The Federal Reserve today released 2017 financial statements — independently audited by KPMG — for the combined system, including the 12 Federal Reserve Banks and the Board of Governors. The Fed banks held a combined $4.5 trillion in assets at year-end, similar to the system’s balance at the end of 2016.
The Fed banks’ 2017 earnings were approximately $80.7 billion, with $80.6 billion remitted to the Treasury. The Fed spent $25.8 billion on interest on depository institutions’ balances at the reserve banks, a $13.8 billion increase from the year prior. The banks’ operating expenses were $6.8 billion, with an additional $2 billion assessed to cover currency costs, operations of the Board of Governors and the operations of the Consumer Financial Protection Bureau.
The statements provided detail about the composition, value and earnings of the $4.4 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 interest income from securities acquired through open market operations in 2017.