                                                                     For use at 12:00 p.m., eastern time
                                                                                              Thursday
                                                                                   September 17, 2009




FEDERAL RESERVE statistical release


Z.1




Flow of Funds Accounts
of the United States

Flows and Outstandings
Second Quarter 2009




Board of Governors of the Federal Reserve System, Washington DC 20551

                                Flow of Funds Summary Statistics
                                 C




                                           Second Quarter 2009

         Debt of the domestic nonfinancial sectors is                   State and local government debt expanded at
estimated to have expanded at a seasonally adjusted           an annual rate of 8 percent in the second quarter, 3
annual rate of 5 percent in the second quarter of 2009,       percentage points faster than in the previous quarter.
about  percentage point faster than in the previous          Federal government debt increased at an annual rate of
quarter. Private debt contracted in the second quarter        28 percent in the second quarter, up a bit from the
while government debt expanded.                               first-quarter pace but still lower than the nearly 40
                                                              percent pace of growth posted in the second half of
         Household debt contracted at an annual rate of       2008.
1 percent in the second quarter, marking the fourth
consecutive quarter of contraction.     In the second                   At the end of the second quarter of 2009, the
quarter, home mortgage debt decreased at an annual            level of domestic nonfinancial debt outstanding was
rate of 1 percent, while consumer credit decreased at        $34.4 trillion; household debt was $13.7 trillion,
an annual rate of 6 percent.                                 nonfinancial business debt was $11.2 trillion, and total
                                                              government debt was $9.5 trillion.
         Nonfinancial business debt contracted at an
annual rate of 1 percent in the second quarter, the                    Household net worth--the difference between
largest quarterly decline since 1993. The decline was         the value of assets and liabilities--was an estimated
concentrated in commercial paper, loans, and                  $53.1 trillion at the end of the second quarter of 2009,
commercial mortgage borrowing.                                $2.0 trillion dollars more than in the preceding quarter
                                                              and the first increase since 2007:Q3.


Growth of Domestic Nonfinancial Debt1
                                          P   P



Percentage changes; quarterly data are seasonally adjusted annual rates

                            Total          Households        Business             State and
                                                                                 local govts.           Federal

 1999                        6.4                 8.4           10.7                  3.3                 -1.9
 2000                        5.0                 9.1            9.3                  1.4                 -8.0
 2001                        6.3                 9.6            5.8                  8.8                 -0.2
 2002                        7.3                10.8            2.6                 11.1                  7.6
 2003                        8.1                11.6            2.3                  8.3                 10.9

 2004                        8.9                11.1            6.3                  7.4                  9.0
 2005                        9.5                11.1            8.7                 10.2                  7.0
 2006                        9.0                10.0           10.5                  8.2                  3.9
 2007                        8.7                 6.6           13.5                  9.3                  4.9
 2008                        6.0                 0.3            5.4                  1.9                 24.2

 2008:Q1                     5.4                 3.0            7.8                  3.6                  8.1
        Q2                   3.3                 0.3            6.4                  0.9                  5.9
        Q3                   8.2                -0.5            5.1                  3.3                 39.2
        Q4                   6.4                -1.7            1.8                 -0.2                 37.0

 2009:Q1                     4.1                -1.1           -0.2                  4.9                 22.6
        Q2                   4.9                -1.7           -1.8                  8.3                 28.2
1. Changes shown are on an end-of-period basis.

                                              Table of Contents


Title                                                                           Table     Page


Flow of Funds Accounts, Second Quarter 2009                                                1

Availability of Data for Latest Quarter                                                    4

Debt Growth by Sector                                                           D.1        7

Borrowing by Sector                                                             D.2        8

Debt Outstanding by Sector                                                      D.3        9




                                                                    Flows           Levels
Title                                                           Table    Page   Table     Page



Summaries

Total Net Borrowing and Lending in Credit Markets               F.1      10     L.1       60

Credit Market Borrowing by Nonfinancial Sectors                 F.2      11     L.2       61

Credit Market Borrowing by Financial Sectors                    F.3      11     L.3       61

Credit Market Borrowing, All Sectors, by Instrument             F.4      12     L.4       62

Total Liabilities and Its Relation to Total Financial Assets    F.5      12     L.5       62

Distribution of Gross Domestic Product                          F.6      13

Distribution of National Income                                 F.7      14

Saving and Investment                                           F.8      15

Net Capital Transfers                                           F.9      16

Derivation of Measures of Personal Saving                       F.10     17     L.10      63

                                                            Flows           Levels
Title                                                   Table    Page   Table     Page


Sectors

Households and Nonprofit Organizations                  F.100    18     L.100     64

Nonfinancial Business                                   F.101    19     L.101     65

         Nonfarm Nonfinancial Corporate Business        F.102    20     L.102     66

         Nonfarm Noncorporate Business                  F.103    21     L.103     67

         Farm Business                                  F.104    21     L.104     67

State and Local Governments                             F.105    22     L.105     68

Federal Government                                      F.106    23     L.106     68

Rest of the World                                       F.107    24     L.107     69

Monetary Authority                                      F.108    25     L.108     70

Commercial Banking                                      F.109    26     L.109     71

         U.S.-Chartered Commercial Banks                F.110    27     L.110     72

         Foreign Banking Offices in U.S.                F.111    28     L.111     73

         Bank Holding Companies                         F.112    29     L.112     74

         Banks in U.S.-Affiliated Areas                 F.113    29     L.113     74

Savings Institutions                                    F.114    30     L.114     75

Credit Unions                                           F.115    31     L.115     76

Property-Casualty Insurance Companies                   F.116    31     L.116     76

Life Insurance Companies                                F.117    32     L.117     77

Private Pension Funds                                   F.118    32     L.118     77

State and Local Government Employee Retirement Funds    F.119    33     L.119     78

Federal Government Retirement Funds                     F.120    33     L.120     78

Money Market Mutual Funds                               F.121    34     L.121     79

Mutual Funds                                            F.122    34     L.122     79

                                                        Flows           Levels
Title                                               Table    Page   Table     Page


Closed-End and Exchange-Traded Funds                F.123    34     L.123     79

Government-Sponsored Enterprises                    F.124    35     L.124     80

Agency- and GSE-backed Mortgage Pools               F.125    35     L.125     80

Issuers of Asset-Backed Securities                  F.126    36     L.126     81

Finance Companies                                   F.127    36     L.127     81

Real Estate Investment Trusts                       F.128    37     L.128     82

Security Brokers and Dealers                        F.129    38     L.129     83

Funding Corporations                                F.130    38     L.130     83




Instruments

Gold and Official Foreign Exchange Holdings         F.200    39     L.200     84

SDR Certificates and Treasury Currency              F.201    39     L.201     84

U.S. Deposits in Foreign Countries                  F.202    39     L.202     84

Net Interbank Transactions                          F.203    40     L.203     85

Checkable Deposits and Currency                     F.204    41     L.204     86

Time and Savings Deposits                           F.205    42     L.205     87

Money Market Mutual Fund Shares                     F.206    42     L.206     87

Federal Funds and Security Repurchase Agreements    F.207    43     L.207     88

Open Market Paper                                   F.208    43     L.208     88

Treasury Securities                                 F.209    44     L.209     89

                                                                    Flows            Levels

Title                                                          Table     Page   Table     Page


Agency- and GSE-backed Securities                              F.210     45     L.210      90

Municipal Securities and Loans                                 F.211     46     L.211      91

Corporate and Foreign Bonds                                    F.212     46     L.212      91

Corporate Equities                                             F.213     47     L.213      92

Mutual Fund Shares                                             F.214     47     L.214      92

Bank Loans Not Elsewhere Classified                            F.215     48     L.215      93

Other Loans and Advances                                       F.216     49     L.216      94

Total Mortgages                                                F.217     50     L.217      95

         Home Mortgages                                        F.218     51     L.218      96

         Multifamily Residential Mortgages                     F.219     51     L.219      96

         Commercial Mortgages                                  F.220     52     L.220      97

         Farm Mortgages                                        F.221     52     L.221      97

Consumer Credit                                                F.222     53     L.222      98

Trade Credit                                                   F.223     53     L.223      98

Security Credit                                                F.224     53     L.224      98

Life Insurance and Pension Fund Reserves                       F.225     54     L.225      99

Taxes Payable by Businesses                                    F.226     54     L.226      99

Proprietors' Equity in Noncorporate Business                   F.227     54     L.227      99

Total Miscellaneous Financial Claims                           F.228     55     L.228     100

         Identified Miscellaneous Financial Claims - Part I    F.229     56     L.229     101

         Identified Miscellaneous Financial Claims - Part II   F.230     57     L.230     102

         Unidentified Miscellaneous Financial Claims           F.231     58     L.231     103

Sector Discrepancies                                           F.11      59

Instrument Discrepancies                                       F.12      59

                                                                    Balance       Reconciliation
                                                                     Sheet
Title                                                           Table     Page   Table       Page


Balance Sheet and Reconciliation Tables

Households and Nonprofit Organizations                           B.100    104    R.100      107

Nonfinancial Corporate Business                                  B.102    105    R.102      108

Nonfarm Noncorporate Business                                    B.103    106    R.103      109




                                                                     Flows           Levels
Title                                                           Table     Page   Table       Page


Supplementary Tables

Nonprofit Organizations                                          F.100.a  110    L.100.a    111

Consolidated Statement for Federal, State, and Local Governments F.106.c  112    L.106.c    113

Private Pension Funds: Defined Benefit Plans                     F.118.b  114    L.118.b    115

Private Pension Funds: Defined Contribution Plans                F.118.c  114    L.118.c    115

Individual Retirement Accounts (IRAs)                            F.225.i  114    L.225.i    115

Flow of Funds Matrix for 2008                                             116                117

Balance Sheet of Households and Nonprofit Organizations
 with Equity Detail                                                              B.100.e     118

                                                                                                                  1




                      Flow of Funds Accounts, Second Quarter 2009

         This publication presents the flow of funds         disaster-related insurance benefits paid by property-
accounts for 2009:Q2.                                        casualty insurance companies (line 50) are now
                                                             included in capital transfers on the property-casualty
Data revisions and other changes. The statistics in          sector table (F.116, line 1), and benefits received are
the attached tables reflect the use of new or revised        shown in the capital transfers lines on corresponding
source data. Most significant revisions appear in recent     sector tables. In addition, detail on financial
quarters; however, new source information resulted in        stabilization payments , which are the implied subsidy
changes to data for earlier periods.                         cost of capital injections to distressed financial
                                                             businesses where the government acquired assets, is
1.    Seasonal factors for quarterly flows have been         now shown on the net capital transfers table (F.9, lines
recalculated for the period 1998:Q1 onward. The              52, 54, 55, and 56).
factors were generated using the X-12-ARIMA/88
seasonal adjustment program from Statistics Canada.          7.      Gross saving in the federal government sector
                                                             (table F.106, line 22) has been revised to exclude
2.    The statistics in this publication reflect the         contributions for government social insurance by U.S.
comprehensive revisions to the national income and           affiliated areas (line 21), consistent with BEA's concept
product accounts (NIPA) from 1945 forward released           of national income.
by the Bureau of Economic Analysis (BEA) of the
Department of Commerce on July 31, 2009, and                 8.    The federal government sector (tables F.106 and
subsequent information for 2009:Q2 released on August        L.106) includes a new asset category, corporate and
27, 2009. The August 2009 issue of the Survey of             foreign bonds, to reflect bonds purchased from banks
Current Business details the major features of the           under the Troubled Asset Relief Program (TARP).
comprehensive revision of the national income and
product accounts.                                            9.    Revisions to the rest of the world sector (tables
                                                             F.107 and L.107) reflect new estimates of the balance
3.    Data for investment and depreciation flows of all      of payments and the international investment position
sectors, and capital stocks for the household, nonfarm       from the BEA from 2006 forward. The new estimates
nonfinancial    corporate    business,    and   nonfarm      are detailed in the July 2009 issue of the Survey of
noncorporate business sectors have been revised              Current Business.
beginning in 1945 to reflect updated annual estimates of
fixed assets from the BEA.                                   10. Due to the purchase of Countrywide Bank, a
                                                             savings institution, by Bank of America, a commercial
4.    The memo item on acquisition of nonproduced            banking organization, the U.S.-chartered commercial
nonfinancial assets has been moved from the net capital      banks sector (table F.110) reports larger than usual
transfers table (F.9) to the distribution of gross           positive flows in certain instrument categories while the
domestic product table (F.6).                                savings institutions sector (table F.114) reports some
                                                             larger than usual negative flows in 2009:Q2. The asset
5.    The NIPA comprehensive revision changed the            category most affected by these reclassifications is
treatment of disaster-related losses to fixed assets, with   mortgages; the liability category most affected is other
such losses now being classified as "other changes in        loans and advances.
volume of assets" rather than consumption of fixed
capital. The new treatment is reflected in the tables        11. The credit unions sector (tables F.115 and L.115)
showing the change in net worth for the households           has been revised to include a new asset category, other
(table R.100) and nonfinancial businesses (tables R.102      loans and advances.
and R.103).
                                                             12. Total consumer credit (tables F.222 and L.222)
6.    The net capital transfers table (F.9) has been         has been revised from 1999:Q1 forward owing to new
redesigned to reflect changes made by BEA in their           seasonal factors and other changes reflected in the
comprehensive revision. Net capital transfers are now        Federal Reserve Board's G.19 statistical release on
reported as net paid rather than net received on this        September 7, 2009.
table and on the corresponding sector tables. Detail on

2

13. Bank holding company investment in subsidiaries           Percentage change = (Flow / Outstanding ) * 100
                                                                                     t
                                                                                     B  B     t
                                                                                              B  B             t-1
                                                                                                               B    B


(tables F.229 and L.229) has been expanded to show
investment in life insurance companies.                        Preliminary Estimates. Figures shown for the most
                                                               recent quarter in these tables are based on preliminary
Explanatory notes for tables D.1, D.2, and D.3.                and incomplete information. A summary list of the
Domestic debt comprises credit market funds borrowed           principal sources of information available when the
by U.S. entities from both domestic and foreign                latest quarter's data were compiled is provided in a table
sources, while foreign debt represents amounts                 following this introduction. The distinction between
borrowed by foreign financial and nonfinancial entities        "available" data and "missing" data is not between final
in U.S. markets only. Financial sectors consist of             and preliminary versions of data, but rather between
                                                               those source estimates that are fully ready when the
government-sponsored enterprises, agency- and GSE-             latest quarterly publication is compiled and those that
backed mortgage pools, and private financial                   are not yet completed. However, the items that are
institutions.     Credit market debt consists of debt          shown as available are, in general, also preliminary in
securities, mortgages, bank loans, commercial paper,           the sense that they are subject to revision by source
consumer credit, U.S. government loans, and other              agencies.
loans and advances; it excludes trade debt, loans for the
purpose of carrying securities, and funds raised from          Margins of Uncertainty. Flow of funds statistics are
equity sources.                                                subject to uncertainties resulting from measurement
                                                               errors in source data, incompatibilities among data from
          Growth rates in table D.1 are calculated by          different sources, potential revisions in both financial
dividing seasonally adjusted flows from table D.2 by           and nonfinancial series, and incomplete data in parts of
seasonally adjusted levels at the end of the previous          the accounts. The size of these uncertainties cannot be
period from table D.3. Seasonally adjusted levels in           quantified in precise statistical terms, but allowance for
flow of funds statistics are derived by carrying forward       them is explicitly made throughout the accounts by the
year-end levels by seasonally adjusted flows. Growth           inclusion of "discrepancies" for various sectors and
rates calculated from changes in unadjusted levels             instrument types. A discrepancy for a sector is the
printed in table L.2 can differ from those in table D.1.       difference between its measured sources of funds and
                                                               its measured uses of funds. For an instrument category,
Relation of Flows to Outstandings. Estimates of                a discrepancy is the difference between measured funds
financial assets and liabilities outstanding are linked to     borrowed through the financial instrument and
data on flows.      However, figures on outstandings           measured funds lent through that instrument. The size
contain discontinuities or breaks in series that could         of such discrepancies relative to the main asset or
affect analysis of particular relationships over time.         liability components is one indication of the quality of
Specifically, outstanding in the flow of funds accounts        source data, especially on an annual basis. For
are related to the flows in the following way:                 quarterly data, differences in seasonal adjustment
                                                               procedures for financial and nonfinancial components
Outstanding = Outstanding + Flow + Discontinuity
             t                                                 of the accounts sometimes result in discrepancies that
               B B            t-1
                              B    B    t
                                        B B             t
                                                        B B


where "t" is the time period.                                  cancel in annual data.

          Discontinuities result from changes in               Availability of Data. Flow of funds statistics are
valuation, breaks in source data, and changes in               updated about ten weeks following the            end of a
definitions. For most series, the value of the                 quarter. This publication -- the Z.1 release -- is
discontinuity is zero for nearly all time periods.             available from the Board's Publications Services. Flow
However, in a few instances, the discontinuity is              of funds data are also available electronically through
nonzero for almost all time periods, or is quite large in a    the Internet at the following location:
particular quarter, such as a period when there is a
sharp increase or decrease in equity prices or a major         www.federalreserve.gov/releases/Z1
break in source data.
                                                                         The Internet site also provides quarterly data
          The discontinuities in a series can distort         beginning in 1952, organized in compressed files that
estimated rates of growth in assets and liabilities           correspond to the tables published in this release.
between periods.        In order to minimize these            There are files for quarterly data for seasonally adjusted
distortions, percentage changes in assets and liabilities     flows, unadjusted flows, outstandings, balance sheets,
in flow of funds releases should be calculated as:            and debt (tables D.1, D.2, and D.3). This data is also
                                                              available as a customizable download dataset through

                                                                                                                     3

the Data Download Program (DDP) at the following                    The Internet site for this release at the location
location:                                                  shown above contains a link to an order form for the
                                                           Guide that can be mailed or faxed to Publications
www.federalreserve.gov/datadownload/Choose.aspx?rel=Z.1    Services. In addition, the Internet site includes a link to
                                                           the Guide's descriptions of the tables in the flow of
         A Guide to the Flow of Funds Accounts is          funds accounts.
available. The 1,200-page Guide, published in two
volumes in January 2000, explains in detail how the        Subscription Information.         The Federal Reserve
U.S. financial accounts are prepared and the principles    Board charges for subscriptions to all statistical
underlying the accounts. The Guide can be purchased        releases. Inquiries for releases should be directed to:
for $20.00 from the Board's Publications Services.
Publications Services accepts orders accompanied by                   Publications Services, Stop 127
checks as well as credit card orders.                                       Board of Governors
                                                                      of the Federal Reserve System
                                                                20th Street and Constitution Avenue, N.W.
                                                                         Washington, DC 20551
                                                                              (202) 452-3244

4



                          Availability of Data for Latest Quarter



                                   Available at time of publication            Major items missing
                                   U                                   U        U                      U




1. National income and              Preliminary estimates, seasonally            Unadjusted flows since 2007 for
   product accounts (NIPA)          adjusted, for 2009:Q2.                       the government sectors.
                                                                                 Unadjusted flows since 2006 for
                                                                                 all other sectors.

2. Households and nonprofit         Estimates for this sector are largely residuals and are derived from data for
   organizations sector             other sectors. Availability of data depends on schedules for other sectors.
   (tables F.100 and L.100)         Data for consumer credit, which are estimated directly, are available
                                    through 2009:Q2. The source for nonprofit organizations data (tables
                                    F.100.a and L.100.a) is the Internal Revenue Service Statistics of Income.
                                    Data for nonprofit organizations are available for 1987 through 2000.

3. Nonfarm nonfinancial             Quarterly Financial Report (QFR) of            Statistics of Income data since
   corporate business               the Census Bureau through 2008:Q2;             2007.
   (tables F.102 and L.102)         Internal Revenue Service Statistics of
                                    Income (IRS/SOI) advance data
                                    through 2007; securities offerings,
                                    mortgages, bank loans, commercial
                                    paper, and other loans through
                                    2009:Q2.

4. Nonfarm noncorporate             IRS/SOI data through 2006; bank and            Statistics of Income data since
   business                         finance company loans and mortgage             2006.
   (tables F.103 and L.103)         borrowing through 2009:Q2.

5. Farm business                    Mortgages, bank loans, loans from              Consumption of fixed capital
   (tables F.104 and L.104)         government-sponsored enterprises,              and undistributed profits since
                                    U.S. government loans to farms, and            2008.
                                    equity in government-sponsored
                                    enterprises through 2009:Q2;
                                    preliminary data for checkable deposits
                                    and currency and trade payables
                                    through 2007.
6. State and local governments      Gross offerings and retirements of             Total financial assets since
   (tables F.105 and L.105)         municipal securities, deposits at banks,       2006:Q2 and selected financial
                                    and nonmarketable U.S. government              asset detail since 2004:Q2.
                                    security issues through 2009:Q2; total
                                    financial assets through 2006:Q2 from
                                    the Census Bureau; breakdown of
                                    financial assets through 2004:Q2 from
                                    the comprehensive annual financial
                                    reports of state and local governments.

7. Federal government               Data from the Monthly Treasury                 None.
   (tables F.106 and L.106)         Statement of Receipts and Outlays and
                                    Treasury data for loan programs and
                                    the Troubled Assets Relief Program
                                    (TARP) through 2009:Q2.

                                                                                                           5



8. Rest of the world               Balance of payments data through       None.
    (U.S. international            2009:Q2. NIPA estimates; data from
    transactions)                  bank Reports of Condition and from
    (tables F.107 and L.107)       Treasury International Capital System
                                   through 2009:Q2.


9. Monetary authority              All data through 2009:Q2.              None.
    (tables F.108 and L.108)


10. Commercial banking             All data through 2009:Q2 for           Data since 2008 for branches of
    (tables F.109 through F.113    U.S.-chartered commercial banks,       domestic commercial banks
    and tables L.109 through       foreign banking offices in the U.S.,   located in U.S.-affiliated areas.
    L.113)                         bank holding companies, and
                                   commercial banks in U.S.-affiliated
                                   areas.

11. Savings institutions           All data through 2009:Q2.              None.
    (tables F.114 and L.114)

12. Credit unions                  All data through 2009:Q2.              None.
    (tables F.115 and L.115)

13. Property-casualty insurance    All data through 2009:Q1. Preliminary  Final data for 2009:Q2.
    companies                      data for 2009:Q2.
    (tables F.116 and L.116)

14. Life insurance companies       All data through 2009:Q1. Preliminary  Final data for 2009:Q2.
    (tables F.117 and L.117)       data for 2009:Q2.

15. Private pension funds          Quarterly data through 2009:Q2;        Form 5500 data since 2006.
    (tables F.118 and L.118)       Internal Revenue Service/Department
                                   of Labor/Pension Benefit Guaranty
                                   Corporation Form 5500 data through
                                   2006.

16. State and local government     Detailed data through 2006:Q2 from     Detailed data since 2006:Q2 and
    employee retirement funds      the Census Bureau; sample data         sample data for 2009:Q2.
    (tables F.119 and L.119)       through 2009:Q1 from the Census
                                   Bureau.
17. Federal government retirement  Data from the Monthly Treasury         None.
    funds                          Statement of Receipts and Outlays, the
    (tables F.120 and L.120)       Thrift Savings Plan, and the National
                                   Railroad Retirement Investment Trust
                                   through 2009:Q2.
18. Money market mutual            All data through 2009:Q2.              None.
    funds
    (tables F.121 and L.121)

19. Mutual funds                   All data through 2009:Q2.              None.
    (tables F.122 and L.122)


20. Closed-end funds               All data through 2009:Q2.              None.
    (tables F.123 and L.123)

21. Exchange-traded funds          All data through 2009:Q2.              None.
    (tables F.123 and L.123)

6


 22. Government-sponsored        Data for Fannie Mae, Freddie Mac,           None.
     enterprises                 FHLBs, FICO, Farmer Mac, FCS, and
     (tables F.124 and L.124)    REFCORP through 2009:Q2.

 23. Agency- and GSE-backed      Data for Fannie Mae, Freddie Mac, and       None.
     mortgage pools              Ginnie Mae through 2009:Q2.
     (tables F.125 and L.125)

 24. Issuers of asset-backed     All data for private mortgage pools,        None.
     securities (ABSs)           consumer credit, business loans,
     (tables F.126 and L.126)    student loans, consumer leases, and
                                 trade credit securitization through
                                 2009:Q2.

 25. Finance companies           All data through 2009:Q2.                   None.
     (tables F.127 and L.127)

 26. Real estate investment      Data from SNL REIT DataSource               None.
     trusts (REITs)              through 2009:Q2.
     (tables F.128 and L.128)

 27. Security brokers and        Data for firms filing FOCUS and             None.

     dealers                     FOGS reports through 2009:Q2.
     (tables F.129 and L.129)

 28. Funding corporations        Estimates for this sector are largely residuals and are derived from data for
     (tables F.130 and L.130)    other sectors.

