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Banking

Reserve Banks Return $77 Billion to U.S. Treasury

photo of Treasury buildingIn 2011 the Federal Reserve System transferred most of its net income to the U.S. Treasury. The 2011 transfer totaled $76.9 billion.

Securities interest, commercial services generate income
The following list shows the primary components of the Federal Reserve Banks' 2011 net earnings:

  • $83.6 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)
  • $2.3 billion from realized gains on the sale of U.S. Treasury securities
  • $152 million in foreign currency gains

The Reserve Banks had interest expenses of $3.8 billion on depository institutions' reserve balances and term deposits.

The income that the Reserve Banks generated through fees for providing services such as payments processing for depository institutions contributed an additional $479 million.

Tallying up
The operating expenses of the 12 Reserve Banks totaled $3.4 billion in 2011. In addition, the Reserve Banks were assessed $1.1 billion for the cost of new currency and Federal Reserve Board expenditures and $282 million to fund the operations of the Bureau of Consumer Financial Protection and Office of Financial Research.

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 2011) to Federal Reserve member banks and making adjustments necessary so that surplus equals paid-in capital ($375 million in 2011).

January 31, 2012

 

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