Fed distributes $25.3 billion to U.S. Treasury

Some $25.3 billion of the $34 billion total income was distributed by the Federal Reserve banks to the U.S. Treasury during 2000, according to preliminary figures. In addition, $3.75 billion was transferred from surplus to the Treasury in May 2000, as required by statute.

The Federal Reserve System income is derived primarily from interest earned on U.S. government securities that the Fed has acquired through open market operations. This income was $32.7 billion for the year. Additionally, revenues from fees for the provision of priced services to depository institutions totaled $881 million. The remaining income of $335 million includes earnings on foreign currencies, earnings from loans and other income.

Operating expenses of the 12 Fed banks totaled $1.59 billion, including the systems pension cost credit.

Total net income for the Fed banks amounted to $29.9 billion. Under the Fed's policy, all net income after the statutory dividend to member banks and the amount necessary to equate surplus to paid-in capital is transferred to the Treasury. The statutory dividends to member banks were $410 million.