Description of table L.231 - Identified Miscellaneous Financial Claims - Part I

Identified miscellaneous financial claims include an assortment of asset and liability instruments. Part I includes equity-type investments that are not treated as separate instrument categories; these investments are explained further below.

1. Equity in the International Bank for Reconstruction and Development (part of the World Bank) and other international organizations is the capital subscriptions of the federal government to these organizations. The series excludes the U.S. position in the International Monetary Fund, which is part of U.S. official reserve assets (shown on tables F.200 and L.200).

2. Federal Reserve Bank stock is equity held by the U.S.-chartered depository institutions sector in the 12 Federal Reserve Banks. Under the Federal Reserve Board's Regulation I, to become a member of the Federal Reserve System, a depository institution must subscribe to stock equal to 6 percent of its capital and surplus. This stock does not carry the control and financial interest conveyed to holders of common stock; Federal Reserve stock may not be sold or pledged as collateral for loans.

3. Equity in government-sponsored enterprises is equity ownership in the Federal National Mortgage Association (Fannie Mae), the Farm Credit System, and the Federal Home Loan Banks held by other sectors. Firms that take advantage of the credit-provision programs of some of the enterprises are required to own stock in them. The federal government formerly held equity investments in the Federal Land Banks, retired in 1947; in Federal Home Loan Banks, retired in 1951; and in Banks for Cooperatives, Federal Intermediate Credit Banks, and Fannie Mae, all retired in 1968. Federal Land Banks, Banks for Cooperatives, and Federal Intermediate Credit Banks are now part of the Farm Credit System. Nonfinancial corporate businesses also held equity in Fannie Mae until 1969.

4. Holding companies' net transactions with subsidiaries is the equity ownership by holding company parents in U.S.-chartered depository institutions, property-casualty insurance companies, life insurance companies, finance companies, security brokers and dealers, and foreign affiliates (rest of world sector), as well as net balances with these subsidiaries or related depository institutions.

5. Nonfinancial corporations' investment in finance company subsidiaries is the acquisition of equity ownership by such corporations in their finance company subsidiaries. Among the companies are the "captive" subsidiaries of motor vehicle manufacturers and the credit subsidiaries of major retailers.

6. Funding corporations' investment in affiliated companies involves the raising of funds in the commercial paper and corporate bond markets for foreign banking offices in the United States and security brokers and dealers.

7. Equity investment under the Public-Private Investment Program (PPIP) is the federal government's and private investors' equal equity contribution to the Public-Private Investment Funds (PPIFs). In the financial accounts, PPIFs are included in the funding corporation sector, and the private investors, which include financial institutions such as domestic hedge funds, are recorded as part of the household sector. Under the PPIP, the Treasury matches private equity and debt investments in the PPIFs. The funds then purchase troubled legacy assets related to the residential and commercial mortgage markets. These legacy assets include both real estate loans held directly on the books of banks and securities backed by mortgage loan portfolios.



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