For Release at4:30 P.M. Eastern timeDecember 19, 2002The H.4.1 Statistical Release ("Factors Affecting Reserve Balances of DepositoryInstitutions and Condition Statement of Federal Reserve Banks") has beenreformatted toaccommodate the Federal Reserve's switch from arranging matched sale-purchasetransactions to arranging reverse repurchase agreements.The Federal Reserve began using reverse repurchase agreements, instead of matchedsale-purchase transactions, on December 13. Reverse repurchase agreementssales
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ofsecurities under agreements to repurchaseare fundamentally equivalent to matched
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sale-purchase transactions, and they are commonly used in financial markets. Likematched sale-purchase transactions, reverse repurchase agreements will be arrangedwithforeign official and international accounts and with primary dealers.The accounting treatment of reverse repurchase agreements differs from that ofmatchedsale-purchase transactions. Matched sale-purchase transactions were accounted foras anoutright sale, and the securities sold under these agreements were removed fromsecurities held outright. In contrast, reverse repurchase agreements areaccounted for asfinancing transactions in which the securities pledged remain in total outrightholdings of
securities by the Federal Reserve Banks, and a liability is recognized until thetransactionmatures.For the week ended December 18, the weekly average data for Treasury bills heldoutright incorporate the depressing effect of the matched sale-purchasetransactionarranged on December 12 and the shift to reverse repurchase agreements for theremaining days in the statement week. One-week and one-year changes shown intable 1and in table 2 for Treasury bills held outright and other measures that includetheseholdings are quite large relative to typical movements because of the accountingchanges.FEDERAL RESERVE Statistical ReleaseH.4.1Factors Affecting Reserve Balances of Depository Institutions andCondition Statement of Federal Reserve Banks December 19, 20021. Factors Affecting Reserve Balances of Depository InstitutionsMillions of dollarsAverages ofdaily figuresReserve Bank credit, related items, and Week ended Change fromweek ended Wednesdayreserve balances of depository institutions at Dec 18, 2002 Dec 11, 2002Dec 19, 2001 Dec 18, 2002Federal Reserve Banks
Reserve Bank Credit 692,654 + 21,905+ 65,300 698,649Securities held outright 626,479 + 16,564+ 72,238 629,407U.S. Treasury (1) 626,469 + 16,564+ 72,238 629,397Bills (2) 223,757 + 16,558+ 37,582 226,682Notes and bonds, nominal (2) 389,219 0+ 31,813 389,219Notes and bonds, inflation-indexed (2) 12,242 0+ 2,531 12,242Inflation compensation (3) 1,250 + 5+ 311 1,253Federal agency (2) 10 00 10Repurchase agreements(4) 28,179 + 6,179- 8,414 30,000Loans to depository institutions 55 - 154+ 8 45Adjustment credit 6 - 158- 6 2Seasonal credit 49 + 3+ 14 43Extended credit 0 00 0Float -61 - 1,535- 791 994Other Federal Reserve assets 38,003 + 853+ 2,261 38,202Gold stock 11,043 0- 2 11,043Special drawing rights certificate account 2,200 00 2,200Treasury currency outstanding (5) 34,469 + 14+ 1,471 34,469 Total factors supplying reserve funds 740,365 + 21,918
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US Federal Reserve: H41
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