Appendix - Financing Vehicles and the Board of Governors of the Federal Reserve

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

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

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, which is included here for information. Its
budget schedules and statements are not subject to review by the
President.
Amounts are on a calendar year basis, with the exception of the 2006
balance sheets for the Financing Corporation and Resolution Funding
Corporation, which are as of September 30, 2006.

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)

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Identification code 99-4033-0-
3-373

2005 actual

2006 actual

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ASSETS:
Federal assets: Investments in US
securities:

1102

Segregated accounts investment, net

2,979

3,175

1206

Non-Federal assets: Receivables, net

Other Federal assets:

1801

Cash, cash equivalents

309

1901

Other assets

1999

Total assets

3,149

3,497

LIABILITIES:
Non-Federal liabilities:

2202

Interest payable

157

236

2203

Debt

8,142

8,143

2207

Other

104

2999

Total liabilities

8,346

8,483

NET POSITION:
3100

FICO capital stock purchased by FHLBanks

680

3300

Cumulative results of operations

2,293

2,504

3300

FSLIC capital certificates

-8,170

3999

Total net position

-5,197

-4,986

4999

Total liabilities and net position

3,149

3,497

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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)

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Identification code 99-4029-0-
3-373

2005 actual

2006 actual

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ASSETS:
Federal assets: Investments in US
securities:

1102

Principal fund account investment, net

7,920

8,395

[[Page 1184]]

1206

Non-Federal assets: Assessments receivable for interest expense

886

888

1999

Total assets

8,806

9,283

LIABILITIES:
Non-Federal liabilities:

2202

Accrued interest payable on long-term obligations

886

888

2203

Debt

30,079

30,078

2999

Total liabilities

30,965

30,966

NET POSITION:
3100

Nonvoting capital stock issued to FHLBanks

2,513

3300

Cumulative results of operations

5,557

6,033

3300

RTC nonredeemable capital certificates

-31,286

3300

Contributed capital--principal fund assessments

1,057

3999

Total net position

-22,159

-21,683

4999

Total liabilities and net position

8,806

9,283

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BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

Program and Financing (in millions of dollars)

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Identification code 99-4450-0-3-803 2005 actual 2006 est. 2007 est.
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Obligations by program activity:
09.01 Monetary and economic policy...... 121 122 130
09.02 Services to financial institutions
and the public.................. 5 6 6
09.03 Supervision and regulation of
financial institutions.......... 117 123 131
09.04 System policy direction and
oversight....................... 46 53 57
--------- --------- ----------
09.09 Subtotal: Board operating
expenses...................... 289 304 324
09.10 Office of Inspector General
operating expenses.............. 4 5 5
--------- --------- ----------
10.00 Total new obligations........... 293 309 329
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Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 293 309 329
23.95 Total new obligations............. -293 -309 -329
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New budget authority (gross), detail:
Mandatory:

69.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 293 309 329
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Change in obligated balances:
73.10 Total new obligations............. 293 309 329
73.20 Total outlays (gross)............. -293 -309 -329
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Outlays (gross), detail:
86.97 Outlays from new mandatory
authority....................... 293 309 329
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Offsets:
Against gross budget authority and outlays:

88.40 Offsetting collections (cash)
from: Non-Federal sources..... -293 -309 -329
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Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays...........................
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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)

11.1 Full-time permanent............. 166 179 190
11.3 Other than full-time permanent.. 3 3 3
11.5 Other personnel compensation.... 2 2 3
--------- --------- ----------
11.9 Total personnel compensation.. 171 184 196
12.1 Civilian personnel benefits....... 31 33 34
21.0 Travel and transportation of
persons......................... 6 7 6
22.0 Transportation of things.......... 1 1 1
23.3 Communications, utilities, and
miscellaneous charges........... 10 10 11
24.0 Printing and reproduction......... 2 2 2
25.1 Advisory and assistance services.. 5 5 5
25.2 Other services.................... 30 33 40
25.2 Other services.................... 4 5 5
26.0 Supplies and materials............ 9 9 9
31.0 Equipment......................... 24 20 20
--------- --------- ----------
99.0 Reimbursable obligations........ 293 309 329
--------- --------- ----------
99.9 Total new obligations........... 293 309 329
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