to transfer annually 10 percent of its gross income to a reserve account until that account reached 4 percent of
outstanding loans and assets. Other credit unions had to transfer the same proportion of gross income until they
10
the capital requirements of credit unions and those of the other depository institutions are
delineated below. The Appendix contains a more detailed comparison.
In contrast, banks and thrifts are required to meet two capital requirements in order to be
adequately ca~italized: (1) a minimum ratio of total capital to total assets, generally 4 percent of
Tier 1 capital, 5 which includes common stock and non-cumulative perpetual preferred stock;26
and (2) a risk-based capital ratio of 8 percent capital to risk-weighted assets. 27 Half of the 8
percent risk-based capital requirement may consist of Tier 2 capitaL which may include
cumulative perpetual preferred stock, the allowance for loan and lease losses, and hybrid
instruments that combine debt and equity features. 28
CUMAA's net worth requirements direct federally insured credit unions to maintain at
least 6 percent net worth to total assets to be considered adequately capitalized. 29 Note that this
exceeds the 4 percent Tier 1 leverage ratio applicable for banks and thrifts (and is statutory, as
opposed to regulatory). Congress determined that a higher ratio was appropriate because credit
unions cannot quickly issue capital stock to raise their net worth as soon as a financial need
arises. Instead, credit unions must rely on retained earnings to build net worth, which necessarily
takes time. Moreover, Congress established a capital level two percentage points higher, a level
recommended by Treasury, because one percent of a credit union's capital is dedicated to the
National Credit Union Share Insurance Fund and another one percent of the typical credit
union's capital is dedicated to its corporate credit union. 3D
Congress also directed the NCUA to develop risk-based net worth requirements for
complex credit unions. 3l The NCUA was directed to both define what attributes cause a credit
reached 7.5 percent. At that point, their transfer requirement declined to 5 percent until the reserve reached 10
percent. 12 U.S.c. § 1762 (repealed 1998).
~5 12 C.F.R. § 6.4(b)(2)(iii) (OCC): 12 C.F.R. ~ 565.4(b)(2)(iii) (OTS): 12 C.F.R. § 32S.103(b)(2)(iii)
(FDIC); and 12 C.F.R. § 208(b)(2)(iii) (FRB). Savings associations must meet capital requirements as stringent as
those applicable to banks. 12 U.S.c. § 1464(t)(I)(C)
~6 12 C.F.R. part 3, app. A (OCC): 12 C.F.R. part 325. app. A (FDIC): and 12 C.F.R. part 208, app. A
(FRB). In the case of savings associations, Tier I capital also Includes certain non-withdrawable accounts and
pledged deposits. 12 C.F.R. part 567 (OTS).
~7 12 C.F.R. § 6.4(b)(2)(i) (OCC): 12 C.F.R. ~ 56:' -l(h)(2)(i) (OTS): 12 C.F.R. § 325.103(b)(2)(i) (FDIC):
and 12 C.F.R. § 208(b)(2)(i) (FRB). The risk-based capital requirements for savings associations may deviate from
those applicable to national banks to account for interest rate mk or other risks. but any deviations may not result in
materially lower levels of capital for savings association~ 12 L.S.C ~ 1464(t)(2)(C).
~8 12 C.F.R. part 3, app. A (OCC): 12 C.F.R. part 325. app. A (FDIC): 12 C.F.R. part 208, app. A (FRB):
and 12 C.F.R. part 567 (OTS).
29
12 U.s.c. § 1790d( c)( 1)(B)( i).
30
Treasury, Credit Unions, op cit. footnote 2. pp 5/\ and 70- 71.
31
12 U.s.c. § 1790d(d)(I).
II
union to be considered complex,32 and design a system for complex credit unions that accounts
for any material risks not adequately addressed by the 6 percent leverage requirement. 33 To be
adequately capitalized, a complex credit union must meet the higher of the 6 percent leverage
requirement and the risk-based net worth requirement. 34
The risk-based capital system for banks and thrifts assigns each class of assets a risk
weight that varies from 0 percent to 100 percent. The 0 percent category includes assets such as
cash, the 20 percent category includes assets such as securities issued by government-sponsored
enterprises, the 50 percent category in~ludes mortgage loans, and the 100 percent category
consists of typical commercial loans. 3) These rules stemmed from a 12-country effort to develop
internationally uniform capital standards. 36 As such, this system best serves larger,
internationally active commercial banks, but it would not likely serve credit unions as well. In
this case, credit unions should operate under different rules, but rules aimed at the same goal of
requiring capital to account for risks not adequately covered by the leverage ratio.
I. NeVA's Risk-Based Net Worth Requirement
The NCUA's risk-based capital rule applies to any credit union with more than $10
37
million in assets and whose risk-based net worth requirement exceeds 6 percent. A credit
union's risk-based requirement is the sum of eight standard components, as depicted in Table 21. Each of the eight components constitutes a "risk portfolio," which is a portfolio of assets,
liabilities, or contingent liabilities expressed as a percentage of total assets. A risk-weighting is
applied to each component, and all are summed to determine the credit union's requirement. A
credit union is undercapitalized if its net \\orth is less than the applicable risk-based net worth
requirement.
)C
Ibid
..
12 U.S.C. § 1790d(d)(2).
)4
12 U.s.c. § 1790d(c)(I)(B)(ii).
15 12 C.F.R. part 3, app. A (OCC): 12
and 12 C.F.R. part 567 (OTS).
c.r
R. ran -'2:'. arr A (FDIC): 12 C.F.R. part 208, app. A (FRB):
16
William A. Loven, BanktnganJ F/flullcw/ /lI.Ililllli(}1I.I LUII(SI. Paul, MN: 1997), pp. 127-128.
)7
65 Fed. Reg. 44,950, 44,966 (luI. 20. 2000) (to be codified at 12 C.F.R. part 702).
12
Table 2-1: Standard Calculation of Risk-Based Net Worth Requirement
Risk Portfolio Component
Allocation of Risk Portfolios
(as % of total assets)
MUltiplying Factor
o to 25
over 25
.06
.14
Oto 12.25
over 12.25
.06
.14
o to I year
> 1 year to 3 years
> 3 years to 10 years
> 10 years
.03
.06
.12
.20
All
.00
Average-ns
. k assets 40
All
.06
Loans sold with recourse
All
.06
Unused member business loan lines of
credit
All
.06
Limited to the equivalent
of 1.5 0 0 of total loans
(expressed as a % of assets)
( 1.00)
Long-tenn real estate loans
38
Outstanding member business loans
Investments
Low risk assets
39
Allowance for loan losses
Source: NCUA. See also 65 Fed. Reg. 44,969.
The final rule offers an alternative method of calculating the requirement. which a credit
union may use if it results in a lower risk-based net worth requirement. Three of the abovementioned "risk portfolios"-long-tenn real estate loans, member business loans, and
investments-are weighted according to their remaining maturity. If the alternative results in any
)8 Long-tenn real estate loans consists of all real estate loans and lines of credit-excluding member
business loans-that will not reprice or mature within five ~ears 65 Fed. Reg. 44,966 (to be codified at 12 C.F.R.
§ 702.1 04(a)).
W Low risk assets consist of cash on hand and the one percent deposit held by credit unions in the National
Credit Union Share Insurance Fund. 65 Fed. Reg. 44.966 (to be codified at 12 C.F.R. S 702.104(d)).
40 Average risk assets equals total assets minus the sum of long-tenn real estate loans, outstanding member
business loans. investments, and low risk assets. 65 Fed. Reg. 44,966 (to be codified at 12 C.F.R. § 702.104(e)).
13
I
I
component generating a lower requirement, the credit union may substitute the lower
determination for the standard calculation of that component. 41
2.
Assessment a/the NeVA's Risk-Based Net Worth Requirement
In generaL the NCUA implemented the risk-based net worth requirements as Congress
intended. However, the rule contains a placeholder for the role that "'regulatory capital" might
playas "a criterion in evaluating net worth restoration plans" if regulatory capital is approved by
42
the NCUA. Under CUMAA, only retained earnings calculated according to generally accepted
accounting principles (GAAP) may count as net worth,43 which means that no form of uninsured
regulatory capital may count as net worth. Nevertheless, the NCUA finds such capital valuable,
believing that it would be available to absorb losses. Specifically, the NCUA will take
regulatory capitaL which may be established by NCUA regulation or authorized by state law and
recognized by NCUA, into account when evaluating a credit union's net worth restoration plan.
A credit union with regulatory capital would likely be permitted to have lower net worth
targets in its net worth restoration plan than a similarly situated credit union without regulatory
capital, on the theory that regulatory capital would be available to absorb potential losses.
However, depository institution experience with uninsured depositors shows that these account
holders tend to withdraw their funds at the first sign of financial difficulty, thus rendering such
funds unavailable to absorb losses and, in some cases, precipitating runs on institutions.
B. Prompt Corrective Action for Credit Unions
In response to the large number of bank and thrift failures in the late 1980s and early
1990s, Congress enacted a regulatory structure known as prompt corrective action (PCA). PCA
consists of a set of statutory and regulatory provisions aimed at resolving capital deficiencies
44
before they grow into larger problems. This system classifies depository institutions into five
categories, according to their capital holdings: well-capitalized, adequately capitalized,
45
undercapitalized, significantly undercapitalized, and critically undercapitalized. An institution
that becomes undercapitalized faces progressively more stringent regulatory restrictions and
41
See 65 Fed. Reg. 44,969 (to be codified at 12 C.F.R. ~ 702.107).
42 65 Fed. Reg. 8.607 (Feb. 18.2000). Net worth restoration plans will be codified at 12 C.F.R. ~
702.206(e). The NCUA's approach relies in part on the standards applicable to low-income credit unions. which
may accept uninsured secondary capital accounts that count towards meeting net worth requirements. Although
CUMAA specifically permitted these credit unions to count such capital as net worth. it did not permit its use in any
form by other credit unions.
43
12 U.s.c. § I 790d(0)(2).
44 12 U.s.c. § 18310. Regulations implementing these statutory requirements can be found at 12 C.F.R.
part 6 (OCC); 12 C.F.R. part 325. subpart S (FDIC): 12 C.F.R. part 208. subpart D (FRS): and 12 C.F.R. part 565
(OTS).
45 12 U.s.c. § 1831 O(b)( I). Although created by statute. these terms are defined only in regulation. 12
C.F.R. § 6.4 (OCC): 12 C.F.R. § 565.4 (OTS): 12 C.F.R. ~ 325.103 (FDIC): 12 C.F.R. ~ 208.43 (FRS).
14
requirements. Depending on how undercapitalized an institution becomes, and how long the
institution remains undercapitalized, the primary federal regulator may direct the institution to
issue capital stock or to refrain from increasing its asset size. Regulators also have the authority
to require a new election of the board of directors and to dismiss managers. Ultimately, an
.
institution may be placed into receivership if it remains critically undercapitalized for a long
period of time and shows no ability to recover. 46
Treasury's 1997 report detennined that prompt corrective action would benefit credit
unions. At that time, we found that the:
relevant statutes, regulations, and policies fall short of providing a system of prompt
corrective action for credit unions. The NCUA has no regulations or even formal
guidelines for taking corrective action regarding a troubled credit union, and once a credit
union depletes its net worth, the NCUA 's response may be to provide assistance from the
Share Insurance Fund rather than to close the institution. Although this approach may
sometimes turn around a troubled institution, it also has risks. In particular, regulatory
forbearance may delay the actual recognition and correction of serious deficiencies.
When this occurs in a general downturn with many institutions getting into difficulty,
what might otherwise have produced small losses to the insurance fund could produce
much larger losses. The breakdown in regulatory discipline and management discipline
becomes difficult to correct. Unstructured regulatory discretion may also promote
unfairly disparate treatment of similarly situated credit unions. 47
Based on Treasury's recommendation, Congress directed the NCUA to implement a
system of PCA for credit unions. 48 Recognizing the differences between credit unions and other
depository institutions, Congress did not simply apply the then-existing PCA system to credit
unions; rather, it adapted that system to the characteristics of credit unions. 49 For example, given
that credit unions can only increase net worth through retained earnings and that credit unions
are generally chartered with little or no net worth. the statute directed the NCUA to promulgate
separate PCA rules for newly chartered credit unions. 50 Similarly, the legislation grants the
46 12 U.s.c. § 18310(h)(3)(C)(i) (directing the regulator to appoint a receiver for an insured depository
institution has remained "critically undercapitalized on average by the calendar quarter beginning 270 days after the
date on which the institution became critically undercapitalized"). Subject to certain stringent restrictions, the FDIC
and the critically undercapitalized institution' s federal regulator may spare the institution from receivership if it "is
viable and not expected to fail." 12 U.s.c. § 18310(h)(3)(C)(ii)(II).
47
Treasury, Credit Unions, op. cit. footnote 2. p. 76.
48
Pub. L. No. 105-219, § 301.112 Stat. 913.923-931 (codified at 12 U.s.c. § 1790d).
49 For example, CUMAA directed the NCUA to design a system of prompt corrective action "to take into
account that credit unions are not-for-profit cooperatives that do not issue capital stock, must rely on retained
earnings to build net worth, and have boards of directors that consist primarily of volunteers."
12 U.s.c. § 1790d(b)(I)(B).
50 CUMAA required the NCUA to "prescribe a system of prompt corrective action that shall apply to new
credit unions in lieu of this section [which must] recognize that credit unions (as cooperatives that do not issue
capital stock) initially have no net worth and give new credit unions reasonable time to accumulate net worth ......
12 U.s.c. § I 790d(b)(2)(B).
15
NCUA more time to allow a critically undercapitalized credit union to build net worth and return
to financial health than generally permitted for banks and thrifts. 51
In addition to tailoring specific statutory PCA provisions to credit unions, the legislation
directs the NCUA to develop a PCA system that is "comparable" to the PCA rules applicable to
banks and thrifts.,2 According to the Senate Banking Committee report, "comparable" means
"parallel in substance (though not necessarily identical in detail) and equivalent in rigor. ·,53
I. NCVA 's Prompt Corrective Action Rule
PCA consists of two primary components: (1) a framework of mandatory actions
prescribed by statute together with discretionary actions developed by the NCUA; and (2) an
alternative system of PCA that applies to "new" credit unions. With regard to the first
component, CUMAA mandated a set of required actions, corresponding to five statutory net
worth categories. Those actions that would trigger conservatorship or liquidation are prescribed
in CUMAA. Discretionary actions were left for the NCUA to devise, provided they are
"comparable" to those devised by the federal banking agencies for banks and thrifts.
New credit unions are those that have been in operation less than ten years and have $10
million or less in assets. 54 Pursuant to CUMAA. the NCUA devised a completely different
system of PCA for these institutions. taking into account the fact that new credit unions begin
with no net worth and can only build it slowly over time. The final rule expanded the net worth
categories from five to six and delineated how long it would normally take a new credit union to
work its way from uncapitalized, on the day it is chartered. to higher levels of net worth. For
example, the NCUA anticipates that it would require five years to accumulate 2 percent net
worth and about 10 years to become adequately capitalized. with at least 6 percent net worth.
The NCUA promulgated its final PCA rule on February 18,2000.
effective on August 7, 2000.
55
and it became
51 For example, the NCUA may. under certain conditions. decide not to liquidate a critically
undercapitalized credit union, but it must revisit that decision every six months. 12 U.s.c. § 1790d(i)(2). In
contrast, the other federal depository institution regulators must revisit such a decision every three months. 12
U.s.c. § 18310(h)(3)(8). The NCUA must generally liquidate a credit union that has remained critically
undercapitalized on average during the calendar quarter beginning 18 months after the date on which the credit
union initially became critically undercapitalized. 12 U.s.c. § 1790d( i )(3 )(A). For the other federal regulators. the
comparable time period is nine months. 12 U.s.c. § 183Io(h)(3)(C)(i).
52
12 U.s.c. § 1790d(b)(I)(A)(ii).
53
S. REP. No. 193, 105 th Cong .. 2nd Sess. p. 12 ( 1998)
54
12 U.s.c. § 1790d(0)(4).
55
65 Fed. Reg. 8,560 (Feb. 18, 2000).
16
2.
Assessment o/the NCVA 's Prompt Corrective Action Rule
As with its approach to devising a risk-based net worth requirement, the NCUA has
generally implemented its PCA rule as Congress intended, including the congressional mandate
that PCA for credit unions be "comparable" to PCA for banks and thrifts. To the extent there are
differences, for the most part they derive from the structural distinction between credit unions
and other depository institutions.
We found, however, that the rule differs unnecessarily from the bank and thrift PCA rule
in two respects. First. the NCUA has decided explicitly to forego its right to take certain
discretionary actions against undercapitalized credit unions. For example, the NCUA has
decided not to use its authority to require a new election of an undercapitalized credit union' s
board of directors, although it will retain its authority to do so in the case of a significantly or
critically undercapitalized institution. With regard to an undercapitalized credit union, the
NCUA believes that a wholesale election of the board of directors may be an overreaction when
a credit union's net worth falls below six percent. Although this may be true in many, or nearly
all such situations, there may well be exceptions. Treasury believes that it would have been
more appropriate for the NCUA to articulate its perspective in the preamble and in guidance,
while at the same time retaining the authority.
Second, as with the proposed risk-based net worth rule, the final PCA rule contains a
placeholder for the role that "regulatory capital" could play in the PCA system if the NCUA
authorizes it. As noted previously, only GAAP calculated retained earnings count as net worth. 56
Recognizing this, the NCUA states in the preamble that "the final rule is revised to establish as a
criterion in evaluating net worth restoration plans the type and amount of any forms of regulatory
capital as may be established by NCUA .... ··57 The prospect of new forms ofregulatory capital
raises concerns, as mentioned in the discussion of the NeUA's proposed risk-based net worth
requirement rule.
C. Independent Audits
All federally insured banks and thrifts must complete annual reports on their financial
condition and management. 58 Moreover. all banks and thri its with at least $500 million in assets
must establish an independent audit committee and obtain an annual independent audit of its
financial statements by an independent public accountant in accordance with generally accepted
accounting standards. 59 Furthermore. the OTS requires any savings association with an
60
unsatisfactory supervisory rating (3. 4. or 5) to ohtain an independent audit.
56
12 U.s.c. § I 790d(o)(2).
57
65 Fed. Reg. 8,560, 8,564 (Feb. 18. 2000)
58
12 U.s.c. § 183Im(a).
59
12 C.F.R. part 363, implementing 12 U.s.c. ~ 1831 m( d) and (g)( I ).
60
12 C.F.R. § 562.4(b)(I).
17
Credit unions have traditionally followed much different audit procedures. First, a credit
union's volunteer board of directors must appoint a supervisory committee from among the
credit union's membership.61 The supervisory committee must then conduct, or hire a competent
party to conduct, an annual audit of the credit union. The supervisory committee must also
verify that the institution's financial statements accurately and fairly represent the institution's
financial condition and that management practices and procedures sufficiently protect member
assets. 62 NCUA regulations require that a credit union's financial statements provide full and
fair disclosure of all assets, liabilities, and member equity. 63
In our 1997 report, we noted that with the "rise of large, financially complex credit
unions, the audit becomes increasingly more difficult for unpaid volunteers to carry out
personally.,,64 At that time, the NeUA required that supervisory committee audits be performed
by "persons having adequate technical training and proficiency as an auditor commensurate with
the level of sophistication and complexity of the credit union under audit," but did not require
that even the largest, most complex credit union hire a professional accountant. 65
Therefore, we recommended that the NeUA require each large federally insured credit
union to obtain an annual audit from an independent certified public accountant, in a manner
66
comparable to that required by the FDIC.
CUMAA modified the audit requirements as recommended in our report. First, all
financial reports and statements required to be filed with the NeUA must be uniform and
67
consistent with GAAP, although credit unions with less than $10 million in assets are exempt.
The NeUA may substitute its own accounting principles for GAAP, provided that (l) GAAP is
found to be inappropriate for credit unions, and (2) the substitute principles are "no less
stringent" than GAAP. 68
Like banks and thrifts, all insured credit unions with at least $500 million in assets must
now obtain an annual independent audit of their tinancial statements, performed in accordance
with GAAP by an independent certified public accountant or public accountant licensed to
u.s. c.
61
12
§ I 761 b( 5).
6:
12 C.F.R. part 715, implementing 12 L' S C ~ I ~61 u.
0'
12 C.F.R. § 702.3.
r so
64
Treasury. Credit Unions, op Cit foolnol~ 2.
65
See 12 C.F.R. § 701.12(c)(2)(i) (supcrscu~u).
66
Treasury. Credit Unions, op
67
12
08
Ihid .. § 1782(a)(6)(C)(ii)
U.s.c.
Cit
fOOlnOll: 2.
r so
§ I 782(a)(6)(C)(i) and (iii)
18
69
perfonn these services by the appropriate jurisdiction. Certain audit requirements also apply to
insured credit unions with more than $10 million in assets, but less than $500 million, that
voluntarily choose to be audited by an independent auditor who is compensated for the service. 70
II. Depository Institution Rules Compared
This section compares the basic statutory and regulatory rules applied to depository
institutions across four broad categories: institution powers, safety and soundness, regulatory
enforcement authority, and consumer protection. The Appendix contains a detailed table
summarizing these findings.
A. Institution Powers
In general, federal credit unions have more limited powers than national banks and
federal savings associations. Most notably, federal credit unions face stricter limitations on their
commercial lending and securities activities. In addition, a usury ceiling prevents them from
charging more than 18 percent on any loan, and the tenn of many types of loans may not extend
beyond 12 years. At the same time, however, federal credit unions have ample authority to offer
most other consumer products and services. whether directly or through an affiliate. Table 2-2
identifies the major products and services available from credit unions and shows the proportion
of credit unions offering such products and services by asset size.
69
12 U.s.c. § 1782(a)(6)(D)(i).
70
12 U.s.c. § 1782(a)(6)(D)(ii).
19
Table 2-2: Credit Union Products and Services bv Asset Size
(Percent of credit unions; data as of December 31, 1999)
Asset Size (in millions)
$1-2m
$5-IOm
$50-100m
Over $500m
All Credit Unions
98.4
8.6
3.7
96.4
96.4
1.9
71.6
3.6
99.7
33.9
14.5
99.0
99.2
8.0
88.4
45.1
100.0
84.6
35.7
100.0
100.0
27.8
94.5
92.0
100.0
100.0
52.3
100.0
100.0
45.2
97.7
97.7
98.8
41.2
18.4
96.1
95.3
11.6
80.6
46.3
0.3
0.4
0.0
3.5
2.5
2.9
32.7
32.6
49.0
73.8
78.6
66.7
10.8
10.3
14.5
2.1
5.4
36.4
66.3
12.8
0.8
12.2
67.4
80.2
23.4
0.0
2.8
48.3
53.4
72.5
94.1
78.9
100.0
62.6
49.1
Loans:
Unsecured
First Mortgage
Guaranteed Student
Used Auto
New Auto
Auto Leasing
Plane/Boat/R V
Credit Cards
Member Services:
Stock/Bond Brokerage*
Mutual Funds*
Safe Deposit Boxes
Loan Application
Through Audio Response
Loan Application
Through a PC
Loan Application
Through the Internet
ATM Cards
Deposit Accounts/Services:
97.7
66.6
94.7
75.5
38.3
CDs
98.8
56.1
93.2
61.6
18.5
Traditional IRAs
48.3
31.9
37.8
58.2
5.9
Business Checking
100.0
60.7
96.1
74.8
Personal Checking
13.8
Source: Credit Union NatIOnal ASSOCiation. CreJil Union Services Profile /999. (Data consists of responses from
68 percent of the 11,012 credit unions in existence at the end of 1999).
*
Institutions may not provide these services themselves. but rna: afTer them if another entity actually provides the services.
One of the most apparent differences between federal credit unions and other federally
chartered depository institutions stems from the restrictions federal credit unions have regarding
their customer base. Whereas banks and savings associations may offer products and services to
anyone, federal credit unions mav serve onh. their members. 7\ In addition, federal credit unions
may accept only individuals as members. although community credit unions may also serve
qualified businesses. 72 Despite these restrictions. a federal credit union may extend its offerings
to non-members through an affiliate knO\\n as a credit union service organization (CUSO).
.
71
12 U.s.c. § 1759.
70
63 Fed. Reg. 71,998, 72,037 (Dec. 30.1998)
20
CUSOs may be 0:ned as a subsidiary or jointly with other depository institutions, including
banks and thrifts. 3
Below we compare the activities in which federal credit unions may engage to those in
which national banks and federal savings associations may engage. A more complete
comparison is provided in the Appendix.
1. Deposits and Trust Accounts
Like national banks and federal savings associations, federal credit unions may offer
checking and savings accounts, although the Federal Credit Union Act (FCUA) refers to them as
74
share accounts. Unlike banks and savings associations, however, credit unions may pay
interest on business checking accounts. Whereas federal credit unions may only offer trust
accounts through a CUSO, national banks and federal savings associations may offer them
directly.
2. Customer Services
Generally, federal credit unions may provide the same financial products and services as
national banks and federal savings associations, including travel and foreign exchange services,
insurance, securities brokerage, investment advice, and real estate brokerage. However, while
national banks may offer these directly, federal credit union customers may only obtain these
from a CUSO. A federal savings association may not offer these products directly, unless
registered as a broker/dealer or investment advisor.
3. Derivatives
Federal credit unions have very limited authority to purchase or sell derivatives, even for
the purpose of hedging risk,75 unlike national banks and federal savings associations. Also in
contrast to other federaily chartered depository institutions, a federal credit union may not
directly securitize its assets through its own trust. Furthermore, neither federal savings
associations nor federal credit unions may underwrite securities, whereas national banks, through
financial subsidiaries, may underwrite any security under certain conditions.
73 Federal credit unions may only invest up to one percent of their total paid in and unimpaired capital and
surplus in CUSOs. 12 U.s.c. § 1757(7)(\).
74 Federal credit unions are member-owned cooperatives. 12 U.s.c. § 1752( I). Therefore. the FCUA
refers to member deposits as member shares. whether the share represents a demand deposit, time deposit, or
certificate of deposit. 12 U.s.c. § 1752(5).
75 Federal credit union may use derivatives to manage the risk of loss through a decrease in value of its
commitments to originate real estate loans at specified interest rates by entering into long put positions on securities
issued by the Government National Mortgage Association. the Federal National Mortgage Corporation, and the
Federal Home Loan Mortgage Corporation. 12 C.F.R. § 701.21(i)(2)
21
4. Lending
Federal credit unions may offer residential mortgage loans, but such loans may not
extend beyond 40 years, and any second mortgage may not extend beyond 20 years. In addition.
national banks and federal savings associations must obtain a certified appraisal of such
properties only when the loan amount exceeds $250,000,76 whereas federal credit unions must
generally obtain a certified appraisal if the loan exceeds $100,000. 77 Similarly, federal credit
unions must obtain a certified appraisal for any business loan in excess of $50,000,78 while other
federally chartered depository institutions need only obtain such appraisals for loans in excess of
79
$1 million.
Federal credit unions may not make unsecured residential construction loans, whereas
national banks and federal savings associations face only limited restrictions on such lending.
On the other hand, federal credit unions may make other types of unsecured loans without
specific additional limitations.
Federal credit unions' member business (commercial) lending may not exceed the lesser
of 1.75 times net worth or 12.25 percent of total assets. unless the credit union is either chartered
to make such loans, has a history of concentrating on making such loans, is a low income credit
union, or participates in the Community Development Financial Institutions program. In
contrast, national banks face no specific restrictions on this type of lending, and federal savings
associations' commercial loans may not exceed 20 percent of their total assets.
5. Investments
NCUA regulations limit a federal credit union' s investments to those specifically listed in
the Act, such as government and agency securities. which may be purchased without limitation.
Aside from the issuances of certain government sponsored enterprises, federal credit unions may
not invest in residential mortgage-backed securities. such as strips: residual interests in collateral
mortgage obligations or real estate mortgage investment conduits: or commercial mortgages and
related securities. Moreover, unlike national banks and federal savings associations. federal
credit unions may not invest in securities backed by non-residential assets, such as credit cards or
automobiles, unless issued by certain government sponsored enterprises. Furthermore, subject to
certain restrictions, national banks and federal savings associations may invest in corporate debt
securities. but federal credit unions lack such authority.
76
12 C.F.R. § 34.43(a)(I) (national banks): 564.3(a)( I) (federal savings associations).
77
12 C.F.R. § 722.3(a)(I).
78
Ibid.
79
12 C.F.R. § 34.43(a)(5)(i) (national banks); 12 C.F.R. ~ 564.3(a)(5)(i) (federal savings associations).
B. Safety and Soundness Rules
As the table in the Appendix shows, credit unions face nearly the same safety and
soundness rules as other depository institutions, with one notable exception: the NCUA' s loansto-one-borrower regulation. Currently, a credit union may lend to one borrower up to 10 percent
of its "unimpaired capital and surplus,',80 which the NCUA defines as retained earnings plus
deposits (or shares). Relying on the FCUA, which refers to shares as "equity,,,81 NCUA
regulations pennit any federal credit union to lend to any borrower an amount up to 10 percent of
the institution's capital plus 10 percent of the institution's deposits. 82 This greatly exceeds the
limits on other depository institutions, which is typically 15 percent of capital. 83
C. Regulatory Enforcement Authority
When comparing enforcement authority across federal depository institution regulators,
few differences are found. As the Appendix shows. credit unions in fact operate under almost
identical enforcement rules as banks and thrifts. For example, the NCUA may issue cease-anddesist orders and impose civil money penalties under the same rules as the other federal
depository institution regulators.
D. Consumer Protection
Credit unions are also subject to the same consumer protection rules as other depository
institutions. The Truth in Lending Act. the Truth in Savings Act, the Real Estate Settlement
Procedures Act, the Home Mortgage Disclosure Act. and the Expedited Funds Availability Act,
for example, apply unifonnly to all depository institutions. However, the Community
Reinvestment Act (CRA)84 applies to all depository institutions except credit unions. 85
80 12 U.S.c. § 1757(5)(A)(x); 12 C.F.R. ~ 701~I(c)(5)
8112u.s.C.§1757(6).
82 12 C.F.R. § 701.21(c)(5).
83 12 U.s.c. § 84 (national banks): I ~ u.s.c. ~ 1464( u) (f~d~ral savings associations). The following
example illustrates how much greater the limit on loans to one borro\\a is for credit unions than for other depository
institutions. Assume that a federal credit union and a natIOnal bank each have $100 million in assets and $8 million
in net worth (8 percent). The national bank's lending limit I~ 15 percent of $8 million-or $1.2 million. By contrast,
a federal credit union's statutory lending limit is ke:ed to the sum of its deposits and its net worth, a sum roughly
equaling the credit union's total assets. Thus. the credit union \ knding limit is 10 percent of approximately $100
million-or $10 million. The credit union therefor~ has a kndlng Iim it over eight times larger than that of the bank.
Treasury, Credit Unions. op. cit. footnote 2. p. 65.
84 Pub. L. No. 95-128, 91 Stat. 1111. 1147-48. titk \'111 (Oct I~. 1977) (codified at 12 U.s.c. § 2900 et
seq.).
85 12 U.s.c. § 2902(2) (referring to the definition of "insured depository institution" in 12 U.s.c. §
1813(c)(2), which includes only those banks and thrifts insured by the FDIC).
The CRA established an obligation on the part of federally insured depository institutions
to help meet the credit needs of their entire communities, including low- and moderate-income
neighborhoods and individuals, consistent with safe and sound banking practices. An inadequate
record under CRA may be grounds for denying or conditioning an application, for example, to
merge with or acquire another depository institution, or to open or close a branch.
Although the CRA does not apply to credit unions, the NCUA recently promulgated a
regulation requiring that any credit union seeking to expand, convert to, or charter a community
credit union would have to prepare a written plan for serving its entire community.86 Existing
community credit unions would be expected to develop a plan, which would have to be in place
by December 31, 2001.
III. Conclusion
Federal credit unions generally operate within the same legal framework as other
federally insured depository institutions. Most differences between credit unions and other
depository institutions derive from the structure of credit unions. We found this to be most likely
in the case of safety and soundness rules. where credit union operations interact directly with the
operation of the rules. With regard to enforcement and consumer protection rules, few
differences exist. Credit unions have fewer powers available to them than do banks and thrifts.
but, through CUSOs, credit unions may provide their members with a panoply of sophisticated
financial services and products that rivals the offerings of banks and thrifts.
86
65 Fed. Reg. 64.512 (Oct. 27. 2000).
24
CHAPTER 3
THE POTENTIAL REVENUE EFFECTS
OF APPLYING FEDERAL TAX LAWS TO CREDIT UNIONS
Section 401 of the Credit Union Membership Access Act requires the Treasury to study
and report on "the potential effects of the application of federal laws, including federal tax laws,
on credit unions in the same manner as those laws are applied to other federally insured financial
institutions.,,87 Under current law, credit unions are exempt from federal income taxation, unlike
all other federally insured depository institutions. 88
In general, depository institutions are taxed under varying rules depending on the
structure of the institution. The revenue model applied below assumes that, in the absence of an
exemption, the appropriate rules for taxing credit unions are those applicable to mutual thrifts
(i. e., mutual savings associations, mutual savings banks, cooperative banks, and domestic
building and loan associations). Mutual thrifts are the federally insured depository institutions
most similar in structure to credit unions, because like credit unions, mutual thrifts generally do
not have corporate stock, are not-for-profit entities, and are owned by their depositors, or
members, rather than by shareholders.
This chapter is organized as follows. Section I describes corporate taxation generally.
Section II describes the manner in which depository institutions are taxed specifically. Section
III relates the history of the federal income tax exemption for credit unions. Section IV explains
the model used to estimate the revenue effect of taxing credit unions like mutual thrifts. Because
a critical assumption underlying our revenue estimates is the forecasted growth rate for credit
unions, two series of revenue projections, using both higher and lower growth rates, are
presented.
I. Taxation of Corporations
Corporations are generally taxed under one of two sections of the Internal Revenue Code:
Subchapter C (rendering the corporation a "C" corporation)s9 and Subchapter S (rendering the
corporation an "S" corporation).90
9
Most corporations, including depository institutions. are C corporations. ! Under
Subchapter C, income is taxed at both the corporate Je\el and at the shareholder level.
87
Pub. L. No. 105-219,112 Stat. 913. 934-935 (Aug. 7.1998)
88
26 U.s.c. § 501(c)(14)
89
26 U.s.c. §§ 11,301-305.
90
26 U.s.c. §§ 1361-1379.
91 Internal Revenue Service, Statistics of Income Division. /99- Corporation Source Book, Publication
1053 (March 2000).
25
Distributions of corporate income, in the form of dividends, which have already been taxed at the
corporate level constitute taxable income at the individual level to stockholders. At the corporate
level, such entities are generally taxed at a 35 percent tax rate on taxable income. To compute
taxable income, a C corporation deducts its business expenses, such as employee compensation.
depreciation, and interest paid. However, a deduction is not allowed for dividends paid. When
deductions exceed income, the corporation has a net operating loss for the taxable year.
Carryover rules permit corporations to use the net operating loss to offset taxable income in
preceding or succeeding taxable years. In general, a corporation can carry a net operating loss
back two years and forward 20 years. 9'~
Some corporations may elect to be taxed under Subchapter S. Eligibility criteria include.
among other things, a requirement that an S corporation have no more than 75 shareholders and
that it not use the reserve method of accounting for bad debts. Unlike C corporations, the
income of S corporations is allocated for tax purposes to shareholders and then taxed at their
applicable rates; the entity itself does not pay federal income tax. Prior to 1997, depository
institutions were ineligible to elect S corporation status.
II. Tax Treatment of Depository Institutions
A. General Provisions
In addition to the rules applicable to corporations generally, special rules apply to
93
depository institutions. These special rules reflect the fact that the income of depository
institutions is primarily derived from taking deposits and making loans. Thus, depository
institutions, unlike taxpayers generally, are allowed a bad debt deduction for securities that
94
become worthless. Similarly, sales or exchanges of debt obligations held by a depository
institution result in ordinary income or loss, rather than capital gain or loss.95 Depository
institutions are also subject to a special pro rata allocation rule for purposes of determining the
amount of interest expense that is nondeductible as an expense relating to tax-exempt interest
income. With very limited exceptions, a depository institution is not allowed a deduction for
interest expense allocable to tax-exempt obligations acquired after August 7, 1986. 96
Special rules also apply to small depository institutions (those with assets of $500 million
or less). In generaL taxpayers are required to use a specific charge-off method to account for bad
debts. Under this method, a deduction for a bad debt is aIIo\ved only when a loan becomes
9:! C corporations are also subject to the alternative minimum tax (AMT). which applies only if their
minimum tax exceeds their regular tax liability. ]6 USc. ~ 55.
9,
26 USc. § 585.
94
26 USc. § 582.
95
26 USc. § 1221.
96
26 U.s.c. § 265.
26
wholly or partially worthless. Depository institutions (other than small depository institutions)
97
are required to use this method. Small depository institutions, however, are permitted to use
either the specific charge-off method or the reserve method of accounting for bad debts. Under
the reserve method, a depository institution establishes a reserve for bad debts, charges actual
losses against the reserve, and is allowed a deduction for annual additions to restore the reserve
to its proper balance. The reserve method thus allows loss deductions to be taken before the year
in which the loss actually occurs and can be viewed as equivalent to an interest-free loan from
the government to the taxpayer in an amount equal to the reserve balance multiplied by the tax
98
rate.
A taxable depository institution that grows too large no longer qualifies for the reserve
method and must use the specific charge-off method of accounting for bad debts. To prevent the
duplication of deductions, first as a reserve addition and then when the loan is specifically
charged off, the institution must recapture its existing bad debt reserve (i.e., include the amount
of the reserve in income) unless it elects to use the "cut-off' method. 99 A depository institution
that voluntarily changes its method of accounting to the specific charge-off method (e.g., so that
it can become an S corporation) must also recapture its existing bad debt reserve. 100
B. Tax Treatment of Mutual Thrifts
The tax treatment of a depository institution depends, in part, on whether the institution is
a stock or a mutual company. In a stock company, the shareholders and the depositors are not
necessarily the same individuals. The equity of the corporation is derived from amounts paid by
shareholders to purchase stock from the corporation and from earnings retained by the
corporation, rather than distributed to shareholders. In general, the corporation's net income is
taxed at the corporate level, whether it is retained or distributed to shareholders. Income that is
distributed to shareholders as dividends is also taxed at the shareholder level.
97 Under Treasury regulations, banks and other corporations subject to federal or state regulatory
supervision may treat debts as worthless for tax purposes when they are treated as worthless for regulatory purposes.
This often allows the losses to be recognized earlier than would be the case under generally applicable standards.
For supporting analysis, see Dept. of the Treasury. Report tn The Congress on The Tax Treatment of Bad Debts by
Financial Institutions (Wash., DC: 1991).
98
For a discussion of when reserves may lower taxes for financial institutions, see Treasury, The Tax
Treatment of Bad Debts, op. cit. footnote 101.
99 The recapture is generally spread over four years. In the first year, 10 percent of the reserve is
recaptured unless the taxpayer chooses to recapture a higher percentage. The reserve remaining after the first year is
recaptured 2/9ths in the second year, 3/9ths in the third year, and 4'9ths in the fourth year.
The recapture after a voluntary change is also generally spread over four years, but 25 percent of the
reserve is recaptured in each year.
100
27
In contrast, mutual corporations are owned by their depositors, and the equity of a mutual
corporation is derived solely from retained earnings. 101 Because depositors are the owners,
payments to depositors can include both interest and an equity return to depositors in their role as
owners. While depository institutions are generally permitted to deduct interest paid on deposits,
mutual thrifts are also allowed a deduction for amounts paid or credited to their depositors as
dividends on their accounts, including amounts that represent an equity return, if such amounts
may be withdrawn on demand subject only to customary notice of intention to withdraw. 102
These dividends, whether representing interest or a return on equity, are thus taxed only at the
depositor level. In effect, mutual thrifts, unlike other taxable depository institutions, are taxed
only on retained earnings, and not on earnings distributed to owners.
III. The History of Credit Unions' Tax Treatment
The first credit unions that appeared in the United States at the beginning of the previous
century were state chartered. When the federal income tax was first enacted, state chartered
credit unions were not specifically exempt. In 1917, however, an administrative ruling by the
U.S. Attorney General exempted these credit unions from federal income taxation. The Attorney
General ruled that the credit unions closely resembled cooperative banks and similar institutions
that Congress had expressly exempted from taxation in 1913 and 1916. 103
Congress first established a federal charter for credit unions in 1934. 104 However, that
Act did not exempt federal credit unions from the federal taxation of their income, although they
were exemPtt under the previous administrative ruling. A statutory exemption was not provided
until 1937. 05 Two reasons were given for granting this exemption: (1) that taxing credit unions
on their shares, much as banks are taxed on their capital shares, "places a disproportionate and
excessive burden on the credit unions" because credit union shares function as deposits; and (2)
that "credit unions are mutual or cooperative organizations operated entirely by and for their
members .... ,,106 Thus, the tax exemption was based primarily on the organizational form of
credit unions and ensured consistent treatment with federal thrift institutions, including mutual
savings banks.
In 1951. thrift institutions lost their tax exemption. but the credit union exemption was
retained. l07 The Senate report to the Revenue Act of 1951 stated that mutual savings banks and
101 As of June 30, 2000, there were 730 mutual savings institutions wjth $141 billion in assets. Federal
Deposit Insurance Corporation, FDIC Quarter(l' Banking Profile Graph Book (Wash., DC: second quarter 2000),
p.45.
10~ 26 U.s.c.
§ 591.
103 See General Accounting Office. Credi/ L'nlOns Reforms/or Ensuring Future Soundness (Wash, DC:
1991) (providing a brief history of the tax exemption for credit un ions).
104
Federal Credit Union Act, Pub. L. No. 467. c. 750.48 Stat. 1216 (Jun. 26,1934).
105
Pub. L. No. 416, c. 3, § 4, 51 Stat. 4 (Dec. 6,1937)
106
H.R. REP. No. 1579, 75 th Cong., I" Sess. p. 2.
107
Revenue Act of 1951, Pub. L. No. 183, § 313, 65 Stat. 490 (Oct. 18, 1951).
28
savings and loan associations were losing their tax exemption because they had evolved into
commercial bank competitors. In addition, thrifts had evolved from mutual organizations to ones
that operated in a similar manner to banks. Finally, the exemption had given thrifts a
competitive advantage over taxable commercial banks and life insurance companies.
At the present time, mutual savings banks are in active competition with commercial
banks and life insurance companies for the public savings, and they compete with many
types of taxable institutions in the security and real estate markets. As a result your
committee believes that the continuance of the tax-free treatment now accorded mutual
.
ban k s wou Id be d'Iscnmmatory.
"
108
savmgs
In the early days of[savings and loan associations], the transactions of the associations
were confined to members, and no one could participate in the benefits they afforded
without becoming a shareholder ... The fact that the members were both the borrowers
and the lenders was the essence of the "mutuality" of these organizations. Although
many of the old forms have been preserved to the present day, few of the associations
have retained the substance of their earlier mutuality ... More and more, investing
members are becoming simply depositors, while borrowing members find dealing with a
savings and loan association only technically different from dealing with other mortgage
lending institutions in which the lending group is distinct from the borrowing group ...
The grounds on which your committee's bill taxes savings and loan associations on their
retained earninffis ... are the same as those on which mutual savings banks are taxed
under the bill. I 9
IV. Estimating the Revenue Effects of Taxing Credit Unions
A. General Issues
To evaluate the effect on federal revenues of applying the present tax rules for mutual
thrifts to credit unions, we developed a model to forecast taxable credit union income for fiscal
years 2000 through 2009. The model is based upon a number of income and balance sheet items
available from the Call Reports database. These are then forecast into the future, with their
growth a function of certain macroeconomic aggregates and the size, measured in assets, of each
institution. Assumptions concerning the beha\'ior of relevant macroeconomic aggregates are
taken from the Administration's fiscal year 2000 budget forecast. I I 0
108
S. REP. No. 781, 82 d Congo 151 Sess, 25,
109
Ibid, pp. 27-28.
110 The model forecasts credit union tax re\enues in t\\ 0 steps, First, the total assets for the entire credit
union industry are projected into the future based on the I\dm In istration' s forecast for the fiscal year 2000 Budget
from February 1999. Based on this forecast. projected annual gr<mth rates are generated and then adjusted to take
into account historical differences in the growth of small and large credit unions. Because larger credit unions with
assets in excess of $1 0 million have been growing faster than smaller credit unions, the growth rate for large credit
unions is adjusted upwards and the one for small credit unions downward, Second, to reflect the variation in
income growth rates in the model, the previous year's net charge-otTs are increased by the asset growth rate and then
randomly adjusted to allow the net charge-off growth rate to be positive or negative.
29
Credit union consolidation is also addressed. Between 1992 and 1997, the number of
credit unions declined by an average of 2.7 percent. Our model assumes that trends observed
over this time period continue through 2009, and makes appropriate adjustment to the
composition of the industry with respect to asset base, income and other measures.
The exact response of credit unions to imposition of a corporate tax is unclear. Our
model therefore considers two alternate scenarios: A higher growth rate assumes that credit
unions can absorb the corporate income tax without any effect on asset growth. A lower growth
rate assumes that credit unions will pay the tax out of their retained earnings on a dollar-fordollar basis, thereby reducing their available capital and opportunity for growth. III The two
alternative rates thus serve as an upper and lower bound on the model's estimation of credit
union asset growth in the absence of a tax exemption.
Credit unions are assumed to modify their behavior to lower their taxable income without
lowering their "true" income in order to reduce their tax liability. For example, credit unions are
assumed to alter their investment portfolios to hold more tax-exempt securities in order to lower
their tax liability.
B. Estimating the Revenue Derived from Taxing Credit Unions
The estimated revenue raised by applying the federal corporate income tax to credit
unions, subject to a high and low asset gro\\1h rate, as shown in Tables 3-1 and 3-2, respectively.
Under the high growth rate assumption, we estimated that taxing credit unions would
raise $6.8 billion over a five-year period (fiscal years 2000 through 2004) and $16.2 billion over
a ten-year period (fiscal years 2000 through 2009). The vast majority of the revenue raised
would come from larger credit unions. For example, Table 3-1 suggests that credit unions with
at least $100 million in assets would account for more than 75 percent of the revenue, while
comprising just over 10 percent of the number of credit unions.
The estimated tax revenue from large credit unions increases relatively more than for
small credit unions over time, primarily because credit unions with at least $10 million in assets
have higher growth rates. This differential gW\',1h rate retlects historical patterns. As a result,
over time the income and assets of large credit unions. as well as their number, increase faster
than those of small credit unions. Moreover. consolidation results in there being fewer small
credit unions over time. Finally, the total tax liahility estimated includes the alternative
minimum tax which, because of exemptions for small corporations. generally would affect only
larger credit unions.
Similarly, the tables illustrate the re\enue effects or exempting smaller credit unions from
the imposition of any federal corporate income tax. For example. credit unions with less than
III The assumption of efficient operation Impllt:, that credit unions may not obtain the funds necessary to
pay federal income taxes on a given book of business simpl: h; Itm ering their operating expenses. Instead, paying
taxes would result in lower after-tax earnings. which would lo\\cr the rate at which credit unions retained earnings.
Lower retained earnings, in tum, means that credit union..,' net \\orth \\ould grow more slowly, and hence credit
unions could experience somewhat lower overall gro\\th.
30
$10 million in assets account for 2 percent of the revenue, although they comprise roughly 50
percent of all credit unions. Using the tables, the revenue effects of other potential thresholds
may be determined.
Table 3-1: Estimated Tax Revenue of Applying Mutual Thrift Tax Rules to Credit Unions:
High Growth Rate Assumption
(Dollar figures are in millions)
Asset Size Category
Fiscal Years 2000 - 2004
Estimated Tax
Amount
Percentage
Less than $5 million
$49
1%
$5 - 10 million
$89
$10 - 20 million
Estimated
Percentage of
Average
Number of
Institutions
Fiscal Years 2000 - 2009
Estimated Tax
Estimated
Percentage of
Average
Number of
Institutions
Amount
Percentage
38%
$86
1%
35%
1%
15%
$163
1%
14%
$186
3%
12%
$329
2%
12%
$20 - 50 million
$630
9%
17%
$1,281
8%
17%
$50 - 100 million
$696
10%
8%
$1,569
10%
10%
$100 - $500 million
$2,474
36%
9%
$5,559
34%
11%
Greater than $500 million
$2,688
40%
2%
$7,211
45%
2%
Total
$6,811
100%
100%
$16,200
100%
100%
Source: Treasury estImates usmg CredIt UnIon Call Report data obtamed from Sheshunoff InformatIon ServIces
One Source. See text for information about the model and underlying assumption used to generate these
estimates.
Revenue estimates using the lower groVvth rate are shown in Table 3-2. In this case.
credit union tax revenues are estimated to be $6.1 billion between fiscal years 2000 and 2004. or
approximately 10 percent less than with the higher gro\\th rate. For fiscal years 2000 to 2009 the
estimated tax revenue would be approximately $13.7 billion. or IS percent less than when using
the higher growth forecast. The tax revenue gap between the high and low growth scenarios
widens over time because the growth rate for large credit unions. which has a disproportionate
effect on overall industry growth rates. is approximately one-third less than under the high
growth rate scenario. As with the high groVvth rate estimate. the vast majority of revenue raised
comes from larger credit unions.
31
Table 3-2: Estimated Tax Revenue of Applying Mutual Thrift Tax Rules to Credit Unions: Low
Growth Rate Assumption
(Dollar figures are in millions)
Fiscal Years 2000 - 2004
Asset Size Category
Estimated Tax
Estimated
Percentage of
Average
Number of
Institutions
Amount
Percentage
Less than $5 million
$49
1%
$5 - 10 million
$90
$10 - 20 million
Fiscal Years 2000 - 2009
Estimated Tax
Estimated
Percentage of
Average
Number of
Institutions
Amount
Percentage
39%
$89
1%
36%
2~o
15%
$165
1%
14%
$209
3%
14%
$387
3%
13%
$20 - 50 million
$609
10%
16%
$1,262
9%
17%
$50 - 100 million
$662
11%
8%
$1,418
10%
9%
$100 - $500 million
$2,236
37%
8%
$4,989
36%
9%
Greater than $500 million
$2,222
37%
2%
$5,410
39%
2%
Total
$6,078
100%
100%
$13,719
100%
100%
Source: Treasury estImates USIng CredIt UnIon Call Report data obtaIned from Sheshunoff InformatIOn ServIces
One Source. See text for information about the model and underlying assumption used to generate these
estimates.
V. Conclusion
In laws enacted in 1913 and 1916. Congress expressly exempted mutual thrifts from
federal corporate income tax. Congress extended that exemption to credit unions in 1937,
although an administrative ruling in 1917 gave credit unions an effective exemption from
taxation. In 1951, Congress decided that mutual thrifts had evolved into direct competitors with
banks and removed the tax exemption in order to pro\"ide greater competitive equity between
banks and mutual thrifts.
If Congress decided to remove credit unions' tax exemption. credit unions would receive
the same treatment under the federal corporate income tax code as do mutual thrifts. We
estimate that removing the exemption v;ould raise between $6.1 billion and $6.8 billion over five
years, and between $13.7 billion and $16.~ billion over ten years.
32
CHAPTER 4
PRESERVING THE GROWTH AND VIABILITY
OF SMALL BANKS
Section 403 of the Credit Union Membership Access Act directed the Treasury
Department to submit a report to Congress containing:
•
recommendations, as the Secretary deems appropriate, that would reduce and simplify the tax
burden (1) on insured depository institutions with less than $1 billion in assets and (2) on
banks with assets equal to or in excess of $1 billion, but not greater than $10 billion; and
•
any other recommendations that the Secretary deems appropriate that would preserve the
growth and viability of small banks. I 12
The Administration has, throughout its tenure, taken meaningful steps to preserve the
growth and viability of small banks. Its first efforts came during the first weeks of the
Administration and additional efforts continue to this day. Many of these actions have reduced
the regulatory costs and improved the quality of bank regulation. We believe that we have taken
those actions best tailored to furthering these aims. Thus, we recommend no new policy
initiatives in this area at this time.
We highlight below some of the ways in which the Administration has implemented
policies that promote the growth and viability of small banks, and then address issues
surrounding the taxation of small depository institutions under Subchapter S of the Internal
Revenue Code.
I. Administration Accomplishments
A. The Credit Availability Program
On March 10, 1993, shortly after taking office. the President unveiled the Credit
Availability Program (CAP), which created a better climate for bank lending. At that time, the
country was in the midst of a slow economic reco\,ery, and the CAP improved the availability of
credit, particularly to small- and medium-sized businesses. farms, and low-income communities.
Largely in place within 90 days of the President's announcement, the CAP addressed: (1) real
estate lending and appraisals; (2) appeals of examination decisions and complaint handling; and
(3) examination processes and procedures.
At that time, some were concerned that costly formal appraisals may have been rendering
otherwise sound loans uneconomical. Three significant changes resulted. First, the bank
regulatory agencies increased from $100.000 to $250.000 the threshold level at or below which
certified or licensed appraisals would not be required for a real estate-related transaction. They
identified additional circumstances, particularly for small business lending, in which appraisals
112
Pub. L. No. 105-219, 112 Stat. 913.935 (Aug. 7,1998) .
.,.,
jj
are not required. Finally, they permitted renewals and refinancings without an appraisal if there
had been no deterioration in market conditions.
The agencies also revamped their appeals processes to ensure that bankers had a fair and
prompt review of examination disagreements. The OCC and the OTS have each created an
Office of Ombudsman, which manages the appeals process. The OCC has also revamped its
procedures for handling the nearly 15,000 general complaints it receives annually. For example.
it has established a toll-free number and improved its complaint tracking system.
Third, the regulators have begun to coordinate many of their interactions with the
industry. For example, they have determined that examinations will be conducted by the primary
federal regulator. Moreover, the OCC and the FDIC share examination schedules to better
coordinate the supervision of holding companies with both national and state-chartered banks.
and coordinate enforcement actions.
B. Streamlining Compliance with the Bank Secrecy Act
Treasury and the federal banking regulators promulgate regulations to implement the
Bank Secrecy Act, which Congress passed to combat money laundering. Proper enforcement
requires adequate recordkeeping on the part of financial institutions to support federal
prosecutions of money launderers. Working with a Bank Secrecy Act Advisory Group,
composed of 30 representatives of financial institutions and federal and state regulatory and
enforcement officials, Treasury pared down the amount of required recordkeeping. Treasury
eliminated the requirement that institutions record and retain for five years special records of all
cash purchases of travelers checks, bank checks. and cashier's checks over $3,000. Proposed
regulations that would have required mandatory electronic filing of currency transaction reports
(CTRs), and would have established a mandatory system to "aggregate" cash transactions, were
withdrawn. Treasury also streamlined by 30 percent the CTR. a form long criticized as too
cumbersome by bankers.
C. A-to-Z Review of Regulations
Pursuant to a Presidential directive. each regulatory agency within the government
undertook a line-by-line review of its regulations with the goal of eliminating redundant and
unnecessary requirements, streamlining procedures. and rewriting rules to be more easily
understood. The OCC and OTS have both completed this review and are in the process of
putting their regulations into plain English.
There are concrete examples of the burden-reducing benefits resulting from this intense
review. The OCC and OTS reduced. by six times. the number of lending limit calculations
institutions must perform, requiring quarterly. rather than daily. analyses. The GCC has also
reduced some of its fees and its national bank assessment rate. which covers the cost of
examination and supervision. For example. the fee for establishing a shared automated teller
machine has been reduced from $1.500 to zero. corporate application fees have been reduced by
50 percent, and the national bank assessment rate has been reduced by six percent.
34
D. Refocusing Supervision
Our nation's thousands of depository institutions vary greatly in size, complexity, and
financial strength. Yet, regulations often ignore these differences by treating all institutions
alike, and relying on generally applicable procedures. This provides institutions with little
regulatory incentive to reduce risk or increase their capacity to manage risk. It also creates
needless regulatory burden and costs when rules are inappropriate, irrelevant, or even
counterproductive as applied in certain instances.
The oee and OTS have been working diligently to make appropriate differentiations in
their regulations. For example, both bureaus have streamlined the examinations process for
smaller, well-capitalized, well-managed institutions. Materials requested for noncomplex small
national bank examinations have been reduced by nearly 600 percent, from some 200 items (or
more at the examiner's discretion) to 35 standardized items. Moreover, the streamlined nature of
such examinations is evidenced from the oee small bank examination handbook, which has
been reduced from 1,216 pages to just over 30 pages. In addition, small, well-capitalized, wellmanaged savings associations need no longer automatically obtain a costly annual independent
audit.
The difficulty of supervising a diverse banking industry has also led regulators to focus
on eliminating and streamlining procedures. The Administration has worked to refocus
supervision on results instead, and to thereby provide institutions with the incentive to perform
well, rather than simply to avoid criticism or follow needless procedures. In this vein, the oee
revised its examination guidelines to emphasize operational results, such as default rates, rather
than operational procedures, such as loan underwriting.
E. Streamlining
eRA Rules
Responding to complaints about how the eRA has been implemented over the years, the
President, in 1993, called on the federal banking agencies to rewTite their eRA rules to stress
performance, not paperwork. In 1995. after one of the most comprehensive joint rule-making
efforts the regulators have ever conducted. the agencies promulgated final regulations.
culminating a lengthy process in which they sought and obtained the input of thousands of
interested parties, including banks. savings associations. trade associations. customers. and
community groups. The regulators recei\'l~d (ner 6.70() comments in 1993 and over 7,200 in
1994. The new rules provide real incenti\'es j()r derository institutions to serve all our
communities, and a streamlined, straightforward rrncess j()r assessing their success.
F. Regulatory Burden Relief Legislation
In 1996. the Administration worked with Congress on regulatory burden relief legislation
and supported the final passage of the Economic (i[(mth and Paperwork Reduction Act. The
Act included nearly 300 pages of regulatory burden rei iet' legislation. Among other things. the
1996 Act streamlined the home mortgage lending process and eliminated numerous unnecessary
regulatory requirements, such as eliminating the need to tile a branch application to establish an
ATM.
35
G. Simplifying Small Bank Capital Standards
Most recently, the federal banking agencies published an interagency advance notice of
proposed rulemaking that will lead to simplified capital requirements for small banks.l I3 The
purpose. of the proposal is to develop a simplified capital framework that will reduce the
regulatory burden on smaller non-complex banks and thrifts.
II. Eligibility of Depository Institutions for Taxation Under Subchapter S
In generaL U.S. tax law treats corporations and their investors as separate taxable entities.
Corporate earnings are taxed first at the corporate level and again at the shareholder leveL as
dividends if the corporation distributes earnings to shareholders, or as capital gains from the sale
of stock. In contrast, the earnings of S corporations are taxed only once at the shareholder leveL
whether or not the income is distributed. Corporations that elect Subchapter S status are subject
to certain restrictions on the number of shareholders and capital structure. For example, an S
corporation may not have more than 75 shareholders, all of whom must be U.S. resident
individuals (except for certain trusts and estates) and may issue only one class of stock. Prior to
1996, banks and other depository institutions could not elect S corporation status. A provision of
the Small Business Job Protection Act of 1996 repealed this prohibition.
By the end of 1999, more than 1.260 banks were operating as S corporations. These
institutions represent over 15 percent of U.S. banks but only about 2 percent of banking assets,
suggesting that smaller institutions have been among the first to elect S corporation status. This
strong response by smaller banks suggests that Subchapter S offers considerable advantages in
terms of more favorable tax treatment and 100ver compliance burdens.
In view of a continuing, and perhaps even accelerating. election of Subchapter S status by
small banks, additional modifications intended to reduce or simplify the tax burden of smaller
banks may be premature at this time. In addition. they may raise tax policy concerns with
respect to their effect on S corporations in other industries and concerns about their potential
effect on the competitive position of all S corporations. including small banks. Ifpolicy changes
are considered. however. they should satisfy t\\O hroad reLJuirements:
First, any additional measures to simplif: the ta.\ treatment of small banks must be crafted
with a recognition that small businesses electing Suhchapter S status playa vital role in the U.S.
economy. and that only a small number of these lirms an: hanks. In fact. banks and depository
institutions account for less than one percent PI' all entities electing Subchapter S status. Thus.
any changes to Subchapter S in order to Jccommpdate small hanks must not complicate or
otherwise disrupt the broader effect of Suhchapter S to henetit a small number of firms in one
specific industry.
In addition, proposed modifications to Suhchapter S must be evaluated with respect to
potential effects on the competitive environment laced hy smaller banks. As noted above. the
II]
65 Fed. Reg. 66.193 (Nov 3.2000)
36
first firms to elect Subchapter S treatment have been disproportionately smaller banks. The
expressed intent of the Small Business Job Protection Act of 1996 was to protect the viability of
such institutions; further modifications to Subchapter S that would permit larger banks with
greater access to capital to elect simplified treatment may be inconsistent with this aim.
Unfortunately, some proposals offered in recent years are intended specifically to facilitate the
election of Subchapter S status by larger depository institutions.
37
,
DEPARTMENT
.
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
January 18, 2001
TREASURY RELEASES REPORT ON CAPITAL ACCESS PROGRAMS
The Treasury Department on Thursday released the third edition of a report summarizing the
nationwide performance of state-run Capital Access Programs (CAPs). The new statistics show
that CAPs lending in 1999 totaled $212 million, and that through June 2000 the cumulative
volume of CAPs loans originated climbed to over $1.5 billion.
CAPs are lending programs in which participating states and municipalities make contributions
to lenders' loan loss reserve pools, allowing lenders to make slightly more challenging small
business loans than they would using conventional underwriting. The report, an update of
editions released in late 1998 and 1999, details a projected 25 percent growth in CAPs loan
volume in 2000 for the 20 states and 2 municipalities that operate these programs.
The report also reviews CAPs performance in successfully encouraging lending to minorityowned businesses and businesses in low-to-moderate income communities, and examines the key
aspects of the largest state CAPs, including active marketing to banks and adequate state
appropriations.
"The results of Treasury's survey and the 14-year track record of CAPs confirm that these
programs provide an important source of capital for small businesses that may otherwise be
unable to obtain financing," said Michael S. Barr, Deputy Assistant Secretary for Community
Development Policy. "The fact that new states are adopting CAPs every year signals that these
programs provide a cost-efficient and simple way to promote the growth of small businesses."
The report features the results of a survey conducted of the following states and municipalities
that operate CAPs: Arkansas, California, Colorado, Connecticut, Delaware, Florida, Illinois,
Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, New York City, North Carolina,
Akron (OH), Oklahoma, Oregon, Pennsylvania, Texas, Vermont, Virginia and Wisconsin. In
2000 and 2001, CAPs were initiated in Hawaii, Louisiana and Maryland.
The report is available on the Treasury website at www.ustreas.gov/reports/cap.pdf
-30-
LS - 1131
Forpress releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Governrnent Printing Office: 1998· 619-559
NEWS
TREASURY
ORFICE OF "{jULie ,\Ff',\lRS-ISOO Pli:NNSYLV,\NI.\·\VHNUK. :'II.W•• WASlU;o.;GTON, O.C .• 20.lZ0-(ZOZ) ('.;!Z·Z.,611
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Una Gallagher
202-622-2960
" IMMEDIATE RELEASE
luary 18, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS
Today, Treasury completed a debt buyback (redemption) operation for $1,750 million
of its outstanding issues. A total of 12 issues maturing between November 2022 and
'~er 2027 were eligible for this operation. The settlement date for this operation will
January 22, 2001. Summary results of this operation are presented below.
(amounts in millions)
era Received (Par Amount) :
era Accepted (Par Amount) :
al Price Paid for Issues
(Less Accrued Interest) :
ber of Issues Eligible:
For Operation:
For Which Offers were Accepted:
.hted Average Yield
of all Accepted Offers (%):
$5,242
1,750
2,120
12
10
5.597
~hted
Average Maturity
for all Accepted Securities (in years) :
24.1
lils for each issue accompany this release.
-1132
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
January 18, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS
(amounts in millions, prices in decimals)
Table I
Highest
Accepted
Price
Weighted
Average
Accepted
Price
Coupon
Rate {~l
Maturity
Date
Par
Amount
0 ff ere d
Par
Amount
Accented
7.625
7.125
6.250
7.500
7.625
6.875
6.000
6.750
6.500
6.625
6.375
6.125
11/15/2022
02/15/2023
08/15/2023
11/15/2024
02/15/2025
08/15/2025
02/15/2026
08/15/2026
11/15/2026
02/15/2027
08/15/2027
11/15/2027
649
391
212
428
455
500
493
555
420
200
367
572
260
136
0
368
350
129
0
365
30
35
20
57
125.468
119.265
N/A
124.937
126.656
116.937
N/A
115.562
112.218
114.015
110.750
107.406
125.416
119.256
N/A
124.881
126.629
116.904
N/A
115.525
112.218
113.971
110.742
107.378
Weighted
Average
Accepted
Yield
Par Amount
Private1v He1d*
5.593
5.595
N/A
5.596
5.597
5.600
N/A
5.600
5.599
5.600
5.594
5.590
6,984
14,709
21,116
8,545
9,950
10,079
11,723
8,845
9,729
9,331
8,756
19,277
Table II
Coupon
Rate (%)
Maturity
Date
CUSIP
Number
Lowest
Accepted
Yield
7.625
7.125
'6.250
7.500
7.625
6.875
6.000
6.750
6.500
6.625
6.375
6.125
11/15/2022
02/15/2023
08/15/2023
11/15/2024
02/15/2025
08/15/2025
02/15/2026
08/15/2026
11/15/2026
02/15/2027
08/15/2027
11/15/2027
912810EN4
912810EP9
912810EQ7
912810ES3
912810ET1
912810EV6
9128l0EW4
912810EX2
912810EYO
912810EZ7
912810FA1
912810FB9
5.589
5.594
N/A
5.592
5.595
5.598
N/A
5.598
5.599
5.596
5.593
5.588
Total Par Amount Offered:
Total Par Amount Accepted:
5,242
1,750
Note: Due to rounding, details may not add to totals.
*.~ount
outstanding after operation. Calculated using amounts reported on announcement.
TREASURY
NEWS
OFfICE 0'1 PUBLIC AF'FAIJtS -l500 PENNSYLVANIA AVENOE, N.W. - WASHINGTON, D.C.- 20220 _ (202) 622.2960
EllBAJ,GOED 'ON'l'XL 2: 30 P .11.
CON'l'ACT:
January 18, 2001
Office of Financing
202/691-3550
TlU!:AStrRY OFFERS 13-WEElt AND 2G-WEElt BXU.S
The
auction two series of Treasury bills totaling
$24,000 Bdllion to refund $19,360 million of publicly held
securities maturing January 25, 2001, and to raise about $4,640 million of new
cash.
~reasur,y wi~~
app~~;mately
In addieion eo ~a public holdings, Federal Reserve Banks for thair.own
accounts hold $8,976 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders. Amounts issued
to these accounts will be in addition to the offeringamcunt.
The maturing bills held by the PQbl~c include $5,687 ~llion held
Federal Reserve Banks as agents for foreign and inter.national monetary
authorities, which may be refunded within the offering amount at the highest;
discount rate of accepted cCllQpetitive tenders. Additional UIQW1ts may be
issued for such accOUD~S if ~he aggregate amount of new bids exceeds the
a~gregate amount of maturing bills.
by
Xreasur.y.Direce customers reques~ed ~hat we reinvese ~ha1r maturing ho~d
ings of approximately $929 million into the 13-week bil~ and $853 million into
the 26-week bill.
offering,of ~reasury securities is governed by the ter.ms and conforth ~ ehe onifor.m Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notas, and Bonds (31 en Part 356, as
amended) •
~is
ditions
se~
Details about eaCh of the new securities are given in the attached
offeriDg ~9h1i9bts.
000
AttaebmeJlt
LS-1133
For press releases, speeches, public schedules and official biographies, call our 24-hou.r faz line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED JANUARY 25, 2001
January 18, 2001
Offering Amount •••••••.••••.•••••••••••• $13,000 million
Description of Offering:
Term and type of s.curity ••••••••••••.•• 91-day bill
CUSIP nwnber •••••••••••••••.••••.•.••••• 912795 GD 7
Auction date ••••••••••.•.••.••••••.••••• January 22, 2001
Issue date •..••••••••••••••.•.•••.•.•.•• January 25, 2001
Maturity dat ••••••.•••.•••••••.•.••••••• April 26, 2001
Original issue dat ••••.••••.•••••••••.•• Octob.r 26, 2000
Currently outstanding •••••••••••.••••.•• $14,658 million
Minimum bid amount and multiples •••••••• $1,000
$11,000 million
182-day bill
912795 HD 6
January 22, 2001
January 25, 2001
July 26, 2001
January 25, 2001
$1,000
Tbe follOwing rul •• apply to all s.curities mentioned above:
Submission of Bids:
Noncompetitive bids ••••••••• Acc.pted in full up to $1,000,000 at the highest discount rate of
accepted comp.titive bids.'
Competitive bids •••••••.•••• (1) Hust be expressed as a discount rate with three decimals in
increments of .005%, e.g., 7.100%, 7.105%.
(2) Net long position for each bidder must be reported wheD the sum
of the total bid amount, at all discount rates, and the net long
position is $1 billion or greater.
(3) N.t long position must be determined as of one half-hour prior
to the closing time for receipt of competitive tenders.
Maximum Recognized Bid
at a Single Rate •••••••.•.•• 35% of public offering
Maximum Award ••••••••••••••••••• 35% of public offering
Receipt of Tenders:
Noncompetitive tenders •.•••• Prior to 12,00 noon eastern standard time on auction day
Competitive tenders •.••••••• Prior to 1.00 p.m. eastern standard time on auction day
Payment Terms I By charge to a funds account at a ~eaeral Reserve Bank on issue date, or payment
of full par amount w!tb tender. TreasUr.y.D1rec~ customers can use the Pay Direct feature which
authorizes a charge to their account of r.cord at their financia1 institution on issue date.
The United States Department of Justice
The United States Department of Treasury
FOR l1v1MEDIATE RELEASE
TIIURSDAY, JANUARY 18,2001
WWW.USDOJ.GOV
AG
(202) 616-2777
(202) 622- 2960
TDD (202) 514-1888
DEPARTMENTS OF JUSTICE AND TREASURY RELEASE NATIONAL
INTEGRATED GUN VIOLENCE REDUCTION STRATEGY
WASHINGTON, D.C. - The Departments of Treasury and Justice today released the
National Integrated Fireanns Violence Reduction Strategy (The National Strategy). The National
Strategy represents the coordinated multi faceted approach to reducing gun violence that the
Clinton Admjnistratlon has implemented. Building on the histone reduction in crime over the
past eight years, the National Strategy also presents common sense gun violence reduction
legislation needed to correct limitations in current fueanns laws.
I
In March of 1999, Presjdent Clinton asked the Secretary of the Treasury and the Attorney
General to build on effective and innovative programs and to establish local strategies to respond
to particular gun violence problems facing individual communities across the country. In
response to the President's directive, the United States Attorneys and the Bureau of Alcohol,
Tobacco and Firearms CATF) Field Division Directors, working with loca1law enforcement and
the community, established and implemented gun violence reduction plans in each of the 94
federal judicial djstricts. These local plans describe the on-going efforts, innovative initiatives
and best practices that are a cornerstone of the National Strategy.
"The National Strategy demonstrates that tough enforcement of the gun laws at the state
and federal level has kept guns out of the wrong hands and has put firearms offenders behind
bars," said Attorney General Janet Reno. "Over the past eight years, we established
unprecedented collaboration with our state and loca1law enforcement partners. Working
together, we effectively aJ.ld efficiently investigated and prosecuted violent crime offenders. I
am very proud of the record we have achieved. As a nation, we must continue to build on what
works and ensure that gun violence continues to decline."
"Through ATF's leadership and close working relationship with state and
local law enforcement and prosecutors, we have demonstrated the importance
of firearms enforcement at every link in the chain of gun crime from illegal
sale and acquisition to illegal possession and use," said Treaswy Secretary
IS--ll34
Lawrence H. Summers. "Thai comprehensive enforcement commitment must
continue."
The National Strategy addresses each link in the chain of gWl violence -- illegal sale,
acquisition, possesslon and use of firearms -- and sets forth. a six-part approach to eliminating the
scourge of gun violence by:
vigorously investigating and prosecuting those who commit gun crimes;
breaking the cycle of violence by punishing violent offenders and reducing
recidivism;
•
combating illegal trafficking and possession of fireanns;
investing in law enforcement technology;
•
preventing gun accidents and suicides; and
enacting new laws to close loopholes in existing federal law.
The National Strategy acknowledges that, even with adequate resources and aggressive
use of the tools currently available to federal law enforcement, gaps still exist in federal fueanns
laws that must be addressed to achieve a lasting reduction in gun violence.
Therefore, the Clinton Administration's National Strategy sets forth crucial legislative
proposals, such as addressing the secondary market in fireanns by closing the gun show
loophole, limiting firearms purchases to one handgun a month, licensing handgun purchasers to
ensure that they have adequate gun safety training, and strengthening criminal penalties for
anned career criminals, firearms traffickers, andjuvenile offenders. These new laws, combined
\vith Our strategic collaborations with state, local and tribal law enforcement, will help to further
reduce gun violence in this nation and to fulfill our duty. to try to keep our streets and
communities safe.
The Treasury Department today also announced the results of ATF regulatory
enforcement actions lUldertaken in February 2000, initiated in response to findings published in
ATF's annual report on Commerce in Firearms in the United States (Firearms Commerce report).
The Fireanns Commerce report showed that only 1.2 percent of federal fireanns licensees (FFL)
accounted for over halfthe crime guns traced to current FFLs. It also indicated that some FFLs
failed to cooperate with ATF crime gun trace requests, hindering ATF's tracing and other
enforcement activities, and that ATF's inability to trace re-sold guns was a major enforcement
problem.
In response to these findings, ATF took a series of regulatory actions. ATF inspected the
more than one thousand FFLs who in 1999 had the highest number of crime gun traces or had
failed to cooperate with A TF trace requests. Nearly half of these FFLs had Gun Control Act
violations serious enough to require further A TF action. A TF recommended license revocation
for 20 FFLs and made nearly 700 referrals to ATF special agents for criminal investigation.
ATf's inspections also disclosed over 13,000 missing guns, associated with about 200 FFLs (20
percent of those inspected). ATF also obtained supplemental records from certain lmcooperative
FFLs and fTom others with large numbers of short time-to-cnme traces, that produced 750 crime
gun traces, most involving used guns. These investigative leads have been forwarded to local
and state law enforcement offices for further action.
The National Strategy is available through Treasury and Justice Public Affairs and at
www_atf.treas.gov al1d http://ww\v_usdoj.gov/opdlgunviolence_htm.
###
01·32
;rUDY FINDS THAT CRAlS l-IELPING TO STRENGTHEN AMEPage I of 2
TREASURY RELEASES FINAL REPORT ON THE COMMUNITY
REINVESTMENT ACT: STUDY FINDS THAT CRA IS HELPING TO
STRENGTHEN AMERICA'S COMMUNITIES IS - AND WILL
CONTINUE TO BE - AN IMPORTANT TOOL FOR COMMUNITY
LENDING UNDER THE GRAMM LEACH BLILEY ACT
JANUARY 2001
)day, the Treasury Department delivered its final report to Congress on the
.pact of the Gramm-Leach-Bliley Act (GLB Act) on the provision of services to
nerica's communities under the Co.ml11unity Reinvestment Act (CRA). The
)ort provides new evidence that CRA has had a positive and significant impact
bank and thrift home purchase and refinance lending to low- and moderate~ome communities and .individuals over the last several years. It also finds that
~ will continue to encourage federally insured depository institutions to serve
~ home-ownership, small business, community development, and financial
:-vices needs of communities across the nation.
easury now submits the second of two reports required by the GLB Act, which
ntains preliminary findings about the likely effects of the GLB Act on the
livery of services under CRA. These findings are based upon industry
erviews, an econometric analysis of factors affecting financial institutions'
rres of CRA originations, and metropolitan-area case-studies, because
antitative data on the impact of the GLB Act is not likely to be available for
{eral more years.
is report is theThe report study was co-authored by a team of experts
:luding: Robert E. Litan, Vice President and Director of Economic Studies at
e Brookings Institution, Nicolas Retsinas and Eric Belsky, Director and Executive Director,
)ectively, of the Joint Center for Housing Studies at Harvard University, and Gary Fauth, Paul
onard, and Maureen Kennedy, independent economic and housing experts.
~asury Department staff guided the study, and received input and advice from
~ federal banking regulators. Key findings of the report include the following .
• Interviews with major financial institutions suggest that the GLB Act CRA
performance will remain strong under the GLB Act. will not likely change
eRA performance in the future While it is too soon to quantify the impact of
financial modernization the GLB Act on the CRA performance of the
banking industry, Tthose the institutions interviewed - comprising som~ of
the nation's largest financial service institutions - stated that they most lIkely
to be in the vanguard of capitalizing capitalize on the broadened powers of
:llwww.treas.gov/press/releases/psI135.htm
01/23/2001
STUDY FJNflS THAT eRA-IS HELPING TO STRENGTHEN AM Page 2 of2
financial service holding companies to diversify into a broader line of
products under the new law intend to continue to meet the credit needs of
comply with CRAlow-and moderate-income communities and individuals.
Some of the institutions indicated that the GLB Act requirement that firms
have at least a satisfactory CRA rating to pursue new financial opportunities
has increased their pressure to perform at the" outstanding" level. broaden
their efforts to meet the credit needs of low- and moderate-income
communities and individuals. Something more about Sunshine.
• The reporting provisions in the GLB Act are expected to lead to modestly
higher compliance costs. Nearly all of the traditional-banking institutions
interviewed reported the disclosure and reporting provisions will likely
increase their paperwork and staffing requirements in order to comply with
the requirements. Most reported that the requirements would not affect the
institution's level of eRA activity.
• Metropolitan level statistical analysis demonstrates that eRA has had a
favorable impact on home purchase lending to low- and moderate-income
communities and individuals. While recognizing that other variables,
including economic conditions of local areas, playa key role in encouraging
eRA lending, the statistical analysis demonstrates that eRA is a significant
factor in providing credit for home purchase loans.
• eRA lenders and their affiliates, adjusting for differences in product
specialization, increased their home purchase lending to low- and
moderate-income individuals and communities faster than independent
non-bank lenders. Even after netting out non-bank affiliates acquired after
1993, eRA lenders and their affiliates increased their prime home purchase
lending by 9.0 percent and their subprime and manufactured housing lending
by 79.6 percent while independent non-bank lenders increased theirs by only
6.7 percent and 36.6 respectively. Had eRA lenders and their affiliates
grown their prime and other lending at the slower rates of independent nonbanks, they would have advanced about one-fifth fewer home purchase loans
to low and moderate income individuals and communities.
• Interviews with experts in Boston, Detroit, Denver, and Houston metropolitan areas chosen for more in-depth analysis - provide further
evidence that eRA has played a role in the expansion of lending to lo.w.and moderate-income individuals in each of those regions. Lenders, CIVIC
leaders, and public officials alike believe that eRA has made a substantial
difference in the behavior of lending institutions and in credit flows to lowand moderate-income communities.
Ilwww.treas~v1press/releases/psl135.htm
01/23/2001
,
DEPARTMENT
OF
THE
"
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
Friday, January 19,2001
TREASURY, JUSTICE AND OMB RELEASE STUDY ON FINANCIAL PRIVACY IN
BANKRUPTCY
Today, The Treasury and Justice Departments along with the Office of Management and
Budget announced the release of an important study of the protection of personal financial
information which could be disclosed to the general public in a consumer bankruptcy proceeding.
Directed by President Clinton in April 2000, the study fmds that sensitive personal
information, such as bank account numbers and balances that are protected typically in other
instances are often available in bankruptcy files. Therefore The Departments of Treasury and
Justice along with the Office of Management and Budget are recommending that privacy
protections be increased for individuals in the bankruptcy system.
The study 'calls for a balanced approach that will protect individual privacy while
improving the effectiveness of the bankruptcy system. New bankruptcy information policies
should limit the amount of highly sensitive personal financial data available in public case files
to prevent identity theft and other abuse. At the same time, adequate information should remain
publicly available to ensure the full accountability of the bankruptcy system. Parties with claims
in bankruptcy should continue to have full access to all of the information they need to pursue
those claims, subject to appropriate re-use and re-disclosure provisions.
The study is available on Treasury's web site at www.treas.gov.
LS-1136
Fl11" press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U,S. Government Printing Olt,ce: 1998· 619·559
Study Findings
The study finds that financial information in personal bankruptcy proceedings is generally
available to the public without restriction. However, some of this information, such as details
about a debtor's financial accounts, is highly sensitive, and individuals have a privacy interest in
such information that is not adequately recognized in the current system.
At the same time, access by creditors to detailed financial information is essential for the
efficient operation of the bankruptcy system, as is access by governmental entities for law
enforcement and other purposes. Public access to some information about bankruptcies plays an
important role in the accountability of the system as a whole.
Finally, increased use of electronic information systems in bankruptcy proceedings can make the
system more efficient, but may entail additional privacy protections in order to avoid large
increases in the level of disclosure of sensitive personal data. Widespread access to such
sensitive information can provide unwarranted opportunities for harm to consumers and other
abuses.
Study Recommendations
Based on these findings, the study agencies recommend, among other measures, that:
_ The protection of personal privacy should be given greater emphasis in the bankruptcy
system.
_ The general public should have access to core information about personal bankruptcies such as the fact that an individual has filed for bankruptcy and the identities of parties in
interest - in order to ensure the accountability of the system.
Access to other detailed information, such as bank account numbers and detailed profiles of
personal spending habits, should be limited.
_ Creditors and other parties in interest in bankruptcies should continue to have access to
detailed information about individual bankruptcies in order to pursue their legitimate claims
as efficiently as possible.
However, private entities granted such access should be subject to re-use and redisclosure
protections that restrict the use of the information to the pursuit of claims in a given
bankruptcy proceeding.
Any new system developed to address the flow of data in personal bankruptcies should
incorporate widely-recognized fair information principles, such as rights to access and
correction and appropriate data security safeguards.
Finally, any policy regarding sensitive financial information in personal bankruptcies should
not infringe upon the current ability of law enforcement and governmental entities to have
access to and use of this information.
D EPA R T l\I[ E N T
0 F
THE
T REA SUR Y
NEWS
TREASURY
omCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
January 19,2001
Contact: Office of Public Affairs
(202) 622-2960
U.S., HUNGARY TO NEGOTIATE NEW INCOME TAX 1'1lEATY
I
The United States and the Republic of Hungary have scheduled negotiations of a new
income tax treaty. The negotiations are scheduled to take place in Budapest the week of March
5, 2001. The new treaty would replace the treaty currently in force between the two countries,
which was signed on February 12, 1979.
There have been substantial changes in the tax laws of both countries during the past
twenty-two years and the present treaty no longer adequately reflects current treaty policies of
the U.S. and Hungary. The negotiations will be based on the U.S. and OECD model treaties.
The treaty will deal with the taxation of income from business activities, investment, and
personal services. It will contain provisions to avoid double taxation, ensure nondiscrimination,
and prevent treaty shopping. It will also provide for exchange of information and other
administrative cooperation between the tax authorities of the two countries.
, The Treasury Department invites written comments from the public regarding the
upcoming negotiations. Comments should be sent to Manal Corwin, Acting International Tax
Counsel, Room 1000 Main Treasury Building, Washington, D.C. 20220. Comments may also be
sent by fax to (202) 622-0646, or bye-mail to ManaI.Corwin@do.treas.gov.
-30LS-1l37
F(Jf' press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Printing Offoce: 1998· 619·559
-
DEPARTlVlENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C .• 20220. (202) 622-2960
FOR llvlMEDIATE RELEASE
January 19,2001
Contact: Office of Public Affairs
(202) 622-2960
U.S., AUSTRALIA TO NEGOTIATE REVISION TO INCOME
"
~~'AX
TREATY
The United States and Australia have scheduled the negotiation of a revision to their
current income tax treaty. The negotiations are scheduled to begin in Canberra on March 26,
2001. The revision would modify the treaty currently in force between the two countries, which
has been in effect since 1983. The two Governments have decided that the current treaty needs
to be updated to take into account developments in both countries' tax systems and tax treaty
policies.
The Treasury Department invites written comments from the public regarding the
upcoming negotiations. Comments on the proposed treaty revision should be sent to Manal
Corwin, Acting International Tax Counsel, Room 1000 Main Treasury, Washington, DC 20220,
with a copy to Patricia A. Brown, Deputy International Tax Counsel, Room 4224 Main
Treasury,Washington, DC 20220. Comments may also be sent by fax to (202) 622-0646, or by email to Mana1.Corwin@do.treas.gov, with a copy to Patricia.A.Brown@do.treas.gov.
-30LS-1138
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Printing ONlce 1998 - 619-559
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt· Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
:)R IMMEDIATE RELEASE
anuary 22, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
9l-Day Bill
January 25, 2001
April 26, 2001
912795GD7
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
5.090%
Investment Rate 1/:
5.229%
Price:
98.713
All noncompetitive and successful competitive bidders were awarded
,curities at the high rate.
Tenders at the high discount rate were
Llotted 22%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
$
23,735,172
1,337,712
$
1,050,000
1,050,000
26,122,884
13,007,243
4,422,217
4,422,217
Foreign Official Refunded
SUBTOTAL
10,619,531
1,337,712
11,957,2432/
25,072,884
PUBLIC SUBTOTAL
Federal Reserve
Foreign Official Add-On
TOTAL
Accepted
Tendered
Tender Type
o
o
$
30,545,101
$
17,429,460
Median rate
5.080%: 50% of the amount of accepted competitive tenders
s tendered at or below that rate.
Low rate
5.070%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
d-to-Cover Ratio = 25,072,884 / 11,957,243 = 2.10
Equivalent coupon-issue yield.
Awards to TREASURY DIRECT = $1,026,173,000
http://www.publicdebUreas.gov
-1
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt· Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
8R IMMEDIATE RELEASE
anuary 22, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
January 25, 2001
July 26, 2001
912795HD6
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.920%
High Rate:
Investment Rate 1/:
Price:
5.115%
97.513
All noncompetitive and successful competitive bidders were awarded
=curities at the high rate.
Tenders at the high discount rate were
Llotted 92%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
$
Competitive
Noncompetitive
Foreign Official Refunded
SUBTOTAL
Federal Reserve
Foreign Official Add-On
$
6,167,100
1,185,580
7,352,680 2/
3,655,000
3,655,000
22,508,510
11,007,680
4,553,860
4,553,860
o
$
TOTAL
17,667,930
1,185,580
18,853,510
PUBLIC SUBTOTAL
lS
Accepted
Tendered
Tender Type
27,062,370
°
$
15,561,540
Median rate
4.910%: 50% of the amount of accepted competitive tenders
tendered at or below that rate.
Low rate
4.890%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
d-to-Cover Ratio
=
18,853,510 / 7,352,680
=
2.56
Equivalent coupon-issue yield.
Awards to TREASURY DIRECT = $922,796,000
hUp://www.publicdebt.treas.gov
)-2
federal finaI1cing
WASHINGTON, DC
20220
bankNEWS
FEDERAL FINANCING BANK December 31, 2000
Kerry Lanham, Secretary, Federal Financing Bank (FFB) ,
announced the following activity for the month of November 2000.
FFB holdings of obligations issued, sold or guaranteed by
other Federal agencies totaled $40.2 billion on November 30,
2000, posting a decrease of $1,109.9 million from the level on
October 31, 2000.
This net change was the result of a decrease
in holdings of agency debt of $673.7 million and in holdings of
agency assets of $480.0 million, and an increase in holdings of
gove~nment-guaranteed loans of $43.8 million.
FFB made 78
disbursements during the month of November.
FFB also received 9
prepayments in November.
Attached to this release are tables presenting FFB November
loan activity and FFB holdings as of November 30, 2000.
PO-3
0
cD
Ol
N
N
N
'-?
N
0
N
(/)
(/)
~
0...
0
U")
'7
N
N
N
'-?
N
0
N
co
LL
LL
Page 2
FEDERAL FINANCING BANK
NOVEMBER 2000 ACTIVITY
Borrower
Date
Amount
of Advance
Final
Maturity
Interest
Rate
11/02/00
11/02/00
11/03/00
11/03/00
11/06/00
11/06/00
11/07/00
11/07/00
11/08/00
11/08/00
11/09/00
11/09/00
11/13/00
11/13/00
11/14/00
11/14/00
11/15/00
11/15/00
11/16/00
11/16/00
11/17/00
11/17/00
11/20/00
11/20/00
11/21/00
11/21/00
11/22/00
11/22/00
11/24/00
11/24/00
11/27/00
11/27/00
11/28/00
11/28/00
11/29/00
11/29/00
11/30/00
11/30/00
2/28/01
12/01/00
12/01/00
6.511%
6.490%
6.501%
6.500%
6.490%
6.507%
6.500%
6.543%
6.507%
6.543%
6.543%
6.532%
6.543%
6.521%
6.532%
6.511%
6.521%
6.490%
6.511%
6.501%
6.490%
6.479%
6.501%
6.475%
6.479%
6.489%
6.475%
6.489%
6.489%
6.489%
6.489%
6.486%
6.489%
6.459%
6.486%
6.407%
6.459%
6.365%
6.407%
6.407%
6.332%
ENCY DEBT
.S. POSTAL SERVICE
.s.
.s.
.s.
.s.
· S.
· S.
.s.
.s.
· S.
· S.
.s.
.s.
.s.
· S.
· S.
· S.
.s.
.s.
.s.
· S.
· S.
.s.
.s.
.s.
.s.
· S.
· S.
.s.
· S.
· S.
.s.
.s.
.s.
S.
S.
S.
S.
S.
S.
S.
S.
postal
postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
11/01
11/01
11/02
11/02
11/03
11/03
11/06
11/06
11/07
11/07
11/08
11/08
11/09
11/09
11/13
11/13
11/14
11/14
11/15
11/15
11/16
11/16
11/17
11/17
11/20
11/20
11/21
11/21
11/22
11/22
11/24
11/24
11/27
11/27
11/28
11/28
11/29
11/29
11/30
11/30
11/30
$1,565,000,000.00
$372,900,000.00
$1,475,000,000.00
$216,700,000.00
$1,975,000,000.00
$203,600,000.00
$1,070,000,000.00
$258,000,000.00
$770,000,000.00
$195,900,000.00
$580,000,000.00
$181,600,000.00
$1,300,000,000.00
$500,000,000.00
$1,560,000,000.00
$59,500,000.00
$1,370,000,000.00
$455,600,000.00
$1,250,000,000.00
$427,900,000.00
$1,275,000,000.00
$208,500,000.00
$1,070,000,000.00
$251,700,000.00
$865,000,000.00
$290,500,000.00
$560,000,000.00
$296,800,000.00
$440,000,000.00
$213,100,000.00
$1,285,000,000.00
$309,100,000.00
$1,575,000,000.00
$381,600,000.00
$1,500,000,000.00
$310,200,000.00
$1,320,000,000.00
$336,400,000.00
$1,000,000,000.00
$1,150,000,000.00
$383,900,000.00
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
Page 3
FEDERAL FINANCING BANK
NOVEMBER 2000 ACTIVITY
Borrower
Date
Amount
of Advance
Final
Maturity
Interest
Rate
6.036%
6.133%
6.096%
6.136%
5.905%
GOVERNMENT-GUARANTEED LOANS
GENERAL SERVICES ADMINISTRATION
Chamblee Office Building
Atlanta CDC Lab
Chamblee Office Building
Atlanta CDC Lab
Chamblee Office Building
11/03
1-1/03
11/13
11/17
11/24
$7,505.94
$16,875.00
$7,505.94
$64,488.32
$7,505.94
10/01/26
1/30/02
10/01/26
1/30/02
10/01/26
11/08
11/09
$142,043.45
$75,020.56
9/04/29
9/04/29
11/01
11/01
11/01
11/01
11/02
11/02
11/03
11/03
11/03
11/03
11/07
11/08
11/08
11/09
11/09
11/09
11/09
11/14
11/15
11/15
11/16
11/16
11/16
11/17
11/17
11/21
11/24
11/28
11/28
11/28
$615,000.00
$664,000.00
$4,000,000.00
$6,000,000.00
$111,757.00
$1,400,000.00
$10,991,000.00
$6,970,000.00
$1,460,000.00
$3,200,000.00
$800,000.00
$11,052,000.00
$2,093,000.00
$2,000,000.00
$3,720,000.00
$500,000.00
$1,600,000.00
$2,039,000.00
$4,000,000.00
$255,000.00
$4,000,000.00
$11,323,959.00
$426,000.00
$3,000,000.00
$137,000.00
$30,000,000.00
$943,000.00
$17,000,000.00
$893,000.00
$950,000.00
1/03/34
1/02/35
12/31/15
1/03/33
12/31/15
1/03/34
4/02/01
1/02/29
1/03/33
1/03/34
1/02/35
1/03/28
1/03/28
12/31/30
1/03/34
4/02/29
1/03/33
1/02/35
1/02/35
1/02/35
4/02/01
12/31/25
1/03/34
1/03/34
1/03/34
12/31/19
12/31/12
12/31/29
1/03/34
12/31/31
S/A
S/A
S/A
S/A
S/A
DEPARTMENT OF EDUCATION
Tougaloo College
Tougaloo College
6.000% S/A
5.987% S/A
RURAL UTILITIES SERVICE
Big Horn Rural Elec.
#631
Hawkeye Tri-County Elec. #643
Medina Electric #622
Pennyrile Elec. #513
Miller Tele. #474
Tri-County EMC #557
Brazos Electric #561
Cherokee Dlectric #562
Socorro Elec. #541
Southwest Mississippi #628
Goodhue County #672
Dairyland Power #588
Dairyland Power #589
Cental Virginia Elec. #593
Mecklenberg Electric #612
Orange County Elec. #466
S.W. Tennessee EMC #510
Ozark Electric #629
East Central Energy #660
Washington Electric #655
BLUE GRASS ENERGY #674
Georgia Trans. Corp. #559
Otsego Electric #653
Horry Electric Coop. #536
Otsego Electric #653
Seminole Electric #678
N. Pittsburgh Tele. #449
Blue Ridge Elec. Coop. #659
Decatur County #575
Hancock-Wood Elec. #469
S/A is a Semiannual rate.
Qtr. is a Quarterly rate.
5.822%
5.815%
5.852%
5.952%
5.892%
5.810%
6.317%
6.232%
5.820%
5.814%
5.915%
6.095%
5.971%
5.932%
5.911%
6.065%
6.040%
5.855%
5.826%
5.826%
6.319%
5.839%
5.788%
5.762%
5.762%
5.776%
5.743%
5.746%
5.723%
5.857%
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Page 4
FEDERAL FINANCING BANK HOLDINGS
(in millions of dollars)
Program
November 30, 2000
Agency Debt:
U.S. Postal Service
October 31, 2000
Monthly
Net Change
11/1/00-11/30100
Fiscal Year
Net Change
10/1/00-11/3010b
Subtotal*
$7,133.9
$7,133.9
$7,807.6
$7,807.6
-$673.7
-$673.7
-$21 128 .1
-$2,128.1
Agency Assets:
FmHA-RDIF
FmHA-RHIF
DHHS-Medical Facilities
Rural Utilities Service-CBO
Subtotal*
$3,150.0
$5,320.0
$0.6
$4 1326.9
$12,797.5
$3,410.0
$5,540.0
$0.6
$4 1326.9
$13,277.5
-$260.0
-$220.0
$0.0
$0.0
-$480.0
-$260.0
-$220.0
$0.0
$0.0
-$480.0
Government-Guaranteed Lending:
DOD-Foreign Military Sales
DoEd-HBCU+
DHUD-Community Dev. Block Grant
DHUD-Public Housing Notes
General Services Administration+
DOl-Virgin Islands
DON-Ship Lease Financing
Rural Utilities Service
SBA-State/Local Development Cos.
DOT-Section 511
Subtotal*
$2,374.8
$21. 7
$10.0
$1,278.7
$2,310.0
$14.7
$1, 047.5
$13,023.1
$154.5
$3.5
$20,238.6
$2,387.8
$21.5
$10.0
$1,348.5
$2,313.4
$14.7
$1, 047.5
$12,891. 0
$156.9
$3.5
$20,194.8
-$12.9
$0.2
$0.0
-$69.8
-$3.4
$0.0
$0.0
$132.1
-$2.4
$0.0
$43.8
-$15.6
$1. 0
-$0.8
-$69.8
-$2.6
$0.0
$0.0
$33.6
-$4.6
$0.0
-$58.7
Grand total*
$40,170.0
$41, 279.9
-$1,109.9
-$2,666.8
* figures may not total due to rounding
+ does not include capitalized interest
DEPARTMENT
OF
THE
TREASURY
NEWS
lREASURY
OFFICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C." 20220. (202) 622-2960
U.S. International Reserve Position
1/23/01
The Treasury Department today released U.S. reserve assets data for the week ending January 19, 2001. As
indicated in this table, u.s. reserve assets totaled $67,150 million as of January 19, 2001, down from $67,699
million as of January 12,2001.
(in US millions)
I. Official U.S. Reserve Assets
January 12, 2001
67,699
TOTAL
1. Foreign Currency Reserves
1
a. Securities
I
Euro
5,578
Yen
10,463
Of which, issuer headquartered in the U.S.
January 19, 2001
67,150
TOTAL
Euro
16,041
5,514
Yen
TOTAL
10,511
16,025
0
0
b. Total deposits with:
b.i. Other central banks and BIS
9,435
5,560
14,995
9,321
5,585
14,906
0
0
b.ii. Of which, banks located abroad
0
0
b.iii. Banks headquartered outside the U.S;
0
0
0
0
2. IMF Reserve Position 2
14,979
14,648
3. Special Drawing Rights (SDRs) 2
10,639
10,525
4. Gold Stock
11,046
11,046
0
0
b.ii. Banks headquartered in the U.S.
b.iii. Ofwhich, banks located in the U.S.
3
5. Other Reserve Assets
11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
depOSits reflect carrying values.
21 The Items. "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRldollar exchange rate for the reporting date. The IMF data for January 12 are final. The entries in the table
above for January 19 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF
data.
31 Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of November 30, 2000. The October 31, 2000 value
was $11,046 million.
prL/.
NEWS
TREASURY
OFfiCE OF PUBLIC AF'FAIRS -1500 PENNSVLVANIA AVENUE. N.W. - WASHINGTON. D.C._ 20220. (202) 622.2960
J!:HBARQOEO mnI:L 9: 00 A.M.
January 24, 2001
POBLXC CONTACT:Office of Financing
202-691-3550
MEDIA Co.TACT: Office of Public Affairs
202-622-a960
'l'REAS'O'ltY AmlOlJNCES DEBT BUYBACX OPERATION
On Janua~ 25, 2001, the Trea~ w~ll buy back up eo $1,000 ~11~oQ par
of its outstand.ing callable .issues with final maturity betwsell J'ebZ"\la%Y . 2010
and November 2014.
amlOW1Ced amount.
Treasury reserves the right to accept less than the
This debt buyback (redemption) operation will be. cozu:1ucted by Trea.sury's
Fiscal Agent, the Federal ,Reserve Bank of New York, ~.ing .i~s Op~ Market
~arations system.
Only iD&titution~tbae the Federal. Reserve BaDk of New
York has approved to conduct Open Market transactions may su.l::a.it offers on
behalf of thams.l.~s ana their c:ustosaers. offers at the highest accepted
price for a particular issue .may be accepted on a prorated basis, rounded up
to ~ uexe $100,000. As a result of this rounding, the TreasUJ:Y :may buy
hack an amount slightly larger than the one announcec1 above.
'!'his dAbt buyback operation is governed by the terms and conditions set
forth in 31 CrR Part 375 and this announcament.
The debt buyback operation regulations
the Public Debt's website at
~e available on the Bureau of
www.pub~icdebt.treas.gov.
Details about the operation and each of the eligible issues are given
ill the a.ttached highlig-hts.
000
Attachment
PO-5
For press releases, speeches, public schedules and officilll biographie6, call our 24-hoUT fax line at (202) 622-2040
HJ:GHLIGHTS OF TREASURY DEBT Bt7YBAC!t OPERATl:ON
Par amount to be bought back •• Up to $1,000 million
Operation date •••••••••••••••• January 25, 2001
Operation close t~e ..•••••••• 11:00 a.m. eastarn standard time
Settlement date ....••.•••••••• January 29, 2001
Hinimum par offer amount ••• •• $100,000
MUltiples of par •.••••••••••• $100,000
Format for offers ••••• Expressed. in terms of price per $100 of par with
three decimals. The first two decimals represent
fractional 32 114a of a dollar. The thi.rd. dec:iDal
represents eighebs of a 32~ of a dollar, and must
baa 0,·2,4, or 6.
Delive;ty instructions ••••••••• ABA Humber 021001208 FRB RYC/CUS'1'
Treasury issues eligible for debt buyback operation (in millions):
Par Amount
Coupon
Rate (%)
11.750
10.000
12.750
13.875
14.000
10.375
12.000
13.250
12.500
11. 750
•
Maturity
Date
02/15/05-10
05/15/05-10
11/15/05-10
05/15/06-11
11/15/06-11
11/15/07-12
08/15/08-13
05/15/09-14
08/15/09-14
11/15/09.;..14
Par
Ct1S:IP
ilumber
912810 eM 8
912810 CP 1
912810 CS 5
912810 t::'I 8
912810 CY 2
912810 DB 1
912810 DF 2
912810 OJ4
912810 Dtr 9
912810 DN
Total
5··
~t:
OUtstanding*
2,494
2,987
4,736
4,609
4,901
10,452
13,459
4.,481
4,781
6,006
58,906
Privately
Beld*
1,636
1,811
3,476
3,535
3,925
8,533
10,418
3,611
3,875
4,811
45,631
Par amounts are as of January 23, 2001.
•• This is the only callable security eligible for the STRJ:PS progr-m.
As of January 22, 2001, the par amount held as S'l'lUPS is $4,018 mill1on.
The difference between the par amount O\J,tstanc1:i.Zl~ a.nc1 the paz amount
privately held is the par amount of these issues beld by the Federal
Reserve System and PederalGoverument accounts.
iJ.EPAKTMENT
TREASURY
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIAAVENVE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
JANUARY 24, 2001
TREASURY ANNOUNCES CHANGE 'IN THE TIME
OF THE MEETING OF THE TREASURY BORROWING ADVISORY COMMITTEE
The Treasury Department announced today a change in the time of the public meeting of the
Bond Market Association Treasury Borrowing Advisory Committee (TBAC) held as part of its
regular quarterly refunding operations. The public meeting of the TBAC originally scheduled for
Tuesday, January 30 at 9:00 a.m. has been rescheduled for 10:00 a.m. on January 30 at the
Treasury Department, 1500 Pennsylvania Avenue, N.W., Washington, DC.
PO-6
PUBLIC DEBT NEWS
Department of the Treasury· Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
January 24, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 2-YEAR NOTES
Interest Rate:
Series:
CUSIP No:
STRIPS Minimum:
Issue Date:
Dated Date:
Maturity Date:
4 3/4%
L-2003
9128276S6
$800,000
High Yield:
4.760%
Price:
January 31, 2001
January 31, 2001
January 31, 2003
99.981
All noncompetitive and successful competitive bidders were awarded
securities at the high yield.
Tenders at the high yield were
allotted
1%. All tenders at lower yields were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
$
25,377,510
980,769
PUBLIC SUBTOTAL
26,358,279
Federal Reserve
Foreign Official Inst.
3,333,333
2,100,000
TOTAL
$
31,791, 612
$
9,022,950
980,769
10,003,7191/
3,333,333
2,100,000
$
15,437,052
Median yield
4.740%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low yield
4.690%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
26,358,279 / 10,003,719
=
2.63
1/ Awards to TREASURY DIRECT = $779,246,000
http://www .publicde bt. treas.gov
PO-7
NEWS
TREASURY
1,.'Vlet( HI' FllBI_U' ArI'AIKS. U ...
1·.:'i~SYI_\'ANIA
AVF.NVl:. N,W,. WASl""GTON. n.<:_. Z02241. 1202, .22-29.0
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT:
Office of public
Affairs
202-622-2960
FOR IMMEDIATE RELEASE
January 25, 2001
TREASURY DEllT BUYBACK OPERATION RESULTS
Today, Treasury completed a debt buyback (redemption) operation for $1,000 million
par of its outstanding callable issues. A total of 10 callable issues with final maturity
between February 2010 and November 2014 were eligible for this operation. The settlement date
for this operation will be January 29, 2001. Summary results of this operation are
presented below.
(amounts in millions)
Offers Received (Par Amount) :
Offers Accepted (Par Amount) :
Total Price Paid for Issues
(Less Accrued Interest):
Number of Issues Eligible:
For Operation:
For Which Offers were Accepted:
Weighted Average Yield to Call
of all Accepted Offers (%):
Weighted Average Maturity to Call
for all Accepted Securities (in years) :
$5,158
1,000
1,381
10
4
5.318
5.3
Details for each issue accompany this release_
'0-8
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
.January 25. 2001
TREASURY DEBT BUYBACK OPERATION RESULTS
(amounts
~n
millions, prices in decimals)
Table I
Coupon
Il.iat~
{~l
11.750
10.000
12.750
13 .875
14.000
10.375
12.000
13.250
12.500
11.750
Par
Amount
Highest
Accepted
Weighted
Average
Accepted
~
Par
Amount
Off ~.:~ d
Acce~ted
~
~
02/15/05-10
05/15/05-10
11/15/05-10
05/15/06-11
11/15/06-11
11/15/07-12
08/15/08-13
05/15/09-14
08/15/09-14
11/15/09-14
202
500
220
325
462
585
1.632
435
512
285
43
0
220
325
412
0
0
0
0
0
123.390
N/A
131.187
139.109
142.750
N/A
N/A
N/A
N/A
N/A
123.389
N/A
131.155
139.030
142.653
N/A
N/A
N/A
N/A
N/A
Maturity
Table II
Coupon
Rate ('ls)
Maturity
~
CUSIP
Number
11.750
10.000
12.750
13.875
14.000
10.375
12.000
13.250
12.500
11.750
02/15/05-10
05/15/05-10
11/15/05-10
05/15/06-11
11/15/06-11
11/15/07-12
08/15/08-13
05/15/09-14
08/15/09-14
11/15/09-14
9l2810CM8
912810CP1
912810CS5
912810CV8
912810CY2
912810DB1
912810DF2
912810DJ4
912810DL9
912810DN5
Total Par Amount Offered:
Total Par Amount Accepted:
Lowest
Accepted
Yield
to Call
Weighted
Average
Accepted
Yield
to Call
5.256
N/A
5.293
5.300
5.323
N/A
N/A
N/A
N/A
N/A
5.256
N/A
5.299
5.314
5.338
N/A
N/A
N/A
N/A
N/A
5.158
1.000
Note: Due to rounding. details may not add to totals.
*Amount outstanding after operation. Calculated using amounts reported on announcement.
Par Amount
Privately
~
1.593.
1.811
3.256
3.210
3.513
8.533
10.418
3.611
3.875
4.811
V EPA
n
T MEN T
o,.~
THE
NEWS
TREASURY
OFFICi:: OF
Ptl~LJC
T REA S V R Y
A)o'f'"Ut,::i • ]500 PENNSY1,.'\'ANlA AVJ::NtJE, N. W.• WASHlNGl'ON. l>.C.8 20nO. (20::!) 622·2960
EMBARGOED UNTIL 2:30 P.M.
January 25, 2001
CONTACT:
Office of Financing
202/691-3550
TRBASURY OFFERS l3-WEEK AND 26-WEEK BILLS
The Treasury will auction two series of Treasury bills totaling
approximately $24,000 million to refund $30,230 million of publicly held
securities maturing February 1, 2001, and to pay down about $6,230 million.
In addition to the public holdings, Federal Reserve Banks for their own
accounts hold $13,814 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders. Amounts issued
to these accounts will be in addi~ion to ~e offering amount.
The maturing bills held by the public include $7,266 million held
by Federal Reserve Banks as agents for foreign and international monetary
authorities, which may be refunded within the offering amount at the highest
discount rate of accepted competitive tenders. Additional amounts may be
issued for such accounts if the aggregate amount of new bids exceeds ~he
aggregate amount of maturing bills.
TreasuryOirece customers requested that we reinvest their maturing holdings of approximately $1,074 million into the 13-week bill and $1,354 million
into the 26-week bill.
This offering of Treasury securities is governed by the terms and conditions set forth in the Unifor.m Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) •
Details about each of the new securities are given in the attached
offering highlights.
000
Attachment
PO-9
For press reJea:;es, spuches. pUblit
scJfi'dule~
and official biographies, call our 14-hour fax line al (201) 622-2040
HIGHLIGHTS OF TREASURY OFFBRINGS OF BILLS
TO BE ISSUED FEBRUARY I, 2001
January 25, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . . . . $13,000 million
Description of Offering:
Term and type of security . . . . . . . . . . . . . .
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . .
Auction date . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity date . . . . . . . . . . . . . . . . . . . . . . . . . .
Original issue date .....
Currently outstanding.
l-finimwn bid amount and mUltiples ..
e
e
••
e
••••••••
••••••••
e
e'e
e
e
e"
••
e
••• e
91-day bill
912795 GB 5
January 29, 2001
February I, 2001
May 3, 2001
November 2, 2000
$14,542 million
$1,000
$11,000 million
182-day bill
912795 HE 4
January 29, 2001
February 1, 2001
August J, 2001
February 1, 2001
$1,000
The following rules apply to all securities mentioned above;
Submission of Bids:
Noncompetitive bids . . . . . . . . . Accepted in full up to $1,000,000 at the highest discount rate of
accepted competitive bids.
Competitive bids . . . . . . . . . . . . (1) Must be expressed as a discount rate with three decimals in
increments of .005%, e.g., 7.100%, 7.105\.
(2) Net long position for each bidder must be reported when the sum
of the total bid amount, at all discount rates, and the net long
position is $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior
to the closing time for receipt of competitive tenders.
l>laxirnurn Recogni z ed Bid
at a Single Rate . . . . . . . • . . . .
35~
of public offering
ltlaximurn Award . . . . . • . . . . . . . . . . . . 35% of public offering
Receipt of Tenders~
Noncompetitive tenders . . . . . . Prior to 12:00 noon eastern standard time on auction day
Competitive tenders . . . . . . . . . Prior to 1:00 p.m. eastern standard time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on iasue date, or payment
of full par amount with tender.
TrcasuryDirect customers can use the Pay Direct feature which
authorizes a charge to their account of record at their financial institution on issue date.
D L l' ART lVI E N T
0 F
THE
T REA S U
I{Y '- ,'" :--:: '." '\:
-
•
TREASURY
,
~
,
"
•
l'
"'"';.~'
'. i~'
';r. ,,~t
NEWS
OFFICE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 3 :OOPM
January 29, 2001
CONTACT: Frank Keith
(202) 622-2960
TREASURY ANNOUNCES MARKET BORROWING ESTIMATES
The Treasury Department announced today that it expects to borrow a net
of $46 billion in marketable debt during the January - March 2001 quarter
and to target a cash balance of $45 billion on March 31. This includes the
previously announced estimate of $9 billion of buybacks of Treasury
marketable securities. In the quarterly announcement of its borrowing needs
on October 30, 2000, the Treasury announced that it expected to borrow $20
billion in marketable debt and to target an end-of-quarter cash balance of
$30 billion. The increase in borrowing is due primarily to a lower cash
balance at the beginning of the quarter and a higher target cash balance on
March 31.
The Treasury also announced that it expects to pay down $197 billion in
marketable debt during the April - June 2001 quarter and to target a cash
balance of $60 billion on June 30.
The Treasury paid down $26 billion in marketable debt during the
October - December 2000 quarter and ended with a cash balance of $21
billion on December 31. On October 30, the Treasury announced that it
expected to pay down $23 billion in marketable debt and to target an end-ofquarter cash balance of $30 billion. The lower cash balance was primarily
the result of timing in the deposits of individual taxes, which were received
in the first week of January 2001 instead of the last week of December 2000.
The Quarterly Refunding Press Conference will be held at 9:00AlV1 on
Wednesday, January 31, 200l.
PO 10
Far press releases, speeches, public schedules and official biographies, call our 24.Jr,our fax line at (202) 622-2040
·U.S. Government Printing Ofilce 1998 - 619-559
.i)
E 1-' A .K T'M E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlllNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
Text as Prepared for Delivery
January 30, 2001
DIRECTOR OF THE OFFICE OF MACROECONOMIC ANALYSIS JOHN H. AUTEN
REMARKS TO THE TREASURY BORROWING ADVISORY COMMITTEE
OF THE BOND MARKET ASSOCIATION
When we met three months ago, the economy had moved fairly smoothly to a lower and
more sustainable pace of growth. There were some financial and other uncertainties at the time,
but further economic expansion at a solid pace appeared to be the most likely outcome. With the
wisdom of hindsight, that now seems to have been a rather optimistic assessment. There has, as
you know, been a run of much softer economic readings and a policy response earlier this month
by the Federal Reserve to a changing set of circumstances.
Somewhat paradoxically, this economic downshift is still not clearly revealed in the
economy's recent rates of growth. The advance estimate of fourth quarter Gross Domestic
Product will not be known until tomorrow, but private estimates of real growth have been
centered in the 1-112 to 2 percent range. This would be within hailing distance of the third
quarter's 2.2 percent and would at least superficially seem difficult to reconcile with the
increased pessimism and perception of downside risk that has developed. The discrepancy
largely reflects nothing more profound than the fact that Gross Domestic Product is measured on
the basis of quarterly averages.
We do not have monthly data for Gross Domestic Product, but real personal consumption
expenditure (two-thirds of GDP) is available monthly and can serve as a rough GDP proxy for
illustrative purposes. Consumer spending started the fourth quarter well above its third-quarter
average, about 2 percentage points above at an annual rate, made dwindling gains in October and
November, and then weakened in December, when unit auto sales fell sharply. It is as if there
were two fourth quarters: one as recorded in the GDP account quarterly averages, not very
different from the third-quarter results; another as the picture has emerged in the evolving flow
of real-time statistics, very different indeed.
PO-ll
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
'U S Government Printing OHlce. 1998 - 619-559
However far back the origins of the current slowdown might be traced, two statistical
releases - one late last year, the other early this year - were the alarm signals that both
consumption and production might be weakening significantly.
•
In late December, as the press reported at the time, the Uni versity of Michigan index of
consumer sentiment tumbled by more than 9 percentage points to a two-year low.
Consumers felt that the economy had weakened and expected it to deteriorate further in
the new year.
•
This was followed on January 2 by a much larger-than-expected decline in the index of
the National Association of Purchasing Management which tracks activity in the
manufacturing sector. Their December index was the lowest since April 1991 and close
to the level which historically has corresponded with no growth in the overall economy.
These were the earliest available readings on the economy as it closed out last year and
soon were followed by a number of other statistics, confirming that the pace of activity had,
indeed, slowed in December.
•
Sales at major retail chain stores edged up a disappointing 114 percent in December 2000
from a year earlier. This followed four strong years in which December sales rose by an
average of more than 5 percent. The broader, official series on retail sales inched up by
0.1 percent in December in nominal terms, and earlier results for October and November
were revised down.
•
Private sector employment gains slowed in December, although the unemployment rate
held steady at a low 4.0 percent. But the shocker was a 62,000 drop in manufacturing
employment and a plunge in factory work hours, possibly aggravated by severe winter
weather in the Midwest. This was reflected in December industrial production which fell
by 0.6 percent, pulling the fourth quarter down at a 1.1 percent annual rate, the first such
quarterly decline since 1991.
•
Finally, the Conference Board's composite index of leading indicators fell by 0.6 percent
in December. It has been pointing toward a slowing trend since last spring and now is
coming closer to an outright warning of a downturn but is not there yet. One problem of
interpretation is that much of the weakness in the leading indicator index is due to its
yield curve component which has shown a sustained inversion over the past year. That
may reflect special factors that were not present in the past, such as the Treasury buyback
program, since substitution of a AAA corporate index for the 10-year Treasury seems to
remove the inversion.
There is a different, somewhat more positive, tone to scattered reports on activity in
January. It is difficult to be sure how much importance to attach to these latest fragmentary
readings, but they tend to undercut the notion that the economy is in anything like a free fall.
Trade sources suggest that consumers may have picked up their pace of spending with sales
2
above plan for some retailers. Mortgage retinancing took a big jump in early January as
mortgage rates fell below 7 percent. More generally, the housing sector has remained at a
relatively high level of activity. That may be changing with recent declines in building pennits
and existing home sales, but the surprise is how resistant housing has been. Initial claims for
unemployment insurance, which soared to the highest level in 2-112 years at the end of
December, have fallen back in January and suggest that labor markets are still tight.
Inflationary pressures have remained relatively subdued in recent months. While
inflation remains a signiticant problem, the slowing pace of real activity is a more immediate
concern.
•
The consumer price index rose at a 2.1 percent seasonally adjusted annual rate in the
three months ended in December and the core rate (excluding the food and energy
components) rose at a 2.0 percent rate. Both of these rates were well below the
corresponding rates over the 12 months ending in December: 3.4 percent for the total
CPI and 2.6 percent for the core.
•
The employment cost index, released last week, showed a surprisingly modest increase
for the three months ended in December - well below market estimates. Hourly
compensation (wages and salaries plus bene tits) rose by a seasonally adjusted 0.8 percent
or 3.3 percent at an annual rate. This was well below the 4.1 percent advance over the
12 months ended in December.
Looking to the future - a hazardous enterprise at best - it seems likely that the current
quarter will be relatively weak statistically. From a narrow technical point of view, first quarter
real growth will suffer from a low starting point - the reverse of the fourth quarter situation. In
addition, first quarter growth may be held down by seasonal adjustment factors which will reflect
a run of mild winters in the recent past and present a fairly high statistical hurdle to clear. From
a more fundamental point of view, at least a moderate inventory adjustment is underway. But
these have occurred before during the current expansion without lasting adverse impact. It
hardly needs repeating that downside risk for the economy has increased; but there are also
important elements of continuing strength, too easily ignored when pessimism temporarily
becomes the dominant theme.
That is a summary of recent economic developments and the near tenn economic
outlook.
-30-
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
January 29, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
February 01, 2001
May 03, 2001
912795GE5
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.980%
High Rate:
Investment Rate 1/:
Price:
5.114%
98.741
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 98%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
$
24,197,997
1,518,337
850,000
850,000
26,566,334
13,024,334
7,253,443
7,253,443
Foreign Official Refunded
SUBTOTAL
Federal Reserve
Foreign Official Add-On
$
10,655,997
1,518,337
12,174,334 2/
25,716,334
PUBLIC SUBTOTAL
TOTAL
$
°
33,819,777
o
$
20,277,777
Median rate
4.970%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.940%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
= 25,716,334
/ 12,174,334
= 2.11
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,197,835,000
http://www.publicdebt.treas.gov
)0-12
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
January 29, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
February 01, 2001
August 02, 2001
912795HE4
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.840%
High Rate:
Investment Rate 1/:
Price:
5.031%
97.553
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 10%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
$
16,268,754
1,778,821
3,575,000
3,575,000
21,622,575
ll, 005, 075
5,923,077
5,923,077
Foreign Official Refunded
SUBTOTAL
5,651,254
1,778,821
7,430,075 2/
18,047,575
PUBLIC SUBTOTAL
Federal Reserve
Foreign Official Add-On
o
o
$
TOTAL
$
27,545,652
$
16,928,152
Median rate
4.810%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.700%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
18,047,575 / 7,430,075
=
2.43
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,431,398,000
http://www.publicdebt.treas.gov
PO-13
DEPAKIMENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIllNGTON, D.C .• 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
January 31, 2001
STATEMENT BY TREASURY SECRETARY PAUL H. O'NEILL
The Administration respects the independence of the Federal Reserve in making
decisions about our nation's monetary policy. We share the Federal Reserve's goals of
maintaining healthy economic growth while preserving low inflation.
PO-14
-30-
F()1' press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s.
Government Printing Office: 1998 - 619-559
DEPARTMENT
TREASURY
OF
THE
TREASURY
fW) NEW S
1789
OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.. 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
Text as Prepared for Delivery
January 31, 2001
DEPUTY ASSISTANT SECRETARY OF THE TREASURY FOR FEDERAL FINANCE
MICHAEL J. PAULUS
REMARKS AT THE FEBRUARY 2001 TREASURY QUARTERLY REFUNDING
Good morning. I am pleased to be with you today to discuss the government's refunding
needs for the current quarter. In addition, I will be making a few announcements with respect to
other aspects of Treasury's debt management.
52-Week Bills
One year ago, Treasury announced a reduction in the frequency of issuance of 52-week
Treasury bills from monthly to quarterly, consistent with the recommendation of the Treasury's
Borrowing Advisory Committee. This change has allowed us to add to the liquidity of the threeand six-month bills while we respond to the overall reduction in Treasury's borrowing needs.
Since then, we have worked with Congress to enact legislation that will help to ensure a
smooth transition to the elimination of this security. These statutory changes, which replace
references to the auction yield of 52-week bills with the one-year Constant Maturity Treasury
(CMT) yield, were enacted at the end of the 106th Congress. I would like to take this opportunity
to thank those who devoted their time and effort to this issue, both within the Treasury and in
Congress.
Today we are announcing the elimination of the 52-week Treasury bill. The final auction
of this security will take place on February 27, 2001. This change will eliminate roughly $20
billion in debt issuance this fiscal year. We expect that a portion of this amount will be reallocated elsewhere in the bill sector, consistent with our borrowing needs.
Buybacks
PO-I5
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
Since our last quarterly refunding announcement, we have successfully completed our
buyback operations for calendar year 2000 and have begun our operations for calendar year
2001. Total buybacks for 2000 reached our stated goal of$30 billion par amount of securities.
We continue to be pleased with the results of our buyback operations.
As we announced at our last quarterly refunding in November, we will provide our
buyback goals going forward on a quarterly basis. In November, we indicated that we expect to
conduct buyback operations of approximately $9 billion par amount of securities in the January
to March quarter. Today we are announcing that we expect to conduct buyback operations for
approximately $9 billion of securities in the April to June quarter as well.
FIMA Adjustments
On November 14, Treasury announced a series of technical changes to the rules that
apply to Foreign and International Monetary Authority (FIMA) account participation in Treasury
auctions. These changes, which will become effective on February 1,2001, are designed to
facilitate the continued participation of FIMA accounts in the auction process, improve the
liquidity and efficiency of the Treasury market, and allow the Treasury to better control the
amount of funds raised at auction.
As announced in November, individual FIMA accounts will be limited to noncompetitive bids of no more than $200 million per account per auction, which will apply to both
new bids and "roll-overs." In addition, total non-competitive bids from all FIMA accounts will
be limited to $1 billion per auction, per security, which will be included in the total amount of
the announced auction size. Allocation of FIMA non-competitive bids will be from smallest to
largest, up to the aggregate award limit of $1 billion.
At the time we stated that we expected to increase our publicly announced auction
amounts initially by the amount that we otherwise would have expected to raise through the
"add-ons" related to FIMA accounts. As a result, we will increase the size of our 5- and 10-year
note auctions by $1 billion per auction.
Terms of the February Refunding
I will now tum to the terms of the February Refunding. We are offering $32 billion of notes
and bonds to refund approximately $25.1 billion of privately held notes maturing on February
15, raising approximately $6.9 billion. The securities are:
•
•
•
Are-opening of the 5 ~ percent 5-year notes issued in November 2000, maturing
November 15, 2005, in an amount of $11 billion.
A 10-year note in an amount of $11 billion, maturing February 15,2011.
A 30-year bond in an amount of $1 0 billion, maturing February 15,2031.
These securities will be auctioned on a yield basis at 1:00 PM Eastern Standard Time on
February 6, 7, and 8, respectively.
With respect to the re-opening of the 5-year note, it should be noted that this security
currently trades at a premium to par. This is of particular significance to small bidders in the
auction, especially those who are participants in the TreasuryDirect system, who should be
aware that additional funds may be required to cover the cost of the premium. In addition to
possible premium, investors will be required to pay three months of accrued interest.
As announced on Monday, we estimate that we will have a $45 billion cash balance on
March 31 and a $60 billion cash balance on June 30. We expect to issue cash management bills
this quarter to bridge seasonal low points in our cash position.
Our next quarterly refunding announcement will take place on Wednesday, May 2.
-30-
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
1789
omcr OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. -
u.s. International Reserve Position
20220. (202) 622-2960
01/31/01
The T reJ.sury Depanment today released U.S. reserve assets data for the week ending January 26, 2001. As
indicated in this table, U.S. reserve assets totaled $67,431 million as of January 26,2001, down from $67,594
million as of January 19, 2001.
(in US millions)
January 19, 2001
67,594
I. Official U.S. Reserve Assets
TOTAL
11. Foreign
Currency Reserves
I
1
a. Securities
Euro
5,514
:H which. issuer heaaquartered ;n the
Yen
10,511
January 26.2001
67,431
Euro
TOTAL
16,025
5,425
Yen
TOTAL
10,518
15,9 43
I]
0
US.
b. Total deposits with:
9,321
b.i. Other central banks and BIS
b.ii. Banks headquartered in the U.S.
:.J.:i. IJf .vhich, banks located abroad
b.iii. Banks headquartered outside the U.S.
'J.UI.
Cf
:;hIGl
:~anKs
2. IMF Reserve Position
lecated :n the U.S.
2
3. Special Drawing Rights (SORs)
t Gold Stock
3
j. Other Reserve Assets
2
5,585
14,906
9,180
5,590
I]
0
'JI
0
'JI
I]
~,
14,979
15,193
10,639
-;O,..j31
1; ,046
1; ,04";
0
JI
11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
deposits reflect carrying values.
21 The items, "2. IMF Reserve Posioiion" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in'
dollar terms at the official SDRJdoliar exchange rate for the reporting date. The IMF data for January 19 are final. The entries in the table
above for January 26 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF
data.
31 Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of November 30,2000. The October 31,2000 value
was $11,046 million.
?O-16
14,770
0
,
,
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
January 19. 2001
1. Foreign currency loans and securities
January 26, 2001
o
o
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.8. Short positions
2.b. Long positions
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
January 26. 2001
January 19.2001
1. Contingent liabilities in foreign currency
o
o
o
o
o
o
o
o
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.8. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3. c. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.8. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
NEWS
TREASURY
OFfo'ICE OF PUBLIC AFFAIRS e ISOO PENNSYLVANIA AVENUE, N.W. e WASHINGTON, D.C.e 20220 e (202) 622-2960
FOR RELEASE WHEN AUTHORIZED AT PRESS CONFERENCE
January 31, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY FEBRUARY QUARTERLY FINANCING
The Treasury will auction $11,000 million of 4-3/4-year 5-3/4% notes,
$11,000 million of 10-year notes, and $10,000 million of 30-year bonds to
refund $25,049 million of publicly held securities maturing February 15,
2001, and to raise about $6,951 million of new cash.
In addition to the public holdings, Federal Reserve Banks hold $3,132
million of the maturing securities for their own accounts, which may be
refunded by issuing additional amounts of the new securities.
Up to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of
each auction.
These noncompetitive bids will have a limit of $200 million
per account and will be accepted in the order of smallest to largest, up
to the aggregate award limit of $1,000 million.
TreasuryDirect customers requested that we reinvest their maturing
holdings of approximately $193 million into the 4-3/4-year note, $11 million
into the 10-year note, and $1 million into the 30-year bond.
All of the auctions being announced today will be conducted in the
single-price auction format. All competitive and noncompetitive awards will
be at the highest yield of accepted competitive tenders.
All of the securities being offered today are eligible for the STRIPS
program.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue
of Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356,
as amended) .
Details about the notes and bond are given in the attached offering
highlights.
000
Attachment
PO-17
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERINGS TO THE PUBLIC
FEBRUARY 2001 QUARTERLY FINANCING
January 31, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . $11,000 million
Description of Offering:
Term and type of security .........
Series . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CUSIP number . . . . . . . . . . . . . . . . . . . . . .
Auction date . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . .
Dated date . . . . . . . . . . . . . . . . . . . . . . . .
Maturity date
Interest rate . . . . . . . . . . . . . . . . . . . . .
Amount currently outstanding ......
yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest payment dates ............
Minimum bid amount and multiples ..
Accrued interest payable
by investor . . . . . . . . . . . . . . . . . . . . .
Premium or discount
4-3/4-year notes (reopening)
F-2005
912827 6N 7
February 6, 2001
February 15, 2001
November 15, 2000
November 15, 2005
5-3/4%
$15,812 million
Determined at auction
May 15 and November 15
$1,000
$14.61326 per $1,000 (from
November 15, 2000 to
February 15, 2001)
Determined at auction
STRIPS Information:
Minimum amount required ........... $800,000
Corpus CUSIP number . . . . . . . . . . . . . . . 912820 FX 0
Due date(s) and CUSIP number(s)
for additional TINT(s) .......... Not applicable
$11,000 million
$10,000 million
10-year notes
B-2011
912827 6T 4
February 7, 2001
February 15, 2001
February 15, 2001
February 15, 2011
Determined based on the highest
accepted competitive bid
Not applicable
Determined at auction
August 15 and February 15
$1,000
3D-year bonds
Bonds of February 2031
912810 FP 8
February 8, 2001
February 15, 2001
February 15, 2001
February 15, 2031
Determined based on the highest
accepted competitive bid
Not applicable
Determined at auction
August 15 and February 15
$1,000
None
None
Determined at auction
Determined at auction
Determined at auction
912820 GC 5
Determined at auction
912803 CK 7
February 15, 2030--912833 XX 3
August 15, 2030--912833 XY 1
February 15, 2031--912833 XZ 8
Not applicable
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $5,000,000 at the highest accepted yield.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted through the Federal Reserve Banks as
agents for FIMA accounts. Accepted in order of size from smallest to largest with no more than $200 million awarded per
account. The total noncompetitive amount awarded to Federal Reserve Banks as agents for FlMA accounts will not exceed
$1,000 million. A single bid that would cause the limit to be exceeded will be partially accepted in the amount that brings
the aggregate award total to the $1,000 million limit. However, if there are two or more bids of equal amounts that would
cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a yield with three decimals, e.g., 7.123%.
(2) Net long position for each bidder must be reported when the sum of the total bid amount, at all yields, and the net long
position is $2 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders.
Maximum Recognized Bid at a Single Yield:
35% of public offering
Maximum Award:
35% of public offering
Receipt of Tenders:
Noncompetitive tenders:
Prior to 12:00 noon eastern standard time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern standard time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full par amount with tender.
TreasuryDirect customers can use the Pay Direct feature which authorizes a charge to their account of record at their financial
institution on issue date.
UEPARTMENT
OF
THE
TREASURY
NEWS
omCE OFPUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIllNGTON, D.C. - 20220. (202)622-2960
STATEMENT BY SECRETARY PAUL H. O'NEILL ON REVIEW OF
NEW R&E REGULATIONS
"The President has insisted that the flurry of regulations issued at the end of the previous
administration be reviewed. Consistent with that moratorium, Treasury is delaying the effective
date and reopening the comment period for the R&E tax credit regulations issued January 3.
"Impacted taxpayers have voiced strong concerns that they were not given an opportunity
to review and comment on the operation of the new provisions in the rules. It's only fair for
those taxpayers to have an opportunity to comment further on the complexity of these regulations
that were announced just as the Administration changed hands."
"Further, the R&E tax credit is a significant element of the President's tax plan -- a plan I
fully support and am committed to enacting as quickly as possible. These regulations limited the
value of the current credit for those who have chosen to rely on it."
PO-I8
-30-
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Pnntlnq Office. t998 - 619-559
,
TREASURY
··NEWS
OFl'ICIt OF PUBLIC AnAlllS -15" P'!NNSYLVANlA AVENDE, N.W•• WASHINGTON, D.C .• lO120. (IU) '1%·%960
~J:l) U1i'1'1L 2: 3
Pebru&r,y 1, 2001
° •.
C01I"1'ACT:
11.
Office of 7.inanciDg
202/691-3550
'rItBASt1RY O!'!"DS 13-W!Zlt AND 26-UEK BXLLS
'1'be "l'reaaw:y will aucticm two series of Treasury bills totaling
approximately $22,000 ~lliOD to refuDd $20,098 million of publiely bald
securities maturiDg Februar,r 8, 2001, aDd to raise about $1,902 million of DeW
cash.
~
.acutiOD to tho plWlic bolaiDgs, Fe4era.l Rese~ ~. fo~ their own
.ccounts bold $10,106 million of ~ . .turizl51 ))111&, 1dUc:h may ))e refunded at
t.U h.ighe.~ disCOUI1t rate of aeceptecl cOIII'Petitive ttmders. ~t. awarded
to these accO\lDts will 1M ill aa4itiOZl to the offering UIOWlt.
np to $1,000
~llion
in DODCampetitive bids from Foreign aDd IAter-
DAtiODal MOnetary AUthority
(r~)
accounts bidding through the
Fe4e~al
b ••n . BaDk of ..., York rill be included within the offering IUDO\U1t of each
.ucti~.
~.e DCDCompeeitive bias will ba~ a limit of $200 million per
account aDd will be acceptea in the order of smallest to large.t, up to the
aggregate award limit of $1,000 million.
n:eaSUZ',Yf)ireet cuatcaers have requested that we reinvest their maturing
holdings of apprnxjJMtely ,1,016 milliou into the 13-weu Dill and $873
million iDeO th8 26-week ~ill.
'l'bis offering of Treasw::y aecurieie. is governed by the tezms aDd conditions set forth 1n the Unifor.m Offering Circular for the Sale aDd X.sue of
Marketable Book-BDtry Treasury Billa, Hote5 1 and Bonds (31 CPJl Part. 356 1 .a
&maDded) •
netails about each of the
offering highlights.
DeW
securities are given 1n the attached
Attac:'bmeDt
PO-19
Fo,. p,.,ss ,.Z.IJUI, Ip~eclut, pKb& 'ClttdllUI aNI ()fJicilll bitt,r4phits, Cldl OKr 24·/tOKr fa;!: lin.
Ilt (202) 622.2040
HIGHLXGSTB OF TREASURY OFPERXNGS or BXLLS
TO BE ISSUED FEBRUARY 8, 2001
February 1, 2001
Orr.ring Amount •••••.•.•••...••.•••..•.. $12,000 Jnillioo
of Ofteringl
and type of 8ecurity •..•••...•••••.
ctJSXP nUJnber ......••.••••.•.•••••.••••••
Auction date •••..•.••••••••••••••.••.•.•
Issue date ••.•••••••.••.••••••••••.•••.•
Maturity a.t •••••.••.••••••••••.••.••••.
Original iBBu. date ••••••••••••••...••••
Currently out.tanding ••••••••••••.••••••
Minimum bid amount and .ultipl••••••.••.
$10,000 lI\illion
De.cript~on
Te~
91-4ay bill
912795 OF 2
February 5, 2001
F.bruary 8, 2001
May 10,2001
November 9, 2000
$16,18B .111ion
$l,OOO
182-cSay bill
912795 H(J 9
February 5, 2001
February 8, 2001
Auguat I, 2001
rebruary 8, 2001
$1,000
The fo11owinw rule. apply to .11 securities mentioned above.
Submiss~on of Bids.
Noncompetitive bidB' Accepted in full up to $1,000.000 at the higheat discount rat. of accept.4
competitive bid••
Foreign an4 Xnternatlona1 Mon.tary Authority (rIMA) bidsa noncompetitive bid. aubmitt.4
through the r.deral Re.erve Bank. a. agents for rIMA aocounts. Aoo.pted in order or .i.e
from arnall •• t to larg.st with no nore than $200 million .war4ed per account. Th. total
noncompetitive amount awarded to re4er.l Re.erve Bank. a. ag.nts for PIM1 account. will
not exceed $1,000 million. A single bid that would caus. the l~it to be .xce.ded will
b. partially accepted in the amount that bring. the aggregate award total to the $1,000
million limit. How.ver, if there are two or more bid. of equal amount. that would cau.e
the linit to be exceede4, each will b. proreted to avoid eHce.ding the limit.
C~.titiv. bid ••
(1) au.t be .xpr••••d a. a discount rat. with thr.e 4ec~. in Inor . . .nt. of .005%, e.g.,
7.100%,
(~)
7.105~.
Net long position for each bidder mu.t be reported when the aum of th. total bid a.ou~t,
. t all discount rat •• , an4 the net long position i . $1 bl11iOD or gre.ter.
(3) Ret long poaition must be d.t.~iD.4 a. of one half-hour prior to the cloalng ttme fOI
receipt of competitive tenders.
Maximum RecogniEea Bld at a Bingle R.t ••••• 35% of public offering
Maximum Award •••••••••••••••••••••••••••••• 35% of public offering
Receipt of ~.Dd.rs.
Nonc~etitiv. tenders •• Prior to 1~.00 DOOD e •• tern standard tiNe on auction day
Competitive tenders ••••• Prior to 1,00 p.m . . . . tern standard time on auotion day
P!JM!nt ~er.m.1 By charge to a funds account at a Federal Re.erv. Bank on i.sue dat., or payment
of full par aROunt with tender. Tr•• sur.yDlrect customer. can u.e the Pay Direct feature which
authorise. a charge to their account of record at th.ir finanoial in.titution on i88ue dat ••
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
February 5, 2001
Contact: Peter Hollenbach
(202) 691-3502
PUBLIC DEBT LAUNCHES TREASURY HUNT
New Website Helps Public Find Money And Bonds
The Bureau of the Public Debt, today, launched Treasury Hunt, a new web site to help people put
their money back to work. Treasury Hunt makes it easy for people to find out if they may have a
matured savings bond, a bond that the postal service couldn't deliver or an interest payment that
was returned to Public Debt. Customer privacy is protected by encrypted communications and a
follow-up process to assure payment or holdings information is disclosed only to the bond
owner.
"Treasury Hunt is one more step in our effort to encourage owners of savings bonds that have
stopped earning interest to redeem them and put their money back to work," said Van Zeck,
Commissioner ofthe Public Debt. "The new website will also help us in our efforts to get bonds
and savings bond interest payments reunited with their rightful owners."
Treasury Hunt is easy to use. Once investors go to www.savingsbonds.gov and click on the
Treasury Hunt link, they are prompted for identifYing information such as name, city and state
and in some cases Social Security Number. If there is a possible match, the customer is given
instructions for following up. The site is available 24 hours a day, seven days a week.
The Treasury Hunt database currently contains information about 160,000 undeliverable bonds,
undeliverable interest payments, and matured Series E, H, and HH savings bonds. Treasury Hunt
will be updated regularly as new information becomes available.
One goal of Treasury Hunt is helping Public Debt find the owners of some 35,000 undeliverable
bonds it now has. Savings bonds become undeliverable and are sent to Public Debt only after
financial institution issuing agents or the Federal Reserve made several attempts at delivering the
bonds to investors. Bonds returned as undeliverable are a tiny fraction of the 45 million bonds
sold each year.
Holders of Series H or HH savings bonds, which pay interest currently, can also check the site to
see if an interest payment was returned to Public Debt as undeliverable. The most common
cause for a payment to be returned is when a customer changes bank accounts or address and
doesn't give Public Debt new delivery instructions.
-More-
www.publicdebt.treas.gov
PO-20
rrcasury Hunt JbL) h~lps in Public Debt's outreach effort to encourage the holders of some 20
million matured sayings bonds worth S8 billion to redeem their bonds. Although nearly all of
the U\\'ners of matured bonds that Public Debt has contacted know where their bonds are, two out
nf three didn't realize that their bond had stopped earning interest.
Sai~s
E bonds sold from :-fay of 1941 through November of 1965 eam interest for 40 years.
Bonds sold from December of 1965 on earn interest for 30 years. So, bonds issued in February
of 1961 and earlier have stopped earning interest as have bonds issued between December of
196:5 and February of 1971.
Public Debt has a number of employees assigned to a special locator group that finds owners of
undeliwrable payments and bonds. Each year they locate and deliver several millions of dollars
in returned interest payments and thousands of previously undeliverable bonds to their owners,
Tre:.lsury Hunt adds to the effectiveness of this effort by making it easy for the public to check
and see if they've got a bond or payment waiting for them.
000
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
February OS, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
February 08, 2001
May 10, 2001
912795GF2
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.920%
High Rate:
Investment Rate 1/:
5.053%
Price:
98.756
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 69%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FIMA (noncompetitive)
$
24,542,365
1,388,851
165,000
$
5,823,306
5,823,306
Federal Reserve
$
31,919,522
10,446,645
1,388,851
165,000
12,000,496 2/
26,096,216
SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
$
17,823,802
Median rate
4.890%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.870%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-cover Ratio = 26,096,216 / 12,000,496 = 2.17
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,125,826,000
PO-21
http://www .publicdebt.treas.gov
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
February OS, 2001
Office of Financing
202 -691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
182-Day Bill
February 08, 2001
August 09, 2001
912795HG9
High Rate:
4.755%
Investment Rate 1/:
4.940%
Price:
97.596
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 46%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
23,881,572
1,227,509
75,000
$
10,006,081 2/
25,184,081
SUBTOTAL
TOTAL
4,983,162
4,983,162
Federal Reserve
$
30,167,243
8,703,572
1,227,509
75,000
$
14,989,243
Median rate
4.720%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.700%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
25,184,081 / 10,006,081
=
2.52
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $946,381,000
http://www.publicdebt.treas.gov
'0-22
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
1789
omcr OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. -
u.s. International Reserve Position
20220. (202) 622-2960
02/06/01
The Treasury Department today released U.S. reserve assets data for the week ending February 2, 2001. As
indicated in this table, U.S. reserve assets totaled $67,981 million as of February 2,2001, up from $67,324 million
.15 of January 26,2001.
(in US millions)
26, 2001
67,324
I. Official U.S. Reserve Assets
2. 2001
67,981
January
TOTAL
February
I
1. Foreign Currency Reserves
1
I
a. Secu rities
~f
Euro
5.425
Yen
10.518
TOTAL
Euro
15.J43
wn/c.l. Issuer neadauanered in [he U. S.
5,5:2:
Yen
TOT,0.L
'0.656
10.17:1
]1
'J
I
b. Total deposits with:
9.180
b.i. Other central banks andBIS
5.590
14.nO
b.ii. Of NhiCh. banks located abroad
0
0
b.iii. Banks headquartered outside the U.S.
0
b.ii. Banks headquartered in the U.S.
:: .Ii.
=f
:mlGi
:).Jr:Ks
2. IMF Reserve Position
3. SpeciLlI Qra'.'Iing r:\ights (SORs)
t Gold Stock:
1I
4
.A<hl
,~J'--'
J
,
'J
J
5.088
'5.:0·1
10.J79
,'C'.5,:~
~
2
5.663
J
,ccatee .n the U.S
2
9 ,...Jv,,')')"
11,04;:3
..
li~.
I
i. Other Reserve Assets
J
1/ Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA). valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
deposits reflect carrying values.
21 The items. "2. IMF Reserve Position" and "3. Special Drawing Rights (SORs)," are based on data provided by the 1f'vIF and are valued in
dollar terms at the offic:al SOR/dollar exchange rate for the reporting date. The 1f'vIF data for January 26 are final. The entries In the table
above for February 2 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IrviF
data.
31 Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of November 30, 2000. The October 31, 2000 value
was $11,046 million.
PO-23
JI
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
January 26. 2001
1. Foreign currency loans and securities
February 2. 2001
o
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
o
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
January 26. 2001
1 Contingent liabilities in foreign currency
February 2, 2001
o
o
o
o
o
o
o
o
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the US.
3.c. With banks and other financial institutions
headquartered outside the US.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
PUBLIC DEBT NEWS
)epartment of the Treasury • Bureau of the Public Debt· Washington, DC 20239
Contact: Peter Hollenbach
(202) 691-3502
FOR RELEASE AT 3 :00 PM
Febroary 6, 2001
PUBLIC DEBT ANNOUNCES ACTIVITY FOR
SECURITIES IN THE STRIPS PROGRAM FOR JANUARY 2001
The Bureau of the Public Debt announced activity for the month of January 2001, of securities within the
Separate Trading of Registered Interest and Principal of Securities program (STRlPS).
Dollar Amounts in Thousands
Principal Outstanding
(Eligible Securities)
$2,196,244,025
Held in Unstripped Form
$2,014,032,931
Held in Stripped Form
$182,211,094
Reconstituted in January
$15,078,211
The accompanying table gives a breakdown of STRlPS activity by individual loan description. The balances in
this table are subject to audit and subsequent revision. These monthly figures are included in Table V of the
Monthly Statement of the Public Debt, entitled "Holdings of Treasury Securities in Stripped Form."
The Strips Table along with the new Monthly Statement of the Public Debt is available on Public Debt's
Internet site at: www.publicdebUreas.gov.Awide range of information about the public debt and Treasury
securities is also available at the site.
000
PO-24
www.publicdebt.treas.gov
TABLE V
Loan Description
Treasury Bonds:
CUSIP:
912810DM7
DQ8
DR6
DU9
DN5
DPO
DS4
DT2
DV7
DW5
DX3
DY1
DZ8
EA2
<=30
;:C8
ED6
E=4
::oF1
EG9
;:H7
;:J3
;:KO
;:L8
EM6
EN4
EP9
EQ7
ES3
81
EV6
EW4
;:xz
EYO
EZ7
FA1
F89
FE3
FFO
r=G8
FJ2
FM5
•
HOLDINGS OF TREASURY SECURITIES IN STRIPPED FORM JANUARY 31 2001
Corpus
STRIP
CUSIP
Interest Rate:
912803 AB9
11·5/8
AD5
12
AG8
10·3/4
AJ2
9·3/8
912800 AA7
11·3/4
912803 AA1
11·1/4
AC7
10·5/8
AE3
9-7/8
AFO
9·1/4
AH6
7-1/4
AK9
7-112
AL7
8-3/4
AM5
8-7/8
AN3
9-1/8
AP8
9
AQ6
8-7/8
AR4
8-1/8
AS2
8-1/2
ATO
8·3/4
AU7
8-3/4
AV5
7-7/8
AW3
8-1/8
AX1
8-1/8
AY9
8
AZ6
7-1/4
BAO
7·5/8
Ba8
7-1/8
BC6
6-1/4
BD4
7-112
BE2
7-5/8
3F9
6·7/8
BG7
6
3H5
6-3/4
BJ1
6·1/2
BK8
6·5/8
BL6
6-3/8
3M4
6-1/8
BP7
5-1/2
BV4
5-1/4
BW2
5-1/4
CG6
6-1/8
CH4
6-1/4
Amount Outstanding in Thousands
Total
Outstandina
11/15/04
05/15/05
08/15/05
02115/06
11/15/14
02115/15
08/15/15
11115/15
02115/16
05115/16
11/15/16
05115/17
08115/17
05115/18
11/15/18
02115/19
08115/19
02115120
05115/20
08/15/20
02115/21
05115/21
08115/21
11/15/21
08115/22
11115/22
02115123
08115/23
11/15124
02115/25
08115/25
02115/26
08115/26
11115/26
02115/27
08/15127
11115/27
08115128
11/15/28
02115/29
08/15129
05115130
Total Treasury Bonds ....... ............ . ....
Treasury Inflation-Indexed Notes:
Series: Interest Rate:
CUSIP:
3-5/8
9128273A8
J
3-3/8
2M3
A
3·5/8
3T7
A
3-7/8
4Y5
A
4·1/4
5W8
A
3-112
A
6R8
912820 BZ9
BV8
CL9
DN4
EK9
GA9
07/15/02
01/15/07
01115/08
01/15/09
01115/10
01/15/11
Total Inflation-Indexed Notes . ..........
Treasury Inflation-Indexed Bonds:
Interest Rate:
CUSIP:
9128033N2
3-5/8
912810 FD5
CF8
3-7/8
PH6
Total Inflation-Indexed Bonds ... .......
Reconstituted
This Month 16
Maturity Date
04/15/28
04/15/29
Portion Held
In
Unstriooed Form
Portion Held In
Striooed Form
8,301,806
4,260,758
9,269,713
4,755,916
6,005,584
11,350,799
5,215,916
5,925,859
6,802,754
18,823,551
18,824,448
16,856,669
12,929,358
7,367,439
7,689,470
17,061,298
19,595,932
9,918,268
8,373,783
18,872,306
10,414,573
10,718,788
10,683,482
31,731,194
10,288,790
8,584,626
17,344,061
22,669,044
10,159,162
11,126,170
11,878,207
12,837,916
10,458,418
11,453,177
10,251,071
10,395,756
22,461,339
11,776,201
10,947,052
11,350,341
11,178,580
17,043,162
4,425,006
1,914,008
5,605,713
4,687,116
2,006,384
6,478,639
3,495,916
3,245,859
6,289,954
18,144,351
17,511,968
10,676,669
10,418,958
3,279,439
3,143,470
11,128,498
18,338,972
8,334,668
3,454,743
9,049,426
9,753,773
6,442,948
9,391,002
14,406,869
9,238,390
3,776,626
10,011,261
18,939,412
3,683,242
3,014,170
7,636,287
11,476,616
7,456,818
6,823,177
6,743,871
9,078,956
15,965,339
11,591,801
10,559,852
11,023,141
11,109,780
17,030,746
3,876,800
2,346,750
3,664,000
68,800
3,999,200
4,872,160
1,720,000
2,680,000
512,800
679,200
1,312,480
6,180,000
2,510,400
4,088,000
4,546,000
5,932,800
1,256,960
1,583,600
4,919,040
9,822,880
660,800
4,275,840
1,292,480
17,324,325
1,050,400
4,808,000
7,332,800
3,729,632
6,475,920
8,112,000
4,241,920
1,361,300
3,001,600
4,630,000
3,507,200
1,316,800
6,496,000
184,400
387,200
327,200
68,800
12,416
513,952,737
366,783,834
147,168,903
13,004,862
18,281,307
17,315,646
18,116,631
16,881,508
11,714,706
6,002,918
18,281,307
17,315,646
18,008,868
16,881,508
11,714,706
6,002,918
0
0
107,763
0
0
0
0
0
0
0
60,000
0
88,312,716
88,204,953
107,763
60,000
18,092,646
20,886,300
18,092,646
20,886,300
0
0
50,000
50,000
38,978,946
38,978,946
a
100,000
396,800
180,000
39,200
34,880
118,400
718,400
56,640
160,000
408,000
298,400
253,760
569,920
145,600
123,200
48,400
281,600
107,200
281,600
227,680
363,840
294,400
407,360
150,400
2,283,050
10,400
171,200
632,000
1,112,992
601,680
433,600
511,360
353,700
469,600
99,600
168,000
155,200
321,600
0
13.600
1,600
0
0
11
~~a~::, _.,CLOINGS OF 7R::ASURY SECURITIES IN STRIPPED FORM, JANUARY 31, 2001 - Continued
A.mount Outstanolng In Thousands
;3"'~I?
Maturity ;)ate
:'~'St?
~'t'3S,",1
_~','
'.::-·~s
s:;>
::.u~standlnQ
r,!erest °3te i
--3'4
5-315
:-58
\':9
:;
:::'0
>:64
'.V
H
5=5
X
~85
3
T
~H1
Y
'45
K
3" :5:0 A:O
CPO
rAO
DR5
F88
DS3
;:C6
5-518
6- 1/2
5-1/4
6·5/8
5-3/4
5-5/8
5·1/2
OT1
BA4
CX3
;:-04
OW4
DYO
3B2
6-1/2
;:G7
5-1/2
=29
N
6-3/8
FH5
AD
:>
5-5/8
0
2C5
,~
2=1
:G6
R
C
5X6
:L5
SAS
0
S
:P6
523
:SO
5C1
R
=
T
;:U
;:49
A
:W1
6S
G
V
04/30/01
04/30/01
05/15/01
85/15/01
05131/01
05/31/01
07!31/01
07/31101
08/15/01
M
AC
A=
~3/31/01
;:;:9
:39
D:5
03131/01
06130/01
05130/01
AS
::
7-718
~2115/01
0::115/01
0:123/01
02128/01
F=2
ox:
5L:
S92
5P3
:54
501
268
5R9
08131/01
08131/01
09130/01
09/30/01
6-1/4
5-7/8
7-112
5-7/8
5-1/8
6-1/4
6-3/8
10131/01
10131/01
6-i/4
0:123/02
02/26/02
03/31/02
03/31/02
04130102
11/15/01
11/30/01
12131/01
01131/02
01!31/02
6-112
5-5/8
6-1/2
6-5/8
6-318
7-112
'J4130/02
05115/02
05131/02
05/31102
:Y7
H
5-1/2
6-5/8
6-114
6;:4
W
6-3/8
J6130/02
K
6
07131/02
X
3
6-1/4
63/8
6-1/4
6-1/8
5-7/8
6
5-3/4
5-3/4
5-5/8
07131/02
J8/15/02
·J8!31/02
08131/02
09/30/02
:?·C4
5.,0
,C55
3G5
6K3
3J9
5L 1
3L4
3C3
5P::
M
N
P
5-5/8
3S9
6aO
~O
3V2
C
'" 1/8
5·1,'2
4-3/4
5-1/4
5-1/2
::56
~1""'8
3::3
5·1/'2.
435
401
5-3/4
4H2
4K5
G
,-53
3
4N9
4U3
N51
50\5
:>59
-I
5-1,"2:--3/8
5-3/4
5-1/4
3:=5
::S1
;=1,,16
CC9
FV4
CE5
ei-18
12131/02
-,2131/02
01131/03
F:5
CN5
GS7
Sr3
01/31/03
G::I15/03
CS4
CU9
02/28/03
03/31/03
C'N5
OA2
04/30/03
OCS
3G1
~=4
CJ3
3",9
3
DQ7
3J5
5F5
5· ~ 14
~U8
~SS
--~14
BK2
356
-35
5
o
-·-:",15
-I
A
5·-/5
... ,..,
a
~
-"
...
3-3/4
.S:
J
=
5N7
.\ 31
:..
\50
3
5-5,'8
!~~I
aN5
=?4
3P1
11/15/04
11/15/04
:::115/05
05/15/05
J5/~
5/CS
J5/15/05
G:Ji 5/05
~~~I
':;5/15/06
StrlPoed Form
11/15/05
~7/15!06
21,033,523
12,398,083
12,873,752
13,721,702
19885,985
14,::82,240
19,001,309
14,136,833
20,541,318
12339,185
14,000,224
20,118,595
14,518,514
18,797,828
14,639,843
19,196,002
24,226,102
33,504627
31,166,321
13,453,346
19,381,251
13,799,902
16,563,375
14,301,310
17,237,943
14,474,673
17,390,900
11,714,397
13,503,890
14,871,523
13,058,694
14,320,609
12,231,057
15,057,900
23,859,015
12,731,742
15,072,214
12,806,814
15,144,116
26,593,882
12,120,580
15,058,723
12,052,433
14,836,432
13,100,640
15,452,778
23,562,591
13,670,354
14,17:2,892
1 ::,573,248
13,132,243
13,126,779
28,011,028
19,852,263
18,625,785
12,955,077
17,823,228
14,440,372
18,925,383
13,346,467
18,089,806
14,373,760
32,658,145
13,834,754
14,739,504
28,552,370
15,002,580
15,209,920
15,812,300
15,513,587
16,015,475 [
22,740446
22,459,675
I
10/15/06
:;WSI
2~'15/07
'"3,103,678
:;X4 1
25/;5/:-7
J5J1S/G7
13.958,186
25636,803
13583412
27,190961
25,J83125
14,794790
27,399,894
:::31
:::115103
;~c!
11/15/J3
2S/'; 5/03
:;S/;SI'J9
25/15/:,'9
:::~ 5/1::'
:3.'~ :.'1 J
I
I
"" ,-- -'4 '
-"',--'
, ,=" I
1
I
o
o
o
o
o
25,600
o
2,400
5,339,000
o
o
13.7:1,702
19,785,985
14,282,240
18,996,509
14,136,833
20,083,318
7,459,185
14,000,224
20,118,595
14,518,514
18,297,028
14,639,843
19,194,402
19,371,462
33,504,627
31,087,921
13,453,345
19,381,251
13,799,902
16,538,175
14,301,310
17,235,543
14,474,573
17390,900
7,635,997
13,503,890
14,871,823
13,058,694
14,319,009
12,231,057
15,057,900
21,438,215
12,731,742
15,072,214
12,768,414
15,144,116
26,534,682
11,838,980
14,995,683
11,862,033
14,836,432
13,100,640
15,452,778
22,744,835
13,626,354
14,172,092
12,573,248
13,132,243
13,125,179
25,940,628
19,785,663
18,276,185
12,603,077
17,797,628
14,075,572
18,925,383
11,998,467
18,089,806
14,368,960
32,658,145
100,000
o
o
o
o
127,525
o
o
o
o
o
4,800
800
o
o
458,000
4,880,000
25,600
o
o
o
500,800
o
1,600
4,854,640
o
73,400
o
o
o
o
o
o
o
o
28,000
o
o
o
o
o
o
o
25,200
800
o
o
o
o
o
o
3,878,400
58,160
o
o
1,600
1,600
o
2,400
o
o
o
o
o
o
o
o
2A20,800
436,800
o
o
38,400
o
59,200
281,600
63,040
190,400
o
o
o
o
o
o
o
o
o
o
o
817,856
44,000
800
58,304
o
o
o
o
1,600
1,070,400
55,600
349,600
352,000
25,600
364,800
o
1,348,000
o
4,800
o
13,464,514
14,739,104
28,562,370
15,002,580
14,864,320
126.400
o
o
o
o
o
o
o
o
60,800
o
o
19,200
o
4,000
o
o
o
o
o
370,240
400
3,200
o
o
o
o
o
345,600
57,600
:5,812,300
o
15,493,107
15,736,435
22,740,446
22,459,675
12,994,846
13.801,386
20,480
279,040
647,360
o
o
o
o
108,832
156,800
411,200
11,500
65,600
71,200
5,600
100
190,OGO
25,225,603
::3,255.709 !
" =-,
,,-_0_ coo
---~"
5,246,400
6,066,402
'5,367,153
12,819,771
19,586,630
14,180,740
21,579,752
13,780,470
21,031,123
7,059,083
12,873,752
11,312,302
15,367,153
12,819,7':'1
19,586,630
14,180,740
21,605,352
13,780,470
SIJOi
J\'5:
3
03/15/04
08/15/04
SR7
-""I
..:.·3''':'
82115/04
,25115/04
05115/04
11115/05
:"31
':'=5
05131/03
06130/03
08!15/03
CJ8115/03
11/15/03
02115/04
Beg
;:-xo
~I';
:3
11/30/02
11/30/02
5-7/8
.!-3 /4
7-1/4
"57
09130/C2
10/31/02
~8
~-1/4
::5:-
06130/02
CK1
K
SMO
UnstnDo""'d Form
Keconstltuted
This Month 18
I
3e r,€,s
~=9
!-----::7:-0-:a-:----~---::::?-o-:rt'-:o-::-n-:H:-e-:ld~'n-'--;;?:-o-:rt-,o-n-rl-;-e-:ld-:-'n----i
13,571,812
27,125,361
25,011,925
14,789,190
27,.399,794
23,165,709
22,437,594
o
o
o
1,600
o
o
5,600
o
o
o
250000
o
o
'520,065,1991
: C14 'J32 9-r
1
182_211094
15078_211
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
February 06, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-3/4-YEAR NOTES
This issue is a reopening of a note originally issued November 15, 2000.
Interest Rate:
Series:
CUSIP No:
STRIPS Minimum:
Issue Date:
Dated Date:
Maturity Date:
5 3/4%
F-2005
9128276N7
$800,000
High Yield:
February 15, 2001
November 15, 2000
November 15, 2005
Price: 103.527
4.904%
All noncompetitive and successful competitive bidders were awarded
securities at the high yield.
Tenders at the high yield were
allotted 12%. All tenders at lower yields were accepted in full.
Accrued interest of $ 14.61326 per $1,000 must be paid for the period
from November 15, 2000 to February 15, 2001.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
$
Competitive
Noncompetitive
21,633,291
323,798
$
11,000,089 1/
21,957,089
SUBTOTAL
1,278,593
1,278,593
Federal Reserve
$
TOTAL
23,235,682
10,676,291
323,798
$
12,278,682
Median yield
4.880%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low yield
4.840%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
= 21,957,089 / 11,000,089 = 2.00
1/ Awards to TREASURY DIRECT
=
$266,638,000
htip:llwww.publicdebt.treas.gov
~O-25
PUBLIC DEBT NEWS
Department of the Treasury· Bureau of the Public Debt· Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
February 07, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF lO-YEAR NOTES
Interest Rate:
Series:
CUSIP No:
STRIPS Minimum:
5%
B-2011
9128276T4
$40,000
High Yield:
February 15, 2001
February 15, 2001
February 15, 2011
Issue Date:
Dated Date:
Maturity Date:
5.067%
Price:
99.479
All noncompetitive and successful competitive bidders were awarded
securities at the high yield.
Tenders at the high yield were
allotted 100%. All tenders at lower yields were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competi t i ve
Noncompetitive
FlMA (noncompetitive)
$
22,926,930
83,801
50,000
$
23,060,731
SUBTOTAL
TOTAL
11,003,931 1/
970,760
970,760
Federal Reserve
$
24,031,491
10,870,130
83,801
50,000
$
11,974,691
Median yield
5.050%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low yield
4.990%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
23,060,731 I 11,003,931
=
2.10
1/ Awards to TREASURY DIRECT = $37,675,000
http://www.publicdebt.treas.gov
PO-26
DEPARTMENT
TREASURY
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.• WASIDNGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
February 8, 2001
STATEMENT BY TREASURY SECRETARY PAUL H. O'NEILL
Through hard work and ingenuity, Americans have created a booming economy that has
produced an enormous budget surplus in Washington. It's the people's money, and we should
get it back to them as quickly as possible.
Today we are proposing a tax cut for every taxpayer. This package is a pay raise for
every working American. Four-person families earning $35,000 a year will no longer bear any
federal income tax burden. Four-person families earning $50,000 will see their taxes cut in half.
And four-person families earning $75,000 will see their tax burden reduced by 25 percent.
This tax relief package is sound fiscal and economic policy. It fits easily within our
budget framework which walls off the Social Security surplus and continues to pay down the
public debt in increasing amounts each year.
Despite the rhetoric of some, the President's tax relief plan increases the progressivity of
our tax code. In 1998, the top 10 percent of income earners paid 65 percent of federal income
taxes, while the bottom half of income earners paid 4.2 percent of the total federal income tax
burden. After implementing the President's tax relief plan, the top 10 percent of income earners
will pay 66 percent of all federal income taxes. More importantly, this tax bill reflects our
optimism about America's future. Lowering income tax rates keeps the American Dream firmly
within everyone's reach and helps people move up the economic ladder of success. We must
have a tax code that encourages entrepreneurship and rewards hard work.
There is no downside to enacting this tax relief package. Today, Washington takes more
from American taxpayers than it needs to run the government. That's not fair. And it isn't
useful to pile up resources in Washington, where they will be spent to enlarge government.
Individual Americans know better how to spend their money. The average family will keep
$1,600 a year that they would otherwise have sent to Washington. That's enough for two
monthly mortgage payments or a year of junior college tuition.
PO-27
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S Government Printing Office 1998· 619·559
Evidence of an economic slowdown makes this tax relief all the more compelling. While
the Fed has already acted to stem a downturn, I believe in a 'belts and suspenders' approach.
Cutting income tax rates can help keep this downturn from taking root. If the economy does
worsen, I don't want to look back and say "if only we had acted sooner." We have a surplus that
should be returned to the American taxpayers. To the extent that getting it back to them sooner
can help stave off a worsening of the economic slowdown, we should move forward
immediately.
I look forward to working with Congress to give relief to every taxpayer, and to do it
quickly.
-30-
U
;',
e .-\ K
f
~;.
E ;\ T
0 F
T II
r·~
r R E
r\ S tJ R Y
NEWS
TREASURY
OFFICI!. OF PU:aLlC AFFAIRS. 1500 PENNSYl.VANIA AVENUa., N.W•• WASHINGTON.
IllBARGOBD tlN'l"IL 2: 30 P. II.
rebnary 8, 2001
CONTACT:
n.c .• 20220. (202) &12.2'60
Office of F.inancing
202/691-3550
TREASURY OFPBRS 13-WBElt AND 26-WUX BILLS
The Treasury will auction two series of Treasury bills totaliDg
approximately $21,000 ~llion to refund $20,008 ~lliCD of publicly held
securit:i.es maturing February 15, 2001, and co raise about $992 million of new
cash.
~ addition to the public holdings, Federal Reserve Banks for their own
accounts hold $9,168 m:i.llion of the maturing bills, which may be refunded 'at
the highest: disco\U1c rate of accepted campetitive tenders. Amounts awarded
to these accounts will he' in addition to the offering amount.
up to $1,000 m:i.llion ~ noncompetitive bids fram'Foreign and Inter=ational XOnetary ~tbority (PIKA) accounts bidding through the Pederal
Resarve Bank of ~_ York rill be iDclu.ded "i~ ·the offering aJDCunt of each
auction. These DOACampetitive bids will ~ve a limit of .$200 million per
.a.ccount and. will b. accepted 1::1 the orcler of smallest to la:-geat, up to the
aggregate a.ward limi~ of $1,000 million.
TreasuzyDirec:c customer. have requ•• ted that we reinvest their maturing
holQ~s Q~
.pp~oxim&t.ly
$1,037 milliOft
~to
th. 13-week'bill and $1,221
million into the 26-week bill.
'rhis offering of Treasury seeuri ties is governed by the terms and conditions .et forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Ent:y Treasury Bills, Notes, and Bon4&(31 CPR. Part 356, as
aman4ed).
Dacails about each o£ the new securities are given in the attached
offering highlights.
000
Attacbment
PO-29
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BS ISSUSO FBBRUARY lS, 2001
February 8, 2001
Of fering Amount ........................ $11,000 million
Description of Offering.
Tera and type of seourity •.•••••.......
CUBIP number ••........••.•••••••••..•.•
Auotion date ••........••....••....•...•
ISSU8 date ..•••.•••...••.•..••.•.......
Maturity date ••.•••••••••...••...•••...
O'riginal issue da.te •.•••....••••.....•.
CUrrently outstanaing •..•...•.••••.•...
Minimum bid amount and mUltiples ••....•
91-day bill
912795 GO 0
February 12, 2001
Pebruary 15, 2001
May 17, 2001
November 16, 2000
$14,594 ~llion
$1,000
$10,000 million
182-day bill
912795 GO 8
February 12, 2001
February 15, 2001
August 16, 2001
Pebruary 15, 2001
$1,000
The following rules apply to all seourities mentioned abovel
Submission of Bids:
Noncompetitive bidsl Accepted in full up to $1 Million at the highest discount rate of acoepted
c~etitive bids.
Foreign and International Monetary Authority (PIMA) bidsl Nonoompetitive pid. submitted
thro~gh the Federal Reserve Banks
agents for PIMA acoounts. Accepted in order of size
fram smallest to largest with no more than $200 million awarded per account. The total
noncompetitive amount awa~ded to Federal Reserve Banks as agdnts for YIMA accounts will
not exceed $1,000 million~ A 8ingle bid that would cause the limit to be exceeded will
be partially accepted in the amount that brings the aggregate award total to the $L,OOO
million limit. However, if there are two or more bids of equal amounts that would cause
the limit to be exceeded, each will be pror.ted to avoid exceeding the limit.
Competitive bidss
(1) Must be expressed as a discount rate with three decimals in incra.ent. of .005%, e.g.,
7.100', 7.105'_
(2) Net long position for each bidder must be reported when the sum of the total b~d amount,
at all discount rates, and the net long position is $1 billion or greatar.
(3) Net long position must be determined as of one half~hour prior to the closing time for
reoeipt of oompetitive tenders.
Maxlmum Recognized Bid at a Single Rate ••• 35% of public offering
Kaxlmum Award •••••••••••••••••••••.•••••.• 35% of public offering
Receipt of Tend.rsl
Noncompetitive tenders •• Prior to 121~O nooD,eastern standard time on auction day
Competitive tenders •...• Prior to 1:00 p.m. eastern standard time on auction day
Pay!ent,~erms:
By charge to a funds account at a Federal Reserve Bank on issue date, or pay.m.nt
of full par ~ount with tender. TreasuryDirect customers can use the Pay Di~ect feature wb~ch
8.
~uthorise • • ~h~rge
to their
acooun~
of record at their £inancia1
~nBt~tution
on i.sua date.
he Presiden
Agenda for Tax Relief
Page I of9
llis:tOI"Y
",,,'lib
:M"Mi
For I\: ids
The President's Agenda for Tax
Relief
"These are the basic ideas that guide my tax policy: lower income taxes
for all, with the greatest help for those most in need. Everyone who pays
income taxes benefits - while the highest percentage tax cuts go to the
lowest income Americans. I believe this is a formula for continuing the
prosperity we've enjoyed, but also expanding it in ways we have yet to
discover. It is an economics of inclusion. It is the agenda of a government
that knows its limits and shows its heart."
- President George W. Bush
Executive Summary
The President has proposed a bold and fair tax relief plan that will reduce
the inequities of the current tax code and help ensure that America remains
prosperous. This tax relief plan promotes the values that make the American
economy second to none -- access to the middle class, family, equal
opportunity, and the entrepreneurial spirit. This plan will reduce taxes for
everyone who pays income taxes, and it will encourage enterprise by
lowering marginal tax rates.
Under the President's tax relief plan, the typical American family of four
will be able to keep at least $1,600 more of their own money.
Over the past several months, the economy has slowed dramatically.
President Bush's tax cut will give the economy a timely second wind by
placing more money in the hands of consumers and entrepreneurs. President
Bush also understands that, over the long run, wealth is created by hardworking, risk-taking individuals, not government programs. Countries with
low taxes, limited regulation, and open trade grow faster, create more jobs,
and enjoy higher standards of living than countries with bigger, more
centralized governments and higher taxes. The United States has led the
way in economic performance over the last century because America is a
freer country. If people are given the freedom to create, they do. If people
are given a stake in the outcome, they succeed.
President Bush's tax relief plan reflects this basic trust in the American
people and confidence in the American ideal by increasing tax fairness and
enhancing the performance of the economy. It includes:
• Replacing the current tax rates of 15,28, 31, 36, and 39.6 percent
with a simplified rate structure of 10, 15,25, and 33 percent (see
Appendix for rate schedule);
• Doubling the child tax credit to $1,000 per child and applying the
1://www. whitehouse. gov!nawi/report':iltaxplan.html
02/08/2001
he Presidett' s Agenda for Tax Relief
Page 2 of9
credit to the Alternative Minimum Tax (AMT);
• Reducing the marriage penalty by reinstating the lO percent
deduction for two-earner couples;
• Eliminating the death tax;
• Expanding the charitable deduction to non-itemizers; and
• Making the Research and Experimentation (R&D) tax credit
pennanent.
Increasing Tax Fairness
"My ~ax .cut plan is not just a~out productivity, it is about people.
Economics IS more than narrow mterests or organized envy. A tax plan must
apply market principles to the public interest. And my plan sets out to make
life better for average men, women and children."
- President George W. Bush
The ~urrent tax code is full of inequities. Many single moms face higher
margmal tax rates than the wealthy. Couples frequently face a higher tax
burden after they marry. The majority of Americans cannot deduct their
charitable donations. Family farms and businesses are sold to pay the death
tax. And the owners of the most successful small businesses share nearly
half of their income with the government. President Bush's tax cut will
greatly reduce these inequities. It is a fair plan that is designed to provide
tax relief to everyone who pays income taxes.
Increasing Access to the Middle Class:
High marginal tax rates act as a tollgate, limiting the access of low and
moderate-income earners to the middle class. The belief that any worker,
with enough effort, can join the middle class is at the heart of the American
Dream. But when government attempts to help the poor by simply
redistributing income, it often undennines incentives to work harder and
earn more.
Because the benefit of the Earned Income Credit diminishes as a worker's
income increases, a single mother with two children on the outskirts of
poverty will lose nearly half of any additional dollar she earns (taking into
account social insurance taxes, state income taxes, and federal income
taxes). The benefit of taking an extra training course, working an extra shift,
or assuming additional responsibility is cut in half by the government. As a
result, a single mother with two children earning $25,000 a year faces a
higher marginal tax rate than a lawyer earning $250,000.
Lowering these barriers to the middle class is one of President Bush's top
priorities. To provide a greater reward for those who make the sacrifices
needed to move ahead, the President's tax cut plan will substantially lower
:llwww.whitehouse.gov/newslwporls./taxplan.html
02/08/2001
be Presldem os Agenda for Tax Relief
Page 3 of9
the marginal tax rate for low-income parents. The marginal federal income
t~ rate would fall by over 40 percent for low-income families with two
chlldren (see Chart 1), and by nearly 50 percent for families with one child.
These lower rates result from two key changes in the tax code:
• Cuts the current 15 percent tax bracket to 10 percent for the first
$6,000 of taxable income for singles, the first $10,000 for single
parents, and the first $12,000 for married couples; and
• Doubles the existing child tax credit to $1,000 and applying the credit
to the AMT.
CHART 1
THE BUSH TAX CUTS LOWER MARGINAL TAX RATES FOR FAMILIES ON THE
OUTSKIRTS OF POVERTY
Single Parent vvith 2 Children Earning Between $22,000 and $30.800
Lowering the High Tax Burden on Families:
Federal income tax revenue rose dramatically in the 1990s. Today, federal
taxes from all sources are the highest they have ever been during peacetime,
topping 20 percent of GDP. High taxes force families to work harder each
year to fuel a growing government. Overall, Americans now work over four
months of the year to fund government at all levels.
This high tax burden strips families of resources needed to help solve their
most pressing problems. Every family faces different challenges: some need
better childcare, some need tutoring for their children, and others need a
greater variety of after-school programs. Government cannot tailor its
programs to the needs of each family. That is why President Bush believes
that the best way to help all families is to let each family keep more of its
income - and spend it as it deems appropriate. His plan will lower the tax
burden on families by, among other things, reducing tax rates, expanding
the child credit, and reducing the marriage penalty. His plan will also raise
the threshold for the phase-out of the child tax credit from $110,000 to
$200,000 for married couples, and from $75,000 to $200,000 for single
parents.
Reducing the Marriage Penalty
:llwww. whi tePousc. go·liH~wil.LreportsL!axplan.html
02/08/2001
'he Presiden s Agenda for Tax Relief
Page 4 of9
The current tax code frequently taxes couples more after they get married.
This marriage tax contradicts our values and any reasonable sense of
fairness. President Bush's tax relief plan will greatly reduce the marriage
penalty by restoring the deduction for two-earner families. This will allow
the lower-earning spouse to deduct 10 percent - up to $3,000 - of the first
$30,000 of income. The marriage penalty will be further mitigated by
lowering marginal tax rates, which will reduce the portion of the marriage
penalty that is derived from a steep rate structure.
Promoting Charitable Giving:
Since the introduction of the income tax, the law has recognized the
importance of encouraging charitable giving by providing a deduction.
Today, however, 70 percent of all filers cannot deduct their charitable
donations because they do not itemize deductions. Thus, to encourage an
outpouring of giving, President Bush's plan will expand the federal
charitable deduction to non-itemizers. This change will allow every
taxpayer to deduct his or her charitable donations and will generate billions
of dollars annually in additional charitable contributions. The President also
supports other proposals to increase charitable giving.
A Fair and Balanced Tax Cut:
President Bush believes that a fair tax cut does not pick winners and losers.
Everyone who pays income taxes should receive a tax cut. He also believes
that a tax cut should especially benefit lower and middle-income families.
Accordingly, the lowest income families will receive the largest percentage
reduction (see Chart 2). As a result, more affluent Americans will shoulder
a larger portion of the federal income tax burden. The President looks
forward to working with the Congress to address other fairness issues, such
as the Alternative Minimum Tax, to further his goal of lowering income
taxes for all Americans that pay them.
CHART 2
THE HUSH TAX CUT PROVIDES THE GREATEST PERCENTAGE REDUCTION FOR THE
LOWEST IrjCOME FAMILIES
105z
100z
~5z
c:
'"
::;
""
(l)
.'"
~
'"0
'Oz
35z
30z
75z
70z
~5z
E
~OZ
0
55z
50z
.£:
.!:
c:
.Q
0
::J
.",
'"
II
X
~5z
40"
35"
30z
25z
20z
15z
10z
5z
oz
0
0
0
0
0
0
~
i
0
0
0
0
0
0
0
0
0
aaa
0
0
0
~
0
0
0
0
0
0
...~ i
0
0
0
~
"
"
0
5
""" """
""
"
~ ~ ~
0
0
0
t
0
""
i
0
0
0
0
0
0
""
"v " "
~ "" ~ ~
0
..
000
000
000
i
0
0
0
0
0
0
~ ~ ~ ~
0
0
0
£
Income
:IIWWW.whitehouse.gov/ncw::t!r8portiitaxplan.html
02/08/2001
'he Presideit.'s Agenda for Tax Relief
I
Page 5 of9
•• 1.: T._ ........ If ............ , .......................... 1. . . . . . ' •• Iii . . . . . . . . . . . 1 ••• 1.... riCA ...
.1.1 ••••••• I •••
I
Real Tax Relief for Real Families:
When ~resident. Bush's. proposal is fully in. place, the typical family with
two chIldren wIll receIve at least $1,600 III tax relief. This is real and
practical help:
• Sixteen hundred dollars will pay the average mortgage for almost two
months;
• Sixteen hundred dollars will pay for a year's tuition at a community
college;
• Sixteen hundred dollars will pay the gasoline cost for two cars for a
year; and
• Sixteen hundred dollars will buy an average family 24 months worth
of electric power.
Preserving Prosperity
"The momentum of today's prosperity began in the 1980s - with sound
money, deregulation, the opening of global trade and a 25 percent tax cut.
Along the way we have confirmed some truths and discarded some dogmas.
Government can be an ally of enterprise - by creating an environment that
rewards work and inspires investment. But government does not create
wealth. Wealth is the' economic measure of human creativity and enterprise."
- President George W. Bush
In addition to making the tax code more fair, President Bush's agenda will
also improve the performance of the economy. His tax cut will help prevent
a prolonged economic downturn, and it will encourage innovation. His plan
will also allow workers to pay down consumer debt, while leaving growing
surpluses to pay down a record amount of public debt.
A Slowing Economy:
The evidence that the economy is slowing continues to build:
• Consumer confidence has dropped for four straight months;
• The manufacturing sector has contracted for six straight months;
• Bankruptcies are on the rise;
• The unemployment rate is beginning to climb; and
• Economic growth slowed to a 1.4 percent annual rate at the end of
,:llwww. whitehouse.gov/new6ln:po rtsitaxplan.html
02108/2001
ne Presidelt~4s Agenda for Tax Relief
Page 6 of9
2000.
Every week we hear about another round of layoffs. Last month Federal
Reserve Chairman Alan Greenspan testified that the economy h;d almost
stopped growing. President Bush believes that the best way to ensure that
prosperity continues is to put more money in the hands of consumers and
entrepreneurs. That is why he advocates cutting tax rates now. President
Bush w~ll ~ork with the COfolgress ~o accelerate a portion of his tax plan to
the begmnmg of 2001. An ImmedIate tax cut would give the economy a
timely second wind.
Lowering the Debt Burden on Working Americans:
Although the federal government is facing an enormous surplus, many
Americans are not. Consumer debt has reached an all-time high and now
exceeds $1.5 trillion (see Chart 3). Credit card debt alone totals over $600
billion, more than $2,000 for every man, woman, and child in the country.
This high debt level will eventually restrict consumer spending. And if
consumer spending slows, the economy will slow also. Tax relief would
give these families the ability to pay down their debt.
CHART 3
CONSUMER DEBT HAS DOUBLED OVER THE LAST DECADE
$2,000
$1,300
m.~~~
$1,600
$1,400
(,OJ
$1,200
t;~~~~~~~
~ $1,000 1.
:::::
Q:J
$300
$600
$400
$200
$0
1992
1993
1994
1995
1996
1997
1993
1999
2000
2001
SOlJrce: Federal Reserve Board
Cutting Marginal Tax Rates to Raise the Standard of Living:
One of the most powerful tools the federal government. has to rai~e
standards of living is to lower marginal tax rates. The margm~l tax rate IS
the tax on each additional dollar of income. The lower the margmal rate, the
greater the incentive to find a better job, to save for the future, or start a n~w
business. Lower marginal tax rates also leave more resourc~s WIth
innovative entrepreneurs, instead of funding government bureaucracIes.
The marginal tax cuts of the 1980s helped generate the venture capital that
is now fueling the growth of the Internet and oth~r technologIes. N.ew
technologies are boosting produ?tivity a~d eco.nomic growth by helPI~g
companies achieve new efficienCIes. In thIS enVIronment, entrepreneurshIp
://www.whitehou~e.gov/news/reports/taxplan.html
02/08/2001
:be Presidei~:'s Agenda for Tax Relief
Page 7 of9
has become the pat? to. prosperit!' for many minorities, women, and young
people .. Yet, today: s high ma~gmal tax rates tend to penalize continued
mnovatIOn and busmess formatIOn and expansion.
High marginal t.ax.rates inhibit entrepr~!1eurial activity because they act as a
suc.cess tax, claImmg a larger shar~ of mcome from flourishing enterprises,
whIle the government shares lIttle of the risk of loss. For most
entrepreneurs, income taxes reduce their companies' cash flow - the
money businesses need to expand, buy more equipment, and hire more
workers.
To ensure con!inued innovatiot.I, Pre~ident Bush believes the tax system
should be revised to restore mcentIves for success. In this period of
revolutionary tec~ologic~l change, the government should leave as many
resources as possIble With the entrepreneurs and companies that are
generating new ideas, better jobs, and greater wealth. The President's tax
relief plan will cut the top marginal rate, which many small businesses pay,
from nearly 40 percent to 33 percent. Reducing the top rate will spur
entrepreneurial activity and investment, helping to attract the best workers
from around the globe to America.
Encouraging Innovation through the Research and
Experimentation Tax Credit:
Another impediment to innovation and economic growth is the uncertainty
surrounding whether the current Research and Experimentation tax credit
will continue to exist. The tax credit was originally enacted in 1981 and
currently provides companies with a 20 percent tax credit for incremental
R&D expenditures. The credit encourages the technological developments
that are an important component of economic growth. However, extensions
of the tax credit have resulted in three gaps in coverage, two of which were
retroactively filled. The on-again, off-again nature of the tax credit impedes
long-term research in the U.S. Thus, President Bush will make the Research
and Experimentation tax credit permanent. This should help spur the
sustained, long-term investment in R&D that America needs to develop the
next generation of critical technologies.
Ending the Death Tax:
The death tax also impedes economic growth because it levies yet another
layer of taxes on capital. More capital investment means higher incomes for
all workers. Since the marginal federal tax rate on savings can reach 68
percent (the 40 percent top income tax rate combined with the effect of the
55 percent top death tax rate and the state death tax credit), the ?eat~ tax can
also create a disincentive for seniors who want to save for their children or
grandchildren.
The punitively high death tax can fall most heavily on.small businesses and
family farms that are asset rich b~t cash poor. Ac~ordm~ t? a 1993 survey,
nine of ten successors whose famIly busmesses faIled wlthm three years of
the owner's death listed the death tax as a contributing factor. Finally, by
encouraging intricate planning techniques to reduce taxes, the death tax has
created an entire industry of specialized lawyers and accountants .. The added
complexity and compliance costs make this one of the least effiCient federal
taxes.
:llwww.whitehoasc.gov/nowslr~p()rtsitaxplan.html
02/08/2001
"'he Presidei~\'s Agenda for Tax Relief
Page 8 of9
President Bush believes that the bias of the death tax against the famil
farm and family business is the antithesis of the American Drearr
Accordingly, his tax relief plan will eliminate the death tax. Eliminating th
death tax will allow family farms and businesses to be passed from on
generation to the next without having to break up or sell the assets to pay.
punitive tax to the federal government. As a result, wealth would be taxej
only when it is earned, not again when entrepreneurs and senior citizen
pass the fruits of their labors to the next generation.
APPENDIX
Tax Rates by 2001 Taxable Income*
Current Code
Bush Plan**
Single
Single
$0
$27,050
15~0
$27,050
$65,550
28°1.
$65,550
$136,750
31%
$136,750
$297,350 / 36% / $136,750
--
$297,350
1/
39 .6 %
.000 II $27,050 /15% /
I
$36,250
I
$93,650
1
Head of Household
$0
28%
I
$10,000
$36,250
$151,650 / 31%
I
$36,250
$151,650
$151,650
--
I
$151,650
$297,350
36%
$297,350
--
39.6%
i
$0
$0
I
$45,200
I
15%
$45,200
/1
$109,250
I
28% lf$i2,000
II
Ii
:llwww. whitehouse. go vInew6/N~/taxplan.html
$10,000
10
11
II
%
I
15%
"""'X°
,t.;)
33%
Married- Joint Filing
Married- Joint Filing
I
--
115% II
3,650
I
$13o_7S0 '125 %
$27,050
Head of Household
~6'250
10%
$6,000
II
$12,000
10%
$45,200
15%
i
02/08/2001
be Presidefi-'s Agenda for Tax Relief
Page 90f9
I$109,250 I $166,500
31%
$166,500
$297,350
36%
I $297,350
--
39.6%
$45,200
$166,500
$166,500
--
I
1
25
%
I
33%
I
* Taxable income is income less deductions and personal exemptions.
**Rate schedule assumes tax plan is fully phased in.
I Privacy Policv I Text O!llY I !:kIQ I
':llwww.whit~{1ouse.govfIIews/rcport5l'1axplan.html
02/08/2001
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBliC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W. • WASIDNGTON, D.C .• 20220. (202) 622-2960
Contact: Public Affairs
(202) 622-2960
FOR IMMEDIATE RELEASE
February 8, 2001
TREASURY SECRETARY PAUL H. O'NEILL ANNOUNCES PAM OLSON AS
DEPUTY ASSISTANT SECRETARY FOR TAX POLICY
Treasury Secretary Paul O'Neill today announced that Pam Olson has joined the
Department of the Treasury as Deputy Assistant Secretary for Tax Policy.
"Pam brings incredible tax code expertise to the Treasury," said O'Neill. "The President
is determined that we cut taxes for every American quickly. Pam's experience means she's
ready to hit the ground running. And that makes her a valuable asset to every American eagerly
awaiting tax relief."
Olson is the immediate past Chair of the American Bar Association Section of Taxation.
She was a partner at Skadden, Arps, Slate, Meagher, & Flom, LLP, prior to joining the Treasury
Department. Before joining Skadden Arps, Olson spent 5 years in the Office of the Chief
Counsel at the Internal Revenue Service. Olson is married to Grant Aldonas and has three
children.
--30--
PO-30
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s. Government Pnntlng Oll,ce:
1998 - 619-559
U EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASlDNGTON, D.C .• 20220. (202) 622-2960
Contact: Public Affairs
(202-622-2960
FOR IMMEDIATE RELEASE
February 13,2001
MEDIA ADVISORY
Treasury Secretary Paul H. O'Neill will hold a pre 0-7 press conference at 10:00
a.m. EST on Thursday, February 15,2001 in the Treasury Department's Diplomatic
Reception Room (Room 3311), 1500 Pennsylvania Avenue, NW.
The Room will be available for pre-set at 9:00 a.m.
Media without Treasury or White House press credentials planning to attend
should contact Treasury's Office of Public Affairs at (202-622-2960) with the following
information: name, social security number and date of birth. This information may also
be faxes to (202) 622-1999.
PO-31
-30-
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
'U S Government Pflntlng Ott.ce 1998· 619-559
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
February 12, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
February 15, 2001
May 17, 2001
912795GGO
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.900%
High Rate:
Investment Rate 1/:
5.032%
Price:
98.761
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 42%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
23,347,294
1,443,611
250,000
$
11,014,461 2/
25,040,905
SUBTOTAL
$
TOTAL
4,707,177
4,707,177
Federal Reserve
29,748,082
9,320,850
1,443,611
250,000
$
15,721,638
Median rate
4.880%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.870%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
25,040,905 / 11,014,461
=
2.27
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,137,431,000
http://www .pu blicdebUreas.gov
PQ-32
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
February 12, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
February 15, 2001
August 16, 2001
912795GQ8
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.745%
High Rate:
4.929%
Investment Rate 1/:
Price:
97.601
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 54%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
22,943,240
1,640,205
50,000
$
10,007,445 2/
24,633,445
SUBTOTAL
$
TOTAL
4,461,296
4,461,296
Federal Reserve
29,094,741
8,317,240
1,640,205
50,000
$
14,468,741
Median rate
4.720%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.690%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
24,633,445 / 10,007,445
=
2.46
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,296,005,000
http://www.publicdebt.treas.gov
PO-33
-
DEPARTMENT
OF
TREASURY
i'J NEW S
~<".
lREASURY
THE
"',,'
OmCE OF PUBUC AFFAIRS .1500 PENNSYLVANIA AVENlTE, N.W.• WASIllNGTON, D.C.. 20220. (202) 622-2960
EMBARGOED UNTIL 10 A.M. EST
Text as prepared for Delivery
February 13, 2001
Contact: Tara Bradshaw
(202) 622-2960
TESTIMONY OF TREASURY SECRETARY PAUL O'NEILL BEFORE THE HOUSE
COMMITTEE ON WAYS AND MEANS
Good morning Mr. Chairman, Mr. Rangel and members of the Committee. It gives me
great pleasure to be here this morning, as we move one step closer to providing comprehensive
income tax relief to American taxpayers. On Thursday I presented the President's tax package to
House and Senate leaders, and I urged then that we get right to work to deliver tax relief to
working Americans as soon as possible.
I am pleased that you are starting the hearing process so quickly. I hope that your
leadership will help ensure early passage of the President's proposals. With you I am ready to
roll up my sleeves, get down to work and leave money in the pockets of every income tax paying
American.
Through hard work and ingenuity. Americans have created a booming economy that has
spread prosperity around the world. Individuals have created new technologies that have made
our industries more productive and have improved the standard of living for millions of
Americans.
Our prosperity has made the unthinkable possible. After decades of budget deficits. we
now have the opportunity to wall off the Social Security surplus so it can't be spent on other
government programs. And even after we lock away Social Security, we still have more tax
dollars coming into Washington than Washington needs to pay for agreed upon public services.
This isn't just a budget surplus, it's a tax surplus. We have no business continuing to
collect more in Federal taxes than the cost of the services the government provides. If the phone
company overcharged one of your constituents. you' d join them in calling for a refund. The
same principle applies to this tax surplus - it's not the government's money, it's the people's
money. and we should return it to them as quickly as possible.
PO-34
For press releases, speeches. public schedules alld official bIographies. call our 24-hour fax line at (202) 622·2040
DEPARTMENT
OF
THE
TREASURY
~~178~9~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11....11
....................................
OmCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 10 A.M. EST
Text as prepared for Delivery
February 13,2001
Contact: Tara Bradshaw
(202) 622-2960
TESTIMONY OF TREASURY SECRETARY PAUL O'NEILL BEFORE THE HOUSE
COMMITTEE ON WAYS AND MEANS
Good morning Mr. Chairman, Mr. Rangel and members of the Committee. It gives me
great pleasure to be here this morning, as we move one step closer to providing comprehensive
income tax relief to American taxpayers. On Thursday I presented the President's tax package to
House and Senate leaders, and I urged then that we get right to work to deliver tax relief to
working Americans as soon as possible.
I am pleased that you are starting the hearing process so quickly. I hope that your
leadership will help ensure early passage of the President's proposals. With you I am ready to
roll up my sleeves, get down to work and leave money in the pockets of every income tax paying
American.
Through hard work and ingenuity, Americans have created a booming economy that has
spread prosperity around the world. Individuals have created new technologies that have made
our industries more productive and have improved the standard of living for millions of
Americans.
Our prosperity has made the unthinkable possible. After decades of budget deficits, we
now have the opportunity to wall off the Social Security surplus so it can't be spent on other
government programs. And even after we lock away Social Security, we still have more tax
dollars coming into Washington than Washington needs to pay for agreed upon public services.
This isn't just a budget surplUS, it's a ta\ surplUS. We have no business continuing to
collect more in Federal taxes than the cost of the services the government provides. If the phone
company overcharged one of your constituents. you'd join them in calling for a refund. The
same principle applies to this tax surpl us - it's not the gon:rnment's money, it's the people's
money, and we should return it to them as quickly as possible.
PO-34
For press releases, speeches, public schedules and ojJicial hlographies. call our 24-hour fax line at (202) 622-2040
The President has proposed tax relief that reinforces the values that make America greatopportunity, entrepreneurship, strong families and individual success.
First, the President has proposed reducing income taxes for every American who pays
income taxes. The current five rate system will be simplified to four rates, and the tax rate on the
first $6,000 of taxable income earned by every American -- $12,000 in the case of married
couples -- will fall from 15 to 10 percent.
High income tax rates block access to the middle class for working Americans struggling
to get ahead. And high income tax rates punish success. We should not allow the threat of
higher taxes on the next dollars earned to discourage Americans from working harder. Increased
productivity has been one of the fundamental engines of our economic success, and the tax
system should not dampen our ability to be more productive. We must have a tax code that
keeps the American Dream in everyone's reach and helps people move up the economic ladder
of success. We must have a tax code that encourages entrepreneurship and rewards hard work.
The President's tax relief plan also strengthens the ties that bind families together.
•
It doubles the child tax credit to $1,000 per child. Parents everywhere have one goal above
all others: to give their children the best possible opportunity for success and happiness in
life. The increased child tax credit will give parents more resources to save for college
tuition, pay for braces or hire a tutor.
•
This plan also reduces the unfair marriage penalty. We as a society celebrate when two
people decide to spend their lives together. Why would our tax code punish them?
•
And this plan eliminates the unfair death tax. Government has no business confiscating the
legacy parents work their entire lives to build for their children.
Today we are proposing a tax cut for every income tax payer. Four-person families
earning $35,000 a year will no longer bear any federal income tax burden. Four-person families
earning $45,000 will see their income taxes cut in half. And four-person families earning
$75,000 will see their tax burden reduced by 22 percent.
The President's tax relief plan ensures that higher income earners pay a larger share of
taxes than thev do now. In 1998, the top 10 percent of income earners paid 65 percent of federal
income taxes: while the bottom half of income earners paid 4.2 percent of the total federal
income tax burden. After implementing the President's tax reliefplan, the top 10 percent of
income earners will pay 66 percent of all federal income taxes.
2
This plan provides relief to all income tax payers. There's a strange attitude around this
town that once the money gets here it doesn't belong to the taxpayers anymore - it belongs to
some amorphous thing called government. That's simply not true. Every person who paid
income taxes created the tax surplus. And everyone of the people who paid income taxes
deserves to get some of it back.
Taxpayers in the higher tax brackets will invest their tax relief in the economy, creating
jobs for all Americans. Economic studies have documented that higher income individuals tend
to save the bulk of any new income they receive. A small businessman receiving tax relief will
plow that back into the firm, either to increase productivity, which results in higher wages, or to
hire more workers. A farmer receiving a large tax relief check will be able to trade in his tractor
and purchase the newest technology to improve his crop yield. America's economy will grow as
these investments go forward.
This tax relief package is sound fiscal and economic policy. It fits easily within our
budget framework which walls off the Social Security surplus and continues to pay down the
public debt in increasing amounts each year. I like to refer to it as the Goldilocks tax relief plan not too big, not too small, just right.
There is no downside to enacting this tax relief package. Today, Washington takes more
from American taxpayers than it needs to run the government. That's not fair. And it isn't
useful to pile up resources in Washington, where they will be spent to enlarge government. Alan
Greenspan has pointed out that at the current pace, we'll pay off most of the publicly held debt in
a few years, and then there will be no place to put the surplus. We do not want government
taking money from the taxpayers and using it to buy up private resources.
Individual Americans know better how to spend their money. The typical family of four
will keep $1,600 a year that they would otherwise have sent to Washington. That's enough for
two monthly mortgage payments or for a year of junior college tuition.
Evidence of an economic slowdown makes this tax relief all the more compelling. While
the Fed has already acted to stem a downturn, I believe in a 'belts and suspenders' approach.
Cutting income tax rates can help keep this downturn from taking root. If the economy does
worsen , I don't want to look back and sav "if onlv. we had acted sooner." We have a surplus that
should be returned to the American taxpayers. To the extent that getting it back to them sooner
can help stave off a worsening of the economic slowdown. we should move forward
immediately. Taking action soon will boost consumer confidence, which in tum will boost
consumer demand. And getting money in people's pockets quickly will enable Americans
struggling with consumer debt to pay their credit card bills and get ready for another consumerled expansion.
-
3
I can't accept the idea that it takes nine months to get tax relief on its way to the
American people. I used to run a 140,000-employee company. If I decided to give my
employees a raise, I wouldn't wait nine months to do it. With our economy slowing, now is the
time to boost consumer confidence with quick congressional action.
I look forward to working with Congress to give relief to every income tax payer, and to
do it quickly. It's time to give working Americans a raise.
-30-
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
1789
omcr OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. -
u.s. International Reserve Position
20220. (202) 622-2960
02/l3/01
The Treasury Department today released U.S. reserve assets data for the week ending February 9,2001. As
indicated in this table, U.S. reserve assets totaled $67,382 million as of February 9, 2001, down from $68,059
million as of February 9,2001.
(in US millions)
I. Official U.S. Reserve Assets
February 2, 2001
68,059
TOTAL
1. Foreign Currency Reserves
I
1
a Securities
Euro
5,522
Yen
10,656
February 9, 2001
67,382
TOTAL
Eur'J
16,177
5,.+75
Yen
TOTAL
10,-1-83
0
Of WhiCh, issuer heaaquartered in the U.S
15,957
0
b, Total deposits with:
9,332
b.i. Other central banks and BIS
h.ii. Banks headquartered in the. U.S.
bji. Of which. banKS located abroad
b.iii. Banks headquartered outside the U.S.
b.iii Of wnich, banks located in the U.S.
2 IMF Reserve Position
2
3. Special Drawing Rights (SDRs)
1 Gold Stock ;)
i Other Reserve Assets
2
5,663
1.+,995
9,250
5,57~
0
0
0
0
:J
15,094
1../,:.128
10,748
10,630
11,046
11,046
I]
0
deposits reflect carrying values.
2J The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRJdoliar exchange rate for the reporting date. The IMF data for February 2 are final. The entries in the table
above for February 9 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF
data.
'
31 GOld stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of November 30,2000. The October 31,2000 value
'0-35
0
iJ
0
11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
was $11,046 million.
14,822
U.S. International Reserve Position (cont'd)
1\. Predetermined Short-Term Drains on Foreign Currency Assets
February 2, 2001
1. Foreign currency loans and securities
February 9. 2001
o
o
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.B. Short positions
2.b. Long positions
3. Other
1\1. Contingent Short-Term Net Drains on Foreign Currency Assets
February 2, 2001
1. Contingent liabilities in foreign currency
February 9, 2001
o
o
o
o
o
o
o
o
1.a. Collateral guarantees on debt due within 1 year
1.b.. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.B. With other central banks
3.b. With banks and other financial institutions
headquartered in the U.S.
3.c. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
DEPARTMENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlUNGTON, D.C. - 20220 - (202) 622.2960
FOR IMMEDIATE RELEASE
February 13,2001
Contact: Tara Bradshaw
(202) 622-2960
FACT SHEET
The Budget Surplus
$5.6 trillion
Total Surplus:
(CBO 10-year estimate)
mmus
Social Security Surplus:
(CBO 1O-year estimate)
$2.5 trillion
President's Tax Relief Package:
(Treasury 10-year estimate)
$1.6 trillion
Remainder, for Medicare and other purposes:
$1.5 trillion
PO-36
-30-
Far press relea.'ies, speeches, public schedules and official biographies, caU our 24-hour fax line at (202) 622·2040
'U 5 Government Printing OHlce. 1998· 81\}-5S9
NEWS
TREASURY
OFnCB OF PUBLIC 4iFAIlt.S 8U80
P~NNSYLVANtA
AV'lNUE, N.W.' WA~BrNCTONt D.C.e
COlft'ACT:
mmAllGOlm 'Qft:tJ:. 2 t 30 P. K.
P~Z'\1A~ :1.4, 2001
l02~O' (20l) 612-2"~
Ott1ce o~ :r~Da:Ac:b9'
202/691-35SQ
The 'rnasury will auctioD $11,000 million of 2-yaar uoees to refund $27,211
of publicly held securities maturiDg Peb:ruuy 28, 2001, and to pay d.own about
mi~lion
$:1.6,21.1 a:Lllicll.
:In additiOD 1:.0 the public holc1inga, Pedezoal lteserYe Bank. hold $5,1" millioD
of tha maturiDg securities foZ' their. OVA aC:C:ou.Dt., which mill' be zoefu:a.de4 by issuing
all
additicma.l CIDOUDe of Cb.e new
.ecurJ.~.
up to $1,000 mil1iou ill ~oDccmp.titiv. bids from Poreigll and rDter.Dational
lIoDet:a:ry Auehcrity (I'm) accouats hic!cliDg tl::u:oU.g-J:f the Ped.4ral :a•• ezove aazak of Raw
Yozk w:L.~~ ba iJu:luc1ecl riehin t.he offariDg a.Nnt of the auct.ion. These 2lOncampeti..
d ...,. h:Lds will bava a 1Ua:i.t: of $200 ailliou per a.eceunt: and will be accepted ~ t:he
o~ of! 8IIII&l.:la.t to laqallt, up eo the aggregate awu-t! l;i.:lait of $16 000 ail~icu.
0:
2'zoea.vzo.y.D.iraCi: c~t:aae:r:. Z'e'Pa.t.d t-hae " . :r:.:i.IL"•• ~ tba:ir a&t'.U.rug holdiDga
app:o;o;:i,;m,atel.y $537 ailli.OD izLto the 2-y.u-, ~~e.
The al&c::~iOA ril.1 ~e r:oza4uc::~.c! iA the .iAgle-ps::'ce auction fozmat.. Al.l cC8lpet.:.cive aDd. ZIODC:OIIIpe~~uve a".~c!a will. b. at ~ htgb•• t pe:ld of accept..c1 4omp.~it.i.".
teDcicars • -
'rhi.s offer1ug of Treasury securi ti.. i . goYemecl by th.e tezma ad cODdi ~OG.
set for1:h il1 the trlUfoCil Offering CirC1&lar foZ' the Sa1e a= Isaue o:f Kark.tela :look ...
EZlt:y "rreuu.ry Bil.l.s, Irote., ad.!ona. (3l. CJ"». Part 35',
a.
De2lded.).
Details about ~. n . . . . ecu:rity ue g!ftI1 in ~ &~ta=h.ec! offeriug b1ghl.ighta.
000
PO-37
-
B%GllLla"rS ,O~ ~ OPl"DlllG TO IftDI PUm.:tC 01'
2-YlIAR lIOTI:S '1'0 BB ISS'UZI) ~y 28, 2Q01.
P8b~
otfe:-ing Amount. ••••••••••••••••
nesC%ipt1oD of
~.r.D
oO
••••••••••••••
14. ZOOl
$11 , 000 milliOD
O~f.~i;
aDd type of •• ~~ ••••••••••••••••••••• 2-year Doee.
Sezoiea •• _ •••••••••••••••••••••••••• ., •••••••••••-3003
CO'SXJL za11Pbe:" •••••••••••••••••••••••••••••••••• 912 827 611 1
Auction date •••••••••••••••••••••• -... ••••••••••• Pel:)ru&ry 2J., 200l.
~S.U8 date •••••••••••••••••••••••••••••••••••• I'eb%ua:y 28,
2001
'28, 2001
Maturity ciat•••••••••••••••••••••••••••••••••• I'el)rua:y 28, 2003
Inter. . t rate ••••••••••••••••••••••••••••••• r.Dat.r.min.4 baaed OD the highast
!)at.e4
at.••...........................•....... I'ebz'ua:y
accepted campeeitiva bid
Yie.1d .•••••••••••••••••••••••••••••••••••••••• Detes:.i.De4 at agc t.1.oD
Interest payment dates •••••••••••••••••••••••• ADgust 31 aDd
~~ bi~
..ognt
ana
~l~:i.pl. . . . . . . . . . . . . . . .
~ebruary
28
$1,000
Aecruad interast payable by inv•• tor •••••••••• ~0Zl.
Premi~ or di.COUDt ••••••••••••.••••••••.••••• Dete:miDed at auction
I~PS %~£or.mat:i.~:
Kini-u. ~t ~i%e4 ••••••••••••••••••••••• Deter.miDed at auctiOD
Cozopua CtJ'SIl' ~ ••••••• _ ••••••••.••••••••. :912820 (;J) 3
Due date (a) uui CO'SD numher (a)
'for additi~ ~~(a) •••••••••••••••••••••••ot applicable
~ •• iOD
of Bias;
b:i.ct.:
Accepted ill ,fu11 up t:.o $S aill:i.ou at the highest accepted ~eld.
70reigu imd Iate=atiODal Irozleta:y Authority (PIKA) biaas Xozaeompetiti". bid•
..w:.:l ~tec! ~ the Pede:al R. .e~e sua&. a. agent. foZ' I'%D. &CC01mt• •
Accepted in orc!.er o~ .::I.lie f%'OIa .... 11.a~ ~o lazoge.t ri~ 110 aor. thaD '20,0
million awarc1ecl per accOWIt. '1'Ile ~oul IaOAccimp.~ti".. amoaIl~ ~ecl ~o I'Hes:oal
Jr.•••rv. Banlc8 a. ageDt., for FDA accO'DoDta rill zaot exceed $1,000 mi11J.OD.
A
single Did that wou14 caus. cbe limit to :be axceec!ed ril.l. be par1::Lal.l.y aecepted
111 ehe a.oun:c ti&at In:iZlga the ~eg.co ••ard. tot&l. to the ",000 ai.1.1iOZl loWt.
JIowever 1 if chere ~ two 0:1:' more l:IicS8 of equ.~ ~t.. tlIat woul.d. cau.. ell.
l~c ~o be exceeded, ••ch w111 ~ proraced to avoid exc••di=g ~ ~c.
!1'oACampe~:L t:.i,,,.
c:omp. e.i ~!l." . D:ld.s:
(1) XU.t 1)8 expressed. as a yieJ.d with three cieciaala, e.g., '.123,115.
(2)
(l)
.et lcmg positiou for each hidcler aaat lle reported .hen the . , . o~ the
to~al bid. a.cun~, at all. ~al.da, aAd. the net long position i. $2 hUllcm
or greateZ'.
!fet 10Dg positiaa. .waf: be c:lateDdnecJ .. of eme half-hour prior t:.o the
closing ~ fo~ ~eeip~ of competitive tendars.
Racosni~e4 Bid at a Single Yield ••••••••••• 3S% of public of£eriDg
X-z;mam Award •••••••••••••••••••••••••••••••••••••. JS~ Q~ pub11c of~~Dg
!aximxm
llaae,ipt of !'CI,4era:
JrODCompetitive teucler.: Prior to 12:00 DOOIL eastam 8tanclaZ'Cl tme OIl auction ay.
CcaIIpetiti". t.enders: Pz:oior co 1:00 p . . . . . . t.e%!l atanc!arc1 cia. on auc:Ci= day.
Payment: ~eaul: By CAa:l:'98 CO' a fwlc!a aec01Ult:. at a :recSeral Ita••rve JSimk CD 1s.ue
dace. or paymeut of full paz- aIDOUAt with ~encier. ~&SU%'l"D.:Lreet: cuat~Z'S eel U • •
~he Pay D.i%ect feature .~~ autbori.e. a charge eo C~r acOOUZlt o~ J:'8Coz:-d at
'
tl:uai:r fiuanei.al. inst.it:ut.ion OIl issuo' at•.
UEPARTMENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED
Text as prepared for Delivery
February 15, 2001
Contact: Tara Bradshaw
(202) 622-2960
STATEMENT BY TREASURY SECRETARY PAUL H. O'NEILL
AT THE PRE-G-7 PRESS CONFERENCE
Good morning. The G-7 meeting in Palermo on Saturday will be my first, and I look forward
to meeting and engaging with my colleagues on a number of important issues. The occasion of
these meetings provides a key opportunity to frame the Administration's priorities on
international economic and financial policy.
I want to underscore that on economic and financial policy, as in other areas, the United
States will remain fully engaged internationally. Our vision is of a world in which people have
the opportunity to achieve their full potential. Prudent national policies, active cooperation and
discussion with other governments, and effective international institutions are essential to
achieve this goal. Three particular priorities have stood out during my early days as Treasury
Secretary.
Sustaining economic growth must be at the heart of our efforts. As the world economy
begins to slow somewhat, policies focused on sustaining growth are more important than ever.
The United States in particular has experienced an extraordinary period -leading expansion in
the world economy and the innovations that have helped improve potential. We remain
committed to the goal of achieving healthy economic growth while preserving low inflation.
Nonetheless, the world must not rely on the United States as the engine of global growth. Others
must also grow at their true potential rate. Europe and Japan must tackle challenges in their
economies to help contribute to global expansion and a reduction in external imbalances.
PO-38
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
At the same time, we must protect against financial crises that have the potential to disrupt
growth - as they did in emerging Asia, for instance, in the late 1990s. Crisis prevention needs
re-invigoration. Crises strike when there is a failure to detect them early, or a failure to identify
and implement the measures needed to avert them. With the knowledge and understanding
available today, the international community should be able to do a better job of anticipating
weaknesses and undertaking necessary steps to keep crises from taking full form. IMF
surveillance of member economies provides a key tool for foreseeing and correcting potential
problems. Implementation of international standards and codes should be pursued with energy,
and countries' performance monitored closely - by investors as well as the international
community. We need a common understanding of macroeconomic, real and financial variables
that are key indicators of potential trouble, and the IMF and others should help make the
information available.
And as we address the macroeconomic priorities of growth and financial stability, we must
also attend to the critical task of building the policy, regulatory and legal infrastructure necessary
to permit market economies to work. This is a particularly fundamental challenge in a number of
countries still making the transition from command economies to market-based economies - and
it needs to be given top priority along with macroeconomic stabilization. Identifying the key
measures that need to be pursued is admittedly easier than implementing them. Highest priority
should be given to the elements of market infrastructure that support the engines of growth small and medium enterprises, foreign direct investment, and exports. Macroeconomic stability
is fundamental. But tax, regulatory and judicial systems that are simple, fair, and credible are
equally essential. This means, among other things, ensuring that contracts are enforceable and
enforced, private property is respected, and corruption is avoided. We hope that by identifying
successes among transition economies, and helping those still struggling to begin to put the basic
elements in place, even in microcosm if necessary, we can pave the way for these countries to
achieve lasting recovery and contribute productively to the world economy as a whole.
Effective and accountable international institutions are a cornerstone of effective work in all
of these areas. In Palermo, I look forward to engaging with my colleagues on ways to continue
reforms in this area. I attach particular priority to a transparent and accountable IMF. I also look
forward to further progress on the principles laid out by the G-7 for reform of the multilateral
development banks through more efficient allocation of and better accountability for their
resources. And finally, I want to emphasize the important role that the United States and the G-7
believe both the IMF and World Bank need to play in the ongoing international effort to fight
financial abuse.
--30--
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: 8
Author(s):
Title:
Press Conference with Treasury Secretary Paul O'Neill Re: Upcoming G-7 Ministerial
Date:
2000-02-15
Journal:
Volume:
Page(s):
URL:
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
OFFICE OF PUBLIC AFFAIRS e 1500 PENNSYLVANIA AVENUE, N. W. e WASHINGTON, D.C.e 20220 e (202) 622-2960
EMBARGOED UNTIL 2:30 P.M.
February 15, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction two series of Treasury bills totaling
approximately $20,000 million to refund $19,683 million of publicly held
securities maturing February 22, 2001, and to raise about $317 million of new
cash.
In addition to the public holdings, Federal Reserve Banks for their own
accounts hold $9,616 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders. Amounts awarded
to these accounts will be in addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of each
auction. These noncompetitive bids will have a limit of $200 million per
account and will be accepted in the order of smallest to largest, up to the
aggregate award limit of $1,000 million.
Treasu~Direct customers have requested that we reinvest their maturing
holdings of approximately $994 million into the 13-week bill and $833 million
into the 26-week bill.
This offering of Treasury securities is governed by the ter.ms and conditions set forth in the Unifor.m Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) •
Details about each of the new securities are given in the attached
offering highlights.
000
Attachment
PO-39
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED FEBRUARY 22, 2001
February 15, 2001
Offering Amount ........•......•......•.• $10,000 million
Description of Offering:
Ter.m and type of security ..............• 91-day bill
CUSIP number •.........••...........•.•.• 912795 GH 8
Auction date ...•...•..••.....•.....••..• February 20, 2001
Issue date ..•..••......•.•.••..•..•..•.• February 22, 2001
Maturity date ...•.•.•..•...•••.••••.•••• May 24, 2001
Original issue date ••••••.•..••••.•••••. November 24, 2000
Currently outstanding •••••••••••.••••••• $14,927 million
Minimum bid amount and multiples .••••••• $l,OOO
$10,000 million
182-day bill
912795 HH 7
February 20, 2001
February 22, 2001
August 23, 2001
February 22, 2001
$1,000
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted
through the Federal Reserve Banks as agents for FIMA accounts. Accepted in order of size
from smallest to largest with no more than $200 million awarded per account. The total
noncompetitive amount awarded to Federal Reserve Banks as agents for FIMA accounts will
not exceed $1,000 million. A single bid that would cause the limit to be exceeded will
be partially accepted in the amount that brings the aggregate award total to the $1,000
million limit. However, if there are two or more bids of equal amounts that would cause
the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g.,
7.100%, 7.105%.
(2) Net long position for each bidder must be reported when the sum of the total bid amount,
at all discount rates, and the net long position is $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the closing time for
receipt of competitive tenders.
Maximum Recognized Bid at a Single Rate •••• 35% of public offering
Maximum Award •••••••••••••••••••••••••••••• 35% of public offering
Receipt of Tenders:
Noncompetitive tenders •• Prior to 12:00 noon eastern standard time on auction day
Competitive tenders ••••• Prior to 1:00 p.m. eastern standard time on auction day
Payment Terms: By charge to a funds account at a Federal Reserve Bank on issue date, or payment
of full par amount with tender. Treasu~Direct customers can use the Pay Direct feature which
authorizes a charge to their account of record at their financial institution on issue date.
UEPARTlVIENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASmNGTON, D.C .• 20220. (202) 622-2960
FOR RELEASE UPON DELIVERY
February 17,2001
ST ATEMENT BY TREASURY SECRETARY PAUL H. O'NEILL
AT THE POST G-7 PRESS CONFERENCE
Good evening. I want to begin by noting how much I have enjoyed meeting my colleagues and
how much I appreciate the productive and thought-provoking discussions we have had today.
Coming together to share ideas and discuss key issues that we all face is indeed an important and
useful opportunity. We live in a global economy in which developments in one country affect
others, and thus it is important to work closely together - in the G-7 in particular - to promote
common goals.
Although world growth has slowed somewhat, we agreed that the fundamentals for sustained
growth remain in place and that macroeconomic and structural policies need to focus on
supporting growth. My colleagues were particularly interested in hearing about the U.S.
economy and our policies. We noted that policies in Europe need to focus on enhancing growth
potential, and we shared concern about remaining downside risks in Japan.
On exchange rates, let me repeat for you what we said together:
"We discussed developments in our exchange and financial markets. We reiterated our
view that exchange rates among major currencies should reflect economic fundamentals.
We will continue to monitor developments closely and to cooperate in exchange markets
as appropriate."
Finance Minister Kudrin and Central Bank Governor Gerashenko joined us to discuss Russia's
economic policy priorities. Together, the G-7 urged the Russian authorities to step up the
process of economic reform and meet in full their financial obligations. As they face the task of
reform, we underscored the importance of creating the policy, regulatory and legal infrastructure
necessary to make market economies work. We also urged Russia to move quickly to take
action against money laundering, as outlined by the Financial Action Task Force (FATF) in June
2000.
PO-40
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s. Government Printinq Office:
1998 - 619-559
-2-
We took note of recent progress under the HIPC debt initiative and indicated the importance of a
broader approach to poverty reduction - an issue that we will focus our attention on as we
prepare for the Genoa Summit. We also recognized progress and looked forward to further steps
to strengthen the international financial architecture, including the need to do a better job in
anticipating and preventing crises. In particular, we discussed the key priorities for reform of the
multilateral development banks - greater selectivity, sharper focus on the needs of the poorest
countries, more effective and transparent internal governance and enhanced development impact.
This issue will be a key focus when we next meet in Washington in April.
Finally, we reviewed developments in our shared effort to fight financial abuse. We look
forward to continued steps by identified jurisdictions to undertake needed reforms and urged the
IMF and World Bank to help countries implement relevant anti-money laundering standards. At
the same time, we reiterated our commitment to implement coordinated countermeasures in
cases in of ongoing non-cooperation, based on recommendations by FATF. We also reaffirmed
our support for efforts to address harmful tax practices. While I indicated to my colleagues that
certain aspects of these efforts are under review by the new Administration, I support the priority
placed on transparency and cooperation to facilitate effective tax information exchange. At the
same time, it is critical to clarify that this project is not about dictating to any country what
should be the appropriate level of tax rates.
Again, I found today' s discussion very useful, and I look forward to working closely with all my
G-7 colleagues.
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
February 20, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
February 22, 2001
May 24, 2001
912795GH8
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.905%
High Rate:
Investment Rate 1/:
5.036%
Price:
98.760
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 75%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
23,791,916
1,378,341
540,000
$
25,710,257
SUBTOTAL
$
30,475,658
8,086,616
1,378,341
540,000
10,004,957 2/
4,765,401
4,765,401
Federal Reserve
TOTAL
Accepted
$
14,770,358
Median rate
4.890%: 50% of the amount of accepted competitive tenders
Nas tendered at or below that rate.
Low rate
4.865%:
5% of the amount
)f accepted competitive tenders was tendered at or below that rate.
3id-to-Cover Ratio = 25,710,257 / 10,004,957 = 2.57
L/ Equivalent coupon-issue yield.
l/ Awards to TREASURY DIRECT = $1,102,200,000
http://www.publicdebt.treas.gov
'0-42
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
)R IMMEDIATE RELEASE
=bruary 20, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
February 22, 2001
August 23, 2001
912795HH7
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
4.770%
Investment Rate 1/:
4.955%
Price:
97.589
All noncompetitive and successful competitive bidders were awarded
at the high rate. Tenders at the high discount rate were
.lotted 88%. All tenders at lower rates were accepted in full.
~curities
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tendered
Tender Type
Competitive
Noncompetitive
$
$
25,679,536
SUBTOTAL
$
30,529,827
8,864,619
1,142,917
10,007,536 2/
4,850,291
Federal Reserve
TOTAL
24,536,619
1,142,917
Accepted
4,850,291
$
14,857,827
Median rate
4.750%: 50% of the amount of accepted competitive tenders
s tendered at or below that rate.
Low rate
4.725%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
D-TO-COVER RATIO = 25,679,536 / 10,007,536 = 2.57
FIMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
Equivalent coupon-issue yield.
Awards to TREASURY DIRECT = $905,967,000
http://www .publicdebt.treas.gov
43
NEWS
TREASURY
O~FICE
or PtlBLJC """..\IllS -151& PBNNSYLVANIA AVENUE. N.W.eWASIRMGTON, D.C.e ~02l'.(202) Ul.D'O
DBARGOBD 'ONTDa 9100 A .. H.
PtmLIC COl!1TAC'l':
Office of Financing
HKDIA CONtACT:
Office of Public Affairs
202-691.-3550
February 21, 2001
202-622-2960
~y
AJ[N()1J'NCBS DDT BtJYBACX OPBltATION
On :rebrua:y 22, 2001, the "h'easury will buy back up to $11750 million par
of its out:standillg issues ehat mature between FebrUary 2015 and AUgust 201.'.
Treasury reserves the rig~t to accept less than the annoUDead amo~t.
This debt. buyback (redemption) operation will l:Je conducted. by Treasuryl s
lis cal Agent, the J'ed8ra~ Reserve B~ of New York, us:ing its Open Market
operations system. Onl.y institutions that. the I'ed.eral Reserve Bank of New
lork has app2:ov-eci to ccm4uct Open ~k.t tranaacticma may .W:a~t o£tc. OIl,
hwl! of tb_e elv. . aIleS the1% Cluatomer.. Ofr8%'8 at the higbeet acc::ep~.d
p~ice for a particular issue 'may be aecepted Oft a prorated basia, rounded up
to the next $1.00 I 000. As a resul t o~ this rouucU.ng, the Treasury ~y lnly
hack an amount slight1y large% ~. the one announced above.
'1'h:i.a d.ebt wyback operation is governed by tbe terms 'and ecuciitions .se"t
forth in 31 CJ'R Pare 375 and. this announcement.
The ciel;)t buyback operation regulations are available on the Bu:reau of
the Public Debt's
w.bs~t. a~ www.publicdebt.traas~gcy.
Details about the operation and each of the eligible issues are given
in the attached higl1l:ighis.
000
Attachment.
'0-44
~"r pren rdetUBS, speeckes, public $chelMles .1111 tI/ficUzl biDgraphies, clIll DMT 2~1I11" fta IllIfl ., (J02) 62Z-204-0
February 31, 2001
Par amount to be bought back ••••••.•••• up to $1,750 mil1i~
Operation da~e •••••.• " ••••••.••••.••.• February 22, 2001
Operation close time ••••••••••••••••••• 11:00 a.m. eastern standard t~
Settlemenc dat••••••••••••••• ~ ••••••••• February 26, 3001
Minimum par offer amount •••••••••••••• $100,000
Multipl •• of par ••••••..••••••••..•••• S100,OOO
Format for offers..... Expressed in ~eJ:mS of price per $1.~0 of par with
1:lir.e decimals. 'rh,e first two ciecima1s repl:'eliumt
frac:~ional. 32'" of a dolla.r.
The third. decimal
represents eigh.ths of a 32ud of a dollar, and must
Delivery instructions
Traasu:y issues
Coupon
Rate
<')
11.250
1.0.625
9.875
9.250
7.250
7.500
8.750
8.875
9.12S
9.000
8.875
8.1.25
•
**
be a 0, 2, 4, or 6.
•••••.••••••••• ABA Number 021001208 FRB
elig:iJ:::>le for debt buyba.ck operation
Maturity
Date
02/15/2015
08/15/2015
11/15/2015
02/15/2016
05/15/2016
11/15/2016
05/15/2017
08/15/2017
05/15/2018
11/15/2018·
02/15/2019
08/15/2019·
ct7SIP
,ar Amount
Number
Outstanding*
912810 DP
91.281.0 DS
·912810 DT
912810 DV
912810 DW
912810 DX
912810 DY
912810 DZ
912810 EA
912810 D
912810- Be
912810 ED
Total
0
1.1,351
"
5,216
5,926
6,803
18,824
18·,824
16,857
12,929
7 .. 367
7,689
17,061
19,596
148,443
2
7
5
3
1.
8
2
0
8
6
(in
HYC/COS~
millions) :
Par Amount Pu Amount
Privately
Be~d. as
Helc1*
STlU'PS*·
9,505
5,215
4,049
1.,684
4,919
2,557
5,766
528
17,724
112
17,199
1.270
14,102
·6,392
10,871
2,539
6,128
4,043
6,921..·
4,547
14,906
5,742
17,663
1,210
129,753
35,839.
Par amount:s are as of February 20, 2001.
Par amounts are as of
Feb~
16, 2001..
The difference between the par amount outstanding and the par amount
privacely held is the par amount of those issues held by ~e Pede~al
Reserve System.
UEPARTMENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
u.s. International Reserve Position
02/21/01
The Treasury Department today released U.S. reserve assets data for the week ending February 16, 2001. As
indicated in this table, U.S. reserve assets totaled $67,608 million as of February 16,2001, down from $67~566
million as of February 9, 2001.
(in US millions)
February 9, 2001
67,666
I. Official U.S. Reserve Assets
TOTAL
1. Foreran Currency Reserves
l
1
a.. ~ecurities
Euro
5,475
Yen
10,483
February 16,2009
67,608
TOTAL
Euro
15,957
Ot WhiCh, issuer headquartered in the U. S.
b. Total deposits with:
b.i. Othercentrrll hank", and BIS
.IO~_AL
10,977
0
9,250
b.ii. Banks headquartered in the U.S.
5,412
Yen
5,572
14,822
16,389
0
9,154
5,372
0
14,526
0
b.iL Ofwhfch, banks located abroad
0
0
1.m. Banks headquartered outside the U:S.
0
0
0
0
15,094
15,014-
10,748
10,633
11,046
11,046
0
0
b.iii. Of which, banks located in the U.S.
2. IMF Reserve Position
2
3. SpeCial Drawing Rights (SDRs)
4. Gold Stock :r
5. Other Reserve Assets
2
11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
deposits reflect carrying values.
21 The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valu ed n
dollar terms at the official SDRJdoliar exchange rate for the reporting date. The IMF data for February 9 are final. The entries in the table
abOve for February 16 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the pnor week':.\ Ir-.."'F
data.
31 Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of December 31, 2000. The November 30, 2000
value was $11,046 million.
PO-4S
u.s. International Reserve Position (cont'd)
I. Predetermined Short-Term Drains on Foreign Currency Assets
February 9, 2001
February 16, 2001
o
o
2.a. Short positions
o
o
2.b. Long positions
o
o
o
· Foreign currency loans and securities
· Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
· Other
o
I. Contingent Short-Term Net Drains on Foreign Currency Assets
February 9, 2001
Contingent liabilities in foreign currency
February 16, 2001
o
o
o
o
o
o
o
o
I.a. Collateral guarantees on debt due within 1 year
Lb. Other contingent liabilities
Foreign currency securities with embedded options
Undrawn. unconditional credit lines
3.a. With other central banks
3.b. Withbanks and other financial institutions
headquartered in the U. S.
3.c. With banks and other financial institutions
headquartered outside the U.S.
Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
8R IMMEDIATE RELEASE
ebruary 21, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 2-YEAR NOTES
nterest Rate:
=ries:
JSIP No:
rRIPS Minimum:
Issue Date:
Dated Date:
Maturity Date:
4 5/8%
M-2003
9128276U1
$1,600,000
High Yield:
4.685%
Price:
February 28, 2001
February 28, 2001
February 28, 2003
99.887
All noncompetitive and successful competitive bidders were awarded
at the high yield. Tenders at the high yield were
Llotted 78%. All tenders at lower yields were accepted in full.
~curities
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
Tendered
$
SUBTOTAL
25,313,975
920,681
Accepted
$
26,234,656
Federal Reserve
10,087,875
920,681
11,008,556 1/
3,666,667
3,666,667
--------~--------
TOTAL
$
29,901,323
$
14,675,223
Median yield
4.663%:
50% of the amount of accepted competitive tenders
s tendered at or below that rate.
Low yield
4.620%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
D-TO-COVER RATIO = 26,234,656 / 11,008,556 = 2.38
FIMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
Awards to TREASURY DIRECT
= $711,893,000
http://www .publicdebt.treas.gov
-46
PUBLIC DEBT NEWS
)epartment of the Treasury· Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
February 21,2001
Contact: Office of Financing
202-691-3550
TREASURY'S INFLATION-INDEXED SECURITIES
MARCH REFERENCE CPI NUMBERS AND DAILY INDEX RATIOS
Public Debt announced today the reference Consumer Price Index (CPI) numbers and daily
index ratios for the month of March for the following Treasury inflation-indexed securities:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
3-3/8% 10-year notes due January 15,2007
3-5/8% 5-year notes due July 15,2002
3-5/8% 10-year notes due January 15,2008
3-5/8% 30-year bonds due April 15,2028
3-7/8% 10-year notes due January 15,2009
3-7/8% 30-year bonds due April 15,2029
4-1/4% 10-year notes due January 15,2010
3-1/2% 10-year notes due January 15,2011
This information is based on the non-seasonally adjusted U.S. City Average All Items Consumer Price
Index for All Urban Consumers (CPI-U) published by the Bureau of Labor Statistics of the U.S.
Department of Labor.
In addition to the publication of the reference CPI's (Ref CPI) and index ratios, this release
provides the non-seasonally adjusted CPI-U for the prior three-month period.
This information is available through the Treasury's Office of Public Affairs automated fax
system by calling 202-622-2040 and requesting document number 41. The information is also available
on the Internet at Public Debt's website (http://www.publicdebt.treas.gov).
The information for April is expected to be released on March 21, 2001.
000
Attachment
PO-47
http://www.publicdebt.treas.gov
TREASURY INFLATION-INDEXED SECURITIES
Ref CPt and Index Ratios for
March 2001
Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additionalls5ue Date(5):
3-7/8% 10-Year Notes
Series A-2009
9128274Y5
January 15, 1999
January 15, 1999
July 15, 1999
Maturity Date:
Ref CPI on Dated Date:
January 15, 2009
164.00000
Date
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
CPI-U (NSA) for:
3-7/8% 30-Year Bonds
Bonds of April 2029
912810FH6
April 15, 1999
April 15, 1999
October 15,1999
October 15, 2000
April 15, 2029
164.39333
4-1/4% 10-Year Notes
Series A-2010
9128275W8
January 15, 2000
January 18, 2000
July 15,2000
3-1/2% 10-Year Notes
Series A-2011
9128276R8
January 15, 2001
January 16, 2001
January 15, 2010
168.24516
January 15, 2011
174.04516
Ref CPI
Index Ratio
Index Ratio
Index Ratio
Index Ratio
174.00000
174.03548
174.07097
174.10645
174.14194
174.17742
174.21290
174.24839
174.28387
174.31935
174.35484
174.39032
174.42581
174.46129
174.49677
174.53226
174.56714
174.60323
174.63871
174.67419
174.70968
174.74516
174.78065
174.81613
174.85161
174.88710
174.92258
174.95806
174.99355
175.02903
175.06452
1.06098
1.06119
1.06141
1.06162
1.06184
1.06206
1.06227
1.06249
1.06271
1.06292
1.06314
1.06336
1.06357
1.06379
1.06400
1.06422
1.06444
1.06465
1.06487
1.06509
1.06530
1.06552
1.06574
1.06595
1.06617
1.06638
1.06660
1.06682
1.06703
1.06725
1.06747
1.05844
1.05865
1.05887
1.05908
1.05930
1.05952
1.05973
1.05995
1.06016
1.06038
1.06060
1.06081
1.06103
1.06124
1.06146
1.06167
1.06189
1.06211
1.06232
1.06254
1.06275
1.06297
1.06319
1.06340
1.06362
1.06383
1.06405
1.06426
1.06448
1.06470
1.06491
1.03421
1.03442
1.03463
1.03484
1.03505
1.03526
1.03547
1.03568
1.03589
1.03610
1.03631
1.03653
1.03674
1.03695
1.03716
1.03737
1.03758
1.03779
1.03800
1.03821
1.03842
1.03863
1.03885
1.03906
1.03927
1.03948
1.03969
1.03990
1.04011
1.04032
1.04053
0.99974
0.99994
1.00015
1.00035
1.00056
1.00076
1.00096
1.00117
1.00137
1.00158
1.00178
1.00198
1.00219
1.00239
1.00259
1.00280
1.00300
1.00321
1.00341
1.00361
1.00382
1.00402
1.00423
1.00443
1.00463
1.00484
1.00504
1.00525
1.00545
1.00565
1.00586
November 2000
174.1
December 2000
---
---
174.0
January 2001
I
I
I
I
I
i
I
175.1
TREASURY INFLATION-INDEXED SECURITIES
Ref CPI and Index Ratios for
March 2001
Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):
3-3/8% 10-Year Notes
Series A-2007
9128272M3
January 15, 1997
February 6,1997
April 15, 1997
3-5/8% 5-Year Notes
Series J-2002
9128273A8
July 15,1997
July 15, 1997
October 15, 1997
3-5/8% 10-Year Notes
Series A-2008
9128273T7
January 15, 1998
January 15, 1998
October 15, 1998
3-5/8% 30-Year Bonds
Bonds of April 2028
912810FD5
April 15, 1998
April 15, 1998
July 15, 1998
Maturity Date:
Ref CPI on Dated Date:
January 15, 2007
158.43548
July 15, 2002
160.15484
January 15, 2008
161.55484
April 15, 2028
161.74000
Date
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
March
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
CPI-U (NSA) for:
-
----
--
-
Ref CPI
Index Ratio
Index Ratio
Index Ratio
Index Ratio
174.00000
174.03548
174.07097
174.10645
174.14194
174.17742
174.21290
174.24839
174.28387
174.31935
174.35484
174.39032
174.42581·
174.46129
174.49677
174.53226
174.56774
174.60323
174.63871
174.67419
174.70968
174.74516
174.78065
174.81613
174.85161
174.88710
174.92258
174.95806
174.99355
175.02903
175.06452
1.09824
1.09846
1.09869
1.09891
1.09913
1.09936
1.09958
1.09981
1.10003
1.10025
1.10048
1.10070
1.10093
1.10115
1.10137
1.10160
1.10182
1.10205
1.10227
1.10249
1.10272
1.10294
1.10317
1.10339
1.10361
1.10384
1.10406
1.10429
1.10451
1.10473
1.10496
1.08645
1.08667
1.08689
1.08711
1.08733
1.08756
1.08778
1.08800
1.08822
1.08844
1.08866
1.08889
1.08911
1.08933
1.08955
1.08977
1.08999
1.09022
1.09044
1.09066
1.09088
1.09110
1.09132
1.09154
1.09177
1.09199
1.09221
1.09243
1.09265
1.09287
1.09310
1.07703
1.07725
1.07747
1.07769
1.07791
1.07813
1.07835
1.07857
1.07879
1.07901
1.07923
1.07945
1.07967
1.07989
1.08011
1.08033
1.08055
1.08077
1.08099
1.08121
1.08143
1.08165
1.08187
1.08209
1.08230
1.08252
1.08274
1.08296
1.08318
1.08340
1.08362
1.07580
1.07602
1.07624
1.07646
1.07668
1.07690
1.07712
1.07734
1.07756
1.07778
1.07799
1.07821
1.07843
1.07865
1.07887
1.07909
1.07931
1.07953
1.07975
1.07997
1.08019
1.08041
1.08063
1.08085
1.08107
1.08129
1.08150
1.08172
1.08194
1.08216
1.08238
November 2000
- - - - - - ..
----~-
174.1
-
--
December 2000
- - - - - - - - - ----
-
174.0
January 2001
175.1
Board of Governors of the Federal Reserve System
Department of the Treasury
Joint Release
FOR IMMEDIATE RELEASE
February 21, 2001
FEDERAL RESERVE AND TREASURY EXTEND COMMENT PERIOD
ON REAL ESTATE ACTIVITIES PROPOSAL
The Federal Reserve Board and the Department of the Treasury today announced an
extension of the deadline, through May 1,,2001, on their request for comment on whether real
estate brokerage and real estate management are activities that are financial in nature or
incidental to a financial activity and therefore permissible for financial holding companies and
financial subsidiaries of national banks.
A notice of the extension will be published in the Federal Register.
###
Attachment
Media Contacts:
Federal Reserve:
Treasury:
PO-48
Dave Skidmore (202) 452-2955
Tara Bradshaw (202) 622-2960
u
1!.,
l' A K T
1\11 E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C.• 20220 • (202) 622-2960
FOR IMMEDIATE RELEASE
February 22,2001
STATEMENT BY TREASURY SECRETARY PAUL O'NEILL
ON ACTION IN TURKEY
Treasury Secretary PaulO 'Neill made the following statement regarding the decision of
the Turkish government to float the Turkish lira:
We fully support the government of Turkey's actions today to float the Turkish lira.
Over the last year, Turkey's economic reform program, supported by the IMF, has
successfully achieved many of its important goals on both the macroeconomic and structural
fronts. We believe that today's actions, coupled with firm and determined implementation of
appropriate supportive polici~s, can be successful in preserving the gains from the program so far
and strengthening the foundation for sustained growth and disinflation in Turkey.
Turkey is an important ally and good friend of the United States. The United States
continues to back the IMF's ongoing support for Turkey's economic reform program.
--30-PO-49
Fen- press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government PnntinQ Oifice: 19<;8 - 619.S5'l
DEPARTlVIENT
OF
THE
TREASURY
NEWS
1REASURY
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASIDNGTON, D.C.• 20220. (202) 622-2960
EMBARGOED UNTIL 2:30 P.M
FEBRUARY 22, 2001
CONTACT: TARA BRADSHAW
(202) 622-2960
TREASURY ANNOUNCES TECHNICAL CHANGES IN YIELD CURVE
The Department of Treasury announced today that effective August 27, 2001 it will no
longer incorporate the prevailing market bond equivalent yield for the most-recently auctioned
52-week bill in estimating the yield curve for Treasury securities. This change will result in a
more accurate estimate of Treasury's current cost of borrowing in the I-year maturity range.
As announced on January 31,2001, the Treasury will cease offering 52-week Treasury
bills after the February 27,2001 auction (issue date March 1,2001). Historically, the Treasury
has used the daily closing market bond equivalent yield on the most recently issued 52-week bill
as an input in estimating the I-year Constant Maturity Treasury (CMT) yield on Treasury's daily
yield curve. Treasury will continue to use the March 1 dated 52-week bill as an input for the
daily yield curve through the close of business on Friday, August 24, the last business day before
the auction of a new 26-week bill. On Monday, August 27, Treasury will auction a new 26-week
bill (a standard reopening of the 52-week bill CUSIP), and the use of a 52-week bill as a yield
curve input will be discontinued. This transitional process is designed to avoid any potential
effects of abruptly discontinuing the use of the 52-week Treasury bill in the estimation of
Treasury's yield curve. Thereafter, the Treasury will estimate the I-year CMT yield by using a
nonlinear interpolation between the yields for the on-the-run 6-month bill and 2-year note.
The Treasury yield curve is a line graph constructed daily that estimates the interest rates
at which Treasury could borrow at any maturity from 3-months to 30-years under market
conditions prevailing as of the close of business. The Treasury estimates the yield curve using a
cubic spline model. The model inputs are primarily bid-side yields for the most recently issued
Treasury securities in each maturity class for which Treasury currently conducts auctions.
The Treasury will continue to provide I-year CMT yields to the Federal Reserve Board
for publication in their Statistical Releases H.15, G.13 and other publications along with yields
for 3- and 6-month, and 2-,3-,5-, 7-, 10-,20-, and 30-year maturities. Treasury will also make
these CMT yields available through the Commerce Department's Economic Bulletin Board and
the Treasury Department's Debt Management web page site at http://www.ustreas.gov/domfini.
:"'ar press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-204-0
(i)
D EPA R T lVI E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622·2960
FOR IMMEDIATE RELEASE
February 22,2001
u.s. WELCOMES NEW IFAD PRESIDENT
Weare pleased to congratulate Mr. Lennart Bage of Sweden on his appointment today as
the new President of the International Fund for Agricultural Development (IF AD), an
international institution that finances agricultural development projects for the rural poor in
developing nations. The United States strongly supported Mr. Bage's candidacy, and we view
his appointment as very positive for the future of the institution. We look forward to our
continued participation in IF AD under his highly capable leadership.
--30--
10-51
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622.2040
•U
s. Government Printing Office
1998 - 619-559
OH'ICE OF PUBLIC AFFA[RS. 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622·2960
CONTACT:
EMBARGOED UNTIL 2:30 P.M.
February 22, 2001
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK, 26-WEEK, AND 52-WEEK BILLS
The Treasury will auction three series of Treasury bills totaling
approximately $30,000 million to refund $31,177 million of publicly held
securities maturing March 1, 2001, and to pay down about $1,177 million.
In addition to the public holdings, Federal Reserve Banks for their own
accounts hold $7,938 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders. Amounts awarded
to these accounts will be in addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of each
auction. These noncompetitive bids will have a limit of $200 million per
account and will be accepted in the order of smallest to largest, up to the
aggregate awarr limit of $1,000 million.
TreasuryDirect customers have requested that we reinvest their maturing
holdings of approximately $997 million into the 13-week bill, $866 million
into the 26-week bill, and $417 million into the 52-week bill.
This offering of Treasury securities is governed by the terms and coniitions set forth in the Uniform Offering Circular for the Sale and Issue of
~arket·able Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
llIl.ended) .
Details about each of the new securities are given in the attached
)ffering highlights.
000
~ttachment
0-52
"or press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE- ISSUED MARCH 1, 2001
February 22, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . $10,000 million
$10,000 million
$10,000 million
Description of Offering:
Term and type of security .......... 91-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . 912795 GJ 4
Auction date . . . . . . . . . . . . . . . . . . . . . . . February 26, 2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . March 1, 2001
Maturity date . . . . . . . . . . . . . . . . . . . . . . May 31, 2001
Original issue date . . . . . . . . . . . . . . . . June 1, 2000
Currently outstanding . . . . . . . . . . . . . . $24,639 million
Minimum bid amount and multiples ... $1,000
182-day bill
912795 HL 8
February 26, 2001
March 1, 2001
August 30, 2001
August 31, 2000
$13,033 million
$1,000
364-day bill
912795 HJ 3
February 27, 2001
March 1, 2001
February 28, 2002
March 1, 2001
$1,000
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted through the
Federal Reserve Banks as agents for FIMA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account. The total noncompetitive amount awarded to
Federal Reserve Banks as agents for FIMA accounts will not exceed $1,000 million.
A single bid that
would cause the limit to be exceeded will be partially accepted in the amount that brings the
aggregate award total to the $1,000 million limit. However, if there are two or more bids of equal
amounts that would cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g.,
7.100%, 7.105%.
(2) Net long position for each bidder must be reported when the sum of the total bid amount, at
all discount rates, and the net long position is $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the closing time for
receipt of competitive tenders.
M ximum Reco nized Bid at a Sin Ie Rate .... 35% of public offering
M ximum Award . . . . . . . . . . . . . . . . . . . . . . " ....... 35% of public offering
R cei t of Tenders:
Noncompetitive tenders ... Prior to 12:00 noon eastern standard time on auction day
Competitive tenders ...... Prior to 1:00 p.m. eastern standard time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full
par amount with tender.
TreasuryDirect customers can use the Pay Direct feature which authorizes a
charge to their account of record at their financial institution on issue date.
1)
EPA R T '1 E N T
() F
THE
TREASURY (gJ
T REA S lJ R Y
NEW S
'7119
. OFFICE Of" PUBLIC AFFAIRS. 1500 PENNSYI.VANJA AVENUE, N.W•• WASHINGTON, D.C •• lOllO .,lOl) 611-1960
Contact:
EMBARGOED UNTIL 2:30 P.M_
February 22, 2001
Office of Financing
202/691-3550
TREASURY TO AUCTION CASH MANAGEMENT BILLS
The Treasury will auction approximately $28,000 million of 50-day and
$26,000 million of 13-day Treasury cash management bills_
Tenders will not be accepted for bills to be maintained on the bookentry records of the Department of the Treasury (TreasuryDirect).
Up to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of
each auction. These noncompetitive bids will have a limit of $200 million
per account and will be accepted in the order of smallest to largest, up
to the aggregate award limit of $1,000 million.
The auctions being announced today will be conducted in the single-price
auction format. All competitive and noncompetitive awards will be at the
highest discount rate of accepted competitive tenders.
NOTE: Competitive bids in cash management bill auctions must be
expressed as a discount rate with ~ decimals, e.g., 7.10%.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) .
Details about the new securities are given in the attached offering
highlights.
000
Attachment
10-53
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERINGS OF CASH MANAGEMENT BILLS
February 22, 2001
Offering Amount . . . . . . . . . . . . . . . $28,000 million
Description of Offering:
Term and type of security ..... 50-day bill
CUSIP number . . . . . . . . . . . . . . . . . . 912795 GC 9
Auction date . . . . . . . . . . . . . . . . . . February 27, 2001
Receipt of Tenders (Eastern Standard time):
Noncompetitive tenders ...... Prior to 11:00 a.m. on auction day
Competitive tenders ......... Prior to 11:30 a.m. on auction day
Issue date . . . . . . . . . . . . . . . . . . . . February 28, 2001
Maturi ty date . . . . . . . . . . . . . . . . . April 19, 2001
Original issue date ........... October 19, 2000
Currently outstanding ......... $31,977 million
Minimum bid amount
and multiples . . . . . . . . . . . . . . . $1,000
$26,000 million
13-day bill
912795 FX 4
February 28, 2001
Prior to 12:00 noon on auction day
Prior to 1:00 p.m. on auction day
March 2, 2001
March 15, 2001
September 14, 2000
$29,867 million
$1,000
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted through the
Federal Reserve Banks as agents for FIMA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account. The total noncompetitive amount awarded to Federal
Reserve Banks as agents for FIMA accounts will not exceed $1,000 million. A single bid that would
cause the limit to be exceeded will be partially accepted in the amount that brings the aggregate award
total to the $1,000 million limit. However, if there are two or more bids of equal amounts that would
cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids ........ (1) Must be expressed as a discount rate with two decimals, e.g., 7.10%.
(2) Net long position for each bidder must be reported when the sum of
the total bid amount, at all discount rates, and the net long
position is $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the
closing time for receipt of competitive tenders.
~aximum Recognized Bid
at a Single Rate ........ 35% of public offering
Maximum Award . . . . . . . . . . . . . 35% of public offering
Payment Terms . . . . . . . . . . . . . By charge to a funds account at a Federal Reserve Bank on issue date, or
payment of full par amount with tender.
F~
1712101
1717
Statement of G7 Finance Ministers and Central Bank Governors
17 February 2001
Palermo
1.
We, the Finance Ministers of the G7 countries, the Central Bank Governors of Canada,
Japan, the United States, and the United Kingdom, the President of the Euro-group, and
the President of the European Central Bank, met today in Palermo with the Managing
Director of the International Monetary Fund to review recent developments in the world
economy. We, the Finance Ministers and Central Bank Governors of the G7 also discussed
the progress made towards strengthening the international financial architecture, in
particular by laying plans for the reform of Multilateral Development Banks, the
implementation of the RIPC Initiative and ways to proceed beyond debt relief, including
for the preparation for the Genova Summit. We also met with the Finance Minister and the
Central Bank Governor of Russia and with Representatives of the European Commission
to discuss recent developments of the Russian economy.
Developments in the World Economy
2.
Although global growth this year is likely to be somewhat slower than we expected when
we last met, the basic factors that have supported sustained growth in many of the major
industrial economies remain in place. We agreed on the need for both macroeconomic and
structural policies in all our countries to support growth. In this context, lower energy
prices and stable oil markets are important.
3.
We reemphasized our commitment to foster conditions for sustainable growth worldwide.
In this context, we stressed the importance of continued cooperation among the G7
countries. More specifically:
•
•
•
•
In the United States, economic growth has slowed, though economic fundamentals
remain strong. Monetary and fiscal policies should aim at supporting sustained
growth, while preserving budgetary restraint and price stability and increasing national
saving over the medium term.
In the United Kingdom and Canada, growth remains healthy and unemployment is
low, with some signs of a temporary slowing in economic growth. Policies should
continue to sustain growth and employment over the medium term, while meeting
inflation targets.
In the euro area growth prospects remain favourable, thanks to strong domestic
demand. Policies should be directed at enhancing growth potential, through continued
coordinated reform efforts aimed at increasing product and labour market efficiency.
Tax reforms are being implemented while pursuing fiscal consolidation. In view of
Europe's aging population, budgets and social security systems need to be further
strengthened.
In Japan, while a modest recovery is expected, prices continue to decline and
downside risks remain. In this context, monetary policy should continue to ensure that
liquidity is provided in ample terms. Efforts to strengthen the financial sector should
be enhanced.
po~s'7
Statenwnt\patemro\l '7 .rCblUdi,. 200 1
1
FiNAL 1712/01
1727
Exchange Rates
4.
We discussed developments in our exchange and financial markets. We reiterated our view
that exchange rates among major currencies should reflect economic fundamentals. We
will continue to monitor developments closely and to cooperate in exchange markets as
appropriate.
Emerging Market Economies
5.
After two years of strong recovery, the outlook for emerging market economies has
become more mixed. We welcome the substantial progress achieved in emerging Asia to
reduce vulnerabilities, including the improvement of the external debt structure in the
crisis-affected countries, and the adoption of more sustainable exchange rate regimes. To
secure future growth, it is important to pursue necessary reforms of the financial and
corporate sectors. In Latin America, sound macroeconomic and structural policies are
needed to help reduce vulnerabilities. In all emerging market economies, we stress the
importance of further intensifying efforts to implement internationally agreed standards
and codes. The pace of reforms should not be relaxed.
Russia
6.
We welcome the recent improvements in the macroeconomic and balance of payments
situation of the Russian economy. We strongly urge the Russian authorities to step up the
process of economic reforms and meet in full their financial obligations in order to restore
promptly normal relations with the international financial community. While some
elements of the comprehensive tax reform package have been adopted, critical challenges
remain, such as enforcing the rule of law, attacking nonpayments and barter, strengthening
the banking system, improving corporate governance, and fighting money laundering. On
the latter, we urge the Russian authorities to move quickly to remedy the deficiencies
identified by the F ATF in June 2000. We call upon the Russian authorities, as they address
the difficult and complex process of economic transition, to implement a credible
programme of reform, and create the essential market institutions and infrastructure for
sound growth. In this context, we encourage the Russian authorities to continue to work
with the IMF and World Bank.
HIPC and Development Beyond Debt Relief
7.
We noted with satisfaction that the implementation of the enhanced HIPC (Heavily
Indebted Poor Countries) Initiative has already enabled 22 countries to reach the Decision
Point. These countries are now receiving significant debt relief. We are committed to
helping them implement their poverty reduction strategies and thereby reach their
Completion Points. This will lead to $34 billion of debt relief under HIPC, reducing the
debt of these countries on average by two thirds. We noted that -most of the eligible
countries that have not yet reached the Decision Point are currently in, or just emerging
from, conflict. We call on these countries to reach a peaceful resolution of their problems,
and we intend to help them in their reconstruction efforts.
Statemrnf\PalennO\l7 P'etnQAIJ 2001
2
i.ll~
17/2/01 17.27
8.
We urge all creditors to participate fully in providing on a timely basis their share of debt
reduction under the enhanced RIPe Initiative. The G7 governments have gone beyond the
RIPe targets and agreed to commit to provide 100 percent debt reduction on ODA and
eligible commercial credits for countries qualifying for RIPe debt reduction. We urge
other bilateral creditors to take similar action.
9.
We consider that debt reduction is only one element of a broader, more ambitious strategy
for poverty reduction, based on three pillars. First, action is needed to launch a new
multilateral trade round and to open further markets to exports from the poorest countries.
Second, a more favourable environment for attracting private investment needs to be
created in the poorest countries. Third, within country-owned poverty reduction strategies,
resources need to be channelled, in a more efficient and coordinated way, to the social
sector, as we work towards the objectives contained in the 2015 International Development
Goals (IDG).
Strengthening the International Financial Architecture, including Reform of the
Multilateral Development Banks
10. We noted the progress made to reinforce the international financial system. We look
forward to further progress on prioritization of IMF conditionality, implementation of the
internationally agreed codes and standards, crisis prevention, private sector involvement,
and financial liberalization. We note the need for further discussion on quotas at the IMF
Board.
.
11. We also discussed the main features of the reform of the MDBs, following on the
recommendations contained in the Fukuoka report of July 2000. The MDBs have made
considerable progress on internal and policy reforms in recent years, but more can be done
to focus their action on poverty reduction, consistent with the IDG. Key principles of the
reform are: greater selectivity in setting priorities, focus on the needs of the poorest,
effective and transparent internal governance, and improving development impact.
12. To this end, MDBs should:
•
•
•
•
•
further improve and strengthen accountability and transparency, including through the
establishment or the reinforcement of central control mechanisms to ensure compliance
with agreed policies and safeguards;
enhance substantially coordination and interaction among themselves and with other
development actors;
ensure full and timely disclosure of all program and policy documents;
undertake expeditiously a comprehensive review of pricing policies;
integrate due diligence and fiduciary diagnostics into country assistance strategies and
in decisions on the choice of lending instruments.
In our view, selectivity in setting priorities and improving development impact require
particular attention to: appropriate provision of global public goods, good governance,
private sector development in lower income countries, and financial sector development,
Statellli"nf\Palenno\ll ntrrnary 200 1
3
FR'l,<\L 17/2/01 17.27
including fighting financial abuse. We look forward to intensifying our dialogue with the
MDBs to this end and to reviewing progress at the Spring meetings.
Action against the Abuses of the Global Financial System
13. Following our report to the Okinawa Summit and the Heads' recommendations we note the
positive evolution of the dialogue with the countries involved. The Financial Action Task
Force (F ATF) has recently reported the significant progress made by most of the fifteen
non co-operative countries and territories (NCCTs) listed in June 2000. Seven countries
have already enacted most, if not all, of the legislation needed to fight money laundering
effectively. We encourage those jurisdictions to demonstrate their willingness and ability
to implement these reforms, so that they can be de-listed at the earliest possible time. To
this end, we remain committed to continuing dialogue with the identified countries, and to
provide technical assistance where possible. However, we reaffirm our commitment, where
dialogue has failed to generate adequate progress, to implement coordinated
countermeasures that may be recommended by the FATF at its meeting in June 200l. We
urge the International Financial Institutions, in particular the International Monetary Fund
and the World Bank, to help NCCTs implement the relevant international anti-money
laundering standards (the FATF 40 Recommendations), as appropriate, through technical
assistance, programme design and policy dialogue.
14. We reaffirm our support for the efforts of OECD to address harmful tax practices. We
encourage the OECD to continue its efforts. We encourage the efforts of the OECD
member countries to meet their commitments. We welcome the cooperative dialogue
which has been established with countries and jurisdictions outside the OECD area. We
welcome the new commitments made by some jurisdictions to eliminate their harmful tax
practices by end of 2005. We encourage others to make early commitments, so that as few
jurisdictions as possible are included in the list of uncooperative tax havens which we look
forward to examining at the Genova Summit. We encourage all OEC:O governments to
consider offering, under the auspices of the OECD and other international organizations,
technical assistance to cooperating jurisdictions, if needed to comply with their
commitments.
15. We welcome the intent of certain OFCs to improve supervisory, regulatory, co-operation
and information exchange policies and practices and encourage OFCs to disclose
assessment findings, including those done by the IMF, as a means of demonstrating
compliance with and progress in meeting international standards in these areas. We ask the
FSF to monitor the implementation of its recommendations and to consider means of
recognising progress being made by certain OFCs and recommend any future action, if
necessary.
Statemtllt\Palermo\17 February 2001
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
IR IMMEDIATE RELEASE
bruary 26, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
March 01, 2001
August 30, 2001
912795HL8
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.495%
High Rate:
Investment Rate 1/:
4.662%
Price:
97.728
All noncompetitive and successful competitive bidders were awarded
:urities at the high rate. Tenders at the high discount rate were
Lotted 76%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
21,075,597
1,212,331
200,800
$
10,001,368 2/
22,488,728
SUBTOTAL
TOTAL
1,975,913
1,975,913
Federal Reserve
$
24,464,641
8,588,237
1,212,331
200,800
$
11,977,281
Median rate
4.490%: 50% of the amount of accepted competitive tenders
tendered at or below that rate.
Low rate
4.450%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
-to-Cover Ratio
=
22,488,728 / 10,001,368 = 2.25
~quivalent
coupon-issue yield.
\wards to TREASURY DIRECT = $928,580,000
http://www.publicdebUreas.gov
-55
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
R IMMEDIATE RELEASE
Office of Financing
202-691-3550
bruary 26, 2001
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
March 01, 2001
May 31, 2001
912795GJ4
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.710%
High Rate:
Investment Rate 1/:
4.835%
Price:
98.809
All noncompetitive and successful competitive bidders were awarded
:urities at the high rate. Tenders at the high discount rate were
.otted 60%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
25,710,857
1,365,891
259,200
$
10,011,248 2/
27,335,948
SUBTOTAL
TOTAL
3,204,819
3,204,819
Federal Reserve
$
30,540,767
8,386,157
1,365,891
259,200
$
13,216,067
Median rate
4.695%: 50% of the amount of accepted competitive tenders
tendered at or below that rate.
Low rate
4.650%:
5% of the amount
iccepted competitive tenders was tendered at or below that rate.
·to-Cover Ratio
=
27,335,948 / 10,011,248 = 2.73
19uivalent coupon-issue yield.
~ards to TREASURY DIRECT = $1,097,847,000
http://www.publicdebt.treas.gov
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
February 26, 2001
Contact: Peter Hollenbach
(202) 691-3502
BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BOND OWNERS
AFFECTED BY TORNADOES IN ARKANSAS AND MISSISSIPPI
The Bureau of Public Debt took action to assist victims of severe weather in Arkansas and
Mississippi by expediting the replacement or payment of United States Savings Bonds for owners
in the affected areas. The emergency procedures are effective immediately for paying agents and
owners in those areas of Arkansas and Mississippi affected by the storms. These procedures will
remain in effect through April 30, 2001.
Public Debt's action waives the normal six-month minimum holding period for Series EE and
Series I savings bonds presented to authorized paying agents for redemption by residents of the
affected area. Most financial institutions serve as paying agents for savings bonds.
Arkansas counties involved are Lonoke and Pulaski and Bolivar, Holmes, Lee, Leflore,
Lowndes, Oktibbeha, Pontotoc, Prentis, and Tallahatchie counties in Mississippi. Should
additional counties be declared disaster areas the emergency procedures for savings bonds owners
will go into effect for those areas.
The replacement of bonds lost or destroyed will also be expedited by Public Debt. Bond owners
should complete form PD-1048, available at most fmandal institutions or by writing the Kansas
City Federal Reserve Bank's Savings Bond Customer Service Department, 925 Grand Boulevard,
Kansas City, Missouri 64198; phone (816) 881-2000. This form can also be downloaded from
Public Debt's website at: www.publicdebt.treas.gov. Bond owners should include as much
information as possible about the lost bonds on the form. This information should include how
the bonds were inscribed, social security number, approximate dates of issue, bond
denominations and serial numbers if available. The completed form must be certified by a notary
public or an officer of a fmancial institution. Completed forms should be forwarded to Public
Debt's Savings Bond Operations Office located at 200 Third St., Parkersburg, West Virginia
26106-1328. Bond owners should write the word "DISASTER" on the front of their envelopes,
to help expedite the processing of claims.
000
http://www.publicdebt.treas.gov
PO-57
j
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
February 27, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 50-DAY BILLS
50-Day Bill
February 28, 2001
April 19.1 2001
912795GC9
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.95 %
High Rate:
Investment Rate 1/:
5.05 %
Price:
99.313
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 16~. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Accepted
Competitive
Noncompetitive
$
46,910,000
1,000
$
28,035,000
1,000
TOTAL
$
46,911,000
$
28,036,000
Median rate
4.89~: 50% of the amount of accepted competitive tenders
tendered at or below that rate. Low rate
4.85~:
5~ of the. amount
)f accepted competitive tenders was tendered at or below that rate.
~as
RATIO = 46,911,000 / 28,036,000 = 1.67
JO FlMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION .
~ID-TO-COVER
./ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
0-58
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
February 27, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 52-WEEK BILLS
364-Day Bill
March 01, 2001
February 28, 2002
912795HJ3
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
4.240%
Investment Rate 1/:
4.442%
Price:
95.713
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
~llotted
31%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
Tendered
$
SUBTOTAL
$
18,513,000
Federal Reserve
TOTAL
17,388,432
1,124,568
Accepted
10,001,960 2/
2,757,335
$
21,270,335
8,877,392
1,124,568
2,757,335
$
12,759,295
Median rate
4.195%: 50% of the amount of accepted competitive tenders
ras tendered at Dr below that rate.
Low rate
4.150%:
5% of the amount
If accepted competitive tenders was tendered at or below that rate.
ID-TO-COVER RATIO = 18,513,000 / 10,001,960 = 1.85
FIMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
o
/ Equivalent coupon-issue yield.
/ Awards to TREASURY DIRECT = $611,159,000
http://www.publicdebt.treas.gov
)-59
DEPARTNIENT
OF
THE
TREASURY
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.• 20220. (202) 622-2960
Text as prepared for Deliver
February 28, 2001
Contact: Tara Bradshaw
(202) 622-2960
TESTIMONY OF TREASURY SECRETARY PAUL O'NEILL
BEFORE THE SENATE FINANCE COMMITTEE
Good afternoon Chairman Grassley, Senator Baucus and members of the Committee. It's
a pleasure to be here with you today.
President Bush unveiled his budget this morning, and it is full of good news for the
American people. First, it funds America's priorities, especially in education. Second, it walls
off every dollar of the Social Security surplus and proposes Medicare reform to strengthen
retirement security for every generation. And finally it reduces individual income taxes, to
eliminate the structural overtaxation that has created a tax surplus today.
There's no question that the numbers in the federal budget are enormous. We are
proposing $1.9 trillion in government spending for next year alone. For the next 10 years, total
spending will be over $22 trillion. These are changes of an entire order of magnitude since the
last time I served in Washington. In fact, this year's projected budget surplus of$281 billion is
almost as large as the total on-budget government spending in my last year of service in
Washington. That's evidence of how much our economy has grown, and how much Washington
has grown.
The federal budget surplus is projected to be $5.6 trillion over the next ten years. And
this is a fairly conservative estimate, given that we've underestimated the surplus several years in
a row now. Even after setting aside the Social Security surplus, there is plenty of room for a $1.6
trillion tax cut. The numbers are big, but the math is fairly simple: Start with the $5.6 trillion
surplus, take away $2.6 trillion in Social Security surplus and $1.6 trillion for tax relief, and we
are left with a $1.4 trillion cushion to address our priorities - beginning with Medicare reform, to
service the debt, and to be prepared for unexpected needs.
This is a fiscally prudent budget. Under this plan, we will payoff a large portion of the
publicly held debt over the next six years. Washington ran deficits instead of surpluses for so
long that no one gave much serious thought to the prospect of retiring our debt instruments
before they mature.
PO-60
For press releases, speeches, public schedules and official qiographies, call our 24-hour fax line at (202) 622-2040
Only now, as we face the reality of rapidly mounting surpluses, are we confronted with
serious questions about the potential impact of buying back the publicly held debt from a public
that may not be willing to sell it all back early.
The debt held by the public will amount to $3.2 trillion at the end of this year.
Retirement funds, state and local governments and foreign investors all have come to rely on the
security of U.S. Treasuries. It could be very costly - ifnot impossible - to retire all of those
holdings prematurely. Moreover, there needs to be a replacement opportunity for them. Experts
are already thinking about alternatives to Treasury Securities for use by the Federal Reserve and
others, but these are novel concepts that will take time to put in place.
In addition to systemic adjustment questions, there are cost questions related to paying
off the entire publicly held debt. In testimony before the Senate Budget Committee, Fed
Chairman Alan Greenspan explained it this way: "some holders of long-term Treasury securities
may be reluctant to give them up, especially those who highly value the risk-free status of those
issues. Inducing such holders, including foreign holders, to willingly offer to sell their securities
prior to maturing could require paying premiums that far exceed any realistic value of retiring
the debt before maturity."
Under the assumptions supporting the President's plan, we payoff all but this "nonretireable" debt by 2008. While we are paying off the retire able debt, the plan also increases
spending on education next year by 11 percent, increases defense spending next year by $14
billion, and provides $661 billion in overall discretionary spending next year. Discretionary
spending will increase by 4 percent, more than enough to account for inflation and address real
needs.
Some want to increase spending even further. We disagree. Instead of simply piling on
new spending, we must be better stewards of the taxpayers' dollars. We have overlapping
programs throughout the government with little or no information on how well they deliver
services to the taxpayers. We need to find out where we are getting results and where we aren'
and adjust federal spending accordingly.
Once we've paid down the debt that can be retired, walled off Social Security funds
where they can't be drained for other government spending, and increased spending for
America's priorities, we face the question of how to use any additional surplus dollars. If they
aren't returned to the taxpayers, they can only be spent in Washington, creating new government
programs or buying up private assets. Government is big enough, and it has no business owning
private companies.
People make better decisions than government about how to spend their money. That's
why we must eliminate structural overtaxation and let people keep more of what they earn.
Today the federal individual income tax burden is higher than at any other time in our
nation's history. We have no business taking from taxpayers more than it costs to pay for agreed
public purposes.
2
The President has proposed tax relief that reinforces the values that make America great opportunity, entrepreneurship, strong families and individual success.
First, the President has proposed reducing income taxes for every American who pays
income taxes. The current five rate system will be simplified to four rates, and the tax rate on the
first $6,000 of taxable income earned by every American will fall from 15 to 10 percent.
High income tax rates block access to the middle class for working Americans struggling
to get ahead. And high income tax rates punish success. We must have a tax code that keeps the
American Dream in everyone's reach and helps people move up the economic ladder of success.
We must have a tax code that fosters entrepreneurship and does not penalize hard work.
Cutting income tax rates is the most effective fiscal policy action we can take to put our
economy back on the path of long-term economic growth. The best minds in this nation contain
incredible knowledge and creativity. Ifwe work together to unleash that potential, we can
achieve permanent high rates of growth that will make all our other goals more achievable.
The President's tax relief plan also strengthens the ties that hold families together.
•
•
•
It doubles the child tax credit to $1,000 per child. Parents everywhere have one goal above
all others: to give their children the best possible opportunity for success and happiness in
life. The increased child tax credit will give parents more resources to save for college
tuition, pay for braces or hire a tutor.
This plan also reduces the unfair marriage penalty. We as a society celebrate when two
people decide to spend their lives together. Why would our tax code punish them?
And this plan eliminates the unfair death tax. Government has no business confiscating the
legacy parents work their entire lives to build for their children.
This package is a pay raise for working Americans. F our-person families earning
$35,000 a year will no longer bear any federal income tax burden. Four-person families earning
$45,000 will see their income taxes cut in half. And four-person families earning $75,000 will
see their income tax burden reduced by 22 percent.
The President's tax relief plan maintains the progressivity of our tax code - and, in fact,
increases the share of federal income taxes paid by upper-income taxpayers. In 1998, the top 10
percent of income earners paid 65 percent of federal income taxes, while the bottom half of
income earners paid 4.2 percent of the total federal income tax burden. After implementing the
President's tax relief plan, the top 10 percent of income earners will pay 66 percent of all federal
income taxes. The average family will keep $1,600 a year that they would otherwise have sent
to Washington. That's enough for two monthly mortgage payments or for a year of junior
college tuition.
Taxpayers in the higher tax brackets are likely to invest their tax relief in the economy,
creating jobs for all Americans. Small businesses are the engine of growth in our economy, and
a'majority of small businesses pay taxes under the individual income tax system. A small
businessman receiving tax relief will plow that back into the firm, either to increase productivity,
which results in higher wages, or to hire more workers.
A fanner will be able to use his tax savings to trade in his old tractor and purchase the
newest technology to improve his crop yield. America's economy will grow as these
investments go forward.
This tax relief package is sound fiscal and economic policy. It fits easily within our
budget framework, leaving a $1.4 trillion cushion over the next ten years to service the debt, to
address priorities - begirming with Medicare reform, and to handle unexpected needs. I like to
refer to it as the Goldilocks tax relief plan - not too big, not too small, just right.
This budget strengthens the three platforms that make success and prosperity possible for
all generations of Americans - improved education, fiscal responsibility, and tax fairness. I look
forward to working with the members of this committee to implement these common sense
budget priorities, so that America continues to lead the world toward greater freedom and
opportunity.
Thank you.
-30-
·OFnCI. OJ PCBLIC AIFAI.S -1580 PENNSYLVA.NJA. AVENUE, N. W. e WASHINGTON. D.C.e 28220. (282) U2.-2"O
=
eARGOBD tlNTIL ., =00 A .K.
~ary 28, 2001
PUBLIC CONTACT: Office of Pinancing
202-6'1-3550
IIKDU CONTACT: Office of Public: Affairs
202-622-2960
TRBAS'O'RY ANNOllNCBS DDT BO'YBAClt OPBRA'l'ION
On Karch 1, 2001, the Treasury will buy back up to $1,750 million par
f :i.ts outstanding issues that mature between February 2019 and November 2022 ..
r:eal5u3;'y reserves the right to accept. less than the &ml~1mced amcUZlt..
This debt buyback
(~demp~io~)
operation will bo eondueted
~
T:easury's
i.cal: Agent., ~e Pederal .... e:v. Bank of New York, ua~g i ts ~ Karke~
~at:i.oDS .systam~
Only institut.ions .that. the Pederal R••erve BaDlc of New
)rk has app:oved to conciuct Open Karket. transactions may aul:m.it offeZ's on
lhal·f of ~el!Uu~lv.s and th.ir CustClllers. Offers at the high.at accepted
~ice for a paztic~a: i8.ue may be accepted on a prcra~.d Aaa18, r~~ up
~ the next. $100,000.
As. Z"• •ult. of this rounding, the Tre_ury may buy
lCk an UIO\JZl.t sligbt.ly l.arger than the. one announced above.
'l'his debt buyback operation is governed by the teJ:lllS and conditions set
)rt.h in :31. CPR Part: 375 aDd. this aDnouncement..
le
The debt buyback operatioD regulat:1.ons are avai1ab1e em the Bureau of
Public Debtrs wabsita at www.publ:i.cdebt.treas.gov.
L
Det.ails &bout. the operation aDci each of the eligible issues are given
the attached highl.ights.
:t:achment
-61
rpren f'ttlttan, spttttc}an, public ,claetl"ln lI"d officitd biog,.,II;." cllll 0"" 14-lto", /11% lilt. III (202) 622-2040
Pebruary 28, 2001
Par amouDe to be bought back •••• Up to $1,750 million
Opara~ian date ••••.••••••••••••• Kareh 1, 2001
OperatiCD clo •• t~ .••••••••••• llIOO a.m. eastern standard time
Sattlamene c1a~e ••••••••••
HaJ:'ch 5, 200l
Mln~ par offer amoune •••••••• $lOO,OOO
MIll tiple. of pa: •••••••.•••••••• $100,000
Po:mat for offers..... Bxpre.8&eG in earma of price per $100 of par with
three decimals. The first two dactmala rapreaent
fractional 32Ua of a dollar. ~l:L. third decimal
repreBeDts eightl:L& of a 32u of a dollar, and must
a.A • • • A •
De a 0, 2, 4, or 6.
Delivary instructions •••••••••••••••••• ABA Number 021001208 FRB NYC/CUST
Treasury i.sues e1ii~le for debt buXb.ck operation (tn millionsl:
Par Amount Par Amount
Coupon
Ra1:e
(%)
8.875
8.125
8.S00
8.750
8.750
7.875
8.125
8.125
8.00.0
7.250
7.625
Katurity
Date
02/15/2019'
08/15/20l.9
02/15/2020
05/15/2020
08/15/2020
02/15/2021'
05/15/2021
08/15/2021
11/15/2021
08/15/2022
11/15/2022
Par Amount
ctJSIP
Humber
912810 EC 8
912810 ED 6
912810 BE 4
912810 BP 1
'912810 EG 9
912810 ml 7
912810 SJ 3
9~2810.B
OUtstancling*
0
912810 BL 8
912810 EM 6
912810 EN 4
Toca1
16,761
19,436
9,918
8,374
18,872
10,415
Privately
Beld"
14,606
17,503
8,479
Held ••
STRIPS··
5,555
1,098
1,604 .
6,872
4,'855
9,697
712
31,731
10,289
8,585
l.6,991
9,471
9.101
9.025
lB,6S3
9,415
6,984
1,263
16,614
1,009
4:,789
155,783
137,110
51,525
10,719
10,683
'4,329
Par amounts are as of February 27, 2001.
". Par amounts are as of February 26, 2001.
'rh~ di.fference bebreeu. the p&:'
CDOlaAt.
out.~an.d.ing and. ~a par alllaUZ1t
prl.vately beld is the par amount of those i ••ues h.ld by the l'ecleral.
lteserve System.
UEPARTMENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
U.S. International Reserve Position
02/28/01
The Treasury Department today released U.S. reserve assets data for the week ending February 16,2001. As
indicated in this table, U.S. reserve assets totaled $67,293 million as of February 23,2001, down from $67,802
million as of February 16,2001.
(in US millions)
07.802
TOTAt
1. Foreign Currency Reserves
3. Securities
February 23, 2001
67293
Febr!Iary 16, 2001
I. Official U.S. Reserve Assets
I
Euro
5,412
Yen
10,977
Euro
TOTAL
16,389
5,378
Yen
TOTAL
10,913
16,291
o
o
()fwnlcn, {s<>uer headquartered in the U. S.
-
b.. Total deposits with.
b.i. Other central banks and BIS
9,154.
5,372
14,526
9,095
5,341
o
o
o
o
bJLBanks headquartered In the U.S.
h ii
()f
WhICh, banks located abroarl
b:iii. Banks,headquartered outside the U S.
~ iii
.4A36
Of'vhich, banks located in, the U.S.
15,094
14,945
SpeCIal lJrawmg Rights (SDRs)
10,7+8
10,576
Gold Stock
11,046
11,046
UMF Reserve Position
2.
Other Reserve Assets
01
11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
jeposits reflect carrying values.
'J The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs),' are based on data provided by the IMF and are valued in
ollar terms at the official SDRJdollar exchange rate for the reporting date. The IMF data for February 16 are final. The entnes in the table
bove for February 23 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prtor week's IMF
ala.
, Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of December 31, 2000. The November 30, 2000
llue was $11,046 million.
0-62
o
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
February 16, 2001
1. Foreign currency loans and securities
February 23, 2001
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.8. Short positions
2.b. Long positions
3. Other
o
o
III. Contingent Short-Term Net Drains on Foreign Currency Assets
February 16, 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within
February 23, 2001
o
o
o
o
o
o
o
o
1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.8. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.e. With banks and other financial institutions
headquariered outside the U. S.
4. Aggregate short and long positions of options in foreign
. currencies vis-a-vis the U.S. dollar
4.8. Shori positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
;,
~
'j
"'~'< :Bl~~tn'A"R"[F;',:M Ii N 'if ,':~,F 'r H E'
'">":'-',,~,,,::;~{V,:~,:::'-:,',::-::>-:,, -, _>.~,'
T REA'S, 'u ,R,'y
',' ',: , . :._ :. :', ".'. >
,
:
_ '.'
NEWS
OffiCE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. • WASIflNGTON, D.C .• 20220. (202) 622-2960
Text as prepared for Deliver
February 28,2001
Contact: Tara Bradshaw
(202) 622-2960
MARK A. WEINBERGER
NOMINEE TO BE ASSISTANT SECRETARY OF THE TREASURY (TAX POLICY)
TESTIMONY BEFORE THE SENATE FINANCE COMMITTEE
Mr. Chairman, Senator Baucus, Members of the Senate Finance Committee:
I am deeply honored to appear before this Committee as the President's nominee
to serve as Assistant Secretary of the Treasury for Tax Policy. I am grateful to President
Bush and Secretary O'Neill for the opportunity to serve my country in this capacity, and
to Chairman Grassley and Senator Baucus for expediting this process and holding this
hearing.
It was a short four months ago that I appeared before this Committee as a
nominee of President Clinton to serve as
, a member of the Social Security Advisory
Board. I appreciated then this Committee's consideration, and the support of the full
Senate, in confirming me to serve the government and the American people in that
capacity. I am proud of the work of the board and honored to serve with its other
distinguished members to analyze the important policy and administrative issues that
our Social Security and disability programs face.
I began my government service with a Member of this Committee, Senator John
Danforth (R-MO), in 1990. Working with the Members and staff of the Finance
Committee taught me some of the fundamentals of good government which are highly
relevant today. This Committee's thoughtful consideration of policy, its search for
consensus, and its tradition of comity are the benchmarks to which any public official or
organization aspires. I am proud to have had the opportunity to serve this Committee.
PO-63
Far press releases. sbeeches. public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
'
On the path to this point in my career I have taken many turns. Upon leaving the
Finance Committee I was fort:unate to have the opportunity to serve as Chief of Staff
and Counsel to the President's Bipartisan Commission on Entitlement and Tax Reform,
chaired by Senators Bob Kerrey (D-NE) and Jack Danforth. I also served as a
Commissioner on the bipartisan National Commission on Retirement Security, with
Senator Breaux (D-LA), of this Committee. If confirmed by the Senate I will continue to
work in the same bipartisan spirit.
I started a law firm with several friends and colleagues named Washington
Counsel, PC. The firm was made up of an outstanding group of individuals who taught
me the true value of teamwork. I most recently served as the Director of the National
Tax practice for Ernst & Young. I was truly humbled by the incredible talent of the
people there.
Once again - now - I find myself before this Committee. This Committee is on
the front line for decision-making at one of the most momentous times in our history.
The Federal government's projected surpluses over the next decade are
unprecedented. The scope of the issues that will be faced in this regard over the next
few years, primarily with respect to programs under the jurisdiction of the Committee on
Finance, could not be broader.
Decisions this Committee makes will have a profound effect on the quality of life
of every man, woman and child in this country. If confirmed, I look forward to being a
part of that discussion with you, and I am sure that the answers you arrive at will serve
our country well.
Lastly, and most importantly, I would like to recognize my family. If I could have
them at this table with me today I would. I can not do justice in words when expressing
my love and appreciation for my wonderful wife and children. My wife Nancy, and four
children Rachel, Noah, Sean and Ben, truly are my beginning and end. They cheerfully
support all my mounting commitments in life and give me the strength, courage and
refuge needed to face life's challenges and opportunities.
It is a great privilege to be here today and I look forward to answering your
questions.
-30-
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
February 28, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-DAY BILLS
13-Day Bill
March 02, 2001
March 15, 2001
912795FX4
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
5.39 %
Investment Rate 1/:
5.49 %
Price:
99.805
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted
8%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
$
TOTAL
$
55,962,000
,1,135
$
26,026,000
1,135
55,963,135
$
26,027,135
~
Median rate
5.32 %: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
5.22 %:
5% of the amount
Jf accepted competitive tenders was tendered at or below that rate.
3ID-TO-COVER RATIO = 55,963,135 / 26,027,135 = 2.15
~O FIMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
0-64
U~YAKTMENT
OF
THE
TREASURY
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622·2960
EMBARGOED UNTIL 11 :00 A.M. EST
Text as prepared for Deliver
March 1, 2001
Contact: Tara Bradshaw
(202) 622-2960
TESTIMONY OF TREASURY SECRETARY PAUL O'NEILL
BEFORE THE SENATE BUDGET COMMITTEE
Good morning Chairman Domenici, Senator Conrad and members of the Committee. It's
a pleasure to be here with you today.
President Bush unveiled his budget this morning, and it is full of good news for the
American people. First, it funds America's priorities, especially in education. Second, it walls
off every dollar of the Social Security surplus and proposes Medicare reform to strengthen
retirement security for every generation. And finally it reduces individual income taxes, to
eliminate the structural overtaxation that has created a tax surplus today.
There's no question that the numbers in the federal budget are enormous. We are
proposing $1.9 trillion in government spending for next year alone. For the next 10 years, total
spending will be over $22 trillion. These are changes of an entire order of magnitude since the
last time I served in Washington. In fact, this year's projected budget surplus of $281 billion is
aJ:nost as large as the total on-budget government spending in my last year of service in
Washington. That's evidence of how much our economy has grown, and how much Washington
has grown.
The federal budget surplus is projected to be $5.6 trillion over the next ten years. And
this is a fairly conservative estimate, given that we've underestimated the surplus several years in
a row now. Even after setting aside the Social Security surplus, there is plenty of room for a $1.6
trillion tax cut. The numbers are big, but the math is fairly simple: Start with the $5.6 trillion
surplus, take away $2.6 trillion in Social Security surplus and $1.6 trillion for tax relief, and we
are left with a $1.4 trillion cushion to address our priorities - beginning with Medicare reform, to
service the debt, and to be prepared for unexpected needs.
This is a fiscally prudent budget. Under this plan, we will payoff a large portion of the
publicly held debt over the next six years. Washington ran deficits instead of surpluses for so
long that no one gave much serious thought to the prospect of retiring our debt instruments
before they mature. Only now, as we face the reality of rapidly mounting surpluses, are we
confronted with serious questions about the potential impact of buying back the publicly held
debt from a public that may not be willing to sell it all back early.
PO-66
Far press releases, speeches, public schedules and official b~ograPhies, call our 24-hour fax line at (202) 622-2040
·u.s. Government Prlntmg Otfice.
1998 - 619-559
The debt held by the public will amount to $3.2 trillion at the end of this year.
Retirement funds, state and local governments and foreign investors all have come to rely on the
security of U.S. Treasuries. It could be very costly - if not impossible - to retire all of those
holdings prematurely. Moreover, there needs to be a replacement opportunity for them. Experts
are already thinking about alternatives to Treasury Securities for use by the Federal Reserve and
others, but these are novel concepts that will take time to put in place.
In addition to systemic adjustment questions, there are cost questions related to paying
off the entire publicly held debt. In testimony before the Senate Budget Committee, Fed
Chairman Alan Greenspan explained it this way: "some holders of long-term Treasury securities
may be reluctant to give them up, especially those who highly value the risk-free status of those
issues. Inducing such holders, including foreign holders, to willingly offer to sell their securities
prior to maturing could require paying premiums that far exceed any realistic value of retiring
the debt before maturity."
Under the assumptions supporting the President's plan, we payoff all but this "nonretireable" debt by 2008. While we are paying off the retireable debt, the plan also increases
spending on education next year by 11 percent, increases defense spending next year by $14
billion, and provides $661 billion in overall discretionary spending next year. Discretionary
spending will increase by 4 percent, more than enough to account for inflation and address real
needs.
Some want to increase spending even further. We disagree. Instead of simply piling on
new spending, we must be better stewards of the taxpayers' dollars. We have overlapping
programs throughout the government with little or no information on how well they deliver
services to the taxpayers. We need to find out where we are getting results and where we aren't,
and adjust federal spending accordingly.
Once we've paid down the debt that can be retired, walled off Social Security funds
where they can't be drained for other government spending, and increased spending for
America's priorities, we face the question of how to use any additional surplus dollars. If they
aren't returned to the taxpayers, they can only be spent in Washington, creating new government
programs or buying up private assets. Government is big enough, and it has no business owning
private companies.
People make better decisions than government about how to spend their money. That's
why we must eliminate structural overtaxation and let people keep more of what they earn.
Today the federal individual income tax burden is higher than at any other time in our
nation's history. We have no business taking from taxpayers more than it costs to pay for agreed
public purposes.
The President has proposed tax relief that reinforces the values that make America great opportunity, entrepreneurship, strong families and individual success.
First, the President has proposed reducing income taxes for every American who pays
income taxes. The current five rate system will be simplified to four rates, and the tax rate on the
first $6,000 of taxable income earned by every American will fall from 15 to 10 percent.
2
High income tax rates block access to the middle class for working Americans struggling
to get ahead. And high income tax rates punish success. We must have a tax code that keeps the
American Dream in everyone's reach and helps people move up the economic ladder of success.
We must have a tax code that fosters entrepreneurship and does not penalize hard work.
Cutting income tax rates is the most effective fiscal policy action we can take to put our
economy back on the path of long-term economic growth. The best minds in this nation contain
incredible knowledge and creativity. Ifwe work together to unleash that potential, we can
achieve permanent high rates of growth that will make all our other goals more achievable.
The President's tax relief plan also strengthens the ties that hold families together.
•
It doubles the child tax credit to $1,000 per child. Parents everywhere have one goal above
all others: to give their children the best possible opportunity for success and happiness in
life. The increased child tax credit will give parents more resources to save for college
tuition, pay for braces or hire a tutor.
•
This plan also reduces the unfair marriage penalty. We as a society celebrate when two
people decide to spend their lives together. Why would our tax code punish them?
•
And this plan eliminates the unfair death tax. Government has no business confiscating the
legacy parents work their entire lives to build for their children.
This package is a pay raise for working Americans. Four-person families earning
$35,000 a year will no longer bear any federal income tax burden. Four-person families earning
$45,000 will see their income taxes cut in half. And four-person families earning $75,000 will
see their income tax burden reduced by 22 percent.
The President's tax relief plan maintains the progressivity of our tax code - and, in fact,
increases the share of federal income taxes paid by upper-income taxpayers. In 1998, the top 10
percent of income earners paid 65 percent of federal income taxes, while the bottom half of
income earners paid 4.2 percent of the total federal income tax burden. After implementing the
President's tax relief plan, the top 10 percent of income earners will pay 66 percent of all federal
income taxes. The average family will keep $1,600 a year that they would otherwise have sent
to Washington. That's enough for two monthly mortgage payments or for a year of junior
college tuition.
Taxpayers in the higher tax brackets are likely to invest their tax relief in the economy,
creating jobs for all Americans. Small businesses are the engine of growth in our economy, and
a majority of small businesses pay taxes under the individual income tax system. A small
businessman receiving tax reliefwill plow that back into the firm, either to increase productivity,
which results in higher wages, or to hire more workers. A farmer will be able to use his tax
savings to trade in his old tractor and purchase the newest technology to improve his crop yield.
America's economy will grow as these investments go forward.
3
This tax relief package is sound fiscal and economic policy. It fits easily within our
budget framework, leaving a $1.4 trillion cushion over the next ten years to service the debt, to
address priorities - beginning with Medicare refonn, and to handle unexpected needs. I like to
refer to it as the Goldilocks tax relief plan - not too big, not too small, just right.
This budget strengthens the three platfonns that make success and prosperity possible for
all generations of Americans - improved education, fiscal responsibility, and tax fairness. I look
forward to working with the members of this committee to implement these common sense
budget priorities, so that America continues to lead the world toward greater freedom and
opportuni ty.
Thank you.
-30-
4
UEPARTlVIENT
lREASURY
OF
THE
TREASURY
NEWS
OFFICE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220. (202) 622-2960
EMBARGOED UNTIL 3:00 P.M. EST
Text as prepared for Deliver
March 1,2001
Contact: Tara Bradshaw
(202) 622-2960
TESTIMONY OF TREASURY SECRETARY PAUL O'NEILL
BEFORE THE HOUSE BUDGET COMMITTEE
Good afternoon Chairman Nussle, Congressman Spratt, and members of the Committee.
It's a pleasure to be here with you today.
President Bush unveiled his budget this morning, and it is full of good news for the
American people. First, it funds America's priorities, especially in education. Second, it walls
off every dollar of the Social Security surplus and proposes Medicare reform to strengthen
retirement security for every generation. And finally it reduces individual income taxes, to
eliminate the structural overtaxation that has created a tax surplus today.
There's no question that the numbers in the federal budget are enormous. We are
proposing $1.9 trillion in government spending for next year alone. For the next 10 years, total
spending will be over $22 trillion. These are changes of an entire order of magnitude since the
last time I served in Washington. In fact, this year's projected budget surplus of$281 billion is
almost as large as the total on-budget government spending in my last year of service in
Washington. That's evidence of how much our economy has grown, and how much Washington
has grown.
The federal budget surplus is projected to be $5.6 trillion over the next ten years. And
this is a fairly conservative estimate, given that we've underestimated the surplus several years in
a row now. Even after setting aside the Social Security surplus, there is plenty of room for a $1.6
trillion tax cut. The numbers are big, but the math is fairly simple: Start with the $5.6 trillion
surplus, take away $2.6 trillion in Social Security surplus and $1.6 trillion for tax relief, and we
are left with a $1.4 trillion cushion to address our priorities - beginning with Medicare reform, to
service the debt, and to be prepared for unexpected needs.
This is a fiscally prudent budget. Under this plan, we will payoff a large portion of the
publicly held debt over the next six years. Washington ran deficits instead of surpluses for so
long that no one gave much serious thought to the prospect of retiring our debt instruments
before they mature.
PO-67
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
Only now, as we face the reality of rapidly mounting surpluses, are we confronted with
serious questions about the potential impact of buying back the publicly held debt from a public
that may not be willing to sell it all back early.
The debt held by the public will amount to $3.2 trillion at the end of this year.
Retirement funds, state and local governments and foreign investors all have come to rely on the
security of U.S. Treasuries. It could be very costly - ifnot impossible - to retire all of those
holdings prematurely. Moreover, there needs to be a replacement opportunity for them. Experts
are already thinking about alternatives to Treasury Securities for use by the Federal Reserve and
others, but these are novel concepts that will take time to put in place.
In addition to systemic adjustment questions, there are cost questions related to paying
off the entire publicly held debt. In testimony before the Senate Budget Committee, Fed
Chairman Alan Greenspan explained it this way: "some holders of long-term Treasury securities
may be reluctant to give them up, especially those who highly value the risk-free status of those
issues. Inducing such holders, including foreign holders, to willingly offer to sell their securities
prior to maturing could require paying premiums that far exceed any realistic value of retiring
the debt before maturity."
Under the assumptions supporting the President's plan, we payoff all but this "nonretireable" debt by 2008. While we are paying off the retireable debt, the plan also increases
spending on education next year by 11 percent, increases defense spending next year by $14
billion, and provides $661 billion in overall discretionary spending next year. Discretionary
spending will increase by 4 percent, more than enough to account for inflation and address real
needs.
Some want to increase spending even further. We disagree. Instead of simply piling on
new spending, we must be better stewards of the taxpayers' dollars. We have overlapping
programs throughout the government with little or no information on how well they deliver
services to the taxpayers. We need to find out where we are getting results and where we aren't,
and adjust federal spending accordingly.
Once we've paid down the debt that can be retired, walled off Social Security funds
where they can't be drained for other government spending, and increased spending for
America's priorities, we face the question of how to use any additional surplus dollars. If they
aren't returned to the taxpayers, they can only be spent in Washington, creating new government
programs or buying up private assets. Government is big enough, and it has no business owning
private companies.
People make better decisions than government about how to spend their money. That's
why we must eliminate structural overtaxation and let people keep more of what they earn.
Today the federal individual income tax burden is higher than at any other time in our
nation's history. We have no business taking from taxpayers more than it costs to pay for agreed
public purposes.
The President has proposed tax relief that reinforces the values that make America great opportunity, entrepreneurship, strong families and individual success.
2
First, the President has proposed reducing income taxes for every American who pays
income taxes. The current five rate system will be simplified to four rates, and the tax rate on the
first $6,000 of taxable income earned by every American will fall from 15 to 10 percent.
High income tax rates block access to the middle class for working Americans struggling
to get ahead. And high income tax rates punish success. We must have a tax code that keeps the
American Dream in everyone's reach and helps people move up the economic ladder of success.
We must have a tax code that fosters entrepreneurship and does not penalize hard work.
Cutting income tax rates is the most effective fiscal policy action we can take to put our
economy back on the path of long-term economic growth. The best minds in this nation contain
incredible knowledge and creativity. Ifwe work together to unleash that potential, we can
achieve permanent high rates of growth that will make all our other goals more achievable.
The President's tax relief plan also strengthens the ties that hold families together.
•
It doubles the child tax credit to $1,000 per child. Parents everywhere have one goal above
all others: to give their children the best possible opportunity for success and happiness in
life. The increased child tax credit will give parents more resources to save for college
tuition, pay for braces or hire a tutor.
•
This plan also reduces the unfair marriage penalty. We as a society celebrate when two
people decide to spend their lives together. Why would our tax code punish them?
•
And this plan eliminates the unfair death tax. Government has no business confiscating the
legacy parents work their entire lives to build for their children.
This package is a pay raise for working Americans. Four-person families earning
$35,000 a year will no longer bear any federal income tax burden. Four-person families earning
$45,000 will see their income taxes cut in half. And four-person families earning $75,000 will
see their income tax burden reduced by 22 percent.
The President's tax relief plan maintains the progressivity of our tax code - and, in fact,
increases the share of federal income taxes paid by upper-income taxpayers. In 1998, the top 10
percent of income earners paid 65 percent of federal income taxes, while the bottom half of
income earners paid 4.2 percent of the total federal income tax burden. After implementing the
President's tax relief plan, the top 10 percent of income earners will pay 66 percent of all federal
income taxes. The average family will keep $1,600 a year that they would otherwise have sent
to Washington. That's enough for two monthly mortgage payments or for a year of junior
college tuition.
Taxpayers in the higher tax brackets are likely to invest their tax relief in the economy,
creating jobs for all Americans. Small businesses are the engine of growth in our economy, and
a majority of small businesses pay taxes under the individual income tax system. A small
businessman receiving tax relief will plow that back into the firm, either to increase productivity,
which results in higher wages, or to hire more workers.
3
A fanner will be able to use his tax savings to trade in his old tractor and purchase the
newest technology to improve his crop yield. America's economy will grow as these
investments go forward.
This tax relief package is sound fiscal and economic policy. It fits easily within our
budget framework, leaving a $1.4 trillion cushion over the next ten years to service the debt, to
address priorities - beginning with Medicare reform, and to handle unexpected needs. I like to
refer to it as the Goldilocks tax relief plan - not too big, not too small, just right.
This budget strengthens the three platforms that make success and prosperity possible for
all generations of Americans - improved education, fiscal responsibility, and tax fairness. I look
forward to working with the members of this committee to implement these common sense
budget priorities, so that America continues to lead the world toward greater freedom and
opportunity.
Thank you.
-30-
4
DEPART~IENT
OF
THE
TREASURY
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960
'OR IMMEDIATE RELEASE
:arch I, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS
Today, Treasury completed a debt buyback (redemption) operation for $1,750 million
ar of its outstanding issues. A total of 11 issues maturing between February 2019 and
ov~er 2022 were eligible for this operation. The settlement date for this operation will
e March 5 2001. Summary results of this operation are presented below.
(amounts in millions)
Efers Received (Par Amount) :
:fers Accepted (Par Amount) :
)tal Price Paid for Issues
(Less Accrued Interest):
rnmer of Issues Eligible:
For Operation:
For Which Offers were Accepted:
ighted Average Yield
of all Accepted Offers
(%):
ighted Average Maturity
for all Accepted Securities (in years) :
$5,490
1,750
2,357
11
11
5.432
19.6
tails for each issue accompany this release.
1-68
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
March 1, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS
(amounts in millions, prices in decimals)
Table I
Coupon
Ra t e
(%)
8.875
8.125
8.500
8.750
8.750
7.875
8.125
8.125
8.000
7.250
7.625
Maturity
Da t e
Par
Amount
Off ere d
Par
Amount
Accented
Highest
Accepted
Price
Weighted
Average
Accepted
Price
02/15/2019
08/15/2019
02/15/2020
05/15/2020
08/15/2020
02/15/2021
05/15/2021
08/15/2021
11/15/2021
08/15/2022
11/15/2022
636
511
255
342
766
382
325
400
1,180
296
397
431
120
30
120
234
160
45
180
299
46
85
139.625
131.343
136.156
139.343
139.625
129.375
132.578
132.812
131.421
122.390
127.312
139.578
131. 319
136.135
139.321
139.570
129.355
132.571
132.750
131.382
122.378
127.273
Table II
Coupon
Rate (%)
Maturity
Date
CUSIP
Number
A~cepted
'yield
Weighted
Average
Accepted
Yield
8.875
8.125
8.500
8.750
8.750
7.875
8.125
8.125
8.000
7.250
7.625
02/15/2019
08/15/2019
02/15/2020
05/15/2020
08/15/2020
02/15/2021
05/15/2021
08/15/2021
11/15/2021
08/15/2022
11/15/2022
912810EC8
912810ED6
912810EE4
912810EF1
912810EG9
912810EH7
912810EJ3
912810EKO
912810EL8
912810EM6
912810EN4
5.400
5.417
5.423
5.425
5.426
5.443
5.445
5.445
5.449
5.465
5.460
5.403
5.419
5.424
5.426
5.430
5.444
5.445
5.449
5.452
5.466
5.463
Lowest
Total Par Amount Offered:
Total Par Amount Accepted:
Par Amount
PrivatelY Held*
14,175
17,383
8,449
6,752
16,757
9,311
9,056
8,845
28,364
9,369
6,899.
5,490
1,750
Note: Due to rounding, details may not add to totals.
*.~ount
outstanding after operation. Calculated using amounts reported on announcement.
OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 2: 30 P. M•.
March 1, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction two series of Treasury bills totaling
approximately $20,000 million to refund $20,414 million of publicly held
securities maturing March 8, 2001, and to pay down about $414 million.
In addition to the public holdings, Federal Reserve Banks for their own
accounts hold $10,986 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders. Amounts awarded
to these accounts will be in addition to the offering amount.
to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of each
auction. These noncompetitive bids will have a limit of $200 million per
account and will be accepted in the order. of smallest to largest, up to the
aggregate award limit of $1,000 million.'
Up
Treasu~Direct
customers have requested that we reinvest their maturing
holdings of approximately $973 million into the 13-week bill and $770 million
into the 26-week.bill.
This offering of Treasury securities is governed by the ter.ms and conditions set forth in the Unifor.m Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356~ as
amended) •
Details about each of the new securities are given in the attached
offering highlights.
000
Attachment
PO-69
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED MARCH 8, 2001
March 1, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . . . . . $10,000 million
Description of Offering:
Term and type of security ............... 91-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . • . . . . . . . 912795 GK 1
Auction date . . . . . . . . . . . . . . . . . . . . • . . . . . . . March 5, 2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • March 8, 2001
Maturity date ..........•..............•• Juue 7,2001
Original issue date ....•.....•..•.....•. December 7,2000
Currently outstanding .•••.•...•.••.•..•. $15,396 million
Minimum bid amount and multiples •..•..•. $1,000
$10,000 million
182-day bill
912795 HN 4
March 5, 2001
March 8, 2001
September 6, 2001
March 8, 2001
$1,000
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted
through the Federal Reserve Banks as agents for FIMA accounts. Accepted in order of size
from smallest to largest with no more than $200 million awarded per account. The total
noncompetitive amount awarded to Federal-Reserve Banks as agents for FIMA accounts will
not exceed $1,000 million. A single bid that would cause the limit to be exceeded will
be partially accepted in the amount that brings the aggregate award total to the $1,000
million limit. However, if there are two or more bids of equal amounts that would cause
the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g.,
7.100%, 7.105%.
(2) Net long position for each bidder must be reported when the sum of the total bid amount,
at all discount rates, and the net long position is $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the closing time for
receipt of competitive tenders.
Maximum Recognized Bid at a Single Rate •.•• 35% of public offering
Maximum Award •••••••••••••••••••••••••••••• 35% of public offering
Receipt of Tenders:
Noncompetitive tenders •• Prior to 12:00 noon eastern standard time on auction day
Competitive tenders .•..• Prio~ to 1:00 p.m. eastern standard time on auction day
Payment Terms: By charge to a funds account at a Federal Reserve Bank on issue date, or payment
of full par amount with tender.
Treasu~Direct customers can use the Pay Direct feature which
authorizes a charge to their account of record at their financial institution on issue date.
i",
1'.,
I' t\
K 1 ;\ lEN T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
March 2,2000
Contact:
Tara Bradshaw
(202) 622-2960
TREASURY RECEIVES CLEAN AUDIT REPORT
O'Neill Commends Progress
The Department of the Treasury today announced that it has received its first unqualified,
or "clean," auditor's opinion on its Department wide financial statements. The Government
Management Reform Act required federal agencies to have their agency wide financial
statements audited every year, beginning in fiscal year 1996. Treasury has made steady
improvement in both timeliness and quality of its financial statements over the past five years,
culminating in this year's unqualified audit opinion.
Despite reaching this financial milestone, the Department acknowledges that it must continue its
efforts to correct its financial systems problems. These problems are particularly acute at the
Internal Revenue Service and the U.S. Customs Service. While the IRS received an unqualified
opinion on its own financial statements, which was a major accomplishment, the IRS alone is
responsible for about half (15 of 32) of the outstanding financial problem areas within the
Department. The Department will continue to work with both bureaus to correct this situation.
The Department's financial statements are included in its fiscal year 2000 Accountability
Report, the federal government's version of a corporate annual report. The Accountability
Report includes management's discussion and analysis of key performance measures, the
Department wide financial statements, a description of management control problems, the
auditor's report on the Department's financial statements, and other key financial management
information.
In his message opening the Accountability Report, Treasury Secretary Paul O'Neill states
that "Good stewardship of taxpayer resources is a responsibility I take very seriously. We must
provide the taxpayers with real value for the hard-earned tax dollars they entrust to the Treasury.
I intend to use this report as a starting place, and to continue to improve Treasury's performance
during my tenure here."
###
PO #70
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Printing Otfice· 1998 - 619-559
!J L
r Ah
i
ivI E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960
For Release Upon Delivery
Expected at 12:00 noon
March 5,2001
STATEMENT OF
JOSEPH MIKRUT
TAX LEGISLATIVE COUNSEL
DEPARTMENT OF THE TREASURY
BEFORE THE SUBCOMMITTEE ON OVERSIGHT
COMMITTEE ON WAYS AND MEANS
Mr. Chairman, Mr. Coyne, and Members of the Subcommittee:
I appreciate the opportunity to discuss with you today the current tax incentives for the
domestic production of oil and gas and for energy conservation.
Increasing Domestic Oil and Gas Production
Before I tum to my discussion of the prese!lt tax treatment of oil and gas activities, I
would like to provide a brief overview of this sector.
Overview
Oil is an internationally traded commodity with its domestic price set by world supply and
demand. Domestic exploration and production activity is affected by the world price of crude oil.
Historically, world oil prices have fluctuated substantially. From 1970 to the early 1980s, there
was a fivefold increase in real oil prices. World oil prices fell sharply in 1986 and were relatively
more stable from 1986 through 1997. During that period, average refiner acquisition prices
ranged from $14.91 to $23.59 in real 1992 dollars. In 1998, however, oil prices at the refiner
declined to $12.52 per barrel in nominal dollars ($11.14 per barrel in 1992 dollars), their lowest
level in 25 years in real terms. Since 1998, the decline has reversed with refiner acquisition costs
(in nominal dollars) rising to $17.46 per barrel in 1999 and $30.92 per barrel in November 2000,
the latest month for which composite figures are available. The equivalent prices in 1992 dollars
are $15.31 per barrel in 1999 and $26.56 per barrel in November 2000.
Domestic oil production has been on the decline since the mid-1980's. From 1978 to 1983
oil consumption in the United States also declined, but increasing consumption since 1983 has
more than erased this decline. In 2000, domestic oil consumption was 15 percent higher than in
1970. The decline in oil production and increase in consumption have led to an increase in oil
PO-71
For press releases, speeches, public schedules and official biographies, call our 24~our fax line at (202) 622-2040
·U.S. Government Printina OHice: 199R - nHl-~~Q
-2imports. Net petroleum (crude and product) imports have risen from approximately 38 percent of
consumption in 1988 to 51 percent in 1999.
A similar pattern of large recent price increases and increasing dependence on imports has
occurred in the natural gas market. During the second half of the 1990s, spot prices for natural
gas exceeded $4.00 per million Btu (MMBtu) in only one month (February 1996). The spot price
again exceeded $4.00 per MMBtu in May 2000, rose above $5.00 per MMBtu in September
2000, and has recently exceeded $10.00 per MMBtu. 1
The United States has large natural gas reserves and was essentially self-sufficient in
natural gas until the late 1980s. Since 1986, natural gas consumption has increased by more than
30 percent but natural gas production has increased by only 17 percent. Net imports as a share of
consumption more than tripled from 1986 to 1999, rising from 4.2 percent to 15.4 percent.
Natural gas from Canada makes up nearly all of the imports into the United States.
These increases in energy prices over the past two years have focused attention on the
impact of shortages and high prices on individual consumers and businesses. In announcing this
hearing, the Chairman noted the three-fold increase in crude oil prices, the four- to seven-fold
increase in natural gas prices, and the near doubling of the price of home heating oil. He also said
we "have to find out where the tax code helps, where it causes problems, and whether it needs to
be changed." To assist the Subcommittee in this effort, I would now like to discuss the current
tax incentives for domestic oil and gas production.
Current law tax incentives for oil and gas prodtiction
The importance of maintaining a strong domestic energy industry has been long
recognized and the Internal Revenue Code includes a variety of measures to stimulate domestic
exploration and production. They are generally justified on the ground that they reduce
vulnerability to an oil supply disruption through increases in domestic production, reserves, and
exploration and production capacity. The tax incentives contained in present law address the drop
in domestic exploratory drilling that has occurred since the mid-1950s and the continuing loss of
production from mature fields and marginal properties.
Incentives for oil and gas production in the form of tax expenditures are estimated to total
$9.8 billion for fiscal years 2002 through 2006. 2 They include the nonconventional fuels (i.e., oil
1 All
price references are to the spot price at the Henry Hub and are in nominal dollars.
Estimates prepared by the Office of Tax Analysis, Department of the Treasury, for inclusion in
Analytical Perspectives, Budget of the United States Government, Fiscal Year 2002, U.S.
Government Printing Office, Washington, DC (publication expected in March 2001). These
estimates are measured on an "outlay equivalent" basis. They show the amount of outlay that
would be required to provide the taxpayer the same after-tax income as would be received
2
-3produced from shale and tar sands, gas produced from geopressured brine, Devonian shale, coal
seams, tight formations, or biomass, and synthetic fuel produced from coal) production credit
($2.4 billion), the enhanced oil recovery credit ($4.4 billion), the allowance of percentage
depletion for independent producers and royalty owners, including increased percentage depletion
for stripper wells ($2.3 billion), the exception from the passive loss limitation for working
interests in oil and gas properties ($100 million), and the expensing of intangible drilling and
development costs ($640 million). In addition to those tax expenditures, oil and gas activities
have largely been eliminated from the alternative minimum tax. These provisions are described in
detail below.
Percentage Depletion
Certain costs incurred prior to drilling an oil- or gas-producing property are recovered
through the depletion deduction. These include costs of acquiring the lease or other interest in
the property, and geological and geophysical costs (in advance of actual drilling). Any taxpayer
having an economic interest in a producing property may use the cost depletion method. Under
this method, the basis recovery for a taxable year is proportional to the exhaustion of the property
during the year. The cost depletion method does not permit cost recovery deductions that exceed
the taxpayer's basis in the property or that are allowable on an accelerated basis. Thus, the
deduction for cost depletion is not generally viewed as a tax incentive.
Independent producers and royalty owners (as contrasted to integrated oil companies)3
may qualify for percentage depletion. A qualifying. taxpayer determines the depletion deduction
for each oil or gas property under both the percentage depletion method and the cost depletion
method and deducts the larger of the two amounts. Under the percentage depletion method,
generally 15 percent of the taxpayer's gross income from an oil- or gas-producing property is
through the tax preference. This outlay equivalent measure allows a comparison of the cost of the
tax expenditure with that of a direct Federal outlay.
3 An independent producer is any producer who is not a "retailer" or "refiner." A retailer is any
person who directly, or through a related person, sells oil or natural gas or any product derived
therefrom (1) through any retail outlet operated by the taxpayer or related person, or (2) to any
person that is obligated to market or distribute such oil or natural gas (or product derived
therefrom) under the name of the taxpayer or the related person, or that has the authority to
occupy any retail outlet owned by the taxpayer or a related person. Bulk sales of crude oil and
natural gas to commercial or industrial users, and bulk sales of aviation fuel to the Department of
Defense, are not treated as retail sales for this purpose. Further, a person is not a retailer within
the meaning of this provision if the combined gross receipts of that person and all related persons
from the retail sale of oil, natural gas, or any product derived therefrom do not exceed $5 million
for the taxable year. A refiner is any person who directly or through a related person engages in
the refining of crude oil, but only if such person or related person has a refinery run in excess of
50,000 barrels per day on any day during the taxable year.
-4allowed as a deduction in each taxable year. The amount deducted may not exceed 100 percent
of the net income from that property in any year (the "net-income lirnitation").4 Additionally, the
percentage depletion deduction for all oil and gas properties may not exceed 65 percent of the
taxpayer's overall taxable income (determined before such deduction and adjusted for certain loss
carrybacks and trust distributions). 5
A taxpayer may claim percentage depletion with respect to up to 1,000 barrels of average
daily production of domestic crude oil or an equivalent amount of domestic natural gas. For
producers of both oil and natural gas, this limitation applies on a combined basis. All production
owned by businesses under common control and members of the same family must be aggregated;
each group is then treated as one producer for application of the I~OOO-barrel1imitation.
Special percentage depletion provisions apply to oil and gas production from marginal
properties. The statutory percentage depletion rate is increased (from the general rate of 15
percent) by one percentage point for each whole dollar that the average price of crude oil (as
determined under the provisions of the nonconventional fuels production credit of section 29) for
the immediately preceding calendar year is less than $20 per barrel. In no event may the rate of
percentage depletion under this provision exceed 25 percent for any taxable year. The increased
rate applies for the taxpayer's taxable year which immediately follows a calendar year for which
the average crude oil price falls below the $20 floor. To illustrate the application of this
provision, the average price of a barrel of crude oil for calendar year 1999 was $15.56; thus, the
percentage depletion rate for production from marginal wells was increased by four percent (to 19
percent) for taxable years beginning in 2000. The ~ OO-percent-of-net-income limitation has been
suspended for marginal wells for taxable years beginning after December 31, 1997, and before
December 31, 2002.
Marginal production is defmed for this purpose as domestic crude oil or domestic natural
gas which is produced during any taxable year from a property which (1) is a stripper well
property for the calendar year in which the taxable year begins, or (2) is a property substantially
all of the production from which during such calendar year is heavy oil (i.e., oil that has a
weighted average gravity of 20 degrees API or less corrected to 60 degrees Fahrenheit). A
stripper well property is any oil or gas property for which daily average production per producing
oil or gas well is not more than 15 barrel equivalents in the calendar year during which the
By contrast, for any other mineral qualifying for the percentage depletion deduction, the
deduction may not exceed 50 percent of the taxpayer's taxable income from the depletable
property.
4
Amounts disallowed as a result of this rule may be carried forward and deducted in subsequent
taxable years, subject to the 65-percent-of-taxable-income limitation for those years.
5
-5taxpayer's taxable year begins. 6 A property qualifies as a stripper well property for a calendar year
only if the wells on such property were producing during that period at their maximum efficient
rate of flow.
If a taxpayer's property consists of a partial interest in one or more oil- or gas-producing
wells, the determination of whether the property is a stripper well property or a heavy oil property
is made with respect to total production from such wells, including the portion of total production
attributable to ownership interests other than the taxpayer's. If the property satisfies the
requirements of a stripper well property, then each owner receives the benefits of this provision
with respect to its allocable share of the production from the property for its taxable year that
begins during the calendar year in which the property so qualifies.
The allowance for percentage depletion on production from marginal oil and gas
properties is subject to the 1,000-barrel-per-day limitation discussed above. Unless a taxpayer
elects otherwise, marginal production is given priority over other production for purposes of
utilization of that limitation.
Because percentage depletion, unlike cost depletion, is computed without regard to the
taxpayer's basis in the depletable property, cumulative depletion deductions may be far greater
than the amount expended by the taxpayer to acquire or develop the property. The excess of the
percentage depletion deduction over the deduction for cost depletion is generally viewed as a tax
expenditure.
Intangible Drilling and Development Costs
In general, costs that benefit future periods must be capitalized and recovered over such
periods for income tax purposes, rather than being expensed in the period the costs are incurred.
In addition, the uniform capitalization rules require certain direct and indirect costs allocable to
property to be included in inventory or capitalized as part of the basis of such property. In
general, the uniform capitalization rules apply to real and tangible personal property produced by
the taxpayer or acquired for resale.
Special rules apply to intangible drilling and development costs ("IDCs").? Under these
Equivalent barrels is computed as the sum of (1) the number of barrels of crude oil produced,
and (2) the number of cubic feet of natural gas produced divided by 6,000. If a well produced 10
barrels of crude oil and 12,000 cubic feet of natural gas, its equivalent barrels produced would
equal 12 (i.e., 10 + (12,000 / 6,000)).
6
IDCs include all expenditures made by an operator for wages, fuel, repairs, hauling, supplies,
etc., incident to and necessary for the drilling of wells and the preparation of wells for the
production of oil and gas. In addition, IDCs include the cost to operators of any drilling or
development work (excluding amounts payable only out of production or gross or net proceeds
7
-6special rules, an operator (i.e., a person who holds a working or operating interest in any tract or
parcel of land either as a fee owner or under a lease or any other fonn of contract granting
working or operating rights) who pays or incurs IDes in the development of an oil or gas
property located in the United States may elect either to expense or capitalize those costs. The
unifonn capitalization rules do not apply to otherwise deductible IDes.
If a taxpayer elects to expense IDes, the amount of the IDes is deductible as an expense
in the taxable year the cost is paid or incurred. Generally, IDes that a taxpayer elects to capitalize
may be recovered through depletion or depreciation, as appropriate; or in the case of a
nonproductive well ("dry hole"), the operator may elect to deduct the costs. In the case of an
integrated oil company (i.e., a company that engages, either directly or though a related
enterprise, in substantial retailing or refining activities) that has elected to expense IDes, 30
percent of the IDes on productive wells must be capitalized and amortized over a 60-month
period. 8
A taxpayer that has elected to deduct IDes may, nevertheless, elect to capitalize and
amortize certain IDes over a 60-month period beginning with the month the expenditure was paid
or incurred. This rule applies on an expenditure-by-expenditure basis; that is, for any particular
taxable year, a taxpayer may deduct some portion of its IDes and capitalize the rest under this
provision. This allows the taxpayer to reduce or eliminate IDe adjustments or preferences under
the alternative minimum tax.
The election to deduct IDes applies only to those IDes associated with domestic
properties. 9 For this purpose, the United States inclUdes certain wells drilled offshore. to
from production, if the amounts are depletable income to the recipient, and amounts properly
allocable to the cost of depreciable property) done by contractors under any fonn of contract
(including a turnkey contract). Such work includes labor, fuel, repairs, hauling, and supplies
which are used in the drilling, shooting, and cleaning of wells; in such clearing of ground,
draining, road making, surveying, and geological works as are necessary in preparation for the
drilling of wells; and in the construction of such derricks, tanks, pipelines, and other physical
structures as are necessary for the drilling of wells and the preparation of wells for the production
of oil and gas. Generally, IDes do not include expenses for items which have a salvage value
(such as pipes and casings) or items which are part of the acquisition price of an interest in the
property.
8 The IRS has ruled that if an integrated oil company ceases to be an integrated oil company, it
may not immediately write off the unamortized portion of the IDes capitalized under this rule, but
instead must continue to amortize those IDes over the 60-month amortization period.
In the case of IDes paid or incurred with respect to an oil or gas well located outside of the
United States, the costs, at the election of the taxpayer, are either (1) included in adjusted basis
for purposes of computing the amount of any deduction allowable for cost depletion or (2)
9
-7-
Intangible drilling costs are a major portion of the costs necessary to locate and develop
oil and gas reserves. Because the benefits obtained from these expenditures are of value
throughout the life of the project, these costs would be capitalized and recovered over the period
of production under generally applicable accounting principles. The acceleration of the deduction
for IDCs is viewed as a tax expenditure.
Nonconventional fuels production credit
Taxpayers that produce certain qualifying fuels from nonconventional sources are eligible
for a tax credit ("the section 29 credit") equal to $3 per barrel or barrel-of-oil equivalent. I I Fuels
qualifying for the credit must be produced domestically from a well drilled, or a facility treated as
placed in service, before January 1, 1993 Y The section 29 credit generally is available for
qualified fuels sold to unrelated persons before January 1, 2003Y
For purposes of the credit, qualified fuels include: (1) oil produced from shale and tar
sands; (2) gas produced from geopressured brine, Devonian shale, coal seams, a tight formation,
or biomass (i.e., any organic material other than oil, natural gas, or coal (or any product thereof);
and (3) liquid, gaseous, or solid synthetic fuels produced from coal (including lignite), including
capitalized and amortized ratably over a 10-year period beginning with the taxable year such costs
were paid or incurred.
The term "United States" for this purpose includes the seabed and subsoil of those submerged
lands that are adjacent to the territorial waters of the United States and over which the United
States has exclusive rights, in accordance with intemationallaw, with respect to the exploration
and exploitation of natural resources (i.e., the Continental Shelf area).
10
A barrel-of-oil equivalent generally means that amount of the qualifying fuel which has a Btu
(British thermal unit) content of 5.8 million.
II
12 A facility that produces gas from biomass or produces liquid, gaseous, or solid synthetic fuels
from coal (including lignite) generally will be treated as being placed in service before January 1,
1993, ifit is placed in service by the taxpayer before July 1, 1998, pursuant to a written binding
contract in effect before January 1, 1997. In the case of a facility that produces coke or coke gas,
however, this provision applies only if the original use of the facility commences with the
taxpayer. Also, the IRS has ruled that production from certain post-1992 "recompletions" of
wells that were originally drilled prior to the expiration date of the credit would qualify for the
section 29 credit.
13 If a facility that qualifies for the binding contract rule is originally placed in service after
December 31, 1992, production from the facility may qualify for the credit if sold to an unrelated
person before January 1,2008.
-8such fuels when used as feedstocks. The amount of the credit is determined without regard to any
production attributable to a property from which gas from Devonian shale, coal seams,
geopressured brine, or a tight formation was produced in marketable quantities before 1980.
The amount of the section 29 credit generally is adjusted by an inflation adjustment factor
for the calendar year in which the sale occurs. 14 There is no adjustment for inflation in the case of
the credit for sales of natural gas produced from a tight formation. The credit begins to phase out
if the annual average unregulated wellhead price per barrel of domestic crude oil exceeds $23.50
multiplied by the inflation adjustment factor. 15
The amount of the section 29 credit allowable with respect to a project is reduced by any
unrecaptured business energy tax credit or enhanced oil recovery credit claimed with respect to
such project.
As with most other credits, the section 29 credit may not be used to offset alternative
minimum tax liability. Any unused section 29 credit generally may not be carried back or forward
to another taxable year; however, a taxpayer receives a credit for prior year minimum tax liability
to the extent that a section 29 credit is disallowed as a result of the operation of the alternative
minimum tax. The credit is limited to what would have been the regular tax liability but for the
alternative minimum tax.
This provision provides a significant tax incentive (currently about $6 per barrel of oil
equivalent or $1 per thousand cubic feet of natural gas, over one quarter of the average wellhead
price of gas in 2000. Coalbed methane and gas froin tight formations currently account for most
of the credit.
Enhanced oil recovery credit
Taxpayers are permitted to claim a general business credit, which consists of several
different components. One component of the general business credit is the enhanced oil recovery
credit. The general business credit for a taxable year may not exceed the excess (if any) of the
taxpayer's net income over the greater of (1) the tentative minimum tax, or (2) 25 percent of so
much of the taxpayer's net regular tax liability as exceeds $25,000. Any unused general business
credit generally may be carried back one taxable year and carried forward 20 taxable years.
The enhanced oil recovery credit for a taxable year is equal to 15 percent of certain costs
attributable to qualified enhanced oil recovery ("EOR") projects undertaken by the taxpayer in the
The inflation adjustment factor for the 1999 taxable year was 2.0013. Therefore, the inflationadjusted amount of the credit for that year was $6.00 per barrel or barrel equivalent.
14
IS For 1999, the inflation adjusted threshold for onset of the phaseout was $47.03 ($23.50 x
2.0013) and the average wellhead price for that year was $15.56.
9·
United States during the taxable year. To the extent that a credit is allowed for such costs, the
taxpayer must reduce the amount otherwise deductible or required to be capitalized and recovered
through depreciation, depletion, or amortization, as appropriate, with respect to the costs. A
taxpayer may elect not to have the enhanced oil recovery credit apply for a taxable year.
The amount of the enhanced oil recovery credit is reduced in a taxable year following a
calendar year during which the annual average unregulated wellhead price per barrel of domestic
crude oil exceeds $28 (adjusted for inflation since 1990).16 In such a case, the credit would be
reduced ratably over a $6 phaseout range.
For purposes of the credit, qualified enhanced oil recovery costs include the following
costs which are paid or incurred with respect to a qualified EOR project: (1) the cost of tangible
property which is an integral part of the project and with respect to which depreciation or
amortization is allowable; (2) IDCs that the taxpayer may elect to deduct;17 and (3) the cost of
tertiary injectants with respect to which a deduction is allowable, whether or not chargeable to
capital account.
A qualified EOR project means any project that is located within the United States and
involves the application (in accordance with sound engineering principles) of one or more
qualifying tertiary recovery methods which can reasonably be expected to result in more than an
insignificant increase in the amount of crude oil which ultimately will be recovered. The
qualifying tertiary recovery methods generally include the following nine methods: miscible fluid
displacement, steam-drive injection, microemulsion, flooding, in situ combustion, polymeraugmented water flooding, cyclic-steam injection, alkaline flooding, carbonated water flooding,
and immiscible non-hydrocarbon gas displacement, or any other method approved by the IRS. In
addition, for purposes of the enhanced oil recovery credit, immiscible non-hydrocarbon gas
displacement generally is considered a qualifying tertiary recovery method, even if the gas injected
is not carbon dioxide.
A project is not considered a qualified EOR project unless the project's operator submits
to the IRS a certification from a petroleum engineer that the project meets the requirements set
forth in the preceding paragraph.
The enhanced oil recovery credit is effective for taxable years beginning after December
31, 1990, with respect to costs paid or incurred in EOR projects begun or significantly expanded
after that date.
The average per-barrel price of crude oil for this purpose is determined in the same manner as
for purposes of the section 29 credit.
16
In the case of an integrated oil company, the credit base includes those IDCs which the
taxpayer is required to capitalize.
17
-10Conventional oil recovery methods do not recover all of a well's oil. Some of the
remaining oil can be extracted by unconventional methods, but these methods are generally more
costly and uneconomic at current world oil prices. In this environment, the EOR credit can
increase recoverable reserves. Although recovering oil using EOR methods is more expensive
than recovering it using conventional methods, it may be less expensive than producing oil from
new reservoirs. Although the credit could phase out at higher oil prices, it is fully effective at
present world oil prices.
Alternative minimum tax
A taxpayer is subject to an alternative minimum tax ("AMT") to the extent that its
tentative minimum tax exceeds its regular income tax liability. A corporate taxpayer's tentative
minimum tax generally equals 20 percent of its alternative minimum taxable income in excess of
an exemption amount. (The marginal AMT rate for a noncorporate taxpayer is 26 or 28 percent,
depending on the amount of its alternative minimum taxable income above an exemption amount.)
Alternative minimum taxable income ("AMTr') is the taxpayer's taxable income increased by
certain tax preferences and adjusted by determining the tax treatment of certain items in a manner
which negates the deferral of income resulting from the regular tax treatment of those items.
As a general rule, percentage depletion deductions claimed in excess of the basis of the
depletable property constitute an item of tax preference in determining the AMT. In addition, the
AMTI of a corporation is increased by an amount equal to 75 percent of the amount by which
adjusted current earnings ("ACE") of the corporation exceed AMTI (as determined before this
adjustment). In general, ACE means AMTI with additional adjustments that generally follow the
rules presently applicable to corporations in computing their earnings and profits. As a general
rule a corporation must use the cost depletion method in computing its ACE adjustment. Thus,
the difference between a corporation's percentage depletion deduction (if any) claimed for regular
tax purposes and its allowable deduction determined under the cost depletion method is factored
into its overall ACE adjustment.
Excess percentage depletion deductions related to crude oil and natural gas production are
not items of tax preference for AMT purposes. In addition, corporations that are independent oil
and gas producers and royalty owners may determine depletion deductions using the percentage
depletion method in computing their ACE adjustments.
The difference between the amount of a taxpayer's IDC deductions and the amount which
would have been currently deductible had IDCs been capitalized and recovered over a 10-year
period may constitute an item of tax preference for the AMT to the extent that this amount
exceeds 65 percent of the taxpayer's net income from oil and gas properties for the taxable year
(the "excess IDC preference"). In addition, for purposes of computing a corporation's ACE
adjustment to the AMT, IDCs are capitalized and amortized over the 60-month period beginning
with the month in which they are paid or incurred. The preference does not apply if the taxpayer
elects to capitalize and amortize IDCs over a 60-month period for regular tax purposes.
-11
IDCs related to oil and gas wells are generally not taken into account in computing the
excess IDC preference of taxpayers that are not integrated oil companies. This treatment does
not apply, however, to the extent it would reduce the amount of the taxpayer's AMTI by more
than 40 percent of the amount that the taxpayer's AMTI would have been if those IDCs had been
taken into account.
In addition, for corporations other than integrated oil companies, there is no ACE
adjustment for IDCs with respect to oil and gas wells. That is, such a taxpayer is permitted to use
its regular tax method of writing off those IDes for purposes of computing its adjusted current
earnmgs.
Absent these rules, the incentive effect of the special provisions for oil and gas would be
reduced for fInns subject to the AMT. These rules, however, effectively eliminate AMT concerns
for independent producers.
Passive activity loss and credit rules
A taxpayer's deductions from passive trade or business activities, to the extent they exceed
income from all such passive activities of the taxpayer (exclusive of portfolio income), generally
may not be deducted against other income. 18 Thus, for example, an individual taxpayer may not
deduct losses from a passive activity against income from wages. Losses suspended under this
"passive activity loss" limitation are carried forward and treated as deductions from passive
activities in the following year, and thus may offset 'any income from passive activities generated
in that later year. Losses from a passive activity may be deducted in full when the taxpayer
disposes of its entire interest in that activity to an unrelated party in a transaction in which all
realized gain or loss is recognized.
An activity generally is treated as passive if the taxpayer does not materially participate in
it. A taxpayer is treated as materially participating in an activity only if the taxpayer is involved in
the operations of the activity on a basis which is regular, continuous, and substantial.
A working interest in an oil or gas property generally is not treated as a passive activity,
whether or not the taxpayer materially participates in the activities related to that property. This
exception from the passive activity rules does not apply if the taxpayer holds the working interest
through an entity which limits the liability of the taxpayer with respect to the interest. In addition,
if a taxpayer has any loss for any taxable year from a working interest in an oil or gas property
which is treated pursuant to this working interest exception as a loss which is not from a passive
activity, then any net income from such property (or any property the basis of which is determined
in whole or in part by reference to the basis of such property) for any succeeding taxable year is
This provision applies to individuals, estates, trusts, personal service corporations, and closely
held C corporations.
18
-12-
treated as income of the taxpayer which is not from a passive activity.
Similar limitations apply to the utilization of tax credits attributable to passive activities.
Thus, for example, the passive activity rules (and, consequently, the oil and gas working interest
exception to those rules) apply to the nonconventional fuels production credit and the enhanced
oil recovery credit. However, if a taxpayer has net income from a working interest in an oil and
gas property which is treated as not arising from a passive activity, then any tax credits
attributable to the interest in that property would be treated as credits not from a passive activity
(and, thus, not subject to the passive activity credit limitation) to the extent that the amount of the
credits does not exceed the regular tax liability which is allocable to such net income.
As a result of this exception from the passive loss limitations, owners of working interests
in oil and gas properties may use losses from such interests to offset income from other sources.
Tertiary injectants
Taxpayers are allowed to deduct the cost of qualified tertiary injectant expenses for the
taxable year. Qualified tertiary injectant expenses are amounts paid or incurred for any tertiary
injectant (other than recoverable hydrocarbon injectants) which is used as a part of a tertiary
recovery method.
The provision allowing the deduction for qualified tertiary injectant expenses resolves a
disagreement between taxpayers (who considered such costs to be IDes or operating expenses)
and the IRS (which considered such costs to be subject to capitalization).
Energy Efficiency and Alternative Energy Sources
Incentives for energy efficiency and alternative energy sources are also essential elements
of national energy policy. Individuals and businesses do not invest in energy-saving and
alternative energy technologies at a level that reflects the benefits the technologies provide to
society in excess of their private returns. If a new technology reduces pollution or emissions of
greenhouse gases, those "external benefits" should be included in the decision about whether to
undertake the investment. But potential investors have an incentive to consider only the private
benefits in making decisions. Thus, they avoid technologies that are not profitable even though
their benefits to society exceed their costs. Tax incentives can offset the failure of market prices
to signal the desirable level of investment in energy-saving technologies because they increase the
private return from the investment by reducing its after-tax cost. The increase in private return
encourages additional investment in energy~saving technologies.
The continuing strength of our economy over the past two years, despite oil price rises,
underscores the dramatic improvements in energy efficiency we have achieved over the past
quarter century, as well as the changing economy. While past oil shortages have taken a
significant toll on the U.S. economy, the recent increases in oil prices have not affected the
-13economy much. Increased energy efficiency in cars, homes, and manufacturing has helped
insulate the economy from these short-term market fluctuations. In 1974, we consumed 15
barrels of oil for every $10,000 of gross domestic product. Today we consume only 8 barrels of
oil for the same amount of economic output.
Current law tax incentives for energy efficiency and alternative fuels
Tax incentives currently provide an important element of support for energy-efficiency
improvements and increased use of renewable and alternative fuels. Current incentives in the
form of tax expenditures are estimated to total $1.2 billion for fiscal years 2002 through 2006.
They include a tax credit for electric vehicles and expensing for clean-fuel vehicles ($20 million), a
tax credit for the production of electricity produced from wind or biomass and a tax credit for
certain solar energy property ($590 million), and an exclusion from gross income for certain
energy conservation subsidies provided by public utilities to their customers ($580 million). 19
Electric and clean-fuel vehicles and clean-fuel vehicle refueling property
A 10-percent tax credit is provided for the cost of a qualified electric vehicle, up to a
maximum credit of $4,000. A qualified electric vehicle is a motor vehicle that is powered
primarily by an electric motor drawing current from rechargeable batteries, fuel cells, or other
portable sources of electric current, the original use of which commences with the taxpayer, and
that is acquired for use by the taxpayer and not for resale. The full amount of the credit is
available for purchases prior to 2002. The credit begins to phase down in 2002 and does not
'
apply to vehicles placed in service after 2004.
Certain costs of qualified clean-fuel vehicles and clean-fuel vehicle refueling property may
be deducted when such property is placed in service. Qualified electric vehicles do not qualify for
the clean-fuel vehicle deduction. The deduction begins to phase down in 2002 and does not apply
to property placed in service after 2004.
Energy from wind or biomass
A 1.5-cent-per-kilowatt-hour tax credit is provided for electricity produced from wind,
"closed-loop" biomass (organic material from a plant that is planted exclusively for purposes of
being used at a qualified facility to produce electricity), and poultry waste. The electricity must be
sold to an unrelated third party and the credit is limited to the first 10 years of production. The
credit applies only to facilities placed in service before January 1,2002. The credit amount is
indexed for inflation after 1992.
19 Estimates prepared by the Office of Tax Analysis, Department of the Treasury, for
inclusion in Analytical Perspectives, Budget of the United States Government, Fiscal Year 2002,
U.S. Government Printing Office, Washington, DC (publication expected in March 2001).
-14Solar energy
A 10-percent investment tax credit is provided to businesses for qualifying equipment that
uses solar energy to generate electricity, to heat or cool or provide hot water for use in a
structure, or to provide solar process heat.
Energy conservation subsidies
Subsidies provided by public utilities to their customers for the purchase or installation of
energy conservation measures are excluded from the customers' gross income. An energy
conservation measure is any installation or modification primarily designed to reduce consumption
of electricity or natural gas or to improve the management of energy demand with respect to a
dwelling unit.
Administration proposals
The Administration's budget proposals for fiscal year 2002 will include tax incentives for
renewable energy resources. The proposals would extend the credit for electricity produced from
wind and biomass and expand eligible biomass sources. The proposals also would provide a new
IS-percent tax credit for residential solar energy property, up to a maximum credit of $2,000. We
are developing the details of these proposals and will provide a complete description when the
Administration presents its budget to Congress later this month .
.,
Mr. Chairman, this concludes my prepared testimony. I will be pleased to answer any
questions you or other members of the Subcommittee may have.
u
I:'.,
P A
K T i\;1 E N T
0 F
THE
T REA SUR Y
NEWS
OFOCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASlllNGTON, D.C.• 20220 • (202) 622-2960
FOR IMMEDIATE RELEASE
MARCH 06, 2001
CONTACT: Office of Public Affairs
(202) 622-2960
Testimony of Joseph M. Myers
Acting Deputy Assistant Secretary (Enforcement Policy)
u.s. Department of the Treasury
March 6, 2001
Before the Senate Permanent Subcommittee on Investigations
of the
Committee on Governmental Affairs
United States Senate
Introduction
Madame Chairperson, Senator Levin, and members o{ the Subcommittee, I am pleased to appear
before you today to discuss the issues raised in your Minority Staffs February 5,2001 report,
"Correspondent Banking: A Gateway to Money Laundering" (the "Minority Staff Report"). We
at the Department of the Treasury appreciate the efforts you have made to focus attention on this
important topic.
In my testimony today, I would like to describe some of the steps we have taken at the Treasury
to address the threat of international money laundering, to report on the concrete results of some
of those steps and on some of the current efforts that are underway.
I hope you will understand that we are still formulating our positions on a number of issues
raised by this hearing and the report that underlies it. Accordingly, I am not in a position today to
address the majority of the specific recommendations from the Minority Staff Report. I can
assure you, however, that we are taking a hard look at them, and are reviewing the factual record
included in the report and amassed during the hearing as part of our deliberations. We also have
asked the minority staff for the complete results of the survey they conducted of banks in the
correspondent banking business, and we look forward to reviewing those results in detail.
The National Money Laundering Strategy
As you know, the Treasury and Justice Departments have jointly issued two National Money
Laundering Strategies to meet our obligations under the Money Laundering and Financial
Crimes Strategy Act of 1998, Pub. L. 105-310 (October 30, 1998 (the "1998 Strategy Act"). In
both Strategies, we have identified a broad range of activities intended to improve our ability to
combat money laundering at home and abroad. These measures involve the investigation and
PO-72
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S.
GOVF~mmfmt
Pnntinn ()ffirg." 1QQA _
~1a_~I:;Q
prosecution of violations of our laws, regulation of financial services providers, cooperation with
state and local officials, and the pursuit of policies to ensure effective international cooperation.
In this broad context, both Strategies have identified correspondent banking relationships - and in
particular international correspondent banking relationships - as vulnerable to abuse by criminals
seeking to disguise the proceeds of crime. At the same time, we have recognized that
international correspondent banking is critically important to international business and finance,
and to the continuing predominance of the dollar as the preferred currency for financing
.
international trade.
Last year's Strategy acknowledged that correspondent banking accounts and other international
financial mechanisms such as payable through accounts, private banking, and wire transfers important features of the international banking system - are potential vehicles for money
laundering. The Strategy thus recognized the need for further examination of these mechanisms,
and to find ways of addressing potential abuses without disrupting legitimate economic activity.
The Strategy also outlined steps to be taken in the regulatory area, including the development of
guidance for enhanced scrutiny and reporting of suspicious transactions, and the implementation
of revised bank examination procedures. Each of these items anticipated incorporating the results
of the review of correspondent banking activity. Finally, the 2000 National Money Laundering
Strategy called for continued support of a range of international efforts to combat "financial
abuse", including in particular the Financial Action Task Force's ("FATF's") project to identify
jurisdictions that are not sufficiently cooperating in the international fight against money
laundering.
The interagency community has substantially accomplished the goals articulated in last year's
Strategy in this area. In September, 2000, the Office ofthe Comptroller of the Currency (OCC)
issued the Bank Secrecy Act/Anti-Money Laundering Examination Handbook. This handbook
establishes examination procedures for evaluating a bank's system to detect and report
suspicious activity, and identifies common money laundering schemes (e.g., structuring, the
Black Market Peso Exchange, Mexican Bank Drafts, and factored third party checks). The
handbook also identifies high risk products and services, including international correspondent
banking relationships, special use accounts, and private banking, and establishes examination
procedures to address these subjects, including specialized procedures for foreign correspondent
banking.
In addition, the OCC has initiated a program to identify banks that may be vulnerable to money
laundering and examine those banks using agency experts and specialized procedures. Some of
those examinations have focused on foreign correspondent banking. Banks are selected for such
examinations based on, among other things inter alia, their location in high-intensity drug
trafficking or money laundering areas, law eT,lforcement leads, excessive currency flows,
significant private banking activities, suspicious activity reporting and large currency transaction
reporting patterns, and funds transfers or account relationships with drug source or stringent bank
secrecy countries.
We have also made a great deal of progress in addressing the risks involved in international
correspondent banking through our active support of the Financial Action Task Force's project to
identify non-cooperative countries and territories ("NCCTs"). Meetings last spring with U.S.
financial services providers to discuss international correspondent banking - especially those
with the New York money center banks - convinced us of several important things:
•
First, that world trade depends upon the rapid and reliable clearing of dollar accounts
held at U.S. financial institutions by respondent banks across the globe;
•
Second, that billions, if not trillions, of dollars are cleared through U.S. money center
bank accounts each and every day (so that any regulatory solution to the problem of
abuse in this area would have to be extremely carefully targeted to avoid interfering with
this trade);
•
Third, that although anecdotal information exists, no serious systemic study has yet been
done to document the scope and nature of abuses of international correspondent banking
relationships; and,
•
Fourth, that the banking community wants more assistance from the government in terms
of identifying high risk areas of their correspondent banking business, and that they want
us to do so in a way that does not undermine their competitive position in the global
economy.
At around the same time we were meeting with the banks, the Treasury Department became
aware of the Subcommittee Staffs survey of a number of banks and the investigation that
ultimately led to this hearing. The Treasury Department has focused its efforts on identifying
NCCTs, and warning our domestic financial institutions about them.
Of the eight foreign jurisdictions involved in the case studies outlined in the Minority Staff
Report, six of them are on the FATF list of 15 NCCTs, and seven of them are the subject of the
formal advisories from Treasury's Financial Crime, Enforcement Network ("FinCEN"). The
FinCEN advisories alert U.S. financial institutions of specific deficiencies identified by the
FATF review and con finned by our own analysis, and encourage our institutions to apply
enhanced scrutiny to transactions involving those jurisdictions. However, the advisories do not
discourage banks from maintaining these relationships. 23 of the 29 F ATF members have issued
similar warnings to their domestic financial institutions.
On August 9, 2000, the OCC issued Advisory Letter 2000-8, "U.S. Department of the Treasury
FinCEN Advisories 13 through 17. The OCC transmitted to financial institutions under its
supervision, FinCEN Advisories advising banks of the serious deficiencies in the countermoney-laundering systems in the 15 jurisdictons identified in the FATF NCCT process. In
addition, the OCC emphasized the need for banks to pay particular attention to the possibility of
suspicious transactions in high-risk areas, including foreign correspondent banking. As a result
of the FinCEN advisories, the OCC implemented a program to review the anti-money laundering
is in the
programs in all banks with significant exposure to one or more of the NCCTs. The
process of evaluating these banks to detennine whether their systems and processes are adequate
to control the anti-money laundering risks associated with the NCCTs.
II
acc
We have also been working with our allies and with officials from NCCTs themselves to correct
deficiencies in law, regulation, and practice that aggravate the risk associated with the
international correspondent banking business. In response to these efforts, seven of the 15
NCCTs - the Bahamas, the Cayman Islands, the Cook Islands, Israel, Liechtenstein, and Panama
-- have already enacted most, if not all, of the legislative or regulatory changes necessary to bring
their systems into line with international standards. These jurisdictions are now developing and
discussing with the FATF specific plans to implement these changes, and we are working on a
timetable that will allow jurisdictions that have taken appropriate remedial measures to be delisted at the earliest possible time.
Not only has the NCCT list and the FinCEN advisories prompted movement within the NCCTs;
they have also increased the quantity and quality of suspicious activity reports ("SARs") filed by
U. S. financial institutions. The Financial Crimes Enforcement Network has embarked upon an
analysis of the SAR filings related to the 15 NCCTs. The findings from their work will be
incorporated into the second Review of SAR filings that the interagency community expects to
publish jointly with the American Bankers' Association in April. The report will show, among
other things, that since the issuance of the advisories last July through November 2000, U.S.
financial institutions (including foreign banks operating in the U.S.) roughly doubled the rate of
filing of SARs for most NCCTs. Preliminary analysis of December 2000 SARs confirms this
trend. The majority of these filings describe wire transfer activity either to or from the country in
question. Dollar amounts involving wire transfer activity tend to be high - frequently in the
millions of dollars. The remaining SARs describe, for the most part, structuring of cash and
monetary instrument transactions involving money orders, travelers checks and cashiers checks.
In most instances, financial institutions in the U.S. are a link in a chain of international
transactions as opposed to the originating or end point in the movement of suspicious funds.
Although further FinCEN analysis is needed with respect to the NCCT SARs, it is apparent that
international correspondent account activity of the type discussed in the PSI Report has been and
continues to be noted. Such correspondent account activity was also identified in a separate study
of domestic U.S. shell company activity that was summarized last fall in the initial issue of the
SAR Activity Review - Trends, Tips and Issues. The challenge we now face is to make effective
use of this SAR information both in investigations and in providing feedback to the financial
services community.
I want to emphasize that the FATF NCCT project, and our domestic support for it, are works in
progress. The FATF has embarked upon a second round of review, and should be in a position to
list additional jurisdictions in June. As I have indicated, we are also actively involved in helping
listed jurisdictions respond to the concerns identified by the FATF, and many are working
effectively to do so. But some, unfortunately, have shown little progress. The FATF has
indicated its special concern about the relative lack of progress in the Russian Federation,
Lebanon, the Philippines, and Nauru. Each has its own particular obstacles to address, but the
international community is expecting a positive response to the concerns identified. The FATF is
planning in June to reach a decision with respect to countermeasures for those jurisdictions,
identified as non-cooperative in June 2000, which have not made adequate progress. Secretary
O'Neill attended his first meeting with his G-7 counterparts in Palermo two weeks ago, where the
ministers confirmed their support for countermeasures, as appropriate.
Finally, it is important to recognize that the FATF work on NCCTs is taking place in a broad
context of initiatives to protect against abuse of the international financial system. The OECD is
working to ensure transparency and information sharing on fiscal matters, and the Financial
Stability Forum has identified the need for improved supervision in a number of offshore centers.
We are working within the G-7 to ensure that the true originators are identified on all funds
transfer payment orders, and we have also seen progress toward a consensus that financial
institutions should apply enhanced due diligence in private banking relationships with foreign
officials.
Next Steps
By statute, the National Money Laundering Strategy is due to the Congress each year on
February 1. This year, we have asked for an extension of the deadline until April!. As we work
to meet that deadline, we look forward to continuing a cooperative effort in pursuit of our
common goal - preventing criminals from realizing the proceeds of their crimes.
The Minority Staff Report raises a number of important issues that deserve careful consideration.
As we consider what, if any, additional measures may be necessary to reduce the risk of abuse in
this area, it will be important to ensure that such measures do not interfere with legitimate
commerce and international trade finance, or put our institutions at a competitive disadvantage in
the global marketplace. The Treasury Department is committed to work with the Congress to
ensure that we have all the necessary tools to combat money laundering. We will carefully
evaluate the various legislative proposals that have been put forward in this area. In doing so, we
will consult with the interagency community and financial institutions, and seek to balance the
legitimate interests oflaw enforcement with the equally legitimate concerns about privacy and
regulatory burdens.
Meanwhile, we will continue to pursue the productive path of the FATF NCCT project, to
identify and then work with countries to correct serious, systemic deficiencies in anti-money
laundering regimes. And we will be prepared, as necessary, to implement countermeasures with
respect to countries that make inadequate progress to address the concerns identified by the
international community.
We will also take the work of the Subcommittee into consideration in the context of the review
of the FATF 40 recommendations, specifically in the context of the effort to elaborate best
practices for customer identification.
Conclusion
In closing, I again would like to thank the Subcommittee and its staff for its work in this area.
The Minority Staff Report explores an important area. Law enforcement is all too accustomed to
encountering obstacles to international investigations. It is troubling for all of us to encounter
case histories where foreign financial institutions are actively facilitating financial crimes.
At the same time, it is clear that international correspondent banking is the underpinning of the
global financial system, and U.S. banks are already subject to extensive obligations and
regulatory oversight to protect against money laundering. As we prepare the 2001 National
Money Laundering Strategy, we will take into serious consideration the results of this hearing,
with a particular focus on ways that we can improve our oversight and enforcement of existing
laws and regulations.
Thank you again for the opportunity to appear before you today. I will be happy to answer any
questions you might have.
Search \ Email \ Treasury Home Page \ Sitemap
u~PARTMENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
March 6, 2001
Contact: Public Affairs
(202) 622-2960
O'Neill Announces Nichols as Deputy Assistant Secretary for Public Affairs
Treasury Secretary Paul O'Neill today announced that Robert Nichols will join the Department
of the Treasury as Deputy Assistant Secretary for Public Affairs on March 7,2001.
"Rob brings an extensive public affairs background to the Treasury," said O'Neill. "Rob will play
a critical role in communicating and articulating the President's goals for a prosperous nation and
a vibrant global economy."
Prior to joining the Treasury Department, Nichols was Director of Communications for the
Electronic Industries Alliance (EIA) a high-tech trade association based in Arlington, Virginia.
Before joining EIA, Nichols was Communications Director for U.S. Senator Slade Gorton (RWA) and Press Secretary for U.S. Representative Jennifer Dunn (R-WA). Originally from
Seattle, WA, Nichols is married to Rebecca Larish and resides in Washington, D.C.
PO-73
Fur press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s. Government Printing OHice:
1998 - 619-559
"bm
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
March 5, 2001
Contact: Peter Hollenbach
(202) 691-3502
BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BOND OWNERS
AFFECTED BY EARTHQUAKES IN WASIDNGTON STATE
The Bureau of Public Debt took action to assist victims damaged by an earthquake in the state of
Washington by expediting the replacement or payment of United States Savings Bonds for
owners in the affected areas. The emergency procedures are effective immediately for paying
agents and owners in those areas in Washington affected by the earthquake. These procedures
will remain in effect through April 30, 2001.
Public Debt's action waives the normal six-month minimum holding period for Series EE and
Series I savings bonds presented to authorized paying agents for redemption by residents of the
affected area. Most financial institutions serve as paying agents for savings bonds.
Washington counties involved are King, Kitsap, Lewis, Mason, Pierce and Thurston. Should
additional counties be declared disaster areas the emergency procedures for savings bonds owners
will go into effect for those areas.
The replacement of bonds lost or destroyed will also be expedited by Public Debt. Bond owners
should complete form PD-1048, available at most financial institutions or by writing the Kansas
City Federal Reserve Bank's Savings Bond Customer Service Department,,925 Grand ;Boulevard,
Kansas City, Missouri 64198; phone (816) 881-2000. This fonn can also be downloaded from
Public Debt's website at: www.publicdebt.treas.gov. Bond owners should include as much
infOlmation as possible about the lost bonds on the form. This information should include how
the bonds were inscribed, social security number, approximate dates of issue, bond
denominations and serial numbers if available. The completed fonn must be certified by a notary
public or an officer of a [manciaI institution. Completed forms should be forwarded to Public
Debt's Savings Bond Operations Office located at 200 Third St., Parkersburg, West Virginia
26106-1328. Bond owners should write the word "DISASTER" on the front of their envelopes,
to help expedite the processing of claims.
000
PA-491
PO-74
http://www.publicdebt.treas.gov
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR RELEASE AT 3:00 PM
March 6, 2001
Contact: Peter Hollenbach
(202) 691-3502
PUBLIC DEBT ANNOUNCES ACTIVITY FOR
SECURITIES IN THE STRIPS PROGRAM FOR FEBRUARY 2001
--
The Bureau of the Public Debt announced activity for the month of February 2001, of securities within the
Separate Trading of Registered Interest and Principal of Securities progr~m (STRIPS).
Dollar Amounts in Thousands
Principal Outstanding
(Eligible Securities)
$2,185,147,195
Held in Unstripped Form
$2,008,494,966
Held in Stripped Fonn
$176,652,229
Reconstituted in February
$13,129,528
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 V of the
Monthly Statement of the Public Debt, entitled "Holdings of Treasury Securities in Stripped Form."
The Strips Table along with the new Monthly Statement of the Public Debt is available on Public Debt's
Internet site at: www.publicdebt.treas.gov.Awide range of information about the public debt and Treasury
securities is also available at the site.
000
PA-492
PO-75
www.publicdebt.treas.gov
-
I AtlLE V HOLDINGS OF TREASURY SECURITIES IN STRIPPED FORM FEBRUARY 28 2001
Loan Description
Treasury Bonds:
CUSIP:
912810DM7
D08
DR6
DU9
DN5
DPO
DS4
DT2
DV7
DW5
DX3
DYl
DZ8
EA2
EBO
EC8
ED6
EE4
EFl
EG9
EH7
EJ3
EKO
EL8
EM6
EN4
EP9
E07
ES3
ETl
EV6
EW4
EX2
EYO
EZ7
FAl
FB9
FE3
FFO
FG8
FJ2
FM5
FP8
Interest Rate:
11-5/8
12
10-314
9-318
11-314
11-114
10-518
9-718
9-114
7-114
7-112
8-314
8-718
9-118
9
8-718
8-118
8-112
8-314
8-3/4
7-718
8-1/8
8-118
8
7-114
7-518
7-118
6-114
7-112
7-5/8
6-718
6
6-3/4
6-112
6-5/8
6-318
6-118
5-112
5-1/4
5-114
6-1/8
6-114
5-318
Corpus
STRIP
CUSIP
912803 AB9
AD5
AG8
AJ2
912800 AA7
912803 AAl
AC7
AE3
AFO
AH6
AK9
AL7
AM5
AN3
AP8
A06
AR4
AS2
ATO
AU7
AV5
AW3
AXl
AY9
AZ6
BAO
BB8
BC6
BD4
BE2
BF9
BG7
BH5
BJl
BK8
Bl6
BM4
BP7
BV4
BW2
CG6
CH4
CK7
Amount Outstandinq in Thousands
Maturity Date
Total
Outstandinq
11115104
05/15105
08115105
02115106
11115114
02115115
08115115
11115115
02115116
05115/16
11115116
05115117
08115117
05115/18
11/15118
02115119
08115119
02115120
05115120
08115120
02115/21
05115121
08115121
11115121
08115/22
11115122
02115123
08115123
11115124
02115/25
08115125
02/15126
08115126
11115126
02115127
08115/27
11115127
08115/28
11115128
02115129
08115129
05115130
02115131
Total Treasury Bonds . .......
Treasury Inflation-Indexed Notes:
CUSIP:
Series: Interest Rate:
9128273A8
J
3-518
A
2M3
3-318
3T7
A
3-518
A
4Y5
3-718
5W8
A
4-114
6R8
A
3-112
912820 BZ9
BV8
CL9
DN4
EK9
GA9
07/15102
01115107
01115108
01115109
01115110
01115111
Total Inflation-Indexed Notes ...... ........
Treasury Inflation-Indexed Bonds:
CUSIP:
Interest Rate:
912810 FD5
3-518
FH6
3-7/8
Total Inflation-Indexed Bonds ......
912803 BN2
CF8
04115/28
04115129
Portion Held in
Un stripped Form
Reconstituted
This Month
Portion Held in
Stripped Form
8,301,806
4,260,758
9,269,713
4,755,916
6,005,584
11,350,799
5,105,916
5,890,859
6,347,754
18,823,551
18,824,448
16,621,669
12,674,358
7,217,439
7,639,470
16,761,298
19,435,932
9,918,268
8,373,783
18,872,306
10,414,573
10,718,788
10,683,482
31,731,194
10,288,790
8,584,626
17,344,061
22,669,044
10,159,162
11,126,170
11,878,207
12,837,916
10,458,418
11,453,177
10,251,071
10,395,756
22,461,339
11,776,201
10,947,052
11,350,341
11,178,580
17,043,162
10,886,993
4,665,006
1,856,308
5,918,513
4,668,876
2,033,584
6,243,439
3,381,436
3,388,459
5,985,354
18,710,751
17,533,968
10,319,429
10,410,358
3,273,439
3,135,470
11,063,698
18,297,692
8,314,668
3,451,383
9,431,186
9,648,173
6,389,828
9,408,922
14,609,619
9,287,190
3,795,826
9,998,461
19,150,100
3,712,362
3,111,770
7,702,527
11,442,916
7,189,618
6,757,977
6,689,471
9,054,956
15,581,339
11,227,401
10,599,052
10,981,541
11,112,980
17,030,746
10,886,993
3,636,800
2,404,450
3,351,200
87,040
3,972,000
5,107,360
1,724,480
2,502,400
362,400
112,800
1,290,480
6,302,240
2,264,000
3,944,000
4,504,000
5,697,600
1,138,240
1,603,600
4,922,400
9,441,120
766,400
4,328,960
1,274,560
17,121,575
1,001,600
4,788,800
7,345,600
3,518,944
6,446,800
8,014,400
4,175,680
1,395,000
3,268,800
4,695,200
3,561,600
1,340,800
6,880,000
548,800
348,000
368,800
65,600
12,416
0
288,000
23,000
460,800
0
56,800
498,240
203,200
260,800
414,400
903,200
282,000
916,320
336,000
257,600
137,000
664,000
257,920
158,400
308,640
771,040
217,600
184,000
145,920
1,608,400
136,800
43,200
382,400
362,688
491,280
241,600
217,280
209,900
307,200
64,000
352,000
113,600
323,200
75,200
145,600
25,600
3,200
0
0
523,089,730
377,452,785
145,636,945
12,848,028
18,271,553
17,306,349
18,107,048
16,872,443
11,708,480
6,001,095
18,271,553
17,306,349
17,999,342
16,872,443
11,708,480
6,001,095
0
0
107,706
0
0
0
0
0
0
0
a
a
88,266,968
88,159,262
107,706
0
18,082,897
20,875,058
18,082,897
20,775,058
100,000
a
38,957,955
38,857,955
100,000
0
a
0
NGS OF TREASURY SECURITIES IN STRIPPED FORM, FEBRUARY 28, 2001 -- Continued
Corpus
STRIP
CUSIP
loan Description
Treasury Notes:
CUSIP:
Series: Interest Rate:
6-318
G
912827 X49
4-718
W
500
6-114
X64
H
5E8
X
5
A85
8
8
5-5/8
4E9
T
6-112
J
Y22
Y
5-114
5H1
Y48
K
6-5/8
5J7
Z
5-314
Y71
l
6-5/8
5-112
512
A8
7-7/8
892
C
M
6-1/2
Z39
5P3
5-112
AC
Z54
N
6-3/8
5-5/8
501
AD
P
6-1/4
Z88
AE
5-718
5R9
7-112
025
0
5-7/8
2C5
0
6-1/8
2E1
R
2G6
C
6-1/4
5X6
R
6-3/8
6-114
215
0
6-112
6A5
S
2P6
E
6-5/8
683
T
6-112
2S0
F
6-5/8
6-3/8
6C1
U
F49
A
7-1/2
2W1
G
6-112
6E7
V
6-5/8
2Y7
H
6-114
6F4
6-3/8
W
3C4
K
6
6-1/4
6HO
X
6-3/8
G55
8
6-114
3G5
l
6-118
6K3
Y
5-7/8
3J9
M
611
Z
6
314
N
5-3/4
P
5-3/4
303
AC
6P2
5-5/8
5-5/8
3S9
0
600
AD
5-1/8
5-1/2
3V2
C
l
4-3/4
6S6
J78
A
6-1/4
3Z3
0
5-112
M
4-5/8
6U1
5-1/2
485
E
401
F
5-3/4
4H2
G
5-112
H
4K5
5-3/8
5-3/4
l83
8
5-1/4
4N9
J
4-1/4
4U3
K
A
5-7/8
N81
4-3/4
5A6
E
7-114
P89
8
5F5
F
5-1/4
7-1/4
088
C
5MO
G
6
7-7/8
R87
0
5S7
H
5-7/8
7-1/2
S86
A
6-1/2
T85
8
6-3/4
609
E
6-1/2
U83
C
5-7/8
V82
0
F
5-3/4
6N7
A
W81
5-5/8
6-7/8
X80
8
7
Y55
C
0
6-112
Z62
6-1/4
2JO
8
6-5/8
2U5
C
6-1/8
3EO
0
5-1/2
3X8
8
5-5/8
4F6
C
4-3/4
4V1
0
5-1/2
8
5G3
6
5N8
C
6-112
B
5Z1
5-3/4
C
6J6
5
6T4
8
Total Treasury Notes ... ....
912820 FB8
OS3
FC6
DT1
8A4
CX3
F04
OW4
FE2
DX2
FF9
OYO
8B2
FG7
EB9
FH5
EC7
FJ1
ED5
8CO
EG8
EJ2
FK8
El7
Fl6
EN3
FM4
EP8
FN2
E06
808
FP7
ES2
F05
ETO
FR3
EU7
8E6
FS1
FU6
CC9
FV4
CE5
CH8
FY8
CK1
FZ5
CN5
GB7
8F3
CS4
G03
CU9
CW5
OA2
DC8
8G1
DE4
OJ3
8H9
DOl
8J5
OU8
8K2
DZ7
810
EE3
8M8
8N6
ER4
8P1
809
FXO
BR7
8S5
8T3
8UO
BW6
8X4
CA3
CQ8
CY1
OKO
OV6
EA1
EM5
FT9
GC5
. ....
Grand Total.. .. .........................
..........
Amount Outstanding in Thousands
Maturity Date
Total
Outstanding
03131101
03/31/01
04130/01
04130101
05/15/01
05115/01
05/31/01
05/31/01
06130101
06/30/01
07131/01
07/31/01
08115/01
08131/01
08/31/01
09130101
09130/01
10131/01
10/31101
11/15/01
11130/01
12131101
01131/02
01131102
02/28102
02128102
03131/02
03/31102
04130/02
04130/02
05115/02
05/31102
05131/02
06/30102
06130/02
07/31/02
07131/02
08115102
08/31/02
08/31/02
09130/02
09/30102
10131/02
11130102
11130/02
12131/02
12131/02
01131/03
01131/03
02115/03
02128/03
02128103
03131/03
04130103
05/31/03
06130/03
08115/03
08115/03
11115/03
02115/04
02115/04
05115/04
05115/04
08115/04
08115/04
11115/04
11115/04
02115105
05115/05
05115/05
08115/05
11115/05
11115/05
02115/06
05115/06
07/15/06
10/15106
02115/07
05115/07
08115107
02115/08
05115/08
11115/08
05115/09
08/15/09
02/15/10
08115/10
02/15/11
Portion Held in
Un stripped Form
Portion Held in
Stripped Form
Reconstituted
This Month 18
14,180,740
21,605,352
13,780,470
21,033,523
12,398,083
12,873,752
13,721,702
19,885,985
14,282,240
19,001,309
14,136,833
20,541,318
12,339,185
14,000,224
20,118,595
14,518,514
18,797,828
14,639,843
19,196,002
24,226,102
33,504,627
31,166,321
13,453,346
19,381,251
13,799,902
16,563,375
14,301,310
17,237,943
14,474,673
17,390,900
11,714,397
13,503,890
14,871,823
13,058,694
14,320,609
12,231,057
15,057,900
23,859,015
12,731,742
15,072,214
12.806,814
15,144,115
26,593,882
12,120,580
15,058,723
12,052,433
14,821,852
13,1"00.640
15,452,421
23,562.691
13,670,354
14.686.746
14,172,892
12,573,248
13,132.243
13,126,779
28.011.028
19,852,263
18,625,785
12,955,077
17,823,228
14,440,372
18,925,383
13,346,467
18,089,806
14,373,760
32,658,145
13,834,754
14,739,504
28,562,370
15,002.580
15,209,920
28,083,841
15,513,587
16,015,475
22,740,446
22,459,675
13.103,678
13,958,186
25,636,803
13,583,412
27,190,961
25,083,125
14,794,790
27,399,894
23,355,709
22,437,594
11,975,922
14,180,740
21,579,752
13,780,470
21,031,123
7,058,733
12,873,752
13,721,702
19,785,985
14,282,240
18,996,509
14,136,833
20,083,318
7,391,985
14,000,224
20,118,595
14,518,514
18,297,028
14,639,843
19,194,402
19,283,062
33,504,627
31,087,921
13,453,346
19,381,251
13,799,902
16,533,375
14,301,310
17,235,543
14,474,673
17,390,900
7,745,037
13,503,890
14,871,823
13,058,694
14,319,009
12,231,057
15,057,900
20.961,415
12,731,742
15,072,214
12,768,414
15,144,115
26,534,682
11.838.980
14,995,683
11,862,033
14,821.852
13,100.640
15,452,421
22.543,235
13,626,354
14.686,746
14.172,092
12,573,248
13.132.243
13.125.179
26,893,428
19,742,663
18.284,985
12,609,477
17,797,628
14.067,572
18,925,383
11,965,667
18,089,806
14,368,960
32,658,145
13,435,074
14,739,104
28,562,370
15.002.580
14,838,720
28,083,841
15,493.107
15,736,435
22,740,446
22,459,675
12,998,046
13,801,386
25,232,003
13,571,012
27,098,161
25,011.925
14,789,190
27,399,794
23.166.509
22,437,594
11,975,922
0
25,600
0
2,400
5,339,350
0
0
100,000
0
4,800
0
458,000
4,947,200
0
0
0
500,800
0
1,600
4,943,040
0
78,400
0
0
0
30,000
0
2,400
0
0
3,969,360
0
0
0
1.600
0
0
2.897,600
0
0
38,400
0
59,200
281,600
63,040
190,400
0
0
0
1,019,456
44,000
0
800
0
0
1.600
1.117,600
109,600
340,800
345,600
25,600
372,800
0
1,380,800
0
4,800
0
399,680
400
0
0
371,200
0
20,480
279,040
0
0
105,632
156,800
404,800
12,400
92,800
71,200
5,600
100
189,200
0
0
0
0
0
0
90,300
0
0
0
0
0
0
0
19,200
0
0
0
0
0
0
23,200
0
0
0
0
0
0
0
0
0
0
15,200
0
0
0
0
0
0
27,200
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3,200
0
14,400
41,600
0
0
0
17,600
0
0
0
0
0
0
0
1,600
0
0
0
0
0
16,800
3,200
6,400
0
0
0
0
0
1,600
1.534,832.542
1,504,024,964
30.807,578
281,500
2,185,147,195
2,008.494,966
176,652,229
13.129,528
0
0
u.s. International Reserve Position
The Treasury Department today released U.S. reserve assets data for the week ending March 2, 2001. As indicated
in this table, U.S. reserve assets totaled $67,100 million as of March 2, 2001, up from $66,907 million as of
February 23,2001.
(in US millions)
Februarv 23 12001
66,907
I. Official U.S. Reserve Assets
TOTAL
1. Foreign Currency Reserves
a~ Securities
1
I
Euro
5,378
Yen
10,913
March 21 2001
67,100
TOTAL
Euro
16,291
5,536
Yen
TOTAL
10,648
16,184
0
0
Of which, issuer headquartered in the U. S.
b. Total deposits with:
bJ. Other central banks and BIS
b.ii. Banks headquartered in the U.S.
9,095
5,341
14,436
9,348
5,210
14,559
0
0
b.iL Of which, banks located abroad
0
0
b.iii. Banks headquartered outside the U.S.
0
0
0
0
14,559
14,661
3. Special Drawing Rights (SDRs) 2
10,576
10,650
4. Gold Stock
11,046
11,046
0
0
b.iii. Of which, banks located in the U.S.
2: IMFReserve Position
5~
2
3
Other Reserve Assets
11
Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
deposits reflec[ carrying values.
21 The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRldollar exchange rate for the reporting date. The IMF data for February 23 are final. The entries in the table
above for March 2 (shown in italiCS) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF
data.
31 Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of January 31, 2000. The December 31, 2000 value
was $11,046 million.
PO-76
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
February 23, 2001
1. Foreign currency loans and securities
March 2, 2001
o
o
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
February 23, 2001
1. Contingent liabilities in foreign currency
1.a: Collateral guarantees on debt due within
March 2. 2001
o
o
o
o
o
o
1 year
1,b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the u,.S.
3.e. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long pOSitions
4.b.1. Bought calls
4.b.2. Written puts
o
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
OR IMMEDIATE RELEASE
arch OS, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
91-Day Bill
March 08, 2001
June 07, 2001
912795GKI
High Rate:
4.700%
Investment Rate 1/:
4.822%
Price:
98.812
All noncompetitive and successful competitive bidders were awarded
at the high rate.
Tenders at the high discount rate were
.lotted 40%. All tenders at lower rates were accepted in full.
~curities
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
28,380,044
1,346,060
193,000
$
29,919,104
Federal Reserve
TOTAL
Accepted
10,010,004 2/
5,390,746
$
35,309,850
8,470,944
1,346,060
193,000
5,390,746
$
15,400,750
Median rate
4.690%: 50% of the amount of accepted competitive tenders
s tendered at or below that rate. Low rate
4.670%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
i-to-Cover Ratio
= 29,919,104 / 10,010,004 = 2.99
Equivalent coupon-issue yield.
Awards to TREASURY DIRECT = $1,085,598,000
http://www .publicdebUreas.gov
'0-77
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
IMMEDIATE RELEASE
1arch 05, 2001
~OR
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
March 08, 2001
September 06, 2001
912795HN4
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.530%
High Rate:
Investment Rate 1/:
4.700%
Price:
97.710
All noncompetitive and successful competitive bidders were awarded
ecurities at the high rate. Tenders at the high discount rate were
llotted 45%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Competitive
Noncompetitive
FlMA (noncompetitive)
$
SUBTOTAL
.8
$
23,368,057
Federal Reserve
TOTAL
22,221,883
1,121,174
25,000
Accepted
10,003,707 2/
5,384,615
$
28,752,672
8,857,533
1,121,174
25,000
5,384,615
$
15,388,322
Median rate
4.510%: 50% of the amount of accepted competitive tenders
tendered at or below that rate. Low rate
4.480%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
d-to-Cover Ratio
= 23,368,057 / 10,003,707
= 2.34
Equivalent coupon-issue yield.
Awards to TREASURY DIRECT = $843,801,000
http://www .publicdebt.treas.gov
?O-78
NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
Contact: Tara Bradshaw
(202) 622-2960
For Immediate Release
March 8, 2001
Treasury Releases Distribution Table for the President's Tax Relief Plan
Attached is a table prepared by the Department of the Treasury that shows the
distributional effects of the major individual income tax provisions in the President's proposal.
The effects are shown for the proposal with all provisions fully phased in.
The share of income tax relief provided to families with incomes under $100,000 is larger
than their share of current income taxes paid (compare the first and second columns.) As a
result these families will pay a smaller share of the total income tax burden under the President's
proposal than they do under current law.
Conversely, the share of the income tax relief provided to families with incomes of
5100,000 or more is smaller than their share of current income taxes paid. As a result, these
families will pay a larger share of the total income tax burden under the President's proposal than
they do under current law.
The table also presents the average indi\'idual income taxes paid for the representative
income groups under the President's plan. Those in the lowest income group (under $30,000)
will on a\'erage receive 5457 and those in the second lowest income group will pay an average
5993. Those earning over S200,000 will on average pay approximately $ 104,000 in income
taxes.
--30PO-79
For press releases, speeches, public schedules and official biographies, call our 24~our fax line at (202) 622-2040
'U S Government Printing Office 1998, 619-559
Major Individual Income Tax Provisions of the President's Tax Proposal'
(2000 Income Levels)
Average
Distribution of
Proposed
Changes in
Individual Income Taxes
3
Cash
Individual
Current
With Proposed
Income
Income Taxes
Law
Changes
(%)
(%)
(%)
Class
2
Individual
Percent Change
Income Taxes
in Individual
With Proposed
Income
Changes
Taxes
($)
(%)
Distribution of Total
4
0-30
9.3
-10
-2.8
-457
-136.2
30 - 40
65
2.5
1.8
993
-383
40 - 50
78
41
3.4
2,210
-28.0
50 - 75
172
122
11.3
4,279
-20.8
75 - 100
13.6
12.2
12.0
7,848
-16.3
100 - 200
19.8
271
28.3
16,625
-10.7
200 & over
254
42.9
45.9
103,931
-8.7
TotalS
1000
1000
100.0
6,322
-14.6
Department of the Treasury
March 8, 2001
Office of Tax AnalysIs
, The major Individual Income tax provIsions are i) lower individual Income tax rates (lower 39.6 and 36 percent rates to 33 percent, lower 31 and
28 percent rates to 25 percent, and introduce a new 10 percent rate bracket for taxable income (In 2006) under $6,000 for single filers, $10,000 for
head of household filers, and $12,000 for JOint filers), ii) Increase the child credit to $1,000, raise the income level at which it phases out, and allow
the child credit against the AMT; iii) allow a 10% deduction for the earnings of the lower earning spouse (up to $30,000) in two-earner families; iv)
allow taxpayers who do not itemize to deduct charitable contributions up to the amount of the taxpayer's standard deduction; and v) provide a
refundable tax credit for indiVidually-purchased health insurance
- Cash Income consists of wages and salaries, net Income from a bUSiness or farm, taxable and tax-exempt interest, dividends, rental income,
realized capital gains, cash transfers from the government, and retirement benefits Employer contributions for payroll taxes and the federal
corporate Income tax are added to place cash on a pre-lax baSIS Cash Income IS shown on a family rather than on a tax relurn baSIS. The cash
incomes of all members of a family are added to arnve at a family's cash Income used in the distributions.
3 The refundable portIons of the earned Income tax credit (EITC) and the child credit are Included in the Individual Income tax. Federal taxes are
estimated at 2000 Income levels but assuming fully phased In law and, therefore, exclude provIsions thaI expire proor to the end of the Budget
perood and are adlusted for the effects of unlndexed parameters
The change In Federal taxes IS estimated at 2000 Income levels assuming fully phased In law
Famliles With negative Incomes are excluded from the lowest Income class but Included in the total line
OFFICE OF PUBLIC AFFAIRS e 1500 PENNSYLVANIA AVENUE, N. W.• WASHINGTON, D.C.e 20220 e (202) 622.2960
CONTACT:
EMBARGOED UNTIL 2:30 P.M.
March 8, 2001
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction two series of Treasury bills totaling
approximately $19,000 million to refund $46,369 million of publicly held
securities maturing March 15, 2001, and to pay down about $27,369 million.
The amount of maturing publicly held securities includes the 13-day cash
management bills issued March 2, 2001, in the amount of $26,027 million.
In addition to the public holdings, Federal Reserve Banks for their own
accounts hold $9,526 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders. Amounts awarded
to these accounts will be in addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of each
auction. These noncompetitive bids will have a limit of $200 million per
account and will be accepted in the order of smallest to largest, up to the
aggregate award limit of $1,000 million.
TreasuryDirect customers have requested that we reinvest their maturing
holdings of approximately $1,025 million into the 13-week bill and $1,161
million into the 26-week bill.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) .
Details about each of the new securities are given in the attached
offering highlights.
000
Attachment
PO-SO
For press releases, speeches, public schedules and official biographies, call our 24-IIour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO'BE ISSUED MARCH 15, 2001
March 8, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . . . . . $10,000 million
Description of Offering:
Term and type of security . . . . . . . . . . . . . . . 91-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912795 GL 9
Auction date . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 12, 2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 15, 2001
Maturity date . . . . . . . . . . . . . . . . . . . . . . . . . . . June 14, 2001
Original issue date . . . . . . . . . . . . . . . . . . . . . December 14, 2000
Currently outstanding . . . . . . . . . . . . . . . . . . . $14,567 million
Minimum bid amount and multiples ........ $1,000
$9,000 million
182-day bill
912795 GR 6
March 12, 2001
March 15, 2001
September 13, 2001
March 15, 2001
$1,000
The following rules apply to all securities mentioned above;
Submission of Bids;
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FlMA) bids: Noncompetitive bids submitted
through the Federal Reserve Banks as agents for FlMA accounts. Accepted in order of size
from smallest to largest with no mor~ than $200 million awarded per account.
The total
noncompetitive amount awarded to Federal Reserve Banks as agents for FlMA accounts will
not exceed $1,000 million. A single bid that would cause the limit to be exceeded will
be partially accepted in the amount that brings the aggregate award total to the $1,000
million limit. However, if there are two or more bids of equal amounts that would cause
the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g.,
7.100%, 7.105%.
(2) Net long position for each bidder must be reported when the sum of the total bid amount,
at all discount rates, and the net long position is $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the closing time for
receipt of competitive tenders.
Maximum Recognized Bid at a Single Rate .... 35% of public offering
Maximum Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% of public offering
Receipt of Tenders:
Noncompetitive tenders ... Prior to 12:00 noon eastern standard time on auction day
competitive tenders ...... Prior to 1;00 p.m. eastern standard time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment
of full par amount with tender. TreasuryDirect customers can use the Pay Direct feature which
authorizes a charge to their account of record at their financial institution on issue date.
,
V
r, Y A J:{
'I' lVl E N T
() F 'T H E
fO
T REA SUR Y
- :
~
"
NEWS
OFFICE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
March 8, 2001
CONTACT: Tara Bradshaw
(202) 622-2960
MARK A. WEINBERGER CONFIRMED ASSISTANT SECRETARY
OF THE TREASURY FOR TAX POLICY
Mark A. Weinberger was sworn in today to be the Assistant Secretary of the Treasury (Tax
Policy). He was confirmed by the United States Senate March 1. Mr. Weinberger has extensive
public and private sector experience in tax and Federal budget issues.
Weinberger most recently served as the Director ofEmst & Young LLP's U.S. National Tax
Practice where he was responsible for overseeing the development of technical, legislative and
regulatory guidance for the firm's tax practice. Prior to that, Mr. Weinberger co-founded a law
firm based in Washington, D.C. called Washington Counsel, P.C. which merged into Ernst &
Young in May 2000.
Weinberger previously served as Chief of Staff and Counsel to the President's 1994 Bipartisan
Commission on Entitlement and Tax Reform. He also served as a senior advisor to the Kemp
Commission and as a Commissioner on the National Commission on Retirement Policy.
Mr. Weinberger was appointed by President Clinton.,. and confirmed by the Senate - last year to
serve on the Social Security Advisory Board. The Board advises the President, Congress and the
Social Security Commissioner on a:11 aspects of the program.
As Assistant Secretary for Tax Policy, Weinberger has supervisory responsibility for providing
the Secretary of the Treasury with policy analysis, advice and recommendations relating to all
aspects of domestic and international issues of Federal taxation, including all legislative
proposals, regulatory guidance, and tax treaties. The Assistant Secretary for Tax Policy is also
responsible for providing the official estimates of all Government receipts for the President's
budget, fiscal policy decisions, and Treasury cash management decisions.
A graduate of Emory University, Weinberger holds a Master's degree in Business Administration
and a law degree from Case Western Reserve University, as well as an LL.M in Taxation from
Georgetown University Law Center.
Mr. Weinberger lives in Gaithersburg, Maryland with his wife Nancy and children Rachel, Noah,
Sean and Benjamin.
PO-81
for press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-204-0
Ii'-
,
~
...., A
"
I
U EPA R T lVl E N T
0 F
THE
~
~.
T REA SUR Y
,
,
NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
Contact: Tara Bradshaw
(202) 622-2960
FOR Th1MEDIATE RELEASE
March 8, 2001
,
O'NEILL STATEMENT ON THE HOUSE PASSAGE OF THE TAX RELIEF BILL
Treasury Secretary PaulO 'Neill made the following statement upon passage by the
House of Representatives of H.R. 3, the Economic Growth and Tax Relief Act of 2001:
"Today's passage of the President's tax bill moves us one step closer to allowing
hardworking American families to keep more of their own money. When this bil1 is passed and
signed into law, the average American family will have an additional $1,600 to use for
education, buying a house or saving for retirement. It is time for Washington to return the tax
overpayment to the people who sent it in. I'm very delighted the House of Representatives
moved to reduce income tax rates. Now we are 51 votes away from making tax relief a reality."
-30PO-82
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
'
DEPARTlVIENT
OF
THE
TREASURY'
NEWS
omCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C.• 20220 • (202) 622-2960
FOR IMMEDIATE RELEASE
March 9, 2001
Contact: Tara Bradshaw
(202) 622-2960
JOHN M. DUNCAN SWORN IN AS TREASURY ASSISTANT SECRETARY
FOR LEGISLATIVE AFFAIRS
John M. Duncan was sworn in Tuesday night to be the Treasury Assistant Secretary for
Legislative Affairs by Treasury Secretary Paul O'Neill. He was confirmed by the United States
Senate on February 28. Duncan brings to the position more than 25 years of Capitol Hill
expenence.
Duncan served as the Chief of Staff and Legislative Director for U.S. Senator William V.
Roth, Jr. from 1985 until January 2, 2001. Duncan provided political and managerial guidance on
major legislative initiatives that passed under Roth's Chairmanship of the Senate Finance
Committee, including welfare reform, tax cuts, pension reform, elimination of the marriage
penalty, reducing capital gains taxes, IRS reform, and. trade expansion. From 1984 to 1985, he
served as the Majority Staff Director for the U.S. Senate Committee on Governmental Affairs for
Chairman Roth.
From 1978 to 1984 he served as the Minority Staff Director for the House Committee on
Government Operations for Ranking Republican Member Frank Horton. He began his Capitol
Hill career as a Professional Staff Member for the Subcommittee on Intergovernmental Relations
and Human Resources of the House Committee on Governmental Operations, where he worked
for Ranking Republican Member John W. Wydler.
In the private sector, Duncan worked for CNA Financial Corporation and Continental
Casualty Company. He also served in the U.S Army Reserves and the American Peace Corps.
He holds a B.S. in Industrial Administration from the University of Illinois and a Masters
Degree from the New School University.
Duncan and his wife Marcia have one son.
PO- 83
DEPARTMENT
OF
THE
TREASURY
NEWS
omCE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 2 P.M. EST
Test as prepared for Deliver
March 13, 2001
Contact: Tony Fratto
(202) 622-2960
TESTIMONY OF TREASURY ACTING UNDER SECRETARY DONALD V.
HAMMOND BEFORE THE SUBCOMMITTEE ON FINANCIAL INSTITUTIONS AND
CONSUMER CREDIT OF THE COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
Chairman Bachus, Ms. Waters, and Members of the Subcommittee, I appreciate this
opportunity to present the Treasury Department's views on repealing prohibitions on the
payment of interest on business checking accounts, and on permitting the payment of interest on
reserve balances that depository institutions maintain at the Federal Reserve. The Treasury
Department supports permitting banks and thrifts to pay interest on business deposits. While
sympathetic to many of the arguments in favor of permitting the Federal Reserve to pay interest
on reserve account balances, we are not prepared to endorse this proposal at this time.
Paying Interest on Demand Deposits
The Treasury Department has consistently supported provisions repealing the prohibition
on paying interest on demand deposits. Such provisions have in the past been included in broader
regulatory burden relief legislation or proposed on a stand-alone basis, such as H.R. 4067, which
passed the full House of Representatives last year. Repeal of this prohibition would eliminate a
needless government control on the price that banks may pay for business deposits, consistent
with the earlier elimination of Regulation Q rate ceilings on other deposits. The result should be
more efficient resource allocation. By earning a positive return on their transaction balances,
small businesses especially should benefit from the repeal of the prohibition. Larger firms have
been better able to offset the lack of interest on checking account funds by using sweep accounts
to earn interest or by obtaining price concessions on other bank products.
PO-84
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
Most proposals that would have allowed banks and thrifts to pay interest on demand
deposits would have delayed repeal of the current prohibition for a number of years, and
provided for transitional mechanisms. The Treasury Department continues to prefer a relatively
quick repeal of the prohibition on paying interest on demand deposits, obviating the need for
special transitional arrangements.
Permitting the Federal Reserve to Pay Interest on Reserve Balances
Background
The Federal Reserve Act requires depository institutions to maintain reserves against
certain of their deposit liabilities. The first $5.5 million of an institution's transaction accounts
are currently exempt from reserve requirements. Transaction balances between that level and
$42.8 million are subject to a 3 percent reserve requirement. The Federal Reserve prescribes a
10 percent requirement on balances above that amount, within a statutorily prescribed range of 8
to 14 percent. l Institutions typically meet these reserve requirements through vault cash and a
portion of their reserve balances at a Federal Reserve Bank, known as required reserve balances.
Depository institutions may voluntarily hold reserve balances above the amount necessary to
meet reserve requirements, which are called excess reserves. They may also enter into
agreements with the Federal Reserve to hold certain balances that would cover transactions
cleared through their accounts, called clearing balances. These clearing balances do not count
toward meeting reserve requirements.
Required reserve balances and excess reserves held at the Federal Reserve do not earn
interest. They are therefore sometimes referred to as sterile reserves. Clearing balances earn
implicit interest through the offset of fees for Federal Reserve services.
As of January 2001, depository institution reserve requirements totaled $38.5 billion.
Depository institutions met these requirements with $32.6 billion in vault cash and $5.9 billion in
required reserve balances at Federal Reserve Banks. They also held $1.25 billion in excess
reserves.
I The Federal Reserve may also set reserve requirements on nonpersonal time and savings deposits within a
statutorily set range of zero to 9 percent (currently set at zero), and may prescribe requirements for Eurocurrency
liabilities (currently zero).
2
Since the beginning of the 1990s, required reserve balances at the Federal Reserve Banks
have declined by 83 percent ($5.9 billion currently compared to $34.4 billion at year-end 1989).
Three factors may be primarily responsible for the decline: (1) regulatory actions taken
by the Federal Reserve in the early 1990s reducing reserve requirements, (2) banks' growing use
of new products and technology, such as retail sweep accounts, to minimize required reserves,
and (3) growth in the use of vault cash to meet reserve requirements, as increased ATM usage
has increased the need for such cash. The proportion of reserve requirements met by vault cash
rose from 44 percent in December 1989 to 85 percent in January 200l.
The three principal grounds for paying interest on reserve balances are to: (1) promote
economic efficiency, (2) facilitate monetary policy, and (3) lower costs to the banking industry.
Economic Efficiency
Large banks have long offered "sweep" accounts to their commercial customers arrangements whereby balances in corporate demand deposits are routinely swept into
repurchase agreements, Eurodollar deposits, and money market funds until they are drawn down
by the account holders. Although intended to put otherwise "idle" corporate funds to work
(since these accounts are prohibited by law from earning interest), as a byproduct these
arrangements also reduce the reserve requirements of banks. More recently, the declining cost of
technology has allowed banks to establish new types of sweep arrangements for retail customer
accounts (both interest-earning NOW accounts and retail demand deposits) with the express
purpose of minimizing reserve requirements. This sweeping is often invisible to the customer as
a practical matter.
Permitting the payment of interest on reserve balances might lead to greater economic
efficiency. Banks have expended resources to avoid holding non-interest bearing required
reserve balances. Ifbanks earned interest on these reserve balances, they would be less likely to
expand the use of sweeps and might unwind some existing sweep programs. But the extent of
efficiency gains for banks, their customers, and the economy is highly uncertain. Advances in
technology have lowered the cost of sweep programs. How many sweeps would unwind would
also depend on: (1) whether banks would also be permitted to pay interest on business demand
deposits; (2) what customers would earn on their transaction accounts compared to sweep
instruments; and (3) what banks would earn on reserve balances compared to alternative
investments.
3
Monetary Policy
As you will hear from the Federal Reserve, the decline in required reserve balances could
potentially lead to greater short-term interest rate volatility, although such volatility is not a
serious problem at present. For various reasons, the demand for balances to meet reserve
requirements is more stable than the demand for balances to clear transactions through the
Federal Reserve (Fedwire).
Thus the smaller the required reserve balances, the greater the role that less predictable
daily clearing needs of banks would have in determining the demand for reserves.
This may make it more difficult for the Federal Reserve to supply the amount of
reserves consistent with its federal funds rate target - the short-term, operational target of
monetary policy. As a result, the daily volatility in the federal funds rate could increase. The
Federal Reserve believes that such volatility would impair its ability to use federal funds rate
targeting as a means of implementing monetary policy. Payment of interest on reserve balances
would give banks greater incentives to hold balances at the Federal Reserve. This in tum may
make the demand for reserve balances more stable and lessen the potential volatility of the
federal funds rate.
Banking Industry Costs and Competitiveness
Banks have long contended that the costs of reserve requirements (i.e., forgone earnings)
put them at a competitive disadvantage relative to non-bank competitors that are not subject to
reserve requirements. Securities firms and other competitors offer transaction services through
money market mutual funds and similar arrangements. Yet the forgone earnings that depository
institutions currently incur through reserve requirements must be viewed in the context of their
overall relationship to the federal government, including benefits derived from federal deposit
insurance and access to the Federal Reserve payments system and discount window.
Budget and Taxpayer Issues
The Office of Management and Budget and Congressional Budget Office have in the past
estimated that paying interest on required reserve balances (together with permitting banks to
pay interest on business demand deposits) would cost approximately $600 million to $700
million over 5 years. Both the OMB and CBO estimates take into account the effect on tax
revenues from depository institutions that receive interest. In addition, both project that the
proposal would result in higher required reserve balances, which they estimate would generate
some new earnings for the Federal Reserve and thus new Treasury receipts. Neither of these
effects is enough to completely offset the revenue loss from the payment of interest.
Some proposals have provided for an "offset" to the budget cost by transferring a part of
the Federal Reserve's surplus to the Treasury. It is true that in some previous years budget
accounting rules have permitted the transfer of Federal Reserve surplus funds to the Treasury to
count as receipts that would offset the cost of other programs. Yet, over time, transfers of the
surplus do not result in budget savings.
In transferring a portion of its surplus to the Treasury, the Federal Reserve would reduce
its portfolio of interest-earning assets. This would in tum decrease the Federal Reserve's future
earnings and remittances to the Treasury.
Ther_efore budgetary receipts in the near term would increase only at the expense of
longer-term receipts. Thus using the Federal Reserve surplus as a "pay-for" would not reduce the
taxpayer cost associated with the proposal to pay interest on depository institution reserve
balances maintained at the Federal Reserve.
Conclusion
Congress should act to repeal prohibitions on paying interest on business checking
accounts at banks and thrifts. This would eliminate unnecessary restrictions on these
institutions' ability to serve their commercial customers and would level the playing field
between them and other financial services providers that can compensate businesses for deposits
without similar legal restrictions. Repeal would especially benefit the nation's small businesses.
Proponents of paying interest on reserve balances maintained at the Federal Reserve have
put forth a number of reasons in its favor. The ability to pay interest on these balances may
improve the effectiveness of the tools that the Federal Reserve has to implement monetary
policy.
Financial system efficiency might improve as fewer resources would likely be devoted to
minimizing reserve balances. As a general matter, we are sympathetic to many of the arguments
put forth by proponents of paying interest on reserve balances, particularly with respect to
monetary policy.
At the same time, however, we are also mindful of the budgetary costs associated with
this proposal, which would be significant. The President's Budget does not include the use of
taxpayer resources for this purpose. At this time, then, the Administration is not prepared to
endo:se this proposal.
Thank you for the opportunity to appear before the Subcommittee. I am happy to
respond to any questions.
-30-
5
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
March 12, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
91-Day Bill
March 15, 2001
June 14, 2001
912795GL9
High Rate:
4.520%
Investment Rate 1/:
4.638%
Price:
98.857
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 92%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Accepted
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
23,986,862
1,410,621
6'0,000
$
10,003,887 2/
25,457,483
SUBTOTAL
TOTAL
5,103,719
5,103,719
Federal Reserve
$
30,561,202
8,533,266
1,410,621
60,000
$
15,107,606
Median rate
4.510%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.500%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
25,457,483 / 10,003,887
=
2.54
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,132,700,000
http://www.publicdebt.treas.gov
PO-8S
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
March 12, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
182-Day Bill
March 15, 2001
September 13, 2001
912795GR6
High Rate:
4.420%
4.585%
Investment Rate 1/:
Price:
97.765
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 77%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
19,148,375
$
1,5~,8,769
50,000
9,006,844 2/
20,737,144
SUBTOTAL
7,418,075
1,538,769
50,000
Federal Reserve
TOTAL
$
25,158,944
$
13,428,644
Median rate
4.390%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.350%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
20,737,144 / 9,006,844
=
2.30
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,241,888,000
http://www.publicdebt.treas.gov
PO-86
DEPARTMENT
OF
THE
TREASURY
~~7~9'~. . . . . . . . . . . ._
. . . . . . . . . . . . . .
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
u.s. International Reserve Position
03/14/01
The Treasury Depanment today released U.S. reserve assets data for the week ending March 9,2001. As indicated
in this table, U.S. reserve assets totaled $66,494 millionas of March 9, 2001, down from $66,548 million as of
March 2,2001.
(in US mil/ions)
TOTAL
1. Foreign Currency Reserves
I
1
Euro
5,536
a. Securities
Yen
10,0-+3
b.iii. Banks headquartered outside the U.S.
b.lli. Ofwr,ic:l. banks located in the U.S.
I
2. IMF Reservs Position
Z
3. Special Drawing Rights (SDRs)
~. Gold Stock
3
5. Other Reserve Assets
2
Euro
TOTAL
16,184
5,5:28
Yen
TOTAL
10.590
0
93-+8
5,:":10
,4,559
9,33:2
5,183
,)
:J
C
0
,J
0
'J
14.119
1-+.751
10,.341
;0.66')
11,046
1
,J
deposits reflect carrying values.
2J The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRJdoliar exchange rate for the reporting date. The IMF data for March 2 are final. The entnes In the table above
for March 9 (shown in italics) reflect any necessary adjustments, inclUding revaluation, by the U.S. Treasury to the prior week's IMF data.
31 Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of Janual'j 31, 2000. The December 31, 2000 value
PO-87
14.51+
0
11 includes nolaings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
was $11 ,046 million.
113,118
0
Of whicl7. issuer headquartered in the U. S.
b. Total deposits with:
b.i. Other central banks and BIS
b.ii. Banks headquartered in the U.S.
b.ii. Of which, banks located abroad
Marc!L9. 2001
66,494
March 2. 2001
66,548
I. Official U.S. Reserve Assets
'J' 'I
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
March 2, 2001
1. Foreign currency loans and securities
March 9, 2001
o
o
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.8. Short positions
2.b. Long positions
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
March 2, 2001
1. Contingent liabilities in foreign currency
March 9, 2001
o
o
o
o
o
o
o
o
1.a. Collateral guarantees on debt due within 1 year
i.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.8. With other central banks
3.b. With banks and other financial institutions
headquartered in the U.S.
3. c. With banks and other financial institutions
headquartered outside the U.S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.8. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
ut;PARTMENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C•• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
March 14, 2001
MEDIA ADVISORY
Treasury Secretary Paul O'Neill will host a press conference to release the 2001
Annual Report of the Social Security and Medicare Trustees. The press conference
will take place at 11 :30 a.m. on Monday, March 19 in the Treasury Department's
Diplomatic Reception Room (Room 3311), 1500 Pennsylvania Avenue, NW.
As Trustees, Health & Human Services Secretary Tommy Thompson, Labor Secretary
Elaine Chao, and Social Security Administration Acting Commissioner William Halter
will participate in the press conference.
The room will be available for pre-set at 10:30 a.m. Media without Treasury or White
House press credentials planning to attend should contact Treasury's Office of Public
Affairs at (202) 622-2960 with the following information: name, social security number
and date of birth. This information may also be faxed to (202) 622-1999.
PO-88
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
'U S. Government Pnntmg Orf,C.,. 1998 - 619-559
DEPARTMENT
OF
THE
TREASURY;
_ _ _ _ _ _ _ _"::1
TREASURY
NEWS
=::..._ _ _ _ _ _ __
78
Q
OFFlCE OF PUBUC AFFAIRS • 1500 PE.r\NSnXANL;\ AVENl'E, ;-";.W .• WA5iHINGTO', D.c:.. 20220.12021622-2960
DBAROOED tlN'l'IL 2: 3 0 P. JC.
COI1TACT:
Karch lS, 2001
Office of Financing
l02/'91~3550
TRBAStmY OnDS 13-w.aBk AND 26-MEBlt
BILLS
The· T~. . .ury wtll auct~OD eMO seri.. of Treasury bills totaling
approx±mately $18,000 million to refund $20,351 millioD of publicly held
securities maturing Karch 22, 2001, and to pay QOWD about $2,351 million.
~ addition to ~e public holdings, Federal Reserve Bank. for their own
accounts held $8 .. 916 millio~ of elLa maeur~g bill., which may be refunded at
the highest discount rat. of aaaepted competitive tenders. Amount. awarded
to the.e accounts will be in addition to the offering amount.
Up to $1 .. 00·0 million in noncompetitive bids frcm Foreign and International Monetary Authority (PIKA) accounts bidding through the Federal
Reserve BaDk of Hew York will be included wi1:hiD the offering amount of each
auction. These nancompetitive bida will have a limit of $200 million par
account and will be accepted in the order of smallest to largest, up to the
aggregate award l~t of $1 .. 000 million.
~reasury.Direct
cuatamers have requested
tha~
holdings of approximately $983 million into the
into the 26-week bill.
we
their maturing
bill and $830 million
ra~st
13~week
This offering of Treasury securities' i . governed by the ~er.ms and conditions set forth in ~e Unifo~ Offering Circular for ehe Sale and Issue of
Marketable Book-Bntry Treasury Billa, Notes .. and Bonds (31 CPR Part 356, as
amended) •
Details about each of the new securities are given in the attacbed
offering highlights.
000
Attachment
PO-89
Fo,. p,.ess ,e'ellSa, speeches, public schedules alld Official biograpltie!, ctlll 011' 24-/uJu, fax lilt. lit (202) 622-2040
H7GHLIOHTS OF TREASURY OFPRRINGS OF BILLS
TO BB ISSUSD MARCH 22, 2001
March 15, 2001
Offering Amount •••••••••.•.•..••••.•.•• $10, 000 mill ion
Description of Offering:
Ter.m and type of seourity •.•.••..•.••••
COSl:P number •.•••••••••.•••.•••.•••••••
Auotion date ..•••••••••.••••••••••.••••
Issue date •...••••.•.•••••••••••••.••••
Maturity date .•••••.•.•.••.•••••••••••.
Original issue date .•.••••...•••.•••.••
Currently outstanding ••••••••••••••••••
Minimum bid amount and multiples .•.•.••
91-day bill
912795 Gft 7
Maroh 19,2001
March .22, 2001
June 21, 2001
December 21,2000
$14,382 million
$1.000
$8,000 million
112-day bill
912795 HP 9
Karoh 19, 2001
Karch 22, 2001
September 20, 2001
Maroh 22, 2001
$1,000
The following rules apply to all securities mentioned above',
Submission of Bids:
Noncompetitive bids, Accepted in full up to $1 million at the highest discount rate of accepted
oo~etitive bids.
Woreign and International Monetary Authority (PINA) bids, Roncompetitive bids submitted
through the Federal Reserve Banks al agents for rl:NA accounts. Accepted in order of size
from smallest to largest with no more than $200 ~illion awarded per account. The total
nonoompetitive amount awarded to Pederal Reserve Benks as agents for PIMA acoounts will
not exceed $1,000 million. A single bid that would cause the limit to be exceeded will
be partially accepted in the amount that brings the aggregate award total to the $1.000
million limit. However, if there are two or more bids of eqUal amounts that would caus.
the limit to b. exceeded, each will be prorated to avoid exceeding the limit.
competitive bids.
(1) Must be expressed as a discou~t rate with three decimals in increments of .005', e.g.,
1.100', 7.105\ •.
(2) Het long position for each bidder must b. reported when the sum of the total bid amount,
at all disoount rates, and the net long position ls $1 billion or greater.
(3) Het long position must be determined as of one half-hour prior to the closing time for
receipt of competitive tenders.
Maximum Reoognized Bid at a Single Rate ••• 35% of public offering
Maximum Award ••••••••••••••••••••••••••••• 35% of publio offering
Reaeipt of Tenders.
NoncoJll)etitive tenders •• Prior to l~ :00 noon eastern standard time on auction day
Competitive tenders ...... Prior to 1,00 p.m. eastern standard time on auction day
Payment Terms. By aharge to a funds account at a Beder.l Reserve Bank on iSBue date, or payment
of full par amount with tender. TreasuryDjrec~ customers can use the Pay Direct feature which
authorizes a cbarge to their account of record at their finanoia~ institution on i •• ue date.
Ul!:PARTJ\lIENT
OF
THE
TREASURY
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C.• 20220. (202) 622.2960
March 16,2001
FOR IMMEDIATE RELEASE
Contact: Tara Bradshaw
202-622-2960
TREASURY RELEASES LATEST NUMBER OF INCOME TAX RETURNS FILED BY
SlVIALL BUSINESS OWNERS AND ENTREPRENEURS
Attached is a state-by-state breakdown of the number of income tax returns which
included income from sole proprietorships. The data were compiled by the Internal Revenue
Service based on income tax returns filed in the year 2000 for tax year 1999. Returns that may
have included other kinds of business income were not included in these data. From these data it
is evident that at least 17.4 million small business owners and entrepreneurs, many of whom
currently pay at the 39.6% rate, stand to benefit from the President's tax relief plan. The
President's proposal reduces all marginal tax rates;' including a reduction in the top rate to 33%.
-30-
PO-90
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622·2040
'u.s. Government Printing Office
1998 - 619-559
Individual Income Tax Returns Filed for 1999 with Non-Farm Proprietor Income l
(Number of returns in thousands)
United States
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
17,463
246
276
164
2,342
Missouri
North Carolina
North Dakota
Nebraska
Nevada
346
488
45
117
107
329
218
38
1,019
486
New Hampshire
New Jersey
New Mexico
New York
Ohio
92
465
113
1,187
638
55
Hawaii
Idaho
Illinois
Indiana
Iowa
80
94
700
343
194
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
Kansas
Kentucky
Louisiana
Maine
Maryland
178
240
240
104
327
South Dakota
Tennessee
Texas
Utah
Vermont
55
372
1,364
135
53
Massachusetts
Michigan
Minnesota
Montana
Mississippi
427
536
337
76
149
Virginia
Washington
Wisconsin
West Virginia
Wyoming
396
363
293
District of Columbia
Other Areas
1
236
235
674
60
218
92
38
34
52
Only returns with positive non-farm proprietor income are included.
Notes
The figures in the table were tabulated from all individual income tax returns filed and processed through the IRS
Individual Master File (IMF) during calendar year 2000. Most returns filed in 2000 were for tax year 1999.
Classification by state was based on the address used on the return. Usually this address is the taxpayer's home
address. However, some taxpayers may have used the address of a tax attorney or accountant, or a place of business,
and that address could be in a different state than the taxpayer's home.
J)
E P ;\
I{
T ~I E N T
0 F
T It E
'I" R E " S t! R \'
~~J78~9~~. . . . . . . . . . . . . . . . . .. .
......................
OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASIDNGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
March 16.2001
* * * NEW TIME * * *
Social Security, Medicare Trustees Report Press Conference
MEDIA ADVISORY
Treasury Secretary Paul O'Neill will host a press conference to release the 2001
Annual Report of the Social Security and Medicare Trustees. The press conference
will take place at 10;30 a.m. on Monday, March 19 in the Treasury Department's
Diplomatic Reception Room (Room 3311), 1500 Pennsylvania Avenue, NW.
As Trustees, Health & Human Services Secretary Tommy Thompson, Labor Secretary
Elaine Chao. and Social Security Administration Acting Commissioner William Halter
will participate in the press conference.
The room will be available for pre-set at 9:30 a.m. Media without Treasury or White
House press credentials planning to attend should contact Treasury's Office of Public
Affairs at (202) 622-2960 with the following information: name, social security number
and date of birth. This information may also be faxed to (202) 622-1999.
PO-91
'NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE. N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 10:30 AM
March 19,2001
Contact: Tony Fratto
(202) 622·2960
TREASURY SECRETARY PAUL O'NEILL REMARKS AT THE MEDICARE AND
SOCIAL SECURITY TRUSTEES PRESS CONFERENCE
Today, the boards of Trustees of the Medicare and Social Security Trust Funds
met to complete our annual review of the financial status of the trust funds and to
forward the reports to Congress.
While the short-term financial status of each program has improved some since
last year's report, substantial challenges remain which need to be addressed at the
earliest opportunity.
Let me first talk about Medicare. The Medicare program as a whole presents
financial challenges that will require integrated and comprehensive solutions. Costs for
the two Medicare program components -- HI and SMI combined -- will grow from 2.2
percent of GOP today to 8.5 percent in 2075. By comparison. HI tax income and SMI
premium revenues will only grow from 1.8 percent of GOP today to 2.5 percent in 2075.
Medicare spending is ultimately projected to exceed even the costs of Social Security.
The financing gap for HI alone is larger than the gap for Social Security, and the HI
Trust Fund will become insolvent 9 years sooner than the OASOI Trust Funds. HI tax
income will fall short of outlays beginning in 2016.
It might be tempting to ignore Medicare's problems by pointing to the improved
short-term solvency of the HI fund and the fact that on an actuarial basis the
Supplementary Medical Insurance (SMI) Trust Fund is projected to remain adequately
financed into the indefinite future. Neither of these factors should be used as an excuse
for complacency. First, because a panel of experts recommended changes in health
cost assumptions to improve the accuracy of the Trustees' projections, the long-term
cost estimates for both HI and SMI are raised substantially. thus worsening the longterm actuarial deficit in the Medicare HI Trust fund, Second, the SMI trust fund
automatically relies on general revenues to make up the difference between its premium
revenues and costs. This method hides the fact that the SMI trust fund will consume a
rapidly growing share of general revenues over time and beneficiary premiums will be
increased substantially.
PO- 92
For press releases. speeches. puhlic schedules and official biographies. call our 24-hour fax line at (202) 622-2040
'U S Go .... ernment Prlnllng Otltce 19ge· 619·559
Because I think it is so important to this discussion. I also want to take a minute
to elaborate on what I see as the tremendous potential for improvements in the health
care sector. The main reason I bring up this issue, is out of concern for the health of the
American public. and particularly for the elderly and disabled who. depend on Medica:e.
The recent reports of the prestigious Institute of Medicine on medical errors and quality
of care are quite sobering. In 1999, the 10M reported uncovering a stunningly high rate
of medical error - errors that resulted in death. premature disability, and unnecessary
suffering. Earlier this month. the Institute released a follow-up report on the overall
quality of health care in America. concluding that reforms could close the enormous
chasm between the current level of health care quality and the potential we know exists.
I know that Secretary Thompson shares my concerns and that his Department
has just launched a campaign to improve the quality of health care, promote healthy
lifestyles. and reduce health care costs dramatically. I look forward to working with him
as the Administration tackles this vital issue - because when it comes to America's
health. we all need to be "in search of excellence."
Turning to the Social Security Trust Fund. annual outlays will begin to exceed
annual tax income in 2016. The fund continues to be in long-term deficit and these
deficits are expected to persist and rise to more than 6 percent of taxable payroll by
2075. The primary cause of the deficit is the aging of the population and increasing
longevity. It is clear that action needs to be taken to address the projected financial
shortfall now. as the sooner adjustments are made, the smaller and less abrupt they will
need to be.
This spring President Bush will form a commission to reform Social Security.
The commission is expected to make its recommendations by next fall. The President's
goal is clear: SOCial Security must be safe and secure for this generation and for future
generations We must work now to preserve and protect Social Security. so we keep
our commitment to current seniors, and meet the needs of our children and
grandchildren.
Today IS the first opportunity for each of us to comment publicly as Trustees on
the status of the Medicare and SOCial Security trust funds. In recent years, efforts to
achieve bipartisan reform have not succeeded, and the Trustees have come to this
podium to announce that minor reforms and "improved economic projections" have
given us a few additional years of short-term solvency-- while serious long-term
structural Imbalances remain. Our report today IS similar to previous recent reports. It
IS the hope of each of us that thiS Administration and the Congress will find the
necessary confluence of opinion, Wisdom and courage to restore long-term health to
these programs.
-30-
:.' :,:." "'<D'E.,·P:A ~':r'lVlE
~
" . :"~':., ,';'\~,~,'" ,<" ,"'., , :,:,';.:
:'"
N1"
0 F
' ::
'
IREASURY
~'T 'H
.
"
"""
E
TREA SUR'y
'.,"
".: '
'.-
. , :" '
NEWS
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C•• 20220. (202) 622-2960
ElVIBARGOED UNTIL 10 A.M. EST
lVIarch 20, 2001
Contact: Tony Fratto
(202) 622-2960
TREASURY SECRETARY PAUL H. O'NEILL
TESTIlVIONY BEFORE A JOINT HEARING OF THE
HOUSE COlVIMITTEE ON WAYS AND MEANS
A1~D SENATE COMlVIITTEE ON FINANCE
It is a pleasure to be here today before this unique joint hearing ofthe House Committee
on Ways and Means and Senate Committee on Finance, I applaud Chainnan Grassley and
Chainnan Thomas for focusing more than the usual attention on the Social Security and
Medicare Trustees' reports on the financial status of these two vital programs.
Yesterday, the Trustees met to complete our annual review of the trust funds and to
forward the reports to Congress. While the short-tenn financial status of both Social Security
and Medicare has improved somewhat since last year's report, our long-tenn analysis highlights
a real threat to the retirement security of future generations and has led us to conclude that both
programs need to be refonned and strengthened at the earliest opportunity, Focusing only on the
short-tenn ignores the long-tenn impact of a rapidly aging population on both trust funds which
results in both funds being widely out of long-tenn actuarial balance,
Medicare
Let me first talk about Medicare. The Medicare program as a whole presents financial
challenges that will require integrated and comprehensive solutions. Costs for the two Medicare
program components -- HI and SMI combined -- will grow from 2.2 percent of GDP today to 8.5
percent in 2075. By comparison, HI tax income and SMI premium revenues will only grow from
1.8 percent of GDP today to 2.5 percent in 2075, leaving a gap of 6 percentage points in 2075.
Counting current law general revenues dedicated to SMI, the shortfall will still be 3 percentage
points at the end of the projection period. Medicare spending is ultimately projected to exceed
even the costs of Social Security, The financing gap for HI alone is larger than the gap for Social
Security, and the HI Trust Fund will become insolvent 9 years sooner than the OASDI Trust
Funds. HI tax income will fall short of outlays beginning in 2016,
PO-93
_ FfJr press reier, 6fJ~he~
public
Wzed:.~les and official biographies, call our 24-hour fax line at (202) 622-2040
,: ;
It might b~ tempting to ignore Medicare's problems by pointing to the improved shortterm solvencv of the HI fund and the fact that on an actuarial basis the Supplementary Medical
Insurance (S~ll) Trust Fund is projected to remain adequately financed into the future. Neither
of these factors should be used as an excuse for complacency.
First. because a panel of experts recommended changes in health cost assumptions to
impro\\:: the accuracy of the Trustees' projections, the long-term cost estimates for both HI and
S\II are raised substantially, thus worsening the long-term actuarial deficit in the Medicare HI
Trust fund. Second. the SMI trust fund automatically relies on general revenues to make up the
difference between its premium revenues and costs. This method hides the fact that the SMI
trust fund will consume a rapidly growing share of general revenues over time and beneficiary
premi ums will be increased substantially.
With the accounting complexities of two trust funds, it might be easy to lose sight of the
basic fact: we need to focus on Medicare in its entirety. It is clear that steps should be taken now
to develop a more accurate overall measure of Medicare's financial health, and to work together
to improve it.
Because 1 think it is so important to this discussion, I also want to elaborate on what I see
as the tremendous potential for improvements in the health care sector. I raise this issue out of
concern for the health of the American public, and particularly for the elderly and disabled who
depend on Medicare. The recent reports of the prestigious Institute of Medicine on medical
errors and quality of care are quite sobering. In 1999, the 10M reported uncovering a stunningly
high rate of medical error - errors that resulted in qeath, premature disability, and unnecessary
suffering. Earlier this month, the Institute released' a follow-up report on the overall quality of
health care in America, concluding that reforms could close the enormous chasm between the
current level of health care quality and the potential we know' exists.
Social Securitv
Turning to the combined OASDI Trust Fund, the Trustees report a financial outlook that
has improved a little since last year -- a projected exhaustion date of2038, one year later than
last year. Still, the fund continues to be in long-term deficit - with a financing gap equal to 1.86
percent of payroll. Moreover, once the baby boom generation starts to retire, financial pressure
\\'ill build and continue to be a factor beyond the 75-year projection period.
The primary cause of the long-term deficit is the aging of the popUlation that will occur
as the baby boom generation retires and expected increases in longevity become reality. Annual
O."\'~Dr outlays will exceed OASDI tax revenue beginning in 2016. Deficits are expected to
peI~sIst and are projected to rise to more than 6 percent of taxable payroll by 2075. These large
defICItS at the end of the projection period are an indication that costs will almost certainly
contlI1ue to exceed tax revenue after 2075. As a result, ensuring the sustainability of the system
aiter 20-5 \\ill reLjuire larger changes than needed to restore the system to 75-year balance. The
Trustees beliew that action should be taken to address the financial shortfall now as the sooner
adjustments are made. the smaller and less abrupt they will have to be.
'
This spring President Bush will form a Presidential commission to study how to reform
Social Security. The commission could make its recommendations by next fall. Reform should
be based on these principles: it should preserve the benefits of all current retirees and those
nearing retirement and preserve the disability and survivors components: it should return Social
Security to sound financial footing without increasing payroll taxes or allowing the Government
itself to invest Social Security funds in the private economy; and it should offer personal
retirement accounts to younger workers who want them.
The President's goal is clear: Social Security must be safe and secure for this generation
and for future generations. We must work now to preserve and protect Social Security by
putting it on a firm financial footing so we can keep oUf commitment to current seniors and also
meet the needs of our children and grandchildren.
Finally, this is the first opportunity I have had as a Trustee to comment on the status of
the Medicare and Social Security trust funds. In recent years, bipartisan reform efforts have not
succeeded, and the Trustees have reported that minor reforms and "improved economic
projections" have allowed us to add a few additional years of life to the trust funds - though
serious long-term structural imbalances have remained. This report, sadly, is similar to previous
recent reports. However, it is my hope that this Administration and Congress can work together
in a bipartisan way to find the necessary confluence of opinion, wisdom and courage to restore
long-term health to these programs.
Thank you for inviting me to testify today. I look forward to answering your questions.
-30-
3
NEWS
omo: OF PUBliC AFFAIRS 01500 PENNSYLVANIA AVENUE, N.W. 0 WASHINGTON, D.C.
FOR IMMEDIATE RELEASE
March 19, 2001
$
20220. (202) 622-2960
Contact: Tony Fratto
(202) 622-2960
STATElVIENT BY THE G7 FINANCE MINISTERS AND CENTRAL BANK
GOVERNORS ON TURKEY
We welcome the announcement of the Turkish authorities on the framework for a
strong new economic reform program, supported by the IMF and the World Bank.
The program will rightly focus on achieving low inflation and sustainable public
finances through sound fiscal and monetary policies, supported by vigorous
implementation of structural reform. We particularly welcome the comprehensive
and urgent plans in the program to tackle the problems of the banking sector, in
co-operation with the World Bank and the IMF.
Long-term' political commitment by the Turkish authorities to rigorous
implementation of their program remains absolutely critical to its success, and we
will maintain our support for these efforts. A return of market confidence and the
continuous engagement of the private sector are also critical for the Turkish
economic recovery.
PO-94
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (292) 622-2040
·U.S. Government Pnntlnq Otilce 1998 - 619-559
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
March 19/ 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
91-Day Bill
March 22, 2001
June 21/ 2001
912795GM7
4.370%
Investment Rate 1/:
4.482%
Price:
98.895
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 83%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FIMA (noncompetitive)
$
$
22,119,311
1/379,439
150,000
5/065,675
5/065,675
Federal Reserve
$
28/714,425
8,472,810
1/379,439
150,000
10,002,249 2/
23,648/750
SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
$
15,067,924
Median rate
4.340%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.320%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 23,648,750 / 10,002,249
=
2.36
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,100,856,000
http://www.publicdebt.treas.gov
PO-95
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public. Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
March 19, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
182-Day Bill
March 22, 2001
September 20, 2001
912795HP9
4.220%
High Rate:
Investment Rate 1/:
4.371%
Price:
97.867
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 10%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FlMA (noncompetitive)
SUBTOTAL
16,866,085
1,189,835
100,000
- - - - - - - - - - - ....\,- - - -18,155,920
$
$
22,005,976
6,715,085
1,189,835
100,000
8,004,920 2/
3,850,056
3,850,056
Federal Reserve
TOTAL
$
$
11,854,976
Median rate
4.180%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.150%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
18,155,920 / 8,004,920
=
2.27
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $917,095,000
http://www.publicdebttreas.gov
PO 96
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
March 21,2001
Contact: Office of Financing
202-691-3550
TREASURY'S INFLATION-INDEXED SECURITIES
APRIL REFERENCE CPI NUMBERS AND DAILY INDEX RATIOS
Public Debt announced today the reference Consumer Price Index (CPI) numbers and daily
index ratios for the month of April for the following Treasury inflation-indexed securities:
(I)
(2)
(3)
(4)
(5)
(6)
3-3/8% 1O-year notes due January 15,2007
3-5/8% 5-year notes due July 15, 2002
3-5/8% 10-year notes due January 15,2008
3-5/8% 30-year bonds due April 15,2028
3-7/8% 10-yearnotesdueJanuary 15,2009
3-7/8% 30-year bonds due April 15,2029
(7) 4-114% 10-year notes due January 15,2010
(8) 3-112% lO-year notes due January 15, 2011
This information is based on the non-seasonally adjusted U.S. City Average All Items Consumer Price
Index for All Urban Consumers (CPI-U) published by the Bureau of Labor Statistics of the U.S.
Department of Labor.
In addition to the publication of the reference CPI's (RefCPI) and index ratios, this release
provides the non-seasonally adjusted CPI-U for the prior three-month period.
This information is available through the Treasury's Office of Public Affairs automated fax
system by calling 202-622-2040 and requesting document number 97. The information is also available
on the Internet at Public Debt's website (http://www.publicdebttreas.gov).
The information for May is expected to be released on Apri I 17, 2001.
000
Attachment
PO-97
http://www.publicdebt.treas.gov
TREASURY INFLATION-INDEXED SECURITIES
Ref CPI and Index Ratios for
April 2001
Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Datels):
3-3/8% 10-Year Notes
Series A-2007
9128272M3
January 15. 1997
February 6, 1997
April 15, 1997
3-5/8% 5-Year Notes
Series J·2002
9128273A8
July 15. 1997
July 15, 1997
October 15,1997
3-5/8% 10·Year Notes
Series A·2008
9128273T7
January 15. 1998
January 15, 1998
October 15. 1998
3·5/8% 30-Year Bonds
Bonds of April 2028
912810FD5
April 15, 1998
April 15, 1998
July 15, 1998
Maturity Date:
Ref CPI on Dated Date:
January 15. 2007
158.43548
July 15,2002
160.15484
January 15,2008
161.55484
April 15, 2028
161.74000
I
Date
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
CPI·U (NSA) for:
RefCPI
Index Ratio
Index Ratio
Index Ratio
Index Ratio
175.10000
175.12333
175.14667
175.17000
175.19333
175.21667
175.24000
175.26333
175.28667
175.31000
175.33333
175.35667
175.38000
175.40333
175.42667
175.45000
175.47333
175.49667
175.52000
175.54333
175.56667
175.59000
175.61333
175.63667
175.66000
175.68333
175.70667
175.73000
175.75333
175.77667
1.10518
1.10533
1.10548
1.10562
1.10577
1.10592
1.10607
1.10621
1.10636
1.10651
1.10665
1.10680
1.10695
1.10710
1.10724
1.10739
1.10754
1.10769
1.10783
1.10798
1.10813
1.10827
1.10842
1.10857
1.10872
1.10886
1.10901
1.10916
1.10931
1.10945
1.09332
1.09346
1.09361
1.09375
1.09390
1.09405
1.09419
1.09434
1.09448
1.09463
1.09477
1.09492
1.09507
1.09521
1.09536
1.09550
1.09565
1.09579
1.09594
1.09609
1.09623
1.09638
1.09652
1.09667
1.09681
1.09696
1.09710
1.09725
1.09740
1.09754
1.08384
1.08399
1.08413
1.08428
1.08442
1.08456
1.08471
1.08485
1.08500
1.08514
1.08529
1.08543
1.08558
1.08572
1.08586
1.08601
1.08615
1.08630
1.08644
1.08659
1.08673
1.08688
1.08702
1.08716
1.08731
1.08745
1.08760
1.08774
1.08789
1.08803
1.08260
1.08275
1.08289
1.08303
1.08318
1.08332
1.08347
1.08361
1.08376
1.08390
1.08404
1.08419
1.08433
1.08448
1.08462
1.08477
1.08491
1.08505
1.08520
1.08534
1.08549
1.08563
1.08578
1.08592
1.08606
1.08621
1.08635
1.08650
1.08664
1.08679
December 2000
174.0
January 2001
175.1
February 2001
--
I
175.8
TREASURY INFLATION-INDEXED SECURITIES
Ref CPI and Index Ratios for
April 2001
Security:
DesCription:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):
3-7/8% 10-Year Notes
Series A·2009
9128274Y5
January 15. 1999
January 15. 1999
July 15. 1999
Maturity Date:
Ref CPI on Dated Date:
January 15. 2009
164.00000
Date
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
April
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
CPI-U (NSA) for:
3-7/8% 30-Year Bonds
Bonds of April 2029
912810FH6
April 15. 1999
April 15. 1999
October 15. 1999
October 15. 2000
April 15, 2029
164.39333
4-1/4% 10-Year Notes
Series A-2010
9128275W8
January 15. 2000
January 18. 2000
July 15. 2000
3-112% 10-Year Notes
Series A-2011
9128276R8
January 15. 2001
January 16.2001
January 15. 2010
168.24516
January 15. 2011
174.04516
RefCPI
Index Ratio
Index Ratio
Index Ratio
Index Ratio
175.10000
175.12333
175.14667
175.17000
175.19333
175.21667
175.24000
175.26333
175.28667
175.31000
175.33333
175.35667
175.38000
175.40333
175.42667
175.45000
175.47333
175.49667
175.52000
175.54333
175.56667
175.59000
175.61333
175.63667
175.66000
175.68333
175.70667
175.73000
175.75333
175.77667
1.06768
1.06783
1.06797
1.06811
1.06825
1.06839
1.06854
1.06868
1.06882
1.06896
1.06911
1.06925
1.06939
1.06953
1.06967
1.06982
1.06996
1.07010
1.07024
1.07039
1.07053
1.07067
1.07081
1.07096
1.07110
1.07124
1.07138
1.07152
1.07167
1.07181
1.06513
1.06527
1.06541
1.06555
1.06570
1.06584
1.06598
1.06612
1.06626
1.06641
1.06655
1.06669
1.06683
1.06697
1.06712
1.06726
1.06740
1.06754
1.06768
1.06783
1.06797
1.06811
1.06825
1.06839
1.06853
1.06868
1.06882
1.06896
1.06910
1.06924
1.04074
1.04088
1.04102
1.04116
1.04130
1.04144
1.04158
1.04171
1.04185
1.04199
1.04213
1.04227
1.04241
1.04255
1.04268
1.04282
1.04296
1.04310
1.04324
1.04338
1.04352
1.04366
1.04379
1.04393
1.04407
1.04421
1.04435
1.04449
1.04463
1.04477
1.00606
1.00619
1.00633
1.00646
1.00660
1.00673
1.00687
1.00700
1.00713
1.00727
1.00740
1.00754
1.00767
1.00780
1.00794
1.00807
1.00821
1.00834
1.00847
1.00861
1.00874
1.00888
1.00901
1.00914
1.00928
1.00941
1.00955
1.00968
1.00981
1.00995
December 2000
174.0
January 2001
175.1
February 2001
~
..
--- ...---
175.8
D'EPARTMENT
OF
THE
TREASURY
,
,
NEWS
OFFICE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 _ (202) 622-2960
u.s. International Reserve Position
03/21/01
The Treasury Department today released U-S. reserve assets data for the week ending March 16,2001. As indicated in
this table, US. reserve assets totaled $64,871 million as of March 16,2001, down from $66,312 million as of March 9,
2001.
(in US millions)
March,C'9'l200t
66,312
March,1:6,.2001';
64,871
J
~l. R6teignl-Cur.r.ency; Reser:ves1'
a,$ecurities,
I
Euro
5,528
Yen
10,590
TOIAL
16,118
Euro
5,311
Yen
10,727
IOTAL
o
Otwhictr,.. issuer-headquaFtereftin the: U: S.
16,037
o
~Jf9<fa~dep'Osits witfi~
'~ilh9,tben:centJaLbanks and'B/S'
b)I'fuEl'anks.headquaiteredfTnithe:;U:S:.
.' : Il<.iEOf;wlJiCh, baRk$':loCated abroacf
/&i.iiE; Banlfs-headquartered outsidaths' IJ:'S;,
9,332
5,183
14,514
0
0
8,953
4,644
13,597
0
0
0
0
0
0
~£IMF Reserve. Position 2:
13,984
13,733
~;spe:clakDrawfrtgRi9htS'($DRs)2
10,650
10,458
~.;G'()l'i:fStock3
11,046
11,046
0
0
b:ifLOf;which" banRs IOGafed'in. the,O.s.
~.
~OtllerReserve: Assets
1/ Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates, Foreign currency holdings listed as securities reflect marked-to-market values, and
deposits reflect carrying values.
2/ The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRJdoliar exchange rate for the reporting date. The IMF data for March 9 are final. The entries in the table above
for March 16 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data.
31 Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of February 28, 2001, The January 31, 2001 value
was $11,046 million.
PO-98
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
March 9. 2001
1. Foreign currency loans and securities
March 16. 2001
o
o
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
March 9, 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn. unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.e. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
March 16, 2001
o
o
o
o
o
o
o
o
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE 01<' PUBLIC AFFAIRS e1500 PENNSYLVANIA AVENUE, N. W. e WASHINGTON, D.C.e 20220 e (202) 622.2960
EMBARGOED UNTIL 9:00 A.M.
March 21, 2001
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960
TREASURY ANNOUNCES DEBT BUYBACK OPERATION
On March 22, 2001, the Treasury will buy back up to $1,750 million
par of its outstanding issues that mature between February 2023 and November
2027. Treasury reserves the right to accept less than the announced amount.
This debt buyback (redemption) operation will be conducted by Treasury's
Fiscal Agent, the Federal Reserve Bank of New York, using its Open Market
operations system. Only institutions that the Federal Reserve Bank of New
York has approved to conduct Open Market transactions may submit offers on
behalf of themselves and their customers.' Offers at the highest accepted
price for a particular issue may be accepted on a prorated basis, rounded up
to the next $100,000. As a result of this rounding, the Treasury may buy
back an amount slightly larger than the one announced above.
This debt buyback operation is governed by the terms and conditions set
forth in 31 CFR Part 375 and this announcement.
The debt buyback operation regulations are available on the Bureau of
the Public Debt's website at www.publicdebt.treas.gov.
Details about the operation and each of the eligible issues are given
in the attached highlights.
000
Attachment
PO-99
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY DEBT BUYBACK OPERATION
March 21, 2001
Par amount to be bought back ... Up to $1,750 million
Operation date . . . . . . . . . . . . . . . . . March 22, 2001
Operation close time ........... 11:00 a.m. eastern standard time
Settlement date . . . . . . . . . . . . . . . . March 26, 2001
Minimum par offer amount ...... $100,000
Multiples of par .............. $100,000
Format for offers ..... Expressed in terms of price per $100 of par with
three decimals. The first two decimals represent
fractional 32 nds of a dollar. The third decimal
represents eighths of a 32 nd of a dollar, and must
be a 0, 2, 4, or 6.
Delivery instructions .......... ABA Number 021001208 FRB NYC/CUST
Treasury issues eligible for debt buyback operation (in millions) :
Coupon
Rate (%)
7.125
6.250
7.500
7.625
6.875
6.000
6.750
6.500
6.625
6.375
6.125
Maturity
Date
02/15/2023
08/15/2023
11/15/2024
02/15/2025
08/15/2025
02/15/2026
08/15/2026
11/15/2026
02/15/2027
08/15/2027
11/15/2027
CUSIP
Number
912810 EP
912810 EQ
912810 ES
912810 ET
912810 EV
912810 EW
912810 EX
912810 EY
912810 EZ
912810 FA
912810 FB
Total
9
7
3
1
6
4
2
0
7
1
9
Par Amount
Outstanding*
17,344
22,669
10,159
11,126
11,878
12,838
10,458
11,453
10,251
10,396
22,461
151,033
Par Amount
Privately
Held*
14,709
21,116
8,544
9,668
10,079
11,723
8,844
9,729
9,060
8,756
19,150
131,378
Par Amount
Held as
STRIPS**
7,447
3,644
6,311
7,683
4,316
1,459
3,153
4,656
3,598
1,440
7,683
51,390
* Par amounts are as of March 20, 2001.
** Par amounts are as of March 19, 2001.
The difference between the par amount outstanding and the par amount
privately held is the par amount of those issues held by the Federal
Reserve System.
,
-
D E JI-A R T MEN· 17
-
-
-
0 F
T H R
T REA SUR V
,
NEWS
OffiCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASIDNGTON, D.C.• 20220 • (202) 622-2960
FOR IlVThIEDIATE RELEASE.
March 21, 2001
Contact: Tara Bradshaw
(202) 622-2960
STATEMENT OF JAMES F. SLOAN ACTING UNDER SECRETARY
(ENFORCEMENT) PENNSYL VANIA AVENUE HEARING BEFORE THE
HOUSE COMMITTEE ON GOVERNIVIENT REFORM AND
OVERSIGHT DISTRICT OF COLUlVIBIA SUBCOMMITTEE
MADAM CHAIRWOMAN, AND lYIEMBERS OF THE
SUBCOM:MITTEE, THANK YOU FOR INVITING ME TO TESTIFY TODAY
ABOUT THIS IMPORTANT MATTER. AS THE ACTING UNDER
SECRETARY FOR ENFORCEMENT I HAVE OVERSIGHT
RESPONSIBILITY FOR TREASURY'S LAW ENFORCEMENT BUREAUS
WHICH INCLUDE THE CUSTOMS SERVICE, ATF, THE FEDERAL LAW
ENFORCEMENT TRAINING CENTER, THE FINANCIAL CRIMES
ENFORCEMENT NETWORK, AND THE UNITED STATES SECRET
SERVICE. I WOULD LIKE TO OFFER SOtvfE GENERAL REMARKS AND
THEN INTRODUCE DIRECTOR STAFFORD TO PROVIDE MORE
DETAILED ANALYSIS OF THIS ISSUE.
IN 1995, FORMER SECRETARY OF THE TREASURY RUBIN
DIRECTED THE SECRET SERVICE TO CLOSE A SEGMENT OF
PENNSYLVANIA AVENUE IN FRONT OF THE WHITE HOUSE TO
VEHICULAR TRAFFIC. THIS DECISION WAS, IN PART, BASED ON
RECOMMENDATIONS OF THE ADVISORY COMMITTEE OF THE WHITE
HOUSE SECURlTY REVIEW, WHICH WAS THE MOST EXTENSIVE
REVIEW OF SECURITY OF THE WHITE HOUSE EVER CONDUCTED.
OTHER FACTORS INFLUENCING THIS DECISION INCLUDED THE LOSS
OF LIFE AND INJURIES SUFFERED IN THE BOMBINGS OF THE U.S.
MARINE BARRACKS IN BERUIT, THE WORLD TRADE CENTER IN NEW
YORK CITY, AL"\lD THE MURRAH FEDERAL BUILDING IN OKLAHOMA
CITY. THE CONCLUSION OF THE WHITE HOUSE SECURITY REVIEW
WAS CLEAR - THAT CLOSING PENNSYLVANIA AVENUE IN FRONT OF
THE WHITE HOUSE WAS THE ONLY ALTERNATIVE AVAlLABLE THAT
PO-IOO
-_Far press relroses, speeches, public 5dt~#ules and official biographies, call our 24-hour fax line at (202)622-2040
t.,
WOULD PROTECT THE WHlTE HOUSE FROM THE DEVASTATING
IMPACT OF A VEHICLE BOMB DETONATED ON THE AVENUE IN
FRONT OF THE COMPLEX.
THE WHITE HOUSE SECURITY REVIEW WAS INITIATED
FOLLOWING SEVERAL SECURITY INCIDENTS AT THE WHITE HOUSE.
rN ADDITION TO REVIEW STAFF, SECRETARY BENTSEN APPOINTED
A NONPARTISAN ADVISORY COMMITTEE COJ\!IPOSED OF SIX
DISTINGUISHED A1vfERICANS TO ENSURE THAT THE REVIEW'S WORK
WAS THOROUGH AND UNBIASED. THESE ADVISORS WERE: ROBERT
CARSWELL, FORMER DEPUTY SECRETARY OF THE TREASURY;
vVILLIAl\.1 COLEMAN, FORMER SECRETARY OF TRANSPORTATION;
CHARLES DUNCAl~, FORMER SECRETARY OF ENERGY AND DEPUTY
SECRET ARY OF DEFENSE; GENERAL DAVID JONES, FORMER
CHAIRMAN OF THE JOINT CHIEFS OF STAFF; DR. JUDITH RODIN,
PRESIDENT OF THE UNIVERSITY OF PENNSYLVANIA; AND JUDGE
WILLIAl\.1 WEBSTER, FORMER DIRECTOR OF THE FBI AND CIA. THE
REVIEW EXAMINED SEVERAL SECURITY RELATED INCIDENTS THAT
OCCURRED IN THE VICINITY OF THE WHITE HOUSE.
THE REVIEW WAS AN EXTENSIVE, EIGHT MONTH STUDY,
INVOL VING INTERVIEWS AND BRIEFINGS OF MORE THAN 300
INDIVIDUALS FROM OVER TEN GOVERNMENT AGENCIES, AND
ANALYSIS OF MORE THAN 1,000 DOCUMENTS. EXPERTS FROM
EIGHT FOREIGN COUNTRIES WERE ALSO CONSUL TED AS WELL AS
THREE FORMER PRESIDENTS IN ORDER TO BRING ADDITIONAL
PERSPECTIVE TO THE REVIEW. THE REVIEW RESULTED IN THE
ISSUANCE OF A CLASSIFIED REPORT OF MORE THAN 500 PAGES, AS
vYELL AS A SHORTER PUBLIC REPORT. TREASURY'S OUTSIDE PANEL
OF DISTINGUISHED EXPERTS CONCURRED WITH ALL OF THE
RECOMMENDATIONS, INCLUDING THE CLOSING OF PENNSYLVANIA
AVENUE.
BEFORE RECOMMENDING TO CLOSE PENNSYLVANIA AVENUE,
THE WHITE HOUSE SECURITY REVIEW EXPLORED A WIDE VARIETY
OF OPTIONS IN Al~ EFFORT TO PROVIDE AN APPROPRIATE LEVEL OF
SECURITY AT THE WHITE HOUSE, YET MINIMIZE THE PUBLIC
IMPACT. AFTER ItS EXTENSIVE INFORJ.v1ATION GATHERING WAS
COMPLETE, THE REVIEW CONCLTJDED THAT "THERE IS NO
AI. TER.c~ATE TO PROHIBITING VEHlCULAR TRAFFIC ON
PE~NSYL VANIA AVENUE THAT WOULD ENSURE THE SAFETY OF
THE PRESIDENT l\.ND OTHERS IN THE WillTE HOUSE COJ\!1PLEX FROM
EXPLOSIVE DEVICES CARRIED BY VEHICLES NEAR ITS
BOUNDARIES."
SINCE THAT DECISION, NUMEROUS STUDIES HAVE BEEN
UNDERTAKEN AND MANY PROPOSALS OFFERED FOR ALTERNATIVE
WAYS TO ENSURE THE SAFETY OF THE PRESIDENT AND REOPEN
PENNSYL V AN1A AVENUE TO TRAFFIC. THE SECRET SERVICE
CONTINUES TO MONITOR ALL PROPOSALS AND NEW
TECHNOLOGIES TO DETERMINE WHETHER THERE ARE ANY
ALTERNATIVES THAT WOULD ADEQUATELY ENSURE THE SAFETY
OF THE WHITE HOUSE COMPLEX. AFTER CAREFUL ANALYSIS, THE
SECRET SERVICE HAS CONCLUDED THAT OPENING PENNSYLVANIA
AVENUE DIRECTLY IN FRONT OF THE WHITE HOUSE WOULD
INCREASE THE THREAT TO THE WHITE HOUSE COMPLEX POSED BY
AN EXPLOSIVE-LADEN VEHICLE.
WE DO NOT BELIEVE THE CLOSURE OF PENNSYLVANIA
AVENlJE HAS AFFECTED THE PUBLIC'S ACCESS TO THE WHITE
HOUSE. THE WHITE HOUSE COMPLEX IS STILL VISITED BY
THOUSANDS OF PEOPLE EACH DAY, AND THE AREA IN FRONT OF
THE WHITE HOUSE HAS REMAINED OPEN TO PEDESTRIAN TRAFFIC.
THERE ARE SEVERAL DESIGNS THAT HAVE BEEN PROPOSED THAT
WOULD MAKE THE SEGMENT OF PENNSYLVANIA AVENUE IN FRONT
OF THE WHITE HOUSE A BEAUTIFUL AND INVITING PEDESTRIAN
AREA.
OUR JOB IS TO PROTECT THE PRESIDENT, THE WHITE HOUSE,
THE PEOPLE WHO WORK IN THE BUI~DING, AND THE PEOPLE WHO
VISIT IT. THE CLOSING OF PENNSYLV ANIA AVENUE IS A REAL
PUBLIC SAFETY ISSUE THAT AFFECTS NOT ONLY THE SAFETY OF
THE FIRST FAMILY, BUT OF ALL THOSE WHO VISIT AND WORK IN
THE AREA AROUND THE WHITE HOUSE. THE OKLAHOMA CITY
BOMBING, FOR EXAMPLE, DAMAGED OVER 300 BUILDINGS,
INCLUDING TEN STRUCTURES THAT COLLAPSED. ANY DISCUSSION
ABOUT REOPENING PENNSYLVANIA A VENUE SHOULD INCLUDE At1\,f
OBJECTIVE ASSESSMENT OF RISK.
I AM AWARE THAT THE NATIONAL CAPITAL PLANNING
COMMISSION HAS CONVENED A TASK FORCE TO REVIEW THE
IMP ACT OF SECURITY MEASURES AROUND THE WHITE HOUSE. IT IS
MY UNDERSTANDING THAT THIS PANEL IS COMPRISED OF
REPRESENTATIVES FROM THE ADMINISTRATION, CONGRESS, AND
THE DISTRICT OF COLUMBIA, WHO WILL WORK WITH THE SECRET
SERVICE AND OTHER AGENCIES TO REVIEW SECURITY AND LOOK
AT WAYS TO MAKE FEDERAL SECURITY LESS INTRUSIVE. THERE
MAY BE OTHER INDEPENDENT STUDIES ONGOING. I CAN ASSlJRE
YOU THAT THE DEPARTMENT OF THE TREASURY WILL CONTINUE
TO MONITOR THIS ISSUE CAREFULLY, AND WE WILL ASSESS NEW
DEVELOPMENTS AS THEY OCCUR.
THE DEPARTMENT OF THE TREASURY REMAINS FULLY CONIMITTED
TO THE RECOMMENDATIONS OF THE SECRET SERVICE REGARDING
SECCRITY MEASlJRES AT THE WHITE HOUSE. THAt'ITZ YOU.
o
federal financillQ
WASHINGTON, D.C
20220
bonkNEWS
FEDERAL FINANCING BANK
February 28, 2001
Kerry Lanham, Secretary, Federal Financing Bank (FFB) ,
announced the following activity for the month of January 2001.
FFB holdings of obligations issued, sold or guaranteed by
other Federal agencies totaled $39.4 billion on January 31, 2001,
posting a decrease of $1,226.7 million from the level on December
31, 2000.
This net change was the result of a decrease in
holdings of agency debt of $963.0 million, in holdings of agency
assets of $200.0 million, and in holdings of governmentguaranteed loans of $63.7 million.
FFB made 65 disbursements
during the month of December.
FFB also received 10 prepayments
in January, and extended the maturity of 109 loans guaranteed by
the Rural Utilities Service.
In addition, FFB processed 7
refinancings and 4 buydowns during the month of January.
Attached to this release are tables presenting FFB January
loan activity and FFB holdings as of January 31, 2001.
PO-lOl
<n
0
(J)
L{)
N
'7
N
N
N
N
N
'f
N
'f
N
0
N
o
rJl
rJl
2:'
0..
N
aJ
LL
LL
Page 2
FEDERAL FINANCING BANK
JANUARY 2001 ACTIVITY
Borrower
Date
Amount
of Advance
Final
Maturity
Interest
Rate
AGENCY DEBT
NATIONAL CREDIT UNION ADMIN.
-
National Credit Union
CLF
1/30
$4,000,000.00
4/30/01
5.239% S/A
1/02
1/05
1/05
1/08
1/08
1/09
1/09
1/10
1/11
1/11
1/12
1/16
1/19
1/19
1/22
1/22
1/23
1/23
1/24
1/24
1/25
1/25
1/26
1/26
1/29
$67,700,000.00
$175,000,000.00
$379,600,000.00
$400,000,000.00
-$ 5 9 , 800 , 000 . 00
$480,000,000.00
$160,600,000.00
$515,300,000.00
$120,000,000.00
$241,900,000.00
$304,200,000.00
$100,700,000.00
$165,000,000.00
$417,900,000.00
$530,000,000.00
$359,600,000.00
$400,000,000.00
$254,800,000.00
$195,000,000.00
$325,300,000.00
$140,000,000.00
$165,600,000.00
$680,000,000.00
$193,300,000.00
$92,900,000.00
1/03/01
1/08/01
1/08/01
1/09/01
1/09/01
1/10/01
1/10/01
1/11/01
1/12/01
1/12/01
1/16/01
1/17/01
1/22/01
1/22/01
1/23/01
1/23/01
1/24/01
1/24/01
1/25/01
1/25/01
1/26/01
1/26/01
1/29/01
1/29/01
1/30/01
5.999%
5.811%
5.246%
5.498%
5.311%
5.246%
5.363%
5.415%
5.363%
5.435%
5.453%
5.509%
5.488%
5.360%
5.404%
5.353%
5.360%
5.363%
5.353%
5.405%
5.363%
5.404%
5.405%
5.298%
5.239%
1/25
1/25
1/29
$3,406.96
$2,265,895.21
$466,192.00
10/01/26
1/30/02
11/02/26
5.763% S/A
4.976% S/A
5.734% S/A
1/18
1/19
$103,020.69
$95,508.37
9/04/29
9/04/29
5.505% S/A
5.443% S/A
U.S. POSTAL SERVICE
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
GOVERNMENT-GUARANTEED LOANS
GENERAL SERVICES ADMINISTRATION
Chamblee Office Building
Atlanta CDC Lab
rCTC Building
DEPARTMENT OF EDUCATION
Tougaloo College
Tougaloo College
Page 3
FEDERAL FINANCING BANK
JANUARY 2001 ACTIVITY
Borrower
Date
Amount
of Advance
Final
Maturity
Interest
Rate
RURAL UTILITIES SERVICE
*Allegheny Electric #255
*Allegheny Electric #255
*Allegheny Electric #255
*Allegheny Electric #255
*Allegheny Electric #255
*Allegheny Electric #908
*Allegheny Electric #908
*Allegheny Electric #908
*Allegheny Electric #908
*Allegheny Electric #908
*Allegheny Electric #908
*Allegheny Electric #908
*Allegheny Electric #908
*Allegheny Electric #908
*A & N Electric #584
*Big Sand Elec. #540
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
$3,192,291. 59
$1,162,288.61
$930,365.56
$4,760,484.16
$1,640,168.38
$825,689.49
$2,526,547.99
$3,731,214.18
$1,214,809.40
$1,492,906.67
$4,128,075.80
$3,957,205.92
$2,343,043.76
$5,008,599.29
$1,982,000.00
$800,000.00
$3,286,889.20
$1,459,897.55
$363,065.68
$837,433.10
$1,093,428.16
$728,154.36
$418,649.59
$782,699.40
$942,588.08
$303,955.26
$220,598.75
$377,841.93
$221,447.08
$158,660.66
$138,224.86
$75,729.57
$114,434.40
$36,831.87
$1,215,529.44
$50,568.99
$243,235.18
$917,530.70
$2,748,382.00
$1,645,931.47
$986,406.11
$595,568.00
$923,036.73
$501,468.53
$1,446,952.89
$1,743,392.98
$2,042,558.00
$835,618.67
$639,280.38
$422,549.52
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
4/02/01
4/02/01
4/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
5.775%
5.775%
5.775%
5.775%
5.775%
5,882%
5.882%
5.882%
5.775%
5.775%
5.775%
5.775%
5.775%
5.775%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Page 4
FEDERAL FINANCING BANK
JANUARY 2001 ACTIVITY
Borrower
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #437
*Brazos Electric #437
*Brazos Electric #437
*Brazos Electric #437
*Brazos Electric #437
*Brazos Electric #561
*Brazos Electric #561
*Codington-Clark Elec. #551
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
*Central Elec. Power #624
*Central Elec. Power #624
*Clark Energy Coop. #611
*Clark Energy Coop. #611
*Consolidated Eled. #658
Delaware County Elec. #682
*Fleming-Mason Energy #644
*Farmers Telephone #399
*Grayson Rural Elec. #619
*Harrison County #532
*Harrison County #532
*Inter-County Energy #592
*Inter-County Energy #592
*Jackson Energy #527
*Jackson Energy #527
*Johnson County Elec. #482
*Meade County Elec. #662
*New Horizon Elec. #473
*New Horizon Elec. #473
*New Horizon Elec. #473
*New Horizon Elec. #473
*New Horizon Elec. #473
*New Horizon Elec. #473
*New Horizon Elec. #473
*Nolin Rural Elec. #528
*Nolin Rural Elec. #577
*Oglethorpe Power #445
Date
Amount
of Advance
Final
Maturity
Interest
Rate
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
$1,133,705.16
$1,473,054.86
$2,421,776.85
$2,592,246.60
$508,287.69
$16,446.59
$867,153.49
$2,840,913.63
$2,226, 27l. 79
$4,148,359.77
$1,401,870.10
$317,983.67
$3,045,965.50
$1,176,340.26
$11,085,156.02
$5,579,415.70
$500,000.00
$132,532.02
$135,633.78
$217,162.65
$95,633.14
$114,392.70
$4,686.57
$2,920,000.00
$2,075,000.00
$1,000,000.00
$3,000,000.00
$1,000,000.00
$364,000.00
$2,600,000.00
$1,840,878.37
$1,200,000.00
$1,000,000.00
$900,000.00
$1,500,000.00
$2,000,000.00
$2,000,000.00
$2,000,000.00
$1,600,000.00
$1,300,000.00
$5,060,054.21
$1,355,063.78
$2,192,080.75
$6,496,857.45
$3,308,758.95
$6,743,426.20
$1,702,388.38
$1,893,000.00
$2,583,000.00
$28,067,933.92
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
12/31/01
1/03/06
1/03/06
1/03/06
1/03/06
1/03/06
1/03/06
4/02/01
4/02/01
1/03/11
1/03/11
1/02/35
12/31/01
4/02/01
12/31/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
1/03/11
1/03/11
12/31/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
12/31/02
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
6.007%
6.007%
6.007%
6.007%
6.007%
6.007%
5.882%
5.882%
5.278%
5.009%
5.009%
5.006%
5.006%
5.006%
4.999%
5.882%
5.882%
5.086%
5.086%
5.417%
5.277%
5.882%
5.404%
5.882%
5.882%
5.882%
5.882%
5.882%
5.086%
5.086%
5.401%
5.882%
6.007%
6.007%
6.007%
6.007%
6.007%
6.007%
6.007%
5.882%
5.882%
5.206%
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Page 5
FEDERAL FINANCING BANK
JANUARY 2001 ACTIVITY
Borrower
*oglethorpe Power #445
*Owen Electrlc #525
*piedmont Tel. #566
*Saluda River Elec. #472
*San Miguel Electric #919
*San Miguel Electric #919
southeastern Indiana #496
*Shelby Energy Coop. #607
*Shelby Energy Coop. #607
*Steele-Waseca Coop. #550
*Steele-Waseca Coop. #550
*Surry-Yadkin Elec. #534
*Surry-Yadkin Elec. #534
*Surry-Yadkin Elec. #534
*Surry-Yadkin Elec. #534
*Tri-State E.M.C. #503
*Upsala Coop. Tele. #429
Central Power Elec. #451
Hamilton County Elec. #686
Morgan County Elec. #539
Grayson Rural Elec. #619
Jackson Energy #527
Charles Mix Elec. #630
Ocmulgee Electric #654
Inter-County Energy #592
Washington Electric #655
Farmer's Rural Elec. #657
+Tri-State #915
Atchison-Holt Elec. #673
Central Florida Elec. #521
Coweta-Fayette Elec. #620
S. Central Arkansas #605
Alabama Electric #695
Cumberland Electric #623
North Star Elec. #495
Fleming-Mason Energy #644
Grundy County Elec. #689
Jefferson Energy #692
Whetstone Valley #571
Farmer's Rural Elec. #657
A & N Electric #584
Ci ti zens Tel (VA) #680
Marlboro Elec. #642
Tri-County Elec. TN #647
Hawkeye Tri-County Elec. #643
N. Pittsburgh Tele. #449
Carbon Power & Light #533
Consolidated Eled. #658
Owen Electric #525
Primelink #700
Date
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/02
1/05
1/05
1/05
1/08
1/08
1/09
1/09
1/11
1/11
1/12
1/12
1/17
1/17
1/17
1/22
1/23
1/23
1/23
1/24
1/24
1/24
1/24
1/25
1/26
1/26
1/26
1/26
1/29
1/29
1/30
1/30
1/30
1/30
Amount
of Advance
$22,949,044.43
$3,000,000.00
$271,667.00
$1,263,748.58
$8,560,098.76
$8,988,203.86
$2,150,000.00
$1,000,000.00
$1,300,000.00
$3,695,000.00
$914,000.00
$1,000,000.00
$1,000,000.00
$500,000.00
$1,000,000.00
$698,405.47
$259,397.16
$111,000.00
$1,326,000.00
$515,000.00
$600,000.00
$5,000,000.00
$190,000.00
$1,000,000.00
$2,607,000.00
$250,000.00
$4,602,000.00
$4,610,752.08
$698,000.00
$3,800,000.00
$13,000,000.00
$958,000.00
$129,676,000.00
$3,500,000.00
$1,402,000.00
$1,400,000.00
$400,000.00
$8,220,000.00
$300,000.00
$451,000.00
$367,000.00
$336,000.00
$1,000,000.00
$6,200,000.00
$608,000.00
$1,552,000.00
$1,100,000.00
$943,000.00
$2,000,000.00
$4,226,000.00
Final
Maturity
Interest
Rate
12/31/02
1/03/34
1/03/11
4/02/01
4/02/01
4/02/01
1/03/33
1/03/06
1/03/06
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
4/02/01
1/03/33
4/02/01
12/31/29
1/02/35
1/03/34
7/02/01
3/31/11
12/31/30
1/02/35
7/02/01
1/02/35
1/02/35
1/03/23
1/02/35
1/03/33
3/31/08
1/03/34
12/31/25
3/31/06
1/03/33
7/02/01
1/02/35
1/02/35
1/02/29
1/02/35
12/31/30
12/31/15
1/02/35
3/31/06
1/02/35
12/31/12
3/31/16
1/02/35
12/31/01
1/03/17
5.206%
5.417%
5.084%
6.007%
5.882%
5.882%
5.500%
4.965%
4.965%
5.882%
5.882%
5.882%
5.882%
5.882%
5.882%
5.541%
6.007%
5.497%
5.385%
5.383%
4.959%
4.894%
5.330%
5.347%
5.142%
5.430%
5.491%
5.347%
5.549%
5.545%
5.179%
5.504%
5.524%
4.855%
5.675%
5.138%
5.600%
5.600%
5.588%
5.617%
5.562%
5.276%
5.566%
4.931%
5.591%
5.263%
5.317%
5.626%
4.753%
5.351%
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Page 6
FEDERAL FINANCING BANK
JANUARY 2001 ACTIVITY
Borrower
@Dairyland
@Dairyland
@Dairyland
@Dairyland
Power
Power
Power
Power
#161
#161
#173
#173
Date
Amount
of Advance
Final
Maturity
Interest
Rate
1/31
1/31
1/31
1/31
$8,474,275.28
$15,253,025.20
$419,748.05
$1,927,069.64
12/31/20
1/03/22
12/31/20
1/03/22
5.519%
5.547%
5.519%
5.547%
S/A is a Semiannual rate.
Qtr. is a Quarterly rate.
@ interest rate buydown
* maturity extension or interest rate reset
+ 306C refinancing
Qtr.
Qtr.
Qtr.
Qtr.
Page 7
FEDERAL FINANCING BANK HOLDINGS
(in millions of dollars)
Program
January 31, 2001
December 31, 2000
Monthly
Net Change
1/1/01- 1/31/01
Fiscal Year
Net Change
10/1/00- 1131/01
Agency Debt:
U.S. Postal Service
National Credit Union Adm.-ClF
Subtotal*
$6,550.0
$4.0
$6,554.0
$7,517.0
$0.0
$7,517.0
-$967.0
$4.0
-$963.0
-$2,712.0
$4.0
-$2 ,708. 0
Agency Assets:
FmHA-RDIF
FmHA-RHIF
DHHS-Medical Facilities
Rural Utilities Service-CBO
Subtotal *
$3,070.0
$5,155.0
$0.5
$4,326.9
$12,552.4
$3,150.0
$5,275.0
$0.5
$4,326.9
$12,752.4
-$80.0
-$120.0
$0.0
$0.0
-$200.0
-$340.0
-$385.0
-$0.2
$0.0
-$725.2
Government-Guaranteed lending:
DOD-Foreign Military Sales
DoEd-HBCU+
DHUD-Community Dev. Block Grant
DHUD-Public Housing Notes
General Services Administration+
DOl-Virgin Islands
DON-Ship lease Financing
Rural Utilities Service
SBA-State/local Development Cos.
DOT-Section 511
Subtotal*
$2,325.1
$22.5
$9.7
$1,278.7
$2,292.8
$13.6
$949.1
$13,197.4
$149.7
$3.5
$20,241. 9
$2,355.6
$22.3
$9.8
$1,278.7
$2,295.3
$14.7
$1, 047.5
$13,126.1
$152.2
$3.5
$20,305.7
-$30.5
$0.2
-$0.2
$0.0
-$2.6
-$1.1
-$98.4
$71.2
-$2.4
$0.0
-$63.7
-$65.4
$1.8
-$1.1
-$69.8
-$19.8
-$1.1
-$98.4
$207.9
-$9.4
$0.0
-$55.4
Grand total*
$39,348.3
$40,575.0
-$1, 226.7
-$3,488.6
* figures may not total due to rounding
+ does not includ~ capitalized interest
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N. W.' WASHINGTON, D.C.' 2.0220. (2.02)
iKBARGOIm UNTIL 2:30 P.K.
March 21, 2001
CON'rACr:
622.296~
Offico of Pi=anci~g
202/G91-aSSO
'l'RZAStlXY 'l'O At1CT:ION $J.1,000 Ml:LLION 01" 2-YKAR !iO'l'ES
The ~~easur.Y ~ll .uc~ioD $11,000 ~llion of 2-year notes to refund $30,047
million ef publicly hela securities maturing"Karch 31, 2001, acd to pay down about
$19,047 millie:.
Zn addition to the public holdings, Federal Reserve Sanks hold $5,739 million
of the maturin~ securities for their own accoUnts, which may be refu:cded by' issuing
an additiocal amount ef the DeW security.
U,p to $1,000 ~lJ.ion ~ DQDcompetitive ~ids from ForeigD ~d ~ter.nat~onal
IiJonetary Authority (J'mA) accounts bi&1ing through the Federal Reserve Bank of Hew
York will :be iDcluded Within the offering amount of the auction. These
noncompetitive bids will have a limit of $20"0 million per account and wi.ll be
accepted in the order of smallest to largest, up to the aggregate award limit of
$1,000 millio~.
~4sur,y.Direct
of
customers requested that we reinvest
i:to the 2-year DCce.
tbei~ matur~g hol~s
ap,prox~te1y $'~2 ~llio:
The auction will he conducted in the single-price auction for.mat. All eampetitiV8 and noncompetitive awards will De at the highest yield of accepted competitive
tanders.
The notes
~iAg
offered today are
elig~le
for the
s~~~S
program.
This offering of 'l'reasw:y se~ities is gove:rned by the t"e:r:ms and conditions
the uni£o:m Offeri~g Circular for cAe Sale ana Issue of Marketable Book2z:ltzy 'l:easu:y Bill.s, l!i1'otes, and. Bonds (31 en Part 356, as amended).
set
fo~h i~
Details about the new security are given in "the attached offering highiights.
000
PO-I02
~or press releases, speeches, pJlblic schedules and Official biographies, call our 24-hoU7 fax line at (202) 622-2040
lUGHLIGE'I'S OF TREASURY OFPERmG 'l'O THE POBLIC OF
2-YEAR NOTES TO BE ISSUED APRIL 2, 2001
March 21, 200l
offering AmOunt .••••.••••••••••••••••••••••••• $11,000 million
Description of Offering:
Ter.m and type of security ••••••••••••••••••••• 2-year no~8S
Serie:;s. •••..•.. ,. . . . . . . . . . . . . . . . . . . _ .............. N-2003
COSIP number ••.••••••••.•••••••••••••••••••••• 912827 6V 9
Auct.ion 4at.e •••••••••••.•.••...••••.••••..•.•. March 28, 2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . •• April 2, 200l.
Dat.ed dat.e •••..••.•••••••••••••••••.•••••••••• March 31, 2001
Maturity dat.e •.•••••••••••••••••••••.••••••••• Karch 31, 2003
Interest rat.e ••••••••••.•••••••••••••••••••••• Deter.mined based on the highest
.ccepted =ampet.~t.ive ~id
Yield ••••••••••••••••••..•..•..•••••.•••••••• D8~er.min8d at auction
Int.erest payment dates ••••••••••••••••••••••• September 30 and March 31
Minimum bid amount and multiples •••••.•••••••• $1,000
Accrued interest payable by investor •••.•••••• Determined at auction
Premium or discoun~ ••••.•.•••••••••••••••.•••. Deter.mined at. auc~ion
STRIPS Z:formation:
Minirn,m amount required .•••••••••••••••••.•••• $1,000
Corpus COSXP number •••.•••••••••••••••••••••. 912820 GE 1
Due aate(s) and COSIP number(s)
for addit.ional TINT(s) •••••••••••••••••••••. Not applicable
Submission of Bids~
Noncompetitive bids:
A~~epted in full up to $S million at the highest accepted yield.
Foreign and International MOneea.:ry Authority (.P'ntA) bids: Noncompetitive bids
s~tted through the Federal Rese~' Eanks as agents for 7XHA a~coUDts.
Accepted in order of size from smallest to largest with no more t.han $200
~l1ion awarded per account.
The ~otal noncompetitive amount awarde4 to Federal
Reserve Banks as agents' for p~ ac~ounts will net exceed $1,000 million. A
s1ngle bid that would cause the l~t to be ex~eeded will be partially accept.ed
in the amount that briDgS ebe aggregate award total to the Sl,OOO million limit.
Rowa~er, if there are two or more bids of equal amounts that would cause the
l~t to be exceeded, each will be prorated t.o avoid exceedin~ the limit.
Campeti~ive bids:
(1) MUst be expressed as a yield wi~h ~hree decimals, e.g., 7.123%.
(2) Net: long positioz:!. for each. bidder must be reported when. the su:m of the total
bid amount. at all yields, and the net. long position is $2 billion or greater.
(3) Het. long posi~ion must be dete:r::mined as of one half-hour prior to t.he
closing t.ime for receipt of ccmpetitive tenders.
Maximum Re~ognized Bid at a Single yield ••••••.•••. 35% of public offeri~
~ Award .••••••••••.••••••••.••••••••••••••••• 35% of public offering
Receip~
of Tenders:
Noncampet.itive tenders: ~rior to 12:00 noon eastern standard time en auction day.
Co=peti~ive tenders:
Prior to 1;00 p.m. eastern standard time on auction day.
Payment Tena.s: By charge to a. fUl:lds account at a. Federal ReseZ'VG BaJl1I: on issue eate,
or payment of full par amount with tender. ~reasur,y.D~xect customerS can use the pay
~~rec~ fe~ture whiCh aU:hor~zes a c~arge ~o ~e~r accoun~ Of recorQ a~ ~~i.
f~ancial ins~i~ut.ion on issue date.
DEPARTMENT
OF
THE
TREASURY
OFFICE 01 PUBLIC .-\tl'llAIRS -ISOU t>ENNSYLVAN1.o\ ''-VENUE. N.W •• WASHINGTON, O.C •• ZlIllO. (:112) 622-1960
FOR IMMEDIATE RELEASE
March 22, 2001
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960
TREASURY DEBT BUYBACK OPERATION RESULTS
Today, Treasury completed a debt buyback (redemption) operation for $1,750 million
par of its outstanding issues. A total of 11 issues maturing between February 2023 and
November 2027 were eligible for this operation. The settlement date for this operation will
be March 26, 2001. Summary results of this operation are presented below.
(amounts in millions)
Offers Received (Par Amount) :
Offers Accepted (Par Amount) :
Total Price Paid for Issues
(Less Accrued Interest) :
Number of Issues Eligible:
For Operation:
For Which Offers were Accepted:
Weighted Average Yield
of all Accepted Offers
(%):
Weighted Average Maturity
for all Accepted Securities (in years) :
$3,750
1,750
2,118
11
10
5.395
24.4
Details for each issue accompany this release.
?O-l03
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
March 22. 2001
TREASURY DEBT BUYBACK OPERATION RESULTS
(amounts in millions, prices in decimals)
Table I
Coupon
E,S!,te ('.I;)
7.125
6.250
7.500
7.625
6.875
6.000
6.750
6.500
6.625
6.375
6.125
Maturity
Da t e
02/15/2023
08/15/2023
11/15/2024
02/15/2025
08/15/2025
02/15/2026
08/15/2026
11/15/2026
02/15/2027
08/15/2027
11/15/2027
Weighted
Average
Accepted
Par
Amount
Off ere d
Par
Amount
Acceoted
Highest
Accepted
~
~
546
586
371
308
334
300
270
320
110
310
295
340
10
295
257
163
0
155
155
40
200
135
122.265
110.984
128.093
129.937
120.000
N/A
118.593
115.187
117.078
113.718
110.218
122.142
110.984
127.975
129.776
119.908
N/A
118.538
115.167
117.047
113.658
110.189
Weighted
Average
Accepted
Yield
Par Amount
Privatelv He1d*
5.389
5.398
5.392
5.393
5.397
N/A
5.400
5.400
5.395
5.398
5.399
14.369
21.106
8.249
9.411
9.916
11.723
8.689
9.574
9,020
8.556
19.015
Table II
Coupon
Rate ('.I;)
Maturity
Date
CUSIP,
Number
Lowest
Accepted
Yield
7.125
6.250
7.500
7.625
6.875
6.001)
6.750
6.500
6.625
6.375
6.125
02/15/2023
08/15/2023
11/15/2024
02/15/2025
08/15/2025
02/15/2026
08/15/2026
11/15/2026
02/15/2027
08/15/2027
11/15/2027
912810EP9
912810EQ7
912810ES3
912810ET1
912810EV6
912810EW4
912810EX2
912810EYO
912810EZ7
912810FA1
912810FB9
5.381
5.398
5.384
5.383
5.391
N/A
5.396
5.399
5.393
5.394
5.397
Total Par Amount Offered:
Total Par Amount Accepted:
3.750
1.750
Note: Due to rounding. details may not add to totals.
*Amount outstanding after operation. Calculated using amounts reported on announcement.
DEPARTMENT
I
OF
THE
TREASURY
NEWS
TREASURY
01<'FICE 01<' PUBLIC AFI<'AIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.- 20220 _ (202) 622.2960
'm
EMBARGOED UNTIL 2:30 P.M.
March 22, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction two series of Treasury bills totaling
approximately $17,000 million to refund $20,262 million of publicly held
$ecurities maturing March 29, 2001, and to pay down about $3,262 million.
In addition to the public holdings, Federal Reserve Banks for their own
accounts hold $9,557 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders. Amounts awarded
to these accounts will be in addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
ReserVe Bank of New York will be included within the offering amount of each
auction. These noncompetitive bids will have a limit of $200 million per
account and will be accepted in the order of smallest to largest, up to the
aggregate award limit of $1,000 million. '
TreasuryDirect customers have requested that we reinvest their maturing
holdings of approximately $9~7 million into the 13-week bill and $1,145
million into the 26-week bill.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) .
Details about each of the new securities are given in the attached
offering highlights.
000
Attachment
PO-104
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED MARCH 29, 2001
March 22, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . . . . $9,000 million
Description of Offering:
Term and type of security ..............
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . .
Auction date . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity date . . . . . . . . . . . . . . . . . . . . . . . . . .
Original issue date . . . . . . . . . . . . . . . . . . . .
Currently outstanding ..................
Minimum bid amount and mUltiples .......
91-day bill
912795 GN 5
March 26, 2001
March 29, 2001
June 2B, 2001
December 2B, 2000
$14,511 million
$1,000
$B,OOO million
1B2-day bill
912795 HQ 7
March 26, 2001
March 29, 2001
September 27, 2001
March 29, 2001
$1,000
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted
through the Federal Reserve Banks as agents for FIMA accounts. Accepted in order of size
from smallest to largest with no more than $200 million awarded per account. The total
noncompetitive amount awarded to Federal Reserve Banks as agents for FIMA accounts will
not exceed $1,000 million. A single bid that would cause the limit to be exceeded will
be partially accepted in the amount that brings the aggregate award total to the $1,000
million limit. However, if there are two or more bids of equal amounts that would cause
the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g.,
7.100%, 7.105%.
(2) Net long position for each bidder must be reported when the sum of the total bid amount,
at all discount rates, and the net long position is $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the closing time for
receipt of competitive tenders.
Maximum Recognized Bid at a Single Rate ... 35% of public offering
Maximum Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% of public offering
Receipt of Tenders:
Noncompetitive tenders .. Prior to 12:00 noon eastern standard time on auction day
Competitive tenders ..... Prior to 1:00 p.m. eastern standard time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment
of full par amount with tender. TreasuryDirect customers can use the Pay Direct feature which
authorizes a charge to their account of record at their financial institution on issue date.
OFFICE OF PUBLIC AF}'AIRS e1500 PENNSYLVANIA AVENUE, N.W. e WASHINGTON, D.C.e 20220 e (202) 622-2960
EMBARGOED UNTIL 2:30 P.M.
March 22, 2001
Contact:
Office of Financing
202/691-3550
TREASURY TO AUCTION CASH MANAGEMENT BILLS
The Treasury will auction approximately $40,000 million of 21-day
Treasury cash management bills to be issued March 29, 2001.
Tenders will not be accepted for bills to be maintained on the book-entry
records of the Department of the Treasury (TreasuryDirect).
Up to $1,000 million in noncompetitive bids from Foreign and International
Monetary Authority (FIMA) accounts bidding through the Federal Reserve Bank of
New York will be included within the offering amount of the auction. These
noncompetitive bids will have a limit of $200 million per account and will be
accepted in the order of smallest to largest, up to the aggregate award limit
of $1,000 million.
The auction being announced today will be conducted in the single-price
auction format.
All competitive and noncompetitive awards will be at the
highest discount rate of accepted competitive tenders.
NOTE:
Competitive bids in cash management bill auctions must be
expressed as a discount rate with two decimals, e.g., 7.10%.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) .
Details about the new security are given in the attached offering
highlights.
000
Attachment
PO-lOS
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERING
OF 21-DAY CASH MANAGEMENT BILLS
March 22, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . $40,000 million
Description of Offering:
Term and type of security . . . . . . . . . .
CUSIP number . . . . . . . . . . . . . . . . . . . . . . .
Auction date . . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity date . . . . . . . . . . . . . . . . . . . . . .
Original issue date . . . . . . . . . . . . . . . .
Currently outstanding . . . . . . . . . . . . . .
Minimum bid amount and multiples ...
21-day Cash Management Bill
912795 GC 9
March 27, 2001
March 29, 2001
April 19, 2001
October 19, 2000
$60,012 million
$1,000
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest
discount rate of accepted competitive bids.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted through the Federal Reserve Banks as agents for
FIMA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account.
The total noncompetitive amount awarded to Federal Reserve Banks as agents for
FIMA accounts will not exceed $1,000 million. A single bid that
would cause the limit to be exceeded will be partially accepted in
the amount that brings the aggregate award total to the $1,000
million limit. However, if there are two or more bids of equal
amounts that would cause the limit to be exceeded, each will be
prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with two decimals, e.g.,
7.10%.
(2) Net long position for each bidder must be reported when the
sum of the total bid amount, at all discount rates, and the net
long position is $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior
to the closing time for receipt of competitive tenders.
Maximum Recognized Bid at a Single Rate:
Maximum Award:
35% of public offering
35% of public offering
Receipt of Tenders:
Noncompetitive tenders:
Prior to 12:00 noon eastern standard time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern standard time on auction day
Payment Terms: By charge to a funds account at a Federal Reserve Bank
on issue date, or payment of full par amount with tender.
DEPARTl\·'lENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASInNGTON, D.C. - 20220 - (202) 622-2960
March 23,2001
FOR IMMEDIATE RELEASE
Contact: Tara Bradshaw
202-622-2960
TREASURY RELEASES LATEST NUMBER OF TAXPAYERS BY STATE
Attached is a state-by-state breakdown of the number of filers who paid income taxes for
tax year 1999. The data were compiled by the Internal Revenue Service based on income tax
returns filed in the year 2000 for tax year 1999. From these data it is evident that at least 98
million taxpayers stand to benefit from the President's tax relief plan.
-30-
PO-106
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s
Government Printing Office 1998 - 619-559
Individual Income Tax Returns Filed for 1999 with Income Tax After Non-Refund Credits
(Number of returns in thousands)
1bis table shows the l1lunber of returns that had positive income tax (including alternative minimum
tax) after non-refundable credits (such as the child credit). This number of taxpayers in each state
therefore stands to benefit from the President's tax relief plan.
United States
97,957
Alabama
Alaska
Arizona
Arkansas
California
1,354
282
1,603
787
10,957
Missouri
North Carolina
North Dakota
Nebraska
Nevada
1,945
2,735
231
631
730
Colorado
Connecticut
Delaware
Florida
Georgia
1,633
1,374
299
5,456
2,663
New Hampshire
New Jersey
New Mexico
New York
Ohio
507
3,231
539
6,473
4,417
Hawaii
Idaho
Illinois
Indiana
Iowa
433
405
4,493
2,193
1,072
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
1,047
1,192
4,491
385
1,310
Kansas
Kentucky
Louisiana
Maine
Maryland
954
1,286
1,278
465
2,020
South Dakota
Tennessee
Texas
Utah
Vermont
263
1,906
6,384
693
232
Massachusetts
Michigan
Minnesota
Montana
Mississippi
2,540
3,600
1,927
299
786
Virginia
Washington
Wisconsin
West Virginia
Wyoming
2,619
2,193
2,087
546
176
District of Columbia
Other Areas
210
625
Notes
The figures in the table were tabulated from all individual income tax returns filed and processed through the IRS
Individual Master File (IMF) during calendar year 2000. Most returns filed in 2000 were for tax year 1999.
Classification by state was based on the address used on the return. Usually this address is the taxpayer's home
address. However, some taxpayers may have used the address of a tax attorney or accountant, or a place of
business, and that address could be in a different state than the taxpayer's home.
prxxu REMARKS-B¥-1'H£CHAIRMAN OF THE BOARDS OF GOVERNORS OF TH.. Page 1 of 5
FROM THE OFFICE OF PUBLIC AFFAIRS
FOR IMMEDIATE RELEASE
March 18, 2001
PO-I07
REMARKS BY THE CHAIRMAN OF THE BOARDS OF GOVERNORS OF THE
INTER-AMERICAN DEVELOPMENT BANK AND THE
INTER-AMERICAN INVESTMENT CORPORATION
AT THE SANTIAGO INAUGURAL SESSION
William E. Schuerch
President Iglesias, my fellow Governors, ladies and gentlemen:
1. I would like to begin by thanking the Chilean authorities and Minister Nicolas
Eyzaguirre for hosting this meeting and on behalf of President Iglesias and fellow
Governors to say how pleased we are to be in the beautiful city of Santiago.
2. The United States would like to express 'its appreciation for the honor of chairing the
Board of Governors during a challenging and successful year for Latin America and the
Caribbean and for the Inter-American Development Bank.
3. During the campaign, President Bush promised to look to the South "as a fundamental
commitment" of his presidency and to make the next hundred years the "Century of the
Americas." Increased trade, free-markets and democracy are at the heart of President
Bush's strategy to achieve this goal. President Bush desires an equal partnership with all
of the countries in Latin America based on mutual respect and trust. Secretary O'Neill
and the entire Treasury team are strongly committed to working with each partner
country to make the Inter-American Development Bank even more effective at
development and poverty reduction. The U.S. has always played an important role in the
success and effectiveness of the IDB, and the new Administration will continue its
leadership and support for reform and growth.
4. Last year in New Orleans, we reflected on what the previous decade had meant to Latin
America, on how it was a period of reform, a period when governments began to
embrace free markets and global integration. Even during times of difficulty, when
reform historically has waned, many governments pushed forward.
5. And the reward for this reform was growth. Latin America's GDP grew just shy of 4
percent per year in the 1990s, well above the 2.2 percent of the Eighties.
• Brazil's balance of payments crisis just two years ago was greatly
diminished due to appropriate and quickly implemented policies that
reassured both investors and consumers. Today, Brazil is expected to have
PrxXAX REMARKS
BY +RE CHAIRMAN OF THE BOARDS OF GOVERNORS OF TH.. Page 2 of 5
one of the highest growth rates and lowest inflation rates in the region.
• In 1998, when sinking oil prices jeopardized Mexico's budget deficit target,
the government cut spending on three different occasions. Market
confidence increased, and Mexico received an investment grade rating in
March 2000.
• And of course, Chile stands out as an example of how appropriate policies
can alter the course of an economy. I first visited Chile in 1981, when the
face of economic hardship could be seen in the empty shops and closed
down businesses. That is clearly not the case today. Now we see a vibrant
economy nurtured by extensive, sustained economic refonns.
6. Unfortunately, there is a danger that governments will think that the
refonns undertaken and the economic resiliency achieved over the
past decade need only be maintained, that increased market openness
is unnecessary or, even worse, at odds with social development. This
is particularly relevant as elections approach in many countries in the
region. If there is one lesson we should have learned from the efforts
made over the past several years, it is that prudent macroeconomic
policies, an open trading environment, and healthy financial markets
are necessary conditions for strong and sustainable growth. We have
also learned that growth, if it is to last, can be -- and must be -accompanied by policies that ensure that benefits are shared by all
segments of society.
Fiscal and Monetary Discipline
Highlighting the importance of prudent fiscal and
monetary policy to an audience such as this is stating the
obvious. Many countries in the region have had to
undertake painful but necessary steps to compensate for a
history of fiscal or monetary excess. Yet, even as fiscal
deficits shrink throughout much of the region, even as
inflation continues to decline to levels generally on par
with many industrialized nations, the markets still require
a premium for past digressions. Only by continually
showing progress will this premium be reduced. To
backslide now would be a tragedy.
Trade and Integration
8. Trade with this hemisphere is a priority for President Bush. As the fonner
governor of a major border state, he has seen the free exchange of goods and
services across borders spark economic growth, opportunity, dynamism,
fresh ideas and democratic values. He understands that trade liberalization
can enable countries to benefit from expanding regional and global trade and
can help boost our collective recovery from the present economic slowdown.
For these reasons, President Bush has recently reaffinned the United States
Government's strong commitment to trade negotiations such as a Free Trade
Agreement with Chile and renewal of the Andean Trade Preference Act. The
Bush Administration is also looking forward to upcoming discussions on the
prxxxx REMARKS :BY THE' CHAIRMAN OF THE BOARDS OF GOVERNORS OF TH.. Page 3 of 5
Free Trade Area of the Americas at the Buenos Aires Trade Ministerial and
the Quebec Summit of the Americas.
National Balance Sheets
9.But prudent fiscal management is not a sufficient condition for economic
growth and resiliency. Governments need to focus beyond their own balance
sheets, to the economic health of the private sector and the nation overall.
1O.International capital flows, particularly to the private sector, can greatly
increase productive capacity by directing resources optimally. But with such
benefits come risks, namely the exposure of banks, finance companies and
individual firms to a loss of investor confidence or a sudden drying up of
capital. Government authorities must develop policies and regulations that
maintain the benefits of international capital flows while discouraging risky
private sector behavior.
Strengthening Financial Systems
11. Efforts to strengthen financial sectors are also vital. Latin American
countries were ahead ofthe curve when they committed in 1997 to
implement the Basle Core Principles. This relative strength of Latin banks is
one reason the region survived the financial turmoil of the past years with
less damage than elsewhere.
12. But more can and needs to be done. Latin American financial markets are,
by and large, relatively small and underdeveloped. Investment in domestic
financial institutions has often been limited by inadequate legal protection
for property rights or by les~ than robust regulatory and supervisory
frameworks. These changes will take time to develop but must begin now if
the financial systems are to encourage rather than impede growth.
13. Countries must work to implement high quality international standards to
bring their economies in line with best practices. Assessing where each of us
stands through the IMF and World Bank Report on Observance of Standards
and Codes (ROSC) programs is a good start.
14. The Financial Sector Assessment Program (FSAP) can also provide an even
more detailed assessment of the overall financial sector, including potential
vulnerabilities and potential development needs.
CHFI
I5.The Committee on Hemispheric Financial Issues was established in 1994
as a forum where Finance Ministers of the Hemisphere could meet and
discuss relevant economic and financial issues. We will meet in Toronto in
early April to discuss surveillance, globalization challenges, and the
continuing work needed in good governance.
Sound Policies, Transparency and Corruption
16.As our economies become more integrated with each other, there is an
increasing need to work individually and jointly to improve governance and
transparency of national institutions to foster greater growth and stability.
More can be done to deal with corruption, which adversely affects
prxX){'X
REMARKS BY THE CHAIRMAN OF THE BOARDS OF GOVERNORS OF TH .. Page 4 of 5
investment, public revenues, growth, and development.
Role of the IDB
17. The United States regards the IDB as a key player in promoting sound,
sustainable economic growth and improvement in living standards. We
strongly support the role that the Bank plays in promoting national and
regional development. Working with all its shareholders, the IDB has a
tremendous opportunity to help shape the way in which its borrowing
members address the common goals of sustained growth and poverty
reduction.
18. Important progress has been made in the past few years in achieving key
goals of the 8th Replenishment. We agree with focusing implementation on
four areas: social sector reform, modernization of the state, competitiveness
and regional integration. Implementation, however, must promote our
fundamental goals of poverty reduction, social equity and environmentally
sustainable growth.
19. The Bank's contribution to private sector development also has been
enhanced. The Inter-American Investment Corporation (lIC), reinvigorated
through the recent replenishment, is now welcoming five new members. Its
promotion of small and medium enterprise is important to the Bank's
poverty reduction mission. The Multilateral Investment Fund (MIF) plays a
unique role by financing small, targeted programs that playa critical role in
improving the environment for private sector growth, particularly for small
and micro enterprises.
Review of Policies and Instruments
20. Just as the region continues to face challenges, so too does the Bank.
Looking to the future, we need to be sure that the IDB's range of policies
and lending and non-lending instruments are meeting today's needs and are
ready for tomorrow's challenges. We welcome the recent discussion papers
and are ready to consider these and related MDB reform issues in the
context of a Governors' working group. We must keep in mind that the
world increasingly asks if development assistance really works. Taxpayers
are increasingly skeptical and frustrated with development programs that fail
to achieve results. "Are we getting what we've paid for?" is a legitimate
question that needs a solid answer, particularly as we consider new lending
programs, which propose to move even further away from traditional
investment approaches.
21. Appropriate Instruments. The appropriateness of existing instruments to
meet borrower development needs is an important question which includes
consideration of the need to increase the policy-based lending guidelines
beyond the current 15 percent. Some countries increasingly seek loans with
extremely short disbursement periods - substantially less than three years.
These accelerated disbursement patterns themselves pose special challenges
for prudential financial management of the Bank.
22. Country Programming should be the key mechanism for identifying needs,
setting priorities, and defining the Bank's role. While the process has been
strengthened, more needs to be done to ensure the relevancy of the Bank's
Country Papers and to make them more accessible to those atlected by Bank
prxXy..x REMARKS BY THE CHAIRMAN OF THE BOARDS OF GOVERNORS OF TH .. Page 5 of 5
programs.
23. Governance and Corruption. Another fundamental challenge to the Bank is
to strengthen accountability, transparency, due diligence and performance of
fiduciary obligations. In all areas of its operations, the IDB must be above
reproach. We expect quick and aggressive implementation of the recently
approved anti-corruption strategy and action plan. More work should target
improved transparency and accountability of public sector management.
24. IDB Role in Higher Income Countries. We also believe that the Bank needs
to review its policy regarding borrowing by high-income countries that have
strong likelihood of market access and have social and economic institutions
comparable to those of developed countries. Such countries should rely
primarily on market finance. We call upon the Bank to set out a spectrum of
options for consideration - including selective access and establishing price
differentiation.
HIPC Debt Relief
25. Finally, let us recognize that the Bank and shareholders have made
important progress this past year in ensuring the financing for the IDB's full
participation in the enhanced HIPC initiative. We now have an agreement
fostered by the Bank providing a financial framework that covers not only
the IDB's HIPC costs but also much of the needed assistance to sub-regional
financial institutions. President Bush's commitment to this process is
reflected by the inclusion ofthe full United States contribution in our current
budget proposals. The broad participation in this agreement by institutions
and shareholders celebrates our solidarity to assist the poorest countries.
26. The United States ends this year as chair of the Board of Governors, pleased
with the good progress made in the Bank's work and continuing in its
commitment to the Western Hemisphere. We look forward to working with
Chile as the next chair to continue the important work of the Bank - an
institution that greatly benefits from the leadership of President Enrique
Iglesias and Executive Vice President Burke Dillon. Thank you.
Search \ Email \ Trea~ury Home Page \ Sitemap
DEPARTMENT
OF
THE
TREASURY
NEWS
omCE OFPUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.· WASIllNGTON, D.C.• 20220. (202) 622-2960
FOR IMMEDIATE RELEASES
March 25, 2001
Contact: Treasury Public Affairs
(202) 622-2960
O'Neill to Divest Alcoa Holdings
In order to ensure that there at no bounds placed on him in addressing all issues related
To the nation's economic health, Treasury Secretary Paul O'Neill Friday instructed his counsel to
Begin divesting his holdings in securities of individual companies, including Alcoa aluminum.
O'Neill based his decision on his recognition that there is essentially no limit to the range
Of policy issues that impact the US economy and therefore come before him for review. "I never
want to be in a position where I can't advise the President as he makes a decision that's crucial to
the health of the US economy, " said O'Neill.
Secretary O'Neill has instructed his counsel to prepare a new commitment letter for the
Office of Government Ethics. The letter will pledge to terminate the Secretary's holdings in
secu~ties of individual companies, including Alcoa Aluminum. It will also reaffirm an earlier
commitment to recuse the Secretary from those extremely limited matters that that could directly
and predictably affect Alcoa's ability to fulfill its pension obligations to Mr. O'Neill.
PO-I08
Far press releases, speeches, public schedules and official biographies, call our 24·hour fax line at (202) 622-2040
'U
s. Governmellt Pnnt,ng Cifll:e:
1993 - 6 !9·55~
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
March 26, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
March 29, 2001
June 28, 2001
912795GN5
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.200%
High Rate:
Investment Rate 1/:
Price:
4.305%
98.938
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 15%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
19,046,350
1,277,046
12'2,000
$
9,001,896 2/
20,445,396
SUBTOTAL
$
TOTAL
5,359,929
5,359,929
Federal Reserve
25,805,325
7,602,850
1,277,046
122,000
$
14,361,825
Median rate
4.165%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.135%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
20,445,396 / 9,001,896
=
2.27
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,036,324,000
http://www.publicdebt.treas.gov
PO-lOg
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
March 26, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
182 -Day Bill
March 29, 2001
September 27, 2001
912795HQ7
4.120%
Investment Rate 1/:
4.266%
Price:
97.917
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 42%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
Tendered
$
22,383,927
1,436,222
259,000
$
4,197,375
4,197,375
Federal Reserve
$
28,276,524
6,311,917
1,436,222
259,000
8,007,139 2/
24,079,149
SUBTOTAL
TOTAL
Accepted
$
12,204,514
Median rate
4.100%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.095%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 24,079,149 / 8,007,139 = 3.01
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,201,706,000
PO-110
htfp://www.publicdebt.treas.gov
DEPARTMENT
OF
THE
TREASURY
.
~~7~9'. . . . . . . . . . . . . ..
................
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 9:20 A.M. EDT
Remarks as Prepared for Delivery
Address by
Treasury Secretary Paul O'Neill
to the
National Association of Business Economists
March 27, 2001
Good morning.
The American economy will remain the great engine of prosperity for the world because
innovation thrives here. If you have a good idea, this will always be the best place to make it
happen.
Why is this true? Because we have amazing flexibility in our capital and labor markets,
broader and deeper capital markets that match resources to good ideas faster than anywhere else
in the world, creating greater return on capital here than anywhere else in the world. We have
the world's most productive workers and the world's freest labor markets. Free markets,
productive labor and lower taxes will in tum keep capital flowing here, even during a downturn
like the one we are experiencing today.
The strength of the U.S. economy is not to be found in anyone asset price or anyone
number. The strength of the U.S. economy is in the flexibility and adaptability with which our
markets and our people develop new ideas and respond to new challenges.
Before we assess the current economic slow down I think it is important to put it in the
proper perspective. Of course you all know that this recent slowdown is still part of the longest
economic expansion in American history. That expansion began in March 1991, a full 10 years
ago!
PO-Ill
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Pflnilng OHice' 1998· 619-559
Our key challenge is to keep the US economy on the path to the highest possible
sustainable real rate of growth over the next 25 to 50 years. Perhaps the single most important
thing in economic policy is that we work to keep ourselves on a track of real growth rates at the
upper end of what most people believe is possible, because without that we are so hobbled in
doing the other things that we care about as a society. Growth makes our other goals more easily
attainable, whether its retirement security or income security. And reducing marginal tax rates is
one of the most important contributions to growth we can now make.
We've been doing pretty well, both recently and for the last 20 years.
The US economy has been the envy of the world because of the high rates of real growth
that we have achieved for most of the last two decade. Even in recent years, real GDP growth
accelerated to more than 4 percent a year since 1995 and the unemployment rate fell to the
lowest in 30 years. This occurred even as the inflation rate remained low and stable, with
consumer prices rising just 2-1/2 percent a year over the last five years.
America prospers because of the flexibility and adaptability of US markets. That is
government's role - to ensure the continued ability of US markets to adapt to new circumstances,
rise to new challenges, and embrace new ideas.
America's ever-increasing prosperity began in the early 1980s with the tax cuts,
deregulation and free-trade policies of the Reagan administration. I would take you back to
1980. There were lots of us out there in the world that makes real things who went and looked at
the rate of progress in some other countries around the world and were startled to find that, while
we were beating our breasts about how good we were, they were better. Let me tell you, fear of
competition and failure is a strong motivator. And we rose to the challenge. We incorporated
good ideas we discovered elsewhere, like just in time delivery. We welcomed new technology to
increase productivity.
And now out in the world where people make real goods, the US has recaptured the lead
and we are not ever going to back down again. Weare determined to lead the world. That is how
we have actually gotten the huge tax surpluses we have in Washington today. They've come
from hard-working Americans making things, creating jobs, improving productivity and
achieving higher wages.
The U.S. economy has experienced an extraordinary pickup in productivity growth
durlng the past five years. Since the end of 1995, the productivity oflabor in the non-farm
business economy has averaged a 2.9 percent annual rate - the strongest performance for any
five-year period since 1968 and more than double the 1.4 percent rate averaged from 1973
through 1995.
Growth of productivity has helped keep labor costs per unit of output under control. Unit
labor costs have risen at only a 1.5 percent annual rate over the past five years, compared to 4.5
percent from 1973-95. Even so, in real terms hourly compensation has risen by 2.0 percent
2
annually during the past five years, up from 0.7 percent during the 1973-95 period, creating a
virtuous cycle of low inflation yielding high real wage gains without forcing compensation costs
higher.
To what can we attribute the revitalization of productivity growth? Some of these
improvements are due to the expanding role of information and communications technology in
the economy.
More important has been the mentality of the American people who saw the promise of
this new technology. Lowering taxes and cutting red tape since 1980 has created an atmosphere
where the rewards to hard-work and risk-taking inspire scientists, entrepreneurs, and investors to
new heights of achievement.
Assessing the recent slowdown
We must view the current slowdown within the broader context of recent economic
performance:
•
The U.S. economy is fundamentally sound, with low inflation and low unemployment.
•
Although equity markets have been unsettled recently, we need to recognize that broad
equity measures still have tripled in value over the past decade.
• Let's not make the mistake of focusing on what's easy to measure rather than
what's important. Strength of US economy is not reflected in anyone asset price
or number but in the flexibility and adaptability of our entire economy to new
challenges.
The recent slowdown occurs against the backdrop of this fundamental soundness and
follows on the heels of the extraordinary real growth of recent years - with real GDP growth
averaging in excess of 4 percent per year over the past 5 years.
But the U.S. economy also faces real challenges. The investment boom of recent years
masked the detrimental effects of over-taxation.
Neglect of the energy sector opened the way to a painful increase in prices and in some
cases outright shortages.
We know the keys to creating growth and prosperity
•
•
•
•
Stable government policy.
Tax reduction and debt reduction strategies.
Maintaining price stability
Increasing efficiency through regulatory reform
3
•
•
•
Investment in human capital, the source of the ideas for technological
improvement and productivity gains;
Open markets, which give consumers access to the best goods and the lowest
prices in the world; allow our workers and businesses to compete and be the best
in the world; and allow our farmers to be the most efficient and feed the world.
An estimated 12 million jobs depended on exports last year, or one out of every
eleven.
Global price pressures force companies to continuously improve. And 95 percent
of the world's consumers live outside our borders. So free trade is extremely
important to maintaining US productivity.
Policy prescriptions
Right now, we must pursue economic policies that address the short-term slowdown
while laying the groundwork for long-term growth. I think, far and away, cutting marginal tax
rates is the cleanest and simplest instrument that we have available to have an impact quickly.
And we must cut every rate. Today, 17 million business owners and entrepreneurs are taxed
under the individual income tax rates. Many of them are taxed at the highest rate, 39.6%. These
small businesses are the engines of growth and job creation in our economy. Yet today our tax
code punishes them with the highest marginal tax rate. Returning to strong growth requires that
these entrepreneurs keep more of their own money to invest in new workers and new technology.
The President's tax relief package structurally reforms a tax code that is taking too much
from working Americans and placing a drag on our economy. The President asked the Congress
to pass his tax relief package quickly, and make it more retroactive. I've been working with the
Congress to figure out how we can do just that - because retroactivity and rate reform will
provide a short-term stimulus and enhance long-term growth.
Some suggest we send a rebate to the taxpayers now, and stop there. That's not good
enough. I was here when we tried that in 1975, and it just didn't work. If we want to change
consumption patterns, we need to make a permanent change in people's tax burdens.
The current short-term slowdown in the economy does not change the fact that
Washington will bring in enormous surpluses over the next ten years if we do not reform the tax
code. The economic assumptions underlying the $5.6 trillion surplus estimate anticipated a
slowdown in growth during the next two fiscal years. Our forecasts are right in the middle of the
range of private sector forecasts available today .
. I'm therefore confident that enacting the President's tax plan is fiscally responsible. And
even after providing $1.6 trillion in tax relief and locking away the $2.6 trillion Social Security
surplus, we maintain a responsible cushion in case of unexpected needs. And we'll pay down
every possible dollar of publicly held debt over the next 10 years. It's time to get money out of
Washington that would otherwise be spent on bigger government, and leave it with the people
who earned it and know better how to spend it productively.
4
We have additional work to do, refonning Social Security to protect current and future
retirees and increase the savings potential of younger working Americans; and improving the
productivity of our health care system to increase patient care while reducing skyrocketing costs.
We must also expand trade and work to improve growth in other vital economies around
the world. With regard to Japan, it is crucial for the second largest economy in the world to
return to a path of strong and stabl,e growth. I will save that for a later date, and simply point out
how crucial it is to the standard ofliving around the world that the second largest economy in the
world return to a path of stable growth.
I'm looking forward to helping the President with his trade initiatives later this year. It
seems to me so obvious that we are sufficiently good and should hold ourselves to a high enough
standard that we should not fear absolute free trade. In the right kind of world, in the world that
we should dream of, we should be thinking free trade, absolute free trade without trade and tariff
barriers, anywhere.
Together, these initiatives can help to ensure that the current slowdown is short-lived.
And they will lay the groundwork for another consumer-led expansion and a new golden age of
prosperity here and around the globe.
--30--
5
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: 33
Author(s):
Title:
Date:
"This Week With Sam Donaldson and Cokie Roberts" Guests: Treasury Secretary Paul
O'Neill,
Senator John McCain, Senator Mitch McConnell and John DiLulio
2001-03-25
Journal:
Volume:
Page(s):
URL:
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
March 27, 2001
Office of Financing
202 - 6 91- 3 5 5 0
RESULTS OF TREASURY'S AUCTION OF 21-DAY BILLS
21-Day Bill
March 29, 2001
April 19, 2001
912795GC9
Term:
Issue Date:
Maturity Date:
CUSIP Number:
4.93 %
High Rate:
Investment Rate 1/:
5.02 %
Price:
99.712
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 27%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
$
59,555,000
TOTAL
$
59,555,000
$
40,009,800
$
40,009,800
o
o
Median rate
4.90 %: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
4.85 %:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
BID-TO-COVER RATIO = 59,555,000 / 40,009,800 = 1.49
NO FIMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
1/ Equivalent coupon-issue yield.
http://www .publicdebt.treas.gov
PO-ll2
:
DEPARTMENT
•
j '
, ' - ,
'
'r'
~'
,
OF
THE
TREASURY
:
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C." 20220" (202) 622-2960
U.S. International Reserve Position
The Treasury Department today released
3/27/01
u.s. reserve assets data for the week ending Nfarch 23, 2001.
As indicated in
this table, u.s. reserve assets totaled $64,439 million as of lIIarch 23,2001, down from $65,247 million as of March 16,
2001.
(in US millions)
I. Official
u.s. Reserve Assets
March 161 2001
65,247
TOTAL
1.. Foreign Currency Reserves 1
a~ Securities
Of which, issuer headquartered in the U.S.
b~
I
Euro
5,311
Yen
10,727
March 23,2001
64,439
TOTAL
16,037
0
Euro
5,319
Yen
TOTAL
10,746
16,065
0
Total deposits with:
b.i. Other central banks and B/S
b.ii: Banks headquartered in the U.S.
b.iL Of which, banks located abroad
b.iii. Banks headquartered outside the U.S.
b.iii. Of which, banks located in the U.S.
8,953
4,644
13,597
0
0
8,958
4,652
0
0
13,610
0
0
0
0
13,746
13,271
:t Special Draw;ng Rights (SDRs) 2
10,821
10,447
4. Gold Stock
11,046
11,046
0
0
2. IMF Reserve Position
2
3
5. Other Reserve Assets
11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
deposits reflect carrying values.
2/ The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRfdoliar exchange rate for the reporting date. The IMF data for March 16 are final. The entries in the table
above for March 23 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF
data.
31 Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of February 28,2001. The January 31. 2001 value
"las $11,046 million.
0-113
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
March 16,2001
March 23. 2001
o
o
2.a. Short positions
o
2.b. Long positions
3. Other
o
o
o
o
o
1. Foreign currency loans and securities
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
III. Contingent Short-Term Net Drains on Foreign Currency Assets
March 16, 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.c. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
March 23, 2001
o
o
o
o
o
o
o
o
NEWS
TREASURY
OFflCE OF PUBLIC AF.'FAIRS .1500 PENNSYLVANIA AVENUE, N.W•• WASHINGTON, D.C.e 28220 e (202) 6:1-2960
EMBARGOED trNTIL 9: 00 A.H.
HaJ:'ch 28, 2001.
PUBLIC CONTACT: Office of Financing
202-6~1-3550
MEDIA CONTACT:
Offioe o£ Public Affairs
202-622-2960
TRRASURY ANNOUNCES DEBT BUYBACK OPERATION
On Harch 29, 2001, the Treasury will buy back up ~o $1,000 million par
of its outstanding callable issues with final maturity between Pebruary 2010
and November 2014. Treasury reserves the righe to aecept less than
the announced amount.
This debt buyback (redemption) operation will be eonductedby Treasury's
Fiscal Agent , the Federal Reserve Bank of Now York, US1n9 its Open Market
operations system. Only institutions that the Federal Reserve Bank of New
York has approved to conduct Open Market transactions may submit offers ou
behalf of themselves and their customers. Offers at the highest accepted
price £or a particular issue may be accepted on a prorated basis, rounded up
to the next $100 / 000. As a result of this rounding, the Treasury may buy
back an amount slight~y larger than the one announced above.
This debt buyback operation is governed by the terms and conditions set
forth in 31 en Part 375 and this announcement.
The debt buyback operation regulations are available on the Bureau of
the Public Debt:.· s website at:. www.puh1icde.bt.trea.:s.gOV..
Details about the operation and each of the eligible issues are given
in the attaehed highlights.
coc
Attachment
PO-1l4
Fqr press relett.ses, spe.ches. public schedu.les 4,,4 official biographies, call Oil' 24·hollT fll% line
ttl
(202) 622-2040
\" ';
D EPA R T M E N"T
0 F
THE
T REA SUR Y
NEWS
OFFICEOFPUBUCAFFAIRS eI500PENNSYLVANIAAVENUE, N.W. e WASHINGTON, D.C. e 20220 e (202) 622-2960
FOR IlVIMEDIATE RELEASE
Contact: Tara Bradshaw
(202)622-2960
March 28, 2001
O'NEILL STATEMENT ON THE DEATH TAX
Today, Treasury Secretary Paul O'Neill reiterated President Bush's steadfast support for
elimination of the death tax.
"The President made a compelling case for eliminating the unfair death tax. Government
has no business confiscating the legacy parents work their entire lives to build for their children,"
said O'Neill.
Secretary O'Neill looks forward to the House Ways and Means Committee mark-up of
death tax repeal tomorrow.
-30-
PO-l1S
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
TREASURY/COMMERCE LETTER TO EUROPEAN COMMISSION ON MODEL CONTRACTS
Mr. John Mogg
Director General
Internal Market Directorate General
European Commission
Rue de la Los 200
B-1049 Brussels
Belgium
We are writing to reinforce our concerns over the proposed standard contract
clauses as described in the Treasury- Commerce joint letter on February 16,
2001.
Over the last year, U.S. financial institutions have been implementing new
consumer privacy protections mandated by the Gramm-Leach-Bliley Act of 1999. In
the coming months, the U.S. Treasury Department would like to resume
negotiations with the EU commission on the adequacy of data protections provided
by U.S. laws governing the financial services sector.
We are concerned future negotiations for the financial services sector may be
adversely affected by the Commission's proposal to adopt standard clauses for
contracts goveming data transfers from firms in the EU to firms in other
countries. The standard clauses incorporate duties and liabilities that are not
found in the directive. We recognize the model contracts are not the only means
to meet the requirements of the directive. Still, we believe there is a serious
danger the adoption of the standard clauses as drafted will create a de facto
standard that would raise the bar for U.S: and foreign firms that might be
covered by other agreements -- including any arrangement resulting from
Treasury's financial services negotiations.
In short, we share the concern of a number of multinational firms that the
adoption of the proposed standard clauses will introduce uncertainty about the
use of contracts.
The proposed standard clauses are not a workable alternative model. They impose
unduly burdensome requirements that are incompatible with real world operations.
While revisions and improvements have been made since the standard contract
clauses were presented for comment in September 2000, the revision process has
not been transparent to those seeking participation.
We urge the Commission to provide more time for an open exchange of views with
the private sector, impacted countries, and other stakeholders, especially given
the above concerns. In light of our broad concerns and the specific implications
for future Treasury negotiations on adequacy, it is our view that the Commission
should defer consideration of the standard contract clauses.
It is in the interest of both the U.S. and the EU to ensure that neither side
adopts new measures that will weaken the prospects for reaching an agreement on
an adequacy finding for the U.S. financial services sector. We appreciate your
consideration of our views and look forward to further discussions on these
issues in the coming months.
sincerely,
Donald V. Hammond
Acting Under Secretary
(Domestic Finance)
Bernard Carre au
Acting Under Secretary for
International Trade
U.S- Department of Commerce
HTML>
DEPARTMENT
OF
THE
TREASURY
NEWS
omCE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C .• 20220 - (202) 622-2960
FOR IMMEDIATE RELEASES
March 28,2001
Contact: Tara Bradshaw
(202) 622-2960
J. D. FOSTER JOINS OFFICE OF TAX POLICY AT THE TREASURY DEPARTMENT
On March 27,1. D. Foster joined the Office of Tax Policy as the Senior Advisor
(Economics) to Assistant Secretary (Tax Policy) Mark Weinberger. In that position, he is
responsible for providing policy analysis and advice on economic and tax policy issues.
"J.D. is well known in the economic and political communities for his experience and
knowledge in economic and tax policy analysis," stated Mark Weinberger. "We look forward to
the guidance and perspective he brings to our tax policy team."
Before coming to Treasury, Foster was the Legislative Director and Economic Counsel to
the Honorable Philip M. Crane, Vice-Chairman of the House Ways and Means Committee and
prior to that Executiv:e Director and Chief Economist of the Tax Foundation, a non-profit
research and education organization. In th~t latter position, he was the author of many articles
and editorials on public finance and tax policy especially relating to international tax policy, tax
refonn, capital formation, and education. Prior to joining the Tax Foundation, Foster provided
economic counsel and advice to the President's Council of Economic Advisers, Senators Don
Nickles, Steve Symms, and Bill Armstrong, and the Institute for Research on the Economics of
Taxation.
Foster is a graduate of the University of Colorado holding a B.A. in Economics and a
B.A. in Mathematics. He received his M.A. in Economics from Brown University and his Ph.D.
in Economics from Georgetown University.
PO-1l7
-30-
F&r press releases, speeches, public schedules and official biographies, call our 24-hourfax line at (202) 622-2040
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
March 28, 2001
CONTACT:
Office of FinanCing
202-691-3550
RESULTS OF TREASURY S AUCTION OF 2 -YEAR NOTES
I
Interest Rate:
Series:
CUSrl? No:
Issue Date:
Oated Date:
Maturity Date:
4 IJ4%'
N-2003
9l28276V9
High Yield:
Price:
4.300%
April 02. 2001
March 31. 2001
March 31, 2003
99.905
All noncompetitive and successful competitive bidders were awarded
securities at the high yield. Tenders at the high yield were
allotted
4%. All tenders at lower yields were accepted in full.
Accrued 1nt@rest of $ 0.23224 per $1,000 must be paid for the period
from March 31. 2001 to April 02, 2001.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
Tende1;ed
$
SUBTOTAL
29,$79,820
1,131,090
Accepted
$
11,006,305 1/
30. 70Sl. 910
Federal Reserve
3,666,667
TOTAL
34,376,577
9,975,815
1.131.090
3,660,667
$
14,673,572
Median yield
4.28S%; 50\ of the amount of accepted competitive tenders
was tendered at or below that rate. Low yield
4.240%:
5% of the amount
of accepted oompetitive tenders was tendered at or below that rate.
Bln~TO-CO~R RATIO ~ 30,709,910 J 11,006,905 = 2.79
NO rIMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
MINIMUM AMOUNT FOR THIS NOTE IS $1,000.
1/ Awards to TREASURY DIRECT
THE STRIPS
= $912,123,000
http://www.public:debt.treas.gov
po-us
TOTAL P.01
DEPARTMENT
OF
THE
TREASURY
NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED FOR DELIVERY
March 29, 2001
Contact: Tara Bradshaw
(202)-622-2960
STATEMENT OF KENNETH W. DAM
NOMINEE TO BE DEPUTY SECRETARY OF THE TREASURY
TO THE COMMITTEE ON FINANCE
UNITED STATES SENATE
Chairman Grassley, Ranking Member Baucus, and members of the Senate Finance
Committee, I am grateful for the opportunity to appear before you today in connection with my
nomination to be Deputy Secretary of the Treasury. I am honored that President Bush has asked
me to serve in this important position, and I thank you for the privilege of appearing before you
today.
Mr. Chairman, I have a deep and great respect for public service. And while I could not
imagine the road my career would take when I grew up on a small farm in Kansas, among my
other life experiences I have been most fortunate to serve our country and to make close friends
during my years with the federal government. Here is how I arrived before you today:
After graduating from the University of Chicago Law School in 1957, I served as a law
clerk to U.S. Supreme Court Justice Charles Whittaker and then joined a New York law firm. I
became a faculty member ofthe University of Chicago Law School in 1960, and in 1971 I left to
become Assistant Director of the Office of Management and Budget for national security and
international affairs. After two years, I was appointed Executive Director of the Council on
Economic Policy, responsible for coordination of U.S. domestic and international economic
policy, under the leadership ofthe Chairman ofthat Council, George P. Shultz.
I returned to the University of Chicago Law School at the end of 1973 and was named
Provost of the University in 1980. In 1982, I was appointed Deputy Secretary of State. After
three years of implementing President Reagan's foreign policy initiatives, I departed for IBM,
where I worked as a corporate vice president until 1992.
In 1992, I took a leave from IBM to serve, on an interim basis, as president and CEO of
the United Way of America in order to clean up a scandal in that organization and to put into
place a new system of controls and governance. Once I accomplished that goal, I returned to the
teaching oflaw.
PO-1l9
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s. Government Printing Office·
1998 - 619-559
Members of the committee, this nomination appeals to me for three fundamental reasons.
First, I believe deeply in President Bush's vision for economic prosperity and security for
our nation. I strongly support the tenets of his plan: tax cuts that tear down the barriers to the
middle class, debt reduction, and a secure Social Security system. In addition, I would like the
opportunity to be an active advocate for the President, who understands our nation's international
role and its responsibility for a more open and vibrant world economy.
Second, I look forward to the prospect of working side by side again with my long-time
friend Paul O'Neill. In a distinguished career, Paul has earned a reputation as a straight shooter,
an innovator, and a deep thinker. I value his conviction and leadership, and I would be proud to
serve with him again.
And third, I would be privileged to join the ranks ofthe Treasury Department, whose
employees are known throughout government for their dedication and professional excellence.
The Department boasts a rich legacy, and I hope to gain your agreement to allow me to be
associated with that heritage.
Thank you once again, Mr. Chairman, for the privilege of appearing before this
committee. If! am confirmed, I assure you that I will work closely and with enthusiasm with you
and the members of the Committee in the coming months. I would be pleased to respond to
questions.
-30-
2
DEPARTlVIENT
OF
THE
TREASURY
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASIllNGTON, D.C. • 20220 • (202) 622-2960
EMBARGOED FOR DELIVERY
March 29, 2001
Contact: Tara Bradshaw
(202) 622-2960
STATEMENT OF DAVID D. AUFHAUSER
NOMINEE TO BE GENERAL COUNSEL
TO THE COMMITTEE ON FINANCE
UNITED STATES SENATE
Thank you Mr. Chairman, Senator Baucus and Members of the Committee for the
opportunity to appear before you today. I am honored to be President Bush's nominee to serve
as General Counsel of the Department of the Treasury and I am particularly grateful to Secretary
O'Neill for recommending me to the President. I also deeply appreciate the expeditious manner
in which you have scheduled this hearing and the opportunity for my family to share in the
proceedings.
More than twenty years ago, I interviewed for ajob with Edward Bennett Williams who
was to become my teacher and partner. He asked what makes a good lawyer. I responded,
"eloquence." Williams shook his head. A lawyer's first, perhaps his greatest talent he told me is
the ability to listen - "Only then will you know what to say."
That lesson has been the foundation of my twenty-three years of legal practice litigating
criminal and civil trade, securities, tax and federal regulatory matters in courtrooms, boardrooms
and in proceedings before committees of Congress. And it is a lesson that I will continue to
honor as the chief legal officer of the Treasury Department.
I pledge to listen and respond, to the best of my ability, with well-founded scholarship,
sound counsel and balanced advocacy in an open partnership with the staff and members of this
Committee and Congress.
Mr. Chairman, I am grateful to you for bringing me before this Committee and
respectfully ask that I be permitted to introduce my family to you and members of the
Committee.
PO-120
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
DEPARTlVlENT
OF
THE
TREASURY
NEWS
TREASURY
omCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960
Contact: Tara Bradshaw
(202)-622-2960
EMBARGOED FOR DELIVERY
March 29, 2001
STATEMENT OF MICHELE DAVIS
NOMINEE TO BE ASSISTANT SECRETARY FOR PUBLIC AFFAIRS
TO THE COMMITTEE ON FINANCE
UNITED STATES SENATE
Chairman Grassley, Ranking Member Baucus, and members of the Senate Finance
Committee, thank you for the opportunity to appear before you today. It is a great privilege to be
considered for the position of Assistant Secretary of the Treasury for Public Affairs. I am
honored that Secretary O'Neill has selected me and President Bush has nominated me to serve in
this position, and that you are taking the time to consider my nomination today.
The Treasury Department is at the center of President Bush's efforts to work with
Congress to keep America's economy strong and to spread prosperity around the world. The
public affairs office at Treasury plays an essential role in educating the public about tax policy,
debt management, Social Security financing, and a host of international issues that impact our
prosperity. I look forward to helping to make the case publicly for the President's agenda and to
keeping the media and all interested parties - including you and your committee - informed on
Treasury's work.
I believe an informed public is crucial to the democratic process. I learned in my years
working in the House that an informed public debate leads to better policymaking. I can think of
no greater honor than to be asked to do this job and to work with Secretary O'Neill, who teaches
me something new every day and whose enthusiasm for getting things done has already
energized the entire staff at the Treasury. I am eager to get to work with the talented people in
the Department, across the Administration and here in the Congress. Thank you.
PO-121
-30-
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Pnntlng Office 1998 - 619·559
TREASURY
NEWS
OFFICE OF PUBLIC AP'FAlRS -1500 PENNSYLVANIA AVENtJE. N. w. - WASHINGTON, D.C•• 28220. (30:) 622-2'"
zaARGOED 'ON':nL
~: 30
P .x.
COR'l'AC'l':
Barch 29, 2001
Of~ice o~ P1NmC~
202/691-3550
'l"RU.S'01tY OH'BkS 13 -WBSK
Am)
26 -WSIZ Bn.t.S
The Treasury ~11 a~ce1QC -ewe .er~eB of ~S~ ~i~~a eoealiDg
approximately $17,000 million to refund $21,780-million of publicly. held
aecuritie5 maturiDg April S, 2001, and to pay down about $4,780 million.
ID. addition to the public holc!iDsrs, Federal aeserve Bam:B fc= their own
ac:CO'W1ts ho~d _$l.l.~ 722 aill.icm of ehe maeuring J:)il~s, which may ])e reeu.=eC1 a~
the highes~ discount nte of ac:c:eptea. c:cmpetitive temd&rs. AmoUnts awardee!
to these accounts will be in addition to the offering amouDt.
t7p to $1, 000 million iDDODC:c;aapetit.ive- bias f:r:cm Poreip as:t.4 :ID~ez
ut~~l. ~t4U:'Y Autbor.ity (F%la) accow:t.es l:d.ac:1iJlg' thrO\lgA the Fe4eral
It.serve Bal'lk o~ Hew York will be included within eh8 offer:iDg' amount of
each
auction. These noncompetitive ])ida will -Mve a l.iait of $200 mill.10!1 per
:accoUnt and will be accepteci in the -order of smallest to largest, up to the
aggregate award limit. of $1,000 million.
~aSU%y.Direct customers have requestea that we reinvest their matu.iDg
holdings of approximately $963 million- into the 13-week ~i11. aDd $802 ~~l.~on
into ehe 26-week bill.
'l'his offering of fta&aur,f securities ia govarnad by the t8%:1D8 aDd conset foreb ~ the UDifor.m Offe~lAg Circular for the Sale a=d Xssue o~
Marketable Bock-~tr,y Treasury Bills, Kotes, aDd BODQ& (31 CFR Pa:t 356, . .
_nc1ec1) •
ditions
Details abcut eaeh of the
offeriDg highl~ghts.
Dew
securities are giveD. in ~ attached
-000
Attachment
PO-122
FOll'''51 7'el~(lstJ. spttchel, public Jc1u411Ur aM officio.l biognzphies, -CtJlI OIlT UhOUT fa line lit (ZOZ) 62l-2040
HIGHLIGHTS OF TREASURY
OF~ERINGS
OF BILLS
TO BI XSSUED APRIL 5, 2001
March 29, 2001
otf.ring
Am~unt
.......................... $9,000 million
Description o~ Offering.
Term and type of .eourity ••••••••••••••• 91-day btll
CUSIP nUJnber .............................. 912795 HA 2
Auction date ............................... April 2, 2001
:taBU. d.ate ............................ ·...... April 5, 2001
Maturity dat •••••••••••••••••••••••••••• July 5, 2001
Origina.l. issue date •••••••.•••••••••••••• January " 2001
Currently outstanding ••••••••.••••••••••• $16,169 million
Minimum bid amount and multiples •• '.' ...... $1,000
$8,000 Jllillion
182 .. aay btll
912795 SR 5
April 2, 2001
April 5, ·2001
Odtobe~ "
2001
April 5, 2001
$1,000
The fpllowin,.rul.s apply to all securities mentioned abOve.
Submission of Bidsl
Noncompetitive bids, Accepted in full UP. to $1 million at the highest discount rate of acoepted
oomp~titiv. bids.
Fore1gD and International Monetary Authority (I"D%A) bids I 1I0Dco:mpetitive bi<l_ submitted
through the Federal Reserve Banks a • •gents for F~ accounts. Accepted in or4er of siz.
frQM 8mA~le8t.to largest with no more than $200 ndllion awar~e4 per account. The total
nonc~.titive amount awarded to Federal Res.rye Bank. a8 agent. ~or FXMA aooount. will
not exce.d $1,000 million. A single bid that .would caU8e the limit to be exceeded will
b. partially aocepted in the amou~t that bring. the aggregate aWAxd total to the $1.000
·mil1ion ~imit •. However, if there axe two or more bid. of .~al amounts that would cause
the limit to b. exo.eded, eacb will be prorated to avoid exceeding the limit.
Competitive bids.
(1) Must be expressed as a disoount rate with three decimala in increments o~ .005%, e.g.,
1.100%,. 1.105%.
(2) Net long »o81tion for each bidder must be ~eport.d when the sma o~ the total bid amouab,
at all ai8count rates, and the net long poaition 18 $1 billion or greater.
(3) Net long posItion must be deter..ined a. of one balf-bour prior to the closing ti•• for
reoeipt of co~atitive tendera.
Haxt-wa Recognized Bid at a Bingle Rate •••• 35% of pub11c offering
Maximum Avard •••••••••••••••••••••••• _••••• 35% of public offering
Receipt of
~D4.r.1
Nonco~eti tive tenders
•• Prior to 12 I 00 nooa e.stun daylight saving td.me on auction 4q
Competitive tenders ••••• prior to 1,00 p.m. eastern daylight savina time on auotion day
PaJlllent 'l'eX11\8.
By charge to a funds account. at. a hderal aese:nre Bank Oil issue da!:-e, or: P~Dt:
of full par ~ount with tender. ~raasur.yD1rect cust~ra can use the pay Direct ~eature which
autborises a charge to their acoount. of record at: their financial institution o~ issue date.
DEPARTMENT
OF
TREASURY
_ _ _ _ _ _ _ _"":1
THE
78
TREASURY
NEWS
: . . -_ _ _ _ _ _ _•
Q
OFFlCE OF PUBUC AFFAIRS • 1500 PE.t\;NSnXANL;\ AVENl'E, ;-";.W .• WA5iHINGTO', D.c:.. 20220.12021622-2960
Contact: Office of F±nanci~
202/691-3550
BNBARGOED .trNTIL 2: 3 0 P .H.
Karch 29, 2001
TlUitAStiRy TO AtrCTIOlf CASH
~
The Treasury will auction approxtmaeely
BILLS
million of 13-day
i'reasuzy cash management bills to be issued April 3, 2001. '!'be auction ate is
HbnGaY, April 2, 2001, and the noncompet1t1ve and comeeeit1ve clos;sg t~e wil~
be 11:30 a.m. eastern daylight s&viDg time.
.
$3~,OOO
~eDaers will ~ be aeeept$dfor bills to be ~intaiued on the book-entry
recoz:ods of the Department. of ~e Treasury (2'reasuzyD.:£rec:t).
up to'$i,OOO million in noncompetitive bids f~ PoreigD ~d I~te::ational
Bonetary Authority (PIKA) accounts bidding through the Federal R•• erve Bank of
Haw· Y0.:rk will be included vi thin the offer:i.Dg amount of the auction. '!'hese
noncompetiti.ve :bicls will have a limit of $200 million per ac:count: and will be
accepted in tAe order of smallest to largest, up to the aggregate award limit
ot $1.,'000 m1l1ioll.
'l'he auction being annO\U1ceCl today will be conducted in· the single-price
auction £ona&1:. All. competitive Ul<l DOncCClpetitive aw;u-ds will. be at the
highest discount rate of accepted competitive cen4.~§.
NO'1'2: Competitive bids iii cash management bill auctions must be
ezpreS'S'eCr as a discount. rate with two d.ecimals, •• g., 7 .l.0%.
.
This of£eri~g of Treasury 8ecu~it.ies is governed by the terms and conditions set forth in the Vnifor.m OfferiDg Circular for the Sale aD4 Issue of
'Harketable Book-Entry Trea.slUY Bills. Notes, and Bc=.c1s (31 en Part 356, as:
-
amended).
.
Details about the Dew security are given
highlights.
~
000
Attachment
PO-123
ehe attached offering
JaGBLIGH'l'S OF TRBAStJRY Ol'PUmG
OJ' 13 .. DAY CASK DNAGDIDlT BILLS
Karch 29, 2001
" O"fferin.g AmoU%lt ...................... . $35,000 million
Description of Offering:
Ter.m and 'type of security
...........
13-day Cash Management Bill
CtJS7P n\m1l)e.r ••••••••••••••••••••••• 912795 :KG 5
date .••.••••••••••••••••••• April 2, 2001
Issue date ••••••••••••••• ~ •• ~ •••••• April 3, 2001
Aue~1on
. Xaturi ty c:late •••••••••••••••••••••• April 16., 2001
Orig~l issue date ..••••••••.••••• April 3, 2001
KiniDN:zn bid amount and multiples ••• $1,000
SUbmission of Bids:
,
Noneompetitive :bids: " Aeceptad. in full up to $1 m:illj,on at the highest.
diacCNII.t. rate of accept:ec! cc=peUti•• bicia.
Foreign and Internat.ional Konetuy Authority (PIKA) bids: Nonccmpet::Ltive bids s~tted tArough the Pederal.Reserve Banks as agents for
FDrA accounts. Ac:eeptec1 in order of sise from. smalleat to largest
with no ~re than $200 mi11ion awarded per accow::a.t. The total %lOZLcompetitive amo~t awarded to Federal Reserve BaDka as agent. for
·FDIA &C!counts will not ezee.c. $1,000 million. A single bid that
woulcl cause the limit to be axeeedeel will ]:)e partially accepted in
the &1DO\mt t.hat bzoinga the aggregate award tot.al to the $1,000
million limit. However I if t~er. are two or mere bi.ds of equal
~ts that would cause the limit eo be ,exceecle4, each will be
prorated to avoid exceeding the l~t.
Competitive bids:
(1) MUst be expressed .a a discount rate with two
7.l.0%.
dec:~ls,
e.g.,
-
(2) Ilet long position for each bicld.er IWSt b4l reported when the
'8'Uln of the total ]:)id amount, at all ci1scOUAt rate., &DCi the Slat
long position is $1 billion or greater.
(3) Net long position "mu.st be detuminec:i as of eme half-hour prior
to the closing tim'e for receipt of competitive tenders.
Maximum Recognized :Sid at a Single Rate;
l!!aximum Award: 35% of pul::>lic offering
35% of p@lie otfering
Receipt of Tenders:
NODcompaticive tenders~
Prior t.o ll,30 a.m. eastern daylight .aviDg ttm. OD auetion day
Competitive tenders:
Prior to 11:30 a.m. eastern ~ylight saving time on auction day
Payment Terms: By charge 'to a funds account at a Peelual .e.el:V8 Bank
on issue date, or payment of full par a:mcunt with tender.
NEWS
TREASURY
O~"ICK
I')F Pli BI.le ,\FII'AtKS. 150.· PKNNSYI.\,ANIA AVKNllK, N. W ..• WASIUN(;TON. 1l.C .• 20220. t ZIH, 1122_2".0
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960
FOR IMMEDIATE RELEASE
March 29, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS
Today, Treasury completed a debt buyback (redemption) operation for $1,000 million
par of its outstanding callable issues. A total of 10 callable issues with final maturity
between February 2010 and November 2014 were eligible for this operation. The settlement date
for this operation will be April 2, 2001. Summary results of this operation are
presented below.
(amounts in millions)
Offers Received (Par Amount) :
Offers Accepted (Par Amount) :
Total Price Paid for Issues
(Less Accrued Interest) :
Number of Issues Eligible:
For Operation:
For Which Offers were Accepted:
Weighted Average Yield to Call
of all Accepted Offers (%):
Weighted Average Maturity to Call
for all Accepted Securities (in years) :
$6,197
1,000
1,380
10
4
4.864
5.0
Details for each issue accompany this release.
PO-124
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
March 29, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS
(amounts in millions, prices in decimals)
Table I
Coupon
R~!;!;l
(%)
11.750
10.000
12.750
13.875
14 .000
10.375
12.000
13.250
12.500
11. 750
Maturity
e
~
02/15/05-10
05/15/05-10
11/15/05-10
05/15/06-11
11/15/06-11
11/15/07-12
08/15/08-13
05/15/09-14
08/15/09-14
11/15/09-14
Par
Amount
Acceoted
Par
Amount
Off ere d
121
465
195
554
449
964
1,750
561
678
460
Highest
Accepted
Price
Weighted
Average
Accepted
~
86
0
195
554
165
0
0
0
0
0
124.390
N/A
132.515
140.468
144.187
N/A
N/A
N/A
N/A
N/A
124.336
N/A
132.432
140.319
144.178
N/A
N/A
N/A
N/A
N/A
Weighted
Average
Accepted
Yield
to Call
Par Amount
Privately
Held*
4.787
N/A
4.829
4.876
4.906
N/A
N/A
N/A
N/A
N/A
1,507
1,811
3,061
2,656
3,348
8,533
10,418
3,611
3,875
4,811
Table II
Coupon
Rate (%)
Maturity
Date
CUSIP
Number
Lowest
Accepted
Yield
to Call
11.750
10.000
12.750
13.875
14.000
10.375
12.000
13.250
12.500
11.750
02/15/05-10
05/15/05-10
11/15/05-10
05/15/06-11
11/15/06-11
11/15/07-12
08/15/08-13
05/15/09-14
08/15/09-14
11/15/09-14
912810CM8
912810CP1
912810CS5
912810CV8
912810CY2
912810DB1
912810DF2
912810DJ4
912810DL9
912810DN5
4.774
N/A
4.812
4.849
4.904
N/A
N/A
N/A
N/A
N/A
Total Par Amount Offered:
Total Par Amount Accepted:
6,197
1,000
Note: Due to rounding, details may not add to totals.
-Amount outstanding after operation. Calculated using amounts reported on announcement.
DEPARTMENT
OF
THE
TREASURY
NEWS
omCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASlllNGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 10 A.M. EST
March 30, 2001
Contact: Tony Fratto
(202) 622-2960
TESTIMONY OF DONALD V. HAMMOND
ACTING UNDER SECRETARY FOR DOMESTIC FINANCE
BEFORE THE HOUSE GOVERNMENT REFORM
SUBCOMMITTEE ON GOVERNMENT EFFICIENCY, FINANCIAL MANAGEMENT
AND INTERGOVERNMENTAL RELATIONS
U. S. HOUSE OF REPRESENTATIVES
FINANCIAL REPORT OF THE UNITED STATES GOVERNMENT
FISCAL YEAR 2000
Mr. Chairman and members of the Subcommittee, I am pleased to appear today to
discuss the Financial Report of the United States Government. I would like to thank you,
Mr. Chairman, Ms. Schakowsky, and other members of the Subcommittee for focusing on
improving Federal Government financial accountability and reporting.
The Department of the Treasury is dedicated to producing useful Governmentwide
financial statements and has devoted considerable resources to this effort. While we are
pleased to issue the FY 2000 Financial Report on time again this year, reporting not fully
reliable financial results six months after the close of a fiscal year is simply not good
enough. Working with the federal community, we have made incremental progress each
year but incremental progress may not prove to be sufficient. We are committed to
improving the process to make the financial statements more useful.
Treasury, in conjunction with the Office of Management and Budget (OMB), and
the General Accounting Office (GAO), will conduct a comprehensive review of the
financial statement production process. While we have made significant progress in
performing the consolidation, particularly with respect to resolving differences in net
position, classifying agency activity, reducing the number of adjusting entries, and making
certain intergovernmental eliminations, the remaining challenges, especially with respect
to consistency and intergovernmental eliminations, warrant a fresh look. This review will
lead to recommended changes and improvements.
PO-125
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
Should any require legislation, we will report them to you. Additionally, later this year,
Treasury will implement the first phase of our multi-year revamping of Governmentwide
central accounting systems and processes for reporting budget execution information.
This initiative will improve data access, reduce redundant reporting, and eliminate timeconsuming reconciliations. This is a critical first step to improving overall federal financial
management.
BACKGROUND
The Department of the Treasury continues to be a strong advocate for the
preparation of financial statements by Government agencies and for Governmentwide
consolidated financial statements. The Government Management Reform Act of 1994
(GMRA) requires that not later than March 31 of each year, the Secretary of the Treasury,
in coordination with the OMB Director, shall prepare and submit to the President and the
Congress audited financial statements for the preceding fiscal year. The statements
cover all accounts and associated activities of the executive branch of the United States
Government and are prepared in accordance with generally accepted accounting
principles, as established by the Federal Accounting Standards Advisory Board (FASAB).
The Financial Report of the United States Government for fiscal year 2000, which
includes the financial statements, provides information to the President, the Congress,
and the American people about the Government's financial position, the cost of its
operations, its sources of financing, and stewardship information.
PROGRESS MADE
We are committed to producing financial statements that meet FASAB standards
and provide timely, accurate, reliable and, most importantly, useful information. Since
issuing the first consolidated financial statements just three years ago, we have been
working closely with OMB, GAO, and the program agencies to improve the quality of the
Financial Report. Within Treasury, the Financial Management Service (FMS) is
responsible for producing these statements. This past year, FMS continued to focus on
three critically important areas: first, ensuring that the financial information reported to us
by the program agencies is consistent with the information in the agencies' own financial
statements; second, identifying, reconciling and eliminating intragovernmental
transactions; and, third, assisting agencies in reconciling their fund balances with
Treasury records. We also worked to modernize and improve the systems used to report
both the budget execution information and the accrual based information contained in this
report. We had improvement in each of these areas.
2
Consistency and Accuracy of Financial Information
The process of preparing the Financial Report begins in early February when
about 130 Federal departments, independent agencies and commissions electronically
transmit to Treasury approximately 2000 adjusted trial balances and related notes. It is
essential that this information be consistent with the information presented in the
agencies' financial statements, since the audit of the Governmentwide financial
statements relies in large part on the separate audits of the agency-level financial
statements. Our auditors, GAO reported this year, however, that they couldn't fully
verify the information provided to us as consistent with the information in agency-level
financial statements. This finding comes in spite of a process that requires agency
Chief Financial Officers to prepare and Inspectors General to review a detailed,
comprehensive worksheet that crosswalks the data submitted to Treasury to individual
line items on the agency's audited financial statements. This process resulted in an
unreconciled amount of $7.3 billion in changes in net position.
Additional improvements have been made in the accuracy of FY 2000 opening net
position balances. Over the last year, Treasury worked very closely with program
agencies to reach agreement on opening balances. An agency's opening net position
balance as recorded by Treasury should agree with the agency's opening balance
submission. Any difference should be explainable so adjustments can be made. Last
year, the unexplained opening balance differences were approximately $70 billion. This
year, considering an opening net position of over $6 trillion, the unexplained differences
for all agencies are approximately $8 billion, wfth the Departments of Agriculture and
Transportation accounting for $7 billion of the differences.
We continue to take actions that improve data accuracy. As agencies become
more comfortable with the data reporting requirements, we will experience even greater
improvement. A clear indication of progress was a reduction in the number of adjustments
submitted during our review process from 575 for the fiscal 1999 Financial Report to 280
this year.
Elimination of Intragovernmental Transactions
The audits of the agencies' financial statements have disclosed that the
agencies continue to have difficulties identifying transactions with each other so the
transactions can be reconciled or "eliminated" for Governmentwide reporting. If these
transactions are not eliminated, total Government assets, liabilities, revenues, and
expenses are misstated by the net amount of these transactions. While GAO reports a
$250 billion absolute value of reported differences, the net amount for the fiscal year
2000 statements was $1 billion after Treasury's reconciliation.
3
Excellent progress continues to be made in reconciling certain intragovernmental
transactions that represent the largest dollar amounts. As a result, these transactions can
be properly accounted for and reported in agency financial statements and also properly
identified and eliminated at the consolidated financial report level. For the second year in
a row, we were able to resolve the intragovernmental elimination issue for borrowing and
investment transactions between program agencies and either the Bureau of the Public
Debt or the Federal Financing Bank. We lack specific explanations for only about $3
million in Public Debt and Federal Financing Bank borrowing and investments out of a
total of more that $2 trillion. We are confident that these transactions have no material
impact on the financial statements, since the values presented in the statements are
rounded to the nearest hundred million.
This year, we focused on addressing issues regarding transactions between the
program agencies and the Office of Personnel Management (OPM) and the Department
of Labor as well as buying and selling transactions between program agencies. During
FY 2000, Treasury established new procedures for reconciling transactions with OPM
relating to employee retirement benefits. To assist agencies and OPM to reconcile
transactions in pension, health and insurance benefits; Treasury, OMB and OPM
implemented additional guidance and disclosure requirements. These disclosures helped
resolve differences and are required to be reviewed and audited by the agencies'
respective auditors. While we still have work to do, we were able to significantly reduce
the unexplained differences from $1.5 billion in FY 1999 to $.6 billion in FY 2000. We will
work with agencies to formulate additional guidance based on the progress we made this
year.
With regard to buying and selling transactions between Federal agencies,
Treasury has been working with a consultant to develop a buy/sell model that allows for
eliminating such transactions and moving the costs to the end user. This model produced
significant improvements this year and we hope that next year the information will be
sufficient to justify that the buy/sell transactions are immaterial at the Governmentwide
level.
Reconciliation of Fund Balances
Treasury continues to assist agencies in reconciling their fund balance amount
with the amount reported to them by Treasury. The fund balance amount is an agencylevel asset account that reflects the available budget spending authority of that agency.
Treasury has implemented an internet-based Information Access System that provides
agencies information about potential deposit and disbursement discrepancies.
Agencies are responsible for resolving the differences in a timely fashion. This year,
Treasury provided special assistance to the Departments of Agriculture and Defense
and the Postal Service in identifying and/or writing off very old differences. Today, the
discrepancies most often are a result of timing differences and are resolved in a few
monthly cycles.
4
On a Governmentwide basis, as of September 30, 2000, there were about $.5 billion,
$1.1 billion, and $8.5 billion of net differences between our records and those of the
program agencies in three key areas - Deposits, Disbursements, and Checks Issued,
respectively. For the most part, these differences are timing differences (much like your
checkbook and your bank statement) and most are quickly resolved by the agencies.
For example, when you review only those differences that are 6 months old or greater,
the differences are $.2 billion, $34 million, and $66 million respectively.
In order to capitalize on improvements over the last few years, program
agencies' reconciliation of fund balances must be a management priority and a routine,
on-going accounting function. Agencies have made much progress in institutionalizing
the process. To further facilitate this, as more fully discussed later in my statement,
Treasury is redesigning its systems to simplify the process. to improve the availability of
the data.
PLANNED IMPROVEMENTS
As you have heard, the current state of Federal financial reporting is not
satisfactory. I am confident that a creative and committed effort by Treasury, program
agencies, OMB, the CFO Council, and GAO combined with adequate funding can result
in breakthrough changes. In the short term, we will make the changes that can be
made to improve the preparation of the Financial Report of the United States
Government. For the long term, we are taking considerably more aggressive action.
Short-term
Our most critical short-term challenges remain in the three areas pertaining to
preparation of the Financial Report that I have already discussed. As indicated in the
message from the Secretary in this Financial Report, we intend to conduct a
comprehensive review of the processes necessary to produce the financial statements.
In the area of intragovernmental transactions, at the request of the principal agencies,
the Joint Financial Management Improvement Program has initiated an effort to better
define the problems and identify areas for focused attention. While the outcome of
these reviews is unknown, it is certain that it would permit Governmentwide statements
to be prepared earlier than 6 months after the close of the fiscal year.
Additionally, we must fully develop the process for a complete reconciliation of the
budget results with the financial statements' results of operations. An analysis by our
consultant and the fact that the unreconciled amount is $7.2 billion this year indicates
we are on the right track. As we continue to reduce the unreconciled transactions
reported on the Statement of Operations and Changes in Net Position, we will be finetuning the reconciliation report. We will also provide comparative financial statements
at the appropriate time.
5
One other area where usefulness can be dramatically improved is in the content of our
reports. Adding consolidating schedules containing agency financial results to this
report would make it much more informative. While this is not presently within our
capability, we will be looking for ways to capture this data in the future.
Recently, we modified our systems and processes to provide agencies with
easier and quicker access to certain budgetary information through the Internet. Using
our legacy central accounting system, agencies can obtain web-based access to such
information as statements of differences, and ledger and trial balances. With this
system, agencies can access their statement of differences the day after submitting
their month-end reports and then submit corrected reports to resolve any out-of-balance
conditions during the same accounting month. As we roll this out Governmentwide over
the next 7 months, we are confident that this will go a long way toward assisting
agencies with reconciling their fund balances more timely. Furthermore,
Governmentwide implementation also provides a good preview of our long-term
approach to redeSigning Governmentwide accounting processes.
Long-term
Treasury's new Governmentwide budgetary accounting system will be
implemented in a modular, phased approach over the next several years. The
redesigned system will be internet-based, and users will be able to access the FMS
portal 24 hours a day, 7 days a week. We will capture necessary accounting
information, including the Treasury Account S'ymbol, at the initiation of the business
transaction instead of after the funds have left the Government, as is presently the
case. This will reduce redundant reporting among the agencies, OMS and the Treasury.
Also, it will reduce after-the-fact reconciliations for payment and collection transactions.
Additionally, Treasury's plan is to provide a daily account statement for each Treasury
Account Symbol. The statement would show the beginning balances, increases and
decreases to the account based on collections or disbursements, and the closing
balance. With that level of information, agencies will know their fund balances on a daily
basis. A fully operational system will provide agencies one-stop shopping for accounting
data and information retrieval.
We continue to improve our Standard General Ledger based reporting systems.
Using the Federal Financial Management Improvement Act of 1996 as a base, these
systems strive to collect data needed by OMS and GAO directly from agency
accounting systems. Just as manufacturers reject components that do not meet
specifications, our new reporting systems reject reports that do not meet specifications
of the U.S. Standard General Ledger. As agencies move toward Standard General
Ledger compliant accounting systems, the reports continue to improve.
6
The FACTS II system, jointly developed with OMB, became fully operational with
year-end 1999 reporting. Agencies submit one budget execution report for both OMB
and Treasury. This provides consistency between OMB and Treasury numbers. Most
importantly, FACTS II loads the prior year results directly into the budget formulation
process, which help budget offices ensure that the budget process begins with what
actually happened the previous year.
CHALLENGES AND CONCLUSION
Improving financial management and accountability is a top priority for Treasury
and we are prepared to take a lead role. We will work closely with OMB and program
agencies to raise the bar in financial management improvements. As I mentioned at
the beginning of my testimony, Treasury, OMB, and GAO will reevaluate the process
we use to prepare the Governmentwide financial statements. Where that will take us
and how much of the current process we retain remains to be seen. Our review may
indicate that it may not be workable within 30 days of completing agency financial
statements to produce the Financial Report, complete the consistency evaluation, and
obtain an audit opinion. Our goals include accelerating the timeframes for issuing yearend audited financial statements, providing for comparative reporting, and moving
toward the preparation of quarterly statements by program agencies. We will also
consider new ideas such as audit committees and the use of pro forma financial
statements with budget submissions. These changes will require sufficient funding in
the future that we will request at the appropriate times.
Our ultimate success will be achieved when we reliably and accurately report on
the distinctly different financial activities of many agencies of Government as if they
were one entity and do so in a time frame and a manner that is truly useful.
Thank you, Mr. Chairman. This concludes my formal remarks and I would be
happy to respond to questions.
-30-
7
@FedFRASER