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Press Release

January 13, 2023

Federal Reserve Board announces Reserve Bank income and expense data and transfers to the Treasury for 2022

For release at 11:00 a.m. EST

The Federal Reserve Board on Friday announced preliminary financial information indicating that the Federal Reserve Banks had estimated net income of $58.4 billion in 2022. The 2022 audited Reserve Bank financial statements are expected to be published in coming months and may include adjustments to these preliminary unaudited results.

The Federal Reserve Act requires the Reserve Banks to remit excess earnings to the U.S. Treasury after providing for operating costs, payments of dividends, and any amount necessary to maintain surplus. During a period when earnings are not sufficient to provide for those costs, a deferred asset is recorded. The deferred asset is the amount of net earnings the Reserve Banks will need to realize before their remittances to the U.S. Treasury resume.

During 2022, Reserve Banks transferred $76.0 billion from weekly earnings to the U.S. Treasury, and, in September 2022, most Reserve Banks suspended weekly remittances to the Treasury and started accumulating a deferred asset, which totaled $18.8 billion by the end of the year. A deferred asset has no implications for the Federal Reserve's conduct of monetary policy or its ability to meet its financial obligations.

Additional information related to 2022 preliminary financial results for the Reserve Banks include:

  • The Reserve Banks' 2022 estimated net income of $58.4 billion decreased $49.5 billion from 2021 earnings of $107.9 billion, primarily driven by increased interest expense;
  • Interest income on securities acquired through open market operations totaled $170.0 billion in 2022, an increase of $47.6 billion from 2021 interest income of $122.4 billion;
  • Total interest expense of $102.4 billion increased $96.6 billion from 2021 total interest expense of $5.7 billion; of the increase in interest expense, $55.1 billion pertained to interest expense on Reserve Balances held by depository institutions and $41.5 billion related to interest on securities sold under agreements 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 $5.6 billion in 2022;
  • In addition, the Reserve Banks were assessed $1.0 billion for the costs related to producing, issuing, and retiring currency, $1.0 billion for Board expenditures, and $0.7 billion to fund the operations of the Consumer Financial Protection Bureau.
  • The Federal Reserve Banks realized net income of $108 million from facilities established in response to the COVID-19 pandemic;
  • Losses from the daily revaluation of foreign currency denominated investments was $1.8 billion;
  • Additional earnings were derived from income from services of $0.5 billion;
  • Statutory dividends totaled $1.2 billion in 2022.

The attached chart illustrates the amount the Reserve Banks distributed to the U.S. Treasury from 2013 through 2022 (estimated).

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Federal Reserve Operations and U.S. Treasury Remittances: bar chart, units in billions, from 2013 – 2022 Est. with 3 series, 'U.S. Treasury Remittances,' 'Transfer of Capital Surplus,' and ‘Cost of operations in excess of earnings.’ The Reserve Banks reported the cost of operations in excess of earnings which occurs during a period when earnings are not sufficient to provide for the operating costs, payment of dividends and maintaining surplus. This amount is a reported as a deferred asset and is the amount of net earnings these Reserve Banks will need to realize before their remittances to the U.S. Treasury resume. U.S. Treasury Remittances has totals for 2012=$88.4, 2013=$79.6, and 2014=$96.9. 2015 shows $97.7 for U.S. Treasury 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. U.S. Treasury Remittances has totals for 2016=$91.5 and 2017=$80.6. 2018 shows $62.1 for U.S. Treasury 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. U.S. Treasury Remittances has totals for 2019=$54.9 and 2020 Est.=$88.5. 2021 shows $109 for U.S. Treasury Remittances and $40M in Transfer of Capital Surplus for a total of $107.44. The Reserve Banks transferred to the Treasury $40 million from their capital surplus in 2021, which was the amount necessary to reduce aggregate Reserve Bank surplus to the $6.785 billion surplus limitation in the National Defense Authorization Act for 2021. 2022 est shows $76.0 for U.S. Treasury Remittances and shows and $18.8 loss for Cost of operations in excess of earnings. Most Reserve Banks suspended weekly remittances to the Treasury in September 2022 and began to accumulate a deferred asset. Before suspending remittances, the Reserve Banks transferred $76.0 billion from weekly earnings during 2022. As of December 31, 2022, the Reserve Banks reported a deferred asset of $18.8 billion. From September 2022 through December 2022, certain Reserve Banks, after providing for their cost of operations, payment of dividends, and maintaining aggregate surplus, continued to remit excess earnings to the U.S. Treasury either weekly or intermittently.

Last Update: January 13, 2023