Greenbook/Tealbook

Prefatory Note The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act. 1 In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing). 2 A two-step process was used. An advanced optical character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff. Content last modified 6/05/2009. CONFIDENTIAL (FR) SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS Prepared for the Federal Open Market Committee By the Staff Board of Governors of the Federal Reserve System March 5, 1971 SUPPLEMENTAL NOTES The Domestic Economy Labor market. The labor market eased in February, with further reductions in employment and hours worked. The labor force declined even more sharply than employment and unemployment also declined. The reduction in the labor force amounted to more than 500,000 and was widespread among age and sex groups. The overall unemployment rate, at 5.8 per cent, was off 0.2 percentage point from January. LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT (Seasonally adjusted in thousands) 1971 Total labor force Armed forces Civilian labor force Employment Unemployment Jan. Feb. 86,873 86,334 2,976 83,897 78,864 5,033 2,950 83,384 78,537 4,847 Change Feb. 1971 from: Feb. 1970 Jan. 1971 795 -391 1,186 -244 1,430 -539 - 26 -513 -327 -186 SELECTED UNEMPLOYMENT RATES (Seasonally adjusted, per cent) 1970 Dec. Unemployment rates: Total Men aged 20-24 Men aged 25 and over Women aged 20 and over Teenagers 1971 Jan. Feb. 6.2 10.9 3.7 6.0 10.4 3.5 5.8 9.7 3.4 5.8 17.8 5.7 17.6 5.6 16.7 Nonfarm payroll employment declined by 95,000 in February to 70.5 million. Employment declines in the goods-producing industries, totaling about 150,000 were partly offset by moderate increases in service-type industries, primarily State and local government. After increasing in December and January, manufacturing employment declined in February by 74,000 to 18.7 million; except for the period of the GM strike, this was the lowest level since early 1966. The weakening of labor demand in manufacturing has been wide-spread and since last August, prior to the auto strike, manufacturing employment has declined more than half a million. Although the largest cuts occurred in the durable goods sector, employment has declined since August in all but 2 of 21 manufacturing industries. NONFARM PAYROLL EMPLOYMENT (Seasonally adjusted, in thousands) Change August 1970 February 1971 Total 70,414 70,514 100 Manufacturing 19,271 18,737 -534 11 ,1 34 l0)6e3 -451 8,137 8,054 - 83 619 3,305 4,520 14,912 15,191 12,596 621 3,164 4,481 15,139 15,527 12,845 2 -141 -39 227 336 249 Durable goods Nondurable goods Nonmanufacturing: Mining Construction Transportation Trade Services and finance Government The average workweek was off 0.2 hours in February for rank-and-file workers on private nonfarm payrolls and 0.4 hours for Workweek declines were wide- production workers in manufacturing. spread, probably reflecting in part the effect of a holiday (Lincoln's birthday) during the survey week. Retail sales. Retail sales in February on the basis of four weeks data, have risen about 3/4 per cent from January. Estimated durable goods sales are 1/2 per cent and estimated nondurables goods are nearly 1 per cent. Sales in the general merchandise category were especially strong and rose nearly 2 per cent. RETAIL SALES (Per cent change from preceding period, seasonally adjusted) All stores Durable Auto Furniture & appliance Nondurable Food General merchandise GAF Total less auto, bldg. material, farm equipment, hardware Feb. 1971 from 1970 QIV average 1970 Dec. 1971 Jan. 1971 Feb. .8 2.7 5.4 -4.0 .0 1.5 -1.2 1.1 4.5 8.5 .2 - .3 .75 .4 1.4 .7 .9 .6 1.8 2.0 4.6 9.9 -1.7 .9 .7 3.5 1.3 1.5 -1.4 - .2 - .8 2.0 .7 - .3 .8 The Domestic Financial Situation Bank credit. Commercial bank credit, adjusted for transfers of loans between banks and their affiliates (and also for System matched sale-purchase transactions temporarily outstanding at the end of February) is now estimated to have increased at a slightly lower rate during February than that indicated in the Greenbook -- 11.2 per cent compared with 12.3 per cent (III-5). While total loans and loan components are unchanged, total investments are estimated to be $400 million lower than originally shown. The net reduction in investment holdings also reflects some shift in composition. Holdings of U. S. Treasury securities are now estimated at a level $100 million above the Greenbook firgure -- or increasing at an annual rate of 24.7 per cent compared with 22.6 per cent. On the other hand, holdings of municipal and Federal agency issues are $500 million below the earlier figure -- or at an annual rate of 13.6 per cent compared with 20.4 per cent. Monetary aggregates. Estimates of the growth in monetary aggregates in February have been revised slightly from those published in the Greenbook. The aggregates are now estimated to have expanded at the following annual rates: M 1 (narrowly defined money supply) - 14 per cent M2 (M1 plus time and savings deposits at commercial banks other than large CD's) - 21.8 per cent Adjusted bank credit proxy - 12.9 per cent Commercial Bank Time and Savings Deposits - 28.0 per cent Large CD's - 11.3 per cent Other Time and Savings Deposits - 30.5 per cent Consumer credit. Consumer instalment credit outstanding rose $1.0 billion in January, seasonally adjusted annural rate. Moderate increases occurred in nonautomotive consumer goods credit and personal loans; auto credit contracted -rate -- for the fourth month in a row. although at a reduced On an overall basis, the rate of increase in instalment credit was considerably larger than the $0.3 billion advance (annual rate) in December, but was far below the $4.6 billion increase in January 1970. Seasonally adjusted extensions of instalment credit moved up sharply in January and were only slightly below the peak months of early last summer. improvement in The recovery in auto credit that accompanied the sales was the primary factor in the rise. Repayments rose to a new high. CONSUMER INSTALMENT CREDIT EXTENDED AND REPAID (Seasonally adjusted annual rates, in billions of dollars) Repaid Net Change 102.2 98.2 4.0 QII QIII QIV 104.7 106.9 102.1 100.1 102.8 103.6 4.6 4.1 -1.5 January 107.0 105.9 Extended 1970: 1971: QI 1.0 -6- INTEREST RATES 1970 Highs 1971 Lows Feb. 8 Mar. 4 Short-Term Rates Federal funds (weekly averages) 9.39 (2/18) 3-month Treasury bills (bid) 7.93 Bankers' acceptances 8.75 Euro-dollars 10.50 Federal agencies 8.30 Finance paper 8.25 CD's (prime NYC) Most often quoted new issue 6.75 Secondary market 9.25 (1/6) (1/13) (1/9) (1/9) (2/1) 4.82 (12/30) 4.09 (2/3) 4.74 5.25 6.50 4.81 5.38 (12/17) 3.82 (12/31) 4.12 (12/31) 5.89 (12/18) 3.90 (2/5) (12/10) 4.75 3.41 (3/3) 3.34 3.75 5.19 3.33 4.00 (10/30) 5.50 (11/25) 4.50 (2/3) (1/23) 5.38 (12/23) 4.60 (2/3) 4.00 3.90 (1/5) (1/8) (1/28) 4.78 (12/17) 3.85 e ! 5.50 (12/4) 4.25 402 5.63 (12/4) 4.62 5.12 (12/18) 4.22 (2/5) 3.44 3.88e ' 4.25 3.66 Most often quoted new issue 7.00 (10/7) Secondary market 9.38 (1/23) 5.50 (12/23) 4.50 (2/3) 5.50 (12/23) 4.75 (2/3) 4.00 3.70 4.74 (12/31) 3.90 3.63 5.60 (1/9) 5.50 (12/23) 4.50 (2/3) 2.95 (12/17) 2.45 (2/5) 4.38 2.35 8.30 (1/7) 7.73 (5/26) 5.85 (12/4) 5.69 6.15 (12/16) 6.08 5.26 6.20 8.60 (6/24) 9.47 (8/28) 7.47 (12/29) 7.08 8.57 (3/10) 8.44 7.14 8.40 9.30 (6/19) 7.68 (12/18) 6.91 (2/5) 7.79 Municipal Bond Buyer Index Moody's Aaa 7.12 (5/28) 6.95 (6/18) 5.33 (12/10) 5.27 (2/4) 5.15 (12/10) 5.10 (2/5) 5.37 5.15 Mortgage--implicit yield in FNMA biweekly auction 1/ 9.36 (1/2) 8.36 (12/28) 7.43 (3/1) 6-month Treasury bills (bid) 7.99 Bankers' acceptances 8.88 Commercial paper (4-6 months) 9.13 Federal agencies 8.50 (1/13) CD's (prime NYC) 1-year Treasury bills (bid) 7.62 (1/30) CD's (prime NYC) Most often quoted new issue 7.50 (9/16) Prime municipals Intermediate and Long-Term Treasury coupon issues 5-years 20-years Corporate Seasoned Aaa Baa New Issue Aaa 1/ 7.96 (1/25) Yield on 6-month forward commitment after allowance for commitment fee and required purchase and holding of FNMA stock. Assumes discount on 30-year e--estimated loan amortized over 15 years, International Developments To clarify the references on pages IV-9 and IV-13 to guilder-dollar swaps by the Netherlands Bank with Dutch commercial banks, it may be noted that these swaps, unlike those of the Bank of England, involve spot purchases of dollars by the central bank with forward sale. The Netherlands Bank's swaps, which began last October, have facilitated the use of dollar borrowing abroad by commercial banks to relieve a seasonally tight liquidity position in the Netherlands. At the maturity of such a swap, the commercial bank needs to acquire guilders to fulfill its contract. Unless the central bank decides to make a new swap, the financial market would be put under renewed strain. Some swaps were in fact rolled over in January, and in February new swaps were made as seasonal tightness due to tax payments persisted. CORRECTIONS: Page II-30 Table, line 2, used cars, June to September should be minus 13.2, December 1970 to January 1971 should be minus 24.2. Page III-9, table for March 1 change 7.48 to 7.43. Page III-10, line 9 change 7.48 to 7.43. Page III-10, line 10 change December to November. Erratum: Page 111-17 line 3 erroneously stated the amount of System purchases of over 5-year coupon issues since the last meeting at $38 million. The correct number is $381 million. Appendix A, Page 1, paragraph 3 last line should include ... similar proportion expect a modest increase. and a SUPPLEMENTAL APPENDIX A: BANK LENDING PRACTICES SURVEY* The 125 banks participating in the February 15, 1971, Survey of Bank Lending Practices generally echoed the same responses reported in the previous survey. Ample fund availability in connection with sluggish loan demands induced banks to ease further their lending policies in nearly all areas. Loan Demand About 65 per cent of the participants had experienced further slackening in loan demand and about a third foresaw little improvement over the next three months. Roughly 10 per cent of the respondents, however, had experienced an increase in loan requests and nearly a fifth predicted some future strengthening. Lending Terms and Conditions As would be expected, core than four-fifths of the panel reported a reduction in interest rates charged since the November survey. However, about 15 per cent had not indicated altering their terms despite several general reductions in the prime rate during the three months covered by the survey. Banks also eased their compensating balance requirements and were more flexible in their maturity restraints on term loans. As in the previous survey, bank concern about credit quality has resulted in no relaxation of standards of credit worthiness. The net responses of banks in reviewing credit lines, shown in Table 2A, indicate a substantial easing in lending policies relative to the type of customer. New customers in particular were experiencing a much less restrictive atmosphere, and nonlocal customers were reported to be subject to considerably less screening than had been the case. The dramatic change in lending policies over the past two reports is demonstrated by the fact that therehas been no period since the initiation of the survey in 1964 in which banks reported this magnitude of easing in two consecutive surveys. Lending to Noncaptive Finance Companies Terms imposed on loans to financial institutions were not eased nearly as much as those on commercial and industrial loans. Only about half of the respondents reported any easing in interest rates and few banks (less than 10 per cent) had relaxed their enforcement of balance requirements. About 25 per cent of the respondents, however, were more willing to establish or enlarge existing credit lines which reflected a continuation of the pattern reported in November. *Prepared by Marilyn Barron, Research Assistant, Banking Section, Division of Research and Statistics. -2Willingness to Make Other Types of Loans Due to the continued weakness in loan demands and increased fund availability, banks have become much more aggressive in seeking new loans. More than one-half are more inclined to extend term loans to businesses, although some banks report an interest in loans primarily of less than five years. Consumer installment loans continue to be quite attractive to most bankers as would be expected. Half of the respondents report continued interest in mortgage loans, especially on single-family dwellings. Twenty-five to 30 per cent of the participants are more willing to make mortgage loans for multi-family or other types of structures. Variation by Size of Bank No significant differences were evident in the responses of banks with more than $1 billion in deposits compared with banks with deposits of less than $1 billion. But the smaller banks appeared to be somewhat less aggressive in soliciting new loans and were a little more cautious in relaxing their lending policies. Supplemental responses to the survey underscored the qualityconsciousness prevalent at most banks and noted in previous surveys. Some banks did volunteer comments, that despite their highly liquid positions, they have maintained a "wait and see" attitude and are trying to keep most of their lending at the shorter end of the maturity spectrum. NOT FOR QUOTATION OR PUBLICATION TABLE I PAGE 01 SURVEY OF CHANGES IN BAhK LENDING PRACTICES 1/ AT SELECTED LARGE BANKS IN THE U.S. (STATUS OF POLICY ON FEBRUARY 15, 1971 COMPARED TO THREE MONTHS EARLIER) (NUMBER OF BANKS & PERCENT OF TOTAL BANKS REPORTING) QUARTERLY MUCH STRONGER TOTAL BANKS PCT BANKS PCT MODERATELY STRONGER ESSENTIALLY UNCHANGED MODERATELY WEAKER BANKS PCT BANKS PCT BANKS 9.6 31 24.8 72 57.6 62 49.6 39 31.2 PCT MUCH WEAKER BANKS PCT STRENGTH OF DEMAND FOR COMMERCIAL AND INDUSTRIAL LOANS (AFTER ALLOWANCE FOR BANK'S USUAL SEASONAL VARIATION) COMPARED TO THREE MONTHS ANTICIPATED DEMAND AGO IN NEXT 3 MONTHS 125 100.0 12 125 100.0 21 MUCH ANSWERING QUESTION BANKS LENDING TO NONFINANCIAL TERMS ANC STANDARDS OR SUPPORTING BALANCES OF CREDIT WORTHINESS OF TERM LOANS CREDIT LINES OR ESTABLISHED CUSTOMERS SERVICE AREA CUSTOMERS NONLOCAL BANKS PCT MODERATELY EASIER POLICY BANKS BANKS PCT PCT MUCH EASIER OOLICY BANKS PCT 124 100.0 0 0.0 0 0.0 18 14.5 61 49.2 124 100.0 0 0.0 2 1.6 91 73.4 31 124 100.0 1 0.8 6 4.8 111 89.6 124 100.0 0 0.0 1 0.8 91 125 100.0 0 0.0 1 0.8 125 100.0 0 0.0 3 125 100.0 125 100.0 45 36.3 25.0 0 0.0 6 4.8 0 0.0 73.4 30 24.2 2 1.6 68 54.4 49 39.2 7 5.6 2.4 48 38.4 64 51.2 10 8.0 1 0.8 66 52.8 52 41.6 6 4.8 4 3.2 71 56.8 46 36.8 3 2.4 LOAN APPLICATIONS NEW CUSTOMERS LOCAL PCT ESSENT IALLY UNCHANGED POLICY CONDITIONS: COMPENSATING REVIEWING BANKS MODERATELY FIRMER POLICY BUSINESSES INTEREST RATES CHARGED MATURITY PCT FIRMER POLICY 16.8 SERVICE AREA CUSTOMERS I/ SURVEY OF LENDING PRACTICES AT 125 LARGE AS OF FEBRUARY 15, 1971. BANKS REPORTING IN THE FEDERAL RESERVE OUARTERLY INTEREST R4TE SURVEY NOT FOR QUOTATION OR PUBLICATION I TABLE (COhTINUED) MODERATEL Y FIRMER MUCH AN SWER ING QUESTION BANKS PCT FIRMER POL ICY BANKS PAGE 02 PCLICY PCT BANKS PCT ESSENTIALLY UNC HANGED POLICY MODERATELY EASIFR POLICY BANKS BANKS PCT PCT MUCH EASIER POL I CY BANKS PCT FACTORS RELATING TO APPLICANT 2/ VALUE AS DEPOSITOR OR SOURCE OF COLLATERAL BUSINESS 124 100.0 94 75.9 23 18.5 1 0.8 INTENDED USE OF THE LOAN 125 100.0 89 71.2 31 24.8 2 1.6 INTEREST RATES CHARGED 124 100.0 0 0.0 O 0.0 57 45.9 41 33.1 26 21.0 COMPENSATING OR SUPPORTING BALANCES 124 100.0 0 0.0 1 0.8 117 94.4 6 4.8 0 0.0 ENFORCEMENT OF BALANCE REQUIREMENTS 124 100.0 5 4.0 109 87.9 10 8.1 0 0.0 ESTABLISHING NEW OR LARGER CREDIT LINES 124 100.0 1 0.8 70 56.5 49 39. 5 2 1.6 LENDING TO "NONCAPTIVE" FINANCE COMPANIES TERMS AND CONDITIONS; ANSWERING QUESTION BANKS TYPES WILLINGNESS TO MAKE OTHER BANKS PCT MODERATELY LESS WILLING ESSENTIALLY UNCHANGED MODERATELY MORE WILL ING BANKS BA4KS BANKS PCT PCT PCT CONSIDERABLY MORE WILLING BANKS PCT OF LOANS TO BUSINESSES 125 100.0 0 0.0 1 0.8 55 44.0 66 52.8 3 2.4 INSTALMENT LOANS 124 100.0 0 0.0 0 0.0 57 45.9 56 45.2 11 8.9 121 100.0 1 0.8 0 0.0 52 43.0 53 43.8 15 12.4 120 100.0 1 0.8 0 0.0 89 74.2 27 22.5 3 2.5 ALL OTHER MORTGAGE LOANS 122 100.0 1 0.8 0 0.0 82 67.2 35 28.7 4 3.3 LOANS WITH BANKS 125 100.0 1 0.8 O 0.0 74 59.2 47 37.6 3 2.4 122 100.0 0 0.0 O 0.0 88 72.1 31 25.4 3 2.5 TERP LOANS CONSUMER SINGLE FAMILY MORTGAGE MULTI-FAMILY PARTICIPATION CORRESPONDENT LOANS TO 2/ PCT CONSIDERABLY LESS WILLING MORTGAGE BROKERS LOANS LOANS FOR THESE FACTORS, FIRMER MFANS THE FACTORS WERE CONSIDERED MORE CREDIT REQUESTS, AND EASIER MEANS THEY WERE LESS IMPORTANT. IMPORTANT IN MAKING DECISIONS FOR APPROVING NOT FOR QUOTATION OR PUBLICATION COMPARISON TABLE 2 PAGE 03 OF QUARTERLY CHANGES IN BANK LENDING PRACTICES AT BANKS GROUPED BY SIZE OF TOTAL (STATUS OF POLICY ON FEBRUARY 15, 1971, COMPARED TO THREE MONTHS EARLIER) (NUMBER OF BANKS IN EACH COLUMN AS PER CENT OF TOTAL BANKS ANSWERING QUESTION) SIZE OF BANK MUCH TOTAL t$ & OVER UNDER $1 STRONGER $1 & OVER UNDER $1 -- TOTL CEPDSITS DEPOSITS 1/ IN BILLIONS MODERAT EL Y STRONGER ESSENTIALLY Ut CHAN GED MODERATELY WEAKER S1 & UNDER OVER Sl $1 E OVER $1 & OVER MODERATELY FIRMER ESSENTIALLY UNCHANGED MODERATELY WEAKER $1 & OVER $1 C OVER UNDER SI UNDER $1 MUCH WEAKER $1 C OVER UNDER 1I STRENGTH OF OENANO FOR COMMERCIAL AND INDUSTRIAL LOANS (AFTER ALLOWANCE FOR BANK'S USUAL SEASONAL VARIATION) COMPARED TO THREE MONTHS ANTICIPATED DEMAND AGO IN NEXT 3 MONTHS 100 100 100 100 TOTAL $1 & OVER UNDER $1 MUCH FIRMER $1 C UNDER OVER $1 $1 & OVER UNDER $1 UNDER S1 UNDER $S MUCH WEAKER $1 & OVER UNDER $1 LENDING TO NONFINANCIAL BUSINESSES TERMS ANC CONDITIONS: 100 100 0 0 17 100 100 2 1 76 STANDARDS OF CREDIT WORTHINESS 100 100 MATURITY OF TERN LOANS 100 100 ESTABLISHED CUSTOMERS 100 NEW INTEREST RATES CHARGED COMPENSATING OR SUPPORTING BALANCES 38 35 0 0 100 6 6 100 100 9 7 100 100 7 3 100 100 4 1 REVIEWING CREDIT LINES OR LOAN APPLICATIONS CUSTOMERS LOCAL SERVICE AREA CUSTOMERS NONLOCAL 1/ SERVICE AREA CUSTOMERS 60 39 71 SMALL BANKS (DEPOSITS AND 54 LARGE BANKS (DEPOSITS OF $1 BILLION OR MORE) SURVEY OF LENDING PRACTICES AT FEBRUARY 15, 1971. $1 BILLIONI REPORTING IN THE FEDERAL RESERVE QUARTERLY INTEREST RATE SURVEY AS OF 35 OF LESS THAN NOT FOR QUOTATION OR PUBLICATION TABLE 2 (COMTINUED) OF BANK MUCH FIRMER POLICY SIZE NUMBER ANSWERING QUESTION $1 & OVER FACTORS RELATING TO APPLICANT UNDER $1 UNDER $1 -TOTAL DEPOSITS IN BILLIONS MODERATELY ESSENTIALLY MOOERATELY FIRMER EASIER UNCHAN GED PCLICY POLICY POLICY $1 & OVER UNDER $ $1 6 OVER UNDER $1 100 100 INTENDED 100 100 100 100 43 48 100 100 92 96 100 100 84 91 100 100 45 66 TERMS USE OF THE LOAN TO "NONCAPTIVE" $1 & OVER UNDER $1 MUCH FASIFR POLICY $1 E OVER UNDER Sl 2/ VALUE AS DEPOSITOR OR SOURCE OF COLLATERAL BUSINESS LENDING FINANCE COMPANIES AND CONDITIONS: INTEREST RATES CHARGED COMPENSATING ENFORCEMENT OR SUPPORTING BALANCES OF BALANCE REQUIREMENTS ESTABLISHING NEW OR LARGER CREDIT LINES NUMBER ANSWERING QUESTION $1 & OVER WILLINGNESS TO MAKE OTHER TYPES CONSUMER UNDER $1 ESSENTIALLY UNCHANGED t$1 OVER St & OVER UNDER $1 100 0 0 100 100 0 100 100 MORTGAGE LOANS 100 LOANS WITH BANKS INSTALMENT LOANS PARTICIPATION CORRESPONDBIT BROKERS LOANS UNDER $1 23 MODERATELY MORE WILLING $1 & OVER UNDER SI 20 CONSIDERABLY MORE WILL ING $1 E OVFR UNDER $1 OF LOANS 46 MULTI-FAMILY MORTGAGE LOANS TO $1 G OVER MODERATELY LESS WILLING 1 SINGLE FAMILY MORTGAGE LOANS ALL OTHER UNDER $1 CONSIDERABLY LESS MILLI NG 0 TERM LOANS TO BUSINESSES 2/ Sl & OVER PAGE 04 50 55 47 42 48 0 45 41 46 0 0 71 29 17 100 0 0 60 40 20 100 100 0 0 100 100 0 0 100 100 100 0 FOR THESE FACTORS, FIRMER MEANS THE FACTORS MERE CONSIDERED MORE IMPORTANT CREDIT REOUESTS, AND EASIER MEANS THEY MERE LESS IMPORTANT. IN MAKING 4 1 59 0 4 57 4 1 DECISIONS 43 FOR APPROVING TABLE 2A NET RESPONSES OF BANKS IN LENDING PRACTICES SURVEYS (In per cent) Nov. Feb. 1970 1971 Feb. 1969 May 1969 Aug. 1969 Nov. 1969 Feb. 1970 May 1970 Aug. 1970 54.4 60.0 30.6 28.0 -1.6 12.1 16.0 -56.8 -54.4 49.2 41.8 5.7 8.9 -8.0 11.2 13.6 -32.0 86.2 64.3 32.8 30.3 91.0 75.6 41.4 42.3 78.3 68.3 40.6 42.2 49.6 57.6 36.0 35.2 34.4 38.4 22.4 17.6 -12.8 18.4 20.8 10.4 15.2 -73.6 -85.5 24.8 -0.8 -23.4 22.4 4.8 0.8 14.4 -7.2 -25.0 32.5 47.2 61.7 j80.2 30.9 46.7 49.5 71.3 51.6 81.4 48.8 68.8 36.8 60.8 32.0 56.5 18.4 34.4 14.4 31.4 5.6 17.6 5.6 22.6 1.6 6.4 -3.2 16.1 58.6 54.5 67.2 71.6 65.0 68.5 46.0 39.2 29.9 21.6 18.5 12.0 18.5 9.6 53.3 22.9 29.5 54.9 50.8 27.9 42.6 62.4 48.0 35.0 42.3 62.0 19.3 26.7 34.7 48.4 14.5 21.7 30.7 32.2 -16.0 6.4 16.0 21.6 9.7 -41.6 -54.1 1.6 - 4.C 12.1 6.4 - 4.1 23.4 22.6 -10.4 -38.7 Term loans to businesses Consumer instalment loans Single-family mortgage loans Multi-family mortgage loans 48.8 4.2 30.8 40.1 64.3 17.2 45.5 57.5 65.9 26.9 49.7 58.3 48.0 24.2 30.4 36.3 21.6 17.7 19.7 21.8 All other mortgage loans 42.5 62.0 62.5 42.3 22.2 9.9 18.7 34.2 38.4 40.0 48.4 59.3 31.5 36.1 10.6 20.5 5.6 20.3 Strength of loan demand- / (compared to 3 months ago) Anticipated demand in next 3 months -13.6 LENDING TO NONFINANCIAL BUSINESSES2Terms and Conditions Interest rates charged Compensating or supporting balances Standards of credit worthiness Maturity of term loans Reviewing Credit Lines Established customers New customers Local service area customers Nonlocal service area customers -32.0 -40.8 -33.6 -16.8 -44.0 -56.8 -45.8 -35.2 Factors Relating to Applicant (Net percentage indicating more important) Value of depositor as source of business Intended use of loan LENDING TO NONCAPTIVE FINANCE COMPANIES- --14.5 -9.6 -24.0 / Terms and Conditions Interest rates charged Compensating or supporting balances Enforcement of balance requirements Establishing new or larger credit lines WILLINGNESS TO MAKE OTHER LOANS 3 / 8.8 -28.8 12.8 -24.2 -4.1 --8.2 -11.6 -25.6 --12.4 3.4 -54.4 -54.1 -55.L -24.2 5.0 -15.4 -31.2 Participation loans with correspondent banks Loans to brokers -2.4 10.61 -9.6 -39.: -0.9 -27.! 1/ Per cent of banks reporting stronger loan demand minus per cent of banks reporting weaker loan demand. Positive number indicates net stronger loan demand, negative number indicates net weaker loan demand. 2/ Per cent of banks reporting firmer lending policies minus per cent of banks reporting weaker lending policies. Positive number indicates net firmer lending policies, negative indicates net easier lending policies. 3/ Per cent of banks reporting less willingness to make loans minus per cent of banks more willing to make loans. Positive number indicates less willingness, negative number indicates more willingness. 

Federal Reserve (1971, March 8). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19710309_part1

@misc{wtfs_greenbook_19710309_part1,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1971},
  month = {Mar},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19710309_part1},
  note = {Retrieved via When the Fed Speaks corpus}
}