The Federal Reserve System on Friday released the 2012 combined annual financial statements for the Federal Reserve Banks, as well as for the 12 individual Federal Reserve Banks, the consolidated variable interest entities (VIEs) that were created to respond to strains in financial markets, and the Board of Governors. These financial statements are audited annually by an independent auditing firm.
The Federal Reserve Banks' 2012 net income before providing for remittances to the U.S. Treasury was $90.6 billion. The Reserve Banks provided for remittances to the U.S. Treasury of $88.4 billion.
The Reserve Banks' net income was derived primarily from $80.5 billion in interest income 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 (MBS). Realized gains on sales of Treasury securities during the year were $13.3 billion, and net earnings attributable to the consolidated VIEs totaled $6.0 billion.
Total Reserve Bank assets as of December 31, 2012, were $2.9 trillion, which is approximately the same as at the end of the previous year. Holdings of U.S. Treasury securities increased by $58.9 billion, and federal agency and GSE MBS holdings increased by $102.1 billion. GSE debt securities holdings decreased by $28.3 billion, and balances held under central bank liquidity swap arrangements decreased by $90.9 billion.
Investments held by the consolidated VIEs decreased from $35.7 billion to $2.8 billion as a result of the sale of investments during the year. Proceeds from the sale of investments were used to repay, in full, loans extended by the Federal Reserve Bank of New York to Maiden Lane LLC, Maiden Lane II LLC, and Maiden Lane III LLC.
Loans outstanding under the Term Asset-Backed Securities Lending Facility decreased from $9.1 billion to $0.6 billion in 2012 as a result of principal payments and loan prepayments.
The Federal Reserve System financial statements are available on the Federal Reserve Board's website at www.federalreserve.gov/monetarypolicy/bst_fedfinancials.htm.
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