Table F.1 Total Net Borrowing and Lending in Credit MarketsCredit markets are organized or informalarrangements that enable the transfer of fundsbetween suppliers and acquirers of funds. Thistable shows the credit market borrowing andlending of the sectors in the flow of fundsaccounts that participate in these markets.Credit market borrowing or lending isdefined here as the transfer of funds throughcertain financial instruments: open marketpaper, Treasury and agency securities, munici-pal securities, corporate and foreign bonds,bank loans not elsewhere classified, otherloans and advances (such as loans made undervarious federal programs), mortgages, andconsumer credit. Excluded from the definitionare a number of other items that are alsosources and uses of funds for the sectorsofficial reserves, special drawing rights certifi-cates, Treasury currency, deposits and inter-bank items, security repurchase agreements,corporate equities, mutual fund and moneymarket mutual fund shares, trade credit, secu-rity credit, life insurance and pension fundreserves, business taxes payable, investmentin bank personal trusts, proprietors equityin noncorporate business, and miscellaneousitems; a sectors credit market borrowing isthus not the same as the increase in its totalliabilities.All the sectors in the flow of funds accountsare lenders of credit market funds except farmbusiness; all the sectors are borrowers of creditmarket funds except the monetary authority,banks in U.S.-affiliated areas, bank personaltrusts, other insurance companies, private pen-sion funds, state and local government retire-ment funds, money market mutual funds,mutual funds, and closed-end funds.For the economy as a whole, total creditmarket borrowing and total credit market lend-ing are necessarily equal to each other. This isnot the case, however, for individual sectors;in particular, financial institutions are the pri-mary suppliers of credit market funds butobtain a large portion of their funds fromnon-credit-market sources such as deposits.For most credit market instruments it is notpossible to match borrowers and lendersforinstance, one cannot identify which sectorshold corporate bonds issued by other particu-lar sectors.68 Guide to the Flow of Funds Accounts, Volume 2Table F.2 Credit Market Borrowing by Nonfinancial SectorsThe nonfinancial sectors in the flow of fundsaccounts are households and nonprofit organi-zations, nonfinancial business, the federal gov-ernment, state and local governments, and therest of the world. This table gives details onthose sectors credit market borrowing by sec-tor and by type of financial instrument and, atthe bottom, shows totals for domestic andforeign borrowing. Sectoral details shown inthe table also appear in table F.1; for example,household borrowing, shown here on line 18,is the same as household borrowing shown online 5 in table F.1.Entities in the nonfinancial sectors borrowin order to fund their current expenditures,restructure their balance sheets, or financetheir investments. Credit markets, and theirassociated financial instruments, facilitate thetransfer of resources to the borrowing sectorsfrom sectors that have current saving or accu-mulated past saving. The major nonfinancialborrowers in the credit markets are the house-holds and nonprofit organizations sector andnonfarm nonfinancial corporate business.Households and nonprofit organizations bor-row primarily in the form of home mortgagesand consumer credit, while nonfinancial cor-porations obtain credit market funds in a vari-ety of forms, of which the most prominent arecorporate bonds, loans from banks, and com-mercial mortgages.In table F.2 from the Z.1 release, shown onthe facing page, the decline in federal govern-ment borrowing in recent years reflects thegradual reduction of the federal budget deficit;in general, however, credit market borrowingby individual sectors has increased over time,reflecting growth in the economy and theincreasing role of financial markets. Analystshave found that over long periods of timethere has been a fairly close relationshipbetween the growth of debt of the nonfinan-cial sectors and aggregate economic activity;because of the importance of these sectors, theFederal Open Market Committee monitorsthe growth of their debt as part of its regularpolicy reviews of the economy. The FederalReserve Board publishes monthly data on non-financial debt growth in its weekly H.6 sta-tistical release, Money Stock and DebtMeasures.76 Guide to the Flow of Funds Accounts, Volume 1Table F.3 Credit Market Borrowing by Financial SectorsCredit market borrowing by the financial sec-tors is primarily a source of funds for financialintermediation (see the introduction to tableF.1 for a definition of credit market borrow-ing). This table shows the financial sectorscredit market borrowing both by sector and bytype of financial instrument.The sectors that appear in the table aredepository institutions (commercial ban