BANKING & FINANCE - Jan. 17, 1992

Money Supply Drops: The Federal Reserve Board reported that the measure of the nation’s money supply known as M2, fell to a seasonally adjusted $3,407.6 billion from $3,420.4 billion the week before. A broader measure, M3, fell to a seasonally adjusted $4,133.3 billion from $4,158.5 billion. The narrowest measure, M1, fell to a seasonally adjusted $892.4 billion from $896.1 billion. The big plunge was caused in part by a surge of cash out of money funds and banks and into stocks. M1 includes cash in circulation, deposits in checking accounts and non-bank travelers checks. M2 is M1 plus accounts such as savings deposits and money market mutual funds. M3 is M2 plus less-liquid accounts, such as certificates of deposit in minimum denominations of $100,000.