FINANCING VEHICLES AND THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE 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. 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 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 2010 balance sheets for the Financing Corporation and Resolution Funding Corporation, which are as of September 30, 2010. 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 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. The Act provided formulas pursuant to which the Federal Home Loan Banks make 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 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 Federal Deposit Insurance Corporation's Deposit Insurance Fund. Balance Sheet(in millions of dollars)Identification code 99–4033–0–3–3732010 actual2011 actual
ASSETS:
Federal assets: Investments in US securities:
1102Segregated accounts investment, net4,5624,863
Other Federal assets:
1801Cash, cash equivalents207288
1901Other assets98
1999Total assets4,7785,159
LIABILITIES:
Non-Federal liabilities:
2202Interest payable156236
2203Debt8,1498,150
2207Other8080
2999Total liabilities8,3858,466
NET POSITION:
3100FICO capital stock purchased by FHLBanks680680
3300Cumulative results of operations3,8834,183
3300FSLIC capital certificates–8,170–8,170
3999Total net position–3,607–3,307
4999Total liabilities and net position4,7785,159
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 12 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 required that Federal Home Loan Banks (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. Balance Sheet(in millions of dollars)Identification code 99–4029–0–3–3732010 actual2011 actual
ASSETS:
Federal assets: Investments in US securities:
1102Principal fund account investment, net11,69112,391
1206Non-Federal assets: Assessments receivable for interest expense886888
1999Total assets12,57713,279
LIABILITIES:
Non-Federal liabilities:
2202Accrued interest payable on long-term obligations886888
2203Debt30,07330,071
2999Total liabilities30,95930,959
NET POSITION:
3100Nonvoting capital stock issued to FHLBanks2,5132,513
3300Cumulative results of operations9,33510,037
3300RTC nonredeemable capital certificates–31,286–31,286
3300Contributed capital - principal fund assessments1,0561,056
3999Total net position–18,382–17,680
4999Total liabilities and net position12,57713,279
Board of Governors of the Federal Reserve System 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 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.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 "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.Program and Financing(in millions of dollars)Identification code 99–4450–0–3–8032010 actual2011 est.2012 est.
Obligations by program activity:
0801Monetary and economic policy92107114
0802Federal Reserve System policy direction353934
0803Supervisory, regulatory, and legal services141157169
0804Support and security services148173194
0805Extraordinary items1111
0809Reimbursable program activities, subtotal427477512
0810Office of Inspector General operating expenses111821
0900Total new obligations438495533
Budgetary Resources:
Financing authority:
Spending authority from offsetting collections, mandatory:
1800Collected438495533
1850Spending auth from offsetting collections, mand (total)438495533
1930Total budgetary resources available438495533
Change in obligated balance:
3030Obligations incurred, unexpired accounts438495533
3040Financing disbursements (gross)–438–495–533
Financing authority and disbursements, net:
Mandatory:
4090Financing authority, gross438495533
4110Financing disbursements, gross438495533
Offsets against gross financing authority and disbursements:
Offsetting collections (collected) from:
4123Non-Federal sources–438–495–533
Object Classification(in millions of dollars)Identification code 99–4450–0–3–8032010 actual2011 est.2012 est.
Reimbursable obligations:
Personnel compensation:
11.1Full-time permanent264288302
11.3Other than full-time permanent333
11.5Other personnel compensation222
11.9Total personnel compensation269293307
12.1Civilian personnel benefits536059
13.0Benefits for former personnel477
21.0Travel and transportation of persons111414
22.0Transportation of things11
23.3Communications, utilities, and miscellaneous charges9912
24.0Printing and reproduction233
25.1Advisory and assistance services525261
25.2Other services from non-Federal sources131723
26.0Supplies and materials101415
31.0Equipment152531
99.9Total new obligations438495533