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68 Guide to the Flow of Funds Accounts, Volume 2

Table F.1 Total Net Borrowing and Lending in Credit Markets

Credit markets are organized or informal items; a sector’s credit market borrowing is
arrangements that enable the transfer of funds thus not the same as the increase in its total
between suppliers and acquirers of funds. This liabilities.
table shows the credit market borrowing and All the sectors in the flow of funds accounts
lending of the sectors in the flow of funds are lenders of credit market funds except farm
accounts that participate in these markets. business; all the sectors are borrowers of credit
Credit market borrowing or lending is market funds except the monetary authority,
defined here as the transfer of funds through banks in U.S.-affiliated areas, bank personal
certain financial instruments: open market trusts, other insurance companies, private pen-
paper, Treasury and agency securities, munici- sion funds, state and local government retire-
pal securities, corporate and foreign bonds, ment funds, money market mutual funds,
bank loans not elsewhere classified, other mutual funds, and closed-end funds.
loans and advances (such as loans made under For the economy as a whole, total credit
various federal programs), mortgages, and market borrowing and total credit market lend-
consumer credit. Excluded from the definition ing are necessarily equal to each other. This is
are a number of other items that are also not the case, however, for individual sectors;
sources and uses of funds for the sectors— in particular, financial institutions are the pri-
official reserves, special drawing rights certifi- mary suppliers of credit market funds but
cates, Treasury currency, deposits and inter- obtain a large portion of their funds from
bank items, security repurchase agreements, non-credit-market sources such as deposits.
corporate equities, mutual fund and money For most credit market instruments it is not
market mutual fund shares, trade credit, secu- possible to match borrowers and lenders—for
rity credit, life insurance and pension fund instance, one cannot identify which sectors
reserves, business taxes payable, investment hold corporate bonds issued by other particu-
in bank personal trusts, proprietors’ equity lar sectors.
in noncorporate business, and miscellaneous
76 Guide to the Flow of Funds Accounts, Volume 1

Table F.2 Credit Market Borrowing by Nonfinancial Sectors

The nonfinancial sectors in the flow of funds and consumer credit, while nonfinancial cor-
accounts are households and nonprofit organi- porations obtain credit market funds in a vari-
zations, nonfinancial business, the federal gov- ety of forms, of which the most prominent are
ernment, state and local governments, and the corporate bonds, loans from banks, and com-
rest of the world. This table gives details on mercial mortgages.
those sectors’ credit market borrowing by sec- In table F.2 from the Z.1 release, shown on
tor and by type of financial instrument and, at the facing page, the decline in federal govern-
the bottom, shows totals for domestic and ment borrowing in recent years reflects the
foreign borrowing. Sectoral details shown in gradual reduction of the federal budget deficit;
the table also appear in table F.1; for example, in general, however, credit market borrowing
household borrowing, shown here on line 18, by individual sectors has increased over time,
is the same as household borrowing shown on reflecting growth in the economy and the
line 5 in table F.1. increasing role of financial markets. Analysts
Entities in the nonfinancial sectors borrow have found that over long periods of time
in order to fund their current expenditures, there has been a fairly close relationship
restructure their balance sheets, or finance between the growth of debt of the nonfinan-
their investments. Credit markets, and their cial sectors and aggregate economic activity;
associated financial instruments, facilitate the because of the importance of these sectors, the
transfer of resources to the borrowing sectors Federal Open Market Committee monitors
from sectors that have current saving or accu- the growth of their debt as part of its regular
mulated past saving. The major nonfinancial policy reviews of the economy. The Federal
borrowers in the credit markets are the house- Reserve Board publishes monthly data on non-
holds and nonprofit organizations sector and financial debt growth in its weekly H.6 sta-
nonfarm nonfinancial corporate business. tistical release, ‘‘Money Stock and Debt
Households and nonprofit organizations bor- Measures.’’
row primarily in the form of home mortgages
82 Guide to the Flow of Funds Accounts, Volume 2

Table F.3 Credit Market Borrowing by Financial Sectors

Credit market borrowing by the financial sec- panies, federally related credit providers, issu-
tors is primarily a source of funds for financial ers of asset-backed securities, finance com-
intermediation (see the introduction to table panies, mortgage companies, real estate
F.1 for a definition of credit market borrow- investment trusts, security brokers and deal-
ing). This table shows the financial sectors’ ers, and funding corporations); the credit mar-
credit market borrowing both by sector and by ket borrowing of both types of financial insti-
type of financial instrument. tutions is also shown in table F.1. There are
The sectors that appear in the table are other financial sectors included in the flow of
depository institutions (commercial banks, funds accounts that obtain funds from non-
savings institutions, and credit unions) and credit-market sources and thus do not appear
nondepository institutions (life insurance com- in this table.
86 Guide to the Flow of Funds Accounts, Volume 2

Table F.4 Credit Market Borrowing by All Sectors, by Instrument

Shown in this table is the credit market bor- lenders, purchasing mutual fund shares is an
rowing of all sectors, both financial and non- indirect means of investing in equities or
financial, by type of financial instrument; the credit market instruments.
total borrowing figure in line 1 is the same as Of the eight types of financial instruments
total borrowing in line 1 of table F.1 (both are used to carry out credit market borrowing,
equal to the total net lending of all sectors shown in lines 2 through 9 in the table, the
shown in line 27 of table F.1). Also shown, at ones with the largest dollar amounts outstand-
the bottom of this table as memorandum ing are U.S. government securities, corporate
items, are total net issuance of corporate equi- and foreign bonds, and mortgages. The share
ties and total net issuance of mutual fund of borrowing through each of the financial
shares. These two financial instruments are instruments as a percentage of total borrowing
not considered credit market instruments but has changed over time, however, in response
are nevertheless important: For some firms, to changes in the economy and in the legal
equity issuance is an alternative to credit mar- environment.
ket borrowing, and for many investors and
90 Guide to the Flow of Funds Accounts, Volume 1

Table F.5 Total Liabilities and Their Relation to Total Financial Assets

This table shows both the relationship of total To find the net acquisition of all sectors’
credit market borrowing to the net increase in assets, liabilities not identified as sector assets
liabilities of all sectors and the derivation of (lines 23 through 28) and floats not included
the net acquisition of financial assets of all in assets (lines 29 through 31) are both sub-
sectors from the net increase in liabilities. tracted from line 22; the result is shown in
To find the net increase in all sectors’ line 32. The items shown in lines 23 through
liabilities, the amount raised through each 31 are actually the financial instrument dis-
of the non-credit-market sources of funds crepancies shown in table F.11; each of the
included in the flow of funds accounts (lines 2 lines reports the amount by which the mea-
through 21) is added to total credit market sured total of funds borrowed through a par-
borrowing in line 1, which is the same as ticular financial instrument differs, as a result
line 1 in table F.1 and line 1 in table F.4. The of timing or reporting differences, measure-
total increase in liabilities, shown in line 22, is ment error, or other inconsistencies, from the
also the total of financial sources to all the measured total of funds lent.
96 Guide to the Flow of Funds Accounts, Volume 1

Table F.6 Distribution of Gross Domestic Product

Gross domestic product (GDP) is equal to the The table corresponds to table 1.1 of the
market value of all final goods and services national income and product accounts pub-
produced during a particular time period by lished in the Survey of Current Business by the
labor and property located in the U.S. (‘‘real’’ Bureau of Economic Analysis (BEA). Most of
GDP is the total adjusted for the effect of the data in the table are available from BEA as
changes in prices). GDP is likewise equal to seasonally adjusted quarterly flows at annual
the value of the purchases of these goods and rates. BEA does not, however, publish sectoral
services. This table shows the major compo- detail on investment in nonresidential plant
nents of expenditure on gross domestic and equipment or on investment in residential
product—personal consumption expenditures, structures; the allocations of the totals for
gross private domestic investment, net ex- these two series among the sectors that appear
ports, and expenditures by government, the here are made by the Flow of Funds Section
‘‘C + I + G + X − M’’ familiar to students of on the basis of annual data on tangible assets
economics—along with subcategories of these and fixed investment flows produced by BEA
broad totals. (Gross national product, or GNP, for its publication Fixed Reproducible Tan-
is the value of the goods and services pro- gible Wealth in the United States. The entries
duced by labor and property supplied by U.S. for residential and nonresidential fixed invest-
residents; it is obtained by adding net U.S. ment by sector in this table are the same as
income receipt from abroad to gross domestic those in the individual sector tables, although
product. GNP appears as a memorandum item in some sector tables a single total for fixed
at the bottom of the table.) investment is shown.
120 Guide to the Flow of Funds Accounts, Volume 1

Table F.7 Distribution of National Income

National income is the measure of earnings domestic earnings, and the statistical discrep-
from aggregate economic activity. The ancy, which arises because GDP and the
amounts received by firms from buyers’ charges against it are estimated separately, is
expenditures on the final goods and services subtracted.
that make up gross domestic product (GDP) This table corresponds to table 1.14 of the
are paid out as income to the factors of pro- national income and product accounts (NIPA)
duction. Certain portions of the total, however, published in the Survey of Current Business
are not paid as income: the amount of con- by the Bureau of Economic Analysis (BEA).
sumption of fixed capital, which is an expense It shows the major components of national
but is retained in the firm or governmental unit income—compensation of employees, propri-
as a form of saving; business transfer pay- etors’ income, rental income of persons, cor-
ments, which are paid out by firms but are not porate profits with inventory valuation and
defined as income because they are not earned; capital consumption adjustments, and net
indirect business taxes, that is, expenses dur- interest—along with subcategories of the
ing the production process paid to governmen- components and with sectoral detail on prof-
tal units; and the current surplus of govern- its. A memorandum section at the bottom of
ment enterprises net of subsidies from the the table, taken from NIPA table 1.9, shows
governments, which is not considered factor the calculation of gross domestic product from
income. To arrive at total national income, net national income.
income receipts earned abroad are added to
138 Guide to the Flow of Funds Accounts, Volume 1

Table F.8 Gross Saving and Investment

The flow of funds accounts show the relation- during the production of any one good, along
ship between saving and investment for indi- with changes in business inventories. (Goods
vidual sectors in the economy and are thus that are completely consumed during a single
linked to the national income and product production process or over the short term are
accounts (NIPA), which measure saving and known as intermediate goods; services pur-
investment for the entire economy. Flow of chased for use in the production process are
funds statistical releases include several always intermediate.) Fixed capital goods are
tables—F.6, F.7, and this one—that reproduce residential and nonresidential structures and
data from the NIPA and enable users to ana- residential and nonresidential durable equip-
lyze sectoral saving and investment in relation ment. In the NIPA, total investment for the
to the totals. The three tables correspond to economy also includes net foreign investment
tables that appear in the Survey of Current in the U.S., which is equal to total foreign
Business, a monthly publication of the Bureau outlays to the U.S. less total foreign income
of Economic Analysis (BEA), which compiles from the U.S. Gross investment is the total
the NIPA. of investment expenditures; net investment
Saving for any economic sector, in the equals total investment less expenditures made
NIPA, is the amount not spent out of current to replace fixed capital goods that have worn
income. For individuals, saving is disposable out or have become economically obsolete. In
personal income less current outlays; for practice, expenditures made for these replace-
incorporated businesses, saving is undistrib- ment purposes are considered to be equal to
uted profits; and for governments, saving the value of the consumption of fixed capital,
is the current surplus (equal to current receipts or the depreciation allowances.
from taxes, social insurance payments, and, This table shows both gross saving and
for state and local governments, from federal gross investment apportioned to three
grants-in-aid, less current expenditures). Sav- sectors—private domestic, government, and
ing inclusive of consumption of fixed capital, rest of the world. By definition, gross saving
or depreciation, is known as gross saving. and gross investment are equal; in practice,
Consumption of fixed capital is an item repre- however, they differ because measurements in
senting the value of the portion of fixed capital the aggregate reflect timing and reporting dif-
goods that is used up during a time period. It ferences, measurement errors, and differences
is a source of funds for any economic unit in estimation procedures. A statistical discrep-
because it is a current expense that is not ancy to account for these differences is
accompanied by a payment of funds outside reported in the NIPA. Because of certain
the unit; the funds are retained and can be definitional differences between the flow of
used for other expenditures. funds accounts and the NIPA, the flow of
Investment for any economic sector, in con- funds sectoral figures for saving and invest-
trast, is a use of funds—the purchase of goods ment do not sum to the NIPA totals; a discus-
(the fixed capital goods referred to above) that sion of these differences and a table showing a
are used in the production of other goods and reconciliation between the two totals can be
services without being completely consumed found in part 1 of this Guide.
150 Guide to the Flow of Funds Accounts, Volume 1

Table F.9 Derivation of Measures of Personal Saving

Saving by the personal sector is saving by the consumption of fixed capital: In the NIPA,
households and nonprofit organizations sector consumption of fixed capital is deducted as an
consolidated with the nonfarm noncorporate expense when the components of personal
business sector and the farm business sector. income are calculated; in the flow of funds
Nonfarm noncorporate business and non- accounts, consumption of fixed capital is
corporate farm business are considered to be deducted from the purchase of tangible assets.
activity subaccounts of households, and the Because capital gains and losses on existing
income earned from the activities of these assets do not result from current investment,
unincorporated businesses is a component of they are not reflected in either the flow of funds
personal income in the national income and or the NIPA measure of personal saving.)
product accounts (NIPA). This table presents three alternative mea-
Saving for any sector is the amount not sures of personal saving—the NIPA measure,
spent out of current income. In the NIPA, shown in line 47, and two versions of the
saving is defined as a sector’s current income flow of funds measure. The broader flow of
less its current expenditures; for the personal funds series (‘‘personal saving, flow of funds
sector in the NIPA, saving is equal to dispos- accounts measure’’), shown in line 42, reflects
able personal income (income net of taxes) investment in all types of financial and tan-
less personal outlays. At the same time, saving gible assets. The other, narrower flow of funds
for any sector is equal to the sector’s invest- series (‘‘personal saving, NIPA concept calcu-
ment (except for a discrepancy that arises from lated with flow of funds accounts data’’),
measurement, reporting, and timing differ- which is conceptually identical to the NIPA
ences among sources of information). Eco- series, is obtained by subtracting from the
nomic agents that make up a sector use their broader measure three items that are excluded
saving, by increasing their holdings of tan- from the NIPA: line 43, net flows of govern-
gible and financial assets or decreasing their ment insurance and pension fund reserves;
liabilities. The flow of funds accounts take line 44, net investment in consumer durables;
advantage of the equality of saving and invest- and line 45, net saving by farm corporations.
ment and calculate saving for the personal The difference between this narrower mea-
sector by adding the sector’s net financial sure, shown in line 46, and the NIPA series in
investment (its net acquisition of financial line 47 is equal to the discrepancy, with sign
assets less its net increase in liabilities) and its reversed, for the households and nonprofit
net investment in tangible assets (gross invest- organizations sector (table F.100). Each of
ment less consumption of fixed capital, or these figures—the three saving measures and
depreciation). (Both the NIPA measure of per- the difference shown in line 48—is shown, at
sonal saving and the flow of funds measure the bottom of the table, as a percentage of
are net saving, reflecting the subtraction of disposable personal income.
162 Guide to the Flow of Funds Accounts, Volume 2

Table F.10 Sector Discrepancies

A sector discrepancy is the difference between crepancies is generally seen as inevitable in

the gross saving of a particular sector and its the preparation of aggregate economic data.
gross investment. It is also equal to the differ- Examination of preliminary values for dis-
ence between the sector’s total sources of crepancies is useful to analysts who prepare
funds (nonfinancial sources, or saving out of estimates of time series for the flow of funds
income, plus borrowing of funds from exter- accounts because the discrepancies can high-
nal sources) and its total uses of funds (acqui- light inconsistencies among estimates for asset
sition of physical and financial assets); as a and liability series.
balancing item, a discrepancy is considered a For some sectors in the flow of funds
use of funds. A discrepancy may arise from accounts, such as the farm business sector, no
differences in the timing or reporting of data discrepancy is shown; for these sectors, one
obtained from different sources, measurement asset or liability flow item is calculated as
errors, or other inconsistencies. It is often a residual so as to balance total sources and
viewed as an indicator of the quality or com- uses of funds. This table presents the discrep-
pleteness of the data in the sector flow state- ancies for all sectors in the accounts for which
ment, with a smaller discrepancy relative to a discrepancy is shown. The total of sector
total sources or uses considered preferable to a discrepancies equals the total of instrument
larger one; nevertheless, the existence of dis- discrepancies, shown in table F.11.
166 Guide to the Flow of Funds Accounts, Volume 2

Table F.11 Instrument Discrepancies

An instrument discrepancy is the difference checkable deposits of the federal government,

between the total borrowing of funds by all checkable deposits of other sectors, trade
sectors through a particular financial instru- credit, taxes payable, and miscellaneous items.
ment and the total lending of funds through No discrepancies exist for the other financial
the same instrument; it is considered a use of instruments in the accounts, because, for each
funds that balances total borrowing and total instrument, the change in the holdings of one
lending. A discrepancy may arise from differ- of the sectors (for many instruments, the
ences in the timing or reporting of data households and nonprofit organizations sec-
obtained from different sources, measurement tor) is calculated as a residual. Also included
errors, or other inconsistencies. Frequently, in this table is the nonfinancial discrepancy,
large quarterly movements in discrepancies which is made up of three items from the
cancel out when the data are presented on an national income and product accounts: the sta-
annual basis. tistical discrepancy, private wage accruals less
A discrepancy is calculated for the follow- disbursements, and net capital grants to the
ing financial instruments that are included in U.S. from abroad. The total of instrument dis-
the flow of funds accounts: Treasury currency, crepancies equals the total of sector discrepan-
foreign deposits, interbank transactions, fed- cies, shown in table F.10.
eral funds and security repurchase agreements,
170 Guide to the Flow of Funds Accounts, Volume 1

Table F.100 Households and Nonprofit Organizations

The households and nonprofit organizations reported by the companies or institutions

sector consists of individual households themselves, are subtracted from total Treasury
(including farm households) and nonprofit securities outstanding, obtained from the
organizations such as charitable organizations, Monthly Treasury Statement of Receipts and
private foundations, schools, churches, labor Outlays of the United States Government, and
unions, and hospitals. Nonprofits account for the balance is assigned to the household sec-
about 6 percent of the sector’s total financial tor. Series calculated in this manner are so
assets, according to recent estimates, but they identified in the table and carry a reference to
own a larger share of some of the individual the instrument table (for example, table F.209)
financial instruments held by the sector. (The that lists the sector included in the calculation.
sector is often referred to as the ‘‘household’’ For a few series, such as consumer credit, data
sector, but nonprofit organizations are for the sector are available directly and are not
included because data for them are not avail- calculated as residuals. When microeconomic
able separately except for the years 1987 data are available (such as the data available
through 1996. Supplementary tables F.100.a from the Federal Reserve Board’s Survey of
and L.100.a in the quarterly publications of Consumer Finances), asset and liability totals
the flow of funds accounts present the latest for the sector are reviewed in light of that
available annual data for nonprofits.) At the data, and the flow of funds series are some-
end of 1997, the sector had total financial times adjusted to take into account the addi-
assets of more than $27 trillion, about 40 per- tional information.
cent of the financial assets of all sectors In contrast to the practice in some countries,
combined. the household sector statement in the U.S.
For most categories of financial assets and flow of funds accounts does not include the
liabilities, the values for the household sector transactions of unincorporated businesses;
are calculated as residuals. That is, amounts those are shown separately in the tables for
held or owed by the other sectors are sub- the nonfarm noncorporate and farm business
tracted from known totals, and the remainders sectors (tables F.103 and F.104). (The table for
are assumed to be the amounts held or owed the personal sector, F.9, does present such a
by the household sector. For example, the consolidation of the household sector with
amounts of Treasury securities held by all unincorporated business.)
other sectors, obtained from asset data
204 Guide to the Flow of Funds Accounts, Volume 1

Table F.101 Nonfinancial Business

Nonfinancial business in the flow of funds the calculation of other items that appear in
accounts comprises three sectors: nonfarm the table. For the two unincorporated sectors
nonfinancial corporate business, nonfarm non- (nonfarm noncorporate business and farm
corporate business, and farm business. Each business), proprietors’ net investment is cal-
of these sectors is described in the introduc- culated as a residual, so neither sector has a
tion to its separate table. This table shows the discrepancy; therefore, the discrepancy for
details of gross saving and gross investment nonfinancial business equals the discrepancy
for the three sectors combined. Income before for the nonfarm nonfinancial corporate busi-
taxes is shown (line 1) for information pur- ness sector.
poses only; it does not enter directly into
214 Guide to the Flow of Funds Accounts, Volume 1

Table F.102 Nonfarm Nonfinancial Corporate Business

The nonfarm nonfinancial corporate business offset against the items’ respective counter-
sector comprises all private domestic corpora- parts for U.S. corporations. Also, in a corol-
tions except corporate farms, which are part lary way, changes in the foreign capital
of the farm business sector, and financial account positions are included in the table,
institutions, which are shown in other tables; with changes in the financial assets of the sec-
it includes holding companies (through con- tor shown as foreign direct investment abroad
solidated reporting), S–corporations, and real and changes in the liabilities of the sector
estate management corporations. The sector shown as foreign direct investment in the U.S.
is the largest component of the total nonfinan- Information on the nonfarm nonfinancial
cial business sector, alone accounting for corporate business sector is obtained from a
roughly half of all net private investment in variety of sources. Data on investment and
the U.S. economy; together, entities that make depreciation, as well as on corporate profits
up the sector had well over $3 trillion of credit and other elements of cash flow, are taken
market debt outstanding at the end of 1997 in from the national income and product
the form of bonds, mortgages, commercial accounts published in the Survey of Current
paper, and loans from banks and nonbank Business. Information on credit market debt is
financial intermediaries. obtained from securities markets reports,
This table covers only the domestic activi- industry trade association releases, commer-
ties of nonfarm nonfinancial corporations; it cial bank reports of condition, and finance
does not include the financial transactions company surveys. An important source of
of foreign subsidiaries of U.S. corporations. information for all assets and for non-credit-
Therefore, earnings from the operations of market liabilities, such as trade payables, is
foreign subsidiaries and foreign branches of the Quarterly Financial Report for Manufac-
U.S. corporations are reflected only in profit turing, Mining, and Trade Corporations, pub-
elements—either as earnings retained abroad lished by the Bureau of the Census. In addi-
or as dividends received. In symmetric fash- tion, the sector’s assets and liabilities are
ion, the results of the operations of foreign benchmarked to annual data for corporations
corporations in the U.S. are included in the that appear in the Statistics of Income Corpo-
table, with earnings retained in the U.S. and ration Source Book, published by the Internal
dividends paid to U.S. stockholders being Revenue Service.
264 Guide to the Flow of Funds Accounts, Volume 1

Table F.103 Nonfarm Noncorporate Business

The nonfarm noncorporate business sector great extent, rely for their funding on loans
comprises partnerships and limited liability from commercial banks and other credit pro-
companies (businesses that file Internal Rev- viders (including the federal government) and
enue Service Form 1065), sole proprietorships on trade credit from other firms.
(businesses that file IRS Schedule C or Sched- The nonfarm noncorporate business sector
ule C-EZ), and individuals who receive rental is the largest borrower of both multifamily
income (income reported on IRS Schedule E). residential mortgages and commercial mort-
Limited liability companies combine the cor- gages. As the firms in the sector are unincor-
porate characteristic of limited liability for all porated, they are owned by the households
owners with the pass-through tax treatment of and nonprofit organizations sector; the firms’
partnerships, and they offer more organiza- income is attributed to households as a compo-
tional flexibility than S–corporations (corpora- nent of personal income, and households add
tions having thirty-five or fewer stockholders or withdraw equity in the firms through pro-
that elect to be taxed as if they were partner- prietors’ net investment transactions (shown
ships under the provisons of subchapter S of in table F.228). Proprietors’ net investment
the Internal Revenue Code; such corporations for the sector is calculated as the difference
are included in the nonfarm nonfinancial cor- between sources and uses of funds, and thus
porate business sector). The nonfarm noncor- the sector does not have a discrepancy.
porate business sector is often thought to be Most of the data for the sector are estimates
composed of small firms, but some of the based on summary reports published in the
partnerships included in the sector are large IRS Statistics of Income Bulletin (SOI). Usu-
companies. Firms in the sector generally do ally, figures from the SOI are available with a
not have access to capital markets and, to a lag of about two years.
312 Guide to the Flow of Funds Accounts, Volume 1

Table F.104 Farm Business

The farm business sector is made up of corpo- tables of either flows or outstandings; their
rate and noncorporate farms. Like the firms in other assets are small in comparison (farm real
the nonfarm noncorporate business sector, estate at the end of 1997 was about $850 bil-
noncorporate farms are owned by households. lion, while financial assets totaled about
In the national income and product accounts $70 billion). Farms’ major sources of funding
(NIPA), produced by the Bureau of Economic are loans or credits from banks, government-
Analysis (BEA), consumption by farm indi- sponsored enterprises, the federal government,
viduals is part of personal consumption expen- and trade suppliers, along with equity invest-
ditures, and farm proprietors’ income is trans- ment by owners.
ferred to households as part of personal Data on the financial assets and liabilities of
income and is thus an element of household farms are taken from the U.S. Department of
saving. Similarly, in the flow of funds Agriculture (USDA) publication Agricultural
accounts, expenditures on farm residential Income and Finance Situation and Outlook
structures are part of the fixed investment total Report, the balance sheets of the agencies
for the households and nonprofit organizations that are part of the Farm Credit System,
sector, and proprietors’ net investment in non- quarterly reports of condition submitted
corporate farms (net additions to or subtrac- by U.S.-chartered commercial banks, Best’s
tions from household ownership equity) is part Aggregates and Averages, Property–Casualty,
of the net acquisition of financial assets by and information obtained from the Depart-
the sector. In the flow of funds accounts, how- ment of the Treasury. Data on farm income,
ever, corporate farms are included in the farm investment, profits, and capital consumption
business sector; in the NIPA they are part of allowances are from the Survey of Current
nonfinancial corporate business. Business and from other materials available
The major asset of farms, real estate, is a from the BEA.
nonfinancial asset that does not appear on
320 Guide to the Flow of Funds Accounts, Volume 1

Table F.105 State and Local Governments,

Excluding Employee Retirement Funds

The sector for state and local governments, lower rates than if they issued taxable securi-
excluding employee retirement funds, com- ties. When interest rates fall, state and local
prises the government operations of the fifty governments may issue securities to refinance
states, their political subdivisions, and the an outstanding bond issue; the proceeds are
District of Columbia, including debt-issuing held in escrow until the maturity date or first
authorities, government enterprises, and trust call when the earlier issue is repaid or paid
funds. The sector excludes state and local down. State and local governments are
government employee retirement funds, which restricted from earning arbitrage profits that
form a separate sector included in the insur- would be obtained by investing the tax-exempt
ance and pension funds grouping. State and proceeds in higher-yielding investments. Since
local governments engage in activities that 1972, state and local governments have been
include education; building and maintenance investing in special types of U.S. Treasury
of roads; provision of water, sewers, and sani- securities (‘‘SLGS,’’ or State and Local Gov-
tation; mass transit; public assistance; and ernment Series, pronounced ‘‘slugs’’), which
health care. The activities are financed pri- were introduced to assist the governments in
marily through tax receipts, borrowing, and complying with these restrictions.
grants from the federal government. Data on the receipts and expenditures of the
State and local governments hold various sector are taken from the national income and
financial assets, such as U.S. government secu- product accounts (NIPA) published by the
rities, mortgages, corporate equities and Bureau of Economic Analysis (BEA) in the
mutual fund shares, and corporate bonds. Survey of Current Business; data on financial
Their major liabilities are municipal securi- assets and liabilities are obtained from annual
ties, mainly long-term obligations. Interest financial reports published by the states, from
earnings on most types of municipal securities reports submitted to federal regulatory authori-
are exempt from federal taxation, which ties, and from private date reporting services.
enables the governments to borrow funds at
340 Guide to the Flow of Funds Accounts, Volume 1

Table F.106 Federal Government

The federal government sector comprises all the Treasury. Gross saving for the sector is
federal government agencies and funds that derived from the federal government surplus
are in the unified budget, including the civil shown in the NIPA, but it differs from the
service and railroad retirement funds, insur- NIPA series in two major ways: In the flow
ance funds, and the Exchange Stabilization of funds accounts, gross saving for the federal
Fund. Also included are government-owned government (1) excludes the change in reserve
corporations and agencies that issue securities liabilities for employee life insurance and
individually, such as the Export–Import Bank. retirement funds (in the flow of funds accounts
The sector does not include the District of this amount is assigned to the households and
Columbia government, which is part of the nonprofit organizations sector, to provide
state and local governments sector. Nor does treatment parallel to that of private insurance
it include the Federal Reserve Banks and cer- and pension funds) and (2) includes receipts
tain monetary accounts of the Treasury, which from the sale or lease of access rights (that is,
together form the monetary authority sector, rights to the use of Outer Continental Shelf
or government-sponsored enterprises, even lands and the broadcast frequency spectrum).1
though several of them were formerly part of Sales of access rights are shown in the federal
the federal government. The sector is pre- budget as outlays; for most periods, the
sented in the flow of funds accounts on a amounts shown are negative because they are
consolidated basis, with holdings of Treasury payments to the federal government. Data
securities by agencies within the federal gov- showing net financial investment and related
ernment netted out. As a result, the liability detail are obtained from Treasury Department
for securities outstanding shown for the fed- publications—the Monthly Treasury Statement
eral government in the accounts is smaller of Receipts and Outlays of the United States
than the published value for the total public Government (referred to in this Guide as the
debt, which includes securities held by the Monthly Treasury Statement, or MTS) and
federal agencies. the Monthly Statement of the Public Debt of
Data on the federal government sector for the United States.
the flow of funds accounts come mainly from
the national income and product accounts 1. In October 1999, the allocation of pension and insur-
ance reserves in the NIPA was changed and now corre-
(NIPA), produced by the Bureau of Economic sponds closely to the allocation in the flow of funds
Analysis (BEA), and from the Department of accounts.
366 Guide to the Flow of Funds Accounts, Volume 1

Table F.107 Rest of the World

The rest of the world sector consists of all the flow of funds accounts measure an
entities (individuals, firms, institutions, and increase in foreign holdings of U.S. assets as a
governments) not residing in the U.S. that positive use of funds for the rest of the world
engage in transactions with U.S. residents; the and an increase in U.S. holdings of foreign
account measures the participation of foreign- assets as a positive source of funds for the rest
ers in U.S. markets only, and transactions of the world.
exclusively among foreigners are not included. Data for the sector on exports and imports
In the flow of funds accounts, the sector is of goods and services, factor income, and
constructed from the perspective of the for- transfer payments are from the national
eigners, resulting in parallel treatment of the income and product accounts (produced by
rest of the world sector and the domestic sec- BEA), which exclude Puerto Rico and other
tors in terms of their roles as suppliers and U.S.-affiliated areas. Sector coverage of for-
users of funds. Thus, the acquisition of domes- eign capital flows is the same as that in the
tic assets by both the rest of the world and the balance of payments accounts (which include
domestic sectors provides funding in U.S. Puerto Rico and other U.S.-affiliated areas as
capital markets, and increases in the liabilities part of the U.S.), with the important exception
of both the rest of the world and the domestic of international banking facilities (IBFs): The
sectors represent borrowings of funds sup- balance of payments accounts treat IBFs as
plied by U.S. markets. The perspective in the domestic entities, whereas the flow of funds
flow of funds accounts is the opposite of that accounts, because IBF borrowing from and
in the balance of payments accounts, pub- lending to U.S. residents is restricted by law,
lished by the Bureau of Economic Analysis consider them foreign entities. Several differ-
(BEA), which conceptually measure transac- ences also exist between the balance of pay-
tions from the standpoint of capital flows for ments accounts and the flow of funds accounts
the U.S. economy. That is, the balance of in their classification of some items; the most
payments accounts measure an increase in for- important difference is that in the flow of
eign holdings of U.S. assets as a positive capi- funds accounts, interbank claims and liabili-
tal flow (inflow) for the U.S. and an increase in ties are netted, but in the balance of payments
U.S. holdings of foreign assets as a negative accounts they are not.
capital flow (outflow) for the U.S., whereas
390 Guide to the Flow of Funds Accounts, Volume 1

Table F.108 Monetary Authority

The monetary authority is the group of insti- and Treasury currency, which comprises stan-
tutions and financial accounts that supply dard silver dollars, fractional coin, national
reserve funds to depository institutions and bank notes, and currency items in the process
absorb funds from them; data on the amounts of retirement. (These Treasury accounts are
of funds supplied and absorbed by the mone- excluded from the assets and liabilities of the
tary authority are presented in table 1.11 of U.S. government sector in the flow of funds
the Federal Reserve Bulletin, ‘‘Reserves of accounts.)
Depository Institutions and Reserve Bank The assets of the monetary authority are the
Credit.’’ 1 The sector is made up primarily of factors supplying reserve funds; the largest
the twelve Federal Reserve Banks and their asset is Treasury securities, which, in the con-
subsidiary offices (but not the Board of Gover- duct of monetary policy, are bought and sold
nors of the Federal Reserve System). It also by the Federal Reserve System through open
includes certain monetary accounts of the market operations. The liabilities of the sector,
U.S. Treasury: the monetary gold stock; the primarily currency held by the public and by
special drawing rights certificate account; commercial banks and reserve deposits owed
to depository institutions by the Federal
1. The ‘‘reserve equation’’ and the factors that supply
and absorb reserve funds are discussed in Purposes and Reserve System, are the factors absorbing
Functions, pp. 118–22. reserve funds.
400 Guide to the Flow of Funds Accounts, Volume 1

Table F.109 Commercial Banking

The commercial banking sector is made up Credit market funds advanced by the com-
of four banking groups: U.S.-chartered com- mercial banking sector, shown in line 43,
mercial banks (table F.110), foreign banking serves as an indicator of the amount of funds
offices in the U.S. (table F.111), bank hold- supplied by the sector to the domestic nonfi-
ing companies (table F.112), and banks in nancial sectors. Note that credit market funds
U.S.-affiliated areas (table F.113). Each group advanced differs from bank credit, which is
is described in the introduction to its table. shown on line 7, in that it excludes security
This table is a combined statement for the four credit, corporate equities, and mutual fund
groups, whereas the tables for the individual shares and includes customers’ liability on
banking sectors are consolidated, with inter- acceptances.
bank assets netted against interbank liabilities.
414 Guide to the Flow of Funds Accounts, Volume 1

Table F.110 U.S.-Chartered Commercial Banks

Commercial banks are financial intermediaries ments and the growing similarity of other
that raise funds through demand and time financial institutions to commercial banks;
deposits as well as from other sources, such as at the end of 1998 there were approximately
federal funds purchases and security repur- 9,000 U.S.-chartered commercial banks, down
chase agreements, funds from parent compa- from a peak of 14,407 in 1980.
nies, and borrowing from other lending insti- Data for U.S.-chartered commercial banks
tutions (for example, the Federal Home Loan shown in this table are taken directly from
Banks); they use the funds to make loans, quarterly reports of condition submitted to
primarily to businesses and individuals, and to regulatory authorities and published by the
invest in securities. U.S.-chartered commercial Federal Financial Institutions Examinations
banks are established under the regulations Council. The sector’s assets and liabilities are
of a U.S. chartering authority—either the U.S. reported on a consolidated basis; that is, intra-
Comptroller of the Currency (for national sector deposit and loan balances are netted
banks) or the banking authority of one of the out. Foreign branches and foreign subsidiaries
fifty states or the District of Columbia (for of U.S.-chartered commercial banks are not
state-chartered banks). The deposit liabilities included in the consolidation; their assets and
of U.S.-chartered commercial banks are com- liabilities are included in the rest of the world
ponents of various monetary aggregates (mea- sector.
sures of the U.S. money supply published by Credit market funds advanced, shown in
the Federal Reserve System). line 49, is a measure of funds supplied by the
Because of the importance of banks in the sector to domestic nonfinancial sectors. The
U.S. financial system, their activities are measure differs from bank credit, which is
closely monitored by federal regulatory agen- shown in line 5, in that credit market funds
cies. In recent years, the commercial banking advanced excludes security credit, corporate
industry has undergone significant consolida- equities, and mutual fund shares and includes
tion as a result of both the gradual removal of customers’ liability on acceptances.
prohibitions on interstate banking arrange-
448 Guide to the Flow of Funds Accounts, Volume 1

Table F.111 Foreign Banking Offices in the U.S.

The foreign banking offices sector comprises Branches and agencies of foreign banks and
four groups of banking institutions that are American Express Bank file form FFIEC 002,
foreign-related or that engage exclusively in Report of Assets and Liabilities of U.S.
international business: (1) branches and agen- Branches and Agencies of Foreign Banks;
cies of foreign banks that are not incorporated Edge Act and agreement corporations file
separately from their parents, are located in form FR 2886b, Consolidated Report of Con-
the U.S., and engage in U.S. banking business; dition and Income for Edge and Agreement
(2) Edge Act and agreement corporations, Corporations; and New York State investment
which are U.S. subsidiaries of either domestic companies formerly filed form FR 2886a,
or foreign banks and are established by such Quarterly Report of Condition for a New York
banks to engage in international business; State Investment Company and Its Domestic
(3) New York State investment companies, Subsidiaries.
which are banking offices owned by one or The Monetary Control Act of 1980 requires
more foreign banks and are chartered by that foreign banking offices, along with other
the State of New York (included in the sec- depository institutions, hold required reserves
tor through 1996:Q2); and (4) American equal to a percentage of their deposit liabili-
Express Bank, the international banking sub- ties; the reserves must be held in the form of
sidiary of American Express Corporation. deposits with Federal Reserve Banks or vault
Domestically chartered U.S. banks owned in cash. Since that requirement took effect, the
whole or part by foreign banks are part of the institutions have also been eligible to borrow
U.S.- chartered commercial banks sector rather at the Federal Reserve discount window.
than the foreign banking offices sector.
Data for the sector are taken from quarterly
reports of condition filed by the institutions:
466 Guide to the Flow of Funds Accounts, Volume 1

Table F.112 Bank Holding Companies

Bank holding companies (BHCs) are parent The major assets of bank holding compa-
companies of commercial banks. The bank nies, other than small amounts of loans and
holding company sector in the flow of funds securities, are equity and non-equity invest-
accounts consists of those bank holding com- ments in their subsidiaries; at the end of
panies that submit reports of condition on 1997, BHCs’ net investment in their bank
the Federal Reserve’s Form FR Y-9LP, Parent subsidiaries was just under $414 billion,
Company Only Financial Statements for Large and their net investment in their nonbank
Bank Holding Companies. The instructions subsidiaries—savings institutions, finance
accompanying the form state that the report is companies, mortgage companies, and security
to be filed by ‘‘bank holding companies with brokers and dealers—was about $90 billion.
total consolidated assets of $150 million or In this table, interbank liabilities of the sector
more, or multibank holding companies with are shown net of interbank assets. The main
debt outstanding to the general public or that source of funding for the sector is the issuance
are engaged in a nonbank activity (either of corporate bonds and commercial paper.
directly or indirectly) involving financial
leverage or engaged in credit extending activi-
ties, regardless of size.’’
478 Guide to the Flow of Funds Accounts, Volume 1

Table F.113 Banks in U.S.-Affiliated Areas

This sector is made up of commercial banks Board. Because these banks are treated as
chartered in U.S.-affiliated areas and branches foreign entities by the Board, their deposit
of U.S.-chartered commercial banks oper- liabilities are not included in the U.S. mone-
ating in these areas. U.S.-affiliated areas with tary aggregates (measures of the national
local populations are the U.S. territories of money supply published by the Federal
American Samoa, Guam, and the U.S. Virgin Reserve System), and the institutions are not
Islands; the Commonwealth of the Northern part of the U.S.-chartered commercial banks
Mariana Islands and the Commonwealth of sector or the foreign banking offices sector in
Puerto Rico; two freely associated states—the the flow of funds accounts.
Republic of the Marshall Islands and the Data on the sector come from reports filed
Federated States of Micronesia; and the Trust with federal regulatory authorities. Commer-
Territory of the Pacific Islands (Palau). U.S.- cial banks chartered in the U.S.-affiliated areas
affiliated areas that are uninhabited or that submit quarterly reports of condition on the
have only a military presence are Baker same forms used by domestically chartered
Island, Howland Island, Jarvis Island, John- banks (FFIEC 031, FFIEC 032, FFIEC 033, or
ston Atoll, Kingman Reef, Midway Island, FFIEC 034, depending on the size of the insti-
Navassa Island, Palmyra, and Wake Atoll. tution and its ownership of foreign offices);
Banks in U.S.-affiliated areas are considered branches of U.S. banks located in these areas
part of the U.S. in balance of payments statis- submit the annual Foreign Branch Report of
tics published by the Bureau of Economic Condition (FFIEC 030).
Analysis (BEA), but are considered foreign At the end of 1997, the sector comprised
entities in the U.S. national income and prod- fourteen banks chartered in other areas and
uct accounts published by BEA and in finan- twenty-six branches of U.S. banks.
cial statistics published by the Federal Reserve
488 Guide to the Flow of Funds Accounts, Volume 1

Table F.114 Savings Institutions

Savings institutions are financial intermediar- cial difficulties beginning in the late 1980s.
ies that raise funds mainly through time and The federal government undertook a large-
checkable deposits and use the funds to pro- scale bailout of the industry, and many of the
vide loans, principally home mortgages, and institutions disappeared through merger or
to invest in securities. The savings institutions failure. The industry is now considerably
sector in the flow of funds accounts is made smaller than it had been; the sector’s total
up of savings and loan associations, mutual financial assets were $1.029 billion at the end
savings banks, federal savings banks, and of 1997, down from a peak of $1.640 billion at
Massachusetts cooperative banks. the end of 1988.
In function, savings institutions are similar Information about savings institutions
to commercial banks, and in recent years the comes from two main sources: Institutions
distinction between commercial banks and that are regulated by the Federal Deposit
savings institutions has become blurred as the Insurance Corporation (FDIC) file quarterly
financial services industry has become more reports of condition similar to those submitted
homogeneous. In the past, savings institutions by commercial banks, and institutions reg-
were legally required to engage primarily in ulated by the Office of Thrift Supervision
home mortgage finance, and even though they (OTS) submit quarterly Thrift Financial
now may hold other types of assets, their Reports. A total of 564 institutions, including
traditional emphasis continues to be a major 81 Massachusetts cooperative banks, report to
difference between savings institutions and the FDIC; more than 1,200 institutions report
commercial banks. Mortgages make up close to the OTS. The deposit liabilities of the insti-
to 70 percent of the credit market instruments tutions are components of the monetary aggre-
that savings institutions hold. gates (measures of the U.S. money supply
Many savings institutions, particularly sav- published by the Federal Reserve System).
ings and loan associations, encountered finan-
514 Guide to the Flow of Funds Accounts, Volume 1

Table F.115 Credit Unions

Credit unions are federally chartered or state- whose principal function is to provide whole-
chartered savings institutions open to mem- sale financial and payments services to its
bers who share a so-called common bond, corporate credit union members and their
such as employment, geographic proximity, credit union constituency. In the sector state-
or organization membership. (Legislation ment for credit unions, intrasector transactions
enacted in 1998 permitted some broadening at these various levels are netted out, but the
of this eligibility criterion.) There are about investments of U.S. Central with institutions
12,000 credit unions in the U.S., offering pri- outside the credit union sector are included in
marily consumer-oriented financial services; the sector’s total assets.
most are fairly small institutions, although a The primary source of data for the sector
few are very large and operate in the national is the Credit Union National Association
financial arena. Credit union deposit liabilities (CUNA), a trade association. Data reported
are included in the monetary aggregates (mea- to the National Credit Union Administration,
sures of the national money supply published a federal agency, are a secondary source of
by the Federal Reserve System), and deposits information about the federally and state-
in federal credit unions and federally insured chartered credit unions insured by the
state-chartered credit unions are insured by NCUSIF. Federally insured credit unions
the National Credit Union Share Insurance pay an annual premium into the NCUSIF,
Fund (NCUSIF). which holds only securities issued by or guar-
The credit union industry has a hierarchical anteed by the U.S. government; in the flow
structure. Local credit unions belong to thirty- of funds accounts the credit unions sector’s
nine corporate credit unions. The corporate total holdings of U.S. government securities
credit unions accept deposits from and make include an amount equal to the accumulated
loans to member credit unions; in turn, they contributions of insured credit unions shown
deposit most of their excess funds with U.S. on NCUSIF’s balance sheet.
Central Credit Union, a private institution
526 Guide to the Flow of Funds Accounts, Volume 2

Table F.116 Bank Personal Trusts and Estates

Bank personal trusts are legal entities estab- separate from their owners. They invest in
lished at banks and nondepository noninsured both tangible and financial assets and have a
trust companies by individuals to invest in single source of funds (and a single liability),
assets for the benefit of the owners or others. investment by their owners. The most promi-
The sector also includes estates of deceased nent assets of the trusts, together accounting
persons being administered by banks and trust for nearly 70 percent of their financial assets
companies. Trusts other than bank personal at the end of 1997, are corporate equities and
trusts (such as trusts administered by individu- mutual fund shares.
als) are not separately identified among the Information on bank personal trusts and
assets of the households and nonprofit organi- estates is taken from Trust Assets of Financial
zations sector and are not included in this Institutions, an annual publication of the
sector. Federal Financial Institutions Examination
In the flow of funds accounts, bank personal Council.
trusts are considered financial institutions
534 Guide to the Flow of Funds Accounts, Volume 2

Table F.117 Life Insurance Companies

The life insurance companies sector encom- data contained in the annual statements filed
passes all mutual and stock legal reserve life by the companies with the National Associa-
insurance companies in the U.S. These compa- tion of Insurance Commissioners (NAIC); the
nies write about 98 percent of the life insur- data are tabulated by the A.M. Best Company
ance policies in effect in the U.S. (the remain- and by the American Council of Life Insur-
der are written by fraternal societies, savings ance (ACLI), a trade association, and are pub-
banks, and the federal government); they also lished, respectively, in Best’s Aggregates and
administer individual and group annuities. The Averages, Life and Health and in ACLI’s Life
companies’ major nonfinancial source of Insurance Fact Book and its quarterly release
funds is premium receipts; they also receive ‘‘Distribution of Investments of U.S. Life
substantial investment income from their hold- Insurance Companies.’’ Data also come from
ings of tangible and financial assets, primarily quarterly estimates provided by A.M. Best
corporate and government agency bonds and from a sample of companies. Finally, the
corporate equities. Their major liabilities are Investment Company Institute (ICI) provides
reserves set aside for future benefit payments. data on the sector’s holdings of mutual fund
Information on life insurance companies shares and money market mutual fund shares.
comes from several sources. One source is
554 Guide to the Flow of Funds Accounts, Volume 2

Table F.118 Other Insurance Companies

The ‘‘other insurance companies’’ sector larger holders of municipal securities. The
encompasses all companies licensed to write companies’ primary liability is amounts pay-
property or casualty insurance policies in the able to policyholders who have filed claims
U.S. The firms provide many types of insur- for damages. Their other liabilities include
ance, such as fire, group and other accident taxes payable and direct investment by foreign
and health, homeowners, medical malpractice, parent companies; they also obtain funding
workers’ compensation, automobile liability from equity issuance.
and physical damage, aircraft, reinsurance, Data on the sector come from annual state-
burglary and theft, earthquake, credit, mort- ments filed by the companies with the
gage guaranty, and international. National Association of Insurance Commis-
The major assets of the companies that sioners; the statements are then tabulated by
make up the sector are fixed-income securities A.M. Best Company. Data obtained from the
and equities, but they hold several other kinds Best Company at the end of 1997 covered
of assets and have historically been among the 2,450 insurance companies.
564 Guide to the Flow of Funds Accounts, Volume 1

Table F.119 Private Pension Funds

The private pension funds sector encompasses individual accounts for participants. The risk
all private pension plans that, in accor- of the investment strategy is borne by the
dance with Title I of the Employee Retire- employer. Defined benefit plans invest in a
ment Security Act of 1974 (ERISA), have variety of tangible and financial assets, but
filed IRS/DOL/PBGC Form 5500 (or Form they may not invest more than 10 percent of
5500-C/R for plans with fewer than 100 par- the fund’s assets in firm (employer) securities.
ticipants) with the Internal Revenue Service Under a defined contribution plan, the
(IRS). It also includes the Federal Employees employer or the employee, or both, contrib-
Retirement System (FERS) Thrift Savings utes to the employee account. The employee
Plan, a supplemental retirement option avail- bears the investment risk, and the value to the
able to federal employees beginning in 1984. employee at retirement depends on the accu-
The sector covers both defined benefit plans mulated contributions, investment earnings,
and defined contribution plans and includes and asset appreciation. There are many types
both the retirement funds of nonprofit organi- of defined contribution plans, including sav-
zations and the single-employer and multi- ings, or thrift, plans; profit-sharing plans;
employer plans of for-profit firms that are money purchase plans; and employee stock
qualified for tax preferences. It does not cover ownership plans (ESOPs). A 401(k) arrange-
annuities purchased for retirees or other ment, one form of defined contribution plan,
‘‘insured assets’’ such as guaranteed invest- allows an employee to have a portion of his
ment contracts, separate accounts, or other or her compensation (otherwise payable in
retirement assets managed by insurance com- cash) contributed to the plan and to defer
panies; the assets of private pension funds federal tax on that contribution until the time
do include unallocated insurance company of withdrawal. In contrast to defined benefit
contracts, however. plans, the composition of defined contribution
Individual retirement accounts (IRAs) and plans is generally dictated by the investment
Keogh accounts are not included in the private choices of plan participants, and the portfolio
pension funds sector. Rather, the assets of is not subject to distribution requirements.
such accounts are included with the instru- As of the end of fiscal year 1994, the pri-
ments in whose form the accounts are held, in vate pension funds sector comprised 74,400
the households and nonprofit organizations defined benefit plans and 615,900 defined con-
sector. For example, the value of mutual fund tribution plans. At the end of 1997, the sector
shares held by the household sector includes held $3.6 trillion in assets, with that amount
the value of shares held in IRA and Keogh about equally split between defined benefit
accounts, and the value of household sector and defined contribution plans. Corporate
deposits includes the value of deposits in IRA equities and mutual fund share holdings
and Keogh accounts. account for more than half of the sector’s total
Under a defined benefit pension plan, an financial assets; other assets are government,
employee typically receives an annuity upon agency, and corporate bonds. Data for the
reaching a specified age. The size of the annu- defined benefit and defined contribution plans
ity in most cases is based on length of service shown separately are published in supplemen-
and employment earnings; the annuity may or tary tables in the Federal Reserve Board’s
may not incorporate adjustments for changes quarterly Z.1 statistical release, ‘‘Flow of
in the measured cost of living, and it may be Funds Accounts of the United States.’’
integrated with social security. The employer Data for the private pension funds sector
makes regular contributions to the plan to are benchmarked to annual data submitted
fund the participant’s future benefits. Private to the IRS by private pension plan sponsors
defined benefit plans are frequently non- on IRS/DOL/PBGC Form 5500 (and Form
contributory, that is, participants do not con- 5500-C/R). The IRS processes the forms and
tribute to the plan, and generally there are not provides computerized files to the Department
Table F.119 565

Table F.119 Private Pension Funds—Continued

of Labor’s Pension and Welfare Benefits quarterly figures are estimated using data for
Administration. The Department of Labor the Independent Consultants Cooperative uni-
(DOL) further edits and checks the computer- verse as compiled by Bankers Trust Company
ized files and creates weights to represent the (now part of Deutsche Bank). The Federal
universe of private pension plans with two or Retirement Thrift Investment Board provides
more participants. The Flow of Funds Section quarterly data on the FERS Thrift Savings
bases its estimates on the DOL annual data; Plan.
578 Guide to the Flow of Funds Accounts, Volume 1

Table F.120 State and Local Government Employee Retirement Funds

The state and local government employee organizations sector, so the funds’ only liabil-
retirement funds sector consists of retirement ity is pension fund reserves, equal to the total
systems that are sponsored by a recognized of the funds’ tangible and financial assets; the
unit of government as defined by the Bureau item appears as an asset on the households and
of the Census and whose members are pub- nonprofit organizations sector statement.
lic employees compensated with public In the national income and product accounts
funds. The sector includes retirement funds (NIPA), saving by retirement funds is treated
of both state governments and local govern- as government saving, but in the flow of funds
ment entities such as counties, municipalities, accounts it is considered to be household sav-
townships, school districts, and special dis- ing. To shift this portion of government saving
tricts. Each retirement system is a separately to the households and nonprofit organizations
identifiable fund, financed at least in part sector, an amount equal to the net acquisition
with public contributions. Pension funds that of financial assets by the funds is deducted
are supported solely by employee contribu- from the saving of state and local govern-
tions are excluded from the sector; also ments and added to the NIPA figure for per-
excluded are assets administered by insur- sonal saving.1
ance companies or the Teachers Insurance Data on the assets of the sector are obtained
and Annuity Association–College Retirement primarily from two Bureau of the Census pub-
Equities Fund that provide public employee lications, the annual Finances of Employee-
retirement coverage without any contribution Retirement Systems of State and Local
or supplemental coverage administered by a Governments and the Quarterly Survey of
government entity. In addition, deferred com- Finances of Public-Employee Retirement
pensation plans administered in accordance Systems. Other information comes from the
with Internal Revenue Code section 457 are Bureau of Economic Analysis (BEA) and the
not included. Department of Housing and Urban Develop-
About half of the retirement funds’ assets ment (HUD).
are held in the form of corporate equities;
other assets are in the form of corporate, gov-
ernment, and agency bonds and other financial
1. In October 1999, the NIPA treatment of government
instruments. The assets are assumed to be held pension fund reserves was changed and now corresponds
for the benefit of the households and nonprofit closely to the flow of funds version.
590 Guide to the Flow of Funds Accounts, Volume 2

Table F.121 Money Market Mutual Funds

Money market mutual funds are investment places restrictions on the average maturity of a
companies that invest in short-term, liquid fund’s portfolio (ninety days or less), on the
assets in order to provide money-market rates proportion of its securities holdings with less
of return to investors; they are open-end than the highest rating (no more than 5 percent
investment companies that are allowed to of assets), and on the concentration of the
issue an unlimited number of shares and are fund’s assets in the securities of any single
required to redeem all shares at net asset issuer (no more than 5 percent of assets).
value. Introduced during the 1970s, money Because many money market mutual funds
market mutual funds may be general funds or allow their investors to write checks against
may specialize in municipal securities, which their accounts, balances in the funds are com-
provide income exempt from federal taxes; ponents of the monetary aggregates (measures
they may also specialize in either institutional of the national money supply published by the
or ‘‘retail’’ (individual investor) clientele. Federal Reserve Board); fund balances are not
All money market mutual funds must com- insured by any federal agency, however. Data
ply with Rule 2a-7 of the Investment Company for the sector in the flow of funds accounts are
Act of 1940, which seeks to limit the risk based on reports made by the funds to the
of money market mutual funds. The rule Investment Company Institute.
596 Guide to the Flow of Funds Accounts, Volume 1

Table F.122 Mutual Funds

Mutual funds are investment companies that Mutual funds are also known as open-end
purchase financial assets using funds obtained investment companies because they are per-
mainly through the issuance of shares. Many mitted to issue an unlimited number of shares;
of the funds have specific investment objec- they are required by law to redeem the shares
tives, such as current income or capital appre- at net asset value. The net asset value of an
ciation, and many specialize in a certain type individual investor’s share in a mutual fund is
of financial security, such as municipal securi- determined by the market value of the under-
ties, growth stocks, or stocks issued by compa- lying assets. Shareholders receive returns
nies in particular industries or particular areas through pass-throughs of current interest and
of the world. Funds have also tailored their dividends, distributions of realized capital
operations to needs of different types of inves- gains, and accumulation of unrealized capital
tors, with some offering low initial invest- gains.
ment requirements, automatic investment by In the flow of funds accounts, the mutual
deduction from deposits, and regular newslet- funds sector covers all open-end investment
ters giving information about current finan- companies (including unit investment trusts)
cial conditions; some funds are members of that report to the Investment Company Insti-
‘‘families’’ operated by the same manage- tute (ICI) except money market mutual funds
ment company, allowing shareholders to trans- and limited-maturity municipal bond funds
fer their investments readily among funds (which make up the money market mutual
that have different objectives and investment funds sector, shown in table F.121) and fund-
styles. More than 5,000 mutual funds are ing vehicles for variable annuities (which are
currently operating in the U.S. They have included in the life insurance companies sec-
become an increasingly popular form of tor, shown in table F.117). The sector also
investment among individual investors and, excludes hedge funds.
in the aggregate, appear to have become a
substitute for directly held bonds, equity
shares, and deposits.
602 Guide to the Flow of Funds Accounts, Volume 2

Table F.123 Closed-End Funds

Closed-end funds, also called publicly traded initial public offering and are not required by
funds, are investment companies that, like law to redeem outstanding shares. Shares of
mutual funds, purchase various kinds of finan- closed-end funds are traded in the market
cial assets in order to achieve a specific objec- along with other corporate equities at prices
tive such as long-term growth. Closed-end determined by the market; shares that trade at
funds have a long history in financial mar- a price above the net asset value are said to be
kets, and several funds currently operating trading at a premium, and those that trade at a
have been in existence since the late 1920s; price below the net asset value, at a discount.
at the end of 1997 there were about 500 in Data on the assets and liabilities of closed-end
operation. funds are provided by the Investment Com-
Unlike mutual funds, closed-end funds gen- pany Institute (ICI).
erally do not issue additional shares after the
606 Guide to the Flow of Funds Accounts, Volume 1

Table F.124 Government-Sponsored Enterprises

Government-sponsored enterprises are finan- vehicles for the FSLIC Resolution Fund and
cial institutions that provide credit to specific the Resolution Trust Corporation respectively.
groups or areas of the economy, such as farm- Some have maintained legal ties to the U.S.
ers or housing. The sector comprises the Fed- government by having board members who
eral Home Loan Banks, Fannie Mae, Freddie are federal officials or by maintaining emer-
Mac, Sallie Mae (Student Loan Marketing gency lines of credit with the Department of
Association, since 1997 a subsidiary of SLM the Treasury, or both.
Holding Corporation, a private company), the In the flow of funds accounts, the securi-
Farm Credit System, Financing Corporation ties issued by the agencies are identified as
(FICO), and Resolution Funding Corporation U.S. government agency obligations; they fre-
(REFCORP). Some of the enterprises were quently trade at prices more favorable than
originally agencies within the federal govern- those of securities issued by corporations that
ment, but federal ownership equity in them do not have an association with the federal
has been retired and they are now consid- government.
ered private financial institutions; FICO and Data for the sector are compiled from
REFCORP are mixed-ownership government balance sheets published by the individual
corporations established to serve as financing agencies.
624 Guide to the Flow of Funds Accounts, Volume 2

Table F.125 Federally Related Mortgage Pools

The federally related mortgage pools sector legal or contractual arrangements; the entities
consists of entities established for bookkeep- are similar to those that make up the issuers of
ing purposes by several federally related asset-backed securities sector (table F.126).
agencies—Government National Mortgage The pools issue securities known as
Association (Ginnie Mae), Fannie Mae, Fred- mortgage-pool securities, which are the liabili-
die Mac, and the agency formerly known as ties of the sector; the agencies that originally
Farmers Home Administration (FmHA; now held the mortgages do not bear any liability
part of the Farm Service Agency in the for the securities. These obligations are largely
Department of Agriculture)—to hold ‘‘pools,’’ pass-through securities (purchasers receive
or packages, of mortgages having similar fea- interest, amortization, and principal payments
tures.1 (The mortgages are originally held on the underlying mortgages). They are
by the agencies but are removed from their included in totals published in the flow of
balance sheets when the pools are formed.) funds accounts for U.S. government agency
Rather than being composed of a group of securities (see table F.210).
institutions, the sector is made up of a set of Estimates of the value of the mortgages
held by the pools are based on information
1. Certain obligations issued by FmHA (called certifi- obtained from various government sources. In
cates of beneficial ownership) that were sold to the Fed- the flow of funds accounts, the volume of
eral Financing Bank, an agency included in the U.S. mortgage-pool securities is assumed to be
government sector, were reallocated from FmHA mort-
gage pools to FmHA mortgage holdings in 1986:Q4 equal to the value of the securities that they
because of accounting changes by FmHA. hold.
630 Guide to the Flow of Funds Accounts, Volume 1

Table F.126 Issuers of Asset-Backed Securities

Issuers of asset-backed securities are ‘‘special- are securitized and the automobiles are
purpose vehicles’’ (SPVs), entities established removed from the balance sheets of the
by contractual arrangement to hold assets and finance companies. The leases themselves are
to issue debt obligations backed by the assets; not financial assets of the sector or of the
the SPVs are similar to federally related mort- original finance-company lessor and are not
gage pools in that they are not actual institu- liabilities of the household sector; rather, lease
tions, but are created for bookkeeping pur- payments are treated as consumer expendi-
poses. The financial assets of the sector are tures by the lessee and as current income of
federally related mortgage pool securities the issuers of asset-backed securities sector.
and various types of loans, including student The obligations issued by the SPVs in con-
and business loans, mortgages, consumer junction with the asset transfers are typically
credit (such as automobile loans and credit medium- to long-term corporate bonds as well
card receivables), and trade credit. These as commercial paper; they represent claims
assets, often referred to as securitized assets, against the assets that have been pooled to
have been transferred from the balance sheets serve as collateral. The originators of the
of the institutions that originated the loans assets receive cash proceeds from the sale of
(in most cases commercial banks, thrift institu- the obligations and may continue to service
tions, and finance companies) to the balance the loans, thereby earning fee income.
sheets of the SPVs. The principal sources of information on the
Another asset of the sector is motor vehi- sector are the publications Inside MBS and
cles leased to consumers; the leases were ABS and Commercial Mortgage Alert; reports
originally held by finance companies but from Sallie Mae; data obtained from Trepp/
have now been securitized. Acquisitions of the PSA CMO Information Service; quarterly
automobiles by the issuers of asset-backed reports of condition submitted by domestic
securities sector, shown as fixed investment in commercial banks; and surveys of finance
line 2 of table F.126, occurs when the leases companies.
638 Guide to the Flow of Funds Accounts, Volume 1

Table F.127 Finance Companies

Finance companies are nondepository finan- lessors or liabilities of households; lease pay-
cial institutions that provide credit to busi- ments are treated as consumer expenditures by
nesses and individuals; about 12 percent of the lessee and as current income to the lessor.
their total financial assets are in residen- (The leases are shown as a memorandum item
tial and commercial real estate loans. Credit at the bottom of the table.) Debt used to
extended to businesses covers many types of finance the purchase of the vehicles by finance
lending: retail motor vehicle loans; wholesale companies is reported as a liability.
motor vehicle loans, or floor plan financing; Many finance companies have high credit
equipment loans and leases; and other busi- ratings and are able to meet a substantial
ness receivables, consisting of loans on com- portion of their funding needs by issuing com-
mercial accounts receivable, factored commer- mercial paper and corporate bonds. Finance
cial accounts, receivable dealer capital, small companies that are subsidiaries of holding
loans used primarily for business or farm pur- companies obtain equity financing from their
poses, and wholesale loans for mobile homes, domestic or foreign parent companies; some
campers, and travel trailers. Credit extended of the subsidiaries are known as captive
to consumers includes motor vehicle loans, finance companies and provide credit to buy-
personal cash loans, mobile home loans, and ers of the parent companies’ products.
loans to purchase consumer goods such as Information on finance companies is
appliances, apparel, and recreational vehicles. obtained from monthly sample surveys of
Excluded from the table are securitized loans, finance companies conducted by the Federal
which are assets of the issuers of asset-backed Reserve Board; the surveys are benchmarked
securities sector. to the Federal Reserve Board’s quinquennial
Finance companies also own consumer survey of finance companies. Data from the
motor vehicles that are leased to consumers; surveys are published in the Federal Reserve
acquisitions of the vehicles are shown as fixed Board’s monthly G.20 statistical release,
investment in line 2 of table F.127. The leases ‘‘Finance Companies,’’ and in the Federal
themselves are not financial assets of the Reserve Bulletin.
650 Guide to the Flow of Funds Accounts, Volume 2

Table F.128 Mortgage Companies

The mortgage companies sector is made up Mortgage holdings are the only assets of the
of mortgage brokers and mortgage bankers. sector. These assets are financed mainly with
Mortgage brokers originate mortgage loans, bank loans; those companies that are subsidi-
which they then sell to portfolio lenders, aries of bank holding companies receive
government-sponsored enterprises (GSEs), equity funding of their assets from their parent
and mortgage bankers; they also originate companies.
mortgages in other lenders’ names. Mortgage Information on the assets and liabilities
bankers both originate mortgage loans and of the sector is obtained primarily from
purchase them from brokers; they sell mort- surveys of mortgage holdings conducted
gages to portfolio lenders and GSEs, and they by the Department of Housing and Urban
pool and securitize mortgages for sale as Development (HUD).
mortgage-backed securities. Both brokers and
bankers sell virtually all their mortgages in the
secondary markets.
654 Guide to the Flow of Funds Accounts, Volume 2

Table F.129 Real Estate Investment Trusts

Real estate investment trusts (REITs) are com- if they distribute nearly all their income to
panies similar to mutual funds that hold port- their shareholders.
folios of real estate and real estate-related REITs as a group suffered a severe decline
financial instruments for the benefit of their during the late 1970s, but since the early
shareholders; they were created by federal leg- 1990s they have grown strongly; REIT equity
islation in 1960 to provide funds to the mort- shares have become a popular form of invest-
gage market. Real estate held by REITs ment with both individuals and institutions
includes multifamily residential, retail, office, because they provide a relatively liquid means
industrial, health care, and hotel properties of investing in real estate. Several variants of
and self-storage facilities; the financial instru- the REIT structure have developed in response
ments held by REITs are construction and to tax considerations.
development loans, mortgages, and mortgage- REITs obtain the majority of their funds
backed securities. REITs are restricted to earn- through equity issues, but they also borrow
ing their income mainly from passive sources in the credit markets. Data on the sector
(that is, rents, interest, dividends, and gains are obtained from the National Association
from sales) and are exempt from federal cor- of Real Estate Investment Trusts (NAREIT), a
porate income tax if the major portion of their trade association.
income is from real estate or mortgages and
662 Guide to the Flow of Funds Accounts, Volume 2

Table F.130 Security Brokers and Dealers

Security brokers and dealers are firms that buy the secondary market. Dealers in U.S. govern-
and sell securities for a fee, hold an inventory ment securities that stand ready to buy from or
of securities for resale, or do both. The firms sell to the Federal Reserve System assist in the
that make up sector are those that submit implementation of monetary policy conducted
information to the Securities and Exchange through open market operations.
Commission on either of two reporting forms, The major assets of the sector are collateral
FOCUS (Financial and Operational Combined repayable from funding corporations in con-
Uniform Single Report) or FOGS (Report on nection with securities borrowing, along with
Finances and Operations of Government Secu- corporate and government securities held for
rities Brokers and Dealers). Brokers and deal- redistribution and credit provided to custom-
ers are an important link in the transmission of ers. Sector operations are financed largely with
funds from savers to the ultimate investors investment by parent companies, funds left
because they are a means of distributing both on deposit by customers, security repurchase
new security issues and those being resold on agreements, and bank loans.
676 Guide to the Flow of Funds Accounts, Volume 1

Table F.131 Funding Corporations

The funding corporation sector comprises four collateral is returned to the dealers when the
types of financial institutions and entities: sub- borrowed securities are returned. While it is
sidiaries of foreign banks that raise funds in being held in custody, the collateral is invested
the U.S. capital markets and transfer the pro- in money market mutual fund shares, commer-
ceeds to foreign banking offices in the U.S.; cial paper, and corporate bonds.
subsidiaries of foreign bank and nonbank Figures for commercial paper issuance by
financial firms that raise funds in the U.S. and funding corporations are derived residually by
transfer them to the parent company abroad; subtracting the amounts owed by other finan-
nonbank financial holding companies; and cial issuers from total financial commercial
custodial accounts for reinvested collateral paper outstanding shown in the daily ‘‘Com-
associated with securities-lending operations. mercial Paper’’ release published by the Fed-
The assets of the subsidiaries and the hold- eral Reserve Board. Data on investment by
ing companies are their investments in affili- funding corporations in foreign banking office
ates. Funding for these assets is obtained from subsidiaries are also taken from the daily
the commercial paper market, in which the release. Through 1997:Q2, information on
funding corporations are major issuers. Pro- investment by funding corporations in their
ceeds that are transferred to parent institutions security broker and dealer affiliates was based
abroad are reported as foreign direct invest- on data from the Federal Reserve Bank of
ment (FDI); by convention, FDI is reported New York’s commercial paper release; data
as an asset of the parent and a liability of the are now estimated by the Flow of Funds Sec-
subsidiary. In the case of funding corpora- tion on the basis of the previous relationship
tions, therefore, the foreign parents’ FDI between commercial paper issuance by fund-
assets and the subsidiaries’ FDI liabilities have ing corporations reported in that release and
negative balances (because the parents owe net corporate bond issuance by investment
the subsidiaries). banks. Estimates of reinvested collateral held
Custodial accounts are bookkeeping entities in custodial accounts are based on data on
established to hold cash collateral put up by securities borrowed and lent reported by
security dealers to back securities they borrow brokers and dealers to the Securities and
to cover short sales and delivery failures; the Exchange Commission.
690 Guide to the Flow of Funds Accounts, Volume 2

Table F.200 Gold and Official Foreign Exchange Holdings

Monetary gold and official foreign exchange Special drawing rights (SDRs) are account-
holdings are U.S. official international reserve ing units, sometimes called ‘‘paper gold,’’ that
assets; also considered official reserve assets were originally created by the IMF in 1969 to
and included in this category are special draw- serve as international reserve assets that would
ing rights and the net U.S. reserve position supplement countries’ existing international
in the International Monetary Fund (IMF). reserves; since 1970 there have been six allo-
Transactions in international reserve assets are cations of SDRs to IMF member countries in
made among official agencies of the world’s proportion to their IMF quotas, the latest allo-
countries to settle international accounts. cation being made in 1981. SDRs were origi-
Monetary gold is the U.S. government gold nally valued at 0.888671 gram of fine gold
stock held by the Department of the Treasury. (equal to one U.S. dollar at the dollar’s par
It excludes gold in other, non-monetary forms value at that time of $35 per troy ounce).
such as ore, bullion, coins and medallions, From 1996 through 1998, the value was based
jewelry, and dental supplies (exports and on a weighted average of the exchange rates
imports of gold in these forms are, however, for the currencies of the U.S. (39 percent),
included in balance of payments statistics Germany (21 percent), Japan (18 percent),
for merchandise trade). Monetary gold also France (11 percent), and the United Kingdom
excludes gold owned by foreign official insti- (11 percent); since the beginning of 1999 the
tutions that is stored at the Federal Reserve value has been based on an average of the U.S.
Bank of New York. At present, all U.S. mone- dollar (39 percent), the euro (32 percent), the
tary gold is ‘‘monetized’’; when gold is mon- Japanese yen (18 percent), and the U.K. pound
etized, the Treasury issues a gold certificate sterling (11 percent).
equal to the value of the gold to the Federal The U.S. net reserve position in the IMF
Reserve System, which increases the value is equal to the U.S. quota in the IMF minus
of the Treasury’s deposit account by the IMF holdings of dollars (excluding dollar
same amount. In the flow of funds accounts, holdings in IMF administrative and subsidiary
monetized gold is an asset of the monetary accounts) plus net U.S. loans to the IMF. The
authority—the Federal Reserve Banks and net reserve position represents the amount of
certain Treasury monetary accounts (these foreign exchange that the U.S. may uncon-
accounts are not included in the federal gov- ditionally draw from the IMF, up to the full
ernment sector). In the past, amounts of amount of its quota. The value of the position
unmonetized monetary gold have been held is affected by IMF transactions in U.S. dollars
by the Exchange Stabilization Fund, an entity with both the U.S. and foreign countries.
within the Treasury Department. In the flow of funds accounts, net U.S.
Official foreign exchange consists of hold- acquisitions of monetary gold and special
ings of foreign currencies by the Treasury drawing rights are equal to net sales of these
Department and the Federal Reserve System items by foreigners; in tables of outstanding
that are used in connection with exchange values, they are considered U.S. assets but not
market interventions, reciprocal currency foreign liabilities, in accordance with interna-
arrangements with foreign monetary authori- tional conventions for treatment. Official hold-
ties, foreign currency transactions with the ings of foreign currencies and the net U.S.
IMF, and borrowings of foreign currencies position in the IMF are considered foreign
in foreign capital markets. Official foreign liabilities for both flows and outstandings.
exchange excludes holdings of foreign cur- Data for the series are obtained from the U.S.
rencies by federal government departments international transactions tables in the Survey
and agencies that are used for other types of of Current Business; some are shown in the
transactions. Federal Reserve Bulletin.
696 Guide to the Flow of Funds Accounts, Volume 2

Table F.201 SDR Certificates and Treasury Currency

U.S. Treasury currency is the stock of cur- Transactions in Treasury currency and in
rency for which the U.S. Treasury is the legal SDR certificates take place only between the
obligor. Since 1966, Treasury currency has Treasury and the monetary authority. The dis-
comprised silver dollars and fractional coins, crepancy item for Treasury currency—the dif-
United States notes, and items in the process ference between changes in the liability of the
of retirement. Special drawing rights (SDRs) federal government for Treasury currency and
are international monetary reserves issued to changes in holdings of Treasury currency by
member countries by the International Mone- the monetary authority—arises from seignior-
tary Fund. Special drawing rights certificates age, the profit that the federal government
are issued to Federal Reserve Banks by the earns from the issuance of its currency.
Treasury when it monetizes the special draw- Data on U.S. government liabilities are
ing rights themselves. The first allocation of taken from the Monthly Treasury Statement
SDRs to the U.S. took place in 1970, and the and the Monthly Statement of the Public Debt;
first issue of SDR certificates was made the data on the holdings of the monetary authority
same year. Both Treasury currency and SDR come from the Federal Reserve Bulletin.
certificates are among the factors supplying
reserve funds to the banking system (shown in
table 1.11 in the Federal Reserve Bulletin).
698 Guide to the Flow of Funds Accounts, Volume 2

Table F.202 U.S. Deposits in Foreign Countries

U.S. deposits in foreign countries are deposits, filed with the Internal Revenue Service, from
including negotiable certificates of deposit, the Federal Reserve Board’s Survey of Con-
held in foreign financial institutions by private sumer Finances, from the Quarterly Financial
U.S. owners. These deposits are not included Report (QFR), from Statistics of Income (SOI)
in statistics on the U.S. money supply. data published by the Internal Revenue Ser-
Data on the deposit liabilities of foreign vice, and from data collected by the Invest-
institutions are taken from the U.S. interna- ment Company Institute (ICI). Data on the
tional transactions (USIT) tables published in holdings of foreign deposits by U.S. residents
the Survey of Current Business (SCB); figures are incomplete, as indicated by the existence
on holdings of the deposits by U.S. sectors are and relative size of the discrepancy for the
estimated from reports of currency holdings category.
702 Guide to the Flow of Funds Accounts, Volume 2

Table F.203 Net Interbank Transactions

Net interbank transactions in the flow of funds termed ‘‘due from’’ and ‘‘due to’’ positions
accounts are changes in the assets and liabili- respectively). However, because changes in
ties of banking and monetary institutions due asset and liability positions are frequently
from or owed to other such institutions that related to each other and fluctuate in tandem,
are used to manage transactions, assets, and and because some institutions report only on a
liabilities and to facilitate institutions’ opera- net basis, interbank transactions in the flow of
tions as intermediaries. The transactions are funds accounts are treated on a net basis. The
used for short-term lending, netting and clear- data on net positions are often much less vola-
ing of transaction cash flows, acquisition of tile than the data on gross positions and pro-
foreign currencies, maintenance of correspon- vide better measures of net lending or bor-
dent balances, management of assets and lia- rowing during a period. Also, in consolidated
bilities, and adjustment of reserves. They are accounts for the banking sector, net interbank
also used to make quasi-equity investments, claims for the most part cancel; exceptions are
especially between bank holding companies net positions vis-à-vis the monetary authority
and their subsidiaries and between banks oper- and banks in foreign countries, and floats and
ating in the U.S. and their international bank- timing discrepancies in reported data.
ing facilities (IBFs) or other affiliated foreign Data on interbank transactions are taken
offices. Interbank positions exist among the from several sources: for the monetary
monetary authority, U.S.-chartered commer- authority, from the Federal Reserve Bulletin
cial banks, foreign banking offices in the U.S., (FR Bulletin); for domestic banks, from quar-
bank holding companies, and foreign banks, terly reports of condition submitted to the
including IBFs. federal regulatory authorities; and for foreign
A bank typically has both asset and liability banks, from tabulations supplied by the
positions with other banks (on balance sheets, Department of the Treasury.
716 Guide to the Flow of Funds Accounts, Volume 2

Table F.204 Checkable Deposits and Currency

Checkable deposits consist of demand depos- not make it possible to show their holdings
its at U.S.-chartered commercial banks and of deposits and currency separately, but esti-
foreign banking offices in the U.S., negotiable mates of currency holdings by the rest of the
order of withdrawal (NOW) accounts and world are available; U.S. currency held by the
automatic transfer service (ATS) accounts at rest of the world totaled about $234 billion
depository institutions, credit union share at the end of 1997 (out of total currency in
drafts, and demand deposits at savings insti- circulation of about $437 billion).
tutions; checkable deposits are liabilities of Checkable deposits and currency are com-
these institutions. Currency is U.S. currency ponents of the monetary aggregates (measures
and coin held outside the U.S. Treasury, of the national money supply published by the
Federal Reserve Banks, and the vaults of Federal Reserve System). However, the data
depository institutions; currency in circula- on checkable deposits and currency outstand-
tion is a liability of the monetary authority. ing published in the flow of funds accounts
Data on deposit liabilities are obtained pri- differ in several respects from the data
marily from quarterly reports of condition included in these aggregates: The monetary
submitted by depository institutions to the aggregates are calculated on a daily-average
federal regulatory authorities. Data on cur- basis, whereas the flow of funds data are as of
rency liabilities are prepared within the the last day of the time period; travelers check
Federal Reserve Board. liabilities of nonbank issuers are included in
Data on holdings of checkable deposits and the monetary aggregates but not in the flow of
currency by individual sectors are tabulated funds series; outstandings data are seasonally
by trade associations and federal agencies adjusted for the monetary aggregates but are
from the balance sheets of entities that make not adjusted for the flow of funds accounts;
up the sectors; holdings by the households and and deposits held by depository institutions
nonprofit organizations sector are the residual and by the federal government, as well as
after the holdings of all other sectors have Federal Reserve float and cash items in pro-
been subtracted from the total checkable cess of collection, are excluded from the
deposit and currency liabilities of depository monetary aggregates but not from the flow of
institutions and the monetary authority. For funds accounts.
most sectors the information available does
732 Guide to the Flow of Funds Accounts, Volume 2

Table F.205 Time and Savings Deposits

Time and savings deposits are deposits at Information on time and savings deposit
U.S.-chartered commercial banks, foreign liabilities comes primarily from the quarterly
banking offices in the U.S., banks in U.S.- reports of condition filed by the institutions
affiliated areas, savings institutions, and credit with federal regulatory authorities. Data on
unions that depositors may withdraw after holdings of time and savings deposits by most
giving prior notice. The category comprises of the sectors are taken from balance sheets
small time deposits (deposits with balances compiled by trade associations and federal
of less than $100,000 that have a stated agencies; holdings by the households and
maturity) and savings deposits (passbook sav- nonprofit organizations sector are the resid-
ings accounts) as well as large time deposits ual found by subtracting the holdings of the
(deposits with balances of $100,000 or more other sectors from the total liabilities. Data on
that have a stated maturity); both money mar- liabilities are available separately for small
ket deposit accounts and IRA/Keogh accounts time and savings deposits and large time
held in the form of time and savings deposits deposits, but data are insufficient to classify
are included in the total. In practice, deposi- sectors’ assets by type of deposit.
tors may generally withdraw funds from pass- Small time and savings deposits are
book savings accounts at any time without included in the M2 and M3 monetary aggre-
giving prior notice and without penalty, but gates (measures of the national money supply
they may not draw down funds from a time published by the Federal Reserve System);
deposit having a stated maturity before the large time deposits are included in the broad
maturity date without penalty. measure M3.
746 Guide to the Flow of Funds Accounts, Volume 2

Table F.206 Money Market Mutual Fund Shares

Money market mutual fund shares are obliga- fund shares is included in the M2 monetary
tions issued by money market mutual funds, aggregate; the value of all such shares is
which are open-end investment companies included in the M3 aggregate (the monetary
that invest in short-term, liquid assets, includ- aggregates are measures of the national money
ing short-term municipal securities. The funds supply published by the Federal Reserve
began operating in the 1970s and quickly System).
became popular with investors as a higher- Data on the issuance of money market
earning alternative to deposits. The shares mutual fund shares and on holdings by some
may be redeemed at any time, although the sectors come from the Investment Company
funds usually require that a minimum balance Institute (ICI); other data are obtained from
remain in each account. Money market mutual regulatory reports or are estimated by the Flow
fund shares may be used in carrying out of Funds Section. Holdings by the households
transactions—the funds often allow sharehold- and nonprofit organizations sector are the
ers to write checks, usually for a minimum residual after the holdings of all other sectors
amount, such as $500, against individual have been subtracted from the total share
account balances—and the value of retail, value.
or individual investor, money market mutual
752 Guide to the Flow of Funds Accounts, Volume 2

Table F.207 Federal Funds and Security Repurchase Agreements

Federal funds purchases and security repur- reserves into (or remove reserves from) the
chase agreements are short-term borrowings banking system and withdraw them when
by institutions in the commercial banking, sav- they are no longer needed (or replace them
ings institutions, real estate investment trusts, when the need returns). Government security
and security brokers and dealers sectors. In the dealers use repurchase agreements, often with
flow of funds accounts, this category excludes nonfinancial corporations, to finance their
transactions carried out entirely among com- inventories. Commercial banks and savings
mercial banking groups, which are classified institutions use retail repurchase agreements
as net interbank claims and are included in to temporarily raise funds from individuals.
table F.203. Because some sectors do not report federal
Federal funds are immediately available funds purchases or sales separately from secu-
balances borrowed for periods of one day or rity repurchase agreements, it is not possible
longer. A security repurchase agreement, also to show net purchases and sales of the two
called an RP or repo, is an agreement to sell items individually. The relatively large size
an asset, in many cases a federal government of the discrepancy in the table (line 23) (that
security, accompanied simultaneously by an is, the difference between changes in liabili-
agreement that the seller will repurchase the ties and changes in assets) on a quarterly basis
asset at a later date at a higher price. Repur- is likely due to differences in the timing of
chase agreements are viewed as collateralized recording of sales and purchases.
loans, with the difference between the sale Data on borrowing in the two markets
price and the repurchase price of the security come from reports submitted to the federal
constituting the interest payment. Repurchase regulatory authorities; information on asset
agreements (and reverse repurchase agree- acquisition comes from the federal regulatory
ments) are often carried out by the Federal authorities, other federal agencies, trade asso-
Reserve System in order to temporarily inject ciations, and private data reporting services.
766 Guide to the Flow of Funds Accounts, Volume 2

Table F.208 Open Market Paper

Open market paper comprises commercial published in the Federal Reserve Board’s
paper and bankers acceptances. Commercial daily ‘‘Commercial Paper’’ statistical release,
paper consists of short-term unsecured prom- which in turn are derived from data supplied
issory notes issued by financial and non- by the Depository Trust Company; through
financial borrowers; maturities range up to 1997:Q2, data on commercial paper were col-
270 days and average about 30 days. Commer- lected by the Federal Reserve Bank of New
cial paper may be directly issued or dealer- York. Data on bankers acceptance liabilities
placed. It is usually bought and sold on a come from quarterly reports of condition sub-
discount basis, with face value being paid to mitted to federal regulatory authorities by
holders upon maturity. U.S.-chartered commercial banks and foreign
A bankers acceptance is a draft or bill of banking offices in the U.S.; in those reports the
exchange drawn on and accepted by a banking data are reported as ‘‘bank’s liability on accep-
institution (the ‘‘accepting bank’’) or its agent tances executed and outstanding.’’
for payment by that institution on a future Data on the holdings of open market paper
date specified in the instrument (most com- by investing sectors are obtained from federal
monly about three months later). Funds are regulatory authorities, other federal agencies,
advanced to the drawer of the acceptance trade associations, and private data reporting
(the borrower) by the discounting of the services. From the information available, it is
accepted draft either by the accepting bank not possible to determine sectors’ holdings of
or by others; the accepted draft is a negotiable commercial paper separately from their hold-
money-market instrument and may be sold ings of bankers acceptances. Holdings of open
and resold subsequent to its original discount- market paper by the households and nonprofit
ing. On the maturity date, the current owner organizations sector are the assets of nonprofit
of the acceptance presents the accepted draft organizations; information on these holdings
to the accepting bank for payment. The bank is based on reports to the Internal Revenue
is obligated to pay the holder the face amount Service by such organizations and on esti-
of the draft on the maturity date; the borrower mates of asset holdings provided by a sample
is obligated to repay the borrowed funds to the of large foundations. Funding corporations
bank on or before that date. Bankers accep- (see table F.131) are the residual holder of
tances are often used in the financing of inter- open market paper; their holdings are calcu-
national trade. In the flow of funds accounts, lated by subtracting the holdings of other sec-
they are treated as liabilities of U.S.-chartered tors from total issuers’ liabilities for commer-
commercial banks and of foreign banking cial paper and bankers acceptances.
offices in the U.S.
Information on the issuance of commercial
paper in the U.S. market comes from data
778 Guide to the Flow of Funds Accounts, Volume 2

Table F.209 Treasury Securities

U.S. Treasury securities are marketable and to assist in compliance with yield restrictions
nonmarketable securities issued by the Depart- in the Internal Revenue Code). Information on
ment of the Treasury. The total for Treasury the issuance of U.S. Treasury securities is
securities outstanding shown in the flow of obtained from publications of the Department
funds accounts includes premium and is net of the Treasury, primarily the Monthly Trea-
of discount; about $8 billion of the total is sury Statement and the Monthly Statement of
non-interest-bearing debt, mostly matured the Public Debt.
securities that have not been presented for Data on the holdings of U.S. Treasury secu-
redemption. The figure excludes amounts that rities by most individual sectors come from
are held by government agencies and trust federal regulatory authorities, other federal
funds (such as the Federal Old Age and Survi- agencies, trade associations, and private data
vors Insurance Trust Fund) and is thus about reporting services. The households and non-
$1.7 trillion smaller than published values for profit organizations sector is assumed, in the
the total public debt. flow of funds accounts, to be the holder of all
Marketable Treasury securities comprise savings bonds and notes. Because information
Treasury bills (which have original maturi- for nonfarm noncorporate businesses and
ties of up to fifty-two weeks); Treasury notes closed-end funds is not sufficient to separate
(maturities of up to ten years); Treasury bonds their purchases of U.S. government securities
(maturities of more than ten years, up to (Treasury securities and agency securities) by
thirty years); securities issued by the Federal type, all purchases of U.S. government securi-
Financing Bank; and inflation-indexed mar- ties by the two sectors are considered pur-
ketable notes and bonds. Nonmarketable chases of Treasury securities. The holdings of
Treasury securities, which are issued for spe- the households and nonprofit organizations
cial purposes or to particular groups of inves- sector of Treasury securities other than sav-
tors, include U.S. savings bonds and notes ings bonds and notes are the residual after the
and the state and local government series, or holdings of all other sectors have been sub-
SLGS (securities offered for sale to issuers of tracted from the total.
state and local government tax-exempt debt
798 Guide to the Flow of Funds Accounts, Volume 2

Table F.210 Agency Securities

U.S. government agency securities are of three 3. Federally related mortgage pool securi-
types: ties issued by the Government National Mort-
1. Securities issued by federal agencies, gage Association, Fannie Mae, Freddie Mac,
other than the Treasury. These securities, and the Farm Service Agency.
reported as ‘‘agency securities issued under Data on outstanding issuance of U.S. gov-
special financing authorities’’ in the Monthly ernment agency securities come from publica-
Treasury Statement, currently include obliga- tions of the Department of the Treasury and
tions of the U.S. issued by the Export–Import from balance sheets of government-sponsored
Bank of the U.S. and the FSLIC Resolu- enterprises. Data on the holdings by most indi-
tion Fund of the Federal Deposit Insurance vidual sectors come from federal regulatory
Corporation; obligations guaranteed by the authorities, other federal agencies, trade asso-
U.S. issued by the Federal Housing Adminis- ciations, and private reporting services. Infor-
tration, the Bureau of Land Management, and mation on the holdings of nonfarm noncorpo-
the Coast Guard; and obligations not guaran- rate businesses and closed-end funds is not
teed by the U.S. issued by the Architect of the available separately, and purchases by these
Capitol and by four independent agencies, sectors are included in totals for purchases
including the Postal Service and the Tennes- of Treasury securities, shown in table F.209.
see Valley Authority. Also included in this Purchases by the households and nonprofit
category are Commodity Credit Corporation organizations sector are the residual after the
certificates of interest, whose value has been purchases by all other sectors have been sub-
zero since the second quarter of 1970, and tracted from total issuance.
loan participation certificates, whose value has
been zero since the third quarter of 1988.
2. Securities issued by government-
sponsored enterprises, such as Fannie Mae
and the Federal Home Loan Banks.
818 Guide to the Flow of Funds Accounts, Volume 2

Table F.211 Municipal Securities and Loans

Municipal securities and loans are obligations from federal income tax. Since 1986, how-
issued primarily by state and local govern- ever, a small portion of the debt issued (about
ments. The category consists of long-term and 3 percent of gross issuance of long-term secu-
short-term securities; it excludes the trade rities in recent years) has been taxable. The
debt of state and local governments and U.S. two types of debt are not shown separately in
government loans to them. A portion of the flow of funds accounts.
the municipal debt outstanding—the amount Data on issuance and retirement of munici-
issued by nonprofit hospitals and that issued pal obligations are obtained from private
by nongovernmental entities to finance activi- data reporting services and the Bureau of the
ties such as lending to students, along with Census. Data on holdings come from balance
public-purpose investment undertaken by pri- sheets obtained from regulatory authorities,
vate entities—is owed by the households and government agencies, trade associations, and
nonprofit organizations sector and the non- private data reporting services; holdings of
farm nonfinancial corporate business sector. the households and nonprofit organizations
Some municipal issues are included as loan sector are the residual after the holdings of all
assets on the balance sheets of holders. other sectors have been subtracted from total
Most municipal debt is tax-exempt; that issuance.
is, the interest earned on holdings is exempt
830 Guide to the Flow of Funds Accounts, Volume 2

Table F.212 Corporate and Foreign Bonds

Corporate and foreign bonds are debt obliga- On the asset side, it is not possible to sepa-
tions of U.S. financial and nonfinancial corpo- rate the purchases of domestic issues and for-
rations and foreign entities. The obligations, eign issues (except by life insurance compa-
which are reported on balance sheets as debt nies), and sector holdings of the securities
having a remaining maturity of more than one may be of both types. Life insurance compa-
year, include bonds, notes, debentures, manda- nies hold the largest share (nearly a third) of
tory convertible securities, long-term debt, the total corporate bond debt outstanding;
and unsecured debt; the obligations of savings outstanding holdings by the various sectors
institutions include mortgage-collateralized are shown at book value, except for bonds
securities. For U.S. corporations, the category held by security brokers and dealers, which
includes bonds issued both in the U.S. and are shown at market value. Foreign purchases
in foreign countries, but not bonds issued in of corporate bonds include purchases by
foreign countries by foreign subsidiaries of non–U.S. residents of new issues sold abroad
the U.S. corporations. For the rest of the world, by U.S. corporations as well as net foreign
the category is made up of bonds issued in the purchases of outstanding bonds issued by U.S.
U.S. by foreign borrowers through U.S. deal- corporations; also included are foreign pur-
ers and purchased by U.S. residents; the for- chases of municipal securities and, before
eign borrowers are private corporations and 1993, foreign purchases of bonds issued by
financial institutions, central governments U.S. corporations through finance subsidiaries
and their agencies and corporations, local in the Netherlands Antilles.
and municipal governments, and international Information on purchases of corporate
organizations. Also included in the debt obli- bonds is taken from reports submitted to fed-
gations of the rest of the world are bonds of eral regulatory authorities and from the publi-
foreign entities that were originally issued cations of trade associations and private data
abroad but were subsequently acquired by U.S. reporting services. Information on purchases
residents through U.S. dealers; this component by the rest of the world appears in the Survey
does not include bonds issued by foreign enti- of Current Business; data on these transactions
ties that are purchased by non–U.S. residents. are collected from U.S. dealers and reflect
Data on bond issuance are obtained from only transactions that take place through these
private data reporting services, federal regula- dealers. Purchases by the households and non-
tory authorities, and industry trade associa- profit organizations sector are found as the
tions; information on transactions involving residual, after the purchases by all other sec-
foreigners appears in the U.S. international tors have been subtracted from total issuance.
transaction tables published in the Survey of
Current Business (SCB).
850 Guide to the Flow of Funds Accounts, Volume 2

Table F.213 Corporate Equities

Corporate equities are shares of ownership chases of equities by foreigners are included
in financial and nonfinancial corporate busi- in this table only if they are considered ‘‘port-
nesses. The category comprises common and folio’’ investment, that is, if they are pur-
preferred shares issued by domestic corpora- chases by a single foreign investor that will
tions and U.S. purchases of shares issued by result in ownership of less than 10 percent of
foreign corporations, including shares held the outstanding equity of the issuing U.S. firm;
in the form of American depositary receipts purchases by a single foreign investor that
(ADRs); it does not include mutual fund result in ownership of 10 percent or more of
shares, which are reported separately in the firm’s outstanding equity are considered
table F.214. The total value of corporate equi- foreign direct investment and are included
ties includes the value of the shares of all in table F.230. Purchases of equities by the
corporations, both widely held and closely households and nonprofit organizations sector
held and both traded on organized exchanges are found as the residual after the purchases of
and sold over the counter; shares traded on the all other sectors have been subtracted from
New York and American Stock Exchanges total issuance.
and in the Nasdaq Stock Market account In tables of outstanding values, corporate
for most of the total. equities are shown at market value. Because
Data on issuance and holdings of corpo- equities are ownership shares and a part of the
rate equities are obtained from private data net worth of corporations, they are not consid-
reporting services, trade associations, and ered liabilities of the incorporated sectors.
regulatory and other federal agencies. Pur-
864 Guide to the Flow of Funds Accounts, Volume 2

Table F.214 Mutual Fund Shares

Mutual fund shares are obligations issued by pany Institute (ICI); data on holdings of shares
mutual funds, also known as open-end invest- by sectors come from regulatory and trade
ment companies. Mutual funds issue their association reports and from ICI. Share values
shares on demand and stand ready to redeem are determined by the market value of the
them at net asset value (the market value of underlying assets held by the funds, but the
the total assets of the redeeming fund less its values for the shares outstanding shown in the
total liabilities, divided by the number of flow of funds tables differ from figures
shares outstanding). The category excludes reported by ICI because in the flow of funds
money market mutual fund shares, which are accounts some of the mutual funds’ financial
shown in table F.206. Mutual fund shares are assets are shown at book rather than market
distinct from corporate equities; even though value. Mutual fund shares held by the house-
the mutual funds themselves hold corporate holds and nonprofit organizations sector,
equities, funds invested in equities are not whose holdings are larger than those of any
double-counted in the flow of funds accounts. other sector, are the residual after the holdings
Data on issues of mutual fund shares are of all other sectors have been subtracted
derived from reports of the Investment Com- from the total.
870 Guide to the Flow of Funds Accounts, Volume 2

Table F.215 Bank Loans Not Elsewhere Classified

Bank loans not elsewhere classified (n.e.c.) holds and nonprofit organizations sector, a
are loans held by U.S.-chartered commercial much smaller portion of the total, consist of
banks, foreign banking offices in the U.S., overdrafts on deposit accounts; loans to indi-
bank holding companies, and banks in viduals, other than consumer credit and loans
U.S.-affiliated areas that are not included in secured by real estate; and loans to nonprofit
any of the identified loan categories (mort- organizations. Bank loans n.e.c. are also made
gages, consumer credit, security credit, and to the rest of the world and to some financial
open market paper). The category also institutions.
includes small amounts lent in the past to Data on total bank loans outstanding and on
foreign borrowers by the Federal Reserve Sys- the loans made to most sectors are from quar-
tem; the value of this component has been terly reports of condition submitted by each
zero since 1970. At the end of 1997 more than of the banking groups to federal regulatory
80 percent of bank loans n.e.c. outstanding authorities; data on loans extended by banks
had been extended to nonfinancial businesses, to finance companies, real estate investment
in the form of commercial and industrial trusts, and mortgage companies are obtained
loans, lease financing receivables, and agri- from reports of trade associations.
cultural loans. Bank loans n.e.c. to the house-
884 Guide to the Flow of Funds Accounts, Volume 2

Table F.216 Other Loans and Advances

Other loans and advances are loans of various by savings institutions that file reports with
types that do not fit into one of the other loan the Federal Deposit Insurance Corporation. In
categories accounted for in the flow of funds the flow of funds accounts, the liability for the
accounts (open market paper, mortgages, con- loans is divided evenly between the nonfarm
sumer credit, security credit, and bank loans nonfinancial corporate business sector and the
not elsewhere classified). The types of loans nonfarm noncorporate business sector.
are described below. (Because the category 5. Policy loans—Loans secured by the cash
‘‘bank loans not elsewhere classified’’ residu- surrender value of life insurance policies
ally accounts for all loans made by the com- issued by life insurance companies and by the
mercial banking sector, ‘‘other loans and federal government. In the flow of funds
advances’’ does not include loans made by accounts, all policy loans are liabilities of the
commercial banks.) Information on these households and nonprofit organizations sector.
loans is obtained from the federal regulatory 6. Loans from government-sponsored
authorities, other federal agencies, institutional enterprises—Loans, other than mortgages,
surveys, and trade associations. from Sallie Mae, the Farm Credit System, and
1. U.S. government loans—Loans, other the Federal Home Loan Banks. Government-
than mortgages and trade credit, made by the sponsored enterprises assist in directing credit
federal government for numerous public pur- to particular segments of the economy. Among
poses, including public housing, disaster the forms of lending included in this category
relief, and assistance to small businesses. Bor- are student loans, agricultural loans, and
rowers are individuals, farm and nonfarm advances to financial institutions that are
businesses, state and local governments, for- members of the Federal Home Loan Bank
eigners, and Sallie Mae. System.
2. Foreign loans to U.S. corporate 7. Securitized loans held by issuers of
business—Loans of all types, including real asset-backed securities (ABS)—Student loans
estate loans, made by foreign banks to U.S. owed by the households and nonprofit organi-
nonfarm nonfinancial corporations. zations sector and sold by Sallie Mae to the
3. Customers’ acceptance liabilities to ABS sector, and securitized loans to busi-
banks—Obligations to banks for funds that nesses originated by finance companies and
have been advanced to the drawers of drafts banks and now on the balance sheets of the
or bills of exchange that have been accepted ABS sector. The latter assets are motor vehicle
by the banks (bankers acceptances). The bor- loans and leases, equipment loans and leases,
rowers, foreigners and U.S. nonfarm nonfinan- and other business receivables (loans on com-
cial corporations, are obligated to repay the mercial accounts receivable; factored commer-
funds on or before the maturity dates of the cial accounts; receivable dealer capital; small
accepted drafts. In the flow of funds accounts, loans used primarily for business or farm pur-
customers’ acceptance liabilities are assets of poses; and wholesale and lease paper for
U.S.-chartered commercial banks and foreign mobile homes, recreation vehicles, and travel
banking offices in the U.S. trailers).
4. Savings institution loans to business— 8. Finance company loans to business—
Commercial loans made by savings institu- Loans made by finance companies to nonfarm
tions that file reports with the Office of Thrift nonfinancial corporate businesses and non-
Supervision; also, commercial and industrial farm noncorporate businesses. The liability
loans and lease financing receivables, along for these loans is allocated between the two
with several other categories of loans included sectors by the Flow of Funds Section.
here because the amounts are small, held
900 Guide to the Flow of Funds Accounts, Volume 2

Table F.217 Total Mortgages

Mortgages are loans that are secured in whole gage loans in the form of home mortgages,
or in part by real property. This table summa- whereas life insurance companies hold about
rizes transactions in home mortgages, multi- the same percentage of their mortgage loans
family residential mortgages, commercial as commercial mortgages. The category
mortgages, and farm mortgages. Holders of includes mortgages that have been pooled to
mortgages include lenders that both originate provide collateral for mortgage pool securities
the loans and hold them as assets, such and collateralized mortgage obligations issued
as commercial banks, thrift institutions, and by government and government-related agen-
insurance companies, as well as institutions cies; such mortgages are shown as holdings of
that acquire the loans in the secondary market. the federally related mortgage pools sector
Some institutions emphasize particular types (table F.125). Mortgages that back the security
of mortgage lending; savings institutions, for obligations of private issuers are assets of
example hold about 80 percent of their mort- issuers of asset-backed securities (table F.126).
906 Guide to the Flow of Funds Accounts, Volume 2

Table F.218 Home Mortgages

Home mortgages are loans secured by one-to borrower of home mortgages; however, the
four-family properties, including owner- category also includes business borrowing for
occupied condominium units. The total construction of one- to four-family residences.
includes second mortgages on properties Figures on home mortgages are estimated
of these types, loans taken out under home by the Federal Reserve Board’s Financial
equity lines of credit, mortgages held by Institutions Section using data from federal
households under seller-financing arrange- regulatory authorities, other federal agencies,
ments, and construction and land development trade associations, and private data reporting
loans associated with one- to four-family resi- services.
dences. The household sector is the primary
928 Guide to the Flow of Funds Accounts, Volume 2

Table F.219 Multifamily Residential Mortgages

Multifamily residential mortgages are loans federal government and real estate investment
secured by residences with five or more dwell- trusts also borrow small amounts.
ing units. The category includes construction Data on multifamily residential mortgages
and land development loans associated with are estimated by the Federal Reserve Board’s
multifamily properties; it does not include Financial Institutions Section on the basis of
loans secured by owner-occupied condomini- reports from federal regulatory authorities,
ums (they are part of the home mortgages other federal agencies, trade associations, and
category, table F.218). The primary borrowers private data reporting services.
of multifamily mortgages are businesses; the
938 Guide to the Flow of Funds Accounts, Volume 2

Table F.220 Commercial Mortgages

Commercial mortgages are loans secured cial banking institutions and life insurance
by nonfarm nonresidential properties, includ- companies; issuers of asset-backed securities
ing properties owned by nonprofit organi- also provide significant amounts.
zations such as universities, hospitals, and Data on commercial mortgages are esti-
churches (mortgages secured by multifamily mated by the Federal Reserve Board’s Finan-
residential properties are shown separately in cial Institutions Section on the basis of infor-
table F.219). The figures include construction mation from federal regulatory authorities,
and land development loans associated with other federal agencies, trade associations, and
commercial properties. The major providers private data reporting services.
of commercial mortgage funds are commer-
954 Guide to the Flow of Funds Accounts, Volume 2

Table F.221 Farm Mortgages

Farm mortgages are loans secured by farm nonprofit organizations sector, provide smaller
properties. In the flow of funds accounts, farm amounts of farm mortgage funds.
mortgage debt is considered to be a liability Data on farm mortgages are estimated by
of the farm business sector only. The primary the Federal Reserve Board’s Financial Institu-
lenders of farm mortgages are government- tions Section using information from federal
sponsored enterprises, such as the Farm Credit regulators, other federal agencies, and private
System, and the commercial banking sector; data reporting services.
other sectors, including the households and
960 Guide to the Flow of Funds Accounts, Volume 2

Table F.222 Consumer Credit

Consumer credit consists of short-term and credit are originated by a bank or other insti-
intermediate-term loans to individuals; it is tution and transferred to the balance sheets
a liability of the households and nonprofit of ‘‘special-purpose vehicles’’; these entities
organizations sector only. Examples of con- (which in the flow of funds accounts are
sumer credit are loans for the purchase of included in the issuers of asset-backed securi-
automobiles and mobile homes, and secured ties sector) then issue their own securities to
and unsecured loans for furniture, boats, trail- finance the purchase of the loans. At the end
ers, appliances, education, and vacations. Of of 1997, about 25 percent of outstanding con-
the $1.3 trillion in consumer credit outstand- sumer credit was held in pools of securitized
ing at the end of 1997, $417 billion was loans assets.
for automobiles, $556 billion was revolving The volume of consumer credit outstanding
credit, and the remainder was other forms of is estimated by the Federal Reserve Board’s
debt. Consumer motor vehicle leases are not Financial Institutions Section from data
included in consumer credit. reported to federal regulatory authorities;
The U.S.-chartered commercial banking monthly surveys of banks, finance companies,
sector is the largest holder of consumer credit; and credit unions; and information from other
however, finance companies and other deposi- government agencies. Data are published
tory institutions also hold significant amounts. monthly in the Board’s G.19 statistical release,
In recent years, securitization of consumer ‘‘Consumer Credit,’’ and in the Federal
credit has grown. Pools of automobile loans, Reserve Bulletin (table 1.55).
revolving credit, and other forms of consumer
964 Guide to the Flow of Funds Accounts, Volume 2

Table F.223 Trade Credit

Trade credit and trade debt are accounts included in the sector; balances on retail
receivable and payable arising from the sale of charge accounts are considered consumer
business-related goods and services. The non- credit (table F.222). The discrepancy for the
financial business sectors are lenders of more trade credit category, calculated as the change
than 80 percent of trade credit provided and in trade payables less the change in trade
account for nearly 80 percent of trade debt receivables, reflects both differences in the
outstanding, though a number of other sectors time at which borrowers and lenders record
are either lenders of trade credit or borrowers these items and reporting differences.
of trade debt. The federal government, for Information on trade credit is obtained
example, extends trade credit in the form of from a variety of sources, including federal
prepayments to business firms for items not regulatory authorities, other federal agencies,
yet delivered. The households and non- trade associations, and private data reporting
profit organizations sector incurs debt only services.
as trade payables of nonprofit organizations
974 Guide to the Flow of Funds Accounts, Volume 2

Table F.224 Security Credit

Security credit consists of loans to security eral; some of these loans are considered to be
brokers and dealers from the commercial consumer credit or bank loans not elsewhere
banking sector for purchasing and carrying classified. In the flow of funds accounts, secu-
securities, as well as customer credit and debit rity credit is not considered to be a form of
balances with brokers and dealers. Security credit market borrowing or lending because
lending to and from foreigners is also included it is an indirect form of credit; it is included
in the total through 1976:Q1, but data on such in total bank credit statistics, however, and
lending have not been available separately is part of total bank credit extended by
since then. Under the Securities Act of 1934, U.S.-chartered commercial banks and foreign
the Federal Reserve Board is authorized to banking offices in the U.S.
regulate the use of credit for purchasing or Data on security credit come from quarterly
carrying securities. The instruments making reports of condition submitted to federal reg-
up this category are those subject to this ulatory authorities by banks and from reports
authority. The category does not cover all submitted to the Securities and Exchange
loans for which securities are used as collat- Commission by security brokers and dealers.
978 Guide to the Flow of Funds Accounts, Volume 2

Table F.225 Life Insurance and Pension Fund Reserves

Life insurance reserves are funds that have civil service retirement fund and the railroad
been set aside to back claims against policies retirement fund. The civil service retirement
issued; they are obligations of life insurance fund covers the Civil Service Retirement Sys-
companies and of the federal government. In tem (CSRS)—basically a defined benefit plan
the flow of funds accounts, the liability of covering federal employees hired before
private life insurance companies for life insur- 1984—and the Federal Employees Retirement
ance reserves is equal to the sum of reserves System (FERS)—basically a defined benefit
for life insurance policies and reserves for plan, supplemental to social security, for fed-
supplementary contracts; the liability does not eral employees hired after 1983 and for
include reserves for annuities, health insur- employees formerly covered by CSRS who
ance, or policy dividend accumulations. The elected to join FERS. FERS also has a thrift
liability of the federal government is equal to savings plan, which is included among defined
the total assets of several U.S. government life contribution plans in the private pension fund
insurance funds. Life insurance reserves are sector in the flow of funds accounts. Federal
assets of the households and nonprofit organi- government pension fund reserves do not
zations sector. include the reserves of the social security
Pension fund reserves are funds that have system.
been set aside to meet future benefit obliga- Data on private life insurance reserves and
tions to retired or disabled individuals. They the pension fund reserves of life insurance
are liabilities of private pension funds, life companies come from A.M. Best Company.
insurance companies, state and local govern- The primary source of information on the
ment employee retirement funds, and the assets of private pension funds is a tabulation
federal government. For both private pen- by the Flow of Funds Section of annual data
sion funds and state and local government submitted by the funds on IRS/DOL/PBGC
employee retirement funds, the liability is Form 5500 (and Form 5500-C/R) and provided
equal to the total assets of the sector; for life on tape by the U.S. Department of Labor;
insurance companies, the liability is equal to quarterly estimates are based on data from the
policy reserves behind individual and group Independent Consultants Cooperative supplied
annuities, excluding unallocated insurance by Bankers Trust Company (now part of
company contracts and variable annuity plans Deutsche Bank). Data on state and local gov-
held with the companies for private pension ernment employee retirement funds come
funds in the name of individuals who are not from annual issues of Finances of Employee-
separately identified. Individual retirement Retirement Systems of State and Local Gov-
accounts (IRAs) and Keogh accounts that are ernments and from the Quarterly Survey of
invested in annuities are included in the life Finances of Public Employee Retirement
insurance companies’ pension fund reserves Systems, made available by the Bureau of
liability. All pension fund reserves are assets the Census. Information on U.S. government
of the households and nonprofit organizations liabilities for insurance and pension fund
sector. reserves is taken from the Monthly Trea-
For the federal government, the pension sury Statement and the Budget of the U.S.
fund liability is equal to the total assets of the Government.
996 Guide to the Flow of Funds Accounts, Volume 2

Table F.226 Taxes Payable by Businesses

Taxes payable by businesses are taxes owed taxes payable and the change in taxes receiv-
by the corporate and noncorporate business able; it may be an indication of conceptual
sectors to federal, state, and local govern- differences between tax-liable sectors and the
ments; the corporate taxes payable include government entities or of differences in the
obligations of both the financial and the non- time at which data were reported.
financial sectors. The corresponding asset for Data on tax liabilities come from quarterly
governments is taxes receivable. Flows of reports of condition filed by depository institu-
taxes payable are estimated as the difference tions and from other regulatory reports; some
from one period to the next in taxes payable series are estimated by the Flow of Funds
reported on the balance sheets of individ- Section from data published in the NIPA, from
ual sectors; flows of taxes receivable are Statistics of Income (SOI) tabulations by the
estimated as the difference between taxes Internal Revenue Service, and from the Quar-
accrued, as reported in the national income terly Financial Report (QFR), published by
and product accounts (NIPA), and taxes the Bureau of the Census. Data on tax receipts
received, as reported by governments. The come from tables published in the Survey of
asset for state and local governments consists Current Business (SCB), from the Monthly
primarily of miscellaneous business taxes due Treasury Statement, and from information on
from nonfarm noncorporate businesses. The state and local government tax collections
discrepancy for this financial instrument cate- made available by the Bureau of the Census.
gory is the difference between the change in
1002 Guide to the Flow of Funds Accounts, Volume 2

Table F.227 Investment in Bank Personal Trusts and Estates

Bank personal trusts are legal entities estab- gation to the owners and beneficiaries equal to
lished at banks and nondepository trust com- the total of the trusts’ assets. The owners and
panies by individuals to invest in assets for the beneficiaries are part of the households and
benefit of the owners or other persons; the nonprofit organizations sector, which has a
sector also includes estates of deceased per- corresponding financial claim equal to the lia-
sons being administered by banks and trust bility of the trusts. This table shows change in
companies. (Data on the assets of the sector investment in the trusts—the net funds added
appear in table F.116.) In the flow of funds to trusts by their owners (excluding capital
accounts the trusts are considered financial gains that have accrued to the assets)—along
institutions that have a single liability, an obli- with the trusts’ liability.
1008 Guide to the Flow of Funds Accounts, Volume 2

Table F.228 Proprietors’ Equity in Noncorporate Business

Proprietors’ equity in noncorporate business is data on the investment are obtained directly
the net acquisition of ownership by house- from regulatory reports. Details on calcula-
holds in nonfarm noncorporate business, non- tions and sources for the series for all three
corporate farm business, and noncorporate sectors appear in the tables for the individual
security brokers and dealers. For the nonfarm sectors. The sum for the three items appears in
noncorporate business and farm business sec- the table for households and nonprofit organi-
tors, the investment is calculated as the differ- zations (F.100) as a component of the net
ence between sources and uses of funds; for acquisition of financial assets.
the noncorporate security brokers and dealers,
1010 Guide to the Flow of Funds Accounts, Volume 2

Table F.229 Total Miscellaneous Financial Claims

Total miscellaneous financial claims are the unidentified miscellaneous financial claims,
sum of identified miscellaneous financial shown in table F.232. The categories are
claims, shown in tables F.230 and F.231, and described in the introductions to those tables.
1024 Guide to the Flow of Funds Accounts, Volume 2

Table F.230 Identified Miscellaneous Financial Claims, Part I

Identified miscellaneous financial claims are opment (World Bank) and other international
an assortment of asset and liability instru- organizations—Capital subscriptions to these
ments that individually appear on the balance organizations. The series excludes the U.S.
sheets of only a few sectors and are therefore position in the International Monetary Fund,
not treated as separate instrument categories. which is part of U.S. international reserves,
Some of the items are fairly important, how- shown in table F.200. Information on the value
ever, involving relatively large flows of funds of the equity appears in U.S. international
among sectors or across international bound- transactions tables in the SCB.
aries. Because the number of instruments is 4. Federal Reserve Bank stock—Equity in
large, the group is covered in two tables (this the twelve Federal Reserve Banks. Under the
one and the next), with details of issues and Federal Reserve Board’s Regulation I, a com-
purchases by sector. The instruments covered mercial bank that is a member of the Fed-
by this table are described briefly in the fol- eral Reserve System must subscribe to stock
lowing paragraphs. equal to 6 percent of its paid-up capital and
1. U.S. direct investment abroad—The surplus in the Reserve Bank of the Federal
acquisition of equity in, and the provision of Reserve District in which the commercial
loans to, foreign affiliates by U.S. firms bank is located; half of the 6 percent subscrip-
through the purchase of tangible or financial tion must be paid in to the Reserve Bank, and
assets of foreign firms or the direct ownership the rest remains on call. The holding of this
of their equity shares. Purchase of equity by stock does not carry with it the control and
a U.S. firm is considered direct investment if financial interest conveyed to holders of com-
the purchase results in ownership of 10 per- mon stock in for-profit organizations; the
cent or more of the outstanding equity of the stock may not be sold or pledged as collat-
foreign affiliate. A U.S. purchase of equity in eral for loans. Data on Federal Reserve Bank
a foreign company that results in a share in stock outstanding is published each month in
the foreign company’s equity of less than table 1.18 in the Federal Reserve Bulletin.
10 percent is considered portfolio investment 5. Equity in government-sponsored enter-
and is counted as a U.S. purchase of foreign prises—Equity ownership in Fannie Mae,
corporate equities. In tables of outstanding the Farm Credit System, and the Federal
values, U.S. direct investment abroad is the Home Loan Banks held by other sectors.
largest of the identified miscellaneous finan- Firms that take advantage of the credit-
cial claims. Data on U.S. direct investment provision programs of some of the enterprises
abroad are published by the Bureau of Eco- are required to own stock in them. The federal
nomic Analysis (BEA) in the Survey of Cur- government formerly held equity investments
rent Business (SCB). in the Federal Land Banks, retired in 1947; in
2. Foreign direct investment in the U.S.— Federal Home Loan Banks, retired in 1951;
The acquisition of equity in, and the provision and in Banks for Cooperatives, Federal Inter-
of loans to, U.S. affiliates of foreign firms by mediate Credit Banks, and Federal National
the purchase of tangible or financial assets of Mortgage Association (now known as Fannie
U.S. firms or the direct ownership of their Mae), all retired in 1968. (Federal Land
equity shares. The 10 percent threshold that Banks, Banks for Cooperatives, and Federal
distinguishes direct investment from portfolio Intermediate Credit Banks are now part of the
investment for direct investment abroad also Farm Credit System.) Information on equity
applies to foreign direct investment in the U.S. ownership in the enterprises by the various
Data on foreign direct investment are also sectors is obtained from periodic financial
published by BEA in the SCB. reports of the enterprises; the distribution of
3. Federal government equity in the Inter- equity ownership in some of the enterprises is
national Bank for Reconstruction and Devel- estimated by the Flow of Funds Section.
Table F.230 1025

Table F.230—Continued

6. Investment in subsidiaries by bank hold- to the Federal Reserve Board in quinquennial

ing companies—The acquisition of equity benchmark surveys and in monthly sample
ownership by bank holding company parents surveys of finance companies.
in U.S.-chartered commercial banks, savings 8. Investment by funding corporations in
institutions, finance companies, mortgage affiliated companies—The raising of funds for
companies, and security brokers and dealers. affiliated companies (foreign banking offices
Data on bank holding company investments in the U.S. and security brokers and dealers)
are obtained from periodic financial reports by funding corporations, which are domestic
submitted to federal regulatory authorities or entities that include nonbank financial hold-
are estimated by the Flow of Funds Section. ing companies and funding subsidiaries of
7. Investment by nonfarm nonfinancial cor- foreign-bank parent companies. Funding cor-
porations in finance company subsidiaries— porations raise funds in commercial paper
The acquisition of equity ownership by such markets and, for security brokers and dealers,
corporations in the subsidiary companies. through bond issues and reinvest the funds
Among the companies are the ‘‘captive’’ sub- in the subsidiaries. Data on investment are
sidiaries of motor vehicle manufacturers and obtained from Federal Reserve estimates of
the credit subsidiaries of major retailers. Infor- commercial paper issuance or are estimated
mation on finance company equity is reported by the Flow of Funds Section.
1050 Guide to the Flow of Funds Accounts, Volume 2

Table F.231 Identified Miscellaneous Financial Claims, Part II

Identified miscellaneous claims are an assort- premiums. Data on the assets are obtained
ment of asset and liability instruments that from the Life Insurance Fact Book. In the flow
individually appear on the balance sheets of of funds accounts, the series is the liability of
only a few sectors and are therefore not treated the households and nonprofit organizations
as separate instrument categories. Some of sector.
these items are covered in the table preceding 5. Life insurance company reserves—
this one (table F.230), and the rest are shown Reserves set aside by life insurance compa-
here. The instruments covered here are nies, other than life insurance or pension fund
described briefly in the following paragraphs. reserves, to cover accident and health pol-
1. Non-official foreign currency holdings icies, policyholders’ dividend and coupon
of the federal government—Holdings of for- accumulations, and policyholders’ dividends.
eign currency and short-term assets by federal In the flow of funds accounts, these liabilities
government departments and agencies, other are assets of the households and nonprofit
than holdings by the Department of the Trea- organizations sector. Data on the reserves are
sury that are included in U.S. official interna- obtained from A.M. Best Company.
tional reserve assets; these currency holdings 6. Policy payables—Liabilities of ‘‘other’’
are liabilities of the rest of the world sector. (that is, property–casualty) insurance compa-
Information on the series is published in the nies for unearned premium reserves (indicat-
U.S. international transactions (USIT) tables ing the companies’ liability to provide insur-
in the Survey of Current Business (SCB). ance coverage), reserves for incurred claims,
2. Postal Savings System deposits— and reserves for loss-adjustment expenses.
Liabilities of the Postal Savings System, In the flow of funds accounts, these liabilities
which was established by congressional man- are assets of the households and nonprofit
date in 1910. Through the system, individuals organizations sector, nonfarm nonfinancial
were able to establish and contribute to sav- corporate business, nonfarm noncorporate
ings accounts at local post offices. The system business, and farm business. Data on the lia-
was closed by statute in 1966, and the fed- bilities are obtained from A.M. Best Com-
eral government liability for outstanding pany; the asset counterpart of the series is
deposits was discontinued in the third quarter alllocated among holding sectors by the Flow
of 1985; the flow of funds series, which of Funds Section.
appears as an asset of the households and 7. Unallocated insurance company
nonprofit organizations sector and a liability contracts—Guaranteed investment contracts
of the federal government, has been carried and variable annuity plans administered by
forward with a zero value since then. Informa- life insurance companies for private pension
tion on deposit liabilities for the system were funds in the name of individuals who are
obtained from its annual reports and from not separately identified. These items are
information published in the Federal Reserve assets of the private pension funds and liabili-
Bulletin. ties of the life insurance companies; they
3. Deposits at Federal Home Loan Banks— are excluded from the pension reserve lia-
Deposits held by savings institutions at the bilities of the life insurance companies. Fig-
Federal Home Loan Banks, which are part of ures on the items are tabulated by the Flow
the government-sponsored enterprises sector. of Funds Section from data submitted on
Data on the deposits are obtained from the IRS/DOL/PBGC Form 5500 and provided on
Federal Home Loan Banks’ combined state- tape by the Department of Labor.
ments of condition. 8. Pension fund contributions payable—
4. Deferred and unpaid life insurance Employer contributions owed to pension funds
premiums—The assets reported by life insur- by the nonfarm nonfinancial corporate busi-
ance companies as deferred and uncollected ness sector. Figures on these receivables are
Table F.231 1051

tabulated by the Flow of Funds Section from transactions, the dealers provide cash collat-
data submitted on IRS/DOL/PBGC Form eral, which is held in custodial accounts (part
5500 and provided on tape by the Department of the funding corporations sector) until they
of Labor. return the borrowed securities. The value of
9. Collateral repayable to security brokers the collateral is assumed to be equal to the
and dealers—Liabilities of funding corpora- value of securities borrowed less the value of
tions to the security brokers and dealers sector securities lent. Data on securities borrowed
for cash collateral. Security dealers borrow and lent are obtained from reports submitted
(and lend) securities to cover short sales or to the Securities and Exchange Commission.
delivery failures; as part of the borrowing
1062 Guide to the Flow of Funds Accounts, Volume 2

Table F.232 Unidentified Miscellaneous Financial Claims

For many sectors, unidentified miscellaneous In most cases, the nature of the items in this
financial claims are determined indirectly category is truly unidentified. In some cases,
as the residual after the total of changes in however, items that are identified separately
individual ‘‘identified’’ asset or liability items in original documents are included here
for the sector (which appear on other instru- because the items are not significant enough
ment tables in the flow of funds accounts) has from an analytical viewpoint to be classified
been subtracted from the change in total as individual transaction categories. Examples
assets or liabilities reported by the sector. For are interest accrued by, prepaid expenses
other sectors (nonfarm noncorporate busi- of, and real estate acquired for banking-
ness, the federal government, bank personal house purposes by the Federal Reserve Sys-
trusts and estates, private pension funds, tem (the major component of the monetary
and mutual funds, for miscellaneous assets; authority sector), as reported in the System’s
and nonfarm noncorporate business, for mis- Annual Report; and the intangible assets of
cellaneous liabilities), the amount of such U.S.-chartered commercial banks, as reported
claims is obtained directly as the total amount in their quarterly reports of condition.
reported by original sources as ‘‘other’’ assets
or liabilities.