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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
September 04, 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
September 06, 2001
March 07, 2002
912795JJI
High Rate:
3.310%
Investment Rate 1/:
3.412%
Price:
98.327
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 70.00%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
20,581,279
$
1,129,873
75,000
SUBTOTAL
21,786,152
Federal Reserve
5,142,630
TOTAL
Accepted
$
26,928,782
11,795,279
1,129,873
75,000
13, 000, 152 2/
5,142,630
$
18,142,782
Median rate
3.290%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
3.240%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
= 21,786,152 / 13,000,152
= 1.68
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $812,205,000
PO-S87
http://www.publicdebt.treas.gov
D EPA R T \1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OFPUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C•• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
Wednesday, September 12, 2001
CONTACT: ROB NICHOLS
202-622-2910
REMARKS BY DEPUTY TRESURY SECRETARY KEN DAM
DIPLOMATIC RECEPTION ROOM
U.S. DEPARTMENT OF THE TREASURY
"Secretary O'Neill has cancelled the remainder of his Asia trip. He is en route back to
the United States, and is expected later today. I have been in constant communication with him,
and he has been fully briefed on the situation. The Secretary expressed his sincere sympathy to
the families of the victims of this tragedy.
"As for my trip to Asia, that has been postponed.
"I want to reiterate what the Secretary said last night in Tokyo: our nation's financial
markets are strong and resilient. In the face of yesterday's tragedy, the financial system
functioned extraordinarily well, and we have every confidence that it will continue to do so in
the days ahead.
"While we don't generally comment on specific meetings or phone calls, I do want to say
that we have received many expressions of sympathy and solidarity from our friends and
colleagues around the world in response to yesterday'S tragic events.
"With Treasury employing 25% ofthe federal law enforcement officers authorized to
make arrests and carry firearms, I will now address the role Treasury's enforcement bureaus are
playing in the government-wide effort.
"All of the Secret Services' resources and protective measures have been implemented
and appropriate steps and protocols are being followed. The Service has activated their
emergency plan and remains on high alert today. I am sorry that I am not in a position to
elaborate on any of these procedures.
"The Customs Service is at the highest level of alert. All US Customs air and marine
assets have been put on alert. All U.S. Customs investigators have been put on alert to support
the FBI in its efforts. US Customs air assets have been brought in to assist other government
agencies in the movement and deployment of personnel across the country. Customs is also
coordinating with INS with respect to monitoring the borders.
PO-601
Fur press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
U.S. International Reserve Position (cont'd)
II. Predetermined Short-Tenn Drains on Foreign Currency Assets
August 24. 2001
1. Foreign currency loans and securities
August 31, 2001
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. Shari positions
2.b. Long positions
3. Other
o
o
o
III. Contingent Short-Term Net Drains on Foreign Currency Assets
August 24, 2001
August 31,2001
1. Contingent liabilities in foreign currency
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
o
o
o
a
o
a
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
Offical Reserve Assets Worksheet
(actual US dollar amounts)
Last Week
24-Aug-01
Enter Dates Here
This Week
31-Aug-01
Change
Euro Securities
Yen Securities
Sec. Total
Euro Deposits
Yen Deposits
Deposit Total
Total
Euro Rate
Yen Rate
IMF
31-Aug-01
$5,526,372,695.62
$10,971,160,609.34
$5,525,222,249.12
$11,098,728,168.42
127,567,559
coQ!l and ~st data into last week
and put new data from fax
$16,497,533,304.96
$9,323,342,770.80
$4,750,177,026.32
$14,073,519,797.11
$30,571,053,102.07
$0.9116
Y 120.13
$16,623,950,417.56
126,417,113
into right column
$9,304,424,325.55
$4,805,379,079.30
$14,109,803,404.85
.18,918;445
$30.733,753,822.41
$0.9090'
162,700,720
Au
9-. 01
24x
.. ::n
""''''''''.....~J;~u5l::'O.1
v~·~.;jQ,.fio,.'!>.<V~.;,.~ .......
:
Reserve Tranche
GAB
NAB
Total
SDR
Source: NY Fed (fax)
24-Aug-01
Foreign Currency
:e..M~
-1,150,447
55,202,053
36,283,608
Y 118.75
Source: IMF (email)
put actual figures in for last week
(prelim, with adjust.)
15,226,564,746.68
0.00
15,280,526,338.44
0.00
0.00
15,226,564,746.68
0.00
15,280,526,338.44
53,961,591.76
10,874,160,086.11
10,912,697,143.10
38,537,056.99
53,961,591.76
0.00
0.00
0.00
Source: FMS website
0.00
IOther
http://www.fms.treas.gov/gold
o
R~s.Assets
IXOT~···
255,199,369.09
Adjustments to IMF and SDR data, translated at current exchange rates
ifir~ini:UMF-[)atii------------iN-si5R:S"---------------------------------------------------S[)R-raii!for------------------------.
I
iCalculation Section
Reserve Tranche
GAB
NAB
SDRs
24·AuQ-01
11,861.676.656
0
0
8.-171,101,197
Adjustments
J1-Aug-01
11,861,676,656
0
0
11,861,676,656
8,471,101,197
0.776261
TotalSDRs =
In USD
$15,280,526,338.44
$0.00
$0.00
$15,280,526,338.44
$10,912,697,143.10
D E P \ R T \1 E ;\ T
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THE
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS .1500 PENNSYLVANIAAVENVE, N.W•• WASHlNGTON, D.C•• 20220. (202) 622-2960
EMBARGOED
September 5, 2001
Contact: Tony Fratto
(202) 622-2960
STATEMENT OF SECRETARY PAUL O'NEILL
ON IDS UPCOMING TRIP TO CHINA AND JAPAN
Good morning. I'm leaving today on an important trip to China and Japan - at a crucial
time for the citizens of Asia and the citizens of the United States.
As our economy has slowed, we've taken appropriate steps in monetary and fiscal policy
to rekindle growth. The President's tax cut will inject $40 billion into the economy in this
quarter alone. Analysts have projected that the tax cut will boost growth by as much as 1
percentage point going forward. We've seen good news recently, in the NAPM report,
indicating that manufacturing may be turning around already. Our economy is sound, and r look
forward to a rising growth path in the months ahead and through 2002.
But it isn't enough for the US economy to be the only engine of economic growth in the
world. Global growth and greater access to global markets are fundamental to world prosperity.
I'll be stopping in San Francisco on my way to Asia, to meet with executives from Silicon Valley
and highly regarded economic experts. US technology companies want to provide goods and
services to people around the world. Over one million California jobs depend on manufacturing
exports. The President is seeking Trade Promotion Authority from the Congress, so that we can
open more markets to US goods and services, creating more and better-paying jobs here at home.
The challenge of global competition will spur new levels of achievement for a myriad of
products and ideas we haven't even thought of today. We in the United States have always risen
to that chal1enge, and in the process, created higher incomes and higher living standards for
America's families. Passing Trade Promotion Authority through the Congress will give the
President another tool to boost our long-term economic growth.
During my trip to China and Japan, I'll be talking with my counterparts about the
prospects for increased price competition as a means of stimulating growth and creating jobs for
Asian and US workers.
PO-S89
For press releases, speeches, public schedules and official biographies, call our 24-hourfax line at (202) 622.2040
·u.s. Gollemment Prin(iRQ Office: 1998 - B19-559
The potential for the Chinese people is enormous. Already, we've seen progress toward a
market economy, as China has created special economic zones, freed prices and privatized some
state-owned companies. Continued growth requires modem corporate structures and legal
systems. It requires freeing up individual initiative and labor mobility. We want to offer the
benefits of our own experience and support China's economic modernization.
Japan has already proven that it can be an engine for growth and innovation, but for most
of the last ten years, Japan's economy has lagged far below its growth potential. It is time for
decisive action, to turn the Japanese economy around. The United States strongly supports
Prime Minister Koizumi's reforms, especially the priority he has placed on improving the health
of the financial sector. As part of the dialogue created between our two countries, we will offer
technical and other assistance to sustain the banking reform effort.
DEPARTMENT
OF
THE
TREASURY
NEWS
OIDCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.• 20220 • (202) 622·2960
EMBARGOED UNTIL 12:00 P.M. EDT
September 6, 2001
Contact: Tony FraHo
(202) 622-2960
REMARKS OF SECRETARY PAUL O'NEILL
TOTECHNET
PALO ALTO, CA
Good morning. I know it's early in the morning for many of you, and thank you for
coming. For me, it's always exc,iting to be here in this hotbed of innovation and ideas. You all
exemplify the power of America's ingenuity. Your experiences showcase what you can
accomplish in America with nothing more than a good idea. The way our economy responds to
innovation is what makes America a leader in the world of ideas - on the cutting edge of so
many industries worldwide.
And it is that innovative spirit that will rebndle economic growth in the United States.
We're taking steps to ensure that our prosperity continues. First, the tax cut means that $40
billion is showing up in consumers pocketbooks in the third quarter of this year. Whether
taxpayers spend it or invest it, it can only be good for the economy. Second, we are pushing to
expand trade around the world, so that US companies and US workers can sell their products in
more markets around the world.
During the economic boom of the last decade, growth in exports made up more than onefifth of the growth in our economy. Last year the United States exported about $780 billion in
goods and services.
Growing global trade has been good for Americans both as consumers and as workers.
NAFTA and the Uruguay round alone have boosted income and lowered prices for an average
American family offoUT by at least $1,300. Export related jobs pay about 15% more than the
average US wage.
Most importantly, trade creates a virtuous cycle. Bringing down barriers in other nations
creates opportunities for US workers and businesses. And increasing the flow of goods and
services between nations expands the global economy and creates more income in other nations,
who in tum have more purchasing power to buy US goods and services.
PO-590
For press releases, speeches, public schedules and official biographies, call our 24JJour fax line at (202) 622-2040
·U~S. Government Pri"lina OHice: 199B - 619-559
We thrive on competition. It is what keeps us searching for that next great idea. That's
why we have the world's most open trade regime. We welcome competition at home and
abroad, because it keeps us on our toes. We have no reason to fear competition - it is what fuels
our success.
You might call me an eternal optimist, but the facts back me up. Look at the amazing
turnaround in US manufacturing in the last 20 years. We woke up one day and realized the
world was catching up to our productivity in manufacturing. According to the pessimists who
preach "the race to the bottom", US manufacturers should have responded by sending all
production overseas. Did we abandon those industries, and let the rest of the world make those
products? No way. We rose to the challenge, often leaming from our foreign competitors and
adopting their methods to improve our own productivity. And American manufacturing today
continues to 1ead the world.
Open markets and competition provide a challenge to each and everyone one OfYOll
every day. You all are successful because you respond to that challenge. And as you innovate
and invent, you create millions of high-paid jobs for working Americans. In California alone,
1.1 millionjobs come from manufacturing exports.
This month Congress will vote to give the President Trade Promotion Authority, so we
can continue to bring down trade baniers and open up foreign markets to US products. So long
as we continue to reach out to global markets, we'll continue to lead the world. There is no end
to what American ingenuity can achieve and what prosperity it can create for working families
across the nation.
-30-
DEPARTMENT
OF
IREASURY
THE
TREASURY
NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. • 20220. (202) 622·2960
September 6,2001
Embargoed Until 10:30 a.m.
Contact: Tara Bradshaw
(202) 622-2960
STATEMENT OF DEPUTY TREASURY SECRETARY KEN DAM
ON THE LAUNCH OF EFP'FS-ONLINE
It is not a coincidence that my first press conference since being sworn in as President
Bushls Deputy Treasury Secretary involves the use oftechnology to make government better for
American businesses and individuals. I could not have picked a more appropriate and personally
compelling occasion.
Under President Bush and Treasury Secretary Paul O'Neill's leadership, we have reduced
taxes by $1.35 trillion dollars over the next ten years. Technology can do many wonderfui things.
Unfortunately, it can't make taxes disappear, but EFTPS-OnLine can make taxes less painful to
pay.
Today, we have a taken some real steps to make the government better.
Paying taxes online.
Three words that will change the way business and individuals interact with the federal
government. For years, the private sector has provided on-line payments and shopping. Why?
Because the private sector - using technology - has identified convenient and secure methods to
do business. People seek convenience, they seek security, they seek confidentiality, and they
seek privacy.
Today, we are pleased to announce that these principles: convenience, security,
confidentiality, and privacy - will be applied to paying taxes online.
Paying taxes, will be, in a word, easy.
This use of technology - in this case the internet - will help businesses become more
productive. Instead of spending valuable resources on working on taxes, those same resources
can be better spent dedicated to the bottom line. This in turn, will help these businesses become
more productive, which in tum will help the economy grow. This in tum, of course, will help
raise our standard ofliving.
PO-591
For press releases, speeches, public schedules and official biographies, call our 24~our fax line at (202) 622-2040
There is, of course, more to technology that just paying taxes online.
Technology will is playing an increasingly important role in the financial sector.
Financial privacy, cashless payment systems, critical infrastructure protection. There are a lot of
ways the government can use technology to make life better for our nation's business and
individuals, and I'll proudly be at the forefront in all of these areas and at future announcements.
I am honored to join FMS Commissioner Dick Gregg, and IRS Commissioner Charles
Rossotti, today. These two individuals deserve a great deal of credit for this innovation, and I'm
delighted to share the podium with them.
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
Office of Financing
202-691-3550
CONTACT:
FOR IMMEDIATE RELEASE
September 05, 2001
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
28-Day Bill
September 06, 2001
October 04, 2001
912795HR5
Term:
Issue Date:
Maturity Date:
CUSIP Number:
3.430%
High Rate:
Investment Rate 1/:
3.490%
Price:
99.733
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 15.42%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
Federal Reserve
TOTAL
$
36,705,700
21,763
$
ll,918,455
21,763
o
o
36,727,463
12,000,218
2,008,255
2,008,255
38,735,718
$
14,008,473
Median rate
3.420%: 50% of the amount of accepted competitive tenders
was tendered at Qr below that rate.
Low rate
3.390%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
36,727,463 / 12,000,218
=
3.06
1/ Equivalent coupon-issue yield.
'0-592
http://www.publicdebt.treas.gov
D EPA R T 1\1 E N T
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THE
T REA SUR Y
NEWS
OFFICE OF PUBUC AFFAIRS -1500PENNSYLVANIAAVENUE, N.W. -WASHINGTON,D.C.• 20220. (202) 622-2960
Contact: Tara Bradshaw
(202) 622-2014
For Immediate Release
September 6, 2001
WEEK EIGHT:
TREASURY TO MAIL OUT 8.387 MILLION CHECKS
ON FRIDAYTomorrow the Treasury Department will send out 8.387 million advance payment checks
to taxpayers for more than $3.559 billion in tax relief. These checks will be sent to taxpayers
whose last two digits of their Social Security numbers are 70-79
Week Eight (September 7) Social Security Numbers 70-79
Number of Checks 8.387 million
Amount of Relief $3.559 billion
Week Seven (August 31) Social Security Numbers 60-69
Number of Checks 8.314 million
Amount of Relief $3.527 billion
Week Six (August 24) Social Security Numbers 50-59
Number of Checks 8.266 million
Amount of Relief $3.550 billion
Week Five (August 17) Social Security Numbers 40-49
Number of Checks 8.219 million
Amount of Relief $3.483 billion
Week Four (August 10) Social Security Numbers 30-39
Number of Checks 8.210 million
Amount of Relief $3.467 billion
Week Three (August 3) Social Security Numbers 20-29
Number of Checks 8.l85 million
AmOlUlt of Relief $3.468 billion
Week Two (July 27) Social Security Numbers 10-19
Number of Checks 8.133 million
Amount of Relief $3.443 billion
PO-593
Fur press releases, speeches, public schedules and official biographies, call uur 24-hour fax line at (202) 622-2040
Week One (July 20) Social Security Numbers 00-09
Number of Checks 7.908 million
Amount of Relief $3.336 billion
Eight Week Total
Number of Checks 65.622 million
Amount of Relief $27.833 billion
The Treasury Department will announce every week the number of checks that are being
mailed out for that week, and the amount of tax relief that is being sent to taxpayers. Checks will
be mailed over a ten-week period, according to the last two digits ofthe taxpayers Social
Security number. Notices from the Internal Revenue Service will inform taxpayers the amount of
their check and when they should expect it have been mailed. Single taxpayers will get a check
up to $300, head of household up to $500 and married couples filing jointly will get up to $600.
Because the Social Security number determines when checks are mailed, taxpayers
may receive their checks at different times than their neighbors or other family members.
On ajoint return, the first number listed will set the mailout time.
If the last two digits of your
Social Security number are:
00 - 09
10 - 19
20 - 29
30 - 39
40 - 49
50 - 59
60 - 69
70 -79
80 - 89
90 - 99
You should receive your check
the week of:
July 23
July 30
August 6
August 13
August 20
August 27
September 3
September 10
September 17
September 24
-30-
Ol<'I<'ICE 01<' PUBLIC An'AIRS e1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C •• 20220. (202) 622-2960
EMBARGOED UNTIL 2:30 P.M.
September 6, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction 13-week and 26-week Treasury bills totaling
$26,000 million to refund an estimated $21,133 million of publicly held 13week and 26-week Treasury bills maturing September 13, 2001, and to raise new
cash of approximately $4,867 million. Also maturing is an estimated $11,000
million of publicly held 4-week Treasury bills, the disposition of which will
be announced September 10, 2001.
The Federal Reserve System holds $10,470 million of the Treasury bills
maturing on September 13, 2001, in the System Open Market Account (SOMA).
This amount may be refunded at the highest discount rate of accepted
competitive tenders either in these auctions or the 4-week Treasury bill
auction to be held September 11, 2001. Amounts awarded to SOMA 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 $1,023 million into the 13-week bill and $1,055
million into the 26-week bill.
The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e . g ., 17. 13 %•
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-594
For press releases, speeches, public schedules and official biographies, call (Jur 24-hour fax line at (202) 622-2040
TO BE ISSUED SEPTEMBER 13, 2001
September 6, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . . . . . $14,000 million
Public Offering ... " . . . . . . . . . . . . . . . . . . . . $14,000 million
Description of Offering:
Term and type of security . . . . . . . . . . . . . . . 91-day bill
CUSIP number . . . . . . . . . . . . . . . . . . • . . . . . . . . . 912795 HX 2
Auction date .................•....•...•. September 10, 2001
Issue date ................•...•.....•.•. September 13, 2001
Maturity date .................•.......•. December 13, 2001
Original issue date . . . . . . . . . . . . . . . . . . . . . June 14, 2001
Currently outstanding .....•..........••. $16,625 million
Minimum bid amount and multiples ........ $l,OOO
$12,000 million
$12,000 million
1B2-day bill
912795 JK 8
September 10, 2001
September 13, 2001
March 14, 2002
September 13, 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 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 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.
"aximum 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 daylight saving time on auction day
Competitive tenders •..... Prior to 1:00 p.m. eastern daylight saving time on auction day
.ayment 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.
D EPA R T 1\1 E N T
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THE
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622·2960
FOR IMMEDIATED RELEASE
September 7,2001
Contact: Tasia Scolinos
(202)-622-2960
UNDER SECRETARY FOR ENFORCEMENT JIMMY GURULE APPLAUDS
FATF DECISIONS
The Treasury Department supports and endorses the FATF decisions made today in
Paris. "International cooperation is vital in our fight against money laundering," says
Treasury Department Under Secretary for Enforcement Jimmy Gurule. "The United
States will continue to partner with other FATF countries in a joint effort to combat
money laundering on a global scale." The Treasury Department's 2001 Money
Laundering Strategy, which will be released shortly, emphasizes the importance of
international cooperation such as that exhibited today. A summary of the F ATF decisions
are listed below:
•
•
•
•
•
Counter measures against the Philippines will be taken on September 30,2001 unless
the Philippines enact significant legislation addressing their money laundering
deficiencies prior to that date.
Countermeasures will be taken against Nauru on November 30, 2001unless they
enact amendments to their money laundering legislation prior to that date.
Due to Russia's recent passage of legislation addressing their money laundering
deficiencies, the FATF is optimistic that they will continue on this positive course of
action and that sanctions against them will not become necessary.
Due to their failure to implement comprehensive money laundering legislation,
Ukraine and Granada have been added to the NCCT list.
The FATF has requested an implementation plan from Dominica to support the
legislative progress they have made over the last year.
FATF INFORMATION: The FATF is an independent international body. The
twenty-nine members countries and governments of the FATF are: Argentina; Australia;
Austria; Belgium; Brazil; Canada; Denmark; Finland; France; Germany; Greece; Hong
Kong, China; Iceland; Ireland; Italy; Japan; Luxembourg; Mexico; The Kingdom of the
Netherlands; New Zealand; Norway; Portugal; Singapore; Spain; Sweden; Switzerland;
Turkey; United Kingdom; and the United States. Two international organizations are also
members of the FATF: the European Commission and the Gulf Co-operation Council.
-30PO-595
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
DEPARTlVIENT
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W•• WASHINGTON, D.C .• 202200) (202) 622-2960
FOR IMMEDIATED RELEASE
September 10, 2001
Contact: Tony Fratto
(202) 622-2960
U.S. TREASURY SECRETARY PAUL O'NEILL TO UNIVERSITY OF
INTERNATIONAL BUSINESS AND ECONOMICS
BEIJING, CHINA
Thank you. It's a pleasure to speak with you this morning. As students and faculty of
international business and economics, you are in the vanguard of China's reforms and global
opening. You will help lead China into a new century - one in which the potential for growth
and prosperity is enormous.
As a businessman for many years and as Treasury Secretary now, I've traveled to many
comers of the world. No matter where I go, in rich nations and poorer ones, I find a universal
wish for prosperity. There is a universal hope for betterment, a hope held out by students like
yourselves. I am sure that you are eager to work hard and take advantage of opportunities to
improve the quality of life for the people you care about most - for your families, for your
neighbors, and for your fellow countrymen. This universal desire fuels my belief that people
around the world can achieve wonderful progress toward development and prosperity. This is
especially so here in China. I am eager, on behalf of the US government, to encourage you in
your strivings and to offer to share our experiences in the United States for your information and
possible adoption or adaptation to your own situation as you move forward.
China is experiencing strong economic growth, little affected by the slowing of the rest of
the world. The steps you have taken to free up your economy have supported this growth,
especially in your cities and coastal regions. This is not my first trip to China. As a
businessman, I have visited your economic zones and major cities several times, seeing for
myself the progress you have made. You have successfully managed foreign joint ventures and
welcomed wholly foreign-owned companies as well, creating higher paying jobs for millions of
Chinese workers. You have allowed foreign firms to profit, which is crucial to ensuring a
continued flow of investment into China, continuing industrial job creation and technology
transfer -- including the teaching of management techniques -- to the benefit of domestic
entrepreneurs.
PO-596
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,
Allowing price competition has created a boom in retail commerce - so that the citizens
of China have greater access than ever before to affordable products to improve their own living
standards. Improved living standards are evidenced by such things as the spreading availability
of consumer durables like air conditioners and refrigerators - not only do more Chinese own
these, but they also have more dependable electricity as price reforms have made shortages a
much diminished problem. These are concrete steps toward higher living standards that we all
want to see in every comer of the world. President Bush and his Administration envision a
world of better health, greater opportunity, and more comfortable living for people in every part
of the world.
We in the United States are eager to see China's growth continue, both because we have
a moral obligation to contribute to the betterment of people's lives around the world and because
growth here and thr,oughout Asia is crucial to global prosperity.
There is no question that such a rapid pace of change is difficult. And yet the benefits, in
the lives ofthe Chinese people, far outweigh the dislocations. We in the United States have
learned that flexibility in our economy, combined with assistance for those in transition, keep our
economy moving forward and prospering. I want to encourage you as you progress with the
reforms you are pursuing now: privatization, banking refonns, WTO accession, and fiscal
reforms.
One of the most important endeavors you are currently engaged in, corporate governance
reform, is crucial to continuing China's growth. Placing profit incentives and management
efficiency as the highest priority, rather than government targets, will ensure that China's
e~onomy flourishes and Chinese firms succeed.
I learned this lesson very personally in the 19808 in the United States. US manufacturers
had become complacent, protected from the competition that stimulates innovation. We woke up
one day to find stiff competition from Asia. We went through major corporate restructuring,
which was painful for some at the time, shutting down unproductive operations and laying off
workers. But it led to a rebound in US productivity growth that fueled America's boom of the
last 15 years. Placing a strict priority of profit incentives and management efficiencies made
existing US firms more successful, and created an environment that welcomed upstart small
businesses to compete and create jobs for those who felt the dislocations of restructuring.
Clearly, corporate reform is a much bigger operation in China. The size of the challenge
only makes it more important that you rise to meet it. You have already begun to introduce
modem corporate structures like boards of directors and stock share ownership. But stock sales
are more than just a source of funds. These steps hold businesses accountable. They are crucial
to a flourishing business sector. Success will follow as you continue down this path of reform.
It will lead to transparent reporting of actual fmancial performance and accurate balance sheet
data. Reform can empower owners to change ineffective management-it can even empower
markets to change a company's owners.
2
Resistance to corporate reforms come from two places: first, the government agencies
who control many of these corporations now, and second from the workers who fear the
dislocation that accompanies change and growth.
Many government agencies rely on the profits of the companies they own to supplement
the tax revenues that don't provide enough operating funds. The collection and distribution of
funds by government is diffuse, difficult to understand or track, and therefore open to
misallocation and fraud. If government agencies relied upon a central budgeting process to
designate operating funds for each agency, there would be much greater accountability for the
use of government funds. A centralized treasury system in China would reduce the need for
government agencies to control corporations and siphon their revenues for political use.
In the United States, virtually every central government payment comes from one place the US Treasury. Departments and other agencies must request payment from the Treasury and
must supply appropriate documentation. This system is highly transparent, so that every
taxpayer can see where their tax dollars are spent, and can hold the government accountable for
any misuse of funds. This system may not be immediately applicable to your situation but it is
important to get the central idea in place.
In November, Executive Vice Minister of Finance, Mr. Lou, is coming to Washington, in
part to discuss TreasUIy management. I am eager to welcome him and make available to him
whatever assistance our experience can provide as you make this important transition in China.
Worker resistance to corporate reforms is. understandable. Until recently, a change of
jobs could cost a wo~er his housing, health care and pension. China has taken steps to delink
these basic necessities from employment. These steps will make job transitions less traumatic
for workers, and I welcome the progress you have already made in delinking housing from
employment. Two things will make labor movement far easier on China's families: a better
social safety net and continued growth that creates new jobs. China's journey to prosperity will
quicken as workers find it easier to move to new sectors and new locations, constantly increasing
their productivity and their wages.
Although China's economy is growing, new job growth has not been high enough to
absorb both laid-off workers and new entrants into the labor force. The best way to improve the
quality of growth is to make it market-driven. illtimately, consumer demand is the best source
of sustained growth. I applaud China's efforts to strengthen private enterprises and improve
their access to bank credit and to capital markets. Consumption-based demand will also come
from higher rural incomes, and I am encouraged by steps China is taking in that direction. A
strong consumer-oriented middle class-in both urban and rural areas-is the key to sustained
growth and accelerated job creation.
3
Let me conclude by saying that my hopes for you are boundless, and the US stands ready
to support and encourage your progress. You are making the right choices, embracing market
refonns, joining the world economy, and promoting private entrepreneurship. Each of you
young people gathered here today is embarking on an adventure, filled with opportunities and
discoveries that will lift your nation to ever better standards ofliving. Your futures are bright,
and I wish you every success.
--30--
4
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE, N. W.• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 11: 30 A.M.
September 10, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $10,000 million
to refund an estimated $11,000 million of publicly held 4-week Treasury bills
maturing September 13, 2001, and to pay down approximately $1,000 million.
Tenders for 4-week Treasury bills to be held on the book-entry records of
TreasuryDirect will not be accepted.
The Federal Reserve System holds $10,470 million of the Treasury bills
maturing on September 13, 2001, in the System Open Market Account (SOMA). This
amount may be refunded at the highest discount rate of accepted competitive
tenders in this auction up to the balance of the amount not awarded in today's
13-week and 26-week Treasury bill auctions. Amounts awarded to SOMA will be in
addition to the offering amount.
Op 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 allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e . g., 1 7 . 13% .
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP) , if they meet or exceed the reporting
threshold.
However, Treasury will not include NLPs in the calculation of award
limits for those bidders.
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-597
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HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED SEPTEMBER 13, 2001
September 10, 2001
Offering Amount '" .................. $10,000 million
Public Offering . . . . . . . . . . . . . . . . . . . . . $10,000 million
Description of Offering:
Term and type of security ........... 28-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . 912795 GS 4
Auction date . . . . . . . . . . . . . . . . . . . . . . . . September 11,2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . September 13,2001
Maturity date . . . . . . . . . . . . . . . . . . . . . . . October 11,2001
Original issue date ................. Apri1 12,2001
Currently outstanding ............... $32,730 million
~nimum bid amount and multiples .... $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 three decimals in
increments of .005%, e.g., 4.215%.
(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 daylight saving time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms: By charge to a funds account at a Federal Reserve Bank
on issue date.
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
CONTACT:
Office of Financing
202-691-3550
september 10, 2001
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
91-Day Bill
September 13, 2001
December 13, 2001
9l2795HX2
3.180%
Investment Rate 1/:
3.251%
Price:
99.196
All noncompetitive and successful competitive bidders were awarded
13ecurities at the high rate. Tenders at the high discount rate were
illotted 51.75%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
PIMA (noncompetitive)
Tendered
$
Accepted
27,506,684
1,393,963
12,606,039
1,393,963
o
o
SUBTOTAL
28,900,647
Federal Reserve
4,399,520
TOTAL
$
$
33,300,167
14,000,002 2/
4,399,520
$
18,399,522
Median rate
3.160%: 50% of the amount of accepted competitive tenders
'as tendered at or below that rate. Low rate
3.140%:
5% of the amount
,f accepted competitive tenders was tendered at or below that rate.
id-to-Cover Ratio = 28,900,647 / 14,000,002 = 2.06
/ Equivalent coupon-issue yield.
/ Awards to TREASURY DIRECT = $1,123,307,000
-598
http.:llwww.publicdebttreas.gov
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SEC~ITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC'
CONTACT:
FOR IMMEDIATE RELEASE
September 10, 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
September 13, 2001
March 14, 2002
912795JK8
3.120%
High Rate:
Investment Rate 1/:
Price:
3.213%
98.423
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
~llotted
36.06%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Ter..dered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
Accepted
26,076,812
1,428,328
$
o
SUBTOTAL
::J
12,000,130 2/
27,505,140
Federal Reserve
TOTAL
10,571,802
1,428,328
4,526,808
4,526,808
$
32,031,948
$
16,526,938
Median rate
3.100%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
3.045%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
= 27,505,140
/ 12,000,130
= 2.29
/ Equivalent coupon-issue yield.
:/ Awards to TREASURY DIRECT = $1,121,258,000
)-599
http://www.publicdebt.treas.gov
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OFPUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATED RELEASE
September 12, 2001
Contact: Tony Fratto
(202)622-2960
G-7 Statement Regarding Attacks in the United States
We, the G-7 Ministers of Finance and Central Bank Governors, condemn the
appalling terrorist attacks carried out in the United States on Sept. 11. Our
condolences go out to those who have suffered and lost loved ones as a result of
these cowardly actions.
We are committed to ensuring that this tragedy will not be compounded by
disruption to the global economy. Our central banks have indicated that they will
provide liquidity to ensure that financial markets operate in an orderly fashion.
We will monitor economic developments and financial markets closely and stand
ready to take further action as necessary.
PO-600
Ff1T' press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
D EPA R T :\1 E N T
0 F
T 1-1 E
'IREASURY
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W•• WASHINGTON, D.C•• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
Wednesday, September 12,2001
CONTACT: ROB NICHOLS
202-622-2910
REMARKS BY DEPUTY TRESURY SECRETARY KEN DAM
DIPLOMATIC RECEPTION ROOM
U.S. DEPARTMENT OF THE TREASURY
"Secretary O'Neill has cancelled the remainder of his Asia trip. He is en route back to
the United States, and is expected later today. I have been in constant communication with him,
and he has been fully briefed on the situation. The Secretary expressed his sincere sympathy to
the families ofthe victims ofthis tragedy.
"As for my trip to Asia, that has been postponed.
"I want to reiterate what the Secretary said last night in Tokyo: our nation's financial
markets are strong and resilient. In the face of yesterday's tragedy, the financial system
functioned extraordinarily well, and we have every confidence that it will continue to do so in
the days ahead.
"While we don't generally comment on specific meetings or phone calls, I do want to say
that we have received many expressions of sympathy and solidarity from our friends and
colleagues around the world in response to yesterday's tragic events.
"With Treasury employing 25% of the federal law enforcement officers authorized to
make arrests and carry firearms, I will now address the role Treasury's enforcement bureaus are
playing in the government-wide effort.
"All of the Secret Services' resources and protective measures have been implemented
and appropriate steps and protocols are being followed. The Service has activated their
emergency plan and remains on high alert today. I am sorry that I am not in a position to
elaborate on any of these procedures.
"The Customs Service is at the highest level of alert. All US Customs air and marine
assets have been put on alert. All U.S. Customs investigators have been put on alert to support
the FBI in its efforts. US Customs air assets have been brought in to assist other government
agencies in the movement and deployment of personnel across the country. Customs is also
coordinating with INS with respect to monitoring the borders.
PO-601
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"For the record, Customs never closed the US borders. Rather, the highest level of
security has had the effect of slowing border crossings. Commercial cargo continues to flow into
the US.
"ATF is actively participating in investigative efforts within the Joint Terrorist Task
Forces across the country. ATF has established command posts around the country in furtherance
ofthese investigative efforts. The ATF National Response Team has been requested to assist in
the investigation surrounding the incident at the Pentagon.
"The Treasury Department's enforcement bureaus I just mentioned - the USSS, the
Customs Service, and the ATF, as well as the IRS Criminal Division - had offices and
employees in the World Trade Center complex.
"Based on the information we have available, we have not yet been able to account for
every enforcement bureau person in New York. A full accounting will be forthcoming.
"We are in the process of verifYing the location of all our law enforcement personnel and
related staff in New York. The total number of personnel in New York is approximately 1200
individuals.
"Treasury is conducting the nation's business. We are processing Social Security
Checks, we are printing cash, we are minting coins, and the rebate checks will continue to be
mailed on schedule.
"On the matter of the World Bank/IMP Meetings, it is premature to address that question.
"Let me finish with this.
"With some exceptions, finance, commerce and banking systems have worked effectively
and continuously. Acts of evil will not cripple the markets. Our financial system is, and
remains, strong. The American economy is open for business.
"As the President said earlier this morning: 'We will not allow this enemy to change our
way oflife or restrict our freedoms.'
"Thank you."
o
F P \. R
r \[
E \I T
0 F
THE
T REA S
e
R Y
NEWS
lREASURY
oma OF PUBUC AFFAIRS • 1500 PENNSYLVANlAAVENUE, N.W•• WASHINGTON, D.C•• 20220 • (202) 622-2960
u.s. International Reserve Position
09/11/01
The Treasury Department today released U.S. reserve assets data for the week ending September 7, 2001. .As indicated in
this table, u.s. reserve assets totaled $67,475 million as of September 7, 2001, down from $67,987 million· as of August 31,
2001.
'n
us millions}
Official U.S. Reserve Assets
TOTAL
• Foreign Currency Reserves
a. Securities
I
1
September 7. 2001
67,475
August 31, 2001
67,987
Euro
5,525
Yen
11,099
TOTAL
Euro
16,624
5,~01
Yen
TOTAL
10,977
o
Ofwhich, issuer headquartered in the U.S.
•
16,.l.78
C
b. Total deposits ~ith:
b.i. Other central banks and BIS
b.ii. Banks· headquartered in the U.S.
b.ii. Of which, banks located abroad
b.iii. Banks headquartered outside the U.S.
b.iii. Of which. banks located in the U.S.
IMF Reserve Position
2
Special Drawing Rights (SDRs)
Gold Stock l
Other Reserve· Assets
2
9,304
4.805
14,110
9,265
4,753
0
0
0
0
0
15.297
15,138
10,913
10,799
11,044
11,04A
0
0
0
0
Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
)OMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-ta-market values, and
=posits ref/ect carrying values.
The items, *2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
)liar terms at the official SDRIdollar exchange rate for the reporting date. The IMF data for August 31 are final. The entries in the table
)ove for September 7 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's
IF data.
Gold stock is valued monthly at $42.2222 per fine troy ounce. Values shown are as of July 31. 2001. The June 30, 2001 value was
1,044 million.
)-602
14,018
0
u.s. International Reserve Position (cont'd)
I. Predetermined Short-Term Drains on Foreign Currency Assets
August 31, 2001
· Foreign currency loans and securities
September 7. 2001
o
o
o
o
o
o
o
o
· Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.8. Shorf positions
2.b. Long positions
· Other
II. Contingent Short-Term Net Drains on Foreign Currency Assets
August 31, 2001
· Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
· Foreign currency securities with embedded options
· Undrawn, unconditional credit lines
September 7. 2001
o
o
o
o
o
o
o
o
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
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
DEPARTMENT
OF
fIREASURY
THE
TREASURY
NEWS
omCE OFPUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C .• 20220. (202) 622·2960
SEPTEMBER 12, 2001
Contact: Rob Nichols
(202) 622-2960
Deputy Secretary of the Treasury Ken Dam to Address Media
Kenneth Dam, Deputy Secretary of the Treasury, will hold a press conference
at 11 :00 AM this morning to update media on the status of Treasury
operations. After a brief statement he will be available to answer questions.
Deputy Secretary Kenneth Dam
Press Conference
Wednesday, September 12, 2001
11:00 AM
Treasury Building
Diplomatic Reception Room
NOTE:
An embargo will be in force for the press conference; a lift on the
embargo will be announced at the press conference.
Only members of the media holding Treasury or White House
security passes will be admitted.
PO-603
For press releases, speeches, public schedules and official biographies, call our 24.Jzour fax line at (202) 622-2040
D EPA R T ,\1 E N T
0 F
THE
T.t' E
AS· U R y.,
.
I
",.~: .'<
',
,
"
~
I.
'.
-
NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASlllNGTON, D.C•• 20220. (202) 622·2960
Contact: Tara Bradshaw
(202) 622-2014
September 12, 2001
For Immediate Release
TREASURY, IRS WORK TO PROVIDE RELIEF FOR VICTIMS OF ATTACKS
WASHINGTON - Internal Revenue Service Commissioner Charles O. Rossotti today
waived failure to deposit penalties for air transportation taxes due to be deposited on
September 12, 2001. Those penalties will be waived if deposits are made by Wednesday,
September 26,2001. The IRS will re-evaluate the duration of this relief as circumstances
warrant.
This is part of a broader effort by the Treasury Department and the IRS to provide relief
for victims of attacks in New York and at the Pentagon. In the aftermath of Tuesday's tragedy,
the IRS and Treasury want to assure taxpayers, businesses and tax practitioners that they are
working aggressively to issue tax guidance and resolve potential issues.
The IRS and Treasury will be announcing payment and filing relief for individual and
business taxpayers affected by these attacks. Details will be issued as soon as possible.
The IRS and Treasury want to assure the victims, families and others affected by the
tragedies in New York and at the Pentagon that the agencies will do everything possible to
provide administrative tax relief quickly. Just as importantly, the IRS and Treasury will work to
minimize the distraction of tax issues during this terrible time.
The entire Treasury family extends its prayers and sympathies to the families, friends,
government workers and others affected by this attack.
-30PO-604
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
... ,
~
DEPARTMENT OF THE TREASURY
OFFICE OF PUBLIC AFFAIRS
FOR IMMEDIATE RELEASE
September 12, 2001
CONTACT
BETSY HOLAHAN
202-622-1997
TREASURY STATEMENT REGARDING MARKET DECISIONS
The Treasury Department supports the decision of the stock markets to remain closed
tomorrow. While the nation's fmancial infrastructure is strong and intact, concerns remain
regarding limited access to the financial district in lower Manhattan due to rescue operations
currently underway. This is the wisest course of action at this time.
We expect the stock markets to open as soon as it is practical and appropriate. America's
financial system is resilient. The Treasury Department also commends the remarkable
efforts of everyone involved under extraordinary circumstances. The nation's business will
continue and will not succumb to fear. Our thoughts and prayers continue to be with the
families of the victims in both Washington and New York.
The Treasury Department welcomes the news that the bond market will resume trading
tomorrow.
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PO-605
D E P \ R
r \1
E "\; T
() F
-I II F
T I{ E ,\ S l R Y
NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.• 2(}220. (202) 622·2960
Contact: Tasia Scolinos
(202) 622 -2960
FOR INNED LATE RELEASE
September 13, 2001
DEPARTMENTS OF JUSTICE AND TREASURY DEPLOY MARSHALS,
BORDER PATROL AND CUSTOMS OFFICIALS TO U.S. AIRPORTS
WASHINGTON, D.C. - The Departments of Justice and Treasury announced today
the deployment of agents from the U.S. Marshals Service, U.S. Border Patrol and
U.S. Customs at designated airport security check points throughout the country.
The heightened security measures are part a broad effort by federal law
enforcement authorities to provide a larger police presence at airports as they
prepare to reopen and resume regular air travel.
"The Department of Justice along with other federal law enforcement
agencies will expend every effort to ensure that air travel in the United States
and abroad is safe and orderly," said Attorney General John Ashcroft. "The
presence of these officers, in addition to the heightened security procedures
already put into effect, will serve as a visible reminder of the United States
Government's commitment to protecting the safety of American citizens."
"In times such as these it is important to use all available resources,"
said Treasury Under Secretary for Enforcement, Jimmy Gurule. "U.S. customs
officers have the training and expertise to help augment the nations airport
security system. This is a wise use of a valuable resource. The Treasury
agency supports the use of interagency cooperation in forming a unified front
against terrorism."
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PO-606
Fur press releases, speeches, public schedules arul cdJicial biographies, call our Z4-hour fax line at (202) 622-2040
·u.s. Govsmmenl Printing Ollite: 1998 - 619-559
D EPA R T IVI E N T
TREASURY
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.' WASHINGTON, D.C._ 20220. (202) 622-2960
EMBARGOED UNTIL 11: 30 A.M.
September 13, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction 13-week and 26-week Treasury bills totaling
$26,000 million to refund an estimated $21,381 million of publicly held 13week and 26-week Treasury bills maturing September 20, 2001, and to raise new
cash of approximately $4,619 million. Also maturing is an estimated $13,000
million of publicly held 4-week Treasury bills, the disposition of which will
be announced September 17, 2001.
The Federal Reserve System holds $10,575 million of the Treasury bills
naturing on September 20, 2001, in the System Open Market Account (SOMA)_
rhis amount may be refunded at the highest discount rate of accepted
=ompetitive tenders either in these auctions or the 4-week Treasury bill
auction to be held September 18, 2001. Amounts awarded to SOMA will be in
addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and Interlational Monetary Authority (FIMA) accounts bidding through the Federal
~eserve 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
)oldings of approximately $1,044 million into the 13-week bill and $804
nillion into the 26-week bill.
The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
!!l.g., 17.13%.
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
1arketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
unended) .
Details about each of the new securities are given
highlights.
10-607
000
lttachment
~n
the attached
)ffer~ng
For press reiea'lllJ clle~'h£s.. DlIbij, schedules alld official biographies, call our 24-hour fax lille at (202) 622-2040
-
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED SEPTEMBER 20, 2001
September 13, 2001
ffaring Amount
lblic Offering
$14,000 million
$14,000 million
$12,000 million
$12,000 million
of Offering:
and type of security . . . . . . . . . . . . ..
JSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . .
lction date . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jsue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
~turity date . . . . . . . . . . . . . . . . . . . . . . . . . .
ciginal issue date . . . . . . . . . . . . . . . . . . . .
lrrently outstanding . . . . . . . . . . . . . . . . . .
inimum bid amount and multiples .......
91-day bill
912795 HY 0
September 17, 2001
September 20, 2001
December 20,2001
June 21,2001
$16,913 million
$1,000
182-day bill
912795 JL 6
September 17, 2001
September 20, 2001
March 21, 2002
september 20, 2001
~scription
~rm
$1,000
Ie following rules apply to all securities mentioned above:
]bmission 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 tim. for receipt of
competitive tenders.
~x~mum Recognized Bid at a Single Rate .... 35% of public offering
~ximum Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% of public offering
!ceipt of Tenders:
Noncompetitive tenders ... Prior to 12:00 noon eastern daylight saving time on auction day
Competitive tenders ...... Prior to 1:00 p.m. eastern daylight saving time on auction day
l~rnent Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full
lr amount with tender.
TreasuryDirect customers can use the Pay Direct feature which authorizes a charge
b
the~r
aooount of record at their finanoia1 institution on issue date.
D EPA R T ;,\1 E N T
TREASURY
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIAAVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
September 13, 2001
Contact: Public Affairs
(202) 622-2960
TREASURY SECRETARY PAUL O'NEILL TO ADDRESS MEDIA
Treasury Secretary Paul O'Neill, will make a statement to the media at 4:30 p.m.
this afternoon to update media on the status of Treasury Operations.
Treasury Secretary Paul O'Neill
Thursday, September 13,2001
4:30 p.m.
Treasury Department, Diplomatic Reception Room
1500 Pennsylvania Ave. NW
Washington, D. C.
Note:
Only members of the media holding Treasury or White House security
passes will be admitted.
PO-608
F",. press rele.lua,
speecb~
puh1ic schedules and official biographies, call our 24-hour fax line at (202) 622-2040
D E P ,\ I{ T \1 E :\ T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASIDNGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE:
Thursday, September 13, 2001
Contact Michele Davis
at 202-622-2960.
STATEMENT OF TREASURY SECRETARY PAUL O'NEILL
Good afternoon. As you know, I was overseas when terrorists attacked the United States.
I kept in contact with Treasury, with the Administration, with the Federal Reserve and with the
financial markets, and returned to Washington as soon as possible to deal with the aftennath of
this assault on America.
My deepest sympathies go out to the families ofthe victims of this tragedy. I am
especially proud of the men and women of Treasury's enforcement bureaus, who jumped into
action immediately to assist with rescue efforts and protect our people.
The destruction in New York City is horrible and detestable.
At the same time, America's dynamic economy is not located in anyone place. Innovation and
productivity are found in every factory and farm, every laboratory, every financial institution,
every small business and every home office across America. That spirit cannot be destroyed.
We have every reason to maintain our confidence in the US economy. No evil, no matter
how unspeakable, can destroy America's productive spirit. If anything, this evil act strengthens
our resolve to be the most free, most vibrant economy in the world.
This tragedy will cause some short-term dislocations. Supply disruptions are real, as
some transportation stopped or slowed for several days this week. These effects will be
transitory, as transportation flows return to normal.
Treasury is working to minimize the disruptions to our financial system. Banks have
been open and doing regular business all week. The Treasury bond markets traded successfully
today. This is an important step on the way back to full market operation. Our equity markets
will resume nonna! activity on Monday.
The prospects for a rebound in the US economy remain unchanged.
Treasury and the IRS are taking steps to minimize the distraction of tax issues raised by
this disaster. Today we are announcing initial administrative tax relief for the victims of the
attacks in New York and at the Pentagon.
Thank you.
PO-609
For press releases, speeches, public schedules and official biographies, call OUT 24-hour fax line at (202) 622-2040
D E P :\ R T 'I E N T
0 F
THE
T REA SUR Y
NEWS
OffiCE OF PUBllC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.• 20220 • (202) 622-2960
September 13,2001
For Immediate Release
Contact: Tara Bradshaw
(202) 622-2014
TREASURY, IRS ANNOUNCE RELIEF FOR VICTIMS OF ATTACKS
WASHINGTON - The Treasury Department and the Internal Revenue Service today
announced initial administrative tax relief for individual and business taxpayers who are unable
to meet their federal tax obligations because they were affected by Tuesday's terrorist attacks.
The IRS and Treasury are providing relief to all taxpayers - regardless of where they
reside - who are directly affected by the terrorist attacks. For example, this includes relief
workers, the victims on the airplanes, taxpayers whose place of employment is in a disaster area,
and taxpayers with records maintained in a disaster area qualify for the relief.
In addition, the agencies are providing relief to all taxpayers in the five boroughs of New
York City declared disaster areas by the President. They are also providing relief to taxpayers
located in Arlington County, Virginia, home of the Pentagon, which was declared a disaster area
today.
In the aftermath of Tuesday's tragedy, the IRS and Treasury want to assure taxpayers,
businesses and tax practitioners that they are working aggressively to monitor the situation and
resolve other potential tax administration issues as they are identified.
Affected taxpayers who have an original filing deadline between September 11,2001,
and November 30, 2001, have an additional six months plus 120 days oftime to file that return
and make any payment due with that return. Taxpayers who are currently on an extension that
expires between September 11, 2001, and November 30, 2001, will have an additional 120 days
to file that return.
Affected individual taxpayers who face an estimated tax payment date on September 17,
2001 may postpone that payment by induding the amount with their final estimated payments
for Tax Year 2001, which are due on January 15,2002.
Affected corporate taxpayers who face an estimated tax payment after September 10,
2001, and before January 15,2002, may postpone that payment until Jan. 15,2002.
PO-610
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622.2040
In addition, for six months the IRS will suspend many enforcement activities - such as
levies, seizures and summonses -- for affected taxpayers.
Taxpayers who are entitled to the relief described above should add the following
designation in red ink at the top of returns they file: "September 11, 2001-Terrorist Attack." If
they receive a notice from the IRS, they should contact the IRS as indicated on the notice to
explain why they are entitled to relief.
Although the IRS cannot extend the deadline for employment or excise tax deposits, the
IRS will provide relief for businesses unable to make these deposits because of the terrorist
attacks. The IRS will waive penalties on tax deposits required to be made by these businesses
between September 11,2001, and October 31,2001, if those deposits are made by November 15,
2001.
The IRS will provide additional details on this relief in Notice 2001-61.
Due to the unprecedented scope and breadth ofthis tragedy, the agencies will continue to
monitor the situation and may issue additional guidance as appropriate.
The entire Treasury family extends its prayers and sympathies to the families, friends,
government workers and others affected by this attack.
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Part III - Administrative, Procedural, and Miscellaneous
Disaster relief for taxpayers affected by the September 11, 2001 Terrorist Attack.
Notice 2001-61
PURPOSE
This notice provides tax relief under sections 6081, 6161, and 7508A of the
Internal Revenue Code for taxpayers affected by the September 11,2001, Terrorist
Attack, which included the destruction of the two World Trade Center towers and other
buildings in the World Trade Center complex, damage to the Pentagon, and the airplane
crash in Pennsylvania on Tuesday, September 11,2001. The President issued federal
disaster declarations on September 11 and 13, 2001. The September 11, 2001,
declaration covers five New York counties: Bronx, Kings, New York (boroughs of
Brooklyn and Manhattan), Queens, and Richmond. The September 13, 2001,
declaration covers Arlington County in Virginia, where the Pentagon is located. These
counties constitute a "covered disaster area" within the meaning of section
301.7508A-1(d)(2) ofthe Procedure and Administration Regulations. In addition, the
Internal Revenue Service has determined that other taxpayers affected (as defined
below) by the terrorist attack are also entitled to relief, regardless of where they reside.
Taxpayers who believe they are entitled to relief under this notice should mark
"September 11,2001 Terrorist Attack" in red ink on the top of their return and other
documents submitted to the IRS.
BACKGROUND
Section 6081 provides that the Secretary may grant a reasonable extension of
time (generally not to exceed 6 months) for filing any return, declaration, statement, or
other document required by the Internal Revenue Code or by regulations thereunder.
Section 6161 provides that the Secretary may grant a reasonable extension of
time (generally not to exceed 6 months) for paying the amount (or any installments) of
tax shown or required to be shown on any return or declaration required by the Code or
by regulations thereunder.
Section 7508A provides the Secretary with authority to postpone the time for
performing certain acts under the internal revenue laws for a taxpayer affected by a
Presidentially declared disaster as defined in section 1033(h)(3). Pursuant to section
750BA(a) and section 301.750BA-1 of the regulations, a period of up to 120 days may
be disregarded in determining whether the performance of certain acts is timely under
the internal revenue laws. Section 301.750BA-1 (c)(1) lists seven acts performed by
taxpayers for which section 7508A relief may apply. Among these acts are the filing of
certain tax returns; the payment of certain taxes; the making of deductible contributions
to certain retirement plans and individual retirement arrangements; the filing of a Tax
Court petition; the filing of a claim for credit or refund of tax; and the bringing of a lawsuit
upon a claim for credit or refund of tax.
Section 301. 750BA-1 (d)(1) describes the seven types of "affected taxpayers"
eligible for the 120 day postponement. These taxpayers include any individual whose
principal residence, and any business entity whose principal place of business, is
located in the covered disaster area; any individual who is a relief worker affiliated with
a recognized government or philanthropic organization and who is assisting in the
covered disaster area; any individual whose principal residence, and any business
entity whose principal place of business, is not located in the covered disaster area, but
whose records necessary to meet a filing or paying deadline are maintained in the
covered disaster area; any estate or trust that has tax records necessary to meet a filing
or paying deadline in a covered disaster area; and any spouse of an affected taxpayer,
solely with regard to a joint return of the husband and wife. Therefore, taxpayers
located outside of the covered disaster area may qualify for relief if they are covered by
one of the above mentioned categories.
Additionally, under section 301.750BA-1(d}(1 }(vii) of the regulations, the Internal
Revenue Service may determine that any other person is affected by a Presidentially
declared disaster. Accordingly, the Internal Revenue Service has determined that the
following persons are also affected by the disaster: (1) victims of the crash (including
those on the plane and those on the ground) of the four commercial jet airplanes
hijacked on September 11, 2001; (2) all workers assisting in the relief activities in the
covered disaster areas and in Pennsylvania, regardless of whether they are affiliated
with recognized government or philanthropic organization; and (3) taxpayers whose
place of employment is located within the Presidentially declared disaster area. In
addition, taxpayers who have difficulty in meeting their federal tax obligations because
of disruptions in the transportation and delivery of documents by mail or private delivery
services resulting from the terrorist attack, and who do not otherwise qualify under
section 750BA, are affected taxpayers only for purposes of relief as described in (5) of
the Grant of Relief section below. The perpetrators of the attack, and anyone aiding the
attack, will not qualify for relief under this notice.
GRANT OF RELIEF
(1) Individuals located in the affected counties and other individuals who are
"affected taxpayers" as defined by section 301.750BA-1(d)(1) of the regulations and by
this notice that have extended the time for filing their tax year 2000 federal individual
income tax return beyond September 10, 2001, will have a postponement to February
12,2002, to file their returns. A similar postponement to pay the amount of tax (or any
instal/ment of tax) shown or required to be shown on those returns is generally not
permitted. This is because the tax was originally due on the due date of the 2000
return, April 16, 2001, and, generally an extension of time to pay is not granted;
however, a period of 120 days from September 11, 2001, until January 9,2002, will be
disregarded in the calculation of a_ny failure to pay penalty. Thus, the penalty for failure
to pay the tax due would start accruing once again if the tax is not paid by January 9,
2002. These returns include individual income tax returns (Forms 1040, 1040A,
1040EZ, 1040NR, or 1040NR-EZ) and gift tax returns (Forms 709 and 709-A). See
section 301.750SA-1(c)(1) for a list of affected returns.
(2) Affected taxpayers as defined by section 301. 750BA-1 (d){ 1) of the regulations
other than individuals are granted both a 120 day postponement under section 750SA
and a six month extension under sections 6081 and 6161 to file certain federal tax
returns otherwise originally due on or after September 11, 2001, and on or before
November 30, 2001, and to pay the tax shown or required to be shown on those
returns. In addition, affected calendar year corporations and other entities that are
currently on a six-month extension of time to file their federal tax return that expires
between September 11, 2001, and November 30, 2001, will have an additional 120
days to file their returns under section 7508A. Thus, the tax year 2000 return for an
affected calendar year corporation that has been extended to September 17, 2001
(September 15,2001, is a Saturday), will now be due by January 15, 2002. A similar
postponement to pay the amount of tax (or any installment of tax) shown or required to
be shown on those returns is generally not permitted. This is because the tax was
originally due on the due date of the 2000 return, March 15, 2001, for a calendar year
corporation and generally, an extension of time to pay is not granted. A period of 120
days from September 11, 2001, until January 9, 2002, will be disregarded in the
calculation of any failure to pay penalty. Thus, the penalty for failure to pay the tax due
would start accruing once again if the tax was not paid by January 9, 2002. These
returns include partnership returns, corporate income tax returns, estate and trust
income tax returns, estate tax returns, annual returns filed by tax-exempt organizations,
certain excise tax returns and employment tax returns. See section 301. 750BA-1 (c)(1)
for a list of affected returns.
(3) The due date of any estimated tax payment for tax year 2001 originally due
on or after September 11, 2001, and before January 15, 2002, for taxpayers located in
the affected counties, and other affected taxpayers, is postponed under section 750BA
until January 15, 2002. This applies to estimated tax payments made by individuals,
corporations, estates, and trusts. Thus, for individuals, the third estimated tax payment
for tax year 2001, due on September 17, 2001, is postponed until January 15, 2002.
For a calendar year corporation, the third estimated tax payment for tax year 2001 , due
on September 17, 2001, is postponed until January 15, 2002. Affected taxpayers will
not be subject to penalties for failure to pay estimated tax installments for tax year 2001
with respect to installments that were originally due on or after September 11, 2001, and
before January 15, 2002, as long as such installments are paid by January 15, 2002.
(4) In addition the Internal Revenue Service has granted a 120 day
postponement of time to the affected taxpayers to perform the other acts described in
section 301.750BA-1 (c)(1) of the regulations. The postponement applies to acts
required to be performed within the period beginning on September 11, 2001, and
ending on November 30,2001.
(5) Taxpayers who have difficulty in meeting their federal tax obligations
because of disruption in the transportation and delivery of documents by mail or private
delivery services resulting from the terrorist attack, and who do not otherwise qualify for
relief as described above, will have until November 15, 2001 , to file returns and make
payments required to be made from September 11,2001, through October 31,2001.
(6) As a result of the terrorist attack, taxpayers may have difficulty in making
timely federal tax deposits in accordance with section 6302 and the regulations
thereunder. The time for making federal tax deposits, however, cannot be extended
under section 60B1 or postponed under section 7508A. For deposits required to be
made from September 11,2001, through October 31,2001, however, the Internal
Revenue Service will waive the addition to tax under section 6656 for the failure to
timely make any deposit of tax if the deposit is made on or before November 15, 2001,
because reasonable cause for the failure exists during this period. The relief from the
failure to timely deposit addition to tax under this paragraph is only applicable to
taxpayers who are unable to meet their deposit obligations because their (or their
service provider's) records, computers, or other essential supporting services were
damaged, or essential personnel were injured, by the attack.
DRAFTING INFORMATION
The principal author of this notice is Charles Hall of the Office of Associate Chief
Counsel, Procedure and Administration (Administrative Provisions and Judicial Practice
Division). For further information regarding this notice you may call (202) 622-4940 (not a
toll-free call).
D E P :\ R T :\1 E :\ T
() F
T II E
T REA SUR Y
NEWS
ornCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE. N.W. - WASIDNGTON. D.C. - 20220 - (202) 622-2960
For Immediate Release
September 13,2001
Contact: Tara Bradshaw
(202) 622-2014
WEEK NINE:
TREASURY TO MAIL OUT 8.609 MILLION CHECKS
ON FRIDAY
Tomorrow the Treasury Department will send out 8.609 million advance payment checks to
taxpayers for more than $3.662 billion in tax relief. These checks will be sent to taxpayers whose
last two digits of their Social Security numbers are 80-89
Week Nine (September 13) Social Security Numbers 80-89
Number of Checks 8.609 million
Amount of Relief $3.662 billion
Week Eight (September 7) Social Security Numbers 70-79
Number of Checks 8.387 million
Amount of Relief $3.559 billion
Week Seven (August 31) Social Security Numbers 60-69
Number of Checks 8.314 million
Amount of Relief $3.527 billion
Week Six (August 24) Social Security Numbers 50-59
Number of Checks 8.266 million
Amount of Relief $3.550 billion
Week Five (August 17) Social Security Numbers 40-49
Number of Checks 8.219 million
Amount of Relief $3.483 billion
Week Four (August 10) Social Security Numbers 30-39
Number of Checks 8.210 million
Amount of Relief $3.467 billion
Week Three (August 3) Social Security Numbers 20-29
Number of Checks 8.185 million
Amount of Relief $3.468 billion
PO-611
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
Week Two (July 27) Social Security Numbers 10-19
Number of Checks 8.133 million
Amount of Relief $3.443 billion
Week One (July 20) Social Security Numbers 00-09
Number of Checks 7.908 million
Amount of Relief $3.336 billion
Nine Week Total
Number of Checks 74.231 million
Amount of Relief $31.495 billion
The Treasury Department will announce every week the number of checks that are being mailed
out for that week, and the amount of tax relief that is being sent to taxpayers. Checks will be
mailed over a ten-week period, according to the last two digits of the taxpayers Social Security
number. Notices from the Internal Revenue Service will infonn taxpayers the amount of their
check and when they should expect it have been mailed. Single taxpayers will get a check up to
$300, head of household up to $500 and married couples filing jointly will get up to $600.
Because the Social Security number determines when checks are mailed, taxpayers may
receive their checks at different times than their neighbors or other family members. On a
joint return, the first number listed will set the mailout time.
If the last two digits of your
Social Security number are:
00-09
10 -19
20 - 29
30 - 39
40-49
50 - 59
60- 69
70 -79
80 - 89
90 - 99
You should receive your check
the week of:
July 23
July 30
August 6
August 13
August 20
August 27
September 3
September 10
September 17
September 24
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o
EPA R T 1\1 E N T
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THE
T REA SUR Y
NEWS
OFnCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIllNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
September 13, 2001
Contact: Peter Hollenbach
(202) 691-3502
TREASURY WAIVES PENALTIES FOR STATE AND LOCAL GOVERNMENT
SECURITIES CUSTOMERS
Treasury announced today that it is waiving late payment assessments and
administrative penalties for State and Local Government Series (SLGS) securities
customers who are unable to settle as a result of the disruptions caused by the attack on
New York. The waiver applies to subscriptions received prior to September 12,2001.
Treasury will waive the late payment assessments, which include an amount equal
to the interest that would have accrued from the requested issue date to the date of actual
settlement plus a $100 fee per subscription for those customers who are unable to settle
timely as a result of the disruptions in the financial district in New York. Affected
customers should contact the Public Debt's Division of Special Investments at 304-4805299. Treasury will also waive the administrative penalty, which is a 6-month
suspension of eligibility to purchase SLGS.
The State and Local Government Series are non-marketable Treasury securities
made available to State and local government entities to help them comply with IRS
arbitrage rebate requirements.
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PO-612
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o
EPA R T \1 E N T
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NEWS
lREASURY
OFnCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C•• 20220 • (202) 622-2960
Contact: Public Affairs
(202) 622-2960
FOR IMMEDIATE RELEASE
September 14, 2001
Under Secretary for Enforcement Jimmy Gurule
Under Secretary for Enforcement Jimmy Gurule will make a statement to the media at
3:00 p.m. this afternoon to update the media on the current status of the Department of
the Treasury Enforcement Operations. He will be joined by officials from the U.S.
Secret Service, the Bureau of Alcohol, Tobacco and Firearms, the U.S. Customs
Service and the Criminal Investigations Division of the Internal Revenue Service.
Under Secretary for Enforcement Jimmy GuruU:
Friday, September 14, 2001
3 :00 p.m. EDT
Treasury Department, Diplomatic Reception Room
1500 Pennsylvania Ave. NW
Washington, DC
Note:
Only members of the media holding Treasury or White House security passes will
be admitted.
-30PO-613
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
-
-
o EPA R T wI E N T 0 F
THE
T REA SUR Y
-
'IREASURY
,
- '
NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLYANIAAVENUE, N.W. - WASHINGTON, D.C. ~ 20220 • (202) 622.2960
FOR IMMEDIATE RELEASE
September 14, 2001
Contact: Public Affairs
(202) 622-2960
STATEMENT OF UNDERSECRETARY OF ENFORCEMENT JIMMY GURULE
Thank you all for coming today. I am joined here to day by Brad Buckles, Director of
ATF; Chuck Winwood, Acting Commissioner of Customs; Mark Matthews, Director ofIRS-CI;
and Larry Cockell, Deputy Director of the Secret Service.
I thought this would be a good opportunity to give the American people an update on the
role being played by the Treasury law enforcement bureaus with respect to Tuesday's terrible
tragedy. As many of you know, in addition to Treasury's involvement in the financial world, we
also oversee 25% of all federal law enforcement officers operating through four primary law
enforcement bureaus: ATF - the Bureau of Alcohol, Tobacco and Fireanns; the US Customs
Service; the Criminal Investigations Unit of the IRS; and the US Secret Service.
Treasury has always been proud of our law enforcement bureaus and the excellent job
that they do in each of their respective fields. I am pleased to report that they have continued to
perform at the highest levels of competence and professionalism in light of the horrific
circumstances of the past few days.
I lmow that Tuesday's attack has had a personal impact on Americans all over the globe
and that is certainly true here at the Treasury Department. ATF, Customs, IRS CI and the Secret
Service all had facilities at the W orId Trade Towers that were completely destroyed by
Tuesday's terrorist actions. Our facilities are secondary however to the safety of Treasury
personnel. The Treasury Department law enforcement bureaus had approximately 1200 people
housed in the World Trade Center complex. We are comforted by the fact that we have been able
to safely account for most of these 1200 people although we are still diligently searching for a
few remaining members of our team.
In addition to our more traditional law enforcement role, Treasury is committed to
fighting terrorism with every asset that we have available, I am pleased to announ~e that .,
Treasury has established an inter-agency team dedicated to the disruption ofterronst fun~aIslllg.
The team is designed to increase our ability to identifY foreign terro~st groups, assess theIr
sources and methods of fundraising, and provide information that WIll I?ake clear to lav:
enforcement officials how terrorist funds are moved. This team will ultImately be tran~tormed
into a perIIlanent Foreign Terrorist Asset Tracking Center in the Treasury ~epartment s Office of
F . .Asset Control (OFAC). This is an extraordinary effort that really Illustrates the
'"
.
'
orelgn
TreasurY pepartment s creatIVIty ill developing new ways to combat terronsts.
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
,
D EPA R T lVI E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBUC AFFAIRS .1500 PENNSYLVANIAAVENUE, N.W. • WASHINGTON, D.C•• 20220 • (202) 622·2960
CONTACT: BETSY HOLAHAN
202-622-1997
FOR IMMEDIATE RELEASE
September 14,2001
CORRECTED VERSION:
Treasury Announces Modification to Policy
on Net Long Position Reporting Requirement
WASHINGON, DC -- The net long position reporting requirement in Treasury auctions
requires auction participants to report their net long position as described in Treasury's
Uniform Offering Circular (31 CFR Part 356).
For auction participants that have difficulty calculating their net long positions as a result
of the tragedy on September 11, Treasury will accept best faith estimates of net long
positions in the 13-week bill and 26-week bill auctions on Monday.
-30-
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622·2040
D E P \ R T \1 E 1\ T
() F
THE
T REA S II R Y
NEWS
omCE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
SEPTEMBER 14, 2001
CONTACT: BETSY HOLAHAN
202-622-1997
TREASURY SECRETARY PAUL O'NEILL PRAISES REGULATORS' ACTIONS
FOLLOWING DISASTER
WASHINGTON, DC -- U.S. Treasury Secretary Paul H. O'Neill today lauded a series of steps
financial regulators have Wldertaken to ensure the efficient operation of U.S. fmancial markets in
the wake of Tuesday's terrorist attack on Manhattan's financial district.
"The regulatory community has responded swiftly and prudently in providing relief for financial
market participants affected by Tuesday's disaster," said O'Neill. Regulators continue to closely
monitor the situation and will continue to provide relief measures they deem appropriate."
Actions taken to date include:
Customer Relief: The Federal Reserve Board (FRB), the Office of the Comptroller of the
Currency (OCC), the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance
Corporation (FDIC) have issued guidance to their regulated institutions requesting that they
undertake prudent efforts to work with customers impacted by Tuesday's events, or by resulting
delays in mail delivery. These efforts include waiving late payment fees, extending loan terms,
restructuring debt obligations, and easing credit terms where a customer has a demonstrable need
resulting from the events of September 11.
Safety and Soundness: The FRB, OCC, OTS, and FDIC have also issued joint interagency
guidance urging their regulated institutions to contact them if the events of September 11 have
created temporary balance sheet growth through, for example, unusual draws on existing lines of
credit by corporate borrowers. Such growth can cause a temporary decline in regulatory capital
ratios.
Equity Markets: The Securities Exchange Commission has undertaken a number of regulatory
relief measures in preparation for Monday's re-opening of the stock markets. These include
providing relief under Rule 1Ob-I8 which provides a safe harbor from liability for manipUlation
in connection with purchases by an issuer of its own stock. The relief will give issuers greater
latitude to provide buy side liquidity when the markets reopen on Monday. The SEC has also
announced revisions to Rule 16b to facilitate certain purchases by persons subject to that rule
during trading next week.
PO-616
For press releases, speeches, public schedules and official biographies, call our 24..Jtour fax line at (202) 622-2040
Futures Markets: The Commodity Futures Trading Commission (CFTC) has worked
closely with the SEC and bank regulators to address intermarket coordination issues and
facilitate an orderly re-opening of equity futures markets when the primary stock markets reopen. Trading in non-equity-based contracts has already resumed on the Chicago and other
midwestern futures exchanges. The CFTC continues to be in close communication with the New
York futures exchanges to support their efforts toward safe, orderly resumption of trading in
contracts based on energy products, metals, agricultural, and other commodities.
Information on these initiatives and other issuances related to the events of September 11 have
been posted on the financial regulatory agencies' websites and are linked below. Also linked
below are the Treasury Department's own recent releases related to September 11.
Links to Issuances by Financial Regulatory Agencies
Office of the Comptroller of the Currency
September 14, 2001 press release on interagency statement concerning possible temporary
balance sheet growth:
htt,p:I/www.occ.treas.gov/ftp/release/2001-82.txt
September 14,2001 joint interagency statement on possible temporary balance sheet growth:
htt.p://www.occ.treas.gov/fip/release/2001-82a.txt
September 12, 2001 press release encouraging national banks to work with customers affected by
terrorist attacks:
http://www .occ.treas. gov/fip/release/200 1-79. txt
August 3, 1998 bulletin.to chief executive officers of national banks encouraging national banks
to work with communities affected by man-made or natural disasters:
htt,p:llwww.occ.treas.gov/ftplbulletinl98-34.txt
September 11,2001 press release concerning the Comptroller's proclamation allowing national
bank: offices affected by the emergency situation to close at their discretion:
htl]://www .occ~ treas. gov/ftp/release/2001-78.txt
September 11, 2001 proclamation:
2
http://www .occ. treas. gOYIftp/release/2001-78a.pdf
Office of Thrift Supervision
September 14, 2001 joint interagency statement on possible temporary balance sheet growth:
http://www.ots.treas.gov/docsl77162.html
September 12, 2001 press release concerning guidance to thrifts on assisting customers affected
by the terrorist attacks:
http://www.ots.treas.gov/docsl77160.html
September 12,2001 memorandum to chief executive officers ofOTS-supervised institutions
concerning guidance on assisting customers:
http://www.ots.treas.gov/docs/25146.pdf
Federal Deposit Insurance Corporation
September 14,2001 joint interagency statement on possible temporary balance sheet growth:
htt,p:llwww. fdic. gOYInews/news/press/200 1Ipr660 1.html
September 13,2001 memorandum to chief executive officers of FDIC-supervised institutions
concerning supervisory guidance issues to examiners relating to the terrorist attacks:
http://www.fdic.gov/news/news/financiall2001/fil0177.html
September 13,2001 guidance to examiners on supervisory flexibility due to the attacks:
http://www.fdic.govInews/news/financial/200 limo 177a.html
September 12,2001 press release on the status of FDIC and its employees:
http://www .fdic. gov/newslnews/press/200 1/pr650 l.html
September 11,2001 press release stating that the deposit insurance system is functioning in full
force:
http://www .fdic.gov/news/news/pressI200 IIpr640 1.html
3
Federal Reserve Board
September 14, 2001 press release on the agreement between the Federal Reserve and the Bank of
England on a temporary swap facility to facilitate the functioning of the financial markets:
http://www.federalreserve.gov/boarddocs/press/generaV2001/200109144/default.htm
September 14, 2001 press release encouraging state member banks and bank holding companies
to work with customers affected by the attacks:
http://www.federaireserve.gov/boarddocs/press/general/2001/200109142/default.htm
September 14,2001 joint interagency statement on possible temporary balance sheet growth:
http://www.federalreserve.govJboarddocs/press/general/Z001l200109143fdefault.htm
September 14,2001 press release on the agreement between the Federal Reserve and the Bank of
Canada to temporarily augment their existing swap facility to facilitate the functioning of the
financial markets:
http://www.federalreservc.govlboarddocs/press/general/2001120010914/default.htm
September 13,2001 press release on the agreement between the Federal Reserve and the
European Central Bank on a swap arrangement to facilitate the functioning of the financial
markets:
http://www.federalreserve.gov/boarddocs/press/general/200l/20010913/default.htm
September 11, 2001 press release stating that the Federal Reserve System is open and operating,
and the discount window is available to meet liquidity needs.
http://www.federalreserve.govlboarddocs/press/genera1!2001/20010911/default.htm
National Credit Union Administration
September 12, 2001 press release stating that the NeUA has activated its disaster relief policy to
assist credit unions and their members in New Yark City and Arlington, V A:
http://www .neua. gov/news/press releases/pr09120 1.html
September 11,2001 statement by NCUA Acting Chairman Dennis Dollar:
http://www.neua.gov/news/pressreleases/m09IlOl.htm 1
4
Securities and Exchange Commission
September 11, 2001 statement by SEC Chainnan Pitt:
http://www.sec.gov/newsipressJ2001-90.txt
September 12 release on WbI8 and 16b relief:
htt,p://www.sec.gov/news/press/2001-.91.txt
Commodity Futur~s Trading Commission
September 12,2001 press release on the closing of the securities and futures markets:
http://www.cftc.gov/opa/pressOllopa4567-01.htm
Links to Other Treasury and IRS Issuances
September 14,2001 Press Release Announcing that Treasury Waives Penalties for State and
Local QQvemment Securities Customers:
http://www.treas.gov/press/releasesJpo612.htm
September 14 New IRS Publication About Providing Assistance for Disaster Relief Through
Charitable Organizations:
http://www.irs.gov/newslcharity.html
September 13, 2001 Treasury and IRS Press Release Announcing Disaster Relief for Taxpayers
Affected by the September 11 Terrorist Attack:
http://www.treas.gov/press/releases/po610.htm
http://www.irs.govJnews/ir-01-81.pdf
September 13, 2001 Notice on Disaster relief for taxpayers affected by the September 11, 2001
Terrorist Attack:
http://www.treas.gov/pressJreleases/notice.htm
http://www.irs. gov/newSln-O I-61.pdf
5
DEPARTMENT
TREASURY
OF
THE
TREASURY
NEWS
OFFICE OF PUBLIC AF}'AIRS .1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622·2960
EMBARGOED UNTIL 11:30 A.M.
September 17, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $12,000 million
to refund an estimated $13,000 million of publicly held 4-week Treasury bills
maturing September 20, 2001, and to pay down approximately $1,000 million.
Tenders for 4-week Treasury bills to be held on the book-entry records of
TreasuryDirect will not be accepted.
The Federal Reserve System holds $10,575 million of the Treasury bills
maturing on September 20, 2001, in the System Open Market Account (SOMA). This
amount may be refunded at the highest discount rate of accepted competitive
tenders in this auction up to the balance of the amount not awarded in today's
I3-week and 26-week Treasury bill auctions. Amounts awarded to SOMA 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 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 allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP), if they meet or exceed the reporting
threshold. However, Treasury will not include NLPs in the calculation of award
limits for those bidders. For auction participants that have difficulty
calculating their net long positions as a result of the tragedy on September
11, Treasury will accept best faith estimates of net long positions.
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 (3~ CFR Part 356, as
amended) •
Details about the new security are given in the attached offering
highlights.
PO-617
000
Attachment
For press releases, speeches. puhlic schedules and official biographies, call our 24-hour fax line at (202) 622-]040
HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED SEPTEMBER 20, 2001
September 17, 2001
Offering Amount
Public Offering
$12,000 million
$12,000 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 ...
28-day bill
912795 HS 3
September 18, 2001
September 20, 2001
October 18, 2001
April 19, 2001
$32,375 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 three decimals in
increments of .005%, e.g., 4.215%.
(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 daylight saving time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms: By charge to a funds account at a Federal Reserve Bank
on issue date.
PUBLIC DEBT NEWS
~epartment of the Treasury • Bureau of the Public Debt • Washington, DC
FOR IMMEDIATE RELEASE
September 18,2001
20239
Contact: Office of Financing
202-691-3550
TREASURY'S INFLATION-INDEXED SECURITIES
OCTOBER 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 October for the following Treasury inflation-indexed securities:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
3-3/8% lO-yearnotes 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 IS, 2028
3-7/8% lO-year notes due January 15,2009
3-7/8% 30-year bonds due April 15, 2029
4-1/4% lO-yearnotes due January 15,2010
3-112% lO-yearnotes 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-V) 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 618. The information is also available
on the Internet at Public Debt's website (htlp://www.publicdebt.treas.gov).
The information for November is expected to be released on October 19,2001.
000
Attachment
PA-517
PO-6l8
http://www .publicdebt.treas.gov
TREASURY INFLATION·INDEXED SECURITIES
Ref CPI and Index Ratios for
October 2001
Security;
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date{s):
3·318% i0-Year Notes
Series A·2007
9128272M3
January 15, 1997
February 6, 1997
April 15, 1997
3-5/8%
S-Vear Notes
Series J·2002
9128273A8
July 15, 1997
July 15, 1997
October 15,1997
3·518% 10·Year Notes
Series A-2008
9128273T7
January 15, 1998
January 15, 1998
October 15,1998
3·518% 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
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
1
2
3
4
5
6
7
a
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:
RefCPI
Index Ratio
Index Ratio
Index Ratio
Index Ratio
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.12033
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.1083(}
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.10830
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09870
1.09744
1.09744
1.09744
1.09744
June 2001
178.0
July 2001
177.5
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
1.09744
August 2001
I
I
177.5
TREASURY INFLATION-INDEXED SECURITIES
Ref CPI and Index Ratios for
October 2001
Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date;
Additional Issue Date(s):
3-718% 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
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
1
2
3
4
5
S
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:
3-718% 3D-Year Bonds
Bonds of April 2029
912810FH6
April 15, 1999
April 15, 1999
October 15, 1999
October 15, 2000
April 15, 2029
164.39333
4-114% 10-Year Notes
Series A-2010
9128275W8
January 15, 2000
January 18, 2000
July 15, 2000
3-1/2"10 10-Year Notes
January 15, 2010
168.24516
January 15,2011
174.04516
Series A-20 11
9128l76R8
January 15, 2001
January 16, 2001
July 16, 2001
Ref CPI
Index Ratio
Index Ratio
Index Ratio
Index Ratio
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177.50000
177:50000
117.50000
117.50000
177.50000
117.50000
117.50000
177.50000
177.50000
177.50000
177.50000
117.50000
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.06232
1.08232
1.08232
1.08232
1.08232
1.08232
1.08232
1.06232
1.06232
1.08232
1.08232
1.08232
1.08232
1.08232
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.07973
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.05501
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01965
1.01965
1.01985
1.01985
1.01985
1.01965
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
1.01985
June 2001
176.0
July 2001
177.5
August 2001
177.5
·
.
DEPARTMENT
OF
THE
TREASURY
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N. W •• WASHINGTON, D.C.- 20220. (202) 622.2960
CONTACT:
FOR IMMEDIATE RELEASE
September 17, 2001
Office of Financing
202/691-3550
TREASURY CANCELS SEPTEMBER BUYBACK OPERATIONS
The Treasury has announced the cancellation of the buyback operations scheduled for
September 20 and September 27,2001. The Treasury intends to resume its regularly scheduled
buyback operations next month, with buybacks scheduled for October 18 and October 25, 2001.
000
PO-619
For press releases, speeches, public schedules and official biographies, call our 24-hour fax 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
September 17; 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF I3-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
91-Day Bill
September 20, 2001
December 20, 2001
912795HYO
2.560%
Investment Rate 1/:
Price:
2.612%
99.353
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
Allotted 77.05%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FlMA (noncompetitive)
$
30,849,216
1,336,935
$
14,000,051 2/
32,356,151
4,321,476
4,321,476
Federal Reserve
$
36,677,627
12,493,116
1,336,935
170,000
170,000
SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
$
18,321,527
Median rate
2.550%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
2.200%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 32,356,151 I 14,000,051
=
2.31
/ Equivalent coupon-issue yield.
/ Awards to TREASURY DIRECT ~ $1,152,292,000
http://www.publicdebt.treas.gov
0-620
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESu~TS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
september 17, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
COSIP Number:
High Rate:
182-Day Bill
September 20, 2001
March 21, 2002
912795JL6
2.570%
Investment Rate 1/:
2.639%
Price:
98.701
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
Allotted 95.12%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
Tendered
$
SUBTOTAL
$
4,523,236
4,523,236
$
30,792,289
10,884,905
1,015,267
100,000
12,000,172 2/
26,269,053
Federal Reserve
TOTAL
25,153,786
1,015,267
100,000
Accepted
$
16,523,408
Median rate
2.560%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
2.400%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 26,269,053 / 12,000,172
=
2.19
/ Equivalent coupon-issue yield.
I Awards to TREASURY DIRECT = $860,410,000
1-621
http://www.publicdebttreas.gov
DEPARTMENT
OF
THE
TREASURY
NEWS
lREASURY
omCE OF PUBUC AFFAIRS -1500PENNSYLVANIAAVENUE, N.W. -WASHINGTON, D.C. - 20220 - (202)622-2960
Contact Tasia Scolinos
(202) 622-2960
SEPTEMBER 18, 2001
MEDIA ADVISORY
Under Secretary of the Treasury Jimmy Gurule will have as press briefing today at
4:00 p.m. in the Treasury Department's Diplomatic Reception (Room 3311),
1500 Pennsylvania Ave. NW .
Under Secretary Gurule will discuss actions taken by Treasury's Foreign Terrorist
Asset Tracking Center.
Media without Treasury or White House press credentials plamring to attend
should contact Treasury's Office of Public Affairs at 202-622-2960, by 2:00 p.m. today
Tuesday, September 18, 2001, with the following infonnation: name, social security
number and date of birth. This information may also be faxed to 202-622-1999.
-30-
PO-622
For press releas;s, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-204.0
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
September 18, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
28-Day Bill
September 20, 2001
October 18, 2001
912795HS3
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
2.250%
Investment Rate 1/:
2.285%
Price:
99.825
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were.
allotted 84.18%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
Tendered
$
Accepted
22,272,190
24,578
$
11,975,645
24,578
o
o
SUBTOTAL
22,296,768
12,000,223
Federal Reserve
1,730,285
1,730,285
TOTAL
$
24,027,053
$
13,730,508
Median rate
2.050%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.900%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio: 22,296,768 I 12,000,223 : 1.86
1/ Equivalent coupon-issue yield.
http://www.publicdebttreas.gov
PO-623
D 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. • WASIUNGTON. D.C•• 20220 • (202) 622·2960
FOR IMMEDIATE RELEASE
Contact: Tasia Scolinos
September 18, 2001
(202) 622-2960
Treasury Under Secretary Jimmy Gurule
FTATUpdate
Thank you for coming today. I'd like to update you on recent activities of the Treasury
Enforcement bureaus. Let me be very clear. The Treasury Department is using every
tool that we have at our disposal to attack terrorism.
As many of you are aware, last week the Treasury Department announced that the
Foreign Terrorist Asset Tracking Center (FTAT) is now up and running. FTAT will be
an important tool in our quest to dismantle the terrorist's financial bases and shut down
their fundraising capabilities. FTAT differs from traditional law enforcement's use of
financial tracking in two critical aspects.
First, the FBI and other law enforcement entities look at financial data as it relates to a
specific case - in this instance last Tuesday's horrific attacks.
By contrast, FTAT will be looking at all terrorist organizations world-wide who have
been involved with several different terrorist attacks - we seek to create a "big picture"
profile of the financial infrastructure of terrorist groups.
Second, we are collecting this information for the express purpose of identifying and
disrupting the various sources of funding that these terrorist groups are receiving.
PO-624
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
We will be utilizing several different tools to do this. FinCEN, the Financial Crimes
Enforcement Network, will be a key player with respect to tracking down any financial
link between terrorist groups and legitimate financial institutions. FinCEN collects data
under the Bank Secrecy Act and can cross-reference the names of terrorists and terrorist
organizations with Suspicious Activity Reports in that database.
Today I am pleased to report that FTAT has begun to create financial profiles of some of
those suspected of involvement in Tuesday's attacks.
We will explore the financial relationships that may exist between them and other
terrorist entities. We are optimistic that this strategic approach to identifying terrorism's
funding sources will expand to include substantial international cooperation.
-30-
D F: PAR T 1\1 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
Contact: Tasia Seolinos
(202) 622-2950
Treasury Releases 2001 Money Launderine Strate2v
The Administration's 2001 Money Laundering Strategy is now available on the Treasury
Department web site at www.treas.gov/press/releases/Olreport.htm.
-30-
PO-625
Fur press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622·2040
OFFICE OF PUBLIC AFFAIRS '1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C., 20220. (202) 622·2960
EMBARGOED UNTIL 11: 30 A.M.
September 19, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY TO AUCTION $17,000 MILLION OF 2-YEAR NOTES
The Treasury will auction $17,000 million of 2-year notes to refund $27,178
million of publicly held notes maturing September 30, 2001, and to pay down about
$10,178 million.
In addition to the public holdings, Federal Reserve Banks hold $6,139 million
of the maturing notes for their own accounts, which may be refunded by issuing
an additional amount of the new security.
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.
TreasuryDirect customers requested that we reinvest their maturing holdings
of approximately $662 million into the 2-year note.
The auction will be conducted
tive and noncompetitive awards will
tenders.
The allocation percentage
be rounded up to the next hundredth
in the single-price auction format.
All competibe at the highest yield of accepted competitive
applied to bids awarded at the highest yield will
of a whole percentage point, e.g., 17.13%.
The notes 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 BookEntry 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-6Z6
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
OFFICE OF PUBLIC AFFAIRS '1500 PENNSYLVANIA AVENUE, N.W.' WASHINGTON, D.C.' 20220, (202) 622-2960
EMBARGOED UNTIL 11: 30 A.M.
September 19, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY TO AUCTION $17,000 MILLION OF 2-YEAR NOTES
The Treasury will auction $17,000 million of 2-year notes to refund $27,178
million of publicly held notes maturing September 30, 2001, and to pay down about
$10,178 million.
In addition to the public holdings, Federal Reserve Banks hold $6,139 million
of the maturing notes for their own accounts, which may be refunded by issuing
an additional amount of the new security.
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.
TreasuryDirect customers requested that we reinvest their maturing holdings
of approximately $662 million into the 2-year note.
The auction will be conducted
tive and noncompetitive awards will
tenders.
The allocation percentage
be rounded up to the next hundredth
in the single-price auction format. All competibe at the highest yield of accepted competitive
applied to bids awarded at the highest yield will
of a whole percentage point, e.g., 17.13%.
The notes 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 BookEntry 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-626
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERING TO THE PUBLIC OF
2-YEAR NOTES TO BE ISSUED OCTOBER 1, 2001
September 19, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17,000 million
Public Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . · .. $17,000 million
Description of Offering:
Term and type of security . . . . . . . . . . . . . . . . . . . . .
Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Auction date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dated date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturi ty date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2-year notes
U-2003
912827 7D 8
September 26, 2001
October 1, 2001
September 30, 2001
September 30, 2003
Determined based on the highest
accepted competitive bid
Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
Interest payment dates . . . . . . . . . . . . . . . . . . . . . . . . March 31 and September 30
Minimum bid amount and multiples . . . . . . . . . . . . . . $1,000
Accrued interest payable by investor .......... Determined at auction
Premium or discount . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
STRIPS Information:
amount required . . . . . . . . . . . . . . . . . . . . . . . $1,000
Corpus CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . 912820 GN 1
Due date(s) and CUSIP number(s)
for additional TINT(s) . . . . . . . . . . . . . . . . . . . . . . September 30, 2003 - - 912833 YC 8
~nimum
Submission of Bids:
Noncompetitive bids:
Accepted in full up to $5 million at the highest accepted yield.
Foreign and International Monetary Authority (FIMA) 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 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 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 $2 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the
closing time for receipt of competitive tenders.
Maximum Recognized Bid at a Single yield ........... 35% of public offering
Maximum Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% of public offering
Rece~pt of Tenders:
Noncompetitive tenders:
Prior to 12:00 noon eastern daylight saving time on auction day.
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day.
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date,
or payment of full par amount with tender.
TreasuryDirect customers can use the Pay
D~rect feature which authorizes a charge to their account of record at their
financial institution on issue date.
. "-'<~'D<- EPA
-It T.M -R N, T
0 F'" T If
E' .T;It E A$ 'u i~ y
-::'
F
:
.'.
.
.
-
•
-
-
•
,
., _
~
....:..
-
,-:
_
,
-
'.
, ' .
-
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIAAVENUE. N.W.• WASHINGTON, D.C.• 20220. (202) 622-2960
Embargoed until 10:00 a.m.
September 20, 2001
Contact: Michele Davis
(202) 622-2960.
THE U.S. FINANCIAL SYSTEM IN THE WAKE
OF THE ATTACK ON THE WORLD TRADE CENTER
TESTIMONY OF PAUL O'NEILL
SECRETARY OF THE TREASURY
BEFORE THE
:OMlVIITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
UNITED STATES SENATE
Mr. Chairman, Senator Gramm, and Members of the Committee, I am grateful for this
opportunity to appear before you today to discuss the effects of the recent terrorist attacks on our
nation's financial system and our economy.
I traveled to New York City on 1vlonday, for the opening of the New York Stock
Exchange. What I saw was a testament to America's determination and ingenuity.
The people who live and work in lower Manhattan took a horrible blow last week. And
yet, amid the rubble ofbroken buildings and the sorrow oflost friends and colleagues, the New
York Stock Exchange not only opened and ran smoothly, but handled a record number of
transactions on Monday. I can think of no better testament to the resiliency of America and her
economy. Among the countless heroes of the past week are the workers in New York's financial
district - from the brokers and traders to the police and firemen to the phone and water utility
workers. In the face of enormous personal and human losses, these professionals worked around
the clock to put our nation's financial center back into operation. I am grateful for their efforts
and for the cooperation with which they have worked with the Treasury Department and the
federal financial regulatory agencies.
As noted by observers from Alexis de Tocqueville forward, the United States is a nation
of commerce. While horrifying it is perhaps not surprising that unseen enemies seeking to strike
at America's very heart would choose to attack her most visible financial center. It was surely
their hope and intention that the economic engine ofthe world would be paralyzed as a result.
We denied the terrorists any such victory. Our economy - our prosperity -- will not be
destroyed.
PO-627
Fur press releases We.£J:he~. bub lie schedules and official biographies, call our 24-haur fax line at (202) 622-2040
__
The economy of the United States remains strong and resilient. And the nation's
financial markets, in spite of having sustained a terrible blow, continue to function. Shares are
being bought and sold on the stock markets, firms are able to borrow funds for continued
operation in the nation's debt markets. Of course this is not to say that the events of September
11 th have had no impact on our financial community. But thanks to careful planning and
preparation for potential disaster, and swift action by both the private and public sectors, the
United States' financial system is operating with only temporary disruption.
Private Sector Response
Private financial institutions and firms have long planned for the possibility of disruption
to the flow of information'and damage to their operational facilities by implementing'programs
of redundancy. Records, as required by both prudent business practice and by law, are routinely
duplicated and stored off site. Contingency plans enabled firms to restart their operations
quickly from alternate locations. We know from conversations with company representatives
and press reports that fIrms whose facilities were totally destroyed and who tragically lost many
key staff in the destruction of the World Trade Center were back in operation within days
making certain that the country's financial markets continued to function.
Federal Regulatory Response
Federal regulatory agencies have also been swift to act. They have taken a number of
steps to ensure the continued functioning of the nation's financial markets, including measures to
assist customers of fiIl:anciaI institutions, ensure market liquidity, and stabilize securities and
futures markets.
Customer Relief The Federal Reserve Board (FRB)~ the OffIce of the Comptroller of the
Currency (OCC), the Office of Thrift Supervision (OTS), the Federal Deposit Insurance
Corporation (FDIC) and the National Credit Union Administration (NeUA) have issued
guid~ce to their regulated institutions requesting that they undertake prudent efforts to work
with customers affected by Tuesday's attacks, or by resulting delays in mail delivery. These
efforts include waiving late payment fees, extending loan terms, restructuring debt obligations,
and easing credit tenns where a customer has a demonstrable need resulting from the events of
September 11.
Market Liquidity. To preserve market liquidity, the banking industry has provided
hundreds of billions of dollars in liquidity to their customers, including credit extended under
standby letters of credit and credit commitments. As a result, banks' balance sheets have grown
as these new loans have been made. In tum, fInancial regulators have facilitated market liquidity
in two important ways. First, the Federal Reserve has met the demand for liquidity by banks
through unprecedented credit extension involving the discount window, the repurchase market,
and other tools ~vaj.lable to it. Second, the federal banking agencies issued a joint statement to
all banks that recognizes the potential for these actions to inflate banks' balance sheets and hence
erode banks' capital ratios. The statement announces the agencies' desire to work with those
banks for which such credit extension may lead to a temporary decline in capital ratios.
2
Government Securities/Fixed Income Markets. The TreasUry has successfully adjusted
its financing needs in the face of the recent market disruptions. The Treasury and other
regulatory agencies worked closely with the Bond Market Association (BMA) to re-establish an
active and orderly fixed income market. Following a recommendation by the BMA to close the
market on Wednesday, September 12th, trading resumed in all fixed income markets on
Thursday, September 13th. Further, Treasury was able to execute a successful auction of 3 and 6
month Treasury bills on Monday, September 17th, with 24 of the 25 primary dealers
participating.
Equity Markets. The Securities and Exchange Commission (SEC) undertook a number of
regulatory relief measures in preparatio~ for Monday's re-openmg of the stock markets. These
included providing relief under Rule IOb-18 which provides a safe harbor from liability for
manipulation in connection with purchases by an issuer of its own stock. The relief gives issuers
greater latitude to provide buy side liquidity this week. The SEC also announced limited relief
under Section16(b) to facilitate purchases this week by persons subject to that statute.
Futures Markets. The Commodity Futures Trading Commission (CFTC) worked closely
with the SEC and bank regulators to address intennarket coordination issues and facilitate an
orderly re-opening of equity futures markets when the primary stock markets re-opened. The
eFTC continues to be in close communication with the New York futur~s exchanges to support
their efforts toward safe, orderly resumption of trading in contracts based on energy products,
metals, agricultural, and other commodities.
Treasury Response
In addition to the steps taken through Treasury's financial regulatory Bureaus, the
Department has also responded to the events of September 11th on the tax and law enforcement
fronts.
IRS Tax Guidance. The IRS and Treasury are providing relief to all taxpayers directly
affected by the terrorist attacks. This relief includes extending the time for filing tax returns and
extending the time for making estimated tax payments. The victims of the airplane crashes (on
the ground and in the air), taxpayers whose workplace or whose records are in a disaster area,
relief workers, and taxpayers in ailS boroughs of New York City and in Arlington County,
Virginia (the location of the Pentagon) are among those who qualify for this relief. In addition,
the IRS and Treasury are providing relief to taxpayers unable to meet tax deposit obligations
because of damage or injury inflicted by the terrorist attack.
Furthermore, for all taxpayers, the IRS has postponed until September 24 the due date for
all federal tax obligations (other than deposits of federal taxes) that otherwise would be due
between September 10 and September 24. This postponement includes, for example, the filing
of returns and the payment of estimated taxes.
Enforcement. Treasury has established an inter-agency team dedicated to the disruption
of terrorist fundraising. The team"is designed to increase our ability to identify foreign terrorist
3
groups, assess their sources and methods of fundraising, and provide information that will make
clear to law enforcement officials how terrorist funds are moved. This team will ultimately be
transformed into a permanent Foreign Terrorist Asset Tracking Center in the Treasury
Department's Office of Foreign Asset Control (OFAC). This is an extraordinary effort that
illustrates the Treasury Department's creativity in developing new ways to combat terrorists.
Economic Impact
The destruction of much of the nation's financial center in Manhattan may cause shortterm problems and uncertainty. And the personal toll has been staggering for the companies and
people in New York's financial district.
We cannot say at this very preliminary stage exactly how these events will affect the
economy. We do not have sound estimates of the dollar amount of damage that occurred in New
York. Yet I would call on the Committee, and indeed all Americans, to be cautious in assessing
forthcoming short-term economic reports. This past week Americans have been making
charitable donations, giving blood, gathering in prayer, and otherwise demonstrating our national
unity and our determination to overcome the threats facing our country. While these activities
may not appear in any economic report, they are a reminder of our humanity and our strength as
a country.
Consider our fmancial system. The markets will inevitably have ups and downs.
Americans should not react with fear that the stock market has declined but rather marvel in that
it is open, that for every seller there is a buyer. Financial finns that suffered devastating losses
are operating, serving customers, clearing transactions, and ensuring that the financial lifeblood
of our economy continues to flow.
On Sunday, the President called us back to work. While the country is back to work, it
still grieves. But in the long term the economy remains sound. Although the financial sector has
been damaged, it continues to function. Moreover, the economy's productive capacity is fully
intact, ready for whatever trials lie ahead.
Indeed, America's dynamic economy is not located in anyone place. Innovation and
productivity are found in every factory and farm, every laboratory, every financial institution,
every small business and every home office across America. That spirit cannot be destroyed.
We at Treasury have been inundated with phone calls from people wanting to know what
they can do to help. Every American can make a contribution by helping to keep our economy
strong -- by getting back to work and going fOIV1ard with the spending plans they made before
September 11. Each and every American should know that by continuing to work and spend,
they are doing their part to restore our nation and our economy in the wake of last week's attack.
We have every reason to m"l-intain our confidence in the U.S. economy. No evil, no
matter how unspeakable, can destroy America's productive spirit. If anything, this evil act
strengthens our resolve to be the most free, most vibrant economy in the world.
4
OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE. N.W.• WASHfNGTON, D.C .• 20220. (202) 622·2960
CONTACT:
EMBARGOED UNTIL 2:30 P.M.
September 20, 2001
Office of Financing
202/691-35'50
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction 13-week and 26-week Treasury bills totaling
$26,000 million to refund an estimated $22,284 million of publicly held 13week and 26-week Treasury bills maturing September 27, 2001, and to raise new
cash of approximately $3,716 million. Also maturing is an estimated $14,000
million of publicly held 4-week Treasury bills, the disposition of which will
be announced September 24, 2001.
The Federal Reserve System holds $11,133 million of the Treasury bills
maturing on September 27, 2001, in the System Open Market Account (SOMA)
This amount may be refunded at the highest discount rate of accepted
competitive tenders either in these auctions or the 4-week Treasury bill
auction to be held September 25, 2001. Amounts awarded to SOMA will be in
addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and InterMonetary 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
lccount and will be accepted in the order of smallest to largest, up to the
lqqregate award limit of $1,000 million.
~ational
TreasuryDirect customers have requested that we reinvest their maturing
\oldings of approximately $960 million into the 13-week bill and $1,068
a.illion into the 26-week bill.
The allocation percentage applied to bids awarded at the highest discount
rate will be ounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
This offering of Treasury securities is governed by the terms and conutions set forth in the Uniform Offering Circular for the Sale and Issue of
~rketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
unended) .
Details about e ch
offering high~ights.
attachment
PO-628
the new securities are given in the attached
000
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 SEPTEMBER 27, 2001
September 20, 2001
Offering Amount
Public Offering
$14,000 million
$14,000 million
$12,000 million
$12,000 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 HZ 7
September 24,2001
September 27,2001
December 27,2001
June 28,2001
$16,902 million
$1,000
182-day bill
912795 JM 4
September 24, 2001
September 27, 2001
March 28, 2002
September 27, 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 daylight saving time on auction day
Competitive tenders ...... Prior to 1:00 p.m. eastern daylight saving 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 Direot feature which authorizes a charge
to their account of record at their financial institution on issue date.
D EPA R T 1\1 E N T
0 F
THE
lREASURY
T REA S If R Y
NEWS
OFFICE OFPUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W•• WASIfiNGTON, D.C•• 20220. (202) 622.2960
For Immediate Release
September 20, 2001
Contact: Tara Bradshaw
(202) 622-2014
WEEK TEN:
TREASURY TO MAIL OUT 8.607 MILLION CHECKS
ON FRIDAY
Tomorrow the Treasury Department will send out 8.607 million advance payment checks to
taxpayers for more than $3.662 billion in tax relief. These checks will be sent to taxpayers whose
last two digits of their Social Security numbers are 90-99.
Week Ten (September 21) Social Security Numbers 90-99
Number of Checks 8.607 million
Amount of Relief $3.662 billion
Week Nine (September 14) Social Security Numbers 80-89
Number of Checks 8.609 million
AmOlUlt of Relief $3.662 billion
Week Eight (September 7) Social Security Numbers 70-79
Number of Checks 8.387 million
Amount of Relief $3.559 billion
Week Seven (August 31) Social Security Numbers 60-69
Number of Checks 8.314 million
Amount of Relief $3.527 billion
Week Six (August 24) Social Security Numbers 50-59
Number of Checks 8.266 million
Amount of Relief $3.550 billion
Week Five (August 17) Social Security Numbers 40-49
Number of Checks 8.219 million
Amount of Relief $3.483 billion
PO-629
Far frYers. releases.. sbeeches, public schedules and official biographies, call our 24~our fax line at (202) 622·2040
.
Week Four (August 10) Social Security Numbers 30-39
Number of Checks 8.210 million
Amount of Relief $3.467 billion
Week Three (August 3) Social Security Numbers 20-29
Number of Checks 8.185 million
Amount of Relief $3.468 billion
Week Two (July 27) Social Security Numbers 10-19
Number of Checks 8.133 million
Amount of Relief $3.443 billion
Week One (July 20) Social Security Numbers 00-09
Number of Checks 7.908 million
Amount of Relief $3.336 billion
Ten Week Total
Number of Checks 82.838 million
Amount of Relief $35.157 billion
Checks have been mailed over a ten-week period, according to the last two digits of the
taxpayers Social Security number. This is the last week that checks will be sent according to that
schedule. Checks will continue to be sent out as extensions or late-filed returns are processed.
-30-
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C .• 20220. (202) 622.2960
EMBARGOED UNTIL 11:30 A.M.
September 24, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $10,000 million
to refund an estimated $14,000 million of publicly held 4-week Treasury bills
maturing September 27, 2001, and to pay down approximately $4,000 million.
Tenders for 4-week Treasury bills to be held on the book-entry records of
Treasu~Direct will not be accepted.
The Federal Reserve System holds $11,133 million of the Treasury bills
maturing on September 27, 2001, in the System Open Market Account (SOMA). This
amount may be refunded at the highest discount rate of accepted competitive
tenders in this auction up to the balance of the amount not awarded in today's
13-week and 26-week Treasury bill auctions. Amounts awarded to SOMA 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 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 allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e • g ., 17. 13 %•
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP), if they meet or exceed the reporting
threshold. However, Treasury will not include NLPs in the calculation of award
limits for those bidders.
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-632
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIllNGTON, D.C•• 20220 - (202) 622.2960
FOR IMMEDIATE RELEASE
September 24,2001
Contact: Tasia Scolinos
(202) 622-2960
Bonner Sworn In as Commissioner of the U.S. Customs Service
Judge Robert Bonner was sworn in today as Commissioner of Customs by
Treasury Secretary Paul O'Neill. The U.S. Senate confirmed him on September 20,
200l.
As Customs Commissioner, Bonner will manage the primary enforcement agency
protecting the Nation's borders.
Judge Bonner is graduate ofthe University of Maryland and Georgetown Law
School. After clerking for a U.S. District Judge, he served for three years on active duty
in the United States Navy, Judge Advocate General's Corp. Following his years in the
military, Judge Bonner spent four and one half years as an Assistant United States
Attorney in Los Angeles before turning to private practice in 1975. In 1984, Judge
Bonner returned to public service as the United States Attorney for the Central District of
California (1984-1989). He was subsequently appointed to the United States District
Court for the Central District of California by former President Bush in 1989 (19891990). Former President Bush went on to appoint him as Administrator of the Drug
Enforcement Agency in 1993 (1990-1993). Most recently, Judge Bonner was a partner in
the Los Angeles office of Gibson, Dunn & Crutcher.
Judge Bonner is also a fellow of the American College of Trial Lawyers and a
past president of the Federal Bar Association, Los Angeles Chapter. He was the
Chairman of California's Commission on Judicial Performance, and is a member of the
California and District of Columbia bars. He is on the Board of Directors of the Los
Angeles Chamber of Commerce, and he recently served as co-chair of California
Lawyers for Bush-Cheney.
Judge Bonner is a native of Wichita, Kansas. He and his wife of thirty-one years,
Kimiko, have one daughter, Justine.
-30PO-631
For press releases, sPeeches, public schedules and official biographies, call our 24-hour fax line at (202) 622·2040
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C .• 20220. (202) 622.2960
EMBARGOED UNTIL 11:30 A.M.
September 24, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $10,000 million
to refund an estimated $14,000 million of publicly held 4-week Treasury bills
maturing September 27, 2001, and to pay down approximately $4,000 million.
Tenders for 4-week Treasury bills to be held on the book-entry records of
Treasu~Direct will not be accepted.
The Federal Reserve System holds $11,133 million of the Treasury bills
maturing on September 27, 2001, in the System Open Market Account (SOMA). This
amount may be refunded at the highest discount rate of accepted competitive
tenders in this auction up to the balance of the amount not awarded in today's
13-week and 26-week Treasury bill auctions. Amounts awarded to SOMA 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 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 allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e • g ., 17. 13 %•
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP), if they meet or exceed the reporting
threshold. However, Treasury will not include NLPs in the calculation of award
limits for those bidders.
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-632
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERING
OF 4-WBBK BILLS TO BB ISSUBD SBPTBMBBR 27, 2001
September 24, 2001
Offering Amount •••••••••••••••••••• $10,000 million
Public Offering •••••••••••••••••••• $10,000 million
Description of Offering:
Term and type of security
...........
2S-day bill
CU'S'IP n\2lDl)er ••••••••••••••••••••••• 912795 BT 1
Auat10n date ...............•....... September 25, 2001
Issue date ........................ . September 27, 2001
Maturity date ........................... .. October 25, 2001
Original issue date •••••••••••••••• April 26, .2001
Currently outstanding ••.•••••••.••• $32,130 million
Kintmum bid amount and multiples
$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 (PXHA) bids: Noncompetitive bids submitted through the Federal Reserve Banks as agents for
FIKA 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
PIKA accounts will not exceed $1,000 Ddllion. 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 ltmit. 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 ltmit.
Competitive hids:
.
(1) MUst be expressed as a discount rate with three decimals in
increments of .005%, e.g., 4.215%.
(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
Maxtmum Award ••••••••••••••••••••••••••••• 35% of public offering
Receipt of Tenders:
Noncompetitive tenders:
Prior to 12:00 noon eastern daylight saving time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms: By charge to a funds accoWlt at a Federal Reserve Bank
on issue date.
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
September 24, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
September 27, 2001
December 27, 2001
912795HZ7
Term:
Issue Date:
Maturity Date:
CUSIP Number:
2.380%
High Rate:
Investment Rate 1/:
2.429%
Price:
99.398
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 33.49%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FlMA (noncompetitive)
$
22,321,2l5
$
14,000,016 2/
24,198,135
4,546,057
4,546,057
Federal Reserve
$
28,744,192
12,123,096
1,405,920
471,000
1,405,920
471,000
SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
$
18,546,073
Median rate
2.310%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
2.280%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
= 24,198,135 / 14,000,016 = l.73
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,097,058,000
PO-633
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
FOR IMMEDIATE RELEASE
September 24, 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
September 27, 2001
March 28, 2002
912795JM4
2.360%
Investment Rate 1/:
2.421%
Price:
98.807
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 60.96%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FlMA (noncompetitive)
Tendered
$
23,095,475
$
1,395,429
476,000
SUBTOTAL
24,966,904
Federal Reserve
4,509,453
TOTAL
Accepted
$
29,476,357
10,128,635
1,395,429
476,000
12,000,064 2/
4,509,453
$
16,509,517
Median rate
2.300%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
2.270%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-cover Ratio = 24,966,904 / 12,000,064 = 2.08
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,136,305,000
0-634
http://www.publicdebt.treas.gov
D EPA R T 1\[ E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIllNGTON, D.C.• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
September 25,2001
Contact: Michele Davis
(202)-622-2920
STATEMENT OF G-7 FINANCE MINISTERS
We held a conference call today to discuss the economic and financial situation in our
countries and our common cause in strengthening the international fight against the financing of
terrorism. For the US economy, we reported that the events of September 11 will delay the
recovery that was underway. However, our economic policies and fundamentals remain strong
and we expect a near-term return to sustained economic growth and stable financial markets.
Since the attacks, we have all shared our national action plans to block the assets of
terrorists and their associates. We will integrate these action plans and pursue a comprehensive
strategy to disrupt terrorist funding around the world. We welcome the actions taken by other
countries in recent days and call on all nations of the world to cooperate in this endeavor. In
particular, we stressed the importance of more vigorously implementing UN sanctions on
terrorist financing and we called on the Financial Action Task Force to encompass terrorist
financing into its activities. We will meet in the United States in early October to review
econ()mic developments and ensure that no stone goes unturned in our mutual efforts to wage a
successful global campaign against the financing of terrorism.
-30-
PO-635
For press rele"se~~ f;peech£sl puhlic .~rbedules and official biographies, call OUT 24.Ji,our fax line at (202) 622-2040
o
EPA R T lVI E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBliC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C .• 20220. (202) 622-2960
Contact: Sean Miles
(202) 841-4507
FOR IMMEDIATE RELEASE
September 25, 2001
MEDIA ADVISORY
WHO:
Treasury Secretary Paul H. 0' Neill
WHAT:
Secretary O'Neill will address business leaders and CEO's at the WaldorfAstoria, Park Avenue Center Room at 7:30 AM on Wednesday, September 26,
2001. These business leaders represent various sectors within the U.S. economy.
WHERE:
Waldorf-Astoria Hotel
Park Avenue Center Room
New York, NY
TIME:
Media will De permitted to pre-set from 7:00 AM to 7:15 AM and only the first 5
minutes will be open to press.
Media planning to attend this event should contact Sean Miles, Treasury Office of
Public Affairs, at 202-841-4507.
-30-
PO-636
For press relep~ ~e,"..-J»ihlic schedules and official biographies, call our 24-hour fax line at (202) 622-2040
(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
FOR IMMEDIATE RELEASE
September 25, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
28-Day Bill
September 27, 2001
October 25, 2001
912795HT1
2.450%
Investment Rate 1/:
Price:
2.495%
99.809
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 30.72%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FlMA (noncompetitive)
$
SUBTOTAL
Federal Reserve
TOTAL
Accepted
Tendered
Tender Type
$
22,082,000
16,549
$
9,983,480
16,549
o
o
22,098,549
10,000,029
2,077,268
2,077,268
24,175,817
$
12,077,297
Median rate
2.400%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
2.360%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 22,098,549 / 10,000,029
=
2.21
1/ Equivalent coupon-issue yield.
http://www.publicdebUreas.gov
PO-637
D EPA R T 1\1 E N T
0 F
THE
T REA S V R Y
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C. • 20220. (202) 622-2960
Contact: Tasia Scolinos
(202) 622-2960
EMBARGOED UNTIL 9:30 A.M.
September 26, 2001
STATEMENT OF JIMMY GURULE UNDER SECRETARY FOR ENFORCEMENT U.S.
DEPARTMENT OF THE TREASURY FOR THE SENATE COMMITTEE ON
BANKING, HOUSING, AND URBAN AFFAIRS DOMESTIC AND INTERNATIONAL
MONEY LAUNDERING
Chairman Sarbanes, Senator Gramm, and distinguished members of the Committee, I
appreciate the opportunity to share with you the Treasury Department's ongoing commitment to
the fight against money laundering. I appear before you today more convinced than ever of the
importance and necessity of a comprehensive money laundering strategy. I know you feel the
same way and I look forward to sharing with you some of the key aspects of President Bush's
plan to combat domestic and international money laundering.
Let me begin by saying that criminal acts of violence, such as the horrific terrorist attacks
of September 11 th, need more than just cunning leadership and dedicated followers to be
successful. Such undertakings also require extensive financial funding as well. Let me be clear-the Treasury Department is committed to identifying the sources of funding used to underwrite
attacks of this nature and we will take whatever action is necessary to shut them down. Although
the complexities of money laundering have long been associated with concealing the true nature
of proceeds generated from the drug cartels, the tragedies of September 11 th also underscore the
need for aggressive and vigilant anti-money laundering efforts which target the movement of
funds into this country for the purpose of criminal activity - especially funds eannarked for
terror. In response to this need, the implementation of the 2001 Money Laundering Strategy
includes several specific steps to dismantle and disrupt the financing of terrorist activities.
RECENT STEPS
As Secretary O'Neill has stated publicly, the Treasury Department's top priority is to
dismantle the financial infrastructure of the terrorist groups in question. To that end, we will
deploy all of our resources to trace and block the funds of those who engage in these heinous acts
of murder as well as those who harbor them and fund them. Two days ago, President Bush
signed a new Executive Order under the International Emergency Economic Powers Act
(IEEPA) blocking the assets of, and transactions with, terrorist organizations and certain
charitable, humanitarian, and business organizations that finance or support terrorism. To fulfill
President Bush's pledge to eliminate safe havens for those who perpetrate acts of terror, we will
use every tool at our disposal to pursue and eliminate terrorist fundraising networks.
PO-638
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speech~
public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
(i)
INTERNATIONAL COOPERATION
Because terrorism is global in nature, international cooperation must be an essential
component of any enforcement strategy if it is to be successful. The Treasury Department has
already taken steps to capitalize on the spirit of international cooperation and is in the process of
working diligently with our counterparts abroad to ensure that accounts under their jurisdiction
linked to terrorist organizations will be frozen.
FOREIGN TERRORIST ASSET TRACKING CENTER
Another important step that Treasury has taken in light of the September 11 th attacks, was
to get our new inter-agency team, the Foreign Terrorist Asset Tracking Center (FTAT) up and
running. FTAT is dedicated to identifying the financial infrastructure of terrorist organizations
worldwide and curtail their ability to move money through the international banking system.
FTAT represents a preventative, proactive, and strategic approach to using financial data to
target and curb terrorist financing worldwide. This team will ultimately be transformed into a
permanent Foreign Terrorist Asset Tracking Center in the Treasury Department's Office of
Foreign Asset Control (OFAC). This is an extraordinary effort that really illustrates the Treasury
Department's creativity in developing new ways to combat terrorism.
In addition, agents and analysts from Treasury's law enforcement bureaus - the U.S.
Customs Service, U.S. Secret Service, Internal Revenue Service-Criminal Investigation, and
Financial Crimes Enforcement Network, as well as analysts from the intelligence community
will be coordinating efforts, and Treasury law enforcement bureaus will continue to coordinate
closely with the Department of Justice and Federal Bureau of Investigation on these matters.
These efforts will act in concert with the 2001 National Money Laundering Strategy, which calls
for unprecedented levels of intra-agency, inter-agency, and international coordination and
cooperation to combat money laundering and related financial crime.
With respect to the strategy, I would like to take a few minutes to outline for the
Committee some of the key components of the Administration's plan.
THE 2001 MONEY LAUNDERING STRATEGY
The 2001 National Money Laundering Strategy represents the combined input and
approval of more than twenty federal agencies, bureaus, and offices. It is a comprehensive plan
designed to disrupt and dismantle major money laundering enterprises and prosecute
professional money launderers through aggressive enforcement, measured accountability,
preventative efforts, and enhanced intra-agency, inter-agency, and international coordinati?n. By
major enterprise, I mean complex, large-scale, large-volume, transnational money laundenng
schemes perpetrated by professional money launderers. Our pol.icy should ~ocus ~nd .will focus
on pursuing terrorist funds and these kinds of high-impact and hIgh-profile lllvestIgatlOns.
AGGRESSIVE ENFORCEMENT
2
The first goal of the 2001 Strategy is to focus law enforcement's efforts on the
prosecution of major money laundering systems and terrorist groups moving funds into this
country for the sole purpose of conducting criminal activity and wreaking havoc in our society.
We recognize that we must concentrate our resources in high-risk areas and target major money
laundering organizations. To focus our limited federal resources, the Strategy calls for the
organization, supervision, and training of specialized money laundering task forces located in
High Risk Money Laundering and Related Financial Crimes Areas (HIFCAs). In a departure
from precedent, the HIFCAs will function primarily in an operational capacity. They will be
tasked with coordinating law enforcement and regulatory assets against corrupt entities engaging
in money laundering activities. I am hopeful that the two newest HIFCAs, Chicago and San
Francisco, as well as the existing Los Angeles HIFCA, can complement ongoing enforcement
efforts to infiltrate and isolate the terrorist financial networks. HIFCA Task Forces will be
jointly supervised by the Departments of Treasury and Justice and will be composed of all
relevant federal, state, and local agencies, and will serve as the model of our anti-money
laundering efforts.
One aspect of the 2001 Strategy that I am particularly proud of is the establishment of an
advanced money laundering training program. I believe that such a program is imperative to
providing our agents and inspectors with the proper investigative tools to combat the complex
and ever changing money laundering schemes of the criminals. The Federal Law Enforcement
Training Center (FLETC) and the Department of Justice's Asset Forfeiture and Money
Laundering Section will be spearheading this effort to train our teams to investigate sophisticated
money laundering schemes.
An aggressive anti-money laundering attack requires that law enforcement utilize all
available statutory authorities to dismantle large-scale criminal enterprises. The 2001 Strategy
mandates an emphasis on federal asset forfeiture laws in conjunction with money laundering
investigations and prosecutions to strip criminals of their ill-gotten gains and dismantle criminal
organizations by attacking their financial base.
We will also continue our ongoing efforts to uncover the sophisticated schemes devised
by professional criminal enterprises and seek to disrupt the financial operations of these illicit
organizations. For example, we will continue to partner with the private sector and our
international colleagues to combat the Black Market Peso Exchange, the largest trade-based
money laundering system in the Western Hemisphere. I would especially like to note the
contributions that the governments of Colombia, Venezuela, Panama, and Aruba have made to
this effort.
MEASURED ACCOUNTABILITY
3
Another concept unique to this year's Strategy is the idea of "measured accountability".
To raise our standards of performance, we must measure the effectiveness of our efforts. For too
long, federal law enforcement has not been subject to accountability through measured
evaluation. Secretary Paul H. O'Neill, in particular, is dedicated to changing business as usual.
Therefore, we will seek to create and implement a uniform system that measures the
government's anti-money laundering results. Emphasis will be placed on measured results,
rather than the level of law enforcement activity.
We will establish a system to collect reliable information that will provide law
enforcement with an accurate picture of its anti-money laundering programs. Once we
institutionalize these databases, we can begin to meaningfully evaluate the success of our
approaches. Our measurement methods will include an examination of:
• quantitative factors, such as the number of money laundering investigations,
prosecutions, and convictions, which will provide a numerical snapshot of our efforts
from year to year;
• qualitative factors - each investigation, prosecution, or conviction will be assigned a
weighted value to mirror the case's complexity, importance, and scope of impact;
• forfeiture and seizure data related to money laundering activity that will represent a
monetary value of our efforts; and
• the criminal marketplace price of laundering money that will help detennine whether
our anti-money laundering efforts are making it more expensive and more difficult for
criminals to launder their illicit proceeds.
We will ensure accountability and raise our standards ofperfonnance, expectation, and
success. Measured evaluation will identify money laundering "hot spots," indicate areas where
law enforcement must enhance or prioritize its investigations and prosecutions, and allow law
enforcement to articulate measurable goals.
PREVENTATIVE EFFORTS
A comprehensive money laundering strategy must also include an effective regulatory
regime that denies money launderers easy access to the financial sector. The 2001 Strategy
continues previous efforts to expand and implement proposed suspicious activity reporting
requirements to financial institutions that are particularly vulnerable to money laundering
activity. We will also seek to establish a true partnership with the private sector to create a
vigorous anti-money laundering regime and to eliminate vulnerabilities that money launderers
seek to exploit. Treasury will encourage the private sector to develop and implement a rigorous
set of "best practices and procedures", thus enabling the industry to aid in the protection of the
integrity of the U.S. financial system.
4
Our principal focus will be to ensure that law enforcement fully utilizes reported
information. To this end, law enforcement must seek to receive only those reports that have law
enforcement value. In 2000, the Financial Crimes Enforcement Network (FinCEN) received and
processed 12,000,000 Currency Transaction Reports (CTRs), thirty percent of which had no
meaningful law enforcement value and would not have been filed if existing reporting
exemptions had been used. The 2001 Strategy calls on law enforcement to work with the private
sector to ensure fuller use of the regulatory reporting exemptions and seeks to expand the
exemptions to other low-risk transactions, if appropriate.
Effective utilization also requires that law enforcement evaluate the usefulness of reported
currency transactions. The Strategy will require law enforcement agencies that use CTR or
Suspicious Activity Report (SAR) information to provide operational feedback to FinCEN. In
turn, FinCEN will use the feedback to evaluate or change its database programs to fit the needs
of law enforcement.
We will also continue our work to "level the playing field" between banks and non-bank
financial institutions. Currently, only those institutions that come under the jurisdiction of the
federal bank supervisory agencies are required to file SARs. I am in the process of working with
my staff and the relevant FinCEN personnel to reevaluate the proposed dates regarding the
implementation of the SAR requirements on money services businesses (MSBs). It is the
position of the Treasury Department that in light of the horrific events of September 11 th that
these regulations need to be put into place as soon as prudently possible. We cannot afford to
permit terrorists the luxury of moving funds through any avenue of our financial system
undetected.
ENHANCED COORDINATION
Lastly and perhaps most importantly, 2001 Strategy stresses the importance of federal,
state, local, and international coordination by creating structured, inter-agency, operational task
forces that provide supervision and accountability. In addition, there will be new cooperationbased incentives.
As I mentioned earlier, the HIFCA Task Forces will be the driving force that unites federal,
state, and local law enforcement agencies. To ensure coordination, HIFCA Task Forces will
prepare a detailed action plan and regularly brief Treasury and Justice officials on the progress of
major money laundering investigations as well as the involvement of state and local law
enforcement agencies in the HIFCAs. Similarly, the Department of the Treasury will conduct
evaluations of existing Financial Crime-Free Communities Support Program (C-FIC) grant
recipients to ensure that local officials are including HIFCA Task Forces in their efforts.
Further, the Strategy strongly encourages U.S. Attorneys in each judicial district to create SAR
Review Teams, which will incorporate state and local officials whenever possible.
Money laundering is a problem of global dimensions that requires concerted and cooperative
action on the part of a broad range of institutions.
5
At the intemationallevel, the Strategy seeks to remove all barriers that inhibit
international cooperation. Appropriate officials from the Departments of State, Justice, and
Treasury will review key existing extradition and mutual legal assistance treaties and recommend
that coverage of money laundering offenses be considered an important objective in assessing
future treaty negotiations. The Strategy will mandate increased use of the international assetsharing program, which will provide incentive for international cooperation.
Our participation within the Financial Action Task Force (FATF) also provides a unique
opportunity for us to work internationally with other member countries to require that countries
in good standing with FATF have rules or regulations in place to address the issue of terrorist
fundraising within their bord~rs. The United States will push for FATF to take action to address
these new issues of concern.
Because money laundering has the potential to increase risks to the global financial
system, Treasury and the other G-7 nations have worked extensively with the International
Financial Institutions (IFIs), and, as a result, the IFIs have agreed to take on an enhanced role in
the global fight against money laundering. The United States will coordinate with G-7 and
FATF members to ensure that the IMF and World Bank incorporate the Forty Recommendations
into their operational work and promote the Forty Recommendations as the international
standard for combating money laundering consistent with the mission and responsibilities of the
IFIs.
The United States, its G-7 partners, and other FATF members are urging the IFIs to
institute a separate "Report on Observance of Standards and Codes" (ROSC) module on money
laundering. Such a module would provide a comprehensive and articulated assessment of the
status and perfonnance of a country's anti-money laundering regime, and we look forward to
having the IFIs full cooperation in this effort.
CONCLUSION
In closing, I leave you today with my personal assurance that during my tenure as Under
Secretary (Enforcement), the Department of Treasury will continue to aggressively pursue
money launderers with every tool that we have at our disposal. Last week I had the opportunity
to visit Ground Zero at what remains of the World Trade Center and see the devastation first
hand. It was a sight I will never forget and I am here today to make sure that this Committee and
the United States Congress know that we will continue to pursue terrorist fundraising networks
and other money laundering operations diligently and with passion.
-30-
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
FOR IMMEDIATE RELEASE
September 26, 2001
CONTACT:
Office of Financi~g
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 2-YEAR NOTES
Interest Rate:
Series:
CUSIP No:
2 3/4%
U-2003
912827708
High Yield:
Issue Date:
Dated Date:
Maturity Date:
2.869%
Price:
October 01, 2001
September 30, 2001
September 30, 2003
99.770
All noncompetitive and successful competitive bidders were awarded
securities at the high yield. Tenders at the high yield were
allotted 49.03%. All tenders at lower yields were accepted in full.
Accrued interest of $ 0.07555 per $1,000 must be paid for the period
from September 30, 2001 to October 01, 2001.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FIMA (noncompetitive)
$
40,262,145
919,267
$
17,000,087 1/
41,181,412
5,666,667
5,666,667
Federal Reserve
$
46,848,079
16,080,820
919,267
o
o·
SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
$
22,666,754
Median yield
2.820%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low yield
2.790%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 41,181,412 / 17,000,087 = 2.42
1/ Awards to TREASURY DIRECT = $789,926,000
PO-639
http://www .publicdebt. treas.goy
DEPARTMENT
OF
THE
TREASURY
NEWS
OFHCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C•• 20220. (202) 622-2960
September 27,2001
For Immediate Release
Contact: Tara Bradshaw
(202) 622-2014
UNITED STATES AND AUSTRALIA SIGN NEW PROTOCOL TO
INCOME TAX TREATY
The Treasury Department announced today that U.S. Ambassador 1. Thomas Schieffer
and Australian Treasurer Peter Costello signed a new Protocol to amend the existing bilateral
income tax treaty, concluded in 1982, between the two countries.
"The new protocol amending the existing tax treaty between the United States and
Australia reflects the close economic relationship between our two countries. We are pleased
that the new agreement provides significant reductions in taxes on dividends, interest, and
royalties that will facilitate cross-border trade and investment," stated Mark Weinberger,
Treasury Assistant Secretary for Tax Policy, in explaining the significance of the Protocol.
The agreement significantly reduces tax-related barriers to trade and investment flows
between the United States and Australia. It also modernizes the treaty to take account of changes
in the laws and policies of both countries since the current treaty was signed. The new Protocol
brings the tax treaty relationship with Australia into closer conformity with U.S. treaty policy.
The most important aspects of the new Protocol deal with the taxation of cross-border
dividend, royalty and interest payments. In many cases, the new Protocol places limits on
source-country taxation that are significantly lower than the level of taxation permitted under the
existing treaty. The new Protocol is only the second U.S. tax agreement to provide a zero rate of
withholding tax on dividends arising from certain direct investments. Dividends from IO-percent
owned corporations which do not qualify for this exemption would be subject to a maximum rate
of withholding tax of 5 percent under the Protocol (instead ofthe I5-percent maximum rate of
the existing treaty). The new Protocol also reduces the level of withholding tax on royalty
payments from the 10-percent rate in the existing treaty to a maximum 5-percent rate and
eliminates entirely withholding tax on rental payments with respect to leases of personal
property. In addition, the new Protocol eliminates the withholding tax on interest payments to
financial institutions and interest paid to the governments of each country. The new Protocol
also clarifies that Australia's tax on capital gains will be a covered tax for purposes of the
existing treaty, thereby eliminating the potential for double taxation of U.S. taxpayers on such
mcome.
Copies of the new Protocol are available from the Office of Public Affairs, Treasury
Department, Room 2321, Washington, D.C. 20220, (202) 622-2960, or on the Internet at
http:/www.treas.gov/taxpolicy/library/austral.pdf.
PO-640
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D EPA R T 1\1 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
Contact: Public Affairs
(202) 622-2960
FOR IMMEDIATE RELEASE
September 27, 2001
G7 Press Conference
All reporters wishing to cover G7 press conferences must apply for G7 press
credentials. This includes media holding current White House and Treasury press
credentials.
Please go to Treasury's website at (www.treas.gov) at the bottom of the page and
complete the G7 press application. Please print it out, sign it and fax it to the
Office of Public Affairs at (202) 622-1999 or (202) 622-2809.
If you are not a United States citizen, please check "other" on the press
application and provide passport information.
All applications must be sent by 12 noon on Wednesday, October 3 rd.
th
G7 press credentials will be available for pick up on October 4th and 5 from
th
th
IO:OOam - 4:30pm at the Metropolitan Square 6 Floor lobby, located at 755 15
Street, NW, across from the Treasury Department.
Treasury will send out another press release announcing times and sites of
the G7 press conferences.
If you have any questions, please contact the Office of Public Affairs at
(202) 622-2960.
-30PO-641
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_ .,
.
-:D EPA R T MEN T
0 F
THE
T REA SUR Y
-
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS e1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.- 20220. (202) 622·2960
EMBARGOED UNTIL 2:30 P.M.
September 27, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury wi~~ auction 13-week and 26-week Treasury bil~s totaling
$24,000 mi~lion to refund an estimated $22,920 million of publicly he~d 13week and 26-week Treasury bi~ls maturing October 4, 2001, and to raise- new
cash of approximately $1,080 million. A~so maturing is an estimated $12,000
million of pub~icly held 4-week Treasury bills, the disposition of which will
be announced October 1, 2001.
The Federal Reserve System ho~ds $11,836 million of the Treasury bills
maturing on October 4, 2001, in the System Open Market Account (SOMA). This
amount may be refunded at the highest discount rate of accepted competitive
tenders either in these auctions or the 4-week Treasury bill auction to be
held October 2, 2001. Amounts awarded to SOMA 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 ~imit of $200 million per
account and wi~l be accepted in the order of sma~lest to largest, up to the
aggregate award ~imit of $1,000 mi~lion.
TreasuryDirect customers have requested that we reinvest their maturing
holdings of approximately $972 mil~ion into the 13-week bill and $739 million
into the 26-week bill.
The a~~ocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a who~e perc~ntage point,
e. g., 17. 13% .
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
Marketab~e 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 high~ights.
Attachment
PO-642
000
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 OCTOBER 4, 2001
September 27, 2001
Offering Amount
Public Offering
$13,000 million
$13,000 million
$11,000 million
$11,000 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 JA 0
October 1,2001
October 4, 2001
January 3,2002
July 5, 2001
$17,082 million
$1,000
182-day bill
912795 IN 2
October 1, 2001
October 4, 2001
April 4, 2002
October 4, 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 daylight saving time on auction day
Competitive tenders ...... Prior to 1:00 p.m. eastern daylight saving 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 financia1 institution on issue date.
P-UBLIC DEBT NEWS
I)epartment of the Treasury • Bureau of the Public Debt· Washington, DC 20239
TREASURY AUTHORIZES HOD CALL OF
FHA INSURANCE FUND DEBENTURES
FOR IMMEDIATE RELEASE
CONTACf:
September 28, 2001
-
Peter Hollenbach
(202) 691-3502
The Departments of Treasury and Housing and Urban Development announced today the call of
all Federal Housing Administration (FHA) insurance fund debentures with an interest rate of
6.375 percent or above outstanding as of September 30,2001. Debentures issued with a
debenture lock agreement are not subject to the call. Debentures that have been registered on the
books of the Federal Reserve Bank of Philadelphia as of September 30, 2001 are considered
"outstanding." The date of call for the redemption of approximately $100 million in debentures is
January 1, 2002, with the semi-annual interest due January 1,2002 paid along with the debenture
principal.
Debenture owners of record as of September 30,2001, will be notified by mail of the call. No
transfers in debentures covered by the call will be made on the books of the U.S. Treasury on or
after October 1, 2001. Prior to October 29,2001, investors should contact the Federal Reserve
Bank of Philadelphia (215) 574-6154 for more information. On October 29,2001, Treasury will
transfer the administration of this program to the Bureau of the Public Debt. Beginning
October 29,2001, please direct all inquiries to the Bureau's Division of Special Investments
(304) 480-5299.
000
http://www.pubIicdebt.treas.gov
PO-643
-
D EPA R T l\l E N T
0 F
THE
-
T REA SUR Y
NEWS
omCE OFPUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlflNGTON, D.C .• 20220. (202) 622-2960
Contact: Tasia Scolinos
(202) 622-2960
FOR IMMEDIATE RELEASE
October 1,2001
We welcome the passage of anti-money laundering legislation by the
Philippines. This action represents an important step in response to concerns
raised by the international community with respect to the Philippines' anti-money
laundering regime. We look forward to the Financial Action Task Force's
expeditious assessment of this law.
-30PO-644
Fur press releases, speeches, public schedules and official biographies, callouT 24-hour fax line a.t (202) 622-2040
OFFICE OF PUBLIC AFFAIRS e1500 PENNSYLVANIA AVENUE, N.W. e WASHINGTON, D.C.e 20220 e (202) 622.2960
EMBARGOED UNTIL 11:30 A.M.
October 1, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $8,000 million to
refund an estimated $12,000 million of publicly held 4-week Treasury bills
maturing October 4, 200.1, and to pay down approximately $4,000 million.
Tenders for 4-week Treasury bills to be held on the book-entry records of
TreasuryDirect will not be accepted.
The Federal Reserve System holds $11,836 million of the Treasury bills
maturing on October 4, 2001, in the System Open Market Account (SOMA). This
amount may be refunded at the highest discount rate of accepted competitive
tenders in this auction up to the balance of the amount not awarded in today's
I3-week and 26-week Treasury bill auctions. Amounts awarded to SOMA 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 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 allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP), if they meet or exceed the reporting
threshold. However, Treasury will not include NLPs in the calculation of award
limits for those bidders.
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-64S
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED OCTOBER 4, 2001
October I, 2001
$8,000 million
Offering Amount
public Offering
$8,000 million
Description of Offering:
Ter.m and type of security ..........
CUSIP number . . . . . . . . . . . . . . . . . . . . . . .
Auction date . . . . . . . . . • . . . . . . . . . . . . .
Issue date ..•...••.•.•.••...•....•.
Maturity date •..••••.•.••.•.•.•....
Original issue date •.•..•..........
Currently outstanding . . . . . . . . . . . . . .
Minimum bid amount and multiples ...
28-day bill
912795 HU 8
October 2, 2001
October 4, 2001
November I, 2001
May 3 , 2001
$30,712 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
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., 4.215%.
(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 daylight saving time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms: By charge to a funds account at a Federal Reserve Bank
on issue date.
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
october 01, 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
October 04, 2001
January 03, 2002
912795JAO
High Rate:
2.320%
Investment Rate 1/:
2.364%
Price:
99.414
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 61.87%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
25,758,337
1,404,964
145,000
$
4,311,969
$
31,620,270
11,450,076
1,404,964
145,000
13,000,040 2/
27,308,301
Federal Reserve
TOTAL
Accepted
Tendered
4,311,969
$
17,312,009
Median rate
2.300%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
2.290%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
= 27,308,301 / 13,000,040 = 2.10
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,084,261,000
'0-646
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
FOR IMMEDIATE RELEASE
October 01, 2001
CONTAC'r:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
October 04, 2001
April 04, 2002
912795JN2
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
2.325%
Investment Rate 1/:
Price:
2.384%
98.825
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 85.85%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FIMA (noncompetitive)
$
24,227,274
1,031,179
15,000
$
4,162,273
4,162,273
Federal Reserve
$
29,435,726
9,953,937
1,031,179
15,000
11,000,116 2/
25,273,453
SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
$
15,162,389
Median rate
2.300%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
2.260%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 25,273,453 / 11,000,116 = 2.30
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $903,376,000
http://www.publicdebt.treas.gov
~O-64 7
D EPA R T JVI E N T
0 F
THE
T REA SUR Y
NEWS
OFFlCE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W•• WASIllNGTON, D.C. - 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
October 2,2001
Contact: Public Affairs
(202) 622-2960
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-648
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·U.S. Governmenl Prinling Office: 1998 - 619-559
·
D EPA R T 1\[ E ~ T
0 F
THE
-
T R E" A SUR Y
-
-
NEWS
OFnCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W•• WASmNGTON, D.C•• 20220. (202) 622-2960
EMBARGOED UNTIL 10:00 A.M. EDT
October 3, 2001
Contact: Tasia Scolinos
(202) 622-2960
STATEMENT OF PAUL H O'NEILL SECRETARY OF THE TREASURY
BEFORE
THE HOUSE COMMITTEE ON FINANCIAL SERVICE
Thank you chairman Oxley, Congressman LaFalce and members of the Committee.
Money can be as lethal as a bullet. If we are to deter and prevent future calamities, and if
we are to root out terrorist cells that threaten to do violence to our people and our communities,
we have to enlist the active help of financial institutions to hunt down the financial benefactors
who underwrite murder and mayhem.
We have already made an excellent start with the President's Executive Order and the
adoption of United Nations Security Council resolution. This U.N. Resolution represents a
confirmation by the global community that an aggressive hunt for terrorist funds is underway and
merits the cooperation of all countries.
The importance of this global campaign cannot be overstated. Building an action-taking
coalition for the financial campaign against terrorism is as important as a military campaign.
We have set a deliberate course to prosecute that campaign. First, we are engaged in an
effort to identify the potential financial intermediaries of suspected terrorists and their associates.
The interagency task force we chair includes the CIA, Departments of State and Justice, the FBI,
and the NSC. Second, we are acting on that intelligence with the issuance of domestic blocking
orders that freeze accounts and bar all trade with terrorist associates. Third, we are engaged with
the FBI in the investigation of the financing of the September 11 th attacks and ·are making
significant contributions in ferreting out those who financed those horrendous attacks. Fourth,
we are engaged in an outreach to secure the endorsement of our blocking orders by allies in the
G7, the EU and throughout the world. Fifth, we have begun to link disparate databases and to
analyze the patterns of terrorist financing.
Here at home, you can help arm us with additional legislative tools to enhance
Treasury's capability to track, block and seize those assets; to secure our borders; and to freely
share infonnation about terrorist activity between law enforcement and U.S. intelligence
servIces.
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Our intent is straight forward - to remove structural limitations that handicap government
efforts to eliminate the violence of terrorism.
To date, the President's program has produced meaningful results. As this Committee is
aware, we have taken action domestically and, just as importantly, scores of countries have
followed suit with bank freezes and pledges to take measures to heighten scrutiny of suspicious
transactions.
In our effort, we are partnering with the private U.S. banking industry, which has helped
us to interpret and analyze financial data. Finally, international financial regulators have made
clear their willingness and commitment to provide us with whatever assistance we may need to
track down the assets of international terrorists.
Other countries have been asked to provide assistance under treaties that provide
Treasury and the Justice Department with evidence in the current probe and to share leads for the
pursuit of new names. In addition, numerous international banks have made plain that they will
assist us in any manner lawfully permitted under their respective domestic laws.
Additionally, we have formed the Foreign Terrorist Asset Tracking Center to help
identify patterns and terrorist financing practices discoverable only through inter-agency
coordination and analysis. The Center joins for the first time disparate databases from law
enforcement, the intelligence community, banking regulators and open access data libraries. The
data is then linked to build a mosaic of terrorist financing activity. This operation allows us to
take a different tack by sustaining a targeted effort at terrorist financing. This approach is not
limited to the episodic, targeted and staccato like pace of a case-specific criminal probe. Instead,
we are using intelligence and law enforcement resources to fmd patterns that will allow us to
address the global problem of terrorist financing.
Now, that is admittedly ambitious, but it is at the core of our declared end. This hunt is
not about money. It is about money that kills. Our approach is proactive and preventative.
Our goal is to drain the financial lifeblood that allows terrorist to finance and accomplish their
deadly goals, and in doing do we aim to shackle their ability to strike again.
The Treasury Department is committed to this purpose. It is for that reason that we
believe the provisions of the Administration's Anti-Terrorism bill are essential. In particular, the
IEEPA amendment that would protect classified data from disclosure by removing barriers to the
successful prosecution of our cause. While I understand these provisions are not currently a part
of the House Anti-Terrorism package, we are hopeful that they will ultimately be included. In
addition, I look forward to working with this Committee on some issues not addressed in the
anti-terrorism package, in particular, additional provision to ensure more effective sharing of
information between law enforcement and intelligence agencies.
Government should not be handcuffed in this endeavor. More can usefully be done, and
Under Secretary Gurule is prepared to outline potential additional measures.
But my pledge to you is simple. The Treasury Department will use every tool we have at
our disposal to shut down terrorist fundraising and dismantle their organizations one dollar at a
time. Their moral banlauptcy will be matched by an empty wallet.
D E P "\ R T ]\1 E N T
() F
THE
T REA S II R "
NEWS
omCE OF PUBllC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C. - 20220 • (202) 622-2960
EMBARGOED UNTIL 10:00 A.M. EDT
October 3, 2001
Contact: Tasia Seolinos
(202)
622-2960
TESTIMONY OF UNDER SECRETARY JIMMY GURULE
UNDER SECRETARY (ENFORCEMENT)
HOUSE COMMITTEE ON FINANCIAL SERVICE
Chairman Oxley; distinguished members of the House
Committee on Financial Services:
Permit me to begin by thanking you for inviting me to
testify before the Committee on the Administration's policies
and proposals for dealing with the threats posed to the U.S. and
global financial systems by international terrorists and
terrorist groups. It is an honor to meet with you this morning
as we assess the Treasury Department's strategy to cut off the
financial lifeblood of the individuals and organizations
responsible for the September 11 attacks.
In so far as possible, my testimony is structured along the
lines requested by Chairman Oxley in his September 27, 2001
letter to Secretary O'Neill. Let me begin with an overview of
what the Treasury Department hopes to accomplish_
First, the Treasury Department is committed to bringing the
perpetrators of the cowardly acts of September 11th to justice.
Second, we are taking steps to identify the financial
infrastructure of these terrorist organizations so that we are
able to disrupt and dismantle their fundraising abilities and
ensure that they do not have access to the international banking
system.
To attain these goals, we must improve coordination and
information sharing among our own government agencies and deepen
and broaden the already strong cooperation of friendly
governments throughout the world. As the President has so
decisively stated, in the war against terrorism there is no
middle ground: ultimately, you either stand with us -- or
against us.
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The Financial Networks and Operations of Terrorist Groups
To cut the lifeblood of Osama Bin Ladin and his terrorist
group Al-Qaida, we must identify and take action against
individuals and Islamic charitable organizations who contribute
money to this organization. We will also target businesses,
front companies, banks and underground money transfer systems
that participate in the financial schemes of the terrorists.
There can be no doubt that the dismantling of Bin Laden's
financial network is one of the most c.ritical elements of our
policy to deter and prevent future terrorist attacks.
Unfortunately, available information indicates that some
Islamic charitable organizations have been penetrated, exploited
and are now controlled by terrorists involved with Al-Qaida.
Islamic charitable organizations which have elements associated
with Al-Qaida include multinational Gulf-based organizations
operating worldwide with multi-million dollar budgets at one end
of the spectrum and small, tightly organized front cells at the
other. Islamic charitable organizations serving as cover for
terrorist groups adopt innocuous names and co-opt legitimate
·causes. Often, well-intentioned individuals seeking to make
contributions to provide relief for refugees from disaster are
defrauded -- and their funds end up diverted to finance
terrorism. Shutting down or re-configuring these corrupt
charities is a critical component of the war against Bin Ladin's
financial empire -- and one which will require intense
international coordination and cooperation.
In addition to fund-raising, AI-Qaida uses banks, legal
businesses, front companies and underground financial systems to
finance its activities. Some AI-Qaida operatives engage in
petty theft to support their cells. Other AI-Qaida elements
profit from the drug trade. For instance, Taliban-controlled
Afghanistan produces at least three-quarters of poppy in the
world.
AI-Qaida operatives use checks, credit cards, ATM cards,
and wire-transfer systems and brokerage accounts throughout the
world, including the US. Often, accounts are maintained in
names unknown to us.
One underground system of moving funds is called "Hawala"
which operates outside traditional regulation with virtually no
paper trail, relying on trust and guaranteed anonymity.
2
Operators engaged in this system deliver money across
borders without physically moving it -- assured the account will
be settled by money or material goods returned in a future
reverse transaction. Used widely in the Middle East and South
Asia for centuries, all indications are that the system is
exploited by AI-Qaida and other terrorist organizations. FinCEN
and other Treasury law enforcement components are currently
making efforts to determine if non-traditional money remittance
systems, such as Hawala, are being used within the u.s. in
furtherance of terrorist activity. Additionally, FinCEN has
begun analyzing law enforcement case information and other data
to build a strategic profile of methodologies used to collect,
move and disburse funds that could support terrorist activities
in the u.s.
Tools for Stopping Terrorist Financing
Detecting and disrupting the financing of terrorist groups
is a complex process involving many steps and the input of many
dedicated analysts and law enforcement personnel. At its core,
the process involves six primary steps. First, the investigation
and identification of targets. Second, identification of assets
for potential blocking or seizure. Third, identification of
methodologies used to move the funds for operational support.
Fourth, identification of gaps in law enforcement and regulatory
processes that make the movement of terrorist funds possible ..
Fifth, the sharing of information with appropriate law
'enforcement personnel and other appropriate organizations around
the world_ And sixth, application of an array of authorities,
regulatory tools and law enforcement initiatives to deprive
terrorists of access to their funds within the U.s. The
Department of Treasury is currently utilizing the following
tools in the fight against the funding of terrorism.
IEBPA
Central to this process is the ability to obtain
information and make effective use of it. The International
Emergency Economic Powers Act (IIIEEPA"), is the principal tool
used to stop terrorism financing. It provides broad authority to
impose comprehensive trade and financial sanctions against
foreign terrorists. Essentially, IEEPA authorizes the President
to act against foreign threats to the national security, foreign
policy, or economy of the united States by declaring a national
emergency with respect to an identified threat -. The President is
thus empowered to impose trade and financial sanctions to deal
with that threat.
3
The Office of Foreign Assets Control of the u.s. Treasury
Department (1I0FAC") administers the economic sanctions programs
against the specific countries, groups or individuals posing
that threat.
IEEPA provides the President and his designees with the
authority to seek information regarding transactions subject to
Presidential Executive Orders. OFAC may require US persons to
provide information regarding transactions that involve or are
reasonably believed to involve blocked property. The Secretary
of the Treasury or the Secretary of State, depending on the
circumstances, may identify additional individuals or entities
targeted by the Executive Order. IEEPA also provides broad
authority to block the property of foreign terrorists and their
agents and to prevent u.s. persons from engaging in any type of
financial transaction with targeted terrorists.
By way of background, on January 23, 1995, President
Clinton signed Executive Order ("E.O.") 12947, which declared a
national emergency with respect to acts of violence by foreign
terrorists that threaten to disrupt the Middle East peace
process. E.O. 12947 blocks all property and property interests
that are in the united States or in the possession or control of
a u.s. person belonging to entities named in the Annex to the
order. The blocking provisions also apply to certain foreign
persons designated by the Secretary of State and persons
designated by the Secretary of the Treasury.
Executive Order 12947 also prohibits u.S. persons from
engaging in transactions with or making charitable donations to
any entity named in the Annex or designated under the Order. On
August 20, 1998, president Clinton signed E.O. 13099, which
added Osama bin Ladin, several of his close advisers, and AlQaida (also known as the Islamic Army) to the Annex of E.O.
12947. This subjects the assets of these individuals and groups
to blocking and prohibits transactions with them by ?S.
persons.
Executive Order 13129, issued on July 4, 1999, deals
expressly with the threat posed by the actions and policies of
the Taliban in Afghanistan, including the Taliban's policy of
allowing territory under its control in Afghanistan to be used
as a safe haven for Osama bin Ladin and AI-Qaida. The E.O.
blocks all property and interests in property of the Taliban
that are in the united States or in the control of U.S. persons,
as well as interests in property of persons designated by the
Secretary of the Treasury.
4
In response to the events of September 11, 2001, President
Bush issued E.O. 13224 on September 23, 2001, declaring a
national emergency with respect to acts of terrorism and threats
of terrorism committed by foreign terrorists against the United
States. E.O. 13224 blocks all property and interests in
property of the indiv~duals and entities named in the E.O.'s
Annex or as designated by the Secretary of the Treasury or the
Secretary of State under the order. It also prohibits
transactions, including charitable donations, by U.S. persons
with any individual or entity named in the Annex to E.O. 13224
or designated pursuant to that E.O. The Annex to Executive
Order 13224 named 27 entities and individuals associated with
Osama bin Laden and additional entities and individuals will be
added in the days and months to come.
The Antiterrorism Act
The Antiterrorism Act provides authority for two additional
sanctions programs targeting terrorism. First, prohibiting
material support, such as funds, false identifications and safe
houses, to designated foreign terrorist organizations. Second
prohibiting financial transactions with state sponsors of
terrorism.
First, Section 302 of the Act authorizes the Secretary of
State, in consultation with the Secretary of Treasury and the
Attorney General, to designate organizations meeting stated
requirements as Foreign Terrorist Organizations (IIFTOslI).
Section 303 of the act makes it a crime for a person within the
United States or subject to U.S. jurisdiction to provide
material support to a designated FTO. Financial institutions in
possession or control of funds in which an FTO or its agent has
an interest are required to retain such funds and file reports
with the Treasury Department.
The second tool, established in section 321 of the Antiterrorism Act, prohibits all financial transactions by U.S.
persons with governments designated by the Department of State
as terrorism-supporting nations, except as provided in
regulations issued by the Secretary of the Treasury.
Regulations implementing Section 321 were issued by OFAC to
impose prohibitions with respect to governments not already
covered by comprehensive OFAc-administered sanctions. At the
time regulations were issued, those governments were Syria and
Sudan.
5
Currently, all state sponsors of terrorism except Syria
and North Korea are subject to comprehensive financial and trade
sanctions.
United Nations Participation Act
The United Nations Participation Act (IIUNPAII) gives the
President the authority to impose economic sanctions to
implement mandatory provisions of UN Security Council
Resolutions.
Bank Secrecy Act
The reporting and record keeping rules contained in the
Bank Secrecy Act ("BSA"), administered by the Financial Crimes
Enforcement Network ("FinCEN"), create a paper trail to trace
funds through the financial system. Information reported under
existing suspicious transaction-reporting rules for banks is
currently being forwarded to law enforcement on an expedited
basis through the establishment of a toll-free hotline operated
by FinCEN. Under its BSA authority, Treasury has also issued
rules that would apply to the non-bank financial sector that may
be used by terrorists. For example, final rules would require
informal funds transfer businesses like Hawalas to register with
the Department of the Treasury by the end of the year. Treasury
is also preparing to issue suspicious activity reporting rules
to other non-bank financial institutions such as brokers and
dealers in securities and casinos.
Treasury Enforcement Bureau Participation
In addition, three of the Treasury law enforcement
components, the U.S. Customs Service, IRS-C.I. and the Secret
Service are active participants in the quest to investigate
terrorist money laundering leads. They have been working closely
with the Joint Terrorism Task Forces and at FBI headquarters to
provide their considerable technical expertise with respect to
the terrorist money trail.
How the President's September 23 Executive Order Differs from
Previous OFAC-related Orders
President Bush's Executive Order 13224 blocks all property
and interests in property, in the United States or within the
possession or control of a U.S. person, of 27 foreign
individuals and entities determined by the President to have
engaged in, threatened or supported grave acts of terrorism
6
against the United States or U.S. nationals. The Secretary of
State, in consultation with the Secretary of the Treasury and
the Attorney General, may designate foreign persons who have
committed or pose a risk of committing such acts of terrorism.
The Secretary of the Treasury, also in consultation with others
(including in certain cases, foreign authorities) may designate
persons who are owned or controlled by or act for or on behalf
of foreign terrorists subject to E.O. 13224. Executive Order
13224 also prohibits any transaction or dealing in the blocked
property of any person designated by the President or the
Secretaries of Treasury or State, including the making or
receiving of any donation to or for these persons.
E.O. 13224 greatly expands the geographic scope of previous
orders intended to disrupt terrorist financing. As noted,
previous programs targeted specific governments or Middle East
·terrorists. Although the Antiterrorism Act program targeting
FTOs is broad geographically, it limits the jurisdiction of the
Secretary to financial institutions rather than all U.S.
persons, and does not provide the full blocking authority
granted under E.O. 13224. By focusing more broadly on acts and
threatened acts of terrorism against the United States or U.S.
nationals, the President has brought to bear the full blocking
authority of IEEPA to disrupt the financing of international
terrorism.
In addition t E.O. 13224 expands the President's authority
to designate persons subject to asset blocking and other
sanctions by permitting the designation of " .. persons determined
.. to be otherwise associated with .. " terrorists designated by
the President or the Secretaries of Treasury or State. The
Treasury Department has not previously had the authority to
block assets on the basis of an association with a designated
terrorist.
The Foreign Terrorist Asset Tracking Center
The complex nature of terrorist fundraising demands a
creative and unconventional response from the US government.
The interagency Foreign Terrorist Assets Tracking Center (FTAT),
to be permanently housed in OFAC, is now up and running. FTAT
is an important tool in our quest" to dismantle the terrorist's
financial bases and shut down their fundraising capabilities.
7
FinCEN and its network partners assembled
support the FTAT.
on~site
directly
The center is dedicated to identifying the financial
infrastructure of terrorist organizations worldwide and
curtailing their ability to move money through the international
banking system. It represents a preventative, proactive and
strategic approach to using financial data to target and curb
terrorist funding worldwide.
The FTAT differs from traditional law enforcement's use of
financial tracking in two critical aspects.
First, the FBI and other law enforcement entities look at
financial data as it relates to a specific case -- in this
instance the horrific attacks of September 11. By contrast,
FTAT will be looking at all global terrorist organizations
implicated in several different attacks -- we seek to create a
"big picture" profile ot the financial infrastructure of these
groups.
Second, we are collecting and analyzing this information
for the express purpose of identifying and disrupting the
various sources of funding that these groups are receiving.
The FTAT will focus on foreign terrorist groups that
threaten U.S. national security by assessing their sources and
methods of fundraising and movement of funds. This information
will be used to conceptualize, coordinate and implement'
strategies within the U.S. government to achieve four goals:
deny these target groups access to the international financial
system; impair their fund-raising abilities; expose, isolate,
and incapacitate their financial holdings; and to cooperate with
other governments to take similar measures.
This strategy brings to bear the full weight and influence
of the federal government relating to financial matt'ers -drawing upon the defense, diplomatic, enforcement, intelligence,
and regulatory communities -- and involves foreign and domestic
actions.
What Additional Legislation is Needed
As the Secretary discussed earlier, the Treasury Department
is committed to dismantling terrorist fundraising mechanisms
with every tool we have at our disposal. To do this effectively,
I am here today to reiterate the Secretary's request that we
8
remove the handcuffs that are hindering law enforcement and
intelligence agencies from doing their job.
We are currently evaluating proposals that would equip the
Treasury law enforcement components with the necessary tools for
the task at hand. For instance, we believe more needs to be
done to permit the sharing of information between relevant law
enforcement and intelligence agencies for purposes of terrorism
investigations. We are also examining certain limitations
currently imposed by IEEPA, and evaluating whether the Customs
Service would benefit from enhanced jurisdictions and powers.
We anticipate putting together proposed legislation to address
these important concerns and look forward to working with
Congress on this matter in the near future.
The Extent of International Cooperation
Because terrorism is global in nature international
cooperation is an essential component of any enforcement
strategy. I am pleased to report that in addition to the
domestic measures we have taken we have also received
substantial cooperation internationally as well. To date, at
least 27 countries have taken steps to implement President
Bush's September 23 rd Executive Order. Another 27 are acting on
UN Security Council Resolution 1333. Still others have
expressed support and are working on taking specific actions.
We now stand shoulder to shoulder with those in the civilized
world who are committed to ensuring that terrorists' access to
financial resources is significantly impeded.
l
l
The Department of Treasury is working closely with other G7 Finance Ministers in the fight against the financing of
terrorism. Last week, Secretary O'Neill organized a lengthy G-7
Finance Ministers' phone conference call to discuss the economic
and financial situation in our countries since the attack. As
part of this discussion, all participating countries shared our
national action plans to block the assets 0: terrorists and
their associates and reviewed progress to date.
On Saturday, Secretary O'Neill will meet with his G-7
colleagues in Washington to discuss these issues in more detail.
They will also be discussing the role that the Financial Action
Task Force can play in the fight against the financing of
terrorism. They will also review the issue of offshore
financial centers and their role in financing terrorism. In
addition, I anticipate that Secretary O'Neill will address the
important subjects of information sharing arrangements amongst
9
financial crimes experts, and the possible establishment of
terrorist asset-tracking centers in the other G-7 countries
similar to the one created by the United States after the
September 11 attacks.
In addition to numerous contacts with the G7 countries,
senior Treasury officials have contacted finance officials in
China, Russia, India, Saudi Arabia, Pakistan, Indonesia, Egypt,
the Netherlands, the Philippines, Spain, Argentina, Brazil,
Bahrain, and Kuwait. In these calls we have informed them that
President Bush's September 23rd Order is only the first step in
a multiphase U.s. action plan to combat terrorist financing. We
have emphasized the importance we have attached to strong action
in support of the global effort against terrorist financing. We
have asked that they cooperate with OFAC in tracking terrorist
money movements and move rapidly to remove any legal or other
barriers that might hinder our joint efforts.
Second, OFAC will lead bilateral missions to several key
countries to press for immediate effective actions to block
terrorist assets, cut off terrorist fund flows, and more closely
regulate the fund-raising activities of various organizations
and groups. Technical assistance will be offered where it is
useful. These bilateral efforts will be an extension of two
previous missions undertaken by OFAC in the past couple of
years.
Third, we have been working very hard to improve existing
international sanctions and anti-money laundering coordination
mechanisms. Prominent among these are a multilateral sanctions
administrators coordinating group which meets regularly with
OFAC on UN and EU sanctions issues and the G7 Financial Crimes
Experts Group. Both of these groups are meeting in Europe this
week to strengthen coordination and information-sharing
arrangements.
Mr. Chairman, this concludes my formal testimony. I would
be pleased to answer any questions that you, or members of the
Committee, may have regarding the Administration's goals and
policies.
10
D E P \ R
r
\1 E \' T
() F
TIlE
T REA S l R Y
NEWS
OMCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W•• WASHINGTON, D.C. - 20220. (202) 622-2960
EMBARGOED UNTIL 11 AM
October 3, 2001
Contact: Betsy Holahan
(202) 622-2960
OPENING STATEMENT OF TREASURY SECRETARY PAUL H.O'NEILL
BEFORE THE SENATE FINANCE COMMITTEE
Chairman Baucus, ranking member Grassley, and members of the Finance Committee, I
want to thank you for the opportunity to appear before you this morning.
Let me start out by saying: the foundations of the U.S. economy, like the resolve of the
American people, remains unshakably strong despite the terrorist attacks on September 11. This
nation, its people, and its economy will continue to excel over the long run as we have in the
past.
That does not mean that every thing is as we would)ike it to be.
Let me begin by discussing with you where I saw the economy heading before the
September 11 attacks.
.
Starting in the summerof2000, our economy struggled to throw off the effects ofan
unsustainable surge in investment in telecommunications and infonnation technology. As
investment plummeted in these sectors, the consumer kept the economy in barely positive growth
territory.
In the third quarter of this year, leading up to September 11, I believe the economy was
running at a low rate of growth and was likely to have concluded the quarter with a small but still
positive growth rate.
The fourth quarter prospects were somewhat better, perhaps a real growth rate in the
range of 1 to 2%. The 2002 outlook suggested a return to normal growth rates as the economy
responded to favorable developments including:
•
Stimulus to consumer spending from the tax rebates.
•
Aggressive Federal Reserve easing during the first eight months of the year.
•
Reduction of excess inventories, paving the way for future production gains.
•
Easing of energy prices.
PO-651
rpress releases• .speecbl!Sp public schedules and tJJicial biographies, call our 24-lacmr fax line at (202) 622-2040
I)
The terrorist attacks of September 11 created disruptions that swept through our economy
very quickly. Our airways were shut down and all ofthe travel-associated industries effectively
came to a halt. Consumers stayed home and, as a consequence, it now seems certain that when
the numbers are tallied for the third quarter, they will show that our economy experienced
negative real growth.
The first comprehensive economic information we receive on September - to be released
on Friday - will not provide much information on the effect of the attacks, although private
forecasters expect it will show an increase from the August unemployment rate of 4.9 percent.
Since the Labor Department surveys reflect employment in the early part of the month, workers
affected by the attacks presumably showed up on payrolls and were counted as employed. We
shouldn't be surprised to see a further worsening when the October figures are released, as the
post-September 11 layoff announcements are translated into actual job losses.
The depth ofthis contraction, as well as the pace at which the economy returns to a
healthy rate of growth, will depend in large part on how fast consumers regain their confidence
and on our success in incorporating new protections against possible terrorist acts without
material reductions in productivity.
The fourth quarter numbers will depend on how quickly consumer confidence rebounds.
In just the past week, it appears we are beginning to regain our economic footing. Consumers
are returning to the stores, airline usage is increasing and there are buyers again for 'big ticket'
goods such as automobiles.
The Administration has worked with Congress to craft appropriate and timely policy
responses to minimize the economic downturn. The fiscal policy stimulus in the pipeline is
already substantial. It includes the Economic Growth and Tax Relief Reconciliation Act of
2001, which provided $38 billion in tax rebates sent out in July, August, and September as well
as increasing growth prospects by lowering marginal rates.
We've also taken significant steps since the terrorist attacks. The President and Congress
have approved $40 billion for meeting relief needs and increasing security measures, and have
provided $5 billion in direct relief to the airline industry, with up to another $10 billion in loan
guarantees to follow. Supporting this vital industry through this difficult period is crucial to
restoring consumer confidence and maintaining thousands of jobs in the airline and related
industries. And of course, the Federal Reserve has lowered the Federal Funds rate by 400 basis
points since January.
There is broad agreement that in order to have the appropriate impact on the economy the
fiscal impact of an economic growth package should approximate 1 percent of GDP. With the
actions already taken, about $50 billion of spending has already been put in motion.
Recognizing this, the President has instructed me to work with the appropriate members of
Congress to formulate a package of actions with a fiscal year 2002 impact of $60 to $75 billion.
The President believes, and there seems to be broad bipartisan agreement in the Congress, that
we should take care not to put upward pressure on long-term interest rates.
It is clear that the components of the stimulus package are just as important as its size. I
look forward to working with you to ensure that the package address three priorities: restoring
consumer demand, supporting business investment, and helping those affected by the September
11 attacks. We welcome the positive comments from members of Congress on ways to help the
economy. We are confident we can come together to create a fiscally responsible stimulus
package that will restore confidence and prosperity in our economy.
In conclusion, I want to thank you again for this opportunity to come before you today. I
will now take any questions you might have.
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS' 1500 PENNSYLVANIA AVENUE, N. W.' WASHING TON, D.C.' 20220' (202) 622-2960
EMBARGOED UNTIL 2:30 P.M.
October 3, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY TO AUCTION $5,000 MILLION OF
30-1/2-YEAR INFLATION-INDEXED BONDS
The Treasury will auction $5,000 million of 30-1/2-year inflation-indexed bonds
to raise cash.
Amounts bid by Federal Reserve Banks for their own accounts will be added to
the offering.
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 will be conducted
tive and noncompetitive awards will
tenders.
The allocation percentage
be rounded up to the next hundredth
in the single-price auction format.
All competibe at the highest yield of accepted competitive
applied to bids awarded at the highest yield will
of a whole percentage point, e.g., 17.13%.
NOTE: The net long position reporting threshold amount for the 30-1/2-year
inflation-indexed bond is $1 billion.
The bonds 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 BookEntry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as amended).
Details about the new security are given in the attached offering highlights.
000
A't tachmen t
)-652
'or press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERING TO THE PUBLIC OF
30-1/2-YEAR INFLATION-INDEXED BONDS TO BE ISSUED OCTOBER 15, 2001
Offering Amount
Public Offering
October 3, 2001
$5,000 million
$5,000 million
Description of Offering:
Term and type of security . . . . . . . . . . . . . . . . . . . . . . . . . .
Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Auction date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dated date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30-1/2-year inflation-indexed bonds
Bonds of April 2032
912810 FQ 6
October 10, 2001
October IS, 2001
October IS, 2001
April 15, 2032
Determined based on the highest
accepted competitive bid
Real yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
Interest payment dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April IS and October IS
Minimum bid amount and multiples .......••.......... $1,000
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Premium or discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
STRIPS Information:
Minimum amount required . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,000
Corpus CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912803 CL 5
Due date(s) and CUSIP number(s)
for additional TIIN(s) . . • . . . . . . . . . . . . . . . . . . . . . . . . October 15, 2029
April 15, 2030
October 15, 2030
April IS, 2031 October 15, 2031
April IS, 2032 -
- -
- - - - - -
912833
912833
912833
912833
912833
912833
YD 6
YE 4
YF 1
YG 9
YH 7
YJ 3
Submission of Bids:
Noncompetitive bids:
Accepted in full up to $5 million 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 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 yield with three decimals, e.g., 3.123%.
(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 $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 Yield . . . . . . . . . . . . . . . . 35% of public offering
Maximum Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% of public offering
Receipt of Tenders:
Noncompetitive tenders:
Prior to 11:00 a.m. eastern daylight saving time on auction day.
Competitive tenders:
Prior to 11:30 a.m. eastern daylight saving 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.
Indexing Information:
cpr Base Reference Period . . . . . . . . . . . . . . . . . . . . . . . . . . 1982-1984
Ref CPI 10/15/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177.50000
Index Ratio l0[15/2UU1. . . . . . . . . . . • . . . . . . . . . . . . . . . . . . 1.00000
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC
0239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
IMMEDIATE RELEASE
)ctober 02, 2001
~OR
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
28-Day Bill
October 04, 2001
November 01, 2001
912795HU8
High Rate:
2.280%
Investment Rate 1/:
2.311%
Price:
99.823
All noncompetitive and successful competitive bidders were awarded
ecurities at the high rate.
Tenders at the high discount rate were
llotted
3.39%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
20,756,083
11,823
7,988,273
11,823
°
20,767,906
8,000,096
3,361,569
3,361,569
Federal Reserve
TOTAL
$
°
SUBTOTAL
lS
Accepted
Tendered
$
24,129,475
$
11,361,665
Median rate
2.230%: 50% of the amount of accepted competitive tenders
tendered at or below that rate.
Low rate
2.185%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
d-to-cover Ratio
=
20,767,906 / 8,000,096
=
2.60
Equivalent coupon-issue yield.
)-653
http://www .p ublicde bt. treas. gOY
D EPA R T l\I E N T
0 F
THE
T REA SUR Y
NEWS
1REASURY
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
Contact: Tara Bradshaw
(202) 622-2014
FOR Il\-lwIEDIATE RELEASE
September 28, 2001
TREASURY CONTINUES TO MAIL OUT CHECKS
Today the Treasury Department will send out more than 282,000 advance payment checks to
taxpayers for nearly $127 million in tax relief.
The Treasury Department has completed the bulk mailing of advance payment checks that were
mailed according to the last two digits of the taxpayers' Social Security number. Over the past
eleven weeks, Treasury has sent out nearly 83 million checks for more than $35 billion in tax
relief. Treasury will continue to send out checks as extensions or late-filed returns are processed.
-30-
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July 30, 2001
Kerry Lanham, Secretary, Federal Financing Bank (FFB) ,
announced the following activity for the month of June 2001.
FFB holdings of obligations issued, sold or guaranteed by
other Federal agencies totaled $38.2 billion on June 30, 2001,
posting a decrease of $496.3 million from the level on May 31,
2001.
This net change was the result of an increase in holdings
of government-guaranteed loans of $65.0 million, and a decrease
in holdings of agency debt of $421.3 million and in holdings of
agency assets of $140.0 million. The FFB made 85 disbursements
and received 9 prepayments during the month of June.
Attached to this release are tables presenting FFB June loan
activity and FFB holdings as of June 30, 2001.
PO-655
0
10
u..
Page 2
FEDERAL FINANCING BANK
JUNE 2001 ACTIVITY
Date
Borrower
Amount
of Advance
Final
Maturity
Interest
Rate
AGENCY DEBT
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.
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
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
6/01
6/01
6/04
6/04
6/05
6/05
6/06
6/07
6/08
6/08
6/11
6/11
6/12
6/12
6/13
6/13
6/14
6/14
6/15
6/15
6/18
6/18
6/19
6/19
6/20
6/20
6/21
6/22
6/22
6/25
6/25
6/26
6/26
6/27
6/27
6/28
6/28
6/29
6/29
$850,000,000.00
$272,300,000.00
$635,000,000.00
$220,900,000.00
$230,000,000.00
$235,000,000.00
$240,100,000.00
$70,200,000.00
$760,000,000.00
$305,900,000.00
$1,115,000,000.00
$310,800,000.00
$950,000,000.00
$284,700,000.00
$800,000,000.00
$312,700,000.00
$700,000,000.00
$273,100,000.00
$1,280,000,000.00
$254,700,000.00
$620,000,000.00
$144,200,000.00
$380,000,000.00
$130,600,000.00
$100,000,000.00
$275,800,000.00
$224,800,000.00
$830,000,000.00
$403,600,000.00
$1,210,000,000.00
$344,300,000.00
$1,090,000,000.00
$249,100,000.00
$920,000,000.00
$276,900,000.00
$760,000,000.00
$284,300,000.00
$600,000,000.00
$317,700,000.00
6/04/01
6/04/01
6/05/01
6/05/01
6/06/01
6/06/01
6/07/01
6/08/01
6/11/01
6/11/01
6/12/01
6/12/01
6/13/01
6/13/01
6/14/01
6/14/01
6/15/01
6/15/01
6/18/01
6/18/01
6/19/01
6/19/01
6/20/01
6/20/01
6/21/01
6/21/01
6/22/01
6/25/01
6/25/01
6/26/01
6/26/01
6/27/01
6/27/01
6/28/01
6/28/01
6/29/01
6/29/01
7/02/01
7/02/01
6/12
$4,197.72
10/01/26
3.809%
3.797%
3.757%
3.809%
3.797%
3.757%
3.747%
3.757%
3.747%
3.766%
3.757%
3.726%
3.766%
3.685%
3.726%
3.674%
3.685%
3.684%
3.674%
3.642%
3.684%
3.643%
3.642%
3.633%
3.643%
3.612%
3.633%
3.612%
3.570%
3.633%
3.581%
3.570%
3.581%
3.581%
3.643%
3.581%
3.767%
3.643%
3.776%
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
8/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
5.780% SjA
Page 3
FEDERAL FINANCING BANK
JUNE 2001 ACTIVITY
Borrower
Atlanta CDC Lab
Chamblee Office Building
Atlanta CDC Lab
San Francisco OB
ICTC Building
ICTC Building
Date
Amount
of Advance
Flnal
Maturity
Interest
Rate
6/12
6/15
6/15
6/18
6/21
6/26
$39,375.00
$36,756.16
$750,161.12
$289,286.73
$172,712.85
$91,551. 35
1/30/02
10/01/26
1/30/02
8/01/05
11/02/26
11/02/26
3.698%
5.720%
3.617%
4.701%
5.710%
5.634%
S/A
S/A
S/A
S/A
S/A
S/A
6/18
6/18
6/19
6/19
$67,814.23
$37,068.02
$361,735.27
$539,168.51
3/01/30
3/01/30
9/04/29
9/04/29
5.674%
5.674%
5.650%
5.650%
S/A
S/A
S/A
S/A
6/01
6/04
6/04
6/04
6/04
6/04
6/04
6/04
6/05
6/05
6/05
6/07
6/07
6/07
6/08
6/08
6/11
6/12
6/12
6/12
6/14
6/15
6/18
6/19
6/19
6/20
6/22
6/22
6/25
6/25
6/25
6/26
6/26
6/26
$6,831,000.00
$1,037,000.00
$6,656,000.00
$6,302,000.00
$5,699,000.00
$1,152,000.00
$4,000,000.00
$2,000,000.00
$432,000.00
$8,119,000.00
$726,000.00
$1,148,000.00
$1,380,000.00
$1,380,000.00
$121,000.00
$2,158,000.00
$1,811,000.00
$1,000,000.00
$20,000,000.00
$22,074.00
$861,000.00
$750,000.00
$750,000.00
$750,000.00
$4,794,000.00
$1,000,000.00
$3,250,000.00
$1,500,000.00
$500,000.00
$300,000.00
$3,059,069.00
$500,000.00
$1,000,000.00
$2,000,000.00
12/31/30
12/31/24
12/31/25
1/03/23
12/31/25
6/30/16
1/02/35
12/31/35
6/30/03
12/31/24
6/30/11
1/02/35
12/31/01
7/01/02
12/31/15
1/02/35
1/02/35
1/03/34
12/31/19
9/30/02
9/30/11
1/03/34
12/31/01
1/02/35
6/30/08
1/02/35
9/30/02
6/30/11
12/31/01
12/31/01
6/30/05
12/31/01
1/03/33
1/03/33
5.728%
5.630%
5.769%
5.712%
5.644%
5.529%
5.668%
5.669%
4.183%
5.726%
5.231%
5.611%
3.576%
3.633%
5.271%
5.673%
5.685%
5.640%
5.426%
3.893%
5.132%
5.586%
3.517%
5.630%
5.046%
5.619%
3.611%
5.157%
3.396%
3.396%
4.474%
3.438%
5.637%
5.637%
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.
DEPARTMENT OF EDUCATION
Barber-Scotia College
Barber-Scotia College
Tougaloo College
Tougaloo College
RURAL UTILITIES SERVICE
South Miss. Elec. #691
Alabama Electric #393
Alabama Electric #507
Alabama Electric #508
Alabama Electric #564
Cameron Telephone #718
East Central Energy #660
Lamar Electric #716
Dewitt Elec. #697
East Kentucky Power #491
Piedmont Tel. #566
Frontier Power #667
Scenic Rivers Energy #677
Scenic Rivers Energy #677
Citizens Tel (VA) #680
Ozark Electric #629
Meeker Cooperative #699
Cimarron Electric #567
Seminole Electric #678
Upsala Coop. Tele. #429
Coop. Power Assoc. #450
Tohono O'odham Util. #597
Freeborn-Mower Coop. #736
Freeborn-Mower Coop. #736
Okefenoke Rural Elec. #685
Tri-State E.M.C. #730
Grady Electric #690
Northern Neck Elec. #713
Freeborn-Mower Coop. #736
Freeborn-Mower Coop. #736
Farmers Telephone #476
Federal Rural Elec. #728
Johnson County Elec. #500
West Plains Elec. #501
Page 4
FEDERAL FINANCING BANK
JUNE 2001 ACTIVITY
Borrower
Glades Elec. Coop. #604
Coop. Power Assoc. #720
SjA is a Semiannual rate.
Qtr. is a Quarterly rate.
Date
6/27
6/29
Amount
of Advance
$2,000,000.00
$7,356,000.00
Final
Maturity
Interest
Rate
1/03/34
12/31/35
5.578% Qtr.
5.584% Qtr.
Page 5
FEDERAL FINANCING SANK HOLDINGS
(in millions of dollars)
Program
June 30, 2001
May 31, 2001
Monthly
Net Change
Fiscal Year
Net Change
6/1/01- 6/30/01
10/1/00- 6130/01
Agency Debt:
U.S. Postal Service
National Credit Union Adm.-ClF
Subtotal*
$5,467.7
$0.0
$5,467.7
$5,889.0
$0.0
$5,889.0
-$421. 3
$0.0
-$421. 3
-$3 ,794. 3
$0.0
-$3 ,794.3
Agency Assets:
FmHA-RDIF
FmHA-RHIF
DHHS-Medical Facilities
Rural Utilities Service-CSO
Subtotal *
$2,930.0
$5,155.0
$0.2
$4 270.2
$12,355.4
$3,070.0
$5,155.0
$0.2
$4,270.2
$12,495.4
-$140.0
$0.0
$0.0
$0.0
-$140.0
-$480.0
-$385.0
-$0.4
-$56.7
-$922.1
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*
$2,238.5
$24.7
$9.3
$1,278.7
$2,274.8
$13.6
$949.1
$13,483.1
$137.2
$3.4
$20,412.3
$2,258.1
$23.7
$9.6
$1,278.7
$2,290.6
$13.6
$949.1
$13,380.7
$139.8
$3.5
$20,347.3
-$19.6
$1. 0
-$0.3
$0.0
·$15.8
$0.0
$0.0
$102.3
-$2.6
$0.0
$65.0
-$152.0
$4.0
-$1. 5
-$69.8
-$37.8
-$1.1
-$98.4
$493.6
-$22.0
-$0.1
$115.0
========
======
=====~=====
==========
$38,235.4
$38,731. 7
-$496.3
-$4,601. 4
Grand total*
* figures may not total due to rounding
+ does not include capitalized interest
1
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS e1500 PENNSYLVANIA AVENUE. N. W. e WASHINGTON. D.C.e 20220. (202\ 622·2960
FOR IMMEDIATE RELEASE
October 4, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY TO AUCTION $6,000 MILLION OF 9-YEAR 10-MONTH NOTES
The Treasury will auction $6,000 million of 9-year 10-month 5% notes to be
issued October 5, 2001.
NOTE: The auction will be held today, October 4, 2001, with closing times for
receipt of noncompetitive and competitive tenders at 12:00 noon and 1:00 p.m. eastern
time, respectively. Tenders for notes to be held on the book-entry records of
Treasu£rDirect will not be accepted.
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 will be conducted
tive and noncompetitive awards will
tenders.
The allocation percentage
be rounded up to the next hundredth
in the single-price auction format.
All competibe at the highest yield of accepted competitive
applied to bids awarded at the highest yield will
of a whole percentage point, e.g., 17.13%.
The notes 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 BookEntry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as amended) .
Details about the security are given in the attached offering highlights.
000
Attachment
PO-656
For press releases, speeches, public schedules alld official biographies, call our 24-llOur fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERING TO THE PUBLIC OF
9-YEAR 10-MONTH 5% NOTES TO BE ISSUED OCTOBER 5, 2001
October 4, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,000 milll.on
Public Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,000 million
Description of Offering:
Term and type of security . . . . . . . . . . . . . . . . . . . . . 9-year 10-month notes (reopening)
Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-2011
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912827 7B 2
Auction date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . October 4, 2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . October 5, 2001
Dated date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . August 15, 2001
Maturl.ty date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . August 15, 2011
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5%
Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
Interest payment dates . . . . . . . . . . . . . . . . . . . . . . . . February 15 and August 15
Amount currently outstanding . . . . . . . . . . . . . . . . . . $12,046 million
Minimum bid amount and multiples . . . . . . . . . . . . . . $1,000
Accrued interest payable by investor .......... $6.92935 per $1,000 (from August 15 to
October 5, 2001)
Premium or discount . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
STRIPS Information:
Minimum amount required . . . . . . . . . . . . . . . . . . . . . . . $1,000
Corpus CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . 912820 GL 5
Due date(s) and CUSIP number(s)
for additional TINT(s) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Submission of Bids:
Noncompetitive bids:
Accepted in full up to $5 million 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 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 liml.t.
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.
I
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 daylight saving time on auction day.
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day.
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date.
D-E PAR T MEN T
0 F
·
-
THE - T R E A':S U ,R
ornCE Of PCBUC AFFAIRS -1500 PENNSYLVANIA AVENUE. :\.W. - WASHJ!\GTO!\. D.C..
For Immediate Release
October 4, 2001
20~~O
~
-
.
V"~
•
I ~o~ i ti~~-~tjti(l
Contact Tony Fratto
202-622-2960.
G7 PRESS ANNOUNCEMENTS
PRE-G7 PRESS CONFERENCE
Treasury Secretary Paul O'Neill will host a press conference in advance of this
weekend's meeting of the Group of Seven Finance Ministers in Washington.
The press conference will take place on Friday, October 5, 2001 at 11 :00 AM in
th
the Diplomatic Reception Room in the Treasury Building located on 15 & F
Street, NW.
NOTE: This press conference will only be open to members of the media
currently holding Treasury, White House and State Department passes.
G7 PRESS CONFERENCE
On Saturday, October 6, 2001, Secretary O'Neill will join G7 Finance Ministers
for a Joint G7 Press Conference.
The press conference will begin at approximately 6:00 PM at the Ronald Reagan
Building and International Trade Center at 1300 Pennsylvania Avenue, NW;
media should use the 14th Street entrance at the center of the building.
Please allow sufficient time to pass through security.
NOTE: This press conference will be open to members of the media who
have successfully applied for and received G7 press credentials.
Credentials may be picked up in advance on Thursday, October 4th and
Friday, October 5th at the Metropolitan Square Building, 6th Floor, located
on the corner of F and 15th Streets, NW.
Credentials may also be picked up on Saturday, October 6th between 3:306:00PM at the Ronald Reagan Building, 14th Street entrance.
•
No additional applications for G7 Press Credentials will be accepted.
PO-6S7
For press releases. speeches. public schedules and official biographies. call our 24-hollr fax linc at (202) 622-2(HO
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR RELEASE AT 3:00 PM
Contact: Peter Hollenbach
(202) 691-3502
October 4,2001
PUBLIC DEBT ANNOUNCES ACTIVITY FOR
SECURITIES IN THE STRIPS PROGRAM FOR SEPTElVIBER 2001
The Bureau of the Public Debt announced activity for the month of September 2001, of securities within the
Separate Trading of Registered Interest and Principal of Securities program (STRIPS).
Dollar Amounts in Thousands
Plincipal Outstanding
(Eligible Securities)
$2,045,355,074
Held in Unstripped Form
$1,872,883,925
Held in Stripped Form
$172,471,l49
Reconstituted in September
$7,605,047
The accompanying table gives a breakdown of STRIPS activity by individual Joan 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.pubIicdebt.treas.gov.Awide range of information about the public debt and Treasury
securities is also available at the site.
000
PO-658
www.publicdebt.treas.gov
TABLE V - HOLDINGS OF TREASURY SECURITIES IN STRIPPED FORM, SEPTEMBER 30 , 2001
Corpus
Treasury Bonds·
CUSIP
912810DM7
008
DR6
DUg
DN5
DPO
DS4
OT2
DV7
DW5
DX3
DYI
DZ8
EA2
EBO
EC8
E06
EE4
EFl
EG9
EH7
EJ3
EKO
EL8
EM6
EN4
Amount Outstanding in Thousands
STRIP
CUSIP
Loan Description
Maturity Date
Total
Outstandinq
Portion Held in
Unslripped Form
Portion Held in
Stripped Form
Reconstituted
This Month
Interest Rate:
EPg
EQ7
ES3
ETI
EV6
EW4
EX2
EYO
Ell
FAI
FB9
FE3
FFO
FG8
FJ2
FM5
FP8
11-5/8
12
10-3/4
912803 AB9
ADS
AG8
05/15/05
AJ2
02115/06
9-3/8
9-7/8
912800 M7
912803 Ml
AC7
AE3
9-1/4
AFO
7-1/4
AH6
AK9
AL7
AM5
AN3
AP8
A06
AR4
AS2
ATO
AU7
AV5
AW3
AXl
AY9
AZ6
BAO
B88
BG6
B04
BE2
BF9
BG7
BH5
RJl
BK8
BL6
BM4
BP7
BV4
BW2
GG6
CH4
GK7
11-3/4
11-1/4
10-5/8
7-1/2
8-3/4
8-7/8
9-1/8
9
8-7/8
8-1/8
8-1/2
8-3/4
8-314
7-7/8
8-1/8
8-1/8
8
7-1/4
7-5/8
7-1/8
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
6-1/8
6-114
5·3/3
11/15/04
08/15/05
11115/14
02115/15
08115/15
11115/15
02115/16
05115/16
11115/16
05115/17
08/15/17
05115/18
11/15/18
02115/19
08115/19
02115/20
05115/20
08/15(20
02115/21
05115/21
08115/21
11/15/21
08115/22
11115/22
02115/23
08115/23
11115/24
02115/25
08115/25
02115/26
08115/26
11/15/26
02115/27
08115/27
11115/27
08115/28
11115/28
02115/29
08/15/29
05115/30
02/15/31
Total Treasury Bonds.
Treasury Inllation-Indexed Noles
CUSIP.
Series:
Interest Rate.
3-5/8
9128273A8
J
3-3/8
2M3
A
3-5/8
3T7
A
4Y5
A
3-7/8
4-114
5W8
A
6R8
A
3-1/2
9128208Z9
BV8
CL9
DN4
EK9
GA9
07/15/02
01115/07
01115/08
01115/09
01/15/10
01115/11
Total Inflation-Indexed Notes ....
Treasury Inflalion-Indexed Bonds
CUSIP
Interest Rate
912810 FD5
3-5/8
FH6
3-7/8
Total Inflation-Indexed Bonds ..
912803
B~j2
04/15/28
CF8
04115/29
8,301,B06
4,260,758
9,269,713
4,755,916
6,005,584
10,808,299
4,063,916
5,641,859
5,697,754
18,823,551
18,824.448
15,644,169
11,696,358
7,072,439
7,614,470
13,744,498
19,015,932
9,781,268
8,057,183
17,724,306
10,217,573
10,218,788
10,067,482
30,697,194
10,237,790
7,746,626
16,202,061
22,659,044
9,704,162
10,454,170
11,410,207
12,837,916
9,683,418
10,993,177
10,210,971
9,965,756
22,046,339
11,776,201
10,947,052
11,350,341
11,178,580
17,043,162
16.427,643
4,651,406
l,779,40B
5,553,813
4,536,428
2,083,984
7,255,350
3,327,503
3,449,409
5,257,931
18,562,713
17,266,018
8,499,784
8,599,377
2,886,039
3,124,670
8,356,098
113,148,505
7.777,220
3,070,823
8,536,066
9,326,973
5,980,483
8,741,122
13,824,584
9,085,091
3,953,176
10,092,661
19,540,268
3,439,682
3,506,569
7,076,710
11,245,916
7,649,218
5,354,477
6,981,771
7,610,156
11,805,739
11,208,551
10,338,652
11,005,941
10,643,780
16,828,026
16,318,848
3,650,400
2,481,350
3,715,900
219,488
3,921,600
3,552,949
736,413
2,192,450
439,823
260,838
1,558,430
7,144,385
3,096,981
4,186,400
4,489,800
5,388,400
867,427
2,004,048
4,986,360
9,188,240
890,600
4,238,305
1,326,360
16,872,610
1,152,699
3,793,450
6,109,400
3,118,776
6,264,480
6,947,601
4,333,497
1,592,000
2,034,200
5,638,700
3,229,200
2,355,600
10,240,600
567,650
608,400
344,400
534,800
215,136
108,800
75,200
16,000
94,400
0
76,800
281,480
116,240
106,400
140,400
216,490
123,800
131,680
129,000
49,600
210,000
427,900
164,540
301,400
74,480
582,280
17,600
12,000
221,120
302,950
58,800
283,200
334,400
251,008
38,600
74,800
166,175
396,300
1,020,000
29,600
86,000
50,800
334,600
63,600
17,000
61,600
49,800
0
0
510,879,885
364,280,939
146,598,946
7,188,043
18,640,526
17,655,861
18,472,531
17,213,073
11,944,861
11,220,507
18,640,526
17,655,861
18,362,651
17,213,073
11,944,861
11,220,507
0
0
109,880
0
0
0
0
0
0
0
0
0
95,147,358
95,037,478
109,880
0
18,447,977
21,296,520
18.447,977
21,161,541
0
0
134,979
0
39,744,497
39,609,518
134,979
0
T ABLE V· HOLDINGS OF TREASURY SECURITIES IN STRIPPED FORM, SEPTEMBER 3D, 2001 - Continued
Loan Description
Treasury Notes:
CUSIPSeries:
912827 l88
P
5R9
AE
025
D
2C5
Q
2El
R
2G6
C
5X6
R
2L5
0
6A5
S
2P6
E
683
T
2S0
F
6Cl
U
A
F49
2Wl
G
6E7
V
2Y7
H
6F4
W
3C4
K
6HO
X
G55
3G5
6K3
3J9
611
3L4
303
6P2
3S9
600
3V2
6S6
J78
3Z3
6Ul
485
6V9
401
6W7
4H2
6Y3
4K5
6Z0
7A4
LB3
4N9
7eo
4U3
N81
5A6
P89
5F5
Q88
5MO
R87
5S7
S86
T85
609
U83
V82
SN7
W81
X80
SX5
Y55
Z62
2JO
2U5
3ED
3X8
4F6
4Vl
5G3
SN8
5Z1
6J6
6T4
7B2
8
L
Y
M
l
N
P
AC
0
AD
C
L
A
T2~2: :r~3.Sury
G~3~,C /2 12:
0
M
E
N
F
P
G
Q
H
R
S
8
J
T
K
A
E
B
F
C
G
0
H
A
B
E
C
0
F
A
B
E
C
0
B
C
0
B
C
0
B
C
B
C
B
C
t\;;:tes
Interest Rate:
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
6-1/2
6-5/8
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
5-3/4
5-5/8
5-5/8
5-1/8
5-1/2
4-3/4
6-1/4
5-1/2
4-5/8
5-1/2
4-1/4
5-3/4
4
5-1/2
4-1J4
5-3J8
3-7/8
3-7J8
5-3J4
5-1/4
3-51B
4-1J4
5-7/8
4-3/4
7-114
5-1/4
7-1/4
6
7-7/8
5-7J8
7-112
S-1/2
6-3/4
6-1/2
5-7/8
5-3/4
5-5/8
6-7f8
4-518
7
6-1/2
6-1/4
6-5/8
S-I/8
5-1/2
5-5,'8
4-3/4
5-1/2
6
6-1/2
5-3/4
5
5
Amount Outstanding in Thousands
Corpus
STRIP
CUSIP
Malurity Date
Total
Outstandino
912820 FJl
ED5
BCO
EG8
EJ2
FK8
EL7
FL6
EN3
FM4
EPa
FN2
EQ6
BOB
FP7
ES2
FQ5
ETO
FR3
EU7
8E6
FSI
FU6
CC9
FV4
CE5
CHB
FY8
CKI
FZ5
CN5
G87
BF3
CS4
Go3
CU9
GEl
CW5
GF8
OA2
GH4
OC8
GJO
GK7
BGI
DE4
GM3
OJ3
BH9
om
BJ5
OU8
BK2
oZ7
BLO
EE3
BM8
BNS
ER4
BPI
B09
FXO
BR7
BS5
GG6
BT3
BUO
BWS
BX4
CA3
C08
CYI
oKO
DV6
EAl
EM5
FT9
GC5
GL5
10/31/01
10131/01
11115/01
11/30/01
12131/01
01131/02
01131/02
02128102
02128102
03131/02
03131/02
04130/02
04/30/02
05115/02
05/31/02
05131/02
06130/02
06130/02
07/31/02
07131/02
08115/02
08131/02
08131/02
09130/02
09/30/02
10131/02
11130/02
11130/02
12131/02
12131/02
01131/03
01131/03
02115/03
02128/03
02128/03
03131/03
03/31/03
04130/03
04/30103
05131/03
05131/03
06/30/03
06/30/03
07/31/03
08/15/03
08115/03
08131/03
11/15/03
02115/04
02115104
05115/04
05/15/04
081t5l04
08115/04
11115/04
11/15/04
02115/05
05115/05
05115/05
08115/05
11/15/05
11115/05
02115/06
05/15/06
05115/06
07/15/06
10/15/06
02115/07
05115/07
08115/07
02115/08
05/15/08
11115/08
05115/09
08115109
02115/10
08/15/10
02115111
08115111
Portion Held in
Unstrioped Form
Portion Held in
Stripped Form
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,B90
14,871,823
13,058,694
14,320,609
12,231,057
15,057,900
23,B59,015
12,731,742
15,072,214
12,806,B14
15,144,335
26,593,892
12,120,580
15,058,528
12,052,433
14,822,027
13,100,640
15,452,604
23,562,691
13,670,354
14,685,095
14,172,892
14,674,853
12,573,248
13,338,528
13,132,243
13,331,937
13,126,779
14,671,070
16,003,270
28,011,028
19,852,263
18,665,163
18,625,785
12,955,077
17,823,228
14,440,372
18,925,383
13,346,467
18,089,80S
14,373,7S0
32,658,145
13,834,754
14,739,504
28,562,370
15,002,580
15,209,920
28,062,797
15,513,587
16,015,475
27,797,852
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
23,436,329
12,045,667
14,639,843
19,194,402
18,798,742
33,499,827
31,081,521
13,398,338
19,379,651
13,799,902
16,525,775
14,278,910
17,200,343
14,474,673
17,390,900
7,609,737
13,503,890
14,849,423
13,058,694
14,315,409
12,231,057
15,056,300
19,736,426
12,731,742
15,072,214
12,765,214
15,144,335
26,523,492
11,826,180
14,990,688
11,667,793
14,822,027
13,100,640
15,427,004
22,346,347
13,S26,354
14,685,095
14,172,092
14,674,853
12,573,248
13,338,528
13,103,843
13,331,937
13,099,579
14,671,070
16,003,270
25,794,788
19,680,263
18,665,163
17,497,085
12,215,277
17,799,228
13,557,172
18,925,383
11,576,067
18,089,806
14,364,1S0
32,658,145
13,254,214
14,739,104
28,562,370
15,002,180
14,797,080
28,035,397
15,508,107
15,599,195
27,797,852
22,700,446
22,407,675
12,992,770
13,786,511
25,188,803
13,571,812
27,124,321
25,031,925
14,778,090
27,268,394
23,352,509
22,436,994
23,430,729
12,045,667
0
1,600
5,427,360
4,800
84,800
55,008
1,600
0
37,600
22,400
37,600
0
0
4,104,660
0
22,400
0
5,200
0
1,600
4,122,589
0
0
41,600
0
70,400
294,400
67,840
384,640
0
0
25,600
1,216,344
44.000
0
800
0
0
0
28,400
0
27,200
0
0
2,21S,240
172,000
0
1,128,700
739,800
24,000
883,200
0
1,770,400
0
9,600
0
580,540
400
0
400
412,840
27,400
5,480
416,280
0
40,000
52,000
110,908
171,675
448,000
11,600
66,640
51,200
16,700
131,500
3,200
600
5,600
0
' 20<:',::03,334
1 ,?73,95~,99f)
25,'327,344
2.':~5
',,<f") ~JjJ.92'
17Z,471,HO
355.074
Reconslftuled
This Month
0
0
30,700
0
0
0
0
0
0
0
0
0
0
12,240
0
0
0
400
0
0
14,400
0
0
0
0
0
0
0
0
0
0
0
22,112'
0
0
0
0
0
0
0
0
0
0
0
0
0
0
102,400
0
0
0
0
2,400
0
0
0
23,600
0
0
0
0
800
0
41,200
0
0
0
51,552
33,600
19,200
0
0
62,400
0
0
0
0
0
0
417004
7
':-~~
047
D'F: P 'A R T 1\'1 E N T
0 F
THE ,T REA SUR Y
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.' WASHINGTON, D,C.' 20220. (202) 622·2960
EMBARGOED UNTIL 2:30 P.M.
october 4, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND' 26-WEEK BILLS
The Treasury will auction 13-week and 26-week Treasury bills totaling
$23,000 million to refund an estimated $22,968 million of publicly held 13week and 26-week Treasury bills maturing October 11, 2001, and to raise new
cash of approximately $32 million.
The Federal Reserve System holds $9,762 million of the Treasury bills
maturing on October 11, 2001, in the System Open Market Account (SOMA).
This
amount may be refunded at the highest discount rate of accepted competitive
tenders either in these auctions or the 4-week Treasury bill auction to be
held October 10, 2001. Amounts awarded to SOMA 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 $1,062 million into the 13-week bill and $1,020
million into the 26-week bill.
The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
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-659
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 OCTOBER 11, 2001
October 4, 2001
Offering Amount
Public Off8ring
$12,000 million
$12,000 million
$11,000 million
$11,000 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 JB 8
October 9, 2001
October 11, 2001
January 10, 2002
July 12, 2001
$17,077 million
$1,000
182-day bill
912795 JP 7
October 9, 2001
October 11, 2001
April 11, 2002
October 11, 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 daylight saving time on auction day
Competitive tenders ...... Prior to 1:00 p.m. eastern daylight saving 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.
PUBLIC DEBT NEWS
epartment 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
October 04, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 9-YR 10-MONTH NOTES
This issue is a reopening of a note originally issued August 15, 2001.
Interest Rate:
Series:
CUSIP No:
Issue Date:
Dated Date:
Maturity Date:
5%
C-2011
9128277B2
High Yield:
4.519%
October OS, 2001
August 15, 2001
August 15, 2011
Price: 103.783
All noncompetitive and successful competitive bidders were awarded
securities at the high yield.
Tenders at the high yield were
allotted 53.57%. All tenders at lower yields were accepted in full.
Accrued interest of $ 6.92935 per $1,000 must be paid for the period
from August 15, 2001 to October 05, 2001.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
14,175,000
225
$
°
SUBTOTAL
$
5,999,813
225
°
14,175,225
6,000,038
o
o
Federal Reserve
TOTAL
Accepted
14,175,225
$
6,000,038
Median yield
4.499%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low yield
4.400%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-cover Ratio
=
14,175,225 / 6,000,038 = 2.36
PO-660
http://www.publicdebt.treas.gov
0:
from: Department Or-Tfeasury
2026221611
I
: J)
E P \ R T \I E \ 1
() F
T II
H:>II :>/lfl w.f:Tr Pl'f
r
I"age l
Of J
T R (.: :\ S I! ({ Y
I
';
I,
1R1~SURY
NEWS
OFF1CE OF J'UBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C.• 20220 • (202) 622.-2960
FOR IM1\1fEDIATE RELEASE
10/05/01
Contact: Office of Public Affairs
(202) 622·2960
STATEMENT BY TREASURY SECRETARY PAUL H. O'NEILL
AT THE PRE·G-7 CONFERENCE
G;)od morning. Tomorrow, I will host a meeting of the G-7 Finance Ministers. We will
focus on ::wo major topics: First, Our joint attack on the financial means and fundraising systems
ofterrori~:ts and terrorist organizations and, second, on an assessment of economic conditions in
our countries after September 11.
Our 07 partners have taken steps to shut off the funds that support terrorists, and they are
eager to j :lin us in broadening our efforts to include every nation in the world. Our Russian
colleagues are joining part oftomorrow's meeting, and I look forward to their contribution.
The assault on the financial underpinnings of terrorism is a central element of the Bush
Administration's determined effort to fight terrorists with every conceivable weapon. On
Septembc:r 23, President Bush signed an executive order authorizing the Treasury Department to
freeze Uf: assets of designated individuals and organizations who fund terrorism. The President
directed us to build an international coalition to disrupt terrorist fundraising. The Treasury
Department is offering technical assistance to other nations to help them set up systems to
identify slJspicious transactions and aCcoWlts. We have had complete cooperation from our G7
partners i?nd from all comers of [he world. I thank all of them for their support.
Tile global economy was growing at a relatively low rate prior to September 11, but the
US was beginning to see signs of recovery. The attacks of September 11 were a shock to our
economy, abruptly halting activity in many sectors which will almost certainly result in a
negative growth rate in the third quarter and a delayed recovery in the United States by a quarter
or so. W,~ are taking steps to speed our path to recovery. I remain confident that our economic
fundamentals are strong and the US economy will excel in the long run.
A:; I work with our G-7 partners, I will continue to emphasize the need to reinvigorate
worldwide economic growth. Both emerging economies and the poorest countries have felt the
impact ot· global slowdown. Clearly, the reswnption of strong growth in the G7 economies will
help support the resumption of strong growth around the globe.
PO-661
For jMss relewes, speeches, public schedules and official biographier, ClJU our 24.n.owF lim: at (202) 622.2040
·u.s. GI)\IO!IfT\rller1l Ptinlillg Olfice: 1998·
6110-569
: ZW-6ZZZbl I
trom: Department Of Treasury
05715701 «5: Ii 15Ft
Earlier this year in Rome, I told my G-7 colleagues that I wanted to look at what all our
countries ~ould do to raise productivity and living standards. There is significant scope in all of
our countlies to raise our potential rates of growth. I am looking forward to a discussion of what
each OfUli can do. The enactment of Trade Promotion Authority and the launching of a new
round of multilateral trade negotiations in the WTO is an absolutely essential step in this regard
not only br the 0-7 but for all countries.
--30--
TOTRL P.02
D EPA R T l\I E N T
0 F
1REASURY
THE
T REA SUR Y
NEWS
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
October 5, 2001
Contact: Sean Miles
(202) 622-2015
PHOTO OP ADVISORY
7:30 am
Stakeout for Ministers arrival. Designated press area on East Executive Ave
in front of the Bell entrance.
12:30 pm
Working Lunch Photo. Press should assemble in designated area in front
of the Bell entrance to be escorted.
2:00 pm
Family Photo. Press should assemble in designated press area in front of
the Bell entrance to be escorted.
2:45 pm
G- 7 Meeting Photo. Press will be escorted in immediately after Family
photo.
Contact
Sean Miles. Office 202-622-2015 cell 202-841-4507.
-30-
PO-662
D EPA R T l\I E N T
0 F
THE
T REA SUR Y
NEWS
1REASURY
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
Contact: Betsy Holahan
(202) 622-2960
FOR IMMEDIATE RELEASE
October 5, 2001
MEDIA ADVISORY:
Secretary O'Neill and Treasurer Marin
Hold Official Signing Ceremony
Washington, DC - Department of the Treasury Secretary Paul H. O'Neill and U.S.
Treasurer Rosario Marin on Tuesday, October 9,2001 will participate in the official signing
ceremony for paper currency.
During the ceremony, Secretary O'Neill and Treasurer Marin will give their signatures to
be used by the Treasury's Bureau of Engraving and Printing on Series 2001 Federal Reserve
Notes, scheduled to begin public circulation in the upcoming months.
The ceremony will be held on October 9 at 1 p.m. at Main Treasury Building, Diplomatic
Room (Rm. 3311), 1500 Pennsylvania Avenue, N.W., Washington, D.C.
Media without Treasury or White House press credentials planning to attend the
ceremony should contact Treasury's Office of Public Affairs at 202-622-2960, no later than 10
a.m. on Tuesday, October 9,2001 with the following information: name, social security number
and date of birth. The Treasury Department will be closed on Monday, October 8, 2001 in
observance of Columbus Day, but this information can be faxed to 202-622-1999.
-30-
PO-663
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
For Immediate Release
October 5, 2001
Contact: Tara Bradshaw
(202) 622-2014
WEEK 12: TREASURY CONTINUES TO MAIL OUT CHECKS
Today the Treasury Department will send out nearly 190,000 advance payment checks to
taxpayers for $88.2 million in tax relief.
The Treasury Department has completed the bulk mailing of advance payment checks
that were mailed according to the last two digits of the taxpayers Social Security number. Over
the past twelve weeks, Treasury has sent out more than 83 million checks for more than $35
billion in tax relief. Treasury will continue to send out checks as extensions or late-filed returns
are processed.
-30-
PO-664
_ For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
D EPA R T l\I E N T
0 F
THE
T REA SUR Y
NEWS
1REASURY
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
October 5, 2001
Contact: Public Affairs
(202) 622-2960
Amended Media Advisory
DUE TO TREASURY RENOVATION AND LIMITED SPACE THE G- 7 WORKING
LUNCH PHOTO OP HAS BEEN CANCELED AND THE G - 7 MEETING PHOTO OP WILL BE
LIMITED TO U.S. AND INTERNATIONAL POOL WITH WHITE HOUSE OR TREASURY
PRESS PASSES. PLEASE CONTACT SEAN MILES AT 202-622-2015.
-30-
PO-665
FfYr press releases, speeches, public schedules and official biographies, call ow' 24-hour fax line at (202) 622-2040
D EPA R T l\I E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
October 5, 2001
Contact: Tony Fratto
(202) 622-2960
REGULATIONS ISSUED FOR AIR CARRIER LOAN GUARANTEE PROGRAM
OMB issued regulations today as required by the Air Transportation Safety and System
Stabilization Act, which establishes the Air Transportation Stabilization Board and authorizes it
to issue loan guarantees and other Federal credit instruments up to $10 billion. These regulations
are issued on a final basis and are effective upon pUblication.
The regulations are available on the following web site: www.omb.gov
Under the regulations:
•
The Board may enter into agreements with one or more borrowers to issue loan
guarantees only if the Board determines that the borrower is an air carrier for
which credit is not reasonably available; the intended obligation is prudently
incurred by the borrower; and such loan guarantee is a necessary part of
maintaining a safe, efficient, and viable commercial aviation system in the United
States. The Board will determine the form and terms and conditions of the
guarantee agreements into which it enters.
•
The Board must ensure that the Federal government is compensated for the risk it
assumes in making guarantees. The Board may consider the degree to which the
government can participate in the gains ofthe air carrier through warrants or other
equity instruments. This section also requires the Board to issue guarantees only
after an air carrier enters into a legal agreement with the Board regarding certain
employee compensation.
•
The borrower must demonstrate that it has incurred or is incurring losses as result
of the September 11,2001 terrorist attacks. To qualify, an air carrier's losses
cannot be covered by insurance, but the losses may be due to the unavailability of
credit on reasonable terms or the decrease in demand for the air carrier's services.
An eligible borrower must also agree to audits by the GAO and/or an independent
auditor acceptable to the Board.
PO-666
Far press releases, speeches, public schedules and official biographies, call our 24-hour fa:), line at (2{)2) 622-2040
•
The Board is authorized to issue loan guarantees and other Federal credit
instruments that, in aggregate, do not exceed $10 billion.
•
A guarantee issued by the Board must be less than 100% of the principal and
accrued interest of the guaranteed loan.
•
A guaranteed loan must be payable within 7 years from the date of the first
disbursement and have a reasonable rate of interest (as determined by the Board).
The Board shall approve or deny applications received on or before 5 p.m. EDT, June 28, 2002,
in a timely manner as such applications are received at the Board's offices: US Department of
the Treasury, 1500 Pennsylvania Avenue NW, Washington DC 20220.
Questions from applicants should be directed to the Deputy Assistant Secretary of the Treasury
for Government Financial Policy at atsb@do.treas.gov or (202) 622-7073.
Further details on the application process are contained in the regulations.
--30--
Action Plan to Combat the Financing of Terrorism
We, the G-7 Finance Ministers, have developed an integrated, comprehensive Action Plan to
block the assets of terrorists and their associates. We pledge to work together to deliver real results in
combating the scourge of the financing of terrorism.
More vigorous implementation of international sanctions is critical to cut off the financing of
terrorism. We are implementing UNSCR 1333 and UNSCR 1373, which call on all States to freeze
the funds and financial assets not only of the terrorist Usama bin Laden and his associates, but
terrorists all over the world. Each of us will ratify the UN Convention on the Suppression of Terrorist
Financing as soon as possible. We will work within our Governments to consider additional measures
and share lists of terrorists as necessary to ensure that the entire network of terrorist financing is
addressed.
The Financial Action Task Force (F ATF) should playa vital role in fighting the financing of
terrorism. At its extraordinary plenary meeting in Washington D.C., FATF should focus on specific
measures to combat terrorist financing, including:
•
•
•
Issuing special FA TF recommendations and revising the FA TF 40 Reconunendations to take into
account the need to fight terrorist financing, including through increased transparency;
Issuing special guidance for financial institutions on practices associated with the financing of
terrorism that warrant further action on the part of affected institutions;
Developing a process to identify jurisdictions that facilitate terrorist financing, and making
recommendations for actions to achieve cooperation from such countries.
Enhanced sharing of information among financial intelligence units (FlUs) is also critical to cut
off the flow of resources to terrorist organizations and their associates. We call on all countries to
establish functional FlUs as soon as possible. The G-7 countries will all join the Egmont Group,
which promotes cooperation between national FlUs, and tum around information sharing requests as
expeditiously as possible. We also call on the Egmont Group to enhance cooperation among its
members, to improve its information exchange with the FlUs in other countries, and to exchange
information regarding terrorist financing. We encourage all countries to establish a terrorist assettracking center or similar mechanism and to share that information on a cross-border basis.
Financial supervisors and regulators around the world will need to redouble their efforts to
strengthen their financial sectors to ensure that they are not abused by terrorists. We welcome the
guidance by the Basel Committee on Banking Supervision on customer identification to stop the abuse
of the financial system by terrorists and urge that it be incorporated into banks' internal safeguards. We
urge the International Monetary Fund to accelerate its efforts, in close relation with the Financial
Stability Forum, to assess the adequacy of supervision in offshore financial centers and provide the
necessary technical assistance to strengthen their integrity.
We ask all governments to join us in denying terrorists access to the resources that are needed
to carry out evil acts.
PO-667
D EPA R T l\I E N T
0 F
THE
T REA SUR Y
NEWS
1REASURY
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
Contact: Tony Fratto
(202) 622-2960
FOR IMMEDIATE RELEASE
October 6,2001
STATEMENT BY TREASURY SECRETARY PAUL O'NEILL
FOLLOWING THE MEETING OF THE G-7 FINANCE MINISTERS IN WASHINGTON
It was a pleasure to host this extraordinary meeting of G-7 Finance Ministers and Central
Bank Governors. The attacks of September 11 were not only an attack on the United States but
also an attack on all freedom-loving people. I was particularly heartened when my colleagues
suggested we stand here together today to show the world our unity of purpose and our collective
determination to disrupt the financing of terrorism.
During our meeting today, we devised a joint action plan to coordinate the efforts of our
seven nations and to broaden our efforts to include every nation in the world. Each G-7 nation
has located and frozen Taliban and bin Laden assets in accordance with UN Security Council
Resolutions 1267 and 1333. Each of us has committed to meeting the Egmont group criteria to
facilitate the sharing of information. And we are pleased that the F ATF has agreed to hold a
special session here in Washington later this month to expand its work to include combating
terrorist financing.
Our Russian colleagues joined our discussion on how to combat the financial
underpinnings of terrorism, and I look forward to their efforts in this crucial area. We are well
on the way to building an international coalition to disrupt terrorist fundraising.
We also discussed the steps each of us are taking to speed our path to growth, and I was
reminded of how valuable it is to exchange views on the appropriate policy response to the
current economic environment. We in the United States are pursuing trade promotion authority
and tax policy changes to boost consumer spending, raise business investment and rekindle
economic growth. I remain confident that our economic fundamentals are strong and the US
economy will excel in the long run. Our actions, along with the steps being taken by our G-7
partners, will soon reinvigorate global growth.
-30-
PO-668
Statement of G-7 Finance Ministers and Central Bank Governors
October 6, 2001
We met today to discuss international efforts to combat the financing of terrorism and to address
the impact oflast month's terrorist attacks on the global economy.
We stand united in our commitment to vigorously track down and intercept the assets of
terrorists and to pursue the individuals and countries suspected of financing terrorists. We will
implement UN sanctions to block terrorist assets. We are encouraged by the number of countries
throughout the world that have already joined in international action to wage a successful fight against
the fmancing of terrorism. We appreciate their efforts. We welcome the decision by the Financial
Action Task Force to hold an extraordinary plenary session in Washington on October 29 and 30 to
expand its mandate to combat terrorist financing. We will work together to implement our Action Plan
which we release today.
Last month's terrorist attacks could delay the resumption of strong growth in our economies.
Decisive action has already been taken to support a robust recovery. Notwithstanding remaining shortterm uncertainties, we are confident about our future prospects. We are strongly committed to
bringing forward needed measures to increase economic growth and preserve the health of our
financial markets. We will continue to monitor exchange markets closely and cooperate as appropriate.
Emerging market and developing economies have felt the effects of the slowdown in our
economies and could be affected by uncertainty following last month's terrorist attacks. The prospects
of the poorest countries could be damaged, and we will take the necessary steps to mitigate these
impacts. Those countries adversely impacted by recent developments should also create the conditions
for strong economic growth and sustained private capital flows, and the international financial
institutions stand ready to assist.
We also discussed the opportunities flowing from greater interactions and linkages among the
world's people. We agreed that greater global economic integration brings large benefits. Key to
raising living standards and reducing poverty is increasing productivity growth and raising the rate of
potenti2.1 growth. We will do so by promoting free trade and regulatory reform, strengthened capital
markets, and enhanced educational opportunity. We thus reaffirm our support for the launch of a new
Round of trade negotiations at the upcoming WTO Ministerial.
Greater economic integration brings with it new challenges, requiring increased international
cooperation to support sound governance and strong institutions. We will continue to take steps to
address dislocations associated with economic adjustment and work to ensure that all can benefit from
integration, including through well-targeted and well-coordinated development assistance, effective
implementation of the HIPe Initiative, and poverty reduction strategies.
We welcome Russia's continued economic growth, progress on reform, and ratification of new
anti-money laundering legislation. We look forward to additional progress in the financial sector and
to an improved investment climate to help sustain growth throughout Russia.
PO-669
D EPA R T l\I E N T
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THE
1REASURY
T REA SUR Y
NEWS
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
10/09/01
u.s. International Reserve Position
The Treasmy Department today released u.s. reserve assets data for the week ending September 14, 2001. As indicated in
this table, U.S. reserve assets totaled $68,419 million as of September 14, 2001, up from $67,477 million as of September
7,2001.
(in US millions)
TOTAL
1. Foreign Currency Reserves
r
1
Euro
5,501
a. Securities
SeQtember 141 2001
SeQtember 7 z 2001
67,477
I. Official U.S. Reserve Assets
Yen
10,977
68,419
TOTAL
Euro
16,478
5,330
Yen
TOTAL
11,228
16,558
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.
b.ii. Of which, banks located abroad
b.iii. Banks headquartered outside the U.S.
b.iii. Of which, banks located in the U.S.
2. IMF Reserve Position
2
3. Special Drawing Rights (SDRs)
4. Gold Steck 3
5. Other Reserve Assets
2
9,265
4,753
14,018
9,713
4,862
14,575
0
0
0
0
0
0
0
0
15,140
15,317
10,799
10,926
11,044
11,044
0
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
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 SDR/doliar exchange rate for the reporting date. The IMF data for September 7 are final. The entries in the table
above for September 14 (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 $42.2222 per fine troy ounce. Values shown are as of July 31,2001. The June 30, 2001 value was
$11,044 million.
PO-670
Far press releases, speeches, public schedules and official biographies, .call our 24-hour fa;, line !JEt (202) 622·2{)4l}
·U.S. Governmenl Prlnllnq Office 1998· il1S·559
U.S. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
September 7,2001
1. Foreign currency loans and securities
September 14, 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
3. Other
o
III. Contingent Short-Term Net Drains on Foreign Currency Assets
September 7,2001
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.
~. 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
September 14,2001
o
o
o
o
o
o
o
o
D EPA R T l\I E N T
0 F
THE
T REA SUR Y
NEWS
1REASURY
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
10/09/01
U.S. International Reserve Position
The Treasury Department today released
u.s. reserve assets data for the week ending September 21,2001.
As indicated in
this table, u.s. reserve assets totaled $70,855 million as of September 21,2001, up from $70,518 million as of September
14,2001.
(in US millions)
Se~tember
I. Official U.S. Reserve Assets
TOTAL
1. Foreign Currency Reserves
a. Securities
I
1
Se~tember
142 2001
70,518
Euro
5,330
Yen
11,228
Of which, issuer headquartered in the U. S.
21: 2001
70,855
TOTAL
Euro
16,558
5,274
Yen
TOTAL
16,693
11,419
0
0
b, Total deposits with:
b.i. Other central banks and BIS
b,ii. Banks headquartered in the U.S.
9,713
4,862
14,575
9,615
14,375
4,760
0
0
bji. Of which, banks located abroad
0
0
b.iii. Banks headquartered outside the U.S.
0
0
0
0
17,547
17,796
10,795
10.948
11,044
11,044
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
3
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 (SDRsJ," are based on data provided by the IMF and are valued in
dollar terms at the official SDR/dollar exchange rate for the reporting date. The IMF data for September 14 are final. The entries In the table
above for September 21 (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 $42.2222 per fine troy ounce. Values shown are as of July 31. 2001. The June 30, 2001 value was
$11.044 million.
_ For press releases, speeches, public schedules :and official biographies, call our 24-hour fa::: line at (202) 622..2040
·U.S. Governmenl PnntlnQ 01lle2 ',998· 019·559
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
September 14, 2001
1. Foreign currency loans and securities
September 21, 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.a. Short positions
2.b. Long positions
3. Other
o
o
III. Contingent Short-Term Net Drains on Foreign Currency Assets
September 21,2001
September 14. 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.
~. 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
o
o
o
o
o
o
o
D EPA R T l\I E N T
0 F
THE
T REA SUR Y
NEWS
1REASURY
178~9:""• • • • • • • •
OmCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
10/09/01
u.s. International Reserve Position
The Treasury Department today released u.s. reserve assets data for the week ending September 28,2001. As indicated in
this table, U.S. reserve assets totaled $70,382 million as of September 28,2001, down from $70,782 million as of
September 21,2001.
(in US millions)
21 z 2001
70,782
TOTAL
1. Foreign Currency Reserves
Se~tember 28 z 2001
Se~tember
I. Official U.S. Reserve Assets
[
1
a. Securities
Of which, issuer headquartered in the U.S.
Euro
5,274
Yen
11,419
70,382
TOTAL
Euro
16,693
5,281
b.ii. Of which, banks located abroad
b.Ni. Sanks headquartered outside the U.S.
b.iii. 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
TOTAL
11,306
16,587
0
0
b. Total deposits with:
b). Other central banks and SIS
b.ii. Sanks headquartered in the U.S.
Yen
9,615
4,760
14,375
9,623
4,535
14,157
0
0
0
0
0
0
0
0
17,722
17,676
10,948
10,919
11,044
11,044
0
0
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 (SDRs}," are based on data provided by the IMF and are valued in
dollar terms at the official SDRIdollar exchange rate for the reporting date. The IMF data for September 21 are final. The entries in the table
above for September 28 (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 $42.2222 per fine troy ounce. Values shown are as of August 31, 2001. The July 31 2001 value was
$11,044 million.
PO-672
For press releases, speeches, public schedules {1;nd official biDgraphies, cail our 24-hour fax li.ne at (202) 622-2{)4{)
U,s. GovernmenlPflnlln(j 011lC8. 1998· 619-559
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
September 21. 2001
1. Foreign currency loans and securities
September 28, 2001
o
a
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
a
III. Contingent Short-Term Net Drains on Foreign Currency Assets
September 28, 2001
September 21. 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
o
o
o
o
o
o
a
o
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N. W .• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 11:30 A.M.
october 9, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $6,000 million to
be issued October 11, 2001.
Tenders for 4--week Treasury bills to be held on the book-entry records of
TreasuryDirect will not be accepted.
The Federal Reserve System holds $9,762 million of the Treasury bills
maturing on October 11, 2001, in the System Open Market Account (SOMA). This
amount may be refunded at the highest discount rate of accepted competitive
tenders in this auction up to the balance of the amount not awarded in today's
13-week and 26-week Treasury bill auctions.
Amounts awarded to SOMA will be in
addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International
Monetary Authori ty (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 allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP) , if they meet or exceed the reporting
threshold.
However, Treasury will not include NLPs in the calculation of award
limits for those bidders.
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-673
_ For press releases, speeclJes, public sclJedules and official biographies, elill ollr 24-/rollr fax lil/e at (JUJ) 62J-2040
HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED OCTOBER 11, 2001
October 9, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . $6,000 million
Public Offering . . . . . . . . . . . . . . . . . . . . . $6, 000 million
Description of Offering:
Term and type of security ........... 28-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . 912795 GT 2
Auction date . . . . . . . . . . . . . . . . . . . . . . . . October 10, 2001
Issue date ............... ' ........... October 11, 2001
Ma turi ty date . . . . . . . . . . . . . . . . . . . . . . . November 8, 2 a 0 1
Original issue date . . . . . . . . . . . . . . . . . May 10, 2001
Currently outstanding . . . . . . . . . . . . . . . $33,508 million
Minimum bid amount and multiples .... $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 three decimals in
increments of .005%, e.g., 4.215%.
(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 daylight saving time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank
on issue date.
PUBLIC DEBT NEWS
partment 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
October 09, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
October 11, 2001
January 10, 2002
912795JB8
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
2.180%
Investment Rate 1/:
Price:
2.222%
99.449
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 21.32%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
22,629,545
1,419,917
338,000
$
Federal Reserve
4,122,181
4,122,181
$
28,509,643
10,242,162
1,419,917
338,000
12,000,079 2/
24,387,462
SUBTOTAL
TOTAL
Accepted
Tendered
$
16,122,260
Median rate
2.150%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
2.100%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
id-to-cover Ratio = 24,387,462 /
12,000,079 = 2.03
/ Equivalent coupon- issue yield.
/ Awards to TREASURY DIRECT = $1,167,911,000
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
Office of Financing
202-691-3550
october 09, 2001
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182 -Day Bill
October II, 2001
April 11, 2002
912795JP7
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
2.150%
Investment Rate 1/:
2.204%
Price:
98.913
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 16.94%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Accepted
Tendered
competitive
Noncompetitive
FlMA (noncompetitive)
$
SUBTOTAL
26,548,720
1,282,269
150,000
$
11,000,139 2/
27,980,989
Federal Reserve
4,280,368
4,280,368
TOTAL
$
32,261,357
9,567,870
1,282,269
150,000
$
Median rate
15,280,507
2.120%: 50% of the amount of accepted competitive tenders
Low rate
2.080%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
as tendered at or below that rate.
id-to-cover Ratio
I
I
=
27,980,989 / 11,000,139
=
2.54
Equivalent coupon-issue yield.
Awards to TREASURY DIRECT = $1,082,529,000
http://www.publicdebt.treas.gov
PO-675
NEWS
TREASURY
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C .• 20220. (202) 622-2960
Contact:
For Immediate Release
Wednesday, October 10, 200l
Rob Nichols
(202)-622-2910
Media Advisory
Deputy U.S. Treasury Secretary Ken Dam will join House Republican Policy
Committee Chairman Christopher Cox, and other Members of House Leadership for a
press availability at 10:00 am on Thursday, October 11th in the Hal1 of Columns stakeout
area in the House side of the U.S. Capitol.
This press availability will follow Dam's meeting with the House Republican
Policy Committee, a 46 member organization consisting of the Elected Leadership of the
House, key committee Chaim1en, and other Members elected by their colleagues from
geographical regions and Congressional classes.
-30-
PO-676
F1)T press releases, speeches, public schedules and o.ificia1 biographie§, call our 24-hour fax lim eu; (202) S22-21J40
'U S Gr,-vemmenl p[jf\trrill Olfrce 1998·819-559
PUBLIC DEBT NEWS
epartment 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
October 10, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
28-Day Bill
October 11, 2001
November 08, 2001
912795GT2
High Rate:
2.250%
Investment Rate 1/:
Price:
2.285%
99.825
All noncompetitive and successful competitive bidders were awarded
securities at the ~igh rate.
Tenders at the high discount rate were
allotted 29.04%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
19,285,000
10,489
5,989,584
10,489
o
SUBTOTAL
$
°
19,295,489
6,000,073
1,359,229
1,359,229
Federal Reserve
TOTAL
$
20,654,718
$
7,359,302
Median rate
2.240%: 50% of the amount of accepted competitive tenders
,as tendered at or below that rate.
Low rate
2.190%:
5% of the amount
)f accepted competitive tenders was tendered at or below that rate.
lid-to-Cover Ratio
=
19,295,489 /
6,000,073
=
3.22
/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
PO-677
PUBLIC DEBT NEWS
epartment 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
october 10, 2001
RESULTS OF TREASURY'S AUCTION
Interest Rate:
Series:
CUSIP No:
TIIN Conversion
OF
6-MO
INFLATION-INDEXED BONDS
Issue Date:
Dated Date:
Maturity Date:
9.507042254 1/
3 3/8%
APRIL 2032
912810FQ6
Factor per $1,000
High Yield:
30-YR
3.465%
Office of Financing
202-691-3550
Price:
October 15, 2001
October 15, 2001
Ap r i 1 15, 2 03 2
98.314
All noncompetitive and successful competitive bidders were awarded
securities at the high yield.
Tenders at the high yield were
allotted
79.48%.
All tenders at lower yields were accepced in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
s
Competitive
Noncompetitive
FIMA (noncompetitive)
11,069,135
87,644
$
4,912,367
87,644
o
o
SU'3TOTAL
5,000,011 2/
11,136,779
Federal Reserve
o
°
TOTAL
Median yield
Accepted
Tendered
Tender Type
$
11,156,779
$
5,000,011
3.420%:
50% of the amount of accepted competitive tenders
Low yield
3.300%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
was tendered at or below that rate.
Bid-to-Cover Ratio = 11,156,779 /
5,000,011
=
2.23
1/ This factor is used to calculate the AdJusted Values fo~ any TIIN face
amount and will be maintained to 2-decimals on Book-entry systems.
2/Awards to TREASURY DIRECT = $15,842,000
http://www.publicdebt.treas.gov
~O-6 78
DEPARTMENT
OF
TREASURY
THE
TREASURY
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
TEXT AS PREPARED
EMBARGOED Until 8 PM October 10,2001
Contact: Michele Davis
(202) 622-2920
PREPARED REMARKS FOR
TREASURY SECRETARY PAUL O'NEILL
BEFORE THE NATIONAL FOREIGN TRADE COUNCIL
OCTOBER 10, 2001
NEW YORK, NY
It's wonderful to see all of you gathered here tonight The fact that you are all here,
resuming your nonnal lives, is commendable. And it is further evidence that the American
people stand stronger than ever, with greater resolve to succeed, in the aftermath of the terrorist
attacks last month.
This nation, its people, and its economy will continue to excel.
That does not mean that our economy today is everything we would like it to be.
Our economy began slowing in the summer of2000, and only recently began to show
signs of recovery. In the third quarter of this year, leading up to September 11, I believe the
economy was running at a low rate of growth and was likely to have concluded the quarter with a
small but still positive gTowth rate.
return
•
•
•
•
The fourth quarter prospects were somewhat better and the outlook for 2002 suggested a
to normal growth rates as the economy fclt the impact of:
The stimulus to consumer spending from the tax rebates.
Aggressive Federal Reserve easing during the first eight months of the year.
The reduction of excess inventories, paving the way for future production gains.
The easing of energy prices.
All of that changed dramatically on September 11. Terrorists took down the symbols of
America's prosperity and they left us all with a heartache that will take some time to fade away.
On the economic front, the terrorist attacks sent shockwaves through our economy very
quickly. Our airways were shut down and all of the travel-associated industries effectively came
to a halt. Consumers stayed home, glued to the television news and in no mood to shop.
As a consequence, it now seems certain that when the numbers are tallied for the third
quarter, they will show that our economy experienced negative real growth.
PO-679
!.orpress releases, speeches, public schedules and official biographies, call our 24-lwur fax line.at (202) 622-2040
u.s. Govemmenl PClnllna Othce.
1998· 619·559
We should also expect unemployment numbers to rise, as they are a lagging indicator of
our economic activity. That is true no matter what we in Washington do to boost economic
growth.
The depth of this contraction, as well as the pace at which the economy returns to a
healthy rate of growth, will depend in large part on how fast consumers regain their confidence
and on our success in incorporating new protections against possible terrorist acts without
material reductions in productivity.
The fourth quarter numbers will depend on how quickly consumer confidence rebounds.
I'm happy to report that I flew to New York on the shuttle from National Airport to LaGuardia
today - that was a heartening return to nonnalcy. And we are seeing concrete signs that we are
begirming to regain our economic footing. Consumers are returning to the stores, airline usage is
increasing and there are buyers again for 'big ticket' goods such as automobiles.
i\nd we are seeking legislation to support an economic recovery. The President has asked
me to work with Congress to produce a $60-75 billion economic growth package to restore
consumer spending, boost business investment and help those directly affected by the September
11 attacks. We've already taken actions that will inject more than $55 billion of spending into
the economy this year. Together, the spending in the pipeline and the growth package we are
currently negotiating will sum to more than S 100 billion, meeting the standard many have set
that in order to have the appropriate impact on the economy the fiscal impact of an economic
growth package should approximate 1 percent ofGDP.
The President believes, and there seems to be broad bipartisan agreement in the Congress,
that we should take care not to put upward pressure on long-tcrn1 interest rates. That does not
mean that all policy changes should be limited to one year. We shouldn't be measured by greeneyeshade budget numbers, but rather we should be judged on whether or not we put together a
package that has a clear impact on economic growth. A strong and vibrant economy provides
the best hope for returning to budget surpluses - it doesn't work the other way around. Our
long-term prosperity depends on continued investment to enhance productivity in every sector of
our economy.
To boost consumer spending, the President has said he would like to accelerate individual
income tax rate cuts that are currently scheduled to go into effect in 2004. The budget impact of
that acceleration would be temporary, but it would have the same impact on consumers as a
pennanent change. The President has also said he will work with Congress to put money in the
pockets of low- and middle-income people.
On the business investment side, there is bipartisan support in Congress for accelerating
depreciation or expanding expensing. In order to have the greatest possible impact on
investment, these changes need to be permanent.
'vVe also must eliminate the corporate Alternative :NIinimul11 Tax, which increases the tax
burden on employers during an economic downturn, making it more difficult to continue
investing and contributing to an economic recovery.
There has been enormous bipartisan cooperation so far to do what needs to be done to
recover from and respond to the terrorist attacks of September 11. Members of Congress are
willing to set aside rhetoric and get our economy back on track. That same bipartisan spirit
should extend to Trade Promotion Authority for the President.
Expanding global markets is crucial to growth and job creation here at home. And
expanded trade is also crucial to the economies in southern Asia and the Middle East, where the
economies are likely to be impacted as the world takes on terrorism. We must take steps to
support those developing economies, as they endure difficult times that they could not have
anticipated. Developing nations are being heavily impacted by the global economic downturn,
as a W orId Bank report released October 1 pointed out, and slower growth in world trade is
exacerbating the impact. Enacting TPA, and promoting opcn markets around the world, is vital if
the United States is going to help to mitigate the economic harm done to emerging market
nations.
I've said before, our world is more interconnected than we realize. At no time is that more
obvious than now, as the President builds an international coalition to take on terrorism. We will
succeed in defeating terrorism if we can engage the civilized nations of the world to join us in a
determined effort.
I have no doubt that we will succeed. Call it my enduring optimism about An1erica. Our
nation has risen to every challenge and our strength of spirit will prevail once again.
Thank you.
-30-
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
__-----a....::/
7S9c....1-_ _ _ _ _ _ _ _•
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C .• 20220. (202) 622-2960
u.s. International Reserve Position
October 11; 2001
The Treasury Department today released US. reserve assets data for the week ending October 5,2001. i\s indicated in
this table, US. reserve assets totaled $71,063 million as of October 5, :2001, down from $71,111 million as of September
28,2001.
lin US mil/ions)
I
! L Official U.S. Reserve Assets
I
1
September 28. 2001
TOTAL,-_________7_1._1_1_1________
1. Foreign Currency Reserves
I
1
E'Jrr,
a. Securities
Y·?n
; ~ ,300
11
October 5. 2001
~----------71-.-0-63---------
TOTAL
Euro
'10,50'
;),330
Yen
TOT,~L
lOA Id
o
15,154
o
b. Total deposits with:
b.i. Other central banks and BIS
],623
b.ii. Banks headquartered in the U.S.
b.ri. r)f which. banKs located at::rQad
b.iii. Banks headquartered outside the U. s.
'J III ,::Jf ·,vrrlc,1. Janks ,'ocated In the ,J.S.
2. IMF Reserve Position
2
3. Special Drawing Rights (SDRs)
t Gold Stock
3
i. Other Reserve Assets
2
4,535
14,157
9,703
5,272
0
0
0
0
0
0
0
0
18,404
18,383
10,919
10,907
11,044
11,044
0
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-la-market values, and
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 SDRJdollar exchange rate for the reporting date. The IMF data for September 28 are final. The entnes in the table
above for October 5 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasurf to the prior week's IMF
data.
3/ Gold stock IS valued monthly at $42.2222 per fine troy ounce. Values shown are as of August 3 ~ ,2001. The July 31, 2001 'falue Nas
)11,044 million.
'-680
14,976
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
September 28, 2001
1. Foreign currency loans and securities
October 5, 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.a. Short positions
2.b. Long positions
3. Other
o
o
III. Contingent Short-Term Net Drains on Foreign Currency Assets
September 28, 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 .
. 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
October 5, 2001
o
o
o
o
a
o
o
o
0
<D
Ol
federal financing
WASHINGTON, D.C.
20220
S
t;J
N
N
9
N
L()
~
N
N
N
9
0
N
If)
If)
N
N
0
tIl
!l: u.
a.. u.
FEDERAL FINANCING BANK October 11, 2001
Kerry Lanham, Secretary, Federal Financing Bank (FFB) ,
announced the following activity for the month of July 2001.
FFB holdings of obligations issued, sold or guaranteed by
other Federal agencies totaled $37.5 billion on July 31, 2001,
posting a decrease of $725.5 million from the level on June 30,
2001. This net change was the result of an increase in holdings
of government-guaranteed loans of $0.3 million, and a decrease In
holdings of agency debt of $590.6 million and in holdings of
agency assets of $135.2 million.
The FFB made 99 disbursements and received 86 prepayments
during the month of July.
Also, Arizona Electric Power
Cooperative Inc., split into separate generation and transmission
companies.
Consistent with this corporate action, the FFB split
the outstanding debt into two new promissory notes with a portion
of the former debt going to each of the two companies. This
resulted in an additional 108 loan records and 54 prepayment
records. In addition, the FFB extended the maturities of 89 loans
guaranteed by the Rural Utilities Service.
Attached to this release are tables presenting FFB July loan
activity and FFB holdings as of July 31, 2001.
PO-681
0
Page 2
FEDERAL FINANCING BANK
JULY 2001 ACTIVITY
Date
Borrower
Amount
of Advance
Flnal
Maturity
Interest
Rate
AGENCY DEBT
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.
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
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
~VERNMENT-GUARANTEED
7/02
$350,000,000.00
7/02
$285,700,000.00
7/03
$232,700,000.00
7/05
$19,600,000.00
7/06
$600,000,000.00
7/06
$254,500,000.00
7/09
$900,000,000.00
7/10
$685,000,000.00
7/10
$244,700,000.00
7/11
$610,000,000.00
7/11
$182,200,000.00
7/12
$400,000,000.00
7/12
$250,300,000.00
7/13 $1,050,000,000.00
7/13
$326,300,000.00
7/16
$175,000,000.00
$290,100,000.00
7/16
$217,900,000.00
7/17
$104,800,000.00
7/18
$12,000,000.00
7/19
$590,000,000.00
7/20
$400,600,000.00
7/20
7/23 $1,030,000/000.00
$171,100,000.00
7/23
7/24
$860,000,000.00
$384,000/000.00
7/24
$624,000,000.00
7/25
$366,400,000.00
7/25
$575,000,000.00
7/26
$236/100,000.00
7/26
$500,000,000.00
7/27
$270,500,000.00
7/27
$300,000,000.00
7/30
$287,700,000.00
7/30
$327,100,000.00
7/31
7/03/01
7/03/01
7/05/01
7/06/01
7/09/01
7/09/01
7/10/01
7/11/01
7/11/01
7/12/01
7/12/01
7/13/01
7/13/01
7/16/01
7/16/01
7/17/01
7/17/01
7/18/01
7/19/01
7/20/01
7/23/01
7/23/01
7/24/01
7/24/01
7/25/01
7/25/01
7/26/01
7/26/01
7/27/01
7/27/01
7/30/01
7/30/01
7/31/01
7/31/01
S/01/01
3.767%
3.798%
3.788%
3.777%
3.788%
3.755%
3.777%
3.755%
3.757%
3.778%
3.705%
3.757%
3.726%
3.705%
3.745%
3.726%
3.767%
3.736%
3.664%
3.674%
3.664%
3.652%
3.674%
3.685%
3.652%
3.685%
3.685%
3.685%
3.685%
3.684%
3.685%
3.673%
3.684%
3.695%
3.664%
$48,239.03
$50,672.23
$1,334,885.31
$381,614.69
$31,183.38
10/01/26
1/30/02
1/30/02
7/31/25
1/30/02
5.717%
3.689%
3.635%
5.627%
3.605%
SI
SI
SI
Sj
SI
S;
S;
SJ
SJ
Sj
Sj
5/
5/
S/
5/
S/
S/
S/
sl
sl
SI
si.
sf,
sf,
S/'
sf;
S/;
S/"1
S/]'
5/1
S/]
5/1
S/l
S/l
S/1
LOANS
GENERAL SERVICES ADMINISTRATION
Chamblee Office Building
Atlanta CDC Lab
Atlanta CDC Lab
Foley Services Contract
Atlanta CDC Lab
7/16
7/16
7/27
7/27
7/30
S/ ].
S I].
S /].
s/ ].
S I].
Page 3
FEDERAL FINANCING BANK
JULY 2001 ACTIVITY
Date
Borrmver
Amount
of Advance
FlnaI
Maturity
Interest
Rate
DEPARTMENT OF EDUCATION
Barber-Sco::.ia College
Barber-Scotia College
Tougaloo College
7/12
7/12
7/30
$45,307.27
$11,623.50
$517,808.02
3/01/30
3/01/30
9/01/09
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
$1,730,420.53
$1,784,309.81
$1,374,166.47
$1,932,171. 73
$11,129,426.33
$1,500,113.95
$2,850,118.63
$4,399,462.12
$978,132.49
$775,314.40
$1,211,699.70
$3,110,599.13
$2,154,658.64
$3,003,505.35
$3,645,657.32
$3,375,902.33
$3,536,290.89
$3,895,896.79
$3,782,146.82
$6,473,619.10
$4,623,056.80
$3,821,456.97
$1,617,964.46
$1,474,381.56
$736,012.79
$1,697,488.03
$1,705,688.89
$1,855,195.12
$1,598,985.17
$650,034.95
$1,259,157.22
$768,787.85
$1,757,026.91
$3,232,782.49
$1,111,097.97
$2,015,254.02
$4,484,730.76
$511,525.36
$1,492,67l.17
$627,959.30
$1,367,726.61
1/03/22
12/31/20
1/03/11
1/03/12
1/03/11
1/03/11
1/03/11
1/03/11
1/03/11
1/03/11
1/03/11
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/13
12/31/13
12/31/13
12/31/13
12/31/13
12/31/13
12/31/2.3
12/31/::'2
12/31/12
12/31/12
5.687% S/A
5.687% S/A
4.669% S/A
RURAL UTILITIES SERVICE
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arlzona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
Arizona
.;;'r i. zona
Arlzona
Arlzona
Arlzona
Arlzona
Arlzona
.lI.r'::"zona
Arizona
Electric
Electric
Electric
Electrlc
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
Electric
.~rizo~a Electric
Arlzona Electric
li::-'::"zona Electric
}'\r'::" zona Electric
.~rlzona Electric
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
#777
7.390%
9.083%
5.887%
5.947%
5.887%
5.887%
5.887%
5.887%
5.940%
6.222%
6.222%
6.259%
5.999%
5.947%
5.947%
5.947%
5.999%
6.259%
5.999%
6.259%
5.999%
5.947%
5.947%
6.195%
6.195%
6.195%
6.195%
6.195%
6.195%
6.195%
6.195%
6.237%
6.237%
6.237%
6.237%
6.237%
6.237%
6.237%
6.125%
6.125%
6.125%
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
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Page'
FEDERAL FINANCING BANK
JULY 2001 ACTIVITY
Borrower
Arlzona Electric #777
Arizona Electric #777
Arizona Electric #777
Arizona Electric #777
Arizona Electric #777
Arizona Electric #777
Arizona Electric #777
Arizona Electric #777
Arizona Electric #777
Arizona Electric #777
Arizona Electric #777
Arizona Electric #777
Arizona Electric #777
*Big Sand Elec. #540
*Big Sand Elec. #540
*BLUE GRASS ENERGY #674
*BLUE GRASS ENERGY #674
Blue Ridge Elec. Coop. #659
*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
Date
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
Amount
of Advance
$3,390,163.88
$522,555.17
$1,596,262.57
$1,033,168.43
$797,209.14
$1,876,854.97
$1,923,109.18
$1,163,114.09
$1,475,167.61
$4,785,340.28
$3,009,959.33
$4,909,645.64
$2,535,104.54
$800,000.00
$600,000.00
$4,000,000.00
$2,000,000.00
$9{500{000.00
$3,211,876.56
$1,426,580.09
$355,506.89
$819,998.29
$1,070,663.69
$712,994.66
$409,933.58
$766,404.11
$924,618.07
$298,160.49
$216,393.14
$371,223.64
$217,568.21
$155,881.55
$135,803.70
$74,403.09
$112,429.96
$36,186.72
$1,195,909.60
$238,974.66
$902,720.84
$2,704,020.39
$1,619,364.51
$970,484.54
$585,954.95
$909,271.11
$493,989.94
$1,425,373.91
$1,717,393.08
$2,014,345.88
$824,076.99
$630,450.54
Final
Maturity
Interest
Rate
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/13
12/31/20
12/31/20
12/31/20
12/31/20
12/31/20
12/31/20
12/31/20
12/31/01
12/31/01
10/01/01
10/01/01
12/31/29
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
6.125%
6.125%
6.125%
6.125%
6.125%
6.169%
8.118%
8.027%
8.235%
7.002%
6.502%
5.023%
5.920%
3.616%
3.616%
3.650%
3.650%
5.707%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
lJ(
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Page 5
FEDERAL FINANCING BANK
JULY 2001 ACTIVITY
Borro\\'er
*Braz:)s Electric #917
*3raz:)s Electric #917
*Srazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electr'::'c #917
*Braz:)s 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 #437
*Brazos Electric #561
*Brazos Electric #561
*Brazos Electric #561
*Cumberland Electric #623
*Cumberland Valley #668
<-Coop. Power Assoc. #070
<-Coop. Power Assoc. #130
"Coop. Power Assoc. #156
Empire Electric #627
<Fleming-Mason Energy #644
<FlemIng-Mason Energy #644
<Farmers Telephone #399
'Farmers Telephone #399
'Farmers Telephone #399
'Grayson Rural Elec. #619
'Grayson Rural Elec. #619
'Grayson Rural Elec. #619
'Harrison County #532
-Harrison County #532
-Inter-County Energy #592
Inter-County Energy #592
Inter-County Energy #592
Jackson Energy #527
~ick:nq Valley Elec. #522
:v!eade County Elec. #662
:vIeade County Elec. #662
Nolin Rural Elec. #528
Nelin Rural Elec. #577
~olin Rural Elec. #577
San Miguel Electric #919
Saf1. MIguel Electric #919
Surrv-Yadkif1. Elec. #534
S-....:rr~·- Yad:"Cin Elec. #534
Surr~-Yadkin Elee. #534
Date
Amount
of Advance
FInal
Maturity
Interest
Rate
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/C2
7/02
7/02
$415,729.15
$1,115,406.03
$1,449,278.29
$2,382,686.96
$2,550,405.17
$500,083.43
$16,181.13
$853,156.77
$2,795,058.47
$2,190,793.51
$4,106,102.40
$1,387,589.91
$314,744.52
$3,014,937.69
$1,164,357.43
$489,077.05
$10,962,028.71
$5,517,442.88
$10,766,051.10
$5,671,000.00
$4,200,000.00
$859,259.50
$3,316,953.37
$1,079,464.50
$525,000.00
$2,600,000.00
$1,400,000.00
$4,762,165.47
$3,361,424.48
$2,379,132.91
$1,200,000.00
$600,000.00
$1,000,000.00
$1,000,000.00
$900,000.00
$1,500,000.00
$2,000,000.00
$2,607,000.00
$2,990,400.46
$2,749,000.00
$1,300,000.00
$2,000,000.00
$1,893,000.00
$2,583,000.00
$2,583,000.00
$8,381,883.06
$8,801,075.30
$995,521.91
$995,521.91
$497,760.95
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
6/30/06
10/01/01
6/30/06
6/30/06
6/30/06
1/03/34
10/01/01
10/01/01
6/30/05
6/30/05
6/30/05
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
6/30/11
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
10/01/01
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.775%
3.775%
3.775%
3.775%
3.775%
3.775%
3.775%
3.650%
3.650%
3.650%
4.920%
3.650%
5.000%
4.984%
5.007%
5.707%
3.650%
3.650%
4.834%
4.834%
4.834%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
5.353%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
3.650%
-
Qtr.
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Otr.
Otr.
Otr.
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Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Otr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
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Qt!.
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Page
~
FEDERAL FINANCING BANK
JULY 2001 ACTIVITY
Borrower
*Surry Yadkin Elec. #534
*surry- Yadkin Elec. #534
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TR.ANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO # 7 7 8
TRANSCO # 778
TRANSCO # 7 7 8
TRANSCO #778
TRANSCO #778
TRANSCO # 778
TRANsco #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
Date
Amount
of Advance
Final
Maturity
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
$995,521.91
$995,521.91
$836,098.11
$862,136.14
$663,964.61
$933,579.51
$5,377,474.57
$724,819.45
$1,377,109.65
$2,125,715.64
$472,610.40
$374,613.51
$585,464.53
$1,502,967.65
$1,041,079.90
$1,451,222.48
$1,761,495.06
$1,631,155.86
$1,708,651.80
$1,882,404.83
$1,827,443.54
$3,127,899.05
$2,233,751.29
$1,846,437.28
$781,762.01
$712,386.16
$355,623.90
$820,185.92
$824,148.38
$896,386.23
$772,591.67
$314,081.46
$608,394.87
$371,460.03
$848,953.69
$1,562,003.75
$536,856.16
$973,722.90
$2,166,915.43
$247,156.91
$721,223.27
$303,415.03
$660,853.02
$1,638,046.70
$252,486.25
$771,276.18
$499,202.45
$385,192.53
$906,851.76
$929,200.69
10/01/01
10/01/01
1/03/22
12/31/20
1/03/11
1/03/12
1/03/11
1/03/11
1/03/11
1/03/11
1/03/11
1/03/11
1/03/11
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
1/03/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/13
12/31/13
12/31/13
12/31/13
12/31/13
12/31/13
12/31/13
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/13
12/31/20
Interest
Rate
3.650%
3.650%
7.390%
9.083%
5.887%
5.947%
5.887%
5.887%
5.887%
5.887%
5.940%
6.222%
6.222%
6.259%
5.999%
5.947%
5.947%
5.947%
5.999%
6.259%
5.999%
6.259%
5.999%
5.947%
5.947%
6.195%
6.195%
6.195%
6.195%
6.195%
6.195%
6.195%
6.195%
6.237%
6.237%
6.237%
6.237%
6.237%
6.237%
6.237%
6.125%
6.125%
6.125%
6.125%
6.125%
6.125%
6.125%
6.125%
6.169%
8.118%
C;
C;
C
Q
Q
Q
Q
Q
Q
Q
Q
Q"
Q
Q'
Ql
Q1
Q1
Q1
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Ot
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Qt
Page 7
FEDERAL FINANCING BANK
JULY 2001 ACTIVITY
Bor-rowerTRANSCO #778
':'RANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
TRANSCO #778
*Upsala Coop. Tele. #429
*Upsala Coop. Tele. #429
Flrelands Elec. #621
Blue Ridge Elec. #512
Tr-i-County Elec. Coop. #646
Citizens Elec. #742
Georgia Trans. Corp. #559
Mar-Gran-Sou Elec. #724
Shelby Energy Coop. #607
Agralite Elec. #543
Block Island Power #652
East Kentucky Power #491
Aiken Elec. #549
S. Central Arkansas #605
Farmer's Telephone #459
Mid-Yellowstone Elec. #745
Sho-Me Power #480
Adams Rural Electric #706
Great River Energy #738
Great River Energy #738
Great River Energy #738
Great River Energy #738
Great River Energy #738
Great River Energy #738
Great River Energy #738
Great River Energy #738
Great River Energy #738
Ravalli #641
Stearns Cooperative #733
Central Texas Elec. #523
Marlboro Elec. #642
Owen Electric #525
Amicalola Electric #664
Sumter Elec. #735
Tideland Electric #734
3utler Rural Elec. #578
Citizens Tel (VA) #680
Sheridan Elec. #681
Upsala Coop. Tele. #429
Ir:-Countv Electric #711
Unlted Elec. #519
CliRTERET-CRAVEN ELECTR #608
COOD. Power Assoc. #722
Carle~ Telephone Co. #719
Date
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/02
7/03
7/05
7/05
7/06
7/06
7/06
7/06
7/09
7/09
7/10
7/11
7/11
7/12
7/13
7/13
7/16
7/16
7/16
7/16
7/16
7/16
7/16
7/16
7/16
7/16
7/16
7/16
7/17
7/17
7/17
7/18
7/18
7/18
7/19
7/19
7/19
7/19
7/20
7/20
7/23
7/23
7/23
Amount
of Advance
Final
Maturity
Interest Rate
$561,989.12 12/31/20
$712,765.96 12/31/20
$2,312,162.81 12/31/20
$1,454,340.88 12/31/20
$2,372,224.21 12/31/20
$1,224,902.33 12/31/20
$14,522.86 10/01/01
$323,899.06 10/01/01
$500,000.00
1/03/34
$2,200,000.00
1/03/33
$3,000,000.00
1/02/35
$2,694,000.00 12/31/01
$19,377,419.00 12/31/25
$4,000,000.00
1/02/35
$1,106,000.00
6/30/06
$945,000.00
1/03/34
$182,000.00 12/31/24
$8,119,000.00 12/31/24
$2,000,000.00
1/03/34
$720,000.00
1/03/34
$228,937.00
4/01/02
$100,000.00 12/31/35
$2,500,000.00 12/31/31
$500,000.00
9/30/26
$13,660,000.00 12/31/03
$13,600,000.00
1/03/06
$13,600,000.00 12/31/07
$13,600,000.00 12/31/09
$13,600,000.00
1/03/12
$13,600,000.00 12/31/13
$13,600,000.00 12/31/15
$13,600,000.00
1/02/18
$13,600,000.00 12/31/19
S585,000.00
9/30/16
$2,400,000.00 12/31/01
$875,000.00
9/30/05
$590,000.00
1/02/35
$1,000,000.00
7/01/02
$5,000,000.00 12/31/01
$950,000.00 12/31/35
$8,672,000.00 12/31/31
$2,523,506.00
1/03/34
$52,000.00 12/31/15
$1,000,000.00
1/02/35
$94,752.00
9/30/02
$2,170,000.00
1/02/35
$1,500,000.00
1/03/34
$7,000,000.00 12/31/29
$4,294,000.00
9/30/11
$444,000.00 12/31/01
8.027% Qtr.
8.235% Qtr.
7 . 002% Qtr.
6.502% Qtr.
5.023% Qtr.
5. 920% Qt~.
3.775% Qt:-.
3 . 775% Qtr.
5.653% Qtr.
5.810% Qtr.
5.687% Qtr.
3.618% Qtr.
5.689% Qtr.
5.717% Qtr.
4.898% Otr.
5.697% Otr.
5.649% Qtr.
5.729% Qtr.
5.619% Qtr.
5.620% Qtr.
3.631% Qtr.
5.600% Qtr.
5.590% Qtr.
5.536% Qtr.
4.214% Qtr.
4.670% Qtr.
4.994% Qtr.
5.103% Qtr.
5.196% Qtr.
5.286% Qtr.
5.371% Qtr.
5.445% Qtr.
5.505% Qtr.
5.451% Qtr.
3.580% Qtr.
4.564% Qtr.
5.533% Qtr.
3.594% Qtr.
3.581% Qtr.
5.537% Qtr.
5.531% Qtr.
5.454% Otr.
5.048% Qtr.
5.389% Qtr.
3.754% Qtr.
5.465% Qtr.
5.462 % Qtr.
5.458% Qtr.
5.061% Qtr.
3.512% Qtr.
Page 8
FEDERAL FINANCING BANK
JULY 2001 ACTIVITY
Borrower
La Plata Electric #649
southwestern Elec. #726
united Power Assoc. #721
Goodhue County #672
Hawkeye Tri-County Elec. #643
Splitrock Telecom Coop. #506
Cental Virginia Elec. #593
East Central Oklahoma #754
N.E. Missouri Elec. #408
Kootenai Elec. #752
Irwin Electric #715
ponderosa Tele. #517
*
Date
Amount
of Advance
Final
Maturity
Interest
Rate
7/24
7/24
7/24
7/25
7/25
7/25
7/27
7/27
7/27
7/30
7/31
7/31
$2,279,000.00
$24,000,000.00
$3,374,000.00
$490,000.00
$767,500.00
$1,700,069.00
$1,500,000.00
$4,850,OOD.OO
$1,742,000.00
$2,825,000.00
$2,046,000.00
$1,816,000.00
1/02/35
12/31/35
9/30/11
1/02/35
1/02/35
12/31/01
1/03/34
10/02/06
12/31/25
12/31/31
1/02/35
1/03/12
5.464%
5.403%
5.046%
5.456%
5.456%
3.638%
5.522 %
4.708%
5.593%
5.470%
5.458%
4.919%
S/A is a Semiannual rate.
Qtr. is a Quarterly rate.
maturity extension or interest rate reset
Q
Q
Q
Q"
Q',
Qi
Q1
Q1
Qt
Qt
Qt
Qt
Page 9
FEDERAL FINANCING BANK HOLDINGS
(in millions of dollars)
Program
Monthly
Net Change
7/1/01- 7/31/01
Fi scal Year
Net Change
10/1/00- 7131/01
July 31. 2001
June 30. 2001
Agency Debt:
U.S. Postal Service
National Credit Union Adm.-ClF
Subtotal*
$4.877.1
$0.0
$4.877.1
$5.467.7
$0.0
$5.467.7
-$590.6
$0.0
-$590.6
-$4.384.9
$0.0
-$4.384.9
I\gency Assets:
fmHA-RDIF
FmHA-RHIF
DHHS-Medical Facilities
Rural Utilities Service-CBO
Subtotal*
$2,795.0
$5.155.0
$0.0
$4,270.2
$12.220.2
$2.930.0
$5.155.0
$0.2
$4,270.2
$12.355.4
-$135.0
$0.0
-$0.2
$0.0
-$135.2
-$615.0
-$385.0
-$0.6
-$56.7
-$1.057.3
Government-Guaranteed Lending:
DOD-Foreign Mi1itary Sales
DoEd-HBCU+
DHUD-Community Dev. Block Grant
DHUD-Public Housing Notes
General Services Administration+
DOl-Virgin Islands
lOON-Ship Lease Financing
Rural Utilities Service
SBA-State/Local Development Cos.
DOT-Section 511
Subtotal*
$2.208.0
$25.2
$8.8
$1.278.7
$2.271.5
$13.1
$941.1
$13.527.3
$135.4
$3.4
$20.412.6
$2.238.5
$24.7
$9.3
$1.278.7
$2.274.8
$13.6
$949.1
$13.483.1
$137.2
$3.4
$20.412.3
-$30.5
$0.5
-$0.5
$0.0
-$3.3
-$0.4
-$8.0
$44.2
-$1. 8
$0.0
$0.3
-$182.4
$4.5
-$2.0
-$69.8
. $41. 1
-$1. 6
-$106.3
$537.8
-$23.7
-$0.1
$115.3
=========
=====;:;===
==========
==========
$37.509.9
$38.235.4
-$725.5
-$5.326.9
Grand total*
* figures may not total due to rounding
+ does not include capitalized interest
NEWS
lR[£ASURY
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C .• 20220. (202) 622-2960
October 11, 2001
Contact: Rob Nichols
(202) 622-2910
UPDATE MEDIA ADVISORY
WHO
Treasury Secretary Paul QINeill
and Under Secretary for Enforcement
Jimmy Gurule, Under Secretary for International Affairs John Taylor
WHAT "UPDATE ON DISRUPTING TERRORIST FINANCING AROUND THE WORLD"
WHEN
Friday October 12, 2001 at 9: 15 am
WHERE The Diplomatic Reception Room, Third Floor Main Treasury
Media without Treasury or White House press Credentials planning to attend should contact
Treasury's Office or 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
-30PO-682
F",. press releases, speeches, public schedules and official biographies, mll our 24-hour fax line ai {2fJ2) 622-2:[}4()
·U.S. Government Pnntlnq Office. 1998· 619·559
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
TREASURY
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C .• 20220. (202) 622·2960
~GOED UNTIL 2:30 P.M.
october 11, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction 13-week and 26-week Treasury bills totaling
$25,000 million to refund an estimated $22,825 million of publicly held 13week and 26-week Treasury bills maturing October 18, 2001, and to raise new
cash of approximately $2,175 million. Also maturing is an estimated $12,000
million of publicly held 4-week Treasury bills, the disposition of which will
be announced October 15, 2001.
The Federal Reserve System holds $11,279 million of the Treasury bills
maturing on October 18, 2001, in the System Open Market Account (SOMA).
This
amount may be refunded at the highest discount rate of accepted competitive
tenders either in these auctions or the 4-week Treasury bill auction to be
held October 16, 2001.
Amounts awarded to SOMA 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.
TrRasuryDirect customers have requested that we reinvest their maturing
holdings of approximately $937 million into the 13-week bill and $603 million
into the 26-week bill.
The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
This offering of Treasury securities is governed by the terms and conmtions 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-683
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 OCTOBER 18, 2001
October 11, 2001
Offering Amount
Public Offering
$13,000 million
$13,000 million
$12,000 million
$12,000 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 JC 6
October 15, 2001
October 18, 2001
January 17, 2002
July 19, 2001
$18,369 million
$1,000
182-day bill
912795 JQ 5
October 15, 2001
October 18, 2001
April 18, 2002
October 18, 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 daylight saving time on auction day
Competitive tenders . . . . . . Prior to 1:00 p.m. eastern daylight saving 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.
o
EPA R T 1\1 E N T
IRE£ASURY
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
October 11, 2001
Contact: Public Affairs
(202) 622-2960
PROGRESS REPORT ON
COMBATING TERRORIST FINANCING
When the President opened the financial front in the battle against global terrorism, he
galvanized all agencies of the federal government to work together at a greater level of
cooperation than ever before. Intelligence and law enforcement agencies are sharing information
to identify and pursue individuals connected to terrorism. The Treasury and State Departments
are working together to build an international coalition to disrupt the financing of terrorism.
Results to date:
•
Since September 11, the United States has frozen nearly $4 million in assets belonging to
the Taliban, Usama bin Laden and the a1 Qaeda network, and several million in additional
assets are under review.
•
We've seen unprecedented cooperation from around the world. 102 countries have
committed to joining the effort to disrupt terrorist assets and 62 countries already have
put blocking orders in force. Nations around the world have frozen more than $24
million is assets since September 11.
•
Trcasury hostcd a special meeting of the G7 Finance Ministers last Saturday. The seven
nations pledged cooperation and announced ajoint action plan under which:
•
The G- 7 calls on all countries to establish functional Financial Investigative Units
(FIUs) as soon as possible.
•
The G-7 countries will all join the Egmont Group, which promotes cooperation
between national Fills, and tums around information sharing requests as
expeditiously as possible and will facilitate information sharing agreements
between nations.
•
The Egmont Group will meet in Washington later this month to further their
coordination efforts.
PO-684
F£fr press releases, speeches, public schedules and official biographies. mll our 24 ..jwur fa,; line itt (2112) 622-2G40
'U S G(iV'WliIl2n1 Pm'IcLl OffIce 1998 - 019-559
•
At the request of the G-7, the Financial Action Task Force (a group of29 countries) will
hold an extraordinary plenary meeting in Washington D.C. later this month. The G-7
0
called on the FA TF to focus on specific measures to combat terrorist financin b'
including:
• Issuing special FATF recommendations and revising the F ATF 40 Recommendations
to take into account the need to fight terrorist financing, through methods including
increased transparency;
• Issuing special guidance for financial institutions on practices associated with the
financing of terrorism that warrant further action on the part of affected institutions;
• Developing a process to identify jurisdictions that facilitate terrorist financing, and
making recommendations for actions to achieve cooperation from such countries.
•
The US Government has communicated with every country about participation in a
global coalition to disrupt terrorist financing. Top Treasury officials have spoken directly
with 29 Finance Ministers to discuss specific actions. All have been cooperative.
•
Treasury officials attended the Caricom (a group of Caribbean nations) meeting today to
discuss ongoing cooperation in disrupting the financial infrastructure of terrorism.
•
Specific examples of action since September 11 include:
•
•
the Dutch have blocked two accounts worth $550,000 of assets associated with
bin Laden and the al Qaeda organization.
The Bahamas blocked accounts connected to the recent terrorist attacks.
•
The US Government will provide technical assistance to cooperating governments in the
full range of efforts to combat terrorists' financial activities.
•
US Financial institutions have responded to Treasury requests and volunteered
infonnation to identify patterns of terrorist financing.
•
Treasury's Financial Crimes Enforcement Network has set up an 800 number so that
financial institutions professionals can call when they see a particularly suspicious
transaction. The 800 number receives an average of 15 calls per day.
-30-
o
EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
lR]~ASURY
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
For immediate release
October 12, 2001
Contact: Public Affairs
(202) 622-2960
SECRETARY OF SECRETARY PAUL O'NEILL
ON TERRORlST ASSET HLOCKlNG ORDER ISSUED TODA Y
The President fired the first shot in the war on terrOlism several weeks ago, when he
ordered accounts of suspected terrorist blocked in the United States and spurred the entire world
to act with unprecedented speed and cooperation to disrupt the financial underpinnings of
terrorism.
This morning we took the next step in this financial war. Together Secretary Powell and
I notified all financial institutions in the United States to block the assets of 39 additional persons
and entities that are either wanted terrorists or who are known to financially suppoti terrorism.
The list includes businesses and charitable organizations that funnel money to the 0.1 Qaeda
terrorist network. US assets of all 22 of the FBI's IvIost Wanted Terrorists are now subject to this
blocking order. Under the Executive Order signed by the President on Septernber 24, all US
citizens and businesses are prohibited from doing business with the people and organizations on
this list.
We coordinated this blocking order with our allies aroLll1d the world, and many ofthem
instituted blocking orders today as well. Together with the State Department we have built an
international coalition to disntpt the terrorist financing network.
This list wi 11 continue to o£row as we share infonl1ation between nations and develop an
increasingly clear understanding of the complex network of lerrorist financing. vVe are
detem1ined to deny terrorists the resources to carry out their acts of evil.
-30PO-685
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D EPA R T 1\1 E N T
0 F
THE
'IREASURY ~~)
_
1789
T REA SUR Y
NEW S
OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATED RELEASE
October 12,2001
Contact: Tasia Scolinos
(202) 622-2960
STATEMENT OF JIlVIMY GURULE
TREASURY UNDER SECRETARY FOR ENFORCEMENT
I want to join Secretary O'Neill in thanking you all for coming today. As the Secretary
has stated 39 additional names have been added to the President's September 24th Executive
Order. In addition to the 21 new names listed here today, Treasury's Officc of Foreign Assets
Control has also instructed U.S. banks to freeze the assets of 18 of the 22 FBI's Most Wanted
Terrorists. The remaining 4 have already been named by President Bush in the Annex to the
September 24th Executive Order.
When the President decided to take action against the terrorist's financial infrastructure,
he galvanized the world to take unprecedented steps to disrupt the financial networks of
terrorism. Today we add another brick to the international wall we are building against the
funding of terrorist acts around the world. We are determined to paralyze the terrorist's ability to
move funds through the international banking system and we are using every tool at our disposal
to cut off the various sources of funding for their atrocities. The civilized world has spoken with
one voice - individuals and organizations that infuse these terrorist organizations with money are
no better than the terrorists perpetrating these acts. We will shut down their fundraising and
expel them from the global financial system. Today we have taken a giant step forward in that
effort.
The list you have here today is the product of an intense process of infon11ation sharing
among federallaw enforcement and intelligence agencies. As we combine our knowledge, we
are developing an understanding of the vast and complicated network that funded the evil acts of
September 11. We will follow the money trail to identify all of those who provide support for
terrorism, wherever they may be. We will block accounts here in the U.S. and when funds are
found abroad our allies will join us in this effort to block assets and deny terrorists the resources
they need to inflict terror on the U.S. or any other nation.
PO-686
Forpress releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
Let me address for a moment some specific entities that are mentioned on the list. There
are 6 entities and 33 individuals. Additional names will be added to the list in the weeks and
months to come. As has been widely reported in the news media, the terrorists often use creative
methods to transfer funds internationally without detection. For instance, some honey producers,
and other related businesses in the Middle East, have been known to act as vehicles for moving
terrorist funds surreptitiously. The Treasury Department today identified two of these honey
businesses, in addition to a bakery, that funnel funds to terrorists. \Ve and our allies around the
world will be blocking the assets of these entities. These entities, and the banks that do not
cooperate in blocking the assets, will no longer do business with the United States or with U.S.
capital markets. Weare putting the world on notice that those choosing to fund acts of terror can
no longer hide behind legitimate business functions and expect to escape action by the U.S.
I would be happy to answer a few questions at this time.
DEPARTMENT
TREASURY
OF
THE
TREASURY
NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMlYIEDIATE RELEASE
October 12, 2001
Contact: Public Affairs
(202) 622-2960
STATEMENT OF UNDER SECRETARY FOR INTERNATIONAL AFFAIRS
JOHN B. TAYLOR
I am pleased to amlOunce today that all members of the G7 are taking simultaneous action to
block assets of terrorist individuals and groups identified by the United States. This is just one
example of the unprecedented level of international cooperation we have received to combat the
financing of terrorism. Today we can say that:
•
110 countries have committed to join the effort to combat the financing of terrorism.
•
•
66 countries now have blocking orders on terrorist assets in force, and
over $20 million has been frozen globally since September II.
In order to add to these numbers, the Administration is also prepared to offer technical
assistance to cooperating nations eager to engage in the full range of efforts to combat the
financing of terrorism. This is a quiet but significant contribution to our overall effort.
The Administration is also moving forward on a number of other fronts to dry up terrorist
financing internationally. Last weekend, Secretary O'Neill hosted an exceptional meeting of the
G7 Finance Ministers in Washington, after which the seven nations announced ajoint action plan
on terrorist financing.
All G7 nations pledged to create an enhanced mechanism for 1110nitOling terrorist assets,
similar to our Foreign Terrorist Asset Tracking Center in the Office of Foreign Assets Control
(OFAC).
At the request of the G7, the Financial Action Task Force (FA TF) will hold an extraordinary
plenary meeting in Washington on October 29 th and 30 th . The G7 has called on FATF to focus
on specific measures to combat the financing of terrorism.
PO-687
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
.\ISl) as pJrt ortlle action plan, all G7 countries pledged to establish functional Financial
II1lclli~cnc('
Lnits (FILs), such as the United States' Financial Crimes Enforcement Network
(FI\CE\ L and to join the Egmont Group. The Egmont Group promotes cooperation between
11~llilinal Financial Intelligence Units, and expedites infom1ation-sharing requests. The Group
\\ i llmcct in \\' ashington later this month to further their coordination efforts.
The continued cooperation of the international community is critical to the long-tem1 success
uf the II~ht agaillst the financing of terrorism.
-30-
NEWS
TREASURY
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
October 12, 2001
CONTACT: Sean Miles
(202) 622-2960
MEDIA ADVISORY
Treasury Secretary Paul H. O'Neill will hold a Southeast Business Roundtable discussion
at 8:00 a.m. on Monday, October 15,2001 in the Boardroom of the Peabody Hotel, 149 Union
Avenue, Memphis, TN 38103.
The meeting will only be open to the press for the first five minutes of the Secretary's
remarks. Press members should assemble outside of the Boardroom by 8:00 a.m. to be escorted
m. For further infom1ation, please contact Sean lYIiles at (202) 622-2015.
-30PO-688
Far press releases, speeches, Jbublic schedules and official biographies. call our 24-hour fax line at (202) 622-2040
DEPARTMENT
OF
THE
lRJ:£ASURY
TREASURY
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
October 12,2001
Contact: Office of Public Affairs
(202) 622-2960
TREASURY DEPARTMENT RELEASES LIST OF 39 ADDITIONAL
SPECIALLY DESIGNATED GLOBAL TERRORISTS
Treasury Office of Foreign Asset Control (OFAC) has added the names of 39 terrorists to its list
of Specially Designated Global Terrorists (SDGT). Their assets must be blocked immediately.
ABDULLAH, Abdullah Ahmed (a.k.a. ABU MARIAM; a.k.a. AL-MASRI, Abu Mohamed;
a.k.a. SALEH), Afghanistan (DOB 1963; POB Egypt; citizen Egypt) (individual) [SDGT]
AGHA, Haji Abdul Manan (a.k.a. SAIYID, Abd AI-Man'am), Pakistan (individual) [SDGT]
AL-HAMATI SWEETS BAKERIES, AI-Mukallah, Hadhramawt Govemorate, Yemen [SDGTJ
AL-HAMATI, Muhammad (a.k.a. AL-AHDAL, Mohammad Hamdi Sadiq; a.k.a. AL-MAKKI,
Abu Asim), Yemen (individual) [SDGT]
AL-HAQ, Amin (a.k.a. AH HAQ, Dr. Amin; a.k.a. AMIN, Muhammad; a.k.a. UL-HAQ, Dr.
Amin) (DaB 1960; POB Nangahar Province, Afghanistan) (individual) [SDGT]
AL-JADAWI, Saqar (DaB 1965) (individual) [SDGT]
AL-KADR, Ahmad Sa'id (a.k.a. AL-KANADI, Abu Abd AI-Rahman) (DOB 01 Mar 1948; POB
Cairo, Egypt) (individual) [SDGT]
AL-LIBY, Anas (a.k.a. AL-LIBI, Anas; a.k.a. AL-RAGHIE, Nazih; a.k.a. AL-RAGHIE, Nazih
Abdul Hamed; a.k.a. AL-SABAI, Anas), Afghanistan (DOB 30 Mar 1964, Alt. DOB 14 May
1964; POB Tripoli, Libya; citizen Libya) (individual) [SDGT]
AL-MUGHASSIL, Ahmad Ibrahim (a.k.a. ABU OMR.A..N; a.k.a. AL-MUGHASSIL, Ahmed
Ibrahim) (DOB 26 Jun 1967; POB Qatif-Bab al Shamal, Saudi Arabia; citizen Saudi Arabia)
(individual) [SDGT]
PO-689
Fm-press releases, :;peedu:s, ioublic schedules and official biographies. cail Dlir 2Lf~hc'UY fax fin.? at (202) 622-2040
'11 S Gavernm"ol PrlnllnG 011lC2 1998· ') 19·559
AL-NASSER, Abdelkarim Hussein Mohamed (POB Al 1hsa, Saudi Arabia; ci6zen Saudi
Arabia) (individual) [SDGT]
AL-NUR HONEY PRESS SHOPS (a.k.a. AL-NUR HONEY CENTER), Sanaa, Yemen.
[SDGT]
AL-QADI, Yasin (a.k.a. KADI, Shaykh Yassin Abdullah; a.k.a. KAHD1, Yasin), Jeddah, Saudi
Arabia (individual) [SDGT]
AL-SHARIF, Sa'd (DOB 1969; POB Saudi Arabia) (individual) [SDGT]
AL-SHIFA' HONEY PRESS FOR INDUSTRY AND COMMERCE, AI-Nasr Street, Doha,
Qatar; By the Shrine Next to the Gas Station, Jamal Street, Ta'iz, Yemen; Al-'Arudh Square,
Khur Maksar, Aden, Yemen; P.O. Box 8089, Al-Hasabah, Sanaa, Yemen [SDGT]
AL-YACOUB, Ibrahim Salih Mohanuned (DOB 16 Oct 1966; POB Tarut, Saudi Arabia; citizen
Saudi Arabia) (individual) [SDGT]
ALI, Ahmed Mohammed Hamed (a.k.a. ABDUREHMAN, Ahmed Mohammed; a.k.a. ABU
FATIMA; a.k.a. ABU ISLAM; a.k.a. ABU KHADIIJAH; a.k.a. AHMED HAMED; a.k.a.
Ahmed The Egyptian; a.k.a. AHMED, Ahmed; a.k.a. AL-MASRI, Ahmad; a.k.a. AL-SURIR,
Abu Islam; a.k.a. ALI, Ahmed Mohammed; a.k.a. ALI, Hamed; a.k.a. HEMED, Ahmed; a.k.a.
SHIEB, Aluned; a.k.a. SHUAIB), Afghanistan (DOB 1965; POB Egypt; citizen Egypt)
(individual) [SDGT]
ATW A, Ali (a.k.a. BOUSLIM, Ammar Mansour; a.k.a. SALIM, Hassan Rostom), Lebanon
(DOB 1960; POB Lebanon; citizen Lebanon) (individual) [SDGT1]
ATW AH, Muhsin rvlusa Matwalli (a.k.a. ABDEL RAHMAN; a.k.a. ABDUL RAHMAN; a.k.a.
AL-MUHAJIR, Abdul Rahman; a.k.a. AL-NAMER, Mohammed K.A.), Afghanistan (DOB 19
Jun 1964; POB Egypt; citizen Egypt) (individual) [SDGT]
BIN MARWAN, Bilal (DOB 1947) (individual) [SDGT]
BIN MUHAMMAD, Ayadi Chafiq (a.k.a. AIADI, Ben Muhammad; a.k.a. AIADY, Ben
Muhammad; a.k.a. A Y ADI CHAFIK, Ben Muhammad; a.k.a. AY ADI SHAFIQ, Ben
Muhammad), Darvingasse 112/58-60, Vienna, Austria; 28 Chaussee de Lille, Mouscron,
Belgium; 129 Park Road, NW8, London, England; Helene Meyer Ring 10-1415-80809, Munich,
Gennany; Tunisia (DOB 21 Jan 1963; POB Safais (Sfax), Tunisia) (individual) [SDGT]
DARKAZANLI, Mamoun, Uhlenhorsterweg 34 11, 22085, Hamburg, Gemlany (DOB .:). Aug
1958; POB Aleppo, Syria; Passport No: 1310636262 <Gennany» (individual) [SDGT]
EL-HOORIE, Ali Saed Bin Ali (a.k.a. AL-HOURI, Ali Saed Bin Ali; a.k.a. EL-HOURI, Ali
Saed Bin Ali) (DOB 10 Jul 1965, alt. DOB 11 Jul 1965; POB E1 Dibabiya, Saudi Arabia; citizen
Saudi Arabia) (individual) [SDGT]
FADHIL, Mustafa Mohamed (a.k.a. AL MASRI, Abd Al Wakil; a.k.a. AL-NUBL Abu; a.k.a.
ALI, Hassan; a.k.a. ANIS, Abu; a.k.a. ELBISHY, Moustafa Ali; a.k.a. FADIL, Mustafa
Muhamad; a.k.a. FAZUL, Mustafa; a.k.a. HUSSEIN; a.k.a. JIHAD, Abu; a.k.a. KHALID; a.k.a.
MAN, Nu; a.k.a. MOHAMMED, Mustafa; a.k.a. YUSSRR, Abu) (DOB 23 Jun 1976; POB
Cairo, Egypt; citizen Egypt, alt. citizen Kenya; Kenyan ID No. 12773667; Serial No.
201735161) (individual) [SDGT]
GHAILANI, Ahmed Khalfan (a.k.a. "AHMED THE TANZANIAN"; a.k.a. "FOOPIE"; a.k.a.
"FUPI"; a.k.a. AHMAD, Abu Bak:r; a.k.a. AHMED, A.; a.k.a. AHMED, Abubakar; a.k.a.
AHMED, Abubakar K.; a.k.a. AHMED, Abubakar Khalfan; a.k.a. AHMED, Abubakary K.;
a.k.a. AHMED, Ahmed Khalfan; a.k.a. AL T ANZANI, Ahmad; a.k.a. ALI, Alm1ed Khalfan;
a.k.a. BAKR, Abu; a.k.a. GHAILANI, Abubakary Khalfan Ahmed; a.k.a. GHAILANI, Ahmed;
a.k.a. GHILANI, Ahmad Khalafan; a.k.a. HUSSEIN, Mahafudh Abubakar Ahmed Abdallah;
a.k.a. KHABAR, Abu; a.k.a. KHALFAN, Ahmed; a.k.a. MOHAMMED, ShariffOmar) (DOB
14 Mar 1974, alt. DOB 13 Apr 1974, alt. DOB 14 Apr 1974, alt. DOB 1 Aug 1970; POB
Zanzibar, Tanzania; citizen Tanzania) (individual) [SDGT]
HIJAZI, Riad (a.k.a. AL-AMRIKI, Abu-Ahmad; a.k.a. AL-HAWEN, Abu-Ahmad; a.k.a. ALMAGHRIBI, Rashid; a.k.a. AL-SHAHID, Abu-Ahmad; a.k.a. HIJAZI, Raed M), Jordan (DOB
1968; POB California, U.S.A.; SSN: 548-91-5411 <U.S.A.» (individual) [SDGT}
IZZ-AL-DIN, Hasan (a.k.a. GARBAYA, AHMED; a.k.a. SA-ID; a.k.a. SALWW AN, Samir),
Lebanon (DOB 1963; POB Lebanon; citizen Lebanon) (individual) [SDGT1]
lAISH-I-MOHAMMED (a.k.a. ARMY OF MOHAMMED), Pakistan [SDGT]
JAM'YAH TA'AWUN AL-ISLAMIA (a.k.a. JAM'IYAT AL TA'AWUN AL ISLAMIYYA;
a.k.a. JIT; a.k.a. SOCIETY OF ISLAMIC COOPERATION), Qandahar City, Afghanistan
[SDGT]
LADEHY ANOY, Mufti Rashid Ahmad (a.k.a. AHMAD, Mufti Rasheed; a.k.a. LUDHIANVI,
Mufti Rashid Ahmad; a.k.a. W ADEHY ANOY, Mufti Rashid Ahmad), Karachi, Pakistan
(individual) [SDGT]
MOHAMMED, Fazul Abdullah (a.k.a. ABDALLA, Fazul; a.k.a. ADBALLAH, Fazul; a.k.a.
AISHA, Abu; a.k.a. AL SUDAN I, Abu Seif; a.k.a. ALI, Fadel Abdallah Mohammed; a.La.
FAZUL, Abdal1a; a.k.a. FAZUL, Abdallah; a.k.a. FAZUL, Abdallah Mohammed; a.k.a. FAZUL,
Haroon; a.k.a. FAZUL, Harun; a.k.a. HAROON; a.k.a. HAROL'N, Fadhil; a.k.a. HARUN; a.k.u.
LUQMAN, Abu; a.k.a. MOHAMMED, Fazul; a.k.a. MOHAMMED, Fazul Abdilahi; a.La.
MOHAMMED, Fouad; a.k.a. MUHAMAD, Fadi! Abdallah) (DOB 25 Aug 1972, alt. DOB 25
Dec 1974, alt. DOB 25 Feb 1974; POB Moroni, Comoros Islands; citizen Comoros, alt. citizen
Kenya) (individual) [SDGT]
MOHAMMED, Khalid Shaikh (a.k.a. ALl, Salem; a.k.a. BIN KHALID, Fahd Bin Adballah;
a.k.a. HENIN, Ashraf Refaat Nabith; a.k.a. W ADOOD, Khalid Adbul) (DOB 14 Apr 1965, all.
DOB 1 Mar 1964; POB Kuwait; citizen Kuwait) (individual) [SDGT]
MSALAM, Fahid Mohammed Ally (a.k.a. AL-KINI, Usama; a.k.a. ALLY, Fahid Mohammed;
a.k.a. MSALAM, Fahad Ally; a.k.a. MSALAM, Fahid Mohammed Ali; a.k.a. MSALAM,
Mohammed Ally; a.k.a. MUSALAAM, Fahid Mohammed Ali; a.k.a. SALEM, Fahid Muhamad
Ali) (DOB 19 Feb 1976; POB Mombasa, Kenya; citizen Kenya) (individual) [SDGT]
RABITA TRUST, Room 9A, 2nd Floor, Wahdat Road, Education Town, Lahore, Pakistan;
Wares Colony, Lahore, Pakistan [SDGT]
SWEDAN, Sheikh Aluned Salim (a.k.a. Ahmed the Tall; a.k.a. ALLY, Aluned; a.k.a.
BAHAMAD; a.k.a. BAHAMAD, Sheik; a.k.a. BAHAMADI, Sheikh; a.k.a. SUWEIDAN,
Sheikh Ahmad Salem; a.k.a. SWEDAN, Sheikh; a.k.a. SWEDAN, Sheikh Ahmed Salem) (DOB
9 Apr 1969, alt. DOB 9 Apr 1960; POB Mombasa, Kenya; citizen Kenya) (individual) [SDGT]
UTHMAN, Omar Mahmoud (a.k.a. ABU ISMAIL; a.k.a. ABU UMAR, Abu Omar; a.k.a. ALFILISTINI, Abu Qatada; a.k.a. T AKFIRl, Abu 'Umr; a.k.a. UMAR, Abu Umar; a.k.a.
UTHMAN, AI-Samman; a,k.a. UTHMAN, Umar), London, England (DOB 30 Dec 1960, alt.
DOB 13 Dec 1960) (individual) [SDGT]
YASIN, Abdul Rahman (a.k.a. TAHA, Abdul Rahman S.; a.k.a. TAHER, Abdul Rahman S.;
a.k,a. YASIN, Abdul Rahman Said; a.k,a. YASIN, Aboud) (DOB 10 Apr 1960; POB
Bloomington, Indiana U.S.A.; SSN 156-92-9858 <U.S.A.>; Passport No. 27082171 <U,S.A. issued 21 lun 1992 in Amman, Jordan>, alt. Passport No. M0887925 <Iraq>; citizen U.S.A.)
(individual) [SDGT]
YULDASHEV, Tohir (a.k.a. YULDASHEV, Takhir), Uzbekistan (individual) [SDGT]
ZIA, Mohammad (a,k.a. ZIA, Ahmad), c/o Ahmed Shah s/o Painda Mohammad aI-Karim Set,
Peshawar, Pakistan; clo Alam General Store Shop 17, Awami Market, Peshawar, Pakistan; clo
Zahir Shah slo Murad Khan Ander Sher, Peshawar, Pakistan (individual) [SDGT]
MUGHNIY AH, Imad Fa'iz (a.k.a, MUGHNIY AH, Imad Fayiz), Senior Intelligence Officer of
HIZBALLAH (DOB 07 Dec 1962, POB Tayr Dibba, Lebanon, Passport No. 432298
<Lebanon» (individual) [SOT] (Already on SON List)
NEWS
1R"E~ASURY
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
October 12, 2001
CONTACT: Sean Miles
(202) 622-2960
J\tlEDIA ADVISORY
Treasury Secretary Paul H. O'Neill will hold a press conference at 12:00 p.m. on
Monday, October 15,2001 at the Fed Ex Hub, 2903 Sprankle Drive, Memphis, TN 38103.
Secretary O'Neill will give infonnal remarks to Federal Express employees.
Press members should arrive one hour prior to this event. For further infonnation, please
contact Pam Roberson at (901) 434-7785.
-30PO-690
For press reiease5, speeches, lJUblic schedules and official biographies. call our 24-hour fax line at (2()2) :322-2040
'U 5 GnYEW,menl P[jflilrlll Office 1998 - 019·5::9
o
EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
TREASURY
OFFICE OF PUBUCAFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C .• 20220. (202) 622-2960
CONTACT: Sean Miles
(202) 622-2960
FOR IlVIMEDIATE RELEASE
October 12, 2001
lVIEDIA ADVISORY
Treasury Secretary Paul H. O'Neill will hold a discussion at the Cleveland Tomorrow
Roundtable Breakfast at 7:30 a.m. on Tuesday, October 16,2001 at the Union Club, 1211 Euclid
Avenue, Cleveland, OH 44115.
This breakfast will only be open to the press for the first five minutes of Secretary
O'Neill's remarks. For further information, please contact Sean Miles at (202) 622-2960.
-30PO-691
For press releases, speeches, public schedules and official biograph ies, call DID' 24-iWlIr fax line ai ,:2{)2) c22-2U,.:jO
'U
So
(.;ru'~frlIn8n1 P[jJHJrlD Office 1998· 019-559
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC ,l1t'FAIRS. 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON. D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 11:30 A.M.
october 15, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $6,000 million to
refund an estimated $12,000 million of publicly held 4-week Treasury bills
maturing October 18, 2001, and to pay down approximately $6,000 million.
Tenders for 4-week Treasury bills to be held on the book-entry records of
TreasuryDirect will not be accepted.
The Federal Reserve System holds $11,279 million of the Treasury bills
maturing on October 18, 2001, in the System Open Market Account (SOMA).
This
amount may be refunded at the highest discount rate of accepted competitive
tenders in this auction up to the balance of the amount not awarded in today's
13-week and 26-week Treasury bill auctions.
Amounts awarded to SOMA will be in
addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International
Monetary Authority (FlMA) 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 allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e . g ., 17. 13 % •
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP), if they meet or exceed the reporting
threshold.
However, Treasury will not include NLPs in the calculation of award
limits for those bidders.
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
highligh ts .
000
Attachment
PO-692
_For press releases, speeches, public schedules and official biographies, call our 2.f.-lzour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED OCTOBER 18, 2001
October 15, 2001
Offering Amount
Public Offering
........................
..........................
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 ...
$6,000 million
$6,000 million
28-day bill
912795 HV 6
October 16, 2001
October 18, 2001
November 15, 2001
May 17, 2001
$32,441 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 three decimals in
increments of .005%, e.g. , 4.215%.
(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 daylight saving time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank
on issue date.
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
October 15, 2001
CONTACT:
Peter Hollenbach
202/691-3502
TREASURY CALLS 7-5/8 PERCENT BONDS OF 2002-07
The Treasury today announced the call for redemption at
par on February 15, 2002, of the 7-5/8% Treasury Bonds of
2002-07, issued February 15, 1977, due February 15, 2007 (CUSIP
No. 912810BX5). There are $4,234 million of these bonds
outstanding, of which $2,668 million are held by private
investors.
Securities not redeemed on February 15, 2002, will
cease to earn interest.
These bonds are being called to reduce the cost of debt
financing.
The 7-5/8% interest rate is significantly above the
current cost of securing financing for the five years remaining
to their maturity. Under current market conditions, we estimate
that the budget outlay savings from the call and refinancing will
be about $300 million.
Payment will be made automatically by the Treasury for
bonds in book-entry form, whether held on the books of the
Federal Reserve Banks or in TreasuryDirect accounts. Bonds held
in coupon or registered form should be presented for redemption
to financial institutions or mailed directly to the Bureau of the
Public Debt, Definitives Section, P.O. Box 426, Parkersburg, WV
26106-0426.
000
PO-693
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
October 15, 2001
Contact: Mike White
(202) 354-7577
MEDIA ADVISORY
U.S. Treasurer Rosario Marin, Kentucky Governor Paul
E. Patton, and U.S. Mint Director Henrietta Holsman Fore
Launch Quarter Honoring Kentucky
U.S. Treasurer Rosario Marin and Mint Director
Henrietta Holsman Fore join Kentucky Governor Paul E.
Patton on Thursday, Oct. 18, 2001 for the official launch
of the new Kentucky quarter.
The new quarter's design features Federal
Hill, a prominent symbol of the state, known as "My Old
Kentucky Home." The design shows the side view of the
famous Bardstown home where Stephen Foster penned the state
song, "My Old Kentucky Home," and a thoroughbred horse
standing behind a fence in the foreground.
The Kentucky quarter is the 15th quarter released
under the U.S. Mint 50 State Quarters (tm) Program, and the
fifth and final quarter released in 2001.
Launched in
1999, the 50 State Quarters Program is a 10-year initiative
honoring each of the nation's states in the order they
ratified the Constitution or joined the Union.
WHO:
Rosario Marin, United States Treasurer
The Honorable Paul E. Patton, Governor of
Kentucky
Kentucky First Lady Judi Patton
Henrietta Holsman Fore, Director of the
United States Mint
WHEN:
Thursday, October 18, 2001
Ceremony begins at 11:00 a.m.
PO-694
!ar press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
WHERE:
Federal Hill, "My Old Kentucky Home" State Park
Bardstown, Kentucky
CONTACT:
Cynthia Meals, u.S. Mint (202) 257-9341
Channell Barbour, Governor's office (502) 5642611
RSVP:
RSVP REQUESTED
RELATED EVENT:
U.S. Treasurer Rosario Marin and Starr Lewis, Kentucky
Associate Commissioner for Academic and Professional
Development, will attend an assembly at Bardstown
Elementary School, 420 North Fifth Street, Bardstown,
KY 40004.
The event will begin 1:30 p.m. and will focus
on educational aspects of the 50 State Quarters Program.
Media are encouraged to attend.
-30-
PUBLIC DEBT NEWS
epartment 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
october 15, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
October 18, 2001
January 17, 2002
912795JC6
Term:
Issue Date:
Maturity Date:
CUSIP Number:
2.200%
High Rate:
Investment Rate 1/:
Price:
2.243%
99.444
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 91.96%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
28,852,743
1, 284,074
310,000
$
l3,000,4492/
30,446,817
SUBTOTAL
4,3l3,256
4,3l3,256
Federal Reserve
$
TOTAL
34,760,073
11,406,375
1,284,074
310,000
$
17,3l3,705
Median rate
2.195%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
2.170%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 30,446,817 / 13,000,449 = 2.34
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT
=
$1,024,131,000
PO-695
http://www.publicdebt.treas.gov
PUBLIC DEBT NEWS
epartment of the Treasury· Bureau of the Public Debt· Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
Office of Financing
202-691-3550
CONTACT:
FOR IMMEDIATE RELEASE
october 15, 2001
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
October 18, 2001
April 18, 2002
912795JQ5
Term:
Issue Date:
Maturity Date:
CUSIP Number:
2.160%
High Rate:
Investment Rate 1/:
Price:
2.214%
98.908
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 85.17%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
competitive
Noncompetitive
FIMA (noncompetitive)
$
25,943,829
850,219
50,000
$
4,559,202
4,559,202
Federal Reserve
$
31,403,250
11,099,899
850,219
50,000
12,000,1182/
26,844,048
SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
$
16,559,320
Median rate
2.150%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
2.110%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 26,844,048 / 12,000,118 = 2.24
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $653,944,000
http://www.publicdebt.treas.gov
PO-696
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
u.s. International Reserve Position October
17, 2001
u.s.
The Treasury Department today released
reserve assets data for the week ending October 12,2001. As indicated in
this table,
reserve assets totaled $70,629 million as of October 12, 2001, dovm from $71,072 million as of October 5,
2001.
us.
(in US millions)
5. 2001
71.072
I. Official U.S. Reserve Assets
TOTAL
1. Foreign Currency Reserves
October 12.2001
October
1
I
a. Securities
EurI'J
5.3:::6
YF?rl
10.-' 13
70.629
Euro
TOTAL
15.;'5-'
5561
Yen
TOTAL
11 . .:';"
i Il
,
0
Of which. Issuer headquartered In the U. S.
\~:~=
b. Total deposits with:
b.i. Other central banks and BIS
:'.703
:,.~-I-=
~J,'j7f3
9.:337
.+ ,)-,:
.'.,~c~
I)
C
b.ii. Of which. banks loc3ted abroad
)
'.
b.iii. Banks headquartered outside the U.S.
)
b.ii. Banks headquartered in the U.S.
. IMF Reserve Position
. Special Drawing Rights (SORs)
Gold Stock
3
Other Reserve Assets
12 :292
2
2
,
:"".1']'
~ O.~07
,L.
,
', ,, JJJ
~
j.+.+
'J
II 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
lepOSits reflect carrying values.
I 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 SDRIdoliar exchange rate for the reporting date. The IMF data for October 5 are final. The entries in the table
bove for October 12 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF
3ta.
Gold stock is valued monthly at $42.2222 per fine troy ounce. Values shown are as of August 31,2001. The July 31,2001 value was
11,044 million.
-697
,;
0
b.iii. Of which. banks located ill the U.S.
c...'~_
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
October 5. 2001
1. Foreign currency loans and securities
October 12. 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.a. Short positions
2.b. Long positions
3. Other
o
o
III. Contingent Short-Term Net Drains on Foreign Currency Assets
October 5. 2001
1. Contingent liabilities in foreign currency
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.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
4.8. 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
October 12. 2001
o
o
o
o
o
o
o
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
Office of Financing
202-691-3550
CONTACT:
FOR IMMEDIATE RELEASE
october 16, 2001
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
28-Day Bill
October 18, 2001
November 15, 2001
912795HV6
Term:
Issue Date:
Maturity Date:
CUSIP Number:
2.280%
High Rate:
Investment Rate 1/:
Price:
2.311%
99.823
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 51.09%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
21,347,500
19,681
$
$
5,980,367
19,681
o
o
21,367,181
6,000,048
2,406,317
2,406,317
Federal Reserve
TOTAL
Accepted
Tendered
Tender Type
23,773,498
$
8,406,365
Median rate
2.270%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
2.250%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 21,367,181 /
6,000,048
=
3.56
1/ Equivalent coupon-issue yield.
PO-698
http://www.publicdebt.treas.gov
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
~GOED
UNTIL 9:00 A.M.
October 17, 2001
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960
TREASURY ANNOUNCES DEBT BUYBACK OPERATION
On October 18, 2001, the Treasury will buy back up to $1,500 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.
~e
The debt buyback operation regulations are available on the Bureau of
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
lO-699
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
October 17, 2001
Par amount to be bought back ... Up to $1,500 million
Operation date ................. October 18,2001
Operation close time ........... 11:00 a.m. eastern daylight saving time
Settlement date ................ October 22,2001
~nimum 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
f--
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*
16,202
22,659
9,704
10,454
11,410
12,838
9,683
10,993
10,211
9,966
22,046
146,166
Par Amount
Privately
Held*
13,567
21,051
8,089
8,861
9,611
11,674
8,069
9,269
8,758
8,326
18,698
125,973
Par Amount
Held as
STRIPS**
5,940
3,069
6,268
6,877
4,210
1,807
2,723
5,617
3,252
2,578
10,346
52,687
* Par amounts are as of October 16, 2001.
** Par amounts are as of October 15, 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.
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 2: 30 P.M.
october 17, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY TO AUCTION $19,000 MILLION OF 2-YEAR NOTES
The Treasury will auction $19,000 million of 2-year notes to refund $27,693
million of publicly held notes maturing October 31, 2001, and to pay down about
$8,693 million.
In addition to the public holdings, Federal Reserve Banks hold $6,143 million
of the maturing notes for their own accounts, which may be refunded by issuing
~ additional amount of the new security.
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
ncncompetitive bids will have a limit of $200 million per account ~.d 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 $526 million into the 2-year note.
The auction will be conducted
tive and noncompetitive awards will
tenders.
The allocation percentage
be rounded up to the next hundredth
in the single-price auction format. All competibe at the highest yield of accepted competitive
applied to bids awarded at the highest yield will
of a whole percentage point, e.g., 17.13%.
The notes 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 BookEntry 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
J-700
~ press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERING TO THE PUBLIC OF
2-YEAR NOTES TO BE ISSUED OCTOBER 31, 2001
October 17, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,000 million
Publ~c Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,000 million
Description of Offering:
Term and type of security . . . . . . . . . . . . . . . . . . . . .
Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Auction date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dated date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2-year notes
V-2003
912827 7E 6
October 24, 2001
October 31, 2001
October 31, 2001
October 31,2003
Determined based on the highest
accepted competitive bid
yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
Interest payment dates . . . . . . . . . . . . . . . . . . . . . . . . April 30 and October 31
~nimum bid amount and multiples .............. $1,000
Accrued interest payable by investor .......... None
Premium or discount . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
STRIPS Information:
amount required . . . . . . . . . . . . . . . . . . . . . . . $1,000
Corpus CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . 912820 GP 6
Due date(s) and CUSIP number(s)
for additional TINT(s) . . . . . . . . . . . . . . . . . . . . . . October 31, 2003 - - 912833 YK 0
~nimum
Submission of Bids:
Noncompetitive bids:
Accepted in full up to $5 million 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 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 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
Max~mum Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% of public offering
Receipt of Tenders:
Noncompetitive tenders:
Prior to 12:00 noon eastern daylight saving time on auction day.
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving 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 wh~ch authorizes a charge to their account of record at their
financial institut~on on issue date.
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
October 18,2001
For Immediate Release
Contact: Tara Bradshaw
(202) 622-2014
TREASURY, IRS PROVIDE ADDITIONAL DISASTER RELIEF WITH
MID-QUARTER CONVENTION RELIEF
Today the Treasury Department and the Internal Revenue Service issued guidance providing
taxpayers relief from the application ofthe mid-quarter convention contained in the depreciation
rules of the Internal Revenue Code.
The mid-quarter convention can limit taxpayers' depreciation if they acquire more than 40
percent of their depreciable property during the fourth quarter of their taxable year. Under the
Notice issued today, taxpayers may elect not to apply the mid-quarter convention if their third
quarter includes September 11, 2001.
The Internal Revenue Service and the Treasury Department noted that the September 1I, 200 I
terrorist attacks have disrupted many taxpayers' plans to complete the acquisition and placing in
service of depreciable property prior to the beginning of their fourth quarter. The unintended
decline in the acquisition of depreciable property prior to the fourth quarter could result in
application of the mid-quarter convention, which would reduce incentives to invest in the final
quarter of the year. This could cause taxpayers to decide to delay investments in depreciable
property until next year.
"We want to remove any barriers to investment in depreciable property caused by disruptions
resulting from September 11," stated Mark Weinberger, Treasury Assistant Secretary (Tax
Policy). "Providing taxpayers with relief from the mid-quarter convention will eliminate any
potential disincentive to invest caused by the mid-quarter convention by allowing taxpayers the
full amount of depreciation they would have received had they been able to complete more
acquisitions prior to their fourth quarter."
-30-
A copy of Notice 2001-70 is attached.
PO-701
lor press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
Part III - Administrative, Procedural, and Miscellaneous
Additional disaster relief for taxpayers affected by the September 11, 2001,
terrorist attack - mid-quarter convention relief.
Notice 2001- 70
This notice announces that the Treasury Department and the Internal Revenue Service
intend to issue regulations permitting taxpayers to elect not to apply the mid-quarter convention
rules contained in § 168(d)(3) of the Internal Revenue Code to certain property placed in service
in the taxable year that includes September 11, 2001. This notice also provides taxpayers a
mechanism for making the election before regulations are issued.
Section 168( d)(3) generally provides that, except as provided in regulations, if the
aggregate basis of property placed in service during the last three months of the taxable year
exceeds 40 percent of the aggregate basis of property (other than property described in §
I68(d)(3)(B)) placed in service during the taxable year, the applicable depreciation convention
for all property (other than property described in § 168(d)(2)) to which § 168 applies placed in
service during the taxable year is the mid-quarter convention.
Many taxpayers time the acquisition and placing in service of property within a taxable
year to avoid application of the mid-quarter convention. Treasury and the Service have been
made aware that, as a result of events related to the September 11, 2001, terrorist attacks, many
taxpayers have encountered difficulty completing the acquisition and placing in service of
property in accordance with plans developed earlier in the year, and certain taxpayers would
choose to delay acquisition and placing of property in service during the last quarter of their
taxable year if failing to delay would result in application of the mid-quarter convention.
Accordingly, ifthe third quarter of the taxpayer's 2001 taxable year includes September
11,2001, then the taxpayer may elect to apply the half-year convention to all property (other
than property described in § 168( d)(2)) placed in service during the taxpayer's 2001 taxable year
for purposes of § 168(d).
To make the election under this notice, a taxpayer must write "Election Pursuant to
Notice 2001- 70" across the top of its Form 4562, Depreciation and Amortization, for the
taxpayer's taxable year that includes September 11, 2001.
Treasury and the Service intend to amend the regulations under § 168 to incorporate the
guidance set forth in this notice. Until the regulations are amended, taxpayers may rely on the
guidance set forth in this notice.
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
Contact: Office of Financing
202-691-3550
FOR IMMEDIATE RELEASE
October 19,2001
TREASURY'S INFLATION-INDEXED SECURITIES
NOVEMBER 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 November for the following Treasury inflation-indexed securities:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
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
4-114% 10-year notes due January 15,2010
3-1/2% 10-year notes due January 15,2011
3-3/8% 30-1/2-year bonds due April 15,2032
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 cpr 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 702. The information is also available
on the Internet at Public Debt's website (http://www.publicdebttreas.gov).
The information for December is expected to be released on November 16,2001.
000
Attachment
PO-702
http://www.publicdebt.treas.gov
TREASURY INFLATION-INDEXED SECURITIES
Ref CPI anp Index Ratios for
November 2001
I
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
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
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
RefCPI
Index Ratio
Index Ratio
Index Ratio
Index Ratio
177.50000
177.52667
177.55333
177.58000
177.60667
177.63333
177.66000
177.68667
177.71333
177.74000
177.76667
177.79333
177.82000
177.84667
177.87333
177.90000
177.92667
177.95333
177.98000
178.00667
178.03333
178.06000
178.08667
178.11333
178.14000
178.16667
178.19333
178.22000
178.24667
178.27333
1.12033
1.12050
1.12067
1.12083
1.12100
1.12117
1.12134
1.12151
1.12168
1.12184
1.12201
1.12218
1.12235
1.12252
1.12269
1.12285
1.12302
1.12319
1.12336
1.12353
1.12370
1.12386
1.12403
1.12420
1.12437
1.12454
1.12471
1.12487
1.12504
1.12521
1.10830
1.10847
1.10864
1.10880
1.10897
1.10913
1.10930
1.10947
1.10963
1.10980
1.10997
1.11013
1.11030
1.11047
1.11063
1.11080
1.11097
1.11113
1.11130
1.11147
1.11163
1.11180
1.11197
1.11213
1.11230
1.11247
1.11263
1.11280
1.11296
1.11313
1.09870
1.09886
1.09903
1.09919
1.09936
1.09952
1.09969
1.09985
1.10002
1.10018
1.10035
1.10051
1.10068
1.10084
1.10101
1.10117
1.10134
1.10150
1.10167
1.10183
1.10200
1.10216
1.10233
1.10249
1.10266
1.10282
1.10299
1.10315
1.10332
1.10348
1.09744
1.09761
1.09777
1.09793
1.09810
1.09826
1.09843
1.09859
1.09876
1.09892
1.09909
1.09925
1.09942
1.09958
1.09975
1.09991
1.10008
1.10024
1.10041
1.10057
1.10074
1.10090
1.10107
1.10123
1.10140
1.10156
1.10173
1.10189
1.10206
1.10222
July 2001
CPI-U (NSA) for:
-
--
177.5
August 2001
-
177.5
----~-----
September 2001
_.-
178.3
TREASURY INFLATION-INDEXED SECURITIES
Ret CPI and Index Ratios tor
Nov!lmber 2001
I
I
!
Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):
Maturity Date:
Ref CPI on Dated Date:
Date
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
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;
3-718% 10-Year Notes
Series A-2009
9128274Y5
January 15, 1999
January 15, 1999
July 15, 1999
January 15, 2009
164.00000
3-718% 30-Year Bonds
Bonds at 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
Se ries A-20 11
9128276R8
January 15, 2001
January 16, 2001
July 16, 2001
January 15, 2010
168.24516
January 15, 2011
174.04516
RefCPI
Index Ratio
Index Ratio
Index Ratio
Index Ratio
177.50000
177.52667
177.55333
177.58000
177.60667
177.63333
177.66000
177.68667
177.71333
177.74000
177.76667
177.79333
177.82000
177.84667
177.87333
177.90000
177.92667
177.95333
177.98000
178.00667
178.03333
178.06000
178.08667
178.11333
178.14000
178.16667
178.19333
178.22000
178.24667
178.27333
1.08232
1.08248
1.08264
1.08280
1.08297
1.08313
1.08329
1.08346
1.08362
1.08378
1.08394
1.08411
1.08427
1.08443
1.08459
1.08476
1.08492
1.08508
1.08524
1.08541
1.08557
1.08573
1.08589
1.08606
1.08622
1.08638
1.08654
1.08671
1.08687
1.08703
1.07973
1.07989
1.08005
1.08021
1.08038
1.08054
1.08070
1.08086
1.08103
1.08119
1.08135
1.08151
1.08167
1.08184
1.08200
1.08216
1.08232
1.08249
1.08265
1.08281
1.08297
1.08313
1.08330
1.08346
1.08362
1.08378
1.08395
1.08411
1.08427
1.08443
1.05501
1.05517
1.05533
1.05548
1.05564
1.05580
1.05596
1.05612
1.05628
1.05643
1.05659
1.05675
1.05691
1.05707
1.05723
1.05739
1.05754
1.05770
1.05786
1.05802
1.05818
1.05834
1.05850
1.05865
1.05881
1.05897
1.05913
1.05929
1.05945
1.05960
1.01985
1.02000
1.02016
1.02031
1.02046
1.02062
1.02077
1.02092
1.02108
1.02123
1.02138
1.02154
1.02169
1.02184
1.02200
1.02215
1.02230
1.02245
1.02261
1.02276
1.02291
1.02307
1.02322
1.02337
1.02353
1.02368
1.02383
1.02399
1.02414
1.02429
July 2001
177.5
August 2001
177.5
September 2001
-
---
178.3
TREASURY INFL-ATION-INDEXED SECURITIES
Ref CPI and Index Ratios for
November 2001
I
I
I
Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):
Bonds of April 2032
912810FQ6
October 15, 2001
October 15, 2001
Maturity Date:
Ref CPI on Dated Date:
April 15, 2032
177.50000
Date
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
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:
-
3-3/8% 30-1/2-Year Bonds
RefCPI
Index Ratio
177.50000
177.52667
177.55333
177.58000
177.60667
177.63333
177.66000
177.68667
177.71333
177.74000
177.76667
177.79333
177.82000
177.84667
177.87333
177.90000
177.92667
177.95333
177.98000
178.00667
178.03333
178.06000
178.08667
178.11333
178.14000
178.16667
178.19333
178.22000
178.24667
178.27333
1.00000
1.00015
1.00030
1.00045
1.00060
1.00075
1.00090
1.00105
1.00120
1.00135
1.00150
1.00165
1.00180
1.00195
1.00210
1.00225
1.00240
1.00255
1.00270
1.00285
1.00300
1.00315
1.00331
1.00346
1.00361
1.00376
1.00391
1.00406
1.00421
1.00436
July 2001
177.5
August 2001
177.5
September 2001
-
178.3
NEWS
TREASURY
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 2: 30 P.M.
October 18, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction 13-week and 26-week Treasury bills totaling
$27,000 million to refund an estimated $22,951 million of publicly held 13week and 26-week Treasury bills maturing October 25, 2001, and to raise new
cash of approximately $4,049 million. Also maturing is an estimated $10,000
million of publicly held 4-week Treasury bills, the disposition of which will
be announced October 22, 2001.
The Federal Reserve System holds $11,256 million of the Treasury bills
maturing on October 25, 2001, in the System Open Market Account (SOMA).
This
amount may be refunded at the highest discount rate of accepted competitive
tenders either in these auctions or the 4-week Treasury bill auction to be
held October 23, 2001. Amounts awarded to SOMA will be in addition tv 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 cf 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 $1,030 million into the 13-week bill and $1,041
million into the 26-week bill.
The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
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.
PO-703
000
Attachment
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 OCTOBER 25, 2001
October 18, 2001
Offering Amount
Public Offering
$14,000 million
$14,000 million
$13,000 million
$13,000 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 JD 4
October 22,2001
October 25,2001
January 24,2002
July 26,2001
$19,581 million
$1,000
182-day bill
912795 JR 3
October 22, 2001
October 25, 2001
April 25, 2002
October 25, 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 daylight saving time on auction day
Competitive tenders ...... Prior to 1:00 p.m. eastern daylight saving 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.
TreasuryDirec't customers can use the Pay Direct feature which authorizes a charge
to their account of record at their financia1 institution on issue date.
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
October 18, 2001
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT:
Office of Public Affairs
202 - 622 -2 960
TREASURY DEBT BUYBACK OPERATION RESULTS
Today, Treasury completed a debt buyback (redemption) operation for $1,500 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 October 22, 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):
NillWer of Issues Eligible:
For Operation:
For Which Offers were Accepted:
Weighted Average Yield
of all Accepted Offers (%):
Weighted Average Maturi ty
for all Accepted Securities (in years) :
$5,632
1,500
1,788
11
5
5.386
24.9
Details for each issue accompany this release.
PO-704
For press releases, speeches, public schedules alld official biographies, call our U-hOllr fax line at (202) 622-2040
October 18, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS
(amounts in millions, prices in decimals)
Table I
Coupon
,
("')
~
Maturity
J::&ll
Par
Amount
Offered
7.125
6.250
7.500
7.625
6.875
6.000
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
02/1.5/2027
08/15/2027
11/15/2027
807
191
358
714
426
377
891
398
632
583
255
R 2. t
Par
Amount
Accented
Highest
Accepted
Weighted
Average
Accepted
~
~
0
0
0
325
0
0
397
103
312
363
0
N/A
N/A
N/A
129.750
N/A
N/A
118.531
115.156
116.968
113.687
N/A
N/A
N/A
N/A
129.740
N/A
N/A
118.504
115.155
116.936
113.657
N/A
Weighted
Average
Accepted
Y.i&l.sj
l.
N/A
N/A
N/A
5.373
N/A
N/A
5.389
5.390
5.390
5.389
N/A
Table II
Coupon
R 2. t
~
("')
0
7.125
6.250
7.500
7.625
6.875
6.000
6.750
6.500
6.625
6.375
6.125
J::&ll
CUSIP
Nmb
~r:
l.!
Lowest
Accepted
l.
Xll.ls;l
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
N/A
N/A
N/A
5.372
N/A
N/A
5.387
5.390
5.388
5.387
N/A
Maturity
Total Par Amount Offered:
Total Par Amount Accepted:
Par Amount
P rl.Y2. t
5,632
1,500
Note: Due to rounding, details may not add to totals.
*Amount
outsta~ding
after operation. Calculated
u3i~g
amounts reported on announcement.
~
1 y. H ~ Id*
13,567
21,051
8,089
8,536
9,611
11,674
7,672
9,166
8,446
7,963
18,698
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
October 19,2001
Contact: Michele Davis
(202) 622-2920
STATEMENT BY TREASURY SECRETARY PAUL O'NEILL AT THE WHITE HOUSE
The terrorist attacks of September 11 sent shockwaves through our economy. But we will
recover. This nation, its people, and its economy will continue to excel.
How quickly our economy recovers will depend in large part on how fast consumers
regain their confidence and on our success in incorporating new protections against possible
terrorist acts without material reductions in productivity.
We are seeing concrete signs that we are beginning to regain our economic footing.
Consumers are returning to the stores, airline usage is increasing and there are buyers again for
'big ticket' goods such as automobiles.
And we are working with Congress on a tax relief package to support our recovery. The
House will vote next week on a bill that includes all the elements the President has called for to
restore consumer spending, boost business investment and help those directly affected by the
September 11 attacks. To boost spending and investment, he has asked Congress to speed the
implementation of the income tax rate cuts enacted this spring. He has asked the Congress to
accelerate the expensing of business investment and eliminate the corporate AMT. He has also
asked Congress to provide tax relief to low and middle-income Americans.
The final piece of President's economic recovery plan is expanding global trade. As I've
said before, our world is more interconnected than we realize. At no time is that more obvious
than now, as the President builds an international coalition to take on terrorism. The President
must have Trade Promotion Authority so that the United States can continue to lead the world in
a global effort to increase the flow of goods, services, knowledge and ideas that improve living
standards here and around the world.
Together, Trade Promotion Authority and the economic growth package we are currently
negotiating with Congress are an effective battle plan to assure that our economy can support our
efforts to engage an enemy the like of which we have never seen before. We'll work with the
Congress to speed a return to economic strength, proving that no terror can destroy America's
prosperity.
-30-
PO-70S
_ For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Print Ina Office 1998· 619·559
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
October 22, 2001
For Immediate Release
Contact: Tara Bradshaw
(202) 622-2960
TREASURY PROVIDES GUIDANCE ON CATCH-UP CONTRIBUTIONS
Today the Treasury Department issued proposed regulations on the catch-up contribution
provisions, section 414(v) of the Internal Revenue Code, contained in the Economic Growth and
Tax Relief Reconciliation Act of 2001 (EGTRRA). EGTRRA provides that, etTective January 1,
2002, individuals that are 50 years old may make additional contributions to their 401(k), 403(b)
or 457 savings plans, after they are subject to a statuary or plan limitation on making
contributions. When fully implemented in 2005, these individuals age 50 and above will be
allowed to save an additional $5,000 a year.
The proposed regulations issued provide guidance concerning the requirements for retirement
savings plans providing catch-up contributions to individuals age 50 or older. The proposed
regulations clarify:
•
•
•
•
Who is eligible to make catch-up contributions;
Which plans can offer catch-up contributions;
How plan administrators can determine what is a catch-up contribution;
The treatment of catch-up contributions in the operation ofthe plan.
"This catch-up contribution is a great opportunity for individuals age 50 and above to put
away additional money for their retirement. Plan sponsors are very interested in providing this
additional saving opportunity to their employees as soon as the provision is effective. We have
provided simple and straightforward rules that plan administrators will be able to use in order to
implement catch-up contribution provisions in their plans by the January 1, 2002 effective date,"
stated Mark \Veinberger, Treasury Assistant Secretary for Tax Policy.
The proposed regulations are available on the website at www.treas.gov.
-30PO-706
-F()1'press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Prlntlno Oflicp. 1998· 619·559
NEWS
~~--
--
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 12:00 P.M. EDT
October 22, 2001
Contact: Tasia Scolinos
(202) 622-2960
UNDER SECRETARY JIMMY GURULE
SPEECH BEFORE THE ABA MONEY LAUNDERING CONFERENCE LUNCHEON
CRYSTAL GATEWAY MARRIOTT
Introduction:
Thank you for that gracious introduction. It is a pleasure to be here with you today to
discuss the Treasury Department's ongoing efforts in the fight against money laundering.
When I was confirmed as Under Secretary for Enforcement in August, I identified money
laundering as my top priority. However, the goal of aggressive enforcement of the federal money
laws has taken on a new focus and meaning following the tragic and horrific attacks of
September 11 th
The Treasury Department is now waging a multi-lateral battle to break the financial
backbone of terrorist groups and their financiers. Although the complexities of money
laundering have long been associated with concealing the true source and nature of drug
proceeds, the attacks of September 11 th clearly underscore the need for aggressive and vigilant
anti-money laundering efforts which target the movement of funds into this country earmarked
for terror.
As President Bush stated on September 24 th " [W]e will direct every resource at our
command to win the war against terrorists: every means of diplomacy, every tool of intelligence,
every instrument of law enforcement, every financial influence. We will starve the terrorists of
funding, tum them against each other, rout them out of their safe hiding places and bring them to
justice."
The Treasury Department is following the President's orders. We are directing our assets
to financially paralyze and marginalize those who serve as financial supporters and
intermediaries for terrorists. Let me be clear - we are at war with the terrorists and as the
President has stated on numerous occasions. This will be a multi-faceted effort designed to attack
our faceless enemy from every side. The Treasury Department is playing a key role in this new
and unconventional war with respect to dismantling the maze of money that makes these
atrocious acts possible.
PO-707
_For press releases, speeches, public schedules and official ~ograPhies, call our 24-hour fax line at (202) 622-2040
~
This, however, is not a battle that we can win unilaterally. At every stage of our efforts,
we must work in close partnership with other government agencies, the private sector, and our
global partners to achieve success. For this is war that threatens our way of life and a war that
we must win together.
I would like to outline for you today three principle components of our strategy to choke
the flow of terrorist funds. First, we have established the inter-agency Foreign Terrorist Asset
Tracking Center (FT AT) dedicated to identifying and disrupting the sources of terrorist
financing. Second, we have created a strong, inter-active private-public partnership with the
financial industry to crack down on those who criminally misuse and corrupt the international
financial system. Third, we are working closely with our foreign partners on a bilateral and
multilateral basis to effect concrete results in finding and freezing terrorist funds.
Along these lines, let me share the facts about our Foreign Terrorist Asset Tracking
Center, a new proactive, preventative strategy for waging the financial war.
Foreign Terrorist Asset Tracking Center
(1) Clearinghouse for analyzing information from federal law enforcement, BSA database,
general sources or public sources, and the intelligence community.
(2) Inter-agency cooperative venture consisting of Treasury assets, including OFAC, FinCEN,
the various Bureaus, as well as the FBI and the intelligence community.
(3) Purpose is to identify, disrupt and dismantle complex financial terrorist networks.
(4) Proactive, preventative and strategic.
(5) Endgame is blocking assets and prohibiting transactions with persons who commit, threaten
to commit, or support terrorism.
We have directed the financial forensic expertise of our Treasury law enforcement agents (in
particular from the Secret Service, Customs, and IRS-CI) to engage in the battle against terrorist
financing. Our agents have contributed since September 11th to deciphering the financial puzzle
of the attack and are now concentrating on disrupting financial flows to terrorists.
Public-Private Partnership:
Our victory will not solely emerge from law enforcement efforts, but will also depend
upon pUblic-private partnership. Public-private partnership is a principle that is of particular
relevance to many of you here today and a theme that is stressed repeatedly in the Bush
Administration's 2001 National Money Laundering Strategy. A strong, interactive private-public
partnership between government and the financial industry is imperative to a successful crack
down on money launderers and others attempting to misuse the international financial system.
The terrorists and other wrongdoers are constantly seeking new, creative ways to move money
around the world. This is a problem of global proportions and one that needs to be addressed
jointly by both the private and public sectors for maximum effectiveness.
2
In the past, the public and private sectors have worked well together; as seen with the
increased utilization of SARs - Suspicious Activity Reports - filed routinely by the banks. In
fact, since September 11 FinCEN has taken steps to streamline SAR reporting requirements.
For instance, FinCEN has set up a toll free number, 1-866-556-3974, to enable banks to file
SARs over the phone. We are also in the process of exploring new technologies that would
expedite the SAR filing process.
t\
I also hope to forge a pUblic-private partnership on the topic of Currency Transaction
Report exemptions. Currently, FinCEN receives roughly thirteen million CTRs a year. It is
estimated that approximately 30% of those do not need to be filed under existing exemption
regulations. In the coming months I will be working closely with the financial industry to better
utilize the exemption rules. Proper use of the exemptions would provide law enforcement with
data purged of meaningless reports. This would be extremely helpful in an age when law
enforcement is inundated by more information than they can sometimes process.
The Treasury Department has also supported new anti-money laundering legislation
intended to address current deficiencies in our nation's anti-money laundering laws.
The new legislation grants the Secretary of the Treasury an array of options (special
measures) to deal with jurisdictions, entities, or systems that pose a primary money laundering
concern. This new authority fills a gap in what steps the Treasury can take to deal with targeted
money laundering concerns. For instance, the legislation designates foreign corruption as a
specified unlawful activity (but limited to offenses that are defined as crimes within the United
States).
The new law also addresses bulk cash smuggling.
I have already met with leaders from the financial industry to discuss some of these
proposals and I anticipate further dialogue with the industry in the weeks and months to come.
However, as we all know, the public-private relationship can become even stronger. Success in this war depends on both of our sectors working together. To this end, I envision a close
working relationship between the financial industry and law enforcement with respect to
typologies and patterns that are indicative of money laundering activities. Over the next few
weeks, we will develop these typologies and share them with you to assist you in identifying
money launders.
International Cooperation:
As I stated earlier, money laundering is a problem of global proportions. President Bush
signed an Executive Order on September 24 providing the Secretary of the Treasury with the
tools to build an international coalition to disrupt terrorist financing. Under the Executive Order,
66 individuals, entities, organizations have been designated as terrorist financing sources. Banks
in the United States are required to block their accounts. Under the Executive Order, foreign
banks that do not cooperate may also have their US assets blocked, causing them to lose their
access to US capital markets.
3
144 countries have committed to joining the international effort to disrupt terrorist's
assets. The civilized world has spoken with one voice - individuals and organizations that infuse
these terrorist organizations with money are no better than the terrorists perpetrating these acts.
In addition, Secretary O'Neill met personally with his G-7 counterparts two weeks ago to
discuss a joint plan of attack and to coordinate ongoing efforts. Specifically, the G-7 called on all
countries to establish functional Financial Investigative Units as soon as possible. In addition all
of the G-7 countries will join the Egmont Group which promotes cooperation between national
FIUs with particular emphasis on the sharing of information between FlUs.
Immediately following the September 11 th attacks, we began engaging the multilateral
Financial Action Task Force on Money Laundering, comprised of29 countries and two regional
bodies, in the international battle against terrorism. F ATF has been extremely effective in
encouraging and cajoling countries to make dramatic changes in their anti-money laundering
regimes. The G-7 followed our lead and called on FATF to take action. FATF provides a
unique opportunity for us to work internationally with other member countries to require that
countries in good standing with F ATF have rules or regulations in place to address the issue of
terrorist fundraising within their borders. The FATF is convening an emergency plenary meeting
here in Washington next week to discuss specific proposals to be incorporated into the FATF' s
Forty Recommendations. The purpose of the plenary meeting is to refocus the FATF process to
address terrorist financing. It is here that we will develop money-laundering typologies that will
be shared with you.
Among the proposals under consideration are:
1. Ratification of the U.N. Terrorist Financing Convention.
2. Criminalizing terrorist financing.
3. International assistance relating to terrorist financing.
4. SAR requirements for terrorist financing: If a financial institution knows, or suspects or
has reason to suspect that funds are involved in, generated or held fOf, directed to, used by,
used to support or represent the proceeds of acts of, terrorists or their organizations, it should
be required to report promptly relevant information to the competent authorities.
5. Alternate remittance systems - Senders of money and their subagents, or any other person
who engages as a business in the transmission of funds, including through infonnal value
transfer systems or facilitation or the transfer of value outside of conventional financial
institutions, should register with competent authorities, and should comply with FATF
Recommendations 12.
4
6. Freezing/Seizing/Confiscating Terrorist Assets - Each country should immediately
implement U.N. resolutions relating to the prevention and suppression of the financing of
terrorist acts, including U.N. Security Council Resolutions 1267, 1333, and 1373. Countries
shall have measures to disrupt and prevent financial benefits and support to terrorists,
including the ability to freeze assets of individuals and organizations with terrorist links.
7. International Wire Transfers - Countries should take measures to require financial
institutions and money remitters to include originator information (name, address and
account number) on funds transfers and related messages sent to and from their country and
the information should remain with the transfer or related message through the point of
disbursement
Conclusion:
After the September 11 th attacks, I visited the Pentagon and Ground Zero, the site of the
World Trade Center's remains. I saw the unforgettable horror and devastation created by our
enemies. I will never forget this sight. As I looked out at the ruins, I knew tangibly that we are
at war - at war against a faceless enemy that uses money to wreak havoc and pain on innocent
civilians. We are at war with an enemy who will use money from so-called charities or
businesses to bloody our democracy.
The Treasury Department is dedicated to taking the war directly to the terrorists by
draining their financial lifeblood and marginalizing them from the legitimate financial
marketplace. Ours is a battle that cannot be won alone and it cannot be won using conventional
means. Victory over this terrorist threat, in its many forms, will take cooperation at all levels of
government, with you in the private sector, and with our foreign partners. It is only in unison
and with innovative new strategies that we can stamp out the scourge of terrorism.
That is what we have begun to do. I assure you that Treasury will continue to pursue
money launderers and terrorist financiers aggressively, methodically, and in close coordination
with our partners using every tool that we have at our disposal. This is a financial war that we
must win together.
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5
TREASURY
NEWS
--
~~--
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 1 :30 P.M. EDT
October 22, 2001
Contact: Betsy Holahan
(202) 622-2960
TERRORISM RISK INSURANCE
TREASURY ASSIST ANT SECRETRY SHEILA BAIR
REMARKS TO THE NATIONAL ASSOCIATION OF INSURANCE
COMMISSIONER'S INSURANCE SUMMIT
OMNI SHOREHAM HOTEL
Good afternoon and thank you for this opportunity to speak before you today. Over the
past several weeks I have had the opportunity to work closely with a number of you on an
economic issue of great importance to our country.
Let me begin by thanking the NAIC for the cooperative spirit with which you, as an
organization, have assisted the Administration in dealing with the impact on the insurance
industry of the September 11 terrorist attacks.
I have had the privilege of speaking to a number of you, in person or by conference call.
I would especially like to acknowledge Kathleen Sebelius -- a fellow Kansan -- Terri Vaughan,
Greg Serio, Cathy Wetherford, and David Wetmore for their ongoing assistance and availability.
I know that I have also met with, or spoken to, other commissioners and NAIC staff, and I am
grateful to you all.
The problem before us is real. It is not a problem of solvency -- despite enduring
enormous losses on September 11, the insurance industry is making good on those claims and
will remain strong. The problem is one of uncertainty. Insurance companies facilitate economic
activity by reducing risk. To do this, they must know the general distribution of possible
outcomes associated with the risks they underwrite.
After September 11, however, insurance companies have no sense of the risk distribution
associated with possible future acts of terrorism. For the moment, the uncertainty associated
with terrorism risk leaves the industry unable to assess and price risk. As a result, it is not the
industry that is at risk, it is the economy. Insurance companies will - and some already have reacted to this situation by either refusing to extend coverage for acts of terrorism or seeking
exorbitant premiums for such coverage.
PO-708
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-
·U.S Government Prlntlnq Office 1998 - 619-559
At a time when we are working hard to stimulate our economy to aet it movina aaain
b
b
b
,
left unresolved this situation would be a harmful drag on those efforts.
As we began considering this problem at the Treasury, we quickly decided on several
things.
First, any action we took should be limited in duration. What is uncertain today may be
better understood a year, or two years, or three years from now. Thus, our efforts are more akin
to bridging the period from now to when the industry regains its ability to establish a basis for
pricing this risk.
Second, we did not want to engage issues of federal insurance charters or dual federalstate regulation of insurance. There may be a day to talk about such things, but this is not that
time and these are not the circumstances in which that discussion should happen. Indeed, one
objective we have focused on in considering this situation is to rely upon the existing state
regulatory infrastructure as much as possible in crafting a solution.
Our immediate goal is to work with Congress to enact a bill in the next two weeks that
deals with the immediate market disruption.
Let me outline for you now the approach we have been discussing with Congress. This
approach remains a work in progress but resolution of its unresolved issues must happen soon.
Under the approach we have developed, individuals, businesses, and other entities would
continue to obtain property and casualty insurance from insurance providers as they did before
September 11. The terms of the terrorism risk coverage would be unchanged and would be the
same as that for other risks.
Any loss claims resulting from a future terrorist act would be submitted by the
policyholder to the insurance company. The insurance company would process the claim and
pay the policyholder. The insurance company would then submit a claim to the Treasury, which_
would compensate the insurer for that portion of the claim for which the federal government is
responsible according to the loss sharing arrangement established by this approach.
The Treasury would establish a general process by which insurance companies submit
claims. The Treasury would also institute a process for reviewing and auditing claims and for
ensuring that the private/public loss sharing arrangement is apportioned among all insurance
companies in a consistent manner.
All of you -- the state insurance regulators -- would also play an important role in
monitoring the claims process and ensuring the overall integrity of the insurance system. Indeed,
we hope we can rely on the help and support of state insurance regulators in implementing this
approach. As I noted at the outset, we do not want the solution to this immediate problem to
involve creation of an intrusive system of federal insurance regulation.
We would much prefer to rely upon your good offices and our mutual desire to ensure
that policyholders are protected and the system's integrity is preserved.
2
Since substantial federal taxpayer dollars could be at stake, we will vigorously seek to
ensure both the efficiency and validity of the claims process. To do that, we will need your
assistance.
Let me now explain the loss sharing arrangement we have suggested.
Through the end of 2002, the govemment would absorb 80 percent of the first $20 billion
of insured losses resulting from terrorism and 90 percent of insured losses above $20 billion.
Thus, the private sector would pay 20 percent of the first $20 billion in losses and 10 percent of
losses above that amount.
The role of the federal govemment would recede over time, forcing the private sector to
develop its capacity each year.
In 2003, the private sector would be responsible for 100 percent ofthe first $10 billion of
insured losses, 50 percent of the insured losses between $10 and $20 billion, and 10 percent of
the insured losses above $20 billion. The govemment would be responsible for the remainder.
In 2004, the private sector would be responsible for 100 percent of the first $20 billion of
insured losses, 50 percent of the insured losses between $20 and $40 billion, and 10 percent of
the insured losses above $40 billion. The govemment would be responsible for the remainder.
To preserve flexibility in an extraordinary attack, combined private/public liability for
losses under the program would be capped at $100 billion in any year. It would be left to
Congress to determine payments above $100 billion.
The federal govemment's involvement would sunset after three years. It is our hope,
indeed our expectation, that the market failure we face today will have been corrected by then so
that the private sector will be able to effectively price and manage terrorism risk going forward.
Of course, should that prove not to be the case, Congress and the President can reevaluate the
program in place and decide at that time on any temporary extension of the program or
establishment of some other approach.
This approach would also provide certain tort reforms, including consolidation of claims
into a single forum and a prohibition on punitive damages.
Finally, this approach requires a clear definition of an "act of terrorism." We suggest that
the Secretary of the Treasury be given authority, in conjunction with other members of the
Cabinet, to certify that a terrorist act had taken place for purposes of activating the shared loss
compensation arrangement.
Before taking questions, let me close by flagging three issues that have been raised with
us by members of Congress and the insurance industry which directly relate to how our approach
would intersect with state insurance regulation.
3
First, in the discussions we have had with the various participants on this topic, the issue
of whether federal laws should require coverage for terrorism risk has not yet reached consensus.
Virtually all policies today include coverage for acts of terrorism. In offering a program such as
the one I just outlined, we would hope that terrorism risk coverage would continue to be standard
in insurance policies.
Second, the insurance industry has expressed concerns about how state regulation of
insurance premiums may affect their ability to price the risk they would retain under this
approach. We understand that, in most states, the industry may change rates without prior
approval but that in all states the state insurance regulator retains a right to review and reject rate
increases. We would hope that, in those states where prior approval is needed that state
regulators would act expeditiously on appropriate rate increase requests.
Finally, it has been suggested to us - with some merit, I believe -- that to achieve our goal
of assuring uniform insurance coverage for terrorism risk throughout the country, our approach
must provide for a national definition of terrorism.
In closing, let me again thank the NAIC for its efforts. We appreciate your support in our
efforts to craft a limited,short-term plan to address the current market failure in the pricing of
terrorism risk insurance. Our approach is only a starting point, and we look forward to working
with Congress to craft a consensus proposal which can be signed into law within the next several
weeks. As that effort unfolds, we hope we can continue to rely on the NAIC's input and advice.
Again, thank you. We at the Treasury Department look forward to building upon the
relationship we have forged in recent weeks.
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4
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 8:00 PM EDT
Monday, October 22, 2001
Contact:
Rob Nichols
202-622-2910
MONEY THAT KILLS: THE FINANCIAL FRONT OF THE WAR ON TERRORISM
Remarks by Deputy U.S. Treasury Secretary Kenneth W. Dam
I would like to thank the Woodrow Wilson International Center for Scholars for
inviting me to address its Board and Council this evening. I would also like to thank the
Center's distinguished Director, my long-time friend Lee H. Hamilton, as well as Joe
Cari for his kind introduction.
The subject of tonight's speech, "The Financial Front of the War on Terrorism,"
has received a great deal of attention since September 11 tho In large part, this attention
stems from President Bush's declaration-days after the tragic attacks against the World
1:rade Center-"that starving the terrorists of funding" would be a primary objective of
our war on terrorism.
The President has declared that this new war will be a conflict "without battlefields
and beachheads," in short, an unconventional war. While the Department of Defense,
under Secretary Rumsfeld, has deployed special forces to Afghanistan and Secretary
Powell has succeeded in bringing on board some new U.S. allies, I submit that nowhere is
this conflict more unconventional than in the Administration's efforts to cripple the alQa'ida financial network.
Launching a financial front in the war on terrorism is a new endeavor, one that
requires a fresh policy perspective. True, tracking al-Qa'ida's assets is not a "macho"
task. But it is a thinking man's war, and that demands skillful diplomacy, vigilant
coordination and seamless information sharing. Let me explain why, but first let me
explain what we are facing.
At present, our best information tells us that al-Qa'ida has cells in more than forty
(40) countries. And being a transnational entity means that al-Qa'ida behaves like one,
often merging, absorbing and forging alliances with other prominent terrorist groups, like
the Egyptian Islamic Jihad and Algeria's Salafist Group for Call and Combat.
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~
Another key fact is that Bin Laden's personal fortune is no longer al-Qa'ida's most
important asset. While Bin Laden's inheritance helped establish him as a terrorist leader
over the last several years Bin Laden has built an impressive fundraising operation.
'
Today, al-Qa'ida receives the bulk of its financial support from a collection ofIslamic
charities and relief organizations, the majority of whose money comes from wealthy
individual donors supportive of Bin Laden's cause.
If, as the State Department noted in its April 2001 report on "Patterns of Global
Terrorism," state-sponsored terrorism is on the wane, then Bin Laden's borderless alQa'ida network is well ahead of the curve. It is also not altogether clear who is
supporting whom these days in Afghanistan, the Taliban or al-Qa'ida. AI-Qa'ida
provides financial support, the Taliban safe haven.
The real picture that emerges is one of Bin Laden and al-Qa'ida operating as
"international venture terrorists," raising money from wealthy donors and seeding startup terrorist cells in Europe, Asia, the Middle East and the Americas. For these terrorists,
money is not an end. It is simply a means for financing future terrorism.
Since the mid-90's, Bin Laden and al-Qa'ida also have taken special care to transfer
and hide their finances in a way that avoids detection by even the most discerning
authorities. Suitcases full of cash, infonnal Hawala transfers and even everyday money
orders have become regular methods for sending terrorist money abroad. Front
companies are also used to transfer funds. In addition, some banks help obscure terrorist
money by allowing the transfer of funds from donor to destination. These illegal and
unconventional methods complicate our tracking efforts.
Nevertheless, I believe we have made significant progress in limiting Bin Laden's
and al-Qa'ida's ability to finance terrorism. I'd like to highlight a few of our recent
accomplishments, starting with those on the domestic front.
In many ways, the President fired the first salvo in the Administration's war on
terrorism by signing an Executive Order on September 24th, which blocks the U.S. assets
of twenty-seven (27) individuals and organizations affiliated with the September 11th
terrorist attacks. Just ten days ago, we added another thirty-nine (39) names to that list,
bringing our current total to sixty-six (66). As our global investigation continues to
unfold , I am confident that more names will be added and more assets will be blocked.
We will starve the terrorists of their funding.
Those of you familiar with the mechanics of asset blocking or the activities of the
Treasury's Office of Foreign Asset Control, or OFAC-the agency responsible for
enforcing these sanctions-might be asking how these efforts differ from prior actions
taken to disrupt terrorist financing.
2
One difference is that the President's Executive Order greatly expands the
coverage of previous Executive Orders from "terrorism aimed at disrupting the Middle
East Peace Process" to "global terrorism." The Executive Order also expands the
prohibited class to anyone providing financial or other support or services to terrorist
groups. In addition to blocking U.S. assets, the order also denies foreign banks
associated with terrorism access to U.S. markets. But the Executive Order is only a first
step.
Another difference is that we are marshaling all of the investigative resources at our
disposal in the fight against terrorist financing. And to do that, we are having to
overcome interagency tensions, turf battles and differing priorities that have stunted our
progress in the past. Let me mention three of these problems in detail.
First, consider the shackles placed on Treasury's Financial Crimes Enforcement
Network, or "FinCEN," which collects information on suspicious financial activities from
banks, analyzes it and then reports the results to law enforcement. In the past, FinCEN
has maintained a certain distance from intelligence agencies because our rules limit the
sharing of domestic information with our intelligence agencies. While an important
safeguard, that distance hampered our efforts in the past to connect suspicious domestic
financial behavior with foreign intelligence leads in fighting terrorism more effectively.
AI-Qa'ida terrorism is, after all, a foreign conspiracy operating against U.S. targets, and it
is impossible to stamp it out without coupling foreign intelligence and domestic
information.
A second problem has been with using intelligence leads to designate terrorists and
terrorist groups under the Executive Order. Doing so might expose "sources and
methods" used to gather foreign intelligence in the first place, and that could comprise
compromise intelligence operatives in field. In the past, OF AC has been particularly
reluctant to rely solely on intelligence for fear of having to defend its actions in court.
Third, obtaining information from the FBI-our nation's lead domestic
investigator-also has been difficult, because the FBI is preoccupied with building the
strongest possible criminal case for conviction. The FBI's primary interest has been
pursuing and protecting evidence, not exchanging leads with other federal agencies.
Many of you have read about recent anti-terrorism and money laundering bills now
under congressional consideration. Once signed into law, these bills will help us break
down some of these barriers.
3
This week we expect Congress to pass amendments to the Bank Secrecy Act, the
Fair Credit Reporting Act and the Right to Financial Privacy Act that will allow the broad
sharing of terrorist-related information between FinCEN and our foreign intelligence
agencies. Under these laws, law enforcement and intelligence agencies will be able to
share grand jury material and electronically intercepted evidence to the extent such
information pertains to foreign intelligence and counterintelligence.
Moreover, these new laws will authorize judges to consider classified information
in reviewing blocking orders, provided such review is performed in camera. By
removing the judge's review of classified information from the normal adversarial
process, intelligence "sources and methods" will be protected from disclosure.
As for resolving the inherent conflict between prosecution and terrorist asset
tracking, the President has made it clear that prevention of terrorism is at least as
important as its prosecution. Still, the tracking ofterrorist finances must be carefully
balanced with the tracking of the terrorists themselves, lest we interfere with the vital
mission of the FBI. In these and many other ways, Congress is giving us the tools we
need to win the war on terrorism.
How then are we going about the search for terrorist money? Since midSeptember, we have put together an interagency task force that includes the Treasury's
enforcement and international affairs components, CIA, the Departments of State and
Justice, the FBI and the NSC. This task force works to identify potential financial
intermediaries of suspected terrorists and their associates. A new Financial Terrorist
Asset Tracking Center is also looking at all terrorist organizations worldwide so that we
can create a big picture profile of what the financial infrastructure of these groups look
like.
In addition, Treasury's Secret Service, IRS and Customs investigators have joined
the financial front against terrorism, providing fresh leads and added expertise. Besides
working directly with FinCEN and the FBI, these investigators are forming a joint
venture that leverages their incomparable financial skills to advance the financial war to a
new level of sophistication.
Another feature of our financial front against terrorism has been to benefit from the
expertise of the financial institutions. Without going into specifics, I can say that U.S., as
well as foreign, financial institutions have been very helpful and cooperative in the
struggle against terrorism. Over the long tenn, the continued cooperation of banks and
financial institutions is essential.
4
By the way, both OF AC and FinCEN have established to11- free 1-800 numbers for
financial institutions, and this method of instant communication already is being used
extensively.
Nevertheless, even with better interagency cooperation and resource allocation, we
are well aware that Osama Bin Laden and al-Qa'ida are not stupid enough to park the
bulk of their wealth in the United States. That is why our international coalition building
is so critical. We can send B-2 bombers from Missouri to Afghanistan and back, and we
can launch Tomahawk missiles from the Indian Ocean into Jalalabad. But we can't just
reach into foreign financial institutions and block terrorist accounts. Local governments
must be persuaded to do that. Allies are important in the physical struggle against
terrorism; they are a sine qua non on the financial front.
Both multilaterally and bilaterally, we have been working hard to enlist the
cooperation of other countries. An important first accomplishment of newly confirmed
U.S. Ambassador to the UN John Negroponte was the prompt passage UN Security
Council Resolution 1373. This u.S.-sponsored measure calls on members to criminalize
the provision of funds to all terrorists, which effectively denies terrorists safe financial
haven anywhere. UN resolution 1373 drew heavily from the text of President Bush's
Executive Order against terrorism and expanded an earlier UN Security Council
resolution (1333) that required states to freeze all assets belonging to Osama Bin Laden
and his associates. The UN will update its designations of terrorist entities as member
states, including the U.S., continue to release additional names.
As with any UN resolution, members must have the political will to implement
these measures. And on this score, I am pleased to report that members are taking swift
action to draft and pass implementing legislation.
I know this because, almost daily, I spend time on the phone with other Finance
Ministers and Central Bank Governors to discuss their commitment and their progress in
the financial war. Treasury, with the help of U.S. diplomatic missions, is kept currently
informed of asset blocking and other actions taken in furtherance of our coalition goals.
Since September lIth, one hundred forty-three (144) countries have joined the effort to
disrupt terrorist assets. Seventy (70) have put blocking orders in place. And, at last
count, hundreds of suspected terrorist accounts are under investigation.
This worldwide effort has an important deterrent effect and little has been made of
this important point in the press. Because of our coalition efforts, terroris~ entities, a~
well as those who aid and abet terrorism financially, have been put on notlce that theIr
activities are being scrutinized by investigators in just about everywhere il: t.he wo:ld.
This fact was underscored last month bv a joint call of the G-7 Finance Nl1msters tor all
countries to establish functioning Finau'cial Investigative Units (FlUs), similar to
FinCEN.
5
We also that expect a model information exchange process will be agreed upon
when the 58-member Egmont Group, which coordinates such activities, meets later this
month in Washington, D.C.
Another organization playing a key role in the coalition is the 31-member Financial
Action Task Force, or F ATF. F ATF has taken a lead in thc global fight against money
laundering. Now, FATF is turning its attention to the financial war on terrorism. When
FATF members meet later this month, they hope to establish international standards and
issue special guidance for financial institutions on practices associated with the financing
of terrorism. They are working to develop a process-similar to their influential money
laundering "name and shame" approach-for identifying countries helping to facilitate
terrorist financing. This will step up global pressure being put on countries who fail to
crack down on terrorist financing within their borders.
At the same time, we are pushing forward on our program of negotiating a network
of tax information exchange agreements with countries throughout the world. Terrorist
financing, money laundering and tax evasion are a trio of closely related phenomena.
Countries that tacitly collaborate in promoting tax evasion schemes and that facilitate
money laundering create fertile ground for terrorist financing.
Even those countries-many of them among the world's poorest-who are not
members of the above groupings and may even have been the targets of censure, are
showing interest in not being left out of the coalition. But many of these countries need
help in becoming effective coalition members. Many have neglected proper regulation of
their banking sectors in the past. Sometimes legis.1ation has to be passed, often to the
chagrin of self-interested opposition leaders. Implementation requires new bureaus and
new regulators. Already we have offered and extended technical assistance to many
nations. We need to help them so that they can in tum help in the struggle. We cannot
rest until no place remains for terrorist money to hide.
We welcome public declarations of support from foreign governments. We welcome new
legislation. All of these steps are important in building momentum. But implementation and
enforcement are what is critical. We are keeping track, account by account, dollar by dollar. We
expect all countries to do the same. The war on terrorism may be an unconventional war, but
it's a real war. We will win if we stay the course.
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6
TREASURY
OFFICE 01<' PUBLIC AFFAIRS .1SOO PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 11:30 A.M.
October 22, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $8,000 million to
refund an estimated $10,000 million of publicly held 4-week Treasury bills
maturing October 25, 2001, and to pay down approximately $2,000 million.
Tenders for 4-week Treasury bills to be held on the book-entry records of
TreasuryDirect will not be accepted.
The Federal Reserve System holds $11,256 million of the Treasury bills
maturing on October 25, 2001, in the System Open Market Account (SOMA). This
amount may be refunded at the highest discount rate of accepted competitive
tenders in this auction up to the balance of the amount not awarded in today's
13-week and 26-week Treasury bill auctions. Amounts awarded to SOMA 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 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 allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP), if they meet or exceed the reporting
threshold.
However, Treasury will not include NLPs in the calculation of award
limits for those bidders.
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-7l0
-l'0r press releases, speeches, public schedules and official biographies. call our 2.J-lzour fax li/le at (202) 622-20.J0
HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED OCTOBER 25, 2001
October 22, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . $8,000 million
Public Offering . . . . . . . . . . . . . . . . . . . . $8,000 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 ...
29-day bill
912795 HW 4
October 23, 2001
October 25, 2001
November 23, 2001
May 24, 2001
$33,154 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 lar9'est
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., 4.215%.
(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 daylight saving time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank
on issue date.
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt· Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE ?UBLIC DEBT - WASHINGTON DC
Office of Financing
202-691-3550
CONTACT:
FOR IMMEDIATE RELEASE
October 22, 2001
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
October 25, 2001
January 24, 2002
912795JD4
Term:
Issue Date:
Maturity Date:
CUSIP Number:
2.170%
High Rate:
Investment Rate 1/:
Price:
2.214%
99.451
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 23.00%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FIMA (noncompetitive)
$
23,839,756
1,409,646
300,000
$
4,482,878
4,482,878
Federal Reserve
$
30,032,280
12,290,406
1,409,646
300,000
14,000,052 2/
25,549,402
SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
$
18,482,930
Median rate
2.140%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
2.100%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 25,549,402 / 14,000,052
=
1.82
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,139,759,000
http://www.publicdebt.treas.go v
PO-711
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SEC0~ITY AUCTION ~ESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
October 22, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182 -Day Bill
October 25, 2001
April 25, 2002
912795JR3
Term:
Issue Date:
Maturity Date:
CUSIP Number:
2.130%
High Rate:
Investment Rate 1/:
Price:
2.183%
98.923
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 49.79%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FIMA (noncompetitive)
$
21,833,400
1,262,420
165,000
$
4,750,526
4,750,526
Federal Reserve
$
28,011,346
11,572,625
1,262,420
165,000
13,000,045 2/
23,260,820
SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
$
17,750,571
Median rate
2.100%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
2.050%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-cover Ratio = 23,260,820 / 13,000,045 = 1.79
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,094,258,000
http://www.publicdebt.treas.gov
PO-712
D EPA R T lVl E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 2:00 P.M. EDT
October 23, 2001
Contact: Betsy Holahan
(202) 622-2960
ASSISTANT SECRETARY FOR FINANCIAL MARKETS
BRIAN C. ROSEBORO
BMA/TREASURY AUCTION SEMINAR
Good afternoon. I would like to begin by thanking the Bond Market Association
for co-hosting today's seminar. Today's jointly sponsored effort demonstrates the close
cooperation between industry and government, in managing our financial markets. The
Treasury Department strongly encourages and supports seminar programs promoting
continuing education of this nature.
This is the 5 th Annual Treasury Auction Seminar. This forum began as a method
to help educate the dealer community on auction rules and to keep market participants
abreast of rule changes, interpretations, and operational issues. Our feedback, from past
seminars, has been that this educational outreach has been effective and, as capacity
attendance shows, is actively supported within the dealer community.
Educational forums such as this one, supplemented with dealer visits, have helped
to reduce errors and promote best auction compliance. Dealer visits will continue to be
utilized in support of Treasury's voluntary compliance program. Indeed, most auction
errors are self-reported and this adds to the credibility of the program.
I'd like to digress for a moment to express on behalf of the Treasury Department,
an acknowledgement of the industry's efforts in quickly re-establishing a viable
secondary fixed income market, following the tragic events of September 11 tho I want to
thank the BMA for their critical efforts in facilitating communications among members
and regulatory authorities. I want to express our appreciation for the tireless efforts of the
operations and compliance staff, during this difficult period, in support of trading
activity. Market participants courageously answered a great technical, physical and
emotional challenge.
PO-713
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@)
The US treasury market remains the broadest, deepest financial market in the
world. To maintain our role as leader in fixed income markets, Treasury is continually
striving to stay at the leading edge of technological advances in debt issuance. Our
primary strategy, in the coming months, will concentrate on targeting the broadest
possible investor audience for participation in on-line direct competitive and noncompetitive bidding. While not a new initiative, it is now a refocused one, born out of the
advances in the Treasury's Bureau of Public Debt's systems and operational
improvements over the past few years.
We believe that it is especially important to continue to "grow" our base of direct
competitive bidders in order to sell our securities at the lowest possible price. This
benefits Treasury's principle client - the American taxpayer. While open to all market
participants, we are especially encouraging bidders with restricted or limited access to
intermediaries who are not now bidding at all, to bid directly in our auctions. These
entities will participate directly using T AAPSLink, our IP browser-based bidding
mechanism that was implemented in 1998. T AAPSLink is now being used by
approximately 1,200 small- to medium-sized submitters around the country to directly
participate in Treasury's auctions.
In conclusion, I know that today's program will serve to be informative and
continue to promote the goal of voluntary compliance with Treasury's auction and
buyback rules. Thank you for aIIowing me to speak to you today, and I hope the
remainder of your seminar goes well.
-30-
2
D EPA R T 1\11 E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 1:15 P.M. EDT
October 23, 2001
Contact: Betsy Holahan
(202) 622-2960
UNDER SECRETARY OF THE TREASURY PETER FISHER
THE INSTITUTE OF INTERNATIONAL BANKERS
PLAZA HOTEL, NEW YORK CITY
It is wonderful to be here and see so many friends and friendly faces. Thank you for
giving me this opportunity to come back.
Indeed, my only purpose today is to say "thank you".
First, to thank you - in the international banking community - for your efforts in
tracking down and seizing the terrorists' sources of funding;
Second, to thank everyone in banking and finance for the vital role you are
playing in reviving the spark of our economy;
Third, to thank everyone in the international community here for bringing the
world to us and helping to keep our minds and our economy open to the rest of
the world;
And finally, I want to salute everyone here in the New York area for the courage
and the resilience you have shown and for the energy with which you have begun
the process of rebuilding and revitalizing this most important of islands in our
global economy.
But before I do that, let me digress.
Since I moved to Washington in March, I greatly miss the urban canyons oflower
Manhattan and the historic corridors of the New York Fed's fortress on Liberty Street.
But with my new duties, I have found a spot where even more of our nation's history
comes alive for me.
In the Treasury's black and white marble hallways, I stop as often as I can to
marvel at the portrait of Roger B. Taney who served as acting Secretary of Treasury
under President Andrew Jackson from 1833 to 1834.
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®
2
Taney drained the government's deposits from the Second Bank of United
States, effectively destroying our nation's central bank. The subsequent vote in Concress
o~er .the Bank's charter became a moot point as Taney had already succeeded in his b
mISSIOn.
As his reward, President Jackson appointed Taney to the Supreme Court where
he went on in 1857 to the write the Dred Scott opinion, holding that slavery could not be
precluded from the territories. Most historians agree that the Dred Scott opinion, as much
as anything, set the collision course between north and south that resulted in our civil
war.
So, more than anyone else, Roger Taney set us on the path to almost 80 years of
periodic banking panics, cycles of deflation and inflation and highly-charged debates
about the monetization of silver and gold AND he also set us on the path to the civil war.
You see, one man can make a difference.
This helps remind me that the decisions we make in government can have
profound affects on our country and that we should exercise our powers with as much
care as we possibly can.
Since September 11 th, I have been almost overwhelmed by your calls asking how
you can help us at the Treasury, whether individuals could donate their time and what
you can do directly to support our dual efforts to fight terrorism and revive the economy.
My first reaction has been to relive the frustration I experienced last winter filling
out the conflict of interest forms, as I have realized how hard - almost impossible - it is
for the government to accept the donation of time by talented individuals without
subjecting them to an almost absurd level of scrutiny.
My second reaction, however, has been to realize that we at the Treasury are not
at the front lines in these efforts, you are. The important question is not how you can
help us but, rather, whether we are doing the right things to help you. The cameras and
the microphones may point at the podiums in Washington, but you are on the front lines
of our most important objectives.
After the terrorist attacks, President Bush asked Secretary O'Neill to lead the
global campaign to deny terrorist groups access to the international financial sys.tem, to
impair their ability to fundraise and to expose, isolate and incapacitate the terronsts'
financial resources.
These efforts are unprecedented in their scope and intensity.
The interagency task force responsible for identifying and blocking the terrorists'
holdinas
is chaired bv the Treasury and includes the CIA, the Depar1ments of State and
b
Justice, the FBI and the National Security Council.
~
3
The Treasury is also working to secure the endorsement of our blockina orders
by our 7 and EU alli~s and throughout the world. In fact, we reported yesterday that
144 natIons are supportmg the U.S. effort to combat terrorist financing.
Ken Dam, our Deputy Secretary, John Taylor and Jimmy Gurule, my fellow
Under Secretaries, and David Aufhauser, our General Counsel, who are leading these
efforts are a talented and dedicated team.
?-
But what has been truly extraordinary has been the number of you that have come
forward and volunteered to participate in this campaign to dismantle the terrorist financial
network.
Having had some involvement in the legal efforts in the 1980s to manage the
blocked Iranian and Libyan assets, I know the reluctance that many of us in the financial
world have felt toward these efforts to freeze the dollar assets of those with whom we
disagree. It not only felt as if we were looking for a needle in a haystack it also felt as if
we were doing nothing other than throwing a few specks of sand in the gigantic gears of
international capital flows.
But now we all realize that we face an evil - that we face harms - much, much
greater than sand in the gears of capital markets or the challenge of a difficult task.
Unchecked, the terrorists' assault on our open society - and on our confidence in each
other and ourselves - could do far more profound harm to our way of life and our
economy than the burden of tracking and blocking their financial holdings. We all
understand that the higher levels of growth, of productivity, of employment and of well
being that we are capable of achieving cannot be sustained in the face of the uncertainty
caused by acts of barbaric violence.
With your offers of help to search databases, to provide insights into account
flows and, ultimately, to close down the terrorists' financial network, this is not a lone
search for an obscure needle. It is a broad, cooperative effort of banking organizations
and governments from around the world to save lives.
So I want to thank all of you in the international banking community for
everything you are doing to carry this effort forward.
I also want to thank everyone here for the roles you are playing in reviving our
economy. I am optimistic about the speed with which the economy is going to bounce
back because it appears to me that most of you are optimistic or, at least, your bond and
swap traders are.
We know that the economy began slowing in the summer of2000, and was still
slow as September 11 approached. But we also have the tremendous benefit of al:-eady
having significant monetary and fiscal stimulus in place as a consequence of the federal
Reserve's interest rate reductions and the boost to consumer spendmg from the tax
rebates.
The terrorist attacks represent an unprecedented shock to both the demand and
supply of goods and services, hitting consumer confidence directly and servin a to raise
~
hurdle rates for business investment by heightening uncertainty.
To respond to this, in addition to our immediate emergency efforts for the New
York area and Virginia, President Bush asked Secretary O'Neill to lead the
Administration's efforts to work with Congress on an economic growth package and we
expect the first step to be completed this week with passage of the House version of this
bill. Taken all together, with the spending already enacted and the package Secretary
O'Neill is now working on, we are likely to see more than $100 billion in spending ~nd
tax stimulus coming into the economy this year.
Some of you have expressed concerns about the consequences of this spending for
the government's borrowing requirements and its impact on long-term interest rates. If
you feel a need to worry, worry about something else.
The federal govenunent's fiscal position is remarkably strong. We have just run
four years of surpluses that are the largest in the past 50 years - both in nominal terms
and as a share of our GDP.
While we have experienced both a reduction in federal tax receipts and increased
spending outflows, every sensible economist knows that we should usc our government's
financial strength to pursue our national interests in reviving our economy and in
defending ourselves against future terrorist attacks. The borrowing requirements that
may be needed to finance these dual efforts can easily be absorbed by our capital
markets.
In addition, my own reading of the yield curve gives me cause for optimism, not
pessimism. Ten-year yields are lower now than they were in August, so we have not seen
any back up in long-term rates that might suggest anxiety about our long-run fiscal
prospects. The steepness of the yield curve is principally at the short-end, with yields
rising sharply over just the first few years. This suggests to me that your bond and swap
traders now expect a relatively brief slow down in the economy and I thank you for
providing them the capital with which they can express this opinion.
More importantly, everything we do in Washington to revive the economy's
growth, through either monetary or fiscal policy, will only be so much arm waving and
noise if you, in the banking and financial community, don't carry the effort forward. You
- you financial intermediaries - are the front lines in this effort too. It's up to you to
provide the advice, the loans and the financing to the sensible business men and women
who find opportunities among the risks. They will be the engines of our economy's
growth for the next ten years - and of your growth as well.
Our economic recovery will not be secure if we isolate o.urselvcs fro~ the rest of
the world or fail to move forward to promote economic growth 111 all countnes.
5
Expanding global trade is a critical piece of the President's economic recovery
plan. PreSIdent Bush must have Trade Promotion Authority so that we can continue to
le~d the gl~bal effort to increase the flow of goods, services, knowledge and ideas that
WIll create Jobs and improve living standards here and around the world.
As Secretary O'Neill has been saying all year: our world is even more
interconnected than we realize. The choice between expanding and contracting
international trade flows is really no choice at all, as the history of the last century makes
plain.
We need your help from the international community to articulate the case - here
in this country - for expanding opportunities for all countries. Your presence in our
financial community helps us understand how we look to the rest of the world and keeps
us engaged and looking outward. Thank you, in the international financial community,
for all you do for us and for our economy.
Finally, I want to salute everyone here in the New York area for the courage and
resilience you have shown and for the energy with which you have begun the process of
revitalizing the economy of this extra-ordinary island and the surrounding communities
that have prospered with Manhattan over the centuries.
The Treasury has been supporting our colleagues in the White House who have
been working closely with the Mayor's office and the Governor's office to respond
quickly to New York's immediate requests. We are now looking beyond the short-term
challenges to think through how the federal government can best be an active partner in
the longer-term process of rebuilding.
Unfortunately, there is still a great deal that we do not know about the scope and
the nature of the financial challenges of rebuilding. And even all the powers and
resources of the federal government cannot make us whole, or hold us harmless, or take
us back to a time before September 11 tho But by working together, we in the
Administration are confident that the city, the state, and the federal government will take
the steps necessary to sustain your creativity and your determination to keep New York
City the hub of our global economy.
At the close of her novel, Middlemarclz, George Eliot observes that "the growing
good of the world is partly dependent upon unhistoric acts, and that things ar~ not so ill
with you and me as they might have been, is half owing to the number who hved
faithfully a hidden life, and rest in unvisited tombs."
The growing good of the world from the tragic events of September 11 th wilL no c~oubt,
depend significantly on the heroic acts of those few soldiers and statesmen - and l1remen
and policemen - who will be honored in their time and in the years to come.
6
But we also know that the growing good of the world from September 11 th will
partly depend upon the unheralded acts of so many - even bankers.
Thank you again for everything you are doing.
D EPA R T lVl E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960
Embargoed Until 2:30 p.m. EDT
October 23, 2001
Contact: Betsy Holahan
(202) 622-2960
STATEMENT OF JAlVIES E. GILLERAN
NOlVIINEE FOR DIRECTOR OF THE OFFICE OF THRIFT SUPERVISION
BEFORE THE COMlVIITTEE ON BANKING, HOUSI~G AND URBAN AFFAIRS
UNITED STATES SENATE
Chainnan Sarbanes, Senator Gramm and Members of the Committee, I am very honored that
President Bush has nominated me to serve as Director of the Office of Thrift Supervision and I am
grateful to have the privilege of your consideration. I would like to introduce those members of my
family who are present today.
The thrift industry is composed of approximately 1000 organizations, which operate in all
states with approximately one trillion dollars in assets. Many of the organizations are small, some are
owned by mutual thrift depositors, and several are very large with leadership roles in the financial
services industry.
If confinned, I would bring to the role of Director a unique range of experiences. I was the
banking regulator for our most populous and diverse state during one of the most challengjng periods
in our economy's history. For twenty-five years, I served the banking industry as auditor and
consultant. Most recently, I led the successful turnaround of a historic San Francisco bank. The
diversity of my professional background has enabled me to understand and value the perspectives of
both great and small financial institutions, the challenges implied in providing for their safe and sound
operation, and the importance of protecting the consumer and taxpayer.
As California's banking superintendent during an economically volatile period, I led the
California liquidation of the Bank of Credit and Commerce International and was able, after
liquidating all debts, to contribute in excess of 100 million dollars to aid others in the worldwide
liquidation.
PO-71S
In connection with the closure of another institution where investors in trust certitlcates were
facing a total loss of investment, we were pleased to be able to resolve all matters and return in excess
of 100% of investment to all parties, many of whom were retired and would have lost their entire life
savmgs.
As a regional managing partner with the world wide accounting firm ofKPMG, I directed all
bank practice in the Western Region, including recruitment and training of financial institutions
specialists.
In 1994, I became Chairman and CEO of the Bank of San Francisco, an institution facing
closure by the FDIC. When we sold it in December of 2000, it was one of the most profitable in its
size in the country. Leading the Bank of San Francisco through this challenge granted me the
invaluable opportunity to experience first hand those factors that contribute to a financial institution's
deterioration, as well as those which lead to its reclamation.
I am enthusiastic about the opportunity to serve our county during this demanding time. If
confirmed, I will dedicate myself to the preservation of stability in our nation's diverse thrift
organizations. I thank each of you for your time and your consideration.
D EPA R T lVl E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960
U.s. International Reserve Position
10/23/01
The Treasury Department today released US. reserve assets data forthe week ending October 19,2001. As indicated in
this table, US. reserve assets totaled $70,316 million as of October 19, 2001, down from $70,647 million as of October 1.2,
2001.
(in US millions)
70,647
TOTAL
:1:.
Foreign Currency Reserves
a~
October 191 2001
70,316
October 121 2001'
I. Official U.S. Reserve Assets
I
1
Securities
Of which, issuer headquarlered in the US.
Euro
5,561
Yen
11,271
Euro
TOTAL
16,832
5,514
Yen
TOTAL
16,764
11,250
0
0
-~
b. Total deposits with:
b.t Other central banks and B/S
b,ii. Banks headquartered ih the U.S.
b.ii. Of which, banks located abroad
b.W. Banks.headquartered outside,the U.S.
b.iii. Of which, banks located in the U.S.
!, IMF Reserve Position
2
, Special Drawing Rights (SORs)
, Gold Stock 3
9,337
4,347
13,684
0
9,250
13,589
0
4,339
0
0
0
0
0
0
18,219
18,114
-
2
10,806
10,869
-~
-
11,044
11,044
0
0
Other Reserve Assets
II Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
~
I'
I' t d
'\'Ies reflect marked-Io-markel values and
SOMA), valued ai current market exchange rates. Foreign currency ho dings IS e as secur!
'
'eposits reflect carrying values.
"
R"
b
d
data provided by the IMF and are valued in
I The items "2, IMF Reserve Position" and "3, Special DraWing c<'lghts (SO s), are ase on
,
,
' M F d I f 0 t ber 12 are final The entnes In the table
ollar terms at the orricial SDRJdoIJar exchange rate for the reporting date, The I
a a or c o '
"
k' I' 'IF
~
I d'
I ton by [he US Treasury to [he prior 'Nee S IV
Jove for October 19 (shown in italics) reflect any necessary adjustments, inC u Ing reva ua I ,
. ~
lta,
\3 1 "001
Gold stock is valued monthly ar 342.2222 per fine troy ounce, Values shown are as afA ugus
'~
11,044 million.
-716
TheJuly31,2GG1 '!illue'Nas
U.S. International Reserve Position (cont'd)
/I. Predetermined Short-Term Drains on Foreign Currency Assets
October 12. 2001
1. Foreign currency loans and securities
October 19, 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
October 19, 2001
October 12, 2001
1. Contingent liabilities in foreign currency
o
o
l.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
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.e. 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
D EPA R T lVl E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 7:00 P.M.
October 23, 2001
Contact: Public Affairs
(202) 622-2960
REMARKS BY
SECRETARY PAUL O'NEILL
TO THE
COALITION OF SERVICE INDUSTRIES
Good evening. It's a pleasure to be with you all here tonight.
This city - and the world - are very different tonight than we expected them to be when
this dilU1er was first planned. When I received your invitation to join you, r welcomed the
opportunity to talk about the impOliance of trade in promoting growth and prosperity at home
and around the world. I was eager to talk about the role of trade in developing economies,
~- bringing opportunities to people who live in poverty and hopelessness. I was going to repeat
what so many of you already know - that the President must have Trade Promotion Authority
(TPA) in order to lower trade barriers and create jobs here at home; that export industry jobs pay
above-average wages; and that the average American family of four stands to gain $2,500
annually if we can reduce trade barriers around the world by one-third.
Now, in the aftermath of the September 11 attacks, all those facts remain true. But they
are dwarfed by the other factors that make TPA even more crucial today than it was 8 weeks ago.
The world has rallied in response to President Bush's leadership since September 1l.
First, he set the goal of disrupting terrorist financing. He signed an executive order empowering
the Treasury Department to identify those who fund terrorism, block their assets, and seek
cooperation in the effort from nations around the world. The ink was barely dry on the Order
before Finance Ministers from around the world were calling me to ask how they could help. To
date, 144 nations have committed to the global effort to tear down the financial infrastructure of
terrorism. The world responded to President Bush's leadership.
Cooperation in the financial war is but one part of the global coalition the President has
put together. Secretary Powell and Secretary Rumsfeld visited nations around the world to
ensure a united front against the terrorists who seek to destroy the freedoms that are the
foundation of the civilized world.
PO-717
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-
This unprecedented international cooperation reflects the fact that the nations of the
world are more interconnected than ever before. We cannot defeat global terrorism alone - we
must engage the world in our efforts to ensure that nowhere can terrorists find a safe harbor.
Just as all nations must work together to defeat global terrorism, all nations must work
together to combat the current global economic slowdown. For much of the last decade, the
United States was the engine that drove world economic growth. One nation cannot create
global prosperity alone. Now that we have seen our economy slow for the last year, there is no
locomotive for the world economy.
Now is the time to pass Trade Promotion Authority. Just as President Bush's leadership
has created a global effort to defeat terrorism, his leadership on trade will create a global effort to
spread prosperity. Denying the President TPA takes away his ability to lead. President Bush
must have TP A so he can lead a global effort to bring down trade barriers and expand the flow of
goods, services, knowledge and ideas to people everywhere.
You and your companies operate in cities around the globe. You know the power these
operations have to bring knowledge and opportunity to people who don't have that today. When
US firms open operations abroad, they bring with them the values that make them good
companies here at home: respect for the safety, creativity and intelligence of their workers. As
those ideas spread throughout the world, individuals everywhere become more empowered to
speak up, to innovate, and to respect each other. As trade flows from nation to nation, ideas of
- freedom, creativity, and tolerance are part of the packaging.
And we learn at home, too. Trade helps our domestic productivity. Expanding global
trade allows the most efficient producers to grow because selling goods in the competitive
international marketplace demands higher productivity. Competition makes every firm seek to
catch up with the best firm in the industry - and it keeps the best firms constantly seeking to
become better. Truly international markets bring the best ideas in the world together in one
place, for the benefit of people everywhere.
The time has come to provide the President with the tools he needs to lead the world to
higher living standards and greater freedom. The world looks to the United States for leader~hip,
and we must be a leader in global trade. To assure our continued leadership and our prospenty,
Congress needs to pass Trade Promotion Authority.
-30-
D EPA R T lVl E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960
CONTACT: BETSY HOLAHAN
(202) 622-2960
EMBARGOED UNTIL 10:00 A.M.
October 24, 2001
TERRORISM RISK INSURANCE
TESTIMONY OF THE HONORABLE PAUL H. O'NEILL
SECRETARY OF THE TREASURY
BEFORE THE
COMMITTEE ON BANKING, HOUSING AND URBAN AFFAIRS
UNITED STATES SENATE
Mr. ChaiIman, Senator Gramm, and Members of the Committee, I appreciate the
_ opportunity to comment on terrorism risk insurance. These hearings are extremely important.
We believe that there is a real and pressing need for Congress to act on this issue now. As I will
discuss in more detail, market mechanisms to provide terrorism risk insurance coverage have
broken down in the wake of September 11. Such coverage is now being dropped from property
and casualty reinsurance contracts as they come up for renewal, with most policies renewing at
year-end. If Congress fails to act, reinsurers have signaled their intention to exclude such
coverage meaning that primary insurers may have to drop this coverage or institute dramatic
price increases. As a result, after January 1 the vast majority of businesses in this country are at
risk for either losing their terrorism risk insurance coverage or paying steep premiums for
dramatically curtailed coverage. This dynamic can in tum be expected to cause dislocations
throughout our economy, particularly in the real estate, transportation, and energy sectors.
1. The Problem
The terrorist attacks of September 11 created widespread uncertainty about the risk and
potential costs of future terrorist acts. Since September 11, we have endured this uncertainty
every day as a country. It has peImeated every sector of our economy.
A key part ofthe government's response to the events of September 11 is to ensure that
our economic stability is not undeImined by terrorist acts. Continued economic activity is
dependent on well functioning financial markets - where the lifeblood of capital is provided to
business enterprises. Financial markets allocate capital based on the potential success of a
business. In doing so, financial markets rely on the insurance sector to mitigate certain types of
risk that are not directly related to the plans or operations of a business.
PO-71S
_ Farpress release}.
,
speeche~, public gchedt(les and official biographies, call our 24-hour fax line at (202)
Jo ..
622-2040
Insurance companies manage risk in economic activity and facilitate the efficient
deployment of capital in our economy by estimating probabilities of possible adverse outcomes,
and pooling risk across a large group. Since September 11 the uncertainty surrounding terrorism
risk has disrupted the ability of insurance companies to estimate, price, and insure the risk.
We learned on September 11 that, while perhaps highly improbable, terrorists are capable
of enormous destruction. Could such an event be repeated? As a country and a government, we
are doing everything in our power to prevent a repetition of anything like the events of
September 11. But how does an insurance company assess this uncertainty? How does an
insurance company price for it? At the moment, there are no models, no meaningful experience,
no reasonable upper bound on what an individual company's risk exposure may be.
Insurance companies do not "take" risks. They knowingly accept and mutualize risks.
They are private, for-profit enterprises. Ifthey do not believe they can make money by
underwriting a particular risk, they will not cover it Because insurance companies do not know
the upper bound of terrorism risk exposure, they will protect themselves by charging enormous
premiums, dramatically curtailing coverage, or - as we have already seen with terrorism risk
exclusions - simply refusing to offer the coverage. Whatever avenue they choose, the result is
the same: increased premiums and/or increased risk exposure for businesses that will be passed
on to consumers in the form of higher product prices, transportation costs, energy costs and
reduced production.
The consequences of uncertainties surrounding terrorism risk are already evident in the
airline sector. The Department of Transportation's initial projection is that, as a result of the
September 11 attacks, airlines will pay nearly $1 billion in premium increases for terrorism risk
insurance in the next year despite a congressionally imposed cap on third-party liability. Within
the next few months, similar increases can be expected for other forms of economic activity
deemed "high risk" - if coverage is available at all. Higher premiums will divert capital away
from other forms of business investment
The need for action is urgent From our conversations with insurance company
representatives, state insurance regulators, policyholders, banks and other entities which provide
financing for property transactions, the next two months are critical. The insurance industry
relies on a complicated structure of risk sharing. Risk is shared among primary insurers,
reinsurers, and retrocessionairs (i.e., providing reinsurance to the reinsurers). This structure has
worked well in the past and greatly contributed to widely spreading losses associated with the
events of September 11 across the insurance industry.
However, in light of the uncertainty created by September 11, reinsurers have told us that
they will no longer cover acts of terrorism in their reinsurance contracts with primary insurers.
And as I have said, most property and casualty insurance contracts are up for renewal at yearend. This will create the following choices for insurers: assume all of the risk of terrorism
coverage and raise prices to cover all of the associated, unshared costs; reduce coverage levels;
or cancel coverage. Any of these choices has the potential to cause severe economic dislocations
in the near-term either through higher insurance costs or higher financing costs.
2
2. Objectives
In grappling with this problem, we have had several objectives.
First and foremost, we want to dampen the shock to the economy of dramatic cost
increases for insurance or curtailed coverage. We also want to limit federal intrusion into private
economic activity as much as possible while still achieving the first objective. And we want to
rely on the existing state regulatory infrastructure as much as practicable.
Note that none of these objectives are directed at providing government assistance to the
insurance industry. The industry is absorbing the financial losses it contracted for as a result of
the September 11 attacks, and is fully capable of making good on those losses. The industry is
also capable of continuing to provide insurance for non-terrorist hazards. The problem, as I have
said, is one of uncertainty about future terrorist risk. At the moment, there is no basis upon
which to price terrorism risk and no sense of the upper bound on the risk exposure.
3. Options
Over the past few weeks, a variety of proposals have emerged to deal with the problem I
have outlined. Before turning to the approach we have developed, I will briefly discuss a few of
the alternatives we considered and some of the shortcomings we identified with each.
A case could be made to treat terrorism risk insurance like war risk insurance. During
World War II, the federal government provided property owners with insurance protection
against loss from enemy attack. Similarly, the Israeli government provides insurance for
terrorism risk. This approach would recognize the terrorist threat as one made against all
Americans and would establish the broadest possible risk pool for insuring against this risk. At
the same time, such an approach implies a permanent federal intrusion in the market so long as
any terrorism risk remains.
A second approach, one suggested in various forms by insurance industry representatives,
involves the creation of a reinsurance company to pool terrorism risk. This model follows an
approach developed in the United Kingdom in response to IRA terrorist activities. This
approach has some appeal, especially in providing a vehicle for pooling the industry's risk while
providing an upper bound on industry losses through a government backstop. With more time,
or in different circumstances, this approach may have been desirable.
In our judgement, however, it has several significant shortcomings. First, the approach
ultimately leads to the federal government setting premium rates by establishing the rate charged
to the pool for the government's backstop. If the basic problem is that the insurance industry whose business it is to measure and price risk - cannot currently price terrorism risk without
distorting markets, why would we think the government can do a better job?
Establishing a pool would also take time, and time is very limited since most policies
expire at year-end. It is unclear how long it would take industry to capitalize the pool. In the
3
interim, the government's exposure could be substantial, insofar as it would be liable for 100
percent of losses that exceeded the pool's capitalization. In addition, we question whether the
government could move quickly enough on its end to establish the contracts, the pricing
structure, and the regulatory structure needed to make the proposal work.
Finally, the pool approach creates a federal insurance regulatory apparatus with some
presumption of permanence, and a potentially enormous pool of captive capital that we may
never need to use. We believe that there will be less uncertainty about terrorism risk a few years
from now and that uncertainty will be more manageable by the private sector than is the case
today. Given that, why undertake the effort to create a monopoly reinsurer and give a new
federal regulator the power to both set prices and regulate insurance companies and their
acti vi ti es ?
A third option would be to simply set a large industry deductible and let the federal
government cover all losses from acts ofterrorism past that point. For instance, the federal
government could require the insurance industry to cover all losses up to, say, $40 billion in a
given year and the federal government would pay all losses above that amount.
This approach has two substantial drawbacks. First, it does not address the fundamental
problem: the industry has no basis for knowing - and hence pricing - terrorism risk. A large
deductible would require them to assess premiums large enough to cover a large potential loss.
In the absence of better inforrnation, we might well expect companies to price insurance as if
they fully expected losses up to the deductible amount. Second, this approach makes it difficult
to control losses above the deductible as insurance companies would have no incentive to limit
costs once their deductible has been paid.
4. A Shared Loss Compensation Program
After reviewing these and other options, and discussing these issues with congressional
and industry leadership and the state insurance regulatory community, we developed an approach
that we believe best accomplishes the objectives I set forth. Let me say at the outset that this
approach reflects the current evolution of our thinking on this issue. We want to work with
Congress to achieve the best possible solution. As I have said, the insurance industry can easily
protect itself by eliminating coverage or charging very high premiums. What we are trying to do
is craft a plan that will prevent the economic dislocations that will otherwise take place if private
insurers follow the course they are now on. It is imperative that we find a solution that works in
the marketplace. We must get it right, and we must get it right now.
When terrorists target symbols of our nation's economic, political and military power,
they are attacking the nation as a whole, not the symbol. This argues for spreading the cost
across all taxpayers. Yet there are also reasons to limit the federal role. If property owners do
not face any liability from potential attacks, they may under-invest in security measures and
backup facilities. In addition, the insurance industry has sufficient experience and capacity to
price some portion of the risk associated with terrorism and has the infrastructure necessary to
assess and process claims.
4
Under the approach we are suggesting, individuals, businesses, and other entities would
continue to obtain property and casualty insurance from insurance providers as they did before
September 11. The tenns of the terrorism risk coverage would be unchanged and would be the
same as that for other risks.
Any loss claims resulting from a future terrorist act would be submitted by the
policyholder to the insurance company. The insurance company would process the claims, and
then submit an invoice to the government for payment of its share.
The Treasury would establish a general process by which insurance companies submit
claims. The Treasury would also institute a process for reviewing and auditing claims and for
ensuring that the private/public loss sharing arrangement is apportioned among all insurance
companies in a consistent manner. State insurance regulators would also play an important role
in monitoring the claims process and ensuring the overall integrity of the insurance system.
Through the end of 2002, the government would absorb 80 percent of the first $20 billion
of insured losses resulting from terrorism and 90 percent of insured losses above $20 billion.
Thus, the private sector would pay 20 percent of the first $20 billion in losses and 10 percent of
losses above that amount.
Under this approach the federal government is absorbing a portion -- but only a portion -of the first dollar oflosses, which we believe is important to do in the first year of the program.
The key problem faced by insurance companies light now is pricing for terrorism risk. While
this type ofloss sharing approach does not completely alleviate that problem, it does provide
insurance companies with the ability to evaluate potential losses on a policy by policy basis, with
clearly defined maximum exposures. For example, on a $100 million commercial policy the
insurance company's maximum exposure would be $20 million. If industry losses were greater
than $20 billion that exposure would be reduced even further.
More importantly, price increases to policyholders should be lower under this approach
than under an approach that requires companies to absorb 100 percent of losses up to a large,
aggregate industry loss deductible. Under this approach, if an insurance company's maximum
exposure was defined at $20 million on a $100 million policy, the insurance company could then
price that $20 million exposure on the probability of a complete loss event occurring.
Suppose instead that the insurance industry had to absorb $20 billion in losses before any
government loss sharing began. Then, in our example, the insurance company's maximum loss
exposure would be $100 million on that policy, not $20 million. Pricing to thi 5 maximum loss
would create the economic dislocation we are trying to avoid.
The role of the federal government would recede over time, with the expectation that the
private sector would further develop its capacity each year. As private sector capacity increases,
the nature of the government's loss sharing agreement would also change. Given more time and
experience, we believe that the insurance industry could reestablish robust risk-sharing
arrangements such as reinsurance that would enable the private sector to insure losses from
terrorism before the government loss sharing commenced.
5
Thus, in 2003, we would have the private sector be responsible for 100 percent of the first
$10 billion of insured losses, 50 percent of the insured losses between $10 and $20 billion, and
10 percent of the insured losses above $20 billion. The government would be responsible for the
remainder.
In 2004, the private sector would be responsible for 100 percent of the first $20 billion of
insured losses, 50 percent of the insured losses between $20 and $40 billion, and 10 percent of
the insured losses above $40 billion. The government would be responsible for the remainder.
To preserve flexibility in an extraordinary attack, combined private/pUblic liability for
losses under the program would be capped at $100 billion in any year. It would be left to
Congress to determine payments above $100 billion.
The federal government's involvement would sunset after three years. It is our hope,
indeed our expectation, that the market problem we face today will have been corrected by then
so that the private sector will be able to effectively price and manage terrorism risk insurance
going forward. Of course, should that prove not to be the case, Congress and the President can
reevaluate the program in place and decide at that time on an extension of the program or
establishment of some other approach.
This approach would also provide certain legal procedures to manage and structure
litigation arising out of mass tort terrorism incidents. This includes consolidation of claims into
single forum, a prohibition on punitive damages, and provisions to ensure that defendants pay
only for non-economic damages for which they are responsible. It is important to ensure that
any liability arising from terrorist attacks results from culpable behavior rather than overzealous
litigation. These procedures are important to mitigating losses arising from any future terrorist
attack on our nation, and are an absolutely essential component of the program I have outlined.
a
Finally, this approach requires a clear definition of an "act of terrorism. " We suggest that
the Secretary of the Treasury, with the concurrence of the Attorney General, and in consultation.
with other members of the Cabinet, be given authority to certify that a terrorist act had taken
place for purposes of activating the shared loss compensation arrangement.
We believe that this approach dampens any adverse economic impact from a sudden increase
in the cost from terrorism risk insurance over the next 12 months. The imposition of a deductible
in the second year, and an increase in the deductible in the third year, permits the federal
government to gradually withdraw from the market as the private sector adapts to measuring and
pricing terrorism risk.
5. Conclusion
Mr. Chairman, for the reasons I have set fOlih, the Administration believes that the
economy is facing a temporary, but critical, market problem in the provision of terrorism risk
insurance. Keeping our economy moving must be our overriding concern. Leaving this problem
unresolved threatens our economic stability. The approach I have outlined limits the
6
government's direct involvement, retains all those elements of our private insurance system that
continue to operate well, and provides a transition period to allow the private sector to establish
market mechanisms to deal with this insidious new risk that confronts our nation.
There are no perfect solutions to this problem. We have developed what we believe is a
sound approach. As I explained earlier, we do not believe that creation of a reinsurance pool can
be accomplished under the time constraints we face, but we would be glad to explore
modifications to our approach with the Committee.
I would be pleased to answer any questions the Committee may have.
7
D EPA R T lVl E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 1:30 P.M. EDT
OCTOBER 24,2001
CONTACT: BETSY HOLAHAN
(202) 622-2960
TERRORISM RISK INSURANCE
TESTIMONY OF THE HONORABLE PAUL H. O'NEILL
SECRET ARY OF THE TREASURY
BEFORE THE
SUBCOMMITTEE ON CAPITAL MARKETS, INSURANCE AND GOVERNMENT
SPONSORED ENTERPRISES
UNITED STATES HOUSE OF REPRESENTATIVES
Mr. Chairman, Congressman Kanjorski, and Members of the Committee, I appreciate the
opportunity to comment on terrorism risk insurance. These hearings are extremely important.
We believe that there is a real and pressing need for Congress to act on this issue now. As I will
discuss in more detail, market mechanisms to provide terrorism risk insurance coverage have
broken down in the wake of September 11. Such coverage is now being dropped from property
and casualty reinsurance contracts as they come up for renewal, with most policies renewing at
year-end. If Congress fails to act, reinsurers have signaled their intention to exclude such
coverage meaning that primary insurers may have to drop this coverage or institute dramatic
price increases. As a result, after January 1 the vast majority of businesses in this country are at
risk for either losing their terrorism risk insurance coverage or paying steep premiums for
dramatically curtailed coverage. This dynamic can in tum be expected to cause dislocations
throughout our economy, particularly in the real estate, transportation, and energy sectors.
1. The Problem
The terrorist attacks of September 11 created widespread uncertainty about the risk and
potential costs of future terrorist acts. Since September 11, we have endured this uncertainty
every day as a country. It has permeated every sector of our economy.
A key part of the govemment's response to the events of September 11 is to ensure that
our economic stabilitv is not undermined bv terrorist acts. Continued economic activity is
dependent on well fu~ctioning financial m~rkets - where the lifeblood of capital is provided to
business enterprises. Financial markets allocate capital based on the potential success of a
business. In doing so, financial markets rely on the insurance sector to mitigate certain types of
risk that are not directly related to the plans or operations of a business.
PO-719
_Far press releases, speeches. public schedules and official biographies, call our 24-hour fax line at (202) 622-2010
.
Insurance companies manage risk in economic activity and facilitate the efficient
deployment of capital in our economy by estimating probabilities of possible adverse outcomes,
and pooling risk across a large group. Since September 11 the uncertainty surrounding terrorism
risk has disrupted the ability of insurance companies to estimate, price, and insure the risk.
We learned on September 11 that, while perhaps highly improbable, terrorists are capable
of enormous destruction. Could such an event be repeated? As a country and a government, we
are doing everything in our power to prevent a repetition of anything like the events of
September 11. But how does an insurance company assess this uncertainty? How does an
insurance company price for it? At the moment, there are no models, no meaningful experience,
no reasonable upper bound on what an individual company's risk exposure may be.
Insurance companies do not "take" risks. They knowingly accept and mutualize risks.
They are private, for-profit enterprises. If they do not believe they can make money by
underwriting a partiCUlar risk, they will not cover it. Because insurance companies do not know
the upper bound of terrorism risk exposure, they will protect themselves by charging enormous
premiums, dramatically curtailing coverage, or - as we have already seen with terrorism risk
exclusions - simply refusing to offer the coverage. Whatever avenue they choose, the result is
the same: increased premiums and/or increased risk exposure for businesses that will be passed
on to consumers in the form of higher product prices, transportation costs, energy costs and
reduced production.
The consequences of uncertainties surrounding terrorism risk are already evident in the
airline sector. The Department of Transportation's initial projection is that, as a result of the
September 11 attacks, airlines will pay nearly $1 billion in premium increases for terrorism risk
insurance in the next year despite a congressionally imposed cap on third-party liability. Within
the next few months, similar increases can be expected for other forms of economic activity
deemed "high risk" - if coverage is available at all. Higher premiums will divert capital away
from other forms of business investment.
The need for action is urgent. From our conversations with insurance company
representatives, state insurance regulators, policyholders, banks and other entities which provide
financing for property transactions, the next two months are critical. The insurance industry
relies on a complicated structure of risk sharing. Risk is shared among primary insurers,
reinsurers, and retrocessionairs (i.e., providing reinsurance to the reinsurers). This structure has
worked well in the past and greatly contributed to widely spreading losses associated with the
events of September 11 across the insurance industry.
However, in light ofthe uncertainty created by September 11, reinsurers have told us that
they will no longer cover acts of terrorism in their reinsurance contracts with primary insurers.
And as I have said, most property and casualty insurance contracts are up for renewal at yearend. This will create the following choices for insurers: assume all of the risk of terrorism
coverage and raise prices to cover all of the associated, un shared costs; reduce coverage levels;
or cancel coverage. Any of these choices has the potential to cause severe economic dislocations
in the near-term either through higher insurance costs or higher financing costs.
2
2. Objectives
In grappling with this problem, we have had several objectives.
First and foremost, we want to dampen the shock to the economy of dramatic cost
increases for insurance or curtailed coverage. We also want to limit federal intrusion into private
economic activity as much as possible while still achieving the first objective. And we want to
rely on the existing state regulatory infrastructure as much as practicable.
Note that none of these objectives are directed at providing government assistance to the
insurance industry. The industry is absorbing the financial losses it contracted for as a result of
the September 11 attacks, and is fully capable of making good on those losses. The industry is
also capable of continuing to provide insurance for non-terrorist hazards. The problem, as I have
said, is one of uncertainty about future terrorist risk. At the moment, there is no basis upon
which to price terrorism risk and no sense of the upper bound on the risk exposure.
3. Options
Over the past few weeks, a variety of proposals have emerged to deal with the problem I
have outlined. Before turning to the approach we have developed, I will briefly discuss a few of
the alternatives we considered and some of the shortcomings we identified with each.
A case could be made to treat terrorism risk insurance like war risk insurance. During
World War II, the federal government provided property owners with insurance protection
against loss from enemy attack. Similarly, the Israeli government provides insurance for
terrorism risk. This approach would recognize the terrorist threat as one made against all
Americans and would establish the broadest possible risk pool for insuring against this risk. At
the same time, such an approach implies a permanent federal intrusion in the market so long as
any terrorism risk remains.
A second approach, one suggested in various forms by insurance industry representatives,
involves the creation of a reinsurance company to pool terrorism risk. This model follows an
approach developed in the United Kingdom in response to IRA terrorist activities. This
approach has some appeal, especially in providing a vehicle for pooling the industry's risk while
providing an upper bound on industry losses through a government backstop. With more time,
or in different circumstances, this approach may have been desirable.
In our judgement, however, it has several significant shortcomings. First, the approach
ultimately leads to the federal government setting premium rates by establishing the rate charged
to the pool for the government's backstop. If the basic problem is that the insurance industrywhose business it is to measure and price risk - cannot currently price terrorism risk without
distorting markets, why would we think the government can do a better job?
Establishing a pool would also take time, and time is very limited since most policies
expire at year-end. It is unclear how long it would take industry to capitalize the pool. In the
interim, the government's exposure could be substantial, insofar as it would be liable for 100
3
percent of losses that exceeded the pool's capitalization. In addition, we question whether the
government could move quickly enough on its end to establish the contracts, the pricing
structure, and the regulatory structure needed to make the proposal work.
Finally, the pool approach creates a federal insurance regulatory apparatus with some
presumption of pennanence, and a potentially enonnous pool of captive capital that we may
never need to use. We believe that there will be less uncertainty about terrorism risk a few years
from now and that uncertainty will be more manageable by the private sector than is the case
today. Given that, why undertake the effort to create a monopoly reinsurer and give a new
federal regulator the power to both set prices and regulate insurance companies and their
activities?
A third option would be to simply set a large industry deductible and let the federal
government cover all losses from acts of terrorism past that point. For instance, the federal
government could require the insurance industry to cover all losses up to, say, $40 billion in a
given year and the federal government would pay all losses above that amount.
This approach has two substantial drawbacks. First, it does not address the fundamental
problem: the industry has no basis for knowing - and hence pricing - terrorism risk. A large
deductible would require them to assess premiums large enough to cover a large potential loss.
In the absence of better infonnation, we might well expect companies to price insurance as if
they fully expected losses up to the deductible amount. Second, this approach makes it difficult
to control losses above the deductible as insurance companies would have no incentive to limit
costs once their deductible has been paid.
4. A Shared Loss Compensation Program
After reviewing these and other options, and discussing these issues with congressional
and industry leadership and the state insurance regulatory community, we developed an approach
that we believe best accomplishes the objectives I set forth. Let me say at the outset that this
approach reflects the current evolution of our thinking on this issue. We want to work with
Congress to achieve the best possible solution. As I have said, the insurance industry can easily
protect itselfby eliminating coverage or charging very high premiums. What we are trying to do
is craft a plan that will prevent the economic dislocations that will otherwise take place ifprivate
insurers follow the course they are now on. It is imperative that we find a solution that works in
the marketplace. We must get it right, and we must get it right now.
When terrorists target symbols of our nation's economic, political and military power,
they are attacking the nation as a whole, not the symbol. This argues for spreading the cost
across all taxpayers. Yet there are also reasons to limit the federal role. If property owners do
not face any liability from potential attacks, they may under-invest in security measures and
backup facilities. In addition, the insurance industry has sufficient experience and capacity to
price some portion of the risk associated with terrorism and has the infrastructure necessary to
assess and process claims.
4
Under the approach we are suggesting, individuals, businesses, and other entities would
continue to obtain property and casualty insurance from insurance providers as they did before
September 11. The terms of the terrorism risk coverage would be unchanged and would be the
same as that for other risks.
Any loss claims resulting from a future terrorist act would be submitted by the
policyholder to the insurance company. The insurance company would process the claims, and
then submit an invoice to the government for payment of its share.
The Treasury would establish a general process by which insurance companies submit
claims. The Treasury would also institute a process for reviewing and auditing claims and for
ensuring that the private/public loss sharing arrangement is apportioned among all insurance
companies in a consistent manner. State insurance regulators would also play an important role
in monitoring the claims process and ensuring the overall integrity of the insurance system.
Through the end of 2002, the government would absorb 80 percent of the first $20 billion
of insured losses resulting from terrorism and 90 percent of insured losses above $20 billion.
Thus, the private sector would pay 20 percent of the first $20 billion in losses and 10 percent of
losses above that amount.
Under this approach the federal government is absorbing a portion -- but only a portion -of the first dollar oflosses, which we believe is important to do in the first year of the program.
The key problem faced by insurance companies right now is pricing for terrorism risk. While
this type of loss sharing approach does not completely alleviate that problem, it does provide
insurance companies with the ability to evaluate potential losses on a policy by policy basis, with
clearly defined maximum exposures. For example, on a $100 million commercial policy the
insurance company's maximum exposure would be $20 million. If industry losses were greater
than $20 billion that exposure would be reduced even further.
More importantly, price increases to policyholders should be lower under this approach
than under an approach that requires companies to absorb 100 percent of losses up to a large,
aggregate industry loss deductible. Under this approach, if an insurance company's maximum
exposure was defined at $20 million on a $100 million policy, the insurance company could then
price that $20 million exposure on the probability of a complete loss event occurring.
Suppose instead that the insurance industry had to absorb $20 billion in losses before any
government loss sharing began. Then, in our example, the insurance company's maximum loss
exposure would be $100 million on that policy, not $20 million. Pricing to this maximum loss
would create the economic dislocation we are trying to avoid.
The role of the federal govenunent would recede over time, with the expectation that the
private sector would further develop its capacity each year. As private sector capacity increases,
the nature of the government's loss sharing agreement would also change. Given more time and
experience, we believe that the insurance industry could reestablish robust risk-sharing
arrangements such as reinsurance that would enable the private sector to insure losses from
terrorism before the government loss sharing commenced.
5
Thus, in 2003, we would have the private sector be responsible for 100 percent of the first
$10 billion of insured losses, 50 percent of the insured losses between $10 and $20 billion, and
10 percent of the insured losses above $20 billion. The government would be responsible for the
remainder.
In 2004, the private sector would be responsible for 100 percent of the first $20 billion of
insured losses, 50 percent of the insured losses between $20 and $40 billion, and 10 percent of
the insured losses above $40 billion. The government would be responsible for the remainder.
To preserve flexibility in an extraordinary attack, combined private/public liability for
losses under the program would be capped at $100 billion in any year. It would be left to
Congress to determine payments above $100 billion.
The federal government's involvement would sunset after three years. It is our hope,
indeed our expectation, that the market problem we face today will have been corrected by then
so that the private sector will be able to effectively price and manage terrorism risk insurance
going forward. Of course, should that prove not to be the case, Congress and the President can
reevaluate the program in place and decide at that time on an extension of the program or
establishment of some other approach.
This approach would also provide certain legal procedures to manage and structure
litigation arising out of mass tort terrorism incidents. This includes consolidation of claims into
a single forum, a prohibition on punitive damages, and provisions to ensure that defendants pay
only for non-economic damages for which they are responsible. It is important to ensure that
any liability arising from terrorist attacks results from culpable behavior rather than overzealous
litigation. These procedures are important to mitigating losses arising from any future terrorist
attack on our nation, and are an absolutely essential component of the program I have outlined.
Finally, this approach requires a clear definition of an "act of terrorism." We suggest that
the Secretary of the Treasury, with the concurrence of the Attorney General, and in consultation.
with other members of the Cabinet, be given authority to certify that a terrorist act had taken
place for purposes of activating the shared loss compensation arrangement.
We believe that this approach dampens any adverse economic impact from a sudden increase
in the cost from terrorism risk insurance over the next 12 months. The imposition of a deductib Ie
in the second year, and an increase in the deductible in the third year, permits the federal
government to gradually withdraw from the market as the private sector adapts to measuring and
pricing terrorism risk.
5. Conclusion
Mr. Chairman, for the reasons I have set forth, the Administration believes that the
economy is facing a temporary, but critical, market problem in the provision of terrorism risk
insurance. Keeping our economy moving must be our overriding concern. Leaving this problem
unresolved threatens our economic stability. The approach I have outlined limits the
6
government's direct involvement, retains all those elements of our private insurance system that
continue to operate well, and provides a transition period to allow the private sector to establish
market mechanisms to deal with this insidious new risk that confronts our nation.
There are no perfect solutions to this problem. We have developed what we believe is a
sound approach. As I explained earlier, we do not believe that creation of a reinsurance pool can
be accomplished under the time constraints we face, but we would be glad to explore
modifications to our approach with the Committee.
I would be pleased to answer any questions the Committee may have.
7
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omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
Contact: Tara Bradshaw
(202) 622-2014
October 24, 2001
For Immediate Release
TREASURY ISSUES GUIDANCE ON CHARITABLE LEAVE-BASED
DONATION PROGRAMS
Employees Call DOllate Leave TtL'( Free
Treasury and IRS today issued interim guidance that provides employees will not be
taxed on donated leave. In the aftermath of the September 11 th terrorist attacks, a number of
employers have adopted or are considering adopting leave-based donation programs. These
programs generally allow employees to forgo their vacation, sick, or personal leave in exchange
for their employers' contributing the value of that leave to charity.
The Notice eliminates uncertainty regarding the Federal income tax treatment of
payments by employers under these programs, by providing that employees will not be taxed on
donated leave. The Notice applies to payments made to charities before January 1,2003. The
Notice also solicits comments as to the taxation of leave-based donation programs and whether
the existing tax rules should be modified with regard to such programs.
"In the aftermath of the September 11 th attacks employers and employees are trying to
make a difference by contributing to various relief funds. We want to facilitate these worthwhile
efforts by eliminating concerns about the tax consequences," stated Mark Weinberger, Treasury
Assistant Secretary for Tax Policy.
The text of Notice 2001-69 follows.
-30-
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,
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Part III B Administrative, Procedural and Miscellaneous
Treatment of Certain Amounts Paid to Section 170( c) Organizations under Employer LeaveBased Donation Programs
Notice 2001-69
PURPOSE AND OVERVIEW
In the aftermath of the September 11, 2001 terrorist attacks, a number of employers have
adopted or are considering adopting leave-based donation programs, under which employees
forgo vacation, sick, or personal leave in exchange for employer contributions of amounts to
organizations described in
3
170( c) of the Internal Revenue Code. This Notice provides interim
guidance on the application of income and employment taxes to, and the proper reporting of,
payments by employers under these programs. During the period covered by this interim
guidance, the Internal Revenue Service and the Treasury Department intend to study whether it
may be appropriate to modify the regulations under
3
61 to address certain leave-based donation
programs.
BACKGROUND
Under general assignment-of-income tax principles, where, pursuant to an agreement or
understanding, services are rendered to a person for the benefit of an organization described in ~
170( c) and an amount for such services is paid to such organization by the person to whom
services are rendered, the amount so paid constitutes income to the person performing the
services. Section 1.61-2(c) of the Income Tax Regulations. See also Lucas v. Earl, 281 U.S. 111
(1930); Rev. Rul. 58-495, 1958-2 C.B. 27. Under general constructive receipt principles, when
income is made available so that the taxpayer may draw upon it at any time, the income is
constructively received by the taxpayer unless the taxpayer's control of its receipt is subject to
substantial limitations or restrictions. Section 1.4S1-2(a). However, application of assignmentof-income and constructive receipt principles depends on the facts and circumstances of each
case. See, e.g., Commissioner v. Giannini, 129 F.2d 638 (9th Cif. 1942).
INTERIM GUIDANCE
The Service will not assert that payments made by an employer to an organization
described in 3 170( C), in exchange for vacation, sick, or personal leave that the employee elects
to forgo, constitute gross income or wages of an employee, provided that the payments are made
to such organizations before January 1,2003. Similarly, the Service will not assert that the
opportunity to make such an election results in constructive receipt of gross income or wages for
employees.
Amounts to which this interim guidance applies need not be included in Box 1,3 (if
applicable), or 5 of the Form W-2.
Participating employees may not claim a charitable contribution deduction under § 170
with respect to the value of forgone leave excluded from compensation and wages. In the case of
an employer, the Service will not assert that payments made under such programs before January
1,2003 are deductible under § 170, rather than under § 162.
REQUEST FOR COMMENTS
The Service and the Treasury Department invite comments on the taxation of leave-based
donation programs, including comments on whether 3 1.61-2(c) should be modified to except
certain leave-based donation programs from the assignment-of-income doctrine, and on
appropriate limitations to any such exception. Comments are also requested on the application
of constructive receipt principles in cOlll1ection with those programs. Finally, comments are
requested on what types ofleave-based donation programs employers currently offer.
Comments may be submitted on or before February l, 2002, to Internal Revenue Service,
P.O. Box 7604, Ben Franklin Station, Washington, DC 20224, Attn: CC:lTA:RU (Notice 200169), Room 5226. Submissions may also be sent electronically via the Internet to the following email address: notice.comments@ml.irscounsel.treas.gov. All materials submitted will be
available for public inspection and copying.
DEPART~tENT
OF
THE
lREASURY
TREASURY
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.. 20220. (202) 622·2960
FOR IMMEDIATE
October 24, 2001
RELEASE
Contact: Public Affairs
(202) 622-2960
Media Advisory
WHO
Secretary Paul O'Neill and Governor George Pataki
WHAT
Photo Op at the top of the Meeting
WHEN
Wednesday, October 24, 2001, 5:00 PM
WHERE
Office of the Secretary, 3rd floor Main Treasury
This is a photo op only at the top of the meeting. Please
assemble in the large conference room across from the Secretary's office
to be escorted in. Please call the office of Public Affairs 202-622-2960 to be
cleared into the Building.
IMPORTANT
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EMBARGOED UNTIL 2:00 P.M. EDT
October 24, 2001
CONTACT: ROB NICHOLS
(202) 622-2960
ST ATEMENT OF JOHN B. T AYLOR
UNDER SECRETARY OF TREASURY FOR INTERNATIONAL AFFAIRS
BEFORE
THE HOUSE SMALL BUSINESS COMMITTEE
Thank you, Chairman Manzullo, Ranking Member Velazquez, and members of the
Committee for inviting me to participate in this hearing on "Trade in Services."
I would like to focus my opening remarks today on international trade in financial
services. Financial services-from banking to pension fund management to insurancerepresent one of the most exciting and dynamic sectors of the economy. Consumers take for
granted the convenience of ATMs, online banking and bill payment, and a host of other
innovations that make financial transactions cheaper and less time-consuming. Businesses today
rely on an increasingly sophisticated range of financial products to hedge risk, provide for
greater stability in their operations, and make their services more competitive.
The benefits that Americans enjoy in this arena are the result of the innovation and
development of the U.S. financial services sector, which has played an important role in making
our entire economy one of the most competitive in the world. Smali- and medium-sized
businesses have benefited from developments in the financial services sector, particularly the
increased variety of insurance and retirement-savings vehicles that are now available to small
businesses. Greater trade in financial services will offer even more significant benefits to
American consumers and businesses.
Benefits to Americans of Trade in Financial Services
U.S. firms are preeminent worldwide in the field of financial services. Securities firms
like Goldman Sachs and Morgan Stanley, banks such as Citigroup and Wells Fargo, and
insurance companies such as Aetna and Prudential have become tndy global institutions.
The U.S. financial services market is highly diverse and competitive, encompassing more
than 5,000 broker dealers, 9,000 banks, and 8,000 insurers. Many of these are local financial
institutions, such as Home State Bank and Franklin Life Insurance Company which service the
businesses and consumers of North em Illinois. Small- and medium-sized financial institutions
continue to play an essential role in the economy.
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.
In 2000, U.S. cross-border exports of financial services -- banking, securities, and
insurance -- totaled $19.5 billion, while cross-border imports of financial services were $13.7
billion (these figures do not include intra-firm transactions). The overwhelming majority of
financial services provided by U.S.-owned firms to clients in other countries (and by foreignaffiliated firms to clients in the United States) are not cross-border transactions, but rather are
furnished by branches and subsidiaries of U.S. firms established in host countries (and foreign
branches and subsidiaries in the United States). In 1998, affiliates of foreign firms in the United
States provided some $75 billion in financial services, and affiliates of U.S. firms abroad
provided $47.2 billion in insurance alone.
Improving the access of U.S. financial institutions to foreign markets helps our exporters
continue to expand and develop new markets, building upon the American competitive
advantage in the provision of these services. Liberalizing trade in financial services on a
multilateral basis through the World Trade Organization (WTO) can help small- and mediumsized financial institutions, many of which do not have special access arrangements with foreign
countries, to enter foreign markets. With the advent of internet banking and online trading,
smaller U.S. businesses that cannot afford to set up a foreign office can provide individuals
living in other countries with advanced financial services that American consumers enjoy.
Liberalizing trade in financial services also benefits U.S. consumers and businesses
outside of the financial sector, partiCUlarly small businesses. While America is generally seen as
the leading exporter of financial services worldwide, it also is a significant importer of financial
services from other countries, notably in insurance. Numerous foreign financial institutions and
foreign capital have played a vital role in the development of the world's most competitive and
largest capital market.
Americans benefit in several ways from the increased competition, innovation, and
productivity that result from the increased supply of foreign financial services.
First, American consumers benefit from the latest and most innovative financial products,
whicb in part is due to the competition provided by foreign providers. For instance, American
investors in the last decade have seen an explosion of new types of annuities, mutual funds, and
bond or equity derivatives to increase their savings and investment potential, many of which are
organized or managed by foreign-affiliated entities or based on foreign securities.
Second, another benefit is the lowered costs of financial services in the United States.
Today, the United States has one of the most open, transparent financial markets in the world,
supported by prudent financial sector legislation and strong regulation. Over half of the
investment banks to which U.S. Treasuries are sold ("primary dealers") are foreign-owned. This
competition yields internationally low costs, which enables U.S. firms to make the investments
needed to expand the productive capacity of the U.S. economy.
Benefits to Emerging Markets and Developing Countries of Trade in Financial Services
In emerging markets and developing countries, liberalization of a country's external trade
regime in financial services is integrally related to its domestic financial sector liberalization and
2
the openness of its capital account. And, as we all know, the costs of poorly managed
liberalization can be high. I would like to review some lessons of recent financial crises and the
change that is evolving in the international community's approach to financial sector
management.
Foreign participation contributes to financial system strengthening, particularly in
emerging market economies. For example, entry of U.S. banks into emerging market countries
is accompanied by an array of tangible and intangible benefits for the local banking sector.
Particularly significant are the capital funds that a subsidiary bank brings with it upon entry into
the foreign market, which can be especially welcome in the case of acquisitions of distressed
institutions, such as in Mexico, Korea, Thailand, the Czech Republic, Hungary and Poland.
Among the intangible benefits are the introduction of new technology and products,
improvements in training and the transfer of skills, and improvements in market practices and
infrastructure. Examples of services which U.S. financial firms could introduce into foreign
markets are innumerable, but include auto financing and health insurance to China, financial
leasing and charge cards to Russia, to name a few. Foreign participation also introduces a higher
degree of competition, which usually leads to lower prices, better quality services, and more
competitive financial institutions.
Of critical importance, foreign banks can increase stability in emerging market banking
sectors, as well. Using their global experience, technological advances, and well-trained
management, foreign banks are able to import advanced credit risk management practices. To
respond to the volatility of interest and exchange rates, global banks have developed highly
technical models and techniques to measure value-at-risk and associated products, such as
hedges and interest rate swaps. Moreover, foreign offices of U.S. banks are subject to U.S.
supervision and standards of practice. As a result, local regulatory authorities and domestic
banks are exposed to the exacting standards of our regime through contact with these offices.
Foreign banks in developing countries have stronger credit growth, more aggressive
provisioning for potential losses, and higher loss-absorption capabilities. Domestic banks often
adopt the advanced credit risk practices of their new competitors, and domestic regulators face
pressure to adopt international standards to regulate the new market entrants. All of these effects
of foreign bank ownership impart important stabilizing influences on domestic banking systems
in emerging markets. Foreign participation helps strengthen, and make more stable, a country's
financial services sector.
A recent WTO study of 27 emerging market countries found that allowing foreign
financial institutions to establish locally and engage in a broad spectrum of financial activities
contributed to greater financial sector stability. For banks in particular, a recent study of
financial crises in emerging markets in Latin America showed that during periods of crisis,
foreign banks established in those countries actually increased their local lending relative to
domestically-owned institutions. This is aided by such institutions having an international
capital base and not having concentrated pre-crisis lending to the country involved, unlike
domestic institutions in the affected countries.
3
These lessons have not been lost on the countries that underwent crisis -- such as
Mexico, Korea, Indonesia, Thailand, and Brazil -- which have, as part of their adj ustment efforts,
either accelerated liberalization of market access in their financial services sector or openly
sought the entrance of foreign service suppliers to their market. An internationally open system
does not mean an unsupervised one. Robust prudential supervision is indispensable for
maintaining financial sector stability. This has been enshrined in the GATS framework, which
grants WTO members wide discretion to adopt measures necessary to preserve financial sector
stability and integrity and to protect consumers and investors.
Status of Financial Services Negotiations
In 1997, for the first time, a broad group of countries (now 107), including the most
important financial markets, made commitments to guarantee a certain level of market access
and national treatment to foreign financial service suppliers in the WTO. By binding their
markets open in a trade agreement, countries increased predictability and reduced risks for
foreign and domestic providers alike.
It is fair to say that the 1997 WTO agreement primarily stabilized market access, in some
countries at relatively low levels, rather than liberalizing it. Therefore, by prior agreement, new
negotiations were started in the WTO in 2000. It is important for countries with significant
barriers in place to make commitments that go beyond current practice, unlike the last round
where the current levels of liberalization were the ceiling and not the floor for almost all
scheduled commitments.
As part of that process, the U.S. submitted an initial financial services proposal last
December in which we stated our expectations for negotiations concerning (1) core market
access commitments (e.g., openness to foreign investment in all subsectors) to be adopted by all
WTO members and (2) a set of transparency principles for regulation (e.g., prior notice and
comment, time limits for decisions on license applications).
The U.S. market access proposals are important to help our exporters continue to expand_
and develop new markets. This is particularly true for the small- and medium-sized businesses
that do not have special access arrangements with foreign countries. Some examples of our
market access proposals are:
•
Countries should remove restrictions on a foreign supplier's ability to establish a local
presence in its preferred legal form (i.e. subsidiary, branch, joint-venture, etc.). For
example, foreign equity participation is currently subject to ceilings in the Philippines,
Malaysia, Thailand and India, while legal structure is limited in Malaysia, Pakistan and
Romania.
•
Countries should remove prohibitions on their residents consuming financial services
abroad: this will become increasingly important as e-commerce develops in the financial
sector. With the advent of internet banking and online trading, it is now possible for U.S.
businesses, especially smaller ones that can not afford to set up a foreign office, to extend
4
financial services to individuals living in other countries.
Transparency principles are critically important in the financial services sector. Even
with access to a foreign market, almost all of the barriers to trade in financial services are
contained in domestic regulations. Given the existence of the GATS prudential measures clause,
one key way to eliminate barriers in the financial sector is to ensure that financial regulators use
best practices in the development and application of regulations. We also believe that
transparency is particularly important for small- and medium-sized firms seeking to do business
abroad because they typically do not have the resources to navigate opaque regimes.
Some principles for the development of regulations include: make proposed regulations
publicly available with a written explanation of their purpose, establish procedures for receiving
public comments in a reasonable period of time, create a workable mechanism to respond to
those comments, and, unless in the case of an emergency, allow a reasonable period of time for
companies to begin compliance.
Once the regulations are developed, countries should establish transparent procedures for
the application of regulations. Some of these principles include: make all regulations publicly
available at a reasonable cost, establish in writing the activities for which a license is required
and make public all procedures and criteria for applications, provide applicants with reasons for
the denial of an application and allow for resubmission where feasible, and allow for a
reasonable period of time and set of rules for examinations.
These best practices in regulation are vitally important for foreign service providers that
are not as familiar with the domestic rules and procedures in all of the many countries that they
could potentially utilize as an export market.
In addition to multilateral talks in the WTO, we also have ongoing negotiations of free
trade agreements (Chile, Singapore and FT AA), in which we hope to obtain state-of-the-art
financial services provisions due to the sophistication of these trading partners. For example, we
are examining a broad concept of national treatment and the use of so-called "negative listing" of
exceptions, which introduces a bias against restrictions by requiring a country to specifically
identify each one. These could enhance bilateral and regional trade, be used as a model for other
trade agreements, and ultimately provide impetus to multilateral negotiations.
To sum up, both the United States and other countries benefit greatly from liberalization
in trade in financial services.
The Importance of Trade Promotion Authority
The U.S. government could more effectively negotiate the opening of foreign financial
services markets, and achieve our other objectives in all of these forums, once it has new Trade
Promotion Authority.
Trade Promotion Authority (TPA) will give the President the tools he needs to negotiate
new trade agreements. These agreements -- which offer the same benefits as a tax cut -- will
5
increase growth in the United States and the world. It will assure that the United States is not left
behind as the European Union and others negotiate more liberal market access for themselves.
Trade is important to the U.S. economy. Recent studies predict that new trade
agreements will significantly boost economic growth. The IMF and World Bank estimate that
reducing tariffs in a new global trade round will generate global benefits of $250 billion to $550
billion per year. Another study estimates that cutting global trade barriers to goods and services
by one-third would result in global gains of $613 billion, including U.S. gains of $177 billion per
year. This amounts to $2,500 per year for the typical American family. Bilateral and regional
free trade agreements (FT As) also offer significant benefits -- an agreement on the Free Trade
Area of the Americas would increase U.S. GDP by an estimated $53 billion, or about $800 per
year for the typical American family. Small- and medium-sized enterprises will share in these
benefits as they turn more and more to export markets.
The U.S. economy has benefited tremendously from trade liberalization in the past and it
stands to benefit even more in the future. If the United States is to remain a leader in the global
economy, it must also be a leader in global trade. To assure our leadership, Congress needs to
pass TPA.
As President Bush said earlier this month, "We must keep on the path of economic
progress. That progress begins with freer trade. Trade is the engine of economic advancement.
On every continent, in every culture, trade generates opportunity and enhances entrepreneur
growth. And trade applies the power of markets to the needs of the poor. It has lifted countless
lives in all regions, from Asia to Australia to the Americas."
Mr. Chairman, those sentiments are exactly right. Thank you for inviting me to testify
here today, and with that I would be glad to take your questions.
6
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC
)239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
October 23, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
29 -Day Bill
October 25, 2001
November 23, 2001
912795HW4
Term:
Issue Date:
Maturity Date:
CUSIP Number:
2.280%
High Rate:
Investment Rate 1/:
2.320%
Price:
99.816
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 63.36%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
23,926,900
17,566
7,982,660
17,566
°
°
SUBTOTAL
23,944,466
8,000,226
2,022,114
2,022,114
Federal Reserve
TOTAL
$
$
25,966,580
$
10,022,340
Median rate
2.260%: 50% of the amount of accepted competitive tenders
~s tendered at or below that rate.
Low rate
2.240%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-cover Ratio
=
23,944,466 / 8,000,226
=
2.99
1/ Equivalent coupon- issue yield.
http://www . pu blicdebt. treas.gov
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1REASURY
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 9: 00 A.M.
october 24, 2001
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960
TREASURY ANNOUNCES DEBT BUYBACK OPERATION
On October 25, 2001, the Treasury will buy back up to $1,000 million par
of its outstanding callable issues with final maturity between February 2010
and November 2014.
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
~e 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-724
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HIGHLIGHTS OF TREASURY DEBT BUYBACK OPERATION
October 24, 2001
Par amount to be bought back ... Up to $1,000 million
Operation date . . . . . . . . . . . . . . . . . October 25,2001
Operation close time . . . . . . . . . . . 11:00 a.m. eastern daylight saving time
Settlement date . . . . . . . . . . . . . . . . October 29,2001
~nimum 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
nds
fractional 32
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 (%)
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
CUSIP Number
912810 CM
912810 CP
912810 CS
912810 CV
912810 CY
912810 DB
912810 DF
912810 DJ
912810 DL
912810 DN
Total
8
1
5
8
2
1
2
4
9
5**
Par Amount
OUtstanding*
2,315
2,987
4,081
3,545
4,048
10,303
12,607
4,481
4,781
6,006
55,154
Par Amount
Privately
Held*
1,457
1,811
2,821
2,471
3,073
8,385
9,566
3,611
3,875
4,811
41,881
* Par amounts are as of October 23, 2001.
** This is the only callable security eligible for the STRIPS Program.
As of October 22, 2001, the par amount held as STRIPS is $3,908 million.
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 and Federal Government accounts.
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
october 24, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 2-YEAR NOTES
Interest Rate:
Series:
CUSIP No:
Issue Date:
Dated Date:
Maturity Date:
2 3/4%
V-2003
9128277E6
High Yield:
Price:
2.770%
October 31, 2001
October 31, 2001
October 31, 2003
99.961
All noncompetitive and successful competitive bidders were awarded
securities at the high yield.
Tenders at the high yield were
allotted 86.62%. All tenders at lower yields were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
.Tender Type
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
Accepted
42,471,620
748,520
$
o
SUBTOTAL
o
19,000,076 1/
43,220,140
Federal Reserve
6,142,615
6,142,615
TOTAL
$
49,362,755
18,251,556
748,520
$
25,142,691
Median yield
2.740%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low yield
2.700%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-cover Ratio
=
43,220,140 / 19,000,076
l/ Awards to TREASURY DIRECT
=
=
2.27
$644,768,000
http://www.publicdebUreas.gov
'0-725
D EPA R T l\I E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
Thursday, October 25,2001
CONT ACT: Media Services
(202) 927-8727
MEDIA ADVISORY
WHO:
Kenneth Dam, Deputy Secretary of the Treasury
Jimmy Gurule, UnderSecretary of the Treasury for Enforcement
Robert C. Bonner, Commissioner of the U.S. Customs Service
What:
U.s. Customs will announce a joint Treasury and Justice Department
Initiative to target the systems~ individuals and organizations that
serve as sources of funding for terrorists.
When:
Thursday, October 25, 200l at 11 :00 a.m.
Where:
U.S. Customs Service
Ronald Reagan Building, Concourse Level
1300 Pennsylvania Ave. NW
Please have valid identification, and be prepared to have your bags
and gear x-rayed.
\Vashington, D.C.
PO-726
!..ar press releases.,. 'Peech~ puhlic'Ochedules and official biographies, call our 24-hour fax line at {2(2) 622-2040
*"
D EPA R T l\I E N T
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THE
T REA SUR Y
NEWS
1RFASURY
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
October 25, 2001
Contact: Rob Nichols
(202) 622-2910
DEPUTY SECRETARY DAM REMARKS
AT THE LAUNCH OF "OPERATION GREEN QUEST"
Multi-Agency Initiative to Target Sources
of Funding for Terrorist Organizations
Thank you for that kind introduction.
Today, I am pleased to announce that the same talent pool and expertise that
brought down AI Capone, will now be dedicated to investigating Usama Bin Ladin and
his terrorist network.
We are here to announce the launch of "Operation Green Quest," a new multiagency financial enforcement initiative.
This operation is made up of investigators with:
Customs,
IRS,
Financial Crimes Enforcement Network,
Office of Foreign Assets Control, and
The Secret Service.
These entities globally recognized as the best and brightest financial investors in the
world.
The goal of Operation Green Quest is to augment existing counter-terrorist
efforts by bringing the full scope of the government's financial expertise to bear against
systems, individuals, and organizations that serve as sources of terrorist funding.
Operation Green Quest has been created to serve Treasury's broader mission:
To deny terrorist groups access to the international financial system,
To impair the ability of terrorists to fundraise, and
To expose, isolate and incapacitate the financial networks of terrorists.
Here a summary of Operation Green Quest's purpose PO-727
_For press releases . . speeches. public schedules and official biographies, call our 24-hour fax line at (202) G22-2D40
,
·u.s. Government Printing Office
1998·619·559
The initiative will target current terrorist funding sources and identify possible
future funding sources - such as underground financial systems, illicit charities, and
corrupt financial institutions - which are among the entities that will be scrutinized as
possible facilitators of terrorist funds.
Utilizing leads from these entities and information developed independently,
Operation Green Quest will launch comprehensive investigations resulting in blocking
orders, criminal prosecutions, civil and criminal forfeitures, and other actions.
With that, I am delighted to offer the podium to Undersecretary of the Treasury
Jimmy Gurule ...
D EPA R T l\I E N T
1REASURY
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
October 25, 2001
Contact: Rob Nichols
(202) 622·2910
UNDERSECRETARY GURULE'S REMARKS
AT THE LAUNCH OF "OPERATION GREEN QUEST"
Thank you for that kind introduction.
I am proud to join Deputy Secretary Dam and Customs Commission Bonner to
announce "Operation Green Quest" - the NEWEST enforcement tool that Treasury, the
nation's oldest law enforcement agency, will put to use in the war against terrorist
financing.
It was just a few weeks ago that President Bush outlined our mUlti-faceted war
against the AI-Qaida terrorist network. The President declared that "that starving the
terrorists of funding" would be a primary objective of our war on terrorism.
The new war is a conflict "without battlefields and beachheads." In fact the first
shot in this new war was fired from Treasury, in the form of the Executive Order freezing
terrorist Assets.
To support the Administration's Financial War on Terrorism, we have created this
Anti-Terrorist Financing Task Force, named "Operation Green Quest."
It employs Enforcement's complement of investigative assets along with the
Foreign Terrorist Asset Tracking Center's intelligence analysis to identify, disrupt,
dismantle and ultimately "bankrupt" terrorist networks and their sources of funding.
Operation Green Quest's organization will maximize Treasury's investigative
tools while permitting liaison and partnership with federal agencies and foreign countries
to facilitate the widest range of effective actions against terrorists and their financiers,
ranging from blocking bank accounts and freezing assets to federal criminal
prosecution.
Let me take a moment to state clearly the goals of this initiative, and those goals are
to:
-.!or
PO-728
press releases, speeches. public schedi,iles and official biographies, call our 24-hour fax line at (202) 622-2040
•
Identify, disrupt, and dismantle the financial operations of charities and nongovernmental organizations (NGOs) associated with Usama Bin Laden (UBL) and al
Qaida.
•
Identify, disrupt, and dismantle the financial operations of terrorist organizations
beyond al Qaida.
•
Identify, infiltrate, and ultimately dismantle hawalas and other underground
remittance systems used to provide funds to UBL, al Qaida, and other terrorist
organizations.
•
Develop individual and group targets for analysis by the Foreign Terrorist Asset
Tracking Center (FTAT).
•
Take preventative action by providing requesting nations technical assistance and
support to requesting countries to identify accounts linked to terrorist networks.
With that, I am delighted to introduce XXXXX
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federal financing
vVASHINGTON, D.C. 20220
bonkNE
FEDERAL FINANCING BANK
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September 2001
Kerry Lanham, Secretary, Federal Financing Bank (FFB),
announced the following activity for the month of August 2001.
FFB holdings of obligations issued, sold or guaranteed by
other Federal agencies totaled $37.8 billion on August 31, 2001,
posting an increase of $279.5 million from the level on July 31,
2001.
This net change was the result of an increase in holdings
of agency debt of $464.8 million and in holdings of governmentguaranteed loans of $39.7 million, and a decrease in holdings of
agency assets of $225.0 million.
The FFB made 59 disbursements
and received 8 prepayments during the month of August.
Attached to this release are tables presenting FFB August
loan activity and FFB holdings as of August 31, 2001.
PO-729
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Page 2
FEDERAL FINANCING BANK
AUGUST 2001 ACTIVITY
Date
Borrower
Amount
of Advance
Final
Maturity
Interest
Rate
AGENCY DEBT
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.
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
8/01
$221,100,000.00
8/02
$13,400,000.00
8/03
$620,000,000.00
8/03
$287,900,000.00
8/06
$940,000,000.00
8/06
$234,200,000.00
8/07
$780,000,000.00
8/07
$67,000,000.00
8/08
$660,000,000.00
8/08
$65,600,000.00
8/09
$300,000,000.00
8/09
$258,600,000.00
8/10 $1,020,000,000.00
8/10
$268,900,000.00
$750,000,000.00
8/13
$138,900,000.00
8/17
8/20
$225,000,000.00
$251,900,000.00
8/20
8/21
$250,100,000.00
$109,200,000.00
8/22
$18,800,000.00
8/23
$41,900,000.00
8/31
8/02/01
8/03/01
8/06/01
8/06/01
8/07/01
8/07/01
8/08/01
8/08/01
8/09/01
8/09/01
8/10/01
8/10/01
8/13/01
8/13/01
7/31/03
8/20/01
8/21/01
8/21/01
8/22/01
8/23/01
8/24/01
9/04/01
3.654%
3.653%
3.654%
3.642%
3.653%
3.643%
3.642%
3.643%
3.643%
3.612%
3.643%
3.581%
3.612%
3.560%
3.858%
3.487%
3.519%
3.541%
3.510%
3.510%
3.530%
3.497%
8/14
8/14
$220,117.00
$44,427.00
7/31/25
8/01/05
5.492% S/A
4.447% S/A
8/08
8/08
8/13
8/13
8/14
8/14
$543,808.05
$126,012.17
$80,488.34
$57,534.23
$481,603.21
$95,864.46
9/04/29
9/04/29
3/01/30
9/01/09
9/04/29
9/04/29
5.548%
5.548%
5.469%
4.602%
5.421%
5.421%
S/A
S/A
S/A
S/A
S/A
S/A
8/01
8/01
8/03
8/06
$2,000,000.00
$225,000.00
$3,500,000.00
$214,000.00
6/30/05
9/30/31
12/31/30
12/31/01
4.250%
5.417%
5.492%
3.475%
Qtr.
Qtr.
Qtr.
Qtr.
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
~oley Square Office Bldg.
San Francisco OB
DEPARTMENT OF EDUCATION
Tougaloo College
Tougaloo College
Barber-Scotia College
Tougaloo College
Tougaloo College
Tougaloo College
RmAL UTILITIES SERVICE
~TC Communications #709
)rairie Elec. #696
Eas~ Mississippi Elec. #740
)anen Telephone Co. #719
Page 3
FEDERAL FINANCING BANK
AUGUST 2001 ACTIVITY
Borrower
Ashley-Chicot Elec. #750
Hamil ton County Elec. # 686
Northern Electric #666
Burke-David Elec. #494
Citizens Tel (VA) #680
East Kentucky Power #491
Kankakee Valley Elec. #761
McLennan County Elec. #675
Morgan County Elec. #710
South Miss. Elec. #691
Sumter Elec. #735
Central Georgia Elec. #731
Coop. Power Assoc. #720
Big Horn Rural El ec. # 6 31
Interstate Tele #661
Logan County Coop. #749
Berkeley Electric #762
Lorain-Medina Electric #760
Tr i - S tat e # 7 5 7
South Texas Electric #505
BARC Electric #663
Washington Electric #655
Brazos Electric #561
Lighthouse Elec. #590
Jrange County Elec. #771
SjA is a Semiannual rate.
Qtr. is a Quarterly rate.
Date
Amount
of Advance
Final
Maturity
Interest
Rate
8/07
8/07
8/08
8/09
8/09
8/10
8/10
8/10
8/10
8/15
8/15
8/16
8/17
8/21
8/21
8/22
8/23
8/27
8/27
8/28
8/30
8/30
8/31
8/31
8/31
$1,189,000.00
$1,230,000.00
$351,000.00
$522,000.00
$87,000.00
$8,119,000.00
$1,000,000.00
$700,000.00
$278,000.00
$5,793,000.00
$2,500,000.00
$1,780,000.00
$5,050,000.00
$360,000.00
$2,251,274.00
$425,000.00
$5,000,000.00
$3,700,000.00
$17,731,000.00
$1,711,000.00
$2,550,000.00
$164,000.00
$4,833,000.00
$922,000.00
$230,000.00
12/31/35
1/02/35
1/02/35
1/03/33
12/31/15
12/31/24
12/31/35
1/02/35
12/31/09
12/31/30
12/31/35
12/31/01
12/31/35
1/03/34
12/31/19
12/31/35
1/03/05
12/31/35
12/31/25
12/31/24
1/02/35
1/02/35
4/01/02
1/03/34
12/31/35
5.528%
5.525%
5.530%
5.548%
4.946%
5.488%
5.462%
5.376%
4.661%
5.404%
5.430%
3.405%
5.324%
5.364%
5.013%
5.356%
4.097%
5.368%
5.284%
5.399%
5.265%
5.264%
3.279%
5.264%
5.196%
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
August 31, 2001
Jul y 31. 2001
Monthly
Net Change
8/1/01- 8/31/01
Fiscal Year
Net Change
10/1/00- 8131/01
Agency Debt:
U.S. Postal Service
National Credit Union Adm.-CLF
Subtotal*
$5.341.9
$0.0
$5.341. 9
$4.877.1
$0.0
$4.877.1
$464.8
$0.0
$464.8
-$3.920.1
$0.0
-$3.920.1
Agency Assets:
FmHA-RDIF
FmHA-RHIF
DHHS-Medical Facilities
Rural Utilities Service-CBO
Subtotal *
$2.570.0
$5.155.0
$0.0
$4.270.2
$11.995.2
$2.795.0
$5.155.0
$0.0
$4 270.2
$12,220.2
-$225.0
$0.0
$0.0
$0.0
-$225.0
-$840.0
-$385.0
-$0.6
-$56.7
-$1.282.3
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 *
$2.174.3
$26.6
$8.2
$1. 278. 7
$2,271.7
$13.1
$941.1
$13,601. 7
$133.3
$3.4
$20.452.3
$2.208.0
$25.2
$8.8
$1.278.7
$2,271.5
$13.1
$941.1
$13,527.3
$135.4
$3.4
$20,412.6
-$33.7
$1.4
-$0.6
$0.0
$0.3
$0.0
$0.0
$74.4
-$2.2
$0.0
$39.7
-$216.1
$5.9
-$2.6
-$69.8
-$40.9
-$1.6
-$106.3
$612.2
-$25.9
-$0.1
$155.0
Grand total*
$37.789.4
$37,509.9
$279.5
-$5.047.5
* figures may not total due to rounding
+ does not include capitalized interest
--
1
D EPA R T 1\11 E N T
0 F
THE
T REA SUR Y
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C.' 20220' (202) 622-2960
EMBARGOED UNTIL 2: 30 P.M.
October 25, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction 13-week and 26-week Treasury bills totaling
$29,000 million to refund an estimated $22,799 million of publicly held 13week and 26-week Treasury bills maturing November 1, 2001, and to raise new
cash of approximately $6,201 million. Also maturing is an estimated $8,000
million of publicly held 4-week Treasury bills, the disposition of which will
be announced October 29, 2001.
The Federal Reserve System holds $11,275 million of the Treasury bills
maturing on November 1, 2001, in the System Open Market Account (SOMA).
This
amount may be refunded at the highest discount rate of accepted competitive
tenders either in these auctions or the 4-week Treasury bill auction to be
held October 30, 2001.
Amounts awarded to SOMA will be in addition to the
of'fering 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 $1,158 million into the 13-week bill and $750
million into the 26-week bill.
The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
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-730
-----------------------------------------------------------------------------------------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 NOVEMBER 1, 2001
October 25, 2001
Offering Amount
Public Offering
$15,000 million
$15,000 million
$14,000 million
$14,000 million
Description of Offering:
Term and type of security
CUSIP numbe~·
Auction date . . . ..
. ...... .
Issue date . . . . . . .
. ..... .
Maturity date . . . . . . . . . . . . .
Original issue date . . . . . . . . . . . . .
Currently outstanding .......... .
Minimum bid amount and multiples
91-day bill
912795 JE 2
October 29, 2001
November 1, 2001
January 31, 2002
August 2, 2001
$18,694 million
$1,000
182-day bill
912795 JS 1
October 29, 2001
November 1, 2001
May 2, 2002
November 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.
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 aC90unt 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.
TREASURY NEWS
FROM THE OFFICE OF PUBLIC AFFAIRS
FOR IMMEDIATE RELEASE
October 26,2001
PO-731
REMARKS BY DEPUTY U.S. TREASURY SECRETARY KENNETH W. DAM
BUSINESS ROUNDTABLE
WASHINGTON, D.C.
OCTOBER 26, 2001
"Money that Kills: The Financial Front of the War on Terrorism"
When I last spoke to the Business Council in 1983, I gave a brief tour of the foreign policy
horizon, but my remarks focused largely on the War in Lebanon and the cultural wars in Latin
America. Regrettably, I must speak to you today about another war. (Perhaps I have a black
cloud over my head.) I thought you would - and should - be interested in the Financial Front of
the War on Terrorism.
The Financial Front has received a great deal of attention since September 11 tho In large part,
this attention stems from President Bush's declaration-days after the tragic attacks against the
World Trade Center-"that starving the terrorists of funding" would be a primary objective of our
war on terrorism.
The President has declared that this new war will be a conflict "without battlefields and
beachheads," in short, an unconventional war. While the Department of Defense, under Secretary
Rumsfeld, has deployed special forces to Afghanistan and Secretary Powell has succeeded in
bringing on board some new U.S. allies, I submit that nowhere is this conf1ict more
unconventional than in the Administration's efforts to cripple the al-Qa'ida financial network.
Launching a financial front in the war on terrorism is a new endeavor, one that requires a fresh
policy perspective. True, tracking al-Qa'ida's assets is not a "macho" task. But it is a thinking
man's war, and that demands skillful diplomacy, vigilant coordination and seamless infonnation
sharing. Let me explain why, but first let me explain what we are facing.
At present, our best infonnation tells us that al-Qa'ida has cells in more than forty (-+0) countries.
And being a transnational entity means that al-Qa'ida behaves like one, often merging, absorbing
and forging alliances with other prominent ten'orist groups, like the Egyptian Islamic Jihad and
Algeria's Salafist Group for Call and Combat.
Another key fact is that Bin Laden's personal fortune is no longer al-Qa'ida's most important
asset. While Bin Laden's inheritance helped establish him as a terrorist leader, over the last
several years Bin Laden has built an impressive fundraising operation. Today, al-Qa'ida receives
the bulk of its financial support from a collection of Islamic charities and relief organizations, the
majority of whose money comes from wealthy individual donors supportive of Bin Laden's
cause.
If, as the State Department noted in its April 2001 report on "Patterns of Global Terrorism,"
state-sponsored terrorism is on the wane, then Bin Laden's borderless al-Qa'ida network is well
ahead ofthe curve. It is also not altogether clear who is supporting whom these days in
Afghanistan, the Taliban or al-Qa'ida. Al-Qa'ida provides financial support, the Taliban safe
haven.
The real picture that emerges is one of Bin Laden and al-Qa'ida operating as "international
venture terrorists," raising money from wealthy donors and seeding start-up terrorist cells in
Europe, Asia, the Middle East and the Americas. For these terrorists, money is not an end. It is
simply a means .for financing future terrorism.
Since the mid-90's, Bin Laden and al-Qa'ida also have taken special care to transfer and hide
their finances in a way that avoids detection by even the most discerning authorities. Suitcases
full of cash, infonnal Hawala transfers and even everyday money orders have become regular
methods for sending terrorist money abroad. Front companies are also used to transfer funds. In
addition, some banks help obscure terrorist money by allowing the transfer of funds from donor
to destination. These illegal and unconventional methods complicate our tracking efforts.
Nevertheless, I believe we have made significant progress in limiting Bin Laden's and al-Qa'ida's
ability to finance terrorism, I'd like to highlight a few of our recent accomplishments, starting
with those on the domestic front.
In many ways, the President fired the first salvo in the Administration's war on terrorism by
signing an Executive Order on September 24th, which blocks the U.S. assets of twenty-seven
(27) individuals and organizations affiliated with the September 11 th terrorist attacks. On
October 12, we added another thirty-nine (39) names to that list, bringing our current total to
sixty-six (66). As our global investigation continues to unfold, I am confident that more names
will be added and more assets will be blocked. We will starve the terrorists of their funding.
Those of you familiar with the mechanics of asset blocking or the activities of the Treasury's
Office of Foreign Assets Control, or OFAC-the agency responsible for enforcing these sanctionsmight be asking how these efforts differ from prior actions taken to disrupt terrorist financing.
One difference is that the President's Executive Order greatly expands the coverage of previous
Executive Orders from "terrorism aimed at disrupting the Middle East Peace Process" to "global
terrorism." The Executive Order also expands the prohibited class to anyone providing financial
or other support or services to terrorist groups. In addition to blocking U.S. assets, the order also
denies foreign banks associated with terrorism access to U.S. markets. But the Executive Order
is only a first step.
Another difference is that we are marshaling all of the investigative resources at our disposal in
the fight against terrorist financing. And to do that, we are having to overcome interagency
tensions, turf battles and differing priorities that have stunted our progress in the past. Let me
mention three of these problems in detail.
First, consider the shackles placed on Treasury's Financial Crimes Enforcement Network, or
"FinCEN," which collects infonnation on suspicious financial activities from banks, analyzes it
and then reports the results to law enforcement. In the past, FinCEN has maintained a certain
distance from intelligence agencies because our rules limit the sharing of domestic information
with our foreign intelligence agencies. While an important safeguard, that distance hampered our
efforts in the past to connect suspicious domestic financial behavior with foreign intelligence
leads in fighting terrorism more effectively. AI-Qa'ida terrorism is, after all, a foreign conspiracy
operating against U.S. targets, and it is impossible to stamp it out without coupling foreign
intelligence and domestic infonnation.
A second problem has been using intelligence leads to designate terrorists and terrorist groups
under the Executive Order. Doing so might expose "sources and methods" used to gather foreign
intelligence in the first place, and that could compromise intelligence operatives in field. In the
past, OFAC has been particularly reluctant to rely solely on intelligence for fear of having to
defend its actions in court.
Third, obtaining infom1ation from the FBI-our nation's lead domestic investigator-also has been
difficult, partly because the FBI is preoccupied with building the strongest possible criminal case
for conviction. The FBI's primary interest has been pursuing and protecting evidence, not
exchanging leads with other federal agencies.
Many of you have read about the anti -terrorism bill passed by the Congress and signed into law
this morning by the President. This Act, the USA Patriotism Act, will help us break down some
of these barriers.
Among other things, the Act amends the Bank Secrecy Act, the Fair Credit Reporting Act and
the Right to Financial Privacy Act to allow the broad sharing of terrorist-related information
between FinCEN and our foreign intelligence agencies. Under the Act, law enforcement and
intelligence agencies will now also be able to share grand jury material and electronically
intercepted evidence to the extent such infonnation pertains to foreign intelligence and
counterintelligence.
to consider classified infomlation in reviewing blocking
Moreover , the Act authorizes J' udaes
b
orders, provided such review is performed in camera. By removing the judge's review of
classified information from the nonnal adversarial process, intelligence "sources and methods"
will be protected from disclosure.
As for resolving the inherent conflict between prosecution and terrorist asset tracking, the
President has made it clear that prevention of terrorism is at least as important as its prosecution.
Still, the tracking of terrorist finances must be carefully balanced with the tracking of the
terrorists themselves, lest we interfere with the vital mission of the FBI. In these and many other
ways, Congress is giving us the tools we need to win the war on tenoris111.
How then are we going about the search for terrorist money? Since mid-September, we have put
together an interagency task force that includes the Treasury's enforcement and international
affairs components, CIA, the Departments of State and Justice, the FBI and the NSC. This task
force works to identify potential financial intem1ediaries of suspected terrorists and their
associates. A new Financial Terrorist Asset Tracking Center is also looking at all terrorist
organizations worldwide so that we can create a big picture profile of what the financial
infrastructure 0 f these groups looks like.
In addition, yesterday, I joined Under Secretary for Enforcement, Jimmv GumIe, and the U.S.
Customs Conunissioner, Rob Bonner, in announcing a new joint ventur~ - Operation Green
Quest - fOn11ed by Treasury's Customs, IRS, and Secret Service investigators. These financial
crime investigators are recognized as among the best financial investigators in the world. They
will target current terrorist funding sources and identify possible future funding sources - such as
underground financial systems, illicit charities, and corrupt financial institutions. In Sh01i, the
same type of financial investigators that put Al Capone behind bars will now work to put Bin
Laden and his terrorist network out of business.
Another feature of our financial front against terrorism has been to benefit trom the expertise of
the financial institutions. Without going into specifics, I can say that U.S., as well as foreign,
financial institutions have been very helpful and cooperative in the stmggle against terrorism.
Over the long term, the continued cooperation of banks and financial institutions is essential. By
the way, both OFAC and FinCEN have established toll-free 1-800 numbers for financial
institutions, and this method of instant communication already is being used extensively.
Nevertheless, even with hetter interagency cooperation and resource allocation, we are well
aware that Osama Bin Laden and al-Qa'ida are not stupid enough to park the bulk of their wealth
in the United States. That is why our international coalition building is so critical. We can send
B-2 bombers from Missouri to Afghanistan and back, and we can launch Tomahawk missiles
from the Indian Ocean into Jalalabad. But we can't just reach into foreign financial institutions
and block terrorist accounts. Local governments must be persuaded to do that. Allies are
important in the physical struggle against terrorism; they are a sine qua non on the financial
front.
Both multilaterally and bilaterally, we have been working hard to enlist the cooperation of other
countries. An important first accomplishment ofnewJy confirn1ed U.S. Ambassador to the UN
Jolm Negroponte was the prompt passage of UN Security Council Resolution 1373. This U.S.sponsored measure calls on members to criminalize the provision of funds to all terrorists,
effectively denying terrorists safe financial haven anywhere. UN resolution 1373 drew heavily
from the text of President Bush's Executive Order against terrorism and expanded an earlier UN
Security Council resolution (1333) that required states to freeze all assets belonging to Osama
Bin Laden and his associates. The UN will update its designations of terrorist entities as member
states, including the U.S., continue to release additional names.
As with any UN resolution, however, members mllst have the political will to implement these
measures. On this score, I am pleased to repOli that members are taking swift action to draft and
pass implementing legislation.
I know this because, almost daily, I spend time on the phone with other Finance Ministers and
Central Bank Governors to discuss their commitment and their progress in the financial war.
Treasury, with the help of U.S. diplomatic missions, is kept currently inforn1ed of asset blocking
and other actions taken in furtherance of our coalition goals. Since September 11 th, one hundred
fifty-two (152) countries have joined the effort to disrupt terrorist assets. Eighty-one (81) have
blocking orders in force.
This worldwide effort has an important deterrent effect and Ii ttle has been made 0 f this important
point in the press. Because of our coalition efforts, terrorist entities, as well as those who aid and
abet terrorism financially, have been put on notice that their activities are being scrutinized by
investigators in just about everywhere in the world. This fact was underscored last month by a
joint call of the G-7 Finance Ministers for all countries to establish functioning Financial
Investigative Units (FIUs), similar to FinCEN. \Ve also expect that a model information
exchange process will be agreed upon when the 58-member Egmont Group, which coordinates
such activities, meets latcr this month in Washington, D.C.
Another organization playing a key role in the coalition is the 3 I-member Financial Action Task
Force, or FATF. FATF has taken a lead in the global fight against money laundering. Now,
FATF is turning its attention to the financial war on terrorism. When FATF members meet next
week, they hope to establish international standards and issue special guidance for financial
institutions on practices associated with the financing of terrOlism. They are working to develop
a process-similar to their influential money laundering "name and shame" approach-for
identifying countries helping to facilitate terrorist financing. This will help step up global
pressure on countries who fail to crack down on terrorist financing within their borders.
At the same time, we are pushi ng forward on our program of negotiating a network of tax
information exchange agreements with countries throughout the world. Terrorist financing,
money laundering and tax evasion are a trio of closely related phenomena. Countries that tacitly
collaborate in promoting tax evasion schemes and that facilitate money laundering create fertile
ground for terrorist financing.
Even those countries-many of them among the world's poorest-who are not members of the
above groupings and may even have been the targets of censure, are showing interest in not
being left out of the coalition. But many of these countries need help in becoming effective
coalition members. Many have neglected proper regulation of their banking sectors in the past.
Sometimes legislation has to be passed, often to the chagrin of self-interested opposition leaders.
Implementation requires new bureaus and new regulators. Already we have offered and extended
technical assistance to many nations. We need to help them so that they can in tum help in the
struggle. We cannot rest until terrorist money has no place left to hide.
We welcome public declarations of support from foreign governments. We welcome the new
legislation. All of these steps are important in building momentum. But implementation and
enforcement are what is critical. We are keeping track, account by account, dollar by dollar. We
expect all countries to do the same. The war on terrorism may be unconventional, but it's a real
war. We will win if we stay the course.
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Contact: Tara Bradshaw
(202) 622-2960
For Immediate Release
October 26, 2001
TREASURY, IRS PERMIT USE OF ESTIMATED TAX OVERPAYMENTS TO
SATISFY EMPLOYMENT [PAYROLL] TAX DEPOSITS
ANOTHER IN A SERIES OF POST-SEPTEMBER II ACTIONS TO ASSIST TAXPAYERS
The Treasury Department and the Internal Revenue Service today announced procedures that
business taxpayers may use to redesignate their estimated income tax overpayments as
employment tax deposits, so that their overpayments can be used to pay their current
employment tax obligations. This will help businesses improve cash flow.
The Announcement addresses the situation where taxpayers have already paid estimated tax
payments that equal or exceed their income tax liability for the year. This could occur due to
unanticipated losses as a result of the September 11 tli attacks. Businesses whose projected
income was reduced as a result of the September 11 th terrorist attacks will be allowed to apply
previous estimated tax payments to cover their current employment tax obligations.
"The Treasury and IRS have been working hard to help businesses affected by the September
11 th terrorist attacks. This redesignation of estimated taxes is a common sense move that will
help some of the hardest hit businesses meet their cash flow needs," stated Mark Weinberger,
Treasury Assistant Secretary for Tax Policy.
This is another in a series of administrative actions the Treasury Depalimcnt and the IRS have
taken in the past two weeks to alleviate the tax burdens on individuals and businesses as a result
of changing circumstances surrounding the September 11 tragedy. Treasury and IRS have
provided mid-quarter convention relief (10118/01) and issued interim guidance that provides
employees will not be taxed on donated leave (10/24/01).
These administrative actions are in addition to the filing relief provided to individuals and
businesses immediately after the attacks (9112/01 and 9/13/01).
The text of Announcement 2001-112 follows:
Part IV - Items of General Interest
Redesignation of Estimated Income Tax Payments
PO-732
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Announcement 2001-112
Many taxpayers have infonned the Internal Revenue Service (IRS) that their income for the
current year will be substantially less than previously expected because of economic disruptions
resulting from the September 11, 2001 Terrorist Attack. Some taxpayers who made estimated
income tax payments now believe their tax liability for their current taxable year will be lower
than the sum of the estimated tax payments they have already madc. Several of these taxpayers
have asked whether the IRS will permit them to redesignate their estimated income tax
payments, in whole or in part, as deposits to satisfy their obligations to deposit employment and
withheld income taxes.
This announcement clarifies that the IRS will permit the redesignation of estimated income tax
payments as tax deposits to satisfy obligations to deposit employment taxes imposed by chapters
21,22, and 23 of the Internal Revenue Code, and income taxes withheld under chapter 24. To
make this redesignation, a taxpayer should contact the IRS through its Disaster Relief toll-free
telephone number 1-866-562-5227.
Taxpayers who wish to redesignate their estimated tax payments should keep in mind their
estimated income tax obligations. If, as a result of the redesignation, the amount of estimated tax
payments is reduced below the amount required to satisfy the taxpayer's estimated income tax
obligation, the taxpayer may be liable for additions to tax under section 6654 or 6655.
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October 26, 2001
Contact: Betsy Holahan
(202) 622-2960
TREASURY TO lVIODIFY AUCTION RULES FOR REOPENINGS
Treasury published in the Federal Register on July 25, 2001, an Advance Notice
of Proposed Rulemaking that solicited public comment on alternatives for modifying the
Net Long Position (NLP) calculation and the 35 percent award limit in reopening
auctions of marketable Treasury securities, which are auctions of additional amounts of
previously issued securities.
This change will first be applied to the auction announcement for the 1O-year note
auction to be held on November 7, which will be the second reopening of 10-year notes
originally issued on August 15,2001. A statement regarding the change in NLP
calculation and the specific optional exclusion amount will be included in the auction
announcement.
Treasury will soon publish in the Federal Register a modification to its Ulllform
Offering Circular (31 CFR Part 356) regarding the NLP calculation. The change will
allow bidders the option of subtracting an amount for that security, up to approximately
35 percent of the outstanding amount of that security, from the bidder's holdings
(~ncluding STRIPS l principal components of the same security) in the calculation of the
NLP. The specific amount of holdings that may be excluded from the NLP calculation
will be stated in the Treasury offering armouncement for each particular auction. This
modification will help ensure continued broad participation in Treasury's reopening
auctions.
Once the rule change is published in the Federal Register, the optional exclusion
will apply to all reopening auctions of Treasury marketable securities. As with all
auctions, bidders should read the applicable offering alUlOuncement in conjunction with
the Uniform Offering Circular (DOC). If the provisions of an offering announcement are
different from the provisions of the DOC, the announcement takes precedence.
PO-733
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•
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1998·619·559
NEWS
OFFICE OF PUBUCAFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220 II (202) 622-2960
Treasury Contact: Michele Davis
(202) 622-2920
OMB Contact: Amy Call
(202) 395-7254
FOR llvIMEDLA TE RELEASE
October 29, 2001
JOINT STATE:'VIENT OF PAUL H. O'NEILL
SECRETARY OF THE TREASURY
AND
lVIITCHELL E. DANIELS, JR.
DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET
ON
BUDGET RESULTS FOR FISCAL YEAR 2001
SUMlVIARY
The Administration is today releasing the September 2001 Monthly Treasury
Statement of Receipts and Outlays of the United States Government!. The statement shows
the actual financial totals for the fiscal year that ended September 30, 2001, as follows:
•
A surplus of $127 billion. This reflects a $12 billion reduction in anticipated spectrum
auction recoveries. Absent this change, the surplus would have been $139 billion;
•
total receipts of $1 ,990 billion;
•
total outlays of $1,863 billion; and
•
a reduction in publicly held debt of $90 billion.
PO-734
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contaming these results can be found on the FmanClall'vlanagement Service website: at \Vww.fmstrcas.~ov
_Fw press releases, speeches, public schedules and official biographies, call our 24-hour fax line:at (202) 622-2040
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"We paid down public~v held debt again last year, becallse hardworking
Americans created a unified budget surplus in Washington. Reigniting Ollr vibrant
economy, while controlling spending, is the essenlial ingredient to ensuring budget
surpluses for years to come. "
- Secretary Paul H. 0 'Neill
"it was all important accomplishment that the federal governmellt recorded the
second largest surplus in lzistOlY and paid down $90 billion in debt last fiscal year.
However, circumstances have changed radically. We mllst make sure that this is not the
last surplus, by limiting additional spending to plirposes direct~v related to the Nation's
battle against terrorism. "
- Director Mitchell E. Daniels, Jr.
Table 1. TOTAL RECEIPTS, OUT LA YS AND SURPLUS
(in billions of dollars)
ReceiQts
2000 Actual ................................... 2,025
2001:
April Budget Estimate .................
Mid-Session Review Estimate ....
Actual ..........................................
Outla)::s
1,788
Surplus
237
1,856
1,855
1,863
281
158
12i
2,137
2,013
1,990
NOTE: Detail may not add to totals due to rounding.
SURPLUS
The FY 2001 unified surplus was $127 billion, or 1.3 percent of the Gross Domestic
Product (GDP). In nominal terms, the surplus is the second largest ever in U.S. history.
Receipts declined to 19.6 percent ofGDP, down from the near-record high of20.8 percent
in FY 2000. Receipts decreased by $35 billion or 1. 7 percent as compared to the FY 2000
actual. Spending was 18.3 percent of GDP. Outlays grew by $75 billion or 4.2 percent as
compared to the FY 2000 actual. This increase is less than the 5.0 percent growth rate in
outlays between FY 1999 to FY 2000.
~ Reflects a $12 billion reduction in anticipated spectrum auction recoveries. Absent tim change. the
surplus would have been $139 billion.
DEBT REDUCTION
Debt held by the public fell by $90 billion, the second largest reduction in history.
OUTLAYS
Total outlays for FY 2001 were $1,863 billion, $8 billion higher than the Mid-Session
Review (MSR) estimate. The major outlay changes since the MSR are described below.
Table 2 displays actual outlays as well as estimates from the April Budget and the MSR by
agency and major program.
Department of Agriculture. Actual outlays for the Department of Agriculture were $68.2
billion, $3.9 billion lower than the MSR estimate. Outlays by the Commodity Credit
Corporation were $1.5 billion below the MSR estimate because loan deficiency payments
for various crops, net lending activity, and crop disaster payments were lower than expected.
Outlays in the Food and Nutrition Service were $0.6 billion below the MSR estimate because
fewer people applied for Food Stamps and Child "Nutrition Programs than had been
anticipated. Forest Service outlays were $0.8 billion lower than the MSR due to slower-thanexpected spending for fire preparedness and other programs.
Department of Defense - Military. The Department of Defense - Military had actual outlays
of $291.0 billion, $2.7 billion higher than the MSR estimate. The difference was primarily
due to faster-than-expected implementation of aircraft, ship and missile procurement
programs and some expenditures, not anticipated in the MSR, from the anti-terrorism disaster
assistance and recovery response.
Department of Health and Human Services. Actual outlays for the Department of Health and
Human Services were $426.4 billion, $1.9 billion lower than the MSR estimate. Outlays for
Medicaid and the State Children's Health Insurance Program (SCHIP) were $1.4 billion
below the estimates in the MSR. This variance was primarily due to lower-than-expected
outlays in the month of September, which appeared to have been offset by higher outlays in
the beginning of October. Outlays by the Administration for Children and F&'11ilies were $0.4
billion less than anticipated primarily due to slower-than-expected spending in two programs
that received significant funding increases in FY 2001, the Low Income Home Energy
Assistance Program and the Child Care and Devciopment Block Grant.
Department of Housing and Urban Development (HUD). The Department of Housing and
Urban Development had actual outlays of $33.9 billion, $2.0 billion lower than the MSR
estimate. Net outlays for loans made prior to 1992 were 51.4 billion belmv the MSR because
oflower-than-expected claims for both multi-family and single family hOLlsing guaranteed
,.,
.J
loans. Outlays for public and Indian housing programs and other HUD programs were also
lower than anticipated.
Department of Transportation (DOT). Actual outlays for the Department of Transportation
were $54.1 billion, $3.6 billion higher than the MSR estimate. Part of this increase was due
to the recently enacted payments to help airlines offset losses incurred as a result of the
September 11 th terrorist attacks. In September, DOT distributed $2.3 billion of the $5.0
billion in direct assistance provided in the Air Transportation Safety and System Stabilization
Act. Outlays for the Federal Transit Administration (FTA) programs were higher than
anticipated because funds transferred from the Federal Highway Administration were
outlayed more quickly than anticipated. Similarly, reimbursements for the Transit New
Starts projects occurred faster because transit agencies began alternative methods to fund
projects, usually in advance ofFT A awards.
Department of Treasury. The Department of Treasury had actual outlays of$389.8 billion,
$2.8 billion higher than the MSR estimate. Interest on the public debt, which includes
interest paid to govenunent accounts as well as interest paid to the pUblic, was $359.5 billion,
$2.8 billion above the MSR estimate. This difference was primarily due to higher interest
received by trust funds (S 1.5 billion above the MSR) and other government accounts ($1.0
billion above the MSR). These interest payments to government accounts had no impact on
the surplus, because they were offset by changes in undistributed offsetting receipts and
various agency totals. Interest paid to the public was $0.2 billion above the MSR estimate,
Federal Emergency Management Agency (FEMA). Actual outlays for FEMA were $4.4
billion, $1.1 billion higher than the MSR estimate. About $0.6 billion of this increase was
due to the acceleration of disaster relief spending following Tropical Storm Allison, which
occurred on June 9, 2001, and affected five states. The remaining difference was mainly due
to additional spending following the September 11th attacks. FEMA spent $0.3 billion
responding to these attacks before the end of the fiscal year.
Federal Communications Commission (FCC), Actual outlays for the FCC were $4.0 billion,
$11.1 billion higher than the MSR estimate. Most of this difference was due to an $11.6
billion reduction in anticipated savings from spectrum auctions. This upward re-estimate in
net credit subsidies was based upon conservative assumptions that significantly reduced
expected recoveries. This increase was partly offset by Universal Service Fund outlays,
which were $0.5 billion below the MSR estimate, as a result of a slower rate of spending
than had been assumed.
Postal Service. Net outlays by the Postal Service were $2.4 billion, $1.1 billion above the
MSR estimate. Almost all of the difference was due to lower-than-projected mail revenue
as a result of the economic slowdown and the September 11 til attacks.
RECEIPTS
4
Total receipts for FY 2001 were $1,990 billion, $23 billion lower than the MSR
estimate. The shortfall was largely related to lower-than-expected collections of individual
income taxes and corporation income taxes due to the slowing economy. Collections of
social insurance and retirement receipts, excise taxes, and estate and gift taxes were also
lower than the MSR estimate. Table 3 displays actual receipts and estimates from the April
Budget and MSR by source.
Individual income taxes were $994.3 billion, $14.4 billion lower than the MSR estimate.
Most of the shortfall in individual income taxes was due to lower-than-estimated payments
of withheld taxes. In addition, payments of non-withheld taxes were below forecast. The
shortfalls in withheld and non-withheld taxes were partially offset by lower-than-estimated
refunds.
Corporation income taxes were $151.1 billion, $4.3 billion lower than the MSR estimate.
Lower-than-estimated corporate tax payments (in part related to filing and payment relief
granted by IRS to taxpayers affected by the September 11 th terrorist attacks) were partially
offset by lower-than-estimated refunds.
Social insurance and retirement receipts were $694.0 billion, $1.1 billion lower than the
MSR estimate. Lower-than-expected collections of unemployment insurance taxes largely
accounted for the reduction in this source of receipts.
Excise taxes were $66.2 billion, $1.4 billion lower than the MSR estimate. Lower-thanestimated payments of airline ticket excise taxes accounted for a significant portion of the
shortfall in this receipts source.
Estate and gift taxes were $28.4 billion, $1.6 billion lower than the MSR estimate.
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5
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EMBARGOED UNTIL 9:30 A.M. EST
October 29, 2001
Contact: Michele Davis
(202) 622-2920
REMARKS BY PAUL H. O'NEILL
UNITED STATES SECRETARY OF THE TREASURY
BEFORE THE EXTRAORDINARY PLENARY MEETING OF THE
FINANCIAL ACTION TASK FORCE
Madame President, members of the secretaliat, distinguished delegates to this
extraordinary plenary meeting of the Financial Action Task Force (FATF), good morning and
welcome to our Nation's capitol. I thank you for affording me this opportunity to speak with
you today.
For a dozen years, the membership of the Financial Action Task Force has worked to
safeguard the integrity of the international financial system. You have made impressive
progress countering the threats posed by money laundering. \Vithout the force of law or
treaty, this organization has convinced other nations to adopt laws and implement
enforcement regimes to bar the access of criminals to the international banking system.
Today, I ask you to devote your considerable experience to disrupt the misuse of the
international financial system by terrorists and those who channel funds to them. The threat
that terrorism poses to the world financial system demands from us an expanded effort to
combat the financing of terrorism and terrorist acts. I am confident that FATF is up to this
challenge.
In fact, FATF is uniquely positioned to take up the challenge of terrorist financing.
Our goal must be nothing less than the disruption and elimination of the financial frameworks
that support terrorism and its abhorrent acts. To achieve this end, we must commit to
employing every influence both within FATF membership and throughout the world.
Among your goals for this plenary should be:
•
Adopting special recommendations that will set the intemational standard for combating
terrorist financing;
• Ensuring that not only all FATF members, but indeed all countries, swiftly come into
compliance with these standards. I urge this group by the next plenary to have in hand
self-assessments and action plans for every country in the world.
PO-735
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•
•
Regular public reports on our successes in identifying and taking action against tenorist
financing. Taking action, in and of itself, is not a measure of success. It's the results we
achieve that will prevent future acts of tenorism.
Financing terrorism is an abuse of the international financial system and is repugnant to
the international community. Terrorism is a deliberate intent to cause senseless injury and
death, to intimidate populations, and to cause governments to act from fear. We must make
every effort to eradicate this menace.
Since the tragic events of September 11 th, I am pleased that over 150 countries have
expressed their support in the fight against terrorist financing. Over 80 countries have
blocking orders in place to freeze terrorist assets, including many nations represented here. I
thank those countries who have helped us and I look forward to continued cooperation.
Money knows no boundaries, and no nation can combat terrorist financing alone. We
must all cooperate. Similarly, this effort will extend far beyond F ATF and its membership.
The process must include the F ATF-style regional bodies as well as all responsible members
of the international community.
As this extraordinary plenary meeting of the F ATF turns its attention to the serious threat
posed by the financing of terrorism, I have every confidence in the success of these
deliberations and the actions that will follow. We ground our resolve for this task in the
goodwill and cooperation of the FA TF membership, and in the conscience of the greater
world community. Thank you.
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October 29,2001
CONTACT: Betsy Holahan
(202) 622-2960
TREASURY ANNOUNCES MARKET FINANCING ESTIMATES
The Treasury Department announced today that it expects to borrow
$31 billion in marketable debt during the October - Decen1ber 2001 quarter
and to target a cash balance of $35 billion on December 31. This includes
borrowing of an estimated $40 billion in marketable Treasury securities and
buybacks of an estimated $9 billion in outstanding marketable Treasury
secuntles. In the quarterly announcement on July 30, 2001, Treasury
announced that it expected to pay down a total of $36 bi11ion in marketable
debt and to target an end-of-quarter cash balance of $30 billion. The change
in borrowing reflects lower receipts from a weakening economy and fiscal
response to the September 11 th terrorist attacks already enacted.
Treasury also announced that it expects to borrow $59 billion in
marketable debt during the January - March 2002 quarter and to target a
cash balance of $30 billion on March 31.
During the July - September 2001 quarter, Treasury borrowed $74
billion in Inarketable debt and ended with a cash balance of $44 billion on
September 30. This included borrowing of $82 billion in marketable
Treasury securities and buybacks of $7% billion in outstanding marketable
Treasury securities. On July 30, Treasury announced that it expected to
borrow $51 billion in Inarketable debt and to target an end-of-quarter cash
balance of $55 billion. The increase in borrowing was primarily a result of
lower receipts and slightly higher outlays.
The Quarterly Refunding Press Conference will be held at 9:00 A.M.
on Wednesday, October 31,200 l.
PO-736
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'U,S, Government Printing Office 1998·619-559
DEPARTl\,'lENT
OF
THE
TREASURY
TREASURY
NEWS
OFFICE OF PUBLIC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N, W.• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 11: 30 A.M.
Contact:
october 29, 2001
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $12,000 million
to refund an estimated $8,000 million of publicly held 4-week Treasury bills
maturing November 1, 2001, and to raise new cash of approximately $4,000
million.
Tenders for 4-week Treasury bills to be held on the book-entry records of
TreasuryDirect will not be accepted.
The Federal Reserve System holds $11,275 million of the Treasury bills
maturing on November 1, 2001, in the System Open Market Account (SOMA).
This
amount may be refunded at the highest discount rate of accepted competitive
tenders in this auction up to the balance of the amount not awarded in today's
l~-week and 26-week Treasury bill auctions.
Amounts awarded to SOMA will be in
addition no 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 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 allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP), if they meet or exceed the reporting
threshold.
However, Treasury will not include NLPs in the calculation of award
limits for those bidders.
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-737
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HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED NOVEMBER 1, 2001
October 29, 2001
Offering Amount
Public Offering
. . . . . . . . . . . . . . . . . . . $12,000 million
. . . . . . . . . . . . . . . . . . . $12,000 million
Description of Offering:
. . . . . . . 28-day bill
Term and type of security
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . 912795 HM 6
Auction date . . . . . . . . . . . . . . . . . . . . . . . . October 30, 2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . November 1, 2001
Maturity date . . . . . . . . . . . . . . . . . . . . . . . November 29,2001
Original issue date . . . . . . . . . . . . . . . . . November 30, 2000
Currently outstanding . . . . . . . . . . . . . . . $48,215 million
Minimum bid amount and multiples .... $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 three decimals in
increments of .005%, e.g., 4.215%.
(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.
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
October 29, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
November 01, 2001
January 31, 2002
912795JE2
Term:
Issue Date:
Maturity Date:
CUSIP Number:
2.050%
High Rate:
Investment Rate 1/:
Price:
2.089%
99.482
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 41.63%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
$
Competitive
Noncompetitive
FIMA (noncompetitive)
30,791,685
1,527,617
250,000
$
15,000,153 2/
32,569,302
SUBTOTAL
5,384,375
5,384,375
Federal Reserve
$
TOTAL
37,953,677
13,222,536
1, 527,617
250,000
$
20,384,528
Median rate
2.040%: 50% of the amount of accepted competitive tenders
tendered at or below that rate.
Low rate
2.020%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
~s
Bid-to-Cover Ratio
=
32,569,302 / 15,000,153
==
2.17
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT
==
$1,262,700,000
PO-738
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
october 29, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
November 01, 2001
May 02, 2002
912795JS1
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
2.005%
Investment Rate 1/:
2.054%
Price:
98.986
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted
6.38%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Accepted
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
27,655,067
987,697
225,000
$
14,000,009 2/
28,867,764
SUBTOTAL
4,894,822
4,894,822
Federal Reserve
TOTAL
$
33,762,586
12,787,312
987,697
225,000
$
18,894,831
Median rate
1.990%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.945%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Sid-to-cover Ratio
=
28,867,764 / 14,000,009
=
2.06
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT
=
$804,009,000
http://www.publicdebttreas.goY
PO-739
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THE
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omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
October 29, 2001
Contact: Office of Public Affairs
(202) 622-2960
REMARKS BY
TREASURY SECRETARY PAUL H. O'NEILL
AT THE AGOA FORUM
OCTOBER 29, 2001
I would like to welcome our African colleagues to what we hope will be the
beginning of a continuing partnership for addressing the challenges and promoting the
potential for African development. I have traveled in Africa and seen the tragedy of
poverty first-hand: children afflicted by disease because they lack basics such as clean
water and sanitation, and adults who cannot eam enough to feed their families. Such
personal struggles are intensified when the surrounding social and political fabric is
frayed by poor governance, political instability and conflict, HIV/AIDS and other
infectious disease, and vulnerability to natural disaster.
A key element of the United States' economic development agenda is to expand
trade and investment opportunities around the world, to strengthen ties between
developed and developing countries. Our hope is to help improve African economic
growth by using the most potent development tools we have - open markets and the
private sector - to make a visible, concrete difference in the lives of Africans.
There are three major sets of partners with roles to play in supporting stronger growth
and productivity in Africa: African governments, the United States and other countries,
and the International Financial Institutions.
African governments have the primary responsibility for creating the conditions that
make economic growth and development possible. These include, first, political and
economic stability; second, greater investment in health and education, which provide
the human capital that is the foundation for increased productivity (all the more true in
the face of the AIDS epidemic that is devastating so many African economies); third, an
environment conducive to private investment, for creating export-led growth -- including
a more open trade and investment environment that will encourage the import of new
technologies and management practices on competitive terms. Finally, better governance
(including effective public expenditure management systems) and stronger institutions
are needed, to better control corruption and provide an appropriate framework for growth.
PO-740
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An increase in agricultural productivity can have an immediate impact. Agriculture
has been a foundation for stronger growth in many countries, including the United States.
Yet food production in Africa has grown by only 2.0 percent annually over the last 25
years. That compares with population growth of nearly 3.0 percent, so Africa is falling
farther behind. Productivity losses due to HIV/AIDS and other illnesses further constrain
output. Farmers need better roads and other infrastructure to provide access to markets,
greater availability of credit, and competitive prices for their products. African
economies need to increase their investment in agriculture well above the historic average
of7% of budget outlays.
The United States and other countries have a major role to playas well. They can
provide financing, technical and policy assistance, and debt relief. Greater access to our
markets is critical. Passage of the African Growth & Opportunity Act was intended as a
major contribution, and we are working on a follow-up bill to address some of the
problems in the original AGOA. We hope to work with many of your governments on a
new round of global trade negotiations. There is great potential for Africa to increase its
current 1% share of world trade and to realize major improvements in productivity in the
process.
I am fully committed to realizing the promise of the HIPC debt initiative. We are
reducing 100% of the bilateral debt owed by qualifying HIPC countries and are
contributing our share to funding the multilateral costs of debt reduction. We look for
other creditors to do likewise. But all participants, creditors and debtors alike, need to
look beyond debt to the broader development challenges that Africa faces.
The International Financial Institutions are Africa's major sources of financial,
technical, and policy assistance. But we would like to see them concentrate more of their
resources on countries where the policy environment is conducive to good results. Even
within those countries, we believe there is scope for better focussing the IFIs' efforts to
improve productivity. We should aspire to achieving clear and measurable outcomes,
within an acceptable time frame, in such areas as improving education and health,
removing constraints to higher productivity, and promoting more efficient governance.
We believe that a much higher share ofMDB resources for the poorest countries should
be provided in the form of grants: up to 50% for IDA-only countrics would be given as
grants for health, education, water and sanitation. This effort would reduce debt burdens
on the poorest countries, and only implies a modest reduction in reflows to the MDBs.
Stemming the flow of funds to global terror is one of the highest priorities of the
United States Government. Many countries, in Africa and throughout the world, have
committed their strong support to this effort. We hope all countries will continue to do
so, in particular by taking concrete actions to locate and block terrorist assets. The
United States is ready to assist, including through Treasury's Office of Foreign Assets
Control and Financial Crimes Enforcement Network (FinCEN). We understand that
some of these actions may be politically difficult, but we respectfully request your help
against an enemy that threatens all 0 f us.
I now would like to hear from you: What is going well in your economies? What
must be done better? What suggestions do you have for improving the developmental
effort in which we all are engaged? Are there some real success stories, and can they be
replicated? What is needed to attract more private investment - including the large stock
of flight capital that, by some estimates, greatly exceeds Africa's external debt? What
can the IFIs do to be more effective? I would also appreciate your comments on our
proposal for greater use of IDA grants.
-30-
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omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
Text as Prepared for Delivery
October 30, 2001
Contact: Betsy Holahan
(202) 622-2960
ACTING DIRECTOR OF THE OFFICE OF MACROECONOMIC ANALYSIS
KAREN HENDERSHOT
REMARKS TO THE TREASURY BORROWING ADVISORY COMMITTEE
OF THE BOND MARKET ASSOCIA TrON
The outlook for the economy has changed considerably since we last met. Three months
ago, activity was slowing but improvement in the second half of the year was widely anticipated.
The Blue Chip consensus forecast of some 50 private-sector economists collected just after our
last meeting expected real growth approaching 3 percent by the fourth quarter.
September 11 marks a watershed in the change of opinion. Not only did the terrorist
attacks of that day exact an enonnous human toll but they tipped fUliher off balance an economy
already treading a difficult course. By early October, Blue Chip forecasters sliced their real
growth estimate for the second half ofthe year from a pre-attack, early September figure of
approximately plus 2 percent annual rate to a negative 1 percent pace, a huge swing in just a
month's time.
The attacks added significant stress to an already sluggish economy. For industries in
difficulty before September 11, such as airlines and lodging, the assault no doubt hastened
adjustments. As a result, it now seems that some decline in real GDP is quite likely.
Whether the ultimate drop is in fact deep enough, sufficiently \-videly dispersed, and of
long enough duration to qualify as a recession will eventually be detem1ined by the National
Bureau of Economic Research (NBER), the official arbiter of business cycle dating. The NBER
has recently noted that of the four coincident indicators on which the Bureau relies most heavily,
so far only industrial production and business sales are clearly signaling recession and those are
heavily influenced by the weakened manufacturing sector. Of the other two coincident
measures, personal income continues to grow and employment has fallen by only 0.4 percent
much less than the 1.6 percent drop associated with the 1990-91 recession or the 3.0 percent
decline of the 1981-82 period.
Employment detail shows, however, that weakness is becoming more pervasive. The
private service-producing sector lost 117,000 jobs during the third quarter, the first such decline
since 1991.
PO-741
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2
Other indicators of labor market activity suggest further deterioration is likely. Initial
claims for state unemployment insurance benefits - a leading indicator of economic activity - hit
a ten-and-a-half year high in the latest week. The state insured unemployment rate rose
0.2 percentage point from the September to the October employment survey week and at
2.8 percent is at the highest point since 1993. This increase represented the addition of a huge
378,000 workers to the state insured unemployment rolls since September and points to
significant upward pressure on the more comprehensive national unemployment rate for October
to be released at the end of this week. It should be kept in mind that because the September
national labor market reading was taken early in the month, October's results will be the first to
capture the effect of the attacks on employment.
While labor market data may still hold some bad news, it is also possible that some
statistics may be exaggerating recent declines. The disruptive - and therefore temporaryeffects of the attacks may be included on top of genuine economic weakness. For instance, retail
sales fell by 2.4 percent in September - the largest monthly decline in a decade and a half. Yet,
such a drop should hardly come as a surprise in a month when retail enterprises in many cities
were shut down unexpectedly for at least a day - and those at airports for several days. In
addition, there was a substantial "CNN effect," with consumers glued to their TV's rather than
out shopping.
Developments in the consumer sector since September are somewhat more promising.
Weekly chain store data indicate that the immediate post-attack free-fall appears to have been
halted. In addition, estimates coming from the auto industry suggest that motor vehicle sales for
October could be the strongest of the year. The lure of zero-percent financing has boosted
results but the near-record sales pace many expect would certainly not be characteristic of a
.
.
senous receSSIOn.
While it is easy to emphasize the negatives most immediately in our field of vision, a
longer-term perspective helps explain why the consumer is not in full retreat.
•
Despite a rise of 1 full percentage point over the past year, the unemployment rate
remains below 5 percent and is still 0.6 percentage point lower than at the start of the
1990-91 recession.
•
Consumer price inflation, near 5 percent at the start of the last recession, now stands at
only 2-3/4 percent, an important factor in keeping personal income growing in real terms.
•
Even the prolonged decline in the stock market has still left the S&P500 up at nearly a
14 percent annual rate since the end of 1994, allowing many households to feel their asset
positions are relatively secure.
•
Finally, a wave of mortgage refinancings in response to 6-1/2 percent mortgage interest
rates has added cash to household budgets.
3
The position of the consumer sector is a positive for the economy. The monetary and
fiscal stimulus already either in the pipeline or in preparation offer further support. But the
possibility that risks may still lie ahead cannot be discounted.
Applications for mortgages for home purchase have been falling, pointing to the
likelihood of reductions in residential construction. New orders for investment goods plunged in
September, a sign that the investment cutbacks may continue into the next few months. And
already-falling corporate profits have come under pressure from reduced pricing power and
additional security costs.
That is the summary of recent economic developments and the near-term outlook.
-30-
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u.s. International Reserve Position
11/1/01
The Treasury Department today released US. reserve assets data for the week ending October 26,2001. As indic3ted in
rhis table, u.s. reserve assets totaled $69,753 million as of October 16,2001, do"",'ll from $70,218 million as of October 19,
2001.
(in US millions)
r. Official U.S. Reserve Assets
October 19 1 2001
70,218
TOTAL
1. Foreign Currency Reserves
I
1
a. Securities
Euro
5,514
Yen
11,250
Ofwhich, issuer headquartered in the U.S.
October 26 1 2001
69,753
TOTAL
Euro
16,764
5,486
Yen
TOTAL
11,204
16,690
0
0
b. Total deposits with:
bJ; Other central banks and BIS
b.ii. Banks headquartered in the U.S.
b.ii. Of which, banks located abroad
bJii. Banks headquartered outside the U.S.
b.iii. 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
9,250
4,339
13,589
9,189
4,152
0
0
0
0
0
0
0
0
18,015
17,926
10,806
10,752
11,045
11,045
0
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
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 SDR/dollar exchange rate for the reporting date. The IMF data for October 19 are final. The entries in the table
above for October 26 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IrvlF
data.
31 Gold stock is valued monthly at $42.2222 per fine troy ounce. Values shown are as of September 30, 2001. The August 31, 2001 value
was $11,044 million.
PO-742
13,34 ~
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
October 19, 2001
1. Foreign currency loans and securities
October 26, 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.a. Short positions
2.b. Long positions
3. Other
o
o
III. Contingent Short-Term Net Drains on Foreign Currency Assets
October 26, 2001
October 19, 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
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
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EMBARGOED UNTIL 2:30 P.M.
OCTOBER 30, 2001
CONT ACT: BETSY HOLAHAN
(202) 622-2960
TERRORISM RISK INSURANCE
TESTIMONY OF THE HONORABLE PAUL H. O'NEILL
SECRETARY OF THE TRESURY
BEFORE THE
COlYIMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
Mr. Chairman, Senator McCain, and Members of the Committee, I appreciate the
opportunity to comment on terrorism risk insurance. These hearings are extremely imponant.
We believe that there is a real and pressing need [or Congress to act on this issue now. As I will
discuss in more detail, market mechanisms to provide terrorism risk insurance coverage have
broken down in the wake of September 11. Such coverage is now being dropped from property
and casualty reinsurance contracts as they come up for renewal, with most policies renewing at
year-end. If Congress fails to act, reinsurers have signaled their intention to exclude such
coverage meaning that primary insurers may have to drop this coverage or institute dramatic
price increases. As a result, after January 1 the vast majority of businesses in this country are at
risk for either losing their terrorism risk insurance coverage or paying steep premiums for
dramatically curtailed coverage. This dynamic can in tum be expected to cause dislocations
throughout our economy, particularly in the real estate, transpOliation, and energy sectors.
1. The Problem
The terrorist attacks of September 11 created widespread uncertainty about the risk and
potential costs of future terrorist acts. Since September 11, we have endured this uncertainty
every day as a country. It has permeated every sector of our economy.
A key part of the government's response to the events of September 11 is to ensure that
our economic stability is not undemlined by telTorist acts. Continued economic activity is
dependent on well functioning financial markets - where the lifeblood of capital is provided to
business enterprises. Financial markets allocate capital based on the potential success of a
business. In doing so, financial markets rely on the insurance sector to mitigate certain types of
risk that are not directly related to the plans or operations of a business.
PO-743
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.
lhuhlic
Insurance companies manage risk in economic activity and facilitate the efficient
deployment of capital in our economy by estimating probabilities of possible adverse outcomes.
and pooling risk across a large group. Since September 11 the uncertainty surrounding terrorism
risk has disrupted the ability of insurance companies to estimate, price, and insure the risk.
We learned on September 11 that, while perhaps highly improbable, terrorists are capable
of enormous destruction. Could such an event be repeated? As a country and a government, we
are doing everything in our power to prevent a repetition of anything like the events of
September 11. But how does an insurance company assess this uncertainty? How does an
insurance company price for it? At the moment, there are no models, no meaningful experience,
no reasonable upper bound on what an individual company's risk exposure may be.
Insurance companies do not "take" risks. They knowingly accept and mutualize risks.
They are private, for-profit enterprises. If they do not believe they can make money by
underwriting a particular risk, they will not cover it. Because insurance companies do not know
the upper bound of terrorism risk exposure, they will protect themselves by charging enormous
premiums, dramatically curtailing coverage, or - as we have already seen with terrorism risk
exclusions - simply refusing to offer the coverage. Whatever avenue they choose, the result is
the same: increased premiums and/or increased risk exposure for businesses that will be passed
on to consumers in the form of higher product prices, transportation costs, energy costs and
reduced production.
The consequences of uncertainties surrounding terrorism risk are already evident in the
airline sector. The Department of Transportation's initial projection is that, as a result of the
September 11 attacks, airlines will pay nearly $1 billion in premium increases for terrorism risk
insurance in the next year despite a congressionally imposed cap on third-party liability. Within
the next few months, similar increases can be expected for other forms of economic activity
deemed "high risk" - if coverage is available at all. Higher premiums will divert capital away
from other forn1s of business investment.
The need for action is urgent. From our conversations with insurance company
representatives, state insurance regulators, policyholders, banks and other entities which provide
financing for property transactions, the next two months are critical. The insurance industry
relies on a complicated structure of risk sharing. Risk is shared among primary insurers,
reinsurers, and retrocessionairs (i.e., providing reinsurance to the reinsurers). This structure has
worked well in the past and greatly contributed to widely spreading losses associated with the
events of September 11 across the insurance industry.
However, in light of the uncertainty created by September 11, reinsurers have told us that
they will no longer cover acts of terrorism in their reinsurance contracts with primary insurers.
And as I have said, most property and casualty insurance contracts are up for renewal at yearend. This will create the following choices for insurers: assume all of the risk of terrorism
coverage and raise prices to cover all of the associated, unshared costs; redllce coverage levels;
or cancel coverage. Any of these choices has the potential to cause severe economic dislocations
in the near-tenn either through higher insurance costs or higher financing costs.
2. Objectives
In grappling with this problem, we have had several objectives.
First and foremost, we want to dampen the shock to the economy of dramatic cost
increases for insurance or curtailed coverage. We also want to limit federal intrusion into pri vate
economic activity as much as possible while still achieving the first objective. And we want to
rely on the existing state regulatory infrastructure as much as practicable.
Note that none of these objectives are directed at providing government assistance to the
insurance industry. The industry is absorbing the financial losses it contracted for as a result of
the September 11 attacks, and is fully capable of making good on those losses. The industry is
also capable of continuing to provide insurance for non-ten-orist hazards. The problem, as I have
said, is one of uncertainty about future terrorist risk. At the moment, there is no basis upon
which to price terrorism risk and no sense of the upper bound on the risk exposure.
3. Options
Over the past few weeks, a variety of proposals have emerged to deal with the problem I
have outlined. Before turning to the approach we have developed, I will briefly discuss a fev,: of
the alternatives we considered and some of the shortcomings we identified with each.
A case could be madc to treat terrorism risk insurance like war risk insurance. During
World War II, the federal government provided property owners with insurance protection
against loss from enemy attack. Similarly, the Israeli govenm1ent provides insurance for
terrorism risk. This approach would recognize the terrorist threat as one made against all
Americans and would establish the broadest possible risk pool for insuring against this risk. At
the same time, such an approach implies a pemlanent federal intrusion in the market so long as
any terrorism risk remains.
A second approach, one suggested in various fOnTIS by insurance industry representatives,
involves the creation of a reinsurance company to pool terrorism risk. This model follows an
approach developed in the United Kingdom in response to IRA terrorist activities. This
approach has some appeal, especially in providing a vehicle for pooling the industry's risk while
providing an upper bound on industry losses through a government backstop. With more time,
or in different circumstances, this approach may have been desirable.
In our judgement, however, it has several significant shortcomings. First, the approach
ultimately leads to the federal govemment setting premium rates by establishing the rate charged
to the pool for the government's backstop. If the basic problem is that the insurance industry whose business it is to measure and price risk - cannot currently price terrorism risk without
distorting markets, why would we think the govenunent can do a better job?
Establishing a pool would also take time, and time is very limited since most policies
expire at year-end. It is unclear how long it would take industry to capitalize the pool. In the
interim, the govemment's exposure could be substantial, insofar as it would be liable for 100
percent oflosses that exceeded the pool's capitalization. In addition, we question whether the
government could move quickly enough on its end to establish the contracts, the pricing
structure, and the regulatory structure needed to make the proposal work.
Finally, the pool approach creates a federal insurance regulatory apparatus with some
presumption of permanence, and a potentially enonnous pool of captive capital that we may
never need to use. We believe that there will be less uncertainty about terrorism risk a few years
from now and that uncertainty will be more manageable by the private sector than is the case
today. Given that, why undertake the effort to create a monopoly reinsurer and give a new
federal regulator the power to both set prices and regulate insurance companies and their
activities?
A third option would be to simply set a large industry deductible and let the federal
government cover all losses from acts of terrorism past that point. For instance, the federal
government could require the insurance industry to cover all losses up to, say, $40 billion in a
given year and the federal government would pay all losses above that amount.
This approach has two substantial drawbacks. First, it does not address the fundamental
problem: the industry has no basis for knowing - and hence pricing - terrorism risk. A large
deductible would require them to assess premiums large enough to cover a large potential loss.
In the absence of better infonnation, we might well expect companies to price insurance as if
they fully expected losses up to the deductible amount. Second, this approach makes it difficult
to control losses above the deductible as insurance companies would have no incentive to limit
costs once their deductible has been paid.
4. A Shared Loss Compensation Program
After reviewing these and other options, and discussing these issues with congressional
and industry leadership and the state insurance regulatory community, we developed an approach
that we believe best accomplishes the objectives I set forth. Let me say at the outset that this
approach reflects the current evolution of our thinking on this issue. We want to work with
Congress to achieve the best possible solution. As I have said, the insurance industry can easily
protect itself by eliminating coverage or charging very high premiums. What we are trying to do
is craft a plan that will prevent the economic dislocations that will otherwise take place if private
insurers follow the course they are now on. It is imperative that we find a solution that works in
the marketplace. We must get it right, and we must get it right now.
When terrorists target symbols of our nation's economic, political and military power,
they arc attacking the nation as a whole, not the symbol. This argues for spreading the cost
across all taxpayers. Yet there are also reasons to limit the federal role. If property owners do
not face any liability from potential attacks. they may under-invest in security measures and
backup facilities. In addition, the insurance industry has sufficient experience and capacity to
price some portion of the risk associated with terrorism and has the infrastructure necessary to
assess and process claims.
4
Under the approach we are suggesting, individuals, businesses, and other entities would
continue to obtain property and casualty insurance from insurance providers as they did before
September 11. The terms of the terrorism risk coverage would be unchanged and would be the
same as that for other risks.
Any loss claims resulting from a future ten"orist act would be submitted by the
policyholder to the insurance company. The insurance company would process the claims, and
then submit an invoice to the government for payment of its share.
The Treasury would establish a general process by which insurance companies submit
claims. The Treasury would also institute a process for reviewing and auditing claims and for
ensuring that the private/public loss sharing arrangement is apportioned among all insurance
companies in a consistent maImer. State insurance regulators would also play an important role
in monitoring the claims process and ensuring the overall integrity of the insurance system.
Through the end of 2002, the government would absorb 80 percent ofthe first $20 billion
of insured losses resulting from terrorism and 90 percent of insured losses above $20 billion.
Thus, the private sector would pay 20 percent of the first $20 billion in losses and 10 percent of
losses above that amount.
Under this approach the federal govenm1ent is absorbing a portion -- but only a portion -ofthe first dollar of losses, which we believe is important to do in the first year of the program.
The key problem faced by insurance companies right now is pricing for terrorism risk. While
this type of loss sharing approach does not completely alleviate that problem, it does provide
insurance companies with the ability to evaluate potential losses on a policy by policy basis, with
clearly defined maximum exposures. For example, on a $100 million commercial policy the
insurance company's maximum exposure would be $20 million. If industry losses were greater
than $20 billion that exposure would be reduced even further.
More importantly, price increases to policyholders should be lower under this approach
than under an approach that requires companies to absorb 100 percent of losses up to a large,
aggregate industry loss deductible. Under this approach, if an insurance company's maximum
exposure was defined at $20 million on a $100 million policy, the insurance company could then
price that $20 million exposure on the probability of a complete loss event occurring.
Suppose instead that the insurance industry had to absorb $20 billion in losses before any
government loss sharing began. Then, in our example, the insurance company's maximum loss
exposure would be $100 million on that policy, not $20 million. Pricing to this maximum loss
would create the economic dislocation we are trying to avoid.
The role of the federal govenU11ent would recede over time, with the expectation that the
private sector would further develop its capacity each year. As private sector capacity increases,
the nature of the government's loss sharing agreement would also change. Given more time and
experience, we believe that the insurance industry could reestablish robust risk-sharing
arrangements such as reinsurance that would enable the private sector to insure losses from
terrorism before the government loss sharing commenced.
5
Thus, in 2003, we would have the private sector be responsible for 100 percent of the first
$10 billion of insured losses, 50 percent of the insured losses between $10 and $20 billion, and
10 percent of the insured losses above $20 billion. The govenunent would be responsible for the
remainder.
In 2004, the private sector would be responsible for 100 percent of the first $20 billion of
insured losses, 50 percent of the insured losses between $20 and $40 billion, and] 0 percent of
the insured losses above $40 billion. The govenunent would be responsible for the remainder.
To preserve flexibility in an extraordinary attack, combined private/public liability for
losses under the program would be capped at $100 billion in any year. It would be left to
Congress to detennine payments above $100 billion.
The federal government's involvement would sunset after three years. It is our hope,
indeed our expectation, that the market problem we face today will have been corrected by then
so that the private sector will be able to effectively price and manage terrorism risk insurance
going forward. Of course, should that prove not to be the case, Congress and the President can
reevaluate the program in place and decide at that time on an extension of the program or
establishment of some other approach.
This approach would also provide certain legal procedures to manage and structure
litigation arising out of mass tort telTorism incidents. This includes consolidation of claims into
a single forum, a prohibition on punitive damages, and provisions to ensure that defendants pay
only for non-economic damages for which they are responsible. It is important to ensure that
any liability arising from terrorist attacks results from culpable behavior rather than overzealous
litigation. These procedures are important to mitigating losses arising from any future terrorist
attack on our nation, and are an absolutely essential component of the program T have outlined.
Finally, this approach requires a clear definition of an "act of terrorism." We suggest that
the Secretary of the Treasury, with the concurrence ofthe Attorney General, and in consultation
with other members of the Cabinet, be given authority to certify that a terrorist act had taken
place for purposes of activating the shared loss compensation arrangement.
We believe that this approach dampens any adverse economic impact from a sudden increase
in the cost from telTorism risk insurance over the next 12 months. The imposition of a deductib Ie
in the second year, and an increase in the deductible in the third year, pennits the federal
govenunent to gradually withdraw from the market as the private sector adapts to measuring and
pricing terrorism risk.
5. Conclusion
Mr. Chainnan, for the reasons I have set forth, the Administration believes that the
economy is facing a temporary, but critical, market problem in the provision of terroriSl11 risk
insurance. Keeping our economy moving must be our overriding concem. Leaving this problem
unresolved threatens our economic stability. The approach I have outlined limits the
6
government's direct involvement, retains all those elements of our private insurance system that
continue to operate well, and provides a transition period to allow the private sector to estahlish
market mechanisms to deal with this insidious new risk that confronts our nation.
There are no perfect solutions to this problem. We have developed what we believe is a
sound approach. As I explained earlier, we do not believe that creation of a reinsurance pool can
be accomplished under the time constraints we face, but we \vould be glad to explore
modifications to our approach with the Committee.
I would be pleased to answer any questions the Committee may have.
7
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FOR IMMEDIATE RELEASE
October 30, 200 I
MEDIA ADVISORY
Who
Prime Minister Adrian Nastase of Romania
Treasury Secretary Paul H. O'Neill
What
Photo Op only at the top ofthe meetings.
Pool cameras and photographers only
NoQ&A
\Vhen
Wednesday, October 31, 200 I, 4: 15 p.m.
Where
Third Floor Conference Room
Main Treasury
PO-744
- Forpress
-
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FOR IMMEDIATE RELEASE
OCTOBER 30, 2001
CONTACT: T ASIA SCOLINOS
(202) 622-2960
Under Secretary Jimmy Gumle to Discuss Outcome of FATF Meetings
WHAT:
Treasury Under Secretary for Enforcement Jimmy Gumle will make remarks
regarding the outcome of the special FATF plenary meetings underway October
29 th and 30th. Under Secretary Gurule will also answer questions from reporters
regarding this topic.
WHEN:
Wednesday, October 31 st, 2001
11:30 AM
WHERE:
Department of the Treasury
Diplomatic Room, yd Floor
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For Immediate Release
October 30, 2001
Contact:
Betsy Holahan
202-622-2960
Treasury Department To Hold Quarterly Refunding News Conference
Treasury Under Secretary for Domestic Finance Peter R. Fisher will announce the U.S.
government's quarterly refunding needs at a news conference at 9:00 a.m. EDT on Wednesday,
October 31, 2001 in the Treasury Department's Diplomatic Reception Room (Room 3311), 1500
Pennsylvania Avenue, N~T, Washington, DC.
Under Secretary Fisher will take questions following the announcement. The event will
have a 10:00 a.m. news embargo.
The room will be available for pre-set at 8:00 a.m. on Wednesday. Media without
Treasury or White House press credentials planning to attend should contact Frances Anderson
at Treasury's Office of Public Affairs at (202) 622-2960 by 8:00 a.m. on Wednesday with the
following information: name, social security number and date of birth. This infomlation may
also be faxed to (202) 622-1999.
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CONTACT:
FOR IMMEDIATE RELEASE
OCTOBER 31, 2001
BETSY HOLAHAN
202-622-2960
Air Transportation Stabilization Board Launches Web Site
WASHINGTON, DC - The Air Transportation Stabilization Board (ATSB), created by
Congress to issue federal credit instruments (loan guarantees) to air carriers today launched a
web site to make information available to air carriers, their lenders and the public. The purpose
of these loan guarantees is to assist air carriers that suffered losses as a result of the September
11,2001 terrorist attacks, and to whom credit is not otherwise reasonably available. in order to
facilitate a safe, efficient, and viable commercial aviation system in the United States.
The site, found at www.treas.gov/atsb, offers information about the ATSB, including its
members, the Office of Management and Budget regulations under which it must operate, and
the ATSB guarantee application form. The web site also gives position descriptions for three
executive staff members who will have the responsibility for managing the operations of the
ATSB, and infomlation about how interested individuals can apply for these positions.
The web site will continue to be updated in the upcoming weeks.
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- - - - )
.
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
October 30, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
28-Day Bill
November 01, 2001
November 29, 2001
912795HM6
Term:
Issue Date:
Maturity Date:
CUSIP Number:
2.140%
High Rate:
Investment Rate 1/:
2.168%
Price:
99.834
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 32.92%.
All tenders at lower rates were accepted ln full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
28,428,700
16,909
$
11,983,200
16,909
o
o
28,445,609
12,000,109
996,211
996,211
Federal Reserve
TOTAL
$
29,441,820
$
12,996,320
Median rate
2.130%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
2.100%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
28,445,609 / 12,000,109
=
2.37
1/ Equivalent coupon- issue yield.
PO-748
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FOR Il\fMEDIATE RELEASE
Contact: Betsy Holahan
October 31, 2001
(202) 622-2960
UNDER SECRETARY OF THE TREASURY FOR DOMESTIC FINANCE
PETER R. FISHER
REMARKS AT THE NOVEMBER 2001 QUARTERLY REFUNDING
As a consequence of the further weakening of the economy and the increased
federal outlays that have occurred since the attacks of September 11 th, the near-term
financing requirements of the federal government are larger than we anticipated just three
months ago at our last quarterly refunding in August. In this setting, the management of
the Treasury's marketable debt needs to anticipate the possibility of a unified budget
deficit for this fiscal year and, perhaps, the following fiscal year as well. However, even
if this happens, we expect that the federal government will return to surpluses in the
commg years.
\Vith this outlook in mind, today we are announcing:
•
The terms of the November refunding, including a new 5-year note in the amount
of $16 billion and a reopening of the 5 percent 1O-year note issued in August
2001 in the amount of $7 billion; and that
•
We are adjusting the debt buyback program as follows:
•
We will continue to conduct buybacks for the remainder of this calendar year;
•
We will make no buybacks in January 2002; and
•
Beginning in February 2002, we will announce at our quarterly refundings the
amount and timing of any buyback operations for the subsequent three-month
period; and finally that
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•
We are suspending issuance of the 30-year bond: there will be no auction of30year securities in February 2002 and we plan no further auctions of either 30-year
nominal or inflation-adjusted bonds.
Recent Changes in the Fiscal Outlook
Debt issuance over the past several years has been structured in an environment of
large budget surpluses. However, the fiscal environment has changed substantially over
the past few months due to the slowdown in economic activity and to the federal
government's prompt response to the attacks of September 11 tho The Treasury's debt
management has adjusted already, and will continue to adjust, as we accommodate the
federal government's increased financing needs during this period. But our expectation
is that these heightened financing requirements will prove short-lived, as the economy
eventually strengthens, and as the pressures for increased federal outlays stemming from
the attacks of September 11 th subside.
Suspension of Thirty-Year Borrowing
The debt management strategy of the Treasury has been to strive to be regular and
predictable in the issuance of debt while minimizing borrowing costs over many years
and interest rate cycles. The Treasury does not try to outsmart the market at anyone
moment or to be a "market timer" with respect to any particular shape of the yield curve.
However, debt management necessarily involves judgments about the size and duration
ofthc federal government's borrowing needs. This compels us to focus on likely
borrowing needs over the coming years but we also take into account the likely
consequences of unlikely outcomes.
We do not need the 30-year bond to meet the government's current financing
needs, nor those that we expect to face in coming years. Looking beyond the next few
years, as I already observed, we believe that the likely outcome is that the federal
government's fiscal position will improve after the temporary setback that we are now
expenencmg.
There are two less likely outcomes that we have also considered.
First, it is possible that the federal government will return to significant and
sustained budget surpluses even more quickly than we now expect. In this event,
maintaining current issuance levels of 30-year bonds would be unnecessary and
expensive to taxpayers.
Second, we face the possibility that sustained surpluses do not materialize as
promptly as we now expect. Iflater in this decade it turns out that 30-year borrowing is
necessary to meet the government's financing needs, it is still likely that our decision to
suspend 30-year borrowing at this time will have saved the taxpayers money. In addition,
the reintroduction of the 30-year bond, at some point in the future, ifnecessary, would
likely be costless to the Treasury.
The 30-year bond no longer maintains a position of significance in the financial
markets. Its role and its liquidity have been significantly impaired by the substantial
reduction of issuance that has occurred over the last decade. But the markets have
functioned smoothly during this period while both activity and attention have shifted to
our 10-year offerings.
As long as we have borrowing requirements to finance, the Treasury will seek to
maintain the liquidity and depth of the instruments we issue as a means of achieving the
lowest cost of borrowing for the taxpayer over time. At this time, the best means for us
to do this is to suspend issuance of the 30-year bond and concentrate our borrowing needs
on our other instruments.
Adjustment of the buyback program
In response to the altered budget outlook for this fiscal year, we are also making
adjustments in our buyback program. Beginning in February 2002, our decisions on
whether to conduct buyback operations, and on the amount and timing of any purchases,
will be made at the time of our regular quarterly refunding announcements and will be
based upon three factors:
•
first, our projections of the federal government's annual, unified surplus or
deficit position;
•
second, our projections of that three-month period's cash position; and,
•
third, our analysis of how best to minimize borrowing costs over time.
In making the transition to these new procedures, our buyback operations for the
remainder of this calendar year will continue in line with our prior announcements. In
August we stated that we would be purchasing approximately $9 billion during the fourth
calendar quarter. So far we have purchased $2.5 billion and the remaining $6.5 billion
will be purchased in November and December. Due to the holidays in November and
December, however, the timing of our specific announcements will be altered from recent
practice. We will make announcements of the specific amounts and maturities of our
purchases on November 14 and 28 and on December 12 and 19 for operations to take
place on the following day.
We will make no buyback purchases in January 2002. Beginning with our
February 2002 quarterly refunding, we will include the details of any buyback operations
to be conducted in the subsequent three months in our regular refunding announcements.
In light of the information that we now have, market participants should
understand that there are likely to be periods in which we do not conduct buyback
operations and that there are likely to be other periods in which we do conduct such
operations, consistent with the ebb and flow of our cyclical cash position. But the
presence or absence of these operations will be clearly announced, in advance, as part of
our refunding process.
Terms of the November Refunding
I will now turn to the tenns of the November Refunding. We are offering
$23 billion of notes to refund approximately $2l.6 billion of privately held notes and
bonds maturing on November 15, raising approximately $1.4 billion. The securities are:
1. A new 5-year note in the amount of$16 billion, maturing November 15,2006.
2. A re-opening of the 5% 1O-year note issued in August 2001 and previously
reopened in October 2001, maturing August 15,2011, in the amount of
$7 billion.
These securities will be auctioned on a yield basis at 1:00 p.m. eastern time on
Tuesday, November 6, and Wednesday, November 7, respectively. The balance of our
financing requirements will be met through 2-year note and bill offerings.
As announced on Monday, we estimate that we will have a $35 billion cash
balance on December 31 and a $30 billion cash balance on March 31.
Our next quarterly refunding announcement will take place on Wednesday,
January 31, 2002.
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EMBARGOED UNTIL 11 :30 A.M. EST
October 31,2001
Contact: Tasia Scolinos
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Treasury Under Secretary Jimmy Gurule Applauds International Cooperation
Displayed at FATF Plenary on Combating Terrorist Financing
Late yesterday the Financial Action Task Force (FATF) completed an
Extraordinary Plenary on Combating Terrorist Financing. As many of you know this was
a highly unusual event -- made even more remarkable by the location of these meetings
here in Washington a little over one month after the horrific attacks of September 11 th.
The United States Department of Treasury is grateful to the FATF member countries for
their quick response to the terrorist attacks. Under the able leadership of FA TF President
Clarie Lo, they have done more than just espouse empty rhetoric. They have taken
decisive action. After the terrible attacks of September 11 th the 29 member countries
mobilized quickly to meet here in Washington this week to strategize on a set of
international standards designed to combat terrorist financing, a fancy term for money
that kills. These new standards are much more than just complicated regulations filled
with technical jargon. F ATF efforts to shut down the financial base of these terrorist
organizations cannot be underestimated. When we shut down the money flow we shut
down the terrorist's ability to commit future acts orviolence and destruction. Let me be
clear - I believe the work done this week by F ATF is a proactive step in the war on
terrorism that could potentially save thousands of lives. And this is just the beginning.
FATF has proven extremely effective in convincing other nations to comply with its antimoney laundering guidelines and they will bring the same commitment and vigor to the
new, expanded role they will play in the ongoing fight to disrupt and dismantle the
financial infrastructure of terrorist groups worldwide.
As many of you know, President Bush has spoken publicly about the importance
of international cooperation in the global war on terrorism. The actions taken this week
are indicati ve 0 f that kind of cooperation as they represent another link in the global
chain designed to choke off the cash flow to ten-orist organizations and to keep these evi1
criminals out of the international banking system. We are grateful for the passion and
dedication shown by our FA TF partners in combating the face1ess enemies who now
threaten freedom-loving people everywhere.
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) 6
I want to talk for a moment about some of the highlights of the plenary session
that the Treasury Departmcnt feels will be particularly beneficial in the fight against
terrorist financing. Let me begin by pointing out that the F ATF adopted 8 Special
Recommendations which specifically target the ability of terrorists to generate income for
their organizations thus isolating the terrorists financially. These recommendations will
represent the new international standard in the fight against terrorist financing. They
include reaffirmation of the responsibility of countries to ratify the U.N. Convention of
the Suppression of Terrorist Financing and to implement relevant SecUlity Council
resolutions. They also chart new territory by requiring countries to crack down on
alternative remittance systems such as hawala, strengthen customer identification
measures for wire transfers, and ensure that charities are not misused to finance terrorists.
In addition, the F ATF also endorsed an Action Plan that will immediately begin to bring
member nations and the entire world community into compliance with these new
measures. The Action Plan calls for member nations to come into full compliance with
the Special Recommendations by June 2002. It is important to note that FA TF has invited
countries throughout the world to participate in this process on the same terms of FA TF
members, emphasizing the importance of uni versal cooperation on this vital matter.
Finally, beginning in June 2002, FA TF will initiate a process to identify jurisdictions that
lack appropriate measures to combat terrorist financing and to take appropriate steps with
respect to these countries. The FATF has successfully utilized similar procedures in the
past against countries that support money-laundering schemes. We are optimistic that
these tools will also prove effective in this new fight against telTorist financing. The
Treasury Department also app lauds the FA TF' s commitment to issue guidance to
countries and financial institutions on preventing future terrorist financing in their
jurisdictions. We believe this to be an important element in a strategic, proactive
approach to fighting terrorism on a global scale.
In conclusion, I want to reiterate that dismantling the terrorist's financial
underpinnings will be a complex and time consuming task. We cannot do it alone. The
actions taken this week by the FATF are indicative of the kind of cooperation and
international teamwork necessary to shutdown those who perpetrate acts of terror against
us and other law abiding nations.
I would be happy to answer a few questions at this time.
ornCE OF PUBUCAFFAIRS -1500 PENNSYLVANIAAVENVE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622·2960
Contact: Tony Fratto
(202) 622-2960
FOR IMMEDIATE RELEASE
October 31,2001
MEDIA ADVISORY
Treasury Under Secretary for International Affairs, John B. Taylor will offer remarks at
the Fifth Annual Russian Investment Symposium at 8:30 p.m. on Friday, November 2,2001 at
the Sheraton Hotel and Towers, Boston, MA.
This event will be open to the press with additional details made available soon. For
further information, please contact Tony Fratto, Office of Public Affairs at (202) 622-2960.
-30PO-7S1
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
'U S Governmenl Pllnllng OffIce 1998 - 6 I 9-559
D EPA R T l\I E N T
0 F
THE
T REA SUR Y
NEWS
1REASURY
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASillNGTON, D.C. - 20220 - (202) 622-2960
FOR IMJ\tlEDIATE RELEASE
October 31, 2001
Contact: Office of Public Affairs
(202) 622-2960
Statement from the Office of Public Affairs
Regarding the Quarterly Refunding Announcement
Following Treasury's Quarterly Refunding press conference this morning, it came
to our attention that the content of the mmouncement was made public prior to the
10:00AM embargo.
The announcement was inadvertently posted on the Treasury web site at
approximately 9:50AM. Treasury regrets that this occurred and will work to ensure the
integrity of the announcement process.
-30-
PO-7S2
F()r press releases, speeches, public schedules rand official biographies, call our 24-}wur fax line at (202) 622-2()4()
·u.s. Government
Prlntrng Clilce 1998 - 619·559
@FedFRASER