The Federal Reserve today released financial statements — independently audited by KPMG — for the combined system, including the 12 Federal Reserve Banks, the Board of Governors and the company created to facilitate the 2008 rescue of Bear Stearns. The Fed banks held a combined $4.5 trillion in assets at year’s end, similar to the system’s year-end balance in 2014.
The Fed banks’ 2015 earnings were $100.3 billion, with $117.1 billion remitted to the Treasury — including a one-time payment of $19.3 billion made in December to satisfy a provision of the federal highway bill drawing down the Fed’s capital surplus. The Fed spent $6.9 billion on interest on depository institutions’ balances at the reserve banks. The banks’ operating expenses were $6.4 billion, with an additional $1.9 billion assessed to cover currency costs, operations of the Board of Governors and the operations of the Consumer Financial Protection Bureau.
The statements provided detailed information about the composition, value and earnings of the $4.5 trillion in Treasury bonds, GSE debt securities and mortgage-backed securities purchased through open market operations as part of the Fed’s quantitative easing programs. The Fed banks earned $113.6 billion in 2015 interest income from securities acquired through open market operations.