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Contents
SPRING ISSUE, JUNE
1991
TREASURY ISSUES
Page
TAX POLICY
Report on Tax Issues Relating to the 1988/89 Federal Savings and Loan Insurance Corporation Assisted Transactions
3
Abstracts of Recent Taxation Studies
11
TREASURY ISSUES INDEX
13
FINANCIAL OPERATIONS
PROFILE OF THE
Growth
of real
Federal
deficit
ECONOMY
19
gross national product
19
Federal outlays and receipts as a share of gross national product
20
FEDERAL FISCAL OPERATIONS
Analysis. -Budget results for the
FFO-1 .-Summary
second
quarter, fiscal 1991
of fiscal operations
23
25
Chart-Monthly receipts and outlays
26
FFO-2.-On-budget and off-budget receipts by source
27
Chart-Budget receipts by source
FFO-3.-On-budget and off-budget outlays by agency
30
29
FEDERAL OBLIGATIONS
FO-1 .-Gross obligations incurred within and outside the Federal Government by object class
32
FO-2— Gross obligations
33
Chart.-Gross Federal obligations;
ACCOUNT OF THE
U.S.
UST-1 .-Elements
changes
of
Government by department or agency
gross Federal obligations incurred outside the Federal Government
incurred outside the Federal
35
TREASURY
in
Federal Reserve and tax and loan note account balances
36
FEDERAL DEBT
FD-1 .-Summary of Federal debt
39
FD-2.-lnterest-bearing public debt
39
FD-3.-Govemment account
40
series
FD-4. -Interest-bearing securities issued by Government agencies
41
FD-5. -Maturity distribution and average length of marketable interest-bearing public debt held by private investors
42
FD-6— Debt subject to
42
statutory limitation
Chart.-Average length of the marketable debt
43
Chart-Private holdings
44
of
Treasury marketable debt by maturity
FD-7.-Treasury holdings of securities issued by Government corporations and other agencies
45
TREASURY FINANCING OPERATIONS
46
III
IV
Contents
Page
PUBLIC DEBT OPERATIONS
PDO-1 -Maturity schedule
Treasury
PDO-2 -Offerings
bills
marketable public debt securities other than regular weekly and 52-week
50
56
of bills
PDO-3. -Public offerings
PDO-4— Allotments
U.S.
of interest-bearing
outstanding
of
marketable securities other than regular weekly Treasury
by investor classes
for public
58
bills
61
marketable securities
SAVINGS BONDS AND NOTES
SBN-1 .-Sales and redemptions by
SBN-2— Sales and redemptions by
SBN-3.-Sales and redemptions by
63
series, cumulative
period,
all
series of savings
period, series E, EE, H,
63
bonds and notes combined
and HH
64
OWNERSHIP OF FEDERAL SECURITIES
OFS-1— Distribution
of Federal securities by class of investors
OFS-2. -Estimated ownership
of public
and type
66
of issues
67
debt securities by private investors
fUlARKET YIELDS
IVIY-1
.--Treasury market bid yields at constant maturities:
bills,
notes,
69
and bonds
70
Chart— Yields of Treasury securities
I^Y-2. -Average yields of long-term Treasury, corporate, and municipal bonds by period
Chart-Average yields of long-term Treasury, corporate, and municipal bonds
71
73
FEDERAL AGENCIES' FINANCIAL REPORTS
FA-1 -Direct and guaranteed loans
75
Chart—Direct and guaranteed loans
78
INTERNATIONAL STATISTICS
INTERNATIONAL FINANCIAL STATISTICS
81
IFS-1.-U.S. reserve assets
IFS-2.-Selected U.S.
liabilities to
82
foreigners
IFS-3.-Nonmarketable U.S. Treasury bonds and notes issued
I
FS-4— Trade-weighted index
of foreign
to official institutions
currency value of the dollar
and other residents
of foreign countries
82
83
CAPITAL MOVEMENTS
LIABILITIES
TO FOREIGNERS REPORTED BY BANKS
CM-l-1 .-Total
liabilities
IN
THE UNITED STATES
86
by type of holder
87
Chart-Liabilities to foreigners
88
CIVI-l-2. -Total liabilities
by type, payable
CM-l-3. -Total
by country
89
by type and country
90
liabilities
C(\/I-l-4— Total liabilities
in
dollars
CLAIMS ON FOREIGNERS REPORTED BY BANKS
IN
THE UNITED STATES
CM-ll-1. -Total claims by type
91
Chart— Claims on foreigners
92
Contents
Page
93
CM-ll-2.-Total claims by country
CM-ll-3.-Total claims on foreigners by type and country reported by banks
in
94
the United States
SUPPLEMENTARY LIABILITIES AND CLAIMS DATA REPORTED BY BANKS
IN
THE UNITED STATES
95
on nonbank foreigners
CM-lll-1 .-Dollar claims
CM-lll-2. -Dollar liabilities
to,
and
dollar claims on, foreigners in countries
and areas not
96
regularly reported separately
AND CLAIMS ON, FOREIGNERS REPORTED BY NONBANKING BUSINESS ENTERPRISES
THE UNITED STATES
LIABILITIES TO,
IN
CM-IV-1. -Total
liabilities
and claims by type
97
CM-IV-2 -Total
liabilities
by country
98
CM-IV-3.-Total
liabilities
by type and country
99
100
CM-IV-4 -Total claims by country
CM-IV-5.-Total claims by type and country
101
TRANSACTIONS IN LONG-TERM SECURITIES BY FOREIGNERS REPORTED BY BANKS AND BROKERS
THE UNITED STATES
CM-V-1 -Foreign purchases and sales
CM-V-2.-Foreign purchases and sales
CM-V-3.-Net
foreign transactions
Chart.-Net purchases
in
of long-term
CM- V-4. -Foreign purchases and
of long-term
IN
domestic securities by type
of long-term foreign securities
1
103
long-term domestic securities by type and country
104
domestic securities by selected countries
105
and country
by type and country
sales of long-term securities, by type
CM-V-5. -Foreign purchases and sales
of long-term securities,
02
102
by type
106
FOREIGN CURRENCY POSITIONS
SUMMARY POSITIONS
FCP-l-1 -Nonbanking firms' positions
108
FCP-l-2 -Weekly bank positions
108
CANADIAN DOLLAR POSITIONS
FCP-ll-1
-Nonbanking
109
firms' positions
FCP-ll-2.-Weekly bank positions
•
109
;
GERMAN MARK POSITIONS
FCP-lll-1
-Nonbanking
firms' positions
FCP-lll-2.-Weekly bank positions
'
1
10
110
JAPANESE YEN POSITIONS
FCP-IV-1 "Nonbanking
firms' positions
FCP-IV-2.-Weekly bank positions
111
Ill
SWISS FRANC POSITIONS
FCP-V-1 .-Nonbanking
firms' positions
FCP-V-2.- Weekly bank positions
112
112
VI
Contents
Page
STERLING POSITIONS
FCP-VI-1 -Nonbanking
113
firms' positions
113
FCP-VI-2.--Weekly bank positions
U.S.
DOLLAR POSITIONS ABROAD
FCP-VII-1. -Nonbanking firms' foreign subsidiaries' positions
114
FCP-VII-2 -Weekly bank foreign office positions
114
EXCHANGE STABILIZATION FUND
ESF-1. -Balance sheet
117
ESF-2.-lncome and expense
117
SPECIAL REPORTS
U.S.
CURRENCY AND COIN OUTSTANDING AND
IN
CIRCULATION
123
J
Glossary
125
Notes
Details offigures
may not add to
r represents Revised,
totals
p Preliminary,
because of rounding.
n.a.
Not available.
VII
Nonquarterly Tables and Reports
For the convenience of the Treasury
with the issues in which they appear
Bulletin user, nonquarterly tables
and
reports are listed below along
Issues
Winter
Spring
Summer
FaU
Federal Fiscal Operations
FFO-4.-Summary of
Capital
internal
revenue collections by States and other areas
.
.
V
Movements
CM-lll-2.-Dollar
liabilities to, eind dollar
claims on, foreigners
In
countries
and
areas not regularly reported separately
Special Reports
Consolidated Financial Statements of the United States Government
Statement of
Liabilities
and Other
Financial
Commitments
States Government
Trust
of the United
"V
Fund Reports:
Airport
and airway
Asbestos
trust
v
fund
trust
fund
"V
v
Black lung disability trust fund
Civil
service retirement
and
disability
V
fund
Federal disability Insurance trust fund
Federal hospital insurance trust fund
V
V
Federal old-age and survivors insurance trust fund
Federal supplementary medical insurance trust fund
Hartxjr
maintenance
trust
"V
fund
v
Hazardous substance superfund
Highway
trust
"V
fund
v
Inland waterways trust fund
Leaking underground storage tank
National service
life
trust
fund
v
insurance fund
Nuclear waste fund
v
V
Railroad retirement account
Reforestation trust fund
"V
Unemployment trust fund
Investments of specified trust accounts
v
TREASURY ISSUES
Report on Tax Issues Relating to the 1988/89
Federal Savings and Loan Insurance Corporation
Assisted Transactions
On September 18, 1990, the Resolution Trust Corporation (RTC), in accordance with the requirements of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (FIRREA), issued a report to the Congress and the Oversight Board of the RTC on the
1988/89 Federal Savings and Loan Insurance Corporation (FSLIC) transactions.' The RTC report recommended further study of certain tax
issues relating to the 1988/89 FSLIC transactions. The Treasury Department has examined whether legislation or other action is appropriate to
address the tax issues raised by the
RTC
report. This report,
released March
1991, analyzes the tax issues raised
5,
by the
RTC report and
provides the Treasury Department's views on those issues.
I.
Until
INTRODUCTION
was abolished by FIRREA, FSLIC insured the deposits
associations and was responsible for
it
member savings and loan
insolvent member institutions
of
its
1988 and 1989, FSLIC resolved 199 insolvent financial institutions in 96 assisted transactions.
The assistance agreements with respect to the 1988/89 transactions
obligated FSLIC to make ongoing assistance payments to the 91
institutions
FIRREA
were involved
those transactions.
in
abolished FSLIC and established the FSLIC Resolu-
Fund (FRF)
to
assume
all
of the
assets and
assumed by
(other than those expressly
is
liabilities
of
FSLIC
or transferred to RTC).
FRF
administered exclusively by the Federal Deposit Insurance Corpo-
ration
(FDIC)
assumed
(i.e.,
securities,
also permit or require the assisted institution to provide financing to
facilitate
the sale of a covered asset.
agreements provide
covered assets.
for
In
some cases, the assistance
money loans to become
these purchase
remaining after the restructuring of the insolvent financial
institutions that
tion
During
90 days past due), noninvestment
and investments in subsidiaries. Most agreements
usually loans at least
loans
grade
Thus, under FIRREA, the FDIC (through FRF) has
responsibility for FSLIC's obligations
The
total estimated cost to the
Treasury of
the tax benefits attributable to the
1988/89 assisted transactions is $4.2 billion in foregone revenues.
under the 1988/89
assistance agreements.
It is estimated that the cost of assistance with respect to the
1988/89 transactions will exceed $69 billion without considering the
tax
benefits
involved
those transactions.^
in
1988/89 assisted transactions, FSLIC increased
term assistance. As a
result,
structuring
In
its
reliance
the
on long-
only a portion of the total estimated
assistance with respect to these transactions has been paid thus
far
as of January 1, 1991).
The most significant forms of continuing assistance provided in
the 1988/89 transactions are described below.
1. Promissory notes. Promissory notes were provided to offset
negative net worth and generally bear interest at a specified cost of
funds index plus a spread.
2. Capital loss protection. In virtually all of the larger 1988/89
(approximately $14.6
billion
FSLIC agreed to pay acquirers assistance in an
amount equal to the difference between the book value of "covered
assets" and the proceeds received upon disposition of the assets.
transactions,
This type of assistance
designed
is
to
protect the acquirer from
losses incurred with respect to covered assets. The assistance
agreements generally grant FSLIC the right to purchase covered
assets at market or book value In addition, many of the assistance
agreements permit FSLIC to order the assisted institution to write
down the value of covered assets on their books to fair market value
in exchange for a payment in the amount of the write-down. Some
assistance agreements limit the amount of such a write-down to a
percentage of book value or by other factors.
Typically, covered assets are assets that were owned by the
acquired institution and that were classified as nonperforming or
some cases, covwere expected to become troubled
troubled at the time of the assisted transaction.
ered assets include assets that
within a relatively short period of time.
specifically
identify
Some
the covered assets
In
assistance agreements
and others
assets by category. Covered assets usually include
tion of real estate,
loans
in
identify
these
some combina-
various stages of default, delinquent
Guaranteed yield maintenance. FSLIC generally guaranteed
minimum return or yield on the book value of covered
assets. This type of assistance is designed to ensure that the acquirer would earn a minimum return over a base rate on covered
assets. Any reduction in the amount of covered assets, whether by
way of a write-down, purchase by FSLIC (now the FDIC), or other
disposition, reduces the base on which yield maintenance payments
are determined. In general, guaranteed yields exceed the amount of
market yield that the institution could otherwise earn on the assets.
4. Indemnification and reimbursement from losses. The assistance agreements generally obligate FSLIC to reimburse acquiring
institutions for amounts incurred and paid in connection with the
satisfaction, settlement, or compromise of certain claims and for
reasonable costs and expenses related to such claims. These claims
include unreserved claims, challenges to the transaction, and claims
involving unassumed or undisclosed liabilities and nonexistent assets. The agreements also require FSLIC to reimburse acquiring
institutions for reasonable costs and expenses incurred by the insti3.
the acquirer a
tutions in pursuing related claims (e.g., counterclaims)
undertaken
FSLIC approval.
The timing and structure of the 1988/89 assisted transactions
can be attributed to two factors. First, FSLIC did not have the financial resources required to liquidate insolvent institutions even where
liquidation would have minimized the cost of resolving the institutions. Consequently, in order to resolve insolvent institutions, FSLIC
with
resorted to long-term assistance. Second, the special tax benefits
were due to expire on
an increase in the number of
assisted transactions completed in 1988.* The Technical and Miscellaneous Revenue Act of 1988 <TAMFIA) postponed the expiration
of these special tax benefits, but significantly reduced the amount of
provided
to
December
troubled financial institutions
31, 1988. This resulted in
tax benefits available to assisted transactions occurring after 1988.
TAX POLICY
n.
IN
OVERVIEW OF SPECIAL TAX BENEnTS AVAILABLE
CONNECTION WITH THE 1988/89 ASSISTED TRANS-
benefits attributable to the
billion in
ACTIONS
is
$4 2
m. TAX ISSUES RAISED BY RTC REPORT
Prior to their repeal
of
1988/89 assisted transactions
foregone revenues.'
the Internal
by FIRREA, the following three provisions
Revenue Code
benefits available
in
(the
Code) provided the special
The
tax
pnor
the 1988/89 transactions:
to
special tax provisions that applied to assisted transactions
FIRREA
raise
numerous
tax issues
While
many
of these tax
issues are not free from doubt, the resolution of most of them has not
• Under old section
597
of the
payments
Code, qualifying assistance
in an assisted transaction
to a financial institution
January 1, 1989, are excluded from the institution's income,
and the institution is not required to reduce the tax basis of its
property or other tax attributes on account of the receipt of such
assistance. In addition, the general rule disallowing deductions for
expenses and interest relating to tax-exempt Income (section 265)
does not apply to deductions allocable to amounts excluded from
gross income pursuant to old section 597 Generally, in the case of
any assisted transaction after December 31, 1988, and before May
10,1989 (the effective date of the repeal of tax benefits available to
acquired
been controversial The RTC report, however, identifies a select set
depending on how they are resolved, may
materially affect the cost of the 1988/89 transactions, most
of tax-related issues that,
prior to
troubled financial institutions), the assisted institution
reduce
its
net operating losses, built-in losses,
and
deductions by 50 percent of any assistance paid
is
qualify
in
1. The extent to which an assisted institution should be allowed
deduct losses and expenses even though the FDIC compensates
or reimburses the institution for the losses or expenses
to
2. The extent to which the earnings on assets covered by
maintenance guarantees are exempt from tax.
required to
interest
expense
The remainder
an FSLIC-assisted transaction could
as a tax-free transaction without regard to the generally
requirement that the shareholders of an acquired
applicable
corporation have a meaningful ownership interest
in
the acquiring
corporation for the acquisition to qualify for tax-free reorganization
treatment.
Under section
Code, a corporation could
382(I)(5)(F) of the
in a tax-free reorganization
under section 368(a)(3)(D) without triggering the limitations that
acquire a troubled financial institution
would otherwise apply to the net operating losses,
and excess credits of the troubled financial institution
The
RTC report raised the
built-in
losses,
critical issue
of
whether FDIC-assisted institutions may
deduct reimbursed losses and expenses.
DEDUCTIBILITY OF REIMBURSED LOSSES AND EXPENSES
IV.
The critical tax issue raised by the RTC report is the extent to
which financial institutions may deduct losses and expenses even
though they receive assistance payments from the FDIC as
issue,
first this
Prior to the enactment of old section 597 in 1981,^ the lax treatment of a payment from FSLIC to a financial institution was unclear.
The payment could be treated as gross income or as a contnbution
to the capital of the institution. If treated as a contribution to capital,
the payment was not included in gross income, but the institution
was required to reduce the basis of its property by the amount of the
contribution After the enactment of old section 597, however,
financial assistance payments made by FSLIC to certain troubled
financial institutions were not included in the gross income of the
institutions, and the institutions were not required to reduce the tax
basis of property on account of the receipt of those payments.
tax
benefits available
in
represent a significant portion of the
to
the
fisc.
FSLIC estimated
in
1988/89 assisted transactions
total
early
cost of those transactions
1989
that the tax benefits
1988/89 assisted transactions would equal $8.5
billion. After reducing this amount by FSLIC's estimate of the portion
of those tax benefits that will accrue to its benefit under tax sharing
agreements, FSLIC's total estimated cost to the Treasury of the tax
attributable to the
for
those losses or expenses.
In
considering
this
income tax
covered losses and
report provides an overview of the Federal
considerations relating
to
the deductibility of
expenses, describing briefly the types of transactions in which
covered losses and expenses arise Second, the report considers
the incentive effects of the deduction of covered losses and
expenses on assisted institutions Third, the report analyzes the
arguments for and against the deductibility of covered losses and
expenses Finally, the report presents the Treasury Department's
views on the appropriate response
to
this
issue and considers
potential legislative clanfication.
A. Overview of Federal Income
1.
The
analyzes these issues and pro-
vides the Treasury Department's views thereon.'
compensation
•
of this report
yield
to the institution
• Under section 368(a)(3)(D) of the Code, the acquisition of a
troubled financial institution
importantly:
Tax Considerations
Sale or other disposition of covered assets
Generally, a taxpayer incurs a loss for tax purposes on the sale
or other disposition of property to the extent that the taxpayer's
adjusted basis for the property exceeds the amount realized on the
When an
a covered asset, the question
a tax loss to the extent the tax
basis of the covered asset exceeds the proceeds from the sale even
though it receives assistance payments to compensate for that loss.
disposition
'
arises whether
The
it
is
institution sells
entitled to claim
following two types of transactions are at issue:
(i)
Sale
third party,
to third party.
the question
If
is
an institution sells a covered asset to a
whether it may claim a tax loss even
receives tax-free assistance payments from the FDIC to
compensate for that loss and therefore experiences no economic
loss. Assume, for example, that an institution sells a covered asset
with a book value and tax basis of $100 to a third party for $40
Under the 1988/89 assistance agreement, the FDIC pays the
institution $60 in tax-free assistance as compensation for the loss.
The institution might nonetheless claim a $60 loss for tax purposes.
though
it
Although, as this report discusses
in detail,
the issue
is
not free of
TAX POLICY
doubt, the IRS has issued
The
one unpublished
ruling allowing the tax
under the law applicable to the 1988/89 transactions, assistance payments are excluded
from income. The allowance of tax losses in such cases, even
though the institution has experienced no economic loss, produces
unintended and disadvantageous effects, which are described in the
loss.
rationale for allowing the loss
is that,
next section.
(ii) Sale to the FDIC. Because it may be argued that all payments made with respect to covered assets constitute "assistance"
provided under the 1988/89 agreements, institutions may claim that
they are entitled to a tax loss equal to the entire tax basis of the covif they
sell the assets to the FDIC for market value or
book value. Assume, for example, that an institution owns a
covered asset with a fair market value of $90 and a book value and
tax basis of $100, and that the FDIC purchases that asset from the
institution for its $100 book value pursuant to one of the 1988/89
agreements. The institution may argue for a $100 tax loss even
though the institution receives $100 from the FDIC for the asset. The
rationale for this view is that the entire amount paid by the FDIC
should be treated as Federal financial assistance and therefore
ered assets
There is also an argument that expenses incurred but reimbursed by the FDIC should be deductible for tax purposes. Assume, for example, that an institution incurs legal expenses of $100
connection with defending a claim relating to a covered asset and
expenses are reimbursed by the FDIC. The institution has
not, in reality, borne any expense in connection with defending the
claim, but may nevertheless claim a deduction for the legal expense
in
that these
the reimbursement
is ignored for tax purposes.
terms of the potential cost to the Government, the deductibility of losses on the disposition of covered assets is much more
important than the deductibility of reimbursed expenses. The policy
considerations raised by the two issues, however, are quite similar.
if
In
their
disregarded
in
determining
the
tax
institution's
from
loss
the
Proponents of deductibility argue that
disallowing a deduction for covered losses
and expenses is tantamount to taxing the
assistance.
argument prevails, the covered asset would be
treated as having been sold for $0 and the institution would be
transaction.
entitled
to
If
a
this
loss
equal
to
its
entire
tax
basis
the
in
asset.
$10 loss, on the grounds
that
would claim a loss in this amount had
sold the asset to a
third party for its $90 fair market value and received $10 in
assistance payments from the FDIC. In most cases, the FDIC's
Alternatively, the institution might claim a
it
contractual rights to repurchase covered assets are at
value ($90
in
the example), but
in
some cases
the
fair
market
FDIC has a
contractual right to repurchase covered assets at book value.
When
FDIC
is
institution in
ordered to write down a covered asset,
make an assistance payment to the
the amount of the write-down. If the covered asset is a
an
To the extent that tax deductions are allowed for losses on
covered assets that are compensated by FDIC payments, institutions
have a perverse incentive to hold covered assets and to minimize
their
value
when
institution is
generally required to
is whether the institution must take
payment into account in applying its method of
accounting for bad debts. If an institution uses the reserve method of
accounting for bad debts and the assistance payment made on
Indeed, the institution
incentive
to
maximize
its
may be
write-down
entitled to
is
ignored for tax purposes, the
charge the write-down against
debt loss potentially increasing the
its
institution
reserve as a bad
institution's addition to its
institution
reserve
bad debts and the deduction it may claim therefor.' If an institution uses the specific charge-off method of accounting for bad debts
and the assistance payment made on account of the write-down is
ignored for tax purposes, the institution may be entitled to claim a
bad debt deduction on the write-down of a covered loan.'°
In the case of covered assets other than loans or covered loans
with respect to which bad debt losses may not be claimed on the
write-down, the issue is whether the assistance payment made in
connection with the write-down must be taken into account in determining whether the institution is entitled to claim a loss on the
subsequent disposition of the asset. As a result, in the case of an
asset other than a loan, the tax considerations implicated by a
write-down of the asset are similar to those raised above in cases
where contemporaneous assistance payments are made to
compensate for a loss on the sale or other disposition of a covered
for
and
its
affiliated
corporations
will
tend
to
enhanced. The institution, therefore, has an
minimize the value of covered assets in order to
benefit as tax losses are
loan ("covered loan"), the issue
of the
as long as an
from any loss of income and on disposition the institution is
guaranteed to receive book value through a combination of sales
proceeds and FDIC payments. The FDIC, and not the institution,
bears the economic burden corresponding to any reduction in value.
the assistance
account
sold. In the typical case,
holds a covered asset, the yield guarantee protects the institution
Write-down of covered assets
2.
the
B. Incentives
it
tax loss
and the attendant
tax savings. Similarly, to the
extent that tax deductions are allowed for expenses that are reim-
bursed with FDIC payments,
have an incentive to maxexpenses. Unless the tax rules
are clarified to provide that covered losses and expenses are not
deductible or such incentives effectively are reversed through
renegotiations, only the exercise of the FDIC's contractual rights to
repurchase covered assets can stop the potential waste,
institutions
imize, rather than minimize, those
C. Current Law: Arguments For and Against Deductibility
In
the case of the sale or write-down of a covered asset, the
assisted institution generally receives compensation from the
for
any
loss.
FDIC
Similarly, the
generally
is
FDIC
required under the
assistance agreements to reimburse institutions for a variety of
expenses. The deductibility
of
these losses and expenses turns on
the appropriate tax treatment of the financial assistance paid by the
FDIC. However, the tax law
1.
is
not clear."
Considerations generally applicable to covered losses
and expenses
asset, although the legal analysis of the two transactions might
diverge.
3.
Reimbursed expenses
Legislative
Background
The question whether covered losses and expenses reimbursed by the FDIC are nevertheless deductible for tax purposes
TAX POLICY
depends upon a construction of the provisions of old section 597,
enacted in 1981 Under old section 597, money or property received
from FSLIC pursuant to section 406(f) of the National Housing Act is
excluded from the gross income of a domestic building and loan
association.'^ A companion rule in old section 597(b) prohibits a
reduction in the tax basis of the assets of an assisted institution on
account of the receipt of exempt assistance. Prior to the enactment
of old section 597, the tax treatment of a payment from FSLIC to a
financial institution was unclear. The payment could be treated as
gross income or as a nonshareholder contribution to the capital of
the institution. If treated as a nonshareholder contribution to capital,
the payment vtias not included in gross income," but the institution
was required to reduce the basis of its property by the amount of the
contribution."
two hurdles
The
asset.
was
hurdle requires the taxpayer to establish that a loss
on the
sale. As a general rule, a taxpayer realizes a
on the sale or other disposition of property to the extent that the
taxpayer's adjusted basis for the property exceeds the amount
realized
loss
A
realized on the sale or other disposition."
basis for an asset
A
taxpayer's
is
amount
market value
taxpayer's adjusted
generally determined by the cost of the asset."
realized from the sale or other disposition of an
asset generally equals the amount of
money
received plus the
fair
any other property received on the disposition."
Therefore, an assisted institution would not be entitled to claim a tax
loss on the sale or other disposition of a covered asset if assistance
payments made to the institution as compensation for that loss are
included
in
arguably
is
of
amount
the
realized
the most reasonable as
purposes
for tax
denying the
Treasury has concluded that assisted institutions should not be allowed to deduct
losses and expenses that are reimbursed
by the FDIC.
order to claim a deduction for a loss on the sale of an
in
first
in
from the sale. This treatment
it characterizes the transaction
accordance with its economic substance by
a deduction for a loss that it does not
selling institution
bear economically.
Upon any
acquisition of covered assets, the acquiring institution
asset and FSLIC's agreement to provide
any loss on the disposition of those assets.
Consequently, the right of an institution to receive assistance on the
disposition of a covered asset may be considered an integral part of
acquired
both
compensation
the
for
view is consistent with private rulings that the
IRS has issued holding that the right to receive assistance with
respect to covered assets is taken into account in valuing those
assets for purposes of determining whether the built-in deduction
that asset. Indeed, this
When Congress enacted old section 597, it decided that assistance payments should be excluded from gross income and should
not be
subject to
the
basis
shareholder contributions
reduction
rules
applicable to
non-
The statutory rule prohibiting
was intended to ensure that the
exclusion from gross income provided by old section 597 would be
permanent rather than temporary.
It
also appears that the special tax
rules that applied to the acquisition of troubled financial institutions
were designed
to
make
the net operating losses of those institutions
available to acquirers in assisted transactions.'^
In
enacting the special tax rules applicable to the acquisition of
troubled financial institutions, Congress intended to facilitate the
provision of financial assistance by
merger
FSLIC and
to
encourage the
of troubled financial institutions into stronger institutions.
legislative
explicitly
The
however, does not suggest that Congress
considered the implications of the basis adjustment
history,
beyond this point."
The fundamental goal of
the exclusion of income
Old section 597 does not appear to prohibit the inclusion
597 was to
ensure that FSLIC (and subsequently FDIC) assistance would not be
reduced by the imposition of income taxes. There is no indication
that Congress believed that the deductibility of covered losses and
expenses was necessary either to fulfill this purpose or to facilitate
the resolution of troubled financial institutions. Moreover,
we
suspect
Congress would have expressed a contrary view if it had
explicitly
considered the deductibility of covered losses and
expenses and the perverse incentives associated with the
deductibility of those losses and expenses. At the time of their
enactment, old section 597 and the accompanying legislation to
facilitate mergers and acquisitions of savings and loan institutions
were estimated to produce an annual revenue loss of approximately
$5 million. Old section 597 and its legislative background fail to provide conclusive authority for the deduction of covered losses and
that
expenses.
in
it
if
Perhaps the strongest argument
is
generally required to
overcome
disallowing
a
deduction
proponents of deduct-
for
not believe that Congress intended the provisions of old sec-
597
It
to require deductibility of the
is
same
reimbursed loss
in
such a
quite reasonable to view that provision as prohibiting the
reduction of
the
a taxpayer
that
is
the property. Notwithstanding the superficial appeal of this argument,
we do
case.
The Amount Realized
of the
covered losses and
expenses is tantamount to taxing the assistance, thereby denying
the permanent exclusion that Congress intended. Under this
argument, the basis adjustment prohibition of old section 597 is
viewed as a prohibition of any reduction of tax attributes that would
have the effect of taxing FSLIC assistance. Assume, for example,
that an assisted institution sells an asset with a book value and an
adjusted basis of $100 for $60, and that the FDIC pays the institution
$40 of assistance to compensate for the loss If a deduction for the
$40 loss reimbursed by the FDIC is disallowed on account of the
assistance payment, the institution is in the same position that it
would have been in if it had realized $40 of taxable income from the
assistance payment and recognized a $40 taxable loss on the sale of
ibility
tion
law,
of
amounts realized. By its terms, old section 597 only
excludes from gross income amounts that would be gross income
but for the exclusion. The amount realized on the sale of an asset is
included in gross income only to the extent
exceeds the basis of
the asset sold^' Therefore, old section 597 can reasonably be read
to exclude only amounts of assistance that otherwise would produce
taxable gain on the disposition of covered assets. In addition, the
basis adjustment prohibition of old section 597 applies only to
assistance that is excluded from gross income under old section
597. Thus,
assistance paid as compensation for a loss on the sale
of a covered asset were treated as an amount realized on the sale,
old section 597 would not apply to the assistance to the extent that it
assistance
and the
elimination of basis adjustments found in old section
Under current
regulations applies to those
merely reduced the tax loss from the sale.
prohibition
Deductibility of Losses:
return
assets.^
to capital
basis adjustments apparently
of the consolidated
limitation
FSLIC or FDIC assistance through taxation
without, at
time, reading the provision to create tax incentives for
Increasing losses
and minimizing value
in
assisted transactions.
TAX POLICY
General Principles Governing the Treatment of Compensated
Losses and Reimbursed Expenses
guidance.'*' Nonetheless, this ruling provides
position of those arguing that
some
support for the
covered losses and expenses are
deductible.
If,
contrary to the
above
analysis, assistance received from
tfie
FDIC as compensation for a covered loss is not treated as an
amount realized, the selling institution will be treated as realizing a
loss from the sale for tax purposes. The fact that the institution has
realized a loss for tax purposes
does not, however, necessarily
mean that a deduction for the loss will be allowed. In order to claim a
deduction, the institution must clear a second legal hurdle. Under
section 165(a) of the Code, a deduction is allowed for any loss
sustained during the year only if the loss is not compensated for by
insurance or otherwise. In other contexts, this rule has been
interpreted to bar a deduction for a loss that is compensated for by
tax-free assistance.^
Similar principles apply
to
the deductibility of covered ex-
penses. Generally, the Code allows taxpayers to claim a deduction
for the ordinary and necessary expenses incurred in carrying on a
It is well established, however, that ordinary
necessary business expenses are not deductible to the extent
they are reimbursed, even if the reimbursement payments
excludable, under specific provisions of the Code, from
trade or business.'^
recipient's income.^'
Amounts
the nature of advances on the
making the reimbursement."
597 are
preted to require that assistance payments be ignored
in
inter-
applying
are compensated for or reimbursed with assistance payments. The
deductibility,
however,
argue
that
assistance
payments made with respect to covered losses do not represent
compensation "by insurance or otherwise" within the meaning of
section 165(a) of the Code because the assistance payments are not
payments in the nature of insurance, but rather are part of an arm'slength bargain that induced the acquirer to enter into the assisted
many
it
is
indisputable that the capital loss coverage provided
in
1988/89 transactions was part of an agreed package of
is not dispositive. First, loss reimbursements
paid by the FDIC may quality as compensation for purposes of
of the
consideration, that fact
165(a) even
payments are not in the nature of
insurance." Second, even the payments must resemble insurance,
the assistance that FSLIC agreed to pay under the 1988/89
assistance agreements with respect to covered losses shifted the
risk of those losses to FSLIC and, as such, bears a striking
resemblance to insurance. ^° If, as part of one of the 1988/89
transactions, FSLIC had agreed to pay a third party to insure the
assisted institution against some risk, would the fact that the
section
if
the
if
insurance
represented
part
of
the
consideration
provided
in
connection with the acquisition of the assisted institution cause the
insurance to be characterized as something other than insurance for
tax
purposes?
fact pattern
We
think not
and cannot
readily distinguish
such a
from the one at hand.
Other Considerations
The
only existing administrative guidance explicitly addressing
the deductibility of covered losses
and expenses
is
an IRS technical
memorandum.^ This memorandum concludes that the
assisted institution may deduct losses and expenses that are reimbursed with assistance payments from FSLIC. A technical advice
memorandum, however, generally is not considered authoritative
advice
is
it
income
allocable to
section 597. ''
Generally,
that
is
265
section
exempt from
of
the
Code
tax under old
disallows
a
any expense that is allocable to exempt income. The
purpose of section 265 in disallowing deductions for expenses
incurred to earn exempt income is to prevent taxpayers from deriving
a double tax benefit from an exclusion from income.'^ It may be
argued that the legislative decision to exclude assistance exempt
under old section 597 from the ambit of section 265 represents a
decision to approve a double benefit analogous to the allowance of a
deduction for covered losses and expenses, and that this decision
supports the conclusion that Congress had a similar result in mind
when it enacted old section 597.
deduction
for
The IRS
is
litigate, if
prepared
to
challenge and
necessary, the deductibility of
covered losses and expenses.
As a matter of
statutory interpretation, however, the situations
postenactment
Congress are relevant
which
are limited.
We
99th Congress
in
in
by a subsequent
ascertaining the intent of a prior Congress
expressions
in
believe that,
in this
of
intent
case, the actions or intent of the
enacting statutory provisions related to old section
597 should not be accorded any weight
97th Congress,
transaction.^'
While
because
the
the principles that generally govern the deductibility of losses and
expenses, the better view is that no deduction should be allowed for
covered losses and expenses because those losses and expenses
of
legislation in 1986 providing that an otherwise allowable
deduction would not be disallowed under section 265(a)(1) solely
are
credit of the party responsible for
Therefore, unless the provisions of old section
proponents
enacted
reimbursement are
that are subject to
in
and
that
Assisted institutions may also argue that the deduction of covered losses and expenses is supported by legislation enacted subsequent to the enactment of old section 597. For example. Congress
when
it
in assessing the intent of the
enacted old section 597, regarding the
treatment of covered losses and expenses since the 99th Congress
and expenses.
Congress amended old section 597 to re-
did not directly consider the treatment of those losses
Similarly, in 1988,
duce the tax benefits associated with the exclusion of assistance
payments from income." This legislation, in general, required that
certain tax attributes of an assisted institution be reduced to the
extent of 50 percent of any assistance that is received by the
institution and is excluded from gross income under old section 597
(the "attribute reduction rule"). Proponents of the deductibility of
covered losses assert that this legislation indicates that Congress
believed that covered losses and expenses are deductible because
otherwise the attribute reduction rule would have the effect of reducing an assisted institution's tax attributes for assistance payments
that provided the institution with no tax benefits. This argument, of
course, assumes that the attribute reduction rule would apply to
reimbursements of covered losses and expenses. The rule would
apply, however, only if those reimbursements represent gross income that is exempt from tax under old section 597. If those
reimbursements are treated either as an amount realized on the sale
of an asset or as compensation for a loss, they would not be treated
as gross income that is subject to exemption under old section 597.
In sum, while the subsequent legislative developments involving
old section 597 do provide some measure of support to those
asserting the deductibility of covered losses and expenses, that
support is not determinative because Congress, when it enacted the
subsequent legislation, did not provide a specific and official expres-
TAX POLICY
sion of
its
intent regarding the treatment of
we
expenses. Furthermore,
our view,
it
the issue,
it
seems
covered losses and
are impelled, once again, to state
that, in
Congress had specifically considered
would have expressed a contrary view.
likely that
if
2. Special considerations applicable to write-down of covered assets
FSLIC and to
and expenses would be
informally both to
losses
FDIC
the
is
ordered to whte down a covered asset,
generally required to make an assistance payment to the
an
institution is
amount
institution in the
loan
(i.e.,
a covered
of the write-down.
loan), the issue
is
If
the covered asset
whether the
is
a
may
institution
that
has become wholly
worthless
partially
to
the
they are ordered to write
regulations,
institution
year.^^
assisted
to
claim a bad debt loss
down covered
loans Under Treasury
made by a bank
loans
that
likely
is
It
argue that they are entitled
institutions will
when
or,
during
or other regulated financial
are conclusively presumed to be worthless to the extent
on the
that they are written off
institution's
books
in
response
an
to
order of the institution's supervisory authority. ^^ Arguably, the order
to write
down a covered
loan represents an order that triggers a
conclusive presumption under Treasury regulations that the debt
is
worthless to the extent of the wnte-down.
does not appear, however,
It
suant
denying institutions deductions for losses and
reimbursed by the FDIC will be perceived by
some as a repudiation of the Government's agreements.
cognizant
expenses
that a write-down ordered pur-
the conclusive presumption of worthlessness.
The purpose
of the
conform tax and regulatory standards to
institution is ordered to write down a
covered loan in accordance with the requirements of an assistance
agreement, the write-down does not reflect an exercise of regulatory
standards by the institution's supervisory authority in its capacity as
such. Rather, the write-down is a product of rights and obligations
conclusive presumption
created
institution
If
all
pursuant
is
to
When an
the extent possible."
to
an
arm's-length
between
transaction
the
and FSLIC.
"pertinent evidence," including the value of the collateral
of
the debtor,
worthlessness.^
A
are
taxpayer
is
taken
into
account
in
and the
determining
not entitled to claim a deduction for a
bad debt loss if the taxpayer has a reasonable prospect of being
made whole for the loss.^' Accordingly, it is appropriate in valuing a
covered loan to take into account the institution's hght to receive
assistance compensating it for any loss on the disposition or
write-down of the loan.*"
The RTC
dispositions as
Tax Treatment
of Reimbursed Losses and Expenses
report identified the acceleration of covered asset
one
overall cost of the
of the best options available for reducing the
1988/89 transactions."' The
RTC
report also
recognized the severe adverse impact that the deduction of covered
losses and expenses could have on the cost of the 1988/89 transactions, stating that clarification of this issue
From the
into
point of view of
account both the costs
economic incentives
to
is "vital."
"
sound tax and financial policy, taking
Government and the appropriate
the
for assisted institutions,
it
is
clear that assisted
should not be allowed to deduct losses or expenses that
are reimbursed by the FDIC. Unfortunately, as a legal matter, the
institutions
covered losses and expenses under existing law is
IRS has never taken a published position
allowing these losses, it has issued at least one technical advice
memorandum holding that the covered losses and expenses are
deductible.
In
addition,
IRS personnel apparently conveyed
that
expenses
that are reimbursed by the FDIC. In reaching this concluTreasury Department has carefully weighed the costs to the
Government of allowing institutions to deduct reimbursed losses and
expenses against the costs of creating a perception that the Governsion, the
ment
not adhering to
is
bargain The costs to the Government of
its
and expenses
would
covered losses and expenses would
allowing assisted institutions to deduct covered losses
is
The costs
considerable
accompany
of the perverse incentives that
the deductibility of
dwarf the cost of the tax benefits associated with those
likely
Such perverse
deductions.
of
incentives are not only financially costly,
soundly managing the savings and loan
ment may be perceived as reneging on
Government
failures.
its
deal
is
is incapable
That the Govern-
unfortunate, but
the costs of avoiding that perception are unacceptable.
Under these circumstances, the Treasury Department does not
and should not feel bound by one technical advice memorandum and
informal advice conveyed to acquirers by Government personnel.
The acquirers in the 1988/89 transactions were generally represented by sophisticated counsel who know well that they are not
on informal advice either from the IRS or other Government agencies or on technical advice memorandums or on
entitled to rely
of acquirers, for
whatever reason,
IRS
to
other taxpayers
might
someday
challenge
Department does not believe
The
failure
to obtain private rulings or closing
agreements confirming the deductibility of
expenses represents an assumption of the
those
that the
their
covered losses and
Government
The Treasury
risk that the
deductions
American people should bear
the burden of exculpating those taxpayers from their assumption of
this risk.
The IRS
is
prepared
to
challenge and
litigate,
and expenses.
While the Treasury Department has determined
if
necessary,
the deductibility of covered losses
that assisted
deduct covered losses and expenses reimbursed by the FDIC, our decision does not settle the
issue. Our view will surely be challenged in the courts and that litigation could drag on for a number of years. The uncertainty that this
environment creates will make it very difficult for the RTC to
implement measures to reduce the cost of the 1988/89 transactions.
institutions
D. Clarifying the
Department has concluded
assisted institutions should not be allowed to deduct losses and
private letter rulings issued by the
the conclusive presumption of worthlessness does not apply,
condition
that
that are
but they also create the perception that the
granted under an assistance agreement should tngger
to rights
connection with the acquisition of the
in those transactions." We are
in
troubled financial institutions involved
Nonetheless, the Treasury
allowed a deduction for any debt
the extent provided in regulations,
is
by
transactions regard the deductibility of covered losses as part of the
claim a bad debt loss on the write-down of the loan.*"
Under the Code, a taxpayer
covered
Material provided
FSLIC to prospective acquirers explicitly indicated that such losses
would be deductible, although that same material indicated that the
economic benefits of such deductions would flow to FSLIC and not
the acquirers." Under these circumstances, acquirers in the 1988/89
consideration they received
When
potential acquirers that
deductible.
should not be allowed
to
congressional clarification
Therefore,
of
this
issue
is
extremely
We
do not believe that Congress, when it
enacted the special tax benefits that were available in the 1988/89
transactions, intended to sanction the deductibility of covered losses
and expenses. But, if so. Congress should tell us now so we can
avoid costly litigation. Otherwise, Congress should enact clarifying
legislation disallowing deductions for covered losses and expenses.
desirable,
V.
deductibility of
it
not essential.
TREATMENT OF YIELD MAINTENANCE
less clear. Although the
A. Overview
In
the 1988/89 transactions,
FSLIC generally guaranteed the
TAX POLICY
minimum
on the book value of covered
maintenance to induce acquirers
to purchase the assets (and thereby avoid the burden of purchasing
those assets itself) because it believed that the acquiring institutions
were better positioned to manage the assets properly. The
guaranteed yields are based on a specified base rate (e.g., the
Texas Cost of Funds) plus additional amounts ranging up to 275
acquirer a
assets.
return or yield
FSLIC agreed
basis points.
In
to
pay
yield
most transactions, the
additional basis points decline
over the term of the assistance agreement. The guaranteed yield
was set so as to provide the acquiring institution with sufficient
income to cover high funding and operating costs, including the costs
of managing the covered asset portfolio. In most cases, the
guaranteed yield is significantly higher than the yield the institution
would receive on a market investment
book value of the covered assets.*^
of
an amount equal
to the
the 1988/89 transactions, the assistance agreements generally
' In
require the assisted institutions to share a portion of their tax benefits
See RTC
with FSLIC.
report (vol.
I),
at 6, 47-49.
Many
assisted
have entered into tax sharing arrangements with
FSLIC are members of an affiliated group of corporations that files
consolidated Federal income tax returns. In many of those cases, the
tax benefits that are subject to sharing are used by an affiliate of the
institutions that
rather than by the institution
assisted institution,
cases, the other
members
of the affiliated
the assisted institution for their use of
port
its
tax benefits.
The RTC
re-
expressed concerns regarding these tax sharing arrangements
and recommended
review the
tax
that the
sharing
FDIC and
the Office of Thrift Supervision
arrangements
consistent with sound banking practices.
1
some
In
itself.
group are not reimbursing
As
18-120.
this
does not
to
ensure that they are
See RTC
report (vol.
raise issues of tax policy, this report
I),
at
does
not address the issue.
B. Clarifying
Guaranteed
yield
engage
Government
tutions to
the
'See IRC. §1001.
' See IRC. § 593 and Treas. Reg.1 .593-7(b)(2).
Tax Treatment of Yield Maintenance
in
maintenance has created incentives
behavior that
the
of
will
1988/89
tend
to
for insti-
increase the costs to
transactions.*
yield
First,
maintenance gives the assisted institution an incentive to delay
disposition of covered assets since the institution cannot readily
replace the high tax-free guaranteed yields with comparable taxable
yields. Second, the assisted institution has an incentive to minimize
actual yield on these assets. This results in larger tax-free yield
maintenance payments, thereby minimizing the taxable income of
the institution or increasing tax losses that may be used to offset its
other income or income of affiliated entities.^' Apparently, the
adverse incentives attributable to yield maintenance are being
compounded by
the fact that
some
assisted institutions are taking
the position that actual yield on covered assets
is
not taxable to the
assisted institutions, on the ground that these institutions collect
'"Seel.R.C. §166.
"
Many
of the legal
the consultant's
arguments discussed below are raised
and submitted to the
reports prepared
connection with the preparation of the
J.
Graetz, Deputy Assistant Secretary (Tax Policy).
was extended
See § 401 2(b)(2) of TAMRA.
"See IRC. §118.
'*
See IRC. § 362(c).
'^
This exemption
that appropriate authorities clarify that only the net difference be-
tween guaranteed and actual yield constitutes tax-free assistance
income." The Treasury Department will issue an administrative
pronouncement holding that the actual yield on assets covered by a
yield maintenance guarantee is taxable to the assisted institution.
This result is sufficiently clear under present law that confirmina
legislation
is
v
not necessary.
First,
See Report to the Oversight Board of the Resolution Trust
and the Congress on the 1988/89 Federal Savings and
Loan Insurance Corporation Assistance Agreements (RTC report).
' See RTC report (vol. I) at 9 and 68.
Corporation
For a more detailed discussion of the assistance provided
1988/89 transactions, see RTC report (vol. I) at 30-49.
^
*
See RTC
^
Old section 597 was enacted pursuant
Tax Act
report (vol.
I)
in
the
at 3-4.
to the
Economic Recovery
of 1981.
to the Congress: Thrift Resolutions. U.S. General
Accounting Office (September 1990). For a more detailed discussion
^
See Report
of the tax rules applicable to troubled financial institutions,
of the Joint
see
Staff
Committee on Taxation, Current Tax Rules Relating to
and Loan Associations (feb. 16, 1989).
Financially Troubled Savings
banks
to
In
prevents those losses from being absorbed or othenwise reduced as
a
result
of
the
assistance
payments
Second,
the
special
reorganization rules that were applicable to the acquisition of a
troubled domestic building and loan association in an assisted
transaction allowed the limitations of section 382 to be avoided in
cases where it would have been impossible to do so otherwise.
'«
See H.R. Rep. No 215, 97th Cong., 1st Sess. 283-4 (1981). See
also Staff of the Joint Committee on Taxation, General Explanation
of the Economic Recovery TaxActol 1981 151-3 (Dec. 29, 1981).
"See IRC. §1001.
'«See IRC. §1012.
"See IRC. § 1001(b).
^
8914021 (Dec. 29, 1988) and
There is little doubt that a payment
received from the FDIC to purchase a covered asset constitutes an
amount realized on the sale of the asset, at a minimum to the extent
of the fair market value of the asset. As noted previously, because all
FDIC payments with respect to covered assets arguably constitute
See,
e.g.,
private
8914020 (Dec.
'
FDIC assistance
the exclusion of assistance payments from income without
in the acquired institution's net operating losses
'^
it
to
1988.
requiring a reduction
if
of
I),
were tax-free assistance, is at odds with
both the language and purpose of old section 597(a). That provision
defines assistance as amounts received from FSLIC (or the FDIC)
pursuant to section 406(f) of the National Housing Act. The actual
yield earned by an institution from its investments is not "received"
from the FDIC and is therefore not received "pursuant to" section
406(f) of the National Housing Act." The RTC report recommends
as
report.
one
RTC in
See RTC report
Appendix V. Contrary arguments have been presented by the
law firms Skadden, Arps, Slate, Meagher & Flom and Johnson &
Gibbs, which represent taxpayers who acquired thrift institutions in
1988. See letter dated Nov. 6, 1990, from Skadden, Arps, Slate,
Meagher & Flom to Kenneth W. Gideon, Assistant Secretary (Tax
Policy); letter dated Dec. 18, 1990, from Johnson & Gibbs to Michael
(vol.
actual yield as agents of the FDIC.*' This view, which in substance
treats actual yield
RTC
in
29,
letter rulings
1988).
"assistance" for purposes of old section 597, institutions
may
take
the position that they are entitled to claim a tax loss equal to the
entire tax basis of a covered asset when they sell the asset to the
FDIC. The portion of the payment that does not exceed the fair marvalue of the covered asset, however, clearly represents
consideration paid for the asset and must be treated as an amount
ket
realized for tax purposes.
Code, gross income includes gains
Under section 1001(a) of the
Code, a taxpayer recognizes gain on the sale or other disposition of
^'
Under section 61(a)(3)
derived from dealings
in
of the
property.
property only to the extent that the
amount
realized from the sale
10
TAX POLICY
exceeds the basis
^ See
Rev.
87-32,1987-1 C.B. 131.
of the property sold.
Rul.
1976-1
76-144,
17
C.B.
(disaster
losses
payments were not
deductible). See also Shanahan
v.
Commissioner, 63T.C. 21
(1974); Treas. Reg. § 1.165-1(d)(2)(i). In addition, see note 24,
below, for analogous authority regarding the deductibility of
reimbursed business expenses under section 162 of the Code.
"Seel.R.C. §162.
" See. e.g.. Manocchio v. Commissioner, 710 F.2d 1400 (9th Cir.
1983) (flight training expenses were not deductible to the extent
compensated
for
by tax-exempt disaster
relief
^ See old section 597(c). as amended by TAMRA.
" In the case of covered assets other than loans
connection with the write-down
disposition
of
the
those
made
increased
rent,
reimbursed by tax-tree relocation
assistance); Rev. Rul. '78-388, 1978-2 C.B. 110 (moving expenses
were not deductible where taxpayer had a fixed right to
deductible
to
the
extent
reimbursement with tax-free relocation assistance).
^* See, e.g., Manocchio, id. at
1402, quoting Glendinning, McLeish &
Co. V. Commissioner, 61 F.2d 950, 952 (2d Cir. 1932).
^' This argument relies, in part, on Idaho First National Bank v.
Commissioner, 95 T.C. 185 (1990), where the Tax Court stated that
"[t]he FDIC insures depositors, not banks, and an FDIC assistance
payment is not an insurance payment." Two points should be noted
when considering the quoted passage. First, the passage appears in
the opinion's findings of fact without any legal analysis and does not
appear to be a finding that was required for the court to reach its
decision. Second, the assisted transaction at issue in that case did
not require the FDIC to reimburse or otherwise compensate the
assisted institution for any losses incurred on the disposition of its
assets.
The FDIC assistance provided
form of a contribution
to the
in
that transaction took the
assisted institution immediately prior to
in
those
* See Treas.
^
See, e.g., Aerotron Grantor and Stockholder Trust v.
Commissioner, 56 T.C M. 789 (1988); Exxon Corporation v. United
States, 7 CI. Ct. 347 (1985), rev d and remanded on other grounds,
785 F.2d 277 (Fed Cir. 1986). See also Treas. Reg. § 1 166-2(b).
But see Rev. Rul. 80-24, 1980-1 C.B. 47, 48 (which relies on
Zeeman v. United States, Z7S F.Supp 235 (S.D.N.Y. 1967),
remanded on other grounds, 395 F.2d 861 (2d Cir. 1968)), for the
proposition that a creditor may deduct a bad debt loss on a note,
regardless of whether the creditor has a reasonable prospect of
succeeding
in
a
sales contract,
owed
suit
against the seller of the note for rescission of the
where the rescission
suit
does not deal with
indemnity contracts directly related to the debt as such". The FDIC's
obligation to reimburse an institution for
any loss on a covered loan,
however, effectively constitutes a guarantee of that loan and, as
such, should be taken into account in determining whether the loan
The IRS has taken
Tax Court's decision in Idaho First National Bank should be
accorded any precedential value with respect to the issue under
in
valuing covered assets for other purposes.
consideration.
" See
Compare Forward Communications
F.2d 485, 501
(Ct. CI.
will
United States, 608
v.
merely "one example" of
prohibit a deduction for a loss
1979) (insurance
the forms of compensation that
Corp.
is
under section 165(a)) with Shanahan v. Commissioner, supra (the
form of compensation that will prohibit a section 165(a)
only
deduction
^°
compensation
is
that
The resemblance should be
be considered
is
similar to insurance for
purposes
coverage
to
of section 165(a).
Commissioner 74 T.C. 725 (1980)
amounts embezzled from client out of trust fund
See, e.g., Estate of Bryan
v.
(reimbursement of
maintained through annual contributions required of all practicing
attorneys treated as compensation similar to insurance for purposes
of the estate tax counterpart to section 165(a)).
" See
technical advice
30, 1986).
We
also understand that the deduction of reimbursed covered losses
account an
institution's right to
RTC report (vol. at 72.
^ See RTC report (vol
at 17-118.
" See Information and Instructions
See
assistance
authority cited at
I),
I),
1
for
the
Preparation
and
Submission of Proposals for the Acquisition of One or More Savings
Institutions in the Southwest (prepared by the Federal Home Loan
Bank Board and FSLIC).
Acquirers of troubled
thrifts
also take comfort from a statement by
Committee on Taxation suggesting that such losses are
deductible, even though that statement was made in February 1989
and therefore obviously not relied upon by taxpayers. See Staff of
the Joint Committee on Taxation, Current Tax Rules Relating to
Financially Troubled Savings and Loan Associations 38-39 (Feb. 16,
the Joint
1989).
*^
memorandum 8637005 (May
into
note 20, above.
"
similar to insurance).
sufficient for capital loss
"the debt
by the debtor to the creditor or with collateral, guarantees or
worthless.
^'
tax
C.B. 66.
is
the
the
Reg. § 1.166-2(d)(1).
See Rev. Rul. 80-180, 1980-2
^ See Treas. Reg. § 1.166-2(a).
3'
**
Under these circumstances, we do not believe
cases,
where contemporaneous assistance payments are
compensate for a loss on the sale or other disposition of a
to
that
acquisition.
its
determining
raised
^Seel.R.C. §166.
69 T.C. 975 (1978) (expenses for
moving costs, and professional fees were not
Therefore,
asset.
in
claim a loss on the subsequent
considerations implicated by a write-down of the asset are similar to
covered asset.
Commissioner,
taken into account
institution is entitled to
taxpayer "suffers no economic detriment and incurs no expense");
V.
is
whether the
reimbursed by tax-free veterans assistance); Rev. Rul. 80-173,
1980-2 C.B. 60, 61 (similar facts, but stressing that in such a case a
Wolfers
or covered loans
bad debt losses may not be claimed on the
write-down, the issue is whether the assistance payment made in
with respect to which
See RTC
report (vol.
I),
at
33-34 and 72-73,
for
a more detailed
discussion of yield maintenance.
* See RTC report (vol. at 73-74.
" Although assistance agreements
1),
was
permitted
in
one closing agreement entered
into
by a taxpayer
and the IRS.
"'
Generally, a technical advice
memorandum
(or private ruling) is
and may be relied upon only by the taxpayer to whom
See IRC. § 61 10(j)(3);Treas. Reg. § 301.61 10-7(b).
not precedent
it
''
is
issued.
See §
904(c)(2)(B) of the Tax Reform Act of 1986. Congress
subsequently
265(a)(1)"
amended
and
section 904(c)(2)(B) by striking out "Section
inserting in
its
that the provision applied to
place "Section 265," thereby providing
all
of section 265.
See §
4012(c)(2) of
TAMRA.
^=
See,
e.g..
over
^ See RTC
time,
this
report (vol.
1),
has
at
1
not
16-1
1
yet
7.
See, eg., § 406(f)(1) and (2) of the National Housing Act, 12
use. § 1729(f)(1) and (2) (FSLIC is responsible for determining the
"'
terms and conditions of assistance received pursuant
406(f)).
^ See RTC
Rev. Rul. 83-3, 1983-1 C.B. 72, modified by Rev. Rul.
provide for a declining yield
materially reduced yield
maintenance payments, and, therefore, has not thus far tended to
mitigate the adverse incentives See RTC report (vol. 1), at 74.
spread
report (vol.
I),
at
1
16-1
1
7.
to
section
11
Abstracts of Recent Taxation Studies
Fifth Report on the International Boycott Provisions
On
released
1991, the Department of the Treasury
annual international boycott provisions
"The Operation and Effect of the International
February
its
5,
fifth
report, entitled
Boycott Provisions of the Internal Revenue Code; Fifth
Annual Report." The international boycott provisions deny
certain tax benefits to persons who participate in or
cooperate with an international boycott. The tax benefits
affected include the foreign tax credit, deferral of tax on the
earnings of controlled foreign corporations and interest
Tax Issues Relating
to the
charge domestic international sales corporations, and
exemption from tax of certain income of foreign sales
corporations. The report broadly covers the tax accounting
periods 1983, 1984, 1985, and 1986. The report, which
includes statistical tables and a description of operations,
shows that the number of persons agreeing to participate in
boycott operations declined to 44 from 234. For 1986, the tax
benefits lost by persons participating in boycott activity were
an estimated $2,850,000.
1988/89
On March 5, 1991, the Department of the Treasury
released its "Report on Tax Issues Relating to the 1988/89
Federal Savings and Loan Insurance Corporation Assisted
Transactions." (For the complete text of the report, see page
3 of this issue.) The report analyzes and provides Treasury's
views on the tax issues raised by the Resolution Trust Corporation's "Report to the Oversight Board of the Resolution
FSLIC Assisted Transactions
Trust Corporation and the Congress on the 1988/89 Federal
Savings and Loan Insurance Corporation Assistance Agreements." Comments on the report, prepared by the Office of
Tax Policy, may be addressed to Gregory J. fvlarich.
Associate Tax Legislative Counsel, Department of the
Treasury, Rm. 4206, 1500 Pennsylvania Avenue, NW.,
Washington, DC 20220.
Report on the Taxation of Social Security Benefits
The "Report on the Taxation
of Social Security and
Calendar Years 1987 and
1988" was released by the Department of the Treasury on
March 15, 1991. In the repxjrt. Treasury explains the
methodology used in determining transfers of income tax
liabilities to the Social Security and railroad retirement trust
funds. These transfers are required by the Social Security
Amendments of 1983 and consist of the tax liabilities
resulting from the taxation of Social Security and railroad
social security equivalent benefits received by high-income
taxpayers. Transfers are initially based on Treasury
estimates and are adjusted when actual tax return data are
Railroad Retirement Benefits
in
available.
that the
returns, the report finds
transfers of S3. 291 billion exceeded actual tax
by $139 million. The 1988 tax return data showed
liabilities
that the
Based on actual 1987 tax
initial
initial
transfer of S3. 498 billion
fell
short of actual tax
by S275 million. The report estimates that nearly
S25 billion will be transferred to the trust funds for calendar
years 1989 through 1993 as a consequence of the taxation
of benefits. The report also finds that about two-thirds of the
taxes on such benefits are paid by beneficiaries with
adjusted gross income plus nontaxable benefits of more than
liabilities
S50,000.
Government Contractors Minimum Participation Requirements Study
in response to the requirements of section 6056 of the
Technical and Miscellaneous Revenue Act of 1988, Treasury
released its "Study of the Effect of the Minimum Participation
Requirements on Government Contractors" on March 15,
1991. The study examines the application of the minimum
participation requirements of section 401(a)(26) of the
Internal Revenue Code of 1986 to Government contractors
that are subject to prevailing wage requirements under the
Davis-Bacon Act, the McNamara-O'Hara Service Contract
The study concludes
that no change in current law is warranted because current
law and regulations grant employers considerable latitude to
design their qualified retirement plans in a manner that
Act, or other similar Federal legislation.
simultaneously
satisfies
both
the
section
minimum participation requirements and Federal
wage requirements.
401(a){26)
prevailing
Taxation of Technical Services Personnel
On March
15,
1991, a report to the Congress on the
"Taxatio/i of Technical Services Personnel: Section
1706
of
the Tax Reform
ment
of
Ad
of
the Treasury.
986"
1
The
was
released by the Depart-
report studies issues relating
12
TAX POLICY
to
the treatment
of
independent contractors working
technical fields under section 1706 of the
Tax Reform Act
in
of
1986. Section 1706 modified the way workers in technical
are classified as employees versus independent
contractors for Federal tax purposes. The report reviews the
need for section 1706, including IRS data on tax compliance
among independent contractors generally and technical ser-
fields
independent contractors in particular compared to
employees. It discusses the effect of section 1706 on the
market for technical services independent contractors.
Finally,
analyzes the practical problems of applying section
1706, including the fact that it requires employers to use
complex common law tests in classifying workers as
employees or independent contractors.
vices
it
Copies of the preceding reports may be purchased from the National Technical Information Service, 5285 Port Royal Road, Springfield,
phone: (703) 487-4660.
VA
22161;
13
TREASURY ISSUES INDEX
Previous articles appearing
issue,
in
the "Treasury Issues" section of the Treasury Bulletin are listed below by
and page number.
Domestic Finance
"Issues
A
in
the Securities and Futures Markets." Glauber, Robert R. June 1990, pp. 3-6.
discussion on regulatory fragmentation
and related
issues in the securities
and futures markets,
the importance of irUegraling the U.S. fragmented system so as to gain significant benefits in
stressing
innovation,
enforcement, coordinated market mechanisms, and globalization.
Economic Policy
Revenue
"Direct
Effects
of
Capital
Evidence, The." Darby, Michael
R.,
Gains Taxation: A Reconsideration of the Time-Series
Robert Gillingham, and John S. Greenlees. June 1988, pp.
2-2.8.
A
report presenting results that indicate the time-series data, like the cross-section data, provide considerable
evidence supporting the likelihood of direct revenue gains from reductions in capital gains tax rates.
"Fiscal 1991 Budget, The." Brady, Nicholas F. March 1990, page 3.
A statement by the Secretary of the Treasury on the elements of the family savings account, the capital gains tax
reduction, and
Growth Act.
"Need
for
Reform
Remarks by
and markets
home ownership
the
initiative
contained in the administration-proposed Savings and Economic
the Financial Markets, The." Brady, Nicholas F. March 1991, pp. 3-6.
on the administration s plan for establishing strong financial services
a changeable technological environment through legislation, fundamental reforms, and
in
the Secretary of the Treasury
in
modernization.
"Outlook for the Savings and Loan Industry after the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989." Glauber, Robert R. December 1989, pp. 4-6.
A discussion of the savings and loan industry's future as it relates to provisions in the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989.
"Role of Saving in a Dynamic U.S. Economy, The." September 1990, pp. 3-6.
A report on the declining U.S. savings rate and its negative impact on investment and productivity growth
in the
United States.
"Solution to the Savings and Loan Problem, The." Excerpted. Brady, Nicholas F. September 1989,
page
3.
Remarks by
the Secretary of the Treasury on the administration s comprehensive reform plan proposed for the
overhaul of the savings and loan industry.
title,
14
TREASURY ISSUES INDEX
'Some Economic Aspects of the U.S. Health Care System." Summary. Duggan, James E.
December 1990, pp. 3-5.
A report on evolving characteristics of health care and their implications for public sector finance and
government regulation.
Fiscal Service
"Status Report on the Fiscal Operations of the Government, A." Murphy, Gerald. December
1988, pp. 3-7.
A sweeping look by the Fiscal Assistant Secretary of the Treasury at each of nine major responsibilities making
up the Fiscal Service' s financial leadership role
in
Government.
International Affairs
"International Debt Strategy, The." Brady, Nicholas F. June 1989, pp. 3-4.
Remarks by the Secretary of the Treasury on the debt problem and the direction needed to be provided
to
international efforts to strengthen the debt strategy.
"Strengthened Debt Strategy, The." Brady, Nicholas F. December 1989, page 3.
An update from the Secretary of the Treasury on the international debt strategy to improve
creditors' assets and creditworthiness in debtor countries.
the quality of
Toward Direct Foreign Investment." Robson, John E. March 1990, pp. 4-7.
An exploration into the position that the United States is taking on foreign trade and investment policy
"U.S. Policy
matters.
Tax Policy
Congressional Reports and Staff Working Papers by the Office of Tax Policy. March 1988, pp.
A
of research studies pertaining
the 1986-7 tax reform effort.
listing
related to
to important
3-4.
contemporary and anticipated tax policy issues, particularly
Tax Reform Act of 1986 on Commercial Banks, The." Excerpted. Neubig, Thomas
and Martin A. Sullivan. June 1988, pp. 3-7.
An analysis of the overall effect of tax reform on the banking industry, which, the study concludes, benefits from
"Effect of the
S.,
tax reform.
"Impact of the Tax Reform Act of 1986 on Trade and Capital Flows, The." Excerpted. Grubert,
Harry,
An
and John
Mutti.
March 1988, pp.
5-8.
analysis of the international implications of tax reform, based on a general equilibrium
States and the rest of the world.
model of the United
15
TREASURY ISSUES INDEX
"New Estimates of
Data." Summary.
Capital
Gains Realization Behavior: Evidence from Pooled Cross-Section
Robert, John S. Greenlees, and Kimberly D. Zleschang.
Gillingham,
September 1989, pp. 4-5.
A paper developing and estimating a
behavioral model of taxpayer response to capital gains taxation. Using the
econometric approach, the pooled cross-section data represents a set of independent observations from a taxpayer
sampling extending over the period 1977-85.
"Noncorporate Business Taxation: Before and After the Tax Reform Act of 1986." Excerpted.
Nelson, Susan C. December 1988, pp. 8-12.
An analysis of the effects that the Tax Reform Act of 1986 might have on noncorporate business in terms of tax
revenue, incentives for noncorporate versus corporate investment, and individual marginal tax rates on different
types of income from noncorporate business.
Operation and Effect of the Domestic International Sales Corporation Legislation: July
June 30, 1983. June 1988, page 8.
An announcement of the Department
1,
1981, to
of the Treasury's release of the 11th report in a series on domestic
income tax on part of their
international sales corporations, special corporations eligible for deferral of Federal
export profits.
"Tax Expenditure Budget Before and After the Tax Reform Act of 1986, The." Excerpted. Neubig,
Thomas S., and David Joulfaian. March 1989, pp. 3-10.
Findings from a recent study showing changes made by the Tax Reform Act of 1986 led to significant reductions
in
Government subsidies provided through tax expenditures.
Taxation Studies, Abstracts of Recent. September 1988, page 3.
Summaries of four major papers and reports, ranging from an examination of trends
in noncorporate business
taxation to a study of certain employee benefits not subject to Federal income tax.
Taxation Studies, Abstracts of Recent. June 1989, page
A
5.
brief look at four reports covering the taxation of insurance syndicate Income, Social Security benefits,
and
Americans working overseas; and the possessions corporation system of taxation.
Taxation Studies, Abstracts of Recent. September 1989, pp. 6-8.
A summation of the reports to Congress on life insurance taxation and the depreciation of clothing held for
rental, and various OTA papers on issues running from transfer pricing to capital gains realization behavior.
Taxation Studies, Abstracts of Recent. June 1990, pp. 9-10.
A summation of reports on tax studies on financing health and long-term care, widely held partnerships,
life insurance company products, and reinsurance excise tax and the depreciation of horses, scientific instruments,
and fruit and nut trees.
"Trends In Corporate Tax Receipts." Rosen, Harvey S. June 1990, pp. 7-8.
A discussion of recent trends in corporate tax receipts, the importance of the corporate
and the
effect
of the Tax Reform Act of 1986 on corporate tax
receipts.
tax in foreign countries,
FINANCIAL OPERATIONS
r
19
Economy
Profile of the
GROWTH OF REAL GROSS NATIONAL PRODUCT
Change
Percent
4th Qtr. to 4th Qtr., Quarterly Annual Rate
——————————— —————
T
75
I
I
I
I
I
I
I
I
I
I
r
I
I
I
I
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
90,1
X
III
IV
91,1
Real GNP fell at a 2.8-percent annual rate in the first quarter of 1991 after a 1 6-percent rate of decline in the fourth quarter of 1990.
The first-quarter falloff reflected cutbacks in consumer spending on goods, business investment, homebuilding, and Government purchases.
These declines were partly offset by continued improvement in real net exports, which moved to a positive balance for the first time in 8 years.
.
FEDERAL DEFICIT
Sum Over the
Excluding
iiiiiiiiiiiiiiiiiiii
1982
1983
I
II II II II II II II
1984
Latest 12
Months
RTC & FSLIC
nil IIIIIIIIIIIIIIIIIIII Mil II Mil nil II II IIIIIIIIIIIIIIIIIIII II II II II II mill
1986
1985
1987
1988
1989
1990
1991
CALENDAR YEAR
The
Federal budget
deficit in
March 1991 was $40 8
billion
compared with $53.3 billion a year earlier. The decline reflected several
Over the 12 months through March, the deficit totaled $221 billion, or $164
billion,
special factors, including Operation Desert Storm contributions.
excluding spending as part of the savings and loan situation. Excluding contributions
in
support of the Middle-East
effort,
both figures
20
Profile of the
would be wider by $27 billion. For the first 6 months
tions), compared with $151 billion a year earlier.
Economy
was $152
of fiscal 1991, the deficit
billion
($179
excluding Desert Storm contribu-
billion
FEDERAL OUTLAYS AND RECEIPTS
AS A SHARE OF GROSS NATIONAL PRODUCT
I
1950
I
I
1953
I
I
Percent of
GNP;
I
I
1956
I
I
I
1959
I
I
1962
I
I
Projections 1991-96 from
I
1965
I
I
I
I
1968
I
I
1971
I
I
I
1974
I
I
I
1977
I
I
FY 1992 Budget
I
1980
I
I
I
1983
I
I
I
1986
I
I
I
1989
I
I
I
1992
I
I
r
1995
FISCAL YEARS
The
percent
in
Federal budget outlay share of
the 1980s.
It
is
GNP
averaged approximately 19 percent during the
projected to reach a postwar high of 25
1
percent
in fiscal
earlier
1991 including spending
,
situation The share declines to 19.7 percent by 1996, based on budget projections. Receipts were equal
and are projected to rise to 1 9.4 percent in the current fiscal year and to 20 percent by 1996.
postwar years, then rose
to
to 19.1
to
23
deal with the savings and loan
percent of
GNP
in fiscal
1990,
21
FEDERAL FISCAL OPERATIONS
INTRODUCTION
Background
collections.
Section 114 of the Budget and Accounting Procedures Act of
(31 use. 3513a) requires the Secretary of the Treasury to
prepare reports on the financial operations of the U.S. Government.
following major categories: (1) budget receipts and (2) offsetting
collections. Budget receipts are collections from the public that result
1950
three Federal fiscal operations (FFO) tables are
published quarterly and cover 5 years of data, estimates for 2 years,
detail for 13 months, and fiscal year-to-date data. The tables are
designed to provide a summary of data relating to Federal fiscal
operations reported by Federal entities and disbursing officers, and
daily reports from the Federal Reserve banks. These reports detail
accounting transactions affecting receipts and outlays of the Federal
Government and off-budget Federal entities, and their related effect
on the assets and liabilities of the U.S. Government. Data used in the
preparation of tables FFO-1, FFO-2, and FFO-3 is derived from the
Monthly Treasury Statement of Receipts and Outlays of the United
The
first
States Government.
Budget authority usually takes the form of "appropriations"
which permit obligations to be incurred and payments to be made.
Most appropriations for current operations are made available for
obligation only during a specified fiscal year (annual appropriations).
Some are for a specified longer period (multiple-year appropriations).
Others, including most of those for construction, some for research,
and many for trust funds, are made available for obligation until the
amount appropriated has been expended or until the objectives have
been attained (no-year appropriations).
Budget authority can be made available by Congress for
and disbursement during a fiscal year from a succeeding
year's appropriations (advance funding). For many education
programs. Congress provides forvtrard funding-budget authority
made available for obligation in one fiscal year for the financing of
ongoing grant programs during the succeeding fiscal year. When
advantageous to the Federal Government, an appropriation is
provided by Congress that will become available 1 year or more
beyond the fiscal year for which the appropriation act is passed
(advance appropriations). Included as advance appropriations are
appropriations related to multiyear budget requests.
obligations
is made available by Congress for a
any part not obligated during that period
expires and cannot be used later. Congressional actions that extend
the availability of unobligated amounts that have expired or would
othenwise expire are known as reappropriations. The amounts
involved are counted as new budget authority in the fiscal year of the
legislation in which the reappropriation action is included, regardless
of when the amounts were originally appropriated or when they
would otherwise lapse.
When budget
authority
specific period of time,
Ouf/ays.-Obligations generally are liquidated by the issuance of
checks or the disbursement of cash; such payments are called
outlays. In lieu of issuing checks, obligations also may be liquidated
(and outlays recorded) by the accrual of interest on public issues of
Treasury debt securities (including an increase in the redemption
value of bonds outstanding); or by the issuance of bonds, debentures, notes, monetary credits, or electronic payments. Refunds of
collections generally are treated as reductions of collections, rather
than as outlays. However, payments for earned-income tax credits in
excess of tax liabilities are treated as outlays rather than as a
reduction in receipts. Outlays during a fiscal year may be for
payment
of obligations incurred
Outlays, therefore, flow
in
in prior
part from
years or
in
the
same
unexpended balances
year.
of prior
year budget authority and in part from budget authority provided for
the year in which the money is spent. Total outlays include both
budget and off-budget outlays and are stated net of offsetting
Rece/pfs.-Receipts reported
in
the tables are classified into the
from the exercise of the Government's sovereign or governmental
powers, excluding receipts offset against outlays. These collections,
also called governmental receipts, consist mainly of tax receipts
(including social insurance taxes), receipts from court fines, certain
licenses, and deposits of earnings by the Federal Reserve System.
Refunds of receipts are treated as deductions from gross receipts.
Offsetting collections are from other
Government accounts
or
the public that are of a business-type or market-oriented nature.
They are classified into two major categories: (1 ) collections credited
or fund accounts, and (2) offsetting receipts (i.e.,
in receipt accounts). Collections credited to
appropriation or fund accounts normally can be used without
appropriation action by Congress. These occur in two instances: (1)
when authorized by law, amounts collected for materials or services
are treated as reimbursements to appropriations and (2) in the three
to appropriations
amounts deposited
types of revolving funds (public enterprise, intragovernmental, and
trust); collections are netted against spending, and outlays are
reported as the net amount.
Offsetting receipts in receipt accounts cannot be used without
being appropriated. They are subdivided into two categories: (1)
proprietary receipts-these collections are from the public and they
are offset against outlays by agency and by function, and (2)
intragovernmental funds-these are payments into receipt accounts
from governmental appropriation or fund accounts. They finance
operations within and between Government agencies and are
credited with collections from other Government accounts. The
transactions may be intrabudgetary when the payment and receipt
both occur within the budget or from receipts from off-budget Federal
entities in those cases where payment is made by a Federal entity
whose budget authority and outlays are excluded from the budget
totals.
subdivided
Into
three
transactions
are
Intrabudgetary
categories: (1) interfund transactions, where the payments are from
one fund group (either Federal funds or trust funds) to a receipt
account in the other fund group; (2) Federal intrafund transactions,
where the payments and receipts both occur within the Federal fund
group; and (3) trust intrafund transactions, where the payments and
receipts both occur within the trust fund group.
deducted from budget authority
by subfunction, or by agency. There are four
receipts, however, that are deducted from budget totals as
Offsetting receipts are generally
and outlays by
function,
types of
undistributed offsetting receipts. They are: (1) agencies' payments
(including payments by off-budget Federal entities) as employers
into employees retirement funds, (2) interest received by trust funds,
(3) rents and royalties on the Outer Continental Shelf lands, and (4)
other interest (i.e., interest collected on Outer Continental Shelf
money
in
deposit funds
when such money
is
transferred into the
budget).
Off-budget Federal entities.-The Federal Government has used
the unified budget concept as the foundation for its budgetary
analysis and presentation since 1969. This concept calls for the
budget to include all of the Government's fiscal transactions with the
however, various laws have t>een enacted
under which several Federal entities have been removed from the
budget or created outside the budget. Other laws have moved
certain off-budget Federal entities onfo the budget. Under current
law, the off-budget Federal entities consist of the two Social
public. Starting in 1971,
22
FEDERAL FISCAL OPERATIONS
Security trust funds, Federal old-age
Federal disability insurance.
The off-budget Federal
and
entities
survivors insurance
are
federally
and
owned and
transactions are excluded from tfie budget totals
under provisions of law. Wfien an entity is off-budget, its receipts,
outlays, and surplus or deficit are not included in budget receipts,
budget outlays, or the budget deficit; its budget authority is not
controlled, but
and net miscellaneous
receipts by source.
Table FFO-3.-On-budgct and Off-budget Outlays by Agency
tfieir
Congress
[generally]
in
obligate the
is
[usually]
provides budget authority which
the form of appropriations, then Federal agencies
Government funds to make outlays. The amounts in this
a breakdown of on-budget and off-budget outlays by
the totals of budget authority for the budget; and its
receipts, outlays, and surplus or deficit ordinarily are not subject to
the targets set by the congressional budget resolution.
table represent
Nevertheless, the Balanced Budget and Emergency Deficit
Control Act of 1985 (commonly known as tfie Gramm-RudmanHollings Act) included the off-budget surplus or deficit in calculating
the deficit targets under that act and in calculating the excess deficit
Table FFO-4.--Suminary of Internal Revenue Collections by States and
purposes of that act. Partly because of this reason, attention has
focused on the total receipts, outlays, and deficit of the Federal
Government instead of the on-budget amounts alone.
classified by States
included
in
for
Table FFO-l.--Summary of Fiscal Operations
This table summarizes the amount of total receipts, total
outlays, total surplus or deficit, transactions in Federal securities and
monetary
assets,
and transactions and balances
in
Treasury
agency.
Other Areas
This annual table provides data on internal revenue collections
and other areas and by type of tax. The amounts
reported are for collections made in a fiscal year beginning in
October and ending the following September.
Fiscal year collections span several tax liability years because
they consist of prepayments (e.g., estimated tax payments and taxes
withheld by employers for individual income and Social Security
taxes), of payments made with tax returns, and of subsequent
payments made after tax returns are due or are filed (e.g., payments
with delinquent returns or on delinquent accounts).
operating cash.
also important to note that these data do not necessarily
Federal tax burden of individual States. The amounts are
reported based on the primary filing address furnished by each
taxpayer or reporting entity. For multistate corporations, this address
It
is
reflect the
Table FFO-2.--On-budget and Off-budget Receipts by Source
Budget receipts are taxes and other collections from the public
from the exercise of the Government's sovereign or
governmental powers. The amounts in this table represent income
that result
taxes, social insurance taxes, net contributions for other insurance
and retirement, excise taxes, estate and gift taxes, customs duties,
may reflect only the State where such a corporation reported its
taxes from a principal office rather than other States where income
was earned or where individual income and Social Security taxes
were withheld. In addition, an individual may reside in one State and
work
in
another State.
23
FEDERAL FISCAL OPERATIONS
Budget Results for the Second Quarter, Fiscal 1991
Summary
The Federal budget was
in deficit by $65.3 billion in the
1991, compared with a deficit of
$80.2 billion in the corresponding quarter a year earlier.
Cash contributions in support of the Middle-East effort of
approximately $23 billion helped hold down the deficit in the
latest quarter, which also benefited from an unusual timing of
payments which shifted about $5-1/2 billion of outlays into
the prior quarter. For the first 6 months of the current fiscal
year, the deficit of $151.6 billion was little changed from the
$150.8 billion of a year earlier. Cash contributions in support
of Middle-East operations totaled about $27 billion in the
period and helped narrow the deficit.
(Earlier, such contributions had been carried as
and had been reported as such in the material in the
Treasury Bulletin for March 1991.) Of course, operations in
the Middle East required a stepup in actual defense
spending, and outlays under the Defense Operations and
Maintenance account rose in the quarter by 21 percent
(more than $4-1/2 billion) from a year earlier. However, the
bulk of the purchases associated with the effort will probably
occur over an extended period of time as materials and
supplies expended during the war are replaced.
Receipts increased from a year earlier by a narrow 1.6
percent in the second quarter of the current fiscal year.
Some of that weakness can be attributed to the downturn in
overall economic activity that extended through the quarter.
Also, changing patterns in the timing of tax payments may
have caused the shift of some receipts into the prior quarter.
For the first 6 months of the fiscal year, receipts of $482.6
billion were up by 5.3 percent from the corresponding
spending in support of savings and loans and commercial
banks. Among major functional budget categories recording
sizable increases, net interest payments rose by 10 percent,
while the impact of softness in the economy was evident in a
jump of 21 percent in spending under the health function,
including Medicaid, and an increase of 12 percent in outlays
second quarter
months
of fiscal
of fiscal
1
counts.
receipts
Also contributing to a decline in total outlays in the
quarter from a year earlier was reduced deposit insurance
for
income
security,
including
unemployment
insurance
benefits.
990.
6 months of the fiscal year, outlays of $634.3
4.1 percent from a year earlier. Excluding
contributions to the Middle-East effort, the increase is 8.6
For the
Outlays declined from a year earlier in the second fiscal
quarter. Along with a shift in the timing of spending, that
reflected contributions to the Middle-East effort which are
treated as negative defense spending in the budget ac-
Pn
billion
first
were up
percent.
millions]
January -March
Actual fiscal
Budget estimates
year to date
(February 1991)
full fiscal
Total on-tNJdgel
and off-budget
results:
$233,175
Total receipts
On-budget receipts
Off-budget receipts
Total outlays
On-budget outlays
Off-budget outlays
Total surplus
()
or deficit
(-)
On-budget surplus
(+) or deficit
(-)
Off-budget surplus
(+) or deficit
(-)
Mearw
of financing:
Borrowing from
Reduction
Otfier
ttie
public
of operating casfi,
increase
(-)
.
means
Total on-budget
and off-budget financing
.
65.332
151.639
1991
24
FEDERAL FISCAL OPERATIONS
First-Quarter Receipts
The following capsule analysis of budget receipts, by source, for the first quarter of fiscal 1991 supplements
data earlier reported in the winter Issuj of the Treasury Bulletin. At the time of that issue's release, not enough
data was available to analyze adequately collections for the quarter.
fiscal
Individual income taxes.~lndividual income tax receipts
were $114.3 billion for the first quarter of fiscal 1991. This
represents an increase of $6.9 billion over the comparable
quarter for fiscal 1990. Withheld receipts were up $7.2 billion
Nonwithheld receipts increased $0.2 billion
over the comparable quarter of fiscal 1990, while refunds
increased by $0.4 billion.
for this period.
Corporate income taxes.--Net corporate receipts
quarter of fiscal 1991 totaled $25.4 billion. This
billion higher than the first quarter of fiscal 1990.
first
billion is
comprised of $3.5 billion more in estimated and final
and $0.6 billion less in refunds paid to
corporations.
Employment taxes and contributions.-Employment
taxes and contribution receipts for the October-December
1990 quarter were $81.3 billion, an increase of $8.6 billion
over the comparable period for the prior year. Receipts to the
old-age and survivors insurance trust fund increased by $5.9
billion during this period. Receipts to the disability insurance
trust fund were up $1.2 billion, while receipts to the hospital
insurance trust fund were up $1 .3 billion during this period.
Unemployment insurance.--Unemployment
receipts for
insurance
the October-December 1990 quarter were $3.4
compared
with $3.1
billion for
quarter of fiscal 1990. The growth in contributions
flat over the next few years as the number of
the
first
will
remain
employees covered by the Federal employees' retirement
system (FERS) grows slowly relative to those covered under
the civil service retirement system (GSRS).
for the
was $2.9
The $2.9
payments
billion,
Contributions for other insurance and retirement.-Contributions for other retirement were $1.1 billion for the
first quarter of fiscal 1991. This represents no change from
the comparable prior
year quarter. State deposits declined slightly as a result of
the decrease in the average State unemployment insurance
tax rate. Federal Unemployment Tax ^ct receipts increased
$0.5 billion over the same quarter of fiscal 1990. However,
this increase was mostly due to accounting adjustments.
receipts
Excise
taxes.-Excise
tax
for
the
October-December 1990 quailer were $9 billion, compared
with $8.6 billion for the comparable quarter of fiscal 1990.
The increase over the prior year level is the net result of a
2-percent increase in gross receipts and a sharp decline in
refunds. The decline in refunds was the consequence of a
1989 change in the method of collecting fuel tax and other
factors.
Estate and gift taxes.-Estate and gift tax receipts were
$2.7 billion in the October-December quarter of 1990. This
represents an increase of $0.3 billion over the same quarter
in the previous year.
Customs duties.—Customs receipts, net of refunds,
were $4.2 billion for the first quarter of fiscal 1991. This is a
decrease of $0.04 billion from the comparable prior year
quarter and is due to a decrease in imports.
Miscellaneous receipts.-Net miscellaneous receipts
the
first
quarter of fiscal 1991 increased by $0.9
the comparable prior year quarter to $8.2
billion.
for
from
Deposits of
billion
Federal Reserve earnings increased by $0.6 billion, while net
other miscellaneous receipts increased by $0.3 billion.
Rnt-Ouailer Hccal 1991 Net Budget Receipts, by Source
[In billions of dollarsl
25
FEDERAL FISCAL OPERATIONS
Table FFO-1 .--Summary of Fiscal Operations
[In
millions of dollars. Soufce:
Monthly Treasury Slalement
ot
Recepis and Outlays
ol Ihe
Uniled Stales
Govemmeni]
Means
Total on-budget and oft-budget results
Fiscal year
or
month
Total
On-budget
Oft-budget
receipts
receipts
receipts
Total
outlays
o( financing
-net transactions
On-budget
Ott-budget
Total
On-budget
OH-budgel
outlays
outlays
surplus
or
surplus
or
surplus
Borrowing from the
public-Federal
or
securities
deficit
deficit
deficit
(-)
(-)
()
Public
debt
securities
(1)
1986
t
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
26
FEDERAL FISCAL OPERATIONS
MONTHLY RECEIPTS AND OUTLAYS
FISCAL YEAR 1991
O '90
Orirbudget Receipts
Off-budget Receipts
On-biidget Outlays
bfr-lJudget"but"iays
1
27
FEDERAL FISCAL OPERATIONS
Table FF0-2.--0n-budget and Off-budget Receipts by Source
[In
millions of dollars. Source: Monlhly Treasury
Slatement of Recelpls and Oullays ot Ihe Unlled Stales Governmenl]
Income taxes
Social insurance
taxes and contributions
Individual
Fiscal year
or montfi
Corporation
Net
income
Withheld
Other
Refunds
Net
Gross
Refunds
Net
Errployment taxes and contributions
taxes
Old-age,
disability,
and
hospital insurance
Gross
19861
19871
19881
19891
1990
314.803
322.463
341.435
361.387
390.480
1991
(Est.)
1992
(Est.)
n.a.
1990 -Ma;
Apr
June
31.323
27.855
32.548
31.469
July
32.211
Aug
34.610
30.806
37.777
27,505
44.560
29,390
32,737
l^ay
Sept
Oct
Nov
Dec
1991 -Jan
Feb
Mat
Fiscal1991 todate
n.a.
X,478
202.447
106.030
Refunds
Net
28
FEDERAL FISCAL OPERATIONS
Table FF0-2.--0n-budget and Off-budget Receipts by Source-Continued
29
FEDERAL FISCAL OPERATIONS
BUDGET RECEIPTS BY SOURCE THROUGH SECOND
QUARTER OF FISCAL YEARS 1990 AND 1991
Source: Monthly Treasury Statement of Receipts and Outlays
of the
United States Government
210
195
I
180
-
-.
n
165
-
150
-
135
-
120
-
105
-
90
-
75
-
60
-
45
-
30
-
B
i
I
I
i
o
n
s
f
D
I
I
a
r
s
15 -
Individual
Income
Corp. income
Social Insurance
Excise
Estate and Gift
Customs Duties
TAXES AND OTHER RECEIPTS
Misc. Receipts
30
FEDERAL FISCAL OPERATIONS
Table FF0-3.--0n-budget and Off-budget Outlays by Agency
[In
Fiscal year
or nronth
millions ol dollars. Source: Monthly Treasury
Slatement of Receipts and Outlays
Legis-
The
Executive
Funds ap-
Agricul-
lative
iudi-
ciary
Office
of the
propriated
to the
President
ture
branch
President
Department
of The
Commerce
United Slates Government]
31
FEDERAL FISCAL OPERATIONS
Table FF0-3.--0n-budget and Off-budget Outlays by Agency-Continued
[In
millions ot dollars]
.
32
FEDERAL OBLIGATIONS
order, but the order itself usually
are the basis on which the use of funds is
the Federal Government, They are recorded at the point
at which the Government makes a firm commitment to acquire goods
or services and are the first of the four key events-order, delivery,
"Obligations"
controlled
private
in
causes immediate pressure on
the
economy.
Obligations are classified according to a uniform set of
categories based upon the nature of the transaction without regard to
All payments for salaries and wages, for
its ultimate purpose.
example, are reported as personnel compensation, whether the
personal services are used in current operations or in the construc-
payment, and consumption--which characterize the acquisition and
use of resources. In general, they consist of orders placed, contracts
awarded, services received, and similar transactions requiring the
disbursement of money.
tion of capital items.
The
point
in
obligational stage of
gauging the impact
Government transactions
of
a strategic
the Government's operations on the
is
Federal agencies often do business with one another; in doing
agency records obligations, and the "performing"
agency records reimbursements. In table FO-1, obligations incurred
within the Government are distinguished from those incurred outside
the Government. Table FO-2 shows only those incurred outside
frequently represents for business firms
economy, since
the Government commitment which stimulates business investment,
including inventory purchases and employment of labor. Disbursements may not occur for months after the Government places Its
national
so, the "buying"
it
Table FO-1. --Gross Obligations Incurred Within and Outside the Federal Government
by Object Class, as of Dec. 31, 1990
[In
millions ot dollars. Source:
Standard Form 225. Report on Obligalions. trom agencies]
Gross obligations incurred
Object class
Total
Outside
Peraonal services and benefits:
38,070
11,806
241
38,070
Personnel compensation
Personnel benetils
Benelils lor former personnel
S,86S
2,941
241
Contractual services arxJ supplies:
Travel and transportation of persons
Transportation of things
Rent, communications, and utilities
Printing and reproduction
Other services
Supplies and materials
.
174
525
1.430
2.442
4,911
17.597
1,220
134
20.629
8.291
65,059
25,888
13.646
3.367
8.187
760
34
27
14.406
3.401
8.214
59.721
8.595
117.859
70.054
28.436
68.316
117.888
98.490
1,256
1,917
3,691
.
.
244
44.430
378
Acquisition of capital assets:
Equipment
Lands and structures
investments and loans
Grants arKJ fixed charges:
Grants, subsidies, and contributions
Insurance claims and indemnities
Interest and dividends
.
.
.
29
16
-16
Refunds
Other:
Unvouchered
Undistributed U.S. obligations
Gross obligations incurred
^
22
1
45,033
1,496
23
46.529
428.260
'
For Federal budget presentation a concept of "net obligations incurred" is generally used.
This concept eliminates transactions writhin the Government and revenue and reimbursements from the public which by statute may be used by Government agencies without
appropriation action by the Congress. Summary figures on this basis follow. {Data are on
the basis of Reports on Obligations presentation and therefore may differ somewhat from
the Budget ot the U.S. Government.)
Gross obligations incurred (as above)
Deduct:
Advances, reimbursements, other income,
Offsetting receipts
Net obligations incurred
etc.
-97.275
-80,188
33
FEDERAL OBLIGATIONS
Table FO-2.--Gross Obligations Incurred Outside the Federal Government by
Department or Agency, as of Dec. 31, 1990
pn millions
of dollars.
Source: Standard Form 225, Report on Obligaions. from agencies]
Personal services and benefits
Classification
Contractual services and supplies
34
FEDERAL OBLIGATIONS
Table FO-2.--Gross Obligations Incurred Outside the Federal Government by
Department or Agency, as of Dec. 31, I990--Continued
[In
millions of dollars]
Grants and fixed charges
Otfier
Acx^uisltion of
capital assets
Classification
Equip-
ment
Invest-
Grants,
ments
and
subsidies,
Insurance
claims
and
struc-
and con-
and indem-
dividends
tures
loans
tributions
nities
Lands
and
Interest
Refunds
Un-
—
35
FEDERAL OBLIGATIONS
GROSS FEDERAL OBLIGATIONS AS OF DEC.
31,
1990
Personal Services & Benefits
Outside Government
Contraclual Services
&
Supplies
Within Government
Acquisition of Capital Assets
.'-.-
Grants & Fixed Cfiarges
vv.-.j:.h-t>-.r4-v-7.t'v>^-^.?
Other
I
I
I
I
I
I
I
50
I
I
——
""
I
100
'
I
200
150
$ Billions
GROSS FEDERAL OBLIGATIONS INCURRED
OUTSIDE THE FEDERAL GOVERNMENT
As
of Dec. 31,
1990
Acquisition of Capital Asseli
6%
itractual
Services artd Supplies
16%
'ersonal Services
10%
Grants and Fixed Chargi
58%
and Benefits
I
I
I
250
36
ACCOUNT OF THE
U.S.
SOURCE AND AVAILABIUTY OF THE BALANCE
The operating cash of the Treasury is maintained in Treasury's
accounts with the Federal Reserve banks and branches and in tax
and loan accounts. Major information sources include the Daily
Balance Wire received from the Federal Reserve banks and
branches, and electronic transfers through the Letter of Credit
Payment, Fedline Payment, and Fedvifire Deposit Systems. As the
balances in the accounts at the Federal Reserve banks become
depleted, they are restored by calling in (withdrawing) funds from
thousands of financial institutions throughout the country authorized
to maintain tax and loan accounts.
Law 95-147, the Treasury implemented
1978, to invest a portion of its operating cash
in obligations of depositaries maintaining tax and loan accounts.
Under the Treasury tax and loan investment program, depositary
financial institutions select the manner in which they will participate
in the program. Depositaries that wish to retain funds deposited in
their tax and loan accounts in interest-bearing obligations participate
under the Note Option; depositaries that wish to remit the funds to
the Treasury's account at Federal Reserve banks participate under
the Remittance Option.
Under authority
a program on Nov.
of Public
IN
TREASURY
THE ACCOUNT OF THE
business under a uniform
U.S.
TREASURY
procedure applicable
to
all
financial
whereby customers of financial institutions deposit with
them tax payments and funds for the purchase of Government
securities. In most cases the transaction involves merely the transfer
of funds from a customer's account to the tax and loan account in the
institutions
same
financial institution.
On
occasion, to the extent authorized by
the Treasury, financial institutions are permitted to deposit in these
accounts proceeds from subscriptions to public debt securities
entered for their own account as well as for the accounts of their
customers. Also, Treasury can direct the Federal Reserve banks to
invest excess funds in these accounts directly from its account at the
Federal Reserve banks.
2,
Deposits to tax and loan accounts occur
in
The tax and loan system permits the Treasury to collect funds
through financial institutions and to leave the funds in Note Option
depositaries and in the financial communities in which they arise until
such time as the Treasury needs the funds for its operations. In this
way the Treasury is able to neutralize the effect of its fluctuating
financial institution reserves and the
operations on Note Option
economy.
the normal course of
Table UST-1. -Elements of Changes
[In
in
Federal Reserve and Tax and Loan Note Account Balances
millions of dollars. Source: Financial
Management
Servlca]
37
ACCOUNT OF THE
Table UST-1 .--Elements of Changes
in
U.S.
TREASURY
Federal Reserve and Tax and Loan Note Account Balances-Con.
[In
millions of dollars]
Balances
End
ot period
Fiscal year
Federal
Tax and
month
Reserve
loan note
or
accounts
During period
High
Average
Federal
Tax and
Federal
Tax and
Federal
Reserve
loan note
Reserve
loan note
Reserve
accounts
1986
1987
1988
1989
1990
1990- Mar
Apr.
.
.
May.
June.
July
.
Aug
.
Sept.
Oct..
Nov
Dec
.
.
1991 -Jan..
Feb..
Mar..
7.514
9.120"
13.023
13,452
7.638
23.870
27,316
31,375
19,087
29,688
27,521
32,517
25,444
16,758
4.832
5.205
4,426
5,470
6,369
4,453
7,638
7,607
5.495
8.960
27.810
23,898
10,922
13,634
34,091
9,276
8,303
5,667
8,230
6,626
6,937
7,222
16,758
8,407
7,555
11,375
27,810
23,898
10,922
*
29,148
18,387
17,869
32,617
27,828
17,406
23,228
35,006
36,577
21,078
19,101
25,139
28,553
32,188
32,214
37,436
18,372
34,091
34,576
32,719
29,148
30,722
37,436
30,940
20,695
32,818
35,284
36,577
31,809
Less than $500,000.
Represents transfers from tax and loan note accounts, proceeds from sales of securites
Government account series, and taxes.
Represents checks paid, wire transfer payments, drawdowns on letters of credit,
redemptions of securities other than Government account series, and investment (transfer)
of excess funds out of this account to the tax and loan note accounts.
^ Special depositaries are permitted to make payment in the form of a deposit credit (or the
purchase price of U.S. Government securfties purchased tjy them for their own account, or
for the account of their customers who enter subsaiptlons through them, when this method
of payment is permitted under the terms of the circulars inviting subscriptions to the issues.
Effective Oct. 1 1 989. public debt securities. Including U.S. savings bonds, will no longer be
'
other than
,
settled through the tax
and loan note accounts.
accounts
1,518
851
2,698
1,980
4,712
1,980
3,817
3,743
4,649
4,453
3,919
3,658
3,272
3,394
3,001
7,391
3,713
3,754
2,436
255
183
5,097
376
9,276
183
2,722
6,792
15,129
4,028
10.685
3,781
10,787
32,551
15,868
Tax and
loan note
accounts
4,546
6,584
5,028
7,328
5,424
12.208
18.485
19,718
19,030
16,529
5.349
4,351
5,054
12,622
14,268
21,589
15.245
11.352
19,534
25,475
17,254
14,702
17,224
23,984
5,078
5,408
5,415
6,358
5,544
5,543
5,809
8,702
11,221
6,406
35,011
22,840
Includes U.S. savings bonds, savings notes, retirement plan and tax and loss bonds.
U.S. savings notes first offered for sale as of May 1, 1967, and were discontinued after
June 30, 1970. Retirement plan bonds first offered tor sale as of Jan. 1,1963; tax and loss
bonds first issued in March 1968.
Taxes eligble for credit consist of those deposited by taxpayers in the tax and loan
depositaries, as follows: Withheld income taxes beginning March 1948; taxes on errployers
and empbyees under the Federal Insurance Contributions Act beginning January 1950, and
under the Railroad Retirement Tax Act l)eglnning July 1961; a number of excise taxes
t)eglnnlng July 1953; estimated corporatk>n income taxes beginning April 1967; ail
corporation income taxes due on or after Mar. 15. 1968; FUTA taxes beginning April 1970,
and individual estinnated Income taxes beginning October 1988.
38
FEDERAL DEBT
INTRODUCTION
Treasury securities (i.e., public debt securities) comprise most of
the Federal debt, with securities issued by other Federal agencies
accounting for the remainder. In addition to the data on the Federal
debt presented in the tables in this section of the quarterly Treasury
Bulletin, the Treasury publishes detailed data on the public debt
agency borrowing from the Treasury, which is presented in the
Monthly Treasury Statement of Receipts and Outlays of the United
eral
States Government. The Government-sponsored entitles, whose
securities are presented in the memorandum section of table FD-4,
are not agencies of the Federal Government, nor are their securities
presented in table FD-4 guaranteed by the Federal Government.
outstanding in the Monthly Statement of the Public Debt of the
United States and on agency securities and the investments of Federal Government accounts in Federal securities in the Monthly
Treasury Statement of Receipts and Outlays of the United States
Table
Government.
Marketable Interest-Bearing Public Debt Held by Private Investors
Table FD-1.--Summary of Federal Debt
The Federal debt outstanding is summarized as to holdings of
and agency securities by the public, which includes the
Federal Reserve, and by Federal agencies, largely the social security and other Federal retirement trust funds. Greater detail on hold-
public debt
ings of Federal securities by particular classes of investors is presented In the ownership tables, OFS-1 and OFS-2, of the Treasury
Bulletin.
FD-5.--Maturity
Distribution
and
Average
Length
of
The average maturity of the privately held marketable Treasury
debt has Increased gradually since it hit a trough of 2 years, 5
months, in December 1975. In March 1971, the Congress enacted a
limited exception to the 4-1/4-percent interest rate ceiling on Treasury bonds that permitted the Treasury to offer securities maturing in
more than 7 years at current market rates of interest for the first time
since 1965. The exception to the 4-1/4-percent interest rate celling
had been expanded since 1971 to authorize the Treasury to continue
to issue long-term securities. The 4-1/4-percent interest rate ceiling
on Treasury bonds was repealed on November 10, 1988. The volume of privately held Treasury marketable securities by maturity
class reflects the remaining period to maturity of Treasury bills,
and bonds, and the average length comprises an average of
remaining periods to maturity, weighted by the amount of each security held by private investors (i.e., excludes the Government accounts and Federal Reserve banks).
notes,
Table FD-2.--Interest-Bearing Public Debt
marketable and nonmarketable Treasury
Interest-bearing
securities are presented as to type of security. The difference between Interest-bearing and total public debt securities reflects outstanding matured Treasury securities on which interest has ceased
The Federal Financing Bank (FFB) Is under the supervision of the Treasury, and FFB securities shown in this table are held
by a U.S. Government account.
to accrue.
Table FD-6.--Debt Subject to Statutory Limitation
Table FD-3.--Government Account Series
The statutory debt celling is compared with the outstanding debt
subject to limit. The other debt category includes certain Federal
debt that the Congress has designated by statute to be subject to the
debt celling. The changes in non-interest-bearing debt shown in the
last
Nonmarketable Treasury securities held by U.S. Government
accounts are summarized as to issues to particular funds within the
Government. Many of the funds invest in par-value special series
nonmarketables at statutorily determined interest rates, while others
whose statutes do not prescribe an interest rate formula invest in
market-based special Treasury securities whose terms mirror the
terms of marketable Treasury securities.
Table
FD-4."Intercst-Bearing
Securities
Issued
by
Government
Agencies
Federal agency borrowing has been declining in recent years,
because the Federal Financing Bank has been providing
financing to other Federal agencies. This table does not cover Fedin
part
column
reflect maturities of
Treasury securities on nonbusiness
days, such as weekends and holidays. In that event. Treasury
securities are redeemed on the first business day following a non-
business day.
Table FD-T.-Treasury Holdings of Securities Issued by Government
Corporations and Other Agencies
Certain Federal agencies are authorized by statute to borrow
from the Treasury, largely to finance direct loan programs. In addition, agencies such as the Bonneville Power Administration are
authorized to borrow from the Treasury to finance capital projects.
The Treasury finances such loans to the Federal agencies with is-
sues of public debt securities.
39
FEDERAL DEBT
Table FD-1 .--Summary of Federal Debt
[In millions ol dollars.
Source: Monthly Treasury SlalemenI
ol
Receipts and Outlays o1 Ihe United Stales Governmenl]
40
FEDERAL DEBT
Table FD-3.--Government Account Series
In
millions ot dollars. Source:
Monlhly Slalement
of the Public
Debt
of Ihe Uniled Slates]
41
FEDERAL DEBT
Table FD-4.-lnterest-Bearing Securities Issued by Government Agencies
n millions ot dollars. Source: Monthly Treasury Stalemenl ot Receipts and Outlays ol the United Slates
Governmenl and
Financial
Management
Service]
42
FEDERAL DEBT
Table FD-5.--Maturity Distribution and Average Length of IVIarketabie
Interest-Bearing Public Debt Held by Private Investors
[In
End of
millions of dollars. Source: Office ol
Market Finance]
43
FEDERAL DEBT
°i5
44
FEDERAL DEBT
°5
E o
QO
45
FEDERAL DEBT
Table FD-7.--Treasury Holdings of Securities Issued by Government Corporations and Other Agencies
[In millions of dollars.
End of
fiscal
or
year
month
Total
Source: Monthly Treasury SlalemenI
ol
Receipts and Oullays o( the United Slates Government]
46
TREASURY FINANCING OPERATIONS, JANUARY-MARCH
JANUARY
Auction of
7- Year
1991
were accepted in full at the
average yield, 7.09 percent, price 99.835. These totaled
$1,329 million. Competitive tenders accepted from private
percent. Noncompetitive tenders
Notes
investors totaled $1
1
,290 million.
On January
2 the Treasury announced that it would auction $8,500 million of 7-year notes to refund $5,1 15 million of
notes maturing January 15, 1991, and to raise about $3,375
million of new cash. The notes offered were Treasury notes
of Series E-1998, dated January 15, 1991, due January 15,
1998, with interest payable on July 15 and January 15 until
maturity. An interest rate of 7-7/8 percent was set after the
determination as to which tenders were accepted on a yield
auction basis.
Tenders
for the notes were received prior to 12 noon
noncompetitive tenders and prior to 1 p.m. EST for
competitive tenders on January 9, 1 991 and totaled $23,001
million, of which $8,544 million was accepted at yields
ranging from 7.94 percent, price 99.656, up to 7.95 percent,
price 99.603. Tenders at the high yield were allotted 45
percent. Noncompetitive tenders were accepted in full at the
average yield, 7.95 percent, price 99.603. These totaled
$595 million. Competitive tenders accepted from private
investors totaled $7,949 million.
EST
for
In addition to the $12,619 million of tenders accepted in
the auction process, $690 million was accepted from Federal
Reserve banks as agents for foreign and international
monetary authorities, and $729 million was accepted from
Federal Reserve banks for their own account.
The notes of Series K-1996 were dated January 31,
1991, due January 31, 1996, with interest payable on July 31
and January 31 until maturity. An interest rate of 7-1/2
percent was set after the determination as to which tenders
were accepted on a yield auction basis.
,
Treasury discontinued issuing 4-year
notes after the December 19, 1990, sale.
Tenders
for the notes were received prior to 12 noon
noncompetitive fenders and prior to 1 p.m. EST for
competitive tenders on January 24, and totaled $25,427
million, of which $9,035 million was accepted at yields
ranging from 7.60 percent, price 99.590, up to 7.63 percent,
price 99.468. Tenders at the high yield were allotted 23
percent. Noncompetitive tenders were accepted in full at the
average yield, 7.62 percent, price 99.509. These totaled
$543 million. Competitive tenders accepted from private investors totaled $8,492 million.
EST
for
In addition to the $9,035 million of tenders accepted in
the auction process, $180 million was accepted from Federal
Reserve banks as agents for foreign and international
monetary authorities, and $200 million was accepted from
Federal Reserve banks for their own account.
addition to the $8,544 million of tenders accepted
In
the auction process,
$165
million
in
was accepted from Federal
Reserve banks as agents for foreign and international
monetary authorities, and $397 million was accepted from
Federal Reserve banks for their own account.
52-Week
On January 4
tenders were invited for approximately
364-day Treasury bills to be dated
January 17, 1991, and to mature January 16, 1992. The
issue was to refund $9,554 million of maturing 52-week bills
and to raise about $2,200 million of new cash. Tenders were
$1
Auction of 2- Year and 5- Year Notes
On January
16 the Treasury announced that it would
auction $12,500 million of 2-year notes of Series W-1993
and $9,000 million of 5-year notes of Series K-1996 to refund
$10,262 million of securities maturing January 31, 1991, and
to raise about $1 1 ,250 million of new cash.
The notes of Series W-1993 were dated January 31,
1 991
due January 31 1 993, with interest payable on July 31
and January 31 until maturity. An interest rate of 7 percent
was set after the determination as to which tenders were
,
Tenders
for the notes were received prior to 12 noon
noncompetitive tenders and prior to 1 p.m. EST for
competitive tenders on January 23, and totaled $40,135
million, of which $12,619 million was accepted at yields
ranging from 7.08 percent, price 99.853, up to 7.09 percent,
price 99.835. Tenders at the high yield were allotted 60
for
1
,750
million
of
opened on January
10. They totaled $30,321 million, of
which $11,767 million was accepted, including $1,179 million
of noncompetitive tenders from the public and $2,730 million
of the bills issued to Federal Reserve banks for themselves
and as agents for foreign and international monetary
authorities. The average bank discount rate was 6.22
percent.
,
accepted on a yield auction basis.
EST
Bills
Change
in
Regular Quarterly Auction Cycles
On December 11, 1990, the Treasury announced that
beginning in January 1991 it would issue 5-year notes
monthly and discontinue sales of 5-year 2-month notes that
have been offered in regular quarterly auctions since
February 1980. Also, the Treasury discontinued issuing
4-year notes after the December 19, 1990, sale.
47
TREASURY FINANCING OPERATIONS, JANUARY-MARCH
FEBRUARY
February 15, 2021, with interest payable on August 15 and
February 15 until maturity. An interest rate of 7-7/8 percent
was set after the determination as to which tenders were
accepted on a yield auction basis.
February Quarterly Financing
On January 30
the Treasury announced that
it
would
auction $12,500 million of 3-year notes of Series R-1994,
$11,000 million of 10-year notes of Series A-2001, and
30-year bonds of 2021 to refund $17,335
Treasury securities maturing February 15 and to
raise about $17,175 million of new cash.
$11,000
million of
million of
The notes of Series R-1994 were dated February 15,
1991, due February 15, 1994, with interest payable on
August 15 and February 15 until maturity. An interest rate of
6-7/8 percent was set after the determination as to which
tenders were accepted on a yield auction basis.
notes were received prior to 12 noon
EST for noncompetitive tenders and prior to 1 p.m. EST for
competitive tenders on February 5, and totaled $41,483
million, of which $12,648 million was accepted at yields
ranging from 6.97 percent, price 99.747, up to 6.98 percent,
price 99.720. Tenders at the high yield were allotted 61
percent. Noncompetitive tenders were accepted in full at the
average yield, 6.98 percent, price 99.720. These totaled
$769 million. Competitive tenders accepted from private investors totaled $1 1 ,879 million.
Tenders
In
for the
addition to the $12,648 million of tenders accepted
the auction process, $1,212 million was accepted
Federal Reserve banks as agents for foreign
in
from
and
and $1,644 million was
accepted from Federal Reserve banks for their own account.
international
monetary
1991
authorities,
The notes of Series A-2001 were dated February 15,
1991, due February 15, 2001, with interest payable on
August 15 and February 15 until maturity. An interest rate of
7-3/4 percent was set after the determination as to which
tenders were accepted on a yield auction basis.
for the bonds were received prior to 12 noon
noncompetitive tenders and prior to 1 p.m. EST for
competitive tenders on February 7, and totaled $22,959
million, of which $11,012 million was accepted at yields
ranging from 7.97 percent, price 98.922, up to 7.98 percent,
price 98.810. Tenders at the high yield were allotted 87
percent. Noncompetitive tenders were accepted In full at the
average yield, 7.98 percent, price 98.810. These totaled
$223 million. Competitive tenders accepted from private investors totaled $10,789 million.
Tenders
EST
for
In addition to the $11,012 million of tenders accepted in
the auction process, $100 million was accepted from Federal
Reserve banks for their own account.
The bonds of 2021 may be held in STRIPS
minimum par amount required is $1,600,000.
form.
The
Auction of 2-Year and 5-Year Notes
On February 13 the Treasury announced that it would
auction $12,000 million of 2-year notes of Series X-1993 and
$9,000 million of 5-year notes of Series L-1996 to refund
$9,962
maturing February 28, 1991, and
about $1 1,050 million of new cash.
million of securities
to raise
The notes of Series X-1993 were dated February 28,
1991, due February 28, 1993, with interest payable on the
last calendar day of August and February until maturity. An
interest rate of 6-3/4 percent was set after the determination
as to which tenders were accepted on a yield auction basis.
for the notes were received prior to 12 noon
noncompetitive tenders and prior to 1 p.m. EST for
competitive tenders on February 20, and totaled $40,068
Tenders
notes were received prior to 12 noon
EST for noncompetitive tenders and prior to 1 p.m. EST for
competitive tenders on February 6, and totaled $28,937
Tenders
for the
which $11,014 million was accepted at yields
ranging from 7.84 percent, price 99.384, up to 7.85 percent,
price 99.316. Tenders at the high yield were allotted 67
percent. Noncompetitive tenders were accepted in full at the
average yield, 7.85 percent, price 99.316. These totaled
$380 million. Competitive tenders accepted from private investors totaled $10,634 million.
million,
In
of
addition to the $11,014 million of tenders accepted
in
was accepted from Federal
Reserve banks as agents for foreign and international
monetary authorities, and $200 million was accepted from
Federal Reserve banks for their own account.
the auction process, $85 million
The notes of Series A-2001 may be held in STRIPS form.
The minimum par amount required is $800,000.
The bonds
of
2021 were dated February 15, 1991, due
EST
for
million,
of
which $12,062
million
was accepted
at
yields
ranging from 6.85 percent, price 99.816, up to 6.87 percent,
price 99.779. Tenders at the high yield were allotted 71
percent. Noncompetitive tenders were accepted in full at the
average yield, 6.87 percent, price 99.779. These totaled
$917
million.
Competitive tenders accepted from private
1 ,145 million.
in-
vestors totaled $1
In addition to the $12,062 million of tenders accepted in
the auction process, $725 million was accepted from Federal
Reserve banks as agents for foreign and international
monetary authorities, and $900 million was accepted from
Federal Reserve banks for their own account.
The notes of Series L-1996 were dated February 28,
1991, due February 29, 19961 with interest payable on the
last calendar day of August and February until maturity. An
interest rate of 7-1/2 percent was set after the determination
as to which tenders were accepted on a yield auction basis.
48
TREASURY FINANCING OPERATIONS, JANUARY-MARCH
for the notes were received prior to 1 2 noon EST
noncompetitive tenders and prior to 1 p.m. EST for
competitive tenders on February 21, and totaled $29,186
million, of w^hich $9,040 million was accepted at yields
ranging from 7.50 percent, price 100.000, up to 7.51 percent,
price 99.959. Tenders at the high yield were allotted 54 percent. Noncompetitive tenders were accepted in full at the
average yield, 7.51 percent, price 99.959. These totaled
$344 million. Competitive tenders accepted from private in-
Tenders
for
vestors totaled $8,696 million.
In
addition to the $9,040 million of tenders accepted
the auction process,
$362
million
in
was accepted from Federal
Reserve banks as agents for foreign and international
monetary authorities, and $200 million was accepted from
Federal Reserve banks for their own account.
$1,244
Bills
On February 1 tenders were invited for approximately
$11,750 million of 364-day Treasury bills to be dated
February 14, 1991, and to mature February 13, 1992. The
issue was to refund $9,594 million of maturing 52-week bills
and to raise about $2,150 million of new cash. Tenders were
opened on February 12. They totaled $33,692 million, of
which $11,811 million was accepted, including $1,171 million
of noncompetitive tenders from the public and $3,070 million
of the bills issued to Federal Reserve banks for themselves
and as agents for foreign and international monetary
authorities.
An
additional
$717
million
was issued
to
Federal
Competitive tenders accepted from private
investors totaled $10,285 million.
In
addition to the $11,529 million of tenders accepted
in
$1,236 million was accepted from
Federal
Reserve banks as agents for foreign and
international monetary authorities, and $1,576 million was
accepted from Federal Reserve banks for their own account.
auction
the
process,
The notes of Series M-1996 were dated April 1, 1991,
due March 31, 1996, with interest payable on September 30
and March 31 until maturity. An interest rate of 7-3/4 percent
was set after the determination as to which tenders were
accepted on a yield auction basis.
for the notes were received prior to 12 noon
noncompetitive tenders and prior to 1 p.m. EST for
competitive tenders on March 27, and totaled $30,230
million, of which $8,590 million was accepted at yields
ranging from 7.80 percent, price 99.796, up to 7.81 percent,
price 99.756.
Tenders at the high yield were allotted 55
percent. Noncompetitive tenders were accepted in full at the
average yield, 7.81 percent, price 99.756. These totaled
$505 million. Competitive tenders accepted from private investors totaled $8,085 million.
Tenders
EST
52-Week
million.
1991
for
In
addition to the $8,590 million of tenders accepted
the auction process,
$162
million
in
was accepted from Federal
Reserve banks as agents for foreign and international
monetary authorities, and $300 million was accepted from
Federal Reserve banks for their own account.
Reserve banks as agents for foreign and international
monetary authorities for new cash. The average bank
discount rate
was 5.85
percent.
52-Week
Bills
On March
MARCH
Auction of 2-Year and 5-Year Notes
On March 20
the Treasury announced that it would auc$11,500 million of 2-year notes of Series Y-1993 and
$8,500 million of 5-year notes of Series M-1996 to refund
$18,826 million of Treasury notes maturing March 31 and to
raise about $1,175 million of new cash.
tion
The notes of Series Y-1993 were dated April 1, 1991,
due March 31, 1993, with interest payable on September 30
and March 31 until maturity. An interest rate of 7-1/8 percent
was set after the determination as to which tenders were
accepted on a yield auction basis.
tenders were invited for approximately
364-day Treasury bills to be dated March
14, 1991, and to mature March 12, 1992. The issue was to
refund $9,910 million of maturing 52-week bills and to raise
about $850 million of new cash. Tenders were opened on
March 7. They totaled $31,835 million, of which $10,833
$10,750
1
million of
including
million
of
was
accepted,
$813
noncompetitive tenders from the public and $2,854 million of
the bills issued to Federal Reserve banks for themselves and
as agents for foreign and international monetary authorities.
An additional $376 million was issued to Federal Reserve
banks as agents for foreign and international monetary
authorities for new cash. The average bank discount rate
was 6.06 percent.
million
Cash Management
Tenders
notes were received prior to 12 noon
EST for noncompetitive tenders and prior to 1 p.m. EST for
competitive tenders on March 26, and totaled $29,556
million, of which $11,529 million was accepted at yields
ranging from 7.13 percent, price 99.991, up to 7.15 percent,
price 99.954. Tenders at the high yield were allotted 72
percent. Noncompetitive tenders were accepted in full at the
average yield, 7.15 percent, price 99.954. These totaled
Bills
for the
On March 25
tenders were invited for approximately
15-day bills to be issued April 3, 1991,
representing an additional amount of bills dated October 18,
1990, maturing April 18, 1991. The issue was to raise new
cash. Tenders were opened on March 28. They totaled
$40,545 million, of which $13,505 million was accepted. The
average bank discount rate was 6.05 percent.
$13,500
million of
49
PUBLIC DEBT OPERATIONS
INTRODUCTION
Background
52-week bill is a reopening of the existing 52-week
low, and average yields on accepted tenders and the
Liberty Bond Act (31 U.S.C. 3101, et seq.) proSecretary of tine Treasury with broad authority to borrow
and to determine the terms and conditions of issue, conversion,
maturity, payment, and interest rate on Treasury securities. Data in
the "Public Debt Operations" section, which have been published in
the Treasury Bulletin in some form since its Inception in 1939, pertain only to marketable Treasury securities, currently bills, notes, and
bonds. Treasury bills are discount securities that mature In 1 year or
less, while Treasury notes and bonds have semiannual interest payments. New issues of Treasury notes mature in 2 to 10 years, and
bonds mature in over 10 years from the issue date. Each marketable
Treasury security is listed in the Monthly Statement of the Public
Debt of the United States.
The Second
vides
tlie
Table PDO-l.--Maturity Schedule of Interest-Bearing MarkeUble
Public Debt Securities Other than Regular Weekly and 52-Week
Treasury
All
Bills
unmatured Treasury notes and bonds are
listed in maturity
A
separate breakout is
provided for the combined holdings of the Government accounts and
Federal Reserve banks, so that the "All other Investors" category
order, beginning with the earliest maturity.
Includes
all
private holdings.
The
weekly auctions of 13- and 26-week bills and
bills every fourth week are presented in table
PDO-2. Treasury bills mature each Thursday. New issues of 13week bills are reopenlngs of 26-week bills. The 26-week bill issued
every fourth week to mature on the same Thursday as an existing
results of
high,
bids is presented, along with the dollar value of awards on a
competitive and a noncompetitive basis. The Treasury accepts noncompetitive tenders of up to $1 million in each auction of Treasury
securities in order to assure that individuals and smaller institutions
in offerings of new marketable Treasury
Noncompetitive bids are awarded at the average yield on
are able to participate
securities.
accepted competitive
bids.
Table PDO-3.-Public Offerings of MarkeUble Securities Other than
Regular Weekly Treasury
Bills
The results of auctions of marketable Treasury securities, other
than weekly bills, are listed in the chronological order of the auction
dates over approximately the most recent 2 years. This table includes notes and bonds presented in table PDO-1, 52-week bills in
table PDO-2, and data for cash management bills. Treasury offers
cash management bills from time to time to bridge temporary or
seasonal declines in the cash balance. Cash management bill
maturities generally coincide with the maturities of regular Issues of
Treasury bills.
Table PDO-4.-Allotmenls by Investor Classes for Public Marketable
A and B
Data on allotments of marketable Treasury securities by invesare presented in chronological order of the auction date for
approximately the most recent 2 years. These data have appeared in
the Treasury Bulletin since 1 956. Tenders in each Treasury auction
of marketable securities other than weekly auctions of 13- and 26week bills are tallied by the Federal Reserve banks into investor
classes described in the footnotes to the table.
tor class
auctions of 52-week
The
total
Securities, Parts
Table PDO-2."Offerings of Bills
bill.
dollar value of
5
50
PUBLIC DEBT OPERATIONS
Table PDO-1 .--Maturity Schedule of Interest-Bearing Marketable Public Debt Securities Other than
Regular Weekly and 52-Week Treasury Bills Outstanding, Mar. 31, 1991
[In
millions of dollars. Source: Monthly
Slalemenl
o1
the Public Debl ot Ihe United Slalas. and Office o( Markal Finance)
Amount
Date
of final maturity
Description
1991
12-3'8%-E note
9-1/4%-Y note
14-1/2%-A note
8-1/e%-J note
8-3/4%-Z note
8-1/4%-AB note
7-7/8%-N note
13-3/4%-F note
Apr. 15
Apr
30
May 15
May 15
May 31
Juno 30
June 30
July 15
July 31
7-3/4%-AC note
Aug. 15
Aug 1 5
Aug! 15
14-7/8%-B note
8-3/4%-T note
7-1/2%-K note
Aug
8-1/4%-AD note
31
9-1/8%-P note
8-3/8%-AE note
12-1/4%-G note
7-5/8%-AF note
14-1/4%-C note
8-1/2%-U note
6-1/2%-L note
Sept 30
Sept 30
Oct. 15
Oct. 31
Nov. 15
Nov! 15
!
.
!
Nov 15
!
!
!
Nov! 30
Dec! 31 !!!!!!!!!
Dec! 31
! . !
!
!
!
!
7-3/4%-AG note
8-1/4%-Q note
7-5/8%-AH note
Total..
1992
1 1-5/B%-D note
8-1/8%-V note
14-5/8%-A note
9-1/8%-R note
Jan. 15
Jan. 31
Feb. 15
Feb. 15
Feb 15
6-5/8%H nolo
8-1/2%-W note
7-7/8%-M note
Feb 29
Mar. 31
Mar. 31
8-1/2%-X note
1 1-3'4%-E note
8-7/8%-Y note
13-3'4%-B note
Apr. 15
Apr. 30
May 15
May 5
May 15
May 31
9%-S
1
June 30
June 30
July 15
July 31
Aug.
Aug.
Aug.
Aug.
Aug.
8%-AC
15
15.
87-92
1
15
31
30
30
Sept.
Sept.
Oct. 15
OcL 31
Nov.
Nov.
Nov.
Nov.
Dec.
Dec.
note
6-5/8%-J note
8-1/2%-Z note
8-1/4%-N note
B-3/8%-AB note
10-3/8%-F note
15
15
15
30
31
31
note
8-1/4%-K note
4-1/4% bond
7-7/B%-T note
7-1/4% bond
8-1/8%-AD note
8-3/4°/,^? note
8-1/8%^AE note
9-3/4%-G note
7-3/4%-AF note
10-1/2%-C note
8-3/8%-L note
7-3/4%-U note
7-3/a%-AG note
9-1/8%-Q note
7-1/4%-AH note
Total-
1993
Jan. 15
Jan. 31
Feb. 15
Feb. 15
Feb. 15
Feb. 15, 88-93
Feb. 15
Feb. 15
Feb. 28
Mar. 31
Apr. 15
May 15
lulay 15
May 15
June 30
8-3/4%-E note
7%-W
note
10-7/8%-A note
8-1/4%-J note
8-3/8%-S note
4%
bond
6-3/4% bond
7-7/8% bond
6-3/4%-X note
9-5/8%-N note
7-3/8%-F note
10-1/8%-B note
7-5/8%-K note
8-5/8%-T note
8-1/8%-P note
of maturities
51
PUBLIC DEBT OPERATIONS
Table PDO-1 .--Maturity Schedule of Interest-Bearing Marketable Public Debt Securities Other than
Regular Weekly and 52-Week Treasury Bills Outstanding, Mar. 31, 1991 -Continued
[In
Date
millions ol dollars]
o( final maturity
DeEcrlptlon
52
PUBLIC DEBT OPERATIONS
Table PDO-1 .--Maturity Schedule of interest-Bearing Marketable Public Debt Securities Other than
Regular Weel<iy and 52-Weel< Treasury Biiis Outstanding, Mar. 31, 1991 -Continued
millions ol dollars]
[In
Amount
of maturities
Held by
Date
of final maturity
Description
Issue date
Total
U.S. Gov't
All
accounts and
Federal Reserve banks
ottier
Investors
1996-Con.
8%-H
Oct. 15
Nov. 15
2
note
7-1/4%-D note
10/16/89
11/15/86
Total,.
7,989
20,259
126
715
7,863
19,544
107,952
4,398
103.554
116
1997
8%-D
Jan. 15
Apr. 15
note
e-1/2%-E note
2 8- 1/2%-A note
May 15
B-1/2%-F note
July 15
Aug. 15
Oct. 15
Nov. 15
8-a8%-B
note
8-3/4%-G note
2 8-7/8%-C note
2
01/1 6«0
04/16/90
05/1 5/87
07/16/90
08/15/87
10/15/90
11/15/87
Total..
1998
Jan, 15
7-7/8%-E note
Feb. 15
May 15
2
May
15.
Aug. 15
Nov. 15
Nov. 15
8-1/8%A note
29%-B note
93-98
7%
bond
29-1/4^^0 note
28-7/8%-D note
3-1/2% bond
Total..
01/15/91
7,852
7,860
9,921
223
344
8,385
9,363
8,860
9.808
271
7.736
7,637
9,577
8,114
402
213
360
8,647
9.448
62.049
1.929
60,120
8,961
53
PUBLIC DEBT OPERATIONS
Table PDO-1 .--Maturity Schedule of Interest-Bearing Marketable Public Debt Securities Other than
Regular Weekly and 52-Week Treasury Bills Outstanding, Mar. 31, 1991 -Continued
[In
millions ot dollars]
Amount
o( maturities
Held by
Date
of final maturity
Description
U.S. Gov't
All
Issue date
Total
accounts and
Federal Reserve banks
other
investors
07/05/83
10/05/83
3,501
185
147
3,316
7,113
04/05/84
07/10/84
10/30/84
3,755
4,000
8,302
183
3.572
3,989
8.193
2003-Con.
-1/8% bond
11-7/8% bond
Aug. 15
Nov. 15
11
7,260
Total
2004
May
12-:V8%bond
13-^4% bond
11-5/8%bond
15
Aug. 15
Nov. 15
2
11
109
16,057
Total
2005
May
15.
00-05
8-
1/4% bond
2 12% bond
2 10-3/4% bond
May 15
Aug. 15
05/15/75
04/02/85
07/02/85
4,224
01/15/86
4,756
4.261
2,156
64
9,270
248
2,068
4,197
9,022
Total
2006
29-3/8% bond
Feb. 15
4,756
4,756
Total
2007
Feb. 15. 02-07
Nov. 15, 02-07
7-5/8% bond
7-7/8% bond
02/15/77
11/15/77
4,234
1,495
1,539
265
5,729
Total
2.695
1.230
3,925
2008
Aug. 15. 03-08
Nov. 15, 03-08
8-3/8% bond
8-3/4%bond
08/15/78
11/15/78
2,103
5,230
754
1,656
1,349
3,574
7,333
Total
2009
May
15, 04-09
Nov. 15, 04-09
9- 1/8%
bond
10-:V8%bond
05/15/79
11/15/79
Total
4,606
788
4,201
1,026
3,818
3,175
8,807
1,814
6,993
2,494
2,987
4,736
804
1,165
1,690
1,822
3,763
2010
Feb.
May
1
5,
15,
05-1
05-10
Nov. 15, 05-10
11-3*4% bond
10% bond
12-3/4% bond
02/15/80
05/15/80
11/17/80
10,217
Total
2011
May 15,06-11
Nov. 15.06-11
13-7/8% bond
14% bond
05/15/81
11/16/81
Total
2012
Nov. 15. 07-12
10-M%bond
Total
11/15/82
973
54
PUBLIC DEBT OPERATIONS
Table PDO-1 .-Maturity Schedule of Interest-Bearing Marketable Public Debt Securities Otiierthan
Regular Weekly and 52-Week Treasury Bills Outstanding, Mar. 31, 1991 -Continued
[In
mllltons of dollars]
A/nount of maturities
Held by
Date
U.S.
of final maturity
Desalptlon
Issue date
Total
Govl
accounts and
Federal Reserve banks
All
other
Investors
2013
Aug. 15.08-13.
12% bond
Total
14.755
2.391
5.007
5.128
6.006
407
2014
May
09-14
15.
Aug. 15.09-14
Nov. 15.09-14
13-1/4% bond
12-1/2%bond
bond
2 11-3/4%
05/15/84
08/15/84
11/15/84
571
840
4.600
4.557
5.166
16.141
Total..
2015
2
Feb. 15
Aug. 15
Nov. 15
2
1-1/4% bond
10-5/8% bond
bond
1
2 9-7/8%
02/15/85
08/15/85
11/15/85
12.668
7.150
6.900
909
680
167
11,769
6,470
6,733
24.962
Total..
2016
29-1/4%bond
7- 1/4% bond
27-i/2%bond
Feb. 15
May 15
Nov. 15
2
2017
Aug.
1
5
.
2 8-3/4%
2 8-7/8%
7,267
18.824
18.864
268
900
335
1.503
Total..
May 15.
02/15/86
05/15/86
11/15/86
bond
bond
6,999
17,924
18,529
55
PUBLIC DEBT OPERATIONS
Table PDO-1 .--Maturity Schedule ot Interest-Bearing Marketable Public Debt Securities Other than
Regular Weekly and 52-Week Treasury Bills Outstanding, Mar. 31, 1991 -Continued
[In
Date
millions ot dollars]
of final maturity
Description
11
'
56
PUBLIC DEBT OPERATIONS
Table PD0-2.-0fferlngs of
[Dollar
amounts
In millions.
Description ol
new
Source: Monthly Slalemem
ol
Bills
the Public Debl ot ihe United States and allolmentsl
Amounts
Issue
ot bids
accepted
Amount
Issue date
Maturity
date
Nunnber
days to
maturity
Regular weekly:
(13-week and 26-week)
1990 -Dec.
6
1991 -Mar.?
Junes
13
Mar. 14
June 13
20
27
1991 -Jan.
3
10
17
24
31
Mar. 21
June 20
Mar. 28
June 27
Apr. 4
Julys
Apr. 1
July 1
Apr. 18
July 18
Apr. 25
July 25
May 2
Aug.
Feb.
7
14
21
1
May 9
Aug. 8
May 16
Aug. 15
May 23
Aug. 22
Mar.
28
May 30
7
Aug. 29
June 6
Sept. 5
14
June 13
Sept. 12
21
June 20
Sept. 19
28
June 27
Sept.
26
ol
Amount
of
bids
tendered
Total
On com-
amount
petitlve basis
On
noncorrv
petitlve basis
57
PUBLIC DEBT OPERATIONS
Table PD0-2.--0fferings of Bills-Continued
On
Issue date
lotal bids
On
accepted
Average
price per
discount
hundred
rate
investment
rate*
Discount
Price per
Discount
Price per
(percent)
(percent)
rate
hundred
rate
hundred
High
(percent)
Regular weekly:
1990- Dec.
6
98.215
13
96.481
98.266
96.593
20
27
1991 -Jan.
3
10
17
Feb.
6.12
7.31
7.11
S.72
6.89
8.72
6.79
6.72
6.82
6.30
6.50
6.32
6.50
24
98.448
6.14
96.861
6.21
31
98.428
96.825
98.491
6.22
6.28
5.97
5.94
5.86
5.85
5.94
6.41
7
5.91
6.01
6.18
6.19
6.28
6.29
6.36
6.04
8.19
6.02
6.10
6.05
6.12
28
7
14
21
28
52-week:
6.51
7.29
7.08
7.07
6.99
6.21
21
Mar.
98.286
96.577
98.352
96.679
98.352
96.706
98.352
96.709
98.453
7.06
6.96
6.B6
6.74
6.78
6.77
6.52
6.57
6.52
6.48
6.52
96.861
14
competitive bids accepted
Average
96.997
98.519
97.043
98.499
97.012
98.481
96.962
98.461
96.936
98.521
97.012
98.526
97.058
98.519
97.048
6.01
6.09
6.06
5.85
5.91
5.83
5.82
5.86
5.84
6.58
6.15
6.21
6.03
6.11
6.11
7.07
Lov*
(percent)
58
PUBLIC DEBT OPERATIONS
Table PD0-3.-Public Offerings of Marketable Securities Other than Regular Weekly Treasury
[Dollar
amounts
In millions.
Source: Bureau
of the Public
Bills
Debt]
Range
of
accepted bids
lor
notes
and bonds
7
8
9
to
11
12
13
14
IS
IS
17
18
19
20
21
22
23
24
25
26
27
30
31
34
35
36
37
38
39
40
41
42
45
46
49
50
51
59
PUBLIC DEBT OPERATIONS
Table PD0-3.-Public Offerings of Marketable Securities Other than Regular Weekly Treasury Bills-Con.
[Dollaf
amounts
Perkjd to
Auction
date
Issue
date
Description of securities
In
mllllonsl
final
60
PUBLIC DEBT OPERATIONS
Table PD0-3.-Public Offerings of Marketable Securities Other than Regular Weekly Treasury Bills--Con.
^ Yields accepted ranged from 7.78% (price 99.921) up to 7.79% (price 99.895) with the
'^ Yields acKeptsd ranged from 8.88% (price 99.991) up to 8.91% (price 99.937) with the
average
" Yralds
at
8.90%
average
at
8.74%
(price 99.702).
average
at
8.88%
(price 99.967).
average
at
average
at
" Yields accepted
" Yields
^ Yields
^'
average
(price 99.955).
accepted ranged trom 8.73% (price 99.728) up to 8.75% (price 99.676) with the
average
(price 99.058).
accepted ranged from 8.51%
8.52%
(price 99.982)
up
to
8.53%
(price 99.946) with the
(price 99.964).
Yields accepted ranged from
8.52%
(price 99.847)
up to 8.56%
(price 99.681) with the
at 8.54% (price 99.764).
^^ Yields accepted ranged from
8:38%
(price 99.991)
up to 8.42%
(price 99.919) with the
average
average
at 8.41
% (price 99.937).
" Yields accepted ranged from 8.49% (price
1
00.033) up to 8.50% (price
at 8.50% (price 100.000).
^' Yields accepted ranged from 8.55% (price 99.741) up to
1
00.000) with the
average
at 8.57% (price 99.637).
^^ Yields accepted ranged from
8.58%
(price 99.586) with the
^ Yields
at
8.07%
^ Yields
8.05%
(price 99.909)
up
to
8.07%
(price 99.873) with the
average
at
average
at
™ Yields
''
^'
at
8.57%
8.20%
(price 99.864) with the
(price 99.882).
8.56%
(price 99.685) up to
8.58%
(price 99.603) with the
(price 99.644).
Yields accepted ranged from
8.17%
(price 99.919)
up
to
at 8.18% (price 99.901).
^^ Yields accepted ranged from 8.62% (price 99.933) up to
8.18%
(price 99.901) with the
average
at 8.53% (price 99.900).
^^ Yields accepted ranged from 8.74% (price 100.052) up to
8.53%
(price 99.900) with the
8.79%
at
7.64%
(price 99.836).
(price 99.790) with the
(price 99.71 0)
up
to
7.95%
(price 99.626) with the
ranged from 7.94% (price 99.656) up to 7.95%
(price 99.603) with the
at
7.95%
(price 99.603).
^ Yields accepted
7.66%
accepted ranged from 7.08%
at
7.09%
(price 99.881)
(price
up
to
99.853) up to 7.09%
(price 99.835) with the
(price 99.835).
up to
7.63%
(price 99.468) with the
at 7.62% (price 99.509).
'^ Yields accepted ranged from 6.97% (price 99.747) up to
6.98%
(price 99.720) with the
up to 7.85%
(price 99.316) with the
Yields accepted ranged from
7.60%
(price 99.590)
'*
at
6.98%
(price 99.720).
Yields accepted ranged from
average
at
^ Yields
7.85%
7.84%
(price 99.384)
(price 99.316).
accepted ranged from 7.97% (price 98.922) up to 7.98% (price 98.810) with the
at 7.98% (price 98.810).
'* Yields accepted ranged from 6.85% (price 99.816)
average
at
average
at
average
at
^ Yields
6.87%
to
6.87%
(price 99.779) with the
accepted ranged from 7.50% (price 100.000) up to 7.51% (price 99.959) with the
7.51%
(price 99.959).
7.15%
(price 99.954).
^ Yields accepted
*'
up
(price 99.779).
ranged from 7.13% (price 99.991) up to 7.15%
Yields accepted ranged from
at 7.81
7.80%
(price 99.796)
up
to
7.81%
(price 99.954) with the
(price
99.756) with the
% (price 99.756).
(price 99.794) with the
Note. "Ail notes and bonds, except for foreign-targeted issues, were sold at auction
average
average
7.49%
(price 99.847) with the
average
average
average
at 8.76% (price 99.948).
^' Yields accepted ranged from
to
7.67%
(price 99.881).
average
average
up
(price 99.872).
7.66%
at 8.87% (price 98.747).
^' Yields accepted ranged from 8.18% (price 99.900) up to
average
^° Yields accepted ranged from
7.32%
at
'*
(price 99.826)
(price 100.270) with the
accepted ranged from 7.30% (price 99.908) up to 7.33% (price 99.854) with the
average
^^ Yields
to
(price 99.626).
Yields accepted ranged from
average
8.19%
7.95%
8.72%
up
(price 100.376).
average
(price 99.873).
accepted ranged from 8.08% (price 99.791) up to 8.10% (price 99.738) with the
at
8.71%
accepted ranged from 7.47%
average at 7.49% (price 99.790).
^'Yields accepted ranged from 7.93%
average at 8.10% (price 99.738).
^'Yields accepted ranged from 8.74% (price 100.066) up to 8.84% (price 99.411) with the
average at 8.77% (price 99.869).
^° Yields accepted ranged from 8.86% (price 98.851) up to 8.88% (price 98.644) with the
average
at
average
average
average
at 8.52% (price 99.867).
^' Yields accepted ranged from 8.69% (price 100.589)
average
ranged from 8.87% (price 100.033) up to 8.88% (price 99.967) with the
accepted ranged from 8.83% (price 99.162) up to 8.85% (price 98.954) with the
8.84%
7.78% (price 99.921 ).
accepted ranged from 8.50% (price 100.000) up to 8.52% (price 99.867) with the
at
* Yields
7.83%
(price 99.855)
up
to
7.84%
(price 99.836) with the
through competitive and noncompetitive bidding. Foreign-targeted issues were sold
auction through competitive bidding only.
at
61
PUBLIC DEBT OPERATIONS
Table PDO-4.-Allotments by Investor Classes for Public Marketable Securities
Part A-Other than Bills
[In
milltons of dollars]
Allotments by investor classes
State and kx^l
Issue
date
Description of securities
Total
Federal
Commer-
amount
Reserve
banks
dal
issued
banks
Insuf-
^^
62
PUBLIC DEBT OPERATIONS
Table PDO-4.--Al!otments by Investor Classes for Public Marketable Securltles--Con.
Part B»Bills Other than Regular Weekly Series
[Dollar
amounts
In millions]
63
U.S.
SAVINGS BONDS AND NOTES
Series EE bonds, on sale since Jan. 1, 1980, are the only
savings bonds currently sold. Series HH bonds are issued in
exchange for series E and EE savings bonds and savings notes.
Series A-D were sold from Mar. 1, 1935, through Apr. 30, 1941.
Series E was on sale from May 1, 1941, through Dec. 31, 1979
(through June 1980 to payroll savers only). Series F and G were sold
from May 1, 1941, through Apr. 30, 1952. Series H was sold from
June 1, 1952, through Dec. 31, 1979. Series HH bonds were sold for
cash from Jan. 1, 1980, through Oct. 31, 1982. Series J and K were
sold from
May
1
,
1952, through Apr. 30, 1957.
U.S. savings notes were on sale May 1 1967, through June 30,
1970. The notes were eligible for purchase by individuals with the
simultaneous purchase of series E savings bonds. The principal
terms and conditions for purchase and redemption and information
on investment yields of savings notes appear in the Treasury
Bulletins of March 1967 and June 1968; and the Annual Report of
the Secretary of the Treasury for fiscal year 1974.
,
Table SBN-1 .--Sales and Redemptions by Series, Cumulative througli Mar. 31, 1991
[In
millions ot dollars. Source:
Monthly Siaemenl
of the Public
Debt
of the
United Stales; Market Analysis Seclion. United Slates Savings Bonds Divisionl
ArTX)unt outstanding
Accrued
Sales'
discount
Sales plus
acCTued
discount
Redemptions
Interest-
Matured
bearing debt
non-inlerest-
bearing debt
Savings bonds:
Series
Series
Series
Series
A-D^
F and
J
G
and K
Savings notes
Total
3,949
E. EE, H,
and HH.
64
U.S.
SAVINGS BONDS AND NOTES
Table SBN-3.--Sales and Redemptions by Period, Series E, EE, H, and
[In millions ot dollars.
Source: Monlhly Slalemenl
ot the Public
Debl
ot
the United Stales: Market Analysis Secllon, United Stales Savings
Redemptions
discount
Period
Sales plus
accrued
Total
discount
Sales
Accrued
price
discount
Exchange of
E bonds for
tor
H and HH bonds
HH
Bonds
Dtvislon]
Amount oulslanding
Interest-
Matured
bearing debt
non-lnterest-
bearlng debt
Series E and
EE
Fiscal years:
1941-88
1989
1990
1,281
11,570
98,432
746
806
116,691
114,929
1,594
1.717
1.747
291
67
312
282
279
233
290
218
226
227
248
262
302
248
109
108,583
109,230
110,014
110,605
111,290
111,892
112,657
113,638
114,432
114,929
115,767
116,962
118,130
191.914
3.810
3.914
55,883
2,843
3,005
1 1
361.174
15.425
16.213
249.302
6.630
192,848
3,794
3,987
66,453
2,838
3,154
1,703
1,287
1,442
1,220
1,326
1,306
1,323
1,274
1,370
1,486
634
579
617
599
569
669
490
583
515
594
705
528
573
342
267
335
108,850
7,429
7,986
357.838
250,787
7.644
8,086
110.387
723
703
707
615
629
653
544
670
629
735
953
804
815
980
584
735
605
697
653
779
60S
740
15.152
15.760
,433
97,318
104,713
112,657
247,793
6.653
6.920
248.988
7.723
7,774
732
795
1,348
1,425
Calendar years:
1941-88
1989
1990
1990 -Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1991 -Jan
Feb
Mar
7.781
8.129
751
917
955
968
1,871
1,758
1,784
Series
7.141
321
336
369
272
357
288
347
443
226
325
61
54
93
64
78
55
70
38
59
68
69
H and HH
Fiscal years:
1952-88
1989
1990
13,581
15,839
15,839
6
6
-14
-14
583
606
583
606
13,613
13,613
15.963
16,963
-35
-35
588
613
588
613
20
20
-40
-40
19
57
50
54
57
50
4
4
46
-21
-21
54
58
46
54
68
46
49
45
44
66
48
45
13,581
Calendar years:
195288
1989
1990
1990- Mar
Apr
May
June
July
19
Aug
Sept
Oct
-16
Nov
Dec
-16
-16
12
19
3
9
12
19
3
9
1991 -Jan
Feb
Mar
8
46
49
46
44
55
48
46
54
1,433
1.569
1.621
1,501
1,476
1,466
1,435
1,425
1,399
1,390
1,747
1,704
1,662
1.634
65
OWNERSHIP OF FEDERAL SECURITIES
INTRODUCTION
Federal securities presented in these tables comprise public
debt securities Issued by the Treasury and debt issued by other
Federal agencies under special financing authorities. See the Federal debt (FD) series of tables for a more complete description of the
Federal debt.
Table OFS-1.--Distribution of Federal Securities by Class of Investors
and Type of Issues
Holdings of Treasury marketable and nonmarketable securities
and of debt issued by other Federal agencies are presented for Government accounts, the Federal Reserve banks, and private investors. Government account holdings largely reflect investment by the
social security and Federal retirement trust funds. The Federal Reserve banks acquire Treasury securities in the market as a means of
executing monetary policy.
Table OFS-2.--Estimated Ownership of Public Debt Securities Held by
Private Investors
Privately held Treasury securities are those held
other than the
by investors
Government accounts and Federal Reserve banks.
Treasury obtains information on private holdings from a variety of
sources, such as data gathered by the Federal financial institution
regulatory agencies. State and local holdings and foreign holdings
include special issues of nonmarketable securities to municipal entities and foreign official accounts, as well as municipal and foreign
official and private holdings of marketable Treasury securities. Data
on foreign holdings of marketable Treasury securities are presented
in the capital movements tables in the Treasury Bulletin. See the
footnotes for descriptions of the investor categories.
66
OWNERSHIP OF FEDERAL SECURITIES
Table OFS-1 .--Distribution of Federal Securities by Class of Investors and Type of Issues
[In
millions of dollars.
Source: Financial Management Service]
Interest-bearing public debt securities
Total
End
of
fiscal
or
year
month
67
OWNERSHIP OF FEDERAL SECURITIES
Table 0FS-2.--Estimated Ownership of Public Debt Securities by Private Investors
[Par values
'
In billions of dollars.
Source: OHice ol Market Finance]
Nonbank
Individuals
End
of
rrionth
Total
Commer-
Sav-
Other
privately
cial
ings
secu-
tield
banks
bonds
rities
Total
Investors
^
Insurance
Money
Corpora-
conpanles
market
funds
tions
^
Slate
Foreign
and
and
local
nalionai
tors
Other
inves®
inter-
govern-
ments
1982-Mar
733.3
740.9
791.2
848.4
116.1
116.1
117.8
131.4
617.2
624.8
673.4
717.0
115.6
116.5
67.5
67.4
67.6
68.3
45.0
46.7
48.0
48.2
906.6
948.6
982.7
753.4
777.0
806.4
833.8
116.7
121.3
129.0
133.4
68.8
69.7
70.6
71.5
47.9
51.6
1,022.6
153.2
171.6
176.3
188.8
192.9
185.4
184.6
186.0
880.1
Dec
1,073.0
1,102.2
1,154.1
1,212.5
136.2
142.2
142.4
143.8
72.2
72.9
73.7
74.5
-l^aj-
1,254.1
197.8
145.1
Dec
1,292.0
1,338.2
1,417.2
201.6
203.6
198.2
1986-Ma;
1,473.1
1,271.4
1,502.7
1,553.3
1,602.0
201.7
200.6
200.9
203.6
1.352.4
1.398.5
157.8
159.6
168.0
162.7
1,641.4
1,658.1
1,680.7
1,731.4
199.9
199.4
205.2
201.5
1,441.5
1,468.7
1.475.6
1,629.9
1,779.6
1,786.7
1,821.2
1,858.5
203.3
198.3
199.2
193.8
1989 -Mar
June
1,903.4
Sept
1,958.3
2,015.8
112.5
25.7
22.4
38.6
42.6
16.9
17.6
21.6
24.6
99
103 3
136 1
137 2
109.0
115.0
140.6
149.5
194.9
194.4
209.4
224.8
49.6
54.0
58.5
65.3
44.8
28.3
27.2
32.8
35.9
39.7
123.0
127.4
137.0
149.0
156.2
235.9
160
263.1
64.0
69.3
68.7
69.3
66.1
19.4
14.9
13.6
26.9
42.6
46.3
47.7
50.1
155.0
162.9
170.0
173.0
205.9
75.4
76.7
78.2
79.8
69.7
72.0
73.2
75.0
66.6
71.4
78.5
26.7
24.8
22.7
177.0
190.3
203.0
226.7
199.6
213.8
222 9
224.8
390.6
388.8
404.2
25.1
60.8
54,9
59.0
59.0
81.4
83.8
84.0
88.6
96.4
106.6
29.9
22.8
24.9
28.6
59.6
61.2
66.7
68.8
225.6
232 6
227.1
92.3
76.4
75.7
70.9
70.4
250.9
265.6
263.4
481.9
492.0
490.7
506.6
163.0
165.6
167.7
172.4
94.7
96.8
98.5
101.1
68.3
68.8
69.2
71.3
107.8
104.0
104.6
104.9
18.8
20.6
15.5
14.6
73.5
79.7
81.8
84.6
264.6
268.7
273.0
284.6
279.6
299.7
1,576.3
1,588.4
1,622.0
1.664.7
178.1
104.0
106.2
107.8
109.6
74.1
103.6
103.8
16.2
13.4
106.1
11.1
291.4
297.2
306.7
313.6
332.5
345.4
345.9
362.2
569.2
559.0
581.5
693.4
200.7
186.6
174.8
174.8
1,702.7
1,722.6
1,783.5
1.841.0
204.2
211.7
213.5
112.2
114.0
115.7
117.7
92.0
97.7
97.8
585.7
609.2
r98.7
124.1
130.1
1.926.9
1,953.6
2,019.3
2,100.1
r222.8
r229.7
r232.5
Dec
2,141.8
2,207.3
2,288.3
189.2
188.2
188.0
188.2
233.8
119.9
121.9
123.9
126.2
rl02.9
rl07.8
rl08.6
107.6
r135.9
r13B.O
r142.7
149.7
1991 -Mar
2,360.6
182.0
2,178.6
238.3
129.7
108.6
152.0
June
Sept
Dec
1983- Mar
June
Sepi
Dec
1984 -Mar
June
Sept
1985
June
Sept
June
Sept
Dec
1987- Mar
June
Sept
Dec
1988- Mar
June
Sept
Dec
1,909.1
Dec
1990- Ma;
June
2,115.1
Sept
U.S. savings bonds, series A-F and
J,
114.1
916.8
969.5
1,026.5
1,056.3
1,090.4
1,134.6
1,219.0
148.7
151.4
154.8
1,302.1
182.0
186.8
190.4
r216.4
87.1
are included at current redemption value.
Includes domestically chartered banks, U.S. branches
New York
investment companies
corporations
owned by domestically chartered and
majority
owned by
and agencies
foreign
of foreign banks.
banks,
and Edge Act
foreign banks.
Includes partnerships and personal trust accounts.
Includes U.S. savings notes.
Sales began
May
1970.
Exclusive of banks and insurance corrpanles.
1
32.1
35.8
38.6
44.1
58.4
61.9
22.1
22.8
64.2
56.5
64.5
69.1
75.8
79.0
80.8
1
967, and were discontinued June 30,
263.8
257,3
166.3
166.3
171.6
175.6
294.5
315.7
363.7
363.3
450.1
272.8
541.0
639.0
553.4
281.1
569.1
107.3
11.8
86.3
87.6
85.9
86.0
120.4
121.7
13.0
11.3
12.9
14.9
89.4
91.0
90.9
93.4
326.0
332.0
338.0
338.7
376.6
369.1
394.9
392.9
31.3
r28.0
r94.9
r96.9
r330.3
r330.3
r386.2
r392.8
34.0
45.4
102.0
108.9
330.8
329.6
404.8
r724.5
r737.9
r772.5
426.1
807.6
46.0
114.9
329.0
432.2
866.2
573.1
r654.6
Includes State and bcal pension funds.
Consists
States.
of
the investment of foreign balances and international accounts
Estimates
reflect
in
the United
1978 benchmark through December 1984 and 1984 Ijenchmark
to date.
Includes savings and
,
251.2
262.8
1
160.1
loan associations, credit unions,
savings banks, corporate pension
trust
nonprofit
institutions,
mutu^
funds, dealers and brokers, certain Government
deposit accounts, and Government-sponsored agencies.
68
MARKET YIELDS
INTRODUCTION
The tables and charts in this section present yields on Treasury
marketable securities and compare long-term Treasury market yields
with yields on long-term corporate and municipal securities.
which Treasury bills trade in the market. The Board of Governors of
the Federal Reserve System also publishes the Treasury constant
maturity data series in its weekly H. 15 press release.
Table MY-l.-Treasury Market Bid Yields
Table MY-2."Average Yields of Long-Term Treasury, Corporate, and
Bills,
Notes,
at
Constant Maturities:
and Bonds
The Treasury yield curve, presented in the chart that accompanies table t^Y-1, is based on current market bid quotations on the
most actively traded Treasury securities as of 3:30 p.m. each business day. The Treasury obtains quotations from the Federal Reserve
Bank of New York, which composites quotations provided by five
primary dealers. This yield curve reflects yields based on semiannual
interest payments and is read at constant maturity points to develop
a consistent data series. Yields on Treasury bills, which are discount
securities, are the coupon equivalent yields of bank discount rates at
Municipal Bonds
The long-term Treasury rate is the 30-year constant maturity
presented in table MY-1. The corporate bond series is developed by the Treasury, using reoffering yields on new long-term
securities rated Aa by Moody's Investors Service.
The municipal
bond series prior to 1991 was compiled by the Treasury. Beginning
with January 1991, the series is the "Municipal Bond Yield
Averages," published by Moody's Investors Service for 20-year reoffering yields on selected Aa-rated general obligations See the footnotes for further explanation.
rate
69
MARKET YIELDS
Table MY-1. "Treasury Market Bid Yields at Constant Maturities:
Bills,
Notes, and Bonds*
[Source: Office of MarKel Finance]
Date
1-yr.
Monthly average
1990 -Apr
May
June
July
Aug
Sept
Oct
Nov
Deo
8.04%
8.00
7.98
7.87
7.69
7.60
7,40
7.29
6.95
1991 -Jan
6.41
Feb
Mar
6.12
6.09
End
of
month
1990- Apr
8.05
May
8.01
June
8.00
7.74
7.63
7.37
7.34
7.24
6.63
6.37
6.22
5.92
July
Aug
Sept
Oct
Nov
Dec
1991 -Jan
Feb
Mar
8.27%
2-yr.
3-yr.
Syr.
7-yr.
10-yr.
30-yr.
70
MARKET YIELDS
G)
CX5
CM
O
CC
<
CO
LU
O
LU
CO
>DC
CO
<
LU
DC
CO
Q
_l
LU
>-
71
MARKET YIELDS
Table MY-2.--Average Yields of Long-Term Treasury, Corporate, and Municipal Bonds
[Source: Office
of
Market Finance]
Treasury
Period
Treasury
73
MARKET YIELDS
AVERAGE YIELDS OF LONG-TERM TREASURY,
CORPORATE, AND MUNICIPAL BONDS
Monthly Averages
|iiiii
i
iiiii|i r
i i
ii[iiiiiiiiiii iiiiiiiiiii|iiiiiiiiiii|iiiiiiiiiii iiiiiiiiii
|
|
81
82
83
84
85
86
87
CALENDAR YEARS
n
i i
88
iiiiiiiii|
m
89
i i
iiiiii|iiiiiiiiiii|iiiiii
90
Treasury 30- Yr. Bonds
Aa Municipal Bonds
Aa Corporate Bonds
91
74
FEDERAL AGENCIES' FINANCIAL REPORTS
INTRODUCTION
1950
conducted in the tenitories or overseas, and any monetary
assets or property received, spent, or othenwise accounted for by the
reporting entity. Amounts are reported to the dollar.
U.S. Government.
Requirements provide that Federal agencies submit to Treasury
reports supplemented by three supporting reports.
These reports are: Report on Financial Position (Sf^ 220), Report on
Operations (SF 221), Report on Cash Flow (SF 222), and Report on
Reconciliation (SF 223). The three supporting reports are: Direct and
Guaranteed Loans Reported by Agency and Program Due from the
Public (SF 220-8), Report on Accounts and Loans Receivable Due
from the Public (SF 220-9), and Additional Financial Information (SF
220-1). The report on Direct and Guaranteed Loans is submitted to
Treasury quarterly, and annually for publication in the Treasury Bulletin. The Report on Accounts and Loans Receivable Due from the
Public is submitted quarterly on a selected basis, and by all entities
annually. Information captured in the SF 220-8 is shown in the fol-
Section 114 of the Budget and Accounting Procedures Act of
(31 use. 3513a) requires tfie Secretary of tfie Treasury to
prepare reports on tfie financial operations of the U.S. Government
and provides that each executive agency must furnish the Secretary
of the Treasury such reports and information relating to the agency's
financial condition and operations as the Secretary may require. The
provisions do not apply to the legislative and judicial branches of the
Federal Government; however, these entities are encouraged to
submit the prescribed reports so the Secretary of the Treasury can
prepare comprehensive reports on all the financial activities of the
Financial l^anual (I TFM 2-4100) sets the criteria
submission of annual and quarterly financial reports in accordance with the Reporting Entities Listing (Bulletin No. 90-05). Reports are provided for six fund types: Revolving funds, trust revolving
funds, 15 major trust funds, all other trust funds, all other activity
combined, and consolidated reports of an organizational unit. The
The Treasury
for the
tions
four financial
lowing table:
he acThe Report on Operations can be
financial transactions supporting the required reports are to
for on the accrual basis.
submitted on a cash basis under certain circumstances (see TFM
2-4180.20). Reports are to be prepared from a budgeting and accounting system which contains an integrated data base that is part
of the agency's integrated financial management system as required
by the Office of [Management and Budget (OIVIB) Circular No. A-127.
counted
I
The required
equities relating to
reports should include
all
programs and
all
assets,
activities
liabilities,
under control
and
of the
reporting entity, except for the assets of disbursing officers, which
are reported by the Treasury. Reports should include transfer appropriation accounts from other agencies, foreign currencies, opera-
Table FA-1.--Direct and Guaranteed Loans
and guaranteed losins to the
Program to support credit activities.
This report reflects the direct loans
public through the Federal Credit
Actual control of credit program levels remains with authorizing legislation and appropriations acts. The report on Direct and Guaranteed
Loans also provides the Federal Reserve Board information to
monitor the flow of funds. An accompanying chart depicts direct
loans and guaranteed loans for the first quarter of fiscal 1991.
.
75
FEDERAL AGENCIES' FINANCIAL REPORTS
Table FA-1.— Direct and Guaranteed Loans, Dec. 31, 1990
[In
thousands
of dollars. Source:
SF
220-8; compiled by Financial
Management
Direct loans or credit
Agency and program
Maximum
Amount
Maximum
outstanding
authority
outstanding
authority
U.S. dollar loans
to the President:
Guaranty reserve fund
592,155
Foreign military sales credit
Military sales credit to Israel
Emergency security assistance to Israel
Housing and other credit guaranty programs
Alliance tor Progress loan fund
Other programs
Overseas Pnvate Investment Corporation
Total
Department
Funds appropriated
to the President
of Agnculture:
Commodity loans
Rural electnfication and telephone revolving fund
Rural economic development
Rural Telephone Bank
Rural communication development fund
Agricultural credit insurance loans
Rural development insurance loans
Rural housing insurance loans
development loans
Self-help housing
Rural development loans
Other Farmers
Home
Administration loans
Total Department of Agriculture
of Commerce:
Economic development loans
Department
Coastal energy Impact fund
Federal ship financing fund
Other loans
Total Department of
Department
Commerce
of Defense;
Army loans
Total Department of
Department
Defense
of Education:
College housing loans
Higher education
facilities
loan and insurance fund
Other loans
Total Department of Education
Department
of Energy:
Bonneville Power Administration loans
Other loans
Total Department of Energy
Department
of Health
and Human Services:
Health professions graduate student loan fund
Medical
facilities
guarantee and loan fund
Student loan program
Other Health Resources and Services Administration loans
Nurse
training fund
Health maintenance organization loan fund
Total Department of Health
and Human Services
.T
.
Guarantees or insurance
Amount
I— Wholly owned Government enterprises
Funds appropnated
Sen/Ice]
.
..
76
FEDERAL AGENCIES' FINANCIAL REPORTS
Table FA-1.— Direct and Guaranteed Loans, Dec. 31, 1990— Con.
Direct loans or credit
Agency and program
Amount
Maximum
outstanding
authority
outstanding
authority
U.S. dollar loans
Department of Housing and Urban Development:
Housing
7.831.199
the elderly or handicapped
for
Low-rent public housing programs
Other housing loans
Guarantees
of
mortgage-backed securities
Rehabilitation loan fund
Urban renewal programs
Community disposal operations fund
Community planning and development loans
Nonprofit sponsor assistance
Flexible subsidy fund
Total Department of Housing
Department
and Urban Development
of the Interior:
Reclamation projects
Indian affairs revolving fund for loans
Indian loan guaranty
Guam Power
.
.
and insurance fund
Authonty
Virgin Islands construction
Total Department of the Intenor
Department
of Labor:
Pension Benefit Guaranty Corporation
Total Department of Labor
Department
of State:
Emergencies
in
diplomatic and consular sen/ice
.
Total Department of State
Department
of Transportation
Federal Aviation Administration— purchase of aircraft
Federal Highway Administration— nght-of-way revolving fund
Federal Railroad Administration loans
Urban Mass Transportation loans
Mantime Administration— Federal ship financing fund
Total Department of Transportation
Department
Loans
of the Treasury:
to foreign
Total
Department
governments
Department
of
Veterans
ot the Treasury
...
Affairs:
Loan guaranty revolving fund
Direct loan revolving fund
Service-disabled veterans insurance fund
Veterans reopened insurance fund
Vocational rehabilitation revolving fund
.
Education loan fund
Other
trust
funds
National service
Veterans special
life
life
insurance fund
insurance fund
Compensation and benefits
Other loans
Total Department of Veterans Affairs
.
or insurance
Maximum
I— Wholly owned Government enterprises
Federal Housing Administration fund
Guarantees
Amount
.
,
77
FEDERAL AGENCIES' FINANCIAL REPORTS
Table F A- 1.— Direct and Guaranteed Loans, Dec. 31, 1990— Con.
Direct loans or credit
Agency and program
I
Guarantees or insurance
Amount
Maximum
Amount
Maximum
outstanding
authority
outstanding
authority
— Wholly owned Government enterprises
U.S. dollar loans
Environmental Protection Agency:
Loans
103.569
Total Environmental Protection
Agency
103.589
General Services Administration:
Federal buildings fund
883.152
Other funds
21,107
Total General Services Administration
21,107
.
Small Business Administration:
Business loans
Disaster loan fund
Other loans
.».
Total Small Business Administration
,
Other independent agencies:
Loans
to
DC. Government
Export-Import Bank of the United States
FSLIC
.
resolution fund
Federal Emergency
Management Agency
National Credit Union Administration
Tennessee Valley Authority
Total Other independent agencies
Total Part
owned Government
II— Wholly
Loans repayable
Loans repayable
Agency
.
.
I
in foreign
in
enterprises
foreign currencies
currencies:
for International
Development
Agency
,
United States Information
Total Part
Ill— Privately
538,191
551.962
365
638
II
owned Government-sponsored
enterprises
Privately ovk^ned
Government-sponsored enterprises
Student Loan Marketing Association
Federal National Mortgage Association
Banks
Farm
for
cooperatives
credit
banks
Home Loan Mortgage
Total Part
III
9.527.939
9.527.939
116.628.000
116.628.000
11,305.854
Federal Housing Finance Board
Federal
:
Corporation
11,305,854
39.821.762
39,821,762
117.104.623
117.104.623
21.394.814
21.394.814
315,782,992
19.374.432
883.152
78
FEDERAL AGENCIES' FINANCIAL REPORTS
DIRECT AND GUARANTEED LOANS
DEC. 31,1990
Wholly owned Government Enterprlses--U.S. Dollar Loans
Agriculture
55'
Direct
Loans
Educatio
6%
Guaranteed Loans
INTERNATIONAL STATISTICS
81
INTERNATIONAL FINANCIAL STATISTICS
The
tables
in this
reserve assets and
section are designed to provide data on U.S.
liabilities
and other
statistics related to the U.S.
Table IFS-2 brings together
cial institutions,
balance of payments and international financial position.
are used
Table IFS-1 shows the reserve assets of the United States, inits gold stock, special drawing rights held in the Special
Drawing Account in the International Monetary Fund, holdings of
notes issued to
cluding
convertible foreign currencies,
tional
and reserve
position
in
in
and selected
statistics
on
liabilities to all
liabilities to
foreign
offi-
other foreigners, which
the U.S. balance of payments statistics.
Table IFS-3 shows U.S. Treasury nonmarketable bonds and
official
institutions
and other residents
of foreign
countries.
the Interna-
Table IFS-4 presents a measure of the general foreign ex-
Monetary Fund.
change value
Table IFS-1
.--U.S.
of the U.S. dollar.
Reserve Assets
[In millions of dollars]
Reserve
Special
End
of
calendar
year or month
48.511
1990 Apr
76,283
77,028
77,298
77,906
78.909
80.024
82,822
-
May
June
July
Aug
Sept
Oct
Nov
Dec
-
Jan
Apr
countries.
The U.S.
SDR
11,060
11,065
11,065
11,064
10,103
10,396
10.490
10.699
10.780
10,666
10,876
11,059
10,989
10.922
10,958
10,368
10,325
46,433
46,803
47,294
47,457
48,174
49,414
51,820
52,052
52,193
53,558
51,225
47.666
48,108
8,687
8,764
8,449
8,686
8,890
holdings and reserve position
in
the IMF are also valued on this basis beginning July 1974.
held.
SDRs
In
the Special Drawing Account
in
the Internallonal Monetary
i
5
8,881
9,066
8,871
9,076
9.468
9,556
8,910
8,806
Fund, plus or m'nus transactkins in SDRs.
4 Includes holdings of Treasury and Federal Reserve System; beginning November 1978,
at current market exchange rates or, where appropriate, as such other
as may be agreed upon by the parties to the transactions.
The United Stales has the right to purchase foreign currencies equivalent to Its reserve
position in the Fund aulomatically
needed. Under appropriate conditions the United States
could purchase additional amounts related to the U.S. quota.
these are valued
rates
Treasury values its gold stock at $42.2222 per fine troy ounce and pursuant to 31 U.S.C.
5117(b) issues gold certificates to the Federal Reserve at the same rate against all gold
2
3 Includes allocations of
Monetary Fund
11,730
11,349
9,745
9,048
Beginning July 1974, the International Monetary Fund (IMF) adopted a technique for valu(SDR) based on a weighted average of exchange rates for the
member
International
17.322
13,088
17,363
44,551
ing the special drawing right
currencies of selected
3
8.395
10.283
9,637
9.951
,065
11,063
11,060
11,059
11,058
11,058
11,058
11,058
11,058
83,316
85.006
82,797
78,002
78,297
1
Foreign
currencies <
11,064
1 1 ,078
11,067
11.059
1 1
83,041
Feb
Mar
1
rights
45.798
47,802
74.609
position in
drawing
reserve
assets 1
1986
1987
1988
1989
1991
Gold stock 2
Total
5
If
82
INTERNATIONAL FINANCIAL STATISTICS
Table IFS-2.-Selected U.S.
Pn mllHons
Liabilities to
Foreigners
ot dollars]
Liabilities to foreign
countries
Liabilities to
Offldal Inslllullons
<
Other
Marltet-
Nonmarltetable U.S.
Treasury
readily
reported
able U.S.
Treasury
tionds
able
Liabili-
bytianl<s
and
bonds and
liabili-
ties to
notes 2
notes 3
ties'
banks 5
Liabili-
End
of
ties
calendar
year or
nnonth
Total
Total
(1)
(2)
In
U.S.
(3)
(4)
(5)
nnarliet-
(6)
(7)
Total
(8)
83
INTERNATIONAL FINANCIAL STATISTICS
These indices are presented to provide measures of the general
exchange value of the dollar that are broader than those
provided- by single exchange rate levels. They do not purport to
represent a guide to measuring the impact of exchange rate levels
foreign
International transactions. The indices are computed as
geometric averages of individual currency levels with weights
derived from the share of each country's trade with the United States
during 1982-83.
on U.S.
Table IFS-4.-Trade-Welghted Index of Foreign Currency Value of the Dollar
[Source: OBIce ot Foreign
Exchange Opefatlons--lntematlonal
Date
Affaire]
84
CAPITAL MOVEMENTS
INTRODUCTION
Background
opposite the country to which the official
belongs. Data pertaining to international and regional
organizations are reported opposite the appropriate international or
regional classification except for the Bank for International Settle"
ments, which is included in the classification "Other Europe
institutions are reported
institution
Data relating to capital movements between the United States
and foreign countries have been collected in some form since 1935.
Reports are filed with district Federal Reserve banks by commercial
banks, other depository institutions, bank holding companies,
securities brokers and dealers, and nonbanking enterprises in the
United States. Statistics on the principal types of data by country or
geographical area are then consolidated and are published in the
Treasury
Reports are required from banks, other depository
Bulletin.
used in the Treasury
System have been revised a
number of times to meet changing conditions and to increase the
usefulness of the published statistics. The most recent, general
The
reporting forms
and
instructions!
International Capital (TIC) Reporting
revision
report forms
of the
became
effective
with
the banking
and with the nonbanking reports as of
December 31, 1978. Revised forms and instructions are developed
with the cooperation of other Government agencies and the Federal
Reserve System and in consultations with representatives of banks,
securities firms, and nonbanking enterprises.
reports as of April 30, 1978,
Basic Definitions
The term "foreigner" as used in the Treasury reports covers all
and individuals domiciled outside the United States,
including US. citizens domiciled abroad, and the foreign branches,
subsidiaries, and other affiliates abroad of U.S. banks and business
concerns; the central governments, central banks, and other official
institutions of foreign countries, wherever located; and international
and regional organizations, wherever located. The term "foreigner"
institutions
also includes persons
known by
In
Reporting Coverage
in
the United States to the extent that they are
reporting institutions to
be acting on behalf
of foreigners.
banks' claims reporting, the term "foreign public borrower"
governments and departments of central
governments of foreign countries and of their possessions; foreign
central banks,
stabilization
funds, and exchange authorities;
corporations and other agencies of central governments, including
development banks, development institutions, and other agencies
which are majority-owned by the central government or its departments; State, provincial, and local governments of foreign countries
and their departments and agencies; and any international or
regional organization or subordinate or affiliated agency thereof,
created by treaty or convention between sovereign states.
encompasses
reporting.
Banks, other depository institutions, and some brokers and
dealers file monthly reports covering their dollar liabilities to, and
dollar claims on, foreigners in a number of countries. Twice a year,
as of June 30 and December 31, they also report the same liabilities
and claims items with respect to foreigners in countries not shown
separately on the monthly reports. Quarterly reports are filed with
respect to liabilities and claims denominated in foreign currencies
w's-a-ws foreigners. The specified exemption level applicable to the
monthly and quarteriy banking reports is $15 million
separate exemption level for the semiannual reports.
Banks, other depository
institutions,
and other enterprises
dealers,
securities
There
is
no
brokers and
report monthly their transactions
in
long-term securities with foreigners. The applicable exemption level
is $2 million with respect to the grand total of purchases and to the
grand total of sales during the month covered by the report. This
reporting threshold was raised from $500,000 effective January 31,
1991.
central
In general, data are reported opposite the foreign country or
geographical area in which the foreigner is domiciled, as shown on
the records of reporting institutions. For a number of reasons, the
geographical breakdown of the reported data may not in all cases
reflect the ultimate ownership of the assets. Reporting institutions
are not expected to go beyond the addresses shown on their
records, and so may not be aware of the country of domicile of the
ultimate beneficiary. Furthermore, U.S. liabilities arising from
deposits of dollars with foreign banks are reported in the Treasury
statistics as liabilities to foreign banks, whereas the liability of the
foreign bank receiving the deposit may be to foreign official
institutions or to residents of another country.
Data pertaining
Copies
institutions,
bank holding companies. International Banking Facilities (IBFs),
securities brokers and dealers, and nonbanking enterprises in the
United States, including the branches, agencies, subsidiaries, and
other affiliates in the United States of foreign banking and nonbanking firms. Entities that have reportable liabilities, claims, or securities
transactions below specified exemption levels are exempt from
of ths
to
branches or agencies
reponing forms and Instfudions
Data Management, Otilce
of
may be
of
foreign
official
obtained (rom the Oflloe of
the Assistant Secretary for Economic Policy, Department of
the Treasury, Washington. D.C. 20220. or from
district
Federal Resenre banks.
Quarteriy reports are
and commercial concerns,
other depository
enterprises if their
filed
by exporters, importers, industrial
financial institutions other than banks,
institutions,
liabilities to,
brokers, and other nonbanking
or claims on, unaffiliated foreigners at
quarterend amount to $10 million or more. Nonbanking enterprises
also report for each monthend their U.S. dollar-denominated deposit
and certificates of deposit claims of $10 million or more on banks
abroad.
Description of Statistics
presents data on liabilities to foreigners reported by
Section
banks, other depository institutions, brokers, and dealers in the
United States. Liabilities denominated in dollars are reported
monthly; those denominated in foreign currencies are reported
I
quarterly.
Respondents report
certain of their
own
liabilities
and
all
of
custody liabilities to foreigners. Effective as of January 31,
1985, savings and loan associations and other thrift institutions
began to file the TIC banking forms. Previously they had reported on
TIC forms for nonbanking enterprises.
their
Section II presents the claims on foreigners reported by banks,
other depository institutions, and brokers and dealers in the United
States. Banks' claims held for their own account are available in a
monthly series. Data on claims held for their domestic customers are
collected on a quarteriy basis only. Maturity data are on a time
remaining to maturity basis. Foreign currency claims are also
collected
on a quarterly basis
only. This claims
coverage also ex-
85
CAPITAL MOVEMENTS
fends to certain items in the hands of brokers and dealers in the
United States. See notes to section above concerning the reporting
information from the TIC reports with data from the monthly Federal
Reserve 2502 reports submitted for major foreign branches of U.S.
and nonmarketable U.S. Treasury bonds and notes,
series, which are shown in the "International
Financial Statistics" section, table IFS-3). The data cover new issues
of securities, transactions in outstanding issues, and redemptions of
securities. They include transactions executed in the United States
for the account of foreigners, and transactions executed abroad for
the account of reporting institutions and their domestic customers.
The data include some transactions which are classified as direct
investments in the balance of payments accounts.
banks. Other supplementary data on U.S. banks' dollar liabilities to,
dollar claims on, countries not regularly reported
separately are available semiannually in the June and December
issues of the Treasury Bulletin.
The geographical breakdown of the data on securities
transactions shows the country of domicile of the foreign buyers and
sellers of the securities; in the case of outstanding issues, this may
I
of
thrift institutions.
Section
III
includes supplementary statistics on U.S. banks'
and claims on, foreigners. The supplementary data on
banks' loans and credits to nonbank foreigners combine selected
liabilities to,
and banks' own
foreign series;
foreign
differ
Section IV shows the
foreigners
by
exporters,
liabilities to,
importers,
and claims on, unaffiliated
industrial and commercial
concerns; financial institutions other than banks, other depository
institutions, and brokers; and other nonbanking enterprises in the
United States. The data exclude the intercompany accounts of
nonbanking enterprises in the United States with their own branches
and subsidiaries abroad or with their foreign parent companies.
(Such transactions are reported by business enterprises to the
Department of Commerce on its direct investment forms.) The data
also exclude claims held through banks in the United States.
currency
from the country of the original issuer. The gross figures
contain
some
offsetting
transactions between foreigners.
The net
figures for total transactions represent transactions by foreigners
with U.S. residents; but the net figures for transactions of individual
countries and areas may include
foreigners of different countries.
some
transactions
between
The data published in these sections do not cover all types of
reported capital movements between the United States and foreign
countries. The principal exclusions are the intercompany capital
transactions of nonbanking business enterprises in the United States
own branches and subsidiaries abroad or with their foreign
with their
V
contains data on transactions in all types of long-term
1
year or more) domestic and foreign securities
with foreigners as reported by banks, brokers, and other entities in
the United States (except nonmarketable U.S. Treasury notes,
Section
(original maturity of
parent companies, and capital transactions of the U.S. Government.
Consolidated data on all types of international capital transactions
are published by the Department of Commerce in its regular reports
on the U.S. balance of payments.
86
CAPITAL
Section
I.
—
Liabilities to Foreigners
Table
CM-l-1. -
MOVEMENTS
Reported by Banks
Total Liabilities by
Type
[In millions of dollars]
In
the United States
of Holder
87
CAPITAL MOVEMENTS
TO FOREIGNERS
CALENDAR YEARS 1986-91
LIABILITIES
Reported by International Banking
Facilities
and by Banks
in
the
United States
850
800
750
International
Banking
Facilities
-i
I
n
700
-
B
650
-.
600
-.
550
-i
Banks
I
I
'
500
-i
o
n
450 ^
s
400
-.
350
^
300
-
f
^ 250
-i
o
1
200 ^
I
a
r
150
-=
100
^
s
50 4
1986
1987
1988
1989
END OF PERIOD
1990
1991, 1st Qtr.
88
CAPITAL
Table
CM-l-2. -
MOVEMENTS
Total Liabilities by Type, Payable in Dollars
Part A
[In
-
Foreign Countries
millions of dollars]
1
89
CAPITAL MOVEMENTS
Table
CM-l-3. -
Total Liabilities by Country
[Position at end of period in millions of clQl1a _rs]_
Cal endar
Country
Europe:
Austria
982
gium-Luxembourg
Bulgaria
Czechoslovakia
Denmark
Finland
France
German Democratic Republic
Germany
Greece
Hungary
Ireland
Bel
Italy
Netherlands
Norway
Pol and
Portugal
Romani a
Spain
Sweden
Switzerland
Turkey
United Kingdom
U.S.S.R
Yugosl avi a
Other Europe
Total
Europe
Canada
Latin America and Caribbean:
Argentina
Bahamas
Bermuda
Brazil
British West Indies
Chile
Col ombi
a
Cuba
Ecuador
Gua temal
Ja ma i ca
a
Mexico
Netherlands Antil les
Panama
Pe ru
Trinidad and Tobago
Uruguay
Venezuel a
Other Latin America
and Ca ri bbean
Total Latin America
and Caribbean
Asia:
China:
Mainland
Ta wan
Hong Kong
i
India
Indonesi
Israel
a
Japan
Korea
Lebanon
Mai aysi
a
Pakistan
Phi
ppi nes
1
Singapore
Syri
a
Thailand
Oi -export ng countries
Other Asia
1
i
\J
Asia
Total
Africa:
Egypt
Ghana
Li
beri
a
Morocco
South Africa
Zai re
Oil-exporting countries^/
Other Africa
To tal
Africa
Other countries:
Australia
A1
other
1
Total
other countries....
Total
foreign countries..
International and regional:
International
European regional
Latin American regional...
Asian regional
African regional
Middle Eastern regional...
Total
int'l
Grand total
and regional.
year
s
s
90
CAPITAL MOVEMENTS
Table CM-l-4. - Total Liabilities by Type and Country, as of Mar.
31,
1991. Preliminary
[Position in millions of dollars]
Total
liabillt
i
Liabilities payable in dollars
e
foreign
official institutions and
unaffiliated foreign banlcs
To
Totals
Country
Payable
in
Payable
in
Total
II)
Europe:
Austria
Belgium-LuKembourg
Bui garla
Czechoslovakia
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Netherlands
Norway
Poland
Portugal
Romania
Spain
Sweden
Switzerland
Turkey
United Kingdom
U.S.S.B
Yugoslavia
Other Europe
Total Europe
Canada
1,807
15,221
62
137
1,153
721
31,859
13, 895
1,274
235
1,169
20,648
7,5 96
2,126
2.214
2,827
Total Latin America
and Caribbean
142
142
848
10,924
848
9,450
287,958
8,002
97,299
3,126
6,561
156,405
3,076
3,803
7
1,333
1,633
268
17,938
7,895
4,578
1,379
413
2,565
13,431
6,782
336,491
3,044
11,224
18,030
India
1,179
1,948
2,969
73,452
2,226
395
1,287
667
1,614
15.005
Japan
Korea
Lebanon
Malaysia
Pakistan
Philippines
Singapore
Syria
Thailand
Other Asia
Total Asia
Africa:
Egypt
Ghana
Liberia
Morocco
South Africa
Zaire
Other Africa
180
2,405
18,292
153,918
1,475
148
463
91
313
52
2.430
Total Africa
Other countries:
Austral la
All other
Total other countries..
Total
foreign countries
International and regional:
International
European regional
Latin American regional
Asian regional
African regional
Middle Eastern regional
Total international
and regional
Grand total
989
662
28,211
9,076
746
235
1,095
17.368
6.204
2.121
2.214
2.778
74
U8,357
4,844
76
1.229
240
75
*_
6.465
818,453
13)
Short-
175
3,076
1.462
10,657
(51
16)
(7)
170
1,488
112
166
725
4.880
62
135
3,648
4,820
528
815
576
16,888
7,318
688
75
231
801
164
59
3,279
1,392
49
8,132
5,363
594
482
413
323
,757
58
293
9,236
841
1,527
1,733
2,365
3
3,153
96
15,419
5,404
1,050
12,376
878
93,782
135
594
9,077
4.531
110
26.238
602
9.156
7
255
374
55
60
30
457
340
89
30
59
13
240
213
540
92
841
82
5.861
3.085
88
113)
2
148
57
269
10,649
,456
403
293
3,269
2,002
40
95
151
97
27
47
308
2,515
1,438
1,263
355
109
940
4,441
194
79
3,317
295
22,885
21,838
2,016
516
4.379
410
10.625
1
582
5,849
36
3
100
7,149
949
148
296
407
255
3
351
1,355
781
23
132
95
66
71
39
58
313
159
41
19
1
369
96
6,263
52
106
57.175
454
854
14
28
153
862
10
29
,207
8
6
182
215
7
6.022
169
15
46
117
9
252
330
17
199
48
V
112)
3,022
150
8,523
189
369
1,723
2,292
3.329
2,551
(11)
Time 2J tions
398
16
153
obi igaDeinand
42
94
1
ShortNegotiaterm U.S. Other ble Cos
Treasury lia- held for
t
2,468
90
125
416
766
1101
i
103
5
174
86
(9)
offices
Depos
649
5
73
228
(8)
banks'
own
f orei gn
Memorandu
other foreigners
To all
to
Banlcs'
term U.S. Otiier
own
Custody
Deposi ts
Treasury lialiabil- llabilobl i gabi 1ities
ities
Demand Time 2/ tions 3/
ities
14)
62
137
9,934
1,159
38,613
1,480
102,938
Mainland
Taiwan
Hong Kong
Indonesia
1,632
12,145
74
Asia:
China:
Israel
121
10,162
1,163
41,767
1,576
24,361
Latin flnerica and Caribbean:
Argentina
Bahamas
Bermuda
Brazi 1
British West Indies
Chile
Colombi a
Cuba
Ecuador
Guatemala
Jamaica
Mexico
Netherlands Antilles
Panama
Peru
Trinidad and Tobago
Uruguay
Venezuela
Other Latin America
and Caribbean
dollars
foreign
currencies 1/
Liabi 1i ties
bi
1
-
all
f
or-
ities eigners
(14)
115)
91
CAPITAL MOVEMENTS
Section
II.
-
Claims on Foreigners Reported by Banks
Table
CM-ll-1. -
in
the United States
Total Claims by Type
[Position at end of period in mill ions of dollars]
Calendar
Type of claim
92
CAPITAL MOVEMENTS
CLAIMS ON FOREIGNERS
CALENDAR YEARS
Reported by International Banking
1985-90
Facilities
and by Banks
in
the
United States
1985
1986
1987
1988
END OF PERIOD
1989
1990
(Preliminary)
93
CAPITAL MOVEMENTS
Table CM-ll-2. - Total Claims by Country
[Position at end of period in millions of dollars]
Country
Calendar
year
1938
Europe:
Austria
Bel gium- Luxembourg
Bulgaria
Czechoslovakia
Denmark
Finland
France
German Democratic Republic
Germany
Greece
Hungary
Irel and
Italy
Netherlands
Norway
Po1 and
Portugal
Romania
Spai
n
Sweden
Switzerland
Turkey
United Kingdom
U.S.S.R
Yugoslavia
Other Europe
Total Europe
Canada
Latin America and Caribbean:
Argent ina
Bahanas
Bermuda
Brazi 1
British West Indies
Chile
Colombi a
Cuba
Ecuador
Guatema!
J a ma
i
a
ca
Mexico
Netherlands Antilles
Panama
Peru
Trinidad and Tobago
Uruguay
Venezuel a
Other Latin America
and Caribbean
Total Latin America
and Caribbean
Asia:
Chi na:
Mainland
Taiwan
Hong Kong
India
Indonesi
Israel
a
Japan
Korea
Lebanon
Mai aysia
Paki Stan
Phi 1 1 ppi nes
Si ngapore
Syri
a
Thailand
Oil -exporting countries XJ
Other Asia
Total Asia
Africa:
Egypt
Ghana
Li beri
a
Morocco
South (Africa
Zai re
Oil-exporting countries 2J
Other Africa
Total
Africa
Other countries:
Austral i a
All other
Total
other countries....
Total
foreign countries..
International and regional:
International
European regional
Latin American regional...
Asian regional
African regional
Middle Eastern regional...
Total
int'l
Grand total
and regional.
June
602
r
Sept.
Sept.
94
CAPITAL MOVEMENTS
Table CM-ll-3.
-
Total Claims on Foreigners
by Type and Country Reported by Banks
in
the United States, as of Dec. 31, 1990
[Position at end of period in millions of doMars]
Claims of banks'
domes ti c customers
Reporting banks' own claims
Memorandum
On foreign
pub! i c
Country
Total
claims
Total
banks'
own
claims
(2)
Europe
Austria
Belgium- Luxembourg
Bulgaria
Czechoslovakia
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
:
528
6.788
83
60
1,168
1
.784
17,865
7.024
775
190
531
Italy
9.864
Netherlands
2,5 09
Norway
Poland
Portugal
Romania
Spain
Sweden
Switzerland
Turkey
United Kingdom
U.S.S.R
Yugoslavia
Other Europe
Total
Europe
874
212
717
6
3,082
4,3 23
6,234
3,429
101,864
717
1,161
1,823
173,611
Canada
19,933
Latin America and Caribbean:
Argent! na
Bahamas
Bermuda
Brazil
British West Indies
Chile
Colombia
Cuba
Ecuador
Guatemala
Jamaica
7,414
79,153
4.103
18,771
106,175
3,538
2,715
1,479
211
242
Mexico
Netherlands Antilles
Panama
Peru
Trinidad and Tobago
Uruguay
Venezuela
Other Latin America
and Caribbean
Total Latin America
and Caribbean
15,793
9,053
1
,708
698
232
807
2,909
1
,2 58
255,257
Asia:
China:
Mainland
Taiwan
Hong Kong
643
2.021
13.454
711
India
954
6.200
131.358
5.856
Indonesia
Israel
Japan
Korea
Lebanon
Malaysia
Pakistan
Philippines
Singapore
Syria
Thailand
Other Asia
Total
70
337
1,227
1,248
12,338
51
1.624
12,440
191. 029
Asia
Africa:
Egypt
Ghana
Liberia
Morocco
South Africa
Zaire
Other Africa
388
Z
916
68
2
1,545
16
2,186
Total Africa
Other countries:
Australia
Al
1
othe--
Total
other countries...
Total
foreign countries
International and regional:
International
Furnppan regional
Latin American regional
Asian regional
African regional
Middle Eastern regional
Total
int'l
Grand total
and regional
649.330
4,877
2
51
14
11
-_
4.955
654,285
408
borrowers
Payable
Customers'
1
and
On own
in
unaffiliated
foreigners
foreign
offices
foreign
currencies
(3)
(4)
(5)
Payable
Payabl
i abi 1 i ty
on accept-
ances
(6)
Total
(7)
e
i
n
in
f
orei gn
dollars
currencies
(8)
(9)
95
CAPITAL MOVEMENTS
Section
III.
- Supplementary
Liabilities
Table CM-lll-1.
-
and Claims Data Reported by Banks
Dollar Claims on
in
the United States
Nonbank Foreigners
[Position at end of period in millions of dollars]
Dollar claims of U.S. offices
Total
End of c al endar
yea r or month
dol
1
ar
claims on nonbank foreigners
(1)
.
96
CAPITAL MOVEMENTS
Table CM-lll-2.
in
-
Dollar Liabilities to, and Dollar Claims on, Foreigners
Countries and Areas Not Regularly Reported Separately
[Position at end of period in millions of
Total
Calendar year
Country
1987
Other Europe:
Cyprus
Iceland....
Ireland.
Monac
.
.
Other Latin America and Caribbean;
Aruba
Barbados
Belize
Bol
1
via
Costa Rica
Dominica
Dominican Republic
El Salvador
French West Indies and French Suiana.
Guyana
Haiti
Honduras
Micarajja
Paraguay
Suriname
Other Asia:
Afghanistan
Bangl adesh
Brunei
Burma
Canbodia (formerly Kampuchea).
Jordan
Macau
Nepal
Sri Lanka
Vietnam
Yemen (Aden)
Yemen
(Sanaa)
59
86
324
111
86
19
544
98
26
31
208
215
34
32
436
661
275
699
691
423
678
37
20
211
235
609
87
520
96
211
575
94
540
58
66
99
18
14
18
344
738
51
69
97
14
4
7
187
22
25
45
161
208
30
74
44
155
37
18
19
23
Other Africa:
Angol a
Burundi
Cameroon
Dj ibouti
Ethiopia, Including Eritrea.
Gul nea
Ivory Coast
Kenya
Madagascar
Mauritania
Mauritius
Mozambique
N1 ger
Rwanda
Senegal
Somal
i
a
Sudan
Tanzania
Tunisia
Uganda
Zambi
a
Zimbabwe
other:
Fiji
Marshall Islands
New Zealand
Papua New Guinea
U.S. Trust Territory
of the Pacific Islands
Vanuatu (formerly New Hebrides).
liabilities
22
60
15
16
12
51
27
10
97
32
65
37
85
63
71
14
9
30
5
69
85
13
13
50
2
3
15
14
10
27
10
37
58
25
66
51
42
30
45
33
29
58
68
31
All
22
1
648
480
29
31
133
153
10
9
198
40
do
1
1
ars]
Total banlcs'
1990
Calendar year
1937
1933
own claims
:
:::
:
97
CAPITAL
Section
IV.
-
Liabilities to,
MOVEMENTS
and Claims on, Foreigners Reported by Nonbanking Business Enterprises
Table
CM-IV-1. -
in
the United States
Total Liabilities and Claims by Type
[Position at end of period in millions of dollars]
Calendar year
Type of
Total
1
1
abi
1
i
ty
liabilities
Pay able in dollars
Financial
Commerci a 1
Trade payables
Advance receipts and other
Payable in foreign currencies
Financial
Commerc i al
Trade payables
Advance receipts and other
Total
claims
Payable in dollars
Fi nanci al
Deposits
Other
Commerc al
Trade receivables
Advance payments and other
i
Payable in foreign currencies
Financial
Deposits
Other
Commerci al
Trade receivables
Advance payments and other
:
1989
1990
or claim
1986
1987
25,587
28,302
21,749
9,609
1988
r
32,952
Dec.
r
38,6 53
Mar.
r
38,832
June
r
Sept.
39,5 42
44,657
Dec.
p
42,180
98
CAPITAL MOVEMENTS
Table
CM-IV-2. -
Total Liabilities by Country
[Position at end of period
Cal endar
in
millions of dollars]
year
Sept.
Europe:
Austria
Belgium- Luxembourg
Bulgaria
58
411
Czechoslovakia
Denmark
Finland
France
German Democratic Republic
Germany
Greece
Hungary
Ireland
Italy
Netherlands
Norway
Poland
Portugal
Romania
Spain
Sweden
Switzerland
Turkey
United Kingdom
U.S.S.R
Yugoslavia
Other Flurope
Total
2
*
21
236
1.3 09
18
983
70
9
n.a.
352
1.224
2
36
2
2
58
220
136
989
26
5,281
4
30
9_7_
11,774
Europe
Canada
2,288
Latin America and Caribbean:
72
Argentina
Bahamas
Bermuda
Brazi
1,135
81
87
1
1,887
British West Indies
Chile
Colombia
Cuba
Ecuador
Guatemal a
Jamaica
Mexico
Netherlands Antilles
Panama
Peru
Trinidad and Tobago
Uruguay
Venezuela
Other Latin America
and Caribbean
10
7 7
•
8
4
3
446
115
49
12
10
11
216
50^
Total Latin America
and Caribbean
4,272
Asia:
China:
Mainland
Taiwan
Hong Kong
232
140
175
39
India
130
198
2.997
631
Indonesia
Israel
Japan
Korea
Lebanon
Malaysia
Pakistan
Phil ppines
Singapore
Syria
Thailand
01 1 -exporti ng countries
Other Asia
1
42
14
2 2
i
Total
184
2
l_/
Asia
40
2.911
103^
7,861
Africa
Egypt
Ghana
Liberia
Morocco
South Africa
Zaire
Oil-exporting countries^/
Other Africa
:
156
*
2
3
141
1
238
59
Total Africa
Other countries:
Austral la
All other
Total
other countries....
Total
foreign countries..
International and regional:
International
European regional
Latin American regional
Asian regional
African regional
Middle Eastern regional
Total
int'l
Grand total
and regional
443
18
1
-_
462
27,825
26
99
CAPITAL MOVEMENTS
Table CM-IV-3. - Total Liabilities by Type and Country, as of Dec.
31.
1990, Preliminary
tPosition at end of period in millions of dollars]
Financial
Country
Total
liabilities
F
i
n
1
a n
fi
France
Germany
Greece
Hungary
Ireland
ti es
Payable
in foreign
currenci es
n
Sweden
Switzerland
Turltey
i
25
344
11
14
331
13
9
7
7
2
15
15
100
160
1,921
1,911
181
67
670
676
67
577
583
100
93
1,251
1,235
181
n.a.
55
975
257
n.a.
20
727
257
17
17
94
93
.
a
.
600
1,814
875
33
38
34
532
403
1,311
n.a.
34
248
44
285
8,615
2
20
182
394
5,623
173
65
69
396
Latin America and Caribbean:
Brazil
British West Indies
Chile
Colombia
Cuba
Ecuador
Guatemala
Jamaica
Mexico
Netherlands Ant i lies
Panama
Peru
Trinidad and Tobago
Uruguay
Venezuela
Other Latin America and Caribbean.
30
355
538
137
2,304
23
19
15
5
3
425
5
1
6 34
611
611
399
584
808
545
536
27
1
21
13
24
10
125
152
Total Latin America and Caribbean
Asia:
China:
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Lebanon
Malaysia
Palcistan
Philippines
Singapore
Sy ri a
Thailand
Other Asia
Asia
Africa:
Egypt
Ghana
Liberia
6,862
3,256
1,515
333
99
38
289
36
277
1,787
20
122
11
523
Total other countries
foreign countries
international and regional.
1
617
Other countries:
Australia
All other
Grand total
1,636
8
Total Africa
International and regional:
International
European regional
Latin American regional
Asian regional
African regional
Middle Eastern regional
1,620
333
3
1
Morocco
South Africa
Zaire
Other Africa
1
127
173
13.359
184
41
545
838
617
38
34
511
403
735
53
2,819
65
69
Total Europe
Argent ina
Bahamas
Bermuda
n.a.
16
Canada
Total
iabil
69
629
53
United Kingdom
U.S.S.R
Yugoslavia
Other Europe
Total
1
8
Netherlands
Norway
Poland
Portugal
Romania
To ta]
Comiiierc
(3)
n
Italy
Spai
Payable
in dollars
i
(2)
Europe:
Austria
Belgium- Luxembourg
Bulgaria
Czechoslovakia
Denmark
Total
Habil
4,434
3
2
3
2,781
1,653
i
a
1
tie
.
.
.
100
CAPITAL MOVEMENTS
Table
CM-IV-4. -
Total Claims by Country
[Position at end of period in millions of dollars
Cal enda
r
]
y ear
Country
Sept.
Europe:
Austria
um-Luxembourg
Bulgaria
Czechoslovakia
Denmark
Finland
France
German Democratic Republic.
Germany
Greece
Hungary
Irel and
Italy
Netherlands
Bel gi
No rway
Poland
Portugal
Romani a
Spain
Sweden
Switzerland
Turkey
United Kingdom
U.S.S.R
Yugoslavia
Other Europe
Total
24
174
33
184
207
42
269
240
43
334
5
7
5
4
9
7
7
16
74
4
1
7
56
30
64
55
611
62
83
568
983
6
22
8
669
560
664
no
77
71
13
.
a
.
n. a
.
n. a
.
472
446
458
315
472
483
150
123
126
52
32
36
52
215
286
10
e
42
57
41
72
42
60
63
103
874
69
75
1,108
1,155
1,049
1,283
1,663
12
17
10
23
6
789
43
879
1,204
57
15
44
20
755
60
735
79
15
n.
n. a
591
559
139
a
n
.
676
.
a
781
190
a
Cuba
Ecuador
Guatema! a
Jamaica
Mexico
Netherlands Antilles.
Panama
Peru
Trinidad and Tobago..
Uruguay
Venezuel a
Other Latin America
and Cari bbean
n. a
.
578
807
166
.
537
805
202
a
Ja pan
Korea
Lebanon
Hal aysi
a
Pakistan
18
12
11
9
127
142
4
22
9
8
14
27
179
205
141
206
130
249
254
111
400
114
255
219
392
95
7,277
122
23
329
203
372
129
204
24
277
192
475
124
96
10,142
8,645
8,045
149
120
84
161
133
96
177
160
39
52
81
259
145
562
110
6,506
10,854
.539
10,364
7,607
14
64
105
159
70
54
177
75
96
146
161
83
135
59
402
196
81
127
141
161
171
2,711
99
284
4,577
2,656
193
320
2,012
1,882
248
4,460
119
6,1 18
63
193
1,573
330
516
5,466
1
1
1
69
42
44
690
29
248
38
72
36
47
587
65
33
75
28
97
45
52
54
101
109
76
177
288
65
207
540
66
345
5,784
88
193
87
211
247
310
158
,008
287
318
4,862
4,050
4,245
94
95
140
135
1
168
,684
141
2
99
47
45
612
43
82
35
49
603
48
48
80
94
39
44
677
45
43
56
1
1
145
,002
344
322
94
1
1
94
43
33
95
34
32
734
808
40
38
53
10
6
9
21
12
16
10
13
6
9
52
46
57
24
10
204
258
302
248
167
209
242
246
277
261
296
325
361
180
179
211
60
116
221
1,491
178
131
121
133
186
118
314
217
110
171
81
123
347
193
133
91
186
,881
248
33
196
221
114
122
165
9
9
53
26
53
55
44
4
Thailand
48
642
84
54
-exporti ng countri es
Other Asia
1
Total
_!_/.
Asia.
570
100
42
126
18
47
195
17
Africa:
Egypt
Ghana
Morocco
South Africa.
Zaire
01 l-exporti ng
ountries 2/.
Other Africa..
1,763
248
17
37
43
55
200
10
32
458
81
1,521
291
119
121
429
180
123
414
133
372
159
164
143
88
123
1,477
383
133
113
179
1,623
369
9
11
7
5
61
42
49
53
37
51
54
45
60
52
32
68
335
42
83
523
83
305
428
473
54
77
58
91
48
115
439
85
420
412
81
37
4,020
4,235
4,309
91
98
8
50
458
89
109
81
125
1
5
1
1
4
5
3
12
9
16
11
12
97
16
84
62
85
115
3
3
16
166
136
14
151
114
11
160
132
144
119
117
94
188
1,661
329
11
196
3
101
139
1,553
384
54
40
61
201
3,794
3,713
Li berl a
16
9
95
16
I
1
15
10
15
14
83
14
106
102
11
78
103
203
100
129
132
IS
12
10
16
10
15
16
29,815
31,577
30,886
Total Africa.
Other countries:
Austral la
All other
Total other countries....
Total
foreign countries..
International and regional:
International
European regional
Latin American regional...
Asian regional
African regional
Middle Eastern regional...
Total
1nt'l
Grand total
.
11
40
210
Oi
a
122
2
ippi nes
.
607
882
214
8
160
1
n
15
Si ngapore
Syria
Phi
.
67
18
9
Asia:
China:
Indonesi
Israel
a
1,175
7
Total Latin America
and Cari bbean
India
.
5
27
Mainland
Taiwan
Hong Kong
51
n
14
16
n. a
.
544
765
153
10,462
.
10
16
14
4
11
10
29
Europe.
9
6
n
358
Latin America and Caribbean:
Argenti na
Bahamas
Bermuda
Brazi 1
British Hest Indies.
Chile
Col ombi
55
185
3
6
33
12
17
and regional.
23
95
9
296
241
622
206
.
101
CAPITAL MOVEMENTS
Table CM-IV-5. - Total Claims by Type and Country, as of Dec.
31,
1990, Preliminary
[Position at end of period in millions of dollars]
Fi
nanc
i
a
1
da
i
ms
Denomi nated
Country
Total
claims
Denomi nated
Total
in
dollars
i
n
f Orel
gn
currencies
Commerci
cl ai ms
(2)
Europe:
Austria
Belgium- Luxembourg
Bulgaria
Czechoslovakia
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Netherlands
Norway
Pol and
Portugal
Romania
Spain
Sweden
Switzerland
Turkey
United Kingdom
U.S.S.R
Yugoslavia
Other Europe
Total
52
6
5
286
76
70
6
4
10
16
63
51
5
2
1,663
1,175
366
371
331
334
67
18
1
n
.
607
882
214
2
2
35
37
1
*
n.a.
a
46
210
13
2
n.a.
10
333
322
11
31
26
5
23
95
n.a.
41
40
12
29
9
5
4
206
113
320
96
1
8,045
.246
5,631
177
160
206
Europe
Canada
Latin America and Caribbean:
Argentina
Bahamas
Bermuda
Brazil
British West Indies
Chile
Col ombi
a
Cuba
Ecuador
Guatemala
Jamaica
Mexico
Netherlands Antilles
164
1,275
252
389
4.069
106
136
18
18
1.261
1,259
3
2
68
67
1
4,031
3,962
69
5
5
31
31
96
33
34
57
57
1
1
805
160
34
157
34
1
51
3
3
Panama
Peru
Trinidad and Tobago
Uruguay
Venezuela
Other Latin America and Caribbean.
216
283
25
28
Latin America and Caribbean
3,067
5,751
162
378
236
132
124
190
,279
376
29
133
13
15
28
126
7
10
3
1
1
15
*
Total
69
51
25
13
11
13
1
25
26
Asia:
China:
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Lebanon
Malaysia
Pakistan
Philippines
Singapore
Syria
Thailand
Other Asia
11
22
18
4
850
637
213
20
*
19
1
*
3
2
1
10
1
10
5
2
3
459
50
44
6
11
12
9
2
9
3
14
14
10
9
503
Total Asia
Africa:
Egypt
Ghana
Liberia
Morocco
South Africa
Zaire
Other Africa
Total
120
1
15
13
99
25
252
Africa
Other countries:
Australia
Al 1 other
Total
other countries
Total
foreign countries
International and regional:
International
European regional
Latin American regional
Asian regional
African regional
Middle Eastern regional
Total
international and regional.
Grand total
1
45
60
75
52
126
16
33
1,297
804
66
18
n.a.
595
549
183
23
52
8
9
296
241
622
10
16
57
47
255
232
302
95
1,799
177
al
102
CAPITAL MOVEIVIENTS
Section
V.
-
Transactions
Table
[In millions
of
in
Long-Term Securities by Foreigners Reported by Banks and Brokers
CM-V— 1. —
Foreign Purchases and Sales of Long-Term Domestic
dollars; negative figures Indicate net sales by foreigners or
a
in
the United States
Securities by Type
net outflow of capital
from the United States]
103
CAPITAL MOVEMENTS
Table
['"
mniions
CM-V-3. -
of dol lars;
Net Foreign Transactions
m
Long-Term Domestic Securities by Type and Country
negative figures Indicate net sales by foreigners or
Marketable Treasury
bonds and note s
1990
j
U.S. Gov't corporations
and Federal agency bonds
1990
1991
Country
net outfloa of capital
from the United States]
Corporate bonds
1991
1990
Corporate stocks
1990
1991
1991
Calendar Oct.
Jan.
Calendar Oct.
Jan.
Calendar Oct.
Jan.
Calendar Oct.
Jan.
year
through through year
through through year
through through year
through through
1990
Oec.
Har. p
1990
Dec.
Mar. p
1990
Dec.
Mar. p
1990
Dec.
Har. p
Europe;
«"5tria
flhla"<l
France
German Democratic Republic...
Sfnishy
Greece
"ungsrj
•"Eland
Italy
37
42
•
-101
50
S24
19
-2
216
-
-
-
-6
47
-6
2.240
1.205
305
1.969
697
271
-67
537
n.a.
594
-685
-945
n.a.
2,829
-25
-5
266
6
5.732
238
2
38
4
-8
255
-
-22
-2
-70
n.a.
-3
-76
-2.841
-16
-15
-767
-4
-77
-21
-333
-739
-175
-16
.
-7
4
•
213
-13
102
272
-79
-64
5
1
-34
-24
335
-18
n.a.
-132
475
n.a.
216
-288
•
•
2
2
-1.234
-25
-368
-13
*
23
n.a.
-5.606
39
-3
-13
86
-68
*
6
11
3
4
-2
•
-J
10
10
-12
1
-7
343
172
-13
170
13
1
10
465
365
1.012
104
-78
-62
-42
988
-392
22
713
150
180
7
2
•
•
5
2
-364
-2
10
59
-51
-14
-U
-8
n
a
102
n
-245
a
-318
-1
7
•
4
•
-22
-11
68
.*.
•*-.i_i.
1*
--- .». .*,
*__ .»*
Netherlands
Norway
Poland
Portugal
Romania
Spafh
S"eden
S«it!erland
Turkey
United Kingdom
U-S.S.R
Yugoslavia
Other Europe
Total
*•
-.- -__ *_•
Belgium-Luxembourg
Bulgaria
Czechoslovakia
Oeimark
41
216
1
-60
60
28
23
5
187
67
-398
-14
27
-86
-98
-127
4
1
4
3
3
... 8-12 81«
I** .*- ... ...
6.824
3.681
-862
778
-154
3.289
6
-146
155
-58
-66
-136
-42
753
-23
35
-360
-1.309
1.382
1.160
813
-62
-3.121
1.966
772
-228
8.494
2.733
11
-
-
19
-
.
.
-
-399
344
211
-8
-5
-1
9
1.142
112
500
Europe
654
-58
-207
359
-21
343
-10
-2.867
-645
-2 992
.32
-820
.32
-90
.
-1
^1
-53
.30
.13
9
146
1
020
27
3
158
-808
.
6.776
K_721
3,349
1.409
-49
6.915
2.153
1.886
-8.498
-2.484
-1.154
-4,558
-950
-1,074
715
-126
14
1,191
260
547
892
650
778
-32
613
1,733
93
454
442
9
5
U
1
-3
232
872
-226
97
34
1
137
572
324
69
-134
35
-8
68
151
175
55
-5
24
45
-6
268
43
l_9j^96_
<:s"3li
919
Latin America and Caribbean;
•'gentlna
Bahamas
Bermuda
Brazil
British West Indies
Chile
Cd'ombia
Cuba
Ecuador
Guatemala
Jamaica
"e«lco
Netherlands Antilles
Panama
Peru
Trinidad and Tobago
Uruguay
Venezuela
Other Latin America
and Caribbean
4
1
22
7
152
54
31
29
-303
-114
-115
224
-115
23
45
4
5
47
393
128
179
5
6
1
12
36
12
10
18
9
.-_
...
...
...
423
*-l-llll
83«
6«4
'-1-1
712
222
1-1-6
-1*1
11 2-11
12* 5.-1
1** 1**
3*.
-274
-138
201
90
219
37
853
3
-25
64
344
181
-35
159
2
-3
-13
115
30
1
1
1
2.072
7.777
-25
1,179
-3.846
-21
1.488
-10
-151
5
1
476
-42
781
18
75
-29
240
25
24
70
•
1.659
10.757
159
19
67
14
19
5
1
-1
-1
»
-1
-100
076
-3
-573
-97
-47
42
934
26
8
6
10
Total Latin America
and Caribbean
-2
48
1,060
-147
•
-1
-1
8
6
IS
12
4
•
16
15
-1
-50
8
15
-5
-10
5
-140
51
-24
-111
5
4
-237
-88
-232
-175
-17
-15
15,587
10,657
-1.324
~~~
2,412
826
-77
1.903
271
852
-1,337
-346
1.174
345
-493
2.574
273
-197
-87
-3
1
2,649
1,026
33
109
-8
-7
62
-4
-11
15
51
133
41
5
672
193
218
-
Asia:
China:
Mainland
Taiwan
"ong Kong
4.392
46
210
—
India
Indonesia
Is-^ael
Japan
Korea
Lebanon
Malaysia
Pakistan
Philippines
Singapore
Syria
Thailand
Oil-exporting countries J_/...
Other Asia
Total Asia
Africa;
Egypt
Ghana
Liberia
Morocco
South Africa
Zaire
Oil-exporting countries^/...
Other Africa
Total
Africa
Other countries;
*"5tralia
*!' other
Total other countries
Total
foreign countries
International and regional;
International
European regional
Latin American regional
Asian regional
African regional
Middle Eastern regional
Grand total
*
_1_/
Less than $500,000.
Includes Bahrain. Iran.
3
36
•
•
1
-315
-222
397
13-2
••-1-122
5
1
•
13
12
1
•
•
150
-90
19
-1
6
70
7
2
-11
23
-13
145
14.880
-7.619
389
-146
918
863
-161
359
93
680
-1,711
36
-495
-292
-2,891
221
.3
-36
-2.821
-515
-2
-6
-13
-639
-8
-2
•
4
.
.
3
3
-3
14
83
-5
-2
•
15
10
22
11
-5
-22
•
-449
-2
•
-40
576
-63
-14
9
•
-6
2,331
-84
-45
83
43
-29
101
51
291
•
-387
120
-1,111
-318
2i
-221
29
14
14
24
369
-11,047
-6,193
2,608
-42
1,110
339
39
•
••
431
3-1-1
... ...
*-- «__
••--!..
... ...
-244
74
3
-1
1
-6
2
l.'-l..
... ,|.
-26
45
-4
-4
-113
1,699
.j
.,
.j
-2,435
.12
223
-398
60
.39
28
6
-281
-1,239
-264
366
2
717
1,185
1,089
-547
-5,912
-3,583
1,825
•
3^
2**
^^2
*•*
1..
....6.
16
10
•
•
-1
.
.
-11
•
•
2
-3
12
298
101
78
41
4
-3
49
-13
-2
-63
-32
18
-4
-4
•
•
*
•
.
-5
-i
*
8
•
*
•
1
-1
4
*
2
-1
•
42
-1
8
-8
15
95
2
1
^
14
6
6
^
313
88
188
42
7
-4
54
-7
6
-63
764
620
-31
-24
2
-39
-14
^IJ
-50
79
91
30
-30
-138
6^
-5
^
-333
-42
-8
14
8^5
650
-168
il
-29
2
-375
-47
*
-298
-26
-265
20.245
11.028
1.952
6.508
3.196
602
10.872
3.720
2.745
-15.218
-5,838
2.438
191
-67
-60
33
354
-1.368
-166
170
-235
-215
15
-41
112
-15
2
-
5
-7
-6
-1
-14
26
213
-49
-
2
-316
285
-1.082
-237
-32
169
-218
-212
35
71
-38
59
19.930
11.313
870
6,270
3.164
771
10.655
3,509
2,780
-15,146
-5,876
2,496
-60
-2
243
-229
-76
-
Total
international
and regional
-10
Iraq, Kuwait,
Oman, Qatar,
Saudi
-235
-64
16
-42
-246
-19
-.- ,._
...
-15
-28
34
-29
59
--.-i-.-i.-
2_/
5
27-1
16
-1
-
2
*
•
-1
37
-8
-
Arabia and the United Arab Emirates (Trucial
Includes Algeria, Gabon, Libya and Nigeria.
States).
1
104
CAPITAL MOVEMENTS
NET PURCHASES OF LONG-TERM DOMESTIC
SECURITIES BY SELECTED COUNTRIES
Calendar Years 1987 through 1991,
45
40
I
-
35 -
n
30
-
25
-
20
-
B
i
I
I
i
o
n
15 -
s
10 -
o
f
5 -
D
o
I
-5 -
I
a
r
10
-
15
-
s
-20
First
Quarter
105
CAPITAL MOVEMENTS
Table
CM-V-4.
-
Foreign Purchases and Sales of Long-Term Securities,
by Type and Country, During First Quarter 1991, Preliminary
[In
nil
1 i
ons of dpi Idrs]
Gross purchases by foreigners
Gross sales by foreigners
Domestic securi ties
Domestic securi ties
Market-
Market-
Bonds
of U.S.
Gov't
corp
Financ- and fedable
Treas-
ury «
Tederal
ng
e ra
Corporate
y
Bank
sponand other
bonds
sored
8 notes agencies Bonds
Stocks
1
Total
pur-
chases
(1)
1 1
(2)
(3)
(4)
(5)
Foreign
securi ties
Total
Bonds
(61
Stocks
(7)
sales
(8)
106
CAPITAL MOVEMENTS
Table
CM-V-5.
- Foreign
Purchases and Sales of Long-Term Securities,
by Type and Country, During Calendar Year 1990
[m minions
Gross purchases by foreigners
of dollars]
107
FOREIGN CURRENCY POSITIONS
INTRODUCTION
Background
Data have been collected since 1974 on the foreign currency
banks and nonbanking firms in the United States, and on
those of foreign branches, majority-owned foreign partnerships, and
majority-owned foreign subsidiaries of U.S. banks and nonbanking
firms. Reports cover five major foreign exchange market currencies
and U.S. dollars held abroad. Reporting has been required pursuant
to title
of Public Law 93-110, an amendment to the Par Value
Modification Act of September 21, 1973, and implementing Treasury
regulations. Statistics on the positions have been published since
March 1977 beginning with data for December 1975.
positions of
II
"Majority-owned foreign partnerships" are those organized under the laws of a foreign country in which one or more nonbanking
concerns or nonprofit institutions in the United States, directly or
indirectly, own more than 50 percent profit interest. "Majority-owned
foreign subsidiaries" are foreign corporations in which one or more
nonbanking business concerns or nonprofit institutions located in the
United States, directly or indirectly, own stock with more than 50
percent of the total combined voting power of all classes of stock
entitled to vote, or more than 50 percent of the total value of all
classes of stock.
Reporting Threshold
The report forms and instructions used in the collection of bank
data were revised effective with reports as of March 16, 1983, for the
weekly reports. The most recent revision of the nonbank foreign
currency forms (see below)
day of March 1983.
Common
Definitions
became
effective as of the last business
and Concepts
The term "United States" means the States of the United
Commonwealth of Puerto Rico,
American Samoa, Midway Island, the Virgin Islands, and Wake Island. The term "foreign" means locations other than the "United
Stales." The term "worldwide" is used to describe the sum of "United
States" and "foreign" data.
States, the District of Columbia, the
The exemption level applicable to banks and banking instituwas $10 million equivalent through January 1982. when it was
raised to $100 million. The exemption level applicable to nonbanking
business concerns and nonprofit institutions was $1 million equivalent on all nonbank forms from March 1975 through November 1976.
It was raised to $2 million equivalent on the monthly reports of positions held in the United States from November 1976 through September 1978. The exemption level was raised to $3 million on foreign
subsidiary positions on June 30, 1977, and for positions held in the
United States on September 30, 1 978. The exemption level for nonbanking firms was raised to $100 million on positions in the United
States in January 1982 and on foreign branch and subsidiaries positions in March 1 982.
tions
Firms must report their entire foreign currency position
United States include amounts reported by sole
proprietorships, partnerships, and corporations in the United States
Data
for the
including the U.S. branches
and subsidiaries
nonbanking
positions," and the
of foreign
concerns, in the case of "nonbanking firms'
agencies, branches, and subsidiaries located in the United States of
foreign banks and banking institutions, in the case of the weekly
"bank positions."
Data for "foreign branches" and "abroad" include amounts reported by the branches, majority-owned partnerships, and majorityowned subsidiaries of U.S. banking and nonbanking concerns. In
general, these data do not reflect the positions of foreign parents or
foreign parents' subsidiaries located abroad except through intercompany accounts. The data include the foreign subsidiaries of a
few foreign-owned U.S.-based corporations.
specified foreign currency
if
a specified U.S.
in
a
dollar equivalent value
reached in any category of assets, liabilities, exchange contracts
bought and sold, or the net position in the currency. In general, exemption levels are applied to the entire firm. In reports on their foreign branches, majority-owned foreign partnerships, and majorityowned foreign subsidiaries, U.S. banks and nonbanks are required
to report the U.S. dollar-denominated assets, liabilities, exchange
contracts bought and sold, and net positions of those branches,
is
partnerships,
and subsidiaries with reportable
positions
in
the speci-
fied foreign currencies.
Description of Statistics
Data collected on the Treasury foreign currency forms are pubin the Treasury Bulletin in seven sections. The first section
presents a summary of worldwide net positions in all of the currencies reported. Sections
through VI each present data on a
lished
Assets, liabilities, and foreign exchange contract data are reported on the basis of time remaining to maturity as of the date of the
report, regardless of the original maturity of the instrument involved.
"Spot" means due for receipt or delivery within 2 business days from
the date of the report. "Short-term" means maturing in 1 year or less
from the date of the report.
II
specified foreign currency. Section VII presents the U.S. dollar positions of the foreign branches and subsidiaries of U.S. firms which are
required to report
in
one
or
more
of the specified foreign currencies.
108
FOREIGN CURRENCY POSITIONS
Section l.--Summary Positions
Table FCP-l-l.-Nonbanklng Firms' Positions
[In
Report
date
miHlons
of foreign
currency
units,
except yen, which
i
is In bllltons]
Canadian
German
Japanese
Swiss
British
U.S.
dollars
marks
yen
francs
pounds
dollars 4
109
FOREIGN CURRENCY POSITIONS
Section ll.--Canadlan Dollar Positions
Table FCP-ll-l.--Nonbanklng Firms' Positions
[In
Report
dale
millions of dollarsl
110
FOREIGN CURRENCY POSITIONS
Section Ili.-German Mark Positions
Table FCP-lll-l.--Nonbanking Firms' Positions
[In
Report
dale
millions ot marks]
111
Section IV.-Japanese Yen Positions
Tabie FCP-IV-1.-Nonbani<ing Firms' Positions
112
FOREIGN CURRENCY POSITIONS
Section V.-Swiss Franc Positions
Table FCP-V-1.--Nonbanklng Firms' Positions
[In millions of
Report
date
Irancs]
i
113
FOREIGN CURRENCY POSITIONS
Section Vl.--Sterling Positions
Table FCP-VI-l.-NonbankIng Firms' Positions
[In
Report
data
millions ot
pounds)
i
114
FOREIGN CURRENCY POSITIONS
Section VII.-U.S. Dollar Positions Abroad
Table FCP-VII-l.-NonbankIng Firms' Foreign Subsidiaries' Positions
[In
mllltons of dollarel
115
FOREIGN CURRENCY POSITIONS
FCP-VO
Footnotes to Tables FCP-I through
SECTION I
2
Worldwide net positions on the
business concerns
In
last
business day
of the
calendar quaner of nonbanking
the United States and their foreign branches and majortty-owned
partnerships and subsidiaries. Excludes receivables and installnient paper which have
sold
or
discounted
before
maturity,
U.S.
parent
companies'
investment
in
been
Excludes receivables and installment paper sold or discounted before maturity, fixed
(plant and equipment), and parents' investment in majority-owned foreign
assets
subsidiaries.
3
Capitalized plant and equipment leases are excluded.
their
Includes both spot
majority-owned foreign subsidiaries, fixed assets {plant and equipment), and capitalized
5
leases tor plant and equipment.
2
banks and banking
institutions In the
their foreign
and
liabilities.
and forward exchange
and 3 less columns 2 and
are expressed
of
United States,
dollar.
and
1
rates.
4.
Representative rates on the report date. Canadian dollar and United Kingdom pound rates
Foreign branches and majority-owned partnerships and subsidiaries only.
Weekly worldwide net positions
Columns
U.S. dollars per unit of foreign currency,
in
The source
of the
branches and majority-owned foreign subsidiaries. Excludes capital assets
Banks and banking
majority-owned
institutions
subsidiaries. In
Foreign branches and majority -owned subsidiaries only.
in
section
Vll,
foreign
Excludes capital assets.
g
VII
Excludes capital
liabilities.
Includes both spot and fonward exchange contracts.
Positions of nonbanking business concerns
In
the United States and their foreign
branches and majority-owned partnerships and subsidiaries.
foreign branches
In
and majority-owned partnerships and subskiiaries
section Vll positions of
only.
Columns 3 and 9
See footnote
6.
less
others
in
foreign units per U.S.
of
June 30, 1988.
the United States and their foreign branches and
subsidiaries only.
SECTIONS 11 THROUGH
all
automated representative rates changed as
columns 6 and
1
2.
branches
and
majority-owned
116
EXCHANGE STABILIZATION FUND
INTRODUCTION
ments as liabilities, they must be redeemed by the ESF only in the
event of liquidation of, or U.S. withdrawal from, the SDR Department
Background
The Exchange
Stabilization
Fund (ESF) was established under
of the
IMF
or cancellation of
SDRs.
the Gold Reserve Act of January 30, 1934 (31 U.S.C. 822a). This act
authorized the establishment in the Department of the Treasury of a
stabilization fund to be operated under the exclusive control of the
Secretary of the Treasury, with the approval of the President, for the
purpose of stabilizing the exchange value of the dollar. Subsequent
amendment of the Gold Reserve Act modified the original purpose
somewhat to reflect termination of the fixed exchange rate system.
SDR certificates-Issued to the Federal Reserve System
against SDRs when SDRs are "monetized" and the proceeds of the
monetization are deposited in an ESF account at the Federal Reserve Bank of New York.
Description of Tables
The resources of the fund consist of
invested in U.S. Government securities,
(SDRs), and balances of foreign currencies.
The
dollar balances, partly
special
drawing rights
sources of income or losses for the
or losses on holdings of and transactions in
foreign exchange, and the interest earned on assets.
been
principal
profits
ESF have
SDRs and
Table ESF-1 presents the assets, liabilities, and capital of the
ESF. Data are presented in U.S. dollars or U.S. dollar equivalents
based on current exchange rates computed according to the accrual
method of accounting. The capital account represents the original
capital appropriated to the ESF by Congress of $2 billion, less a
subsequent transfer of $1.8 billion to pay tor the initial U.S. quota
subscription to the IMF. Subsequent gains and losses since inception are reflected in the cumulative net income (loss) account.
Definitions
Special drawing r/g/)te.-lnternational assets created by the
International Ivlonetary Fund (IMF). They serve to increase international liquidity and provide additional international reserves, and may
be purchased and sold among eligible holders through the IMF.
SDR
allocations.-The counterpart of SDRs issued by the IMF
in the IMF. Although shown in ESF state-
based on members' quota
Table ESF-2 presents the results of operations by quarter. Data
are presented in U.S. dollars or U.S. dollar equivalents computed
according to the accrual method of accounting. The "Profit (loss) on
foreign exchange" includes realized profits (losses) on sales of foreign currencies as well as revaluation gains (losses) on currencies
held. "Adjustment for change in valuation of SDR holdings and allocations" reflects the net gain (loss) on revaluation of SDR holdings
and allocations for the quarter.
117
EXCHANGE STABILIZATION FUND
Table ESF-1 .--Balances as of Sept. 30, 1990, and Dec. 31, 1990
[In
Assets,
liabilities,
and
capital
Sept. 30, 1990
thousands
of dollars]
Sept. 30, 1990,
through
Dec. 31, 1990
Dec. 31,1990
Assets
U.S. dollars:
Held at Federal Reserve
Held with Treasury:
U.S.
Government
Bank
of
New York
securities
Other
Special drawing rights i
Foreign exchange and securities 2;
German marks
Japanese yen
Pounds sterling
Swiss francs
Honduran lempiras
Accounts receivable
Total assets
Liabilities
Current
and
,858,532
(1,271.864)
586,668
4,104
1,067,000
10,685,870
333,532
323,196
337,636
1,067,000
10,989,066
6,548,585
9,527,316
25,509
32,020
34,762
3,461,193
380,025
1,593
1,378
9,009,778
9,907,341
27,102
33,398
272,463
17,310
289,773
29,036,161
3,211,601
32,247,762
105.213
186
(34,762)
capital
liabilities:
Accounts payable
Advance from U.S. Treasury
on IMF) 3
Total current
Other
1
liabilities
liabilities:
Special drawing rights certificates
Special drawing rights allocations
Total other
liabilities
Capital:
Capital account
Net income (loss) (see tabte ESF-2)
Total capKal
Total
liabilities
and
capital
105,399
(U.S. drawing
1,067,000
1,172,213
1,067,000
SPECIAL REPORTS
U.S. Currency and Coin Outstanding
and in Circulation
122
U.S.
CURRENCY AND COIN OUTSTANDING AND
IN
CIRCULATION
INTRODUCTION
Definition of Terms
Purpose and Scope
The U.S. Currency and Coin Outstanding and
Statement
in
Circulation
prepared to inform the public of the face value of currency and coin which are used as a medium of exchange and the
total thereof, as of the end of a given accounting month.
is
The statement defines the total amount of currency and coin
outstanding and the portion of which is deemed to be in circulation.
Although it still includes some old and current rare issues of coin and
currency which do not circulate or may do so to a limited extent,
Treasury policy is to continue their inclusion in the statement since
such issues were originally intended for general circulation. The
statement also provides a brief description of the various issues of
U.S. paper money and further presents a comparative amount of
money
circulated
in
The
"Amounts outstanding and in circulation"
issues by the Bureau of the Mint which are purposely
intended as a medium of exchange. Therefore, coins sold by the
Bureau of the Mint at premium prices are excluded. However, uncirculated coin sets, sold by the Mint at face value plus a handling
charge, are included.
includes
classification
all
The term "Federal Reserve notes" refers to issues by the U.S.
Government to the public through the Federal Reserve banks and
their member banks. These notes represent U.S. Government
obligations. Currently, the item "Federal Reserve notes-amounts
outstanding" consists of new series issues. The Federal Reserve
note
is
the only class of currency currently issued.
relation to population.
"U.S. notes" are also
History
Statements of currency and coin outstanding and in circulation
have been published by the Department of the Treasury since 1888.
These statements were originally prepared monthly by the Division
of Loans and Currency, which was then under the Office of the Secretary of the Treasury but later became part of the Public Debt Service (currently known as the Bureau of the Public Debt) in 1929. The
statement was published with the title "Circulation Statement of
United States l^oney" from 1923 through December 31, 1965. Con-
December
1919, to September 30, 1951, the
Office of the U.S. Treasurer published a statement entitled "Monthly
Statement-Paper Currency of Each Denomination Outstanding."
Two months after the Office of the U.S. Treasurer assumed publication of the "Circulation Statement of United States Money," a revision
was made to the statement to include denomination detail of the
currency in circulation. Publication of the "Monthly Statement-Paper
Currency of Each Denomination Outstanding" was discontinued, and
the revised version which combines information from both statements became known as the United States Currency and Coin Outstanding and in Circulation Statement. The statement in 1983
ceased to be published as a separate, monthly release and instead
was incorporated into the quarterly Treasury Bulletin as a special
currently, from
report.
known as
legal tender notes
and were
issues; namely, (a) First lssue-1862 ($5 to
$1,000 notes), (b) Second lssue-1862 ($1 to $2 notes), (c) Third
lssue-1863 ($5 to $1,000 notes), (d) Fourth lssue-1863 ($1 to
issued
in five different
$10,000 notes), and
(e) Fifth
lssue-1901 ($10 notes).
The column for "Currency no longer issued" consists of gold
and new series), silver certificates (old and new
series). Federal Reserve notes (old and new series), national bank
notes (old and new series), and Treasury notes (1890 series).
certificates (old
"Dollar coins' include standard silver coins
and nonsilver coins.
31,
"Fractional coins" include subsidiary coins in denominations of
50 cents, 25 cents, and 10 cents and minor coins
(5 cents
and
1
cent).
Reporting Sources
Data used in the preparation of the U.S. Currency and Coin
Outstanding and in Circulation Statement is derived from monthly
reports required from Treasury offices, various U.S. Mint offices, the
Federal Reserve banks, and the Federal Reserve Board. Such reports convey information about the amount, class, and denomination
of new issues of currency and/or coin, of destroyed and replaced
currency, and of currency and coins withdrawn from circulation. Estimates of population from the Bureau of the Census are used in the
calculation of money circulated per capita.
123
U.S. Currency
and Coin Outstanding and
[Source: Financial
Management
in Circuiation
Service]
AMOUNTS OUTSTANDING AND IN CIRCULATION
Mar. 31, 1991
Currency
Coin
Total
currency and
Federai Reserve notes
Totai
coin
Amounts outstanding
Less amounts held by:
The Treasury
The Federal Reserve banks
Amounts
in circulation
$331,615,537,346
$311,628,975,448 $311,041,235,308
630,969,414
44.309.646.839
40,819,661
43.650.668,818
7,153.876
43.650.650.908
286.674.921.093
267.937.486.969
267.383,430,524
CURRENCY
IN
U.S. notes
Currency no
Totai
Doiiars
'
FractionaJ
coin
ionger issued
$322,539,056
$265,201,084
$19,986,561,898
$2,024,703,898
33,448,039
213
217,746
17.697
590.149.753
658,978,021
314.682.901
96,332.849
275.466.852
562.645.172
289,090.804
264.965.641
18.737.434,124
1.613.688.148
17.123.745.976
CIRCULATION BY DENOMINATION
$17,961,858,000
COMPARATIVE TOTALS OF CURRENCY AND COIN
IN CIRCULATION-SELECTED DATES
Mar. 31. 1991
Denomination
Date
Federal
Total
notes
$4,829,861,685
847.271 .760
5,903,633,895
11,663,315.870
65.905.027.534
33.550.188.675
144.913.269.400
148.015.500
171.666.998
1 .785,000
3,450,000
$1
$2
$5
$10
$20
$50
$100
$500
$1.000
$5,000
$10,000
Issued on and after July
$143,481
132.792,858
111.619,305
5,955
3,390
25
44,525,700
$150,798,409
12,866
35,829.745
23.999.365
20.135.094
11.544.050
22.104.100
189.500
207,000
45,000
100,000
487
25
115
267,937,486,969
Total currency
^
$4,678,919,795
714,466,036
5,756,184,845
11,639,310,550
65,884,889,100
33,538.644.600
144,846,639,600
147,826,000
171,459,998
1,740,000
3,350.000
1
,
1
929.
Excludes coin sold to collectors at premium prices.
Includes $481,781,898 in standard silver dollars.
267.383.4M,524
Amount
Per
caprta*
(in
millions)
issued
1
487
Fractional parts
notes 5
Partial
'
Currency
no longer
U.S.
notes
Reserve
Mar. 31,1991
Feb. 28, 1991
Jan. 31,1991
Dec. 31, 1990
Sept. 30, 1985
Sept. 30, 1980
June 30, 1975
June 30, 1970
June 30, 1965
June 30, 1960
June 30, 1955
June 30, 1950
$286,675.0
285.263.0
282.848.7
286.970.1
187.337.4
129.916.9
81.196.4
54.351.0
39.719.8
32.064.6
30.229.3
27,156.3
$1,138.62
1.133.81
1.125.14
1.141.53
782.45
581.48
380.08
265.39
204.14
177.47
182.90
179.03
289.090,804
^
Census estimates
Based on Bureau
of the
Represents value
of certain partial
of population.
denominations not presented
for
redemption.
125
Glossary
With References
Accrued discount (SBN-1,
-2, -3)--This is
to
Applicable Sections and Tables
the interest that has accumulated from the sale of savings bonds and notes
Issued at a discount to the date of redemption or final maturity, whichever comes first. Series A, B,
C, D, E, EE, F, and J are discount or accrual type bonds. Principal and accrued interest are paid
when bonds are presented for redemption. Series G, H, HH, and K are current-income bonds, and
Interest paid semiannually Is not included in accrued discount.
Average discount
rate (PDO-3)--ln Treasury
bill
Cash management
bills
on a discount rate
discount rates accepted in the
auctions, purchasers tender competitive bids
The average discount rate represents the weighted average
auction. (Same as average discount rate In table PDO-2.)
basis.
(PD0-2)--Cash management
bills
of
all
are marketable Treasury
bills of
irregular maturity lengths
sold periodically for the general purpose of funding short-term cash needs. Cash management bills
usually are restricted to competitive bidders, with higher minimum and multiple purchase requirements
than regular
bills.
is an application by a prospective investor to buy
Treasury securities. With a competitive tender, the investor offers to purchase a slated amount of an issue
a specified discount rate for bills or a specified yield for notes and bonds. If the bid is within the range
accepted in the auction, the purchaser will pay the price equivalent of the bid.
Competitive tenders ("Treasury Financing Operations")--A tender
at
Debt outstanding subject to limitation (FD-6)--Thls Is the debt incurred by the Treasury that is subject to the statutory
debt limit set by Congress. Until World War Congress authorized a specific amount of debt that could be
raised by each separate security Issue. Beginning with the Second Liberty Loan Act of 1917, the nature of
the limitation was modified until developed by 1941 into an overall limit on the outstanding Federal debt.
I,
It
The debt subject to limitation Includes almost all Treasury public debt except for securities issued to
the Federal Financing Bank, upon which there is a limitation of $15 billion, and certain categories of
older debt (totaling approximately $595 million as of February 1991).
Discount rate (PD0-2)--The rate for Treasury bills is on the basis of a discount rate, which is the rate of return based on
the difference between par and the actual purchase price paid (i.e., discount). The discount rate Is
annualized over a 360-day year. This rate understates the real rate of return; accordingly, the yield
(coupon-equivalent rate) Is a better measure of return and should be used in any comparison with
coupon-Issue (note or bond) securities.
nonmarketable, interest and non-interest-bearing securities issued
Funding Corporation (RFC) for RFC's investment of funds
authorized under section 21B of the Federal Home Loan Bank Act (12 U.S.C. 1441b).
Domestic series (FD-2)--This
is
composed
of
periodically by the Treasury to the Resolution
Foreign-targeted issue (PDO-1, -3)"Foreign-targeted notes were sold between October 1984 and February 1986
to foreign institutions, foreign branches of U.S. institutions, foreign central banks or monetary
authorities, or to International organizations of which the United States was a member. They were sold
as companion issues to domestic (normal) Treasury notes, having the same maturity and interest rate,
and could be converted into domestic notes of their companion Issues. They paid interest annually
rather than semiannually.
126
Glossary
Government account series (FD-2)~The
statutes of certain trust funds require tfie Secretary of the Treasury to apply
the monies held by these funds toward the issuance of nonmarketable special securities. These
securities are sold directly by the Treasury to the specific Government agency, trust fund, or account.
Their rate is usually based on an average of market yields on outstanding Treasury obligations, and
they may be redeemed at the option of the holder. Roughly 80 percent of the Government account
series securities are issued to five holders: the Federal old-age and survivors insurance trust fund (Social
Security), the
civil
and disability fund, the Federal
and the unemployment trust fund.
service retirement
military retirement fund,
Matured non-interest-bearing debt (SBN-1,
reached
final
-2,
-3)-This
is
hospital insurance trust fund, the
the value of outstanding savings bonds and notes that have
maturity and no longer earn interest. Series A-D, F, G, J,
and K bonds have reached
Series E bonds issued between May 1941 and November 1965 have a final maturity of
40 years from their issue dates; E bonds issued between December 1 965 and June 1 980 have a final
maturity of 30 years. Series EE bonds issued since January 1980 mature 30 years from their issue
dates. Series i-l bonds issued from June 1 952 through December 1 979 mature in 30 years. Series
HH bonds issued since January 1980 mature in 20 years. Savings notes issued between May 1967
final maturity.
and October 1970 mature 30 years from
their issue dates.
Noncompetitive tenders ("Treasury Financing Operations")"A tender is an application by a prospective investor to
buy Treasury securities. With a noncompetitive tender, the investor offers to purchase the securities at the
price equivalent to the weighted average discount rate (for bills) or yield (for notes and bonds) of accepted
competitive tenders
in
the auction. Noncompetitive tenders are always accepted
in full.
Quarterly financing ("Treasury Financing Operations")"The Treasury has historically offered packages of several
"coupon" (note or bond) security issues on the four quarterly financing dates, which are the 15th of February,
May, August, and November. If these dates fall on nonbusiness days, the securities are issued on the next
business day. Since the late 1970s, the standard quarterly financing has consisted of a 3-year note, a
10-year note, and a 30-year bond, although the package may vary. Sometimes, the Treasury offers
additional amounts of outstanding long-term notes or bonds, rather than selling new issues.
Reopening (PDO-3, -4)~A reopening
is
when the Treasury
new issue.
offers for sale
an additional amount
of
an outstanding
issue, rather than an entirely
52-week and three-quarters of the 26-week bills are new issues (i.e., are the first issue of a
CUSIP-number-identified security that will mature on a specific date). All 13-week bills, all cash
management bills, and one-quarter of 26-week bills are reopenings of previously issued 26-week or 52-week
bills, with the additional issues maturing on the same date as the original issue.
All
Some
the
note and bond issues are also reopened. A reopened issue will always have the same maturity date,
and, it a note or bond, the same interest rate as the original issue.
same CUSIP number,
State and local government series (FD-2)"The Treasury offers special nonmarketable certificates, notes, and bonds to
State and local governments as a means to invest proceeds from their own tax-exempt financing.
and maturities on these securities are set to ensure compliance with IRS arbitrage
These securities, commonly nicknamed "SLUGs," are offered in both time deposit and demand
deposit forms. Time deposit securities have maturities of up to 1 year for certificates, 1 to 10 years for notes,
and over 1 years for bonds. Demand deposit securities are 1 -day certificates rolled over with a rate
The
interest rates
provisions.
adjustment
daily.
limit (FD-6)~At any time, there is a limit, set by Act of Congress, on the amount of public debt that may
be outstanding. This limit may be permanent or may be temporary through a fixed date. When the
limit is reached, the Treasury may not sell any new marketable or nonmarketable debt issues until the
limit is increased or extended. A detailed listing of the changes in the limit since 1941 may be found in
a table attached to the Budget of the United States Government.
Statutory debt
it
127
Glossary
STRIPS (PDO-1,
-3)-Uncler the Treasury's STRIPS (Separate Trading of Registered Interest and Principal
of Securities)
program, long-term notes and bonds may be divided into their principal and interest payment components.
The STRIPS components may then be transferred and sold in amounts as small as $1 ,000. When the
strippable notes or bonds are auctioned, STRIPS are sold at a minimum par amount.
This par amount
varies for each issue and is an arithmetic function of the issue's interest (coupon) rate.
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