Fed makes $28.6b in 2006
The Federal Reserve Board on Tuesday announced that the Federal
Reserve Banks distributed approximately $28.547 billion of their
$37.838 billion total income to the U.S. Treasury during 2006.
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. This income amounted to
$36.452 billion in 2006. Additionally, income from fees for the
provision of priced services to depository institutions totaled $909
million. The remaining income of $477 million includes earnings on
foreign currencies, earnings from loans, and other income.
The operating expenses of the twelve Reserve Banks totaled $2.420
billion in 2006. In addition, the cost of earnings credits granted to
depository institutions amounted to $277 million. Assessments against
Reserve Banks for Board expenditures totaled $301 million and the
cost of currency amounted to $492 million.
Net deductions to income amounted to $159 million, primarily
representing interest expense on securities sold under agreements to
repurchase, which is offset, in part, by unrealized gains on assets
denominated in foreign currencies that are revalued to reflect
current market exchange rates.
Total net income for the Federal Reserve Banks in 2006 amounted to
$34.189 billion. Under the Board’s policy, each Reserve Bank’s net
income is transferred to the U.S. Treasury, after providing for
statutory dividends to member banks and the amount necessary to
equate surplus to paid-in capital. In 2006, statutory dividends
amounted to $871 million. The implementation of Financial Accounting
Standards Board Statement No. 158, Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans, required a reduction
to surplus of $2.347 billion. As a result, the amount required to
equate surplus to paid-in capital totaled $4.771 billion.