frb_071998

VOLUME 84 n NUMBER 7 H JULY 1998

FEDERAL RESERVE

BULLETIN

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents

517 OPEN MARKET OPERATIONS DURING 1997

In 1997 the Trading Desk at the Federal ReserveBank of New York managed reserve conditionswith the objective of maintaining the federalfunds rate around the level desired by the Fed-eral Open Market Committee. In 1997 the port-folio of domestic securities in the System OpenMarket Account expanded by a record $41 bil-lion (excluding all temporary operations), end-ing the year at $448 billion. Outright purchasesof Treasury securities totaled $44 billion, offsetto a small degree by redemptions of some Trea-sury and federal agency issues. The growth inthe portfolio during 1997 was significantlyhigher than the $15 billion increase recorded inthe preceding year. The Desk closely observedthe behavior of the federal funds rate for anyindication that the decline in operating balancesassociated with the spread of retail sweep pro-grams or any other development was impedingits ability to control the funds rate or contribut-ing to volatility in the rate. Volatility in thefederal funds rate did not increase from theprevious year, but it remained above the levelsthat had characterized earlier years.

533 INDUSTRIAL PRODUCTION AND CAPACITYUTILIZATION FOR MAY 1998

Industrial production rose 0.5 percent in May, to128.8 percent of its 1992 average, after revisedincreases of 0.3 percent in April and 0.4 percentin March. The rate of industrial capacity utiliza-tion edged up 0.1 percentage point in May, to82.2 percent.

536 STATEMENT TO THE CONGRESS

Alan Greenspan, Chairman, Board of Gover-nors, discusses the Asian financial crisis andsays that he continues fully to back the Admin-istration's request to augment the financialresources of the International Monetary Fund byapproving as quickly as possible U.S. participa-tion in the New Arrangements to Borrow and anincrease in the U.S. quota in the IMF. He said itis better to have the IMF fully equipped if a

quick response to a pending crisis is required,before the House Committee on Agriculture,May 21, 1998.

538 ANNOUNCEMENTS

Procedure for submitting nominations for newmembers to the Consumer Advisory Counciland notice of a council meeting.

Amendment to the tier 1 leverage capitalstandard.

Issuance of a final report by the System TaskForce on Internal Credit Risk Models.

Issuance of enforcement actions.

Availability of the Federal Reserve RegulatoryService on CD-ROM.

Change in Board staff.

541 MINUTES OF THE FEDERAL OPEN MARKETCOMMITTEE MEETING HELD ONMARCH 31, 1998

At its meeting held on March 31, 1998, theCommittee adopted a directive that called formaintaining conditions in reserve markets thatwere consistent with an unchanged federal fundsrate of about 5l/i percent and that contained abias toward the possible firming of reserve con-ditions and a higher federal funds rate.

547 LEGAL DEVELOPMENTS

Various bank holding company, bank servicecorporation, and bank merger orders; and pend-ing cases.

575 COMBINED FINANCIAL STATEMENTS OFTHE FEDERAL RESERVE BANKS

These financial statements were prepared by anindependent accounting firm and certify thecombined statement of condition of the FederalReserve Banks as of the end of 1997 togetherwith related statements of income and changesin capital.


Al FINANCIAL AND BUSINESS STATISTICS A68 BOARD OF GOVERNORS AND STAFF

These tables reflect data available as of

MAY 27, 1998 A 7 0 FEDERAL OPEN MARKET COMMITTEE ANDSTAFF; ADVISORY COUNCILS

A3 GUIDE TO TABULAR PRESENTATION

A4 Domestic Financial Statistics y£ BQARD puBUCATl0NSA42 Domestic Nonnnancial StatisticsA50 International Statistics

A74 MAPS OF THE FEDERAL RESERVE SYSTEMA63 GUIDE TO STATISTICAL RELEASES AND

SPECIAL TABLESA76 FEDERAL RESERVE BANKS, BRANCHES,

A66 INDEX TO STATISTICAL TABLES AND OFFICES


PUBLICATIONS C O M M I T T E E

Lynn S. Fox, Chairman H S. David Frost • Donald L. Kohn • J. Virgil Mattingly, Jr.• Michael J. Prell • Dolores S. Smith • Richard Spillenkothen • Edwin M. Truman

The Federal Reserve Bulletin is issued monlhly under the direction of the staff publications committee. This committee is responsible for opinions expressedexcept in official stalements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Multimedia Technologies Centerunder the direction of Christine S. Griffith, and Publications Services supervised by Linda C. Kyles.


Open Market Operations during 1997

This article is adapted from a report to the FederalOpen Market Committee by Peter R. Fisher, Execu-tive Vice President of the Federal Reserve Bank ofNew York and Manager of the System Open MarketAccount. Virginia Cheng, Spence Hilton, and TedTulpan were primarily responsible for the prepara-tion of this report. Many other members of the Mar-kets Group assisted in the preparation; AnnemarieGemma and David Parseghian provided invaluableresearch support.

i.I:M/:M:\TIO.\ OI: Most FAR) I'OI

IX

In 1997 the Trading Desk (Desk) at the FederalReserve Bank of New York managed reserve condi-tions with the objective of maintaining the federalfunds rate around the level desired by the FederalOpen Market Committee. The FOMC tightenedmonetary policy at its March meeting, raising theintended federal funds rate from 5VA percent to5!/2 percent, the level at which it was held over theremainder of the year (table 1). There was no associ-ated change in the discount rate.

I . 1 L - i i v T . i ! i i ] v r , M u r k u l (. n i n u i i i k v i n e c i i n c ( 1 a : i . p i : a m in u i ^ v r ; n . ^ , I V L V I V I I V : - 1 7 , I W ( > I V c c m h a I(>, 1 0 9 7

Duleof meeling

12/17/%

2/410 2/5/97

3/25/97

5/20/97

7/1 m7/2/97

H/iy/y7

WMUVI

11/12/97

12/10/97

Hxpcaedfederal funds

rue(perccn!)

Di.scmini rate(percent)

5.25 5.00

5.25 5.00

5.50 500

5.50 5.00

5.50 5.00

5.50 5.00

5.50 5.CX)

5.50 5.00

5.50 5.00

The Committee's directives instruct the Desk tomaintain the federal funds rate on average around aspecified level. Open market operations are used toprovide a level of nonborrowed reserves that willallow the federal funds market to clear at the indi-cated rate. Each day, the Desk aims to keep the rateas close as possible to the targeted level with aminimum of volatility. But in deciding each day'soperations, the Desk also considers how its flexibilityfor arranging operations in upcoming days might beaffected by that day's course of action as well as howthe behavior of the funds rate that day might influ-ence rates in subsequent days.

At the start of each two-week maintenance period,a strategy for meeting reserve needs is developed thatis consistent with the estimated demand for excessreserves and the expected reserve supply arising fromdiscount window borrowing. These estimates are cap-tured in the Desk's allowances for excess and bor-rowed reserves made each period.1 The reserve man-agement strategy also depends on the estimated dailypattern of reserve supply and demand. The approachmust be flexible enough to allow for the inevitablerevisions to the reserve estimates, and as a periodunfolds, the Desk will also respond to the observedbehavior of the federal funds rate, which may promptsome reassessment of daily or period needs. Eachmorning, this process of developing a strategy bothfor the day and for the remainder of the maintenanceperiod is repeated.

In deciding on open market operations each day,the Desk takes account of the estimates of reservesupply; any special factors that may raise or lower theneed for excess reserves, such as high or uncertainpayment flows; cumulative excess holdings to that

1. Tn the December 3 maintenance period, the allowance for excessreserves was lifted from $1 billion, where it had been set for manyyears, to $1.4 billion and held there for the balance of the year. Thechange was made in recognition of a rising trend in excess reserveholdings. As had been the case for several years, adjustment andseasonal borrowing was expected to meet just a fraction of totalreserve demand in all periods, although average levels of adjustmentborrowing were somewhat higher in 1997 than in earlier years. Actuallevels of excess and borrowed reserves sometimes differed substan-tially from the formal allowances as a result of errors in the reserveprojections or temporary disruptions to the efficient distribution ofreserves. The Desk made informal adjustments to these allowances asneeded.


518 Federal Reserve Bulletin • July 1998

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\nv\\ i-:; H

. - • I I I

m ».\ i

I.SO

1110

50

I'M?

N O T E . Cumulative monthly value of initial sweeps.

point in the period; the number of days remaininguntil the settlement day; and the risks seen in thereserve estimates. If the federal funds rate is tradingaway from its desired level at the time of the opera-tion, the Desk may adjust the daily level of excessreserves it aims to provide to contain pressures in thefinancing markets and to steer the rate back towardits desired level in later trading. Responding inade-quately to current rate pressures increases thelikelihood that these pressures will become self-reinforcing and influence rates in upcoming days.The Desk also attempts to anticipate how the ratewould trade over the entire day and recognizes thatproviding high or low levels of excess reserves couldlead to elevated volatility.

Several changes were made to the Desk's usualoperating practices during 1997. At the start of theyear, the normal entry time for temporary operationswas advanced one hour, to shortly after 10:30 a.m.,and the par value of all accepted propositions on eachmarket operation began being announced shortly afterselections were completed. Over the year, the differ-ent tranches comprising a coupon pass were spreadover longer periods of time. In November, the Deskalso began making public each morning the standarddeviation measuring the volatility of the federal fundsrate on all trades arranged the previous day by thebrokers surveyed by the Markets Group.2

The value of retail deposits affected by sweep pro-grams continued to grow in 1997, further reducingthe level of reserve balances maintained at the

2. The daily standard deviation measures in basis points the disper-sion of the federal funds rate around the daily effective or averagerate. This measure of volatility accounts for the volume of tradesarranged at different rates.

Federal Reserve Banks. In 1997, deposits initiallyaffected by new or expanded sweep programs totaled$85 billion, bringing the cumulative value of theseprograms since their inception in 1994 to $252 billion(chart I).3 The increase in 1997 was less than theprevious year's rise, which reflected a slowing in thespread of sweeps on NOW accounts. A larger propor-tion of the new programs implemented in 1997 wasapplied to retail demand deposits. New sweeps in1997 more than explain the total drop of $3.2 billionin reserve requirements over the year (chart 2).

Required operating balances—which include thebalances that banks must hold to meet clearing bal-ance requirements and reserve requirements but

3. All estimates refer to deposits initially swept by depositoryinstitutions at the start of a program or when the coverage of aprogram is expanded. These figures are not updated to include anylater changes in the underlying deposit balances affected by a sweepprogram.

2 . ;•

NOTE. All figures an maintenance period averages calculated at two-weekintervals. Required reserves are the sum of required reserve balances andapplied vault cash. Required operating balances are the sum of required reservebalances and required clearing balances.


Open Market Operations during 1997 519

N •. - - . l e i 11 ; u ?i i i • * : o ->\ h v . r . i m : I I K ' [ o i c i . i l ':\'S:\'J:\'

:- , . :vuiiL;._--, \ i \ i v c m ; I M U : . I ; ; ., l ° S ! ) - ( > 7

Billions of dollar*

Levels

ntl i*m*no' sivuritic*

Min coupon*

Mir\ hilK

! I I I I

— 400

— 300

— 200

—• 100

Net changes

1990 1995

exclude applied vault cash—fell somewhat less thanrequired reserves, about $2.7 billion, reflecting aslight increase in the level of required clearing bal-ances and a small drop in applied vault cash.4 Therise in clearing balances was minor because manybanks had already increased these balances to themaximum level warranted by their use of FederalReserve priced services.5 The decrease in appliedvault cash was accompanied by an even greater dropin total vault cash, which includes surplus vault cash.Many banks that now have no required reserve bal-ances have explored ways to economize on theirvault cash holdings to minimize the opportunity costassociated with their surplus vault cash.

/'/•A'.w \ \L\ r Aruvn YW W>.'A7. ' .-\< 'COi X!

/-: ,• //; . v ;v / .1/ (>ri\

In 1997 the portfolio of domestic securities in theSystem Open Market Account (SOMA) expanded by

4. This measure of required operating balances does not include theeffect of as-of adjustments or carryins on the need to hold balances tomeet all requirements.

5. Nonbound banks, which meet all their reserve requirements withvault cash, earn only 90 percent of the federal funds rate on anyrequired clearing balances, and some nonbound institutions haveindicated that this has made them less willing to increase theirrequired clearing balances.

a record $41 billion (excluding all temporary opera-tions), ending the year at $448 billion (chart 3).Outright purchases of Treasury securities totaled$44 billion, offset to a small degree by redemptionsof some Treasury and federal agency issues. Thegrowth in the portfolio during 1997 was significantlyhigher than the $15 billion increase recorded in thepreceding year. Movements in operating factors andreserve demands were important determinants ofthe size of the portfolio's expansion, but the shiftsin strategies used by the Desk to address seasonalreserve shortages before year-end in each of the pasttwo years also contributed to the increased level ofpurchases in 1997.

/•wwvnv t'in.\

Currency in circulation rose $31 billion from year-end to year-end and was the reserve factor that cre-ated the greatest need for a permanent expansionof the portfolio in 1997 (table 2).6 Apart from the

6. In percentage terms, currency grew 7 percent from year-end toyear-end, modestly faster than in each of the preceding two years.Available data suggest that shipments abroad accounted for at leasthalf of the increase in 1997, which was similar in proportion to otherrecent vears.

Billions of dollars

Item

Required reserves

Factors affectingnonbttrmwed restartsCurrency in

circulalicinForeign currencyForeign repurchase

agreement pool .Gold and foreign

depositsFloat and

float-related, as-of adjustments ..

Treasury balanceApplied vuult cash . . .Required clearing

balancesAll other item*Net changes in

nonborrowedfactors

Ouistundins RPsPar valuePremium

Levels in maintenanceperiod ending

1/3/96 1/1/97

57.3 50.6

423.4 448.116.4 16.2

12.5 14.0

21.0 20.6

1.0 2.06.7 6.0

37.4 38.1

5.2 6.625.5 24.3

11.4 16 3.7 1.4

12/31/97

47.4

479.416.6

17.0

20.1

.94.9

37.7

6.723.2

10.1.5

Changes'

19%

-6.7

-24.7- .2

-1.5

-.4

1.0.7.7

-1.4-12

-27.0

4.9.6

1997

-3.2

-31.3.4

-3.0

-.5

-1.21.1-.4

-.1-1.1

-36.3

-6 .2- .8

1. Changes in factors affecting nonborrowed reserves are exprcsMid in termsof the effect on reserve supply.



foreign repurchase agreement (RP) pool, whichrose $3 billion, other factors affecting nonborrowedreserve supply did not change significantly on bal-ance over the year. The decline in reserve require-ments brought on by the further expansion of sweepaccounts moderated the need for a permanent expan-sion of the portfolio. Currency growth was greater in1997 than in 1996, although the absolute declinein reserve requirements was less. Altogether, move-ments in nonborrowed reserve factors and requiredreserves deepened underlying reserve shortages about$13 billion more in 1997 than in the previous year.

i>t )/'n>'-f a d A V v r n v

Shifts in the Desk's year-end reserve managementstrategies also help explain why the total increase inthe portfolio last year was so much larger than in thepreceding year. As explained in last year's annualreport, the Desk conducted relatively few outrightpurchases late in 1996 in order to place itself in aposition of needing to add, rather than drain, reserveson a temporary basis when required reserve balancesreached their seasonal low in early 1997. A relativelymodest level of outright purchases made in late 1996left a reserve shortage of nearly $16 billion in themaintenance period covering the 1996 year-end thatwas addressed with temporary RPs—about $5 billionmore than was used to address shortages over thepreceding year-end period.7 After the seasonal lowpassed in early 1997 and as reserve needs began togrow again, the Desk bought nearly $6 billion ofcoupons outright in the market in the first quarter,adding relatively more on a permanent basis than isusually the case at this time of year and returning theunderlying needs to more typical levels.

In planning for the lows in operating balances inearly 1998, the Desk felt that this interval could beaddressed with either moderate add or drain needs,given the banking system's successful managementwith declining reserve balances over the past year.Thus, its approach to the year-end buildup in reserveneeds in 1997 was more typical to that of earlieryears: The reserve shortage over the year-end main-tenance period was reduced to about $10 billionthrough purchases of $19 billion of Treasury couponsand bills in the final two months of the year.

Rlllrnm til dollars

Puncha.sw from foreign act'ouPurchase* in the murkelRrricmplfam — 30

— 20

— 10

rrcasurybills

IWftTreasurycoupons

19%Federal

agencies

I«W7 IW7 TO7Treasury Treasury Federal

bills coupons agencies

7. These amounts represent the par values of the RPs arranged inthe year-end maintenance periods. The cash values including pre-miums were modestly higher in each year.

NOTE. Purchases are positive values; redemptions are negative values.

'Iru

Most of the expansion of the portfolio was achievedby arranging outright purchases in the market(chart 4). However, nearly $3.6 billion of bills werepurchased directly from foreign accounts, comparedwith only $88 million in 1996. The Desk bought mostof these—$3 billion—on two separate occasions inDecember. The second of these purchases, totaling$2 billion, was made late in the month. This purchasefurther reduced temporary reserve shortages aroundthe year-end, but the reserve effect was not longlasting because the Desk chose to purchase Treasurybills that matured in January and to redeem them atmaturity.

The Desk continued to break out its purchases ofcoupon securities into separate tranches covering dif-ferent portions of the yield curve. In late 1996, theSOMA Manager informed the FOMC and the pri-mary dealers that coupon purchases might be spreadover several weeks. Previously the tranches makingup a pass had been more concentrated, generallyfalling within the span of a few days. The sets oftranches that made the passes in 1997 spanned inter-vals that ranged from five to twenty-four businessdays. The intention was to reduce the effect of theDesk's market entries on market prices; over theyear, prices showed little reaction to open marketcoupon purchases.

S(K\IA Portfolio Manti^oiirrt

The overall expansion of the portfolio was moreconcentrated in holdings of Treasury coupon securi-ties than in the preceding year, largely because



reduced Treasury issuance of bills deflected some ofthe Desk's outright purchases into the coupon sector.Altogether, the Desk bought $35 billion of couponsecurities in 1997 in six passes in the market, com-pared with $7 billion purchased in two passes in1996. Bill purchases totaled $9 billion, with aboutS5'/2 billion bought in two passes in the market.These purchases were down a bit from the $10 billionpurchased in 1996, almost all of which was acquiredin two passes in the market. Given the relativelygreater total of outright purchases needed in 1997,the Desk's preference would have been to purchasebills and coupon securities in more equal proportions.However, the Desk felt that the reduced bill issuanceover much of 1997 would have made it difficult topurchase much supply in the secondary market with-out sharply affecting market prices. Thus, the Deskdid not buy any bills in the market between April andNovember. In December, after a period of somewhatlarger bill auctions and more liquid market condi-tions, the Desk bought bills in the market again but inrelatively modest quantities; prices did not respondmuch to these purchases.

Because outright purchases were concentrated inthe coupon sector, the average maturity of the SOMAholdings of Treasury securities increased to42.6 months at the end of the year from 41.2 monthsone year earlier. As of the end of 1997, 13.0 percentof total marketable Treasury debt outstanding washeld in the SOMA, up from 11.7 percent one yearearlier. This increase reflected the high level of out-right purchases made in an environment of shrinkingfederal government deficits.

At midyear, the Desk picked up the pace of itsgradual runoff of federal agency securities that beganin 1982 by redeeming all agency securities ratherthan exchanging them for new eligible issues as theymatured. Holdings of these issues dropped $1.2 bil-lion over the year. About $2 billion of Treasurycoupon securities, a portion of the maturing originalissue seven-year notes held by the SOMA, were alsoredeemed during 1997. The remaining seven-yearnotes that matured were rolled into the Treasury'sinflation-indexed securities, and the Desk held$1.65 billion of these securities, about 5 percent ofthe total issuance, at the end of the year.

TLW'ORAKY ACTIVITY FOR THE SYSTEM Oh'L.VM:\RKLT .\CCOt.::\f

liinpti)Lirv AV.uTiv \ccii.\ mu! IJit>ic^tum<

The Desk arranges temporary operations to meetreserve needs that are not addressed by its outright

5 . O i t c u n u n k v ' i ' t | \ - i a l i i liiv i k v i k ' d t u h i i p a l h . h \

T T U i m U T i . i i k v j v r i i i v l , J a n u a r y ? , I ' - lVd D o ^ - m l x - i U . \ i > ' r - '

Billions nf dol lar ;

Final rstiinatt-

Jan. 31996

July 31996

Jan. I1997

July 21997

Dec. 311997

Maintenance period settlement duys

NOTE. Initial estimates are as of the first day of each period; final estimatesreflect all revisions to nonborrowed reserve factors and required reserves avail-able as of the day after the period ended. Data are daily.

operations. These temporary operations must bestructured to allow for day-to-day variations inreserve supply and demand and for the possibility ofrevisions to reserve estimates within a maintenanceperiod.

The initial reserve shortages estimated at the startof each period were somewhat larger in 1997 than inthe preceding year (chart 5). When the Desk beganto operate at an earlier time, it was more comfortablearranging larger temporary RPs. But large shortageswere not viewed as a necessity for managing thefunds market since the banking system successfullyadapted to lower operating balances with a variety ofunderlying reserve needs. The larger reserve short-ages help to explain the absence of matched sale-purchase transactions in 1997.

On balance, net revisions to nonborrowed reservefactors and required reserves made after a period hadbegun were somewhat greater in 1997 than in 1996—about $1.3 billion in absolute value per period com-pared with $900 million the previous year.8 All of theincrease reflected the unexpected inflow of taxreceipts following the April 15 tax date. On the eveof this date, tax inflows were not expected to causethe Treasury balance to rise above its targeted levelof $7 billion. During the May 7 period, the Treasurybalance averaged $28 billion and peaked at $52 bil-

8. This calculation compares the actual effect of factors andrequired reserves on reserve needs during a maintenance period withtheir estimated effect at the start of a period, ll does not measure net orgross daily forecast misses.



lion on one day. Even apart from this episode, how-ever, the Treasury balance proved to be one of themore difficult factors to predict, as it had often beenin preceding years.

Period-average revisions to the foreign RP invest-ment pool rose from about $350 million in 1996 toabout $500 million in 1997, reflecting a few instanceswhen accounts placed a substantial amount of fundsin the investment pool on relatively short notice. Theneed to complete daily projections sooner each morn-ing to accommodate the Desk's earlier entry into themarket may also have contributed to some of thedecreased predictability of this factor. On the otherhand, revisions to currency were generally smaller in1997.

Revisions to applied vault cash made within amaintenance period averaged $230 million, similar inmagnitude to the revisions in 1996 but considerablygreater than the revisions in years before 1996.Sweep accounts have compounded the difficulties ofestimating the amount of vault cash that could beused to meet reserve requirements. Required reservesproved to be modestly more difficult to forecast in1997. Revisions to applied vault cash were oftenpositively correlated with revisions to requiredreserves, thereby reducing their net effect on overallperiod need; but revisions to these two measureswere not always made on the same day within aperiod.

Another source of uncertainty for reserve opera-tions was the premium on RPs—measured by thedifference between the par and the cash values ofcollateral on accepted propositions. The drop in Trea-sury coupon yields over the second half of the yearwas associated with an increase in the average premi-ums on RPs as market prices on many outstandingcoupon issues rose further above their par values.The premium on RPs during the final quarter of theyear averaged 8 percent, twice as high in percentageterms as during the first half of the year. Althoughchanges in the underlying trend of the premium werereadily recognized, the premium often varied signifi-cantly from one operation to the next and was diffi-cult to anticipate for any single operation.

Temporary Open Market Operations

In 1997 the Desk greatly increased its use of over-night (one business day) RPs (chart 6). A trendtoward increased use of overnight operations beganin 1996 and largely reflected the Desk's perceptionthat banks had less flexibility to absorb sizable imbal-ances between reserve supply and demand on any

f>. S UMUporan, operations. lW5-(>7

Number

Volume NIIKHB of dotUn

Fbied-wnn Withdrawable Overnight Tarn Overnightsyiicin lAfti tytiicDB icfxucb&to nmched mulched

h rcpurehise ajreemests' sale- sale-agreements purchase purchase

uanjociioos transactions

1. Includes all System and customer-related repurchase agreements arrangedfor one business day.

day when managing their accounts because of theirreduced operating balances. In this environment, theDesk intervened more frequently to maintain a stablebalance between daily reserve supply and demand.Relatedly, in structuring its temporary operations,the Desk was careful not to let the estimated levelof operating balances fall too low on any day, aconsideration that sometimes argued for overnightoperations.

The Desk still frequently arranged term RPs tohelp meet large underlying reserve shortages that hadto be addressed with temporary operations, althoughthese operations were often supplemented by over-night RPs to smooth uneven daily excess patterns.The number of days that two operations—one termRP and one overnight RP—were announced simul-taneously increased from five in 1996 to seventeenin 1997, most often occurring at the start of a main-tenance period. The risk that subsequent reserverevisions would unexpectedly create a surplus wasreduced because term RPs were used less frequentlyto meet an estimated reserve shortage in its entirety;for this reason the Desk did not find it necessary tomake withdrawable any of the term RPs it arrangedin 1997.



The Desk continued to adhere to its normal prac-tice of arranging its temporary operations at a presettime each day—shortly after 10:30 a.m. On someoccasions when large anticipated reserve shortageswere estimated, the Desk conducted its operationsbefore the normal entry time, usually around10:00 a.m., after a full set of reserve estimatesbecame available. But the number of instances whenthe Desk entered the market before the normal entrytime was down from the preceding year—elevencompared with nineteen in 1996—largely becausethe usual entry time had been moved forward. Theneed to enter the market early was most pressingduring the April tax season, when upward revisionsto the estimated Treasury balance left large deficien-cies at the same time that the pool of availablecollateral was dwindling because of the sizableamounts already held on outstanding RPs.

On three occasions in 1997 the Desk reentered themarket shortly after having made its selections on apreviously announced temporary operation. In allthree cases, propositions on the earlier operations fellshort of the amount needed to address the estimatedreserve shortage on the day.

Reserve Management during theApril Tax Season

During the second half of April, the Desk's activitywas significantly influenced by unexpectedly largereserve shortages that resulted from tax receipts tothe Treasury that far exceeded anticipated inflows.Most of the unexpected strength came from indi-vidual nonwithheld tax receipts. These receiptstotaled $123 billion in April, about $30 billion morethan expected and more than 20 percent higher thanthe corresponding flows in 1996. It was initiallybelieved that the Treasury balance at the FederalReserve could be maintained around a target level of$7 billion. However, tax receipts by April 22 left nofurther capacity in Treasury Tax and Loan accountsat commercial banks to absorb additional inflows,which consequently had to be maintained at the Trea-sury's account at the Federal Reserve. The Treasury'sbalance with the Federal Reserve peaked at a recordhigh of $52 billion on April 30 (chart 7).

The rapid progression of daily upward revisions totax flows, the Treasury balance, daily reserve defi-ciencies, and period-average reserve needs led theDesk to address huge daily reserve shortages withboth sizable overnight and term RPs. Given the sizeof the daily needs, the Desk entered the marketearlier than its normal operating time on six consecu-

Treasury balances ami outstanding rcpuichasi?aL'rccm<.-iils (RPsl. April 15 May 14, W97

Treasury balance at the Federal Reserve

— 10

1 i i i i i i l

Daily «nd cumulative ouisiandiag RPs• Arrange* that fey

uatstaixUng

is is n i r a a » 2 4 ; J 5 « » s > i i s * 7 s . •> a ftwApril May

tive business days starting on April 23 in an attemptto garner sufficient propositions for its operations. Ontwo occasions, propositions on an initial RP fell shortof the Desk's desired amount, and a second operationwas arranged. Collateral became increasingly scarceas the value of securities already held by the Desk onoutstanding RPs grew, and the spread on RP rates tothe federal funds rate dropped well below normallevels. The total par amount of RPs outstandingreached a record peak of about $51 billion onApril 30, coincident with the peak in the Treasurybalance. Reserve shortages and RPs quickly recededwhen regular government outlays and principal andinterest payments were made in early May.

EXCESS RESERVES ANDTHE FEDERAL FUNDS RATE

The Desk closely observed the behavior of the fed-eral funds rate for any indication that the decline inoperating balances associated with the spread of retailsweep programs or any other development wasimpeding its ability to control the funds rate or con-tributing to volatility in the rate. Excess reserve pat-



terns were also examined to see whether banks wereholding more excess reserves—either because theywished to protect themselves against end-of-dayoverdrafts or because they were less able to reducelarge positive daily excess positions accumulated dur-ing a period. In general, excess reserve levels didrise over 1997, but the increase was concentrated atsmaller institutions that have implemented sweepprograms. Volatility in the federal funds rate did notincrease from the previous year, but it remainedabove the levels that had characterized earlier years.

Excess Reserves

The period-average level of excess reserves rosegradually through much of the year and then jumpedsignificantly higher in the final quarter, reflecting theDesk's accommodation of heightened bank demand(chart 8). Among the group of large institutions,which includes about 120 banks and thrift institutionshaving relatively large deposit liabilities, increaseswere concentrated at a small number of banks thathad adopted sweep programs.

Sweep programs, however, have had some effecton the interperiod pattern of excess holdings at largeinstitutions in general. Usable carryover levels ofthese banks fell sharply in 1997 because of lowerlevels of required reserve balances. This decline hasdampened period-to-period volatility in excess hold-ings at the large banks, and aggregate excess levelsfor these institutions are now rarely negative(chart 9).

Much of the increase in excess reserves seen overthe past year has been concentrated at smaller banksand thrift institutions, and specifically at those institu-

S. Maintenance period averages of touil excess IVM'IM'

holdings, I'W4 M7

Millions of dollars

9. Main tenance perioil averages of eiiHiiilaiive excess

i w s e n e lioli'liiiiis by laree banks a n J tit her inst i tut ions,

I W 4 - 9 7

Million* of dollars

Other institutions

1.500

1994 1995 1996 1997

NOTE. The category "Olher institutions" includes small banks, thrift institu-tions, foreign institutions, and nonreporting institutions. Maintenance periodaverages are calculated at two-week intervals.

tions that have implemented sweep programs, eventhough accumulated initial values of sweep programsat all depositories categorized as other than largeaccounted for less than one-third of the total.9 Theextent to which the smaller institutions have deliber-ately increased their excess reserves to cover clearingneeds remains unclear. At least some of the increasein excess holdings at these smaller institutions couldprove temporary: Among a small sample of institu-tions examined in this category, the level of excessreserves always rose sharply for a few maintenanceperiods immediately after a sweep program waslaunched but then fell back to a much lower levelafter the institution adapted to its new reserve require-ment environment.10 After this initial adjustment,about half of the banks examined showed levelsof excess reserves remaining modestly above levelsthat were typical before the sweep program wasimplemented.

In arranging its open market operations, the Deskgauges the pace at which banks prefer to accumulatereserves during the maintenance period to meetperiod-average requirements. Because of averaging,there can be considerable variability in the intra-period pattern of excess reserves that banks can com-fortably hold, and actual intraperiod excess does varyfrom period to period. But historical patterns suggestthat for several years banks have had a preferencefor accumulating more excess balances over the sec-

1994 1995 1996 1997

NOTE. Maintenance period averages are calculated at two-week intervals.

9. At year-end, sweeps at institutions other than large banks totaled$77 billion.

10. In general, a similar pattern of sharply higher excess holdingsafter a new sweep program was implemented was not found amonglarger institutions.


[(). Ave r se lewis ot CXCL'SS iVNeive. hoMinvs.by ilnv in a miiinlenancc period. I*-)0S 97

Million j of *)llw>

D MM• 1W6rniann

— 6.000

— 4.000

— 2.000

• , I I IH U B . FH Mon. TUO. Wed. Thus. Fri. Mon. Tact. Wed.

Week one Week two


11. I lie IIKMII etkv(i\e lederal tinuls rale in a inahuenaiseeperil ill versus the taavt r.iic, 1 Q')4—L>7

Bnta point*

• Avenge of ab«ohUr dUTcrrnco

• Avenge of difference

1994 1995 1996 1997

NOTE. The average effective funds rale in a mainienance period includesweekends and holidays. Differences are of period effective rates from target.

ond week of a maintenance period, which the Deskattempts to accommodate in its reserve-supplyingoperations to stabilize the federal funds rate(chart 10). Within the second week, however, banksaccumulated somewhat more excess reserves in thedays leading to the settlement day and somewhat lesson the settlement day itself in 1997 than in thepreceding year.

Federal Funds Rate

The federal funds rate averaged over two-week main-tenance periods was generally as close to the intendedfunds rate in 1997 as it had been in earlier years."The absolute values of the differences between themean effective funds rate and the target rate for eachmaintenance period have averaged 4 or 5 basis pointsin each of the past four years (chart 11). The period-average effective funds rates showed a slight upwardbias of slightly more than 1 Vi basis points relativeto the intended rate in 1997. But although period-average levels of the funds rate have been as close tothe target as before, deviations of the daily effectivefunds rate from target have increased modestly, coin-ciding with the large drop in operating balancesbeginning in 1996. The mean and median absolutevalues of deviations of the daily effective funds ratefrom target for all business days rose 5 and 3 basispoints, respectively, in 1996 and did not fully returnto the earlier levels in 1997 (chart 12). Daily devia-tions from target are generally greater than period-

average deviations because of some tendency for firmand soft daily effective funds rates to be partly offset-ting within a maintenance period.12

Intraday volatility as measured by the daily stan-dard deviation of the funds rate on all trades arrangedduring the day increased in 1996 and remained at asimilar level in 1997. The median standard deviationfor all business days increased from 5 basis points to10 basis points in 1996 and declined only slightly, to9 basis points, in 1997 (chart 13). The number ofdays when intraday volatility was especially high,defined as days marked by a standard deviation inexcess of 50 basis points, jumped from eighteen in1995 to twenty-eight in 1996 and then declined totwenty-five in 1997.13 On most days, volatility isgreatest in late trading, when the extremes on thedaily trading range for the funds rate are typicallyreached. The lower operating balance environment ofthe past two years is seen as a principal cause of thisincreased volatility. It does appear, however, that themodifications that the Desk has made to its selectionof operations and the provision of more excessreserves in 1997 prevented intraday volatility fromworsening in 1997 despite the further decline inoperating balance levels.

11. The calculation of the average or mean effective federal fundsrate for a maintenance period includes weekends and holidays.

12. In addition, the mean values of the period-average deviationscapture the effects of weekends and holidays, but the mean values ofthe daily deviations consider only business days.

13. The daily data plotted in charts 12 and 13 include days whenthe targeted federal funds rate was changed. There were six such daysin 1994, three in 1995, and one in both 1996 and 1997. Excludingthese days reduces the mean value of the absolute difference betweenthe effective and targeted funds rates 1 basis point in 1994, to 11 basispoints (chart 12); other summary statistics for the mean and medianvalues presented in charts 12 and 13 are unchanged.



12. l i v i | u e r k " \ o f n \ a l u o i>l U c \ i a l i u n s o l J ; u l \ c f l c ' l i w k ' tL 'n i l l i i n i h n i l e f r o m l . u i v l , in [VIVL ' IH . IL :C p o i n K , 1994—L<7

1994

I - I - I 1 1 1 - I I - I - I IM 1-1 1 I I I - I I I I I ! • ! I I I - IJ— 30

— 25

— 20

— IS

— 10— 5

I

I i l l

1995

It lIl-lMlMlllllll-l-lllMIM f l - l - lil ! • ! - ! I I - I IM I I I I I I I M - I - I I - I I i l l It

30

23

20

15

10

5

19%

ml iftllllllll-lllllW-IBI I ill-I lll««-lI - I M I - I I I - I - I I I I - I I - I I i l l II30

25

20

15

10

5

1997

IIIIJJI-I • ! • ! l l - I • ! • ! - I - I _l I H J l_l I I I I I I ! • ! I II—I—I I I It

30

25

20

IS

10

3

.05 .10 .15 .20 .25 .30 .35 .40 .45 >SQ

NOTE. The means and medians are the following: for 1994, mean, 0.12,median, 0.05; for 1995, mean, 0.10, median, 0.05; for 1996, mean, 0.15, median,0.08; for 1997, mean, 0.12, median, 0.07.

Another factor that may have hdped cap volatilityin the funds rate was an increase in adjustment creditborrowing in 1997. Although absolute levels of thisborrowing remained relatively low, adjustment crediton nonsettlement business days averaged about$120 million in 1997 compared with slightly morethan $50 million the preceding year. This increase inborrowing may have resulted from efforts to encour-age banks to use the window when reserve marketstighten, although it could also reflect in part thebanking system's reduced flexibility in adjusting tounanticipated shortfalls in reserves given the lowerlevel of required operating balances.

Finally, intraperiod deviations of the daily effectivefunds rate from target showed some changes in 1997,

although the changes do not appear to be directlylinked to the level of operating balances (chart 14).The firm financing conditions that have long beenassociated with maintenance period settlement dayswere much less pronounced in 1997 than in thepreceding two years. The higher period-average lev-els of excess and the provision of a greater portion oftotal excess holdings ahead of the settlement day in1997 may have been contributing factors. Somewhatsoft market conditions continued to prevail on Fri-days, especially the second Friday of each period.The firm conditions that have characterized the mar-ket on many Mondays over the past two years to alarge degree reflected a shift in calendar dates: Manymore days characterized by high payment flows and



l . i . 1 • ' i v q u u n L ) o t s t a n d a r d d c w a l m n s u t d a i l \ d l e i ' l i 1 . L- f e d e r a l I i n u K i . i l e , i l l p e K v n i . ( ; : e [ n u n l s . I l ' c ) 4 - l J 7

Number of tarinett dap

1994

ill liI ) l l i l l l l l l l l l l l l l l M i B I B I B I - l I-IBI-I I I_I . I - I»IMI_I-I_I IJ—] I 1 _. I I 1 1 _l_l-l_ .1. I—i. I -I I—t_l_l. i l lI

— TO— 60— SO

— 40

— 30

— 20

— 10

1995

I IMlMl II1I1I«I1I1IM»IMI-I-I-I«I I —I I— I—!•! —I I—I I—I..I—I I I l_i l_] I I I 1—l-l I I I I l_l ! • !I

— 70

— 60

- ™ SO

— 40

— 30

— 20

— 10

1996

I I ..l l l l l l l l

—* 70

— 60

— 50— 40— 30— 20

_ — 101-1 1- l -IBI-IBIal- l - l I l - l I 1-1-1 l - l - l - l l - l - l I I l - l l l 1I

1997 _ 7 0

— 60— 50— 40— 30— 20

I I l ^ l l l I t l l l l l l l l l l l t l l l l l | B l l | M f | l l I l - l I !•! I_IMI_,I | lw| | 1-1-1 t_l-|_,l I l-l I 1 I I l-l I ill I.02 .05 .10 AS .20 .25 .30 .35 .AO .4$ >;50

NOTfc. The medians are the following: for 1994, 0.07; for 1995, 0.05; for1996,0.10; for 1997,0.09.

ill 1

the associated firm market conditions fell on a Mon-day in 1996 and 1997 than did so in 1995.14

AFP1-:.\1)1.\ A: AL THORI/ATIOA H)R DOMESTICOPEN MARKET OPERATIONS

Open market operations during 1997 were conductedunder the Authorization for Domestic Open MarketOperations. The standard authorized limit on inter-

14. Many financial payments and Treasury auction settlements thatotherwise would fall on a weekend, according to calendar rules, aredeferred to the next business day, increasing the likelihood that thesepayment flows would fall on a Monday.

14. b tkvl i \c k'tk'tal tuniK rate lev. the Un'LVt r.stc e\pn.'\sc<las (he average ol ditierL'ni'c- hy day <>i mamlerumceperiod. IW5 l>7

19951996J997

I J i

— 30

— 20

— 10

I I I I I I I I I I IThurs. Fn. Mon. Tues. Wed. Thuis Pri. Man Tuo. Wed

Week one Week two



APPENDIX A: AUTHORIZATION FOR DOMESTICOPEN MARKET OPERATIONS—CONTINUED

meeting period changes in System Account holdingsof U.S. government and federal agency securities was$8 billion. Four temporary changes were made to thisleeway during 1997. The Committee raised the autho-rized limit on intermeeting period changes in Systemholdings to $12 billion at its February, March, andNovember meetings. The leeway was increased asecond time during the November intermeetingperiod to $17 billion on December 8. The Authoriza-tion for Domestic Open Market Operations in effectfor 1997, except when amended as above, is reprintedbelow.

Authorization for Domestic Open Market Operations

1. The Federal Open Market Committee authorizes anddirects the Federal Reserve Bank of New York, to theextent necessary to carry out the most recent domesticpolicy directive adopted at a meeting of the Committee:

(a) To buy or sell U.S. Government securities, includ-ing securities of the Federal Financing Bank, and securitiesthat are direct obligations of, or fully guaranteed as toprincipal and interest by, any agency of the United Statesin the open market, from or to securities dealers andforeign and international accounts maintained at the Fed-eral Reserve Bank of New York, on a cash, regular, ordeferred delivery basis, for the System Open MarketAccount at market prices, and, for such Account, toexchange maturing U.S. Government and Federal agencysecurities with the Treasury or the individual agencies or toallow them to mature without replacement; provided thatthe aggregate amount of U.S. Government and Federalagency securities held in such Account (including forwardcommitments) at the close of business on the day of ameeting of the Committee at which action is taken withrespect to a domestic policy directive shall not be increasedor decreased by more than $8.0 billion during the periodcommencing with the opening of business on the dayfollowing such meeting and ending with the close of busi-ness on the day of the next such meeting;

(b) When appropriate, to buy or sell in the openmarket, from or to acceptance dealers and foreign accountsmaintained at the Federal Reserve Bank of New York, on acash, regular, or deferred delivery basis, for the account ofthe Federal Reserve Bank of New York at market discountrates, prime bankers acceptances with maturities of up tonine months at the time of acceptance that (1) arise out ofthe current shipment of goods between countries or withinthe United States, or (2) arise out of the storage within theUnited States of goods under contract of sale or expected

to move into the channels of trade within a reasonable timeand that are secured throughout their life by a warehousereceipt or similar document conveying title to the under-lying goods; provided that the aggregate amount of bank-ers acceptances held at any one time shall not exceed$100 million;

(c) To buy U.S. Government securities, obligationsthat are direct obligations of, or fully guaranteed as toprincipal and interest by, any agency of the United States,and prime bankers acceptances of the types authorized forpurchase under l(b) above, from dealers for the account ofthe Federal Reserve Bank of New York under agreementsfor repurchase of such securities, obligations, or accep-tances in 15 calendar days or less, at rates that, unlessotherwise expressly authorized by the Committee, shall bedetermined by competitive bidding, after applying reason-able limitations on the volume of agreements with indi-vidual dealers; provided that in the event Governmentsecurities or agency issues covered by any such agreementare not repurchased by the dealer pursuant to the agree-ment or a renewal thereof, they shall be sold in the marketor transferred to the System Open Market Account; andprovided further that in the event bankers acceptancescovered by any such agreement are not repurchased by theseller, they shall continue to be held by the Federal ReserveBank or shall be sold in the open market.

2. In order to ensure the effective conduct of openmarket operations, the Federal Open Market Committeeauthorizes and directs the Federal Reserve Banks to lendU.S. Government securities held in the System Open Mar-ket Account to Government securities dealers and to banksparticipating in Government securities clearing arrange-ments conducted through a Federal Reserve Bank, undersuch instructions as the Committee may specify from timeto time.

3. In order to ensure the effective conduct of openmarket operations, while assisting in the provision of short-term investments for foreign and international accountsmaintained at the Federal Reserve Bank of New York, theFederal Open Market Committee authorizes and directs theFederal Reserve Bank of New York (a) for System OpenMarket Account, to sell U.S. Government securities to suchforeign and international accounts on the bases set forth inparagraph I (a) under agreements providing for the resaleby such accounts of those securities within 15 calendardays on terms comparable to those available on suchtransactions in the market; and (b) for New York Bankaccount, when appropriate, to undertake with dealers, sub-ject to the conditions imposed on purchases and sales ofsecurities in paragraph l(c), repurchase agreements in U.S.Government and agency securities, and to arrange corre-sponding sale and repurchase agreements between its ownaccount and foreign and international accounts maintainedat the Bank. Transactions undertaken with such accountsunder the provisions of this paragraph may provide for aservice fee when appropriate.


Al'l'lNDIX Jl


B.l Opera t ions in L.-S. ^ n w r i m i a K

\CIU omioil I .V ivmlvr 3 1 . 1 <-J>L>7

Thousands of dollars except as noied

..uul f iAloiai a j c i R ' . :-.i_^ -i b) the K C \ C J \ L ' l i juk of . \cv. Voik !'o

Type of issueand maturity category Purchases Sales Redemptions Exchanges Net

changeHoldings,12/31/97

Holdings.12/31/96

Government sreuriricxTreasury bill*

OutrightMatched transactions

Totalbllls3.577.951.533 -3.580.272,2403.587.098.433 -3.58OJ272.24O

443.486.5090 -443,836.509'0 00 -350,000

Treasury mites and bandsg

Within 1 yew1 to 5 yean5to lOycarsMore than 10 years

Total notes and bonds

SJ49.00019.688,246-3.863.B181

5,897.10034,998,164

-1.995,910000

-1,995.910

Tout government securitiesIncluding mulched transactionsE&cttuung matched tft&sactionfi . . .

Federal agency issuesMaturing:

Withfnlyenr1 to 5 yean5to 10years . . . . . . .More than 10 years

TotaJsgWcyteue* ...

3.622,096,597 -3J>RO.272,24O -1.995.91044.145.064 0 -1.995.910

-1.540.150000

-1,540,150

-27,498 J l l20.273.3115.2I5.O0O2,360,000

350,000

-1.185.OIX)1.185.000

0000

8.796.900-2.32O.707

6,476.193

-23,945.221 >39.961.557>9,078,818'8JS7.1001

33.352,254

39,828.44742,149,154

-l,540,150J

0*0 '0*

-1.540.150

214,149.444 205.352,544-17.026.746 -14.706.039197.122,698 190,646.505

Total System AccountIncluding matched transactionsI S I d i matched transactions

3.622,096,597 -3,580.272,240 -3.536.06044,145,064 0 -3j.16.060

(1 38.288,2970 40,609.004

Federal Reserve Bonk or New Yorkrepurchase agreements 970,894,000 -968,637.000 0 0 2.257,000

49.369.48595,028.35540,906.7364830833

233,612.869

430,735.567447,762.313

252,000152.900254,65025,000

684.550

431.420.117448.446,863

23.840.000

29,045 22195.607,62433,781,91341,825,857

200.260,615

390.907,120405,613,159

1.223.050519,900456,750

25.0002,224,700

393,131,820407,837.859

21,583,000

NOTE. Data arc on a settlement-date basis. Theie were no customer relatedrepurchase agreements passed through to the market foe the year ended Decem-ber 31, 1997. On December 31. 1997, and December 31. 1996, the matched

sale-purchase transaction was $17,026,746,000 and .$14,706,039,000 respec-tively. Loans of Treasury securities by the Federal Resei~ve Bank of New York toprimary dealers for the year ended December 31, 1997, were as follows:

entities loans25,456,165

Maturities25,058,165

Net change398,000

Ujans outstandingDec. 31, 1997 Dec. 31, 1996

887,200 489,200Loan agreements (thousands of dollars)

I Bills in the amount of $350,000,000 were exchanged for Inflation Index Notes on February 6, 1997.2. Includes inflation compensation on Inflation Index Notes of $22,963,500.3. For Treasury notes and bonds, figures do not include the following maturity shifts (thousands of dollars):

Treasury notes and bonds .

Within 1 yea i'

44,269,485

/ to 5 years

-40,540,826

4. For federal agency issues, figures do not include the following maturity shifts (thousands of dollars):

Within 1 year 1 to 5 years

Federal agency issues 569,100 -367.000

5 to 10 years

-1,953,995

J to 10 years

-202,100

More than 10 years

-1,774,664

More than 10 years

0

Appendix C begins on page 530.



Al'P/.XDIX C

I.'. I. Total U.S. T reasu ry and l a t e r a l l y sponsored a ^ e t u y

seeui i t ies hold us ihe Sys t em O p e n \ ! : i rkei Xccuuni.

UkYi.-ml.KTjl. 1007

Thousands of dollars

< .3 . I. S. l 'iv:isur\ miles .mij Jnt jal iuu Index .Viles in the

Iv. le

Deei-inher " 1. 1997

Thousands of dollars, except as noted

Item

Tola] agency issues

US. Tnmuly securitiesBillsNotesBonds ..Inflation Index Notts

Total US. Treasury andagency issues

Holdings.12/31/97

Nel changesince

12/31/96

684350 -1340,150

197.122.698' 6,476.193172333.011 21,611,29059,406.894 10,068,000

1,650.000' 1.650.000

431397.153' 38.265333'

Issue outstanding

1. Holdings were reduced $13,600,000 of January 8, Treasury bills andS3,426,746 of January 15, Treasury bills that were sold under matched sale-purchase agreements, which are returned the following day.

2. Does not reflect inflation compensation on Inflation Index Notes of$22,963,500.

C.2. I'.S. Treasury hills in the S>siem Open

Ace* Mini. I X v c m l v f 3 I. N<-'7


Maturity date orissue outstanding

1/02/981/08/981/15/981/22/981/29/98. .: . . . .2/05/982/12/982/19/982/26/983/05/983/12/983/19/983/26/984/02/984/09/984/16/984^23/984/30/985/07/985/14/985/21/985/28/986/04/986/11/986/18/986/25/987/23/988/20/989/17/98

10/15/9811/12/9812/10/98Tola] that manired

in 1997

Total

Holdings12/31/97

Percentageor toolIssue

ou Winding

Net changesince

12/31/96

6.966.430 30.4 6.966.430194320' A 194,320

4.920.114' 21.0 4.920.1147,450300 17.1 7.450,5006,812,815 30.0 6.812.815

14.158.010 31.3 14.158.0107324.485 30.9 7.324.4857.219364 32.0 7,2193646.793.180 30.1 6,793.180

13.664,955 30.7 13,664.9557371.780 31.8 7371.7806.859310 313 6,8593106,129.235 293 6,129,2359.011.000 30.9 9,0)1,0003,235.000 30.1 3,235,0003,605.000 323 3,605,0003.165.000 29.6 3.165.0009,220.000 28.6 9,220,0003,445,000 31,4 3.445,0003,360,000 30.9 3360.0003,425.000 31.7 3,425,0009,985,000 31.1 9.985,0003.090,000 28.2 3,090.0003.420.0O0 30.3 3,420,0003365,000 29.8 3,365.0008,750,000 29.3 8.75O.0OO5,695,000 303 5,695.0005,797,000 30.9 5,797.0005345,000 303 5345.0006.010.000 32.0 6.010.0005,475.000 29.7 5,475.0005.660,000 313 5,660,000

-190.646,505

197,122,698' . . . 6,476,193

NOTE. Data are on a statement-date basis.I. Holdings were reduced $13,600,000 of January 8, Treasury' bills and

$3,426,746 of January 15, Treasury bills that were sold under matched sale-purchase agreements, which are returned the following day.

Coupon

7.8755.0005.6258.1257.2505.1255.1256.1257.B755.1255.8759.0006.1256.0005.3755.1256.2508.2506.2505.2505.8759.2506.1254.7504.7506.0007.1255.8754.7505.5008.8755.6255.1255.1255.75063755.8755.0005.0008.8755.8755,5005.8756.2507.00063006.37563759.1256.2506.7506.7506.0006.3756.8755.8756.0008.0005.8756.8757.1255.7506.00073005.6257.8755.8757.7505.6255.6257.7506.3757,750K.SO05.8757.1256.87553006.750

Maturitydate

Holdings,12/31/97

Percentageof total issueoutstanding

Net changesince

12/31/96

1/15/981/31/981/31/982/15/982/15/982/28/983/3 W983/31/984/15/984/30/984/30/985/15/985/15/985/31/985/31/986/30/986/30/987/15/987/31/987/31/988/15/988/15/988/31/988/31/989/30/989/30/98

10/15/9810/31/9810/31/9811/15/9811/15/9811/30/9811/30/9812/31/9812/31/981/15/991/31/991/31/992/15/992/15/992/2S/992/28/993/31/993/31/994/15/994/30/994/30/995/15/995/15/995/31/995/31/996/30/996/30/997/15/997/31/997/31/998/15/998/15/998/31/998/31/999730/999/30/99

10/15/9910/31/9910/31/9911/15/9911/15/9911/30/9911/30/9912/31/9912/31/991/IS/001/31/002/15/002/15/002/29/003/31/004/15/004/30/00

877,8001,094.730

756,000440,000

3.83736023923201.295,0001,848,220

634300610.000951,000863,000

4,092.1171,106,000

855.0001,471.0001,177,0001,711.1401.156.750

685.0004,489,8081.480,0001.970300

648,000972300

1.219.0001,001393

995.000937.900

2,721.635546.000819,200929.000

1,679.662875,000892,045745.000757,000

3,644,140951.600

1.199,000715.000

1,875.0001.420.0001.073,7001.219,6201.225,0002,869,1241.637300

738.000686.990

1.644.820644,435349,000

1.531.4001,096,9702.232,110

858,6001,304,630

951,4801,078.752

642380406,115558315502.000814.000

2,790.9681.176.145

548,175795.780

1,379,665689,545864.440986.000846.796

1.322,2901341,510

360.0001.024,250

9.65.76.14.8

18.48.49.98.57.25.04.59.4

19.35.26.9

11.75.4

17.75.45.9

20.113.09.05.07.75.79.84.77.2

13.2534.07.7

13.5438.53.85.9

16.69.86.06.0

14.77.2

10.6956.4

IZ316.34.05.6

1163.63.5

12.46.59.88.47.67.77.43.73.94.63.07.6

12.210.03.24.8

11.16.87.19.24.2

10.710.23.48.3

0138.000110.000

0549,000

1,235.0000

250,00030,000

115,00025,000

385,000640.600435.000

50.00000

436.000290.000213.000

0469.000

1,186,00057.00028300

288,00033,000

170,00080,000

202,00011.000

534,2000

100,00000

745.000380,000172,000106,600

1,199.000280.000

01,420,000

00

1.225,000267,000510,000738.000100.000

0644.435

0385.000

1.096,970452,000

61.0001,304,630

250.0000

6423800

50.000502.000127,00075.000

764.000548.175795.78025.000

0252.000154,000846,796387.000136.000

0256,500Digitized for FRASER

http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Open Market Operations during 1997 53 I

C.3.- f '.4. I..S. Tiwisurv bunds held in the System Open Market

AccnunL Decembei 3 1, l')(-(7



Issue outstanding

Coupon

63758.87562505.8756.1256.000. . . . . .8.7506.3506.1255.750.. .5.7508300 . . . . . . . . . .5.6255.5005.2507.750 ,5.625 ..6.3756.250 . .8.0006,5006.6256.6257.87563006375 ; . . . .6,2507.5005.8756.1256,2506.2S06.6256.6257300 . . . . . . . . . . .6300 .. . . . .6.2506.000 ...6.3756.7S05i8755.7505.7505.625 . . . . . . . . . . .6J505,7505.8757.2507J507.8757.500...6,5006.5005.8755.625&87S7.00063006.250 . . . . . . . . . .6.6256.125Toul that matured

in 1997

Total Treasurynates.......

Inflation IndexNms(Otf)3.6353375total tint matured

in 1997

Total UN

Maturitydate

Holdings,12/31/97

Percentageof loud issueoutstanding

Net changesince

12/31/96

5/15/005/15/005/31/006/30/007/31/OQ8/15/008/15/008/31/009/30/00

10/31/0011/15/0011/15/0011/30/0012/31/00

1/3WQ12/15/012/28/013/31/014/30/015/15/015/31/016/30/017/31/018/15/018/31/019/30/01

10/31/0111/15/0!11/30/0112/31/011/31/022/28/023/31/024/30/025/15/025/31/026/30/027/31/028/15/028/31/029/30/02

10/31/0211/30/0212/31/022/15/038/15/032/15/045/15/048/15/04

11/15/042/15/055/15/058/15/05

11/15/052/15/065/15/067/15/06

10/15/062/15/075/15/078/15/07

7/15/021/15/07

2,807,000480,000843,460740,100455,000

1,309.9451.158.400

650.0001,009.000

537,4301,651.200

881.000646.200891.000800.000929300901.000

1.600,000938 300

1,157,000911.900

U75.0O0873.000

1375.000860300

1.037.000883.000

2,441.000476.000625,000777,000803.000980.900

t .035.00014)16.009

949,000786.000295.000

2^47.000701.000460,000390,000400.000585,000

2.145.0003.685.000

650.0001.905350

810.0001.753.0401,150,0002,000.0001.800.0001,700.0001300.0002.075.0002.265.7522.432.800

540,0001.750.0002,175.000

13.54.66.65.93.77.3

10.55.5S.44.5

10.37.75.27.06.28.27.0

11.36.89.46.78.26.21.16.27.26.0

10.13.4435.85.86.9IX8.77.06.02»9.4S33.63.33.34.99.1

13.2S.0

13.26.1

12.38.3

13.612.011.29.7

L3.0LO.O10.84.1

12.58.5

900.000 5.4750.000 4.8

1,650,000'

2,807,0000

201,0000

70.0001.309,945

314.000135.000285,000

01.651,200

40.000266,20091.000

0252.000101.000100.00073300

265.000256.90075,000

173.000260.000335300387.000313,000898.000286.00025.000

777.000803.000980.900

1,035,00035.000

949.000786,000295.00057.000

701,000460,000390,000400.000585.00050.00065.000

100.00025.000

0140.000

00000

375.000645,000588.000540,000

1,750,0002.175.000

-29.045.221

21,611,290

900.000730,000

0

1,650,000

330011.75013.1251337515.75014.25011.62510.75010.75011.1250.013

12.37513.75011425 . . . . . . . . . .12.000.8.250. . .

10.7509.3757.6257.8758.3758.7509.125

10.37511.75010.00012.75013.87514.00010.375IZOOO13.250. . . . . . . . . .12300 :..11.75011.25010.6259.875 ...9.2507.25073008.7508.B759.1259.0008.8758.12583008.7508.750 ...7.8758.125 . . . . . . . . .8.12S8.0007.2507.6257.1256.25073007.6256.8756.0006.75063006.6256.3756.125

Total thai maturedin 1997. . . . .

Total Treasurybonds

11/15/983/15/dl5/15/018/15/01

11/15/012/15/02

11/15/022/15/035/15/p8/13/03

11V157C35/13/048/15/04

H/I5/MS/lS/05S/IS/05

m2/15/062/15/0?11/15/078/15/0811/15/085/15/0?11/15/092715/105/15/10

.11/157105/15/11

11715/1111/13/128/15/135/IS/M8/15/W

11/15/142/15/158/15/15

11/15/132/15/165/15/16

1U15/165/15/178/15/175/15/18

11/15/182/15/198/15/192/15/205/15/208/15/202/15/iI5/15/218/15/21

11/15/218/15/22

II/1S/222/15/238/15/23

11/15/242/15/258/15/252/15/26B/15/26

11/15/262/15/278/15/27

11/15/27

I . ISOJOOO460.000660.000

1.413,0001,035,000

5O5.000815.000

mm431.000

• d480,000

5»,406*>4

NOTE. Data are on a statement-date basis.

NOTE. Data are on a statement-date basis.1. Does not reflect inflation compensation on Inflation Index Noie.s of

$22,963,500.



L.S. k'denil agency tinkling in ihc Sysk-in Open

Murkt'i Acornm. D^L'L'uiliL-r'} 1, 1097


Issue outstanding

Coupon Maturitydole

Holdings,12/31/97

Percentageof iota]issue

outstanding

Net changesince

12/31/96

Federal HomeLoan Bank5.2609.2509.3008.60084508.6008.3758.600Total thai matured

in 1997

Total

Federal NationalMortgageAssociation

8.6505.3009.1509.4007.8505.3007.0509.5508.7008.4507.0006.4508.3506.I0O9.0509.2007.2007.9007.8007.3006.9506.6256.4506.2005.8007.6007.5508.0508.2506.8506.700

10.3508.200

TOM) that maturedin 1997 . . . . . .

Total

Farm CreditSvnemwlde BondsS.650Total thai matured

in 1997

Total

Federal Land BankTotal that matured

in 1997

Total

Total agency

Total Treasuryand agencyissuea

4/27/9811/25/981/25/996/25/997/26/998/25/99

10/25/991/25/00

2/10/983/11/984/10/988/10/989/10/98

12/10/9812/10/983/10/99

•6/10/997/12/998/11/99

10/14/9911/10/992/10/004/10/009/11/001/10/024/10/026/10/027/10/029/10/024/10/036/10/037/10/03

12/10/034/14/046/10/O47/14/04

10/12/049/12/05

11/10/0512/10/153/10/16

10/01/99

14,0005,0002.0003,9005,000

11.0001OO006,000

56^00

10.00050,00030.00050,0004840015.00030,00025,00023,000

5.00000

7,00025,00010.00010.000

00000

30,00025,00015,00010,000

024.650

030,00020,000

100.00010,00015,000

617,650

10.000

10,000

0

684JS0

4.71.0.4

1.21.41 92.72.0

6.35.0

10.07,4IJ4.13.62.7.7.0.0.4

5.0U2.5.0.0.0,0.0

A35.03.01.3.0

3.1.0

7JI5.0

25,04.03.8

2-3

00000000

-57,700

-57,700

0000000000

-15.0001

-100.000'0000

-10.000'-10,000*-40,100'-12,000'-35,000'

0000

-100.000'0

-5,000*00000

-236,700

-563,800

0

-902,000

-902,006

-16.650

-16,650

-1340,150

38^65,333=

N O T L . Data are on a statement-date basis.1. Called issue.2. Holdings were reduced $13,600,000 of January 8, Treasury bills and

$3,426,746 of January 15, Treasury bills that were sold under matched sale-purchase agreements, which are returned the next day.


533

Industrial Production and Capacity Utilizationfor May 1998

Released for publication June 16

Industrial production rose 0.5 percent in May afterrevised increases of 0.3 percent in April and 0.4 per-cent in March. Some of the increase in total industrialproduction in May resulted from a 2.8 percent surgein the output of utilities and a 1.2 percent jump in theoutput of mines. After having eased earlier in theyear, manufacturing output picked up, rising 0.2 per-cent in May and 0.5 percent in April. At 128.8 per-

Industrial production indexesRatio scale, 1992= 100

_ Consumer goods

Durable /

i i i i

_ Equipment

-

^x^ ^ ^

Defense and space

I I I

1

Business

1 1

V

s '

Nondurable

1

-

1

-

-

1

cent of its 1992 average, total industrial production inMay was 4.4 percent higher than it was in May 1997.The rate of industrial capacity utilization edged up0.1 percentage point in May, to 82.2 percent.

MARKET GROUPS

The production of consumer goods increased substan-tially for the third consecutive month, led by a jump

Ratio scale, 1992= 100

130

120

110

- 100

- 90

150

130

- 110

- 90 -

_ Intermediate products

Construction supplies

1 1 1 1

_ Materials

_ Durable goods s ^

1 1 1 1

Business supplies

I I I

Nondurable goodsand energy —

1 1 1 1

130

120

110

100

- 90

150

130

110

- 90

1990 1992 1994 1996 1998 1990 1992 1994 1996 1998

Capacity utilizationPercent of capacity

- 85

- 80

- 75

Percent of capacity

- 85

- 80

- 75

1984 1986 1988 1990 1992 1994 1996 1998 1984 1986 1988 1990 1992 1994 1996 1998

All series are seasonally adjusted. Latest series. May. Capacity is an index of potential industrial production.Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis


Industrial production and capacity utilization, May 1998

Category

Industrial production, index, 1992=100

1998

Feb.' Mar.'

Percentage change

1998'

Apr.' May P Feb.' Mar.' Apr.' May

May 1997to

May 1998

Total

Previous estimate

Major market groupsProducts, total2

Consumer goodsBusiness equipmentConstruction supplies

Materials

Major industry groupsManufacturing

DurableNondurable

MiningUtilities

Total

Previous estimate

ManufacturingAdvanced processingPrimary processing ..

MiningUtilities

127.3

127.4

120.6115.1146.8126.2138.2

130.6147.8113.0108.8108.2

Average,1967-97

82.1

81.180.582.487.587.3

127.8 128.2 128.8 -.4

127.7 127.8 . . . -.3

121.2116.0147.8124.9138.5

130.6148.1112.6107.8115.0

121.7116.5149.9124.7138.5

131.2148.9113.2107.6112.5

122.2117.0150.5125.4139.2

131.5149.6113.1108.9115.7

-.6-1.3-.4

.8-.1

-.4-.3-.6

.4

.4

.3

.7-1.0

.2

.0

.2-.3-.96.3

.3

.1

.4

.41.4-.2

.0

.5

.6

.5-.2

-2.2

Capacity utilization, percent

Low,1982

High,1988-89

1997

May

1998

Feb.' Mar.' Apr'

71.1

69.070.466.280.375.9

85.4

85.784.288.988.092.6

82.4

81.479.486.090.588.5

82.2

82.3

81.479.685.591.984.9

82.2

82.2

81.079.285.091.090.2

82.1

81.9

81.179.484.990.888.1

i.22.8

May'

82.2

80.979.284.691.990.5

4.4

3.92.88.2275.2

4.76.82.12.13.5

MEMOCapacity,

per-centagechange,

May 1997to

May 1998

4.8

5.46.33.4

.51.2

NOTE. Data seasonally adjusted or calculated from seasonally adjustedmonthly data.

I. Change from preceding month.

2. Contains components in addition 1o those shown,r Revised,p Preliminary.

in the output of durable goods and of energy prod-ucts; the production of non-energy nondurable prod-ucts remained flat. Increases within the durable con-sumer goods category were widespread. The outputof automotive products rose 1.7 percent and was justbelow the high average level of production attainedin the last quarter of 1997. The production of homecomputing equipment and appliances also posted sig-nificant gains. Within the non-energy nondurableconsumer goods category, a moderate increase in theoutput of food and tobacco products was offset by adecrease in the production of clothing; the output ofconsumer chemicals remained flat.

The output of business equipment increased 0.4percent, its third straight monthly gain after havingslowed earlier in the year. The output of computersand transit equipment increased sharply again. Theproduction of other types of equipment decreased; inparticular, the output of industrial equipment retreatedto a level somewhat below the high at the end of1997.

The production of construction supplies increasedafter two months of decline, but it was still below thehigh attained in February. The output of materialsincreased 0.5 percent after some sluggishness inrecent months; most of the gain can be explained by asurge in energy materials. In particular, coal produc-tion increased sharply and was a bit higher than therecord level achieved last December; continuing itsvolatile behavior of recent months, electricity genera-tion also shot up. Among durable goods materials,the output of parts for consumer goods, which hadspiked upward in the fourth quarter, decreased 1.2percent in May after a substantial decline in the firstquarter and a moderate increase in April. The outputof equipment parts advanced once more; semiconduc-tors and parts for computers and electronic communi-cation equipment posted the most significant gains.Within nondurable goods materials, the production oftextile and paper materials increased after two monthsof declines, while the production of chemical materi-als decreased for the fourth consecutive month.


Industrial Production and Capacity Utilization 535

INDUSTRY GROUPS

The increase in manufacturing output reflected a thirdconsecutive monthly increase in the production ofdurable goods, which had declined earlier in theyear. Increases among durables were widespread andwere led once more by strong growth in the produc-tion of computer and office equipment and semicon-ductors. The production of nondurable goodsdeclined 0.1 percent and was virtually unchangedfrom its February level. Significant declines in the

production of apparel, chemicals, petroleum, rubberand plastic products, and leather products werealmost offset by increases in the production of food,tobacco, textiles, and paper.

The operating rate in manufacturing declined0.2 percentage point, to 80.9 percent. The utilizationrate in advanced-processing industries fell back to itsMarch level. The rate for primary-processing indus-tries fell for the fifth consecutive month to its lowestlevel since October 1993, but it remained above itslong-run average. •


536

Statement to the Congress

Statement by Alan Greenspan, Chairman, Board ofGovernors of the Federal Reserve System, before theCommittee on Agriculture, U.S. House of Representa-tives, May 21, 1998

The global financial system has been evolving rap-idly in recent years. New technology has radicallyreduced the costs of borrowing and lending acrosstraditional national borders, facilitating the develop-ment of new instruments and drawing in new players.Information is transmitted instantaneously around theworld, and huge shifts in the supply and demand forfunds naturally follow, resulting in a massive increasein capital flows. This burgeoning global system hasbeen demonstrated to be a highly efficient structurethat has significantly facilitated cross-border trade ingoods and services and, accordingly, has made asubstantial contribution to standards of living world-wide. Its efficiency exposes and punishes underlyingeconomic imprudence swiftly and decisively. Regret-tably, it also appears to have facilitated the transmis-sion of financial disturbances far more effectivelythan ever before.

Three years ago, the Mexican crisis was the firstepisode associated with our new high tech interna-tional financial system. The current Asian crisis is thesecond.

We do not as yet fully understand the new system'sdynamics. We are learning fast and need to updateand modify our institutions and practices to reducethe risks inherent in the new regime. Meanwhile, wehave had to confront the current crisis with the insti-tutions and techniques we have.

Many argued that the Asian crisis should beallowed to run its course without support from theInternational Monetary Fund (IMF) or the bilateralfinancial backing of other nations. They asserted thatallowing this crisis to play out, while doubtless hav-ing additional negative effects on growth in Asia andengendering greater spillovers onto the rest of theworld, would not likely have a large or lasting impacton the United States and on the world economy.

They may well have been correct in their judg-ment, and some would argue that events over the pastsix months have proved them right; we have so faravoided the type of continuing downward spiral thatsome feared. There was, and is, however, a small but

not negligible probability that the upset in East Asiacould have unexpectedly large negative effects onJapan, Latin America, and eastern and central Europethat, in turn, could have repercussions elsewhere,including the United States. Thus, while the probabil-ity of such an outcome may be small, its conse-quences, in my judgment, should not have been leftsolely to chance. We have observed that global finan-cial markets, as currently organized, do not alwaysachieve an appropriate equilibrium or at least requiretime to stabilize. Moreover, the effects of the Asiancrisis on the real economies of the immediatelyaffected countries, as well as on our own economy,are only now just being felt.

Opponents of IMF support for member countriesfacing international financial difficulties also arguedthat such substantial financial backing, by cushioningthe losses of imprudent investors, encourages exces-sive risk-taking. There doubtless is some truth in that,though arguably it has been the expectation of gov-ernments' support of their financial systems that hasbeen the more obvious culprit, at least in the Asiancase. In any event, any expectations of broad bailoutshave turned out to have been disappointed. Many, ifnot most, investors in Asian economies have to datesuffered substantial losses.

Moreover, the policy conditionality, associatedprincipally with IMF lending, which dictates eco-nomic and financial discipline and structural change,helps to mitigate some of the inappropriate risk-taking on the part of governmental authorities. At theroot of the problems has been poor public policy thathas resulted in misguided investments and very weakfinancial sectors. Convincing a sovereign nation toalter destructive policies that impair its own perfor-mance and threaten contagion to its neighbors is besthandled by an international financial institution, suchas the IMF. What we have in place today to respondto crises should be supported even as we work toimprove those mechanisms and institutions.

Some observers have also expressed concern aboutwhether we can be confident that IMF programs forcountries, in particular the countries of East Asia, arelikely to alter their economies significantly and per-manently. My sense is that one consequence of thisAsian crisis is an increasing awareness in the regionthat market capitalism, as practiced in the West,


537

especially in the United States, is the superior model;that is, it provides greater promise of producing ris-ing standards of living and continuous growth.

Although East Asian economies have exhibitedconsiderable adherence to many aspects of free-market capitalism, there has, nonetheless, been apronounced tendency toward government-directedinvestment, using the banking system to finance thatinvestment. Given a record of real growth rates ofclose to 10 percent per annum over an extendedperiod of time, it is not surprising that it has beendifficult to convince anyone that the economic systempracticed in East Asia could not continue to producepositive results indefinitely. Following the break-down, an increasing awareness, bordering in somecases on shock, that their economic model wasincomplete, or worse, has arguably emerged in theregion.

As a consequence, many of the leaders of thesecountries and their economic advisers are endeavor-ing to move their economies much more rapidlytoward the type of economic system that we have inthe United States. The IMF, whatever one might sayabout its policy advice in the past, has played animportant role in this process, providing advice andincentives that promote sound money and long-termstability. The IMF's current approach in Asia is fullysupportive of the views of those in the West whounderstand the importance of greater reliance on mar-ket forces, reduced government controls, scaling backof government-directed investment, and embracinggreater transparency—the publication of all the datathat are relevant to the activities of the central bank,the government, financial institutions, and privatecompanies.

It is a reasonable question to ask how long thisconversion to embracing market capitalism in all

its details will last in countries once temporary IMFfinancial support has come to an end. We are, afterall, dealing with sovereign nations with long tradi-tions, not always consonant with market capitalism.But my sense is that there is a growing understandingand appreciation of the benefits of market capitalismas we practice it and that what is being prescribed inIMF-supported programs fosters their own interests.

Similarly, it is a reasonable question to ask whetherthe U.S. authorities should not seek greater assurancethat the ongoing process of reform in the IMF'spolicies and operations will produce additional con-crete results before we agree to augment the IMF'sresources. I have reason to believe that the manage-ment and staff of the IMF are committed to a processof change. We face a somewhat more difficult task inconvincing the IMF's membership as a whole of theneed for change. However, I am confident that ourleverage in this regard would be reduced if the UnitedStates failed to agree promptly to the proposedincreases in the IMF's resources.

Accordingly, I continue fully to back the Adminis-tration's request to augment the financial resources ofthe IMF by approving as quickly as possible U.S.participation in the New Arrangements to Borrowand an increase in the U.S. quota in the IMF. Hope-fully, neither will turn out to be needed, and no fundswill be drawn. Although the tendency in recentmonths toward stabilization in the East Asian econo-mies is encouraging, clearly those economies are notout of the woods as recent events attest. Moreover,we have not yet put in place the strengthening of theinternational financial architecture that would enableus in the future to place less reliance on the IMF todeal with potential systemic crises. Thus it is better tohave the IMF fully equipped if a quick response to apending crisis is essential. •


538

Announcements

PROCEDURE FOR SUBMITTING NOMINATIONSTO THE CONSUMER ADVISORY COUNCIL ANDNOTICE OF MEETING

The Federal Reserve Board on June 3, 1998,announced that it is seeking nominations for nineappointments to its Consumer Advisory Council. Thecouncil, which consists of thirty members, advisesthe Board on the exercise of its responsibilities underthe Consumer Credit Protection Act and on othermatters on which the Board seeks advice. The groupmeets in Washington, D.C., three times a year.

The nine new members will be appointed to servethree-year terms beginning in January 1999.

Nominations should include the following informa-tion about nominees:

• Past and present positions held• Knowledge, interests, or experience related to

community reinvestment, consumer credit, or otherconsumer financial services

• Complete address with telephone and faxnumbers.

Letters of nomination must be received by July 31,1998, and should be mailed (not sent by facsimile) toSandra F. Braunstein, Assistant Director, Division ofConsumer and Community Affairs, Board of Gover-nors of the Federal Reserve System, Washington, DC20551.

The Board also announced on June 3 that theConsumer Advisory Council would hold its nextmeeting on Thursday, June 25.

FINAL RULE: AMENDMENT TO THE TIER 1LEVERAGE CAPITAL STANDARD

The Federal Reserve Board on June 1, 1998, issued afinal rule amending the tier 1 leverage capital stan-dard for bank holding companies. The rule becameeffective June 30, 1998.

The amendment to Regulation Y (Bank HoldingCompanies and Change in Bank Control) establishesa minimum ratio of tier 1 capital to total assets(leverage ratio) of 3.0 percent for bank holding com-panies that either are rated composite " 1 " under the

BOPEC rating system or have implemented theBoard's risk-based capital market risk measure. Theminimum leverage ratio for all other bank holdingcompanies is 4.0 percent. Bank holding companiesare expected to maintain higher-than-minimum capi-tal ratios if they have supervisory, financial, opera-tional, or managerial weaknesses, or if they are antici-pating or experiencing significant growth.

ISSUANCE OF A FINAL REPORT BY THESYSTEM TASK FORCE ON INTERNAL CREDITRISK MODELS

The Federal Reserve Board on May 29, 1998, issueda final report prepared by the System Task Force onInternal Credit Risk Models. The Task Force wascreated to assess potential uses of internal credit riskmodels within the supervisory and regulatory pro-cesses. The report describes current uses of internalmodels by major U.S. banking organizations andoutlines possible uses of the models for assessingbank capital adequacy.

The report concludes that significant difficultiesexist with respect to model construction, data avail-ability, and model validation procedures so that near-term uses of the models within the regulatory processare limited. However, the report also concludes thatmodels may, over the somewhat longer term, becomeuseful in at least the following two roles:

1. The development of specific and practicalexamination guidance for assessing the capitaladequacy of large, complex banking organizations

2. The setting of regulatory capital requirementsagainst selected instruments that have largely evolvedsubsequent to adoption of the Basle Accord on risk-based capital, such as credit enhancements support-ing securitization programs.

The report is available on request from Publica-tions Services, Mail Stop 127, Board of Governors ofthe Federal Reserve System, Washington, DC 20551.It is also available on the Board's Internet site(http://www.bog.frb.fed.us) under "Regulation andSupervision."


539

ISSUANCE OF ENFORCEMENT ACTIONS

The Federal Reserve Board announced on May 18,1998, the issuance of enforcement actions againstfive foreign banking organizations with bankingoffices in the United States to address serious defi-ciencies in their anti-money-laundering programs.

Temporary Cease and Desist Orders were issuedagainst Banco Nacional de Mexico (Banamex),Mexico; Banca Serfin, S.A., Mexico; Banco Inter-nacional, S.A. (Bital), Mexico; Bancomer, S.A.,Mexico; and Banco Santander, Spain. Each of theseforeign banks operates one or more branches or agen-cies in the United States.

The enforcement actions resulted from an exten-sive undercover "sting" operation conducted by theU.S. Department of Justice and the U.S. Departmentof the Treasury. The Federal Reserve assisted theselaw enforcement agencies.

In connection with the undercover operation, theDepartments of Justice and Treasury announced onMay 18 the indictment and arrest of several bankerscharged with laundering approximately $70 millionin the United States and abroad. They also announcedthe indictment of two of the Mexican banks subjectto the Board's enforcement actions (Bancomer, S.A.and Banca Serfin, S.A.).

The Board's Temporary Cease and Desist Ordersrequire the banks, among other things, to implementnew anti-money-laundering policies and proceduresdesigned to correct the deficiencies in their currentprograms.

Federal Reserve examiners will continue to moni-tor the activities of the banks subject to the enforce-ment actions to ensure full compliance with allapplicable anti-money-laundering-related laws andregulations.

The Federal Reserve Board announced on May 20,1998, the issuance of a Temporary Cease and DesistOrder against Banco Industrial de Venezuela, Cara-cas, Venezuela, to address serious deficiencies in thebank's anti-money-laundering program.

The Board's order is identical to the ones issued onMay 18 against four Mexican banks and one Spanishbank and results from the extensive undercover"sting" operation conducted by the U.S. Departmentsof Justice and Treasury.

In connection with the undercover operation, aBanco Industrial de Venezuela official has beencharged with violations of U.S. criminal money-laundering statutes, and she was arrested on May 19.This arrest was done in conjunction with the arrestsof several Mexican bankers over the weekend. TheBoard's Temporary Cease and Desist Order requires

Banco Industrial de Venezuela, among other things,to implement new anti-money-laundering policiesand procedures designed to correct the deficiencies inits current program.

Federal Reserve examiners will continue to moni-tor the activities of the bank in the United States toensure full compliance with all applicable money-laundering-related laws and regulations.

AVAILABILITY OF THE FEDERAL RESERVEREGULATORY SERVICE ON CD-ROM

The Federal Reserve Board announced on May 26,1998, that a Windows version of the Federal ReserveRegulatory Service (FRRS) is now available onCD-ROM for use on personal computers.

This service, which uses Folio Views® 4.11 search-and-retrieval software, will be updated each month,the same as the printed version of the service. Thesoftware will permit users to do the following:

• Search for any word, phrase, or combination ofwords and phrases in the Regulatory Service

• Search the complete text or the major headings• Limit searches to a specific portion of the service

such as a statute, a regulation, or one section of astatute or regulation

• Review search results through a condensed hitlist.

Single-user subscriptions to the new electronic ser-vice are available for $300 annually ($350 for sub-scriptions outside the United States). The cost ofthe printed version of the service remains at $200annually.

Besides an on-screen user's manual, a printeduser's guide explains the basic features of the soft-ware and how best to use them in researching theFRRS. A telephone number will also be provided fortechnical assistance.

Other features of the service include the following:

• Summaries of monthly changes with links toamended text

4 Cross-references and indexes with links to refer-enced text within the FRRS

• Pop-up footnotes• Print and save capability

The new Windows version can be used on both32-bit and 16-bit systems.

The system requirements are the following:Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis


Hard drive space10 MB for minimum installation (software only)28 MB for full installation (software and infobase)

MonitorVGA or higher-resolution video adapterSVGA 256-color recommended

32-bit version486 or higher processor (Pentium® recommended)Microsoft Windows 95® with 8 MB of memory or

Microsoft Windows NT® 3.51 or later with12 MB of memory

16-bit version486 or higher processorMicrosoft Windows®, lx with 8MB of memory or

Windows for Workgroups®

For a standalone PC, the annual subscription fee is$300. For network subscriptions, the annual fee is$300 for a maximum of one concurrent user, $750 fora maximum of ten concurrent users, $2,000 for amaximum of fifty concurrent users, and $3,000 for a

maximum of one hundred concurrent users. Subscrib-ers outside the United States should add $50 to coveradditional air mail costs. Each network subscriberwill receive a single CD and a corresponding numberof user's guides. Additional user's guides may bepurchased for $5 each.

Orders should be sent to Publications Services,Mail Stop 127, Board of Governors of the FederalReserve System, Washington, DC 20551. All sub-scription requests must be accompanied by a checkor money order payable to the Board of Governorsof the Federal Reserve System or charged to VISA,MasterCard, or American Express. Charge customersonly may fax their orders to 202-728-5886.

CHANGE IN BOARD STAFF

The Federal Reserve Board announced on May 28,1998, the appointment of Barry R. Snyder as Inspec-tor General to succeed Brent L. Bowen, who retiredon June 1, 1998.

Mr. Snyder joined the Board's staff in 1987 andwas promoted to Assistant Inspector General in1989. •


541

Minutes of theFederal Open Market Committee MeetingHeld on March 31, 1998

A meeting of the Federal Open Market Committeewas held in the offices of the Board of Governors ofthe Federal Reserve System in Washington, D.C., onTuesday, March 31, 1998, at 9:00 a.m.

Present:Mr. Greenspan, ChairmanMr. McDonough, Vice ChairmanMr. FergusonMr. GramlichMr. HoenigMr. JordanMr. KelleyMr. MeyerMs. MinehanMs. PhillipsMr. PooleMs. Rivlin

Messrs. Boehne, McTeer, Moskow, and Stern,Alternate Members of the Federal Open MarketCommittee

Messrs. Broaddus, Guynn, and Parry, Presidents ofthe Federal Reserve Banks of Richmond,Atlanta, and San Francisco respectively

Mr. Kohn, Secretary and EconomistMr. Bernard, Deputy SecretaryMr. Coyne, Assistant SecretaryMr. Gillum, Assistant SecretaryMr. Mattingly, General CounselMr. Baxter, Deputy General CounselMr. Prell, EconomistMr. Truman, Economist

Ms. Browne, Messrs. Cecchetti, Dewald, Hakkio,Lindsey, Promisel, Simpson, Sniderman, andStockton, Associate Economists

Mr. Fisher, Manager, System Open Market Account

Mr. Ettin, Deputy Director, Division of Research andStatistics, Board of Governors

Mr. Slifman, Associate Director, Division of Researchand Statistics, Board of Governors

Messrs. Alexander, Hooper, and Ms. Johnson,Associate Directors, Division of InternationalFinance, Board of Governors

Mr. Reinhart, Assistant Director, Division ofMonetary Affairs, Board of Governors

Ms. Low, Open Market Secretariat Assistant,Division of Monetary Affairs, Board ofGovernors

Mr. Rasdall, First Vice President, Federal ReserveBank of Kansas City

Messrs. Goodfriend, Hunter, Kos, Lang, Rolnick, andRosenblum, Senior Vice Presidents, FederalReserve Banks of Richmond, Chicago,New York, Philadelphia, Minneapolis, andDallas respectively

Ms. Rosenbaum, Vice President, Federal ReserveBank of Atlanta

Mr. Rudebusch, Research Officer, Federal ReserveBank of San Francisco

By unanimous vote, the minutes of the meeting ofthe Federal Open Market Committee held on Febru-ary 3-4, 1998, were approved.

The Report of Examination of the System OpenMarket Account, conducted by the Board's Divisionof Reserve Bank Operations and Payment Systems asof the close of business on November 6, 1997, wasaccepted.

The Manager of the System Open Market Accountreported on developments in foreign exchange andinternational financial markets in the period since theprevious meeting on February 3-4, 1998. There wereno System open market transactions in foreign cur-rencies during this period, and thus no vote wasrequired of the Committee.

The Manager also reported on developments indomestic financial markets and on System open mar-ket transactions in government securities and federalagency obligations during the period from Febru-ary 4, 1998, through March 30, 1998. By unanimousvote, the Committee ratified these transactions.

The information reviewed at this meeting sug-gested that the economy continued to expand rapidlyduring the early months of 1998. Apparently, stronggrowth in private domestic spending for consump-



tion, housing, and business equipment more thanoffset weakness in net exports and a slight mod-eration in inventory investment. Total employmentcontinued to rise rapidly, but industrial productionincreased at a considerably slower pace. Despite indi-cations of persisting pressures on employment costsassociated with tight labor markets, price inflationabated further, primarily as a consequence of largedeclines in energy prices.

Nonfarm payroll employment rose sharply furtherin January and February. Growth in construction jobswas particularly strong, apparently reflecting in partthe unseasonably warm weather across much of thecountry and the need to repair damage caused by icestorms and heavy rains. In addition, service industriescontinued to post very large employment gains. Bycontrast, manufacturing payrolls contracted slightlyin February after a sizable increase in January. Thecivilian unemployment rate edged down to 4.6 per-cent in February, equaling its low for the currenteconomic expansion.

Industrial production edged up on balance in Janu-ary and February after having increased rapidly in thesecond half of 1997. Part of the deceleration stemmedfrom the depressing effect of unusually warm winterweather on the provision of heating services by utili-ties. The growth of manufacturing production alsoslowed considerably as a result of downward adjust-ments to assemblies of motor vehicles and, moregenerally, weakness in the output of business equip-ment. With investment in new manufacturing facili-ties still brisk and manufacturing output posting onlya small advance in the January-February period, thefactory operating rate eased a little.

Consumers stepped up their spending in the earlymonths of the year; sentiment remained buoyant inthe context of continued strong growth in disposableincome and further gains in household wealth. Par-ticularly large increases were recorded in expendi-tures on durable goods, apparel, and general mer-chandise. Housing demand also strengthened, withsales of existing homes reaching a record high inFebruary and sales of new homes in January (latestdata) almost equaling the previous record. Both hous-ing starts and building permits remained on anupward trend.

Business fixed investment seemed to have re-bounded from a small decline in the fourth quarter.Shipments of nondefense capital goods, notably ofcomputing equipment whose prices continued to fallsharply, strengthened substantially in January andFebruary. By contrast, expenditures on transportationequipment were sluggish. Despite further declines invacancy rates and rising real estate prices, business

spending on nonresidential construction also seemedto have been lackluster, with such activity not havingchanged much since last summer.

The pace of business inventory accumulationslowed sharply in January from the fourth-quarterrate. Some of the slowdown reflected a reduction inmotor vehicle stocks; the remainder was largely asso-ciated with a drop in inventories of nondurable goodsat the wholesale level. Inventory-sales ratios for mostmanufacturing and trade categories were within theranges experienced over the past year.

The nominal deficit on U.S. trade in goods andservices widened substantially in January from itsaverage monthly level for the fourth quarter. Thevalue of exports declined considerably, partly as aresult of reduced exports to Asia, but the value ofimports changed little. The decrease in exports wasmainly in civilian aircraft and other capital goods.The available information indicated that the pace ofeconomic expansion picked up in Europe after hav-ing slowed somewhat in the fourth quarter and wasstill strong on balance in Canada. Economic activityremained weak in Japan and decelerated sharply inAsian countries that had been the focus of financialturmoil.

Consumer prices were little changed on balance inJanuary and February, as substantial declines inenergy prices largely offset increases elsewhere.Excluding food and energy items, consumer priceinflation picked up somewhat in the first two monthsof the year from the pace of the second half of 1997;on a year-over-year basis, however, the increase inconsumer prices during the twelve months ended inFebruary was slightly smaller than that in the year-earlier period. At the producer level, falling prices forfinished energy goods in January and February pulleddown the index of prices for all finished items;excluding food and energy, prices were unchangedon balance over the two months. Over the twelvemonths ended in February, producer price inflationwas negligible. Tight labor markets appeared to beputting some upward pressure on labor compensa-tion, but the pickup was limited. The change inaverage hourly earnings over the twelve monthsended in February was only slightly larger than theincrease over the year-earlier period.

With economic growth still solid and inflation sub-dued, the Committee at its meeting on February 3-4,1998, had adopted a directive that called for main-taining conditions in reserve markets that would beconsistent with an unchanged federal funds rate ofabout 5Vi percent. The substantial uncertainties aboutthe future strength of economic activity and inflationsuggested that the next change in policy could be in


Minutes of the Federal Open Market Committee 543

either direction, and the Committee also had agreedthat the directive should not contain a presumptionabout the direction of any change in the stance ofpolicy during the intermeeting period. The reservemarket conditions associated with this directive hadbeen expected to be consistent with some moderationin the growth of M2 and M3 over coming months.

Open market operations throughout the intermeet-ing period were directed toward maintaining reserveconditions consistent with the intended average forthe federal funds rate of around 5Vi percent, and therate fluctuated in a narrow range around that level.By contrast, interest rates in other domestic financialmarkets generally rose somewhat on balance overthe period in response to incoming information thatsuggested aggregate private demand remained robust.Despite the rise in rates and some erosion in theoutlook for near-term corporate profits, share pricesin U.S. equity markets moved up substantially further.

In foreign exchange markets, the dollar appreciatedsomewhat on balance over the intermeeting periodin relation to the currencies of the other major indus-trial countries. Against a background of weakeninggrowth in Japan and continued uncertainty about theprospects for fiscal stimulus in that country, the dollarrose considerably against the yen. The dollar changedlittle against the mark and other continental Europeancurrencies but declined against the Canadian dollarand the British pound. The dollar also depreciatedsignificantly relative to the currencies of severalemerging market economies in Asia, reflecting mar-ket assessments that progress had been made inreforming economic policies and financial and com-mercial practices in most of those countries.

The available information for February and part ofMarch indicated that M2 and M3 expanded morerapidly than the Committee had anticipated at thetime of its February meeting. On a quarterly averagebasis, growth of both monetary aggregates picked upsomewhat in the first quarter from already robustrates in the fourth quarter. The increased demand forM2 was perhaps associated in part with the reducedattractiveness of longer-term fixed rate market assets,whose yields had declined significantly relative to thereturns on liquid investment components of M2. Inaddition, households might have been trying to rebal-ance asset portfolios that had become more heavilyweighted in equities as a result of the run-up in stockprices. The pickup in M3 growth reflected a surge inbank issuance of large time deposits to finance strongdemands for loans by businesses and households.The expansion of total domestic nonfinancial debtalso strengthened over recent months in response toheavy private demands for credit.

The staff forecast prepared for this meeting indi-cated that the expansion of economic activity wouldslow appreciably during the next few quarters andremain moderate in 1999. The staff analysis sug-gested that the surge in household net worth over thepast several years would help to support sizable,though gradually diminishing, gains in consumerspending; favorable cash flow affordability wouldunderpin housing demand at a relatively high level;and substantial increases in capital spending wouldpersist until slower growth in business sales andweaker profits began to have a restraining effect in1999. Reduced growth of foreign economic activityand the lagged effects of the considerable rise thathad occurred in the foreign exchange value of thedollar were expected to exert substantial restraint onthe demand for U.S. exports over the projectionperiod and to increase the pressures on domesticproducers that face import competition. An antici-pated slowdown in the pace of inventory accumu-lation also would restrain domestic production asstocks were brought into balance with the expectedlower trajectory for sales. Although pressures onproduction resources would abate to a degree asoutput growth slowed, inflation was expected toincrease somewhat in response to persisting tightnessin labor markets and a diminishing drag from non-oilimport prices.

In the Committee's discussion of current and pro-spective developments, members commented on thepersistence of unusually favorable economic condi-tions, characterized by strong growth and low infla-tion, but a number questioned how long these con-ditions might last without a policy adjustment.Domestic demand was exceeding expectations andwas likely to continue to increase rapidly for sometime, supported by accommodative conditions in keysegments of financial markets. Developments in for-eign trade were moderating demands on domesticresources; but with domestic spending strong, mem-bers were becoming more concerned that those devel-opments might not exert enough restraint on aggre-gate demand to slow the expansion to a sustainablepace in line with the growth of the economy's poten-tial. Despite tightening labor markets, inflation pros-pects remained quite favorable for a while as a num-ber of factors—some temporary—helped to dampnear-term pressures on prices. Nonetheless, in theabsence of some slowing in the expansion, laborcompensation probably would continue to accelerateand increasingly outpace productivity, adding to pres-sures on prices.

In their review of the outlook for spending in keysectors of the domestic economy, members saw little



reason to anticipate substantial slowing in the growthof consumer or business expenditures in comingquarters, and they also expected housing activity tobe maintained at a relatively high level. The recentfurther increases in equity prices from already highlevels played an important role in the assessments ofseveral members. The stock market's rise was viewedas somewhat puzzling, given indications of someslowing in the growth of profits and the potential forearnings disappointments as the expansion in spend-ing moderated and profit margins narrowed in thecontext of more rapid labor cost increases. So long asa high degree of optimism in the stock market per-sisted, however, the elevated level of financial wealthand the low cost of capital should continue to boostspending. Consumer expenditures, especially fordurable goods, had risen sharply thus far this year,and the factors that had fueled that expansion werestill unusually positive. They included large increasesin employment and personal incomes, the continuinguptrend in financial wealth relative to disposableincome, and, in these circumstances, the persistenceof a very high level of consumer confidence. Attrac-tive financing conditions and favorable business con-fidence also were expected to support substantialfurther growth in business investment, especiallyin high tech equipment that was characterized byrapid product improvement and falling prices. Invest-ment in nonresidential structures, notably in officeand other commercial markets, seemed likely tostrengthen somewhat in response to reduced vacancyrates and sizable increases in rents in many areas;indeed, several members again reported indicationsof speculative nonresidential construction in someparts of the country. Residential construction wasexpected to be maintained at a high level, thoughsingle-family starts might soften over the next fewmonths after a surge that appeared to have beenrelated to relatively favorable weather conditions dur-ing the winter. With mortgage rates at their recentreduced levels and incomes continuing to rise, thecash flow affordability of home ownership wasexceptionally favorable.

Developments in two areas of expenditures werethought likely to exert some restraining effect on theoverall expansion in economic activity over comingquarters. One was business inventory accumulation,which had exceeded the robust growth in final salesin 1997 and probably would moderate this year asbusiness firms sought to restrain the buildup in theirinventories to keep them in better alignment with theexpected moderation of gains in sales.

The second, foreign trade developments, also waslikely to have a damping influence on the domestic

economy. While the lagged effects of the dollar'sappreciation and economic conditions in key U.S.trading partners around the world were importantfactors in this assessment, members focused in thisdiscussion on the effects of weakness in several Asianeconomies. Conditions in Japan and in key emergingmarket economies in Asia were still quite fragile,adjustments on the real side of the economy were justbeginning to be felt in some cases, and outcomes foreconomic growth and exchange rates were still verymuch in doubt. Nonetheless, some progress had beenmade in putting recovery programs together, andfinancial markets had seemed to stabilize in severalcountries. Anecdotal reports of adverse repercussionson individual U.S. firms from the Asian financialturmoil had increased somewhat since the Commit-tee's previous meeting, but the direct overall impacton the U.S. economy was still limited. Indeed, devel-opments in Asia also appeared to have had positive,albeit indirect, effects on domestic demand and pricesin the near term by exerting some downward pressureon U.S. interest rates and world oil prices. Prices inthe United States of a number of Asian goods and ofdomestic products competing with those goods hadbeen lowered. Over time, conditions in key Asianeconomies were thought likely to have a more pro-nounced retarding effect on the U.S. economy. Whilethe eventual dimensions of that effect remaineduncertain, a number of members commented that, onthe basis of developments to date, they might turn outto be less negative than had been expected earlier, orat least that some "worst case" outcomes seemed lesslikely.

With regard to the outlook for inflation, membersobserved that price inflation remained quite low—infact, it was still declining by some measures—andthere was little evidence of any potential accelerationin current price data or in anecdotal reports fromaround the country. Nonetheless, as they had at previ-ous meetings, members expressed particular concernabout the outlook for prices in the absence of appre-ciable slowing in the growth of aggregate demand,which appeared to be adding to pressures on laborresources. Anecdotal reports from across the nationcontinued to suggest exceptionally tight labor mar-kets and growing indications of somewhat fasterincreases in labor compensation. To date, unit laborcosts had been contained by large capital investmentsand other initiatives that had raised the productivityof labor. But additional improvements in productivitygrowth could not be counted on to offset furtherincreases in the rate of growth of labor compensation,which were more likely to occur especially if labormarkets were to tighten further. Moreover, the effects


Minutes of the Federal Open Market Committee 545

of a number of special factors that had tended to limitcost pressures and price inflation in recent years werenot likely to persist; these included the declines inworld oil prices, the subdued increases in the costs ofhealth benefits, and the lagged effects of the appreci-ation of the dollar. To be sure, the factors that hadproduced the favorable inflation results of recentyears were not all well understood, and consequentlyexpectations of greater price pressures had to betentative. On balance, though any upsurge in inflationseemed unlikely in the nearer term, the risk thatinflation might move higher over the longer runseemed to have increased.

Despite perceptions of a greater risk of rising infla-tion over time, all but one of the members indicatedin the Committee's policy discussion that they pre-ferred, or could accept, a proposal to maintain anunchanged policy stance that also included a shiftfrom the current symmetrical directive to an asym-metrical directive tilted toward restraint. The mem-bers agreed that should the strength of the economicexpansion and the firming of labor markets persist,policy tightening likely would be needed at somepoint to head off imbalances that over time wouldundermine the expansion in economic activity. Mostsaw little urgency to tighten policy at this meet-ing, however. The economy might well continue toaccommodate relatively robust economic growthand a high level of resource use for an extendedperiod without a rise in inflation. Some membersnoted that price increases would be held down for awhile by the effects of the higher dollar, which hadnot worked their way fully through domestic prices.Moreover, inflation continued to fall by some mea-sures and inflation expectations still seemed to beadjusting downward toward actual inflation; furtherdeclines in these expectations would restrainincreases in compensation and prices. Members alsonoted that the ultimate extent of retarding effectsfrom the financial turmoil in Asia was still uncertain,and several cited the possibility of a downwardadjustment in the stock market, perhaps in responseto disappointing growth in business profits, that couldhave an adverse impact on business and consumerconfidence. In these circumstances, a preemptive pol-icy move to head off rising inflation could provepremature or perhaps even unwarranted; indeed, inthe view of some, a tightening move was not inevi-table. Moreover, because a policy action was notcurrently anticipated, some commented that a tighten-ing could produce an outsized and undesirableresponse in financial markets. On balance, in lightof the uncertainties in the outlook and given that avariety of special factors would continue to contain

inflation for a time, the Committee could await fur-ther developments bearing on the strength of infla-tionary pressures without incurring a significant riskthat disruptive policy actions would be needed laterin response to an upturn in inflation and inflationexpectations.

One member indicated a strong preference for animmediate policy tightening move, largely on thegrounds that under current conditions relatively rapidgrowth in money and credit was not consistent withcontinued progress toward reducing inflation. A num-ber of other members also commented that thestrength of the monetary aggregates, especially if itshould persist, was suggesting ample liquidity andaccommodative financial conditions. In addition,some cited ebullient equity markets and narrowrisk spreads in credit markets as additional evidencethat financial conditions were not restraining finaldemands very much. These were factors that theywould weigh in their evaluation of the need for, andtiming of, a policy tightening move.

The members agreed that they should be particu-larly sensitive to developments that might signal ris-ing inflation pressures, and in that regard a shift to anasymmetric directive seemed desirable. Such a direc-tive would be consistent with the Committee's judg-ment that the information that had become availablesince a symmetric directive was last adopted in Feb-ruary had altered the inflation risks enough to makesome tightening a likely prospect in the not toodistant future. In that regard several suggested thatthe need for some policy tightening could well mate-rialize in the near future.

At the conclusion of the Committee's discussion,all but one member supported a directive that calledfor maintaining conditions in reserve markets thatwere consistent with an unchanged federal funds rateof about 5V2 percent and that contained a bias towardthe possible firming of reserve conditions and ahigher federal funds rate. Accordingly, in the contextof the Committee's long-run objectives for price sta-bility and sustainable economic growth, and givingcareful consideration to economic, financial, andmonetary developments, the Committee decided thata somewhat higher federal funds rate would beacceptable or a slightly lower federal funds rate mightbe acceptable during the intermeeting period. Thereserve conditions contemplated at this meeting wereexpected to be consistent with considerable modera-tion in the growth in M2 and M3 over the monthsahead.

The Federal Reserve Bank of New York was autho-rized and directed, until instructed otherwise by theCommittee, to execute transactions in the System


546 Federal Reserve Bulletin D July 1998

Account in accordance with the following domesticpolicy directive:

The information reviewed at this meeting suggests thateconomic activity continued to grow rapidly during theearly months of 1998. Nonfarm payroll employmentincreased sharply further in January and February, and thecivilian unemployment rate, at 4.6 percent in February,equaled its low for the current economic expansion. How-ever, growth in manufacturing payroll employment wasdown over the first two months of the year, and factoryoutput decelerated appreciably. Consumer spending hasrisen considerably further since year-end, and housingactivity also has strengthened in recent months. Availableindicators point to a sharp rebound in business fixed invest-ment following a small decline in the fourth quarter. Frag-mentary data on nonfarm inventories suggest a slower rateof accumulation early in the year. The nominal deficit onU.S. trade in goods and services widened substantially inJanuary from its average monthly rate in the fourth quarter.Despite indications of persisting pressures on employmentcosts associated with tight labor markets, price inflationhas abated further, primarily as a consequence of largedeclines in energy prices.

Interest rates generally have risen somewhat on balanceover the intermeeting period. Share prices in U.S. equitymarkets have moved up substantially further over theperiod. In foreign exchange markets, the value of the dollarhas increased somewhat over the period in relation to thecurrencies of other major industrial nations, but it hasdepreciated relative to the currencies of most emergingmarket economies in Asia.

Growth of M2 and M3 picked up somewhat in the firstquarter from already robust rates in the fourth quarter.Expansion of total domestic nonfinancial debt also hasstrengthened over recent months.

The Federal Open Market Committee seeks monetaryand financial conditions that will foster price stability andpromote sustainable growth in output. In furtherance ofthese objectives, the Committee at its meeting in Februaryestablished ranges for growth of M2 and M3 of 1 to5 percent and 2 to 6 percent respectively, measured fromthe fourth quarter of 1997 to the fourth quarter of 1998.The range for growth of total domestic nonfinancial debtwas set at 3 to 7 percent for the year. The behavior of themonetary aggregates will continue to be evaluated in thelight of progress toward price level stability, movements intheir velocities, and developments in the economy andfinancial markets.

In the implementation of policy for the immediate future,the Committee seeks conditions in reserve markets consis-tent with maintaining the federal funds rate at an averageof around 5'/2 percent. In the context of the Committee'slong-run objectives for price stability and sustainable eco-nomic growth, and giving careful consideration to eco-nomic, financial, and monetary developments, a somewhathigher federal funds rate would or a slightly lower federalfunds rate might be acceptable in the intermeeting period.The contemplated reserve conditions are expected to beconsistent with considerable moderation in the growth inM2 and M3 over coming months.

Votes for this action: Messrs. Greenspan, McDonough,Ferguson, Gramlich, Hoenig, Kelley, Meyer, Mses.Minehan, Phillips, Mr. Poole, and Ms. Rivlin. Voteagainst this action: Mr. Jordan.

Mr. Jordan dissented because growth rates of vari-ous measures of money and credit in the second halfof 1997 and the first quarter of this year were notconsistent in his view with continued progress inreducing inflation. Recent price statistics understatedthe trend rates of inflation. The one-time effects offalling oil prices, lower food prices, and recent appre-ciation of the dollar on foreign exchange marketsprovided only a temporary reduction of inflation.While some reacceleration of reported rates of infla-tion was probably unavoidable, sustained rapidmoney growth would risk even higher inflation infuture years. The durability of the economic expan-sion would be jeopardized by price and wage deci-sions reflecting expectations that the purchasingpower of the dollar would decline at faster rates inthe future. Once such expectations became imbeddedin the economy, even stronger policy actions wouldbe required in order to reestablish a downward trendof inflation.

It was agreed that the next meeting of the Commit-tee would be held on Tuesday, May 19, 1998.

The meeting adjourned at 1:05 p.m.

Donald L. KohnSecretary


Legal Developments

547

ORDERS ISSUED UNDER BANK HOLDING COMPANYACT

Orders Issued Under Section 4 of the Bank HoldingCompany Act

HUBCO, Inc.Mahwah, New Jersey

Order Approving the Acquisition of a SavingsAssociation

HUBCO, Inc. ("HUBCO"), a bank holding companywithin the meaning of the Bank Holding Company Act("BHC Act"), has requested the Board's approval undersection 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8))and section 225.24 of the Board's Regulation Y (12 C.F.R.225.24) to acquire MSB Bancorp, Inc. ("MSB"), andthereby acquire its savings bank subsidiary, MSB Bank,both in Goshen, New York.'

Notice of the proposal, affording interested persons anopportunity to submit comments, has been published(63 Federal Register 11,446 (1998)). The time for filingcomments has expired, and the Board has considered theproposal and all comments received in light of the factorsset forth in section 4 of the BHC Act.

HUBCO, with total consolidated assets of approximately$3.0 billion, currently operates Hudson United Bank,Union City, New Jersey ("Lead Bank"), Lafayette Ameri-can Bank, Bridgeport, Connecticut ("Lafayette Bank"),and Bank of the Hudson, Poughkeepsie, New York ("Bankof the Hudson").2 HUBCO is the 64th largest depositoryinstitution in New York, controlling deposits of approxi-mately $603 million, representing less than 1 percent oftotal deposits in depository institutions in the state ("statedeposits").3 MSB is the 58th largest depository institutionin New York, controlling deposits of approximately$736 million, representing less than 1 percent of statedeposits. On consummation of the proposal, HUBCO

1. HUBCO proposes to merge MSB Bank with and into its savingsbank subsidiary, Bank of the Hudson, Poughkeepsie, New York.HUBCO has requested approval of the proposed merger from theOffice of Thrift Supervision ("OTS") under section 18(c) of theFederal Deposit Insurance Act (12 U.S.C. § 1828(c)) ("Bank MergerAct"). MSB also has granted HUBCO an option to acquire approxi-mately 21 percent of MSB's outstanding common stock. The optionwould expire on consummation of the proposal.

2. Asset data are as of December 31, 1997, and deposit data are asof June 30, 1997.

3. In this context, depository institutions include commercial banks,savings banks, and savings associations.

would become the 38th largest depository institution inNew York, controlling deposits of approximately $1.3 bil-lion, representing less than 1 percent of state deposits.

The Board previously has determined by regulation thatthe operation of a savings association by a bank holdingcompany is closely related to banking for purposes ofsection 4(c)(8) of the BHC Act.4 In making this determina-tion, the Board requires that savings associations acquiredby bank holding companies conform their direct and indi-rect activities to those permissible for bank holding compa-nies under section 4 of the BHC Act. HUBCO has commit-ted to conform all of MSB Bank's activities to thosepermissible under section 4(c)(8) of the BHC Act andRegulation Y.5

Competitive Considerations

In order to approve the proposal, the Board also mustdetermine that performance of the proposed activities is aproper incident to banking, that is, that the proposed trans-action "can reasonably be expected to produce benefits tothe public . . . that outweigh possible adverse effects, suchas undue concentration of resources, decreased or unfaircompetition, conflicts of interests, or unsound bankingpractices."6 HUBCO and MSB compete directly in theMetropolitan New York/New Jersey banking market("New York banking market").7

On consummation of the proposal, HUBCO would be-come the 18th largest depository institution in the market,controlling deposits of approximately $3.3 billion, repre-senting less than one percent of total deposits in depositoryinstitutions in the market.8 Concentration in the New York

4. 12 C.F.R. 225.28(b)(4).5. MSB Bank currently engages in certain insurance and travel

agency activities that are impermissible for bank holding companies.HUBCO has committed to cease MSB Bank's sale or renewal ofinsurance policies on consummation of the proposal, and to terminateall impermissible insurance and travel agency activities within twoyears of consummation of the proposal.

6. 12 U.S.C. § 1843(c)(8).7. The New York banking market includes New York City; Nassau,

Orange, Putnam, Rockland, Suffolk, Sullivan, and Westchester Coun-ties in New York; Bergen, Essex, Hudson, Hunterdon, Middlesex,Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, War-ren, and a portion of Mercer Counties in New Jersey; Pike County inPennsylvania; and portions of Fairfield and Litchfield Counties inConnecticut.

8. Market share data are as of June 30, 1996. Market share databefore consummation are based on calculations in which the depositsof thrift institutions are included at 50 percent. The Board previouslyhas indicated that thrift institutions have become, or have the potentialto become, significant competitors of commercial banks. See WMBancorp, 76 Federal Reserve Bulletin 788 (1990); National dry



banking market, as measured by the Herfindahl-HirschmanIndex ("HHI") under the Department of Justice MergerGuidelines ("DOJ Guidelines") would not increase, andthe market would remain unconcentrated.9 In addition,numerous competitors would remain in the New Yorkbanking market. Based on these and all other facts ofrecord, the Board concludes that consummation of theproposal would not result in any significantly adverseeffects on competition or on the concentration of bankingresources in the New York banking market or any otherrelevant banking market.

Record of Performance under the CommunityReinvestment Act

In acting on applications to acquire a savings association,the Board considers the records of performance of therelevant depository institutions under the Community Rein-vestment Act (12 U.S.C. § 2901 et seq.) ("CRA").10 TheBoard has reviewed the CRA performance records of LeadBank, Lafayette Bank, Bank of the Hudson, and MSBBank in light of all the facts of record, including commentsreceived on the proposal from Inner City Press/Communityon the Move ("Commenter")." Commenter contends thatdata submitted under the Home Mortgage Disclosure Act(12 U.S.C. § 2801 etseq.) ("HMDA") for 1996 show thatthe marketing and lending activities of Lead Bank, Lafay-ette Bank, and MSB Bank are inadequate and illegallydiscriminatory with respect to minorities. Commenter alsomaintains that HUBCO's subsidiary banks and MSB Bankdo not adequately serve the credit needs of low- andmoderate-income ("LMI") communities, and that HUBCOfunds its acquisitions of banking organizations throughbranch closings.12

Corporation, 70 Federal Reserve Bulletin 743 (1984). Because thedeposits of MSB Bank would be acquired by a commercial bankingorganization under the proposal, MSB Bank's deposits are included at100 percent in the calculation of the pro forma market share. SeeNorwest Corporation, 78 Federal Reserve Bulletin 452 (1992); FirstBanks, Inc., 76 Federal Reserve Bulletin 669 (1990).

9. Under the revised DOJ Guidelines (49 Federal Register 26,823(June 29, 1984)), a market in which the post-merger HHI is less than1000 points is considered to be unconcentrated. The Department ofJustice has informed the Board that a bank merger or acquisitiongenerally will not be challenged (in the absence of other factorsindicating anticompetitive effects) unless the post-merger HHI is atleast 1800 and the merger increases the HHI by more than 200 points.The Department of Justice has stated that the higher than normal HHIthresholds for screening bank mergers for anticompetitive effectsimplicitly recognize the competitive effect of limited-purpose lendersand other non-depository financial entities. The HHI in the New Yorkbanking market would decrease by one point to 794 as a result of theproposal.

10. See Bane One Corporation, 83 Federal Reserve Bulletin 602(1997).

11. HUBCO proposes to merge MSB Bank with and into Bank ofthe Hudson and to implement the CRA programs and policies of Bankof the Hudson at MSB Bank after consummation of the merger.

12. Commenter argues that HUBCO's ownership of MSB preferredstock since 1996 requires that the Board attribute MSB Bank's recordof CRA performance to HUBCO. In connection with that investment,HUBCO provided a number of commitments that the Board has relied

A. CRA Performance Examinations

As provided in the CRA, the Board evaluates the record ofperformance of an institution in light of examinations bythe appropriate federal supervisors of the CRA perfor-mance records of the relevant institutions. An institution'smost recent CRA performance evaluation is a particularlyimportant consideration in the applications process becauseit represents a detailed on-site evaluation of the institu-tion's overall record of performance under the CRA by itsappropriate federal supervisor.13

Lead Bank received an overall rating of "satisfactory"from its appropriate federal supervisor, the Federal DepositInsurance Corporation ("FDIC"), at its most recent evalu-ation for CRA performance, as of February 1997 ("1997Examination"). Lafayette Bank received an "outstanding"CRA performance rating from the FDIC at its most recentevaluation for CRA performance, as of March 1996("Lafayette Examination").14 In addition, as of May 1997,the State of Connecticut Department of Banking("SCDB") rated Lafayette Bank's CRA performance "sat-isfactory" pursuant to Connecticut law.15

Bank of the Hudson received an "outstanding" CRAperformance rating from its appropriate federal supervisor,the OTS, at its most recent CRA examination, as of Febru-ary 1998. MSB Bank also received an overall rating of"satisfactory" from the OTS at its most recent evaluationfor CRA performance, as of September 1997.

Examiners found no evidence of prohibited discrimina-tion or other illegal credit practices at HUBCO's subsid-iary depository institutions or MSB Bank. The examina-tions also reviewed the delineations of the localcommunities served by the depository institutions andfound that such delineations were consistent with applica-ble law and did not arbitrarily exclude LMI communities,and that the depository institutions solicited and acceptedcredit applications from all segments of their delineatedcommunities. Examiners also determined that loans madeby the depository institutions were reasonably distributedthroughout the local communities they served, includingLMI communities, and served all members of the commu-nities, including LMI individuals.

on in other cases to determine that an investing bank holding companywould not be able to exercise a controlling influence over anotherdepository institution. There is no evidence in the record that HUBCOhas taken actions inconsistent with the commitments. For the reasonsdiscussed in this order, moreover, MSB Bank's record of performanceunder the CRA does not present adverse considerations.

13. The Statement of the Federal Financial Supervisory AgenciesRegarding the Community Reinvestment Act provides that a CRAexamination is an important and often controlling factor in the consid-eration of an institution's CRA record and that reports of theseexaminations will be given great weight in the applications process.54 Federal Register 13,742 and 13,745 (1989).

14. In reviewing the CRA performance record of Lafayette Bank,the Board also has considered confidential supervisory informationcollected by the FDIC during the course of an ongoing CRA examina-tion of the bank.

15. See Conn. Gen. Stat. § 36a-32 (1997).Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 549

B. Lending Record of the Relevant DepositoryInstitutions

Lead Bank in New Jersey. The 1997 Examination foundthat Lead Bank developed or participated in a number ofprograms designed to assist in meeting the housing-relatedcredit needs of LMI individuals. Examiners noted that thebank offered a proprietary affordable mortgage program forqualified LMI borrowers that featured below-market inter-est rates, reduced application fees, and no mortgage insur-ance requirement for mortgages with a loan-to-value ratioof less than 90 percent. Examiners also noted that the bankoffered an affordable home equity and home improvementloan program for LMI borrowers that featured below-market interest rates and no maximum or minimum loanamounts. In addition, the examination favorably com-mented on Lead Bank's participation in programs spon-sored by the New Jersey Housing and Mortgage FinanceAgency ("NJHMFA").16 The 1997 Examination also re-viewed 1995 and 1996 HMDA data filed by Lead Bankand found the bank's originations in 1995 and 1996 re-flected a good penetration among retail customers of differ-ent income levels and that the geographic distribution ofthe bank's applications, originations, and denials was rea-sonable.17

Examiners also found that Lead Bank engaged in smallbusiness lending throughout its assessment area. In 1996,the bank originated approximately 214 small businessloans, totalling approximately $34.7 million, and morethan 24 percent of these loans were made to businesses inLMI census tracts within Lead Bank's service community.Lead Bank made 39 Small Business Administration("SBA") loans in 1995, totalling $3.7 million, and 35 SBAloans in 1996, totalling $3.4 million.18 The Board notesthat HUBCO entered into an agreement with a communityorganization in New Jersey after the 1997 Examination toprovide $75 million over the next five years to programsthat seek to provide affordable housing and economicopportunities to LMI individuals in New Jersey.

Lafayette Bank in Connecticut. Examiners found thatLafayette Bank's record of lending within LMI censustracts and to LMI individuals was good and reflectedmanagement's commitment to community development.The Lafayette Examination also concluded that LafayetteBank had an outstanding record of ascertaining and help-

16. Lead Bank is a participating lender in NJHMFA's First-TimeHomebuyers Program, which offers LMI first-time homebuyers low-cost, fixed-rate, 30-year mortgage loans with a maximum 97 percentloan-to-value ratio, and NJHMFA's Buy and Fix-It Program.

17. Examiners noted that Lead Bank could improve its record oflending in LMI areas in several New Jersey counties and encouragedthe bank to improve its lending record in these areas, particularly inMiddlesex and Somerset Counties. The Board also expects Lead Bankto address these matters. As discussed in this order, however, LeadBank's overall CRA performance rating is satisfactory and the bankengages in a number of lending activities designed to help meet thecredit needs of its communities, including LMI neighborhoods.

18. The SBA awarded the bank a Bronze Award in 1995 and 1996for its performance in the SBA Guaranteed Loan Program and hasaccorded the bank preferred lender status.

ing to meet the credit needs of its entire service commu-nity, including LMI neighborhoods. Examiners found thatthe bank actively ascertained community needs and em-ployed a number of methods to ascertain those needs,including surveys of local citizens and bank directors,officers, and employees, and meetings with communityleaders, social service agencies, and bank customers.19

Examiners also found Lafayette Bank to be receptive toparticipation in, and marketing of, loan programs spon-sored by federal, state, and local government organiza-tions. During 1995, the bank originated 24 SBA loans,totalling $6.2 million; the bank's current SBA portfolioconsists of 132 loans, totalling $30.3 million. In February1996, the bank was recognized as one of its service area'sleading certified SBA lenders. Lafayette Bank also hasparticipated in the Connecticut Small Business ReserveFund, which facilitates bank lending to small businesses inurban areas. Through September 30, 1995, the bank hadextended 24 loans, totalling $1.5 million, through thisprogram. Lafayette Bank also offers the Federal HousingAdministration Insured Residential Mortgage Program,which provides insured residential mortgages to qualifiedLMI applicants at below-market interest rates and withreduced down payment requirements. In conjunction withthe Connecticut Department of Housing, the bank hasdeveloped the First-Time Homebuyers Mortgage Program,which enables LMI applicants to qualify to purchase homeswith no down payment.

Lafayette Bank also provides financial support to a num-ber of community development programs in its assessmentarea. For example, examiners noted that the bank provideda line of credit to Neighborhood Housing ServiceS~bf NewHaven, which rehabilitates real estate and resells the prop-erties to LMI individuals, and to the New Haven LoanFund, which provides construction financing for the devel-opment of LMI housing units in the Greater New Havenarea. The bank also provided financing to qualified borrow-ers in connection with the Bridgeport Neighborhood Fund,Neighborhood Housing Services of Norwalk, and the Cityof Meridian's Block Grant Program, each of which areorganizations that rehabilitate property for resale to LMIborrowers.

Bank of the Hudson in New York. The 1998 examinationof Bank of the Hudson concluded that the institution hadshown a commitment to provide affordable housing loansto LMI individuals in its community by offering severalinnovative and flexible affordable home loan programsdesigned to assist LMI borrowers.20 Examiners noted thatBank of the Hudson made 318 loans in its assessment areaunder these affordable mortgage programs, representing 28

19. The Lafayette Examination noted that the bank's ongoing com-munity contacts have resulted in the bank's participation in severalcommunity development projects and loan programs sponsored bylocal governments.

20. These programs include the City of Poughkeepsie First TimeHomebuyers Program, the Dutchess Housing Partnership First TimeHomebuyers Program, the Hudson Valley First Time HomebuyersProgram, and the First Home Club Savings Program.



percent of the number and dollar volume of the bank's 1-4family mortgage lending in the assessment area.

With respect to community development, examinersfound that the number and dollar volume of Bank of theHudson's community development loans and activitiesdemonstrated an outstanding response to the economicdevelopment needs of its community. Examiners noted thatthe institution had made seven community developmentloans, totalling $8.2 million, during the assessment period(August 1995 to December 1997) and had established adepartment dedicated to community development lend-ing.21 Examiners also noted that the institution made42 small business loans, totalling $6.75 million, in itsassessment area, and that the geographic distribution of thebank's residential mortgage, consumer, and small businessloans compared favorably to lenders in the aggregate.

C. Branch Closings

HUBCO does not intend to close any branches as a resultof the proposal. The Board has reviewed Commenter'scontentions regarding HUBCO's branch closings in thepast or in other proposed transactions in that light. TheBoard also has reviewed the most recent CRA examinationreports and other confidential supervisory information fromthe appropriate federal supervisors of HUBCO's subsidiarydepository institutions and MSB Bank assessing the banks'records of branch closings and branch closing policies. TheBoard notes that the appropriate federal supervisors ofHUBCO's subsidiary depository institutions and MSBBank concluded that the branching networks of these de-pository institutions provided reasonable access to servicesof the institutions to all segments of their delineated com-munities. Examiners also concluded that the branch clos-ings of Lead Bank and Lafayette Bank had not adverselyaffected LMI communities or LMI individuals.22 Examin-ers also reviewed the branch closing policy of LafayetteBank and concluded that the policy was consistent withapplicable law.

21. Bank of the Hudson provided a $480,000 construction loan tothe Village Housing Project for the construction of rental housingunits for LMI senior citizens, and a $120,000 subsidy under theFederal Home Loan Bank Affordable Housing Program to the GardenStreet Revitalization project to renovate 72 homes in a low-incomearea of Poughkeepsie.

22. In addition to these factors, the Board has considered thatfederal banking law permits the closing of branches and provides aspecific mechanism for addressing branch closings. Section 42 of theFederal Deposit Insurance Act (12 U.S.C. § 1831 r-1), as implementedby the Joint Policy Statement Regarding Branch Closings(58 Federal Register 49,083 (1993)), requires that an insured deposi-tory institution provide the public with at least 30 days' notice and theappropriate federal supervisor with at least 90 days' notice before thedate of the proposed branch closing. The insured depository institutionalso is required to provide reasons and other supporting data for theclosure, consistent with the institution's written branch closing policy.The requirement applies any time a branch is closed, whether inconnection with an acquisition or at any time after completion of anacquisition. The law does not authorize federal regulators to preventthe closing of any branch.

D. HMDA Data

The Board has carefully reviewed HMDA data filed byLead Bank, Lafayette Bank, and MSB Bank in light ofCommenter's contentions. HMDA data for Lead Bank andLafayette Bank indicate some disparities in the rate of loanoriginations, denials, and applications by racial group andincome level. The data also indicate, however, that, in 1995and 1996, Lead Bank received a higher percentage of itscredit applications from LMI census tracts in the Bergen-Passaic Metropolitan Statistical Area ("MSA"), and had ahigher origination rate with respect to such applications,than lenders in the aggregate. The data also indicate thatLead Bank's ratio of denials of African-American creditapplicants to white credit applicants in the combined areaof the Bergen-Passaic and Newark MSAs was lower thanthat of lenders in the aggregate in 1995 and 1996.

The Board is concerned when an institution's recordindicates disparities in lending to minorities and believesthat all banks are obligated to ensure that their lendingpractices are based on criteria that assure not only safe andsound banking, but also equal access to credit by creditwor-thy applicants regardless of race. The Board recognizes,however, that HMDA data alone provide an incompletemeasure of an institution's lending in its community andhave limitations that make the data an inadequate basis,absent other information, for concluding that an institutionhas engaged in illegal discrimination in making lendingdecisions.23

Because of the limitations of HMDA data, the Board hascarefully reviewed other information, particularly examina-tion reports that provide an on-site evaluation of compli-ance by the banks with fair lending laws. As discussedabove, examiners noted no evidence of prohibited discrim-ination or other illegal credit practices at HUBCO's subsid-iary depository institutions or MSB Bank at their mostrecent examinations. In addition, examiners commentedfavorably that HUBCO's subsidiary banks had a formalreview process for all denied mortgage loan applications.The Board also has considered the HMDA data in light ofthe lending record of the institutions, which shows that thebanks are assisting in meeting the credit needs of theirentire communities, including LMI neighborhoods.24

23. The data, for example, do not provide a basis for an independentassessment of whether an applicant who was denied credit was, infact, creditworthy. Credit history problems and excessive debt levelsrelative to income (reasons most frequently cited for a credit denial)are not available from HMDA data.

24. Commenter alleges that HUBCO has violated the fair lendinglaws by expanding its branch presence, particularly into Connecticutand New York, in a manner that avoids LMI and minority communi-ties. The Board notes that HUBCO acquired its branches in Connecti-cut and New York through the acquisition of entire banking organiza-tions, not by opening new branches in selected communities.Furthermore, as discussed in this order, FDIC and OTS examinersnoted no evidence of prohibited discrimination by Lead Bank, Lafay-ette Bank, Bank of the Hudson, or MSB Bank in their most recentexaminations of these institutions, and concluded that the branches ofthese institutions were reasonably accessible to the communitiesserved by the institutions.



E. Conclusion on CRA Performance Records Conclusion

The Board has carefully considered all the facts of record,including Commenter's comments and confidential exami-nation reports and other supervisory information from theappropriate federal supervisors, in reviewing the CRA per-formance records of the institutions involved in the transac-tion. Based on a review of the entire record, and for thereasons discussed above, the Board concludes that theCRA performance records of HUBCO's subsidiary deposi-tory institutions and MSB Bank are consistent with ap-proval of the proposal.25

Other Considerations

In connection with its review of the public interest factorsunder section 4 of the BHC Act, the Board has carefullyreviewed the financial and managerial resources ofHUBCO and MSB and their respective subsidiaries and theeffect the transaction would have on such resources in lightof all the facts of record.26 These facts include confidentialfinancial information from HUBCO and confidential re-ports of examination and other supervisory informationreceived from the appropriate federal supervisors of theaffected organizations assessing the financial and manage-rial resources of the organizations. Based on all the facts ofrecord, the Board concludes that the financial and manage-rial resources of the organizations involved in the proposalare consistent with approval.

Additionally, there are public benefits to be derived frompermitting capital markets to operate so that bank holdingcompanies may make potentially profitable investments innonbanking companies when, as in this case, those invest-ments are consistent with the relevant considerations underthe BHC Act, and from permitting banking organizationsto allocate their resources in the manner they believe ismost efficient. Based on all the facts of record, the Boardhas determined that consummation of this proposal canreasonably be expected to produce public benefits thatwould outweigh any likely adverse effects under the properincident to banking standard of section 4(c)(8) of the BHCAct.

25. Commenter requests that the Board conduct a fair lendingexamination of Lead Bank and Lafayette Bank and refer the banks tothe Department of Justice for possible enforcement action under thefair lending laws. The FDIC, the appropriate federal supervisor ofLead Bank and Lafayette Bank, is charged with primary responsibilityfor examining the compliance of such banks with the fair lendinglaws. As discussed above, the FDIC found no evidence of prohibiteddiscrimination by Lead Bank and Lafayette Bank at the most recentCRA examination of these institutions. Based on these and all otherfacts of record, the Board concludes that neither a special on-siteexamination of HUBCO's subsidiary depository institutions for fairlending law compliance nor referral of the institutions to the Depart-ment of Justice is warranted.

26. See 12 C.F.R. 225.26.

Based on the foregoing and all the facts of record, theBoard has determined that the notice should be, and herebyis, approved.27 The Board's approval of the proposal isspecifically conditioned on compliance by HUBCO withthe commitments made in connection with the notice. TheBoard's determination also is subject to all the conditionsin Regulation Y, including those in sections 225.7 and225.25(c) (12 C.F.R. 225.7 and 225.25(c)), and to theBoard's authority to require such modification or termina-tion of the activities of a holding company or any of itssubsidiaries as the Board finds necessary to assure compli-ance with, or to prevent evasion of, the provisions andpurposes of the BHC Act and the Board's regulations andorders issued thereunder. The commitments and conditionsrelied on by the Board in reaching this decision shall bedeemed to be conditions imposed in writing by the Boardin connection with its findings and decision and, as such,may be enforced in proceedings under applicable law.

This transaction shall not be consummated later thanthree months after the effective date of this order, unlesssuch period is extended for good cause by the Board or theFederal Reserve Bank of New York, acting pursuant todelegated authority.

By order of the Board of Governors, effective May 13,1998.

Voting for this action: Chairman Greenspan, Vice Chair Rivlin, andGovernors Kelley, Phillips, Meyer, Ferguson, and Gramlich.

JENNIFER J. JOHNSON

Deputy Secretary of the Board

27. Commenter also requests that the Board hold a public hearing ormeeting on the notice to receive evidence concerning HUBCO'srecord of lending and expansion into predominately non-minoritycommunities, and the efficacy of the passivity commitments providedby HUBCO in connection with its January 1996 acquisition of MSBpreferred stock. The Board's rules provide for a hearing on noticesunder section 4 of the BHC Act if there are disputed issues of materialfact that cannot be resolved in some other manner. See 12 C.F.R.225.25(a)(2). Under its rules, the Board also may, in its discretion,hold a public hearing or meeting on a notice to acquire a savingsassociation if a hearing is necessary or appropriate to clarify factualissues related to the notice and to provide an opportunity for testi-mony, if appropriate.

After a careful review of all the facts of record, the Board hasconcluded that Commenter disputes the weight that should be ac-corded to and the conclusions that the Board should draw from thefacts of record, but does not identify disputed issues of fact that arematerial to the Board's decision. The Board also notes that interestedparties have had ample opportunity to submit their views, and Com-menter has submitted written comments that have been carefullyconsidered by the Board in acting on the notice. Commenter's requestfails to demonstrate why its written presentation does not adequatelypresent its evidence, allegations, and views and to summarize theevidence that would be presented at a hearing or meeting. For thesereasons, and based on all the facts of record, the Board has determinedthat a public hearing or meeting is not required or warranted in thiscase. Accordingly, the request for a public hearing or meeting on theproposal is hereby denied.



Norwest CorporationMinneapolis, Minnesota

Norwest Investment Services, Inc.Minneapolis, Minnesota

Order Approving Notice to Engage in Underwriting andDealing in All Types of Debt Securities on a LimitedBasis

Norwest Corporation ("Norwest"), a bank holding com-pany within the meaning of the Bank Holding CompanyAct ("BHC Act"), and its wholly owned subsidiary, Nor-west Investment Services, Inc. ("Company"), have re-quested the Board's approval under section 4(c)(8) of theBHC Act (12U.S.C. § 1843(c)(8)) and section 225.24 ofthe Board's Regulation Y (12 C.F.R. 225.24) to engagede novo in underwriting and dealing, to a limited extent, inall types of debt securities.

Notice of the proposal, affording interested persons anopportunity to submit comments, has been published(63 Federal Register 17,874 (1998)). The time for filingcomments has expired, and the Board has considered thenotice and all comments received in light of the factors setforth in section 4(c)(8) of the BHC Act.

Norwest, with total consolidated assets of $88.5 billion,is the Uth largest commercial banking organization in theUnited States.1 Norwest operates subsidiary banks in16 states and engages through its subsidiaries in a broadrange of permissible nonbanking activities. Company cur-rently engages in limited underwriting and dealing in bank-ineligible securities,2 as permitted under section 20 of theGlass-Steagall Act (12U.S.C. § 377).3 Company is, andwill continue to be, a broker-dealer registered with theSecurities and Exchange Commission ("SEC") and amember of the National Association of Securities Dealers,Inc. ("NASD"). Accordingly, Company is subject to therecordkeeping and reporting obligations, fiduciary stan-dards, and other requirements of the Securities ExchangeAct of 1934 (15 U.S.C. § 78a et seq.), the SEC, and theNASD.

The Board has determined that—subject to the pruden-tial framework of limitations established in previous deci-sions to address the potential for conflicts of interests,unsound banking practices, or other adverse effects—theproposed activities of underwriting and dealing in bank-ineligible securities are so closely related to banking as to

1. Asset and ranking data are as of December 31,1997.2. As used in this order, the term "bank-ineligible securities" refers

to securities that a member bank may not underwrite or deal indirectly under section 16 of the Glass-Steagall Act (12 U.S.C.§ 24 (Seventh)).

3. Company has authority to underwrite and deal in, to a limitedextent, certain municipal revenue bonds, 1—4 family mortgage-relatedsecurities, commercial paper, and consumer receivable related securi-ties. Company also is authorized to engage in a variety of othernonbanking activities. See Norwest Corporation, 76 Federal ReserveBulletin 79 (1990); see also Letter Interpreting Section 20 Orders,81 Federal Reserve Bulletin 198 (1995).

be proper incidents thereto within the meaning of sec-tion 4(c)(8) of the BHC Act.4 The Board also has deter-mined that conduct of the proposed activities is consistentwith section 20 of the Glass-Steagall Act, provided that thecompany engaged in the underwriting and dealing activi-ties derives no more than 25 percent of its gross revenuesfrom underwriting and dealing in bank-ineligible securi-ties.5

Norwest has committed that Company will conduct theproposed underwriting and dealing activities using thesame methods and procedures, and subject to the sameprudential limitations, as established by the Board in theSection 20 Orders. Norwest also has committed that Com-pany will conduct its bank-ineligible underwriting anddealing activities subject to the Board's revenue restriction.As a condition of this order, Norwest is required to conductits bank-ineligible securities underwriting and dealing ac-tivities subject to the revenue restrictions and the Operat-ing Standards established for section 20 subsidiaries("Operating Standards").6

In order to approve this notice, the Board also mustconsider whether performance of the proposed activities isa proper incident to banking, that is, whether the activitiesproposed "can reasonably be expected to produce benefitsto the public . . . that outweigh possible adverse effects,such as undue concentration of resources, decreased orunfair competition, conflicts of interests, or unsound bank-ing practices."7 As part of its evaluation of these factors,the Board considers the financial condition and managerialresources of the notificant and its subsidiaries and the effectthe transaction would have on such resources.8 The Board

4. See Canadian Imperial Bank of Commerce, et ai, 76 FederalReserve Bulletin 158 (1990); J.P. Morgan & Co. Incorporated, et al,75 Federal Reserve Bulletin 192 (1989), aff'd sub mm. SecuritiesIndustries Ass'n v. Board of Governors of the Federal Reserve System,900 F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 73 Federal ReserveBulletin 473 (1987), aff'd sub nom. Securities Industry Ass 'n v. Boardof Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir.),cert, den., 486 U.S. 1059 (1988); as modified by Review of Restric-tions on Director, Officer and Employee Interlocks, Cross-MarketingActivities, and the Purchase and Sale of Financial Assets Between aSection 20 Subsidiary and an Affiliated Bank or Thrift, 61 FederalRegister 57,679 (1996), and Amendments to Restrictions in theBoard's Section 20 Orders, 62 Federal Register 45,,295 (1997) (collec-tively, "Section 20 Orders").

5. See Section 20 Orders. Compliance with the revenue limitationshall be calculated in accordance with the method stated in the Sec-tion 20 Orders, as modified by Order Approving Modifications to theSection 20 Orders, 75 Federal Reserve Bulletin 751 (1989),10 Percent Revenue Limit on Bank-Ineligible Activities of Subsidiariesof Bank Holding Companies Engaged in Underwriting and Dealing inSecurities, 61 Federal Register 48,953 (1996), and Revenue Limit onBank-Ineligible Activities of Subsidiaries of Bank Holding CompaniesEngaged in Underwriting and Dealing in Securities, 61 FederalRegister 68,7'50 (1996) (collectively, "Modification Orders").

6. 12 C.F.R. 225.200. Company may provide services that arenecessary incidents to the proposed underwriting and dealing activi-ties. Unless Company receives specific approval under section 4(c)(8)of the BHC Act to conduct the activities independently, any revenuesfrom the incidental activities must be treated as ineligible revenuessubject to the Board's revenue limitations.

7. 12 U.S.C. § 1843(c)(8).8. See 12 C.F.R. 225.24.



has reviewed the capitalization of Norwest and Companyin accordance with the standards set forth in the Section 20Orders and finds the capitalization of each to be consistentwith approval of the proposal. With respect to Company,this determination is based on all the facts of record,including Norwest's projections of the volume of Compa-ny's underwriting and dealing activities in bank-ineligiblesecurities. The Board also has reviewed the managerialresources of Norwest and its subsidiaries in light of exami-nation reports and other supervisory information. Based onall other facts of record, including the commitments pro-vided in this case and the proposed managerial and risksystems of Company, the Board has concluded that finan-cial and managerial considerations are consistent with ap-proval of the notice.

In addition, the Board has carefully considered the com-petitive effects of the proposal. The Board expects that thede novo entry of Company into the market for the proposedservices would provide added convenience to Norwest'scustomers, lead to improved methods of meeting customerfinancing needs, and increase the level of competitionamong existing providers of these services. For the reasonsset forth, and based on all the facts of record, the Board hasdetermined that performance of the proposed activities byCompany can reasonably be expected to produce publicbenefits that outweigh possible adverse effects under theproper incident to banking standard of section 4(c)(8) ofthe BHC Act.

On the basis of all the facts of record, the Board hasdetermined that the notice should be, and hereby is, ap-proved, subject to all the terms and conditions in this order.The Board's approval of this proposal extends only toactivities conducted within the limitations of this order,including the Board's reservation of authority to establishadditional limitations to ensure that Company's activitiesare consistent with safety and soundness, avoidance ofconflicts of interests, and other relevant considerationsunder the BHC Act. Underwriting and dealing in anymanner other than as approved in this order and the Section20 Orders (as modified by the Modification Orders) is notwithin the scope of the Board's approval and is not autho-rized for Company.

Included among the conditions set forth in the Section20 Orders is a condition that Company not commence theproposed underwriting and dealing activities until theBoard has determined that Norwest and Company haveestablished policies and procedures to ensure compliancewith this order and the Section 20 Orders, including com-puter, audit, and accounting systems, internal risk manage-ment procedures and controls, and the necessary opera-tional and managerial infrastructure for underwriting anddealing in all types of debt securities. On the basis of arecent review by the Federal Reserve Bank of Minneapolis("Reserve Bank"), and based on all the facts of record, theBoard has determined that Norwest and Company haveestablished the managerial and operational infrastructureand other policies and procedures necessary to complywith the requirements of this order and the Section 20Orders for underwriting and dealing in debt securities.

Accordingly, Company may commence underwriting anddealing in all types of debt securities as permitted by, andsubject to the other conditions of, this order and the Sec-tion 20 Orders.

The Board's determination also is subject to all the termsand conditions set forth in Regulation Y, including those insections 225.7 and 225.25(c) of Regulation Y (12 C.F.R.225.7 and 225.25(c)), and to the Board's authority torequire such modification or termination of the activities ofa bank holding company or any of its subsidiaries as theBoard finds necessary to ensure compliance with, and toprevent evasion of, the provisions of the BHC Act and theBoard's regulations and orders issued thereunder. TheBoard's decision is specifically conditioned on compliancewith all the commitments made in connection with thisnotice and the conditions set forth in this order and theabove-noted Board regulations and orders. These commit-ments and conditions are deemed to be conditions imposedin writing by the Board in connection with its findings anddecision and, as such, may be enforced in proceedingsunder applicable law.

The proposal shall not be commenced later than threemonths after the effective date of this order, unless suchperiod is extended for good cause by the Board or by theReserve Bank, acting pursuant to delegated authority.

By order of the Board of Governors, eifective May 26,1998.

Voting for this action: Chairman Greenspan, Vice Chair Rivlin, andGovernors Ferguson and Gramlich. Absent and not voting: GovernorsKelley, Phillips, and Meyer.

JENNIFER J. JOHNSONDeputy Secretary of the Board

Orders Issued Under Sections 3 and 4 of the BankHolding Company Act

Bane One CorporationColumbus, Ohio

Order Approving the Acquisition of a Bank HoldingCompany

Bane One Corporation ("Bane One"), a bank holdingcompany within the meaning of the Bank Holding Com-pany Act ("BHC Act"), has requested the Board's ap-proval under section 3 of the BHC Act (12 U.S.C. § 1842)to acquire First Commerce Corporation, New Orleans,Louisiana ("First Commerce"), and its wholly owned sub-sidiary banks: First National Bank of Commerce, NewOrleans; City National Bank of Baton Rouge, BatonRouge; Rapides Bank & Trust Company in Alexandria,Alexandria; The First National Bank of Lafayette, Lafay-ette; The First National Bank of Lake Charles, LakeCharles; and Central Bank, Monroe, all in Louisiana.1

1. Bane One intends to merge First Commerce with a wholly ownednon-operating subsidiary of Bane One. First Commerce would be the



Bane One also has requested the Board's approval undersection 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8))and section 225.24 of the Board's Regulation Y (12 C.F.R.225.24) to acquire First Commerce Service Corporation,New Orleans, Louisiana, and thereby engage in data pro-cessing activities that are permissible for bank holdingcompanies under section 225.28(b)(14) of Regulation Y(12 C.F.R. 225.28(b)(14)).2

Notice of the proposal, affording interested persons anopportunity to submit comments, has been published inaccordance with the Board's rules (63 Federal Register3896 (1998)). The time for filing comments has expired,and the Board has considered the proposal and all com-ments received in light of the factors set forth in sections3 and 4 of the BHC Act.

Bane One, with total consolidated assets of $116.2 bil-lion, is the eighth largest commercial banking organizationin the United States, controlling approximately 2.3 percentof total banking assets of insured commercial banks ("totalbanking assets") in the United States.3 Bane One operatessubsidiary banks in Arizona, Colorado, Illinois, Indiana,Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah, WestVirginia, and Wisconsin. Bane One also engages in a broadrange of permissible nonbanking activities in the UnitedStates through subsidiaries.

First Commerce, with total consolidated assets of$9.5 billion, is the 62d largest commercial banking organi-zation in the United States, controlling less than 1 percentof the total banking assets in the United States. FirstCommerce operates six banks in Louisiana and engages inpermissible nonbanking activities. On consummation ofthe proposal, and after accounting for the proposed divesti-tures, Bane One would remain the eighth largest commer-cial banking organization in the United States, with totalconsolidated assets of approximately $125.7 billion, repre-senting approximately 2.5 percent of total nationwidebanking assets.

Bane One is the third largest depository institution inLouisiana, controlling $4.2 billion in deposits, representingapproximately 9.8 percent of total deposits in insured de-pository institutions in the state.4 First Commerce is thelargest depository institution in Louisiana, controlling

$7.7 billion of deposits, representing approximately18 percent of total deposits in the state. On consummationof the proposal, and accounting for the proposed divesti-tures, Bane One would become the largest commercialbanking organization in Louisiana, controlling approxi-mately $11.2 billion in deposits, representing approxi-mately 26.3 percent of the total deposits in the state.

Interstate Analysis

Section 3(d) of the BHC Act allows the Board to approvean application by a bank holding company to acquirecontrol of a bank located in a state other than the homestate of such bank holding company if certain conditionsare met.5 For purposes of the BHC Act, the home state ofBane One is Ohio, and Bane One proposes to acquirebanks in Louisiana. All of the conditions for an interstateacquisition enumerated in section 3(d) are met in this case.6

In view of the facts of record, the Board is permitted toapprove this proposal under section 3(d) of the BHC Act.


The BHC Act prohibits the Board from approving anapplication under section 3 of the BHC Act if the proposalwould result in a monopoly, or would substantially lessencompetition in any relevant banking market, unless theBoard finds that the anticompetitive effects of the proposalare clearly outweighed in the public interest by the proba-ble effect of the proposal in meeting the convenience andneeds of the community to be served.7

Bane One and First Commerce compete in the followingbanking markets in Louisiana: Baton Rouge, Iberia, Lafay-ette, Lake Charles, Lincoln, Monroe, Morehouse,Shreveport-Bossier City, and New Orleans.8 The Board hascarefully reviewed the competitive effects of the proposalin each of the Louisiana banking markets in which BaneOne and First Commerce compete in light of all the facts ofrecord, including the characteristics of the markets and theprojected increase in the concentration of total deposits indepository institutions in these markets ("market depos-

surviving corporation and a wholly owned subsidiary of Bane Onethat would be renamed Louisiana Bane One Corporation. In addition,Bane One has requested the Board's approval to hold and exerciseoptions to purchase up to 19.9 percent of the voting shares of FirstCommerce if certain events occur. The options would expire onconsummation of the proposal.

2. Bane One also would acquire 9.9 percent of the voting shares ofFirst United Bank of Farmerville, Farmerville, Louisiana ("First Unit-ed") from First Commerce. Bane One has agreed to abide by certaincommitments made by First Commerce that were relied on by theBoard to ensure that First Commerce would not exercise a controllinginfluence over the management and policies of First United and todivest the shares of First United within six months after consummat-ing (he acquisition of First Commerce.

3. Asset data are as of December 31. 1997, and deposit data are asof June 30. 1997.

4. In this context, depository institutions include commercial banks,savings banks, and savings associations.

5. A bank holding company's home state is that state in which theoperations of the bank holding company's banking subsidiaries wereprincipally conducted on July 1, 1996, or the date on which thecompany became a bank holding company, whichever is later.12 U.S.C. § 1841(o)(4)(C).

6. 12 U.S.C. §§ 1842(d)(l)(A) & (B) and 1842(d)(2)(A) & (B).Bane One is adequately capitalized and adequately managed, asdefined by applicable law. On consummation of the proposal, BaneOne and its affiliates would control less than 10 percent of the totalamount of deposits of insured depository institutions in the UnitedStates, and less than 30 percent of the total amount of deposits inLouisiana. In addition, First Commerce's subsidiary banks have beenin existence and have continuously operated for at least five years, asrequired by Louisiana law. La. Rev. Stat. § 6:538 (1997). All otherrequirements of section 3(d) of the BHC Act also would be met onconsummation of the proposal.

7. 12 U.S.C. § 1842(c)(l)(B).8. These banking markets are described in Appendix A.



its"),9 as measured by the Herfindahl-Hirschman Index("HHI") under the Department of Justice Merger Guide-lines ("DOJ Guidelines").10 The Board also has carefullyexamined the number of competitors that would remain ineach of the banking markets following consummation ofthe proposal. Consummation of the proposal, without di-vestitures, would be consistent with the DOJ Guidelines inthe Iberia, Morehouse, and Shreveport-Bossier City bank-ing markets."

To mitigate the anticompetitive effects of the proposal inthe Lafayette, Lake Charles, Lincoln, and Monroe bankingmarkets, Bane One has committed to divest 25 branchesthat control approximately $614.5 million in deposits.12

With the proposed divestitures, the concentration levels ineach of the markets would be consistent with the DOJGuidelines after consummation of the proposal.13

Consummation of the proposal would exceed the DOJGuidelines, as measured by the HHI, in the Baton Rougeand New Orleans banking markets. As the Board hasindicated in previous cases, in a market in which thecompetitive effects of a proposal as measured by marketindexes and market share exceed the DOJ Guidelines, theBoard will consider whether other factors tend to mitigatethe competitive effects of the proposal. The number andstrength of factors necessary to mitigate the competitiveeffects of a proposal depend on the level of market concen-tration and size of the increase in market concentration.14

9. Market share data are based on calculations that include thedeposits of thrift institutions at 50 percent. The Board previously hasindicated that thrift institutions have become, or have the potential tobecome, significant competitors of commercial banks. See, e.g., Mid-west Financial Group, 75 Federal Reserve Bulletin 386 (1989);National City Corporation, 70 Federal Reserve Bulletin 743 (1984).Thus, the Board has regularly included thrift deposits in the calcula-tion of market share on a 50 percent weighted basis. See, e.g.. FirstHawaiian Inc., 11 Federal Reserve Bulletin 52 (1991).

10. Under the DOJ Merger Guidelines, 49 Federal Register 26,823(1984), a market in which the post-merger HHI is more than 1800 isconsidered highly concentrated. The DOJ has informed the Board thata bank merger or acquisition generally will not be challenged (in theabsence of other factors indicating anticompetitive effects) unless thepost-merger HHI is at least 1800 and the merger increases the HHI bymore than 200 points. The DOJ has stated that the higher than normalHHI thresholds for screening bank mergers for anticompetitive effectsimplicitly recognize the competitive effect of limited-purpose lendersand other non-depository financial institutions.

11. Market data for these banking markets after consummation ofthe proposal are described in Appendix B.

12. Bane One has committed to execute sales agreements with anout-of-market competitor in the Lincoln banking market and a compet-itively suitable purchaser in the Lafayette, Lake Charles and Monroebanking markets and to complete divestitures within 180 days ofconsummation of the acquisition. Bane One also has committed that,in the event it is unsuccessful in completing any divestiture within180 days of consummation, it will transfer the unsold branch(es) to anindependent trustee that is acceptable to the Board and that will beinstructed to sell the branches promptly. See, e.g., First Union Corpo-ration, 84 Federal Reserve Bulletin 489 (1998).

13. Market data for these banking markets after consummation ofthe proposal are also described in Appendix B.

14. See First Union Corporation, 84 Federal Reserve Bulletin489 (1998); NationsBank Corporation, 84 Federal Reserve Bulletin129 (1998).

Baton Rouge Banking Market. Bane One is the thirdlargest of 25 depository institutions in the Baton Rougebanking market, and controls deposits of $895.9 million,representing 15.4 percent of market deposits. First Com-merce is the second largest depository institution in themarket, and controls deposits of $971.7 million, represent-ing 16.7 percent of market deposits. After consummationof the proposal, Bane One would become the largest depos-itory institution in the market, controlling 32.1 percent ofthe market deposits, and the HHI would increase515 points to 1895.

Twenty-four depository institutions, including severallarge multi-state banking organizations other than BaneOne, would remain in the Baton Rouge banking marketafter consummation of the proposal. In addition, one ofLouisiana's largest banking organization would be thesecond largest depository institution in the market andwould control more than 25 percent of market deposits.

The Baton Rouge banking market also has characteris-tics that make it attractive for entry. Baton Rouge is Louisi-ana's second largest city. The rate of growth in populationand market deposits and the level of per capita income inthis market exceed, on average, those of other LouisianaMetropolitan Statistical Areas ("MSAs"). Recent entriesby depository institutions also indicate that the market isattractive. Since 1994, four commercial banks have enteredthe market de novo, and four have entered by acquisition.In addition, another commercial bank has received regula-tory approval and plans to enter the market de novo in June1998.

New Orleans Banking Market. Bane One is the fifthlargest of 41 depository institutions in the New Orleansbanking market and controls deposits of $627.3 million,representing 4.4 percent of market deposits. First Com-merce is the largest depository institution in the market andcontrols deposits of $4.4 billion, representing 30.8 percentof market deposits. After consummation of the proposal,Bane One would become the largest depository institutionin the market, controlling 35.2 percent of market deposits,and the HHI would increase 272 points to 2099.

The New Orleans banking market is the largest bankingmarket in Louisiana. Approximately 39 competitors otherthan Bane One would remain in the market after consum-mation of the proposal, including all of the state's largestdepository institutions. Three of these competitors wouldeach have market shares of over 15 percent of marketdeposits, and the second largest depository institution inthe market would have over 23 percent of market deposits.In addition, per capita income, deposits per branch, popula-tion per branch, and deposit growth in the market are abovethe averages in other Louisiana MSAs. Since 1994, threedepository institutions have entered the market de novo,and six have entered by acquisition, which indicates thatthe market is attractive for entry.

Views of Other Agencies and Conclusion. The Depart-ment of Justice conducted a detailed review of the proposaland advised the Board that, in light of the proposed divesti-tures, consummation of the proposal would not likely havea significantly adverse effect on competition in any rele-



vant market. The Office of the Comptroller of the Currencyand the Federal Deposit Insurance Corporation also havenot objected to consummation of the proposal.

Based on all the facts of record, and for the reasonsdiscussed above, the Board has determined that consumma-tion of the proposal would not be likely to result in asignificantly adverse effect on competition or on the con-centration of banking resources in any relevant bankingmarket. Accordingly, subject to completion of the proposeddivestitures, the Board has determined that competitivefactors are consistent with approval of the proposal.

Other Factors Under the BHC Act

The BHC Act also requires the Board, in acting on anapplication, to consider the financial and managerial re-sources and future prospects of the companies and banksinvolved in a proposal, the convenience and needs of thecommunity to be served, and certain other supervisoryfactors.

A. Financial, Managerial, and Other Supervisory Factors

The Board has carefully considered the financial and man-agerial resources and future prospects of Bane One, FirstCommerce, and their respective subsidiary banks, and othersupervisory factors in light of all the facts of record. Aspart of this consideration, the Board has reviewed relevantreports of examination and other supervisory informationprepared by the Reserve Banks and other federal agencies.The Board notes that the bank holding companies and theirsubsidiary banks are currently well capitalized and areexpected to remain so after consummation of the proposal.

The Board also has considered other aspects of thefinancial condition and resources of the two organizations,the structure of the proposed transaction, and the manage-rial resources of each of the entities and the combinedorganization. Based on these and other facts of record, theBoard concludes that considerations relating to the finan-cial and managerial resources and future prospects of BaneOne, First Commerce, and their respective subsidiaries areconsistent with approval of the proposal, as are the othersupervisory factors that the Board must consider undersection 3 of the BHC Act.

federal supervisor of the CRA performance records of therelevant institutions.15

All of Bane One's subsidiary banks have received "out-standing" or "satisfactory" ratings for their appropriatefederal supervisors at the most recent examinations of theirCRA performance. Bane One's lead bank, Bank One,N.A., Columbus, Ohio, received an "outstanding" perfor-mance rating and Bane One's largest bank in terms ofassets, Bank One, Texas, N.A., Dallas, Texas, received a"satisfactory" performance ratings from their appropriatefederal supervisor, the Office of the Comptroller of Cur-rency ("OCC"). In addition, Bane One, Louisiana, N.A.,New Orleans, Louisiana, received a "satisfactory" perfor-mance rating from the OCC. All of First Commerce'ssubsidiary banks also have received "outstanding" or "sat-isfactory" ratings for CRA performance from their appro-priate federal supervisors.

The Board also has carefully reviewed Bane One's lend-ing activities and its compliance with fair lending laws. Aspart of that review, the Board has considered informationdeveloped in the course of its supervision of Bane Oneregarding the institution's fair lending oversight, proce-dures, and practices and, in light of all the facts of record,the Board has concluded that Bane One's record of fairlending is consistent with approval of this proposal.

The Board has considered all the facts of record, includ-ing the CRA performance records of the subsidiary banksof Bane One and First Commerce, relevant reports ofexamination, and the comments received.16 Based on allthe facts of record, and for the reasons discussed above, theBoard concludes that convenience and needs consider-ations are consistent with approval of the proposal.

Nonbanking Activities

Bane One also has filed a notice, under section 4(c)(8) ofthe BHC Act, to acquire First Commerce Service Corpora-tion and thereby to engage in data processing activities.The Board has determined by regulation that the provisionof certain data processing services is closely related tobanking for purposes of section 4(c)(8) of the BHC Act.17

Bane One has stated that, following consummation of theproposal, it will conduct its data processing activities inaccordance with the limitations set forth in Regulation Yand the Board's orders and interpretations.

B. Convenience and Needs Considerations

The Board has carefully considered the effect of the pro-posed acquisition on the convenience and needs of thecommunity to be served in light of all the facts of record.The Board has long held that consideration of the conve-nience and needs factor includes a review of the records ofthe relevant depository institutions under the CommunityReinvestment Act ("CRA") (12 U.S.C. § 2901 et seq.). Asprovided in the CRA, the Board evaluates the convenienceand needs factor in light of examinations by the primary

15. The Board notes that the Statement of the Federal FinancialSupervisory Agencies Regarding the Community Reinvestment Act("Agency CRA Statement") provides that a CRA examination is animportant and often controlling factor in the consideration of aninstitution's CRA record and that reports of these examinations willbe given great weight in the applications process. See 54 FederalRegister 13,742 and 13,745 (1989).

16. A commenter contends that he has had unsatisfactory experi-ences with a Bane One subsidiary bank in business and personalbanking transactions. The Board has carefully reviewed the commentin light of all the facts of record, and has provided the comment to theOCC, which is the appropriate federal supervisor of the bank.

17. See 12 C.F.R. 225.28(b)(14).



In order to approve the proposal under section 4(c)(8) ofthe BHC Act, the Board also must determine that theproposed activities are a proper incident to banking, that is,that the proposal "can reasonably be expected to producebenefits to the public, such as greater convenience, in-creased competition, or gains in efficiency that outweighpossible adverse effects, such as undue concentration ofresources, decreased or unfair competition, conflicts ofinterests, or unsound banking practices."18 As part of itsevaluation of these factors, the Board considers the finan-cial condition and managerial resources of the notificantand its subsidiaries, including the companies to be ac-quired, and the effect of the proposed transaction on thoseresources.19 For the reasons noted above, and based on allthe facts of record, the Board has concluded that financialand managerial considerations are consistent with approvalof the notice.

The Board also has considered the competitive effects ofthe proposed acquisition by Bane One of First CommerceService Corporation. The market for data processing ser-vices is unconcentrated and that there are numerous provid-ers of the services. As a result, consummation of theproposal would have a de minimis effect on competition.The Board also expects that the acquisition would provideadded convenience to First Commerce's customers and toother members of the public by increasing operating effi-ciencies and providing expanded services to customers ofFirst Commerce and Bane One. Additionally, there arepublic benefits to be derived from permitting capital mar-kets to operate so that bank holding companies may makepotentially profitable investments in nonbanking compa-nies where these investments are consistent, as in this case,with the relevant considerations of the BHC Act and frompermitting banking organizations to allocate their resourcesin a manner they believe most efficient.

Accordingly, based on all the facts of record, the Boardhas determined that the balance of public benefits that theBoard must consider under the proper incident to bankingstandard of section 4(c)(8) of the BHC Act is favorable andconsistent with approval of the proposal.

Conclusion

Based on the foregoing, and in light of all the facts ofrecord, including the comments received, the Board hasdetermined that the application and notice should be, andhereby are, approved.20 Approval of the application and

18. 12 U.S.C. § 1843(c)(8).19. See 12 C.F.R. 225.26.20. One commenter requests that the Board not act on the Bane

One/First Commerce proposal until his employment discriminationlawsuit against Bane One and one of its subsidiary banks is settled anduntil the Board investigates pending employment discrimination com-plaints filed against Bane One with the Equal Employment Opportu-nity Commission. Commenter's lawsuit was dismissed by a federaldistrict court and the dismissal was upheld on appeal. The Boardpreviously has noted, moreover, that disputes that arise under a statuteadministered and enforced by another agency in areas such as employ-ment discrimination are beyond the Board's jurisdiction under the

notice is specifically conditioned on compliance by BaneOne with all the commitments made in connection with theproposal and with the conditions stated or referred to inthis order, including Bane One's divestiture commitment.The Board's determination on the nonbanking activitiesalso is subject to all the terms and conditions set forth inRegulation Y, including those in sections 225.7 and225.25(c) (12 C.F.R. 225.7 and 225.25(c)), and to theBoard's authority to require such modification or termina-tion of the activities of a bank holding company or any ofits subsidiaries as the Board finds necessary to ensurecompliance with, and to prevent evasion of, the provisionsof the BHC Act and the Board's regulations and ordersthereunder. For purposes of this transaction, the commit-ments and conditions referred to above shall be deemed tobe conditions imposed in writing by the Board in connec-tion with its findings and decision, and, as such, may beenforced in proceedings under applicable law.

The acquisition of First Commerce's subsidiary banksshall not be consummated before the fifteenth calendar dayfollowing the effective date of this order, and the proposalshall not be consummated later than three months after theeffective date of this order, unless such period is extendedfor good cause by the Board or by the Federal ReserveBank of Cleveland, acting pursuant to delegated authority.


Voting for this action: Chairman Greenspan, Vice Chair Rivlin, andGovernors Ferguson and Gramlich. Absent and not voting: GovernorsKelley, Phillips, and Meyer.


Appendix A

Banking Markets in which Bane One and FirstCommerce Compete

Baton Rouge: Ascension, East Baton Rouge, Iberville,Livingston, and West Baton Rouge Parishes plus the north-ern half of Assumption Parish, and the town of Union inSt. James Parish.Iberia: Iberia Parish.Lake Charles: Calcasieu and Cameron Parishes, plus thesouthern half of Beauregard Parish.Lafayette: Lafayette, Acadia, St. Landry, St. Martin, andVermillion Parishes, excluding the town of Mermentau inAcadia Parish and the town of Gueydan in VermillionParish.Lincoln: Lincoln Parish.Monroe: Monroe and Ouachita Parishes

statutory factors in the BHC Act. Based on a review of all the facts ofrecord, the Board concludes that the record in this case is sufficient towarrant Board consideration and action on the proposal at this time,and that further delay of consideration of the proposal or denial of theproposal on the basis of informational insufficiency is not warranted.



Morehouse: Morehouse Parish.New Orleans: Jefferson, Orleans, Plaquemines, St. Ber-nard, St. Charles, St. John the Baptist, St. Tammany, andSt. James Parishes, less the town of Union in St. JamesParish.Shreveport-Bossier City: Bossier, Cado, DeSoto andWebster Parishes.

Appendix B

A. Banking Markets In Which Consummation of theProposal Would Not Exceed the DOJ Guidelines WithoutDivestitures.

Iberia: After consummation of the proposal, Bane Onewould control 18.4 percent of the market deposits andwould become the third largest of nine depository institu-tions in the market. The HHI would increase 166 points to2515.Morehouse: After consummation of the proposal, BaneOne would control 23.0 percent of the market deposits andwould become the second largest of six depository institu-tions in the market. The HHI would increase 129 points to2349.Shreveport-Bossier City: After consummation of the pro-posal, Bane One would control 25.4 percent of the marketdeposits and would become the largest of 18 depositoryinstitutions in the market. The HHI would increase17 points to 1813.

B. Banking Markets In Which Consummation of theProposal Would Not Exceed the DOJ Guidelines WithProposed Divestitures.

Lafayette: Bane One proposes to divest seven branches,controlling deposits of $195.0 million, to a competitorsuitable to the Board. Following such divestiture, and afterconsummation of the proposal, Bane One would control24.5 percent of the market deposits and would become thelargest of 40 depository institutions in the market. The HHIwould increase not more than 276 to 896.Lake Charles: Bane One proposes to divest eight branches,controlling deposits of $154.8 million, to a competitorsuitable to the Board. Following such divestiture, and afterconsummation of the proposal, Bane One would control33.4 percent of market deposits and become the largest ofeight competitors. The HHI would increase not more than127 points to 2414.Lincoln: Bane One proposes to divest two branches, con-trolling deposits of $73.6 million, to a competitor suitableto the Board. Following such divestiture, and after consum-mation of the proposal, Bane One would control34.4 percent of market deposits and become the largest ofseven competitors. The HHI would increase 64 points to2116.Monroe: Bane One proposes to divest eight branches,controlling deposits of $191.1 million, to a competitorsuitable to the Board. Following such divestiture, and afterconsummation of the proposal, Bane One would control

39.3 percent of market deposits and become the largest ofeleven competitors. The HHI would increase not more than181 points to 2227.

Regions Financial CorporationBirmingham, Alabama

Order Approving Merger of Bank Holding Companies

Regions Financial Corporation ("Regions"), a bank hold-ing company within the meaning of the Bank HoldingCompany Act ("BHC Act"), has requested the Board'sapproval under sections 3 and 4 of the BHC Act(12 U.S.C. §§ 1842(a)(5) and 1843(c)(8)) to merge withFirst Commercial Corporation, Little Rock, Arkansas("First Commercial"), and thereby acquire First Commer-cial's subsidiary banks and nonbanking subsidiaries listedin the Appendix.1

Notice of the proposal, affording interested persons anopportunity to submit comments, has been published(63 Federal Register 14,464 (1998)). The time for filingcomments has expired, and the Board has considered theapplication and all comments received in light of thefactors set forth in sections 3 and 4 of the BHC Act.

Regions, with total consolidated assets of approximately$24.4 billion, operates banks in Alabama, Florida, Georgia,South Carolina, Louisiana, and Tennessee, and engages ina number of permissible nonbanking activities.2 Regions isthe largest commercial banking organization in Alabama,controlling deposits of approximately $9 billion, represent-ing 19.4 percent of total deposits in commercial bankingorganizations in the state ("state deposits"). First Commer-cial, with total consolidated assets of approximately$7.4 billion, operates banks in Arkansas, Texas, Tennessee,Louisiana, and Oklahoma and engages in mortgage andtrust company activities through its nonbanking subsidiar-ies. First Commercial is the largest commercial bankingorganization in Arkansas, controlling deposits of approxi-mately $4.7 billion, representing 17.3 percent of Arkansasstate deposits.

Regions is the fifth largest commercial banking organiza-tion in Louisiana, controlling deposits of approximately$2.2 billion, representing 5.8 percent of Louisiana statedeposits. First Commercial is the 85th largest commercialbanking organization in the state, controlling deposits ofapproximately $49 million, representing less than 1 percentof state deposits. On consummation of the proposal, Re-gions would remain the fifth largest commercial bankingorganization in Louisiana, controlling deposits of approxi-mately $2.3 billion, representing 6 percent of Louisianastate deposits.

1. Regions also has requested the Board's approval to hold andexercise an option to purchase up to 19.9 percent of the voting sharesof First Commercial if certain events occur. The option would expireon consummation of the proposal.

2. All banking data are as of June 30, 1997, and include acquisitionsby Regions and First Commercial that have been approved by theappropriate federal supervisors after that date.



Regions is the 12th largest commercial banking organi-zation in Tennessee, controlling deposits of approximately$471 million, representing less than 1 percent of Tennesseestate deposits. First Commercial is the 17th largest com-mercial banking organization in the state, controlling de-posits of approximately $351 million, also representingless than 1 percent of state deposits. On consummation ofthe proposal, Regions would become the ninth largestcommercial banking organization in Tennessee, controllingdeposits of approximately $822 million, representing1.4 percent of Tennessee state deposits.

Interstate Analysis

Section 3(d) of the BHC Act allows the Board to approvean application by a bank holding company to acquirecontrol of a bank located in a state other than the homestate of such bank holding company, if certain conditionsare met. For purposes of the BHC Act, the home state ofRegions is Alabama, and First Commercial controls banksin Arkansas, Texas, Tennessee, Louisiana, and Oklahoma.3

All the conditions for an interstate acquisition enumeratedin section 3(d) are met in this case.4 In view of all the factsof record, the Board is permitted to approve the proposalunder section 3(d) of the BHC Act.


The BHC Act prohibits the Board from approving anapplication under section 3 of the BHC Act if the proposalwould result in a monopoly or if the proposal wouldsubstantially lessen competition in any relevant bankingmarket and the Board has not found that the anticompeti-tive effects of the proposal are clearly outweighed in thepublic interest by the probable effect of the proposal inmeeting the convenience and needs of the community to beserved.5

Regions and First Commercial compete directly in theShreveport-Bossier City, Louisiana, banking market("Shreveport banking market").6 After consummation ofthe proposal, Regions would remain the fifth largest depos-itory institution in the market, controlling deposits of ap-proximately $236 million, representing 6.9 percent of totaldeposits in depository institutions in the market.7 TheHerfindahl-Hirschman Index ("HHI") for the bankingmarket would increase by 15 points to 1885.8 Based on allthe facts of record, including the small increase in marketconcentration as measured by the HHI, the presence of15 other competitors that would remain in the bankingmarket, and entry into the market by four regional bankholding companies since 1994, the Board concludes thatconsummation of the proposal would not have a signifi-cantly adverse effect on competition or on the concentra-tion of banking resources in the Shreveport banking marketor any other relevant banking market.

Financial, Managerial, and Other Supervisory Factors

The Board has carefully considered the financial and man-agerial resources and future prospects of Regions, FirstCommercial, and their respective subsidiary banks in lightof all the facts of record, including supervisory reports ofexamination assessing the financial and managerial re-sources of the organizations and financial information pro-vided by Regions. Based on all the facts of record, includ-ing relevant reports of examination of the companies andbanks involved in the proposal, the Board concludes thatthe financial and managerial resources and future prospectsof Regions, First Commercial, and their subsidiary banksare consistent with approval, as are the other supervisoryfactors the Board must consider under section 3 of theBHC Act.

3. A bank holding company's home state is that state in which theoperation of the bank holding company's banking subsidiaries wereprincipally conducted on July 1, 1996, or the date on which thecompany became a bank holding company, whichever is later.12U.S.C. § 1841(o)(4)(C).

4. See 12 U.S.C. §§ 1842(d)( 1 )(A) and (B) and 1842(d)(2)(A) and(B). Regions is adequately capitalized and adequately managed, asdefined by applicable law. First Commercial's subsidiary banks havebeen in existence and continuously operated for the minimum periodof five years required under the respective state laws. See Ark. CodeAnn. § 23-48-405 (Michie 1997); Tex. Finance Code Ann.§ 38.003(a) (West 1997); La. Rev. Stat. Ann. §§ 6:535(C) and 6:538(West 1997); Tenn. Code Ann. § 45-2-1403(a)(l) (Michie 1997);Okla. Stat. Ann. tit. 6, § 502(F) (West 1998). On consummation ofthe proposal, Regions would control less than 10 percent of the totalamount of deposits of insured depository institutions in the UnitedStates. Regions also would not exceed applicable state law depositlimitations, as calculated under state law, in each state in which FirstCommercial operates. See Ark. Code Ann. § 23^18-406 (25 percent);Tex. Finance Code Ann. § 38.002(a) (20 percent); Tenn. Code Ann.§ 45-2-1404 (30 percent): Okla. Stat. Ann. tit. 6, § 502(C)(15 percent). All other requirements of section 3(d) of the BHC Actwould be met on consummation of the proposal.

5. 12 U.S.C. § !842(c)(l)(B).

6. The Shreveport-Bossier City banking market comprises Bossier,Caddo, DeSoto, and Webster Parishes in Louisiana.

7. Market share data are as of June 30, 1997. In this context,depository institutions include commercial banks, savings banks, andsavings associations. Market share data are based on calculations inwhich the deposits of thrift institutions are included at 50 percent. TheBoard previously has indicated that thrift institutions have become, orhave the potential to become, significant competitors of commercialbanks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990);National City Corporation, 70 Federal Reserve Bulletin 743 (1984).Thus, the Board has regularly included thrift deposits in the calcula-tion of market share on a 50-percent weighted basis. See First Hawai-ian, Inc., 11 Federal Reserve Bulletin 52 (1991).

8. Under the revised Department of Justice Merger Guidelines,49 Federal Register 26,823 (1984), a market in which the post-mergerHHI is more than 1800 is considered to be highly concentrated. TheDepartment of Justice has informed the Board that a bank merger oracquisition generally will not be challenged (in the absence of otherfactors indicating anticompetitive effects) unless the post-merger HHIis at least 1800 and the merger increases the HHI by more than200 points. The Department of Justice has stated that the higher thannormal threshold for an increase in HHI when screening bank mergersand acquisitions for anticompetitive effects implicitly recognizes thecompetitive effects of limited-purpose and other nondepository finan-cial entities.



Convenience and Needs Factor

The Board also has carefully considered the effect of theproposal on the convenience and needs of the communitiesto be served in light of all the facts of record. The Boardnotes that all of Regions's subsidiary banks, which operatein six states, received ratings of "satisfactory" or betterfrom the appropriate federal regulator at their most recentexaminations for performance under the Community Rein-vestment Act (12U.S.C. §2901 et seq.) ("CRA"). Re-gions's subsidiary banks provide a full range of financialservices, including many products designed to meet thecredit needs of low- to moderate-income ("LMI") commu-nities. Regions has stated that the proposal would enable itto enhance and expand the delivery of banking services toall of its and First Commercial's customers, including LMIhouseholds. Regions also has indicated that it will establisha charitable foundation, initially funded in the amount of$7.5 million, that will be dedicated to improving communi-ties currently served by First Commercial, and a smallbusiness investment corporation, initially funded in theamount of $5 million, that will invest primarily in compa-nies located in the communities currently served by FirstCommercial.

The Board has carefully considered comments from anAfrican-American small business owner who maintainsthat Regions Bank has an inadequate record of lending tobusinesses owned by African Americans in Sumter County,Alabama, and of advertising in African-American ownednewspapers and other media in Alabama. In addition, twocommunity associations contend, based primarily on HomeMortgage Disclosure Act ("HMDA") data, that Regions'slead subsidiary bank, Regions Bank, Montgomery, Ala-bama ("Regions Bank"), has an inadequate record ofhelping to meet the needs of LMI and minority customersin Alabama.

CRA Performance Examinations. The Board has longheld that consideration of the convenience and needs factorincludes a review of the records of the relevant depositoryinstitutions under the CRA. As provided in the CRA, theBoard evaluates the convenience and needs factor in lightof examinations of the CRA performance records of therelevant institutions by their appropriate federal supervi-sors. An institution's most recent CRA performance exam-ination is a particularly important consideration in theapplications process because it represents a detailed, on-site evaluation of the institution's overall record of perfor-mance under the CRA by its appropriate federal supervi-sor.9 The Board has reviewed the records of performanceof the subsidiary banks of Regions and First Commercialin light of their most recent CRA performance examina-tions and all other facts of record.

The reports of these examinations indicate that Re-gions's subsidiary banks are helping to meet the conve-nience and needs of the communities they serve. RegionsBank, which accounts for approximately 65 percent ofRegions' consolidated assets, received an "outstanding"rating from the appropriate federal regulator, the FederalDeposit Insurance Corporation ("FDIC"), at its most re-cent examination for CRA performance, as of September1996 ("the 1996 Examination").10 Examiners of RegionsBank found no evidence of prohibited discrimination orother illegal credit practices and found no violations of fairlending laws. Examiners also found that Regions Bank'sdelineation of its local community was reasonable and thatit did not arbitrarily exclude LMI areas.

The 1996 Examination stated that the activities of thebank were effective in ascertaining the credit needs of itsentire community, including LMI neighborhoods, and ininforming all members of the community of availablecredit services. In its marketing efforts, the bank used avariety of media, such as newspapers, radio, and television,including 12 newspapers and 7 radio stations that predomi-nately served minority communities in Alabama. Examin-ers found that Regions Bank's branch network was accessi-ble to all segments of the communities it served and thatRegions Bank offered a broad array of products and ser-vices through its branches.

Lending Record of Regions Bank. The 1996 Examina-tion concluded that Regions Bank's lending record, includ-ing its small business lending, addressed a significant por-tion of the credit needs of the communities it served, andthat the bank's geographical penetration of all segments ofits assessment area was exceptional. Examiners particu-larly noted that Regions Bank has several specialized loanproducts and experienced loan officers to help to meet thecredit needs of small businesses in the state. According tothe 1996 Examination, as of June 30, 1996, the bank had19,247 small business loans outstanding throughout Ala-bama, totalling $995 million. More than 80 percent ofthese loans, totalling $304 million, were in amounts of lessthan $100,000.

Preliminary 1997 data indicate that Regions Bank con-tinues to be an active small business lender in Alabama.During 1997, Regions Bank originated 13,841 small busi-ness loans in Alabama, totalling $880 million. Twenty-onepercent of these loans were made to borrowers located inLMI census tracts, and 75 percent of the loans to borrowerslocated in LMI census tracts were made to businesses withannual gross revenues under $1 million. The percentage ofsmall business loans that Regions Bank made in LMIcensus tracts and to businesses with gross revenues under$1 million closely matched the percentages of such lendingby all insured depository institutions in Alabama in theaggregate.

9. The Statement of the Federal Financial Supervisory AgenciesRegarding the Community Reinvestment Act provides that a CRAexamination is an important and often controlling factor in the consid-eration of an institution's CRA record and that reports of theseexaminations will be given great weight in the applications process.See 54 Federal Register 13,742 and 13,745 (1989).

10. Each of First Commercial's subsidiary banks also received arating of "satisfactory" or better from the appropriate federal regula-tor at its most recent examination for CRA performance.



The bank also helps to address small business creditneeds in Alabama through government sponsored lendingprograms. In 1996, Regions Bank's small business loansincluded $13.6 million of loans made under programssponsored by the Small Business Administration and143 loans, totalling $15 million, made at below marketinterest rates under the State of Alabama's Wallace LinkedDeposit Plan for economic development."

The Board also has considered Regions Bank's record ofsmall business lending in Sumter County, Alabama, inlight of all the facts of record, including data relevant toanalyzing the lending opportunities for small business lend-ers in the county. Sumter County is rural, with a populationof 16,390 and no major commercial center.12 The popula-tion has declined since 1980, and per capita income, percapita retail sales, and per capita insured deposits aresignificantly below the averages for Alabama.13 The mostrecent data from the U.S. Bureau of the Census indicatethat 255 nonfarm businesses were in Sumter County, whichaccounted for less than one-half of one percent of Ala-bama's small businesses as of 1993.

In 1996, Regions Bank made 47 small business loans inSumter County, totalling $2.7 million, which is more than70 percent of the total number, and more than 50 percent ofthe total amount, of small business loans made by allinsured depository institutions in the county.14 RegionsBank made nine of its small business loans, totalling$159,000, in LMI census tracts in Sumter County, which ismore than 60 percent of the total number, and more than70 percent of the total amount, of small business loansmade by all insured depository institutions in LMI censustracts in the county.15

Regions also actively participates in meeting other typesof credit needs in its communities. The 1996 Examinationfound that Regions Bank and its mortgage lending subsid-iary, Regions Mortgage Incorporated, Birmingham, Ala-bama ("Regions Mortgage"), assisted LMI borrowers toobtain affordable housing through a variety of programsthat featured reduced down payment and closing cost re-quirements and flexible underwriting standards. In additionto its proprietary programs, Regions Bank offered afford-able housing loans through programs sponsored by theState of Alabama, the Federal National Mortgage Associa-

11. An additional 3,430 agricultural loans, totalling $81 million,were outstanding as of June 30, 1996. Over 92 percent of these loans,totalling $41.2 million, were in amounts of less than $100,000.

12. Population data are as of 1995. All statistical data for SumterCounty and for Alabama are from the U.S. Bureau of the Census.

13. Per capita income in 1993 in Sumter County was $12,120,compared to $17,129 in all of Alabama. Per capita retail sales in 1992were $3,582 in Sumter County, compared to $6,983 in all of Alabama.Per capita deposits, based on FDIC data as of June 30. 1994. were$5,325 in Sumter County, compared to $8,861 in all of Alabama.

14. Twenty-nine of Regions Bank's small business loans in SumterCounty, totalling $669,000, were made to businesses with grossannual revenues of less than $1 million.

15. Seven of these loans, totalling $79,000, were made to businesseswith gross incomes of less than $1 million. Sumter County has a totalof six census tracts, of which two are designated as LMI census tracts.

tion, and other government-sponsored loans programs.16

Examiners also noted that, during 1995 and the first sevenmonths of 1996, Regions Mortgage originated more than4,100 loans, totalling $290 million, under loan programssponsored by the Veterans Administration, Federal Hous-ing Authority, and Farm Housing Administration. Regionshas stated that 23 percent of all home mortgage loans madeby Regions Bank and Regions Mortgage in Alabama dur-ing 1996 and 1997 were made to LMI applicants.

Regions also supported efforts to provide affordablehousing through its community development activities. Asof June 30, 1996, Regions Bank had outstanding loans andloan commitments of approximately $45.6 million andinvestment commitments of approximately $38.7 millionto support the development of 2,569 affordable housingunits throughout Alabama. Regions has stated that, sincethe 1996 Examination, the bank has made loans to orinvested in an additional 15 projects in the aggregateamount of approximately $29 million to provide more than900 units of affordable housing.17

HMDA Data. The Board also has considered Regions'slending record in light of comments regarding the HMDAdata of Regions Bank in Alabama. The 1996 data generallyindicate that Regions Bank and Regions Mortgage denied asignificantly smaller percentage of housing-related loanapplications from African Americans than did lenders inthe state in the aggregate. The 1996 data also indicate thatRegions Bank and Regions Mortgage originated loans for asignificantly larger percentage of applications receivedfrom African Americans, LMI individuals, and residents ofLMI census tracts than did lenders in the aggregate.

The data reflect, however, certain disparities in the ratesof loan denials by racial group. The Board is concernedwhen the record of an institution indicates disparities inlending, and believes that all banks are obligated to ensurethat their lending practices are based on criteria that ensurenot only safe and sound lending but also equal access tocredit by creditworthy applicants regardless of their race orincome level. The Board recognizes that HMDA data aloneprovide an incomplete measure of an institution's lendingin its community because these data cover only a fewcategories of housing-related lending. HMDA data, more-

16. Examiners noted that Regions Mortgage also developed theWallace Mortgage Program with the State Treasurer of Alabama tofund up to $2,000 of the down payment for first time LMI homebuyers through a second mortgage loan to be forgiven after 10 yearsof continuous ownership of the home. Regions Mortgage received40 percent of all funds allotted to the program prior to its terminationby the state in 1995. In addition, according to Regions, RegionsMortgage is the largest originator of state-funded loans to LMI bor-rowers under the Alabama Housing Finance Authority bond program.

17. These projects include construction and permanent financing inthe amount of approximately $3.9 million to construct 136 low-income housing units in Millbrook, Alabama; approximately $3 mil-lion to construct Virginia Meadows II, a 112 unit low-income housingproject in Montgomery, Alabama; and approximately $1.2 million tohelp to purchase and rehabilitate 147 low-income homes in theMeadow Hills neighborhood of Huntsville, Alabama. In SumterCounty, Alabama, Regions Bank invested $849,000 in a limitedpartnership to rehabilitate low-income housing.



over, provide only limited information about the coveredloans.18 HMD A data, therefore, have limitations that makethem an inadequate basis, absent other information, forconcluding that an institution has not adequately assisted inmeeting its community's credit needs or has engaged inillegal lending discrimination. Because of the limitations ofHMDA data, the Board has considered these data carefullyin light of other information.

FDIC examiners conducted a fair lending review ofRegions Bank as part of the 1996 Examination, with aparticular focus on conducting comparative file analyses ofdenied applications from minorities and approved applica-tions from non-minorities for conventional home mortgagepurchase loans during 1996. This fair lending review didnot disclose any evidence of disparate treatment of ordiscriminatory practices against minority applicants.19

Regions Bank and Regions Mortgage also have a secondreview program for all housing-related loan applicationsthat are preliminarily declined by the original loan officer.Under the program, a second and more senior loan officermust concur in the denial of a housing-related loan applica-tion. The files for denied loans also are reviewed forsufficient documentation, and are subject to random inter-nal audit. In addition, the bank provides comprehensiveand ongoing training to its lending staff concerning compli-ance with fair lending, disclosure, and record keepingrequirements. The Board also has considered the HMDAdata in light of Regions's lending record, which shows thatRegions Bank and Regions Mortgage assist significantly inhelping to meet the credit needs of its community, includ-ing LMI areas.

Conclusion on Convenience and Needs Considerations.The Board has carefully considered all the facts of record,including the public comments received, responses to thecomments, and the CRA performance records of the sub-sidiary banks of Regions and First Commercial, includingrelevant reports of examination. Based on a review of theentire record, including the efforts of Regions Bank to meetthe credit needs of the communities it serves throughoutAlabama, and for the reasons discussed in this order, theBoard has concluded that convenience and needs consider-ations, including the CRA performance records of thesubsidiary banks of Regions and First Commercial, areconsistent with approval.

18. The data, for example, do not account for the possibility that aninstitution's outreach efforts may attract a larger proportion of margin-ally qualified applicants than other institutions attract and do notprovide a basis for an independent assessment of whether an applicantwho was denied credit was, in fact, creditworthy. Credit historyproblems and excessive debt levels relative to income (reasons mostfrequently cited for a credit denial) are not available from HMDAdata.

19. Examiners also compared loan files of approved applicationsfrom minorities and non-minorities to ensure that there was no dispar-ate treatment in the credit terms offered. The comparison showed noevidence of discrimination or disparate treatment.

Nonbanking Activities

Regions also has filed notice under section 4(c)(8) of theBHC Act to acquire the nonbanking subsidiaries of FirstCommercial and thereby engage in mortgage lending andtrust company functions. The Board previously has deter-mined by regulation that these activities are closely relatedto banking for purposes of section 4(c)(8) of the BHCAct.20 Regions proposes to conduct these activities in ac-cordance with Regulation Y and all relevant Board inter-pretations and orders.

In order to approve the proposal, the Board also mustdetermine that the performance of the proposed activities isa proper incident to banking, that is, that the proposedtransaction "can reasonably be expected to produce bene-fits to the public . . . that outweigh adverse effects, such asundue concentration of resources, decreased or unfair com-petition, conflicts of interests, or unsound banking prac-tices."21 As part of its evaluation of these factors, theBoard considers the financial and managerial resources ofthe notificant, its subsidiaries, and any company to beacquired and the effect the transaction would have on suchresources.22 For the reasons discussed above, and based onall the facts of record, the Board has concluded that finan-cial and managerial considerations are consistent with ap-proval of the notice.

The Board also has carefully considered the competitiveeffects of the proposed acquisition of First Commercial'smortgage lending and trust company subsidiaries. TheBoard notes that the market for these nonbanking servicesis unconcentrated, that there are numerous providers of theservices, and that there is minimal geographic overlap inthe areas in which Regions and First Commercial primarilyoffer these services. As a result, the Board has concludedthat the proposal would not have a significantly adverseeffect on competition for mortgage lending services or trustcompany functions.

The Board expects, moreover, that the acquisition ofFirst Commercial by Regions would provide added conve-nience to customers of both institutions and is likely toresult in increased operating efficiencies for the combinedorganization. Additionally, there are public benefits to bederived from permitting capital markets to operate so thatbank holding companies may make potentially profitableinvestments in nonbanking companies when those invest-ments are consistent, as in this case, with the relevantconsiderations under the BHC Act, and from permittingbanking organizations to allocate their resources in themanner they consider to be most efficient. The Board alsobelieves that the conduct of the proposed activities withinthe framework established under Regulation Y is not likelyto result in adverse effects, such as undue concentration ofresources, decreased or unfair competition, conflicts ofinterests, or unsound banking practices, that would not be

20. See 12 C.F.R. 225.28 (b)(l) and (5).21. 12 U.S.C. § 1843(c)(8).22. See 12 C.F.R. 225.26.



outweighed by the public benefits of the proposal, such asincreased convenience and gains in efficiency. Accord-ingly, based on all the facts of record, the Board hasdetermined that the balance of public benefits that theBoard must consider under the proper incident to bankingstandard of section 4(c)(8) of the BHC Act is favorable andconsistent with approval of the proposal.

Conclusion

Based on the foregoing and all the other facts of record, theBoard has determined that the applications should be, andhereby are, approved.23 The Board's approval is specifi-cally conditioned on compliance by Regions with all thecommitments made in connection with the proposal and allthe conditions in this order.

The Board's determination on the nonbanking activitiesalso is subject to all the terms and conditions set forth inRegulation Y, including those in sections 225.7 and225.25(c) of Regulation Y (12 C.F.R. 225.7 and 225.25(c)),and to the Board's authority to require such modification ortermination of the activities of a bank holding company orany of its subsidiaries as the Board finds necessary toensure compliance with, and to prevent evasion of, theprovisions of the BHC Act and the Board's regulations andorders issued thereunder. For purposes of this order, thecommitments and conditions relied on by the Board inreaching this decision are deemed to be conditions im-posed in writing by the Board in connection with itsfindings and decisions, and, as such, may be enforced inproceedings under applicable law.

The acquisition of First Commercial's banks may not beconsummated before the fifteenth calendar day followingthe effective date of this order, and the proposal may not beconsummated later that three months after the effectivedate of this order, unless such period is extended for good

23. Two commenters requested that the Board hold a public meetingor hearing on the proposal to obtain additional factual evidenceconcerning the lending record of Regions. Section 3(b) of the BHCAct does not require the Board to hold a public hearing on anapplication unless the appropriate supervisory authority for the bankto be acquired makes a timely written recommendation of denial. TheBoard has not received such a recommendation from the appropriatesupervisory authorities.

Under its rules, the Board also may, in its discretion, hold a publicmeeting or hearing on an application to acquire a bank if a meeting orhearing is necessary or appropriate to clarify factual issues related tothe application and to provide an opportunity for testimony, if appro-priate. 12 C.F.R. 225.16(e). The Board has carefully considered thecommenters' request in light of all the facts of record. In the Board'sview, commenters have had ample opportunity to submit their views,and have submitted substantial written comments that have beencarefully considered by the Board in acting on the proposal. Thecommenters' request fails to identify disputed issues of fact that arematerial to the Board's decision that may be clarified by a publicmeeting or hearing. The commenters also fail to indicate the mattersthat may be presented by others and why a public meeting or hearingis necessary for the proper presentation or consideration of theirviews. For these reasons, and based on all the facts of record, theBoard has determined that a public meeting or hearing is not requiredor warranted in this case. Accordingly, the request is hereby denied.

cause by the Board or by the Federal Reserve Bank ofAtlanta, acting pursuant to delegated authority.


Voting for this action: Chairman Greenspan, Vice Chair Rivlin, andGovernors Kelley, Phillips, Meyer, Ferguson, and Gramlich.

JENNIFER J. JOHNSON

Deputy Secretary of the Board

Appendix

First Commercial Corporation's Subsidiary Banks andNonbanking Subsidiaries

A. Subsidiary Banks

Arkansas1. First Commercial Bank, N.A., Little Rock.2. Arkansas Bank and Trust Company, Hot Springs.3. Arkansas State Bank, Clarksville.4. Benton State Bank, Benton.5. Citizens First Bank, Arkadelphia.6. Citizens First Bank, El Dorado.7. Citizens First Bank, Fordyce.8. Clinton State Bank, Clinton.9. Fanners & Merchants Bank, Rogers.

10. First Bank of Arkansas, Jonesboro.11. First National Bank of Conway, Conway.12. First National Bank of Nashville, Nashville.13. First National Bank of Russellville, Russellville.14. First National Bank of Searcy, Searcy.15. Morrilton Security Bank, N.A., Morrilton.16. State First National Bank, Texarkana.17. The Security Bank, Harrison.

Texas18. First National Bank of Palestine, Palestine.19. Kilgore First National Bank, Kilgore.20. Longview National Bank, Longview.21. Lufkin National Bank, Lufkin.22. State First National Bank, Texarkana.23. Stone Fort National Bank of Nacogdoches, Nacogdo-

ches.24. Tyler Bank and Trust, N.A., Tyler.

Oklahoma'25. Oklahoma National Bank of Duncan, Duncan.26. Security National Bank & Trust Company, Norman.

Louisiana27. Springhill Bank & Trust Company, Springhill.

1. The Oklahoma banking subsidiaries of First Commercial arewholly owned by TRH Bank Group. Inc., Norman, Oklahoma, ofwhich First Commercial owns 50 percent.



Tennessee28. First Commercial Bank of Memphis, N.A., Memphis.

B. Nonbanking Subsidiaries

1. First Commercial Mortgage Company, Little Rock, Ar-kansas, which engages in making and servicing loans,pursuant to section 225.28(b)(l) of Regulation Y(12 C.F.R. 225.28(b)(l)).

2. First Commercial Trust Company, N.A., Little Rock,Arkansas, which engages in trust company functions,pursuant to section 225.28(b)(5) of Regulation Y(12 C.F.R. 225.28(b)(5)).

ORDERS ISSUED UNDER INTERNATIONAL BANKINGACT

HSBC Equator Bank picLondon, England

Order Approving Establishment of a RepresentativeOffice

HSBC Equator Bank pic ("Bank"), London, England, aforeign bank within the meaning of the International Bank-ing Act ("IBA"), has applied under section 10(a) of theIBA (12U.S.C. §3107(a)) to establish a representativeoffice in Washington, D.C. The Foreign Bank SupervisionEnhancement Act of 1991 ("FBSEA"), which amendedthe IBA, provides that a foreign bank must obtain theapproval of the Board to establish a representative office inthe United States.

Notice of the application, affording interested persons anopportunity to submit comments, has been published in anewspaper of general circulation in Washington, D.C.{The Washington Post, June 1, 1997). The time for filingcomments has expired, and the Board has considered theapplication and all comments received.

Bank, with approximately $202 million in assets,1 isincorporated in London, England, and provides commer-cial and merchant banking services to sub-Saharan Africa.Bank began its operations in 1996, as part of a reorganiza-tion of the holdings of its parent, Equator Holdings Limited("EHL"). In the reorganization, Bank acquired the major-ity of the business and staff of its sister affiliate, EquatorBank Limited ("EBL"), a commercial bank incorporatedin Nassau, the Bahamas, and formerly EHL's principaloperating subsidiary. HSBC Holdings pic ("HSBC"), Lon-don, England, indirectly owns 60 percent of EHL's shares.NedEurope S.A., a Luxembourg subsidiary of a SouthAfrican financial services group, and Equator ManagementServices, a Connecticut partnership consisting of membersof the management of Bank's affiliates, each own 20 per-cent of EHL's shares.

Bank's international operations consist of six representa-tive offices in various African countries, and several leas-ing company subsidiaries organized in Nassau, Bahamas,and the Turks and Caicos Islands. In the United States,Bank's immediate parent, EHL, operates an export tradingcompany and several other nonbanking companies.2 Inaddition, Bank's sister bank, EBL, operates a representa-tive office in Washington, D.C. Bank is proposing that thecurrent EBL representative also would serve as Bank'srepresentative.

The proposed representative office in Washington, D.C.would conduct market research, develop new business,prepare loan applications, and maintain contacts withBank's customers and U.S. government and internationaldevelopment agencies with interests in Africa. The pro-posed representative office would report to Bank's headoffice in London and also would be monitored and super-vised by Equator USA, Inc., EHL's Connecticut servicingsubsidiary. No funds would be solicited, received, or dis-bursed at or through the representative office.

In acting on an application to establish a representativeoffice, the IBA and Regulation K provide that the Boardshall take into account whether the foreign bank engagesdirectly in the business of banking outside of the UnitedStates and has furnished to the Board the information itneeds to assess the application adequately. The Board alsoshall take into account whether the foreign bank and anyforeign bank parent is subject to comprehensive supervi-sion or regulation on a consolidated basis by its homecountry supervisor (12U.S.C. § 31O7(a)(2); 12 C.F.R.211.24).3 The Board may also take into account additionalstandards as set forth in the IBA and Regulation K(12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)).

As noted above, Bank engages directly in the business ofbanking outside the United States. Bank also has providedthe Board with information necessary to assess the applica-tion through submissions that address the relevant issues.With respect to supervision by home country authorities,the Board previously has determined, in connection withapplications involving other banks in the United Kingdom,

]. Asset data are as of December 31, 1997.

2. These companies engage in aircraft leasing, consulting, venturecapital activities and the provision of services for a fee to affiliatedcompanies within the Equator group, including Bank.

3. In assessing this standard, the Board considers, among otherfactors, the extent to which the home country supervisors:

(i) Ensure that the bank has adequate procedures for monitoring andcontrolling its activities worldwide;

(ii) Obtain information on the condition of the bank and its subsidiar-ies and offices through regular examination reports, audit reports,or otherwise:

(iii) Obtain information on the dealings with and relationship be-tween the bank and its affiliates, both foreign and domestic;

(iv) Receive from the bank financial reports that are consolidated on aworldwide basis, or comparable information that permits analysisof the bank's financial condition on a worldwide consolidatedbasis; and

(v) Evaluate prudential standards, such as capital adequacy and riskasset exposure, on a worldwide basis.

These are indicia of comprehensive, consolidated supervision. Nosingle factor is essential and other elements may inform the Board'sdetermination.



that those banks were subject to home country supervisionon a consolidated basis.4 Bank is supervised by the Bank ofEngland on substantially the same terms and conditions asthose other banks.5 Based on all the facts of record, theBoard has determined that Bank is subject to comprehen-sive supervision and regulation on a consolidated basis byits home country supervisor.

The Board also has taken into account the additionalstandards set forth in section 7 of the IBA and Regula-tion K(12 U.S.C. § 3105(d)(3),(4); 12 C.F.R. 211.24(c)(2)).The Bank of England has no objection to Bank's establish-ment of the proposed representative office.

With respect to the financial and managerial resources ofBank, taking into consideration Bank's record of opera-tions in its home country, its overall financial resources,and its standing with its home country supervisors, theBoard also has determined that financial and managerialfactors are consistent with approval of the proposed repre-sentative office. Bank appears to have the experience andcapacity to support the proposed representative office andhas established controls and procedures for the proposedrepresentative office to ensure compliance with U.S. law.

With respect to access to information about Bank'soperations, the Board has reviewed the restrictions ondisclosure in relevant jurisdictions in which Bank operatesand has communicated with relevant government authori-ties regarding access to information. Bank and HSBC havecommitted to make available to the Board such informa-tion on the operations of Bank and any of its affiliates thatthe Board deems necessary to determine and enforce com-pliance with the IBA, the Bank Holding Company Act of1956, as amended, and other applicable federal law. To theextent that the provision of such information to the Board

4. See Coutts & Co. AG, 79 Federal Reserve Bulletin 636 (1993);Singer & Friedlander, 79 Federal Reserve Bulletin 809 (1993); WestMerchant Bank Limited, 81 Federal Reserve Bulletin 519(1995).

5. In addition, although HSBC, Bank's ultimate parent, is not itselfan authorized institution in the United Kingdom, the Board haspreviously determined that HSBC and its various banking and non-banking companies ("HSBC Group") are supervised on substantiallythe same terms and conditions as those United Kingdom banks. WellsFargo & Co., HSBC Holdings, pk, HSBC Holdings BV, MarineMidland Banks, Inc., 81 Federal Reserve Bulletin 1037 (1995); seealso Hongkong Bank of Canada, 83 Federal Reserve Bulletin 51(1997). The Bank of England has confirmed that its consolidatedsupervision of the HSBC Group extends to Bank and that there havebeen no material changes in its supervision of the HSBC Group sincethe Board's previous determination.

may be prohibited by law, Bank and HSBC have commit-ted to cooperate with the Board to obtain any necessaryconsents or waivers that might be required from thirdparties for disclosure of such information. In addition,subject to certain conditions, the Bank of England mayshare information on the operations of Bank and the HSBCGroup with other supervisors, including the Board. In lightof these commitments and other facts of record, and sub-ject to the condition described below, the Board concludesthat Bank has provided adequate assurances of access toany necessary information the Board may request.

On the basis of all the facts of record, and subject to thecommitments made by Bank and HSBC, as well as theterms and conditions set forth in this order, the Board hasdetermined that Bank's application to establish a represen-tative office should be, and hereby is, approved. Shouldany restrictions on access to information on the operationsor activities of Bank and its affiliates subsequently interferewith the Board's ability to obtain information to determineand enforce compliance by Bank or its affiliates withapplicable federal statutes, the Board may require termina-tion of any of Bank's or its affiliates' direct or indirectactivities in the United States. Approval of this applicationis also specifically conditioned on compliance by Bank andHSBC with the commitments made in connection with thisapplication, and with the conditions in this order.6 Thecommitments and conditions referred to above are condi-tions imposed in writing by the Board in connection withits decision, and may be enforced in proceedings under12 U.S.C. § 1818 against Bank and its affiliates.


Voting for this action: Chairman Greenspan, Vice Chair Rivlin, andGovernors Phillips, Meyer, and Gramlich. Absent and not voting:Governors Kelley and Ferguson.


6. The Board's authority to approve the establishment of the pro-posed office parallels the authority of the Washington, D.C. Office ofBanking and Financial Institutions ("Office") to license or otherwisepermit the establishment of offices of a foreign bank. The Board'sapproval of this application does not supplant the authority of Officeto license or otherwise permit the proposed office of Bank in accor-dance with any terms or conditions that Office may impose.



INDEX OF ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

(JANUARY 1, 1998-MARCH 31, 1998)

Applicant Merged or Acquired Bank or Activity Date of Approval

BulletinVolumeand Page

Banco Bilbao Vizcaya, S.A.,Bilbao, Spain

Bank of Scotland,Edinburgh, Scotland

Caja de Ahorros de Valencia,Castellon y Alicante, Bancaja,Valencia Spain

Commerce Bancorp, Inc.,Cherry Hill, New Jersey

Dresdner Bank AG,Frankfurt, Germany

First Financial Corporation,Terre Haute, Indiana

FirstMerit Corporation,Akron, Ohio

Fleet Financial Group, Inc.,Boston, Massachusetts

Indiana United Bancorp,Greensburg, Indiana

National City Corporation,Cleveland, Ohio

North Fork Bancorporation, Inc.,Melville, New York

Peoples Heritage Financial Group, Inc.,Portland, Maine

BBV Latlnvest Securities Inc.,New York, New York

To establish a representative office inSeattle, Washington

To establish an agency in Miami, Florida

A.H. Williams & Co., Inc.,Philadelphia, Pennsylvania

Oechsle International Advisors, L.P.,Boston, Massachusetts

RCM Capital Management, L.L.C.,San Francisco, California

The Morris Plan Company of TerreHaute, Inc.,Terre Haute, Indiana

CoBancorp, Inc.,Elyria, Ohio

PremierBank & Trust,Elyria, Ohio

Jefferson Savings Bank,West Jefferson, Ohio

The Quick & Reilly Group, Inc.,Palm Beach, Florida

P.T.C. Bancorp,Brookville, Indiana

Peoples Trust Company,Brookville, Indiana

First of American Bank Corporation,Kalamazoo, Michigan

First of America Bank,N.A., Kalamazoo, Michigan

First of America Bank—Illinois, N.A.,Bannockburn, Illinois

New York Bancorp, Inc.,Douglaston, New York

Home Federal Savings Bank,Ridgewood, New York

CFX Corporation,Keene, New Hampshire

CFX Bank,Keene, New Hampshire

Orange Savings Bank,Orange, Massachusetts

Safety Fund National Bank,Fitchburg, Massachusetts

March 23, 1998

January 14, 1998

January 21, 1998

March 23, 1998

March 11, 1998

February 23, 1998

March 11, 1998

January 14, 1998

February 17, 1998

February 11, 1998

February 9, 1998

March 18, 1998

84, 356

84, 230

84, 231

84, 358

84, 361

84, 279

84, 363

84, 227

84, 280

84, 281

84, 290

84, 351



Applicant

Regions Financial Corporation,Birmingham, Alabama

Shore Financial Corporation,Onley, Virginia

WesBanco Bank Wheeling,Wheeling, West Virginia

WesBanco, Inc.,Wheeling, West Virginia

WestStar Bank,Bartlesville, Oklahoma

Merged or Acquired Bank or Activity

First State Corporation,Albany, Georgia

First Bank & Trust Company,Albany, Georgia

First Bank & Trust Company,Cordele, Georgia

Shore Bank,Onley, Virginia

The Bank of Paden City,Paden City, West Virginia

Bank of McMechen,McMechen, West Virginia

Commercial BancShares, Inc.,Parkersburg, West Virginia

Gateway Bancshares, Inc.,McMechen, West Virginia

Victory Bank of Nowata,Nowata, Oklahoma

Date of Approval

March 11, 1998

February 9, 1998

March 2, 1998

March 2, 1998

February 18, 1998

BulletinVolumeand Page

84, 354

84, 288

84, 366

84, 366

84, 294

APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACTBy the Secretary of the Board

Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request tothe Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System,Washington, D.C. 20551.

Section 3

Applicant(s) Bank(s) Effective Date

First Security Corporation, California State Bank, May 6, 1998Salt Lake City, Utah West Covina, California

Section 4


Allied Irish Banks, p.l.c, To engage de novo, through certain of its May 11, 1998Dublin, Ireland nonbanking subsidiaries, in serving as the

general partner of private investmentlimited partnerships now existing or to beestablished in the future

National City Corporation, INFITEQ, LLC, May 11, 1998Cleveland, Ohio Dallas, Texas

National Processing, Inc.,Louisville, Kentucky

Norwest Corporation, Edward Jones Mortgage, LLC, May 7, 1998Minneapolis, Minnesota Minneapolis, Minnesota

E.J. Mortgage, LLC,St. Louis, Missouri

Norwest Corporation, MidAmerica Insurance Agency South, Inc., May 28, 1998Minneapolis, Minnesota Blue Earth, Minnesota



Section 4—Continued


Norwest Corporation,Minneapolis, Minnesota

Wachovia Corporation,Winston-Salem, North Carolina

Norwest Mortgage of Hawaii, LLC,Honolulu, Hawaii

Home Financial Services, Inc.,Honolulu, Hawaii

Wachovia Capital Markets, Inc.,Winston-Salem, North Carolina

May 7, 1998

May 29, 1998

By Federal Reserve Banks

Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request tothe Reserve Banks.

Section 3

Applicant(s) Bank(s) Reserve Bank Effective Date

Alabama National Bancorporation,Birmingham, Alabama

AmTrust, Inc.,Dubuque, Iowa

Anson Bancorp, Inc.,Wadesboro, North Carolina

The 1855 Bancorp,New Bedford, Massachusetts

The Baraboo Bancorporation,Baraboo, Wisconsin

Belvedere Capital Partners, Inc.,San Francisco, California

Buena Vista Bancorp, Inc.,Chester, Illinois

Cardinal Financial Corporation,Fairfax, Virginia

Citizens Bancorp, Inc.,Charleston, Missouri

Citizens National Bancshares, Inc..Nicholasville, Kentucky

Clover Community Bankshares,Inc.,Clover, South Carolina

CNB Bancshares, Inc.,Evansville, Indiana

CountryBanc Holding Company,Edmond, Oklahoma

Chicago

Richmond

Boston

Chicago

San Francisco

May 13, 1998

May 12, 1998

April 27, 1998

April 24, 1998

May 1, 1998

Public Bank Corporation, Atlanta April 23, 1998St. Cloud, Florida

Public Bank,St. Cloud, Florida

Cuba City State Bank,Cuba City, Wisconsin

Anson Savings Bank, SSB,Wadesboro, North Carolina

Sandwich Bancorp, Inc.,Sandwich, Massachusetts

State Bank of Wonewoc,Wonewoc, Wisconsin

California Community FinancialInstitutions Fund Limited Partnership,San Francisco, California

Belvedere Bancorp,San Francisco, California

National Business Bank,Torrance, California

Bank of Evansville, St. Louis May 7, 1998Evansville, Illinois

Cardinal Bank, N.A., Richmond May 1, 1998Fairfax, Virginia

Citizens' Bank of Charleston, St. Louis May 7, 1998Charleston, Missouri

Citizens National Bank of Jessamine, Cleveland May 1, 1998Jessamine, Kentucky

Clover Community Bank, Richmond April 28, 1998Clover, South Carolina

National Bancorp, St. Louis April 29, 1998Tell City, Indiana

TCB Bank,Tell City, Indiana

Home State Bank, Kansas City April 22, 1998Hobart, Oklahoma





ECB Bancorp, Inc.,Engelhard, North Carolina

The Employee Stock OwnershipTrust of People's Bank and TrustCompany of Pickett County,Byrdstown, Tennessee

F.N.B. Corporation,Hermitage, Pennsylvania

First Gilmer Bancshares, Inc.,Gilmer, Texas

First Gilmer Delaware Holdings,Inc.,Wilmington, Delaware

Fryburg Banking Company, Inc.,Fryburg, Pennsylvania

Halbur Bancshares, Inc.,Halbur, Iowa

Hall Properties, LP,Perry, Oklahoma

Hibernia Corporation,New Orleans, Louisiana

Home Valley Bancorp,Cave Junction, Oregon

LCNB Bancorporation, Inc.,Houston, Texas

LCNB Bancorporation of Delaware,Inc.,Wilmington, Delaware

Mainline Bancorp, Inc.,Ebensburg, Pennsylvania

Lino Lakes Bane Shares, Inc.,Forest Lake, Minnesota

MainStreet BankGroupIncorporated,Martinsville, Virginia

Mid Penn Bancorp, Inc.,Millersburg, Pennsylvania

New England Community Bancorp,Inc.,Windsor, Connecticut

Osceola Bancorporation,Osceola, Iowa

The Peoples Holding Company,Inc.,Coldwater, Ohio

Premier Bancorp, Inc.,Brentwood, Tennessee

The East Carolina Bank,Engelhard, North Carolina

Upper Cumberland Bancshares, Inc.,Byrdstown, Tennessee

Southwest Interim Bank, No. 4,National Association,Seminole, Florida

Wood County National Bank,Quitman, Texas

Richmond May 20, 1998

Atlanta April 29, 1998

Cleveland May 5, 1998

Dallas

The First National Bank of Spangler,Spangler, Pennsylvania

Lino Lakes State Bank,Lino Lakes, Missouri

Ballston Bancorp, Inc.,Washington, D.C.

The Bank of Northern Virginia,Arlington, Virginia

Miners Bank of Lykens,Lykens, Pennsylvania

Olde Port Bank & Trust Company,Portsmouth, New Hampshire

Huxley Bancorp,Huxley, Iowa

The Peoples Bank Company,Coldwater, Ohio

Premier Bank of Brentwood,Brentwood, Tennessee

April 20, 1998

First United National Bank,Fryburg, Pennsylvania

Westside Banco,Westside, Iowa

Perry Bancshares, Inc.,Perry, Oklahoma

Peoples Holding Corporation,Minden, Louisiana

Peoples Bank and Trust Company,Minden, Louisiana

Home Valley Bank,Cave Junction, Oregon

Langham Creek National Bank,Houston, Texas

Cleveland

Chicago

Kansas City

Atlanta

San Francisco

Dallas

May 20, 1998

May 13, 1998

May 1, 1998

April 29, 1998

April 24, 1998

April 30, 1998

Philadelphia April 24, 1998

Minneapolis May 5, 1998

Richmond May 11, 1998

Philadelphia May 13, 1998

Boston May 21, 1998

Chicago May 7, 1998

Cleveland May 8, 1998

Atlanta May 1, 1998




Applicant(s)

Premier Bancshares, Inc.,Atlanta, Georgia

Premier Bancshares, Inc.,Atlanta, Georgia

Security State Bancshares, Inc.,Charleston, Missouri

Signature Bancshares, Inc.,Springfield, Missouri

Southern DevelopmentBancorporation, Inc.,Arkadelphia, Arkansas

Southern Heritage Bancorp, Inc.,Oakwood, Georgia

United Bancorp, Inc.,Martins Ferry, Ohio

United Community Bancshares,Gonzales, Louisiana

Unity Holdings, Inc.,Cartersville, Georgia

USAL Bancorp, Inc.,Union Springs, Alabama

Valley National Corporation,Lanett, Alabama

Wilber Company,Wilber, Nebraska

Section 4

Applicant(s)

Bank(s)

The Bank Holding Company,Griffin, Georgia

First Community Bank of HenryCounty,McDonough, Georgia

The Bank of Spalding County,Griffin, Georgia

Button Gwinnett Financial Corporation,Snellville, Georgia

The Bank of Gwinnett County,Lawrenceville, Georgia

Bank of Atkins,Atkins, Arkansas

Signature Bank,Springfield, Missouri

First Delta Corporation,Helena, Arkansas

First National Bank of Phillips County,Helena, Arkansas

The Delta State Bank,Elaine, Arkansas

Southern Heritage Bank,Oakwood, Georgia

Southern Ohio CommunityBancorporation, Inc.,Glouster, Ohio

United Community Bank,Gonzales, Louisiana

Unity National Bank,Cartersville, Georgia

AmeriFirst Bank, N.A.,Union Springs, Alabama

First National Sylacauga Corporation,Sylacauga, Alabama

First National-America's Bank,Sylacauga, Alabama

NebraskaLand National Bank,North Platte, Nebraska

Nonbanking Activity/Company

Reserve Bank

Atlanta

Atlanta

St. Louis

St. Louis

St. Louis

Atlanta

Cleveland

Atlanta

Atlanta

Atlanta

Atlanta

Kansas City

Reserve Bank

Effective Date

May 21, 1998

May 14, 1998

May 13, 1998

May 7, 1998

May 13, 1998

April 30, 1998

May 12, 1998

May 20, 1998

April 29, 1998

April 27, 1998

May 7, 1998

April 29, 1998

Effective Date

Bank Capital Corporation,Strasburg, Colorado

Bank of Montreal,Toronto, Ontario, Canada

Bankmont Financial Corp.,Chicago, Illinois

Bank Capital Mortgage LLC,Strasburg, Colorado

Harris Bankcorp, Inc.,Chicago, Illinois

Harris Investment Management, Inc.,Chicago, Illinois

Harris Investment Management MarketNeutral Fund, LLC,Chicago, Illinois

Kansas City

Chicago

May 4, 1998

May 15, 1998




Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date

Bayerische Vereinsbank AG,Munich, Federal Republic ofGermany

Bayerische Vereinsbank AG,Munich, Federal Republic ofGermany

Community Financial Services, Inc..Atlanta, Georgia

Fifth Third Bancorp,Cincinnati, Ohio

Fifth Third Bancorp,Cincinnati, Ohio

FirstFederal Financial ServicesCorp.,Wooster, Ohio

First Union Corporation,Charlotte, North Carolina

National Australia Bank Limited,Melbourne, Australia

Homeside Lending, Inc.,Jacksonville, Florida

SJNB Financial Corporation,San Jose, California

Southeast Capital Corporation,Idabel, Oklahoma

Southeast Capital CorporationESOP,Idabel, Oklahoma

Summit Bankshares, Inc.,Raphine, Virginia

The Toronto-Dominion Bank,Toronto, Ontario, Canada

Waterhouse Investors Services, Inc.,New York, New York

VB Risk Management Products Inc.,New York, New York

VB Structured Finance Inc.,New York, New York

Community Bank Marketing, Inc.,Atlanta, Georgia

State Savings Company,Columbus, Ohio

CitFed Bancorp, Inc.,Dayton, Ohio

First Shenango Bancorp, Inc.,New Castle, Pennsylvania

Bowles Hollowell Conner & Co.,Charlotte, North Carolina

Bane One Mortgage Corporation,

New York

New York

Atlanta

Cleveland

Cleveland

Cleveland

Richmond

Chicago

April 24, 1998

May 18, 1998

May 6, 1998

April 23, 1998

April 23, 1998

May 6, 1998

April 23, 1998

May 15, 1998Indianapolis, Indiana

Epic Funding Corporation,Lafayette, California

To engage de novo in communitydevelopment activities

Valley Security Insurance Company,Raphine, Virginia

Waterhouse Securities Inc.,New York, New York

Jack White & Company,San Diego, California

San Francisco May 14, 1998

Kansas City May 1, 1998

Richmond April 29, 1998

New York April 24, 1998

Sections 3 and 4

Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date

Giltner Investment Partnership II,Ltd.,Omaha, Nebraska

Union Planters Corporation,Memphis, Tennessee

Union Planters Holding Corporation,Memphis, Tennessee

Avoca Company,Avoca, Nebraska

Magna Group, Inc.,St. Louis, Missouri

HBC Acquisition Sub, Inc.,St. Louis, Missouri

Magna Bank, National Association,St. Louis, Missouri

Charter Bank, S.B.,Sparta, Illinois

Kansas City April 29, 1998

St. Louis May 21, 1998



APPLICATIONS APPROVED UNDER BANK MERGER ACT

By Federal Reserve Banks

Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request tothe Reserve Banks.


Atlantic Bank,Ocean City, Maryland

Colonial Bank,Montgomery, Alabama

Farmers State Bank,Mankato, Kansas

FCNB Bank,Frederick, Maryland

Fifth Third Bank of Cincinnati,Cincinnati, Ohio

Fifth Third Bank,Cincinnati, Ohio

Fifth Third Bank of Columbus,Columbus, Ohio

Fifth Third Bank of Columbus,Columbus, Ohio

The Fifth Third Bank of SouthernOhio,Hillsboro, Ohio

The Fifth Third Bank of WesternOhio,Dayton, Ohio

Johnson Bank,Racine, Wisconsin

Mercantile Bank,Overland Park, Kansas

Bank of Maryland, Richmond May 13, 1998Towson, Maryland

Commercial Bank of Nevada, Atlanta May 12, 1998Las Vegas, Nevada

Security National Bank, Kansas City May 15, 1998Manhattan, Kansas

Farmers Bank of Maryland, Richmond April 27, 1998Annapolis, Maryland

First Virginia Bank-Maryland,Upper Marlboro, Maryland

Century Savings Bank, Cleveland April 23. 1998Columbus, Ohio

The Fifth Third Bank of Western Ohio, Cleveland April 23, 1998Dayton, Ohio

State Savings Bank, Cleveland April 23, 1998Columbus, Ohio

Upper Arlington Branch of Fifth Third Cleveland April 23, 1998Cincinnati,Upper Arlington, Ohio

The Fifth Third Bank of Western Ohio, Cleveland April 23, 1998Dayton, Ohio

Citizens Federal Savings Bank, FSB, Cleveland April 23, 1998Dayton, Ohio

Bank of Fort Atkinson, Chicago May 14, 1998Fort Atkinson, Wisconsin

Mercantile Bank of Northern Missouri, Kansas City April 29, 1998Macon, Missouri

Mercantile Bank of St. Joseph,St. Joseph, Missouri

Mercantile Bank of Northwest Missouri,Maryville, Missouri

PENDING CASES INVOLVING THE BOARD OF GOVERNORS

This list of pending cases does not include suits against theFederal Reserve Banks in which the Board of Governors is notnamed a party.

Board of Governors v. Carrasco, No. 98 Civ. 3474 (LAK)(S.D.N.Y., filed May 15, 1998). Action to freeze assets ofindividual pending administrative adjudication of civilmoney penalty assessment by the Board. On May 26, 1998,the court issued a preliminary injunction restraining thetransfer or disposition of the individual's assets and appoint-ing the Federal Reserve Bank of New York as receiver forthose assets.

Research Triangle Institute v. Board of Governors, No.97-1719 (U.S. Supreme Court, filed April 28, 1998). Peti-tion for writ of certiorari to review dismissal by the UnitedStates Court of Appeals for the Fourth Circuit of a contractclaim against the Board.

Inner City Press/Community on the Move v. Board of Gover-nors, No. 97-1514 (U.S. Supreme Court, filed March 12,1998). Petition for writ of certiorari to review dismissal bythe United States Court of Appeals for the District ofColumbia Circuit of a petition for review of a Board orderdated May 14, 1997, approving the application of Bane OneCorporation, Inc., Columbus, Ohio, to merge with First



USA, Inc., Dallas, Texas. The Board's opposition to thewrit was filed on May 29, 1998.

Logan v. Greenspan, No. 1:98CV00049 (D.D.C., filed Janu-ary 9, 1998). Employment discrimination complaint.

Goldman v. Department of the Treasury, No. 1-97-CV-3798(N.D. Ga., filed December 23, 1997). Declaratory judgmentaction challenging Federal Reserve notes as lawful money.On March 2, 1998, the Board filed a motion to dismiss theaction.

Kerr v. Department of the Treasury, No. CV-S-97-01877-DWH (S.D. Nev., filed December 22, 1997). Challenge toincome taxation and Federal Reserve notes.

Allen v. Indiana Western Mortgage Corp., No. 97-7744 RJK(CD. Cal., filed November 12, 1997). Customer disputewith a bank.

Patrick v. United States, No. 97-75564 (E.D. Mich., filedNovember 7, 1997). Action for damages arising out of taxdispute.

Leuthe v. Office of Financial Institution Adjudication, No.97-1826 (3d Cir., filed October 22, 1997). Appeal of districtcourt dismissal of action against the Board and other Fed-eral banking agencies challenging the constitutionality ofthe Office of Financial Institution Adjudication.

Patrick v. United States, No. 97-75017 (E.D. Mich., filedSeptember 30, 1997). Action for damages arising out of taxdispute.

Artis v. Greenspan, No. 97-5235 (D.C. Cir., filed Septem-ber 19, 1997). Appeal of district court order dismissingemployment discrimination class action.

Towe v. Board of Governors, No. 97-71143 (9th Cir., filedSeptember 15, 1997). Petition for review of a Board orderdated August 18, 1997, prohibiting Edward Towe andThomas E. Towe from further participation in the bankingindustry.

Branch v. Board of Governors, No. 97-5229 (D.C. Cir., filedSeptember 12, 1997). Appeal of district court order denyingmotion to compel production of pre-decisional supervisorydocuments and testimony sought in connection with anaction by Bank of New England Corporation's trustee inbankruptcy against the Federal Deposit Insurance Corpora-tion. On November 10, 1997, the court denied appellant'srequest for expedited consideration of the appeal. Oralargument was heard on May 4, 1998.

Clarkson v. Greenspan, No. 97-CV-2035 (D.D.C., filed Sep-tember 5, 1997). Freedom of Information Act case. OnJanuary 20, 1998, the Board filed a motion to dismiss theaction.

Bettersworth v. Board of Governors, No. 97-CA-624 (W.D.Tex., filed August 21, 1997). Privacy Act case.

Wilkins v. Warren, No. 98-1320 (4th Cir. 1998). Appeal ofDistrict Court dismissal of action involving customer dis-pute with a bank.

Greeff v. Board of Governors, No. 97-1976 (4th Cir., filedJune 17, 1997). Petition for review of a Board order datedMay 19, 1997, approving the application of by Allied IrishBanks, pic, Dublin, Ireland, and First Maryland Bancorp,Baltimore, Maryland, to acquire Dauphin Deposit Corpora-tion, Harrisburg, Pennsylvania, and thereby acquire Dau-phin's banking and nonbanking subsidiaries.

Maunsell v. Greenspan, No. 97-6131 (2d Cir., filed May 22,1997). Appeal of district court dismissal of action for com-pensatory and punitive damages for alleged violations ofcivil rights by federal savings bank. On May 12, 1998, thecourt of appeals affirmed the district court's dismissal.

Pharaon v. Board of Governors, No. 97-1114 (D.C. Cir., filedFebruary 28, 1997). Petition for review of a Board orderdated January 31, 1997, imposing civil money penalties andan order of prohibition for violations of the Bank HoldingCompany Act. Oral argument was held on December 8,1997, and on February 10, 1998, the court of appealsaffirmed the Board's order. On March 26, 1998, petitionerfiled a motion for rehearing and rehearing en bane. Themotions were denied on April 17, 1998.

The New Mexico Alliance v. Board of Governors, No.98-1049 (D.C. Cir., transferred as of January 21, 1998).Petition for review of a Board order dated December 16,1996, approving the acquisition by NationsBank Corpora-tion and NB Holdings Corporation, both of Charlotte, NorthCarolina, of Boatmen's Bancshares, Inc., St. Louis, Mis-souri. On January 21, 1998, the United States Court ofAppeals for the Tenth Circuit ordered the petition trans-ferred to the United States Court of Appeals for the Districtof Columbia Circuit. On May 27, 1998, the court of appealsgranted the Board's motion to dismiss the petition.

American Bankers Insurance Group, Inc. v. Board of Gover-nors, No. 96-CV-2383-EGS (D.D.C., filed October 16,1996). Action seeking declaratory and injunctive relief in-validating a new regulation issued by the Board under theTruth in Lending Act relating to treatment of fees for debtcancellation agreements. On October 18, 1996, the districtcourt denied plaintiffs' motion for a temporary restrainingorder. On April 13, 1998, the district court granted theBoard's motion for summary judgment.

Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filedMay 4, 1998). Appeal of partial denial of Board's motionfor summary judgment in action to freeze assets of individ-ual pending administrative adjudication of civil money pen-alty assessment by the Board. On May 22, 1998, the appel-lee filed a cross-appeal from the partial final judgment.

FINAL ENFORCEMENT ORDERS ISSUED BY THE

BOARD OF GOVERNORS

Banco Industrial de VenezuelaCaracas, Venezuela

The Federal Reserve Board announced on May 20, 1998,the issuance of a Temporary Cease and Desist Orderagainst Banco Industrial de Venzuela, Caracas, Venezuela,to address serious deficiencies in the bank's anti-moneylaundering program.

Banco Nacional de Mexico, et al.Banamex, Mexico

The Federal Reserve Board announced on May 18, 1998,the issuance of Temporary Cease and Desist Orders against



Banco Nacional de Mexico (Banamex), Mexico; Banca in the United States to address serious deficiencies in theirSerfin, S.A., Mexico; Banco Internacional, S.A. (Bital), anti-money laundering programs. Each of these foreignMexico; Bancomer, S.A., Mexico; and Banco Santander, banks operates one or more branches or agencies in theSpain; foreign banking organizations with banking offices United States.


575

Combined Financial Statementsof the Federal Reserve Banks

The financial statements of the Federal Reserve Banks were audited by Coopers & Lybrand L.L.P.,independent public accountants, for the years ended December 31, 1997 and 1996.

Coopers&Lybrand

Coopers & Lybrand L.L.R

a professional services in

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Governors of The Federal Reserve Systemand the Board of Directors of each of The Federal Reserve Banks:

We have audited the accompanying combined statements of condition of TheFederal Reserve Banks (the "Reserve Banks") as of December 31, 1997 and 1996, andthe related combined statements of income and changes in capital for the years thenended. These financial statements are the responsibility of the Reserve Banks' manage-ment. Our responsibility is to express an opinion on the financial statements based onour audits.

We conducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and dis-closures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our audits provide a reasonablebasis for our opinion.

As discussed in Note 3, the combined financial statements were prepared inconformity with the accounting principles, policies, and practices established by theBoard of Governors of The Federal Reserve System. These principles, policies, andpractices, which were designed to meet the specialized accounting and reporting needsof The Federal Reserve System, are set forth in the Financial Accounting Manual forFederal Reserve Banks and constitute a comprehensive basis of accounting other thangenerally accepted accounting principles.

In our opinion, the financial statements referred to above present fairly, in allmaterial respects, the combined financial position of the Reserve Banks as of Decem-ber 31, 1997 and 1996, and combined results of their operations for the years thenended, on the basis of accounting described in Note 3.

Washington, D.C.March 24, 1998



THE FEDERAL RESERVE BANKS

COMBINED STATEMENTS OF CONDITION

December 31, 1997 and 1996

(in millions)

ASSETS 1997 1996

Gold certificates $ 11,047 $ 11,048Special drawing rights certificates 9,200 9,718Coin 460 591Items in process of collection 7,800 12,761Loans to depository institutions 2,035 85U.S. government and federal agency securities, net 458,555 416,875Investments denominated in foreign currencies 17,046 19,264Accrued interest receivable 4,386 3,891Bank premises and equipment, net 1,781 1,757Otherassets 1,612 1,309

Totalassets $513,922 $477,299

LIABILITIES AND CAPITAL

LIABILITIES

Federal Reserve notes outstanding, net $457,469 $426,522Deposits

Depository institutions 30,838 24,524U.S. Treasury, general account 5,444 7,742Other deposits 681 400

Deferred credit items 7,239 7,464Statutory surplus transfer due U.S. Treasury 653 660Accrued benefit cost 747 712Other liabilities 198 177

Total liabilities 503,269 468,201

CAPITAL

Capital paid-in 5,433 4,602Surplus 5,220 4,496

Totalcapital 10,653 9,098

Total liabilities and capital $513,922 $477,299

The accompanying notes are an integral part of these financial statements.


Combined Financial Statements of the Federal Reserve Banks 577

THE FEDERAL RESERVE BANKS

COMBINED STATEMENTS OF INCOME

for the years ended December 31, 1997 and 1996

(in millions)

1997 1996

Interest incomeInterest on U.S. government securities $25,699 $23,884Interest on foreign currencies 375 443Interest on loans to depository institutions 15 \\

Total interest income 26,089 24,338

Other operating income (loss)Income from services 789 787Reimbursable services to government agencies 224 216Foreign currency losses, net (2,593) (1,668)Government securities gains, net 13 32Other income 6J_ 60

Total other operating loss (1,506) (573)

Operating expensesSalaries and other benefits 1,300 1,283Occupancy expense 184 177Equipment expense 261 259Cost of unreimbursed Treasury services 35 38Assessments by Board of Governors 539 565Other expenses 474 468

Total operating expenses 2,793 2,790

Net income prior to distribution $21,790 $20,975

Distribution of net incomeDividends paid to member banks $ 300 $ 256Transferred to surplus 831 636Payments to U.S. Treasury as interest

on Federal Reserve notes 14,565Payments to U.S. Treasury as required by statute 20,659 5,518

Total distribution $21,790 $20,975




T H E FEDERAL RESERVE B A N K S

COMBINED STATEMENTS OF C H A N G E S IN CAPITAL

for the years ended December 31, 1997 and 1996

(in millions)

Capitalpaid-in

Balance at December 31, 1995(79 million shares) $3,966

Net income transferredto surplus . . .

Statutory surplus transferto the U.S. Treasury

Net change in capital stock(13 million shares issued) 636


Net income transferredto surplus . . .

Statutory surplus transferto the U.S. Treasury

Net change in capital stock(17 million shares issued) 831



Surplus

$3,966

636

(106)

$4,496

831

(107)

$5,220

Totalcapital

$7,932

636

(106)

636

$9,098

831

(107)

831

$10,653

N O T E S TO COMBINED FINANCIAL STATEMENTS OF THE FEDERAL RESERVE BANKS, DECEMBER 31, 1997 AND 1996

(1) ORGANIZATION AND BASIS OF PRESENTATION

The twelve Federal Reserve Banks (Reserve Banks) are part ofthe Federal Reserve System (System) created by Congress underthe Federal Reserve Act of 1913 (Federal Reserve Act), whichestablished the central bank of the United States. The ReserveBanks are chartered by the federal government and possess aunique set of governmental, corporate, and central bank character-istics. Other major elements of the System are the Board ofGovernors of the Federal Reserve System (Board of Governors),the Federal Open Market Committee (FOMC), and the FederalAdvisory Council. The FOMC is composed of members of theBoard of Governors, the president of the Federal Reserve Bank ofNew York (FRBNY), and, on a rotating basis, four other ReserveBank presidents.

Although the Reserve Banks are chartered as independent orga-nizations overseen by the Board of Governors, the Reserve Bankswork jointly to carry out their statutory responsibilities. Themajority of the assets, liabilities, and income of the Reserve

Banks is derived from central bank activities and responsibilitieswith regard to monetary policy and currency. For this reason, theaccompanying combined set of financial statements for the twelveindependent Reserve Banks is prepared, adjusted to eliminateinterdistrict accounts and transactions.

Structure

The Reserve Banks serve twelve Federal Reserve Districts nation-wide. In accordance with the Federal Reserve Act, supervisionand control of each Reserve Bank is exercised by a Board ofDirectors. Banks that are members of the System include allnational banks and any state-chartered bank that applies and isapproved for membership in the System.

Board of Directors

The Federal Reserve Act specifies the composition of the board ofdirectors for each of the Reserve Banks. Each board is composed



NOTES TO COMBINED FINANCIAL STATEMENTS OF THE FEDERAL RESERVE BANKS—CONTINUED

of nine members serving three-year terms: three directors, includ-ing those designated as Chairman and Deputy Chairman, areappointed by the Board of Governors, and six directors are electedby member banks. Of the six elected by member banks, threerepresent the public and three represent member banks. Memberbanks are divided into three classes according to size. Memberbanks in each class elect one director representing member banksand one representing the public. In any election of directors, eachmember bank receives one vote, regardless of the number ofshares of Reserve Bank stock it holds.

(2) OPERATIONS AND SERVICES

The System performs a variety of services and operations. Func-tions include formulating and conducting monetary policy; partici-pating actively in the payments mechanism, including large-dollartransfers of funds, automated clearinghouse operations, and checkprocessing; distribution of coin and currency; fiscal agency func-tions for the U.S. Treasury and certain federal agencies; servingas the federal government's bank; providing short-term loans todepository institutions; serving the consumer and the communityby providing educational materials and information regardingconsumer laws; supervising bank holding companies and statemember banks; and administering other regulations of the Boardof Governors. The Board of Governors' operating costs are fundedthrough assessments on the Reserve Banks.

The FOMC establishes policy regarding open market opera-tions, oversees these operations, and issues authorizations anddirectives to the FRBNY for its execution of transactions. Autho-rized transaction types include direct purchase and sale of U.S.government and federal agency securities, matched sale-purchasetransactions, the purchase of securities under agreements to resell,and the lending of U.S. government securities. Additionally, theFRBNY is authorized by the FOMC to hold balances of and toexecute spot and forward foreign exchange and securities con-tracts in fourteen foreign currencies, maintain reciprocal currencyarrangements (F/X swaps) with various central banks, and "ware-house" foreign currencies for the U.S. Treasury and ExchangeStabilization Fund (ESF) through the Reserve Banks.

(3) SIGNIFICANT ACCOUNTING POLICIES

Accounting principles for entities with the unique powers andresponsibilities of the nation's central bank have not been formu-lated by the Financial Accounting Standards Board. The Board ofGovernors has developed specialized accounting principles andpractices that it believes are appropriate for the significantlydifferent nature and function of a central bank as compared to theprivate sector. These accounting principles and practices are docu-mented in the Financial Accounting Manual for Federal ReserveBanks (Financial Accounting Manual), which is issued by theBoard of Governors. All Reserve Banks are required to adopt andapply accounting policies and practices that are consistent withthe Financial Accounting Manual.

The financial statements have been prepared in accordance withthe Financial Accounting Manual. Differences exist between theaccounting principles and practices of the System and generallyaccepted accounting principles (GAAP). The primary differencesare the presentation of all security holdings at amortized cost,rather than at the fair value presentation requirements of GAAP,and the accounting for matched sale-purchase transactions as

separate sales and purchases, rather than secured borrowings withpledged collateral, as is required by GAAP. In addition, the Boardof Governors and the Reserve Banks have elected not to includea Statement of Cash Flows, as the liquidity and cash position ofthe Reserve Banks are not of primary concern to users of thesefinancial statements. Other information regarding the ReserveBanks' activities is provided in, or may be derived from, theStatements of Condition, Income, and Changes in Capital. There-fore, a Statement of Cash Flows would not provide any additionaluseful information. There are no other significant differencesbetween the policies outlined in the Financial Accounting Manualand GAAP.

The preparation of the financial statements in conformity withthe Financial Accounting Manual requires management to makecertain estimates and assumptions that affect the reported amountsof assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reportedamounts of income and expenses during the reporting period.Actual results could differ from those estimates. Unique accountsand significant accounting policies are explained below.

(A) Gold Certificates

The Secretary of the Treasury is authorized to issue gold certifi-cates to the Reserve Banks to monetize gold held by the U.S.Treasury. Payment for the gold certificates by the Reserve Banksis made by crediting equivalent amounts in dollars into theaccount established for the U.S. Treasury. These gold certificatesheld by the Reserve Banks are required to be backed by the goldof the U.S. Treasury. The U.S. Treasury may reacquire the goldcertificates at any time, and the Reserve Banks must deliver themto the U.S. Treasury. At such time, the U.S. Treasury's account ischarged, and the Reserve Banks' gold certificate account is low-ered. The value of gold for purposes of backing the gold certifi-cates is set by law at $42% a fine troy ounce.

(B) Special Drawing Rights Certificates

Special drawing rights (SDRs) are issued by the InternationalMonetary Fund (Fund) to its members in proportion to eachmember's quota in the Fund at the time of issuance. SDRs serveas a supplement to international monetary reserves and may betransferred from one national monetary authority to another.Under the law providing for U.S. participation in the SDR system,the Secretary of the U.S. Treasury is authorized to issue SDRcertificates, somewhat like gold certificates, to the Reserve Banks.At such time, equivalent amounts in dollars are credited to theaccount established for the U.S. Treasury, and the Reserve Banks'SDR certificate account is increased. The Reserve Banks arerequired to purchase SDRs, at the direction of the U.S. Treasury,for the purpose of financing SDR certificate acquisitions or forfinancing exchange stabilization operations.

(C) Loans to Depository Institutions

The Depository Institutions Deregulation and Monetary ControlAct of 1980 provides that all depository institutions that maintainreservable transaction accounts or nonpersonal time deposits, asdefined in Regulation D issued by the Board of Governors, haveborrowing privileges at the discretion of the Reserve Banks.Borrowers execute certain lending agreements and deposit sum-




cient collateral before credit is extended. Loans are evaluated forcollectibility, and currently all are considered collectible and fullycollateralized. If any loans were deemed to be uncollectible, anappropriate reserve would be established. Interest is recorded onthe accrual basis and is charged at the applicable discount rateestablished at least every fourteen days by the boards of directorsof the Reserve Banks, subject to review by the Board of Gov-ernors. However, Reserve Banks retain the option to impose asurcharge above the basic rate in certain circumstances.

(D) U.S. Government and Federal Agency Securities andInvestments Denominated in Foreign Currencies

The FOMC has designated the FRBNY to execute open markettransactions on its behalf and to hold the resulting securities in theportfolio known as the System Open Market Account (SOMA). Inaddition to authorizing and directing operations in the domesticsecurities market, the FOMC authorizes and directs the FRBNYto execute operations in foreign markets for major currencies inorder to counter disorderly conditions in exchange markets orother needs specified by the FOMC in carrying out the System'scentral bank responsibilities.

Purchases of securities under agreements to resell and matchedsale-purchase transactions are accounted for as separate sale andpurchase transactions. Purchases under agreements to resell aretransactions in which the FRBNY purchases a security and sells itback at the rate specified at the commencement of the transaction.Matched sale-purchase transactions are transactions in which theFRBNY sells a security and buys it back at the rate specified at thecommencement of the transaction.

Reserve Banks are authorized by the FOMC to lend U.S.government securities held in the SOMA to U.S. governmentsecurities dealers and to banks participating in U.S. governmentsecurities clearing arrangements in order to facilitate the effectivefunctioning of the domestic securities market. These securities-lending transactions are fully collateralized by other U.S. govern-ment securities. FOMC policy requires the lending Reserve Bankto take possession of the collateral in amounts in excess of themarket values of the securities loaned. The market values of thecollateral and the securities loaned are monitored by the lendingReserve Bank on a daily basis, with additional collateral obtainedas necessary. The securities loaned continue to be accounted for inthe SOMA.

Foreign exchange contracts are contractual agreements betweentwo parties to exchange specified currencies at a specified priceon a specified date. Spot foreign contracts normally settle twodays after the trade date, whereas the settlement date on forwardcontracts is negotiated between the contracting parties but willextend beyond two days from the trade date. The FRBNY gener-ally enters into spot contracts, with any forward contracts gener-ally limited to the second leg of a swap/warehousing transaction.

The FRBNY, on behalf of the Reserve Banks, maintains renew-able, short-term F/X swap arrangements with authorized foreigncentral banks. The parties agree to exchange their currencies up toa pre-arranged maximum amount and for an agreed upon periodof time (up to twelve months), at an agreed upon interest rate.These arrangements give the FOMC temporary access to foreigncurrencies that it may need for intervention operations to supportthe dollar and give the partner foreign central bank temporaryaccess to dollars it may need to support its own currency. Draw-ings under the F/X swap arrangements can be initiated by eitherthe FRBNY or the partner foreign central bank, and must be

agreed to by the drawee. The F/X swaps are structured so that theparty initiating the transaction (the drawer) bears the exchangerate risk upon maturity. The Bank will generally invest the for-eign currency received under an F/X swap in interest-bearinginstruments.

Warehousing is an arrangement under which the FOMC agreesto exchange, at the request of the Treasury, U.S. dollars for foreigncurrencies held by the Treasury or ESF over a limited periodof time. The purpose of the warehousing facility is to supplementthe U.S. dollar resources of the Treasury and ESF for financ-ing purchases of foreign currencies and related internationaloperations.

In connection with its foreign currency activities, the FRBNY,on behalf of the Reserve Banks, may enter into contracts thatcontain varying degrees of off-balance-sheet market risk becausethey represent contractual commitments involving future settle-ment and counter-party credit risk. The FRBNY controls creditrisk by obtaining credit approvals, establishing transaction limits,and performing daily monitoring procedures.

While the application of current market prices to the securitiescurrently held in the SOMA portfolio and investments denomi-nated in foreign currencies may result in values substantiallyabove or below their carrying values, these unrealized changes invalue would have no direct effect on the quantity of reservesavailable to the banking system or on the prospects for futureReserve Bank earnings or capital. Both the domestic and foreigncomponents of the SOMA portfolio from time to time involvetransactions that can result in gains or losses when holdings aresold prior to maturity. However, decisions regarding the securitiesand foreign currencies transactions, including their purchase andsale, are motivated by monetary policy objectives rather thanprofit. Accordingly, earnings and any gains or losses resultingfrom the sale of such currencies and securities are incidental to theopen market operations and do not motivate its activities or policydecisions.

U.S. government and federal agency securities and investmentsdenominated in foreign currencies comprising the SOMA arerecorded at cost, on a settlement-date basis, and adjusted foramortization of premiums or accretion of discounts on a straight-line basis. Interest income is accrued on a straight-line basis and isreported as "Interest on U.S. government securities" or "Intereston foreign currencies," as appropriate. Income earned on securi-ties lending transactions is reported as a component of "Otherincome." Gains and losses resulting from sales of securities aredetermined by specific issues based on average cost. Gains andlosses on the sales of U.S. government and federal agency securi-ties are reported as "Government securities gains, net." Foreigncurrency denominated assets are revalued monthly at currentmarket exchange rates in order to report these assets in U.S.dollars. Realized and unrealized gains and losses on investmentsdenominated in foreign currencies are reported as "Foreign cur-rency (losses), net." Foreign currencies held through F/X swaps,when initiated by the counter party, and warehousing arrange-ments are revalued monthly, with the unrealized gain or lossreported as a component of "Other assets" or "Other liabilities,"as appropriate.

(E) Bank Premises and Equipment

Bank premises and equipment are stated at cost less accumulateddepreciation. Depreciation is calculated on a straight-line basis




over estimated useful lives of assets ranging from two to fiftyyears. New assets, major alterations, renovations, and improve-ments are capitalized at cost as additions to the asset accounts.Maintenance, repairs, and minor replacements are charged tooperations in the year incurred.

(F) Federal Reserve Notes

Federal Reserve notes are the circulating currency of the UnitedStates. These notes are issued through the various Federal Reserveagents to the Reserve Banks upon deposit with such agents ofcertain classes of collateral security, typically U.S. governmentsecurities. These notes are identified as issued to a specificReserve Bank. The Federal Reserve Act provides that the collat-eral security tendered by the Reserve Bank to the Federal Reserveagent must be equal to the sum of the notes applied for by suchReserve Bank. In accordance with the Federal Reserve Act, goldcertificates, special drawing rights certificates, U.S. governmentand agency securities, loans allowed under section 13, and invest-ments denominated in foreign currencies are pledged as collateralfor net Federal Reserve notes outstanding. The collateral valueis equal to the book value of the collateral tendered, with theexception of securities, whose collateral value is equal to the parvalue of the securities tendered. The Board of Governors may,at any time, call upon a Reserve Bank for additional security toadequately collateralize the Federal Reserve notes. To satisfy theobligation to provide sufficient collateral for outstanding FederalReserve notes, the Reserve Banks have entered into an agreementthat provides that certain assets of the Reserve Banks are jointlypledged as collateral for the Federal Reserve notes of all ReserveBanks. In the event that this collateral is insufficient, the FederalReserve Act provides that Federal Reserve notes become a firstand paramount lien on all the assets of the Reserve Banks. Finally,as obligations of the United States, Federal Reserve notes arebacked by the full faith and credit of the U.S. government.

The "Federal Reserve notes outstanding, net" account repre-sents Federal Reserve notes reduced by cash held in the vaults ofthe Reserve Banks of $92 billion and $100 billion at Decem-ber 31, 1997 and 1996, respectively.

At December 31, 1997 and 1996, all gold certificates, allspecial drawing rights certificates, and domestic securities withpar values of $437 billion and $406 billion, respectively, werepledged as collateral. At December 31, 1997 and 1996, no loansor investments denominated in foreign currencies were pledged ascollateral.

member bank is liable for Reserve Bank liabilities up to twice thepar value of stock subscribed by it.

(H) Surplus

The Board of Governors requires Reserve Banks to maintain asurplus equal to the amount of capital paid-in as of December 31of the prior year. This amount is intended to provide additionalcapital and reduce the possibility that the Reserve Banks would berequired to call on member banks for additional capital. ReserveBanks are required by the Board of Governors to transfer to theU.S. Treasury excess earnings, after providing for the costs ofoperations, payment of dividends, and reservation of an amountnecessary to equate surplus with capital paid-in. Prior to Octo-ber 1, 1996, this payment represented payment of interest onFederal Reserve notes outstanding.

The Omnibus Budget Reconciliation Act of 1993 (Public Law103-66, Section 3002) codified the existing Board surplus policiesas statutory surplus transfers, rather than as payments of intereston Federal Reserve notes, for federal government fiscal years1998 and 1997 (which began on October 1, 1997 and 1996,respectively). In addition, the legislation directed the ReserveBanks to transfer to the U.S. Treasury additional surplus funds of$107 million and $106 million during fiscal years 1998 and 1997respectively. Reserve Banks are not permitted to replenish surplusfor these amounts during this time. These transfers were made onOctober 1, 1997 and 1996, respectively, and are reported on theStatement of Changes in Capital as "Statutory surplus transfer tothe U.S. Treasury."

In the event of losses, payments to the U.S. Treasury aresuspended until such losses are recovered through subse-quent earnings. Weekly payments to the U.S. Treasury varysignificantly.

(I) Cost of Unreimbursed Treasury Services

Reserve Banks are required by the Federal Reserve Act to serve asfiscal agents and depositories of the United States. By statute, theDepartment of the Treasury is permitted, but not required, to payfor these services. The costs of providing fiscal agency anddepository services to the Treasury Department that have beenbilled but will not be paid are reported as the "Cost of unreim-bursed Treasury services."

(G) Capital Paid-in

The Federal Reserve Act requires that each member bank sub-scribe to the capital stock of the Reserve Bank in an amount equalto 6 percent of the capital and surplus of the member bank. As amember bank's capital and surplus changes, its holdings of theReserve Bank's stock must be adjusted. Member banks are thosestate-chartered banks that apply and are approved for membershipin the System and all national banks. Currently, only one-half ofthe subscription is paid-in and the remainder is subject to call.These shares are nonvoting with a par value of $100. They maynot be transferred or hypothecated. By law, each member bank isentitled to receive an annual dividend of 6 percent on the paid-incapital stock. This cumulative dividend is paid semiannually. A

(J) Taxes

The Reserve Banks are exempt from federal, state, and localtaxes, except for taxes on real property, which are reported as acomponent of "Occupancy expense."

(4) U.S. G O V E R N M E N T AND F E D E R A L A G E N C Y

SECURITIES

Securities bought outright and held under agreements to resell areheld in the SOMA at the FRBNY.

Total securities held in the SOMA at December 31 that werebought outright were as follows (in millions):




1997

Par valueFederal agency $ 685U.S. government

Bills 197,123Notes 174,206Bonds 59,407

Total par value 431,421

Unamortized premiums 6,197Unaccreted discounts (3,617)

Total $434,001

1996

$ 2,225

190,646150,92249,339

393,132

4,677(3,548)

$394,261

The maturities of U.S. government and federal agency securi-ties bought outright, which were held in the SOMA at Decem-ber 31, 1997, were as follows (in millions):

Par value

U.S.Maturities of governmentsecurities held securities

Within 15 days $ 12,95916 days to 90 days 95,64891 days to 1 year 137,886Over 1 year to 5 years 95,028Over 5 years to 10 years 40,907Over 10 years 48,308

Total $430,736

Federal

$ 60192153255

25

$685

Total

$ 12,95995,708

138,07895,18141,16248,333

$431,421

Total securities held under agreements to resell at December 31(in millions):

1997

Par valueFederal agency $ 2,652U.S. government 21,188

Total par value 23,840

Unamortized premiums 996Unaccreted discounts (282)

Total $24,554

1996

$ 1,61219,971

21,583

1,327(296)

$22,614

The resell date for securities purchased under agreements toresell does not exceed fifteen days after the purchase date.

At December 31, 1997 and 1996, matched sale-purchase trans-actions involving U.S. government securities with par values of$17 billion and $15 billion, respectively, were outstanding.Matched sale-purchase transactions are generally overnightarrangements.

At December 31, 1997 and 1996, U.S. government securitieswith par values of $887 million and $489 million, respectively,were loaned.

(5) INVESTMENTS DENOMINATED IN FOREIGN

CURRENCIES

The FRBNY, on behalf of the Reserve Banks, holds foreigncurrency deposits with foreign central banks and the Bank forInternational Settlements and invests in foreign government debtinstruments. Foreign government debt instruments held includeboth securities bought outright and securities held under agree-ments to resell. These investments are guaranteed as to principaland interest by the foreign governments.

Total investments denominated in foreign currencies, valuedat current exchange rates at December 31, were as follows (inmillions):

]997 1996

German marksForeign currency deposits $ 8,271 $10,253Government debt instruments, including

agreements to resell 3,215 2,777

Japanese yenForeign currency deposits 575 637Government debt instruments, including

agreements to resell 4,902 5,515

Accrued interest 86 87

Total $17.049 $19,269

In addition to the balances reported above, $3 million and$5 million in unearned interest collected on certain foreign cur-rency holdings were also reported as "Investments denomi-nated in foreign currencies" at December 31, 1997 and 1996,respectively.

The maturities of investments denominated in foreign curren-cies at December 31, 1997, were as follows (in millions):

Maturities of Investments Denominated in Foreign Currencies

Within 1 year $16,767Over 1 year to 5 years 72Over 5 years to 10 years 210Over 10 years

Total $17,049

At December 31, 1997 and 1996, there were no open foreignexchange contracts.

As of December 31, 1997 and 1996, there were no F/X swapsoutstanding.

At December 31, 1997 and 1996, the warehousing facility was$20 billion, with nothing outstanding.

(6) BANK PREMISES AND EQUIPMENT

A summary of bank premises and equipment at December 31 isas follows (in millions):

1997 1996

Bank premises and equipmentLand $ 194 $ 192Buildings 1,100 934Building machinery and equipment 255 242Construction in progress 61 195Furniture and equipment 1,258 1,230

2,868 2,793

Accumulated depreciation (1,087) (1,036)

Bank premises and equipment, net $1,781 $ 1,757

Depreciation expense was $194 million and $192 million forthe years ended December 31, 1997 and 1996, respectively.

Bank premises and equipment at December 31 include thefollowing amounts for leases that have been capitalized (inmillions):

1997 1996

Bank premises and equipment $95 $96Accumulated depreciation (8_1) (56)

Capitalized leases, net $14 $40




Certain of the Reserve Banks lease unused space to outsidetenants. Those leases have terms ranging from one to fourteenyears. Rental income from such leases was $17 million and$16 million for the years ended December 31, 1997 and 1996,respectively. Future minimum lease payments under agreementsin existence at December 31. 1997, were (in millions):

1998 $151999 142000 132001 122002 10Thereafter _19

Total $83

(7) COMMITMENTS AND C O N T I N G E N C I E S

At December 31, 1997, the Reserve Banks were obligated undernoncancelable leases for premises and equipment with termsranging from one year to approximately twenty-six years. Theseleases provide for increased rentals based upon increases in realestate taxes, operating costs, or selected price indices.

Rental expense under operating leases for certain operatingfacilities, warehouses, and data processing and office equipment(including taxes, insurance, and maintenance when included inrent), net of sublease rentals, was $69 million and $68 million forthe years ended December 31, 1997 and 1996, respectively. Cer-tain of the Reserve Banks' leases have options to renew.

Future minimum rental payments under noncancelable operat-ing leases, net of sublease rentals, with terms of one year or more,at December 31, 1997, were (in millions):

1998 $ 131999 112000 92001 82002 6Thereafter $124

Total $171

At December 31, 1997, the Reserve Banks had contractualcommitments through the year 2007 totaling $261 million for themaintenance of currency processing machines, none of which hasbeen recognized. One Reserve Bank contracts for maintenance forthese machines on behalf of the System and allocates the costs,annually, to each other Reserve Bank.

The Reserve Banks are involved in certain legal actions andclaims arising in the ordinary course of business. Although it isdifficult to predict the ultimate outcome of these actions, inmanagement's opinion, based on discussions with counsel, theaforementioned litigation and claims will be resolved withoutmaterial adverse effect on the financial position or results ofoperations of the Reserve Banks.

The System Plan is a multi-employer plan. FRBNY acts as thesponsor of this plan. The prepaid pension cost includes amountsrelated to the participation of employees of the twelve ReserveBanks, the Board of Governors, and the Plan AdministrativeOffice in the plan.

Contributions to the System Plan are actuarially determined andfully funded by participating employers at amounts prescribed bythe Plan Administrator (with the exception of a mandatory contri-bution of 7 percent of salary by certain employees of the Board ofGovernors that participate in the plan). No separate accounting ismaintained of assets contributed by the participating employers. Itis the System's policy to fund the pension liability as accrued. Nocontributions to the System Plan were required under this policyduring 1997 or 1996.

The BEPs are unfunded plans that were established January 1,1996. Net pension cost for the period is actuarially determinedand is based on the same economic and mortality assumptionsused for the System Plan. The Reserve Banks' projected benefitobligation and net pension costs for the BEPs at December 31,1997 and 1996, and for the years then ended, are not material.

Following is a reconciliation between the funded status ofthe System Plan and amounts recognized at December 31 (inmillions):

1997 1996

Accumulated benefit obligationVested $1,931 $1,758Nonvested 90 85

Total $2,021 $1,843

Plan assets at fair value, primarily listedstocks and bonds $5,031 $4,153

Actuarial present value of projected benefit obligation (2,476) (2,270)

Plan assets in excess of projected benefit obligation 2,555 1,883

Less: Unrecognized net transition obligation 181 226Unrecognized net gain 1,307 884Unrecognized prior service cost (135) (144)

Prepaid pension cost $1,202 $ 917

Prepaid pension cost is reported as a component of "Otherassets."

The assumptions used in developing the pension benefit obliga-tion for the System Plan and BEPs are as follows:

1997 1996

Discount rate 7.00% 7.25%Rate of compensation increase 5.00% 5.00%Long-term rate of return on plan assets 9.00% 9.00%

The components of the net pension credit for the System Planfor the years ended December 31 are shown below (in millions):

(8) R E T I R E M E N T AND T H R I F T P L A N S

Retirement Plans

The Reserve Banks currently offer two defined benefit retirementplans to their employees, based on length of service and level ofcompensation. Substantially all of the Reserve Banks' employeesparticipate in the Retirement Plan for Employees of the FederalReserve System (System Plan) and the Benefit EqualizationRetirement Plans offered by each individual Reserve Bank(BEPs).

1997 1996

Service cost—benefits earned $ 71 $ 71Interest cost on projected benefit obligation 160 152Actual return on plan assets (904) (634)Net amortization and deferral 468 269Cost of special termination benefits 4 [

Net pension (credit) $(201) $(141)

The net pension credit is reported as a component of "Otherexpense."




Thrift Plan

Employees of the Reserve Banks may also participate in the ThriftPlan for Employees of the Federal Reserve System (Thrift Plan).The Thrift Plan is a defined contribution plan. Under the ThriftPlan, employees may contribute a percentage of their salaries upto a maximum 20 percent limit. Matching contributions by theReserve Banks are based on a fixed percentage of each employ-ee's basic contribution. Currently, the Reserve Banks match80 percent of the first 6 percent of salary contributed by theemployee. The Reserve Banks' Thrift Plan contributions totaled$41 million and $40 million for the years ended December 31,1997 and 1996, respectively, and are reported as a component of"Salaries and other benefits."

(9) POSTRETIREMENT BENEFITS OTHER THAN PENSIONSAND POSTEMPLOYMENT BENEFITS

Postretirement Benefits Other Than Pensions

In addition to the Reserve Banks' defined benefit retirement plans,employees who have met certain age and length of service require-ments are eligible for both medical benefits and life insurancecoverage during retirement. The retiree medical plan is contribu-tory and provides benefits to retirees, their covered dependents,and beneficiaries. The life insurance plan is noncontributory andcovers retirees only.

The Reserve Banks fund benefits payable under the medicaland life insurance plans as due. Net postretirement benefit cost isactuarially determined, using a January 1 measurement date. Thefollowing is a reconciliation between the plan's funded status andthe amounts recognized as of December 31 (in millions):

1997 1996

Accumulated postretirement benefit obligationRetirees and covered spouses $339 $303Actives eligible to retire 41 53Other actives and disableds 208 226

Total accumulated postretirementbenefit obligation 588 582

Unrecognized net gain (loss) (8) (23)Unrecognized prior service cost 92 84

Accrued postretirement benefit cost $672 $643

Accrued postretirement benefit cost is reported as a componentof "Accrued benefit cost."

The assumptions used in developing the postretirement benefitobligation are as follows:

1997 1996

Discount rate 7.00% 7.25%Rate of increase in health care costs—initial 9.00% 9.50%Rate of increase in health care costs—ultimate 5.00% 5.50%

The ultimate health care cost rate is expected to be achieved in2005.

The following is a summary of the components of net periodicpostretirement cost for the years ended December 31 (in millions):

1997 1996

Service cost $16 $16Interest cost of accumulated benefit obligation 40 40Net amortization and deferral (6) (5)

Net periodic postretirement cost $50 $5J

Net periodic postretirement cost is reported as a component of"Salaries and other benefits."

Changing the assumed health care cost trend rates by 1 percent-age point in each year would change the accumulated post-retirement benefit obligation at December 31, 1997 and 1996, byapproximately $83 million and $118 million, respectively, andwould change the aggregate service and interest cost componentsof net periodic postretirement benefit cost for the years endedDecember 31, 1997 and 1996, by approximately $12 million and$18 million respectively.

Postemployment Benefits

The Reserve Banks offer benefits to former or inactive employees.Postemployment benefit costs are actuarially determined andinclude the cost of medical and dental insurance, survivor income,disability benefits, and those workers' compensation expensesself-insured by individual Reserve Banks. Costs were projectedusing the same discount rate and health care trend rates as wereused for projecting postretirement costs. The accrued postemploy-ment benefit costs recognized by the Reserve Banks at Decem-ber 31, 1997 and 1996, were $76 million and $68 million respec-tively. This cost is included as a component of "Accrued benefitcost." Net periodic postemployment benefit costs included in1997 and 1996 operating expenses were $17 million in eachyear.


Al

Financial and Business Statistics

A3 GUIDE TO TABULAR PRESENTATION

DOMESTIC FINANCIAL STATISTICS

Money Stock and Bank Credit

A4 Reserves, money stock, liquid assets, and debtmeasures

A5 Reserves of depository institutions and Reserve Bankcredit

A6 Reserves and borrowings—Depositoryinstitutions

Policy Instruments

A7 Federal Reserve Bank interest ratesA8 Reserve requirements of depository institutionsA9 Federal Reserve open market transactions

Federal Reserve Banks

A10 Condition and Federal Reserve note statementsAl 1 Maturity distribution of loan and security

holding

Monetary and Credit Aggregates

A12 Aggregate reserves of depository institutionsand monetary base

A13 Money stock, liquid assets, and debt measures

Commercial Banking Institutions—Assets and Liabilities

A15 All commercial banks in the United StatesA16 Domestically chartered commercial banksA17 Large domestically chartered commercial banksA19 Small domestically chartered commercial banksA20 Foreign-related institutions

Financial Markets

A22 Commercial paper and bankers dollaracceptances outstanding

A22 Prime rate charged by banks on short-termbusiness loans

A23 Interest rates—Money and capital marketsA24 Stock market—Selected statistics

Federal Finance

A25 Federal fiscal and financing operationsA26 U.S. budget receipts and outlaysA27 Federal debt subject to statutory limitation

Federal Finance—Continued

All Gross public debt of U.S. Treasury—Types and ownership

A28 U.S. government securitiesdealers—Transactions

A29 U.S. government securities dealers—Positions and financing

A30 Federal and federally sponsored creditagencies—Debt outstanding

Securities Markets and Corporate Finance

A31 New security issues—Tax-exempt state and localgovernments and corporations

A32 Open-end investment companies—Net salesand assets

A32 Corporate profits and their distributionA32 Domestic finance companies—Assets and

liabilitiesA33 Domestic finance companies—Owned and managed

receivables

Real Estate

A34 Mortgage markets—New homesA35 Mortgage debt outstanding

Consumer Credit

A36 Total outstandingA36 Terms

Flow of Funds

A37 Funds raised in U.S. credit marketsA39 Summary of financial transactionsA40 Summary of credit market debt outstandingA41 Summary of financial assets and liabilities

DOMESTIC NONFINANCIAL STATISTICS

Selected Measures

A42 Nonfinancial business activityA42 Labor force, employment, and unemploymentA43 Output, capacity, and capacity utilizationA44 Industrial production—Indexes and gross valueA46 Housing and constructionA47 Consumer and producer pricesA48 Gross domestic product and incomeA49 Personal income and saving


A2 Federal Reserve Bulletin • July 1998

INTERNATIONAL STATISTICS

Summary Statistics

A50 U.S. international transactionsA51 U.S. foreign tradeA51 U.S. reserve assetsA51 Foreign official assets held at Federal Reserve

BanksA52 Selected U.S. liabilities to foreign official

institutions

Reported by Banks in the United States

A52 Liabilities to, and claims on, foreignersA53 Liabilities to foreignersA55 Banks' own claims on foreignersA56 Banks' own and domestic customers' claims on

foreignersA56 Banks' own claims on unaffiliated foreignersA57 Claims on foreign countries—Combined

domestic offices and foreign branches

Reported by Nonbanking BusinessEnterprises in the United States

A58 Liabilities to unaffiliated foreignersA59 Claims on unaffiliated foreigners

Securities Holdings and Transactions

A60 Foreign transactions in securitiesA61 Marketable U.S. Treasury bonds and

notes—Foreign transactions

Interest and Exchange Rates

A61 Discount rates of foreign central banksA61 Foreign short-term interest ratesA62 Foreign exchange rates

A63 GUIDE TO STATISTICAL RELEASES ANDSPECIAL TABLES

SPECIAL TABLE

A64 Pro forma balance sheet and income statementsfor priced service operations, March 31, 1998

A66 INDEX TO STATISTICAL TABLES


Guide to Tabular Presentation

A3

SYMBOLS AND ABBREVIATIONS

cen.a.Pr

*

0

ATSBIFCDCMOFFBFHAFHLBBFHLMCFmHAFNMAFSLICG-7

CorrectedEstimatedNot availablePreliminaryRevised (Notation appears on column heading

when about half of the figures in that columnare changed.)

Amounts insignificant in terms of the last decimalplace shown in the table (for example, less than500,000 when the smallest unit given is millions)

Calculated to be zeroCell not applicableAutomatic transfer serviceBank insurance fundCertificate of depositCollateralized mortgage obligationFederal Financing BankFederal Housing AdministrationFederal Home Loan Bank BoardFederal Home Loan Mortgage CorporationFarmers Home AdministrationFederal National Mortgage AssociationFederal Savings and Loan Insurance CorporationGroup of Seven

G-10GNMAGDPHUD

IMFIOIPCsIRAMMDAMSANOWOCDOPECOTSPOREITREMICRPRTCSCOSDRSICVA

Group of TenGovernment National Mortgage AssociationGross domestic productDepartment of Housing and Urban

DevelopmentInternational Monetary FundInterest onlyIndividuals, partnerships, and corporationsIndividual retirement accountMoney market deposit accountMetropolitan statistical areaNegotiable order of withdrawalOther checkable depositOrganization of Petroleum Exporting CountriesOffice of Thrift SupervisionPrincipal onlyReal estate investment trustReal estate mortgage investment conduitRepurchase agreementResolution Trust CorporationSecuritized credit obligationSpecial drawing rightStandard Industrial ClassificationDepartment of Veterans Affairs

GENERAL INFORMATION

In many of the tables, components do not sum to totals because ofrounding.

Minus signs are used to indicate (1) a decrease, (2) a negativefigure, or (3) an outflow.

"U.S. government securities" may include guaranteed issuesof U.S. government agencies (the flow of funds figures also

include not fully guaranteed issues) as well as direct obliga-tions of the Treasury.

"State and local government" also includes municipalities,special districts, and other political subdivisions.


A4 Domestic Financial Statistics • July 1998

1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES

Percent annual rate of change, seasonally adjusted'

Monetary or credit aggregate

Q3 Q4 Ql ' Apr.

Reserves of depository institutions1 Total2 Required3 Nonborrowed4 Monetary base3

Concepts of money, liquid assets, and debt5 Ml6 M27 M38 L9 Debt

Nontransaction components10 In M25

11 In M3 only6

Time and savings depositsCommercial banks

12 Savings, including MMDAs13 Small time14 Large time89

Thrift institutions15 Savings, including MMDAs16 Small time17 Large time8

Money market mutual funds18 Retail19 [nstitution-only

Repurchase agreements and Eurodollars20 Repurchase agreements10

21 Eurodollars10

Debt components22 Federal23 Nonfederal

- 1 5 . 2 '-15.9'-16.9'

3.8'

-4 .54.47.78.45.0

7.918.9

11.05.6

24.1

6.0-2 .9

4.3

13.518.0

6.832.2

.46.6

- 3 . 0 '- 3 . 7 '- 4 . 7 '

6.2'

.35.5'8.17.14.2

7.4'16.9

9.67.1

17.2

1.0-5.2

9.8

16.3'19.7

13.418.6

- .65.9

- 2 . 7 '- 5 . 6 '

7.9'

.9'6.9'

10.29.7'5.7

9.1'20.8

16.33.1

14.1'

1.4- 3 . 5

5.3

16.0'22.0

38.323.4

.97.3'

-1.9-1.8

- .76.9

3.07.9

11.313.76.5

9.721.9

13.6.7

21.7

7.6- . 914.1

19.618.9

32.417.8

.58.5

9.3'7.9'4.9'

10.0'

7.66.8

12.1'12.76.2

6.528.3

13.61.0

20.2'

5.4.0

11.4

5.0'34.5

9.381.0

2.27.6

-4.3-7.1-1.4

6.7

-2.77.4

10.813.66.2

11.120.9

14.6.0

8.7

6.44.2

31.0

23.314.7

53.221.6

.08.3

-20.1-14.0-16.3

3.5

3.19.58.9

12.66.9

11.86.9

13.2- . 231.0

13.6-2.8

2.7

28.712.3

-26.4-30.6

9.5

8.514.59.04.1

5.18.2

14.316.76.9

9.332.5

12.1— .6

40.5

11.6- 5 . 6- 6 . 8

21.622.5

87.6-33.8

1.88.5

-3.9-5.9-4.7

2.1

-1.69.1

10.0

12.812.7

25.9- . 2

-10.9

10.6-10.9

13.8

18.051.7

- 4 . 223.2

1. Unless otherwise noted, rates of change are calculated from average amounts outstand-ing during preceding month or quarter.

2. Figures incorporate adjustments for discontinuities, or "breaks," associated withregulatory changes in reserve requirements. (See also table 1.20.)

3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonallyadjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currencycomponent of the money stock, plus (3) (for all quarterly reporters on the "Report ofTransaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whosevault cash exceeds their required reserves) the seasonally adjusted, break-adjusted differencebetween current vault cash and the amount applied to satisfy current reserve requirements.

4. Composition of the money stock measures and debt is as follows:Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of

depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at allcommercial banks other than those owed to depository institutions, the U.S. government, andforeign banks and official institutions, less cash items in the process of collection and FederalReserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order ofwithdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions,credit union share draft accounts, and demand deposits at thrift institutions. Seasonallyadjusted Ml is computed by summing currency, travelers checks, demand deposits, andOCDs, each seasonally adjusted separately.

M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (timedeposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retailmoney market mutual funds (money funds with minimum initial investments of less than$50,000). Excludes individual retirement accounts (IRAs) and Keogh balances at depositoryinstitutions and money market funds. Seasonally adjusted M2 is calculated by summingsavings deposits, small-denomination time deposits, and retail money fund balances, eachseasonally adjusted separately, and adding this result to seasonally adjusted Ml.

M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2)balances in institutional money funds (money funds with minimum initial investments of$50,000 or more), (3) RP liabilities (overnight and term) issued by all depository institutions,and (4) Eurodollars (overnight and term) held by U.S. residents at foreign branches of US.banks worldwide and at all banking offices in the United Kingdom and Canada. Excludes

amounts held by depository institutions, the U.S. government, money market funds, andforeign banks and official institutions. Seasonally adjusted M3 is calculated by summing largetime deposits, institutional money fund balances, RP liabilities, and Eurodollars, eachseasonally adjusted separately, and adding this result to seasonally adjusted M2.

L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasurysecurities, commercial paper, and bankers acceptances, net of money market fund holdings ofthese assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-termTreasury securities, commercial paper, and bankers acceptances, each seasonally adjustedseparately, and then adding this result to M3.

Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancialsectors—the federal sector (U.S. government, not including government-sponsored enter-prises or federally related mortgage pools) and the nonfederal sectors (state and localgovernments, households and nonprofit organizations, nonfinancial corporate and nonfarmnoncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt andcorporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,which are derived from the Federal Reserve Board's flow of funds accounts, arc break-adjusted (that is, discontinuities in the data have been smoothed into the series) andmonth-averaged (that is, the data have been derived by averaging adjacent month-end levels).

5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retailmoney fund balances, each seasonally adjusted separately.

6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight andterm) of U.S. addressees, each seasonally adjusted separately.

7. Small time deposits—including retail RPs—are those issued in amounts of less than$100,000. All IRA and Keogh account balances at commercial banks and thrift institutionsare subtracted from small time deposits.

8. Large time deposits are those issued in amounts of $100,000 or more, excluding thosebooked at international banking facilities.

9. Large time deposits at commercial banks less those held by money market funds,depository institutions, the U.S. government, and foreign banks and official institutions.

10. Includes both overnight and term.


Money Stock and Bank Credit A5

1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT'

Millions of dollars

Factor

SUPPLYING RESERVE FUNDS

1 Reserve Bank credit outstandingU.S. government securities2

2 Bought outright—System account3

3 Held under repurchase agreementsFederal agency obligations

4 Bought outright5 Held under repurchase agreements6 Acceptances

Loans to depository institutions7 Adjustment credit8 Seasonal credit9 Extended credit

10 Float11 Other Federal Reserve assets

12 Gold stock13 Special drawing rights certificate account14 Treasury currency outstanding

ABSORBING RESERVE FUNDS

15 Currency in circulation16 Treasury cash holdings

Deposits, other than reserve balances, withFederal Reserve Banks

17 Treasury18 Foreign19 Service-related balances and adjustments20 Other21 Other Federal Reserve liabilities and capital22 Reserve balances with Federal Reserve Banks4

SUPPLYING RESERVE FUNDS

1 Reserve Bank credit outstandingU.S. government securities

2 Bought outright—System account3

3 Held under repurchase agreementsFederal agency obligations

4 Bought outright5 Held under repurchase agreements6 Acceptances

Loans to depository institutions7 Adjustment credit8 Seasonal credit9 Extended credit

10 Float11 Other Federal Reserve assets

12 Gold stock13 Special drawing rights certificate account14 Treasury currency outstanding

ABSORBING RESERVE FUNDS

15 Currency in circulation16 Treasury cash holdings

Deposits, other than reserve balances, withFederal Reserve Banks

17 Treasury18 Foreign19 Service-related balances and adjustments20 Other21 Other Federal Reserve liabilities and capital22 Reserve balances with Federal Reserve Banks4 . . .

Average ofdaily figures

1998

Feb.

463,965

427,9882,720

678573

0

51110

44031,505

11,0479,200

25,703

471,834227

4,969178

7,063395

16,1149,135

Mar.

467,483

431,7672,313

6411,245

0

622

0464

31,026

11,0499,200

25,761

473,771254

5,455174

6,993369

16,17610,303'

Apr.

474,691

437,5253,566

584667

0

4440

0449

31.817

11,0499,200

25,823

476,390273

9,708177

6,800375

16,17710,862

End-of-month figures

Feb.

465,614

428.6193,645

6752,107

0

0

0-202

30,757

11,0509.200

25,732

472,029241

5,037243

6,990349

16,25610,449

Mar.

475,593

433,1826,846

6251,450

0

2270

1,502'3K959

11.0499.200

25,788

475.091265

5,490167

6,845'354

15,70817,709'

Apr.

493,052

441,32215.731

5511,955

0

2561

0-467

33,874

11.0489,200

25,858

476,806275

28,014162

6,751360

16,8949,896

Average of daily figure s for week ending on date indicated

1998

Mar. 18

468,358

432,5412,216

6251,478

0

2200

53230,945

11,0499,200

25,760

474,061256

6,294176

6,976372

16,17810,055

Mar. 18

469,283

432.7083,001

6251,220

o2

230

53931,165

11,0499,200

25,760

474,719259

5.745156

6,976357

15.87911.203

Mar. 25

466,500

432,8871,113

625174

0

1926

0455

31,201

11,0499,200

25,774

473,754260

5.181164

7,003357

16,0899,716

Mar. 25

472,764

434,1195,735

6251.045

og

300

-53231.735

11,0499,200

25,774

474,518265

4,819159

7,003364

15,91415,745

Apr. 1

468.254

433,0992.185

625425

0

229

0283

31,606

11,0499,200

25,788

473,863264

5,033179

6,845363

15,89411.850

Apr. 8

467,595

433,534868

625421

0

139300

86631,112

11,0499,200

25,802

475,592261

5,044170

6,906408

15,8639,402

Wednesday figu

Apr. 1

469,995

433,3613,297

6251,028

oo270

68730,969

11,0499,200

25,788

475,338259

3,534186

6,845353

15,39414,123

Apr. 8

471,764

434,4972.025

625983

0

939300

1,2133L452

11,0499,200

25,802

477.247276

4,382162

6,906398

15,98312,459

Apr. 15

471,693

436,4361,899

586787

0

14310

31631,623

11.0489,200

25,816

477,195276

6,218183

6,633383

16,22310,645

res

Apr. 15

476,995

440.2773,095

5651,958

o2

370

-29631.358

11.0489,200

25,816

478,416277

9.457163

6,633344

16,10711,662

Apr. 22

476,123

440,6022,338

565687

0

14430

30831,566

11,0499,200

25,830

476.953277

7,894185

6,859349

16,32813,356

Apr. 22

487,623

441,82410,225

5652,617

0

9647

0-344

32,594

11,0499,200

25,830

477,306278

12,950162

6,859350

16,15619,641

Apr. 29

481,399

439,5807.459

559536

0

15530

40332,795

11,0499,200

25,844

475,910277

17,944173

6.803366

16.3049.715

Apr. 29

506,805

442,40626,047

5511,808

0

4560

65635,278

11,0489,200

25,844

477,038275

41.801199

6,801343

16.13510,304

1. Amounts of cash held as reserves are shown in table 1.12, line 2.2. Includes securities loaned—fully guaranteed by U.S. government securities pledged

with Federal Reserve Banks—and excludes securities sold and scheduled to be bought backunder matched sale-purchase transactions

3. Includes compensation that adjusts for the effecis of inflation on the principal ofinflation-indexed securities.

4. Excludes required clearing balances and adjustments lo compensate for float.



1.12 RESERVES AND BORROWINGS Depository Institutions1

Millions of dollars

Reserve classification

1 Reserve balances with Reserve Banks2

2 Total vault cash

4 Surplus vault cash5 Total reserves6

7 Excess reserve balances at Reserve Banks8 Total borrowings at Reserve Banks8

10 Extended credit'

1 Reserve balances with Reserve Banks2

2 Total vaull cash"

4 Surplus vault cashs

6 Required reserves7 Excess reserve balances at Reserve Banks7

8 Total borrowings at Reserve Banks8

10 Extended credit9

Prorated monthly averages of biweekly averages

1995

Dec.

20,44042,281'37,460

4,821'57,90056,622

1,27825740

0

1996

Dec.

13,39544,525'37,8486,678'

51.24349,819

1.424155680

1997

Dec.

10,67344,707'37,2067.50O'

47,88046,196

1,683324790

1997

Oct.

9,99042,211'35,631

6,581'45.62144.225

1,396270227

0

Nov.

10,55942,851'35,8926,959'

46,45144,834

1.617153115

0

Dec.

10,67344,707'37,2067,500'

47,88046,196

1,683324790

1998

Jan.

9,73347,336'37,7629,574'

47,49545,714

1,780210

180

Feb.

9,39443,167'35,5807,587'

44,97443,450

1,52458120

Mar.'

10,14041,59835,3706,228

45,50944,193

1,31641220

Apr.

11,05541,21635,3595,857

46,41445,025

1,3887241

0

Biweekly averages of daily figures for two week periods ending on dates indicated

1997

Dec. 31

11,59544,795'37,6927,103'

49,28647,403

1,883454

710

1998

Jan. 14

11,50045,695'37,9767,719'

49,47647,659

1,817209

220

Jan. 28

8,17649,444'37,82711,617'46,00344,213

1.790242

160

Feb. 11

8.75045,165'36,462

8,703'45,21243,648

1.5636790

Feb. 25

9.72641,804'34,8926,912'

44,61843,132

1,48559130

Mar. 11

10,21042,202'35,5556,647'

45,76544,209

1,55619170

Mar. 25

9,87841,199'35,154

6,046'45,03143,893

1,13834230

Apr. 8r

10,62341.42035,5345,886

46,15744,865

1,291101300

Apr. 22

11,99140,81535,1845,631

47.17545,674

1,50151370

May 6

9,85041,71535,4896,226

45.33944,052

1,28781610

1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. Forordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted.

2. Excludes required clearing balances and adjustments to compensate for float andincludes other off-balance-sheet "as-of" adjustments.

3. Total "lagged" vault cash held by depository institutions subject to reserverequirements. Dates refer to the maintenance periods during which the vault cash may be usedto satisfy reserve requirements- The maintenance period for weekly reporters ends sixteendays after the lagged computation period during which the vault cash is held. Before Nov. 25,1992, the maintenance period ended thirty days after the lagged computation period.

4. All vault cash held during the lagged computation period by "bound" institutions (thatis, those whose required reserves exceed their vault cash) plus the amount of vault cashapplied during the maintenance period by "tionbound" institutions (that is, those whose vaultcash exceeds their required reserves) to satisfy current reserve requirements.

5. Total vault cash (line 2) less applied vault cash (line 3).6. Reserve balances with Federal Reserve Banks (line 1) plus applied vaull cash

(line 3).7. Total reserves (line 5) less required reserves (line 6).8. Also includes adjustment credit.9. Consists of borrowing at the discount window under the terms and conditions estab-

lished for the extended credit program to help depository institutions deal with sustainedliquidity pressures. Because there is not the same need to repay such borrowing promptly aswith traditional short-term adjustment credit, the money market effect of extended credit issimilar to that of nonborrowed reserves.


Policy Instruments A7

1.14 FEDERAL RESERVE BANK INTEREST RATES

Percent per year

Current and previous levels

Federal ReserveBank

Adjustment credit1

On6/15/98

Effective date

Seasonal credit

On6/15/98 Hffective date

Extended credit

On6/15/98

Effective date

BostonNew YorkPhiladelphia -ClevelandRichmond. . . .Atlanta

ChicagoSt. LouisMinneapolis . .Kansas City . .DallasSan Francisco. 5.00

2/1/961/31/961/31/961/31/962/1/961/31/96

2/1/962/5/961/31/962/1/961/31/961/31/96

6/4/98 6/4/98

5.25 5.55 6/4/98 6.05 6/4/98 6.05

Range of rates for adjustment credit in recent years

Effective date

In effect Dec. 31. 1977

1978—Jan 920

May 1112

July 110

Aue. 21Sept. 22Oct. 16

20Nov 1

3

1979—July 20Aug. 17

20Sept. 19

21Oct. 8

10

1980—Feb. 1519

May 2930

June 1316

July 2829

Sept. 26Nov. 17Dec. 5

81981—May 5

8

Range (orlevel)—AllF.R. Banks

6

6-6.56.5

6.5-77

7-7.257.257.75

88-8.58.5

8.5-9.59.5

101(1-10.5

10.510.5-11

1111-12

12

12-1313

12-1312

11-1211

10-11101112

12-1313

13-1414

F.R. Bankof

N.Y.

6

6.56.5777.257.257.7588.58.59.59.5

1010.510.511111212

13131312] l111010II1213131414

Effective date

1981—Nov. 26

Dec. 4

1982—July 2023

Aug. 23

162730

Oct 1213

Nov. 2226

Dec. 141517

1984— Apr. 913

Nov. 2126

Dec. 24

1985—May 2024

1986—Mar. 710

Apr. 2123

July 11Aug. 21

22

1987—Sept. 4II


13-141312

11.5-1211.5

11-11.511

10.510-10.5

109.5-10

9.59-95

98.5-98.5-9

8.5

8.5-99

8.5-98.58

7.5-87.5

7-7.57

6.5-76.56

5.5-65.5

5.5-66

F.R. Bankof

N.Y.

131312

11.511.5111110.510109.59.59998.58.5

998.58.58

7.57.5

776.56.565.55.5

66

Effective date

1988—Aug. 911

1989—Feb. 2427

1990—Dec. 19

1991—Feb. 14

Apr. 30May 2Sept. 13

17Nov. 6

7Dec. 20

24

1992—July 27

1994—May 1718

Aug 1618

Nov. 1517

1995—Feb. 19

1996—Jan. 31Feb. 5

In effect June 15. 1998


6-6.56.5

6.5-77

6.5

6-6.56

5.5-65.5

5-5.55

4.5-54.5

3.5-4.53.5

3-3.53

3-3.53.5

3 5-44

4-4.754.75

4.75-5.255.25

5.00-5.255.00

5.00

F.R. Bankof

N.Y

6.56.5

77

6.5

66555.5554.54.53 53.5

33

3.53.5444.754.75

5.255.25

5.005.00

5.00

1. Available on a short-term basis to help depository institutions meei temporary needs forfunds that cannot be met through reasonable alternative sources. The highest rale establishedfor loans to depository institutions may be charged on adjustment credit loans of unusual sizethat result from a major operating problem at the borrower's facility.

2. Available to help relatively small depository institutions meet regular seasonal needs forfunds that arise from a clear pattern of intrayearly movements in their deposits and loans andthat cannot be met through special industry lenders. The discount rate on seasonal credit takesinto account rates charged by market sources of funds and ordinarily is reestablished on thefirst business day of each two-week reserve maintenance period; however, it is never less thanthe discount rate applicable to adjustment credit.

3. May be made available to depository institutions when similar assistance is notreasonably available from other sources, including special industry lenders. Such credit maybe provided when exceptional circumstances (including sustained deposit drains, impairedaccess to money market funds, or sudden deterioration in loan repayment performance) orpractices involve only a particular institution, or to meet the needs of institutions experiencingdifficulties adjusting to changing market conditions over a longer period (particularly at timesof deposit disintermediation). The discount rate applicable to adjustment credit ordinarily ischarged on extended-credit loans outstanding less than thirty days, however, at the discretion

of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, aflexible rate somewhat above rates charged on market sources of funds is charged. The rateordinarily is reestablished on the first business day of each two-week reserve maintenanceperiod, but it is never less than the discount rate applicable to adjustment credit plus 50 basispoints.

4. For earlier data, see the following publications of the Board of Governors: Banking andMonetary Statistics, 19I4-/Q4I, and I94I-/97O; and the Annual Statistical Digest. 1970-1979,

In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment creditborrowings by institutions with deposits of $500 million or more that had borrowed insuccessive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge wasin effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposedon Nov. 17. 1980: the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to4 percent on May 5, 1981. The surcharge was reduced io 3 percent effective Sept. 22, 1981.and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981. the formula for applying thesurcharge was changed from a calendar quarter Io a moving thirteen-week period. Thesurcharge was eliminated on Nov. 17, 1981.



1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1

Type of deposit

Net transaction accounts1 $0 miMion-$47.8 million3

2 More than $47.8 million4

3 Nonpersonal time deposits5

4 Eurocurrency liabilities6

Requirement

Percentage ofdeposits

310

0

0

Effective date

1/1/98

1/1/98

12/27/90

12/27/90

1. Required reserves must be held in the form of deposits with Federal Reserve Banksor vault cash. Nonmember institutions may maintain reserve balances with a FederalReserve Bank indirectly, on a pass-through basis, with certain approved institutions. Forprevious reserve requirements, see earlier editions of the Annual Report or the FederalReserve Bulletin. Under the Monetary Control Act of 1980, depository institutionsinclude commercial banks, mutual savings banks, savings and loan associations, creditunions, agencies and branches of foreign banks, and Edge Act corporations.

2. Transaction accounts include all deposits against which the account holder is permittedto make withdrawals by negotiable or transferable instruments, payment orders of with-drawal, or telephone or preauthorized transfers for the purpose of making payments to thirdpersons or others. However, accounts subject to the rules that permit no more than sixpreauthorized, automatic, or other transfers per month (of which no more than three may beby check, draft, debit card, or similar order payable directly to third parties) are savingsdeposits, not transaction accounts.

3. The Monetary Control Act of 1980 requires that the amount of transaction accountsagainst which the 3 percent reserve requirement applies be modified annually by 80 percent ofthe percentage change in transaction accounts held by all depository institutions, determinedas of June 30 of each year. Effective with the reserve maintenance period beginning January 1,1998, for depository institutions that report weekly, and with the period beginning January 15,1998, for institutions that report quarterly, the amount was decreased from $49.3 million to$47.8 million.

Under the Garn-St Germain Depository Institutions Act of 1982, the Board adjusts theamount of reservable liabilities subject to a zero percent reserve requirement each year for the

succeeding calendar year by 80 percent of the percentage increase in die total reservableliabilities of all depository institutions, measured on an annual basis as of June 30. Nocorresponding adjustment is made in the event of a decrease. The exemption applies only toaccounts that would be subject to a 3 percent reserve requirement. Effective with the reservemaintenance period beginning January 1, 1998, for depository institutions that report weekly,and with Ihe period beginning January 15, 1998, for institutions that report quarterly, theexemption was raised from $4.4 million to $4.7 million.

4. The reserve requirement was reduced from 12 percent to 10 percent onApr. 2, 1992. for institutions that report weekly, and on Apr. 16, 1992, for institutions thatreport quarterly.

5. For institutions that report weekly, the reserve requirement on nonpersonal time depositswith an original maturity of less than 1 ]A years was reduced from 3 percent to 1 '/5 percent forthe mainlenance period that began Dec. 13, 1990. and to zero for the maintenance period thatbegan Dec. 27, 1990. For institutions that report quarterly, the reserve requirement onnonpersonal time deposits with an original maturity of less than ] ]/i years was reduced from 3percent to zero on Jan. 17, 1991.

The reserve requirement on nonpersonal time deposits with an original maturity of 1 l/iyears or more has been zero since Oct. 6, 1983.

6. The reserve requirement on Eurocurrency liabilities was reduced from 3 perceni to zeroin the same manner and on Ihe same dates as Ihe reserve requirement on nonpersonal timedeposits with an original maturity of less than I '/> years (see note 5).


1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS'

Millions of dollars

Policy Instruments A9

Type of transactionand maturity

Sept.

1998

Mar.

U.S. TREASURY SECURITIES2

Outright transactions (excluding matchedtransactions)

Treasury bills1 Gross purchases2 Gross sales3 Exchanges4 For new bills5 Redemptions

Others within one year6 Gross purchases7 Gross sales8 Maturity shifts9 Exchanges

10 RedemptionsOne to five years

11 Gross purchases12 Gross sales13 Maturity shifts14 Exchanges

Five to ten years15 Gross purchases16 Gross sales17 Maturity shifts18 Exchanges

More lhan ten years19 Gross purchases20 Gross sales21 Maturity shifts22 Exchanges

All maturities23 Gross purchases24 Gross sales25 Redemptions

Matched transactions26 Gross purchases27 Gross sales

Repurchase agreements28 Gross purchases29 Gross sales

30 Net change in U.S. Treasury securities

FEDERAL AGENCY OBLIGATIONS

Outright transactions31 Gross purchases32 Gross sales33 Redemptions

Repurchase agreements34 Gross purchases35 Gross sales

36 Net change in federal agency obligations

37 Total net change in System Open Market Account.

10.9320

405.296405,296

900

3900

43,574-35,407

1,776

5,3660

-34,64626.387

1,4320

-3,0937,220

2.5290

-2,2531,800

20,6490

2,676

2,197,7362,202,030

331,694328.497

16,875

00

1.003

36.85136,776

-928

15,948

9,9010

426,928426,928

0

5240

30,512-41,394

2.015

3,8980

-25,02231,459

1,1160

-5,4696,666

1,6550

-203.270

17,0940

2,015

3,092,3993,094,769

457.568450,359

00

409

75,35474,842

103

20,021

9.1470

419,347418,997

0

5,7480

43,473-27,499

1,996

20,2990

-39,74420,274

3,1010

-1,9545,215

5,8270

-1,7752,360

44,1220

1,996

3,586,5843.588,905

810.485809,268

41,022

00

1,540

160,409159,369

-500

40,522

00

28,32828,328

0

6440

1,596-2.382

0

2.6970

-1,5962,382

0000

0000

3,34100

311.153312.083

77,10974,960

4,560

00

105

9,79611,196

-1,505

3,055

00

39,31339,313

0

00

3,193-1,267

416

00

-3,1931,267

770000

648000

1,4180

416

316,425318,485

75,32378,157

-3,893

00

215

15,63915,157

267

-3,626

00

33,48533,485

0

1,4620

5.231-4,126

0

3,3230

-4,8831,651

4850

311,295

9540

-3791,180

6,22400

272,474269,586

73,61873,064

9,666

00

26

23,05420,976

2,052

11,718

4,5450

26,90526,905

0

1,9470

1,748-2,329

0

4,4710

-1,7482.329

613000

1,214000

12,79000

353,726355,668

97,93287,160

21,620

20,05621,186

-1,130

20,490

00

41,73141,731

2,000

00

3,447-400

478

00

-3,4470

000

400

0000

00

2,478

332,581332,795

45,544'65,932

-23,079'

12,488'13,872'

-1,384'

-24,463r

00

29,29029,290

0

00

6,098-6,128

0

00

-3,2133,383

00

-2,8841,420

000

1,325

000

326.812326.245

33,42830,583

3,412

9,615

8,776

829

4,241

00

28,18028,180

0

00

1,964-5.736

0

3,7630

-1.9645,736

283000

743000

4,78900

364,307364,537

40,21137,010

7,760

00

50

17,68518,342

-707

7,053

1. Sales, redemptions, and negative figures reduce holdings of the System Open MarketAccount; all other figures increase such holdings.

2. Transactions exclude changes in compensation for the effects of inflation on the principalof inflation-indexed securities.



1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1

Millions of dollars

Wednesday

Apr. 1 Apr. i Apr. 15 Apr. 22 Apr. 29 Apr. 30

1 Gold certificate account2 Special drawing rights certificate account3 Coin

Loans4 To depository institutions5 Other6 Acceptances held under repurchase agreements

Federal agency obligations7 Bought outright8 Held under repurchase agreements

9 Total U.S. Treasury securities

10 Bought outright11 Bills12 Notes13 Bonds14 Held under repurchase agreements

15 Total loans and securities

16 Items in process of collection.17 Bank premises

Other assets18 Denominated in foreign currencies19 All other"

20 Total assets

LIABILITIES

21 Federal Reserve notes

22 Total deposits

23 Depository institutions24 U.S. Treasury—General account25 Foreign—Official accounts26 Other

27 Deferred credit items28 Other liabilities and accrued dividends5

29 Total liabilities .

CAPITAL ACCOUNTS

30 Capital paid in31 Surplus32 Other capital accounts

Consolidated condition statement

33 Total liabilities and capital accounts

MEMO34 Marketable U.S. Treasury securities held in custody for

foreign and international accounts

35 Federal Reserve notes outstanding (issued to Banks)36 LESS: Held by Federal Reserve Banks37 Federal Reserve notes, net

Collateral held against notes, net38 Gold certificate account39 Special drawing rights certificate account40 Other eligible assets41 U.S. Treasury and agency securities

42 Total collateral

11,0499,200

520

2800

6251,028

436,658

433,361195,437176,43661,488

3,297

438,339

8,0151,280

16,71212,926

498,041

450,329

24,800

20,7273,534

186353

7,5174,601

487,248

5,4715,202

120

498,041

613,724

553,602103,272450,329

11,0499,200

0430,080

450,329

11,0499,200

510

96900

436^22

434,497195,203177,80661,488

2,025

439,099

8,4831,283

16,72013,434

499,778

452,232

24,547

19,6044,382

162

7,0164,761

488,556

5,4885,215

519

499,778

617,213

11,0489,200

483

3900

5651,958

443,372

440,277199.660178,70461,913

3.095

445,934

7,6291,283

16,72813,327

505,633

453,360

28,891

18,9279,457

163344

7,2754,794

494,320

5,5045,220

589

505,633

611,049

11,0499,200

472

14300

5652,617

452,049

441,824199,325180,58561,91310,225

455,373

7,3221,285

16,73614,573

516,008

452,225

40,525

27,06312.950

162350

7,1014,807

504,659

5,4735,220

656

516,008

606,551

11,0489,200

457

6000

5511.808

468,453

442,406199,906180,58661,91326,047

470,871

7,7431,284

16,74417,243

534491

451,926

59,716

17,37241,801

199343

6,8144,838

523,294

5,4755.220

602

534^91

604,030

11,0509,200

588

1300

6752,107

432,264

428,619195,488172,40060,7323,645

435,058

4.4881,275

17,20312,327

491,188

23,155

17,5255,037

243349

4,6524,696

479,628

5,4785,220

861

491,188

605,360

11,0499,200

527

2900

6251,450

440,028

433,182195,258176,43661,488

6,846

442,131

9,6911,279

16,71113,930

504419

450,095

30,456

24,4455,490

167354

8,2604,601

493,412

5,4715,202

434

504,519

613,236

Federal Reserve note statement

555,850103,618452,232

11,0499,200

0431,983

452,232

557,413104,053453,360

11,0489,200

0433,112

453,360

558,999106,773452,225

11,0499,200

0431,977

452,225

560,370108,444451,926

11,0489,200

0431,677

451,926

549,260102,133447,126

11,0509,200

0426,876

447,126

553,090102,995450,095

11,0499,200

0429,846

450,095

11,0489,200

463

8600

5511,955

457,053

441,322198,823180,58661,91315,731

459,645

4,9971,284

17,13215,417

519,187

451,687

45,106

16,57028,014

162360

5,5005,155

507,449

5,4755,2201,043

519,187

604,758

560,384108,697451,687

11,0489,200

0431,438

451,687

1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statisticalrelease. For ordering address, see inside front cover.

2. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged withFederal Reserve Banks—and includes compensation that adjusts for the effects of inflation onthe principal of inflation-indexed securities. Excludes securities sold and scheduled to bebought back under matched sale-purchase transactions.

3. Valued monthly at market exchange rates.4. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury

bills maturing within ninety days.5. Includes exchange-translation account reflecting the monthly revaluation at market

exchange rates of foreign exchange commitments.


1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding

Millions of dollars

Federal Reserve Banks Al l

Type of holding and maturity

Wednesday

Apr. 1 Apr. ! Apr. 15 Apr. 22 Apr. 29

End of month

Feb. 28 Apr. 30

1 Total loans

2 Within fifteen days'

3. Sixteen days to ninety days

4 Total US. Treasury securities2

5 Within fifteen days'6 Sixteen days to ninety days7 Ninety-one days to one year8 One year to five years9 Five years to ten years

10 More than ten years11 Total federal agency obligations

12 Within fifteen days'13 Sixteen days to ninely days14 Ninety-one days to one year15 One year to five years16 Five years to ten years17 More than ten years

28

226

436,658

16,99696,876135,19097,09440.12650,376

1,653

1,08814

17512622525

969

94227

436422

10,05296,949

141,92397,09540,12650,376

1,608

1,04314

175126225

25

1821

443,372

16,26791,991

146,58297,13540.62150,776

2,523

1,9720

17512622525

143

1376

452,049

23,18893,096

145,35199,01540,62250,776

3,182

2,6310

175126225

25

60

564

468,453

41,30397,214

139,52199,01640.62250,776

2,359

1,8080

175126225

25

62

566

432,264

12,674103,213132,59994,30539,84149,633

2,782

2,15744

150151255

25

29

1712

440,028

20,42394,170

137,83897,09540,12650,376

2,075

1,51014

17512622525

86

6224

457,364

21,35091,141

154,70398,77240,62250,777

2409

1,6580

175126225

25

1. Holdings under repurchase agreements are classified as maturing within fifteen days inaccordance with maximum maturity of the agreements.

2. Includes compensation that adjusts for the effects of inflation on the principal ofinflation-indexed securities.



1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1

Billions of dollars, averages of daily figures

ADJUSTED FORCHANGES IN RESERVE REQUIREMENTS2

1 Total reserves3

3 Nonborrowed reserves plus extended credit5

4 Required reserves5 Monetary base6

6 Total reserves7

7 Nonborrowed reserves8 Nonborrowed reserves plus extended credit

10 Monetary base

NOT ADJUSTED FORCHANGES IN RESERVE REQUIREMENTS10

12 Nonborrowed reserves13 Nonborrowed reserves plus extended credit5

14 Required reserves15 Monetary base12

17 Borrowings from the Federal Reserve

1994Dec.

1995Dec.

1996Dec

1997Dec'

1997'

Sept. Oct. Nov. Dec.

1998

Jan.' Feb. Mar.' Apr.

Seasonally adjusted

59.41'59.2059.2058.24

418.12'

61.1360.9260.9259 96

422.51

61 3461.1361.1360.17

427.251 17.21

56.40'56.14'56.14'55.12'

434.17'

58.0257.7657.7656 74

439.03

57 9057.6457.6456.62

444.451 28.26

50.08'49.93'49.93'48.66'

452.38'

51.5251.3751.3750.10

456.72

51 2451.0951.0949.82

463.491 42.16

46.6746.3546.3544.99

480.15

47.9747.6547.6546 29

485.11

47 8847.5647.5646.20

491.921 68.32

46.2445.8045.8044.94

469.41

45.9645.6945.6944.56

471.98

Not seasona

46.1345.6945.6944.83

468.37

46 0645.6245.6244.76

475.321 30.44

45.6945.4245.4244 30

470.41

45 6245.3545.3544.23

477.281 40.27

46.3146.1646.1644.69

476.19

46.6746.3546.3544.99

480.15

Uy adjusted

46.5346.3846.3844.91

476.62

46.4546.3046.3044.83

483.501.62.15

47.9747.6547.6546 29

485.11

47 8847.5647.5646.20

491.921 68.32

46.5046.2946.2944.72

482.85

47.4947.2847.2845.71

484.42

47.5047.2947.2945.71

491.621.78.21

45.72'45.66'45.66'44.20'

484.24'

46.0546.0146.0144.73

485.90

44.99'44.9444.9443.47

481.36'

44 9744.9244.9243.45

488.431 52.06

45.5545.5045.5044.23

484.04

45.5145.4745.4744.19

491.001 32.04

45.9045.8345.8344.51

486.74

46.4646.3946.3945.08

486.91

46.4146.3446.3445.03

493.661 39.07

1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weeklystatistical release. Historical data starting in 1959 and estimates of the effect on requiredreserves of changes in reserve requirements are available from the Money and ReservesProjections Section, Division of Monetary Affairs, Board of Governors of the Federal ReserveSystem, Washington, DC 20551.

2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatorychanges in reserve requirements. (See also table 1.10.)

3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break-adjusted required reserves (line 4) plus excess reserves (line 16).

4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted,break-adjusled total reserves (line 1) less total borrowings of depository institutions from theFederal Reserve (line 17).

5. Extended credit consists of borrowing at the discount window under the terms andconditions established for the extended credit program to help depository institutions dealwith sustained liquidity pressures. Because there is not the same need to repay suchborrowing promptly as with traditional short-term adjustment credit, the money market effectof extended credit is similar to that of nonborrowed reserves.

6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonallyadjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currencycomponent of the money stock, plus (3) (for all quarterly reporters on the "Report ofTransaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporterswhose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusteddifference between current vault cash and the amount applied to satisfy current reserverequirements.

7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excessreserves (line 16).

8. To adjust required reserves for discontinuities that are due to regulatory changes inreserve requirements, a multiplicative procedure is used to estimate what required reserveswould have been in past periods had current reserve requirements been in effect. Break-adjusted required reserves include required reserves against transactions deposits and nonper-sonal time and savings deposits (but not reservable nondeposit liabilities).

9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus(2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterlyreporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for allthose weekly reporters whose vault cash exceeds their required reserves) the break-adjusteddifference between current vault cash and the amount applied to satisfy current reserverequirements.

10. Reflects actual reserve requirements, including those on nondeposit liabilities, with noadjustments to eliminate the effects of discontinuities associated with regulatory changes inreserve requirements.

11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserverequirements.

12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) totalreserves (line 11), plus (2) required clearing balances and adjustments to compensate for floatat Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (forall quarterly reporters on the "Report of Transaction Accounts, Other Deposits and VaultCash and for all those weekly reporters whose vault cash exceeds their required reserves) thedifference between current vault cash and the amount applied to satisfy current reserverequirements. Since the introduction of contemporaneous reserve requirements in February1984, currency and vault cash figures have been measured over the computation periodsending on Mondays.

13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).


Monetary and Credit Aggregates A13

1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES'

Billions of dollars, averages of daily figures

1994Dec.

1995Dec.

1996Dec.

1997Dec.

1998'

Jan. Feb. Mar. Apr.

Seasonally adjusted

1,150.73,503.04,333.65,315.8

12,998.7

354.38.5

384.0403.9

2,352.3830.6

752.6503.2298.7

397.3314.264.7

385.0203.1

183.380.8

3,491.99,506.7

1,128.73,651.24,595.65,702.2

13,699.2

372.48.9

391.0356.4

2,522.6944.4

775.0575.8345.4

359.7357.2

74.2

454.9253.9

182.488.6

3,638.510,060.7

1,082.83.826.14,935.56,088.3

14,419.9

394.98.6

403.6275.9

2,743.21,109.4

904.8594.5413.2

366.9354.378.0

522.8310.3

194.2113.7

3,780.010,639.9

1,076.04,041.3r

5,383.7'6,626.9'

15,151.6'

425.58.2

397.1245.2'

2,965.3'1.342.4

1,020.9621.6495.9'

376.6343.6

85.2

602.6'376.2

234.8150.3

3,797.311,354.3'

1,073.64,066.35,432.16,701.9

15,230.0

427.58.2

392.7245.2

2,992.71,365.8

1,033.3621.6499.5

378.6344.887.4

614.3380.8

245.2153.0

3,797.411,432.5

1,076.44,098.65,472.26 772 4

15,317.9

431.08.1

391.9245.5

3,022.11,373.7

1,044.7621.5512.4

382.9344.087.6

629.0384.7

239.8149.1

3,794.911,523.0

1,081.04,126.65,537.56,866.6

15,405.6

432.48.1

391.1249.5

3.045.61,410.9

1,055.2621.2529.7

386.6342.4

87.1

640.3391.9

257.3144.9

3,800.511,605.1

1,079.64,157.85.583.7

n.a.n.a.

433.78.0

387.3250.5

3,078.21,425.8

1,078.0621.1524.9

390.0339.388.1

649.9408.8

256.4147.7

n.a.n.a.

Not seasonally adjusted

1,174.43,523.44,353.25,344.6

13,000.6

357.58.1

400.3408.6

2,349.0829.7

751.7501.5298.9

396.8313.264.8

385.9204.6

179.681.8

3,499.09.501.6

1,152.43,672.04,615.25,732.7

13,699.8

376.28.5

407.2360.5

2,519.6943.2

774.1573.8345.8

359.2355.974.3

456.4255.8

178.089.4

3,645.910.053.9

1,104.93,845.44,953.46,116.4

14,419.3

397.98.3

419.9278.8

2,740.51,108.0

903.3592.7413.6

366.4353.278.1

524.8312.7

188.8114.7

3,787.910.631.3

1,097.54,060.2'5,401.0'6,652.8'

15,150.8'

429.07.9

412.9247.7'

2,962.7'1,340.7

1,019.0620.0496.3

375.9342.785.3

605.1'378.9

228.2152.0

3,805.811.345.0'

1.079.04,068.15,436.26,703.7

15.210.2

426.47.9

396.2248.5

2,989.21,368.1

1,029.0621.2492.0

377.0344.686.0

617.3389.8

244.0156.3

3,792.511,417.7

1,063.94,085.25,470.16,764.6

15,279.1

428.97.8

383.0244.1

3,021.41,384.9

1,040.2621.8508.9

381.2344.2

87.0

634.0397.7

239.8151.4

3.795.311,483.7

1.074.54,137.85,556.36,889.8

15.379.5

431.57.9

385.3249.9

3.063.31,418.5

1,060.2621.5528.3

388.4342.6

86.9

650.5400.2

256.2146.9

3,820.711,558.8

1,085.04,178.65,598.2

n.a.n.a.

433.77.9

387.5255.9

3,093.61,419.7

1,083.3621.8521.4

391.9339.7

87.5

656.9405.8

256.8148.2

n.a.n.a.

Measures1 Mi2 M23 M34 L5 Debt

Ml components6 Currency3

7 Travelers checks4

8 Demand deposits5

9 Other checkable deposits6


11 In M3 only8

Commercial banks12 Savings deposits, including MMDAs.. .13 Small time deposits14 Large time deposits10- l l

Thrift institutions15 Savings deposits, including MMDAs.. .16 Small time deposits9

17 Large time deposits

Money market mutual funds18 Retail19 Institution-only


21 Eurodollars12

Debt components22 Federal debt23 Nonfederal debt

Measures24 Ml25 M226 M327 L28 Debt

MJ components29 Currency"30 Travelers checks4

31 Demand deposits5

32 Other checkable deposits6


34 In M3 only8

Commercial banks35 Savings deposits, including MMDAs.,.36 Small time deposits9

37 Large time deposits10' ' '

Thrift institutions38 Savings deposits, including MMDAs, . .39 Small time deposits9

40 Large time deposits10

Money market mutual funds41 Retail42 Institution-only


44 Eurodollars

Debt components45 Federal debt46 Nonfederal debt

Footnotes appear on following page.



NOTES TO TABLE 1.21

1. Latest monthly and weekly figures are available from the Board's H.6 (508) weeklystatistical release. Historical data starting in 1959 are available from the Money and ReservesProjections Section, Division of Monetary Affairs, Board of Governors of the Federal ReserveSystem, Washington, DC 20551.

2. Composition of the money stock measures and debt is as follows:Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of

depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at allcommercial banks other than those owed to depository institutions, the U.S. government, andforeign banks and official institutions, less cash items in the process of collection and FederalReserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order ofwithdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions,credit union share draft accounts, and demand deposits at thrift institutions. Seasonallyadjusted Ml is computed by summing currency, travelers checks, demand deposits, andOCDs, each seasonally adjusted separately.

M2: Ml plus (I) savings deposits (including MMDAs), (2) small-denomination timedeposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3)balances in retail money market mutual funds (money funds with minimum initial invest-ments of less lhan $50,000). Excludes individual retirement accounts (IRAs) and Keoghbalances at depository institutions and money market funds. Seasonally adjusted M2 iscalculated by summing savings deposits, small-denomination time deposits, and retail moneyfund balances, each seasonally adjusted separately, and adding diis result to seasonallyadjusted Ml.

M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more)issued by all depository institutions, (2) balances in inslilutional money funds (money fundswith minimum initial investments of $50,000 or more). (3) RP liabilities (overnight and term)issued by all depository institutions, and (4) Eurodollars (overnight and term) held by US.residents at foreign branches of U.S. banks worldwide and at all banking offices in the UnitedKingdom and Canada. Excludes amounts held by depository institutions, the U.S. govern-ment, money market funds, and foreign banks and official institutions. Seasonally adjustedM3 is calculated by summing large time deposits, institutional money fund balances, RPliabilities, and Eurodollars, each seasonally adjusted separately, and adding this result toseasonally adjusted M2.

L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasurysecurities, commercial paper, and bankers acceptances, net of money market fund holdings of

these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-termTreasury securities, commercial paper, and bankers acceptances, each seasonally adjustedseparately, and then adding this result to M3.

Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancialsectors—the federal sector (U.S. government, not including government-sponsored enter-prises or federally related mortgage pools) and the nonfederal sectors (state and localgovernments, households and nonprofit organizations, nonfinancial corporate and nonfarmnoncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt andcorporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,which are derived from the Federal Reserve Board's flow of funds accounts, are break-adjusted (that is, discontinuities in the data have been smoothed into the series) andmonth-averaged (that is, the data have been derived by averaging adjacent month-end levels).

3. Currency outside the US. Treasury, Federal Reserve Banks, and vaults of depositoryinstitutions.

4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers.Travelers checks issued by depository institutions are included in demand deposits.

5. Demand deposits at commercial banks and foreign-related institutions other than thoseowed to depository institutions, the U.S. government, and foreign banks and official institu-tions, less cash ilems in the process of collection and Federal Reserve float.

6. Consists of NOW and ATS account balances at all depository institutions, credit unionshare drafi account balances, and demand deposits at thrift institutions.

7. Sum of (1) savings deposits (including MMDAs), (2) small lime deposits, and (3) retailmoney fund balances.

8. Sum of (1) large time deposits, (2) institutional money fund balances. (3) RP liabilities(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight andterm) of US. addressees.

9. Small time deposits—including retail RPs—are those issued in amounts of less than$100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions aresubtracted from small time deposits.

10. Large time deposits are those issued in amounts of $100,000 or more, excluding thosebooked at international banking facilities.

11. Large time deposits at commercial banks less those held by money market funds,depository institutions, the US. government, and foreign banks and official institutions.

12. Includes both overnight and term.


Commercial Banking Institutions—Assets and Liabilities A15

1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1

A. All commercial banks

Billions of dollars

Monthly averages

Apr. Apr.

Wednesday figures

Apr. 8 Apr. 15 Apr. 22 Apr. 29

Seasonally adjusted

Assets1 Bank credit2 Securities in bank credit3 U.S. government securities . . .4 Other securities5 Loans and leases in bank credit2

6 Commercial and industrial . . .7 Real estate8 Revolving home equity9 Other

10 Consumer11 Security1

12 Other loans and leases13 Interbank loans14 Cash assets4

15 Other assets5

16 Total assels6

Liabilities17 Deposits18 Transaction19 Nontransaction20 Large time21 Other22 Borrowings23 From banks in the U.S24 From others25 Net due to related foreign offices26 Other liabilities

27 Total liabilities

28 Residual (assets less liabilities)7. . .

Assets29 Bank credit30 Securities in bank credit31 U.S. government securities32 Other securities33 Loans and leases in bank credit2 . . .34 Commercial and industrial35 Real estate36 Revolving home equity37 Other38 Consumer39 Security3


43 Other assets5

44 Total assets6



56 Residual (assets less liabilities)7

MEMO57 Revaluation gains on off-balance-sheet

items8

58 Revaluation losses on off-balance-sheet items8

3.889.1'1,019.2

711.8'307.4'

2,869.9806.6'

1,170.089.3

1,080.7514.5

89.7289.2'212.3247.0277.0

4368.9'

2.947.2700.7

2,246.5568.5'

1.678.01

763.1'316.8'446.2'210.9272.1'

4,1933'

375.6'

4,025.31,044.6

731.0313.6

2,980.7841.2

1,217.596.4

1,121.1507.7104.2310.1200.9265.9289.3

4,725.0

3.065.7685.5

2,380.2620.2

1,760.0800.8292.7508.0196.4282.1

4345.0

380.0

4,067.81,076.1

742.1334.0

2.991.7844.0

1,225.797.2

1,128.5507.2

99.3315.5206.1277.4294.5

4,7893

3,105.3693.0

2,412.3633.5

1,778.8814.6300.2514.4192.3292.9

4,405.1

384.2

1,083.0746.5336.5

3,005.8851.8

1,229.398.0

1,131.3507.296.8

320.8214.3267.3295.0

4,808.7

3,111.6

2,424.8637.1

1,787.6819.4304.0515.4202.4293.1

4,426.5

382.1

4,145.71,104.3

759.6344.7

3,041.4861.8

1,233.198.3

1,134.8504.3116.3325.9204.2269.3295.6

4,858.2

3,114.7678.3

2,436.4644.2

1,792.1826.4291.0535.4230.9305.5

44773

380.7

4,176.11,108.5

767.2341.4

3,067.6869.0

1,246.898.5

1,148.3502.9118.0331.0203.3269.4297.9

4,890.0

3,151.3684.8

2.466.5660.4

1,806.1827.5292.1535.4223.1303.3

4,505.1

385.0

4,218.01,126.9

778.9347.9

3,091.2869.8

1,259.798.1

1,161.6502.2116.8342.6217.1280.9293.7

3,190.6695.5

2.495.0674.8

1,820.3858.3307.0551.2201.2295.7

4,545.7

407.2

4,204.61,106.6

762.0344.6

3,098.0869.3

1,266.998.5

1,168.4496.7111.9353.1212.5274.0307.7

4,»41Ji

3,202.7693.4

2,509.4671.6

1,837.8869.3308.0561.3174.1289.4

4335.5

406.4

4,213.81,115.6

768.9346.7

3,098.2865.0

1,269.098.5

1,170.5497.9113.6352.7215.1269.8305.5

4&V2

3,202.2676.9

2,525.3681.6

1,843.7875.1317.9557.2178.3291.9

43473

399.7

4,201.61,101.9

755.5346.4

3,099.7869.8

1,265.298.6

1,166.7496.7111.8356.2220.8283.0308.7

4^)57.1

3,236.0708.4

2427.6670.2

1,857.4881.9324.3557.6152.6286.1

4356.6

400.6

4,187.01,091.9

750.2341.7

3,095.2870.7

1,263.498.6

1,164.8496.9112.8351.3212.1281.7310.1

49339

3,197.2694.6

2,502.6666.1

1,836.5857.0300.0557.0180.9291.5

4326.7

407.2


3,892.91,029.2

719.4'309.8'

2,863.7813.3'

1,164.388.5

1,075.7509.9

90.4285.8'214.3242.4275.2

4,568,5

2,947.6705.4

2,242.2564.2'

l,678.ff762.1'3\6ff446.2'210.0271.3'

4,191.0'

377.4'

91.2

88.1

4,030.21,042.8

729.6313.3

2,987.3839.1

1,223.797.1

1,126.5509.6104.4310.7197.0270.0288.6

4,7293

3.068.6681.8

2.386.8624.0

1,762.9796.9289.3507.6193.7281.8

4341.0

388.2

79.8

81.4

4.075.51,075.6

741.6332.1

2,999.9842.8

1,231.997.9

1,134.0509.8100.1315.3211.5287.5295.6

4^134

3,123.4703.8

2,419.6639.2

1,780.4812.1300.5511.6188.4294.5

4,418.4

395.0

84.3

85.6

4,098.41,078.1

744.4333.7

3,020.3850.0

1,232.898.3

1,134.5513.599.3

324.7223.8286.8295.3

4347.7

3,144.0721.0

2,422.9641.7

1,781.3817.4307.8509.6200.3294.0

4455.7

392.0

82.7

86.0

4,152.91,104.8

756.3348.5

3,048.2859.4

1,233.298.5

1.134.6511.1116.5328.0211.2280.6294.1

4^824

3,120.8690.3

2,430.5642.5

1,788.0832.9294.5538.4231.0305.5

4490.2

392.2

93.4

95.9

4,173.51,112.0

766.1345.9

3,061.6868.8

1,241.598.1

1,143.4502.5119.4329.3206.3269.5299.1

4391.9

3.138.5678.1

2,460.4659.3

1,801.1828.1293.0535.1221.1304.5

4492J

399.6

87.7

90.1

4,208.41,128.2

782.2346.0

3,080.2873.4

1,253.197.1

1,156.1495.7117.7340.4216.7269.3293.6

4#51.2

3,181.4683.2

2,498.2672.2

1,825.9850.2304.6545.6199.5295.9

4327.0

404.2

87.4

89.6

4,209.21,117.3

770.4346.8

3,091.9876.8

1,260.497.6

1,162.8491.8113.5349.3215.3269.3305.7

4,942.8

3,202.1698.5

2,503.6666.0

1,837.6869.3307.3562.0173.4288.5

43333

409.5

83.5

84.5

4,210.21,126.6

778.8347.8

3,083.6869.9

1,262.897.0

1.165.8491.1110.7349.1224.5258.3303.7

4,940.0

3,216.6681.8

2^34.8673.9

1,860.9857.5311.2546.4167.3290.9

43323

407.7

83.9

87.5

4,210.71,114.8

765.4349.4

3,095.9877.0

1,259.797.4

1,162.3491.5115.3352.5230.1285.0306.0

4^*75.2

3.259.8734.0

2,525.8663.4

1,862.3874.2320.5553.7147.4285.1

4366.4

84.4

85.4

4,195.61,102.7

757.7344.9

3,093.0880.0

1,256.397.9

1,158.4493.0116.3347.3209.9274.2306.5

4J<29.6

3.176.7689.3

2.487.4660.7

1,826.7869.83O4.0565.9182.5290.3

43193

410.3

82.4

82.5

4.205.91,110.5

769.3Mil

3.095.3871.9

1,269.698.5

1,171.1495.0107.0351.8201.7262.3307.6

4,920.4

3,171.1693.7

2,477.4666.4

1,811.0862.2289.2573.0184.3285.9

43033

416.9

4,210.61,118.9

775.7343.2

3,091.7880.2

1,262.598.1

1,164.4491.7109.5347.7196.4260.2307.0

4^173

3,150.7690.1

2,460.7663.3

1,797.4874.1292.6581.4195.5285.5

43053

411.7

81.7

81.4

Footnotes appear on p. A21.



1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued

B. Domestically chartered commercial banks

Billions of dollars

Account

Assets1 Bank credit2 Securities in batik credit3 U.S. government securities4 Other securities5 Loans and leases in bank credit2

6 Commercial and industrial7 Real estate8 Revolving home equity9 Other



15 Other assets5

16 Total assets6



28 Residual (assets less liabilities)'

Assets29 Bank credit30 Securities in bank credit31 U.S. government securities32 Other securities33 Loans and leases in bank credit2

34 Commercial and industrial35 Real estate36 Revolving home equity37 Other38 Consumer39 Security3

40 Other loans and leases41 Interbank loans42 Cash assets*43 Other assets5

44 Total assets6

Liabilities45 Deposits46 Transaction47 Nontransaction48 Large time49 Other50 Borrowings51 From banks in the US52 From others53 Net due to related foreign offices54 Other liabilities




items8


59 Mortgage-backed securities9

Monthly averages

1997

Apr.

1997'

Oct. Nov. Dec.

1998'

Jan. Feb. Mar. Apr.

Wednesday figures

1998


Seasonally adjusted

3.358.9849.2630.3218.9

2,509.7587.3'

1,138.489.3

1,049.1514.5

45.8223.8'193.6213.6237.5

3,947.3

2.695.4690.1

2.005.2329.8'

1.675.5'621.0'28V7'337.3'

78.2180.4'

3,575.1'

372.2'

3,486.8868.8650.4218.4

2,617.9618.7

1.190.096.4

1.093.7507.7

57.5244.0180.4231.5246.5

4,089.0

2,798.0675.0

2,123.0366.1

1,756.9645.0258.9386.0

77.9190.5

3,711.5

377.5

3,519.3883.7662.8220.9

2,635.6622.6

1,199.197.2

1,101.9507.2

57.6249.1182.4242.5249.3

4,137.2

2,832.4682.7

2,149.7374.3

1.775.4658.3271.2387.1

75.2196.9

3,762.8

374.4

3,544.8895.8670.2225.5

2,649.0630.5

1,203.498.0

1,105.4507.2

53.0254.9183.0233.8252.7

4,157.7

2,839.1677.0

2.162.1377.3

1,784.8669.9278.1391.8

80.8197.5

3,787.3

370.4

3.577.0911.2678.4232.8

2,665.8638.5

1,206.598.3

1,108.2504.3

61.5254.9176.2236.5255.0

4,188.3

2.841.2668.2

2,173.0382.7

1,790.3676.7267.5409.2

91.2209.0

3,818.1

370.1

3,607.5915.6683.4232.2

2.691.9646.5

1.220.898.5

1.122.4502.9

63.2258.5178.52.36.7255.5

4,221.8

2,866.4674.6

2,191.8387.5

1,804.3682.7269.3413.3

88.4205.7

3,843.1

378.7

3.652.2929.6691.5238.1

2,722.6649.5

1.235.098.1

1,136.9502.2

68.0267.9196.3246.8250.9

4,289.4

2.901.7684.9

2,216.8398.2

1,818.6704.3281.1423.2

82.6201.5

3,890.1

399.3

3,649.9915.4674.9240.6

2,734.5654.7

1,242.998.5

1,144.4496.7

63.8276.4192.3238.8265.3

4,289.6

2,910.9682.3

2,228.6391.8

1,836.8704.3281.3423.0

75.5198.8

3,889.6

400.0

3,656.1918.8679.2239.6

2,737.4651.4

1,245.198.5

1,146.6497.9

67.0276.0198.5233.5261.2

4,292.6

2,905.8665.4

2,240.4397.8

1,842.6709.5289.7419.8

77.1201.0

3,893.5

399.2

3,652.3916.0674.1241.9

2.736.3655.5

1,241.298.6

1,142.6496.7

63.2279.6202.9248.0265.1

4,311.7

2,948.2696.8

2.251.4395.3

1,856.1706.1287.3418.9

62.2197.6

3,914.1

397.6

3,637.7908.0667.4240.6

2,729.7655.9

1,239.398.6

1,140.8496.9

62.8274.7190.7245.9268.4

4,285.9

2,910.3683.6

2,226.6390.9

1,835.7696.4279.9416.5

78.6199.5

3,884.7

401.2

3.648.0915.7676.6239.1

2,732.3656.0

1,245.498.5

1,146.9495.0

61.1274.8177.2228.1267.5

4,264.0

2.876.5683.6

2,192.9382 2

1,810.6705.5268.6436.9

85,0195.6

3,862.5

401.4


3,363.2'858.0639.0'219.0'

2,505.2'594.01

1,133.088.5

1.044.4509.9

47.0221.4'195.6210.5237.7

3,951.0

2,697.5695.2

2,002.3326.9'

l,675.4r

620.1'282 8'337.3'78.8

180.4'

3,576.9'

374.1

49.5

44.6252.1'

3,491.8866.3648.5217.8

2,625.5616.9

1,195.997.1

1,098.8509.6

57.6245.5176.4235.4246.7

4,094.1

2,801.2671.3

2,129.8369.1

1,760.8641.1255.5385.6

76.0190.5

3,708.8

385.3

38.2

41.3265.6

3,532.2886.9663.2223.7

2,645.2621.6

1,205.097.9

1,107.1509.8

58.6250.3187.7251.8249.8

4,165.0

2,851.1693.6

2,157.5378.8

1,778.8655.8271 5384.370.6

196.9

3,774.4

390.6

41.5

43.6275.1

3,555.3894.7668.5226.2

2,660.6627.9

1 206.898.3

1,108.5513.5

54.3258.2192.5251.7252.2

4,195.3

2,868.3710.7

2,157.6377.5

1,780.1667.9281.9386.0

73.8197.5

3,807.5

387.8

41.3

44.2281.0

3,587.3917.0677.0240.0

2,670.3635.3

1,206.698.5

1,108.1511,1

61.6255.7183.1247.8253.0

4,215.2

2,849.2680.2

2,169.0382.0

1,787.0683.1270.9412.2

86.5209.0

3,827.9

387.3

50.1

52.9289.5

3,605.5922.1683,1239.0

2.683.4645.2

1 215.398.1

I . I 17 .3502.5

64.5255.9181.52374255.1

4,223.3

2,855.9668.2

2,187.8387.9

1,799.9683.3270.3413.0

85.1205.7

3,830.0

393.3

47.3

49.5293.8

3,642.9932.9694.0238.8

2,710.0652.4

1,228.497.1

1,131.4495,7

68.2265.4195.8236.3250.7

4,269.2

2,891.3672.7

2,218.6393.6

1,825.0696.3278.7417.6

81.8201.5

3,870.8

398.4

47.5

49.8299.5

3,654.8924.6684.6240.0

2,730.2662.2

1,236.697.6

1,139.0491.8

65.9273.6195.1235.8265.7

4,294.8

2.912.0687.9

2,224.1387.5

1,836.6704.3280.6423.7

76.3198.8

3,891.4

403.4

44.2

45.6293.5

3,653.5927.6690.0237.6

2,725.9656.6

1 239 197.0

1.142.1491.1

65.5273.6207.9224.3262.2

4,291.5

2,923.5670.8

2,252.7392.8

1,859.9691.9282 9409^0

73.6201.0

3,890.0

401.5

43.6

46.5301.4

3,662.0927.9685.8242.2

2,734.1662.6

1.235.997.4

1,138.5491,5

67 3276.8212.3251.6265.2

4,334.8

2,974.9722.9

2,252.0390.6

1,861.4698.4283.4415.0

61.0197.6

3,931.9

402.9

45.6

47.2294.1

3,646.0917.8677.6240.2

2.728.2664.7

1,232.597.9

1,134.6493.0

66 8271.3188.5240 3267.5

4,285.9

2,891.8678.9

2,212.8387.1

1,825.8709.2283.9425.3

80.8199.5

3,881.2

404.7

43.6

44.3289.0

3,652.8922.3683.6238.7

2,730.6664.7

1,238.698.1

1,140.5491.7

63 6271.8171.9227.4268.3

4,263.8

2,855.4680.1

2,175.3378.9

1,796.4717.4272 0445.3

90.2195.6

3,858.6

405.2

42.7

43.4288.0




1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued

C. Large domestically chartered commercial banks

Billions of dollars

Account

Assets1 Bank credit2 Securities in bank credit3 U.S. government securities4 Trading account5 Investment account6 Other securities7 Trading account8 Investment account9 State and local government..

10 Other11 Loans and leases in bank credit2 . . .12 Commercial and industrial13 Bankers acceptances14 Other15 Real estate16 Revolving home equity17 Other18 Consumer19 Security1

20 Federal funds sold to andrepurchase agreementswith broker-dealers

21 Other22 State and local government23 Agricultural24 Federal funds sold to and

repurchase agreementswith others

25 AH other loans26 Lease-financing receivables27 Interbank loans28 Federal funds sold to and

repurchase agreements withcommercial banks

29 Other30 Cash assets4

31 Other assets5

32 Total assets6

Liabilities33 Deposits34 Transaction35 Nontransaction36 Large time37 Oilier38 Borrowings39 From banks in the US40 From others41 Net due to related foreign offices42 Other liabilities



Monthly averages

1997

Apr.'

1997'

Oct. Nov. Dec.

1998'

Jan. Feb. Mar. Apr.

Wednesd ay figures

1998


Seasonally adjusted

2,021.5451.9315.8

19.6296.2136.170.765.421.144.2

1,569.6418.0

1.6416.4641.8

63.1578.6306.841.2

23.817.511.39.3

7.364.369.6

148.8

98.150.7

148.0183.4

2,464.1

1,515.1397.9

1,117.1177.4939.7473.3207.3266.0

73.8155.4

2J17.5

246.6

2.077.3462.7327.0

25 0302.1135.763.672.122.349.8

1.614.6436.8

1.3435.5649.967.6

582.2298.6

52.4

35.317.111.19.3

8.968.678.8

124.0

77.746.3

161.0184.6

2^10.2

1,532.4376.2

1,156.2200.9955.2491.4187.9303.572.8

162.7

2,259.2

251.0

2,092.6473.9337.626.7

311.0136.363.672.622.3503

1.618.7438.8

1.3437.6651.167.9

583.2296.3

52.1

35.716.411.09.6

8.971.279.7

126.6

81.944.7

169.9184.7

2^37.1

1,554.8382.6

1,172.2207.0965.2504.1200.6303.5

70.2168.1

2J973

239.9

2,106.5482.9342.927.4

315.5140.163.676.522.1543

1,623.6445.7

1.2444.5650.2

68.5581.7294.947.3

30.916.410.99.6

11.172.381.6

127.0

82.244.8

162.1189.7

1548.6

1,556.1378.7

1,177.4209.6967 8512.0205.8306.276.5

168.4

2312.9

235.7

2,135.3500.9353.4

29.1324.3147.569.877.722.555.2

1,634.5451.9

1.2450.6647.668.8

578.8293.6

55.9

39.516.410.89.5

7.773.284.3

119.8

76443.4

164.5191.4

2^74.4

1,554.6371.1

1,183.6214.39693518.51952323.387.0

180.2

23403

234.0

21605506.9360.128.0

332.1146.867.879.022.756.3

1,653.6458.4

1.2457.1656.9

68.9588.0292.6

57.4

41.216.210.89.5

6.176.785.3

121.2

68.952.3

164.0190.6

2,599.4

1,573.7375 3

1,198.3216.9981.4523.5196.9326.6

82.2176.3

2355.7

243.7

2.200.1518.7368.427.5

340.9150.371.179.222.856.4

1,681.4461.2

1.3459.9668.768.7

600.0294.161.8

43 718.110.69.6

7.181.387.2

131.1

80.350.9

173.2186.5

2,654.0

1.601.4382.8

1,218.6227.1991 5542.9208.9334.078.5

171.0

2393.9

260.1

2,193.5505.9355.423.7

331.7150.569.680.923.057.9

1,687.6464.6

1.2463.4672.2

69.2603.0290.657.4

39.717.810.69.7

7.285.190.2

125.8

74.351.5

164.2196.7

2,643.2

1,603.4381.2

1,222.2219.8

1,002.4540.9208.3332.672.1

167.8

2384.2

259.1

2,201.9508.4359.023.3

335.7149.469.480023.057.1

1,693.5462.4

1.2462.3676.569.3

607.2293.060.1

42.517.610.69.6

6.985.089.4

131.7

79.452.3

159.8194.8

2,651.1

1,602.9370.5

1,232.4225.2

10072545.9216.3329.572.9

170.5

2392J

258.9

2,195.3506.9355.023.4

331.6151.971.180.822.957.9

1,688.3465.4

1.2465.5670.969.2

601.7291.0

56.4

38.617.710.69.7

8.386.489.7

132.5

81.351.1

172.7195.2

2,658.7

1,631.2393.5

1,237.7223.1

1 014.6542.8215.4327.4

59.0167.0

2,400.0

258.7

2.181.3499.3349.021.7

3273150.368.681.623.058 6

1.682.0465.5

1.1465.7668.469.2

599.2289 756.8

38.618.210.59.7

6.884.190.5

124.3

72.152.3

171.0199.1

2,6.38.8

1.603.23807

1,222.5219.3

10032533.8206.5327.375.5

168.4

2380.9

257.9

2,190.4506.4356.926.3

330.6149368.580.923.157.8

1,684.0465.0

1.2465.2672.6

69.1603.5288.255.5

38.117.310.69.7

6.484.691.2

115.0

64150.8

154.0198.3

2,620.8

1,574.5380.2

1,194.2210.8983.4540.7194.7346.0

81.7164.1

2361.0

259.8




1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued

C. Large domestically chartered commercial banks—Continued

Account

Assets45 Bank credit46 Securities in bank credit47 U.S. government securities48 Trading account49 Investment account50 Mortgage-backed securities.51 Other52 One year or less53 Between one and five years54 More than five years . . . .55 Other securities56 Trading account57 Investment account58 State and local government . .59 Other60 Loans and leases in bank credit- . .61 Commercial and industrial62 Bankers acceptances63 Other64 Real estate65 Revolving home equity66 Other67 Commercial68 Consumer69 Security3

70 Federal funds sold to andrepurchase agreementswith broker-dealers

71 Other72 State and local government73 Agricultural74 Federal funds sold to and

repurchase agreementswith others

75 All other loans76 Lease-financing receivables . . . .77 Interbank loans78 Federal funds sold to and

repurchase agreementswith commercial banks

79 Other80 Cash assets4

81 Other assets5

82 Total assets6

Liabilities83 Deposits84 Transaction85 Nontransaction86 Large time87 Other88 Borrowings89 From banks in the US90 From nonbanks in the U.S91 Net due to related foreign offices . . . .92 Other liabilities


9 4 R e s i d u a l ( a s se t s less l i a b i l i t i e s ) 7 . . . .

M E M O

9 5 R e v a l u a t i o n ga ins o n o f f -ba lance -shee t i t e m s 8 . . .



98 Pass-through securities99 CMOS. REMICs, and other

mortgage-backed securities. . .100 Net unrealized gains (losses) on

available-for-sale securities10 . . .101 Offshore credit to U.S. residents" . . .

Monthly averages

1997

Apr/

1997'

Oct. Nov. Dec.

1998'

Ian. Feb. Mar. Apr.

Wednesday figures

1998



2,020.0455.0319.4

19.8299.5190.1109.530.660.118.9

135.770.864.921.143.8

1,565.0422.4

1.6420.8636.862.3

356.2218.3303.142.5

24.917.711.29.0

7.363.469.4

149.2

99.250.0

145.6183.4

2,461.0

1,5090399.4

1,109.6174.5935.1474.2206.9267.2

74.4155.4

Z212.9

248.1

49.5

44.6209.9142.0

67.9

-0.533.3

2,082.3462.9327.3

26.1301.2198.4102.826.852.823.3

135.663.372.322.450.0

1,619.4436.5

1.4435.1653.568.3

360.9224.4299.652.5

35.517.011.29.5

8.969.178.5

120.8

74.846.1

164 8184.6

1J51S9

1,537.5374.2

1,163.3203 9959.4487.1184.9302.270.8

162.7

2^58.1

257.8

38.2

41.3216.6149.4

67.3

2.534.2

2,106.0480.2340.828.0

312.8206.9105.929.453.522.9

139.465.973.522.351.2

1,625.8439.0

1.4437.6655.1

68.6360.9225.6297.2

53.1

36.616.511.19.6

8.972 379.7

128.6

83.645.0

176.7184.7

2359.2

1,567.0389.1

1,177.8211.5966.35021201.8300.265.6

168.1

2302.8

256.4

41.5

43.6225.1154.2

70.9

2.434.4

21164483.8342.727.0

315.7211.7104.028.153.322.6

141.163.977.222.255.1

1,632.7443.6

1.34423652.668.8

358.2225.6298.848.6

31.317.311.09.6

11.175.581.8

132.4

86.346.1

176.5189.7

2,578.3

1,577.5401.8

1,175.7209.8965.9509.3209.4299.8

69.5168.4

2324.6

253.7

41.3

44.2229.9157.3

72.6

2.234.2

2,150.9508.3353.5

28.2325.3219.7105.627.052.226.4

154.976.578.422 555^9

1,642.6449.5

1.24483650.769.2

357.9223.6298.756.0

39.616.410.89.4

7.773 886.0

125.3

80.345.0

174.7191.4

2.605.8

1,564.0380.7

1,183.3213.6969.7524.1198.2325.882.3

180.2

2350.6

255.3

50.1

52.9238.4162.3

76.1

3.035.5

2,167.0515.5361.928.4

333.4222.6110.928.951.230.7

153.674.579.122.756.4

1,651.6457.5

1.2456.3655.1

68.5362.1224.5292.2

58.7

42.516.310.89.1

6.175.386.7

120.2

68.152.1

164.8190.6

2,606.0

1,5661372.2

1,193.9217.3976.6526.0198.6327.379.0

176.3

2347.4

258.5

47.3

49.5242.3164.7

77.6

3.336.2

2,194.6520.6369.828.3

341.5227.2114.229.751.133.4

150.871.679.222.756.5

1,673.9463.1

1.2461.9664.4

67.7371.8224.9289.561.9

43.918.010.69.2

7.180.387.8

126.9

77.049.9

164.5186.5

2JS3SS

1 589.4373.7

1,215.7222.5993.2538.1207.6330.577.7

171.0

23763

259.2

47.5

49.8247.4169.2

78.2

3.035.2

2,1927509.6360.1

23.8336.2220.8115.430.950.633.9

149.569380.223.057.3

1,683.1469.7

1.24685666.368.1

372.7225.4286.759.5

41.617.910.49.3

7.284.090.0

126.5

75.451.1

161.8196.7

2,641.0

1,5961383.1

1,213.0215.5997.5542.7207.9334.872.8

167.8

2379.5

261.5

44.2

45.6240.9164.5

76.4

3.035.5

2,197.8512.9365.825.0

340.8228.7112.128.950.832.4

147.167.379.822.956.9

1,685.0465.9

1.2464.7671.8

67.8379.2224.8288.058.6

42.216.410.59.2

6.984.589.6

130.1

78.152.0

151.7194.8

2^37.8

1,603.4369.1

1,234.4220.2

1,014.2534.3211.8322.569.3

170.5

2377.5

260.3

43.6

46.5248.7170.7

78.0

3.135.5

21997513.1361.424.5

336.9221.0115.931.450.633.8

151.771480.322.957.4

1,686.6470.3

1.24691666.0

68.0373.0225.0287.160.4

42.118.310.49.3

8.385.189.7

135.2

84.650.6

175.3195.2

2.66S.7

1,6417409.4

1,232.3218.4

1,013.9540.1213.4326.657.8

167.0

2,406.6

262.1

45.6

47.2241.S164.9

76.5

3.235.6

2,181.3502.7353.321.4

331.9216.3115.631.250.633.8

149.468.980.523.057.5

1,678.6471.3

1.1470.2661.4

68.3367.4225.7286.250.7

41.819.010.49.4

6.882.490.0

124.8

73.151.7

167.6199.1

2,636.2

1,582.7376.3

1,206.4215.4991.0545.7209.6336.277.7

168.4

2374.4

261.8

43.6

44.3236.3160.8

75.6

29354

2 187 1507.1358.724.5

334.2216.3117.932.250.035.7

148.468380.123.157.0

1,680.0470.9

1.2469.7665.568.5

370.9226.1285.2

58.1

40.018.010.49.4

6.483.390.7

116.2

65.750.5

151.6198.3

ifilKS

1.555 3378.7

1,176.6207.4969.1550.3196.5353.8

86.9164.1

2356.6

261.9

42.7

43.4235.8161.0

74.8

2.835.3



1.26 COMMERCIAL BANKS IN THE UNITED STATES

D. Small domestically chartered commercial banks

Billions of dollars


Assets and Liabilities'—Continued

Monthly averages

Apr.' Dec. Jan. Apr.

Wednesday figures

Apr. Apr. 15 Apr. 22 Apr. 29

Seasonally adjusted

Assets1 Bank credit2 Securities in bank credit3 U.S. government securities . .4 Other securities5 Loans and leases in bank credit2. .6 Commercial and industrial . .7 Real estate8 Revolving home equity. . .9 Other



15 Other assets5

16 Total assets6

Liabilities17 Deposits18 Transaction19 Nontransaction20 Large time21 Other22 Borrowings23 From banks in the US24 From others25 Net due to related foreign offices.26 Other liabilities


28 Residual (assets less liabilities)7..

Assets29 Bank credit30 Securities in bank credit31 U.S. government securities . .32 Other securities33 Loans and leases in bank credit2. .34 Commercial and industrial . .35 Real estate36 Revolving home equity . . .37 Other38 Consumer39 Security3


43 Other assets5

44 Total assets6

Liabilities45 Deposits46 Transaction47 Nontransaction48 Large time49 Other50 Borrowings51 From banks in the US52 From others53 Nel due to related foreign offices .54 Other liabilities

1.337.4397.3314.582.9

940.1169.3496.626.1

470.5207.6

4.562.144.765.754.1

1,483.2

1,180.3292.2888.1152.4735.7147.876.471.44.4

25.0

13573

125.6

1,409.5406.1323.382.7

1,003.4181.9540.128.7

511.4209.0

5.267.156.470.661.9

1,265.7298.8966.8165.2801.6153.671.182.55.2

27.8

1,4522

126.5

1,426.7409.8325.284.6

1,016.9183.8548.0

29.2518.8210.9

5.568.755.872.664.6

1,600.1

1,277.6300.1977.5167.2810.3154.270.683.65.0

28.8

1,465.6

134.5

1,438.2412.8327.485.5

1,025.4184.8553.229.6

523.7212.3

5.769.456.071.662.9

1,609.1

1,283.0298.3984.7167.7817.0157.972.485.54.3

29.1

1,474.4

134.7

1,441.6410.3325.085.2

1,031.4186.7558.929.5

529.4210.7

5.669.556.471.963.5

1,613.9

1,286.6297.1989.5168.4821.1158.272.385.94.2

28.8

1,477.8

136.1

1,447.1408.7323.385.4

1,038.4188.1564.0

29.65344210.4

5.870.157.372.864.9

1,622.4

1,292.8299,3993.5170.6822.9159.272.486.76.1

29.4

1,487.4

135.0

1,452.0410.8323.187.8

1,041.2188.3566.329.5

536.9208.1

6.272.265.173.6MA

1,635.5

1.300.3302.1998.2171.1827.1161.472.289.24.1

30.5

1,496.2

139.2

1.456.5409.5319.590.0

1,047.0190.1570.729.3

541.3206.1

6.3Til66.574.668.6

1,6463

1,307.6301.2

1,006.4172.0834.4163.473.190.43.5

30.9

1305.4

140.9

1,454.2410.4320.190.2

1,043.8189.0568.629.2

539.4204.8

6.974.466.973.766.4

1,6413

1,302.9294.9

1,008.0172.6835.3163.673.390.34.2

30.6

13013

140.3

1,457.0409.13I9.I90.0

1.047.9190.1570.329.4

541.0205.7

6.975.070.575.370.0

1.653.0

1,317.0303.4

1,013.7172.2841.5163.371.891.53.2

30.6

1314.1

138.8

1.456.4408.7318.390.3

1,047.7190.4571.029.4

541.6207.2

6.073.166.474.969.3

1,647.1

1.307.1303.0

1.004.1171.6832.5162,573.489.23.1

31.1

1303.8

143.3



56 Residual (assets less liabilities)7. .

MEMO


1,343.2402.9319.6

83.3940.3171.6496.2

26.3469.9206.8

4.561.246.364.954.3

1,489.9

1,188.5295.8892.7152.4740.3145.975.970.04.4

25.0

1363.9

126.0

42.2

1,409.5403.4321.2

82.21.006.2

180.4542.428.9

513.5209.9

5.268.355.670.662.1

1,263.7297.2966.5165.2801.4154.070.683.45.2

27.8

1,450.7

127.5

1,426.1406.7322.484.3

1,019.4182.6549.929.3

520.6212.6

5.568.859.275.165.1

1,605.9

1,284.1304.4979.7167.2812.4153.769.784.15.0

28.8

1,471.6

134.2

50.0

1,438.9411.0325.885.1

1,027.9184.2554.129.5

524.6214.7

5.769.260.175.262.5

1,617.0

1,290.8308.9981.9167.7814.2158.672.586.24.3

29.1

1,482.9

134.1

1,436.4408.7323.685.1

1,027.7185.9555.929.4

526.5212.4

5.668.057.873.161.6

1,609.4

1,285.2299.5985.7168.4817.3159.172.786.44.2

28.8

1,4773

132.0

1,438.5406.6321.285.4

1,031.9187.7560.229.5

530.7210.2

5.867.961.372.664.6

1,6173

1,289.8295.9993.8170.6823.2157.471.785.76.1

29.4

1,482.6

134.7

1,448.3412.2324.288.0

1,036.1189.3564.0

29.4534.7206.2

6.270.468.971.964.3

1,633.7

1,301.8299.0

1,002.8171.1831.8158.271.187.14.1

30.5

1,494.6

139.2

1,462.1415.0324.590.5

1,047.1192.5570.329.5

540.8205.2

6.372.768.674.069.0

1,653.8

1,315.9304.7

1,011.1172.0839.2161.672.788.93.5

30.9

1311.9

141.9

1,455.7414.7324.390.5

1,040.9190.7567.329.3

538.0203.0

6.973.077.872.567.4

1,653.7

1,320.1301.7

1,018.4172.6845.7157.671.186.64.2

30.6

13123

141.2

52.7

1,462.4414.8324.490.5

1,047.5192.3569.929.4

540.5204.4

6.974.077.176.470.1

1,666.1

1,333.2313.5

1,019.7172.2847.5158.370.088.33.2

30.6

1325.4

140.7

52.6

1,464.7415.2324.490.8

1,049.6193.4571.029.6

541.4206.8

6.072.363.772.768.4

1,649.7

1,309.1302.7

1,006.4171.6834.8163.574.389.1

3.131.1

1306.8

142.8

52.7

1.457.7409.3319.689.7

1,048.4191.0572.829.4

543.5206.8

5.672.262.274.169.2

1,643.2

1,302.0303.4998.6171.4827.2164.773.990.83.3

31.5

1301.6

141.6

1,465.8415.2324.990.3

1.050.6193.8573.229.6

543.5206.5

5.671.655.773.870.0

1,6453

1300.1301.4998.7171.4827.3167.175.591.63.3

31.5

1302.0

143.3

52.3




1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued

E. Foreign-related institutions

Billions of dollars

Account

Assets1 Bank credit2 Securities in bank credit3 U.S. government securities4 Other securities5 Loans and leases in bank credit2 .6 Commercial and industrial7 Real estate8 Security3


12 Other assets5

13 Total assets6

Liabilities14 Deposits15 Transaction16 Nontransaction17 Large time18 Other19 Borrowings20 From banks in the U.S21 From others22 Net due to related foreign officer23 Other liabilities



Assets26 Bank credit27 Securities in bank credit28 US. government securities29 Trading account30 Investment account31 Other securities32 Trading account:3 Investment account34 Loans and leases in bank credit2 . .35 Commercial and industrial^6 Real estate37 Security3


41 Other assets'*

42 Total assets6

Liabilities43 Deposits44 Transaction45 Nontransaction46 Large time47 Other48 Borrowings49 From banks in the U.S50 From others51 Nei due to related foreign offices52 Other liabilities




Hems*56 Revaluation losses on off-balance-

sheet items*

Monthly averages

1997

Apr.

1997

Oct. Nov. Dec.

1998

Jan. Feb. Mar. Apr.

Wednesday figures

1998


Seasonally adjusted

5302170.081688.4

360.2219.3

31.644.065.418.833.439.5

621.7

251.910.6

241.3238.8

2.5142.033.1

108.9132.691.7

6183

3.4

538.6'175.8'80.695.2'

362.82225

27.546766.120.534.442.8'

636.1'

267.710.4

257.2254.1

3.1155.833.8

122.0118.591.6

633.5

2.5'

548.5'192.3'79.2

113.1'356.2'221.4

26.641.766.4'23.7'34.945.2'

6511'

272.810.3

262.6259.3

3.3156.329.0

127.3117.196.0

6412

9f

544.0'187.2'76.3

IKW356.8'221.325.943.865.8'31.3'33.542.3'

650.91

272.59.8

262.7259.9

2.8149.525.9

123.6121.795.5

6392

11.7'

568.7193.181.2

111.9375.6223.226.554.871.028.032.940.6

670.0

273.510.2

263.3261.5

1.8149.723.6

126.2139.696.5

659.4

106

568.6193.083.8

109.2375.6222.525.954.872.424.832.642.4

668.2

284.810.1

274.7272.8

1.8144.822.7

122.1134.797.6

661.9

6.3

565.9197.387.5

109.8368.6220.324.748.874.720.934.142.9

663.5

288.910.6

278.3276.6

1.7154.025.9

128.0118.594.2

655.6

7.9

554.6191.287.2

104.0363.4214.6

24.048.176.720.235.342.4

6512

291.811.0

280.7279.8

0.9165.026.7

138.398.590.6

645.9

6.3

557.7196.989.8

107.1360.9213.6

23.946.676.816.536.344.2

654.6

296.411.5

284.9283.8

1.1165.628.3

137.3101.290.9

654.0

0.5

549.3185.881.4

104.4363.4214.3

24.048.676.617.835.043.6

645.5

287.811.6

276.2274.9

1.3175.837.0

138.890.488.5

6415

3.0

549.3183.982.8

101.1365.4214.8

24.150.076.621.435.841.7

648.0

287.011.0

276.0275.1

0.8160.720.1

140.6102.392.0

6410

6.1

557.8194.892.7

102.1363.0215.924.245.977.024.534.240.1

656.4

294.710.1

284.5284.2

0.4156.720.6

136.199.490.2

640.9

15.5


529.6171.280.416.663.890.852.638.3

358.4219.331.343.464.418.831.937.4

617.5

250.1102

239.92373

2.6142.033.1

108.9131.290.9

614.2

3.3

41.7

43.6

538.4'176.5'81.114.366.795.4'55.639.9'

361.8'222.227.846.765.220.534.641.91

635.2'

267.510.5

257.0254.9

2.1155.833.8

122.0117.791.3

6312

If

41.6

40.2

543.3'188.7'80.316.064.3

108.4'60.947.5'

354.6'221.226.941.665 C237'35.745.8'

6483'

272.3102

262.1260.5

1.6156.329.0

127.3117.897.6

644.0

4.4'

42.8

42.0

543.1'183.4'75.913.762.2

107.4'60.047.4'

359.7'222.226.045.066 5'31.3'35.143.1'

6514'

275.610.3

265.3264.2

1.2149525.9

123.6126.596.5

648.2

4.2'

41.4

41.8

565.6187.779.214.664.6

108.562.945.6

377 8224.1

26.654.972.328.032.841.0

667.2

271.610.1

261.5260.5

1.0149723.6

126.2144.596.5

6623

4.9

43.2

42.9

568.0189.983.014.168.9

106.961.345.6

378.1223.626154.973.424.832.043.9

668.6

282.69.9

272.6271.4

1.2144.822.7

122.1136.098.8

662.2

6.4

40.4

40.6

565.5195.388.217.670.6

107.159.7474

370.2221.0

24.749.575.020.933.042.9

6610

290.110.5

279.6278.6

1.0154025.9

128.0117.794.4

656.2

5.8

40.0

39.8

554.4192.785.818.467.4

106.858.4484

361.7214.623.847.675.720.233.640.1

648.0

290.110.6

279.5278.5

1.0165.026.7

138.397.189.7

641.9

6.1

39.3

38.9

556.7199.088.817.171.7

110.259.750.5

357.7213.323.745.275.516.534.041.5

648.5

293.111.0

282.1281.1

1.0165.628.3

137.393.789.8

6423

6.2

40.3

41.0

548.7186.979.710.0mi

107.257.3499

361.8214.323.848.075.717.833.440.8

640.4

284.911.1

273.8272.8

1.0175.837.0

138.886.387.5

6345

5.9

38.7

38.2

549.6184.880.118.062.1

104.757.946.8

364.8215.3

23.849.676.021.433.939.0

643.7

285.010.4

274.6273.6

1.0160.720.1

140.6101.790.8

638.1

5.6

38.9

38.2

557.8196.692.126.965.2

104.558.3461

361.2215.523.945.975.824.532.938.7

653.6

295.310.0

285.3284.4

1.0156.720.6

136.1105.389.8

647.2

6.5

39.0

38.1




NOTES TO TABLE 1.26

NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28,"Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longerbeing published in the Bulletin. Instead, abbreviated balance sheets for both large and smalldomestically chartered banks have been included in table 1.26, parts C and D. Data are bothmerger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S.branches and agencies of foreign banks have been replaced by balance sheet estimates of allforeign-related institutions and are included in table 1.26, part E. These data are break-adjusted.

The not-seasonally -adjusted data for all tables now contain additional balance sheet items,which were available as of October 2, 1996.

1. Covers the following types of institutions in the fifty states and the District ofColumbia: domestically chartered commercial banks that submit a weekly report of condition(large domestic); other domestically chartered commercial banks (small domestic); branchesand agencies of foreign banks, and Edge Act and agreement corporations (foreign-relatedinstitutions). Excludes Internationa! Banking Facilities. Data are Wednesday values or prorata averages of Wednesday values. Large domestic banks constitute a universe; data forsmall domestic banks and foreign-related institutions are estimates based on weekly samplesand on quarter-end condition reports. Data are adjusted for breaks caused by reclassificationsof assets and liabilities.

The data for large and small domestic banks presented on pp. A17-19 are adjusted toremove the estimated effects of mergers between these two groups. The adjustment formergers changes past levels to make them comparable with current levels. Estimatedquantities of balance sheet items acquired in mergers are removed from past data for the bank

group that contained the acquired bank and put into past data for the group containing theacquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and aratio procedure is used to adjust past levels.

2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banksin the United States, all of which are included in "Interbank loans."

3. Consists of reverse RPs with brokers and dealers and loans to purchase and carrysecurities.

4. Includes vault cash, cash items in process of collection, balances due from depositoryinstitutions, and balances due from Federal Reserve Banks.

5. Excludes the due-from position with related foreign offices, which is included in "Netdue to related foreign offices."

6. Excludes unearned income, reserves for losses on loans and leases, and reserves fortransfer risk. Loans are reported gross of these items.

7. This balancing item is not intended as a measure of equity capital for use in capitaladequacy analysis. On a seasonally adjusted basis this item reflects any differences in theseasonal patterns estimated for total assets and total liabilities.

8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity andequity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39.

9. Includes mortgage-backed securities issued by U.S. government agencies, U.S.government-sponsored enterprises, and private entities.

10. Difference between fair value and historical cost for securities classified as available-for-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown arerestated to include an estimate of these tax effects.

11. Mainly commercial and industrial loans but also includes an unknown amount of creditextended to other than nonfinancial businesses.



1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING

Millions of dollars, end of period

Item

Year ending December

1993Dec.

1994Dec.

1995Dec.

1996Dec.

1997Dec.

Oct. Feb.

Commercial paper (seasonally adjusted unless noted otherwise)

1 All issuers

Financial companies'2 Dealer-placed paper', total. .3 Directly placed paper\ total.

4 Nontinaneial companies

5 Total

By holder6 Accepting banks7 Own bills8 Bills bought from other banks

Federal Reserve Banks6

9 Foreign correspondents10 Others

By basis11 Imports into United States12 Exports from United States13 Allother

555,075

218,947180,389

155,739

595,382

223,038207,701

154,643

674,904

275,815210,829

188,260

775371

361,147229,662

184.563

966,699

513,307252,536

200,857

921,769

483,489237,544

200,736

940,524

483,475249,781

966,699

513,307252,536

200,857

973,761

509.950254.926

208,886

1,004,662

520,940268,001

215,721

1,049,222

550,670282,083

216,469

Bankers dollar acceptances (not seasonally adjusted)s

32,348

12,42110,7071,714

72519,202

10,2177.29314,838

29,835

11,78310.4621.321

410

17,642

10,0626,35513,417

29,242 25,754

1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales,personal, and mortgage financing; factoring, finance leasing, and other business lending,insurance underwriting; and other investment activities.

2. Includes all financial-company paper sold by dealers in the open market.3. As reported by financial companies that place their paper directly with investors.4. Includes public utilities and firms engaged primarily in such activities as communica-

tions, construction, manufacturing, mining, wholesale and retail trade, transportation, andservices.

5. Data on bankers dollar acceptances are gathered from approximately 100 institutions.The reporting group is revised every January. Beginning January 1995, data for Bankersdollar acceptances are reported annually in September.

6. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances forits own account.

1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1

Percent per year

Date of change

1995 Jan. 1Feb 1Juiv 7Dec. 20

1996—Feb. 1

1997—Mar. 26

Rate

8.509.008.758.50

8.25

8.50

Period

199519961997

1995—JanFebMarAprMayJuneJulyAugSeptOctNovDec

Averagerate

8.838.278.44

8.509.009.009.009.009.008.808.758.758.758.758.65

Period

1996—JanFebMarAprMayJuneJulyAugSeptOctNovDec

Averagerate

8.508.258.258.258.258.258.258.258.258.258.258.25

Period

1997—JanFebMar.Apr.MayJuneJulyAugSeptOctNovDec

1998—JanFebMar.Apr.May

Averagerate

8.258.258.308.508.508.508.508.508.508.508.508.50

8.508.508.508.508.50

I. The prime rate is one of several base rates that banks use to price short-term businessloans. The table shows the dale on which a new rate came to be the predominant one quotedby a majority of the twenty-five largest banks by asset size, based on the most recem Call

Report. Data in this table also appear in the Board's H.15 (519) weekly and G.13monthly statistical releases. For ordering address, see inside front cover.


Financial Markets A23

1.35 INTEREST RATES Money and Capital Markets

Percent per year; figures are averages of business day data unless otherwise noted

Item

MONEY MARKET INSTRUMENTS

1 Federal funds1'2'3

2 Discount window borrowing2'4

Commercial paper**56

Nonfinancial3 1-month4 2-month5 3-month

Financial6 1-month7 2-month8 3-month

Commercial paper (historical) 3'5-6-7

9 l-month10 3-month11 6-month

Finance paper, directly placed (historical)3-5'7'8

12 1-month13 3-month14 6-month

Bankers acceptance^'9

15 3-month16 6-tnonth

Certificates of deposit, secondary market1*0

17 1 -month18 3-month19 6-month

20 Eurodollar deposits, 3-month3'11

U.S. Treasury' billsSecondary market3'5

21 3-month22 6-month23 1-year..

Auction average24 3-month25 6-month26 1-year

U.S. TREASURY NOTES AND BONDS

Constant maturities*3

27 1-year28 l-year29 3-year30 5-year31 7-year32 10-year33 20-year34 30-year

Composite35 More than 10 years (long-term)

STATE AND LOCAL NOTES AND BONDS

Moody's series1*36 Aaa37 Baa38 Bond Buyer series15

CORPORATE BONDS

39 Seasoned issues, all industries 6

Rating group40 Aaa41 Aa42 A43 Baa44 A-rated, recently offered utility bonds17

MEMODividend-price ratio1^

45 Common stocks

1995

5.835.21

n.a.n.a.n.a.

n.a.n.a.n.a.

5.935.935.93

5.815.785.68

5.815.80

5.875.925.98

5.93

5.495.565.60

5.515.595.69

5.946.156.256.386.506.576.956.88

6.93

5.806.105.95

7.83

7.597.727.838.207.86

2.56

1996

5.305.02

n.a.n.a.n.a.

n.a.n.a.n.a.

5.435.415.42

5.315.295.21

5.315.31

5.355.395.47

5.38

5.015.085.22

5.025.095.23

5.525.845.996.186.346.446.836.71

6.80

5.525.795.76

7.66

7.377.557.698.057.77

2.19

1997

5.465.00

5.575.575.56

5.595.595.60

5.545.585.62

5.445.485.48

5.545.57

5.545.625.73

5.61

5.065.185.32

5.075.185.36

5.635.996.106.226.336.356.696.61

6.67

5.325.505.52

7.54

7.277.487.547.877.71

1.77

Jan.

5.565.00

5.465.445.42

5.485.465.44

n.a.n.a.n.a.

n.a.n.a.

5.485.45

5.535.545.56

5.53

5.045.034.98

5.095.075.07

5.245.365.385.425.535.545.885.81

5.87

4.885.045.06

6.89

6.616.826.937.196.97

1.62

1998

Feb.

5.515.00

5.475.445.42

5.495.475.45

n.a.n.a.n.a.

n.a.n.a.

5.465.41

5.535.545.55

5.53

5.095.075.04

5.115.074.97

5315.425.435.495.605.575.965.89

5.94

4.925.095.10

6.95

6.676.887.017.257.02

1.55

Mar.

5.495.00

5.515.495.46

5.535.515.49

n.a.n.a.n.a.

n.a.n.a.

5.505.46

5.585.585.61

5.56

5.035.045.11

5.035.045.13

5.395.565.575.615.715.656.015.95

6.00

5.035.255.21

7.00

6.726.937.057.327.11

1.48

Apr.

5.455.00

5.495.485.46

5.515.495.48

n.a.n.a.n.a.

n.a.n.a.

5.485.44

5.565.585.63

5.56

4.955.065.10

5.005.085.12

5.385.565.585.615.705.646.005.92

5.98

5.005.215.23

6.99

6.696.907.037.337.10

1.43

Mar. 27

5.435.00

5.525.485.46

5.535.515.49

n.a.n.a.n.a.

n.a.n.a.

5.505.46

5.585.595.61

5.56

5.055.025.12

5.034.99n.a.

5.395.575.595.625.695.635.995.92

5.97

4.995.215.20

6.98

6.696.907.037.307.14

1.44

1998, weekending

Apr. 3

5.605.00

5.525.505.46

5.545.505.49

n.an.a.n.a.

n.a.n.a.

5.495.45

5.585.585.62

5.56

5.005.035.09

5.055.085.11

5.365.555.575.585.685.615.975.89

5.95

4.975.185.19

6.96

6.676.887.017.306.99

1.43

Apr. 10

5.485.00

5.495.475.46

5.505.485 46

n.a.n.a.n.a.

n.a.n.a.

5 485.45

5.555.565.58

5.54

4.955.015.03

4.965.00n.a.

5.305.475.505.525.615.555.935.86

5.91

4.945.155.18

6.94

6.646.866.997.287.09

1.44

Apr. 17

5.475.00

5.495.475.45

5.515.495.48

n.a.n.a.n.a.

n.a.n.a.

5.485.44

5.565.575.62

5.56

4.975.095.11

5.045.13n.a.

5,395.565.565.595.675.615.975.90

5.95

5.025.245.21

6.97

6.676.887.027.317.09

1.42

Apr. 24

5.375.00

5.485.475.45

5.505.485.48

n.a.n.an.a.

n.a.n.a.

5 485.43

5.565.585.63

5.56

4.945.065.12

4.995.06n.a.

5.405.605.615.655.725.676.035.95

6.01

5.015.235.25

7.01

6.736.937.067.357.19

1.41

1. The daily effective federal funds rale is a weighted average of rates on trades throughNew York brokers.

2. Weekly figures are averages of seven calendar days ending on Wednesday of thecurrent week; monthly figures include each calendar day in the month.

3. Annualized using a 360-day year for bank interest.4. Rate for the Federal Reserve Bank of New York.5. Quoted on a discount basis.6. An average of offering rates on commercial paper placed by several leading dealers for

firms whose bond rating is AA or the equivalent.7. Series ended August 29, 1997.S. An average of offering rates on paper directly placed by finance companies.9. Representative closing yields for acceptances of the highest-rated money center hanks.

10. An average of dealer offering rates on nationally traded certificates of deposit.11. Bid rates for Eurodollar deposits at approximately 11:00 a.m. London time. Data are

for indication purposes only.12. Auction date for daily data; weekly and monthly averages computed on an issue-date

basis.

13. Yields on actively traded issues adjusted to constant maturities. Source US Depart-ment of the Treasury.

14. General obligation bonds based on Thursday figures; Moody's Investors Service.15. State and local government general obligation bonds maturing in twenty years are used

in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys'Al rating. Based on Thursday figures.

16. Daily figures from Moody's Investors Service. Based on yields to maturity on selectedlong-term bonds.

17. Compilation of the Federal Reserve. This series is an estimate of the yield on recentlyoffered. A-rated utility bonds with a thirty-year maturity and five years of call protection.Weekly data are based on Friday quotations.

18. Standard & Poor's corporate senes. Common stock ratio is based on the 500 stocks inthe price index.

NOTE. Some of the data in this table also appear m the Board's H.I5 (519) weekly and.G.13 (415) monthly statistical releases. For ordering address, see inside front cover.Digitized for FRASER

http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis


1.36 STOCK MARKET Selected Statistics

1995 1997

Aug. Sept. Oct. Nov. Dec

1998

Jan. Feb. Mar. Apr.

Prices and trading volume (averages of daily figures)1

Common stock prices (indexes)1 New York Stock Exchange

(Dec, 31, 1965 - 50)2 Industrial3 Transportation4 Utility5 Finance

6 Standard & Poor's Corporation(1941-43 = 10)2

7 American Stock Exchange(Aug. 31, 1973 = 5O)3

Volume of trading (thousands of shares)8 New York Stock Exchange9 American Stock Exchange

10 Margin credit at broker-dealers4

Free credit balances at brokers11 Margin accounts6

12 Cash accounts

291.18367.40270.14110.64238.48

541.72

345,72920,387

357.98453.57327.30126.36303.94

670.49

570.86

409,74022,567

456.99574.97415.08143.87424.84

873.43

628.34

523,254n.a.

482.39609.54439.71143.82446.93

927.74

645.59

506,20524,095

489.74617.94451.63145.96459.86

937.02

678.05

541,20428,252

499.25625.22466.04157.83476.70

951.16

702.43

606,51332,873

492.14615.65453.56153.53465.35

938.92

674.37

531,44927,741

504.66623.57461.04165.74490.30

962.37

667.89

541,13427,624

504.13624.61458.49146.25479.81

963.36

665.72

632,89528.199

532.15660.91485.73170.96508.97

1,023.74

685.73

610,95826,808

560.70693.13508.06191.67539.47

1,076.83

722.37

619,36628,943

578.05711.89523.73207.32563.07

742.33

647,11029,544

Customer financing (millions of dollars, end-of-period balances)

76,680

16,25034,340

97,400

22,54040,430

126,090

31,41052,160

119,810

23,37542,960

126,050

23,63043,770

128,190

26.95047,465

127,330

26.73545.470

126,090

31,41052,160

127,790

29,48048.620

135,590

27,45048,640

140340

27,43051,340

140,240

28,16051,050

Margin requirements (percent of market value and etfective date)7

Mar. 11, 1968

13 Margin stocks14 Convertible bonds15 Short sales

705070

June 8. 1968

806080

May 6, 1970

655065

Dec. 6. 1971

555055

Nov. 24, 1972

655065

Jan. 3. 1974

505050

1. Daily data on prices are available upon request to the Board of Governors. For orderingaddress, see inside front cover.

2. In July 1976 a financial group, composed of banks and insurance companies, was addedto the group of stocks on which the index is based. The index is now based on 400 industrialstocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and40 financial.

3. On July 5, 1983, the American Stock Exchange rebased its index, effectively cuttingprevious readings in half.

4. Since July J983. under the revised Regulation T, margin credit at broker-dealers hasincluded credit extended against stocks, convertible bonds, stocks acquired through theexercise of subscription rights, corporate bonds, and government securities. Separate report-ing of data for margin stocks, convertible bonds, and subscription issues was discontinued inApril 1984.

5. Free credit balances are amounts in accounts with no unfulfilled commitments tobrokers and are subject to withdrawal by customers on demand.

6. Series initiated in June 1984.7. Margin requirements, stated in regulations adopted by the Board of Governors pursuant

to the Securities Exchange Act of 1934, limit the amount of credit that can be used topurchase and carry "margin securities" (as defined in the regulations) when such credit iscollateralized by securities. Margin requirements on securities are the difference between themarket value (100 percent) and the maximum loan value of collateral as prescribed by theBoard. Regulation T was adopted etfective Oct. 15, 1934; Regulation U, effective May 1,1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 1971.

On Jan. 1. 1977, the Board of Governors for the first time established in Regulation T theinitial margin required for wnting options on securities, setting it at 30 percent of the currentmarket value of the stock underlying the option. On Sept. 30, 1985, the Board changed therequired initial margin, allowing it to be the same as the option maintenance margin requiredby the appropriate exchange or self-regulatory organization; such maintenance margin rulesmust be approved by the Securities and Exchange Commission.


1.38 FEDERAL FISCAL AND FINANCING OPERATIONS

Millions of dollars

Federal Finance A25

Type of account or operation

Fiscal year Calendar year

1998

Feb. Apr.

US. budget'1 Receipts, total2 On-budget3 Off-budget4 Outlays, total5 On-budget6 Off-budget7 Surplus or deficit ( - ) , total8 On-budget9 Off-budget

Source of financing (total)10 Borrowing from the public11 Operating cash (decrease, or increase ( - ) ) . . .12 Other2

MEMO13 Treasury operating balance (level, end of

period)14 Federal Reserve Banks15 Tax and loan accounts

1,351,8301,000,751351,079

1,515,7291,227,065288.664

-163.899-226,314

62,415

171,288-2,007-5,382

37,9498,620

29,329

1,453,0621,085,570367,492

1,560,5121,259,608300.904

-107.450-174.038

66,588

129,712-6,276

-15,986

44,2257,700

36.525

1,579,2921,187,302391,990

1,601.2351,290,609310,626-21,943

-103,30781,364

38,171604

-16.832

43,6217,692

35,930

103,48173,69029,791120,83091,32729,504

-17,349-17,637

287

29,108483

-12,242

19,7785,12714,651

167,998135,34032,658154,361146,6477,71213,639

-11,30724,946

-1,771-12,107

239

31,8855,444

26,441

162,610123,36739,243137,231108,84328,38825,37914,52410,855

-24,807-8,4227,850

40,3075,552

34,756

97,95265,05132,901139,701109,39330,309

-41.750-44.342

2,592

30,56524.027

-12,842

16,2805,03711,243

117.93080,64737,283131,743101,96729,775

-13.813-21,320

7,508

20,137-11,352

5,028

27,6325,490

22,141

261,002216,98844,014136,400108,56927.830124,603108,41916,184

-60,587-60,398-3,618

88,03028,01460,016

1. Since 1990, off-budget items have been the social security trust funds (federal old-agesurvivors insurance and federal disability insurance) and the U.S. Postal Service.

2. Includes special drawing rights (SDRs); reserve position on the US. quota in theInternational Monetary Fund (IMF); loans to the IMF; other cash and monetary assets;accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneousliability (including checks outstanding) and asset accounts; seigniorage; increment on gold;

net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loan-valuation adjustment; and profit on sale of gold.

SOURCE. Monthly totals: U.S. Department of the Treasury, Monthly Treasury Statement ofReceipts and Outlays of the US. Government; fiscal year totals: U.S. Office of Managementand Budget, Budget of the US Government.



1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1

Millions of dollars

Source or type

RECEIPTS

3 Withheld4 Nonwithheld5 Refunds

Corporation income taxes6 Gross receipts7 Refunds8 Social insurance taxes and contributions, net . . .9 Employment taxes and contributions2

10 Unemployment insurance11 Other net receipts3

12 Excise taxes13 Customs deposits14 Estate and gift taxes15 Miscellaneous receipts4

OUTLAYS

16 All types

17 National defense18 International affairs19 General science, space, and technology20 Energy21 Natural resources and environment22 Agriculture

23 Commerce and housing credit

25 Community and regional development26 Education, training, employment, and

social services

27 Health28 Social security and Medicare29 Income security

30 Veterans benefits and services31 Administration of justice32 General government

34 Undistributed offsetting receipts6

Fiscal year

1996

1,453,062

656,417533,080212,16888,897

189,05517,231

509,414476,361

28,5844,469

54,01418,67017,18925,534

1,560,512

265,74813,49616,7092,844

21,6149,159

-10,47239,56510.685

S2.001

119,378523,901225,989

36,98517,54811,892

241,090-37,620

1997

1,579.292

737,466580,207250,75393,560

204,49322.198

539,371506,751

28,2024,418

56,92417.92819.84525,465

1,601,235

270,47315,22817,1741,483

21,3699,032

-14,62440,76711.005

53,008

123.843555.273230,886

39,31320,19712,768

244,013-49,973

Calendar year

1996

HI

767,099

347,285264.177162,78279,735

96.4809,704

277,767257,446

18.0682,254

25,6828,7318,775

12,087

785,368

132,5998,0768,8971.356

10,25473

-6,88518,2905,245

25.979

59,989264,647121,186

18,1409,0154,641

120,576-16,716

H2

707,551

323,884279,988

53,4919,604

95,36410,053

240,326227,777

10,3022,245

27,0169,2948,835

12,888

800,177'

139,4028,5328,260

69510,30711.037

-5,89921,5125,498

27,524

61,595269,412107,631

21,1099,5836,546

122,573-25,142

1997

HI

845,527

400,436292,252191,05082,926

106,4519,635

288,251268,357

17,7092,184

28,0848,619

10,47712,866

797,418

132,698'5,7408,938'

8039,6271,465

-7,57516,8475,675

25,080

61,809278,863124,034

17,69610,671'6,623

122,654-24,235

H2

773,810

354,072306.865

58,06910,869

104,65910,135

260,795247,794

10.7242,280

31,1329,679

10,26213,347

824362'

140,8739,420

10,040411

11,10610,590

-3,52620,4145,749

26,851

63,552283,109106,353

22,07710,2127,302

122,620-22,795

Feb.

97,952

42,20954,225

2,91414,941

3,5982,769

44,74941,825

2,589335

4,7911,4541,5002,420

139,701

20,492364

1,404- 4 3

1,746329

-1,0652,504

669

6.535

9.73546,81028,194

3,3862,026

10819,901

-3,394

1998

Mar

117,930

39,66255,2907,332

22,973

23,1533,661

48,02747,389

301337

4,4991,4121,8452,994

131,743

20.326979

1,61740

1,556283

-9722,734

503

2.888

10,87645.81522,853

1,8831,7641,012

20.651-3.064

Apr.

261,002

158,28451,811

129,52023,059

29,9102,549

61,46556,544

4,589332

5,7421,4284,1982,525

136,400

22,0651,4601,702-34

1,575119

-8142,5111,121

4,428

11,25948,35120,757

4,0561,7571,178

20,961-6,054

1. Functional details do not sum to total outlays for calendar year data because revisions tomonthly totals have not been distributed among functions. Fiscal year total for receipts andoutlays do not correspond to calendar year data because revisions from the Budget have notbeen fully distributed across months.

2. Old-age, disability, and hospital insurance, and railroad retirement accounts.3. Federal employee retirement contributions and civil service retirement and

disability fund.

4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.5. Includes interest received by trust funds.6. Rents and royalties for the outer continental shelf, U.S. government contributions for

employee retirement, and certain asset sales.SOURCE. Fiscal year totals: US. Office of Management and Budget, Budget of the US.

Government, Fiscal Year I999\ monthly and half-year totals: U.S. Department of the Trea-sury, Monthly Treasury Statement of Receipts and Outlays of the US. Government.


1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION

Billions of dollars, end of month

Federal Finance A27

1996

Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31

1 Federal debt outstanding

2 Public debt securities3 Held by public4 Held by agencies

5 Agency securities6 Held by public7 Held by agencies

8 Debt subject to statutory limit. . .

9 Public debt securities10 Other debt1

MEMO11 Statutory debt limit

5,153

S,]183,7641,354

3628

5,030

5.0300

5,500

5,197

5,1613,7391,422

3628

5,073

5,0730

5,500

5,260

5,2253.7781.447

3527

5,137

5,1370

5357

5,3233,8261,497

3427

5,237

5,2370

5,500

5,415

5,3813,8741,507

3426

5,294

5,2940

5,500

5,410

5,3763,8051,572

3426

7

5,290

5,2900

5,500

5,446

5,4133,8151,599

33267

5,328

5,3280

5,536

5.5023,8471,656

3427

7

5,417

5,4160

5,950

5,542

5,457

5,4560

1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, specifiedparticipation certificates, notes to international lending organizations, and District of Colum-bia stadium bonds.

SOURCE. U.S. Department of the Treasury, Monthly Statement of the Public Debt of theUnited States and Treasury Bulletin.

1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership

Billions of dollars, end of period

Type and holder 1994 1997

Q2 Q3 Q4

1998

Ql

1 T o t a l g r o s s p u b l i c d e b t . . . .

By type2 Interest-bearing . .

MarketableBillsNotesBondsInflation-indexed notes and bonds

Nonmarketable2

State and local government seriesForeign issues3

GovernmentPublic

Savings bonds and notesGovernment account series4

101112131415 Non-interest-bearing

By holder i

16 U.S. Treasury and other federal agencies and trust funds17 Federal Reserve Banks18 Private investors1920212223 s6'7

24252627

Commercial banksMoney market fundsInsurance companiesOther companiesState and local treasuries6'Individuals

Savings bondsOther securities

Foreign and international8

Other miscellaneous investors7"

4,800.2

4,769.23,126.0

733.81,867.0

510.3n.a.

1,643.1132.642.542.5

.0177.8

1,259.831.0

1,257.1374.1

3,168.0290.467.6

240.1224.5540.2

180.5150.7688.6785.5

4,988.7

4,964.43,307.2

760.72,010.3

521.2n.a.

1,657.2104.540.840.8

.0181.9

1,299.624.3

1,304.5391.0

3,294.9278.771.5

241.5228.8421.5

185.0162.7862.2843.0

5,323.2

5,317.23,459.7

777.42.112.3

555.0n.a.

1,857.5101.337.447.4

.0182.4

1,505.96.0

1,497.2410.9

3,411.2261 791.6

214.1258.5363.7

187.0169.6

1,131.8733.2

5,502.4

5,494.93,456.8

715.42,106.1

587.333.0

2,038.1124.136.236.2

.0181.2

1,666.77.5

1,655.7451.9

3,393.4260.0

87.8214.0265.0334.0

186.5168 4

1.278.2599.4

5,376.2

5,370.53,433.1

704.12,132.6

565.415.9

1,937.4107.935 435.4

.0182.7

1,581.55.7

1,571.6426.4

3,361.7265.777.4

216.0261.0345.3

186.3169.1

1,221.7619.2

5.413.2

5,407.53,439.6

701.92,122.2

576.224 4

1,967.9111.934.934.9

.0182.7

1.608.55.6

1,598.5436.5

3,388.9261.6

75.8214.4266.5336.4

186.2168.6

1.266.8612.6

5,502.4

5,494.93,456.8

715.42,106.1

587.333.0

2,038.1124.136.236.2

.0181.2

1.666.77.5

1,655.7451.9

3,393.4260.087.8

214.0265.0334.0

186.5168.4

1,278.2599.4

5,542.4

5,535.33,467.1

720.12.091.9

598.741 5

2.068.2139.135.436.4

.0181.2

1,681.57.2

1. The U.S. Treasury first issued inflation-indexed notes during the first quarter of 1997.2. Includes (not shown separately) securities issued to the Rural Electrification Administra-

tion, depository bonds, retirement plan bonds, and individual retirement bonds.3. Nonmarketable series denominated in dollars, and series denominated in foreign cur-

rency held by foreigners.4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds.5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual

holdings; data for other groups are Treasury estimates.6. Includes state and local pension funds.7. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable

federal securities was removed from "Other miscellaneous investors" and added to "State andlocal treasuries." The data shown here have been revised accordingly.

8. Consists of investments of foreign balances and international accounts in the UnitedStates.

9. Includes savings and loan associations, nonprofit institutions, credit unions, mutualsavings banks, corporate pension trust funds, dealers and brokers, certain U.S. Treasurydeposit accounts, and federally sponsored agencies.

SOURCE. U.S. Treasury Department, data by type of security. Monthly Statement of thePublic Debt of the United Stales; data by holder. Treasury Bulletin.



1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions'

Millions of dollars, daily averages

1998

Jan. Feb.

1998, week ending

Mar. 4 Apr. 1 Apr.) Apr. 15 Apr. 22 Apr. 29

OUTRIGHT TRANSACTIONS^

By type of security1 U.S. Treasury bills

Coupon securities, by maturity2 Five years or less3 More than five years4 Inflation-indexed

Federal agency5 Discount notes

Coupon securities, by maturity6 One year or less7 More than one year, but less than

or equal to five years8 More than five years9 Mortgage-backed

By type of counterpartyWith interdealer broker

10 U.S. Treasury11 Federal agency12 Mortgage-backed

With other13 U.S. Treasury14 Federal agency15 Mortgage-backed

FUTURES TRANSACTIONS3

By type of deliverable security16 U.S. Treasury bills





OPTIONS TRANSACTIONS4

By type of underlying security25 U.S. Treasury bills





26,208

89,02451,980

94,0631,224

16,441

73,14830,16933,042

165

2,10711,345

2.1733,742

428

39,988'

120,542'82,796'

493

36,835

1,738

3,4522,676

64,305

138,024'1,987

21,100

105,795'42,71543,204

244'

2,549'16,512'

0

0

0000

2,6526,080'

0

0

0

00

636

35,701

119,97464,952

412

38,968

2,086

4,0512,425

62,728

125,0292,101

19,793

96,01045,42942,934

289

2,55515,909

0

0

0000

2,3055,422

0

0

0

00

602

50,598'

140,638'85,940'

570

41.752

1.5595,7142.556

54.896

153,150'2,179

17.854

124,596'49,40237,041

4,367'21.656'

0

0

0000

3,4676,231'

0

0

0

00

602'

32,611'

110,179'62,329'

267

35,848

1,362

3,6181,996

92,600

117,552'2,227

27,155

87,834'40,59865,445

224'

2,177'15,942'

0

0

0000

2,6746,564'

0

0

000

754'

27,647'

105,770'60,799'

312

36,799

1,3553,5313,067

58,456

113,762'2.047

19,820

80.766'42,70438,636

194'

3,071'16,711'

0

0

0000

1,7033.951'

0

00

417'

31,602'

119,612'57,352'

336

36,241

3,195

4,1491,593

48,003

119,729'1,519

17,348

89,174'43,65930,655

529'

1,475'13,856r

0

0

0

000

2,2824,801'

0

0

0

00

646'

43.584

134,92767,180

696

46,898

2.913

3,8733,103

55,006

133,9942,681

15,069

112,39254,10639,937

2,37513,120

0

0

0000

1,7546,002

0

0

000

587

36,486

116.13284,8443,346

40,084

987

3,9405,277

96,057

135,9743,115

28,495

104,83447,17367,562

2,59817,193

0

0

0000

1,8566,382

0

00

745

47,926

98,45654,609

1.316

40,436

1,481

4,5122,598

70,033

109,8972,558

21,460

92,41046,46848,572

1,84413,302

0

0

0

000

2,7754,438

0

0

0

0914

32.172

93,50052,391

1,381

38,736

1,683

4,1661,968

52,683

97,0732,070

20.433

82,37244,48332,250

1,34710,835

0

0

0000

2,3084,917

100

0

0n.a.

0447

38,463

132,33763,256

1,083

36,834

2,141

3,7742,354

55,953

129,9301,831

16,318

105,21043,27239,635

2,41714,885

0

0

0000

2,8287.365

0

00

990

1. Transactions are market purchases and sales of securities as reported to the FederalReserve Bank of New York by the U.S. government securities dealers on its published list ofprimary dealers. Monthly averages are based on the number of trading days in the month.Transactions are assumed to be evenly distributed among the trading days of the report week.Immediate, forward, and futures transactions are reported at principal value, which does notinclude accrued interest; options transactions are reported at the face value of the underlyingsecurities.

Dealers report cumulative transactions for each week ending Wednesday.2. Outright transactions include immediate and forward transactions. Immediate delivery

refers to purchases or sales of securities (other than mortgage-backed federal agency securi-ties) for which delivery is scheduled in five business days or less and "when-issued"secunties that settle on the issue date of offering. Transactions for immediate delivery of mortgage-backed agency securities include purchases and sales for which delivery is scheduled in thirty businessdays or less. Stripped securities are reported at market value by maturity of coupon or corpus.

Forward transactions are agreements made in the over-the-counter market that specifydelayed delivery. Forward contracts for US. Treasury securities and federal agency debtsecurities are included when the time to delivery is more than five business days. Forwardcontracts for mortgage-backed agency securities are included when the time to delivery ismore than thirty business days.

3. Futures transactions are standardized agreements arranged on an exchange. All futurestransactions are included regardless of time to delivery.

4. Options transactions are purchases or sales of put and call options, whether arranged onan organized exchange or in the over-the-counter market, and include options on futurescontracts on U.S. Treasury and federal agency securities.

NOTE, "n.a." indicates that data are not published because of insufficient activity.Major changes in the report form filed by primary dealers induced a break in the dealer data

series as of the week ending January 28, 1998.


1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing'

Millions of dollars

Federal Finance A29

Feb.

1998, weekending

Mar. 4 Mar. 11 Mar. 18 Mar 25 Apr. I Apr 8 Apr. 15 Apr. 22

NET OUTRIGHT POSITIONS3

By type of security1 U.S. Treasury bills





12,567

12,119-17,495

NET FUTURES POSITIONS"

fly type of deliverable security10 U.S. Treasury bills



Coupon securities, by maturity15 One year or [ess16 More than one year, but less than


NET OPTIONS POSITIONS

By type of deliverable security19 U.S. Treasury bills

Coupon secunties, by maturity20 Five years or less21 More than five years22 Inflation-indexed




Reverse repurchase agreements28 Overnight and continuing29 Term

Securities borrowed30 Overnight and continuing31 Term

Securities received as pledge32 Overnight and continuing33 Term

Repurchase agreements34 Overnight and continuing35 Term

Securities loaned36 Overnight and continuing37 Term

Securities pledged38 Overnight and continuing .39 Term

46,961

-1,082-25,767

-6673,022

324,675746,499

Coltateralized loans40 Total

5.127152

715,197656,432

8,1574,645

52,1825,019

14,467

8,517

-7,847-21.431

1,422

18,759

3.013

5,7538,898

50,013

-4,872

-752-18,954

0

0

0000

-1,3662,729

n.a.

0

0

0n.a.

907

16,723

-11,431-23,667

1.099

16,943

3,5937,3789,095

51,110

-2,503

2,023-15,929

0

0

0000

1,2153,020

0

0

0n.a.1,119

-15,232-22,004

1.004

16.681

3.449

7,8808,680

48,178

-4,878

4,283-12,575

0

0

0000

-7432,328n.a.

0

0

0n.a.2.148

14,989

-16,412- 26,879

958

22,161

3,9717,1189,507

54,641

-4,374

3,834-12,165

0

0

0000

6413,500n.a.

0

0

0n.a.1,253

16,613

-13,544-22,672

1,164

15,785

3,4537,763

10,03753.106

-3,218

762-18,719

0

0

0

000

2.7823,258n.a.

0

0

0n.a.1,098

15.195

-1,981-24,588

1.232

14,512

4.098

6,9738,676

46.506

1,431-18.145

0

0

0000

1,4333,766n.a.

0

0

0n.a.1,022

-11,646-21,115

1.097

15,215

2,824

7,3728,280

51,988

-103

565-16,718

0

0

0

000

1,1101.771

n.a.

I)

0

0n.a.

415

-11,992-21.661

2.536

17,680

3,5537,935

11,53063,690

-1.069-21,091

0

0

0000

1,6953,691

0

0

0

0n.a.

-34

21,401

-14,310-25,413

2,132

20,726

3,2768,629

11,82358,167

-1,581

-696-17,265

0

0

0

000

3881.749

0

0

0n.a.n.a.

Financing5

352,684722,028

214.34580,881

4.208237

735.160639,985

55,5513,111

9.536

358,975758,517

212,34589.654

2,823204

740,803671,254

9,8194,232

53,8135,336

12,421

218,488'84,980

2,955'221'

747 707611.323

9,453'4.396'

52,338'3,451

11,863

364,077'736,348

221,361'86,934

2,817'247'

739,482647,681

9,349'4,148'

53,139'3,587

1,895

355,155'786.546

211,727'90,597

2,652'n.a.

758,664698.755

9,5024,858'

54,222'6,311

12,454

334,677802,422

209,70392,059

2.652

712,405718,590

9,9874,698

53,5436,169

12,852

368,925746,266

206,23192.064

750.037651.398

10,8162,987

50,7746,500

12.865

374,177799.086

207,28495.425

2,749n.a.

773,282708,229

11,6692.509

49,3236.242

13.882

357.521801.292

211.26995,220

2,853n a.

808,266703.484

11.5331,917

50,2415,964

14.476

13,518

-20.678-26,804

1.592

18.940

3,5808,556

12,38552,983

329-15,953

0

0

0

000

4951.011

154

0

0

358.878836,706

205,611104,223

3,032

810,360727,513

12,0622,024

48,4936,350

13,481

1. Data for positions and financing are obtained from reports submitted to the FederalReserve Bank of New York by the US. government securities dealers on its published list ofprimary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendardays of the report week are assumed to be constant. Monthly averages are based on thenumber of calendar days in the month.

2. Securities positions are reported at market value.3. Net outright positions include immediate and forward positions. Net immediate posi-

tions include securities purchased or sold (other than mortgage-backed agency securities) thathave been delivered or are scheduled to be delivered in five business days or less and"when-issued" securities that settle on the issue date of offering. Net immediate positions formortgage-backed agency securities include securities purchased or sold that have beendelivered or are scheduled to be delivered in thirty business days or less.

Forward positions reflect agreements made in the over-the-counter market that specifydelayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt

securities are included when the time to delivery is more than five business days. Forwardcontracts for mortgage-backed agency securities are included when the time to delivery ismore than thirty business days.

4. Futures positions reflect standardized agreements arranged on an exchange. AM futurespositions are included regardless of time to delivery.

5. Overnight financing refers to agreements made on one business day that mature on thenext business day; continuing contracts are agreements that remain in effect for more than onebusiness day but have no specific maturity and can be terminated without advance notice byeither party; term agreements have a fixed matunty of more than one business day. Financingdata are reported in terms of actual funds paid or received, including accrued interest.

NOTE, "n.a " indicates that data are not published because of insufficient activity.Major changes in the report form filed by primary dealers induced a break in the dealer data

series as of the week ending January 28, 1998.



1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding


1 Federal and federally sponsored agencies

2 Federal agencies3 Defense Department '̂4 Export-Import Bank1'̂5 Federal Housing Administration4

6 Government National Mortgage Association certificates ofparticipation"

7 Postal Service6

8 Tennessee Valley Authority9 United States Railway Association6

10 Federally sponsored agencies7

11 Federal Home Loan Banks12 Federal Home Loan Mortgage Corporation13 Federal National Mortgage Association14 Farm Credit Banks15 Student Loan Marketing Association16 Financing Corporation10

17 Farm Credit Financial Assistance Corporation1

18 Resolution Funding Corporation "

MEMO19 Federal Financing Bank debt"

Lending w federal and federally sponsored agencies20 Export-Import Bank3

21 Postal Service6

22 Student Loan Marketing Association23 Tennessee Valley Authority24 United Slates Railway Association6

Other lending**25 Farmers Home Administration26 Rural Electrification Administration27 Other

738,928

39,1866

3,455116

n.a.8,073

27,536n.a.

699,742205.817

93,279257,230

53,17550,335

8,1701,261

29,996

103,817

3,4498.073n.a.3.200n.a.

33,71917,39237,984

844,611

37,3476

2,05097

n.a.5,765

29,429

807,264243,194119,961299.17457,37947,529

8,1701,261

29.996

78,681

2.0445.765n.a.3.200n.a.

21.01517.14429,513

925,823

29,3806

1,447

27,853n.a.

896,443263,404156,980331,270

60,05344,763

8,1701,261

29,996

58,172

1,431n.a.

18,32516,70221,714

1,022,609

27,7926

552102

n.a.n.a.27,786n.a.

994,817313,919169.200369.774

63.51737.717

8,1701,261

29.996

49,090

13,53014.89820.110

1,003,177

27.3566

1,295

27,350n.a.

975,821302,310172,433356,14961,09343.0008,1701,261

29.996

48,698

1.295n.a.

13,53014,81919.054

1,014,907

27,5006

1,29593

n.a.n.a.27,494n.a.

987,407308,745174,900361,60261,09340,321

8,1701,261

29,996

32,523

13,53014,8192,879

1,022,609

27,7926

552102

n.a.n.a.27,786n.a.

994,817313,919169,200369,77463,51737,717

8.1701,261

29,996

49,090

n.a.n.a.n.a.n.a.

13,53014,89820,110

1,032,486

27,1106

n.a.n.a.27,104n.a.

1,005,376311,385181.948370,52461,31739.3758,1701,261

29.996

48,321

1,038,348

27,1016

54979

n.a.27,095n.a.

1,011,247312.017184,100373,57461,17739,570

8,1701,261

29,996

47,341

13,53014,84119,401'

13,16014,85218,780

1. Consists of mortgages assumed by the Defense Department between 1957 and 1963under family housing and homeowners assistance programs.

2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976.3. On-budget since Sept. 30, 1976.4. Consists of debentures issued in payment of Federal Housing Administration insurance

claims. Once issued, these securities may be sold privately on Ihe securities market.5. Certificates of participation issued before fiscal year 1969 by the Government National

Mortgage Association acting as trustee for the Farmers Home Administration, the Departmentof Health, Education, and Welfare, the Department of Housing and Urban Development, theSmall Business Administration, and the Veterans Administration.

6. Off-budget.7. Includes outstanding noncontingem liabilities: notes, bonds, and debentures. Includes

Federal Agricultural Mortgage Corporation, therefore details do not sum to total. Some dataare estimated.

8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which isshown on line 17.

9. Before late 1982, the association obtained financing through the Federal Financing Bank(FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22.

10. The Financing Corporation, established in August 1987 to recapitalize the FederalSavings and Loan Insurance Corporation, undertook its first borrowing in October 1987.

purpose of lending to other agencies, its debi is not included in the main portion of the table toavoid double counting.

14. Includes FFB purchases of agency assets and guaranteed loans: the latter are loansguaranteed by numerous agencies, with the amounts guaranteed by any one agency generallybeing small. The Farmers Home Administration entry consists exclusively of agency assets,whereas the Rural Electrification Administration entry consists of both agency assets andguaranteed loans.


Securities Markets and Corporate Finance A31

1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments

Millions of dollars

Type of issue or issuer,or use

1997

Sept. Nov. Dec. Apr.

1 All issues, new and refunding1 . . . .

By type of issue2 General obligation3 Revenue

Bv type of issuer4 Stale5 Special district or statutory authority2

6 Municipality, county, or township . .

7 Issues for new capital

By use of proceeds8 Education9 Transportation

10 Utilities and conservation11 Social welfare12 Industrial aid13 Other purposes

145,657

56,98088,677

14,66593,50037,492

102,390

23,96411,8909,618

19,5666.581

30,771

171,222

60,409110,813

13,651113,22844,343

112,298

26,85112,3249,791

24,5836,287

32,462

214,693

69,934134,989

18,237134,91970,558

127,928

31,86013,95112,21927,7946,667

35,095

21,499

3,59017.909

1,27814,89016,592

10,158

1,9432,654

9072.305

4411.908

21,898

7,83714,061

2,39213,19513,920

12,981

2,6471.2151,4022.341

7294,642

20,207

5,71314.494

50913.5865,920

12,979

2,9731,4201,2174,090

5742,705

21342

8,00513,337

1.70215,6004,098

13,487

2,9811,144

6832,940

8974,842

16,770

5,60811,162

1,26811.7943,708

9,696

2,3381,521

5981,540

4483,251

21,306

9.89311,413

2,42014,2284,658

12438

3,5251,760

6872,903

5813,082

27,858

9,59718,261

2,37519,6295,859

15,134

4,297771

1,8663,1041,2363,860

20,271

8.06912,202

3,84812.5044,219

12,616

4.0801,089

749n.a.

6783,255

1. Par amounts of long-term issues based on date of sale.2. Includes school districts.

SOURCE, Securities Data Company beginning January 1990; Investment Dealer'sDigest before then.

1.46 NEW SECURITY ISSUES U.S. Corporations

Millions of dollars

Type of issue, offering,or issuer

Aug. Sept. Oct. Nov. Dec.

1998

Jan.

1 All issues'

2 Bonds2

By type of offering3 Public, domestic4 Private placement, domestic3

5 Sold abroad

By industry group6 Manufacturing7 Commercial and miscellaneous .8 Transportation9 Public utility

10 Communication11 Real estate and financial

12 Stocks2

By type of offering13 Public preferred14 Common15 Private placement3

By industry group16 Manufacturing17 Commercial and miscellaneous .18 Transportation19 Public utility20 Communication21 Real estate and financial

673,779

573,206

87,49276,910

61,07050,689

8,43013,75122,999

416,269

100^73

10,91757,55632,100

21,54527,844

8041.9361.077

47.367

465,489n.a.

83,433

49,47640,544

5,7229,498

14,525429,157

n.a.

33,20883,052

537,810'n.a.

103.188'

47,213'42,765'11.35216,66012,055

510,953'

29,81482.392

52,117

46,576

40,840n.a.5,736

5,0873,196

4061,407

27836,202

5,541

6454,895n.a.

8361,673

1394852

2,371

85,001

75,166

60,226n.a.

14,941

3,5344,330

2961,3571,829

63,820

9,835

1,8787.957

1,2943,714

472405235

3,885

71,219

58,166

46,967n.a.

11,199

4,6687,9821,3221,664

34242,189

13,053

1,82411.229

58,350

46,543

42,969n.a.3,574

2.1521,166

2991,5901,586

39,750

11,807

1,06010.747

63,992

55,973

54,443n.a.1,530

2,9761,978

4481,372

92348.276

8,019

3,5784,441

73,614r

66,198r

55,647'n.a.

10,551'

10,079'5,397'1,533'1.669'2.362'

45.159'

7,416

3,6073.809

74,976'

64.011'

51,595'n.a.

12,416

4.4553,275'1,4101,053'2,509

51.309'

10,965'

3,511'7,454'

6,583 5,449 5,257 5,675 8,328'

111,832

94,323

81,453n.a.

12,870

7,7184,435

4963,7351,345

76,594

18371

6.95410.562

6,580

1. Figures represent gross proceeds of issues maturing in more than one year; they are theprincipal amount or number of units calculated by multiplying by the offering price. Figuresexclude secondary offerings, employee stock plans, investment companies other than closed-end, intracorporate transactions, equities sold abroad, and Yankee bonds. Stock data includeownership securities issued by limited partnerships.

2. Monthly data cover only public offerings.3. Monthly data are not available.SOURCE. Beginning July 1993, Securities Data Company and the Board of Governors of

the Federal Reserve System.



1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets'

Millions of dollars

Item

1 Sales of own shares2

3 Net sales3

4 Assets4

5 Cash5

1996

934,595

702.711231,885

2,624,463

138,5592,485,904

1997

1,190,900

918.728272,172

3,409,315

174,1543.235,161

1997

Sept.

101,503

72,27929,224

3,36832

178,7863,189,576

Oct.

115.343

91,65423,689

3,284,252

179,9093,104.343

Nov.

94,478

66,13528,343

3,356,347

186,5823,169,765

Dec.

110,452

89,98220,471

3,409,315

174,1543,235.161

1998

Ian.

119,488

92,62126,867

3,459^54

183,6483,275,706

Feb

114.219

81,68832,532

3,675,392

180,4153,494,977

Mar1

128,348

97,24831,100

3,843,971

174,0583.669,913

Apr.

129,008

97,07231,936

3,910,200

168,4173,741.784

1. Data include stock, hybnd, and bond mutual funds and exclude money market mutualfunds.

2. Excludes reinvestment of net income dividends and capital gains distribuiions and shareissue of conversions from one fund to another in the same group.

3. Excludes sales and redemptions resulting from transfers of shares into or out of moneymarket mutual funds within the same fund family.

4. Market value at end of period, less current liabilities.5. Includes all U.S. Treasury securities and other short-term debt securities.SOURCE. Investment Company Institute. Data based on reports of membership, which

comprises substantially all open-end investment companies registered with the Securities andExchange Commission, Data reflect underwritings of newly formed companies after theirinitial offering of securities.

1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION

Billions of dollars; quarterly data at seasonally adjusted annual rates

Account

1 Profits with inventory valuation andcapital consumption adjustment

3 Profits-tax liability

5 Dividends6 Undistributed profits

8 Capital consumption adjustment

1995

650.0622.6213.2409.4264.4145.0

-24.351.6

1996

735.9676.6229.0447.6304.8142.8

-2.561.8

1997

805.0729.8249.4480.3336.1144.2

5.569.7

1996

Q2

738.5682.2232.2450.0303.7146.4

-5 .461.6

Q3

739.6679.1231.6447.5305.7141.8

-2.763.2

Q4

747.8680.0226.0454.0309.1144.9

3.364.4

1997

Ql

779.6708.4241.2467.2326.8140.3

3.567.7

Q2

795.1719.8244.5475.3333.0142.3

5.969.4

Q3

827.3753.4258.2495.2339.1156 1

3.670.3

Q4

818.1737.3253.6483.7345.6138.1

9.271.6

1998

Ql

822.5718.4245.4473.0352.2120.8

30.273.9

SOURCE. U.S. Department of Commerce, Survey of Current Business.

1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1

Billions of dollars, end of period; not seasonally adjusted

ASSETS

1 Accounts receivable, gross* . .2 Consumer3 Business.

5 LESS: Reserves for unearned income6 Reserves for losses

7 Accounts receivable, net

9 Total assets

LIABILITIES AND CAPITAL

11 Commercial paper

Debt12 Owed to parent13 Not elsewhere classified14 All other liabilities15 Capital, surplus, and undivided profits

16 Total liabilities and capital

607.0233.0301.6

72.4

60.712.8

533.5250 9

784.4

15.3168.6

51.1300.0163.685.9

784.4

637.1244.9309.5

82 7

55.613.1

568.3290 0

858.3

19.7177.6

60.3332.5174.793.5

858.3

663.3256.8318.5

87 9

52.713.0

597.6312 4

910.0

24.1201.5

64.7328.8189.6101.3

910.0

1996

Q3

628.1244.4301.4

82 2

54.812.9

560.5268 7

829.2

18.3173.1

57.9322.3164.892.8

829.2

Q4

637.1244.9309.5

82 7

55.613.1

568.3290 0

858.3

19.7177.6

60.3332.5174.793.5

858.3

1997

Ql

648.0249.4315.2

83.4

51.312.8

583.9289 6

873.4

18.4185.3

61.0324.6189.294.9

873.4

02

651.6255.1311.7

84.8

57.213.3

581.2306 8

887.9

18.8193.7

60.0345.3171.498.7

887.9

Q3

660.5254.5319.5

86 4

54.612.7

593.1289 1

882.3

20.4189.6

61.6322.8190.197.9

882.3

Q41

663.3256.8318.5

87 9

52.713.0

597.63124

910.0

24.1201.5

64.7328.8189.6101.3

910.0

1998

Ql

666.8251.3325.9

89 6

52.113.1

601.6379 9

931.5

22.0211.7

64.6338.1193.0102.0

931.5

J. Includes finance company subsidiaries of bank holding companies but not of retailersand banks. Data are amounts carried on the balance sheets of finance companies; securitizedpools are not shown, as they are not on the books.

2. Before deduction for unearned income and losses.


Securities Market and Corporate Finance A33

1.52 DOMESTIC FINANCE COMPANIES Owned and Managed Receivables'

Billions of dollars, amounts outstanding

Type of credit 1996

Seasonally adjusted

2 Consumer3 Real estate4 Business

5 Total

6 Consumer7 Motor vehicles loans8 Motor vehicle leases9 Revolving2

10 Other3

Securitized assets4

11 Motor vehicle loans12 Motor vehicle leases13 Revolving14 Other15 Real estate16 One- to four-family17 Other

Securitized real estate assets4

18 One- to four-family19 Other20 Business21 Motor vehicles22 Retail loans23 Wholesale loans5

24 Leases25 Equipment26 Loans27 Leases28 Other business receivables6.. . .

Securitized assets4

29 Motor vehicles30 Retail loans31 Wholesale loans32 Leases33 Equipment34 Loans35 Leases36 Other business receivables6. .

281.972.4

328.1

306.6111.9343.8

810.4

326.9121.1362.4

324.4121.5356.8

805.7

323.7121.7360.3

810.4

326.9121.1362.4

811.0

324.9121.9364.3


689.5

285.881.180.828.542.6

34.83.5

n.a.14.772.4n.a.n.a.

n.a.n.a.

331.266.521.836.68.08.08.08.08.0

8.08.08.08.08.08.08.08.0

769.7

310.686.792.532.533.2

36.88.70.0

20.1111.952.130.5

28.90.4

347.267.125.133.09.09.09.09.09.0

9.09.09.09.09.09.09.09.0

818.1

330.987.096.838.634.4

44.310.80.0

19.0121.159.028.9

33.00.2

366.163.525.627.710.210.210.210.210.2

10.210.210.210.210.210.210.210.2

800.8

324.286.895.934.735.3

42.69.90.0

18.9121.558.529.3

33.50.3

355.161.226.525.09.7

198.550.3

148.254.7

28.42.1

26.30.09.73.85.82.7

806.9

325.486.096.434.835.5

42.511.00.0

19.2121.759.429.0

33.00.2

359.862.026.325.89.8

198.949.6

149.454.0

32.42.5

29.80.09.94.15.82.6

818.1

330.987.096.838.634.4

44.310.80.0

19.0121.159.028.9

33.00.2

366.163.525.627.710.2

203.951.5

152.351.1

33.02.4

30.50.0

10.74.26.54.0

812.2

326.287.494.537.634.5

42.810.70.0

18.7121.959.829.1

32.80.2

364.061.826.125.610.1

204.250.7

153.552.1

31.52.3

29.20.0

10.43.96.54.0

821.1

326.2123.7371.1

819.6

324.884.794.736.934.1

45.310.60.0

18.5123.762.229.0

32.30.2

371.164.826.428.210.2

204.749.9

154.855.6

31.22.2

29.00.0

10.84.36.54.0

818.3

326.7121.6369.9

819.4

325.086.895.236.333.0

45.010.50.0

18.2121.661.528.1

31.80.2

372.767.827.330.210.2

206.550.8

155.751.6

32.12.0

30.00.0

10.54.26.34.2

NOTE. This table has been revised to incorporate several changes resulting from thebenchmarking of finance company receivables to the June 1996 Survey of Finance Compa-nies. In that benchmark survey, and in the monthly surveys that have followed, more detailedbreakdowns have been obtained for some components. In addition, previously unavailabledata on securitized real estate loans are now included in this table. The new information hasresulted in some reclassification of receivables among the three major categories (consumer,real estate, and business) and in discontinuities in some component series between May andJune 1996.

Includes finance company subsidiaries of bank holding companies but not of retailers andbanks. Data in this table also appear in the Board's G.20 (422) monthly statistical release. Forordering address, see inside front cover.

1. Owned receivables are those carried on the balance sheet of the institution. Managedreceivables are outstanding balances of pools upon which securities have been issued; thesebalances are no longer carried on the balance sheets of the loan originator. Data are shown

before deductions for unearned income and losses. Components may not sum to totalsbecause of rounding.

2. Excludes revolving credit reported as held by depository institutions that are subsidiar-ies of finance companies.

3. Includes personal cash loans, mobile home loans, and loans to purchase other types ofconsumer goods such as appliances, apparel, boats, and recreation vehicles.

4 Outstanding balances of pools upon which securities have been issued; these balancesare no longer carried on the balance sheets of the loan originator.

5. Credit arising from transactions between manufacturers and dealers, that is. floor planfinancing.

6. Includes loans on commercial accounts receivable, factored commercial accounts, andreceivable dealer capital; small loans used primarily for business or farm purposes; andwholesale and lease paper for mobile homes, campers, and travel trailers.



1.53 MORTGAGE MARKETS Mortgages on New Homes

Millions of dollars except as noted

Item

PRIMARY MARKETS

Terms'

2 Amount of loan (thousands of dollars)

4 Maturity (years)5 Fees and charges (percent of loan amount)2

Yield (percent per year)

7 Effective rate1'3

8 Contract rate (HUD series)4

SECONDARY MARKETS

Yield (percent per \ear)9 FHA mortgages (Section 203)5

10 GNMA securities6

FEDERAL NATIONAL MORTGAGE ASSOCIATION

Mortgage holdings (end of period)11 Total12 FHA/VA insured13 Conventional

14 Mortgage transactions purchased (during period)

Mortgage commitments (during period)15 Issued7

16 To sell8

FEDERAL HOME LOAN MORTGAGE CORPORATION

Mortgage holdings (end of period)^17 Total18 FHA/VA insured19 Conventional

Mortgage transactions (during period)20 Purchases21 Sales

22 Mortgage commitments contracted (during period)9

1995

175.8134.578.627.71.21

7.657.858.05

8.187.57

1996

182.4139.278.227.21.21

7.567.778.03

8.197.48

1997

180.1140.380.428.21.02

7.577.737.76

7.897.26

1997

Oct. Nov. Dec. Ian.

Terms and yields in primary and secondary markets

183.4142.480.128.10.94

7.397.547.48

7.536.90

184.0143.580.828.60.95

7.267.407.38

7.516.84

190.7149.881.028.20.96

7.257.407.25

7.176.74

184.1142.380.528.50.91

7.137.277.16

7.086.56

1998

Feb. Mar.

195.3148.578.628.00.99

7.097.247.22

7.066.63

191.7149.581.028.30.95

7.037.177.16

7.096.66

Apr.

189.5147.180.428.40.87

7.057.197.20

7.176.63

Activity in secondary markets

253,51128,762

224,749

56,598

56,092360

107,424267

107,157

98,47085,877

118,659

287,05230,592

256,460

68,618

65,859130

137,755220

137,535

125,103119,702

128,995

316.67831.925

284,753

70.465

69,9651,298

164.421177

164.244

117,401114,258

120,089

310,42132,080

278,341

7,619

9,190300

159,801183

159,618

12,17511,712

11,986

314,62731,878

282,749

8,166

5,123139

160,974180

160,794

11,15210,812

12,047

316,67831,925

284,753

6,692

6,275140

164,421177

164,244

15,97914,587

15,805

320,06231,621

288,441

7,647

12,19960

169,142173

168,969

13,12012,702

15,638

322,95731.650

291,307

8,630

10,5870

175,770170

175,600

13,61012,481

17,397

327,02531,965

295,060

12,095

14,05792

185,928170

185,758

21,01119,085

23,060

333,57132,734

300,837

14,668

17 5560

189,471170

189,301

25,13224 479

24,468

1. Weighted averages based on sample surveys of mortgages originated by major institu-tional lender groups for purchase of newly built homes; compiled by the Federal HousingFinance Board in cooperation with the Federal Deposit Insurance Corporation.

2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or theseller) to obtain a loan.

3. Average effective interest rate on loans closed for purchase of newly built homes,assuming prepayment at the end of ten years.

4. Average contract rate on new commitments for conventional first mortgages; from U.S.Department of Housing and Urban Development (HUD). Based on transactions on the firstday of the subsequent month.

5. Average gross yield on thirty-year, minimum-downpayment first mortgages insuredby the Federal Housing Administration (FHA) for immediate delivery in the privatesecondary market. Based on transactions on first day of subsequent month.

6. Average net yields to investors on fully modified pass-through securities backed bymortgages and guaranteed by the Government National Mortgage Association (GNMA),assuming prepayment in twelve years on pools of thirty-year mortgages insured by theFederal Housing Administration or guaranteed by die Department of Veterans Affairs.

7. Does not include standby commitments issued, but includes standby commitmentsconverted.

8. Includes participation loans as well as whole loans.9. Includes conventional and government-underwritten loans. The Federal Home Loan

Mortgage Corporation's mortgage commitments and mortgage transactions include activityunder mortgage securities swap programs, whereas the corresponding data for FNMAexclude swap activity.


Real Estate A35

1.54 MORTGAGE DEBT OUTSTANDING1


Type of holder and property

Q4 QI Q4P

1 All holders

By type of property2 One- to four-family residences3 Multifamily residences4 Nonfarm, nonresidential5 Farm

By type of holder6 Major financial institutions7 Commercial banks8 One- to four-family9 Multifamily

10 Nonfarm, nonresidential11 Farm12 Savings institutions3

13 One- to four-family14 Multifamily15 Nonfarm, nonresidential16 Farm17 Life insurance companies18 One- to four-family19 Multifamily20 Nonfarm, nonresidential21 Farm

22 Federal and related agencies23 Government National Mortgage Association . . .24 One- to four-family25 Multifamily26 Farmers Home Administration4

27 One- to four-family28 Multifamily29 Nonfarm, nonresidential30 Farm31 Federal Housing and Veterans' Administrations32 One- to four-family33 Multifamily34 Resolution Trust Corporation35 One- to four-family36 Multifamily37 Nonfarm, nonresidential38 Farm39 Federal Deposit Insurance Corporation40 One- to four-family41 Multifamily42 Nonfarm, nonresidential43 Farm44 Federal National Mortgage Association45 One- to four-family46 Multifamily47 Federal Land Banks48 One- to four-family49 Farm50 Federal Home Loan Mortgage Corporation51 One- to four-family52 Multifamily

53 Mortgage pools or trusts5

54 Government National Mortgage Association . . .55 One- to four-family56 Multifamily57 Federal Home Loan Mortgage Corporation58 One- to tour-family59 Multifamily60 Federal National Mortgage Association61 One- to four-family62 Multifamily63 Farmers Home Administration4

64 One- to four-family65 Multifamily66 Nonfarm. nonresidential67 Farm68 Private mortgage conduits69 One- to four-family6

70 Multifamily71 Nonfarm, nonresidential72 Farm

73 Individuals and others74 One- to four-family75 Multifamily76 Nonfarm, nonresidential77 Farm

4,392,093

3,357,475274.625677,02282,971

1,819,8061,012,711615,86139.346

334,95322,551596,191477.62664,34353,933

289210,904

7,01823,902170,4219,563

315,580660

41,78118.09811,3195,6706,69410.9644,7536,21110,4285.2002,8592,369

07,8211,0491,5955,177

0174,312158,76615,54628,5551,671

26,88541,71238,8822,830

1,732,347450,934441,1989,736

490,851487,725

3,126530,343520,7639,580

193097

260,200208,50014,92536,774

0

524,360370,35669,30667,71516,983

4,606,303

3,533,295287,297701,15084,561

1,894,4201,090,189669,43443,837353,08823,830596,763482,35361,98752,135

288207,4687,31623,435167,0959,622

306,774220

41,79117,70511,6176,2486,2219,8095,1804,6291.864691647525

04,303492428

3,3830

176,824161,66515,15928,4281,673

26,75543,75339,9013,852

1,866,763472,283461,43810,845

515,051512,238

2,813582,959569,72413,235

II

054

296,459227,80021,27947.380

0

538,347375,68273,53371,29117,841

4,929,430

3,761,711312,558768,02787,134

1,979,1141,145,389698,50846,675375,32224.883628,335513,71261,57052,723

331205,3906,77223,197165,39910,022

300.935

20

41.59617,30311,6856,8415.7686,2443,5242,719

00000

2,431365413

1,6530

174,556160.75113,80529,6021,742

27,86046,50441,7584.746

2,070,436506,340494,15812,182

554,260551,513

2,747650,780633,21017,570

30003

359,053261,90033,68963,464

0

578,945376,49381,560102,62518.268

4,929,430

3,761,711312.558768,02787,134

1,979,1141,145,389698,50846,675375,32224,883628,335513,71261,57052,723

331205,3906,77223,197165,39910,022

300,935

041,59617,30311,6856,8415,7686,2443,5242,719

00000

2,431365413

1.6530

174,556160,75113,80529,6021,742

27,86046,50441,7584,746

2,070,436506,340494,15812,182

554,260551,513

2,747650,780633,21017.570

30003

359,053261,90033,68963,464

0

578,945376,49381,560102,62518,268

4,986,602

3,806,572316,582775,79587,653

1,993,0461,160,136708,80247,618378,47425,242

626,381513,39360,64552,007

336206,5296,79923,320166,27710,133

295,203660

41.48517,17511,6926,9695,6494,3302,3351,995

00000

2,217333377

1,5080

172,829159.63413,19529,6681,746

27,92244,66839,6405,028

2,113,770513,471500,59112,880

562,894560,369

2.525663,668645,32418,344

30003

373,734271,10035,60767,027

0

584,583379,32783,354103,53318,368

5,076,193

3,870,145323,069794,30188,678

2,033,6551,196,517733.67049,124387,66126,061

629.062516,52160,07052,132

338208,0776,842

23,499167,54810,188

292,966770

41.40017,23911,7067,1355,3214,2002,2991,900

00000

1,816272309

1,2350

170,386157,72912,65729,9631,763

28,20045.19440,0925,102

2,153,812520,938507,61813,320

567,187564,445

2,742673.931654,82619,105

2000

391.753279,45038,99273,312

0

595,761387,37284,543105,27918,567

5,176.094

3.946,690327,991811,65789,755

2,066,2591,227,076752,01149,648398,61926,798

629.757518,19960,33550,878

344209,4267,08023,615168,37410,358

291,410770

41,33217,45811,7137,2464,9163,4622,810652

00000

1,476221251

1.0040

168,458156,36312,09530,3461,786

28,56046,32940,9535,376

2,210,930529,867516,21713,650

569,920567,340

2,580690,919670,67720.242

20002

420,222299,40041,97378,849

0

607,495396,16985,861106,68918,776

5,277,185

4,019,228338,135829,47690,346

2,084,7281,244,210762,42151,100

403,71226,977629,726518,97659,52750,870

353210,792

7,18623,755169,37710,473

292,522

041.19517.25311,7207,3704,8523,8213,091730

00000

724109123492

0167,722156,24511,47730.5981,800

28.79848,45442,6295,825

2.282.566536,810523,15613,654

579.385576,846

2,539709,582687,98121,601

20002

456.787318,00048,26190,526

0

617.369403.52687,823107.12918.891

1. Multifamily debt refers to loans on structures of five or more units.2. Includes loans held by nondeposit trust companies but not loans held by bank trust

departments.3. Includes savings banks and savings and loan associations.4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from

FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accountingchanges by the Farmers Home Administration.

5. Outstanding principal balances of mortgage-backed securities insured or guaranteed bythe agency indicated.

6. Includes securitized home equity loans.7. Other holders include mortgage companies, real estate investment trusts, state and local

credit agencies, state and local retirement funds, noninsured pension funds, credit unions, andfinance companies.

SOURCE. Based on data from various institutional and government sources. Separation ofnonfarm mortgage debt by type of property, if not reported directly, and interpolations andextrapolations, when required for some quarters, are estimated in part by the Federal Reserve.Line 69 from Inside Mortgage Securities and other sources.



1.55 CONSUMER CREDIT'

Millions of dollars, amounts outstanding, end of period

Holder and type of credit

1 Total

3 Revolving4 Other2

5 Total

By major holder

7 Finance companies

9 Savings institutions . .̂

11 Pools of securitized assets4

Bv major type of credit12 Automobile

14 Finance companies15 Pools of securitized assets4

18 Finance companies19 Nonfinancial business3

20 Pools of securitized assets4

21 Other22 Commercial banks23 Finance companies24 Nonfinancial business3

25 Pools of securilized assets4

1995 1996 1997

1997

Oct. Nov. Dec.

1998

Jan. Feb' Mar.

Seasonally adjusted

1,094,197

364,231442,994286,972

1,179,892

392.370499.209288,313

l,230,671r

413.453'530,801'286,417'

1,233,029'

409,011'530,741'293,277'

1,226,947'

406.892'529,800'290.255'

1,230,671'

413,453'530,801'286,417'

1,234,553'

415,485'532,864'286,204'

1,240,678

416.755536,592287,331

1,241,747

419,680537,158284,909


1,122,828

501,963152,123131,93940,10685,061

211,636

367,069151,43781,07344,635

464,134210.298

28,46053,525

147,934291,625140,22842,59031,53619.067

1,211,590

526,769152,391144.14844,71177,745

265,826

395,609157,04786,69051,719

522,860228,61532.49344,901

188,712293,121141,10733,20832,84425,395

1,264,079'

512,539160,022152,362'47,17278,927

313,057

416,962'155,25487,01564,950

555,858'219,826

38,60844,966

221,465291,259'137,45934,39933,96126,642

1,232,510'

506,291156,867150,588'48,04968,547

302,168

413,514'157,85786,80560,648

527,472'209,54434,71737,479

215,674291,524'138,89035,34531,06825,846

l,234,'l?7r

506,497156,375150,649'47,61170,464

302,881

411,097'156,23286,04660,378

532,897'212,726

34.78938,865

216,411290,483'137,53935,54031,59926,092

1,264,079'

512,539160,022152,362'47,17278,927

313,057

416,962'155,25487,01564,950

555,858'219,826

38,60844,966

221,465291,259'137,45934,39933,96126,642

1,244,598'

500,847159,493'151,024'46,73375,355

311,146

413,727'154,41387,37963,066

541,386'208,750

37,603'42,689

221,805289,485'137,68434,511'32,66626,275

1,235,455

495,572155,675149,80446,29572,772

315,337

412,461152,74784,68565.957

535,936204,564

36,85140,976

223,400287,058138,26134,13931,79625,980

1,230,311

488,885156,139149,40545,85672,777

317,249

415,619153,62786,83265,062

531,194197,26436,27241,355

226,562283,498137,99433,03531,42225,625

1. The Board's series on amounts of credit covers most short- and intermediate-term creditextended to individuals. Data in this table also appear in the Board's G.19 (421) monthlystatistical release. For ordering address, see inside front cover.

2. Comprises mobile home loans and all other loans that are not included in automobile orrevolving credit, such as loans for education, boats, trailers, or vacations. These loans may besecured or unsecured.

3. Includes retailers and gasoline companies.4. Outstanding balances of pools upon which secunties have been issued; these balances

are no longer carried on the balance sheets of the loan originator.5. Totals include estimates for certain holders for which only consumer credit totals are

available.

1.56 TERMS OF CONSUMER CREDIT1

Percent per year except as noted

Item

INTEREST RATES

Commercial banks'1 48-monlh new car2 24-monlh personal

Credit card plan3 All accounts4 Accounts assessed interest

Auto finance companies5 New car

OTHER TERMS'

Maturity (months)

8 Used car

Loan-to-value ratio9 New car

10 Used car

Amount financed (dollars)11 New car12 Used car

1995

9.5713.94

16.0215.79

11.1914.48

54,152.2

9299

16,21011,590

1996

9.0513.54

15.6315.50

9.8413.53

51.651.4

91100

16,98712,182

1997

9.0213.90

15.7715.57

7.1213.27

54.151.0

9299

18,07712,281

Sept.

n.a.n.a.

n.a.n.a.

6.1213.29

55.450.8

9399

18,52012,190

1997

Oct.

n.a.n.a.

n.a.n.a.

7.2713.22

54.450.6

92101

18.77912.287

Nov.

8.9614.50

15.6515.62

6.8513.14

53.750.5

9199

18.92312,389

Dec.

n.a.n.a.

n.a.n.a.

5.9313.16

53.550.5

9299

19.12112,547

Jan.

n.a.n.a.

n.a.n.a.

6.1212.77

52.852.2

9298

18.94412,391

1998

Feb.

8.8714.01

15.6515.33

6.9812.87

52.652.5

9297

18.82512,356

Mar.

n.a.n.a.

n.a.n.a.

5.9412.79

51.552.6

9297

18,93212,431

1. The Board's series on amounts of credit covers, most short- and intermediate-term creditextended to individuals. Data in this table also appear in the Board's G.19 (421) monthlystatistical release. For ordering address, see inside front cover.

2. Data are available for only the second month of each quarter.3. At auto finance companies.


Flow of Funds A37

1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1

Billions of dollars; quarterly data at seasonally adjusted annual rates

Transaction category or sector

Q3 Q4 Ql Q2 Q3 Q4

1998

QI

Nonfinancial sectors

34 Private35 Open market paper36 Corporate bonds37 Bank loans n.e.c38 Other loans and advances . . .39 Mortgages

By borrowing sector40 Commercial banking41 Savings institutions42 Credit unions43 Life insurance companies44 Government-sponsored enterprises45 Federally related mortgage pools46 Issuers of asset-backed securities (AHSs).47 Finance companies48 Mortgage companies49 Real estate investment trusts (REITs)50 Brokers and dealers51 Funding corporations

1 Total net borrowing by domestic nonfinancial sectors.

By sector and instrument2 Federal government3 Treasury securities4 Budget agency securities and mortgages

5 Nonfederal

By instrument6 Commercial paper7 Municipal securities and loans8 Corporate bonds9 Bank loans n.e.c

10 Other loans and advances11 Mortgages12 Home13 Multifamily residential14 Commercial15 Farm16 Consumer credit

flv borrowing sector17 Household/18 Nonfinancial business19 Corporate20 Nonfarm noncorporate21 Farm22 State and local government

23 Foreign net borrowing in United States24 Commercial paper25 Bonds26 Bank loans n.e.c27 Other loans and advances

28 Total domestic plus foreign

29 Total net borrowing by financial sectors

By instrument30 Federal government-related31 Government-sponsored enterprise securities .32 Mortgage pool securities33 Loans from U.S. government

588.0r

256.1248.3

7.8

331.91

10.074.875.2

6.4-18.9123.7r

156.2r

- 6 . 8 '-26.7 r

1.060.7

205.9r

51.3r

45.51

3.22.6

74.7r

69.8-9.682.9

.7-4.2

657.8r

574.6'

155.9155.7

418.T

21.4-35.9

23.375.234.0

175.8'178.5'

1.9'-6 .9 '

2 2124.9

309.3'141.7'134.1'

3.34.4

-32 .3 '

-14.0-26.1

12.21.4

-1.5

560.5'

702.8'

144.4142.9

1.5

558.3'

18.1-48.2

73.3102.3'67.2

206.7'174.5'10.6'19.9'1.6

138.9

348.9'245.5'218.6'23.9'

2.9-36.0'

71.113.549.7

8.5- .5

773.8'

727.8'

145.0146.6- 1.6

582.8'

_ q2̂ 6

72.566.2'33.8

320.0'264.9'

18.6'33.9'

2.688.8

372.7'195.8'146.5'44.5'

4.814.3'

70.511.349.4

9.1.8

798.3'

764.2

23.123.2- .1

741.1

13.771.490.7

101.566.8

344.5268.8

17.255.2

3.352.5

350.3311.3241.5

63.56.4

79.5

51.53.7

41.38.5

-2.0

815.7

685.5'

155.3'158.4'-3.1

530.2'

-14.2-64.7

67.8138.3'63.0

258.1'239.7'

12.9'3.3'2.2

81.9

355.2'224.9'193.4'30.9'

.6-49.9 '

105.737.560.2

4.73.4

791.2'

625.4'

112.3'115.6'-3 .3

513.1'

-24.141.689.927.2'

3.9336.O1

249.9'27.1'57.4'

1.638.6

298.5'163.3'92.9'61.2'

9.251.4'

87.94.4

78.57.8

-2.7

713.3'

712.3

64.966.3-1 .4

647.4

7.243.479.4

143.137.5

266.0228.4

9.525.9

2.170.8

339.2252.9200.3

48.34.3

55.3

26.315.511.0- .7

.5

738.6

624.4

-43.5-43.8

2

667.9

20.396.786.1

105.018.5

281.4191.2

18.867.3

4.160.0

292.5274.7199.668.5

6.7100.7

56.410.434.311.5

.2

680.8

786.9

30.331.2- .9

756.6

14.556.4

122.916.876.3

419.2344.5

7.762.7

4.350.5

381.4311.6242.865.7

3.163.6

87.8-11.6

94.67.3

-2 .5

874.7

933.4

40.839.01.7

892.6

12.889.374.4

141.0134.9411.4310.9

33.064.9

2.628.8

388.0406.0323.471.311.398.6

35.5.7

25.315.7

-6.1

968.9

165.380.684.7

.0

129.1'-5.5123.1'

-14 .422.4

3.6

13.411.3

.2

80.684.783.6'

-1.4.0

3.412.06.3

Financial sectors

468.4'

287.5176.9115.4-4.8

180.9'40.5

121.8'-13.7

22.69.8

20.112.8

.2

.3172.1115.472.9'48.7

-11.513.7

.523.1

456.4'

204.1105.998.2

.0

252.3'42.7

196.7'3.9'3.45.6'

22.52.6- . 1- . 1

105.998.2

141.1'50.2

45.7'

-5.034.9

556.2'

231.590.4

141.1.0

324.7'92.2

179.7'16.9'27.9

7.9'

13.025.5

.11.1

90.4141.1153.6'45.912.411.0'

-2.064.1

649.2

212.898.4

114.4.0

436.5166.7206.8

19.735.6

7.8

46.119.7

.12

98^4114.4203.3

48.74.8

24.88.1

80.7

456.5'

222.980.0

142.9.0

233.6'84.4

104.0'.9'

33.311.0=

14.725.8

.3- .4

80.0142.9109.6'30.7

1.711.8'5.7

33.7

664.0'

252.8123.3129.6

.0

411.1'162.0187.9'25.1'31.2

4.9'

26.823.0

.32.0

123.3129.6160.2'43.812.115.2'4.9

123.0

342.5

105.7-8.9114.6

.0

236.8175.963.411.4

-20.16.2

13.7-16.8

_ 28̂

-8.9114.684.5

7.25.9

15.1-2.9129.4

679.6

286.2198.188.1

.0

393.477.8

234.810.363.0

7.5

77.331.9

.2

.1198.188.1

116.5123.8

5.019.834.9

-16.1

603.1

161.046.4

114.6.0

442.1168.2202.0

24.337.510.1

32.022.3

.2

.246.4

114.6231.0-2.9

3.632.0

-6.9130.7

971.7

298.1157.9140.3

.0

673.5244.6327.0

32.861.7

7.3

61.441.7

.3- . 3

157.9140.3381.266.5

4.932.17.0

78.7

-30.0-27.6-2.4

53.9124.3157.263.794.8

420.5315.8

27.772.9

4.056.9

426.9419.7323.8

88.97.0

124.6

60.356.0

8.45.5

-9.6

1,001.5

828.5

227.3142.484.8

.0

601.2236.7304.6

19.232.7

8.0

83.29.8

.5

.0142.484.8

239.882.2

8.336.3

-1.1142.1


A38 Domestic Financial Statistics D July 1998

1.57 FUNDS RAISED IN U.S. CREDIT MARKETS'—Continued

Transaction category or sector 1994 1996 1997'

Q3 Q4

1997'

Ql Q2 Q3 04 Ql

52 Total net borrowing, all sectors

53 Open market paper54 U.S. government securities55 Municipal securities56 Corporate and foreign bonds57 Bank loans n.e.c58 Other loans and advances59 Mortgages60 Consumer credit

61 Total net issues

62 Corporate equities63 Nonfinancial corporations64 Foreign shares purchased by U.S. residents65 Financial corporations66 Mutual fund shares

952.2r

-5.1421.4

74.8281.2r

-7.2- . 8

127.3'60.7

l,028.9r

35.7448.1-35.9157.3'62.950.3

185.6'124.9

l,230.2r

74.3348.5-48.2319.6'114.770.1

212.3'138.9

1,354.5'

102.6376.5

2.6301.7'

92.162.5

327.9'88.8

1,464.9

184.1235.971.4

338.8129.6100.4352.3

52.5

1,247.7'

107.7378.2'

-64.7232.0'143.899.7

269.1'81.9

1,377.3'

142.3365.1'41.6

356.2'60.132.4

340.9'38.6

1,081.1

198.6170.643.4

153.8153.817.9

272.270.8

1,360.4

108.5242.696.7

355.2126.881.7

288.960.0

1,477.8

171.1191.356.4

419.548.4

111.3429.3

50.5

1,940.5

258.1338.989.3

426.6189.5190.5418.7

28.8

1,830.0

346.6197.2124.3470.3

88.4117.8428.5

56.9

Funds raised through mutual funds and corporate equities

429.7

137.721.363.453.0

292.0

125.2

24.6-44.9

48.121.4

100.6

143.9

-3.5-58.3

50.44.4

147.4

230.5

-7 .0-64.2

58.8-1.6

237.6

184.5

-79.0-114.8

38.0-2.1263.4

71.9

-100.1-127.6

32.7-5.1171.9

156.0

-20.3-56.0

42.3-6.7176.3

186.1

-67.3-90.4

47.0-23.9253.4

131.8

-109.1-141.6

53.0-20.6240.9

291.1

-12.6-83.2

62.28.4

303.7

128.8

-126.9-144.1-10.4

27.6255.7

258.1

-78.2-109.6

9.322.1

336.2

1. Data in this table also appear in the Board's Z.I (780) quarterly statistical release, tablesF.2 through F.4. For ordering address, see inside front cover.


Flow of Funds A39

1.58 SUMMARY OF FINANCIAL TRANSACTIONS'

Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates

Transaction category or sector 1996 1997r

Q3 Q4 QI 02 Q3 Q4'

1998

NET LENDING IN CREDIT MARKETS-

1 Total net lending in credit markets

2 Domestic nonfederal nonfinancial sectors3 Household4 Nonfinancial corporate business5 Nonfarm noncorporate business6 Stale and local governments7 Federal government8 Rest of the world9 Financial sectors

10 Monetary authority11 Commercial banking12 U.S.-chartered banks13 Foreign banking offices in United States .14 Bank holding companies15 Banks in U.S.-affiliated areas16 Savings institutions17 Credit unions18 Bank personal trusts and estates19 Life insurance companies20 Other insurance companies21 Private pension funds22 State and local government retirement funds23 Money market mutual funds24 Mutual funds25 Closed-end funds26 Government-sponsored enterprises27 Federally related mortgage pools28 Asset-backed securities issuers (ABSs)29 Finance companies30 Mortgage companies31 Real estate investment trusts (REITs)32 Brokers and dealers33 Funding corporations

RELATION OF LIABILITIESTO FINANCIAL ASSETS

34 Net flows through credit markets

Other financial sources35 Official foreign exchange36 Special drawing rights certificates37 Treasury currency38 Foreign deposits39 Net interbank transactions40 Checkable deposits and currency41 Small time and savings deposits42 Large time deposits43 Money market fund shares44 Security repurchase agreements45 Corporate equities46 Mutual fund shares47 Trade payables48 Security credit49 Life insurance reserves50 Pension fund reserves51 Taxes payable52 Investment in bank personal trusts53 Noncorporate proprietors' equity54 Miscellaneous

55 Total financial sources

Liabilities not identified as assets ( —)56 Treasury currency57 Foreign deposits58 Net interbank liabilities59 Security repurchase agreements60 Taxes payable61 Miscellaneous

Floats not included in assets (—)62 Federal government checkable deposits63 Other checkable deposits64 Trade credit

65 Total identified to sectors as assets

952.2'

41.6'\.<f9.1

- l . l32.6

-18.4129.3799.7'36.2

142.2149.6-9.8

.02.4

-23.321.79.5

100.927.749.522.720.4

159.520.087.884.781.0'

-20.9.0.6

14.8-35.3

.0

.4-18.5

50.5117.3

-70.3-23.5

20.271.3

137.7292.0

52.061.436.0

255.611.4

.925.5'

346.6'

2,319.3"

- . 2-5.7

4.246.415.8

-164.2'

-1.5-1.3-4.3

2,430.0'

l,02S.9r

241.1'277.8'

17.7.6

-55.0-27.5132.3683.0'31.5

163.4148.1

11.2.9

3.36.7

28.17.1

66.724.945.522.330.0-7.1-3.7117.8115.465.8'48.3

-24.04.7

-44.2-16.2

l,028.9r

-5.8.0.7

52.989.8-9.7

-39.919.643.378.224.6

100.693.7- .1

34.5246.1

2.617.857.5'

251.0'

2,086.4'

- . 243.0-2.769.416.6

-144.2'

-4.8-2.8

.3

2,111.8'

l,230.2r

-92.6'2.8'

-8 .8 '4.7'

-91.4 '- . 2

273.91,049.1'

12.7265.9186.575.4- .342

- 7 . 616.2

- 8 . 3 '99.221.561.3'27.586.552.510.584.798.2

119.3'49.9-3.4

2.290.1

-29.7'

1,230.2'

2.2.6

35.39.9

-12.796.665.6

142.3110.4'-3.5147.4101.9'26.744.9

233.4'5.1'4.0'

53.8'444.3'

2,747.2'

- . 525.1'

- 3 . 122.9'17.8

-211.7 '

-6.0-3.8

-12.2'

2,918.8'

1,354.5'

7.2'11.5'15.0'4.4'

-23.7 '-7.7409.3945.8'

12.3187.5119.663.33.9

.719.925.5

-7 .7 '72.522.548.3'45.988.848.92.2

92.0141.1123.4'18.48.22.0'

-15.79.8'

US4.5'

-6 .3- . 5

082.0

-51.615.897.2

114.0145.840.0'-7.0

237.672.1'52.443.6

232.1'15.0'

-8 .6 '30.8'

434.9'

2,893.8'

-1.055.4'-3.3- 7'16.3

-89.8 '

.5-4.0

-32.2'

2,952.6'

1,464.9

-97.3-109.5

9.92.7-.34.9

320.41,236.9

38.3324.8274.940.25.44.2

-4.716.87.6

113.223.367.636.684.579.3

1.295.0

114.4164.921.916.4

-2.013.724.4

1,464.9

.7- . 5

.089.0

-46.341.597.1

122.5157.6115.2

-79.0263.496.3

110.156.0

290.213.975.022.5

584.4

3,474.5

- .671.5

-19.871.914.1

249.7

- 2 . 7- 3 . 9

3.8

3,589.7

1,247.7'

-202.6'-106.5'-10.0 '

4.4'- 9 0 . 5 '

-7.1485.3972.1'

11.5196.1119.571.14.8

749.721.1

- 1 4 . 8 '123.214.242.7'45.583.027.5

2.281.4

142.983.6'13.23.43.4

35.57.0'

1,247.7'

-26 .6-1.8

2.3119.7

-97.2105.994.2

180.2145.1

-16.7'-100.1

171.9-14.7'

5.359.2

225.0'13.5'

-17.4 '51.3'

406 1'

2,552.9'

1.386.1'-4.4

-101.2'20.3

-124.5'

27.1-4.7

-102 .5 '

2,755.5'

1,377.3'

-145.2'-36.6'-33.2'

4.4'-79.9'-4.1532.2994.5'

8.4248.3158.980.510.5

-1.6-47 .9

24.3-2 .5 '118.127.734.1'41.981.325.32.2

137.9129.6111.2'-6 .2

4.1- 2 . 1 '82.7

-24.0'

1,377.3'

.7

.0-2 .3104.5

17.6-53.3

90.1135.4187.584.3'

-20.3176.3109.3'125.266.7

283.9'17.6'

-4.2 '17.6'

572.6'

3,286.6'

-3.136.1'4.2

114.7'21.6

-8 .2 '

-21.4-3.7

-41.2 '

3,187.5'

1,081.1'

-193.4'-245.9'

77.9'2.5'

-27.9 '1.9

373.6'898.9'37.4

308.1195.9104.0

2.26.1

-5 .318.53.4'

94.3- .1

55.0'3.6

65.261.92.7

45.1114.660.9'44.9- 1 . 3 '- 2 . 1 '

-14.56.5'

1,081.1'

- 17 .6- 2 . 1

.4188.6

-86 .1 '85.3

157.949.9

182.436.5'

-67..V253.4

63.1'117.139.8

256.8'31.0'68.8'33.1'

632.3'

3,104.4'

- . 3178.7'26.9

-91.5'12.2

-104.2'

-9.4-2.613.1'

3,081.5'

1,360.4'

-21.4'-10 .3 '-53 .3 '

2.7'39.5'

5.6301.2'

1 075.0'47.2

309.2301.1

1.15.11.8

23.828.3'10.7'

175.027.958.539.219.791.6

1.3119.288.1

101.7'1.9

-24.4 '- 2 . 1 '

-11.7-30.0'

1,360.4'

.4

.0

18.8-46.4'

64.224.5

176.358.5

198.0'- 1 0 9 . 1 '

240.963.1'

137.477.5

337.32.4'

71.8'25 7'

529.8'

3,231.6'

- . 5-10.5'-24.4172.1'28.3

-372.5'

16.1-4.8

-72.0'

3,499.8'

1,477.8'

-164 .4 '-158.9'

34.4'2.8'

-42.7'3.0

405.4'1,233.7'

14.3209.8209.5

- . 6- 5 . 0

5.8-35.3 '

14.4'7.3'

107.032.466.290.6

123.6103.6

.355.5

114.6168.4'65.282.9'

- 2 . 1 '15.8- . 7 '

1,477.8'

2.4.0

1.3105.4

-42 .6 '-49.2

53.8'194.1243.6121.1'

-12.6'303.7135.5'79 762.8

321.8'30.5'80.8'28.5'

531.1'

3,669.4'

83.1'-51.6

27.4'11.2

- 2 1 2 1 '

2.1-3.468.6'

3,743.2'

1.940.5

-9.8-23.0-19.5

2.929.89.1

201.41.739.8

54.3472.2393.1

56.419.43.2

-2.05.88.8

76.432.890.713.0

129.360.0

.4160.0140.3328.4

-24.38.3

-1.765.3

121.7

1,940.5

17.5.0

-1.943.1

-10.065.6

152.369.9

146.0105.3

-126.9255.7123.3106.343.7

244 7- 8 . 478.4

2.8644.6

3,892.7

-2 .434.7

-30.0179.9

4.9-310.0

-19.5-4.8

5.5

4,034.6

1. Data in mis table also appear in the Board's Z.I (780) quarterly statistical release, tablesF.I and F.5. For ordering address, see inside front cover.

2. Excludes corporate equities and mutual fund shares.



1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING'


Transaction category or sector 1994 1995 1996 1997'

1996

Q3 Q4 Ql Q2 Q3 Q4' Ql

Nonfinancial sectors

1 Total credit market debt owed bydomestic nonfinancial sectors.

By sector and instrument2 Federal government3 Treasury securities4 Budget agency securities and mortgages . . .

5 Nonfederal

By instrument6 Commercial paper7 Municipal securities and loans8 Corporate bonds9 Bank loans n.e.c

10 Other loans and advances11 Mortgages12 Home13 Multifamily residential14 Commercial15 Farm16 Consumer credit

By borrowing sector17 Household18 Nonfinancial business19 Corporate20 Nonfarm noncorporate21 Farm22 State and local government

23 Foreign credit market debt held inUnited States

24 Commercial paper25 Bonds26 Bank loans n.e.c27 Other loans and advances

28 Total credit market debt owed by nonfinancialsectors, domestic and foreign

29 Total credit market debt owed byfinancial sectors

By instrument30 Federal government-related31 Government-sponsored enterprise securities32 Mortgage pool securities33 Loans from U.S. government34 Private35 Open market paper36 Corporate bonds37 Bank loans n.e.c38 Other loans and advances39 Mortgages

By borrowing sector40 Commercial banks41 Bank holding companies42 Savings institutions43 Credit unions44 Life insurance companies45 Government-sponsored enterprises46 Federally related mortgage pools47 Issuers of asset-backed securities (ABSs)48 Brokers and dealers49 Finance companies50 Mortgage companies51 Real estate investment trusts (RETTs)52 Funding corporations

53 Total credit market debt, domestic and foreign

54 Open market paper55 U.S. government securities56 Municipal securities57 Corporate and foreign bonds58 Bank loans n.e.c59 Other loans and advances60 Mortgages61 Consumer credit

13,016.8'

3,492.33,465.6

26.7

9,524.5r

139.21,341.71,253.0

759.9669.6

4,377.2'3,355.9'

268.8'669.5'83.0

983.9

4,446.2'3,927.1'2,663.1'1,121.8

142.21,151.1'

371.8

42.7242.326.160.8

13,388.7r

13,719.6'

3,636.73,608.5

28.2

10,082.8'

157.41,293.51,326.3

862.1'736.9

4,583.9'3,530.4'

279.5'689.4'

84.61,122.8

4,800.4'4,167.3'2,876.5'1,145.8'

145.11,115.1'

442.9

56.2291.9

34.660.2

14,162.5r

14,447.4'

3,781.83,755.1

26.6

10,665.6'

156.41,296.01,398.8

928.3'770.6

4,903.8'3,761.6'

301.7'753.4'

87.11,211.6

5,143.9'4,392.3'3,052.1'1,190.2'

149.91,129.4'

513.4

67.5341.343.761.0

14,960.8'

15,210.1

3,804.93,778.3

26.5

11,405.2

168.61,367.51,489.51,029.8

837.45,248.34,030.3

319.0808.690.4

1,264.1

5,497.04,699.33,289.31,253.7

156.31,209.0

558.8

65.1382.6

52.159.0

15,768.9

14,252.1'

3,733.13,705.7

27.4

173.01,281.71,376.4

920.5'769.4

4,824.6'3,703.8'

295.0"739.0'

86.71,173.5

5,043.7'4,361.9'3,038.1'1.174.3'

149.51,113.4'

490.2

65.8321.741.761.0

14,447.4'

3,781.83,755.1

26.6

10,665.6'

156.41,296.01,398.8

928.3'770.6

4,903.8'3,761.6'

301.7'753.4'

87.11,211.6

4,392.3'3,052.1'1,190.2'

149.91,129.4'

513.4

67.5341.343.761.0

14,960.8'

14,613.7'

3,829.83,803.5

26.3

10,783.9'

168.71,305.1'1,418.7

962.9'784.4'

4,957.7'3,806.1'

304.1'759.9'

87.71,186.4

5,174.6'4,466.9'3,116.3'1,202.2'

148.31.142.4'

517.8

69.3344.143.560.9

15,131.5'

14,729.1'

3,760.63,734.3

26.3

10,968.5'

179.31,326.8'1,440.2

994.2'788.01

5,035.0'3,860.8'

308.8'776.7'

88.71,205.0

5,260.7'4,543.0'3.170.2'1,219.3'

153.41,164.8'

531.6

71.3352.746.461.2

15,260.7'

14,933.9'

3,771.23,745.1

26.1

11,162.7'

176.61,340.2'1,470.9

994.2'803.1'

5,151.0'3,958.1'

310.7'792.4'

89.81,226.7'

5,374.4'4,608.2'3.217.6'1,235.2'

155.41,180.1'

548.7

64.3376.348.259.9

15,482.6'

15,210.1

3.804.93,778.3

26.5

11,405.2

168.61,367.51,489.51,029.8

837.45,248.34,030.3

319.0808.690.4

1,264.1

5,497.04,699.33.289.31,253.7

156.31,209.0

558.8

65.1382.6

52.159.0

15,768.9

Financial sectors

3,822.2'

2,172.7700.6

1,472.1.0

1,649.5'441.6

1,008.8'48.9

131.618.7

94.5133.6112.4

.5

.6700.6

1,472.1579.0'34.3

433.718.731.1

211.0

4,281.2'

2,376.8806.5

1,570.3.0

1,904.4'486.9

1.205.4'52.8'

135.024.3'

102.6148.0115.0

.4

.5806.5

1,570.3720.1'

29.3483.9

19.136.8'

248.6

4,837.3r

2,608.3896.9

1,711.4.0

2,229.1'579.1

1,385.1'69.7'

162.932.2'

113.6150.0140.5

.41.6

896.91,711.4

873.8'27.3

529.831.547.8'

312.7

5,453.5

2,821.0995.3

1,825.8.0

2,632.5745.7

1,558.989.4

198.540.0

140.6168.6160.3

.61.8

995.31.825.81,088.1

35.3554.5

36.472.6

373.8

4,672.0r

2,545.1866.1

1,679.0.0

2,126.9'538.6

1,339.4'62.8'

155.131.0'

107.7149.1134.8

.41.1

866.11,679.0

830.5'26.1

513.728.54 4 ^

291.0

4,837.3'

2,608.3896.9

1,711.4.0

2,229.1'579.1

1,385.1'69.7'

162.932.2'

113.6150.0140.5

.41.6

896.91,711.4

873.8'27.3

529.831.547.8'

312.7

4,918.2'

2,634.7894.7

1,740.0.0

2,283.5'623.0

1,396.5'72.2'

157.933.8'

115.3151.6136.3

.41.8

894.71,740.0

889.91

26.6528.4

33.051.6'

348.6

5,090.9'

2,706.2944.2

1,762.1.0

2,384.7'642.5

1,457.7'75.2'

173.735.6'

125.7160.5'144.3

.41.8

944.21,762.1

918.01

35.3557.8

34.356.6'

350.0

5,211.8'

2,746.5955.8

1,790.7.0

2,465.3'684.7

1,478.6'80.7'

183.038.2'

130.0164.0/149.8

.51.9

955.81,790.7

989.6'33.6

532.735.264.6'

363.4

5,453.5

2,821.0995.3

1,825.8.0

2,632.5745.7

1,558.989.4

198.540.0

140.6168.6160.3

.61.8

995.31,825.81,088.1

35.3554.5

36.472.6

373.8

All sectors

17,210.9'

623.55,665.01,341.72,504.0'

834.9862.0

4,395.9'983.9

18,443.7'

700.46,013.61,293.52,823.6'

949.6932.1

4,608.2'1,122.8

19,798.2'

803.06,390.01,296.03,125.3'1,041.7

994.54,936.0'1,211.6

21,222.4

979.46,625.91,367.53,431.01,171.31,094.95,288.31,264.1

19,414.3'

777.46,278.21.281.73,037.5'1,025.0

985.44,855.6'1,173.5

19,798.2'

803.06,390.01,296.03,125.3'1,041.7

994.54,936.0'1,211.6

20,049.6'

861.16,464.51,305.1'3,159.3'1.078.61,003.2'4,991.5'1,186.4

20^51.6'

893.16,466.81,326.8'3,250.6'1,115.71,022.9'5,070.6'1,205.0

20,694.4'

925.76,517.71,340.2'3,325.9'1,123.11,046.0'5.189.1'1,226.7'

21,222.4

979.46,625.91,367.53,431.01,171.31.094.95,288.31,264.1

15,435.2

3,830.83,804.8

25.9

11,604.4

193.)1,397.11,528.81,045.1

865.75,341.24,097.0

325.9826.891.4

1,233.5

5,546.54,818.33.387.11,275.9

155.31,239.6

571.3

76.7384.7

53.556.4

16,006.5

5,655.7

2,877.91,030.91.847.0

.02,777.9

804.91,630.3

94.0206.642.0

148.7181.3162.7

.71.8

1,030.91,847.01.142.7

35.1571.8

38.581.7

412.9

21,662.2

1,074.86,708.61,397.13,543.81,192.61,128.75,383.21,233.5

1. Data in this table also appear in the Board's Z.I (780) quarterly statistical release, tablesL.2 through L.4. For ordering address, see inside front cover.


1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES'

Billions of dollars except as noted, end of period

Flow of Funds A41

Transaction category or sector 1997r

1996

Q3 04

1997

Ql Q2 Q3 Q4'

1998

01

CREDIT MARKET DEBT OUTSTANDING^

1 Total credit market assets

2 Domestic nonfederal nonfinancial sectors3 Household4 Nonfinancial corporate business5 Nonfarm noncorporate business6 State and local governments7 Federal government8 Rest of Ihe world9 Financial sectors

10 Monetary authority11 Commercial banking12 U.S.-chartered banks13 Foreign banking offices in United States14 Bank holding companies15 Banks in U.S.-affiliated areas16 Savings institutions17 Credit unions18 Bank personal trusts and estates19 Life insurance companies20 Other insurance companies21 Private pension funds22 State and local government retirement funds23 Money market mutual funds24 Mutual funds25 Closed-end funds26 Government-sponsored enterprises27 Federally related mortgage pools28 Asset-backed securities issuers (ABSs)29 Finance companies30 Mortgage companies31 Real estate investment trusts (REITs)32 Brokers and dealers33 Funding corporations

RELATION OF LIABILITIESTO FINANCIAL ASSETS

34 Total credit market debt

Other liabilities35 Official foreign exchange36 Special drawing rights certificates37 Treasury currency38 Foreign deposits39 Net interbank liabilities40 Checkable deposits and currency41 Small time and savings deposits42 Large time deposits43 Money market fund shares44 Security repurchase agreements45 Mutual fund shares46 Security credit47 Life insurance reserves48 Pension fund reserves49 Trade payables50 Taxes payable51 Investment in bank personal trusts52 Miscellaneous


Financial assets not included in liabilities (+)54 Gold and special drawing rights55 Corporate equities56 Household equity in noncorporate business

Liabilities not identified as assets ( - )57 Treasury currency58 Foreign deposits59 Net interbank transactions60 Security repurchase agreements61 Taxes payable62 Miscellaneous

Floats not included in assets ( - )63 Federal government checkable deposits64 Other checkable deposits65 Trade credit

66 Total identified to sectors as assets

17,210.9'

3,002.4'1,945.7'

289.237.6

729.9204.4

1,254.812,749.2'

368.23.254.32,869.6

337.118.429.2

920.8246.8248.0

1,482.6446.4656.9455.8459.0718.8

86.0663.3

1,472.1541.7'476.2

36.513.393.3

109.3

17,210.9'

53.28.0

17.6324.6280.1

1,242.02,183.2

411.2602.9549.5

1,477.3279.0505.3

4,880.11,141.5

101.4699.4

5,397.3'

37,364.7'

21.16.237.93.422.6'

-5.4276.2-6.567.848.8

-983.1 '

3.438.0

-245.8

47,852.8'

18,443.7'

2,874.6'1,913.3'

280.4'42.3'

638.6'204.2

1,563.113,801.8'

380.83,520.13,056.1

412.618.033.4

913.3263.0239.7'

1,581.8468.7718.2'483.3545.5771.396.4

748.01,570.3

661.0'526.2

33.015.5

183.482.2'

18,443.7'

63.710.218.2

359.2290.7

1,229.32,279.7

476.9745.3659.9'

1,852.8305.7550.2

5,599.6'1,243.4'

106.5'803.0'

5,767.7'

40,805.7'

22.18,331.33.647.5'

-5.8300.6'-9.090.7'61.3'

-1,260.8'

19,798.2'

2,926.9'1.979.3'

286.0'46.7'

614.8'196.5

1,953.614,721.2'

393.13,707.73,175.8

475.822.034.1

933.2288.5232.0'

1,654.3491.2766.5'529.2634.3820.298.7

813.61,711.4

784 4'544.541.217.5'

167.792.0'

19,798.2'

53.79.7

18.2438.1240.8

1,245.12,377.0

590.9891.1699.9'

2,342.4358.1593.8

6,329.5'1,315.5'

121.5'871.7'

6,082.7'

44377.7'

21.410,061.13,863.3'

-6.8353.1'-10.6

90.0'74.7'

-1,650.8'

21,222.4

2,793.61,833.8

295.949.4

614.5201.4

2,274.015,953.4

431.44,032.53,450.7

516.127.438.3

928.5305.3239.5

1,767.4514.4834.2565.8718.8899.599.8

908.61,825.8

949.2566.457.615.5

181.4111.7

21,222.4

48.99.2

18.2527.0192.8

1,286.62,474.1

713.41,048.7

815.12,994.7

468.2649.7

7,452.21.411.8

135.41.082.86,489.0

49,040.3

21.112,958.64,156.7

-7.4424.6-32.1162.088.5

-1,960.4

19,414.3'

2,911.5'1,955.9'

275.7'45.6'

634.4'197.5

1,844.814,460.5'

386.23.643.33.135.3

454.219.334.5

945.2282.6232.6'

1,627.0484.2758.0'517.7606.6818.398.1

779.31,679.0

753.4'538.340.218.0

147.1105.4'

19,414.3'

54.39.7

18.8415.1225.8

1,220.82,357.9

557.2838.1686.9'

2.211.6317.8577.1

6,039.8'1,260.6'

119.1'843.1'

5,972.2'

43,140.3'

21.29,340.53,817.7'

- 6 . 0347.0'-11.6

72.1'68.9'

-1,492.7'

19,798.2'

2,926.9'1,979.3'

286.0'46.7'

614.8'196.5

1,953.614,721.2'

393.13,707.73,175.8

475.822.034.1

933.2288.5232.0'

1,654.3491.2766.5'529.2634.3820.298.7

813.61,711.4

784.4'544.5

41.217.5'

167.792.0'

19,798.2'

53.79.7

18.2438 1240.8

1.245.12,377.0

590.9891.1699.9'

2,342.4358.1593.8

6,329.5'1,315.5'

121.5'871.7'

6,082.7'

44,377.7'

21.410,061.13,863.3'

-6.8353.1'

-10 .690.0'74.7'

-1,650.8'

20,049.6'

2,854.7'1,920.2'

281.847.4'

605.4'196.9

2,052.7'14,945.4'

397.13,775.73,218.1

499.522.535.6

931.9291.2232.8'

1,680.2491.2780.3'531.6659.0838.399.3

824.31,740.0

794.6'552.440.9'17.0'

164.1103.6'

20,049.6'

46.39.2

18.3485.2210.9'

1.220.02,427.1

6O6.0950.8713.8'

2,411.5380.0603.7

6,417.1'1,300.4'

134.8'888.7'

6,276.5'

45,150.1'

20.910,072.33,947.1'

-6.9397.8'-1.668.4'72.3'

-1,606.0'

20351.6'

2,812.5'1,873.7

271.9'48.0'

618.9'198.3

2.126.4'15,214.3'

412.43,856.83,295.2

501.823.836.1

937.8299.9'235.5'

1,724.1498.1794.9'542.7656.5860.699.7

854.81,762.1

819.0'553.1

34.8'16.5'

161.293.8'

20351.6'

46.79.2

18 3489.9197.1

1,265.32.432.3

646.7952.4766.7'

2,719.6414.8623.1

6,942.5'1,321.9'

130.7'982.9'

6,224.3'

46336.0'

21.111.719.84.030.7'

-7.0395.2'-8.1109.2'74.3'

-1,745.9'

20,694.4'

2,758.3'1,822.7'

280.3'48.7'

606.6'199.1

2,229.1'15,507.8'

412.73,912.93,351.9

501.022.537.5

929 0'303.9'237.3'

1,750.4506.2811.5'562.0678.7889.299.7

868.71,790.7

863.9'564.4

55.5'I5.9r

165.190.1'

20,694.4'

46.19.2

18.7516.2186.9

1,234.22,438.8'

696.11,005.1

795.4'2,977.0

432.2638.8

7,331.8'1,351.9'

139.5'1,058.9'6.396.9'

47,968.1'

21.012,804.64,093.1'

-6.8416.0'-22.1126.0'84.2'

-1,789.5'

3.134.2

-258.1 '

53,850.5'

- 1 . 630.1

-290.3'

59,735.7'

-8.126.2

-297.5

67,780.8

- 1 . 723.1

-359.7'

57,680.3'

-1.630.1

-290.3'

59,735.7'

-9.725.6

-345.8'

60,596.4'

-6 .827.9

-371.8'

63,840.5'

-7.819.5

-380.2'

66,447.6'

21,222.4

2.793.61,833.8

295.949.4

614.5201.4

2,274.015,953.4

431.44,032.53,450.7

516.127.438.3

928.5305.3239.5

1,767.4514.4834.2565.8718.8899.599.8

908.61,825.8

949.2566.4

57.615.5

181.4111.7

21,222.4

48.99.2

18.2527.0192.8

1,286.62.474.1

713.41,048.7

815.12,994.7

468.2649.7

7,452.21,411.8

135.41,082.86,489.0

49.0403

21.112,958.64,156.7

- 7 . 4424.6-32.1162.088.5

-1,960.4

-8.126.2

-297.5

67,780.8

21,662.2

2,736.51,783.5

292.350.2

610.5204.8

2,340.016,381.0

433.84,095.83.507.1

517.731.239.7

930.5307.5240.1

1,795.7520.8852.3577.0770.1931.6100.0949.5

1,847.0991.5571.6

60.215.0

244.8145.9

21,662.2

48.29.2

18.3540.1201.2

1,259.82,526.0

742.41,132.9

881.13.348.4

498.6663.0

8.036.21,401.7

147 I1.173.16,725.1

51,014.5

21.214,618.64,203.9

-7.5425.2- 2 2203.8

84.9-2,070.6

-10.419.9

-364.2

71,579.2

1. Data in this lable also appear in the Board's Z. 1 (780) quarterly statistical release, tablesL. 1 and L.5. For ordering address, see inside front cover.

2. Excludes corporate equities and mutual fund shares.


A42 Domestic Nonfinancial Statistics • July 1998

2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures

Monthly data seasonally adjusted, and indexes 1992 = 100, except as noted

1 Industrial production1

Market groupings2 Products, total3 Final, total

5 Equipment6 Intermediate

Industry groupings8 Manufacturing

9 Capacity utilization, manufacturing (percent)'. .

10 Construction contracts3

11 Nonagricultural employment, total4

12 Goods-producing, total13 Manufacturing, total14 Manufacturing, production workers15 Service-producing16 Personal income, total17 Wages and salary disbursements18 Manufacturing19 Disposable personal income5

20 Retail sales5

Prices6

21 Consumer (1982-84=100)22 Producer finished goods (1982= 100)

114.5

110.6111.3109.9113.8108.3

116.0

82.8

122.0

114.998.397.599.0

120.2158.2150.9130.4158.7151 5r

152.4127.9

118.5

113.7114.6111.8119.6110.8

120.2

81.4

130.7'

117.299.097.298.4

123.0167.0159.8135.7166.2159 6'

156.9131.3

124.5

118.5119.6114.4128.8115.1

127.0

81.7

140.8'

119.9100.397.698.9

126.2176.8170.6142.0174.4166 9r

160.5131.8

1997

Aug.

125.2

119.2120.5114.6130.9115.3134 9

127.9

81.8

140.0'

120.1100.497.198.9

126.5177.8171.7142.1175.2168 5r

160.8131.7

Sept.

125.6

119.1120.3114.5130.6115.2136 1

128.0

81.6

Ul.ff

120.4100.497.799.0

126.8178.3172.3142.8175.8168 (f

161.2131.8

Oct.

126.5

120.2121.5115.9131.3116.3136 7

129.1

81.9

141.0'

120.7100.697.999.2

127.2179.2173.5144.4176.6167 8'

161.6132.3

Nov.

127.5

121.2122.5116.7132.8117.3137 7

130.4

82.3

141.0'

121.1100.998.199.5

127.6180.5175.6145.7177.7168 4'

161.5131.7

Dec.

127.9

121.0122.2115.9133.4117.4138 9

130.9

82.3

Ul.ff

121.5101.398.399.7

127.9181.3176.4146.4178.4169 1'

161.3131.1

1998'

Jan.

127.8

121.3122.6116.6133.1117.4138 2

131.1

82.1

140.0

121.9101.998.599.9

128.3182.3177.7146.6179.0170 8

161.6130.2

Feb.

127.4

120.6121.6115.2133.0117.6138 2

130.7

81.5

141.0

122.1102.098.6

100.0128.6183.4179.2147.0179.9172 2

161.9130.1

Mar.

127.7

121.0122.0115.5133.7117.7138 5

130.5

81.0

135.0

122.1101.698.599.9

128.7184.0179.7147.1180.5172 2

162.2129.7

Apr.

127.8

121.2122.3115.5134.5117.5138 5

130.8

80.8

135.0

122.4101.798.599.8

129.0184.8180.5146.7181.1173 1

162.5130 0

1. Data in this table also appear in the Board's G.17 (419) monthly statistical release- Forthe ordering address, see the inside front cover. The latest historical revision of the industrialproduction index and the capacity utilization rates was released in December 1997. The recentannual revision is described in an article in the February 1998 issue of the Bulletin. For adescription of the aggregation methods for industrial production and capacity utilization, see"Industrial Production and Capacity Utilization: Historical Revision and Recent Develop-ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. For details about theconstruction of individual industrial production series, see "Industrial Production. 1989Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp.187-204.

2. Ratio of index of production to index of capacity. Based on data from the FederalReserve, DRI McGraw-Hill. U.S. Department of Commerce, and other sources.

3. Index of dollar value of total construction contracts, including residential, nonresiden-tial. and heavy engineering, from McGraw-Hill Information Systems Company, F.W. DodgeDivision.

4. Based on data from U.S. Department of Labor, Employment and Earnings. Series coversemployees only, excluding personnel in the armed forces.

5. Based on data from U.S. Department of Commerce, Survey of Current Business.6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the pnee

indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics,Monthly Labor Review.

NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5. and indexes for seriesmentioned in notes 3 and 6, can also be found in the Survey of Current Business.

Figures for industrial production for the latest month are preliminary, and many figures forthe three months preceding the latest month have been revised. See "Recent Developments inIndustrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pp.411-35. See also "Industrial Production Capacity and Capacity Utilization since 1987,"Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605.

2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT

Thousands of persons; monthly data seasonally adjusted

Calegory 1997

Sept. Apr.

HOUSEHOLD SURVEY DATA1

1 Civilian labor force2

Employment2 Nonagricultural industries'3 Agriculture

Unemployment4 Number5 Rate (percent of civilian labor force)

ESTABLISHMENT SURVEY DATA

6 Nonagricultural payroll employment4

7 Manufacturing8 Mining9 Contract construction

10 Transportation and public utilities11 Trade12 Finance13 Service14 Government

121.4603,440

7,4045.6

117,191

18,524581

5,1606,132

27,5656,806

33,11719,305

123,2643.443

7.2365.4

119523

18.457574

5,4006,261

28,1086,899

34,37719,447

126,297

126,1593,399

6.7394.9

122,257

18.538573

5.6276,426

26.7887.053

35,59719.655

136,439

126,3393,422

6,6784.9

122,792

18,553576

5,6426,473

28.9027,082

35,85019,714

136,406

126,5833,327

6,4964.8

123,083

18,590574

5,6506.497

28.9707,108

35,94519,749

136,864

127,1913,384

6.28

123512

18,634572

5,6826,495

29,1327,132

36,10219,763

137,169

127,3923,385

6,3924.7

123,86*

18,674574

5,7476,478

29,1967,151

36,27619,770

137,493

127,7643,319

6,4094.7

124,265

18,722574

5,8436,516

29,2427,170

36,41719,781

137,557

127,8293,335

6,3934.6

124,524'

18,723573'

5,878'6,544'

29,270'7,190

36,534'19,812

137,523

127,8623.132

6,5294.7

124,500

18,716570

5,7936.559

29,2587,218

36,57219,814

137,242

128,0333,350

5,8594.3

124,762

18,706566

5,8286,557

29,3137,248

36,71119,833

1. Beginning January 1994, reflects redesign of current population survey and populalioncontrols from the 1990 census.

2. Persons sixteen years of age and older, including Resident Armed Forces. Monthlyfigures are based on sample data collected during the calendar week that contains the twelfthday; annual data are averages of monthly figures. By definition, seasonally does not exist inpopulation figures.

3. Includes self-employed, unpaid family, and domestic service workers

4. Includes all full- and pan-time employees who worked during, or received pay for, thepay period that includes the twelfth day of the month; excludes proprietors, self-employedpersons, household and unpaid family workers, and members of the armed forces. Data areadjusted to the March 1992 benchmark, and only seasonally adjusted data are available at thistime.

SOURCE. Based on data from U.S. Department of Labor. Employment and Earnings.


Selected Measures A43

2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1

Seasonally adjusted

Q2 Q3 Q4

1998

Ql' Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql r

Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2

1 Total industry

2 Manufacturing

3 Primary processing3

4 Advanced processing4

5 Durable goods6 Lumber and products7 Primary metals8 Iron and steel9 Nonferrous

10 Industrial machinery and equipment11 Electrical machinery12 Motor vehicles and parts13 Aerospace and miscellaneous

transportation equipment

14 Nondurable goods15 Textile mill products16 Paper and products17 Chemicals and products18 Plastics materials19 Petroleum products

20 Mining21 Utilities22 Electric

117.7129.7

140.2116.4123.8122.6125.3168.2226.6130.5

92.8

110.7108.5112.2114.8127.6111.0

106.0111.7111.3

1 Total industry

2 Manufacturing

3 Primary processing3.4 Advanced processing

5 Durable goods6 Lumber and products7 Primary metals8 Iron and steel9 Nonferrous

10 Industrial machinery andequipment

11 Electrical rsxhinery12 Motor vehicles and parts13 Aerospace and miscellaneous

transportation equipment

14 Nondurable goods15 Textile mill products16 Paper and products17 Chemicals and products18 Plastics materials19 Petroleum products

20 Mining21 Utilities22 Electric

1973 1975

High

118.5132.1

143.7114.9125.5122.8128.8173.9236.6136.7

95.6

111.1110.9114.1114.8130.6109.5

106.4114.0114.2

119.8135.3

147.2114.7127.8126.5129.4177.6246.0144.0

98.6

112.6111.5113.5117.1131.4109.8

105.9115.5115.7

Previous cycle

• High Low

127.6

130.8

120.2136.0

148.1116.0127.6126.1129.5180.5253.8137.3

101.6

113.1110.1112.8118.4

11L9

107.9110.8112.1

136.9163.2

173.8138.6136.0135.4136.4199.0276.7182.6

123.4

134.3131.1125.5145.1138.1114.7

117.9126.3124.6

Latest cycle6

High

151.3

156.3

138.0165.7

177.2140.0137.2136.6137.7204.4289.1184.7

124.1

135.0131.7126.0146.3140.0115.2

118.1126.7125.0

Apr.

139.2168.1

180.6141.3138.5137.9138.9210.0301.9186.7

124.8

135.7132.3126.7147.5141.9115.7

118.2127.1125.4

154.8

160.4

140.4170.7

184.2142.2140.1139.4140.7215.9315.6188.8

125.4

136.5132.9127.4148.7

116.2

118.4127.4125.7

82.4

81.5

86.079.5

80.784.091.090.691.884.581.971.4

75.2

82.482.889.479.192.496.8

89.988.589.3

82.7

81.6

85.879.8

81.182.191.589.993.585.181.974.0

77.1

82.384.390.578.593.395.1

90.190.091.4

83.2

82.2

86.080.4

81.581.292.391.893.284.681.577.1

79.0

82.984.389.679.492.694.9

89.690.992.3

82.4

81.5

85.679.7

80.481.691.190.592.083.680.472.7

81.0

82.982.988.579.6

96.3

91.186.989.1

Jan.' Apr.p

Capacity utilization rate (percent)"

88.5

91.287.2

89.288.7

100.2105.890.8

96.089.293.4

78.4

87.891.497.187.6

102.096.7

94.396.299.0

72.6

70.5

68.271.8

68.961.265.966.659.8

74.364.751.3

67.6

71.760.069.269.750.681.1

88.282.982.7

87.3

86.9

88.186.7

87.787.994.295.891.1

93.289.495.0

81.9

87.591.296.184.690.990.0

96.089.188.2

71.1

69.0

66.270.4

63.960.845.137.060.1

64.071.645.5

66.6

76.472.380.669.963.466.8

80.375.978.9

85.4

85.7

88.984.2

84.693.692.795.289.3

85.484.089.1

87.3

87.390.493.586.297.088.5

88.092.695.0

78.1

76.6

77.776.1

73.175.573.771.874.2

72.375.055.9

79.2

80.777.785.079.374.885.1

87.083.487.1

82.6

81.6

86.279.6

80.883.990.289.890.8

85.282.171.3

74.7

82.783.489.779.693.096.2

89.589.290.6

83.3

82.3

86.280.6

81.882.893.192.194.4

84.682.078.1

78.5

83.085.189.778.993.093.8

89.790.791.5

83.3

82.3

86.380.5

81.780.791.691.292.3

84.381.678.2

80.5

83.083.489.979.993.794.6

89.489.991.0

82.9

82.1

86.180.3

81.080.892.792.293.6

84.381.473.5

81.3

83.484.388.480.193.996.7

91.685.487.7

82.3

81.5

85.679.6

80.382.191.190.891.6

83.080.572.4

81.2

82.982.689.979.590.395.7

91.185.287.9

82.2

81.0

85.179.1

79.981.889.588.490.9

83.579.572.2

80.6

82.381.787.379.3

96.6

90.790.291.8

84.879.1

79.682.188.587.689.8

83.179.073.0

79.9

82.381.486.879.0

97.1

90.588.489.6

1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. Forthe ordering address, see the inside front cover. The latest historical revision of the industrialproduction index and the capacity utilization rates was released in December 1997. The recentannual revision is described in an article in the February 1998 issue of the Bulletin. For adescription of the aggregation methods for industrial production and capacity utilization, see"Industrial Production and Capacity Utilization: Historical Revision and Recent Develop-ments." Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. For details about theconstruction of individual industrial production series, see "Industrial Production: 1989Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp.187-204.

2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally adjustedindex of industrial production to the corresponding index of capacity.

3. Primary processing includes textiles; lumber; paper; industrial chemicals; syntheticmaterials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass;primary metals; and fabricated metals.

4. Advanced processing includes foods; tobacco; apparel: furniture and fixtures, printingand publishing; chemical products such as drugs and toiletries; agricultural chemicals; leatherand products; machinery; transportation equipment; instruments: and miscellaneous manufac-tures.

5. Monthly highs, 1978-80; monthly lows, 1982.6. Monthly highs, 1988-89; monthly lows, 1990-91.



2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1

Monthly data seasonally adjusted

Group

MAJOR MARKETS

1 Total index

2 Products3 Final products4 Consumer goods, total5 Durable consumer goods6 Automotive products7 Autos and trucks8 Autos consumer9 Trucks, consumer

10 Auio parts and allied goods11 Other12 Appliances, televisions, and air

conditioners13 Carpeting and furniture14 Miscellaneous home goods15 Nondurable consumer goods16 Foods and tobacco17 Clothing18 Chemical products19 Paper products20 Energy21 Fuels22 Residential utilities

23 Equipment24 Business equipment25 Information processing and related26 Computer and office equipment27 Industrial28 Transit29 Autos and trucks30 Other31 Defense and space equipment32 Oil and gas well drilling33 Manufactured homes

34 Intermediate products, total35 Construction supplies36 Business supplies

37 Materials38 Durable goods materials39 Durable consumer parts40 Equipment parts41 Other42 Basic metal materials43 Nondurable goods materials44 Textile materials45 Paper materials46 Chemical materials47 Other48 Energy materials49 Primary energy50 Converted fuel materials

SPECIAL AGGREGATES

51 Total excluding autos and trucks52 Total excluding motor vehicles and parts53 Total excluding computer and office

equipment54 Consumer goods excluding autos and trucks .55 Consumer goods excluding energy56 Business equipment excluding autos and

trucks57 Business equipment excluding computer and

office equipment58 Materials excluding energy

1992pro-por-tion

100.0

60.546.329.16.12.61.7

9'.1.9

3.5

1.0.8

1.623.010.3244.52.92.9

.82.1

17.2tt.25.41.14.02.51.21.33.3

.6

.2

14.25.38.9

39.520.84.07.69.23.18.91.1L83.92 19.76.33.3

97.195.1

98.227.426.2

12.0

12.129.8

1997avg.

124.5

118.5119.6114.4131.3129.9136.5115.2159.1119.3132.3

168.6117.0120.0110.2109.395.9

119.1109.3111.3109.3112.0

128.8141.9168.1385.6133.3111.2119.7135.075.2

149.7139.1

115.1121.8111.1

134.1158.2139.2221.9125.5120.6113.0109.3112.6115.2110.3103^9101.7108.3

124.3123.8

121.9113.2114.8

144.5

129.1143.7

Apr.

123.1

117.2118.0113.4127 4122.3124.4110 7142.7118.2131.4

164.2116.7120.3109.9109.196.5

118.4108.2111.9109.6112.6

126.0137.9163.0358.4131.6104.6112.5134.475.4

151.4142.9

114.7121.8110.6

132.5155.1137.1213.4124.7118.8113.0109.4112.6115.4109.7103.7101.7107.6

123.2122.7

120.7112.8113.6

141.0

126.0141.6

May

123.3

117.7118.6113.9128.8124.6127.6112.4147.3119.1132.1

166.5117.7120.2110.1108.995.8

119.3108.9112.8111.3113.0

126.8139.0164.4365.3131.5106.7114.6135.275.6

150.7141.9

114.9122.2110.6

132.4155.4134.7216.7124.5119.9111.8106.1112.6113.8109.5103/7102.1106.8

123.4123.0

120.9113.1114.0

141.9

126.9141.4

June

123.5

117.6118.6113.5129.8126.7130.3110.8154.2120.3132.3

165.4119.0120.3109.4108.195.4

119.1109.8109.7111.5108.3

127.7140.2166.8375.8131.7107.3113.6136.376.0

150.9139.1

114.7122.2110.2

133.0156.9136.2220.0125.0121.2111.9108.1110.9113.8110.8103.2101.0107.3

123.6123.1

121.1112.5114.0

143.4

127.7142.5

July

124.5

118.1119.2113.9128.1120.3120.2113 oI3L9119.3134.4

174.8116.4122.1110.3109.695.8

117.3110.8112.4108.8113.7

128.6141.6169.3391.6133.7106.9111.5136.374.9

152.1143.5

114.6121.2110.6

134.9159.3139.2224.6125.9121.1113.5112.3113.8115.11 lo.l104^6102.3109.0

124.8124.3

122.0113.5114.1

145.2

128.6144.6

1997

Aug.

125.2

119.2120.5114.6132.1131.6137.6118.6161.2121.8132.5

169.8117.7119.8110.3108.996.0

119.4109.8112.8111.0113.2

130.9144.6171.1407.1135.8113.3120.3137.975.0

153.2139.5

115.3122.7111.0

134.9160.3140.3227.6126.0121.8112.3108.4114.3113.9108.6103.9102.4106.8

125.1124.6

122.6113.4114.9

147.5

131.2144.8

Sept Oct.

Index (1992 =

125.6

119.1120.3114.5131.9132.8140.9119.9166.5120.1131.1

166.0116.2119.4110.2108.696.0

119.4110.1112.4110.8112.8

130.6144.4172.9414.6133.8114.2120.2135.174.7

153.1137.2

115.2120.4112.2

136.1161.3140.7229.6126.6121.7113.3111.4112/7115.6109.5105 5102^2111.8

125.4124.8

122.9113.0114.7

147.3

130.8145.8

126.5

120.2121.5115.9131.4131.2139.7115.2168.6117.9131.5

169.4116.5118.6112.1109.796.4

123.0111.3116.2112.0117.8

131.3145.5174.3420.3135.9113.0117.0137.574.7

149.1136.9

116.3121.3113.4

136.7163.2141.8233.3127.8122.5113.1111.9113.4115.0109.0104.7101.7110.6

126.5125.9

123.8114.6115.9

149.0

131.8147.0

Nov.

100)

127.5

121.2122.5116.7136.5138.4147.8120.3179.8123.8135.0

177.2122.1119.2111.8110.795.1

121.3111.7113.9106.7117.1

132.8147.5174.7427.3136.3119.9128.2137.374.5

150.0138.1

117.3123.6113.5

137.7165.0142.3237.9128.8124.9114.4111.01122116.5113.7103 910L4108.6

127.2126.6

124.8115.0117.0

149.7

133.5148.6

Dec.

127.9

121.0122.2115.9134.7133.8142.7113.9175.7120.1135.3

178.7116.8122.1111.3110.095 1

121.8110.1113.5109.3115.1

133.4148^6176.0440.1137.8121.2124.6136.274.5

145.9132.4

117.4123.2113.9

138.9166.5146.9240.9128.3122.2116.0112 51117119.1113.3104 2100/7110.9

127.7127.0

125.1114.4116.2

151.5

134.4150.2

Jan.'

127.8

121.3122.6116.6135.6132.6139.9116.0168.2120.9138.0

186.4122.5121.0112.0113.095.2

122.9110.2107.4110.5105.4

133.1147.3175.4457.1136.4119.8121.1133.675.7

154.0144.0

117.4125.2112.9

138.2166.2138.5245.5128.8125.0114.5107 91123119.2109.4103 7102.8105.5

127.7127.3

124.9115.4117.9

150.5

132.7149.4

1998

Feb.'

127.4

120.6121.6115.2134.3131.0137.2105.7172.7121.0136.9

188.1118.1120.8110.5112.093.5

121.7107.9105.1110.0102.2

133.0146J177.4473.1134.3117.9116.4132.676.0

158.9148.6

117.6125.9112.7

138.2165.8139.4246.3127.3124.5115.5108 8113J119.0112.5103.5102.4105.5

127.4126.9

124.4114.0116.6

150.3

131.6149.5

Mar.

127.7

121.0122.0115.5134.313L2135.1105.2168^8124.5136.8

191.1115.2120.8110.9111.294 0

12L5105.6111.8110.1112.2

133.714X8177.9494.1135.6119.5120.6133.975.4

158.6

117.7125.1113.3

138.5165.9138.7247.5127.2122.2114.1107 9110.1118.31115105.6103.2110.2

127.7127.2

124.6114.4116.0

151.0

132.2149.1

Apr.p

127.8

121.2122.3115.5135.5132.3139.3107.7174.8121.0138.2

197.2117.1120.2110.6111.693.6

121.4105.3109.9110.5109.1

134.5149^2181.4509.1134.7121.2123.9135.875.7

150.5

117.5124.9113.2

138.5166.1138.3248.4127.3121.9113.9106 8109.8118.21117105.3103.1109.7

mi127.3

124.6114.2116.3

152.3

133.2149.2



2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued

Group sic-code

1992pro-por-tion

1997

Apr. May July Sept. Oct. Jan r Apr.p

MAJOR INDUSTRIES

59 Total index...

60 Manufacturing61 Primary processing62 Advanced processing

63 Durable goods64 Lumber and products65 Furniture and fixtures66 Stone, clay, and glass

products67 Primary metals68 Iron and steel69 Raw steel70 Nonferrous71 Fabricated metal products. .72 Industrial machinery and

equipment73 Computer and office

equipment74 Electrical machinery75 Transportation equipment. .76 Motor vehicles and parts77 Autos and light trucks78 Aerospace and

miscellaneoustransportationequipment

79 Instruments80 Miscellaneous

81 Nondurable goods82 Foods83 Tobacco products84 Textile mill products85 Apparel products86 Paper and products87 Printing and publishing88 Chemicals and products . . .89 Petroleum products90 Rubber and plastic products91 Leather and products

92 Mining93 Metal94 Coal95 Oil and gas extraction% Stone and earth minerals . . . .

97 Utilities98 Electric99 Gas

SPECIAL AGGREGATES

100 Manufacturing excluding motorvehicles and parts

101 Manufacturing excluding officeand computing machines . .

MAJOR MARKETS

102 Products, total

2425

3233

331,233IPT

333-6,934

35

3573637

371371PT

372-6,93839

491.493PT492.493PT

103 Final104 Consumer goods . .105 Equipment106 Intermediate

100.0

85.426.558.9

45.02.01.4

2.13.11.7.1

1.45.0

1.87.39.54.92.6

4.65.41.3

40.49.41.61.82.23.66.79.91.43.5

.3

6.9.5

1.04.8

.6

7.76.21.6

80.5

83.6

Index (1992= 100)

124.5

127.0118.1131.4

142.3114.9122.5

120.5124.5122.8115.9126.4122.9

171.4

382.3231.5115.6137.2128.3

94.4108.0125.9

111.1109.6112.7109.699.6

112.9104.9115.3109.4126.473.7

106.0106.9109.9103.2118.8

112.5113.1111.0

126.4

124.1

123.1

125.4117.7129.2

139.5115.9123.5

121.1122.3121.2115.1123.5122.5

167.8

354.1223.7110.7129.7117.8

92.0106.6125.1

110.8109.2113.0109.299.8

112.4104.4115.2110.1124.475.9

105.5105.3105.4103.8116.8

112.5112.7111.5

125.2

122.7

123.3

125.7117.7129.6

140.1116.4123.3

119.4124.2123.9115.4124.6122.7

168.0

361.4226.3110.8129.2120.6

92.7107.6125.5

110.7109.2111.5107.299.8

112.6104.5114.5111.4125.475.3

106.7105.9115.9103.4118.2

111.8110.4117.1

125.5

122.9

123.5

126.1117.7130.2

141.2117.0123.5

120.0124.9122.6114.9127.7121.9

168.8

372.3229.7113.0132.5122.4

93.8107.9126.0

110.5108.8109.0109.199.6

111.7104.1114.6111.3125.674.0

105.7109.9107.4102.9120.9

110.9110.7111.9

125.7

123.2

124.5

126.9118.3131.2

142.4116.1124.2

120.9125.2122.2115.5128.8122.4

172.2

388.5235.5112.2130.0115.0

94.6108.0127.0

110.9110.0110.5110.799.7

114.2104.1114.3108.9126.074.0

106.5105.2112.1103.9117.8

113.8113.8113.5

126.7

123.9

125.2

127.9118.5132.5

144.3115.4121.1

120.5125.5121.8116.1129.9122.8

175.9

403.9236.8117.0138.9129.5

95.5109.2126.7

111.0108.9112.5110.799.1

114.4104.4114.5109.7127.971.2

106.3106.0107.7104.1119.9

113.0113.1112.5

127.2

124.8

125.6

128.0118.6132.7

144.4113.3122.0

121.2125.9124.5119.2127.7122.7

173.7

412.0237.5118.8141.2132.3

96.8108.9126.1

111.3108.6112.0111.499.1

113.7105.1115.6110.1127.670.9

106.5105.3109.5104.3117.7

115.1115.7112.7

127.3

124.9

126.5

129.1118,9134,1

145,5112,9123,0

121,0127,4126.4117.7128.6124.4

176.5

418.0240,8118.3139,6130,4

97,3109,7126,5

112.2109.2118.8111.699,3

112,8106,7116 7111,2127472,4

105.9111.1109,6103.1116,2

116,9118.1111.9

128.4

125.9

127.5

130.4120.0135.5

147.7117.0124.1

122.1128.9127.0120.9131.1124.7

177.7

425.7247.4121.6145.9137.7

97.9109.5126.2

112.6110.9115.9112.598.6

113.6107.4116.5108.6129.671.0

106.1113.2111.2102.6119.2

115.3114.7117.8

129.4

127.2

127.9

130.9120.5136.1

148.6114.4124.4

123.4127.2126.1119.2128.5126.7

178.6

438.3249.9123.4146.6132.5

100.6109.0128.5

112.9110.9110.1110.499.3

114.1107.1118.2109.7129.371.3

105.7103.8117.4101.7120.2

114.3114.2115.0

130.0

127.6

127.8

131.1120.6136.4

148.3114.8122.5

122.3129.3127.9122.8131.0125.6

180.3

457.1252.9119.9138.3130.8

101.8109.0128.0

113.6112.9116.9111.899.3

112.4106.5118.7112.3129.369.4

108.4105.3116.0105.0124.3

108.7110.2103.0

130.7

127.8

127.4

130.7120.3135.9

147.8116.8120.6

121.5127.7126.7123.7128.9124.4

179.3

473.3254.0119.2136.7126.7

101.9109.4128.5

113.1112.2115.9109.797.7

114.5105.7118.2111.1129.570.9

107.8113.2108.4105.2122.6

108.5110.6100.7

130.3

127.2

127.7

130.5119.8135.8

148.1116.5121.1

121.9126.0123.8119.5128.6124.6

181.9

494.8254.5118.9136.8124.9

101.3109.0128.3

112.4111.4114.9108.897.7

111.5104.5118.1112.4129.968.9

107.4107.0109.4105.4118.6

115.1115.5113.4

130.1

126.9

130.8119.7136.4

148.7117.1121.3

121.5125.3123.2118.7127.9124.0

182.8

509.8256.9119.6138.9128.7

100.5110.1128.9

112.6112.0114.1108.597.5

I I ! I104.6117.9113.0131.367.4

107.2107.9110.6104.6120.0

112.8112.9112.5

130.4

127.2

Gross value (billions of 1992 dollars, annual rates)

2,001.9

1.552.11,049.6

502.5449.9

2,373.2

1.855.81,195.5

660.0518.1

2,353.4

1,832.91,187.7

644.8520.6

2,365.8

1.844.41,194.1

649.8521.7

2,365.3

1,844.61.190.

654.1521.0

2,368.4

1,849.11,191.0

657.8519.9

2,402.0

1,879.3,205.2674.0523.7

2,396.9

1,875.61,203.3

672.3522.2

2,416.1

1,890.61,215.9

674.5526.5

2,442.2

1,911.01,224.1

686.9532.3

2,435.3

1,904.91,215.7

689.4531.4

2,442.8

1,911.91,224.6

687.3532.0

2,428.0

1,895.81,210.9

685.1532.8

2,437.0

1.903.91,213.0

691.2533.8

2.444.5

1.911.91,215.3

697.0533.5

1. Data in this table also appear in the Board's G.17 (419) ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. For details about theconstruction of individual industrial production series, see "Industrial Production: 1989Developments and Historical Revision,1' Federal Reserve Bulletin, vol. 76, (April 1990), pp.187-204.

2 Standard industrial classification.



2.14 HOUSING AND CONSTRUCTION

Monthly figures at seasonally adjusted annual rates except as noted

1995 1996 1997

June July Aug. Sept. Oct. Nov. Dec, Feb. Mar.

NEW UNITS

1 Permits authorized2 One-family3 Two-family or more4 Started5 One-family6 Two-family or more7 Under constmction at end of period1

8 One-family9 Two-family or more

10 Completed11 One-family12 Two-family or more13 Mobile homes shipped

Merchant builder activity inone-family units

14 Number sold15 Number for sale at end of period1.

Price of units sold (thousandsof dollars)2

16 Median17 Average

EXISTING UNITS (one-family)

18 Number sold

Price of units sitld (thousandsof dollars)'

19 Median20 Average

CONSTRUCTION

21 Total put in place

22 Private23 Residential24 Nonresidential25 Industrial buildings26 Commercial buildings27 Other buildings28 Public utilities and other.. .

29 Public30 Military31 Highway32 Conservation and development33 Other

1,333997335

1,3541,076

278776554222

1,3191.073

247341

667374

133.9158.7

113.1139.1

Private residential real estate activity (thousands of units except as noted)

1,4261,070356

1,4771.101316820584235

1,4051.123283361

757326

140.0166.4

4,087

118.2145.5

1,4421,056387

1,4741,134340834570264

1,4071,122285354

803287'

145.9175.8

4,215

124.1154.2

1.398'1.051'347'

1,5021,132370828566262

1,3071,097210353

810288

145.0179.4

4,120

127.2158.4

1,441'1,052'389'

1,4611,144317836570266

1,3311,074257356

808288

145.9175.5

4,180

126.5157.6

1,445'1,059'386'

1,3831,076307834567267

1.3351.062273354

799286

144.0170.7

4,280

127.5159.1

1,475'1,084'391'

1,5011,174327843571272

1.4331,133300351

809284

146.3177.5

4,300

125.8155.4

1,502'1,106'396'

1,5291,124405853574279

1,3841,063321349

805284

141.5172.9

4,380

124 4154.7

1,475'1,102'373'

1,5231,167356862575287

1,4321,145287352

875280

145.0175.4

4,390

124.3155.0

1,467'1,094'373'

1,5401,130410872'580'292

1,413'1,094'319'353

805'282'

145.9'175.8'

4,370

125.9157.5

1.5531,142411

1,5451,225320888593295

1.3141,007307362

847283

148.0179.3

4,370

126.1156.8

1,6351,176459

1,6161,263353908609299

1,4511,131320377

872284

155.0179.6

4,770

124.5153.9

Value of new construction (millions of dollars)

1,5691,136

4331,5751,232

343913617296

1.4881,132

356374

828290

153.9183.5

4,890

127.1157.2

534,463

407,370231,230176,14032,50568,22327,08948.323

127,0922,983

36,3196.391

81.399

567,179

435,929246,659189,27131,99774,59330,52552,156

131.2502,541

37,8985.807

85,005

600.116

461,401259,575201,82630,70780,82336,99853,298

138,7152,553

41,1485,46789,547

594,195

456,927257,277199,65031,04679,00935,77553,820

137,2682,580

41,5314,95288,205

603,002

464,326258,803205,52331,79682,34636,67254.709

138,6762,738

41,0875,002

89,849

603,684

465,236259.958205,27831,48081,55237,27454,972

138,4482,76741,7155.469

88.497

605,748

468.822263,799205,02330,67580.55138.72955,068

136,9262,451

40.1266.17788,172

611,742

469,560265,422204,13830,04881.48937.70754,894

142,1822,827

39,4844,859

95,012

610,933

470,041267,207202,83429,35281,51137,68154,290

140,8932,740

44.2715,209

88,673

616,027

475,262270,822204,44029,69782,10438,34554,294

140,7652,234

42.1145.91090.507

619,733

483,253275,667207,58629,88584,52837,78755,386

136,4802,483

41,7185 270

87.009

624,635

486,346279,229207,11730,85080,50938.52057,238

138.2892,918

42,9866,19386,192

624,995

489,255283,292205,96331,40981,17638,06055,318

135.7402,865

42,0125,449

85,414

1. Not at annual rate.2. Not seasonally adjusted.z. wot seasonally adjusted.3. Recent data on value of new construction may not be strictly comparable with data for

previous periods because of changes by the Bureau of the Census in its estimating techniques.For a description of these changes, see Construction Reports (C-30-76-5), issued by theCensus Bureau in July 1976.

SOURCE. Bureau of the Census estimates for all series except {1) mobile homes, which areprivate, domestic shipments as reported by the Manufactured Housing Institute and season-ally adjusted by the Census Bureau, and (2) sales and prices of existing units, which arepublished by the National Association of Realtors. All back and current figures are availablefrom the originating agency. Permit authorizations are those reported to the Census Bureaufrom 19,000 jurisdictions beginning in 1994.



2.15 CONSUMER AND PRODUCER PRICES

Percentage changes based on seasonally adjusted data except as noted

Item

CONSUMER PRICES2

(1982-84=100)

1 All items

2 Food. . .

4 All items less food and energy5 Commodities

PRODUCER PRICES(1982=100)

7 Finished goods8 Consumer foods9 Consumer energy

10 Other consumer goods11 Capital equipment

Intermediate materials12 Excluding foods and feeds13 Excluding energy

Crude materials14 Foods15 Energy16 Other

Change from 12months earlier

1997Apr.

2.5

2.8.0

2.71.13.3

.82.4

-1.81.0.2

- .2.2

-2.4-12.5

- . 8

1998Apr.

1.4

2.0-7.4

2.1

-1.2- .5

-8.7.7

- . 6

-1.2.1

-9 .0-6.3-5.8

Change from 3(annua

months earlierrate)

1997

June

1.5

2.1-11.8

2.6.6

3.1

-3.0-3.5

-13.0- . 6- .9

-1.6.3

-10.811.3

-3.7

Sept.

2.3

2.88.31.7

- . 32.6

1.2-1.5

6.01.7.6

.6

.6

-5.021.8

.3

Dec.

1.5

1.5-7.7

2.4.6

3.3

-1.21.5

-5.7- . 3

-2.0

- .6.0

4.15.4

-8.2

1998

Mar.

.2

1.3-21.1

2.4.8

3.0

- 4 2-2.1

-26.2.6

- .3

-4.4-1.2

-13.4-54.6-14.7

Change from 1 month earlier

1997

Dec.

.1

.0-1.8

.2

.0

.3

_ 2<f

- . 6 '-.['

- I

_ T

.0

.0'-13.2'-1 .6 '

1998

Jan.

.0

.3-2.4

2.1.2

- .7- . 6 '

-3 .8 '- . 1

.0'

- .5- .1

-3 .4 '- 8 . 3 '- 2 . 1 '

Feb.

.0-2.2

.3

.2

.3

- .1.4

-1.8.1

- .1

_ 2- .1

- .7-6.5

.1

Mar.

.0

.0-1.2

.1

2

- .3- .4

-1.9.1.0

- .4- .1

.7-4.3-1.9

Apr.

.2

.1- .1

.3

.1

.4

2.4

- .1.3.1

.1

.0

.33.5- .9

Indexlevel,Apr

1998'

162.5

159.8101.9173.0143.8189.7

130.0133.674.7

146.2137.8

123.7134.1

106.271.6

147.4

1. Not seasonally adjusted.2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence

measure of homeownership.

SOURCE. U.S. Department of Labor, Bureau of Labor Statistics.



2.16 GROSS DOMESTIC PRODUCT AND INCOME

Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates

1998

Ql Q2 Q3 Q4 Ql

GROSS DOMESTIC PRODUCT

I Total .

By sourcePersonal consumption expenditures

Durable goodsNondurable goodsServices

Gross private domestic investment . . .Fixed investment

NonresidentialStructuresProducers' durable equipment .

Residential structures

1213

141516

171819

Change in business inventories .Nonfarm

Net exports of goods and servicesExportsImports

Government consumption expenditures and gross investment.FederalState and local

29

By major type of productFinal sales, total

GoodsDurableNondurable

ServicesStructures

Change in business inventoriesDurable goodsNondurable goods

MEMOTotal GDP in chained 1992 dollars

NATIONAL INCOME

30 Total .. .

31 Compensation of employees32 Wages and salaries33 Government and government enterprises . . .34 Other35 Supplement to wages and salaries36 Employer contributions for social insurance37 Other labor income

38 Proprietors' income1

39 Business and professional1 .40 Farm1

41 Rental income of persons"

42 Corporate profits1

43 Profits before tax44 Inventory valuation adjustment45 Capital consumption adjustment

46 Net interest

7,265.4

4,957.7608.5

1,475.82,873.4

1,038.21,008.1

723.0200.6522.4285.1

30.138.1

-86.0818.4904.5

1,355.5509.6846.0

7,235.32,637.91,133.91,503.93,980.7

616.8

30.129.1

1.1

6,742.1

5,912.3

4,215.43,442.6

623.02,819.6

772.9366.0406.8

489.0465.5

23.4

132.8

650.0622.6

-24 .351.6

425.1

7,636.0

5,207.6634.5

1,534.73,038.4

1,116.51,090.7

781.4215.2566.2309.2

25.923.0

-94 .8870.9965.7

1,406.7520.0886.7

7,610.22,759.31,212.01,547.34,187.3

663.6

25.916.99.0

6,928.4

6,254.5

4,426.93,633.6

642.62,991.0

793 3385.7407.6

520.3483.1

37.2

146.3

735.9676.6- 2 . 561.8

425.1

8,079.9

5,485.8659.3

1,592.03,234.5

1,242.51,174.1

846.9230.2616.7327.2

68.461.7

-101.1957.1

1,058.1

1,452.7523.8928.9

8,011.52,876.71,284.01,592.84,430.4

704.4

68.433.035.4

7,188.8

6,649.7

4,703.63,878.6

665.33,213.3

825.0408.4416.6

544.5503.840.7

147.9

805.0729.8

5.569.7

448.7

7,933.6

5,405.7658.4

1,587.43,159.9

1,193.61,127.5

811.3227.4583.9316.2

66.162.2

-98 .892'' ~>

l ,02L0

1,433.1516.1917.0

7,867.42,838.41.248.01,590.44,338.2

690.8

66.131.834.3

7,101.6

6,510.0

4,606.33,792.7

657.83,134.9

813.6401.3412.3

534.6494.4

40.2

149.0

779.6708.4

3.567.7

440.5

8,034.3

5,432.1644.5

1,578.93,208.7

1,242.01,160.8

836.3226.8609.5324.6

81.174.9

-88.7960.3

1,049.0

1.449.0526.1923.0

7,953.22,854.91,275.31,579.64,400.1

698.2

81.146.834.4

7,159.6

6,599.0

4,663.43,842.7

662.03,180.8

820.7405.6415.1

543.6500.0

43.6

148.7

795.1719.8

5.969.4

448.1

8,124.3

5,527.4667.3

1,600.83,259.3

1,250.21,201.3

872.0232.9639.1329.3

48.940.9

-111.3965.8

1,077.1

1,457.9525.7932.3

8,075.32,903.21,305.31,597.94,462.3

709.8

48.918.630.3

7,214.0

6,699.6

4.725.23.897.3

667.73,229.6

827.9410.2417.7

547.2506.3

40.9

148.0

827.3753.4

3.670.3

451.8

8,227.4

5,577.8666.8

1,600.93,310.0

1,284.11,206.8

868.0233.9634.2338.8

77.268.7

-105.3980.0

1,085.4

1,470.9527.3943.6

8,150.22,910.41,307.31,603.14,521.0

718.8

77.234.842.4

7,280.0

6,790.1

4,819.63,981.6

673.73,307.9

837.9416.6421.4

552.5514.3

38.2

145.7

818.1737.3

9.271.6

454.2

8,344.9

5,666.5688.8

1.621.23,356.5

1,352.11,248.6

896.3230.9665.4352.3

103.596.5

-136.8960.4

1,097.2

1,463.1515.3947.7

8,241.32,951.51,335.11.616.44,560.7

729.1

103.547.356.3

7,365.6

6,902.9

4.916.74,066.2

682.13,384.1

850.5425.5425.1

556.7524.2

32.5

143.6

822.5718.4

30.273.9

463.3

1. With inventory valuation and capital consumption adjustments.2. With capital consumption adjustment.

3. For after-tax profits, dividends, and the like, see table 1.48.SOURCE. U.S. Department of Commerce, Survey of Current Business



2.17 PERSONAL INCOME AND SAVING

Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates

1995

QI Q2 Q3 Q4 Ql

PERSONAL INCOME AND SAVING

I Total personal income

2 Wage and salary disbursements3 Commodity-producing industries4 Manufacturing5 Distributive industries6 Service industries7 Government and government enterprises

8 Other labor income9 Proprietors' income1

10 Business and professional11 Farm1

12 Rental income of persons13 Dividends14 Personal interest income15 Transfer payments16 Old-age survivors, disability, and health insurance benefits . .

17 LESS: Personal contributions for social insurance

18 EQUALS: Personal income

19 LESS: Personal tax and nontax payments

20 EQUALS: Disposable personal income

21 LESS: Personal outlays

22 EQUALS: Personal saving

MEMOPer capita (chained 1992 dollars)

23 Gross domestic product24 Personal consumption expenditures .25 Disposable personal income

26 Saving rate (percent)

GROSS SAVING

27 Gross saving

28 Gross private saving

29 Personal saving30 Undistributed corporate profits31 Corporate inventory valuation adjustment

Capital consumption allowances32 Corporate33 Noncorporate

34 Gross government saving35 Federal36 Consumption of fixed capital37 Current surplus or deficit ( - ) , national accounts38 State and local39 Consumption of fixed capital40 Current surplus or deficit ( - ) , national accounts

41 Gross investment

42 Gross private domestic investment43 Gross government investment44 Net foreign investment

45 Statistical discrepancy

6,150.8

3,429.5864.4648.4783.1

1,159.0623.0

406.8489.0465.5

23.4132.8251.9718.9

1,015.0

507.8

293.1

6,150.8

795.1

5,355.7

5,101.1

254.6

25,615.717,459.218,861.0

4.8

1,165.5

1,093.1

254.6172.4

-24.3

428.9224.1

72.4-103.6

70.9-174.4

176.072.9

103.1

1,137.2

1,038.2213.4

-114.4

-28.2

6,495.2

3,632.5909.1674.7823.3

1,257.5642.6

407.6520.3483.1

37.2146.3291.2735.7

1,068.0

537.6

306.3

6,495.2

886.9

5,608.3

5,368.8

239.6

26,085.817,748.719,116.0

4.3

1,267.8

1,125.5

239.6202.1-2.5

452.3230.5

142.3-39 .3

71.2-110.5

181.576.2

105.3

1,207.9

1,116.5224.3

-132.9

-59.9

6,873.9

3,877.4960.3706.0876.3

1,375.5665.3

416.6544.5503.840.7

147.9321.5768.6

1,121.1566.7

323.7

6,873.9

988.7

5,885.2

5,658.5

226.7

26,834.018,168.919,493.0

3.9

1394.3

1,164.2

226.7219.5

5.5

475.6241.2

230.142.871.6

-28.8187.379.5

107.8

1308.3

1,242.5226.0

-160.2

6,746.2

3,791.5942.9694.1856.8

1,334.1657.8

412.3534.6494.4

40.2149.0312.5757.2

1,107.2558.9

318.2

6,746.2

955.7

5,790.5

5,574.6

215.9

26,597.818,045.219,331.0

3.7

1332.9

1,134.0

215.9211.5

3.5

467.4238.0

198.915.971.4

-55 .5182.978.2

104.7

1,268.6

1,193.6223.3

-148.4

6,829.1

3,841.6952.8700.3867.0

1,359.8662.0

415.1543.6500.043.6

148.7318.3766.1

1,117.0564.4

321.3

6,829.1

979.2

5,849.9

5,602.8

247.0

26,765.018,053.919,439.0

4.2

1,178.1

247.0217.6

5.9

472.6239.7

218.834.771.5

-36.8184.179.2

104.9

1323.4

1,242.0227.4

-146.0

6,906.9

3,896.1961.4706.0880.8

1,386.3667.7

417.7547.2506.340.9

148.0324.5772.6

1,125.7569.4

324.8

6,906.9

998.0

5,908.9

5,700.8

208.2

26,897.918,255.719,518.0

3.5

1,411.6

1,159.6

208.2230.0

3.6

478.0242.4

251.960.871.6

-10.8191.179.7

111.4

1308.4

1,250.2227.1

-168.9

7,013.5

3,980.4984.1723.4900.6

1,422.0673.7

421.4552.5514.3

38.2145.7330.7778.4

1,134.8

574.2

330.4

7,013.5

1,022.1

5,991.4

5,755.6

235.8

27,073.318,319.619,681.0

3.9

1,435.8

1,185.2

235.8218.9

9.2

484.5244.9

250.659.771.8

-12.1190.980.8

110.1

1332.7

1,284.1226.1

-177.4

7,125.9

4,065.0997.9730.4919.0

1,466.1682.1

425.1556.7524.2

32.5143.6336.8783.3

1,153.6

584.9

338.2

7,125.9

1,059.7

6,066.3

5,844.1

222.1

27,340.918,558.019,865.0

3.7

1,493.6

1,184.2

222.1224.9

30.2

489.7246.4

309.3120.471.549.0

188.981.3

107.6

1379.2

1,352.1223.8

-196.7

1. With inventory valuation and capital consumption adjustments.2. With capital consumption adjustment.

SOURCE. U.S. Department of Commerce, Survey of Current Business.


A50 International Statistics • July 1998

3.10 U.S. INTERNATIONAL TRANSACTIONS Summary

Millions of dollars; quarterly data seasonally adjusted except as noted1

Item credits or debits

Q4 Ql 02 Q3 Q4P

1 Balance on current account. .̂Merchandise trade balance2

Merchandise exportsMerchandise imports

Military transactions, netOther service transactions, netInvestment income, netU.S. government grantsUS. government pensions and other transfers. . .Private remittances and other transfers

Change in U.S. government assets other than officialreserve assets, net (increase, —)

12 Change in U.S. official reserve assets (increase, - ) .13 Gold14 Special drawing rights (SDRs)15 Reserve position in International Monetary Fund .16 Foreign currencies

17 Change in U.S. private assets abroad (increase, —). .18 Bank-reported claims^19 Nonbank-reported claims20 U.S. purchases of foreign securities, net21 U.S. direct investments abroad, net

22 Change in foreign official assets in United States (increase, + ) . . . .23 U.S. Treasury securities24 Other U.S. government obligations25 Other U.S. government liabilities4

26 Other U.S. liabilities reported by U.S. banks27 Other foreign official assets5

28 Change in foreign private assets in United States (increase, +) . . -29 U.S. bank-reported liabilities3

30 U.S. nonbank-reported liabilities31 Foreign private purchases of U.S. Treasury securities, net.32 Foreign purchases of other U.S. securities, net33 Foreign direct investments in United States, net

34 Allocation of special drawing rights35 Discrepancy36 Due to seasonal adjustment37 Before seasonal adjustment

MEMOChanges in official assets

38 U.S. official reserve assets (increase. - )39 Foreign official assets in United States, excluding line 25

(increase, +)

40 Change in Organization of Petroleum Exporting Countries officialassets in United States (part of line 22)

-129.095-173,560575,871

-749,4313,866

67,8376,808

-11.096-3.420-19.530

-549

-9,7420

-808-2.466-6.468

-296,916-75,108-34,997

-100,074-86,737

110,72968,977

3.735744

34,0083,265

340,50530,17634,588

111,84896,36767,526

0-14,931

-14,931

-9,742

109.985

4,239

-148,184-191,170612.069

-803,2393,786

76,3442.824

-14,933-4,331-20,704

-690

6.6680

370-1.2807,578

-358,422-98,186-64.234-108,189-87.813

122.354111,2534,381720

4,7221.278

425 2019.78431,786172,878133,79876,955

0-46,927

-46,926

6,668

121,634

12,278

-166.446-198,934678.348

-877.2823,83081,462

-14,277-11.688-4.075-22.763

177

-1,0100

-350-3.5752,915

-426,105-151,076-76,298-79.287

-119,444

18,157-7.0194.048539

21,274-685

672,340142,54544,740

189.273107.928

0-97,113

-97,113

-1.010

17,618

12,782

-36.874-48.190157.846

-206,0361.295

20,6971,250

-5,499-1,050-5,377

-3150

-146-28

-141

-153,837-66,657-26,115-30,200-30,865

33,09733.5641,854160

-4.2701.789

161,48238,960-2,91275,32632.44717,661

0-3.2692,669

-5,938

-315

32,937

3,315

-39,916-49,844162,341

-212.185437

20,083-2,015-2.109-988

-5,480

-21

4,480072

1,0553,353

-132,756-62,026-29,466-14.510-26.754

28.89123,289

651478

7,698-3.225

153,39117,38715,21051,28938,82030,685

0-14,069

7,287-21,356

4,480

28,413

9,272

-37.795-47,188171,227

-218,4151,048

20,470-3,270-2.245-1.033-5,577

-268

-2360

-13354

-157

-90,760-27.947-3,984

-21,841-36,988

-5,374-12,108

644654

4,536900

148,43328,100-7,91649,91551,68226.652

0-14,000-1,485

-12,515

-236

-6.028

2,287

-43,114-52,001170.255

-222.2561,398

20,696-4,137-2,231-1,031-5,808

461

-7300

-139-463-128

110,427-30,602-17.848-39,214- 22.763

21.8676,6862,667-51012,391

633

161,42510,10222,04642,91960,40925,949

0-29,482-8,489-20,993

-730

22,377

2.619

-45,619-49,901174,525

-224,426947

20,215-4,856-5,103-1,023-5,898

-4,5240

-150-4.221-153

-92.159-30,501

-3,722-32.936

-27,227-24.886

86-83

-3,3511.007

209,09086,956

43,73138,36224.641

0-39.566

2.683-42,249

-4,524

-27,144

-1,396

1. Seasonal factors are not calculated for lines 12-16. 18-20, 22-34, and 38^10.2. Data are on an international accounts basis. The data differ from the Census basis data,

shown in table 3.11, for reasons of coverage and timing. Military exports are excluded frommerchandise trade data and are included in line 5.

3. Reporting banks include all types of depository institutions as well as some brokers anddealers.

4. Associated primarily with military sales contracts and other transactions arranged withor through foreign official agencies.

5. Consists of investments in U.S. corporate stocks and in debt securities of privalecorporations and state and local governments.

SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of CurrentBusiness.


Summary Statistics A51

3.11 U.S. FOREIGN TRADE1

Millions of dollars; monthly data seasonally adjusted

Item

1 Goods and services, balance

3 Services

4 Goods and services, exports

6 Services

7 Goods and services, imports8 Merchandise

1995'

-99,891-173,729

73,838

795,647575,845219,802

-895,538-749,574-145,964

1996'

-108,574-191,337

82,763

850,775611,983238,792

-959,349-803,320-156,029

1997'

-110,207-197,955

87,748

937,593679,325258,268

-1,047,799-877,279-170,520

1997'

Oct.

-8,650-16.270

7.620

80,58958,46722,122

-89,240-74,738-14,502

Nov.

-9,600-16,605

7,005

79,08857,48221,606

-88,688-74,087-14,601

Dec.

-10,205-16,962

6,757

79,78458,33621,448

-89,989-75,087-14,691

1998

Jan.'

-9,936-17,076

7,140

79,57157,90221,669

-89,506-74,977-14,529

Feb.'

-11,720-18,120

6.400

77.68456,35021,334

-89,404-74,470-14,934

Mar.

-13,209-20,504

7,295

79,14857,21721,931

-92,356-77,720-14,636

Apr.p

-14,458-21,477

7,019

77.11255,28021,832

-91,570-76,757-14,813

t. Data show monthly values consistent with quarterly figures in the U.S. balance ofpayments accounts.

SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau ofEconomic Analysis.

3.12 U.S. RESERVE ASSETS


Asset

1 Total

2 Gold stock, including Exchange

4 Reserve position in International MonetaryFund2

1994

74335

11,05110,039

12,03041,215

1995

85,832

11,05011,037

14,64949,096

1996

75,090

11,04910,312

15,43538,294

1997

Sept.

67,148

11,0509,997

14,04232,059

Oct.

68,036

11,05010,132

14,24332,611

Nov.

67,112

11,05010,120

14,57131,371

Dec.

69,954

11,05010,027

18,07130,809

1998

Jan.

70,003

11,0469,998

18,03930,920

Feb.

70,632

11,05010,217

18,13531,230

Mar.

69,354

11,05010,108

17,97630,220

Apr.p

70,328

11,04810,188

18,21830,874

1. Gold held "under earmark" at Federal Reserve Banks for foreign and internationalaccounts is not included in the gold stock of the United States; see table 3.13, line 3. Goldstock is valued at $42.22 per fine troy ounce.

2. Special drawing rights (SDRs) are valued according to a technique adopted by theInternational Monetary Fund (IMF) in July 1974. Values are based on a weighted average ofexchange rates for the currencies of member countries. From July 1974 through December1980, sixteen currencies were used; since January 1981, five currencies have been used. U.S.

SDR holdings and reserve positions in the IMF also have been valued on this basis since July1974.

3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1 of the yearindicated, as follows: 1970—$867 million; 1971—$717 million; 1972—$710 million; 1979—$1,139 million; 1980—$1,152 million; 1981—$1,093 million; plus net transactions in SDRs.

4. Valued at current market exchange rates.

3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1


Asset

1 Deposits

Held in custody2 U.S. Treasury securities2

3 Earmarked gold3

1994

250

441,86612,033

1995

386

522,17011,702

1996

167

638,04911,197

1997

Sept.

188

655,40610,793

Oct.

190

638,10010,793

Nov.

167

635,09210,793

Dec.

457

620,88510,763

1998

Jan.

215

625,21910.709

Feb.

243

621.95610,705

Mar.

167

630,60210,664

Apr.1"

162

622,22010,651

1. Excludes deposits and U.S. Treasury securities held for international and regionalorganizations.

2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasurysecurities, in each case measured at face (not market) value.

3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; notincluded in the gold stock of the United States.



3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS


Item

1 Total'

By type2 Liabilities reported by banks in the United States"3 U.S. Treasury bills and certificates3

U.S. Treasury bonds and notes

6 U.S. securities other than U.S. Treasury securities5

fiv area1 Europe1 . . .8 Canada9 Latin America and Caribbean

10 Asia11 Africa12 Other countries

1995

630,918

107,394168,534

293 6906.491

54,809

222,40619,47366,721

311,0166,2965,004

1996

758,624

113,098198,921

379,4975.968

61,140

257.91521.29580.623

385.4847,3795,926

1997

Sept.

803,721

138,276161,610

434,2605,879

63,696

276.69421.23394 754

394.55110.2186.269

Oct.

798,696

153.804153.283

421.4125.919

64.278

280,58919.41890,190

391,5419,8127,144

Nov.

791,668

147,796150,102

423.2435,955

64,572

272,68019,27594,135

390,2039,5425,831

Dec.

776,986

135,026148,301

422,8765,994

64,789

263,07818.74997,316

381,19610,1186,527

1998

Jan.

778,915

140,511145,609

421,6876,033

65,075

261.50518.33996.697

386.00710.2136,152

Feb.

778,573

139.171144.324

422.9296.069

66,080

260,84019,06599,081

384,15110,5184,916

Mar.p

788,226

133,275153.335

429,0636,110

66,443

258,48420,28097,229

395,95611,4404,835

1. Includes the Bank for International Settlements.2. Principally demand deposits, time deposits, bankers acceptances, commercial paper,

negotiable time certificates of deposit, and borrowings under repurchase agreements.3. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official

instilutions of foreign countries.4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of

zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginningMarch 1988, 20-year maturity issue and beginning March 1990. 30-year maturity issue;

Venezuela, beginning December 1990. 30-year maturity issue; Argentina, beginning April1993, 30-year maturity issue.

5. Debt securities of U.S. government corporations and federally sponsored agencies, andU.S. corporate stocks and bonds.

SOURCE. Based on U.S. Department of the Treasury data and on data reported to thedepartment by banks (including Federal Reserve Banks) and securities dealers in the UnitedStates, and on the 1989 benchmark survey of foreign portfolio investment in the UnitedStates.

3.16 LIABILITIES TO, AND CLAIMS ON, FOREIGNERSPayable in Foreign Currencies


Reported by Banks in the United States'

Item

1 Banks' liabilities2 Banks' claims3 Deposits4 Other claims5 Claims of banks' domestic customers2

1994

89.25860,71119,66141.05010,878

1995

109,71374,01622,69651,3206,145

1996

103,38366,01822,46743.55110.978

1997

Mar.

110,10272,73126,39046,34110,196

June

110,22485,30528,90056,40510.265

Sept.

120,10591,15832,15459,00410.210

Dec.

116,73882,732'28.35554,377r

8,476

1 Data on claims exclude foreign currencies held by U.S. monetary authorities. 2 Assets owned by customers of the reporting bank located in the United States thatrepresent claims on foreigners held by reporting banks for the accounts of the domesticcustomers.


Bank-Reported Data A53

3.17 LIABILITIES TO FOREIGNERSPayable in U.S. dollars


Reported by Banks in the United States'

Sept. Oct. Jan. Feb.

BY HOLDER AND TYPE OF LIABILITY

1 Total, all foreigners

2 Banks' own liabilities3 Demand deposits4 Time deposits"5 Other'6 Own foreign offices4

7 Banks' custodial liabilities5

8 U.S. Treasury bills and certificates6

9 Other negotiable and readily transferableinstruments7

10 Other

11 Nonmonetary international and regional organizations*12 Banks' own liabilities13 Demand deposits14 Time deposits2

15 Other1

16 Banks' custodial liabilities'17 U.S. Treasury bills and certificates6

18 Other negotiable and readily transferableinstruments

19 Other

20 Official institutions*21 Banks' own liabilities22 Demand deposits23 Time deposits2

24 Other3



27 Other negotiable and readily transferableinstruments7

28 Other

29 Banks10

30 Banks' own liabilities31 Unaffiliated foreign banks32 Demand deposits33 Time deposits2

34 Other3

35 Own foreign offices4




39 Other

40 Other foreigners41 Banks' own liabilities42 Demand deposits43 Time deposits44 Other3




48 Other

MEMO49 Negotiable time certificates of deposit in custody for

foreigners

1,099,549

753,46124,448192,558140,165396,290

346.088197.355

52,20096.533

11,03910,347

214,6565,670

692350

1

275,92883,4472.09830.71750.632

192,481168.534

23,603344

691,412567,834171,54411,758103,47156,315396,290

123,57815,872

13.03594,671

121,17091,83310.57153,71427,548

29.33712,599

15,2211,517

9,103

1,162,148

758,99827,034186,910143,510401,544

403.150236.874

72,01194,265

13,97213,355

295,7847,542

617352

2650

312,01979,4061,511

33,33644,559

232,613198.921

33,266426

694,835562,898161,35413.69289,76557,897

401,544

131.93723.106

17,02791,804

141,322103,33911,80258,02533.512

37,98314.495

21,4532,035

14,573

1,283334'

883,238'32,104198,507'167,676'484,951'

400,096193,325

93,604113.167

11,39011,186

165,4665.704

20469

1332

283,327101,6102,314

41,12058,176

181,717148,301

33,211205

816,263'642,523'157,57217.52783,770'56,275'

484,951'

173,74031,915

35,333106,492

172,354127,91912,24768,15147,521

44,43513,040

24,9276,468

16,046

1.200,331

799,27128,332187,840171,138411.961

401,060205,946

90,686104,428

11,80611,524

7715,9674,786

28253

2290

299,886105,4541,745

39,98463.725

194,432161,610

32,315507

724,645563,884151,92313,85276,68361,388

411,961

160,76130,012

32,88697,863

163,994118,40911.96465,20641,239

45,58514,271

25,2566.058

15.872

1,226,033

824,67733,503193,751193,950403,473

401,356200.215

95.108106.033

13,91413.509

365,1618,312

405148

2570

307,087118.1542.034

41,77074,350

188.933153,283

35.236414

732,963568,367164,89418,35483,16263,378

403,473

164,59633.085

32,06599,446

172.069124,64713,07963,65847,910

47,42213,699

27,5506,173

15,485

1,240,488

834,23735,690191,970180,925425,652

406,251196,476

99,882109,893

12,46912,205

436,3105,852

26446

2171

297,898109,9881,891

39,71668,381

187,910150.102

37,374434

765,574595,667170,01521,31684,62164,078

425.652

169,90732,995

33,826103.086

164,547116,37712,44061,32342,614

48,17013,333

28,4656,372

16,553

1,283334'

883,238'32.104198,507'167,676'484,951'

400,096193,325

93.604113,167

11,39011,186

165,4665,704

20469

283.327101.6102,314

41,12058.176

181,717148.301

33,211205

816,263'642,523'157,57217,52783,770'56,275'

484.951'

173,74031,915

35,333106,492

172,354127,91912,24768,15147.521

44,43513,040

24,9276,468

16.046

1,264,391'

864.362'29.716'187,719'184,826'462,101'

400,029'184,881'

96,945118,203

11,240'11,048'

1755,0235,850'

19285

1070

286,120110,6071,682

38,30670,619

175,513145,609

29,614290

792,291'618,053'155,95215,97479,573'60,405'

462,101'

174,23827,607

35,266111,365

174,740'124,654'11,885'64,817'47,952

50,086'11.580'

31.9586,548

17,038

1,280,908

877,15129,687183,497189,318474,649

403,757186.564

99,370117,823

16,45216.123

745,41610,633

329149

1800

283,495109,391

1,91036,84270,639

174,104144,324

29.643137

797,734621,004146,35516,08475,78954,482

474,649

176,73030,620

35,107111,003

183,227130,63311,61965,45053,564

52,59411,471

34,4406,683

20,791

1,254,000

843,06332,441183,361188,462438,799

410,937191,571

96.332123.034

15.81515,494

985,9879.409

321247

286,610102,5622,05139.36061,151

184,048153,335

30,183530

763,179584,913146,11418,33071,04056,744

438.799

178.26628.499

34,962114,805

188.396140.09411,96266,97461,158

48,3029,490

31,1157,697

22,384

1. Reporting banks include all types of depository institutions as well as some brokers anddealers. Excludes bonds and notes of maturities longer than one year.

2. Excludes negotiable time certificates of deposit, which are included in "Other negotia-ble and readily transferable instruments."

3. Includes borrowing under repurchase agreements.4. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiar-

ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatoryagencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consistsprincipally of amounts owed to the head office or parent foreign bank, and to foreignbranches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.

5. Financial claims on residents of the United States, other than long-term securities, heldby or through reporting banks for foreign customers.

6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to officialinstitutions of foreign countries.

7. Principally bankers acceptances, commercial paper, and negotiable time certificates ofdeposit.

8. Principally the International Bank for Reconstruction and Development. !he Inter-American Development Bank, and the Asian Development Bank. Excludes "holdings ofdollars" of the International Monetary Fund.

9. Foreign central banks, foreign central governments, and the Bank for InternationalSettlements.

10. Excludes central banks, which are included in "Official institutions."



3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States'—Continued

Sept. Oct. Nov. Feb. Mar.1

AREA


51 Foreign countries

52 Europe53 Austria54 Belgium and Luxembourg55 Denmark56 Finland57 France58 Germany59 Greece60 Italy61 Netherlands62 Norway63 Portugal64 Russia65 Spain66 Sweden67 Switzerland68 Turkey69 United Kingdom70 Yugoslavia"71 Other Europe and other former U.S.S.R.12 .

72 Canada

73 Latin America and Caribbean74 Argentina75 Bahamas76 Bermuda77 Brazil78 British West Indies79 Chile80 Colombia81 Cuba82 Ecuador83 Guatemala84 Jamaica85 Mexico86 Netherlands Antilles87 Panama88 Peru89 Uruguay90 Venezuela91 Other

92 AsiaChina

93 Mainland94 Taiwan95 Hong Kong96 India97 Indonesia98 Israel99 Japan

100 Korea (South)101 Philippines102 Thailand103 Middle Eastern oil-exporting countries'"^104 Other

105 Africa106 Egypt107 Morocco108 South Africa109 Zaire110 Oil-exporting countries14 .111 Other

112 Olher113 Australia .114 Other

115 Nonmonetary international and regional organizations.116 International117 Latin American regional16

118 Other regional17

1,099,549

1,088,510

362,8193,537

24,7922,9212.83139,21824,0352,01410,86813,7451.3942.7617.94810.0113,246

43,6254,124

139,183177

26,389

30.468

440,21312,23594,9914,89723,7972.19,0832.8263,659

81,3141,276481

24,5604,6734.264974

1,83611,8087,531

240,595

33,75011,71420,197

3,3732,7084,041

109.1935,7493,092

12,27915,58218,917

7,6412,136

104739

101,7972,855

6,7745,6471,127

11,0399.300

893846

1,162,148

1,148,176

376,5905,128

24,0842,5651,958

35,07824,660

1,83510,94611,110

1,2883,5627,623

17.7071.623

44,5386,738

153,420206

22,521

38,920

467,52913,87788,8955,527

27,701251,465

2.9153,256

211,7671,282

62831,2406,0994,099

8341,890

17,3638,670

249.083

30,43815.99518.7893.9302,2986,051

117,3165 9493,378

10,91216,28517,742

8,1162,012

112458

102,6262,898

7,9386,4791,459

13,97212,099

1,339534

l ,283334r

l,271,944r

420,487'2,717

41,0071,5142,246

46,60723,7371.51511,3787,385317

2,2627,96818,9891.628

39,2584.054

181,904'239

25.762

28,341

536,365'20,199112,2176,911

31,037276,389'4.0723,652

662,0781,494450

33,9725,0854,241893

2,38221,6019.626

269,198'

18.25211,76017,7224,5673,5546,281'

143,40112,959'3 250W0114,95925,992

10,3471,663138

2,15810

3,0603,318

7,2066.304902

11,39010,217

424749

1,200,331

1,188,525

402 4282.691

43.4362.8672.163

43,06525.201

2,0869.8528.4131,3211,958

12,78417,7962,024

36,8624,736

159.189243

25,741

29,592

504.05116.64386.914

6,08433,575

274,9643,3272.657

551.5081.449

52332.640

7,5913,835

9041,997

20.6398,746

234,560

12.66413,46018,5334,4512,8104,534

118,5369,3272,4096,545

14.27927,012

10,3802,050

992.047

143.2802,890

7,5146,3911,123

10,634708464

1,226,033

1,212,119

418,9882.679

46,0672,3591.997

45,05722,117

2,07511,4498,1191,0221,888

11,72221,934

1,34837,075

4,661165,199

23331,987

30,282

502,09917,70089,6316.209

31,680269,997

3 5793,478

711,6711,399

48132,7496,0694,109

9172,184

20,6999,476

242,064

16,23415,20719,7555,1314,5684,200

116,8528,5972,5056,988

14,43627,591

10,3101,742

1052,028

33,1943,238

8,3767,2841,092

13,91411,943

1,277694

1,240,488

1,228,019

425,5842,319

46,2582,1571,969

45,65323,040

1,22910,7137,0101,7931,9876,938

20,9211,614

39,6654,218

177,781234

30,085

30,921

499,51318.35892.390

6,01232,614

263.7633,2833.341

571,7041,361

44532,6784,9954,293

9072,247

22,1118,954

255,000

17,43313,58618,8864,9133,0923,745

133,6909,9822.5585,824

14,01727,274

9,5201,836

691,615

52,9483,047

7,4816,2831,198

12,46910,926

1,053490

l,2S3,334r

l,271,944r

420,487'2,717

41,0071,5142,246

46,60723,737

1.51511.3787,385

3172,2627,968

18.9891,628

39,2584,054

181,904'239

25,762

28,341

536,365'20,199

112,2176,911

31,037276,389'

4.0723.652

662,0781,494

45033,9725,0854,241

8932,382

21,6019,626

269,198'

18,25211,76017,7224.5673,5546,281'

143.40112,959'3,2506,501

14,95925,992

10,3471.663

1382,158

103,0603,318

7,2066,304

902

11,39010,217

424749

l,264,391r

1,253,151'

401,454'2,787

39,0181,6252,177

44,77321,988

1.6769,8546,287

9551,5155.573

19,4131,415

37,340'3,659

176,457'292

24,650

29,035

530,589'19,215

117,457'6.279

31,857266,023'

4,5143,584'

631.867'1,492

44933.2305.7773,921

8762,201

22.339'9,445

274,301'

20,15312,93618,0025,3312,9097,190'

138.68511.7032,5305,858

16.05932.945

10.2911 949

1311.685

73,4703,049

7,4816,3851,096

11,240'10,016'

975249

1,280,908

1,264,456

419.7432,774

38,1781,2152,136

44,99023,290

1,6639.8047,043

8451,4376,118

20,1372,055

37,1824,047

191,181244

25,404

29,470

531,14718,278

110,7788,283

33,026270,860

4,4503,879

581,9971.382

43733,611

5,4174,087

9122,247

21,8879,558

267,957

18,57512,94217,7975,2652.9897,197

140,42612,5302.8724,676

14,14626.736

9,6701,670

731,825

42,9592.619

6,4695,4661,003

16,45214,859

1.217376

1,254,000

1,238,185

390,3922,370

33,2491,0941,549

44,05920,820

1.9889,6288,208

3461,4266,466

16,3191,967

35,7364,154

174.148236

26,629

27.132

528,12118,835

109.0428.273

34,017260,330

3,9964,176

551,7551,437

43135,64711,3483,958

8782,228

21,47710,238

275,201

20,74313,61917,8155,5864,0157,590

137,70011.2333,0099,073

14,60928,598

11,3851,449

882.547

103.5153.016

5.9544,989

965

15,81514,900

536379

11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.12. Includes the Bank for International Settlements. Since December 1992, has

included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman. Qatar, Saudi Arabia, and United Arab

Emirates (Trucial States).14. Comprises Algeria, Gabon, Libya, and Nigeria.

15 Principally ihe International Bank for Reconstruction and Development. Excludes"holdings of dollars" of the International Monetary Fund.

16. Principally the Inter-American Development Bank.17. Asian, African, Middle Eastern, and European regional organizations, except the Bank

for International Settlements, which is included in "Other Europe."


3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States'Payable in U.S. Dollars



Area or country

Sept. Oct. Dec. Feb.


2 Foreign countries

3 Europe4 Austria5 Belgium and Luxembourg6 Denmark7 Finland8 France9 Germany

10 Greece11 Italy12 Netherlands13 Norway14 Portugal15 Russia16 Spain17 Sweden18 Switzerland19 Turkey20 United Kingdom21 Yugoslavia2

22 Other Europe and other former U.S.S.R.

23 Canada

24 Latin America and Caribbean25 Argentina26 Bahamas27 Bermuda28 Brazil29 British West Indies30 Chile31 Colombia32 Cuba33 Ecuador34 Guatemala35 Jamaica36 Mexico37 Netherlands Antilles38 Panama39 Peru40 Uruguay41 Venezuela42 Other

43 Asia .China

4445464748495051525354

MainlandTaiwanHong Kong

IndiaIndonesiaIsraelJapanKorea (South)PhilippinesThailandMiddle Eastern oil-exporting countries'1 .

55 Other

56 Africa57 Egypt58 Morocco59 South Africa60 Zaire . .61 Oil-exporting countries-62 Other

63 Other64 Australia65 Other

66 Nonmonetary international and regional organizations6. .

532,444

530,513

132,150565

7,624403

1,05515,0339,263

4695,3705,346

665888660

2,1662,0807,474

80367,784

1474,355

20.874

256.9446,439

58,8185,741

13,297124,037

4,8644,550

0825457323

18,0249,2293,0081,829

4661,6613,376

115.336

1,0231,713

12,8211,8461,696

73961,46813,975

1,3182,6129,6396.486

2,742210514465

1552

1,000

2,4671,622

845

1,931

599,925

597,321

165,7691,6626,727

492971

15,2468,472

5686,4577,117

808418

1,6693,2111,739

19,7981,109

85,234115

3,956

26,436

274,1537,400

71,8714,129

17,259105,510

5,1366,247

01,031

620345

18,42525,2092,7862,720

5891,7023,174

122,478

1,4011,894

12,8021,9461,762

63359,96718,9011,6972,679

10,4248,372

2,776247524584

0420

1,001

5,7094,5771,132

2,604

708,233r

705,770r

199,880'1,3546,641

9801,233

16,23912,676

4026,2306,141

555777

1,2482,9421,854

28,8461,558

103,14352

7,009'

27,176'

343,820'8,924

89,3798,782

21,696145,471

7,9136,945

01.311

886424

19,51817,8384,3643,491

6292,1294,120'

125,024'

1,579921

13,9902,2002,634'

76859,540'18,123

1,6892,259

10,79010,531

3,530247511805

01,212

755

6.3405,2991,041

2,463

655,419

653376

199,2561,3717,8471,0821,88917,53111,724

4997,67011,5431.713563

1,9275,4311,659

25,3931,410

93,82575

6,104

23,523

302,6787,24366,0739,35319,429

133,7976,3506,543

01,218764374

18,77020,3353,5553,060728

1,7163,370

119,395

2,7981,25013,5682,0862,713907

52,48019,9831,6702,4797,98811,473

3,464251547655

01,123

5.0604.314746

2,043

681,287

679,539

213,472

1,9138,347896

1,80816,83111,617

4637,14511,5031.419615

2.0546,6251,838

29,7791,424

102,40575

6,715

22,815

303,9178,129

73,8388,00820,134133,3097,3046,869

01,307761364

18,58412,2743,9583,185709

1,6423,542

129.622

2,3451.271

15,3382,3602,7311,539

59,43719,9271,4552,3178,490

12,412

3,3422455995570

1,111830

6,3715,2961.075

1,748

699,095

696,609

215,0772,0347,475

8441,259

19,81713,245

4016,871

11,4962.080

6952,2076,3391,804

29,3991,572

100,87074

6,595

24,765

317,5088,761

72,7396,552

20,390141,801

7,7836,976

31,292

787405

18,90417,0644,0893,457

6511,9213,933

129,760

2,1021,000

15,1512,5012,7741,201

60,19519,2581,5332,1808,90912,956

3,332282412743

01,091

6.1674,9621,205

2,486

708,233r

705,770r

199,880'1,3546,641

9801,233

16,23912,676

4026,2306,141

555777

1,2482,9421,854

28,8461,558

103,14352

7,009'

27,176'

343,820'8,924

89,3798,782

21,696145,471

7,9136,945

01,311

886424

19,51817,8384,3643,491

6292,1294,120'

125,024'

1.579921

13,9902,2002,634'

76859,540'18,1231,6892,259

10,79010.531

3,530247511805

01,212

755

6,3405,2991.041

2,463

703,148r

700,231'

204,7631,9175,7141,5311,492

21,47410,849

5046,6555.384

989655

1,2976.9261,736

28,5151,648

99,30253

8.122

25,155

345,787'9,076

90,8239,385

22,541145,935

7,9106,733

01,390

863410

20,515'16,026'4,0743,413

5882,2573,848'

114,415'

2,534847

14,5482,2992,361'

94652,90414.429

1,7942,1649,133

10,456

3,580279498694

01,324

785

6.5315,4191,112

2,917

703,671'

700,916'

212,362'1,9346,021

9071,554

18,96310,752

5045,9745,4471,296

5331,1436,2552,184'

29,119'1,675

110,30753

7,741

24,872

345,389'9,402

84,9828,917

23,987'149,266'

8,2496,729

01,398

868401

21,107'15,594'4,2323,550

5942,3343,779'

108,927'

1,988820

13,4772,1722.266'

98751,89112,741

1,6452,1389,1019,701

3,403304514573

01,219

793

5,9635,139

824

2,755

687,467

684,521

205,5581,6006,111

8951,686

18,20612,930

6206.6216.628

850503

1,1955,8042.798

31,4001,912

97,47861

8,260

29,837

338,6398,780

77,4448,989

25,201147,818

8,1706,781

01,475

904364

20,68117,6194,1083,539

9192,1713,676

101,378

2,762741

12,6071,9272.289

81146,71011,522

1,8132,1448,9199,133

3.593289518580

01,364

5,5165,011

505

2,946

1. Reporting banks include all types of depository institutions as well as some brokers anddealers.

2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.3. Includes the Bank for International Settlements. Since December 1992, has included all

parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.

4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United ArabEmirates (Trucial States).

5. Comprises Algeria, Gabon, Libya, and Nigeria.6. Excludes the Bank for International Settlements, which is included in "Other Europe."



3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States'Payable in U.S. Dollars


Type of claim

1 Total

3 Foreign public borrowers4 Own foreign offices2

5 Unaffiliated foreign banks6 Deposits7 Other8 All other foreigners

9 Claims of banks' domestic customers3

11 Negotiable and readily transferable

12 Outstanding collections and other

MEMO13 Customer liability on acceptances

14 Dollar deposits in banks abroad, reported bynonbanking business enterprises in theUnited States5

1995

655,211

532,44422,518

307,427101,59537,77163,824

100,904

122,76758,519

44.161

20,087

8,410

30,717

1996

743,919

599,92522,216

341,574113,68233,82679,856

122,453

143,994

77,657

51,207

15,130

10,388

39,661

1997'

857,967

708,23320,660

431,685109,22431,04278,182

146,664

149,73473,110

53,967

22,657

9,624

34,148

1997

Sept.

825,412

655,41928,875

374,452104.74431.05673.688

147.348

169.993100.460

51,514

18,019

10,881

38,171

Oct.

681,28729,795

400,207115,09531,71183,384

136,190

39,157

Nov.

699,09527.739

409.314122.35033.85088.500

139,692

37.527

Dec.'

857,967

708,23320,660

431,685109,22431,04278,182

146,664

149,73473,110

53,967

22,657

9,624

34,148

1998

Jan.'

703,14830,184

415,690111,01530,76880,247

146,259

36,328

Feb.

703,67127,030

421,383106,57726,55980.018

148.681

37,119

Mar.p

687,46728,175

402,095107,84325,74382,100

149,354

32,028

1. For banks' claims, data are monthly; for claims of banks' domestic customers, data arefor quarter ending with month indicated.

Reporting banks include all types of depository institution as well as some brokers anddealers.

2. For U.S. banks, includes amounts due from own foreign branches and foreign subsidiar-ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatoryagencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists

principally of amounts due from the head office or parent foreign bank, and from foreignbranches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.

3. Assets held by reporting banks in the accounts of their domestic customers4. Principally negotiable time certificates of deposit, bankers acceptances, and commercial

paper.5. Includes demand and time deposits and negotiable and nonnegotiable certificates of

deposit denominated in U.S. dollars issued by banks abroad

3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States'Payable in U.S. Dollars


Maturity, by borrower and area2

1 Total

By borrower2 Maturity of one year or less3 Foreign public borrowers4 All other foreigners5 Maturity of more than one year6 Foreign public borrowers7 All other foreigners

By areaMaturity of one year or less

8 Europe9 Canada

10 Latin America and Caribbean11 Asia12 Africa13 All other3

Maturity of more than one year14 Europe15 Canada16 Latin America and Caribbean17 Asia18 Africa19 All other3

1994

202,282

170,41115.435

154,97631,8717,838

24,033

56,3816,690

59,58340,567

1,3795,811

4.3583.505

15,7175,1231.5831.385

1995

224,932

178,85714,995

163.86246.075

7,52238,553

55.6226,751

72,50440.296

1.2952,389

4,9952,751

27,6817,9411,4211,286

1996

258,106

211,85915.411

196,44846,247

6,79039,457

55,6908,339

103,25438,078

1,3165,182

6,9652,645

24,9439,3921,361

941

1997

Mar.

276,217

223.83619,935

203,90\52,381

8,90343,478

74,88810,42396,94236,484

1,4513.648

9.5122,944

26,79710,7721,2041,152

June

272,014

210,88217,979

192.90361.13211.40649,726

69,23310,38187,05938,435

1,8993,875

11,8843,174

31,00112,509

1,2641,300

Sept.

280,968

217,94920,123

197.82663.019

8.75254.267

69.2048.460

99.91834,6292,1573,581

11,2023,842

34,98810,3931,2361,358

Dec.

276,558

205,85912,134

193.72570,699

R.52562,174

58.2949,917

97,27733,972

2,2114.188

13,2402,512

42.06910,1591,2361,483

I Reporting banks include all types of depository institutions as welf as some brokers anddealers.

2. Maturity is time remaining until maturity3. Includes nonmonetary international and regional organizations.



3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks'


Area or country

Sept. Sept.

1 Total

! G-10 countries and Switzerland .3 Belgium and Luxembourg.4 France5 Germany6 Italy7 Netherlands8 Sweden9 Switzerland

10 United Kingdom11 Canada12 Japan

13 Other industrialized countries1415161718192021222324

AustriaDenmarkFinlandGreeceNorwayPortugalSpainTurkeyOther Western Europe..South AfricaAustralia

25 OPEC2

2627282930

EcuadorVenezuelaIndonesiaMiddle East countries . . .African countries

394041424344454647

AsiaChina

Mainland . .Taiwan . . . .

IndiaIsraelKorea (South)MalaysiaPhilippinesThailandOther Asta . .

AfricaEgyptMoroccoZaireOther Africa1 .

31 Non-OPEC developing countries

Latin America32 Argentina33 Brazil34 Chile35 Colombia36 Mexico37 Peru38 Other

52 Eastern Europe53 Russia4

54 Other

55 Offshore banking centers56 Bahamas57 Bermuda58 Cayman Islands and other British West Indies59 Netherlands Antilles60 Panama5

61 Lebanon62 Hong Kong, China63 Singapore64 Other5

65 Miscellaneous and unallocated7

409.5

161.97.4

12.012.6774.72.75.9

84.46.9

17.6

26.5.7

1.0.4

3.21.7.8

9.92.13.21.12.3

17.6.5

5.13.37.61.2

7.712.04.72.1

17.9.4

3.1

2.07.33.2

.56.74.43.13.13.1

3.21.61.6

73.510.98.9

18.42.82.4

.118.811.2

.143.6

499.5

191.27.2

19.124.711.83.62.75.1

85.810.021.1

45.71.11.3.9

4.52.01.2

13.61.63.21.0

15.4

24 1.5

3.73.8

15.3.9

96.0

11.28.46.12.6

18.4.5

2.7

1.19.24.2

.416.23.13.32.14.7

1.9

72.910.284

21.41.61.3

I20.010.1

.166.9

551.9

206.013.619.427.311.53.72.76.7

82.410.328.5

50.2.9

2.6.8

5.73.21.3

11.61.94.71.2

16.4

22.17

2.74.8

13.3.6

112.6

12.913.76.82.9

17.3

1.89.44.4

.519.14.44.14.94.5

.4

.7

.0

.9

4.21.03.2

99.211.06.3

32.410.31.4.1

25.013.1

.157.6

574.7

203.411.017.931.513.23.13.35.2

84.710.822.7

61.31.33.4

.75.62.11.6

17.52.03.81.7

21.7

21.2.8

2.94.7

12.3.6

118.6

12.718.36.42.9

16.1.9

3.1

33974.7

.519.35.23.95.24.3

.5

.7

.0

.8

6.31.44.9

101.313.95.3

28.811.1

1.6.1

25.315.4

.162.6

612.8

226.911.418.031.414.94.72.76.3

101.612.223.6

55.51.23.3

.65.62.31.6

13.62.33.42.0

19.6

20.1.9

2.34.9

11.5.5

126.5

14.121.76.72.8

15.41.23.0

2.99.84.2

.621.75.34.75.44.8

5.11.04.1

106.117.34.1

26.113.21.7.1

27.615.9

.172.7

586.2

220.011.317.431915.25.93.06.3

90.514.821.7

62.11.01.7.6

6.13.01.4

16.12.84.81 7

22.8

19.2.9

2.35.4

10.2.4

15.017.86.63.1

16.31.33.0

2.610.43.8

.521.95.55.44.84.1

.6

.7

.01.0

5.31.83.5

105.214.24.0

32.011.71.7.1

26.015.5

.150.0

645.3

228.311.716.629.816.04.02.65.3

104.714.023.7

65.71.11.5.8

6.78.0

.913.22.74.72.0

24.0

19.71.12.45.2

10.7.4

14.320.7

7.04.1

16.21.63.3

2.510.34.3

.521.5

6.05.85.74.1

.7

.7

.1

.9

6.93.73.2

134.720.34.5

37.226.12.0

I27.916.7

.159.6

688.4

255.915.221.534.016.44.63.46.1

112.717.025.1

67.42.01.7

76.35.31.0

15.02.86.31.9

24.5

22.11.12.05.0

13.3.7

131.9

14.922.77.13.9

17.91.73.6

2.710.54.91.0

14.96.56.16.84.4

.9

.6

.0

.9

9.03.65.4

142.521.16.7

41.220.02.2

.130.920.3

.159.6

718.7

274.010.819.335.123.1

7.13.65.5

119.917.532.1

72.71.62.81.46.14.71.2

16.23.45.51.9

27.8

22.51.02.15.7

12.61.2

144.8

16.928.3

7.93.6

17.41.63.7

3.610.65.31.1

16.66.47.07.34.8

1.1.7.0.9

7.2423.0

140.017.27.9

43.115.92.7

I35.217.7

.357.6

747.8

268.412 521.637.322.4

7.74.14.9

115.915.826.2

74.71.83.71.96.24.61.4

14.64.46.11.9

28.1

23.21.32.36.6

11.81.2

141.4

17.527.48.33.6

17.12.03.8

4.39.75.01.5

16.55.65.76.24.6

.9

.7

.0

.9

9.95.14.7

149.620.5

9.852.121 82.3

.127.315.9

.180.8

1. The banking offices covered by these data include U.S. offices and foreign branches ofU.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not coveredinclude U.S. agencies and branches of foreign banks. Beginning March 1994, the data includelarge foreign subsidiaries of U.S. banks. The data also include other types of U.S. depositoryinstitutions as well as some types of brokers and dealers. To eliminate duplication, the dataare adjusted to exclude the claims on foreign branches held by a U.S. office or another foreignbranch of the same banking institution.

These data are on a gross claims basis and do not necessarily reflect the ultimate countryrisk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banksare available in the quarterly Country Exposure Lending Survey published by the FederalFinancial Institutions Examination Council.

2. Organization of Petroleum Exporting Countries, shown individually; other members ofOPEC (Algeria, Gabon, Iran, Iraq. Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and UnitedArab Emirates); and Bahrain and Oman (not formally members of OPEC).

3. Excludes Liberia. Beginning March 1994 includes Namibia.4. As of December 1992. excludes other republics of the former Soviet Union.5. Includes Canal Zone.6. Foreign branch claims only.7. Includes New Zealand. Liberia, and international and regional organizations.



3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises inthe United States


Type of liability, and area or country 1994 1996

1996

Sept. Sept. Dec.p

1 Total

2 Payable in dollars3 Payable in foreign currencies

By type4 Financial liabilities5 Payable in dollars6 Payable in foreign currencies

7 Commercial liabilities8 Trade payables9 Advance receipts and other liabilities


By area or countryFinancial liabilities

12 Europe13 Belgium and Luxembourg14 France15 Germany16 Netherlands17 Switzerland18 United Kingdom

19 Canada

20 Latin America and Caribbean21 Bahamas22 Bermuda23 Brazil24 British West Indies25 Mexico26 Venezuela

27 Asia28 Japan29 Middle Eastern oil-exporting countries'

30 Africa31 Oil-exporting countries

32 All other

Commercial liabilities33 Europe34 Belgium and Luxembourg35 France36 Germany37 Netherlands38 Switzerland39 United Kingdom

40 Canada

41424344454647

484950

5152

Latin America and CaribbeanBahamasBermudaBrazilBritish West IndiesMexicoVenezuela

AsiaJapanMiddle Eastern oil-exporting countries'.

AfricaOil-exporting countries2

54,309

38,29816,011

32,95418,81814,136

21,35510,00511,350

19.4801,875

21,703495

1.7271,961

552688

15.543

629

2,03410180

207998

05

8,4037,314

35

135123

6,773241728604722327

2,444

1,037

1,85719

34516123

574276

10,7414,5551.576

428256

46,448

33,90312,545

24,24112,90311,338

22,20711,01311,194

21,0001,207

15,622369999

1.974466895

10,138

632

1,783591475786612

5,9885,436

27

150122

66

7,700331481767500413

3,568

1,040

1,7401

2059856

416221

10,4213,3151,912

619254

54,798

38,95615,842

26,06511.32714,738

28.73312.72016.013

27,6291.104

16,195632

1,0911,834556699

10,177

1,401

1.6682365078

1.030171

6.4235,869

25

380

9,767479680

1.O02766624

4,303

1,090

2.5746329719614

665328

13.4224,6142,168

1,040532

53 Other'

51,604

36,37415,230

25,44511,27214,173

26,15911,79114,368

25,1021,057

16,086547

1,2202,276519830

9,837

973

1,169502552

76413I

6,9696,602

25

153121

8,680427657949668405

3,663

1,144

2,38633

35519815

446341

12.2274,1491,951

1,020490

702

54,798

38,95615,842

26,06511,32714,738

28,73312,72016,013

27.6291.104

16.195632

1,0911,834556699

10,177

1,401

1,6682365078

1,030171

6,4235,869

25

380

340

9,767479680

1,002766624

4,303

1,090

2.57463

29719614

665328

13,4224,6142,168

1,040532

840

58,750

39,94418,806

29,63311,84717,786

29,11711,51517,602

28,0971,020

20,081769

1.2051,589507694

13,863

602

1,8762932775965161

6,3705,794

72

290

9,551643680

1,047553481

4,165

1,068

2,56343

47920114

633318

13,9684,5022,495

1,037479

930

55,184

38,49416.690

26,86411,20315,661

28,32011,12217,198

27,2911.029

18.530238

1.2801,765466591

12.968

456

1,2791245597769151

6,0155,435

39

290

555

8,711738709852290430

3.827

1,136

2,5013339722526

594304

13,9264,4602,420

941423

1.105

55,476

39,58315,893

25,97011,24814,722

29,50610,96118,545

28,3351,171

18,01989

1,3341,730507645

12,165

399

1,061106452

663761

6,0065,492

23

330

9,362705783950453401

3,834

1,150

2,2253818023323

562322

14,6824,5872,984

929504

58,245

41,83816.407

27.79012,97514,815

30,45510.90019,555

28,8631,592

19,121186

1,6842,018494776

12,201

1,186

1,386141229143604261

5,3945,085

32

600

10,212666763

1,271439375

4,083

1,171

2,15916

20321211

564259

14,9584,4993,109

870408

1,085

1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United ArabEmirates (Trucial Stales).

2. Comprises Algeria, Gabon, Libya, and Nigeria.3. Includes nonmonetary international and regional organizations.


Nonbank-Reported Data A59

3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises inthe United States


Type of claim, and area or country

Sept. Sept.

1 Total


By type4 Financial claims5 Deposits6 Payable in dollars7 Payable in foreign currencies . . .8 Other financial claims9 Payable in dollars

10 Payable in foreign currencies

11 Commercial claims12 Trade receivables13 Advance payments and other claims


By area or countryFinancial claims

EuropeBelgium and LuxembourgFranceGermanyNetherlandsSwitzerlandUnited Kingdom

23 Canada

24 Latin America and Caribbean25 Bahamas26 Bermuda

2930

313233

3435

BrazilBritish West IndiesMexicoVenezuela

AsiaJapanMiddle Eastern oil-exporting countries1

Africa

Oil-exporting countries2

> AH other1

Commercial claims37383940414243

45464748495051

525354

5556

EuropeBelgium and LuxembourgFranceGermanyNetherlandsSwitzerlandUnited Kingdom

Latin America and CaribbeanBahamasBermudaBrazilBritish West IndiesMexicoVenezuela

AsiaJapanMiddle Eastern oil-exporting countries1

AfricaOil-exporting countries ..

57,888

53,8054,083

33,89718.50718,026

48115,39014,3061,084

23,99121,1582,833

21.4732,518

7,93686800540429523

4,649

3,581

19,5362.424

27520

15,22872335

1.871953141

3730

9,540213

1.8811,027311557

2,556

4.1179

23461283

1.243348

6,9822,655708

45467

52,509

48,7113,798

27,39815,13314,654

47912,26510,9761,289

25,11122,9982,113

23.0812,030

7,609193803436517498

4,303

2,851

14,5001,965

81830

10,39355432

1,5798713

2765

9,824231

1,8301,070452520

2,656

1,951

4,36430

27289879993285

7,3121,870974

65487

1,006

63,642

58,6305,012

35.26821,40420,631

77313,86412.0691,795

28,37425,7512,623

25.9302,444

9,282185694276493474

6,119

3.445

19,5771,452140

1,46815,182

45731

2,2211,035

22

17414

10.443226

1,6441,337562642

2,946

2.165

5,27635

2751,303190

1,128357

8,3762,003971

746166

59,092

55,0144,078

34,20019.87719,182

69514.32312,2342,089

24,89222.4542.438

23,5981,294

9,777126733272520432

6,603

4.502

17.2411,746113

1,43812,819

41320

1,8341,001

13

17713

9,288213

1.5321.250424594

2,516

2,083

4,40914

290968119936316

7.2891,919945

731142

1,092

63,642

58,6305,012

35,26821,40420,631

77313,86412,0691,795

28,37425,7512,623

25,9302,444

9,282185694276493474

6,119

3,445

19,5771,452140

1,46815,182

45731

2,2211,035

22

17414

10,443226

1,6441,337562642

2,946

2,165

5,27635275

1.303190

1,128357

8,3762.003971

746166

1,368

66,202

60,2265,976

38,64720,25018,5991,65118,39715,3813,016

27,55524,8012,754

26,2461,309

11.176119760324567570

7.937

4,917

19,7421,894157

1,40415,176

51722

2,06883112

18214

9,863364

1,5141.364582418

2,626

2,381

5,06740159

1,216127

1,102330

8,3482,0651,078

718100

67,039

60.8556,184

39,49022.89621.4051,491

16,59413,3373,257

27,54924,8582.691

26,1131,436

11,677203680281519447

8,604

6.422

18,7252,064188

1,61713,553

49721

1,93476620

17915

9,603327

1,3771,229613389

2.836

2,464

5.24129197

1,13698

1,140451

8,4602,0791,014

61881

1,163

68,646

62,0306.616

39,94521,83720,2781,55918.10814,7953,313

28,70125,1103,591

26.9571.744

13,758360

1,112352764448

9.150

4,279

19,1662,442190

1.50112.947

50815

2.01599915

17416

10.486331

1,6421,395573381

2.904

2.649

5,02822128

1,10198

1,219418

8,5762.048987

764207

65,287

57,3837,904

34,20018,43116,5821,849

15,76911,5764,193

31.08727 4543,633

29.2251,862

12,240406

1,015427677434

7,578

3,313

15,5432,459108

1,31310,311

53736

2,133823II

31915

12,098328

1.7931,612597551

3,652

2,636

5,74227244

1,163109

1,385576

8.6911,9731.104

677119

1,243

1. Comprises Bahrain, Iran. Iraq, Kuwait, Oman. Qatar, Saudi Arabia, and United ArabEmirates (Trucial States).

2. Comprises Algeria, Gabon. Libya, and Nigeria.3. Includes nonmonetary international and regional organizations.



3.24 FOREIGN TRANSACTIONS IN SECURITIES

Millions of dollars

Transaction, and area or country 1996Jan.-Mar. Sept.

U.S. corporate securities

STOCKS

1 Foreign purchases

2 Foreign .sales

3 Net purchases, or sales ( - )

4 Foreign countries

5 Europe6 France7 Germany8 Netherlands9 Switzerland

!0 United Kingdom11 Canada12 Latin America and Caribbean13 Middle East'14 Other Asia15 Japan16 Africa17 Other countries18 Nonmonetary international and

regional organizations

BONDS2

19 Foreign purchases

20 Foreign sales

21 Net purchases, or sales (-> . . .


23 Europe24 France25 Germany26 Netherlands27 Switzerland28 United Kingdom29 Canada30 Latin America and Caribbean .31 Middle East1

32 Other Asia33 Japan34 Afnca35 Other countries36 Nonmdnetary international and

regional organizations . . .

37 Stocks, net purchases, or sales ( —)38 Foreign purchases39 Foreign sales40 Bonds, net purchases, or sales ( - >41 Foreign purchases42 Foreign sales

43 Net purchases, or sales (—), of stocks and bonds


45 Europe46 Canada47 Latin America and Caribbean48 Asia49 Japan50 Africa51 Othet countries

52 Nonmonetary international andregional organizations

590,714578,203

12,511

12,585

5,367

-2,4021,1041,4152,7154,4782,2265,816

-1.600918

-372-85-57

393,953268,487

125,466

125,295

77,5704,4604,4392,1071,170

60,5094,48617,7371,679

23,76214,173

624-563

-59.268450,365509,633-51,3691,114,035

1.165.404

-110,637

-109,766

-57,139

-7,685-11,507-27,831-5,887-1,517-4,087

-871

963,885897.850

66,035

66,175

59,041

3,1349,0753.8337.84522,215-1,1745.264171

2,0614.780471341

614,253477,786

136,467

135,875

74,3013,3002,7423,576187

56,8046,26434,8211,65617,0179,3541.005811

592

314,184285.151

29,033

29,079

26,7611,9881.9411,3103,77110,749-1786,940-610

-3,838-3.201

130-126

193,389143.338

50,051

49,811

26,039

1,073957130

1,38419,9441,923

15,5851,4204,087678106651

80,54675,428

5,118

5,123

5,296

241374820

-4053,559-56081332

-519-313

94-33

50,70941.201

9,508

9,507

5,843

300638135

-5014,109624

1,265-1

1,591-613

8177

106,673105,668

1.005

1,023

5,910-80538757848

2,444-520

-4.09178

-5082298074

-18

58.46244,435

14,027

13,500

3.598

142120369

-1092.611866

3.712-1835,6345,207

II-138

85,14980,133

5,016

5,024

5,318

-65857579

1,0431.875-344-627

15888709-36-190

52,63248,772

3,860

3,948

2,395

546165185712

-104459

3,884199

-3,193-2,883

88116

90,99485,670

5,324

5,358

5,832

299788409

1,4741,232-304

-1.22421

1,071551

7-45

52,48443,171

9.31J

9,302

4,575

-67-474425733

3,069677

7.220142

-3,526-3,764

49165

90,10683.839

6,267

6,319

6,637

665546613683

2,755-2542,646-166

-2,693-1,112

34115

57,47944.334

13,145

13.113

5.41674289

-433760

4.1631,4095,339

78485

-958142244

99,23689,228

10,008

9,998

9.625

492768140

1,1324,588-4782,184-273-944-667

13-129

67,41449,991

17,354

8,249272419199266

6.243114

5,512820

2,42888636195

Foreign securities

-40,243719,145759,388-47.241

1,466,784

1,514,025

-87,484

-87,428

-28,060

-3,794-25.043-24,972-10,014-3,296-2,263

-2,321209,919212,240-2,111326,172328,283

-4 ,432

-4 .273

- 7741.4671,926

-6,711-3.984

-432251

-33462,69063,024-8,006121,636129,642

-8,340

-8,334

-5,544-1.236-146-709-183-273-426

-6

-2.82079,54982,369-739

163,626164.365

-3,559

-3,394

-5,227412

1.899

-1,027-340

-165

2,04570.28668,241-4,468111,000115,468

-2,423

-2,375

-2.528557

-2,1601,6842,261-380452

-48

1.54164.32862,787-3.062115,302118,364

-1,521

-1,435

909

-78-2.918

9361,862-74-210

-86

15662.33362,177-3,72595.48199.206

-3,569

-3,480

-3,963842829

-1,119-413-114

45

-89

-1,09866,65267,750-2,816100,231103,047

-3,914

-3,872

-1,811452537

-3 ,009-1,826

-147106

-42

124.842112.084

12,758

12,762

10.499831627557

1.9563,406

5542.110-171-201

-1,42283

-112

68.49649.013

19.483

19,344

12.374727249364358

9,538400

4.734522

1,174750_7'>212

139

-1,37980,9.1482.3134,430

130.460126,030

3,051

3.079

5,000173560

-2.583-1 .745

-171100

- 2 8

I. Comprises oil-exporting countries as follows: Bahrain. Iran. Iraq, Kuwait, Oman. Qatar,Saudi Arabia, and United Arab Emirates (Trucial States).

2. Includes state and local government securities and securities of U.S. governmentagencies and corporations. Also includes issues of new debt securities sold abroad by U.S.cotporations organized to finance direct investments abroad.


Securities Holdings and Transactions/Interest and Exchange Rates A61

3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions'

Millions of dollars; net purchases, or sales ( —) during period

Area or countryJan.-Mar. Sept.

1 Total estimated

2 Foreign countries ,

3 Europe4 Belgium and Luxembourg5 Germany6 Netherlands7 Sweden8 Switzerland9 United Kingdom

10 Other Europe and former U.S.S.R.11 Canada

12 Latin America and Caribbean13 Venezuela14 Other Latin America and Caribbean15 Netherlands Antilles16 Asia17 Japan18 Africa19 Other

20 Nonmonetary international and regional organizations21 International22 Latin American regional

MEMO23 Foreign countries24 Official institutions25 Other foreign

OU-exponing countries26 Middle East :

27 Africa3

232,241

234,083

118,7811,429

17.980-5822,242

32865,65831,726

2,331

20,785- 6 9

8,43912,41589,73541,366

1,0831,368

-1,842-1.390

-779

234.08385.807

148.276

10,2321

183,596

183,179

144.9203,427

22,4711,746- 4 6 56,028

98.25313.460-811

-2,541655

-536-2.66039.04720,360

1,5231,041

417552173

183,17943,379

139,800

7.116-13

11,779

10,195

24,5561,2602,008

-2,12252

4,27914,3494,730-252

-9,878- 2 6

4,649-14.501-3.887-5.888

287631

1,5841.122

13

10,1956,1874,008

-677I

15,174

14,788

19,152

1382,714

- 316

10912,8563,322-414

-769-691

-2.8802,802

-4.614-2,782

461972

386341

-21

14,7883,091

11,697

16,858

17,094

23,102357

4,847334302690

18,779-2.207

-730

- 1.434107

-3.7232,182

-5.3944,160

451.505

- 2 3 6- 7 4

78

17.094-12,848

29,942

-1.8770

15,909

15,489

10,158384

5,255375-67

1.3955,640

-2,824730

6,512397

-7236,838

-1,002-4.784

-82-827

420451-24

15,4891,831

13,658

3.1750

-9,398

-7.788

-37161

3.052-1.525

- 1 2 42.847

-1,792-2,656-2,132

3,737- 3 6

2.4851,288

-10,359-7 .860

268735

-1.610-1.025

-131

-7,788-367

-7 ,421

-1,5060

5,512'

4.990'

18,215'304

-1,085403

822,419

11,8794,213'

- 1

-3.6194

1,711-5,334-8,757'-6,484'

- 4 3 '-805

522445

32

4.990'-1,189

6,179'

9,957

10.091

6.798252

1,096-792-4301.6905,875-893

266

2.12397

2.949-9231,348

764176

-620

-134-223-29

10,0911,2428,849

4090

-3,690

-4,886

-457704

1,997-1,733

400170

-3,4051.410-517

-8.382-127

-8,2443,522-168

154794

1,196900

10

-4,8866.134

11,020

1,3250

1. Official and private transactions in marketable U.S. Treasury securities having anoriginal maturity of more than one year. Data are based on monthly transactions reports.Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreigncountries.

2. Comprises Bahrain, Iran. Iraq. Kuwait, Oman. Qatar, Saudi Arabia, and United ArabEmirates (Trucial States).

3. Comprises Algeria, Gabon, Libya, and Nigeria.

3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS1

Percent per year, averages of daily figures

Country

Austria3elgium

DenmarkFrance2

Rate on May 31, 1998

Percent

2.52.755.03.753.3

Montheffective

Apr. 1996Oct. 1997Jan. 1998May 1998Oct. 1997

Country

GermanyItalyJapanNetherlandsSwitzerland

Rate on May 31, 1998

Percent

2.55.0

.52.51.0

Montheffective

Apr. 1996Apr. 1998Sept. 1995Apr. 1996Sept. 1996

]. Rates shown are mainly those a! which ihe central bank either discounts or makesadvances against eligible commercial paper or government securities for commercial banks orbrokers. For countries with more than one rate applicable to such discounts or advances, therate shown is the one at which it is understood that the central bank transacts the largestproportion of its credit operations.

2. Since February 1981, the rate has been that at which the Bank ot France discountsTreasury bills for seven to ten days.

3.27 FOREIGN SHORT-TERM INTEREST RATES1

Percent per year, averages of daily figures

Type or country

2 United Kingdom3 Canada4 Germany5 Switzerland

7 France8 Italy9 Belgium

10 Japan

1995

5 936.637.144.432.944.306.43

10 434.731.20

1996

5.385.994.493211.922.913.818 793.19

.58

1997

5.616.813.593.241.583.253.356 863.40

.58

1997

Nov.

5.717.524.023.681.913.653.576 493.72

.53

Dec.

5.797.604.613.671.563.613.576 073.61

.78

1998

Jan.

5.537.494.683.511.271.423.506 053.47

.77

Feb.

5.537.465.023.45.98

3.363.456 123.53

.84

Mar.

5.567.474.933.441.063.423.455 593.61

.74

Apr

5.567.414.943.561,393.523.505 093.69

.66

May

5.577.375.093.551.523.533.504.983.67

.56

1. Rates are for three-month interbank loans, with the following exceptions: Canada,finance company paper; Belgium, three-month Treasury bills; and Japan. CD rate.


A62 International Statistics D July 1998

3.28 FOREIGN EXCHANGE RATES1

Currency units per dollar except as noted

Country/currency unit 1995 1996

1997 1998

Feb. Mar. Apr. May

1 Australia/dollar2 Austria/schilling3 Belgium/franc4 Canada/dollar5 China, P.R./yuan6 Denmark/krone7 FinlanoVmarkka8 France/franc9 Germany/deutsche mark

10 Greece/drachma

11 Hong Kong/dollar12 India/rupee13 Ireland/pound2

14 Italy/lira15 Japan/yen16 Malaysia/ringgil17 Netherlands/guilder18 New Zealand/dollar2

19 Norway/krone20 Ponugal/escudo

21 Singapore/dollar22 South Africa/rand23 South Korea/won24 Spain/peseta25 Sri Lanka/rupee26 SwedenTkrona27 Switzerland/franc28 Taiwan/dollar29 Thailand/baht30 United Kingdom/pound . . . .

MEMO31 United States/dollar3

74.07310.07629.472

1.37258.37005.59994.37634.98641.4321

231.68

7.735732.418

160.351,629.45

93.962.50731.6044

65.6256.3355

149.88

1.41713.6284

772.69124.6451.047

7.14061.1812

26.49524.921

157.85

84.25

78.28310.58930.970

1.36388.33895.80034.59485.11581.5049

240.82

7.734535.506

159.951,542.76

108.782.51541.6863

68.7656.4594

154.28

1.41004.3011

805.00126.6855.289

6.70821.2361

27.46825.359

156.07

87.34

74.36812.20635.807

1.38498.31936.60925.19565.83931.7348

273.28

7.743136.365

151.631,703.81

121.062.81731.9525

66.2477.0857

175.44

1.48574.6072

950.77146.5359.0267.64461.4514

28.77531.072

163.76

66.18712.51036.748

1.42718.30996.77525.37895.95421.7788

279.93

7.745639.400

145.331,743.86

129.733.79072.0051

59.1377.2630

181.91

1.65184.8706

1.494.04150.4661.591

7.79771.4393

32.50244.309

165.97

65.65912.76537.536

1.44098.30946.91905.50066.08321.8165

287.24

7.742539.391

138.191,787.87

129.554.40932.0472

57.9257.5007

185.80

1.74774.9417

1,707.30153.9362.281

8.01931.4748

34.11752.983

163.50

100.52

67.43612.73537.4171.43348.30726.90895.49996.07441.8123

286.70

7.741239.008137.71

1,788.28125.853.81482.0432

58.2867.5530

185.54

1.65094.9337

1.628.42153.6162.3638.07231.4631

32.94845.987164.08

99.93

66.96312.85237.6991.41668.30766.96615.54676.12571.8272

306.05

7.745839.569136.72

1,799.07129.083.74562.059857.261

7.5833187.03

1.61884.9746

1,489.36154.9562.0837.96771.4901

32.52441.366

166.19

65.23112.76037.424

1.42988.30586.91745.50536.07821.8132

315.82

7.749739.703

138.941,791.24

131.753.73762.0422

55.3397.5315

185.81

1.60075.0459

1.391.55153.9962.903

7.82381.5051

33.01639.654

167.23

63.12412.49136.624

1.44528.30846.76625.39665.95281.7753

307.22

7.749040.469

141.741,750.79

134.903.82042.0005

53.8767.4539

181.87

1.63745.0927

1,399.05150.8164.261

7.70261.4790

33.46639.198

163.82

1. Averages of certified noon buying rates in New York for cable transfers. Data in thistable also appear in the Board's G.5 (405) monthly statistical release. For ordering address,see inside front cover.

2. Value in U.S. cents.

3. Index of weighted-average exchange value of U.S. dollar against the currencies of tenindustrial countries. The weight for each of the ten countries is the 1972-76 average worldtrade of that country divided by the average world trade of all ten countries combined. Seriesrevised as of August 1978 (see Federal Reserve Bulletin, vol. 64 (August 1978), p. 700).


A63

Guide to Statistical Releases and Special Tables

STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference

Issue PageAnticipated schedule of release dates for periodic releases June 1998 A72

SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference

Title and Date Issue Page

Assets and liabilities of commercial banksMarch31, 1997 September 1997 A64June 30, 1997 November 1997 A64September 30, 1997 February 1998 A64December 31, 1997 May 1998 A64

Terms of lending at commercial banksMay 1997 October 1997 A64August 1997 November 1997 A68November 1997 February 1998 A68February 1998 May 1998 A66

Assets and liabilities of U.S. branches and agencies of foreign banksMarch31, 1997 August 1997 A64June 30, 1997 November 1997 A72September 30, 1997 February 1998 A72December 31, 1997 May 1998 A70

Pro forma balance sheet and income statements for priced service operationsJune 30, 1997 October 1997 A68September 30, 1997 January 1998 A64March 31, 1998 July 1998 A64

Residential lending reported under the Home Mortgage Disclosure Act1994 September 1995 A681995 September 1996 A681996 September 1997 A68

Disposition of applications for private mortgage insurance1996 September 1997 A76


A64 Special Tables • July 1998

4.31 PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES

A. Pro forma balance sheetMillions of dollars

NOTE. Components may not sum to totals because of rounding. The priced servicesfinancial statements consist of these tables and the accompanying notes.

Some of the 1997 data have been revised.

Item

Short-term assets (Note 1)

investment in marketable securities

Prepaid expensesItems in process of collection

Total short-term assets

fumg-term assets (Note 2)demises

^ases and leasehold improvementsPrepaid pension costs

Total long-term assets

Short-term liabilitiesClearing balances and balances arising from early credit

of uncollected items

Short-term debt

Long-term liabilitiesObligations under capital leasesLong-term debtPostretirement/postemployment benefits obligation

Total long-term liabilities

Total liabilities and equity (Note 3)

610.75,496.3

68.54.6

24.35,892,3

391.8130.825.4

366.4

7,381.24,618.1

97.4

.0191.8207.7

Mar. 31, 1998

12,096.8

914.4

13,011.2

12,096,8

399.5

12,496.3

514.9

13,011.2

Mar. 31, 1997

672.96.056.1

65.53.0

45.41,089.6

383.9137.335.2

303.0

6.796.61,022.0

113.9

.7188.2196.1

7.932.5

859.4

8,792.0

7,932.5

385.0

8.317.5

474.4

8,792.0

B. Pro forma income statementMillions of dollars

Quarter ending Mar. 31, 1996

Revenue from services provided to depository institutions (Note 4) .Operating expenses (Note 5)

Income from operationsImputed costs (Note 6)Interest on floatInterest on debtSales taxesFDIC insurance

Income from operations after imputed costsOther income and expenses (Note 7)

Investment income on clearing balancesEarnings credits

Income before income taxesImputed income taxes (Note 8)

Net incomeMEMOTargeted return on equity (Note 9)

4.34.42.7

.5

88.378.2

193.0

163.3

29.7

n.817.9

10.1

28.0

9.0

19.0

13.7

NOTE. Components may not sum to totals because of rounding. The priced servicesfinancial statements consist of these tables and the accompanying notes.



NOTES TO FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES

(1) SHORT TERM ASSETS

The imputed reserve requirement on clearing balances held al Reserve Banks by depositoryinstitutions reflects a treatment comparable to that of compensating balances held at corre-spondent banks by respondent institutions. The reserve requirement imposed on respondentbalances must be held as vault cash or as nonearning balances maintained at a Reserve Bank:thus, a portion of priced services clearing balances held with the Federal Reserve is shown asrequired reserves on the asset side of the balance sheet. The remainder of clearing balances isassumed to be mvesled in three-month Treasury bills, shown as investment in marketablesecurities.

Receivables are (1) amounts due the Reserve Banks for priced services and (2) the share ofsuspense-account and difference-account balances related to priced services.

Materials and supplies are the inventory value of short-term assets.Prepaid expenses include salary advances and travel advances for priced-service personnel.Items in process of collection is gross Federal Reserve cash items in process of collection

(CIPC) stated on a basis comparable to that of a commercial bank. It reflects adjustmenis forintra-System items that would otherwise be double-counted on a consolidated FederalReserve balance sheet; adjustments for items associated with non-priced items, such as thosecollected for government agencies; and adjustments for items associated with providing fixedavailability or credit before items are received and processed. Among the costs to berecovered under the Monetary Control Act is the cost of float, or net CIPC during the period(the difference between gross CIPC and deferred-a vail ability items which is the portion ofgross CIPC that involves a financing cost), valued ai ihe federal funds rate.

(2) LONG-TERM ASSETS

Consists of long-term assets used solely in priced services, the priced-services portion oflong-term assets shared with nonpnced services, and an estimate of the assets of the Board ofGovernors used in the development of priced services. Effective Jan. 1, 1987, the ReserveBanks implemented the Financial Accounting Standards Board's Statement of FinancialAccounting Standards No. 87, Employers' Accounting for Pensions (SFAS 87). Accordingly,the Federal Reserve Banks recognized credits to expenses of $16.2 million in the first quarterof 1998 and $15.6 million in the first quarter of 1997, and corresponding increases in thisasset account.

(3) LIABILITIES AND EQUITY

Under the matched-book capital structure for assets that are not "self financing," short-termassets are financed with short-term debt. Long-term assets are financed with long-term debtand equity in a proportion equal to the ratio of long-term debt to equity for the fifty largestbank holding companies, which are used in the model for the private-sector adjustment factor(PSAF). The PSAF consists of the taxes that would have been paid and the return on capitallhat would have been provided had priced services been furnished by a private-sector firm.Other short-term liabilities include clearing balances maintained at Reserve Banks anddeposit balances arising from float. Other long-term liabilities consist of obligations on capitalleases.

(4) REVENUE

Revenue represents charges to depository institutions for priced services and is realized fromeach institution through one of two methods: direct charges to an institution's account orcharges against its accumulated earnings credits.

(5) OPERATING EXPENSES

Operating expenses consist of the direct, indirect, and other genera] administrative expensesof the Reserve Banks for priced services plus the expenses for staff members of the Board of

Total floatUnrecovered floatFloat subject to recoverySources of float recovery

Income on clearing balancesAs-of adjustmentsDirect chargesPer-item fees

758.7(10.7)769.4

76.6376.4141.4175.0

Governors working directly on the development of priced services The expenses for Boardstaff' members were $0.7 million in the first quarter of 1998 and $0.7 million in the firstquarter of 1997. The credit to expenses under SFAS 87 (see note 2) is reflected in operatingexpenses.

(6) IMPUTED COSTS

Imputed cosis consist of interest on float, interest on debt, sales laxes. and Ihe FD1Cassessment. Interest on float is derived from the value of float to be recovered, eitherexplicitly or through per-item fees, during the period. Float costs include costs for checks,book-entry securities, noncash collection, ACH, and funds transfers.

Interest is imputed on the debt assumed necessary to finance priced-service assets. Thesales taxes and FDIC assessment that the Federal Reserve would have paid had it been aprivate-sector firm are among the components of the PSAF (see note 3).

The following list shows the daily average recovery of float by the Reserve Banks for thefirst quarter of 1998 and 1997 in millions of dollars:

1998 1997

685.011.3

673.7

67.7346.1146.4113.4

Unrecovered float includes float generated by services to government agencies and by othercentral bank services. Float recovered through income on clearing balances is the result of theincrease in investable clearing balances; the increase is produced by a deduction for float forcash items in process of collection, which reduces imputed reserve requirements. The incomeon clearing balances reduces the float to be recovered through other means. As-of adjustmentsand direct charges are mid-week closing float and interterritory check float, which may berecovered from depositing institutions through adjustments to the institution's reserve orclearing balance or by valuing the float at the federal funds rate and billing the institutiondirectly. Float recovered through per-item fees is valued at the federal funds rate and has beenadded to the cost base subjeci lo recovery in the first quarter of 1998.

(7) OTHER INCOME AND EXPENSES

Consists of investment income on clearing balances and the cost of earnings credits.Investment income on clearing balances represents the average coupon-equivalent yield onthree-month Treasury bills applied to the total clearing balance maintained, adjusted for theeffect of reserve requirements on clearing balances. Expenses for earnings credits granted todepository institutions on their clearing balances are derived by applying the average federalfunds rate to the required portion of the clearing balances, adjusted for the net effect ofreserve requirements on clearing balances.

(8) INCOME TAXES

Imputed income taxes are calculated at the effective tax rate derived from the PSAF model{see note 3).

(9) RETURN ON EQUITY

Represents the after-tax rate of return on equity that the Federal Reserve would have earnedhad it been a private business firm, as derived from the PSAF model (see note 3). This amountis adjusted to reflect the recovery of automation consolidation costs of $2.6 million for firstquarter of 1998 and $2.3 million for the first quarter of 1997. The Reserve Banks plan torecover these amounts, along with a finance charge, by the end of the year 2001.


A66

Index to Statistical Tables

References are to pages A3—A65 although the prefix "A" is omitted in this index

ACCEPTANCES, bankers (See Bankers acceptances)Assets and liabilities (See also Foreigners)

Commercial banks, 15-21Domestic finance companies, 32, 33Federal Reserve Banks, 10Foreign-related institutions, 20

AutomobilesConsumer credit, 36Production, 44, 45

BANKERS acceptances, 5, 10, 22, 23Bankers balances, 15-21. (See also Foreigners)Bonds (See also U.S. government securities)

New issues, 31Rates, 23

Business activity, nonfinancial, 42Business loans (See Commercial and industrial loans)

CAPACITY utilization, 43Capital accounts

Commercial banks. 15-21Federal Reserve Banks, 10

Central banks, discount rates, 61Certificates of deposit, 23Commercial and industrial loans

Commercial banks, 15-21Weekly reporting banks, 17, 18

Commercial banksAssets and liabilities, 15-21Commercial and industrial loans, 15-21Consumer loans held, by type and terms, 36Real estate mortgages held, by holder and property, 35Time and savings deposits, 4

Commercial paper, 22, 23, 32Condition statements (See Assets and liabilities)Construction, 42, 46Consumer credit, 36Consumer prices, 42Consumption expenditures. 48, 49Corporations

Profits and their distribution, 32Security issues, 31, 61

Cost of living (See Consumer prices)Credit unions, 36Currency in circulation, 5, 13Customer credit, stock market, 24

DEBT (See specific types of debt or securities)Demand deposits, 15-21Depository institutions

Reserve requirements, 8Reserves and related items, 4, 5, 6, 12

Deposits (See also specific types)Commercial banks, 4, 15-21Federal Reserve Banks, 5, 10

Discount rates at Reserve Banks and at foreign central banks andforeign countries (See Interest rates)

Discounts and advances by Reserve Banks (See Loans)Dividends, corporate, 32

EMPLOYMENT, 42Eurodollars. 23, 61

FARM mortgage loans, 35Federal agency obligations, 5. 9, 10, 11, 28, 29

Federal credit agencies, 30Federal finance

Debt subject to statutory limitation, and types and ownershipof gross debt, 27

Receipts and outlays, 25, 26Treasury financing of surplus, or deficit, 25Treasury operating balance, 25

Federal Financing Bank, 30Federal funds, 23, 25Federal Home Loan Banks, 30Federal Home Loan Mortgage Corporation, 30, 34, 35Federal Housing Administration, 30, 34, 35Federal Land Banks, 35Federal National Mortgage Association, 30, 34, 35Federal Reserve Banks

Condition statement, 10Discount rates (See Interest rates)U.S. government securities held, 5. 10, 11, 27

Federal Reserve credit, 5, 6, 10, 12Federal Reserve notes, 10Federal Reserve System

Balance sheet for priced services, 64, 65Condition statement for priced services, 64, 65

Federally sponsored credit agencies, 30Finance companies

Assets and liabilities, 32Business credit, 33Loans, 36Paper, 22, 23

Float, 5Flow of funds, 37^41Foreign currency operations, 10Foreign deposits in U.S. banks, 5Foreign exchange rates, 62Foreign-related institutions, 20Foreign trade, 51Foreigners

Claims on, 52, 55, 56, 57, 59Liabilities to, 51, 52, 53, 58, 60, 61

GOLDCertificate account, 10Stock, 5, 51

Government National Mortgage Association, 30, 34, 35Gross domestic product, 48, 49

HOUSING, new and existing units, 46

INCOME and expenses. Federal Reserve System, 64, 65Income, personal and national, 42, 48, 49Industrial production, 42, 44Insurance companies, 27. 35Interest rates

Bonds, 23Consumer credit, 36Federal Reserve Banks, 7Foreign central banks and foreign countries, 61Money and capital markets, 23Mortgages, 34Prime rate, 22

International capital transactions of United States. 50-61International organizations, 52, 53, 55, 58, 59Inventories, 48Investment companies, issues and assets, 32


A67

Investments (See also specific types)Commercial banks, 4, 15-21Federal Reserve Banks, 10, 11Financial institutions, 35

LABOR force, 42Life insurance companies (See Insurance companies)Loans (See also specific types)

Commercial banks, 15-21Federal Reserve Banks, 5, 6, 7, 10, 11Federal Reserve System, 64, 65Financial institutions, 35Insured or guaranteed by United States, 34, 35

MANUFACTURINGCapacity utilization, 43Production, 43, 45

Margin requirements, 24Member banks (See also Depository institutions)

Reserve requirements, 8Mining production, 45Mobile homes shipped, 46Monetary and credit aggregates, 4, 12Money and capital market rates, 23Money stock measures and components, 4, 13Mortgages (See Real estate loans)Mutual funds, 13, 32Mutual savings banks (See Thrift institutions)

NATIONAL defense outlays, 26National income, 48

OPEN market transactions, 9

PERSONAL income, 49Prices

Consumer and producer, 42, 47Stock market, 24

Prime rate, 22Producer prices, 42, 47Production, 42, 44Profits, corporate, 32

REAL estate loansBanks, 15-21,35Terms, yields, and activity, 34Type of holder and property mortgaged, 35

Reserve requirements, 8Reserves

Commercial banks, 15-21Depository institutions, 4, 5, 6, 12Federal Reserve Banks, 10U.S. reserve assets, 51

Residential mortgage loans, 34, 35

Retail credit and retail sales, 36, 42

SAVINGFlow of funds, 37—41National income accounts, 48

Savings institutions, 35, 36, 37-41Savings deposits (See Time and savings deposits)Securities (See also specific types)

Federal and federally sponsored credit agencies, 30Foreign transactions, 60New issues, 31Prices, 24

Special drawing rights, 5, 10, 50, 51State and local governments

Holdings of U.S. government securities, 27New security issues, 31Rates on securities, 23

Stock market, selected statistics, 24Stocks (See also Securities)

New issues, 31Prices, 24

Student Loan Marketing Association, 30

TAX receipts, federal, 26Thrift institutions, 4. (See also Credit unions and Savings

institutions)Time and savings deposits, 4, 13, 15-21Trade, foreign, 51Treasury cash. Treasury currency, 5Treasury deposits, 5, 10, 25Treasury operating balance, 25

UNEMPLOYMENT, 42U.S. government balances

Commercial bank holdings, 15-21Treasury deposits at Reserve Banks, 5, 10, 25

U.S. government securitiesBank holdings, 15-21,27Dealer transactions, positions, and financing, 29Federal Reserve Bank holdings, 5, 10, 11, 27Foreign and international holdings and

transactions, 10, 27, 61Open market transactions, 9Outstanding, by type and holder, 27, 28Rates, 23

U.S. international transactions, 50-62Utilities, production, 45

VETERANS Administration, 34, 35

WEEKLY reporting banks, 17, 18Wholesale (producer) prices, 42, 47

YIELDS (See Interest rates)



Federal Reserve Board of Governorsand Official Staff

ALAN GREENSPAN, ChairmanALICE M. RIVLIN, Vice Chair

EDWARD W. KELLEY, JR.LAURENCE H. MEYER

OFFICE OF BOARD MEMBERS

LYNN S. FOX, Assistant to the BoardDONALD J. WINN, Assistant to the BoardTHEODORE E. ALLISON, Assistant to the Board for Federal

Reserve System AffairsWINTHROP P. HAMBLEY, Special Assistant to the BoardBOB STAHLY MOORE, Special Assistant to the BoardDIANE E. WERNEKE, Special Assistant to the Board

LEGAL DIVISION

J. VIRGIL MATTINGLY, JR., General CounselSCOTT G. ALVAREZ, Associate General CounselRICHARD M. ASHTON, Associate General CounselOLIVER IRELAND, Associate General CounselKATHLEEN M. O'DAY, Associate General CounselKATHERINE H. WHEATLEY, Assistant General Counsel

OFFICE OF THE SECRETARY

JENNIFER J. JOHNSON, Secretary

ROBERT DEV. FRIERSON, Associate SecretaryBARBARA R. LOWREY, Associate Secretary and Ombudsman

DIVISION OF BANKINGSUPERVISION AND REGULATIONRICHARD SPILLENKOTHEN, Director

STEPHEN C. SCHEMERING, Deputy DirectorHERBERT A. BIERN, Associate DirectorROGER T. COLE, Associate DirectorWILLIAM A. RYBACK, Associate DirectorGERALD A. EDWARDS, JR., Deputy Associate DirectorSTEPHEN M. HOFFMAN, JR., Deputy Associate DirectorJAMES V. HOUPT, Deputy Associate DirectorJACK P. JENNINGS, Deputy Associate DirectorMICHAEL G. MARTINSON, Deputy Associate DirectorSIDNEY M. SUSSAN, Deputy Associate DirectorMOLLY S. WASSOM, Deputy Associate DirectorHOWARD A. AMER, Assistant DirectorNORAH M. BARGER. Assistant DirectorBETSY CROSS, Assistant DirectorRICHARD A. SMALL. Assistant DirectorWILLIAM SCHNEIDER, Project Director,

National Information Center

DIVISION OF INTERNATIONAL FINANCEEDWIN M. TRUMAN, Staff DirectorLEWIS S. ALEXANDER, Associate DirectorDALE W. HENDERSON, Associate DirectorPETER HOOPER III, Associate DirectorKAREN H. JOHNSON, Associate DirectorDAVID H. HOWARD, Senior AdviserDONALD B. ADAMS, Assistant DirectorTHOMAS A. CONNORS, Assistant Director

DIVISION OF RESEARCH AND STATISTICS

MICHAEL J. PRELL, Director

EDWARD C. ETTIN, Deputy DirectorDAVID J. STOCKTON, Deputy DirectorWILLIAM R. JONES, Associate DirectorMYRON L. KWAST, Associate DirectorPATRICK M. PARKINSON, Associate DirectorTHOMAS D. SIMPSON, Associate DirectorLAWRENCE SLIFMAN, Associate DirectorMARTHA S. SCANLON, Deputy Associate DirectorPETER A. TINSLEY, Deputy Associate DirectorDAVID S. JONES, Assistant DirectorSTEPHEN D. OLINER, Assistant DirectorSTEPHEN A. RHOADES, Assistant DirectorJANICE SHACK-MARQUEZ, Assistant DirectorCHARLES S. STRUCKMEYER, Assistant DirectorALICE PATRICIA WHITE, Assistant Director

JOYCE K. ZICKLER, Assistant DirectorGLENN B. CANNER, Senior AdviserJOHN J. MINGO, Senior Adviser

DIVISION OF MONETARY AFFAIRSDONALD L. KOHN, Director

DAVID E. LINDSEY, Deputy DirectorBRIAN F. MADIGAN, Associate DirectorRICHARD D. PORTER, Deputy Associate DirectorVINCENT R. REINHART, Assistant DirectorNORMAND R.V. BERNARD, Special Assistant to the Board

DIVISION OF CONSUMERAND COMMUNITY AFFAIRSDOLORES S. SMITH, Director

GLENN E. LONEY, Deputy DirectorSANDRA F. BRAUNSTEIN, Assistant DirectorMAUREEN P. ENGLISH. Assistant DirectorADRIENNE D. HURT, Assistant DirectorIRENE SHAWN MCNULTY, Assistant Director


ROGER W. FERGUSON, JR.EDWARD M. GRAMLICH

A69

OFFICE OFSTAFF DIRECTOR FOR MANAGEMENT

S. DAVID FROST, Staff DirectorSHEILA CLARK, EEO Programs DirectorJOHN R. WEIS, Adviser

MANAGEMENT DIVISION

S. DAVID FROST, Director

STEPHEN J. CLARK, Associate Director, Finance FunctionDARRELL R. PAULEY, Associate Director, Human Resources

Function

DIVISION OF SUPPORT SERVICES

ROBERT E. FRAZIER, Director

GEORGE M. LOPEZ, Assistant DirectorDAVID L. WILLIAMS. Assistant Director

DIVISION OF INFORMATION RESOURCESMANAGEMENT

STEPHEN R. MALPHRUS, Director

MARIANNE M. EMERSON, Assistant DirectorPo KYUNG KIM, Assistant DirectorRAYMOND H. MASSEY, Assistant DirectorEDWARD T. MULRENIN, Assistant DirectorDAY W. RADEBAUGH, JR., Assistant DirectorELIZABETH B. RIGGS, Assistant DirectorRICHARD C. STEVENS, Assistant Director

DIVISION OF RESERVE BANK OPERATIONSAND PAYMENT SYSTEMS

CLYDE H. FARNSWORTH, JR., Director

DAVID L. ROBINSON, Deputy Director (Finance and Control)LOUISE L. ROSEMAN, Associate DirectorPAUL W. BETTGE, Assistant DirectorJACK DENNIS. JR.. Assistant DirectorEARL G. HAMILTON. Assistant DirectorJOSEPH H. HAYES, JR., Assistant DirectorJEFFREY C. MARQUARDT, Assistant DirectorMARSHA REIDHILL, Assistant Director

OFFICE OF THE INSPECTOR GENERAL

BARRY R. SNYDER. Inspector GeneralDONALD L. ROBINSON, Assistant Inspector General



Federal Open Market Committeeand Advisory Councils

FEDERAL OPEN MARKET COMMITTEE

MEMBERS

ALAN GREENSPAN, Chairman

ROGER W. FERGUSON. JR.

EDWARD M. GRAMLICH

THOMAS M. HOENIG

JERRY L. JORDAN

EDWARD W. KELLEY, JR.

LAURENCE H. MEYER

CATHY E. MINEHAN

WILLIAM J. MCDONOUGH, Vice Chairman

WILLIAM POOLE

ALICE M. RIVLIN

ALTERNATE MEMBERS

EDWARD G. BOEHNE

ROBERT D. MCTEER, JR.

MICHAEL H. MOSKOW

ERNEST T. PATRIKIS

GARY H. STERN

STAFF

DONALD L. KOHN, Secretary and EconomistNORMAND R.V. BERNARD, Deputy SecretaryGARY P. GILLUM, Assistant SecretaryJ. VIRGIL MATTINGLY, JR., General CounselTHOMAS C. BAXTER, JR., Deputy General CounselMICHAEL J. PRELL, Economist

EDWIN M. TRUMAN, Economist

LYNN E. BROWNE, Associate Economist

STEPHEN G. CECCHETTI, Associate EconomistWILLIAM G. DEWALD, Associate EconomistCRAIG S. HAKKIO, Associate EconomistDAVID E. LINDSEY, Associate EconomistMARK S. SNIDERMAN, Associate EconomistTHOMAS D. SIMPSON, Associate EconomistDAVID J. STOCKTON, Associate Economist

PETER R. FISHER, Manager, System Open Market Account

FEDERAL ADVISORY COUNCIL

WILLIAM M. CROZIER, JR., First DistrictDOUGLAS A. WARNER III, Second DistrictWALTER E. DALLER, JR., Third DistrictROBERT W. GILLESPIE, Fourth DistrictKENNETH D. LEWIS, Fifth DistrictSTEPHEN A. HANSEL, Sixth District

THOMAS H. JACOBSEN, President

CHARLES T. DOYLE, Vice President

NORMAN R. BOBINS, Seventh DistrictTHOMAS H. JACOBSEN, Eighth DistrictRICHARD A. ZONA, Ninth DistrictC. Q. CHANDLER, Tenth DistrictCHARLES T. DOYLE, Eleventh DistrictDAVID A. COULTER, Twelfth District

HERBERT V. PROCHNOW, Secretary Emeritus

JAMES ANNABLE, Co-Secretary

WILLIAM J. KORSVIK, Co-Secretary


A71

CONSUMER ADVISORY COUNCIL

WILLIAM N. LUND, Augusta, Maine, ChairmanYVONNE S. SPARKS, St. Louis, Missouri, Vice Chairman

RICHARD S. AMADOR, LOS Angeles, CaliforniaWALTER J. BOYER, Garland, TexasWAYNE-KENT A. BRADSHAW, LOS Angeles, CaliforniaJEREMY EISLER, Ocean Springs, MississippiROBERT F. ELLIOT, Prospect Heights, IllinoisHERIBERTO FLORES, Springfield, MassachusettsDWIGHT GOLANN, Boston, MassachusettsMARVA H. HARRIS, Pittsburgh, PennsylvaniaKARLA IRVINE, Cincinnati, OhioFRANCINE C. JUSTA, New York, New YorkJANET C. KOEHLER, Jacksonville, FloridaGWENN KYZER, Allen, TexasJOHN C. LAMB, Sacramento, CaliforniaERROL T. LOUIS, Brooklyn, New York

MARTHA W. MILLER, Greensboro, North CarolinaDANIEL W. MORTON, Columbus. OhioCHARLOTTE NEWTON, Springfield, VirginiaCAROL PARRY, New York, New YorkPHILIP PRICE, JR., Philadelphia, PennsylvaniaDAVID L. RAMP, Minneapolis, MinnesotaMARILYN ROSS, Omaha, NebraskaMARGOT SAUNDERS, Washington, D.C.

ROBERT G. SCHWEMM, Lexington, KentuckyDAVID J. SHIRK, Eugene, OregonGAIL SMALL, Lame Deer, MontanaGREGORY D. SQUIRES, Milwaukee, WisconsinGEORGE P. SURGEON, Chicago, IllinoisTHEODORE J. WYSOCKI, JR., Chicago, Illinois

THRIFT INSTITUTIONS ADVISORY COUNCIL

CHARLES R. RINEHART, Irwindale, California, PresidentWILLIAM A. FITZGERALD, Omaha, Nebraska, Vice President

GAROLD R. BASE, Piano, TexasDAVID A. BOCHNOWSKI, Munster, IndianaDAVID E. A. CARSON, Bridgeport, ConnecticutRICHARD P. COUGHLIN, Stoneham, MassachusettsSTEPHEN D. HAILER, Akron, Ohio

F. WELLER MEYER, Falls Church, VirginiaEDWARD J. MOLNAR, Harleysville, PennsylvaniaGUY C. PINKERTON, Seattle, WashingtonTERRY R. WEST, Jacksonville, FloridaFREDERICK WILLETTS, III, Wilmington, North Carolina


A72 Federal Reserve Bulletin D July 1998

Federal Reserve Board Publications

For ordering assistance, write PUBLICATIONS SERVICES,MS-127, Board of Governors of the Federal Reserve System,Washington, DC 20551, or telephone (202) 452-3244, or FAX(202) 728-5886. You may also use the publications orderform available on the Boards World Wide Web site(http://www.bog.frb.fed.us). When a charge is indicated, paymentshould accompany request and be made payable to the Board ofGovernors of the Federal Reserve System or may be ordered viaMastercard, Visa, or American Express. Payment from foreignresidents should be drawn on a U.S. bank.

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ANNUAL STATISTICAL DIGEST: period covered, release date, num-ber of pages, and price.

198119821983198419851986198719881980-89199019911992199319941990-95

October 1982December 1983October 1984October 1985October 1986November 1987October 1988November 1989March 1991November 1991November 1992December 1993December 1994December 1995November 1996

239 pp.266 pp.264 pp.254 pp.231 pp.288 pp.272 pp.256 pp.712 pp.185 pp.215 pp.215 pp.281 pp.190 pp.404 pp.

$ 6.50$ 7.50$11.50$12.50$15.00$15.00$15.00$25.00$25.00$25.00$25.00$25.00$25.00$25.00$25.00

SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OFCHARTS. Weekly. $30.00 per year or $.70 each in the UnitedStates, its possessions, Canada, and Mexico. Elsewhere,$35.00 per year or $.80 each.

REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERALRESERVE SYSTEM.

ANNUAL PERCENTAGE RATE TABLES (Truth in Lending—Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp.Vol. II (Irregular Transactions). 1969. 116 pp. Each volume$5.00.

GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 672 pp. $8.50 each.FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated

monthly. (Requests must be prepaid.)Consumer and Community Affairs Handbook. $75.00 per year.Monetary Policy and Reserve Requirements Handbook. $75.00

per year.Securities Credit Transactions Handbook. $75.00 per year.The Payment System Handbook. $75.00 per year.

Federal Reserve Regulatory Service. Four vols. (Contains allfour Handbooks plus substantial additional material.) $200.00per year.

Rates for subscribers outside the United States are as followsand include additional air mail costs:

Federal Reserve Regulatory Service, $250.00 per year.Each Handbook, $90.00 per year.

FEDERAL RESERVE REGULATORY SERVICE FOR PERSONAL

COMPUTERS. CD ROM; updated monthly.Standalone PC. $300 per year.Network, maximum 1 concurrent user. $300 per year.Network, maximum 10 concurrent users. $750 per year.Network, maximum 50 concurrent users. $2,000 per year.Network, maximum 100 concurrent users. $3,000 per year.Subscribers outside the United States should add $50 to cover

additional airmail costs.THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI-

COUNTRY MODEL, May 1984. 590 pp. $14.50 each.INDUSTRIAL PRODUCTION—1986 EDITION. December 1986.

440 pp. $9.00 each.FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY.

December 1986. 264 pp. $10.00 each.FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY-

SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each.RISK MEASUREMENT AND SYSTEMIC RISK: PROCEEDINGS OF A

JOINT CENTRAL BANK RESEARCH CONFERENCE. 1996.578 pp. $25.00 each.

EDUCATION PAMPHLETSShort pamphlets suitable for classroom use. Multiple copies areavailable without charge.

Consumer Handbook on Adjustable Rate MortgagesConsumer Handbook to Credit Protection LawsA Guide to Business Credit for Women, Minorities, and Small

BusinessesSeries on the Structure of the Federal Reserve System

The Board of Governors of the Federal Reserve SystemThe Federal Open Market CommitteeFederal Reserve Bank Board of DirectorsFederal Reserve Banks

A Consumer's Guide to Mortgage Lock-InsA Consumer's Guide to Mortgage Settlement CostsA Consumer's Guide to Mortgage RefinancingsHome Mortgages: Understanding the Process and Your Right

to Fair LendingHow to File a Consumer ComplaintMaking Deposits: When Will Your Money Be Available?Making Sense of SavingsSHOP: The Card You Pick Can Save You MoneyWelcome to the Federal ReserveWhen Your Home is on the Line: What You Should Know

About Home Equity Lines of CreditKeys to Vehicle Leasing


A73

STAFF STUDIES: Only Summaries Printed in theBULLETIN

Studies and papers on economic and financial subjects that are ofgeneral interest. Requests to obtain single copies of the full text orto be added to the mailing list for the series may be sent toPublications Services.

Staff Studies 1-157 are out of print.

158. THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIRE-MENTS IN THE MARKETS FOR STOCKS AND DERIVATIVEPRODUCTS, by Mark J. Warshawsky with the assistance ofDietrich Earnhart. September 1989. 23 pp.

159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSIDI-ARIES OF BANK HOLDING COMPANIES, by Nellie Liang andDonald Savage. February 1990. 12 pp.

160. BANKING MARKETS AND THE USE OF FINANCIAL SER-VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, byGregory E. Elliehausen and John D. Wolken. September1990. 35 pp.

161. A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY,1980-90, by Margaret Hastings Pickering. May 1991.21pp.

162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORT-GAGE LOAN RATES IN TWENTY CITIES, by Stephen A.Rhoades. February 1992. 11 pp.

163. CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MAR-KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob,Lauren Hargraves, Richard Mead, Jeff Stehm, and MaryAnn Taylor. March 1992. 37 pp.

164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, byJames T. Fergus and John L. Goodman, Jr. July 1993.20 pp.

165. THE DEMAND FOR TRADE CREDIT: A N INVESTIGATION OFMOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES, byGregory E. Elliehausen and John D. Wolken. September1993. 18 pp.

166. THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET, byMark Carey, Stephen Prowse, John Rea. and Gregory Udell.January 1994. I l l pp.

167. A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANK-ING, 1980-93, AND AN ASSESSMENT OF THE "OPERATINGPERFORMANCE" AND "EVENT STUDY" METHODOLOGIES,by Stephen A. Rhoades. July 1994. 37 pp.

168. THE ECONOMICS OF THE PRIVATE EQUITY MARKET, byGeorge W. Fenn, Nellie Liang, and Stephen Prowse. Novem-ber 1995. 69 pp.

169. BANK MERGERS AND INDUSTRYWIDE STRUCTURE, 1980-94,by Stephen A. Rhoades. February 1996. 29 pp.

170. THE COST OF IMPLEMENTING CONSUMER FINANCIAL REGU-LATIONS: AN ANALYSIS OF EXPERIENCE WITH THE TRUTHIN SAVINGS ACT, by Gregory Elliehausen and Barbara R.Lowrey, December 1997. 17 pp.

171. THE COST OF BANK REGULATION: A REVIEW OF THE EVI-DENCE, by Gregory Elliehausen, April 1998. 35 pp.

REPRINTS OF SELECTED Bulletin ARTICLESSome Bulletin articles are reprinted. The articles listed below arethose for which reprints are available. Beginning with the Janu-ary 1997 issue, articles are available on the Board's World WideWeb site (http://www.bog.frb.fed.us) under Publications, FederalReserve Bulletin articles.

Limit of ten copies

FAMILY FINANCES IN THE U.S.: RECENT EVIDENCE FROM THESURVEY OF CONSUMER FINANCES. January 1997.



Maps of the Federal Reserve System

EW YORK

ADELPHIA

HAWAII t *

L E G E N D

Both pages

• Federal Reserve Bank city

Q Board of Governors of the FederalReserve System, Washington, D.C.

Facing page

• Federal Reserve Branch city

— Branch boundary

NOTE

The Federal Reserve officially identifies Districts by num-ber and Reserve Bank city (shown on both pages) and byletter (shown on the facing page).

In the 12th District, the Seattle Branch serves Alaska,and the San Francisco Bank serves Hawaii.

The System serves commonwealths and territories asfollows: the New York Bank serves the Commonwealth

of Puerto Rico and the U.S. Virgin Islands; the San Fran-cisco Bank serves American Samoa, Guam, and the Com-monwealth of the Northern Mariana Islands. The Board ofGovernors revised the branch boundaries of the Systemmost recently in February 1996.


A75

1-A

BOSTON

2-B

NEW YORK

3-C

PHILADELPHIA CLEVELAND

4-DPittsburgh

"cinnati

5-E

:te

RICHMOND

ATLANTA

7-G

CHICAGO

8-H

sville

ST. LOUIS

9-1

MINNEAPOLIS

10-J

Okif

KANSAS CITY

11-K

DALLAS

12-L

SAN FRANCISCODigitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis


Federal Reserve Banks, Branches, and Offices

FEDERAL RESERVE BANKbranch, or facility

ChairmanZip Deputy Chairman

PresidentFirst Vice President

Vice Presidentin charge of branch

BOSTON* 02106 William C. BrainardWilliam O. Taylor

NEW YORK* 10045 John C. WhiteheadThomas W. Jones

Buffalo 14240 Bal Dixit

PHILADELPHIA 19105 Joan CarterCharisse R. Lillie

CLEVELAND* 44101 G. Watts Humphrey, Jr.David H. Hoag

Cincinnati 45201 George C. JuilfsPittsburgh 15230 John T. Ryan III

RICHMOND* 23219 Claudine B. MaloneRobert L. Strickland

Baltimore 21203 Daniel R. BakerCharlotte 28230 Dennis D. Lowery

ATLANTA 30303 David R. JonesJohn F. Wieland

Birmingham 35283 Patricia B. ComptonJacksonville 32231 Judy JonesMiami 33152 R. KirkLandonNashville 37203 Frances F. MarcumNew Orleans 70161 Lucimarian Roberts

CHICAGO* 60690 Lester H. McKeever, Jr.Arthur C. Martinez

Detroit 48231 Florine Mark

ST. LOUIS 63166 John F. McDonnellSusan S. Elliott

Little Rock 72203 Betta M. CarneyLouisville 40232 Roger ReynoldsMemphis 38101 Carol G. Crawley

MINNEAPOLIS 55480 David A. KochJames J. Howard

Helena 59601 William P. Underriner

KANSAS CITY 64198 Jo Marie DancikTerrence P. Dunn

Denver 80217 Peter I. WoldOklahoma City 73125 Barry L. EllerOmaha 68102 Arthur L. Shoener

DALLAS 75201 Roger R. HemminghausJames A. Martin

El Paso 79999 Patricia Z. Holland-BranchHouston 77252 Edward O. GaylordSan Antonio 78295 H. B. Zachry, Jr.

SAN FRANCISCO 94120 Gary G. MichaelCynthia A. Parker

Los Angeles 90051 Anne L. EvansPortland 97208 Carol A. WhippleSalt Lake City 84125 Richard E. DavisSeattle 98124 Richard R. Sonstelie

Cathy E. MinehanPaul M. Connolly

William J. McDonoughErnest T. Patrikis

Edward G. BoehneWilliam H. Stone, Jr.

Jerry L. JordanSandra Pianalto

J. Alfred Broaddus, Jr.Walter A. Varvel

Jack GuynnPatrick K. Barron

Michael H. MoskowWilliam C. Conrad

William H. PooleW. LeGrande Rives

Gary H. SternColleen K. Strand

Thomas M. HoenigRichard K. Rasdall

Robert D. McTeer, Jr.Helen E. Holcomb

Robert T. ParryJohn F. Moore

Carl W. Turnipseed'

Charles A. Cerino1

Robert B. Schaub

William J. Tignanelli'Dan M. Bechter'

James M. MckeeFredR. Herr1

James D. Hawkins1

James T. Curry IIIMelvyn K. PurcellRobert J. Musso

David R. Allardice'

Robert A. HopkinsThomas A. BooneMartha L. Perine

John D.Johnson

Carl M. Gambs'Kelly J. DubbertSteven D. Evans

Sammie C. ClayRobert Smith, III 'James L. Stull'

Mark L. Mullinix'Raymond H. Laurence'Andrea P. WolcottGordon R. G. Werkema2

* Additional offices of these Banks are located at Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Utica at Oriskany, New York 13424;Columbus. Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; Milwaukee.Wisconsin 53202; and Peoria, Illinois 61607.

1. Senior Vice President.2. Executive Vice President


frb_071998

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