Pieces of Eight: News Bulletins from the Eighth Federal Reserve District

Annual Report Describes Role of Federal Reserve Banks

The role of the Federal Reserve chairman in formulating monetary policy is often discussed and often written about. The role of the 12 regional Reserve Banks, on the other hand, is relatively obscure.

The St. Louis Fed's 1992 annual report, due out in late April, attempts to fill this informational void, answering the question, What does a regional Reserve Bank do? Focusing on the activities of the Federal Reserve Bank of St. Louis, the report describes how the three main responsibilities of a regional Reserve Bank—contributing to monetary policy formulation, supervising financial institutions and providing payments services—act in concert to ensure the nation's financial stability.

To reserve a copy, call 314-444-8809.

Fed Offers Educational Programs in Economics

Do you know who sets monetary policy in the United States? If you answered the Federal Reserve, you are among only 33 percent of Americans who could answer that question correctly, according to a recent Gallup survey on American economic literacy.

To help boost that percentage, the Federal Reserve Bank of St. Louis offers free or low-cost materials and economic education programs to students, teachers, senior citizens, community groups and the general public.

Elementary and high school teachers enjoy Bank-sponsored, day-long workshops on basic and advanced economic topics that can then be taught in the classroom. Teachers and students benefit from free Federal Reserve materials, such as comic books, posters and pamphlets, and access to a video lending library. Teachers, students and the public keep current with free research publications. And just about anyone high school age and above can benefit from presentations from our speakers bureau and tours of the Bank through out tour program. For more information about these programs, call Debbie Bangert at 314-444-8421.

Another Banner Year for District Banks

Banks in the Eighth Federal Reserve District, like their national peers, posted strong earnings and improved asset quality in 1992. As usual, District banks also outperformed their national peers in key measures of industry health. In 1992, they posted a return on average assets—the major measure of bank profitability—of 1.14 percent, far above the industry benchmark of 1 percent and the national peer average of 1.04 percent.

Two factors are primarily responsible for such high profitability ratios across the nation. The first is the large spread between the rates earned on loans and other assets and the rates paid on deposits. The other factor is the sharp decline in nonperforming assets, especially loans. Because the quality of their assets improved, both District and U.S. peer banks were able to reduce their loan loss provisions—the amount of funds they set aside to cover doubtful loans.

Energy Consumption per Dollar of Real Output—1989*