The Federal Reserve System on Monday released the 2020 combined annual audited financial statements for the Federal Reserve Banks, as well as statements for the 12 individual Federal Reserve Banks, the Board of Governors, and five limited liability companies (LLC’s) that manage and operate some of the credit facilities established by the Board in response to the COVID-19 pandemic. An independent public accounting firm engaged by the Board has issued unqualified opinions on the financial statements and on the Board’s and each Bank’s internal controls over financial reporting. The audited financial statements provide information about the assets, liabilities, and earnings of the Reserve Banks, the Board, and the LLC’s as of December 31, 2020.
The Federal Reserve Banks’ 2020 earnings were approximately $88.6 billion, representing an increase of $33.1 billion from 2019. The Reserve Banks provided for remittances to the U.S. Treasury of $86.9 billion in 2020. Interest income on securities acquired through open market operations totaled $101.2 billion, a decrease of $1.6 billion from the previous year. Interest expense on depository institutions’ reserve balances during the year was $7.9 billion, a decrease of $27.1 billion from the previous year. Interest expense on securities sold under agreements to repurchase was $711.2 million, a decrease of $5.3 billion from the previous year. The Federal Reserve Banks realized net income of $275.0 million from the credit facilities established by the Board in response to the COVID-19 pandemic. Reserve Bank operating expenses were $7.9 billion, including assessments of $2.3 billion for Board expenses, currency costs, and the operations of the Bureau of Consumer Financial Protection.
Total Reserve Bank assets as of December 31, 2019, were approximately $7.4 trillion, an increase of $3.2 trillion from the previous year. Total Reserve Bank assets were composed primarily of $7.1 trillion of securities under agreements to resell, U.S. Treasury securities, and federal agency and government-sponsored enterprise mortgage-backed securities acquired through open market operations. The Federal Reserve Bank of New York provides additional detailed information about open market operations and securities holdings on an ongoing basis on its website at https://www.newyorkfed.org/markets/pomo_landing.html.
The Board engages KPMG LLP, an independent public accounting firm, to conduct annual audits of these financial statements in accordance with auditing standards issued by the American Institute of Certified Public Accountants, the Public Company Accounting Oversight Board, and, for the Board of Governors audit only, the Generally Accepted Government Auditing Standards. The public accounting firm also conducts audits of internal controls over financial reporting for the 12 individual Federal Reserve Banks and the Board of Governors.