hotbrownsauce
03-28-2008, 11:40 AM
First of all before you get too confused. This topic is about the Federal Reserve and its Income and how it gets distributed.
The Federal Reserve Board on Tuesday released figures that indicate the Federal Reserve Banks distributed approximately $21.454 billion of their $30.246 billion total income to the U.S. Treasury during 2005.
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 $28.959 billion in 2005. Additionally, income from fees for the provision of priced services to depository institutions totaled $901 million. The remaining income of $386 million includes earnings on foreign currencies, earnings from loans, and other income.
The operating expenses of the twelve Reserve Banks totaled $2.193 billion in 2005, including the System's net pension credit. In addition, the cost of earnings credits granted to depository institutions amounted to $212 million. Assessments against Reserve Banks for Board expenditures totaled $266 million and the cost of currency amounted to $477 million.
Net deductions to income amounted to $3.577 billion, primarily representing unrealized losses on assets denominated in foreign currencies that are revalued to reflect current market exchange rates.
Total net income for the Federal Reserve Banks in 2005 amounted to $23.521 billion. Under the Board's policy, each Reserve Bank's net income after the statutory dividends of $781 million to member banks and the $1.286 billion necessary to equate surplus to paid-in capital is transferred to the U.S. Treasury.
Source http://www.federalreserve.gov/newsevents/press/other/20060110a.htm
the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
Source http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5
To me it says Net Income was 23.521 billion. (Net Income is another name for 'Profit' but is that after all expenses including wages to Federal Bank Employees as I'm thinking??) 781 Million was paid out to stock investors in 'Member Banks" (a 6% fee required by law... read the second quote / link). All the surplus (extra money) is given to the U.S. Treasury.
What does
"and the $1.286 billion necessary to equate surplus to paid-in capital" mean? Does that mean 1.286 billion was paid to the Federal Bank employees?
The Federal Reserve Board on Tuesday released figures that indicate the Federal Reserve Banks distributed approximately $21.454 billion of their $30.246 billion total income to the U.S. Treasury during 2005.
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 $28.959 billion in 2005. Additionally, income from fees for the provision of priced services to depository institutions totaled $901 million. The remaining income of $386 million includes earnings on foreign currencies, earnings from loans, and other income.
The operating expenses of the twelve Reserve Banks totaled $2.193 billion in 2005, including the System's net pension credit. In addition, the cost of earnings credits granted to depository institutions amounted to $212 million. Assessments against Reserve Banks for Board expenditures totaled $266 million and the cost of currency amounted to $477 million.
Net deductions to income amounted to $3.577 billion, primarily representing unrealized losses on assets denominated in foreign currencies that are revalued to reflect current market exchange rates.
Total net income for the Federal Reserve Banks in 2005 amounted to $23.521 billion. Under the Board's policy, each Reserve Bank's net income after the statutory dividends of $781 million to member banks and the $1.286 billion necessary to equate surplus to paid-in capital is transferred to the U.S. Treasury.
Source http://www.federalreserve.gov/newsevents/press/other/20060110a.htm
the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
Source http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5
To me it says Net Income was 23.521 billion. (Net Income is another name for 'Profit' but is that after all expenses including wages to Federal Bank Employees as I'm thinking??) 781 Million was paid out to stock investors in 'Member Banks" (a 6% fee required by law... read the second quote / link). All the surplus (extra money) is given to the U.S. Treasury.
What does
"and the $1.286 billion necessary to equate surplus to paid-in capital" mean? Does that mean 1.286 billion was paid to the Federal Bank employees?