2004 Articles from the Federal Reserve Bulletin
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Federal Reserve Bulletin - 2004

U.S. Consumers and Electronic Banking, 1995-2003
Recent Developments in Cross-Border Investment in Securities
Industrial Production and Capacity Utilization: The 2003 Annual Revision
Report on the Condition of the U.S. Banking Industry: Third Quarter, 2003
Legal Developments


U.S. Consumers and Electronic Banking, 1995-2003
Christoslav E. Anguelov, Marianne A. Hilgert, and Jeanne M. Hogarth
The availability and variety of electronic banking technologies in the marketplace has greatly expanded in recent years. For financial institutions, e-banking technologies can speed processing, reduce costs, and help attract and retain customers. For consumers, they can save time and money and may be more convenient than more traditional ways of banking. This article draws on data from two nationwide surveys to look at consumer use of such products and services as debit cards, pre-authorized debits, and computer banking, particularly as use relates to consumer demographic characteristics and consumer perceptions.

The data show a consistent increase in the proportion of consumers using a variety of e-banking technologies. Consumer attitudes toward e-banking generally have become more positive over time, with more consumers seeing e-banking as convenient, familiar, easy to use, and secure. The use of some technologies, particularly debit cards, has become more democratized over time, but it is still the case that most e-banking technologies tend to be used by higher income, higher asset, younger, and better educated households.

E-banking technologies hold the promise of helping families manage their money, pay their bills on time, and avoid overextending themselves with credit. To take full advantage of them, however, consumers need to become aware of the evolving array of e-banking technologies available to them and understand how different technologies fit with their financial management needs. Financial planners and consumer educators, working with both families and financial institutions, can help the promise become a reality.
Full text (104 KB PDF)

Recent Developments in Cross-Border Investment in Securities
Carol C. Bertaut and William L. Griever
Securities have replaced bank lending in recent years as the primary means through which funds are invested internationally, and in the process, the share of U.S. securities owned by foreigners has grown markedly. Between 1974 and 2002, the proportion of the value of outstanding U.S. long-term securities (equities and long-term debt) that was foreign-owned increased from about 5 percent to about 12 percent. At the same time, U.S. holdings of foreign long-term securities also increased, although their growth did not match the rapid growth in foreign holdings of U.S. securities. At $1.8 trillion, the value of U.S. holdings of foreign long-term securities at the end of 2002 was less than half the value of foreign holdings of U.S. securities; this difference resulted in a negative net international position in long-term securities of $2.3 trillion.

The U.S. system for measuring cross-border securities activity consists of annual surveys measuring holdings of securities and monthly reports measuring transactions in securities. This article reports the latest survey data on holdings as well as the more-recent transactions data. The discussion focuses on U.S. cross-border securities activity, but it also addresses the investment patterns of some other countries and describes the initiatives to improve the measurement of cross-border securities investments.
Full text (88 KB PDF)

Industrial Production and Capacity Utilization: The 2003 Annual Revision
Kimberly Bayard and Norman Morin
In late 2003, the Board of Governors of the Federal Reserve issued revisions to its measures of industrial, capacity, and capacity utilization for the period from January 1972 to September 2003. The changes are generally small and principally affect data from 2000 to the present.

Measured from fourth quarter to fourth quarter, industrial output is now reported to have increased at a slower rate in 2000 and to have contracted a bit more slowly in 2001 than reported earlier. The changes to total industrial production in other years are slight. The revision still places the most recent peak in total IP in June 2000 and the corresponding trough in December 2001. The 6-1/4 percent peak-to-trough decline in output is about 1/2 percentage point less than the previous estimate. After the trough, the total index showed gains in the first half of 2002, only to trend down again until mid-2003 and then to head up.

The revised measures of overall capacity are only minimally different from earlier estimates. Capacity expanded rapidly during the second half of the 1990s and slowed considerably since then. The rate of industrial capacity utilization (the ratio of production to capacity) remained at a low level in the third quarter of 2003--the last full quarter of data--and was unchanged by the revision. At 74.6 percent, the operating rate is 4 percentage points below the trough of the 1990-91 recession and 6.7 percentage points below its 1972-2002 average.
Full text (119 KB PDF)

Report on the Condition of the U.S. Banking Industry: Third Quarter, 2003
This article introduces a new quarterly report summarizing the condition of the banking industry from its broadest perspective, that of the bank holding company. The report, which is based on data contained in regulatory reports filed quarterly by bank holding companies with the Federal Reserve, will appear in each issue of the Federal Reserve Bulletin.

The new report presents aggregate data separately for three groups of bank holding companies: the population of all reporting companies, fifty large companies, and all other reporting companies. The data cover balance sheet, off-balance-sheet, and income statement accounts, along with key financial ratios. Historical data dating back several years as well as data for the most recent quarters are included. Accompanying the tabular data in each report will be a brief summary of the most recent quarter for which data are available, including key industry developments from the perspective of the central banker.
Full text (56 KB PDF)

Press releases and Board staff changes for the previous quarter.
Full text (76 KB PDF)

Legal Developments
Various bank holding company, bank service corporation, and bank merger orders.
Full text (256 KB PDF)

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Last update: February 27, 2004