    [Appendix]
    [Financing Vehicles and the Board of Governors of the Federal Reserve]
    [From the U.S. Government Printing Office, www.gpo.gov]

    [[Page 1121]]

      FINANCING VEHICLES AND THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE

        This chapter contains descriptions of and data on financing vehicles
    and the Board of Governors of the Federal Reserve listed below.

        --The Financing Corporation functions as a financing vehicle for the
            FSLIC Resolution Fund. It operates under the supervision and
            control of the Federal Housing Finance Board.

        --The Resolution Funding Corporation provided financing for the
            Resolution Trust Corporation (RTC) and is subject to the general
            oversight and direction of the Secretary of the Treasury.

        The Board of Governors of the Federal Reserve System's transactions
    are not included in the budget because of its unique status in the
    conduct of monetary policy. The Board provides data on its
    administrative budget on a calendar year basis, which is included here
    for information. Its budget schedules and statements are not subject to
    review by the President.

                               FINANCING VEHICLES

                              Financing Corporation

        The Financing Corporation (FICO) is a mixed-ownership government
    corporation, chartered by the Federal Home Loan Bank Board pursuant to
    the Federal Savings and Loan Insurance Corporation Recapitalization Act
    of 1987, as amended (the ``Act''). FICO's sole purpose was to function
    as a financing vehicle for the FSLIC Resolution Fund, formerly the
    Federal Savings and Loan Insurance Corporation (FSLIC). FICO operates
    under the supervision and control of the Federal Housing Finance Board
    (the ``Finance Board''). Pursuant to the Act, FICO was authorized to
    issue debentures, bonds and other obligations subject to limitations
    contained in the Act, the net proceeds of which were to be used solely
    to purchase capital certificates issued by the FSLIC Resolution Fund, or
    to refund any previously issued obligations. The Resolution Trust
    Corporation Refinancing, Restructuring, and Improvement Act of 1991
    terminated the FICO's borrowing authority.
        The Act provided formulas pursuant to which the Federal Home Loan
    Banks made capital contributions to FICO at the direction of the Finance
    Board for the purchase of FICO capital stock. FICO used the proceeds
    received from the sales of such capital stock to purchase non-interest
    bearing securities for deposit in a segregated account as required by
    the Act. The non-interest bearing securities held in the segregated
    account will be the primary source of repayment of the principal of the
    FICO obligations. Securities in the segregated account are kept separate
    from other FICO accounts and funds but are not specifically pledged as
    collateral for the payment of obligations. The primary source of payment
    of interest on the obligations is the receipt of assessments imposed on
    and collected from institutions' accounts which are insured by the Bank
    Insurance Fund (the ``BIF'') and the Savings Association Insurance Fund
    (the ``SAIF'').

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4033-0-3-373    2001 actual    2002 actual     2003 est.      2004 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         966            983           996          1,014
    0102  Expense...........................        -795           -795          -795           -795
                                            ------------ --------------  ------------  -------------
    0105  Net income or loss (-)............         171            188           201            219
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4033-0-3-373    2001 actual    2002 actual     2003 est.      2004 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102    Segregated accounts investment,
              net...........................       2,118          2,258         2,459          2,677
    1801  Cash, cash equivalents, and
            interest receivable.............         157            283           283            283
    1901  Other assets......................           9              9             8              8
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       2,284          2,550         2,750          2,968
        LIABILITIES:
    2202  Interest payable..................         156            235           236            236
    2203  Debt..............................       8,149          8,150         8,151          8,152
    2207  Other.............................          30             76            74             72
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       8,335          8,461         8,461          8,460
        NET POSITION:
    3100  FICO capital stock purchased by
            FHLBanks........................         680            680           680            680
          Cumulative results of operations:

    3300    Cumulative results of operations       1,439          1,579         1,779          1,998
    3300    FSLIC capital certificates......      -8,170         -8,170        -8,170         -8,170
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............      -6,051         -5,911        -5,711         -5,492
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       2,284          2,550         2,750          2,968
    -----------------------------------------------------------------------------------------------

                         Resolution Funding Corporation

        The Resolution Funding Corporation (the ``REFCORP'') is a mixed-
    ownership government corporation established by Title V of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). The
    sole purpose of REFCORP was to provide financing for the Resolution
    Trust Corporation (the ``RTC''). Pursuant to FIRREA, REFCORP was
    authorized to issue debentures, bonds, and other obligations, subject to
    limitations contained in the Act and regulations established by the
    Thrift Depositor Protection Oversight Board. The proceeds of the debt
    (less any discount, plus any premium, net of issuance cost) were used
    solely to purchase nonredeemable capital certificates of the RTC or to
    refund any previously issued obligations.
        Until October 29, 1998, REFCORP was subject to the general oversight
    and direction of the Thrift Depositor Protection Oversight Board. At
    that time, the Oversight Board was abolished and its authority and
    duties were transferred to the Secretary of the Treasury. The day-to-day
    operations of REFCORP are under the management of a three-member
    Directorate comprised of the Director of the Office of Finance of the
    Federal Home Loan Banks and two members selected from among the
    presidents of the twelve Federal Home Loan Banks (``the FHLBanks'').
    Members of the Directorate serve without compensation, and REFCORP is
    not permitted to have any paid employees.
        FIRREA, as amended, and the regulations adopted by the Thrift
    Depositor Protection Oversight Board and the Secretary of the Treasury
    provide formulas pursuant to which the Federal Home Loan Banks made
    capital contributions to REFCORP's Principal Fund and continue to make
    interest payments on outstanding REFCORP obligations. FIRREA also
    provides that the U.S. Treasury cover any interest shortfall. Funds
    designated for the Principal Funds were used to purchase zero-coupon
    bonds. The zero-coupon bonds will be held in the Principal Fund and are
    the primary source of repayment of the principal of the obligations at
    maturity.

    [[Page 1122]]

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4029-0-3-373    2001 actual    2002 actual     2003 est.      2004 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................       3,059          3,094         3,126          3,167
    0102  Expense...........................      -2,626         -2,626        -2,626         -2,626
                                            ------------ --------------  ------------  -------------
    0105  Net income or loss (-)............         433            468           500            541
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4029-0-3-373    2001 actual    2002 actual     2003 est.      2004 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102    Principal fund account
              investment, net...............       5,802          6,149         6,646          7,185
    1206  Assessments receivable for
            interest expense................         886            888           888            888
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       6,688          7,037         7,534          8,073
        LIABILITIES:
    2202  Accrued interest payable on long-
            term obligations................         888            886           888            888
    2203  Debt..............................      30,060         30,061        30,058         30,055
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      30,948         30,947        30,946         30,943
        NET POSITION:
    3100  Nonvoting capital stock issued to
            FHLBanks........................       2,513          2,513         2,513          2,513
          Cumulative results of operations:

    3300    Cumulative results of operations       3,456          3,806         4,304          4,846
    3300    RTC nonredeemable capital
              certificates..................     -31,286        -31,286       -31,286        -31,286
    3300    Contributed capital--principal
              fund assessments..............       1,057          1,057         1,057          1,057
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............     -24,260        -23,910       -23,412        -22,870
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       6,688          7,037         7,534          8,073
    -----------------------------------------------------------------------------------------------

                BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4450-0-3-803      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Monetary and economic policy......          95          97         106
    09.02 Services to financial institutions
            and the public..................           5           5           5
    09.03 Supervision and regulation of
            financial institutions..........          89          91         100
    09.04 System policy direction and
            oversight.......................          36          36          40
                                               ---------   ---------  ----------
    09.09   Subtotal: Board operating
              expenses......................         225         229         251
    09.10 Office of Inspector General
            operating expenses..............           3           4           4
    09.11 Building acquisition..............          66
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         294         233         255
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         294         233         255
    23.95 Total new obligations.............        -294        -233        -255
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...         294         233         255
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          26          26          26
    73.10 Total new obligations.............         294         233         255
    73.20 Total outlays (gross).............        -294        -233        -255
    74.40 Obligated balance, end of year....          26          26          26
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................         279         218         240
    86.98 Outlays from mandatory balances...          15          15          15
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         294         233         255
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....        -294        -233        -255
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................
    ---------------------------------------------------------------------------
        The figures presented may differ from other Board financial material
    because they are prepared in accordance with OMB guidelines which vary
    from the Board's budget and accounting procedures.

        The Federal Reserve System operates under the provisions of the
    Federal Reserve Act of 1913, as amended, and other acts of Congress.
        Program.--To carry out its responsibilities under the Act, the Board
    determines general monetary, credit, and operating policies for the
    System as a whole and formulates the rules and regulations necessary to
    carry out the purposes of the Federal Reserve Act. The Board's principal
    duties consist of exerting an influence over credit conditions and
    supervising the Federal Reserve banks and member banks.
        Financing.--Under the provisions of section 10 of the Federal
    Reserve Act, the Board of Governors levies upon the Federal Reserve
    banks, in proportion to their capital and surplus, an assessment
    sufficient to pay its estimated expenses. The Board, under the Act,
    determines and prescribes the manner in which its obligations are
    incurred and its expenses paid. Funds derived from assessments are
    deposited in the Federal Reserve Bank of Richmond, and the Act provides
    that such funds ``shall not be construed to be Government funds or
    appropriated moneys.'' No Government appropriation is required to
    support operations of the Board.
        The information presented pertains to Board operations only.
    Expenditures made on behalf of the Federal Reserve banks for production,
    issuance, retirement, and shipment of Federal Reserve notes are not
    included, since they are reimbursed in full by the Federal Reserve
    banks.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4450-0-3-803      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

          Reimbursable obligations:

            Personnel compensation:
    11.1      Full-time permanent...........         125         133         144
    11.3      Other than full-time permanent           3           3           3
    11.5      Other personnel compensation..           2           2           2
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         130         138         149
    12.1    Civilian personnel benefits.....          22          21          30
    21.0    Travel and transportation of
              persons.......................           4           6           6
    22.0    Transportation of things........                       1           1
    23.3    Communications, utilities, and
              miscellaneous charges.........          11           8           8
    24.0    Printing and reproduction.......           2           2           2
    25.1    Advisory and assistance services           5           5           5
    25.2    Other services..................          23          21          23
    26.0    Supplies and materials..........           8           8           8
    31.0    Equipment.......................          20          19          19
    32.0    Land and structures.............          66
                                               ---------   ---------  ----------
    99.0      Reimbursable obligations......         291         229         251
    25.2  Allocation Account: Other services           3           4           4
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         294         233         255
    ---------------------------------------------------------------------------