Preliminary figures on income of the Federal Reserve Banks. (Announcements).Preliminary figures released January 8, 2003, indicate that the Federal Reserve Banks distributed approximately $24.497 billion of their $26.758 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 2002. 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 $25.532 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 $914 million. The remaining income of $312 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 $2.070 billion in 2002, including the System's pension cost credit. In addition, the cost of earnings credits granted to depository institutions amounted to $156 million. Assessments against Reserve Banks for Board expenditures totaled $202 million, and the cost of currency mounted to $430 million. Net additions to income amounted to $2.149 billion, resulting primarily from unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. on assets denominated in foreign currencies revalued to reflect current market exchange rates. Total net income for the Federal Reserve Banks amounted to $26.049 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 were $484 million. |
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