Total assets declined at Fed Banks last year by nearly 12%, audited statements show

Total assets dropped by $700 billion at the Federal Reserve Banks in 2023, according to annual audited financial statements issued by the Federal Reserve Tuesday, representing a decrease of 11.76% from the previous year.

According to the agency, total assets for year-end 2023 at the Reserve Banks were $7.8 trillion. Those were composed primarily of $7.5 trillion of U.S. Treasury securities and federal agency and government-sponsored-enterprise mortgage-backed securities acquired through the conduct of monetary policy, the Fed said.

Other key details of the financial statements issued included:

  • In 2023, the deferred asset reported by the Reserve Banks increased by $116.7 billion resulting in a cumulative deferred asset at year-end of $133.3 billion. The Fed said the deferred asset is the amount of net excess earnings the Reserve Banks will need to realize before remittances to the U.S. Treasury resume. “A deferred asset has no implications for the Federal Reserve’s conduct of monetary policy or its ability to meet its financial obligations,” the agency said.
  • Operating expenses were $9.2 billion in 2023, including assessments of $2.9 billion for Federal Reserve Board expenses, currency costs, and the operations of the Consumer Financial Protection Bureau (CFPB). Specifically, those expenses totaled, according to financials released earlier this month, $1.0 billion for the costs related to producing, issuing, and retiring currency; $1.1 billion for Fed Board expenditures; and $0.7 billion to fund the operations of the CFPB.
  • The Reserve Banks’ 2023 sum total of expenses exceeded earnings by $114.3 billion. In 2022, net income was $58.8 billion;
  • Interest income on securities acquired through open market operations totaled $163.8 billion in 2023, a decrease of $6.2 billion from 2022;
  • Interest expense on depository institutions’ reserve balances was $176.8 billion in 2023, an increase of $116.4 billion from 2022;
  • Total interest income earned on loans to depository institutions and other eligible borrowers, including from the Bank Term Funding Program and Paycheck Protection Program Liquidity Facility, was $10.4 billion;
  • Interest expense on securities sold under agreements to repurchase was $104.3 billion in 2023, an increase of $62.4 billion from 2022.
  • The Reserve Banks realized net income of $0.1 billion from emergency credit facilities established in response to the COVID-19 pandemic; and

The Fed noted that an independent public accounting firm conducted the audit, which issued unqualified opinions. The firm, the Fed said, asserted that its audit found the financial statements for the Federal Reserve Board, the 12 Federal Reserve Banks, and three limited liability companies (LLCs) to be free of material misstatements in accordance with the applicable auditing standards.

Federal Reserve Board releases annual audited financial statements

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