frb_061997

VOLUME 83 • NUMBER 6 • JUNE 1997

FEDERAL RESERVE

BULLETIN

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

PUBLICATIONS COMMITTEE

Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn• J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen • Edwin M. Truman

The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressedexcept in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics Center under the direction ofPeter G. Thomas, and Publications Services supervised by Linda C. Kyles.

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

Table of Contents

465 PROFITS AND BALANCE SHEETDEVELOPMENTS AT U.S. COMMERCIALBANKS IN 1996

U.S. commercial banks had another very goodyear in 1996. Profits posted strong growth, pre-serving the high levels of return on equity andreturn on assets that have prevailed over the pastfour years. Helping to boost profits were contin-ued strong growth of interest-earning assets, aslight widening of the net interest margin, sig-nificant gains in noninterest income, and contin-ued containment of noninterest expenses. Returnon assets edged up despite a slight increase inprovisioning for loan and lease losses relative toassets. Delinquency and charge-off rates stayedlow for business loans but climbed throughoutthe year for consumer loans.

490 U.S. TREASURY AND FEDERAL RESERVEFOREIGN EXCHANGE OPERATIONS

During the first quarter of 1997, the dollar appre-ciated 8.8 percent against the mark and 6.9 per-cent against the yen, at one point reaching thirty-six-month and fifty-month highs of DM 1.7209and ¥124.82 respectively. On a trade-weightedbasis against other Group of Ten currencies, thedollar strengthened 7.5 percent.

494 INDUSTRIAL PRODUCTION AND CAPACITYUTILIZATION FOR APRIL 1997

Industrial production was unchanged in April, at119.0 percent of its 1992 average, after adownward-revised increase of 0.6 percent inMarch. The utilization of industrial capacity fell0.3 percentage point in April, to 83.4 percent.

497 STATEMENT TO THE CONGRESS

Susan M. Phillips, Member, Board of Governorsof the Federal Reserve System, presents theBoard's views on efforts to clarify and reformthe regulation of derivatives contracts under theCommodity Exchange Act and says that theBoard strongly endorses efforts by the Congressto carefully reexamine the existing regulatoryframework for derivatives, key elements of

which were put in place in the 1920s and 1930sto regulate the trading on exchanges of grainfutures by the general public, before the Sub-committee on Risk Management and SpecialtyCrops of the House Committee on Agriculture,April 15, 1997.

501 ANNOUNCEMENTS

Public hearings on 1994 provisions of the Truthin Lending Act.

Steps taken by the Federal Reserve Board tohelp ease financial stress in areas affected byflooding in Minnesota, North Dakota, andSouth Dakota.

Publication of a new weekly list of applicationsand notices filed under the Bank Holding Com-pany Act or the Change in Bank Control Act.

Availability of revised lists of over-the-counterstocks and of foreign stocks subject to marginregulations.

Availability of a public access database fromthe 1993 National Survey of Small BusinessFinances.

503 LEGAL DEVELOPMENTS

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

AI FINANCIAL AND BUSINESS STATISTICS

These tables reflect data available as ofApril 28, 1997.

A3 GUIDE TO TABULAR PRESENTATION

A4 Domestic Financial StatisticsA42 Domestic Nonfinancial StatisticsA50 International Statistics

A63 GUIDE TO STATISTICAL RELEASES ANDSPECIAL TABLES

A64 INDEX TO STATISTICAL TABLES


)6 BOARD OF GOVERNORS AND STAFF A72 SCHEDULE OF RELEASE DATES FORPERIODIC RELEASES

38 FEDERAL OPEN MARKET COMMITTEE ANDSTAFF; ADVISORY COUNCILS A74 MAPS OF THE FEDERAL RESERVE SYSTEM

70 FEDERAL RESERVE BOARD PUBLICATIONS A76 FEDERAL RESERVE BANKS, BRANCHES,AND OFFICES


Profits and Balance Sheet Developmentsat U.S. Commercial Banks in 1996

William R. Nelson and Ann L Owen, of the Board'sDivision of Monetary Affairs, prepared this article.Thomas C. Allard assisted in the preparation ofthe data, and Amy M. Tucker provided researchassistance.

U.S. commercial banks had another very good year in1996. Profits posted strong growth, preserving thehigh levels of return on equity and return on assetsthat have prevailed over the past four years (chart 1).Helping to boost profits were continued stronggrowth of interest-earning assets, a slight widening ofthe net interest margin, significant gains in noninter-est income, and continued containment of noninterestexpense (table 1). Return on assets edged up despite aslight increase in provisioning for loan and leaselosses relative to assets. Delinquency and charge-offrates stayed low for business loans but climbedthroughout the year for consumer loans.1

Commercial banks generally were willing lenderslast year, helping to support the strong advance inU.S. economic activity. In fact, increased loanvolume was the main contributor to the increase inassets; banks' holdings of securities rose onlyslightly. Loan growth was funded primarily withmanaged liabilities.

Bank stock prices rose more rapidly than prices inthe stock market as a whole, and many bank holdingcompanies substantially increased their dividends andtheir stock repurchases. Banks paid out three-fourths

1. Except where otherwise indicated, data in this article are fromthe quarterly Reports of Condition and Income (Call Reports) forinsured domestic commercial banks. The data consolidate informationfrom foreign and domestic offices and have been adjusted to takeaccount of mergers. Size categories, based on assets at the start ofeach quarter, are as follows: the ten largest banks, large banks (thoseranked 11 through 100 by size), medium-sized banks (those ranked101 through 1,000 by size), and small banks (those not among thelargest 1,000 banks). At the start of the fourth quarter of 1996, each ofthe ten largest banks had assets of more than approximately $50 bil-lion, each large bank had assets between approximately $7 billion and$50 billion, each medium-sized bank had assets between approxi-mately $300 million and $7 billion, and each small bank had assets ofless than approximately $300 million. Many of the data series reportedhere begin in 1985 because the Call Report was significantly revisedat the start of that year. Data shown may not match data published inearlier years because of revisions. In the tables, components may notsum to totals because of rounding.

of their net income as dividends in 1996, up fromtwo-thirds in the previous two years. Even so, theratio of capital to total assets increased slightly, andvirtually all bank assets were at well-capitalizedbanks.

BALANCE SHEET DEVELOPMENTS

Bank assets expanded further in 1996, though at asomewhat slower pace than in 1995 (table 2).2

Increases in loans and leases, particularly to busi-nesses, accounted for most of the growth. On theliability side of the balance sheet, core deposits grewmore slowly than managed liabilities for the fourthconsecutive year, with large time deposits an increas-ingly important source of funds.

2. Since 1994, reported bank assets have included the market valueof derivatives contracts. As required by Financial Accounting Stan-dards Board Interpretation No. 39 (FIN 39), derivatives used fortrading purposes that have positive value are recorded as assets andthose that have negative value as liabilities. Before 1994, banks nettedthe values of derivatives across counterparties. Total assets excludingthe effects of FIN 39 can be approximately determined from the datareported in table A.2 by reducing assets by the revaluation losses onoff-balance-sheet items. For a discussion of this issue, see William B.English and Brian K. Reid, "Profits and Balance Sheet Developmentsat U.S. Commercial Banks in 1994," Federal Reserve Bulletin, vol. 81(June 1995), pp. 548-49.

1. Measures of commercial bank profitability, 1970-96

, Percent .'

1970 197$ 1980 1985

NOTE. The data are annual.


466 Federal Reserve Bulletin • June 1997

Loans to Businesses

The value of commercial and industrial (C&I) loanson banks' balance sheets grew about 11A percent lastyear—somewhat less than in the preceding two yearsbut still a sizable increase. According to the FederalReserve's quarterly Senior Loan Officer Opinion Sur-vey on Bank Lending Practices (LPS), the demandfor C&I loans remained high throughout the year(chart 2).3 Banks attributed the strong demand in partto their customers' needs to finance inventories andplant and equipment. Demand was also boosted byheavy merger and acquisition activity, which in manycases resulted in a need to finance the retirement ofthe acquired firm's equity.

Not only were banks willing to meet the strongdemand for C&I loans, but they encouraged it byeasing lending terms over the course of the year.Respondents to the LPS reported having loweredthe cost of credit lines, narrowed spreads of ratescharged on business loans over base rates, and easedloan covenants, particularly for large firms. In con-trast, respondents to a second survey, the FederalReserve's quarterly Survey of Terms of Bank Lend-ing to Business, which involves a larger sample ofbanks, indicated that spreads on loans of all sizeschanged very little during 1996.4 On average, how-

3. About sixty domestic commercial banks from the twelve FederalReserve Districts are surveyed by the LPS. Most of them are large: Asof December 31, 1996, their combined assets totaled $1.3 trillion,about one-third of the combined assets of all domestic commercialbanks.

4. The Survey of Terms of Bank Lending to Business collects dataon lending rates from a sample of more than 300 commercial banks.These banks accounted for 64 percent of the dollar value of C&I loansoutstanding at the end of 1996. Data are collected on the terms of C&Iloans made by these banks during the first full week of the middlemonth of each quarter.

Net percentage of selected commercial banks thatexperienced increased demand for commercial andindustrial loans, by size of firms seeking loans, 1992-96

Percent

Medium-sized firms

Small firms

— 20

1992 1993 1994 1995 1996

NOTE. The data are quarterly. Net percentage is the percentage of banksreporting an increase less the percentage reporting a decrease. The definition forfirm size suggested for, and generally used by, survey respondents is thatmedium firms are those with sales between $50 million and $250 million.

SOURCE. Senior Loan Officer Opinion Survey on Bank Lending Practices.

ever, spreads in this second survey were narrower lastyear than in 1995, particularly for large loans(chart 3).

More aggressive competition from other commer-cial bank and nonbank lenders was an importantfactor influencing the LPS respondents that easedstandards or terms for C&I loans. The bond marketwas one source of competition, as yields on corporatebonds, especially below-investment-grade borrowinginstruments, were low by historical standards com-pared with rates on Treasury securities. Even so, bypricing relatively aggressively, commercial bankswere able to capture a larger share of the businessfinancing market. However, the share of total creditmarket debt of nonfinancial businesses provided by

1. Selected income and expense itemsPercentage of average net consolidated assets

Item 1991 1992 1993 1994 1995 1996

Annual average

1985-92 1993-96Change,

1985-92 to1993-96

Net interest incomeNoninterest incomeNoninterest expenseLoss provisioningRealized gains on investment account

securitiesIncome before taxes and extraordinary

items . . . . . , ' . . '

Taxes and extraordinary items

Net income (return on assets)

Dividends

Retained income

3.611.793.731.03

.09

.73

.22

.51

.45

.07

3.901.953.87

.78

.11

1.32.41.91

.41

.50

3.902.133.94

.47

.09

1,70.50

1.20

.62

.59

3.792.003.76

.28

-.01

1.74.58

1.15

.73

.42

3.732.023.65

.30

.01

1.81.63

1.18

.75

.43

3.762,193.73

.38

.03

L86.65

1.21

.91

.29

3.55L563.47

.90

.06

.81

.25

.56

.40

.16

3.792.083.77

.36

.03

1.78.59

1.19

.75

.43

.24

.52

.30

-.54

-.03

.97

.34

.63

.35

.27


Profits and Balance Sheet Developments at US. Commercial Banks in 1996 467

banks remained well below levels of the early 1980s(chart 4).

The growth of commercial real estate loans pickedup to 73/4 percent in 1996, the third consecutiveyear in which such lending expanded. Demand waslikely stimulated by improving conditions in thecommercial real estate market, as seen in decliningvacancy rates and rising commercial real estateprices. Still, at the end of 1996, only about 9 percentof bank assets were in the form of commercial realestate loans, down from 11 Vi percent in 1991. Thechange has not been uniform across banks of differ-ent sizes, however: The proportion of assets in com-mercial real estate loans has increased for small banks(from 11 percent in 1991 to WA percent in 1996) but

has decreased for large banks (from 11 lA percent in1991 to 8V2 percent in 1996).

Loans to Households

The value of consumer loans on banks' balancesheets increased about 5 percent last year, about halfas fast as in 1995. The slowing of growth was likely aresult of several factors: an increase in the pace ofsecuritization of consumer loans, which removesloans originated by banks from their balance sheets; aslight weakening of the growth of demand for suchloans; and less aggressive pursuit of these loans bybanks.

2. Annual rates of growth of balance sheet items, 1987-96Percent

Item

AssetsInterest-earning assets

Loans and leases (net)Commercial and industrial . . . .Real estate

Booked in domestic offices ,.Residential .Nonresidential

Booked in foreign offices . . .ConsumerOther loans and leasesLoan loss reserves and

unearned incomeSecurities ..

Investment accountU S TreasuryU.S. government agency and

corporation obligations -Other

Trading accountOther

Non-interest-earning assets

Liabilities .Core deposits . * * - .

Transaction depositsSavings and small time deposits ..

Managed liabilities' . . . . . . ,Deposits booked in foreign

offices . . . . . .Larse timeSubordinated notes and

debentures .Other managed liabilities . . . . . . . .

Other...

Equity capital

MEMOCommercial real estate loans2

1987

2 003.083.00

-1.9516.5617.1118.0316.26

.844.55

-5.33

44 364.947.51.00

25.464.43

-23.88.24

-5.07

2.18-.76

-6.042.956.90

8,8612.16

3.72.78

3.75

-.66

n.a.

1988

4.334,045.931.84

12.4311,9913.8910.2227.037.64

-3.09

-4.193.272.93

-5,80

22.54-2.46

8,58-5.82

6,45

4.055.482.657.292.26

-7.779.22

-4.265.45

.08

8.77

n.a.

1989

5.355.616.242.97

12.6913,0215.7510.393.006.18-.94

10,295.084.04

-13.79

33.41-.87

20.622.493.50

5.435.75

.938.715,20

-1.085.00

16.9810.122.59

4.18

n.a.

1990

2.642.232.37-.678.798.55

13.493.57

16.6538

-5.68

.358.458.193.50

24.02-6.6911.87

-11.695.51

2.377.582.43

10.51-6.16

-5.88-5.68

20.99-8.U4.36

6.68

n.a.

1991

1331.98

-2.65-9,102.732.908.08

-2.82-234-2-55-4.91

-3.7916,2314.4232.01

15.88-2.5738.88.2.82

-3.10

LOt5.253.386.24

-6.18

3.82-19.73

4.69-134-4,28

5.98

10.68

1992

2.202,55

-L02-4.10

1.942.577.87

-3.95-17.80-1.53-4.25

-4.7912.2911.4423.96

- 12.77-5.1921.01

1.57- 3 1

1365.09

14.63.18

-6.03

-5.85-26.20

34.897.11

-1.05

13.78

-5.18

1993

5.676.546.02

•526.136.17

10.96-.454.668.929.97

-5.8912,268.097.21

9.626.07

51.94-7.89-.87

5.101.495.47-.85

12,28

15.05-9.21

10.8222.1814.93

12.56

-133

1994

8.085319.859347.947,68

10.004.12

183716,025.30

-2.20-4.13-1,71-8.44

.872.52

-20.513.25

30.22

833-.15-.30-.05

17.64

30.898.73

9.2413.0277,82

5.24

3.74

1995

7.607.75

10.6012.258.288.43

10.105.712.809,98

14.23

.44

.60-L54

-19.20

6,44435

18.527.656.62

7.223.95

-3.10835

10.62

5.1319.60

6.6111.662032

12.08

5,82

1996

6.135.708.167.295.555.614.926.773.174.88

22.24

34.84

-1.12-14.29

3.621.79

14.43-.898.94

5.994,12

-3.428.339.71

4.2621,18

17.778322.83

7.54

7,78

MEMO:Dec. 1996

levels(billions

of dollars)

4,5553,9352,742

706L1321,104

689415

28558404

58924793165

438189132269620

4,1802,386

793L5931,514

473315

51674280

375

414

NOTE. Data are from year-end to year-end.n.a. Not available.1. Measured as the sum of deposits in foreign offices, large time deposits in

domestic offices, federal funds purchased and securities sold under agreementsto resell, demand notes issued to the U.S. Treasury, subordinated notes anddebentures, and other borrowed money.

2. Measured as the sum of construction and land development loans secureiby real estate; real estate loans secured by nonfarm nonresidential propertiesand loans to finance commercial real estate, construction, and land developmenactivities not secured by real estate.



The securitized share of bank-originated consumerloans rose further last year, to almost 25 percent(chart 5). After adjustment for securitization, theslowing of growth of consumer loans on banks' bal-ance sheets is much less pronounced—from a littlemore than 17 percent in 1995 to about 141A percent in1996.

LPS respondents indicated that the demand forconsumer loans dropped off a bit at the end of theyear (chart 6). The decline may have been a result ofhigher consumer debt burdens. On the supply side,banks reported that they had tightened standards forapproving consumer loans, particularly credit cardloans, as well as terms on new or existing credit card

3. Spread of C&I loan rate over intended federal funds rate,by size of ban. 1987-96

Basis points

All loans Four-quarter moving average

More than $1,000,000

$100,000 to $1,000,000

I I

Less than $100,000

1987 1989 1991 1993 1995

NOTE. The data are quarterly.SOURCE. Survey of Terms of Bank Lending to Business, Federal Reserve

Board statistical release E.2.

4. Outstanding bank loans as a share of total creditmarket debt of nonfmancial businesses, 1970-96

M M M M M M M M M M M M M 11970 1975 198Q 1985 1990 1995

NOTE. The data are quarterly.SOURCE. Flow of funds accounts of the United States, table L. 101.

loans, most often by reducing credit lines or widen-ing the spreads of loan rates over base rates. Thesereports of tightening are in sharp contrast to thepicture at the beginning of 1995, when banks reportedhaving eased standards for approving credit cardapplications as well as terms on credit card accounts,by narrowing spreads over base rates, raising creditlimits, and reducing annual fees. Despite the reportedtightening of standards in 1996, banks increased linesof credit on credit cards faster than outstandingsincreased, resulting in a slight drop in utilizationrates.

Residential mortgages, which represent l4Vi per-cent of commercial bank assets, also grew moreslowly in 1996—about 5 percent, a little less thanhalf the average for the past three years. Althoughthe LPS indicated that banks had slightly tightened

5. Securitized share of consumer loan outstandingsoriginated by banks, 1988-96

Pfercent

1988 1990 1992 1994 1996

NOTE. The data are quarterly.


Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 469

6. Net percentage of selected commercial banks thatexperienced increased demand for consumer loans,1992-96

Percent

— 40

— 20

20

1992 1993 1994 1995 1996

NOTE. The data are quarterly. Net percentage is the percentage of banksreporting increased demand less the percentage reporting decreased demand.

SOURCE. Senior Loan Officer Opinion Survey on Bank Lending Practices.

lending standards for home mortgages, the slowingof growth appears to reflect a heavy pace of securiti-zation rather than a reduced pace of originations:Total residential mortgages originated by banks andnonbanks, including mortgages held in pools of mort-gage securities, expanded 8% percent last year, thefastest rate since 1990.

Loans in one residential real estate category, homeequity loans, increased significantly over the year.Respondents to the LPS reported stronger demand forsuch loans. In addition, some banks increased theirmarketing efforts for home equity loans and targetedspecific customers in an effort to encourage a shiftfrom unsecured consumer loans to secured homeequity lines. Because home equity lines are oftenused to pay down unsecured consumer debt, theirexpansion likely explains a portion of the slowing ofgrowth of consumer lending.

Securities

Banks' securities holdings grew less than 1 percent in1996 and at year-end represented 21 percent of assets,the lowest proportion in five years. Banks used aportion of their investment account securities as asource of funds, but this decline was about offset byan increase in the value of securities held in tradingaccounts. Small banks held a greater proportion oftheir assets in securities than did large banks, nearly30 percent compared with 17 percent.

An off-balance-sheet item of note is banks' hold-ings of derivatives. During 1996, the notional value

of derivatives contracts of all types held by banksincreased about \$>lA percent over 1995's year-endvalue; a large part of the increase occurred at the tenlargest banks, which hold the vast majority of suchcontracts.5 Most of the holdings were in the form ofinterest rate contracts. Of the year-end 1996 notionalvalue, more than 92 percent was related to contractsheld for trading purposes; these are used primarily tohelp customers hedge against the risk of changes ininterest rates, exchange rates, equity prices, and com-modity prices. The remainder was related to contractsheld for nontrading purposes, primarily to hedgeagainst risks to the banks themselves.

Liabilities

Core deposits at banks advanced moderately in 1996,growing more slowly than bank assets. Growth wassluggish partly because banks set deposit rates lowrelative to the rates of return available on alternativeinvestments (chart 7). On average, rates on moneymarket mutual funds were 2 percentage points higherthan rates on bank savings accounts, and the returnon most stock mutual funds also significantlyexceeded bank deposit rates.

Within core deposits, transaction deposits fell forthe third year in a row. The decline can be attributedto the implementation of retail "sweep" accounts,whereby funds are automatically swept out of trans-

5. The notional value of a derivative is the value of the underlyingfinancial asset, index, or other investment used to calculate the pay-ments specified in the contract. Only the payments represent benefitsor risks to the banks.

7. Selected interest rates, 1987-96

Percent

Motley marketmutual funds

Six-month Certificates of deposit

1987 1989 1991 1993 1995

NOTE. The data are monthly. Rates are at commercial banks. Savingsaccounts include money market deposit accounts.

SOURCES. Federal Reserve Board statistical releases H.6 and H.I5.



action accounts, against which banks must holdreserves, and into money market accounts, againstwhich they need not hold reserves. This arrangementhas no effect on the total amount of retail deposits,but it does reduce the amount of non-interest-bearingrequired reserves a bank must hold at the FederalReserve, freeing up these funds to be invested else-where. In 1996 the volume of new retail sweepaccounts tripled, bringing the cumulative amountswept out of retail transaction accounts to about$170 billion (chart 8).

To fund the growth of bank assets in the presenceof the relatively slow expansion of core deposits,banks relied heavily on managed liabilities, whichgrew faster than total bank assets for the fourthconsecutive year. Increases in large time deposits andin subordinated notes and debentures fueled thegrowth in this category, while deposits booked inforeign offices were a much less important source offunds for domestic lending. The rates of growth fordifferent categories of managed liabilities have variedwidely over the past few years, in part because of thereduction of deposit insurance premiums in 1995 andthe beginning of 1996, which increased the attractive-ness of large time deposits as a source of funds.6

6. Over this period, deposit insurance premiums for well-capitalized banks were reduced to zero. Although they are insured upto only $100,000, large time deposits are included in the assessmentbase used to determine insurance premiums, and therefore the cost ofthis source of funding varies with the insurance premiums. Depositinsurance premiums are not paid on foreign deposits. For furtherdiscussion, see William R. Nelson and Brian K. Reid, "Profits andBalance Sheet Developments at U.S. Commercial Banks in 1995,"Federal Reserve Bulletin, vol. 82 (June 1996), pp. 483-505.

Cumulative amount transferred out of retail transactionaccounts upon initiation of sweep accounts, 1994-96

HI

Capital

The share of their assets that banks funded withcapital was about the same in 1996 as it was in 1995.As a result, the leverage ratio remained basicallyunchanged last year, on net, although risk-basedcapital ratios (tier 1 and total) declined slightly(chart 9).7 The risk-based capital measures havefallen a bit over the past two years because of therelatively more rapid growth of loans, which carry

7. The tier 1 ratio is the ratio of tier 1 capital to risk-weightedassets, and the total ratio is the ratio of the sum of tier 1 and tier 2capital to risk-weighted assets. Tier 1 capital consists mainly ofcommon equity (excluding capital gains and losses on investmentaccount securities classified as available for sale) and certain perpetualpreferred stock. Tier 2 capital consists primarily of subordinated debt,non-tier 1 preferred stock, and loan-loss reserves. Risk-weightedassets are calculated by multiplying the amount of assets and thecredit equivalent amount of off-balance-sheet items by the risk weightfor each category. The leverage ratio is the ratio of tier 1 capital tototal assets.

For a summary of the evolution of risk-based capital standards, seeAllan D. Brunner and William B. English, "Profits and Balance SheetDevelopments at U.S. Commercial Banks in 1992," Federal ReserveBulletin, vol. 79 (July 1993), pp. 661-62.

9. Regulatory capital ratios, and share of industry assetsat well-capitalized banks, 1991-96

Regulatory capitalratios

— 12

10

Share of industry assets atwell-capitalized banks

— 100

— 80

— 60

— 40

1991

§11111111992 1993 1994 1995 1996

NOTE. The data are monthly.NOTE. The data are quarterly. For definitions of tier 1 and tier 2 capital and

leverage ratio, see text footnote 7.


Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 All

higher risk weights than do securities.8 Despite thedecline in industry-average capital ratios, the fractionof bank assets at well-capitalized banks—those withsound capital ratios and positive examiner ratings—increased again last year, crowding still closer to100 percent.

Banks boosted their equity last year even thoughthey significantly increased the share of income theypaid out as dividends. This high payout by bankscontributed to generous distributions by bank holdingcompanies. The top fifty bank holding companiesincreased their dividends about 20 percent. Further-more, net expenditures on stock repurchases by thesecompanies grew more than 50 percent last year andapproached four-fifths of the amount disbursedthrough dividends.

TRENDS IN PROFITABILITY

10. Stock price indexes, 1996-April 1997

Index, January 3, 1996 = 100

Money centerbank holding companies

— 175

150

— 125

S&P 500

Regional and money centerbank holding companies __

1996 1997

NOTE. The data are weekly. The bank indexes are for eight money centerbank holding companies and forty-two regional bank holding companies asdefined by Salomon Brothers.

SOURCES. Salomon Brothers and Standard & Poor's.

The net income of U.S. commercial banks grew 8 per-cent in 1996, the seventh consecutive annual increase.The return on equity remained in the elevated range ithas occupied since 1993, and the return on assetsposted a new high. The increase in profitability waswidespread: The average return on assets rose for allfour bank size groups, and net income was positive at95 percent of all banks, accounting for 99 percent oftotal bank assets. Profits were boosted a bit by growthof net interest income but more by higher noninterestincome. Taken together, the gains in net interest andnoninterest income exceeded the increases in non-interest expense and provisioning for loan and leaselosses. Propelled in part by growth of profits, stocksof large bank holding companies outperformed thebroader market in 1996, as they had in 1995(chart 10).

Last year was the fourth consecutive year in whichmeasures of commercial bank profitability signifi-cantly exceeded the long-term norms. For example,

8. Banks' capital situation was not materially affected by holdingcompanies' explosive issuance of trust preferred securities last fall.These securities are created when a bank holding company establishesa trust that issues cumulative preferred stock and then loans theproceeds to the parent company. The resulting liability counts as tier 1capital for the holding company, but the interest payments on the debtare tax deductible—a combination of features sufficiently attractivethat holding companies issued $6 billion of these securities last year inthe public market and probably several times that amount in theprivate market. Nevertheless, these transactions do not show up onbanks' balance sheets except in the rare instance that the trust issuingthe securities is organized under the bank rather than the holdingcompany, in which case the preferred stock is classified as tier 2capital for the bank. In 1996 banks issued about $1.2 billion in trustpreferred securities, only lA of 1 percent of total (tier 1 plus tier 2)bank capital.

the return on assets averaged 63 basis points moreover the past four years than over the preceding sevenyears (table 1). The recent improvement is due in partto a sharp drop in loss provisioning relative to assets,which has allowed some other longer-term trendsboosting return on assets to show through. First, theratio of net interest income to assets has been increas-ing because banks have been shifting their portfoliostoward riskier assets, which carry higher yields, andhave been funding a larger share of assets with capi-tal instead of interest-bearing liabilities. Also, ongo-ing improvements in efficiency have helped bankslower the ratio of noninterest expense to revenue.Finally, noninterest income has accounted for asteadily growing share of revenue, partly becauseof the increasing importance of off-balance-sheetactivity.9

Interest Income and Expense

Both interest income and interest expense as a per-centage of assets fell slightly at commercial banks

9. The increasing importance of off-balance-sheet activity has alsomade return on assets as a measure of profitability less meaningfulover time. Nevertheless, a large fraction of banking is still tied totraditional on-balance-sheet items, and in interpreting changes in netincome, assets remain a useful scaling factor for separating the effectsof growth from those of improved profitability. The other commonmeasure of profitability—return on equity—is, of course, not affectedby changes in the relative importance of off-balance-sheet activity.However, interpreting trends in this measure is complicated by thesignificant increases in capital-to-assets ratios in recent years inresponse, in part, to regulatory changes.



last year, reflecting the moderately lower market ratesthat prevailed, on average, in 1996 relative to 1995.The decline in expense exceeded the decline inincome, leaving net interest income as a percentageof assets (the net interest margin) 3 basis pointshigher than in 1995 and, despite declines in 1994 and1995, still elevated relative to the late 1980s.

The net interest margin was held down in the late1980s by competition among banks for loans andfunding sources. It surged in 1991 and 1992 as bankswidened spreads between loan and deposit rates inan effort to improve capital ratios by boosting earn-ings and curbing asset growth (chart 11). The riseoccurred even though loans, which tend to yield morethan securities, declined as a share of assets.

Since 1992, more aggressive loan pricing andgreater reliance on managed liabilities have squeezedthe net interest margin somewhat, but it remains highfor several reasons. First, compared with the early1990s, banks fund a significantly larger fraction ofassets with capital, and the returns on capital are notconsidered an interest expense. Also, rates paid onretail deposits have been low relative to market rates.Finally, the margin has been held up significantly by

a rebound in the share of assets in loans and a risingvolume of loans to households, a relatively highyielding category of loans.

Noninterest Income and Expense

Noninterest income provided a hefty boost to returnon assets last year, increasing 17 basis points as apercentage of assets relative to 1995. Over the pastten years, noninterest income has accounted foran expanding share of bank revenue (chart 12). Asmall part of the increase has been from fiduci-ary activities and trading revenue, but most of thegrowth has been in the broad category "other nonin-terest income," which includes merchant credit cardfees, annual cardholder fees, fees for servicing mort-gages, and income from loans that have been securi-tized. Thus, the increase in the proportion of revenueaccounted for by noninterest income likely reflectsboth the expansion of bank lending to householdsand the growing fraction of bank loans that aresecuritized.

11. Net interest income and the composition of assets,1985-96

liilliilii^Bi^^B^^^MiiWiili

i i i

aHMHSHi

12. Noninterest income and its componentsi percentage of total revenue, 1985-96as a

BliiliiiitililSIIIill

§11

IfiliiiiiiBiliiSii

•iiliiiiiiiiiiliiillilillliiWll

wmm^mmmmmmmmmmmmmiiiili

NOTE. The data are annual. NOTE. The data are annual.Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis


Noninterest expense as a percentage of assetsrose 8 basis points in 1996 even though occupancyand employee costs were about unchanged. Theincrease reflects a rise in "other noninterest expense"accounted for by two recent adjustments in depositinsurance premiums. In 1995, banks received a rebateo( $ 1 Vi billion for overpayment of deposit insurance,while in 1996, banks that had acquired thrift depositspaid a $11A billion one-time assessment to support(he Savings Association Insurance Fund. Other

noninterest expense was also boosted last year b>higher merger restructuring charges, with the ChaseManhattan Corporation-Chemical Banking Corpo-ration merger alone accounting for $13A billion irexpenses. (See the accompanying box for a brieldiscussion of the continuing consolidation of thebanking industry.)

Over the past ten years, noninterest expense hasbeen held in check in part by a decline in employ-ment and occupancy costs as a percentage of revenue

Consolidation of the Banking Industry

The past decade has seen a marked consolidation of the U.S.commercial banking industry. In 1996, 359 banking organi-zations with combined assets totaling about $450 billionmerged or were acquired, contributing to the continuingdecline in the number of banks and bank holding companies(chart). As a result of this consolidation, the assets heldby the fifty largest bank holding companies represent anincreasing share of total banking assets (chart).

Regulatory changes have been an important factor in theconsolidation of the banking industry. For many years, legalrestrictions on the geographic expansion of banks generallylimited the size of any one bank or bank holding company;in many cases a banking organization was prohibited fromexpanding within its home state as well as into other states.Over the past fifteen years, these restrictions have beeneased. Most states now allow some, if not all, out-of-statebank holding companies to own banks within their state.Many states have also lifted restrictions on intrastatebranching of state-chartered banks, which in turn hasresulted in broader branching powers being given tonational banks.

The Riegle-Neal Interstate Banking and Branching Effi-ciency Act of 1994 went even further in removing geo-graphic restrictions by allowing bank holding companies to

Number of U.S. commercial banking organizations,1986-96

purchase banks throughout the United States after Septem-ber 1995. In June 1997, remaining legal restrictions ongeographic expansion were removed, and all banks are nowallowed to acquire established branches through interstatemergers, provided that the state has not opted out of inter-state banking.1 (Only Texas and Montana have opted out.)

Before completing a merger or acquisition, banks andbank holding companies still must obtain approval from theappropriate regulatory agencies. Under the Bank HoldingCompany Act and the Bank Merger Act, the Board ofGovernors of the Federal Reserve System oversees themergers and acquisitions of bank holding companies and ofstate member banks. In considering these applications, theBoard looks at the effect of the merger or acquisition on thecompetitiveness of the relevant banking market, the finan-cial and managerial resources of the firms involved, and theconvenience and needs of the community.

1. Both the purchase of banks by out-of-state holding companies and theacquisition of established branches through interstate mergers are subject todeposit caps and certain state laws. Specifically, the combined organizationmay control no more than 10 percent of the insured deposits in the UnitedStates and is subject to deposit limits of the relevant state. In addition, theacquired bank must have been in existence the minimum amount of timerequired by state law.

Share of banking assets held by the fifty largest bankholding companies, 1986-96

— li

— io

1986 1988 1990 1992 1994 1996

,rlUlL.iL.sm

{ — 60

I — 40

— 20

_L_J1986 1988 1990 1992 1994 1996



13. Noninterest expense and its componentsas a percentage of total revenue, 1985-96

Total noninterest expense

64

1 i

Components

—**—*

_

.—

1 t1985

i ( 1 1 1 . 1 i

Salaries and benefits

Other noninterest expenses

—

-—.

Premises and fixed assets

i 1 1 i t i i 1 11990 1995

35

30

25

20

15

10


(chart 13). Employment levels in the industry fellduring the late 1980s and early 1990s and havesince remained about unchanged. Occupancy costshave likely benefited from the slow growth of thenumber of bank offices, which rose only 17 percentbetween 1986 and 1996, one-third the increase inrevenue, adjusted for inflation, over that period.Furthermore, over the ten years, the inflation-adjustedcost per office fell more than 10 percent. These costsmay have been contained in part by the growingpopularity of low-cost supermarket branches. Bycontrast, other noninterest expense, a broad categorythat accounts for nearly half of noninterest expenseand includes deposit insurance premiums, losseson the sale of various assets, amortization of intan-gible assets, expenditures for information process-ing services provided by others, and mergerrestructuring charges, has risen a bit relative torevenue. Nevertheless, the ratio of total noninterestexpense to revenue has fallen over the past ten years;thus, at least by this common measure of efficiency,banks appear to have significantly streamlined theiroperations.

Loss Provisioning and Loan Quality

Since 1992, the banking industry has been settingaside as a provision against losses on loans andleases amounts very close to their net charge-offs(chart 14). In keeping with this pattern, provisioningrose slightly last year, matching a small increase innet charge-offs. Although loan-loss provisioning rela-tive to assets edged higher over the past two years, itwas quite a bit lower at the end of 1996 than earlierin the 1990s and about the same as at the beginningof the 1980s. Banks were able to reduce provisioningin 1992 because improvements in loan quality anda contraction in loans sharply reduced their needfor loan-loss reserves. In recent years, continuedimprovements in measured loan quality have allowedbanks to equalize provisioning and net charge-offs,leaving the level of reserves unchanged. Althoughthe ratio of reserves to loans fell in each of the pastfour years, the ratio of reserves to delinquent loansincreased until 1995, fell only slightly last year, andwas more than 80 percent at year-end (chart 15).However, net charge-offs grew faster than delinquen-cies, and the ratio of reserves to charge-offs fell fairlysharply in the past two years. Still, in 1996, loan-lossreserves were 3Vi times as large as net charge-offs inthat year, a bit above average.

Although the decline in provisioning relative tothe levels in the troubled late 1980s and early 1990shas helped boost measures of bank profitability,banks would still be solidly profitable even if provi-sioning were much higher. For example, if provision-ing had been double its actual level last year, the ratioof provisioning to assets would have been about50 percent higher than its average level since 1970.Nevertheless, net interest income less provisioning

14. Reserves for loan and lease losses, loss provisioning, andnet charge-offs as a percentage of loans, 1980-96

. Percent

Reserves for loan and lease losses

1 i 1 i 1 I 1 1 1 11980 1985 1990 1995




>qyacv of ioai>!oss reserves, 1985-96 Delinquency and charge-off rates, all loans, 1985-96


would have equaled 3 percent of assets, slightlyabove the average level for this ratio since 1970. Thereturn on assets would drop to a bit under 1 percent,but it would still be a bit above its average over theperiod, and the return on equity would fall toll!/2 percent, about equal to its average over theperiod.

Banks were able to keep provisioning low last yearbecause, overall, the performance of bank loansremained quite good. Delinquency and charge-off

17\ Delinquency ana charge-off rates, by tvpe of loan, 1991-96

NOTE. The data are quarterly and are seasonally adjusted. Delinquent loansare loans that are not accruing interest and those that are accuring interest but aremore than thirty days past due. The delinquency rate is the end-of-period levelof delinquent loans divided by the end-of-period level of outstanding loans. Thecharge-off rate is the annualized amount of charge-offs over the quarter net ofrecoveries, divided by the average level of outstanding loans.

rates for loans to businesses remained low even as theperformance of loans to households deteriorated fur-ther (chart 16). Within the business loan category, theperformance of commercial real estate loans has beenimproving dramatically (chart 17). Indeed, the net

^•vs^^^^îiK^^^SMWi^SîîffiS^W^^^^^^H

DelinqiMiiey rates for loans to |iQiis0hell||

NOTE. The data are quarterly and are seasonally adjusted.See note on chart 16.



Credit Card Banks

Since the early 1980s, bank holding companies have beencreating subsidiary banks that specialize in credit card lend-ing. These institutions were initially established in statesthat had a high interest rate ceiling, or no ceiling at all, toavoid the limitations imposed by usury laws in other states.Although interest rate ceilings no longer restrict desiredlending rates in most states, bank holding companies con-tinue to create subsidiaries that specialize in credit cardlending, presumably because of the economies of scale thatare obtained by concentrating this line of business at asingle bank. In 1996, credit card banks, defined here asbanks among the top 1,000 by assets for which credit cardloans constitute more than half of assets, accounted formore than 60 percent of credit card outstandings at allbanks. By this definition, there were forty credit card banksat the end of 1996, up from eleven at the end of 1985.

On average, 85 percent of the assets of these banks at theend of 1996 were credit card receivables (table). The banksfunded themselves largely with managed liabilities, andthey had significantly higher capital ratios than the typicalcommercial bank. Credit card banks also fund a relativelylarge fraction of the loans they originate through securitiza-tions, which typically remove the affected loans from theirbooks. At year-end 1996, about one-half of the outstandingbalances on credit card loans made by these banks wereseeuritized, compared with about one-fourth for the rest ofthe industry.

The profitability of credit card banks has been reduced bythe erosion of consumer credit quality. Delinquency andcharge-off rates for loans at credit card banks have risensharply in the past two years, and returns on assets and on

equity at these banks have fallen dramatically. Nearly one-fourth of credit card banks, accounting for about 10 percentof the assets held by such banks, posted losses in 1996.Still, the average return on equity at credit card banks lastyear was well above the average for commercial banks as awhole (chart).

Rising loan-loss rates lower the profits of credit cardbanks in two ways. For loans on their balance sheets,charge-offs deplete loan-loss reserves and lead to higherprovisioning. Indeed, provisioning as a percentage of assetsat these banks increased more than 1 percentage point in thepast two years. Higher charge-off rates need not implyreduced profitability if interest margins are rising to offsetthe losses. However, intense competition for credit cardbalances has placed downward pressure on net interestmargins even as losses have mounted. In sum, net interestincome less provisioning fell from 5 percent of assets in1993 to 3 percent last year.

Selected balance sheetand all banks, 1996Percentage of assets

Item

Loans . .ConsumerCredit card . . . .

Securities

Managed liabilities ..

Capital account

items for credit card banks

Credit cardbanks

87.6485.0183.98

3.98

79.15

11.54

All banks

61.1212.264.93

18,20

32.73

8.27. ,

charge-off rate for these loans hovered near zero overmost of last year, as banks recovered amounts similarto the amounts they charged off. Both delinquencyand charge-off rates for C&I loans remained nearrecord lows in both 1995 and 1996.

By contrast, delinquency rates for loans to house-holds have risen somewhat since 1994: Delinquencyrates for credit card loans and for "other consumerloans" have reversed more than half of their declinesfrom 1991 peaks, and the rate for residential realestate loans has reversed about one-third of itsdecline. Charge-off rates for credit card loans andother consumer loans also are higher, with theloss rate for credit card loans in 1996 nearly reachingthe peak levels of the early 1990s. Banks that special-ize in credit card lending have been particularly hurtby the rising loss rates (see box "Credit CardBanks").

Some of the disparity in the performances ofhousehold and businesses loans can be accounted for

by differences in financial stress experienced by thetwo sectors (chart 18). For businesses, the ratio ofinterest payments to revenue has been relatively lowin recent years, whereas for households, the ratio ofinterest payments and required principal payments todisposable income has risen steadily to about itselevated level at the end of the 1980s. In recent yearsbanks have been aggressively marketing consumercredit to more-marginal borrowers. This expansion ofcredit to households that would not have qualifiedpreviously is probably one of the reasons householddebt burden has gone up and also suggests that banksmay have anticipated some of the rise in the charge-off rates on these loans.

Another factor influencing delinquency andcharge-off rates may have been changes in the paceof loan growth. An increase in the rate of growth ofa loan portfolio generally lowers its average age.Because loans are less likely to go bad soon afterthey are made, a reduction in average age may tern-


Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 All

Credit Card Banks—Continued

Measures of profitability and components of revenue atcredit card banks, 1985-%

Measures of profitability

30 —Return on equity

25 ~~

20

Percent of assets . Percentage of assets

Components of ne venueNet iaterest income

3.5

1990 1995

For loans that have been removed from banks' balancesheets through securitization, charge-offs result in lower feeincome. The residual between the rates paid on securitiesbacked by credit card loans and the rates earned on theunderlying loans accrues to the bank as fee income, butonly after loan losses have been covered.1 Noninterestincome, which includes fee income, has fallen 1V2 percent-age points as a share of assets since 1993. If the netcharge-off rate for securitized loans were the same as therate reported for on-balance-sheet loans, nearly all thedecline in noninterest income could be accounted for by theincreased losses.

Even as loan quality at credit card banks has deteriorated,increased provisioning has pushed up the level of loan-lossreserves relative to delinquent loans. Net charge-off rateshave risen more quickly than delinquency rates, however,and the ratio of reserves to charge-offs has fallen over thepast two years. At the end of last year, reserves equaledabout nine months of losses, down from more than one yearof losses at the end of 1994. Even if loss rates worsen, profitmargins at these banks are, on average, wide enough toabsorb additional increases in provisioning. Furthermore,the capital ratios at credit card banks, although having fallenslightly over the past few years, remain high.

1. For more information on the securitization of consumer loans by banks,see Nelson and Reid, "Profits and Balance Sheet Developments at U.S.Commercial Banks in 1995," p. 488.

porarily lower delinquency and charge-off rates. Asthe loans in the portfolio mature, or "season,"delinquency and charge-off rates tend to rise. Therapid growth of C&I loans in recent years maythus be depressing their delinquency and charge-offrates.

DEVELOPMENTS IN 1997

During the first quarter of 1997, bank asset growthat domestic offices continued at the robust paceposted in the preceding quarter. The value of C&Iloans increased sharply, and the value of real estateloans, which had grown only slowly in 1996,expanded solidly. By contrast, the value of consumerloans on banks' books was little changed over thequarter as moderate increases in outstanding amountson loans originated by banks were about matched bysecuritizations.

u burden. i^'S- '•)(••,

17.5 —

17.0 —-

1985 1987 1989 1991 1993 1995

NOTE. The data are quarterly and are seasonally adjusted.For businesses (nonrinancial corporations only), the debt burden is calculated

as interest payments as a percentage of revenue; for households, it is an estimateof interest payments and required principal payments as a percentage of dispos-able income.

SOURCES. National income and product accounts and the Federal ReserveSystem.



Despite some volatility perhaps resulting from ing company profits showed solid gains in net interestfears of rising interest rates, indexes of stock prices and noninterest income and reductions in merger-of bank holding companies climbed further in 1997, related costs. Nevertheless, the earnings of severalrising 10 percent by the end of April and outpacing bank holding companies were again hurt by risingbroader market indexes. Initial reports of bank hold- charge-offs of consumer loans.



A.I. Report of income, all insured domesticMillions of dollars

commercial banks, 1987-96

Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

Gross interest incomeTaxable equivalent

Loans . ,Securities . . —Gross federal funds sold and reverse

repurchase agreements .Other . . . . . .

Gross interest expenseDepositsGross federal funds purchased and

repurchase agreementsOther . . . .

Net interest income . . . ,

Taxable equivalent . . . . .

Loss provisioning1

Noninterest income . . . , . . . ' .Service charges on depositsIncome from fiduciary activities . . . . . .Trading incomeOther -.:

Noninterest expenseSalaries, wages, and employee benefitsExpenses of premises and fixed assetsOther . . , / . . . , .

Net noninterest expense

Realized gains on investment accountsecurities , .

Income before taxes and extraordinaryitems ,

TaxesExtraordinary items

Net income .-.Cash dividends declared . . . . . . . . . . . . . .Retained income .;

245,089251,085180,64839,485

9,03315,923

145,166115,807

15,92613,432

99,923105,919

41,9138,7587,1453,559

22,451

97,85745,40515,34237,110

1,447

274,144279,714202,85342,199

10,63918,453

166,345130,310

18,96317,073

107,799113,369

317,072321,277237,82446,724

13,06119,463

205,092157,481

24,89822,712

111,980116,185

320,186323,827238,68050,987

12,54717,970

204,822161,365

22,76920,686

115,364119,005

289,884293,072214,39652,618

9,12813,745

167,870138,930

14,35914,581

122,014125,202

257,038260,020186,31252,052

5,92612,748

122,78999,038

9,27914,471

134,249137,231

244,934247,816178,55548,732

4,79812,848

105,69779,575

- 8,44917,674

139,237142,119

257,365260,127189,98348,374

6,42212,588

110,95679,205

12,48119,269

146,409149,171

302,791305,431227,542

51,116

9,75214383

148,115105,427

18,42424,263

154,676157,316

45,7209,5327,5263,691

24,970

103,06247,13416,00239,926

51,59810,2728,3144,051

28,961

108,99349,41316,69842,882

55,67511,4448,8814,85430,495

116,55952,08217,54146,934

60,65012,8439,4565,960

32,389

126,06153,60217,90654,553

67,16314,17810,4726,27436,237

133,14355,62518,19059,329

75,87114,90611,2039,238

40,524

140,60858,54218,58763,479

77,27115,30312,1276,249

43,592

145,07460,98818,99965,087

83,88716,07512,8896,337

48,586

151,26064,07619,77867,407

278 799 474 2,925 3,956 3,055 -573 480

315,552318,021241,44550,853

9,29313,962

151,005107,951

16,90226,152

164,547167,016

37,891 19,777 31,300 32,275 34,869 26,866 16,854 11,003 12,626 16,627

95,73317,15214,2307,540

56,812

163,36468,05520,96774,342

55,944 57,342 57,395 60,884 65,411 65,980 64,737 67,803 67,373 67,631

1,125

7,5365,410200

2,32710,659-8,332

30,9569,996811

21,77113,2758,496

24,0839,551313

14,84614,129

716

22,6807,740649

15,58913,9441,645

24,6598,284993

17,37115,0802,291

45,35814,476

404

31,28514,23517,050

60,70319,8522,087

42,93722,07220,865

67,03422,450

-17

44,56628,18116,385

75,15726,287

28

48,89931,11917,779

81,41328,645

91

5235840,02212,836

1. Includes provisioning for allocated transfer risk.



A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks, 1987-96A. All banks

Item 1987 1988 1989 1990 1991 1992 1993 1994 I 1995, t

1996

Balance sheet items as a percentage of average net consolidated assets

Interest-earning assetsLoans and leases, net

Commercial and industrialU.S. addresseesForeign addressees

ConsumerCredit cardInstallment and other

Real estateIn domestic offices .

Construction and land developmentFarmlandOne- to four-family residential

Home equityOther

Multifamily residentialNonfarm nonresident! al

In foreign officesDepository institutionsForeign governmentsAgricultural productionOther loansLease-financing receivablesLESS: Unearned income on loansLESS: LOSS reserves'

SecuritiesInvestment account

DebtU.S. TreasuryU.S. government agency and

corporation obligationsGovernment-backed mortgage pools ..Collateralized mortgage obligations . . .Other

State and local governmentOther

Equity2

Trading accountGross federal funds sold and reverse RPsInterest-bearing balances at depositories

Non-interest-earning assetsRevaluation gains on off-balance-sheet items3 ..Other

LiabilitiesInterest-bearing liabilities

DepositsIn foreign officesIn domestic offices

Other checkable depositsSavings (including MMDAs)Small-denomination time depositsLarge-denomjnation time deposits

Gross federal funds purchased and RPsOther

Non-interest-bearing liabilitiesDemand deposits in domestic officesRevaluation losses on off-balance-sheet items3

Other

Capital account

MEMOCommercial real estate loansOther real estate ownedManaged liabilitiesAverage net consolidated assets

(billions of dollars)

87.4859.1219.9816.573.41

11.423.178.26

19.0018.403.90

.478.22n.a.n.a.

.575.25.60

2.281.351.044.98

.98-.52

-1.4018.3417.0017.006.02

4.142.10n.a.2.044.402.44n.a.L344.575.45

12.52n.a.12.52

93.8374.0361.2611.0250.24

6.0418.2815.0610.868.134.64

19.8015.34n.a.4.46

6.17

88.0059.8019.5016.552.95

11.723.478.25

20.8620.184.06

.499.211.148.07

.595.83

.682.041.22.98

4.521.06-.50

-1.6118.4517.1717.175.60

4.882.59n.a.2.293.692.99n.a.1.284.555.21

12,00n.a.

12.00

93.8475.4062.0610.4151.666.25

17.6016.2511.558.025.31

18.4514.25n.a.4.20

6.16

87.9460.6419.0916.542.55

11.893.698.20

22.5021.784.16

,5110.15

1.428.73

.606.36

.721.76L03.96

4.311.10-.48

-1.5218.3917.1416.844.98

6.043.27n.a.2.773.152.68

.291.254.334.58

12.06n.a.

12.06

93.6476.0262.58

9.6852.906.12

16.2818.3812,138.225.22

17.6213.49n.a.4.13

6.36

87.8260.5318.5015.992.51

11.773.787.99

23.8623.104.00

.5111.21

1.679.54

.626.76

.761.60.78.96

3.931.12-.42

-1.5719.0917.6317.374.57

7.564,081.282.202.642.59

.271.464.463.75

12.18n.a.

12.18

93.6076.5363.449.26

54.186.19

16.5919.9611.448.035.07

17.0712.79n.a.4.27

6.40

88.0459.5517.3315.002.33

11.453.887.57

24.8724.113.41

.5312.27

1.9510.32

.667.23.76

1.42.75

1.013.601.09-.36

-1,6220.7018.9318.625.06

8.754.522.072.162.282.53

.311.774.583.21

11.96n.a.11.96

93.3376.5864.45

8.5555,90

6.7218.0021.30

9.897.095.03

16.7512.59n.a.4.16

6.67

88,3357.3015.7813.542.24

11.023.827.20

24.8724.18

2.64.56

12.912.09

10.82.75

7.32.69

1.24.73

1.023.501.03-.28

-1.6023.5221.1820.826.49

9.864.523.122.212.082.40

.372344.542.97

11.67n.a.

11.67

92.8275.3262.93

8.3754.56

7.6520.2819.217.427.025.37

17.5013.24n.a.4.27

7.18

88.5056.2514.8812.722.16

11.003.89l.U

24.8024.18

1.99.57

13.492.07

11.42.79

7.33.62

1.08.67.99

3.56.99

-.21-1.5125.3722.5022.12

7.07

10.734.743.722.272.062.25

.382.874.272.62

11.50n.a.11.50

92.1573.9260.26

8.3251.94

8.2420.9016.985.817.476.19

18.2313.86n.a.4.37

7.85

86.5556.0614.5112.352.16

11.434.217.22

24.4323.81

1.65.56

13.741.91

11.84.79

7.07.63

1.42.41

1.003.341.03-.16

-1.3624.2721.6021.21

6.77

10:244.673.242.332.022.18

.392.673.822.40

13.452.61

10.84

92.1271.8657.34

9.3947.96

7.8019.6015.335.237.606.92

20.2613.492.324.45

7.88

86.4858.3915.2012.872.33

12.114.727.39

25.0024.36

1.59.56

14.411.88

12.54.81

6.97.65

1.88.30.96

3.151.19-.14

-1.2721.9419.3818.975.25

9.814.462.672.681.802.11

.412.553.932.23

13.522.90

10.62

91.9971.8756.2810.2746.01

6.6317.4716.145.777.707.88

20.1212.682.884.57

8.01

86.8159.9115.5913.062.53

12.264.937.33

25.0424.42

1.63.56

14.421.85

12.57.85

6.96.63

2.29.26.92

3.361.51-.12

-1.2121.0018.2017.744.19

9.744.802.112.831.682.13

.452.813.822.08

13.192.24

10.95

91.7371.6355.8310.0145.83

4.7618.6915.966.417.188.62

20.1012.812.145.14

8.27

n.a..35

35.13

n.a..39

35.74

n.a..39

35.69

n.a..50

34.24

11.36.75

30.99

10.59.82

28.65

9.83.63

28.23

9.15.36

29.57

9.01.19

32.06

9.06.14

32.73

2,922 3,048 3.187 3,338 3,379 3,442 3,566 3,863 4,149 4,379



A.2.—Continued

A. All banks

Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

Effective interest rate (percent)4

Rates earnedInterest-earning assets

Taxable equivalentLoans and leases, gross

Net of loss provisionsSecurities

Taxable equivalent ,Investment account

U.S. government and other debtState and localEquity2

Trading account .Gross federal funds sold and reverse RPsInterest-bearing balances at depositories .

Rates paidInterest-bearing liabilities

Interest-bearing depositsIn foreign officesIn domestic offices

Other checkable depositsSavings (including MMDAs)Large-denomination CDsOther time deposits

Gross federal funds purchased and RPs .


LoansSecuritiesGross federal funds sold and reverse RPsOther

Gross interest expenseDepositsGross federal funds purchased and RPsOther

Net interest income

Taxable equivalent

Loss provisioning5

Noninterest incomeService charges on depositsIncome from fiduciary activitiesTrading incomeOther ,

Noninterest expenseSalaries, wages, and employee benefitsExpenses of premises and fixed assetsOther


Realized gains on investment account securities ,

Income before taxes and extraordinary itemsTaxesExtraordinary items

Net income (return on assets)Cash dividends declaredRetained income

MEMO: Return on equity

9.439.67

10.238.088,108.957.958.197.27n.a.

10.016.577.55

6.765.807.905.384.555.296.886.996.52

8.398.596.181.35.31.54

4.973.96

.55

.46

3.423.63

1.30

1.4330.24.12.77

3.351.55.53

1.27

1.91

.05

.26

.39

.01

.08

.36-.29

1.29

10.0610.2610.869.808.389.078.078.257.39n.a.

12.637.528.71

11.1311.2912.0310.448.739.258.568.807.457.74

11.119.17

10.59

7.28 8.536.23 7.188.91 10.875.75 6.574.77 4.835.55 6.187.47 8.67734 8.297.43 9.20

10.6610.7911.489.938.799.208.668.927.377.34

10.158.069.96

8.046.90

10.716304.785.988.037.967.96

9.559.66

10378.698.168.548.238.407.256.197.535.678.44

6.525.738.545344335.096.676.895.72

8.298399.217.887.067377.147.216.835326.403.597.32

4.764.047323.592.713.264.915.173.65

7.627.728.697.876.086376.076.086.264.796.163.046.61

4.023.226.822.721.992.504.004.203.07

7.627.718.638.135.976.215.805.815.884.797.414.265.70

4.023.125.592.711.862.584.104.184.19

8348.419.278.766.526.746.366.435.825,517.735.636.84

4.994.006.123.602.073.195.475.455.65

Income and expense as a percentage of average net consolidated assets

9.009.186.6613835.61

5.464.28.62.56

3.543.72

.65

1.5031.25.12.82

3381.55.53131

1.88

.011.0233.03.71.44.28

11.61

9.9510.087.461.47.41.61

6.444.94.78.71

3.513.65

.98

1.6232.26.13.91

3.421,55.52135

1.80.03

.7630.01.47.44.02

7.33

9.599.707.151.5338.54

6.144.83.68.62

3.463.57.971.67.34.27.15.91

3.491.56.531.41

1.82

.01

.68

.23

.02

.47

.42

.05

7.29

8.588.676341.56.27.41

4.974.11.42.43

3.613.71

1.03

1.79.38.28.18.96

3.731.59.531.61

1.94

.09

.73

.25

.03

.51

.45

.07

7.71

7.477.555.411.51.1737

3.572.88.27.42

3.903.99

.78

1.95.4130.181.053.871.62.531.72

1.92

.11132.42.01

.91

.41

.50

12.66

6.876.955.011.37.1336

2.962.23.24.50

3.903.99

.47

2.13.4231.261.143.941.64.521.78

1.82

.09

1.70.56.06

1.20.62.59

1534

6.666.734.921.25.1733

2.872.05.32.50

3.793.86

.28

2.00.4031.161.13

3.761.58.491.68

1.75

-.011.74.58

1.15.73.42

14.64

7307365.481.23.2435

3.572.54.44.58

3.733.79

30

2.023931.151.17

3.651.54.481.62

1.62

.01

1.81.63

1.18.75.43

14.71

8.208.279.108.476.456.696386.505.575.256.875.226.22

4.844.025.553.712.053.015.425.435.16

7.217.265.511.16.2132

3.452.4739.60

3.763.81

38

2.193932.171.30

3.731.55.481.70

1.54

.031.86.65

1.21.91.29

14.60

* In absolute value, less than 0.005 percent.n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit.1. Includes allocated transfer risk reserve.2. As in the Call Report, equity securities are combined with "other debt securities" before 1989.3. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a loss4. Where possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Report.5. Includes provisioning for allocated transfer risk.



A.2B. Ten largest banks by assets

Item 1987 1988 I 1989 I 1990 1 1991 j 1992 1993 1994 1995 I 1996




Real estateIn domestic offices


Home equityOther

Multifamily residentialNonfarm nonresidential

In foreign officesDepository institutionsForeign governmentsAgricultural productionOther loansLease-financing receivablesLESS: Unearned income on loansLESS: LOSS reserves1





Equity2


Non-interest-earning assetsRevaluation gains on off-balance-sheet items3 ..Other



Other checkable depositsSavings (including MMDAs)Small-denomination time depositsLarge-denomination time deposits



Other

Capital account

MEMOCommercial real estate loansOther real estate ownedManaged liabilitiesAverage net consolidated assets


4.42


85.1459.3624.5313.3111.226.412.344.07

13.9711.693.21

.065.17n.a.n.a.

.612.632.285.183.64

.366.511.38-.41

-2.2212.598.198.191.47

1.541.47n.a.

.071.933.25n.a.4.403.919.28

14.86n.a.

14.86

95.5873.0857.4632.6024.86

2.4511.044.556.826.898.74

22.5012.64n.a.9.86

85.2258.6923.3613.0110.366.192.084.10

15.4612.803.48

.065.83

.765.07

.652.782.665.213.63

.336.231.44-.43

-2.7412.968.678.671.41

1.941.84n.a.

.101.803.52n.a.4.294.618.97

14.78n.a.

14.78

95.4173.7657.6731.4926.18

2.6811.425.037.056.409.69

21.6511.93n.a.9.71

85.1659.6622.6113.189.436.211.994.22

18.0215.053.60

.087-451.046.41

.683.232.974.563.34

.316.361.49-.45

-2.7713.139.058.831.29

2.292.07n.a.

.221.583.68

.224.084.128.26

14.84n.a.

14.84

95.1174.1757.5630.0827.49

2.7011.325.647.826.729.89

20.9411.60n.a.934

84.8561.6922.9113.399.536.872.204.67

20.5617.363.79

.089.311.318.00

.683.513.203.642.76

.316.051.60-.39

-2.6314.039,228.981.09

2.912.24

.55

.131.083.90

.244.812.886.25

15.15n.a.

15.15

95.2973.9757.9529.6628.28

2.7412.056.167.336.909.13

21.3210.93n.a.

10.39

85.4162.1422.4213.448.977.202.534.67

21.6818.373.42

.0810.34

1.638.71

.573.953.323.052.88

.315.611.68-.35

-2.3415.589.389.081.35

3.462.261.12.08.77

3.50.30

6.192.964.74

14.59n.a.

14.59

94.9774.6257.6728.4729.19

3.0013.506.556.146.80

10.1520.3510.36n.a.9.99

85.1658.3420.3212.008.327.312.614.70

19.9317.072.48

.0710.08

1.638.46

.583.862.852.562.75

.286.051.51-.27

-2.0819.1310.7010.362.30

4.452.431.97.05.66

2.95.33

8.433.234.45

14.84n.a.

14.84

94.4473.0855.7327.1628.56

3.3814.915.724.566.19

11.1621.3611.05n.a.

10.30

84.7955.5718.6510.757.907.332.504.83

18.5415.99

1.59.07

10.291.608.68

.533.512.552.352.46

.276.821.30-.21

-1.9422.7412.4512.082.39

6.143.302.76

.08

.592.97

.3610.302.713.76

15.21n.a.

15.21

93.2471.5652.9125.5127.41

3.4515.335.093.536.70

11.9421.6811.27n.a.

10.41

76.9749.9116.439.167,276.592.284.31

16.2113.80

.84

.069.691.408.29

.412.792,413.371.27.25

6.441.14-.16

-1.6320.4311.6811.302.17

5.162.792.31

.06

.603.37

.388.742.683.95

23.039.89

13.14

93.4264.3348.2026.1022.10

2.9112.703.982.515.83

10.2929.0910.158.75

10.20

77.0250.0516.168.667.506.601.964.65

15.8213.48

.58

.069.621.408.22

.382.832.354.95

.90

.215.851.14-.14

-1.4519.5310.6510.272.03

4.462.891.50.08.49

3.29.38

8.883.204.25

22.9810.7712.21

93.5963.3747.4928.3619.122.30

10.564.042.236.179.71

30.228.88

10.6810.66

79.9453.5117.179.597.596.221.234.99

16.5314.44

.51

.0610.43

1.538.90

.383.052.096.06

.69

.236.421.59-.11

-1.3119.8310.6010.221.93

4.593.58

.95

.06

.393.31

.389.233.103.50

20.067.63

12.43

93.0464.4547.8726.4121.46

1.6112.314.682.865.88

10.6928.59

9.737.27

11.59

4.59 4.89 4.71 5.03 5.56 6.76 6.58 6.41 6.96

n.a..21

56.79

691

n.a..22

56.34

685

n.a..23

56.24

693

n.a..42

54.74

725

8.48.78

53.18

717

7.431.13

50.76

775

5.921.02

49.17

818

4.24.58

46.16

949

4.02.27

47.89

1,051

4.28.18

47.33

1,189



A. 2.---ContinuedB. Ten largest banks by assets

Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996





Taxable equivalentInvestment account


Trading accountGross federal funds sold and reverse RPsInterest-bearing balances at depositories .





9.569.59

10.136.639.499.658.709.077.52n.a.

10.966.137.68

7.836.628.005.023.265.137.296.386.52

Gross interest incomeTaxable equivalent .

Loans ,SecuritiesGross federal funds sold and reverse RPsOther


Net interest incomeTaxable equivalent

Loss provisioning5

Noninterest incomeService charges on deposits —Income from fiduciary activitiesTrading incomeOther

Noninterest expenseSalaries, wages, and employee benefits .Expenses of premises and fixed assets ,Other


Realized gains on investment account securities .

Income before taxes and extraordinary items —TaxesExtraordinary items



8.458.476.23

.71

.291.22

5.774.18

.521.07

2.682.71

2.15

1.94.16.23.40

L16

3.201.60.58

1.03

1.26

.07

-.66.14

-.80.28

-1.08

10.7610.8811.3510.7010.5411.068.708.957.74n.a.

14.337.319.13

8.757.439.005.714.435.557.757.117.43

12.3112.3113.1910.8710.1110.089.209.567.696.81

12.138.98

10.88

10.748.79

10.966.644.406.498.878.269.27

11.6511.7012.2911.109.85

10.009.349.687.545.82

10.758.01

11.06

10.188.64

11.116.224.356.217.967.767.75

9.929.95

10.468.588.528.638.999.297.674.227.845.60

10.05

7.716.758.764.983.935.096.506.095.98

8.678.729.367.507.387.547.968.137.404.046.693.659.29

6.175.057.552.921.962.954.663.814.04

8.168.209.077.956.696.776.906.996.993.726.453.028.34

5.604.236.872.11L282.143.553.013.26

8.158.188.898.387.107.196.586.706.373.277.794.527.27

5.444.076.042.081.112.353.142.814.05

8.208.228.848.627.417.477.067.226.234.037.835.207.15

5.884.766.073.061.293.113.735.085.22


9.529.636.93

.75

.401.44

6.514.56

.581.37

3.033.12

.40

2.07.19.23.41

1.24

3.291.63.60

1.05

1.21

.03

1.43.44.08

1.07.38.69

-18.11 23.30

10.8210.838.23

.83

.371.39

8.015.37

.721.92

2.822.82

1.45

2.19.22.27.42

1.29

3.431.66.62

1.15

1.24

.03

.16

.38

.03

- 1 9.37

-.57

-3.92

10.3710.437.96

.86

.251.30

7.655.41

.641.60

2.722.77

.77

2.27.23.31.52

1.21

3.551.74.65

1.16

1.28

.02

.69

.27

.06

.48

.26

.21

10.13

8.778.806.77

.84

.17

.98

5.814.23

.431.15

2.962.99

1.21

2.40.26.33.64

1.16

3.831.79.66

1.38

1.44

.04

.34

.17

.03

.21

.21

4.23

7.687.725.65

.85

.141.05

4.543.09

.281.17

3.153.18

1.12

2.59.30.37.66

1.27

3.861.78.65

1.43

1.27

.11

.87

.26

.61

.18

.43

10.91

7.227.255.22

.86

.111.04

4.062.48

.241.35

3.163.19

.64

2.99.30.39.91

1.38

4.131.88.66

1.59

1.14

.131.50.53.16

1.13.28.85

16.75

6.386.404.49

.77

.15

.97

3.522.15

.241.13

2.862.88

.26

2.33.26.37.53

1.18

3.561.65.55

1.36

1.23

.02

1.39.48

.91

.58

.33

13.86

6.426.434.44

.75

.211.00

3.742.43

.35

.95

2.682.70

.11

2.16.25.30.46

1.15

3.321.58.50

1.24

1.16

.031.44.55

.57

.31

13.78

7.777.798.388.176.826.876.756.905.733.846.914.996.71

5.464.465.623.161.392.804.654.674.96

6.296.314.52

.72

.19

.88

3.532.27

.31

.95

2.762.78

.11

2.35.28.31.52

1.23

3.601.58.50

1.52

1.24

.051.45.53*

.93

.73

.19

13.34

* In absolute value, less than 0.005 percent.n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit.1. Includes allocated transfer risk reserve.2. As in the Call Report, equity securities are combined with "other debt securities'" before 1989.3. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a lo;4. Where possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Report.5. Includes provisioning for allocated transfer risk.



A.2. Portfolir. composiiir-n, MUe;es! rales, and av

C. Banks ranked 11th through 100th bv assets

1987-06

Item 1987 1988 1989 1990 1991I 1992 1993 1994 I 1995 1996


interest-earning assetsLoans and leases, net





Home equityOther


In foreign officesDepository institutionsForeign governmentsAgricultural productionOther loansLease-financing receivablesLESS: Unearned income on loansLESS: LOSS reserves1

; SecuritiesInvestment account




Equity2


Non-interest-earning assetsRevaluation gains on off-balance-sheet items3 . . .Other






Other

Capital account

MEMOCommercial real estate loans . . .Other real estate ownedManaged liabilitiesAverage net consolidated assets


86.2061.7023.7221.22

2.5011.734.407.33

16.0515.835.24

.105.88n,a.n.a.

.394.22

.222.511.53.30

6.251.52-.40

-1.5115.2614.4514.455.06

3.132.36n.a.

.774.072.18n.a.

.813.076.16

13.80n.a.

13.80

94.5673.0152.6110.1442.48

4.4216.029.63

12.4014.525.87

21.5516.62n.a.4.93

5.44

n.a..22

43.29

802

87.2361.9923.4521.43

2.0212.204.857.35

17.9417.655.27

.116.851.175.68

.434.99

.291.841.22.29

5.541.69-.37

-1.8015,5414.7314.734.89

3.582.96n.a.

.613.322.94n.a.

.823.686.01

12.77n.a.

12.77

94.7775.3455.02

9.6845.34

4.6815.6711.0513.9513.726.59

19.4415.04n.a.4.40

5.23

n.a..31

44.27

870

86.9162.6122.7521.23

1.5312.975.827.16

19.0918.855.25

.127.541.416.13

.455.49.24

1.55.88.29

5.171.73-.34

-1.4815.2114.3814.164.10

5.014.03n.a.

.982.702.35

.22

.833.715.38

13.09n.a.

13.09

94.4576.2356.45

8.6347.82

4.6714.5813.4915.0813.226.57

18.2213.86n.a.4.36

5.55

n.a..30

43.81

940

86.8161.2221.7620.44

1.3312.255,486.76

20.2120.044.91

.128.531.676.86

.466.01

.181.57.52.28

4.821.67-.26

-1.6016.1915.3215.143.42

7.425.321.58.53

2.032.27

.18

.884.414.98

13.19n.a.

13.19

94.3577.0257.467.84

49.624.75

15.5015.5913.7813.036.53

17.3313.23n.a.4.10

5.65

n.a..46

41.50

995

86.8860.0820.5319.30

1.2411.665.046.62

21.5121.374.00

,1210.172.078.10

.546.53

.141.58.39.31

4.551.53-.22

-1.7617.3816.2516.023.78

8.435.382.48

.571.632.19

.221.134.904.51

13.12n.a.

13.12

93.9376.0759.246.69

52.545.36

17.6217.9911.5610.945.89

17.8713.76n.a.4.10

6.07

11.28.76

35.42

87.9758.3018.8317.78

1.0511.725.166.56

21.8921.78

3.02.14

11.362.508.85

.666.61.11

1.43.33.31

4.281.49-.17

-1.7920.3819.2418.995.88

9.265.223.54

.501.462.39

.251.144.784.52

12.03n.a.

12.03

93.1374.6656.996.20

50.796.26

20.2115.988.34

11.456.22

18.4714.52n.a.3.95

6.87

10.43.70

32.53

88.3657.3318.0317.05

.9811.475.236.24

22.1122.01

2.08.13

12.302.549.76

.716.79

.101.30.30.29

4.051.47-.11

-1.6021.9720.6020.347.05

9.555.213.71

.631.312.43

.261.374.984.08

11.64n.a.

11.64

92.5673.3854.22

6.7847.43

7.2120.6014.195.44

11.937.23

19.1815.38n.a.3.80

7.44

9.58.47

31.69

88.1658.5618.0316.991.04

12.625.996.63

22.2622.17

1.63.14

12.982.33

10.65.71

6.72.09

1.49.28.29

3.471.60-.07

-1.4121.1919.8219.506.85

9.285.303.07

.911.212.15

.321.375.113.30

11.84.57

11.28

92.4772.8653.03

8.0544.98

6.9120.1313.264.68

11.488.34

19.6215.27

.533.82

7.53

8.98.25

32.83

88.3162.6819.2618.10

1.1614.237.346.89

23.2523.10

1.50.13

14.162.19

11.97.77

6.54.15

1.59.20.26

3.321.96-.07

-1.3218.6417.8817.514.82

9.405.062.821.511.112.17

.37

.764.522.47

11.69.50

11.19

92.2374.0552.32

8.1244.20

5.6318.7814.245.55

11.3710.3618.1814.26

.493.43

7.77

8.65.13

35.64

87.7564.2418.9517.71

1.2415.668.267.40

23.2723.10

1.55.13

14.162.08

12.08.89

6.37.16

1.50.20.28

3.302.41-.06

-1.2716.8716.0615.623.34

9.125.422.161.54.99

2.17.44.80

4.262.38

12.25.51

11.74

92.0273.1451.82

7.5244.30

3.0920.7314.096.39

10.0011.3218.8914.47

.493.93

7.98

8.49.08

35.56

1,006 1,003 1,082 1,204 1,338 1,450



A.2,—ContinuedC. Banks ranked 1 lth through 100th by assets

Item






Trading account .:Gross federal funds sold and reverse RPsInterest-bearing balances at depositories




Gross federal funds purchased and RPs




Net interest incomeTaxable equivalent

Loss provisioning5

Noninterest incomeService charges on depositsIncome from fiduciary activitiesTrading incomeOther







1987 1988 1989 1990 1991 1992 1993 1994 1995 1996


9.19 9.87 11,10 10.41 9.22 8.01 7.37 7.29 8.31 8.269.40 10.07 11.27 10.50 9.32 8.11 7.46 7.37 8.37 8.339.78 10.48 11.74 11.04 9.87 8.77 8.26 8.22 9.11 9.047.33 9.19 9.87 9.03 7.89 7.47 7.47 7.68 8.50 8.167.87 8.21 8.76 8.81 8.16 7.08 6.06 5.70 6.38 6.498.67 8.92 9.36 9.12 8.49 7.38 6.34 5.92 6.57 6.737.93 8.24 8.77 8.87 8.28 7.21 6.16 5.70 6.34 6.488.25 8.51 9.06 9.13 8.42 7.25 6.16 5.69 6.38 6.577.09 7.29 7.41 7.22 7.23 6.81 6.32 6.04 6.06 5.90n.a. n.a. 9.19 8.09 7.32 6.75 5.23 5.00 5.68 4.S66.99 7.68 8.66 8.01 6.46 4.73 4.74 5.75 7.27 6.616.59 7.61 9.35 8.11 5.76 3.71 3.11 4.31 5.91 5.317.68 8.87 11.35 9.72 8.15 6.77 6.50 4.69 6.78 5.86

6.75 7.34 8.66 7.93 6.34 4.45 3.76 3.72 4.94 4.755.91 6.44 7.51 6.95 5.69 3.90 3.11 2.88 3.93 3.957.78 8.92 11.08 10.08 8.38 7.26 7.37 4.60 6.30 5.345.51 5.97 6.93 6.50 5.39 3.56 2.61 2.64 3.57 3.734.44 4.53 4.57 4.64 4.16 2.45 1.70 1.62 1.89 1.815.27 5.63 6.42 6.03 4.98 3.08 2.33 2.46 3.11 2.937.02 7.65 8.75 8.09 6.72 5.13 4.31 4.21 5.70 5.547.07 7.56 8.72 8.02 6.81 5.11 4.07 4.18 5.35 5.306.63 7.50 9.35 8.11 5.68 3.57 3.04 4.28 5.86 5.27


8.05 8.72 9.77 9.26 8.17 7.15 6.59 6.46 7.40 7.338.23 8.90 9.91 9.34 8.24 7.22 6.65 6.51 7.46 7,376.19 6.69 7.51 6.97 6.09 5.24 4.85 4.91 5.79 5.881.14 1.21 1.26 1.36 1.35 1.39 1.27 1.13 1.13 1.04.20 .25 .36 .37 .28 .19 .15 .21 .27 ,23.51 .57 .65 .56 .45 .34 .32 .21 .21 .18

4.85 5.45 6.50 6.06 4.75 3.28 2.74 2.67 3.62 3.433.41 3.86 4.59 4.34 3.70 2.49 1.94 1.73 2.29 2.20

.96 1,03 1.24 1.12 .67 .43 .38 .51 .67 .55

.48 .56 .66 .60 .38 .35 .43 .43 .66 .68

3.19 3.27 3.28 3.21 3.42 3.87 3.85 3.79 3.79 3.903.38 3.45 3.41 3.29 3.49 3.94 3,91 3.85 3.84 3.94

1.55 .82 1.20 1.27 1.23 .78 .47 .32 .39 .56

1.53 1.62 1.86 1.84 2.01 2.25 2.29 2.25 2.38 2,63,29 .30 .31 .34 .40 .45 .46 .45 .44 .44.36 .35 .35 .33 .35 .38 .38 .39 .40 .43.07 .07 .08 .08 .10 .09 .14 .08 .09 .08.81 .89 1.12 1.08 1.16 1.33 1.32 1.33 1.45 1.69

3.23 3.29 3.34 3.43 3.72 3.99 3.95 3.86 3.79 3.891.48 1.48 1.47 1.46 1.51 1.54 1.52 1.50 1.47 1.52.49 .50 .50 .49 .50 ,50 .48 .47 .47 .48

1.26 1.31 1.37 1.48 1.72 1.96 1.95 1.89 1.85 1.89

1.70 1.67 1.47 1.59 1.71 1.74 1.66 1.61 1.41 1.26

.05 * .04 .03 .01 ,01 .14 .15 .09 -.01

* .77 .65 .37 .62 1.51 1.82 1.85 2.01 2.U.09 .28 .18 .15 .19 .49 .56 .63 .70 .76* .02 * .01 .03 .03 * * * *

-.09 .51 .47 .23 .47 1.05 1.26 1.22 1.31 L35.34 .41 .40 .37 .47 .46 ,76 .86 .85 L10

-.43 .09 .06 -.14 * .58 .49 ' .36 .46 2$

-1.70 9.72 8.41 4.07 7.71 15.21 16.91 16.27 16.85 16.93




D. Banks ranked 101st through 1,000th by assets

Item 1987 1988 1989 1990 1991 1992 1993 1994 I 1995 T 1996







Home equityOther 1


In foreign officesDepository institutionsForeign governmentsAgricultural productionOther loansLease-financing receivablesLESS: Unearned income on loansLESS: LOSS reserves1 , . . .



corporation obligationsGovernment-backed mortgage pools . . .Collateralized mortgage obligationsOther


Equity2


Non-interest-earning assetsRevaluation gains on off-balance-sheet items3 . . .Other

88.3461.6018.1217.87

.2415.344.65

10.6922,2522.254.57

.269.48n.a.n.a.

.687.26

.011.13.25.48

4.94.72

- 6 1-1.0118.7218.5018.507,14

4.061.89n.a.2.175.032.26n.a.

.224.943.08

11.66n.a.

11.66





Non-interest-bearing liabilitiesDemand deposits in domestic officesRevaluation losses on off-balance-sheet items3 .Other

Capital account



6.72

n.a..37

26.00

771

63.0317.8317.67

.1615.915.21

10.7024.2824.274.73

.2710.64

1.738.91

.677.97

.011.01.20.47

4,23.78

- .60-1.0718.5218.2518.256.52

4.812.33n.a.2.484.102.82n.a,

.284.452.87

11.12n.a.

11.12

6.66

n.a..42

27.51

839

88.9863.6217.6817.53

.1515.494.83

10.6625.9725.954.82

.2711.562.089.48

.708.61

.01

.92

.16

.453.77

.82-.56

-1.0718.7518.3818.025.91

6.073.03n.a,3.043.502.55

.35

.384.112.49

11.02n.a.

11.02

88.8463.0916.6916.56

.1315.485.22

10.2627.0126.99

4.37.28

12.492.31

10.18.73

9.11.03

1.05.09.47

3.16.83

-.50-1.2019.3418.8718.545.44

7.753.831.742.173.112.25

.32

.484.511.90

11.16n.a.

11.16

88.9161.0315.0514.89

.1615.105.719.40

27.5327.49

3.67.28

13.232.53

10.70.80

9.50.05.93.07.49

2.81.85

-.40-1.4221.2820.9220.55

6.16

9.354.512.742.112.652.38

.37

.374.711.90

11.09n.a.

11.09

89.0258.5113.3313.15

.1814.225.428.80

28.1028.062.86

.3214.252,56

11.69.95

9.68.04.80.05.54

2.47.78

-.30-1.4924.1223/7723.31

7.75

11.074.743.952.382.272.22

.46

.354.921.47

10.98n.a.

10.98

89.5557.9412.1912.03

.1614.845.659.19

28.6028.58

2.26.34

15.172.50

12.661.079.74

.02

.43

.03

.562.16

.77-.21

-1.4425.9225.6325.15

8.63

12.324.974.822,532.261.94.47.29

4.481.20

10.45n.a.

10.45

90.0959.7412.0711.90

.1615.856.069.79

29.4229.40

2.08.36

16.252.33

13.921.139.57

.03

.39

.02

.622,00

.82-.15

-1.3025.7125.3924.95

8.26

12.675.574.392.712.291.74.44.32

3.64LOO9.91

.029.90

6.72

n.a..43

27.62

892

6.93

n.a..52

25.93

937

7.11

13.84.77

23.40

961

7.53

12.95.80

19.97

968

8.15

12.30.57

19.65

977

8.38

11.92.28

22.86

1,032

90.1362.2312.6812.52

.1616.396.459.94

30.7730.75

2.21.40

17.472.36

15.111.219.47

.02

.35

.02

.691.80.90

-.12-1.2323.0622.8622.396.47

12.215.423.553.252.131.58.47.20

3.91.93

9.87.05

9.83

8.64

11.97,17

24.69

90.1462.6912.7612.58

.1816.096.909.19

31.2731.24

2.38.46

17.282.30

14.981.289.84

.02

.48

.02

.701.691.00-.10

-1.2322.6422.5121.99

5.59

12.625.673.113.842.231.55.52.13

3.86.96

9.86.02

9.83

93.2873.9262.43

1.9660.47

7.2722.8317.7512.628.463.03

19.3617.35n.a.2.00

93.3475.5963.00

2.0460.97

7.3921.2719.3412.968.633.96

17.7415.84n.a.1.90

93.2876.4263.74

2.0961.65

7.1419.5222.0812.919.213.47

16.8514.86n.a.1.99

93.0777.0465.05

1.6563.40

7.3119.6924.0912.318.433.56

16.0314.07n.a.1.96

92.8977.2566.33

1.7664.58

7.8320.7925.2310.737.463.45

15.6413.57n.a.2.07

92.4775,9865.62

1.5664.06

9.1423.3323.55

8.067.173.19

16.4914.39n.a.2.10

91.8574.4263.04

1.4361.61

9.9424.0520.776.847.433.94

17.4315.07n.a.2.36

91.6274.7760.38

1.6958.699.70

22.9219.296.788.455.94

16.8514.58

.022.25

91.3675.0259.59

1.7157.88

8.5320.7221.08

7.548.307.14

16.3414.05

.052.24

91.0675.0959.82

1.3358.49

6.2022.4321.55

8.318.177.10

15.9713.81

.022.14

8.94

12.51.13

24.92

1,094 1,078



D. Banks ranked 101st through 1,000th by assets

Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996











Gross federal funds purchased and RPs ,




Net interest income

Taxable equivalent

Loss provisioning5








9.479.82

10.339.057.688.767.717.967.03n.a.5.806.647.04

6.315.466.775.434.655.296.837.166.35

8.408.726.451.4331.22

4.593.82

.53

.23

3.814.13

.80

1.36.34.25.03.73

3.541.54.52

L47

2.18.04

.88

.27

.02

.62

.44

.18

9.25

9.9210.1610.779.627.848.587.858.057.17n.a.6.967.477.82

6.725.827.655.774.775.547.427.467.40

10.7510.9611.6210.458.348.988.368.627.286.907.619.059.21

7.736.638.986.564.886.138.708.329.01

10.4410.6011.249.508.549.028.518.777.346.949.927.988.52

7.286.368.126.324.775.998.058.067.87

9.549.68

10.418.708.108.538.128.297.256.026.865.636.82

6.095.426.385.394.285.136.627.075.61

8.178.299.157.876.917.226.936.976.875.065.623.494.61

4.213.674.253.662.683.354.775.373.47

7.447.568.587.775.796.115.805.776.304.954.823.023.50

3.332.823.352.812.022.583.894.412.95

7.617.708.678.135.715.965.725.705.945.345.294.074.25

3.582.864.312.831.872.654.244.424.13

8.458.549.498.806.256.516.256.305.836.065.555.456.09

4.653.735.933.672.033.245.625.545.61


8.889.106.891.43.32.24

5.034.10

.64

.29

3.854.07

.74

1.36.35.25.03.74

3.501.49.50

1.51

2.14

.98

.32

.01

.67

.48

.18

10.01

9.689.867.521.54.38.25

5.844.70

.83

.31

3,844.02

.75

1.38.36.25.04.74

3.451.48.49

1.49

2.07

.011.02.32*

.71

.48

.23

10.54

9.409.537.231.61.36.20

5.554.59

.67

.29

3.843.98

1.12

1.50.37.26.02.84

3.511.47.49

1.55

2.01

.01

.72

.22

.51

.53-.02

7.41

8.628.746.501.70.27.15

4.674.02

.42

.23

3.954.07

1.07

1.64.40.27.04.94

3.751.48.49

1.79

2.11

.09

.86

.29

.03

.60

.58

.02

8.45

7.397.495.481.65.17.08

3.172.75

.25

.17

4.214.32

.77

1.70.44.28.02.95

3.891.51.50

1.88

2.19

.10

1.35.44

.92

.48

.43

12.16

6.766.855.081.49.14.06

2.472.07.22.17

4.294.39

.48

1.84.45.29.03

L08

3.931.52.48

1.93

2.09

.06

1.79.61.04

1.22.79.43

14.94

6.937.015.271.45.14.06

2.662.02

.35

.29

4.274.36

.33

1.86.42.28.02

1.14

3.791.49.47

1.83

1.93

-.05

1.97.67*

1.29.81.48

15.45

7.717.796.011.43.21.07

3.472.56

.46

.45

4.254.33

.43

1.84.42.27.03

1.12

3.691.44.45

1.79

1.85

-.011.96.68*

1.28.87.41

14.86

8.448.539.478.656.326.606.326.425.506.335.695.265.55

4.593.875.423.841.973.125.495.605.15

7.717.796.021.42.20.06

3.422.57

.42

.42

4.304.37

.52

1.87.41.28.02

1.16

3.691.44.45

1.80

1.82

.021.98.69

1,291.04.25

14.42




A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks, 1987-96E. Banks not ranked among the 1,000 largest by assets

Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996



Commercial and industrial .U.S. addresseesForeign addressees

ConsumerCredit cardInstallment and other ,


Construction and land developmentFarmland ,One- to four-family residential

Home equity ,Other

Multifamily residential .Nonfarm nonresidential

In foreign officesDepository institutions .Foreign governmentsAgricultural productionOther loansLease-financing receivablesLESS: Unearned income on loansLESS: LOSS reserves1 . .

SecuritiesInvestment account ,


corporation obligationsGovernment-backed mortgage pools ..Collateralized mortgage obligationsOther

State and local governmentOther .,

Equity2 . . .Trading account

Gross federal funds sold and reverse RPsInterest-bearing balances at depositories

Non-interest-earning assetsRevaluation gains on off-balance-sheet items3 ..,Other






Other

Capital account



90.5152.8212.8412.81

.0311.74

.8010.9424.0724.07

2.191.59

12.80n.a.n.a.

.606.90*.30.01

3.301.90.19

-.67-.86

27.6727.5927.5910.64

8.182.66n.a.5.526.632.13n.a.

.086.663.369.49n.a.9.49

91.7476.3974.39

.0474.3510.3323.3029.5611.161.27.73

15.3414.23n.a.1.11

8.26

n.a..63

13.14

659

90.8153.8812.3412.32

.0211.48

.8610.6226.0226.022.221.74

14.06.73

13.32.61

7.40*.31.02

3.251.75.19

-.61-,88

27.9827.9327.93

9.75

9.803.22n.a.6.585.652.72n.a.

.055.763.199.19n.a.9.19

91.6176.9474.84

.0474.8110.6421.9230.9811.271.35.75

14.6713.58n.a.1.09

8.39

n.a..65

13.34

654

90.9054.8412.1012.07

.0311.46

.9310.5327.3627.36

2.291.82

14.81.94

13.86.62

7.82

.26

.013.281.67.19

-.60-.88

27.9227.8527.45

8.84

1L373.76n.a.7.614.942.30

.40

.075.742.409.10n.a.9.10

91.4411 A375.00

.0674.9310.3819.5133.661L381.35.78

14.3113.09n.a.1.22

8.56

n.a..63

13.53

662

91.0654.7411.5311.49

.0411.201.00

10.20283528.35

2.371.86

15.371.16

14.21.66

8.09*.23.01

3301.41.18

-.58-.89

28.3828.2827.92

8.77

12.434.58

.926.944.562.15

.36

.106.131.818.94n.a.8.94

9L4077.8375.79

.0775.7210.4518.7335.3711.171.36.67

13.5712.37* n.a.

1.21

8.60

n.a..61

13.24

681

91.2454.0510.5910.55

.0410.491.089.41

293129312.181.93

15.991.29

14.69.71

8.49*.20.01

3.481.24.17

-.51-.93

29.9829.9229.559.24

13.815.591.556.674.262.23

38.06

5.641.578.76n.a.8.76

91.3878.4076.41

.0876.3410.9819.3535.8510.151.31.68

12.9811.83n.a.1.15

8.62

11.03.66

12.18

695

91.3953.03

9.749.70

.049.681.008.68

30.1530.15

1.982.06

16.44134

15.10.77

8.91*.13.01

3.54.99.17

-.43-.96

32.1032.0431.6010.25

15.045.522.666.854.292.03

.44

.055.101.168.61n.a.8.61

91,0777.8375.75

.0775.6812.3322.1032.858.40136.72

13.24 •12.23n.a.1.01

8.93

11.08.65

10.53

697

91.6552.949.249.20

.049.17

.928.25

31.1031.09

1.932.20

16.821.27

15.55.84

930*.12.02

3.58.87.18

- 3 6-.97

33.0633.0032.5510,48

15.805383.337.094.701.57.45.07

4.68.97

835n.a.8.35

90.6376.8874.54

.0874.4513.1523.5530.107.651.44.91

13.7512.82n.a.

.93

9.37

1138.52

10.06

688

91.7254.649319.27.05

938.96

8.4132.1932.182.14234

16.941.21

15.73.93

9.83*.13.01

3.89.81.20

-.31-.95

32.9032.8632.4210.81

15354.813.117.435.011.25.44.04

3.42.76

8.28

90.4376.1973.14

.0973.05133123.2328.837.681.891.16

14.24

1334

.90

9.57

12.1035

10.81

679

91.7056.609.669.59

.069.541.018.53

33.5533.54

2382.48

17.451.20

16.25.95

10.27*.16

3.95.76.22

- 3 0-.93

30.5130.4730.029.19

15.134.192.768.184.691.01.45.03

3.92.67

8.30*

830

90.0375.7472.70

.1172.59123720.4130.928.891.781.25

14.30

13.23

L07

9.97

12.77.25

12.04

667

91.6457389.979.90

.079.411.03838

34.1134.102.612.55

17.481.19

16.29.92

10.54

.17*

3.92.73.23

-.27-.90

29.5329.5029.017.85

15.674.212.469.004.62

.86

.49

.034.04

.69836*

836

89.8175.5872.47

.10723611.7519.5631.289.771.701.41

14.2313.12

*1.10

10.19

13.26.20

12.99

661



A.2.—ContinuedE. Banks not ranked among the 1,000 largest by assets

Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996






U.S. government and other debt —State and localEquity2

Trading accountGross federal funds sold and reverse RPsInterest-bearing balances at depositories .








Net interest income

Taxable equivalent

Loss provisioning5


Noninterest expenseSalaries, wages, and employee benefits .Expenses of premises and fixed assets .Other






9.549.87

10.879.607.938.937.928.057.53n.a.9.046.827.38

6.205.387.295.384.935.376.576.976.26

9.7610.0111.039.997.938.647.928.017.57n.a.

14.887.688.07

6.415.577.625.574.995.487.137.176.79

10.5010.7211.7610.868.379.018.368.517.578.19

14.849.259.12

7.166.249356.245.095.818368.038.51

10.3210.5211.6010.658.428.998.418.597.468.34

12.138.128.55

7.026.137.576.135.025.747.927.888.03

Income and expense as a

9.649.82

11.0310.098.038.538.038.197.177.138.525.667.36

6.185.395.955.384.615.186.746.985.71

percentage

8.438.599.839.056.997.406.997.066.715.637.123.515.60

4.443.823.973.823.143.624.905.363.74

7.627.789.138.625.926.335.935.916.095.164.832.954.53

3.543.002.913.002.422.913.964.393.17

7.587.739.018.665.615.995.615.605.695.526.034.094.64

3.492.913.922.912.302.834.124.284.12

8.398.549.859.446.106.506.106.195.646.296.095.975.89

4.473.765.733.762.503.325.565.525.61

of average net consolidated assets

8.358.509.789.356.106.526.106.225.446.066.495.346.12

4.493.82

11.303.822.413.245.505.605.08

8.729.025.822.19

.47

.25

4.724.58

.08

.06

4.014.30

.68

.41

.11

.35

3.431.62.52

1.30

2.56

.03

.81

.25

.02

.58

.40

.18

6.99

8.959.176.012.21

.47

.26

4.914.76.10.06

4.044.26

.56

.92

.41

.12*.39

3.441.62.51

132

2.53

.01

.95

.29

.02

.68

.46

.21

8.09

9.659.856.53233

.57

.23

5.50532

.12

.06

4.15434

.50

LOO.41.14.01.44

3.481.65

.51

133

2.49

.01

1.1837.02.83.52.30

9.66

9.519.686.442.38

.53

.17

5.445.28

.11

.05

4.074.24

.53

1.01.42.14.01.44

3.491.64.49

136

2.48

1.06.34.02

.74

.49

.24

8.60

8.929.076.052.40

34.12

4.834.71

.07

.05

4.094.24

.51

1.08.44.14.01.49

3.601.65.49

1.47

2.53

.06

1.1035.01

.77

.4730

8.95

7.797.94530

.2.24.18.07

3.45336

.05

.04

4344.49

.42

1.16.45.16.01.55

3.671.69.49

1.49

2.51

.09

1.50. .47

.021.04.51.53

11.64

7.057.194.911.96.14.05

2,722.63

.04

.04

4334.47

.27

1.25.45.16.01.64

3.731.72.48

1.53

2.48

.071.64.51.05

1.19.56.63

12.66

7.027.164.991.84.15.04

2.652.52

.07

.06

4.364.50

.19

1.30.44.17*.69

3.781.75.49

1.55

2.48

-.031.66.51

1.15.57.58

12.03

7.797.925.641.86.25.04

3383.20

.10

.08

4.414.54

.23

13$.44.22.01.71

3.80L80.50

1.51

2.42

1.76.55*

1.21.62.58

12.12

7.757.885.671.80.24.04

3.393.22

.08

.08

4374.49

.25

1.42.44.19*.78

3.691.77.49

L43

2.27

.011.85,59

L26.64.62

12.38

* In absolute value, less than 0.005 percent.n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit.1. Includes allocated transfer risk reserve.2. As in the Call Report, equity securities are combined with "other debt securities" before 1989.3. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a loss.4. Where possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Report.5. Includes provisioning for allocated transfer risk.


490

Treasury and Federal ReserveForeign Exchange Operations

This quarterly report describes Treasury and Systemforeign exchange operations for the period fromJanuary through March 1997. It was presented byPeter R. Fisher, Executive Vice President, FederalReserve Bank of New York, and Manager for ForeignOperations, System Open Market Account. GraceSone was primarily responsible for preparation of thereport.l

During the first quarter of 1997, the dollar appreci-ated 8.8 percent against the mark and 6.9 percentagainst the yen, at one point reaching thirty-six-

month and fifty-month highs of DM 1.7209 and¥124.82 respectively. On a trade-weighted basisagainst other Group of Ten currencies, the dollarstrengthened 7.5 percent.2 The dollar achieved mostof its gains in January, rising 6.4 percent and 4.9 per-cent against the mark and the yen, respectively, ongrowing market expectations for tighter monetarypolicy in the United States and continued steadymonetary policies in Germany and Japan. U.S. eco-nomic data that were released early in the periodshowed signs of stronger growth, contrary to earlierexpectations of moderating activity. Conversely, Ger-

1. The charts for the report are available on request from Publica-tions Services, Mail Stop 127, Board of Governors of the FederalReserve System, Washington, DC 20551.

2. The dollar's movements on a trade-weighted basis against tenmajor currencies are measured using an index developed by membersof the staff of the Board of Governors of the Federal Reserve System.

1. Foreign exchange holdings of U.S. monetary authorities based on current exchange rates, 1997:Q1Millions of dollars

ItemBalance,

Dec. 31, 1996

Quarterly changes in balances by source

Net purchasesand sales•

Impact ofsales2

Investmentincome

Currencyvaluation

adjustments3

Balance,Mar. 31, 1997

FEDERAL RESERVE

Deutsche marksJapanese yen

Interest receivables4

Other cash flow from investments5 ,

Total

VS. TREASURY

EXCHANGE STABILIZATION FUND

Deutsche marksJapanese yenMexican pesos6

Interest receivables4

Other cash flow from investments5 .

Total

13,030.16,152,7

81-7-1.0

19,263.5

6,594.69,023.63,500.0

49.6-6.2

19,161.7

.0

.093.34.8

-1,009.6-396.0

.0

.0-3,511.9

47.67.1

11.9

-510.9-585.3

.07

12,113.85,761.5

76.4-1.6

17,9504

6,131.38,445.4

.0

40.0-3.8

14,612.9

NOTE. Figures may not sum to totals because of rounding.1. Purchases and sales include foreign currency sales and purchases related to

official activity, swap drawings and repayments, and warehousing.2. Calculated using marked-to-market exchange rates; represents the differ-

ence between the sale exchange rate and the most recent revaluation exchangerate. Realized profits and losses on sales of foreign currencies computed as thedifference between the historic cost-of-acquisition exchange rate and the saleexchange rate are shown in table 2.

3. Foreign currency balances are marked to market monthly at month-endexchange rates.

4. Interest receivables for the ESF are revalued at month-end exchange rates.Interest receivables for the Federal Reserve System are carried at average costof acquisition and are not marked to market until interest is paid.

5. Cash flow differences from payment and collection of funds betweenquarters.

6. See table 4 for a breakdown of Mexican swap activities. Note that theinvestment income on Mexican swaps is sold back to the Bank of Mexico.

7. Valuation adjustments on peso balances do not affect profit and lossbecause the effect is offset by the unwinding of the forward contract at therepayment date. Although the ESF does not mark to market its peso holdings,Mexico is obligated to maintain in dollar terms the value of ESF peso hold-ings resulting from Mexican drawings under the Medium-Term StabilizationAgreement.


491

man data showed rising unemployment, and marketparticipants remained focused on weakness inJapan's financial sector.

During February and March the dollar's apprecia-tion slowed, with U.S. currency gaining 2.2 percentagainst the mark and 1.9 percent against the yen.Comments by U.S. Treasury Secretary Rubin and thestatement by the Group of Seven (G-7) countries,after their meeting in Berlin were interpreted bymarket participants as a shift to a more neutral stancein exchange markets, given the correction inexchange rates that had occurred since the April 1995G-7 statement.3 Moreover, demand for marks wasencouraged by somewhat stronger-than-expectedGerman economic data releases and heightenedprospects of a delayed start date for the EuropeanMonetary Union (EMU). Meanwhile, the dollar-yenexchange rate was constrained at times by marketexpectations of Japanese capital repatriation beforethe end of Japan's fiscal year on March 31, by con-cerns over the U.S. trade deficit and Japanese tradesurplus, and by market caution about the possibilityof intervention by the Japanese monetary authorities.The U.S. monetary authorities did not undertake anyintervention operations in the foreign exchange mar-ket during the quarter. The U.S. Treasury's ExchangeStabilization Fund (ESF) received final repay-ment from Mexico of the remaining $3.5 billionbalance outstanding under the medium-term swaparrangement.

in the quarter as the dollar lost its upward momentumand, on net, implied volatility ended the periodlittle changed. The probability distribution of futureexchange rates implied by currency options priceswas little changed over the quarter for dollar-markbut was slightly wider for dollar-yen.

In January, the dollar's upward movement reflectedmarket perceptions of stronger U.S. economic funda-mentals relative to Germany and Japan. This dispar-ity in growth expectations was reflected in dollar-favorable yield differentials on ten-year bonds, whichwidened to levels not seen since 1989. Upward revi-sions to fourth-quarter GDP in the United States,coupled with continued reports of tightening labormarkets and strong retail sales, prompted marketanalysts to revise up growth forecasts for the firstquarter and bring forward expectations for higherU.S. interest rates.

Chairman Greenspan's Humphrey-Hawkins testi-mony on February 26, in which he spoke of possiblepreemptive tightening by the Federal Reserve, height-ened anticipation for a near-term interest rate hike.Implied yields on three-month forward rate agree-

Although the dollar made significant gains during thefirst quarter, market volatility remained relativelymuted, with the average daily trading range for thedollar widening only slightly. On average, the dollartraded in a daily range of 0.9 percent against both themark and the yen, compared with daily ranges of0.7 percent experienced in both the previous quarterand the first quarter of 1996. Implied volatility onone-month options in dollar-mark and dollar-yenincreased early in the period as the dollar movedhigher. However, implied volatility tapered off later

3. On February 7, Secretary Rubin stated, "As we have said manytimes, a strong dollar is in the United States' interest. We have had astrong dollar for some time now." Following the G-7 meeting onFebruary 8, the G-7 press guidance stated, "We believe that majormisalignments in exchange markets noted in our April 1995 commu-nique have been corrected. We reaffirmed our views that exchangerates should reflect economic fundamentals and that excess volatilityis undesirable."

Millions of dollars

Period and item

Valuation profits and losses onoutstanding assets and liabilities,Dec. 31, 1996Deutsche marksJapanese yen

Total

Realized profits and lossesfrom foreign currency sales,Dec. 31, 1996-Mar. 31, 1997Deutsche marksJapanese yen

Total

Valuation profits and losses onoutstanding assets and liabilities,Man 31, 1997'Deutsche marksJapanese yen

Total

FederalReserve

1,965.9984.5

2,950.4

X).0

956.3589.6

1,545.9

U.S. TreasuryExchange

StabilizationFund

586.11,450.8

2,036.9

.0

.0

75.2871.7

946.9

NOTE. Figures may not sum to totals because of rounding.1. Valuation profits or losses are not affected by peso holdings, which ;

canceled by forward contracts.



ments rose 15 basis points immediately after Chair-man Greenspan's testimony. On March 25, the Fed-eral Open Market Committee (FOMC) announced a25-basis-point hike in the federal funds target interestrate, to 5.50 percent. In contrast to the U.S. perfor-mance, fourth-quarter GDP growth for Germany wassofter than expected, and the level of unemploymentreached a postwar high of 4.7 million in February.These data releases underpinned market expectationsthat German monetary policy would remain steadyand even elicited some discussion of a possible inter-est rate cut. Also, comments made by various Euro-pean officials were interpreted by market participantsas implying that currency depreciation would contrib-ute to Europe's economic recovery. Meanwhile, mar-ket participants grew cautious about financial sectorrisks in Japan, most notably after Moody's moved theoutlook of four major Japanese banks to negativefrom stable. Japanese equity markets weakened, withthe Nikkei -225 stock index falling 7.0 percent andthe Tokyo Price Index (Topix) ending the quarterdown 6.6 percent. The decline in the Topix was ledby banking and brokerage shares that were down17 percent and 19 percent respectively. Weakness inJapan's financial sector and expectations of fiscalcontraction following the April 1 consumption tax

3. Currency arrangements, March 31, 1997Millions of dollars

Drawings/rollovers and repayments (-) by Mexicanmonetary authorities, 1997:Q1Millions of dollars

Institution

Austrian National Batik . ~,National Bank of Belgium . . » . . . , . . .Bank of Canada ,.a..,."...'.National Bank of Denmark . . . . . . . . .Bank of England : , , , . . •'Bank of France ' . . : „ — .Deutsche Bundesbank . . . . . ; , . „ , . . , .

Bank ot Italy •....-, —Bank of Japan «.,.*.........•....Bank of Mexico «•.' \,.Netherlands BankBank of Norway :. . . , .- . »„.. , ,

r Bank of Sweden , . , . , . . . ,Swiss National Bank . *..

Batik for International SettlementsDollars against Swiss francs . ' . . . . . , ,•Dollars against other authorized

European currencies '. •

Total . . . , . . : ,

Deutsche Bundesbank , * . . . . . . .Bank of Mexico , . . , . . , .United Mexican States *

Total '.

Amount offacility

Outstanding,Mar. 31, 1997

Federal ReserveReciprocal Currency

Arrangements

250 C1,000 I2,000

2503,0002,0006,000

3,0005,0003,000

500250300

4,000

600

1,250 '

32,400 0

)

US. TreasuryExchange Stabilization Fund

Currency Arrangements

1,000 03,000 0

0

. . . ' 0

Currency arrangementswith the US. Treasury

Exchange Stabilization Fund

Bank of MexicoRegular . . . . . . ; . . . . . , . , .Medium-term »

Out-standing,Dec. 31,

1996

Jan. Feb. Man

put-standing,Mar, 31,

: 1997

0 0 0 0 03,500 -3,500 0 0 0

NOTE. Data are on a value-date basis.

hike reinforced market expectations that Japan wouldmaintain an accommodative monetary policy, andJapanese government bonds rallied. The benchmarkten-year bond yield fell to an intraperiod low of2.20 percent.

FIRMING OF THE MARK LATER IN PERIOD

In February, reports of slightly stronger-than-expected economic data in Germany—including sur-veys of business sentiment, M3 money supplygrowth, and wholesale prices—encouraged demandfor marks. Renewed doubt about a timely start forEMU also supported mark buying. Any lingeringexpectations for lower German interest rates dissi-pated, and interest rates implied by three-monthforward rate agreements rose in the second half ofthe quarter. Meanwhile, prices of one-month riskreversals for dollar-mark continued to favor dollarcall options, reflecting a higher cost for insuranceagainst a significant dollar appreciation against themark.4

INFLUENCE OF JAPANESE CAPITALREPATRIATION AND CONCERNS OVER THE US.TRADE IMBALANCE ON DOLLAR-YEN

In mid-February, expectations of Japanese capitalrepatriation ahead of Japan's fiscal year ending onMarch 31 led to purchases of yen against a broadrange of currencies. The dollar moved lower against

4. A risk reversal is an option position consisting of a written putand a purchased call that mature on the same date and are equally outof the money. The price of a risk reversal indicates whether the dollarcall or the dollar put is more valuable. If the dollar call is at apremium, the market is willing to pay more to insure against the riskthat the dollar will rise sharply. If the dollar put is at a premium, themarket is willing to pay more to insure against the risk that the dollarwill fall sharply.


Treasury and Federal Reserve Foreign Exchange Operations 493

the yen, testing ¥120, and prices of one-month dollar-yen risk reversals shifted to favor dollar put options,indicating an increase in the cost for insurance againsta significant dollar depreciation. Subsequently,however, the dollar moved off its lows, and one-month risk reversal prices moved closer to neutral asmarket concerns over Japanese capital repatriationmoderated.

Toward the end of the quarter, the re-emergence ofa potential for U.S.-Japan trade tensions made marketparticipants reluctant to extend long dollar positions.U.S. and Japanese trade data released after mid-March showed a widening of the U.S. trade deficitand a slowing in the rate of decline in the Japanesetrade surplus. In addition, the performance of theJapanese export sector and comments from Japaneseofficials raised some expectations for a strong Tankansurvey to be released in early April.

MEXICAN SWAP ACTIVITY

On January 16, Mexico made a final repayment of$3.5 billion on its drawings on medium-term swaparrangements with the ESF. With this repayment, themedium-term swap arrangement terminated.

TREASURY AND FEDERAL RESERVE FOREIGNEXCHANGE RESERVES

The U.S. monetary authorities did not undertake anyintervention operations this quarter. At the end of thequarter, the current values of the German and Japa-nese yen reserve holdings of the Federal ReserveSystem and the ESF were $17.9 billion and $14.6 bil-lion respectively. The U.S. monetary authoritiesinvest all their foreign currency balances in a varietyof instruments that yield market-related rates ofreturn and have a high degree of liquidity and creditquality. A significant portion of these balances isinvested in German and Japanese government securi-ties held either directly or under repurchase agree-ment. As of March 31, outright holdings of govern-ment securities by U.S. monetary authorities totaled$7.0 billion. Japanese and German government secu-rities held under repurchase agreement are arrangedeither through transactions executed directly in themarket or through agreements with official institu-tions. Government securities held under repurchaseagreements by the U.S. monetary authorities totaled$11.1 billion at the end of the quarter. Foreign cur-rency reserves are also invested in deposits at theBank for International Settlements and in facilities atother official institutions. •


494

Industrial Production and Capacity Utilizationfor April 1997

Released for publication May 15

Industrial production was unchanged in April after adownward-revised increase of 0.6 percent in March.The output of motor vehicles and parts droppednearly 7 percent, with strikes causing more than halfof the drop. Excluding the decline in the productionof motor vehicles and parts, the index of industrialproduction rose 0.3 percent. Relatively cool tempera-

tures led utilities to increase the output of gas andelectricity 2 percent. At 119.0 percent of its 1992average, industrial production in April was 4.1 per-cent higher than it had been in April 1996. Theutilization of industrial capacity fell 0.3 percentagepoint in April, to 83.4 percent.

When analyzed by market group, the data showthat the output of durable consumer goods fell3.5 percent in April mainly because the production of

Industrial production indexesTwelve-month percent change

Materials

Products

J_ I _L _L

~ Total industryCapacity

I I I

Total industry

Utilization

I I I I 1 I I I I 1 1 1 I I

10

1991 1992 1993 1994 1995 1996 1997

Capacity and industrial productionRatio scale, 1992 production = 100

Percent of capacity

90

80

70

1983 1985 1987 1989 1991 1993 1995 1997

Twelve-month percent change

Durable"~ manufacturing

J_ J_ _L J_

Nondurablemanufacturing

I _L1991 1992 1993 1994 1995 1996 1997

80

— Manufacturing

________

1 1 1 1

Ratio scale,

Capacity

_ _ — " — '

^ — ^ - — " ^Production

1 1 1 1 1 1

1992 production =

——

1 1 1 1

100

:

Percent of capacity

ManufacturingUtilization

I I I I I I I I I 1 I I I 11983 1985 1987 1989 1991 1993 1995 1997

All series are seasonally adjusted. Latest series, April. Capacity is an index of potential industrial production.

10

160

140

120

100

- 80

90

80

70


Industrial production and capacity utilization, April 1997

Category

Industrial production, index, 1992=100

1997

Jan.r Feb.r Mar.r Apr.P

Percentage change

19971

Jan.r Feb.' Mar.r Apr.P

Apr. 1996to

Apr. 1997

Total

Previous estimate

Major market groupsProducts, total2

Consumer goodsBusiness equipment .Construction supplies

Materials

Major industry groupsManufacturing

DurableNondurable

MiningUtilities

Total

Previous estimate

117.8

117.8

114.2111.7132.1117.0123.4

119.3129.5108.5103.6112.7

ManufacturingAdvanced processingPrimary processing

MiningUtilities

82.1

81.280.682.387.587.2

118.4

118.5

114.8111.7133.8119.5124.0

120.1130.9108.7105.7109.8

119.0

119.6

115.5112.5134.9120.1124.6

120.8131.9108.9106.6110.8

119.0

115.4111.8135.0120.1124.7

120.5131.5108.8106.1113.0

-.1-.91.1-.7

.1

.5-.3-.9

.1

.5

.6

.5

.01.32.2

.5

.71.1.2

2.1-2.6

.6

.9

71.1

69.070.466.280.375.9

85.3

85.784.2

86.892.6

83.1

82.080.485.690.491.3

83.3

83.4

82.480.786.291.189.3

83.5

83.6

82.780.886.992.9

83.7

84.1

81.087.093.787.5

-.1-.6

.1

.0

.1

- .2- .3

-.52.0

4.1

3.91.87.95.14.4

4.65.63.53.1-.5

Average,1967-96

Low,1982

(

High,1988-89

Capacity utilization, percent

1996

Apr.

1997

Jan.r Feb.r Mar.r Apr.P

MEMOCapacity,

per-centagechange,

Apr. 1996to

Apr. 1997

83.4

82.480.486.893.289.1

3.7

4.15.02.3

.12.0

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

1. Change from preceding month.

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

automotive products dropped 6.4 percent. In addition,the production of other durable consumer goodsdecreased 1.5 percent; declines in the output of appli-ances and carpets followed gains in March. Althoughrecent movements in these latter two series have beenvolatile, their April levels remained well within thepast year's range. The output of consumer nondura-ble goods advanced 0.2 percent, boosted by increasesin the production of consumer fuels and in resi-dential gas and electricity sales. The production ofnon-energy consumer nondurables declined 0.3 per-cent, reversing the gain in March; the output for thisgroup has changed little, on balance, since late lastyear.

Apart from the decline in the production ofbusiness autos and light trucks, which more thanaccounted for the decline in the output of transitequipment, the production of business equipmentcontinued to advance solidly in April. Continuedgrowth in the production of office and computingequipment, telephone apparatus, and commercial air-

craft and parts were factors. In addition, the output oindustrial equipment advanced 0.8 percent after having been flat in February and March. The output odefense and space equipment edged up.

The output of construction supplies held at th<relatively high March level. The output of businessupplies, which had registered a cumulative declin<of 1 percent during February and March, rose 0.7 percent in April, led by a 1 percent increase in commercial energy products. The production of industriamaterials edged up after two consecutive monthl;increases of 0.5 percent. The output of both durabLand nondurable goods materials changed little i]April. The production of energy materials increasei0.6 percent, however, with the rebound in gas transmission and the generation of electricity continuinfor a second month after the dip in February. Amondurable materials, the output of parts used to makmotor vehicles fell, although the production of semiconductors and other computer parts continued tgrow more than 2 percent per month. The output c



nondurable goods materials changed little in Marchand April after a solid rise in February.

When analyzed by industry group, the data showthat manufacturing output declined 0.2 percent afteran increase of 0.5 percent in March; excluding motorvehicles and parts, factory production rose 0.2 per-cent in April. Outside the motor vehicle and partsindustry, the output in most other durable manufac-turing industries rose moderately, while the produc-tion of computers and semiconductors continued togrow rapidly. The output of steel and miscellaneousmanufactures eased, however. The output of nondu-rables edged down; increases in petroleum refining,printing and publishing, and in chemicals and prod-ucts largely offset declines in textiles, apparel, foods,and tobacco products. The production in miningdecreased 0.5 percent, although the output at utilitiesgained 2 percent.

The factory operating rate declined 0.4 percentagepoint in April, to 82.4 percent. The utilization rate formotor vehicles and parts—included in the advanced-processing grouping—fell 5 percentage points, to67.8 percent, and accounted for much of the declinein utilization in manufacturing. Rates remain wellabove the historical averages for primary-processingindustries such as primary metals, petroleum refining,and rubber and plastics products. In mining, the utili-zation rate eased 0.5 percentage point, to 93.2 per-cent. Unseasonally strong oil and gas well drillinghas boosted utilization in mining in recent months toa relatively high level. The operating rate for utilitiesrose 1.6 percentage points, to 89.1 percent, 1 percent-age point below its 1996 average.

This release and the history for all published seriesare available on the Internet at the Board's WorldWide Web site, http://www.bog.frb.fed.us. •


497

Statement to the Congress

Statement by Susan M. Phillips, Member, Board ofGovernors of the Federal Reserve System, before theSubcommittee on Risk Management and SpecialtyCrops of the Committee on Agriculture, US. House ofRepresentatives, April 15, 1997

I am pleased to be here today to present the FederalReserve Board's views on efforts to clarify andreform the regulation of derivatives contracts underthe Commodity Exchange Act (CEA). The Board hasbeen participating actively in discussions of deriva-tives regulation for the past ten years. In part, theBoard's interest stems from its responsibilities for thesupervision of banking organizations. Many U.S.banking organizations, especially the largest, are verysignificant participants in derivatives markets. Theyuse exchange-traded derivatives to manage theirinterest rate, foreign exchange, and other marketrisks. Some operate subsidiaries that act as futurescommission merchants. In addition, U.S. bankingorganizations are among the leading dealers in off-exchange, privately negotiated derivatives contracts.The Board also considers it important to addressthese issues because, as the nation's central bank, ithas a broad interest in the integrity and efficiency ofU.S. financial markets.

The Board strongly endorses the Congress's effortsto carefully reexamine the existing regulatory frame-work for derivatives. The key elements of the CEAwere put in place in the 1920s and 1930s to regulatethe trading on exchanges of grain futures by thegeneral public, including retail investors. Since then,derivatives markets in the United States have under-gone profound changes. On the futures exchangesthemselves, financial futures, not agricultural futures,now account for the great bulk of the activity, andretail participation in many of the financial futurescontracts is negligible. Outside the futures exchanges,enormous markets have developed in which banks,corporations, and other institutions privately negoti-ate customized derivatives contracts, the vast major-ity of which are based on interest rates or exchangerates. The cash markets for such financial instrumentswere well developed long before the introduction ofexchange-traded futures and options, and, for someinstruments, privately negotiated derivatives also pre-dated exchange trading.

In my remarks today I shall indicate the types ofamendments to the CEA that the Board believes areappropriate in light of these profound changes in thederivatives markets. I shall begin by offering somegeneral observations about government regulation offinancial markets. I shall then evaluate three sets ofissues in which the Board has a particular interest:(1) the application of the CEA to privately negotiatedtransactions between institutions; (2) the regulationof the marketing of off-exchange derivatives to retailinvestors; and (3) the regulation of so-called profes-sional markets, that is, organized exchanges not opento the general public.

GOVERNMENT REGULATIONOF FINANCIAL MARKETS

In evaluating the need for government regulation, theBoard believes it essential that the public policyobjectives be identified very clearly. It seems self-evident that if the goals of regulation are not clearlyarticulated, the regulations implemented are unlikelyto best serve the public interest. More likely, they willprove unnecessary, burdensome, and perhaps haveunintended consequences, including results contraryto the underlying objectives. In the case of the Com-modity Exchange Act, the objectives seem quiteclear. Most, perhaps all, would agree that the objec-tives of public policy in this area are to ensure theintegrity of commodity markets, especially deterringmarket manipulation, and to protect market partici-pants from losses resulting from fraud or the insol-vency of contract counterparties.

Where there is disagreement is on the need forgovernment regulation to achieve these objectivesand, where regulation is agreed to be appropriate, onwhether existing provisions of the CEA permit thebest regulatory framework. The Board believes thatbefore implementing government regulation of a mar-ket, policymakers should consider whether marketforces by themselves are sufficient to achieve therelevant public policy objectives. Participants infinancial markets often are fully capable of protectingtheir own interests and, in so doing, often serve thepublic interest equally well. To be sure, this is notalways the case. Some market participants may lack



incentives or the ability to protect their interests, ortheir private interests may conflict with the publicinterest. In such circumstances, government regula-tion may assist market mechanisms, especially if it isdesigned to enhance the capabilities of market partici-pants or to harmonize private incentives with thepublic interest.

The Board believes that a particular market's char-acteristics determine whether government regulationis necessary and, if so, what form of governmentregulation is appropriate. Agricultural futures oftentend to be susceptible to manipulation because physi-cal delivery is required; because the deliverable sup-ply is relatively price inelastic; and because exchangerules impose substantial costs on sellers who fail todeliver. By contrast, many financial derivatives aremuch more difficult if not impossible to manipulate,even when traded on exchanges, because they aresettled in cash or, in any event, are based on under-lying assets whose supply is highly price elastic.Similarly, the extent to which market participants arevulnerable to losses from fraud or counterparty insol-vencies depends on the types of participants. Retailparticipants may lack the knowledge and sophistica-tion to manage counterparty credit exposures or toprotect themselves effectively against uncompen-sated losses from fraud. By contrast, institutions typi-cally are quite adept at managing credit risks and aremore likely to base their investment decisions onindependent judgments and, if defrauded, usually arequite capable of gaining restitution through use of thelegal system.

Because the need for and appropriate form of gov-ernment regulation are market specific, the Boardbelieves that a "one-size-fits-all" approach to finan-cial market regulation is inappropriate. Privatelynegotiated transactions between principals should beregulated differently from transactions on organizedexchanges, where trades often are executed on behalfof third parties. Institutional markets can and shouldbe differently regulated from markets open to theretail public. Moreover, we believe counterpartiesshould be free to choose whether to seek the protec-tion and accept the burdens of government regulationor to opt out of those benefits and burdens andtransact on their own terms.

APPLICATION OF THE CEATO PRIVATELY NEGOTIATED TRANSACTIONSBETWEEN INSTITUTIONS

In the case of privately negotiated derivative transac-tions between institutions, the Board has supported

exclusion of such transactions from coverage underthe CEA in the past and continues to do so. In thesemarkets, private market discipline appears to quiteeffectively and efficiently achieve the public policyobjectives of the CEA. Counterparties to privatelynegotiated transactions have limited their activity tocontracts that are very difficult to manipulate. Thevast majority of privately negotiated contracts aresettled in cash rather than through delivery. Cashsettlement typically is based on a rate or price in ahighly liquid market with a very large or virtuallyunlimited deliverable supply, for example, LIBOR(London interbank offered rate) or the spot dollar-yen exchange rate. Furthermore, the costs of defaultor of failing to deliver typically are limited to actualdamages. Thus, attempts to corner a market, even ifsuccessful, could not induce sellers in privately nego-tiated transactions to pay significantly higher pricesto offset their contracts or to purchase the underlyingassets. Most important, prices established in privatelynegotiated transactions are not used directly or indis-criminately as the basis for pricing other transactions,so any price distortions would not affect other buyersor sellers of the underlying asset. In these respects,privately negotiated contracts have different charac-teristics from exchange-traded contracts generallyand agricultural futures in particular.

Institutional counterparties to privately negotiatedcontracts also have demonstrated their ability to pro-tect themselves from losses from fraud and counter-party insolvencies. They have insisted that dealershave financial strength sufficient to warrant a creditrating of A or higher. Consequently, dealers are estab-lished institutions with substantial assets and signifi-cant investments in their reputations. When suchdealers have engaged in deceptive practices, institu-tions that have been victimized have been able toobtain redress by going to court or directly negotiat-ing a settlement with the dealer. The threat of legaldamage awards provides dealers with incentives toavoid misconduct. A far more powerful incentive,however, is the fear of loss of the dealer's goodreputation, without which it cannot compete effec-tively, regardless of its financial strength or financialengineering capabilities. Institutional counterpartiesto privately negotiated transactions have demon-strated their ability to manage credit risks quite effec-tively through careful evaluation of counterparties,the setting of internal credit limits, and the judicioususe of netting agreements and collateral. Actuallosses to institutional counterparties in the UnitedStates from dealer defaults have been negligible.Recent cooperative international efforts to improvethe quality of public disclosure of financial informa-


Statement to the Congress 499

tion by banks and other dealers in privately negoti-ated transactions should further enhance the effective-ness of private market discipline.

In the future, counterparties to privately negotiatedtransactions may seek to establish some type of cen-tralized clearing facilities for such transactions. Suchfacilities potentially could make management ofcounterparty credit risks and liquidity risks even moreeffective. At the same time, however, clearing facili-ties often concentrate and mutualize risk. For thisreason, the Board believes that if counterparties wereto choose to develop such facilities, some type ofgovernment oversight generally would be appropriateto supplement the private self-regulation that thecounterparties would provide. However, it is notobvious that in all cases regulation of such clearingfacilities under the CEA would be the best approach.For example, if a clearing facility were establishedfor privately negotiated interest rate or exchange ratecontracts between dealers, most of which were banks,oversight by the federal banking agencies wouldseem more appropriate. Likewise, a clearing facilityfor privately negotiated derivatives on underlyingassets that are securities might best be regulated bythe Securities and Exchange Commission (SEC).Thus, if an exclusion of privately negotiated trans-actions from the CEA were conditioned on govern-ment supervision or regulation of any centralizedclearing facility, the Board believes that supervisionof the clearing facility by one of the federal bankingagencies, by the SEC, or by the Commodity FuturesTrading Commission should be sufficient forexclusion.

REGULATION OF THE MARKETINGOF OFF-EXCHANGE DERIVATIVESTO RETAIL INVESTORS

As I noted earlier, the Board believes it is appropriatefor regulatory purposes to distinguish transactionsbetween institutions from transactions involving retailinvestors. Because many retail investors may lack theability to evaluate counterparties and transactionseffectively, some type of government regulation ofoff-exchange transactions may be necessary to pro-tect them against unrecoverable losses from fraud ordealer insolvencies. But, even for such retail trans-actions, it is not obvious that the CEA provides thebest regulatory framework. In particular, the Boardbelieves that the marketing of off-exchange deriva-tives to retail customers by banks and broker-dealersis more appropriately regulated by the federalbanking regulatory agencies and the Securities

and Exchange Commission respectively. Such anapproach also would eliminate the undesirable resultof oversight by multiple government entities.

By way of background, in the case of banks, inves-tigations by our staff and staff of the other bankingagencies indicate that currently there is very little, ifany, marketing of derivative contracts to retail inves-tors. In any event, the Board and the other bankingagencies already have issued supervisory guidanceon sales practices for securities, mutual funds, andderivatives that would be broadly applicable to suchtransactions. If experience suggested that more spe-cific or extensive guidance was needed to protectretail investors and, thereby, also to protect the repu-tation of banks engaged in retail marketing, the Boardwould work with the other banking agencies todevelop and promulgate such guidance.

REGULATION OF PROFESSIONAL MARKETS

The Board believes that it is appropriate for regula-tory purposes to differentiate between privately nego-tiated transactions and transactions on exchanges,especially when transactions on exchanges areexecuted on behalf of third parties, rather than solelybetween principals. Nonetheless, the Board agrees onthe need to reexamine the regulation of exchangetrading and to consider whether specific regulationsare still necessary in light of the profound changes inthe contracts traded and the intense competitive pres-sures that the exchanges are experiencing. In particu-lar, the Board is supportive of the development of analternative, less intrusive regulatory regime forexchanges that limit participation to institutions andlimit contracts traded to those that are not readilysusceptible to manipulation—for example, financialcontracts that are settled in cash or through physicaldelivery of assets whose supply is highly price elas-tic. Some have expressed concerns about the poten-tial effects of introduction of professional markets onexisting futures markets. In particular, some fear thatif liquidity in existing contracts were transferred tothe professional markets, the general public could bedisadvantaged. Although such concerns, if justified,might argue against professional markets in instru-ments in which the general public currently partici-pates significantly, they would seem to have nobearing on the case for professional markets for thosecontracts for which retail participation currently isnegligible. In addition, alternative regulated marketmaking systems could develop to facilitate retailexchange trading as an adjunct to the professionaltrading, with the markets linked by arbitrage.



The Board has not examined existing exchange currently available under the Commodity Futuresregulations sufficiently carefully to offer comprehen- Trading Commission's pilot program for professionalsive suggestions as to which regulations need or need markets is quite wide and would appear to offernot be applied to professional markets. We would ample room for a compromise that would address theobserve, however, that the gap between what the exchanges' competitive concerns and still be consis-exchanges are perceived to be seeking and what is tent with the public interest. •


Announcements

501

PUBLIC HEARINGS ON 1994 PROVISIONSOF THE TRUTH IN LENDING ACT

The Federal Reserve Board announced on April 24,1997, that it would hold three public hearings in Juneto examine the effect of Truth in Lending Act provi-sions enacted in 1994 on the home equity loanmarket.

The hearings were scheduled at the following timesand locations:

• Tuesday, June 3, at the Los Angeles Branch ofthe Federal Reserve Bank of San Francisco,950 South Grand Avenue, Los Angeles, beginning at8:15 a.m., PDT

• Thursday, June 5, at the Federal Reserve Bank ofAtlanta, 104 Marietta Street, Atlanta, beginning at8:15 a.m., EDT

• Tuesday, June 17, at the Federal Reserve Board'sMartin Building, 20th and C Streets, NW, Washing-ton, D.C., beginning at 8:15 a.m., EDT.

The Federal Reserve hosted these hearings as partof its directive under provisions of the Home Owner-ship Equity Protection Act. The Board will also usethe hearings to examine Truth in Lending issues,primarily on how the finance charge could moreaccurately reflect the cost of consumer credit. In theTruth in Lending Act Amendments of 1995, theCongress asked the Board to study the finance chargeissue. The Board submitted a preliminary analysis tothe Congress last year, and the hearings will assist infurther deliberations.

STEPS TO EASE FINANCIAL STRESS IN AREASAFFECTED BY FLOODING

The Federal Reserve Board announced on April 24,1997, a series of steps designed to help ease financialstress in areas affected by the flooding in Minnesota,North Dakota, and South Dakota. A supervisorystatement adopted by the Board encourages financialinstitutions to work constructively with borrowerswho are experiencing difficulty because of theflooding.

The statement says that banks may find it appropri-ate to ease credit terms, consistent with prudent bank-

ing practices, to help new borrowers restore theirfinancial strength and to restructure debt or extendrepayment terms to existing borrowers.

The Board is also considering the need to waiveits appraisal regulation for real-estate-related trans-actions affected by the flooding to assist disaster-affected regulated institutions encountering difficul-ties in obtaining appraisals for transactions thatwould aid reconstruction in the areas affected by thedisaster.

For additional information, contact the FederalReserve Bank of Minneapolis (612) 340-2279.

PUBLICATION OF A NEW WEEKLY LISTOF APPLICATIONS AND NOTICES FILEDUNDER THE BANK HOLDING COMPANY ACTOR THE CHANGE IN BANK CONTROL ACT

The Federal Reserve Board announced on April 30,1997, the start of a new weekly publication that listsapplications and notices, together with the deadlinefor comment, that have been filed under the BankHolding Company Act or the Change in Bank Con-trol Act.

The new publication is available in three forms:

• By a fax-on-demand call-in facility that is avail-able twenty-four hours a day, seven days a week, andwill automatically fax a copy of the new publicationto the caller. The call-in number is (202) 452-3655

• On the Board's Internet home page athttp://www.bog.frb.fed.us

• By mail by contacting the Board's PublicationsServices at (202) 452-3245 or by writing to Publica-tions Services, Mail Stop 127, Federal ReserveBoard, Washington, DC 20551.

In its recent revision of Regulation Y (Bank Hold-ing Companies and Change in Bank Control) theBoard announced that it would take steps to improvethe effectiveness and timeliness of public notices ofmerger and acquisition proposals. The new publica-tion, numbered the H.2A, lists applications andnotices alphabetically by applicant together with theappropriate Federal Reserve Bank where commentsmay be filed and whom to contact to receive thepublic portion of the application.



Posting of the publication on the Board's homepage allows a user to search for a notice by theapplicant's name, acquiree's name or activity, sectionof law, or by Reserve Bank. The information will beupdated at least every three business days.

Publication of the H.2, which lists actions taken bythe Board on applications plus applications receivedand Community Reinvestment Act activities, willcontinue.

AVAILABILITY OF REVISED LISTS OFOVER-THE-COUNTER STOCKS AND OF FOREIGNSTOCKS SUBJECT TO MARGIN REGULATIONS

The Federal Reserve Board published on April 25,1997, a revised list of over-the-counter (OTC) stocksthat are subject to its margin regulations. It alsopublished a revised list of foreign equity securitiesthat meet the margin criteria in Regulation T (Creditby Brokers and Dealers).

The lists were effective May 12, 1997, and super-sede the previous lists that were effective Febru-ary 10, 1997. The next revision of these lists isscheduled to be effective August 1997. These lists arepublished for the information of lenders and thegeneral public.

The changes that have been made to the revisedOTC list, which now contains 4,849 OTC stocks, areas follows:

• One hundred sixty stocks have been included forthe first time, 136 under National Market System(NMS) designation

• Forty-one stocks previously on the list have beenremoved for substantially failing to meet the require-ments for continued listing

• Eighty-four stocks have been removed for rea-sons such as listing on a national securities exchangeor involvement in an acquisition.

The OTC list is composed of OTC stocks thathave been determined by the Board to be subject tomargin requirements in Regulations G (SecuritiesCredit by Persons other than Banks, Brokers, orDealers), T, and U (Credit by Banks for Purchasingor Carrying Margin Stocks). It includes OTC stocksqualifying under Board criteria and also includes allOTC stocks designated as NMS securities. Addi-tional NMS securities may be added in the interimbetween quarterly Board publications; these securi-ties are immediately marginable upon designation asNMS securities.

The foreign list is composed of foreign equitysecurities that are eligible for margin treatment at

broker-dealers. Effective July 1, 1996, foreign stocksthat have a "ready market" for purposes of theSecurities and Exchange Commission's (SEC) netcapital rule may be included on the foreign list. TheSEC effectively treats all stocks included on theFinancial Times/Standard & Poor's Actuaries WorldIndices (FT/S&P-AW Indices) as having a "readymarket" for capital purposes. The Board is addingtwenty-three foreign stocks and deleting thirty-two,based on changes to the FT/S&P-AW Indices. Therevised foreign list now contains 1,965 securitiesdisplayed in country order.

PUBLIC ACCESS DATABASE FROM THE 1993NATIONAL SURVEY OF SMALL BUSINESSFINANCES NOW AVAILABLE

A public access data set of the 1993 National Surveyof Small Business Finances (NSSBF) is now avail-able. The 1993 NSSBF is a survey of small businessenterprises that was conducted during 1994-95 forthe Board of Governors of the Federal Reserve Sys-tem and the U.S. Small Business Administration.Price Waterhouse LLP conducted the interviewingfor the survey.

The 1993 NSSBF covers a wide range of financialcharacteristics of small (fewer than 500 employees),privately owned, nonagricultural and nonfinancialfirms. The survey collected general information onfirms' business activities and ownership; an inven-tory of deposit and savings accounts, financing, andother financial service use; information on the finan-cial institutions used by firms; use of trade credit;credit history data; and data from income and balancesheet statements. Most data are for calendar or fiscalyear 1993; data from the income and balance sheetstatements are for calendar or fiscal year-end 1992.1

The data set, survey codebook, and related docu-mentation are available on the Board's World WideWeb site at http://www.bog.frb.fed.us under Domes-tic and International Research, Working papers,Occasional Staff Studies.

1. Additional information on the 1993 NSSBF methods and con-tent can be found in "National Survey of Small Business FinancesSurvey Questionnaire," mimeo (Price Waterhouse LLP), July 7, 1994;"National Survey of Small Business Finances: Methodology Report,"mimeo (Price Waterhouse LLP), July 24, 1996; Rebel A. Cole andJohn D. Wolken, "Financial Services Used by Small Businesses:Evidence from the 1993 National Survey of Small BusinessFinances," Federal Reserve Bulletin, vol. 81 (July 1995), pp. 630-67;and Rebel A. Cole, John D. Wolken and R. Louise Woodburn, "Bankand Nonbank Competition for Small Business Credit: Evidence fromthe 1987 and 1993 National Surveys of Small Business Finances,"Federal Reserve Bulletin, vol. 82 (November 1996), pp. 983-95.


Legal Developments

503

FINAL RULE—AMENDMENTS TO REGULATIONS G, T, U,

ANDX

The Board of Governors is amending 12 C.F.R. Parts 207,220, 221, and 224, its Regulation G, T, U, and X (Securi-ties Credit Transactions, List of Marginable OTC Stocks;List of Foreign Margin Stocks). The List of MarginableOTC Stocks (OTC List) is composed of stocks tradedover-the-counter (OTC) in the United States that have beendetermined by the Board of Governors of the FederalReserve System to be subject to the margin requirementsunder certain Federal Reserve regulations. The List ofForeign Margin Stocks (Foreign List) is composed of for-eign equity securities that have met the Board's eligibilitycriteria under Regulation T. The OTC List and the ForeignList are published four times a year by the Board. Thisdocument sets forth additions to and deletions from theprevious OTC List and the previous Foreign List.

Effective May 12, 1997, 12 C.F.R. Parts 207, 220, 221,and 224 are amended as follows. Accordingly, pursuant tothe authority of sections 7 and 23 of the Securities Ex-change Act of 1934, as amended (15 U.S.C. 78g and 78w),and in accordance with 12 C.F.R. 207.2(k) and 207.6 (Reg-ulation G), 12 C.F.R. 220.2 and 220.17 Regulation T), and12 C.F.R. 221.2(j) and 221.7 (Regulation U), there is setforth below a listing of deletions from and additions to theOTC List and the Foreign List.

Deletions From The List Of Marginable OTCStocks

Stocks Removed For Failing Continued ListingRequirements

American Educational Products Inc.: $1.01 par commonAmerican Life Holding Company: $.01 par redeemable cumu-

lative preferredAntares Resources Corporation: $.001 par commonATS Medical, Inc.: Warrants (expire 03-09-97)

Bank of Los Angeles: Warrants (expire 12-01-98)Biomagnetic Technologies, Inc.: No par commonBlack Hawk Gaming & Development Company, Inc.:

Warrants (expire 06-30-97)

Calloway's Nursery, Inc.: $.01 par commonCerplex Group, Inc., The: $.001 par commonChampion Road Machinery, Ltd.: No par commonChartwell Leisure, Inc.: Rights (expire 03-13-97)Cincinnati Microwave, Inc.: No par common; Warrants

(expire 12-31-98)

Community First Bankshares, Inc.: Depositary SahresCytrogen Corporation: Warrants (expire 01-31-97)

Diagnostic Health Services, Inc.: Warrants (expire 06-22-98)Diamond Technology Partners, Inc.: Rights (expire 03-31-97)

Encore Computer Corporation: $.01 par common

Excel Technology, Inc.: Class B, Warrants (expire 02-08-98)

Forest Oil Corporation: $.75 par convertible preferred

Hariston Corporation: No par commonHarvard Industries, Inc.: Class B, $.01 par common

Industrial Holdings, Inc.: Class A, Warrants (expire01-16-97)

IWI Holding, Limited: No par common

Kushner-Locke Company, The: Warrants (expire 03-20-97)

L.A. T Sportswear, Inc.: No par commonLafayette Industries, Inc.: $.01 par common

Manhattan Life Insurance Company: $2.00 par commonMeris Laboratories, Inc.: No par commonMicrocap Fund, Inc., The: $.01 par commonMicroelectronic Packaging, Inc.: No par commonMultimedia Concepts International, Inc.: 4.001 par common

National Mercantile Bancorp (CA): No par commonNationsBank Corporation: Depositary Shares

Quantum Corporation: 6-3/8% convertible subordinateddebentures

Salick Health Care, Inc.: $.001 par commonSMT Health Services, Inc.: Warrants (expire 03-04-97)Specialty Teleconstructors, Inc.: Warrants (expire 11-02-99)

Teletek, Inc.: $.0001 par common

United Home Life Insurance Co.: $1.00 par commonUrohealth Systems, Inc.: Warrants (expire 03-20-97)

Stocks Removed for Listing on a NationalSecurities Exchange or Being Involved in anAcquisition

Affiliated Computer Services, Inc.: Class A, $.01 par commonAHI Healthcare Systems, Inc.: $.01 par commonAllied Bankshares, Inc. (Georgia): $1.00 par common



American Radio Systems Corporation: Class A, $.01 parcommon

American Studios, Inc.: $.001 par commonArgentbank: $2.50 par commonAtlantic Tele-Network, Inc.: $.01 par commonAztec Manufacturing Co.: $1.00 par common

B.M.J. Financial Corp.: $1.00 par commonBaby Superstore, Inc.: No par commonBarefoot Inc.: $.01 par commonBridgeville Savings Bank, FSB (Pennsylvania): $.10 par corn-

Cable Design Technologies Corporation: $.01 par commonCavco Industries, Inc.: $.10 par commonCentral Tractor Farm & Country Inc.: $.01 par commonChemfab Corporation: $.10 par commonChempower, Inc.: $.10 par commonCiti-Bancshares, Inc. (Florida): $.01 par commonCliffs Drilling Company: $.01 par commonConsolidated Graphics, Inc.: $.01 par common

Dynatech Corporation: $.20 par common

Eastbay, Inc.: $.01 par commonEnergy Research Corporation: $.0001 par commonEpic Design Technology, Inc.: No par commonEZ Communications, Inc.: Class A, $.01 par common

FHP International Corporation: $.05 par common; Series A,$.05 par cumulative convertible preferred

Fibermark, Inc.: $.001 par commonFidelity Financial Bankshares Corporation: $1.00 par commonFirst Federal Bancshares of Eau Claire, Inc.: $.01 par commonFirst Federal Savings Bank of Brunswick, Georgia: $1.00 par

commonFirst State Financial Services, Inc.: $.01 par commonFlorida First Bancorp, Inc.: $1.00 par commonForasol-Former, N.V.: Common shares (par NLG 0.01)

Great Bay Power Corporation: $.01 par commonGrove Bank (Massachusetts): $.10 par common

Homeland Bankshares Corporation: $12.50 par commonHorizon Bancorp, Inc. (Texas): $.01 par common

Independence Bancorp, Inc. (New Jersey): $1,667 par com-mon

Innotech, Inc.: $.001 par commonIWC Resources Corporation: No par common

Kindercare Learning Centers, Inc.: $.01 par common;Warrants (expire 04-01-97)

LaSalle re Holdings, Limited: $1.00 par commonLiberty Bancorp, Inc. (Illinois): $.01 par common

Mastec, Inc.: $.10 par commonMedex, Inc.: $.01 par common

Midland Financial Group, Inc.: No par commonMilgray Electronics, Inc.: $.25 par common

New World Communications Group, Inc.: Class A, $.01 parcommon

Norand Corporation: $.01 par common

Osborn Communications Corporation: $.01 par commonOxford Resources Corporation: Class A, $.01 par common

Panatech Research and Development Corporation: $.01 parcommon

Providence and Worcester Railroad Company: $.50 par com-mon

Quality Food Centers, Inc.: $.001 par common

Research Medical, Inc.: $.50 par commonRiverside National Bank (California): $1.25 par common

SCI Systems, Inc.: $.10 par commonSDNB Financial Corp.: No par commonSecurity Bancorp (Montana): $1.00 par commonSoftdesk Inc.: $.01 par commonSouthwest Banks, Inc.: $.10 par commonSQA Inc.: $.01 par commonSuare Industries, Inc.: $.01 par commonStrober Organization, Inc.: $.01 par commonSuiza Foods Corporation: $.01 par commonSystemix, Inc.: $.01 par common

Target Therapeutics, Inc.: $.0025 par commonTheratx, Incorporated: $.001 par commonTompkins County Trustco, Inc. (New York): $1.66-2/3 par

commonTower Automotive, Inc.: $.01 par commonTPI Enterprises, Inc.: $.01 par commonTriad Systems Corporation: $.01 par commonTroy Hill Bancorp, Inc. (Pennsylvania): $.01 par commonTSX Corporation: $.01 par commonTylan General Inc.: $.001 par common

United Air Specialists, Inc.: No par common

Vallicorp Holdings, Inc.: $.01 par commonVentura County National Bancorp: No par commonVideo Sentry Corporation: $.01 par commonVitalink Pharmacy Services, Inc.: $.01 par common

Additions to the List of Marginable OTC Stocks

1st Source Corporation: Fixed rate cumulative trust pre-ferred securities of 1st Source Capital Trust; Floatingrate cumulative trust preferred securities of 1st SourceCapital Trust

Aastrom Biosciences, Inc.: No par commonAccelgraphics, Inc.: $.001 par common


Legal Developments 505

Agribiotechn, Inc.: $.001 par commonAHL Services, Inc.: $.01 par commonAlliance Imaging, Inc.: $.01 par commonAmerican Business Financial Services, Inc.: $.001 par com-

monAmeritrade Holding Corporation: Class A, $.01 par commonAmerus Life Holdings, Inc.: Class A, no par commonAPEX PC Solutions, Inc.: No par commonATL Products, Inc.: Class A, $.0001 par common

Bank of Santa Clara: No par commonBEA Systems, Inc.: $.001 par commonBiora AB: American Depository ReceiptsBiosite Diagnostic, Inc.: $.01 par commonBirman Managed Care, Inc.: $.001 par commonBrunswick Technologies, Inc.: No par common

Capital City Bank Group (Florida): $.01 par commonCell Therapeutics, Inc.: No par commonCerus Corporation: $.001 par commonCiena Corporation: $.01 par commonCitizens Financial Corporation: Class A, no par commonCoast Bancorp (California): No par commonCoast Dental Services, Inc.: $.001 par commonColdwater Creek, Inc.: $.01 par commonColonial Downs Holdings, Inc.: Class A. $.01 par commonCommunity Care Services, Inc.: $.01 par commonCommunity First Bankshares, Inc.: Cumulative capital securi-

ties $25 liquidationCommunity Trust Bancorp, Inc.: No par preferred stockCoulter Pharmaceutical, Inc.: $.001 par commonCresud S.A.C.I.F.Y.A.: American Depositary ReceiptsCrystal Systems Solutions, Ltd.: Ordinary shares (NIS .01)

Daou Systems, Inc.: $.001 par commonData Systems Network Corporation: $.01 par commonDatamark Holding, Inc.: $.0001 par commonDeltek Systems, Inc.: $.001 par commonDiamond Technology Partners, Inc.: Class A, $.001 par com-

monDigital Lightwave, Inc.: $.0001 par common

Earthlink Network, Inc.: $.01 par commonEdge Petroleum Corporation: $.01 par commonEltek Ltd.: Ordinary Shares (NIS .6)Emcore Corporation: No par commonEmpire Federal Bancorp, Inc. (Montana): $.01 par commonEncore Medical Corporation: $.001 par common: Warrants

(expire 03-08-2003)Endocardial Solutions, Inc.: $.01 par commonEnstar, Inc.: $.01 par commonEnvironment/One Corporation: $.10 par commonEPIX Medical, Inc.: $.01 par commonErgobilt, Inc.: $.01 par commonEsprit Telecom Group PLC: American Depositary ReceiptsEuronet Services, Inc.: $.01 par common

Fieldworks, Incorporated: $.001 par commonFirst Aviation Services, Inc.: $.01 par common

First Banks, Inc. (Missouri): No par cumulative trust preferredsecurities

First Sterling Banks, Inc.: No par commonFirstfed Bancorp, Inc. (Alabama): $.01 par commonFonix Corporation: $.0001 par commonFour Media Company: $.01 par commonFreepages Group PLC: American Depositary ReceiptsFulton Bancorp, Inc.: $.01 par common

Geographies, Inc.: Warrants (expire 06-01-99)GFSB Bancorp, Inc.: $.10 par commonGreater Bank Bancorp (California): 9.75% cumulative trust

preferredGreen Mountain Coffee, Inc.: $.01 par commonGS Financial Coproration: $.01 par commonGuaranty Financial Corporation: $1.25 par commonGuitar Center, Inc.: $.01 par commonGulf Island Fabrication, Inc.: No par common

Hamilton Bancorp, Inc. (Florida): $.01 par commonHemlock Federal Financial Coproration: $.01 par commonHigh Point Financial Corporation: No par commonHomeland Holding Corporation: $.01 par commonHospitality Worldwide Services, Inc.: $.01 par commonHumascan, Inc.: $.01 par common

IAT Multimedia, Inc.: $.01 par commonICG Communications, Inc.: $.01 par commonILEX Oncology, Inc.: $.01 par commonILOG S.A.: American Depositary ReceiptsImage Guided Technologies, Inc.: No par commonInterstate National Dealer Services, Inc.: Warrants (expire

07-22-99)Iona Technologies, PLC: American Depositary Receipts

Jacor Communications, Inc.: Warrants (expire 02-27-2002)Jakks Pacific, Inc.: $.001 par commonJeffbanks, Inc.: 9.25% no par preferred securitiesJenna Lane, Inc.: $.01 par common; Class A, Warrants (expire

03-19-2000)Judge Group, Inc., The: $.01 par common

Knightsbridge Tankers, Ltd.: $.01 par commonKOS Pharmaceuticals, Inc.: $.01 par common

Logitech International S.A.: American Depositary Receipts

Macrovision Corporation: $.01 par commonMansur Industries, Inc.: $.001 par commonMeade Instruments Corporation: $.01 par commonMedialink Worldwide Incorporated: $.01 par commonMedical Manager Corporation: $.01 par commonMedirisk, Inc.: $.001 par commonMetro Information Services, Inc.: $.01 par commonMicro Therapeutics, Inc.: $.001 par commonMississippi Valley Bancshares, Inc.: Floating rate cumulative

trust—preferred securities of MVBI Capital TrustMultimedia Games, Inc.: $.01 par common



NACT Telecommunications, Inc.: $.01 par commonNamibian Minerals Corporation: No par commonNational Auto Finance Company, Inc.: $.01 par commonNeomagic Coproration: $.001 par commonNetcom Systems, AB: American Depositary ReceiptsNetsmart Technologies, Inc.: $.01 par commonNewsouth Bancorp, Inc. (North Carolina): $.01 par commonNexar Technologies, Inc.: $.01 par commonNovatel, Inc.: No par common

Old Guard Group, Inc.: No par commonOmniquip International, Inc.: $.01 par commonOrtec International, Inc.: $.001 par commonOverland Data, Inc.: No par common

Pacificare Health Systems, Inc.: Series A, $1.00 par cumula-tive convertible preferred

Palex, Inc.: $.01 par commonPeoples Financial Corporation: No par commonPeregrine Systems, Inc.: $.001 par commonPerpetual Bank, A Federal Savings Bank (South Carolina):

$ 1.00 par commonPhotoelectron Corporation: $.01 par commonPhysicians' Speciality Coproration: $.001 par commonPremire Research Worldwide, Inc.: $.01 par commonPrime Capital Corporation: $.05 par commonPromedco Management Company: No par common

Qualix Group, Inc.: $.001 par common

Radiant Systems, Inc.: No par commonRail America, Inc.: $.001 par commonRandgold & Exploration Company Ltd.: American Depositary

ReceiptsRoy ale Energy, Inc.: No par common

Savannah Bancorp, Inc., The: $1.00 par commonSearch Capital Group, Inc.: $.01 par common; $.01 par pre-

ferred stockSemiconductor Laser International Corporation: $.01 par com-

monSignature Inns, Inc.: No par common; Series A, cumulative

convertible preferredSilgan Holdings, Inc.: $.01 par commonSource Capital Corporation: No par commonSouthwest Bancorporation of Texas, Inc.: $1.00 par commonSpecial Metals Corporation: $.01 par commonSpeciality Care Network, Inc.: $.001 par commonSpinnaker Industries, Inc.: No par commonStocker & Yale, Inc.: $.001 par commonStorage Dimensions, Inc.: $.005 par commonSun Bancorp, Inc. (New Jersey): 9.85% preferred stock

Tangram Enterprise Solutions, Inc.: $.01 par commonTemplate Software, Inc.: $.01 par commonTotal Control Products, Inc.: No par commonTotal World Telecommunications, Inc.: $.00001 par commonTranscrypt International, Inc. $.01 par common

VDI Media No par commonVistana, Inc.: $.01 par commonVyrex Corporation: $.001 par common

Walbro Corporation: Convertibletrust preferred securitiesWesley Jessen Visioncare, Inc.: $.01 par commonWintrust Financial Corporation: No par common

Yurie Systems, Inc.: $.01 par common

Zindart Limited: American Depositary Receipts

Deletions from the Foreign Margin List

Brazil

Companhia Suzano de Papel Celulose PN: No par non-voting,preferred

Lojas Americanas S.A.: No par common

Hong Kong

Winsor Industrial Corporation Ltd.: HK$.50 par ordinaryshares

Japan

AT&T Global Information Solutions Japan, Ltd.: ¥50 parcommon

Central Finance Co., Ltd.: ¥50 par commonGodo Steel, Ltd.: ¥50 par commonJapan Digital Laboratory Co., Ltd.: ¥50 par commonKeiyo Co., Ltd.: ¥50 par commonMitsui Construction Co., Ltd.: ¥50 par commonNichiei Construction Co., Ltd.: ¥50 par commonNihon Nosan Kogyo K.K.: ¥50 par commonNippon Densetsu Kogyo Co., Ltd.: ¥50 par commonNissha Printing Co., Ltd.: ¥50 par commonRaito Kogyo Co., Ltd. ¥50 par commonSenshukai Co., Ltd.: ¥50 par commonShokusan Jutaku Sogo Co., Ltd.: ¥50 par commonSumitomo Construction Co., Ltd.: ¥50 par commonTaihei Dangyo Kaisha, Ltd.: ¥50 par commonTakoaoka Electric Mfg. Co., Ltd.: ¥50 par commonTOA Steel Co., Ltd.: ¥50 par commonToenec Corporation: ¥50 par commonTokuyama Soda Co., Ltd.: ¥50 par commonTsumura & Co.: ¥50 par commonYaohan Japan Corporation: ¥50 par common

South Africa

Middle Witwatersrang (Western Area) Ltd.: Ordinaryshares, par 0.01 South African rand

Sweden

Valley National Gases, Inc.: $.001 par common Stadshypotek AB: A Free Shares, par 10 Swedish krona



Thailand

Finance One Public Co., Ltd.: Ordinary shares, par 10Thai baht

International Cosmetics Public Co., Ltd.: Ordinary shares,par lOThaibhat

Univest Land Public Co., Ltd.: Common shares, par 10Thai baht

United Kingdom

Invesco PLC: Ordinary shares, par 25 pLondon Electricity PLC: Ordinary shares, par 50 pYorkshire Electricity Group PLC: Ordinary shares, par .568 p

Additions to the Foreign Margin List

Brazil

Centrais Eletricas Brasileiras S.A. (Eletrobras): No par com-mon

Companhia Siderurgia Nacional: No par commonLight Participacoes, S.A. (Light Par): No par commonUniao De Bancos Brasileiras S.A.: No par non-voting,

preferred

Hong Kong

China Overseas Land & Investment, Ltd.: HK$.1O par ordi-nary shares

China Resources Enterprise, Ltd.: HK$1.00 par ordinaryshares

Cosco Pacific, Ltd.: HK$.5O par ordinary sharesGuandong Investment, Ltd.: HK$.5O par ordinary sharesKerry Properties, Ltd.: HK$.1O par ordinary sharesPearl Oriental Holdings, Ltd.: HK$.1O par ordinary sharesTsim Sha Tsui Properties, Ltd.: HK$.2O par ordinary shares

Italy

H.P.I. SPA: Ordinary shares, par 5000 lira

Japan

Acorn Co., Ltd.: ¥50 par common

DDI Corporation: YNichiei Co., Ltd.: ¥50 par commonNTT Data Corporation: ¥50,000 par commonOriental Land Co., Ltd.: ¥50 par commonPromise Co., Ltd.: ¥50 par commonWest Japan Railway Co.: ¥50,000 par common

South Africa

Avmin Limited: Ordinary shares, par .01 South African rand

Switzerland

CIBA Specialty Chemicals Holdings AG: Registered shares,par 10 Swiss francs

Thailand

ICC International Public Co., Ltd.: Ordinary shares, par10 Thai baht

United Kingdom

Amvesco PLC: Ordinary shares, par 25 p

ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT

Orders Issued Under Section 3 of the Bank HoldingCompany Act

Amboy BancorporationOld Bridge, New Jersey

Order Approving the Acquisition of Shares in a De NovoBank

Amboy Bancorporation, Old Bridge, New Jersey, ('Am-boy"), a bank holding company within the meaning of theBank Holding Company Act ("BHC Act"), has requestedthe Board's approval under section 3 of the BHC Act(12U.S.C. § 1842) to acquire up to 9.9 percent of theshares of The Community Bank of New Jersey, Freehold,New Jersey ("CBNJ"), a de novo state-chartered bank.1

Notice of this proposal, affording interested persons anopportunity to submit comments, has been published(62 Federal Register 4534 (1997)). The time for filingcomments has expired, and the Board has considered theproposal and all comments received in light of the factorsset forth in section 3 of the BHC Act.

Amboy, with total consolidated assets of $1.1 billion, isa registered bank holding company that operates one sub-sidiary bank in New Jersey.2 Amboy is the 13th largestcommercial banking organization in New Jersey, control-ling approximately $871.8 million in deposits, representing1 percent of all deposits in commercial banking organiza-tions in the state ("state deposits").3 CBNJ, a de novobank, would control a de minimis percentage of statedeposits during its first few years of operation.4

Amboy proposes to acquire less than 25 percent of thevoting shares of CBNJ, which is not a normal acquisition

1. CBNJ would be capitalized through an initial public offering ofvoting stock, and Amboy proposes to purchase 9.9 percent of thevoting shares. Amboy would also obtain a non-transferrable ten-yearoption to purchase additional CBNJ shares in future public offerings inorder to maintain shareholdings at 9.9 percent. The option by its termsmay not be exercised if the result would cause Amboy to own, in theaggregate, more than 9.9 percent of CBNJ's voting shares.

2. Amboy owns Amboy National Bank, Old Bridge, New Jersey("Amboy Bank"). Consolidated asset data are as of September 30,1996.

3. Banking asset data are as of December 31, 1996. State depositdata are as of June 30, 1996.

4. CBNJ projects that its average deposit balances will reach$6 million during its first year in operation, and will reach $85 millionby its fifth year in operation.



for a bank holding company. Nonetheless, the requirementin section 3(a)(3) of the BHC Act that the Board's approvalbe obtained before a bank holding company acquires morethan 5 percent of the voting shares of a bank suggests thatCongress contemplated the acquisition by bank holdingcompanies of between 5 and 25 percent of the votingshares of a bank or bank holding company (a "minorityinvestment").

Amboy contends that the proposed 9.9 percent minorityinvestment would be passive and would not permit Amboyto control CBNJ. Amboy has provided a number of thecommitments previously relied on by the Board in deter-mining that minority investments would not permit theinvesting bank holding company to control another bankholding company or bank.5 Unlike other cases, however,Amboy proposes to engage in loan participation activitieswith CBNJ, and contends that this relationship should notraise control issues.

A company may control a bank or other company forpurposes of the BHC Act if the company is able to exercisea controlling influence over the management and policiesof the bank or other company.6 The Board previously hasconcluded that a minority investment could permit theinvesting bank holding company to control another bank orbank holding company.7 Whether a minority investmentcould result in control necessarily requires a careful reviewof the proposal in light of all the facts of record. If controlexists, the Board's regulations require the bank holdingcompany to provide financial and managerial support tothe bank or bank holding company it controls.8

The Board has in many prior cases noted its concern thata proposed minority investment could permit an investingbank holding company to exercise a controlling influenceover the bank invested in when the investment is coupledwith significant business relationships, particularly rela-tionships involving a core banking function like lending.9

5. See e.g., Summit Bancorp, Inc., 77 Federal Reserve Bulletin 952(1991); The Summit Bancorporation, 75 Federal Reserve Bulletin 712(1989); United Counties Bancorp oration, 75 Federal Reserve Bulletin714 (1989). For example, Amboy has committed not to exercise acontrolling influence over the management or policies of CBNJ; not tohave director, officer, or employee interlocks with CBNJ; not to solicitor participate in soliciting proxies with respect to any matter presentedto the shareholders of CBNJ; and not to threaten to dispose of sharesof CBNJ in any manner as a condition of specific action or nonactionby CBNJ.

6. 12U.S.C. § 1841(a)(2)(C).7. See McLeod Bancshares, Inc., 73 Federal Reserve Bulletin 724

(1987); Hudson Financial Associates, 72 Federal Reserve Bulletin150(1986).

8. See, e.g., 12 C.F.R. 225.4(a); Flat head Holding Company ofBigfork, 82 Federal Reserve Bulletin 741 (1996); see also 12 U.S.C.§ 1815(e) (cross-guaranty provision of the Federal Deposit Insurance

Act).9. See, e.g., Proposed Investment by Sumitomo Bank, 73 Federal

Reserve Bulletin 24 (1987). In a small number of proposals, the Boardhas concluded that a minority investment in combination with busi-ness relationships would not, in the specific circumstances of thatcase, result in the investing bank holding company controlling thesecond holding company. In those cases, each of the institutionsinvolved were large commercial banking organizations with substan-tial assets and well-established records of independent operations, and

For example, an equity investor has both the means and theincentive to influence the lending policies of a companythat is a significant partner in lending transactions to insurea certain amount of loan participations in connection withthe bank's business plan. In addition, a company may beless willing to reject loans originated by an investor in thecompany or establish loan policies that conflict with thepolicies of a company that is a significant investor andsource of business.

In this case, Amboy Bank proposes to underwrite andoriginate real estate and construction loans in CBNJ'scommunity with the expectation that CBNJ would partici-pate in these loans. CBNJ is a de novo bank with no recordof independent operations. Amboy has not proposed anylimit to the amount of the assets of CBNJ that wouldrepresent loans originated or underwritten by Amboy, andthe amount of such participation could therefore representmost or all of the loan portfolio of CBNJ during the nextseveral years.

The Board also has considered these proposed businessrelationships in light of the fact that Amboy would be thelargest single shareholder of CBNJ and would be able tovote 9.9 percent of the bank's outstanding shares. CBNJ'sshares are otherwise widely held, with no single share-holder owning in excess of five percent.10

Based on all the facts of record, and for the reasonsdiscussed above, the Board concludes that Amboy wouldhave the ability to exercise a controlling influence over themanagement and policies of CBNJ as a result of theproposal and, thereby, would control the bank for purposesof the BHC Act.11 Accordingly, the Board's action on theproposal is expressly conditioned on Amboy providingfinancial and managerial support for CBNJ in accordancewith the Board's rules and policies.

Amboy and CBNJ would compete in the MetropolitanNew York/New Jersey banking market.12 Amboy is the45th largest depository institution in the market, control-ling approximately $871.8 million in deposits, representingless than 1 percent of total deposits in depository institu-tions in the market ("market deposits").13 The market is

the business relationships were limited. See BOK Financial Corpora-tion, 81 Federal Reserve Bulletin 1052 (1995); Banco Santander, S.A.,81 Federal Reserve Bulletin 1139 (1995).

10. Although the bank's organizers would own approximately46 percent of the bank's voting shares, the organizers consist of 31individuals and there is no evidence in the record that the organizersare bound together as a cohesive group of shareholders that couldcounterbalance Amboy's voting power. CBNJ's remaining votingshares would be owned by approximately 270 individual shareholders.

11. See 12 C.F.R. 225, Subpart D.12. The Metropolitan New York-New Jersey banking market is

approximated by Bergen, Essex, Hudson, Hunterdon, Middlesex,Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union andWarren Counties and parts of Mercer County in New Jersey; Bronx,Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Rich-mond, Rockland, Suffolk, Sullivan, Ulster and Westchester Countiesin New York; Pike County, Pennsylvania; and 24 municipalities inFairfield and Litchfield Counties in Connecticut.

13. Market share data are as of June 30, 1995. Market share data arebased on calculations in which the deposits of thrift institutions areincluded at 50 percent. The Board has indicated previously that thrift



unconcentrated, as measured by the Herfindahl-HirschmanIndex ("HHI"),14 and numerous competitors would remainin the market. Based on all the facts of record, the Boardconcludes that consummation of the proposal would nothave a significantly adverse effect on competition or theconcentration of resources in the Metropolitan New York/New Jersey banking market or any other relevant bankingmarket. The Board also concludes in light of all the facts ofrecord that the financial and managerial resources andfuture prospects of the companies and banks involved andthe convenience and needs of the community to be servedare consistent with approval as are other supervisory fac-tors.

Based on the foregoing and all the facts of record, theBoard has determined that the application should be, andhereby is, approved. The Board's approval is expresslyconditioned on compliance by Amboy with all the commit-ments made in connection with the proposal and with theconditions discussed in this order, including the conditionthat Amboy provide financial and managerial support toCBNJ in accordance with the Board's policies. For pur-poses of this action, the commitments and conditions reliedon by the Board in reaching this decision are deemed to beconditions imposed in writing and, as such, may be en-forced in proceedings under applicable law.

The acquisition of shares in CBNJ should not be con-summated before the fifteenth calendar day following theeffective date of this order or later than three monthsfollowing the effective date of this order, and CBNJ shallbe opened for business within six months, unless suchperiods are extended for good cause by the Board or by theFederal Reserve Bank of New York, acting pursuant todelegated authority.

By order of the Board of Governors, effective April 14,1997.

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

WILLIAM W. WILESSecretary of the Board

institutions have become, or have the potential to become, majorcompetitors of commercial banks. See WM Bancorp, 76 FederalReserve Bulletin 788 (1990); National City Corporation, 70 FederalReserve Bulletin 743 (1984).

14. In light of the de novo formation of CBNJ, the HHI wouldremain unchanged at 748 after consummation of the proposal. Underthe revised Department of Justice Merger Guidelines, 49 FederalRegister 26,823 (June 29, 1984), a market in which the post-mergerHHI is less than 1000 is unconcentrated. The Justice Department hasinformed the Board that a bank merger or acquisition generally willnot be challenged (in the absence of other factors indicating anticom-petitive effects) unless the post-merger HHI is at least 1800 and themerger increases the HHI by more than 200 points. The JusticeDepartment has stated that the higher than normal HHI thresholds forscreening bank mergers for anticompetitive effects implicitly recog-nize the competitive effect of limited-purpose lenders and other non-

G.B. Financial Services, Inc.Greenbush, Minnesota

Order Approving the Merger of Bank HoldingCompanies

G.B. Financial Services, Inc., Greenbush ("G.B. Finan-cial"), a bank holding company within the meaning of theBank Holding Company Act ("BHC Act"), has requestedthe Board's approval under section 3 of the BHC Act(12 U.S.C. § 1842) to merge with Border Bancshares, Inc..Greenbush ("Border Bancshares"), and thereby acquireBorder State Bank, Roseau ("Border Bank"), all in Minne-sota.1

Notice of the proposal, affording interested persons anopportunity to submit comments, has been published (62Federal Register 2368 (1997)). The time for filing com-ments has expired, and the Board has considered the appli-cation and all comments received in light of the factors setforth in section 3 of the BHC Act.

G.B. Financial, with total consolidated assets oi$38.2 million, operates one subsidiary bank, Border StateBank of Greenbush, Greenbush, Minnesota ("GreenbushBank").2 G.B. Financial is the 204th largest commercialbanking organization in Minnesota, controlling deposits oiapproximately $30.2 million, representing less than 1 per-cent of total deposits in commercial banks in the state.'Border Bancshares is the 238th largest depository institu-tion in Minnesota, controlling deposits of approximately$26.7 million, representing less than 1 percent of totaldeposits in commercial banking organizations in the stateOn consummation of this proposal, G.B. Financial woulcbecome the 112th largest commercial banking organizatiorin Minnesota, controlling approximately $56.9 million irdeposits, representing less than 1 percent of total depositsin commercial banking organizations in the state.

G.B. Financial and Border Bancshares compete directl}in the Roseau, Minnesota, banking market ("Roseau bank-ing market").4 Greenbush Bank is the third largest of fouicommercial banks in the Roseau banking market, control-ling deposits of $30.2 million, representing 15.3 percent oitotal deposits in commercial banking organizations in themarket ("market deposits").5 Border Bank is the fourtllargest bank in the market, controlling deposits o]$26.7 million, representing 13.5 percent of market deposits. On consummation, Greenbush Bank and Border Banlwould control total deposits of $56.9 million, representing28.8 percent of market deposits.

1. After the merger, G.B. Financial will change its name to BordeBancshares, Inc.

2. Asset data are as of December 31, 1996.3. State deposit data are as of June 30, 1996.4. The Roseau banking market is approximated by Roseau Count)

Minnesota. No savings associations operate in the market.t rlata arp as nf Tnnf 1 QQfi



The market, as measured by the Herfindahl-HirshmanIndex ("HHI"), is and would remain highly concentrated.6

In accordance with the BHC Act, the Board sought com-ments from the Department of Justice on the competitiveeffects of the proposal in the relevant banking market. TheDepartment of Justice has advised the Board that consum-mation of the proposal would not likely have any signifi-cantly adverse effects on competition in the Roseau bank-ing market or any relevant banking market. The FDIC alsohas not objected to the proposal.

G.B. Financial and Border Bancshares have a long his-tory of affiliation through individual shareholders, and areunder the control of the same individual shareholders.7

Based on all the facts of record, including the history ofaffiliation and the System's prior reviews, and the financialsupport provided by the common shareholders to the banksinvolved, the Board does not believe that the proposal islikely to have a significantly adverse effect on competitionor on the concentration of banking resources in the Roseaubanking market, or any other relevant banking market.

The BHC Act also requires the Board to consider thefinancial and managerial resources and future prospects ofthe companies and banks involved, the convenience andneeds of the community to be served, and certain othersupervisory factors. The Board has carefully reviewed thefactors in light of all the facts of record, including relevantsupervisory reports of examination. The Board concludesthat the financial and managerial resources and futureprospects of the institutions involved in this proposal, andconsiderations relating to the convenience and needs of thecommunities to be served, are consistent with approval, asare the other supervisory factors the Board must considerunder section 3 of the BHC Act.

Based on the foregoing and all the facts of record, theBoard has determined that the application should be, andhereby is, approved. The Board's approval of the proposalis conditioned on compliance by G.B. Financial with thecommitments made in connection with this application.The commitments and conditions relied on by the Board inreaching this decision shall be deemed to be conditionsimposed in writing by the Board in connection with its

6. The HHI would increase by 414 points to 3769. Under the revisedDepartment of Justice Merger Guidelines, 49 Federal Register 26,823(1984), a market in which the post-merger HHI is above 1800 isconsidered highly concentrated. The Department of Justice has in-formed the Board that a bank merger or acquisition generally will notbe challenged (in the absence of other factors indicating anticompeti-tive effects) unless the post-merger HHI is at least 1800 and themerger increases the HHI by more than 200 points. The JusticeDepartment has stated that the higher than normal HHI thresholds forscreening bank mergers for anticompetitive effects implicitly recog-nize the competitive effects of limited-purpose lenders and othernon-depository institutions.

7. Common shareholders own a substantial majority in eachorganization—77.4 percent of G.B. Financial and 97.3 percent ofBorder Bancshares—and both organizations have had identical boardsof directors since 1993. The directors comprise most of the commonshareholders and own approximately 70 percent of G.B. Financial andapproximately 93 percent of Border Bancshares.

findings and decision, and, as such, may be enforced inproceedings under applicable law.

The acquisition shall not be consummated before thefifteenth calendar day following the effective date of thisorder, or later than three months after the effective date ofthis order, unless such period is extended for good cause bythe Board or the Federal Reserve Bank of Minneapolis,acting pursuant to delegated authority.



JENNIFER J. JOHNSON

Deputy Secretary of the Board

Orders Issued Under Section 4 of the Bank HoldingCompany Act

BOK Financial CorporationTulsa, Oklahoma

Order Approving a Notice to Engage in CertainNonbanking Activities

BOK Financial Corporation, Tulsa, Oklahoma ("Notifi-cant"), a bank holding company within the meaning of theBank Holding Company Act ("BHC Act"), has requestedthe Board's approval under section 4(c)(8) of the BHC Act(12U.S.C. § 1843(c)(8)) and section 225.24 of Regula-tion Y (12 C.F.R.225.24) to engage de novo in the follow-ing nonbanking activities through its wholly owned subsid-iary, Alliance Securities Corporation, Tulsa, Oklahoma("Company"):

(1) Underwriting and dealing in, to a limited extent,certain municipal revenue bonds (including certain un-rated revenue bonds), 1-4 family mortgage-related secu-rities, consumer receivable-related securities, and com-mercial paper ("bank-ineligible securities") ("Tier Iunderwriting and dealing activities");(2) Acting as agent in the private placement of all typesof securities, pursuant to section 225.28(b)(7)(iii) ofRegulation Y (see 12 C.F.R. 225.28(b)(7)(iii));(3) Providing investment advisory services, pursuant tosection 225.28(b)(6) of Regulation Y (see 12 C.F.R.225.28(b)(6));(4) Underwriting and dealing in government obligationsand money market instruments in which state memberbanks may underwrite and deal under 12 U.S.C. §§335and 24(7) ("bank-eligible securities"), pursuant to sec-tion 225.28(b)(8)(i) of Regulation Y (see 12 C.F.R.225.28(b)(8)(i)); and(5) Providing securities brokerage services, pursuant tosection 225.25(b)(7)(i) of Regulation Y (see 12 C.F.R.225.25(b)(7)(i)).

Notice of the proposal, affording interested persons anopportunity to submit comments, has been published



(62 Federal Register 3699 (1997)). 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.

Notificant, with total consolidated assets of approxi-mately $4.5 billion, is the largest banking organization inOklahoma and the 94th largest banking organization in theUnited States.1 Notificant operates commercial bank sub-sidiaries in Oklahoma, Arkansas, and Texas, and engages,through its subsidiaries, in various permissible nonbankingactivities.

Prior to commencing the proposed activities, Companywill register as a broker-dealer with the Securities andExchange Commission ("SEC") under the Securities Ex-change Act of 1934 (15 U.S.C. § 78a et seq.) and willbecome a member of the National Association of Securi-ties Dealers, Inc. ("NASD"). Accordingly, Company willbe subject to the recordkeeping and reporting obligations,fiduciary standards, and other requirements of the Securi-ties Exchange Act of 1934, the SEC, and the NASD.

Activities Approved by Regulation

As noted above, Company proposes to engage in invest-ment advisory services, securities brokerage, bank-eligiblesecurities underwriting and dealing, and private placementactivities that have been determined by regulation to beclosely related to banking for purposes of section 4(c)(8) ofthe BHC Act.2 Notificant has committed that Companywill conduct the activities in accordance with the limita-tions set forth in Regulation Y and the Board's ordersrelating to these activities.3

Underwriting and Dealing in Bank-Ineligible Securities

The Board has determined that—subject to the prudentialframework of limitations established in previous decisionsto address the potential for conflicts of interests, unsoundbanking practices, or other adverse effects—the proposedactivities of underwriting and dealing in bank-ineligiblesecurities are so closely related to banking as to be a properincident thereto within the meaning of section 4(c)(8) of

1. Asset and national ranking data are as of September 30, 1996.Oklahoma ranking data are as of June 30, 1996.

2. See 12 C.RR. 225.28(b)(6), (b)(7)(ii), (b)(7)(iii), and (b)(8)(i).3. In order to address the potential conflicts of interests arising from

Company's conduct of full-service brokerage activities along withunderwriting and dealing in bank-ineligible securities, Notificant hascommitted that Company will inform its brokerage customers at thecommencement of the relationship that, as a general matter, Companymay be a principal or may be engaged in underwriting with respect to,or may purchase from an affiliate, securities for which brokerage andadvisory services are provided. In addition, at the time any brokerageorder is taken, Company will inform brokerage customers (usuallyorally) whether Company is acting as agent or principal with respectto a security. Confirmations sent to customers also will state whetherCompany is acting as agent or principal. See PNC Financial Corpora-tion, 75 Federal Reserve Bulletin 396 (1989).

the BHC Act.4 Notificant has committed that Compan>will conduct these underwriting and dealing activities us-ing the same methods and procedures and subject to thesame prudential limitations established by the Board in theSection 20 Orders.

Notificant proposes that Company would underwrite anodeal in unrated municipal revenue bonds. The Board previ-ously has authorized section 20 companies engaged in TieiI underwriting and dealing activities to engage, to a limitedextent, in underwriting and dealing in unrated municipalrevenue bonds.5 In past cases, the Board approved compa-nies with Tier I underwriting powers to underwrite munici-pal revenue bonds in which a single issue of unrated bondswould not exceed $7.5 million.6 Notificant proposes thaiCompany be permitted to underwrite unrated municipalrevenue bonds with no single issue dollar limit. Bankholding companies with broader debt and equity underwrit-ing powers may underwrite unrated municipal bond issuesof any size. Based on the Board's experience in supervis-ing unrated municipal revenue bond underwriting activi-ties, and on the basis of the Board's assessment of thecredit evaluation process that Company would use to re-view the unrated municipal revenue bonds, the Boardconcludes that Notificant's proposal to underwrite munici-pal revenue bonds without a single issue limit does noiraise significant potential adverse effects.

The Board has determined that the conduct of the securi-ties underwriting and dealing activities proposed by Notifi-cant is consistent with section 20 of the Glass-Steagall Aci(12 U.S.C. § 377), provided that Company engages only irlimited bank-ineligible underwriting and dealing activi-ties.7 Effective March 6, 1997, the Board increased frorr10 percent to 25 percent the amount of total revenue that csection 20 subsidiary may derive from committed thaiCompany will conduct its bank-ineligible securities under-writing and dealing activities subject to the Board's reve-nue test.8

4. See Citicorp, 73 Federal Reserve Bulletin 473 (1987) ("Citicorp"), aff'd sub nom. Securities Industry Ass n v. Board of Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir.), certdenied, 486 U.S. 1059 (1988), as modified by Order ApprovingModifications to Section 20 Orders, 75 Federal Reserve Bulletin 75(1989), as modified by Review of Restriction on Director, Officer amEmployee Interlocks, Cross-Marketing Activities, and the Purchaseand Sale of Financial Assets Between a Section 20 Subsidiary and aiAffiliated Bank or Thrift, 61 Federal Register 57,679 (1996) (collectively, "Section 20 Orders").

5. See Letter Interpreting Section 20 Orders, 81 Federal Reserv*Bulletin 198 (1995).

6. See id.1. See Section 20 Orders. Compliance with the revenue limitatioi

shall be calculated in accordance with the method stated in the Section 20 Orders, as modified by the Order Approving Modifications Uthe Section 20 Orders, 79 Federal Reserve Bulletin 226 (1993)and the Supplement to Order Approving Modifications to Section 20 Orders, 79 Federal Reserve Bulletin 360 (1993).

8. Company also may engage in activities that are necessary incidents to the proposed underwriting and dealing activities, provideithat they are treated as part of the bank-ineligible securities activitiesUnless Company receives specific approval under section 4(c)(8) cthe BHC Act to conduct the activities independently, any revenue



Other Considerations

In order to approve this notice, the Board also must con-sider whether the 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 efiFects,such as undue concentration of resources, decreased orunfair competition, conflicts of interests, or unsound bank-ing practices."9 As part of its evaluation of these factors,the Board considers the financial and managerial resourcesof the notificant and its subsidiaries and the eifect thetransaction would have on such resources.10 Based on allthe facts of record, the Board concludes that financial andmanagerial considerations are consistent with approval ofthe notice.

As noted above, Notificant has committed that Companywill conduct its bank-ineligible securities underwriting anddealing activities in accordance with the prudential frame-work established by the Board's Section 20 Orders. Underthe framework and conditions established in this order andthe Section 20 Orders, the Board concludes that Compa-ny's proposed conduct of limited bank-ineligible securitiesunderwriting and dealing activities is not likely to result insignificantly adverse effects, such as undue concentrationof resources, decreased or unfair competition, conflicts ofinterests, or unsound banking practices. Similarly, theBoard finds no evidence that Company's private placementand other activities would likely result in any significantlyadverse effects.

The Board expects, moreover, that the de novo entry ofCompany into the market for the proposed bank-ineligibleunderwriting and dealing services would provide addedconvenience to Notificant's customers, lead to improvedmethods of meeting customer financing needs, and in-crease the level of competition among existing providers ofthese services. The Board also expects that Company'sperformance of private placement, financial advisory, andother activities, in which Notificant's banking subsidiariescurrently engage to a limited extent, will lead to greaterefficiencies within the Notificant's corporate system andthereby permit Notificant to provide better services to itscustomers. Accordingly, the Board has determined that theperformance of the proposed activities by Company canreasonably be expected to produce public benefits thatoutweigh possible adverse effects under the proper incidentto banking standard of section 4(c)(8) of the BHC Act.

Based on all the facts of record, and subject to thecommitments made by Notificant, as well as the terms andconditions set forth in this order and in the Board ordersnoted above, the Board has determined that the noticeshould be, and hereby is, approved. Approval of the pro-posal is specifically conditioned on compliance by Notifi-cant and Company with the commitments made in connec-

from the incidental activities must be counted as ineligible revenuessubject to the revenue limitation.

9. 12U.S.C. § 1843(c)(8).10. See 12 C.F.R. 225.26.

tion with the notice and the conditions referenced in thisorder and the above-cited Board regulations and 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) (12 C.F.R. 225.7 and225.25(c)), and to the Board's authority to require modifi-cation or termination of the activities of a bank holdingcompany or any of its subsidiaries as the Board findsnecessary to assure compliance with, and to prevent eva-sion of, the provisions of the BHC Act and the Board'sregulations and orders issued thereunder. In approving theproposal, the Board has relied on all the facts of record andall the representations and commitments made by Notifi-cant. The commitments and conditions shall be deemed tobe conditions imposed in writing by the Board in connec-tion with its findings and decisions, and may be enforced inproceedings 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 Kansas City, acting pursuant todelegated authority.



JENNIFER J. JOHNSONDeputy Secretary of the Board

Crestar Financial CorporationRichmond, Virginia

Order Approving a Notice to Engage in CertainNonbanking Activities

Crestar Financial Corporation, Richmond, Virginia ("Ap-plicant"), a bank holding company within the meaning ofthe Bank Holding Company ("BHC") Act, has requestedthe Board's approval under section 4(c)(8) of the BHC Act(12 U.S.C. § 1843(c)(8)) and section 225.23 of the Board'sRegulation Y (12 C.F.R. 225.23) to engage de novo in thefollowing nonbanking activities through its wholly ownedsubsidiary, Crestar Securities Corporation, Richmond, Vir-ginia ("Company"):

(1) Underwriting and dealing in, to a limited extent,certain municipal revenue bonds (including certain un-rated and "private ownership" municipal revenuebonds), 1-4 family mortgage-related securities, con-sumer receivable-related securities, and commercial pa-per (collectively, "bank-ineligible securities"); and(2) Acting as agent in the private placement of all typesof securities, and buying and selling all types of securi-ties on the order of customers as a "riskless principal."

Notice of the proposal, affording interested persons anopportunity to submit comments, has been published(62 Federal Register 7784 (1997)). The time for filing



comments 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.

Applicant, with total consolidated assets of approxi-mately $18.8 billion, is the 43rd largest banking organiza-tion in the United States.1 Applicant owns one commercialbank subsidiary that operates in Virginia, Maryland, andthe District of Columbia and engages, through other sub-sidiaries, in various permissible nonbanking activities.Company is, and will continue to be, registered as a broker-dealer with the Securities and Exchange Commission("SEC") under the Securities Exchange Act of 1934(15 U.S.C. § 78a et seq.) and a member of the NationalAssociation of Securities Dealers, Inc. ("NASD").2 Ac-cordingly, Company is, and will continue to be, subject tothe recordkeeping and reporting obligations, fiduciary stan-dards, and other requirements of the Securities ExchangeAct of 1934, the SEC, and the NASD.

The Board also has previously concluded that underwrit-ing and dealing in "private ownership" industrial develop-ment bonds that qualify as "exempt facility bonds" undersection 142 of the Internal Revenue Code ("Code")5 is apermissible activity under section 4(c)(8) of the BHC Act.6

Company will conduct this activity according to the pru-dential limitations set forth in the Section 20 Orders.7

In addition, the Board has determined that the conduct ofthe securities underwriting and dealing activities proposedby Applicant is consistent with section 20 of the Glass-Steagall Act (12 U.S.C. § 377), provided that the companyengaged in the underwriting and dealing activities derivesno more than 25 percent of its total gross revenues fromunderwriting and dealing in bank-ineligible securities overany two-year period.8 Applicant has committed that Com-pany will conduct its bank-ineligible securities underwrit-

Underwriting and Dealing in Bank-Ineligible Securities

The Board previously has determined that, subject to theprudential framework of limitations established in previousdecisions to address the potential for conflicts of interests,unsound banking practices, or other adverse effects ("sec-tion 20 firewalls"), the proposed activities of underwritingand dealing in bank-ineligible securities are so closelyrelated to banking as to be a proper incident thereto withinthe meaning of section 4(c)(8) of the BHC Act.3 Applicanthas committed that Company will conduct these underwrit-ing and dealing activities using the same methods andprocedures and subject to the same prudential limitationsestablished by the Board in the Section 20 Orders.4

1. Asset and ranking data are as of December 31, 1996.2. Company currently engages in a variety of permissible nonbank-

ing activities including lending, advisory, leasing, and securities bro-kerage activities and underwriting and dealing in obligations of theUnited States, general obligations of states and their political subdivi-sions, and other obligations that state member banks may underwriteand deal in under 12 U.S.C. §§ 335 and 24(7). See 12 C.F.R.225.25(b)(l), (4), (5), (15), and (16). Company also engages ininsurance agency activities pursuant to section 225.25(b)(8)(vii) of theBoard's Regulation Y ("Exemption G"). Exemption G is one ofseven specific exemptions enacted by Title VI of the Garn-St. Ger-main Depository Institutions Act of 1982 to that Act's general prohibi-tion on insurance activities by bank holding companies. The exemp-tion authorizes those bank holding companies that engaged ininsurance agency activities prior to 1971 with prior Board approval toengage or control a company engaged in insurance agency activities.

3. See Citicorp et al., 73 Federal Reserve Bulletin 473 (1987), aff'dsub nom. Securities Industry Ass'n v. Board of Governors of theFederal Reserve System, 839 F.2d 47 (2d Cir.), cert, denied, 486 U.S.1059 (1988), as modified by Review of Restrictions on Director,Officer and Employee Interlocks, Cross-Marketing Activities, and thePurchase and Sale of Financial Assets Between a Section 20 Subsid-iai"y and an Affiliated Bank or Thrift, 61 Federal Register 57,679(1996) (collectively, "Section 20 Orders").

4. To address potential conflicts of interests arising from Company'sconduct of full-service brokerage activities together with underwritingand dealing in bank-ineligible securities, Applicant has committedthat Company will inform its full-service brokerage customers at thecommencement of the relationship that, as a general matter, Company

may be a principal or may be engaged in underwriting with respect to,or may purchase from an affiliate, those securities for which brokerageand advisory services are provided. In addition, at the time anybrokerage order is taken, the customer will be informed (usuallyorally) whether Company is acting as agent or principal with respectto a security. Confirmations sent to customers also will state whetherCompany is acting as agent or principal. See PNC Financial Corp.. 75Federal Reserve Bulletin 396 (1989).

5. See 26 U.S.C. § 142.6. See The Bank of New York Company, Inc., 82 Federal Reserve

Bulletin 748 (1996) ("Bank of New York"); Bank South Corporation,81 Federal Reserve Bulletin 1116 (1995). In addition to the privateownership bonds discussed in these previous orders, Applicant pro-poses that Company be permitted to engage to a limited extent inunderwriting and dealing in private ownership bonds that are issuedfor the following traditional government services: qualified residentialrental projects, qualified hazardous waste facilities, and environmentalenhancements for existing hydroelectric generating facilities, all ofwhich qualify as "exempt facility bonds" under the Code. Exemptfacility bonds are issued to finance the acquisition or construction offacilities that provide certain types of traditional government services.

7. In connection with its proposal to underwrite and deal in unratedmunicipal revenue bonds, including unrated public ownership and"private ownership" industrial development bonds, Applicant hascommitted that Company will not underwrite any unrated municipalrevenue bonds until Company conducts an independent credit reviewto determine that the securities are of investment grade quality andthat no single issue of unrated municipal revenue bonds, includingunrated public ownership and "private ownership" industrial develop-ment bonds, underwritten by Company would exceed $7.5 million.Applicant also has provided other commitments previously reliedupon by the Board in authorizing a section 20 company to engage to alimited extent in underwriting and dealing in unrated municipal reve-nue bonds.

8. See Section 20 Orders. Effective March 6, 1997, the Boardincreased from 10 percent to 25 percent the proportion of totalrevenue that a section 20 subsidiary may derive from underwritingand dealing in bank-ineligible securities. See Revenue Limit on Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies En-gaged in Underwriting and Dealing in Securities, 61 Federal Register68,750 (1996). Compliance with the revenue limitation shall be calcu-lated in accordance with the method stated in the Section 20 Orders,as modified by the Order Approving Modifications to Section 20Orders, 75 Federal Reserve Bulletin 751 (1989), and 10 PercentRevenue Limit on Bank-Ineligible Activities of Subsidiaries of BankHolding Companies Engaged in Underwriting and Dealing in Securi-ties, 61 Federal Register 48,953 (1996) (collectively, "ModificationOrders").



ing and dealing activities subject to the Board's revenuetest.9

Private Placement and "Riskless Principal" Activities

Private placement involves the placement of new issues ofsecurities with a limited number of sophisticated purchas-ers in a nonpublic offering. A financial intermediary in aprivate placement transaction acts solely as an agent of theissuer in soliciting purchasers and does not purchase thesecurities and attempt to resell them. Securities that areprivately placed are not subject to the registration require-ments of the Securities Act of 1933 and are offered only tofinancially sophisticated institutions and individuals andnot to the public. Company will not privately place regis-tered securities and will only place securities with custom-ers that qualify as accredited investors.

"Riskless principal" is the term used in the securitiesbusiness to refer to a transaction in which a broker-dealer,after receiving an order to buy (or sell) a security for acustomer, purchases (or sells) the security for its ownaccount to offset a contemporaneous sale to (or purchasefrom) the customer.10 A broker-dealer acting as a risklessprincipal is not obligated to enter into a transaction with itscustomer until after the broker-dealer executes the offset-ting transaction for its own account. Riskless principaltransactions are understood in the industry to include onlytransactions in the secondary market. Thus, Companywould not act as a riskless principal in selling bank-ineligible securities at the order of a customer that is theissuer of the securities to be sold, or in any transactionwhere Company has a contractual agreement to place thesecurities as agent of the issuer. Company also would notact as a riskless principal in any transaction involving abank-ineligible security for which it or an affiliate makes amarket.

The Board has determined that, subject to the limitationsestablished by the Board in prior orders, the proposedprivate placement and riskless principal activities are soclosely related to banking as to be a proper incident theretowithin the meaning of section 4(c)(8) of the BHC Act.11

The Board also has determined that acting as agent in theprivate placement of securities, and purchasing and sellingsecurities on the order of investors as a riskless principal,do not constitute underwriting and dealing in securities for

9. Company also may engage in activities that are necessary inci-dents to the proposed underwriting and dealing activities. UnlessCompany receives specific approval under section 4(c)(8) of the BHCAct to conduct the activities independently, any revenues from theincidental activities must be counted as ineligible revenues subject tothe Board's revenue limitation.

10. See SEC Rule 10b-10(a)(8)(i) (17 C.F.R. 240.10b-10(a)(8)(i)).The Board notes that Company, as a registered broker-dealer, mustconduct its riskless principal activities in accordance with the cus-tomer disclosure and other requirements of federal securities laws andregulations.

11. See J.P. Morgan & Company Incorporated, 76 Federal ReserveBulletin 26 (1990) ("7.P. Morgan"); Bankers Trust New York Corpo-ration, 75 Federal Reserve Bulletin 829 (1989) {"Bankers Trust").

purposes of section 20 of the Glass-Steagall Act, and,therefore, that revenue derived from these activities is notsubject to the revenue limitation on bank-ineligible securi-ties underwriting and dealing activities.12

Applicant has committed that Company will conduct itsprivate placement activities using the same methods andprocedures and subject to the same prudential limitationsas those established by the Board in Bankers Trust and J.P.Morgan, including the comprehensive framework of re-strictions imposed by the Board in connection with under-writing and dealing in bank-ineligible securities, whichwere designed to avoid potential conflicts of interests,unsound banking practices, and other adverse effects.13

Applicant also has committed that Company will conductits riskless principal activities subject to the limitationspreviously established by the Board.14 Among the limita-tions discussed more fully in Bank of New York and theRiskless Principal Order, Applicant has committed thatCompany will not act as riskless principal for registeredinvestment company securities or for any securities ofinvestment companies that are advised by Applicant or anyof its affiliates. Also, neither Company nor its affiliates willhold themselves out as making a market in the bank-ineligible securities that Company buys and sells as risk-less principal, or enter quotes for specific bank-ineligiblesecurities in any dealer quotation system in connectionwith Company's riskless principal transactions, except thatCompany and its affiliates may enter bid or ask quotations,or publish "offering wanted" or "bid wanted" notices ontrading systems other than NASDAQ or an exchange, ifCompany or an affiliate does not enter price quotations ondifferent sides of the market for a particular security fortwo business days.15


In order to approve this notice, the Board also must deter-mine that the proposed activities are a proper incident tobanking, that is that the proposal "can reasonably beexpected to produce benefits to the public, such as greaterconvenience, increased competition, or gains in efficiency,that outweigh possible adverse effects, such as undue con-centration of resources, decreased or unfair competition,

12. See Bankers Trust.13. Among the prudential limitations discussed more fully in Bank-

ers Trust and J.P. Morgan are that Company will not privately placeopen-end investment company securities or securities of investmentcompanies that are advised by Applicant or any of its affiliates. Inaddition, Company will make no general solicitation or general adver-tising for securities it places.

14. See Bank of New York; Order Revising the Limitations Applica-ble to Riskless Principal Activities, 82 Federal Reserve Bulletin 759(1996) {"Riskless Principal Order").

15. Effective April 21, 1997, the proposed private placement andriskless principal activities will be included in the "laundry list" ofnonbanking activities permissible for bank holding companies that isset forth in Regulation Y. See 62 Federal Register 9290 (1997) (to becodified at 12 C.F.R. 225.28(b)(7)(ii) and (hi)). Accordingly, from andafter that date, Company may engage in such activities subject only tothose conditions set forth in Regulation Y, as amended.



conflicts of interests, or unsound banking practices."16 Aspart of the Board's evaluation of these factors, the Boardconsiders the financial and managerial resources of thenotificant and its subsidiaries and the effect the transactionwould have on such resources.17 The Board has reviewedthe capitalization of Applicant and Company in accordancewith the standards set forth in the Section 20 Orders andfinds the capitalization of each to be consistent with ap-proval. The determination of the capitalization of Com-pany is based on all the facts of record, including Appli-cant's projections of the volume of Company'sunderwriting and dealing activities in bank-ineligible secu-rities. Based on all the facts of record, the Board hasconcluded that financial and managerial considerations areconsistent with approval of the notice.

As noted above, Applicant has committed that Companywill conduct its bank-ineligible securities underwriting anddealing activities in accordance with the prudential frame-work established by the Board's Section 20 Orders. TheBoard has concluded that, under the framework and condi-tions established in this order and prior orders, Company'sconduct of the proposed limited securities underwritingand dealing, private placement, and riskless principal activ-ities is not likely to result in significantly adverse effects,such as undue concentration of resources, decreased orunfair competition, conflicts of interests, or unsound bank-ing practices. The Board expects, moreover, that thede novo entry of Company into the market for the proposedservices would provide added convenience to Applicant'scustomers, would lead to improved methods of meeting

, customer financing needs, and would increase the level ofcompetition among providers of these services. The Boardhas determined, therefore, that the performance of theproposed activities by Company can reasonably be ex-pected to produce public benefits that outweigh possibleadverse effects under the proper incident to banking stan-dard of section 4(c)(8) of the BHC Act.

Accordingly, and for the reasons set forth in this orderand in the Section 20 Orders, the Board has concluded thatApplicant's proposal to engage in the proposed activities isconsistent with the Glass-Steagall Act, and that the pro-posed activities are so closely related to banking as to beproper incidents thereto within the meaning of sec-tion 4(c)(8) of the BHC Act, provided that Applicant limitsCompany's activities as specified in this order, the Sec-tion 20 Orders (as modified by the Modification Orders),and the other orders referenced herein.

Based on all the facts of record, and subject to thecommitments made by Applicant, as well as the terms andconditions set forth in this order and in the Board ordersnoted above, the Board has determined that the noticeshould be, and hereby is, approved. The Board's approvalof the proposal extends only to the activities conductedwithin the limitations of those orders and this order, includ-

16. 12U.S.C. § 1843(c)(8).17. See 12C.F.R. 225.24. See also The Fuji Bank, Limited,

75 Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG,

ing the Board's reservation of authority to establish addi-tional limitations to ensure that Company's activities areconsistent with safety and soundness, avoidance of con-flicts of interests, and other relevant considerations underthe BHC Act. Underwriting and dealing in any mannerother than as approved in this order and the Section 20Orders, as modified by the Modification Orders, is notauthorized for Company.

The Board's determination also is subject to all the termsand conditions set forth in Regulation Y, including those insections 225.7 and 225.23(g) of Regulation Y (12 C.F.R.225.7 and 225.23(g)), 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 complianceby Applicant and Company with all the commitmentsmade in connection with the notice, including the commit-ments referenced in this order and the Board's regulationsand orders noted above. These commitments and condi-tions shall be deemed to be conditions imposed in writingby the Board in connection with its findings and decision,and, as such, may be enforced in proceedings under appli-cable 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 Richmond, acting pursuant todelegated authority.




Shoreline Financial CorporationBenton Harbor, Michigan

Order Approving the Acquisition of a SavingsAssociation

Shoreline Financial Corporation, Benton Harbor, Michigar("Shoreline"), a bank holding company within the mean-ing of the Bank Holding Company Act ("BHC Act"), ha*requested the Board's approval under section 4(c)(8) of theBHC Act (12U.S.C. § 1843(c)(8)) and section 225.24 o:the Board's Regulation Y (12 C.F.R. 225.24) to acquire:

(1) SJS Bancorp, Inc., St. Joseph, Michigan, and it:wholly owned subsidiary, SJS Federal Savings Banl("SJS Bank"), and thereby engage in operating a savings association; and(2) SJS Financial Corporation, a nonbanking subsidiaryof SJS Bank, and thereby engage in the reinsurance o



the outstanding balance due on mortgages made by SJSBank on the death of the mortgagor ("credit-related lifeinsurance").

Notice of the proposal, aifording interested persons anopportunity to submit comments, has been published(62 Federal Register 8960 (1997)). 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(c)(8) of the BHC Act.

The Board previously has determined by regulation thatoperating a savings association and acting as a principal forcredit-related life insurance are activities closely related tobanking for purposes of section 4(c)(8) of the BHC Act.1

The Board requires savings associations acquired by bankholding companies to conform their direct and indirectactivities to those permissible for bank holding companiesunder section 4 of the BHC Act and Regulation Y. Shore-line has indicated that SJS Bank does not engage in anyactivities that are not permissible for bank holding compa-nies under the BHC Act.2

Shoreline is the 19th largest depository institution inMichigan, controlling deposits of $605.9 million, repre-senting less than 1 percent of total deposits in depositoryinstitutions in the state.3 SJS Bancorp is the 65th largestdepository institution in the state, controlling deposits of$110.2 million. On consummation of the proposal, Shore-line would become the 15th largest depository institutionin Michigan, controlling total deposits of $716.1 million,representing less than 1 percent of the total deposits indepository institutions in the state.

Competitive Considerations

Under section 4(c)(8) of the BHC Act, the Board is re-quired to consider whether a proposal is likely to result inpublic benefits that outweigh any significantly adverseeffects, such as undue concentration of resources, de-creased or unfair competition, conflicts of interests, orunsound banking practices. As part of this consideration,the Board weighs the effects of the proposal on competitionin the relevant markets. Shoreline's bank subsidiary, Shore-line Bank, Benton Harbor, Michigan ("Shoreline Bank"),and SJS Bank compete directly in the Benton Harbor-St. Joseph banking market ("Benton Harbor banking mar-ket").4

1. 12 C.F.R. 225.28(b)(4)(ii) and (b)(ll).2. Shoreline would conduct thrift insurance activity in accordance

with the Board's regulations.3. Deposit data are as of June 30, 1996. In this context, the term

depository institutions includes commercial banks, savings banks, andsavings associations.

4. The Benton Harbor banking market is approximated by VanBuren County, Michigan, excluding the western townships of Bloom-ingdale, Pine Grove, Waverly, Almena, Paw Paw, Antwerp, Decatur,and Porter; plus the northwestern portion of Berrien County, Michi-gan, including the townships of Watervliet, Coloma, Hagar, Bain-bridge, Benton, St. Joseph, Pipestone, Sodus, Royalton, Lincoln,Baroda, Lake and Chikaming.

Shoreline Bank is the largest depository institution in theBenton Harbor banking market, controlling deposits ofapproximately $388.7 million, representing 30.5 percent oftotal deposits in depository institutions in the market("market deposits").5 SJS Bank is the fifth largest deposi-tory institution in the market, controlling deposits of ap-proximately $110.2 million, representing 4.3 percent ofmarket deposits. On consummation of this proposal, Shore-line would control deposits of approximately $498.9 mil-lion, representing 37.5 percent of market deposits. Marketconcentration, as measured by the Herfindahl-HirschmanIndex ("HHI"), would increase by 376 points to 2348.

The market indexes in this case exceed the levels sug-gested in the DOJ Guidelines for identifying cases thatordinarily would not have a significantly adverse effect oncompetition.6 As the Board has previously indicated, HHIlevels are only guidelines that are used by the Board, theDepartment of Justice, and other banking agencies to helpidentify cases in which a more detailed competitive analy-sis is appropriate to assure that the proposal would nothave a significantly adverse effect on competition in anyrelevant market. A proposal that fails to pass the HHImarket screen may nonetheless be approved because otherinformation may indicate that the proposal would not havea significantly adverse effect on competition.

A number of considerations indicate that the marketconcentration as measured by the HHI tends to overstatethe competitive effects of this proposal. After consumma-tion of the proposal, for example, twelve depository institu-tions would remain in the market. Six of these competitorsare multi-billion dollar banking organizations. In addition,

5. Market share data are as of June 30, 1996, and take into accountproposals approved by the Board through April 15, 1997. The data arebased on calculations in which the deposits of thrift institutions areincluded at 50 percent. The Board previously has indicated that thriftinstitutions have become, or have the potential to become, significantcompetitors of commercial banks. See Midwest Financial Group, 75Federal Reserve Bulletin 386 (1989); National City Corporation, 70Federal Reserve Bulletin 743 (1984). Thus, the Board has regularlyincluded thrift deposits in the calculation of market share on a 50-percent weighted basis. See, e.g., First Hawaiian, Inc., 11 FederalReserve Bulletin 52 (1991). Because the deposits of SJS Bank wouldbe acquired by a commercial banking organization under the proposal,those deposits are included at 100 percent in the calculation ofShoreline's pro forma market share. See Norwest Corporation, 78Federal Reserve Bulletin 452 (1992). First Banks, Inc., Inc., 76Federal Reserve Bulletin 669, 670 n.9.(1990).

6. Under the revised Department of Justice Merger Guidelines, 49Federal Register 26,823 (June 29, 1984), a market in which thepost-merger HHI is greater than 1800 is considered highly concen-trated. The Justice Department has informed the Board that a bankmerger or acquisition generally will not be challenged (in the absenceof other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by morethan 200 points. The Justice Department has stated that the higherthan normal threshold for an increase in the HHI when screening bankmergers and acquisitions for anticompetitive effects implicitly recog-nizes the competitive effects of limited-purpose lenders and othernon-depository financial entities.



three of the remaining competitors would each controlsignificant percentages of market deposits.7

Several factors also indicate that the Benton Harborbanking market is attractive for entry. Five new entries intothe market have occurred within the last 18 months. Threeof the new entries (two by acquisition and one de novo)were for the purpose of entering the market and were notincidental to an acquisition in another market. In addition,the Benton Harbor banking market comprises parts of twoMichigan Metropolitan Statistical Areas ("MSA") thathave characteristics that make them attractive for entry topotential competitors.8 From 1990 to 1994, the populationin the Benton Harbor banking market increased at a higherrate than the statewide rate, and the percentage increase inthe amount of deposits in the Benton Harbor bankingmarket during the same period was substantially higherthan the percentage increase in market deposits for MSAand non-MSA banking markets in the state.9 Moreover,legal barriers to entry into banking markets are low inMichigan.10

The Board also has considered the competitive effect ofcredit unions operating in the Benton Harbor bankingmarket. Seven credit unions control approximately14.3 percent of the market deposits and offer a full range ofretail banking products. The largest credit union, whichcontrols approximately $129 million in deposits, represent-ing approximately 8 percent of market deposits, would bethe fourth largest depository institution in the market.

The Department of Justice has reviewed the proposaland advised the Board that consummation of the proposalwould not have a significantly adverse effect on competi-tion in the Benton Harbor banking market or any otherrelevant banking market. Based on these and all the otherfacts of record, the Board concludes that consummation ofthis proposal is not likely to have a significantly adverseeffect on competition or on the concentration of banking

7. Three competitors would control 26.4 percent, 14.1 percent, and9.6 percent of the market deposits.

8. These two MS As are the Berrien County MSA and the VanBuren County MSA. The per capita income of residents in the BerrienCounty MSA has increased more than the average increase in otherMichigan MS As. The Van Buren County MSA has experienced anabove average increase in deposits, population, and profitability forbanking organizations as compared to other Michigan MSAs.

9. The sources for the data on this banking market, all per capitaincome, and other Michigan information are as follows, respectively:Department of Commerce, US Bureau of the Census, Press ReleaseCB95-179, Population Distribution and Population EstimatesBranches (October 2, 1995); Bureau of Economic Analysis, Survey ofCurrent Business, "Local Area Personal Income", April 1994 andJune 1996; and Department of Commerce, US Bureau of the Census,Press Release CB96-224, Population Estimates Program, PopulationDivision (December 30, 1996).

10. Michigan permits statewide de novo branching and permits theacquisition of both existing branches and de novo branches by out-of-state banks on a reciprocal basis. Mich. Stat. Ann. § 23.710 (122),(171) (Law Co-op. Supp. May 1996).

resources in the Benton Harbor banking market, or anyother relevant banking market.11


The Board also concludes that consummation of the pro-posal would result in a broader financial network throughwhich Shoreline could serve its customers and SJS Bankcustomers. SJS Bank customers would have access toincreased services, including trust services, basic checkingaccounts for senior citizens, and extended banking hours.In addition, Shoreline's commercial lending services andhigher lending limits would become available to customersof SJS Bank. The Board also concludes that the financialand managerial resources of Shoreline and SJS Bancorpare consistent with approval of the proposal.

In light of all the facts of record, the Board finds thatconsummation of the proposal is not likely to result in anysignificantly adverse effects, such as undue concentrationof resources, decreased or unfair competition, conflicts ofinterests, or unsound banking practices that would out-weigh the public benefits of the proposal. Accordingly, theBoard has determined that the Shoreline proposal canreasonably be expected to produce public benefits thatoutweigh possible adverse effects under the proper incidentto banking standard of section 4(c)(8) of the BHC Act.

Based on the foregoing and all the facts of record, theBoard has determined that the notice should be, and herebyis approved. The Board's approval of the notice is specifi-cally conditioned on compliance by Shoreline and SJSBancorp with commitments made in connection with thisnotice. The Board's determination also is subject to all theterms and conditions set forth in Regulation Y, includingthose in sections 225.7 and 225.25(c) (12 C.RR. 225.7 and225.25(c)), and to the Board's authority to require suchmodification or termination of the activities of a bankholding company or any of its subsidiaries as the Boardfinds necessary to. ensure compliance with, or to preventevasion of, the provisions of the BHC Act and the Board'sregulations and orders issued thereunder. For purposes ofthis transaction, the commitments and conditions relied onby the Board in reaching this decision are deemed to beconditions imposed in writing by the Board in connectionwith its findings and decision, and as such may be enforcedin proceedings under applicable law.

This proposal shall not be consummated later than threemonths after the effective date of this order, unless suchperiod is extended for good cause by the Board or by theFederal Reserve Bank of Chicago, acting pursuant to dele-gated authority.


11. The Board notes that the market for mortgage life insurance isnational in scope and that there are numerous competitors in themarket.





Stichting Prioriteit ABN AMRO HoldingAmsterdam, The Netherlands

Stichting Administratiekantoor ABN AMROHolding

Amsterdam, The Netherlands

ABN AMRO Holding N.V.Amsterdam, The Netherlands

ABN AMRO Bank N.V.Amsterdam, The Netherlands

ABN AMRO North America, Inc.Chicago, Illinois

Order Approving the Acquisition of a Thrift HoldingCompany

Stichting Prioriteit ABN AMRO Holding, Stichting Ad-ministratiekantoor ABN AMRO Holding, ABN AMROHolding N.V., and ABN AMRO Bank N.V., all of Amster-dam, The Netherlands, and ABN AMRO North America,Inc., Chicago, Illinois (collectively, the "Notificants"),bank holding companies within the meaning of the BankHolding Company Act ("BHC Act"), have requested theBoard's approval under section 4(c)(8) of the BHC Act(12 U.S.C. § 1843(c)(8)) and section 225.23 of the Board'sRegulation Y (12 C.F.R. 225.23) to acquire Standard Fed-eral Bancorporation, Inc. ("Standard Federal"), and Stan-dard Federal's wholly owned subsidiaries, Standard Fed-eral Bank and Standard Brokerage Services, Inc., all ofTroy, Michigan, and thereby engage in operating a savingsassociation and providing securities brokerage servicespursuant to sections 225.25(b)(9) and 225.25(b)(15) of theBoard's Regulation Y (12 C.F.R. 225.25(b)(9) and225.25(b)(15)).1

Notice of the proposal, affording interested persons anopportunity to submit comments, has been published(62 Federal Register 7231 (1997)). 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.

Notificants, with total consolidated assets of $344.4 bil-lion,2 is the largest commercial banking organization inThe Netherlands, and controls seven depository institutions

in Illinois and one commercial bank in New York. ABNAMRO Bank N.V. operates branches in Boston, Massachu-setts; Chicago, Illinois; New York, New York; Pittsburgh,Pennsylvania; and Seattle, Washington; and agencies inAtlanta, Georgia; Miami, Florida; Houston, Texas; and LosAngeles and San Francisco, California. Notificants alsoengage in a number of nonbanking activities in the UnitedStates.

Standard Federal is the fifth largest depository institutionin Michigan, controlling approximately $8.3 billion in de-posits, representing 8.2 percent of total deposits in deposi-tory institutions in the state.3 Notificants and StandardFederal compete directly in the Chicago, Illinois, bankingmarket and consummation of the proposal would not ex-ceed the Department of Justice's merger guidelines. Ac-cordingly, the Board has determined that consummation ofthe proposal would not have a significantly adverse effecton competition or the concentration of banking resourcesin any relevant banking market.

The Board has determined that the operation of a savingsassociation by a bank holding company is closely related tobanking for purposes of section 4(c)(8) of the BHC Act.4

In making this determination, the Board requires that sav-ings associations acquired by bank holding companiesconform their direct and indirect activities to those permis-sible for bank holding companies under section 4(c)(8) ofthe BHC Act. Notificants have committed to conform allactivities of Standard Federal and its subsidiaries to thosepermissible for bank holding companies under sec-tion 4(c)(8) of the BHC Act and Regulation Y.5 The Boardalso has determined that the provision of securities broker-age services is closely related to banking for purposes ofsection 4(c)(8) of the BHC Act.6

In order to approve the proposal, the Board also mustdetermine that the proposed activities are a proper incidentto banking, that is, that the proposal "can reasonably beexpected to produce benefits to the public . . . that out-weigh possible adverse effects, such as undue concentra-tion of resources, decreased or unfair competition, conflictsof interests, or unsound banking practices."7 As part of itsreview of these factors, the Board considers the financial

1. The Notificants also have acquired an option to purchase up to19.9 percent of the voting shares of Standard Federal under certaincircumstances. This option would terminate on consummation of theproposal.

2. Asset data are as of December 31, 1996, and use exchange ratesthen in effect.

3. Deposit data are as of June 30, 1996. In this context, depositoryinstitutions include banks, savings and loan associations, and savingsbanks.

4. 12 C.F.R. 225.25(b)(9).5. Notificants have committed that all impermissible real estate

activities will be divested or terminated within two years of consum-mation of the proposal, that no new impermissible projects or invest-ments will be undertaken during this period, and that capital adequacyguidelines will be met, excluding impermissible real estate invest-ments. Notificants also have committed that all impermissible insur-ance activities conducted by Standard Federal or its subsidiaries willcease within six months of consummation of the proposal, and Notifi-cants have indicated that the activities will be divested to an unrelatedthird party or transferred to an affiliated national bank that is autho-rized by the Office of the Comptroller of the Currency to engage in theactivities. In addition, Notificants have committed that all impermissi-ble securities activities will cease on or before consummation of theproposal.

6. 12 C.F.R. 225.25(b)(15).7. 12 U.S.C. § 1843(c)(8).



and managerial resources of the notificant and its subsidiar-ies and the effect the proposal would have on such resourc-es.8

The Board notes that Notificants' capital ratios satisfyapplicable risk-based capital standards under the BasleAccord and are considered equivalent to the capital levelsthat would be required of a U.S. banking organization. TheBoard also has considered recent financial statements andother available information, including pro forma financialstatements and reports of examination, and determined thatthe proposed transaction would not have a significant effecton the financial resources of Notificants and their subsidiar-ies.

In addition, the Board has considered the managerialresources of Notificants in light of all the facts of record,including information from several commenters who op-pose the proposal ("Protestants").9 Protestants allege thatcertain underwriting activities of the Foreign Parent out-side the United States raise managerial concerns. Theseactivities relate to the involvement of the Foreign Parentand an affiliate as underwriter for bonds issued by a truck-ing company in The Netherlands (the "Netherlands bondunderwriting") and as trustee for the bondholders. Protes-tants also contend that the Foreign Parent and its affiliatewere involved in conflicts of interests and self-dealing inThe Netherlands in connection with the multiple roles theyplayed in the Netherlands bond underwriting and as seniorcreditor of the company issuing the bonds.10

Notificants have denied Protestants' allegations ofwrongdoing relating to the Netherlands bond underwriting.The matter is before the courts in The Netherlands, where alower court has ruled in favor of the Foreign Parent and anappeal is pending. The allegations relating to the Nether-lands bond underwriting involve issues governed by thesecurities and bankruptcy laws of a foreign country thatcan be adjudicated by the courts of that country. In accor-dance with its standard procedures, the Board has con-tacted Notificants' home country supervisors regarding theproposal. The Board has considered the extensive record ofexamination of Notificants' U.S. subsidiaries by their pri-mary federal supervisors. Based on all the facts of record,including comments from Protestants, and for the reasons

8. See 12 C.F.R. 225.24; see also The Fuji Bank, Limited, 75Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73Federal Reserve Bulletin 155 (1987).

9. One of the Protestants asserts that press accounts about the U.S.activities of ABN AMRO Bank N.V. (formally Algemene BankNederland, N.V.), the foreign parent holding company of ABN AMRONorth America, Inc. (the "Foreign Parent"), raise adverse managerialissues. The Board has considered these comments in light of Notifi-cants' extensive supervisory record in the United States, which in-cludes examination reports by appropriate supervisory authorities, andactions taken by the Foreign Parent to enhance risk management at itsU.S. trading operations.

10. Protestants also refer to other events that occurred outside theUnited States involving the Foreign Parent, including two additionalforeign underwriting transactions in which the Foreign Parent isalleged to have made inadequate or inaccurate disclosures to inves-tors, alleged fraudulent activity by employees, and circumstancessurrounding the recent resignation of a senior official.

discussed above, the Board concludes that financial andmanagerial considerations are consistent with approval.The Board has full supervisory authority to take appropri-ate action if a court determines or an examination finds thatNotificants have engaged in illegal or improper activities.

Notificants indicate that the proposal would result ingreater efficiencies, and, accordingly, would enable bothinstitutions to offer their customers more services, lowercosts, and added convenience. On the basis of the forego-ing and all the facts of record, the Board has concluded thatthe proposal can be expected to produce public benefitsthat outweigh any possible adverse effects under the properincident to banking standard of section 4(c)(8) of the BHCAct.11

Based on the foregoing and all other facts of record, theBoard has determined that the notice should be, and herebyis, approved.12 Approval of the notice is specifically condi-tioned on compliance by Notificants with all the commit-ments made in connection with this notice. The Board'sdetermination also is subject to all the terms and conditionsset forth in Regulation Y, including those in sections 225.7and 225.23(g) (12 C.F.R. 225.7 and 225.23(g)), 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 evasions of, the provisionsof the BHC Act and the Board's regulations and orders

11. Protestants have requested that the Board hold a public hearingto receive additional evidence concerning the allegations about theNetherlands bond underwriting. Under the Board's rules, a hearing isrequired on a proposed acquisition of a savings association undersection 4 of the BHC Act if there are disputed issues of material factthat cannot be resolved in some other manner. 12 C.F.R. 225.23(f)-Protestants have not raised a disputed issue concerning a fact that ismaterial to the Board's consideration of this notice and that cannototherwise be resolved.

The Board may also, in its discretion, hold a public hearing ormeeting on a notice to clarify factual issues related to the notice and toprovide an opportunity for testimony, if appropriate. 12 C.F.R.262.3(e) and 262.25(d). In the Board's view, the Protestants have hadample opportunity to present their views, and have, in fact, providedsubstantial written comments that have been considered by the Boardin acting on this proposal. The Protestants failed to demonstrate whythe written submissions are not adequate to present their views on thenotice. After a careful review of all the facts of record, including al]the comments on this proposal, the Board has determined that a publichearing or meeting is not necessary to clarify the factual record of theproposal and is not otherwise warranted in this case. Accordingly, therequest for a public hearing on the notice is hereby denied.

12. One of the Protestants has requested that the Board investigateNotificants and their management in light of the Protestant's allegations about illegal and unethical conduct by Notificants' employee:and delay action on the proposal until the investigation is completecand the matter involving the Netherlands bond underwriting is resolved. The Board is required under the BHC Act to act on applications and notices within specified time periods. The Board notesmoreover, that Protestant has had a reasonable opportunity to comment as provided in the Board's notice processing procedures and hasubmitted substantial comments that have been carefully considersby the Board. Based on all the facts of record, and for the reasondiscussed above, the Board concludes that the record is sufficient tact on the proposal at this time, and that delay or denial of thproposal on the grounds of informational insufficiency is not wairanted.



thereunder. For purposes of this transaction, the commit-ments and conditions relied on by the Board in reachingthis decision are deemed to be conditions imposed inwriting by the Board in connection with its findings anddecision and, as such, may be enforced in proceedingsunder applicable law.

The proposal shall not be consummated later than threemonths after the effective date of this order, unless suchperiod is extended for good cause by the Board or theFederal Reserve Bank of Chicago, acting pursuant to dele-gated authority.


This action was taken pursuant to the Board's Rules RegardingDelegation of Authority (12C.F.R. 265.4(b)(l)) by a committee ofBoard members. Voting for this action: Chairman Greenspan, ViceChair Rivlin, and Governor Kelley.


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

Bane One CorporationColumbus, Ohio

Bane One Oklahoma CorporationOklahoma City, Oklahoma

Order Approving the Acquisition of a Bank HoldingCompany

Bane One Corporation, Columbus, Ohio ("Bane One"),and its wholly owned subsidiary, Bane One OklahomaCorporation, Oklahoma City, Oklahoma ("BOC"), bankholding companies within the meaning of the Bank Hold-ing Company Act ("BHC Act"), have requested theBoard's approval under section 3 of the BHC Act(12 U.S.C. § 1842) to acquire all the voting shares of Lib-erty Bancorp, Inc., Oklahoma City ("Liberty"), and itswholly owned subsidiary banks, Liberty Bank & TrustCompany of Oklahoma City, N.A., Oklahoma City ("Lib-erty Bank"), and Liberty Bank & Trust Company of Tulsa,N.A., Tulsa, all in Oklahoma. Bane One and BOC alsohave requested the Board's approval under section 4(c)(8)of the BHC Act (12 U.S.C. § 1843(c)(8)) and section225.24 of the Board's Regulation Y (12 C.F.R. 225.24) toacquire the nonbanking subsidiaries of Liberty and therebyengage in certain trust, credit life insurance, lending, andleasing activities.

Notice of the proposal, affording interested persons anopportunity to submit comments, has been published inaccordance with the Board's rules (62 Federal Register7231 (1997)). 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 sections 3and 4 of the BHC Act.1

Bane One, with total consolidated assets of $98.5 billion,operates subsidiary banks in twelve states: Arizona, Colo-rado, Illinois, Indiana, Kentucky, Louisiana, Ohio, Okla-homa, Texas, Utah, West Virginia, and Wisconsin. BaneOne is the tenth largest commercial banking organizationin the United States, controlling deposits of $71.6 billion.2

BOC is the eighth largest commercial banking organizationin Oklahoma, controlling deposits of $472.4 million, repre-senting approximately 1.6 percent of the total deposits inthe state. Bane One also engages through various subsidiar-ies in a broad range of permissible nonbanking activitiesthroughout the United States.

Liberty, with total consolidated assets of $2.9 billion, isthe third largest commercial banking organization in Okla-homa, controlling $2.3 billion in deposits, representingapproximately 7.7 percent of the total deposits in the state.After consummation of the proposal, Bane One would bethe third largest commercial banking organization in Okla-homa, controlling deposits of $2.8 billion, representingapproximately 9.3 percent of the total deposits in the state.

Interstate Analysis

Section 3(d) of the BHC Act, as amended by section 101 ofthe Riegle-Neal Interstate Banking and Branching Effi-ciency Act of 1994, allows the Board to approve an appli-cation by a bank holding company to acquire control of abank located in a state other than the home state of suchbank holding company if certain conditions are met. Forpurposes of the BHC Act, the home state of Bane One isOhio, and Bane One proposes to acquire banks in Oklaho-ma.3 The conditions for an interstate acquisition enumer-ated in section 3(d) are met in this case,4 and the Board is

1. Commenters to the proposal contend that the Board should notconsider the substance of Bane One's submissions filed after timeperiods prescribed in the Board's Rules of Procedure for an appli-cant's response to comments. See 12 C.F.R. 262.3(e). The Board hasthe sole discretion under its Rules of Procedure to consider commentsand responses, including late submissions of information. In review-ing the proposal, the Board has considered all the submissions filed,including submissions filed by commenters that responded to BaneOne's submissions.

2. Asset data are as of September 30, 1996; ranking data are as ofJune 30, 1996.

3. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holdingcompany's home state is that state in which the operations of the bankholding company's banking subsidiaries were principally conductedon July 1, 1996, or the date on which the company became a bankholding company, whichever is later.

4. 12 U.S.C. §§ 1842(d)(l)(A) and (B) and 1842(d)(2)(A) and (B).Bane One is adequately capitalized and adequately managed. Onconsummation of the proposal, Bane One and its affiliates wouldcontrol less than 10 percent of the total amount of deposits of insureddepository institutions in the United States, and less than 30 percent ofthe total amount of deposits in Oklahoma. In addition. Liberty's twosubsidiary banks have been in existence and have continuously oper-ated for at least five years as required by Oklahoma law. All otherrequirements of section 3(d) of the BHC Act also would be met onconsummation of the proposal.



permitted to approve this proposal under section 3(d) of theBHC Act.

Competitive Considerations

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.

BOC and Liberty compete directly in the Oklahoma Citybanking market.5 BOC's depository subsidiary, Bank One,Oklahoma City, Oklahoma City, Oklahoma ("Bank OneOklahoma"), is the fourth largest depository institution inthe market, controlling deposits of $485.4 million andrepresenting approximately 6.0 percent of the total depositsin depository institutions in the market ("market depos-its").6 Liberty Bank is the largest depository institution inthe market, controlling market deposits of $1.36 billionand representing approximately 16.8 percent of marketdeposits.

On consummation of the proposal, BOC would becomethe largest depository institution in the market, controllingdeposits of $1.85 billion, representing approximately22.8 percent of market deposits. The change in marketconcentration, as measured by the Herfindahl-HirschmanIndex ("HHI"), would not exceed the threshold levels inthe Department of Justice ("DOJ") Merger Guidelines.7 Inaddition, more than 55 competitors, including several ofthe state's largest banking and thrift organizations, wouldcontinue to operate in the market. Based on all the facts ofrecord, the Board has concluded that consummation of theproposal would not result in any significantly adverse

5. The Oklahoma City banking market consists of the OklahomaCity Ranally Metro Area, plus the community of Blanchard in Mc-Clain County.

6. Market data are as of June 30, 1995. Market share data are basedon calculations that include the deposits of thrift institutions at50 percent. The Board previously has indicated that thrift institutionshave become, or have the potential to become, significant competitorsof commercial banks. See, e.g., Midwest Financial Group, 75 FederalReserve Bulletin 386 (1989). Thus, the Board has regularly includedthrift deposits in the calculation of market share on a 50-percentweighted basis. See, e.g., First Hawaiian Inc., 77 Federal ReserveBulletin-52 (1991).

7. On consummation of the proposal, the HHI would increase by202 points to a level of 992. Under the revised DOJ Merger Guide-lines, 49 Federal Register 26,823 (1984), a market in which thepost-merger HHI is less than 1000 is considered unconcentrated. TheDOJ 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 DOJ has stated that the higher than normal HHI thresholds forscreening bank mergers for anticompetitive effects implicitly recog-nize the competitive effect of limited-purpose lenders and other non-depository financial institutions.

effects on competition or the concentration of bankingresources in any relevant banking market.8

Other Factors Under the BHC Act

The BHC Act also requires the Board to consider thefinancial and managerial resources of the companies andbanks involved, the convenience and needs of the commu-nities to be served, and certain other supervisory factors.

A. Supervisory Factors

The Board has carefully considered the financial and man-agerial resources and future prospects of Bane One, Lib-erty, and each of their respective subsidiaries, as well asother supervisory factors, in light of all the facts of record.These facts include supervisory reports of examinationassessing the financial and managerial resources of theorganizations and recent pro forma financial informationprovided by Bane One. The Board notes that Bane One,Liberty, and each of their subsidiary banks meets or ex-ceeds the "well capitalized" thresholds under applicablelaw and is expected to continue to do so after consumma-tion of the proposal. Based on all the facts of record, theBoard has concluded that the financial and managerialconsiderations, and all other supervisory factors that mustbe considered under section 3 of the BHC Act, are consis-tent with approval of the proposal.9

B. Convenience and Needs Factor

The Board also has considered the effect of the proposedacquisition on the convenience and needs of the commu-nity to be served in light of all the facts of record. As part

8. Comments from Inner City Press/Community on the Move, theDelaware Community Reinvestment Action Council ("DCRAC"),and the Black Citizens for Justice, Law & Order (collectively, "Prot-estants") contend that consummation of the proposal would have anadverse competitive effect because the largest depository institution inthe Oklahoma City banking market would be acquired by an out-of-state holding company and thereby become less responsive to thecredit needs of farmers and small businesses. The argument relies onsubdividing the market in a manner that is inconsistent with Boardprecedent. The Board traditionally has recognized that the appropriateproduct market for evaluating the competitive effects of bank mergersand acquisitions is the cluster of products (various kinds of credit) andservices (such as checking accounts and trust administration) offeredby banking institutions. See Chemical Banking Corporation, 82 Fed-eral Reserve Bulletin 239 (1997), and the discussion of relevant caselaw and economic studies therein. Protestants present no facts tosupport an alternative product market defined by small business andsmall farm loans. Based on all the facts of record, the Board concludesthat competitive considerations are consistent with approval for thereasons discussed above. The effects of the proposal in meeting thecredit needs of the community, including small business and smallfarm credit needs, are discussed later in the order.

9. Protestants maintain that their allegations relating to Bane One'scompliance with fair lending laws, branch closings, and lendingpractices present adverse managerial considerations. In light of thefacts discussed above and the consideration given to the allegationslater in the order, the Board concludes that managerial and othersupervisory factors are consistent with approval of the proposal.



of its review, the Board has carefully considered commentsreceived from Protestants contending that the Home Mort-gage Disclosure Act (12 U.S.C. § 2801 et seq.) ("HMDA")data for Bane One and its affiliates, Bane One's record ofconsumer complaints and branch closings, and the market-ing and lending practices at Bane One's bank and nonbanksubsidiaries warrant denial of the proposal.10 Protestantsalso maintain that Bane One, as an out-of-state acquirer,would reduce the amount of credit Liberty makes availableto small businesses and farmers in Oklahoma.

Protestants also allege that HMDA data from Bane Oneand Bane One Mortgage Corporation ("BOMC") showillegal discrimination against minority credit applicants inviolation of the Equal Credit Opportunity Act ("ECOA")and the Fair Housing Act (collectively, "fair lendinglaws"), and that BOMC and Bane One's subsidiary banksillegally "steer" minority applicants to Bane One's non-bank lending subsidiary, BOFS, which charges higher in-terest rates on its loans. In addition, Protestants allege thatthere are disparities in the denial rates of credit applica-tions, based on race or other prohibited factors, among thevarious Bane One subsidiaries.11

The Board notes that Bane One assists in meeting thecredit needs of the communities it serves by providing afull range of financial services, including commercial andretail banking services, trust and investment managementservices, and corporate and international banking services,through various bank and nonbank subsidiaries. Bane Onehas stated that services currently available from Libertywould be expanded and improved as a result of the pro-posal. In particular, Bane One expects to expand the prod-ucts and services offered to consumers and small busi-nesses in the communities currently served by Liberty.Bane One proposes to provide small businesses in Okla-homa with different types of assistance, including access tofederally subsidized loans and guarantees through theSmall Business Administration ("SBA"). Bane One alsonotes that its subsidiary bank in Oklahoma engages in asubstantial amount of agricultural lending and that BaneOne intends to continue to make small farm loans incommunities served by Liberty.12

10. Protestants question the accuracy of Bane One's HMDA databecause the data do not reflect the loans that Bane One states werepurchased by Bane One Financial Services ("BOFS") from Bane Oneaffiliates. The Board has concluded that the allegation is not correctwith respect to the 1996 HMDA data, which show loan purchases. Tothe extent that any loan purchases in previous years might not havebeen reported by BOFS under HMDA, the Board may address theseissues under its supervisory authority.

11. Protestants cite litigation and consumer complaints filed againstBane One as additional evidence of improper practices.

12. The Board has considered Bane One's small business and farmlending in light of articles cited by Protestants in support of theirassertion that multi-state bank holding companies tend to make fewerloans to small businesses and farms than small single-state bankholding companies. As a general matter, the articles cited reviewedonly selected data from the Federal Reserve System's Tenth Districtand, as the author of the studies noted, the data used in the studies donot rule out alternative conclusions. The Board has carefully reviewedBane One's record of ascertaining and helping to meet the credit

Bane One also indicates that it would enhance Liberty'scommunity reinvestment program by integrating it with theBane One program. In this light, the Board has givensubstantial consideration to the existing record of BaneOne, as reflected in its programs and in the supervisoryassessments of its performance, of helping to meet theconvenience and needs of all its communities, includinglow- and moderate-income ("LMI") communities.

CRA Performance Examinations

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 CRA(12 U.S.C. § 2901 et seq.). As provided in the CRA, theBoard evaluates the convenience and needs factor in lightof examinations by the primary federal supervisor of theCRA performance records of the relevant institutions. Aninstitution's most recent CRA performance evaluation is aparticularly important consideration in the applications pro-cess because it represents a detailed on-site evaluation ofthe institution's overall record of performance under theCRA by its primary federal supervisor.13

All of Bane One's existing thirty subsidiary banks havereceived "outstanding" or "satisfactory" ratings at themost recent examinations of their CRA performance.14

Fifteen of Bane One's subsidiary banks, representing amajority of the organization's banking assets, received"outstanding" CRA ratings from their primary federalsupervisors. Bane One's lead bank, Bank One, Columbus,N.A., Columbus, Ohio ("Lead Bank"), and Bane One's

needs, including the small business and farm credit needs, of thecommunities served by its subsidiary banks. The Board also notes thatBane One has represented that it will make its programs available tocustomers of Liberty in connection with the proposal. The Board notesthat the CRA requires every bank, including banks owned by out-of-state bank holding companies, to be examined regularly and ratedon its performance in helping meet the credit needs of its community.In addition, the Board is required to review this performance in futureapplications by Bane One to acquire depository facilities under theBHC Act.

13. DCRAC contends that CRA performance examinations con-ducted before 1995 relied too heavily on the banks' presentation oftheir performance and are therefore unreliable. The Board notes thatthe Statement of the Federal Financial Supervisory Agencies Regard-ing the Community Reinvestment Act ("Agency CRA Statement")provides that a CRA examination is an important and often controllingfactor in the consideration of an institution's CRA record and thatreports of these examinations will be given great weight in theapplications process. See 54 Federal Register 13,742 and 13,745(1989).

14. Protestants maintain that Bane One's CRA performance recordis incomplete because Bane One's nonbanking subsidiaries, and inparticular BOFS, have not been examined for CRA performance.Protestants, therefore, argue that the CRA examination record shouldnot be accorded normal weight in analyzing the proposal. The CRArequires federal financial supervisory agencies to assess the record ofCRA performance in connection with their examination of an insureddepository institution, and to take such record into account in theirevaluation of an application for a depository facility. See 12 U.S.C.§ 2903. BOFS and other nonbank lending subsidiaries of Bane One

are not insured depository institutions and, therefore, are not subject toevaluation under the CRA.



largest bank in terms of assets, Bank One, Texas, N.A.,Dallas, Texas ("Bank One Texas"), both received "out-standing" performance ratings from their primary supervi-sor, the Office of the Comptroller of Currency ("OCC").Bank One Oklahoma also received an "outstanding" ratingfrom the Federal Reserve Bank of Kansas City in anexamination completed in April 1996.15 Liberty's two sub-sidiary banks received "satisfactory" ratings for CRA per-formance from the OCC.

Lending Record

The Board has carefully considered other aspects of BaneOne's CRA performance record, including the lending,marketing, and investment activities of its subsidiarybanks, in light of Protestants' comments relating to severalBane One subsidiary banks.16

Lead Bank. According to the 1995 CRA performanceexamination conducted by the OCC, Bane One's LeadBank, which serves the Columbus, Ohio, MetropolitanStatistical Area ("MSA"), developed a comprehensive pro-gram to identify the credit needs of its delineated commu-nity and effectively responded to those needs through awide variety of credit products and banking services. LeadBank had a significant volume of consumer, mortgage, andsmall business loans in all segments of its community. Forexample, in 1994, Lead Bank had more than 3,700 smallbusiness credit relationships and made small business loanstotalling more than $243 million.

Lead Bank, working in conjunction with BOMC, alsooffered a range of loans for affordable housing and homeimprovements. In 1993, the bank introduced a new afford-able mortgage product with lower payments and flexibledebt-to-income limits. In 1994, the Lead Bank originated182 of the affordable mortgages, totalling $8.9 million. Theexamination further noted that the bank outperformed com-petitors in origination of home improvement loans, particu-larly in LMI and minority census tracts.

Examiners also noted that Lead Bank took a leadershiprole in local, state and federal government-insured guaran-teed and subsidized loan programs for families, smallbusinesses, and small farms. In 1994, Lead Bank partici-pated in government-sponsored loans totalling more than$24 million.

Bank One Texas. The OCC also concluded that BankOne Texas effectively made its credit services available to

15. The CRA performance ratings for each of Bane One's subsid-iary banks is set forth in the Appendix.

16. Protestants also contend that Bane One's subsidiary bankscharge excessive fees for cashing welfare and Social Security Admin-istration checks for individuals who do not have bank accounts withBane One. Protestants allege that the fees discriminate against individ-uals who are minorities, elderly and poor. Protestants present no factsto substantiate that the fees are illegally discriminatory, and there is noevidence in the record that the fees are based on any factor that wouldbe prohibited by law. The Board has recognized that although bankshelp serve the needs of their community by offering basic services atnominal or no charge, the CRA does not impose any limitation on thefees or surcharges that can be assessed for services.

all segments of its community and that the bank's exten-sions of credit addressed a significant portion of the creditneeds of its service community. Bank One Texas made anumber of mortgage, home improvement, consumer, creditcard, and small business loans in 1994 and 1995. Examin-ers commended Bank One Texas for its lending perfor-mance to LMI areas, noting that 32 percent of the bank'slending was in LMI census tracts, while 30 percent of thepopulation of the bank's delineated community resided inthese LMI areas.

Examiners further noted that the management of BankOne Texas had focused on meeting the mortgage needs ofLMI segments of the bank's community. Bank One Texasoffered a variety of affordable mortgage products, includ-ing an "American Dream" mortgage product that is avail-able to LMI home buyers who do not meet the standardsfor Federal National Mortgage Association ("FannieMae") and Federal Housing Administration ("FHA")products. Bank One Texas originated 215 mortgages underthe program for a total amount of $8.3 million in the firsthalf of 1995.

Examiners also noted that Bank One Texas offered avariety of small business credit products. The bank was acertified SBA lender and was the sixth largest originator ofSB A loans in the country.

Bank One Oklahoma. Examiners found that Bank OneOklahoma offered a wide range of conventional andgovernment-related loan programs that were responsive tothe needs of the local community. Examiners noted thatBank One Oklahoma used an internal CRA committee todevelop products and services designed to address commu-nity needs. The bank was one of the largest home construc-tion originators in the Oklahoma City banking market andparticipated in programs to provide home purchase andrehabilitation loans to LMI borrowers.

Examiners noted that Bank One Oklahoma was an activesmall business lender and had originated small businessloans throughout its service community. Examiners re-ported, for example, that the bank originated 1,950 smallbusiness loans, totalling over $125 million, to addressidentified small business capital needs. In November 1995,the bank also made available a new Bank One BusinessLine of Credit ("BOBLOC") for small businesses seekingloans of $5,000 to $100,000. Since its introduction, BankOne Oklahoma has made 39 BOBLOC loans, totallingmore than $296,000. The 1996 CRA performance examina-tion also indicates that Bank One Oklahoma participated intwo public- private partnerships to help meet the creditneeds of small businesses and LMI individuals interestedin starting their own businesses.

The bank participated in other loan programs to meet theneeds of small businesses, small farms, and LMI families.Bank One Oklahoma, for example, made SBA loans total-ling $215,000 and, working in conjunction with BOMC,made FHA loans totalling $1.15 million.

Other Banks. Bane One's subsidiary banks have beenfound by their primary federal supervisors to be effective inidentifying the credit needs of their communities and inmeeting those needs. Additionally, all the banks partici-



pated in various lending programs designed to make creditavailable for affordable housing and for small businesses.17

Examiners noted, for example, that Bank One, Arizona,N.A., Phoenix, Arizona, had made a number of mortgageloans and participated in a variety of public-private partner-ships to finance affordable housing, including a Depart-ment of Housing and Urban Development ("HUD") guar-antee program to make home construction, purchase, andrehabilitation loans to Native Americans. Similarly, theCRA performance examinations for Liberty National Bankand Trust Company of Kentucky, Louisville, Kentucky, awholly owned subsidiary of Bane One Kentucky Corpora-tion,18 noted that a significant portion of the bank's mort-gage lending was to LMI individuals. Examiners alsonoted that the bank had extended a significant volume ofsmall business loans. All of Bane One's banks offeredcommunity development lending, investment, and techni-cal assistance.

Investments. In addition to the lending programs dis-cussed above, Bane One helps meet the credit needs of thecommunities it serves through its community developmentcorporation, Bane One Community Development Corpora-tion ("CDC"). Examiners commended Bane One's partici-pation in local development and redevelopment projects,and noted that CDC helps Bane One's bank subsidiaries tofinance projects to promote community development. CDChas invested more than $120 million in community devel-opment projects and has supplemented such investmentactivities with on-site community development technicalassistance.

Marketing and Ascertainment. Examiners noted thatBane One's subsidiary banks have effectively identified thecredit needs of their communities and adequately madetheir credit services available to all segments of theircommunities. Officers of the Lead Bank, for example,made hundreds of calls to churches, schools, neighborhoodgroups, and local chambers of commerce to identify un-met credit needs and to determine how the bank couldrespond to those needs, provide other banking services,and improve its marketing efforts. Examiners noted thatBank One Texas undertook various marketing efforts tai-lored to reach LMI communities, including direct mailingsto LMI areas, Spanish or bilingual advertisements andbank brochures, and advertisements in ethnic and specialinterest publications such as church newsletters. Bank OneOklahoma also employed a call program to meet with avariety of civic, religious, and neighborhood groups. Thebank also placed advertisements on radio stations and inlocal newspapers aimed at African-American and Hispanicpopulations.

Branch Closings

Protestants have expressed concerns that branch closingsresulting from the proposal would have a materially ad-verse effect on the community, particularly in LMI neigh-borhoods.19 Protestants also contend that Bane One's bankshave been systematically closing branches in LMI commu-nities since their last CRA examinations, and that branchessold by Bane One to other depository institutions often areclosed.20

Bane One has indicated that it does not have final plansfor closing branches in Oklahoma after acquiring Liberty.Bane One has identified, on a preliminary basis, sixbranches in Oklahoma City and Tulsa, Oklahoma, thatmight be appropriate for closing or consolidation withother nearby branches. Only one of the branches that BaneOne has indicated may be closed is located in a LMIcensus tract, and the operations of that branch would becombined with another branch located approximately onemile away.21

The Board has carefully reviewed Bane One's branchclosing policy. The policy requires that, when a branch isidentified for closing, a discussion of the proposed closingbe accompanied by an analysis of how the closing wouldaffect banking access for LMI consumers. If, based on thatanalysis and other factors, a decision is made to close abranch, a retention plan must be developed that sets forth astrategy for serving customers of the community affectedby the closing, with particular attention given to servingLMI consumers. CRA personnel participate in the processand review branch closing plans with neighborhood leadersto ensure that the retention plan takes into account commu-nity suggestions. The Board expects that the policy wouldbe used for any branch closings that result from the pro-posal.

The primary federal supervisors of Bane One's subsid-iary banks have considered the effect of branch closingsunder the policy on the communities served by Bane One'ssubsidiary banks. The OCC's CRA performance examina-tions concluded that Lead Bank and Bank One Texas havesatisfactory records of opening and closing branches andprovided reasonable access to services for all segments ofthe banks' communities. The most recent CRA perfor-mance examinations of Bane One's banks generally notedno materially adverse effects on LMI neighborhoods frombranch closings.

In examining the convenience and needs factor, theBoard has taken into account Bane One's preliminarybranch closing plans in Oklahoma, its record of closing

17. Protestants object that Bane One's subsidiary banks do notoriginate a significant volume of purchase money mortgages. TheCRA does not require an institution to offer any specific creditproducts but allows an institution to help to serve the credit needs ofthe institution's community by providing credit of the types consistentwith the institution's overall business strategy and expertise.

18. The bank is now named Bank One, Kentucky, N.A.

19. Protestants also have expressed concerns about Bane One'sreliance on alternative delivery mechanisms, such as automated tellermachines, to serve LMI communities.

20. The closing of a branch purchased by another banking organiza-tion that is subsequently closed by that banking organization would beevaluated by the primary federal supervisor of the purchasing organi-zation.

21. The other five branches that Bane One has identified for possibleaction are located in upper- or middle-income census tracts or arelocated in a business district.



branches as reviewed by the primary supervisors of BaneOne's banks in the CRA examination process, and itscorporate branch closing policy. The Board notes thatbranch closings resulting from the proposal will be as-sessed by the Oklahoma banks' primary federal supervisorfor CRA performance in future CRA examinations. TheBoard also notes that Bane One is required to give at least90 days written notice of all branch closings subject to theJoint Agency Policy Statement on Branch Closings ("JointPolicy Statement").22 Additionally, the Board will reviewthe branch closures resulting from the proposal in itsanalysis of future applications to expand the operations ofBane One's depository institutions.

Other Aspects of Bane One s Lending Activities

The Board also has carefully reviewed Bane One's lendingactivities and its compliance with fair lending laws in lightof all the facts of record. As part of this review, the Boardhas reviewed the 1994, 1995, and 1996 HMD A data re-ported by Bane One, including the data for BOMC andBOFS.23 The HMDA data reflect some disparities in therate of loan originations, denials, and applications by racialgroup and income level. The Board is concerned when therecord of an institution indicates such disparities and be-lieves that all banks and other lending institutions areobligated to ensure that their lending practices are based oncriteria that assure not only safe and sound lending but alsoequal access to credit by creditworthy applicants regardlessof race. The Board recognizes, however, that HMDA dataalone provide an incomplete measure of an institution'slending in its community because these data cover only afew categories of housing-related lending, and provideonly limited information about the covered loans.24 HMDAdata, therefore, have limitations that make the data aninadequate basis, absent other information, for concludingthat an institution has engaged in illegal lending discrimi-nation.

In light of the limitations of HMDA data, the Board hascarefully reviewed other information, particularly examina-tion reports that provide on-site evaluation of compliance

22. See 58 Federal Register 49,083 (1993) (interpreting section 42of the Federal Deposit Insurance Act (12U.S.C. § 1831r-l)). Underthese provisions, all insured depository institutions are required tosubmit a notice of any proposed branch closing to the appropriatefederal banking agency no later than 90 days before the date of closurethat contains:

(1) The identity of the branch to be closed and the proposed closingdate;

(2) A detailed statement of the reasons for the decision to close thebranch; and

(3) Atatistical or other information supporting closure consistentwith the institution's written policy for branch closings.

23. Protestants object to consideration of 1996 HMDA data becauseProtestants have not reviewed these data. The record indicates thatProtestants only recently requested the data, which were required to bepublicly available under HMDA by March 31, 1997. See section 203.5of the Board's Regulation C (12 C.RR. 203.5).

24. HMDA data, for example, do not provide a basis for anindependent assessment of whether an applicant who was deniedcredit was, in fact, creditworthy.

by Bane One with the fair lending laws. The examinationsof Bane One's subsidiary banks found no evidence ofprohibited discrimination or other illegal credit practices atthe institutions.23 Examiners also found no evidence ofpractices intended to discourage applications for the typesof credit listed in the banks' CRA statements.26

Bane One also has implemented policies and programsto ensure that its subsidiary banks engage in fair lendingpractices. For example, Bane One has a system of periodicfile reviews at its subsidiary banks to confirm the consis-tency of loan decisions.27 Bane One's fair lending programis directed by the Fair Lending/CRA Steering Committee,which is chaired by Bane One's General Counsel andincludes senior management of each affected line of busi-ness, including BOMC and BOFS. Compliance with theprogram is monitored by compliance officers at each busi-ness unit, who report to Bane One's national director ofregulatory compliance.

Protestants have questioned Bane One's practice of re-ferring applicants for credit to its nonbank lending subsid-iaries. Bane One maintains that applicants are referred toits nonbank lending subsidiaries like BOFS only after theapplication has been denied by a Bane One bank and afterthe loan applicant has agreed to the referral. Bane Oneviews its referral program as an effort to permit a deniedapplicant with an additional opportunity to qualify for aloan. Referrals made under the program are not compen-sated, and referral program guidelines prohibit illegal steer-ing or prescreening and require that applicants be treateduniformly. Under one recently introduced referral program,

25. The most recent CRA performance examination for Bank One,Bloomington, N.A., Bloomington, Indiana, which represents less than1 percent of Bane One's total consolidated assets, noted certainviolations of the ECOA. In considering the overall managerial recordand convenience and needs factors in this case, the Board has care-fully reviewed these violations in light of information regarding thetype and scope of the violations, the response of Bane One to thefindings, and additional supervisory information from the OCC. TheBoard notes that the OCC determined that the violations were notwidespread and that appropriate actions to correct the problems weretaken by senior management of the bank.

26. Protestants refer to two class action lawsuits against Bane Oneas evidence of improper credit practices. The two class actions in-volved practices related to BOMC's escrow accounts and Bane One'sprivate mortgage insurance ("PMI") activities. Both actions weresettled and no conclusions of wrongdoing were made. DCRAC alsocites an Ohio Supreme Court decision in a law suit against Bane Oneand other defendants involving the forced purchase of collateralinsurance if the collateral becomes uninsured. The decision found nowrongdoing by the defendants but rather permitted the plaintiffs theopportunity to substantiate the allegations of wrongdoing at a trial onthe merits of the action. Protestants also cite several consumer com-plaints against Bane One in Michigan and allege that there may besimilar complaints in other states in which Bane One does business.The Board has reviewed the complaints in Michigan in light of all thefacts of record, including confidential information from the stateauthorities that reviewed these complaints, as part of the Board'sconsideration of the managerial and convenience and needs factors inthis proposal.

27. The most recent examination of Bane One's Lead Bank notedfavorably the bank's compliance monitoring and internal loan testingprocedures. Protestants object that the file review program is only nowbeing implemented at BOFS.



existing borrowers of BOFS wishing to refinance theirloans are referred to BOMC to determine whether theyqualify for a BOMC loan product.

The Board also has considered certain preliminary infor-mation developed in the course of its supervision of BaneOne that raises a question about fair lending oversight,procedures and practices at BOMC, one of its nonbankunits. BOMC accounts for less than 1 percent of BaneOne's consolidated net income, and the information ap-pears to be limited in the context of Bane One's overallmanagerial and lending record. The Board is conducting athorough examination of BOMC to resolve the questionand to ensure compliance with law. In the event that theexamination indicates a problem with fair lending over-sight, procedures, or practices, the Board has broad super-visory authority under the banking laws to require bankholding companies and their nonbank subsidiaries to ad-dress such deficiencies.

In deciding to act on this case, the Board also hasconsidered Bane One's record of addressing supervisoryand other issues identified by its supervisor. In light of thatrecord, the Board fully expects that Bane One will take allnecessary steps, including adopting and implementingpractices and procedures developed in consultation withthe Board, to ensure that any areas of weakness in its fairlending policies and practices that may be identifiedthrough the Board's examination are adequately addressed,and the Board conditions its approval of this proposal onBane One taking such actions. For these reasons, and basedon all the facts of record, the Board does not believe thatdenial of the proposal is appropriate, or that the Board'saction on the proposal should be delayed for the period oftime necessary to complete its examination.28

The Board also has carefully considered all the facts ofrecord, including the comments received from Protestants,the responses to those comments, and the CRA perfor-mance records of the subsidiary banks of Bane One andLiberty, including relevant reports of examination fromtheir primary federal supervisors. Based on the facts ofrecord, and for the reasons discussed above, the Boardconcludes that convenience and needs considerations andrelated managerial considerations, including the CRArecords of performance of both organizations' subsidiarybanks, are consistent with approval of the proposal. TheBoard also concludes that this proposal satisfies the criteriaspecified by statute to be applied by the Board in reviewingproposed acquisitions of this type, and that the record doesnot provide a basis to deny this application under thestatutory factors.

Nonbanking Activities

Bane One and BOC also have filed notice, pursuant tosection 4(c)(8) of the BHC Act, to acquire the nonbankingsubsidiaries of Liberty and thereby engage in lending activ-ities, providing equipment leasing services, trust companyactivities, and underwriting and brokering life insurancedirectly related to extensions of credit by Bane One and itsaffiliates.29 The Board has determined by regulation thateach of these activities is closely related to banking,30 andBane One has committed to conduct the nonbanking activ-ities in accordance with Regulation Y.

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."31 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.32 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 Liberty's non-banking businesses and, in doing so, has considered thecomments submitted by Protestants regarding the competi-tive effects of the proposal.33 The Board notes the marketsfor the nonbanking services are, in each case, unconcen-trated and that there are numerous providers of the ser-vices. As a result, consummation of the proposal wouldhave a de minimis effect on competition. Based on all thefacts of record, the Board has concluded that the proposalwould not have a significantly adverse effect on competi-tion in any relevant market. In addition, the Board expectsthat the acquisition would provide added convenience toLiberty's customers and the public. Bane One has statedthat consumers in the markets currently served by Libertywould have access to a variety of services through BaneOne that are not available through Liberty. Bane One alsonotes that the proposed transaction would result in opera-

28. Protestants also request that the proposal be denied or delayeduntil the Board conducts an examination of BOFS for fair lending lawcompliance. In light of all the facts of record, including a review ofthe HMDA data, the Board concludes that the record in this case doesnot warrant granting Protestants' request.

29. Bane One proposes to engage in these activities through thefollowing non-banking subsidiaries of Liberty: Mid-America CreditLife Assurance Company, Mid-America Insurance Agency, Inc., Lib-erty Trust Company of Texas, and Liberty Financing Corporation.

30. See 12 C.F.R. 225.28(b)(l), (b)(3), (b)(5), and (b)(l l)(i).31. 12U.S.C. § 1843(c)(8).32. See 12 C.F.R. 225.26; see also The Fuji Bank, Limited, 75

Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73Federal Reserve Bulletin 155 (1987).

33. Protestants also raise concerns about the acquisition by BaneOne of a thrift subsidiary of Liberty. Liberty does not have a thriftsubsidiary.



tional efficiencies that would allow Liberty to be a moreeffective competitor and thereby provide improved ser-vices at a lower cost to its customers. Accordingly, basedon all the facts of record, the Board has determined that thebalance of public benefits that the Board must considerunder the proper incident to banking standard of sec-tion 4(c)(8) of the BHC Act is favorable and consistentwith approval of the proposal.

Conclusion

Based on the foregoing, and in light of all the facts ofrecord, including the comments submitted by Protestants,34

the Board has determined that the applications and noticesshould be, and hereby are, approved.35 Approval of theapplications and notices is specifically conditioned on com-

34. The Black Citizens for Justice, Law & Order and DCRACcontend that there are disproportionately low numbers of AfricanAmericans in management and stafF positions at Bane One. The Boardhas carefully reviewed these comments in light of all the facts ofrecord, which include supervisory reports of examination assessingthe financial and managerial resources of Bane One. The Board alsohas previously stated that its limited jurisdiction to review applica-tions under the BHC Act does not authorize the Board to adjudicatedisputes raised by a commenter that arise under statutes exclusivelyadministered and enforced by another federal regulatory agency otherthan banking laws. See, e.g., Norwest Corporation, 82 Federal Re-serve Bulletin 580 (1996); see also Western Bane shares v. Board ofGovernors, 40 F.2d 749 (10th Cir. 1973). Under the Department ofLabor's regulations, Bane One is required to file an annual report withthe Equal Employment Opportunity Commission ("EEOC") coveringall employees in its corporate structure. See 41 C.F.R. 60-1.7(a) and60-1.40. The Department of Labor, and the EEOC in particular, havesufficient statutory authority to address disputes regarding illegaldiscriminatory labor practices.

35. Protestants have requested a hearing on the proposal. Sec-tion 3(b) of the BHC Act does not require the Board to hold a publichearing on an application unless the appropriate supervisory authorityfor the bank to be acquired makes a timely written recommendation ofdenial of the application. In this case, the Board has not received sucha recommendation from a state or federal supervisory agency. TheBoard's rules also provide for a hearing under section 4 of the BHCAct if there are disputed issues of material fact that cannot be resolvedin some other manner regarding the acquisition of a savings associa-tion. See 12 C.F.R. 225.25(a)(2). As previously noted, Liberty doesnot have a savings association subsidiary.

Under its rules, the Board may also, in its discretion, hold a publichearing or meeting on an application or notice to clarify factual issuesrelated to the notice and to provide an opportunity for testimony, ifappropriate. See 12 C.F.R. 262.3(e) and 262.25(d). The Board hascarefully considered Protestants' request for a hearing in light of allthe facts of record. In the Board's view, Protestants have had ampleopportunity to present their views, and they have submitted substantialwritten comments that have been carefully considered by the Board inacting on the proposal. Protestants' request fails to demonstrate whytheir written presentations do not adequately present their evidence,allegations, and views. After a careful review of all the facts of record,the Board has concluded that Protestants dispute the weight thatshould be accorded to, and the conclusions that the Board should drawfrom, the facts of record but do not identify disputed issues of fact thatare material to the Board's decision. For these reasons, and based onall the facts of record, the Board has determined that a public hearingor meeting is not required or warranted to clarify the factual record inthe proposal, or otherwise warranted in this case. Accordingly, therequest for a hearing on the proposal is hereby denied.

pliance by Bane One with all the commitments made inconnection with the proposal and with the conditions statedor referred to 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) (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.36

The acquisition of Liberty shall not be consummatedbefore the fifteenth calendar day following the effectivedate of this order, and the proposal shall not be consum-mated later than three months after the effective date of thisorder, unless such period is extended for good cause by theBoard or by the Federal Reserve Bank of Cleveland, actingpursuant to delegated authority.



JENNIFER J. JOHNSON

Deputy Secretary of the Board

Appendix

Institution

Bank One, Columbus, N.A.Bank One, Akron, N.ABank One, Athens, N.ABank One, Louisiana, N.A.Bank One, Bloomington,

N.A.*

CRA Rating

OutstandingOutstandingSatisfactorySatisfactorySatisfactory

Date

1/31/951/29/96

11/30/969/19/964/30/03

36. Protestants have requested that consideration of the proposal beconsolidated with consideration of Bane One's proposal to acquireFirst USA, Inc., Dallas, Texas. The Bane One/First USA proposal is aseparate proposal under the BHC Act, and the Board will review thatproposal in light of all the facts of record in that case, includingProtestants' comments, under the statutory factors required undersection 4 of the BHC Act.



Bank One, Cambridge, N.A.Bank One, Cincinnati, N.A.

One, Cleveland, N.A.

Bank One Trust Co., N.A.

Bank One, Coshocton, N.A.

Bank One, Crawfordsville,

N.A.*

Bank One, Texas, N.A.

Bank One, Dayton, N.A.

Bank One, Colorado, N.A.

Bank One, Dover, N.A.

Bank One, Fremont, N.A.

Bank One, Merrillville,N.A.*

Bank One, West Virginia,N.A.

Bank One, Indiana, N.A.

Bank One, Lafayette, N.A.*

Bank One, Lima, N.A.

Bank One, Kentucky, N.A.

Bank One, Mansfield**

Bank One, Marietta, N.A.

Bank One, Marion Indiana,

N.A.*

Bank One, Marion

Bank One, WisconsinTrust Co.

Bank One, Quad Cities,N.A.

Bank One, Oklahoma City

Bank One, Arizona, N.A.

Bank One, Portsmouth,N.A.

Bank One, Rensselaer,N.A.*

Bank One, Richmond,N.A.*

Bank One, Utah, N.A.

Bank One, Sidney, N.A.

Bank One, Illinois, N.A.

Bank One, Wheeling-Steuben., N.A.

Bank One, Youngstown,N.A.

Bank One, Wisconsin

SatisfactorySatisfactory

Satisfactory

Not rated for

Outstanding

Outstanding

Outstanding

Outstanding

Outstanding

Outstanding

Satisfactory

Satisfactory

Satisfactory

Outstanding

Satisfactory

Outstanding

Outstanding

Outstanding

Outstanding

Satisfactory

Satisfactory

Not rated for

Satisfactory

Outstanding

Satisfactory

Satisfactory

Outstanding

Outstanding

Outstanding

Satisfactory

Satisfactory

Satisfactory

Outstanding

Satisfactory

4/21/933/16/95

9/15/94

CRA

6/30/94

9/13/94

1/29/96

4/30/95

9/10/95

8/26/96

6/21/93

6/28/94

6/16/95

4/19/95

12/13/94

6/8/93

6/20/95

4/29/95

11/30/96

6/5/96

1/29/96

CRA

2/15/95

4/22/96

9/30/96

11/30/96

6/3/96

9/3/93

9/27/95

11/30/96

5/10/95

10/24/96

10/31/96

1/17/95

ORDERS ISSUED UNDER BANK MERGER ACT

AmSouth Bank of AlabamaBirmingham, Alabama

Order Approving the Merger of Banks and Establishmentof Bank Branches

AmSouth Bank of Alabama, Birmingham, Alabama ("Am-South Alabama"), a state member bank, has applied undersection 18(c) of the Federal Deposit Insurance Act(12U.S.C. § 1828(c)) (the "Bank Merger Act") to mergewith AmSouth Bank of Florida, Tampa, Florida ("Am-South Florida"); AmSouth Bank of Georgia, Rome, Geor-gia ("AmSouth Georgia"); AmSouth Bank of Tennessee,Chattanooga, Tennesssee ("AmSouth Tennessee"); andAmSouth Bank of Walker County, Jasper, Alabama ("Am-South Walker") (collectively, the "Merging Banks"); withAmSouth Alabama as the survivor.1 AmSouth Alabamaalso has applied under section 9 of the Federal Reserve Act(12 U.S.C. § 321) to establish branches at the current loca-tions of the main offices and branches of the MergingBanks.2

Notice of the application, affording interested persons anopportunity to submit comments, has been given in accor-dance with the Bank Merger Act and the Board's Rules ofProcedure (12 C.F.R. 262.3(b)). As required by the BankMerger Act, reports on the competitive effects of themerger were requested from the United States AttorneyGeneral, the Office of the Comptroller of the Currency, andthe Federal Deposit Insurance Corporation. The time forfiling comments has expired, and the Board has consideredthe application and all the facts of record in light of thefactors set forth in the Bank Merger Act and section 9 ofthe Federal Reserve Act.

AmSouth Alabama and the Merging Banks are whollyowned subsidiaries of AmSouth Bancorporation, Birming-ham, Alabama ("AmSouth"). AmSouth is the third largestcommercial banking organization in Alabama, controllingdeposits of $6.8 billion, representing 15.7 percent of thetotal deposits in commercial banking organizations in Ala-bama; the fifth largest commercial banking organization inFlorida, controlling deposits of $5.1 billion, representing3.3 percent of the total deposits in commercial bankingorganizations in Florida; the twenty-first largest commer-cial banking organization in Georgia, controlling depositsof $275.6 million, representing less than 1 percent of thetotal deposits in commercial banking organizations inGeorgia; and the eighth largest commercial banking organi-zation in Tennessee, controlling deposits of $827.5 million,representing 1.5 percent of the total deposits in commercialbanking organizations in Tennessee.3 This proposal repre-

* Merged with Bank One, Indianapolis, N.A., on March 22, 1997.Bank One, Indianapolis, N.A., then changed its name to Bank One,Indiana, N.A.** Expected to be consolidated into Bank One Columbus. N.A. onMay 17, 1997.

1. On consummation of the merger, AmSouth Alabama wouldchange its name to "AmSouth Bank." All the banks involved in theproposal are state member banks.

2. The locations of the branches that AmSouth Alabama proposes toestablish are listed in the Appendix.

3. Deposit data are as of June 30, 1996.



sents a reorganization of AmSouth's existing banking oper-ations, and therefore, consummation of the proposal wouldnot have any significantly adverse effects on competition inany relevant banking market.

Riegle-Neal Act Analysis

Section 102 of the Riegle-Neal Interstate Banking andBranching Efficiency Act of 1994 ("Riegle-Neal Act")(Pub. L. No. 103-328, 108 Stat. 2338 (1994)) authorizesbanks, beginning on June 1, 1997, to conduct interstatemergers unless, prior to June 1, 1997, the home State ofone of the banks involved in the transaction has adopted alaw expressly prohibiting merger transactions involvingout-of-state banks.4 The Riegle-Neal Act also authorizesthe acquiring bank to retain and operate, as a main office orbranch, any bank offices of the acquired bank.5

All the states involved in this proposal, Alabama, Flor-ida, Georgia, and Tennessee, have enacted legislation al-lowing interstate mergers between banks located in theirstates and out-of-state banks pursuant to the provisions ofthe Riegle-Neal Act on or after June 1, 1997.6 AlabamaBank has notified the Alabama Superintendent of Banks,the Florida State Comptroller, the Georgia Commissioner,and the Tennessee Commissioner regarding its proposal toconsolidate its banking operations and provided a copy ofits Bank Merger Act application to all the relevant stateagencies. Representatives from all the states involved inthe proposal have indicated that this transaction would bein compliance with their state laws regarding interstatebank mergers. In light of the foregoing, it appears that theproposal complies with the requirements of the Riegle-Neal Act provided that the proposal is not consummatedprior to June 1, 1997.

Financial, Managerial and Other Supervisory Factors

The Bank Merger Act also requires the Board to considerthe financial and managerial resources and future prospectsof the existing and proposed institutions, and the conve-nience and needs of the communities to be served. TheBoard has carefully considered the financial and manage-rial resources and future prospects of AmSouth Alabamaand the Merging Banks in light of all the facts of record.The facts of record include supervisory reports of examina-tion assessing the financial and managerial resources of theorganizations and financial information provided by Am-South. Based on these and all other facts of record, theBoard concludes that all the supervisory factors under theBank Merger Act are consistent with approval.

The Board also has carefully considered the effect of theproposal on the convenience and needs of the communities

4. 12 U.S.C. § 1831u(a)(l) (1994).5. 12 U.S.C. § 1831u(d)(l) (1994).6. See Ala. Code §§ 5-13B-22, 23 (effective May 31, 1997); Fla.

Stat. ch. 658.2953 (effective May 31, 1997); Ga. Code Ann., Fin. Inst.§7-1-628.3 (effective June 1, 1997); and Tenn. Code Ann. § 452-1402 et seq. (effective June 1, 1997).

to be served in light of all the facts of record. The Boardhas long held that consideration of the convenience andneeds factor includes a review of the records of the rele-vant depository institutions under the Community Rein-vestment Act (12 U.S.C. §2901 %et seq.) ("CRA"). Asprovided in the CRA, the Board evaluates this factor inlight of examinations by the primary federal supervisor ofthe CRA performance records of the relevant institutions.An institution's most recent CRA performance evaluationis a particularly important consideration in the applicationsprocess because it represents a detailed on-site evaluationof the institution's overall record of performance under theCRA by its primary federal supervisor.7 AmSouth Ala-bama and all the banks involved in the proposal received"satisfactory" ratings at their most recent examination oftheir CRA performance by the Federal Reserve Bank ofAtlanta, as of October 7, 1996. Based on all the facts ofrecord, including the results of the relevant CRA perfor-mance examinations, the Board concludes that consider-ations relating to the convenience and needs of the commu-nities served are consistent with approval.

The Board also concludes that all the factors that mustbe considered under the Reigle-Neal Act and the FederalReserve Act also are consistent with approval.

Conclusion

Based on the foregoing and all the facts of record, theBoard has determined that this application should be ap-proved. Because the provisions of the Riegle-Neal Actrelied on for this determination do not become effectiveuntil June 1, 1997, the Board's action approving the pro-posal shall not be effective until June 1, 1997. The Board'sapproval of the proposal is conditioned on compliance byAmSouth Alabama with all the commitments made inconnection with this application. For purposes of this ac-tion, the commitments and conditions relied on in reachingthis decision are both conditions imposed in writing by theBoard and, as such, may be enforced in proceedings undeiapplicable law.

The merger of the Merging Banks with and into Am-South Alabama may not be consummated before the fif-teenth day following the June 1, 1997, effective date of thi:order, or later than three months after the effective date othis order, unless such period is extended by the Board oby the Federal Reserve Bank of Atlanta, acting pursuant t(delegated authority.

By order of the Board of Governors, this approval becomes effective June 1, 1997.

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

JENNIFER J. JOHNSOIDeputy Secretary of Boar

1. See Statement of the Federal Financial Supervisory AgenckRegarding the Community Reinvestment Act. 54 Federal Registt13,742,-13,745 (1989)



Appendix

Branch offices of AmSouth Florida to be established byAmSouth Alabama:

1. 100 North Tampa Street, Tampa, Florida 336022. 70 North Baylen Street, Pensacola, Florida 325013. 3300 North Pace Boulevard, Pensacola, Florida 322054. 575 North Navy Boulevard, Pensacola, Florida 325075. 5100 North 9th Avenue, Pensacola, Florida 325046. 8094 North Davis Highway, Pensacola, Florida 325147. 420 Mary Esther Cutoff, Mary Esther, Florida 325698. 400 Gulf Breeze Parkway, Gulf Breeze, Florida 325619. 4 East Nine Mile Road, Pensacola, Florida 32514

10. 1248 North Elgin Parkway, Shalimar, Florida 3257911. 6499 Caroline Street, Milton, Florida 3257012. 8022 Lillian Highway, Pensacola, Florida 3250613. 1200 John Sims Parkway, Niceville, Florida 3257814. 7130 North 9th Avenue, Pensacola, Florida 3250415. 4505 Sauffey Field Road, Pensacola, Florida 3252616. 6916 West Highway 98, Panama City, Florida 3240717. 12720 Middle Beach Road, Panama City, Florida

3240718. 100 Delwood Beach Road, Panama City, Florida 3241119. 100 Main Street, Destin, Florida 3254120. 25 Beal Parkway N.E., Ft. Walton, Florida 3254821. 469 West 23rd Street, Panama City, Florida 3240522. 5050 Highway 98 E., Destin, Florida 3254123. 212 Racetrack Road, Ft. Walton, Florida 3254724. 3373 Gulf Breeze Parkway, Gulf Breeze, Florida 3256625. 8094 North Davis Highway, Pensacola, Florida 3251426. 3102 Mahan Drive, Tallahassee, Florida 3230827. 3425 Thomasville Road, Tallahassee, Florida 3230828. 201 South Monroe Street, Tallahassee, Florida 3230129. 400 Cleveland Street, Clearwater, Florida 3461530. 33805 Highway 19 N., Palm Harbor, Florida 3468431. 1350 West Bay Drive, Largo, Florida 3464032. 13501 ICOT Boulevard, Clearwater, Florida 3462033. 3021 Enterprise Road, E., Clearwater, Florida 3461934. 3132 Tampa Road, Oldsmar, Florida 3467735. 2845 West Bay Drive, Belleair Bluffs, Florida 3464036. 604 East Druid Road, Clearwater, Florida 3461737. 3399 66th Street, N., St. Petersburg, Florida 3371038. 5728 Gulfport Boulevard, Gulfport, Florida 3370739. 5901 Sun Boulevard S., St. Petersburg, Florida 3371540. 3522 Bell Shoals Road, Valrico, Florida 3359441. 6424 Embassy Boulevard, Port Richey, Florida 3466842. 7512 State Road 52, Hudson, Florida 3466743. 14212 U.S. Highway 19 N., Hudson, Florida 3466744. 4010 Little Road, New Port Richey, Florida 3465545. 9701 Starkey Road, Largo, Florida 3464746. 1500 Belleair Road, Clearwater, Florida 3461647. 2575 Countryside Boulevard, Clearwater, Florida

3462148.4811 Gulf Boulevard, St. Petersburg Beach, Florida

3770649. 260 First Avenue, S., St. Petersburg, Florida 3370150. 1042 Main Street, Dunedin, Florida 3469851. 8250 Ninth Street, N., St. Petersburg, Florida 33702

52. 655 South Belcher Road, Clearwater, Florida 3462453. 3463 22nd Avenue N., St. Petersburg, Florida 3371354. 3505 Fourth Street, N., St. Petersburg, Florida 3370455. 9398 Oakhurst Road, Seminole, Florida 3464656. 4325 Park Boulevard, Pinellas Park, Florida 3466557. 601 Main Street, Safety Harbor, Florida 3469558. 7800 113th Street N., Seminole, Florida 3464259. 6800 Gulfport Boulevard S., South Pasadena, Florida

3370760. 2551 Sunset Point Road, Clearwater, Florida 3462561.905 Martin Luther King Jr. Drive, Tarpon Springs,

Florida 3468962. 5200 Est Bay Drive, Clearwater, Florida 3462463. 2323 Curlew Road, Palm Harbor, Florida 3468364. 2353 Stickney Point Road, Sarasota, Florida 3423165. 935 North Beneva Road, Sarasota, Florida 3423266. 4280 Bee Ridge Road, Sarasota, Florida 3423367. 1500 Pinehurst Drive, Spring Hill, Florida 3460668. 13944 North Dale Mabry, Tampa, Florida 3361869. 3902 Henderson Boulevard, Tampa, Florida 3362970. 8655 College Parkway S.W., Fort Myers, Florida 3391971. 13520 Cleveland Avenue N., N. Fort Myers, Florida

3390372. 1507 Cape Coral Parkway E., Cape Coral, Florida

3390473. 18621 North Tamaima Trail, N. Fort Myers, Florida

3390374. 2250 Avenida Del Vera, N. Fort Myers, Florida 3391775. 1821 Del Prado Boulevard, Cape Coral, Florida 3399076. 2100 Forrest Nelson Boulevard, Port Charlotte, Florida

3395277. 811 Anchor Rode Drive, Naples, Florida 3394078. 1697 Pine Ridge Road, Naples, Florida 3394279. 1400 Gulfshore Boulevard N., Naples, Florida 3394080. 5484 Rattlesnake Hammrock Road, Naples, Florida

3396281. 606 Bald Eagle Drive, Marco Island, Florida 3393782. 5909 Pine Ridge Road, Naples, Florida 3399983. 2150 Goodlette Road, Naples, Florida 3394084. 405 8th Street S., Naples, Florida 3447085. 406 East Silver Springs Boulevard, Ocala, Florida

3447086.20381 East Pennsylvania Avenue, Dunnellon, Florida

3443087. 9351 Maricamp Road, Ocala, Florida 3447288. 2800 East Silver Springs Boulevard, Ocala, Florida

3447089.451 South Highway 341-A, Silver Springs, Florida

3448890. 301 U.S. Highway 41 S., Inverness, Florida 3445091. 1290 South Broad Street, Brooksville, Florida 3460192. 1030 Southeast 17th Street, Ocala, Florida 3447193. 3860 North Lecanto Highway, Beverly Hills, Florida

3446594. 3232 Southwest College Road, Ocala, Florida 3447495. 10715 Southeast Highway 441, Belleview, Florida

3442096. 4556 South Suncoast Boulevard, Homosassa, Florida

34446



97. 2734 Northeast Jacksonville Road, Ocala, Florida34470

98. 8721 Southwest Highway 200, Ocala, Florida 3447499. 802 North Main Street, Bushnell, Florida 33513

100. 9356 San Jose Boulevard, Jacksonville, Florida 32257101. 233 East Bay Street, Jacksonville, Florida 32202102. 6263 St. Augustine Road, Jacksonville, Florida 32217103. 6524 Atlantic Boulevard, Jacksonville, Florida 32211104. 9421 Baymeadows Road, Jacksonville, Florida 32256105.4297 Roosevelt Boulevard, Jacksonville, Florida

32210106. 252 North Apopka Highway, Orlando, Florida 34761107. 65 North Orange Avenue, Orlando, Florida 32801108. 220 West Fairbanks Avenue, Orlando, Florida 32789109. 500 East Michigan Street, Orlando, Florida 32806110. 5401 South Kirkman Road, Orlando, Florida 32819111. 2350 North U.S. Highway 1, Mims, Florida 32754112. 2525 Garden Street, Titusville, Florida 32796113. 905 Cheney Highway, Titusville, Florida 32780114. 925 South Orlando Avenue, Orlando, Florida 32789115.5495 West Irlo Bronson Highway, Orlando, Florida

34746116. 14075 West Colonial Drive, Orlando, Florida 34787117. 2338 U.S. Highway 19, Holiday, Florida 34691

Branch offices of AmSouth Georgia to be established byAmSouth Alabama:

1. 101 East Washington, Summerville, Georgia 307472. 2101 Shorter Avenue, Rome, Georgia 301653. 3040 Martha Berry Highway, Rome, Georgia 301654. 400 North 5th Avenue, Rome, Georgia 301625. 1400 Turner McCall Boulevard, Rome, Georgia 301626. 208 North Wall Street, Calhoun, Georgia 307017. 385 Battlefield Parkway, Fort Oglethorpe, Georgia

307428. 710 North Main Street, Lafayette, Georgia 30728

Branch offices of AmSouth Tennessee to be established byAmSouth Alabama:

1. 2207 Crestmoor Road, Nashville, Tennessee 372152. 109 Walton Ferry Road, Henderson, Tennessee 370753. 150 West Main Street, Gallatin, Tennessee 370664. 5323 Mt. View Road, Antioch, Tennessee 370135. 330 Union Street, Nashville, Tennessee 372016. 181 Belle Forrest Circle, Nashville, Tennessee 372217. 5029 Harpeth Drive, Brentwood, Tennessee 370278. 2814 West End Avenue, Nashville, Tennessee 372039. 310 West College Street, Fayetteville, Tennessee 37334

10. Plaza Shopping Center Taft Highway, Signal Moun-tain, Tennessee 37377

11.3303 Cummings Highway, Chattanooga, Tennessee37419

12. One Union Square, Chattanooga, Tennessee 3740213. 4334 Ringgold Road, Chattanooga, Tennessee 3741214. 601 Market Center, Chattanooga, Tennessee 3740215. 5515 Brainerd Road, Chattanooga, Tennessee 3741116. 3894 Hixson Pike, Chattanooga, Tennessee 3741517. 4757 Highway 58, Chattanooga, Tennessee 3741618. 2120 Gunbarrel Road, Chattanooga, Tennessee 3742119. 8535 Hixson Pike, Hixson, Tennessee 3734320. 401 North Market Street, Dayton, Tennessee 3732121. 178 Paul Huff Parkway, Cleveland, Tennessee 3731222. 1965 Northpoint Boulevard, Chattanooga, Tennessee

3734323. 400 Ocoee Street, Cleveland, Tennessee 37311

Branch offices of AmSouth Walker to be established byAmSouth Alabama:

1.110 20th Street, Jasper, Alabama 355012. 310 Highway 78 W., Jasper, Alabama 35501

APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT

By the Secretaij of the Board

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

Section 3

Applicant(s) Bank(s) Effective Date

U.S. Bancorp,Portland, Oregon

Business & Professional Bank,Woodland, California

April 2, 1997



Section 4

Applicant(s) Bank(s) Effective Date

Barnett Banks, Inc.,Jacksonville, Florida

Crestar Financial Corporation,Richmond, Virginia

First Union Corporation,Charlotte, North Carolina

NationsBank Corporation,Charlotte, North Carolina

Southern National Corporation,Winston-Salem, North Carolina

Wachovia Corporation,Winston-Salem, North Carolina

HONOR Technologies, Inc.,Maitland, Florida

PNC Bank Corporation,Pittsburgh, Pennsylvania

Card Alert Services, Incv

Arlington, VirginiaApril 3, 1997

PNC GPI, Inc.,Wilmington, Delaware

April 7, 1997

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

ABC Employee Stock OwnershipPlan,Anchor, Illinois

Armstrong Financial Co.,Minden, Nebraska

BanPonce Corporation,Hato Rey, Puerto Rico

Popular International Bank, Inc.,Hato Rey, Puerto Rico

BanPonce Financial Corp.,Wilmington, Delaware

Coal City Corporation,Chicago, Illinois

Manufacturers National Corporation,Chicago, Illinois

The Colonial BancGroup, Inc.,Montgomery, Alabama

Commerce Bancshares, Inc.,Kansas City, Missouri

CBI-Kansas, Inc.,Kansas City, Missouri

Anchor Bancorporation, Inc.,Anchor, Illinois

Anchor State Bank,Anchor, Illinois

Minden Exchange Company,Minden, Nebraska

Seminole National Bank,Sanford, Florida

U.S. Bancorp, Inc.,Lansing, Illinois

Fort Brooke Bancorporation,Brandon, Florida

Fort Brooke Bank,Brandon, Florida

Shawnee Bank Shares, Inc.,Shawnee, Kansas

Chicago

Chicago

Atlanta

April 16, 1997

Kansas City April 17, 1997

New York March 28, 1997

March 28, 1997

April 4, 1997

Kansas City March 31, 1997



Section 3—Continued


Community Bankshares, Inc.,Denver, Colorado

Community Financial Corp.,Olney, Illinois

Community First Bankshares, Inc..Fargo, North Dakota

Decatur First Bank Group, Inc.,Decatur, Georgia

First Commercial Corporation,Little Rock, Arkansas

Guaranty Financial Corporation,Charlottesville, Virginia

MAXLOU Bancshares, Inc.,Tahlequah, Oklahoma

Southeast Arkansas BankCorporation,Lake Village, Arkansas

Texas Financial Bancorporation,Inc.,Minneapolis, Minnesota

Delaware Financial, Inc.,Wilmington, Delaware

USA BancShares, Inc.,Philadelphia, Pennsylvania

Wauneta Falls Bancorp, Inc.,Wauneta, Nebraska

First Western Bancorporation,La Jara, Colorado

American Bancshares, Inc.,Highland, Illinois

American Bank of Illinois in Highland,Highland, Illinois

KeyBank National Association,Cheyenne, Wyoming

Decatur First Bank,Decatur, Georgia

Southwest Bancshares, Inc.,Jonesboro, Arkansas

Guaranty Bank,Charlottesville, Virginia

Guaranty Savings & Loan, F.A.,Charlottesville, Virginia

First State Bank,Tahlequah, Oklahoma

Liberty Finance, Inc.,Tahlequah, Oklahoma

Jefferson County Bank of Fayette,Fayette, Mississippi

Kansas City

St. Louis

Minneapolis

Atlanta

St. Louis

Richmond

Kansas City

St. Louis

April 3, 1997

March 31, 1997

April 15, 1997

April 9, 1997

March 31, 1997

April 15, 1997

April 17, 1997

April 4, 1997

Austin County Bankshares, Inc., Dallas April 9, 1997Bellville, Texas

Austin County Bankshares-Delaware,Inc.,Wilmington, Delaware

Austin County State Bank,Bellville, Texas

Regent Bancshares Corp., Philadelphia April 10, 1997Philadelphia, Pennsylvania

Ogallala National Bank, Kansas City April 7, 1997Ogallala, Nebraska

Section 4

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

Pocahontas Bankstock, Inc.,Pocahontas, Arkansas

United Community Banks, Inc..Blairsville, Georgia

SecurAmenca Holding Corporation,Memphis, Tennessee

United Family Finance Co.,Blue Ridge, Georgia

St. Louis

Atlanta

April

April

3,

1,

1997

1997


534 Federal Reserve

Sections 3 and 4

Applicant(s)

Bulletin U June 1997

Nonbanking Activity /Company Reserve Bank Effective Date

Illinois Community Bancorp, Inc.,Effingham, Illinois

Old Second Bancorp, Inc..Aurora, Illinois

Illinois Guarantee Savings Bank, FSB St. Louis April 4, 1997Effingham, Illinois

Illinois Community Bank,Effingham, Illinois

Illinois Leasing Corporation, Inc.,Effingham, Illinois

Maple Park Bankshares, Inc., Chicago April 16, 1997Maple Park, Illinois

First State Bank of Maple Park,Maple Park, Illinois

Maple Park Mortgage Company,Maple Park, Illinois

APPLICATIONS APPROVED UNDER BANK MERGER ACTBy Federal Reserve Banks

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


Guaranty Bank,Charlottesville, Virginia

Pointe Bank,Pembroke Pines, Florida

Republic Security Bank,West Palm Beach, Florida

Guaranty Savings & Loan, FA..Charlottesville, Virginia

Pointe Federal Savings Bank,Boca Raton, Florida

Family Bank,Hallandale, Florida

Richmond April 15, 1997

Atlanta March 28, 1997

Atlanta April 2, 1997

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.

Cunningham v. Board of Governors, No. 97-1256 (D.C. Cir.,filed April 11, 1997). Petition for review of a Board orderdated December 20, 1996, increasing the amount of revenuethat a section 20 subsidiary may derive from underwritingand dealing in securities from 10 percent to 25 percent of itstotal revenue.

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.

Research Triangle Institute v. Board of Governors, No. 97-1282 (4th Cir., filed February 24, 1997). Appeal of districtcourt's dismissal of contract claim.

The New Mexico Alliance v. Board of Governors, No. 96-9552 (10th Cir., filed December 24, 1996). Petition forreview of a Board order dated December 16, 1996, approv-ing the acquisition by NationsBank Corporation and NBHoldings Corporation, both of Charlotte, North Carolina, ofBoatmen's Bancshares, Inc., St. Louis, Missouri. Also onDecember 24, 1996, petitioners moved for an emergencystay of the Board's order. The motion for a stay was deniedby the 10th Circuit on January 3, 1997; on January 6, 1997,petitioners' application for emergency stay was denied bythe Supreme Court.

Artis v. Greenspan, No. l:96CV02619 (D.D.C., filed Novem-ber 19, 1996). Employment discrimination action. On De-cember 20, 1996, the Board moved to dismiss the action.

Snyder v. Board of Governors, No. 96-1403 (D.C. Cir., filedOctober 23, 1996). Petition for review of Board order datedSeptember 11, 1996, prohibiting John K. Snyder andDonald E. Hedrick from further participation in the banking



industry. On November 21, 1996, the Board moved todismiss 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 January 17, 1997, the parties filed cross-motionsfor summary judgment.

Clifford v. Board of Governors, No. 96-1342 (D.C. Cir., filedSeptember 17, 1996). Petition for review of Board orderdated August 21, 1996, denying petitioners' motion todismiss enforcement.action against them. On November 4,1996, the Board filed a motion to dismiss the petition.

Artis v. Greenspan, No. 96-CV-02105 (D. D.C, filed Septem-ber 11, 1996). Class complaint alleging race discriminationin employment. On December 20, 1996, the Board movedto dismiss the action.

Leuthe v. Board of Governors, No. 96-5725 (E.D. Pa., filedAugust 16, 1996). Action against the Board and otherFederal banking agencies challenging the constitutionalityof the Office of Financial Institution Adjudication. On Janu-ary 24, 1997, the agencies filed a motion to dismiss theaction.

Long v. Board of Governors, No. 96-9526 (10th Cir., filedJuly 31, 1996). Petition for review of Board order datedJuly 2, 1996, assessing a civil money penalty and cease anddesist order for violations of the Bank Holding CompanyAct. Oral argument is scheduled for May 12, 1997.

Interamericas Investments, Ltd. v. Board of Governors, No.96-60326 (5th Cir., filed May 8, 1996). Petition for reviewof order imposing civil money penalties and cease anddesist order in enforcement case. On August 20, 1996,petitioners' motion for a stay of the Board's orders pendingjudicial review was denied by the Court of Appeals. OnApril 16, 1997, the court denied the petition for review.

Inner City P res si Community on the Move v. Board of Gover-nors, No. 96-4008 (2nd Cir., filed January 19, 1996). Peti-tion for review of a Board order dated January 5, 1996,approving the applications and notices by Chemical Bank-ing Corporation to merge with The Chase Manhattan Cor-poration, both of New York, New York, and by ChemicalBank to merge with The Chase Manhattan Bank, N.A., bothof New York, New York. Petitioners' motion for an emer-gency stay of the transaction was denied following oralargument on March 26, 1996. The Board's brief on themerits was filed July 8, 1996. The case was consolidated fororal argument and decision with Lee v. Board of Governors,No. 95-4134 (2d Cir.); oral argument was held on Janu-ary 13, 1997.

Lee v. Board of Governors, No. 95^-134 (2nd Cir., filedAugust 22, 1995). Petition for review of Board orders datedJuly 24, 1995, approving certain steps of a corporate reorga-nization of U.S. Trust Corporation, New York, New York,and the acquisition of U.S. Trust by Chase ManhattanCorporation, New York, New York. On September 12,

stay of the Board's orders. The Board's brief was filed onApril 16, 1996. Oral argument, consolidated with Inner CityPresslCommunity on the Move v. Board of Governors, tookplace on January 13, 1997.

Beckman v. Greenspan, No. 95-35473 (9th Cir., filed May 4,1995). Appeal of dismissal of action against Board andothers seeking damages for alleged violations of constitu-tional and common law rights. The appellants' brief wasfiled on June 23, 1995; the Board's brief was filed onJuly 12, 1995.

In re Subpoena Duces Tecum, Misc. No. 95-06 (D.D.C., filedJanuary 6, 1995). Action to enforce subpoena seeking pre-decisional supervisory documents sought in connection withan action by Bank of New England Corporation's trustee inbankruptcy against the Federal Deposit Insurance Corpora-tion. The Board filed its opposition on January 20, 1995.Oral argument on the motion was held July 14, 1995.

Board of Governors v. Pharaon, No. 91-CIV-6250 (S.D. NewYork, filed September 17, 1991). Action to freeze assets ofindividual pending administrative adjudication of civilmoney penalty assessment by the Board. On September 17,1991, the court issued an order temporarily restraining thetransfer or disposition of the individual's assets.

FINAL ENFORCEMENT DECISION ISSUED BY THE BOARD

OF GOVERNORS

In the Matter of

Charles R. Vickery, Jr.,Former Senior Chairman of the Board

First National Bank of BellaireBellaire, Texas

Docket No.AA-OCC-EC-96-95

Final Decision

This is an administrative proceeding pursuant to sec-tion 8(e) of the Federal Deposit Insurance Act ("FDIAct"), 12U.S.C§1818(e), in which the Office of theComptroller of the Currency of the United States of Amer-ica ("OCC") seeks to prohibit Respondent Charles R.Vickery from further participation in the affairs of anyfederally-supervised financial institution as a result of hisconduct during his former affiliation with First NationalBank of Bellaire, Bellaire, Texas (the "Bank"). As re-quired by statute, the OCC has referred the action to theBoard of Governors of the Federal Reserve System (the"Board") for final decision.

The proceeding comes before the Board in the form of a66-page Recommended Decision by Administrative LawJudge ("ALJ") Walter J. Alprin, issued following an ad-



mended Decision, the ALJ found that Vickery hadbreached his fiduciary duty to the Bank by arranging to bepaid, as "referral fees," a portion of the title insurancepremium paid in connection with real estate loans thatVickery caused the Bank to make. Recommended Decision("RD") 4. The ALJ concluded that this misconduct fulfilledthe requirements for prohibition from banking in that itresulted in financial gain to Vickery and reflected hispersonal dishonesty and continuing disregard for the safetyor soundness of the Bank. In Vickery's lengthy exceptionsto these findings and conclusions, Vickery does not disputehis receipt of the payments, but denies that they reflectedany impropriety.

Based on a review of the record and the argumentsraised by Vickery, the Board rejects Vickery's exceptionsfor the reasons stated by the ALJ in the RecommendedDecision, except as specifically noted in this Final Deci-sion. The Board adopts OCC Enforcement Counsel's ex-ceptions to the limited term of prohibition recommendedby the ALJ and to the ALJ's recommended determinationthat Vickery's conduct did not reflect a willful disregardfor safety or soundness.

that the services were actually performed. Rule P-22(F),OCC Ex. 8 at 9. The rule also requires that the titleinsurance company verify in writing that "No portion ofthe charge for the services actually rendered shall be attrib-utable to, and no payment shall be made for the solicitationof, or as an inducement for the referral or placement of thetitle insurance business with the company." Id.

B. Procedural History

The OCC issued a Notice of Intention to Prohibit FurtherParticipation against Vickery on January 26, 1996. RD 1.Simultaneously, the OCC brought an action against Vick-ery seeking a civil money penalty of $250,000. Both ac-tions were addressed in a common hearing before the ALJand by the ALJ's Recommended Decision. Unlike thisprohibition decision, the final decision as to the civil moneypenalty action is statutorily assigned to the Comptroller.12U.S.C§ 1818(h), (i). The Board takes official noticethat, on March 31, 1997, the Comptroller issued a finalDecision and Order assessing the full $250,000 amountagainst Vickery.

/. Statement of the Case

A. Statutory and Regulatory Framework

7. Standards for Prohibition Order

Under the FDI Act, the ALJ is responsible for conductingan administrative hearing on a notice of intent to prohibit.12U.S.C § 1818(e)(4). Following the hearing, the ALJissues a recommended decision that is referred to theBoard, and the parties may file exceptions to the ALJ'srecommendations. The Board makes the final findings offact, conclusions of law, and determination whether toissue an order of prohibition. Id.; 12 C.F.R. 263.40.

To issue a prohibition order under the FDI Act, theBoard must make each of three findings:

(1) There must be a specified type of misconduct—violation of law, unsafe or unsound practice, or breachof fiduciary duty;(2) The misconduct must have a prescribed effect—financial gain to the respondent or financial loss or otherdamage to the institution; and(3) The misconduct must involve culpability of a certaindegree—personal dishonesty or willful or continuingdisregard for the safety or soundness of the institution.

2. Title Insurance Premium Splitting.

Applicable Texas Department of Insurance Rules providethat a title insurance company is permitted to make pay-ments only to persons who have actually rendered servicescommensurate with the payment. Rule P-22, OCC Exhibit("Ex.") 8 at 9. The payee must submit an invoice stating indetail the services performed, and the payor must verify

II. Findings of Fact

1. Relevant Persons and Institutions

First National Bank of Bellaire was at all times relevant tothis proceeding a national bank subject to supervision bythe OCC. RD 5. Vickery was the Senior Chairman of theboard of directors of the Bank from 1967 until he wasterminated by the board of directors in 1994. RD 5. AsSenior Chairman, Vickery was responsible for approvingand supervising all banking activities, including loans,investments, operations, and asset/liability management.RD 6. Vickery was also the principal shareholder of theBank, owning or controlling about 40 percent of the Bank'soutstanding shares in 1991. RD 5. He was also a principalshareholder of other banks, including Texas National Bankof Baytown and Mayde Creek Bank, N.A. RD 6. Duringthe time central to this action, mid-1991 to early 1992,Vickery was also chairman of the Bank's executive com-mittee and a member of the loan committee. RD 5. Theother members of the loan committee were G. WarrenColes, Chairman and president of the Bank, and CraigWooten, the Bank's executive vice-president and chiefoperating officer. RD 7. Vickery was also an active mem-ber of the Texas State Bar from 1948 to September 1988,when he requested inactive status. RD 6.

During his banking career, Vickery's affiliated banksengaged in repeated litigation with banking regulators. Inone case, the OCC was upheld by both a district court andthe Fifth Circuit Court of Appeals in its direction that thebanks cease the practice of distributing credit life insuranceincome to Vickery and other bank insiders in connectionwith loans that they had arranged for the Bank to make.



First Nat'I Bank of LaMarque v. Smith, 436 F. Supp. 824(S.D. Tex. 1977), aff'd 610 F.2d 1258 (5th Cir. 1980).1

Vickery maintained a longstanding practice of collectingcommissions from title insurance companies in return forreferring borrowers to them. OCC Ex. 45 at 5. Amongthese companies was Sovereign, which would pay Vickerya commission of 20 percent of the insurance premiums forissuing a title policy arising from real estate transactionsfinanced by loans from Vickery-affiliated banks. RD 6;Coles Tr. 1110; OCC Ex. 45 at 5. Sovereign's representa-tive in these transactions was P.B. Dover, a registered titleinsurance agent and attorney, who began paying Vickerythe "referral fees" in 1982. Dover Tr. 428, 429. Dovertestified that he entered into the arrangement because Vick-ery had earlier maintained a similar arrangement withanother title insurance company and Dover understood thatthis was the price of doing business. Dover Tr. 430. By1991, the Texas Department of Insurance had issued rules,intended to prevent rebates and kickbacks that were driv-ing up the cost of insurance, that prohibited title insurancecompanies from making payments to induce referrals forplacement of title insurance business and required that anypayments be justified by the performance of actual ser-vices. Rule P-22(H), (E); OCC Ex. 8 at 9; Hopson Tr. 687.Dover stopped paying the referral fees after the insuranceregulations changed, but resumed them after Vickery de-manded to know where his referral fee was and advisedDover that the regulations did not apply to referral feesamong lawyers. Dover Tr. 431.2 Dover continued to payVickery referral fees until 1994. Dover Tr. 437.

2. The Moore Loans

Between June 1991 and February 1992, the Bank origi-nated a series of 23 loans to real estate developer Jerry J.Moore and his wife, and to corporations owned by them.The loans were secured by shopping center propertiesowned by the Moores. RD 7. The total dollar volume of theMoore loans originated by the Bank was about $46 mil-lion; the Bank retained about $24 million of that amount,selling participations in the remainder to its affiliates.RD7?

Vickery was the Bank's representative in negotiating theterms of each of the Moore loans, RD 7, and was viewedby the Bank's board of directors as the loan officer on theMoore loans. RD 22; Olsen Tr. 784. The other members ofthe loan committee had little influence on the decision to

1. In another case, the OCC was upheld in part and reversed in partwhen it imposed a cease and desist order against the Bank. First Nat'IBank of Bellaire v. Comptroller of the Currency, 697 F.2d 674 (5thCir. 1983). An aspect of the order that was upheld required that theBank take action to prevent further violations of the restrictions onloans to bank insiders. 697 F.2d at 683-84. In a third case, the FifthCircuit upheld the OCC's cease and desist order against the Bank andits affiliates for violations of lending limits in connection with theloans involved in the present action. Texas National Bank v. Depart-ment of the Treasury, 50 F.3d 1033 (5th Cir. 1995) (table).

2. Vickery told Dover that if he were not willing to pay the fees hewould find someone else to do it. Dover Tr. 431-32.

make the loans: The ALJ found that Coles "acceded" toeach loan and that Wooten had little involvement with theMoore loans. RD 7-8. Vickery assumed responsibility forcredit and final approval of each loan. Coles Tr. 1089. Eachof the loans was approved, booked, and funded beforebeing presented to the Bank's board of directors for ratifi-cation. RD 22; Coles Tr. 1134; Olsen Tr. 783; Wooten Tr.598. One of the directors resigned because of his concernabout the Moore loans. Levy Tr. 1073. The minutes of theBank's board of directors meetings contain no evidence ofany formal disclosure by Vickery of his arrangement withSovereign or his receipt of payments in connection withthe Moore loans. RD 22.

In choosing a title insurance company in connectionwith the loans, Vickery's preference for Sovereign wasoverridden by Moore's insistence on the use of Common-wealth Land Title, a title insurance company with whichMoore had been doing business for 30 years. RD 8. Inresponse, Coles advised Moore that any change in titlecompanies would have to be approved by Vickery. RD 8;Coles Tr. 1110; OCC Ex. 40. As part of the loan negotia-tion process, Moore told Vickery that Commonwealthwould be closing the Moore loans, and that Vickery wouldhave to accept that or work it out with Commonwealth. RD8-9; Moore Tr. 78; Coles Tr. 1095. Vickery told Coles thatCommonwealth could be used as the title insurer, but that"Commonwealth would have to honor the same kind ofagreement fVickery had] with Sovereign on the title poli-cies". RD 9; Coles Tr. 1111-1112, 1113, 1125. This re-quirement was honored by Commonwealth, which in everycase paid 20 percent of the gross insurance premium toVickery or his proxy, Sovereign.

In connection with the first Moore loan, Commonwealthpaid the 20 percent cut directly to Vickery's defunct lawfirm, despite the fact that the Bank was represented byseparate outside counsel who was paid directly from theloan proceeds. For the remaining loans, the payments toVickery were made more circuitously.

Sometime before August 8, 1991, Vickery telephonedDover and told him that he would be receiving somechecks that he had "to run through Sovereign Title Compa-ny," and that in return for handling the paperwork in-volved, Dover could keep the greater of five percent or$500 of the check proceeds and should send the remainderto Vickery. RD 13; Dover Tr. 437-38, 460. Following thisconversation, Dover received a package of premium-splitting certification forms from Commonwealth thatcalled for Dover to certify that he had performed specifiedservices on each of 12 Moore loans in return for Common-wealth's payment to Sovereign of 20 percent of the titleinsurance premium. Dover called Commonwealth for fur-ther instructions, signed the certification forms, and re-turned them to Commonwealth. RD 14. Despite his certifi-cation that he had performed services in return for thepayments, Dover admitted that he did no work on theMoore loans, and was unaware of any work performed byVickery. RD 21; Dover Tr. 453-54.

On or around August 16, 1991, Commonwealth sentDover two checks totalling $31,483 payable to Sovereign,



representing 20 percent of the title insurance premiumsCommonwealth earned on the 12 Moore loans betweenJuly 19 and August 6, 1991. RD 14. Dover deposited theproceeds of both checks into his personal account, and thenused the funds to buy two cashier's checks, one for Vick-ery in the amount of $29,908, and the other which he kepthimself in the amount of $1,574, or five percent of the totalamount received from Commonwealth. RD 15. Dover usedthe same procedure for amounts received from Common-wealth in connection with loans made on August 9, 1991($4,208 before splitting), September 11 ($7,725), Octo-ber 11 ($8,097), and January 3, 1992 ($2,113). RD 15-21.In each case, Commonwealth sent Dover 20 percent of itsinsurance premium, and Dover retained $500 or five per-cent of that amount and forwarded the remainder to Vick-ery.

Vickery thus received personal payments in connectionwith each of the Bank's 23 loans to the Moores, totallingabout $52,880. RD 10; OCC Ex. 33-38.

///. Conclusions of Law

A. Misconduct

1. Breach of Fiduciary Duty

The Board adopts the ALJ's recommended conclusion that,on the above facts, Vickery violated the duty of loyalty thathe owed the Bank to refrain from engaging in self-dealingor conflicts of interest. RD 30. "The threshold inquiry inassessing whether a director violated his duty of loyalty iswhether the director has a conflicting interest in the transac-tion. Directors are considered to be 'interested' if theyeither "appear on both sides of a transaction [ ] or expect toderive any personal financial benefit from it in the sense ofself-dealing, as opposed to a benefit which devolves uponthe corporation or all stockholders generally." In re Se'id-man, 37 F.3d 911, 934 (3d Cir. 1994); quoting In re Bush,OTSAP 91-16 at 11, 15-16.

Indeed, these principles have been applied to an analo-gous situation involving Vickery, Coles, and the Bank. In1976, the OCC issued policy directives requiring that Vick-ery and the officers in his affiliated banks cease the practiceof selling credit life insurance in conjunction with loansmade by their banks in return for commissions paid by theinsurance company to them personally, rather than thebank. First National Bank Of LaMarque v. Smith, 436 F.Supp. 824, 826-27. (S.D. Tex. 1977), aff'd in part, 610F.2d 1258 (5th Cir. 1980). Upon a challenge by the banksto the policy directive, both the district court and the courtof appeals upheld the OCC's actions and condemned theconflict of interest represented by insiders pocketing profitsfrom the credit life sales. The Fifth Circuit emphasizedthat:

The payment to and retention by loan officers of commis-sions derived from the sale of credit life insurance involves aninherent conflict of interest: the loan officer's judgment maybe influenced by his direct financial reward from making the

loan. As a result, the officer may be induced to make a loan hewould not otherwise have considered sound. When loan offic-ers are allowed to retain commissions, the prospect of finan-cial gain is interjected into the lending decision. 610 F.2d1265.

Under this authority, it is clear that Vickery breached hisfiduciary duty of loyalty to the Bank.3 Receipt of thekickbacks of title insurance premiums, like the pocketedprofits from the sale of credit life insurance premiums,caused Vickery to have a personal financial stake in theloans made by the Bank that could have influenced hislending decisions and his recommendation of title insurers.As Bank lending officer, Vickery's duties to the Bankincluded denying loan applications that were not in theBank's interests. His personal interests, on the other hand,were directly served by ensuring that loans were made inany case, the bigger the better, so that he would receive hisreferral fees from the title insurance company.4 Further-more, Vickery's choice of title insurance companies wasnot made solely in the interests of the Bank, but wasinfluenced by which company would be willing to pay hisreferral fees. Thus, Vickery's responsibilities as loan offi-cer of the Bank were compromised by the incentive tomake loans and utilize title insurance companies for rea-sons other than the best interests of the Bank.

The Board adopts the ALJ's determination that the pay-ments to Vickery constituted "referral fees"—or, in theterm used by a Texas title insurance regulator,"kickbacks"—and rejects Vickery's alternative and mutu-ally contradictory explanations for the payments. Theseexplanations are either incredible on their face, wouldpresent similar conflicts even if true, or are unsupported bythe record. First, contrary to his other characterizations andwithout business explanation, he states that he did notknow what the payments were for, but that he thought theywere paid "out of the goodness of [Commonwealth's]heart" (Vickery Tr. 119, 127). Next, he suggests that thepayments were fees for services performed for Common-wealth (Excep. 14). If that were so, that would only under-score, not alleviate, the conflict of interest. Vickery was theBank's fiduciary, and therefore had a duty not to provideservices to another party in a transaction in which the Bankwas involved. Third, he claims that the payments were forservices performed for the Bank. The record does not

3. Vickery excepts to the ALJ's determination that he was requiredto avoid even the appearance of a conflict of interest. RD 4. Becausethe evidence clearly establishes that Vickery engaged in an actualconflict of interest, it is not necessary to reach this issue, and theBoard, like the Comptroller, does not adopt the ALJ's conclusion onthe appearance issue. See OCC Decision and Order at 12 n.5. For thesame reason, the Board need not reach the issue, raised in OCCEnforcement Counsel's exceptions, of whether Vickery's actions alsobreached his duty of care. See OCC Decision and Order at 7.

4. In addition, the availability of kickbacks created an incentive forVickery to prefer real estate-secured lending over other kinds of loansin order to assure the participation of a title insurer that would providehim fees. In certain market conditions, such a preference might wellbe harmful to a bank.



support a finding that Vickery performed any such ser-vices.5

In short, Vickery is correct only when he characterizesthe payments as similar to the kind of commissions orreferral fees he had been paid by Sovereign for 20 years.Excep. 19, 21; OCC Ex. 45. That characterization, how-ever, is no defense: these previous payments also repre-sented breaches of Vickery's fiduciary duty of loyalty.

Nor is Vickery's precise role in the loan transactionscrucial to the determination that he had a conflict of inter-est. In his exceptions, Vickery denies that he had ultimatedecisionmaking authority for the Moore loans (Excep. 5-6,18). But even if Vickery had merely recommended, ratherthan approved, the loans, his receipt of fees would havebeen a conflict of interest and a breach of fiduciary duty.6

Similarly, Vickery's argument that he did not give de-tailed instructions to Dover as to the handling of thepayments (Excep. 7, 13) is immaterial. Whatever his in-structions, they were sufficient to cause Dover to forwardto him payments from Commonwealth. Moreover, the ALJhad ample basis for resolving credibility issues againstVickery and in favor of Dover's detailed recollection ofVickery's instructions.

There is also no basis for Vickery's argument that hisconflict of interest is benign because the interests of theBank and the title insurer are coincident. Even though thetitle insurer and the Bank have a common interest inassuring that the borrower has good title to its security,their interests diverge in that the title insurer's interest is inmaximizing the volume of business, while a bank's interestincludes rejecting dubious loans — and in complying withregulatory limits on concentration of lending. The Bank'sinterests also include, in approving the use of a title insur-ance company, consideration of that company's record ofperformance when a claim is made under a policy—a point

5. In transactions in which the Bank was represented by counsel itscounsel was not Vickery. According to Dover, Sovereign performedno services for the Bank in connection with the loans. Moreover,Vickery was in the hospital during several of the closings. Even ifVickery had provided services to the Bank, he offers no explanation asto why his Bank salary—in excess of $149,000—did not sufficientlycompensate him for such services, or why Commonwealth would payhim out of its insurance premium for services rendered to the Bank.

6. In any event, the record flatly contradicts Vickery's assertion.Vickery does not contest that he negotiated the loans with Moore orthat Moore viewed him as the ultimate decisionmaker. Coles testifiedthat Vickery had the ultimate say as to making the loans, that the thirdmember of the loan committee was not consulted after the loans beganto be made, and that Vickery made a decision to keep making theloans over Coles' objections. Coles Tr. 1089, 1099-1100, 1124. TheBoard of directors only approved the loans after they had been made.See Levy Tr. 715 (by the time the Board approved the loans, "theseloans were done deals"); Edwards Tr. 897 (board discussion of theMoore-related loans consisted of: "The loans have been made. You allneed to approve them"); Vickery Tr. 304 (the board "never hadarguments or discussions of loans. They just have a list of loans, andthe board approves them, and that is that"). Vickery's dominance ofthe board was such that if a director "crossed" Vickery, he would notbe renominated for the board the next year; when Vickery's brotherwas not renominated, Vickery had two policemen escort him out ofthe building. Edwards Tr. 902.

at which the interests of the bank and those of the insurercertainly diverge. Furthermore, an overlap of institutionalinterests does not as a general matter negate the conflict. InLaMarque, the Fifth Circuit found self-dealing and anunsafe and unsound practice where individual bank insid-ers profited from the sale of credit life insurance, eventhough the court found that that insurance benefitted banks,borrowers and insurers. The same is true here. Even assum-ing that title insurance benefits the lender, the lendingofficer's personal stake in placing such insurance consti-tutes a conflict of interest. See generally Pepper v. Litton,308 U.S. 295, 311 (1939) (fiduciary may not utilize hisstrategic position for personal gain).

The Board therefore rejects Vickery's arguments thatthese facts do not establish a proscribed conflict of interestor breach of fiduciary duty.7 Excep. at 44-75. Vickery'sattempts to distinguish other conflict of interest cases asmore heinous do not in any way redeem his conduct.Excep. 46-49. While Vickery may not have explicitlyconditioned the making of the loans on the receipt of thefees, he took active steps to ensure that he would receivefunds directly in connection with those loans. In any event,as discussed above, a bank officer has a duty to make alending decision free from any personal financial stake inthe transaction.

The Board also adopts the ALJ's recommendation thatVickery violated his duty of candor by failing to inform theofficers and directors of his potential financial interest inthe Moore loans. The general knowledge or inference ofColes and Wooten that Vickery was receiving commissionsin connection with title insurance carries no weight in lightof Vickery's dominance of the bank and the absence of anyrecord, such as a board of directors vote, that would havebrought the payments to the attention of regulators. SeeGreenberg v. Board of Governors, 968 F.2d 164, 171 (2dCir. 1992) (minutes of board of directors meetings silent asto conflict relationship). The Board finds, however, that theabsence of disclosure bears more directly upon Vickery'sculpability than upon the existence of a conflict, in that it isnot clear that a conflict arising out of a bank officer'spersonal financial interest in a transaction could be curedby board of directors approval.8 Furthermore, the sugges-tion that Vickery should have removed himself from theloan approval process because of the conflict, an action that

7. The breach of fiduciary duty caused by Vickery's self-dealing isnot affected by the fact that it was not also a usurpation of corporateopportunity—i.e., that Vickery's kickbacks did not properly belong tothe Bank. Excep. 49-51. In LaMarque, the Fifth Circuit affirmed thedistrict court's decision that the personal profit from the sale of creditlife insurance constituted self-dealing even though it vacated theportion of the district court's decision that addressed usurpation ofcorporate opportunity. 610 F.2d at 1263. Accordingly, LaMarquemakes clear that such self-dealing is a breach of fiduciary duty and anunsafe and unsound practice even if it is not also a usurpation ofcorporate opportunity.

8. See LaMarque, 436 F. Supp. at 830 ("The illegality of self-dealing exists regardless of the financial strength of the plaintiff banks.'Full disclosure' of the practice of all shareholders cannot legitimizethis type of self-dealing.").



is appropriate in many conflict situations, is circular in thiscase. Had Vickery not been involved as the lending officer,the title insurer would have had no reason to make pay-ments to him and the conflict would not have existed.Accordingly, while recusal or board of directors approvalmay cure some conflicts, this is not such a case.9

B. Effects

There is no dispute that Vickery's breach of fiduciary dutydid not cause financial loss to the Bank, but there is also nodispute that Vickery received financial gain from the refer-ral commissions. RD 46. His percentage, 20 percent of thetitle insurance premiums less the five percent of thatamount or $500 for Dover, amounted to $52,881. RD 48.That financial gain is sufficient to establish the secondcategory of prohibition requirements.

C. Culpability

The ALJ determined that Vickery's conduct reflected bothpersonal dishonesty and a continuing disregard for safetyor soundness, but did not find that it established a willfuldisregard for safety or soundness. Vickery excepts to thefirst two findings and OCC Enforcement Counsel exceptsto the third.

The Board finds that ample evidence supports the con-clusion that Vickery's conduct reflected personal dishon-esty and both willful and continuing disregard for thesafety and soundness of the Bank. The standard for per-sonal dishonesty is clearly met by the evidence supportingthe ALJ's findings that Vickery lacked integrity, fairness,straightforwardness, and trustworthiness, and displayed adisposition to lie and misrepresent the facts. RD 49. Thearrangement that Vickery worked out with Dover to "runchecks through" Sovereign displays an intent to shield thetransactions from regulatory scrutiny, and Vickery's indica-tion to Dover that it would involve some paperwork indi-cates a consciousness that Dover would be required to filefalse certifications that he had performed services in con-nection with the closing. RD 50—51. Further, the Boardadopts the ALJ's credibility determination that Vickery

9. In his exceptions, Vickery objects to the ALJ's official notice of aprior OCC decision, affirmed by the Fifth Circuit, which held that theBank and other Vickery-controlled banks had violated legal lendinglimits with respect to the Moore loans. The ALJ limited his consider-ation of this proceeding with respect to the prohibition action to itspotential bearing on Vickery's culpability. RD 2 n.2. The only issuedetermined in that proceeding—that the Moore loans violated theBank's lending limits—is irrelevant to the existence of the breach offiduciary duty found here. Vickery's conflict would have existed hadthe Moore loans complied with the lending limits. Accordingly, be-cause the two cases involve different claims, there is no res judicatabar to considering the prior proceeding. Moreover, to the extent thatthe fact that the Moore loans violated lending limits bears on Vick-ery 's culpability, the facts established in the prior proceeding may beused collaterally against Vickery in this proceeding, as his ability tocontrol the prior litigation establishes that he was in privity with theBank. See Restatement (Second) of Judgments 39.

intentionally misled the Texas Finance Commission whenhe testified under oath on October 16, 1992, that he had noknowledge of the $2,432 fee paid to "Vickery Law Corpo-ration" by Commonwealth on the first Moore loan. RD 44;OCC Ex. 51. As the ALJ found, it "simply is not credible"that Vickery would have forgotten about the payment, inlight of the controversy surrounding the Moore loans. RD44-45. That false answer under oath displays a dispositionto falsehood that reflects personal dishonesty. RD 51; OCCEx.51 at 38.

The Board also finds that Vickery's conduct reflected awillful disregard for safety or soundness. The Board haspreviously found that a "willful disregard for safety orsoundness" is established by intentional conduct that con-stitutes an unsafe or unsound banking practice. In re Ma-gee, 78 Federal Reserve Bulletin 969, 974 (1992). There isno question that Vickery's arrangement of the referral feeswas conduct intentionally engaged in—indeed that it hadbeen consistently engaged in for decades, despite knowl-edge that similar payments had been found to constitute anunsafe or unsound practice and breach of fiduciary duty inLaMarque. Such deliberate conduct is unquestionably will-ful.

Vickery's "disregard for safety or soundness" is estab-lished because his self-dealing constituted an unsafe orunsound practice. As the Board has previously observed:

The safety or soundness element addresses the nature,rather than the degree, of the departure from ordinarystandards of prudent banking. Conduct departing fromsuch standards represents an unsafe or unsound bankingpractice when it is of a kind that, if continued, wouldpresent an abnormal risk—i.e., risks other than thoseinherent in doing business—of harm or loss to the bank.

In re Van Dyke, No. AA-EC-87-88 (June 13, 1988), slipop. at 26, afd, Van Dyke v. Board of Governors, 876 F.2d1377, 1380 (8th Cir. 1989); see Greene County Bank v.FDIC, 92 F.3d 633, 636 (8th Cir. 1996) (unsafe or unsoundpractice is conduct deemed contrary to accepted standardsof banking operation which might result in abnormal riskor loss to a banking institution or shareholder).

Here, the self-dealing practice is contrary to ordinarystandards of prudent banking because it creates incentivesto make loans and deal with title insurers for reasons otherthan the bank's best interests. A lending officer whosejudgment is skewed by personal interest has the potentialto commit a bank to loans that would expose the Bank toabnormal risk of harm or loss. Under the Board's stan-dards, therefore, Vickery's conduct reflected a willful dis-regard for the Bank's safety and soundness.

The ALJ's conclusion to the contrary used an overly-narrow standard that would require a finding that an indi-vidual deliberately exposed the Bank to abnormal risk ofloss or harm (RD 54), a standard that incorrectly appears torequire that an individual intend or be conscious of poten-tial harm to the Bank. Because the statute plainly contem-plates prohibition of individuals who benefit from theirpractices even if the bank is as yet unharmed, the culpabil-ity standard must be sufficiently broad to embrace schemesdesigned solely to enrich the individual, if the practice is of



a type that could cause harm to the bank. The practice ofmaking lending decisions with a personal financial interestacting as a thumb on the decisional scales is clearly apractice that exposed the Bank to abnormal risk of loss orharm.10

The Board also adopts the ALJ recommended conclu-sion that Vickery engaged in "continuing disregard for thesafety and soundness of the institution," a standard thatcaptures conduct reflecting recklessness or indifferencewith respect to an institution's safety. See Brickner, 747F.2d at 1203 n.6.; Grubb v. FDIC, 34 F.3d 956, 962 (10thCir. 1994). This series of loans was made over a period ofsome months, and Vickery's arrangement for personal feeswas made against a backdrop of previous cases in whichthe Comptroller and the courts had made clear that thecollection of such fees was not only improper but poten-tially hazardous to the institution. Both the district courtand the Fifth Circuit in the LaMarque case informed Vick-ery in no uncertain terms that the receipt of personal gainby a lending officer in connection with bank businessconstitutes self-dealing and an unsafe and unsound prac-tice. LaMarque, 610 F.2d at 1265. Vickery was quite awareof those rulings. E.D. Vickery Tr. 853; Vickery Tr. 265.Vickery was also aware that fee-splitting among title insur-ance companies for referrals had been prohibited by Texasregulation. Dover Tr. 431. Notwithstanding these bases forcaution, Vickery nevertheless arranged the Dover scheme,creating a conflict of interest with his responsibilities as alending officer. It is not a defense that the relatively smallamount that Vickery received in referral fees may not havebeen the primary reason why Vickery decided to make theloans, since a lending officer should not place himself in aposition where his personal financial interest plays any rolein a lending decision. Accordingly, Vickery's repeatedself-dealing in arranging referral fees for the Moore loanssatisfies the standard for continuing disregard for the safetyor soundness of the Bank.

Finally, the ALJ recommended that the Board order thatVickery be prohibited for only a fixed term of three years,rather than indefinitely. The ALJ based this recommenda-tion on Vickery's age, ill health, and the fact that hisconduct did not harm the Bank directly. RD 56. The Boarddeclines to adopt this recommendation. To the extent thatthe Board has authority to issue a limited-term prohibition,it does not choose to exercise that authority in the circum-stances of this case. The assumed absence of harm to thebank carries little weight as a mitigating factor in that, asnoted above, the FDI Act plainly contemplates that aprohibition order can be based solely on financial gain,even if the bank is not harmed. Vickery's decades ofself-dealing reflect an inveterate obliviousness to funda-

mental concepts of fiduciary responsibility and safe ancsound banking. This long history of recalcitrance does noisuggest any reason for the Board to have confidence thaiVickery would be suited to return to banking in threeyears' time. While age and ill health are factors that ma)warrant compassion, they do not bear upon the ultimateissue in the matter of prohibition, whether an individual'scharacter is consistent with his continued participation irbanking. While Vickery of course retains the statutor}right to seek agency consent to return to banking, theBoard declines, to the extent it has such authority, to issuesuch consent prospectively."11

Conclusion

For the foregoing reasons, the Board orders that the at-tached Order of Prohibition issue.

By Order of the Board of Governors, this 14th day o1April, 1997.

Board of Governors of theFederal Reserve Systerr

WILLIAM W. WILES

Secretary of the Boarc

Order of Prohibition

WHEREAS, pursuant to section 8(e) of the Federal Deposit Insurance Act, as amended, (the "Act"(12 U.S.C § 1818(e)), the Board of Governors of the Federal Reserve System ("the Board") is of the opinion, fo:the reasons set forth in the accompanying Final Decisionthat a final Order of Prohibition should issue againsCHARLES R. VICKERY, JR.;NOW, THEREFORE, IT IS HEREBY ORDERED, pursuant to sections 8(b)(3), 8(e), and 8(j) of the Federal DeposiInsurance Act, as amended (12 U.S.C. §§ 1818(b)(3)1818(e)and 1818(j)), that:

1. In the absence of prior written approval by the Boardand by any other Federal financial institution regulatoragency where necessary pursuant to section 8(e)(7)(B) othe Act (12 U.S.C § 1818(e)(7)(B)), CHARLES R. VICKERY, JR. is hereby prohibited:

(a) From participating in the conduct of the affairs of an;bank holding company, any insured depository institution or any other institution specified in subsection 8(e)(7)(A) of the Act (12 U.S.C § 1818(e)(7)(A));(b) From soliciting, procuring, transferring, attemptinto transfer, voting or attempting to vote any prox>consent, or authorization with respect to any votinrights in any institution described in subsectio

10. This distinguishes situations where individuals have acted pas-sively or not acted at all. See, e.g., Brickner v. FDIC, 747 F.2d 1198(8th Cir. 1984) (bank officers failed to take action to rein in lendingofficer despite explicit FDIC warnings). Even where such conductdoes not rise to the level of willful disregard for safety or soundness,itmay still satisfy the standard for continuing disregard. See, e.g.,

11. The Board denies Vickery's exceptions to the ALJ's evidentialrulings, which were within the scope of the wide discretion allocateto the ALJ in the conduct of a hearing. The Board also denies trrequest for oral argument, to the extent that it is addressed to trBoard, since the Board finds that the issues have been adequate



8(e)(7)(A) of the Act (12 U.S.C § 1818(e)(7)(A)); (c)from violating any voting agreement previously ap-proved by the appropriate Federal banking agency; or(d) From voting for a director, or from serving or actingas an institution-affiliated party as defined in section 3(u)of the Act (12 U.S.C § 1813(u)), such as an officer, direc-tor, or employee.2. This Order, and each provision hereof, is and shallremain fully effective and enforceable until expresslystayed, modified, terminated or suspended in writing bythe Board.

This Order shall become effective upon the expiration ofthirty days after service is made.

By Order of the Board of Governors, this 14th day ofApril, 1997.

Board of Governors of theFederal Reserve System

WILLIAM W. WILES

Secretaiy of the Board

FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD

OF GOVERNORS

Juan EcheverriBogota, Colombia

The Federal Reserve Board announced on April 4, 1997,the issuance of an Order of Prohibition against Juan Echev-erri, a former vice president and institution-affiliated partyof the Miami agency of Banco Ganadero, S.A., Bogota,Colombia.

Steven KingJakarta, Indonesia

The Federal Reserve Board announced on April 18, 1997,the issuance of an Order of Prohibition against StevenKing, a former loan administration officer and institution-affiliated party of the New York agency of the PT BankNegara Indonesia (persero), Jakarta, Indonesia.


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, Reserve Bankcredit

A6 Reserves and borrowings—Depositoryinstitutions

A6 Selected borrowings in immediately availablefunds—Large member banks

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

holdings

Monetary and Credit Aggregates

A12 Aggregate reserves of depository institutionsand monetary base

A13 Money stock, liquid assets, and debt measuresA15 Deposit interest rates and amounts outstanding—

commercial and BIF-insured banks

Commercial Banking Institutions—Assets and Liabilities

A16 All commercial banksA17 Domestically chartered commercial banksA18 Large domestically chartered commercial banksA19 Small domestically chartered commercial banksA20 Foreign-related institutions

Financial Markets

All 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 limitationA27 Gross public debt of U.S. Treasury—

Types and ownershipA28 U.S. government securities

dealers—Transaction sA29 U.S. government securities dealers—

Positions and financingA30 Federal and federally sponsored credit

agencies—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 distributionA3 3 Domestic finance companies—Assets and

liabilities, and consumer, real estate, and businesscredit

Real Estate

A34 Mortgage marketsA3 5 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 activity—Selected measures

A42 Labor force, employment, and unemploymentA43 Output, capacity, and capacity utilizationA44 Industrial production—Indexes and gross valueA46 Housing and constructionA47 Consumer and producer prices


A2 Federal Reserve Bulletin • June 1997

DOMESTIC NONFINANCIAL STATISTICS-CONTINUED

Selected Measures—Continued

A48 Gross domestic product and incomeA49 Personal income and saving

INTERNATIONAL STATISTICS

Summary Statistics

A50 U.S. international transactions—SummaryA51 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

foreigners

A56 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

A64 INDEX TO STATISTICAL TABLES


Guide to Tabular Presentation

A3

SYMBOLS AND ABBREVIATIONS

cen.a.n.e.c.Pr

*

0

ATSBIFCDCMOFFBFHAFHLBBFHLMCFmHAFNMAFSLICG-7

CorrectedEstimatedNot availableNot elsewhere classifiedPreliminaryRevised (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

IMFIOIPCsIRAMMDAMSANOWOCDOPECOTSPOREITREMICRPRTCSAIFSCOSDRSICVA

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 CorporationSavings Association Insurance FundSecuritized 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 in-cludes municipalities, special districts, and other politicalsubdivisions.


A4 Domestic Financial Statistics • June 1997

1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES

Percent annual rate of change, seasonally adjusted1

Monetary or credit aggregate

Reserves of depository institutions'1 Total ."2 Required3 Nonborrowed. ,.4 Monetary base'

Concepts of money, liquid assets, and debt5 Ml '6 M27 M38 L9 Debt

Nontransaction components10 In M25

11 In M3 only6

Time and savings depositsCommercial banks

12 Savings, including MMDAs13 Small time7 . . . . 714 Large time8'9

Thrift institutions15 Savings, including MMDAs16 Small time7

17 Large time8

Money market mutual funds18 Retail'19 Institution-only

Repurchase agreements and Eurodollars20 Repurchase agreements10

21 Eurodollars10

Debt components4

22 Federal23 Nonfederal

Q2

-6.6 r

-5.9 r

-7.9 r

3.0

-1.44.56.46.35.9r

7.013.9

12.1-1.018.6

6.5-3.0-3.0

16.312.0

16.210.9

4.76.3r

1996

Q3

-16.4-16.5 r

-17.65.3r

-6.53.45.45.55.3

7.712.7

12.03.8

18.0

.2- . 39.0

16.320.7

-4 .5 r

8.5

3.85.8

Q4

-17.2 r

-18.5 r

-16.2 r

5.1

-7.35.07.9r

6.54.9r

10.218.4r

17.04.8

22.2r

.82.19.1

17.219.8

1.4r

39.9r

3.25.5r

1997

Qi

-8.3-8.4-7.2

5.6

- .85.97.6

n.a.n.a.

8.513.5

13.93.0

12.5

2.8-1.712.8

16.315.5

4.528.5

n.a.n.a.

1996

Nov.r

-6.4-7.5-4.6

6.1

- . 26.86.77.65.5

9.66.5

18.35.35.7

-2 .6- .79.1

15.216.2

-6.14.5

4.25.9

Dec.

6.r-3.4 r

7.5r

8.8r

1.17.5

10.4r

7.2r

4.1r

10.020.9r

15.23.9

24.2r

2.6-2.7-3.0

21.630.0

-9.9 r

56.9r

2.94.5

Jan.v

-13.1-8.5

-10.53.9

-1.65.25.22.93.4

7.95.0

13.31.4

- . 3

4.9.3

28.8

13.0-12.0

13.139.4

- . 64.7

1997

Feb.r

-12.3-7.9

-12.35.7

.85.18.9

10.24.9

6.822.0

9.32.4

16.7

2.61.0

11.8

13.936.9

19.114.4

1.86.0

Mar.

-17.1-20.7-19.9

3.5

-6.15.06.8

n.a.n.a.

9.313.0

16.94.6

24.8

2.6-11.9

1.5

19.925.1

-10.9-12.2

n.a.n.a.

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 U.S.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, 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).

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 CREDITl

Millions of dollars

Factor

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 . . .

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 . .

Average ofdaily figures

1997

Jan.

437 954

391,7629.214

2,0981,785

0

2518o

1.14931.903

11,0489,636

25,017

443,^40248

6,186185

7,173331

14,31811,875

Feb.

433 961r

392.1056,772

2,0341.726

0

2321

o526r

30.753

11,0509,400

25.076

441,045262

4,998'l82

7.137r

36014,069ll,433r

Mar.

437 436

395,9707,388

2.0081,387

0

19937

o413

30,034

11,0519,226

25,135

443,397297

5 840"2027,058

39414,50111,157

End-of-month figures

Jan.

433,767

391,7287.720

2,0381,285

0

16140

2930,937

11,0489,400

25,051

438,399249

6,770167

7,172359

13.38412,767

Feb.

435,272r

390,79710.778

2,0111,626

0

8290

684r

29,339

11,0519,400

25,107

441,651280

5 258'229

7,131r

34514,135ll,801 r

Mar.

442,401

395.07610,485

1,9941,096

0

3,943' 55

0-518

30,270

11,0509,200

25,163

444,534313

5,945916

6,947350

14,81613,993

Average of daily figures for week ending on date indicated

1997

Feb. 12

432 529

391,6664,677

2,0382.570

0

19180

28531,255

11,0499,400

25,065

440,142261

4,829167

7,272391

13.97311,009

Feb. 19

4^4 4441"

391,8827,011

2,0381,787

0

17220

458r

31,229

11.0519,400

25,079

442,177262

5,002165

7,040357

14,27310,698r

Feb. 26

436,006r

392,9669,431

2.0301.153

0

36240

493r

29,872

11,0519,400

25,093

441,907266

4 425'210

7,078329

14,39312,944r

Mar. 5

435 162

392,1159,190

2,0111,360

0

14280

90429,540

11.0519,371

25,107

442.362279

5.149208

7,131371

14,15211,039

Mar. 12

437 313

395,3268,345

2.0111.294

0

2260

44329.866

11,0519,200

25,121

443.507283

5,169'l76

7.101408

14.39711,645

Mar. 19

438,267

397.0827,243

2,011966

0

299350

51030.122

11,0519,200

25,135

443,573302

7,479166

7,029419

14,63310,051

Mar. 26

438,421

397,7076,782

2,0061.233

0

1341

0454

30,184

11,0519,200

25,149

443,349308

5,376167

7.069373

14,66312,515

Wednesday figures

Feb. 12

437,112

392,2238,365

2,0383,099

0

13180

-27831,635

11.0509,400

25.065

441,627262

5.135181

7,272383

14,12813,639

Feb. 19

435,327r

393,2088,390

2,038564

0

8230

l,528r

29.569

11,0519,400

25,079

442,721264

5,571'l64

7,040329

14,171I0.598r

Feb. 26

443,392r

393,41514,816

2,0112,328

0

623

0128r

30,665

11,0519,400

25,093

442,666275

5,229'l88

7,078336

14,26318,901r

Mar. 5

433,855

393,3927,024

2.011635

0

226

01,288

29476

11,0519.200

25,107

443,651280

5,239" l 6 47,131

41813.8448.486

Mar. 12

443,607

396,07512,809

2,0112.179

0

3320

6030,437

11.0519,200

25.121

444,496302

5 285"222

7,101409

14,51516,649

Mar. 19

442,025

397,2069,889

2,0111,205

0

1,154' 40

0212

30,308

11,0509,200

25,135

444.179307

9,035163

7,029412

14,49811,787

Mar. 26

444,123

397,58010,948

1,9942,471

0

9520

64430,424

11,0509,200

25,149

444,325313

4 420'l62

7,069362

14,51518,356

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 effects of inflation on the principal oinflation-indexed securities.

4. Excludes required clearing balances and adjustments to compensate for float.



1.12 RESERVES AND BORROWINGS Depository Institutions1

Millions of dollars

123456789

10

123456789

10

Reserve classification

Reserve balances with Reserve Banks2

Total vault cash3

Applied vault cash4

Surplus vault cash5

Total reservesRequired reservesExcess reserve balances at Reserve Banks'

Total borrowings at Reserve Banks8

Seasonal borrowingsExtended credit9

Reserve balances with Reserve Banks"Total vault cash3

Applied vault cashSurplus vault cash

Total reserves6

Required reservesExcess reserve balances at Reserve Banks7

Total borrowings at Reserve Banks8

Seasonal borrowingsExtended credit9

1994

Dec.

24,65840,37836,6823,696

61,34060,172

1,168209100

0

Dec. 4

13,18242,90836 898

6,01050,08048,983

1,097346

860

1995

Dec.

20,44042,09437,4604,634

57,90056,622

1,27825740

0

1996

Dec. 18

12,83744,68437 9136,771

50,75049,338

1,411112670

1996

Dec.

13,39544,42637,8486,578

51,24349,819

1,42415568

0

Prorated monthly averages of biweekly averages

Sept.

13,68843,65237,3096,343

50,99749,959

1,038368306

0

Oct.

12,80042,92536,749

6,17549,55048,556

994287212

0

1996

Nov.

12,89542,74536.8625,883

49,75648,721

1,035214109

0

Dec.

13,39544,42637,8486,578

51,24349,819

1.42415568

0

Jan.

11,71047,17238,932

8,24050,64249,419

1,22345190

Biweekly averages of daily figures for two week periods ending on dates indicated

Jan. 1

14,06344,61538 0706,545

52,13250,595

1,537143640

Jan. 15

13,06046,14039 0297,112

52,08950,859

1,23053180

Jan. 29

10,28548,67939 0789,601

49,36348,142

1,22132180

Feb. 12

11,05245,13037 6737,458

48,72447,688

1,03634180

1997

Feb. 26r

11,81741.94835 6726,276

47,48946,493

99650230

Mar. 12r

11,34142,84136 4906,351

47,83146,593

1,23835270

1997

Feb.r

11,45543,37536,5886,788

48.04347.012

1,03142210

Mar. 26

11,26941.66535 6745,991

46,94345,872

1,071194380

Mar.

11,51442,11636,0296,087

47.54346,383

1,160156370

Apr. 9

12,61741,64035 9155,725

48,53247,312

1,220344610

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 "nonbound" 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 vault 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.

1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks1

Millions of dollars, averages of daily figures

Source and maturity

Federal funds purchased, repurchase agreements, and otherselected borrowings

From commercial banks in the United States1 For one day or under continuing contract2 For all other maturities

From other depository institutions, foreign banks and officialinstitutions, and U.S. government agencies

3 For one day or under continuing contract4 For all other maturities

Repurchase agreements on U.S. government and federalagency securities

Brokers and nonbank dealers in securities5 For one day or under continuing contract6 For all other maturities

All other customers7 For one day or under continuing contract8 For all other maturities

MEMOFederal funds loans and resale agreements in immediately

available funds in maturities of one day or undercontinuing contract

9 To commercial banks in the United States10 To all other specified customers"

Feb. 3

78,50713,731

19,88420,299

12,32641,008

44.38613,601

71,51621,777

Feb. 10

79,16413,701

20,21719,010

11,50443,389

42,93813,673

70,21121,884

Feb. 17

77,34814,982

18,01318,861

11,14843,426

42,12613.914

69,85920,069

Feb. 24

77,26014,220

20.62918,902

11,56936,813

42,18114,237

69.89323,489

1997

Mar. 3

79,92314,342

17,77919,713

14,96835,645

41,64513,916

73.25924,134

Mar. 10

86,31313,669

18,77919,461

12,84636,676

41,87314,125

70,65320,959

Mar. 17

81,31013,850

18,29920,268

13,81637,758

44,12714,055

73,05623,726

Mar. 24

80,21615,140

18,49818,569

15,09335,299

45,38814,068

71.00823,771

Mar. 31

84,27115,913

20.28818,487

13,93837,965

40,28419,462

76,62223,046

1. Banks with assets of $4 billion or more as of Dec. 31, 1988.Data in this table also appear in the Board's H.5 (507) weekly statistical release. For

ordering address, see inside front cover.

2. Brokers and nonbank dealers in securities, other depository institutions, foreign banksand official institutions, and U.S. government agencies.


Policy Instruments A 7

1.14 FEDERAL RESERVE BANK INTEREST RATES

Percent per year

Current and previous levels

leral ReserveBank

Adjustment credit1

On5/9/97

Effective date

Seasonal credit

On5/9/97

Previous rate

Extended credit3

On5/9/97

Effective date

BostonNew York. . . .Philadelphia . ,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

5/8/97

5/8/97

Range of rates for adjustment credit in recent years4

Effective date

In effect Dec. 31, 1977

1978—Jan. 920

Mav 1112

July 310

Aug. 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

88-8.5

8.58.5-9.5

9.5

1010-10.5

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

1313131211111010111213131414

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. 411


13-141312

11.5-1211.5

11-11.511

10.510-10.5

109.5-10

9.59-9.5

98.5-98.5-98.5

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

6\ 6

Effective date

1988—Aug. 911

1989—Feb. 2427

1990—Dec. 19

1991_Feb. 14

Apr. 30Mav 2Sept. 13

17Nov. 6

7Dec. 20

24

1992—Julv 27

1994—May 1718

Aug. 1618

Nov. 1517

1995—Feb. 19

1996—Jan. 31Feb. 5

In effect May 9, 1997


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

665.55.5554.54.53.53.5

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 meet temporary needs forfunds that cannot be met through reasonable alternative sources. The highest rate 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, 1914-1941, and 1941-1970: 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 to 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 to a moving thirteen-week period. Thesurcharge was eliminated on Nov. 17, 1981.



1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS'

Type of deposit

Net transaction accounts2

1 $0 million-$49.3 million3 . .2 More than $49.3 million4 . .

3 Nonpersonal time deposits5. .

4 Eurocurrency liabilities

1/2/971/2/97

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 2,1997, for depository institutions that report weekly, and with the period beginning January 16,1997, for institutions that report quarterly, the amount was decreased from $52.0 million to$49.3 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 the 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 2, 1997, for depository institutions that report weekly,and with the period beginning January 16, 1997, for institutions that report quarterly, theexemption was raised from $4.3 million to $4.4 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 xfi years was reduced from 3 percent to 1 x/i percent forthe maintenance 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 1 x/l years was reduced from 3percent to zero on Jan. 17, 1991.

The reserve requirement on nonpersonal time deposits with an original maturity of 1 x/iyears or more has been zero since Oct. 6, 1983.

6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zeroin the same manner and on the same dates as the reserve requirement on nonpersonal timedeposits with an original maturity of less than 1 x/l years (see note 5).


Policy Instruments A9

1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1

Millions of dollars

Type of transactionand maturity

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 Maturitv shifts18 Exchanges

More than ten years19 Gross purchases20 Gross sales21 Maturity shifts?2 Exchanges

All maturities23 Gross purchases24 Gross sales25 Redemptions

Matched transactions26 Gross purchases27 Gross sales

Repurchase agreements28 Gross purchases79 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. . .

1994

17,4840

376.277376,277

0

1,2380o

-21.4440

9,1680

-6,00417,801

3,8180

- 3 1452^903

3,6060

-918775

35,3140

2,337

1,700,8361,701,309

309,276311,898

29,882

00

1,002

52,69652,696

-1,002

28,880

1995

10.9320

398,487398,487

900

3900o00

4,966000

1,2390o0

3,12200

o20,649

02,376

2,197,7362,202.030

331,694328,497

17,175

00

1,303

36,85136,776

-1,228

15,948

1996

9,9010

400,152400.152

0

1,2750

29.070- 4 U 9 4

2,015

3,1770

-24,08731,458

7760

-1,5316,666

1,9650

- 2 03,270

17,0940

787

3.083.3153,085,685

457,568450,359

21.147

00

1,637

75.35474,842

-1,125

20,021

Aug.

00

34.27134,271

0

1,2400

2,780-3,580

0

1.2790

-1.4091,780

2970

-1,371900

90000

900

3,71600

265.397264,536

45,20256,286

-6,508

000

8,5007,544

956

-5,552

Sept.

00

32,79132 791

0

00

2,371-2.890

0

00

-2.3712,890

00o0

000o000

234,992238,036

36,01433.374

-404

00

27

4,5364,436

73

-331

1996

Oct.

00

38.66138,661

0

00

1,623- 1 J 7 0

0

00

-1,6231.395

00o

375

000(J

000

268,304267.128

33,83633.020

1,993

00

63

12,68311,051

1,569

3,562

Nov.

6,5020

29.03729,037

0

00

3,818-5,'655

0

00

-2,1022,715

00

1.7161.470

()00

1,470

6.50200

227,577226.505

36,38336,665

7,293

00

10

9,2649,471

-217

7,076

Dec.

00

27,24727.247

0

00

2.259-U950

0

00

-2.2591,950

00o0

000o000

272,117273,872

85,92473,501

10,669

00

12

7,7968,947

-1,163

9,506

1997

Jan.

00

40,34640,346

0

()0

2.481-550

607

00

-2.481550

00o0

000o00

607

285,667283,240

74,42286,673

-10,430

00

187

17,66817,995

-514

-10,944

Feb.

00

33,99733,647

0

8180

5.086-Z864

0

1,1250

-4.9261,874

00

1.236890

00

-1.396450

1,94300

250.867254,741

48,80545.747

1,127

00

27

9,7959,454

314

1,441

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

Account

ASSETS

1 Gold certificate account2 Special drawing rights certificate account3 Coin

Loans4 To depository institutions5 Other6 Acceptances held under repurchase agreements

Federal agency obligations1 Bought outright8 Held under repurchase agreements

9 Total U.S. Treasury securities

10 Bought outright2

11 Bills12 Notes13 Bonds14 Held under repurchase agreements

15 Total loans and securities

16 Items in process of collection17 Bank premises

Other assets18 Denominated in foreign currencies3

19 All other4

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 dividends3

29 Total liabilities

CAPITAL ACCOUNTS

30 Capital paid in31 Surplus32 Other capital accounts

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

Wednesday

1997

Feb. 26 Mar. 5 Mar. 12 Mar. 19 Mar. 26

End of month

1997

Jan. 31 Feb. 28 Mar. 31

Consolidated condition statement

11,0519.400

720

3000

2,0112,328

408,231

393,415191,468151.66550,28214,816

412,600

6,2721.245

18.26611,187

470,742

418,569

32,428

26,6755,229

188336

5.4834.576

461,055

4,7214,474

492

470,742

632,992

11,0519,200

716

2800

2,011635

400,416

393,392191,445151,66550.282

7,024

403,091

8,2811,245

17,92210,348

461,853

419,539

21,584

15.7645,239

164418

6.8854,473

452,482

4,7324,440

200

461,853

643.314

11,0519.200

701

3500

2,0112,179

408,884

396.075191.573153,10351,39912.809

413,110

6,5751,248

17,92911.337

471,150

420,378

30,225

24,3095.285

222409

6,0324,792

461,427

4,7554.476

492

471,150

644,657

11.0509.200

690

1,19300

2.0111,205

407,095

397.206191,280154,52651,399

9,889

411,505

6,3791,249

17,93611,212

469,221

420,040

28,854

19,2459,035

163412

5,8284,696

459,418

4,7574,514

531

469,221

649,667

11,0509,200

676

6100

1,9942,471

408,528

397,580191,654154,52751,39910,948

413,054

6,0201,249

17,94311,324

470,517

420,165

30,337

25.3924,420

162362

5,5004,672

460,674

4,7544,496

593

470,517

647,296

11,0489.400

703

3000

2,0381,285

399,448

391.728192,074150,31549.339

7,720

402,801

4,3431.235

18,24111,494

459,267

414,299

27,603

20.3076,770

167359

3.9814,618

450,501

4,6764,083

8

459,267

625,260

11,0519,400

740

3600

2,0111.626

401,575

390,797188,850151.66550,28210.778

405,249

4,4041,244

17.91710,203

460,209

417,564

24,707

18,8765,258

229345

3.8034,691

450,765

4,7254.414

305

460,209

644,307

11,0509,200

673

3,99800

1.9941,096

405,561

395,076189.149154,52751,39910.485

412,649

1,9551,249

17.95011,076

465,803

420,357

29,056

21,8455,945

916350

1.5744,661

455,648

4,7624,496

898

465,803

653,897

Federal Reserve note statement

524.600106,032418,569

11,0519,400

0398.118

418,569

524.717105,178419,539

11,0519,200

0399.288

419,539

524,727104.350420.378

11,0519,200

0400.127

420,378

525,325105,285420,040

11,0509.200

0399,790

420,040

526,015105,850420,165

11,0509,200

0399,915

420,165

523.455109,156414,299

11,0489,400

0393,851

414,299

525,220107,657417.564

11,0519,400

0397,112

417,564

525,843105.486420.357

11,0509.200

0400,107

420,357

1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statisticalrelease. For ordering address, »oe 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.


Federal Reserve Banks A11

1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding

Millions of dollars

Type of holding and maturity

1 Total loans

2 Within fifteen days'3. Sixteen days to ninety days

4 Total U.S. Treasury securities"

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 years

11 Total federal agency obligations

12 Within fifteen days'13 Sixteen days to ninety davs14 Ninety-one days to one year15 One year to five years16 Five years to ten years17 More than ten years

Wednesday

1997

Feb. 26

30

291

408,231

28,42888,836

121.94291.41936.60741,000

4,339

2.648455245510457

25

Mar. 5

28

1018

400,416

19,29095,624

116,76591.13036.60741.000

2,646

635762258510457

25

Mar. 12

35

1520

408,884

20.03395.994

121.56592,56836.60742.117

4,190

2.196782281460447

25

Mar. 19

1,193

1.1921

407,095

22.49590,603

121.28293,99136.60742.117

3,216

1.494510281460447

25

Mar. 26

61

52~9

408,528

24,60890,153

121.05193,99136.60742,117

4,465

2,753500 •281460447

25

End of month

1997

Jan. 31

30

255

399,448

16,27096.790

117,10393,67733.78241.826

3,323

1.446679197520457

25'

Feb. 28

36

2511

390,797

5.44298.725

117,89391.13036.60741,000

2,011

320455245510457

25

Mar. 31

3,998

3,97721

405,561

23,47692,382

118,84992,38136.60842,117

3,090

1,378500281460447

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.

NOTE. Total acceptances data have been deleted from this table because data are no longeravailable.



1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1

Billions of dollars, averages of daily figures

Item

ADJUSTED FORCHANGES IN RESERVE REQUIREMENTS'

1 Total reserves3

2 Nonborrowed reserves4

3 Nonborrowed reserves plus extended credit"4 Required reserves5 Monetary base6

6 Total reserves'7 Nonborrowed reserves8 Nonborrowed reserves plus extended credit9 Required reserves8

10 Monetary base9

NOT ADJUSTED FORCHANGES IN RESERVE REQUIREMENTS10

11 Total reserves"12 Nonborrowed reserves ,13 Nonborrowed reserves plus extended credit"'14 Required reserves15 Monetary base1"16 Excess reserves13

17 Borrowings from the Federal Reserve

1993Dec.

1994Dec.

1995Dec.

1996'"Dec.

Aug. Sept.

1996r

Oct. Nov. Dec. Jan.

1997r

Feb. Mar.

Seasonally adjusted

60.55r

60.46r

60.46r

59.48r

386.88r

59.40r

59.20r

59.20"58.24r

418.48r

56.39r

56.13r

56.13r

55.ir434.52r

50.0649.9149.9148.64

452.67

52.1851.8551.8551.22

444.00

51.2850.9150.9150.24

445.81

50.0849.7949.7949.08

447.08

49.8149.6049.6048.78

449.37

50.0649.9149.9148.64

452.67

49.5249.4749.4748.29

454.14

49.0148.9748.9747.98

456.29

48.3148.1648.1647.15

457.62

Not seasonally adjusted

62.3762.2962.2961.31

390.59

62.8662.7862.7861.80

397.621.06.08

61.1360.9260.9259.96

422.51

61.3461.1361.1360.17

427.251.17.21

58.0257.7657.7656.74

439.03

57.9057.6457.6456.62

444.451.28.26

51.5251.3751.3750.10

456.72

51.2451.0951.0949.82

463.491.42.16

51.835L4951.4950.87

444.53

51.6451.3151.3150.68

450.77.96.33

51.2150*8450.8450.17

445.49

51.0050.6350.6349.96

451.721.04.37

49.7849.4949.4948.78

445.38

49.5549.2649.2648.56

451.91.99.29

50.01A9.1949.7948.97

449.20

49.7649.5449.5448.72

455.901.04.21

51.52513751.3750.10

456.72

51.2451.0951.0949.82

463.491.42.16

50.6750~6250.6249.44

455.55

50.6450.6050.6049.42

462.711.22.05

48.1248^0848.0847.09

452.56

48.0448.0048.0047.01

459.641.03.04

47.6947.5347.5346.53

455.25

47.5447.3947.3946.38

462.211.16.16

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 eifect 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 regulatory-changes 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-adjusted 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 MEASURES1

Billions of dollars, averages of daily figures

Measures2

1 Ml2 M23 M3

5 Debt . . . . . . .

Ml components6 Currency7 Travelers checks8 Demand deposits9 Other checkable deposits6


11 In M3 only8

Commercial banks12 Savings deposits, including MMDAs13 Small time deposits14 Large time deposits10- ' '

Thrift institutions15 Savings deposits, including MMDAs16 Small time deposits9

17 Large time deposits10

Monex market mutual funds18 Retail19 Institution-only


21 Eurodollars12

Debt components22 Federal debt23 Nonfederal debt

Measures^24 Ml25 M226 M327 L28 Debt

Ml components29 Currency3

30 Travelers checks4.31 Demand deposits^1

32 Other checkable deposits6


34 In M3 only8

Commercial banks35 Savings deposits, including MMDAs36 Small time deposits9

37 LarCTe time deposits

Thrift institutions38 Savings deposits including MMDAs39 Small time deposits9

40 Large time deposits10

Money market mutual funds41 Retaif42 Institution-only


44 Eurodollars'^

Debt components45 Federal debt46 Nonfederal debt

1993Dec.

1994Dec.

1995Dec.

1996Dec.

1996

Dec.

1997

Jan. Feb.' Mar.

Seasonally adjusted

1,129.83 486 64,254.45,167.8

12,514.6

322.27.9

385.2414 5

2,356.8767 8

785.2468.3271.9

434.0314.361.5

354.9209.5

158.666.4

3,323.39,191.2

1,150.73,502.14,328.75,309.8

13,156.4

354.48.5

384.1403 8

2,351.4826 6

752.4503.2298.4

397.2314.364.7

384.3198.5

182.982.1

3,492.29,664.2

1.129.03,655.04,594.85,700.3

13,875.3

372.68.9

391.1356 5

2.526.0939 8

776.0576.0344.7

361.1357.775.1

455.2246.9

182.191.0

3,638.810,236.6

1.081.03.833.14,927.3'6,057.3'

14,624.4'

395.28.6

402.4'274 8

2,752.11 094 2'

904.0'592.0410.4'

367.1352.479.2

536.6299.3

192.7'112.6'

3.780.410,844.1'

1.081.03,833.14,927.3'6.057.3'

14,624.4'

395.28.6

402.4r

274 8

2,752.11 094 2'

904.0'592.0410.4'

367.1352.479.2

536.6299.3

192.7'112.6'

3,780.410,844.1'

1,079.6'3,849.84,948.6'6,071.7'

14.665.5'

397.08.6

401.7272 4

2.770.21 098 8r

914.0592.7410.3'

368.6352.581.1

542.4296.3

194.8r

116.3'

3.778.610,887.0'

1.080.33,866.24,985.16.123.3

14.725.8

400.58.6

404.2:>67 o

2,785.9i 118 9

921.1593.9416.0

369.4352.881.9

548.7305.4

197.9117.7

3.784.210,941.6

1,074.83,882.45,013.4

n.a.n.a.

402.48.5

402.8261 1

2,807.61 131 0

934.1596.2424.6

370.2349.382.0

557.8311.8

196.1116.5

n.a.n.a.


1,153.73,506.64,274.85,197.7

12,516.6

324.87.6

401.8419.4

2,352.9768.2

784.3466.8279 o

433.4313.361.5

355.0210.6

156.667 6

3,329.59,187.1

1,174.43.522.54,348.85,340.2

13,158.0

357.58.1

400.3408.6

2,348.1826.3

751.7501.5298 9

396.8313.264.8

385.0199.8

179.683 2

3,499.09,659.0

1,152.83,675.34,614.35,732.2

13,875.8

376.28.5

407.3360.8

2,522.6939.0

775.3573.8345 7

360.8356.375.4

456.3248.2

178.091 8

3.645.910,229.8

1.103.03.851.54.944.3'6.085.6'

14,623.7'

397.98.3

418.8278.0

2,748.6'1,092.8'

902.9589.84119'

366.7351.179.5

538.1300.5

187.5'113 5'

3,787.910,835.8r

1,103.03.851.54.944.3'6.085.6'

14,623.7'

397.98.3

418.8278.0

2.748.6'1,092.8'

902.9589.84119'

366.7351.179.5

538.1300.5

187.5'113 5'

3.787.910,835.8'

1,085.8'3.851.54,954.2'6,084.6'

14,645.4'

395.68.2

405.6276.4

2,765.61,102.8'

908.9592.0406 7'

366.5352.1

80.4

546.2304.8

192.8'118 0'

3,773.410,872.1'

1,066.13.850.54.976.36,118.4

14,686.3

397.78.3

394.6265.5

2,784.41.125.8

915.4594.3414 4

367.1353.0

81.6

554.6315.5

195.3119 0

3,783.010,903.3

1,066.73,887.25,020.2

n.a.n.a.

401.08.2

396.0261.5

2,820.51.133.0

935.1597.7423 8

370.5350.2

81.8

567.1316.4

193.4117 6

n.a.n.a.

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 (1) 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 than $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 this 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 institutional 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 U.S.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 U.S. 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 items in the process of collection and Federal Reserve float.

6. Consists of NOW and ATS account balances at all depository institutions, credit unionshare draft account balances, and demand deposits at thrift institutions.

7. Sum of (1) savings deposits (including MMDAs), (2) small time 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 U.S. 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 U.S. government, and foreign banks and official institutions.

12. Includes both overnight and term.


Monetary and Credit Aggregates A15

! .22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1

1995Dec.

1996r

Dec.July Aug. Sept.

1997r

Interest rates (annual effective yields)

INSURED COMMERCIAL BANKS

1 Negotiable order of withdrawal accounts2

2 Savings deposits2'3

Interest-bearing time deposits with balances ofless than $100,000, by maturity

3 7 to 91 days4 92 to 182 days5 183 days to 1 year6 More than 1 year to 2'/2 years7 More than 2x/i years

BIF-INSURED SAVINGS BANKS4




10 7 to 91 days11 92 to 182 days12 183 days to 1 year13 More than 1 year to 2x/i years14 More than iSfi years

INSURED COMMERCIAL BANKS



17 Personal18 Nonpersonal


19 7 to 91 days20 92 to 182 days21 183 days to 1 year22 More than 1 year to 2x/i years23 More than 2x/i years

24 IRA and Keogh plan deposits

BIF-INSURED SAVINGS BANKS4



27 Personal28 Nonpersonal


29 7 to 91 days30 92 to 182 days31 183 days to 1 year32 More than 1 year to 2xfi years33 More than 2Vi years

34 IRA and Keogh plan accounts

1.913.10

4.104.685.025.175.40

1.912.98

4.434.955.185.335.46

n.a.n.a.

4.034.635.005.225.46

n.a.n.a.

4.665.025.285.535.72

1.902.88

4.134.595.005.255.50

1.812.88

4.645.015.095.415.60

1.912.86

4.174.605.005.255.50

1.812.86

4.645.065.265.595.80

1.902.84

4.114.615.045.295.54

1.842.84

4.595.115.335.615.82

1.912.85

4.114.605.025.275.52

1.902.80

4.645.085.325.605.79

Amounts outstanding (milli

1.982.85

4.084.604.995.235.48

1.922.82

4.675.035.295.565.76

n.a.n.a.

4.034.635.005.225.46

n.a.n.a.

4.665.025.285.535.72

ons of dollars)

n.a.n.a.

4.034.635.015.255.49

n.a.n.a.

4.755.055.315.585.77

n.a.n.a.

4.054.625.025.275.51

n.a.n.a.

4.735.045.315.595.78

n.a.n.a.

4.134.675.085.365.61

n.a.n.a.

4.785.055.345.665.81

248,417776,466615,113161,353

32,17093,941

183,834208,601199,002

150,067

11,91868,64365,3663,277

2,00112,14025,68627,48222,866

21,408

n.a.n.a.n.a.n.a.

32,93192,301

201,449213,198199,906

151,275

n.a.n.a.n.a.

2,42813,01328,79229,09522,254

21,365

204,980835,033662,465172,568

31,69093,941197,108208,906198,224

150,873

10,88966,85463,5573,296

2,36813,58728,50626,13222,563

21,051

190,696860,719683,081177,638

32,90791,235

200,038209,618199,755

151,048

10,68267,43163,9273,504

2,31613,44029,33926,19922,477

21,052

190,033852,336675,576176,759

32,69591,167

200,008211,234198,324

151,309

9,83867,98064,4253,555

2,54013,47429,38327,19222,348

21,002

188,803859,524680,596178,928

32,42891,195199,397213,012199,126

151,276

9,93867,97564,3263,649

2,50313,30029,65928,06322,156

20,983

167,503896,820713,672183,148

32,04492,503

201,281214,405198,539

151,389

9,71068,10264,369

3,733

2,40513,07429,32928,57321,823

20,627

n.a.n.a.n.a.

32,93192,301

201,449213,198199,906

151,275

n.a.n.a.

2,42813,01328,79229,09522,254

21,365

n.a.n.a.n.a.

32,79994,955

201,491213,875198,077

150,442

2,54213,11229,50329,16321,828

20,405

32,79695,235

202,329212,970197,958

150,356

n.a.n.a.n.a.n.a.

2,53513,09929,51029,69921,877

20,423

n.a.n.a.n.a.n.a.

32,44194,005

202,796213.913197,055

150,460

n.a.n.a.n.a.n.a.

2,56012,74829,56930,16221,975

20,386

1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6 (508)Special Supplementary Table monthly statistical release. For ordering address, see insidefront cover. Estimates are based on data collected by the Federal Reserve System from astratified random sample of about 425 commercial banks and 75 savings banks on the last dayof each month. Data are not seasonally adjusted and include IRA and Keogh deposits andforeign currency-denominated deposits. Data exclude retail repurchase agreements and depos-its held in U.S. branches and agencies of foreign banks.

2. Owing to statistical difficulties associated in part with the implementation of sweepaccounts, estimates for NOW and savings accounts are not available beginning December1996.

3. Includes personal and nonpersonal money market deposits.4. Includes both mutual and federal savings banks.



1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1

A. All commercial banks

Billions of dollars

Monthly averages

1996r

Sept. Oct. Dec. Jan. Feb.

Wednesday figures

Seasonally adjusted

Assets1 Bank credit2 Securities in bank credit3 U.S. government securities . .4 Other securities5 Loans and leases in bank credit"6 Commercial and industrial . .7 Real estate8 Revolving home equity. . .9 Other

10 Consumer11 Security3

12 Other loans and leases13 Interbank loans14 Cash assets4

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 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

Liabilities45 Deposits46 Transaction47 Nontransaction48 Large time49 Other50 Borrowings51 From banks in the U.S52 From others53 Net due to related foreign offices . . . .54 Other liabilities

3,643.5988.5703.3285.2

2,655.0724.9

1,096.179.7

1,016.4500.8

85.3247.9206.1216.8236.6

4,246.2

2,697.6765.5

1,932.1430.0

1,502.1695.9"297.6398.3256.7227.6

3,877.7

368.5


56 Residual (assets less liabilities)7

MEMO

57 Revaluation gains on off-balance-sheetitems8

58 Revaluation losses on off-balance-sheet items8

3,633.6990.2707.0283.2

2,643.5727.3

1,090.579.0

1,011.5496.5

85.0244.1203.2208.7232.7

4,221.5

2,685.3752.4

1,932.9429.9

1,503.0679.3289.5389.8262.3226.3

3,8533r

368.2

n.a.

n.a.

3,692.9968.8703.2265.6

2,724.0761.1

1,112.081.2

1,030.8515.973.8

261.3205.4224.2260.0

4,325.1

2,771.9725.2

2,046.7471.7

1,575.0706.8296.1410.8251.0221.4

3,951.1

374.0

3,718.1969.3703.2266.1

2,748.8770.6

1,115.583.3

1,032.2519.476.9

266.4204.6226.1253.4

4345.4

2,774.2712.7

2,061.5479.6

1,581.9690.0292.7397.3244.2242.7

3,951.1

394.3

3,744.3980.1707.0273.1

2,764.2774.7

1,121.584.3

1,037.2521.577.9

268.6212.2232.7259.8

43923

2,804.8715.1

2,089.7489.4

1,600.3709.8304.1405.7238.1253.7

4,006.4

385.9

3,772.4989.5706.2283.2

2,782.9784.0

1,127.885.4

1,042.4522.679.7

268.8204.0230.9269.4

4,420.1

2,832.0712.9

2,119.1507.7

1,611.4707.8307.9399.9231.4262.7

4,033.9

386.1

3,807.51,004.8

706.3298.5

2,802.7787.3

1,134.385.8

1,048.5523.183.4

274.7197.7231.1263.5

4,443.7

2,846.4709.7

2,136.7518.7

1,618.0728.7303.4425.3222.9272.0

4,070.0

373.7

3,846.41,020.5

703.4317.2

2,825.9797.0

1,140.286.6

1,053.6522.884.7

281.2203.8231.0275.3

4^00.6

2,872.1701.0

2,171.0535.2

1,635.8744.4308.8435.6218.7289.8

4,124.9

375.6

3,867.91,014.1

707.3306.9

2,853.8802.6

1,153.687.9

1,065.7521.588.8

287.3219.5236.3285.1

4352.8

2,906.4698.5

2,207.9541.8

1,666.0760.7317.1443.6210.4280.4

4,157.9

394.9

3,861.51,014.2

704.4309.7

2,847.3802.0

1,150.387.4

1,062.9521.388.9

284.8211.3235.1285.4

43373

2,918.9699.7

2,219.2542.7

1,676.5749.7323.6426.1205.5293.0

4,167.1

370.2

3,862.11,012.8

702.2310.7

2,849.2801.7

1,152.687.6

1,065.0522.2

87.2285.6219.0240.3283.9

4349.4

2,900.6694.1

2,206.6539.6

1,667.0761.9324.3437.7211.0290.5

4,164.1

385.3

3,858.81,006.4

704.8301.6

2,852.5801.9

1,153.287.9

1,065.3521.5

89.4286.4217.4229.9286.6

4336.9

2,884.3689.4

2,194.9540.3

1,654.6769.3317.8451.5219.7277.6

4,150.9

386.0


3,695.3969.5704.3265.2

2,725.8756.0

1,115.181.8

1,033.2518.073.0

263.6199.7221.5262.5

43213

2,772.4723.7

2,048.8469.7

1,579.0711.1298.5412.6245.2222.0

3,950.6

370.6

n.a.

n.a.

3,719.8969.2703.8265.4

2,750.6767.0

1,118.783.9

1,034.8519.676.7

268.6199.4227.1250.8

4340.4

2,779.0710.4

2,068.6485.0

1,583.6682.4286.1396.3245.8241.8

3,949.0

391.4

62.4

58.3

3,748.6978.8707.4271.4

2,769.8772.8

1,125.884.7

1,041.0522.079.3

270.0216.5239.7258.6

4,406.6

2,821.8725.2

2,096.5493.9

1,602.6699.5297.9401.7235.2257.5

4,013.9

392.7

65.5

60.4

3,771.3975.5702.1273.5

2,795.8781.0

1,132.685.5

1,047.1527.481.0

273.9213.3246.9269.4

4,444.2

2,863.9745.8

2,118.1507.8

1,610.3700.1302.6397.5230.1258.6

4,052.7

391.5

69.6

64.3

3,805.8995.9700.3295.6

2,809.9785.0

1,136.385.8

1,050.5528.782.6

277.3207.5241.5264.1

4,462.9

2,850.3721.0

2,129.3515.4

1,613.9723.0297.6425.4233.3269.3

4,075.9

387.1

89.1

84.8

3,839.31,017.1

702.1315.0

2,822.1796.6

1,137.286.2

1,050.9523.585.8

279.1208.2232.2275.1

4,498.8

2,857.2694.1

2,163.1533.1

1,630.0728.5296.8431.7229.4291.8

4,106.9

391.9

102.8

98.1

3,858.51,016.9

711.9305.1

2,841.6805.2

1,147.787.1

1,060.6516.988.4

283.4216.0227.3280.3

4326.1

2,895.2686.3

2,208.8541.3

1,667.5740.5305.1435.4219.3278.6

4,133.5

392.6

92.0

86.3

3,862.71,020.3

707.2313.1

2,842.4803.9

1,145.186.9

1,058.3518.091.4

284.0217.4229.9285.0

4338.9

2,916.4698.0

2,218.4541.5

1,677.0727.4305.2422.2206.9295.2

4,145.9

393.1

100.4

96.0

3,852.41,017.3

706.9310.3

2,835.2801.8

1,147.487.0

1,060.4517.587.2

281.2218.1230.0278.1

4322.8

2,892.6682.4

2,210.2539.9

1,670.2728.0302.5425.5219.3290.7

4,130.6

392.2

95.1

90.3

3,851.91,011.3

711.5299.8

2,840.6806.0

1,146.487.1

1,059.3516.789.8

281.6212.6222.5279.5

4310.6

2,872.2675.4

2,196.8540.6

1,656.2744.3297.0447.3223.8273.2

4,113.5

397.1

89.3

83.7

Footnotes appear on page A21.


Commercial Banking Institutions—Assets and Liabilities A17

1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued

B. Domestically chartered commercial banks

Billions of dollars

Monthly averages

1996r

Sept. Oct. Nov. Dec. Jan. Feb.

Wednesday figures

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 assets0

Liabilities17 Deposits18 Transaction19 Nontransaction20 Large time21 Other22 Borrowings23 From banks in the U.S24 From others25 Net due to related foreign offices26 Other liabilities


28 Residual (assets less liabilities)7.

Assets29 Bank credit30 Securities in bank credit . . .31 U.S. government securities32 Other securities33 Loans and leases in bank credit2

34 Commercial and industrial35 Real estate36 Revolving home equity .37 Other38 Consumer39 Security3

40 Other loans and leases.. . .41 Interbank loans42 Cash assets4

43 Other assets5

3,198.3845.0634.1210.9

2,353.3541.2

1,062.679.7

982.9500.8

51.8196.9185.9189.2189.3

3,706.0

2,527.4755.6

1,771.8272.9

1,498.9578.6265.4313.2

81.1153.0

3,340.1

365.8

3,225.4822.3620.3202.0

2,403.0560.5

1,079.281.2

998.0515.944.7

202.8185.1194.7219.0

3,766.9

2,585.9715.5

1,870.4298.9

1,571.6584.1262.1321.974.7

152.7

3,397.4

369.4

3,237.6820.7620.6200.1

2,416.9564.8

1,082.883.3

999.5519.444.0

206.0184.0196.4219.6

3,781.1

2,576.8702.3

1,874.5295.2

1,579.3572.5260.3312.2

76.5168.1

3,393.9

387.1

3,250.5822.3619.9202.4

2,428.2566.6

1,089.184.3

1,004.8521.542.9

208.2192.0201.8223.6

3,811.5

2,600.9704.9

1,896.0299.4

1,596.6584.1270.8313.371.0

173.8

3,429.7

381.7

3,267.3825.1618.7206.4

2,442.2571.0

1,095.785.4

1,010.4522.643.6

209.4182.3199.8232.4

3,825.4

2,612.5702.7

1,909.8302.6

1,607.2586.0274.9311.169.1

179.8

3,447.5

377.8

3,290.5834.6624.6210.0

2,455.9572.3

1,102.385.8

1,016.5523.145.3

212.9174.4199.9224.8

3,833.7

2,619.5699.3

1,920.2302.3

1,617.9597.7275.2322.572.0

182.1

3,471.3

362.5

3,313.7843.9618.2225.7

2,469.9578.8

1,107.986.6

1,021.3522.8

45.1215.4181.5197.8233.2

3,870.5

2,631.2691.1

1,940.1306.6

1,633.5599.9274.4325.5

78.2190.3

3,499.6

370.8

3,339.7841.9624.0217.9

2.497.8584.9

1,121.687.9

1,033.7521.549.3

220.6194.6203.5242.9

3,924.9

2,659.3687.7

1,971.5308.5

1,663.0618.8281.7337.168.2

187.1

3,533.4

391.5

3,331.3843.7620.0223.7

2,487.6582.9

1,118.087.4

1,030.5521.346.8

218.6192.8199.6239.4

3,907.3

2,668.0689.4

1,978.6308.2

1,670.4602.9283.0320.067.1

195.0

3,533.0

374.3

3,331.5841.6620.5221.1

2,489.9582.5

1,120.587.6

1,032.9522.247.2

217.5194.0206.3240.5

3,916.6

2,654.2683.5

1,970.7307.6

1,663.0622.4292.6329.965.4

193.3

3,535.3

381.4

3,334.3838.3623.9214.4

2,496.0584.0

1,121.287.9

1.033.3521.550.3

219.1192.1198.4245.2

3,914.4

2,639.9678.3

1,961.7308.5

1,653.2631.2284.7346.573.4

186.1

3,530.6

383.8


44 Total assets*5




MEMO57 Revaluation gains on off-balance-sheet

items8


59 Mortgage-backed securities9

3,189.8r

847.3636.1211.2

2,342.5543.9

1,057. lr

79.0978.1496.5

51.5193.5183.0181.6186.0

3,683.6

2,515.2742.7

1,772.5273.1

1,499.4566.6258.5308.1

84.8151.9

3,318.5

365.1

3,229.1824.1622.5201.7

2,405.0556.6

1,082.281.8

1,000.3518.043.9

204.2179.4192.6221.0

3,764.6

2,586.9713.5

1,873.4296.6

1,576.8587.2265.2322.070.9

153.3

3,398.3

366.3

n.a.

n.a.

3,240.6820.7621.6199.1

2,419.9562.4

1,085.783.9

1,001.9519.643.8

208.4178.7197.0217.3

3,777.3

2,576.3700.0

1,876.3295.0

1,581.3568.2256.1312.078.2

168.8

3,391.4

385.9

28.9236.5

3,255.2821.3620.4200.9

2,434.0564.9

1,092.984.7

1,008.2522.044.3

209.9196.3208.5222.1

3,825.7

2,615.3715.1

1,900.2300.0

1,600.2577.3264.6312.868.4

176.9

3,437.9

387.8

28.9238.1

3,270.3817.5617.0200.6

2,452.8567.5

1,100.485.5

1,015.0527.444.8

212.7191.5214.7231.6

3,851.7

2,641.7734.9

1,906.8299.3

1,607.5579.5269.0310.566.2

177.1

3,464.5

387.2

31.8241.2

3,291.8829.9617.6212.3

2,462.0570.2

1,104.385.8

1,018.5528.744.5

214.2184.1209.9

.226.1

3,856.3

2,623.3710.6

1,912.7301.0

1,611.7595.2268.3326.973.6

180.2

3,472.3

384.0

44.0244.3

3,306.0839.5615.1224.4

2,466.5578.4

1,104.886.2

1,018.6523.546.2

213.6185.8199.8232.1

3,868.0

2,619.5684.0

1,935.6309.4

1,626.1590.6264.6326.079.9

189.7

3,479.8

388.2

55.8

50.9243.2

3,330.3843.9625.6218.2

2,486.5587.9

1,115.787.1

1,028.6516.948.9

217.1191.1195.1238.7

3,899.5

2,648.2675.8

1,972.5308.5

1,664.0604.5271.3333.372.5

185.4

3,510.8

388.7

48.9

43.2245.1

3,327.7844.8619.5225.3

2,482.9585.4

1,112.786.9

1,025.8518.049.3

217.7198.8195.4238.1

3,904.3

2,668.6687.9

1,980.8310.3

1,670.4583.9266.4317.469.3

194.5

3,516.3

388.0

50.7244.0

3,350.7842.2627.4214.8

2,508.6588.3

1,122.688.1

1,034.6522.9

51.6223.1199.3208.0244.3

3,946.8

2,664.1703.9

1,960.2308.8

1,651.4620.0274.6345.4

69.8181.6

3,535.5

411.3

3,320.8843.2621.8221.5

2,477.6583.8

1,115.187.0

1,028.2517.547.3

213.9193.0196.8234.1

3,889.1

2,646.4672.2

1,974.2308.4

1,665.8594.1272.3321.869.0

191.9

3,501.3

387.8

50.6

45.8244.1

3,325.2840.4626.0214.4

2,484.8587.9

1,114.287.1

1,027.0516.7

50.7215.3187.3191.6239.5

3,887.9

2,626.5664.7

1,961.8308.0

1,653.8609.4264.3345.175.1

182.8

3,493.8

394.1

46.5

40.8244.1

3,335.2844.0629.3214.7

2,491.2590.9

1,116.087.1

1,028.8517.849.6

217.0184.6191.2238.1

3,893.5

2,626.0670.6

1,955.4307.6

1.647.8615.0272.9342.1

80.5178.8

3,500.3

393.2

40.2246.3





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 Real estate14 Revolving home equity15 Other16 Consumer17 Security3

18 State and local government19 All other20 Interbank loans21 Cash assets4

22 Other assets5

23 Total assets6




Assets36 Bank credit37 Securities in bank credit38 U.S. government securities39 Trading account40 Investment account41 Other securities42 Trading account43 Investment account44 State and local government. .45 Other46 Loans and leases in bank credit2 . . .47 Commercial and industrial48 Real estate49 Revolving home equitv50 Other '51 Consumer52 Security3

53 State and local government54 All other ."55 Interbank loans56 Cash assets4

57 Other assets5

58 Total assets6

Liabilities59 Deposits60 Transaction61 Nontransaction62 Large time63 Other64 Borrowings65 From banks in the U.S66 From nonbanks in the U.S67 Net due to related foreign offices68 Other liabilities




items8


73 Mortgage-backed securities9

1996r

Mar.

1,824.2435.3304.022.1

281.9131.360.171.221.349.9

1.388.9369.0567.353.6

513.8273.545.911.4

121.8122.3124.4139.5

2,173.8

1.323.0420.3902.8126.0776.7436.8187.9248.975.3

122.0

1,957.1

216.6

1.820.1436.1304.723.3

281.4131.360.470.921.449.6

1,384.1371.2564.7

53.1511.6271.245.611.3

120.0119.5118.9137.1

2,158.9

1,316.1412.1904.0125.4778.6429.3183.8245.679.0

120.5

1,944.9

214.0

n.a.

n.a.n.a.

Monthly averages

1996r

Sept.

1,803.8406.9285.120.9

264.2121.856.465.520.345.1

1,396.9379.7558.153.9

504.2281.739.510.9

127.0134.2128.7161.9

2,192.2

1.350.8394.3956.5146.8809.7422.2178.3244.068.9

126.1

1,958.0

224.1

1,803.6408.3286.721.0

265.7121.656.165.520.345.2

1,395.2376.8558.954.2

504.7282.938.911.0

126.8130.2128.1163.5

2,188.5

1,349.7393.1956.6144.7811.8425.8180.6245.265.0

127.0

1,967.5

221.1

n.a.

n.a.n.a.

Oct. Nov.

1,811.5407.0287.221.2

265.9119.955.164.820.244.6

1,404.5383.1559.354.2

505.0281.439.110.9

130.6133.1128.9163.3

2,200.9

1,359.9387.8972.1152.0820.1407.2173.4233.873.2

139.4

1,979.7

221.2

1,815.8410.1287.921.5

266.4122.257.864.420.244.2

1.405.7383.2560.654.7

505.9281.137.811.2

131.8138.5133.1166.7

2,218.2

1,371.3388.3983.0153.7829.3416.3183.2233.168.8

144.8

2,001.2

217.1

1,812.0408.1289.322.0

267.3118.853.565.320.245.1

1,403.8381.3560.054.5

505.4281.039.011.0

131.6127.6128.4161.2

2,193.5

1,357.1384.9972.2151.4820.7402.8169.8232.974.8

140.1

1,974.7

218.7

32.5

28.9188.2

1,818.9410.7290.022.7

267.3120.655.465.220.345.0

1,408.2382.2562.255.0

507.2280.839.011.2

132.8137.9137.1164.7

2,222.8

1,378.2394.9983.3153.9829.3411.0178.7232.366.2

148.0

2,003.5

219.3

33.1

28.9189.5

Dec.

1.824.5412.7286.4

19.4266.9126.460.965.520.345.2

1,411.8385.6562.9

55.3507.5281.3

38.511.3

132.2127.1131.1173.8

2,220.9

1,378.6387.0991.5155.4836.1416.9189.2227.766.4

150.6

2,012.5

208.4

1.824.8405.6285.1

18.1267.0120.554.466.120.445.7

1.419.1382.6565.655.4

510 2285.239.511.3

134.9133.3142.4172.4

2,237.2

1,394.6408.3986.4153.0833.4410.9183.9227.063.4

148.4

2,017.3

219.8

36.2

31.8192.0

1997r

Jan.

Seasonall

1.838.5418.3289.2

17.2272.1129.064.664.420.544.0

1.420.2386.2563.055.4

507.6284.440.411.1

135.1120.1130.9167.6

2,221.9

1,371.2384.0987.2153.7833.5427.3188.1239.268.0

154.1

2,020.6

201.3

Not season a

1.841.7415.0283.5

16.3267.3131.466.564.920.544.4

1,426.7384.0565.4

55.5509.9289.0

39.511.0

137.9128.6138.8168.0

2,241.9

1.377.4391.6985.8153.6832.2423.1181.5241.6

69.7151.9

2,022.1

219.8

47.5

44.0193.6

Feb.

v adjusted

1.857.1428.6283.7

16.1267.5144.979.965.021.044.0

1.428.5390.4563.8

55.8508.0286.239.911.1

137.1124.1128.0174.0

2,248.1

1.369.3374.7994.6156.5838.1427.9187.2240.7

74.3162.3

2,033.8

214.3

lly adjusted

1.854.9425.9282.0

16.3265.6143.978.865.121.044.1

1.429.0390.4563.3

55.6507.7286.040.911.0

137.4126.4130.7171.6

2,248.5

1.367.3371.3995.9158.7837.3420.1179.4240.6

76.0161.3

2,024.6

223.9

55.8

50.9192.9

Mar.

1,867.8422.2286.6

17.7268.9135.669.865.820.645.3

1.445.6394.7569.2

56.4512.8285.143.911.0

141.6132.9133.4177.0

2,276.0

1,376.9368.3

1.008.6157.3851.3441.6193.2248.464.3

159.3

2,042.1

233.9

1.863.0422.9287.2

18.8268.3135.770.265.520.644.9

1.440.1397.2566.3

55.9510.4282.443.510.9

139.8129.5127.0173.8

2,258.1

1.370.8360.6

1.010.2156.5853.7433.1186.7246.4

68.6157.2

2,029.7

228.4

48.9

43.2193.3

Wednesday figures

1997

Mar. 5

1,864.3425.2283.3

16.2267.0141.976.365.620.844.8

1.439.2393.1568.1

56.1512.0285.641.311.0

140.1130.1129.9172.8

2,261.8

1.381.5369.7

1,011.8156.7855.0427.8193.6234 263.5

167.2

2,040.0

221.8

1,867.2428.0284.5

17.8266.7143.578.065.620.844.8

1,439.2395.5566.0

55.8510.2283.443.510.9

139.9130.8126.6170.9

2260.1

1.384.1367.8

1.016.4158.3858.1416.3183.7232.665.7

166.4

2,032.5

227.5

55.4

50.7192.8

Mar. 12

1,863.9423.7284.7

17.3267.4139.073.965.120.644.5

1,440.2392.8569.7

56.3513.4285.741.911.0

139.1132.1135.5174.5

2,270.8

1,371.9365.7

1,006.1155.5850.6443.6201.8241.861.7

165.4

2,042.6

228.2

1,859.0425.1285.7

19.0266.7139.374.465.020.644.4

1,433.9393.9567.6

55.8511.8282.941.811.0

136.8128.7128.2169.8

2,250.6

1.368.5357.2

1.011.3155.6855.7425.2188.7236.4

65.3163.6

2,022.6

228.0

50.6

45.8192.9

Mar. 19

1,859.9417.8285.6

17.3268.3132.266.166.120.645.5

1.442.1393.8567.7

56.4511.3284.344.910.9

140.4131.1130.8180.6

2,2673

1,365.6361.2

1,004.4156.9847.5447.8191.5256.469.8

157.5

2,040.8

226.5

1,855.9418.4286.5

19.3267.2131.966.465.520.644.9

1,437.5396.9564.4

55.9508.5281.645.510.9

138.3128.6126.2177.1

2,252.6

1.360.4354.2

1,006.2155.7850.5437.4179.5257.9

71.6154.0

2,0233

229.3

46.5

40.8192.3

Mar. 26

1,876.4422.3289.5

18.7270.8132.765.966.820.546.3

1.454.1397.8569.2

56.5512.7286.346.211.0

143.6136.7136.8177.6

2,292.4

1.384.1379.2

1,004.9158.3846.5443 7188.0255.765.6

153.5

2,046.8

245.6

1,864.1420.4288.3

18.5269.8132.165.866.320.645.7

1,443.6399.5565.2

55.9509.3283.344.511.0

140.0127.9124.0173.5

2,254.4

1,358.5357.3

1,001.2156.0845.3440.5186.9253.6

76.3149.9

2,0253

229.1

47.6

40.2194.2



Commercial Banking Institutions—Assets and Liabilities A IS


D. Small domestically chartered commercial banks

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 Revolving home equity9 Other



15 Other assets5

16 Total assets6




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 assets-"

44 Total assets6




MEMO57 Mortgage-backed securities9

Monthly averages

1996r

Mar.

1996r

Sept. Oct. Nov. Dec.

1997r

Jan. Feb. Mar.

Wednesday figures

1997

Mar. 5 Mar. 12 Mar. 19 Mar. 26

Seasonally adjusted

1,374.2409.7330.179.6

964.4172.2495.3

26.2469.1227.3

5.963.763.664.849.8

1332.2

1,204.4335.4869.0146.9722.1141.877.664.35.8

31.0

1383.0

149.2

1,421.5415.4335.280.2

1,006.1180.8521.127.3

493.8234.1

5.264.950.966.057.1

1374.7

1,235.1321.1913.9152.1761.9161.983.978.05.9

26.6

1,429.4

145.3

1,426.1413.6333.4

80.21,012.4

181.6523.5

29.1494.4237.9

4.964.450.867.556.3

1380.1

1,216.9314.5902.4143.2759.2165.386.978.43.4

28.7

1,414.2

165.9

1,434.8412.2332.180.2

1,022.5183.4528.5

29.6498.9240.4

5.065.253.668.756.9

1393.2

1,229.6316.6913.0145.7767.3167.887.780.22 2

29.0

1,428.6

164.6

1,442.8412.3332.380.0

1,030.5185.4532.930.0

502.9241.2

5.165.955.268.658.6

1,604.4

1,233.9315.7918.3147.2771.1169.185.783.42.7

29.2

1,435.0

169.4

1,452.1416.3335.3

81.01,035.7

186.2539 330.4

508.9238.7

5.066.654.369.057.2

1,611.8

1,248.3315.3933.0148.7784.4170.487.183.44.0

28.0

1,450.7

161.2

1,456.6415.3334.580.8

1,041.4188.3544.030.8

513.2236.6

5.267.257.469.859.2

1,622.4

1,261.9316.4945.5150.1795.3172.087.284.84.0

28.0

1,465.8

156.5

1,471.8419.6337.482.3

1,052.2190.2552.431.5

520.9236.4

5.467.961.770.165.8

1,648.9

1,282.4319.4962.9151.2811.8177.288.588.73.9

27.8

1,491.4

157.6

1,467.0418.5336.781.8

1,048.5189.8549.9

31.3518.6235.7

5.567.662.669.666.6

1,645.4

1,286.5319.7966.8151.4815.4175.189.385.73.6

27.8

1,493.0

152.4

1,467.6417.9335.8

82.11,049.7

189.7550.8

31.4519.4236.5

5.467.461.970.966.0

1,645.8

1,282.3317.8964.5152.1812.4178.890.788.13.6

27.9

1,492.7

153.2

1,474.4420.6338.382.2

1,053.9190.2553.431.5

521.9237.2

5.367.861.067.664.6

1,647.1

1,274.3317.0957.3151.6805.7183.493.290.13.5

28.6

1,489.8

157.3

1,474.4419.9337.882.0

1,054.5190.5553.4

31.6521.9236.7

5.568.562.671.266.7

1,654.4

1,280.0324.7955.3150.5804.8176.386.689.74.2

28.1

1,488.6

165.7


1,369.6411.2331.479.9

958.4172.7492.3

25.9466.4225.3

5.962.263.562.749.0

1324.7

1,199.1330.6868.5147.7720.8137.374.862.55.8

31.4

1373.6

151.1

n.a.

1,425.5415.8335.780.0

1,009.8179.8523.3

27.7495.6235.1

5.166.449.264.557.6

1376.0

1,237.2320.4916.8151.9764.9161.584.676.85.9

26.3

1,430.8

145.2

n.a.

1,428.6412.6332.3

80.21,016.0

181.0525.829.3

496.5238.6

4.865.851.168.656.1

1383.8

1,219.2315.0904.1143.6760.5165.486.379.13.4

28.7

1,416.6

167.2

48.4

1.436.3410.6330.480.2

1,025.7182.7530.7

29.7501.0241.1

5.366.058.471.457.4

1,602.9

1,237.1320.2916.9146.1770.9166.385.880.52.2

28.9

1,434.4

168.4

48.5

1,445.5411.9331.880.0

1,033.6184.9534.830.1

504.7242.1

5.366.558.272.359.2

1,6143

1,247.1326.6920.4146.3774.2168.685.183.52.7

28.8

1,447.1

167.4

49.2

1,450.2414.9334.180.8

1,035.3186.2538.9

30.3508.6239.7

5.165.455.571.158.1

1,614.4

1,245.9319.0926.9147.4779.5172.186.885.34.0

28.2

1,450.2

164.2

50.7

1,451.1413.6333.180.5

1,037.5188.0541.5

30.6510.8237.5

5.365.359.469.160.5

1,619.6

1,252.3312.6939.6150.8788.8170.585.285.34.0

28.4

1,455.2

164.4

50.3

1,467.3421.0338.582.5

1,046.3190.7549.431.2

518.1234.5

5.466.461.668.164.9

1,641.4

1,277.5315.2962.3152.0810.3171.484.686.939

28.2

1,481.0

160.3

51.8

1,460.5416.7335.081.8

1,043.8189.9546.731.1

515.6234.6

5.866.968.068.967.2

1,6443

1,284.5320.1964.4152.08124167.682.784.93.6

28.1

1,483.8

160.5

51.2

1,461.8418.2336.082.1

1,043.718995473

31.2516.3234.6

5.566.264368.664.3

1,638.6

1,277.8315.0962.9152.88 KM168.983.685.33.6

2S.3

1,478.7

159.8

51.2

1,469.24220339.582.5

1,047.3191 1549^831.3

518.6235.1

5.266.158 765.462.4

1,6353

1,266.1

955^6152.28033172.084.887.23.5

28.8

1,4703

164.8

51.8

1,471.1423.5340.982.6

1,047.6191.3550.7

31.2519.5234.5

5.166.056767.264.6

1,639.2

1 267 53133954.2151.6802^6174.586.088.54.2

28.9

1,475.1

164.1

52.1





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 US21 From others22 Net due to related foreign offices23 Other liabilities



Assets26 Bank credit27 Securities in bank credit28 U.S. government securities29 Trading account30 Investment account31 Other securities32 Trading account33 Investment account34 Loans and leases in bank credit2 . . .35 Commercial and industrial36 Real estate37 Security3


41 Other assets5

42 Total assets6

Liabilities43 Deposits44 Transaction45 Nontransaction46 Large time47 Other48 Borrowings49 From banks in the US50 From others51 Net due to related foreign offices52 Other liabilities




items'*56 Revaluation losses on off-balance-

sheet items8

Monthly averages

1996

Mar.

1996r


1997r

Jan. Feb. Mar.

Wednesday figures

1997

Mar. 5 Mar. 12 Mar. 19 Mar. 26

Seasonally adjusted

445.2143.569.274.3

301.7183.733.533.551.020.227.647.3

5403

170.29.9

160.3157.1

3.2117.232.285.1

175.674.5

537.6

2.7

467.5146.582.963.6

321.0200.6

32.829.158.520.329.541.0

558.2

186.09.7

176.2172.8

3.4122.834.088.8

176.368.7

553.7

4.5

480.5148.682.665.9

331.9205.9

32.732960.420.629.733.7

564.4

197.410.4

187.0184.4

2.6117.532.485.1

167.774.6

557.2

7.2

493.8157.887.070.8

336.0208.132.435.060.420.230.936.2

580.9

203.910.2

193.7190.0

3.7125.733.292.4

167.180.0

576.7

4.2

505.1164.487.676.9

340.7213.132.036 259.421.831.137.0

594.7

219.510.2

209.3205.1

4.2121.732.988.8

162.382.8

586.4

8.3

516.9170.281.788.4

346.8214.932.038.061.823.431.238.8

610.0

226.910.4

216.5216.4

0.1131.028.3

102.7150.989.9

598.8

11.3

532.7176.785.291.5

356.0218.232.339 665.822.333.142.2

630.1

240.99.9

230.9228.6

2.3144.534.4

110.1140.499.6

6253

4.8

528.3172.383.389.0

356.0217.7

32.039.566.724.932.842.2

627.9

247.110.8

236.3233.3

3.0141.935.4

106.5142.293.3

624.5

3.5

530.2170.584.486.0

359.7219.1

32.342.166.218.535.546.0

630.0

251.010.3

240.6234.6

6.1146.840.6

106.1138.498.0

634.1

-4.0

530.6171.381.689.6

359.3219.1

32.140.068.125.034.043.4

632.8

246.510.6

235.9232.0

3.9139.531.7

107.8145.797.2

628.9

3.9

524.5168.080.987.1

356.5217.9

32.139.267.325.331.541.4

622.5

244.311.1

233.2231.8

1.4138.133.1

105.0146.491.5

6203

2.2

535.2177.884.093.8

357.3218.0

32.040.666.726.132.340.4

633.7

245.610.8

234.8233.4

1.4150.639.5

111.1132.591.6

620.2

13.5


443.9142.970.96.1

64.872.038.034.0

301.0183.433.533.550.620.227.246.6

537.8

170.19.6

160.4156.8

3.6112.731.081.7

177.574.4

534.7

3.1

n.a.

n.a.

466.2145.481.88.4

73.463.537.625.9

320.8199.432.929.159.420.328.841.5

556.7

185.510.1

175.4173.1

2.3123.933.390.6

174.368.6

5523

4.4

n.a.

n.a.

479.2148.582.118.763.466.347.918.4

330.7204.732.932.960.220.630.133.4

563.1

202.710.4

192.3190.0

2.3114.229.984.3

167.673.1

557.6

5.5

29.9

29.3

493.4157.587.021.865.270.551.618.9

335.9207.9

32.935.060.120.231.136.5

581.0

206.510.2

196.3193.9

2.4122.233.388.9

166.880.6

576.0

4.9

32.4

31.5

501.1158.085.119.965.372.954.018.9

343.0213.532 236.261.221.832.237.7

592.6

222.210.9

211.3208.5

2.8120.633.687.0

163.981.5

588.2

4.3

33.4

32.5

513.9166.082.717.065.783.361.422.0

347.9214.832.038.063.123.431.638.0

606.7

227.110.4

216.6214.4

22127.829.398.5

159.689.1

603.6

3.1

41.6

40.8

533.3177.687.021.465.690.767.922.7

355.7218.2

32.439.665.522.332.443.0

630.8

237.710.1

227.5223.7

3.8137.932.2

105.7149.5102.0

627.1

3.7

47.0

47.2

528.2173.186.219.966.386.863.123.7

355.1217.3

32 039.566.224.932.241.6

626.7

246.910.6

236.4232.8

3.5135.933.8

102.1146.893.1

622.8

3.9

43.0

43.0

534.9175.587.721.166.687.864.922.9

359.5218.6

32.542.166.418.534.546.9

634.6

247.810.1

237.7231.2

6.5143.538.7

104.8137.5100.7

629.6

5.0

45.0

45.3

531.6174.085.220.265.088.965.523.4

357.6218.1

32.340.067.325.033.244.0

633.6

246.210.3

236.0231.5

4.4133.930.2

103.7150.398.8

629.2

4.4

44.5

44.5

526.7170.985.519.066.485.462.323.1

355.8218.0

32.339.266.325.331.040.0

622.7

245.710.7

235.0232.6

2.4134.932.7

102.2148.790.4

619.7

3.0

42.7

42.9

527.1171.585.818.867.085.862.123.6

355.5217.0

31.840.666.326.132.139.4

624.4

247.610.8

236.8234.4

2.4137.634.8

102.8146.489.3

620.9

3.5

42.0

42.0



Commercial Banking Institutions—Assets and Liabilities All

NOTKS TO TABLE 1.26

NoTK. 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 follow ing 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 International Banking Facilities. Data are Wednesday values or promla averages of Wednesday values. Large domestic banks constitute a universe; data for.small 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. A18 and A19 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. Estimated

quantities of balance sheet items acquired in mergers are removed from past data for the bankgroup 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 commodityand equity 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.



1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING

Millions of dollars, end of period

Year ending December

1992Dec.

1993Dec.

1994Dec.

1995Dec.

1996Dec. Sept.

1 All issuers

Financial companies'2 Dealer-placed paper2, total3 Directly placed paper3, total

Commercial paper (seasonally adjusted unless noted otherwise)

4 Nonfinancial companies4. .

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 All other

545,619

226,456171,605

147,558

555,075

218,947180,389

155,739

595,382

223,038207,701

164,643

674,904

275,815210,829

188,260

775,371

361,147229,662

184,563

757,155

336,833226,599

193,724

757,718

349,288225,977

182,454

766,556

354,400228,553

183,603

775,371

361,147229,662

804,644

376,908238,133

189,602

813,168

387,164239,509

186,495

Bankers dollar acceptances (not seasonally adjusted)5

38,194

10,5559,0971,458

1,27626,364

12,2098,09617,890

32,348

12,42110,7071,714

72519,202

10,2177,29314,838

29,835

11,78310,4621,321

41017,642

10,0626,355

13,417

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

1994_Mar. 24Apr. 19May 17Aug. 16Nov. 15

1995—Feb. 1July 7Dec. 20

1996—Feb. 1

1997—Mar. 26

Rate

6.256.757.257.758.50

9.008.758.50

8.25

8.50

Period

199419951996

1994—janFebMar.Apr.MayJuneJulyAugSeptOctNovDec

Averagerate

7.158.838.27

6.006.006.066.456.997.257.257.517.757.758.158.50

Period

1995—JanFebMarAprMayJuneJulyAugSeptOctNovDec

Averagerate

8.509.009.009.009.009.008.808.758.758.758.758.65

Period

1996—JanFebMar.AprMayJuneJulyAugSeptOctNovDec

1997—JanFebMarApr

Averagerate

8.508.258.258.258.258.258.258.258.258.258.258.25

8.258.258.308.50

1. The prime rate is one of several base rates that banks use to price short-term businessloans. The table shows the date 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 recent Call

Report. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415)monthly 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 funds12'3

2 Discount window borrowing2'4

Commercial paper' '3 1-month4 3-month5 6-month

Finance paper, directly placed ' '6 1-month7 3-month8 6-month

Bankers acceptances ' '9 3-month

10 6-month

Certificates of deposit, secondary market •11 1-month12 3-month13 6-month

14 Eurodollar deposits, 3-month3'10

U.S. Treasury billsSecondary market3'5

15 3-month16 6-month17 1-year

Auction average l5"18 3 month19 6-month20 1-year

U.S. TREASURY NOTES AND BONDS

Constant maturities12

21 1-year22 2-year23 3-year24 5-year25 7-year26 10-vear27 20-year28 30-year

Composite29 More than 10 years (long-term)

STATE AND LOCAL NOTES AND BONDS

Moody's series13

30 Aaa31 Baa32 Bond Buyer series14

CORPORATE BONDS

33 Seasoned issues, all industries15

Rating group34 Aaa35 Aa36 A37 Baa38 A-rated, recently offered utility bonds

MEMODividend-price ratio'7

39 Common stocks

1994

4.213.60

4.434.664 93

4.334.534 56

4.564.83

4.384.634 96

4.63

4.254.645.02

4.294.665.02

5.325.946.276.696.917.097.497 37

7.41

5.776.176.18

8 26

7.978.158.288.638.29

2.82

1995

5.835.21

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

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

5.525.845.996.186.346.446.83671

6.80

5.525.795.76

7 66

7.377.557.698.057.77

2.19

1996

Dec.

5.295.00

5.705.515 44

5.415.335 25

5.355.33

5.505.445 47

5.43

4.915.045.18

4.875.025.16

5.475.785.916.076.206.306.656 55

6.63

5.385.635.64

7 50

7.207.417.517.897.63

2.01

1997

Jan.

5.255.00

5.435.455 48

5.315.325 30

5.345.35

5.355.435 54

5.44

5.035.105.30

5.055.115.31

5.616.016.166.336.476.586.916 83

6.89

5.405.715.72

7 71

7.427.637.718.097.93

1.95

Feb.

5.195.00

5.395.405 42

5.275.285 27

5.295.30

5.315.375 47

5.36

5.015.065.23

5.005.055.34

5.535.906.036.206.326.426.776 69

6.76

5.365.605.63

7 59

7.317.547.597.947.81

1.91

Mar.

5.395.00

5.515.565 61

5.395.42541

5.445.50

5.445.535 69

5.50

5.145.265.47

5.145.245.36

5.806.226.386.546.656.697.056 93

7.03

5.555.755.76

7 83

7.557.777.828.188.08

1.91

1997, week ending

Feb. 28

5.165.00

5.385.405 43

5.255.285 26

5.285.30

5.315.375 49

5.34

5.055.105.29

5.015.03n.a.

5.606.016.156.316.426.506.856 75

6.84

5.405.635.65

7 66

7.387.617.658.017.94

1.88

Mar. 7

5.365.00

5.435.465 51

5.305.335 33

5.355.39

5.335.445 60

5.44

5.095.195.39

5.105.195.36

5.706.126.276.426.556.596.966 85

6.95

5.485.715.70

7 75

7.477.697.748.107.97

1.91

Mar. 14

5.195.00

5.415.465 52

5.315.345 34

5.355.42

5.345.465 62

5.44

5.085.205.40

5.065.18n.a.

5.726.146.306.466.596.637.016 89

6.99

5.545.765.75

7 80

7.527.747.788.158.09

1.89

Mar. 21

5.265.00

5.505.555 61

5.385.40541

5.445.52

5.435.545 70

5.50

5.175.295.48

5.135.26n.a.

5.816.256.426.586.696.737.096 97

7.07

5.595.765.78

7 88

7.617.827.868.228.11

1.93

Mar. 28

5.405.00

5.665.705 75

5.545.555 52

5.585.65

5.615.655 81

5.61

5.255.365.59

5.265.33n.a.

5.946.366.526.666.766.797.117 00

7.09

5.595.765.81

7 90

7.637.847.888.248.22

1.92

1. The daily effective federal funds rate 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. An average of offering rates on paper directly placed by finance companies.8. Representative closing yields for acceptances of the highest-rated money center banks.9. An average of dealer offering rates on nationally traded certificates of deposit.

10. Bid rates for Eurodollar deposits at approximately 11:00 a.m. London time. Data arefor indication purposes only.

11. Auction date for daily data; weekly and monthly averages computed on an issue-datebasis.

12. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Depart-ment of the Treasury.

13. General obligation bonds based on Thursday figures; Moody's Investors Service.14. 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.

15. Daily figures from Moody's Investors Service. Based on yields to maturity on selectedlong-term bonds.

16. 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.

17. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks inthe price index.

NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly andG.13 (415) monthly statistical releases. For ordering address, see inside front cover.



1.36 STOCK MARKET Selected Statistics

Indicator

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 = 50)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 brokers5

11 Margin accounts6

12 Cash accounts

13 Margin stocks14 Convertible bonds15 Short sales

1994 1995 1996

1996

July Aug. Sept. Oct. Nov. Dec.

1997

Jan. Feb. Mar.

Prices and trading volume (averages of daily figures)1

254.16315.32247.17104.96209.75

460.42

449.49

290,65217,951

291.18367.40270.14110.64238.48

541.72

498.13

345,72920,387

357.98453.57327.30126.36303.94

670.49

570.86

409.740

22,567

345.06438.58316.57122.66287.89

644.06

550.16

398.24521,281

354.59444.91321.61122.37302.95

662.68

554.88

333,34317,916

360.96459.69323.12121.12308.16

674.88

564.87

400,95119,449

373.54473.98332.80130.04324.42

701.46

574.46

420,83518,780

388.75490.60348.32135.88345.30

735.67

583.21

443,52122,151

391.61494.38352.28128.55350.01

743.25

582.96

431.53823,648

403.58509.18359.40131.95361.45

766.22

585.09

526,63124,019

418.57524.30364.15142.88388.75

798.39

593.29

508,19921,250

416.72523.08372.37132.38387.19

792.16

593.64

496,24119,232

Customer financing (millions of dollars, end-of-period balances)

61,160

14.09528,870

76,680

16,25034,340

97,400

22.54040,430

79,860

17,70032,935

82,980

17,52032,680

89,300

17,94035,360

88,740

19,89036,610

91,680

20,02036,650

97,400

22.54040,430

99,460

22.87041,280

100,000

22,20040,090

100,160

22,96041,050

Margin requirements (percent of market value and effective date)7

Mar. 11, 1968

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 1983, 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 w as 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 effective 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 writing 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

1995

Calendar year

1996

U.S. budget1

1 Receipts, total2 On-budget3 Off-budget4 Outlays, total5 On-budget6 Off-budget7 Surplus or deficit ( - ) , total8 On-budget9 Off-budget

Source offinancing (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

1,258,627923,601335.026

1.461,7311,181,469

279,372-203,104-258,758

55,654

185,34416,564

1,196

35,9426,848

29,094

1,351,8301,000,751

351,0791,515,7291,227,065

288,664-163,899-226,314

62,415

171,288-2,007-5,382

37,9498,620

29,329

1,453,0621,085.570

367,4921.560,3301,259.872

300,458- 107,268-174,302

67,034

129,712-6,276

-16,168

44.2257,700

36.525

99,65673,64426,012

139,915113,29026,625

-40,259-39,646

-613

15,58818,5926,079

25,6335,897

19,736

97,84970,01827,831

135,727106,32729,400

-37,878-36,309

-1,569

45,459-673

-6,908

26,3064,857

21,449

148,489119,52828,961

129,666120,429

9,23718,823-901

19,724

-12,321-6,488

-14

32,7947,742

25,052

150,718113,84136,877

137,354110.55226,80213,3643,289

10,075

-16,776-3,785

7,197

36,5796,770

29,809

90,29359,67330,620

134,304104,96429,339

-44,010-45,291

1,281

35,96821,357

-13,315

15,2225,2589,965

108.09973,86934,230

129,422100,42728,996

-21,323-26,558

5,234

28,833-18.274

10,764

33,4965,945

27,551

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 U.S. 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 U.S. Government; fiscal year totals: U.S. Office of Managementand Budget, Budget of the U.S. Government.



1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1

Millions of dollars

Source or type

RECEIPTS

1 AH sources

2 Individual income taxes, net3 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 AH types

17 National defense18 International affairs19 General science, space, and technology20 Energy21 Natural resources and environment22 Agriculture

23 Commerce and housing credit24 Transportation25 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 government33 Net interest5

34 Undistributed offsetting receipts6

Fiscal year

1995

1,351,830

590,244499,927175,85585,538

174,42217,418

484,473451,045

28,8784,550

57,48419,30114,76328,561

1,515,729

272,06616,43416,7244,936

22,0789,778

-17,80839,35010,641

54,263

115,418495,701220,493

37,89016,21613,835

232,169-44,455

1996

1,453,062

656,417533,080212,168

88,897

189,05517,231

509,414476.361

28,5844,469

54,01418.67017,18925,534

1,560,330

265,74813.49616,7092,836

21,6149,159

-10.64639,56510,685

52,001

119.378523,901225,989

36,98517,54811,892

241,090-37.620

Calendar year

1995

HI

711,003

307.498251 398132,00175,959

92,13210,399

261.837241,557

18,0012,279

27.4528,8487,425

16,211

761,289

135,6484,7978,6112,358

10,2734.039

-13,47118,1935,073

25,893

59.057251,975117,190

19,2698.0515,796

116,169-17,631

H2

656,865

292,393256,91645,52110,058

88,3027.518

224.269211.323

10,7022,247

30,0149,8497.718

11,839

752,856

132,8876,9087,9701,992

11,3923,065

-3,94720.7255,569

26,212

57,128251.388104,847

18,6788,0917,601

119,348-26,995

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

132,5988,0748,8971,356

10.25472

-6.88518,2905,245

25,979

59,989264,647121,187

18,1409,0154,641

120,576-16,716

H2

707,551

323,884279,98853,491

9,604

95,36410,053

240,326227,777

10,3022,245

27,0169,2948,835

12,888

799,851

138,3508,8959,498

80611,64210,699

-6,19821,205

6,192

26,032

61,466269,409107,181

21,1079,5956,544

122,568-25,140

Jan.

150,718

87,23955.42633,576

1,763

6,2851,477

48,79447,302

1,137355

4,2191,4681,6152,574

137,354

22,1371,4051,429-52

1,8842,169

-1,5322.8951,014

4,660

10,75346.64119,610

3,2831,7451,108

21,092-2,888

1997

Feb.

90,293

37,40048.351

2.94813,906

4,0141,777

41,78438,9692,423

391

5.1061,3791,1801,208

134,304

20,897898

1.417211

1,508- 9 6

-1,4602,842

608

5.100

9,16944,97326,346

3.3842,074

11919,362

-3.049

Mar.

108,099

36,43449,9946,380

19,955

21,0592,335

44,19743.547

311339

3,9981.3151,4681,962

129,422

19,8541,0941,478

4901,410

26

-2,9862,810

920

3,843

10,47843,93523,639

1,7721.6121,447

20,410-2,810

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: U.S. Office of Management and Budget, Budget of the U.S.

Government, Fiscal Year 1998: monthly and half-year totals: U.S. Department of the Trea-sury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government.


Federal Finance All

1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION

Billions of dollars, end of month

Item

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

Mar. 31

4,891

4.8643,6101,255

27260

4,775

4,7740

4.900

1995

June 30

4,978

4.9513,6351.317

27270

4,861

4,8610

4,900

Sept. 30

5,001

4.9743.6531,321

27270

4,885

4,8850

4.900

Dec. 31

5,017

4.9893,6841.305

28280

4,900

4.9000

4,900

Mar. 31

5,153

5,1183,7641,354

36288

5,030

5.0300

5,500

1996

June 30

5,197

5.1613.7391,422

3628

8

5,073

5,0730

5,500

Sept. 30

5,260

5,2253,7781,447

3527

8

5,137

5,1370

5,500

Dec. 31

5,357

5.3233,8261,497

3427

8

5,237

5,2370

5,500

1997

Mar. 31

5,415

5,381n.a.n.a.

34n.a.n.a.

5,294

5,2940

5,500

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

1 Total gross public debt

By type2 Interest-bearing3 Marketable4 oills5 Notes6 Bonds7 Inflation-indexed notes'8 Nonmarketable"9 State and local government series

10 Foreign issues3

11 Government12 Public13 Savings bonds and notes14 Government account series4

15 Non-interest-bearing

By holder5

16 U.S. Treasury and other federal agencies and trust funds17 Federal Reserve Banks18 Private investors19 Commercial banks20 Money market funds21 Insurance companies22 Other companies23 State and local treasuries6'7

Individuals24 Savings bonds25 Other securities26 Foreign and international8

27 Other miscellaneous investors7'9

1993

4,535.7

4,52.32,989.5

714.61,764.0

495.90

1,542.9149.543.543.5

.0169.4

1,150.03.4

1,153.5334.2

3,047.4322.2

80.8234.5213.0590.8

171.9137.9623.0673.3

1994

4,800.2

4,769.23.126.0

733.81.867.0

510.30

1,643.1132.642.542.5

.0177.8

1.259.831.0

1,257.1374.1

3.168.0290.467.6

240.1226.5468.3

180.5150.7688.6855.3

1995

4,988.7

4,964.43.307.2

760.72,010.3

521.20

1.657.2104.540.840.8

.0181.9

1,299.624.3

1,304.5391.0

3,294.9278.771.3

241.5228.8344.1

185.0162.7862.2920.6

1996

5,323.2

5,317.23,459.7

777.42,112.3

555.00

1,857.5101.337.447.4

.0182.4

1,505.96.0

1,497.2410.9

3,411.2272.0

92.1234.0258.5290.0

187.0169.6

1,131.5776.5

Q2

5,161.1

5.126.83,348.4

773.62,025.8

534.10

1,778.397.837.837.8

.0183.8

1,428.534.3

1,422.4391 0

3.3473280.2

82.1234.4230.9316.8

186.5161.1959.8895.5

1996

Q3

5,224.8

5,220.83,418.4

761.22,098.7

543.50

1,802.495.737.537.5

.0184.2

1,454.74.0

1,447.0390 9

3,386'2274.8

85.2234.5249.1298.5

186.8167.0

1,030.9859.4

Q4

5,323.2

5,317.23,459.7

777.42,112.3

555.00

1,857.5101.337.447.4

.0182.4

1,505.96.0

1,497.2410.9

3,41L2272.092.1

234.0258.5290.0

187.0169.6

1,131.5776.5

1997

Ql

5,380.9

5,375.13,504.4

785.62,131.0

565.47.4

1,870.8104.836.836.8

.0182.6

1,516.65.8

i

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 States; data by holder, Treasury Bulletin.



1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1

Millions of dollars, daily averages

1996 1997 1997, week ending

Feb. 5 Feb. 12 Feb. 19 Feb. 26 Mar. 5 Mar. 12 Mar. 19 Mar. 26

OUTRIGHT TRANSACTION

By type of security1 U.S.'Treasury bills

Coupon securities, by maturity2 Five years or less3 More than five years4 Federal agency5 Mortgage-backed

By type of counterpartyWith interdealer broker

6 U.S. Treasury7 Federal agency8 Mortgage-backed

With other9 U.S. Treasury

10 Federal agency11 Mortgage-backed

FUTURES TRANSACTIONS3

By type of deliverable security12 U.S. Treasury bills


OPTIONS TRANSACTIONS4

By type of underlying security17 U.S. Treasury bills


48,957

89,77550,43634,57133,754

104,432584

11,606

84,73733,98722,148

300

1,81413,178

00

0

1,6263,559

0494

45,941

110,87555,79735,62445,018

122,6211,14114,419

89,99334,48330,598

206

1,48914,518

00

0

3,2885,045

0455

43,025

108,28366,96736,07045,373

122,6731,338

15,872

95,60234,73229,501

296

1,79713,442

00

0

3,7705,196

0734

41,075

113,31558,84534,47333,766

124,9471,147

10,394

88,28933,32523,371

176

1,40814,992

00

0

2,7676,008

0316

49,615

105,20170,72236,51944,544

128,9221,266

15,036

96,61635,25229,508

237

1,35913,645

00

3,8795,332

0640

35,699

91,50066,00133,23759,466

108,0181,037

21,133

85,18232,20038,332

165

1,03511,887

00

0

2,9134,334

01,074

39,097

98,00470,68541,20039,497

114,9382,049

14,718

92,84839,15124,779

513

1,33813,216

00

2,7565,920

0527

43,780

128,32462,38434,22236,767

133,3671,136

11,695

101,12133,08625,072

297

2,58314,086

00

0

5,0845,444

0799

57,425

125,32367,77136,84244,647

138,6761,283

16,722

111,84335,55927,925

272

3,31615,867

00

0

4,4965,079

0274

46,179

104,38453,63133,36654,640

116,3491,406

18,741

87,84631,96035,898

272

1,84514,100

00

n.a.

2,5884,568

0469

45,170

108,23153,51236,00435,581

118.810849

13,083

88,10435.15522,498

427

2,05915,972

00

n.a.

3,6184,658

0626

57,182

132,15155,09036,53831,773

141,2271,123

12,382

103,19535,41419,390

740

1,68113,807

00

n.a.

4,0564,118

0786

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 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"securities 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 U.S. 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 July 6, 1994.


1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1

Millions of dollars

Federal Finance A29

1996 1997 1997, week ending

Feb. Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 Mar. 5 Mar. 12 Mar. 19

NET OUTRIGHT POSITIONS3

By type of security1 U.S.'Treasury bills


NET FUTURES POSITIONS

By type of deliverable security6 U.S. Treasury bills

Coupon securities, by maturity7 Five years or less8 More than five years9 Federal agency

10 Mortgage-backed

NET OPTIONS POSITIONS

By type of deliverable security11 U.S." Treasury bills


Reverse repurchase agreements16 Overnight and continuing17 Term

Securities borrowed18 Overnight and continuing19 Term

Securities received as pledge20 Overnight and continuing . . .21 Term

Repurchase agreements22 Overnight and continuing .23 Term

Securities loaned24 Overnight and continuing .25 Term

Securities pledged26 Overnight and continuing .27 Term

Collateralized loans28 Overnight and continuing .29 Term30 Total

MEMO: Matched book6

Securities in31 Overnight and continuing .32 Term

Securities out33 Overnight and continuing .34 Term

14,525

-7 ,743-22,372

23,34843,300

-2,418

- 7 5

0

-3,0361,526

01.054

255,137437,241

194,67473,195

5,4845

564,075393,364

3,4194,117

58,5321,682

n.a.10,025

254,678434,522

334,841341,796

5,582

-8.518-24,85125,13437,786

-2,074

388-7,784

00

0

-3,148-50

1,123

5,047

-8,602-20,81822,89639,289

-3,437

851-11,153

00

0

-2.518382

01,383

826

-12,981-26,37925,05737,389

-2,207

866-7,179

00

0

-2,483-1,098

01,110

4,658

-10,030-25,82723,79439,019

-2,772

301-6,917

00

0

-2,33820

1,652

6,689

-2,756-21,06423,32038,710

-3,318

18-11,766

00

0

-3,2621,245

01,447

7,306

-9,091-17,43421,07540,043

-15,50100

-3,3091,204

01,433

-1,553

-9,897-19,54424,59538,582

-3,868

1,636-9,987

00

0

-1,241-852

01,271

15,465

-19,249-23,74219,59541,819

2,406-8,454

00

0

-2,063-242

0701

14,794

-13,783-26,74525,94638,726

-2,920

2,403-5,803

00

0

-2,078-327

0656

Financing5

276,107486,628

199,78480,149

5,29845

578,791443,233

4,4814,864

58,1402,391

n.a.9,386

279,556485,466

351,842392,408

298,371487,843

205,65683,514

3,20443

604,841453,814

6,8816,746

57,526

2,245

n.a.13,457

294,190487,344

367,612400,188

267,689519,291

200,13785,576

3,145112

558,786479,169

6,4826,570

58,5922,675

n.a.9,038

270,867513,311

337,780428,627

290,542511,244

206,24283,844

3,20695

587,584463,182

6,3016,444

55,2852,729

n.a.n.a.12,037

293,236508,892

370,367413,073

297,347540,915

203,28586,297

3,1395

602,531496,351

7,0836,826

55,3252,771

n.a.n.a.16,808

301,239542,375

383,443447,702

315,435436,436

209,73282,724

632,316408,317

7,0586,792

60,8411,832

n.a.n.a.12,611

304,851444,381

376,680359,655

289,915472,030

203,28982,110

3,280n.a.

590,837455,901

7,1496,720

57,9561,940

n.a.12,451

282,091464,952

344,020391,887

291,399478,859

206,50680,628

3,088

608,923433,452

6,0717,155

57,7201,702

n.a.n.a.11,763

276,941469,602

356,156372,589

292,233503,643

218,68379,553

4,267n.a.

611,677458,238

4,6997,174

60,7391,809

n.a.n.a.13,223

291,987491,281

370,533395,991

8,298

-26,300-28,827

24,81643,914

-2,186

3,893-4,903

00

0

-2,184-517

01,420

276,570524,732

213,56179,443

7,316n.a.

590,616481,060

5,0457,201

62,7872,297

n.a.n.a.12,553

507,351

414,850

1. Data for positions and financing are obtained from reports submitted to the FederalReserve Bank of New York by the U.S. 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 specify

4. Futures positions reflect standardized agreements arranged on an exchange. All 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 maturity of more than one business day. Financingdata are reported in terms of actual funds paid or received, including accrued interest.

6. Matched-book data reflect financial intermediation activity in which the borrowing andlending transactions are matched. Matched-book data are included in the financing break-downs given above. The reverse repurchase and repurchase numbers are not always equalbecause of the "matching" of securities of different values or different types of collateraliza-tion.

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 July 6, 1994.


A30 Domestic Financial Statistics D June 1997

1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding


Agency 1993

Sept. Oct.

1 Federal and federally sponsored agencies.

2 Federal agencies. . .

2 , 3 "

Defense Department^Export-Import Bank2'Federal Housing Administration4

Government National Mortgage Association certificates ofparticipation5

Postal Service6

Tennessee Valley AuthorityUnited States Railway Association6

10 Federally sponsored agencies7

11 F d l H L B ky p g

11 Federal Home Loan Banks12 Federal Home Loan Mortgage Corporation13 Federal National Mortgage Association14 Farm Credit Banks8

15 Student Loan Marketing Association9

16 Financing Corporation10

17 Farm Credit Financial Assistance Corporation"18 Resolution Funding Corporation12

MEMO19 Federal Financing Bank debt13

Lending to federal and federally sponsored agencies20 Export-Import Bank3

21 Postal Service6

22 Student Loan Marketing Association23 Tennessee Valley Authority24 United States Railway Association6

Other lending14

25 Farmers Home Administration26 Rural Electrification Administration27 Other

570,711

45,1936

5,315255

n.a.9,732

29,885n.a.

523.452139,51249,993

201,11253,12339,784

8,1701,261

29,996

128,187

5,3099,7324,7606,325

38,61917,57845,864

738,928

39,1866

3.455116

n.a.8,073

27,536n.a.

699,742205,81793,279

257,23053.17550,335

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

29,429n.a.

807,264243,194119,961299,174

57,37947,529

8,1701,261

29,996

78,681

2,0445,765n.a.3,200

21,01517,14429,513

925,823

29,3806

1,44784

n.a.n.a.

27,853n.a.

896,443263,404156,980331,270

60,05344,763

8,1701,261

29,996

58,172

18,32516,70221,714

896,670

30,5996

1,82882

n.a.n.a.

28,683n.a.

866,071254,920146,954319,153

60,12644,962

8,1701,261

29,996

62,846

1,822n.a.

n.a.n.a.

18,70016,75125,573

901,089

30,8006

1,82882

n.a.n.a.

28,884n.a.

870,289253,836148,435321,11059,71247,225

8,1701,261

29,996

61,051

1,822

18,70016,75323,776

912,100

29,9096

1,828

n.a.n.a.

27,991n.a.

882,191252,868158,158324,378

59,79746,991

8,1701,261

29,996

58,921

925,823

29,3806

1,44784

n.a.n.a.

27,853n.a.

896,443263,404156,980331,270

60,05344,763

8,1701,261

29,996

58,172

1,822n.a.n.a.n.a.

1,433n.a.n.a.n.a.

18,32516,77222,002

18,32516,70221,714

257,055163,171333,302

67,610n.a.8,1701,261

29,996

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 the 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 noncontingent 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.

11. The Farm Credit Financial Assistance Corporation, established in January 1988 toprovide assistance to the Farm Credit System, undertook its first borrowing in July 1988.

12. The Resolution Funding Corporation, established by the Financial Institutions Reform,Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989.

13. The FFB, which began operations in 1974, is authorized to purchase or sell obligationsissued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for thepurpose of lending to other agencies, its debt 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

1 All issues, new and refunding1

By type of issue2 General obligation3 Revenue

By type of issuer4 State5 Special district or statutory authority6 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

1994

153,950

54,40499,546

19,18695,89638,868

105,972

21,26710,83610,19220,289

8,16135,227

1995

145,657

56,98088,677

14,66593,50037,492

102,390

23,96411,8909,618

19,5666,581

30,771

1996

171,222

60,409110,813

13,651113,22844,343

112,298

26,85112,3249,791

24,5836,287

32,462

Aug.

12,493

4,0748,419

3768,4333,684

7,093

2,337622417

2,348274

1,095

Sept.

11,693

3,0248,669

8748,1372,682

7,837

1,522850720

2,100439

2,206

1996

Oct.

16,750

5,46711,283

1,76910,9234,058

12,113

2,6932,9071,4411,573

5562,943

Nov.

14,520

5,1349,386

1,3519,0914,078

8,656

1,5301,1641,1021,974

4602,426

Dec.

17,431

4,75512,676

66312,3154,453

12,311

2,306736

1,0063,2941,0813,888

Jan.

10,340

4,1616,179

7286,3073,305

6,106

1,945808751

1,265231

1,106

1997r

Feb.

11,924

4,2857,639

7138,2162,995

8,342

1,931634895

1,284954

2,644

Mar.

13,478

5,4648,014

4,0377,0862,355

9,010

2,374479954

2,639309

2,255

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 1995

1996

July Aug. Sept. Oct. Nov. Dec/ Jan.r Feb.

1 All issues1

2 Bonds2

By type of offering3 Public, domestic4 Private placement, domestic3 .5 Sold abroad

By industry group6 Manufacturing7 Commercial and miscellaneous8 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 miscellaneous18 Transportation19 Public utility20 Communication21 Real estate and financial

583,240

498,039

365,22276,06556,755

43,42340,7356,86713,32213,340

380,352

85,155

12,57047,82824,800

17,79815,7132,2032,214494

46,733

573,206

408,80487,49276,910

61,07050,6898,43013,75122,999

416,269

100,573

10,91857,55532,100

n.a.

n.a.

386,280n.a.

74,793

41,95934,0765,1118,16113,320

358,446

n.a.

33,208r

83,052r

41,023

33,255

27,368n.a.

5,887

4,1662,712

5351,046

64724,149

7,768r

1,7945,974r

n.a.

1,7592,630r

104300

1,097l,878r

44,447

38,685

32,605n.a.

6,081

3,0922,661

293174

1,45031,016

5,762

1,1684,594

l,050r

2,14314330651

2,070r

60,579

53,875

44,658n.a.

9,218

4,0453,195

620279829

44,908

6,703r

1,8904,813r

7873,080

0212

02,624r

60,387

47,498r

39,855r

n.a.7,643r

5,9695,010

4361,067

80234,215r

12,889r

3,8559,034r

l,588r

5,752r

42100480

4,928r

57,937

44,569r

38,948r

n.a.5,62lr

2,7204,282

270773r

47536,049r

13,368r

5,6567,712r

1,5303,974

36721042

7,219

48,747

39,585

37,108n.a.2,477

5,0961,727

341680628

31,113

9,162

5,4523,710n.a.

8992,922

5410323

5,161

56,610

43,644

35,286n.a.8,357

4,0884,706

366858

1,21032,415

12,967

7,8835,084

6081,827

2501,847

08,436

46,724

38,597

32,699n.a.5,899

4,7911,829

1001,477

56529,836

8,127

1,4316,696n.a.

2,0083,041

2589628

2,686

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 Assets1

Millions of dollars

Item

1 Sales of own shares

2 Redemptions of own shares3 Net sales3

4 Assets4

5 Cash5

6 Other

1995

871,415

699,497171,918

2,067,337

142,5721,924,765

1996

1,149,918

853,460296,458

2,637,398

139,3962,498,002

Aug.

86,225

64,99321,232

2,366,030

155,1292,210,901

Sept.

84,171

65,60118,570

2,474,339

156,6892,317,651

1996

Oct.

92,730

72,53720,193

2,517,049

149,9372.367,112

Nov.

87,958

65,94922,009

2,652,884

146,0442,506,840

Dec.

122,792

87,94934,843

2,637,398

137,9732,499,425

Jan.r

134,460

96,24338,218

2,752,273

152,2972,599,976

1997

Feb.

102,169

73,87128,298

2,772,715

153,5252,619,189

Mar.

101,311

80,08521,226

2,700,084

159,0862,540,998

1. Data on sales and redemptions exclude money market mutual funds but includelimited-maturity municipal bond funds. Data on asset positions exclude both money marketmutual funds and limited-maturity municipal bond funds.

2. Includes reinvestment of net income dividends. Excludes reinvestment of capital gainsdistributions and share issue 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

2 Profits before taxes3 Profits-tax liability4 Profits after taxes5 Dividends6 Undistributed profits

7 Inventory valuation8 Capital consumption adjustment

1994

529.5531.2195.3335.9211.0124.8

-13.311.6

1995

586.6598.9218.7380.2227.4152.8

-28.115.9

1996

654.0639.9233.0406.8244.2162.6

-8.9 r

23.1

1995

Ql

560.0594.5217.3377.2221.7155.5

-51.917.4

Q2

562.3589.6214.2375.3224.6150.8

-42.315.0

Q3

612.5607.2224.5382.8228.5154.3

-9.314.6

Q4

611.8604.2218.7385.5234.7150.8

_ o o

16J

1996

Ql

645.1642.2233.4408.8239.9168.9

-17.420.4

Q2

655.8644.6236.4408.1243.1165.1

-11.022.3

Q3

661.2635.6233.4402.2245.2156.9

2.023.6

Q4

654.1637.1228.9408.2248.7159.5

-9.2 r

26.2r

SOURCE. U.S. Department of Commerce, Survey of Current Business.


Securities Markets and Corporate Finance A3 3

1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1

Billions of dollars, end of period; not seasonally adjusted

Account

ASSETS

1 Accounts receivable, gross2 Consumer3 Business4 Real estate

5 LESS: Reserves for unearned income6 Reserves for losses

7 Accounts receivable, net8 All other

9 Total assets

LIABILITIES AND CAPITAL

10 Bank loans11 Commercial paper

Debt12 Owed to parent13 Not elsewhere classified14 All other liabilities15 Capital, surplus, and undivided profits

16 Total liabilities and capital

551.0134.8337.6

78 5

55.012.4

483.5183.4

666.9

21.2184.6

51.0235.099.575.7

666.9

614.6152.0375.9

86 6

63.214.1

537.3210.7

748.0

23.1184.5

62.3284.7106.287.2

748.0

657.8154.2397.9105 7

59.114.8

583.9242.5

826.4

27.8192.9

79.2320.0108.697.9

826.4

1995

Q2

586.9141.7361.883 4

62.113.7

511.1198.1

709.2

21.5181.3

57.5264.4102.182.5

709.2

Q3

594.7146.2362.4

86 1

61.213.8

519.7198.1

717.8

21.8178.0

59.0272.1102.484.4

717.8

Q4

614.6152.0375.9

86 6

63.214.1

537.3210.7

748.0

23.1184.5

62.3284.7106.287.2

748.0

1996

Ql

621.8151.9380.9

89 1

61.514.2

546.1212.8

758.9

23.5184.8

62.3291.4105.791.1

758.9

Q2

631.4154.6383.7

93 1

59.614.1

557.7216.1

773.8

26.2186.9

68.4301.3100.190.9

773.8

Q3

642.0154.8387.0100 2

58.914.7

568.4226.8

795.2

27.5189.4

71.9311.5102.892.1

795.2

Q4

657.8154.2397.9105 7

59.114.8

583.9242.5

826.4

27.8192.9

79.2320.0108.697.9

826.4

1. 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.

1.52 DOMESTIC FINANCE COMPANIES Consumer, Real Estate, and Business Credit1

Millions of dollars, amounts outstanding, end of period

Type of credit

1 Total

2 Consumer3 Real estate2

4 Business

5 Total

6 Consumer7 Motor vehicles8 Other consumer9 Securitized motor vehicles4

10 Securitized other consumer4

11 Real estate2

12 Business13 Motor vehicles14 Retail loans5

15 Wholesale loans6

16 Leases17 Equipment18 Loans7

19 Leases20 Other business8

21 Securitized business assets4

22 Retail loans23 Wholesale loans24 Leases

1994 1995 1996

1996


1997

Jan.' Feb.

Seasonally adjusted

615,618

176,08578,910

360,624

691,616

198,86187,077

405,678

755,419r

213,150'106,300435,969'

739,183

212,979100,317425,887

749,165

212,511102,933433,720

757,064r

212,775104,776439,514'

755,419r

213,150'106,300435,969r

761,103

213,110108,596439,398

763,677

213,053111,082439,542


620,975

178,99961,60973.22131,89712,27278,479

363,497118.19721,51435,03761,646

157.95349,358

108,59561,49525,8524,494

14,8266,532

697,340

202,10170,06181,98833,63316,41986,606

408,633133,27725,30436,42771,546

177,29759,109

118,18865,36332,6964,723

21,3276,646

761,342r

216,517'73,116'80,98435,64426,773'

105,728439,097'141,964'27,823'32,33781,804

184,94260,991

123,95171,11041,081

5,25024,73211,099

735,269

213,82776,33378,45134,84624,197

100,182421,260138,61528,87530,29479,446

181,11156,132

124,97967.29034,2444,600

23,1706,474

747,970

213,02675,91777,52734,60324,979

103,184431.760139,96629.08830,51580,363

179,99758.735

121,26274,05537,7424,650

23,1839,909

757,079r

214,22775,30477,86834,17726,878

104,943437.909'142,21028,82532,26281,123

182,229'60,167'

122,062'73,999'39,4715,402

23,39110,678

761,342r

216,517'73,116'80,98435,64426.773'

105,728439.097'141,964'27,823'32,33781,804

184,94260,991

123,95171,11041,081

5,25024,73211,099

762,511

214,72573,52580,92733,97626,297

109,100438,686144,00827,73033,76482,514

182,90858,276

124,63271,75540,015

5,08624,14310,786

764,872

212,68373,94079,79833,06925,876

111,507440.682147,82128,88336,16482,774

182,79657,383

125.41372,66137,4044,778

21,69910,927

1. Includes finance company subsidiaries of bank holding companies but not of retailersand banks. Data are before deductions for unearned income and losses. Data in this table alsoappear in the Board's G.20 (422) monthly statistical release. For ordering address, see insidefront cover.

2. Includes all loans secured by liens on any type of real estate, for example, first and juniormortgages and home equity loans.

3. Includes personal cash loans, mobile home loans, and loans to purchase other types ofconsumer goods such as appliances, apparel, general merchandise, 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. Passenger car fleets and commercial land vehicles for which licenses are required.6. Credit arising from transactions between manufacturers and dealers, that is, floor pi

financing.7. Beginning with the June 1996 data, retail and wholesale business equipment loans ha

been combined and are no longer separately available.8. Includes loans on commercial accounts receivable, factored commercial accounts, a

receivable dealer capital; small loans used primarily for business or farm purposes; awholesale and lease paper for mobile homes, campers, and travel trailers.



1.53 MORTGAGE MARKETS Mortgages on New Homes

Millions of dollars except as noted

h e m

PRIMARY MARKETS

Terms'1 Purchase price (thousands of dollars)2 Amount of loan (thousands of dollars)3 Loan-to-price ratio (percent)4 Maturity (years) ^5 Fees and charges (percent of loan amount)'

Yield (percent per year)6 Contract rate'7 Effective rate13

8 Contract rate (HUD series)4

SECONDARY MARKETS

Yield (percent per vear)9 FHA mortgages (Section 203)3

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 Total '18 FHA/VA insured19 Conventional

Mortgage transactions (during period)20 Purchases21 Sales

22 Mortgage commitments contracted (during period)9

1994 1995 1996

1996


1997

Jan. Feb. Mar.

Terms and yields in primary and secondary markets

170.4130.878.827.51.29

7.267.478.58

8.687.96

175.8134.578.627.71.21

7.657.858.05

8.187.57

182.4139.278.227.21.21

7.567.778.03

8.197.48

187.1141.777.227.71.28

7.777.988.23

8.567.85

183.9139.077.727.41.11

7.767.958.01

8.007.53

188.1143.378.027.41.19

7.607.807.73

8.147.19

170.8129.979.327.51.01

7.637.797.91

8.067.33

172.4133.679.727.91.02

7.657.817.94

8.067.51

166.6130.980.928.21.03

7.617.787.94

8.087.37

169.2132.180.828.00.99

7.727.888.25

8.557.69

Activity in secondary markets

222.05727.558

194,499

62,389

54,0381,820

72.693276

72,416

124.697117,110

136,067

253,51128.762

224,749

56.598

56,092360

107,424267

107,157

98.47085,877

1 18.659

287.05230.592

256.460

68.618

65.859130

137,755220

137,535

128,566119,702

128.995

278,00330,840

247,163

5,353

4,26453

129.426197

129,229

8.6878,167

9.315

279,54430,815

248,729

4,235

5.1990

132,259227

132.032

9,5388,797

8,214

283.83530,744

253,091

6,805

6.5334

135.270223

135,047

9,1988,456

9,032

287,05230,592

256,460

6,178

3,99128

137,755220

137,535

9,9439,220

9,905

288,50430,352

258,152

4,128

4.38471

138,935216

138,719

9.5079,204

9,021

288,95130,119

258,832

3,029

4,4070

139.925215

139,710

8,20410.271

7,537

292,11530,100

262,015

5,839

8,2991

144,558215

144,343

7,4036,796

7,595

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 ihe 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 o\ ion vears.

4. Average contract rale on new commitments for conventional tirst 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, mimmum-downpayment first mortgages insuredby the Federal Housing Administration (FHAI 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 the 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 OUTSTANDING'


Type of holder and property

Q4 Ql Q2 Q3 Q4P

1 AH holders

By type of property2 One- to four-famiiy residences .3 Multifamily residences4 Nonfarm, nonresidential5 Farm

By type of holder6 Major financial institutions7 Commercial banks2

8 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 Multifamily .'42 Nonfarm, nonresidential43 Farm44 Federal National Mortgage Association45 One- to four-family46 Multifamily47 Federal Land Banks48 One- to four-family49 Farm50 Federal Home Loan Mortgage Corporation . . . .51 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 Corporation . . . .58 One- to four-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 others7

74 One- to four-family75 Multifamily '76 Nonfarm, nonresidential77 Farm

4,275,217

3,233,830270,824689,36581,198

1,768,093940,595556,66038,657324,41320,866

598,437470,00067,36760,765

305229,0619.45825,814184,3059,484

327,014

157

41,38615,30310,9405,4069,73912,2155,3646,85117,2847,20353274,754

0

14,1122,3671,42610,319

0166,642151,31015,33228,4601,675

26,78546,89244,3452,547

1,570,666414,066404,8649,202

447.147442,6124,535

495,525486,804

8.72128501310

213,901179,7308,70125,469

0

609,444456,11565,39873,92214,009

4,481,075

3,437.781275,705684,61882,971

1,815.8451,004,322611,39139,360331,00422,567

596,191477,62664,34353,933

289215,332

7,91024,306173.5399,577

319,327660

41,78113,82611,3195,67010,96610,9644,7536.21110.4285,2002,8592,369

0

7,8211,0491,5955.177

0178,059162,16015,89928,5551,671

26.88541,71238,8822,830

1,726,833450,934441,1989,736

490,851487,725

3,126530,343520,7639,580

193097

254,686202,98714,92536,774

0

619,069460,63269,61576.14212,681

4,714,346

3,634,060287.993707,67384,620

1,888.9701.080,366663,61443,842349,08123,829

596.789482.35161,98852.162

288211.8157,476

23,920170,7839,636

313,760220

41.79112,64311,6176,24811.2829,8095,1804,6291.8646916475250

4,303492428

3,3830

183,782168,12215,66028,4281,673

26.75543,78139,9293,852

1,861.864472,292461,44710,845

515,051512,238

2,813582,959569,72413,235

112054

291,551222,89221,27947,380

0

649,752485,58473,23978,10512,824

4,714,346

3,634,060287,993707,67384,620

1,888,9701,080.366663.61443,842349,08123.829596,789482,35161,98852.162

288211,8157,47623,920170.7839,636

313,760

20

41,79112,64311,6176,24811,2829.8095,1804,6291,864691647525

04,303492428

3,3830

183,782168,12215,66028.4281.673

26.75543,78139,9293,852

1,861,864472,292461,44710,845

515.051512,238

2,813582,959569,72413,235

112054

291,551222,89221,27947,380

0

649,752485.58473,23978,10512,824

4,792,478

3,699,671291,893715,69685,217

1,901,5241,087,207665,93544.700352.64123.931

602.631489,63460,54052,155

302211,6867,47223.906170,6819,627

312,950220

41,59412,32711,6366,36511,2668,4394,2284,211

00000

5,553839

1,0993,616

0183,531167,89515,63628,8911,700

27,19144.93940,8774,062

1,905,515475,829464,65011,179

524,327521,7222,605

599,546585,52714,019

101054

305,803230,22124,47751.104

0

672,488506,64173,82379,12912,896

4,889,980

3.778.471297.223727,74386,544

1,925.0561,099,643670,75645,368358,95624,563

612.849499,02160,82052.688

320212.5657,50324,007171,4029,653

314.694220

41,54711,98211,6456.55211,3698.0523,8614.191

00000

5,016840955

3.2210

186,041170.57215,46929,3621.728

27,63444,67440.4774.197

1,963.909485,441473,95011,491

536,671534.238

2,433621,285606,27115,014

91044

320,502239,15326,80954,541

0

686,321518,11674,82480,37913,002

4,975,730

3,853,772301,635732,90587,418

1.953,2141,112,961679.25446,530362,36224.815628,037513,29161,43452,991

320212.2167,48823,959171,0599.710

311,697

041,57511,63011,6526,68111,6136,6273,1903,438

00000

4,025675766

2,5840

185,221170,08315,13829,5791,740

27,83944.66840,3044,364

2,008,229497,248485,30311,945

545,608543,3412,267

636,362619,86916.493

70043

329,003244,52728,14156,336

0

702,590533,07475,510

13,118

5,054,447

3,912.079309,266744,99488,108

1.977,2081,136,139696,34047,026367,89324,880

628,719513,64461.67053,073

331212,3517,49323,972171,1529,735

308,708

20

41,59611,31911,6856,84111,7525,9773,2582.719

00000

1,2772311948530

184,445169,76514,68029,9731,764

28,21045,43740,6914.746

2,055,077505,977493,79512.182

554.260551,5132,747

650,780633,21017,570

30003

344,057246,90433,68963,464

0

713,454542,15176,38781,71813,198

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 CREDIT1

Millions of dollars, amounts outstanding, end of period

Holder and type of credit

1 Total

2 Automobile3 Revolving4 Other2

5 Total...

By major holder6 Commercial banks7 Finance companies8 Credit unions9 Savings institutions

10 Nonfinancial business3

11 Pools of securitized assets4

By major type of credit12 Automobile13 Commercial banks14 Finance companies15 Pools of securitized assets

16 Revolving17 Commercial banks. . v18 Nonfinancial business'19 Pools of securitized assets4

20 Other21 Commercial banks22 Finance companies23 Nonfinancial business3

24 Pools of securitized assets4

1994 1995 1996r

1996r


1997

Jan.r Feb.

Seasonally adjusted

966,457

317,182339,337309,939

1,103,296

350.848413,894338,554

1,195,069

377,181467,327350,561

1,178,600

374,476453,722350,402

1,186,719

376.713458,103351,904

1,191,969

376,539463,839351,591

1,195,069

377,181467,327350,561

1,205,289

378,153475.723351,414

1,212,022

378,234480,758353,029


990,247

462.923134,830119,59438,46886.621

147,811

319,715141,89561.60936,376

357,307182,02156,79096,130

313,225139,00773,22129,83115,305

1,131,881

507,753152,624131,93940,10685,061

214,398

354,055149,09470,62644,411

435,674210,29853.525

147,934

342,152148.36181,99831,53622.053

1,226,961

530,081154,176146,31444,71179,731

271,948

380,809153,98373,19251,171

491,813228,61546,901

188,712

354,339147,48380,98432,83032,065

1,182,632

517,145154,784141,96844,93468,513

255,288

377,898153,14376.33348,135

453,656211,185

38,816177,958

351.078152,81778,45129,69729,195

1,188,477

521,258153,444144,42344,86067,945

256,547

381.013154,84175,91748,020

457,589214,995

38,105178,590

349,875151,42277.52729,84029,937

1,199,875

522,973153,172145,07544,78669.797

264,072

380,713154,83775,30448,242

467,527217,924

39,275183,987

351,635150,21277,86830,52231,843

1,226,961

530,081154,176146,31444,71179,731

271.948

380,809153,98373,19251,171

491.813228,61546,901

188,712

354,339147,48380.98432,83032,065

1,216,479

527.210154,526146,59944,63675,617

267,891

377,742153.25673,59948,473

483,419224,15343,900

187,865

355,318149,80180.92731,71731,553

1,208,710

521,232153,814145,96944,56372,626

270,506

375,867152,21974,01647,070

479,407217,70241,813

192,332

353,436151,31179.79830,81331,104

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 securities 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 banks1

1 48-month new car2 24-month personal

Credit card plan3 All accounts4 Accounts assessed interest

Auto finance companies5 New car6 Used car

OTHER TERMS3

Maturity (months)1 New car8 Used car

Loan-to-value ratio9 New car

10 Used car

Amount financed (dollars)11 New car12 Used car

1994

8.1213.19

15.6915.77

9.7913.49

54.050.2

9299

15,37510,709

1995

9.5713.94

16.0215.79

11.1914.48

54.152.2

9299

16,21011,590

1996

9.0513.54

15.6315.50

9.84r

13.53

51.651.4

91100

16,98712,182r

Aug.

9.1113.37

15.6515.64

10.4913.92

51.451.3

92100

16,92712,132

Sept.

n.a.n.a.

n.a.n.a.

10.5213.87

51.951.0

91100

17,18212,108

1996

Oct.

n.a.n.a.

n.a.n.a.

10.4013.75

52.551.1

89101

17,43512,326

Nov.

9.0313.62

15.6215.52

10.3113.56

52.350.3

90102

17,71912,393

Dec.

n.a.n.a.

n.a.n.a.

8.60r

13.42

52.349.9

9099r

17,67012,492r

1997

Jan.

n.a.n.a.

n.a.n.a.

7.1712.93

55.151.5

9299

17,09012,362

Feb.

8.9213.46

15.8815.13

7.4413.08

54.651.1

9299

16.83712,202

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 sectorQ2 Q3 Q4 Ql Q2 Q3 Q4

Nonfinancial sectors

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 securities8 Corporate bonds9 Bank loans n.e.c

10 Other loans and advances11 Mortgages12 Home mortgages13 Multifamily residential14 Commercial15 Farm16 Consumer credit

By borrowing sector17 Household18 Nonfinancial business19 Corporate20 Nonfarm noncorporate21 Farm22 State and local government

23 Foreign net borrowing in United States24 Open market 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 U.S. government-related31 Government-sponsored enterprise securities .32 Mortgage pool securities33 Loans from U.S. government

34 Private35 Open market paper36 Corporate bonds37 Bank loans n.e.c38 Other loans and advances39 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 (ABSs)47 Finance companies48 Mortgage companies49 Real estate investment trusts (REITs)50 Brokers and dealers51 Funding corporations

544.5

304.0303.8

.2

240.5

8.630.567.6

-13.710.1

132.4189.4

-10 .4-48.1

1.45.0

200.219.233.9

-16.01.3

21.1

23.75.2

16.82.3- . 6

568.2

155.840.3

115.6.0

84.2- .782.72.2- . 6

.6

10.0-7.0

.0

.040.2

115.658.5-1.6

8.0.3

2.713.2

629.5

256.1248.3

7.8

10.074.875.2

3.6-9.4157.7187.2- 6 . 0

-24 .0.5

61.5

257.353.747.64.22.0

62.3

70.4-9.082.9

.7-4.2

699.9

621.3

155.9155.7

21.4-29.3

23.373.254.4

196.1204.0

1.7-11.3

1.8126.3

372.4132.8118.1

11.92.8

-39.8

-15.3-27.3

12.21.4

-1.6

606.0

719.8

144.4142.9

1.5

18.1-44.2

73.399.659.0

228.0196.310.519.51.6

141.6

381.1233.8197.534.8

1.6-39.6

69.513.648.3

8.5- . 8

789.3

145.0146.6-1.6

602.4

- .91.9

72.565.534.7

334.3278.0

19.433.53.5

94.4

395.3193.9147.343.4

3.113.3

67.410.946.8

9.1.7

814.8

868.6

184.7183.1

1.6

683.9

34.3-2 .298.499.157.3

242.1193.510.936.1

1.7155.0

391.5292.4260.3

29.13.0

.0

45.5-8.751.25.6

-2 .6

914.1

570.0

86.085.6

.4

484.0

18.1-107.2

59.875.335.2

246.4219.2

11.313.72.2

156.4

414.0171.4133.534.4

3.5-101.3

88.323.755.2

8.21.3

658.4

591.3

59.354.15.1

532.0

14.1-12.6

82.078.561.0

191.5159.0

13.318.21.1

117.5

332.5211.4175.337.1-1.0

-11.9

76.9-3.972.711.9

-3.9

668.2

883.3

239.9242.2-2.3

643.4

30.3-18.9

60.941.232.9

374.6330.1

13.828.4

2.4122.4

470.2176.8130.546.3

.1-3.6

49.1-8.547.9

8.71.1

932.4

734.3

62.460.2

2.2

671.9

11.037.771.574.926.8

359.1290.0

19.444.3

5.390.9

434.0193.5149.237.27.2

44.4

36.69.5

11.115.1

.7

770.9

725.0

161.3164.4-3.1

563.7

-16.1-76.2

67.8118.679.4

292.3256.3

15.716.83.5

98.0

375.7249.5214.5

36.2-1.2

-61.6

106.038.659.74.73.1

831.0

Financial sectors

291.3

165.380.684.7

.0

126.0-6.2119.2

-13.022.4

3.6

13.411.3

.2

.280.684.782.4

2.0

3.412.02.9

467.7

287.5176.9115.4-4.8

180.241.6

118.4-12.3

22.69.8

20.112.8

.2

.3172.1115.469.550.2

-11.513.7

.524.2

446.6

204.1105.998.2

.0

242.542.6

185.75.53.45.3

22.52.6- .1- .1

105.998.2

133.251.6

.45.4

-5.032.0

531.0

231.190.4

140.7.0

299.992.7

153.221.127.25.8

11.626.0

.11.1

90.4140.7129.348.017.16.6

-2.062.1

440.0

196.5127.269.3

.0

243.533.9

182.320.7

1.35.2

39.0-7 .2

- . 1.1

127.269.3

113.352.014.85.2- .1

26.4

507.0

227.7101.5126.2

.0

279.343.7

217.67.94.95.2

38.95.1

.1- . 1

101.5126.2164.8

19.84.05.22.1

39.4

572.0

305.5132.1173.4

.0

266.555.1

175.6- 1 . 832.05.6

- 9 . 731.5

.0- . 4

132.1173.4187.554.3

- 1 0 . 06.07.7- . 4

328.6

137.831.4

106.5.0

190.817.8

148.124.9

- 5 . 55.5

- 3 2 . 511.0- . 12.5

31.4106.5137.147.120.05.9

- 3 1 . 831.6

687.2

296.0126.9169.1

.0

391.2105.7207.5

23.648.6

5.8

40.142.1— .2

.3126.9169.1133.968.416.06.5

13.270.9

503.1

240.480.0

160.4.0

262.685.2

118.119.633.9

5.8

15.726.4

.3- . 4

80.0160.499.756.916.66.75.7

35.0

647.0

116.5119.8- 3 . 3

530.6

-29.065.289.927.3- . 4

311.3235.7

28.644.3

2.766.2

301.1155.595.254.0

6.373.9

77.83.8

68.47.8

-2.2

724.9

605.0

250.0123.3126.8

.0

354.9162.0138.9

16.431.86.0

23.324.6

.32.0

123.3126.8146.6

19.515.87.14.8

110.9



1.57 FUNDS RAISED IN US. CREDIT MARKETS1—Continued

Transaction category or sector

Q2 Q3 Q4 Ql Q2 Q3 Q4

52 Total net borrowing, all sectors

53 Open market paper54 U.S. government securities55 Municipal securities56 Corporate and foreign bonds. . . .57 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. residents .65 Financial corporations66 Mutual funds

808.2

13.1459.8

30.5167.1-9 .3

8.9133.0

5.0

991.2

-5.1All A

74.8277.3-8 .6

8.7161.361.5

1,073.7

35.7448.1-29.3153.962.370.7

205.9126.3

1,235.9

74.3348.5

-44.2307.3113.561.6

233.3141.6

1,345.8

102.6376.1

1.9272.595.662.6

340.194.4

1,354.1

59.5381.1-2.2332.0125.456.0

247.3155.0

1,165.4

85.5313.7

-107.2332.591.441.3

251.6156.4

1,240.2

65.3364.8

-12.6330.388.689.1

197.1117.5

1,261.0

39.6377.7

-18.9256.974.728.6

380.2122.4

1,458.1

126.3358.4

37.7290.2113.676.1

364.890.9

1,334.1

107.6401.7

-76.2245.6142.8116.5298.1

98.0

1,329.9

136.8366.565.2

297.251.429.2

317.366.2

312.5

103.427.032.444.0

209.1

453.6

129.921.363.445.2

323.7

152.2

23.3-44.9

48.120.1

128.9

Funds raised through mutual

154.9

-19.0-74.2

50.74.5

173.9

253.6

-21.6-82.6

57.83.3

275.2

147.2

-17.9-71.3

40.812.6

165.0

funds and

196.3

-5 .7-92.8

88.2-1.1202.0

corporate equities

226.1

-18.4-72.8

57.4-3.1244.5

289.1

1.4-92.4

89.84.0

287.6

402.8

51.6-27.2

69.79.1

351.2

85.0

-108.1-138.8

32.1-1.4193.1

237.6

-31.2-72.0

39.51.3

268.7

1. Data in this table also appear in the Board's Z.I (780) quarterly statistical release, tablesF.2 through F.5. For ordering address, see inside front cover.


Flow of Funds A39

1.58 SUMMARY OF FINANCIAL TRANSACTIONSl

Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates

Transaction category or sector 1992 1993 1994 1996

Q2 Q3 Q4 Ql Q2 Q3

NET LENDING IN CREDIT MARKETS

1 Total net lending in credit markets

2 Domestic nonfederal nonfinancial sectors3 Households4 Nonfarm noncorporate business5 Nonfinancial corporate business6 State 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 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 funds . . .23 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 trusts . . . .53 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 . . .

808.2

112.082.627.8- .11.7

-11.998.4

609.727.995.369.516.55.63.7

-79.017.78.0

78.56.7

41.15.94.7

126.218.268.8

115.653.77.5

.11.1

- 1 . 313.0

808.2

-1.6-2.0

.2-3.549.4

113.5-57.2-73.2

4.543.1

103.4209.146.6

4.628.0

241.99.7

-7.116.7

260.1

1,794.2

- . 2-2.8-4.9

4.411.9

-40.6

.71.6

11.3

1,812.9

991.2

83.342.79.1

-1.132.6

-18.4129.3797.0

36.2142.2149.6-9.8

.02.4

-23.321.79.5

100.927.745.921.120.4

159.514.488.684.779.9-9.0

.0

.614.8

-38.7

991.2

.0

.4-18.5

50.5117.3

-70.3-23.5

20.271.2

129.9323.752.461.436.0

250.55.2

.919.7

348.6

2,367.6

- . 2- 7 . 0

4.240.211.1

-149.9

-1.5-1.3-4.0

2,476.0

1,073.7

254.1259.449.6

.2-55.0-24.2132.3711.5

31.5163.4148.1

11.2.9

3.36.7

28.17.1

66.424.946.830.730.0

-7.1-3.3120.6115.462.868.2

-24.04.7

-44.2-17.2

1,073.7

-5.8.0.7

54.089.8

-9.7-40.0

19.643.378.323.3

128.9114.0

- .134.5

251.83.2

17.825.9

266.3

2,169.6

- .244.9-2.759.48.6

-107.7

-4.8-2.8-3.1

2,178.1

1,235.9

-97.0-13.9

-6.0.3

-77.4-21.5272.7

1,081.712.7

265.9186.575.4- . 34.2

-7.516.2

-18.899.121.561.322.786.552.513.387.998.2

113.064.2-3.4

1.890.1

4.6

1,235.9

2.2.6

33.59.8

-12.896.565.6

142.3110.7

-19.0173.996.326.744.9

240.31.3

-49.741.3

504.6

2,753.7

- . 527.2

-3.155.48.7

-4.7

-6.0-3.8

-23.3

2,703.8

1,345.8

.528.325.5

.4-53.7-23.3404.8963.7

12.3187.9119.763.33.91.0

23.322.1

-13.655.224.462.934.288.857.99.3

89.2140.7104.438.714.72.0

-17.326.5

1,345.8

-6 .3- . 5

.047.7

-53.819.291.6

113.5145.837.6

-21.6275.276.346.435.0

252.12.6

-25.035.8

480.2

2,897.5

-1 .038.1

-3.514.23.0

-86.6

.5-4 .0-7.9

2,944.8

1,354.1

-149.2-128.3

37.7.3

-58.8-24.2322.2

1,205.216.7

319.4222.486.65.35.2

-11.722.8

-20.6135.520.957.2

4.9134.423.415.193.069.3

101.067.229.9

1.8145.2

-20.2

1,354.1

10.3.0.7

110.8-4.9100.295.674.4

221.1115.4

-17.9165.080.625.957.6

290.4.8

-47.639.9

421.3

3,093.8

- . 4101.5

- . 9-2 .430.818.4

-18.6-3.829.9

2,939.2

1,165.4

-70.6110.7

-53.1.3

-128.5-24.3361.0899.3- 4 . 1

244.8227.025.6

-9.61.8

32.211.0

-23.772.921.950.5

2.630.058.016.750.0

126.2154.450.87.31.8

-5.21.1

1,165.4

9.08.6

.8-29.5-13.1

-113.1145.680.2

122.992.8-5.7202.0129.332.133.1

211.23.4

-65.845.3

430.4

2,484.8

- . 3-55.7

12.373.210.3

-30.8

3.8-3.2

-46.7

2,521.9

1,240.2

-187.3-136.9

33.0.3

-83.7-24.4157.6

1,294.219.7

166.2118.136.14.67.4

-68.419.5

-20.253.222.378.520.2

125.1141.913.2

186.5173.4141.453.7

-36.41.9

189.313.2

1,240.2

-1 .9.0.0

18.280.3

-69.3114.9

- . 9151.162.3

-18.4244.590.150.138.3

187.8-10.2-39.2

38.4842.6

3,018.9

-1.021.5

-23.631.1

2.2244.1

-13.8-4.7

-125.5

2,888.6

1,261.0

-64.5-65.2

-2.1.4

2.4-20.7341.1

1,005.116.9

121.780.544.2-5.1

2.134.122.1

-18.148.723.682.658.7

175.067.510.933.4

106.5117.340.947.9

1.9-109.0

122.4

1,261.0

- . 9.0.0

85.0-88.5

43.3212.555.1

244.0-19.1

1.4287.662.7

120.619.0

256.15.6

-49.237.9

584.3

3,118.6

-1.161.410.921.7

-23.2-185.5

45.4

3,184.1

1,458.1

308.1270.757.8

.4-20.8-15.2268.2896.9

9.4190.2125.557.55.41.7

45.034.8

-12.32.4

23.794.050.018.463.79.8

121.8169.1123.841.3

-17.31.7

-72.0- .7

1,458.1

1.6.0.0.9

-51.54.5

-4.683.54.1

117.751.6

351.2126.8

-37.732.2

236.36.6

-22.124.1

268.7

2,651.7

-1.023.6

-26.9112.524.9

-243.6

-10.5-4.229.5

2,747.5

1,334.1

-175.7-55.4

11.6.4

-132.4-26.4484.4

1,051.919.3

202.0123.672.94.8

.749.114.2

-12.5135.124.946.822.088.535.69.0

81.9160.473.055.916.62.4

35.5-7.8

1,334.1

-26.6-1.8

2.3113.2

-118.6110.976.7

181.0147.4

-29.8-108.1

193.155.6-4.356.8

269.8-1.2

-15.352.5

487.3

2,774.9

1.3122.5-9.2

-100.89.9

-59.0

28.0-4.0

-64.1

2,850.3

1. Data in this table also appear in the Board's Z.I (780) quarterly statistical release, tablesF.6 and F.7. For ordering address, see inside front cover.

2. Excludes corporate equities and mutual fund shares.



1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1


Transaction category or sector 1993 1994

Q2 Q3 Q4 Ql Q2 Q3 Q4

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 Home mortgages13 Multifamily residential14 Commercial15 Farm16 Consumer credit

By borrowing sector17 Households18 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 enterprises 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 (RElTs)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

12,544.7

3,336.53,309.9

26.6

117.81,377.51,229.7

675.9677.1

4.266.33,233.8

267.9683.4

81.2863.9

4.288.03,761.92,496.51,127.1

138.31,158.2

385.6

68.7230.1

24.662.1

12,930.2

3,321.7

1.885.2523.7

1.356.84.8

1,436.4393.5857.667.6

108.98.9

84.6123.499.6

528.51,356.8

486.733.7

390.530.217.4

169.9

16,251.9

580.05.216.91,377.52.317.4

768.0852.9

4,275.2863.9

13,172.2

3,492.33,465.6

26.7

9,679.9

139.21,348.21,253.0

749.0737.8

4,462.33,437.8

269.5672.1

83.0990.2

4.660.13,901.32,621.21.139.0

141.21,118.4

370.4

41.4242.3

26.160.6

13,542.6

13,892.0

3,636.73,608.5

28.2

157.41,304.01,326.3

848.6796.8

4,690.33,634.1

280.1691.6

84.61.131.9

5,041.24,135.22,818.71.173.8

142.71,078.8

439.9

55.0290.6

34.659.7

14,331.8

14,639.4

3.781.83,755.1

26.6

10,857.6

156.41,306.01.398.8

914.0831.5

5,024.63,912.1

299.4725.0

88.11.226.3

5,436.54,329.02,966.01,217.2

145.81,092.1

507.2

65.8337.343.760.4

15,146.6

13,557.6

3,583.53,556.7

26.8

9.974.1

162.91,331.71.290.9

810.7776.9

4,570.23,528.9

273.9683.6

83.81.030.8

4.811.24,058.02,759.31,155.9

142.81.104.9

396.8

48.1258.629.660.5

13,708.3

3,603.43,576.5

26.9

10,104.8

163.31,308.21,305.8

824.3782.1

4,643.03.594.9

276.7687.0

84.41,078.2

4,933.04,089.12,780.21,164.0

144.81,082.7

419.8

55.8272.4

31.660.0

13,954.4 14,128.1 14,331.8

13,892.0

3,636.73,608.5

28.2

10,255.2

157.41,304.01,326.3

848.6796.8

4,690.33,634.1

280.1691.6

84.61,131.9

5,041.24.135.22,818.71,173.8

142.71,078.8

439.9

55.0290.6

34.659.7

14,089.7

3,717.23,689.6

27.6

10,372.5

174.21,300.81,341.5

856.7809.3

4,767.13,699.7

283.5698.7

85.21,123.0

5,102.94,190.22,864.71,185.2

140.31,079.4

450.8

51.5302.536.860.0

14,540.5

14,247.2

3,693.83.665.5

28.2

10,553.4

181.71,306.81,359.4

878.7815.7

4,863.13,778.5

288.4709.8

86.51,147.9

5,219.34,247.02,907.01,194.7

145.31,087.1

459.6

53.4305.340.560.4

14,706.8

14,437.5

3,733.13,705.7

27.4

10,704.4

173.01,290.61,376.4

902.6831.8

4,947.43,853.7

292.3713.9

87.41,182.6

5,333.24,296.82.947.41,203.1

146.21.074.5

487.1

64.8320.241.760.4

14,924.6

Financial sectors

3,794.6

2,172.7700.6

1,472.1.0

1,621.9442.8973.555.3

131.618.7

94.5133.6112.4

.5

.6700.6

1,472.1556.2

34.3440.7

18.731.1

199.3

4,243.9

2,376.8806.5

1,570.3.0

1,867.0488.0

1,159.260.8

135.024.0

102.6148.0115.0

.4

.5806.5

1,570.3689.4

29.3492.3

19.136.5

233.9

4,774.8

2,607.9896.9

1,711.0.0

2.166.9580.7

1.312.481.8

162.229.8

112.2150.0141.1

.41.6

896.91,711.0

818.827.3

540.336.243.1

296.0

3,971.9

2.247.1748.1

1.499.0.0

1.724.8462.8

1,056.458.4

125.721.3

99.9142.9105.9

.3

.6748.1

1,499.0596.8

26.8467.2

20.633.7

230.0

4,096.3

2,300.1773.5

1,526.6.0

1,796.2473.6

1,112.660.3

127.022.6

102.0150.3107.2

.4

.6773.5

1,526.6639.8

27.4471.9

21.635.0

239.9

4,243.9

2,376.8806.5

1,570.3.0

1,867.0488.0

1,159.260.8

135.024.0

102.6148.0115.0

.4

.5806.5

1,570.3689.4

29.3492.3

19.136.5

233.9

4,324.3

2,414.1814.4

1,599.7.0

1,910.2491.9

1,192.966.4

133.625.4

100.5141.4117.8

.41.1

814.41,599.7

720.321.4

499.824.138.0

245.6

4,496.1

2,489.5846.1

1,643.4.0

2,006.6518.5

1,243.472.2

145.826.9

103.6148.4128.3

.31.2

846.11,643.4

752.424.6

514.428.139.6

265.6

4,619.5

2,545.3866.1

1,679.2.0

2,074.2539.6

1,275.176.9

154.228.3

106.7149.1134.9

.41.1

866.11,679.2

779.526.1

528.432.341.3

274.5

17,337.2

623.55,665.01,348.22,468.8

830.4929.9

4,481.1990.2

18,575.7

700.46,013.61,304.02,776.1

943.9991.5

4,714.31.131.9

19,921.5

803.06,389.71,306.03,048.61,039.51,054.15.054.41.226.3

17,926.3

673.85,830.61,331.72,605.9

898.7963.2

4,591.61,030.8

18,224.4

692.75,903.51.308.22,690.8

916.2969.1

4,665.71,078.2

18,575.7

700.46,013.61,304.02,776.1

943.9991.5

4,714.31,131.9

18,864.8

717.66,131.31,300.82,837.0

959.91,002.94,792.51,123.0

19,202.9

753.66,183.21,306.82.908.1

991.41,021.84.890.01,147.9

19,544.1

777.46.278.41.290.62,971.71.021.31,046.54,975.71,182.6

14,639.4

3,781.83,755.1

26.6

10,857.6

156.41.306.01,398.8

914.0831.5

5,024.63,912.1

299.4725.0

88.11,226.3

5,436.54,329.02,966.01,217.2

145.81,092.1

507.2

65.8337.343.760.4

15,146.6

4,774.8

2,607.9896.9

1,711.0.0

2,166.9580.7

1,312.481.8

162.229.8

112.2150.0141.1

41.6

896.91,711.0

818.827.3

540.336.243.1

296.0

19,921.5

803.06,389.71,306.03,048.61.039.51,054.15,054.41,226.3

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.


Flow of Funds A41

1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1

Billions of dollars except as noted, end of period

Transaction category or sector 1993

Q2 Q3 Q4 Ql Q2 Q3

CREDIT MARKET DEBT OUTSTANDING2

1 Total credit market assets

2 Domestic nonfederal nonfinancial sectors3 Households4 Nonfinancial corporate business5 Nonfarm noncorporate business6 State 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 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

16,251.9

2,784.91,691.4

271.537.0

784.9231.7

1,147.812,087.5

336.73,090.82,721.5

326.017.525.8

914.1218.7240.9

1,420.6422.7617.6423.4429.0725.9

82.0546.4

1,356.8457.9482.8

60.48.6

137.5114.6

16,251.9

53.48.0

17.0271.8189.3

1,251.72,223.2

391.7559.6471.1

1,375.4279.0470.8

4,638.81.048.2

84.9691.3

5,155.1

35,432.1

20.16,280.02,495.5

-5.1232.6-4.7-7.726.8

-855.0

5.640.7

-248.0

45,042.5

17,337.2

3,069.31,981.1

321.137.2

729.9207.5

1,254.712.805.6

368.23,254.32.869.6

337.118.429.2

920.8246.8248.0

1,487.1446.4664.3454.1459.0718.8

78.7667.0

1,472.1520.7551.0

36.513.393.3

105.2

17,337.2

53.28.0

17.6324.6280.1

1,242.02,183.3

411.2602.9549.4

1,477.3279.0505.3

4.846.81,162.2

88.0699.4

5,417.3

37,485.1

21.16,263.32,587.5

-5.4278.7-6.551.835.4

-916.1

3.438.0

-252.0

47,129.6

18,575.7

2,937.11,932.0

315.137.5

652.5186.1

1,561.813,890.7

380.83,520.13,056.1

412.618.033.4

913.3263.0229.2

1,586.2468.7725.6476.8545.5771.392.0

755.01,570.3

633.7615.2

33.015.1

183.4112.4

18,575.7

63.710.218.2

361.4290.6

1,229.32,279.7

476.9745.3660.1

1,852.8305.7550.2

5,567.71.258.5

89.3767.4

5,823.2

40,925.7

22.18,389.92,699.6

-5.8309.0-9.0107.244.1

-949.4

3.134.2

-275.4

52,779.3

19,921.5

2,938.01,960.7

340.637.9

598.8162.8

1,966.614,854.0

393.13,708.03,175.9

475.822.034.4

936.6285.1215.6

1,641.4492.8788.5511.0634.3829.2101.3844.1

1.711.0738.1653.9

47.817.2

166.1138.9

19,921.5

53.79.7

18.2409.1238.4

1,248.42,371.3

590.3891.1697.7

2,348.8352.1585.2

6,318.51,334.8

91.9833.7

6,146.7

44,461.1

21.410,090.02,733.6

347.1-10.9121.445.1

-1,202.4

-1.630.1

-283.3

58,267.3

17,926.3

2,988.31,940.8

303.537.3

706.7198.2

1,402.113,337.7

375.73.410.12,963.7

396.019.331.1

922.4255.0240.2

1,557.1457.3693.4470.9508.0724.8

84.6695.9

1,499.0555.2586.9

40.314.2

137.4109.3

17,926.3

67.18.0

18.0361.0265.8

1,246.22,222.6

456.3678.5629.3

1,661.0277.8532.4

5,224.11,177.5

88.9739.7

5,555.1

39,135.6

22.97,348.42.641.1

-5.5314.5-2.978.835.6

-869.7

2.035.7

-306.2

49,865.7

18,224.4

2,990.21,989.3

290.637.4

672.9192.2

1,493.413,548.6

370.63,473.23,023.7

401.116.931.5

930.4258.5234.2

1,575.5463.0706.0470.6505.7739.2

88.7708.4

1,526.6595.7594.7

42.214.7

136.1114.6

18,224.4

65.110.218.2

353.6267.2

1,200.32,255.8

477.5702.7654.8

1,782.0286.1540.6

5,440.11,211.1

91.9758.6

5,666.4

40,006.7

22.17,972.42,655.0

-5.6300.6

.1111.439.1

-832.3

.627.3

-330.0

51,345.1

18,575.7

2,937.11.932.0

315.137.5

652.5186.1

1,561.813,890.7

380.83,520.13.056.1

412.618.033.4

913.3263.0229.2

1,586.2468.7725.6476.8545.5771.3

92.0755.0

1.570.3633.7615.2

33.015.1

183.4112.4

18,575.7

63.710.218.2

361.4290.6

1,229.32,279.7

476.9745.3660.1

1,852.8305.7550.2

5,567.71,258.5

89.3767.4

5,823.2

40,925.7

22.18,389.92.699.6

-5.8309.0-9.0107.244.1

-949.4

3.134.2

-275.4

52,779.3

18,864.8

2,895.71,915.1

291.337.6

651.8180.8

1,653.614,134.7

379.63.541.63,068.8

422.216.833.9

921.8267.0224.7

1,600.5474.5746.3491.1595.6792.494.8

762.71,599.7

659.7621.7

45.015.6

156.2144.4

18,864.8

62.110.218.2

382.7266.3

1.183.32,342.3

493.6816.9666.2

1,994.3326.9555.0

5,751.61,246.0

94.3781.6

5,959.8

41,816.0

22.18,875.82,736.6

-6 .1324.4-2 .6116.723.9

-1,016.8

.029.6

-326.5

54,308.0

19,202.9

2,945.41,950.6

307.937.7

649.1177.0

1,718.214,362.2

386.33,590.83,101.3

437.118.134.3

933.1276.9221.6

1,601.0480.2769.8504.0594.7807.997.2

793.81,643.4

689.2633.2

40.716.1

138.2144.1

19,202.9

61.410.218.2

382.9250.1

1,212.32,340.1

511.1809.5692.1

2,130.6318.6563.0

5,899.91,278.6

90.3790.9

5,966.7

42,529.6

22.09,170.92,759.1

-6.3330.3-8.0135.738.0

-1,094.0

-3.431.8

-336.2

55,393.8

19,544.1

2,923.21,957.9

313.137.8

614.4170.5

1,840.614,609.8

386.23,643.33,135.3

454.219.334.5

945.3281.0218.5

1,635.1486.4781.5508.8606.6816.599.5

814.31,679.2

709.7642.0

44.916.6

147.1147.4

19,544.1

54.39.7

18.8411.2223.3

1,221.82,355.5

557.2838.1687.6

2,212.7317.8577.2

6,046.11,293.9

92.1799.5

6,089.6

43,350.3

21.29,387.42,782.8

-6.0360.9

-11.6126.741.9

-1,100.7

-1.723.1

-363.3

56,472.4

1. Data in this table also appear in the Board's Z.I (780) quarterly statistical release, tablesL.6 and L.7. For ordering address, see inside front cover.

2. Excludes corporate equities and mutual fund shares.


A42 Domestic Nonfinancial Statistics U June 1997

2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures

Monthly data seasonally adjusted, and indexes 1992=100, except as noted

Measure

1 Industrial production'

Market groupings2 Products, total3 Final total4 Consumer goods5 Equipment6 Intermediate7 Materials

Industry groupings8 Manufacturing

9 Capacity utilization, manufacturing (percent)2. .

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)

1994

108 6

106.8107.1107.4106.6106.11113

109.4

83.1

117.3

112.096.996.497.5

116.8148.4142.6124.9149.3144.8

148.2125.5

1995

112 1

109.3109.9108.9111.6107.5116 6

113.2

83.1

121.7

115.098.197.298.7

120.3157.7150.9130.4158.2152.3

152.4127.9

1996

115 2

112.0112.8110.5116.8109.4120 3

116.3

82.1

130.1

117.398.396.297.5

123.3166.4159.7135.3166.2159.7

156.9131.3

July

115 5

112.3113.4110.7118.1108.9120 5

117.0

82.4

135.0

117.598.396.297.4

123.6166.7159.8135.8166.5159.6

157.0131.5

Aug.

115 8

112.2113.0110.1117.9110.0121 5

117.2

82.3

138.0

117.898.596.397.5

123.9167.7161.1136.9167.4159.6

157.3131.9

1996

Sept.

116 0

112.7113.3110.5118.1110.6P I 2

117.4

82.1

133.0

117.898.396.097.2

124.0168.6162.2136.7168.2160.7

157.8131.8

Oct.

116 2

112.8113.6110.8118.4110.2121 7

117.6

82.0

126.0

118.098.496.197.3

124.3168.8162.0136.7168.4161.8

158.3132.7

Nov.

117 2

114.1114.8112.3119.0111.9122 2

118.5

82.4

131.0

118.298.696.197.4

124.4169.8163.4137.4169.5161.7

158.6132.6

Dec.

117 7

114.3115.3112.7119.6111.3123 1

119.2

82.5

127.0

118.498.796.297.4

124.7171.0165.1139.2170.6162.5

158.6132.7

Jan.

117 8

114.3115.2112.0120.8111.7123 3

119.3

82.3

126.0

118.798.996.397.6

125.0171.6165.1138.6171.8165.3

159.1132.6

1997

Feb.

118 5

114.9115.8111.8122.5112.1124 4

120.4

82.8

127.0

119.099.496.397.6

125.2173.1167.3139.1173.2167.8

159.6132.2

Mar.

119 6

115.9117.0112.6124.4112.8125 4

121.4

83.3

127.0

119.199.396.497.6

125.5n.a.n.a.n.a.n.a.

168.1

160.0132.2

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 January 1997. See"Industrial Production and Capacity Utilization: Historical Revision and Recent Develop-ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. The article contains adescription of the new aggregation system for industrial production and capacity utilization.For a detailed description of the industrial production index, see "'Industrial Production: 1989Developments and Historical Revision," Federal Resen>e 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 price

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

Category

HOUSEHOLD SURVEY DATA1

1 Civilian labor force2

Employment2 Nonagricultural industries3

3 AgricultureUnemployment

4 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

1994

131,056

119,6513,409

7,9966.1

114,172

18,321601

4,9865,993

26,6706,896

31,57919,128

1995

132.304

121,4603,440

7,4045.6

117,203

18,468580

5,1586,165

27,5856,830

33,10719.310

1996

133,943

123,2643,443

7,2365.4

119,549

18,282570

5,4056,318

28,1786,977

34,36019,459

Aug.

133,898

123,5703,418

6.9105.2

120,052

18,291570

5,4376,342

28,2756,999

34,53219.606

Sept.

134,291

123.7683.480

7,0435.2

120,050

18,241567

5,4496,337

28,3217,009

34,60719.519

1996

Oct.

134,636

124,1673,450

7,0195.2

120,311

18,254566

5,4646,338

28,4467,026

34,70919,508

Nov.

134,831

124,2903,354

7,1875.3

120,492

18,262566

5,4916,350

28,5087,038

34,78019,497

Dec.

135,022

124,4293,426

7.1675.3

120,723

18,270566

5,5206,340

28,5867.052

34,86519.524

Jan.

135,848

125,1123,468

7.2685.4

120,982

18,296568

5,5356,378

28,5847,062

35,01519,544

1997r

Feb.

135,634

125,1383,292

7,2055.3

121,275

18,299571

5,6436.404

28,6177,072

35,08219,587

Mar.

136,319

125,7893,386

7,1445.2

121,450

18,315570

5,6166,415

28,6797.094

35,19319,568

1. Beginning January 1994, reflects redesign of current population survey and populationcontrols 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, seasonality does not exist inpopulation figures.

3. Includes self-employed, unpaid family, and domestic service workers.

4. Includes all full- and part-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

Series

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

1 Total industry

2 Manufacturing

3 Primary processing"4 Advanced processing4

5 Durable goods6 Lumber and products7 Primary metals8 Iron and steel9 Nonferrous

10 Industrial machinery andequipment

11 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

1973

High

Q2

1996

Q3 Q4 r

1997

Ql

Output (1992=100)

114.8

115.8

111.7117.8

125.4111.0116.5115*8117.2154.6162.3130.4

83.8

105.5106.5107.9107.3122.1106.0

103.5114.0114.0

1975

Low

115.8

117.2

113.2119.1

127.2110.5118.6117.9119.4158.9164.5131.3

86.7

106.5107.9109.0109.2125.3106.7

103.7110.5110.8

Previou

High

117.0

118.4

113.9120.7

128.1no. i119.8118.6121.1161.5167.2126.0

90.4

108.1107.4109.8II 2.4125.3107.7

103.8113.0112.4

s cycle5

Low

118.7

120.3

114.5123.2

131.3110.5] 19.4119.4119.4167.1172.9133.3

93.3

108.7106.9110.8113.3

108.5

105.5111.3111.4

1996

Q2 Q3 Q4

Capacity (percent of 1992 o

137.9

141.0

129.9146.5

152 21282128.7130.3126.5171.6193.2174.9

120.6

1 29.0129.4122.4137.9129.5113.5

113.7124.5122.8

Latest cycle6

High Low

139.2

142.5

130.7148.2

154.5129.1129.8131.9127.1176.3200.6176.1

120.2

129.6130.1122.9139.2131.8113.7

113.7125.2123.6

1996

Mar.

140,5

143.9

131.5150.0

156.9130.0131.0133.5127.8181.3208.5177.3

119.8

130.1130,8123.3140.3134.0113.8

113.7125.9124.4

1997

Ql

ltput)

141.8

145.3

132.2151.9

159.2131.0132.1134.9128.6186.5216.4178.2

119.6

130.6131.3123.6141.5

113^9

113.7126.5125.1

Q2

Capat

83.3

82.1

86.080.4

82.486.690.588.892.790.184.074.6

69.5

81.882.388.277.894.393.4

91.091.692.8

1996

Oct. Nov. Dec/

1996

Q3 Q4 r

1997

Ql

ity utilization rate (percent)2

83.2

82.3

86.68(1.4

82.385.691.489.493.990.182.074.5

72.2

82.282.98S.778.495.193.9

91.288.289.6

83.3

82.3

86.680.4

81.784.791.588.994.889.180.271.0

75.5

83.082.189.080.193.594.6

91.389.890.4

83.7

82.8

86.781.1

82.484.490.488.592.889.679.974.8

78.0

83.381.589.780.1

95.3

92.888.089.1

1997

Jan.r Feb. Mar.p

Capacity utilization rate (percent)2

89.2

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

85.3

85.7

88.984.2

84.593.692.795.289.3

85.484.089.1

87.3

87.390.493.586.297.088.5

86.892.695.0

78.1

76.6

77.876.1

73.27S.s73.771.874.2

72.475.155.9 .

79.2

80.777.785.079,374.885.1

86.183.487.1

82.6

81.3

85.679.4

80.986.090.488.093.3

90.585.161.3

68.5

81.983.086.677.792.993.1

90.397 293.2

83.0

82.0

86.779.9

81.584.293.592.694.7

89.180.568.5

74.6

82.782.487.479.594.095.3

91.089.090.2

83.4

82.4

86.580.5

81.987.090.586.895.1

89.280.272.7

75.4

82.9.82.789.379.692.494.4

91.191.090.6

83.5

82.5

86.680.8

81.782.990.487.194.7

89.080.071.9

76.4

83.581.190.481.094.094.2

91.989.390.3

83.4

82.3

86.180.7

81.783.389.087.191.6

89.179.074.1

77.1

83.181.289.380.693.594.4

91.689.990.7

83.6

82.8

86.781.1

82.584.790.288.292.7

89.680.174.6

78.0

83.280.990.080.0

95.6

92.986.788.0

84.1

83.3

87.281.6

83.185.391.990.194.1

90.180.775.7

79.0

83.482.289.779.7

96.0

93.787.388.6

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 January 1997. See"Industrial Production and Capacity Utilization: Historical Revision and Recent Develop-ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. The article contains adescription of the new aggregation system for industrial production and capacity utilization.For a detailed description of the industrial production index, 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.


A44 Domestic Nonfinancial Statistics • June 1997

2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1

Monthly data seasonally adjusted

Group

1992pro-por-tion

1996avg.

Apr. July Aug. Sept. Dec/ Jan.r Feb. Mar.

Index (1992 = 100)

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 Auto parts and allied goods . . . .11 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 trucks55 Consumer goods excluding energy56 Business equipment excluding autos and

trucks57 Business equipment excluding computer and

office equipment58 Materials excluding energy

100.0

60.546.329.1

6.12.61.7.9.7.9

3.5

1.0.8

1.623.010.32.44.52.92.9

.82.1

17.213.25.41.14.02.51.21.33.3

.6

.2

14.25.38.9

39.520.84.07.69.23.18.91.11.83.92.19.76.33.3

97.195.1

98.227.426.2

12.129.8

115.2

112.0112.8110.5126.2125.8132.6120.2147.2114.5126.3

173.0109.9107.9106.5106.195.5

112.7101.1112.0106.6114.3

116.8126.6143.2292.0126.9100.0115.3116.477.0

120.5162.0

109.4116.8105.1

120.3134.0128.8159.2118.2113.1106.4106.3107.4105.9106.1103.9102.6106.2

114.9114.6

112.9109.2110.2

115.8125.4

113.2

110.4111.1109.4120.8115.1111.293.5

135.4117.7124.7

165.8110.8108.0106.6106.895.8

110.599.7

114.1106.9117.1

113.9122.6139.8265.4127.187.495.2

114.777.6

119.8162.5

108.4115.5104.3

117.7129.5117.0154.6116.8112.0104.4104.6104.4103.5105.4104.5103.9105.7

113.4113.5

111.2109.2108.8

125.3

113.1121.7

114.3

111.0112.1109.8125.7126.0135.0126.1150.3111.9125.3

170.2109.1108.0105.9105.796.1

110.0100.0112.8106.4115.5

115.9125.1140.5272.2127.597.5

118.5114.777.4

123.7164.8

107.7114.2103.9

119.5132.6130.1155.7117.2112.1105.5105.6106.9104.1106.5104.2104.0104.6

113.9113.5

112.2108.4109.4

125.8

115.3124.2

114.8

111.4112.2110.0126.9126.9135.0129.0147.3114.0126.7

172.0112.4108.1105.8105.395.9

110.5100.7112.8106.8115.4

116.0125.0140.8279.7126.597.5

118.0115.377.9

127.0165.7

108.9116.1104.6

120.1133.5130.6157.2117.8112.2105.9106.1106.4104.7107.1104.6103.5106.7

114.4114.0

112.6108.7109.6

125.7

114.7124.9

115.5

112.3113.1110.8129.9130.0137.7133.3148.7117.4129.7

180.1114.6108.7106.0105.895.6

110.6100.2113.2106.7116.0

117.1126.6143.9289.4126.3100.6120.8114.377.0

127.8167.9

109.7118.3104.6

120.5134.0130.4158.9117.9112.6106.2106.3105.2105.3108.0104.8103.5107.2

115.0114.7

113.2109.3110.4

127.2

115.8125.4

115.5

112.3113.4110.7129.7132.1145.7137.8161.3112.4128.0

181.1107.0108.5106.0105.995.4

112.6101.4109.1106.7109.9

118.1128.1144.1301.7127.2104.1126.5118.077.7

122 A163.0

108.9117.5103.9

120.5134.5131.1159.6118.2112.9107.4109.9109.1106.1107.1102.4101.7103.9

114.9114.6

113.1108.9110.9

128.2

116.8126.1

115.8

112.2113.0110.1128.0128.7138.7132.5152.3113.5127.5

175.9111.1108.0105.6105.495.4

111.3101.8109.4107.7110.0

117.9127.7144.6306.2126.7103.0120.9116.177.9

122.6167.4

110.0119.2104.6

121.5136.2133.9161.7119.2113.6106.5107.4108.2106.2104.7104.0103.2105.4

115.4115.0

113.4108.6110.2

128.3

116.1127.0

116.0

112.7113.3110.5127.1127.7134.6129.9146.6116.2126.6

174.2110.5107.6106.3106.195.1

113.5101.9109.4105.4110.9

118.1128.3146.3314.3126.3103.8117.7115.577.7

117.5165.6

110.6119.8105.3

121.2135.5128.3162.6119.2114.7106.9107.1107.0106.8106.2103.9102.2107.0

115.7115.4

113.5109.2110.6

129.3

116.3126.6

116.2

112.8113.6110.8124.5122.0125.7112.3147.4114.4126.2

176.5108.6106.5107.3106.695.5

115.5102.9110.7108.1111.7

118.4128.8147.4318.8127.0101.9109.4118.777.0

120.2165.3

110.2117.7105.8

121.7135.8126.6163.4120.0117.2108.0108.4108.0109.3103.9103.9102.0107.5

116.1115.9

113.7109.9110.8

130.7

116.6127.1

117.2

114.1114.8112.3127.1127.4133.8123.5152.4116.4126.8

176.9110.7106.4108.5107.295.0

117.3102.9115.3107.8118.5

119.0129.8147.1323.5127.1106.6115.9119.976.1

120.7159.8

111.9120.7106.8

122.2136.5129.7165.3119.1114.4108.4108.5110.9107.7106.8104.0101.6108.5

116.9116.6

114.6111.0111.8

131.2

117.5127.8

117.7

114.3115.3112.7128.4127.2135.5115.9164.9114.0129.1

181.1109.3109.6108.7108.294.9

118.8103.0111.8106.0114.2

119.6130.7148.5327.1127.3107.2113.7121.476.2

123.6

111.3117.8107.4

123.1137.8130.3167.9119.9115.7109.5105.9112.5110.2106.3103.9102.6106.3

117.4117.2

115.1111.4112.8

132.4

118.2129.0

117.8

114.3115.2112.0127.5129.9138.7120.1167.0116.1125.7

171.6106.3109.2108.0107.894.3

118.1101.1111.3105.1113.9

120.8132.1149.5335.9127.9109.8117.2123.474.9

130.8156.3

111.7117.6108.2

123.3138.2131.7169.4119.2114.5109.3107.0111.5110.5105.3104.1101.9108.3

117.5117.1

115.1110.5112.0

133.6

119.1129.2

118.5

114.9115.8111.8129.4131.0139.2122.8165.0117.8128.2

179.0107.9109.7107.5108.093.7

117.5101.5107.8106.6108.0

122.5133.8152.5345.0128.0111.9119.1124.875.2

140.7163.5

112.1119.8107.5

124.4140.4133.8173.1120.4115.6109.8106.6113.5109.9107.5103.2101.4106.6

118.2117.8

115.8110.4112.4

135.2

120.4130.9

119.6

115.9117.0112.6131.3132.0141.2125.3166.6117.6130.7

185.1110.3110.4108.0108.693.8

117.3102.7108.7107.3109.0

124.4135.6154.3354.3129.2114.7122.2126.875.2

153.9

112.8120.6108.2

125.4142.4135.2177.0121.5117.8109.7108.1112.7109.6107.3103.2101.2107.0

119.2118.8

116.7111.1113.2

121.8132.2



2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued

Group SIC2

code

1992pro-por-tion

1996avg.

Apr. May July Sept. Jan.r Feb. Mar.p

Index (1992 = 100)

MAJOR INDUSTRIES

59 Total index

60 Manufacturing61 Primary processing62 Advanced processing

Durable goodsLumber and productsFurniture and fixturesStone, clay, and glass

productsPrimary metals

Iron and steelRaw steel

NonferrousFabricated metal products. .Industrial machinery and

equipmentComputer and office

equipmentElectrical machineryTransportation equipment. .

Motor vehicles and partsAutos and light trucks

Aerospace andmiscellaneoustransportationequipment

InstrumentsMiscellaneous

63646566

676869707172

7475767778

7980

81 Nondurable goods82 Foods83 Tobacco products84 Textile mill products85 Apparel products86 Paper and products87 Printing and publishing.. . .88 Chemicals and products . . .89 Petroleum products90 Rubber and plastic products91 Leather and products

92 Mining93 Metal94 Coal95 Oil and gas extraction96 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

103 Final104 Consumer goods . . . .105 Equipment106 Intermediate

2425

3233

331,2331PT

333-6,934

35

3573637371

371PT

372-6,93839

491,493PT492.493PT

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

116.3112.2118.4

125.7109.7108.9

111.0117.2116.4112.2118.0118.6

156.4

296.9163.3106.1126.9124.6

85.6102.8112.9

106.3106.3105.6106.698.2

108.098.4

108.9106.5120.580.0

102.9102.0105.9100.3118.7

112.8112.7113.2

115.7

113.7

113.9110.8115.4

121.8109.7105.8

108.7115.6113.8112.7117.6117.6

152.5

270.8160.394.9

106.8103.0

82.8102.9112.5

105.4106.2111.3107.098.1

105.897.6

106.6105.7119.381.2

102.8101.7105.9100.2117.9

114.4114.0115.8

114.3

111.6

114.3

115.2111.0117.3

124.6110.3108.1

108.5116.1114.6112 1117.9117.8

153.3

277.3161.1106.4130.3127.1

83.2102.3112.0

105.2105.9106.3105.399.0

107.596.9

106.9105.5118.081.1

102.999.4

105.3100.9116.3

113.5113.1115.0

114.3

112.8

114.8

115.7111.7117.6

125.2110.4110.3

109.8116.3115.7112.9116.9118.4

154.3

284.7161.8106.8130.5127.6

83.8102.4112.2

105.5105.6103.7106.199.0

107.897.9

107.2106.2119.880.7

103.2100.9108.0100.5117.4

114.6114.8113.6

114.8

113.2

115.5

116.4112.6118.3

126.3112.4109.5

111.3117.0117.1114.9116.8118.9

156.1

294.3164.0107.1130.4130.4

84.3103.3113.1

105.9106.1105.1108.099.0

108.597.1

107.9106.3120.981.0

104.4101.7108.9101.5120.6

114.0114.2113.6

115.6

113.8

115.5

117.0113.0118.9

126.9109.3108.1

114.1118.0118.0113.3117.9119.1

157.7

306.5163.8109.5134.1137.3

85.7102.3113.0

106.4106.5102.5108.798.3

110.297.6

109.0105.3120.780.0

103.1103.1102.7100.9120.6

109.4110.1107.1

116.0

114.3

115.8

117.2113.1119.2

127.5111.4108.8

111.8118.3118.2113.6118.5119.4

159.6

310.8164.6109.3132.8131.0

86.5103.0112.9

106.2105.5104.1107.798.5

108.197.9

108.7107.8122.079.5

104.5104.0109.6101.1121.7

110.8111.5108.5

116.3

114.4

116.0

117.4113.5119.3

127.2110.7108.8

113.1119.5117.4112.6121.8119.3

159.4

319.0165.2107.3127.0127.4

87.9103.0113.0

106.9106.2104.9107.298.2

108.899.1

109.7106.9122.879.4

103.4105.3106.2100.5118.5

111.1110.9111.8

116.8

114.5

116.2

117.6113.8119.5

127.1109.2110.4

111.7122.1123.2111.5120.7119.3

159.9

323.6165.6105.3121.2117.3

89.4103.4113.0

107.4107.1104.0107.697.8

107.699.7

111.3108.4121.478.4

103.4105.6107.5100.0120.0

111.9112.0111.3

117.3

114.7

117.2

118.5113.8120.8

128.4113.1110.5

111.8118.5115.9108.7121.4119.1

161.7

328.3167.2109.5128.9125.7

90.3103.0114.1

107.9107.6105.4108.297.3

110.1100.0111.8107.4121.777.3

103.5102.5108.8100.2120.2

114.5112.7120.9

117.9

115.5

117.7

119.2114.0121.7

128.8108.0110.5

111.3118.8116.7112.5121.2119.5

162.9

332.5168.8109.6127.9125.6

91.5104.1116.6

108.8108.2108.9106.397.2

111.699.8

114.0107.3122.680.1

104.5106.3109.5100.7122.9

112.6112.6112.7

118.6

116.1

117.8

119.3113.6122.0

129.4108.8109.9

112.4117.3117.1111.7117.5119.1

164.6

340.5168.8112.0132.0128.8

92.2103.3116.3

108.4108.2105.8106.696.5

110.399.9

113.7107.5121.278.2

104.2105.7106.4101.3120.6

113.5113.2114.4

118.5

116.1

118.5

120.4114.6123.2

131.3110.9110.2

112.7119.2119.0112.3119.3120.7

167.1

349.7173.3113.0133.0129.7

93.3104.1117.5

108.7108.4105.2106.396.2

111.2100.5113.2108.9123.177.7

105.7105.7109.6102.5123.3

109.7110.0108.5

119.6

117.1

121.4115.4124.4

133.1111.9112.1

112.6121.7121.9115.4121.3121.9

169.6

359.2176.7114.6135.1131.7

94.5104.6118.0

109.1108.7108.0108.096.4

111.0101.2113.0109.3123.978.5

106.7106.2105.5104.8122.8

110.6110.9109.5

120.6

118.1

Gross value (billions of 1992 dollars, annual rates)

2,001.9

1,552.11,049.6

502.5449.9

2,258.7

1,760.91,162.2

598.0498.2

2,220.1

1.727.81,150.9

576.3492.3

2,249.1

1,760.01,164.3

595.0489.9

2,255.7

1,761.91,165.5

595.7494.4

2,274.2

1,775.71,172.5

602.4499.0

2,276.1

1,782.81,171.6

610.5494.3

2,272.9

1,773.61,165.5

607.4499.7

2,273.4

1,771.61,163.0

607.8502.1

2,270.7

1,771.81,164.7

606.3499.3

2,303.5

1,795.11,182.2

612.1508.6

2,301.1

1,796.81,182.3

613.7504.9

2^06.2

1,800.81,178.6

621.5506.0

2,318.2

1,811.11,179.9

630.5507.8

2,340.5

1,829.71,188.5

640.5511.5

1. Data in this table also appear in the Board's G.I7 (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 January 1997. See"Industrial Production and Capacity Utilization: Historical Revision and Recent Develop-

ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. For a detaileddescription of the industrial production index, see "Industrial Production: 1989 Develop-ments and Historical Revision," 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

1994r 1995r 1996r

May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb.

NEW UNITS

1 Permits authorized2 One-family3 Two-family or more4 Started5 One-family6 Two-family or more7 Under construction 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 sold (thousandsof dollars)^

19 Median20 Average

CONSTRUCTION

21 Total put in place

22 Private23 Residential24 Nonresidential25 Industrial buildings26 Commercial buildings . . .27 Other buildings28 Public utilities and other.

29 Public30 Military31 Highway32 Conservation and development.33 Other

1,3721,069

3031,4571,198

259755584171

1,3461,161

185305

670340

130.0154.5

3,967

109.9136.8

Private residential real estate activity (thousands of units except as noted)

1,333997335

1,3541,076278775554221

1,3191,073246341

667374

133.9158.7

3,812

113.1139.1

1,4341,073360

1,4771,161316819584235

1,4071,124283362

757326

140.0166.4

4,087

118.2145.5

1,4521,098354

1,4761,142334826590236

1,4091,124285366

732362

136.4163.3

4,280

117.6144.4

1,4151,085330

1,4881,214274826594232

1,4261,137289372

732355

140.0166.5

4,160

122.9150.2

1,4571,073384

1,4921,164328825593232

1,4631,161302366

782352

144.2168.4

4,150

121.5149.6

1,4231,078345

1,5151,222293820593227

1,4491,153296369

814343

137.0159.7

4,100

122.3149.9

1,3991,040359

1,4701,148322825592233

1,3561,097259372

768331

139.0167.4

4,020

117.8144.7

1,3621,011351

1,4071,104303825588237

1,3751,129246364

706330

143.8168.4

4,000

116.6143.6

1,4181,025393

1,4861,133353828584244

1,4311,151280354

788327

143.5172.0

4,060

117.4144.1

1,4221,015407

1,3531,024329815571244

1,4841,177307338

794322

144.9171.8

3,950

118.8147.1

1,4001,051349

1,3751,125250818573245

1,3621,109253339

825314

145.0171.1

3,910

120.6149.6

Value of new construction (millions of dollars)

1,4441,077

3671,5221,218

304825578247

1,5631,258

305355

834307

141.0169.9

4,230

117.5144.7

525,968

399,427238,531160,89628,90859,50627,02545,457

126,5412,31437,1276,37880,723

547,105

410,643236,916173,72732,31767,51326,90246,994

136,4622,97737,8206,41289,253

567,313

426,518246,090180,42829,98170,01129,23551,201

140,7952,90639,3995,75392,737

558,481

418,120247,486170,63427,31065,83427,72349,767

140,3613,02037,7155,75693,870

563,122

423,106246,909176,19728,75569,28028,53349,629

140,0163,14038,3086,00492,564

559,312

419,293244,931174,36228,77068,26228,51448,816

140,0202,43939,1945,79392,594

564,715

426,703246,019180,68427,08272,14629,76451,692

138,0122,30736,5075,66093,538

572,262

428,361246,407181,95429,65670,67229,81251,814

143,9012,583

40,4855,473

95,360

582,537

437,034246,935190,09933,04374,53030,46952,057

145,5032,77439,3266,095

97,308

594,043

446,059249,167196,89231,58377,66932,63655,004

147,9832,350

40,1605,974

99,499

588,146

445,439250,297195,14229,41375,73532,45257,542

142,7072,423

41,7115,708

92,865

588,889

446,646250,126196,52030,39577,99633,36254,767

142,2442,52441,3205,83892,562

601,447

454,528254,141200,387

30,14279,93134,48355,831

146,9192,618

42,0225,558

96,721

1. Not at annual rates.2. Not 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 (G-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

Change from 12months earlier

1996Mar.

1997Mar.

Change from 3 months earlier(annual rate)

June Sept. Dec.

Change from 1 month earlier

Nov. Dec. Jan. Feb.

Indexlevel,Mar.1997 '

CONSUMER PRICES2

(1982-84=100)

1 AH items

2 Food3 Energy items4 All items less food and energy..5 Commodities6 Services

PRODUCER PRICES(1982=100)

7 Finished goods8 Consumer foods9 Consumer energy

10 Other consumer goods.. .11 Capital equipment

Intermediate materials12 Excluding foods and feeds .13 Excluding energy

Crude materials14 Foods15 Energy16 Other

2.8

2.82.81.83.3

2.42.64.32.11.5

12.616.6

-11.1

2.8

3.34.82.5

.83.2

1.62.53.5

.9

.7

-1.93.0

.1

2.9

4.34.92.5

.03.4

2.55.32.52.2

.6

47.4-14.1

-9.3

5.31.12.71.13.4

2.54.67.0

.61.2

1.0.0

-9.418.7

-2.6

3.3

3.416.22.4

.93.1

4.32.4

27.3.3

- . 3

2.2.0

-28.2169.7-1.6

1.8

.3-2.8

2.41.12.7

-3.0-1.8

-18.0

- 2 . 2.3

-3.4-59.1

15.5

.41.2.2.1.3

-2.511.1- . 2

.01.5.2.1.3

.5- . 23.5

.1

.1

-2 .612.9- . 1

.1

- .3

- . 3- 1 . 0

- . 2.0.0

-1.012.92.0

- . 4- . 3

-1.2

-1 .9-12.4

1.0

.0- 1 . 7

- .1.9

-3 .4.3.3

- . 6.0

2.1-19.2

.6

160.0

156.6111.2169.0143.0183.8

132.2135.382.9

145.3139.2

125.5134.2

114.083.0

159.3

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

1996r

1995

Q4

1996

Ql Q2 Q3 Q4r

GROSS DOMESTIC PRODUCT

1 Total .

345

6789

1011

1213

141516

171819

By sourcePersonal consumption expenditures

Durable goodsNondurable goodsServices

Gross private domestic investmentFixed investment

NonresidentialStructuresProducers' durable equipment

Residential structures

Change in business inventories . . .Nonfarm

Net exports of goods and services . .ExportsImports

Government consumption expenditures and gross investment.FederalState and local

By major type of product20 Final sales, total21 Goods22 Durable23 Nondurable24 Services25 Structures

26 Change in business inventories27 Durable goods28 Nondurable goods

MEMO• Total GDP in chained 1992 dollars

NATIONAL INCOME

Compensation of employeesWages and salaries

Government and government enterprisesOther

Supplement to wages and salariesEmployer contributions for social insuranceOther labor income

Proprietors' income1

Business and professional1

Farm1

41 Rental income of persons

42 Corporate profits'43 Profits before tax3

44 Inventory valuation adjustment . .45 Capital consumption adjustment .

46 Net interest .

6,935.7

4,700.9580.9

1,429.72,690.3

1,014.4954.9667.2180.2487.0287.7

59.548.0

-94.4719.1813.5

1,314.7516.4798.4

6,876.22,534.41,086.21,448.33,746.5

595.3

59.531.927.7

6,608.7

5,501.6

4,009.83,257.3

602.52,654.8

752.4350.2402.2

450.9415.9

35.0

116.6

529.5531.2-13.3

11.6

394.9

7,253.8

4,924.9606.4

1,485.92,832.6

1,065.31,028.2

738.5199.7538.8289.8

37.039.6

-94.7807.4902.0

1,358.3516.6841.7

7,216.72,662.21,147.31,515.03,926.9

627.6

37.034.9

6,742.9

5,813.5

4,222.73,433.2

621.72,811.5

789.5365.5424.0

478.3449.3

29.0

122.2

586.6598.9-28.1

15.9

403.6

7,576.1

5,151.4632.1

1,545.12,974.3

1,117.01,101.5

791.1214.3576.8310.5

15.417.3

-98.7855.2953.9

1,406.4523.1883.3

7,560.72,784.41,219.61,564.84,105.2

671.1

15.412.72.7

6,907.2

6,150.9

4,448.53,630.1

641.22,988.9

818.4382.2436.2

518.3471.9

46.4

126.8

654.0639.9-8.923.1

403.3

7,350.6

4,990.5612.8

1,494.22,883.5

1,064.01,046.2

749.7204.0545.7296.5

17.819.9

-67.2837.0904.2

1,363.4507.7855.7

7,332.82,698.01,166.41,531.73,992.4

642.3

17.827.3

-9.4

6,780.7

5,927.4

4,301.13,501.1

626.92,874.2

800.1369.8430.2

486.7454.9

31.8

611.8604.2

16.5

401.9

7,426.8

5,060.5625.2

1,522.12,913.2

1,068.91,070.7

769.0208.4560.6301.7

-1.72.7

-86.3839.5925.8

1,383.7518.6865.1

7,428.62,749.31,192.11,557.14,027.9

651.4

-1.712.3

-14.0

6,814.3

6,015.3

4,344.33,540.2

634.02,906.1

804.1375.0429 A

499.5461.1

38.4

126.9

645.1642.2-17.4

20.4

399.5

7,545.1

5,139.4637.6

1,544.72,957.1

1,096.01,088.0

773.8207.4566.3314.2

8.011.3

-99.2850.0949.2

1,408.8529.6879.2

7,537.12,782.01,219.11,562.94,087.0

668.0

8.09.9

-1.9

6,892.6

6,118.7

4,420.93,606.5

638.92,967.5

814.4380.4434.0

515.2469.445.8

124.5

655.8644.6-11.0

22.3

402.3

7,616.3

5,165.4630.5

1,546.52,988.5

1,156.21,119.6

807.0213.5593.5312.6

36.635.4

-120.2844.3964.5

1,414.8525.5889.3

7,579.62,785.01,225.51,559.54,122.0

672.6

36.634.72.0

6,928.4

6,203.0

4,482.93,659.6

644.63,015.1

823.3384.6438.6

526.3474.6

51.8

127.0

661.2635.6

2.023.6

405.6

7,716.1

5,240.3635.2

1,566.83,038.3

1,146.61,127.8

814.5227.8586.7313.3

18.819.7

-89.1887.0976.0

1,418.3518.5899.8

7,697.42,821.11,241.71,579.54,183.8

692.5

18.8-6.024.8

6,993.6

6,266.7

4,546.03,714.2

647.23,067.0

831.8388.8442.9

532.1482.4

49.7

128.9

654.1637.1-9.226.2

405.7

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, Sun'ey of Current Business.


Selected Measures A4S

2.17 PERSONAL INCOME AND SAVING

Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates

Account

PERSONAL INCOME AND SAVING

1 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 professional1

11 Farm1

12 Rental income of persons13 Dividends . .14 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 expenditures25 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

1994

5,753.1

3,241.8824.9621.1739.2

1,075.2602.5

402.2450.9415.9

35.0116.6199.6663.7956.3472.9

278.1

5,753.1

731.4

5,021.7

4,832.3

189.4

25,349.817,158.218,330.0

3.8

1,056.3

1,006.7

189.4123.2

-13.3

441.0237.7

49.6-119.6

70.6-190.2

169.269.499.7

1,090.4

1,014.4212.3

-136.4

34.1

1995

6,115.1

3.430.6863.5648.4783.7

1,161.6621.7

424.0478.3449.3

29.0122.2214.8717.1

1,022.6507.4

294.5

6,115.1

794.3

5,320.8

5,071.5

249.3

25,628.817,399.618,799.0

4.7

1,151.8

1,071.8

249.3140.6

-28.1

454.0225.2

80.0-87.9

73.8-161.7

167.972.995.0

1,150.9

1,065.3221.9

-136.3

- . 9

1996

6,452,3r

3,630.1r

902.7r

672.5r

827.9r

l,258.3r

641.2

436.2518.3471.946.4

126.8230.6738.2r

l,079.7r

539.1

307.5

6,452.3r

863.8r

5,588.5

5,314.0r

274.4r

26,015.9r

17,667.3r

19,167.0r

4.9

1,275.4

1,160.4

274.4r

176.8-8.9 r

474.0r

235.2r

115.0-54.6

72.5-127.1

169.676.693.0

1,200.8

l,117.0r

233.4r

-149.5

-74.6

1995

Q4

6,234.5

3,500.2873.9654.7800.7

1,198.6626.9

430.2486.7454.9

31.8125.8221.7727.2

1,041.4516.1

298.8

6,234.5

807.2

5,427.3

5,144.7

282.6

25,684.517,459.918,986.0

5.2

1,220.6

1,138.9

282.6158.4-8.8

463.6233.4

81.7-80.7

73.8-154.5

162.474.388.1

1,173.9

1,064.0220.1

-110.2

-46.7

Qi

6,308.5

3,538.2878.7654.8810.5

1,215.1634.0

429.1499.5461.1

38.4126.9226.6726.1

1,063.0529.9

301.0

6,308.5

824.9

5,483.5

5,218.1

265.4

25,753.317,570.219,041.0

4.8

1,217.9

1,133.8

265.4171.8

-17.4

465.6229.1

84.1-82.0

73.2-155.2

166.175.191.0

1,167.9

1,068.9228.8

-129.9

-50.0

1996

Q2

6,412.4

3,606.5900.3671.8822.3

1,244.9638.9

434.0515.2469.445.8

124,5229.3733.1

1,075.6536.3

305.8

6,412.4

870.6

5,541.8

5,300.7

241.1

25,990.017,675.719,063.0

4.3

1,244.5

1,121.6

241.1176.3

-11.0

471.0233.2

122.9-54.1

72.6-126.7

177.076.0

101.0

1,187.0

1.096.0235.1

-144.2

-57.5

Q3

6,501.4

3,659.6911.0678.5832.4

1,271.6644.6

438.6526.3474.6

51.8127.0231.5742.9

1,085.1541.7

309.7

6,501.4

872.5

5,628.9

5,329.8

299.1

26,066.217,657.919,242.0

5.3

1,314.0

1,196.1

299.1182.5

2.0

477.2237.4

117.8-48.4

72.3-120.8

166.377.189.2

1,215.9

1,156.2234.2

-174.6

-98.1

Q4r

6,587.0

3,716.1920.9685.0846.5

1,301.5647.2

442 9532.1482.4

49.7128.9234.8750.5

1.095.0548.2

313.4

6,587.0

887.2

5,699.7

5,407.5

292.2

26,252.217,764.819,322.0

5.1

1,325.3

1,190.2

292.2176.5-9.2

482.1241.3

135.0-34.0

71.9-105.9

169.078.190.9

1,232.5

1,146.6235.3

-149.4

-92.8

1. With inventory valuation and capital consumption adjustments.2. With capital consumption adjustment.

SOURCE. U.S. Department of Commerce, Sun'ey of Current Business.


A50 International Statistics • June 1997

3.10 U.S. INTERNATIONAL TRANSACTIONS Summary

Millions of dollars; quarterly data seasonally adjusted except as noted1

Item credits or debits

1 Balance on current account2 Merchandise trade balance^3 Merchandise exports4 Merchandise imports5 Military transactions, net6 Other service transactions, net7 Investment income, net8 U.S. government grants9 U.S. government pensions and other transfers

10 Private remittances and other transfers

11 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 Fund16 Foreign currencies

17 Change in U.S. private assets abroad (increase, —)18 Bank-reported claims19 Nonbank-reported claims20 U.S. purchases of foreign securities, net21 US direct investments abroad net

22 Chan°e 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 bv U.S. banks3

27 Other foreign official assets5

28 Change in foreign private assets in United States (increase, +)29 U S bank-reported liabilities30 U.S. nonbank-reported liabilities31 Foreign private purchases of U.S. Treasury securities, net32 Foreign purchases of other U.S. securities, net33 Foreign direct investments in United States, net

34 Allocation of special drawing ri°hts35 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)

1994

-148,405-166,121

502,463-668,584

1,96359,779-4.159

-15,816-4,544

-19,506

-341

5,3460

-441494

5,293

-155,700-8,161

-32.804-60.270-54 465

40,25330,7456,0772,3443,560

-2,473

245,123111,842-7.71034,22557,00649,760

013,724

i 3,724

5,346

37,909

-1,529

1995

-148,154-173,424

575,940-749,364

3,58564,776-8.016

-10,959-3,420

-20,696

-280

-9,7420

-808-2,466-6,468

-297,834-69,146-34.219-98,960-95 509

109,75768,8133,7341,082

32,8623,266

314.70525,28334,57899,34095.26860,236

031,548

31,548

-9,742

108,675

3,959

1996

-165,095-187,674

611,669-799,343

2,80970,658-8,416

-14,634-4,233

-23,605

-665

6,6680

370-1,280

7,578

-312,833-88,219

-104,533-88 304

122,778111,151

4,3311,4044,6141,278

402.268-1,558

153,784131,68283,950

0-53,122

-53.121

6,668

121,374

13,573

1995

Q4

-30,435-38,026149,422

-187,448978

17,657-1,890-2,799

-731-5,624

-199

1910

-147-163

501

-98,206-7,272

-14,278-32,539—44 117

11,36912,984

7641,249

-3,908280

87,86032,76511,272

1,73427,32114,768

029,420

1,15328,267

191

10,120

-1,435

Qi

-35,274-43,127150,032

-193,159489

18,008311

-4,259-1,012-5,684

-152

170

-199-8491,065

-68,5881,714

-12,707-34,420- 2 3 175

52,02155,600

52-156

-3,264-211

47,454-35.571

6,50611.83235,99328,694

04,5226,653

-2,131

17

52,177

-992

1996

Q2

-40,593-47.370153,120

-200,490725

17,687-2,215-2,364-1,081-5,975

-353

-5230

-133-220-170

-49,823-74

-3,374-20,200- 2 6 175

13,566-3,384

1.258220

14,1871,285

86,9871,9257,296

31.21229,12217,432

0-9,261

-449-8,812

-523

13,346

5,555

Q3

-47,853-51,869150,144

-202,013515

17,075-4,098-2,580-1,064-5,832

166

7,4890

848-1836,824

-80,968-33,196-15,696-22,933

- 9 143

24,23525,472

1,2171,061

-1,930-1,585

118,735-1,15120,60843,40234,82021,056

0-21,804

-8,318-13,486

7,489

23,174

5,479

Q4P

-41.380-45,308158,373

-203,6811,080

17,883-2,414-5,431-1,076-6,114

-326

-3150

-146- 2 8

-141

-113,454-56,663

-26,980- 2 9 811

32,95633,463

1,804279

-4,3791,789

149.09233,239

67,33831,74716,768

0-26,573

2,119-28,692

-315

32,677

3,531

1. Seasonal factors are not calculated for lines 12-16, 18-20, 22-34, and 38-40.2. 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 privatecorporations 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, balance2 Merchandise3 Services

4 Goods and services, exports5 Merchandise6 Services

7 Goods and services, imports8 Merchandise9 Services

1994

-104,381-166,123

61,742

698,301502,462195,839

-802,682-668,585-134,097

1995

-105,064-173,424

68,360

786,529575,939210,590

-891,593-749,363-142,230

1996

-114,299-187,766

73,467

835,414611,507223,907

-949,714-799,274-150,440

1996

Aug.

-10,628-16,546

5,918

69,70551,10618,599

-80,333-67,652-12,681

Sept.

-11,616-17,639

6,023

68,81650,31718,499

-80,432-67,956-12,476

Oct.

-8,066-14,211

6,145

71,75852,89318,865

-79,824-67,104-12.720

Nov.

-7,968-14,404

6,436

72,56653,30219,264

-80,534-67,706-12,828

Dec.

-10,489-16,871

6,382

71,21051,92419,286

-81.699-68,795-12,904

1997

Jan.

-12,334-18,614

6,280

70.64551,35819,287

-82,979-69.972-13,007

Feb.p

-10,419-16,898

6,479

73,46454,05819,406

-83,883-70,956-12,927

1. Data show monthly values consistent with quarterly figures in the U.S.payments 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 ExchangeStabilization Fund1

3 Special drawing rights2-3

4 Reserve position in International MonetaryFund2

5 Foreign currencies4

1993

73,442

11,0539,039

11,81841,532

1994

74,335

11,05110,039

12,03041,215

1995

85,832

11,05011,037

14,64949.096

1996

Aug.

76,781

11,05010,307

15,59739,827

Sept.

75,509

11,05010,177

15,42138,861

Oct.

75,558

11.04910,226

15,51738,765

Nov.

75,444

11,04910,386

15,51638,493

Dec.

75,090

11,04910,312

15,43538,294

1997

Jan.

68,200

11,0489,793

14,37232,987

Feb.

67,482

11,0519,866

14,03732,528

Mar.P

67,222

11,0509,879

13,84632,447

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 securities"3 Earmarked gold3

1993

386

379,39412,327

1994

250

441,86612,033

1995

386

522,17011,702

1996

Aug.

171

590,36711,217

Sept.

265

609,80111,210

Oct.

176

619,98711,204

Nov.

170

634,16511,198

Dec.

167

638,04911,197

1997

Jan.

167

646,13011,197

Feb.c

229

662,37511,175

Mar.

916

672,05911,034

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.


A52 International Statistics U June 1997

3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS


Item

1 Total1

By Type2 Liabilities reported by banks in the United States3 U.S. Treasury bills and certificates3

U.S. Treasury bonds and notes4 Marketable5 Nonmarketable4

6 U.S. securities other than U.S. Treasury securities5

By area7 Europe1

8 Canada9 Latin America and Caribbean

10 Asia11 Africa12 Other countries

1994

520,934

73,386139,571

254,0596,109

47,809

215,37417,23541,492

236,8244,1805,827

1995

630,918

107,394168,534

293,6906,491

54,809

222,40619,47366,721

311.0166,2965,004

1996r

Aug.

703,933

111,092189,726

341,0376,018

56,060

246,76021,66269,076

354,3246,7225,387

Sept.

719,615

116,386182,122

358,2256.057

56,825

246,34221,35169,338

369,5296,9446,109

Oct.

722,759

109,995186,180

363,0635,890

57,631

246,54221,76470,479

371,2686,5876.117

Nov.

737,523

107.071197,692

366,9035,928

59,929

250,87221,36076.976

375,3117,0345,968

Dec.

752,551

112,116193,435

380,5655.967

60,468

253.09921,34381,740

383.0627.3795.926

1997

Jan.

763,068

119,681188,076

388,5876,007

60,717

262,14521,15177,557

390,6716,7174,825

Feb.p

771,275

115,973191,090

398,6406,043

59,529

260,98421,23778,817

399,0607,4113.764

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

institutions 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 States1

Item

1 Banks' liabilities2 Banks' claims3 Deposits4 Other claims ^5 Claims of banks' domestic customers"

1993

78,25962,01720,99341,02412,854

1994r

89,25860,71119,66141,05010,878

1995r

109.71374,01622,69651,3206,145

1996r

Mar.

107,45469,16422,21346,951

6,384

June

111,65165.82520,89044,935

7,554

Sept.

111,14068,12024,02644.094

7.390

Dec.

103,82066,45522,90443,55114,613

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.


3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1

Payable in U.S. dollars


Bank-Reported Data A53

Item 1995

1996

Aug. Sept. Oct. Nov. Dec.1

1997

Jan. Feb.p

BY HOLDER AND TYPE OF LIABILITY

1 Total, all foreigners

2 Banks' own liabilities3 Demand deposits4 Time deposits"5 Other3

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 organizations12 Banks' own liabilities13 Demand deposits14 Time deposits2

15 Other3




19 Other

20 Official institutions . . . .21 Banks' own liabilities.22 Demand deposits...23 Time deposits2

24 Other3

25 Banks' custodial liabilities26 U.S. Treasury bills and certificates6


28 Other

29 Banks10 . .303132333435

Banks' own liabilitiesUnaffiliated foreign banks. . .

Demand depositsTime deposits2

Other3

Own foreign offices4




39 Other

40 Other foreigners41 Banks'own liabilities.42 Demand deposits.. .43 Time deposits" . . . .44 Other3

454647

Banks' custodial liabilities"U.S. Treasury bills and certificates6

Other negotiable and readily transferableinstruments7

Other

MEMO49 Negotiable time certificates of deposit in custody for

foreigners

1,014,996

718,59123,386186,512113.215395,478

296,405162,938

42,53990,928

8,6068,176

293,2984,849

430281

1490

212,95759,9351,564

23,51134,860

153,022139,571

13,245206

678,532563,617168,13910,633111,17146,335395,478

114,91511,264

14,50689,145

114,90186,86311,16048,53227,171

28,03811,822

14,6391,577

17,895

l,099,549r

753,461r

24,448192,558r

l40,165r

396,290r

346,088197,355

52,20096,533

11,03910,347

214,6565,670

692350

3411

275,928r

83,447r

2,09830,717r

50,632r

192,481168,534

23,603344

691,412r

567,834r

171,544r

11,758103,471r

56,315396,290r

123,57815,872

13,03594,671

121,170r

91,833r

10,57153,714r

27,548

29,33712,599

15,2211,517

9,103

1,137,736

759,01127,033188,717141,733401,528

378,725220,575

64,04094,110

13,86413,355

295,7857,541

509244

2650

305,55179,3401,511

33,66444,165

226,211193,435

32,350426

681,006562,995161,46713,69191,20056,576

401,528

118,01113,886

12,32191,804

137,315103,32111,80258,06833,451

33,99413,010

19,1041,880

9,934

l,075,882r

7O3,552r

23,147196,563r

130,689r

353,153r

372,330219,949

55,55296,829

12,680r

12,089r

494,7387,302r

591345

2460

300,818r

81,520r

1,45937,70842,353r

219,298189,726

29,281291

634,948r

510,215r

157.06211,11694,86751,079

353,153r

124,73318,670

10,86495,199

127,436r

99,728r

10,52359,250r

29,955r

27,70811,208

15,1611,339

8,276

l,091,897r

724,792r

25,504192,525r

15O,23Or

356,533r

367,105r

212,478

57,70296.925r

14,44313.843

265,4418,376

600399

2010

298,508r

86,027r

2,04934,90249,076r

212.481182,122

30,051308

649.649r

524,845r

168.312r

12,76491,90663,642r

356,533r

124.804r

18,556

11,29894,950r

129,297r

100,077r

10,66560,276r

29,136r

29,22011,401

16,1521,667

10,466

l,124,315r

757,645r

23.858r

197,388r

150,302r

386,097r

366,670214,609

54,04598,016

16,666r

15,835r

676,0059,763r

831600

2310

296,175r

83,706r

1,31635,55146,839r

212,469186,180

25,0851,204

678,993r

554,577r

168,480r

11,15696,22361,101r

386,097r

124,41616,865

12,45595,096

132,481r

103,527r

ll,319r

59,609r

32,599r

28,95410,964

16.2741,716

11,657

l,116,775r

740,998r

27,637r

192,543r

143,690r

377,128r

375,777225,046

54,56896,163

14,772r

13,434r

464,9068,482r

1,3381,088

22624

304,763r

82,714r

2,180r

35,29245,242r

222,049197,692

24,000357

667,700r

547,106r

169,97813,30494,34562,329

377,128r

120,594r

14,227

13,29593,072r

129,540r

97,744r

12,10758,OOOr

27,637r

31,796r

12,039

17,0472,710r

10,540

1,137,736

759,01127,033188,717141,733401,528

378,725220,575

64,04094,110

13,86413,355

295,7857,541

509244

2650

305,55179,3401,511

33,66444,165

226,211193,435

32,350426

681,006562,995161,46713,69191,20056,576

401,528

118,01113,886

12,32191,804

137,315103,32111,80258,06833,451

33,99413,010

19,1041,880

9,934

1,135,373

764,86126,209186,392158,868393,392

370,512214,727

62,97192,814

14,84914,170

555,7928,323

679494

1850

307,75788,2301,290

32,72754,213

219,527188,076

31,291160

669,269553,694160,30212,89889,55757,847393,392

115,57513,969

11,14290,464

143,498108,76711,96658,31638,485

34,73112,188

20,3532,190

9,035

1,157,306

781,34525,066189,422161,501405,356

375,961217,817

59,66398,481

14,62614,297

515,0359,211

329219

1100

307,06386,6231,378

34,47250,773

220,440191,090

29,003347

682,347562,111156,75511,64289,25355,860

405,356

120,23613,289

11,21095,737

153,270118,314

11,99560,66245,657

34,95613,219

19,3402,397

8,740

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, the 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 States1—Continued

1996

Aug. Sept. Oct. Nov. Dec Feb.p

50 Total, all foreigners

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 Yugoslavia1'71 Other Europe and other former U.S.S.R.1

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 countries13

104 Other

105 Africa106 Egypt107 Morocco108 South Africa109 Zaire110 Oil-exporting countries14

111 Other

112 Other113 Australia114 Other

115 Nonmonetary international and regional organizations116 International15

117 Latin American regional16

118 Other regional17

1,014,996

1,006,390

390,8693,588

21,8772,8841,436

44,36527,109

1.40010,88516,0332,3382,8462,726

14,6753,094

40,7243,341

163,733245

27,770

24,768

423,84717,203

104,0148,4249,145

229,5993,1274,615

13875

1,121529

12,2275,2174,551

9001,597

13,9866,704

154,346

10,0669,844

17,1042,3381,5875,157

62,9815,1242,7146,466

15,49415,471

6,5241,879

97433

91.3432,763

6,0365,142

894

8,6067,537

613456

l,099,549r

l,088,510r

362,8193,537

24,7922,9212,831

39,21824,035

2,01410,86813,745

1,3942,7617,948

10,0113,246

43,6254,124

139,183177

26,389

30,468

440,213r

12,23594.991

4,89723,797

239,0832,8263.659

81,314l,276r

48124,5604,6734,264r

9741,836

11,8087,531r

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

1,137,736

1,123,872

368,3525,101

23,5762.4501,463

34,36524,554

1,81010,70110,995

1,2881,8657,571

16,9221,291

44,2156,723

151.385206

21,871

38,111

465,70213,79488,2995,299

27,663250,761

2,9153,256

211,7671,282

62831,2305,9774,077

8341,888

17,3618,650

236,716

30,44115,99018,7423,9362,2976,042

107,0145,9733,378

10,91214,30317,688

8,0632,012

112458

102,6082,863

6,9285,4681,460

13,86411,991

1,339534

l,075,882r

l,063,202r

356,967r

4,68325,155

2,5011,113

38,270r

23,1281,722

12,55211,460

1,5561,3284,988

17,5051,591

39,0747,272

136,922r

20725,940

30,727

424.119r

13,32087,9944,150

24,518227,047r

2,4623,263

141,4331.176

62524,399

3,6153,9941,0771,799

15,0298,204r

237,626r

34,22414,77518,6094,0122,1614,364

109,264r

5,4062,539

10,69113,89117,690

7,2591,920

121632

62,0752.505

6,5045,4651,039

12,680r

10,993r

1.024663

l,091,897r

l,077,454r

352,049r

6,01722,482

2,652812

37,637r

23,5991,854

12,5099,6261,6221,4734,761

20,3591,814

42,2267,992

133,614r

21420,786

33,199

433,796r

11,98986,880r

4,88023,817

233,818r

3,2052,889

331,4491,181

62326,8085,2903,950

9361,751

15,5968,701r

243,210r

32,06815,72117,4853,7932,2044,134

112,539r

5,9083,429

11.75914,71519,455

7,4401,894

78482

62,0512,929

7.7605.5222,238

14,44312,761

1,193489

l,124,315r

l,107,649r

374,418r

6,81623,232i,8or1,509

42,346r

23,5221,666

12,79312,017

1,5521,3885,602

17,6651,424

32,5418,019

I59,878r

21620,431

35,147r

444,847r

11,701101,414r

4,91024,083

229,4932,7672,968

171,3831,207

58027,6735,0764,0561,0241,841

16,3698,285

239,416

26,99815,449r

17,052r

3,7092,4367,162

112,602r

5,5453,191

11,97213,03220,268

7,0581,904

74435

111,9402,694

6,7634,7861,977

16,666r

14,887r

1,304475

l,116,775r

l,102,003r

381,204r

6,25021,006r

2,7901,557

40,021r

21,650r

2,22210,262r

ll,132r

1,8821,7238,215

18,2281,656

37,9817,311

165,814r

23221,272

33,035

438,574r

13,86091,494r

6,44326,920r

226,502r

2,7282.838

181,5741,235

56427,9814,4374,002

9421,753

17,3777,906

233,804r

29,41116,61318,712r

3,8322,4015,723

103,680r

5,8973,264

12,72913,14518,397

7,6711,901

66641

102,3842,669

7,7156.1961,519

14,772r

12,974r

1,172626

1,137,736

1,123,872

368,3525,101

23,5762.4501,463

34,36524,554

1,81010,70110,995

1,2881,8657,571

16,9221,291

44,2156,723

151,385206

21,871

38,111

465,70213,79488,2995,299

27,663250,761

2,9153,256

211,7671,282

62831,2305,9774,077

8341,888

17,3618,650

236,716

30,44115,99018,7423,9362,2976,042

107,0145,9733,378

10,91214,30317,688

8,0632,012

112458

102,6082,863

6,9285,4681,460

13,86411,991

1,339534

1,135,373

1,120,524

379,5914,794

22,8412,2131,583

34,55624,857

2,08010,3639,7591,8601,7407,160

20,3992,269

43,2657,051

157,353212

25,236

34,827

455,15516,44690,451

5,10322,445

244,5822,9742,760

191,6111,339

57627,1296,3973,828

9651,912

18.0638,555

236,408

27,90716,68219,8734,3292.1596,597

106,4216,0482,3409,873

12,92421,255

8,4431,933

111610

53,0952,689

6,1004,8661,234

14,84913,2301,103

516

1,157,306

1,142,680

379,2054,010

23,5361,5941,338

35,48024,128

1,93010,60710,945

1,5381,6606,819

17,9511,527

46,6806,749

157,261239

25,213

33,957

471,58116,98997,407

8,80323,836

246,4205,5462,814

191,6271,401

57727,432

6,0814,113

9151,854

18,0397,708

244,507

31,63415,62120,0654,7522,4736,197

108,7056,2762,437

10,75212,76722,828

8,1102,033

97720

72,4672,786

5,3204,0721,248

14,62613,100

1,120406

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 the 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 States1

Payable in U.S. Dollars


Area or country

Aug. Sept. Oct. Feb.p

1 TotaJ, all foreigners

2 Foreign countries

3 Europe .4 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.3 .

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 AsiaChina

44 Mainland45 Taiwan46 Hong Kong47 India48 Indonesia49 Israel50 Japan51 Korea (South)52 Philippines53 Thailand54 Middle Eastern oil-exporting countries4 . .55 Other

56 Africa57 Egypt58 Morocco59 South Africa60 Zaire61 Oil-exporting countries5

62 Other

63 Other64 Australia65 Other

66 Nonmonetary international and regional organizations6. . .

485,432r

480,841r

124,124r

6926,923r

1,129512

12.149r

7,623r

6046,044r

2,960r

504938973

3,536r

4,0985.747r

87866,863r

265l,686r

18,490

224,229r

5,854r

66,4108,533r

9,58396,373r

3,8204,004

0682366258

17.749l,404r

2.198997503

l,832r

3,663r

107,800r

8361,4489,222r

994l,472r

68859,569r

10,286663r

2,90213,982r

5,738r

3,053r

225429674r

2856867

3,145r

2,192r

953r

4,591

532,444r

530,513r

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

115,336r

1,0231,713

12,8211,8461,696

73961,46813,975r

1,3182,6129,6396,486

2,742210514465

1552

1,000

2,4671,622

845

1,931

600,691r

598,087r

166,501r

1,6626.727

492971

15,2468,472r

5686.4577,080

808418

1,6693,2112,673

19,7981,109

85,057115

3,968r

26,436

274,127r

7,40071,8714,103

17,259105,510r

5,1366,247

01,031

620345

18,42525,209

2,7862,720

5891,7023,174r

122,536r

1,4011,894

12,8021,946l,759r

63359,96718,961

1,6972,680

10,4248,372

2,777r

247524584

0420

l,002r

5,710r

4,577l,133r

2,604

546,532r

544,500r

150,054

8497,018230

1,29611,5707,559433

6,6256,5651.342548794

3,0732,7269,2661,044

85.35587

3,674

25,132

249,743r

7,06262,2973,091r

15,15599.365r

4,183r

4,7250

932476335

17,54023,7132,2112,463562

1,7283,905

113,787r

2,0331,023

12,4642,1181,572667

54,58317,519r

1,2052,8649,4898,250

2,73522157751211

462952

3,0492,439610

2,032

544,646r

542,948r

155,277

9886,903408

1,35012,0788,670397

5,8706,9561,199484

1,1354,1522,97610,9301,083

85,73287

3,879

25,343

240,683"7.101

61,8303,680r

15,261102,1574,397r

4,7230

965507339

17,71511,2072,2572,541530

1,5133,960

113,582r

1,7001,700

13,8821,9751,653576

52,32617,488r

1,2552,70510,1118,211

2,757241565572

1429949

5,3063,6411,665

1,698

563,454r

560,325r

165,6341,1976.828480

1,06812,7928.546426

5,0077,3861,617517

1,4133,8852.91916,110

96289,961

1184,402

23,066

243,6347,057

61,9914,43815,417

105,8914,2884,811

0957546362

17,7429,4062,3542,563547

1,6363,628

120,007r

1,4201,305

12,984r

2,181r

1,5771,017

59,34316,947r

1,3352,699

11,3727,827

2,638204543614

1414862

5,3463,7981,548

3,129r

574,920

573,447

168.7941,0976,403

6511,228

12,1987,195

5715,9577,3501,894

3411,5334,1812,882

18.0711,131

92.143112

3,856

22,013

253,7617,212

64,9115,019

16,141105,234

4.5544,960

0952568365

17,99315,0742,6212.629

5511,6263,351

120,285

1,2921,413

13,5502,0271,636

62459.88618,080

1.5192,820

10,3117,127

2,557212587551

0427780

6,0374,3361,701

1,473

600,691

598,087

166,5011,6626,727

492971

15,2468.472

5686.4577,080

808418

1.6693.2112.673

19,7981.109

85,057115

3.968

26.436

274,1277,400

71,8714,103

17.259105.510

5,1366.247

01.031

620345

18,42525.2092.7862.720

5891,7023,174

122,536

1,4011,894

12,8021,9461,759

63359,96718,9611,6972,680

10.4248.372

2,777247524584

0420

1,002

5,7104,5771.133

2,604

608,478

606,706

179,4901,6437,611678

1,14418,1119.657636

5.4198.1191,058420

1,6736,5063.028

21,4561.029

86,710108

4,484

26,344

271,6386,987

62,6794,44417,620108.6415,5086,166

01,076612336

18,31927,6752,7942,867623

1,5983,693

121,359

2,0351,249

11,7641,8241,746692

59,84320,2141,4923,0038,5828,915

2,7312464895720

4081,016

5,1443,7431,401

1,772

634,668

632,413

194,231

1.2846,855571976

20,5769,075530

5,5878,658766310

1,7045,4063,323

25,2571,221

96.987107

5,038

27,877

275,2396,952

66,7715.98017,758

110,1415,6016,033

01,131634336

18,29324,2502,9092,944766

1,4513,289

127,102

1,7661,201

11,8801,9571,893617

64,17520.0771,7943,0928,8899,761

2,772245522564

0474967

5,1923,1762,016

2,255


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.'"


A56 International Statistics O June 1997

3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERSPayable in U.S. Dollars


Reported by Banks in the United States1

Type of claim

1 Total

2 Banks' claims3 Foreign public borrowers4 Own foreign offices2

5 Unaffiliated foreign banks6 Deposits7 Other8 All other foreigners

9 Claims of banks' domestic customers3

10 Deposits11 Negotiable and readily transferable

instruments12 Outstanding collections and other

claims

MEMO13 Customer liability on acceptances

14 Dollar deposits in banks abroad, reported bynonbanking business enterprises in theUnited States5

1994r

601,814

485,43223,416

283,015110,41059,36851,04268,591

116,38264,829

36,111

15,442

8,427

32,796

1995

655,211r

532,444r

22,518307,427101,59537,771r

63,824r

100,904r

122,76758,519

44,161

20,087

8,410

30,717

1996r

744,135

600,69122,220

342,511113,52133,86379,658

122,439

143,44477,650

50,659

15,135

9,624

42,679

1996r

Aug.

546,53219,095

299,830111,78039,46172,319

115,827

33,527

Sept.

688,239

544,64622,924

311,588109,54635,37774,169

100,588

143,59380,695

46,491

16,407

9,396

34,125

Oct.

563,45425,185

330,377108,70136,26772,43499,191

40,326

Nov.

574,92020,420

335,089107,92832,42775,501

111,483

41,581

Dec.

744,135

600,69122,220

342,511113,52133,86379,658

122,439

143,44477,650

50,659

15,135

9,624

42,679

1997

Jan.

608.47826,039

331,276121,20039,26881,932

129,963

43,452

Feb.p

634,66824,758

361,490118,05538,13279,923

130,365

47,185

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 customers.4. 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 States1

Payable in U.S. Dollars


Maturity, by borrower and area'

Sept.r

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

202,566

172,66217,828154,83429,90410,87419,030

57,4137.72760,49041,4181,8203,794

5,3102,58114,0255,6061,935447

202,282

170,41115,435

154,97631.8717,838

24,033

56,3816,690

59,58340,567

1.3795,811

4,3583,505

15,7175,3231,5831,385

224,932

178,85714,995163,86246,0757,52238.553

55,6226,75172,50440,2961,2952,389

4,9952,75127,6817,9411,4211,286

233,435r

193,87019,645r

174,225r

39,565r

8,13131,434r

57,9795,470

84,38540,312

1,3264,398

6,8352,563

19,416r

8,371r

1,449931

185,88114,982r

170,899r

42,653r

8,12634,527r

57,1386,806

78,62238,078

1,2793,958

8,1933,689

19,564r

9,201r

1,410596

232,997

189,04716,003

173,04443,950

6,92237,028

58,5458,811

79,62237,199

1,3203,550

7,1173,533

21,3829,8081,349

761

257,939

211,72115,390

196,33146,218

6,81539,403

55,4998,339

103,25338,131

1,3165,183

6,9632,645

24,9179,3911,361

941


2. Maturity is time remaining until maturity.3. Includes nonmonetary international and regional organizations.



3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1


Area or country

Sept. Sept.

1 Total

2 G-10 countries and Switzerland3 Belgium and Luxembourg4 France5 Germany6 Italy7 Netherlands8 Sweden9 Switzerland

10 United Kingdom11 Canada12 Japan

13 Other industrialized countries14 Austria15 Denmark16 Finland17 Greece18 Norway19 Portugal20 Spain21 Turkey22 Other Western Europe23 South Africa24 Australia

25 OPEC2

26 Ecuador27 Venezuela28 Indonesia29 Middle East countries30 African countries

31 Non-OPEC developing countries

Latin America32 Argentina33 Brazil34 Chile35 Colombia36 Mexico37 Peru38 Other

AsiaChina

39 Mainland40 Taiwan41 India42 Israel43 Korea (South)44 Malaysia45 Philippines46 Thailand47 Other Asia

Africa48 Egypt49 Morocco50 Zaire51 Other Africa3

52 Eastern Europe53 Russia4

54 Yugoslavia5

55 Other

56 Offshore banking centers57 Bahamas58 Bermuda59 Cayman Islands and other British West Indies60 Netherlands Antilles61 Panama6

62 Lebanon63 Hong Kong64 Singapore65 Other^

66 Miscellaneous and unallocated8

344.7

131.35.6

15.39.16.52.82.34.8

59.76.3

18.8

24.01.2.9.7

3.01.2.4

8.91.31.71.72.9

15.8.6

5.22.76.21.1

6.610.84.41.8

16.0.5

2.6

.75.23.2

.46.63.13.62.23.1

.2

.6

.01.0

3.11.9.6.6

58.16.96.2

21.51.11.9.1

13.96.5

.0

39.7

409.5r

161.9r

7.412.012.67.74.72.75.9

84.4r

6.917.6

26.5r

.71.0.4

3.21.7.8

9.92.13.2r

1.12.3

17.6r

.55.13.37.6r

1.2

83.2r

7.712.04.72.1

17.9r

.43.1

2.07.33.2

.56.74.43.13.13.1

.4

.7

.0

.8

3.21.6.6.9

73.5r

10.98.9

18.4r

2.62.4

.118.8r

11.2.1

43.6r

499.5r

191.2r

7.2r

19.124.711.83.62.75.1

85.8r

10.021. r45.7r

1.11.3.9

4.52.01.2

13.61.63.2r

1.015.4

24. lr

.53.73.8

15.3r

.9

96.0

11.28.46.12.6

18.4

1.19.24.2

.416.23.13.32.14.7

.51.4

72.9r

10.28.4

21.4r

1.31.3.1

20.0r

10.1.1

66.7

545.01"

212.1r

10.4r

19.931.210.63.53.15.7

90.110.826.7r

44 4r

.91.71.14.92.41.0

14.11.42.8r

1.512.6

19.5.5

3.54.0

10.8r

.7

11.49.26.42.6

17.9.6

2.4

1.18.53.8

.616.93.93.03.34.9

.4

.6

.0

.7

2.3.7.4

1.2

85.7r

12.58.7

20.7r

.91.1.1

22.519.2

.0

82.3r

531.9r

206.5r

9.7r

19.930.010.74.33.16.2

87.111.324.4r

43.3.7

1.1.5

5.01.81.2

13.0r

1.42.9r

1.414.3

20.3.7

3.54.1

11.5r

.6

103.7r

12.310.07.12.6

17.6.8

2.6

1.49.04.0

.718.74.13.63.83.5

.4

.9

.0

.6

1.8.4.3

L O

83.8r

8.48.4

25.3r

2.41.2r

.123.114.8

.0

72.3

535.3r

203 Dr

11.0r

18.027.512.64.5r

2.96.6

80.4r

12.9r

26.6r

5O.5r

1.21.8.7

5.12.31.9

13.32.03.3r

1.317.4

22.7r

.73.04.4

13.9r

.6

104. l r

10.913.66.42.9

16.3.7

2.6

1.79.04.4

.518.04.33.33.93.7

.4

.9

.0

.8

3.4.6.4

2.3

87.5r

12.66.1

25.r5.3r

1.3.1

23.7r

13.3.1

63.9r

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

22.1.7

2.74.8

13.3.6

12.913.76.82.9

17.3.8

2.8

1.89.444

.519.14.44.1494.5

.4

.7

.0

.9

4.21.0.3

2.8

99.211.06.3

32.49.91.4.1

25.013.1

.1

57.3

574.6

203.411.017.931.513.23.03.35.2

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

3.39.74.7

.519.35 23̂ 95.24.3

6.21.4.3

4.5

101.313.95.3

28.810.7

1.6.1

25.315.4

.1

62.2

609.2

223.37.9

18.031.414.94.72.76.3

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

126.4

14.121.76.72.8

15.41.23.0

2.99.84.2

.621.7

5.34.75.44.8

5.01.0.3

3.7

106.217.34.1

26.113.0

1.7.1

27.815.9

.1

72.3

586.0

220.011.317.433.915.25.93.06.2

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

10.1.4

124.1

15.017.86.63.1

16.11.33.0

2.610.33.8

.521.95.55.44.84.1

.6

.7

.01.0

5.21.8.3

3.1

105.314.24.0

32.011.5

1.7.1

26.215.4

.1

49.6

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-jiataare 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. As of December 1992, excludes Croatia, Bosnia and Hercegovinia, and Slovenia.6. Includes Canal Zone.7. Foreign branch claims only.8. 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

Sept. Sept. Dec?

1 Total

2 Payable in dollars3 Payable in foreign currencies . .

By typeFinancial liabilities

Payable in dollarsPayable in foreign currencies

456

789

1011

Commercial liabilitiesTrade payables L. '.)Advance receipts and other liabilities


By area or countryFinancial liabilities

12 Europe13 Belgium and Luxembourg14 France15 Germany16 Netherlands17 Switzerland18 United Kingdom

20212223242526

272829

3031

Latin America and Caribbean . .BahamasBermudaBrazilBritish West IndiesMexicoVenezuela

AsiaJapanMiddle Eastern oil-exporting countries1 .

AfricaOil-exporting countries2

32 All other3

Commercial liabilities33 Europe34 Belgium and Luxembourg35 France36 Germany37 Netherlands38 Switzerland39 United Kingdom

40 Canada

41 Latin America and Caribbean42 Bahamas43 Bermuda44 Brazil45 British West Indies46 Mexico47 Venezuela

48 Asia49 Japan50 Middle Eastern oil-exporting countries'

51 Africa ^52 Oil-exporting countries2

53 Other3

50,597

38,72811,869

29,22618,54510,681

21,3718,80212,569

20,1831,188

18,810175

2,539975534634

13,332

859

3,3591,148

018

1,533175

5,9564,887

23

133123

6,827239655684688375

2,039

879

1,65821

35021427

481123

10,9804,3141,534

453167

54,309

38,29816,011

32,95418,81814,136

21,35510,00511,350

19,4801,875

21,703495

1,7271,961552688

15,543

629

2,03410180

20799805

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

7,700331481767500413

3,568

1,040

1,7401

2059856

416221

10,4213,3151,912

619254

47,673

33,90813,765

26,23713,87212,365

21,43610,06111,375

20,0361,400

16,401347

1,3651,670474948

10,518

797

1,90479144111930

33

6,9476,308

25

149122

7,263349528660566255

3,351

1,219

1,6071

2191435

357175

10,2753,4751,647

589241

46,448

33,90312,545

24,24112,90311,338

22,20711,01311,194

21,0001,207

15,622369999

1,974466895

10,138

632

1,7835914757866122

5,9885,436

27

150122

7,700331481767500413

3,568

1,040

1,7401

2059856

416221

10,4213,3151,912

619254

49,907

36,27313,634

26,57013,83112,739

23,33710,81512,522

22,442895

16,950483

1,6792,161479

1,26010,246

1,166

1,8767812657

946162

6,3905.980

26

131122

8,425370648867659428

3,525

959

2,11028

57012810

468243

10,4743,7251,747

708254

48,990

35,38513,605

24,84412,21212,632

24,14611.08113,065

23,173973

16,434498

1,0111,850444

1,15610,790

951

96931288

826111

6,3516,051

26

7261

67

7,916326678839617516

3,266

998

2,30135

50911910

475283

11,3893,9431,784

924462

51,105

36,40214,703

25,10711,25613,851

25,99811,60514,393

25,146852

16,054547

1,2202,276519830

9,821

881

1,01850259

76440

6,9276,602

25

132121

95

8,654427657959668409

3,664

1,094

2,30633

35515915

441332

12,2294,1501,951

1,013490

53,658

38,37215,286

25,56811,16214,406

28,09012,51915,571

27,210

16,200632

1,0911,834556699

10,202

1,353

1,299465014

1,03090

6,3545,846

25

220

340

9,584479679972736571

4,293

1,001

2,4404629616214

639318

13,1994,5512,165

1,027532


2. Comprises Algeria, Gabon, Libya, and Nigeria.3. Includes nonmonetary international and regional organizations.


Nonbank-Reported Data A5(

3.23 CLAIMS ON UNAFFILIATED FOREIGNERSthe United States


Reported by Nonbanking Business Enterprises in

1

23

456789

10

111213

1415

16171819202122

23

24252627282930

313233

3435

36

37383940414243

44

45464748495051

525354

5556

57

Total


By typeFinancial claims

DepositsPayable in dollarsPayable in foreign currencies

Other financial claimsPayable in dollarsPayable in foreign currencies

Commercial claimsTrade receivablesAdvance payments and other claims


By area or countryFinancial claims

EuropeBelgium and LuxembourgFranceGermanyNetherlandsSwitzerlandUnited Kingdom

Canada

Latin America and CaribbeanBahamasBermudaBrazilBritish West IndiesMexicoVenezuela

AsiaJapanMiddle Eastern oil-exporting countries1


All other3

Commercial claims f~^Europe

Belgium and LuxembourgFranceGermanyNetherlandsSwitzerlandUnited Kingdom

Canada

Latin America and CaribbeanBahamasBermudaBrazilBritish West IndiesMexicoVenezuela

JapanMiddle Eastern oil-exporting countries'


Other

49,159

45.1613,998

27,77115.71715,182

53512,05410,862

1,192

21,38818.4252,963

19,1172 271

7,299134826526502530

3,585

2,032

16.2241,336

125654

12,699872161

1,657892

3

991

460

9.105184

1,9471,018

423432

2 377

1,781

3,27411

182460

71990293

6,0142,275

704

49372

721

57,888

53,8054,083

33,89718.50718,026

48115.39014,3061,084

23,99121.1582,833

21.4732518

7,93686

800540429523

4,649

3,581

19,5362,424

27520

15,228723

35

1,871953141

3730

600

9,540213

1.8811,027

311557

2 556

1,988

4,1179

234612

831,243

348

6,9822,655

708

45467

910

52,509

48,7113,798

27,39815,13314,654

47912,26510,976

1,289

25,11122,998

2,113

23,0812 030

7,609193803436517498

4,303

2,851

14,5001,965

81830

10,393554

32

1,579871

3

2765

583

9,824231

1,8301,070

452520

2 656

1,951

4,36430

272898

79993285

7,3121,870

974

65487

1,006

Sept.

53,424

49,6963,728

29.89117,97417,393

58111.91710,6891,228

23,53321,4092,124

21,6141 919

7.840160753301522530

4,924

3,526

15,3451.552

35851

11,816487

50

2,1601,404

4

1886

832

8,862224

1,706997338438

2 479

1,971

4,35926

24574566

1,026325

6,8261,998

775

54474

971

1995

Dec.

52,509

48,7113,798

27,39815,13314.654

47912,26510.976

1,289

25,11122,998

2.113

23,081

7,609193803436517498

4,303

2,851

14,5001,965

81830

10.393554

32

1,579871

3

2765

583

9,824231

1,8301.070

452520

2 656

1,951

4,36430

272898

79993285

7,3121,870

974

65487

1,006

Mar.

55,406

51.0074,399

30,77217,59517,044

55113,17711,290

1.887

24,63422.123

2,511

22.6731 961

8,929159

1,015320486470

5,568

5,269

13,8271,538

771,019

10,100461

40

1,8901.171

13

2775

580

9,776247

1.8031.410

442579

2 607

2,045

4,15130

273809106870308

7,1002,0101,024

667107

895

June

58,845

54,0004,845

33,99418,36417,926

43815,63013,2332,397

24,85122,276

2,575

22,8412010

9,241151679296488461

6,169

4,773

17,6442,168

841,242

13,024392

1,571852

9

1975

568

9.812239

1,6581,335

481602

2 651

2,074

4,34028

264837103

1,021313

6,8831,877

879

68883

1,054

1996

Sept.

57,230

52,5554,675

32,85718,94118,317

62413,91611,8272,089

24,37322,0102.363

22.4111 962

8,500126733272520431

5,333

4,502

17,1841,746

1131,417

12,809411

17

1,8261,001

13

17613

669

9,162213

1,5251,239

420588

2514

2,032

4,15614

290857119901302

7,2161,918

930

716142

1,091

Dec.p

61,432

56,9084,524

33,64720,22319.533

69013,42411,6291,795

27,78525 225

2,560

25,7462 039

7,746185694276493473

4,600

3,445

19,5011,452

1401,453

15,182455

23

2,2131,035

22

17314

569

10,208221

1,6411,301

539620

2 907

2,147

4,98535

2641,160

1901,094

341

8,3642,065

955

719165

1,362


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 1995Jan.—Feb.

1996r

Aug. Sept. Oct. Nov. Feb.p

37 Stocks, net purchases, or sales ( - )38 Foreign purchases39 Foreign sales40 Bonds, net purchases, or sales (—)41 Foreign purchases42 Foreign sales

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

10 United Kingdom11 Canada12 Latin America and Caribbean . . .13 Middle East1

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 Africa35 Other countries36 Nonmonetary international and

regional organizations . . . .

43 Net purchases, or sales ( - ) , of stocks and bonds


45 Europe46 Canada47 Latin America and Caribbean48 Asia49 Japan50 Africa51 Other countries

52 Nonmonetary international andregional organizations

462,950451,710

11,240

11,445

4,912-1,099-1,837

3,507-2,283

8,066-1,517

5,814-3372,503

-2,7252

68

293,533206,951

86,582

87,036

70,3181,1435,9381,463

49457,591

2,5696,1411,8695,6592,250

234246

-454

-50,291345,540395,831-48,405889,541937,946

-98,696

-97,891

-48,125

-7,812-7,634

-34,056-25,072

-32763

-805

623,760610,332

13,428

13,502

6,546

-2,3541,1041,3892,7104,1192,2215,563

-1,598906

-372-81-55

-74

421,474294,536

126,938

126,767

74,997

5,1745,1642,440882

54,6444,19722,9011,637

22,76513,694

600-330

146,055139,330

6,725

6,726

8,716

9592,045-121,0682,783730

1,77024

-4,723-2,059

50159

96,054

73,221

22,833

22,824

15,031

176-90462

-24714,6591,4342,566868

2,4791,719332114

46,13644,071

2,065

2,051

3,310

-20983

219538

2,551-2501,046-179

-1,642-791-33

-201

32,33320,911

11,422

11,443

6,174169626146125

4,295474

1,272201

3,2432,583

1762

-21

42,59942,550

75

200-109-85-13

-123475191252

-153-575104-6166

37,42423,858

13,566

13,568

8,367565381244403

6,248122

1,14465

3,6811,963109

-2

57,75856,751

1,007

1,013

447

-219116

-132144909742

-65315

511313

5-54

40,668

30,277

10,391

10,406

6,279

713-260

9359

5,316181

2,954211787

1,03745

-51

-15

65,57163,436

2,135

2,138

270

-248-5163686658704964-53267

-579-23

9

46,44034,235

12,205

12,215

5,57872

237533

-1324,232402

2,201513

3,3842,2451325

57,05156,629

451

-229-1,064

-18-160-4701,487-9994

-232-343

10-76

43,05432,825

10,229

10,229

4,770252-27148-30

4,498391

2,940412

1,6441,395

79-7

73,00370,132

2,871

2,872

3,238

532959322289

-167422

1,364-1

-2,175-1,559

-832

48,95536,603

12,352

12,356

6,620

73-274337-586,443379

3,189480

1,6611,597

89-62

Foreign securities

-58,606456,826515,432-48,7931,118,678

1,167,471

-107,399

-106,528

-57,432-6,279-9,503-27,745-5,888-1,529-4,040

-871

-7,98296,998104,980-2,192219,646221,838

-10,174

-10,304

-1,131

2,311-5,567-5,164-2,583

27-780

130

-1,22334,01635,239-5,33984,38689,725

-6,562

-6,420

-5,324882

-1,620-1,016

486-25683

-142

-1,82531,22733,052-5,419113,089118,508

-7,244

-6,718

-5,518210

-2,264902

2,457-49

1

-526

-2,47340,18542,658-5,948117,032122,980

-8,421

-8,443

-6,318

-642886

-796696

-468-1,105

22

-2,16146,83848,999-2,973104,662107,635

-5,134

-5,166

-3,174-6673,571

-4,135-633-115-646

32

-5,90241,85047,752

-10,94799,095

110,042

-16,849

-16,838

-10,740-2,269-2,020-7732,218

36-1.072

-11

-3,64347,01350,656-822

109,329110,151

-4,465

-4,513

641516

-2,267-2,829-332

34

48

73,05269,198

3,854

3,854

5,478

4271,086-334779

2,95030840625

-2,548-500

58127

47,09936,618

10,481

10,468

8,411

103184125

-1898,2161,055-623388818122243176

-4,33949,98554,324-1,370110,317111,687

-5,709

-5,791

-1,772

1,795-3,300-2,335-2,251

-7-172

82

1. 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.corporations organized to finance direct investments abroad.


Securities Holdings and Transactions/Interest and Exchange Rates A 61

3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions1

Millions of dollars; net purchases, or sales ( —) during period

Area or country 1996r

Jan.-Feb.

1996

Aug. Sept. Oct. Nov.r Dec/ Jan. Feb.p

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.R11 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

Oil-exporting countries26 Middle East2

27 Africa3

134,115

133,676

49,976591

6,1361,891

358-472

34,7546,718

252

48,609- 2

25,15223,45932,46716,9791,464

908

4399

261

133,67639,63194,045

3,0752

244,725

246,567

118,3451,48617,647-5822,343327

65.38131,7432,389

25,379-69

13,02612,42298,00141,3901,0851,368

-1,842-1,390-779

246,56786,875159,692

10,2271

47,791

47,339

15,774697

-671-125-6011,23310,7424,499571

9,72856

8,2951,377

22,89810,792

86-1,718

45246361

47,33918,07529,264

3,761-1

12,340

12,304

7,10373

467-237-282-7307,623189

-491146

3,088-3,7256,3272,924163190

36-287347

12,3043,5878,717

323

14,738

14,895

13,104489

-264116431718

7,9773,637-215

-19,359-45

-1,547-17,76720,7134,875

30622

-157-52-90

14,89517,188-2,293

4,9691

24,321

23,784

12,992-3202,813-423169

-59910,1211,231

-1,744

1,479-29926582

9,8896,629-131,181

537338-4

23,7844,83818,946

-1,8760

21,283

22,475

9,312335

3,024676-52-207801

4,735-23

12,745-682,71510,0981,3371,219-12

-1,192-1,146

-2

22,4753,84018,635

3320

47,662

46,519

14,778370

1,49985526

-5177,2655,280-780

15,228212

5,2929,72416,7447,593

-2551

1,143773252

46,51913,66232,857

2,2790

22,225

22,691

4,41038

556-671-255241

2,9141,587667

10,243-3

6,4613,7858,5404,264

29-1,198

-466-484-1

22,6918,02214,669

1,2420

25,566

24,648

11,364659

-1,227546

-346992

7,8282,912-96

-51559

1,834-2,40814,3586,528

57-520

918530362

24,64810,05314,595

2,519-1

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.


3. Comprises Algeria, Gabon, Libya, and Nigeria.

3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS1

Percent per year, averages of daily figures

Country

AustriaBelgiumCanadaDenmarkFrance2

Rate on Apr. 30, 1997

Percent

2.52.53.253.253.10

Montheffective

Apr. 1996Apr. 1995Nov. 1996Nov. 1996Jan. 1997

Country

GermanyItalyJapanNetherlandsSwitzerland

Rate on Apr. 30, 1997

Percent

2.56.75

.52.51.0

Montheffective

Apr. 1996Jan. 1997Sept. 1995Apr. 1996Sept. 1996

1. Rates shown are mainly those at which the 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 of 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

1 Eurodollars2 United Kingdom3 Canada4 Germany5 Switzerland6 Netherlands7 France8 Italy9 Belgium

10 Japan

1994

4.635.455.575.254.035.095.728.455.652.24

1995

5.936.637.144.432.944.306.43

10.434.731.20

1996

5.385.994.493.211.922.913.818.793.19

.58

1996

Oct.

5.415.933.543.041.562.823.397.993.02

.52

Nov.

5.386.273.053.091.802.923.357.403.03

.51

Dec.

5.436.313.163.131.992.993.337.223.01

.51

1997

Jan.

5.446.283.183.031.722.943.237.213.00

.53

Feb.

5.366.163.163.081.612.953.227.333.10

.54

Mar.

5.506.173.253.161.773.123.267.403.40

.55

Apr.

5.706.353.493.141.763.153.287.093.22

.55

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 June 1997

3.28 FOREIGN EXCHANGE RATES'

Currency units per dollar except as noted

Country/currency unit

Apr.

1 Australia/dollar2

2 Austria/schilling3 Belgium/franc4 Canada/dollar5 China, P.R./yuan6 Denmark/krone7 Finland/markka8 France/franc9 Germany/deutsche mark .

10 Greece/drachma

11 Hong Kong/dollar12 India/rupee..13 Ireland/pound2

14 Italy/lira15 Japan/yen16 Malaysia/ringgit17 Netherlands/guilder...18 New Zealand/dollar2. .19 Norway/krone20 Portugal/escudo

21 Singapore/dollar22 South Africa/rand23 South Korea/won24 Spain/peseta25 Sri Lanka/rupee26 Sweden/krona27 Switzerland/franc28 Taiwan/dollar29 Thailand/baht v30 United Kingdom/pound2.

MEMO31 United States/dollar3

73.16111.40933.4261.36648.63976.35615.23405.54591.6216

242.50

7.729031.394149.69

1,611.49102.182.62371.8190

59.3587.0553

165.93

1.52753.5526

806.93133.8849.1707.71611.3667

26.46525.161153.19

74.07310.07629.4721.37258.37005.59994.37634.98641.4321

231.68

7.735732.418160.35

1.629.4593.962.50731.6044

65.6256.3355

149.88

1.41713.6284

772.69124.6451.0477.14061.1812

26.49524.921157.85

78.28310.58930.9701.36388.33895.80034.59485.11581.5049

240.82

7.734535.506159.95

1,542.76108.782.51541.6863

68.7656.4594

154.28

1.41004.3011

805.00126.6855.2896.70821.2361

27.46825.359156.07

79.68410.64031.1531.33818.32945.80534.55125.11561.5118

238.38

7.732335.839166.45

1,513.66112.302.52341.6958

70.9756.3554

152.83

1.40254.6577

830.56127.2856.9876.62691.2752

27.52225.459166.23

86.97

79.66110.92331.9921.36228.32905.94284.63885.24271.5525

245.70

7.735535.882165.93

1,528.44113.982.52511.7420

70.5016.4716

156.54

1.39994.6873

841.92130.6956.7306.82831.3290

27.51625.600166.39

88.71

77.75611.28933.087

1.34948.32606.11994.77665.41451.6047

251.54

7.739735.904

163.111,567.91

117.912.49001.8023

70.0886.4589

160.53

1.40614.6402

854.07134.7957.2787.06921.3913

27.47725.726165.85

91.01

76.76811.78534.5561.35568.32276.38674.97925.65361.6747

262.42

7.747435.891158.60

1,655.00122.962.48661.8812

69.0846.6323

168.24

1.41934.4557

868.39141.8557.7727.40691.4541

27.55425.957162.56

94.52

78.74711.93234.9611.37258.32586.46285.06325.71541.6946

266.86

7.746035.885156.57

1,691.21122.772.47731.9071

69.7896.7915

170.35

1.43784.4319

882.62143.7257.8737.65021.4634

27.55125.959160.96

95.60

77.86812.05035.328

1.39428.32576.52265.13755.76721.7119

270.58

7.748335.828

155.051,694.52

125.642.50281.9256

69.2206.9932

171.77

1.44174.4417

895.57144.4858.8267.6942)i.46re

27.62926.064

162.93

96.39

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.

trade 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 1997 A72

SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference

Title and Date Issue Page

Assets and liabilities of commercial banksMarch 31, 1996 November 1996 A96June 30, 1996 November 1996 A100September 30, 1996 February 1997 A64December 31, 1996 May 1997 A64

Terms of lending at commercial banksMay 1996 August 1996 A64August 1996 November 1996 A104November 1996 February 1997 A68February 1997 May 1997 A68

Assets and liabilities of U.S. branches and agencies of foreign banksMarch 31, 1996 September 1996 A64June 30, 1996 November 1996 A108September 30, 1996 February 1997 A72December 31, 1996 May 1997 A72

Pro forma balance sheet and income statements for priced service operationsSeptember 30, 1995 January 1996 A68March 31, 1996 July 1996 A64June 30, 1996 October 1996 A64September 30, 1996 January 1997 A64

Assets and liabilities of life insurance companiesJune 30, 1991 December 1991 A79September 30, 1991 May 1992 A81December 31, 1991 August 1992 A83September 30, 1992 March 1993 A71

Residential lending reported under the Home Mortgage Disclosure Act1994 September 1995 A681995 September 1996 A68


A64

Index to Statistical Tables

References are to pages A3-A62 although the prefix "A" is omitted in this index

ACCEPTANCES, bankers {See Bankers acceptances)Assets and liabilities {See also Foreigners)

Commercial banks, 16-21Domestic finance companies, 33Federal Reserve Banks, 10Foreign-related institutions, 20

AutomobilesConsumer credit, 36Production, 44, 45

BANKERS acceptances, 5, 10, 22, 23Bankers balances, 16-21. {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, 16-21Federal Reserve Banks, 10

Central banks, discount rates, 61Certificates of deposit, 23Commercial and industrial loans

Commercial banks, 16-21Weekly reporting banks, 18

Commercial banksAssets and liabilities, 16-21Commercial and industrial loans, 16-21Consumer loans held, by type and terms, 36Deposit interest rates of insured, 15Real estate mortgages held, by holder and property, 35Time and savings deposits, 4

Commercial paper, 22, 23, 33Condition 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, 16—21Depository institutions

Reserve requirements, 8Reserves and related items, 4, 5, 6, 12

Deposits {See also specific types)Commercial banks, 4, 16—21Federal Reserve Banks, 5, 10Interest rates, 15

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, 29Federal 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, 6, 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, 11Federal Reserve notes, 10Federally sponsored credit agencies, 30Finance companies

Assets and liabilities, 33Business credit, 33Loans, 36Paper, 22, 23

Float, 5Flow of funds, 37^1Foreign 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, personal and national, 42, 48, 49Industrial production, 42, 44Insurance companies, 27, 35Interest rates

Bonds, 23Consumer credit, 36Deposits, 15Federal 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, 32Investments {See also specific types)

Commercial banks, 4, 16—21


hi

Investments—ContinuedFederal Reserve Banks, 10, 11Financial institutions, 35

LABOR force, 42Life insurance companies (See Insurance companies)Loans (See also specific types)

Commercial banks, 16-21Federal Reserve Banks, 5, 6, 7, 10, 11Financial institutions, 35Insured or guaranteed by United States, 34, 35

MANUFACTURINGCapacity utilization, 43Production, 43, 45

Margin requirements, 24Member banks (See also Depository institutions)

Federal funds and repurchase agreements, 6Reserve requirements, 8

Mining 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, 16-21, 35Terms, yields, and activity, 34Type of holder and property mortgaged, 35

Repurchase agreements, 6Reserve requirements, 8Reserves

Commercial banks, 16-21Depository institutions, 4, 5, 6, 12Federal Reserve Banks, 10U.S. reserve assets, 51

Residential mortgage loans, 34, 35Retail credit and retail sales, 36, 42

SAVINGFlow of funds, 3 7 ^ 1National 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, 16-21Trade, foreign, 51Treasury cash, Treasury currency, 5Treasury deposits, 5, 10, 25Treasury operating balance, 25

UNEMPLOYMENT, 42U.S. government balances

Commercial bank holdings, 16-21Treasury deposits at Reserve Banks, 5, 10, 25

U.S. government securitiesBank holdings, 16-21,27Dealer 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, 18Wholesale (producer) prices, 42, 47

YIELDS (See Interest rates)


A66

Federal Reserve Board of Governorsand Official Staff

ALAN GREENSPAN, ChairmanALICE M. RIVLIN, Vice Chair

EDWARD W. KELLEY, JR.SUSAN M. PHILLIPS

OFFICE OF BOARD MEMBERS

JOSEPH R. COYNE, Assistant to the BoardDONALD J. WINN, Assistant to the BoardTHEODORE E. ALLISON, Assistant to the Board for Federal

Reserve System AffairsLYNN S. FOX, Deputy Congressional LiaisonWINTHROP P. HAMBLEY, Special Assistant to the BoardBOB STAHLY MOORE, Special Assistant to the BoardDIANE E. WERNEKE, Special Assistant to the BoardPORTIA W. THOMPSON, Equal Employment Opportunity

Programs Adviser

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 CounselROBERT DEV. FRIERSON, Assistant General CounselKATHERINE H. WHEATLEY, Assistant General Counsel

OFFICE OF THE SECRETARY

WILLIAM W. WILES, Secretary

JENNIFER J. JOHNSON, Deputy SecretaryBARBARA R. LOWREY, Associate Secretary and Ombudsman

DIVISION OF BANKINGSUPERVISION AND REGULATION

RICHARD SPILLENKOTHEN, Director

STEPHEN C. SCHEMERING, Deputy DirectorWILLIAM A. RYBACK, Associate DirectorHERBERT A. BIERN, Deputy Associate DirectorROGER T. COLE, Deputy Associate DirectorJAMES I. GARNER, Deputy Associate DirectorHOWARD A. AMER, Assistant DirectorGERALD A. EDWARDS, JR., Assistant DirectorSTEPHEN M. HOFFMAN, JR., Assistant DirectorJAMES V. HOUPT, Assistant DirectorJACK P. JENNINGS, Assistant DirectorMICHAEL G. MARTINSON, Assistant DirectorRHOGER H PUGH, Assistant DirectorSIDNEY M. SUSSAN, Assistant DirectorMOLLY S. WASSOM, Assistant DirectorWILLIAM SCHNEIDER, Project Director,

National Information Center

DIVISION OF INTERNATIONAL FINANCE

EDWIN M. TRUMAN, Staff DirectorLARRY J. PROMISEL, Senior Associate DirectorCHARLES J. SIEGMAN, Senior Associate DirectorDALE W. HENDERSON, Associate DirectorDAVID H. HOWARD, Senior AdviserDONALD B. ADAMS, Assistant DirectorTHOMAS A. CONNORS, Assistant DirectorPETER HOOPER III, Assistant DirectorKAREN H. JOHNSON, Assistant DirectorCATHERINE L. MANN, Assistant DirectorRALPH W. SMITH, JR., Assistant Director

DIVISION OF RESEARCH AND STATISTICS

MICHAEL J. PRELL, Director

EDWARD C. ETTIN, Deputy DirectorDAVID J. STOCKTON, Deputy DirectorMARTHA BETHEA, Associate 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 A. RHOADES, 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 AFFAIRS

DONALD 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 AFFAIRS

GRIFFITH L. GARWOOD, Director

GLENN E. LONEY, Associate DirectorDOLORES S. SMITH, Associate DirectorMAUREEN P. ENGLISH, Assistant DirectorIRENE SHAWN MCNULTY, Assistant Director


LAURENCE H. MEYER

A61

OFFICE OFSTAFF DIRECTOR FOR MANAGEMENT

S. DAVID FROST, Staff DirectorSHEILA CLARK, EEO Programs Director

DIVISION OF HUMAN RESOURCESMANAGEMENT

DAVID L. SHANNON, Director

JOHN R. WEIS, Associate DirectorJOSEPH H. HAYES, JR., Assistant DirectorFRED HOROWITZ, Assistant Director

OFFICE OF THE CONTROLLER

GEORGE E. LIVINGSTON, Controller

STEPHEN J. CLARK, Assistant Controller (Programs and Budgets)DARRELL R. PAULEY, Assistant Controller (Finance)

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 DirectorJACK DENNIS, JR., Assistant DirectorEARL G. HAMILTON, Assistant DirectorJEFFREY C. MARQUARDT, Assistant DirectorFLORENCE M. YOUNG, Assistant Director

OFFICE OF THE INSPECTOR GENERALBRENT L. BOWEN, Inspector General

DONALD L. ROBINSON, Assistant Inspector GeneralBARRY R. SNYDER, Assistant Inspector General


A68 Federal Reserve Bulletin • June 1997

Federal Open Market Committeeand Advisory Councils

FEDERAL OPEN MARKET COMMITTEE

MEMBERS

ALAN GREENSPAN, Chairman

J. ALFRED BROADDUS, JR.

JACK GUYNN

EDWARD W. KELLEY, JR.

LAURENCE H. MEYER

MICHAEL H. MOSKOW

ROBERT T. PARRY

WILLIAM J. MCDONOUGH, Vice Chairman

SUSAN M. PHILLIPS

ALICE M. RIVLIN

ALTERNATE MEMBERS

THOMAS M. HOENIG

JERRY L. JORDAN

THOMAS C. MELZER

CATHY E. MINEHAN

ERNEST T. PATRIKIS

STAFF

DONALD L. KOHN, Secretary and EconomistNORMAND R.V. BERNARD, Deputy SecretaryJOSEPH R. COYNE, Assistant SecretaryGARY P. GILLUM, Assistant SecretaryJ. VIRGIL MATTINGLY, JR., General CounselTHOMAS C. BAXTER, JR., Deputy General CounselMICHAEL J. PRELL, Economist

EDWIN M. TRUMAN, Economist

JACK BEEBE, Associate Economist

ROBERT A. EISENBEIS, Associate EconomistMARVIN S. GOODFRIEND, Associate EconomistWILLIAM C. HUNTER, Associate EconomistDAVID E. LINDSEY, Associate EconomistFREDERIC S. MISHKIN, Associate EconomistLARRY J. PROMISEL, Associate EconomistCHARLES J. SIEGMAN, Associate EconomistLAWRENCE SLIFMAN, Associate EconomistDAVID J. STOCKTON, Associate Economist

PETER R. FISHER, Manager, System Open Market Account

FEDERAL ADVISORY COUNCILWALTER V. SHIPLEY, President

CHARLES E. NELSON, Vice President

WILLIAM M. CROZIER, JR., First DistrictWALTER V. SHIPLEY, Second DistrictWALTER E. DALLER, JR., Third DistrictROBERT W. GILLESPIE, Fourth DistrictKENNETH D. LEWIS, Fifth DistrictSTEPHEN A. HANSEL, Sixth District

ROGER L. FITZSIMONDS, Seventh DistrictTHOMAS H. JACOBSEN, Eighth DistrictRICHARD M. KOVACEVICH, Ninth DistrictCHARLES E. NELSON, Tenth DistrictCHARLES T. DOYLE, Eleventh DistrictWILLIAM F. ZUENDT, Twelfth District

HERBERT V. PROCHNOW, Secretary Emeritus

JAMES ANNABLE, Co-Secretary

WILLIAM J. KORSVIK, Co-Secretary


A6S

CONSUMER ADVISORY COUNCIL

JULIA W. SEWARD, Richmond, VirginiaWILLIAM N. LUND, Augusta, Maine

RICHARD S. AMADOR, LOS Angeles, CaliforniaWAYNE-KENT A. BRADSHAW, LOS Angeles, CaliforniaTHOMAS R. BUTLER, Riverwoods, IllinoisROBERT A. COOK, Crofton, MarylandHERIBERTO FLORES, Springfield, MassachusettsEMANUEL FREEMAN, Philadelphia, PennsylvaniaDAVID C. FYNN, Cleveland, OhioROBERT G. GREER, Houston, TexasKENNETH R. HARNEY, Chevy Chase, MarylandGAIL K. HILLEBRAND, San Francisco, CaliforniaTERRY JORDE, Cando, North DakotaFRANCINE C. JUSTA, New York, New YorkJANET C. KOEHLER, Jacksonville, FloridaEUGENE I. LEHRMANN, Madison, Wisconsin

ERROL T. LOUIS, Brooklyn, New YorkPAUL E. MULLINGS, McLean, VirginiaCAROL PARRY, New York, New YorkPHILIP PRICE, JR., Philadelphia, PennsylvaniaRONALD A. PRILL, Minneapolis, MinnesotaLISA RICE, Toledo, OhioJOHN R. RINES, Detroit, MichiganSISTER MARILYN ROSS, Omaha, NebraskaMARGOT SAUNDERS, Washington, D.C.GAIL SMALL, Lame Deer, MontanaYVONNE S. SPARKS, St. Louis, MissouriGREGORY D. SQUIRES, Milwaukee, WisconsinGEORGE P. SURGEON, Chicago, IllinoisTHEODORE J. WYSOCKI, JR., Chicago, Illinois

THRIFT INSTITUTIONS ADVISORY COUNCIL

DAVID F. HOLLAND, Burlington, Massachusetts, PresidentCHARLES R. RINEHART, Irwindale, California, Vice President

BARRY C. BURKHOLDER, Houston, TexasDAVID E. A. CARSON, Bridgeport, ConnecticutMICHAEL T. CROWLEY, JR., Milwaukee, WisconsinDOUGLAS A. FERRARO, Englewood, ColoradoWILLIAM A. FITZGERALD, Omaha, Nebraska

STEPHEN D. HAILER, Akron, OhioEDWARD J. MOLNAR, Harleysville, PennsylvaniaGUY C. PINKERTON, Seattle, WashingtonTERRY R. WEST, Jacksonville, FloridaFREDERICK WILLETTS, III, Wilmington, North Carolina


A70

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 or Visa. Payment from foreign residents should bedrawn on a U.S. bank.

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REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL

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ANNUAL PERCENTAGE RATE TABLES (Truth in Lending—

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additional airmail costs.THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI-

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440 pp. $9.00 each.FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY.

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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 BanksOrganization and Advisory Committees

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 Credit


A71

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 DERIVATIVE

PRODUCTS, 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 and

Donald Savage. February 1990. 12 pp.160. BANKING MARKETS AND THE USE OF FINANCIAL SER-

VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by

Gregory 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, by

James T. Fergus and John L. Goodman, Jr. July 1993.20 pp.

165. THE DEMAND FOR TRADE CREDIT: AN INVESTIGATION OF

MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES, by

Gregory E. Elliehausen and John D. Wolken. September1993. 18 pp.

166. THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET, by

Mark 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 "OPERATING

PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES,

by Stephen A. Rhoades. July 1994. 37 pp.168. THE ECONOMICS OF THE PRIVATE EQUITY MARKET, by

George 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. 32 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 Boards 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 THE

SURVEY OF CONSUMER FINANCES. January 1997.


A72

ANTICIPATED SCHEDULE OF RELEASE DATES FOR PERIODIC RELEASES OF THE BOARD OF GOVERNORS OFTHE FEDERAL RESERVE SYSTEM (PAYMENT MUST ACCOMPANY REQUESTS)

Release number and title

Weekly Releases

H.2.

H.3.

H.4.1.

H.6.

H.8.

H.IO.

H.15.

Actions of the Board:Applications and ReportsReceived

Aggregate Reserves ofDepository Institutions andthe Monetary Base3

Factors Affecting Reserve Balancesof Depository Institutions andCondition Statement ofFederal Reserve Banks3

Money Stock, Liquid Assets,and Debt Measures3

Assets and Liabilities ofCommercial Banks in theUnited States3

Foreign Exchange Rates3

Selected Interest Rates3

Monthly Releases

G.5.

G.13.

G.15.

G.17.

G.19.

G.20.

Foreign Exchange Rates3

Selected Interest Rates

Research Library—RecentAcquisitions

Industrial Production andCapacity Utilization3

Consumer Credit3

Finance Companies

AnnualUSPSrate

$55.00

$20.00

$20.00

$35.00

$30.00

$20.00

$20.00

$ 5.00

$ 5.00

No charge

$15.00

$ 5.00

$ 5.00

Annualfaxrate

n.a.

n.a.

n.a.

n.a.

n.a.

$20.00

$20.00

$ 5.00

$ 5.00

n.a.

n.a.

$ 5.00

$ 5.00

Approximatereleasedays1

Friday

Thursday

Thursday

Thursday

Friday

Monday

Monday

First of month

First Tuesday ofmonth

First of month

Midmonth

Fifth working dayof month

Fifth working dayof month

Period or date to

Week endedpreviousSaturday

Week endedpreviousWednesday


Week endedMonday ofprevious week


Week endedpreviousFriday

Week endedpreviousFriday

Previous month

Previous month

Previous month

Previous month

Second monthprevious

Second monthprevious

CorrespondingBulletin

table numbers2

1.20

1.11, 1.18

1.21

1.26

3.28

1.35

3.28

1.35

2.12,2.13

1.55, 1.56

1.51, 1.52


A73

Release number and title

Quarterly Releases

E.2.

E.7.

E.11.

E.15.

E.16.

Z.I.

Survey of Terms of BankLending to Business

List of OTC Margin Stocks

Geographical Distribution ofAssets and Liabilities ofMajor Foreign Branches ofU.S. Banks

Agricultural Finance Databook

Country Exposure LendingSurvey

Flow of Funds Accountsof the United States:Flows and Outstandings3

Annual Release

C.2. Aggregate Summaries of AnnualSurveys of Securities CreditExtension

AnnualUSPSrate

$ 5.00

No charge

$ 5.00

$ 5.00

$ 5.00

$25.00

$ 5.00

Annualfaxrate

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

Approximatereleasedays1

Midmonth ofMarch, June,September, andDecember

January, April,July, andOctober

15th of March,June,September, andDecember

End of March,June,September, andDecember


Second week ofMarch, June,September, andDecember

February

Period or date towhich data refer

February, May,August, andNovember

February, May,August, andNovember

Previous quarter


Previous quarter

Previous quarter

End of previousJune

CorrespondingBulletin

table numbers2

4.23

1.57, 1.58,1.59, 1.60

1. Please note that for some releases there is normally a certain variability in the release date because of reporting or processing procedures. Moreover,for all series unusual circumstances may, from time to time, result in a release date being later than anticipated.

2. The data in some releases are also reported in the Bulletin statistical appendix.3. These releases are also available on the Board's World Wide Web site (http://www.bog.frb.fed.us) under Domestic and International Research,

Statistical releases.n.a. Not available.


A74

Maps of the Federal Reserve System

12• SAN FRANCISCO

ALASKA

10

HAWAII

9MINNEAPOLIS

KANSAS CITY I

1 1 WMXX m

DALLAS

m7

CHICAGO •

• •ST. LOUIS

1

~ BOSTON

_ <2 • NEW YORK™ 0 •

CLEVILAND PHILADELPHIA

4 5RICHMOND

5ATLANTA

LEGEND

Both pages

• Federal Reserve Bank city

H 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

Buffalo

NEW YORK

3-C

/ N

PHILADELPHIA

4-D

•Cincinnati

CLEVELAND

5-EBaltimore

RICHMOND

6-F

Birmingham

LA

New Orleans

ATLANTA

7-G

Detroit #

CHICAGO

8-H

Louisville! TN

•MemphisLittleRock

ST. LOUIS

9-1

• Helena

MINNEAPOLIS

10-J

NE

Denver

i—

IDS

Omaha •

Oklahoma City

KANSAS CITY

11-K

San Antonio*

DALLAS

12-L

Salt Lake City

#Los Angeles

SAN FRANCISCO


A76

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. BrainardFrederick J. Mancheski

NEW YORK* 10045 John C. WhiteheadThomas W. Jones

Buffalo 14240 Bal Dixit

PHILADELPHIA 19105 Donald J. KennedyJoan Carter

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 Rebecca Hahn WindsorCharlotte 28230 Dennis D. Lowery

ATLANTA 30303 Hugh M. BrownDavid R. Jones

Birmingham 35283 D. Bruce Can-Jacksonville 32231 Patrick C. KellyMiami 33152 Kaaren Johnson-StreetNashville 37203 James E. Dalton, Jr.New Orleans 70161 Jo Ann Slaydon

CHICAGO* 60690 Lester H. McKeever, Jr.Arthur C. Martinez

Detroit 48231 Florine Mark

ST. LOUIS 63166 John F. McDonnellSusan S. Elliott

Little Rock 72203 Robert D. Nabholz, Jr.Louisville 40232 John A. WilliamsMemphis 38101 John V. Myers

MINNEAPOLIS 55480 Jean D. KinseyDavid A. Koch

Helena 59601 Matthew J. Quinn

KANSAS CITY 64198 A. Drue JenningsJo Marie Dancik

Denver 80217 Peter I. WoldOklahoma City 73125 Barry L. EllerOmaha 68102 Arthur L. Shoener

DALLAS 75201 Roger R. HemminghausCece Smith

El Paso 79999 Alvin T. JohnsonHouston 77252 I. H. Kempner, IIISan Antonio 78295 H. B. Zachry, Jr.

SAN FRANCISCO 94120 Judith M. RunstadGary G. Michael

Los Angeles 90051 Anne L. EvansPortland 97208 Carol A. WhippleSalt Lake City 84125 Gerald R. SherrattSeattle 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

Thomas C. MelzerW. LeGrande Rives

Gary H. SternColleen K. Strand

Thomas M. HoenigRichard K. Rasdall

Robert D. McTeer, Jr.Helen E. Holcomb

Robert T. ParryJohn F. Moore

CarlW. Turnipseed1

Charles A. Cerino1

Harold J. Swart1

William J. Tignanelli1

DanM. Bechter1

James M. MckeeFred R. 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. Gambsl

Kelly J. DubbertBradley C. Cloverdyke

Sammie C. ClayRobert Smith, IIIl

James L. Stulll

Mark L. Mullinixl

Raymond H. Laurence1

Andrea P. WolcottGordon R. G. Werkema2

* Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Uticaat 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 PresidentDigitized for FRASER

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

frb_061997

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