For use at 12:00 p.m., eastern time
                                                                                       September 20, 2012




FEDERAL RESERVE statistical release

Z.1




Flow of Funds Accounts
of the United States
Flows and Outstandings
Second Quarter 2012




Board of Governors of the Federal Reserve System, Washington DC 20551
                                 Flow of Funds Summary Statistics
                                 C




                                       Second Quarter 2012

Debt of the domestic nonfinancial sectors expanded            State and local government debt rose at an annual
at a seasonally adjusted annual rate of 5 percent in          rate of 3⁄4 percent in the second quarter, after five
the second quarter of 2012, 1⁄2 percentage point more           consecutive quarterly declines. Federal government
than in the first quarter.                                    debt rose at an annual rate of almost 11 percent in the
                                                              second quarter, about 13⁄4 percentage point less than
Household debt rose at an annual rate of 11⁄4 percent           the average pace during the previous four quarters.
in the second quarter, the largest increase since the
first quarter of 2008. Nonetheless, household debt            At the end of the second quarter of 2012, the level of
has changed little, on net, since the third quarter of        domestic nonfinancial debt outstanding was $39.1
last year. Consumer credit rose at an annual rate of          trillion, of which household debt was $13.0 trillion,
61⁄4 percent in the second quarter, the seventh                 nonfinancial business debt was $12.0 trillion, and
consecutive quarterly increase. Home mortgage debt            total government debt was $14.1 trillion.
declined a bit more than 2 percent in the second
quarter, continuing the downtrend that commenced in           Household net worth—the difference between the
early 2008.                                                   value of households’ assets and liabilities—was
                                                              $62.7 trillion at the end of the second quarter of
Nonfinancial business debt rose at an annual rate of          2012, about $300 billion less than at the end of the
almost 5 percent in the second quarter, after an              first quarter. In the second quarter, the value of
increase of 31⁄2 percent in the first quarter. Corporate        corporate equities and mutual funds owned by
bonds outstanding and business loans increased,               households declined close to $600 billion, more than
while commercial mortgage debt continued to                   offsetting a $355 billion increase in the value of real
decline.                                                      estate owned by households.



Growth of Domestic Nonfinancial Debt1        P
                                         P




Percentage changes; quarterly data are seasonally adjusted annual rates
                                                                                State and
                          Total              Households      Business                                  Federal
                                                                               local govts.
 2002                      7.3                   10.6           3.0               11.1                  7.6
 2003                      8.0                   11.8           2.2                8.3                 10.9
 2004                      9.3                   11.1           6.7               11.9                  9.0
 2005                      9.2                   11.1           8.9                5.5                  7.0
 2006                      8.6                    9.8          10.8                3.7                  3.9

 2007                      8.5                    6.7          13.6                5.4                  4.9
 2008                      5.9                   -0.2           6.1                0.7                 24.2
 2009                      3.1                   -1.7          -2.3                3.9                 22.7
 2010                      4.1                   -2.2           0.8                2.2                 20.2
 2011                      3.6                   -1.6           4.7               -1.9                 11.4

 2011:Q1                   2.5                   -2.0            3.7              -2.8                  9.1
      Q2                   2.6                   -2.7            5.2              -2.6                  8.2
      Q3                   4.3                   -1.7            4.2              -0.2                 13.7
      Q4                   4.9                    0.1            5.3              -2.1                 12.7

 2012:Q1                  4.4               -0.9                 3.4              -1.2                 13.7
       Q2                 5.0                1.2                 4.9               0.8                 10.9
1. Changes shown are on an end-of-period basis.
                                             Table of Contents


Title                                                                            Table      Page


Flow of Funds Accounts, Second Quarter 2012                                                   1

Availability of Data for Latest Quarter                                                       4

Credit Market Debt Growth by Sector                                              D.1          7

Credit Market Borrowing by Sector                                                D.2          8

Credit Market Debt Outstanding by Sector                                         D.3          9




                                                                    Flows             Levels
Title                                                          Table      Page   Table       Page


Summaries
Total Credit Market Borrowing and Lending                      F.1        10     L.1         64

Credit Market Borrowing by Nonfinancial Sectors                F.2        11     L.2         65

Credit Market Borrowing by Financial Sectors                   F.3        11     L.3         65

Credit Market Borrowing, All Sectors, by Instrument            F.4        12     L.4         66

Total Liabilities and Its Relation to Total Financial Assets   F.5        12     L.5         66

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        67
                                                                      Flows             Levels
Title                                                            Table      Page   Table       Page


Sectors
Households and Nonprofit Organizations                            F.100     18     L.100       68

Nonfinancial Business                                             F.101     19     L.101       69

    Nonfinancial Corporate Business                               F.102     20     L.102       70
    Nonfinancial Noncorporate Business                            F.103     21     L.103       71

State and Local Governments                                       F.104     22     L.104       72

Federal Government                                                F.105     23     L.105       73

Rest of the World                                                 F.106     24     L.106       74

Financial Business                                                F.107     25     L.107       75

    Monetary Authority                                            F.108     26     L.108       76

    Private Depository Institutions                               F.109     27     L.109       77

         U.S.-Chartered Depository Institutions, ex. Credit Unions F.110    28     L.110       78
         Foreign Banking Offices in U.S.                          F.111     29     L.111       79
         Banks in U.S.-Affiliated Areas                           F.112     30     L.112       80
         Credit Unions                                            F.113     30     L.113       80

    Property-Casualty Insurance Companies                         F.114     31     L.114       81

    Life Insurance Companies                                      F.115     31     L.115       81

    Private Pension Funds                                         F.116     32     L.116       82

    State and Local Government Employee Retirement Funds          F.117     33     L.117       83

    Federal Government Retirement Funds                           F.118     33     L.118       83

    Money Market Mutual Funds                                     F.119     34     L.119       84

    Mutual Funds                                                  F.120     34     L.120       84

    Closed-End and Exchange-Traded Funds                          F.121     34     L.121       84

    Government-Sponsored Enterprises                              F.122     35     L.122       85
                                                                     Flows             Levels
Title                                                           Table      Page   Table       Page


    Agency- and GSE-Backed Mortgage Pools                       F.123      35     L.123       85

    Issuers of Asset-Backed Securities                          F.124      36     L.124       86

    Finance Companies                                           F.125      36     L.125       86

    Real Estate Investment Trusts                               F.126      37     L.126       87

    Security Brokers and Dealers                                F.127      38     L.127       88

    Holding Companies                                           F.128      39     L.128       89

    Funding Corporations                                        F.129      40     L.129       90




Instruments
U.S. Official Reserve Assets and SDR Allocations                F.200      41     L.200       91

Special Drawing Rights (SDRs) Certificates and Treasury Currency F.201     41     L.201       91

U.S. Deposits in Foreign Countries                              F.202      41     L.202       91

Net Interbank Transactions                                      F.203      42     L.203       92

Checkable Deposits and Currency                                 F.204      43     L.204       93

Time and Savings Deposits                                       F.205      44     L.205       94

Money Market Mutual Fund Shares                                 F.206      44     L.206       94

Federal Funds and Security Repurchase Agreements                F.207      45     L.207       95

Open Market Paper                                               F.208      46     L.208       96

Treasury Securities                                             F.209      47     L.209       97

Agency- and GSE-Backed Securities                               F.210      48     L.210       98

Municipal Securities and Loans                                  F.211      49     L.211       99

Corporate and Foreign Bonds                                     F.212      50     L.212      100

Corporate Equities                                              F.213      51     L.213      101

Mutual Fund Shares                                              F.214      51     L.214      101

Depository Institution Loans Not Elsewhere Classified           F.215      52     L.215      102

Other Loans and Advances                                        F.216      53     L.216      103
                                                                  Flows                  Levels
Title                                                     Table           Page   Table        Page


Total Mortgages                                           F.217            54    L.217        104

    Home Mortgages                                        F.218            55    L.218        105
    Multifamily Residential Mortgages                     F.219            55    L.219        105
    Commercial Mortgages                                  F.220            56    L.220        106
    Farm Mortgages                                        F.221            56    L.221        106

Consumer Credit                                           F.222            57    L.222        107

Trade Credit                                              F.223            57    L.223        107

Life Insurance and Pension Fund Reserves                  F.225            58    L.225        108

Taxes Payable by Businesses                               F.226            58    L.226        108

Proprietors' Equity in Noncorporate Business              F.227            58    L.227        108

Total Miscellaneous Financial Claims                      F.228            59    L.228        109

    Identified Miscellaneous Financial Claims - Part I    F.229            60    L.229        110
    Identified Miscellaneous Financial Claims - Part II   F.230            61    L.230        111
    Unidentified Miscellaneous Financial Claims           F.231            62    L.231        112

Sector Discrepancies                                      F.11             63

Instrument Discrepancies                                  F.12             63




                                                              Balance            Reconciliation
                                                               Sheet
Title                                                     Table      Page        Table        Page


Balance Sheet and Reconciliation Tables
Households and Nonprofit Organizations                    B.100           113    R.100        116

Nonfinancial Corporate Business                           B.102           114    R.102        117

Nonfarm Noncorporate Business                             B.103           115    R.103        118
                                                                        Flows             Levels
Title                                                              Table      Page   Table       Page


Supplementary Tables
Balance Sheet of Households and Nonprofit Organizations
 with Equity Detail                                                                  B.100.e    119

Nonprofit Organizations                                            F.100.a   120     L.100.a    121

Consolidated Statement for Federal, State, and Local Governments   F.105.c   122     L.105.c    123

Private Pension Funds: Defined Benefit Plans                       F.116.b   124     L.116.b    125

Private Pension Funds: Defined Contribution Plans                  F.118.c   124     L.118.c    125

Individual Retirement Accounts (IRAs)                              F.225.i   124     L.225.i    125

Flow of Funds Matrix for 2011                                                126                127
                                                                                                            1




                     Flow of Funds Accounts, Second Quarter 2012

                                                         every five years. Due to the enlarged universe of
This publication presents the Flow of Funds
                                                         companies reporting in the 2010 survey, there are
Accounts for 2012:Q2. The statistics in the attached
                                                         sizable discontinuities in 2010:Q4 for most series.
tables reflect the use of new or revised source data.
Most significant revisions appear in recent quarters;
                                                         7.     The holding companies sector (tables F.128 and
however, new source information resulted in changes
                                                         L.128) has been expanded beginning in 2012:Q1 to
to data for earlier periods.
                                                         include top-tier savings and loan holding companies
                                                         (SLHC) required to file the Quarterly Savings and
Release Highlights. Major data revisions, structural
                                                         Loan Holding Company Report (FR 2320), which
changes, and release enhancements introduced this
                                                         covers SLHCs for whom the savings and loan
quarter are described below:
                                                         institution is not their primary business. Mutual
                                                         stock companies that file this form are excluded
1.    Seasonal factors for quarterly flows have
                                                         because they have no assets or liabilities at the
been recalculated for the period 2002:Q1 forward.
                                                         holding company level. Also, a new asset, net
The seasonal factors were generated using the X-12-
                                                         transactions with property-casualty insurance
ARIMA/88 seasonal adjustment program from
                                                         company subsidiaries, has been added to the table.
Statistics Canada.

                                                         8.    The Treasury securities instrument table (tables
2.   The statistics in this publication reflect the
                                                         F.209 and L.209) has been modified to show
annual revisions to the national income and product
                                                         additional detail on the composition of Treasury
accounts (NIPAs) from 2009 forward released by the
                                                         securities held by the monetary authority and rest of
Bureau of Economic Analysis (BEA) of the
                                                         the world sectors. Treasury bills, considered short-
Department of Commerce on July 27, 2012, and
                                                         term, are now shown separately from other Treasury
subsequent information for 2012:Q2 released on
                                                         securities. Data begin in 1945:Q4 for the monetary
August 29, 2012. The August 2012 issue of the
                                                         authority sector and in 1971:Q1 for the rest of the
Survey of Current Business provides details on the
                                                         world sector.
major features of this annual revision.

                                                         Explanatory notes for tables D.1, D.2, and D.3.
3.    Data for investment and depreciation flows
                                                         Domestic debt comprises credit market funds
of all sectors, and capital stocks for the household,
                                                         borrowed by U.S. entities from both domestic and
nonfarm nonfinancial corporate business, and
                                                         foreign sources, while foreign debt represents
nonfarm noncorporate business sectors have been
                                                         amounts borrowed by foreign financial and
revised to reflect updated annual estimates of fixed
                                                         nonfinancial entities in U.S. markets only. Financial
assets from the BEA.
                                                         sectors consist of government-sponsored enterprises,
                                                         agency- and GSE-backed mortgage pools, the
4.   Revisions to the rest of the world sector (tables
                                                         monetary authority, and private financial institutions.
F.106 and L.106) reflect new estimates of the balance
                                                         Credit market debt consists of debt securities,
of payments and the international investment position
                                                         mortgages, bank loans, commercial paper, consumer
from the BEA for 2008 through 2011. The new
                                                         credit, U.S. government loans, and other loans and
estimates are detailed in the July 2012 issue of the
                                                         advances; it excludes trade debt, loans for the
Survey of Current Business.
                                                         purpose of carrying securities, and funds raised from
                                                         equity sources. This definition is consistent with the
5.    Asset holdings of state and local governments
                                                         presentation of credit market borrowing and lending
(tables F.104 and L.104) were revised from 2003:Q3
                                                         on tables F.1 through F.4. Net lending (+) or net
forward based on information from the 2011
                                                         borrowing (-) on the individual sector tables and the
Comprehensive Annual Financial Reports of a few
                                                         matrix is defined as net acquisition of financial assets
large states and a sample of local entities.
                                                         less net increase in liabilities.
6.   The finance company sector (tables F.125 and
                                                         Growth rates in table D.1 are calculated by dividing
L.125) has been revised from 2010:Q4 forward to
                                                         seasonally adjusted flows from table D.2 by
incorporate the Federal Reserve 2010 Census of
                                                         seasonally adjusted levels at the end of the previous
Finance Companies (CFC) and Survey of Finance
                                                         period from table D.3. Seasonally adjusted levels in
Companies (SFC). The CFC and SFC are conducted
 2

flow of funds statistics are derived by carrying                    made throughout the accounts by the inclusion of
forward year-end levels by seasonally adjusted flows.               “discrepancies” for various sectors and instrument
Growth rates calculated from changes in unadjusted                  types. A discrepancy for a sector is the difference
levels printed in table L.2 can differ from those in                between its measured sources of funds and its
table D.1.                                                          measured uses of funds. For an instrument category,
                                                                    a discrepancy is the difference between measured
Relation of Flows to Outstandings. Estimates of                     funds borrowed through the financial instrument and
financial assets and liabilities outstanding are                    measured funds lent through that instrument. The size
linkedto data on flows.       However, figures on                   of such discrepancies relative to the main asset or
outstandings contain discontinuities or breaks in                   liability components is one indication of the quality
series that could affect analysis of particular                     of source data, especially on an annual basis. For
relationships over time. Specifically, outstandings in              quarterly data, differences in seasonal adjustment
the Flow of Funds Accounts are related to flows in                  procedures for financial and nonfinancial components
the following way:                                                  of the accounts sometimes result in discrepancies that
                                                                    cancel in annual data.
Outstanding t = Outstanding t-1+ Flow t+ Discontinuityt
            B   B           B       B       B   B           B   B




where “t” is the time period.                                       Availability of Data. Flow of funds statistics are
                                                                    updated about ten weeks following the end of a
Discontinuities result from changes in valuation,                   quarter. This publication — the Z.1 release — is
breaks in source data, and changes in definitions. For              available from the Board's Publications Services.
most series, the value of the discontinuity is zero for             Flow of funds data are also available electronically
nearly all time periods. However, in a few instances,               through the Internet at the following location:
the discontinuity is nonzero for almost all time                    www.federalreserve.gov/releases/Z1
periods, or is quite large in a particular quarter, such
as a period when there is a sharp increase or decrease              This Internet site also provides coded tables and
in equity prices or a major break in source data. The               historical annual tables beginning in 1945 that
discontinuities in a series can distort estimated rates             correspond to the tables published in this release.
of growth in assets and liabilities between periods.                There are also compressed ASCII files of quarterly
In order to minimize these distortions, percentage                  data for seasonally adjusted flows, unadjusted flows,
changes in assets and liabilities in flow of funds                  outstandings, balance sheets, debt (tables D.1, D.2,
releases should be calculated as:                                   and D.3), and supplementary tables.

Percentage change t = (Flow t / Outstanding t-1) * 100              In addition, these data, as well as data for the
                    B   B       B       B           B   B




                                                                    quarterly and annual Integrated Macroeconomic
Preliminary Estimates. Figures shown for the most                   Accounts for the United States tables, are available as
recent quarter in these tables are based on                         customizable download datasets through the Data
preliminary and incomplete information. A summary                   Download Program (DDP) at the following location:
list of the principal sources of information available
when the latest quarter's data were compiled is                     www.federalreserve.gov/datadownload/Choose.aspx?rel=Z.1
provided in a table following this introduction. The
                                                                    An interactive, web-based guide to the Flow of Funds
distinction between “available” data and “missing”
                                                                    Accounts is available through the Z.1 release page.
data is not between final and preliminary versions of
                                                                    The tools and descriptions within this guide are
data, but rather between those source estimates that
                                                                    designed to help users explore the structure and
are fully ready when the latest quarterly publication
                                                                    content of the Z.1 and the Integrated Macroeconomic
is compiled and those that are not yet completed.
                                                                    Accounts.
However, the items that are shown as available are, in
general, also preliminary in the sense that they are
                                                                    Subscription Information. The Federal Reserve
subject to revision by source agencies.
                                                                    Board charges for subscriptions to all statistical
                                                                    releases. Inquiries for releases should be directed to:
Margins of Uncertainty. Flow of funds statistics are
subject to uncertainties resulting from measurement
                                                                               Publications Services, Stop 127
errors in source data, incompatibilities among data                                  Board of Governors
from different sources, potential revisions in both                            of the Federal Reserve System
financial and nonfinancial series, and incomplete data                   20th Street and Constitution Avenue, N.W.
in parts of the accounts. The size of these                                        Washington, DC 20551
                                                                                       (202) 452-3244
uncertainties cannot be quantified in precise
statistical terms, but allowance for them is explicitly
                                       3




[THIS PAGE INTENTIONALLY LEFT BLANK]
4


                         Availability of Data for Latest Quarter

                                     Available at time of publication           Major items missing
                                     U                                 U        U                       U




1. National income and product       Second estimate, seasonally adjusted,      Unadjusted flows since 2010 for
   accounts (NIPA)                   for 2012: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
                                     2012: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. Nonfinancial corporate business   Quarterly Financial Report (QFR) of            Statistics of Income data since
   (tables F.102 and L.102)          the Census Bureau through 2012:Q2;             2010. Corporate farm data for
                                     Internal Revenue Service Statistics of         2012.
                                     Income (IRS/SOI) data through 2010;
                                     securities offerings, mortgages, bank
                                     loans, commercial paper, and other
                                     loans through 2012:Q2.

4. Nonfinancial noncorporate         IRS/SOI data through 2009; bank and            Statistics of Income data since
   business                          finance company loans, and mortgage            2009. Noncorporate farm data
   (tables F.103 and L.103)          borrowing through 2012:Q2.                     for 2012.

5. State and local governments       Gross offerings and retirements of             Total financial assets since
   (tables F.104 and L.104)          municipal securities, deposits at banks,       2009:Q2 and selected financial
                                     and nonmarketable U.S. government              asset detail since 2011:Q2.
                                     security issues through 2012:Q2; total
                                     financial assets through 2009:Q2 from
                                     the Census Bureau; breakdown of
                                     financial assets through 2011:Q2 from
                                     the comprehensive annual financial
                                     reports of state and local governments.

6. Federal government                Data from the Monthly Treasury                 None.
                                     Statement of Receipts and Outlays and
   (tables F.105 and L.105)
                                     Treasury data for loan programs and the
                                     Troubled Assets Relief Program
                                     (TARP) through 2012:Q2.
                                                                                                                    5
7. Rest of the world                   Balance of payments data through         None.
   (U.S. international transactions)   2012:Q2. NIPA estimates; data from
   (tables F.106 and L.106)            bank Reports of Condition and from
                                       Treasury International Capital System
                                       through 2012:Q2.

8. Monetary authority                  All data through 2012:Q2.                None.
   (tables F.108 and L.108)

9. U.S.-chartered depository           All data through 2012:Q2.                None.
    institutions
   (tables F.110 and L.110)

10. Foreign banking offices in U.S.    All data through 2012:Q2.                None.
    (tables F.111 and L.111)

11. Banks in U.S.-affiliated areas     All data through 2012:Q2 for             Data since 2011 for branches of
    (tables F.112 and L.112)           commercial banks in U.S.-affiliated      domestic commercial banks
                                       areas. All data through 2011 for         located in U.S.-affiliated areas.
                                       branches of domestic commercial banks
                                       located in U.S.-affiliated areas.

12. Credit unions                      All data through 2012:Q2.                None.
    (tables F.113 and L.113)

13. Property-casualty insurance        All data through 2012:Q2                 None.
     companies
    (tables F.114 and L.114)

14. Life insurance companies           All data through 2012:Q2.                None.
    (tables F.115 and L.115)

15. Private pension funds              Internal Revenue Service/Department of   Form 5500 data since 2007.
    (tables F.116 and L.116)           Labor/Pension Benefit Guaranty
                                       Corporation Form 5500 data through
                                       2007.

16. State and local government         Detailed data through 2008:Q2 from the   Detailed data since 2008:Q2.
   employee retirement funds           Census Bureau; sample data through
    (tables F.117 and L.117)           2012:Q1 from the Census Bureau.

17. Federal government retirement      Data from the Monthly Treasury           None.
   funds                               Statement of Receipts and Outlays, the
                                       Thrift Savings Plan, and the National
    (tables F.118 and L.118)
                                       Railroad Retirement Investment Trust
                                       through 2012:Q2.
6

    18. Money market mutual funds            All data through 2012:Q2.                  None.
        (tables F.119 and L.119)


    19. Mutual funds                         All data through 2012:Q2.                  None.
        (tables F.120 and L.120)

    20. Closed-end funds                                                                None.
                                             All data through 2012:Q2.
        (tables F.121 and L.121)

    21. Exchange-traded funds                All data through 2012:Q2.                  None.
        (tables F.121 and L.121)

    22. Government-sponsored                 Data for Fannie Mae, Freddie Mac,          None.
       enterprises                           Farmer Mac, FHLB, FICO, FCS, and
        (tables F.122 and L.122)             REFCORP through 2012:Q2.

    23. Agency- and GSE-backed               Data for Fannie Mae, Freddie Mac,          None.
       mortgage pools                        Farmer Mac, and Ginnie Mae through
        (tables F.123 and L.123)             2012:Q2.

    24. Issuers of asset-backed securities   All data for private mortgage pools,       None.
       (ABSs)                                consumer credit, business loans, student
        (tables F.124 and L.124)             loans, consumer leases, and trade credit
                                             securitization through 2012:Q2.

    25. Finance companies                    All data through 2012:Q2.                  None.
        (tables F.125 and L.125)

    26. Real estate investment trusts        Final data from SNL Financial through      None.
       (REITs)                               2012:Q2.
        (tables F.126 and L.126)

    27. Security brokers and dealers         Data for firms filing FOCUS and FOGS       None.
        (tables F.127 and L.127)             reports through 2012:Q2.

    28. Holding companies                    All data through 2012:Q2.                  None.
        (table F.128 and L.128)

    29. Funding corporations                 Estimates for this sector are largely
        (tables F.129 and L.129)             residuals and are derived from data for
                                             other sectors.