                                                                     For use at 12:00 p.m., eastern time
                                                                                              Thursday
                                                                                   September 17, 2010




FEDERAL RESERVE statistical release


Z.1




Flow of Funds Accounts
of the United States

Flows and Outstandings
Second Quarter 2010




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




                                           Second Quarter 2010

         Debt of the domestic nonfinancial sectors is         corporate bonds and commercial paper expanded.
estimated to have expanded at a seasonally adjusted
annual rate of 4 percent in the second quarter of 2010,               State and local government debt declined 1
 percentage point more than in the previous quarter.         percent at an annual rate in the second quarter, after
Private debt declined again in the second quarter, while      five   consecutive    quarterly  increases.    Federal
federal government debt continued to grow rapidly.            government debt increased at an annual rate of about 24
                                                              percent in the second quarter, four percentage points
         Household debt contracted at an annual rate of       faster than in the previous quarter.
2 percent in the second quarter, the ninth consecutive
quarterly decline.    Home mortgage debt fell at an                    At the end of the second quarter of 2010, the
annual rate of 2 percent, compared with a 4 percent         level of domestic nonfinancial debt outstanding was
drop in the previous quarter.         Consumer credit         $35.5 trillion; household debt was $13.5 trillion,
contracted at an annual rate of 2 percent in the second      nonfinancial business debt was $10.9 trillion, and total
quarter, about  percentage point more than the decline       government debt was $11.1 trillion.
posted in the first quarter.
                                                                       Household net worth--the difference between
         Nonfinancial     business   debt     was    about    the value of assets and liabilities--was an estimated
unchanged in the second quarter, after a small increase       $53.5 trillion at the end of the second quarter, down
in the previous quarter.    Commercial mortgages and          $1.5 trillion from the end of the previous quarter.
bank loans outstanding continued to contract, while


Growth of Domestic Nonfinancial Debt1
                                             P
                                                 P




Percentage changes; quarterly data are seasonally adjusted annual rates
                                                                                 State and
                            Total             Households      Business                                 Federal
                                                                                local govts.
 2000                        5.0                    9.1         9.3                 1.4                 -8.0
 2001                        6.3                    9.6         5.7                 8.8                 -0.2
 2002                        7.4                   10.8         2.8                11.1                  7.6
 2003                        8.1                   11.8         2.3                 8.3                 10.9
 2004                        8.8                   11.0         6.2                 7.3                  9.0

 2005                        9.5                   11.1         8.6                10.2                  7.0
 2006                        9.0                   10.1        10.5                 8.3                  3.9
 2007                        8.6                    6.8        13.1                 9.5                  4.9
 2008                        6.0                    0.3         5.5                 2.3                 24.2
 2009                        3.0                   -1.7        -2.3                 4.9                 22.7

 2009:Q1                     4.6                   -0.9        -0.0                 5.6                 24.4
        Q2                   4.4                   -1.9        -2.6                 4.3                 28.9
        Q3                   2.1                   -2.2        -4.4                 5.8                 19.0
        Q4                   0.9                   -2.0        -3.8                 3.8                 11.9

 2010:Q1                     4.5                   -1.7         0.5                 5.7                 20.5
        Q2                   4.8                   -2.3         0.1                -1.3                 24.4
1. Changes shown are on an end-of-period basis.

                                              Table of Contents



Title                                                                            Table     Page



Flow of Funds Accounts, Second Quarter 2010                                                 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

U.S. Official Reserve Assets                        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 2009                                             116                117

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




                       Flow of Funds Accounts, Second Quarter 2010

          This publication presents the Flow of Funds          noncorporate business sectors have been revised to
Accounts for 2010:Q2.                                          reflect updated annual estimates of fixed assets from the
                                                               BEA.
Data revisions and other changes. The statistics in
the attached tables reflect the use of new or revised          5.    The household sector (table F.100) has been
source data. Most significant revisions appear in recent       modified to include an additional capital expenditure
quarters; however, new source information resulted in          for nonproduced nonfinancial assets (net), which
changes to data for earlier periods.                           represents the sale of land by individuals to state and
                                                               local governments.
1.    Many nine-digit flow of funds mnemonics have
been changed to make the coding more consistent                6.    Revisions to the rest of the world sector (tables
across instrument categories.      A list of these code        F.107 and L.107) reflect new estimates of the balance
changes is available online at:                                of payments and the international investment position
                                                               from the BEA for 1976 through 2009.            The new
http://www.federalreserve.gov/Releases/Z1/preview/Code_        estimates are detailed in the July 2010 issue of the
changes/                                                       Survey of Current Business.

2.    Seasonal factors for quarterly flows have been           7.    Federal funds and security repurchase agreements
recalculated for the period 2000:Q1 forward. The               in the rest of the world sector (tables F.107 and L.107)
seasonal factors were generated using the X-12-                has been revised to net out securities sold under
ARIMA/88       seasonal    adjustment     program     from     agreements to repurchase.
Statistics Canada.    The seasonals of several series
received special treatment due to the recent financial         8.    The instrument table "Gold and Official Foreign
crisis: seasonal factors for money market mutual fund          Exchange Holdings" (tables F.200 and L.200) has been
assets and federal government deposits at the Federal          renamed     to  "U.S.   Official  Reserve Assets" and
Reserve and commercial banks were not revised;                 reorganized to be consistent with revised international
seasonal factors for depository institution reserves at the    accounting standards in the System of National
Federal   Reserve    were    eliminated   from    2000:Q1      Accounts 2008 (SNA2008). As a result, special
forward; and seasonal factors were added to the rest of        drawing right (SDR) allocations have been added as a
the world's holdings of Treasury securities from               liability of the federal government and an asset of the
2000:Q1 forward.                                               rest of the world (tables F.106, F.107, L.106, and
                                                               L.107).    Also, SDR holdings are now shown as a
3.    The statistics in this publication reflect the annual    liability of the rest of the world on table L.200.  The
revisions to the national income and product accounts          May 2010 issue of BEA's Survey of Current Business
(NIPAs) from 2007 forward released by the Bureau of            provides a description of the new treatment of SDRs
Economic Analysis (BEA) of the Department of                   under the SNA2008.
Commerce      on   July   30,   2010,    and   subsequent
information for 2010:Q2 released on August 27, 2010.           Explanatory notes for tables D.1, D.2, and D.3.
The August 2010 issue of the Survey of Current                 Domestic debt comprises credit market funds borrowed
Business details the major features of this annual             by U.S. entities from     both   domestic and foreign
revision.   The flow of funds table on saving and              sources,   while   foreign   debt   represents  amounts
investment by sector (table F.8) has been redesigned to        borrowed by foreign financial and nonfinancial entities
be consistent with the revised NIPA table 5.1 and with         in  U.S. markets only.      Financial sectors consist of
the Integrated Macroeconomic Accounts of the United            government-sponsored       enterprises,    agency-  and
States, jointly compiled by the Federal Reserve Board          GSE-backed      mortgage     pools, and private financial
and the BEA.                                                   institutions.   Credit market debt consists of debt
                                                               securities, mortgages, bank loans, commercial paper,
4.    Data for investment and depreciation flows of all        consumer credit, U.S. government loans, and other
sectors, and capital stocks for the household, nonfarm         loans and advances; it excludes trade debt, loans for the
nonfinancial     corporate    business,    and    nonfarm      purpose of carrying securities, and funds raised from
                                                               equity sources.

2

         Growth rates in table D.1 are calculated by                           Margins of Uncertainty. Flow of funds statistics are
dividing seasonally adjusted flows from table D.2 by                           subject to uncertainties resulting from measurement
seasonally adjusted levels at the end of the previous                          errors in source data, incompatibilities among data from
period from table D.3. Seasonally adjusted levels in                           different sources, potential revisions in both financial
flow of funds statistics are derived by carrying forward                       and nonfinancial series, and incomplete data in parts of
year-end levels by seasonally adjusted flows. Growth                           the accounts. The size of these uncertainties cannot be
rates calculated from changes in unadjusted levels                             quantified in precise statistical terms, but allowance for
printed in table L.2 can differ from those in table D.1.                       them is explicitly made throughout the accounts by the
                                                                               inclusion of "discrepancies" for various sectors and
Relation of Flows to Outstandings.                       Estimates of          instrument types. A discrepancy for a sector is the
financial assets and liabilities outstanding are linked to                     difference between its measured sources of funds and
data on flows.        However, figures on outstandings                         its measured uses of funds. For an instrument category,
contain discontinuities or breaks in series that could                         a discrepancy is the difference between measured funds
affect analysis of particular relationships over time.                         borrowed    through    the   financial   instrument   and
Specifically, outstandings in the flow of funds accounts                       measured funds lent through that instrument. The size
are related to the flows in the following way:                                 of such discrepancies relative to the main asset or
                                                                               liability components is one indication of the quality of
Outstanding = Outstanding
             t                    t-1     + Flow + Discontinuityt
                                                  t                            source data, especially on an annual basis.           For
                B
                  B
                                    B
                                           B
                                                    B
                                                      B
                                                                        B
                                                                          B




where "t" is the time period.                                                  quarterly data, differences in seasonal adjustment
                                                                               procedures for financial and nonfinancial components
         Discontinuities         result         from      changes        in    of the accounts sometimes result in discrepancies that
valuation, breaks in source data, and changes in                               cancel in annual data.
definitions.       For most     series,         the     value     of the
discontinuity       is zero     for          nearly all time periods.          Availability of Data. Flow of funds statistics are
However, in a few instances, the discontinuity is                              updated about ten weeks following the end of a quarter.
nonzero for almost all time periods, or is quite large in a                    This publication -- the Z.1 release -- is available from
particular quarter, such as a period when there is a                           the Board's Publications Services. Flow of funds data
sharp increase or decrease in equity prices or a major                         are also available electronically through the Internet at
break in source data.                                                          the following location:

         The discontinuities in a series can distort                           www.federalreserve.gov/releases/Z1
estimated rates of growth in assets and liabilities
between     periods.          In order         to      minimize    these       The Internet site also provides historical annual data
distortions, percentage changes in assets and liabilities                      beginning in 1945 that correspond to the tables
in flow of funds releases should be calculated as:                             published in this release. There are files for quarterly
                                                                               data for seasonally adjusted flows, unadjusted flows,
Percentage change = (Flow / Outstanding
                        t                 t                 t-1
                                                              ) * 100          outstandings, balance sheets, and debt (tables D.1, D.2,
                          B
                            B
                                         B
                                            B
                                                            B
                                                                 B




                                                                               and D.3) available as a customizable download dataset
Preliminary Estimates. Figures shown for the most                              through the Data Download Program (DDP) at the
recent quarter in these tables are based on preliminary                        following location:
and incomplete information. A summary list of the
principal sources of information available when the                            www.federalreserve.gov/datadownload/Choose.aspx?rel=Z.1
latest quarter's data were compiled is provided in a table
following this introduction. The distinction between                                     A Guide to the Flow of Funds Accounts is
"available" data and "missing" data is not between final                       available. The 1,200-page Guide, published in two
and preliminary versions of data, but rather between                           volumes in January 2000, explains in detail how the
those source estimates that are fully ready when the                           U.S. financial accounts are prepared and the principles
latest quarterly publication is compiled and those that                        underlying the accounts. The Guide can be purchased
are not yet completed. However, the items that are                             for $20.00 from the Board's Publications Services.
shown as available are, in general, also preliminary in                        Publications Services accepts orders accompanied by
the sense that they are subject to revision by source                          checks as well as credit card orders.
agencies.

                                                               3

         The Internet site for this release at the location
shown above contains a link to an order form for the
Guide that can be mailed or faxed to Publications
Services. In addition, the Internet site includes a link to
the Guide's descriptions of the tables in the flow of
funds accounts.

Subscription Information. The Federal Reserve Board
charges for subscriptions to all statistical releases.
Inquiries for releases should be directed to:

           Publications Services, Stop 127
                  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              Second estimate, seasonally adjusted,       Unadjusted flows since 2006.
   product accounts (NIPA)          for 2010:Q2.

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 2010: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 2010:Q2;           2008.
   (tables F.102 and L.102)         Internal Revenue Service Statistics of
                                    Income (IRS/SOI) data through 2008;
                                    securities offerings, mortgages, bank
                                    loans, commercial paper, and other
                                    loans through 2010:Q2.

4. Nonfarm noncorporate             IRS/SOI data through 2007; bank and          Statistics of Income data since
   business                         finance company loans and mortgage           2007.
   (tables F.103 and L.103)         borrowing through 2010: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 2010:Q2;
                                    preliminary data for checkable deposits
                                    and currency and trade payables
                                    through 2008.

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,      2008:Q2 and selected financial
                                   and nonmarketable U.S. government             asset detail since 2004:Q2.
                                   security issues through 2010:Q2; total
                                   financial assets through 2008: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 2010:Q2.

                                                                                                               5



8. Rest of the world                 Balance of payments data through        None.
   (U.S. international               2010:Q2. NIPA estimates; data from
   transactions)                     bank Reports of Condition and from
   (tables F.107 and L.107)          Treasury International Capital System
                                     through 2010:Q2.


9. Monetary authority                All data through 2010:Q2.               None.
   (tables F.108 and L.108)


10. Commercial banking               All data through 2010:Q2 for            Data since 2009 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 2010:Q2.               None.
   (tables F.114 and L.114)

12. Credit unions                    All data through 2010:Q2.               None.
   (tables F.115 and L.115)

13. Property-casualty insurance      All data through 2010:Q1. Preliminary   Final data for 2010:Q2.
    companies                        data for 2010:Q2.
    (tables F.116 and L.116)

14. Life insurance companies         All data through 2010:Q1. Preliminary   Final data for 2010:Q2.
   (tables F.117 and L.117)          data for 2010:Q2.

15. Private pension funds            Quarterly data through 2010:Q1;         Form 5500 data since 2007.
   (tables F.118 and L.118)          Internal Revenue Service/Department     Quarterly data since 2010:Q1.
                                     of Labor/Pension Benefit Guaranty
                                     Corporation Form 5500 data through
                                     2007.

16. State and local government       Detailed data through 2008:Q2 from      Detailed data since 2008:Q2.
   employee retirement funds         the Census Bureau; sample data
   (tables F.119 and L.119)          through 2010:Q2 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 2010:Q2.

18. Money market mutual              All data through 2010:Q2.               None.
   funds
    (tables F.121 and L.121)

19. Mutual funds                     All data through 2010:Q2.               None.
    (tables F.122 and L.122)


20. Closed-end funds                 All data through 2010:Q2.               None.
    (tables F.123 and L.123)

21. Exchange-traded funds            All data through 2010:Q2.               None.
   (tables F.123 and L.123)

6


 22. Government-sponsored        Data for Fannie Mae, Freddie Mac,           None.
    enterprises                  FHLBs, Farmer Mac, FICO, FCS, and
     (tables F.124 and L.124)    REFCORP through 2010:Q2.

 23. Agency- and GSE-backed      Data for Fannie Mae, Freddie Mac, and       None.
    mortgage pools               Ginnie Mae through 2010: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
                                 2010:2.

 25. Finance companies           All data through 2010:Q2.                   None.
    (tables F.127 and L.127)

 26. Real estate investment      Data from SNL Financial through             None.
    trusts (REITs)               2010:Q2.
    (tables F.128 and L.128)

                                                                             None.
 27. Security brokers and        Data for firms filing FOCUS and
    dealers                      FOGS reports through 2010: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.

