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. 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Content last modified 6/05/2009. CONFIDENTIAL (FR) SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS Prepared for the Federal Open Market Committee September 14, 1973 By the Staff Board of Governors of the Federal Reserve System SUPPLEMENTAL NOTES The Domestic Economy Book value of retail inventories rose at a $2.1 billion annual rate in July--off sharply from the $9.5 billion in June. For total manufacturing and trade, the July rate of increase was $18.0 billion and the second quarter average rate was $22.9 billion. Manufacturing and trade sales rose rapidly in July and the inventory-sales ratio declined from 1.44 in June to 1.41 in July--quite low by historical standards, On a quarterly average sales basis, the ratio went from 1.46 in the first quarter to 1.45 in the second. Manufacturers anticipated, when surveyed in June, that the book value of their inventories would increase at an annual rate of $10.4 billion in the current quarter and $7.2 billion in the fourth quarter. The actual second quarter rate of $11.2 billion was consid- erably greater than had been anticipated in the earlier surveys. Manufacturers expect sales to increase by 1.7 percent in the third quarter and to slip by 0.1 percent in the fourth. Inventory- shipments ratios of 1.60 and 1.63 are expected for the third and fourth quarters, respectively, compared with an actual second quarter ratio of 1.60. As described in the Greenbook, the Board's index of industrial production declined 0.2 percent from July to August because of a 23 percent curtailment in auto and truck assemblies resulting from special circumstances. Apart from this sector, the index increased 0.5 percent. sharply. In early September, output of autos and trucks increased The following table presents industrial production, by major groups. INDUSTRIAL PRODUCTION (1967=100, seasonally adjusted) 1972 Aug. June 1973 July Aug. Total index 116.3 125.6 126.5 126.2 Consumer goods 124.3 131.8 132.3 130.3 Business equip. Defense equip. 107.2 78.1 122.1 123.5 123.9 .3 15.6 80.2 81.8 81.9 .1 4.9 Materials steel 118.8 108.1 129.1 119.9 130.6 120.0 130.9 120.0 .2 Autos* 8.5 10.2 *Seasonally adjusted annual rat e. 10.3 8.0 Percent change from Month ago A year ago -.2 8.5 -1.5 4.8 10.2 -- -22.3 11.0 -5.9 New homes sold by merchant builders dropped a tenth further in July, to a seasonally adjusted annual rate of 596,000 units, the lowest since December 1970. Partly reflecting this development, builders' stocks of homes for sale advanced to a record 9 months' supply at the July rate of sales. Even so, the median price of new homes sold con- tinued higher and, at $33,700, was more than a fifth above a year earlier and still above the median price of homes for sale. The median price of existing homes sold also rose further in July--to $30,020, with sales of such homes remaining comparatively strong at a level nearly a tenth above a year earlier. - 3 SALES, Homes sold 1/ STOCKS AND PRICES OF NEW SINGLE FAMILY HOMES Homes for sale 2/ Months' supply (Thousands of units) Median price of: Homes sold Homes for sale (Thousands of dollars) 1972 QIII 733 386 6.3 28.0 27.1 QIV 761 402 6.3 29.1 28.3 QII (p) 733 684 426 432 7.0 7.6 30.4 32.7 29.4 31.2 May (r) June 706 669 424 432 7.2 7.8 32.0 33.2 30.9 31.2 July 596 446 9.0 33.7 31.4 1973 QI 1/ 2/ SAAR. SA, end of period. The Domestic Financial Situation Only fragmentary date are available for deposit flows at nonbank thrift institutions in early September. At a sample of 17 large New York City mutual savings banks, net deposit outflows during the first 5 business days of September were slightly below those recorded during the comparable period in August. Moreover, the FHLBB staff estimates that S&L's experienced a deposit inflow of about $100 million during the first 10 days of the month. (At the request of the FHLBB, the intra-monthly estimates are to be considered confidential and for internal use only.) Average interest rates on new commitments for conventional mortgages on new homes increased 30 basis points further in August, At 8.70 percent, according to the HUD(FHA) field office opinion survey. the rate exceeded the previous high of 8.60 percent registered in mid1970. Average rates for loans on existing homes also rose sharply--by 35 basis points to a new high of 8.75 percent. Even so, the average spread favoring gross yields on new-home mortgages over new issues of high-grade utility bonds remained relatively narrow. (Data are confidential until released by HUD.) The FHA secondary market yield was not reported for August due to the small number of transactions at the new regulatory ceiling rate of 8.50 percent that became effective on August 25. AVERAGE RATES AND YIELDS ON NEW-HOME MORTGAGES Primary market: Conventional loans Spread Level (basis points) (percent) Secondary market: FHA-insured loans Spread Level (basis Discounts (points) points) (percent) 1971 - Low High 7.55 7.95 -36 52 7.32 7.97 -27 31 1972 - Low High 7.55 7.70 15 61 7.45 7.57 5 48 3.7 4.7 1973 - Jan. Feb. Mar. Apr. May June July Aug. 7.70 7.75 7.80 7.90 7.95 8.05 8.40 8.70 32 35 31 44 44 41 34 34 7.55 7.56 7.63 7.73 7.79 7.89 8.19 1/ 2/ 17 16 14 27 28 25 18 1/ 2/ 4.5 4.6 5.2 5.9 6.4 7.2 9.4 1/ 2/ 2.5e 7.8 NOTE: FHA series: interest rates on conventional first mortgages (excluding additional initial fees and charges) are rounded by FHA to the nearest 5 basis points. On FHA loans carrying the 7 percent ceiling rate in effect since mid-February 1971, a change of 1.0 points in discount is associated with a change of 12 to 14 basis points in yield. Gross yield spread is average mortgage return, before deducting servicing costs, minus average yield on new Aaa utility bonds. e/ Estimated. 1/ 2/ On Data are for loans bearing the former ceiling rate of 7 percent. July 6, this rate was raised to 7-3/4 percent and then to 8-1/2 percent on August 25. Not reported. CONFIDENTIAL UNTIL RELEASED BY HUD - 6 - Federal finance. Legislation passed by the Senate and intro- duced in the Rouse would provide for an immediate 5.9 percent increase in Social Security benefits. If enacted by November 1, an estimated $2.0 billion would be added to Federal outlays in fiscal year 1974 (an annual rate of $3.4 billion). Actual payment of any increase, however, would not occur until the spring of 1974 because of the demands currently being made on the Social Security Administration in its efforts to assume, by January 1, 1974, full responsibility for providing assistance to the aged, blind, and disabled, programs previously administered by the States. CORRECTIONS: Page I-9: Percent per year change in personal consumption expenditures for nondurable goods projected for 1974 is 11.6 percent. Page I-10: Line 9, the correct figure is 610,000 units, rather than 800,000. - 7 - INTEREST RATES 1973 Highs Lows Aug. 20 Sept. 13 Short-Term Rates Federal funds (wkly. avg.) 3-month Treasury bills (bid) Comm. paper (90-119 day) Bankers' acceptances Euro-dollars CD's (prime NYC) 60-89 day Most often quoted new 6-month Treasury bills (bid) Comm. paper (4-6 mo.) Federal agencies CD's (prime NYC) 180-269 day Most often quoted new 10.79(9/5) 5.61(1/3) 9.05(8/14) 10.50(9/13) 11.00(9/13) 11.69(8/9) 5.12(1/4) 8.79 5.63(1/12) 5.75(1/11) 5.81(1/5) 10.25 10.75 11.50 8.86 10.50 11.00 11.44 10.50(9/12) 5.38(1/3) 10.38(8/15) 10.50(9/12) 9.00(9/13) 10.50(9/13) 9.83(9/12) 5.38(1/4) 5.63(1/12) 5.64(1/3) 8.77 10.25 9.49 9.00 10.50 9.47 10.39(8/15) 10.74(9/12) 9.38(8/15) 5.63(1/3) 9.38(8/15) 9.25(9/12) 8.50(9/13) 9.49(8/13) 5.40(1/4) 5.86(1/2) 8.29 9.33 8.50 9.10 8.50(9/12) 5.75(1/3) 8.50(8/15) 8.50(9/12) 6.00(8/8) 3.20(1/3) 5.70(8/15) 5.25(9/12) 8.13(8/7) 6.23(1/4) 7.83(8/7) 6.04(1/3) 7.50 7.58 7.35 7.38 7.77(8/24) 8.68(8/30) 7.10(1/2) 7.88(1/12) 7.77 8.59 7.63 8.64 8.52(8/8) 7.29(1/10) 8.30(8/15) 7.74(9/12) Municipal Bond Buyer Index 5.59(8/1) 5.00(1/17) 5.47(8/15) 5.18(9/12) Mortgage--implicit yield in FNMA auction 1/ 9.27(9/4) 7.69(1/8) 8.71(8/6) 9.27(9/4) 1-year Treasury bills (bid) Federal agencies CD's (prime NYC) Most often quoted new Prime municipals Intermediate and Long-term Treasury coupon issues 5-years 20-years Corporate Seasoned Aaa Baa New Issue Aaa Utility 1/ Yield on short-term forward commitment after allowance for commitment fee and required purchase and holding of FNMA stock. Assumes discount on 30year loan amortized over 15 years. SUPPLEMENTAL APPENDIX A BANK LENDING PRACTICES AS OF MID-AUGUST * More than three-quarters of the banks participating in the Quarterly Survey of Changes in Bank Lending Practices reported stronger demand for commercial and industrial loans over the three month period ending August 15. (See Table 1.) The 125 banks reporting in the Survey have significantly tightened both price and nonprice terms of lending. A large number of banks commented that the higher cost of funds was the major reason for tightening credit, and many indicated that state usury laws prevented them from making home mortgages. However, more than half of the banks expect commercial and industrial loan demand to remain stable or decrease in the quarter beginning August 16. Continuing and strongly reinforcing the trend of the two surveys earlier this year, the terms of lending tightened considerably across the country. Interest rates lead the move toward more restrictive credit conditions. More than 90 per cent of the respondents had adopted a firmer interest policy, reflected in the prime rate increases from 7 per cent to 9-1/4 per cent during the three month period. But there were still many comments that the prime rate was unrealistically low and that the spread between the cost of funds and loan rates was too narrow or even negative. There was evidence of tightening in all nonprice terms of lending. The increased restrictiveness was significant in all areas, but was especially noticeable in compensating balances. The banks reported closer scrutiny of borrowers and the purpose of loans. There was a much more restrictive stance on new loan applications and enlarging credit lines--particularly from new or nonlocal customers. Many banks reported that loans were not being given for acquisitions or for speculation in inventories or real estate, but were granted only for "constructive" purposes to steady customers. But despite the more restrictive credit conditions generally, almost 90 per cent of the reporting banks indicated that their willingness to make consumer loans is the same or greater than three months earlier. As shown in Tables 2 and 3, the pattern of tightening emerged consistently in both large and small banks and in every region of the country. * Prepared by Paul W. Boltz, Economist, Banking Section, Division of Research and Statistics. NOT FOR PUBLICATION OR QUOTATION TABLE LENDING BANK IN CHANGES OF SURVEY QUARTERLY AT (STATUS OF POLICY ON (NUMBER OF I PRACTICES SELECTED LARGE BANKS IN THE U.S. 1/ AUGUST 15, 1973 COMPARED TO THREE MONTHS EARLIER) BANKS & PERCENT OF TOTAL BANKS REPORTING) MoCH STHONGFP TOTAL HANKS rCT HANKS MOnFRATELY STRONG.ER PrT RANKS PCT FSSENTIALLY UNCHANGED MODFRATFLY wEAKER RANKS HANKS PCT PCT MUCH EAKFR BANKS PCT STRENGTH AND COMMERCIAL FOR DEMAND OF INDUSTRIAL FOR ALLOWANCE (AFTER LOANS BANK'S VARIATION) SEASONAL USUAL rP COMPA'0L) ANTTCIAT~I- AI0 TmI-o'- IONTHS IN NEXT 0rmiNn 3 MONTHS 17% 100.0 19.? 71 56. 27 21.6 125 10n.0 9.6 48 1Hi.4 54 43.2 MUCH FIRMF POLICY ANSWFRING OUFSTIN RANKS L-ENOINb TFRMS FIII"F INANCIAL TO PCT MUUERATELY EASIER POLICY RANKq PANKS 8ANKS PCT PCT PCT USISTSFs PoTES riAcGFn COMPFAIrSATIN STANDIA-lOS MATUITY REVIEWIN( ETAtR OF 1) ,SI)PPUPTINIt CR1-TT IF TF-m IALANCf-S wOTHINFrr LOAn1S ISFI ) CIISTOMFPS CI§STOMFkq NONLUCAL S';FVICE ?N A 6'4 . 10 ( 32.8 3(1.4 IOn .u 21.6 4?.4 I no.0 17.6 52.0 I) 1I 100i.1) 121) 100.0 rSTMFPS 1?b 100.0 ARFA CUJSTO(MES I b In.0 AREA 0 I no. Q 7-1 OR LOAN APPLICATIONS rFI)IT LINkS LOCAL qEPVICF 1/ HANI4S FSSFNTIALLY UNCHANGED POLICY AND CntITTO'Ic: INTE~k~r NEW PCT MODEPATELY FIRMFR POLICY SURVEY OF LENnINA PRACTICES AS OF AUGUST 15, 197J. AT 125 LANGE RANKS REPORTING 4 A. ri 4106 57.6 '11.4 12.0 1.0 46.4 44.0 46.4 36. o 17.6 IN THE FEDERAL RFSFVE QUARTFRLY INTFREST HATE SURVEY MUCH EASIER POLICY HANKS PCT NOT 1 TAHLE OR PUBLICATION FOR QUOTATION "UCH FINMEt POLICY ANSWFPING oUSTI'i HANKS PCT (CONTINIIED) RANKS PeT MODEPATFI Y FIRFMR POLTrY HANKS PCT FSSENTIALLY UNCHANGED POLICY MODFPAILLY EASIEH POLICY RANKS PCT HANK PCT MUCH EASIER POLICY BANKS PCT FACTORS PELATIN( TO APPLICANT 2/ VALUE AS DFrOSITUP ON SOURCE OF COLLATERAL RUSINESS 125 100.0 49 39.? 46 36.A 30 24.0 0 U.0 0 0.0 INTENPFO U~F OF THE 1?5 100.0 43 34.4 44 35. 3H 30.4 0 0.0 0 0.0 125 100.0 41 32.8 13 26.4 bl 40.8 0 0.O 0 0.0 HALANCFS 125 100.0 1 12.0 2I 21.h M8 66.4 0 ().0 0 0.0 EOUIRFMENTS 125 100.0 20 16.0 45 16.0) 60 48.0 0 )U.U 0 0.0 125 100.0 6b 5?.n 31 24.H 28 22.4 1 0.8 0 0.0 LOAN LENDING TO "NONCAPTTVF" FINANCE COMPANIES TERMS AND COI)ITIUNqZ INTEHRqT PATES CHaRGED COMPENSATING OR SIIPPORTING ENFOHCEMFNT OF nAI ANCF ESTABLISHING NFW OR LARGEP CHFDIT LINES ANSwFRING QUFSTTON RANKS WILLINGNFSS TO MAKE RANKS PCT ODERATFLY LFcR WILLTNG RANKS PCT FSSENTIALLY UNCHANGED MODERATFLY MORE WILLING RANKS HANKS PCT PCT CUNSIDERABLY MORE WILLING BANKS PCT OTHER TYPES OF LOANS 125 100.l) 30 24.0 53 42.4 41 32.8 1 U.8 0 0.0 INSTALMENT LOANS 1?4 Ino00. 3 2.4 12 4.7 10U M2.3 6 4.b 1 0.H FAMILY MORTGAGE LOANS 122 100.0 25 20.5 39 32.n 54 44.2 4 3.3 0 0.0 121 100.0 36 29.R 43 35. 42 34.7 0 o.u 0 0.0 121 100.0 33 27.3 52 43.0 36 29.? 0 U.U 0 0.0 125 n100. 10 8.0 46 16.m 68 h4.4 1 .. 8 0 0.0 124 100.0 13 ?6.6 36 29.') 55 l.0 0 0.0 TERM LOANS CONSUMER SINGLE PCT CONSIDERAPLYY LESS WILLINr TO HItSTNESSES MULTI-FAMILY MORTGAGE LOANS ALL OTHER MORTGAGE LOANS PARTICIPATION LOANS CORRESPONDENT HANKS LOANS TO HROKFRS I4TH 2/ FOR THESF FACTORS, FIRMFP MEaNS THE FACTORS wERF CONSIDERED FORF TMPOITANT TN AND FASTER MEANS THEY WFRF LESS IMPORTANT. CREDIT RFOUESTSb 44. 0 MAKING DECISIONS FOR APPUOVIN(, NOT FOR OR PUBLICATION QUOTATION 2 TABLE GROUPED BANKS AT PRACTICES LENDING BANK IN CHANGES QUARTERLY OF COMPARISON BY SIZE OF TOTAL (STATUS OF POLICY ON AUGUST 15, 1973. COMPARED TO THREE MONTHS EARLIER) (NUMBER OF BANKS IN EACH COLUMN AS PER CENT OF TOTAL BANKS ANSWERING QUESTION) SI7F MI)CH STRnNGCr TOTAL $1 & OF RANK SI & (PJFR IINnFR OVrH si inn Inn 10n In0 TOTAL DFPn9STS -- MOLIERATLLY qTPON(,ER UN1FR tI Si F OVER IINI)FR $1 DEPOSITS 1/ IN RILLIONS FSSENTIALLY IINCHA NGED MUOULATELY wFAK- ,%I & OVER OVER UNOER si 1 & ONDL)H 11 MUCH WEA(ER 51 & OVER UNOER Si STRFNi(,T OF OFllMVuj FOR. CLIkMFLCI L Al' INDhUST-41AL I \N, IAFTFR Al LOWANCE FOR BANKI'" USUAL 'FAnOLAL VAHTATTON) COPAFll THqtl'4 04TH'; 10 APTICIPATti' NFXT IN DiA'Jf A6O 3 MONTHS mklrH sl r. O)VFR IKi)F.J Inn Inn inn 1) Ion Inn 110 Inn Inn 1') NEW CUISTO',FPS Inn inn LOCAL SERVICE AkEa rITqTnMFRS In l0t NONLOCAL SERVICE AREA Ch1STOMEFI 10in Inn LENDIN, TERMCq TO FSSFNTIALLY FTRIAFR ['NClANCEl $1 & OVFR Il INtFP qj $1 & IINDIFw sI OVFR ,& & OVFR INOE4 S1 MODERATELY LASILn $1 & OVER UNLOEH $i o O o 0 O 0 MUCH EASIER S1 L OVER Hi1SINES;FS rNINFINANrIAL AI' roi'HI ITI ONIc INTERNT KATE; CHAQCGE COMPLNqtTIN0W, SIPPORTINr OF SThN0A'lrU mATUITY CQ TFQ- OF REVIFwlr. rwl)IJ ESTAtALISHFn 1/ SURVFY $1 MOnERATFLY FTYWMFi ToTAL OF DIT '4AI ANCt-S wORTHTNl''r LOANS L1Nts OR LOAN APPLICATI(I\s CuTTEIwS LENIINn PPACTirES PILIO)N) REPOWTING IN THE ) AT b4 LARrE FEDERAL RANKS RESERVE (IEPOSITS QUARTERLY OF U1 RILLION OR INTEREST OATF MORF) ANO SURVEY AS nF 71 SHALL BANKS (UEPOSITS OF LESS THAN A1uGUST 159 1973. UNDER Ui NOT QUOTATION TO FOR TARLF PUBLICATION 2 (CnNTINJEn) OF SI7E PANK kt IC 4. NLJ'P' Fk FIRM4FP OUFSTION SiV. INFI- POLICY $1 0 & UN, FP F 4 -- TOTAL nFPOSTTSIN MILLIONS FSSENTIALLY MODERATELY MOnEqATELY EASIER UNCHANGED FIRMCR POLICY POLICY POLIrY iiNDFW Il S1 L OVFP k1 & PVER uNDEn si 11 L OVER uNoER $1 MUCH EASIER POLICY Si $ OVER UNOER Si 2/ APPLICANT RELATING FACTORS TO VALUE AS OtPOSTTOP (IQ SOURCE OF COLLATERAL QUSI INTENDED LENOING TO ESS THE LOAN USE OF 100 10n 37 37 28 21 0 0 Ino I(n 37 34 33 28 0 0 *'tONrCATIVF" FINANCF COMPANIES TERMS ANfl CO OITTON-; INTEREqT LA-EtI) 6;iTFS I3o- StIPPOOTINr COA4PENqATIN ENFORCFFNT -F HAL ANCFS AALANCF PEuIRFMENTS ESTABLTSNIN(- j.m On LAPcE , CpFnIT LINES CONSIDEkaSLY NU-IZFP %I k Ov R TO WILLINNFqS LOAK', TERM CONSUIFr SINGLE I!STALMEAT FAMILY OTHEP LOANS 2/ TO FR &u It $1 '-NnFP $1 & ()VFW CONSIDEPAHLY FSENTIALLY MORE N EU UC lH '1 4HANGOf OVER OVER INDEP $1 wILLINI, $1 & UVFR ijEW 1l iILLING si & OVER UNnER SI LOANS LOANS mURTGAGE mnT#rarE MORTAAGF PARTICIPATION COPRESPONDFNT TYPES OF OTHFR t OVFR LFSS WILL TNG JOSINFSSEl To NULTI-FAMILY ALL MAKF -INnFk si MOOEA76LY MOOERATELY LFSS WILLINi- ANSVEPINU QUFSThI ON LOa&S RA'JKS 'aROKFQ LOANS LOAP'S O ) In 0 0 10f) O 0 LOANS WITH S10 Ion wERF FTRME0 MFANS THE FACTOr FOR THESE FaCTOwq, ANO) EASIER MEANS THEY wFRF LESS CREDIT QI.uFST, CONSIDEPEn ImPORTANT. MORF TMPOPTANT IN MAKING DFCISIONS FOR APPROVING NOT QUOTATION FORHOR PUBLICATION TnAHLF 3 SELECTED AT PRACTICES LENDING BANK IN CHANGES OF SURVEY QUARTERLY ON POLICY OF STATUS 15, AUGUST (NUMBER ALL ioSTS OF rTRFPhIC,1'S, )I-m0() FUP COM MWHCTAL TON 3 ,n-7HSI' aiO MUCH rlT.tINr(H4 MOIWtWATE Y ,THLGF4 FSSP.TAI IY IIi4CHANiFD MOLtPATFIY WFAIFF MUCH wFAKFQ ANTICIPATElO iOMANn THREE- 1ON71H, MUCH wFaKF ~ JF a K( To RUSINESgFS TERMS ATLANTA CHICST. ACO LOUIS MTNNEAPOLIS KANS. CITY DALLAS SAN FRAN 2 5 2 0 0 1 5 2 1 0 0 8 5 0 0 0 4 FOR 125 ?4 71 ?7 3 0 1 4 11 5 7 0 0 0 0 12 1 1 48 54 4 3 9 10 0 0 2 6 b, 3 0 U 4 A nl ( 4 5 2 0 0 1 9 2 1 0 2 4 4 0 0 3 10 2 0 0 3 3 2 1 0 1 1 1 0 0 11IJERATLY I u ()ICH 1 4 4 5 i f. 4 I) 1 5 1 1 2 1 2 3 0 1 0 4 ? s 7 2 2 2 1 3 5 2 6 3 0 0 0 2 0 a 0 a f 0 P 6 1 0 0 7 2 0 0 0 2 ) 1 0 0 1 1 0 0 0 7 2 0 a 0 5 6 3 7 5 0 4 2 3 0 0a 1 1 1 0 0 3 3 3 0 0 3 4 2 0 0 1 6 6 0 n 5 4 n f) 1 0 0 6 3 0 NNHFINANIAL ANn rO.q)ITINS INTERFqT kATFs CHAWGFL MUCH FItl-FR P(LrcY MOL)FRATELY FIHMF4 POLICY ESSFPTTALLY IINCjAN6Fn PIL IrY 4Oul)PATF1Y eAS19H POLICY MUCH EASIER PQLCy COMPENqATING nALANCES MUCH FIRMER POLTCY MODERATEly FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY tASIFH POLICY MUCH EASIER POLICY 1/ CLEVE- RICHLAND MONO 1', SrTP0-i;' LENONI, PHTLADFL. 1/ Nt-ET MOLIPATIE YTwUII(,FR ESSI-1TTALLY IIm'C.44N(,H.) .4 NFw YORK TOTAL CITY 0UTcrnE LARGE BANKS IN THE U.S. THREE MONTHS EARLIER AmII INnUsIPIAL LolV, (AFTFW ALLU'.ANCF RAN~lq (SUlFL ljSfONAL VARIATION) COMPAPPIl HOSTON 1973 COMPARED TO OF BANKS) SURVFY AS OF OF LENDING PRACTICES AT AUGIISI 1ci 1973. 125 wfo 36 9 0 1 S 1 I 0 Q 5 3 0 0 4 3 1 0 U 5 1o 5 0 ( b) 2 ? 11 0 7 3 1 0 U q 1 1) a 1) H 3 0 0 0 7 5 0 1) 0 0 A 3 0 5 4 2 0 0 1 n 6 3 2 0 0 3 4 n 0 2 0 0 1?s 41 46 38 0 0 125 LARGE RANKS REPORTING 0 n IN THE FEDERnL 5 0 0 RESERVE 5 3 2 0 0 QUARTERLY INTEREST RATE SURVEY 0 NOT FOR QUOTATION OR TAALF 3 (CONTINIIED) PUBLICATION ALL OSTS HOSNFw YORK TON TOTAL CITY OUTSIE PHTLADFL. rLEVE- WTCHLANO MONO ATLAN-,CHICST. TA AGO LOUIS MINNE- KANS. APOLIS CITY DALLAS SAN FRAN LENDING TO NONFINANrIAL BUSINESSES TERMS ANn CONI)TTIONR STANOARDS uF Cu3OTT wnRTHTNESS 125 MUCH FIRMER POLICY MODERATELY FIHMFR POLICY ESSENTIALLY UNCHANGFD POLICY MODERATELY FASIER POLICY MUCH EASIER POLICY 27 45 93 0 0 MATURITY OF TERM LOANS MUCH FIRMER POLTCY MODERATELY FIRMFR POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIFR POLICY MUCH EASIER POLICY REVIEWING CREDIT 2 2 4 0 0 3 5 1? 00 0 0 1 R 00 0 3 4 4 0 0 3 3 1 00 0 2 5 4 0 0 2 5 5 0 0 5 1 4 0 0 0 8 7 00 0 1 d 5 0 0 2 5 13 0 0 ( 2 4 ) 0 1 1 2 0 1 4 6 0 0 0 6 6 0 0 3 1 6 0 o n b 10 0 0 0 7 1 0 U 11 8 0 0 4 0 7 4 0U 0 1 1 0 0 7 4 0 0 1 4 7 0 0 1 5 4 0 0 S 2 1 0 0 13 4 3 0 0 h r J 0 0 7 4 4 1 1 0 n 7 3 1 0 0 7 4 1 0 0 0 3 b 0 0 2 9 9 0 0 1 1 b 0 0 1 6 4 0 0 1 0 7 4 0 0 1 6 5 1 6 2 0 0 1 0 2 0 0 5 1 3 0 0 2 5 2 0 0 1 4 8 0 0 3 e 0 0 2 1 0 0 0 4 3 2 0 0 3 3 3 0 0 0 2 10 1 0 ) 6 9 0 0 3 J j 0 U 1 2 0 0 0 1 5 3 0 0 3 4 2 0 0 1 3 9 0 0 6 3 1 n 0 7 6 2 0 0 5 3 1 0 0 ? 1 0 0 0 h 3 0 0 0 6 3 0 0 0 4 5 4 0 0 1 6 3 0 0 0 6 9 0 0 2 4 1 2 0 0 0 1 4 4 0 3 5 1 0 3 10 0 0 125 22 37 hb 1 0 1 0 u 4 INES OR LUANS ESTARLISHEO CUSTOMFRS MUCH FIRMER UPLICY MOUFRATEI Y FIRMFW POLICY ESSFNTIALLY UNCHANGFD POLICY MODERATELY LASIFH POLICY MUCH EASIFP PULILY NEW CUSTOM-FS MUCH FIHIER POLICY MODERATELY FTHMFM POLICY FSSFNTIALLY UNCHANGF POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY LOCAL SERVICE 4AEA CUSTOMFRS MUCH FIRMER POLICY MODERATELY FIRMFR POLICY ESSFMTIAILY UNCHANGED POLICY MODFkATELY EASIFH POLICY MUCH EaSIEN POLICY 125 13 60 52 0 0 1 1 4 0 0 125 72 38 15 U 0 I) u 0 125 12 58 55 0 0 1 ? 0 0 0 0 0 NOT FOR OR PUBLICATION QUOTATION TAHLF 3 ALL oST; HnS. TON TOTAL NFW YORK CITY OUTSIDE (CONTINUED) PHILADFL. CLEVE- RTCHLAND MONO ATLAN- CHICST. TA AGO LOUIS MINNE- KANS. APOLIS CITY DALLAS SAN FRAN LENDING TO NONFI[ANCIAL RUSINESSFS I 1tN'f OR LUANS RFVIEw[NA rFoIT NONIOChL ,'VICF hPFA C1'sT MUCH FIMwmR POLICY MODERATELY TNMFR POLICY FSSFNTIALLY IINLHjANGFU POLICY MODERATELY EASIFR POLICY MUCH EASTER POLICY 125 5$ 45 2d 0 0 3 4 1 0 0 1 3 5 0 0 7 5 7 0 0 6 ? 4 5 2 0 0 4 1 1 0 5 3 3 0 0 1 3 4 4 0 0 7 p p 4 2 2 0 0 n 0 2 7 2 0 0 8 2 2 0 0 6 3 1 5 4 2 0 0 0 3 10 2 0 0 5 4 0 0 0 2 1 0 0 0 7 1 1 0 0 6 2 1 0 0 4 6 3 0 0 3 9 0 0 0 4 3 3 0 0 6 6 3 0 0 5 3 1 0 0 2 1 0 0 0 3 3 3 0 0 6 3 0 0 0 3 4 6 0 0 6 1 4 0 0 4 5 3 0 0 3 5 2 0 0 3 9 3 0 0 4 1 4 0 0 0 2 1 0 0 3 3 3 0 0 3 4 a a 0 3 4 6 0 0 2 5 4 0 0 4 5 3 a 0 3 2 10 0 0 3 4 2 0 0 2 0 1 0 0 6 1 2 0 0 4 2 3 0 0 6 3 4 0 FACTORS WFLATIN6 Tn APPLICANT P/ VALUE AS OtPOSITOP OR SOUwCE OF COLLATE-AL MUSINFSq MUCH FTkh'FR POLTCY MODERATELY FINMFP POLICY ESSENTIALLY IINCHANGEI POLICY MODERATELY EASIFR POLICY MUCH EAEP PULICY INTENDFO USE OF LO40 MUCH FtRmFw POLICY MODERATELY FIRMFR POLICY ESSENTIALLY 'JNCHANGEO POLICY MODERATELY EASIFR POLICY MUCH EArItH PULTCY 125 49 &6 30 0 0 ? 2 4 0 0 7 7 5 0 0 ( 2 3 3 0 0 9 A 4 3 b 3 U 0 2 0 6 0 0 5 5 10 0 0 0 1)5 43 44 .38 0 0 1 0 LENDINb TO 'NONCAITIVE" FINANCE COMPANIES TERMS ANn CONLITIONS INTERST RiTES LMAGEO MUCH FIwEH POLICY MODEPRATELY FIHMFR POLICY ESSENTIALLY (INCHANGFD POLICY MODERATELY EASIFR POLICY MUCH EASIER POLICY 1?5 41 33 51 0 0 ? 1 6 0 0 2/ FOR THESE FACTURS. FIRMED MEANS THE FACTORS WERE CONSIDERED MORE CREDIT PEOUFSTS@ AND EASTER MEANS THEY WFRF LESS IMPORTANT. 0 IMPORTANT IN 4 4 0 MAKING DECISIONS FOR APPROVING 0 0 NOT FOR QUOTATION OR PUBLICATION TARLE 3 (CONTINUED) ALL USTS HOSTON NFW YORK TOTAL CITY OUTSIDE PHILADFL. CLEVE- RICHLAND MONO ATLAN- CHICST. TA 'AGO LOUIS MINNE- KANS. APOLIS CITY DALLAS SAN FRAN LENDING TO "NONCAPTTVE" FINANCE COMPANIES TERMS AND CONDITIONS: SIZE OF COMPENSATING AALANCEq MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY ENFORCEMENT OF BALANCE REQUIREMENT MUCH FIRMER POLICY MODERATELY FIHMFR POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIFR POLICY MUCH EASIER POLICY ESTABLISHING NE CREDIT LINES 1 0 7 0 0 1 7 12 0 0 0 2 7 0 0 1 4 3 0 0 1 14 b 0 0 0 6 3 0 0 3 2 3 0 0 10 5 4 1 0 5 2 2 0 0 2 4 2 0 0 3 9 8 0 0 0 1 7 0 0 0 1 17 1 0 0 1 5 a a 1 6 4 0 0 0 3 9 0 0 3 2 5 0 0 2 0 13 0 0 1 3 5 0 0 0 1 2 0 0 2 2 5 0 0 2 1 6 0 0 2 1 10 0 0 ? n 4 0 0 2 4 5 0 0 1 4 7 0 0 3 4 3 0 0 2 3 in 0 0 1 3 5 0 0 0 0 3 0 0 3 2 4 0 0 2 3 4 0 0 2 4 7 0 0 5 3 2 1 0 1 5 3 3 0 0 6 5 1 0 0 5 3 2 0 0 5 7 3 0 0 5 3 1 0 0 e 1 0 0 0 8 0 1 0 0 6 1 2 0 0 7 0 6 0 0 0 5 4 0 0 3 4 4 0 U 4 0 1 8 2 0 0 2 6 3 1 0 3 5 2 0 0 0 9 6 2 1 0 0 0 4 3 2 0 0 3 0 4 3 2 0 0 4 0 0 2 3 8 0 0 0 0 8 0 1 9 1 0 0 0 0 11 0 0 0 4 6 2 0 0 1 A 1 0 0 1 14 0 0 0 0 B 1 0 0 1 2 0 0 1 3 5 0 0 1 0 7 1 0 1 0 11 0 1 1 5 5 0 0 125 20 45 60 0 0 1 8 2 0 0 125 65 31 28 1 0 1 P 0 0 OTHFR TERM LOANS TO HUSTNESSES CONSIDERABLY LESS WILLING MODERATELY LESS wILLING ESSENTIALLY UNCHANGED MODERATELY MORE WILLING CONSIDERABLY MORE WILLING CONSUMER 15 27 83 0 0 nR LARGER MUCH FIRMER POLICY MODERATELY FIRMFR POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIFR POLICY MUCH EASIER POLICY WILLINGNFSS TO M 4 KE TYPES OF LOANS 125 INSTALMENT LOANS CONSIDERABLY LESS WILLING MODERATELY LESS WILLING ESSENTIALLY UNCHANGED MODERATELY MORE WILLING CONSIDERAHLY MORE WILLING 125 30 53 41 1 0 ? 0 0 ) p 124 3 12 102 6 1 1 0 6 n 0 NOT FOR PUBLICATION OR QUOTATION ALI OSTS WILLIN(3rFc2cz Jil TYPFS OF LI1tN SINGLF 4 1 u 'V r1f'C LU' 1 CON'lrFk4A LY LF( htlLING M0()L-;nTFI Y INS 4TLLINrC ESSP 'TTAI LY IjNCANiFD mOnE14ATtrLY klo WILLING COS1I0)F-"'LY "UI- wTLI-.J(, MULTIFAMILY MowToA.3 LOANS CDNS1IFA4LY LESS WILLING' MOUtwATFIY LI S% WILING !SS r.TI A I I CN Nfl.l MOVEPATUY ml) , WILL'i CONSI0FIPArLY f-OQE WILLIli, ALL OTHEP m,)WTi;4.F LOANC CQSTnfl4rHLY LPCS;rLLI,G MODj)ATEIY LESSILL1Nb FSSENTIAI LY IINLHAk(,F) MODEPATFI YV"t rwLLINC, CON1UF A-A-LYm0i ) wTLLIN(. PARTICIPTTU'A CORREP0NDI-1IT LOAN-STIl4 iANWS CONcT(JFP4-iLY LL'S 'VTLlIIu' MOURATELY LFr r ILLING ESSI:?'TT %LLY Ij1',C6N(;Fi) MO0EIATFn'Y,'E wrLi ING CONIPFPAI'LY M(0F AITtLIN'( LOANS TO Hl OK-qS CONSTOFR"LY LFSS WTLLIN'r MODFPATELY LFSS wILIAri ESSEN'TIALLY INICHAN(F0 MODERATELY mOwL WILLING CONSIOFRAiLY mOpr wrLLING NUMBER OF RANAS MOSNFW YORK TON TOTAL CITY UUTSIOE (CnNTIN(IED) PHTLAnEL. CLEVELAND RICH4MONO 4 1 1 n n 5 2 4 0 0 4 4 3 1 0 2 2 3 ? 0 1 4 in 0 0 1 4 4 a 0 2 1 0 a 0 1 5 3 0 0 1 1 7 0 0 2 3 ? 1 0 5 6 1 0 0 4 3 2 0 0 3 5 7 0 0 4 1 6 1 0 a 3 0 0 0 0 2 6 1 0 0 1 7 0 0 5 1 1 5 3 3 0 0 1 1 6 4 1 0 0 4 7 1 a 0 3 3 2 0 3 7 5 0 0 . 4 2 0 0 2 1 0 0 0 4 4 1 0 0 1 2 6 0 0 2 1 ? 1 6 4 0 0 2 4 6 0 n 0 6 4 n n 3 12 0 1 1 7 0 0 1 2 0 1 4 4 a 2 2 4 1 0 3 10 0 0 4 6 1 0 0 3 3 6 0 0 4 3 3 0 0 3 2 4 0 0 3 3 7 0 0 0THF MAK F61-iTly (CONTINUED) TAHLE 3 TABLE 3 5 ATLAN- CHICS1. TA AGO LOUIS MINNE- KANS. APOLIS CITY DALLAS SAN FRAN 122 2!) 39 94 4 0 0 4 4 0 I n 0 7 (I 0 3 7 1 o 0 1 6 n 0 A H n 2 M 1 0 le 36 43 42e 0 0 0 3 b 0 0 3 6 1 0 n0 7 0 0 121 33 52 3t 0 0 5 2 0 0 0 1 5 II I 9 I e 6 3 0 a 5 6 0 0 12* 10 4h 68 1 0 A S 3 ) 0 2 Q Q 2 3 3 0 a 5 4 11 2 4 9 4 n 0 v 0 0 n n 0 0 0 0 0 124 33 16 55 1) 0 125 5 2 4 0 0i 7 0 0 0 p 1 3 0 0 3 5 7 0 0 1 2 6 0 0 0 0 3 0 0 3 4 1 0 0 NOT FOR QUOTATION OR PUBLICATION TARLE 4 COMPARISON OF SELECTED MAY RESPONSES IN THE MAY 15, 1973 NUMPER OF RANKS AND AUGUCT AUGUST 159 SURVEYS 1973 NUMBFR OF RANKS WEAKER UNrHANGED STRONGFR 'TRFNGTH OF DE"AND FOR COMMFPCIAL AND INnljTPTAL LOANS COMPARED TO THREE MONTHS STRONGFP UNCHANGEO wEAKER AGO ANTICIPATED DEMAND THREE MONTHS HENCE STRONGER UNCHANGFn WEAKFQ ANTrcIPATED OEMANd THPFE HONTHS HENCE STRO NGPQ UNCHANGED WEAKER LFNi)TNr TO INTEREST NONFINANCIAL HUSINFSSES RATFS CHARGED FIRMER UNCHANGED EASIFR COmPrNSATING OR SIUPPRTING RALANCES FI PRFR UNCHANGED EASIE STANnAons OF CRnIT nORTHINESS t FIR AFR UNCHANGED EASIER MATUPTTY OF TERM LOANS FIRMFR UNCHANGED tASIER COMPARED 68 PS 2 F'IMER TO THREE MONTHS 14 13 0 INrHANGED EASIER NOT FOR PUBLICATION OR QUOTATION TABLE 4 (CONTINUED) TA~RLF 4 (CnNTNIIED) MAY 15, 1973 NUMBER OF BANKS WFVIFWTNt, rREDIT LINES OR LOAN APPLICATION FSTAALISREO) CUS OMFNS FIRFR UNCH ANGE LASIER NEW CUJSTOMRS FIR'iER UNCHANGED EASIER LOCAL SERVICE AREA CUSTOMERS EIRMFN UNCHANGED EASIER ARFA CUSTOMERS FIRMER UNCHANGFI) EAIFR NONLnCAL SERVICE EACTO~ R FIATIr-Mb TO APPLICANT VAt OF AS OEPOSITOW OP SOIkreE OF COLLATERAL ROSINESS FI PMFR UNCHANGFP EASIFR ITENOEO USE LENOINC TERMS TO AND INTEREST OF THF LOAN F IMFR LiNCHANGED EASIER 'INO'ICAFJrIVE" FI",ANCF COMPFANIES CONITIONS: RATFS CHARGFn FIRMFR UNCHAN Fn EASIER COMPFNSATING OR SUPPORTING RALANCES FIRMER UNCHANGFO EASIFR AUGUST 15s 1973 NUMBER OF RANKS UNrHANGED FIRMER EASIkE NOT FOR QUOTATION OR PUBLICATION TAHLE 4 MAY (CONTINUED) 15, 1973 NUMFR OF BANKS AUGUST 1,o 1973 NUMRFR OF RANKS FIRMER UNCHANGED EASIER LENDING TO "NONCAPTIVE" FINANCE COMPANIES TERMS AND rONDITIONS: ENFORCEMENT OF BALANCE REQUIREMENTS FIRMER UNCHANGED tASIER 19 A6 0 ESTARLISHING NEW OR LARGER CREDIT LINES FIRMFR UNCHANGFD EASIER 70 r5 n WILLINANESS TO LFSS MAKE OTHER TYPFS OF LOANS TERM LOANS TO BUSINESSES LESS UNCHANGED MORE CONSUMER INSTALMENT LOANS LESS UNCHANGED MORE SINGLE FAMILY MORTGAGE LOANS LESS UNCHANGED MORE 54 <R 3 1 111 12 1l 100 4 MULTI-FAMILY MORTGAGE LOANS LESS UNCHANGED MORE 10 9? 0 ALL OTHER MORTGAGE LOANS LESS UNCHANGED MORE PARTICIPATION LOANS WITH CORRESPONDENT LESS UNCHANGED MORE LOANS TO BROKERS LESS UNCHANGED MORE 33 RA RANKS ?2 100 1 UNCHANGED MORE NOT FOR QUOTATION PUBLICATION OR TABLE 5 A CROSS-CLASSIFICATION TaHLF L OF SELECTED RESPONSES AUG. 15, 1973 NOMnFP OF RiNKS LIA'IOTN(. TO NONFINANCIAL YrlTF,.4ST RATFS CHAR(Etn INrHANGt.D rtJSToILRQ FIR14ER ESSENTIALLY UNCHANOED k ASIEk VAIUF 1,01uCF A; A OF FPOSITON HUSINFSC tbSc*NTIALLY E A"IER TO "'NO"CAPTIVl TI'THOEST WATES r0a4PFNSATING IJNCHANGEI) FINANCE CHARuEn F IRiFtR ErsENTIALLY EAC~ER SUwVFY AUGUST uGLJqT 15, 15. 1973 1973 NUMHFR OF RANKS ESSFNTIALLY I)NrHANGED EASIER FIRM ER Cr0PEN'SATINA R4 3 0 OR SUPPORTING HALANCES 0 32 n 6 0 0 FSTAHl ISHED CUSTOMERS 73 37 is 0 JSF CO"PENSATTNA 40 ONrHANGEO 'UPPOTI'4( PALArNLtS F I4"FH ESSFNTrALLY E ASIER INTENOED 71 1b 0 OF THE LOAN 24 14 0 COMPANTIL OR SUPPORTING, 4ALANC S FIRM*R FSSENTIALLY ONCHANGLD LrslFA COMPFN',ATINt3 OR AUGu1ST OR COLLATEKAL F I OfMFk I tNITNf, THE RUSINFSF% F IR4FR F SENTT NLLY EAlSiER NEW IN (INCHAN(iFV 2 SUPPORTING RaLANcFS 0 0 0 FNFORrFMLNT OF HALANCE '84 T 56 0 00 REQUIRFMENTS FSTAHLISHING NEW OR LARGER CREDZT LINES 19 2 1 7 26 0 0 00 TABLE 5 NOT FOR QUOTATION OR PUBLICATION (CONTINUED) A CROSS-CLASSIFICATION OF SELECTED AUG. 15, RESPONSES IN THE 1973 NUMwFR OF BANKS WILLINiNESS TO MAKE TERM LOANS TO BUSINESSES SINGLE FAMILY MORTGAGE LOANS LESS ESSENTIALLY UNCHANGED MORE FAMILY MORTGAGE LOANS LESS ESSENTIALLY UNCHANGED MORF TERM LOANS AUGUST UGUST 15, 19 1973 1973 OF RANKS NUIMHF ESSFNTIALLY UNCHANGED LFS S MORE OTHFP TYPES OF LOANS LESS ESSENTIALLY UNCHANGED MORE SINGIF AIJRIIST SURVEY TO BUSINESSFS LFSS ESSENTIALLY IINCHANbtO MORE TERM LOANS TO HUSINESSFS LESS ESSENTIALLY MORE IJNCrANGED TERM LOANS TO HUSINESSFS LESS ESSENTIALLY UNCHAdNGEn MORE MATURITY OF TERM LOANS 49 34 9 31 0 1 MULTI-FAMILY ;7 21 1 MORTGAGE 6 33 3 ALL OTHER MORTGAGE 6 7 ?6 27 2 2 0 1 0 LOANS 0 0 0 LOANS 0 0 U CONSUMER INSTALMENT LOANS 13 68 1 2 34 5 0 0 1 PARTICIPATION LOANS WITH CORRESPONOFNT RANKS 35 4H H 3, 0 1 n 1 0 LOANS TO RROKERS 55 28 14 26 0 1 0 0 n NOT FOR QUOTATION TABLE 5 (CONTINUED) TAHLF PUBLICATION OR A L ( CnNT IN[ IED SURVEY AUGUST THE IN RESPONSES SELECTED OF CROSS-CLASSIFICATION AmuiIST AUG. 15, OF 1TI41AGTH OF T 'jfltiST, I A) of'-Aii) k oq rop-4F Hr] AL L OAN, AONTWNS AjI.O STRON6'- H ESSENTIALLY ONCHANGED wEAKFR To TIwE F romPApti TO THHFF MONTHS AGO STRONjF ESSENTIALLY UNrHANEID wE AIEH TO 7nREF IONTHS s rNO(l4(14 S St NTI ALL v vL AKE W roMP RH n rI) THkLF M0IMTHS Asn TU THkEF INCHANrItO ArO H 10 THWFF -Ij NTI- ESSkNTIALLY OR A9 2 15 3 12 a STANDARDS OF 14.1TURITY l(I IIN(H*AN(-L) OF TERM 43 N NFW SUPPORTING B4ALANCE$ 0 nI CREDIT 34 14 13 WORTHINESS (I 0 LOANS 22 CItSTOMFUS 130 0 7 n 0 3 0 03 P7 ESSENTIALLY IINCHANC.ED WLAKFR COMPI-14tf CO4PENSATINS )NC4ANC.I) MONTHS '10 STRuN(, INTERFST RATES rHARGED TO NONFINhNrIAL ROSINFSSLS I 4 91 0 ;)25 3 0) 0 C, 1 ElSSNTIALLY IE AK F romp ARE n RANKS NtMMER OF RANKS )SSFNTIALIY IJNrHANGEDI EASIFN FIRM Ew ANo COMPNllEO CrLOPltFI) UrIJST 15, 1S, 1973 1971 AUGUST 1973 Ni ln, FR SUwV0 Y (-lOlNr'APTTVF FINANCE COMPANIES.) FNFORrEPENT OF HALANCE Rk(UIMEMFNTS 5, 40 0 H 19 0 WE AK4 rOMPARLD TO THREF MONTHS aCO STRoNGFR ESSENTIALLY IJNrhANt4O WFAKFiR (,IN-ONCAPTIVF FINANCE COMPANIES'$) FSTAHLISHINr NEW OR LARRER CREDIT LINES 78 le 1 NOT FOR OF PUBLICATION QUOTATION TARLF 4 TABLE (CONuTINIIED) 5 (CONTINUED) CROSS-CLASSIFICATION OF SELECTED A AUG. AIiGIIST SURVEY RESPONSES SURVEY AUGUST THE IN 15, AUGUST JGOST 15, 1%.1973 1973 1973 NIJM,4FP OF RANKS E9SFNT!ALLY IINcHANGEO NOM 'FR OF STqFNGTH OF ULMANO INnoSTRIAL LOANS COMPAPEO CONPARFO FOR COMMERCItL TO THREP MONTHS AGO STRONGFR ESSENTIALLY UNCHANGED wEAKFN TO HANKS I-Fr' MOPE AOD TNRFF MONTHS AGO 5TRONGFn ESSENrTIALLY UNCHANGEU wEAKER WILLINGNESS TO MAKF TFuM IOANS TO HUSINESSES Al 26 14 13 1 2 1 0 0 W~ILINGNESC T0 MAKE CONSLIMER INCTALMENT 16 19 O1 25 4 P n WILLINGNESS COMPARED TO THNI-F MONTHS 80(1 SrTRINGI P ESSkNTIALLY IJNirHAA4EOF L wEArNER COMPARLD TO LOANS 1 MAKE TO SINGLF FAMIY ORTGAGE LOANS WILINGNESS TO MAKE Co"PARED TO THREF MONiTHS AGO STRONGFP ESSENTIALLY IINCHANIGEL tA KEN THNFE MONTHS AGO STRUNbFR ESSENTIALLY IINCHANGEI) wEAKEH COMPARED TO THREE MONTHS AGO STRONGERP ESSENTIALLY UNCHANbELD WEAKER 2OMpaRFO TO rHkEk MONTHS AGO STRONGPR ESsENTIALLY UNCHANGED wEAKER MUI TI-FAMILY MORTGAGE q L1q *3 LOANS WIlLINGNESS TO MAKF ALL OTHEN MNkOAGa LO&4S o4 ?4 3 (1 WILLINGNESS TO HIKE PAITICIPATON LOANS COPkkFPONOENT HANKS 46 4h 7 20 wtILINrNESS TO MAKE LOANS TO RWnKERS ab 3A 11 p 1e 1 WITH I In (I NOT FOR QUOTATION PUBLICATION OR TAHLF r, (CONTINIIED) TABLE 5 (CONTINUED) A CROSS-CLASSIFICATION OF SELECTED RESPONSES AUG. 15, 1973 NUL'FR OF RANKS STL)INIGTH IF )EANI' INnUST0AL LOANAS aNTICTPATFO FOR COMwERCTAL nEAhNO IN NEXT 3 MONTH; STRUNF A ESSENTIALLY UNCHANGED wEAKER J)EMAN) IN NEXT 3 MONTHS S TRUI6 F N ESSENTIALLY lJNrHANGED -N ArEw APTICIPATET ANTICIRATti) SURVEY THE AUGUST SURVFY A116ST A OAUST 1973 N(JMRF OF RANKS ESSFNTIALLY UNCHANGED FIRM ER FASIER DJEMAND IN NEXT I 4ONTHS STNuNbFP ESSENTTALL Y UNCHA'4,LU wEAKEN ftMANO IN NEXT 3 MONTHS STRONGER ESSENTIaLLY LJNCHANGEIJ .EAKFR CnoMENSATINr OR SUPPORTING BALANCES 45 1 i STANDARDS QEIIANO IN NEAT 3 IONTHS ST8ONGFR ESSENTIALLY ULNCHANGED WEAKFN OF CREDIT 24 24 -40 6 5 MATURTTY '2 OF TERM LOANS 6 NP w CUSTOMErS 53 7 49 9 WORTHINESS 0 0 0 31 5 ( n 2f) ("AIONCAPTTVF FINANCE COMPANIES') ESTARLISHING NEW OR LARGER CREDIT LINES 51 Q 0 38 15 1 7 4 0 LFSS ANTIrIRAATEL IS AND ANTICIRATED DEMAND IN NEXT 3 MONTHS STRnN GE SSNIIALLY LNCHANGED %P-AEAF AF TICIPATFI) IN ESSENTIALLY INCHANGED MORE WILLINGNESS TO MAKE TFM IDANS TO RSINESSES 41 18 1 36 18 0 6 5 0 SUPPLEMENTAL APPENDIX B SURVEY OF TIME AND SAVINGS DEPOSITS - JULY 31, 1973 The July 31, 1973, Survey of Time and Savings Deposits (STSD) indicates that a large percentage of insured commercial banks raised their offering rates on all categories of time and savings deposits following the early July change in Regulation Q ceilings. Of those banks offering various classes of deposits, more than two-thirds were offering the ceiling rate on most deposit categories, with the highest proportion of deposits at ceiling rates accounted for by the longer-term deposits (Table 1). A smaller proportion of banks was offering the ceiling rate on passbook accounts, especially among the large banks; this apparently reflected a strategy of attempting to minimize interest costs on the stock of liabilities owned by the least interest-sensitive (or most liquid conscious) depositors, while offering more attractive rates to the more interest-sensitive depositors. However, about 17 per cent of sample banks planned to increase offering rates on deposits after the July 31 date of the survey, including higher rates on passbook accounts (Table 2). Only 38 per cent of insured commercial banks were issuing the new four year certificates exempt from Regulation Q ceilings (Table 3). Even though over 75 per cent of the larger banks were issuing these certificates, the 35 per cent of the banks with total deposits of less than $100 million issuing four year certificates were able to attract 40 per cent of the total amount of such deposits issued (Table 4). The relatively greater inflows at the smaller banks may reflect their higher offering rates. While banks with deposits over $100 million offered, on average, 7.165 per cent in four year certificates, the smaller banks' average offering rate was 7.244 per cent; these higher rates were probably designed to offset the competitive edge of the larger banks. Table 5 compares offering rates on the four year certificates at all insured commercial banks to FDIC-insured mutual savings banks and a sample of savings and loan associations. As indicated in the upper panel, while only 5 per cent of commercial banks were offering over 7.5 per cent, almost 17 per cent of the savings banks and 10 per cent of a sample of large S&L's were offering over this rate. As noted in the lower panel, the commercial banks offering over 7.5 per cent accounted for less than 10 per cent of all the four year certificates issued by commercial banks; at the FDIC-insured mutual savings banks, institutions offering over 7.5 per cent accounted for over 40 per cent of the outstanding four year certificates of savings banks at the end of July. Comparable data are not available for S&L's. * Prepared by Steven M. Roberts, Economist, Banking Section, Division of Research and Statistics. - B2 - In the three months ended July 31, 1973 (covering the period since the last STSD survey), all commercial banks gained $3.5 billion of small denomination time and savings deposits, IPC (Table 6); the table excludes the inflow of over $12 billion of time deposits in denomination of over $100,000 at insured commercial banks. All of the gain in small denomination deposits was at smaller banks; larger banks lost small denomination deposits in this period as their more interestsensitive deposits shifted to market securities.1/ In the three month period ending July 31, banks of all sizes apparently had massive conversions of shorter-term certificates (line 3a) to longer-term certificates (line 3b)--mostly the new four year certificate (line 3c). GEOGRAPHICAL DISTRIBUTION Table 7 to 10 provides STSD data by Federal Reserve District. Table 7 suggests the proportion of banks offering ceiling rates was similar in all districts except Minneapolis. The Boston, Atlanta, and San Francisco districts had the largest proportion of banks offering four year certificates. Table 8 indicates that San Francisco banks were offering the lowest average rates on four year certificates and Atlanta banks the highest average rate on such deposits. Table 9 also indicates that Atlanta, Boston, Chicago, and Dallas had the largest number of banks offering over 7.5 per cent on four year certificates. Finally, Table 10 indicates that 60 per cent of all outstanding four year certificates outstanding at the end of July were at banks in the Atlanta, Chicago, New York and Philadelphia Districts. 1/ In August, after the date of the survey, these large banks again lost funds. From August 1 through August 29, the 328 weekly reporting banks had a net decrease in consumer type time and savings deposits of $134 million. Their savings deposits continued to decline (by $1,056 million), but their IPC small-denomination time deposits rose by $922 million; this latter increase reflected four year certificate growth of $1,008 million. STSD Special Table 1 Regulation Q Ceiling Changes and the Percentage of Issuing Banks Paying New Ceiling Rates on Small Denomination Time and Savings Deposits by Bank Size as of July 31. 1973 Regulation Q Ceilings Percentage of Issuing Banks at New Q Ceilings (b) Deposits of 100-500 500 Million million or more With Total New Total less than 100 million 4.5 5.0 63.8 63.9 65.3 55.1 90 Days to 1 year 5.0 5.5 65.9 65.7 72.5 69.7 1 to 2-1/2 years (a) 6.0 65.9 65.5 74.8 73.8 2-1/2 to 4 years (a) 6.5 85.8 85.9 86.1 80.2 Maturity Savings Old Time Deposits: (a) 5.5 % for Deposits 1 to 2 years and 5.75%forDeposits 2 years or more. (b) Memo: See Table 3 for number of issuing banks. A significant number of banks in the STSD sample expected to make rate changes to the new Q Ceilings effective after the Survey date. Their responses are summarized in Table 2 and are not included in the above data. Preliminary. 2 STSD SPECIAL TABLE Sample Banks Reporting Changes in Maximum Interest Rates Offered on Various Classes of Time and Savings Deposits to be Effective After the Survey Date, July 31, 1973 (Number of Banks in sample which Reported) ~ FEDERAL RESERVE DISTRICT Number of Banks Rates to Be Increased to Q Ceiling DI nonmnat-nn ------------- Responding Savings Less than one year -r-Member Banks Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco less than One to 2-112 vears T10.T00 2-1/2 to 4 vpyear Four Years or Over Denomination of $1.000 to $100.000 4 1 New Offering ---- Increase RateE _-;;i Decrease ~---I 7 25 10 7 7 18 23 5 14 4 5 11 hnemmer Total 284 111 136 144 91 53 6 11 Non Member 124 81 92 99 78 15 - 1 To al 408 192 228 243 169 68 6 12 Rates STSD Special Table 3 Number and Percentage of Insured Commercial Banks Issuing Small Denominations Time and Savings Deposit by Deposit Maturity and Bank Size as of July 31, 1973 With Total Deposits of Total Maturity Snvings t anks I, suing ior cent of Total less ta" ,11 l M. nn 100-5D0 m.. m.linn 500 million or more # Banks Tsnn,,n Per cent nf Tntal f# Banks Tasutino Per cent f Total # Banks T-Ranin Per cent of Total 13,575 97.7 12,853 97.6 544 99.5 178 100.0 90 days to 1 year 13,142 94.5 12,419 94.2 545 99.8 178 100.0 1 to 2-1/2 years 13,160 94.7 12,446 94.5 539 98.7 175 98.3 2-1/2 to 4 years 8,067 58.0 7,437 56.5 467 85.5 162 91.0 5,249 37.8 4,689 35.6 419 76.7 140 79.1 Time Deposits: 4 r'enrs or over $1,000 minimum Total Number of Banks Preliminary. 13,901 13,177 546 178 STSD SPECIAL TABLE 4 Frequency Distribution of Interest Rates Being Paid, and Amount Outstanding of Small Denomination Time Deposits With Original Maturity of Four Years or Over at All Insured Commercial Banks by Size as of July 31, 1973 (Millions of dollars, not seasonally adjusted) WITH TOTAL DEPOSITS OF Less than Rate Class (per cent) Those not Issuing 5.500 or less 5.501 to 6,000 6.001 6,501 6.751 7.001 7.251 7.501 7.751 8,001 8.251 to to to to to to to to to 6,500 6,750 7.Q00 7,250 7.500 7.750 8,000 8.250 8,500 8.501 to 8,750 8.751 to 9,000 Total those issuing Memo: Average issuing rate Total # Bank Amount Banks 100-500 100 million Amount Banks 500 million million Amount Banks or more # #Banks Amount Amount 8,651 13 8,488 0 127 0 37 13 38 103 55 132 29 85 15 8 5 14 13 68 5 5 27 56 97 77 2,982 522 1,146 67 197 3 14 92 11 1,262 371 1,081 27 180 35 57 67 71 2,702 448 1,030 60 184 0 11 63 8 528 123 412 22 122 0 4 22 5 208 52 89 5 13 2 3 25 3 263 82 200 4 51 16 53 8 0 71 21 27 1 1 1 0 4 0 471 166 469 1 7 19 0 0 6 0 2 0 6 0 0 0 0 0 0 0 0 3,309 4,689 1,311 419 779 140 00 2 5,249 7.197 Includes those banks which are no longer issuing. Preliminary. 7.244 7.196 7.146 1,219 - B7 - Table 5 Percentage Distribution of Offering Rates and Amounts at Commercial Banks, Mutual Savings Banks, and Savings and Loan Association (As of July 31, 1973) Offering Rates Insured Commercial 332 FDIC-Insured Mutual Savings Banks Banks (Per Cent) Sample of 273 1/ Savings & Loan Associations- ( Number of Institutions ) Under 7.0 7.0 7.25 7.50 7. 75 8.00 or more 13. 9 48.9 9.9 21. 8 1.3 4.2 Total Memo: Percentage of Institutions 9.8 46.5 11.0 14. 1 14. 1 2.7 40. 0 21 0 30.0 4.0 6.0 100.0 100.0 100 0 38.7 57.4 n.a. offering 4 year certificates (Amount Outstanding) 44.7 18. 1 11.2 32. 7 0.8 8.4 'nder 7.0 7.0 7.25 7.50 7.75 8.00 or more 2.3 7.4 35. 1 5.7 100. 0 Total n. a. n. a. n.a. n.a. n.a. n.a. 6.2 43.3 n. a. 100.0 Memo: Dol'ar Current Outstand ini 1/ samp. accounting S 3.3 billion for 38 per cent $ 2.0 billion of Savings and Loan deposits. $ 1.4 billion - B8 - Table 6 Net Changes in Small Denominations IPC Time and Savings Deposits at all Insured Commercial Banks April 30, 1973 to July 31, 1973 (Million of Dollars, Not Seasonally adjusted) Deposit Class Total Banks with Deposits of less than $100-$500 $100 million million $500 million and over 1. Total IPC Time and Savings Deposits in Denominations of less than $100,000 3 553 2. 3. 1,786 1,761 2,387 1,639 -311 -3,173 4,940 -904 2 543 -545 998 -1,725 1,399 3,322 1,311 779 1,232 3a. 3b. 3c. SAVINGS (Total) TIME DEPOSITS With Original Maturity of: less than 1'year 1 year or more Memo: 4 year certificates included in line 3b 1/ -616 453 -290 -326 1/ Four-year certificates are outstandings as of July 31. Weekly Reporting bank data suggest that about $600 million of these deposits were outstanding as of the end of June prior to the change in Regulation Q. * Preliminary. STSD Special Table 7 Number of Banks Issuing and Of Those Banks , Per cent Which are at New Q Ceiling Rates By Districts July 31, 1973 Districts Total # Banks in Districts Savings # Banks 7 Issuing Issuing at Ceilin 90 Days to 1 Year # Banks % Issuing suing tIssuing Ce ng SI I to 2-1/2 years # Banks 7% Issuing at Ceiling 2-1/2 to 4 Years # Banks % Issuing Issuing at Cpiling 4 Yes # Banks Issuing or Moe (1000 % of Total Boston 378 370 82.6 332 56.9 258 54 3 195 76 4 224 59 3 New York 506 503 52.7 504 49.0 476 50.6 334 62.0 213 42.1 Philadelphia 425 425 30.8 374 46.0 377 41.9 209 73.2 187 44 0 Cleveland 774 772 57.9 718 54.5 711 46.8 466 88.4 329 42 5 Richmond 747 747 70.3 654 75 2 690 76.8 401 88.8 260 34 8 Atlanta 1,764 1,764 63.2 1,709 73.7 1,655 74.6 1,122 89.5 1,051 59 6 Chicago 2,619 2,619 61.7 2,465 70.8 2,550 69.4 1,727 84.8 1,135 43 3 St. 1,398 1,290 62.5 1,340 75.1 1,343 72 9 714 95 0 348 Minneapolis 1,383 1,374 33.5 1,286 24.6 1,383 28.5 439 54.0 134 9 7 Kansas City 2,118 1,970 80.5 2,030 75 1 2,048 80.4 1,215 93.0 708 33 4 Dallas 1,390 1,341 93.1 1,352 78.8 1,296 75,5 936 92 2 426 30.6 398 398 59 3 377 67.9 377 72.7 316 84.8 234 58 8 13,900 13,573 63 8 13,141 65.9 13,164 65 9 8,074 85.8 5,249 Louis San Francisco All Insured Commercial _/ There is no ceiling on rates for deposits ot four years or more with minimum denominations of $1,000. of deposits and the percentage of banks represented, regardless of issuing rates, are presented Preliminary. 24.9 37.8 The number of banks issuing these types u .i/ ainimumY STSD Special Table 8 Frequency Distribution of Interest Rates Being Paid and Amount Outstanding of Small Denomination Time Deposits with Original Maturity of Four Years or Over at all Insured Commercial Banks by Federal Reserve Districts as of July 31, 1973 not seasonally adjusted) (Millions of dollars, Federal 6.500 or less Reserve No. District Banks Boston New York 6.501-7.000 7.001-7.250 Banks Amt. Banks Amt. 12 44 21 91 35 119 17 86 85 25 7.251-7.500 No. No. No. Amt. 19 41 7.501-8.000 Amt. Banks Att. 45 21 30 160 46 2 13 3 Banks Over 8.001 Total Avg. No. No. No. Amt. Rate Aml. Bank 1 1 9 19 224 213 109 400 7.04 7.01 Banks Philadelphia 12 30 88 103 1 9 82 186 4 28 0 0 187 356 7.22 Cleveland 26 11 264 159 6 11 27 99 5 10 0 0 329 290 7.14 Richmond Atlanta 5 54 7 54 124 451 14 148 48 185 49 143 75 261 87 110 8 90 9 82 0 11 0 66 260 1051 166 604 7.30 7.31 Chicago St. Louis 10 0 2 0 696 294 376 45 102 16 58 11 269 37 185 19 54 1 43 1 2 0 1 0 1135 348 664 76 7.22 7.17 Minneapolis 0 0 76 23 17 4 41 18 0 0 0 0 134 44 7.22 Kansas City 35 2 530 137 15 5 122 64 6 2 0 0 708 210 7.15 Dallas San Francisco 33 7 43 18 183 197 18 146 16 6 19 3 147 20 107 16 44 4 9 7 4 0 4 0 426 234 199 190 7.21 6.97 238 279 3057 1272 522 372 1147 1081 264 207 19 99 5249 3309 TOTAL Preliminary. STSD Special Table 9 * Percentage Distribution of Interest Rates Being Paid and Amount Outstanding of Small Denomination Time Deposits with Original Maturity of Four Years or Over at all Insured Commercial Banks by Federal Reserve Districts as of July 31, 1973 Federal Reserve District _ Boston New York 6.500 or less No. Amt. Banks 6.501-7.000 No. Amt. Banks 7.001-7.250 No. Amt Banks Over 8.001 7.251-7.500 -7.501-8.000 No. No. No. Amt. Banks Amtt Banks Banks Amt. 5.4 20.7 19.3 22.8 15.6 55.9 15.6 21.5 37.9 11.7 17.4 10.3 20.1 9.9 27.5 40.0 20.5 0.9 11.9 0.8 Philadelphia Cleveland 6.4 7.9 8.4 3.8 47.1 80.2 28.9 54.8 0.5 1.8 2.5 3.8 43.9 8.2 52.2 34.1 2.1 1.9 Richmond Atlanta 1.9 5.1 4.2 8.9 47.7 42.9 8.4 24.5 18.5 17.6 29.5 23.7 28.8 24.8 52.4 18.2 Chicago St. Louis 0.9 0 0.3 0 61.3 84.5 56.6 59.2 9.0 4.6 8.7 14.5 23.7 10.6 27.9 25.0 Total No. Amt. Banks 0.5 0.9 8.3 4.6 100.0 100.0 100.0 100.0 8.0 3.5 0 0 0 0 100.0 100.0 100.0 100.0 3.1 8.6 5.5 13.6 0 1.0 0 11.1 100.0 100.0 100.0 100.0 4.8 0.3 6.5 1.3 0.3 0 0.2 0 100.0 100.0 100.0 100.0 Minneapolis 0 0 56.7 52.3 12.7 9.1 30.6 38.6 0 0 0 0 100.0 100.0 Kansas City 4.9 1.0 74.9 65.2 2.1 2.4 17.2 30.5 0.9 0.9 0 0 100.0 100.0 Dallas San Francisco 7.7 3.0 21.6 9.5 43.0 84.2 9.0 76.8 3.8 2.6 9.5 1.6 34.5 8.5 53.8 8.4 10.3 1.7 4.5 3.7 0.7 0 1.6 0 100.0 100.0 100.0 100,0 TOTAL 4.5 8.4 58.2 38.4 9.9 11.2 21.9 32.7 5.0 6.3 0.5 3.0 100.0 100.0 Preliminary. STSD SPECIAL TABLE 10* Small Denomination Time Deposits With Original Maturity of Four Years or Over Number of Banks Offering and Amount Outstanding - Insured Commrcial Banks by Federal Reserve District and Deposit Size as of July 31, 1973 (Millions of dollars, not seasonally adjusted) WITH TOTAL DEPOSITS OF Federal Reserve District Total # Banks Less than 100-500 100 million million 500 million or more Amount # Banks Amount # Banks Amount # Banks Amount 224 213 109 400 188 136 34 32 30 53 34 120 8 24 41 247 Philadelphia 187 356 138 57 37 127 13 172 Cleveland 329 290 281 72 31 50 15 168 Boston Now York 260 166 217 48 32 58 11 59 Atlanta 1,051 604 988 333 52 185 11 86 Chicago St. Louis 1,135 348 664 76 1,036 330 293 58 78 13 124 5 20 5 247 14 Minneapolis Kansas City 134 708 44 210 123 677 21 186 7 26 9 19 3 5 14 5 Dallas San Francisco 426 234 199 190 396 180 147 29 27 32 23 25 3 22 29 135 5,249 3,309 4,689 1,311 419 779 141 1,219 Richmond Total Preliminary. 

Federal Reserve (1973, September 17). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19730918_part3

@misc{wtfs_greenbook_19730918_part3,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1973},
  month = {Sep},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19730918_part3},
  note = {Retrieved via When the Fed Speaks corpus}
}