46188_1970-1974

Voluntary Foreign CreditRestraint ProgramOn January 7, 1971, the Board issued guidelines to modify andcontinue the Voluntary Foreign Credit Restraint (VFCR) program.Under this program, inaugurated in early 1965 as part of the Gov-ernment's over-all effort to protect the balance of payments bylimiting capital outflows, the Board requests banks and nonbankfinancial institutions to limit both their lending to foreigners andtheir other investments in foreign countries other than Canada. TheJanuary revision made only minor changes in the level or the formof restraint; however, a further revision of the guidelines on Novem-ber 11 did alter significantly the degree of program restraint.

The January revision did not make any changes in the over-alllevel of guideline ceilings. But for banks it did entail some liberaliza-tion by specifically excluding from restraint bonds and other directobligations issued by the International Bank for Reconstruction andDevelopment (IBRD) and by other international institutions of whichthe United States is a member. In addition, export credits were ex-empted from a subceiling that restrained short-term credits to resi-dents of the developed countries of continental Western Europe.

In August legislation was enacted that exempted from the guide-line ceilings all credits to finance U.S. exports. On November 11, fol-lowing a preparatory period contemplated in the congressional action,the Board issued revised guidelines that exempted export credits fromthe VFCR guideline ceilings. Export credits were defined to includecredits that financed both the shipment of goods produced in theUnited States and the performance abroad of services by U.S. na-tionals. Export credits could be either direct credits that financedU.S. exports or indirect credits to foreign financial institutions thatin turn would utilize these funds to finance U.S. exports.

The November revisions in the guidelines made other changes inthe VFCR program. For banks, the Export Term-Loan Ceiling forexport credits of over 1 year was eliminated, since export creditswere now exempt from the guideline restraint. Other changes in-cluded: (1) elimination of the subceiling on short-term bank claimson residents of continental Western Europe, (2) the request that U.S.

205

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

1971

FOREIGN ASSETS OF U.S. BANKS

Item

Number of reporting banks

Guidelines in effect through Nov. 10, 1971General ceiling:

Aggregate ceilingAssets under ceilingChange from previous dateApparent leeway

Export Term-Loan (ETL) ceiling:Aggregate ceilingAssets under ceilingChange from previous dateApparent leeway..

Total General and ETL ceilings:Aggregate ceilingAssets under ceilingChange from previous dateApparent leeway

Guidelines in effect beginning Nov. 11, 1971Ceiling:

Aggregate ceilingAssets under ceilingApparent leeway

Memorandum item:Export credit to foreigners other than

Canadians

1970,Dec. 31

171

1971

Mar. 31

169

June 30

174

Sept. 30

183

Dec. 31

188

Millions of dollars

9,9689,306

- 4 3662

1,423190

+ 1741,234

11,3919,496+ 1311,896

9,9089,116-190

793

1,442248

+ 581,194

11,3509,364-1321,987

9,9359,187

+71748

1,495342

+941,153

11,4309,529+ 1651,901

9,9679,641+454

326

1 512406

+641,107

11,49310,047

+ 5181,433

»8,9551,027

3,295

1 As of Nov. 11, 1971, export credits were exempted from restraint, and new Ceilings were calculatedfor all banks in place of General Ceilings and Export Term-Loan Ceilings.

agencies and branches of foreign banks report monthly on theirforeign lending positions, and (3) a narrowing of an exemption sothat a nonbank financial institution would charge to its ceiling long-term investments to finance oil tankers owned or chartered by asubsidiary of a U.S. oil company in a developing country unless theoil company took a corresponding charge under the Foreign DirectInvestment Program administered by the Department of Commerce.

The November revisions also amended the manner in which banksand nonbank financial institutions could calculate their ceilings fornonexport foreign lending and investing. Henceforth, a bank couldadopt a ceiling based on the most favorable of (1) 85 per cent ofits General Ceiling as of September 30, 1971; (2) its General Ceil-ing as of September 30, 1971, minus export credits outstandingthereunder as of that date; or (3) 2 per cent of its total assets as

206


1971

of December 31, !*>'"r0. The last option was initiated to allow smalland medium-si'ai banks without historical lending bases to establishthemselves in I ho tVlu of foreign financing. Noebank financial Insti-tutions wei,' p \ep :he option of calculating their ceilings as eitheri heir ceilings (adjusted-base-date holdings) as of September 30? 1971,minus export credits subject to restraint, or of using 85 per cent ofiheir ceilings on that same date.

At the end of 1970, the approximately 170 banks reporting underihe program had aggregate General Ceilings and Export Term-Loan1 Vilings of $11.4 billion, with an apparent leeway of about $0.7bMlion under the former and $1.2 billion under the latter. At the endt>f 1971 the approximately 190 VFCR reporting banks had latitudeIn extend about Si0.0 billion of nonexpert foreign credits, of which'W.O billion was bain; utilized.1 Therefore, at the end of the year,hanks had an. apparent leeway of $1.0 billion to extend nonexportcredit to foreigners other than Canadians and unlimited leeway toovtend credits of all types to Canadians and export credit to otherforeigners. At the end of 1971 the amount of export credits out-standing at reporting banks was about $3.3 billion, part faa¥ing beenrestrained, and part exempted, under the previous guidelines.

In August many banks went o¥er their General Ceilings to alarge extent as the result of speculative outflows by foreign customersmaking sudden drawings on established lines of credit. In Octoberthere was a rapid correction of positions. Again, in December therewits a substantial outflow, but there was no excess over the aggregatenew ceiling for nonexport credits. Only a minor fraction of the in-creased outflow was in,, export credits of the type exempted by theNovember revision, the bulk being attributable to speculative pres-sure thai dvHcIopeil before the Smithsonian Agreement jinl to otherfactors.

During \^'!\ ihe nonbiink financial institutions reduced their hold-ings of foreign assets subject to On. junJeLite ceiling. At the end of thevear, such holdings amounted i«* M,>. ivilion, well below the guide-line ceiling of $1.8 billion an«! jbou; \200 million, below amountsoutstanding at the end of 1970. A small part of this decline, approxi-mately $?0 million, was due to the removal of export credits from

• \n estimated S M> billion of export credit was eliminated from guidelineTe-41;ti!i; hv the ?Tv»M«)tm approved fm N n v 11 1071


1971

the guideline ceilings. The holdings of foreign assets that were notsubject to the guideline ceiling increased during the year by about$300 million; nearly half of this increase represented additional long-term investments in developing countries.

FOREIGN ASSETS OF U.S. NONBANK FINANCIAL INSTITUTIONSAND NONPROFIT ORGANIZATIONS REPORTING UNDERVFCR GUIDELINESAmounts shown in millions of dollars

Item

ASSETS SUBJECT TO CEILING

Deposits and money market instruments, foreign countries, exceptCanada

Short- and intermediate-term credits, foreign countries exceptCanada 1

Long-term investments, developed countries except Canada:Net investment in subsidiaries, affiliates, and branches 2

Long-term bonds and creditsStocks 3

TOTAL holdings of assets subject to ceiling.

Ceiling.

ASSETS NOT SUBJECT TO CEILING

Export credits 5

Investments in Canada:Deposits and money market instrumentsShort- and intermediate-term credits l

Net investment in subsidiaries, affiliates, and branches 2

Long-term bonds and creditsStocks

Direct obligations of international institutions of which U.S. isa member

Long-term investments in developing countries;Net investment in subsidiaries, affiliates, and branches 2

Long-term bonds and creditsStocks

Otherwise "covered" stocks acquired after Sept. 30, 1965, in U.S.markets from U.S. investors

Otherwise "covered" assets acquired after Dec. 31, 1967, as "freedelivery" items

TOTAL holdings of assets not subject to ceiling.

AmountDec. 31,

1971

18

152

169531432

1,302

1,784

80

322193872

8,5231,269

1,029

39895130

885

38

14,275

Change from Dec. 31,1970

Amount Per cent

- 1 7

- 2 9

+ 19- 7 9

- 1 0 6

* - 2 1 1

- 1 3 2

6 +80

+ 169+ 37

+ 268-147-119

- 1 2

- 2+ 121+ 22

+70

+ 14

+526

-48.6

-16.0+ 12.7-13.0-19.7

-6 .9

+ 110.5+ 23.7+44.4-1 .7-8 .6

-1 .2

-4 .9+ 15.6+ 20.4

+ 8.6

+ 58.3

+3.8

MEMO: Total holdings of foreign assets. .. 15,578 + 316 +2.1

1 Bonds and credits with final maturities of 10 years or less at date of acquisition.2 Net investment in foreign branches, subsidiaries, or affiliates in which the U.S. institution has an

ownership interest of 10 per cent or more.3 Except those acquired after Sept. 30, 1965, in U.S. markets from U.S. investors.4 The amount outstanding on Dec. 31, 1970, included an undeterminable amount of export credits

that were believed to have been approximately $20 million and that were removed from the ceiling inNovember 1971 (see note 5); both the absolute and percentage declines are, therefore, slightly over-stated.

5 Up to November 1971 export credits were subject to ceilings, except for those that were related toExport-Import Bank or to Department of Defense financing programs.

6 Export credits exempted by reason of being related to the Export-Import Bank or to the Depart-ment of Defense amounted to approximately $60 million.

208


1971

Voluntary Foreign CreditRestraint Program

The Voluntary Foreign Credit Restraint (VFCR) program continuedwithout major change during 1972, on the basis of the guidelines asrevised in November 1971. Most of the amendments adopted by theBoard during 1972 were designed to clarify existing provisions orto simplify reporting procedures. However, one amendment extendedto one class of. bank affiliates the same limited foreign-borrowing-oflEset provision that had already been made available to other bankaffiliates, and another exempted foreign assets acquired in connec-tion with acts taken by the Overseas Private Investment Corporationto settle claims. As intended, the impact of the 1972 amendmentson the general level of restraint was negligible.

Since November 1971, banks previously without VFCR ceilingscould adopt a ceiling for nonexport foreign lending and investingequal to 2 per cent of their total assets as of December 31, 1970.During 1972, 87 commercial banks adopted such ceilings, amount-ing in the aggregate to $406 million. However, some of these "new-comer" banks either did not engage in foreign lending during the


Item


Aggregate ce i l ing . . . . .Assets held for own account subject to re-

straintAggregate net leeway ,

Assets exempted from VFCRCanadian assetsExport credit other than to residents of

CanadaOther

TOTAL assets held for own account

1971,Dec. 31

194

1972

Mar. 31

200

June 30

205

Sept. 30

203

Millions of dollars

10,032

8,9551,078

3,347536

3,299112

12,302

10,069

8,8351,254

4.516799

3,586131

13,351

10,103

8,6841,419

4.571830

3,546195

13,255

10,121

8,8071,314

4,765876

3,690199

13,572

Dec. 31

219

10,252]

9,1091,143

5,348927

4,222199

14,457

191


1972

FOREIGN ASSETS OF U.S. AGENCIES AMD BRANCHES OFFOREIGN BANKS

Item1971.

Dec. 31

1972

Mar. 31 June 30 Sept. 30

53 53 57

Dec. 31

60

Millions of dollars

1

1

3

,943

.066273793

,009

2

1

3

,183

,213335878

,396

2,110 !

1,290 i315 1975 1

3,400 j

2,

1,

1,

3,

277

458335123

735

2

1

1

4

,878

,799389,410

,676

N u m b e r of reporting institutions.

Assets of the types subject to r e s t r a i n t . . . . . .

Assets of the types not subject to restraint .Canadian a s s e t s . . . . . . . . . . . . . . . . . . . . .Export credits

T O T A L assets held for own account

year or did not acquire enough foreign assets to report them. Thetotal number of banks actively participating in the VFCR programincreased in 1972 by 25—to a total of 219—and the aggregateceilings by $220 million, to $10,252 million.

The volume of foreign lending and investment by U.S. banks thatwas subject to VFCR ceilings remained little changed during 1972.At the end of 1972 banks' foreign assets held for their own accountand subject to restraint were $154 million more than the $8,955million held at the end of 1971; however, because of the entry ofadditional banks into the program, the aggregate net leeway at theend of 1972 was $65 million above the end-of-1971 level of $1,078million.

Of the foreign assets not subject to restraint, banks' holdings ofCanadian claims rose by $391 million. Following the removal of allexport credits from restraint in November 1971, banks substantiallyexpanded their lending activity in that field. At the end of 1972,export credits outstanding (other than to residents of Canada) were$923 million, or 28 per cent, above the December 1971 level. Whilebanks' own foreign assets (including those exempt from the VFCR)rose by $2,155 million from the end of 1971 to December 31, 1972,their foreign assets subject to restraint rose by $154 million, asmentioned earlier.

U.S. agencies and branches of foreign banks were requested tocontinue to act in accordance with the spirit of the VFCR guidelines

192


1972

throughout 1972. In addition, they were asked for the first time tosubmit monthly reports on their foreign asset positions. Becausethese institutions rely on foreign sources of funds to a much higherdegree than do U.S. commercial banks and because they operatedifferently from U.S. banks in other respects, they have been treated

FOREIGN ASSETS OF U.S. NONBANK FINANCIAL INSTITUTIONSAND NONPROFIT ORGANIZATIONS REPORTING UNDERVFCR GUIDELINES

Amounts shown in millions of dollars

Item

Changes from Dec. 31,Amount j 1971Dec. 31, !

1972

Deposits and money market instruments, foreign countries exceptCanada j

Short- and intermediate-term credits, foreign countries except iCanada * :

Long-term investments, developed countries except Canada ; !Net investment in subsidiaries, affiliates, and branches - . , . . . . . !Long-term bonds and credits jStocks : i . . . . . . . . , , i

iT O T A L holdings of assets subject to c e l l i n g . . , . . , . ,

Foreign-borrowing offset

T O T A L holdings less o f f s e t , , . . . . , , . , . , . . . , , , . . . .

CeilingNet leeway , .

ASSETS NOT SUBJECT TO CElLlNtI

Export creditsInvestments In Canada:

Deposits and money market instruments.Short- and intermediate-term credits l

Net investment in subsidiaries, affiliates, and branches 2,..Long-term bonds and credits.Stocks

Direct obligations of international institutions of which I.is a member

Long-term imestments in developing countries:Net investment in subsidiaries, affiliates, and branches-...Long-term bonds and credits. . . . .Stocks,

Otherwise "covered" stocks acquired after Sept. 30, 1965,U.S. markets from U.S. investors.

Otherwise "covered" assets acquired after Dec. 31, 1967,"free delivery" items . . . . , , ,

TOTAL holdings of assets not subject to ceiling.. . .

MEMO: Total holdings of foreign assets . . . . . . .

U.S.

Amount i Per cent

69

140

\m445224

1,067

156

911

1,556645

96

325185952

9,121mi

i .199

591 ,118

109

34

15,083

16,149

+ 48

- 1 0

+ 21

- 2 0 8

- 2 3 2

+ 79

- 3 1 !

- 2 2 6+ 85

+ 16

+ 80+ 582- 305

+ 159

+ 222- 2 3

+ 20

- 3

^737

+ 5113

+ 228.6

-6.7

+ 12.5- 1 5 . 7

+ 102.6

-25.5

+ 20- 5_ 4

+- 2 3 .

+ 15,3+ 47+ 24

+ 2.3

+ 5.

+ 3.

1 Bonds and credits with final maturities of 10 years or less at date of acquisition.- Net investment in foreign branches, subsidiaries, or affiliates in which the U.S. institution has an

ownership interest of iO per cent or more.3 Except those acquired after Sept. 30, 1965, in U.S. markets from U.S. investors.

193


1972

In a special category under the program. During 1972 the numberof these institutions reporting increased by 9 to a total of 60, as shownin the table oe page 192. The agencies and branches that reported atthe end of 1972 showed holdings of foreign assets of the types subjectto restraint of $2,878 million; this was $935 million above theirholdings at the end of 1971, an increase of more than 48 per cent.As was true of U.S. commercial banks, export credits granted byagencies and branches of foreign banks increased rapidly; on Decem-ber 31, 1972, these credits were $617 million above the 1971 level—an increase of 80 per cent.

By the end of 1972, holdings by nonbank financial institutions ofassets subject to ceilings had declined by nearly $250 million—or 18per cent—from the level of $1,300 million at the end of 1971. Thisdevelopment left the VFCR reporting institutions with a net leewayof about $650 million after adjustment for the foreign borrowingoffset. On the other hand, holdings of assets not subject to restraintincreased by about $750 million. About $200 million of this increaseresulted from new investment in developing countries, about $160million represented increased investment in direct obligations of inter-national institutions of which the United States is a member, and the$360 million remaining rclected increased investments in Canada.

194


1972

Voluntary Foreign CreditRestraint Program

During 1973 the level of restraint asked of U.S. banks and U.S.nonbank financial institutions under the Voluntary Foreign CreditRestraint (VFCR) guidelines remained unchanged. On December26, 1973, however, it was announced that the level of restraint wouldbe substantially relaxed, effective January 1, 1974, as part of thegeneral relaxation of the U.S. capital controls programs.

The guidelines were amended only once during the year. Thatamendment—July 19, 1973—formalized the method of restraint thathad been applied to U.S. agencies and branches of foreign banks sincethe last substantial revision of the guidelines in late 1971. Accordingto that amendment, agencies and branches could increase their claimson non-U.S. residents to the extent that they increased the funds theyborrowed from their own parent banks and from other non-U.S.sources. June 30, 1973, was set as the base for calculating changes in


1972,Dec. 31

222

1973

Mar. 31

227

M

June 30

226

Sept. 30

229

illions of dollars

Dec. 31

229Number of reporting banks

Aggregate ceilingAssets held for own account subject to re-

straintAggregate leeway

Assets exempted from VFCRCanadian assetsExport credits other than to residents of

CanadaOther


10,276

9,1891,087

5,339927

4,213199

14,529

10

9

5

4

15

,328

,630698

,908855

,843210

,538

10

9

6

5

16

,316

,425890

,962807

,930225

,387

10

91

6

5

15

,351

,186,165

,559713

,585261

,745

10,367

9,382985

7,6371,134

6,252251

17,019

226


1973

foreign assets of types subject to restraint and changes in offset-ting foreign liabilities. The amendment did not, and was not intendedto, change the degree of restraint that U.S. agencies and branches offoreign banks were asked to observe.

Aggregate VFCR ceilings of commercial banks participating in theprogram reached a level of $10.4 billion at the end of 1973. Thiswas approximately $100 million above the end-of-1972 level, anincrease attributable to adoption of guideline ceilings by banks thatwere expanding their foreign activities. The degree of ceiling utiliza-tion remained steady throughout the year. Assets subject to restraintrose by only $193 million during the year, and the aggregate leewaywas $102 million lower on December 31, 1973, than it had been ayear earlier.

However, during periods of exceptional activity in internationalmoney markets, U.S. banks experienced substantial pressures ontheir lending restraints. Most notably in February and in May, unan-

FOREIGN ASSETS OF U.S. AGENCIES AND BRANCHESOF FOREIGN BANKS

Item

Number of reportinginstitutions

Assets held for own accountsubject to restraint

Foreign liabilitiesNet foreign positionBase net foreign position

on 6/30/73

Aggregate leeway

Assets exempt from VFCR.

Canadian assetsExport credits other

than to residents ofCanada

TOTAL assets held forown account

1972,Dec. 31

62

1973

July 31

67

Aug. 31

65

Sept. 30

68

Oct. 31

69

Nov. 30

71

Dec. 31

72

Millions of dollars

2,994n.a.n.a.

n.a.

n.a.

1,819

409

1,410

4,812

4,2569,134

-4 ,878

-4 ,623

255

2,743

543

2,200

7,000

4,4899,332

-4 ,843

-4 ,550

293

2,665

473

2,192

7,155

4,5879,549

-4 ,962

-4 ,551

410

2,706

440

2,266

7,293

4,99110 193

-5 ,202

-4 ,551

650

2,639

464

2,175

7,630

5,17910,442

-5 ,264

-4 ,605

659

2,724

432

2,292

7,902

5,83910,812

-4 ,973

-4 ,605

368

2,688

385

2,303

8,527

n.a. Not available.

227


1973

ticipated drawings on lines of credit established by foreign • customerscaused. many • banks to go temporarily over their VFCR- ceilings.In most -eases the banks- were able to correct their positions rapidly.

U.S. • banks • were active in- the-field-of'export financing, •'which isexempt from -restraint. In 1973, export "credits to others "than resi-dents of Canada increased by $2 billion, an increase of nearly 50 percent.

U.S." agencies and branches of foreign' banks started reporting inJuly under the" system described earlier lor'"netting increased foreignliabilities against increased foreign, assets. For the year, their holdingsof assets "of the types subject to restraint nearly doubled. In theperiod July-December, the increase in their foreign liabilities out-stripped the increase of assets subject to restraint by $368 million.This figure represented leeway available to the agencies and branchesfor further lending.

Like U.S. banks, the agencies and branches vigorously expandedtheir export financing activities to others than residents of..Canada.However, their holdings of such credits increased even faster than,those of.U.S..banks—that is, by 63 per cent.

Foreign .asset holdings, of U.S. .nonbank financial institutionschanged little in 1973. As of the end of the year, their holdings- offoreign.assets subject to restraint stood at $1,149 million, $20 millionless than..at the end of 1972. With aggregate ceilings remaining un-changed, the.institutions had an aggregate leeway of $800 million asof the end of 1973.

The holdings of assets exempt from restraint increased by morethan $800. million. Here too, export credits showed a large relativeincrease—63 -per cent. However, at the end of the year total-holdingsof-export-credits of the VFCR-reporting nonbank financial institutionswere only $158 million.

•On December 26, 1973? the Board announced several amendmentsto the guidelines. The amendments represented a relaxation in' re-straint effective January 1, 1974, and were announced simultaneouslywith the reduction in the rate of the Interest Equalization Tax andwith the'relaxation of the Foreign Direct Investment "Program, whichare -administered by the Treasury Department and the Departmentof Commerce, respectively.

For "the VFCR-partlcipatieg financial institutions, one element of

228


1973

FOREIGN ASSETS OF U.S. NONBANK FINANCIAL INSTITUTIONSAND NONPROFIT ORGANIZATIONS

Item

Number of reporting institutions

Assets subject to restraintDeposits and money market instruments. . .Short- and intermediate-term creditsLong-term investments

Ceiling . . . .Foreign borowing offset

Aggregate leeway

Assets exempted from VFCRExport creditsInvestments in Canada, other than export

creditsDirect obligations of international

institutionsLong-term investments in developing

countries other than export creditsOther nonexport investments


1972,Dec. 31

317

1,16969

141961

1,732159

721

15,57297

11,864

1,232

1,3121,066

16,741

1973

Mar. 31

321

Mi

1,14569

141935

1,728187

770

15,861131

12,020

1,219

1,3281,164

17,006

June 30

322

lions of do

1,16487

142935

1,732200

768

16,033139

12,118

1,218

1,3101,248

17,197

Sept. 30

317

liars

1,15092

145913

1,703206

759

16,223140

12,177

1,193

1,3701,344

17,372

Dec. 31t>

327

1,14999

147903

1,722233

806

16,414158

12,226

1,174

1,4051,451

17,563

p Preliminary.

relaxation was a rise in the minimum ceiling applicable to foreignassets of the types subject to restraint. These minimums were raisedfrom $500,000 to $10 million for banks; from $1 million to $10million for U.S. agencies and branches of foreign banks; and from$500,000 to $2 million for U.S. nonbank financial institutions.

For institutions with ceilings higher than the new minimum ceil-ings, the ceilings were raised by 4 per cent for U.S. banks and forU.S. agencies and branches of foreign banks, and by 5 per cent forU.S. nonbank financial institutions.

For all financial institutions participating in the VFCR program,subsidiary restraints regarding loans to residents of developed coun-tries of continental Western Europe were abolished.

On January 29, 1974, the Board announced termination of theVFCR program, effective immediately. This action was coordinatedwith the simultaneous lifting of the capital outflow restraint programsadministered by the Treasury and Commerce Departments.

229


1973

Voluntary Foreign CreditRestraint andCapital Flows Abroad

On January 29, 1974, the Board announced the termination of itsVoluntary Foreign Credit Restraint (VFCR) guidelines. The programbased on these guidelines had been designed to restrain foreign lend-ing and foreign investment by banks and other financial institutionsin order to protect the U.S. balance of payments. The VFCR wasended in conjunction with actions taken by the Treasury Departmentto reduce the interest-equalization tax to zero and by the Departmentof Commerce to terminate its foreign direct investment restrictions.The Federal Reserve System had administered the VFCR programsince early 1965 at the request of the administration.

In order to monitor capital flows in the wake of the lifting of theseveral sets of restrictions, the Board asked banks and other financialinstitutions to continue during 1974 to report their foreign lendingand investments to the Board, but in reduced detail. In keeping with


Item


Total assetsLess: Assets held for account of customers...

Assets held for own accountExport creditsFinancial leasesInvestments in foreign subsidiaries

« Partly estimated.

1973,Dec. 31

230

19,3922,314

17,078• 6,252

1701,629

Increase, or decrease (—), 1974

Ql

11

Q2

1

Q3

4

Millions of dollars

4,066632

3,434-411

2799

5,67458

5,616204

129

1,855-157

2,012521293

Q4

- 3

3,465503

2,962466

5275

1974,Dec. 31

241

34,4523,350

31,1026,379

2182,255

230


1974

the form of restraint that had applied to U.S. agencies and branchesof foreign banks, those institutions were also requested to report theirforeign liability positions.

In 1974 gross foreign assets held for own account by U.S. banksincreased $14 billion to reach a level of $31 billion. This was amarked increase over 1973, when such assets increased by $2.5 bil-lion. All but $200 million of the 1973 increase occurred in classes ofassets that had not been subject to restraint, principally export creditsand Canadian assets. The $14 billion increase in the foreign assetsof U.S. banks in 1974 was to a large extent offset by an increase intheir liabilities (excluding U.S. Treasury bills and certificates) toforeigners other than official foreign institutions, according to datareported by U.S. banks to the Treasury Department.

U.S. agencies and branches of foreign banks reported that theirholdings of foreign assets held for own account increased in 1974 by$3.5 billion compared with the $3.7 billion increase in 1973. Foreignliabilities of these institutions increased in 1974 by $4.7 billion, so in1974 there was a net capital inflow through these institutions of $1.2billion.

FOREIGN ASSETS AND FOREIGN LIABILITIES OF U.S.AGENCIES AND BRANCHES OF FOREIGN BANKS

Item


Total assets.Less: Assets held for account of

customers

Assets held for own accountExport credits

Investments in foreign subsidiaries.

Foreign liabilities

Net foreign position:Assets held for own account less

liabilities

1973,Dec. 31

75

Increase, or decrease ( —),

Ql

4

Q2

5

Q3

3

1974

Q4

1

1974,Dec. 31

88

Millions of dollars

8,906

399

8,5072,303

10,812

-2 ,305

1,142

123

1,019123

1,276

-258

1,642

296

1,346158

710

636

106

-137

243308

2,067

-1 ,283

942

93

84985

618

230

12,738

774

11,9642,977

15,483

-3 ,520

231


1974

46188_1970-1974

Documents

shortterm credits

indirect credits

aggregate ceilingassets

export creditswere

guideline restraint

degree of program restraint

general ceiling

etl ceilings