Figures on income of the Federal Reserve Banks.The Federal Reserve Board released figures on January 7, 2005, that indicate the Federal Reserve Banks distributed approximately $18.086 billion of their $23.541 billion total income to the U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. during 2004. Federal Reserve System income is derived primarily from interest earned on U.S. government securities that the Federal Reserve has acquired through open market operations Open Market Operations The buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system. Purchases inject money into the banking system and stimulate growth while sales of securities do the opposite. . This income amounted to $22.344 billion in 2004. Additionally, income from fees for the provision of priced services to depository institutions Depository institution A financial institution that obtains its funds mainly through deposits from the public. This includes commercial banks, savings and loan associations, savings banks and credit unions. totaled $867 million. The remaining income of $330 million includes earnings on foreign currencies, earnings from loans, and other income. The operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of the twelve Reserve Banks totaled $2.116 billion in 2004, including the System's net pension credit. In addition, the cost of earnings credits granted to depository institutions amounted to $116 million. Assessments against Reserve Banks for Board expenditures totaled $272 million and the cost of currency amounted to $504 million. Net additions to income amounted to $919 million, primarily representing unrealized gains on assets denominated in foreign currencies that are revalued to reflect current market exchange rates. These gains were partially offset by interest expense on reverse repurchase agreements Reverse Repurchase Agreement The purchase of securities with the agreement to sell them at a higher price at a specific future date. For the party selling the security (and agreeing to repurchase it in the future) it is a repo for the party on the other end of the . Total net income for the Federal Reserve Banks in 2004 amounted to $21.452 billion. Under the Board's policy, each Reserve Bank's net income after the statutory dividend to member banks and the amount necessary to equate surplus to paid-in capital Paid-in capital Capital received from investors in exchange for stock, but not stock from capital generated from earnings or donated. This account includes capital stock and contributions of stockholders credited to accounts other than capital stock. is transferred to the U.S. Treasury. The statutory dividends to member banks in 2004 were $582 million. |
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