Greenbook/Tealbook

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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 December 14, 1973 By the Staff Board of Governors of the Federal Reserve System A - 1 APPENDIX A: QUARTERLY SURVEY OF CHANGES IN BANK LENDING PRACTICES November 1973 The large majority of the 125 banks reporting in the November 15, 1973, Quarterly Survey of Changes in Bank Lending Practices were following essentially unchanged policies from three months earlier, when most banks reported that their policies had firmed. (See Table 1.) However, a significant minority of banks reported that their policies had firmed moderately in the most recent period, but a few banks did report some easing. In the preceding survey, virtually no easing was reported. Loan demand at the vast majority of banks had remained unchanged or weakened, and these trends generally were expected to continue. Detailed examination of the responses to the survey, though, revealed that the moves toward tightening seemed to represent lagged responses of banks to stronger loan demands in previous periods as well as increased demands for credit in the current period. There were modest moves toward greater firmness in nonprice terms of lending such as compensating balances and standards of credit worthiness. Banks also had a somewhat more stringent attitude toward new and nonlocal customers and scrutinized more closely the value of loan applicants as depositors or as a source of collateral business. There were no significant divergences between the policies of smaller and larger banks with respect to price and nonprice terms of lending (Table 2). Regionally, the pattern was fairly consistent as bankers generally were guided by policies adopted earlier this year (Table 3). *Prepared by Paul W. Boltz, Economist, Banking Section, Division of Research and Statistics. NOT FOR QUOTATION OR PUBLICATION TABLE 1 QUARTERLY SURVEY OF CHANGES IN BANK LENDING PRACTICES AT SELECTED LARGE BANKS IN THE U.S. 1/ (STATUS OF POLICY ON NOVEMBER 15, 1973 COMPARED TO THREE MONTHS EARLIER) (NUMBER OF BANKS & PERCENT OF TOTAL RANKS REPORTING) MUCH STRONGER TOTAL BANKS PCT RANKS PeT MODERATELY STRONGER ESSENTIALLY UNCHANGED MODERATELY WEAKER BANKS RANKS BANKS PCT PCT PCT MUCH WEAKER BANKS PCT STRENGTH OF DEMAND FOR COMMERCIAL ANn INDUSTRIAL LOANS (AFTER ALLOWANCE FOR BANK'S USUAL SEASONAL VARTATIO) COMPARED TO THREE MONTHS AGO ANTICIPATED DEMAND IN NEXT 3 MMNTHI 125 100.0 0 0.0 22 17.6 53 42.4 50 40.0 0 0.0 124 100.0 1 0.8 16 12.9 69 55.7 37 29.8 1 0.O ANSWERING QUFSTION RANKS PCT MUCH FIRMER POLICY RANKS PCT MODERATELY FIRMFR POLIY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY BANKS RANKS BANKS PCT PCT PCT MUCH EASIER POLICY BANKS PCT LENDING TO NONFINANCIAL BUSTNESSFS TERMS AND CONDITIONS: M INTEREST HATES CHARGED 12b 100.0 9 7.2 27 21.6 60 48.0 29 23.2 0 0.0 COMPENSATING OR SUPPORTING BALANCE 124 100,0 4 3.P 18 14.q 98 79.1 4 3.2 0 0.0 STANDARDS OF CREDIT WORTHINESS 124 100.0 4 3.2 20 16.1 98 79.1 2 1.6 0 0.0 MATURITY OF TERM LOANS 124 100.0 1 0.R 16 12.9 99 79.8 8 6,5 0 0.0 ESTABLISHED CUSTOMERS 125 100.0 1 0.8 15 12.0 96 76.8 13 10.4 0 9.0 NEW CUSTOMERS 125 100.0 9 7.2 30 24.0 65 52.0 21 16.8 0 0.0 125 100.0 1 nR 16 12.8 94 75.2 14 11.2 0 0,0 125 100.0 10 8.0 25 20.0 78 62.4 12 9.6 0 0.0 REVIEWING CREOIT LINES OR LOAN APPLICATIONS LOCAL SERVICE AREA CUSTOMERS NONLOCAL SERVICE AREA CUSTOMERc 1/ SURVEY OF LENDING PRACTICES AT 12f AS OF NOVEMBER 159 1973. LARGE HANKS REPORTING IN THE FEDERAL RESERVE QUARTERLY INTEREST RATE SURVEY NOT FOR QUOTATION OR PUBLICATION TABLE 1 ANSIERING QUFSTION RANKS PCT (CONTINUED) MUCH FIRMER POLICY RANKS PCT MODERATELY FIRMER POLIrY BANKS PCT FSSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY RANKS BANKS PCT PCT MUCH EASIER POLICY BANKS PCT FACTORS RELATING TO APPLICANT 2/ VALUE AS DEPOSITOR OR SOURCE OF COLLATERAL BUSINESS 125 100.0 17. 90 72.0 INTENDED USE OF THE LOAN 125 100.0 13.6 96 76.8 INTEREST RATES CHARGED 100.0 13.6 88 70.4 COMPENSATING OR SUPPORTING HALANCF 100.0 113 90.4 1.6 ENFORCEMENT OF BALANCE PEQIIRE-4ENTR 100.0 13.6 101 80.8 1.6 100.0 12.0 88 70.4 9.6 LENDING TO TERMS AND "NONCAPTIVF" FINANCE COMPANIES CONDITIONS: ESTABLISHING NEW OR LARGEP CREDIT IINES ANSWERING QUESTION RANKS PCT 6.4 CONSIDERARLY LESS WILLING RANKS PCT MODERATELY LESS WILLING FSSENTIALLY UNCHANGED BANKS RANKS PCT PCT 12.8 MODERATELY MORE WILLING BANKS PCT WILLINNESS TO MAKE OTHFR TYPES OF LOANS 100.0 1.6 12 9.6 92 73.6 15.2 CONSUMER INSTALMENT LOANS 100.0 0.0 2 1.6 105 84.7 12,9 SINGLE FAMILY MORTGAGE LOANS 100.0 7.4 16 13.1 83 68.0 11.5 MULTI-FAMILY MORTGAGE LOANS 100.0 16 13.2 84 69.4 5.8 ALL OTHER MORTGAGF LOANS 100.0 5.7 17 13.R 91 74.0 6.5 TERM LOANS TO RUSINFSSES 11.6 PARTICIPATION LOANS WITH CORRESPONDENT RANKS 125 100.0 1 0.8 11 8.8 99 79.2 LOANS TO 125 100.0 5 4.0 13 10.4 102 81.6 BROKERS 2/ FOR THESE FACTORS, FIRMER MEANS TwE FACTORS WERE CONSIDERED MORE IMPORTANT AND EASIER MFANS THEY WERE LESS IMPORTANT. CREDIT REQUESTS 11.2 IN MAKING DECISIONS FOR APPROVING 4.0 CONSIDERABLY MORE WILLING BANKS PCT NOT FOR QUOTATION OR PUBLICATION TABLE 2 COMPARISON OF QUARTERLY CHANGES IN BANK LENDING PRACTICES AT BANKS GROUPED BY SIZE OF TOTAL (STATUS OF POLICY ON NOVEMBER 15, 1973, COMPARED TO THREE MONTHS EARLIER) (NUMBER OF BANKS IN EACH COLUMN AS PER CENT OF TOTAL BANKS ANSWERING QUESTION) SIZE TOTAL OF RANK MIUCH STRONGER $1 UNDFH 1oo Inn 0 0 1o0 Iion 2 0 & nvr TOTAL OFPOSITS MODERATELY STRONGER S1 & OVER $1 -- UNnER ;1 i$ & OVER UNDER SI DEPOSITS 1/ IN BILLIONS ESSENTIALLY UNCHANGED MODERATELY WEAKER $1 & OVER Sl & OVER UNDER 51 UNDER Si MUCH WEAKER 51 & OVER UNDER Sl STRFNGTH OF IEMAND FOR COMMERCIAL AN INDUSTRIAL LOANS (AFTER ALLOWANCE FOR RANK'S USUAL SEASONAL VARTATIOt) COMPARED TO ANTICIPATED THREE MONTHS DEMANP IN AGO NFXT 3 MONTHs TOTAL sI & LENDING TO NONFINANCIAL IJNnFP MUCH FIRMER 1l & OVFR MODERATELY FIRMER UNPER 1l $1 & OVER IUNDFR $1 FSSENTIALLY UNCHANGED MODERATELY EASIER «1 & OVER $1 & OVER UNDER $1 UNDER 51 MUCH EASIER SI & OVER UNDER 51 0 VER $1 100 100 In 15 50 46 31 17 Inn Io 4 9 R3 76 6 1 0 0 0 0 HIISTNESSFS TERMS AND CONDITIONS: INTEREST RATES CHARbEO COMPENSATING OR SUPPORTING MALANCES STANDARDS OF CREDTT wnRTHINESS 85 75 4 0 0 MATURITY OF TERM LOANS 90 72 6 7 0 REVIEWING CREDIT LINES OR LOAN APPLICATIONS ESTABLISHED CUSTOMERS 7 15 78 77 15 7 NFW CUSTOMERS 100 100 9 2P 53 51 22 13 LOCAL SERVICE AREA CUSTOMFRS 100 100oo 7 17 76 75 17 7 NONLOCAL SERVICE 100 100 7 23 64 60 17 4 ARFA CUSTOMERS 1/ SURVEY OF LENDING PRACTICES AT 5S LARGE BANKS (DEPOSITS OF $1 RILLION OR MORF) AND 71 SMALL BANKS (DEPOSITS OF LESS THAN 19 HILLION) REPORTING IN THE FFDERAL RESERVE QUARTERLY INTEREST RATE SURVEY aS OF NOVFMBER 159 1973. NOT FOR QUOTATION OP PUBLICATION TAB'.E 2 (CONTINUED) 1I7t OF RANK MUCH FIRMEP POLICY NUMBER ANSWERING OUESTION $1 & OVFR FACTORS RELATING TO APPLICANT inn INTENDED USE OF THE LOAN 100 TO "NONCAPTIVE" 1 .1 & OVER UNnER 191 $1 & OVER UNDER $1 Sl & OVER UNDER $1 $1 & ()VER UNDER $1 MUCH EASIER POLICY 51 & OVER UNDER 1S 2/ VALUE AS DEPOSITOR OR SOURCE OF COLLATERAL PUSINESS LENDINb UNDER S1 -TOTAL DEPOSTTS IN BILLIONS 0ODERATELY FSSENTIALLY MODERATELY EASIER FIRMFR UNCHANGED POLICY POLIrY POLICY 100 0 0 n10 FTNPNCE rOMP-NIFS TERMS ANO CONDITIONq: INTEREST RATES CHARGfD COMPENSATING OR SUPPORTING HALANCE; ENFORCEMFNT OF HALANCF REOUIRF"ENT(; ESTABLISHING NEW OR LARGER CREnIT LINES NUMREFP ANSWERING QUPSTTON & $1 OVER UNOFR $1 CONSIDERARLY LFSS WILLING $1 & OVER UNnFR 41 MODERATELY LESS WILLING $1 & OVER UNDFR S1 FSSENTIALLY UNCHANGED 51 & OVER UNDER Sl MUDERATELY MORE WILLING 51 & OVER UNDER S1 WILLINGNESS TO MAKE OTHER TYPES OF LANS TERM LOANS TO RUSTNFSSFS CONSUMER SINGLE INSTALMENT LOANS FAMILY MORTGAGF LOANS MULTI-FAMILY MORTGAGE LOAMS ALL OTHER MORTGAbF LOANS PARTICIPATION LOANS WITH CORRESPONDENT BANKS LOANS TO BROKERS loo 100 100 Ion 100 10 e/ FOR THESE FACTORS, FIRMER MEA"IS THE FACTORS WERE CONSIDERED MORE CREDIT REQUESTS9 AND EASTER MFANS THEY WERE LESS IMPORTANT. 81 78 85 79 IMPORTANT IN MAKING DFCISIONS FOR APPROVING CONSIDERABLY MORE WILLING S1 L OVER UNDER Sl NOT FOR QUOTATION OF PUBLICATION TABLE 3 QUARTERLY SURVEY OF CHANGES IN BANK LENDING PRACTICES AT SELECTED LARGE BANKS IN THE U.S. STATUS OF POLICY ON NOVEMBER 15, 1973 COMPARED TO THREE MONTHS EARLIER (NUMBER OF RANKS) ALI. DSTS NEW YORK BOSTON TOTAL CITY OUTSIDE PHILADFL. CLEVE- RICHLAND MONO ATLAN- CHICAGO TA ST. LOUIS 1/ MINNE- KANS. CITY APOLIS DALLAS SAN FRAN STRENGTH OF DEMAND FOR COMMERCIAI ANII INDUSTRIAL LOANS (AFTER ALLOWANCE FOR BANK'S USUAL SEASONAL VARIATION) COMPARED TO 3 MONTHS AGO MUCH STRONGER MODERATELY STRONGER ESSENTIALLY UNCHANGED MODERATELY WEAKFR MUCH WEAKER ANTICIPATED DEMAND NEXT THREt MONTHS MUCH STRONGER MODERATELY STRONGFR ESSENTIALLY UNCHANGED MODERATELY WEAKER MUCH WEAKER 12'4 n 2> 51 5n 0 6 1 1 0 0 2 10 f 0 0 0 4 5 0 0 2 6 3 0 0 ] 1 0 0 0 5 6 0 1 3 3 1 0 0 4 11 5 0 0 1 6 ? 0 0 3 5 3 0 0 1 4 1 0 0 0 9 2 0 2 2 4 0 0 2 4 10 4 0 1 6 ? 0 2 0 3 4 2 0 1 4 1 0 1 4 3 0 0 1 5 13 1 0 0 0 8 1 0 1 5 5 0 0 0 A 0 0 p 5 a 0 0 2 4 3 0 O 0 3 0 0 0 1 5 3 0 0 3 4 2 0 0 0 4 9 0 2 3 4 1 0 3 4 B 0 0 1 7 1 0 0 0 2 1 0 0 0 5 4 0 0 1 6 1 0 0 1 9 3 0 0 6 6 0 0 0 3 6 1 0 2 1 7 5 0 2 1 4 2 0 0 1 2 0 O 0 1 4 4 0 1 3 3 2 0 0 2 3 8 0 2 10 0 0 2 8 0 0 0 14 0 0 1 0 8 0 0 0 0 3 0 0 0 1 7 0 0 0 2 7 0 0 0 2 9 2 0 0 2 5 5 0 0 3 4 3 0 0 0 6 6 0 0 2 7 2 0 0 0 10 1 0 0 2 124 1 1A AJ 37 1 0 LENDTNb TO NONFINANCIAL BUSINESSES TERMS AND CONDITIONS INTEkFST RATES CHARGED MUCH FIRMER POLICY MODERATELY FIRMFR POLICY ESSFNTTALLY UINCHANGEI) POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY COMPENSATING BALANCES MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGFD POLICY MODERATELY EASIFR POLICY MUCH EASIER POLICY 17? 4 27 (i 20 ' 124 1 94 0 1/ SURVFY OF LENDING PRACTICES AT 12b LARGE BANKS REPORTING IN THE FEDERAL RESERVE QUARTERLY AS OF NOVEMBER 15. 1973. INTEREST RATE SURVEY a o NOT FOR QUOTATION OR PUBLICATION TABLF 3 ALI DSTs 8OSTON NFW YORK TOTAL CITY OUTSIDE (CONTINUED) PHTLAnFL. CLEVE- RICHLAND MOND ATLAN- CHICTA AGO ST. LOUIS MINNE- KANS. CITY APOLIS DALLAS SAN FRAN LENDIN6 TO NONFINANCIAL BUSINESSES TERMS AND CONDITIONS STANDAROD OF CREDIT WORTHINESS 124 MUCH FIRMER POLICY MODERATELY FIRMFR POLICY FSSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY 4 2" 94 P MATURITY OF TERM LOANS MUCH FIRMER POLICY MODERATELY FIRMFR POLICY ESSFNTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY 1 3 4 0 0 1 5 14 0 0 0 0 q 0 1 5 5 0 0 0 n 1 5 0 0 2 9 0 0 0 3 9 0 0 0 1 9 0 0 1 2 12 0 0 0 2 7 0 0 0 0 3 0 0 1 1 6 0 0 0 0 9 0 0 0 0 11 2 0 0 1 0 2 10 0 0 0 1 9 0 0 0 1 13 1 0 0 2 6 1 0 0 1 2 0 0 1 1 5 1 0 0 0 7 2 0 0 0 12 1 0 0 3 0 1 8 0 0 0 8 1 0 0 0 0 0 1 2 0 0 0 2 5 2 0 0 2 5 2 0 1 2 5 5 0 0 3 0 0 0 2 6 1 0 0 8 1 0 0 0 9 4 0 0 124 1 16 9c f 0 4 4 0 0 0 3 17 0 0 0 0 9 0 0 0 3 8 U 0 0 n 0 4 4 0 1 4 13 2 0n 0 8 1 4 5 1 1 9 n 0 0 0 0 2 2 4 0 0 3 6 8 3 0 0 1 6 2 0 3 5 2 1 0 n 0 3 5 0 0 1 4 13 2 0 0 H 1 0 4 5 1 1 5 n 2 0 0 REVIEWING CREDIT LINES OR LOANq ESTABLISHED CUSTOMERS MUCH FIRrER POLICY MODERATELY FIRMFR POLICY ESSENTIALLY (INCHANGFO POLICY MODERATELY EASIFR POLICY 12" 1 1 9A 11 MUCH FASIER POLICY NEW CUSTOMERS 0 0 0 0 2 8 2 0 9 1 2 11 2 0 0 0 0 0 2 7 2 0 0 5 5 2 0 0 4 5 1 0 1 2 9 3 0 2 0 7 0 0 0 0 10 1 0 0 1 9 2 0 1 A 1 0 2 12 1 0 0 2 6 1 1 8 0 0 0 0 0 9 4 121 MUCH FIRMER POLICY MODERATELY FIRMFR POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIFR POLICY MUCH EASIER POLICY LOCAL SERVICE AREA 0 0 10 1 CUSTOMeRS MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIFR POLICY MUCH EASIER POLICY Q 3' 6 21 ? 1 1 0 121 I' 9q 14 NOT FOR QUOTATION OR PUBLICATION TARLF 3 ALI DSTS NFW YORK HOSTON TOTAL CITY OUTSIDE (CONTINUED) PHTLADEL. CLEVE- RICHLAND MOND ST. ATLAN- CHICTA AGO LOUIS MINNE- KANS. CITY APOLIS DALLAS SAN FRAN LENDING TO NONFINANCIAL BUSINESSES RFVIEWING CREDIT LINFS OR LOAN; NONLOCAL SEWVICF AREA COST 12, MUCH FIRMER POLICY MODERATELY FIHMER POLICY FSSENTIALLY UNCHANGFI POLICY MOOFRATELY EASIFR POLICY MUCH EASIER POLICY 1" ' 7. 1 1 2 5 0 0 3 5 10 2 0 1 1 6 0 0 3 lb n 0 n 1 7 1 0 3 4 3 1 " 1 8 n ? n 9 4 n u 0 2 8 1 0 2 1 7 2 0 0 5 5 0 0 1 4 h 2 0 2 0 7 0 0 0 1 2 0 0 1 1 6 1 0 0 1 7 1 0 0 1 9 3 0 0 1 9 1 0 1 3 8 0 0 1 3 6 0 0 1 3 10 1 0 2 1 6 0 0 0 1 2 0 0 1 1 7 0 0 0 2 7 0 0 1 3 8 1 0 0 1 9 1 0 0 3 1 p? 7 n 0 1 0 0 3 0 0 0 1 7 1 0 0 1 11 1 0 1 1 7 0 0 0 0 0 1 10 2 0 0 1 7 n 0 1 0 11 3 0 1 1 b 2 0 0 1 2 0 0 0 1 6 2 0 0 1 6 2 0 0 1 9 3 0 FACTORS RELATING TO APPIICA'T ?/ VALUE AS DEPOSITOR OR SOUurt OF COLLATFkAL HUSTNFSR 1- MUCH FIRMER POLICY MODERATFIY HIRMFR POLICY FSSENTIALLY IINCHANGFd POLIrY MOUEOATtLY F'SIFR PO ICY MUCH EASIER POLICY INrENnED USF OF LOAN 1' 2/ 9' n 2 7 P 0 A n 0 1" < I ah MUCH FIRMER POLICY MODERATELY FIMMFR POLICY ESSENTIALLY UNCHANGEI Po ICY MODERATELY EASIFR POLICY MUCH EASIbP POLICY 0 22 6 0 0 1 0 15 7 ? 0 0 1 / H 0 0 n 1 r n 1 0 A 8 1 0 P LENDING TO "NONCAPTIVF" FINANCE CO'4PANIFS TFPMS ANO CONDiTInNS IfJTERHFT HATES CHAUGFnO MUCH FIkMRC POLTCY MOURATETY F-IRMFP PnOLICY FSSENTIALI Y 'JNCHANGFI) POLICY MODERATELY FAIFR POLICY MLICH EASIER POLICY 1 1 1? 4, ! 0 7 0 0 1 3 14 2 0 1 0 0 17 6 2 0 2/ FOR THESE FACTORS. FTRMER MFA.S THE FACTOPS WERF CONSIDERFn MORF CREDIT PFOUESTS. AND EASIER MFANS THEY WERF LESS IMPORTANT. n 0 0 2 8 1 0 IMPORTANT IN 0 3 8 1 0 MAKING DFCISIONS FOR APPROVING NOT FOR QUOTATION OR PUBLICATION TABLE 3 ALI nSTS LENnIN, FINANC TEkMq ST7F HOSTON NFW YOHK TOTAL CITY OUTSInE (CONTINUED) PHTLADEL. CLFVE- RICHLAND MOND ATLAN- CHICTA AGO ST. LOUIS MINNE- KANS. APOLIS CITY DALLAS SAN FRAN Tn "I(IOCAPTTVF" COMPANIFS ANtD CONITIUNqI 0E r(O 4oMPFATTNCI RALAICF POLT(Y FITMFR r TCY FSSt NTTALLY IINCHANGFIJ POLICY MOi)F1ATI Y FAkEAIF POLICY 'UC# EAcIFR POLTCY 1?l 4IMUC FTtM-F.R 0 0 8 0 0 0 2 17 1 0 0 n 9 0 0 0 2 8 1 0 n 1 ; 0 2 6 0 0 0 5 15 0 0 0 0 1 0 0 1 1 b 0 0 2 4 11 3 0 1 1 6 0 0 I ? 0 0 10 1A 1 0 0 MOI)FRAT'YF ENFOH('CFINT OF BAL ANCF PFt'lIRPFMFr T F* JI n 114 0 0 1 9 1 0 0 0 12 0 0 0 2 A 0 0 1 0 14 0 0 1 0 8 0 0 0 0 3 0 0 0 1 R 0 0 0 1 8 0 0 0 0 13 0 0 0 5 6 0 0 1 n N A n 0 1 9 1 0 1 0 11 0 0 1 4 5 0 0 1 0 14 0 0 1 0 8 0 0 0 0 3 0 0 0 2 7 0 0 0 1 A 0 0 0 2 10 1 0 1 6 2 0 2 3 5 1 0 1 n 4 1 1 1 8 1 0 0 2 10 0 0 1 2 7 0 0 1 1 11 2 0 1 1 7 0 0 0 0 3 0 0 1 1 6 1 0 0 2 6 1 0 1 0 9 3 0 0 2 14 4 0 0 0 7 2 0 0 .2 7 2 0 0 A n 0 0 0 9 2 0 0 2 9 1 0 0 1 8 1 0 0 1 12 2 1 1 7 0 0 0 1 2 0 0 0 3 4 2 0 0 0 7 2 0 0 0 8 5 0 0 1 15i 3 0 0 0 8 0 0 0 1 7 3 0 n n 6 n 0 0 0 10 1 0 0 0 12 0 0 0 0 7 3 0 0 0 14 1 0 0 1 7 1 0 0 0 3 0 0 0 0 8 1 0 0 0 8 1 0 0 0 7 5 1 I MUCH FIrFP POLTCY MOUFRATkLY FIMFH POLICY ESSIb TTALI Y (UNCHANGFD POI IrY MOOIwATtl Y tASIFW POLICY MUC, FASIFU PLICY ESTAH ISuI1 CREDIT LINFS * 1' 1l'1 - ' I AkrEu MULN FIRMIF POLICY MO(OIfATIY FIRMFR POLICY Er NTIALI Y JINCHANGFU) POLICY MODEPATELY FASIFR POLICY MUCH EPSIFR POLICY I" 1' 1 H1, TO MAHE ITHHR WILLTNGNFS TYPFS OF LOANS TERM LOANS TO RUSINFSSES COhSIDFRABLY LESS WILLIMODERATELY LESS WILLING ESSENTIALLY IJNCHANGEO MOUERATELY MORE WILLING CONSIDERABLY MOPE WILLING CONSUMER INSTALMENT LOANS CONSIDFRABLY LESS WILLING MODERATELY LERS WILLING ESSENTIALLY UNCHANGED MODERATELY MORE WILLING CONSIDERABLY MORE WILLING 12" ,' Ii n' lu .1 I13 NOT FOR QUOTATION OR PUBLICATION TA8LE 3 (I0 805- ALI DST Tc NFW YORK TOTAL CITY OUTSUnE TINIIED) PHILADEL. CLEVE- RICHLAND MONi ATLAN- CHICST. LUI; TA AGO MINNE- KANS. CITY APOIS DALLAS SAN FRAN WILLINGNESS TO MAKE OTHER TYPES OF LOnANS SINGLE AMILY MORTGAF LOANS CONSTnFREARLY LESS wILLING MODERATELY LESS WILLING ESSEATrALLY UNCHANGED MODEPATELY MORE WILLINh CONSIDFkAHLY MORE WILLING MULTIFAMILY MORTGAGE OANS CONSIFRAHLY LESS WILLING MOUF4ATLLY LFSS WILLING -SSE,)TIALLY I)NCHANGFI MOUERATFLY MORE WILLING CONSIDFRAA Y MORE WILLI4N ALL OTHER MORTGAGF LOANS CONSTOERARLY LESS WILLING MOUVRATELY LESS WILLING ESSENTIALLY IINCHANGED MODERATELY MOHRE WILLING (ONSIDFHAHLY MOPE WILLING PARTICIPATION LOANS WITH COPHLSPONDENT RANKS CONSIFRARLY LESS WIILI', MODERATELY LESS WILLING FSENTT4aLLY JNCwANrFl MODEPATELY MORE WILLING CONSIDHARILY MOPE WILLING LOANS TO HROKLRN CONSIDFAHALY LESS 4ILL11' MOI)DERATLY IFhh WILLING FSSINTIALLY JNCHANGFD MODERATELY MOHF WILLING CONSInFAHLY MORE wTLING NIINRFA OF lANKS 122 1 1 0 0 41 8 1% 0 2 3 9 4 0 0 0 0 0 0 8 0 0 1 4 0 0 1 5 1 0 1 0 4 1 7 3 2 0 I 2 0 1 4 12 3 0 A 1 1 1 1 5 1 4 3 n 4 n a 2 2 0 4 9 2 1 7 J 0 2 1 0 2 0 7 0 1 0 6 2 0 1 11 1 0 0 0 0 0 0 0 ? c 6 1 12 4 2 1 6 1 a a a U 2 1 01) 0 n 1 0 a A a 0 n 0 1 0 0 0 0 1 0 4 0 2 9 1 1 7 1 0 7 0 0 3 0 0 8 0 0 0 0 0 11 2 0 14 1 7 0 0 3 0 0 7 0 0 A I 1 0 p 1 1) 0 0 0 0 0 9 4 0 0 0 1 0 0 II 1 0 8 0 11 2 0 0 1 1 2 H 1 0 0 1 I 3 8 1 1 121 14 1' A( 7 6 ' 1 3 4 2 0 n 4 1 1 11 1 123 7 17 91 0 1 7 0 0 12 0 n 4 1 0 1 1 7 1 0 9 n 0 0 0 0 0 0 ( 12 1 11 9go 1' 0 1 7 0 0 8 1 1 4 4 2 0 0 2 1 1 1ll 1 2 A 0 0 0 0 n r 0 2 1 0 2 a 1 9 1 7 2 12 7 3 1 7 0 1 0 n I 0 0 0 0 0 0 0 1P N I 1O> ' 121 0 1 7 0 0 2 17 9 0 1 2 9 0 0 A 1 0 0 0 B-1 SUPPLEMENTAL APPENDIX B* MONTHLY SURVEY OF BANK LOAN COMMITMENTS As reported by 134 banks in the Monthly Survey of Bank Loan Commitments, unused commitments during October grew at a fairly rapid pace comThe growth may in part be reflective of the pared to oher recent months. very slow rate of takedowns in October when the spreads between the commercial paper rates and the prime rate made the commercial paper market attrac-ive to borrowers. Bank customers apparently let their commitments go unused, as outstanding loans under commitments declined slightly over the month. In addition, new commitments advanced briskly compared to the previous month, but the volatility of the series makes interpretation of one-month movements risky. The October data in greater detail, in Table 1, columns 1 and 2, show that unused commitments of commercial and industrial firms grew rather rapidly, which was largely accounted for by a jump in confirmed lines of credit. The unused commitments of nonbank financial institutions also showed rapid growth, even though these institutions drew substantially on their Unused commitments for real estate mortgages, commitments (columns 4 and 5). following the trend of recent months, declined even though new commitments for real estate mortgages increased well above September's level--possibly in anticipation of the large expenditures on plant widely predicted for next year. The reported increase in outstanding mortgages under commitments was modest, but the actual increase was somewhat larger due to loan sales. Table 2 permits a comparison of the most recent figures on unused commitments with such data since the inception of the survey. 1/ Data on unused commitments for July through October 1973, from the 131 banks that reported in all of those months, are presented. Survey information on new commitments and loans under commitments, however, are not shown due to reporting problems in the early months of the survey with those series. Over the entire July-October period, unused C & I commitments increased very little (column 1) while unused commitments for real estate In contrast, nonbank financial institutions, mortgages declined (column 8). reacting to disintermediation earlier perhaps due to thrift institutions this year, built up their commitments from commercial banks appreciably (column 7). 1/ Although the first month of the survey was June, those data were excluded because many banks were unable to provide complete information. - B-2 Interpretation of the commitments data may be aided by analysis of the utilization ratio, defined as the ratio of outstanding loans made under commitments to unused commitments plus outstanding loans under commitments. The ratio is often used by bankers to interpret their position regarding commitments. With growth in unused commitments strong over the month of October, the utilization ratio for all commitments declined, led by the drop in the C & I ratio, as shown in Table 3. Only the utilization ratio for real estate mortgages rose in October in response to the decline of unused mortgage commitments. * Prepared by Paul W. Boltz, Economist, Banking Section, Division of Research and Statistics. Table 1 Monthly Changes in Loan Commitments and Loans Under Commitments at Large U.S. Banks September 30, 1973, to October 31, 1973 (Dollar amounts in billions) Unused commitments-- New commitments One-month changes (1) Amount (2) Per cent 1/ Loans under commitments-One-month changes 2/ (4) (3) Amount (5) Amount Per cent Total commercial and industrial Term loans Revolving credits Total: term and revolving Confirmed lines Other 2.89 .12 .18 .30 2.37 .22 3.6 2.3 1.0 1.9 4.6 5.1 4.44 .75 1.03 1.78 1.72 .89 -1.17 -. 14 .21 .07 -1.28 .05 -1.7 -0.7 1.1 0.2 -4.9 0.8 Nonbank financial institutions 1.16 4.5 .92 .41 2.8 Real estate mortgages -.41 -4.5 1.07 .20e 1.1 Total 3.64 3.2 6.42 -1.06 -1.0 Number of banks = 134 It no New commitments is a different concept from that used in the Quarterly Survey of Bank Loan Commitments. longer includes renewals and cannot account for the total change in unused commitments. 2/ Loans under commitments are those loans made under commitments currently or previously in force, less repayments principal. The change in loans under commitments is thus the net increase in outstanding loans made under commitments over the period September 30, 1973, to October 31, 1973. It is a proxy for takedowns minus repayments. The stock of loans under commitments and its increment over the period are distorted by takedowns of loan commitments by overseas branches of U.S. banks and loan sales. e-- Partially estimated. NOTE: Minor inconsistencies may occur in the figures due to rounding. 1/ Table 2 Unused Commitments at Large U.S. Banks July 1973 to October 1973 (Dollar amounts in billions) Total Ck T C& I C & I term revolving 1 nn C&I term and revolving redi t redA t C & I confirmed Nonbank financial C & I c&I nthsr lines inatitu on Real estate mrt Ca o Total unused commiternts amt. 7 chg. amt. % chg. amt. % chg. amt. % chg. ame. % chg. amt. 7 chg. amt. % chg. amt. % chg. amt. 7 chg. July 31 77.8 -- 5.3 -- 18.1 -- 24.1 -- 50.5 -- 3.2 -- 23.5 -- 9.3 -- 110.6 -- August 31 78.0 0.2 5.7 -0.6 18.6 2.9 23.8 -1.2 51.2 1.4 3.0 -8.0 24.7 5.1 9.4 0.9 112.1 1.4 September 30 77.1 -1.2 5.0 -3.8 17.9 -3.5 23.0 -3.6 51.2 0.1 2.8 -3.7 24.9 0.8 8.9 -4.8 110.9 -1.1 October 31 79.9 3.7 5.2 2.8 18.1 1.0 23.3 53.5 4.5 3.0 6.6 26.1 4.5 8.5 -4.5 114.5 3.2 2.1 2.7 -0.1 -1.9 -- -0.8 -3.3 3.0 5.9 -0,2 -6.3 2.6 11.1 -0.8 -8.6 3.9 3.5 July 1973 - Oct. 1973 change -- Fumber of banks = 134 NOTE: Minor inconsistencies may occur in the figures due to rounding. 1.4 Table 3 Loan Commitments at Large U.S. Banks (Dollar amounts in billions) As of October 31, 1973 Unused Commitments Per Cent Distribution Loans under 1/ Commitments Per Cent Distribution Memo: Sept. 30 Utilization , Utilization 2/ ratio (%)ratio (%) , 82.0 5.9 18.3 23.7 53.9 4.5 69.8 4.6 15.6 20.2 45.9 3.8 68.2 18.3 18.8 37.1 24.8 6.3 65.8 17.7 18.1 35.8 23.9 6.1 45.4 77.2 50.7 61.0 31.5 58.3 46.7 77.7 50.7 61.4 33.6 59.4 Nonbank financial institutions 26.7 22.7 18.1 17.5 40.4 41.0 17.7e 16.6 66.8 65.6 100.0 46.9 47.9 Total C & I commitments Term loans Revolving credits Total: term and revolving Confirmed lines Other commitments Real estate mortgages Total 8.8 7.5 117.5 100.0 104.1 Number of banks = 134 1/ Loans under commitments are those loans made under commitments currently or previously in force, less repayments of principal. 2/ The utilization ratio is the ratio expressed as a percentage of loans under commitments to the sum of unused commitments and loans under commitments. e -partially estinated. NOTE: Minor inconsistencies may occur in the figures due to rounding C- APPENDIX C: 1 DEMAND DEPOSIT OWNERSHIP SURVEY* October, 1973 Demand deposit ownership data for weekly reporting banks indicate a slightly larger increase in gross IPC deposits (not seasonally adjusted) at these institutions in October than in the same The October strength (See Table 1.) month of previous survey years. in IPC demand deposits followed relatively weak growth in September, which is consistent with the pattern of M1 expansion over the SeptemberOctober period. The largest proportion of the increase in total IPC balances at large banks in October occurred in deposits of nonfinancial businesses; but when compared to previous years, this growth appeard to be mostly seasonal. However, the $500 million increase in deposits held by financial businesses was considerably larger than the average October rise in the 3 previous survey years. The unusual pickup in financial institution deposits in October may have reflected in part an increa in balances of thrift institutions which during this period still faced considerable uncertainty about the future direction of thrift deposit flows. Consumer and foreign held IPC deposits at weekly reporting banks--which in previous October surveys have not grown at all-increased by very small amounts in the most recent survey month. *Prepared by Martha Scanlon, Economist, Banking Section, Division of Research and Statistics. C- 2 Table 1 CHANGES IN THE LEVELS OF GROSS IPC DEMAND DEPOSITS BY OWNERSHIP CATEGORY, WEEKLY REPORTING BANKS (Billions of dollars, not seasonally adjusted) Month/ Year Jan. Feb. March April May June July August Sept. October Nov. Dec. Jan. Feb. March April May June July August Sept. October Nov. Dec. FINANCIAL BUSINESS 1970 1971 1972 1973 .1 -.9 .7 -.2 .4 -.1 .4 0 .3 0 -.4 .3 .1 -.8 .5 .1 -.1 .7 0 .7 .3 .3 -.6 .4 .3 -.7 .1 .4 .4 .2 1970 FOREIGN 1971 1972 0 -.2 0 0 -.1 0 0 0 0 0 0 0 0 -.1 0 0 0 .1 -.1 0 .1 0 .1 0 0 0 0 0 0 0 .3 -.7 .1 0 -.5 .4 .6 -.5 .2 .5 1973 0 .2 0 .2 .1 0 .1 0 0 .1 NONFINANCIAL BUSINESS 1970 1971 1972 1973 -.1 0 1.0 -.1 .2 2.2 -1.7 -2.2 .2 .9 - .5 1.3 .5 -1.3 1.2 .9 .3 2.8 1970 ALL OTHER 1971 1972 0 -.5 .6 .3 -.4 .1 0 0 .2 0 -.2 .5 -.6 -.4 .5 -.1 .1 .5 -1.8 -1.4 .5 1.0 - .8 1.1 1.3 -1.1 1.5 1.0 .5 3.9 0 0 .1 -.1 -.2 .3 0 -.2 .4 0 .1 .4 -1.3 -2.8 -1.2 .3 - .2 1.6 .3 -1.6 .9 1.0 1973 .2 -.2 -.2 0 0 -.1 .3 -.4 .4 .1 1970 .3 0 .6 -.3 .2 2.2 1970 .3 -1.5 2.9 - .3 .3 4.5 CONSUMER 1971 1972 .4 -.6 .8 1.4 -1.2 .4 .4 -,5 .3 0 .1 0 .7 -1.0 .6 2.0 -1.6 .4 .4 -.2 .3 0 .4 .5 TOTAL 1971 1972 -1.0 -2.8 1.6 2.4 -2.4 2.5 .4 -3.0 2.4 .8 .3 4.1 -1.2 -3.1 1.6 3.2 -3.2 2.2 2.0 -2.2 2.3 1.4 1.4 5.1 1973 .6 -1.5 .2 2.1 -1.7 .2 .2 0 .1 .1 1973 -.2 -5.1 -1.1 2.6 -2.4 2.1 1.5 -2.6 1.7 1.7 

Federal Reserve (1973, December 17). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19731218_part3

@misc{wtfs_greenbook_19731218_part3,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1973},
  month = {Dec},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19731218_part3},
  note = {Retrieved via When the Fed Speaks corpus}
}