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Banking

Reserve Banks Return Nearly $78 Billion to U.S. Treasury

Fed Chair YellenIn 2013 the Federal Reserve System transferred most of its net income to the U.S. Treasury. The 2013 transfer totaled $77.7 billion.

Securities earnings, commercial services generate income
The following list shows the primary components of the Federal Reserve Banks' 2013 net earnings:

  • $90.4 billion in earnings on securities acquired through open market operations (U.S. Treasury securities, government-sponsored enterprise [GSE] debt securities, and federal agency and GSE mortgage-backed securities)
  • $436 million for income that the Reserve Banks generated through fees for providing services
  • $143 million attributable to the consolidated limited-liability companies that were created in response to the financial crisis

The Reserve Banks had interest expenses of $5.2 billion on depository institutions' reserve balances and term deposits and recorded losses of $1.3 billion that resulted from the daily revaluation of foreign currency denominated asset holdings at current exchange rates.

Tallying up
The operating expenses of the 12 Reserve Banks totaled $3.8 billion in 2013. In addition, the Reserve Banks were assessed $702 million for the costs related to producing, issuing, and retiring currency; $580 million for Federal Reserve Board expenditures; and $563 million to fund the operations of the Consumer Financial Protection Bureau.

Federal Reserve Board policy directs each Reserve Bank to transfer its yearly net income to the U.S. Treasury after paying statutory dividends ($1.6 billion in 2013) to Federal Reserve member banks and making adjustments necessary so that surplus equals paid-in capital ($147 million in 2013).

February 7, 2014

 

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