PRELIMINARY FIGURES AVAILABLE ON NET INCOME OF THE FEDERAL RESERVE BANKS FOR 2000.Preliminary figures indicate that the Federal Reserve Banks distributed approximately $25.3 billion of their $34.0 billion total income to the Treasury during 2000. In addition, $3.75 billion was transferred from surplus to the Treasury in May 2000, as required by statute.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 $32.7 billion. Additionally, revenues 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 $881 million. The remaining income of $335 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 $1.59 billion, including the System's pension cost credit. In addition, the cost of earnings credits granted to depository institutions under the Monetary Control Act of 1980 amounted to $389 million. Assessments against Reserve Banks for Board expenditures totaled $188 million, and the cost of currency amounted to $436 million. Net deductions from income amounted to $1.49 billion, resulting primarily from unrealized losses Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on assets denominated in foreign currencies that were revalued to reflect current market exchange rates. Total net income for the Federal Reserve Banks amounted to $29.9 billion. Under the Board's policy, all net income after the statutory dividend to member banks and the amount necessary to equate e·quate v. e·quat·ed, e·quat·ing, e·quates v.tr. 1. To make equal or equivalent. 2. To reduce to a standard or an average; equalize. 3. 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 Treasury. The statutory dividends to member banks were $410 million. |
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