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Treas.
HJ
10
.A13
P4
v.389
Department of the Treasury
PRESS RELEASES
DEPARTl\'1ENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C.. 20220. (202) 622-2960
EMBARGOED UNTIL 2: 30 P.M.
November 1, 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 $31,000
million to refund an estimated $23,419 million of publicly held 13-week and 26-week
Treasury bills maturing November 8, 2001, and to raise new cash of approximately
$7,581 million. Also maturing is an estimated $6,000 million of publicly held 4-week
Treasury bills, the disposition of which will be announced November 5, 2001.
The Federal Reserve System holds $11,448 million of the Treasury bills maturing
on November 8, 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 November 6, 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
Ycrrk will .,pe 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 $1,128 million into the 13-week bill and $974 million into the 26week 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%.
A bidder for the 13-week bill may subtract the NLP exclusion amount published in
the attached highlights from the amount of its holdings of the outstanding bill.
If
the published NLP exclusion amount is greater than its holdings, the holdings may be
calculated as zero but cannot be included in the net long position calculation as a
negative number.
The exclusion is optional, but if a bidder takes the exclusion, i t
must include any holdings in excess of the exclusion amount in calculating its net
long position.
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-7S3
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HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED NOVEMBER ,8, 2001
;
\
November 1, 2001
Offering Anlount . . . . . . . . . . . . . . . . . . . . . . . . $16,000 million
Public Offering . . . . . . . . . . . . . . . . . . . . . . . . $16,000 million
NLP Exclusion Amount . . . . . . . . . . . . . . . . . . . $ 6,800 million
Description of Offering:
Term and type of security . . . . . . . . . . . . . . 91-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . . 912795 JF 9
Auction date .... .
November 5, 2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . November 8, 2001
Maturity date . . . . . . . . . . . . . . . . .
February 7, 2002
Original issue date .. . ....... .
August 9, 2001
Currently outstanding . . . . . . . . . . . . . . .
$19,546 million
Minimum bid amount and multiples
$1,000
$15,000 million
$15,000 million
None
182-day bill
912795 JT 9
November 5, 2001
November 8, 2001
May 9, 2002
November 8, 2001
$1,000
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FIMA) bids:
Noncompetitive bids submitted through the
Federal Reserve Banks as agents for FIMA accounts.
Accepted in order of size from smallest to largest
with no more than $200 million awarded per account.
The total noncompetitive amount awarded to Federal
Reserve Banks as agents for 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 (NLP) 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
~eceipt of Tenders:
Noncompetitive tenders ... Prior to 12:00 noon eastern standard time on auction day
Competitive tenders ...... Prior to 1:00 p.m. eastern standard time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full
par amount with tender.
TreasuryDirect customers can use the Pay Direct feature which authorizes a charge
to their account of record at their financial institution on issue date.
I
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
For Immediate Release
November 1, 2001
Contact: Betsy Holahan
202-622-2960
Secretary O'Neill Applauds Bipartisan Senate Action on Terrorism Risk Insurance
Secretary PaulO 'Neill made the following statement on the terrorism risk insurance
proposal announced today by Senators Sarbanes, Gramm, Dodd and Enzi:
I applaud Senators Sarbanes, Gramm, Dodd and Enzi on reaching agreement this
afternoon to establish a temporary, limited federal program for terrorism risk insurance coverage.
This bill addresses a real and critical need to assure the continued availability and affordability of
terrorism risk insurance. Acting now is crucial to help ensure financing of business and
economic development can continue uninterrupted.
This bill is an excellent example of bipartisanship. I commend the sponsors for their
prompt action in developing this balanced package. I look forward to working with them and
others in securing enactment of terrorism risk insurance legislation within the next several
weeks.
--30--
PO-7S4
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S Govemment Pnntlng Office 1998· 619·559
I
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
November 2,2001
Contact: Tony Fratto
(202) 622-2960
The United States and Japan Launch New Financial Talks
The U.S. Department of the Treasury and the Japanese Ministry of Finance and Financial
Services Agency, as co-chairs, today launched a new series of bilateral financial and
macroeconomic talks pursuant to the u.s.-Japan Financial Dialogue, which is a key component
of the u.s.-Japan Economic Partnership for Growth announced June 30,2001 by President
George W. Bush and Prime Minister Junichiro Koizumi. Officials from U.S. financial regulatory
agencies also participated.
The Working Croup on Financial Services, which met for the first time, discussed financial
issues of concern to both countries, including recent policy developments with respect to
financial restructuring, financial supervisory and regulatory policy issues, and market access
issues. U.S. and Japanese representatives also exchanged views on recent developments in their
respective financial markets and outlined their macroeconomic policy responses to slowing
global growth following the September 11 attack.
The US side described the implications of the economic slowdown on the financial sectors in the
United States. The US government stressed the importance of continued careful monitoring by
the regulatory and supervisory authorities. The Japanese side stressed that banking sector reform
is a critical part of the Government's economic program. They described their measures to
resolve bad debt problems in the banking sector, including their plans to encourage banks to
adjust their provisioning in response to market signals regarding major borrowers, and to
strengthen and expand the role of the Resolution and Collection Corporation (RCC). The U.S.
side welcomed the Government of Japan's strong commitment to implement measures to address
weaknesses in bank and corporate balance sheets. They stressed the importance of proper
classification and provisioning in providing incentives for banks to reduce their bad loan
holdings. The U.S. side noted the measures to strengthen the RCC, and recalled from their own
Savings and Loan experience the importance of an independent body, focused solely on
minimizing taxpayer cost, that drew heavily upon private sector expertise to achieve a prompt
return of assets to the market.
PO-755
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·U.S Govemment Pnnt,ng Office 1998· 619·559
Each side discussed recent changes in financial policy and raised a number of market access
concems. The U.S. side welcomed Japan's actions to introduce defined contribution pension
plans and facilitate foreign investment in Japanese Govemment Bonds through global
custodians, and noted their importance. Both sides agreed to continue and deepen these
discussions in the Economic Partnership. The United States welcomed the implementation of
Japan's no-action letter system, and looked forward to its continued development.
The participants discussed the macroeconomic situation in their two countries, and policy
measures taken in response to the economic dislocations arising from the September 11 attacks.
The U.S. side described the Administration's initial fiscal response, which included $45 billion in
disaster aid, security enhancements, and help with rebuilding. The Japanese outlined their recent
fiscal situation and fiscal policy developments, including tax aspects. The U.S. side noted the
importance of appropriate fiscal measures in encouraging economic restructuring.
The intensive discussions in the Working Group support the u.s.-Japan Financial Dialogue.
Chaired by Treasury Undersecretary John Taylor and Ministry of Finance Vice Minister for
Intemational Affairs Haruhiko Kuroda, the Financial Dialogue serves as a high-level forum for
the Department of the Treasury and the Ministry of Finance and the Financial Services Agency.
The Working Group meeting was chaired by Mr. Tadashi Iwashita, Senior Deputy Director
General, Intemational Bureau, Ministry of Finance, Mr. Y oshio Okubo, Deputy Commissioner,
Financial Services Agency, and Mr. Mark Sobel, Acting Assistant Secretary for Intemational
Affairs, Department of the Treasury.
-30-
FOR IMMEDIATE RELEASE
November 2, 2001
CONTACT: TONY FRATTO
(202) 622-2960
Statement of the G-7 Finance Ministers
President de la Rua and Minister Cavallo announced last night a package
intended to improve their country's economy. It is important for
Argentina to return to an economically sustainable path.
The announcement includes Argentina's plan to reduce the cost of their
debt. We are pleased that Argentina is taking the initiative.
-30PO-7S6
DEPARTMENT
OF
THE
TREASURY
-
,
NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlflNGTON, D.C. - 20220 - (202) 622-2960
Contact: Rob Nichols
(202) 622-2910
FOR IMMEDIATE RELEASE
November 2,2001
TREASURY STATEMENT REGARDING
FOREIGN TERRORIST ORGANIZATION LISTING
Today the Secretary of State, in consultation with the Secretary of the Treasury and the
Attorney General, has exercised his authority under the new terrorist financing Executive Order
(E.O. l3224) to designate an additional 22 foreign terrorist organizations as specially designated
global terrorists. A number of these organizations were previously designated by the Treasury
Department as terrorist groups under the 1995 Middle East Executive order.
Designation of these groups under the new Executive Order provides the Treasury
Department with enhanced authority to make derivative designations and block assets.
Listing these organizations under the September 24th terrorist financing Executive Order
underscores the Administration's objective to disrupt the financial base of terrorists.
Treasury will aggressively investigate the supporters and associates of these foreign
terrorist organizations with the intent of listing and blocking the assets of these supporters of
terrorism. A listing of these organizations is available at the following web address:
http://www.treasury.gov/ofac/bulletin.txt
-30-
PO-757
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·U.S Govemment Pnntlng Office 1998· 619·559
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
CONTACTS Rob Nichols, Tara Bradshaw
(202) 622-2960
FOR IMMEDIATE RELEASE
November 5, 2001
DEPUTY TREASURY SECRETARY DAM TO ARGUE FSC APPEAL AT WTO
Today the Treasury Department announced that Deputy Treasury Secretary Kenneth W
Dam will make the opening argument for the United States in the "Tax Treatment for 'Foreign
Sales Corporations'" appeal to the World Trade Organization. Dam will make the opening
arguments in Geneva, Switzerland on November 26,2001.
After Dam presents the opening arguments, the remainder of the appeal will be argued by
Kent Jones, Assistant to the U.S. Solicitor General.
The selection of Dam and Jones to argue the appeal is significant. Dam is the secondhighest official in the U.S. Treasury Department. He sends an important signal of the
seriousness with which the Administration takes the case. The involvement of the Solicitor
General's office signals how unified the Administration is in its arguments.
United States Trade Representative Robert B. Zoellick praises Dam as being the "perfect
choice" to argue the appeal for the United States. Before serving as Deputy Secretary of the
Treasury, Dam served as Deputy Secretary of State under President Reagan and Executive
Director of the Council on Economic Policy in the Nixon Administration. Said Zoellick, Dam
"has the background in international economics to argue this appeal." In addition, Dam has
published books and articles on international trade and taxation including, a book on the General
Agreement on Tariffs and Trade and a book on the Federal Tax Treatment of Foreign Income.
-30PO-758
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S Govemment Pnntlng Office 1998· 619·559
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.
November 5, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $16,000 million to
refund an estimated $6,000 million of publicly held 4-week Treasury bills maturing
November 8, 2001, and to raise new cash of approximately $10,000 million.
NOTE: The closing times for receipt of noncompetitive and competitive tenders
will be at 11:00 a.m. and 11:30 a.m. eastern time, respectively.
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 $11,448 million of the Treasury bills maturing
on November 8, 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
bi!l 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%.
A bidder for the bill may subtract the NLP exclusion amount published in the
attached highlights from the amount of its holdings of the outstanding bill. If the
published NLP exclusion amount is greater than its holdings, the holdings may be
calculated as zero but cannot be included in the net long position calculation as a
negative number.
The exclusion is optional, but if a bidder takes the exclusion, it
must include any holdings in excess of the exclusion amount in calculating its net long
position.
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
Attacrunent
PO-7S9
For press releases, speeches, public schedules and official biographies. call our 24-hOllr fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED NOVEMBER 8, 2001
November 5, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . $16,000 million
public Offering . . . . . . . . . . . . . . . . . . . . $16,000 million
NLP Exclusion Amount ............... $11,900 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 GU 9
November 6, 2001
November 8, 2001
December 6, 2001
June 7, 2001
$34,132 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 (NLP) 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 11:00 a.m. eastern standard time on auction day
Competitive tenders:
Prior to 11: 30 a.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
FOR IMMEDIATE RELEASE
November 05, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
91-Day Bill
November 08, 2001
February 07, 2002
912795JF9
High Rate:
1.975%
Investment Rate 1/:
2.012%
Price:
99.501
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted
1.06%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Accepted
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
24,998,979
1,499,669
245,000
$
16,000,008 2/
26,743,648
SUBTOTAL
TOTAL
5,108,417
5,108,417
Federal Reserve
$
31,852,065
14,255,339
1,499,669
245,000
$
21,108,425
Median rate
1.935%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.910%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
26,743,648 / 16,000,008
=
1.67
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,227,293,000
http://www.publicdebt.treas.gov
PO-760
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
November 05, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182 -Day Bill
November 08, 2001
May 09, 2002
912795JT9
Term:
Issue Date:
Maturity Date:
CUSIP Number:
1.920%
High Rate:
Investment Rate 1/:
Price:
1.966%
99.029
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted
5.10%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FIMA (noncompetitive)
$
26,602,000
1,203,574
180,000
$
5,366,639
5,366,639
Federal Reserve
$
33,352,213
13,616,475
1,203,574
180,000
15,000,049 2/
27,985,574
SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
$
20,366,688
Median rate
1.875%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.830%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 27,985,574 / 15,000,049 = 1.87
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,023,816,000
http://www.publicdebt.treas.gov
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THE
T REA SUR Y
NEWS
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
For Immediate Release
November 6,2001
Contact: Tara Bradshaw
(202) 622-2960
TREASURY RELEASES DATA ON THE
CORPORATE ALTERNATIVE MINIMUM TAX
Today the Treasury Department released information (attached) on the corporate
alternative minimum tax (AMT) that shows more than 30,000 companies paid higher taxes due
to the AMT in 1998-a year in which the economy grew at a rate exceeding 4 percent. In a
weaker economy like today's, the number of firm impacted by the corporate AMT would have
been even greater. The 1998 information is the latest data available.
"The corporate AMT can be pro-cyclical. It can be triggered simply by a reduction in a
company's sales and profits. It tends to increase a company's tax burden during an economic
downturn, which may result in deeper and prolonged economic weakness by reducing business
activity. Company's that are thrown into the AMT may be reluctant to hire new workers, or less
able to retain as many of their current workers," stated Mark Weinberger, Treasury Assistant
Secretary for Tax Policy. "Repeal of the AMT is one means of helping stimulate the economy,
and it is one of the President's four priorities for the economic stimulus package."
The attached fact sheet explains the corporate AMT and types of companies affected. The
AMT is a pre-payment of tax that is offset when and if the company returns to a sufficient level
of profitability. Highlights include:
•
The AMT increased the tax liability of 30,226 companies in 1998.
_
Over one-quarter of all corporate assets were held by companies paying higher taxes
due to the AMT.
-
The 30,226 companies facing increased tax liabilities are spread over all industries,
from agriculture to the service sector.
•
The AMT particularly burdens the manufacturing sector of the economy, which
employs over 17 million workers:
'r Within manufacturing, more than 5,500 companies paid higher taxes due to the
AMT.
T
Over one-half of all manufacturing assets were held by companies paying higher
taxes under the AlVIT.
PO-762
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·U.S Govemment Pnnt,ng Office 1998· 619·559
Companies move in and out of AMT based on their profitability and spending pattems. Over
time, a greater percentage of companies are affected by the AMT than in any single year. Using
a continuous sample of tax retums of larger companies (over $50 million in assets) over the
1993-1998 period, nearly one-half of companies paid higher taxes due to the AMT in at least one
year. Companies paying higher taxes due to the AMT in at least one year during this period
account for about 70 percent of corporate assets in the sample.
Attachment
-30-
Corporate Alternative Minimum Tax Data
The corporate alternative minimum tax (AMT) is an alternative tax base to the regular tax
system. When investments and other expenses are large relative to a company's taxable income,
as occurs during economic downturns, the company may owe alternative minimum tax.
Corporate AMT payments represent a pre-payment of tax that the taxpayer will get back when
and if it returns to a sufficient level of profitability.
1998 Tax Payments
In 1998 (the latest year for which corporate tax return data are available), corporate alternative
minimum tax (AMT) payments were $3.3 billion. Total corporate income tax liability in 1998
net of credits was $181.5 billion.
Companies Affected by the AMT in 1998
AMT rules increased the tax liability of 30,226 companies in 1998. The AMT increases tax
liability in two ways: first, companies pay the corporate AMT when their tax liability calculated
under the AMT rules is higher than when calculated under the regular rules of the tax system.
Second, AMT rules prevent companies from using most business tax credits, such as the research
and experimentation credit, the work opportunity tax credit, and the welfare-to-work tax credit,
to offset AMT or to reduce regular tax below tentative minimum tax liability. Of the 30,226
companies with increased tax liability in 1998, 18,352 companies paid AMT and an additional
11,874 companies had their use of tax credits limited by AMT rules. These 30,226 companies
account for 26.9 percent of all corporate assets in 1998.
The 30,226 corporations paying increased taxes under the AMT are spread among all industry
sectors, from agriculture to the service sector. Within manufacturing, 5,596 corporations paid
higher taxes due to the AMT. These corporations accounted for just over half of all corporate
manufacturing assets. The following table shows for each industry the number of companies
paying increased taxes under the AMT and the percent of assets within that industry held by
these companies.
AMT Affected Companies by Industry,
Industry
AMT
Affected
Companies
Agriculture, Forestry, Fishing and Hunting
584
Mining
456
Utilities
391
Construction
4,533
Manufacturing
5,596
Wholesale and Retail Trade
4,301
Transportation and Warehousing
1,929
lnfonnation
579
Finance, Insurance, Real Estate & Management
of Companies
6,223
Services and Other
5,635
Total
1998
Percent of In dust}),
Assets held by Ai\,tT
Affected Companies
10
47
30,226
32
14
51
25
37
28
18
22
27
Source: Statistics of Income Corporate Tax Return File, 1998. AMT affected companies are
defined as those making positive AMT payments or those firms with increased tax liability
because AMT rules restrict the ability to use tax credits permitted Hnder the regular tax.
Panel Data of Corporate Tax Returns, 1993-1998
A continuous sample of corporate tax returns was created to follow the tax status of companies
over the 1993-1998 period. The sample consists of 9,021 companies with tax return information
available for each year and having assets exceeding $50 million in 1993. These firms account
for 60 percent of AMT payments in 1998 and 62 percent of total corporate income taxes in 1998.
Between 1993 and 1998, 49.2 percent of the firms in this sample paid higher taxes due to the
AMT in at least one year, either through direct AMT payments or through limits in the use of tax
credits due to the AMT rules. Firms affected by the AMT accounted for 70.7 percent of all
corporate assets.
Recent Changes in Law
Two recent changes to the corporate AMT were made by the Taxpayer Relief Act of 1997.
For taxable years beginning after December 31, 1997, a corporation with average gross receipts
of less than $7.5 million for the prior three taxable years is exempt from the AMI. (The $7.5
million threshold is reduced to $5 million for the corporation's first three-taxable year period.)
For property placed in service after December 31, 1998, the AMT recovery period for computing
the depreciation adjustment is the same as for regular tax purposes. The AMT recovery method,
however, is not conformed. Property eligible for the 200-percent declining balance method
under the regular tax must continue to be recovered lIsing the slower ISO-percent declining
balance method under the AMI. (Property recovered under the 150 percent declining balance
method or the straight-line method for regular tax purposes is recovered using the same method
under the AMT.) Property placed in service on or before December 3 I, 1998 is generally
recovered over longer periods under the AMT than for regular tax purposes in addition to being
subject to the slower recovery method.
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR RELEASE AT 3:00 PM
November 6,2001
Contact: Peter Hollenbach
(202) 691-3502
PUBLIC DEBT ANNOUNCES ACTIVITY FOR
SECURITIES IN THE STRIPS PROGRAM FOR OCTOBER 2001
The Bureau of the Public Debt announced activity for the month of October 2001, of securities within the
Separate Trading of Registered Interest and Plincipal of Securities program (STRIPS).
Dollar Amounts in Thousands
Principal Outstanding
(Eligible Securities)
$2,068,235,650
Held in Unstripped Form
$1,897,623,489
Held in Stripped FOIm
$170,612,161
Reconstituted in October
$16,974,242
The accompanying table gives a breakdown of STRIPS activity by individual loan description. The balances in
this table are subject to audit and subsequent revision. These monthly figures are included in Table V of the
Monthly Statement of The Public Debt, entitled "Holdings of Treasury Securities in Stripped Form."
The Strips Table along with the new Monthly Statement of The Public Debt is available on Public Debt's
Internet site at: www.publicdebttrea·-·.gov.Awide range of information about the public debt and Treasury
secUlities is also available at the site.
000
PO-763
www.publicdebLtreas.goy
T ABLE V - HOLDINGS OF TREASURY SECURITIES IN STRIPPED FORM, OCTOBER 31,2001 - Continued
Treasury Notes:
Series'
euslP
D
912827 025
2C5
0
R
2El
e
2G6
5X6
R
2L5
0
6A5
S
E
2P6
6B3
T
2S0
F
6Cl
U
F49
A
2Wl
G
6E7
V
H
2Y7
W
6F4
3C4
K
6HO
X
G55
B
3G5
L
Y
6K3
3J9
M
6Ll
Z
3L4
N
303
P
AC
6P2
0
3S9
600
AD
3V2
C
6S6
L
J78
A
3Z3
0
6Ul
M
4B5
E
6V9
N
4Dl
F
6W7
P
4H2
G
Q
6Y3
4K5
H
6Z0
R
7A4
S
L83
8
·jU9
J
iCO
T
708
U
7E6
V
4U3
K
N81
A
5A6
E
P89
B
5F5
F
e
088
5MO
G
R87
0
5S7
H
S86
A
T85
B
609
E
U83
C
V82
D
F
6N7
W81
A
B
X80
61<5
E
Y55
C
Z62
0
2JO
B
2U5
C
3EO
D
8
3X8
4F6
C
0
4\11
5G3
8
C
5N8
5Z1
B
C
6J6
614
B
782
C
Grand Tolo.L ....
Interest Rate:
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
6-1/2
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
4-114
5-3/4
4
5-1/2
4-1/4
5-3/8
3-7/8
3-7/8
5-3/4
5-1/4
3-5/8
2-3/4
2-3/4
4-1/4
5-7/8
4-3/4
7-1/4
5-1/4
7-1/4
6
7-7/8
5-7/8
7-1/2
6-112
6-3/4
6-1/2
5-7/8
5-3/4
5-5/8
6-7/8
4-5/8
7
6-1/2
6-1/4
6-5/8
..
Tolal Treasury Notes
.......
.-..
Maturity Date
Total
Outstandinq
912820 BeO
EG8
EJ2
FK8
EL7
FL6
EN3
FM4
EP8
FN2
E06
BD8
FP7
ES2
F05
ETO
FR3
EU7
BE6
FSI
FU6
CC9
FV4
CE5
CH8
FY8
Cf<1
FZ5
CN5
GB7
BF3
CS4
GD3
CU9
GEl
CW5
GF8
0A2
GH4
oC8
GJO
GK7
BGI
OE4
GM3
GNI
GP6
DJ3
BH9
007
BJ5
DU8
BK2
DZ7
BLO
EE3
BM8
8N6
ER4
BPI
809
FXO
BR?
BS5
GG6
BT3
BUO
8\'/6
8/~
6-i/8
G:-,,--,
5-1/2
5-5/8
4-3/4
5-1i2
6
6-1/2
5-3/4
5
5
COB
Cil
m<o
DV6
EAl
EI\15
FT9
GC5
GL5
..
....
Amount Outstanding in Thousands
Corpus
STRIP
CUSIP
Loan Description
.......
...........
..... §
11/15/01
11130/01
12131/01
01131/02
01131/02
02128/02
02128/02
03131/02
03131/02
04130/02
04130/02
05115/02
05131/02
05131/02
06130/02
06130/02
07/31/02
07/31/02
08115/02
08131/02
08131/02
09/30/02
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
03131/03
04130/03
04/30/03
05/31103
05131/03
06130/03
06130103
07131/03
08115/03
08115/03
08131/03
09130/03
10131/03
11115/03
02115/04
02115/04
05115/04
05115104
08115/04
08/15/04
11115/04
11115/04
02115/05
05/15105
05115/05
08115/05
11115/05
11115/05
02115/06
05115/06
05115/06
07/15!06
10115 /06
02/15/07
05115:07
08/15/07
02:15/08
05115/08
11/15;08
05/15/09
08/15/09
02115/10
08115/10
02115/11
08/15/11
Portion Held in
Unstripped Form
Portion Held in
Stripped Form
5,440,640
4,800
86,400
55,008
4,800
0
40,000
22,400
38,400
0
0
4,332,260
0
22,400
0
5,200
0
1,600
4,408,589
0
0
43,200
0
76,000
300,000
67,840
386,240
0
Recor.stituted
This Month
24,226,102
33,504,627
31,166,321
13,453,346
19,381,251
13,799,902
16,563,375
14,301,310
17,237,943
14,474,673
17,390,900
11,714,397
13,503,890
14,871,823
13,058,694
14,320,609
12,231,057
15,057,900
23,859,015
12,731,742
15,072,214
12,806,814
15,144,335
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
13,126,7'79
14,671,070
16,003,270
28,011,028
19,852,263
18,665,038
22,675,447
25,148,566
18,625,785
12,955,077
17,823,228
14,440,372
18,925,383
13,346,467
18,089,806
14,373,760
32,658,145
13,834,754
14,739,504
28,562,370
15,002,580
15,209,920
28,062,797
15,513,587
16,015,475
27,797,852
22,740,446
22,459,675
13,103,678
13,953,186
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
18,045,705
18,785,462
33,499,827
31,079,921
13,398,338
19,376,451
13,799,902
16,523,375
14,278,910
17,199,543
14,474,673
17,390,900
7,382,137
13,503,890
14,849,423
13,058,694
14,315,409
12,231,057
15,056,300
19,450,426
12,731,742
15,072,214
12,763,614
15,144,335
26,517,892
11,820,580
14,990,688
11,666,193
14,822,027
13,100,640
15,427,004
22,377,835
13,626,354
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
25,773,188
19,680,263
18,665,038
22,675,447
25,148,566
17,487,285
12,193,077
17,800,028
13,674,772
18,925,383
11,514,467
18,089,806
14,368,960
32,658,145
13,260,534
14,739,104
28,562,370
15,002,180
14,835,120
28,035,397
15,503,107
15,264,435
27,797,852
22,700,446
22,399,675
12,979,050
i 3,787,7; 1
25,163,803
13,571,412
27.124,321
25,035,125
14,770,490
27,26:,594
23,351,809
22,436,99423,430,609
13,045,705
28,400
0
27,200
0
0
2,237,840
172,000
0
0
0
1,138,500
762,000
23,200
765,600
0
1,832,000
0
4,800
0
574,220
400
0
400
374,800
27,400
5,480
751,040
0
40,000
60,000
12.1,628
170,475
468,000
12,000
66,640
48,000
24,300
134,300
3,900
600
5,720
0
1,419,571,415
1,393,096,539
26,4 -; 4,875
734,728
2,068,235,650
1,897,623,489
170,612,161
1 S.9-;~.2-+2
a
25,600
1,184,856
44,000
0
800
0
0
0
58,200
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
138,800
0
0
0
0
0
0
0
0
0
0
0
61,808
0
0
0
0
0
0
0
0
0
0
0
1,600
0
0
0
0
17,600
173,000
800
134,400
0
5,200
0
4,800
0
11,600
0
0
0
40,840
0
0
56,800
0
0
a
P,080
i,SOQ
9,600
800
0
3,200
0
0
0
0
0
0
T ABLE V - HOLDINGS OF TREASURY SECURITIES IN STRIPPED FORM OCTOBER 31 2001
Amount Outstanding in Thousands
Corpus
Loan Description
Treasury Bonds:
CUSIP:
912810 DM7
DQ8
DR6
DU9
DN5
DPO
DS4
DT2
DV7
DW5
DX3
DYI
DZ8
EA2
EBO
EC8
ED6
EE4
EFI
EG9
EH7
EJ3
Ef(O
EL8
EM6
EN4
Er9
EO?
ES3
Interest Rale:
11-5/8
12
10-3/4
9-3/8
11-3/4
11-1/4
10-5/8
9-7/8
9-1/4
7-1/4
7-1/2
8-3/4
8-7/8
9-1/8
9
8-7/8
8-1/8
8-1/2
8-3/4
8-3/4
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
6-118
6-1/4
5-3/8
ETI
EV6
EW4
EY2
EYO
EZ7
FAI
FB9
FE3
FFO
FG8
FJ2
FIv15
FP8
Tolal Treasury Bonds ...
Total
Outstanding
912803 AS9
AD5
AG8
AJ2
912800 AA7
912803 AAl
AC7
AE3
AFO
AH6
AK9
AL7
AM5
AN3
AP8
A06
AR4
AS2
ATO
AU7
AV5
AW3
AXI
AY9
AZ6
BAD
BB8
BC6
BD4
BE2
BF9
BG7
BH5
BJI
BK8
BL6
BM4
BP7
8V4
CW2
CG6
CH4
CK7
11/15/04
05/15/05
08/15/05
02115/06
11/15/14
02/15/15
08/15/15
11115/15
02115/16
05115/16
11115/16
05115/17
08115/17
05115/18
11115/18
02115/19
08115/19
02115/20
05115/20
08115/20
02115/21
05115/21
08115/21
11/15/21
08115/22
11115/22
02115/23
08115/23
11115124
02115/25
08115/25
02115/26
08115/26
11115/26
02115/27
08115/27
11115/27
08115/28
11115/28
02115129
08/15!29
05115/30
02115/31
.............
. ....
Treasury Intlalion-tndexed Notes:
CUSIP
Series:
Inlerest Rate:
9128273AB
3-5/8
J
2,\;t3
3-3/8
A
3T7
3-5/8
A
4Y5
3-7/8
A
SW8
4-114
A
6R8
3-1/2
A
Total Inflation-Indexed Notes .. ........... ...
. . . . . . . . ..
..
9128208Z9
BV8
CL9
DN4
EK9
GA9
07/15/02
01115/07
01115/08
01115/09
01115/10
01115/11
........
Treasury Intlation-Indexed Bonds:
CUSIP
Interesl Rate:
912810 FD5
3-5/8
FH6
3-7/8
FQ6
3-3/8
Totallntlation-Indexed Bonds
Maturity Date
STRIP
CUSIP
........
912803 BN2
CF8
CL5
04/15/28
04115/29
04115/32
Portion Held in
Unstripped Form
Portion Held in
Stri[lped Form
Reconstituted
This Month
8,301,806
4,260,758
9,269,713
4,755,916
5,398,584
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
10,129,170
11,410,207
12,837,916
9,286,418
10,890,177
9,898,971
9,602,756
22,046,339
11,776,201
10,947,052
11,350,341
11,178,580
17,043,162
16,427,648
4,821,806
1,872,808
5,549,813
4,528,620
1,873,084
7,206,350
3,217,983
3,251,889
5,237,546
18,652,268
17,515,910
9,415,864
8,759,777
2,993,239
3,720,270
9,098,098
18,367,065
7,571,620
3,029,023
8,934,486
9,293,573
5,923,843
8,452,147
14,668,097
9,293,691
4,111,631
10,049,461
19,357,516
3,633,642
3,511,369
6,993,190
11,168,716
6,281,618
5,193,477
6,733,771
7,091,556
11,409,139
11,021,001
10,404,052
10,993,741
10,643,780
16,679,258
16,299,648
3,480,000
2,387,950
3,719,900
227,296
3,525,500
3,601,949
845,933
2,389,970
410,208
171,283
1,308,538
6,228,305
2,936,581
4,079,200
3,894,200
4,646,400
648,867
2,209,648
5,028,160
8,789,820
924,000
4,294,945
1,615,335
16,029,097
944,099
3,634,995
6,152,600
3,301,528
6,070,520
6,617,801
4,417,017
1,669,200
3,004,800
5,696,700
3,165,200
2,511,200
10,637,200
755,200
543,000
351,600
534,800
363,904
128,000
274,400
136,000
8,000
0
406,500
410,960
134,960
74,480
216,800
143,800
293,892
1,991,440
622,800
318,400
892,200
1,354,400
428,160
291,600
300,360
632,000
206,400
440,680
57,200
2,193,888
218,600
316,800
233,600
175,632
661,920
431,600
290,960
218,200
343,400
331,600
88,000
230,400
377,800
112,450
154,200
225,000
0
32
0
508,772,885
364,880,436
143,892,449
16,239,514
18,638,676
17,654,128
18,470,850
17,211,482
11,943,729
11,219,407
18,638,676
17,654,128
18,360,980
17,211,482
11,943,729
11,219,407
0
0
109,870
0
0
0
0
0
0
0
0
0
95,138,271
95,028,401
109,870
0
18,446,296
21,294,547
5,012,235
18,446,296
21,159,531
5,012,235
0
134,966
0
0
0
0
44,753,078
44,618,112
134,966
0
I
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
November 06, 2001
U.S. International Reserve Position
The Treasury Department today released US. reserve assets data for the week ending November 2,2001. As indicated in
this table, US. reserve assets totaled $70,256 million as of November 2,2001, up from $69,645 million as of October 26,
2001.
(in US millions)
TOTAL
1. Foreign Currency Reserves
a. Securities
oTwhich,
I
1
November 2l 2001
70,256
October 26 l 2001
69,645
I. Official U.S. Reserve Assets
Euro
5,486
Yen
11,204
issuer headquartered in the U.S.
TOTAL
Euro
16,690
0
5,573
13,341
9,315
Yen
TOTAL
11,325
16,898
0
b. Total deposits with:
b.i. Other central banks and B/S
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 Stock
3
5. Other Reserve Assets
2
9,189
4,152
4,197
13,512
0
0
0
0
0
0
0
0
17,817
17,962
10,752
10,839
11,045
11,045
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 rales. Foreign currency holdings listed as securities reflect marked-Io-market values, and
deposits reflect carrying values.
2/ The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data proVided by the IMF and are valued in
dollar terms at the official SDR/dollar exchange rate for the reporting date. The IMF data for October 26 are final. The entries in the table
above for November 2 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury 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 September 30.2001. The August 31,2001 value
was 511,044 million.
'0-764
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·U.S Govemment Pnntlng Office 1998· 619·559
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
October 26, 2001
1. Foreign currency loans and securities
November 2, 2001
o
o
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a.-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
October 26, 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.c. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a.-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long pOSitions
4.b.1. Bought calls
4.b.2. Written puts
November 2, 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
November 06, 2001
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
28-Day Bill
November 08, 2001
December 06, 2001
912795GU9
Term:
Issue Date:
Maturity Date:
CUSIP Number:
2.140%
High Rate:
Investment Rate 1/:
Price:
2.168%
99.834
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 23.70%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FIMA (noncompetitive)
$
22,687,000
7,587
$
15,992,500
7,587
°
°
SUBTOTAL
Federal Reserve
TOTAL
Accepted
Tendered
Tender Type
$
22,694,587
16,000,087
972,650
972,650
23,667,237
$
16,972,737
Median rate
2.080%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
2.010%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 22,694,587 / 16,000,087 = 1.42
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
PO-765
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
November 06, 2001
Office of Financing
202-691-3550
CONTACT:
RESULTS OF TREASURY'S AUCTION OF 5-YEAR NOTES
Interest Rate:
Series:
CUSIP No:
Issue Date:
Dated Date:
Maturity Date:
3 1/2%
F-2006
9128277F3
High Yield:
Price:
3.617%
November 15, 2001
November 15, 2001
November 15, 2006
99.469
All noncompetitive and successful competitive bidders were awarded
securities at the high yield.
Tenders at the high yield were
allotted 93.14%. All tenders at lower yields were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
34,673,000
198,580
34,871,580
Federal Reserve
2,799,456
$
37,671,036
15,801,420
198,580
o
o
SUBTOTAL
TOTAL
$
16,000,000 1/
2,799,456
$
18,799,456
Median yield
3.580%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low yield
3.550%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
= 34,871,580 / 16,000,000 = 2.18
1/ Awards to TREASURY DIRECT = $116,461,000
http://www.publicdebt.treas.gov
PO-766
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Contact: Office of Public Affairs
(202) 622-2960
FOR IMlYIEDIATE RELEASE
November 6, 2001
O'NEILL STATEMENT ON SENATE FINANCE COlVIlVllTTEE CHAIRlVIAN'S MARK
Treasury Secretary Paul O'Neill made the following statement on Senate Finance Committee
Chaim1an Max Baucus' draft mark of the Economic Recovery and Assistance for American
Workers Act of2001:
"The President has repeatedly stated his desire for Congress to work in a bipartisan fashion to
pass an economic stimulus bill. The President spelled out the component parts of a stimulus
package that is in the best interest of American consumers, employers and the overall US
economy. The plan unveiled by Senator BaUCllS doesn't meet that test. I'll continue to work with
Senators to achieve a better product.
"The interest of the American people and the American economy are not partisan. Chaim1an
Baucus' mark falls short of meeting the real interest ofthe American people."
-30PO-767
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Contact: Tasia Scolinos
(202) 622-2960
November 7, 2001
MEDIA ADVISORY
Secretarv Paul O'Neill to Hold Press Briefing on Terrorist Financing
>
What:
Treasury Secretary Paul O'Neill will provide an update on the progress the
Treasury Department is making on the war against terrorist financing and
answer questions about new Treasury developments.
When:
Wednesday, November 7,2001
3:00 p.m.
Where:
U.S. Treasury Department
Diplomatic Room: 3311
Media without Treasury or White House press credentials planning to attend
should contact Treasury's Office of Public Affairs at 202- 622-2960, by 1 :00
p.m. today, with the following information: name, social security number
and date of birth. This information may be also be faxed to 202-622-1999
PO-768
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I
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omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 1:30 P.M.
November 7,2001
Contact: Tasia Scolinos
(202) 622-2960
STATElVIENT BY SECRETARY PAUL O'NEILL
AT FIN CEN
Mr. President, Secretary Powell, Attorney General Ashcroft, I'm pleased you are
here at one of the key nerve centers in the campaign against global terrorism, the Foreign
Terrorist Asset Tracking Center.
It is here, that we marshal the combined assets of law enforcement, intelligence
and public data bases to identify, track and disrupt the flow of money to terrorists.
This ongoing task requires patience and sophisticated means, because the
financial supporters of terror hide in offshore havens of secrecy; disguise their true
identities; and masquerade as legitimate businesses while directing their profits to
underwrite enterprises of hate and violence.
They also know that we are watching. And, for that reason, they try to funnel
their money through undocumented, unregulated financial networks constructed to bypass the civilized world's detection. But their system is imperfect. Somewhere it must
always interface with modem banking and finance.
When that connection is made, we have the wherewithal to intervene. And
thanks to the cooperation of allies and coalition partners cemented by the good work of
Secretary Powell, we have begun to act - to block assets, to seize books, records and
evidence, and to follow audit trails to track terrorist cells poised to do violence to our
common interests.
With the President's leadership, the Departments of Justice, State and Treasury
have eliminated barriers that have hampered past efforts. This new joint effort has borne
fruit. In the United States we have blocked $24 million in assets of the Taliban and al
Qaeda. We have an additional 962 accounts under review. We have built an
international coalition to deny ten"orists access to the world financial system. 112 nations
have blocking orders in force, and nations around the world have blocked at least S..J.3
million in assets.
The announcement the President just made is a signiticant milestone in this eff0\1.
We will not be finished until we have dismantled the financial network of terrorism.
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·U.S Govemmen' Pnn',ng Office 1998· 619·559
DEPARTl\1ENT
OF
THE
TREASURY
NEWS
ornCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASmNGTON, D.C .• 20220 • (202) 622-2960
FOR IMMEDIATE RELEASE
November 7, 2001
CONTACT: PUBLIC AFFAIRS
(202) 622-2960
STATEMENT BY TREASURY SECRETARY PAUL O'NEILL
The President signed the Executive Order on Terrorist Financing on September 23. His
instruction to the Treasury Department was straight-forward: chair a committee of all agencies
with potential infonnation about terrorist financing; then take that shared intelligence and make
it actionable. That is something new in Washington and I am here to tell you that it is working.
This morning, agents from the Treasury's Office of Foreign Asset Control, the Customs
Service, and the IRS shut down 8 al Barakaat offices in the United States, and took possession
of evidence that will be investigated for further leads in the terrorist money trail. In addition, we
used authority in the newly-enacted anti-terrorism legislation to block assets and seize evidence
at two al Barakaat outlets in Virginia. Millions of dollars have moved through these US offices
of al Barakaat. This organization is now exposed for what it is - a pariah in the civilized world.
US businesses and individuals are now forewarned, and prohibited from doing business with this
company.
Since the issuance of the Executive Order, the United States and our coalition partners
have issued blocking order on the assets and trade of 88 individuals and organizations who
support terrorism. Today we add sixty-two (62) names to that list. But more important than the
number is the character of today's designees.
Al Taqwa and al-Barakaat are financiers of terror. The President's September 23 Order
made plain that those who underwrite violence bear equal culpability to those who perpetrate it.
Feigned indifference, willful blindness, and the appearance ofnonnalcy and status in the world
of business or commerce will no longer provide cover or safe harbor -here or abroad.
PO-770
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The al Taqwa group has long acted as financial advisers to al Qaeda, with offices in
Switzerland, Lichenstein, Italy and the Caribbean. The al Barakaat companies are the money
movers, the quartermasters of terror. At core, it is a hawala conglomerate operating in 40
countries around the world with business ventures in telecommunications, construction, and
currency exchange. They are a principal source of funding, intelligence and money transfers for
bin Laden.
And they operate office even here in the US. At least they did until today.
Our allies around the world are joining us in cutting al Barakaat and al Taqwa out of the
world financial system. Dubai, UAE is the home base of al Barakaat. Today the UAE blocked
the accounts of al Barakaat, paralyzing the nerve center of the operation.
And that is only one example of the nations around the world who have eagerly joined
this effort to separate terrorists from the world financial system. To date, 112 nations have
blocking orders in force on the names we'd previously added to this list. Together, the civilized
governments of the world have already blocked more than $43 million in terrorist assets.
This is a painstaking process. It requires cooperation on a global scale, and information
sharing the likes of which no one thought possible a few short months ago. The civilized nations
of the world are determined to end the threat of global terrorism. We will protect our citizens by
slowly and carefully dismantling the financial infrastructure of terrorism.
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FOR IMMEDIATE RELEASE
November 7, 2001
Contact: Tony Fratto
(202) 622-2960
Statement of John B. Taylor
Foreign Press Center
November 7, 2001
The first shot in the war on the financing of terrorism was shot on September 24th, when
President Bush listed 27 terrorist organizations and individuals and instructed U.S. financial
institutions to block their accounts. Many other countries around the world took parallel action.
Further shots were fired on October 12 and November 2 when an additional 61 entities were
listed.
Today's action is yet another shot. There are two principal organizations on the list
announced today: AI-Barakaat and AI-TaqwalNada Management Group, two significant terrorist
financing networks. AI Barakaat is a financial conglomerate headquartered in Dubai that
operates in 40 countries including the United States. The founder of the organization, Shaykh
Ahmed Nur limale, has close links with Usama bin Laden and has used Al Barakaat to facilitate
the financing and operations of Al Qaida and other terrorist organizations.
The Al TaqwalNada Group provides cash transfer mechanisms for Al Qaida.
Notwithstanding the significant steps announced today, the war on combating the
financing of terrorist is a daunting task and is not yet won. The financiers of terror use
pseudonyms and shell companies to disguise their true identities. They masquerade as legitimate
businesses while directing their profits to underwrite enterprise of hate and violence.
Our work in reaching out to our coalition partners in the war on terrorist financing is
showing tangible results. I am pleased to report that there has been an unprecedented level of
international cooperation. Today we can say that:
•
•
•
184 countries and jurisdictions have committed to join the effort to combat the
financing of terrorism.
112 countries now have blocking orders on terrorist assets in force, and
over $44 million has been frozen globally since September 11.
PO-771
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·U.S Govemment Pnntlng Office 1998· 619·559
In order to add to these numbers the United States 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. We are working closely with the United Nations Committee on Terrorist
Financing in this effort. This is a significant contribution to our overall effort.
The international community is moving forward on a number of other fronts to dry up
terrorist financing.
•
•
Last week, the Financial Action Task Force held an extraordinary plenary
meeting in Washington, in which the F ATF adopted new recommendations to
combat terrorist financing and agreed to an action plan to implement the
recommendations.
At the same time, the 58 national authorities that comprise the Egmont Group
of Financial Intelligence Units are enhancing the sharing of information in
order to cut off the flow of resources to terrorist organizations and their
associates.
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. Combating the financing of terrorism is an essential part of
the overall war on terrorism. We will win if we stay the course.
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EMBARGOED FOR 8:00 AM
November 8,2001
Contact: Betsy Holahan
(202) 622-2960
lVIORTAGE REFORM AND PREDATORY LENDING: ADDRESSING THE
CHALLENGES
TREASURY ASSISTANT SECRETARY SHEILA BAIR
REMARKS TO THE WOMEN IN HOUSING AND FINANCE FALL SYlVIPOSIUlVI
WILLARD INTER-CONTINENTAL HOTEL
Good morning and thank you for this opportunity to speak before you today about
mortgage refonn and predatory lending.
Innovations in mortgage finance have contributed to allowing many more Americans to
achieve the dream of home ownership. From 1990 through 2000, the overall home ownership
rate increased from 64.1 percent to 67.5 percent. The home ownership rate for minorities has
shown an even greater increase over that time period, with the home ownership rate among
African Americans increasing from 43.4 percent to 47.2 percent and the rate among Hispanics
increasing from 42.4 percent to 46.3 percent.
lImovations in mOligage finance have also improved the ability of borrowers with credit
problems to gain access to credit. As a percentage of all mortgage originations, the subprime
market share increased from less than 5 percent in 1994 to almost 13 percent in 1999. In
absolute tenns, the subprime market grew from $125 billion in 1997 to $140 billion in 2000.
The securitization of subprime loans has also grown dramatically, from $18.5 billion in 1995 to
nearly $56 billion in 2000. This increased liquidity has contributed to the growth of the
subprime market and to the increased rates of homeowners hip among low- and moderate-income
individuals.
PO-772
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The growth in home ownership, together with increasing home values, has provided
borrowers with an unprecedented amount of borrowing capacity. However, efforts to expand
access to mortgage financing to the full spectrum of American citizens have been marred by
abusing practices on the part of some lenders. Those American who lack experience and
sophistication in dealing with financial service providers have been most vulnerable to the socalled "predatory lender."
Predatory lending is difficult to define. Hearings chaired by your feature speaker,
Senator Sarbanes, last summer highlighted some of the more egregious cases. These hearings
also underscored, however, the importance of distinguishing predatory lending from legitimate
subprime lending ..
Subprime lending serves an important function in providing credit to borrowers with
impaired credit histories. Subprime lending has expanded credit availability to those low- and
moderate-income individuals with the ability to repay, but who suffer from poor credit histories.
Predatory lending simply preys on these people.
Contributing to the problem of predatory lending is the fact that the mortgage process is
too complicated. Anyone who has taken out a mortgage knows that the process is flawed. The
disclosures are complicated and difficult to comprehend quickly, even for people with legal or
financial backgrounds.
Borrowers who do not understand the tenns of their loans can be easily exploited. Some
of this can be addressed through more effective borrower education. But part of the problem is
also that the disclosures we are providing are complex and very difficult to understand.
Let me now briefly describe recent developments to address mortgage disclosure refonn
and predatory lending, and the Treasury Department's approach to these issues.
Mortgage Disclosure Reform
Effective disclosures are important because they provide borrowers with the ability to
compare costs across lenders. An effective disclosure scheme requires that borrowers are able to
clearly understand their mortgage's tenns and conditions and that the infom1ation be reliable. On
both counts our current disclosure scheme appears to be lacking.
Two acts - the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures
(RESPA) - seek to ensure that consumers obtain timely and standardized infonnation about the
cost of credit and the cost of real estate settlement services. The Federal disclosures under
RESPA and TILA comprise only 3-5 fonus out of a much larger number of documents that are
required by the lender or through state disclosure laws. Thus, it is very important given the large
number of required documents, that those required under Federal law provide bon'owers with
useful infonnation.
2
HUD issued a recent policy statement clarifying consumer rights under RESPA on three
important consumer issues: yield spread premiums, broker fee disclosure, and unearned broker
fees. In addition, the Federal Reserve is also in the process of improving disclosures under the
Home Ownership and Equity Protection Act (HOEPA) and the Home Mortgage Disclosure Act
(HMDA). HOEP A amends TILA to provide borrowers with enhanced protections for certain
high-cost home loans and HMDA requires mortgage lenders to collect, report, and disclose
information about mortgage lending. The Federal Reserve expects to promulgate final HOEPA
regulations by the end of the year.
These positive actions must be followed with more far-reaching reforms if the mortgage
process is to become truly consumer-friendly. Reaching a consensus among all of the interested
parties on reforming our current mortgage disclosure scheme has, unfortunately, proven to be
difficult.
Improving our disclosure regime is a key component in addressing the abusive lending
practices associated with predatory lending. If borrowers have timely, clear, and accurate cost
disclosures, they can provide a first line of defense against unscrupulous lenders. Both HUD and
the Federal Reserve are to be commended for moving in this direction.
Addressing Predatory Lending
While improved mortgage disclosure should help reduce the abusive lending practices
associated with predatory lending, it likely will not solve the problem entirely.
We must do more to educate borrowers so they are in a better position to protect
themselves. To better prepare consumers for this task, the Federal government should take a
leadership role in educational efforts. My office is working with others in the Administration
and with industry, education, and non-profit groups to enhance financial literacy. In addition, the
Community Development Financial Institutions Fund - also a part of my office - is increasingly
building financial literacy programs into its award-making process. Though not a panacea,
greater financial literacy among homebuyers should help reduce the incidence of abusive
lending. I know Dina Ellis, my Deputy Assistant Secretary for Consumer Policy, will be
discussing our financial literacy efforts in more detail with you this afternoon.
Second, increased enforcement efforts should be a top priority .. The Justice Department
and the Federal Trade Commission (FTC) have taken aggressive steps in recent years to crack
down on abusive lending. You will hear more about enforcement against deceptive and illegal
lending abuses from Joel Winston of the Federal Trade Commission (FTC) shortly. The FTC
has undertaken several high profile cases that could mean broad redress for many consumers.
The FTC also devotes resources to consumer education and the Commission goes on record with
its views on legislative and regulatory proposals in this field. The Commission, in other words,
is covering its bases for the American consumer.
Finally, and most importantly, the Federal govenm1ent should take a leadership role in
encouraging private sector efforts to eliminate abusive lending practices. One possible approach
is to encourage the development of a set of industry best practices for subprime lending.
3
Many key players in the prime and subprime mortgage industry have already announced
mortgage purchase guidelines .. Last spring, Fannie Mae issued guidance to its lenders
prohibiting steering to subprime loans, requiring that borrowers have a reasonable ability of
paying the loan, limiting points and fees to 5% of the loan amount, prohibiting single-premium
credit life, and limiting prepayment penalties. Similarly, Washington Mutual recently
announced its own best practices, which includes not selling single premium credit life
insurance; not originating HOEP A mortgages in excess of $20,000; and not offering subprime
loans with compulsory negative amortization, balloon payments, or non-default call provisions.
In addition, the Mortgage Bankers Association of America has endorsed best practices that
include not only statutory compliance and training, but also consumer education and counseling.
Individual firms have also developed guidelines
We applaud these very constructive efforts and believe that an industry set of best
practices makes appropriate use of market forces and still provides the Federal govemment with
an enforcement role. For my part, I would like to explore whether the Treasury Department can
playa leadership role in developing a set of national best practices for the subprime lending
community. For regulated depository institutions, such practices could be incorporated into bank
supervisory standards and enforced through the supervisory process. For lenders not subject to
federal bank regulation, the FTC would have enforcement authority. If for example, the lender
agreed to abide by a published set of industry best practices, but was later found not to have
followed those practices, the FTC could bring an enforcement action based on unfair and
deceptive practices.
The development of an industry set of best practices could help promote consistency and
uniformity among state and local predatory lending laws. By setting national standards for good
lending practices, a set of industry best practices might provide a good model for the efforts of
state and local leaders in this area.
A code of best practices could also help consumers navigate the complex mortgage
financing process by giving them some assurance that the lender with whom they are dealing
adheres to certain core standards for which there are federal enforcement mechanisms.
It is in the interest of industry and consumer groups to work together in developing a set
of industry best practices. In fact, many of the current subprime mortgage guidelines put in place
by mortgage companies were developed in conjunction with consumer groups. By working
together, I believe the Treasury Department, in partnership with lenders and consumer groups
could strike an appropriate balance in terms of assuring widespread access to credit while
protecting consumers from predatory practices. We must be aggressive and vigilant in our
efforts to crack down on abuses. On the other hand, unnecessary or unduly cumbersome
requirements on legitimate subprime lending will only cause mainstream lenders to withdraw
from providing credit to those who need it most and are otherwise creditworthy.
In exploring the feasibility of a federal govemment role in developing a code of best
practices for subprime lenders, I would greatly appreciate the thoughts and input of the members
4
of this well-respected organization. There is a tremendous amount of expertise in this room, and
I look forward to the opportunity to work with you in tackling this important issue.
In closing, let me to thank the Women in Housing and Finance for its efforts in
organizing this symposium.
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For Immediate Release
November 8, 2001
Contact: Michele Davis/Tara Bradshaw
(202) 622-2960
O'NEILL URGES SENATE TO ACT QUICKLY ON A BIPARTISAN
ECONOMIC STIMULUS BILL
Treasury Secretary PaulO 'Neill made the following statement on the econornic stimulus bill:
On September l7 the President talked about working with Congress to develop an
economic stimulus package. In at least 7 major speeches he has repeated this call for action, and
on Friday October 5th the President laid out his four principles for an economic stimulus package
that would stimulate demand, increase consumer confidence and stimulate business investment.
The President's four principles:
• accelerate marginal income tax rate cuts
• provide tax relief for low and moderate income workers
• provide enhanced expensing of capital expenditures
• eliminate the corporate alternative minimum tax
I immediately began meeting with bipartisan, bicameral leaders of the tax writing
committees. The Ways and Means Committee proceeded to mark up and pass a bill out of
committee on October lih. On Wednesday, October 24th, the House passed H.R. 3090, the
Economic Security and Recovery Act of200l~legislation which meets the President's
principles.
It is unfortunate that Senate Finance Committee Chairman Max Baucus has decided to
move a partisan product through his committee. The Baucus proposal is heavy on new spending
that will have little, if any, stimulative effect on the economy. Moreover, some of its provisions
would have an adverse effect on job creation.
This is where we are today with the economy:
•
Real GDP declined at a 0.4 percent annual rate in the third quarter -- the first decline since
the beginning of 1993 and the largest since a 2.0 percent drop in the first quarter of 1991,
when the economy was in recession.
•
The unemployment rate jumped from 4.9 percent in September to 5.4 percent in October,
the highest since December 1996, as the full effects of the terrorist attacks hit the labor
markets. (September results were collected too early in the month to have been affected.)
PO-773
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S Govemment Pnntlng Office 1998· 619·559
The October unemployment rate is 1.5 percentage points higher than a year earlier,
representing the addition of 2.2 million workers to the unemployment rolls during the past
year.
•
415,000 jobs were slashed from nonfarm payrolls in October, the biggest decline since 1980.
A total of nearly 900,000 jobs have been lost since a peak was reached last March.
•
Consumer confidence tumbled 11.5 points in October on top of a 17.0 point fall in
September to a 7-112 year low, according to the Conference Board. The Michigan consumer
sentiment index is at an 8 year low.
•
In response to their pessimistic mood and uncertainty about the future, consumers stayed
away from shopping centers and retail sales fell by 2.4 percent in September, the largest
one-month drop since 1987.
•
Business investment plunged at an 11.9 percent aru1Ual rate in the third quarter after having
fallen at a 14.6 percent pace in the second quarter.
The President has been clear in his call for quick action on an economic stimulus package to
restore confidence and create jobs. It's time to quickly move past this disappointment and get a
bipartisan stimulus bill the President can support.
-30-
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
Office of Financing
202-691-3550
CONTACT:
FOR IMMEDIATE RELEASE
November 07, 2001
RESULTS OF TREASURY'S AUCTION OF 9-3/4-YEAR 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:
4.220%
November 15, 2001
August 15, 2001
August 15, 2011
Price: 106.170
All noncompetitive and successful competitive bidders were awarded
securities at the high yield.
Tenders at the high yield were
allotted 83.52%. All tenders at lower yields were accepted in full.
Accrued interest of $ 12.50000 per $1,000 must be paid for the period
from August 15, 2001 to November 15, 2001.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FlMA (noncompetitive)
$
13,969,000
75,014
$
o
o
7,000,062 1/
14,044,014
SUBTOTAL
1,591,648
1,591,648
Federal Reserve
$
TOTAL
15,635,662
6,925,048
75,014
$
8,591,710
Median yield
4.188%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low yield
4.135%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
= 14,044,014 / 7,000,062 = 2.01
1/ Awards to TREASURY DIRECT
=
$57,648,000
http://www.publicdebt.treas.gov
)-774
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDlA TE RELEASE
November 1, 2001
Contact: Peter Hollenbach
(202) 691-3502
I BONDS TO EARN 4.40% "'HEN BOUGHT FROM NOVEMBER 2001 THROUGH APRIL 2002
I BOND EARNINGS RATE -4.40 %
The earnings rate for I Bonds is a combination of a fixed rate, which will apply for the life of the bond, and the inflation rate.
The 4.40 percent eamings rate for I Bonds bought from November 2001 through April 2002 will apply for the first six
months after their issue. The earnings rate combines the 2.00 percent fixed rate of return with the 2.38 percent annualized
rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-D). The CPI-U increased from
176.2 to 178.3 from March 2001 to September 2001, a six-month increase of 1.19 percent.
Treasury's inflation-indexed I Bonds are designed to offer all Americans a way to save that protects the purchasing power of
their investment by assuring tbem a real rate of return over and above inflation. I Bonds have features that make them
attractive to many investors. They are sold at face value in denominations of $50, $75, $100, $200, $500, $1,000, $5,000,
and $10,000 and earn interest for as long as 30 years. I Bond eamings are added every month and interest is compounded
semiannually. They are State and local income tax exempt, and Federal income tax on I Bond earnings can be deferred until
the bonds are cashed or they stop earning interest after 30 years. Investors cashing I Bonds before five years are subject to a
3-monih earnings penalty.
I BOND FIXED RATE 2.00%
Series I, inflation-indexed savings bonds purchased from November 2001 through April 2002 will earn a 2.00 percent
fixed rate of return over and above inflation. The 2.0 percent fixed rate applies for the 30-year life of I Bonds purchased
during this six-month period.
EARNINGS RATES FOR ALL I BONDS
Earnings rates and actual yields for I Bonds are shown in the I Bond Earnings Report on the back of this release.
MORE INFORMATION
Information about savings bonds is available at Public Debt's website at www.savingsbonds.gov. Check out our new
Savings Bond Calculator to see how easy it is to find out what your bonds are worth, what they're earning, and even keep
Tack of them. Or, download the free Savings Bond Wizard ™ to keep track of your savings bond portfolio. An Earnings
~eport, which contains rate and yield information for bonds is available by mail. Send a postcard asking for "Earnings
~eport" to Bureau of the Public Debt, 200 Third Street, Parkersburg, WV 26106-1328.
000
}-775
ww'.v. publicdeb t. treas.gov
VALUES AND YIELDS FOR $100 SERIES I BONDS
November 2001 Thru October 2002
Tilt:: tClble shows semiannual values for S100 Series I bonds.* Values for other denominations are proportional
tll the values showli. For example, the value of a $50 bond is one-half the amount shown and the value of a $500
h.1I1cl is five times the c:lrnount shovvil. The Current Earnings column shows the annual yield that the bonds will earn
cluril'~ the period indicated. The Earnir,gs Frorn Issue is the bond's yield from its issue date to the date shown or date
;1cJjustcd as shown ir, the footnotes.
Earnings to Date when held 5 years ***
Earning Period
Redemption Value .. ,
Current
Series I Bond
Start
End
Start
End
Earnings
Start
End
Date h
Earnings From Issue
Issue DCltes
Value
Date **
Value
Value
Value
4.40%
1121101 - V2002
11/1/2001
10220
51112002
100.00
4.40%
100.00
101.08
~)/200 1 - 'j(1/200 1
5.44%
105.76
11/1/2001
5.68%
51112002
102.96
101.48
104.36
11 l)OOO - 4/2001
5.78%
6.21%
109.60
11/1/2001
51112002
106.52
104.88
108.04
5/2000 - 10/2000
5.99%
11/1/2001
114.08
51112002
6.70%
110.76
108.96
112.40
'11/1999 - 4/2000
6.58%
5.81%
11/1/2001
117.56
51112002
114.24
112.44
115.88
5/1999 - 10/1999
11/1/2001
5.75%
6.24%
51112002
116.88
120.24
115.12
118.52
5.74%
11/1998 - 411999
11/1/2001
123.32
6.08%
51112002
118.04
119.88
121.60
5.79%
9/1998 - 10/1998
3/1/2002
126.56
5.98%
121.12
9/1/2002
123.00
124.76
,
Monthly Increases In value, applicable to sorne bonds, are not shown In the table.
'* Each "Start Date" and "End Date" is for the first date of the range in the "Issue Dates" colurnn.
Add one rnonth for each later issue rnonth. For exarnple, a bond issued in 1/2002
would be worth $100.00 on 1/1/2002 and $101.08 on 7/1/2002.
'*. A bond issued on or after May 1, 1997 is assessed a three-month interest penalty if
redeerned less U,an five years after its issue date. "Redernption Value" shows bond values
after penalty. "Earnings to date when held 5 years" shows the arnount upon which future
earnings will compound.
PUBLIC DEBT NE\lYS
Department of the Treasury • Bureau of the Public Debt • "Washington, DC 20239
FOR IMMEDIATE RELEASE
November 1, 2001
Contact: Peter Hollenbach
(202) 691-3502
BUREAU OF THE PUBLIC DEBT ANNOUNCES SERIES EE SA VINGS BOND RATE
FOR NOVEMBER 2001 THROUGH APRIL 2002
TJ1C Bmeau oftlle Public Debt annoullced today the rate for Series EE savings bonds issued on or after May 1, J 997.
SERIES EE SAVINGS BOND RATE - 4.07%
The 4.07 percent Series BE savings bond rate is in effect for bonds issued on or after May 1, 1997, that enter semiannual
earnings periods from November 2001 through April 2002. The rate is 90 percent of the average 5-year Treasury securities
yields for the preceding six months. A !lew interest rate is announced effective each May 1 and November J. A 3-month
interest penalty is applied to these bonds if redeemed before five years. The Series EE bonds OJ] sale now increase in value
monthly. The bonel's interest rate is compounded semiannually.
SEInES EE BONDS ISSUED BEFORE MA Y 1997
The 3.84 percent Long-Term Series EE savings bone! rate is in effect for bonds issued from May 1995 through April 1997 as
they enter semianJlual earnings periods from November 2001 through April 2002. See the table on the back of tllisrelease
for earnings on Series EE bonds issued from January 1980.
MATURED SERIES E SAVINGS BONDS AND SA VINGS NOTES
Series E s«(vings bonds continue to lcitch final maturity and stop eaming interest. 13onc1s issued from May 1941 tllrOllgh
October 1961 along with 1110se issued from December J 965 through October J 971, llave stopped carning intelcst. All
Savings N()~cs, issued from May J 967 through October 1970, have stopped earning interest. Series E Bonels with issue elates
ShOWll IlCl,: will reach final maturity in the next six months.
E-Honds Stop Earning Interest
E-Bond ISSlle Dates
November 1961 through April] 962
November 1971 through ApriJ 1972
November 2001 through April 2002
November 2001 through April 2002
MORE INFORMA TION
Information about savings bonds is available at Public Debt's website at www.savillgsbonds.gov. Check out our new
Savings Bond Calculator to sec how easy it is to finel out what your bonds are worth, what they're earning, and even keep
track of them. Or, download the free Savings Bond Wizard ™ to keep track of your savings bond portfolio. The table on the
back of this release shows actual yields for Series EE bonds. An Earnings Eepor!, which contains rate and yield information
for bonds is available by mail. Send a postcard asking for "Earnings Report" to Bureau of the Public Debt, 200 Third Street,
Darkcrsburg. WV 26106-1328.
000
0-776
www.publicdebt.treas.gov
VALUES AND YIELDS FOR $100 SERIES EE BONDS
November 2001 Thru October 2002
The t<lble shows semiilnnual values for $100 Series EE bonds: Values for other denominations are proportional
to the v<llucs shown. ror example, the value of a S50 bond is one-half the amount shown and the value of a $500
bond is flvc tlllles thc <lmOClnt shown. The Current Earnings column shows the annual yield that the bonds will earn
durillg the pcrio·d indlcatcd. The E<lrnings From Issue is the bond's yield from its issue date 10 the date shown or date
<ld)usted as shown in the footnotes.
Earnin~
Series [E Bond
Issue Dates
IW001 - -1UOO?
~'!lOOl . 10/;JOOl
1117000 - ~,I7(J(ll
~,:;'OOO - 10'lOOO
1 II 19lJ~1 . '1/2000
c,/19,ISi- 1011999
11/10001
- 10/1998
111112001
11/1997 - tl/1998
11/1/2001
Series EE Bond
Issue Dates
5/1997 - 10/1997
11/1996 -1\/1997
5!19% - 10/1990
11/1995 -1\/1996
51Hlg:, - 10/19%
1111994 - 1\/1995
5/1994 - 10/199tl
11/1993· 411991\
b/1993 - 10/1993
311993 - 1\/1993
11/1992·211993
:;/1092 - 10/1992
11/1991 -1\/1992
5/1091 - 10!i99i
11/1990 -1\/1991
Start
Date ..
1111/2001
11/1/2001
11/1/2001
11/112001
11/1/2001
11/1/2001
11/1/2001
11/WOOl
11/1/2001
3/1!20Q;!
11/112001
11/1/2001
11/112001
11/1/2001
11/1/2001
11/1/2001
11/1/2001
5.'1990 - 1011990
'il/HI(:9 -tl/1990
:,/1939 - 10/1939
11/1988 - '111989
~lfH~Sg
'lilt
5/1/2002
511/2002
511/2002
511/2002
51112002
51112002
51112002
511/2002
51112002
1i/l/200i
1\/1:199
~;11998
Date
1111/2001
11/117001
11/1/2001
11/1/2001
11/1/2001
11/1~198·
Period
End
Start
Date ..
111112001
11/112001
11/1/2001
1111/2001
11/1/2001
11/1/2001
11/1/2001
11/112001
11/1/2001
11/1/2001
11/1/2001
11/1/2001
11/1/2001
3/112002
11/1/2001
11/1/2001
11/1/2001
11/112001
11/1/2001
11/1/2001
1/1/2002
- 1U,I1988
11/198l - 411938
5/1987 - 10/1987
11/1986 - 411987
5/1986 - 1011986
1111985 - 4/1986
5/1985 - 10/1985
1111984 -1\/1985
511934 - 10/1984
1111983 - 411984
5/1933 - 10/1983
3/1983 - 4/1983
11/1982 - 211983
5/1982 - 10/1982
11/1981 - 411982
5/1931 - 10/1981
11/1980 - 4/1981
511980 - 10/1950
111930 - 4/1930
Earnings to Date when held 5 years ...
Redemption Value •••
End
Current
Start
Earnings
Start
End
Value
Earnings From Issue
Value
Value
Value
50.00
51.12
52.56
54.08
55.48
56.64
57.96
59AO
61.08
51.00
52.16
53.64
55.20
56.60
57.80
59.12
60.60
62.32
Earning Period
End
Stilrt
Date*'
Value
62.12
5/1/2002
51112002
62.40
51112002
63.88
511/2002
65.40
51112002
67.16
511/2002
71.16
51112002
72.80
511/2002
74.36
51112002
76.16
9/1/2002
78.08
511/2002
85.16
51112002
87.68
511/2002
90.32
51112002
93.0t)
51112002
95.8tl
51112002
98.68
51112002
101.61
c,IWOO?
103.6[,
511/2002
105.76
51112002
107.88
5/1/2002
110.01
511/2002
112.80
51112002
116.20
5/112002
129.88
511/2002
132.48
51112002
135.12
51112002
138.44
51112002
145.32
51112002
152.20
51112002
158.96
9/1/2002
167.68
51112002
177.84
51112002
193.84
51112002
197.72
511/2002
201.68
51112002
214.88
51112002
239.12
-1.00%
1\.07%
1\.11%
4.1<1%
11.0'1%
1\.10%
1\.00%
1\.01%
tl.06%
End
Value
64.12
63.60
65.12
66.64
68.44
72.56
74.24
75.80
77.60
79.60
87.68
9032
93.04
95.84
98.68
101.64
103.68
105.76
107.88
110.04
112.24
115.00
118.44
132A8
135.12
137.84
141.20
148.28
155.28
161.92
170.80
183.16
197.72
201.68
205.72
219.16
243.88
246.32
4.00%
4.27%
4.7<1%
5.01%
5.02%
4.89%
1\.84%
4.87%
<1.96%
Current
Earnings
6.44%
3.85%
3.88%
3.79%
3.81%
3.93%
3.96%
3.87%
3.78%
3.89%
5.92%
6.02%
6.02%
6.02%
5.93%
6.00%
4.01%
4.01%
4.01%
4.00%
4.00%
3.90%
3.86%
4.00%
3.99%
4.03%
3.99%
4.07%
4.05%
3.72%
3.72%
5.98%
4.00%
4.01%
4.01%
3.98%
3.98%
4.01%
50.00
50.56
51.96
53.<\8
54.8<1
56.00
57.32
58.72
60AO
Earnings
from
Issue
5.04%
4.42%
4"5%
4.47%
4.54%
5.03%
5.00%
4.96%
4.94%
4.96%
6.00%
6.00%
6.00%
6.00%
6.00%
6.00%
5.92%
5.85%
5.78%
5.71%
5.66%
5.63%
5.64%
6.18%
6.12%
6.05%
6.02%
6.13%
6.22%
6.28%
6.40%
6.77%
6.99%
6.92%
6.85%
6.99%
7.33%
7.21%
7/1/2002
241.48
, c
,.
, "
;"'0~.1on.hl) Invreao~~
1:1 \alUe, app""ab,e to ~ome
bonds, are not sho'.',n In tne table.
•• [iJeh '·Start D?te" and "Er,d Date" is for the first da'e of the range in the "Issue Dates" column.
Add one month fo. each later issue month. For example, a bond issued in 1/1988
\Vould be v.'orlh Sl ~O.O-: on 11112002 and $112.24 on 71112002 .
••• A hO;lO issuej o.~ 0: a';er May 1, 1997 is assessed a three-month interest penalty if
r",deemed less t13 r , f,:e years 2~er its issue date. "Redemption Value" shows bond values
after r::nCl::Y· '·Ear;-':"gs to date whEn heid 5 years'· shows the amount upon which future
.
~
earn;;lgs \'.'i\l
,~,
COrT',p::;~Jnd,
I
-
50.52
51.6-1
53.08
5<1.6<1
56.04
57.20
58.56
60.00
61.68
0
<D
I.C)
N
C\J
C\J
'federal financing
WASHINGTON, D.C. 20220
FEDERAL FINANCING BANK
S
October 31, 2001
Kerry Lanham, Secretary, Federal Financing Bank (FFB) ,
announced the following activity for the month of September 2001.
FFB holdings of obligations issued, sold or guaranteed by
other Federal agencies totaled $42.8 billion on September 30,
2001, posting an increase of $5,035.2 million from the level on
August 31, 2001.
This net change was the result of an increase
in holdings of agency debt of $5,971.1 million, and a decrease in
holdings of agency assets of $915.0 million and in holdings of
government-guaranteed loans of $20.9 million. The FFB made 61
disbursements and received 101 prepayments during the month of
September.
During the fiscal year 2001, the FFB holdings of obligations
issued, sold or guaranteed by other Federal agencies posted a net
decrease of $12.3 million from the level on September 30, 2000.
This net change was the result of an increase in holdings of
agency debt of $2,051.0 million and in holdings of governmentguaranteed loans of $134.0 million, and a decrease in holdings of
agency assets of $2,197.3 million.
Attached to this release are tables presenting FFB September
loan activity and FFB holdings as of September 30, 2001.
PO-777
0
en
C\J
<D
N
0
C\J
CJ)
CJ)
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Page 2
FEDERAL FINANCING BANK
SEPTEMBER 2001 ACTIVITY
Borrower
Amount
of Advance
Final
Maturity
Interest
Rate
$186,300,000.00
9/04
$240,000,000.00
9/07
$250,000,000.00
9/11
$200,000,000.00
9/11
$200,000,000.00
9/17
$100,000,000.00
9/18
$204,600,000.00
9/19
9/28 $1,000,000,000.00
$800,000,000.00
9/28
9/28 $3,400,000,000.00
$363,000,000.00
9/28
9/05/01
9/10/01
5/15/06
8/15/11
9/18/01
9/19/01
9/20/01
12/28/01
3/28/02
10/01/01
10/01/01
3.561%
3.395%
4.437%
4.925%
2.861%
2.768%
2.317%
2.501%
2.489%
2.501%
2.521%
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
9/10
9/10
9/12
9/18
9/19
9/24
9/24
9/24
$23,555.70
$16,125.61
$454,696.00
$506,386.34
$37,877.76
$30,848.03
$4,091.63
$61,617.97
10/01/26
1/30/02
7/31/25
11/02/26
1/30/02
10/01/26
10/01/26
1/30/02
5.358%
3.341%
5.380%
5.276%
2.649%
5.414%
5.414%
2.416%
S/A
S/A
S/A
S/A
S/A
S/A
S/A
S/A
9/10
9/10
9/13
9/18
9/21
$2,440,769.40
$2,293,478.14
$34,390.64
$91,598.53
$66,175.82
7/01/31
7/01/31
3/01/30
9/01/09
3/01/30
5.303%
5.303%
5.352%
4.010%
5.455%
S/A
S/A
S/A
S/A
S/A
9/04
9/04
9/04
9/05
9/06
9/06
9/07
9/10
9/12
9/12
$700,000.00
$1,739,000.00
$500,000.00
$500,000.00
$8,119,000.00
$7,570,000.00
$177,000.00
$350,000.00
$4,500,000.00
$80,000.00
12/31/31
4/01/02
1/03/34
1/02/35
12/31/24
1/03/34
12/31/30
1/03/34
12/31/31
12/31/15
5.401%
3.308%
5.289%
5.413%
5.426%
5.391%
5.294%
5.361%
5.308%
4.782%
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Date
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.
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
GOVERNMENT-GUARANTEED LOANS
GENERAL SERVICES ADMINISTRATION
Chamblee Office Building
Atlanta CDC Lab
Foley Square Office Bldg.
ICTC Building
Atlanta CDC Lab
Chamblee Office Building
Chamblee Office Building
Atlanta CDC Lab
DEPARTMENT OF EDUCATION
Bennett College
Bennett College
Barber-Scotia College
Tougaloo College
Barber-Scotia College
RURAL UTILITIES SERVICE
Canoochee Elec. #461
Greenbelt Elec. #743
Sangre De Cristo Elec. #732
Tri-State E.M.C. #730
East Kentucky Power #491
Horry Electric Coop. #536
Charles Mix Elec. #630
Belfalls Elec. #542
Appalachian Elec. #748
Citizens Tel (VA) #680
Page 3
FEDERAL FINANCING BANK
SEPTEMBER 2001 ACTIVITY
Borrower
S. Central Arkansas #605
Upsala Coop. Tele. #429
North Plains Elec. #785
Traverse Electric #768
Ozark Electric #629
Arrowhead Electric #773
Piedmont Tel. #566
Whetstone Valley #571
Central Iowa Power #442
Nueces Electric Coop. #774
P.K.M. Electric #770
Thumb Electric #767
Aiken Elec. #549
Georgia Trans. Corp. #559
Horry Electric Coop. #536
Midwest Electric #610
Oneida-Madison Elec. #582
Bartlett Elec. #535
Lake Region Elec. #737
Sawnee Electric #766
Great River Energy #739
Great River Energy #739
Great River Energy #739
Great River Energy #739
Great River Energy #739
Great River Energy #739
La plata Electric #649
S/A is a Semiannual rate.
Qtr. is a Quarterly rate.
Date
Amount
of Advance
Final
Maturity
Interest
Rate
9/12
9/12
9/13
9/13
9/14
9/18
9/18
9/18
9/20
9/20
9/20
9/20
9/21
9/21
9/21
9/21
9/21
9/25
9/25
9/25
9/28
9/28
9/28
9/28
9/28
9/28
9/28
$550,000.00
$90,049.00
$4,300,000.00
$1,500,000.00
$845,000.00
$400,000.00
$65,611.00
$400,000.00
$2,500,000.00
$2,800,000.00
$1,000,000.00
$900,000.00
$2,000,000.00
$11,353,539.00
$6,000,000.00
$1,478,000.00
$85,000.00
$500,000.00
$300,000.00
$19,401,000.00
$42,000,000.00
$42,000,000.00
$42,000,000.00
$42,000,000.00
$41,000,000.00
$40,000,000.00
$1,940,000.00
1/03/34
9/30/02
1/02/35
12/31/35
1/02/35
12/31/35
9/30/11
1/02/29
12/31/29
12/31/35
12/31/35
12/31/02
1/03/34
12/31/25
1/03/34
1/03/34
1/03/34
1/03/34
12/31/30
12/31/35
1/03/17
12/31/18
12/31/20
1/03/23
12/31/24
12/31/26
1/02/35
5.320%
3.427%
5.329%
5.334%
5.226%
5.264%
4.191%
5.165%
5.430%
5.252%
5.394%
2.569%
5.437%
5.268%
5.437%
5.437%
5.283%
5.450%
5.351%
5.416%
4.834%
4.948%
5.041%
5.066%
5.071%
5.073%
5.267%
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Page 4
FEDERAL FINANCING BANK HOLDINGS
(in millions of dollars)
Program
September 30, 2001
August 31, 2001
Monthly
Net Change
Fiscal Year
Net Change
9/1/01- 9/30/01
10/1/00- 9/30/01
Agency Debt:
U.S. Postal Service
National Credit Union Adm.-ClF
Subtotal *
$11,313.0
$0.0
$11,313.0
$5,341.9
$0.0
$5,341.9
$5,971.1
$0.0
$5.971.1
$2,051.0
$0.0
$2,051. 0
Agency Assets:
FmHA-RDIF
FmHA-RHIF
DHHS-Medical Facilities
Rural Utilities Service-CBO
Subtotal*
$2,435.0
$4,375.0
$0.0
$4.270.2
$11. 080.2
$2.570.0
$5.155.0
$0.0
$4.270.2
$11. 995.2
-$135.0
-$780.0
$0.0
$0.0
-$915.0
-$975.0
-$1,165.0
-$0.6
-$56.7
-$2.197.3
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 *
$2,156.7
$31.3
$7.8
$1,278.7
$2,268.0
$13.1
$941.1
$13.599.2
$132.0
$3.4
$20,431.4
$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
-$17.7
$4.7
-$0.4
$0.0
-$3.7
$0.0
$0.0
-$2.5
-$1.3
$0.0
-$20.9
-$233.8
$10.7
-$3.0
-$69.8
-$44.6
-$1.6
-$106.3
$609.8
-$27.2
-$0.1
$134.0
$37.789.4
$5.035.2
-$12.3
=
Grand total*
* figures may not total due to rounding
+ does not include capitalized interest
$42.824.6
I
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
lREASURY
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 2: 30 P.M.
November 8, 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 $32,000
to ~~fund an estimated $23,602 million of publicly held 13-week and 26-week
Treasury bills maturing November 15, 2001, and to raise new cash of approximately
$8,398 million. Also maturing is an estimated $6,000 million of publicly held 4-week
Treasury bills, the disposition of which will be announced November 13, 2001.
~i:lioa
The Federal Reserve System holds $11,246 million of the Treasury bills maturing
on November 15, 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 November 14, 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 $1,104 million into the 13-week bill and $684 million into the 26week 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%.
A bidder for the 13-week bill may subtract the NLP exclusion amount published in
the attached highlights from the amount of its holdings of the outstanding bill.
If
the published NLP exclusion amount is greater than its holdings, the holdings may be
calculated as zero but cannot be included in the net long position calculation as a
negative number.
The exclusion is optional, but if a bidder takes the exclusion, i t
must include any holdings in excess of the exclusion amount in calculating its net
long position.
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-778
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 NOVEM9ER 15, 2001
~ovember
Offering Amount ..... .
Public Offering ..... .
NLP Exclusion Amount.
· $16,000 million
· $16,000 million
· $ 4,900 million
Description of Offering:
Term and type of security.
..... 91-day bill
CUSIP number.
· 912795 JG 7
Auction date....
.......
. . November 13, 2001
Issue date......
. . November 15, 2001
Maturity date...
. ........ February 14, 2002
Original issue date . . . . . . . . . . . . . . . . . . . . . . . . . August 16, 2001
Currently outstanding . . . . . . . . . . . . . . . . . . . . . . . $19,214 million
Minimum bid amount and multiples . . . . . . . . . . . . $1,000
8, 2001
$16,000 million
$16,008 million
None
182-day bill
912795 JU 6
November 13, 2001
November 15, 2001
May 16, 2002
November 15, 2001
$1,000
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids:
Accepted in full up to $1 million at the highest discount rate of accepted competitive bids.
Foreign and International Monetary Authority (FlMA) bids:
Noncompetitive bids submitted through the Federal Reserve
Banks as agents for 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 exce~ded 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 (NLP) for each bidder must be reported when the sum of the total bid amount, at all
discount rates, and the net long position is $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the closing time for receipt of
competitive tenders.
Maximum Recognized Bid at a Single Rate . . . . . . . . 35% of public offering
Maximum Award.............
. . . . . . . . . . . . . . . . . 35% of public offering
Receipt of Tenders:
Noncompetitive tenders ..... Prior to 12:00 noon eastern standard time on auction day
Competitive tenders . . . . . . . . Prior to 1:00 p.m. eastern standard time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full par amount
with tender.
TreasuryDirect customers can use the Pay Direct feature which authorizes a charge to their account of
record at their financial institution on issue date.
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
FOR PLANNING PURPOSE ONLY
Friday, November 9,2001
Contact: Public Affairs
(202) 622-2960
MEDIA ADVISORY
Treasury Secretary Paul O'Neill will hold a pre G-20 press conference at 11 :00
a.m. EST on Thursday, November 15,2001 in the Treasury Department's Diplomatic
Reception Room (Room 3311),1500 Pennsylvania Avenue, NW.
The Room will be available for pre-set at 9:00 a.m.
Media without Treasury, or White House press credentials planning to attend
should contact Treasury's Office or Public Affairs at (202-622-2960) with the following
information: name, social security number and date of birth. This infonnation may also
be faxed to (202) 622-1999.
PO-779
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S Govemmenl Pnnllng Office 1998· 619·559
Joint Release
Board of Governors of the Federal Reserve System
Department of the Treasury
Department of Transportation
FOR IMMEDIATE RELEASE
November 9,2001
CHAIRMAN GREENSPAN, SECRETARY O'NEILL, SECRETARY MINETA DESIGNATE
REPRESENTATIVES TO AIR TRANSPORTATION STABILIZATION BOARD
Federal Reserve Board Chairman Alan Greenspan today designated Governor Edward M.
Gramlich to serve in his place as the chairman of the Air Transportation Stabilization Board.
Treasury Secretary Paul O'Neill designated Under Secretary for Domestic Finance Peter Fisher
to serve in his place as a Board member and Transportation Secretary Norman Mineta designated
DOT General Counsel Kirk Van Tine to serve in his place as a Board member.
Chairman Greenspan, Secretary O'Neill and Secretary Mineta will continue to be
available for consultation.
The Air Transportation Stabilization Board was authorized by the Air Transportation
Safety and System Stabilization Act. The Act, which was signed into law on September 22,
2001, establishes a federal loan guarantee program to assist air carriers that suffered losses due to
the attacks of September 11, 2001.
###
Media Contacts:
Federal Reserve:
Treasury:
Transportation:
PO-780
Dave Skidmore (202) 452-2955
Betsy Holahan (202) 622-2960
Lenny Alcivar (202) 366-4570
I
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 11:30 A.M.
November 13, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $19,000 million to
r",f'.lT"d c>.n. ~si:imated $6,000 million of publicly held 4-week Treasury bills maturing
November 15, 2001, and to raise new cash of approximately $13,000 million.
Tenders for 4-week Treasury bills to be held on the book-entry records of
TreasuryDirect will ~ be accepted.
The Federal Reserve System holds $11,246 million of the Treasury bills maturing
on November 15, 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 Internation3.1
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%.
A bidder for the bill may subtract the NLP exclusion amount published in the
attached highlights from the amount of its holdings of the outstanding bill.
If the
published NLP exclusion amount is greater than its holdings, the holdings may be
calculated as zero but cannot be included in the net long position calculation as a
negative number.
The exclusion is optional, but if a bidder takes the exclusion, it
must include any holdings in excess of the exclusion amount in calculating its net long
position.
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-78I
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 NOVEMBER 15, 2001
November 13, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . $19,000 million
Public Offering . . . . . . . . . . . . . . . . . . . . . $19,000 million
NLP Exclusion Amount . . . . . . . . . . . . . . . . $8,900 million
Description of Offering:
Term and type of security ........... 28-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . 912795 HX 2
Auction date . . . . . . . . . . . . . . . . . . . . . . . . November 14,2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . November 15,2001
Maturity date . . . . . . . . . . . . . . . . . . . . . . . December 13,2001
Original issue date ................. June 14,2001
Currently outstanding ............... $35,029 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
~ith 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
millio~ 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 (NLP) 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.
I
D EPA R T 1\1 E I\' T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C. • 20220. (202) 622·2960
For Immediate Release
November 14, 2001
Contact: Tara Bradshaw
(202) 622-2014
TREASURY PROVIDES ADDITIONAL DISASTER RELIEF
EXTENDS DUE DATE FOR DEPOSITS AND PAYMENTS OF AIR
TRANSPORTATION EXCISE TAXES
The Treasury Department today issued Notice 2001-77, which permits eligible air
carriers to defer the deposit and payment of air transportation excise taxes until January 15,
2002. This expands the relief provided in the Air Transportation Safety and System Stabilization
Act under which eligible air carriers were permitted to defer to November 15,2001, air
transportation excise tax deposits due after September 10,2001, and before November 15,2001.
The relief announced today will permit eligible air carriers to defer to January 15,2002, air
transportation excise tax deposits due after September 10, 2001, and before January 15, 2002. In
addition, eligible air carriers will be given until January 15, 2002, to file their excise tax returns
for the third calendar quarter of2001. The change in the due date of these returns defers from
November 30,2001, to January 15, 2002, the time for paying third-quarter air transportation
excise taxes that have not been previously deposited and are due with the returns.
"Treasury understands the need to allow the airline industry, which was greatly affected
by the September 11 th attacks, more time in making deposits and payments of their Federal
excise taxes," stated Mark Weinberger, Assistant Secretary for Tax Policy.
Part III-Administration, Procedural, and Miscellaneous
Disaster Relief With Respect to Air Transportation Excise Taxes
Notice 2001-77
This notice provides additional tax relief under section 301 (a) of the Air Transportation
Safety and System Stabilization Act (the Act), Pub. L. No. 107-42,115 Stat. 236, and informs
taxpayers of a change that will be made to the regulations under § 6071 of the Intemal Revenue
Code.
Section 301(a) of the Act provides relief to eligible air carriers with respect to the deposit
of taxes imposed by subchapter C of chapter 33 of the Code (the air transportation excise taxes).
PO-7B2
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S Govemment Pnntlng Office 1998· 619·559
Under section 301(a) of the Act, any deposit of those taxes required to be made by an
eligible air carrier after September 10, 2001, and before November 15, 2001, shall be treated for
purposes of the Code as timely made if the deposit is made on or before November 15,2001.
Section 301(a) of the Act also provides that the Secretary of the Treasury may extend the
November 15,2001, date to January 15, 2002.
Section 607l of the Code provides that the Secretary may prescribe the time for filing
any return by regulations when that time is not prescribed in the Code. Section 40.6071 (a)-2 of
the Excise Tax Procedural Regulations, as in effect for calendar quarters beginning before
October 1, 2001, provides that returns of the air transportation excise taxes for the third calendar
quarter of2001 are due by November 30,2001. Under § 6151 of the Code, the tax shown or
required to be shown on the return must be paid by the due date of the return.
Under the authority granted to the Secretary of the Treasury in section 301(a) of the Act,
any deposit of air transportation excise taxes required to be made by an eligible air carrier after
September lO, 2001, and before January 15, 2002, shall be treated for purposes of the Code as
timely made if the deposit is made on or before January 15,2002.
In addition, under the authority granted the Secretary in § 6071 of the Code, the Service
and Treasury Department will issue regulations changing the due date of certain returns filed by
eligible air carriers. Under these regulations, an eligible air carrier's Form 720, Quarterly
Federal Excise Tax Return, for the third calendar quarter of2001 will be due by January 15,
2002. Consequently, the time for paying the air transportation excise taxes shown or required to
be shown on the return also will be deferred. Under § 6151 of the Code, an eligible air carrier
will be required to pay such taxes for the third calendar quarter of2001 by January 15,2002.
Eligible air carriers that believe that they are entitled to relief under this notice should
mark "Notice 2001-77" in red ink at the top of their return and other documents submitted to the
IRS.
-30-
D EPA R T l\J E N T
0 F
THE
T REA SUR Y
NEWS
OFFICE OFPUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622.2960
FOR IMMEDIATE RELEASE
NOVEMBER 14,2001
CONTACT: TONY FRATTO &
BETSY HOLAHAN
(202) 622-2960
FROM THE OFFICE OF PUBLIC AFFAIRS
TREASURY DEPARTMENT SETS PROCEDURES FOR QUARTERLY REFUNDING
ANNOUNCEMENTS
The Treasury Department Office of Public Affairs is modifying its procedure for
disseminating the announcement of the government's quarterly refunding needs. The changes
are intended to improve the timeliness and transparency of quarterly refunding announcements.
Starting with the next scheduled refunding announcement on January 30,2002,
Treasury's Office of Public Affairs will post the announcement on the Treasury web site
(www.Treas.gov) at 9:00AM (EST). The announcement also will be delivered to credentialed
members of the media in the Treasury Pressroom shortly before 9:00AM with lock-down
embargo rules. The announcements include release of the Treasury Department's borrowing
estimates for the following quarter and the policy statement.
The traditional practice of releasing the quarterly refunding announcement at a news
conference will be discontinued. A senior Treasury official will brief members of the media
subsequent to the announcement at a regularly scheduled time.
The Office of Public Affairs will disseminate Treasury information in the most timely
and transparent manner possible while also maintaining confidentiality prior its proper release.
-30-
PO-783
For press releases, speeches, public schedules and official biographies, call our 24-huur fax line at (202) 622-2040
·U.S Govemment Pnntlng Office 1998· 619·559
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE 0(,' PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.- Z0220 _ (202) 622-2960
EMBARGOED UNTIL 9:00 A.M.
November 14, 2001
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960
TREASURY ANNOUNCES DEBT BUYBACK OPERATION
On November 15, 2001, the Treasury will buy back up to $1,750 million par
of its outstanding issues that mature between February 2015 and August 2019.
Treasury reserves the right to accept less than the announced amount.
This debt buyback (redemption) operation will be conducted by Treasury's
Fiscal Agent, the Federal Reserve Bank of New York, using its Open Market
operations system. Only institutions that the Federal Reserve Bank of New
York has approved to conduct Open Market transactions may submit offers on
behalf of themselves and their customers. Offers at the highest accepted
price for a particular issue may be accepted on a prorated basis, rounded up
to the next $100,000. As a result of this rounding, the Treasury may buy
back an amount slightly larger than the one announced above.
This debt buyback operation is governed by the terms and conditions set
forth in 31 CFR Part 375 and this announcement.
The debt buyback operation regulations are available on the Bureau of
the Public Debt's website at www.publicdebt.treas.gov.
Details about the operation and each of the eligible issues are given
in the attached highlights.
000
Attachment
PO-784
For press releases, speeches, public schedules and official biographies, call Ollr 2-1-hour fax line at (202) 622-20-10
HIGHLIGHTS OF TREASURY DEBT BUYBACK OPERATION
November 14, 2001
Par amount to be bought back .... Up to $1,750 million
Operation date . . . . . . . . . . . . . . . . . . November 15, 2001
Operation close time . . . . . . . . . . . . 11:00 a.m. eastern standard time
Settlement date . . . . . . . . . . . . . . . . . November 19, 2001
Minimum par offer amount ....... $100,000
Multiples of par . . . . . . . . . . . . . . . $100,000
Format for offers ..... Expressed in terms of price per $100 of par with
three decimals. The first two decimals represent
fractional 32 nds of a dollar. The third decimal
represents eighths of a 32 nd of a dollar, and must
be a 0, 2, 4, or 6.
Delivery instructions . . . . . . . . . . . ABA Number 021001208 FRB NYC/CUST
Treasury issues eligible for debt buyback operation (in millions) :
Coupon
Rate (%)
11. 250
10.625
9.875
9.250
7.250
7.500
8.750
8.875
9.125
9.000
8.875
8.125
Maturity
Date
02/15/2015
08/15/2015
11/15/2015
02/15/2016
05/15/2016
11/15/2016
05/15/2017
08/15/2017
05/15/2018
11/15/2018
02/15/2019
08/15/2019
CUSIP
Number
912810 DP
912810 DS
912810 DT
912810 DV
912810 DW
912810 DX
912810 DY
912810 DZ
912810 EA
912810 EB
912810 EC
912810 ED
Total
0
4
2
7
5
3
1
8
2
0
8
6
Par Amount
Outstanding*
10,808
4,064
5,642
5,698
18,824
18,824
15,644
11,696
7,072
7,614
13,744
19,016
138,646
Par Amount
Privately
Held*
8,963
2,897
4,635
4,661
17,724
17,168
12,889
9,638
5,833
6,561
11,371
16,326
118,666
Par Amount
Held as
STRIPS**
3,544
851
2,361
399
321
1,473
5,778
2,618
3,938
3,773
3,879
781
29,716
* Par amounts are as of November 13, 2001.
** Par amounts are as of November 9, 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.
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U.S. International Reserve Position
11/16/01
u.s.
The T reJ.sury Department today released
reserve assets data for the week ending November 9, 2001. As indicated in
this table, u.s. reserve assets totaled $70,132 million as of November 9,2001, down from $70,246 million J.S of November
2,2001.
(in US millions)
l. Official U.S. Reserve Assets
November 22 2001
November 9 l 2001
70,246
70,132
TOTAL
1. Foreign Currency Reserves
a. Securities
I
1
Euro
5,573
Yen
11,325
TOTAL
Euro
Yen
TOTAL
5,517
11,584
17,100
0
9,217
4,122
0
13,339
0
0
0
0
0
0
17,812
17,724
10,979
10,925
11,045
11,045
0
0
16,898
0
Of which, issuer headquartered in the U. S,
b. Total deposits with:
b.i. Other central banks and B/S
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 Stock
3
5. Other Reserve Assets
2
9,315
4,197
13,512
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.
21 The items, "2. IMF Reserve Posilion" 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 IrvlF data for November 2 are final. The entries in the table
above for November 9 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior 'Neek's IrvlF
data.
31 Gold stock is valued monthly at $42.2222 per fine troy ounce. Values shown are as of September 30.2001
was $11,044 million.
)0-785
The /-\ugust 31, 2001/alue
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
November 2, 2001
1. Foreign currency loans and securities
November 9, 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
November 9, 2001
November 2, 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
o
o
·'{;
J::i,:.,
..
-
'.-
DEP ARTMENT OF THE TREASURY
OFFICE OF PUBLIC AFFAIRS
FOR IMMEDIATE RELEASE
Wednesday, November 14, 2001
CONTACT
Rob Nichols
(202) 622-2910
UPDATE ON THE WAR ON TERRORIST FINANCING
The United States has worked closely with our allies around the world to ensure coordinated
action against terrorist financing. Today the Treasury Department released an update of the
global campaign:
Countries with blocking orders in force - 120
Accounts under review in the U.S. - 1086
Al Qaida and Taliban dollars blocked worldwide - over $56 million
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PO-786
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Embargoed Until 1:00 p.m.
November 15,2001
Contact: Tara Bradshaw
(202) 622-2960
STATEMENT OF B. JOHN WILLIAMS
NOMINEE FOR CHIEF COUNSEL FOR THE INTERNAL REVENUE SERVICE
AND ASSISTANT GENERAL COUNSEL IN THE DEPARTMENT OF THE TREASURY
BEFORE THE COMMITTEE ON FINANCE
UNITED STATES SENATE
Good day, Mr. Chainnan, Senator Grassley and Members of the Committee. I am very pleased to
appear before the Committee as the President's nominee for Chief Counsel for the Internal Revenue Service. I
would like to introduce my family to the Committee.
Mr. Chainnan, I consider this opportunity for public service to be a great honor, and especially so at
this time in our country's history. I would very much appreciate the opportunity to contribute to the efforts
that Treasury is making in the war on terrorism and in helping Commissioner Rossotti develop a system of
effective tax administration.
I would like to offer the Committee a brief summary of my thoughts on the role of the Chief Counsel
in the administration of the tax laws.
The power to tax is exercised not only by enacting revenue laws but also by interpreting and enforcing
them. In our democracy we must take special care to adhere faithfully to the law as enacted. Only a fair and
impartial interpretation and application of the law can command the respect of our citizens, and in my view the
Chief Counsel's principal duty is to assure that that respect is earned.
In fulfilling this duty, it is critical that the Service publish more guidance to the public, especially
revenue rulings. I share Commissioner Rossotti's belief that the Chief Counsel's office needs to focus more
on its advisory role to the pUblic. Too often the public looks to informal advice given to specific taxpayers to
discern the positions of the Service. This advice cannot, by statute, be relied on as precedential. If confirmed,
one of my goals will be to increase this public guidance.
The Chief Counsel's advisory role on interpreting the law should not be confused with Counsel's
enforcement role. Enforcement is a tool to assure even-handed application of the law, not a means to obtain
new interpretations of unclear law. When interpretive uncertainties are clarified through public guidance, the
central focus of enforcement, whether civil or criminal, is properly to maintain the integrity of the revenue
laws. If fair application of the law does not, render an acceptable policy result, then legislative or regulatory
change should be the way to effect the desired policy. I firmly believe that litigation should never be the
means to advance policy choices.
PO-7B7
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·U.S Govemment Pnntlng Office 1998· 619·559
The public is entitled to know and rely on the law and the agency's interpretations before cases are
developed. Counsel must make a renewed effort to develop those interpretations through public guidance.
The Chief Counsel must be dedicated to the operational success of the Service. Such dedication
entails working closely with the client and offering good judgment to help inform the choices the agency must
make. Most frequently that means thinking hard about feasible alternatives. Sometimes that means saying
"no," but that never means taking too long to say it.
I would be pleased to answer any questions the Committee might have.
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Embargoed Until 1 :00 p.m.
November 15, 2001
Contact: Betsy Holahan
(202) 622-2960
STATEMENT OF RICHARD H. CLARIDA
NOMINEE TO BE ASSISTANT SECRETARY OF THE TREASURY FOR ECONOMIC POLICY
BEFORE THE COMMITTEE ON FINANCE
~TEDSTATESSENATE
Chairman Baucus, Ranking Member Grassley, and Members of the Committee, I am grateful for the
opportunity to appear before you today in connection with my nomination to be Assistant Secretary of the
Treasury for Economic Policy. I am truly honored that President Bush has asked me to serve in this
important position, and I thank you for the privilege of appearing before you today.
Mr. Chairman, I have a deep and genuine respect for public service, and in particular for the advise
and consent role of the Senate in the confirmation process. If I am confirmed, I look forward to working
closely with this Committee, the Senate, and with members of the House of Representatives on addressing
the important economic issues that face our nation at this time.
Before proceeding any further, I would like to take this opportunity to thank my parents, William
and Edith Clarida, for teaching me the values of hard work and persistence that have brought me before you
today. I would especially like to thank my dear wife, Polly Barry, and two fabulous boys, Matthew Quinn
and Russell William, for providing the support and encouragement I will surely need to do this job, support
and encouragement that they offer knowing that it means that their father and husband will be away from
home for the next several years.
When I was growing up in a small town in downstate Illinois, the son of a public school teacher, I
could not have predicted that I would find myself honored with the nomination to be Assistant Secretary of
the Treasury. After graduating from public high school, I attended the University of Illinois at ChampaignUrbana, where I followed a rigorous program of study in economics and mathematics. I was accepted to
Harvard's graduate program in economics in 1979, and earned my Ph.D. in 1983. In the 18 years since then,
I have been a professor of Economics, first at Yale, and since 1988, at Columbia, where I am presently a
tenured full professor of Economics and International Affairs (on leave). From 1997-2001, I was Chairman
of the Department of Economics at Columbia.
I was fortunate to be in public service from 1986-1987, when I was a senior staff economist with
President Reagan's Council of Economic Advisers. I had the opportunity to work closely with the Chairman
and the Members of the CEA on a wide range of economic policy issues, a background that I think will serve
me well if I am confirmed as Assistant Secretary for Economic Policy.
I support President Bush's economic philosophy and his policy agenda for returning the economy to
a path of robust, sustainable growth.
PO-7BB
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·U.S Govemment Pnntlng Office 1998· 619·559
I am also eager to join the truly first rate team that President Bush has put together at Treasury,
including Secretary Paul O'Neill, Deputy Secretary Ken Dam, and Under Secretaries John Taylor, Peter
Fisher and Jimmy Gurule.
Thank you once again Mr. Chairman, for the privilege of appearing before this Committee. If
confirmed, I can assure you I will work closely and enthusiastically with you and the Members of this
distinguished committee in the month and years to come. I would be pleased to respond to your questions.
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November 15,2001
Contact: Tasia Scolinos
(202) 622-2960
STATEMENT OF KENNETH LAWSON
NOMINEE FOR ASSISTANT SECRETARY OF THE TREASURY FOR ENFORCEMENT
BEFORE THE COMMITTEE ON FINANCE
UNITED STATES SENATE
Thank you Chairman Baucus, Senator Grassley, and Members of the Committee. It is an honor
and privilege to be here today to testify in support of my nomination to serve as the next Assistant
Secretary of the Treasury for Enforcement.
I would like to thank President Bush for the opportunity to serve my country. I further would like
to thank Secretary Paul O'Neill for his support and confidence. I am humbled and honored about the
possibility of serving the Nation at this unique time in history.
Before proceeding any further, I would like to take the opportunity to thank my family for their
love and support. Although they could not be here today, their love and guidance are always with me.
Further, for the past ten years, I have been blessed with a loving and supportive wife. Please allow me to
introduce my wife, partner, and best friend, Sonia Lawson. I am a richer man because of her.
I look forward to the challenges, opportunities, and responsibilities that await me if confirmed as
the next Assistant Secretary for Enforcement. I believe that I am qualified to hold this important Treasury
post. For the last decade, I have been privileged to serve our country as both a Marine officer and a
federal prosecutor. Ten years ago, I began my government service as a United States Marine prosecutor.
During my military service, I was appointed as a Special Assistant United States Attorney in the Eastern
District of North Carolina. As a SAUSA, I traveled the Eastern District prosecuting cases in federal court
on behalf of the United States. At this time, I must recognize Major Brian Jackson, United States Marine
Corps, my fellow Marine who had served with me then. He is here in the audience to support me today.
After my military service, I was privileged to serve as an Assistant United States Attorney in the
Middle District of Florida. As an AUSA, I worked closely with each of Enforcement's bureaus: the
Bureau of Alcohol, Tobacco and Firearms, Customs Service, Secret Service, and IRS-CI. Together, we
worked closely in investigating and prosecuting financial crimes that ravaged the Middle District of
Florida. From my seven years as an Assistant, I have learned that dedicated professionals are housed in
Enforcement's bureaus. Although each bureau's mission is as separate as fingers on a hand, when brought
together as like a fist, Enforcement's bureaus are a dynamic force in the war against crime.
PO-789
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·U.S Govemment Pnntlng Office 1998· 619·559
However, the tragic events of September 11 th have galvanized our Enforcement bureaus to focus
their skills and talents to identify, disrupt and dismantle the terrorists' financial networks that have funded
our enemies. If confirmed to serve as the Assistant Secretary of Enforcement, I pledge to use all my
energy and skills to lead this mission, and to work hand in hand with our bureaus. With all respect, I am
here before you today because this is my war and I want to be part of the battle.
Thank you Mr. Chairman. It would be my honor to answer any questions.
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EMBARGOED UNTIL 11 :00 A.M. EST
November 15,2001
Contact: Tony Fratto
(202) 622-2960
TREASURY SECRETARY PAUL O'NEILL
PRE G-20 SUMMIT
This weekend we will take important steps to ensure further progress in the war on
terrorist financing. Representatives of the world's 20 largest economies will meet this weekend
in Ottawa to adopt an action plan that will cut off terrorists access to the global financial system.
At the meetings of the G-20, the IMFC and the Development Committee we will also address the
critical need for swift, firm actions to strengthen the world economy.
The United States is doing its part. The fundamental strengths of the U.S. economy
remain intact, the Federal Reserve has taken timely action, and the Administration is working
with Congress on trade promotion authority and an economic growth package that will boost
consumer spending and restore business investment, which creates jobs. We need a stimulus
package. We need it now. I am available 24 hours a day to meet with the leaders of the taxwriting committees to get this job done.
To improve living standards around the globe, the world economy needs many engines of
growth. I will ask other Ministers to put their economies on track for growth. The people of the
world need every nation to act now to restore strong and vibrant global growth.
Terrorist financing poses a threat to us all. We have made significant progress over the
last two months. In the United States, we have blocked more then $27 million associated with
the Taliban and al Qaida. Our allies around the world have blocked an additional $29 million.
My priority will be to work with the G-20, the IMFC and the Development Committee to
build a coalition to sever all of the links that allow terrorists to finance their illegal acts. It is not
enough for the U.S. to act alone. We cannot succeed in disrupting terrorist financing unless all
countries act so there is no safe harbor, anywhere, for terrorist funds. I intend to ask G-20
members to agree on a common action plan against terrorist financing with commitments to take
concrete actions to support United Nations resolutions to block financing of terrorists, to freeze
terrorist assets, to criminalize the collection of funds for terrorism and to report publicly on the
results of their actions. I will ask all member nations to collaborate in investigating and
identifying the financiers of terrorism against whom the civilized world must take action. I also
will urge the IMF and World Bank to increase quickly the emphasis placed on fighting terrorist
financing and money laundering in their surveillance and diagnostic work, particularly in their
assessment of countries' financial sectors and adherence to international standards.
PO-790
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·U.S Govemment Pnntlng Office 1998· 619·559
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For Immediate Release
November 15, 2001
Contact: Tara Bradshaw
(202) 622-2014
TREASURY ASSISTANT SECRETARY MARK WEINBERGER
REMARKS TO THE TAX FOUNDATION'S 64 TH ANNUAL CONFERENCE
Four Season's Hotel
The U.S. international tax rules have developed over the last 40 years. The development
of those rules began at a time when the global economy looked very different than it does today.
The basic structure of the U.S. international tax regime dates from the early 1960s where the
U.S. economy was dominant, accounting for over half of all multinational investment in the
world.
The world has changed in the last 40 years. The globalization of the U.S. economy puts
ever more pressure on our international tax rules. When the rules first were developed, they
affected only relatively few taxpayers and only relatively few transactions. Today, there is
hardly a U.S.-based company that is not faced with applying the international tax rules to some
aspect of its business.
In the creation of the international tax rules policymakers always try and weigh principles
of export neutrality against import neutrality (competitiveness). I think such a weighing is
important. In light of the changing global economy it is appropriate to put our international tax
laws back on the scale and recalibrate the balance if necessary.
There can be no doubt that re-examination of the U.S. international tax rules is
appropriate and timely.
As we look at our international tax system and consider appropriate reforms - both large and
small - to that system, there are several competing principles to keep in mind.
•
Tax rules should not serve as a barrier to cross-border investment.
•
Tax rules should not place an undue burden on the competitive position of U.S.-based
compal11es.
•
Tax rules should minimize distortion of investment decisions through tax considerations.
PO-791
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•
Tax mles should not create a bias for or against particular activities. Tax rules should be
neutral, except where incentives are necessary to account for unrecouped social good
(e.g., R&D).
•
Tax mles should minimize compliance and administrative burdens. Complexity, both
substantive and administrative, can impose significant costs for both taxpayers and the
governrnents.
These principles necessarily are in conflict and require a continual balancing. These
principles are only a subset of the considerations that must be taken into account in considering
the optimal design of any set oftax mles, but they are principles that have particular relevance in
considering the tax mles affecting international activities and transactions.
We have been very active in the international tax area in ways that further these principles.
Let me highlight some of the issues we have been addressing.
Facilitating Cross-Border Investment
One key principle is that tax mles should not serve as an artificial barrier to cross-border
investment. This is an issue not just with respect to our own tax mles but with respect to the
interaction of our tax mles with the tax rules of our trading partners.
The coordination between tax systems, along with the reduction of "toll charges" for
cross-border investment are the central goal of our tax treaty network. We have an ambitious tax
treaty program, with a two-pronged objective: to update and modernize our existing tax treaties
with our major trading partners and to expand our treaty network to cover new and potential
trading partners with which we have not previously had a treaty relationship.
We are constantly working to update and expand our treaty network. We are also reconsidering treaty policies as necessary to ensure that they serve U.S. interests.
The reduction of the withholding rate on direct dividends to zero in our recently-signed
treaty with the United Kingdom represents the first time the United States has included such an
elimination of withholding taxes on cross-border dividends in a treaty.
This was followed closely by the inclusion of a similar provision in the protocol to the
U.S.-Australia treaty, which was signed on September 27.
We also were able to open formal negotiations with Japan to renegotiate our treaty that
dates back 20 years.
While these two agreements were different in scope, they demonstrate that we are willing
to be flexible to secure a balanced package for both treaty partners and to serve the interests of
the businesses affected.
2
New U.S.-U.K. treaty, the U.S.-Australia protocol and the beginning of forn1al
negotiations with Japan are important developments that will help to facilitate cross-border
investment.
We are currently in negotiations with Canada, France, Korea, Hungary and Iceland to
update our existing treaties with those countries.
We also are negotiating with Chile, Bangladesh and Sri Lanka in order to expand our
treaty network to countries with which we have not had a treaty.
We look forward to input from the business community about where we should be
focusing our efforts in the future, since we want to make sure that our priorities reflect your
priorities.
Level Playing Field
The issue of a level playing field for U.S.-based businesses competing in the global
marketplace is very important. It is an issue that has gotten particular attention in recent years in
connection with the EU's challenge in the WTO to our FSC rules and then to our ETl rules.
The FSC and ETl provisions do not provide a special advantage to U.S. companies
relative to their foreign competitors. Rather, these provisions help to level the playing field by
mitigating the costs that would be imposed on U.S.-based companies under the U.S. international
tax rules and that would not be borne by their foreign competitors in the same marketplace.
We are disappointed with the WTO panel report finding that the ETr regime constitutes a
prohibited export subsidy. We continue to believe ETI regime is consistent with our WTO
obligations. We filed a notice of appeal in this case with the WTO Dispute Settlement Body on
October 15 th . We filed our brief on November 1st.
th
The oral hearing in the WTO is scheduled for November 26 , with a decision likely
around Mid-January. If that decision is adverse to the United States, the next step will be the
resumption of arbitration over the measure of damages and authorization of retaliation, which is
expected to take approximately 60 to 90 days or until approximately April of 2002.
Given the importance of the tax provisions that are the subject of the panel report and the
potential adverse implications of the panel's analysis for other tax and trade provisions, we
believe we must challenge the decision. The analysis in the panel report, which we believe is
erroneous in significant respects, has far-reaching implications not just for the United States but
for the European Union as well.
We announced last week that Treasury Deputy Secretary Kenneth Dam will make the
opening argument for the United States. Also participating in the opening argument will be the
Assistant to the Solicitor General for tax maters. We believe this sends an important signal as to
the seriousness with which the Administration takes this case.
3
As we state in our brief in this case, we believe the Panel's analysis of the ETI regime
and the application of the WTO rules to the regime was erroneous in all respects; contrary to the
Panel's analysis, the ETI is not a subsidy, it is not export-contingent and it is a measure for the
avoidance of double taxation. We further believe that the Panel's analysis has implications for
tax systems throughout the world and for the WTO itself. The Panel's analysis seems to mean
either that all tax systems will need to be reformed or that the WTO rules contain an inherent
bias in favor of one type of tax system over another; neither of these can be true.
At the same time, we believe we must continue to pursue an appropriate resolution of this
matter on all fronts. This is not the only matter between the United States and the European
Union and an issue of this magnitude needs to be resolved in the context of that larger
relationship.
This case is too big to leave solely to litigation to resolve. We need to pursue a
multifaceted approach.
We take this matter very seriously and intend to take all steps necessary to protect and
defend the competitive position of U.S. businesses. At the same time, we intend to resolve this
matter and honor our WTO obligations.
During last year's effort to develop legislation to respond to the prior WTO decision, the
Administration, the Congress, and the business community worked together in a very effective
partnership. We must continue that close and effective collaboration.
We look forward to consulting closely with the Congress and the business community as
we move forward on this critically important matter.
Fundamental Reform to Create Neutrality, Equity and Simplification
The issue of fundamental reform of our international tax rules has been raised in
connection with the WTO FSC case. While this case may be an impetus for consideration of
such reforms, it is not, and should not be viewed as, the only impetus for such consideration. As
I noted in my opening, re-examination of the international tax rules that have developed over the
last 40 years is appropriate and timely given all the ways in which the world has changed in that
period.
While the competitiveness of our international tax rules relative to those of other
countries can and should be addressed through needed refonns, reform of our international tax
system should be undertaken under our own terms and in our own time. We should not do this
complex work under a schedule or parameters set by the WTO or the European Union.
One of the most comprehensive options for international tax reform would be to replace
our current system of worldwide taxation with a territorial tax system.
4
In this regard, it is important to note that the differences between a worldwide-based tax
system, like the U.S. system, and a territorial-based system are not as stark as they might be - all
developed countries that use the territorial base as the starting point for their corporate tax
systems also have provisions that tax certain categories of foreign-source income.
HalfofOECD countries, including Canada, Germany, France, and the Netherlands,
operate territorial tax systems under which dividends paid from active income earned by foreign
subsidiaries and profits earned by foreign branches are exempt from domestic taxation. Passive
income generally is taxed on a worldwide basis, with either a tax credit or deduction allowed for
foreign withholding taxes imposed on such income.
The United States, like the United Kingdom, Japan, and the other half of all OECD
countries, operates a worldwide system of income taxation under which domestic residents are
taxed on income regardless of where it is earned. Relief from double taxation is provided
through the foreign tax credit mechanism. But, our deferral and certain exemptions in the U.S.
system, are examples of how we don't have a purely worldwide system.
Consideration of a possible move away from our current tax system and toward this type
of system involves significant and complex issues:
•
Design issues, such as what categories of income should be exempt and how to
allocate expenses between categories of income;
•
Impact on investment decisions;
•
Issues of complexity;
•
Impact on multinational businesses;
•
Impact on federal tax revenues; and
•
Politics.
Comprehensive reform of the international tax rules is an enonnous and long-term
project, which will require that the Administration, the Congress, and the business community
work closely together.
As we begin work on consideration of fundamental refonn of our tax system, we should
not lose sight of the goal of reducing the complexity of our tax system. We can make some
significant advances in this area in the near term.
There is much that can be done to reduce the complexity of our international tax rules.
These rules are cited by businesses as one of the major sources of administrative complexity and
compliance costs.
5
In the international area, the issue of simplification is not just a matter of reducing the
number of lines in the Internal Revenue Code or eliminating some IRS forms, although those
both would be worthwhile accomplishments. It is a matter of reducing the instances in which the
tax law drives taxpayers to engage in transactions or steps that otherwise are unnecessary or noneconomIC.
The Joint Committee on Taxation's simplification study includes proposals in the
international area that should be given serious consideration.
The international simplification and reform bills that are introduced each Congress on a
bipartisan, bicameral basis also include important provisions that would help to reduce the
complexity of the international tax rules.
Simplification provisions that should be explored further include:
•
Narrowing the scope of subpart F to avoid inadvertently covering income that is neither
passive nor mobile. The exception for active financial services income, which was
enacted in 1997, was an important first step in this regard.
•
Revisiting the expense allocation rules, particularly the interest allocation rules, to reduce
the distortions that can arise in the application of the current law rules. In this regard, we
recently issued a Notice requesting comments from taxpayers regarding the
appropriateness of expanding the circumstances in which an integrated transaction or
"netting" approach is used for purposes 0 f the interest allocation rules.
•
Rationalization of the various anti-deferral regimes - including subpart F, the PFIC
provisions and the foreign personal holding company provisions - to eliminate the
overlaps between regimes and to reduce the circumstances in which a taxpayer is subject
to multiple regimes would be a significant advance in terms of simplification.
E-Commerce
I have talked about the need to re-examine our international tax rules in light of the
developments in the global economy. Before I close, let me touch briefly on an area of
technological development that presents special challenges for the tax systems of the world.
E-commerce is still evolving and we have not yet seen its full impact on the way the
world does business. We must anticipate its implications for our tax system so that we are not in
a position of responding after the fact.
The global nature of e-commerce necessitates global consensus on the principles
underlying any e-commerce taxation. In the absence of such consensus, stifling mUltiple
taxation may result.
Our goal should be to ensure that e-commerce tax rules allow business decisions to be
responsive to economic considerations and market conditions.
6
Thus we would be very concerned about any cross-border e-commerce tax rules or tax
proposals that discriminate against e-commerce or that are so difficult to implement that they
impose an unfair burden on e-commerce participants.
We would also be concerned about any efforts to implement a proposal in advance of
international consensus and in advance of a technologically and commerciaIIy feasible
implementation mechanism.
These issues have to be faced most immediately in the application of consumption taxes
to e-commerce. We must also address the implications of e-commerce and other technological
developments on income tax application and administration. The direct tax issues raised by ecommerce may not be as immediate as those regarding consumption taxes, but they may be more
fundamental and ultimately more difficult to address. These issues include questions of both
source and character of income arising from e-commerce, as well as issues regarding attribution
of such income to a permanent establishment.
We are currently working within international organizations and bilateraIIy with our
trading partners to ensure that any taxation of e-commerce is clear, consistent, neutral and nondiscriminatory and to ensure that administration of any such taxation is simple and transparent.
And we will continue to consult actively with the business community to help ensure that
the formulation of these tax rules is based on full knowledge of their effects and on full
understanding of the underlying technologies.
Economic Stimulus
Before I close, let me comment for a moment on the Administration's efforts with respect
to economic growth, both in the United States and globally. Senate Republicans were right to
reject a bad spending bill that wasn't stimulative. Everyone - both Republicans and Democrats knew that the partisan, big-spending approach taken by the Finance committee would not work
on the Senate floor. It's a shame that the Senate had to waste valuable time in this unrealistic
political exercise. Centrists have made a proposal that moves away from the big-spending
approach. That's a welcome step toward bipartisanship. We are willing to work day and night
with Finance committee and Ways and Means committee members to get a bipartisan package
that is truly stimulative as soon as possible.
In addition to our efforts domestically, we are discussing with our major economic
partners ways in which economic and financial policy reform can have a marked impact on
global economic growth. The U.S. has identified a number of policies --liberalizing trade,
improving educational opportunity, increasing capital mobility, encouraging labor market
flexibility, and fiscal reforms--that could benefit all economies. In particular, reducing both high
levels of non-productive government expenditure and distortionary taxes wiII help to increase the
rate of real economic growth. Therefore, fiscal reforms can be expected to strengthen
substantially economic performance.
7
-30-
8
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMED IA TE RELEASE
November 15,2001
Contact: Tony Fratto
(202) 622-2960
Statement by Tonv Fratto, Director of Public Affairs
Senior Officials Meeting on Reconstruction Assistance to Afghanistan
The United States and Japan will co-chair a meeting of senior officials at the State Department
on Tuesday, November 20 to discuss the reconstruction of Afghanistan.
Officials are being invited from countries and international institutions that are likely to playa
vital role in the long-term process of Afghanistan's reconstruction. This is just a first step in that
long-term process, a process that we foresee will expand to include all members of the
international community committed to a prosperous future for Afghanistan.
The meeting aims at developing a common approach to how the international community can
initially support rehabilitation and reconstruction in Afghanistan and at the next steps to bring
this about. It will begin as well the process of eliciting support needed to offer the Afghan
people a positive vision for a post-Taliban future. The meeting is being held on short notice in
response to the far-reaching developments on the ground in Afghanistan.
-30-
PO-792
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S Govemment Pnntlng Office 1998· 619·559
PUBLIC DEBT NEWS
Department of the Treasury· Bureau of the Public Debt· Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
November 14, 2001
Office of Financing
202-691-3550
CONTACT:
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
28-Day Bill
November 15, 2001
December 13, 2001
912795HX2
1.970%
High Rate:
Investment Rate 1/:
1.998%
Price:
99.847
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 35.86%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED
$
SUBTOTAL
Federal Reserve
TOTAL
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
(in thousands)
$
42,701,365
31,770
$
18,968,395
31,770
o
o
42,733,135
19,000,165
977,332
977,332
43,710,467
$
19,977,497
Median rate
1.940%: 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 = 42,733,135 / 19,000,165 = 2.25
1/ Equivalent coupon-issue yield.
http://www . pu blicdebt. treas.gov
PO-793
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
November 15, 2001
CONTACT:
Office of Financing
202/691-3550
THANKSGIVING HOLIDAY SCHEDULE FOR
TREASURY'S BILL AND NOTE ANNOUNCEMENTS
In view of the Thanksgiving holiday 'next week, Treasury will
announce its offerings of 13- and 26-week bills and of 2-year notes at
11:30 a.m. on Wednesday, November 21, 2001.
These changes in the usual announcement schedule are consistent
with the Bond Market Association's recommedations for an early closing
on Wednesday, November 21, and a full market closing on Thanksgiving
Day.
000
PO-794
For press releases, speeches, public schedules and official biographies, call our 24-IIOUl fax line at (202) 622-204(]
I
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIUNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 2:30 P.M.
November 15, 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 $32,000
million to refund an estimated $24,156 million of publicly held 13-week and 26-week
Treasury bills maturing November 23, 2001, and to raise new cash of approximately
$7,844 million. Also maturing is an estimated $8,000 million of publicly held 4-week
Treasury bills, the disposition of which will be announced November 19, 2001.
The Federal Reserve System holds $11,020 million of the Treasury bills maturing
on November 23, 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 November 20, 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 ~~ included within the offering amount of each auction.
These
noncompeti~ive 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 $1,075 million into the 13-week bill and $942 million into the 26week 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%.
A bidder for the 13-week bill may subtract the NLP exclusion amount published in
the attached highlights from the amount of its holdings of the outstanding bill.
If
the published NLP exclusion amount is greater than its holdings, the holdings may be
calculated as zero but cannot be included in the net long position calculation as a
negative number.
The exclusion is optional, but if a bidder takes the exclusion, it
must include any holdings in excess of the exclusion amount in calculating its net
long position.
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-795
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 23, 2001
\
November 15, 2001
Offering Amount ..... .
Public Offering ..... .
NLP Exclusion Amount.
Description of Offering:
Term and type of security.
CUSIP number.
Auctlon date ..
Issue date ....
Maturi ty date.
Original issue date.
Currently outstanding.
Minimum bld amount and multiples.
· $16,000 million
· $16,000 million
· $ 4,900 million
· 90-day bill
· 912795 JH 5
. November 19, 2001
. November 23, 2001
. February 21, 2002
· August 23, 2001
.. $19,221 million
. ... $1,000
$16,000 million
$16,000 million
None
lSl-day bill
912795 JV 4
November 19, 2001
November 23, 2001
May 23, 2002
November 23, 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 (NLP) 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.
Recoanized Bid at a Sinale Rate.
35% of public offering
35% of public offering
-Fn---- Award . . . . . . . . . . . . .
.
.
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
Eayment 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
~ecord at their financial institution on issue date.
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt· Washington, DC 20239
FOR IMMEDIATE RELEASE
November 16,2001
Contact: Office of Financing
202-691-3550
TREASURY'S INFLATION-INDEXED SECURITIES
DECEMBER REFERENCE CPI NUMBERS AND DAILY INDEX RATIOS
Public Debt announced today the reference Consumer Price Index (Cpr) numbers and daily
index ratios for the month of December 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% 1O-year notes due January 15,2008
3-5/8% 30-year bonds due April 15, 2028
3-7/8% 10-yearnotesdueJanuary 15,2009
3-7/8% 30-year bonds due April 15,2029
4-1/4% 1O-year notes due January 15,2010
3-1/2% 10-yearnotesdueJanuary 15,2011
3-3/8% 30-112-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 CPI's (Ref Cpr) 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 796. The information is also available
on the Internet at Public Debt's website (http://www.publicdebUreas.gov).
The information for January is expected to be released on December 14,2001.
000
Attachment
http://www . pu blicdebt. treas.gov
PO-796
TREASURY INFLATION-INDEXED SECURITIES
Ret CPI and Index Ratios tor
December 2001
Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):
3-3/8% 10-Year Notes
Series A-2007
9128272M3
January 15, 1997
February 6, 1997
April 15, 1997
3-5/8% 5-Year Notes
Series J-2002
9128273A8
July 15, 1997
July 15, 1997
October 15, 1997
3-5/8% 10-Year Notes
Series A-2008
9128273T7
January 15, 1998
January 15, 1998
October 15, 1998
3-5/8% 30-Year Bonds
Bonds of April 2028
9l28l0FD5
April 15, 1998
April 15, 1998
July 15, 1998
Maturity Date:
Ref CPI on Dated Date:
January 15, 2007
158.43548
July 15, 2002
160.15484
January 15, 2008
161.55484
April 15, 2028
161.74000
I
,
Date
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
CPI-U (NSA) for:
RefCP(
Index Ratio
Index Ratio
Index Ratio
Index Ratio
178.30000
178.28065
178.26129
178.24194
178.22258
178.20323
178.18387
178.16452
178.14516
178.12581
178.10645
178.08710
178.06774
178.04839
178.02903
178.00968
177.99032
177.97097
177.95161
177.93226
177.91290
177.89355
177.87419
177.85484
177 .83548
177.81613
177.79677
177.77742
177.75806
177.73871
177.71935
1.12538
1.12526
1.12513
1.12501
1.12489
1.12477
1.12465
1.12452
1.12440
1.12428
1.12416
1.12404
1.12391
1.12379
1.12367
1.12355
1.12342
1.12330
1.12318
1.12306
1.12294
1.12281
1.12269
1.12257
1.12245
1.12233
1.12220
1.12208
1.12196
1.12184
1.12171
1.11330
1.11318
1.11306
1.11294
1.11281
1.11269
1.11257
1.11245
1.11233
1.11221
1.11209
1.11197
1.11185
1.11173
1.11161
1.11148
1.11136
1.11124
1.11112
1.11100
1.11088
1.11076
1.11064
1.11052
1.11040
1.11028
1.11016
1.11003
1.10991
1.10979
1.10967
1.10365
1.10353
1.10341
1.10329
1.10317
1.10305
1.10293
1.10281
1.10269
1.10257
1.10245
1.10233
1.10221
1.10209
1.10197
1.10185
1.10173
1.10161
1.10149
1.10137
1.10125
1.10113
1.10101
1.10089
1.10077
1.10065
1.10054
1.10042
1.10030
1.10018
1.10006
1.10239
1.10227
1.10215
1.10203
1.10191
1.'10179
1.10167.
1.'10155
1.10143
1:10131
1.'10119
1.10107
1.'10095
1.10083
1.10071
1.10059
1.10047
1.10035
1.10023
1.10011
1.09999
1.09987
1.09975
1.09963
1.09951
1.09939
1.09928
1.09916
1.09904
1.09892
1.09880
August 2001
177.5
September 2001
178.3
-----
---
October 2001
- - _ ..
-
_.
-
-
i
:
177.7
TREASURY INFLATION-INDEXED SECURITIES
Ref CPI and Index Ratios for
December 2001
Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):
3-7/8% 10-Vear Notes
Series A-2009
9128274V5
January 15, 1999
January 15, 1999
July 15, 1999
Maturity Date:
Ref CPI on Dated Date:
January 15, 2009
164.00000
Date
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
CPI-U (NSA) for:
3-7/8% 30-Vear 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-Vear Notes
Series A-201 0
9128275W8
January 15, 2000
January 18, 2000
July 15, 2000
3-112% 10-Vear Notes
Series A-2011
9128276R8
January 15, 2001
January 16, 2001
July 16, 2001
January 15, 2010
168.24516
January 15, 2011
174.04516
Ref CPI
Index Ratio
Index Ratio
Index Ratio
Index Ratio
178.30000
178.28065
176.26129
178.24194
178.22258
178.20323
178.18387
178.16452
176.14516
176.12561
178.10645
178.08710
178.06774
178.04839
178.02903
178.00968
177.99032
177.97097
177.95161
177.93226
177.91290
177.89355
177.87419
177.85484
177.83548
177.81613
177.79677
177.77742
177.75806
177.73871
177.71935
1.08720
1.08708
1.08696
1.08684
1.08672
1.08661
1.08649
1.08637
1.06625
1.06613
1.08601
1.08590
1.08578
1.08566
1.08554
1.08542
1.08531
1.08519
1.08507
1.08495
1.08483
1.08472
1.08460
1.08448
1.08436
1.08424
1.08413
1.08401
1.08389
1.08377
1.08365
1.08459
1.08448
1.08436
1.08424
1.08412
1.08401
1.08389
1.08377
1.06365
1.06353
1.06342
1.08330
1.08318
1.08306
1.06295
1.08283
1.08271
1.08259
1.08247
1.08236
1.08224
1.08212
1.08200
1.08189
1.08177
1.08165
1.08153
1.08142
1.08130
1.08118
1.0B106
1.05976
1.05965
1.05953
1.05942
1.05930
1.05919
1.05907
1.05896
1.05884
1.05873
1.05661
1.05850
1.05838
1.05827
1.05615
1.05804
1.05792
1.05781
1.05769
1.05758
1.05746
1.05735
1.05723
1.05712
1.05700
1.05689
1.05677
1.05666
1.05654
1.05643
1.05631
1.02445
1.02434
1.02422
1.02411
1.02400
1.02389
1.02378
1.02367
1.02356
1.02345
1.02333
1.02322
1.02311
1.02300
1.02289
1.02278
1.02267
1.02256
1.02245
1.02233
1.02222
1.02211
1.02200
1.02189
1.02178
1.02167
1.02156
1.02144
1.02133
1.02122
1.02111
August 2001
177.5
September 2001
178.3
October 2001
177.7
------
TREASURY INFLATION-INDEXED SECURITIES
Ref CPI and Index Ratios for
December 2001
Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):
3-3/8% 30-1/2-Year Bonds
Maturity Date:
Ref CPI on Dated Date:
April 15, 2032
177.50000
Date
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
CPI-U (NSA) for:
Bonds of April 2032
912810FQ6
October 15, 2001
October 15, 2001
RefCPI
Index Ratio
178.30000
178.28065
178.26129
178.24194
178.22258
178.20323
178.18387
178.16452
178.14516
178.12581
178.10645
178.08710
178.06774
178.04839
178.02903
178.00968
177.99032
177.97097
177.95161
177.93226
177.91290
177.89355
177.87419
177.85484
117.83548
177.81613
177.79617
177.77742
177.75806
177.73871
177.71935
1.00451
1.00440
1.00429
1.00418
1.00407
1.00396
1.00385
1.00374
1.00363
1.00353
1.00342
1.00331
1.00320
1.00309
1.00298
1.00287
1.00276
1.00265
1.00254
1.00244
1.00233
1.00222
1.00211
1.00200
1.00189
1.00178
1.00167
1.00156
1.00145
1.00134
1.00124
August 2001
177.5
September 2001
178.3
October 2001
-
-
-
177.7
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FOR IMMEDIATE RELEASE
November 15, 2001
Contact: Tasia Scolinos
(202) 622-2960
Florida Native Appears Before Senate Finance Committee for Confirmation Hearing
Today, the Bush Administration's nominee for the Treasury Department's Assistant
Secretary for Enforcement, Kenneth Lawson, appeared before the Senate Finance Committee for
his confirmation hearing. If confirmed, Mr. Lawson's portfolio will include overseeing
Treasury's Office of Foreign Assets Control, the implementation of all Treasury-related
provisions in the 2001 Patriot Act, and the execution of the Bush Administration's Money
Laundering Strategy. Mr. Lawson will also assist the Treasury Under Secretary for Enforcement
with oversight of the Treasury law enforcement bureaus.
If confirmed, Mr. Lawson will join the Treasury Department team from the U.S.
Attorney's Office in the Middle District of Florida where he has prosecuted white collar, tax, and
violent crime cases since 1994. While at the U.S. Attorney's Office, he was awarded the
Department of Justice Director's Award for his prosecution of United States v. Henry J. Lyons.
Prior to joining the U.S. Attorney's Office, Mr. Lawson was a military prosecutor in the United
States Marine Corps where he served as a Special Assistant United States Attorney for the
Eastern District of North Carolina. During his tenure with the Marine Corps Mr. Lawson was
also the recipient of a Navel Achievement Medal.
Mr. Lawson is a graduate of Florida State University and received his law degree from
Florida Sate University College of Law. While in law school Mr. Lawson clerked for the Florida
Supreme Court's Racial Bias Commission where he researched issues relating to racial bias in
the Florida judicial system. He is a native of Gainesville, Florida and graduated from Gainsville
High School in 1982.
PO-797
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FOR IMMEDIATE RELEASE
November 15, 2001
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT:
Office of Public Affairs
202-622-2960
TREASURY DEBT BUYBACK OPERATION RESULTS
Today, Treasury completed a debt buyback (redemption) operation for $1,750 million
par of its outstanding issues. A total of 12 issues maturing between February 2015 and
August 2019 were eligible for this operation. The settlement date for this operation will
be November 19, 2001. Summary results of this operation are presented below.
(amounts in millions)
Offers Received (Par Amount) :
Offers Accepted (Par Amount) :
$7,617
1,750
Total Price Paid for Issues
(Less Accrued Interest):
2,489
Number of Issues Eligible:
For Operation:
For Which Offers were Accepted:
Weighted Average Yield
of all Accepted Offers (%):
Weighted Average Maturity
for all Acc"pted Securities
12
10
5.145
(in years) :
16.1
Details for each issue accompany this release.
PO-798
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November 15,
2001
TREASURY DEBT BUYBACK OPERATION RESULTS
iamounts in millions, prices in decimals)
Table I
Coupon
Ps 1
Ra t e
11. 250
10.625
9.875
9.250
7.250
7.500
8.750
8.875
9.125
9.000
8.875
8.125
Maturity
Da t e
Par
Amount
Off ere d
Par
Amount
AcceDted
Highest
Accepted
Price
Weighted
Average
Accepted
Price
02/15/2015
08/15/2015
11/15/2015
02/15/2016
05/15/2016
11/15/2016
05/15/2017
08/15/2017
05/15/2018
11/15/2018
02/15/2019
08/15/2019
786
772
647
530
203
363
1,002
1,008
585
555
454
712
25
40
57
196
0
0
25
488
275
440
129
75
160.250
155.093
148.015
141. 968
N/A
N/A
138.390
140.031
143.687
142.843
141. 656
133.343
160.250
155.093
147.985
141. 903
N/A
N/A
138.390
140.005
143.670
142.798
141. 649
133.338
Weighted
Average
Accepted
Yield
Par Amount
Privately Held*
4.979
5.023
5.050
5.079
N/A
N/A
5.128
5.137
5.160
5.181
5.189
5.219
8,938
2,857
4,578
4,465
17,724
17,168
12,864
9,150
5,558
6,121
11,242
16,251
Table II
Coupon
Rate (%1
Maturity
Date
CUSIP
Number
Lowest
Accepted
Yield
11. 250
10.625
9.875
9.250
7.250
7.500
8.750
8.875
9.125
9.000
8.875
8.125
02/15/2015
08/15/2015
11/15/2015
02/15/2016
05/15/2016
11/15/2016
05/15/2017
08/15/2017
05/15/2018
11/15/2018
02/15/2019
08/15/2019
912810DPO
912810DS4
912810DT2
912810DV7
912810DW5
912810DX3
912810DY1
912810DZ8
912810EA2
912810EBO
912810EC8
912810ED6
4.979
5.023
5.048
5.074
N/A
N/A
5.128
5.135
5.159
5.178
5.189
5.219
~o:al
~o:al
Par
Par
.~ount
.~ount
Offered:
Accepted:
7, 617
1,750
No:e: Due :0 rounding. de:ails may not add to totals.
·,;.mo"...!n: ou:scanding after opera:ion. Calcula:ed using amounts reported on announcement.
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FOR IMMEDIATE RELEASE
November 15, 2001
Contact: Tony Fratto
(202) 622-2960
Statement from Treasury Secretary Paul O'Neill regarding Turkey
Turkey is a close friend and ally of the United States. Turkey's
implementation of its reform policies has been very strong. We are pleased
that the IMF is recommending completion of Turkey's review and support
the other recommendations presented to the Board today. Combined with
Turkey's commitment to continue to implement reform measures, these steps
should help to reestablish the basis for economic growth.
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EMBARGOED UNTIL 12:30 P.M. EST
November 16, 2001
Contact: Betsy Holahan
(202) 622-2960
REMARKS OF SHEILA C. BAIR
ASSISTANT SECRETARY FOR FINANCIAL INSTITUTIONS
U.S. DEPARTMENT OF THE TREASURY
REMARKS BEFORE THE AMERICAN BAR ASSOCIATION'S
COMMITTEE ON FEDERAL REGULATION OF SECURITIES
I am pleased to be invited to speak here today. This has been a very busy time for
those of us working on financial services policy at Treasury. Our policy priorities have,
not surprisingly, shifted significantly since September 11. My remarks will focus on
those financial regulatory and legislative issues of interest to the securities bar that are
currently on the front burner. I would also like to raise one other issue to which we hope
to devote more attention in the months ahead.
Bank Secrecy Act
I want to first summarize our regulatory implementation efforts on bank secrecy.
As a result of the Patriot Act, which President Bush signed into law last month, there are
more new grants of regulatory authority provided to the Secretary of the Treasury in this
single piece oflegislation than in the entire history of the Bank Secrecy Act since its
enactment in 1972. This unprecedented level of authority is, of course, a direct
consequence of the state of national emergency. Treasury intends to mandate the lowest
possible level of burden to any regulation that is consistent with obtaining the highest
possible level of benefit to those fighting terrorism and money laundering.
The statute requires that each financial institution have an anti-money laundering
program. This should not impose significant new requirements on depository institutions,
since they are already required to have in place anti-money laundering procedures and
controls. The statute also authorizes rulemaking on the verification of customers when
opening accounts. We recognize that depository institutions currently collect the
Taxpayer Identification Number for most customers, and already generally examine
government issued photo identification when establishing accounts.
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The statute also extends suspicious activity reporting to securities brokerage finns,
an effort that is well underway. In this way, there will be somewhat of a "level playing
field" in requiring different types of financial services institutions at potential risk for
money laundering abuse to be required to report similar types of critical infonnation.
In implementing our responsibilities under the Patriot Act, Treasury will take a
realistic look at costs as well as benefits, and will make the process as transparent as
possible. We seek to minimize the regulatory burdens of new Bank Secrecy Act
requirements while providing a real benefit to those working to achieve national security
and law enforcement objectives.
Terrorism Risk Insurance
Let me tum now to insurance. Prior to September 11, virtually all property and
casualty insurance policies -- commercial and household -- provided coverage for terrorist
acts. In some sense, this was a freebie. Since the risk was thought to be quite small and
there was virtually no actuarial basis for assessing the risk, the coverage was provided at
no additional charge. All that changed on September 11. Insurance companies absorbed
billions of dollars of unanticipated losses that day. To its credit, the industry is stepping
up to the plate and paying the resulting claims. Yet that day has caused a fundamental
examination of what it means to insure against terrorist acts.
After September 11, 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. At a time when we
are working hard to stimulate our economy to get it moving again, left unresolved this
situation would be a hannful drag on those efforts.
It is this risk to our economy that has driven our efforts to devise a temporary
solution to what we hope is a temporary problem. Without a basis upon which to price
terrorism risk, insurance companies will not offer the coverage or will offer it at rates that
approach their maximum loss exposure. September 11 taught us that that potential loss
exposure could be quite high indeed.
Without insurance, companies' credit position will deteriorate in the market.
Borrowing costs will be driven up and new construction will be difficult to finance.
Certain sectors, such as energy and transportation, may be paliicularly adversely affected.
But higher energy and transportation costs would drive up prices and reduce production
across the board. Even with insurance, drastic increases in insurance costs would lead to
similar outcomes for the economy.
2
Thus, the Administration has been working closely with Congress, state insurance
regulators, and industry to devise a temporary mechanism that would:
•
•
•
Help the economy by diminishing the cost increases for insurance coverage while
ensuring that terrorism risk insurance remains available to all property and casualty
insurance policyholders;
Limit federal intrusion into private economic activity; and
Continue to depend on the state regulatory infrastructure for insurance companies.
It is important to note that these objectives are premised on a short-term intervention by
the federal government, not a new, permanent presence in the market. In fact, virtually
everyone involved agrees that whatever solution we settle upon should have a clear exit
strategy for the government and should encourage the insurance industry to build capacity
to insure terrorist acts as the government recedes from the market.
Over the past several weeks, we have been working with the Congress to find an
agreeable solution. The good news is that we have achieved a broad, bipartisan
consensus that this is a critical situation that demands a quick federal response. The bad
news is that we have not yet reached consensus on a particular approach.
Even this bad news, however, is not bleak. The Senate Banking Committee has
announced a framework for legislation that the Administration has broadly endorsed.
And House Financial Services Chairman Oxley and Insurance Subcommittee Chairman
Baker have introduced a bill that the Committee approved. We are hopeful that the
various approaches being discussed will soon be melded into a single package that can
gamer broad congressional support and be quickly enacted. Yet this must get done
quickly. The majority of insurance contracts expire at year-end and renewal notices for
next year are being prepared and sent to policyholders. Every day counts. Thankfully,
both congressional and Administration leaders understand this and are pressing forward
to a solution.
Netting
Weare also working to obtain Congressional passage this year of legislation to
facilitate the termination and netting of financial contacts as proposed by the President's
Working Group on Financial Markets. As you may know, Secretary O'Neill has written
twice to Congress in recent weeks, once in a joint letter with Chairman Greenspan and
another time jointly with all of the federal financial regulators, asking Congress to revise
the bankruptcy and bank insolvency laws for this purpose.
The legislation would reduce uncertainty for financial market participants about
the disposition of their contracts in the event that one of the counterparties becomes
insolvent. This reduced uncertainty should limit market disruptions in the event of
insolvency and mitigate risks to federally supervised market pat1icipants and to the
financial system generally.
3
The relevant provisions are a non-controversial portion of broader legislation to
revise the bankruptcy laws. We are concerned, however, that the controversial issues of
the broader legislation may not be resolved soon enough to allow its passage this year.
Whether as part of comprehensive bankruptcy reform legislation or as a stand-alone bill,
we believe that Congress should enact netting legislation this year. Further delays would
unnecessarily place the financial system at greater risk.
Critical Infrastructure Protection
Another area in which we have been heavily immersed is critical infrastructure
protection or CIP for short. This program has its roots in a 1997 report of a presidential
commission that studied the potential vulnerabilities of major sectors, or infrastructures,
to the threats of non-traditional warfare, that is, cyber and other terrorist threats. The
commission identified several sectors, including energy, telecommunications,
transportation, and banking and finance as "critical sectors," meaning that the full or
partial failure of any of these could significantly degrade the nation's social and economic
welfare. The commission recommended that the government work with each of these
sectors to bolster their defenses against cyber and other attacks, and Treasury was directed
to work with banking and finance.
Treasury and the industry initially focused on the cyber threat, as this appeared to
be the newest and least understood threat to the banking and finance. A Banking and
Finance Sector Coordinating Committee was established in 1998 to supervise the
industry's various CIP responsibilities. In 1999, the establishment of the financial
services information sharing and analysis center (FS/ISAC) permitted members to
anonymously share information on cyber threats, vulnerabilities, incidents and solutions.
But we learned some important new lessons from September 11. On balance, the
Enancial sector responded remarkably well to the September 11 events. A great deal of
this success is attributable to the work done in preparation for Y2K as well as the
subsequent emphasis on critical infrastructure protection and the business
continuity/contingency plans required by regulators. Nonetheless past emphasis on cyber
threats meant that while most institutions had established redundant systems, not all of
them were geographically distant from their primary sites. Establishment of
geographically remote back up sites for institutions which represent concentrated
financial activity has become a major issue.
It also became clear that greater coordination between industry and all levels of
government would be helpful. Regulators seemed to be in contact with each other and
with their respective regulated institutions, but there was no central, authoritative source
of information on the system as a whole. Moreover, there wasn't a commonly held list of
"key contacts" to call at major financial institutions, key trade associations and
government agencies in order to exchange authoritative infom1atiol1.
4
Going forward, it is clear that our earlier focus on cyber threats was too narrow,
and that the CIP program will need to address the broad spectrum of physical and cyber
threats. Moreover, there is general agreement within the industry and among regulators
that we need to develop a comprehensive crisis management capability.
President Bush recently established a new Criticallnfrastructure Protection Board
comprised of senior executive branch representatives. The Board is to recommend
policies and coordinate programs for protecting infonnation systems for critical
infrastructures, including emergency preparedness communications, and the physical
assets that support such systems. This Board will have a standing committee on banking
and finance, which will be led by the Treasury Department. Until September 11, our CIP
efforts were built on the twin pillars of private sector leadership and private sector
innovation. Government's role had been principally to cajole and encourage and to rely
on industry to do what is best and right to protect itself. Certainly, government will be
more active in the future.
Regulatory Coordination
Finally, I would like to tee up an issue concerning the existing regulatory
landscape. We are still learning the full implications for our existing regulatory structure
of both the Gramm-Leach-Bliley Act and the ongoing evolution of our financial services
system. In the months ahead, we expect to examine the merits and shortcomings of the
current regulatory regime for the financial services system we hope to have in the years
ahead.
A noteworthy development in banking regulation since the savings and loan crisis
and commercial bank problems of the late 1980s has been the increased reliance on joint
rulemaking among the federal banking agencies. Each of these agencies (along with state
regulators) retains its own responsibilities for regulating, supervising, and examining
different classes of depository institutions. But - prodded by Congress - the federal
banking agencies have more closely coordinated rulemaking on capital requirements and
other safety and soundness and consumer protection standards. This has promoted
consistent rules for activities posing similar risks regardless of depository institution
charter type.
Of course, competitiveness and conflict have not disappeared among the banking
agencies. Only recently, banking regulators worked through disagreements about
appropriate capital requirements for merchant banking and related private equity
investments by banking organizations. Yet, in our view, this experience underscores the
importance of encouraging interagency coordination.
The Gramm-Leach-Bliley (GLB) Act was a significant step in adapting U.S.
banking law to the reality of financial services convergence in the marketplace. To
accommodate a financial system where banking, securities, and insurance would be
housed within the same organization, GLB endorsed the principle of functional regulation
5
and refined the process for distinguishing among these products and activities. At the
same time, GLB also recognized the importance of consolidated oversight for financial
holding companies and preserved the role of the banking agencies as primary regulators
of the banking units of these companies. Thus, GLB chose the path of incremental
adaptation of our regulatory structure to accommodate an increasingly integrated financial
services sector, rather than fundamental overhaul.
In the aftermath of GLB and as marketplace convergence of financial services
continues, we need to tum our attention to extending rulemaking coordination efforts
beyond the banking agencies to all federal and state financial regulators. I do not mean
to suggest that the solution is a monolithic regulator for our entire system. We do not
envision eliminating or altering the roles and responsibilities of existing financial
regulators in enforcing regulations and supervising markets and institutions. But in order
to ensure that financial activities posing like risks receive like regulatory treatment no
matter where they are housed, we may need to improve how we coordinate financial
regulation and resolve disputes that cross-regulatory jurisdictions. At a minimum, I
believe we need an inter-agency mechanism to develop rules of cross-jurisdictional
impact.
Regulatory reform is not a glamour issue. For as long as I can remember, people
have complained about the U.S. system having too many regulators and too many overlapping rules. Yet past proposals to come to grips with the problem have generally fallen
flat, defeated by a combination of parochial interests -- in government and industry -- to
maintain each individual regulator'S turf, and the perception that this is a long term
problem that could be put off for another day. Well, another day is now, and I would
welcome the opportunity to have some serious discussions with you on how we can make
the current system better. You are the ones that have to parse through our regulatory
maze every time one of your clients wants to offer an innovative new product or service.
You are the ones that have to help clients deal with multiple regulators and understand
the myriad rules and compliance standards applicable to financial institutions offering
multiple lines of services. So I would appreciate your coming to the table and talking
with us about how we might further streamline the current system, without in any way
compromising the efficiencies which derive from healthy regulatory competition.
Predatory Lending
Before concluding, let me briefly mention the problem of predatory lending. I
recently spoke about the need to develop a nationwide set of best practices for the
subprime lending community. That is a topic probably better suited for the banking bar
than the securities bar, so I have not discussed it in detail today. I would note, however,
that while your clients may not make subprime loans, many of them are involved in
securitizing those loans and could, I believe, be an important partner in helping us reach
the majority of subprime lenders with a new code of best practices. Toward that end, we
have already discussed securities firm participation in this project with the Bond Market
6
Association and look forward to working with its members as we develop and implement
the Code.
That concludes my remarks. I would be happy to answer your questions.
7
1
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Contact: Betsy Holahan
(202) 622-2960
FOR IMMEDIATE RELEASE
November 12,2001
REMARKS TO WOMENFUTURE
SHEILA C. BAIR
ASSISTANT SECRETARY FOR FINANCIAL INSTITUTIONS
U.S. DEPARTMENT OF THE TREASURY
Good afternoon.
Let me begin by saying I am pleased and privileged to have this opportunity to speak before such a
prestigious group of women executives. I especially want to thank Susan Bird and Cathy Kinney for
making this possible. Your organization, Womenjiltllre, and your annual Main Event, truly renect the new,
dynamic business environment in which we all find ourselves -- an environment increasingly driven by
global events and infonnation. In my view, the ultimate test for all of us as leaders in our respective
organizations will be how well we meet the challenges of this global environment. Nothing in my
experience makes this more clear than the honors of September 11.
I would like to share with you two issues I have been immersed in since that day: ensuring that
businesses and households continue to obtain property and casualty insurance for acts of terrorism and
protecting the nation's critical infrastructure.
Terrorism Risk Insurance
Let me begin with insurance. Prior to September 11, virtually all property and casualty insurance
policies -- commercial and household -- provided coverage for tenorist acts. In some sense, this was a
freebie. Since the risk was thought to be quite small and there was virtually no actuarial basis for assessing
the risk, the coverage was provided at no additional charge. All that changed on September 11.
Insurance companies absorbed billions of dollars of unanticipated losses that day. To its credit, the
industry is stepping up to the plate and paying the resulting claims. Yet that day has caused a fundamental
examination of what it means to insure tenorist acts.
After September 11, insurance companies have no sense of the risk distribution associated with
possible future acts of terrorism. For the moment, the uncertainty associated with tenorism 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.
[nsurance companies will - and some already have - reacted to this situation by either refusing to extend
:overage for acts of tenorism or seeking exorbitant premiums for such coverage. At a time when we are
Norking hard to stimulate our economy to get it moving again. left unresolved this situation would be a
1armful drag on those efforts.
It is this risk to our economy that has driven our etTorts to devise a temporary solution to what we
lOpe is a temporary problem. Without a basis upon which to price terrorism risk. insurance companies will
lot offer the coverage or will offer it at rates that approach their maximum loss exposure. September 11
laught us that that potential loss exposure can be quite high indeed.
PO-BOI
For press releases, speeches, public schedules and official biographies, call our 24-hour fa;~ line nit (2{)2) 522-2040
'U S Government Pnntlnq Olllce 1998· ,319·559
Without insurance, companies' credit position will deteriorate in the market. Bon-owing costs will
be driven up and new construction will be difficult to finance. Certain sectors, such as energy and
transportation, may be particularly adversely affected. But higher energy and transportation costs would
drive up prices and reduce production across the board. Even with insurance, drastic increases in insurance
costs would lead to similar outcomes for the economy.
Thus, the Administration has been working closely with Congress, state insurance regulators, and
industry to devise a temporary mechanism that would:
•
•
•
Help the economy by diminishing the cost increases for insurance coverage while ensuring that
ten-orism risk insurance remains available to all property and casualty insurance policyholders;
Limit federal intrusion into the private economic activity; and
Continue to depend on the state regulatory infrastructure for insurance companies.
It is important to note that these objectives are premised on a short-tetm intervention by the federal
government, not a new, pennanent presence in the market. In fact, virtually everyone involved agrees that
whatever solution we settle upon should have a clear exit strategy for the government and should encourage
the insurance industry to build capacity to insure ten-orist acts as the government recedes from the market.
Legislative Progress
Over the past several weeks, we have been working with the Congress to find an agreeable
solution. The good news is that we have achieved a broad, bipartisan consensus that this is a critical
situation that demands a quick federal response. The bad news is that we have not yet reached consensus on
a particular approach.
Even this bad news, however, is not bleak. The Senate Banking Committee has announced a
framework for legislation that the Administration has broadly endorsed. And in the House, Financial
Services Chainnan Oxley and Insurance Subcommittee Chairman Baker have introduced a bill, which the
Committee approved last Wednesday. The House leadership hopes to move the bill to the floor this week.
We are hopeful that the various approaches being discussed will soon be melded into a single package that
can gamer broad congressional support and be quickly enacted.
Yet this must get done quickly. The majority of insurance contracts expire at year-end and renewal
notices for next year are being prepared and sent to policyholders. Every day counts. Thankfully, both
congressional and Administration leaders understand this and are pressing forward to a solution.
Background on Critical Infrastructure Protection
My immersion in this new environment took an interesting route. When I an-ived at Treasury this
past summer to assume the duties of the Assistant Secretary for Financial Institutions my portfolio included
responsibility for a program known as critical infrastructure protection, or ClP for short. This program
found its roots in a 1997 report of a presidential commission that had studied the potential vulnerabilities of
major sectors, or infrastructures, to the threats of non-traditional warfare, that is, cyber and other ten-orist
threats. The commission identified energy, telecommunications, transportation, and banking and finance as
"critical sectors," meaning that the full or partial failure of any of these could significantly degrade the
nation's social and economic welfare. The commission recommended that government work with each of
these sectors to bolster their defenses against cyber and other attacks, and under Presidential Decision
Directive 63 (PDD 63) in May 1998, Treasury was directed to work with banking and finance.
Treasury and the industry initially focused on the cyber threat, as this appeared to be the ne\vest
and least understood threat to the banking and finance infrastructure, and it was the threat most emphasized
by PDD 63.
With respect to cyber security, significant accomplislmlents have been made as a result of
PDD 63. Among others, notable achievements include:
•
•
establishment of the Banking and Finance Sector Coordinating Committee in 1998 to supervise the
industry's various responsibilities under PDD 63; and
establishment of the financial services information sharing and analysis center (FS/ISAC) in 1999 to
permit members to anonymously share infornlation on cyber threats, vulnerabilities, incidents and
solutions.
But we learned some important new lessons trom September 11. Let me discuss our priorities as
we see them now, and what it means for banking and finance going forward.
Lessons Learned
On balance, the financial sector responded remarkably well to the September 11 events. For the
most part, major financial institutions successfully activated their business continuity plans, and banking
and payment systems remained open for business. Also, financial institutions worked well with regulators
to test and reopen debt and equity markets quickly.
A great deal of this success is attributable to the work done in preparation for Y2K as well as the
subsequent emphasis on critical infrastructure protection under the mandate ofPDD 63 and the business
continuity/contingency plans required by regulators. Nonetheless past emphasis on cyber threats meant that
while most institutions had established redundant systems, not all of them were geographically distant from
the primary site. Establishment of geographically remote back up sites for institutions that represent
concentrated financial activity has become a major issue.
It also became clear that greater coordination between industry and all levels of govemment would
be helpful. Regulators seemed to be in contact with each other and with their respective regulated
institutions, but there was no central, authoritative source of information on the system as a whole.
Moreover, there wasn't a commonly held list of "key contacts" to call at major financial institutions, key
trade associations and government agencies in order to exchange authoritative information.
Going Forward
Going forward, it is clear that our earlier focus on cyber threats was too narrow, and that the crp
program will need to address the broad spectrum of physical and cyber threats. In this respect, financial
institution regulators will be reviewing their existing business continuity guidance to assess gaps and
otherwise update the guidance as needed. Moreover, there is general agreement within the industry and
among regulators that we need to develop a comprehensive crisis management capability. This requires
vulnerability assessment (physical and cyber), scenario analysis, contingency planning, gap analysis, and
response and recovery procedures. This approach will be reflected in the banking and finance sector's final
draft of its national plan.
High priority will be attached to developing a list of key points of contact among financial finTIS,
government regulators and agencies (federal, state, local), industry utilities, and other providers (vendors)
of critical services to banking and finance. Perhaps we need a secure, common call-in, or bridge number to
facilitate communication among authorized parties. For its part, at the earliest possible date Treasury
intends to establish and maintain a closed, secure communications network for itself and the primary federal
regulators of fmancial institutions.
The FS/ISAC will need to reassess its current focus on cyber attacks to decide how to expand its
mission to physical asset security and perhaps even comprehenSive crisis management. This requires
careful thought because the FS/ISAC fulfills a valuable role now and over-reaching could undercut its
effectiveness. Whatever future role it plays, the FS/ISAC needs to expand its membership and build
stronger information sharing links with federal agencies, other domestic rSACs, and even appropriate
international entities.
President Bush recently established a new Critical Infrastructure Protection Board comprised of
senior executive branch representatives. The Board is to recommend policies and coordinate programs for
protecting infonnation systems for critical infrastructures, including emergency preparedness
communications, and the physical assets that support such systems. This Board will have a standing
committee on banking and finance that will be led by the Treasury Department.
Until September 11, our CIP efforts were built on the twin pillars of private sector leadership and
private sector innovation. Government's role had been principally to cajole and encourage, and to rely on
industry to do what is best and right to protect itself. Certainly, govemment will be more active in the
future.
Conclusions
As a concluding comment, I would like to observe that amidst the h'agedy and horror of September
11 we have seen great leadership and heroism. We have been deeply inspired by the leadership of our
President, whose ironclad determination to rid the world of this insidious new evil has instilled confidence
and hope in us all. We have learned that American heroism is not some nostalgic foohlote for 20th Century
history books. On September 11 and its aftermath, we saw it in our firefighters and police officers, airline
passengers and medical workers. We saw it in the men and women of New York's financial district, who
toiled around the clock to re-open the financial markets, who defied the terrorists and demonstrated to the
world that the capital markets -- the fuel of America's economy - would not be disrupted. They succeeded.
You succeeded. This heroism -- your heroism -- deserves its rightful place in the annals of our nation's
history as a magnificent example of American spirit and will.
The Herculean challenges we confronted in the weeks immediately succeeding September II are
now, forhmately, behind us. But our work is far from done. The ongoing private-public parhlership to
protect the nation's critical infrastructures, including the protection of our banking and finance sector, will
be a major pre-occupation for the foreseeable future. I look forward to working with you in that endeavor.
I
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Contact: Tara Bradshaw
(202) 622-2014
For Immediate Release
November 16,2001
WEINBERGER STATEMENT ON PASSAGE OF INTERNET TAX MORATORIUM
Mark Weinberger, Treasury Assistant Secretary for Tax Policy, made the following
statement on the passage of the Internet tax moratorium bill:
"We are very pleased that Congress has passed a bill that extends the Internet tax
moratorium. The government should be promoting Internet usage and availability, not
discouraging it with access taxes or discriminatory taxes. This two-year extension will provide
additional time to analyze the impact of e-commerce on local and State tax receipts, while
ensuring that the growth of the Internet is not slowed by new taxes."
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Contact: Betsy Holahan
(202) 622-2960
For Immediate Release
November 16,2001
Treasury Department To Offer "Patriot Bonds"
The Treasury Department will designate Series EE savings bonds sold through financial
institutions as "Patriot Bonds," beginning in mid-December. The funds raised by the bonds,
while not earmarked for a specific purpose, will contribute to the federal government's overall
effort to fight the war on global terrorism.
Series EE savings bonds sold through financial institutions will be specially inscribed with the
legend "Patriot Bond." The legend also will appear on Series EE bonds available at the Bureau
of the Public Debt's Savings Bond Direct website (www.savingsbonds.gov).
Series EE savings bonds, earn 90 percent of 5-year Treasury securities yields. The current rate in
effect through April 2002 is 4.07 percent. The bonds sell as half face value and are available in
denominations of $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000.
Series EE bonds increase in value monthly and interest is compounded semiannually. Interest is
exempt from state and local income taxes and federal tax can be deferred until the bond is
redeemed or it stops earning interest at 30 years. Bonds can be redeemed anytime after six
months. A 3-month interest penalty is applied to bonds redeemed before five years.
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EMBARGOED UNTIL 5:45 P.M. EST
November 17,2001
Contact: Tony Fratto
(202 622-2960
Statement by U.S. Treasury Secretary Paul O'Neill
to the International Monetary and Financial Committee
Ottawa, Canada
I am glad that the IMFC is meeting today. I thank the people of Canada for generously
hosting this meeting. The international community must take strong steps to stop terrorist
financing. We also must take concrete actions to strengthen the world economy.
Combating Terrorist Financing
The tragic events of September 11 Ih have made clear the pressing need to eliminate the
flow of funds that finance global terror. Severing the links that allow terrorists to finance their
lethal acts is of the highest priority.
Cooperation in this effort is crucial. Many countries have taken on this challenge, and
taken steps to freeze terrorist assets. But this is an area where every nation needs to act so there
is no safe harbor, anywhere, for terrorist funds. We need to work together to implement United
Nations resolutions to block the financing of terrorist networks, freeze terrorist assets, and
criminalize the collection of funds for terrorism.
It is clear that terrorism poses a threat to the world financial system, and the IMF must
take on an expanded role in the global effort to combat the financing of terrorism, as well as in
the efforts to fight money laundering. The IMF should immediately step up its efforts to assess
countries' adherence to the anti-money laundering standard developed by the Financial Action
Task Force. It should put greater emphasis on terrorist financing in its financial sector
assessments and it should enhance its analytical work on alternative payments and remittances
systems, including hawala and non-regulated financial systems more generally.
World Economy
The world is now confronting a marked slowdown in the global economy. The terrorist
attacks exacerbated a downturn already taking place in a number of economies. It is imp0l1ant
that each of us commit ourselves to take measures, consistent with our own circumstances, to
restore strong and vibrant global growth.
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The United States is doing its part. The U.S. economy began slowing in the summer of
2000 and this weakness extended through the first half of this year. Prior to September 11, the
economy was moving forward at a slow, positive rate. Prospects for the resumption of strong
growth were good, reflecting in large measure the tax rate cuts and rebates enacted this spring as
well as the aggressive lowering of interest rates by the Federal Reserve.
The terrorist attacks set off disruptions that quickly swept through our economy. These
will delay recovery. Nonetheless, the consensus forecast now anticipates that economic recovery
will be visible early next year. The Federal Reserve has taken timely action, and the Congress
and the Administration are working together on an economic growth package. The fundamental
strengths of the U.S. economy - our strong macroeconomic foundations and our dynamic and
flexible labor and capital markets - remain intact. The enactment of Trade Promotion Authority
will help greatly by restoring confidence and by opening export opportunities.
Promoting a strong global economy should be one of the IMFC's paramount objectives.
Countries' policies must be adapted to the particular situation of each country. But the basic
direction of all our policies should be to support growth.
IMF Reform
This weekend we are rightly concentrating on strengthening the world economy and
combating terrorist financing. But this should not detract us from concerted efforts to reform the
IMF so that it becomes an organization more consistently associated with success. The IMF
should focus on its core areas of monetary policy, fiscal policy, exchange rate policy, and
financial markets.
Improving the IMF's ability to monitor financial developments must continue to be a
central focus. The IMF needs to sharpen its capacity to detect potential trouble on the horizon,
be willing to warn countries that are heading down a dangerous path, and take appropriate action.
The IMF also needs to develop better mechanisms to resolve financial crises that occur when
IMF programs are already in place.
When the IMF lends, it must be selective and make sure that the preconditions for
success are there. Countries should expect to be held to their commitments.
Finally, the IMF has a critical role to play. Meeting in the current circumstances, as the
world seeks to confront the challenge of global terrorism, is itself a strong signal. I am confident
that we will emerge with a common commitment for each of us to do what we need to do to
support the resumption of growth, and to cut off the financing of terrorism. Thank you.
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EMBARGOED UNTIL 5:45 P.M. EST
November 17,2001
Contact: Tony Fratto
(202) 622-2960
Statement by U.S. Treasury Secretary Paul O'Neill
Ottawa, Canada
First let me thank the people of Canada for generously hosting this weekend's meeting.
Joining the G-20 meetings with the IMFC and Development Committee meetings is an unusual
circumstance, and a testament to the determination of the global community to move forward
together in this critical time. We've had productive discussions advancing the coordination of
the international community in pursuit of terrorist financing. We also agreed that each member
nation must take concrete actions to strengthen the world economy.
The September 11 th attacks have made clear the pressing need to eliminate the flow of
funds that finance global terror. Every nation must act so there is no safe harbor, anywhere, for
terrorist funds. I am very pleased that the G-20 nations adopted an Action Plan of specific steps
in the fight against the financing of terrorism. We committed to share information, to freeze the
assets of terrorists and to make public the lists of terrorist whose assets are subject to freezing
and the amount of assets frozen. I also urged that the IMF expand its role in combating the
financing of terrorism, as well as in the efforts to fight money laundering.
The world is now confronting a marked slowdown in the global economy. Promoting a
strong global economy should be a paramount objective of every nation. Countries' policies
must be adapted to the particular situation of each country. But the basic direction of all our
policies should be to support growth. I found the informal bilateral meetings this weekend
particularly useful on this topic.
The United States is doing its part. The U.S. economy began slowing in the summer of
2000. Prior to September 11, prospects for the resumption of strong growth were good,
reflecting in large measure the tax rate cuts and rebates enacted this spring as well as the
aggressive lowering of interest rates by the Federal Reserve. The terrorist attacks disrupted our
recovery. I believe growth will be visible early next year. The Federal Reserve has taken timely
action, and the Congress and the Administration are working together on an economic growth
package. The fundamental strengths of the U.S. economy remain intact. The enactment of
Trade Promotion Authority will help greatly by opening export opportunities.
PO-80S
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Finally, this weekend we are continuing our concerted efforts to refonn the IMF so that it
becomes an organization more consistently associated with success. Improving the IMF's ability
to monitor financial developments must continue to be a central focus.
We will emerge from this weekend's gathering with a common commitment for each of
us to do what we need to do to support the resumption of growth and to cut off the financing of
terrorism. Thank you.
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Co LVIlVIUNI QUE
G-20
FINAl~CE MINISTERS Al,{D CENTRU BANK GOVERNORS
We, the Finance IvIinisters and Central Banle Governors of the G-20, held our third
meeting today in Ottawa, Ontario, Canada against the backdrop of a global economic slowdown
whose effects have been exacerbated by the tragic events of September 11 t\ 2001.
The barbarous attacks on the United States were attacks on all of us intended to shake
global economic confidence and security. We will ensure that these efforts fail.
We are committed to combating terrorism by cutting off its financial sources. There
should be no safe havens for the financing of terrorism. To this end, we have agreed on an
Action Plan to deny terrorists and their associates access to our financial systems. We call on
other countries to take similar steps.
We are confident that the attacks of September 11 will not undermine our future
economic prospects. We have taken policy actions to maintain liquidity and stabilize markets.
We stand ready to take additional actions as necessary. These measures will provide the
foundation for an early resumption of growth without undermining our future economic
prospects. We agreed that heightened security measures should be implemented in a manner that
facilitates the cross-border flow of legitimate trade in goods and services. 'vVe reafflrm our
commitment to free trade and open international markets as a key source of global prosperity. In
this context, we welcome the Doha Development Agenda agreed to at the WTO Ministerial
Conference launch of a new INTO trade round and commit to work together to achieve
multilateral trade liberalisation that accelerates progress against poverty and promotes growth.
The reduction of capital Hows to emerging markets underscores the need for sound
policies to provide and to maintain a positive investment environment in member countries. We
remain committed to this endeavour. Adopting the best practices embodied in international
standards and codes also will help support strong, stable growih and reduce the risk of future
tinancial crises. A majority of G-20 members have already participated. on a voluntary basis, in
assessments under one or both of the IlvIFiWorld BanJ::-kd Financial Sector Assessment Program
(FSAP) and Reports on Observances with Standards and Codes (ROSes) consistent with our
undertaking at our inaugunJ meeting in Berlin in December 1999. \Ve will continue to promote
adoption of intemational standards and codes for transparency, macroeconomic policy, sOLlnd
financial sector regulation and corpor-::ne govemance in consultation as appropriate witb relevant
international bodies and \vith the private sector, and thereby strengthen the integrity 0 f tbe
international financial system.
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We will continue our work on appropriate exchange rate regimes, prudent liability
management, and orderly liberalization of the capital account.
These efforts reduce
susceptibility to financial crises.
Borrowing countries, creditors and the international community have a common interest in
efficient and well-functioning international capital markets. We would welcome the earliest
possible resolution of Argentina's debt problem. We recognize that lenders are increasingly
differentiating between different international borrowers, be they private or sovereign. Good
communication between borrowers and their creditors can play an important role in sustaining
capital flows to emerging markets. Building on the recent G-20 Roundtable with private sector
representatives on promoting efficient international capital markets, we have asked our Deputies
to report to our next meeting on improving the way financial crises are resolved, taking into
account the lessons learned from experience in emerging markets. A common objective is to
reduce uncertainty and ensure the sustainability of capital flows to emerging markets.
We recognize that the world's poorest and most vulnerable are facing acute challenges in
the midst of the global economic slowdown, in particular the increased uncertainty resulting from
the terrorist attacks. We look forward to participating constructively in the International
Monetary and Finance Committee and Development Committee meetings with a view to
ensuring that appropriate international support is available to complement the sound national
policies needed to generate economic recovery in those countries most affected.
Building on our discussion at our last meeting in Montreal, we reviewed our experiences
in responding to the challenges of globalization. We agreed that greater economic integration
has led to demonstrable improvements in living standards for the vast majority of our citizens.
The G-20 and other countries that have integrated into the global system have in general made
significant progress in raising real incomes and reducing poverty. But globalization also poses a
number of challenges and risks, which call for enhanced international co-operation. We
recognise the need to work with the international financial institutions and World Trade
Organisation to ensure that the benefits of globalisation are shared by a11, including the poorest
countries. To obtain the full benefits of globalization, our governments have a critical role in
creating well-developed domestic institutions, good governance and sound domestic
macroeconomic, social, and structural policies. As reflected in the Montreal Consensus, by
sustaining such policies we ensure that our economies are better able to maximize the
contribution of open markets to growth, equity, and well-being for all our peoples.
We accepted the generous invitation of India's Finance Minister Sinha to hold our 2002
meeting in New Delhi.
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G-20 ACTION PLAN ON TERRORIST FINANCING
We, the Finance NIinisters and Central Bank Governors of the G-20, in the name of
global peace and security, are determined to stop the financing of terrorism. The fight against
terrorist financing is a shared responsibility of the G-20 and the broader international
community. We have therefore adopted today a comprehensive Action Plan of multilateral
cooperation to deny terrorists and their associates access to, or use of, our iinancial systems, and
to stop abuse of informal banking networks.
We will implement quickly and decisively measures that the United Nations have
identified as essential to combating terrorist financing. We will block terrorists' access to our
financial system. We will work with the International Financial Institutions (IFls), the Financial
Action Task Force on Money Laundering (FATF), the Financial Stability Forum (FSF) and other
relevant international bodies to prevent abuses to the fmancial system and threats to its integrity
through the promotion of international standards relevant to terrorist fmancing, money
laundering and financial sector regulation and supervision. We welcome the conclusions of the
recent FATF extraordinary plenary on terrorist financing. Above all, we will enhance our ability
to share information domestically and internationally as a vital component in the fight against
terrorism.
We encourage all nations to join the international dIort to choke off the financing of
terrorism. Where a country's willingness outstrips its ability to act in concert with us, we will
provide technical assistance in accordance with this Action Plan.
In pursuing these commitments, we have agreed to the following concrete steps:
Freezing Terrorist Assets
•
Each G-20 member will implement the relevant UN Security Council Resolutions,
particularly UNSeR 1373, to stop the financing of terrorism.
"
To this end, each G-20 member will, within its jurisdiction, freeze the assets of terrorists and
their associates and close their access to the international fmancial system.
~
Each G-20 member will, consistent with its laws, make public tbe lists of terrorists whose
assets are subject to freezing, and the amount of assets frozen, if any.
impRementation of International Standards
~
Each G-20 member will ratify and implement the lJN Convention for the Suppression of the
Financing of Terrorism as soon as possible.
~
Each G-20 member will ratify the UN Convention against Transnational Organized Crime.
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•
We will work co-operatively and in collaboration with the International Monetary Fund
(IMF) and World Bank, FATF, FSF, Basle Committee of Banking Supervisors (BCBS), and
other relevant international bodies to promote the adoption, implementation, and assessment
of international standards to combat the abuses of the financial system, including in respect
of terrorist financing, financial regulation, and money laundering. We welcome FATF' s
offer to work collaboratively with us in implementing eight special recommendations on
terrorist financing.
International Cooperation: Exchange of Information and Outreach
•
We will enhance our cooperation on the international exchange of information, including
regarding actions taken under UN resolutions. G-20 member countries will promptly
implement such measures as are necessary to facilitate this exchange.
•
Each G-20 member will establish promptly, or maintain, a Financial Intelligence Unit and
will take steps to enhance information sharing among them, including through promoting
universal participation in the Egmont Group of such units.
•
We will promote the fight against terrorist financing within our respective regions, and will
ask other countries to join this Action Plan.
•
An important element of this effort is the work of the regional FATF -style anti-money
laundering bodies. Accordingly, the G-20 calls on these regional bodies to meet promptly
and to expand their mandates to include terrorist financing.
Technical Assistance
•
We are committed to providing, where possible, technical assistance to countries that need
help in developing and implementing necessary laws, regulations and policies to combat
terrorist financing and money laundering.
•
We call on the International Monetary Fund, the World Bank, and other multilateral and
regional organizations to provide technical assistance, including by expanding existing
programs and training centres.
Compliance and Reporting
•
To promote implementation and compliance with international standards, and to share
information regarding our respective laws, regulations, and best practices to address terrorist
financing, we will support the activities of the UN Counter-Terrorism Committee. We will
also actively support surveillance and voluntary self-assessment through the IFls, FATF and
relevant international bodies.
•
We will respond positively to the FATF's invitation to participate in a self-assessment of the
eight special recommendations on terrorist financing.
•
We encourage the FSF to undertake work respecting the actions of financial sector regulators
in the fight against terrorism at its next meeting.
•
We will ensure that our financial institutions and citizens comply with measures to combat
the financing of terrorism and other financial crimes, and will assist them to do so, including
through informing financial institutions of their obligations and new developments.
•
We urge the regional F ATF -style bodies to actively contribute to the F ATF's worldwide selfassessment program.
•
We will review our progress on this action plan at our next Ministerial meeting.
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EMBARGOED UNTIL 11: 30 A.M.
November 19, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $23,000 million
to refund an estimated $8,000 million of publicly held 4-week Treasury bills
maturing November 23, 2001, and to raise new cash of approximately $15,000
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 $11,020 million of the Treasury bills
maturing on November 23, 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%.
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
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HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED NOVEMBER 23, 2001
November 19, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . $23,000 million
Public Offering . . . . . . . . . . . . . . . . . . . . . $23,000 million
NLP Exclusion Amount . . . . . . . . . . . . . . . . $8,900 million
Description of Offering:
Term and type of security ........... 27-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . 912795 HY 0
Auction date . . . . . . . . . . . . . . . . . . . . . . . . November 20,2001
Issue date . . . . . . . . . . . . . . . . . . . . , ..... November 23,2001
Maturity date . . . . . . . . . . . . . . . . . . . . . , . December 20,2001
Original issue date . . . . . . . . . . . . . . . . . June 21,2001
Currently outstanding . . . . . . . . . . . . . . . $35,237 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 non-competitive 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 (NLP) 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.
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November 20, 2001
Contact Tony Fratto
(202) 622-2960
AFGHANISTAN RECONSTRUCTION AND DEVELOPMENT MEETING
SECRET ARY O'NEILL
OPENING REMARKS
Welcome. Thank you for coming on such short notice to this important meeting.
President Bush is eager that we develop a strategy for rebuilding Afghanistan once our military
efforts there have succeeded. This meeting and your presence here demonstrate the commitment
of the international community to the people of Afghanistan, and to all people that are suffering
from the impacts of war on terrorism.
The focus of our attention today is Afghanistan, but in reality our goals extend much
more broadly. The impacts of terrorism extend to many countries. As we discuss strategies for
laying the foundation for a more prosperous and peaceful Afghanistan, we should remember
those in other countries that will also need our support. This is especially true of some of
Afghanistan's nearest neighbors. Success in the war on global terrorism requires strong and
sustained efforts from all of us on many different fronts, including providing meaningful
economic opportunities for citizens of the most affected countries. It will take all of us working
together to be successful, and I thank all of you for your contribution in this effort.
Together we face a daunting task: to help rebuild Afghanistan from years of neglect and
mismanagement. Afghanistan today is one of the poorest countries in the world:
•
•
•
•
Annual income averages less than $200 per person.
One out of six children die before their first birthday.
Two-thirds of the population are not literate.
Only 13% of the population have immediate access to drinking water, and not all of that
water is safe to drink.
The first challenge, of course, is direct humanitarian assistance. The UN, under the strong
leadership of the Secretary-General and with the able assistance of Mr. Oshima and Mr. Brahimi,
is off to a tremendous start in providing immediate assistance to the people of Afghanistan. We
owe them our gratitude.
PO-809
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·U.S Govemment Pnntlng Office 1998· 619·559
A second challenge will be restoring essential services and reintegrating refugees back into
their communities, just so people re-establish normal lives in their communities with their family
and friends. We will need to focus on ways to help people to:
•
•
•
•
generate basic levels of income;
provide essential health and education services;
improve food security; and
undertake emergency infrastructure repairs.
But even then our task will not be over. It will not be enough to restore Afghanistan to where
it was one year, five years, or even twenty years ago. Ifwe wish to see a more vibrant, peacefuL
and successful Afghanistan, we must meet a third challenge: we must assist the Afghan people in
laying the foundation for a basic market economy and for sustained economic development. The
critical elements will be:
•
•
•
•
A stable macroeconomic and political environment;
substantial investments in health and education;
strong government institutions; and
a robust and productive private sector, open to global trade and investment.
In particular, we should try to assist the Afghan people to allow them to live productive and
successful lives. This means, for example:
•
•
improving the infrastructure and services needed to create a vibrant rural economy -- one that
gives poor farmers a viable option to growing poppies.
building or rebuilding schools and health care facilities so Afghans can lead healthy,
meaningful lives.
This is our focus here today. I am hopeful that today we can establish a process that provides
appropriate policy guidance to those actually delivering reconstruction assistance on the ground.
As we go forward, it will be crucial for us to continuously measure the results and reassess the
assistance we are providing to make sure it is as effective as possible in meeting Afghanistan's
most important needs. External assistance poorly directed and poorly coordinated can be not only
wasteful but can be harmful as well. That is why the process initiated today is so impOliant.
It is extremely important that we place a special focus on strengthening basic education,
especially of young girls and women. We will not be successful unless Afghanistan'S recovery
and development is for all of its people.
Our goal is a more peaceful and prosperous world for all people of all faiths and nationalities.
Achieving this goal will require a long-term, sustained commitment from all of us. This
gathering is just the first step in that process. I thank you for joining us in this endeavor.
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November 18,2001
Contact: Tony Fratto
(202) 622-2960
STATEMENT OF TREASURY SECRETARY PAUL O'NEILL
AT THE DEVELOPMENT COMMITTEE lVIEETING
Ottawa, Canada
The United States is committed to increasing opportunities for people in the developing
world to create a decent living for themselves and their families. As President George W. Bush
has said: "A world where some live in comfort and plenty, while half of the human race lives on
less than $2 a day is neither just, nor stable." The international community does not have all the
answers. But it can do a better job by learning from its successes and its failures. It must also
think more innovatively about solutions to basic development problems.
Global terrorism is a serious threat to the very foundations of our economies and
societies. We appreciate the commitment of the World Bank and its regional affiliates to support
international efforts to prevent funds inadvertently going to terrorists. However, more remains to
be done to strengthen due diligence procedures for monitoring their own and borrower use of
funds and to provide technical assistance to help countries put in place needed regulations and
institutions. These crucial areas require priority attention and action.
Both the emerging economies and the poorest countries are enduring the adverse impact
of the global slowdown. Their economic recovery will depend primarily on their following
sound national policies. Rising productivity has been the driving force behind increases in
economic growth and rising per capita income throughout history. Countries that have been
successful consistently make wise policies choices that energize the private sector and prioritize
human capital development to improve productivity and growth.
Prudent monetary and fiscal policies will lay the foundation for economic activity and a
flourishing private sector. Good governance and a competent public administration that
promotes the rule of law, enforceable contracts, and other conditions necessary to encourage an
entrepreneurial culture are also necessary. Basic social services such as health and education are
also vital to enabling any population to participate in and contribute to economic growth.
Many developing countries have already recognized that it is in their interest to
implement these policies. In doing so, they discourage capital flight and nurture domestic
savings and investment, the indispensable ingredients for development and growth. They also
position themselves to attract resources from abroad when investor confidence rebounds.
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,
,
·U.S Govemment PrintIng Office 1998· 619·559
2
Without stronger private-sector led economies that can generate the employment and tax
revenues needed to support crucial public expenditures, countries will never achieve the
sustainable growth and poverty reduction they seek. This is the message that the Development
Committee should send to the UN Financing for Development Conference, which will convene
next year in Mexico.
The World Bank Group is well equipped to help its developing member countries to
follow this path. To maximize the development effectiveness of its resources, the Bank must be
more selective in focusing them on countries that demonstrate -- not just commit to -- sound
policy actions and on efforts to directly boost productivity and raise the living standards of their
people.
We urge the Bank Group to focus its efforts on helping its clients to diversify the sources
of their growth, promote accountable governance, raise human productivity, and expand the
access of the poor to physical infrastructure, new productive teclmologies, and social services.
The Bank must also be rigorous in measuring the results of its assistance.
The Bank should dramatically increase the share of its funding provided as performance
based grants to the poorest and least creditworthy countries for education, health, nutrition, water
supply, sanitation and other human needs. Many development loans that have important longterm economic benefits will take years to generate the resources necessary to cover the resulting
debt service. Low-income countries are also highly vulnerable to economic shocks and natural
disasters over the repayment period of traditional loans. I believe that the economic impact of
the global slowdown make it even more imperative to move soft loan multilateral development
bank lending toward grants. The financial implications of a switch to grants are relatively
modest and phase in over time. Lost revenues to creditors, of course, directly translate into
benefits for the poorest countries.
With regard to the three agenda items on which Ministers are invited to comment:
The ultimate success of the HIPC Initiative will depend not on the number of
beneficiaries or the level of debt relief they receive, but rather by the extent to which such relief
contributes to measurable gains in human development and poverty reduction. Quality of effort,
rather than speed, in extending debt relief is of the essence. We should support ongoing debt
sustainability by providing new assistance on appropriate tenns, including the increased use of
grants.
Hannonization of Operational Policies and Procedures
The MDBs need to do a better job of coordinating among themselves and ensuring that
their own internal governance and operations are transparent. The administrative overload on
borrowers can be reduced by harmonizing donor policies to the highest appropriate standard.
For the MDBs, the most immediate priority should be to adopt unifol111 but best practice
3
standards to safeguard the use of MDB resources. And they should assist borrowing countries in
strengthening their administrative capacity to adhere to these standards.
Progress for Education for All
Literacy and learning are the foundation of democracy and development. Quality
education empowers the individual and will yield major dividends in terms of better health and
greater productivity. The Bank's progress report underscores the huge challenges entailed in
expanding educational access. The situation is worsening as the developing countries,
particularly in Africa, lose teachers to the HIV/ AIDS epidemic at an alarming rate. Hopefully,
the Global Fund for AIDS, TB and Malaria will soon begin to reverse the spread of AIDS. I look
forward to discussing a coherent donor education plan, and an expanded World Bank role in this
area, at our next Committee meeting.
I
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U.S. International Reserve Position
11/20/01
The Treasury Department today released U.S. reserve assets data for the week ending November 16, 2001. As indicated in
resenre assets totaled $69,183 million as of November 16, 2001, down from $69,815 million as of
this table,
November 9, 2001.
u.s.
n
us millions)
TOTAL
Foreign Currency Reserves
a.. Securities
I
1
November 16, 2001
69,183
November 9, 2001
69,815
Official U.S. Reserve Assets
Euro
5,517
Yen
11,584
TOTAL
Euro
17,100
5,444
Yen
TOTAL
10,459
15,902
o
o
Of which, issuer headquartered in the U. S.
b. Total deposits with:
b.i. Other central banks and BIS
b.ii. Banks headquartered in the U.S.
b.ii. Of which, banks located abroad
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)
30ld Stock
3
)ther Reserve Assets
2
9,217
4,122
13,339
0
0
9,135
4,937
0
0
0
0
0
0
17,407
17,304
10,924
10,860
11,045
11,045
0
0
Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
OfVIA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
posits reflect carrying values.
The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SORs)," are based on data provided by the IMF and are valued in
lar terms at the official SOR/doliar exchange rate for the reporting date. The IMF data for November 9 are final. The entries in the table
we for November 16 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's
:: data.
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
, $11,044 million.
811
14,072
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
November 9,2001
1. Foreign currency loans and securities
November 16, 2001
o
o
o
o
o
o
o
o
2. Aggregate short and long positions in fOlWards 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
November 9, 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
i.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.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.
t 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
November 16, 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
FOR IMMEDIATE RELEASE
November 20, 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:
27-Day Bill
November 23, 2001
December 20, 2001
912795HYO
2.000%
Investment Rate 1/:
2.031%
Price:
99.850
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted
9.91%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
Federal Reserve
TOTAL
Accepted
Tendered
$
51,386,500
28,608
$
22,971,412
28,608
o
o
51,415,108
23,000,020
753,921
753,921
52,169,029
$
23,753,941
Median rate
1.985%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.940%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 51,415,108 / 23,000,020 = 2.24
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
PO-S12
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FOR llvINIEDIATE RELEASE
November 20,2001
CONTACT: Betsy Holahan
202-622-2960
Treasury Announces Interim Guidance
On Compliance with the USA PATRIOT Act
The Treasury Department today announced interim guidance for banking institutions on
how they may comply with two anti-money laundering provisions of the USA PATRIOT Act
that become effective on December 25,2001.
Beginning on that date, banking institutions in the United States will be prohibited from
providing correspondent accounts directly to foreign shell baru(s and will be required to take
steps to avoid using correspondent accounts to provide banking services indirectly to such shell
baru(s. In addition, banking institutions wi11 be required to keep records of the owners of foreign
baru(s to which they provide cOlTespondent accounts and the foreign baru(s' agents for service of
legal process.
After consultation with the federal financial regulators, the Secretary of the Treasury is
publishing in the Federal Register a model certifIcation that U.S. banking institutions may
choose to use as an interim means to assist them in meeting their obligations related to dealing
with foreign shell banks under 31 U.S.c. 5318(j) and recordkeeping under 31 U.S.c. 5318(k).
It is the expectation of the Department of the Treasury that banking financial institutions
will accord priority to meeting their compliance obligations in cormection with foreign baru(s for
which they maintain correspondent deposit accounts or their equivalents.
The interim guidance will remain in effect until superseded by regulation or subsequent
guidance.
The Treasury Department intends to issue expeditiously a proposed rule that would also
prohibit broker-dealers from maintaining accounts \vith foreign shell banks and from using
accounts to provide banking services indirectly to such shell banks. Treasury also intends to
propose a rule requiring broker-dealers to keep records of the owners of foreign banks to which
they provide accounts and the foreign bank:s' agents for service of legal process.
A linl.;: to the interim guidance can be found on the Treasury Dcpa11ment's web site
(wVvw.treas.gov,'press/)
-30-
PO-S13
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·U.S Govemment Pnntlng Office 1998· 619·559
[Billing Code: 4810-25]
DEPARTlVIENT OF THE TREASURY
Departmental Offices
Interim Guidance Concerning Compliance by Covered U.S. Financial Institutions with
New Statutory Anti-Money Laundering Requirements Regarding Correspondent Accounts
Established or Maintained for Foreign Banking Institutions
AGENCY: Department of the Treasury, Departmental Offices
ACTION: Notice.
SUMMARY: This notice provides interim guidance to financial institutions on how to comply
with the requirements of sections 313 and 319(b) of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act
of 200 1 (Pub. L. 107-56). These anti-money laundering provisions concern the relationship
between U.S. financial institutions and foreign banking institutions.
DATES: This notice is effective beginning [INSERT DATE OF PUBLICATION IN THE
FEDERAL REGISTER] and will remain in effect until superseded by regulations or a
subsequent notice.
FOR FURTHER INFORlVIATION CONTACT: Gary W. Sutton, Senior Banking Counsel,
Office of the Assistant General Counsel (Banking and Finance), 202-622-1976 or vVilliam D.
Langford, Attorney-Advisor, Office of the Assistant General Counsel (Enforcement), 202-6221932.
SUPPLEMENTARY INFOAAIATION: This notice provides interim guidance to U.S.
financial institutions on the steps necessary for them to comply with the requirements of 31
U.S.c. 5318(j) and (k), as enacted by sections 313 and 319(b) of the USA PATRIOT Act of
-1-
2001, respectively. Although this notice may be relied upon by financial institutions until
superseded by regulations or a subsequent notice, no inference may be drawn from this notice
concerning the scope and substance of regulations that the Department of the Treasury will issue
concerning sections 5318(j) and (k).
I. Background
A. Statutory Background
On October 26, 2001, the President signed into law the USA PATRIOT Act. Title III of
the USA PATRIOT Act makes a number of amendments to the anti-money laundering provisions
of the Bank Secrecy Act (BSA), which is codified in subchapter II of chapter 53 of title 31,
United States Code. These amendments are intended to make it easier to prevent, detect, and
prosecute international money laundering and the financing of terrorism. Two of these
provisions become effective on December 25,2001.
First, section 313(a) of the USA PATRIOT Act adds a new subsection (j) to 31 U.S.c.
5318 that prohibits certain financial institutions from providing correspondent accounts to
foreign Ashell banks=: and requires those financial institutions to take reasonable steps to ensure
that correspondent accounts provided to foreign banks are not being used to indirectly provide
banking services to foreign Ashell banks.=: Second, section 319(b) of the USA PATRIOT Act
adds a new subsection (k) to 31 U.S.C. 5318 that requires certain financial institutions that
provide correspondent accounts to a foreign bank to maintain records of the foreign bank=s
owners and agent in the United States designated to accept service of legal process.
Under the USA PATRIOT Act, the Secretary of the Treasury (Secretary) is authorized to
interpret and administer these provisions. In light of the December 25,2001 effective date of
-2-
2001, respectively. Although this notice may be relied upon by financial institutions until
superseded by regulations or a subsequent notice, no inference may be drawn from this notice
concerning the scope and substance of regulations that the Department of the Treasury will issue
concerning sections 5318(j) and (k).
I. Background
A. Statutory Background
On October 26, 2001, the President signed into law the USA PATRIOT Act. Title III of
the USA PATRIOT Act makes a number of amendments to the anti-money laundering provisions
of the Bank Secrecy Act (BSA), which is codified in subchapter II of chapter 53 of title 31,
United States Code. These amendments are intended to make it easier to prevent, detect, and
prosecute international money laundering and the financing of terrorism. Two of these
provisions become effective on December 25,2001.
First, section 3 13 (a) of the USA PATRIOT Act adds a new subsection (j) to 31 U.S.c.
5318 that prohibits certain financial institutions from providing correspondent accounts to
foreign Ashell banks=: and requires those financial institutions to take reasonable steps to ensure
that correspondent accounts provided to foreign banks are not being used to indirectly provide
banking services to foreign Ashell banks.=: Second, section 319(b) of the USA PATRIOT Act
adds a new subsection (k) to 31 U.S.c. 5318 that requires certain financial institutions that
provide correspondent accounts to a foreign bank to maintain records of the foreign bank=s
owners and agent in the United States designated to accept service of legal process.
Under the USA PATRIOT Act, the Secretary of the Treasury (Secretary) is authorized to
interpret and administer these provisions. In light ofthe December 25, 2001 effective date of
-2-
2001, respectively. Although this notice may be relied upon by financial institutions until
superseded by regulations or a subsequent notice, no inference may be drawn from this notice
concerning the scope and substance of regulations that the Department of the Treasury will issue
concerning sections 5318(j) and (k).
I. Background
A. Statutory Background
On October 26, 2001, the President signed into law the USA PATRIOT Act. Title III of
the USA PATRIOT Act makes a number of amendments to the anti-money laundering provisions
of the Bank Secrecy Act (BSA), which is codified in subchapter II of chapter 53 of title 31,
United States Code. These amendments are intended to make it easier to prevent, detect, and
prosecute international money laundering and the financing of terrorism. Two of these
provisions become effective on December 25, 2001.
First, section 313(a) of the USA PATRIOT Act adds a new subsection (j) to 31 U.S.c.
5318 that prohibits certain financial institutions from providing correspondent accounts to
foreign Ashell banks= and requires those financial institutions to take reasonable steps to ensure
that correspondent accounts provided to foreign banks are not being used to indirectly provide
banking services to foreign Ashell banks.= Second, section 319(b) of the USA PATRIOT Act
adds a new subsection (k) to 31 U.S.C. 5318 that requires certain financial institutions that
provide correspondent accounts to a foreign bank to maintain records 0 f the foreign bank=s
owners and agent in the United States designated to accept service of legal process.
Under the USA PATRIOT Act, the Secretary of the Treasury (Secretary) is authorized to
interpret and administer these provisions. In light of the December 25,2001 effective date of
-1-
sections 5318(j) and (k), the Secretary, in consultation with the federal financial regulators I and
the Attorney General, is publishing this notice to provide interim guidance to financial
institutions in meeting their compliance obligations under these provisions. As discussed below,
this notice describes a certification that financial institutions may use as an interim means to
assist them in meeting their obligations related to dealing with foreign shell banks under section
5318(j) and recordkeeping under section 5318(k). It should be noted that this certification will
not satisfy a financial institution=s obligations under any other provisions of the USA PATRIOT
Act, including obligations to conduct due diligence under 31 U .S.c. 5318(i), as added by section
312 of the USA PATRIOT Act, or any other applicable law or regulation.
Although the prohibition in section 5318(j) becomes effective on December 25,2001, the
Department of the Treasury expects that covered financial institutions will promptly tenninate
any correspondent account with any foreign bank that it knows to be a shell bank that is not a
regulated affiliate as described in this notice.
1. What are the requirements of section 5318(j)?
31 U.S.c. 5318(j), as added by section 313 of the USA PATRIOT Act, provides that a
Acovered financial institution:=:: shall not establish, maintain, administer, or manage a
correspondent account in the United States for, or on behalf of, a foreign bank that does not have
a physical presence in any country (shell banle). In addition, the USA PATRIOT Act requires a
covered financial institution to take reasonable steps to ensure that any correspondent account
established, maintained, administered, or managed by the covered financial institution in the
The Office of the Comptroller of the Currency, the Office of Thrift Supervision. the Board of Govcmors of the Federal
Reserve System, the Federal Deposit Insurance Corporation. thc Commodities Futures Trading Conmussion, and the
Securities and Exchange Commission.
I
-3-
United States for a foreign bank is not being used by that foreign bank to indirectly provide
banking services to a foreign shell bank that is not a regulated affiliate.
What is a covered financial institution?
For purposes of section 5318(j), a Acovered financial institution~ is: (1) any insured bank
(as defined in section 3(h) of the Federal Deposit Insurance Act (12 U.S.c. 1813(h»)); (2) a
commercial bank or trust company; (3) a private banker; (4) an agency or branch of a foreign
bank in the United States; (4) a credit union; (5) a thrift institution; or (6) a broker or dealer
registered with the Securities and Exchange Commission under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.).
What is aforeign shell bank?
For purposes of section 5318(j), a foreign shell bank is a foreign bank without a physical
presence in any country. Under section 5 318(j), a Aphysical
presence~
is a place of business that
is maintained by a foreign bank and is located at a fixed address, other than solely an electronic
addrp.ss, in a country in which the foreign bank is authorized to conduct banking activities, at
which location the foreign bank: (1) employs one or more individuals on a full-time basis; (2)
maintains operating records related to its banking activities; and (3) is subject to inspection by
the banking authority that licensed the foreign bank to conduct banking activities.
What foreign shell banks are excepted from the limitations 011 correspondent accoullts?
The limitations on the direct and indirect provision of cOlTespondent accounts to foreign
shell banks do not apply to a foreign shell bank that is a regulated affiliate. A regulated affiliate
is a foreign shell bank that (1) is an affiliate of a depository institution, credit union, or foreign
-4-
bank that maintains a physical presence in the United States or a foreign country, as applicable;
and (2) is subject to supervision by a banking authority in the foreign country regulating such
affiliated depository institution, credit union, or foreign bank. An affiliate is a foreign bank that
is controlled by or is under common control with a depository institution, credit union, or foreign
bank.
What is a correspondent account?
31 U.S. C. 53 18A( e)(1 )(B), as added by section 311 of the USA PATRIOT Act, defines
Acorrespondent
account,~
with respect to banking institutions, as Aan account established to
receive deposits from, make payments on behalf of a foreign financial institution, or handle other
financial transactions related to such
institution.~
This definition applies for purposes of this
notice and the certification.
It is the expectation of the Department of the Treasury that a covered financial institution
will accord priority to requesting certifications in connection with foreign banks for which it
maintains correspondent deposit accounts or their equivalents.
The Department of the Treasury intends to issue a rule under the authority of section
5318A(e)(2) and (4), as added by section 311 of the USA PATRIOT Act, to further define the
term Aaccount~ (l) to prohibit non-bank covered financial institutions (including a broker or
dealer registered with the Securities and Exchange Commission under the Securities Exchange
Act of 1934) from establishing or maintaining an account for a foreign shell bank that is not a
regulated affiliate and (2) to require non-bank covered financial institutions to take reasonable
steps to ensure that any account established, maintained, administered, or managed by such
institution in the United States for a foreign bank is not being llsed by that foreign bank to
indirectly provide banking services to a foreign shell bank that is not a regulated affiliate.
-5-
2. What are the requirements of section 5318(k)'?
31 U.S.C. 5318(k), as added by section 319(b) of the USA PATRIOT Act, requires,
among other things, that any covered financial institution that maintains a cOlTespondent account
in the United States for a foreign bank shall maintain records in the United States identifying (1)
the owner(s) of such foreign bank and (2) the name and address of a person who resides in the
United States and is authorized to accept service of legal process for records regarding the
cOlTespondent account.
What is a covered financial institlltion '!
Section 5318(k) does not define Acovered financial
institution~
for purposes of this
recordkeeping requirement. For purposes of this notice and the certification, the tenn Acovered
financial
institution~
has the same meaning as provided in section 5318(j) (see above), except
that such tenn does not include a broker or dealer registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934. The Department of the Treasury
intends to propose similar recordkeeping requirements for such brokers and dealers.
What is a correspondent accollnt?
Section 5318(k) defines AcolTespondent
account~
by reference to the definition of that
tern1 in 31 U.S.C. 5318A(e)(l)(B), as added by section 311 of the USA PATRIOT Act, which, as
discussed above, means Aan account established to receive deposits from, make payments on
behalf of a foreign financial institution, or handle other financial transactions related to such
institution.~
As noted above, it is the expectation of the Department of the Treasury that a covered
financial institution will accord priority to requesting ce11ifications in connection with foreign
banks for which it maintains cOlTespondent deposit accounts or their equivalents.
-6-
Who is an owner of a foreign bank?
Section 5318(k) does not define Aowner=: for purposes of the requirement that a covered
financial institution maintain records of the owners of foreign banks to which it provides
correspondent accounts. For purposes of this notice and the certification, an Aowner=: means any
person who is a Alarge direct owner,=: an Aindirect owner,=: and certain Asmall direct owners.=:
For purposes of these definitions: (1) Aperson= means any individual, bank, corporation,
partnership, limited liability company, or any other legal entity, except that members of the same
famil! shall be considered one person; and (2) Avoting shares or other voting interests=: means
shares or other interests that entitle the holder to vote for or select directors (or individuals
exercising similar functions).
The definition of Aowner= as used in this notice and in the certification applies only with
respect to the provisions of section 5318(k), which are designed to facilitate the service of legal
process. No inference may be drawn as to the applicability of this definition to other provisions
of the USA PATRIOT Act, including the enhanced due diligence requirements of 31 U.S.c.
5318(i) (as added by section 312 of the USA PATRIOT Act), which sets forth different standards
for reporting ownership information.
Who is a small direct owner of a foreign bank?
A Asmall direct owner=: of a foreign bank is a person who owns, controls, or has power to
vote less than 25 percent of any class of voting securi ties or other voting interests of the foreign
bank. The identity of a small direct owner need not be reported for purposes of this notice and
certification unless two or more small direct owners (1) in the aggregate own 25 percent or more
2
The same family means parents, spouses, children, siblings, uncks. aunts. grandparents. grandchJldren, first
cousins. second cousins, stepchildren. stepsiblings, parents-in-law and spouses of any of the foregoll1g.
-7-
of the voting securities or interests of the foreign bank and (2) are owned by the same indirect
owner (see below).
Who is a large direct owner of a foreign bank?
A Alarge direct owneE of a foreign bank is a person who (1) owns, controls, or has
power to vote 25 percent or more of any class of voting securities or other voting interests of the
foreign bank; or (2) controls in any maImer the election of a majority of the directors (or
individuals exercising similar functions) of the foreign banle The identity of each large direct
owner is subject to reporting.
Who is an indirect owner of a foreign bank?
If any large direct owner of a foreign bank is majority-owned by another person, or by a
chain of majority-owned persons, an Aindirect owner:::: is any person in the ownership chain of
any large direct owner who is not majority-owned by another person.
If any two or more small direct owners of a foreign banl\: (1) in the aggregate own,
control, or have power to vote 25 percent or more of any class of voting securities or other voting
interests of the foreign bank and (2) are majority-owned by the same person, or by the same chain
of majority-owned persons, the Aindirect owneE is any person in the ownership chain of the
small direct owners who is not majority-owned by another person.
Each indirect owner is subject to reporting.
Example of reportable owners.
The following example illustrates the owners of a foreign bank who are covered by this
notice and the certification:
FB is a foreign bank. Voting securities of FB are owned by Person C ( 15 percent), Person
D (35 percent), Person E (10 percent), Person F (20 percent), and Person G (20 percent).
-8-
Persons C and G are both majority-owned by Person X, which is majority-owned by
Person Y, which is majority-owned by Person Z, which is not majority-owned by another person.
Person D is majority-owned by Person Y, which is majority-owned by Person W, which
is not majority-owned by another person.
Persons E and F are not owned by another person.
Persons C, E, F, and G are small direct owners because each owns less than 25 percent of
the voting securities ofFB. The identities of Persons C and G are subject to reporting under this
notice because (1) in the aggregate they own more than 25 percent of the voting securities of FB
and (2) they are majority-owned by the same indirect owner Z. The identities of Persons E and F
are not subject to reporting.
Person D is a large direct owner because it owns 25 percent or more of the voting
securities of FB. The identity of Person D is subject to reporting under this notice.
Person W is an indirect owner because it is a majority-owner of Person Y, which is a
majority-owner of Person D. The identity of Person W is subject to reporting under this notice.
The identity of Person Y is not subject to reporting.
Person Z is an indirect owner because it is a majority-owner of Person Y, which is a
majority-owner of Person X, which is a majority-owner of Persons C and G, which are small
direct owners that in the aggregate own 25 percent or more ofthe voting securities ofFB. The
identity of Person Z is subject to reporting under this notice. The identity of Persons Y and X are
not subject to reporting.
B. Description of Certification
What is being certified?
-9-
Under paragraph 1 of the certification, a foreign bank that maintains a cOlTespondent
account with a covered financial institution certifies either that: ( 1) it is not a shell bank; (2) it is
a shell bank that is a regulated affiliate; or (3) is a shell bank that is not a regulated affiliate, in
which case a covered financial institution is prohibited from establishing or maintaining a
cOlTespondent account with the foreign bank.
If a foreign bank certifies that it is not a shell bank, it specifies in Annex I its physical
address and its regulator. If the foreign bank certifies that it is a regulated affiliate, it specifies in
Annex I the name and address of the non-shell bank with which it is affiliated and the regulator
of the non-shell bank and the regulated affiliate.
Under paragraph 2 of the certification, a foreign bank certifies either that: (1) it does not
provide banking services to any foreign shell bank, other than a regulated affiliate; or (2) it
provides banking services to a foreign shell bank but will not use any of the cOlTespondent
accounts with a U.S. financial institution to provide banking services to any foreign shell bank,
other than a regulated affiliate.
Under paragraph 3 of the certification, a foreign bank certifies the identity its owner(s) in
Annex II. Street addresses must be provided; post office boxes are not acceptable.
Under paragraph 4 of the celiification, a foreign bank certifies the identity of its agent for
service of legal process in the United States, and identifies the agent in Annex III. Street
addresses must be provided; post office boxes are not acceptable.
Under paragraph 5 of the certification, a foreign bank certifies that it will notify each
financial institution in the United States at which it maintains a cOlTespondent account in writing
within 30 calendar days of any change in facts or circumstances previously certified or contained
in the annexes to the certification.
-10-
Under paragraph 6 of the certification, a foreign bank certifies that it understands that
each financial institution in the United States at which it maintains a correspondent account may
provide a copy of the certification to the Secretary of the Treasury and the Attomey General of
the United States, or their delegees.
Paperwork Reduction Act
The collections of information contained in the certification have been reviewed under
the requirements of the Paperwork Reduction Act (44 U.S.c. 3507(j)) and, pending receipt and
evaluation of public comments, approved by the Office of Management and Budget (OMB)
under control number 1505-0184. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays a currently valid OMB
control number.
Comments conceming the collection of infom1ation should be directed to OMB, Attention: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, D.C., 20503. Any such comments should be submitted not later than
[INSERT 60 DAYS AFTER THE DATE OF PUBLICATION IN THE FEDERAL REGISTER].
Comments are specifically requested conceming:
Whether the collection of infolmation is necessary for the proper performance of the
functions of the Department of the Treasury, including whether the information will have
practical utility;
The accuracy of the estimated burden associated with the collection of infom1ation (see
below);
How to enhance the quality, utility, and clarity of the infomwtion to be collected;
How to minimize the burden of complying with the collection of infon11ation, including
-11-
the application of automated collection techniques or other fom1s of information technology; and
Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of
services to provide infonnation.
The collection of infonnation in the certification will enable financial institutions, on an
interim basis, to comply with the requirements of sections 313 and 319(b) of the USA PATRIOT
Act of 200 1. This infom1ation will be used to verify compliance by financial institutions with
these provisions. The respondents are foreign banks that establish or maintain correspondent
accounts with U.S. financial institutions. The reporting of this infonnation by foreign banking
institutions is voluntary; however failure to provide the infonnation may preclude the
establishment or the continuation of correspondent accounts with U.S. financial institutions.
Estimated total annual reporting burden 180,000 hours.
Estimated number of respondents: 9,000
Estimated average aru1Ual reporting burden per respondent: 20 hours
Estimated annual frequency of responses: Once
II. Certification
The following fom1 of certification may be used by a covered financial institution for
purposes of this notice. A covered financial institution may use other means to obtain the
infonnation necessary to satisfy its obligations under section 5318U) or 5318(k).
Dated: November 20,2001
David D. Aufhauser
General Counsel
-12-
CERTIFICATION FOR PURPOSES OF SECTIONS 5318(j) AND 5318(k)
OF TITLE 31, UNITED STATES CODE
[OMB Control Number 1505-0184]
The information contained ill this Certification is sought pursuallt to Sections 5318(j) and
5318(k) of Title 31 of the United States Code, as added by sectiolls 313 and 319(b) of the USA
PATRIOT Act of2001 (Public Law 107-56).
The undersigned respondent bank,
----------------------------------------
______________________ (ARespondent
Bank~),
has established one or more
Financial Institution~) to receive deposits from, make payments on behalf of, or handle other
financial transactions related to Respondent Bank (the ACorrespondent Accounts~).
The
Respondent Bank hereby certifies, by an individual authorized to make such certification, as follows:
1. Respondent Bartle (check appropriate box and complete Annex I):
D
(a)
Maintains a place of business that (i) is located at a fixed address (other than solely
an electronic address) in a country in which Respondent Barne is authorized by
such country to conduct banking activities, at which location Respondent Barllc
employs one or more individuals on a full-time basis and maintains operating
records related to its banking activities; and (ii) is subject to inspection by the
banking authority that licensed Respondent Bank to conduct banking activities
(hereinafter referred to as a Apbysical presence~);
D
(b)
Does not have a physical presence in any country, but the Respondent Bank (i)
is an affiliate of a U.S. depository institution, U.S. credit union, or non-U.S. barllc
that maintains a physical presence in a country; and (ii) is also subject to
supervision by the same banking authority in the country that regulates such
affiliated depository institution, credit union, or non-U.S. bank (the Respondent
Bank is thus a Aregulated affiliate~); or
D
(c)
Does not have a physical presence in a country and is not a regulated affiliate.
2. Respondent Bank either (check appropriate box):
-1-
o
(a)
does not provide banking services to any non-U.S. bank that does not have a
physical presence in any country and that is not a regulated affiliate; or
o
(b)
provides banking services to a non-U.S. bank that does not have a physical
presence in any country and that is not a regulated affiliate, but Respondent
Bank will not after December 25, 2001 use any Correspondent Account with the
Covered Financial Institution to provide banking services to any non-U.S. banl{
that does not have a physical presence in any country, and that is not a
regulated affiliate.
3. Respondent Bank has no owner(s) (as defined below) except as set forth in Annex II.
For purposes of this Certification, an owner means any large direct owner, any indirect
owner, and certain small direct owners.
A large direct owner is a person who (1) owns, controls, or has power to vote 25 percent
or more of any class of voting securities or other voting interests of the Respondent Bank;
or (2) controls in any manner the election of a majority of the directors (or individuals
exercising similar functions) of the Respondent Bank.
A small direct owner is a person who owns, controls, or has power to vote less than 25
percent of any class of voting securities or other voting interests of the Respondent Bank.
The identity of a small direct owner need not be set forth in Annex II unless two or more
small direct owners (l) in the aggregate own 25 percent or more of the voting securities or
interests of the Respondent Bank and (2) are owned by the same indirect owner.
If any direct owner is majority-owned by another person, or a chain of majority-owned
persons, an indirect owner is any person in the ownership chain of the direct owner who
is not majority-owned by another person.
If any two or more small direct owners (1) in the aggregate own, control, or have power to
vote 25 percent or more of any class of voting securities or other voting interests of the
Respondent Bank and (2) and are majority-owned by the same person, or by the same chain
of majority-owned persons, an indirect owner is any person in the ownership chain of such
small direct owners who is not majority-owned by another person.
For purposes of this Certification, (i) Aperson~ means any individual, bank, corporation,
partnership, limited liability company or any other legal entity; (ii) voting securities or other
voting interests means securities or other interests that entitle the holder to vote for or select
directors (or individuals exercising similar functions); and (iii) members of the same family*
shall be considered one person.
* The same family means parents, spouses, children, siblings. uncles, aunts. grandparents, grandchildren,
first cousins, second cousins. stepchildren, stepsiblings, parents-in-law and spouses of any of the
foregoing.
-2-
4. The individual or entity (AAgent:::::) identified in Annex III, resident in the United States
at the address (not a post office box) set f0l1h in Almex III, is authorized to accept service
of legal process from the Secretary of the Treasury or the Attorney General of the United
States pursuant to Section 5318(k) of title 31, United States Code.
5. Respondent Bank shall notify in writing within 30 calendar days each financial institution
in the United States at which it maintains a Correspondent Account of any change in facts
or circumstances as reported in this Certification and the Almexes hereto.
6. Respondent Bank understands that each financial institution in the United States at which
it maintains a Correspondent Account may provide a copy of this Certification to the
Secretary of the Treasury and the Attorney General of the United States.
I,
(name), certify that I have read and understand this
Certification and the Almexes hereto and that the statements made in this Certification and
the Annexes hereto are true and correct.
This Certification is made on behalf of ------------------------------ (name of
Respondent Bank), a banking institution organized under the laws of
___________________________________________________ (~~i~wuntr0·
I understand that the statements contained in this Certification and the Almexes hereto may
be transmitted to one or more departments or agencies of the United States of America for
purpose of fulfilling such departments= and agencies= governmental functions.
[Signature]
[Title]
Executed on this ____ day of _________ , 200_
Received, reviewed and accepted by:
Name:
Title:
For:
[Name of Covered Financial Institution]
Date
Almex I
1. To be completed if Respondent Bank checked paragraph 1(a) of the
...,
-J-
Certification:
(A)
Respondent Bank maintains a place of business at
[Street Address]
III
-----------------------------
[Country]
(8)
The banking authority that has the right to inspect the place of business
referred to in (A) is
[Name of Banking Authority]
2. To be completed if Respondent Bank checked paragraph 1(b) of the
Certification:
(A)
Respondent Bank=s affiliate that is regulated is
______________________________ , which maintains a physical presence at
[Name of Affiliate]
[Street Address]
III
---------------------------------
[Country]
(B) The banking authority that supervises both the Respondent Bank and its affiliate is
[Name of Banking Authority]
-4-
Annex II
Name and Address
ofOwner(s)
Address
Name
(No Post Office Boxes)
f---
Attach Additional Sheets if Necessary
-5-
Annex III
N arne and Address
of Agent Designated to Accept Service of Legal Process
Name
Address
Phone No.
F(L,(
(No Post Office Boxes)
-6-
No.
E-mail Address
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
'Jovember 19, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
90-Day Bill
November 23, 2001
February 21, 2002
912795JH5
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
1.900%
Investment Rate 1/:
Price:
1.936%
99.525
All noncompetitive and successful competitive bidders were awarded
:ecurities at the high rate. Tenders at the high discount rate were
llotted 82.12%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
31,307,608
1,365,245
50,000
$
16,000,093 2/
32,722,853
SUBTOTAL
TOTAL
4,862,439
4,862,439
Federal Reserve
$
37,585,292
14,584,848
1,365,245
50,000
$
20,862,532
Median rate
1.870%: 50% of the amount of accepted competitive tenders
s tendered at or below that rate. Low rate
1.860%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
j-to-Cover Ratio
=
32,722,853 / 16,000,093
=
2.05
Equivalent coupon-issue yield.
Awards to TREASURY DIRECT = $1,151,964,000
http://www .public debt. treas.gov
·814
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
lOR IMMEDIATE RELEASE
Jovember 19, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
181-Day Bill
November 23, 2001
May 23, 2002
912795JV4
1.960%
Investment Rate 1/:
Price:
2.006%
99.015
All noncompetitive and successful competitive bidders were awarded
ecurities at the high rate. Tenders at the high discount rate were
llotted 45.62%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Competitive
Noncompetitive
FIMA (noncompetitive)
IS
$
31,104,818
1,110,501
200,000
SUBTOTAL
32,415,319
Federal Reserve
5,403,441
TOTAL
Accepted
Tendered
Tender Type
$
37,818,760
$
14,689,834
1,110,501
200,000
16,000,335 2/
5,403,441
$
21,403,776
Median rate
1.930%: 50% of the amount of accepted competitive tenders
tendered at or below that rate.
Low rate
1.900%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
d-to-Cover Ratio = 32,415,319 / 16,000,335 = 2.03
Equivalent coupon-issue yield.
Awards to TREASURY DIRECT = $975,888,000
http://www.publicdebt.treas.gov
g15
OFFICE OF PUBLIC AFFAIRS' 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C.' 20220. (202) 622·2960
EMBARGOED UNTIL 11: 30 A.M.
November 21, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY TO AUCTION $21,000 MILLION OF 2-YEAR NOTES
The Treasury will auction $21,000 million of 2-year notes to refund $28,338
of publicly held notes maturing November 30, 2001, and to pay down about
$7,338 million.
m~llion
In addition to the public holdings, Federal Reserve Banks hold $5,167 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
no~co~p~ti~ive 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 $509 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.
Th~s offering of Treasury securities is governed by the terms and conditions
set fo.'!:'th 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-S17
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
HIGHLIGH~S
OF TREASURY OFFERING TO THE PUBLIC OF
2-YEAR NOTES TO BE ISSUED NOVEMBER 3D, 2001
November 21, 2001
Offer~nC"
.~oun t
1:'ubl1C Gl:-fering
.......
I
....................... $21, 000 million
$21,000 million
. . . . . . . . . . . . . . . . . . . .
.
of Offering:
Term and type of secur~ty ................. ····
Ser~es _ .. _ .. _ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CUSIP n~er ........ _ .........................
Auct~on date _ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issue date _________ . __ . _. __ .... __ .. _ .. _., _ .. - .
Dated date .... _ ..... _ .........................
Matur~ty date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Descr~pt~on
2-year notes
W-2003
912827 7G 1
November 28, 2001
November 3D, 2001
November 30, 2001
November 3D, 2003
Determined based on the highest
accepted competitive bid
Yield . . . . . . . . . . . . . . _ . _ ........................ Determined at auction
Interest payment dates . . . . . . . . . . . . . . . . . . . . . . . . May 31 and November 30
Minimum bid amount and multiples .............. $1,000
Accrued interest payable by investor .......... None
Premium or discount ... _ . _ ... _ ........... _ ..... Determined at auction
STRIPS Information:
Minimum amount required ....................... $1,000
Corpus CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . 912820 GR 2
Due date(s) and CUSIP numher(s)
for additional TINT(s) _ ..................... November 30, 2003 - - 912833 YL 8
Subm~ssion
of Bids:
Noncompet~tive
b~ds:
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 l~mit.
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.
Competit~ve 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
of Tenders:
tenders:
Pr~or to 12:00 noon eastern standard time on auction day.
Compet~tive tenders:
Prior to 1:00 p.m. eastern standard time on auction day.
Rece~pt
Noncompetit~ve
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date,
or payment of full par amount with tender_
TreasllryDirect customers can use the Pay
Direct fea~ure which a~thorizes a charge to their account of record at their
f~nanc~al inst~tut~on on issue date.
OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE, N. W.• WASHINGTO,\I, D.C.- 20220. (202) 622-2960
EMBARGOED UNTIL 11: 30 A.M.
November 21, 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 $32,000
to r~fund an estimated $34,909 million of publicly held 13-week, 26-week and
52-week Treasury bills maturing November 29, 2001, and to pay down approximately
$2,909 million. Also maturing is an estimated $12,000 million of publicly held 4-week
Treasury bills, the disposition of which will be announced November 26, 2001.
~.:liOrt
The Federal Reserve System holds $14,303 million of the Treasury bills maturing
on November 29, 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 November 27, 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
Auu.ority (FrMA) 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.
MonE~ary
TreasuryDirect customers have requested that we reinvest their maturing holdings
of approximately $1,062 million into the 13-week bill and $796 million into the 26week 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
Treasur~ 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-SIS
For press releases, speeches, public schedules and official biographies, call our 24-lrour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED NOVEMbER 29, 2001
November 21,
Offering Amount . . . . . .
Public Offering . . . . . .
NLP Exclusion Amount.
Description of Offering:
Term and type of securlty.
CUSIP number.
Auction date ..
Issue date ....
Maturity date.
Original issue date.
Currently outstanding.
Minimum bid amount and multiples.
$16,000 million
$16,000 million
$ 8,000 million
· 91-day hill
.912795 HJ 3
.November 26, 2001
. November 29, 2001
. February 28, 2002
· March 1, 2001
$30,720 million
· $1,000
2001
$16,000 million
$16,000 million
None
182-day bill
912795 JW 2
November 26, 2001
November 29, 2001
May 30, 2002
November 29, 2001
$1,000
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids:
Accepted in full up to $1 million at the highest discount rate of accepted competitive bids.
Foreign and International Monetary Authority (FIMA) bids:
Noncompetitive bids submitted through the Federal Reserve
Banks as agents for FIMA accounts.
Accepted in order of size from smallest to largest with no more than $200
million awarded per account.
The total noncompetitive amount awarded to Federal Reserve Banks as agents for FIMA
accounts will not exceed $1,000 million.
A single bid that would cause the limit to be exceeded will
be partially accepted in the amount that brings the aggregate award total to the $1,000 million limit.
However,
if there are two or more bids of equal amounts that would cause the limit to be exceeded, each will be prorated
to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g., 7.100%, 7.105%.
(2) Net long position (NLP) 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
35% of public offering
Maximum Award . . . . . . . . . . . . .
Receipt of Tenders:
Noncompetitive tenders . . . . . Prior to 12:00 noon eastern standard time on auction day
Competitive tenders . . . . . . . . Prior to 1:00 p.m. eastern standard time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full par amount
with tender.
TreasuryDirect customers can use the Pay Direct feature which authorizes a charge to their account of
record at their financial institution on issue date.
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.e 20220 e (202) 622·2960
Contact: Public Affairs
(202-622-2960
FOR IMMEDIATE RELEASE
November 26,2001
lVIEDIA ADVISORY:
UNITED STATES AND CAYMAN ISLANDS WILL SIGN TAX INFORlVIATION
EXCHANGE AGREElVIENT ON TUESDAY
Treasury Secretary Paul H. O'Neill will hold the United States-Cayman Islands
tax infom1ation exchange agreement signing ceremony at 10:00 a.m. EST on Tuesday,
November 27, 2001 in the Treasury Department's Diplomatic Reception Room (Room
3311), 1500 Pennsylvania Avenue, NW. Treasury Secretary O'Neill, United Kingdom
Ambassador Sir Christopher Meyer and Cayman Island Governor Peter J. Smith eBE
will be signing the tax information exchange agreement.
The Room will be available for pre-set at 9:00 a.m.
Media without Treasury or White House press credentials planning to attend
should contact Treasury's Office of Public Affairs at (202-622-2960) with the following
infom1ation: name, social security number and date of birth. This information may also
be faxes to (202) 622-1999.
PO-SI9
For pre!]s releases, speeches, public schedules and ojficir['ii biographies. call our 24-hDur fax Jil'?e at (202) 622-2{)LH)
·u.s
Go,ernment Prlntlnq Oltlce 1998· 619-559
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 1~:30 A.M.
November 26, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $20,000 million
to refund an estimated $12,000 million of publicly held 4-week Treasury bills
maturing November 29, 200~, and to raise new cash of approximately $8,000
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 $~4,303 million of the Treasury bills
maturing on November 29, 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 .blighest 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 the new security are given in the attached offering
highlights.
000
Attachment
PO-820
Far press releases, speeches, public schedules and official biographies, call our :l,j-Izour fax line at (JO::) 6]]-2040
HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED NOVEMBER 29,
2001
November 26, 2001
Off er~ng
'
0 00 0 m~'11'~on
lunoun t . . . . . . . . . . . . . . . . . . . . . $2,
Public Offering . . . . . . . . . . . . . . . . . . . . . $20,000 million
NLP Exclusion Amount ......... , ...... $8,800 million
Description of Offering:
Term and type of security . . . . . . . . . . . 28-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . 912795 HZ 7
.'\uction date . . . . . . . . . . . . . . . . . . . . . . . . November 27, 2001
Issue date ........ , . . . . . . . . . . . . . . . . . November 29, 2001
Maturity date . . . . . . . . . . . . . . . . . . . . . . . December 27, 2001
Original issue date . . . . . . . . . . . . . . . . . June 28, 2001
Currently outstanding. '" . . . . . . . . . . . $35,440 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 Au thori ty (FIMA) bids:
Noncompeti··
tive 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%.
I
(2) Net long position (NLP) for each bidder must be reported when
the sum of the total bid amount, at all discount rat~s, 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:
P~ior to 12:00 noon eastern standard time on auction day
Competitive tenders:
?rio~ to 1:00 p.m. eastern standard ti~e on auction day
?ayment Terms:
By cha:::-ge to a funds accoun'C: 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 - WASEINGTON DC
FOR IMMEDIATE RELEASE
November 26, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
9l-Day Bill
November 29, 2001
February 28, 2002
912795HJ3
1.920%
Investment Rate 1/:
Price:
1.955%
99.515
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 77.31%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
28,001,375
1,375,255
160,000
SUBTOTAL
29,536,630
Federal Reserve
6,914,696
TOTAL
Accepted
Tendered
$
36,451,326
$
14,464,885
1,375,255
160,000
16,000,140 2/
6,914,696
$
22,914,836
Median rate
1.900%: 50% of the amount of accepted competitive tenders
was tendeced at or below that rate.
Low rate
1.880%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 29,536,630 / 16,000,140 = 1.85
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,144,628,000
http://www .publicdebt. treas.gov
PO-821
PUBLIC DEBT NEWS
Department of the Treasury· Bureau of the Public Debt· Washington, DC 20239
TREASURY SECL~ITY AUCTION RESULTS
BUREAU OF THE ?UBLIC GEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
November 26, 2001
CONTACT:
Office of Financing
202-691-3SC,0
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
182-Day Bill
November 29, 2001
May 30, 2002
912795JW2
1.990%
Investment Rate 1/:
Price:
2.038%
98.994
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 31.39%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competit.ive
Noncompetitive
FIMA (noncompetitive)
$
30,221,183
1,083,678
448,000
$
Federal Reserve
6,011,248
6,011,248
$
37,764,109
14,468,673
1,083,678
448,000
16,000,351 2/
31,752,861
SUBTOTAL
TOTAL
Accepted
Tendered
$
22,011,599
Median rate
1.970%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.920%:
5% of the amour.t
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 31,752,861 / 16,000,351 = 1.98
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $836,482,000
http://www.publicdebt.treas.gov
PO-822
OFFICE OF PUBLIC AFFAIRS e1500 PENNSYLVANIA AVENUE, N. W.• WASHINGTO,'\[, D.C.. 20220. (202) 622-2960
Contact: Tara Bradshaw
Embargoed Until 10:30 a.m.
November 27,2001
(202) 622-2960
TREASURY SECRETARY O'NEILL'S SIGNING CEREMONY STATEMENT
UNITED STATES AND UNITED KINGDOM SIGN AGREEMENT
TO EXCHANGE TAX INFORMATION WITH RESPECT TO TIlE CA Y,WAN ISLANDS
Today Treasury Secretary Paul O'Neill signed a new agreement with the United
Kingdom, including the Cayman Islands, that will allow for exchange of infonnation on tax
matters between the United States and the Cayman Islands. The asrreement was signed by
Treasury Secretary Paul O'Neill, United Kingdom Ambassador Sir Christopher Meyer and
Cayman Island Govemor Peter 1. Smith CBE.
At the signing ceremony, Treasury Secretary Paul O'Neill delivered the following remarks:
"r would like to thank you all for being here today and welcome our friends from
the
United Kingdom and the Cayman Islands, especially the Governor of the Cayman Islands, Mr.
Peter 1. Smith CBE, and the British Ambassador to the United States, Sir Christopher Meyer. I
want to thank specially the Attorney General of the Cayman Islands, Mr. David Ballantyne, the
Cayman Islands Financial Secretary, Mr. George McCarthy, and Linford Pierson, Deputy Leader
of the Caymans Islands government, all of whom patiicipated personally in negotiating the tax
infonnation exchange agreement we are here today to sign.
'The Cayman Islands has a long-standing relationship with the United States, including
partnering with the United States in a mutual legal assistance treaty effective since 1990 under
which we've already been cooperating in the hunt for terrorist assets. Since September 11 til,
cooperation between jurisdictions is more important than ever before, as we work to disrupt
terrorist financing.
"The Cayman Islands is undeniably the most important financial center in the Caribbean
and ranks among the largest and most important financial centers in the world. This tax
infonl1ation exchange agreement we are signing today represents a significant development in
the cooperative relationship between the Cayman Islands and the United States and in our efforts
to prevent our financial institutions from being used to fUliher illegal activities.
PO-S23
For }WZ5S releases, speeches, iJublic schedules and official biographies, call our 24 . .h,our fax line ai {2(2) 622-2040
·u.s
Government Prlntlnq Office 1998· 619·559
"As I have said previously, we have an obligation to enforce our tax laws because failing
to do so undennines the confidence of honest taxpayers in the fairness of our tax system. The use
of offshore entities or accounts by U.S. taxpayers to evade their tax obligations is likely to
increase because of the Internet and other tools which may allow significant fund transfers that
do not create a paper trail. The plimary obstacle to enforcement of our tax laws in these cases
remains ineffective information exchange.
"This summer I publicly expressed my intention, in Congressional testimony, to quicken
the pace for obtaining new tax information exchange agreements. Today's signing is an
important milestone of this new concerted effort.
"We commend the Cayman Islands for emphatically demonstrating that those who seek
to engage in tax evasion or other financial crimes are not welcome within its jurisdiction. It is
my sincere hope that, with the signing of this agreement, the Cayman Islands will be recognized
as a leading financial center that is committed to upholding international standards.
""r hope that the Cayman Islands' cooperation with the United States in developing this
tax information exchange agreement will set a precedent, and that other major financial centers
will enter into similar agreements in short order. I am confident that we will be entering into
additional important agreements in the future."
-30-
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N. W.• WASHINGTON, D.C .• 20220. (202) 622·2960
U.s. International Reserve Position
11/27/01
The Treasury Department today released u.s. reserve assets data for the week ending November 23, 2001. As indic.1ted in
this table, u.s. reserve assets totaled $68,587 million dS of November 23,2001, down from 569,082 million as of
Kovember 16,2001.
(in US millions)
I. Official U.S. Reserve Assets
November 16 1 2001
69,082
TOTAL
1. Foreign Currency Reserves
a.Securities
1
I
Euro
5,444
Yen
10,459
November 23 1 2001
68,587
TOTAL
Euro
15,902
Of which, issuer headquartered in the U. S
5,395
Yen
TOTAL
11,072
16,468
a
0
b. Total deposits with:
b.i. Other central banks and BIS
9,135
4,937
14,072
b.ii. Banks headquartered in the U.S.
9,059
4,104
13,163
0
b.ii. Of which, banks located abroad
0
0
b.iii. Banks headq,uartered outside the U.S.
a
0
0
0
17,203
17,110
10,860
10,801
11,045
11,045
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
2
3
5. Other Reserve Assets
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 rales. Foreign currency holdings listed as securities reflect marked-to-market values, and
deposits reflect carrying values.
2/ T;'e Items, ":':. IrvlF Reserve Position" and "3. Special DraWing Rights (SORs)," are based on data provided by the IrvlF and are '/alued in
dollar terms at the offiCial SORJdollar eXChange rate for the reporting date. -:-he IrvlF dClta fur NovelTlbel 16 are final The entries ill the lable
above for November :':3 (shown in italics) reflect any ,1ecessary adjustments, including revaluation, by the J.S. Treasurj to the prior week's
11vlF data.
31 Gold stock IS 'iaiued monthly at :542.222:': per fille troy ounce
was $11,045 million,
PO-824
'/alues shovvn are as ,~f Octcber 31 2001
The September 30, :':001 'lalLie
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
November 16, 2001
1. Foreign currency loans and securities
November 23, 2001
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other
o
o
III. Contingent Short-Term Net Drains on Foreign Currency Assets
November 23, 2001
November 16,2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debl due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S
3.c. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
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
FOR J:MIVIEDIATE RELEASE
November 27, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
28 -Day Bill
November 29, 2001
December 27, 2001
912795HZ7
Term:
Issue Date:
!vlaturi ty Date:
CUSIP Number:
Hlgh Rate:
1.990%
Investment Rate 1/:
2.024%
?rice:
99.845
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 57.93%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
Federal Reserve
TOTAL
Accepted
Tendered
$
35,580,700
17,118
$
19,982,915
17, l18
o
o
35,597,818
20,000,033
1,376,951
1,376,951
36,974,769
$
21,376,984
Median rate
1.960%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.910%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 35,597,818 / 20,000,033 = 1.78
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
PO-S25
DEPARTMENT
OF
THE
TREASURY
I
NEWS
TREASURY
OFFICE O{l' PUBLIC ,\FF.\IRS .1500 PENNSYLVANIA AVENUE, N. W.• WASHINGTON, D.C .• 20220. (202) 622-2960
EMBARGOED UNTIL 9:00 A.M.
November 28, 2001
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960
TREASURY ANNOUNCES DEBT BUYBACK OPERATION
On November 29, 2001, the Treasury will buy back up to $1,500 million par
of its outstanding issues that mature between February 2019 and August 2022.
Treasury reserves the right to accept less than the announced amount.
This debt buyback (redemption) operation will be conducted by Treasury's
Fiscal Agent, the Federal Reserve Bank of New York, using its Open Market
operations system. Only institutions that the Federal Reserve Bank of New
York has approved to conduct Open Market transactions may submit offers on
behalf of themselves and their customers. Offers at the highest accepted
price for a particular issue may be accepted on a prorated basis, rounded up
to the next $100,000. As a result of this rounding, the Treasury may buy
back an amount slightly larger than the one announced above.
This debt buyback operation is governed by the terms and conditions set
forth in 31 CFR Part 375 and this announcement.
The debt buyback operation regulations are available on the Bureau of
the Public Debt's website at www.publicdebt.treas.gov.
Details about the operation and each of the eligible issues are given
in the attached highlights.
000
Attachment
PO-826
For press releases, speeches, public schedules and official biographies, call our 24-llOur fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY DEBT BUYBACK OPERATION
November 28, 2001
Par amount to be bought back .... Up to $1,500 million
Operation date . . . . . . . . . . . . . . . . . . November 29, 2001
Operation close time . . . . . . . . . . . . 11:00 a.m. eastern standard time
Settlement date . . . . . . . . . . . . . . . . . December 3, 2001
Minimum par offer amount ........ $10 0,00
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 (%)
--8.875
8.125
8.500
8.750
8.750
7.875
8.125
8.125
8.000
7.250
*
-
I
Maturity
Date
02/15/2019
--_.
08/15/2019
02/15/2020
05/15/2020
08/15/2020
02/15/2021
05/15/2021
08/15/2021
11/15/2021
08/15/2022
CUSIP
Number
912810 EC
912810 ED
912810 EE
912810 EF
912810 EG
912810 EH
912810 EJ
912810 EK
912810 EL
912810 EM
Total
8
6
4
1
9
7
3
0
8
6
Par Amount
Outstanding*
13,615
18,941
9,781
8,057
17,724
10,218
10,219
10,067
30,697
10,238
139,557
Par Amount
Privately
Held*
11,242
16,251
8,295
6,556
15,095
8,791
8,601
8,409
26,567
9,043
118,850
Par Amount
Held as
STRIPS**
4,087
847
1,832
5,119
8,790
1,015
4,315
2,065
16,649
974
45,693
Par amounts are as of November 27, 2001.
** Par amounts are as of November 26, 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.
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
November 28, 2001
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 2-YEAR NOTES
Interest Rate:
Series:
CUSIP No:
3%
W-2003
9128277Gl
November 30, 2001
November 30, 2001
November 30, 2003
Issue Date:
Dated Date:
Maturity Date:
High Yield:
3.008%
Price:
99.985
All noncompetitive and successful competitive bidders were awarded
securities at the high yield.
Tenders at the high yield were
allotted 14.96%. All tenders at lower yields were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
Accepted
30,987,100
774,120
$
o
o
SUBTOTAL
21,000,020 1/
31,761,220
Federal Reserve
5,167,420
5,167,420
TOTAL
$
36,928,640
20,225,900
774,120
$
26,167,440
Median yield
2.960%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low yield
2.900%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 31,761,220 I 21,000,020 = 1.51
1/ Awards to TREASURY DIRECT
=
$595,675,000
http://www.publicdebt.treas.gov
PO-827
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N. W. - WASHINGTON, D.C.e 20220 e (202) 622.2960
Contact: Tara Bradshaw
(202) 622-2960
FOR IMMEDIATE RELEASE
November 28,2001
TREASURY SECRETARY O'NEILL STATEMENT ON
INTERNET T A.X MORATORIUM BILL SIGNING
Today the President signed into law H.R. 1552, the Internet ~ondiscrimination Act. This twoyear extension of the current Internet tax moratorium will provide additional time to analyze the
impact of e-commerce on local and State tax receipts, while ensuring that the growth of the
Internet is not slowed by new or discriminatory taxes. New technology shouldn't be treated as a
new means of increasing taxes on the American people.
-30-
PO-828
For press releases, speeches, imblic schedules and official biographies, caU our 2"C;]I)?A:'
NEWS
TREASURY
FOR IMMEDIATE RELEASE
November 29, 2001
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT:
Office of Public Affairs
202-622-2960
TREASURY DEBT BUYBACK OPERATION RESULTS
Today, Treasury completed a debt buyback (redemption) operation for $1,500 million
par of its outstanding issues. A total of 10 issues maturing between February 2019 and
August 2022 were eligible for this operation. The settlement date for this operation will
be December 3, 2001. Summary results of this operation are presented below.
(amounts in millions)
Offers Received (Par Amount) :
Offera Accepted (Par Amount):
$4,654
1. 500
Total Price Paid for Issues
(Less Accrued Interest):
2,026
Number of Issues Eligible:
For Operation:
For Which Offers were Accepted:
Ifeighted Average Yield
of all Accepted Offers
9
5.562
(%):
qeighted Average Maturi ty
for all Accepted Securities
10
(in years) :
18.5
letails for each issue accompany this release.
PO-829
For press releases, speeches, public schedules and official biographies, call our U-hour fax line at (202) 622-2040
November 29,
2001
TREASURY DEBT BUYBACK OPERATION RESULTS
(amounts ln mIllions, prices in decimals)
Table I
Weighted
Par
Amount
Average
Accepted
Acceoted
Highest
Accepted
Price
296
295
0
136.687
N/A
136.659
N/A
Par
Amount
Offered
Coupon
Maturity
Rate (%1
Date
8.875
8.125
02/15/2019
08/15/2019
02/15/2020
735
396
125
133.343
133.340
05/15/2020
08/15/2020
420
350
136.515
136.470
640
237
465
22
136.765
136.746
126.806
27
126.812
130.015
141
65
10
130.218
128.906
120.125
8.500
8.750
8.750
7.875
02/15/2021
8.125
05/15/2021
8.125
8.000
08/15/2021
11/15/2021
252
453
830
7.250
08/15/2022
395
Price
130.009
130.168
128.882
120.125
Table II
Weighted
Lowest
Coupon
Rate (~)
2
Maturity
Date
CUSIP
Number
Accepted
Yield
8.875
8.125
8.500
8.750
8.750
02/15/2019
08/15/2019
02/15/2020
05/15/2020
08/15/2020
912810EC8
7.875
8.125
02/15/2021
05/15/2021
08/15/2021
11/15/2021
08/15/2022
912810EH7
912810EJ3
912810EKO
5.539
N/A
5.562
5.560
5.561
5.581
5.577
5.577
912810EL8
912810EM6
5.580
5.595
8.125
8.000
7.250
912810ED6
912810EE4
912810EF1
912810EG9
Total Par Amount Offered:
4,654
Total Par Amount Accepted:
1,500
Average
Accepted
Yield
Par Amount
privatelv He1d*
5.541
10,947
N/A
5.562
5.563
16,251
8,170
5.563
5.581
5.577
5.580
5.582
5.595
Note: Due to rounding, detalls may not add to totals.
·Amount oucstanding afcer operation. Calculated using amounts reported on announcement.
6,206
14,630
8,769
8,574
8,268
26,502
9,033
DEPART_MENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.' 20220. (202) 622-2960
EMBARGOED UNTIL 2:30 P.M.
November 29, 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 $32,000
million to refund an estimated $24,274 million of publicly held I3-week and 26-week
Treasury bills maturing December 6, 2001, and to raise new cash of approximately
$7,726 million. Also maturing is an estimated $16,000 million of publicly held 4-week
Treasury bills, the disposition of which will be announced December 3, 2001.
The Federal Reserve System holds $10,831 million of the Treasury bills maturing
on December 6, 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 December 4, 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 $1,043 million into the 13-week bill and $916 million into the 26week 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 CPR Part 356, as amended) .
Details about each of the new securities are given in the attached offering
highlights.
000
Attachment
PO-830
For press releases, speeches, public schedules ami official biographies, call ollr 24-/WU1 fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED DECEMBER 6, 2001
November 29,
Offerlt1Cf Amount ...
Publ1C Offerlnq
NLP Exe] usion AmOlln t .
.._--------._----eesc:Ciption of Offerin.JI:
TeUll and type of securi ty
CUSIP number
Auctl.on da te .
Issue date ...
Ivlaturity date.
Original issue date.
Currently outstand1ng
Minimum bid amount and multiples
$16,000 ml.lll.on
$16,000 million
$ 4,500 million
$16,000 million
$16,000 million
None
· 91-day bill
· 912795 JJ 1
. December 3, 2001
. December 6, 2001
· March 7, 2002
September 6, 2001
$1B,144 million
$1,000
1B2-day bill
912795 JX 0
December 3, 2001
December 6, 2001
June 6, 2002
December 6, 2001
2001
$1,000
The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids:
Accepted in full up to $1 mill10n at the highest discount rate of accepted competitive blds.
Fo.Ct21gn and Internatlonal Monetary Authority (FIMA) b1ds:
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
llullion awarded per account.
The total noncompetitive amount awarded to Federal Reserve Banks as agents for FIMA
accounts wlll not exceed $1,000 million.
A single bid that would cause the limit to be exceeded wlll
be partially accepted in the amount that brings the aggregate award total to the $1,000 million limit.
However,
1f 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.
Competltl.Ve bids:
(1) Must be expressed as a discount rate with three decl.mals in increments of .005%, e.g., 7.100%, 7.105%
(2) Net long position (NLP) 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 billlon or greater.
(3) Net long position must be determined as of one half-hour prior to the closing time for receipt of
competitive tenders.
Maximulll 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
P~yment 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
r~cord at their flnancial institution on issue date.
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.e 20220 - (202) 622·2960
ElVIBARGOED UNTIL 8:00 P.M. EST
NOVElVIBER 29, 2001
CONTACT: TONY FRATTO
(202) 622-2960
STRENGTHENING THE GLOBAL ECONOlVIY AFTER SEPTEMBER 1I
THE BUSH ADlVIINISTRATION'S AGENDA
JOHN B. TAYLOR
UNDER SECRETARY FOR INTERNATONAL AFFAIRS, U.S. TREASURY
KENNEDY SCHOOL OF GOVERNMENT
HARV ARD UNIVERSITY
We all remember where we were when we first heard the terrible news that ajct
had crashed into the World Trade Center.
I was in a room in the Imperial Hotel in Tokyo, reviewing recent Japanese
economic policy initiatives with two financial attaches. I was part of a delegation of U.S.
economic officials led by Secretary of the Treasury, Paul O'Neill. The delegation had
just spent several fruitful days in Beijing discussing international economic issues with
Chinese leaders, including President Jiang Zemin. Before that we met in Suzhou with the
e-:onomic leaders of all the Pacific Basin countries. And on September 12 we planned to
discuss several key economic issues with Japan.
The trip was just one part of our international economic policy agenda. In fact, I
had Down to China from London where another aspect of our agenda-U. S. policy
toward financial crises in emerging market economies-was the subject of intense
interest among the world's central bankers and financial market regulators.
The meetings in Japan on September 12 never took place. Instead we spent most
of September 12 on the steel floor of a C -17 military transport jet flying back to
Washington. But it was already clear on that long flight back to America that what
appeared to us to have been a big international economic policy agenda was about to
become bigger, much bigger.
PO-831
·u.s
Government Pnntlnq Office 1998· 619-558
It is this international economic agenda--and how we have added to it since
September 11 th-that I want to discuss with you tonight. I'll first touch on the conceptual
goals and foreign policy context of that agenda. I'll then discuss specific policy action
plans.
Overall Economic Policy Goals
From the outset of the Bush Administration, two goals have guided the
international economic policy agenda: (1) increasing economic growth, as measured by
improvements in productivity and higher income per capita, and (2) improving economic
stability, as measured by a reduction in the severity, length, and frequency of economic
downturns and crises. The goals apply both to the United States and to the rest of the
world.
These two policy goals have not changed since September 11, though clearly the
economic impact of the attacks has made achieving the goals more challenging.
President Bush's idea is that each country, by following basic policy principles and
considering its own circumstances, should be encouraged to contribute in its own way to
economic growth and stability. This idea underlies his support for policy refoml efforts
in many countries, whether those of Prime Minister Koizumi in Japan or President Putin
in Russia, or his own economic policies in the United States. i\nd President Bush
remains committed to his view that free trade is a key driver of economic growth. The
U.S. contribution to the successful start of a new trade round in Doha underlies his
unequivocal support for free trade as a key part of his international economic agenda.
Economics in the Foreign Policy Context
However, the goals of intemational economic policy have been expanded since
September 11. To fully understand this expansion, it is helpful to place economic policy
in the context of overall foreign policy in the United States. Long before September 11,
President Bush stressed that his foreign policy is based on three essential and interlocking
building blocks~military, political, and economic-with the economics by no means in
third place. His first National Security Presidential Directive (NSPD-l) named the
Secretary of the Treasury as a formal member of the :.Jational Security Council Principals
Committee, sitting alongside the Secretaries of Defense and State.
This formal inclusion of economics into foreign policy has certainly resulted in an
elevation of economic issues. But it has also led to a government inter-agency
mechanism~from principals, to deputies, to tcclmical staff~that allows for novel
synergies between economic issues and military/political issues.
These synergies have been evident in many areas, from the New Strategic
Framework with Russia (which I will rctum to in a few minutes) to an increased
emphasis on business-like input-output performance measures tor policy, including
checklists, action plans, and quantitative measures of performance, even in areas where
quantitative information is difficult to find or measure.
Given the close relationship between the military, political, and economic issues
in this Administration, it perhaps should come as no surprise that the international
economic policy agenda has gotten bigger since the war on terrorism began. Soon after
President Bush declared war on terrorism-in that remarkable September 20 Joint
Session of Congress with Tony Blair in the gallery-he determined that the "first shot"
would be to block the financial accounts of terrorists in the United States. That shot took
place with his Executive Order of September 24.
Similarly, the President's pronouncement that countries that facilitate terrorism
are our enemies resulted in another addition to the economic agenda-to call on all other
countries to rid the financial system of terrorist networks by joining in the fight against
the financing of terrorism. And for similar reasons, it should not be surprising that the
diplomatic effort to fund the economic reconstruction of Afghanistan and to aid front line
states in the war against terrorism also became part of our intemational economic agenda.
The Policy Action Plans
So let's see how these ideas are playing out in practice. What are the policy
action plans?
(1) The First International Economic Priority: Getting Economic Policies Right at Home
I've always taught that getting one's own economic policy right is at least 90
percent of getting international economic policy right. This is especially true for the U.S.
economy which is such a large part of the world economy. So let's start at home.
The U.S. economy started slowing significantly in the middle of last year. From
1996 through the middle of :WOO, real GDP had been growing by 4 percent or more each
year. But in the third quarter of 2000, growth slowed to 1.3 percent and averaged only
1.2 percent from then until the second quarter of this year.
Monetary and fiscal policy in the United States responded quickly to stabilize the
economy in the face of these sih,'11s of a slowdown. The Federal Reserve began an
aggressive effort to lower interest rates, cutting the Federal funds rate by 300 basis points
from January to August. Fiscal policy also contributed, both from the automatic
stabilizers and the adoption of a large tax cut. The September consensus of private
forecasters was that the economy would gradually rebound to stronger growth in 2002 .
..,
)
But the short-run outlook for the economy changed significantly on September
11. The attacks deepened and extended the economic slump both because of the
reduction in retail spending during the days and weeks immediately after the attack, and
because of the negative impact of consumer confidence. With the decline in employment
extending into September and October, the National Bureau of Economic Research
(NBER) declared that the U.S. economy entered a recession in March of this year, 5
months before the September 11 attacks.
Again, the monetary policy reaction was swift. Through large open market
purchases and a liberal loan policy at the discount window, the Fed provided an
enormous amount of liquidity in the days immediately after the attack. While much of
that liquidity has now been removed from the system, the Fed followed up by cutting the
federal funds rate by an additional 150 basis points; the Federal funds target rate is now at
2 percent - the lowest level in 40 years. The President and Congress also moved quickly
to provide immediate funding, including $40 billion for rebuilding and recovery, and
financial support for the airlines, airline insurance, and airport security. The President
has also called on Congress to pass additional tax cuts.
The overall impact of these actions and the automatic stabilizers combined has
been huge: thc surplus was $236 billion in 2000 and private sector forecasters expect it to
be around zero-or even lower-in 2002. That is a stimulus of over 2 percent of GOP.
Despite the short-run downturn in the U.S. economy, the prospects for long-run
economic growth remain strong. The September II attacks are likely to change the
composition of output, with, for example, more security goods and fewer travel services
being produced. But inflation is at historically low rates, and with continued spending
discipline, there will be a return to budget surpluses. Productivity growth should
continue at higher rates than observed from 1973 to 1995. These views combine to
suggest that real growth will return to a potential path of about 3 to 3-1/2 percent.
(2) Cooperating and Coordinating Policy with Other Governments
The United States was, of course, not the only economy in the world to slow
down. Some countries, especially those exporting high-tech goods to the United States,
directly felt the impact of the decline in U.S. demand. Other economies-including
Japan-were having their own economic slumps. And September 11 caused those
weaknesses to intensify, especially in countries dependent on tourist trade and shipping.
On October 6, the United States hosted a special meeting of the G-7 finance
ministers to address the economic issues arising from the September 11 attacks. There
was agreement at this meeting about the best way to address the global economic
slowdown in light of the impact of September 11. It was for each country to respond
with economic policies appropriate to its own situation. In the United States that meant
the tax cuts and emergency spending plans. In Europe that meant speeding up tax Cllts
already in place.
4
In Japan the challenge was to implement its monetary policy goal of ending
deflation, to remove non-performing loans from banks' balance sheets, and to start a
program to gradually reduce the budget deficit. At the same time, there was agreement
that the automatic stabilizers should not be thwarted with tax increases, but should be
allowed to do their work in mitigating the decline in demand.
Importantly the G-7 went beyond stabilization issues and considered policies to
increase long-term economic growth. They agreed on the importance of identifying
policies in areas such as trade liberalization, education, and tax policy to improve longrun growth potential -- both of their own economies and the global economy as a whole.
We are now coordinating the preparation of a paper that will quantify the gains to longterm growth of better economic policies.
Beyond these concrete outcomes, I believe that the October 6 meeting sent a
strong signal of confidence at a time of widespread uncertainty in the global economy.
The economic leaders of the industrialized world spoke with one voice. They had ajoint
press conference for the first time in history: Secretary O'Neill in the middle flanked by
the other six finance ministers. Their answers-describing the policy in each G-7
country-showed a great deal of cooperation in my view.
The meeting also showed that cooperation under extraordinary circumstances
could have positive spillovers into other foreign policy areas. A concrete action plan to
coordinate the policies to combat the financing of terrorism was issued. And Russia
participated in the discussion on combating terrorist financing -- the first time that Russia
joined a G-7 discussion on a topic other than the Russian economy. This action plan of
the G- 7 has now been expanded to include the G-20, a group that also includes countries
such as India, China, Brazil, Mexico, and Saudi Arabia.
(3) Economic Growth in the Poorest Countries: Reform of the Development Banks
Nowhere is raising economic growth more important than in the very poor
countries of the world. As with so many things, September 11 has reminded us of
another reason to accelerate economic development. Underdeveloped, politically
unstable countries are prone to become hotbeds for terrorism. For these reasons, reform
of the World Bank and the other multilateral development banks, which have a key role
to play in promoting the economic development of poor countries, is one of the highest
priorities of the Bush Administration's international economic policy agenda.
Our refonn effort has a simple theme: raising productivity growth in poor
countries. This productivity theme is important for the simple reason that differences in
productivity are why there are differences in standards of living. I remember
demonstrating this point to students with a map, color-coded according to different
productivity levels in different countries. The different colors showed exactly which
countries were rich and which were poor.
5
Simply put, higher productivity means higher incomes, higher standards of
living, and lower poverty.
Productivity also provides a way for the World Bank to set priorities. More
resources from the international community will not reduce poverty in the developing
world unless they increase productivity. As Secretary O'Neill has said: every project,
every program, every loan, every grant should be judged by how much it will increase
productivity. Research and experience tell us that improved education and health,
competitive and open markets, and the rule of law are central to boosting productivity.
Following this theme, we have called upon the development banks to increase the
amount of assistance they provide in the fonn of grants, rather than loans. President
Bush has proposed that half of assistance to the poorest countries be extended as grants.
The goal of this proposal is to break the cycle whereby the poorest countries pile on more
and more debt. In recent years, much ofthis debt has been forgiven because these
countries will never be able to repay these obligations. Development programs would be
better served by transparent grant funding. And grants can be closely tied to
performance.
The Administration has also called on the development banks to increase their
emphasis on quantitative analysis and measurable results to ensure that development
assistance being provided is actually making a difference to the lives 0 f the world's poor.
We have emphasized the importance of better coordination among the development
banks and bilateral donors. We have called on the World Bank to devote more of its
resources to the poorest countries. And we have pushed the World Bank to increase its
focus on promoting growth of the private sector -- an area in which the European Bank
for Reconstruction and Development (EBRD) has been particularly successful.
The Bush Administration put forth these development refonns as part of its
.
have on 1y
agenda before September 11 th . The events ofthat day and the war on terronsm
increased our commitment to this mission. As President Bush said before the United
Nations General Assembly earlier this month, "Following September 11 th, these pledges
are even more important. In our struggle against hateful groups that exploit poverty and
despair, we must offer an alternative of opportunity and hope."
(4) Economic Stability in Emerging Markets and the International Monetary Fund
Achieving the goal of improved economic stability around the world requires a
much greater degree of stability in emerging markets than has existed in recent years.
Too often emerging market economies have been hard hit by crises, and recently
investment flows into these markets have declined sharply. It is important to reverse this
trend by reducing the likelihood of crises, and thereby reducing risk premia. We would
like more investment at more affordable interest rates to flow from the developed world
to the developing world
6
For this reason, a high priority of the Bush Administration's international
economic policy agenda is to create conditions [or a greater degree of stability in
emerging markets. Of course, the best way to provide a greater degree of stability is to
prevent crises from occurring. Thus we are putting a great deal of emphasis on crisis
prevention as the first line of defense, and we arc asking the International Monetary Fund
(IMF) to do the same.
In order for the IMF to increase its emphasis on crisis prevention it must focus
more on its core mission of promoting international financial stability through better
monetary policy, fiscal policy, exchange rate policy, and financial market policy. In the
last decade, the IMF became too involved in matters outside of these core areas -- the
breakup of clove cigarette monopolies in Indonesia being perhaps the most famous
example. The IMF has made improvements since then. We are working with the IMF to
further narrow the range of conditionality in programs. \Ve have also encouraged greater
use of prior actions in programs as a way of ensuring that needed refonns are actually
implemented.
I hope the emerging market asset class grows much more in the future as the rates
of economic growth in these countries rise. But we have to recognize that official sector
resources cannot possibly grow at such a high rate that we can continue with very large
official finance packages to deal with emerging market debt crises as in recent years.
There will inevitably be limitations on the use of official sector resources. Moreover, in
order to reduce bailouts of private investors it is necessary to limit the use of official
resources, especially in cases where debt sustainability is in question. We must therefore
gradually move in the direction of less reliance on large official finance packages.
There has been an important change in emerging markets in recent years, and we
have taken account of this change as part or OLlr approach to emerging markets. The
change is that investors are increasingly differentiating between countries and markets
based on fundamental economic assessments. This differentiation is reducing contagion
from one country to another, as exemplified most recently by the perfonnance of Brazil's
markets over the past few weeks in spite of the deterioration in Argentina's financial
situation. We have commented on this reduction in "automatic" contagion and
emphasized that contagion is not inevitable. Emerging markets differ in their trade
linkages, economic fundamentals, and overall financial stability. An excessive emphasis
on the risk of contagion by the official sector leads to the expectation on the part of
investors that the official sector will bail them out. That encourages excessive risk-taking
and gives rise to the very conditions that make financial crises more likely.
I believe strongly that what we in the public sector need to do is to be as clear as
possible about what our intentions are, so that the private sector can make calculated
assessments of the risks. Part of promoting stable expectations means avoiding official
coercion of the private sector during financial crises. Moreover, the official sector should
not encourage countries to default on their debts, though we recognize that restructurings
can and will happen in certain cases.
7
It is therefore important to develop some kind of international insolvency
mechanisms to ensure that if and when restructuring occurs, it does so in an orderly
manner that treats creditors fairly, reducing the scope for arbitrary, unpredictable official
action. And we should be clear that countries themselves -- not the U.S., not the G-7, not
the IMF -- have ownership over their own policies.
It is our intent that by taking these steps gradually over time, in consultation with
our G-7 allies and the IMF, we will be helping cultivate an international financial system
in which the emerging market asset class grows again.
(5) International Trade
No agenda for international economic policy would be complete without a
prominent role for trade liberalization. President Bush is fully committed to fTee trade as
a stimulus for global economic growth. As he said last month, "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 0 f the poor."
Trade liberalization promises large long-term benefits to the United States and
other countries. Cutting global trade barriers to goods and services by one-third would
provide a boost of $177 billion per year to the U.S. economy alone-- equivalent to a tax
cut of $2,500 per year for the typical American family. Current negotiations to create a
Free Trade Area of the Americas (FT AA), would provide additional benefits of some $53
billion, or about $800 per year for the average American family. Gains to other countries
are similar, or even larger if their current trade barriers are higher than in the United
States.
The Administration achieved a key objective in its international economic agenda
when a new round of multilateral trade negotiations was launched in Doha. The next
item on our action plan is Congressional action on Trade Promotion Authority (TP A),
which will give the President the authority to negotiate new trade agreements.
The global economy has benefited tremendously from trade liberalization in the
past and it stands to benefit even more in the future.
(6) Combating the Financing of Terrorism
As I mentioned earlier, President Bush says
- that the first shot in the war on
terrorism was fired on September 24th when he listed 27 terrorist organizations and
individuals and instructed U.S. financial institutions to block their accounts. More shots
in this war were fired on October 12, November 2 and November 7, when 123 additional
entities were listed and their assets ordered frozen.
8
But action by the United States alone is not enough. It is necessary that blocking
orders be put in place around the world. This requires building a global coalition against
the financing of terrorism. Terrorist assets -- like the terrorists themselves -- must have
no safe harbor. Thus combating the financing of terrorists has become a new item on our
international agenda.
To help build this coalition we have been working the phones and keeping track
of what countries are doing. We have talked with finance officials in nearly 100
countries, and have advanced this agenda in multilateral forums. In order to measure
progress in this war on terrorist financing, we have created a war room at Treasury. We
are keeping track, account by account, dollar by dollar, of all countries' progress in this
fight. So far 196 countries and jurisdictions have committed to join the effort to combat
the financing ofterrorism, 139 countries now have blocking orders on terrorist assets in
force, and over $60 million in assets has been frozen globally since September 11.
But there is much more to be done. For one, many countries need help in tracking
down terrorist assets. The United States is providing technical assistance in this area,
focusing on priority countries that have asked for such aid and where we believe the
opportunity to impact terrorist financing are opportunities to put a halt to terrorist
financing are greatest. We are encouraged that the U.S. Congress recently provided $3
million in extra funds for technical assistance, and we are also pleased that so many
foreign countries have requested such assistance.
Ultimately it is implementation and enforcement that are critical to the success of these
eflorts. Combating the financing of terrorism is an essential part of the overall war on
terrorism. We wil1 win if we stay the course.
(7) Bilateral Economic Relations: The Case of Russia
Our international economic agenda involves bilateral economic relationships with
many countries, as the trips to China and Japan in September indicate. The new U.S.
bilateral relationship with Russia -- the New Strategic Framework -- is a very important
and successful one. It provides an excellent example of how the economic components
of our foreign policy interact with and reinforce the military and political. Success in one
area helps strengthen the relationship in others. This is particularly evident in the postSeptember 11 tll world -- when Russia has taken a crucial role in the broad international
coalition against terrorism.
Our economic engagement with Russia is focused on discrete, practical steps that
will achieve measurable real results. It is more microeconomic than macroeconomic. The
big-money IMF packages and high-profile, fonnal, bureaucratic commissions are a thing
of the past. We are focusing our joint efforts on ways to increase private investment, for
example, through small business loans of the European Bank for Reconstruction and
Development. Business plays a central role in our engagement as President Bush and
President Putin have repeatedly emphasized.
9
There have been a number of high-level U.S. trips to Russia. On one of those
trips Secretary O'Neill and Secretary of Commerce Evans agreed with President Putin to
create a checklist of actions that can be concluded in a short time. They include areas
such as progress towards Russia's accession to the World Trade Organization (WTO), the
creation of a new public/private dialogue on reform of the Russian banking sector,
targeting assistance to regions committed to reform and helping Russia fight financial
crime. I am happy to say that the checklist has been turned into an action plan which the
staffs of both of our governments are working on now.
(8) Economic Reconstruction: Afghanistan
Finally, let me tum to the future of Afghanistan. President Bush is eager that we
develop a strategy for rebuilding Afghanistan once our military efforts there have
succeeded. Our ultimate goal is a peaceful and prosperous Afghanistan that no longer
harbors terrorists and is a member in good standing of the international community.
Success in the economic policy component of our engagement is vital to realizing this
goal -- another example of the inextricable link between the economic, political, and
military elements of our foreign policy_
We have been working hard on this issue for the past several weeks, and while
our work is preliminary, we have sketched the outlines of a long-term plan for
Afghanistan's economy recovery. 'yY e will be proceeding in three overlapping phases:
first, providing humanitarian assistance, under the auspices of the United Nations;
second, assisting with economic recovery, in which we will aim to restore essential health
and education services, undertake emergency infrastructure repairs, and improve food
security; and third, laying the foundation for sustained economic development, including
developing strong government institutions, investing in health and education programs,
and developing a robust and productive private sector, open to global trade and
investment where all Afghans -- men and women -- have new economic opportunities.
Last week, we brought together representatives of over 20 countries to initiate a
process for the international community to work together to assist with Afghanistan's
reconstruction. We need to ensure that this support is long in its duration, substantial in
its size, and effective in its ability to raise economic growth and living standards of the
Afghan people. The international community's engagement in Afghanistan offers us the
opportunity to apply the lessons we have learned from past successes and failures of
development assistance efforts. i\nd we intend to rise to this challenge.
Conclusion
As President Bush has emphasized the war on terrorism is a long war.
10
The resources to fight this war will require a strong global economy for many
years into the future. I have tried tonight to give an overview of international economic
policy of the Bush Administration and how it strengthens the global economy.
Of course, I could not mention everything. New tax treaties, steel capacity
negotiations, global climate change are some of the agenda items I did not discuss. But
the eight items that I did discuss capture the wide scope of the agenda and how it will
achieve the goals of economic growth and economic stability as well as serve important
foreign policy objectives, including those that have arisen since September 11.
-30-
11
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGT(),\'/, D.C .• 20220 _ (102) 622.2960
EMBARGOED UNTIL 9 :20 A.M. EST
December 3,2001
Contact: Betsy Holahan
(202) 622-2960
CURRENT CHALLENGES IN FINANCIAL INSTITUTIONS POLICY
TREASURY ASSISTANT SECRETARY SHEILA BAIR
REMARKS TO AMERICA'S COIVIML"NITY BANKERS WINTER YIANAGEMENT
MEETING
DRCElVIBRR 3,2001
THE WALDORF-ASTORIA HOTEL
NEW YORK, NE\V YORK
Good morning and thank you for this opportunity to speak to you about some of the
challenges facing policymakers and financial institutions today.
Without question, some of these challenges did not exist, or were perhaps not first-order
issues, a few months ago. Others are hardy perelmials. Let me begin with two issues that have
become central for us in the wake of the September 1 1 attacks: terrorism risk insurance and
critical infrastructure protection. I will then discuss our plans for dealing with a problem that
was a critical issue before September 11 and remains one today: predatory lending.
Before going further though, let me acknowledge the role that many of you played in our
financial system's recovery [rom the tenorist attacks. Let me also acknowledge the losses you
incurred. Some of you suffered damage to your own institutions or to your customers'
operations. Some of you lost iriends and colleagues. And the Federal Home Loan Bank of New
York, of which some of you are members, lost its headquarters. Through it all, however, you
contributed individually and institutionally to keeping our depository system functioning. I
commend you and I thank you.
Terrorism Risk Insurance
Prior to September 11, virtually all property and casualty insurance policies -commercial and household -- provided coverage for terrorist acts. In some sense, this \vas a
freebie. Since the risk \vas thought to be quite small and there was virtually no actuarial basis for
assessing the risk, the coverage was provided at no additional charge. All that changed on
September 11.
PO-832
~----------------------------------------------------------~-----~---3jJeec}zes, public schedules and official biogr[JJiJ"nires, !::aU (Jgii(' 24-hour fax li~1Jr2 at (2{)2) 1522-2{Xli)
_ Far pr:ess r?leu:;e:;,
·U.S Government Prlntlnq Office 1998· 619-559
Insurance companies absorbed billions of dollars of unanticipated losses that day. To its
credit, the industry is stepping up to the plate and paying the resulting claims. Yet September 11
has caused a fundamental examination of what it means to insure against terrorist acts.
After September 11, insurance companies have no sense ofthe risk distribution
associated with possible future acts of terrOlisl11. For the moment, the uncertainty associated
with terrorism risk leaves the industry unable to assess and price tisk. 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. At a time when we are working hard to stimulate our
economy to get it moving again, left unresolved this situation would be a ham1ful drag on those
efforts.
It is this risk to our economy that has driven our efforts to devise a temporary solution to
what we hope is a temporary problem. Without a basis upon which to price terrorism risk,
insurance companies will not offer the coverage or will offer it at rates that approach their
maximum loss exposure. September 11 taught us that that potential loss exposure can be quite
high indeed.
Without insurance coverage for terrorism lisk, the credit positions of all types of
businesses will deteriorate in the market. Borrowing costs will be driven up and new
construction will be difficult to finance. Certain sectors, such as energy and transportation, may
be particularly adversely affected, which in turn would drive up prices and reduce production
across the board. Even if some level of terrorism risk insurance were provided, drastic increases
in insurance costs would lead to similar outcomes for the economy.
Thus, the Administration has been working closely with Congress, state insurance
regulators, and industry to devise a temporary mechanism that would:
•
•
•
lielp the economy by diminishing the cost increases for insurance coverage while ensuring
that terrorism risk insurance remains available to all property and casualty insurance
policyholders;
Limit federal intrusion into private economic activity; and
Continue to depend on the state regulatory infrastructure for insurance companies.
It is important to note that these objectives are premised on a short-tern1 intervention by the
federal government, not a new, permanent presence in the market. In fact, virtually everyone
involved agrees that whatever solution we decide upon should have a clear exit strategy for the
government and should encouraae
the insurance industry to build capacity to insure against
0
terrorist acts as the government recedes from the market.
~
Legislative Progress
7
Nearly six weeks ago, Treasury Secretary O'Neill presented Congress with the
Administration's proposal for dealing with this market problem. Since then, we have been
working with the Congress to find an agreeable solution. While we have achieved a broad,
bipartisan consensus that this is a critical situation that demands a quick federal response, we
have yet to find consensus on a particular approach. Regrettably, initial legislative efforts to
address this problem were stymied by the perception of some that this was an insurance industry
bailout.
Several weeks ago the Senate Banking Committee mlliounced a tramework for legislation
that the Administration has broadly endorsed. Regrettably, no action has bcen taken on that
proposal.
In the House, Financial Services Committee Chaim1an Oxley and Insurance
Subcommittee Chairman Baker should be commended for securing House passage last week of a
terrorism risk insurance bill. The Administration supported prompt passage of the House bill to
move the process forward, though we continue to have reservations about the assessment
mechanism and the bill's administrative complexity. At the same time, we applaud the House
for including reasonable, short-term procedures for terrorist-related litigation. Procedures for
consolidation and management of mass tort litigation arising out of a terrorism incident are a
necessary part of any meaningful terrorism insurance proposal, and thus a necessary condition
for Administration support of any terrorism insurance bill.
We are hopeful that the Senate will soon act and that the various approaches being
discussed will be melded into a single consensus package in conference.
This must get done quickly. The majority of insurance contracts expire at year-end and
renewal notices for next year are being prepared and sent to policyholders. Every day counts.
Critical Infrastructure Protection
When I arrived at Treasury this past summer to assume the duties of the Assistant
Secretary for Financial Institutions my portfolio included responsibility for a program known as
critical infrastmcture protection, or CIP for short. This program found its roots in a 1997 report
of a presidential commission that had studied the potential vulnerabilities of major sectors, or
infrastmcturcs, to the threats of non-traditional warfare, that is, cyber and other terrorist threats.
The commission identified energy, telecommunications, transportation, and banking and finance
as "critical sectors," meaning that the full or partial failure of any of these could significantly
degrade the nation's social and economic welfare. The commission recommended that
government work with each of these sectors to bolster their defenses against cyber and other
attacks, and under Presidential Decision Directive 63 (PDD 63) in May 1998, Treasury was
directed to work with banking and finance.
Treasury and the industry initially focused on the cyber threat, as this appeared to be the
newest and least understood threat to the banking and finance infrastructure, and it was the threat
most emphasized by PDD 63.
With respect to cyber security, significant accomplishments have been made as a result of
PDD 63. Among others, notable achievements include:
•
•
establishment of the Banking and Finance Sector Coordinating Committee in 1998 to
supervise the industry's various responsibilities under PDD 63; and
establishment of the financial services infonnation sharing and analysis center (FSIISAC) in
1999 to permit members to anonymously share infoDl1ation on cyber threats, vulnerabilities,
incidents and solutions.
But we learned some impOliant new lessons from September 11. Let me discuss our
priorities as we see them now, and what it means for banking and finance going forward.
Lessons Learned
On balance, the financial sector responded remarkably well to the September 11 events.
For the most part, major financial institutions successfully activated their business continuity
plans, and banking and payment systems remained open for business. Also, financial institutions
worked well with regulators to test and reopen debt and equity markets quickly.
A great deal of this success is attributable to the work done in preparation for Y2K as
well as the subsequent emphasis on critical infrastructure protection under the mandate of POD
63 and the business continuity/contingency plans required by regulators. Nonetheless past
emphasis on cyber threats meant that while most institutions had established redundant systems,
not all of them were geographically distant from the primary site. Establishment of
geographically remote back up sites for institutions that represent concentrated financial activity
has become a major issue. It also became clear that greater coordination between industry and
all levels of government would be helpful.
Going Forward
Going forward, it appears that our earlier focus on cyber threats was too narrow, and that
the CIP program will need to address the broad spectrum of physical and cyber threats.
High priority will be attached to developing a list of key points of contact among
financial finns, government regulators and agencies (federal, state, local), industry utilities, and
other providers (vendors) of critical services to banking and finance. Perhaps we need a secure,
common call-in, or bridge number to facilitate communication among authorized parties. For its
part, at the earliest possible date Treasury intends to establish and maintain a closed, secure
communications network for itself and the primary federal regulators of financial institutions.
President Bush recently established a new Critical Infrastructure Protection Board
comprised of senior executive branch representatives. The Board is to recommend policies and
coordinate programs for protecting infonnation systems for critical infrastructures, including
emergency preparedness communications, and the physical assets that support slich systems.
This Board will have a standing committee on banking and finance that will be led by the
Treasury Department.
4
Predatory Lending
This audience is no stranger to the issue of predatory lending nor the debates that have
swirled in recent years on how to deal with this problem. Thus, I need not tell you what thc
problem is but rather will briefly highlight what I see as a promising approach for moving
beyond debates and into action.
I believe that the federal government should take a leadership role in encouraging private
sector efforts to eliminate abusive lending practices, namely by encouraging the development of
a set of industry best practices for subprime lending.
Many key players in the prime and subprime mortgage industry have already announced
mortgage purchase guidelines. I understand that ACB has a task force underway to consider best
practices or the development of guidance to avoid predatory lending practices. I look forward to
meeting with your representatives in the very near future to discuss your ideas.
These are constructive efforts. I believe that an industry set of best practices makes
appropriate use of market forces and still provides the Federal government with an enforcement
role. For my paIi, I would like to explore whether the Treasury Department can playa
leadership role in developing a set of national best practices for the subprime lending
community. For regulated depository institutions, such practices could be incorporated into bank
supervisory standards and enforced through the supervisory process. For lenders not subject to
federal bank regulation, the FTC would have enforcement authority. If for example, the lender
agreed to abide by a published set of industry best practices, but was later found not to have
followed those practices, the FTC could bring an enforcement action based on unfair and
deceptive practices.
The development of an industry set of best practices could help promote consistency and
unifom1ity among state and local predatory lending laws. By setting national standards for good
lending practices, a set of industry best practices might provide a good model for the efforts of
state and local leaders in this area.
A code of best practices could also help consumers navigate the complex mortgage
financing process by giving them some assurance that the lender with whom they are dealing
adheres to certain core standards for which there are federal enforcement mechanisms.
It is in the interest of industry and consumer groups to work together in developing a set
of industry best practices. In fact, many of the current subprime mortgage guidelines put in place
by mortgage companies were developed in conjunction with consumer groups. By working
together, I believe the Treasury Department, in pmincrship with lenders and consumer groups
could strike an appropriate balance in tem1S of assuring widespread access to credit while
protecting consumers from predatory practices. We must be aggressive and vigilant in our
efforts to crack down on abuses. On the other hand, unnecessary or unduly cumbersome
requirements on legitimate subprime lending will only cause mainstream lenders to withdraw
from providing credit to those who need it 1110St and arc otherwise creditworthy.
5
Conclusion
These are challenging times, for our nation and for our financial system. I have touched
on only three of the many challenges policymakers face today regarding financial institutions
and housing. There are many others, such as deposit insurance refom1, implementation of the
Gramm-Leach-Bliley Act, regulatory coordination, money laundering, GSEs, privacy, and
consumer protection.
These and other issues also warrant our attention. As we move ahead, I welcome an
ongoing dialogue with you and your organization as we work together to build a strong, resilient
financial system that will foster the economic growth and security of our great nation. Thank
you.
-30-
6
DEPARTMENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS t1500 PENNSYLVANIA AVENUE, N.W. t WASHINGTON, D.C.t 20220 t (202) 622-2960
EMBARGOED UNTIL 11:30 A.M.
December 3, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $19,000 million
to refund an estimated $16,000 million of publicly held 4-week Treasury bills
maturing December 6, 2001, and to raise new cash of approximately $3,000
million.
Tenders for 4-week Treasury bills to be held on the book-entry records of
will not be accepted.
Treasu~Direct
The Federal Reserve System holds $10,831 million of the Treasury bills
maturing on December 6, 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 a?ld 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%.
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
highlights.
~n
the attached offering
000
Attachment
PO-833
For press releases, speeches, public schedules ami official biographies, call our 24-/lOUT fax line at (202) 622-2fJ40
HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED DECEMBER 6, 2001
December 3, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . $19,000 million
Public Offering . . . . . . . . . . . . . . . . . . . . . $19,000 million
NLP Exclusion Amount . . . . . . . . . . . . . . . . $8,700 million
Description of Offering:
Term and type of security . . . . . . . . . . . 28-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . 912795 JA 0
Auction date . . . . . . . . . . . . . . . . . . . . . . . . December 4, 2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . December 6,2001
Maturity date . . . . . . . . . . . . . . . . . . . . . . . January 3,2002
Original issue date . . . . . . . . . . . . . . . . . July 5, 2001
Currently outstanding . . . . . . . . . . . . . . . $34,398 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
FlMA accounts.
Accepted in order of size from smallest to largest
with no more than $200 million awarded per accoun~.
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%, 8.g., 4.215%.
(2) Net long position (NLP) 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 tende~s:
P=icr to 12:00 noon aa3~e~n standard time on auction day
C~m?eti~ive tenders:
?r~cr to ::00 p.Q. eastszn standard time cn auction day
3-:;- c:-:.c:.::,:;e
on issue
da~e.
c.-:::
?
:::.lnds accou:r:t at a Federal Reserve Bank
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 I~~EDIATE RELEASE
December 03, 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
December 06, 2001
June 06, 2002
912795JXO
High Rate:
1.765%
Investment Rate 1/:
1.805%
Price:
99.108
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 12.40%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Accepted
Tendered
Competitive
Noncompetitive
FlMA (noncompetitive)
$
22,527,340
1,192,773
25,000
$
16,000,1132/
23,745,11'3
SUBTOTAL
TOTAL
5,437,792
5,437,792
Federal Reserve
$
29,182,905
14,782,340
1,192,773
25,000
$
21,437,905
Median rate
1.740%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.680%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
23,745,113 I 16,000,113
=
1.48
1/ Equivalent coupon-issue yield.
2/ Awa~ds to TREASURY DIRECT = $980,600,000
http://www.publicdebt.treas.gov
PO-834
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:
rOR IMMEDIATE RELEASE
December 03, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
December 06, 2001
March 07, 2002
912795JJ1
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
1.735%
Investment Rate 1/:
1.769%
Price:
99.561
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted
7.52%. All tenders at lower rates were accepted in full.
AMOC~TS
TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncom~etltive)
$
25,741,423
1,379,780
160,000
$
16,000,003 2/
27,281,203
SUBTOTAL
TOTAL
4,615,622
4,615,522
Federal Reserve
$
31,396,325
14,460,223
1,379,780
160,000
$
20,615,625
Median rate
1.700%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.650%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
27,281,203 / 16,000,003
=
1.71
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,154,535,000
http://www.puhlicdebt.treas.gov
PO-835
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.e 20220 e (202) 622.2960
For Immediate Release
December 4, 2001
Contact Tasia Scolinos
(202) 622-2960
Treasurv Department Briefing to Discuss Progress on the War Against
Terrorist Financing
\Vhat:
Treasury Department officials will answer questions regarding all recent updates
in the fight against terrorist financing. This will be a pen and pad briefing only no cameras or radio equipment please.
"Vhere:
The Treasury Depmiment
Room 3000
Please enter at the 15 th Street Entrance
"Vhen:
Tuesday, December 4,200 1
12:30 PM
Contact:
Please contact Frances Anderson in the Office of Puhlic Affairs to be cleared in
for this briefing.
PO-836
@
·u
S C;0vernment flrlntlrlg OUlce lCi:J2
61')-S~9
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. - WASIDNGTON, D.C. - 20220 - (202) 622-2960
EMBARGOED UNTIL 11 AM
December 4, 2001
Contact: Michele Davis
(202) 622-2920
Statement of Secretary Paul O'Neill on the Blocking of Hamas Financiers' Assets
'vYhen the President declared war on terrorist financing in September, we made al Qaida
our primary focus of attention, and have since blocked $61 million worldwide in assets of the
Taliban and a1 Qaida. In October, we broadened our pursuit of terrorist assets to include all
Foreign Terrorist Organizations, including Hamas. We stated very clearly our intent to pursue
the bankers who finance these terrorists. Today, we are advancing on those financiers of terror.
The Hamas terrorist organization has taken the lives of scores of individuals, including
American citizens. They have proudly claimed credit for their acts of evil, including the horrific
attacks this past Sunday. They raise money in the United States and around the world. Clearly,
Harnas is a terrorist organization of global reach.
Today we are shutting down three Hamas-controlled organizations that finance terror.
The Holy Land Foundation masquerades as a charity, while its primary purpose is to fund
Hamas. This is not a case of one bad actor stealing from the petty cash drawer and giving those
stolen monies to terrorists. This organization exists to raise money in the United States to
promote terror.
Last year, Holy Land raised $13 million. Government agents today shut down 4 offices
of the Holy Land Foundation in the United States. Innocent donors who thought they were
helping someone in need deserve protection from these scam artists who prey on their
benevolence.
Similarly, the al Aqsa bank and the Beit al Mal bank aren't just banks that unknowingly
administer accounts for terrorists. They are direct arms ofHarnas, established and used to do
Barnas business.
We will continue to name the financiers of terrorism to ensure that Hamas and other
terrorist organizations have no ability to finance their acts of evil. We will work with every
civilized nation around the globe to ensure there is no safe haven for terrorist money. Just as in a
ground war, we will win by taking one hill at a time, advancing tirelessly every day, until
terrorists and their money have nowhere to hide.
-30PO-837
Far press re~ speeches~ public schedules and official biographies,
can our 24-hour fax line at (202) 622-2040
I
·u.s
Government Prlntlnq Office 1998· 619-559
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.. 20220. (202) 622-2960
Contact: Rob Nichols
(202) 622-2910
FO RIMMED IA TE RELEAS E
December 4, 2001
TREASURY DEPUTY SECRETARY KEN DAM TO JAPAN
Deputy U.S. Treasury Secretary Ken Dam will travel to Japan December 4-8.
Dam will meet with a wide array of senior govcnlmcnt officials and private sector
political, financial and economic expelis to discuss terrorist financing, investment and a
range of steps supportive of strong economic growth.
-30-
PO-838
DO' ' J
£1 r pr!!ss reu:ase5,
.
' .
l d14 1es and',,fT;'
.,.
speecfu5.
puo-Z'~C5cne
oJJiaa i"owg:mpmes,
lJ
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caL 1J1H",'7-fWII1jW; IW'2 ax \~4,,/ 0~.::,-,;.u4()
".Ii
r,'
.
'U.S Government Prlntlnq Office 1998· 619-559
"If''''
D E P .\
I{
T \1 E '\ T
() F
TilE
T R E \ S t· R \'
NEWS
omCE OF PUBUCAFFAIIlS • 1500 PENNSYLVANIA AVENUE. N.W•• WASHINGTON. D.C.. 20220. (20%) 6%%-2960
u.s. International Reserve Position
12/4/01
~ Treasmy Depan:mem todayrebsed US. reserve assets data for the week ending November 30 2001 As indicated m
.
this tab1e, US. reserve assets totaled 569,155 rniDion as of November 30 2001 upfromS68,577 m'·
.
f No. __L __
23,2001.
" m u o n as Oy~
(III US mIIIoM}
November ~I 2003
IL Official U.s. Reserve Assets
~. foreign ~ R. • .-w. 1
.. s.curttIes
November 30. 2001
69,155
88.577
TOTAL
I
EIro
5,395
Yen
11,073
01 wIich, iauer h8atIquattBI8d in the U.s.
10TAL
16,468
0
Yen
E&w
5,520 11.183
TOTAL
16.~
Cl
b. Total deposita with:
bJ. 0IIttt' centraJ banb MIl 8IS
U. BanIca hMdq~ III ".. U.s.
b.ll. Of which. banks IocaI8d abroad
b.111. Banb hMdquarfeled outside ".. U.s.
bJi. Of which. banks IocatIId In the U.s.
9.059
".1CM
13.163
9,260
".1.44
0
0
0
13.404
0
0
0
0
0
12- IMF ReMrve Position Z
17,On
17.140
~. Special Dnlwing Rights (SORa) J
10.824
10,BIU
~. Gold Stock S
11.045
1,.04e
0
0
5. Other...",. Assets
11 Includes hI*IIngs of the Tl8IIUrY's Exchange StabIlIZatiOn Fund (ESF) and the FecIeraI ReserYe's System Open Marttet Acoount
(SOMA). valued at QJfIW'It market exchange ndea. Foreign currency holdings Iia1ed as MQlrities reftec:t ~ ¥8Iuea. depoeI1s reflect carrying values.
21 The ltama. "2. IMF Reeerw PosItIon- end -:So Special tlnMmg Rights (SORa); are based on data pnMded by the IMF and .... valued In
daIar ..",. at the ofticiaI SORIdcIIar exda Ig8 rate for the AII)CA1iIIg date. The IMF data for November 23 . . Inal. The en1riee In the t8bIe
abcM fa' November 30 (shown In JtaIic:I) rwfIec:t any nee.,.y adjustmentS.1ndudlng rewIuatiOn, by the U.S. T....-y to the prtcr weeIc'.
IMFda1a.
31 Gold stock is valued monthly at $42.2222 per tine troy ounce. Values shaWn sre as of Qdober 31. 2001. The September 30. 2001 value
was $11.045 miDIan.
0-839
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
November 23. 2001
1. Foreign currency loans and securities
November 30. 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 posftions
2.b. Long positions
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
November 23, 2001
November 30, 2001
1. Contingent liabilities in foreign currency
o
c
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
o
o
c
o
o
o
3.a. With other central banks
3.b. With banks and other financial instftutions
headquartered in the U. S.
3.e. With banks and other financial instftutions
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.l. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.l. Bought calls
4.b.2. Written puts
D EPA R T 1\1 E N T
0 F
THE
T REA SUR Y
NEWS
ornCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C.• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
DECEMBER 4, 2001
CONTACT: TONY FRATTO
(202) 622-2960
REMARKS BY JOHN B. TAYLOR, UNDER SECRETARY OF THE TREASURY
ON THE FINANCIAL FIGHT AGAINST TERROR
President Bush announced the first shot in the war on terrorism on September 24th
when he listed 27 terrorist organizations and individuals and instructed U.S. financial
institutions to block their accounts. Additional shots in this war have repeatedly been
fired since September as 127 additional entities were listed and their assets ordered
frozen. Today, President Bush and Secretary O'Neill announced that we are continuing
the fight to deny funding to those who promote and support terror.
The terrible events in Israel over the weekend underscore the need for prompt
action against all terrorist organizations. Hamas has proudly claimed credit for killing
scores of people. Ramas also raises money to support the use of terror in other countries
around the world. Clearly, Ramas is a terrorist organization of global reach.
Since October 1, 2000 Hamas has claimed responsibility for at least 20 other
bombings, two shootings, one kidnapping and one mortar attack. At least 77 people,
including three American citizens, have been killed in these attacks and at least 547,
including four Americans, have been injured. The use of suicide bombers has become a
Ramas trademark.
With today's announcement we are focussing on three Ramas-controlled
organizations that finance terror:
•
The Holy Land Foundation masquerades as a charity while its primary purpose is to
fund Hamas. Last year Holy Land raised $13 million in the United States. This
morning we shut down four offices of the Roly Land Foundation in the United States.
•
Beit el-Mal Bank, a public holding company that funnels money to and for Hamas,
ostensibly engages in investments and finance and has assets estimated at $25
million. The company's chairman is a major financial player in Hamas and a
majority of shares in the company are held by members of Hamas.
•
Al Aqsa Islamic Bank. Like Beit el-Mal, Al Aqsa is a direct arm of Ham as,
established and used to do the business of this organization.
PO-840
For press releases, speeches, public schedules and official biographies, call our 24-hQUr fax line at (202) 622-2040
'U S Govemment Prtnttng Office 1998· 619-559
The actions the United States has taken today are important. But action here at
home is not enough. Blocking orders must be put in place around the world, not just in
the U.S. This requires building a global coalition against the financing of terrorism.
Terrorist assets -- like the terrorists themselves -- must have no safe harbor. Combating
the financing of terrorists is a critical facet of our international agenda.
To help build this coalition we continue to communicate and coordinate with our
international partners. We have spoken to finance officials in nearly 100 countries, and
have advanced this agenda in multilateral fora. In order to measure progress, our Task
Force on Terrorist Finance at Treasury is keeping track, account by account, dollar by
dollar, of all countries' efforts. To date, 196 countries and jurisdictions have committed
to join this effort; 139 countries now have blocking orders on terrorist assets in force; and
over $61 million in terrorist assets has been frozen globally since September 11.
Ultimately, implementation and enforcement are the critical factors of success.
Combating the financing ofterrorism is an essential part of the overall war on terrorism.
We will continue to name the financiers of terrorism to ensure that Hamas and other
terrorist organizations have no ability to finance their acts of evil. We will work with
every nation around the globe to ensure that there is no safe haven for terrorist money.
This is a fight we expect to win.
D EPA R T 1\1 E N T
'IREASURY
0 F
THE
T REA SUR Y
NEWS
OffiCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE. N.W. • WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
December 4,2001
Contact: Public Affairs
(202) 622-2960
Shutting Down the Terrorist Financial Network
December 4, 2001
"From the beginning of th is fight, I have said our enemies are terrorist organizations ofglobal
reach, and all who harbor them and support them . ... Our action today is another step in the
war on terrorism. It's not the final step. There are more terrorist networks of global reach, and
more front groups who seek to support them. The net is closing. Today. it just got tighter. "
President George W. Bush
December 4, 2001
Today's Action
• Highlighting another significant step in the financial war against terrorism, President
Bush announced action to block the assets of three entities that provide financial and
material support to the terrorist organization HAMAS:
•
•
•
The U.S.-based Holy Land Foundation for Relief and Development provides millions
of dollars each year that is used by HAMAS;
Beit el-Mal Holdings, an investment company controlled by HAMAS; and
AI-Aqsa Islamic Bank, a financial ann ofHAMAS substantially owned by Beit elMal.
•
Federal agents locked down the Holy Land Foundation's headquarters in Richardson,
Texas, as well as its three other offices in Bridgeview, Illinois, Patterson, New Jersey,
and San Diego, California, securing their offices and taking custody of relevant business
records.
•
This action against financiers of HAM AS makes good on our promise to go after the
fundraisers for all terrorists of global reach.
•
Today's action is taken under the authority of Executive Order 13224, signed by the
President on September 23, which authorizes aggressive actions against the bankers of
international terrorism.
PO-841
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
'U S Government Printing Office 1998· 619·559
HAMAS
•
HAMAS is a militant offshoot of the Muslim Brotherhood, an organization founded in
1928. HA..\1AS is a terrorist organization that espouses an extremist Islamic
fundamentalist ideology, calling for the total destruction of the State oflsrael. HAMAS
confessed responsibility for this past weekend's suicide attacks in Israel that killed 26
people. In the past twelve months, it has killed two Americans, one of whom was
pregnant.
•
HAMAS was designated as a terrorist organization in 1995 pursuant to Executive Order
12947, and also in 1996 pursuant to the Antiterrorism Act. On November 2 of this year,
it was added to the list of terrorist organizations subject to action under Executive Order
13224.
•
HAMAS pursues a combined program of violence and terror. The principal purpose of
its armed attacks is to intimidate and coerce the Government of Israel and its civilian
popUlations. Its benevolent programs are used to enhance its image and earn goodwill in
the Palestinian community.
•
Since it denounced the Oslo accords in 1993, HAMAS has carried out a number of
notorious acts of terror. It staged a series of fatal suicide attacks after Prime Minister
Rabin's assassination in 1996, escalating violence in Israel and disrupting the peace
process.
•
Between October 1, 2000 and September 10, 2001, HAMAS claimed responsibility for at
least 20 bombings, two shootings, one kidnapping and one mortar attack: at least 77
persons, including two American citizens, have been killed in these attacks and at least
547, including four Americans, have been injured. The use of suicide bombers has
become a HAMAS trademark.
The Holy Land Foundation for Relief and Development
• The Holy Land Foundation for Relief and Development, headquartered in Richardson,
Texas, raises millions of dollars annually that is used by HAMAS. Last year, Holy Land
raised over $13 million.
•
Holy Land supports HM1AS activities through direct fund transfers to its offices in the
West Bank and Gaza that are affiliated with HAMAS and transfers of funds to Islamic
charity committees ("zakat committees") and other charitable organizations that are part
ofHAMAS or controlled by HAMAS members.
2
•
The Holy Land Foundation, originally known as the Occupied Land Fund, was
established in California in 1989 as a tax -exempt charity, not a religious organization. In
1992, the Holy Land foundation relocated to Richardson, Texas. It has offices in
California, New Jersey, and Illinois, and individual representatives scattered throughout
the United States, the West Bank, and Gaza.
•
Mousa Mohamed Abou Marzook, a political leader ofHAMAS, provided substantial
funds to the Holy Land Foundation in the early 1990s. In 1994, Marzook (who was
named a Specially Designated Terrorist by the Treasury Department in 1995) designated
the Holy Land Foundation as the primary fund-raising entity for HAMAS in the United
States.
•
Holy Land Foundation funds are used by HAMAS to support schools that serve HAMAS
ends by encouraging children to become suicide bombers and to recruit suicide bombers
by offering support to their families.
Beit EI-Mal Holdings
• Beit el-Mal Holdings is a public investment company with locations in East Jerusalem,
the West Bank, and the Gaza strip. Although its stated business activities are making
loans and investing in economic and social development projects, Beit el-Mal has
extensive ties to HAMAS. The majority of its founders, shareholders, and employees are
associated with HAMAS. Persons identified with HAMAS hold a majority of the
company's stock, and it has invested in projects in Gaza and the West Bank that are
owned or managed by HAMAS activists.
•
Beit el-Mal transfers money to and raises funds for associations that the Palestinian
Authority itself has identified as belonging to HAMAS, and to known HAMAS activists
and convicts who are members of HAMAS.
AI-Agsa Islamic Bank
• AI-Aqsa Islamic Bank, with locations in the West Bank and Gaza Strip, is a financial arm
of HAMAS. Al Aqsa is 20% owned by Beit el-Mal, and the two share senior officers and
directors. In addition, a majority of its shareholders and senior officials have ties to
HAMAS.
•
Individuals associated with the Bank have been previously arrested and charged with
financing HAMAS activities in the Middle East. Soon after the bank opened in 1998 its
connection to HAMAS extremists became evident and a number of banks refused to clear
its transactions.
Update on Progress since the September 23 Executive Order
• On September 23, the President signed Executive Order 13224, expanding the Treasury
Department's authority to block assets and U.S. transactions of persons or institutions
3
associated with terrorists or terrorist organizations. The Order also established our ability to
block the U.S. assets of, and deny access to U.S. markets to, those foreign banks that refuse
to cooperate in freezing terrorist assets.
•
On November 2, HAMAS and 21 other foreign terrorist organizations not related to al Qaeda
were added to the Executive Order.
•
The U.S. has now designated 153 individuals, organizations, and financial supporters of
terrorism pursuant to Executive Order 13224. Designees include terrorists from around the
world.
•
Prior to today's action, the U.S. has blocked over $27 million in assets of the Taliban and al
Qaida, and other nations have blocked at least $33 million.
•
The Treasury Department has established an inter-agency Foreign Terrorist Asset Tracking
Center, and mobilized financial investigators -- under Operation Greenquest - to develop
leads for further enforcement action.
•
The United States has also worked with our allies around the world to ensure coordinated
action.
• 139 nations have blocking orders in force.
• UN Security Council Resolution 1373, sponsored by the U.S. and passed on September
28, requires all nations to deny safe haven to terrorists.
• The 29-nation Financial Action Task Force has articulated concrete steps nations must
take to combat terrorist financing, and invited action plans from all countries to ensure
full implementation by June 2002.
• The G-8 have agreed to work with the coordinating committee of the UN to provide
technical assistance to countries seeking to implement UNSCR 1373.
•
The Administration has sent to the Congress legislation to enable ratification by the U.S. of
the UN Convention on the Suppression of Terrorist Financing.
4
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
CONTACT:
FOR IMMEDIATE RELEASE
December 04, 2001
Office of fir.ancing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
2S-Day Bill
December 06, 2001
January 03, 2002
912795JAO
Term:
Issue Date:
Maturity Date:
CUSIP Number:
1.770%
High Rate:
Investment Rate 1/:
Price:
1. S01%
99.S62
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted
S.16%. All tenders at ~ower rates were accepted in full .
.~OL~TS TENDERED AND ACCEPTED (in thousands)
Tender Type
Accepted
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
Federal Reserve
TOTAL
$
42,503,925
11,304
$
18,988,773
11,304
o
o
42,515,229
19,000,077
777,750
777,750
43,292,979
$
19,777,827
Median rate
1.750%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.710%:
5% of the amount
of accepted competitive tenders 'was tendered at or below that rate.
Bid-to-Cover Ratio
= 42,515,229 ! 19,000,077 = 2.24
1/ Equivalent coupon-issue yield.
http://www. pu bJicdebttreas.gov
PO-842
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
Contact: Peter Hollenbach
(202) 691-3502
FOR RELEASE AT 3:00 PM
December 6,2001
PUBLIC DEBT ANNOUNCES ACTIVITY FOR
SECURITIES IN TJ-m STRIPS PROGRAM FOR NOVEMBER 2001
The Bureau of the Public Debt announced activity for the month of November 2001, of securities within the
Separate Trading of Registered Interest and Principal of Securities program (STRIPS).
DoHar Amounts in Thousands
Principal Outstanding
(Eligible SecUlities)
$2,062,928,371
Held in Unstripped Form
$1,895,228,403
Held in Stlipped FOlm
$167,699,968
Reconstituted in November
$18,760,650
The accompanying table gives a breakdown of STRIPS activity by individual loan description. The balances in
this table are subject to audit and subsequent revision. These monthly figures are included in Table V of the
Monthly Statement of The Public Debt, entitled "Holdings of Treasury Securities in Stripped Fonn."
The Strips Table along with the new Monthly Statement of The Public Debt is available on Public Debt's
Internet ~ite at: www.publicdebt.treas.gov.Awide range of information about the public debt and Treasury
secUlities is also available at the site.
000
PO-843
www.publicdebt.treas.gov
·
TULe V HOLDINGS Of" TREASURY SECtJRmES IN STRIPPED fORM NOVEMBER 30, 2001
ec.pus
AmaIn ~ In 'T'hoI-*
MlNtlyO. .
STRP
CUSIP
lain o-tpdcn
Pcr1Icn Held in
TcDI
I
Treasuy Bonck
CUSIP:
9121110 OW
008
ORB
Dug
ONS
OPO
OS4
OT2
OV7
OW5
0)(3
OYI
OZB
12
AD!
l111MW
0&15tlS
1()'~.
N38
08f1S'05
g..:w
AJ.
~SQ5
"-~4
912800AAi
912803AAI
11115(14
Q2115(15
0&'15(15
II-S'II
1'-V4
I()'S'II
9-718
9121!1OS AB9
~
9-lf4
AFO
7-1/4
7-112
AH8
AK9
8-3'4
Al7
11115(15
02115116
05'15116
11115116
0&15(17
081\51\7
0&15(18
11115(18
Q2I1Sl19
08115(18
02I1S'20
0&1&'20
0811&'20
Q2I1&'21
0&1&'21
0811&'21
1111&"21
0811&"22
1111&"22
03'15123
08115123
EE4
EFI
~.
EG9
8-~4
EK7
7-718
=
=
EJ3
8-118
AW~
EKO
8-118
AXI
AVII
EM6
EN4
8
7-1'.
7-5/8
EP9
7-118
E07
ES3
ETI
7-112
EC8
ED6
as
8-718
9-118
9
8-\14
EW4
7-5/8
8-718
6
EX2
8-~"
EVO
En
1>-112
FAI
EVe
6-S'II
FB9
8-311
1>-118
FE3
5-112
FFO
5-114
5-114
1>-118
1>-114
FG8
FJ2
FM5
FP8
S-3/!!
API
N:l8
ATe
~
::!
B88
BC8
::
BF9
007
BH!5
BJI
BKa
8l.6
BM4
BP7
BV~
BW~
CG6
CH4
CK7
1111&2.
03'1S'25
0811S'25
02f1~
08115128
11115128
0i2fI&'27
0fl/1&'27
T~ IrtIalkn-Ind8lCIId NOles:
In1I118S1 Rate:
CUSIP:
Series:
J
&12827 3A.8
3-S/8
A
2M3
3-311
3TI
A
3-S'II
4Y5
3-718
A
4-114
!1N6
A
8R8
A
3-112
912112OBZ9
8VB
CL9
ON4
EK9
GA9
1111&'27
22,046,3311
l1,T16,201
10,947,052
11,350,341
11,17B,.580
17,043, 162
18,427,848
021151'31
07115102
0111&07
0111 SUI
0111 MIl
01115110
011151'11
Total IrIlaIion-~ NCles,." ...... ,_ ...... ,. ___
Tl'8aSI.rylrilalkn-lncIaMl Bonds:
CUSP:
lnIeresI RaIe:
812810FD5
3-518
FH6
3-718
FQ6
3-311
Bonds..".", __.. _ ......... ,
8,301,806
4.2!10,758
8,289,713
",755,918
5,3118,564
10.783,2l1lI
4,Q23,918
fi.58.4.159
5.501,754
18,823,551
18,824,448
15,819,1!19
11,2D8,35B
8,797.439
7,174,470
13,815,_
18,1N(l.1132
11,781,28
8,057,183
17,724,3011
10,217,673
10,218,781
10.067,482
33,!I97,I114
10,23"1,7SIO
7,746,«115'
18,202.181
22,8511,044
11,704,182
10.129,170
1',.'Q,.207
12,837,1116
11,288,411
10.890,177
9,8116,871
8,602,758
0fl/15128
11115128
0i2fI5/29
0fl/15/29
0511513)
Total Tr&asU')I Balds.... "., ................ ,___.....
TotaIl~lnda>IacI
Fam
R.c:orwIIt1.ted
TI'is McrtI1
IrtIASl AlIa:
8-718
8-118
8-112
EA2
EBO
0-0.0-'"
Pcrtion Held in
SIriDDed Form
4,818,605
1,82D,00B
5,11(),213
4,518,831
2,012,484
7,2112.170
3,483,200
0
2,440,75)
4,159,500
237,288
3,386,100
3,520,4211
58,500
3,22IS,343
7'i17,573
2,953,0119
5,1 .... 7046
18.473,618
17,.91M,83:1
8,819,OIK
8,153,5'77
2,631,770
3571XJt>
348,833
1,4211,818
6,eoo,l06
3,054,781
3,866,400
3,m,rm
4,"4,782
178,357
1,159,248
4,720.52lJ
8,586,540
1,116,rm
4,21lO,545
2.8S1.0311
3,5D3,470
8,500,718
18,0M,665
7,922,02D
3,3lI8,IIII3
9,127,78Il
8,101,573
5,II!i8,2C3
7P1lJ.Q7
14,532,872
8,310,091
s,SI22.831
8,104,881
19,37,100
3,547,202
3,585,589
7.385,.670
11,384,718
6,228,1118
4,9Q5,C17
6,S72.1171
7,2011,556
11,643.939
2.SZT,066
16,184,222
1177,8l1li
3,823,785
8,57,2lX1
3,371,1M4l
8,15I5,l180
8,563,601
4,024.537
1,4l53,2OO
3,057,600
5,984,700
3,228,000
2,3Il4,200
10.402.400
143.GOO
0
153,GOO
5IIa,2OO
71,400
156,800
121 ,GOO
293,75)
60,320
1,671,800
858,600
SU,400
674,rm
1,333,200
297,240
Q7,4OO
445,200
e49,52J
142,400
S88,4OO
275,2IlO
2,194,100
81,2DO
347,000
413,8CXl
ofOIS,58.4
243,2IXl
S704,4OO
523,1140
44l9,2DO
2IlO,2OO
~,2DO
368,400
336,2lX1
1121,200
138,700
1~,701
848,500
10,435,652
322,000
10,513,180
16,8311.058
16,2&19,848
511,400
317,400
585,400
407,104
128,000
5J7,022,115
381,972,411
145,0!i0,474
17,527,834
111,718,1103
17,73\,027
18,551,21»
17,288,383
11 ,,995,52
11,.268.251
18,nll,iJ03
17,731,027
18,c.o.II81
17,318,383
11 ,2118.251
0
0
l1C1,348
0
0
0
0
0
0
0
0
0
95,552.485
115,Q2, 117
110,348
0
0
135,554
0
0
0
0
135,554
0
1',~1
11,l1115,!192
912803~
0411M'8
18,528,8<l1
CFB
CLS
041151211
21,387.2Al
0411~
5,034,t88
18,52Il,841
21.251,887
5.CX34.t88
44l,947,970
44,812,416
280,400
40,800
0
0
TABLE V' HOLDINGS OF TREAsUI'tV Si!CURmes IN STRIPPED "ORaI, NOVEMIER 3O,2D01 - Continued
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TOIa/ T~ Noles.....................................
Grand Taal. .................................................................... ..................................... -.
31.166.321
13,453,346
19,381,251
13,799,902
18.S63,37S
14,3:11.310
17,237,9C3
14.474,873
17,390,900
11,714,397
13.503,890
14,871,11Z3
'3,058,8e4
14,32D,8CQ
12,.231,057
15,057,900
23,858,015
12.731,742
15,072,214
12.808,814
15,144,335
28,.583,892
12.120,580
'5,,058,&!8
12.052.439
14,822,C1O
13, 10CI,840
15,4S2,~
23,582,8111
13,870,354
, 4,885,0Ii5
14. 1'72,8Q2
14,874,853
12,573,248
13,338,&!8
13, 132,243
13,331,fm
13,126.779
14.871.070
'6,003,270
28.011.028
19,852,2113
18,665,038
22,675,482
25,147,970
18,825.785
28.170,803
12,955.077
17.823,228
14,440.372
18.925.363
13,346.487
18,089.808
14,373.780
32,558,145
13,834,754
14,7$.504
2&,5e2.370
15,002.580
15,209,820
2&,062,7;7
15,513,587
16.015,475
27.7Q7.a52
22.740.446
22,459.875
18.801.284
13.103,876
13,958.186
25.636.803
13,583,412
V,I90.961
25.083,125
14.794.790
SI.osa.721
13,3ii18,338
19,378,<151
13,7W,902
18,521.775
14,278,910
17,1118,743
14,474,873
17,390.900
7,182,037
13,5Q3,890
14,849.423
13,058,804
14,315.409
12,2:S1161
15,05B,300
19,13),028
12.731,742
15,072,214
12.734,814
15,,144.335
28,515,482
11.779.7110
14,S1GO,888
, 1,882.II1II3
l4,822..OD
13,100,840
15,,427,C1C14
22,334,075
13,8l!B,3S4
14,885,095
14,17Z082
14,874,853
12,573,248
13,3:18,528
13,103,843
'3,331,fm
13,0Il8,5711
14.871,070
1a.OO3,27O
25,739,7B8
19.680,283
la.665,038
22,875,482
25,147/170
17,.eo.48S
28,170,803
12,354,877
17.8OC,028
4,800
0
~1.flOO
22,400
39,3»
0
0
.,532,SIJO
0
22,400
0
5,200
0
1.800
4,728,889
0
0
7Z0X>
0
7B,400
S40,800
87,840
389.440
0
0
25,800
1,228,818
.....OX>
0
800
0
0
0
28,400
0
V,3»
0
0
2.'Zl1,240
17Z0X>
0
0
0
1.185,3)0
0
eoo.4OO
23,.200
eoa.ooo
13,832,372
la.925,363
11.489,287
18,0Il9,808
14,388.1110
32,6511, 145
13,255.834
14,739,104
0
1,857,200
0
5,800
0
578,920
28,582,370
0
22,43'7.584
23,436.329
28.838.563
15,002.180
14,771,320
21,M3,511
15,508.107
15,287,315
27.797.852
22,700.446
22,398.875
11.758.664
12,83).174
13,885,311
25.139,2D3
13,521.412
21.124.321
25.002.125
'4.no.490
V,240,.584
23,301,OOQ
22,334,584
23,43).809
25.1138,583
1.415.405.050
2.082.928 371
V,389,894
23,355.7011
97.!IOO
55,008
0
0
0
0
0
0
0
0
0
89.900
0
0
0
0
0
0
537,!IOO
0
0
0
0
0
0
0
0
0
0
0
57,.218
0
0
0
0
0
0
0
0
0
0
0
9.eoo
0
0
0
0
0
0
281,800
0
16,800
0
84,800
0
0
0
33,700
400
0
0
0
43Il,eoo
28,000
711,200
5,480
748,180
0
4O,0X>
110,000
8.~
400
....,eoo
'Zl3,504
272.875
.tQ7.800
82.000
86.840
81.000
74,3)0
1511,300
54.700
103,0X>
0
8.000
0
0
0
0
11,200
0
0
0
0
24.txX>
0
0
48,3»
0
0
0
0
1,3113,001.456
22.403,592
1,233,018
1~.403
lti78119_
18780850
5,720
DEPART~IENT
OF
THE
TREASURY
NEWS
TREASURY
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.•
EMBARGOED UNTIL 2: 30 P.M.
December 6, 2001
WASHI~GTON,
CONTACT:
D.C.e 20220 e (202) 622.2960
Office of Financing
202/691-3550
TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction 13-week and 26-week Treasury b~lls totaling $30,000
million to refund an estimated $25,360 million of publicly held 13-week and 26-week
Treasury bills maturing December 13, 2001, and to raise new cash of approximately
$4,640 million.
Also maturing is an estimated $19,000 million of publicly held 4-week
Treasury bills, the disposition of which will be announced December 10, 2001.
The Federal Reserve System holds $10,646 million of the Treasury bills matur~ng
on December 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 b~ll auction to be held December 11, 2001.
Amounts
awarded to SOMA will be in addition to the offering amount.
Up to $1,000 million in noncompetitive blds from Foreign and International
Monetary Authority (FlMA) accounts bidding through the Federal Reserve Bank of New
York will be included wlthin the offering amount of each auction.
These
noncompetitive bids will have a limit of $200 million per account and w~ll be accepted
in the order of smallest to largest, up to the aggregate award limit of $1,000
milllon.
TreasuryDirect customers have requested that we relnvest their maturing holdings
of approximately $1,022 million lnto the 13-week blll and $648 mlilion into the 26week bill.
The allocation percentage applied to blds awarded at the highest discount rate
wlll be rounded up to the next hundredth of a whole percentage point, e.g., 17.13%.
This offering of Treasury securlties is governed by the terms and condltions 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 offerlng
highlights.
000
Attachment
PO-844
For press releases, speeches, public schedules and official biograplIies. call our 24-hour fax line at (]02) 622-2040
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTO,\I, D.C.e 20220. (202) 622.2960
Embargoed Until 4:30 p.m.
December 6, 200 1
Contact: Tara Bradshaw
(202) 622-2960
TREASURY SECRETARY O'NEILL'S SIGNING CERElVIONY STATEiVIENT
UNITED STATES AND ANTIGUA AND BARBUDA SIGN AGREENIENT
TO EXCHANGE TAX INFORMATION
Today Treasury Secretary Paul O'Neill signed a new agreement with Antigua and Barbuda that
will provide for the exchange of information on tax matters between the United States and
Antigua and Barbuda. The agreement was signed by Treasury Secretary Paul O'Neill and
Antiguan Prime Minister and Minister of Finance Lester Bird.
At the signing ceremony, Treasury Secretary Paul O'Neill delivered the following remarks:
"1 would like to thank you all for being here today and I want to vvelcome especially the Prime
Minister of Antigua and Barbuda, Lester Bird, and the other members of the Antiguan delegation
who have traveled here today to witness the signing of this important agreement."
"The agreement we are signing today provides continuing evidence of our commitment to
establishing and maintaining effective information exchange relationships with countries across
the Caribbean and throughout the vvorld. I want to extend my sincere appreciation to the
government of Antigua and Barbuda for demonstrating its desire to cooperate with the United
States in our efforts to ensure adequate enforcement of our tax laws."
"As I have said many times, we have an obligation to enforce our tax laws because failing to do
so UndCl111ines the confidence of honest taxpayers in the faimcss orour tax system. Today's
signing marks another important step forward in our efforts. I look forward to future cooperation
with the government of Antigua and Barbuda in this critically important area,"
-30PO-84S
Fw jYr255 releases, s:!Jezcil:zs, iJublic schedules and vfficial bioFffap'hies. call alAr 24..aiPur [ifiX ZiifJe at f 202 S22·2{)4!)
1
J.
of
~
I
J
.
.
'
j
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N. W. - WASHINGTON, D.C .• 20220. (202) 622·2960
Embargoed unti14:30 p.m.
December 6, 2001
AGREElVIENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF
AMERICA AND THE GOVERNMENT OF ANTIGUA AND BARBUDA FOR THE
EXCHANGE OF INFORMATION WITH RESPECT TO TAXES
The Govemment of the United States of America and the Govemment of Antigua and
Barbuda, desiring to conclude an Agreement for the exchange of infonnation with respect
to taxes (hereinafter referred to as the "Agreement"), have agreed as follows:
ARTICLE I
OBJECT AND SCOPE OF THE AGREEMENT
J.
The Contracting States shall assist each other to assure the accurate assessment
and collection of taxes, to prevent fiscal fraud and evasion, and to develop improved info1111ation
sources for tax matters. The Contracting States shall provide assistance through exchange of
information authorized pursuant to Article 4 and such related measures as may be agreed upon
by the competent authorities pursuant to Article 5.
ARTICLE 2
TAXES COVERED BY THE AGREEMENT
1.
This Agreement shall apply to the following taxes imposed by or on behalf of a
Contracting State:
a)
in the case of the United States of America, all federal taxes.
b)
in the case of Antigua and Barbuda, the following taxes: income tax (personal),
income tax (companies), property tax, business tax (unincorporated), non-citizen
undeveloped land tax, land value appreciation tax, gross turnover tax,
telecommunication licence, stamp duty, hotel tax, guest tax, telecommunication
tax, forei,SIJ1 CUlTency levy, travel tax, insurance levy, hotel guest levy. time
sharing occupancy tax, time sharing service tax, betting and gaming U.lX, money
transfer levy, restaurant and caterers service tax, tax on gross income - offshore
banks, casino licences, banking and insurance licences and fees, and guest levy.
PO-846
For press rzierues, speeches, public schedules and official biogrClphie::;,mU O~;T 24.,'wWt-ja:~ liYie at 'i 21J2) 622·2D10
-
·u.s
Government Prlntlnq Office 1998· 619-559
- 2 2.
This Agreement shall apply also to any identical or substantially similar taxes
imposed after the date of signature of the Agreement in addition to or in place 'of the existing
taxes. The competent authority of each Contracting State shall notify the other of changes in
laws which may affect the obligations of that State pursuant to this Agreement.
3.
This Agreement shall not apply to the extent that an action or proceeding
concerning taxes covered by this Agreement is barred by the applicant State's statute of
limitations.
4.
This Agreement shall not apply to taxes imposed by states, municipalities or other
political subdivisions, or possessions of a Contracting State.
ARTICLE 3
DEFINITIONS
1.
a)
b)
c)
d)
e)
f)
g)
In this Agreement, unless otherwise defined:
The term "competent authority" means:
(i)
in the case of the United States of America, the Secretary of
the Treasury or his delegate, and
(ii)
in the case of Antigua and Barbuda, the Minister of Finance
or his delegate.
The teml "national" means:
(i)
in the case of the United States, any United States citizen
and any legal person, partnership, corporation, trust, estate,
association, or other entity deriving its status as such from the laws
in force in the United States; and
(ii)
in the case of Antigua and Barbuda, any citizen of .A.ntigua
and Barbuda and any legal person, partnership, company, trust,
estate, association, or other entity deriving its status as such from
the laws in force in Antigua and Barbuda.
The tenn "person" includes an individual and a partnership, corporation, trust,
estate, association or other legal entity.
The tenll "tax" means any tax to which tIte Agreement applies.
The term "information" means any fact or statement, in any form whatever, that
may be relevant or material to tax administration and enforcement, including (but
not limited to):
(i)
testimony of an individual, and
(ii)
documents, records or tangible property of a person or Contracting State.
The tenns "applicant State" and "requested State" mean, respectively, the
Contracting State applying for or receiving infonllation and the Contracting State
providing or requested to provide such infonllation.
For purposes of detennining the geographical area within vvhich jurisdiction to
compel production of infom1ation may be exercised, the teml "United States"
means the United States of America, including PutliO Rico, the Virgin Islands,
Guam, and any other United StZltes possession or territory.
- 3 h)
For purposes of detennining the geographical area within which
jurisdiction to compel production of infonnation may be exercised, the tenn
"Antigua and Barbuda" means the State of Antigua and Barbuda and the
territorial waters thereof.
2.
Any term not defined in this Agreement, unless the context otherwise requires or
the competent authorities agree to a common meaning pursuant to the provisions of Article 5,
shall have the meaning which it has under the laws of the Contracting State relating to the taxes
which are the subject of this Agreement.
ARTICLE 4
EXCHA.~GE
OF INFORMATION
1.
The competent authorities of the Contracting States shall exchange infonnation to
administer and enforce the domestic laws of the Contracting States concerning taxes covered by
this Agreement, including infonnation to effect the determination, assessment, and collection of
tax, the recovery and enforcement of tax claims, or the invcstigation or prosccution of tax crimes
or crimes invo lving the contravention of tax administration. Information shall be exchanged to
fulfill the purpose of this Agreement without regard to whether the person to whom the
infonnation relates is, or whether the information is held by, a resident or national of a
Contracting State, provided that the infOlmation requested is covered by this Agreement.
2.
The competent authority of the requested State shall endeavor in good faith to
provide infonnation upon request by the competent authority of the applicant State for the
purposes referred to in paragraph 1. If the infonnation available in the tax files of the requested
State is not sufficient to enable compliance with the request, that State shall take all relevant
measures to provide the applicant State with the information requested. Privileges under the
laws or practices of the applicant State shall not apply in the execution of a request but shall be
preserved for resolution by the applicant State.
3.
The requested State shall endeavor in good faith to provide inf01111ation requested
pursuant to the provisions of this article regardless of whether the requested State needs such
infonnation for purposes of its own tax. If specifically requested, the requested State shall
endeavor in good faith to provide infom1ation under this Article in the [01111 of depositions of
witnesses and authenticated copies of unedited original documents (including books, papers,
statements, records, accounts and writings), to the same extent such depositions and documents
can be obtained under the laws and administrative practices of the requested State with respect to
its own taxes.
4.
The provisions of the preceding paragraphs shall not be construed so as to impose
on a Contracting State the obligation:
a)
to cany out administrative measures at variance with the laws and administratiyc
practice of that State or of the other Contracting State;
b)
to supply particular items 0 f infonllation which are not obtainable under the laws
or in the n01111al course of the administration of that State or of the other
Contracting State;
- 4 -
c)
to supply information which would disclose any trade, business, industrial,
commercial or professional secret or trade process:
d)
to supply information, the disclosure of which would be contrary to public policy;
e)
to supply information requested by the applicant State to administer or enforce a
provision of the tax law of the applicant State, or any requirement connected
therewith, which discriminates against a national of the requested State. A
provision of tax law, or connected requirement, will be considered to be
discriminatory against a national of the requested State if it is more burdensome
with respect to a national of the requested State than with respect to a national of
the applicant State in the same circumstances. For purposes of the preceding
sentence, a national of the applicant State who is subject to tax on worldwide
income is not in the same circumstances as a national of the requested State \\'ho
is not subject to tax on worldwide income. The provisions of this subparagraph
shall not be construed so as to prevent the exchange of infonnation with respect to
the taxes imposed by the United States or Antigua and Barbuda on branch profits
or on the premium income of nonresident insurers or foreign insurance
compames.
f)
Notwithstanding subparagraphs (a) though (e) of this paragraph, the requested
State shall have the authority to obtain and provide, through its competent
authority, infornlation held by financial institutions, nominees, or persons acting
in agency or fiduciary capacity (not including infonnation that would reveal
confidential communications between a client and an attorney, solicitor or other
legal representative where the client seeks legal advice), or infornlation respecting
ownership interests in a person.
S.
Except as provided in paragraph 4, the provisions of the preceding paragraphs
shall be constnred so as to impose on a Contracting State the obligation to use all legal means
and its best efforts to execute a request. A Contracting State may, in its discretion, take measures
to obtain and transmit to the other State information which, pursuant to paragraph 4, it has no
obligation to transmit.
6. The competent authority of the requested State shall allow representatives o[the
applicant State to enter the requested State to interview individuals and examine books and
records with the consent of the individuals contacted. Representatives orthe requested State
shall have the opportunity to be present at any such interview or examination.
7. Any information received by a Contracting State shall be treated as confidential in the
same manner as information obtained under the domestic laws of that State and shall be
disclosed only to individuals or authorities (including judicial and administrative bodies)
involved in the determination, assessment, collection, and administration of, the recovery and
collection of claims derived from, the enforcement or prosecution in respect of, or the
determination of appeals in respect of, the taxes which are the subject of this Agreement, or the
oversight of the above. Such individuals or authorities shall use the information only for such
purposes. These individuals or authorities may disclose the inf0l111ation in public court
proceedings or in judicial decisions. Infornlation shall not be disclosed to any third jurisdiction
for any purpose without the consent of the Contracting State originally fumishing the
infoffilati on.
- 5 -
ARTICLE 5
MUTUAL AGREEMENT PROCEDURE
l.
The competent authorities of the Contracting States shall agree to implement a
program to carry out the purposes of this Agreement. This program may include, in addition to
exchanges specified in Article 4, other measures to improve tax compliance, such as exchanges
of technical know-how, development of new audit techniques, identification of new areas of noncompliance, and joint studies of non-compliance areas.
2.
The competent authorities of the Contracting States shall endeavor to resolve by
mutual agreement any difficulties or doubts arising as to the interpretation or application of this
Agreement. In partiCUlar, the competent authorities may agree to a common meaning of a teml,
and may determine when costs are extraordinary for purposes of Atiiclc 6.
3.
The competent authorities of the Contracting States may communicate with each
other directly for the purposes of reaching an agreement under this Article.
ARTICLE 6
COSTS
Unless the competent authorities of the Contracting States otherwise agree, ordinary costs
incurred in providing assistance shall be borne by the requested State and extraordinary eosts
incurred in providing assistance shall be borne by the apphcant State. The requested State shall,
before fulfilling a request, inform the applicant state if it believes the costs of fulfilling such
request will be extraordinary. The competent authorities of the Contracting States agree to
consult on an ongoing basis with respect to costs incurred or potentially to be incurred under this
Agreement and with a view to minimizing such costs.
ARTICLE 7
IlVIPLEMENTATION
A Contracting State shall enact such legislation as may be necessary to effectuate this
Agreement.
ARTICLE 8
OTHER APPLICATIONS OF AGREEMENT
Tl1is Aareemcnt
is consistent with the standards for an exchan~e of infomlation
v
agreement described in section 274(h)(6)(C) of the United States Intemal Re\'enue Code of 1986,
as amended (relating to deductions for attendance at foreign conventions).
~
ARTICLE 9
- 6 ENTRY INTO FORCE
This Agreement shall enter into force upon an exchange of notes by the duly authOlized
representatives of the Contracting States, confinning their mutual agreement that both sides have
met constitutional and statutory requirements necessary to effectuate this Agreement.
ARTICLE 10
TERMINATION
This Agreement shall remain in force until terminated by one of the Contracting States.
Either Contracting State may terminate the Agreement at any time after the Agreement enters
into force provided that at least three months prior notice of termination has been given through
diplomatic channels.
IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective
governments, have signed this Agreement.
DONE at Washington, in duplicate, this sixth day of December, 2001.
FOR THE GOVERNMENT OF
THE UNITED STATES OF AMERICA:
FOR THE GOVERNMENT OF
ANTIGUA AND BARBUDA:
OFFICE OF PUBLIC AFFAIRS -ISOO PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.- 20220 _ (202) 622.2960
fOR IMMEDIATE RELEASE
December 6,
CONTACT:
2001
of Financing
202/691-3550
Off~ce
TREASURY ANNOJNCES HOLIDAY WEEK
RESCHEDULI~G
Presider.t Bush anno_lnced ::.oday that Monday, Decemrwr 2L., ;:elY)1, 'vJill
be a Fede~al hollday.
Accordi~gly, Treasury has rescheduled tte aectioD
dates for all auctions scheduled for tha~ week.
The 4-week, 13-week and 26-week bill auctions have been rescteduled
Wednesday, December 26, 2001.
T~e closing times for receipt of
noncompetitive and conpetltlve tenders on the L.-week bill will be at
11:00 a.m. and 11:30 a.m. eastern time, respectively.
The clusing times
for receipt of noncompetitive and competitlve tenders for the 13-week
and 26-week bills will be :2:00 noon and 1:00 p.m. eastern t:me,
respectively.
The 2-year note auction tentatively scheduled for
December 26, 2001, has been rescheduled for Thursday, December 27, 2001.
~or
Tree 2-year note auction will be anllouflced on Wednesday,
December 19, 2001.
The L.-week, 13-VJeek and 26-week bi~l 3uctlc,ns ',vi 1 ~
all De announced or: Thursday, December 20, 2001.
000
PO-847
For press releuses. speeches, pliblic schedules and official hiographies. call our J4-//Our fax IiI/I! at (J()J) 6:l:l-:l040
OFFICE OF PUBLIC AFFAIRS • 150() PENNSYLVANIA AVENUE, N.W.• WASHINGTO,'1, D.C.e 20220 e (202) 622.2960
FOR IMMEDIATE RELEASE
December 7, 2001
Contact: Rob Nichols
(202) 622-2910
Keynote Remarks to the Harvard Law School Symposium on
Building the Financial System for the 21 st Century
U.S. Deputy Treasury Secretary Kenneth W. Dam
December 7, 2001
Gotemba, Japan
Thank you.
I would like to thank Hal Scott - a student of mine some years back at
the University of Chicago - for inviting me to speak: to you tonight.
The title of this symposium is ambitious. I should probably tell you at
the outset, that over the course of the next twenty minutes, I don't
intend to reveal a new plan for "Building the Financial System of the
21 st Century." Nor do I intend to lecture my Japanese colleagues on
what their financial refom1 agenda should be. The United States has
made that mistake before.
Instead, President Bush has made it clear that hc wants to build a new
relationship with our friends in Japan. We want to exchange ideas,
not impose them. And we want to exchange them broadly, with all
aspects of Japanese society: its people, academics, representatives of
the media, business leaders and government.
So, while I don't intend to reveal a blueprint for the Financial System
of the 21st Century, I do hope to continue a discussion a society-tosociety dialogue, if you will - about some of the important economic
and financial issues now facing Japan and the (j nited States.
To be sure, much has been said about the positive steps Japan has
taken to strengthen its banking system in recent years. Japan has
made great strides in refomling its bank supervisory system. It has
enhanced transparency and disclosure requirements, improved bank
resolution techniques, and recently put in place a new bankruptcy
regIme. These are impOliant and necessary rCf0I111s.
PO-S4S
Porpress releases, speeches, public 5chedules and official lJiog-f"aphies, ,rail {Jur 24-hDurla;~ lin.? '2i (202) 622·2fJ>4v
-
·U.S Government Frlntlnq Office 1998· 619-559
But clearly, there is still much left to do. If Japan is to achieve the 3
to 4 % real growth rate that Secretary O'Neill and I believe it can, the
massive overhang of non-perfonning loans in the banking sector
needs to be resolved swiftly and efficiently.
We've all heard the advice. Japan should follow the example the
United States set in dealing with its savings and loan crisis in the late
1980s and early 1990s. Japan should act quickly to recapitalize or
otherwise resolve failing banks and sell their non-performing assets,
the conventional wisdom holds.
While I certainly agree with that advice, T'd like to shift the dialogue
away from what seems to be an obvious answer, and instead talk
about some of the specifics. 1'd also like to broaden the dialogue to
include not only the U.S. experience, but also the experiences of
Sweden and Korea.
Let me be clear though. I am not just talking about disposing of nonperfonning loans. The disposal of non-perfonning assets is equally,
and in many cases, more important. Real assets - be they real estate,
capital goods or viable divisions of failed conglomerates - must be
put to effective use to revitalize Japan's economy. The process is far
less important than the result: putting real assets back to work in the
rcal economy.
United States
In the united States, we tried everything to avoid the process of
resolving bad loans and swiftly disposing of assets. We lowered
minimum capital requirements for our financial institutions. We
allowed them to defer loan losses. We "averaged" certain liabilities
over 5-year periods. We even tried injecting "good will" capital into
merged institutions. Of course, the more we put things off, the harder
it was to get started.
There were reasons the Lnited States was slow to start the loan
resolution and asset disposal process on a large scale. For one thing,
there were serious budgetary constraints. As you know, our federal
budget deficit grew rapidly during the early 1980s. And the C.S.
Congress lacked the political will to dive11 revenues being spent on
traditional government programs to a national financial "bailout."
Compounding our budgetary constraints were legal constraints, like
the Gramm-Rudman Act, which limited our ability to increase total
spending.
Once we came to grips with the size and cost of resolving our banking
problems, the fear that assets from failed financial institutions might
be sold below market prices dragged out the resolution process even
further. To prevent this, the 1989 law that established the Resolution
Trust Corporation required the RTC to sell assets for no less tl,an 95%
of the appraised value and to minimize the disruption of local real
estate markets.
The result-predictably-was less than impressive. The RTC
disposed of real estate holdings worth only $1.8 billion in 1989 and
$3.5 billion in 1990. By the end of 1990 the RTC's real estate
inventory grew to $18 billion. At the time, many criticized the RTC
for failing to sell loans and property - "warehousing" was the term
used in the United States - especially because the loans and property
typically fell in value while under government management.
Then, in 1991, we stopped focusing exclusively on appraised value
and started thinking about actual value. We realized that the longer
our real assets stayed locked up on the RTC's books, the more they
would deprive the economy of their productive value and the more
they would depreciate in value. As one farsighted critic put it, "junk
rusts." Congress mandated that the RTC dispose of assets as quickly
as possible and divest real estate below the appraised value if
necessary.
This set the RIC in motion. It disposed of $5 billion in real estate in
1991, $7.3 billion in 1992, and $7.8 billion in 1993. The RTC also
disposed of good, perfonning assets held by failed institutions. In fact,
total RIC asset disposals increased from $25 billion in 1989 to $122
billion in 1991, before tapering off The RTC nearly disposed of its
entire asset portfolio by 1995-$450 billion-before closing up shop.
An interesting thing happened along the way. Once we committed to
selling the RIC's real assets quickly, we discovered that the prices,
while initially weak, began to improve rapidly.
In its first regional loan auction in Dallas in July 1991, for example,
the RTC got an average of just 20 cents on the dollar for 22 loan pools
with a total book value of some $25 million. At a May 1992 auction
in San Antonio, the R TC got just 17 cents 011 the dollar. Some
investors who bought assets at these initial auctions quickly resold
them and made huge profits. While that exposed the RTC to some
criticism, it also attracted more buyers at future auctions, and the
prices improved. Greed proved to be a valuable incentive.
3
Many also feared that if the RTC sold assets quickly, the sales would
overwhelm demand with supply and drive prices down. It tumed out,
that the market already had discounted prices to account for future
asset sales by the RTC. The overhang of bad loans and collateral had
already depressed prices. As sales began trimming the overhang,
market expectations reversed. Prices could only rise once the RTC
started selling assets.
Indeed, the rebound in the distressed loan and property markets was
dramatic. The RTC got 36 cents on the dollar at its next San Antonio
loan auction - an increase of more than 100% in just three months. At
its next Dallas loan auction, in October 1992, the RTC got 62 cents on
the dollar - a 200% increase from 1991. After the success of these
regional loan auctions, the RTC shifted to national loan auctions, and
by December 1995, it was capturing 70 cents on the dollar.
The results from asset securitiza60ns and other disposal methods
showed a similar trend. RIC officials have said that local property
owners and investors initially begged the RIC not to sell property in
their area out of concerns that such sales would depress prices. But
after a while, those same people would visit the RTC and beg for
asset sales in their areas to get the property market moving again. I
believe the same can happen in Japan.
Sweden
The experience of other major industrialized countries, who have had
financial crises similar to - or even greater than - the U.S. savings
and loan debacle, reinforces the notion that aggressive asset disposal
is the best course.
During the early 1990's, Sweden suffered a systemic banking crisis.
During the crisis, Sweden's seven largest banks, which held 90% of
the banking sector's total assets, suffered heavy losses. These losses
were so staggering that five of the seven banks were forced by equity
requirements to seek capital from the private sector and the
govemment. As the magnitude of its banking problems became more
apparent, the Swedish government had to act quickly to avoid a
systemic breakdown.
First, the Swedish government aJUlounced that it would guarantee the
Secondly, and more
total liabilities of its banking system.
importantly, Sweden empowered its government asset management
corporation, Securum, to investigate and assess all loan losses, to
assign realistic values to any underlying collateral, and to dispose of
non-perforn1ing assets quickly and efficiently. Securum also hastened
restructuring in the real estate sector by acting as a lead agent for
creditor coordination.
In the face of a weak economy, Sweden then pressed forward with
aggressive asset sales and restructuring that helped put it back on the
path of long-tenn economic growth. Within six years, Securum had
disposed of assets amounting to 8% of Sweden's banking sector.
Since 1997, Sweden has grown by more than 3.5% each year and
unemployment recently fell to a 10-year low of 4. 7%.
Korea
Korea's recent experiences also show that aggressive asset disposal
can help restore economic growth. In Korea, 7% of GDP has already
been spent to clean up the balance sheets of its financial institutions
and indications are that more progress is being made. In Korea,
aggressive asset disposal has had a direct impact on overall corporate
profitability.
Aggressive asset disposal has been effective in helping to deleverage
Korea's corporate sector. The numbers speak for themselves. Lower
financing costs have translated into higher corporate profits, as the
debt-to-equity ratio in Korea's corporate sector fell from over 300%
in 1998 to less than 200% in the first half of this year. This, in tum,
has translated into higher corporate profitability. Recurring corporate
profit margins for the first half of 2001 were 3.7 percent compared to
2.6 percent for the first half of the 1990s.
Like the United States, Korea has also experimented with various
asset disposal methods, from holding domestic and international
auctions to individual corporate loan sales. On this point, I'd like to
emphasize the importance of using the market to optimize the
disposal of collateral. In the 1990's, the RTC was blessed to be able
to unload assets into competitive and deregulated marketplaces. This
all but ensured that "inert" assets would be put to their most
productive and efficient use. In Korea, the same has largely been
true.
But Korea's experience highlights an even more important theme.
Since we know that non-performing loans ""freeze" the productive
value of real estate as much as they do corporate assets - even whole
divisions of large conglomerates - real financial refom1 requires that
aggressive action also he taken to improve the environment for
corporate restructuring.
5
In my OpInIOn, there is a clear linkage between financial sector
restructuring, or the removing non-perfom1ing loans from bank
balance sheets, and corporate restructuring, the need for corporations
to deleverage and shed marginal divisions.
I understand that a successful restructuring program is not easy. It
involves reaching agreement between debtors and creditors on both
debt write-down and operational restructuring. And from a policy
viewpoint, corporate restructuring, by its very nature, is not conducive
to a top-down approach. While government can and should create an
environment conducive to restructuring - for example, by improving
accounting and disclosure standards and streamlining bankruptcy and
disclosure regimes - corporate restructuring works best as an organic
process. The parties to restructuring - creditors and debtors - must
see that completing the restructuring process is in their own best
interests.
As some of you may know, a number of countries have adopted some
variant of the "London approach" to out-of-court restructurings of
unsustainable corporate debt. Promoted by the Bank of England, the
London approach encourages debtors and creditors to follow
procedures that protect the interests of creditors while avoiding valuedestroying cOUliroom delays and inexorable liquidations of potentially
viable debtors.
It \vas encouraging to see that the out-of-court multi-creditor
corporate workout guidelines developed by the Japanese Bankers'
Association and the Keidanren follow the principles outlined by the
International Federation of Insolvency Professionals (INSOL). These
Guidelines have the potential to help resolve Japan's bad loan
problem by providing an alternative to lengthy legal proceedings.
However, the Guidelines appear rather strict relative to legal
procedures under the Civil Rehabilitation Law and the Corporate
Rehabilitation Law. Hopefully, the relevant parties will apply these
Guidelines flexibly so that they can be used to maximum advantage.
Conclusion
In mentioning the experiences of the United States, Sweden and
Korea, r do not mean to suggest that it will be easy tor Japan to
swiftly take the bulk of its non-performing loans and non-perf0n11ing
assets to market. In some ways, I think. it will be harder.
For one reason, the size of Japan's problem is larger. U.S. problem
loans were only about 5% of GDP. Some estimate the magnitude or
Japan's problem loans to be 20-30% ofGDP.
6
Second, the rate of out-and-out failure of financial institutions in
Japan is slower. During the U.S. crisis, interest rates were much
higher than they are now in Japan. under-performing loans quickly
became non-performing loans, and more institutions failed at a faster
pace. Over 1,000 institutions failed during the U.S. crisis from 1986
to 1995. In Japan, this number has been much smaller. Since 1995,
only 116 Japanese financial institutions have failed. Ironically, our
faster rate and larger number of failures may have helped us recognize
that we had to get started more immediately.
Third, the fall in commercial property prices III Japan is more
pronounced. Commercial property prices in Japan's major
metropolitan areas are down 83% from their peak in the late 19805.
Land prices are now back down to their 1980 level -- six years before
Japan's asset price "bubble" began -- and they're still falling, more
than 10% each year. This pronounced fall in asset prices has also
exacerbated fear about selling loan collateral at too Iowa price. But
this is not a reason to wait. More likely than not, the market has
already factored these sales into current prices. If anything, the
dramatic fall in prices is a reason to sell. Keeping assets - in this
case, real estate - locked up in non-productive hands only deprives
the Japanese economy of their real value.
In closing, Secretary O'Neill and I believe that Prime Minister
Koizumi and his govemment are on the right track toward creating a
system that appropriately values assets and puts them to their most
productive use. \Ve also believe that it won't be easy, and that it will
require honest dialogue between Japan and the United States. We do
take comfort, however, in knowing that the hardest part of the process
is just to get started.
Thank you.
7
DEPARTI\lENT
OF
THE
TREASURY
omCE OF PUBUCAFFAIRS .1500 PENNSYLVANlAAVENUE, N.W.· WASHlNGTON, D.C .• 20220. (202) 622.2960
FOR IMMEDIATE RELEASE
December 5, 2001
Contact: Public Affairs
(202) 622-2960
MEDIA ADVISORY:
UNITED STATES AND ANTIGUAA.~D BARBUDA WILL SIGN TAX
INFORMATION EXCHANGE AGREEMENT ON THURSDAY
Treasury Secretary Paul H. O'Neill will hold the United States-Antigua and
Barbuda tax information exchange agreement signing ceremony at 4:30 p.m. EST on
Thursday, December 6, 2001 in the Treasury Department's Diplomatic Reception Room
(Room 3311), 1500 Pennsylvania Avenue, NW. Treasury Secretary O'Neill and
Antiguan Prime Minister Lester Bird will be signing the tax information exchange
agreement.
The Room will be available for pre-set at 3:30 p.m.
Media without Treasury or White House press credentials planning to attend
should contact Treasury's Office of Public Affairs at (202-622-2960) with the following
information: name, social security number and date of birth. This information may also
be faxed to (202) 622-1999.
-30PO-849
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622·2040
·u.s
Government Pnntlnq Office 1998· 619-559
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.. 20220. (202) 622.2960
FOR IMMEDIATE RELEASE
December 7,2001
Contact: Betsy Holahan
202-622-1997
MEDIA ADVISORY
Secretary O'Neill and Treasurer Marin To Unveil "Patriot Bond"
Secretary of the Treasury Paul H. O'Neill and U.S. Treasurer Rosario Marin will unveil
Series EE savings bonds designated as "Patriot Bonds" on Wednesday, December 12, 2001.
They will be joined by Bureau of Public Debt Commissioner Van Zeck, Sens. Mitch McConnell
(R-KY), Tim Johnson (D-SD), Conrad Bums (R-MT) and Rep. John Sweeney (R-NY).
The event will take place at 11 :00 a.m. EST in the Diplomatic Room (Rm. 3311) at the
Department of the Treasury, 1500 Pelllisylvania Ave., NW, Washington, DC.
The room will be available [or pre-set at 10:00 a.m. on Wednesday. News 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 Dec. 12 with the
following information: name, social security number and date of birth. This infom1ation may
also be faxed to (202) 622-1999.
PO-8S0
For press releases, sjJe?ches,
iJublic
schedules and fJfiiciai
bioora1Jhies,
.
~
~J;J.-~.
l.
'C::1!l
.ow' .2~j-;wltrJra;;;
·U.S Gove:nment Prlntlnq Office 1998· 619-559
OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.e 20220. (202) 622.2960
For Immediate Release
December 7,2001
Contact: Tara Bradshaw
(202) 622-2014
SECRETARY O'NEILL COlYIlYIENTS ON STATUS OF
ECONOMIC STIMULUS PACKAGE
Treasury Secretary Palll 0 'Neill mude the /ollOlving comments
stirnulus package:
all
the slatus of the ecol/omic
On October 5, President Bush asked Congress to enact an economic security package. He asked
very specifically for four provisions to strengthen our economy and create jobs: accelerating
depreciation to stimulate investment, eliminating the corporate alternative minimum tax so
employers hit by the downturn can retain and create jobs, providing relief to taxpayers who
didn't get tax rebate checks this summer, and accelerating the already-enacted income tax rate
cuts to put more money in people's pockets and help small businesses create and retain jobs.
Today's unemployment numbers reinforce that we need a stimulus package to strengthen our
economic recovery and put people back to work.
The House quickly passed a bill that included all the provisions the President requested. The
legislative year is coming to an end, and still the Senate hasn't acted. First they failed to pass a
bill. Now, after finally agreeing to a conference process to negotiate an economic stimulus,
Senator Daschle has created an impossible hurdle for the negotiators. With his insistence that
two-thirds of Senate Democrat's sign off on a stimulus package, Senator Daschle has rendered
Senate Democrat conferees powerless in negotiating an agreement. Instead, 18 Senators can
block any economic stimulus package, even one supported by a bipariisan majority.
Make no mistake, we remain committed to enacting a real economic security bill right now,
without further delay or preconditions. By refusing to respond to the President's repeated call
for action, Senator Daschle is delaying America's economic recovery and threatening
Americans' job security.
--30-PO-8S1
·u.s
Government Prlntlnq Office
1~ge·
619-0,59
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVE:-.IUE, N.W. - WASHINGTO,'1, D.C.e 20220 _ (202) 622.2960
FOR IMMEDIATE RELEASE
December 7,2001
Contact: Betsy Holahan
202-622-2960
James E. Gilleran Sworn in as Director of the Office of Thrift Supervision
James E. Gilleran was sworn in today as Director of the Department of the Treasury's
Office of Thrift Supervision (OTS) by Treasury Secretary Paul H. O'Neill. He was confinned by
the U.S. Senate on November 28,2001.
As Director of the OTS, Mr. Gilleran oversees an organization that regulates and
supervises 1,037 U.S. thrifts with $974 billion in assets, as well as thrift holding companies. The
OTS has approximately 1,180 staff members.
Mr. Gilleran previously served as California State Banking Superintendent from 1989 to
1994, a particularly volatile economic period both for the State of California and the banking and
thrift industries. He also served as Chairman of the Conference of State Banking Supervisors
from 1993 to 1994, and was a member of CSBS's Bankers Advisory Council until 2000. From
1991 to 1992, Mr. Gilleran was Chairman ofthe State Liaison Council of the Federal Financial
Institutions Examination Council.
In addition to his bank supervisory experience, Mr. Gilleran has significant bank
operating experience, serving as the Chairman and CEO of the Bank of San Francisco from
October 1994 until December 2000.
Mr. Gilleran is a certified public accountant and holds a law degree from NOlihwestern
Cal1fomia University.
Mr. Gilleran is married with two children and resides in Washington, DC.
-30-
PO-8S2
Far press releases, speeches, public schedules and Dfficial biographies, mil ou.:' 24·iwur fax r'inc
--
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[Il
{202) iJ)22·2!}-fO
Government Prlntlnq Olf'ce 1998· 619-559
DEPARTMENT
OF
THE
lREASURY ((~.·····.~J.i
\~~.:e..
'\'<'~'\'"
TREASURY
NEW S
~~/781q~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
..............................
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON. D.C.. 20220. (202) 622-2960
For Immediate Release
December 10, 2001
Contact: Tara Bradshaw
(202) 622-2014
TREASURY HELPS SMALL BUSINESSES SIMPLIFY THEIR
ACCOUNTING PROCEDURES
The Treasury Department and the Internal Revenue Service have issued guidance
allowing certain small businesses with gross receipts of $1 0 million or less to use the
cash method of accounting for their income and expenses.
Long-standing Treasury regulations require taxpayers to keep inventories, and use an
accrual method of accounting, if the purchase, production or sale 0 f merchandise is an
income-producing factor in the taxpayer's business. For many small businesses - service
providers, in particular - it was unclear whether the taxpayer was selling merchandise and
if that sale of merchandise was an income-producing factor. The guidance issued by
Treasury and the IRS today provides clarity for these taxpayers.
"We believe this guidance provides substantial administrative relief to qualified small
business taxpayers by simplifying their bookkeeping requirements and providing
certainty about what the rules are. The certainty the guidance provides will resolve the
long-running controversy between small business taxpayers and the IRS about the use of
the cash method," stated Mark Weinberger. Treasury Assistant Secretary for Tax Policy.
"Resolution of this issue will permit taxpayers to use their resources to expand their
businesses and the IRS to devote its resources to pressing compliance issues," he added.
Proposed Guidance:
The proposed guidance provides four safe harhors pem1itting certain taxpayers with
average annual gross receipts of $10,000,000 or less to use the cash method:
1.
The taxpayer may use the cash method if its principal business activity is not retailing,
wholesaling, manufacturing, mining, publishing or sound recording. The taxpayer
determines its principal business activity by reference to the codes in the North American
Industry Classification System, published by the Department of Commerce.
The taxpayer may use the cash method if its principal business activity is the provision of
services, even if the taxpayer is providing property incident to the services.
PO-8S3
For press releases, speeches, public schedules and official biographies. call our 24-hourfax lille at (202) 622-2()4()
·u.s
Government Prlntlnq Office 1998· 619·559
3.
The taxpayer may use the cash method if its principal business activity is custom
manufacturing as defined in the guidance.
4.
Regardless of the taxpayer's primary business activity, the taxpayer may use the cash
method with respect to any separate and distinct trade or business that satisfies one of the
first three safe harbors.
A taxpayer (or a trade or business) meeting one of these safe-harbors must defer
deductions for items purchased for resale and raw materials purchased for use in
producing finished goods until the taxpayer sells the item to a customer.
A copy of Notice 200 J-76 is attached.
Part III - Administrative, Procedural, and Miscellaneous
Proposed Revenue Procedure Regarding the Cash Method
Notice 2001-76
Pursuant to the discretion granted the Commissioner of Internal Revenue under §§
446 and 471 of the Internal Revenue Code, this notice provides a proposed revenue
procedure that will allow qualifying small business taxpayers with gross receipts of less
than $10 million to use the cash receipts and disbursements method of accounting as
described in the proposed revenue procedure with respect to eligible trades or businesses.
This proposed revenue procedure is intended to reduce the administrative and tax
compliance burdens on certain smal1 business taxpayers and to minimize disputes
between the Internal Revenue Service (Service) and these taxpayers regarding the
requirement to use an accrual method of accounting under § 446 of the Code because of
the requirement to account for inventories under § 471. Although this revenue procedure
is being issued in proposed form, taxpayers may rely on it for taxable years ending on or
after December 3 L 2001.
The Service believes that § 263A will have limited applicability to resellers and
producers with gross receipts of $10,000,000 or less because of the exception for resellers
in § 263A(b)(2)(B) and the indirect cost exception for producers in §1.263A-2(b)(3)(iv).
However, the Service requests comments on any additional relief that should be
considered for taxpayers with gross receipts of $1 0,000,000 or less to relieve any
administrative burden of § 263A. The Service also welcomes other comments on the
proposed revenue procedure provided in this notice. Comments should be submitted by
March 1,2002, either to:
Internal Revenue Service
P. O. Box 7604
Ben Franklin Station
Washington, DC 20044
Attn: CC:PA:T:CRU (IT A)
Room 5529
or electronically via the Service internet site at:
Notice.Comments@ml.irscounsel.treas.go\, (the Service Comments e-mail address).
Rev. Proc. 2001-XX
SECTION 1. PURPOSE
In order to reduce the administrative and tax compliance burdens on certain small
business taxpayers and to minimize disputes between the Internal Revenue Service
(Service) and small business taxpayers regarding the requirement to use an accrual
method of accounting (accrual method) under § 446 of the Internal Revenue Code
because of the requirement to account for inventories under § 471, this revenue procedure
provides that the Commissioner of Internal Revenue will exercise his discretion to allow
qualifying small business taxpayers to use the cash receipts and disbursements method of
accounting (cash method) as described in this revenue procedure with respect to eligible
trades or businesses. This revenue procedure also provides the procedures for these
qualifying small business taxpayers to obtain automatic consent to change to the cash
method for such trades or businesses.
SECTION 2. BACKGROUND
.01 Section 446(a) provides that taxable income must be determined under the
method of accounting on the basis of which the taxpayer regularly computes income in
keeping its books .
.02 Section 446( c) generally allows a taxpayer to select the method 0 f accounting
it will use to compute its taxable income. A taxpayer is entitled to adopt anyone of the
permissible methods for each separate trade or business, including the cash method and
an accrual method, subject to certain restrictions. For example, § 446(b) provides that the
selected method must clearly reflect income. In addition, § 1.446-1 (c )(2)(i) of the
Income Tax Regulations requires that a taxpayer use an accrual method with regard to
purchases and sales of merchandise whenever § 471 requires the taxpayer to account for
inventories, unless otherwise authorized by the Commissioner under § 1.446-1 (c )(2)( ii).
Under § 1.446-1(c)(2)(ii), the Commissioner has the authority to permit a taxpayer to use
a method of accounting that clearly reflects income even though the method is not
specifically authorized by the regulations .
.03 Section 447 generally requires the taxable income from farnling of a C
corporation engaged in the trade or business of farming, or a partnership engaged in the
trade or business of farming with a C corporation partner, to be determined using an
accrual method, unless the C corporation meets the $1,000,000 ($25,000,000 for family
corporations) gross receipts test .
.04 Section 448 generally prohibits the use of the cash method by a C corporation
(other than a farming business and a qualified personal service corporation) and a
partnership with a C corporation partner (other than a fanning business and a qualified
personal service corporation), unless the C corporation or partnership with a C
corporation partner meets the $5,000,000 gross receipts test. Section 448 also prohibits
tax shelters from using the cash method .
.05 The cash method generally requires an item of income to be included in
income when actually or constructively received and pernlits a deduction for an expense
when paid. Section 1.446-1 (c)(l)(i). Other provisions of the Code or regulations
applicable to cash method taxpayers may change these general rules, including, for
example, § 263 (requiring the capitalization of expenses paid out for a new building or
for pennanent improvements or bettennents made to increase the value of any property or
estate, or for restoring property or making good the exhaustion of property for which an
allowance is or has been made); § 263A (requiring capitalization of direct and allocable
indirect costs of real or tangible personal property produced by a taxpayer or real or
personal property that is acquired by a taxpayer for resale); § 460 (requiring the use of the
percentage-of-completion method for certain long-tenn contracts); and § 475 (requiring
dealers in securities to mark securities to market) .
.06 Section 471 provides that whenever, in the opinion of the Secretary, the use of
inventories is necessary to clearly detennine the income of the taxpayer, inventories must
be taken by the taxpayer. Section 1.471-1 requires a taxpayer to account for inventories
when the production, purchase, or sale of merchandise is an income-producing factor in
the taxpayer's business .
.07 Section 1.162-3 requires taxpayers carrying materials and supplies (other than
incidental materials and supplies) on hand to deduct the cost of materials and supplies
only in the amount that they are actually consumed and used in operations during the
taxable year.
.08 Section 263A generally requires direct costs and an allocable portion of
indirect costs of certain property produced or acquired for resale by a taxpayer to be
included in inventory costs, in the case of property that is inventory, or to be capitalized,
in the case of other property. However, resellers with gross receipts of $1 0,000,000 or
less are not required to capitalize costs under § 263A and certain producers with
$200,000 or less of indirect costs are not required to capitalize certain costs under §
263A. See ~~ 263A(b)(2)(B) and 1.263A-2(b)(3)(iv) .
.09 Sections 446( e) and 1.446-1 ( e) state that, except as otherwise provided, a
taxpayer must secure the consent of the Commissioner before changing a method of
accounting for federal income tax purposes. Section 1.446-1 (e)(3 )(ii) authorizes the
Commissioner to prescribe administrative procedures setting forth the limitations, terms,
and conditions deemed necessary to pennit a taxpayer to obtain consent to change a
method of accounting in accordance with § 446(e) .
. 10 Section 481 (a) requires those adjustments necessary to prevent amounts from
being duplicated or omitted to be taken into account when the taxpayer's taxable income
is determined under a method of accounting different from the method used to determine
taxable income for the preceding taxable year.
SECTION 3. SCOPE
.01 Applicability. This revenue procedure applies to a qualifying small business
taxpayer. A qualifying small business taxpayer is any taxpayer with "average annual
gross receipts" of more than $1,000,000 but less than or equal to $10,000,000 that is not
prohibited from using the cash method under § 448 .
.02 Taxpayers not within the scope of this revenue procedure.
(l) Notwithstanding section 3.01 of this revenue procedure, this revenue
procedure does not apply to a fanning business (within the meaning of § 263A(e)(4» of a
qualifying small business taxpayer. If a qualifying small business taxpayer is engaged in
the trade or business of fanning, this revenue procedure may apply to the taxpayer's nonfarming trades or businesses, if any. A taxpayer engaged in the trade or business of
farming generally is allowed to use the cash method for any farming business, unless the
taxpayer is required to use an accrual method under § 447 or is prohibited from using the
cash method under § 448.
(2) Although this revenue procedure does not apply to a taxpayer with average
annual gross receipts of $1 ,000,000 or less, such taxpayer generally is allowed to use the
cash method pursuant to Rev. Proc. 2001-10, 2001-2 I.R.B. 272.
SECTION 4. QUALIFYING SMALL BUSINESS T AXP A YER EXCEPTION
.01 Pursuant to his discretion under §§ 446 and 471, and to simplify the record
keeping requirements of a qualifying small business taxpayer, the Commissioner, as a
matter of administrative convenience, will allow a qualifying small business taxpayer to
use the cash method as described in this revenue procedure for a trade or business
described in this section 4.01 (eligible trade or business). No inference is intended
regarding whether a taxpayer that does not satisfy the qualifying small business taxpayer
exception of this section 4.01 is pem1itted to use the cash method.
(1) A qualifying small business taxpayer that reasonably determines that its
principal business activity (i.e., the activity from which the taxpayer derived the largest
percentage of its gross receipts) for its prior taxable year is described in a North
American Industry Classification System ("NAICS") code other than one of the ineligible
codes listed below may use the cash method as described in this revenue procedure for all
of its trades or businesses. The ineligible NAICS codes are as follows:
(a) mining activities within the meaning ofNAICS codes 211 and 212;
(b) manufacturing within the meaning ofNAICS codes 31 - 33;
(c) wholesale trade within the meaning ofNAICS code 42;
(d) retail trade within the meaning of NAICS codes 44 - 45; and,
(e) information industries within the meaning ofNAICS codes 5111 and 5122.
Information regarding the NAICS codes can be found at www.census.gov. Visitors to the
site should select "Subjects A to Z," followed by "N," and then should select "NAICS
(North America)." Taxpayers also may find a partial list ofNAICS codes, described as
"Principal Business Activity Codes," in the instructions to their tax return forms.
(2) A qualifying small business taxpayer may use the cash method as described in
this revenue procedure for all of its trades or businesses if its principal business activity is
the provision of services, including the provision of property incident to those services.
For example, a publisher whose principal business activity is the sale of advertising space
in its publications is eligible to use the cash method as described in this revenue
procedure, notwithstanding that the taxpayer's principal business activity is described in
an ineligible NAICS code.
(3) A qualifying small business taxpayer may use the cash method as described in
this revenue procedure (subject to the potential application of § 460) for all of its trades
or businesses if its principal business activity is the fabrication or modification of
tangible personal property upon demand in accordance with customer design or
specifications. For purposes of this rule, tangible personal property is not fabricated or
modified in accordance with customer design or specifications if the customer merely
chooses among pre-selected options (e.g. size, color, or materials) offered by the taxpayer
or if the taxpayer must make only minor modifications to its basic design to meet the
customer's specifications.
(4) Notwithstanding the taxpayer's principal business activity, a qualifying small
business taxpayer may use the cash method as described in this revenue procedure with
respect to any separate and distinct trade or business whose principal business activity is
not described in an ineligible NAICS code in section 4.01(1 )(a) through (e) or is
described in either section 4.01 (2) or section 4.0 I (3). No trade or business will be
considered separate and distinct unless a complete and separable set of books and records
is kept for such trade or business. See § 1.446-1 (d)(2) .
.02 Notwithstanding § 1001 and the regulations thereunder, qualifying taxpayers
that use the cash method for an eligible trade or business undcr section 4.01 of this
revenue procedure include amounts in income attributable to open accounts receivable
(i.e., receivables due in 120 days or less) as amounts are actually or constructively
received. However, § 100 I may be applicable to other transactions .
.03 Qualifying small business taxpayers that are permitted to use the cash method
for an eligible trade or business under section 4.01 of this revenue procedure and that do
not want to account for inventories under section 471 must treat all inventoriable items
(e.g., items purchased for resale to customers and raw materials purchased for use in
producing finished goods) in such trade or business in the same manner as materials and
supplies that are not incidental under § 1.162-3. Items that would be accounted for as
incidental materials and supplies for purposes of § 1.162-3 may still be accounted for in
that manner. Whether an item is purchased for resale (and thus must be accounted for as
a non-incidental material and supply) or is purchased to provide to customers incident to
services (and thus may be accounted for as either an incidental or a non-incidental
material and supply depending on the facts and circumstances) must be determined under
general tax principles .
.04 Under § 1.162-3, materials and supplies that are not incidental are deductible
only in the year in which they are actually consumed and used in the taxpayer's business.
For purposes of this revenue procedure, inventoriable items that are treated as materials
and supplies that are not incidental are consumed and used in the year the qualifying
small business taxpayer sells the items to a customer. Thus, under the cash method as
described in this revenue procedure, the cost of such inventoriable items are deductible
only in that year, or in the year in which the taxpayer actually pays for the goods,
whichever is later. A qualifying small business taxpayer may use any reasonable method
to determine the amount of the allowable deduction (e.g., first in, first out or average
cost) provided that the method is used consistently.
SECTION 5. DEFINITIONS
.01 Average annual gross receipts. A taxpayer has average annual gross receipts
of $1 0,000,000 or less if, for each prior taxable year ending on or after December 31,
2000, the taxpayer's average annual gross receipts for the 3-taxable-year period ending
with the applicable prior taxable year does not exceed $10,000,000 .
.02 Gross receipts. Gross receipts is defined consistent with § 1.448-1 T(f)(2)(iv)
of the Temporary Income Tax Regulations. Thus, gross receipts for a taxable year equal
all receipts derived from all of a taxpayer's trades or businesses that must be recognized
under the method of accounting actually used by the taxpayer for that taxable year for
federal income tax purposes. For example, gross receipts include total sales (net of
returns and allowances), all amounts received from services, interest, dividends, and
rents. However, gross receipts do not include amounts received by the taxpayer with
respect to sales tax or other similar state and local taxes if, under the applicable state or
local law, the tax is legally imposed on the purchaser of the good or service, and the
taxpayer merely collects and remits the tax to the taxing authority. See also §
448(c)(3)(C) .
.03 Aggregation of gross receipts. For purposes of computing gross receipts, all
taxpayers treated as a single employer under subsection (a) or (b) of § 52 or subsection
(m) or (0) of § 414 (or that would be treated as a single employer under these sections if
the taxpayers had employees) will be treated as a single taxpayer. However, when
transactions occur between taxpayers that are treated as a single taxpayer by the previous
sentence, gross receipts arising from these transactions will not be treated as gross
receipts for purposes of the average annual gross receipts limitation. See §§ 448(c)(2)
and 1.448-1 T(f)(2)(ii) .
.04 Taxpayer not in existence for 3 taxable years. If a taxpayer has been in
existence for less than the 3-taxable-year period referred to in section 5.01 of this revenue
procedure, the taxpayer must determine its average annual gross receipts for the number
of years (including short taxable years) that the taxpayer has been in existence. See §
448(c)(3)(A) .
.05 Treatment of short taxable years. In the case of a short taxable year, a
taxpayer's gross receipts must be annualized by mUltiplying the gross receipts for the
short taxable year by 12 and then dividing the result by the number of months in the short
taxable year. See §§ 448(c)(3)(B} and 1.448-1T(f)(2)(iii) .
.06 Treatment of predecessors. Any reference to taxpayer in this section 5
includes a reference to any predecessor of that taxpayer. See § 448(c)(3}(D).
SECTION 6. EXAMPLES
Assume for purposes of the following examples that the taxpayers are not
prohibited from using the cash method under § 448. Also assume for purposes of
examples 2 through 10 that the taxpayers have average annual gross receipts of
$10,000,000 or less.
Example I. Taxpayer is a calendar year plumbing contractor that installs
plumbing fixtures in customers' homes and businesses. Taxpayer reasonably detem1ines
that its principal business activity is construction, which is described in NAICS code 23.
Taxpayer's gross receipts at the end of the three preceding taxable years are:
Gross receipts
1998:
$ 6,000,000
1999:
9,000,000
2000:
12,000,000
Taxpayer's average mlliual gross receipts for the 3-taxable year-period ending in the 2000
taxable year is $9,000,000 ($6,000,000 + $9,000,000 + $12,000,000 = $27,000,000/3).
Taxpayer may use the cash method for all its trades or businesses pursuant to this revenue
procedure for its 2001 taxable year because its average annual gross receipts for each
prior taxable year ending on or after December 31, 2000, is $10,000,000 or less and its
principal business activity is not described in the ineligible NAICS codes listed in section
4.01(1)(a) - (e).
Example 2. Taxpayer is a plumbing contractor that installs plumbing fixtures in
customers' homes and businesses. Taxpayer also has a store that sells plumbing
equipment to homeowners and other plumbers who visit the store. Taxpayer derives 60
percent of its total receipts from plumbing installation (including amounts charged for
parts and fixtures used in installation) and 40 percent of its total receipts from the sale of
plumbing equipment through its store. Taxpayer reasonably determines that its principal
business activity is plumbing installation, which is included in the construction activities
described in NAICS code 23. Taxpayer may use the cash method for both business
activities because Taxpayer is a qualifying small business taxpayer whose principal
business activity - plumbing installation - is not described in the ineligible NAICS codes
listed in section 4.01(a)-(e).
Example 3. Same as Example 2, except Taxpayer derives 40 percent of its total
receipts from plumbing installation (including amounts charged for parts and fixtures
used in installation) and 60 percent of its total receipts from the sale of plumbing
equipment through its store. Taxpayer's principal business activity is described in the
ineligible NAICS code 44. Moreover, Taxpayer's principal business activity is neither
the provision of services under section 4.01(2) nor the fabrication or modification of
tangible personal property under section 4.01 (3). Therefore, Taxpayer may not use the
cash method under this revenue procedure for its plumbing retail business. Taxpayer
may use the cash method for its plumbing installation business if the Taxpayer keeps
complete and separate books and records for its plumbing installation business and its
plumbing retail business. If Taxpayer keeps one set of books and records for its
plumbing installation business and its plumbing retail business, then Taxpayer is required
to use an accrual method for both businesses.
Example 4. Taxpayer sells refrigerators. As part of the sale price, Taxpayer will
deliver the refrigerator to the customer and confirm that the refrigerator is functioning
properly at the customer's site. Taxpayer's principal business activity is described in the
ineligible NArCS code 44. Moreover, taxpayer's principal business activity is not the
provision of services under section 4.01(2). Taxpayer does not provide refrigerators
incident to the perfonnance of services. Rather, Taxpayer performs certain services
(delivery and confirmation of functionality) incident to the sale of refrigerators. In
addition, Taxpayer does not fabricate or modify tangible personal property under section
4.01(3). Taxpayer may not use the cash method under this revenue procedure.
Example 5. Taxpayer is a sofa manufacturer that only produces sofas upon
receipt of a customer order. Customers are allowed to pick among 150 different fabrics
offered by the taxpayer or to provide their own fabric, which the taxpayer will use to
finish the customer's sofa. Taxpayer's principal business activity is described in the
ineligible NArCS code 33. Taxpayer does not provide sofas incident to the perfonnance
of services for purposes of section 4.01 (2). Rather, Taxpayer performs certain services
(upholstering) incident to the sale of sofas. Taxpayer also does not fabricate or modify
tangible personal property for purposes of section 4.01 (3) because customers merely
choose among pre-selected options offered by Taxpayer and Taxpayer only makes minor
modifications to the basic design of its sofa. Taxpayer may not use the cash method
under this revenue procedure.
Example 6. Taxpayer makes tools based entirely on specific designs and
specifications provided to it by customers in their orders. Taxpayer's principal business
activity is described in the ineligible NAICS code 33. However, Taxpayer's principal
business activity is the fabrication of tangible personal property for purposes of section
4.01(3). Taxpayer may use the cash method under this revenue procedure (subject to the
potential application of § 460).
Example 7. Taxpayer is a roofing contractor that is a qualifying small business
taxpayer eligible to use the cash method under sections 3 and 4 of this revenue procedure.
Taxpayer, who uses the calendar year, chooses to use the cash method as described in this
revenue procedure and to not account for inventories under § 471. Taxpayer enters into a
contract with a homeowner in December 2001 to replace the homeowner's roof.
Taxpayer purchases roofing shingles from a local supplier and has them delivered to the
homeowner's residence. Taxpayer pays the supplier $5,000 for the shingles upon their
delivery later that month. Taxpayer replaces the homeowner's roof in December 2001,
and gives the homeowner a bill for $15,000 at that time. Taxpayer receives a check from
the homeowner in January 2002.
Taxpayer deducts the $5,000 cost ofthe shingles on its 2001 Federal income tax
return (the year the shingles are paid for by Taxpayer and provided to the customer in
connection with the performance of roofing services). Taxpayer includes the $15,000 in
income in 2002 when it receives the check from the homeowner.
Exarnple 8. The facts are the same as in Example 7, except that Taxpayer does
not replace the roof until January 2002 and is not paid until March 2002. Because the
shingles are not used until 2002, their cost can only be deducted on Taxpayer's 2002
Federal income tax return notwithstanding that Taxpayer paid for the shingles in 2001.
Thus, on its 2002 return, Taxpayer must report $15,000 of income and $5,000 of
deductions.
Example 9. Taxpayer, a qualifying small business taxpayer, elects to use the cash
method as described in this revenue procedure. Taxpayer is a speculative builder of
houses that are built on land it owns. In 2001, Taxpayer builds a house using various
items such as lumber, piping, and metal fixtures that it had paid for in 2000. In 2002,
Taxpayer sells the house to a buyer. Because the house is real property held for sale by
Taxpayer, it is not an inventoriable item under section 4.03 of this revenue procedure.
Thus, the taxpayer may not account for the items used to build the house as nonincidental materials and supplies under § 1.162-3. Rather, Taxpayer must capitalize the
costs of the lumber, piping, metal fixtures and other goods used by Taxpayer to build the
house. Upon the sale of the house in 2002, the costs capitalized by Taxpayer will be
offset against the house sales price to determine Taxpayer's gain or loss from the sale.
Example 10. The facts are the same as in Example 9, except that Taxpayer builds
houses on land its customers own. Because Taxpayer does not own the house, the
lumber, piping, metal fixtures and other goods used by Taxpayer in the provision of
construction services are not real property held for sale. Taxpayer must deduct the cost
of the lumber, piping, metal fixtures and other non-incidental materials and supplies that
are used by it to build the house in 2001 (the year those items were used by Taxpayer to
build the house) notwithstanding that Taxpayer had paid for the items in 2000. Taxpayer
will report income it receives from its customer as the income is actually or
constructively received.
SECTION 7. CHANGE IN ACCOUNTING METHOD
.01 In general. Any change in a taxpayer's method of accounting pursuant to this
revenue procedure is a change in method of accounting to which the provisions of §§ 446
and 481 and the regulations thereunder apply .
.02 Automatic change for taxpayers within the scope of this revenue procedure.
(1) Automatic change to the cash method. A qualifying small business taxpayer
that wants to use the cash method as described in this revenue procedure for an eligible
trade or business must follow the automatic change in accounting method provisions of
Rev. Proc. 99-49, 1999-52 LR.B. 725 (or its successor) with the following modifications:
(a) The scope limitations in section 4.02 of Rev. Proc. 99-49 do not apply.
However, if the taxpayer is under examination, before an appeals office, or before a
federal court with respect to any income tax issue, the taxpayer must provide a copy of
the Form 3115, Application for Change in Accounting Method, to the examining
agent(s), appeals officer, or counsel for the government, as appropriate, at the same time
that it files the copy of the Form 3115 with the national office. The Form 3115 must
contain the name(s) and telephone number(s) of the examining agent(s), appeals officer,
or counsel for the government, as appropriate;
(b) Taxpayers filing Form 3115 for a change in method of accounting under this
revenue procedure must complete all applicable parts of the form but need not complete
Part II of Schedule A of Form 3115. Specifically, Part II, line 17 (regarding information
on gross receipts in previous years) and Part III (regarding the § 481(a) adjustment) must
be completed. Taxpayers should write "Filed under Rev. Proc. 2001- XX" at the top of
their Form 3115.
(2) Automatic change to section 1.162-3. A qualifying taxpayer that does not
want to account for inventories under § 471 of an eligible trade or business must make
any necessary change from the taxpayer's current method of accounting for inventoriable
items in that trade or business to treat such inventoriable items in the same manner as
materials and supplies that are not incidental under section 1.162-3. For purposes of such
a change, the rules of section 6.02(1) of this revenue procedure apply. Taxpayers may
file a single Form 3115 for both changes described in sections 7.02(1) and 7.02(2) .
.03 Section 481(a) adjustment. The net amount of the § 481(a) adjustment
computed under this revenue procedure must take into account both increases and
decreases in the applicable account balances such as accounts receivable, accounts
payable, and inventory. For example, the § 481(a) adjustment may include the difference
resulting from changing from taking inventory accounts under § 471 to treating the goods
as materials and supplies that are not incidental under § 1.162-3 .
.04 Taxpayers not within the scope of this revenue procedure. A taxpayer that
ceases to qualify for the qualifying small business taxpayer exception described in section
4 ofthis revenue procedure for any trade or business and otherwise is required to use an
accrual method for that trade or business must change to an accrual method (and, if
applicable an inventory method that complies with § 471) for that trade or business using
either the automatic change in accounting method provisions of section 5.01 of the
APPENDIX to Rev. Proc. 99-49, if applicable, or the advance consent provisions of Rev.
Proc. 97-27,1997-1 C.B. 680 (or its successor).
SECTION 8. EFFECT ON OTHER DOCUMENTS
Rev. Proc. 99-49, 1999-2 C.B. 725, is modified and amplified to include this
automatic change in section 10 of the APPENDIX.
SECTION 9. EFFECTIVE DATE
This revenue procedure is effective for taxable years ending on or after December
31, 2001. However, the Service will not challenge a taxpayer's use of the cash method
under § 446, or a taxpayer's failure to account for inventories under § 471, for a trade or
business in an earlier year if the taxpayer, for that year, was a qualifying small business
taxpayer as described in section 3 of this revenue procedure and the taxpayer was eligible
to use the cash method for such trade or business under section 4.01 of this revenue
procedure.
CONTACT INFORMATION
For further information regarding this revenue procedure, contact Cheryl Lynn
Oseekey of the Office of Associate Chief Counsel (Income Tax and Accounting at (202)
622-4970 (not a toll-free call).
DEPARTMENT
OF
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TREASURY (~i;tl
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....................
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE. N.W. - WASHINGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
December 11, 2001
CONTACT: BETSY HOLAHAN
202-622-2960
Treasury Department Unveils Patriot Bond
on Anniversary of September 11 Attacks
Secretary of the Treasury Paul H. O'Neill and U.S. Treasurer Rosario Marin today
unveiled Series EE savings bonds designated as "Patriot Bonds" on the three-month anniversary
of the September 11,2001 terrorists attacks. They were joined by Sens. Tim Johnson, Mitch
McConnell and Conrad Bums. Rep. John Sweeney, who also worked on the Patriot Bond, was
unable to attend.
"Since September 11, everywhere I go, Americans of every age come up to me and say
they want to help," said Secretary O'Neill.
"We've seen an amazing outpouring of charity from across the nation, and an increase in
the number of people who want to do public service," he said. "These are all healthy trends for
our nation and our government. The Patriot Bond is an opportunity for all Americans to
contribute to the government's war effort and save for their futures as weI!."
The funds raised by the bonds will contribute to the federal government's overall effort to
fight the war on global terrorism.
Series EE savings bonds sold through financial institutions will be specially inscribed
with the legend "Patriot Bond." The legend also will appear on Series EE bonds available at the
Bureau of the Public Debt's Savings Bond Direct website (www.savingsbonds.gov).
Series EE savings bonds, earn 90 percent of 5-year Treasury securities yields. The
current rate in effect through April 2002 is 4.07 percent. The bonds sell as half face value and
are available in denominations of$50, $75, S100, $200. $500, $1,000, 55,000 and $10,000.
Series EE bonds increase in value monthly and interest is compounded semiannually.
Interest is exempt from state and local income taxes and federal tax can be deferred until the
bond is redeemed or it stops earning interest at 30 years. Bonds can be redeemed anytime after
six months. A 3-month Interest penalty is applied to bonds redeemed before five years.
PO-8S4
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•
·u.s
Go<ernment Pnnl1nq Of lice 1998· 619-559
QUESTIONS AND ANSWERS ABOUT SERIES EE PATRIOT BONDS
Q.
What are Patriot Bonds?
Q.
Can I buy a Patriot Bond as a gift?
A
Patriot Bonds are Series EE savings bonds
purchased through financial institutions or over
the Internet at the Savings Bonds Direct website.
Bonds bought this way will be specially inscribed
with the words Patriot Bond.
A.
Q.
Where can I buy Series EE Patriot Bonds?
Yes. Like all savings bonds. every Patriot Bond
has to bear a Social Security Number (SS?\) for
record-keeping purposes but if you don't kno\\
the SSN of the person you're buying the bond for.
you can use your own. If you want to deliver a
gift bond in person or mail it with a personal
message. you should have the bond mailed to
yourself.
A
You can place an order at any of thousands of
financial i~stitutions serving as savings bond
Q.
How does the Series EE, Patriot Bond work?
A.
Series EE savings bonds are U.S. Treasury
securities that earn 90 percent of market yields on
5-year Treasury securities. Bonds increase in
value every month, and interest is compounded
semiannually. You can cash your bond after six
months. Bonds cashed before they are five years
old are subject to a 3-month interest penalty. EE
bonds stop earning interest at 30 years.
agents nationwide. If you are interested in buying
Patriot Bonds, it might be a good idea to contact
your bank or thrift to ask if they offer savings
bonds. On line buyers can order via Savings
Bonds Direct at "'''I.vw.savingsbonds.gov
Q.
When will the Patriot Bond be available?
A.
The Patriot Bond legend will be inscribed on
Series EE bonds beginning Decem ber 11, 200]
and will continue indefinitely.
Q.
What about taxes on the interest earned?
Q.
How do I buy a Patriot Bond?
A.
A.
It's easy. All you have to do is order a Series EE
bond at your financial institution or over the
Internet at \\ww.savin2:sbonds.!wv and the bond
you receive in the mail will be a Patriot Bond.
Series EE bonds are free from State and local
income taxes. Federal tax on interest earned can
be deferred until you cash a bond or it reaches its
3D-year maturity. whichever happens first.
Q.
Why can't I buy Patriot Bonds through my
company's payroll savings plan?
Why is Treasury designating these Series EE
bonds as Patriot Bonds?
A.
Treasury securities, including Patriot Bonds. are
deposited in the general fund and spent according
to law. the funds will contribute to the recovery
and war efforts.
The centralized process we use to inscribe bonds
bought throug.h financial institutions made it
possible to make the special Patriot Bond legend
available quickly. By purchasing bonds through a
financial institution or at the Savings Bonds
Direct website Americans can make a positive
expression of their support for the recovery and
war effort. Bonds bought through payroll savings
plans are processed by many different
organizations using a variety of inscription
techniques precluding Treasury from being able to
offer the special legend for payroll customers.
Q.
How can I find out more about the Series EE
Patriot Bond?
What denominations are being offered and
how much do they cost?
A.
Visit \\"-""I.\.savin£sbonds.Qov or ask your financial
institution for more information.
Q.
A.
Many Americans expressed a desire to express
their support for the rebuilding and war efforts.
The Patriot Bond is one way they can do so.
Q.
Will the money I invest in Patriot Bonds be
earmarked to pay for the War on Terrorism?
A.
No. While the proceeds from the sale of all
Q.
A.
The denominations are: S50, $75, $] 00. $200,
$500. $1.000, $5.000. and $10.000. The
purchase price is: one-half the face amount. For
example, a $100 Patriot Bond costs $50.
Department of the Treasury
Bureau of the Public Debt
De:::em ber :2 00 1
Series EE Patriot Bonds
_
,
1:00C0'1000 '(1:01.
-,~_-....::,~,. ..
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ef
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tft.- .... "'("fy·\""ru:..:;;;".·'-/'~,_~T . .
t'4p·'*rt""
~*"''C
22fT' Ott
a
1H'eti:"....".t.1."IiII6IIk.
Illustration shown is 74% of original
General Guidelines for Reproducing U.S. Savings Bonds
for Promotional or Educational Purposes
Color or Black and White
(1) The illustration is to be of a size less than three-fourths or more than one and one-half, in linear
dimension, of each part of any matter so illustrated;
(2) The illustration is to be one-sided; and
(3) All negatives, plates, positives, digitized storage medium, graphic files, magnetic medium,
optical storage devices, and any other thing used in the making of the illustration that contain an
image of the illustration or any part thereof shall be destroyed and/or deleted or erased after
their final use. The laws and regulations governing reproduction of U.S. Savings Bonds appear
in the Title 18 United States Code, Section 504 and 31 CFR, Part 405.
For a downloadable high resolution image go to:
http://www.savingsbonds.gov/mar/marart.htm#imageagree
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.e 20220 e (202) 622.2960
Contact: Public Affairs
(202) 622-2960
SECRETARY O'NEILL AND TREASURER MARIN TO UNVEIL
PATRIOT BOND
As I look back over the last three months, I am proud of our country. And I am
especially proud of the one hundred and sixty thousand employees of the Treasury Department.
Our collea2ues showed incredible courage and fortitude in the face of devastation. giving every
thing they had to the rescue effort. One of our own here at Treasury gave his life that day. Many
others still carry scars, both inside and out.
Since September 11. we have joined together. within the Department and across the
government to bring our collective strength and detennination to bear on the problems before us.
Whether it IS guarding our borders. protecting our leaders. attacking the sources of terrorist
fundmg. or maintaining our nation's economic and financial health. you all play an essential role
in the fight against terrorism.
] often feel that we are lucky. Every day. we come to work and do our part to defeat the
evildoers who would destroy our way of life. Millions of American not in public service don't
2et that satisfaction everY
. day..
-
Everywhere 1 go. Americans of every age come up to me and say they want to help.
V/e've seen an amazing outpouring of charity from across the nation. and an increase in the
number of people who want to do public service. These are all healthy trends for our nation and
our government.
Today we are unveiling the Patriot Bond - an opportunity for all Americans to contribute
to the government's war effort and save for their futures as well. I'd like to thank the Senators
here today - Senator Johnson. Senator McConnell and Senator Bums -- as well as Congressman
John Sweeney who couldn'1 be with us for this event. And 1'd also like to recognize
Commissioner leck from the Bureau of Public Debt, who will make these bonds available to
everyone.
PO-8SS
_ For press releases. speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622·2040
These posters behind me bring back memories of days long gone. And yet the patriotism
these images represent burns as brightly today as ever, fueling our determination to see this war
on terrorism through to it end.
Today, three months after those horrific attacks, we stand firmly together as .'\mencans
resolved to protect the freedoms that make this nation a beacon of hope in the world.
DEPARTMENT
IREASURY
OF
THE
TREASURY
(WJ NEW S
1789
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622·2960
FOR IMMEDIATE RELEASE
December 11, 2001
Contract: Public Affairs
(202) 622-2960
TREASURY, COMMERCE AND U.S. CUSTOMS TO ANNOU~CE
GLOBAL INVESTIGATION INTO A MVLTI-BILLION-DOLLAR
SOFTWARE PIRACY SCHEl\lE OVER THE INTERNET
**** NOTE ****
EMBARGOED FOR BROADCAST OR PUBLICATION
UNTIL 3:00 P.M. EST
WHAT:
Senior officials from the Department of Treasury, the Department of
Commerce and the U.S. Customs Service will today announce the first law
enforcement actions in a major investigation involving the theft of
proprietary software over the Internet in 21 states and five foreign
countries.
EVENT:
News Conference at 12:45 PM
In depth background briefing to follow the announcement
(The news conference, as well as B-roll will be rebroadcast via
at: C-band, Telstar 4, Transponder
Satellite
11 (Test 1:30 PM; Feed at
2:00 PM to 3:00 PM)
WHEN:
Tuesday, December 11,2001
WHERE:
Diplomatic Room (Room 3311)
Treasury Department
1500 Pennsylvania Ave, N.W.
WHO:
Deputy Secretary of Treasury, Kenneth Dam
UnderSecretary of Commerce for Technology Policy Phil Bond
Assistant Commissioner of Customs (Investigations) John Varrone
PO-856
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622·2040
·u.s
Government Pnntlnq Oltlee 1998· 619·559
Set up available at 12:00 noon
Please enter through the Visitors entrance on 15 th Street to be cleared.
MEDIA WITHOUT TREASURY OR WHITE HOUSE PRESS PASS
NEED TO CONTACT THE TREASURY OFFICE OF PUBLIC
AFFAIRS AT 202-622-2960 WITH THE FOLLO\VING
INFORMATION: NAME, SOCIAL SECURITY NUMBER, AND
DATE OF BIRTH. THIS INFORMATIO~ MAY ALSO BE FAXED
TO (202) 622-1999.
DEPARTMENT
OF
THE
TREASURY t~~·~.···<.+'j
\~~
\'<'
-
4;>1
'c,
TREASURY
NEW S
_------~/7~--------.
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASIDNGTON, D.C .• 20220. (202) 622-2960
FOR IMMEDIATE RELEASE
December 11,2001
Contact: Tasia Scolinos
(202) 622-2960
Interpol and the U.S. Department of Treasury Forge New Partnership in the Fight
Against Terrorist Financing
Meeting at Interpol Headquarters in Lyon, France, on the three month anniversary
of the September 11 th attacks, Treasury Under Secretary for Enforcement Jimmy Gurule
and Interpol Secretary General Ronald K. Noble announced a new joint Treasury -Interpol
partnership to crack down on terrorist financing.
The two law enforcement officials announced their intention to establish an
international terrorist financing data base and Secretary General Noble publicly called on
each of Interpol's 179 member countries to identify important infonnation regarding the
financial support of terrorism that would also be incorporated into the database. The
Interpol database would consolidate international and national lists of terrorist financiers
and make it available to police around the world to prevent the flow of funds to terrorist
groups and to assist in criminal investigations.
The Treasury Department will work closely with Interpol to develop the
foundations for this new tool to fight terrorism. "The fight against terrorist financing can
only be successful by pooling together all available resources to crack down on those
choosing to fund acts of terror against innocent people," said Treasury Under Secretary
Gurule. "Today Interpol joined us in strengthening that effort by bringing their law
enforcement expertise and global infrastructure to the war on terrorist financing."
In addition, Secretary General Noble also extended Interpol's full support to the
Treasury Department's operational task force Green Quest's assignment of a pennanent
U.S. Interpol agent to the task force. "Interpol is committed to both the fight against
terrorism and the funds that make such heinous acts possible" said Secretary General
Noble. "We are dedicated to the task of shutting down funds eannarked for terror. The
international law enforcement community looks forward Lo partnering with the Treasury
Department to develop future tools to crack down on funds destined for acts of terror and
other illegal purposes." Both officials were optimistic that the terrorist financing data
base could be operational within sixty days.
PO-857
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s
Government Pnntlnq Office 1998· 619-559
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
Office of Flnanci~g
202-691-3550
CONTACT:
FOR IMMEDIATE RELEASE
December 10, 2001
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
December 13, 2001
March 14, 2002
912795JK8
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
1.675%
Investment Rate 1/:
Price:
1.704%
99.577
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 82.49%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Accepted
Tendered
competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
24,478,490
1,362,541
100,000
$
25,941,031
Federal Reserve
TOTAL
14,000,011 2/
4,)70,878
'1,370,878
$
30,311,909
12,537,470
1,362,541
100,000
$
18,370,889
Median rate
1.640%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.600%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
25,941,031 / 14,000,011 = 1.85
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,116,168,000
http://www.publicdebt.treas.gov
PO-8S8
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
December 10, 2001
Office of Financlng
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
December 13, 2001
June 13, 2002
912795JY8
Term:
Issue Date:
Maturity Date:
CUSIP Number:
1.765%
High Rate:
Investment Rate 1/:
Price:
1. 805%
99.108
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 23.92%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED
AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitlve
FIMA (noncompetitive)
Tendered
$
$
24,477,454
SUBTOTAL
Federal Reserve
TOTAL
23,569,515
882,939
25,000
Accepted
16,000,080 2/
5,512,340
5,512,340
$
29,989,794
15,092,141
882,939
25,000
$
21,512,420
Median rate
1.730%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.675%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 24,477,454 / 16,000,080
=
1.53
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $697,076,000
http://www.publicdebt.treas.gov
PO-859
OFFICE OF PUBLIC AFFAIRS el500 PENNSYLVANIA AVENUE, N.W.e WASHINGTON, D.C.e 20220 e (202) 622-2960
Contact:
EMBARGOED UNTIL 11:30 A.M.
December 10, 2001
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $15,000 million
to refund an estimated $19,000 million of publicly held 4-week Treasury bills
maturing December 13, 2001, 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 ~ be accepted.
The Federal Reserve System holds $10,646 million of the Treasury bills
maturing on December 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.
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%.
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-860
For press releases, speeches, public schedules and official biographies. call our U-hour fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED DECEMBER 13, 2001
December la, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . $15,000 m~ll~on
Public Offering . . . . . . . . . . . . . . . . . . . ·· $15, 000 m~lll.on
NLP Exclusion Amount . . . . . . . . . . . . . . . . $8,300 million
Description of Offering:
Term and type of security ........... 2B-day bill
CUSIP number . . . . . . . . . . . . " .......... 912795 JB B
Auction date . . . . . . . . . . . . . . . . . . . . . . . . December 11, 2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . December 13, 2001
Maturity date . . . . . . . . . . . . . . . . . . . . . . . January 10, 2002
Original issue date . . . . . . . . . . . . . . . . . July 12, 2001
Currently outstanding . . . . . . . . . . . . . . . $33,201 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
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 discount rate with three decimals in
increments of .005%, e.g., 4.215%.
(2) Net long position (NLP) 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.
DEPARTMENT
OF
THE
TREASURY rg)
TREASURY
NEW S
178~9:'''''''''''''''''''''''''''''''''''''''.
OrnCE OFPUBUC AFFAIRS -1500 PENNSYLVANlAAVENUE, N.W.· WASHINGTON. D.C.. 20220. (202) 622·2960
Office of Public Affairs
(202) 622-2960
FOR IMMEDIATE RELEASE
December 11, 2001
STATEMENT BY TREASURY SECRETARY PAUL H. O'NEILL
The Administration respects the independence of the Federal Reserve in making decisions about
our nation's monetary policy. We share the Federal Reserve's goals of maintaining healthy
economic growth while preserving low inflation.
PO-861
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.
·u.s Government Prlntlnq all Ice 1998· 619-559
DEPARTMENT
OF
THE
TREASURY
~/78~g~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
....
OmCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960
FOR IMMEDIATE RELEASE
December 11,2001
Contact: Robert Nichols
(202) 622-2910
Remarks by Deputy Treasury Secretary Kenneth Dam
Today, we are arulOuncing the largest and most extensive investigation ever conducted in
cyberspace - the new frontier for crime.
Earlier today, the Customs Service executed Operation Buccaneer, an unprecedented
investigation into a global network of cyberspace gangs responsible for pirating billions of
dollars worth of software over the Internet. The pirated software involved includes copyrighted
games, music and digital videos and expensive application software.
This morning, Customs agents executed search warrants on major universities, businesses and
residences across the country. The enforcement actions mark the first overt phase of a 15 month
undercover investigation by the Customs Service and its Cybersmuggling Center, in coordination
with the Justice Department's Computer Crimes and Intellectual Property Section.
Though software piracy is a crime that cannot be seen with the naked eye, the costs are enormous
to both industry and consumers.
According to some estimates, as recently as 1999, one in every three business software units in
use was pirated.
The global losses are staggering and exceed $12 billion worldwide, including $3.6 billion in the
US and Canada.
Software piracy undermines the stability of the burgeoning e-commerce industry, and it is a
direct threat to innovative companies that help strengthen the US economy.
Piracy also hurts consumers. When software companies are hurt by pirates, they are less likely
to innovate, depriving consumers of new ilIDovations. Also, legitimate users have to pay more to
make up for lost sales to pirates.
-30-
PO-862
_ For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
'U S Government Prlntlnq Office 1998· 619·559
While today's action is the first overt law enforcement action of Operation Buccaneer, this
investigation has been underway since September 2000, a full 15 months.
Operation Buccaneer targeted the W AREZ community, a group of software thieves who engage
in the duplication and reproduction of copyrighted software over the Internet.
The WAREZ community and its member groups are believed to be responsible for 95% of the
Internet sites containing pirated software.
Now, I am delighted to introduce Phil Bond, Undersecretary of Commerce for Technology
Policy, followed by John Varrone, the Assistant Commissioner of Customs for Investigations,
who will address some more detailed aspects ofthe investigation.
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTO,\,j, D.C.. 20220. (202) 622·2960
FOR [MlVllVIEDIATE RELEASE
December 12,2001
Contact: Public Affairs
(202) 622-2960
REVISED
MEDIA ADVISORY
PRESS BRIEFING WITH DEPUTY SECRETARY OF THE
TREASURY KENNETH DAlYI
Dam will address his upcoming trip to Mexico and outline the objectives of the
"Partnership for Prosperity" a binational working group-first announced by
Mexican President Vicente Fox and U.S. President George Bush on September 6.
Remarks followed by Q&A
Still photographers only.
Time: 5:00 p.m.
Room: Large Conference Room 3327
Wednesday, December 12, 2001
Media without Treasury or White House press pass need to contact the Treasury
Office of Public Affairs at (202) 622-2960 with the following information. Name,
social security number, and date of birth. This information may also be faxed to
(202) 622-1999.
PO-863
For press releases, speeches, public :schedules and official biographies, call our 24·1wur fax liree at (202) S22·2{)4{)
,
·u.s
Government Pnntlnq Office 1998· 619-559
NEWS
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 202%0. (202) 622.2960
u.s. International Reserve Position
12/12/01
The Treasury Depanment today released U.S. reserve assets data for the week endint December 7, 2001. As
in~~ated in this table, U.S. reserve assets totaled $68,738 million as of December 7,2001, down from $69,308
million as of November 30, 2001.
us millions)
(in
I. Official U.S. Reserve Assets
1. Foreign Currency Reserves
1
a. Securities
December 71 2001
68,738
November 301 2001
69,308
TOTAL
I
Euro
5,520
Yen
11,183
Of which, issuer headquartered in the U. S.
TOTAL
Euro
16,702
5,471
Yen
TOTAL
11,085
16.555
0
0
b. Total deposits with:
b.l. Other central banks and SIS
bJi. Sanks headquartered in the U.S.
b.ii. Of which, banks located abroad
9,260
4,144
13,404
9,211
3,945
13,156
0
0
0
0
0
0
0
0
17,293
17,127
. Special Drawing Rights (SORS)2
10,864
10,855
. Gold Stock 3
11,045
11,045
0
a
b.m. Banks headquartered-outside the U.S.
b.m. Of which, banks located in the U.S.
.IMF Reserve Position
Other Reserve Assets
2
II Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account (SOMA),
ralued at CUrrent market exchange rates Foreign currency holdings listed as securities reflect marked·te-market values, and deposits reflect
:arrying values.
'j The items, "2. IMF Reserve Position" and "3. SpeCial Drawing Rights (SDRs): are based on data proVided by the IMF and are valued in
ollar terms at the offiCial SDRJdollar exchange rate for the reporting date. The IMF data for November 23 arE final. The entnes in the table
bove for November 30 (shown in Italics) reflect any necessary adjustments, Including revaluation, by the U.S. Treasury to the prior week's
vtF data.
Gold stock is valued monthly at $42.2222 per fine troy ounce. Values shown are as of October 31. 2001. The September 30, 2001 value
as $11.045 million.
I
~-864
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
November 30. 2001
1. Foreign currency loans and securities
December 7. 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
Other
o
o
II. Contingent Short-Term Net Drains on Foreign Currency Assets
November 30. 2001
Contingent liabilities in foreign currency
December 7. 2001
o
o
o
o
o
o
o
o
La. Collateral guarantees on debt due within 1 year
I.b. Other contingent liabilities
Foreign currency securities with embedded options
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
~.a.
Short positions
4.a.1. Bought puts
4.a.2. Written calls
I.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTO,\,j, D.C.- 20220 - (202) 622·2960
Contact: Tara Bradshaw
For Immediate Release
December l2, 2001
(202) 622-2014
SENATE FINANCE COlVIlVIITTEE APPROVES
TRADE PROMOTION AUTHORITY 18-3
Statement a/Treasury Secretary PaulO 'Neill
I want to thank the committee for its prompt action on the heels of House passage of TP A. It's
crucial that the Senate act quickly to give the President the authority he needs to expand global
markets, creating jobs here at home and sowing the seeds of opportunity in developing nations
around the world.
-30-
PO-865
press r~lea5e5, spe&ches, }ubiic schedulesarul official biographies, mil !)ur 24~our fax line at (202) 622-2(41)
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
December 11, 2001
Office of 2inancing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
28 -Day Bill
December 13, 2001
January 10, 2002
912795JB8
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
1.670%
Investment Rate II:
1.697%
Price:
99.870
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 18.80%. All tenders at IO'Ner rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FlMA (noncompetitive)
$
35,915,000
27,428
$
14,972,600
27,428
o
°
SUBTOTAL
Federal Reserve
TOTAL
Accepted
Tendered
$
35,942,428
15,000,028
762,575
762,575
36,705,003
$
15,762,603
Median rate
1.630%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.590%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 35,942,428 / 15,000,028 = 2.40
1/ Equivalent coupon-issue yield.
http://vvww.publicdebt.treas.gov
PO-866
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.- 20220 _ (202) 622.2960
EMBARGOED UNTIL 9:00 A.M.
December 12, 2001
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960
TREASURY ANNOUNCES DEBT BUYBACK OPERATION
On December 13, 2001, the Treasury will buy back up to $1,500 million
par of its outstanding issues that mature between November 2022 and November
2027. Treasury reserves the right to accept less than the announced amount.
This debt buyback (redemption) operation will be conducted by Treasury's
Fiscal Agent, the Federal Reserve Bank of New York, using its Open Market
operations system. Only institutions that the Federal Reserve Bank of New
York has approved to conduct Open Market transactions may submit offers on
behalf of themselves and their customers. Offers at the highest accepted
price for a particular issue may be accepted on a prorated basis, rounded up
to the next $100,000. As a result of this rounding, the Treasury may buy
back an amount slightly larger than the one announced above.
This debt buyback operation is governed by the terms and conditions set
forth in 31 CFR Part 375 and this announcement.
The debt buyback operation regulations are available on the Bureau of
the Public Debt's website at www.publicdebt.treas.gov.
Details about the operation and each of the eligible issues are given
in the attached highlights.
000
Attaclunent
0-867
For press releases, speeches, public schedules alld official biographies. call Ollr 2.J-hour fax line
lit
(102) 1i22-2().J()
HIGHLIGHTS OF TREASURY DEBT BUYBACK OPERATION
December 12, 2001
Par amount to be bought back ... Up to $1,500 million
Operation date . . . . . . . . . . . . . . . . . December 13, 2001
Operation close time ........... 11:00 a.m. eastern standard time
Settlement date . . . . . . . . . . . . . . . . Decernber 17, 2001
Minimum par offer amount ...... $100,000
Mul tiples 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~s of a dollar.
The third decimal
nd
represents eighths of a 32
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) :
~ Rate
Coupon I
(%) i
__
~625111/15/2022
7.125
C - - -6 . 250
7.500
7.625
6.875
6.000
6.750
6.500
6.625
I
6.375
I
6.125
I
i
Maturity
Date
I
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
NtUnber
912810 EN
912810 EP
912810 EQ
912810 ES
912810 ET
912810 EV
912810 EN
912810 EX
912810 EY
912810 EZ
912810 FA
912810 FB
Total
4
9
7
3
1
6
4
2
0
7
1
9
Par Amount
Outstanding*
7,747
16,202
22,659
9,704
10,129
11,410
12,838
9,286
10,890
9,899
9,603
22,046
152,413
Par Amount
Privately
He1d*
6,146
13,567
21,051
8,089
8,536
9,611
11,674
7,672
9,166
8,414
7,963
18,698
130,587
Par Amount
Held as
STRIPS**
3,969
6,328
3,322
6,177
6,504
4,003
1,185
2,734
5,793
3,208
2,404
10,498
56,125
* Par amounts are as of December II, 2001.
** Par amounts are as of December 10, 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 OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.e 20220 - (202) 622·2960
PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT:
Office of Public Affairs
202-622-2960
FOR IMMEDIATE RELEASE
December 13, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS
Today, Treasury completed a debt buyback (redemption) operation for $1,500 million
A total of 12 issues maturing between November 2022 and
~ovember 2027 were eligible for this operation. The settlement date for this operation will
,e December 17, 2001. Summary results of this operation are presented below.
par of its outstanding issues.
(amounts in millions)
ffers Received (Par Amount) :
ffers Accepted (Par Amount) :
$5,393
1,500
otal Price Paid for Issues
(Less Accrued Interest) :
1,728
umber of Issues Eligible:
For Operation:
For Which Offers were Accepted:
eighted Average Yield
of all Accepted Offers (%):
eighted Average Maturity
for all Accepted Securities
12
9
5.730
(in years) :
23.8
tails for each issue accompany this release.
868
For press releases, speeches, public; schedules and official biographies, call ollr l-I-hourj{LY line at (202) 622-2040
December 13, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS
(am~unts
in
~illions.
prices in
deci~als)
Table I
Par
Maturity
a
~
Coupon
Ra t e
(0)
~
7.625
7.125
6.250
7.500
7.625
11/15/2022
02/15/2023
08/15/2023
11/15/2024
02/15/2025
08/15/2025
02/15/2026
6.875
6.000
5.750
5.500
5.625
6.375
6.125
08/15/2026
11/15/2026
02/15/2027
08/15/2027
11/15/2027
Amount
Off e r e d
Weighted
Average
Accepted
Par
Amount
Acceoted
Highest
Accepted
Price
323
123.015
116.875
122.997
116.875
N/A
N/A
124.109
114.562
N/A
N/A
124.075
114.562
286
20
297
246
25
N/A
113 . 312
110.062
111.843
108.781
105.500
N/A
113.289
110.062
111. 807
108.748
105.500
Weighted
Average
Accepted
Yield
Par Amount
PrivatelY Held*
5.724
5.737
N/A
N/A
5.733
5.741
N/A
5.736
5.736
5.732
5,823
13,517
21,051
8,089
8,426
9,468
11,674
7,386
9,146
8,117
5.720
5.715
7,717
18,673
498
510
263
431
550
678
290
421
415
407
470
460
50
0
0
110
143
°
~
Table I I
Coupon
Rate (".)
0
Maturity
Date
eUSIP
Number
Lowest
Accepted
Yield
7.625
7.125
6.250
7.500
7.625
6.875
5.000
6.750
6.500
6.625
6.375
11/15/2022
02/15/2023
08/15/2023
11/15/2024
02/15/2025
08/15/2025
02/15/2026
08/15/2026
11/15/2026
02/15/2027
91281DEN4
91281DEP9
912810EQ7
912810ES3
912810ETl
912810EV6
912810EW4
912810EX2
912810EYO
9l2810EZ7
912810FAI
5.723
5.737
N/A
N/A
5.731
5.741
N/A
5.734
5.736
5.730
5.718
9l2810FB9
5.715
08/15/2027
11/15/2027
6.125
:ota: Par
To~al Par
.~cunt
.~ount
Offered:
Accepted:
5,393
1,500
Note: Due to rounding. details may not add to totals.
*.'unoun:
outs~and.:ng
a:ter operation. Ca:culated using amounts reported on announcement.
OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTO.'I, D.C .• 20220. (202) 622.2960
EMBARGOED UNTIL 2:30 P.M.
December 13, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS I3-WEEK AND 26-WEEK BILLS
The Treasury will auction l3-week and 26-week Treasury bills totaling $29,000
million to refund an estimated $25,390 million of publicly held I3-week and 26-week
Treasury bills maturing December 20, 2001, and to raise new cash of approximately
$3,610 million.
Also maturing is an estimated $23,000 million of publicly held 4-week
Treasury bills, the disposition of which will be announced December 17, 2001.
The Federal Reserve System holds $10,601 million of the Treasury bills maturing
on December 20, 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 December 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 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 $1,069 million into the 13-week bill and $891 million into the 26week 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-869
!or press refeast!s, speec!/(:s, pubfh' S(iIerillies and offiCial hiugraphies, Ol" Ollr _'-!-Iwur JiLl: lillt! III (~(}:;) 6::::-::1J4(}
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE TSSUED DECEMBER 20, 2001
December 13,
!un'?ul.!.~.
1)J:J:':'£11l'J
!' '..1!~ 1 j
t~Li'
0 f f e r i. II Cd •
c
Exclusion Amount
-----.~---
I.l~t:!~~Ei.l)~.i("~
CUSIl-'
{\UC
·r
Ilumber
L iOll
G J \ 1e
of Offering:
security
t:.YIJe of
Telln dlld
cia te .
ddt
()LiC].illctl
date
outsLanding
Lid amount and multiples
('llLLelltly
r·JI1!iI!lUlli
e . . .
dctte
l-1dturiLy
iosue
$14,000 million
$14,000 million
$ 4,200 million
. 91-day bill
.912795 JL 6
.December 17, 2001
· December 20, 2001
.March 21, 2002
· September 20, 2001
$16,527 million
· $1, 000
2001
$15,000 million
$15,000 million
None
182-day bill
912795 JZ 5
December 17, 2001
December 2 0, 2001
June 20, 2002
December 20, 2001
$1, 000
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 FIHA
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 (NLP) 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 at
competitive tenders.
Naximum Rec~nized Bid at a Single Rate.
35% of public offering
~~::ciI1\Unl Awar.-d . . . . " .. , . . . . .
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
~..=:l'!1lent Terms;
By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full par amount
wiLh 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.
TlIe
PUBLIC DEBT NEWS
Department of the Treasury· Bureau of the Public Debt· Washingtoll, DC 20239
FOR)MNLEDIA TE RELEASE
Contact: Ofl1ce of FinanciJlg
202-691-3550
December] 4, 2001
TREASURY'S INFLATION-1NDEXF.D SECURITIES
cpr NUMBERS AND DAILY INDEX RATIOS
JANUARY REFERENCE
Public Debt announced today the reference Consumer Price Index (CPJ) numbers flnd daily
index ratios for the month of JaDuary for the following Treasury inflation-indexed securilies:
(J) 3-3/8% IO-year notes due January 15,2007
(2) 3-5/8% 5-ycar notes due: July J 5,2002
(3) 3-5/8% 1O-year notes clue JalltialY \5,2008
(4) 3-5/8% 30-year bonds due April 15,2028
(5) 3-7/8% I O-year notes dlle ]imunry J 5, 2U09
(6) 3-7/8%
30-yearbond~
due: April 15, 2029
(7) 4-1/4% IO-yearnotes GUeJallll<ll)' 15,2010
(8) 3-112% lO-yearnotts cJucJanuary 15,2011
(9) 3-3/8% 30-112-ycar bonds due April J 5,2032
Thi:; information is ba.<.:cd on the non-sea.sonally <Idjusrcd u.s. City Average Al1ltems Consumer Price
Inch:>: for All Urban Consumers (CP1-U) published by the Bureau of Labor Statistics of the u.s.
Dep<lrtment 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 tile prior three-month period.
This infOTTTlation is available through the Treasury's Office of Public Affairs automated fax
system by calling 202-622-2040 andrcqucsting document number 870. The information is also available
on the Internet at Public Debt's website (http://www.publicclc.:bt.trcas.gov).
The information for February is expected to be released on January) 6,2002.
000
Artachment
http://www . pub lied cbt.tre:ls.l;oY
PO-870
lREASURY INFLA110N-INDEXED SECURmES
Ref CPt and Index Ratios lor
January 2002
Security:
Adollian,,1 Issue Dalers):
~.3Ia'i4 10·Y~iH Noles
Sl'flcs A·2001
912B272/,1J
Jllnuary 15,1997
February 6, 1~S7
Aprlt15,1991
3-5/8% 5·'{ellr Noles
SerIes J-2002
S-j2P73All
July 15,1997
July 15, 19S1
October 15, 1997
"latUrtly Dah::
ReI CPI on Oal~.l
Janu ary 15, 2007
, 56.4J548
July 15, 2002
160.1MB4
DO$cripUon:
GUSIP NumbN:
Daled Dale:
Origllllllssue Dale:
O~le.
Dale
Jan.
1
J~n.
2
3
Jail.
Jiln.
Jan.
4
Jan.
6
Jan.
Jan.
Jan.
Jan.
Jan.
Jan.
Jan.
Jan.
Jill).
JlJn.
Jan.
Jan.
7
5
6
11
Ref CPI
Index Ratio
2002
2002
177 .70000
177 .69032
2002
177.tiB065
2002
2002
2002
2002
2002
2002
177.67057
1.12159
U215J
1.12147
1.12141
1.121}5
1.11129
1.1212J
1.12116
1.12110
10
2002
11
Jafl.
JaJl.
18
15
1002
2002
2002
2002
2002
1002
2002
2002
2002
70
lOn
Ji'lli.
21
Jan.
22
23
2002
2002
12
13
14
15
16
17
177.6G129
177.651til
177.64194
177.63216
171.62258
177.61290
171.60n3
177.59:)55
1.121D~
1.1:!09S
1.11092
1.1208G
1.12080
1.12074
1.12068
1.120/)1
1.12055
177.58387
177.57419
t77 .5& 452
177 .55~84
Jan.
Jon.
24
25
2&
27
26
2002
2002
2002
2002
2002
177.54510
177.5J54B
117.52581
177.51613
177.50645
177.49677
177.46710
177.47742
177 .4&774
177.45606
177.44BJ9
177.43871
JaIl.
29
177.4290~
1.11968
J:'II.
JO
2002
2002
177.41935
U~9ill
Jail.
31
~002
177.4D968
1.11976
Jan.
J~fI.
JJfI.
JOlfi.
2002
CPI·U (NSI\) lor:
S~plember
1.1ou~6
1.1.20~J
1.10B40
1.10riJ ...
1.10828
1.10622
1.10S16
1.10BIO
1.1 oa04
1.1 ~OJI
1.12025
i.12019
1.11013
1.12007
\.!2000
1.11994
178.J
912627JT7
Januaty 1S, 1998
Janu<J1)' 15, 199B
October 1 S, 1!l98
J8nu~
Indel( Ratio
1.09994
1.09988
\ .09962
'l.(J9S76
1.09970
1.09964
1.09958
Inde~
Rnllo
1.Q~B6e
1.09852
1.03656
1.()S650
1.091144
1.0963B
1.098 :l2
1.09~26
1.09020
1.09014
1.09006
1.091102
1.0979&
1.09790
1.098:18
1.098:12
I.Q9826
1.09820
1.09814
177.7
April 15. 2028
161.74000
1.0~952
1.0~9J4
1.107~B
].516% JO·Year Bonds
BDnds 01 Aprlt 2028
912610FD5
April 15, 1998
April1S,199B
Jut)' 15, 199B
1.09946
1.0'3940
1.09928
1.0S92.2
1.09916
1.09310
1.09904
1.096'38
1.C9B92
I.M80&
1.1198 ~o
1.1l9874
1.Q!l8S8
1.1)9862
1.09656
L09650
1.091144
1.107S2
1.10786
1.107DO
1.10774
Ot:tobe{ 2001
ry 15, 200A
161.55434
1.10955
1.1094:1
1.10343
1.109j1
1.10931
1.10925
1.10)19
1.10313
1.10901
1.10901
1.10S;)S
1.'iOGS9
UOOSJ
1.101H1
1.10B71
1.10064
.1.10B56
1.10651
1.120~9
1.110~1
2001
Indet RaUo
3·518% 1 O·Year Notus
Series A·200S
1.0978~
1.09778
1.09772
1.09761>
1.09760
1.05754
1.0974B
1.09742
109736
1.09730
1.09724
I.OC/711l
1.(J9712
1.(J97(J6
U97(JO
1.09S94
1.V9S88
Novemh"r 201)1
177.4
TREASURY INFLATION·INDEXED SECURITIES
Ref CPI and Index Ratios for
January 2002
Security:
o e,c ription:
CUSIP Number:
Dated Oat,,;
Originall.su~ Date:
Ad!litionalls'5ue DiI\r::{s):
3·718% {O·Year Noles
Malurity Dale:
Rot CPI on DB\(.'d D2(e:
January 15.2009
164.00000
D.le
J~n.
1
Jan.
Jan.
J"n.
Jan.
Jan.
2
J~n.
Jan.
Jan.
Jan.
Jan.
Jan
Jan.
Jan.
Jan.
J&n.
Jdn.
Jan.
Jan.
JOJn.
Jan.
J;;n.
Jan.
Jan.
Jan.
J.n.
Ja.n.
Jan.
J"n.
J"n.
Jan.
J
4
S
6
7
8
')
1tl
11
11
13
H
15
16
11
lB
1~
20
21
22
2J
24
25
26
27
ZIl
29
JO
J1
2002
2002
2002
2002
2002
2002
2002
2002
2a02
2002
2002
:Z01)2
2002
2002
2002
2002
Z002
2002
2002
1002
2001
2002
2002
2002
2001
3-71Il'/. 30·Ynr BOl1ds
Bonds 01 April 2029
912810FH6
A!,riI15,1999
April \5, 1$99
October i5, 11>9~
OclolJer 15, :ZOOO
Al'ril 1 S, 2029
164.:I933J
~114%
10·Ycar Noles
Series A·2010
9i2S275WB
January 15,2000
January 16,2000
July 15, 2000
:\.1/2% 10·Ycar Nole.
Series A·2011
9128276R8
J3C\U~ry 15,2001
January 16, 2001
July 16,2001
January is, 2010
168.24516
Janu~ry
lS. 2011
174.04516
R&/ CPI
Imlex Ratio
Index RatiO
lOllex Rallo
101'9)1, RAllo
177.70000
177.6S032
177.61)055
H7.670n
17766129
177.05161
177.64194
177.63226
177.62:.'.56
177.61290
177.60J2J
177.59JS5
177.53J67
177 .57419
1.0a 354
1.00094
1.0ij3~8
1.0608S
I.OB083
1.02100
1.02094
In.66452
1.I>S271
1.05620
1.05C14
1.05508
1.05602
1.055';17
1.05591
1.05505
1.0557:1
1.05574
1.05568
1.05562
1.05556
1.05551
1.05545
1.055J9
1.055)3
1.05528
1.05522
1.0(1516
1.0tiJ~2
U193j6
1.08330
1.08:)24
1.06318
1.0aJ12
"I.()(IJOS
1.<IeJOl
1.0e295
1.0a2a~
177.!i5484
177.54516
177.S35411
177.52561
177.51£13
177.50645
171.49677
177.48710
177 .47742
177.4G77·1
2002
177 .4S805
2002
2002
2002
2002
2002
177.44839
177.4:la71
177.4290l
CPI.U (NSA) ror:
--
Series A·2009
912a27.\Y5
January 15, ~9S9
Janu~r/15, 19S9
July 15, 1:1:19
1.0S02~
1.~li277
1.06016
1.08012
1.!i82&5
1.0a~OG
1.03259
1.0325J
1.06247
1.08242
1.002:15
1.06230
1.0B224
1.08118
1.08212
1.0820[;
1.08000
~.OS200
177.40~G6
Seplembor laO 1
1.0S203
"1.0 6194
1.08186
1.oJ1 UJ
'1.08177
177.419l5
17B :!
1.01l077
1.08071
1.0 B06 a
1.01l0$9
1.06053
1.OB047
1.0&041
1.080J6
1.0BOJO
1.07~O4
1.07968
t.079SJ
\.07971
~.0797 \
1.0796 5
1.07959
1.07')53
1.07947
1.1l7941
U179JS
1.07930
Oclober 2001
171.7
i
~.02011
~.02005
1.020DO
U5S~0
1.01 \194
1.01 !)SS
1.01BS3
1.0,976
1.01972
1.01%6
1.01961
1.01955
1.01950
1.0194.0\
\.01339
1.01933
1.05493
1.054117
1.0541}2
1.05476
1.05470
1.054C4
1.05459
1.0545J
1.05447
1.079'16
1.0208J
1.0207 a
l.n072
1.02067
1.0201;1
1.0Z055
1.02.050
1.02.1144
1.020J9
1.020n
1.02Ul!!
1.02022
1.02017
1.05505
1.0S~~3
1.D7n1
1.02089
No'E'mber 2001
~
177.4
TREASURY INFLATION-INDEXED SECURlTIES
Ref CPI and In dOll Ratios for
January 2002
Security:
3-3/8',(, 30-'\t2·Y.,ar 80nds
Bonds 01 ApTillon
912810FQG
DescripUon:
CUSIf> NlJmber:
Dated OatS:
Original Issue Dale:
Additional Issue D:lte[s):
October 15, 2001
October 15, 2001
Ma{u'ity Dale:
Rsl CPI on O~led Date;
Dale
Jan.
1
2002
J~n.
2
2002
Jan.
j
J~n.
4
2002
lO02
2002
1001
2002
Jan.
J3n.
Jan.
Jan.
Jan.
Jan.
Jan.
Jan.
JBII.
Jan.
J~n.
JDn.
J.n.
5
G
7
S
9
10
11
12
1J
14
15
16
17
1e
2002
2002
2002
2002
2002
2002
2002
2002
2002
2002
A!')r/I 15, 2032
177.50000
RolCPI
1ndcx Rallo
177.70000
177.59032
177.66065
177.670S7
177.66129
\.00113
1.00107
1.00102
I.QOO96
1.00091
100035
1.00080
1.00075
1.00069
1.00064
1.00USS
1.00053
1.00047
1.00042
1.00036
1.0(0)1
1.000]5
1.00020
1.00015
UlOOo9
177.&~1&1
177.G411}4
177 )jJ226
171.62258
177 .612!}0
177.60323
177.SnS5
177 .5636 7
177.57419
177.56452
177.S5464
177.54516
177 .535~1I
177.5251)1
12
2J
24
25
2002
2002
200Z
2002
2002
2002
2002
1002
26
2002
177.4S~OG
Jail.
27
21l
29
Jan.
30
Jan.
3\
2002
2002
2002
2002
2001
177.441>:>9
In.4:.lB71
177.42903
177 .41 9JS
177.40968
Jan.
Jan.
Jail.
Jan.
Jan.
J.n.
Jan.
Jail.
J4n.
Jan,
Jan.
19
20
21
CPI-U (NSA) lor :
177.5161:1
177.50645
177.49677
117.<16710
177.47742
1.0000~
Q.9SS9B
0.99993
O.999n'7
0.99%2
0.99976
0.99971
1TTAfi174
SEplembor 2001
0.99965
0.9~960
O.99!>55
0.9S943
178.3
Oc:IQb~r
2001
177.7
NOlfombl!r 2001
-
-
177.4
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTO,\,/, D.C.e 20220. (202) 622.2960
FOR iMMEDIATE RELEASE
December 14,2001
Contact: Tara Bradshaw
(202) 622-2014
TREASURY ISSUES RESEARCH CREDIT REGULATIONS
The Treasury Department and the Internal Revenue Service today issued proposed
regulations on the research credit in order to lay to rest many ofthe disputes about
whether research and experimentation expenses qualify for the credit. The proposed
regulations eliminate the controversial "discovery test" that was included in the
regulations issued on January 3, 2001. Under the discovery test, research and
experimentation expenses did not qualify for the credit unless the taxpayer's research
advanced the state of knowledge in a particular field, a requirement not found in the
statute and difficult for the Internal Revenue Service and taxpayers to apply. The
proposed regulations also clarify the internal software use rules.
"We need to use every tool available to encourage growth, investment and job creation in
our economy," stated Treasury Secretary Paul O'NeilL "The elimination of the discovery
test will make it easier for businesses to qualify for the credit in the course of developing
new products."
On January 3,2001, Treasury and IRS issued final regulations (in T.D. 8930)
implementing the 1986 changes to the definition of qualified research. Taxpayers
strongly criticized the regulations, and on January 31,2001, Treasury and IRS suspended
the rules, indicating the changes would be reviewed and requesting additional public
comments.
The proposed regulations make significant changes to provide rules regarding:
Qualified Research
The proposed regulations eliminate the "discovery test", which required that
qualified research be "undertaken to obtain knowledge that exceeds, expands, or refines
the common knowledge of skilled professionals in a particular field of science or
engineering." The "discovery test" is the single greatest source of controversy between
taxpayers and the IRS.
PO-871
_For press relea.ses. speeches1 :fJubiic schedules and 'Official biographies, call our 24-hour fax line at (202) S22-2040
.
·u.s
Government Prlntlnq Office 1998· 619-559
Documentation
The pmposed [egubticlllS eliminate the research credit specific documentation
iCLjuirclllent in Jccord \\ith Congressional direction thut the regulations mil1lIl1i/c the
admilllstratin: Jnd record-kceping burden on taxpayers related to the credit. The reyised
regulatlOll pro\1deS t1cxibility for taxpayers in keeping the records necessary to establish
eligibility for the credit.
Internallrse Software
The proposed regulations ulso describe when computer sottware is develoPed by a
taxpayer primurily for the taxpuyer's internal Llse - subjecting the related expenses to a
stricter test for credit digibility - und clarify \vhen sllch software is eligible for the
research credit.
Effective Date
The proposed regulations, when finalized, \vill be etTective for taxable years
ending after the date the proposed regulations are published in the Federal Register. In
order to clarify the administration of the credit until final niles are issued, the preamble to
the proposed regulations states that the IRS generally will not challenge return positions
that are consistent with the proposed regulations.
,\ copy of the proposed regulations that will be published in the Federal Register is
available Oil the website at \Vww.treas.gov.
-30-
OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. -
WASHINGTO~,
D.C.. 20220. (202) 622.2960
Noe Garcia, III
(202) 622·0087
FOR IMMEDIATE RELEASE
December 14,2001
JOSE ANGEL FOURQUET
Today, December 14,2001 at 3:30pm Secretary of the Treasury Paul O'Neill
will swear-in Jose A. Fourquet as the youngest U.S. Executive Director to the lnterAmerican Development Bank in U.S. history. The U.S. Senate unanimously
confirmed Jose A. Fourquet as the Ith U.S. Executive Director of the Inter-American
th
Development Bank on November 15 , 2001. President George VV. Bush nominated
Mr. Fourquet on September lih, 2001. A native ofPuerio Rico, M1'. Fourquet also
serves as U.S. Executive Director of the Inter-American Investment Corporation and
represents the U.S. on the Donors Committee ofthe Multilateral Investment Fund.
Previously, M1'. Fourquet was a Vice-President in the Fixed Income, Currency &
Commodities Division of Goldman, Sachs & Co. in New York. In his last year at the
firm, Mr. Fourquet was responsible for executing a number of initiatives focusing on
recruiting, training, mentoring, and diversity in the workforce. Prior to that, Mr.
Fourquet worked for four years as an institutional salesperson in the Emerging Debt
Markets group of Goldman. It was in that role that Mr. Fourquet developed
significant expertise in the emerging capital markets, especially those in Latin
America. He also helped the fim1 expand its coverage of institutional cliems across
Venezuela, Colombia. Peru and Ecuador.
In addition to his banking responsibilities, :vir. Fourquet played a prominent
role in firm-wide activities at Goldman Sachs. He represented the firm's Latino
community in the Network Advisory Council and chaired Goldman's first-ever
Hispanic Heritage Month celebrations. Mr. Fourquet was also a member of the finn's
Diversity Steering Committee and Captain of the Georgetown recruiting teams.
Prior to joining Goldman Sachs, M1'. F ourquet worked for six years as an
Operations Officer with the Central Intelligence Agency. In that capacity. Mr.
Fourquet was posted abroad in Latin America and the Caribbean where he collected,
evaluated and rep0l1ed high-priority intelligence of interest to U.S. policy makers.
M1'. Fourquet graduated from Georgetown University with i.l BA in Govcl11l11ent and
a Special Certificate in Latin American Studies. He also obtained an MBA in Finance fr0111
Columbia Business School where he was inducted into the Beta Gamma Sigma honor
society.
M1'. Fourquet and his wife Karen have two children and are expecting a third in ~arly
January 2002.
PO-872
-.!or press rde:ases. speeches, public schedules and official oiogrczjyhies,;:r:;i! Dur 24-nourJf1X Jii?2 xt (202) 622-2MO
·u.s
Government Prlntlnq Office
l~~e· 61~'J59
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDlATE RELEASE
December 14, 2001
Contact: Peter Hollenbach
(202) 691-3302
BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BONDS OWNERS
AFFECTED BY TORl'\lADOES AND SEVERE WEATHER IN MISSISSIPPI
The Bureau of Public Debt took action to assist victims of flooding in Mississippi by expediting the
replacement or payment of United States Savings Bonds for owners in the affected areas. The
emergency procedures are effective immediately for paying agents and owners in those areas of
Mississippi affected by the storms. These procedures will remain in effect through the end of
January 2002.
Public Debt's action waives the normal six-month minimum holding period for Series EE and
Series I savings bonds presented to authorized paying agents for redemption by residents of the
affected area. Most finztl1cial mstitutions serve as paying agents for savings bonds .
.lY1ississippi counties involved are Bolivar, DeSoto, Hinds, Humphreys, Madison, Panola, Quitman,
Sunflower, Tate and Washington. Should additional counties be declared disaster areas the
emergency procedures for savings bonds owners will go into effect for those areas.
The replacement of bonds lost or destroyed will ~Jlso be expedited by Public Debt. Bond owners
should complete fonn PD-l 048, available at most financial institutions or by writing the Kansas
City Federal Reserve Bank's Savings Bond Customer Service Depa11ment, 925 Grand Boulevard,
Kansas City, Missouri 64198; phone (816) 881-2000. This fonTI can also be downloaded from
Public Debt's website at: www.publicdebureas.gov. Bond owners should include as much
infonnation as possible about the lost bonds on the fonn. This infonnation should include how the
bonds were inscribed, social security number, approximate dates of issue, bond denominations and
serial numbers if available. The completed fom1 must be certified by a notary public or an officer
of a financial institution. Completed fonns should be sent to: Bureau of Public Debt, Office of
Investor Services located at 200 Third St., Parkersburg, West Virginia 26106-1328. Bond owners
should write the word "DISASTER" on the front of their envelopes, to help expedite the processing
of claims.
000
PO-S73
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
FOR IMMEDIATE RELEASE
Contact: Peter Hollenbach
(202) 691-3502
December 14,2001
BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BONDS OWNERS
AFFECTED BY TORNADOES AND SEVERE WEATHER IN ALABAMA
The Bureau of Public Debt took action to assist victims of severe weather in Alabama by expediting
the replacement or payment of United States Savings Bonds for owners in the affected areas. The
emergency procedures are effective immediately for paying agents and owners in Alabdma by the
stOTInS. These procedures will remain in effect through the end of January 2002.
Public Debt's action waives the nOlmal six-month minimum holding period for Series EE and
Series I savings bonds presented to authorized paying agents for redemption by residenls of the
affected area. Most financial institutions serve as paying agents for savings bonds.
Alabamd counties involved are Autaug[l, Blount, Butler, Calhoun, Cherokee, Clay, D:lle, DeKalb,
Etowah, Fayelte, Jefferson, Lamur, Lawrence, Madison, Marion, Marshall, St. Clair, Talladega and
Winston. Should additional counties be declared disaster areas the emergency procedures for
savings bonds owners will go into effect for those areas.
The replacement of bonds lost or destroyed will also be expedited by Public Debt. Bond owners
should complete fonn PD-1048, available at most financial institutions or by wliting the Richmond
Federal Reserve Bank's Savings Bond Customer Service Department, 701 East Byrd Street,
Richmond, Virginia 23219; phone (804) 697-8370. This fOlm can also be downloaded from
Public Debt's websile at: www.pubEcdebUreas.gov. Bond owners should include as much
information as possible about the lost bonds on the form. This infomlation should include how the
bonds were inscribed, social security number, approximate dates of issue, bond denominations and
selial numbers if available. The completed fonn must be certified by a notary public or an officer
of a financial institution. Completed f01111S should he sent to: Bureau of Public Debt, Office of
Investor Services, 200 Third St., Parkersburg, West Virginia 26106-1328. Bond owners should
wlite the word "DISASTER" on the front of their envelopes, to help expedite the processing of
claims.
000
PO-874
OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTO,\I, D.C.- 20220. (202) 622.2960
FOR IMMEDIATE RELEASE
December 17, 2001
Contact: Public Affairs
(202) 622-2960
MEDIA "\[)VISORY
PRESS BRIEFING \VITH DEPUTY SECRETARY OF THE TREASL'RY
KEN~ETH DAM and UNDERSECRETARY OF STATE ALAN LARSON
Dam and Larson will address their recent trip to Mexico and the first "Partnership
for Prosperity" conference. "Partnership for Prosperity" is binational working group
first announced by Mexican President Vicente Fox and U.S. President George Bush on
September 6.
Statements by Dam and Larson followed by Q&A
Time: 1:-:1-5 pm ·2:05 pm
Room: Diplomatic Reception Room
Monday, December 1ih, 2001
Members of the media withoul Treasury or White House press credentials need to
contact the Treasury Office of Public Affairs at (202) 622-2960 with the following
infomlation: full legal name, social security number, and date ofbirih. This infonnation
may also be faxed to (202) 622-1999.
PO-875
--
Far "Dress releases. speeches. public schedules and J)ffidaZ iJiographies, call
.
DW'
·u.s
.,..
---
2":i-hour ji.zx lin2 :Ji (21)2) 622·2040
Government Prlntlnq Office 1998· 619'559
Page 1 of 10
po876
FROM THE OFFICE OF PUBLIC AFFAIRS
FOR IMMEDIATE RELEASE
Novel'1oer 9,2001
PO-870
Report on Implementation of Recommendations Made by the International Financial Institutions
Advisory Commission
October 2001
The international financial institutions (IFls) playa key role in the world economy. These institutions
are an important tool for dealing with critical problems facing the international financial system and for
working to improve the standard of living of people around the world. However, there is wide
recognition that these institutions can and must do a much better job than they have done in the past.
There has been considerable public debate about how to strengthen and reform the international
financial institutions in recent years. The report prepared in March 2000 by the International Financial
Institution Advisory Commission, chaired by Professor Alan Meltzer, has made an important
contribution to this debate and has helped advance the cause of reform. Indeed, some progress has been
achieved in the last year.
There is nonetheless an ongoing need for refomls to increase the effectiveness of the international
financial institutions. Each of the institutions must focus carefully on the central areas in which it has
expertise and experience and be accountable and take responsibility for results.
This report provides an update on progress achieved on reforms to date and lays out the Administration's
objectives for reform going forward. The report is prepared pursuant to section 603(i)(2) of the Foreign
Operations, Export Financing, and Related Programs Appropriations Act, 1999 (section 101 (d) of Public
Law 105-277). Section 603(i)(2) provides that the President, through the Secretary of the Treasury, shall
report annually, "for three years after the tennination of the Commission ... on the steps taken, if any,
through relevant international institutions and international fora to implement such recommendations
[made by the Commission] as are deemed feasible and desirable" in the June 2000 Treasury response to
the Commission's report. This report is in fulfillment of legislative requirements and also provides
information additional to what is strictly required by the statute.
International Monetary Fund
The Commission's majority report underlined the importance of focusing the International Monetary
Fund (lMF) on areas where it has expertise, further enhancing the transparency of IMF operations,
http://wwv·.treas.gov/press/releases/pc876.htm
12118/2001
Page 2 of 10
po876
improving the IMF's perfonnance in the area of crisis prevention, and sharpening incentives for
countries to reduce their vulnerability to crises.
Over the past year, a number of efforts have been pursued or initiated at the IMF to strengthen its
effectiveness. This work is taking place against the backdrop of deliberations by IMF management, the
Fund's shareholders. and the pUblic.
As discussed further below, the Treasury Department has elaborated priorities for refom1 of the IMF that
emphasize a number of interrelated goals, which are shared by the Managing Director of the IMF. These
include sharpening the focus of IMF involvement on areas in which the Fund has expertise and a clear
mand(\t:::; inten:-.ifying the IMF's attention to and improving the IMF's perfom1ance in the area of crisis
preven~:on; and increasing transparency and accountability.
These reforms and objectives are also clearly consistent with key aspects of recommendations made by
the Commission. The following sections provide an update of progress made in key areas since last
year's report to Congress, and further steps that are foreseen.
Sharpening the Foclls Of the J!vfF
Over the years, the Fund has taken on more and more actIVItIes, some of which overlap with the
mandates of the multilateral development banks, such as privatization, public sector management, and
social safety nets. While these are relevant issues with important macroeconomic and fiscal
consequences, the IMF does not have a comparative advantage in addressing them, and the added effort
of attempting to do so arguably diminishes the effectiveness of Fund staff in pursuing more central
objectives.
Treasury is therefore pushing for the IMF to sharpen the focus of its involvement. As Secretary O'Neill
has stated, the core objectives of the IMF are to (1) promote sound monetary, fiscal, exchange rate, and
financial sector policies; (2) carefully monitor economic conditions; and (3) deal with critical problems
in the international financial system as soon as they are detected. The strength of the IMF, and its
distinguishing feature among the IFls, is its expertise in these areas. Steps taken this year in a number of
areas help move the IMF in this direction, and work will continue going forward.
Reform of JAfF Lending Facilities
The effectiveness of the IMF depends importantly on the structure ofIMF lending tools and the content
of the policy refomls they support. This includes ensuring that IMF lending tools provide incentives for
countries to adopt policy refornls, repay the Fund quickly, and rely first and foremost on private finance.
Four lending facilities were eliminated and in November 2000 Fund members agreed on a streamlining
of its lending tools in order to shift the focus of non-concessional lending to short-ternl emergency
finance that is priced to discourage casual use and encourage rapid repayment. Refomls adopted include
the following:
• An expectation of early repayment of non-concessional lending.
• Limited use of Extended Arrangements, to reinforce the focus on making resources available only
for the short ternl.
• Surcharges for higher levels of access to discourage excessive reliance on Fund resources, either
for a single or consecutive programs.
http://wwv. .lreas.gov/press/releases/pU>76.htm
r
1211812001
p0876
Page 3 of 10
• Enhancement of the Contingent Credit Line (CCL) by lowering the surcharge and providing
countries with greater assurance of their ability to borrow an initial amount; higher standards for
qualification help mitigate potential moral hazard concerns related to the greater assurance of the
ability to borrow.
Implementation of these reforms will help the IMF use a streamlined set of core non-concessional
instruments to concentrate its lending on short-term balance of payments needs and thus contribute to
the effort to focus the Fund's work on its areas of expertise.
Con dition alit.v
As paL of work to tighten the IMF's focus, the Fund has begun to sharpen and prioritize its approach to
conditionality. This means concentrating on lending conditions central to the IMF's areas of expertise monetary, fiscal, exchange rate, and financial sector policies.
Focusing conditionality is an important priority for Managing Director Kohler. Indeed, the scope of the
conditions attached to IMF loans in recent years became very broad. Secretary O'Neill has underscored
the importance of reversing this trend - so that IMF conditions are more enforceable, measurable,
purposeful and in the interest of the people in recipient countries.
Efforts to focus and prioritize lending conditions are already part of IMF work in individual countries,
and progress is already being made in concentrating conditions on areas within the Fund's expertise. The
Fund's Executive Board discussed conditionality in March and July 2001, including the preliminary
results of efforts to focus conditionality on priority issues. The Board will continue its consideration this
fall when it examines the specific modalities for implementing conditions. In addition, the Fund has
conducted seminars and sought external input, including through its website, to inform efforts to bring
greater focus to Fund conditionality - efforts that are expected to continue throughout the next year.
An important and needed complement to this work on conditionality will be accomplishing greater
selectivity in IMF lending. Both IMF management and the Executive Board need to demonstrate a
greater willingness to focus support on countries doing the most to help themselves, and to decline to
provide financing in cases where a country is not prepared to take the steps required for the program to
enjoy a reasonable probability of success. "Ownership" of programs should be genuine and those
programs should be of high quality.
Preventing Crises alld Reducing Vulnerability
Strengthening the IMF's performance in the area of crisis prevention was one of the central themes of
the Commission report and is an area of intense focus both for the IMF and the U.S. Treasury.
Regrettably, countries come to the IMF all too often for support when their economic situations have
deteriorated sharply and often when they have disregarded the Fund's advice. Increased transparency of
the IMF's views and a more focused IMF lending role are important components of the Fund's ability to
strengthen crisis prevention.
Some encouraging steps have been taken over the past year, but more remains to be done with respect to
detecting vulnerabilities and anticipating crises, as well as taking actions to prevent crises.
In order to anticipate crises, policymakers and markets alike must be well informed about the latest
developments in countries' economies and financial markets. Providing improved information will
enable countries to take corrective actions and investors to gauge risks more accurately. The IMF is
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uniquely positioned to play a critical role in facilitating the flow of information due to its broad
membership and role in reviewing countries' economic performance (through "surveillance"). Fulfilling
this role effectively means that the IMF must both practice and advocate greater transparency. The IMF
must also take the lead in developing and promoting indicators that can help point to imminent
weaknesses - including in the broad macroeconomic context and in financial sectors. In particular, the
Treasury Department is calling on the IMF to: further develop indicators of financial vulnerability and
feature them prominently in surveillance reports that are clearer and easier to use; make better use of
early warning models; strengthen monitoring of financial sector soundness indicators and disseminate
this data; and achieve greater transparency by releasing additional reports.
Other Pv1F acti'"lties \X/ill also contribute to the crisis prevention effort.
• Standards and codes are a key benchmark for preventive action that both countries and markets
should take seriously. The Financial Stability Forum has identified 12 key standards and codes on
which countries should focus their efforts. Treasury is working with the IMF to continue and
expand efforts to promote implementation, track progress, and communicate status reports
effectively. These efforts include Reports on the Observance of Standards and Codes (ROSCs),
which summarize the extent to which countries observe certain internationally recognized
standards. Seventy-six ROSC modules, each module addressing one of a range of standards and
codes, have been published for 31 countries.
• For our part, the United States has released a series of self-assessments relating to compliance
with international standards that are available via the web. The release of U.S. self-assessments is
part of an international effort to improve transparency globally as a way to promote stronger
financial systems and to strengthening crisis prevention capabilities.
• To carry out its role in crisis prevention effectively, the IMF is working to deepen its
understanding of capital markets and their impact on member economies. The new International
Capital Markets Department will institutionalize stronger links to increasingly important private
capital markets and facilitate the flow of information, thereby improving early warning and crisis
prevention capabilities.
Anticipating crises is not enough. Countries must also listen to warning signals and act decisively to
correct their policy paths. This emphasis may be having some effect as a number of countries have
begun to address policy weaknesses by taking steps such as implementing more flexible exchange rate
arrangements and managing public debt more prudently.
As part of the effort to establish clear incentives for early action, the IMF moved in the last year to
enhance its Contingent Credit Line (CCL). The CCL was designed to help prevent crises by offering
IMF support beyond normal access limits to countries that have taken strong policy measures (i.e., that
have met pre-qualification criteria), should external events cause an unexpected disruption in their
economies. The steps taken as part of facilities reform to make the CCL a more attractive tool should
help contribute to its crisis prevention role. Both countries and markets should view the CCL as a mark
of strength - a demonstrated commitment to strong policies that should enhance confidence. With the
enhancements to the CCL, countries have expressed increased interest in qualifying for this facility.
Even more needs to be done. Focusing IMF lending on countries that are pursuing or are prepared to
pursue strong policies will discourage irresponsible actions by lessening the expectation that Fund
resources will be available unless a commitment to reform is demonstrated. The Treasury Department
will work to make sure that recent IMF reforms - for example, higher rates for higher levels of
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borrowing and accelerated repayment schedules - are applied as countries come to the Fund. This will
help provide appropriate incentives for strong policies and limited recourse to Fund financing.
Transparency and Accountability
Over the last year, the IMF has continued its efforts to enhance transparency and strengthen
accountability. In the IMF there is a presumption that countries will release to the public the documents
related to their IMF lending programs. Over the past year, the U.S. has pushed to ensure that this
presumption becomes the nonn and there have been some encouraging results. For instance:
• letters cf Intert ::;etting out the borrowing country's economic refonn intentions and memoranda
ci economic and financial policies are released about 90 percent of the time by borrowing
countries.
• Seventy-three member countries have published IMF staff reports on their economies prepared as
part of surveillance (Article IV) consultations. Summaries of Board discussions of these reports
were published for more than three-quarters of IMF members in 2000.
• Publication of Poverty Reduction Strategy Papers (PRSPs), describing the development strategy
of low-income countries borrowing from the Fund, is mandatory. Thirty-seven Interim PRSPs and
five full PRSPs have been published as of September 25,2001.
• Documents related to the Heavily Indebted Poor Countries (HIPC) initiative are also released.
Decision point documents have been published for 24 countries and completion point documents
have been published for five countries as of September 25,2001.
An increasingly wide range of infonnation about the Fund's internal activities, such as summaries of
Executive Board discussions of policy issues, is also released to public. For example, in April 2001 the
Fund released for public comment a set of staff papers related to an ongoing review of conditionality in
IMF programs and has since held a number of public seminars to seek input. Over the past year the Fund
has published infonnation about ongoing policy discussions concerning, for example, the Heavily
Indebted Poor Countries Initiative, the IMF's role in governance issues, developing international
standards and codes, and combating international money laundering.
In addition, steps have also been taken to increase IMF accountability to shareholders and to the public.
Regularly updated infonnation about the IMF's finances, such as data on member countries' financial
positions in the Fund and the IMF's liquidity position, is available on the IMF's website. In the past year,
the IMF has begun quarterly publication of its Financial Transactions Plan, which details the sources of
IMF lending. Also, the IMF's financial statements now confornl fully with international accounting
standards and clearly identify the key components of the IMF's assets and liabilities.
Earlier this year, the IMF established an independent evaluation office, with a mandate to review a broad
range ofIMF activities. This office will become operational later this year. It will operate independently
of management under the leadership of Montek Singh Ahluwalia and prepare a work program intended
to provide for careful examination of policies and programs. Mr. Singh is an economist who has served
in top economic policy positions in India.
Enhancing transparency at the IMF and the other international financial institutions is an iterative
process through which continued progressive and substantial improvements are made. The U.S. has been
the lead promoter of increased transparency and has a good record of securing the required consensus to
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achieve progressive, substantial gains - but believes more is required, including as it relates to the
operations of the Executive Boards. Although some have proposed making the Board of Directors
meetings at the IMF, World Bank, and other multilateral development banks open to the public and the
media, the Treasury Department does not believe it would be productive to propose that they conduct
their operations in public. First, it is important to note that the practice of carrying out governmental
functions and decision-making in public settings is not a common practice outside the United States,
even in many European countries. Thus, there would be virtually no support for such a broad and
sweeping initiative. Second, it is important to be mindful of the market sensitivity of many Board
discussions. Third, the IFIs are consensus-based institutions, in which U.S. influence is best exerted
through dialogue based on economic and development principles. There is a risk that the impact of U.S.
views - and th0se of other country chairs - would be diminished if other Board members viewed them as
being d.:!signed for public consumption rather than for the purpose of engaging in a serious policy
debate. There is also a very real risk that, if Board meetings are made public, many substantive debates
will take place in other, less open, fora, possibly without the United States.
Thus, progress has been made, but the IMF can and must do more. Given the importance of greater
transparency for crisis prevention, Treasury continues to urge the IMF to improve its performance in this
area. For example, more countries should make public the IMF staff reports for their Article IV
consultations. Further, while, as noted above, the vast majority (about 90 percent) of countries
borrowing from the IMF publish documents setting out program conditions, all such documents should
be released.
Multilateral Development Banks
The Commission focused on achieving the long-term goal of reducing poverty, and its majority report
recommended a number of operational and policy reforms to improve the performance of the
multilateral development banks (MDBs) in this crucial area.
Secretary O'Neill and the G-7 have made strengthening the multilateral development banks and
improving their effectiveness in raising the standard of living of people throughout the world a central
focus this year. Treasury views increased productivity as the driving force behind increases in income
per capita. To reduce poverty, there is no alternative to increasing productivity. As long as large
segments of a population are stuck in low-productivity employment, prospects for sustained growth and
poverty reduction will be limited.
Secretary O'Neill has specifically urged the MDBs to become more focused, to improve their
coordination with each other, and to promote productivity by placing greater emphasis on education and
aggressively promoting the rule of law, enforceable contacts, a stable government process, and actions
to eliminate corruption.
The Treasury Department is therefore pressing the MDBs to:
• concentrate resources on countries that demonstrate their commitment to sound policies that
encourage productivity;
• focus on activities that improve the productivity of the economy and/or remove economic
constraints that hamper such productivity; and
• enhance the capacity of individuals (e.g., by better quality education and health services) to
contribute to countries' economic activities.
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The Department also participated with our G-7 counterparts in the preparation of a report on MDB
reform that was transmitted to the Heads of State and Government at the Genoa Summit. The process for
preparing this report included an open and frank dialogue with MDB Managements and informal
consultations with other shareholders.
Treasury is actively promoting the increased use of International Development Association (IDA)
grants. Secretary O'Neill highlighted his commitment to more grants in testimony to the Congress and
he has raised the issue in his discussions with G-7 Finance Ministers. Treasury is also pressing the issue
of grants in the ongoing negotiations of the thirteenth replenishment of the International Development
Association (IDA-13) where we have specifically proposed grant funding for Heavily Indebted Poor
Countries (HIPe), prn!~cts for combating infectious diseases and regional projects. The April 28, 2001
Statem:'.1t of G- 7 Finance Ministers and Central Bank Governors in Washington noted the ongoing
discussion on the increased use of grants within IDA-13 and encouraged the World Bank to carefully
explore the related financial implications and practical implementation issues. Treasury has also asked
the African Development Fund to consider the implications of a limited increase in the grant financing it
provides.
Treasury has been successful in generating support for increased IDA grant financing in the G-7.
However, there is no G-7 consensus on the scale of such grants (the strongest supporters of the U.S. are
thinking in terms of a 10 percent limit) or on which countries and/or projects should be eligible for
grants. There is also no consensus among IDA donors on the issue, with many countries still preferring
that IDA retain its current, highly concessional credit terms.
On July 17, 2001 President Bush proposed that the World Bank and multilateral development banks
dramatically increase the share of their funding provided as grants rather than loans to the world's
poorest and least creditworthy (i.e., IDA-only) countries. The President called for up to 50% of the funds
provided to these countries to be provided as grants for education, health, nutrition, water supply and
sanitation and other human needs. Subsequently, in their July 20, 2001 Statement, the Heads of State
and Government of the G-7 countries agreed in Genoa to explore within the context of IDA-13 the
increased use of grants for priority social investments, such as education and health.
Treasury will continue to aggressively press the grant issue when IDA-13 replenishment negotiations
resume in late October. This issue will also be addressed at the next meeting, in November, of the
African Development Fund donors.
Treasury has also encouraged efforts to concentrate international attention on the role of the MDBs in
providing global public goods, a key issue emphasized in the Commission's report. The issue was on
the agenda for ministerial discussion at both the September 25,2000 and April 30, 2001 meetings of the
Development Committee of the World Bank and International Monetary Fund. At these meetings,
Ministers:
• (in September) endorsed World Bank involvement in global public goods in the areas of
communicable disease, trade integration, financial stability, knowledge and environmental
concerns, on the basis of four criteria: clear value-added to the Bank's development objectives; the
ability of the Bank to catalyze other resources and partnerships; a significant comparative
advantage for the Bank; and an emerging international consensus that global action is required;
and
• (in April) welcomed the Bank's commitment to anchor its global public goods activities in its core
business and country work, to remain selective and focused on each of these areas, to consolidate
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po876
its cooperation and division of labor with other international partners, and to carry out further
analytical work with its development partners on the financing arrangements and governance
required for the support of global public goods.
The G-7 MDB reform experts also considered global public goods and recommended that the MDBs
prioritize their support on efforts to fight infectious diseases, promote environmental improvement,
facilitate trade and support financial stability. The G-7 experts also underscored the importance of
ensuring that the MDB's engagement is based on their comparative advantage and effective capacity and
in close collaboration with other development partners.
The G-7 report on M1)9 reform identifies five other areas that merit priority attention for improvement.
These r::commendations are summarized as follows:
• Better co-ordination among the MDBs: The MDBs should improve their coordination at the
country and institutional level and avoid undue overlap in their operations. They should link the
timing and substance of their strategies for the same country, and harmonize their operational
policies and procedures to the highest appropriate standard.
• Improved internal governance: The MDBs' budget processes must be more transparent and better
justified. The institutions need to ensure their operations comply with approved policies and
strengthen their efforts to measure and improve development results. Their operations should be
transparent, with more open public disclosure of strategy and policy documents. Inspection
mechanisms and evaluation departments of the respective banks should report directly to their
Boards.
• Strengthened efforts to promote good governance in borrowers: The MDBs should give priority
attention to helping borrowers strengthen public sector management, accountability, and anticorruption measures. Strengthening public expenditure and budget management and improving
the promotion and enforcement of safeguard and fiduciary policies in recipient country should be
major goals.
• Pricing review: The MDBs should urgently review their lending instruments and pricing policies.
The pricing review should take into account the feasibility of price differentiation by instrument,
development impact, and stage of borrower development. The on-going review exercise on IDA
pricing, including the increased use ofIDA grants with the IDA-13 replenishment, is noted. The
MDBs should also explore whether there is scope for rationalizing and streamlining their existing
instruments to achieve greater coherence and consistency, and avoid price competition.
• Financial Sector Refornl: The MDBs have an important role to play in helping developing
countries strengthen their financial sectors. The World Bank, when appropriate and operating in
closest partnership with the regional MDBs, should playa more proactive role in this area,
including in assisting countries to develop the institutional capacity to meet international codes
and standards.
Debt Reduction for the Heavily Indebted Poor Countries (HIPCs)
The Meltzer Commission recommended 100 percent debt reduction by the IFIs and by bilateral creditors
for the HIPC countries. The Commission did not address the financial implications for the IFIs of such a
policy.
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The United States and the international community remain committed to implementing the enhanced
HlPe initiative. Twenty-three HIPC countries have now reached their decision points - the point at
which creditors commit to providing debt relief - allowing these 23 countries to begin benefiting from
debt relief that will amount to about $34 billion over time. Total debt service savings for these countries
will average over $1 billion each year over the next five years. Two of the countries, Uganda and
Bolivia, have reached their completion points, when remaining debt relief is delivered irrevocably.
Under the enhanced HIPC initiative, creditor countries forgive at least 90 percent of eligible bilateral
commercial-term debt. The United States (and some other G-7 countries) will forgive 100 percent of all
outstanding bilateral debt contracted before the June 1999 Cologne Summit for qualifying HIPCs.
Countri~s
benefiting from HIPC debt relief are required to establish and implement reforms, including
more targeted and effective development strategies. The most important long-term measure of the
success of the enhanced HIPC initiative will be the impact of these reforms on productivity and growth.
One hundred percent debt reduction by the World Bank and IMF for either all or a subset of HI PC
countries, as some have suggested, would involve substantial additional costs at a time when the current
HlPC initiative is not fully financed. Contrary to a number of claims, there are not excess resources
readily available at the World Bank (IBRD) and IMF to cover these increased costs; a number of
suggested funding mechanisms would deplete World Bank and IMF resources available for developing
countries. Apart from the Bank and Fund, resources to pay for additional debt reduction would need to
be identified, for instance from bilateral donors such as the U.S. Government. Finally, providing 100
percent debt reduction for HIPC countries raises equity concerns because other poor and indebted
countries, which may have done better jobs of managing their economies and debt obligations, would
receive no debt reduction.
Bank for International Settlements
The Bank for International Settlements (BIS) continues to promote cooperation among the central
banking and regulatory community in the area of financial and monetary stability and on the provision
of central bank services and financial instruments. Improvements at the BIS have been broadly in line
with the recommendations made by the Meltzer Commission.
The U.S. has actively supported the updating of capital adequacy standards through the Basel
Committee on Banking Supervision, which operates with a secretariat located in the BIS building. In
June 1999, the Basel Committee released a consultative paper on proposed changes to its 1988 Capital
Accord and in January 2001 the Basel Committee issued a second consultative package and received
comments. The Basel Committee intends to issue a new proposal in early 2002, followed by a brief
comment period, and finalize the revised accord by year-end, with implementation in 2005, a year later
than the original implementation period.
The BIS has increased inclusiveness through the growing activities of the Financial Stability Institute,
the development of the BIS Representative Office for Asia and the Pacific in Hong Kong SAR, and the
decision to establish a Representative Office for the Americas in Mexico City. The BIS also established
the Asian Consultative Council in March 2001.
With regard to information disclosure, the redesigned website of the BIS continues to provide a
significant amount of information about the organization and its activities, including work on the new
Capital Accord.
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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.
December 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 $23,000 million of publicly held 4-week Treasury bills
maturing December 20, 2001, and to pay down approximately $11,000 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 $10,601 million of the Treasury bills
maturing on December 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
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%.
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-877
_For press releases, speeches, public schedules and official biographies, call our 24-hollr fax line at (202) 622-2040
HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED DECEMBER 20, 2001
December 17, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . $12,000 million
Public Offering .. '" . . . . . . . . . . . . . . . $12,000 million
NLP Exclusion Amount . . . . . . . . . . . . . . . $9,000 million
Description of Offering:
Term and type of security . . . . . . . . . .
CUSIP number . . . . . . . . . . . . . . . . . . . . . . .
Auction date . . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity date . . . . . . . . . . . . . . . . . . . . . .
Original issue date . . . . . . . . . . . . . . . .
Currently outstanding . . . . . . . . . . . . . .
Minimum bid amount and multiples ...
28-day bill
912795 JC 6
December 18, 2001
December 20, 2001
January 17, 2002
July 19, 2001
$35,687 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 (NLP) 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
Office of Financing
202-691-3550
CONTACT:
FOR IMMEDIATE RELEASE
December 17, 2001
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
December 20, 2001
March 21, 2002
912795JL6
Term:
Issue Date:
Maturity Date:
CUSIP Number:
1.730%
High Rate:
Investment Rate 1/:
Price:
1.760%
99.563
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted
9.41%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
30,824,790
1,360,587
125,000
$
14,000,022 2/
32,310,377
SUBTOTAL
$
TOTAL
4,288,069
4,288,069
Federal Reserve
36,598,446
12,514,435
1,360,587
125,000
$
18,288,091
Median rate
1.710%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.680%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-cover Ratio
=
32,310,377 / 14,000,022
=
2.31
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,159,452,000
http://www.publicdebt.treas.gov
PO-878
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
December 17, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
December 20, 2001
June 20, 2002
912795JZ5
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
1.840%
Investment Rate 1/:
1. 883%
Price:
99.070
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted
2.12%. All tenders at lower rates were accepted in full.
AMOUNTS
~ERED
AND ACCEPTED (in thousands)
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
26,577,200
1,105,904
25,000
Accepted
$
27,708,104
Federal Reserve
TOTAL
15,000,044 2/
5,183;378
$
32,891,482
13,869,140
1,105,904
25,000
5,183,378
$
20,183,422
Median rate
1.810%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.780%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-cover Ratio
=
27,708,104 / 15,000,044
=
1.85
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $937,198,000
http://www.publicdebt.treas.gov
PO-879
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
December 18, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
28-Day Bill
December 20, 2001
January 17, 2002
912795JC6
Term:
Issue Date:
Maturity Date:
CUSIP Number:
1.700%
High Rate:
Investment Rate 1/:
Price:
1.723%
99.868
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 90.31%. 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
$
30,095,000
24,736
$
11,975,540
24,736
o
o
30,119,736
12,000,276
1,129,513
1,129,513
31,249,249
$
13,129,789
Median rate
1.680%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.600%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-cover Ratio
=
30,119,736 / 12,000,276
=
2.51
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
PO-880
DEI' A
I{
T :'\ lEN T
TREASURY
..........
0 F
TilE
T REA S lJ R Y
NEWS
.......
~~
OfFICE OF PUBLIC AfFAIRS .1508 PENNSYLVANJA AVENUE, N.W .• WASHINGTON. D.C .• 20220.(202) 622·2"0
For Immediate Release
December 19, 2001
Contact: Bill Luecht, CDFI Fund
(202) 622-8401
Betsy Holahan, Treasury
(202) 622-1997
TREASURY DEPARTMENT ANNOUNCES $15 BILLION
TO HELP NATION'S LOW-INCOME COMMUNITIES
New Markets Tax Credit Program Officially Opens
Washington, DC - The U.S. Department of the Treasury announced today the official
opening of the $15 billion New Markets Tax Credit (NMTC) Program. The NMTC Program is
an important new community and economic development tool that will stimulate the economy of
low-income communities by providing capital or loans to businesses that operate in these
communities.
The NMTC permits individual and corporate taxpayers to receive a credit against Federal
income taxes for making qualified equity investments in investment vehicles known as
Community Development Entities, or CDEs. The credit provided to the investor totals 39
percent of the cost of the investment and is claimed over a seven-year credit allowance period.
Substantially all of the investment must in tum be used by the CDE in support of business
activities in the low-income communities.
"Many see the New Markets Tax Credit as being the single-most powerful tool to come
along in the community and economic development field in a long time," said Tony T. Brown,
Director of Treasury's Community Development Financial Institutions (CDFI) Fund that
administers the NMTC Program. Similar to the Low-Income Tax Credit's affect on affordable
housing development, the NMTC Program will revolutionize the field of community and
economic development. Brown continued, "We believe that this program will attract billions of
private sector capital into areas of our country where disinvestments and disenchantment with
the economy have too long been the norm. The New Markets Tax Credit Program offers us a
tremendous chance to focus needed resources on these communities."
The CDFI Fund issued guidance on the CDE certification process and a request for CDE
applications that will be published in Part VI ofthe Federal Register on Thursday, December 20,
2001. In addition, the IRS will issue regulations on the tax aspects ofthe program. Guidance on
the tax credit allocation process and a request for applications for tax credit allocation will be .
published in the Federal Register in early 2002.
PO-88l
_
For more information please visit the CDFI Fund's web site at: 'vvww.cdfiflmd.gov .
For press releases. speeches. public schedules and official biographies, call our 24-hour fax line at (202) 622·2040
·u.s. Government Printing Office:
1998 - 619-559
HIGHLIGHTS OF TREASURY OFFERING TO THE PUBLIC OF
2-YEAR NOTES TO BE ISSUED DECEMBER 31, 2001
December 19, 2001
Offering Amount
PuJ;:>lic Offering
...............................
$23,000 million
$23,000 million
Description of Offering:
Term and type of security . . . . . . . . . . . . . . . . . . . . .
Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Auction date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dat.ed date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity date
..............................
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2-year notes
X-2003
912827 7H 9
December 27, 2001
December 31, 2001
December 31, 2001
December 31, 2003
Determined based on the highest
accepted competitive bid
yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
Interest payment dates . . . . . . . . . . . . . . . . . . . . . . . . June 30 and December 31
Minimum bid amount and multiples .............. $1,000
Accrued interest payable by investor .......... None
Premium or discount . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
STRIPS Information:
Minimum amount required ....................... $1,000
Corpus CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . 912820 GS 0
Due date(s) and CUSIP number(s)
for additional TINT(s) ...................... December 31, 2003 - - 912833 YM 6
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.
Competi~ive 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.
Max~mum Recognized Bid at a Single yield ........... 35% of public offering
Maximum Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% of public offering
Receipt of Tenders:
Noncompetitive tenders:
Prior to 12:00 noon eastern standard time on auction day.
Competitive tenders:
Prior to 1:00 p.m. eastern standard time on auction day.
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date,
or payment of full par amount with tender.
TreasuryDirect customers can use the Pay
Direct feature which authorizes a charge to their account of record at their
financial institution on issue date.
-
DEPARTMEl\T
OF
THE
TREASURY
NEWS
OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVE)';UE, N.W .• WASHINGTON, D.C.. 20220. (202) 622-2960
EMBARGOED UNTIL 2:30 P.M.
December 20, 2001
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK, 13-WEEK, AND 26-WEEK BILLS
The Treasury will auction three series of Treasury bills totaling $39,000
million to refund an estimated $45,124 million of publicly held Treasury bills
maturing December 27, 2001, and to pay down approximately $6,124 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 $11,693 million of the Treasury bills maturing
on December 27, 2001, in the System Open Market Account (SOMA).
This amount may be
refunded at the highest discount rate of accepted competitive tenders in these
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 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.
Note that for the 4-week bill auction the noncompetitive closing time will be
11:00 a.m. and the competitive closing time will be 11:30 a.m. eastern standard time.
The noncompetitive and competitive closing times for the 13-week and 26-week bill
auctions will be the normal 12:00 noon and 1:00 p.m. eastern standard time,
respecti vely .
TreasuryDirect customers have requested that we reinvest their maturing holdings
of approximately $992 million into the 13-week bill and $617 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-884
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 DECEMBER 27, 2001
December 20, 2001
Offering Amount .... .
Public Offering .... .
NLP Exclusion Amount
$10,000 million
$10,000 million
$ 9,700 million
$14,000 million
$14,000 million
$ 4,200 mlilion
$15,000 million
$15,000 million
None
Descrlption 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 JD 4
December 26, 2001
December 27, 2001
January 24, 2002
July 26, 2001
$38,069 million
$1,000
91-day bill
912795 JM 4
December 26, 2001
December 27, 2001
March 28, 2002
September 27, 2001
$16,514 million
$1,000
182-day bill
912795 KA 8
December 26, 2001
December 27, 2001
June 27, 2002
December 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 wlth 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 (NLP) 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.
35% of public offering
!aximum Recognized Bid at a Single Rate
35% of public offering
~ximum Award . . . . . . . . . . . . . . . . . . . . . . . . ..
!eceipt of Tenders:
4-week bill:
Noncompetitive tenders ..... Prior to 11:00 a.m. eastern standard time on auction day
Competitive tenders ........ Prior to 11: 30 a.m. eastern standard time on auction day
13-week and 26-week bills:
Noncompetitive tenders
. Prior to 12:00 noon eastern standard time on auction day
Competitive tenders . . . . . . . Prior to 1:00 p.m. eastern standard time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full par amount
with tender.
TreasuryDirect customers can use the Pay Direct feature which authorizes a charge to their account of
record at their financia~ institution on issue date.
o
E P ,\ R T :\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622.2960
FOR IMMEDIATE RELEASE
December 20,2001
Contact: Tasia Scolinos
(202) 622-2960
TREASURY SECRETARY PAUL O'NEILL
REMARKS ON NEW TERRORIST FINANCING DESIGNATIONS
Today, we are blocking the assets of a terrorist organization, UTN, and three of its
directors, because they finance terrorism. But they don't threaten freedom with only their
money. UTN and its directors provided more than money to al Qaida, they provided knowledge
of nuclear, chemical and biological weapons.
UTN's founder was the former chief designer and director of an atomic reactor in
Pakistan. He was joined in UTN by a number of other prominent Pakistani scientists, retired
military officers, and industrialists. On a number of occasions, UTN delegations traveled to
Afghanistan, where UTN directors met with Usama bin Laden and al-Qaida leaders and
discussed nuclear, chemical, and biological weapons. Even after September 11 t\ UTN
representatives sought to provide bin Laden and Taliban with still more devastating weapons of
mass destruction.
By blocking their assets today, we aren't just freezing the money in their bank accounts.
More importantly than what we catch in their accounts, we disrupt the pipelines they use to move
money and to communicate. For example, last month, we blocked the assets of the Holy Land
Foundation, because they raise money for the Hamas terrorist organization. Holy Land raised
$13 million in the United States last year.
We also closed down the U.S. and overseas operations of a major financial network - alBarakaat, from which al Qaida terrorists profited. We estimate that $25 million was skimmed
from the Barakaat network of companies each year, and re-directed toward terrorist operations.
We are putting the world on alert that these terrorists must not have access to finances
anywhere. And allies around the world are eagerly joining our effort.
PO-88S
--!"'jwess
releases, speeches, public schedules and official biographies, call our 24.nour fax line at (202) 622-2040
·u.s. Government PrintIng OffIce:
1998· 619-559
For example, Canada has blocked the assets of all terrorists listed by the U.S. and UN,
and has led G-20 efforts to adopt an action plan to combat terrorist financing. The United Arab
Emirates took coordinated action with U.S. against AI-Barakaat, raiding offices in the UAE and
blocking their assets.
Day by day and week by week we are building a wall between global terrorists and the
world financial system they rely on. This is a long fight. We will work with our allies
everywhere, keeping after this effort until there is no place on earth where terrorists can hide
their money.
D EPA R T l\1 E N T
0 F
THE
T REA SUR Y
NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960
For Immediate Release
December 20, 2001
Contact: Tasia Scolinos
(202) 622 -2960
Terrorist Financing Fact Sheet
"Our attack on terrorist finances is progressing.
The assets of more than
150 known terrorists, their organizations, and their bankers have been
frozen by the united States.
142 countries have issued blocking orders of
their own."
President George W. Bush
December 20, 2001
Today's Action
President Bush today announced the blocking of assets of Umma Tameer-e-Nau
(UTN), a non-governmental organization founded by Pakistani nuclear scientists
that has provided information to Usama bin Laden and the Taliban about chemical,
biological, and nuclear weapons.
Today's designation also blocks the assets of
three key directors of UTN: Bashir-ud-Din Mahmood, founder of UTN and formerly
the director for nuclear power at the Pakistani Atomic Energy Commission (PAEC);
Abdul Majeed, a former high- ranking official at the PAEC and an expert in
nuclear fuels; and S.M. Tufail, an industrialist.
President Bush also announced the blocking of assets of Lashkar-e-Tayyiba
(LET), a Kashmiri terrorist organization that has conducted a number of
operations against Indian troops and civilian targets in Kashmir since 1993.
Today's action is taken under the authority of Executive Order 13224,
signed by the President on September 23, which authorizes aggressive actions
against the bankers of international terrorism.
With today's action, the U.S. has now designated 158 individuals and
organizations pursuant to Executive Order 13224.
Umma Tameer-E-Nau (UTN)
UTN was founded by Pakistani nuclear scientists with close ties to Usama
bin Laden and the Taliban.
The leader of UTN, Bashir-ud-Din Mahmood, founded UTN after leaving the
He
previously served as the director of Pakistan's Khushab Atomic Reactor and was
involved in the early days of Pakistan's uranium enrichment program. The
Khushab atomic plant now produces enough plutonium for as many as two nuclear
PAEC, where he most recently served as Director for Nuclear Power.
-
PO-886
_ Forj1ress releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
(I
·US. Govemment P"ntlng Off,ce· 1998· 619·559
bombs a year.
For his work at Khuschab, Mahmood received one of the highest
civilian awards in Pakistan.
Mahmood left the PAEC after criticizing the Government of Pakistan's
movement towards signing the comprehensive test ban treaty.
He has also
advocated equipping other Islamic nations with enriched uranium and
weapons-grade plutonium.
UTN has been linked to WAFA Humanitarian Organization and Al Rashid Trust,
two other non-governmental organizations with ties to al-Qaeda that were
designated on September 23, 2001 as supporters of terrorism under Executive
Order 13224.
UTN Has Advised The Taliban, Usama bin Laden, And Al-Qaeda About The Development
Of Weapons Of Mass Destruction
During repeated UTN visits to Afghanistan, UTN directors and members have
met with Usama bin Laden, al-Qaeda leaders, and Mullah Omar, the leader of the
Taliban, and discussed the development of chemical, biological, and nuclear
weapons.
During 2001, Mahmood met with Mullah Omar and with Usama bin Laden.
During a follow-up meeting, an associate of Usama bin Laden indicated he had
nuclear material and wanted to know how to use it to make a weapon.
Mahmood
provided information about the infrastructure needed for a nuclear weapons
program and the effects of nuclear weapons.
In November 2001, the Taliban left Kabul and the workers at UTN's Kabul
offices fled the area with them.
Searches of UTN locations in Kabul have
yielded documents setting out a plan to kidnap a u.S. attache and outlining
basic nuclear physics related to nuclear weapons.
Lashkar-E-Tayyiba (LET)
Lashkar-e-Tayyiba (LET) is the armed wing of the Pakistan-based religious
organization, Markaz-ud-Dawa-wal-Irshad (MDI) , a Sunni anti-US missionary
organization formed in 1989.
LET is one of the three largest and best-trained
groups fighting in Kashmir against India, and is not connected to a political
party.
LET's leader is MDI chief, Professor Hafiz Mohammed Saeed.
LET has conducted a number of operations against Indian troops and
civilian targets in Kashmir since 1993.
LET is suspected of eight separate
attacks in August that killed nearly 100, mostly Hindu Indians.
LET militants
are suspected of kidnapping six persons in Akhala, India, in November 2000 and
killing five of them.
LET has several hundred members in Azad Kashmir, Pakistan, and in India's
southern Kashmir and Doda regions.
In their operations, LET uses assault
rifles, light and heavy machineguns, mortars, explosives, and rocket propelled
grenades.
LET is based in Muridke (near Lahore) and Muzaffarabad.
LET trains its
militants in mobile training camps across Pakistan-administered Kashmir and
Afghanistan.
LET collects donations from the Pakistani community in the Persian Gulf
and United Kingdom, Islamic NGOs, and Pakistani and Kashmiri businessmen. The
amount of LT funding is unknown. LET maintains ties to religious/military
groups around the world, ranging from the Philippines to the Middle East and
Chechnya through the MDI fraternal network.
D EPA R T 1\1 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
December 20, 2001
CONTACT: BETSY HOLAHAN
(202)622-2960
Treasury Department Issues Regulations
on Compliance with USA PATRIOT Act
WASHINGTON, DC - The Treasury Department today issued and sent to the Federal
Register for publication three proposed rules, one interim rule and one final rule for financial
institutions and businesses regarding compliance with anti-money laundering provisions of the
USA PATRIOT Act.
The Treasury Department issued an interim rule and a companion notice of proposed
rulemaking to add a new provision to its regulations under the Bank Secrecy Act. The new
regulations implement the provision in the USA PATRIOT Act that requires trades and
businesses to report cash transactions of more than $10,000 (or two or more related transactions
involving more than $10,000) and certain transactions involving monetary instruments to
Treasury's Financial Crimes Enforcement Network (FinCEN). Similar reports are currently
required to be made to the Internal Revenue Service (IRS), and the IRS issued a final rule
amending its regulations to reference the requirement that the information is also required to be
reported to FinCEN. Trades and businesses required to report this information will do so using
one form jointly prescribed by FinCEN and the IRS. There are no new reporting or
recordkeeping requirements.
The Treasury Department issued a proposed rule that codifies interim guidance issued on
November 20, with some modifications. The guidance was issued to assist banking institutions
on compliance with two anti-money laundering provisions of the PATRIOT Act that become
effective Dec. 26, 2001. The first provision prohibits certain U.S. financial institutions from
providing correspondent accounts to foreign shell banks, and requires that such institutions take
reasonable steps to ensure that foreign banks not use correspondent accounts to indirectly
provide banking services to foreign shell banks. The second provision requires certain U.S.
financial institutions to keep records of the owners of foreign banks with correspondent accounts
and their U.S. process agents. The proposed rule codifies the interim guidance with some
modifications and proposes to apply the same requirements to securities brokers and dealers.
PO-887
-
_For frress releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
•
·u.s
Government Printing Office 1998 - 619-559
The Treasury Department issued a proposed rule to require securities brokers and dealers
to file suspicious activity reports in connection with customer activity that indicates possible
violations of law or regulation, including violations of the Bank Secrecy Act. Application of this
requirement to brokers and dealers closely mirrors the reporting regime currently in place for
banks.
FinCEN issued a notice to money transmitters and issuers, sellers and redeemers of
money orders and checks to remind them of the January 1,2002 effective date for the
requirement to report suspicious transactions. In addition, the notice explains which form these
businesses must use to report suspicious transactions.
-30-
DEI' A
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T :'\ lEN T
TREASURY
0 F
TilE
T REA S lJ R Y
NEWS
OfFICE OF PUBLIC AffAIRS .1508 PENNSYLVANJA AVENUE, N.W .• WASHINGTON. D.C .• 20220.(202) 622·2"0
FOR IMJ'vIEDIATE RELEASE
December 21,2001
CONTACT: BETSY HOLAHAN
202-622-2960
Air Transportation Stabilization Board
Names Joseph P. Adams, Jr. as Executive Director
WASHINGTON, DC - The Air Transportation Stabilization Board (ATSB), created by
Congress to issue federal loan guarantees to air carriers that suffered losses due to terrorist
attacks on September 11, 2001, today named an experienced investment and merchant banking
specialist, Joseph P. Adams, Jr., as its Executive Director.
As Executive Director, Mr. Adams will oversee the operations of the ATSB as it reviews
air carrier applications for loan guarantees under a $10 billion program authorized by Congress
in September. He will begin work on January 7,2002 at the Board's office in Washington, DC.
Mr. Adams has a long and distinguished career in investment and merchant banking, with
wide experience in the financial issues facing the airline and other transportation-related
industries. Since April 2001, he has been a partner with New York City-based Brera Capital
Partners, which manages a $680 million private equity investment fund.
Prior to joining Brera, Mr. Adams was a Managing Director ofInvestment Banking at
Credit Suisse First Boston, formerly Donaldson, Lufkin & Jenrette, where he focused on
leveraged finance, M&A and restructurings and also served as Head of the Transportation
Group. Earlier, he headed North American Investment Banking at NatWest Markets and was a
Managing Director and Head of the Transportation Group at Drexel Burnham Lambert. In his
20-year career, Mr. Adams has directed over 100 projects covering a wide range of corporate
finance transactions including mergers, acquisitions, corporate restructurings, spin-offs,
leveraged buyouts, and offerings of equity, convertibles and debt.
Mr. Adams earned an M.B.A. from Harvard Business School in 1981 and graduated from
the University of Cincinnati with a degree in engineering in 1979.
PO-888
--~--------------~~~-----------------------------------------_Frwpress releases. speeches. Public_schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s. Government Printing Office:
1998 - 619-559
OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622·2960
CONTACT:
gMBARGOED UNTIL 2:30 P.M.
December 27, 2001
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 $28,000
million to refund an estimated $24,732 million of publicly held 13-week and 26-week
Treasury bills maturing January 3, 2002, and to raise new cash of approximately $3,268
million.
Also maturing is an estimated $19,000 million of publicly held 4-week
Treasury bills, the disposition of which will be announced December 31, 2001.
The Federal Reserve System holds $10,444 million of the Treasury bills maturing
on January 3, 2002, 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 January 2, 2002. 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
These
York will be included within the offering amount of each auction.
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.
Note:
The closing times for receipt of noncompetitive and competitive tenders
will be at 11:00 a.m. and 11:30 a.m. eastern standard time, respectively.
TreasuryDirect customers have requested that we reinvest their maturing holdings
of approximately $1,055 million into the 13-week bill and $891 million into the 26week 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
highligh ts .
000
Attachment
PO-889
-.!or press releases, speeches, public schedules alld official biographies, call our 24-llOur fax lille at (202) 622-2040
TO BE ISSUED JANUARY 3, 2002
December 27, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,000 million
Public Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,000 million
NLP Exclusion Amount . . . . . . . . . . . . . . . . . . . . . . . . $ 3,800 million
Description of Offering:
Term and type of security . . . . . . . . . . . . . . . . . . .
CLSIP number..........
. .................
Auction date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , ...
Maturi ty date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Original issue date . . . . . . . . . . . . . . . . . . . . . . . . .
Currently outstanding . . . . . . . . . . . . . . . . . . . . . . .
Minimum bid amount and multiples ............
91-day bill
912795 IN 2
December 31, 2001
January 3, 2002
April 4, 2002
October 4, 2001
$15,170 million
$1,000
$15,000 million
$15,000 million
None
183-day bill
912795 KQ 3
December 31, 2001
January 3, 2002
July 5, 2002
January 3, 2002
$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 (NLP) 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
~ximum Award..............
......
. ...... 35% of public offering
R~ceipt of Tenders:
Noncompetitive tenders.
Prior to 11:00 a.m. eastern standard time on auction day
Competitive tenders....
Prior to 11:30 a.m. eastern standard time on auction day
P!yment Terms: By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full par amount
w~th tender.
TreasuryDirect customers can use the Pay Direct feature which authorizes a charge to their account of
r.cord at their financial institution on issue date.
10:
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n
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Page Z of 5
T It E A S lJ R Y
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.w. • WASHINGTON, D.C •• 20220. (202) 622.2960
EMBARGOED UNTIL 10;00 AM EDT
Text as Prepared for Delivery
September 20, 2000
TREASURY SECRETARY LAWRENCE H. SUMMERS REMARKS ON THE
IMPORTANCE OF PASSJNG SCHOOL CONSTRUCTION CREDITS
First of aU let me thank Representative Rangel and Representative Johnson for sponsoring this
critical measure to improve the condition of America's schools. I would also like to thank the
nearly 230 Congressional co-sponsors who have treated this important legislation in the
bipartisan spirit that it deserves. Last week, the President called on Congress to fully enact his
education budget proposals. This measure is an important part of those proposals. By investing
more in our schools, we can help ensure that our children receive the high quality education that
they deserve.
As Chairman Greenspan has so often emphasized, in the new knowledge-based economy,
success depends on how much you know, not on how much you can lift. The most critical
investment we can make in the future of our economy is therefore to ensure that all our children
receive a decent education. And that, first and foremost, means investing in our schools.
There is a lot that is very hard about education policy. There are questions of figuring out what
types of courses and what types of insrruction are most effective in helping children to learn.
Equally, there are very important questions of standards and accountability and how teachers can
best be motivated and compensated. These are profound issues that we must all confront so that
we can maximize the quality of our educational system. While none of us can know all the
answers, it is important that we work together to reach agreement.
But there are some questions where there should be no doubt whatsoever about the answer. And
this legiSlation is an important step forward in providing the right response. If our children are
our most important resource and schools are the most important program affecting our children,
then 11 million American children should not be attending schools that lack proper ventilation
and environmental controls.
The richest, most powerful, country in the world can afford to keep all its schools in a reasonable
condition for its children. Yet today, one in three schools are in bad shape while three out of four
require some kind of repair. Research shows what common sense would suggest: when kids are
able to learn in decent facilities that are decently maintained that show respect for what they are
L8-890
_ Frw press releases, speeches, public schedules and official biographies, call OUT 24-hour fax line at (202) 622-2040
·U.S Govarnmcm PrlnllnQ Oll"q
199a. &lSI-559
TO:
2816211611
Fr~:
Department Of Treasury
08/22/02 10:05 AM
Page 3 of 5
doing, they learn much more and they learn better than children who are deprived of such basic
facilities.
At a moment when America'g economy is stronger than it has ever been, American children
should not be learning their lessons in classrooms that were once closets. Nor should there be
any school in America where lunch starts at 9.45am because oflack of capacity. Schools should
not be like factories operating on multiple shifts with some kids starting their school day at 4pm.
America is better than this. We can afford to do better. We know how to fix windows in schools.
We know how to make sure that every school has the kind of facilities that are available at the
schools to which many of us here are lucky enough to send our children.
My children are fortunate in attending an excellent public school with beautiful facilities. That is
an option that should be there for every American child. And that is something we as a country
can provide for every American child if we have the will. It is also something we can surely
afford as a nation.
This legislation will provide the resources that wiII enable state and local aurhorities to improve
our education facilities by providing $24.8 billion in tax credit bonds to modernize and construct
6,000 schools across America. The President believes it is of critical importance that Congress
passes the bill. It is clear for the support of this measure that a majority of Representatives share
this sentiment. Let me finally reiterate my thanks to those of you who have provided your
support to this important legislation. I look forward to continuing to work roward passage of this
measure. Thank you.
-30-
2
TOTRL P.02
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
December 31, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
183-Day Bill
January 03, 2002
July OS, 2002
912795KQ3
Term:
Issue Date:
Maturity Date:
CUSIP Number:
1.800%
High Rate:
Investment Rate 1/:
Price:
1.842%
99.085
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 15.10%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Compet it i ve
Noncompetitive
FIMA (noncompetitive)
$
26,536,950
1,095,150
75,000
$
5,083,611
5,083,611
Federal Reserve
$
32,790,711
13,830,050
1,095,150
75,000
15,000,200 2/
27,707,100
SUBTOTAL
TOTAL
Accepted
Tendered
Tender Type
$
20,083,811
Median rate
1.780%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.740%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-cover Ratio = 27,707,100 / 15,000,200 = 1.85
1/ Equivalent coupon-issue yield.
= $926,431,000
2/ Awards to TREASURY DIRECT
http://www.publicdebt.treas.gov
PO-892
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
December 31, 2001
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
January 03, 2002
April 04, 2002
912795JN2
Term:
Issue Date:
Maturity Date:
CUSIP Number:
1.710%
High Rate:
Investment Rate 1/:
1.740%
Price:
99.568
All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 16.66%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
29,508,928
1,337,239
350,000
$
13,000,192 2/
31,196,167
SUBTOTAL
TOTAL
3,786,543
3,786,543
Federal Reserve
$
34,982,710
11,312,953
1,337,239
350,000
$
16,786,735
Median rate
1.690%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
1.650%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio
=
31,196,167 / 13,000,192
=
2.40
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,117,439,000
http://www.publicdebt.treas.gov
PO-893
DEI' A
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T REA S lJ R Y
NEWS
TREASURY
OfFICE OF PUBLIC AffAIRS .1508 PENNSYLVANJA AVENUE, N.W.• WASHINGTON. D.C .• 20220.(202) 622·2"0
FOR IMMEDIATE RELEASE
December 31, 2001
Contact:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction 4-week Treasury bills totaling $7,000 million
to refund an estimated $19,000 million of publicly held 4-week Treasury bills
maturing January 3, 2002, and to pay down approximately $12,000 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 $10,444 million of the Treasury bills
maturing on January 3, 2002, 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. Beginning with this auction, the limit per account has been
reduced from $200 million to $100 million in accordance with the Treasury's
announcement of November 14, 2000. These noncompetitive bids 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%.
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-894
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 JANUARY 3, 2002
December 31, 2001
Offering Amount . . . • . . . . . . . . . . . . . . . . $7,000 million
Public Offering . . . . . . . . . . . . . . . . . . . . $7,000 million
NLP Exclusion Amount . . . . . . . . . . . . . . . $10,100 million
Description of Offering:
Term and type of security .......... 28-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . 912795 JE 2
Auction date • . . . . . . . . . . . . . . . . . . . . . . January 2, 2002
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . January 3, 2002
Maturity date . . . . . . . . . . . . . . . . . . . . . . January 31, 2002
Original issue date •..•.•.......... August 2, 2001
Currently outstanding .......•....•. $39,080 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 $100 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 (NLP) 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.
DEPARTMENT
OF
THE
TREASURY
1789
OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASIHNGTON, D.C.• 20220. (202) 622-2960
U.s. International Reserve Position 12/14/01
The Treasury Deparunent today released u.s. reserve assets data for the week ending December 14, 2001. As indicated in
this table, u.s. reserve assets totaled $69,711 million as of December 14, 2001, up from S69,646 million as of December 7,
2001.
(in US millions)
I. Official U.S. Reserve Assets
December 712001
69,646
TOTAL
1. Foreign Currency Reserves
I
1
a. Securities
Of which, issuer headquartered in the U. S.
Euro
Yen
December 141 2001
69,771
TOTAL
Euro
Yen
TOTAL
5,471
11,085
16,555
0
5,565
10,947
16.512
0
9,211
3.945
13.156
0
0
9.361
3.896
13.257
0
0
b. Total deposits with:
b.i. Other central banks and SIS
b.ii. Banks headquartered in the U.S.
b.iL Of which, banks located abroad
b.iii. Banks headquartered outside the U.S.
b.iiL Of which, banks located in the U.S.
2. IMF Reserve Position
2
J. Special Drawing Rights (SDRs)
4. Gold Stock
3
5. Other Reserve Assets
2
0
0
0
0
18,025
18,067
10.865
10.891
11,045
11.045
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.
2/ The items. "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRfdollar exchange rate for the reporting date. The entries in the table above for latest week (shown in italics)
reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data. The IMF data for the prior week
are final.
31 Gold stock is valued monthly at S42.2222 per fine troy ounce. Values shown are as of October 31,2001. The September 30, 2001 value
was $11,045 million.
PO-897
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
December 14. 2001
December 7.2001
1. Foreign currency loans and securities
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.a. Short positions
2.b. Long positions
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
December 14. 2001
December 7.2001
1. Contingent liabilities in foreign currency
ta. 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
o
o
o
o
o
o
o
o
D EPA R T 1\1 E N T
0 F
THE
'IREASURY ( .
T REA SUR Y
NEW S
1789
omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960
u.s. International Reserve Position
12/21/01
The Treasury Department today released U.S. reserve assets data for the week ending December 21,2001. As
indicated in this table, U.S. reserve assets totaled $69,054 million as of December 21,2001, compared to 569,724
million as of December 14,2001.
(in US millions)
December 1412001
69,724
I. Official U.S. Reserve Assets
TOTAL
1. Foreign Currency Reserves
a. Securities
I
1
Euro
5,565
Yen
10,947
Of which, issuer headquartered in the U.S.
December 211 2001
69,054
TOTAL
Euro
16,512
5,453
Yen
TOTAL
10,758
0
16,211
0
b. Total deposits with:
9,361
b.l. Other central banks and SIS
b.ii. Banks headquartered in the U.S.
3,896
13,257
9,181
3,828
0
13,009
0
b.ii. Of which, banks located abroad
0
0
b.iii. Banks headquartered outside the U.S.
0
0
0
0
18,034
17,958
10,877
10,832
11,045
11,045
0
0
b.iii. Of which, banks located in the U.S.
2.IMF Reserve Position
2
3. Special Drawing Rights (SDRs)
~, 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.
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 SDRldoliar exchange rate for the reporting date. The entries in the table above for latest week (shown in italics)
reflect.any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data. The IMF data for the prior week
are final.
31 Gold stock is valued monthly at $42.2222 per fine troy ounce. Values shown are as of November 30,2001. The October 31,2001 value
was $11,045 million.
PO-898
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
December 14.2001
1. Foreign currency loans and securities
December 21. 2001
o
o
o
o
o
o
o
o
12. 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
. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
December 21. 2001
December 14. 2001
1. Contingent liabilities in foreign currency
o
o
o
o
o
o
o
o
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
~. 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
DEI' A
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TREASUR_Y~....
N_E
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OfFICE OF PUBLIC AffAIRS .1508 PENNSYLVANJA AVENUE, N.W.• WASHINGTON. D.C .• 20220.(202) 622-:"0
u.s. International Reserve Position
12/28/01
The Treasury Department today released U.S. reserve assets data for the week ending December .2S . .2CJ 1. As
indicated in this t.1ble, U.S. reserve assets totaled 568,635 million as of December 28,2001, compared to 569.175
million as of December 21, 200 1.
(in US millions)
I. Official U.S. Reserve Assets
December 21, 2001
69,175
TOTAL
1. Foreign Currency Reserves
I
1
a. Securities
Euro
5,453
Yen
10,758
Of which, issuer headquartered in the U.S.
December 28, 2001
68,635
TOTAL
Euro
16,211
5,426
Yen
TOTAL
10.609
16,035
0
0
b. Total deposits with:
b.i. Other central banks and BIS
9,181
3,828
13,009
9,143
3.775
12,919
0
0
b.ii. Of which, banks located abroad
0
0
b.iii. Banks headquartered outside the U.S.
0
0
0
0
18,034
17.862
10,877
10.774
11,045
11,045
0
0
b.ii. Banks headquartered in the U.S.
b.iii. Of which, banks located in the US
2.IMF Reserve Position
2
3. Special Drawing Rights (SDRs)
4. Gold Stock
2
3
5. Other Reserve Assets
11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account (SOMA),
valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and depOSits reflect
carrying values.
21 The items. "2. IMF Reserve POSition' and "3. SpeCial DraWing Rights (SDRs)," are based on data proVided by the IMF and are valued In
dollar terms at the offiCial SDRJdollar exchange rate for the reporting date. The entries In the table above for latest week (shown In italics)
refiect any necessary adjustments. Including revaluation, by the US Treasury to the prior week's IMF data. The IMF data for the prior week
are final.
31 Gold stock IS valued monthly at 542.2222 per rlne troy ounce
was $11.045 million
Values snown are as of November 30. 2001
The October 31,2001 value
u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
December 21. 2001
1. Foreign currency loans and securities
December 28. 2001
o
o
o
o
o
o
o
o
2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.B. Short positions
2.b. Long positions
3. Other
III. Contingent Short-Term Net Drains on Foreign Currency Assets
December 21.2001
1. Contingent liabilities in foreign currency
December 28. 2001
o
o
o
o
o
o
o
o
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
· Foreign currency securities with embedded options
· Undrawn, unconditional credit lines
3.B. 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.B. 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
@FedFRASER