The Federal Reserve System on Friday released the 2015 combined annual audited financial statements for the Federal Reserve Banks, as well as statements for the 12 individual Federal Reserve Banks, Maiden Lane LLC (ML LLC), and the Board of Governors. An independent auditing firm engaged by the Board has issued unmodified opinions on these financial statements and unqualified opinions on the Board’s and the Bank’s internal controls over 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.
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The audited financial statements provide a significant amount of information about the assets, liabilities, and earnings of the Reserve Banks, Maiden Lane LLC, and the Board as of and for the year ended December 31, 2015, including information about the composition, fair value, and earnings related to the $4.4 trillion of U.S. Treasury securities, government-sponsored enterprise (GSE) debt securities, and federal agency and GSE mortgage-backed securities (MBS) acquired through open market operations. The Federal Reserve Bank of New York provides additional detailed information about open market operations and securities holdings on an ongoing basis on its website.
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.
The Federal Reserve System financial statements are available on the Federal Reserve Board’s website.
For media inquiries, call 202-452-2955.
Combined Federal Reserve Banks Audited Annual Financial Statements
Independent Auditors’ Report
To the Board of Governors of the Federal Reserve System and the Boards of Directors of the Federal Reserve Banks:
We have audited the accompanying combined statement of condition of the Federal Reserve Banks (the “Reserve Banks”) as of December 31, 2015, and the related combined statements of income and comprehensive income and changes in capital for the year then ended. These combined financial statements are the responsibility of the Division of Reserve Bank Operations and Payment Systems’ management. Our responsibility is to express an opinion on these combined financial statements based on our audit. The accompanying combined financial statements of the Reserve Banks as of December 31, 2014 and for the year then ended were audited by other auditors whose report thereon dated March 11, 2015, expressed an unmodified opinion on those combined financial statements and contained an emphasis of matter paragraph that described the Reserve Banks’ basis of accounting discussed in Note 3 to the 2014 combined financial statements.
We conducted our audit in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States) and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in Note 3 to the combined financial statements, the Division of Reserve Bank Operations and Payment Systems has prepared these combined financial statements in conformity with the accounting principles established by the Board of Governors of the Federal Reserve System (the “Board”), as set forth in the Financial Accounting Manual for Federal Reserve Banks, which is a basis of accounting other than U.S. generally accepted accounting principles.
In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of the Reserve Banks as of December 31, 2015, and the results of its operations for the year then, on the basis of accounting described in Note 3.
March 8, 2016
See the Combined Federal Reserve Banks Audited Annual Financial Statements below.