20
FED PAID
RECORD $98.7
BILLION TO
TREASURY IN
2014
Preliminary unaudited results indicate
that the Federal Home Loan Banks of the
U.S. Federal Reserve Board paid a record
amount of approximately $98.7 billion out
of their 2014 estimated net income of $101.5
billion to the U.S. Department of Treasury,
according to an announcement from the
Fed recently.
e previous high was $88.4 billion, paid in
2012. e Fed paid $79.6 billion to Treasury in
2013. at number has been above $75 billion
every year since 2010 following a then-record
high of $47.4 billion in 2009.
e Fed's policy requires each of its
FHLBanks to distribute its residual earnings
to Treasury, after providing the cost of opera-
tions, dividend payments, and the necessary
amount to equate surplus with capital paid-in.
Interest income on securities acquired
through open markets, which totaled $115.9
billion, was primarily responsible for the Fed's
2014 estimated net income of $101.5 billion. ose
open market operations included Treasury
securities, federal agency and GSE mortgage-
backed securities, and GSE debt securities. e
operating expenses for the FHLBanks totaled
$3.6 billion in 2014 (net of amounts reimbursed by
Treasury and other entities for services the banks
provided as fiscal agents).
Other assessments on the FHLBanks
included $711 million for costs associated with
producing, issuing, and retiring currency,
$590 million for board expenditures, and
$563 million to fund Consumer Financial
Protection Bureau (CFPB) operations.
Interest expenses associated with reserve
balances and term deposits held by
depository institutions totaled $6.9 billion
for the banks, which also recorded foreign
currency translation losses of $2.9 billion that
resulted from foreign currency denominated
asset holdings being revaluated daily at
current exchange rates.
Services of $435 million accounted for
additional earnings for the FHLBanks, and
consolidated limited liability companies
created in response to the financial crisis
netted another $101 million in income.
Statutory dividends for 2014 amounted to
$1.7 billion, and the amount used to equate
surplus to paid-in capital totaled $1.1 billion.
