For use at 12:00 p.m., eastern time
                                                                                              Thursday
                                                                                        March 9, 2006




FEDERAL RESERVE statistical release


Z.1




Flow of Funds Accounts
of the United States

Flows and Outstandings
Fourth Quarter 2005




Board of Governors of the Federal Reserve System, Washington DC 20551

                                 Flow of Funds Summary Statistics
                                             Fourth Quarter 2005

         Domestic nonfinancial debt rose at a                 the third quarter. The moderate acceleration in
seasonally adjusted annual rate of 9-1/2 percent in the       nonfinancial business debt in the fourth quarter was
fourth quarter of 2005. Debt growth in the fourth             accounted for primarily by increases in loans from
quarter was about equal to the third-quarter pace, as         commercial banks and other intermediaries; net
slower debt growth in the household and state and local       issuance of corporate bonds and commercial paper
government sectors offset faster growth for the federal       declined last quarter. The 7-3/4 percent increase in
government and nonfinancial businesses. Domestic              nonfinancial business debt in 2005 was nearly 2
nonfinancial debt rose 9-1/2 percent over 2005 as a           percentage points faster than in 2004.
whole, about 3/4 percentage point faster than in 2004.
                                                                       State and local government debt increased at
         In the fourth quarter, household debt expanded       an annual rate of 9-1/2 percent last quarter, and
at a rate of 11 percent, somewhat slower than in the          expanded 10-1/2 percent over all of 2005. Federal
previous quarter. A decline in the growth rate of             government debt rose at a pace of 7-3/4 percent last
mortgage debt and a small contraction in consumer             quarter, and increased 7 percent for the year as a whole.
credit in the fourth quarter contributed to the               In 2005, growth of federal government debt was 2
deceleration in household debt. For 2005 as a whole,          percentage points less than in the previous year.
household debt increased 11-3/4 percent, a little more
than in 2004. The pickup in household debt growth last                 At the end of 2005, the level of domestic
year was accounted for by faster growth of mortgage           nonfinancial debt outstanding was $26.4 trillion.
debt, as growth of consumer credit slowed in 2005.            Household debt amounted to $11.5 trillion, and
                                                              nonfinancial   business   debt    was    $8.3    trillion.
         Nonfinancial business debt rose at an annual         Combined, state and local governments and the federal
rate of 8-1/4 percent last quarter, slightly faster than in   government had outstanding debt of $6.6 trillion.

Growth of Domestic Nonfinancial Debt1
Percentage changes; quarterly data are seasonally adjusted annual rates

                            Total             Households     Business           State and
                                                                               local govts.             Federal

 1996                        5.2                   6.7          6.2               -1.5                    4.0
 1997                        5.3                   5.9          9.0                4.0                    0.6
 1998                        6.8                   7.6         12.3                6.3                   -1.4
 1999                        6.4                   8.2         10.7                3.4                   -1.9
 2000                        4.8                   8.6          9.3                1.3                   -8.0

 2001                        6.1                   8.6          6.1                8.9                   -0.2
 2002                        6.9                   9.7          2.6               11.1                    7.6
 2003                        8.1                 11.4           2.7                8.2                   10.9
 2004                        8.7                 11.1           5.9                7.6                    9.0
 2005                        9.5                 11.7           7.8               10.6                    7.0

 2004:Q3                     8.4                 10.8           6.3                9.0                    6.3
        Q4                   8.7                 10.4           7.5                7.3                    7.2

 2005:Q1                     9.7                   9.7          6.6               12.0                   14.4
        Q2                   8.1                 11.8           8.2                6.0                    0.1
        Q3                   9.6                 12.4           7.5               13.1                    5.1
        Q4                   9.5                 11.0           8.3                9.6                    7.8
1. Changes shown are on an end-of-period basis.

                                              Table of Contents


Title                                                                           Table     Page


Flow of Funds Accounts, Fourth Quarter 2005                                                1

Availability of Data for Latest Quarter                                                    3

Debt Growth by Sector                                                            D.1       6

Borrowing by Sector                                                              D.2       7

Debt Outstanding by Sector                                                       D.3       8




                                                                    Flows           Levels
Title                                                           Table    Page   Table     Page



Summaries

Total Net Borrowing and Lending in Credit Markets               F.1       9     L.1       58

Credit Market Borrowing by Nonfinancial Sectors                 F.2      10     L.2       59

Credit Market Borrowing by Financial Sectors                    F.3      10     L.3       59

Credit Market Borrowing, All Sectors, by Instrument             F.4      11     L.4       60

Total Liabilities and Its Relation to Total Financial Assets    F.5      11     L.5       60

Distribution of Gross Domestic Product                          F.6      12

Distribution of National Income                                 F.7      13

Saving and Investment                                           F.8      14

Net Capital Transfers                                           F.9      14

Derivation of Measures of Personal Saving                       F.10     15     L.10      61

                                                            Flows           Levels
Title                                                   Table    Page   Table     Page


Sectors

Households and Nonprofit Organizations                  F.100    16     L.100     62

Nonfinancial Business                                   F.101    17     L.101     63

         Nonfarm Nonfinancial Corporate Business        F.102    18     L.102     64

         Nonfarm Noncorporate Business                  F.103    19     L.103     65

         Farm Business                                  F.104    19     L.104     65

State and Local Governments                             F.105    20     L.105     66

Federal Government                                      F.106    21     L.106     66

Rest of the World                                       F.107    22     L.107     67

Monetary Authority                                      F.108    23     L.108     68

Commercial Banking                                      F.109    24     L.109     69

         U.S.-Chartered Commercial Banks                F.110    25     L.110     70

         Foreign Banking Offices in U.S.                F.111    26     L.111     71

         Bank Holding Companies                         F.112    27     L.112     72

         Banks in U.S.-Affiliated Areas                 F.113    27     L.113     72

Savings Institutions                                    F.114    28     L.114     73

Credit Unions                                           F.115    29     L.115     74

Property-Casualty Insurance Companies                   F.116    29     L.116     74

Life Insurance Companies                                F.117    30     L.117     75

Private Pension Funds                                   F.118    30     L.118     75

State and Local Government Employee Retirement Funds    F.119    31     L.119     76

Federal Government Retirement Funds                     F.120    31     L.120     76

Money Market Mutual Funds                               F.121    32     L.121     77

Mutual Funds                                            F.122    32     L.122     77

                                                        Flows           Levels
Title                                               Table    Page   Table     Page


Closed-End and Exchange-Traded Funds                F.123    32     L.123     77

Government-Sponsored Enterprises                    F.124    33     L.124     78

Agency- and GSE-backed Mortgage Pools               F.125    33     L.125     78

Issuers of Asset-Backed Securities                  F.126    34     L.126     79

Finance Companies                                   F.127    34     L.127     79

Mortgage Companies                                  F.128    35     L.128     80

Real Estate Investment Trusts                       F.129    35     L.129     80

Security Brokers and Dealers                        F.130    36     L.130     81

Funding Corporations                                F.131    36     L.131     81




Instruments

Gold and Official Foreign Exchange Holdings         F.200    37     L.200     82

SDR Certificates and Treasury Currency              F.201    37     L.201     82

U.S. Deposits in Foreign Countries                  F.202    37     L.202     82

Net Interbank Transactions                          F.203    38     L.203     83

Checkable Deposits and Currency                     F.204    39     L.204     84

Time and Savings Deposits                           F.205    40     L.205     85

Money Market Mutual Fund Shares                     F.206    40     L.206     85

Federal Funds and Security Repurchase Agreements    F.207    41     L.207     86

Open Market Paper                                   F.208    41     L.208     86

Treasury Securities                                 F.209    42     L.209     87

                                                                    Flows            Levels

Title                                                          Table     Page   Table     Page


Agency- and GSE-backed Securities                              F.210     43     L.210      88

Municipal Securities and Loans                                 F.211     44     L.211      89

Corporate and Foreign Bonds                                    F.212     44     L.212      89

Corporate Equities                                              F.213    45     L.213      90

Mutual Fund Shares                                             F.214     45     L.214      90

Bank Loans Not Elsewhere Classified                            F.215     46     L.215      91

Other Loans and Advances                                       F.216     47     L.216      92

Total Mortgages                                                F.217     48     L.217      93

         Home Mortgages                                        F.218     49     L.218      94

         Multifamily Residential Mortgages                     F.219     49     L.219      94

         Commercial Mortgages                                  F.220     50     L.220      95

         Farm Mortgages                                        F.221     50     L.221      95

Consumer Credit                                                F.222     51     L.222      96

Trade Credit                                                   F.223     51     L.223      96

Security Credit                                                 F.224    51     L.224      96

Life Insurance and Pension Fund Reserves                       F.225     52     L.225      97

Taxes Payable by Businesses                                    F.226     52     L.226      97

Proprietors' Equity in Noncorporate Business                    F.227    52     L.227      97

Total Miscellaneous Financial Claims                           F.228     53     L.228      98

         Identified Miscellaneous Financial Claims - Part I     F.229    54     L.229      99

         Identified Miscellaneous Financial Claims - Part II    F.230    55     L.230     100

         Unidentified Miscellaneous Financial Claims           F.231     56     L.231     101

Sector Discrepancies                                           F.11      57

Instrument Discrepancies                                       F.12      57

                                                                    Balance       Reconciliation
                                                                     Sheet
Title                                                           Table     Page   Table       Page


Balance Sheet and Reconciliation Tables

Households and Nonprofit Organizations                           B.100    102    R.100      105

Nonfinancial Corporate Business                                  B.102    103    R.102      106

Nonfarm Noncorporate Business                                    B.103    104    R.103      107




                                                                     Flows           Levels
Title                                                           Table     Page   Table       Page


Supplementary Tables

Nonprofit Organizations                                          F.100.a  108    L.100.a    109

Consolidated Statement for Federal, State, and Local Governments F.106.c  110    L.106.c    111

Private Pension Funds: Defined Benefit Plans                     F.118.b  112    L.118.b    113

Private Pension Funds: Defined Contribution Plans                F.118.c  112    L.118.c    113

Individual Retirement Accounts (IRAs)                            F.225.i  112    L.225.i    113

Flow of Funds Matrix for 2005                                             114                115

Balance Sheet of Households and Nonprofit Organizations
 with Equity Detail                                                              B.100.e     116

                                                                                                                  1




                       Flow of Funds Accounts, Fourth Quarter 2005

          This publication presents the flow of funds       printed in table L.2 can differ from those in table D.1.
accounts for 2005:Q4.
                                                            Relation of Flows to Outstandings. Estimates of
Data revisions and other changes. The statistics in         financial assets and liabilities outstanding are linked to
the attached tables reflect the use of new or revised       data on flows.      However, figures on outstandings
source data. Most significant revisions appear in recent    contain discontinuities or breaks in series that could
quarters; however, new source information resulted in       affect analysis of particular relationships over time
changes to data for earlier periods.                        specifically, outstanding in the flow of funds accounts
                                                            are related to the flows in the following way:
1.        The nonfederal sector classification no longer
appears    in   this   publication.    Previously,   this   Outstanding = Outstanding + Flow + Discontinuity
                                                                         t                t-1      t                t

classification had been shown in the following tables:      where "t" is the time period.

D.1, D.2, D.3, F.1, F.2, L.1, and L.2. The components                 Discontinuities result from changes in
of the nonfederal sector -- households, businesses, and     valuation, breaks in source data, and changes in
state and local governments -- are still shown separately   definitions. For most series, the value of the
in those tables.                                            discontinuity is zero for nearly all time periods.
                                                            However, in a few instances, the discontinuity is
2.        Assets of the nonfarm nonfinancial corporate      nonzero for almost all time periods, or is quite large in a
business sector (tables F.102 and L.102) were revised       particular quarter, such as a period when there is a
from 2003:Q1 onward to reflect final data from the          sharp increase or decrease in equity prices or a major
Internal Revenue Service (IRS) Statistics of Income         break in source data.
(SOI) for 2003.

                                                                      The discontinuities in a series can distort
3.        In the nonfarm noncorporate business sector       estimated rates of growth in assets and liabilities
(tables F.103 and L.103), data have been revised from       between periods.        In order to minimize these
2003:Q1 onward, owing to benchmark statistics               distortions, percentage changes in assets and liabilities
available from the IRS/SOI for 2003.                        in flow of funds releases should be calculated as:

Explanatory notes for tables D.1, D.2, and D.3.             Percentage change = (Flow / Outstanding ) * 100
Domestic debt comprises credit market funds borrowed                              t         t              t-1

by U.S. entities from both domestic and foreign             Preliminary Estimates. Figures shown for the most
sources, while foreign debt represents amounts              recent quarter in these tables are based on preliminary
borrowed by foreign financial and nonfinancial entities     and incomplete information. A summary list of the
in U.S. markets only. Financial sectors consist of          principal sources of information available when the
government-sponsored enterprises, agency- and GSE-          latest quarter's data were compiled is provided in a table
backed mortgage pools, and private financial                following this introduction. The distinction between
institutions.   Credit market debt consists of debt         "available" data and "missing" data is not between final
securities, mortgages, bank loans, commercial paper,        and preliminary versions of data, but rather between
consumer credit, U.S. government loans, and other           those source estimates that are fully ready when the
loans and advances; it excludes trade debt, loans for the   latest quarterly publication is compiled and those that
purpose of carrying securities, and funds raised from       are not yet completed. However, the items that are
equity sources.                                             shown as available are, in general, also preliminary in
                                                            the sense that they are subject to revision by source
          Growth rates in table D.1 are calculated by       agencies.
dividing seasonally adjusted flows from table D.2 by
seasonally adjusted levels at the end of the previous       Margins of Uncertainty. Flow of funds statistics are
period from table D.3. Seasonally adjusted levels in        subject to uncertainties resulting from measurement
flow of funds statistics are derived by carrying forward    errors in source data, incompatibilities among data from
year-end levels by seasonally adjusted flows. Growth
rates calculated from changes in unadjusted levels

2


different sources, potential revisions in both financial     There are files for quarterly data for seasonally adjusted
and nonfinancial series, and incomplete data in parts of     flows, unadjusted flows, outstandings, balance sheets,
the accounts. The size of these uncertainties cannot be      and debt (tables D.1, D.2, and D.3).
quantified in precise statistical terms, but allowance for
them is explicitly made throughout the accounts by the                A Guide to the Flow of Funds Accounts           is
inclusion of "discrepancies" for various sectors and         available. The 1,200-page Guide, published in two
instrument types. A discrepancy for a sector is the          volumes in January 2000, explains in detail how the
difference between its measured sources of funds and         U.S. financial accounts are prepared and the principles
its measured uses of funds. For an instrument category,      underlying the accounts. The Guide can be purchased
a discrepancy is the difference between measured funds       for $20.00 from the Board's Publications Services.
borrowed through the financial instrument and                Publications Services accepts orders accompanied by
measured funds lent through that instrument. The size        checks as well as credit card orders.
of such discrepancies relative to the main asset or
liability components is one indication of the quality of              The Internet site for this release at the location
source data, especially on an annual basis. For              shown above contains a link to an order form for the
quarterly data, differences in seasonal adjustment           Guide that can be mailed or faxed to Publications
procedures for financial and nonfinancial components         Services. In addition, the Internet site includes a link to
of the accounts sometimes result in discrepancies that       the Guide's descriptions of the tables in the flow of
cancel in annual data.                                       funds accounts.

Availability of Data. Flow of funds statistics are           Subscription Information.         The Federal Reserve
updated about ten weeks following the            end of a    Board charges for subscriptions to all statistical
quarter. This publication -- the Z.1 release -- is           releases. Inquiries for releases should be directed to:
available from the Board's Publications Services. Flow
of funds data are also available electronically through                 Publications Services, Stop 127
the Internet at the following location:                                        Board of Governors
                                                                         of the Federal Reserve System
http://www.federalreserve.gov/releases/Z1                         20th Street and Constitution Avenue, N.W.
                                                                             Washington, DC 20551
          The Internet site also provides quarterly data                          (202) 452-3244
beginning in 1952, organized in compressed files that
correspond to the tables published in this release.

                                                                                                              3



                          Availability of Data for Latest Quarter



                                   Available at time of publication           Major items missing


1. National income and             Preliminary estimates, seasonally          Unadjusted flows since 2004 and
   product accounts (NIPA)         adjusted, for 2005:Q4.                     some profit-related items.

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 2005:Q4. 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 2005:Q3;          2003. Quarterly Financial
   (tables F.102 and L.102)        Internal Revenue Service Statistics of      Report data for 2005:Q4.
                                   Income (IRS/SOI) final data through
                                   2003; securities offerings, mortgages,
                                   bank loans, commercial paper, and
                                   other loans through 2005:Q4.

4. Nonfarm noncorporate            IRS/SOI data through 2003; bank and         Statistics of Income data since
   business                        finance company loans and mortgage          2003.
   (tables F.103 and L.103)        borrowing through 2005:Q4.

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         2004.
                                   equity in government-sponsored
                                   enterprises through 2005:Q4;
                                   preliminary data for checkable deposits
                                   and currency and trade payables
                                   through 2004.

6. State and local governments     Gross offerings and retirements of          Selected financial asset items
   (tables F.105 and L.105)        municipal securities, deposits at banks,    since 2003:Q3.
                                   and nonmarketable U.S. government
                                   security issues through 2005:Q4;
                                   selected financial assets through
                                   2003:Q3 from Census data and 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
                                   through 2005:Q4; Treasury data for
                                   loan programs through 2005:Q4.

4


 8. Rest of the world               Balance of payments data through        Balance of payments data for
     (U.S. international            2005:Q3; NIPA estimates; data from      2005:Q4.
     transactions)                  bank Reports of Condition and from
     (tables F.107 and L.107)       Treasury International Capital System
                                    through 2005:Q4.


 9. Monetary authority              All data through 2005:Q4.               None.
     (tables F.108 and L.108)


 10. Commercial banking             All data through 2005:Q4 for            Data since 2004 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 2005:Q4.               None.
     (tables F.114 and L.114)

 12. Credit unions                  All data through 2005:Q4.               None.
     (tables F.115 and L.115)

 13. Property-casualty insurance    All data through 2005:Q3.               Data for 2005:Q4.
     companies
     (tables F.116 and L.116)

 14. Life insurance companies       All data through 2005:Q3.               Data for 2005:Q4.
     (tables F.117 and L.117)

 15. Private pension funds          Quarterly data through 2005:Q4;         Form 5500 data since 2000.
     (tables F.118 and L.118)       Internal Revenue Service/Department
                                    of Labor/Pension Benefit Guaranty
                                    Corporation Form 5500 data through
                                    2000.

 16. State and local government     Selected financial assets through       Data for 2005:Q4.
     employee retirement funds      2005:Q3 from Census data and the
     (tables F.119 and L.119)       comprehensive annual financial reports
                                    of state and local pension funds.

 17. Federal government retirement  Data from the Monthly Treasury          None.
     funds                          Statement, the Thrift Savings Plan, and
     (tables F.120 and L.120)       the National Railroad Retirement
                                    Investment Trust through 2005:Q4.

 18. Money market mutual            All data through 2005:Q4.               None.
     funds
     (tables F.121 and L.121)


 19. Mutual funds                   All data through 2005:Q4.               None.
     (tables F.122 and L.122)



 20. Closed-end funds               All data through 2005:Q4.               None.
     (tables F.123 and L.123)

                                                                                                           5



21. Exchange-traded funds       All data through 2005:Q4.                   None.
    (tables F.123 and L.123)

22. Government-sponsored        Data for FHLBs, Farmer Mac, FCS,            Much of the source data for
    enterprises                 FICO and REFCORP through                    Fannie Mae beginning in
    (tables F.124 and L.124)    2005:Q4. Complete data for Fannie           2004:Q3 and for Freddie Mac
                                Mae through 2004:Q2 and for Freddie         beginning in 2005:Q3.
                                Mac through 2005:Q2.

23. Agency- and GSE-backed      All data through 2005:Q4.                   None.
    mortgage pools
    (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
                                2005:Q4.

25. Finance companies           All data through 2005:Q4.                   None.
    (tables F.127 and L.127)

26. Mortgage companies          Mortgage data through 1997:Q4.              Data since 1997:Q4.
    (tables F.128 and L.128)

27. Real estate investment      Data from SNL REIT DataSource               Final data for 2005:Q4.
    trusts (REITs)              through 2005:Q3; preliminary data for
    (tables F.129 and L.129)    2005:Q4.

28. Security brokers and        Data for firms filing FOCUS and             None.
    dealers                     FOGS reports through 2005:Q4.
    (tables F.130 and L.130)

29. Funding corporations        Estimates for this sector are largely residuals and are derived from data for
    (tables F.131 and L.131)    other sectors.