Quarterly Report on Federal Reserve
Balance Sheet Developments
|Abbreviations||Overview||Monetary Policy Tools|
The Overview section of this report highlights recent developments in the operations of the Federal Reserve's monetary policy tools, and presents data describing changes in the assets, liabilities, and total capital of the Federal Reserve System as of October 31, 2012.
FOMC Announces Purchases of Additional MBS
- On September 13, 2012, the Federal Open Market Committee (FOMC) announced that in order to support a stronger economic recovery and to help ensure that inflation, over time, is at a rate consistent with its statutory mandate, it would increase policy accommodation by purchasing additional agency-guaranteed mortgage-backed securities (MBS) at a pace of $40 billion per month. Also, the FOMC decided to continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and to maintain its existing policy of reinvesting principal payments from its holdings of agency debt and agency MBS in agency MBS. These actions, which together will increase the Federal Reserve's holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative. More information is available on the Federal Reserve Board's website at www.federalreserve.gov/newsevents/press/monetary/20120913a.htm.
Federal Reserve Releases Transaction- Level Information on Discount Window Borrowings and Open Market Operations
- On September 28, 2012, the Federal Reserve began the regular publication of detailed transaction-level information on discount window borrowing and open market operations. The data in the initial release covers transactions between July 22, 2010, and September 30, 2010, and is available at www.newyorkfed.org/markets/OMO_transaction_data.html . In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, this information will be made available on a quarterly basis and with an approximately two-year lag. The transaction-level detail supplements the extensive aggregate information the Federal Reserve has previously provided in weekly, monthly, and quarterly reports.
Federal Reserve Board Publishes Quarterly Financial Report
- On November 29, 2012, the Federal Reserve Board published the "Federal Reserve Banks Combined Quarterly Financial Report" for the third quarter of 2012, which includes summary information on the combined financial position and results of operations of the 12 Reserve Banks and several consolidated variable interest entities. All financial information included in the report is unaudited. The report is available on the Federal Reserve Board's website at www.federalreserve.gov/monetarypolicy/bst_fedfinancials.htm#quarterly.
Federal Reserve Conducts Small-Value Operations
- Beginning on September 6, 2012, the Federal Reserve Bank of New York (FRBNY) conducted a series of small-scale, real-value, reverse repurchase transactions (reverse repos) using all eligible collateral types. The first set of operations in the series was conducted using only the reverse repo counterparties announced in April 2012; subsequent operations were open to all eligible reverse repo counterparties. These types of transactions are conducted as a matter of prudent planning by the Federal Reserve and are designed to have no material impact on the availability of reserves or on market rates. They do not represent a change in the stance of monetary policy and no inference should be drawn about the timing of any change in the stance of monetary policy in the future. The results of these operations are available on the FRBNY's website at www.newyorkfed.org/markets/omo/dmm/temp.cfm .
- On September 10, 2012, and November 5, 2012, the Federal Reserve conducted auctions of $3 billion of 28-day term deposits through the Term Deposit Facility (TDF). The ongoing small-value TDF offerings are a matter of prudent planning and have no implications for the near-term conduct of monetary policy. Additional information about term deposits, auction results, and future small-value offerings is available through the TDF Resource Center at www.frbservices.org/centralbank/term_deposit_facility.html .
Federal Reserve System Selected Assets, Liabilities, and Total Capital
Table 1 reports selected assets and liabilities and total capital of the Federal Reserve System and presents the change in these components over selected intervals. The Federal Reserve publishes its complete balance sheet each week in the H.4.1 statistical release, "Factors Affecting Reserve Balances of Depository Institutions and Consolidated Statement of Condition of Reserve Banks," available at www.federalreserve.gov/releases/h41/.
Figure 1 displays the levels of selected Federal Reserve assets and liabilities, securities holdings, and credit extended through liquidity facilities since April 2010.
Table 1. Assets, liabilities, and capital of the Federal Reserve System
Billions of dollars
October 31, 2012
July 25, 2012
November 2, 2011
|Securities held outright||2,579||-17||-32|
|U.S. Treasury securities 1||1,645||-6||-9|
|Federal agency debt securities 1||82||-9||-26|
|Mortgage-backed securities 2||852||-1||+3|
|Memo: Overnight securities lending 3||11||+1||-2|
|Memo: Net commitments to purchase mortgage-backed securities 4||105||+74||+79|
|Lending to depository institutions 5||*||-*||-*|
|Central bank liquidity swaps 6||13||-14||+11|
|Lending through the Term Asset-Backed Securities Loan Facility 7||1||-2||-10|
|Net portfolio holdings of TALF LLC 8||1||+*||+*|
|Support for specific institutions||2||-8||-38|
|Net portfolio holdings of Maiden Lane LLC 9||2||-1||-11|
|Net portfolio holdings of Maiden Lane II LLC 9||*||+*||-9|
|Net portfolio holdings of Maiden Lane III LLC 9||*||-7||-18|
|Federal Reserve notes in circulation||1,100||+30||+92|
|Term deposits held by depository institutions||0||-3||0|
|Other deposits held by depository institutions||1,434||-133||-88|
|U.S. Treasury, general account||100||+62||+36|
|U.S. Treasury, supplementary financing account||0||0||0|
* Less than $500 million. Return to table
1. Face value. Return to table
2. Guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Current face value, which is the remaining principal balance of the underlying mortgages. Does not include unsettled transactions. Return to table
3. Securities loans under the overnight facility are off-balance-sheet transactions. These loans are shown here as a memo item to indicate the portion of securities held outright that have been lent through this program. Return to table
4. Current face value. Includes commitments associated with outright purchases, dollar rolls, and coupon swaps. Return to table
5. Total of primary, secondary, and seasonal credit. Return to table
6. Dollar value of the foreign currency held under these agreements valued at the exchange rate to be used when the foreign currency is returned to the foreign central bank. Return to table
7. Book value. Return to table
8. As of October 31, 2012, TALF LLC had purchased no assets from the FRBNY. Return to table
9. Fair value, reflecting values as of September 30, 2012. Fair value reflects an estimate of the price that would be received upon selling an asset if the transaction were to be conducted in an orderly market on the measurement date. Fair values are updated quarterly. Return to table
Figure 1. Credit and liquidity programs and the Federal Reserve's balance sheet