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



   
      
      
         FINANCING VEHICLES AND THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE
      
      
   
   
      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 System
            (Board). The Financing Corporation functions as a financing vehicle for the Federal Savings and Loan Insurance Corporation
            (FSLIC) Resolution Fund. 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'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 is not subject to review
            by the President and is executed and presented here on a calendar-year basis. The previous year's data reflects the final
            budget, as approved by the Board.
         
         The 2018 balance sheets for the Financing Corporation and Resolution Funding Corporation are as of December 31, 2018, and
            the 2019 balance sheets are as of September 30, 2019.
         
      
      Federal Funds
         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 is to function as a financing vehicle for the FSLIC Resolution Fund, formerly the Federal Savings and Loan Insurance
            Corporation. 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 FICO's borrowing authority. FICO paid off its last long-term debt obligation on September
            26, 2019, and on October 2, 2019, commenced the process of dissolution in accordance with relevant statutory requirements
            and the terms of a plan of dissolution approved by the Director of the Federal Housing Finance Agency (FHFA) on November 30,
            2018.
         
         The Act provided formulas pursuant to which the Federal Home Loan Banks (FHLBanks) made capital contributions to FICO. 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 were the primary
            source of repayment of the principal of FICO obligations. Securities in the segregated account were kept separate from other
            FICO accounts and funds, but were not specifically pledged as collateral for the payment of obligations. The primary source
            of payment of interest on the obligations was the receipt of assessments imposed on and collected from institutions' accounts,
            which are insured by the Federal Deposit Insurance Corporation's Deposit Insurance Fund.
         
         Subject to the satisfaction of any claims and the payment of other administrative expenses upon FICO's dissolution, which
            is expected to occur in the first half of 2020, any surplus and remaining cash on hand of FICO is expected to be distributed
            to the FHLBanks, as FICO's sole stockholders, in proportion to their ownership in FICO's nonvoting capital stock. The receipt
            by the FHLBanks of any such distribution from FICO will be treated as a partial return of their prior capital contributions
            to FICO and credited to their unrestricted retained earnings. The FHLBanks do not expect any distribution from FICO to materially
            affect the FHLBanks' combined financial condition or combined results of operations.
         
      
      Balance Sheet (in millions of dollars)
      
         
            
               
                  
                     
                  
               
               
                  Identification code 920â4980â0â4â373
                  2018 actual
                  2019 actual
               
               
                  
                     
                  
               
               
                  
                  ASSETS:
               
               
                  
                  Federal assets:
               
               
                  
                  Investments in U.S. securities:
               
               
                  1102
                  Segregated accounts investment, net
                  2,482
                  
               
               
                  1801
                  Other Federal assets: Cash, cash equivalents
                  85
                  198
               
               
                  
                  
                  
                     
                  
                  
                     
                  
               
               
                  1999
                  Total assets
                  2,567
                  198
               
               
                  
                  LIABILITIES:
               
               
                  
                  Non-Federal liabilities:
               
               
                  2202
                  Interest payable
                  49
                  
               
               
                  2203
                  Debt
                  2,320
                  
               
               
                  2207
                  Other
                  36
                  2
               
               
                  
                  
                  
                     
                  
                  
                     
                  
               
               
                  2999
                  Total liabilities
                  2,405
                  2
               
               
                  
                  NET POSITION:
               
               
                  3100
                  FICO capital stock purchased by FHLBanks
                  680
                  680
               
               
                  3300
                  Cumulative results of operations
                  7,653
                  7,686
               
               
                  3300
                  FSLIC capital certificates
                  â8,170
                  â8,170
               
               
                  
                  
                  
                     
                  
                  
                     
                  
               
               
                  3999
                  Total net position
                  163
                  196
               
               
                  
                  
                  
                     
                  
                  
                     
                  
               
               
                  4999
                  Total liabilities and net position
                  2,568
                  198
               
               
                  
                     
                  
               
            
         
      
         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 or FIRREA (P.L. 101â73). 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 composed of the Chief
            Executive Officer of the Office of Finance of the Federal Home Loan Banks and two members selected from among the presidents
            of the 11 Federal Home Loan Banks (FHLBs). 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 required that FHLBs contribute 20 percent of net earnings annually to assist in the payment of interest on bonds
            issued by REFCORP until such time as the total payments are equivalent to a $300 million annual annuity with a final maturity
            date of April 15, 2030. The FHLBs fulfilled this obligation on August 5, 2011. Since then, with the exception of funds derived
            from the sale of former RTC assets managed by the Federal Deposit Insurance Corporation's Federal Savings and Loan Insurance
            Corporation (FSLIC) Resolution Fund, only the U.S. Treasury has paid interest on REFCORP's long-term obligations. For details,
            please see the Payment to the Resolution Funding Corporation account in the Department of the Treasury section of the Appendix
            volume of the Budget.
         
      
      Balance Sheet (in millions of dollars)
      
         
            
               
                  
                     
                  
               
               
                  Identification code 920â4981â0â4â373
                  2018 actual
                  2019 actual
               
               
                  
                     
                  
               
               
                  
                  ASSETS:
               
               
                  
                  Federal assets:
               
               
                  
                  Investments in U.S. securities:
               
               
                  1102
                  Principal fund account investment, net
                  21,809
                  23,119
               
               
                  1206
                  Non-Federal assets: Assessments receivable for interest expense
                  886
                  888
               
               
                  
                  
                  
                     
                  
                  
                     
                  
               
               
                  1999
                  Total assets
                  22,695
                  24,007
               
               
                  
                  LIABILITIES:
               
               
                  
                  Non-Federal liabilities:
               
               
                  2202
                  Accrued interest payable on long-term obligations
                  886
                  888
               
               
                  2203
                  Debt
                  30,055
                  30,053
               
               
                  
                  
                  
                     
                  
                  
                     
                  
               
               
                  2999
                  Total liabilities
                  30,941
                  30,941
               
               
                  
                  NET POSITION:
               
               
                  3100
                  Nonvoting capital stock issued to FHLBanks
                  2,513
                  2,513
               
               
                  3300
                  Cumulative results of operations
                  19,470
                  20,782
               
               
                  3300
                  RTC nonredeemable capital certificates
                  â31,286
                  â31,286
               
               
                  3300
                  Contributed capital - principal fund assessments
                  1,057
                  1,057
               
               
                  
                  
                  
                     
                  
                  
                     
                  
               
               
                  3999
                  Total net position
                  â8,246
                  â6,934
               
               
                  
                  
                  
                     
                  
                  
                     
                  
               
               
                  4999
                  Total liabilities and net position
                  22,695
                  24,007
               
               
                  
                     
                  
               
            
         
      
         Board of Governors of the Federal Reserve SystemProgram and Financing (in millions of dollars)
      
         
            
               
                  
                     
                  
               
               
                  Identification code 920â4982â0â4â803
                  2018 actual
                  2019 est.
                  2020 est.
               
               
                  
                     
                  
               
               
                  
                  Obligations by program activity:
               
               
                  0801
                  Monetary policy
                  173
                  199
                  199
               
               
                  0802
                  Public programs
                  18
                  22
                  22
               
               
                  0803
                  Supervision and regulation
                  178
                  190
                  190
               
               
                  0804
                  Reserve Bank oversight
                  36
                  35
                  35
               
               
                  0805
                  Currency operating expenses (Board incurred)
                  44
                  50
                  50
               
               
                  0806
                  Support and overhead
                  334
                  348
                  348
               
               
                  
                  
                  
                     
                  
                  
                     
                  
                  
                     
                  
               
               
                  0809
                  Reimbursable program activities, subtotal
                  783
                  844
                  844
               
               
                  0810
                  Office of Inspector General operating expenses
                  33
                  35
                  29
               
               
                  
                  
                  
                     
                  
                  
                     
                  
                  
                     
                  
               
               
                  0900
                  Total new obligations, unexpired accounts
                  816
                  879
                  873
               
               
                  
                     
                  
               
               
                  
                  Budgetary resources:
               
               
                  
                  Financing authority:
               
               
                  
                  Spending authority from offsetting collections, mandatory:
               
               
                  1800
                  Collected
                  816
                  879
                  873
               
               
                  1930
                  Total budgetary resources available
                  816
                  879
                  873
               
               
                  
                     
                  
               
               
                  
                  Change in obligated balance:
               
               
                  
                  Unpaid obligations:
               
               
                  3010
                  New obligations, unexpired accounts
                  816
                  879
                  873
               
               
                  3020
                  Outlays (gross)
                  â816
                  â879
                  â873
               
               
                  
                     
                  
               
               
                  
                  Financing authority and disbursements, net:
               
               
                  
                  Mandatory:
               
               
                  4090
                  Budget authority, gross
                  816
                  879
                  873
               
               
                  
                  
                  
                     
                  
                  
                     
                  
                  
                     
                  
               
               
                  4110
                  Outlays, gross (total)
                  816
                  879
                  873
               
               
                  
                  Offsets against gross financing authority and disbursements:
               
               
                  
                  Offsetting collections (collected) from:
               
               
                  4123
                  Non-Federal sources
                  â816
                  â879
                  â873
               
               
                  4180
                  Budget authority, net (total)
                  
                  
                  
               
               
                  4190
                  Outlays, net (total)
                  
                  
                  
               
               
                  
                     
                  
               
            
         
      
      
         The Federal Reserve System operates under the provisions of the Federal Reserve Act of 1913, as amended, and other acts of
            the Congress. To carry out its responsibilities under this Act, the Board of Governors (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 Act. The Board's principal duties consist of exerting an influence over credit conditions and supervising
            the Federal Reserve banks and member banks.
         
         Under the provisions of section 10 of the Federal Reserve Act, the Board levies upon the Federal Reserve banks, in proportion
            to their capital and surplus, an assessment sufficient to pay its estimated expenses. Also under the Act, the Board 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 "not be construed to be Government
            funds or appropriated moneys.'' No Government appropriation is required to support operations of the Board.
         
         The Board issues U.S. currency (Federal Reserve notes) and the Reserve Banks distribute currency through depository institutions.
            The Board incurs costs and assesses the Reserve Banks for these costs related to producing, issuing, and retiring Federal
            Reserve notes, as well as providing other services. The assessment is allocated based on each Reserve Bank's share of the
            number of notes comprising the System's net liability for Federal Reserve notes on December 31 of the prior year. The Board
            recognizes the assessment in the year in which the associated costs are incurred.
         
         Since 2017, the Board has undertaken a greater role in the currency program, including in research and development and quality
            assurance. This expanded role is reflected in the reclassification of certain transactions compared to prior years. The information
            presented pertains to Board operations only, which includes these new programs; expenditures for the currency program costs
            specific to the work performed by Treasury, including production, issuance and retirement, are not included. 
         
         The Dodd-Frank Act (P.L. 111â203), enacted July 21, 2010, directed the Board to collect assessments, fees, or other charges
            equal to the total expenses the Board estimates are necessary or appropriate to carry out the supervisory and regulatory responsibilities
            of the Board for certain bank holding companies and savings and loan holding companies, as well as nonbank financial companies
            designated for Board supervision by the Financial Stability Oversight Council (FSOC). The Board does not recognize the supervision
            and regulation assessments as revenue nor does the Board use the collections to fund Board expenses; the funds are transferred
            to the Treasury. The Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, P.L. 115â174), enacted May
            24, 2018, directed the Board to collect these assessments, fees, or other charges on such companies with total consolidated
            assets of $100 billion (from $50 billion in the Dodd-Frank Act), as well as to adjust amounts charged to reflect changes in
            supervisory and regulatory responsibilities resulting from EGRRCPA on firms with total consolidated assets less than $250
            billion.
         
      
      Object Classification (in millions of dollars)
      
         
            
               
                  
                     
                  
               
               
                  Identification code 920â4982â0â4â803
                  2018 actual
                  2019 est.
                  2020 est.
               
               
                  
                     
                  
               
               
                  
                  Reimbursable obligations:
               
               
                  11.1
                  Personnel compensation: Full-time permanent
                  456
                  483
                  487
               
               
                  12.1
                  Civilian personnel benefits
                  94
                  97
                  98
               
               
                  13.0
                  Benefits for former personnel
                  16
                  17
                  17
               
               
                  21.0
                  Travel and transportation of persons
                  16
                  16
                  17
               
               
                  22.0
                  Transportation of things
                  21
                  23
                  19
               
               
                  23.2
                  Rental payments to others
                  37
                  37
                  34
               
               
                  23.3
                  Communications, utilities, and miscellaneous charges
                  8
                  8
                  8
               
               
                  24.0
                  Printing and reproduction
                  
                  1
                  1
               
               
                  25.1
                  Advisory and assistance services
                  80
                  107
                  107
               
               
                  25.2
                  Other services from non-Federal sources
                  55
                  54
                  49
               
               
                  25.4
                  Operation and maintenance of facilities
                  3
                  3
                  3
               
               
                  25.7
                  Operation and maintenance of equipment
                  4
                  5
                  5
               
               
                  26.0
                  Supplies and materials
                  1
                  1
                  1
               
               
                  31.0
                  Equipment
                  25
                  27
                  27
               
               
                  
                  
                  
                     
                  
                  
                     
                  
                  
                     
                  
               
               
                  99.9
                  Total new obligations, unexpired accounts
                  816
                  879
                  873