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Federal Reserve Board announces Reserve Bank income and expense data and transfers to the Treasury for 2019

January 10, 2020

Federal Reserve Board announces Reserve Bank income and expense data and transfers to the Treasury for 2019

For release at 10:00 a.m. EST

The Federal Reserve Board on Friday announced preliminary results indicating that the Reserve Banks provided for payments of approximately $54.9 billion to the U.S. Treasury. The 2019 audited Reserve Bank financial statements are expected to be published in March and may include adjustments to these preliminary unaudited results.

The Federal Reserve Banks' 2019 estimated net income of $55.5 billion represents a decrease of $7.6 billion from 2018. The decline in net income was primarily attributable to a decrease of $9.5 billion in interest income on securities acquired through open market operations and a $1.5 billion increase in interest expense on securities sold under agreement to repurchase. A $3.5 billion decrease in interest expense associated with reserve balances held by depository institutions partially offset those factors. Net income for 2019 was derived primarily from $102.8 billion in interest income on securities acquired through open market operations--U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities, and GSE debt securities. The Federal Reserve Banks had interest expense of $35.0 billion primarily associated with reserve balances held by depository institutions, and incurred interest expense of $6.0 billion on securities sold under agreement to repurchase.

Operating expenses of the Reserve Banks, net of amounts reimbursed by the U.S. Treasury and other entities for services the Reserve Banks provided as fiscal agents, totaled $4.5 billion in 2019.

In addition, the Reserve Banks were assessed $837 million for the costs related to producing, issuing, and retiring currency, $814 million for Board expenditures, and $519 million to fund the operations of the Consumer Financial Protection Bureau. Additional earnings were derived from income from services of $444 million. Statutory dividends totaled $714 million in 2019.

The attached chart illustrates the amount the Reserve Banks distributed to the U.S. Treasury from 2010 through 2019 (estimated).

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Federal Reserve Remittances to the U.S. Treasury: bar chart, units in billions, from 2009 – 2019 Est. with 2 series, “Earnings Remittances† and “Transfer of Capital Surplus.† Earnings Remittances has totals for 2009=$47.4, 2010=$79.3, 2011=$75.4, 2012=$88.4, 2013=$79.6, and 2014=$96.9. 2015 shows $97.7 for Earnings Remittances and $19.3 for Transfer of Capital Surplus for a total of $117. The Reserve Banks transferred to the Treasury $19.3 billion from their capital surplus on December 28, 2015, which was the amount necessary to reduce aggregate Reserve Bank surplus to the $10 billion surplus limitation in the Fixing America’s Surface Transportation Act. Earnings Remittances has totals for 2016=$91.5 and 2017=$80.6. 2018 shows $62.1 for Earnings Remittances and $3.2 for Transfer of Capital Surplus for a total of $65.3. The Reserve Banks transferred to the Treasury $3.175 billion from their capital surplus in 2018, of which $2.5 billion was the amount necessary to reduce aggregate Reserve Bank surplus to the $7.5 billion surplus limitation in the Bipartisan Budget Act of 2018 and $675 million was the amount necessary to further reduce aggregate Reserve Bank surplus to the $6.825 billion surplus limitation in the Economic Growth, Regulatory Relief, and Consumer Protection Act. Ending the bar chart in 2019 Est., Earnings Remittances has a total of $54.9.


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