For immediate release

The Federal Reserve Board on Thursday released figures that indicate the Federal Reserve Banks distributed approximately $21.997 billion of their $23.792 billion total income to the U.S. Treasury during 2003.

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 $22.602 billion in 2003. Additionally, revenues from fees for the provision of priced services to depository institutions totaled $887 million. The remaining income of $303 million includes earnings on foreign currencies, earnings from loans, and other income.

The operating expenses of the 12 Reserve Banks totaled $2.366 billion in 2003, including the System's net pension costs. In addition, the cost of earnings credits granted to depository institutions amounted to $121 million. Assessments against Reserve Banks for Board expenditures totaled $297 million and the cost of currency amounted to $508 million.

Net additions to income amounted to $2.481 billion, resulting primarily from unrealized gains on assets denominated in foreign currencies revalued to reflect current market exchange rates.

Total net income for the Federal Reserve Banks in 2003 amounted to $22.981 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 is transferred to the U.S. Treasury. The statutory dividends to member banks in 2003 were $518 million.

2004 Other announcements