The Federal Reserve System has released this past Friday the 2015 combined annual audited financial statements for the Federal Reserve Banks and the Board of Governors.
A sovereign audit company which has been engaged by the Board has released unmodified opinions regarding the above-mentioned financial statements and unqualified opinions on the Board’s and the Bank’s internal controls in terms of financial reporting.
The Reserve Banks provided for remittances to the U.S. Treasury of $117.1 billion in 2015, which includes a one-time transfer of $19.3 billion made in December 2015 to reduce aggregate Reserve Bank capital surplus to $10 billion, as required by the Fixing America’s Surface Transportation Act (FAST Act). The FAST Act, which amended Section 7(a) of the Federal Reserve Act (FRA), requires that any aggregate Reserve Bank capital surplus in excess of $10 billion be transferred to the U.S. Treasury. At the effective date of this FRA amendment, aggregate Reserve Bank capital surplus was $29.3 billion.
The Federal Reserve Banks’ 2015 earnings, inclusive of other comprehensive income, were $100.3 billion. The Reserve Banks reported a net loss of $16.8 billion as a result of the increased amount of remittances to Treasury related to the implementation of the FAST Act. Interest income on securities acquired through open market operations totaled $113.6 billion, a decrease of $2.3 billion from the previous year. Interest expense on depository institutions’ reserve balances and term deposits during the year was $6.9 billion. Losses from the daily revaluation of foreign currency denominated asset holdings were $1.4 billion. Reserve Bank operating expenses were $6.4 billion, including assessments of $1.9 billion for Board expenses, currency costs, and the operations of the Bureau of Consumer Financial Protection.
Total Reserve Bank assets as of December 31, 2015, were $4.5 trillion, which was similar to the balance on December 31, 2014. Holdings of U.S. Treasury securities decreased by $15.6 billion, and federal agency and GSE MBS holdings increased by $11.4 billion. GSE debt securities holdings decreased by $6.2 billion. Asset holdings of Maiden Lane LLC totaled $1.8 billion on December 31, 2015.