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

    [[Page 1243]]

      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, as listed below.

        --The Financing Corporation functions as a financing vehicle for the
            Federal Savings and Loan Insurance Corporation (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 (Act). FICO's sole purpose is to function as a
    financing vehicle for FSLIC Resolution Fund, formerly the Federal
    Savings and Loan Insurance Corporation. FICO operates under the
    supervision and control of the Federal Housing Finance Board (Financing
    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 FSLIC Resolution Fund, or to refund any
    previously issued obligations. The Resolution Trust Corporation
    Refinancing, Restructuring, and Improvement Act of 1991 terminated
    FICO's borrowing authority.
        The Act provided formulas pursuant to which the Federal Home Loan
    Banks make 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 are the primary source of repayment of the principal of 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 and the Savings Association Insurance Fund.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4033-0-3-373

    2003 actual

    2004 actual

    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102

    Segregated accounts investment, net

    2,512

    2,678

    1206

    Receivables, net

    92

    1801

    Cash, cash equivalents

    64

    281

    1901

    Other assets

    9

    7

    1999

    Total assets

    2,677

    2,966

        LIABILITIES:
    2202

    Interest payable

    157

    236

    2203

    Debt

    8,151

    8,152

    2207

    Other

    27

    70

    2999

    Total liabilities

    8,335

    8,458

        NET POSITION:
    3100

    FICO capital stock purchased by FHLBanks

    680

    680

    3300

    Cumulative results of operations

    1,832

    1,998

    3300

    FSLIC capital certificates

    -8,170

    -8,170

    3999

    Total net position

    -5,658

    -5,492

    4999

    Total liabilities and net position

    2,677

    2,966

    -----------------------------------------------------------------------------------------------

                         Resolution Funding Corporation

        The Resolution Funding Corporation (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 (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 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 (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 are held in the Principal Fund and are the
    primary source of repayment of the principal of the obligations at
    maturity.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4029-0-3-373

    2003 actual

    2004 actual

    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102

    Principal fund account investment, net

    6,778

    7,185

    1206

    Assessments receivable for interest expense

    885

    889

    1999

    Total assets

    7,663

    8,074

    [[Page 1244]]

        LIABILITIES:
    2202

    Accrued interest payable on long-term obligations

    885

    888

    2203

    Debt

    30,057

    30,055

    2999

    Total liabilities

    30,942

    30,943

        NET POSITION:
    3100

    Nonvoting capital stock issued to FHLBanks

    2,513

    2,513

    3300

    Cumulative results of operations

    4,438

    4,847

    3300

    RTC nonredeemable capital certificates

    -31,287

    -31,286

    3300

    Contributed capital--principal fund assessments

    1,057

    1,057

    3999

    Total net position

    -23,279

    -22,869

    4999

    Total liabilities and net position

    7,663

    8,074

    -----------------------------------------------------------------------------------------------

                BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4450-0-3-803      2004 actual   2005 est.   2006 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Monetary and economic policy......         101         109         112
    09.02 Services to financial institutions
            and the public..................           5           6           6
    09.03 Supervision and regulation of
            financial institutions..........         107         115         119
    09.04 System policy direction and
            oversight.......................          42          45          47
                                               ---------   ---------  ----------
    09.09   Subtotal: Board operating
              expenses......................         255         275         284
    09.10 Office of Inspector General
            operating expenses..............           4           4           4
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         259         279         288
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         259         279         288
    23.95 Total new obligations.............        -259        -279        -288
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...         259         279         288
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          26          26          26
    73.10 Total new obligations.............         259         279         288
    73.20 Total outlays (gross).............        -259        -279        -288
                                               ---------   ---------  ----------
    74.40   Obligated balance, end of year..          26          26          26
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................         259         279         288
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....        -259        -279        -288
    ----------------------------------------------------------------------------

        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 the Congress.
        Program.--To carry out its responsibilities under this 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 this 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 this 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      2004 actual   2005 est.   2006 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............         148         155         166
    11.3    Other than full-time permanent..           3           3           3
    11.5    Other personnel compensation....           2           2           2
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..         153         160         171
    12.1  Civilian personnel benefits.......          28          28          30
    21.0  Travel and transportation of
            persons.........................           5           5           5
    22.0  Transportation of things..........           1           2           2
    23.3  Communications, utilities, and
            miscellaneous charges...........           9           9          10
    24.0  Printing and reproduction.........           2           2           2
    25.1  Advisory and assistance services..           2           4           2
    25.2  Other services....................          25          35          31
    25.2  Other services....................           4           4           4
    26.0  Supplies and materials............           8           9          10
    31.0  Equipment.........................          22          21          21
                                               ---------   ---------  ----------
    99.0      Reimbursable obligations......         259         279         288
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         259         279         288
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