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REPORT TO CONGRESS
108th
Annual Report of the Board of
Governors of the Federal Reserve System
2021
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
REPORT TO CONGRESS
108th
Annual Report of the Board of
Governors of the Federal Reserve System
2021
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
iii
Contents
About the Federal Reserve ............................................................................................ v
1 Overview ....................................................................................................................... 1
2 Monetary Policy and Economic Developments ..................................................... 3
February 2022 Summary ................................................................................................... 3
July 2021 Summary .......................................................................................................... 9
3 Financial Stability ..................................................................................................... 15
Monitoring Financial Stability Vulnerabilities ...................................................................... 15
Domestic and International Cooperation and Coordination ................................................. 23
4 Supervision and Regulation .................................................................................... 27
Supervised and Regulated Institutions ............................................................................. 28
Supervisory Developments .............................................................................................. 31
Regulatory Developments ................................................................................................ 51
5 Payment System and Reserve Bank Oversight ................................................... 57
Payment Services to Depository and Other Institutions ...................................................... 58
Currency and Coin .......................................................................................................... 64
Fiscal Agency and Government Depository Services .......................................................... 66
Evolutions and Improvements to the System ..................................................................... 70
Oversight of Federal Reserve Banks ................................................................................. 73
Pro Forma Financial Statements for Federal Reserve Priced Services ................................. 79
6 Consumer and Community Affairs ......................................................................... 85
Consumer Compliance Supervision .................................................................................. 86
Consumer Laws and Regulations ..................................................................................... 97
Consumer Research and Analysis of Emerging Issues and Policy ........................................ 99
Community Development ............................................................................................... 103
Appendixes
A Federal Reserve System Organization ................................................................ 107
Board of Governors ....................................................................................................... 107
Federal Open Market Committee .................................................................................... 115
Board of Governors Advisory Councils ............................................................................ 117
Federal Reserve Banks and Branches ............................................................................ 121
B Minutes of Federal Open Market Committee Meetings .................................. 147
Meeting Minutes .......................................................................................................... 147
C Federal Reserve System Audits ........................................................................... 149
Office of Inspector General Activities .............................................................................. 149
Government Accountability Office Reviews ...................................................................... 151
D Federal Reserve System Budgets ....................................................................... 153
System Budgets Overview ............................................................................................. 153
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108th Annual Report | 2021
Board of Governors Budgets .......................................................................................... 157
Federal Reserve Banks Budgets .................................................................................... 164
Currency Budget ........................................................................................................... 170
E Record of Policy Actions of the Board of Governors ........................................ 177
Rules and Regulations .................................................................................................. 177
Policy Statements and Other Actions .............................................................................. 180
Discount Rates for Depository Institutions in 2021 ......................................................... 183
The Board of Governors and the Government Performance and Results Act ....................... 185
F Litigation .................................................................................................................. 187
Pending ....................................................................................................................... 187
Resolved ...................................................................................................................... 187
G Statistical Tables .................................................................................................... 189
v
About the Federal Reserve
The Federal Reserve was created by an act of Congress on December 23, 1913, to provide the
nation with a safer, more flexible, and more stable monetary and financial system. In establishing
the Federal Reserve System, the United States was divided geographically into 12 Districts, each
with a separately incorporated Reserve Bank.
For more information about the Federal Reserve Board and the Federal Reserve System, visit the
Board’s website at https://www.federalreserve.gov/aboutthefed/default.htm. Online versions of
the Board’s annual report are available at https://www.federalreserve.gov/publications/annualreport/default.htm.
1
1
Overview
This report covers the calendar-year 2021 operations and activities of the Federal Reserve, the
central bank of the United States (see figure 1.1), categorized in the five key functional areas:
• Conducting monetary policy and monitoring economic developments. Section 2 provides
adapted versions of the Board’s semiannual Monetary Policy Reports to Congress.
• Promoting financial system stability. Section 3 reviews Board and System activities and
research undertaken to foster a resilient and stable financial system.
• Supervising and regulating financial institutions and their activities. Section 4 summarizes
the Board’s efforts related to financial institution oversight and examinations, supervisory policymaking, and regulatory activities and enforcement.
• Fostering payment and settlement system safety and efficiency. Section 5 describes actions
by the Board and Reserve Banks to promote the effectiveness of the nation’s payment systems,
discusses initiatives to promote payment system safety, and provides data on Reserve Bank
services and income.
• Promoting consumer protection and community development. Section 6 provides information
on the Board’s efforts to promote a fair and transparent financial services market for con-
Figure 1.1. The Federal Reserve System’s unique structure ensures broad perspective
The Federal Reserve System consists of 12 Reserve Banks located in major cities throughout the United States, along
with a seven-member Board of Governors headquartered in Washington, D.C. See “Federal Reserve System Organization” in appendix A for more information on the Board and System leadership.
1
9
Minneapolis
12
7
10
San Francisco
Cleveland
Chicago
Alaska
Hawaii
Guam
New York
Philadelphia
(Board of Governors)
St. Louis
Richmond
8
5
6
Boston
Washington, D.C.
4
Kansas City
11
2
3
Atlanta
Dallas
Puerto Rico
Virgin Islands
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108th Annual Report | 2021
sumers, protect consumer rights, and ensure that Board policies and research take consumer
and community perspectives into account.
Additional information for calendar-year 2021 on Federal Reserve leadership, policy actions, budgets as well as historical data and supporting activities can be found in the appendixes:
• Appendix A lists key officials across the Federal Reserve System
• Appendix B provides links to the minutes for each of the eight regularly scheduled meetings of
the Federal Open Market Committee
• Appendix C contains information on the Federal Reserve’s audited financial statements as well
as reviews conducted by the Office of Inspector General and the Government Accountability Office
• Appendix D presents information on the budgets for the Board and Reserve Banks and on
currency-related costs
• Appendix E summarizes policy actions of the Board of Governors
• Appendix F lists litigation, both pending and resolved, that the Board of Governors was a
party in
• Appendix G includes statistical tables that provide updated historical data concerning Board and
System operations and activities
3
2
Monetary Policy and Economic
Developments
The Federal Reserve conducts the nation’s monetary policy to promote maximum employment,
stable prices, and moderate long-term interest rates in the U.S. economy. This section reviews
U.S. monetary policy and economic developments in 2021, with excerpts and select figures from
the Monetary Policy Report published in February 2022 and July 2021.1 The report, submitted
semiannually to the Congress, is delivered concurrently with testimony from the Federal Reserve
Board Chair.2
February 2022 Summary
U.S. economic activity posted further impressive gains in the second half of last year, but inflation
rose to its highest level since the early 1980s. The labor market tightened substantially further
amid high demand for workers and constrained supply, with the unemployment rate reaching the
median of Federal Open Market Committee (FOMC) participants’ estimates of its longer-run normal
level and nominal wages rising at their fastest pace in decades. With demand strong, and amid
ongoing supply chain bottlenecks and constrained labor supply, inflation increased appreciably last
year, running well above the FOMC’s longer-run objective of 2 percent and broadening out to a
wider range of items. As 2022 began, the rapid spread of the Omicron variant appeared to be
causing a slowdown in some sectors of the economy, but with Omicron cases having declined
sharply since mid-January, the slowdown is expected to be brief.
Over the second half of last year, the FOMC held its policy rate near zero to support the continued
economic recovery. The Committee began phasing out net asset purchases in November and
accelerated the pace of the phaseout in December; net asset purchases will end in early March.
With inflation well above the FOMC’s longer-run objective and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate.
Recent Economic and Financial Developments
Economic activity and the labor market. In the second half of 2021, gross domestic product
(GDP) growth slowed somewhat from its brisk first-half pace but nevertheless rose at a solid annu-
1
2
Those complete reports are available on the Board’s website at https://www.federalreserve.gov/monetarypolicy/files/
20220225_mprfullreport.pdf (February 2022) and https://www.federalreserve.gov/monetarypolicy/files/
20210709_mprfullreport.pdf (July 2021).
As required by section 2B of the Federal Reserve Act, the Federal Reserve Board submits written reports to the Congress
that contain discussions of “the conduct of monetary policy and economic developments and prospects for the future.”
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108th Annual Report | 2021
alized rate of 4.6 percent. Average monthly job
Figure 2.1. Nonfarm payroll employment
gains remained robust at 575,000 in the
Monthly
second half (figure 2.1). The unemployment
Millions of jobs
rate has plummeted almost 2 percentage
155
points since June and, at 4 percent in January,
150
has reached the median of FOMC partici-
145
2006
2010
2014
2018
140
pants’ estimates of its longer-run normal
135
level. Moreover, unemployment declines have
130
been widespread across demographic groups
125
(figure 2.2). That said, labor force participation only crept up last year and remains con-
2022
strained. The tight labor supply, in conjunction
Note: The data extend through January 2022.
with a continued surge in labor demand, has
Source: Bureau of Labor Statistics via Haver Analytics.
resulted in strong nominal wage growth, especially for low-wage workers. Supply bottlenecks
also continued to significantly limit activity
throughout the second half, while the Delta and Omicron waves led to notable, but apparently temporary, slowdowns in activity.
Figure 2.2. Unemployment rate, by race and ethnicity
Monthly
Percent
20
18
Black or African American
16
14
12
Hispanic or Latino
10
White
8
6
Asian
4
2
2006
2008
2010
2012
2014
2016
2018
2020
2022
Note: Unemployment rate measures total unemployed as a percentage of the labor force. Persons whose ethnicity is
identified as Hispanic or Latino may be of any race. Small sample sizes preclude reliable estimates for Native Americans and other groups for which monthly data are not reported by the Bureau of Labor Statistics. The data extend
through January 2022.
Source: Bureau of Labor Statistics via Haver Analytics.
Monetary Policy and Economic Developments
Inflation. The personal consumption expenditures (PCE) price index rose 5.8 percent over
Figure 2.3. Change in the price index for
personal consumption expenditures
the 12 months ending in December, and the
index that excludes food and energy items (so-
Monthly
Percent change from year earlier
called core inflation) was up 4.9 percent—the
highest readings for both measures in roughly
40 years (figure 2.3). Upward pressure on
inflation from prices of goods experiencing
both supply chain bottlenecks and strong
demand, such as motor vehicles and furniture,
Trimmed mean
Excluding food
and energy
Total
has persisted, and elevated inflation has
broadened out to a wider range of items. Services inflation has also stepped up further,
reflecting strong wage growth in some service
sectors and a significant increase in housing
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
.5
0
2014 2015 2016 2017 2018 2019 2020 2021
Note: The data extend through December 2021.
Source: For trimmed mean, Federal Reserve Bank of
Dallas; for all else, Bureau of Economic Analysis; all
via Haver Analytics.
rents. While measures of near-term inflation
expectations moved substantially higher over
the course of last year, measures of longerterm inflation expectations have moved up only modestly; they remain in the range observed over
the decade before the pandemic and thus appear broadly consistent with the FOMC’s longer-run
inflation objective of 2 percent.
Financial conditions. Yields on nominal Treasury securities across maturities increased notably
since mid-2021, with much of the increase having occurred in the past couple of months, as the
expected timing for the beginning of the removal of monetary policy accommodation has moved
forward significantly. Equity prices decreased slightly, on net, and corporate bond yields rose but
remain low, with stable corporate credit quality. Financing conditions for consumer credit continue
to be largely accommodative except for borrowers with low credit scores. Mortgage rates for
households remain low despite recent increases. Bank lending standards have eased across most
loan categories, and bank credit has expanded. All told, financing conditions have been accommodative for businesses and households.
Financial stability. While some financial vulnerabilities remain elevated, the large banks at the
core of the financial system continue to be resilient. Measures of valuation pressures on risky
assets remain high compared with historical values. Nonfinancial-sector leverage has broadly
declined, and credit growth in the household sector has been driven almost exclusively by residential mortgages and auto loans to prime-rated borrowers. Vulnerabilities from financial-sector
leverage are within their historical range, with relatively lower leverage at banks partially offset by
higher leverage at life insurers and hedge funds. Funding markets remain stable. Domestic banks
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108th Annual Report | 2021
continue to maintain significant levels of high-quality liquid assets, while assets under management at prime and tax-exempt money market funds have declined further since mid-2021. The Federal Reserve continues to evaluate the potential systemic risks posed by hedge funds and digital
assets and is closely monitoring the transition away from LIBOR. (See the box “Developments
Related to Financial Stability” on pages 34–35 of the February 2022 Monetary Policy Report.)
International developments. Foreign GDP has continued to recover briskly, on balance, despite
successive waves of the pandemic, which have been mirrored in slowdowns and rebounds in economic activity. This recovery has been supported by vaccination rates that have steadily increased
in both advanced foreign economies (AFEs) and emerging market economies (EMEs). Inflation rose
notably in many economies in the second half of last year, importantly boosted by higher energy
and other commodity prices as well as supply chain constraints. Several emerging market foreign
central banks and a few advanced-economy foreign central banks have raised policy rates, though
foreign monetary and fiscal policies have generally continued to be accommodative.
Foreign financial conditions have tightened modestly but are generally contained. In AFEs, sovereign yields have increased since the first half of last year on firming expectations for higher policy
rates. The change in financial conditions in EMEs has been relatively muted in the face of the shift
in monetary policy in some advanced economies. The trade-weighted value of the dollar appreciated modestly, on net, over the past six months. Recent geopolitical tensions related to the
Russia–Ukraine situation are a source of uncertainty in global financial and commodity markets.
Monetary Policy
Interest rate policy. The FOMC has continued to keep the target range for the federal funds rate
at 0 to ¼ percent since the previous Monetary Policy Report (figure 2.4). With inflation well above
the Committee’s 2 percent longer-run goal and a strong labor market, the Committee expects it
will soon be appropriate to raise the target range for the federal funds rate.
Balance sheet policy. From June 2020 until November 2021, the Federal Reserve expanded its
holdings of Treasury securities by $80 billion per month and its holdings of agency mortgagebacked securities by $40 billion per month. In December 2020, the Committee indicated that it
would continue to increase its holdings of securities at least at this pace until the economy had
made substantial further progress toward its maximum-employment and price-stability goals. Last
November, the Committee judged that this criterion had been achieved and began to reduce the
monthly pace of its net asset purchases. In December, in light of inflation developments and further improvements in the labor market, the Committee announced it would double the pace of
reductions in its monthly net asset purchases. At its January meeting, the FOMC decided to continue to reduce its net asset purchases at this accelerated pace, which will bring them to an end
in early March, and issued a statement of principles for its planned approach for significantly
Monetary Policy and Economic Developments
Figure 2.4. Selected interest rates
Daily
Percent
5
10-year Treasury rate
4
3
2
2-year Treasury rate
1
0
Target federal funds rate
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Note: The 2-year and 10-year Treasury rates are the constant-maturity yields based on the most actively traded securities. The data extend through February 22, 2022.
Source: Department of the Treasury; Federal Reserve Board.
reducing the size of the Federal Reserve’s balance sheet.3 A number of participants at the
meeting commented that conditions would likely warrant beginning to reduce the size of the balance sheet sometime later this year.4
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the
implications of incoming information for the economic outlook. The Committee is firmly committed
to its price-stability and maximum-employment goals and is prepared to use its tools to prevent
higher inflation from becoming entrenched while promoting a sustainable expansion and strong
labor market.
Special Topics
Low labor supply. Labor supply has been slow to rebound even as labor demand has been remarkably strong. The labor force participation rate remains well below estimates of its longer-run trend,
principally reflecting a wave of retirements among older individuals and increases in the number of
people out of the labor force and engaged in caregiving responsibilities. The ongoing pandemic
has also affected labor supply through fear of the virus or the need to quarantine. Moreover, savings buffers accumulated during the pandemic may have enabled some people to remain out of
the labor force. (See the box “The Limited Recovery of Labor Supply” on pages 8–9 of the February 2022 Monetary Policy Report.)
3
4
See the January 26, 2022, press release regarding the Principles for Reducing the Size of the Federal Reserve’s Balance
Sheet, available at https://www.federalreserve.gov/newsevents/pressreleases/monetary20220126c.htm.
The minutes for the January 2022 FOMC meeting note these comments and are available on the Federal Reserve’s website at https://www.federalreserve.gov/monetarypolicy/fomcminutes20220126.htm.
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108th Annual Report | 2021
Wage and employment growth across jobs and workers. Wage and employment gains were widespread across jobs and industries last year, with the lowest-wage jobs experiencing the largest
gains in both median wages and employment. Wage growth in the leisure and hospitality industry
accelerated sharply, which, together with a lagging employment rebound and high job openings,
suggests a lack of available workers in the industry. Median wages also increased across racial
and ethnic groups, leaving differences in wage levels across groups little changed relative to
2019. (See the box “Differences in Wage and Employment Growth across Jobs and Workers” on
pages 11–12 of the February 2022 Monetary Policy Report.)
Broadening of inflation. Higher PCE price inflation broadened out over the course of 2021, with
the share of products experiencing notable price increases moving appreciably higher. The broadening was evident in both goods and services, though most of last year’s very high inflation readings were concentrated in goods, a reflection of the strong demand and supply bottlenecks that
have particularly affected these items. (See the box “How Widespread Has the Rise in Inflation
Been?” on pages 15–17 of the February 2022 Monetary Policy Report.)
Supply bottlenecks. Supply chain bottlenecks have plagued the economy for much of the past
year. Against a backdrop of robust demand for goods, global distribution networks have been
strained, and domestic manufacturers have had trouble finding the materials and labor needed to
fill orders for their products. U.S. ports have been congested amid record volumes of shipping,
and delivery times for materials have remained elevated. Supply shortages of semiconductors
have been particularly acute and have weighed heavily on motor vehicle production and sales.
While there are some signs of improvement, general supply chain bottlenecks are not expected to
resolve for some time. (See the box “Supply Chain Bottlenecks in U.S. Manufacturing and Trade”
on pages 19–21 of the February 2022 Monetary Policy Report.)
Developments in the Federal Reserve’s balance sheet. The size of the Federal Reserve’s balance
sheet continued to grow, albeit at a slower rate given the reduced monthly pace of net asset purchases since November. However, reserve balances—the largest liability on the Federal Reserve’s
balance sheet—were little changed, on net, reflecting growth in nonreserve liabilities such as currency and overnight reverse repurchase agreements (ON RRP). The elevated level of reserves continued to put broad downward pressure on short-term interest rates, while the decline in Treasury
bill supply over 2021 has contributed to a shortage of short-term investments. Amid these developments, the ON RRP facility continued to serve its intended purpose of helping to provide a floor
under short-term interest rates and support effective implementation of monetary policy. (See the
box “Developments in the Federal Reserve’s Balance Sheet and Money Markets” on pages 44–45
of the February 2022 Monetary Policy Report.)
Monetary Policy and Economic Developments
July 2021 Summary
Over the first half of 2021, progress on vaccinations has led to a reopening of the economy and
strong economic growth, supported by accommodative monetary and fiscal policy. However, the
effects of the COVID-19 pandemic have continued to weigh on the U.S. economy, and employment
has remained well below pre-pandemic levels. Furthermore, shortages of material inputs and difficulties in hiring have held down activity in a number of industries. In part because of these bottlenecks and other largely transitory factors, personal consumption expenditures (PCE) prices rose
3.9 percent over the 12 months ending in May.
Over the first half of the year, the Federal Open Market Committee (FOMC) held its policy rate near
zero and continued to purchase Treasury securities and agency mortgage-backed securities to support the economic recovery. These measures, along with the Committee’s guidance on interest
rates and the Federal Reserve’s balance sheet, will help ensure that monetary policy continues to
deliver powerful support to the economy until the recovery is complete.
Recent Economic and Financial Developments
The labor market. The labor market continued to recover over the first six months of 2021. Job
gains averaged 540,000 per month, and the unemployment rate moved down from 6.7 percent in
December to 5.9 percent in June. Although labor market improvement has been rapid, the unemployment rate remained elevated in June, and labor force participation has not moved up from the
low rates that have prevailed for much of the past year. A surge in labor demand that has outpaced the recovery in labor supply has resulted in a jump in job vacancies and a step-up in wage
gains in recent months.
Inflation. Consumer price inflation, as measured by the 12-month change in the PCE price index,
moved up from 1.2 percent at the end of last year to 3.9 percent in May. The 12-month measure
of inflation that excludes food and energy items (so-called core inflation) was 3.4 percent in May,
up from 1.4 percent at the end of last year. Some of the strength in recent 12-month inflation
readings reflects the comparison of current prices with prices that sank at the onset of the pandemic as households curtailed spending—a transitory result of “base effects.” More lasting but
likely still temporary upward pressure on inflation has come from prices for goods experiencing
supply chain bottlenecks, such as motor vehicles and appliances. In addition, prices for some services, such as airfares and lodging, have moved up sharply in recent months toward more normal
levels as demand has recovered. Both survey-based and market-based measures of longer-term
inflation expectations have risen since the end of last year, largely reversing the downward drift in
those measures in recent years, and are in a range that is broadly consistent with the FOMC’s
longer-run inflation objective.
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108th Annual Report | 2021
Economic activity. In the first quarter, real gross domestic product (GDP) increased 6.4 percent,
propelled by a surge in household consumption and a solid increase in business investment but
restrained by a substantial drawdown in inventories as firms contended with production bottlenecks. Data for the second quarter suggest a further robust increase in demand. Against a backdrop of elevated household savings, accommodative financial conditions, ongoing fiscal support,
and the reopening of the economy, the strength in household spending has persisted, reflecting
continued strong spending on durable goods and solid progress toward more normal levels of
spending on services.
Financial conditions. Since mid-February, equity prices and yields on nominal Treasury securities
at longer maturities increased, as the rapid deployment of highly effective COVID-19 vaccines in
the United States and the support provided by fiscal policy boosted optimism regarding the economic outlook. Despite having increased since February, mortgage rates for households remain
near historical lows. Overall financing conditions for businesses and households eased further
since February, as market-based lending conditions remained accommodative and bank-lending
conditions eased markedly. Large firms, as well as those households that have solid credit ratings, continued to experience ample access to financing. However, financing conditions remained
tight for small businesses and households with low credit scores.
Financial stability. While some financial vulnerabilities have increased since the previous Monetary Policy Report, the institutions at the core of the financial system remain resilient. Asset valuations have generally risen across risky asset classes with improving fundamentals as well as
increased investor risk appetite, including in equity and corporate bond markets. Vulnerabilities
from both business and household debt have continued to decline in the first quarter of 2021,
reflecting a slower pace of business borrowing, an improvement in business earnings, and government programs that have supported business and household incomes. Even so, business-sector
debt outstanding remains high relative to income, and some businesses and households are still
under considerable strain. In the financial sector, leverage at banks and broker-dealers remains
low, while available measures of leverage at hedge funds increased into early 2021 and are high.
Issuance volumes of collateralized loan obligations and asset-backed securities recovered strongly
through the first quarter of 2021, while issuance of non-agency commercial mortgage-backed
securities was weak in that quarter. Funding risks at domestic banks continued to be low in the
first quarter, but structural vulnerabilities persist at some types of money market funds and bankloan and bond mutual funds. (See the box “Developments Related to Financial Stability” on
pages 30–32 of the July 2021 Monetary Policy Report.)
International developments. Foreign GDP growth moderated at the start of the year, as some
countries tightened public health restrictions to contain renewed COVID-19 outbreaks. Compared
with last spring, many foreign economies exhibited greater resilience to public-health-related
Monetary Policy and Economic Developments
restrictions, and their governments have continued to provide fiscal support. Recent indicators
suggest a pickup in activity in advanced foreign economies (AFEs) this spring following an increase
in vaccination rates and an easing of restrictions. However, conditions in emerging market economies (EMEs) are more mixed, in part dependent on their success in containing outbreaks and the
availability of vaccines. Inflation has been rising in many economies, as the price declines seen
last spring reversed and commodity prices ramped up. Monetary and fiscal policies continue to be
supportive, but some foreign central banks are adopting or signaling less-accommodative
policy stances.
Foreign financial conditions generally improved or held steady. Equity prices and longer-term sovereign yields increased across AFEs, boosted by their ongoing reopening. Equity markets in EMEs
were mixed, and flows into dedicated emerging market funds slowed. After trending lower since
the spring of 2020, the foreign exchange value of the dollar has changed little, on net, since the
start of the year.
Monetary Policy
Interest rate policy. To continue to support the economic recovery, the FOMC has kept the target
range for the federal funds rate near zero and has maintained the monthly pace of its asset purchases. The Committee expects it will be appropriate to maintain the current target range for the
federal funds rate until labor market conditions have reached levels consistent with its assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately
exceed that rate for some time.
Balance sheet policy. With the federal funds rate near zero, the Federal Reserve has also continued to undertake asset purchases, increasing its holdings of Treasury securities by $80 billion
per month and its holdings of agency mortgage-backed securities by $40 billion per month. These
purchases help foster smooth market functioning and accommodative financial conditions, thereby
supporting the flow of credit to households and businesses. The Committee expects these purchases to continue at least at this pace until substantial further progress has been made toward
its maximum-employment and price-stability goals. In coming meetings, the Committee will continue to assess the economy’s progress toward these goals since the Committee adopted its
asset purchase guidance last December.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the
implications of incoming information for the economic outlook. The Committee is prepared to
adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
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108th Annual Report | 2021
Special Topics
The uneven recovery in labor force participation. The labor force participation rate (LFPR) has
improved very little since early in the recovery and remains well below pre-pandemic levels. Relative to its February 2020 level, the LFPR remains especially low for individuals without a college
education, for individuals aged 55 and older, and for Hispanics and Latinos. Factors likely contributing both to the incomplete recovery of the LFPR and to differences across groups include a
surge in retirements, increased caregiving responsibilities, and individuals’ fear of contracting
COVID-19; expansions to the availability, duration, and level of unemployment insurance benefits
may also have supported individuals who withdrew from the labor force. Many of these factors
should have a diminishing effect on participation in the coming months as public health conditions
continue to improve and as expanded unemployment insurance expires. (See the box “The Uneven
Recovery in Labor Force Participation” on pages 8–10 of the July 2021 Monetary Policy Report.)
Recent inflation developments. Consumer price inflation has increased notably this spring as a
surge in demand has run up against production bottlenecks and hiring difficulties. As these
extraordinary circumstances pass, supply and demand should move closer to balance, and inflation is widely expected to move down. (See the box “Recent Inflation Developments” on
pages 13–14 of the July 2021 Monetary Policy Report.)
Supply chain bottlenecks in U.S. manufacturing and trade. Supply chain bottlenecks have hampered U.S. manufacturers’ ability to procure the inputs needed to meet the surge in demand that
followed widespread factory shutdowns during the first half of last year. Additionally, a massive
influx of goods has exceeded the capacity of U.S. ports, extending manufacturers’ wait times for
imported parts. The stress on supply chains is reflected in historically high order backlogs and historically low customer inventories; these stresses, together with strong demand, have led to
increased price pressures. When these bottlenecks will resolve is uncertain, as they reflect the
global supply chain as well as industry-specific factors, but for some goods, such as lumber, the
previous sharp increases in prices have begun to reverse. (See the box “Supply Chain Bottlenecks
in U.S. Manufacturing and Trade” on pages 15–17 of the July 2021 Monetary Policy Report.)
Inflation expectations. To avoid sustained periods of unusually low or high inflation, a fundamental aspect of the FOMC’s monetary policy framework is for longer-term inflation expectations
to be well anchored at the Committee’s 2 percent longer-run inflation objective. Even though the
pace of price increases has jumped in the first half of this year, recent readings on various measures of inflation expectations indicate that inflation is expected to return to levels broadly consistent with the FOMC’s 2 percent longer-run inflation objective after a period of temporarily higher
inflation. That said, upside risks to the inflation outlook in the near term have increased. (See the
box “Assessing the Recent Rise in Inflation Expectations” on pages 20–22 of the July 2021 Monetary Policy Report.)
Monetary Policy and Economic Developments
Monetary policy rules. Simple monetary policy rules, which relate a policy interest rate to a small
number of other economic variables, can provide useful guidance to policymakers. Many of the
rules have prescribed strongly negative values of the federal funds rate since the start of the
pandemic-driven recession. Because of the effective lower bound for the federal funds rate, the
Federal Reserve’s other monetary policy tools—namely, forward guidance and asset purchases—
have been critical for providing the necessary support to the economy through this challenging
period. (See the box “Monetary Policy Rules, the Effective Lower Bound, and the Economic
Recovery” on pages 42–45 of the July 2021 Monetary Policy Report.)
The Federal Reserve’s balance sheet. Since January, the growth in reserves, the drawdown of the
Treasury General Account, and the surge in usage of the overnight reverse repurchase agreement
(ON RRP) facility have significantly affected the composition of the Federal Reserve’s liabilities.
Against a backdrop of low short-term market interest rates and ample liquidity, the use of the ON
RRP facility has increased substantially since April and has reached a recent high of nearly
$1 trillion, compared with usage near zero in February. Factors contributing to this increase
included the decline in Treasury bill supply, downward pressure on money market rates, and the
recent technical adjustment to the Federal Reserve’s administered rates. (See the box “Developments in the Federal Reserve’s Balance Sheet and Money Markets” on pages 46–47 of the
July 2021 Monetary Policy Report.)
13
15
3
Financial Stability
The Federal Reserve monitors financial system risks and engages at home and abroad to help
ensure the system supports a healthy economy for U.S. households, communities, and businesses.
In pursuit of continued financial stability, the Federal Reserve monitors the potential buildup of risks
to financial stability; uses such analyses to inform Federal Reserve responses, including the
design of stress-test scenarios and decisions regarding other policy tools such as the countercyclical capital buffer; works with other domestic agencies directly and through the Financial Stability
Oversight Council (FSOC); and engages with the global community in monitoring, supervision, and
regulation that mitigate the risks and consequences of financial instability domestically and abroad.1
This section discusses key financial stability activities undertaken by the Federal Reserve over
2021, which include the following:
• monitoring vulnerabilities that affect financial stability (see figure 3.1 for a summary of key
vulnerabilities)
• promoting a perspective on the supervision and regulation of large, complex financial institutions that accounts for the potential spillovers from distress at such institutions to the financial
system and broader economy
• engaging in domestic and international cooperation and coordination
Some of these activities are also discussed elsewhere in this annual report. A broader set of economic and financial developments are discussed in section 2, “Monetary Policy and Economic
Developments,” with the discussion that follows concerning surveillance of economic and financial
developments focused on financial stability. The full range of activities associated with supervision
of systemically important financial institutions, designated nonbank companies, and designated
financial market utilities is discussed in section 4, “Supervision and Regulation.”
Monitoring Financial Stability Vulnerabilities
Financial institutions are linked together through a complex set of relationships, and their condition depends on the economic condition of the nonfinancial sector. In turn, the condition of the
nonfinancial sector hinges on the strength of financial institutions’ balance sheets, as the nonfinancial sector obtains funding through the financial sector. Monitoring risks to financial stability
1
For more information on how the Federal Reserve promotes a stable financial system, see The Fed Explained, available
on the Board’s website at https://www.federalreserve.gov/aboutthefed/files/the-fed-explained.pdf#page=50.
16
108th Annual Report | 2021
Figure 3.1. The Federal Reserve assesses four key vulnerabilities in monitoring financial stability
Each quarter, Federal Reserve Board staff assess a set of four vulnerabilities relevant for financial system stability.
These monitoring efforts promote financial stability by informing broader policy discussions and stimulating additional
research.
Asset valuations
Borrowing by businesses
and households
Leverage in the
financial sector
Funding risk
Why it matters:
Why it matters:
Why it matters:
Why it matters:
Excessive borrowing
by businesses and
households leaves
them vulnerable to
distress if their
incomes decline or
the assets they own
fall in value.
Excessive leverage
within the financial
sector increases the
risk that financial
institutions will not
have the ability to
absorb even modest
losses when hit by
adverse shocks.
Funding risks expose
the financial system
to the possibility
that investors will
“run” by quickly
withdrawing their
funds from a
particular institution
or sector.
Overvalued assets
are a vulnerability
because the
unwinding of high
prices can be
destabilizing.
is aimed at better understanding these complex linkages and has been an important part of Federal Reserve efforts in pursuit of overall economic stability.
A stable financial system, when hit by adverse events, or “shocks,” is able to continue meeting
demands for financial services from households and businesses, such as credit provision and payment services. By contrast, in an unstable system, these same shocks are likely to have much
larger effects, disrupting the flow of credit and leading to declines in employment and economic
activity.
Consistent with this view of financial stability, the Federal Reserve Board’s monitoring framework
distinguishes between shocks to and vulnerabilities of the financial system. Shocks, such as
sudden changes to financial or economic conditions, are inherently hard to predict. Vulnerabilities
tend to build up over time and are the aspects of the financial system that are most expected to
cause widespread problems in times of stress.
Accordingly, the Federal Reserve maintains a flexible, forward-looking financial stability monitoring
program focused on assessing how the level and configuration of those vulnerabilities affect the
financial system’s resilience to a wide range of potential adverse shocks.
Financial Stability
Each quarter, Federal Reserve Board staff assess a set of vulnerabilities relevant for financial stability, including but not limited to asset valuation pressures, borrowing by businesses and households, leverage in the financial sector, and funding risk. These monitoring efforts inform discussions concerning policies to promote financial stability, such as supervision and regulatory
policies, as well as monetary policy. They also inform Federal Reserve interactions with broader
monitoring efforts, such as those by the FSOC and the Financial Stability Board (FSB).
The Federal Reserve Board publishes its Financial Stability Report on a semiannual basis.2 The
report summarizes the Board’s framework for assessing the resilience of the U.S. financial system
and presents the Board’s current assessment of financial system vulnerabilities. It aims to promote public understanding about Federal Reserve views on this topic and thereby increase transparency and accountability. The report complements the annual report of the FSOC, which is
chaired by the Secretary of the Treasury and includes the Federal Reserve Chair and other financial regulators.
Asset Valuation Pressures
Overvalued assets are a vulnerability because the unwinding of high prices can be destabilizing,
especially if the assets are widely held and the values are supported by excessive leverage, maturity transformation, or risk opacity. Moreover, stretched asset valuations are likely to be an indicator of a broader buildup in risk-taking.
Nonetheless, it is very difficult to judge whether an asset price is overvalued relative to fundamentals. Accordingly, the Federal Reserve’s analysis of asset valuation pressures typically includes a
broad range of possible valuation metrics and tracks developments in areas in which asset prices
are rising particularly rapidly, unusually high or low price volatility, and investor flows.
Fiscal and monetary policy accommodation, along with continued progress on vaccinations, continued to support a strong economic recovery during 2021 despite still-elevated levels of uncertainty about the course of the pandemic. The robust expansion and bright outlook for 2022 supported investors’ risk appetite, and valuation measures during 2021 remained high relative to
historical norms across most asset classes.
Prices of long-term Treasury securities, corporate bonds, and leveraged loans stood at high levels
relative to their historical ranges, depressing yields. Spreads of corporate bond yields over
comparable-maturity Treasury yields narrowed, particularly for speculative-grade corporate bonds,
2
See Board of Governors of the Federal Reserve System (2021), Financial Stability Report (Washington: Board of Governors, May), https://www.federalreserve.gov/publications/files/financial-stability-report-20210506.pdf; and Board of
Governors of the Federal Reserve System (2021), Financial Stability Report (Washington: Board of Governors,
November), https://www.federalreserve.gov/publications/files/financial-stability-report-20211108.pdf.
17
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108th Annual Report | 2021
and reached very low levels relative to their
Figure 3.2. Corporate bond spreads to
similar-maturity Treasury securities,
1997–2021
historical distributions (figure 3.2). With economic growth expected to continue, equity
analysts boosted their forecasts for corporate
12
11
Percentage points
Percentage points
Monthly
10
24
earnings. However, equity prices also rose
22
steadily throughout the year, leaving a key indi-
20
Triple-B (left scale)
High yield (right scale)
18
cator of equity valuations, the ratio of equity
8
16
prices to expected earnings, little changed at
7
14
the upper end of its historical distribution
6
12
9
10
5
Dec.
(figure 3.3). Implied stock price volatility for
8
the S&P 500 index, captured by the VIX,
3
6
rebounded after a decline in the first half of
2
4
the year.
1
2
4
0
1997
2003
2009
2015
0
2021
Supported by low mortgage rates and strong
Note: The data extend through December 2021. The
triple-B series reflects the options-adjusted spread of
the ICE BofAML triple-B U.S. Corporate Index (C0A4),
and the high-yield series reflects the options-adjusted
spread of the ICE BofAML U.S. High Yield Index
(H0A0).
Source: ICE Data Indices, LLC, used with permission.
demand interacting with some supply constraints, house prices grew at a rapid clip
during 2021, outstripping increases in rents.
Since the beginning of 2020, housing inventories have declined, whereas the number of
active real estate buyers has increased signifi-
Figure 3.3. Aggregate forward price-to-earnings
ratio of S&P 500 firms, 1989–2021
cantly. Despite a slowdown at the end of the
year, house price growth still ended the year
near recent historical highs. Indicators sug-
Ratio
30
gest that higher house prices were not being
27
fueled by easier lending standards. Although
24
the maximum debt-to-income ratio for bor-
21
rowers with lower credit scores ticked up in
18
the second half of the year, lending standards
15
for these borrowers reportedly remained
12
tighter than before the pandemic.
Monthly
Dec.
Median
9
6
3
0
In 2021, aggregate commercial real estate
(CRE) prices rose further above their pre-
2021
pandemic levels. Multifamily and industrial
Note: The data extend through December 2021.
Based on expected earnings for 12 months ahead.
The median value is 15.4.
properties saw significant price increases,
Source: Federal Reserve Board staff calculations using
Refinitiv (formerly Thomson Reuters), Institutional Brokers Estimate System estimates.
not, with prices staying roughly flat. Transac-
1991
1996
2001 2006 2011
2016
whereas retail, hotel, and office properties did
tion volumes recovered, approaching pre-
Financial Stability
pandemic levels toward the end of 2021. Finally, farmland prices remained elevated relative
to rents.
Borrowing by Households and Businesses
Excessive borrowing by households and businesses has been an important contributor to past
financial crises. When highly indebted households and nonfinancial businesses are hit by negative
shocks to incomes or asset values, they may be forced to curtail spending, which could then
amplify the effects of financial shocks.
In turn, financial stress among households and businesses can lead to mounting losses at financial institutions, creating an adverse feedback loop in which weaknesses among households, nonfinancial businesses, and financial institutions cause further declines in income and accelerate
financial losses, potentially leading to financial instability and a sharp contraction in economic
activity.
Before the onset of the pandemic, the combined total debt of nonfinancial businesses
Figure 3.4. Private nonfinancial-sector
credit-to-GDP ratio, 1985–2021
and households had been growing roughly in
line with nominal gross domestic product
(GDP), leaving the credit-to-GDP ratio essen-
Ratio
Quarterly
2.0
tially flat from 2012 to 2019 (figure 3.4). In
1.7
the first half of 2020, substantial business
borrowing to build cash buffers and a precipi-
Q4
tous drop in GDP pushed the credit-to-GDP
1.4
ratio to historical highs. After that surge, the
ratio declined throughout the second half of
1.1
2020 and all of 2021, returning to about the
same level as in 2019.
1985
1991
1997
2003
2009
2015
2021
0.8
Separating the credit-to-GDP ratio into its business and household components yields some
additional insights. Household debt growth
picked up in 2021. Moreover, key measures of
vulnerabilities arising from business debt—
including debt-to-GDP, gross leverage, and
interest coverage ratios—have swung widely
in the past two years. As nominal GDP growth
outpaced the growth of business debt, the
ratio of business debt to GDP decreased
Note: The data extend through 2021:Q4. The shaded
bars indicate periods of business recession as
defined by the National Bureau of Economic Research:
July 1990 to March 1991, March 2001 to November
2001, December 2007 to June 2009, and February
2020 to April 2020. GDP is gross domestic product.
Source: Federal Reserve Board staff calculations
based on Bureau of Economic Analysis, national
income and product accounts, and Federal Reserve
Board, Statistical Release Z.1, “Financial Accounts of
the United States.”
19
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108th Annual Report | 2021
throughout 2021, retracing nearly all of its early pandemic growth. The decline in this ratio was
accompanied by a strong recovery in profits. The gross leverage of large businesses—the ratio of
debt to assets for all publicly traded nonfinancial firms—trended down throughout 2021 and
stands roughly at pre-pandemic levels.3 As earnings among large firms continued to recover and
borrowing rates remained low, the ratio of earnings to interest expenses (the interest coverage
ratio) moved up steadily over the year, suggesting large firms were better able to service debt. The
median interest coverage ratio among these firms rose above pre-pandemic levels and near historical highs.
Business credit quality, which deteriorated after the onset of the pandemic, has continued to
improve throughout 2021. For example, the rate of corporate bond downgrades remained low.
While many small businesses closed or significantly scaled back their operations as a result of
the pandemic, credit quality for small businesses that have continued operating or reopened stabilized during 2021, with loan delinquencies returning to pre-pandemic levels.
Although the financial position of some households remained strained, the household sector continued to recover in 2021, supported by pandemic stimulus programs, a growing economy, and
rising house prices. Household debt growth picked up in the second quarter and continued the
rest of the year. Debt owed by the roughly one-half of households with prime credit scores continued to account for all the growth, driven by increases in mortgage debt. However, the ratio of
household debt to nominal GDP continued to decline in 2021, as GDP growth outpaced the growth
in household debt.
Mortgage debt accounts for roughly two-thirds of total household debt, with new mortgage extensions skewed toward prime borrowers in recent years. The share of mortgages in forbearance
declined throughout the year and is down substantially from its peak in the second quarter of
2020.4 Most of the remaining one-third of household debt is consumer credit, which consists primarily of student loans, auto loans, and credit card debt. Auto loan balances remained stable, on
net, in 2021, driven primarily by borrowers with prime and near-prime credit scores. Student loan
balances contracted slightly in 2021, maintaining a trend started at the onset of the pandemic.
Protections originally in the Coronavirus Aid, Relief, and Economic Security Act—later extended by
the Department of Education—guaranteed payment forbearance and stopped interest accrual
through May 2022 for most federal student loans. Credit card balances remained well below their
pre-pandemic levels.
3
4
This pattern is common across most firm categories, with the exception of firms in industries hard-hit by the pandemic,
such as airlines, hotels, and restaurants, where leverage remains elevated.
Around 900,000 borrowers remain in forbearance plans, and about 60 percent of those are expected to exit forbearance by the end of February 2022.
Financial Stability
Leverage in the Financial System
The U.S. banking system continued to weather
Figure 3.5. Common equity Tier 1 ratio of
banks, 2001–21
the pandemic well in 2021 as bank capital
remained above pre-pandemic levels
Percent of risk-weighted assets
Quarterly
throughout the year. The common equity Tier 1
Q4
(CET1) ratio—a regulatory risk-based measure
14
12
10
of bank capital adequacy—increased at the
start of 2021 for most banks, exceeding pre-
8
pandemic levels (figure 3.5). CET1 ratios for
most banks slightly declined through the rest
of the year, as bank credit (and, thus, riskweighted assets) expanded and shareholder
6
G-SIBs
Large non–G-SIBs
Other BHCs
2
payouts increased. Bank profitability remained
at the upper end of its historical distribution in
4
2003 2006 2009 2012 2015 2018 2021
0
2021, driven by releases of loan loss reserves
associated with improvements in the economic outlook over the first half of the year.5
In June, the Federal Reserve released the
results of its annual bank stress tests.6 The
large banks that were tested remained well
above their risk-based minimum capital
requirements during a severe hypothetical
recession that included, among other features, substantial stress in U.S. CRE, housing,
and corporate debt markets. Restrictions on
Note: The data, which extend through 2021:Q4, are
seasonally adjusted by Federal Reserve Board staff.
Before 2014:Q1, the numerator of the common equity
Tier 1 ratio is Tier 1 common capital for advancedapproaches bank holding companies (BHCs) and intermediate holding companies (IHCs) (before 2015:Q1,
for non-advanced-approaches BHCs). Afterward, the
numerator is common equity Tier 1 capital. G-SIBs are
global systemically important U.S. banks. Large non–
G-SIBs are BHCs and IHCs with greater than $100 billion in total assets that are not G-SIBs. The denominator is risk-weighted assets. The shaded bars
indicate periods of business recession as defined
by the National Bureau of Economic Research:
March 2001 to November 2001, December 2007 to
June 2009, and February 2020 to April 2020.
Source: Federal Reserve Board, Form FR Y-9C, Consolidated Financial Statements for Holding Companies.
the capital distributions of banks put in place
during the pandemic ended on June 30, as
previously announced.7 In addition, bank regulatory capital requirements incorporated the new
2021 stress capital buffers on October 1. These stress capital buffers were computed based on
the June 2021 stress-test results.
5
6
7
Under accounting rules, banks prepare for possible loan losses before they occur. Loan loss provisions in the bank’s
income statement are expenses set aside for estimated credit losses and are added to the loan loss reserves. The
decline in loan loss reserves during the first half of 2021 was notable for most loan categories, with the exception of
CRE loans, consistent with elevated credit risk in some CRE segments.
See Board of Governors of the Federal Reserve System (2021), “Federal Reserve Board Releases Results of Annual
Bank Stress Tests, Which Show That Large Banks Continue to Have Strong Capital Levels and Could Continue Lending
to Households and Businesses during a Severe Recession,” press release, June 24, https://www.federalreserve.gov/
newsevents/pressreleases/bcreg20210624a.htm.
See Board of Governors of the Federal Reserve System (2021), “Federal Reserve Announces Temporary and Additional
Restrictions on Bank Holding Company Dividends and Share Repurchases Currently in Place Will End for Most Firms
after June 30, Based on Results from Upcoming Stress Test,” press release, March 25, https://www.federalreserve
.gov/newsevents/pressreleases/bcreg20210325a.htm.
21
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108th Annual Report | 2021
Outside the banking sector, leverage at large life insurance companies remained at post-2008
highs during the course of 2021. Based on a number of measures, leverage at hedge funds during
2021 stood above its historical average.
Funding Risk
High-quality liquid assets increased for U.S. global systemically important banks through most of
2021, reflecting an increase in Treasury securities, agency mortgage-backed securities (MBS), and
central bank reserve balances (figure 3.6). Core deposits, which traditionally are a highly stable
funding source, have remained near their highest levels as a share of liabilities since 1997. However, the share of nonoperational corporate deposits and uninsured retail deposits, which tend to
be less sticky and perhaps more sensitive to interest rate movements in a high-inflation environment, rose during the second half of 2021. A measure of the exposure of banks to interest rate
risk—calculated as the difference between the effective time to maturity, or next contractual
interest rate adjustment, for bank assets and liabilities—increased to historically high levels for all
banks by the end of the year. This increase
was due to a rise in holdings of long-term
Figure 3.6. Liquid assets held by banks,
2001–21
Treasury securities and agency MBS at banks
amid large deposit inflows. However, banks’
strong capital positions, high levels of liquid
Percent of assets!
32
assets, and high levels of historically stable
28
funding sources are mitigating factors to the
Quarterly!
G-SIBs
Large non–G-SIBs
Other BHCs
24
potential vulnerabilities from maturity transformation.
20
16
Many types of nonbank financial institutions,
however, experienced funding difficulties at
12
Q4!
the onset of the pandemic. For example,
8
prime money market funds (MMFs), particu-
4
larly institutional funds, experienced runs in
March 2020, with outflows reaching the same
2001
2005
2009
2013
2017
2021
0
Note: The data extend through 2021:Q4. Liquid
assets are cash plus estimates of securities that
qualify as high-quality liquid assets as defined by the
liquidity coverage ratio requirement. Accordingly, Level
1 assets as well as discounts and restrictions on
Level 2 assets are incorporated into the estimate.
G-SIBs are global systemically important U.S. banks.
Large non–G-SIBs are bank holding companies (BHCs)
and intermediate holding companies with greater than
$100 billion in total assets.
Source: Federal Reserve Board, Form FR Y-9C, Consolidated Financial Statements for Holding Companies.
proportion of assets redeemed during the run
on MMFs in 2008. Assets under management
at prime MMFs steadily declined through
2021, while those at tax-exempt MMFs stayed
relatively flat over the same period. Vulnerabilities associated with liquidity transformation at prime and tax-exempt MMFs contribute
to the susceptibility of these funds to runs
and call for structural fixes. In October 2021,
Financial Stability
the FSB published a report analyzing options to mitigate MMF vulnerabilities globally, including several potentially promising options—such as swing pricing or similar mechanisms, a minimum balance at risk, and capital buffers—many of which were considered in a report by the President’s
Working Group on Financial Markets that focused on U.S. MMFs in 2020.8
With regard to funding risk surrounding the payments system, there were two key developments.
First, central counterparties managed risks while adapting to persistent volatility and elevated
activity in some markets. Second, according to a variety of sources, the value of stablecoins outstanding grew roughly fivefold in 2021.9 Stablecoins are purported to maintain a stable value relative to a national currency or other reference asset or assets. Certain stablecoins, including the
most widely held, are supposed to be redeemable at any time at a stable value in U.S. dollars but
are, in part, backed by assets that may become illiquid. If the assets backing a stablecoin fall in
value, the issuer may not be able to meet redemptions at the promised value. Although not typically considered a cash management vehicle, stablecoins have structural vulnerabilities similar to
those of other cash-like vehicles that make them susceptible to runs. Accordingly, the potential
use of stablecoins in payments and their capacity to grow can also pose risks to payment and
financial systems.
Domestic and International Cooperation and Coordination
The Federal Reserve cooperated and coordinated with both domestic and international institutions
in 2021 to promote financial stability.
Financial Stability Oversight Council Activities
As mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the FSOC was
created in 2010. The FSOC is chaired by the Secretary of the Treasury and includes the Chair of
the Board of Governors of the Federal Reserve System as a member. It established an institutional framework for identifying and responding to the sources of systemic risk. Through collaborative participation in the FSOC, U.S. financial regulators monitor not only institutions but also the
financial system as a whole. The Federal Reserve, in conjunction with other participants, assists in
monitoring financial risks, analyzing the implications of those risks for financial stability, and identifying steps that can be taken to mitigate those risks. In addition, when an institution is designated
8
9
See Financial Stability Board (2021), Policy Proposals to Enhance Money Market Fund Resilience (Basel, Switzerland:
FSB, October), https://www.fsb.org/wp-content/uploads/P111021-2.pdf; and President’s Working Group on Financial
Markets (2020), Report of the President’s Working Group on Financial Markets: Overview of Recent Events and Potential
Reform Options for Money Market Funds (Washington: PWG, December), https://home.treasury.gov/system/files/136/
PWG-MMF-report-final-Dec-2020.pdf.
The value of stablecoins outstanding stood at around $130 billion as of October 2021, based on a November 2021
report. See President’s Working Group on Financial Markets, Federal Deposit Insurance Corporation, and Office of the
Comptroller of the Currency (2021), Report on Stablecoins (Washington: PWG, FDIC, and OCC, November), https://
home.treasury.gov/system/files/136/StableCoinReport_Nov1_508.pdf.
23
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108th Annual Report | 2021
by the FSOC as systemically important, the Federal Reserve assumes responsibility for supervising that institution.
In 2021, the FSOC continued to serve as a central venue for member agencies to coordinate risk
analysis and policy enactment in the wake of the COVID-19 pandemic. The council continued to
monitor the financial stability implications of the pandemic and identified three priority areas:
addressing vulnerabilities from nonbank financial intermediation (NBFI), promoting resilience in the
U.S. Treasury market, and enhancing the resilience of the financial system to climate-related financial risks.
In 2021, the council convened working groups on hedge funds and open-end funds to better share
data and identify risks associated with both kinds of nonbank financial institutions. In June, the
council also released a statement outlining how MMFs have the potential to create or amplify
stresses in short-term funding markets.10 The statement supported engagement by the Securities
and Exchange Commission (SEC) to develop options to address this critical issue.
Council member agencies on the Inter-Agency Working Group on Treasury Market Surveillance
(IAWG), including the Federal Reserve, in November issued a progress report reviewing policy
options to strengthen the resilience of U.S. Treasury markets.11 The IAWG’s staff briefed the
council on the report’s findings, and the 2021 FSOC Annual Report included a box on the IAWG’s
efforts to increase resilience in these essential markets.12
Additionally, the council released a report identifying climate change as an emerging and
increasing threat to financial stability in the United States. The Board’s staff collaborated with
other member agencies to draft the report and accompanying recommendations, which encourage
member agencies to build capacity and expertise to ensure that climate-related financial risks are
identified and managed.13
The report also called for the establishment of a new FSOC standing committee, the Climaterelated Financial Risk Committee. This committee will identify priority areas for climate-related
council work and serve as a coordinating body to share information and facilitate the development
of common approaches and standards across FSOC members and interested parties.
10
11
12
13
See Financial Stability Oversight Council (2021), “Financial Stability Oversight Council’s Statement on Money Market
Fund Reform,” statement, June 11, https://home.treasury.gov/system/files/261/FSOC_Statement_6-11-21.pdf.
See Inter-Agency Working Group on Treasury Market Surveillance (2021), “Inter-Agency Working Group on Treasury
Market Surveillance Releases Staff Progress Report That Reviews Potential Policies for Bolstering the Resilience of
Treasury Markets,” press release, November 8, https://home.treasury.gov/news/press-releases/jy0470.
See the box “IAWG Work on Treasury Market Resilience” in Financial Stability Oversight Council (2021), Annual Report
(Washington: FSOC, December), p. 35, https://home.treasury.gov/system/files/261/FSOC2021AnnualReport.pdf.
See Financial Stability Oversight Council (2021), “Financial Stability Oversight Council Identifies Climate Change as an
Emerging and Increasing Threat to Financial Stability,” press release, October 21, https://home.treasury.gov/news/
press-releases/jy0426.
Financial Stability
Financial Stability Board Activities
In light of the interconnected global financial system and the global activities of large U.S. financial institutions, the Federal Reserve participates in international bodies, such as the FSB. The
FSB monitors the global financial system and promotes international financial stability by coordinating with national financial authorities and international standard-setting bodies on information
exchanges and work focused on developing strong global financial-sector policies. The Federal
Reserve is a member of the FSB, along with the SEC and the U.S. Treasury. In late 2021, Governor
Quarles’s term as the Chair of the FSB expired. Governor Brainard has been appointed as Chair of
the FSB’s Standing Committee on the Assessment of Vulnerabilities for a term of two years.
In the past year, the FSB engaged in many issues related to global financial stability. Specific work
included monitoring the use and effectiveness of COVID-related policy response measures;
assessing challenges in cross-border payments systems; reviewing global trends and risks in
NBFI; assessing new sources of vulnerabilities and risks to financial stability; monitoring and
evaluating channels through which climate-related risks could affect financial stability; assessing
issues regarding the rapid emergence and use of stablecoins, crypto-asset markets, and other
digital assets; and transitioning away from the use of LIBOR.
25
27
4
Supervision and Regulation
The Federal Reserve promotes a safe, sound, and efficient banking and financial system that supports the growth and stability of the U.S. economy. The Federal Reserve carries out its supervisory
and regulatory responsibilities and supporting functions primarily by
• supervising the activities of financial institutions to ensure their safety and soundness
(see figure 4.1);
• developing regulatory policy (rulemakings,
supervision and regulation letters, policy
statements, and guidance) and acting on
applications filed by banking organizations; and
• monitoring trends in the banking sector by
Box 4.1. Banking Sector
Conditions
For information on banking sector conditions,
see the Supervision and Regulation Report,
which is submitted semiannually to the
Senate Committee on Banking, Housing, and
Urban Affairs and to the House Committee on
Financial Services. The reports are available
on the Board’s website at https://
www.federalreserve.gov/publications/
supervision-and-regulation-report.htm.
collecting and analyzing data (see box 4.1).
Figure 4.1. The Federal Reserve oversees a broad range of financial entities
Bank holding companies constitute the largest segment of institutions supervised by the Federal Reserve, but the Federal Reserve also supervises state member banks, savings and loan holding companies, foreign banks operating in the
United States, and other entities. See "Supervised and Regulated Institutions" in this section.
Bank holding
companies
(3,937)
State
member
banks
(705)
Savings and loan
holding companies (310)
Foreign banking organizations
operating in the U.S. (126)
State member banks’
foreign branches (46)
Edge Act and agreement
corporations¹ (32)
Designated financial
market utilities (8)
1. Edge Act and agreement corporations are subsidiaries of banks or bank holding companies, organized to allow international banking and financial business.
28
108th Annual Report | 2021
Supervised and Regulated Institutions
The Federal Reserve categorizes banking organizations into portfolios by size and entity type, as
described in table 4.1.
State Member Banks
At year-end 2021, a total of 1,450 banks (excluding non-depository trust companies and private
banks) were members of the Federal Reserve System, of which 705 were state chartered. Federal
Reserve System member banks operated 48,400 branches and accounted for 34 percent of all
commercial banks in the United States and 68 percent of all commercial banking offices. Statechartered commercial banks that are members of the Federal Reserve, commonly referred to as
state member banks, represented approximately 17 percent of all insured U.S. commercial banks
and held approximately 17 percent of all insured commercial bank assets in the United States.
Bank Holding Companies
At year-end 2021, a total of 3,937 U.S. bank holding companies (BHCs) were in operation, of
which 3,523 were top-tier BHCs. These organizations controlled 3,534 insured commercial banks
and held approximately 94 percent of all insured commercial bank assets in the United States.
Table 4.1. Summary of supervised institutions
Portfolio
Large Institution Supervision
Coordinating Committee (LISCC)
State member banks (SMBs)
Large and foreign banking
organizations (LFBOs)
Definition
Eight U.S. global systemically important banks (G-SIBs)
SMBs within LISCC organizations
Non-LISCC U.S. firms with total assets $100 billion and
greater and FBOs
Number of
institutions
8
4
173
Total assets
($ trillions)
14.6
1.1
10
Large banking organizations (LBOs)
Non-LISCC U.S. firms with total assets $100 billion and greater
17
4.8
Large FBOs (with IHC)
FBOs with combined U.S. assets $100 billion and greater
11
3.1
Large FBOs (without IHC)
FBOs with combined U.S. assets $100 billion and greater
Small FBOs (excluding rep offices)
FBOs with combined assets less than $100 billion
Small FBOs (rep offices)
FBO U.S. representative offices
30
State member banks
SMBs within LFBO organizations
9
1.4
Total assets between $10 billion and $100 billion
86
2.6
SMBs within RBO organizations
27
0.9
Regional banking organizations (RBOs)
State member banks
Community banking organizations (CBOs)
State member banks
Insurance and commercial savings
and loan holding companies (SLHCs)
Total assets less than $10 billion
SMBs within CBO organizations
SLHCs primarily engaged in insurance or commercial activities
* Includes 3,546 holding companies and 56 state member banks that do not have holding companies.
7
108
3,602*
665
6 insurance
4 commercial
1
1.1
0
3
0.6
0.9
Supervision and Regulation
BHCs that meet certain capital, managerial, and other requirements may elect to become financial
holding companies (FHCs). FHCs can generally engage in a broader range of financial activities
than other BHCs. As of year-end 2021, a total of 504 domestic BHCs and 45 foreign banking organizations had FHC status. Of the domestic FHCs, 23 had consolidated assets of $100 billion or
more; 56 between $10 billion and $100 billion; 193 between $1 billion and $10 billion; and 232
less than $1 billion.
Savings and Loan Holding Companies
At year-end 2021, a total of 310 savings and loan holding companies (SLHCs) were in operation,
of which 154 were top-tier SLHCs. These SLHCs controlled 163 depository institutions. Approximately 94 percent of SLHCs engage primarily in depository or broker dealer activities. These firms
hold approximately 53 percent ($997.5 billion) of the total combined assets of all SLHCs. The
Office of the Comptroller of the Currency (OCC) or the Federal Deposit Insurance Corporation
(FDIC) is the primary federal regulator for subsidiary savings associations of SLHCs. Some SLHCs
are engaged primarily in nonbanking activities, such as insurance underwriting (6 SLHCs), and
commercial activities (4 SLHCs). The 25 largest SLHCs accounted for more than $1.82 trillion of
total combined assets.
Depository institution holding companies significantly engaged in insurance activities. At
year-end 2021, the Federal Reserve supervised six companies that own depository institutions but
are significantly engaged in insurance activities. All six of these institutions were savings and loan
holding companies. As of September 30, 2021, they had approximately $800 billion in total
assets. Three of these firms have total assets greater than $100 billion, and for five of the six,
insured depository assets represent less than half of total assets.
As the consolidated supervisor of these insurance organizations, the Federal Reserve evaluates
an organization’s risk-management practices, the financial condition of the overall organization,
and the impact of the nonbank activities on the depository institution. The Federal Reserve relies
to the fullest extent possible on the work of other regulators, including other federal banking
regulators and state insurance regulators, as part of the overall supervisory assessment of
insurance SLHCs.
The Federal Reserve’s Insurance Policy Advisory Committee (IPAC) was established by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) to provide information,
advice, and recommendations on insurance issues.1 In 2021, the IPAC focused its advice on the
impacts of the COVID event and long-term low interest rates on the U.S. insurance sector. The
IPAC also provided input regarding the International Association of Insurance Supervisors’ (IAIS)
1
More information on the IPAC can be found at https://www.federalreserve.gov/aboutthefed/ipac.htm.
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108th Annual Report | 2021
development of an Insurance Capital Standard (ICS), an Aggregation Method (AM), and the criteria
that will be used to assess whether the ICS and AM provide comparable outcomes.
Financial Market Utilities
Financial market utilities (FMUs) manage or operate multilateral systems for the purpose of transferring, clearing, or settling payments, securities, or other financial transactions among financial
institutions or between financial institutions and the FMU. The Federal Reserve supervises FMUs
that are chartered as member banks or Edge Act corporations, and coordinates with other federal
banking supervisors to supervise FMUs considered bank service providers under the Bank Service
Company Act (BSCA).
In July 2012, the Financial Stability Oversight Council voted to designate eight FMUs as systemically important under title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act). As a result of these designations, the Board assumed an expanded set of
responsibilities related to these designated FMUs that includes promoting uniform riskmanagement standards, playing an enhanced role in the supervision of designated FMUs, reducing
systemic risk, and supporting the stability of the broader financial system. For certain designated
FMUs, the Board established risk-management standards and expectations that are articulated in
the Board’s Regulation HH.
In addition to setting minimum risk-management standards, Regulation HH establishes advance
notice requirements for proposed material changes to the rules, procedures, or operations of a
designated FMU for which the Board is the supervisory agency under title VIII. Finally, Regulation
HH also establishes minimum conditions and requirements for a Federal Reserve Bank to establish and maintain an account for, and provide services to, a designated FMU.2 Where the Board is
not the title VIII supervisory agency, the Federal Reserve works closely with the Securities and
Exchange Commission (SEC) and the Commodity Futures Trading Commission to promote robust
FMU risk management and monitor systemic risks across the designated FMUs.
International Activities
Foreign operations of U.S. banking organizations. At the end of 2021, a total of 26 member
banks were operating 298 branches in foreign countries and overseas areas of the United States.
Thirteen national banks were operating 240 of these branches, 13 state member banks were
operating 46 of these branches, and 5 nonmember banks were operating the remaining 12.
2
The Federal Reserve Banks maintain accounts for and provide services to several designated FMUs.
Supervision and Regulation
Edge Act and agreement corporations. At year-end 2021, out of 34 banking organizations chartered as Edge Act or agreement corporations, 3 operated 6 Edge Act and agreement branches.
These corporations are examined annually.
U.S. activities of foreign banks. As of year-end 2021, a total of 135 foreign banks from 48 countries operated 144 state-licensed branches and agencies, of which 6 were insured by the FDIC,
and 50 OCC-licensed branches and agencies, of which 4 were insured by the FDIC. These foreign
banks also owned 7 Edge Act and agreement corporations. In addition, they held a controlling
interest in 35 U.S. commercial banks. Altogether, the U.S. offices of these foreign banks controlled approximately 17 percent of U.S. commercial banking assets. These 135 foreign banks
also operated 70 representative offices; an additional 30 foreign banks operated in the United
States through a representative office.
The Federal Reserve conducted or participated with state and federal regulatory authorities in
552 examinations of foreign banks in 2021.
Supervisory Developments
Supervisory and Regulatory Initiatives
The Federal Reserve’s supervision activities include examinations and inspections to ensure that
financial institutions operate in a safe and sound manner and comply with laws and regulations.
These include an assessment of a financial institution’s risk-management systems, financial conditions, and compliance. The Federal Reserve tailors its supervisory approach based on the size
and complexity of firms. Supervisory oversight ranges from a continuous supervisory presence
with dedicated teams of examiners for large firms to regular point-in-time and targeted periodic
examinations for small, noncomplex firms.
At the start of the COVID event, the Federal Reserve temporarily modified its supervisory programs
and approaches to allow financial institutions to deploy their resources efficiently and focus on
supporting their customers and local economies while meeting challenges posed by the COVID
event. The Federal Reserve paused scheduled examinations or moved to monitoring activities. As
conditions in the industry stabilized, many of the temporary adjustments to supervisory programs
have ended and most supervisory approaches have returned to normal. All examination activities
were being conducted off site at year-end. As conditions allow, examination activities will return to
a mix of being conducted on site and off site. For additional information on the Federal Reserve’s
COVID response, see box 4.2.
In 2021, the Federal Reserve conducted 288 examinations of state member banks, 2,646 inspections of bank holding companies, and 135 inspections of savings and loan holding companies.
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Tables 4.2 and 4.3 provide information on
Box 4.2. Supervisory and
Regulatory Response to
COVID-19
examinations and inspections conducted by
the Federal Reserve during the past
five years.
In response to the COVID event, the Federal
Reserve took a number of supervisory and
regulatory actions. These actions were
intended to help financial institutions deploy
their resources as efficiently as possible
while continuing to support their customers
and local economies in a prudent and
fair manner.
Specialized Examinations
The Federal Reserve conducts specialized
examinations of supervised financial institutions in the areas of capital planning and
stress testing, information technology, fidu-
For more information on the Federal
Reserve’s response to the COVID event, see
the Supervision and Regulation Report, which
is submitted semiannually to the Senate
Committee on Banking, Housing, and Urban
Affairs and to the House Committee on Financial Services. The reports are available on
the Board’s website at https://
www.federalreserve.gov/publications/
supervision-and-regulation-report.htm, and
are delivered concurrently with testimony
from the Federal Reserve Board Vice Chair
for Supervision.
ciary activities, transfer agent activities, government and municipal securities dealing and
brokering, and cybersecurity and critical infrastructure. The Federal Reserve also conducts
specialized examinations of certain nonbank
entities that extend credit subject to the
Board’s margin regulations.
Capital Planning and Stress Testing
Since the 2007–09 financial crisis, the Federal Reserve has instituted supervisory stress
testing to strengthen capital positions of the
largest banking organizations. In March 2020, the Board integrated the supervisory stress test
with its non-stress capital requirements through the stress capital buffer to form one forwardlooking and risk-sensitive capital framework.
Table 4.2. Savings and loan holding companies, 2017–21
Entity/item
2021
2020
2019
2018
2017
Top-tier savings and loan holding companies
Assets of more than $1 billion
Total number
47
50
53
55
59
1,856
2,026
1,822
1,615
1,696
Number of inspections
63
55
52
40
52
By Federal Reserve System
63
55
52
40
52
107
119
134
139
164
Total assets (billions of dollars)
37
39
39
38
47
Number of inspections
78
91
102
107
165
By Federal Reserve System
78
91
102
107
165
Total assets (billions of dollars)
Assets of $1 billion or less
Total number
Supervision and Regulation
Table 4.3. State member banks and bank holding companies, 2017–21
Entity/item
2021
2020
2019
2018
2017
705
734
754
794
815
4,016
3,568
2,642
2,851
2,729
471
502
554
563
643
By Federal Reserve System
288
263
327
321
354
By state banking agency
183
239
227
242
289
State member banks
Total number
Total assets (billions of dollars)
Number of examinations
Top-tier bank holding companies
Assets of more than $1 billion
Total number
795
746
631
604
583
25,185
23,811
20,037
19,233
18,762
Number of inspections
996
875
805
549
597
By Federal Reserve System1
919
814
761
533
574
69
61
44
16
23
2,762
2,887
3,094
3,273
3,448
900
883
870
893
931
Number of inspections
1,801
1,967
2,122
2,216
2,318
By Federal Reserve System
1,727
1,890
2,033
2,132
2,252
74
77
89
84
66
504
502
493
490
492
45
44
44
44
42
Total assets (billions of dollars)
By state banking agency
Assets of $1 billion or less
Total number
Total assets (billions of dollars)
By state banking agency
Financial holding companies
Domestic
Foreign
1
For bank holding companies subject to continuous, risk-focused supervision, includes multiple targeted reviews.
Since the onset of the COVID event, the Federal Reserve has undertaken several stress tests. In
June 2021, the Federal Reserve conducted its annual stress test, which showed that the 23 large
banking firms tested had strong levels of capital and could continue lending to households and
businesses during a severe recession. As a result of firms remaining well above their minimum
risk-based capital requirements in that stress test, the additional restrictions on capital distributions the Board implemented to ensure firms would preserve capital during the COVID event
ended. Since then, the largest banking firms have remained subject to the normal restrictions of
the Board's stress capital buffer. For stress testing publications released in 2021, see box 4.3.
Information Technology Activities
Effective information technology (IT) and cybersecurity risk management is critical to the safety
and soundness of financial institutions and the stability of the financial system. The Board publishes rules and guidance for supervised institutions regarding IT, cybersecurity, operational resilience, and other related topics. These include policies aimed at reducing the risk of cybersecurity
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108th Annual Report | 2021
threats and strengthening operational resil-
Box 4.3. Stress Testing
Publications Released in
2021
iency of the financial system. As part of its
safety and soundness supervision, the Board
examines and monitors supervised institutions.
More details on the 2021 stress test scenarios are available at https://
www.federalreserve.gov/newsevents/
pressreleases/files/bcreg20210212a1.pdf.
During 2021, the Federal Reserve conducted
examinations of IT activities (inclusive of cyber
risk management activities) at financial insti-
More details on the 2021 stress test model
methodologies are available at https://
www.federalreserve.gov/publications/files/
2021-april-supervisory-stress-testmethodology.pdf.
tutions. Additionally, under the authority of the
BSCA, the Federal Reserve, FDIC, and OCC
(the federal banking agencies) examined and
assigned Uniform Rating System for Informa-
More details on the 2021 stress test results
are available at https://
www.federalreserve.gov/publications/files/
2021-dfast-results-20210624.pdf.
tion Technology ratings for technology service
providers that provide services for specific
regulated financial institutions.
More details on the stress capital buffer
requirements published in 2021 are available
at https://www.federalreserve.gov/
publications/large-bank-capital-requirements20210805.htm.
The Federal Reserve, together with the other
members of the Federal Financial Institutions
Examination Council (FFIEC), publishes interagency statements and guidance to assist
financial institution examiners with risk3
management assessments at supervised entities. In 2021, the Board published supervision and
regulation (SR) letter 21-11 notifying supervised institutions that the FFIEC issued the “FFIEC
Architecture, Infrastructure, and Operations Examination Handbook,” one of the booklets that compose the FFIEC Information Technology Examination Handbook.4 The booklet provides guidance to
examiners when assessing the risk profile and adequacy of an entity’s information technology
architecture, infrastructure, and operations.
Fiduciary Activities
In 2021, Federal Reserve examiners conducted 68 fiduciary examinations of state member banks
and non-depository trust companies.
Transfer Agents
During 2021, the Federal Reserve conducted transfer agent examinations at three state member
banks and one BHC that were registered as transfer agents.
3
4
The FFIEC is an interagency body of financial regulatory agencies established to prescribe uniform principles, standards,
and report forms and to promote uniformity in the supervision of financial institutions. The council has six voting members: the Board of Governors of the Federal Reserve System, the FDIC, the National Credit Union Administration (NCUA),
the OCC, the Consumer Financial Protection Bureau (CFPB), and the chair of the State Liaison Committee.
See https://www.federalreserve.gov/supervisionreg/srletters/SR2111.htm.
Supervision and Regulation
Government and Municipal Securities Dealers and Brokers
The Federal Reserve is responsible for examining state member banks and foreign banks for compliance with the Government Securities Act of 1986 and with Treasury regulations governing
dealing and brokering in government securities. During 2021, the Federal Reserve conducted eight
examinations of government securities activities at these organizations.
The Federal Reserve is also responsible for ensuring that state member banks and BHCs that act
as municipal securities dealers comply with the Securities Act Amendments of 1975. Municipal
securities dealers are examined, pursuant to the Municipal Securities Rulemaking Board’s rule
G-16, at least once every two calendar years. During 2021, the Federal Reserve examined four
entities that dealt in municipal securities.
Securities Credit Lenders
Under the Securities Exchange Act of 1934, the Board is responsible for regulating credit in certain transactions involving the purchasing or carrying of securities. As part of its general examination program, the Federal Reserve examines the banks under its jurisdiction for compliance with
the Board’s Regulation U. In addition, the Federal Reserve maintains a registry of persons other
than banks, brokers, and dealers who extend credit subject to Regulation U. Throughout the year,
Federal Reserve examiners conducted specialized examinations of these lenders if they are not
already subject to supervision by the Farm Credit Administration or the National Credit Union
Administration (NCUA).
Operational Resilience and Cybersecurity
The Federal Reserve collaborated with other financial regulators, the U.S. Department of the
Treasury, private industry, and international partners to promote effective safeguards against
operational and cyber threats to the financial services sector and to bolster the sector’s cyber
resiliency. Throughout the year, Federal Reserve examiners conducted targeted cybersecurity
assessments of the largest and most systemically important financial institutions, FMUs, and service providers. The Federal Reserve worked closely with the OCC and FDIC to coordinate examination procedures for the cybersecurity assessments of the largest, most systemically important
banking organizations and of service providers. Federal Reserve examiners also continued to conduct tailored cybersecurity assessments at community and regional banking organizations.
In 2021, the Board and the other federal banking agencies finalized a rule that requires banking
organizations to notify their regulator when a cybersecurity incident occurs and requires certain
bank service providers to notify their client banks when such an incident occurs. Prompt notification of a cyber incident will help banking organizations and the agencies to react quickly to cyber
threats.5 The Board and other FFIEC agencies issued guidance providing financial institutions with
5
See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211118a.htm.
35
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108th Annual Report | 2021
examples of effective authentication and access risk management principles and practices for
customers, employees, and third parties accessing digital banking services and information
systems.6
The Board, along with the other federal banking agencies, also proposed guidance for public comment on third{party risk management which is intended to help banking organizations manage
risks associated with third-party relationships, including relationships with financial technologyfocused entities.7
The Federal Reserve actively participated in interagency groups, such as the Financial and Banking
Information Infrastructure Committee (FBIIC), to share information and collaborate on cybersecurity
and critical infrastructure issues affecting the financial sector. In coordination with FBIIC members,
the Federal Reserve collaborated with government and industry stakeholders to promote the financial services sector’s ability to respond rapidly to and recover from significant cybersecurity incidents, thereby reducing the potential for such incidents to threaten the stability of the financial
system and the broader economy.
The Board leads or contributes to cybersecurity activities undertaken by groups, such as the Financial Stability Board (FSB), the Basel Committee on Banking Supervision (BCBS), the Committee on
Payment and Market Infrastructures (CPMI) (and its joint efforts with the International Organization
of Securities Commissions (IOSCO)), the International Association of Insurance Supervisors, and
the Group of Seven (G-7). In 2021, the Federal Reserve was actively involved in international policy
coordination to address cyber-related risks and efforts to bolster cyber resiliency as well as to
foster international standards in the financial services sector. The Board led the BCBS’s operational resilience group, which issued the Principles for Operational Resilience and the Principles
for the Sound Management of Operational Risk.8,9,10 The Federal Reserve also participated in
activities to support the G-7 members’ preparedness to coordinate communications in the event
of a significant cross-border cyber incident.
Enforcement Actions
The Federal Reserve has enforcement authority over the financial institutions it supervises and
their affiliated parties. Enforcement actions may be taken to address unsafe and unsound practices or violations of any law or regulation. Formal enforcement actions include cease and desist
6
7
8
9
10
See SR 21-14, “Authentication and Access to Financial Institution Services and Systems,” at https://
www.federalreserve.gov/supervisionreg/srletters/sr2114.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210713a.htm.
The BCBS acts as the primary global standard setter for the prudential regulation of banks and provides a forum for
cooperation on banking supervisory matters.
Basel Committee on Banking Supervision, Principles for Operational Resilience (Basel: Bank for International Settlements, March 2021), https://www.bis.org/bcbs/publ/d516.pdf.
Basel Committee on Banking Supervision, Revisions to the Principles for the Sound Management of Operational Risk
(Basel: Bank for International Settlements, March 2021), https://www.bis.org/bcbs/publ/d515.pdf.
Supervision and Regulation
orders, written agreements, prompt corrective action directives, removal and prohibition orders,
civil money penalties, and letters sent pursuant to 12 U.S.C. § 1829, known as Section 19 letters.
In 2021, the Federal Reserve completed 52 formal enforcement actions. Civil money penalties
totaling $396,700 were assessed. As directed by statute, all civil money penalties are remitted to
either the Treasury or the Federal Emergency Management Agency. The Reserve Banks completed
44 informal enforcement actions. Informal enforcement actions include memoranda of understanding, commitment letters, supervisory letters, and board of directors’ resolutions.
Enforcement orders and prompt corrective action directives, which are issued by the Board, and
written agreements, which are executed by the Reserve Banks, are made public and are posted on
the Board’s website (https://www.federalreserve.gov/apps/enforcementactions/search.aspx).
Other Laws and Regulation Enforcement Activity/Actions
The Federal Reserve’s enforcement responsibilities also extend to the disclosure of financial information by state member banks and the use of credit to purchase and carry securities.
Internal Appeals of Material Supervisory Determinations
The Board is committed to maintaining an independent, intra-agency process to review appeals of
material supervisory determinations (MSD) that complies with section 309 of the Riegle Community Development and Regulatory Improvement Act of 1994.11 The appeals process includes two
levels of review. A panel of Reserve Bank staff who are not employed by the Reserve Bank that
issued the appealed MSD conducts the initial review. This panel determines whether the appealed
MSD is consistent with applicable laws, regulations, and policy, and is supported by a preponderance of the evidence in the record. If the appealing institution is dissatisfied with the initial review
panel’s decision, the institution may request a final review of the MSD. A panel of senior Board
staff conduct the final review. The final review panel determines whether the decision of the initial
review panel is reasonable. Additional information is available regarding the Federal Reserve
Board’s appeals process (https://www.federalreserve.gov/supervisionreg/srletters/SR2028.htm)
and Ombudsman policy (https://www.federalreserve.gov/aboutthefed/ombpolicy.htm).
In 2021, the Board received one MSD appeal from a bank holding company that filed both an initial appeal and a request for final review. The Board also received one extension request to file an
MSD appeal from a bank holding company, which was resolved informally, with assistance by the
Ombudsman Office, prior to a request for an initial review being filed.
11
12 U.S.C. § 4806.
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Financial Disclosures by State Member Banks
Under the Securities Exchange Act of 1934 and the Federal Reserve’s Regulation H, certain state
member banks are required to make financial disclosures to the Federal Reserve using the same
reporting forms that are normally used by publicly held entities to submit information to the SEC.12
In 2021, two state member banks were required to submit data to the Federal Reserve. The information submitted by these two state member banks is available to the public upon request and is
primarily used for disclosure to the bank’s shareholders and public investors.
Assessments for Supervision and Regulation
BHCs and SLHCs with total consolidated assets of $100 billion or more, as well as any nonbank
financial companies designated by the Financial Stability Oversight Council for supervision by the
Board, are subject to assessments for the cost of the Board’s supervision and regulation. As a
collecting entity, 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 U.S. Treasury. The Board collected and transferred $617.4 million in 2021 for the 2020 supervision and regulation assessment.
Training and Technical Assistance
The Federal Reserve provides training and technical assistance to foreign supervisors and
minority-owned depository institutions and engages in industry outreach in connection with supervisory objectives.
Current Expected Credit Losses Implementation
The Financial Accounting Standards Board issued an accounting standard in 2016 that overhauls
the accounting for credit losses with a new impairment model based on the Current Expected
Credit Losses (CECL) methodology. Approximately 200 banking organizations adopted the CECL
methodology in 2020. Remaining banking organizations will adopt throughout 2023. CECL’s implementation affects a broad range of supervisory activities, including regulatory reports, examinations, and examiner training.
In 2021, the Federal Reserve released a tool to help community banks implement the CECL
accounting standard. Known as the Scaled CECL Allowance for Losses Estimator or “SCALE,” the
12
Under section 12(g) of the Securities Exchange Act, certain companies that have issued securities are subject to SEC
registration and filing requirements that are similar to those that apply to public companies. Per section 12(i) of the
Securities Exchange Act, the powers of the SEC over banking entities that fall under section 12(g) are vested with the
appropriate banking regulator. Specifically, state member banks with 2,000 or more shareholders and more than
$10 million in total assets are required to register with, and submit data to, the Federal Reserve. For more information
on the Board’s Regulation H policy action, see Appendix E, “Record of Policy Actions.”
Supervision and Regulation
spreadsheet-based tool draws on publicly available regulatory and industry data to aid community
banks with assets of less than $1 billion in calculating their CECL allowances.
International Training and Technical Assistance
In 2021, the Federal Reserve continued to provide training and technical assistance on supervisory matters to foreign central banks and supervisory authorities. Due to the COVID event, training
and technical assistance was exclusively offered virtually for the benefit of foreign supervisory
authorities. Approximately 4,300 bank supervisors from foreign central banks and supervisory
agencies attended these virtual training events during 2021.
Federal Reserve staff also took part in organizing two virtual training events offered in collaboration with the International Monetary Fund and the World Bank. Other training partners that collaborated with the Federal Reserve during 2021 to organize 25 regional virtual training events included
the South East Asian Central Banks Research and Training Centre, the Association of Bank Supervisors of the Americas, the South African Reserve Bank, and the National Banking and Securities
Commission of Mexico.
Efforts to Support Minority-Owned Depository Institutions
The Federal Reserve System implements its responsibilities under section 367 of the Dodd-Frank
Act primarily through its Partnership for Progress (PFP) program.13 Established in 2008, this program promotes the viability of minority depository institutions (MDIs) by facilitating activities
designed to strengthen their business strategies, maximize their resources, and increase their
awareness and understanding of supervisory expectations. The Federal Reserve has also taken
MDIs into consideration when developing crisis response facilities. For example, Federal Reserve
staff reached out to MDIs to learn more about the impact of the COVID event on the communities
they serve as well as to gather input on how crisis response facilities could be most helpful to
these institutions and their customers.
In addition, the Federal Reserve continues to maintain the PFP website, which supports MDIs by
providing them with technical information and links to useful resources (https://
www.fedpartnership.gov). Representatives from each of the 12 Federal Reserve Districts, along
with staff from the Divisions of Supervision & Regulation and Consumer & Community Affairs at
the Board of Governors, continue to offer technical assistance tailored to MDIs by providing targeted supervisory guidance, identifying additional resources, and fostering mutually beneficial partnerships between MDIs and community organizations. As of year-end 2021, the Federal Reserve’s
MDI portfolio consisted of 14 state member banks.
13
Section 367 of the Dodd-Frank Act requires the Board to submit an annual report to the Congress detailing the actions
taken to fulfill the requirements outlined in section 308 of the Financial Institutions Reform, Recovery, and Enforcement
Act (FIRREA) of 1989, as amended by the Dodd-Frank Act in 2010 (see appendix A). In addition to the annual reporting
requirement, FIRREA section 308 requires the Federal Reserve System to devote efforts toward preserving and promoting minority ownership of MDIs.
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108th Annual Report | 2021
Throughout 2021, the System supported MDIs and conducted a number of outreach initiatives,
webinars, and conferences specific to MDIs, including the following:
• Emergency Capital Investment Program (ECIP): On March 4, 2021, the Treasury launched the
Emergency Capital Investment Program, which will provide up to $9 billion in capital directly to
MDIs and community development financial institutions (CDFIs).
– Staff at the banking agencies and the Treasury established a process for consultation and
information sharing regarding applicants to the ECIP program.
• Federal Reserve System Guidance issued: In March 2021, the Board published new guidance,
SR letter 21-6/CA 21-4, “Highlighting the Federal Reserve System's Partnership for Progress
Program for Minority Depository Institutions and Women's Depository Institutions.” The SR letter
clarifies guidance as it relates to the Federal Reserve System’s definition for MDIs, defines
women-owned depository institutions, and highlights resources available to these institutions
through the PFP.
• In April 2021, the federal banking agencies released a Regulatory Capital Guide for Minority
Depository Institutions and Community Development Financial Institution Banking Organizations
to provide MDIs and CDFIs with an overview of key considerations regarding the effect of capital
investments on their regulatory capital requirements under the agencies’ regulatory capital rule.
• On May 24, 2021, the Federal Reserve jointly hosted an “Ask the Regulator” session with the
Treasury, FDIC, OCC, and the NCUA. Collectively, the agencies regulate all eligible ECIP banking
organizations, and were all available to answer questions from potential participants about the
program.
• The Board, OCC, and FDIC released an accompanying interim final rule to help implement the
ECIP program by providing a regulatory capital treatment for instruments issued under the program. The Board is reviewing comments received on the interim final rule and considering policy
options that would better enable MDIs and CDFIs to attract and deploy capital as intended
under ECIP.
• Board staff also issued a set of frequently asked questions on the PFP website to clarify certain
aspects of the interim capital rule.
• Additional outreach: The federal banking agencies hosted a webinar to explain the FDIC’s Capital
Estimator Tool for Mission-Driven Banks, which is on the Federal Reserve’s PFP website, and to
answer questions from the industry.
• Throughout 2021, PFP staff discussed formation of de novo banks with a number of different
investor groups.
• In September 2021, the federal banking agencies hosted an interagency Minority Depository
Institutions and Community Development Financial Institutions conference. This conference
included remarks by Federal Reserve Chair Jerome Powell, Treasury Secretary Janet Yellen, and
Acting Comptroller Michael Hsu.
Supervision and Regulation
International Engagement
As a member of the Financial Stability Board and several international financial standard-setting
bodies, the Federal Reserve actively participates in efforts to share information and advance
sound supervisory policies for internationally active financial organizations and to enhance the
strength, stability, and resilience of the international financial system.
Basel Committee on Banking Supervision
During 2021, the Federal Reserve contributed to supervisory policy recommendations, reports,
and papers issued for consultative purposes or finalized by the Basel Committee on Banking
Supervision (BCBS) that are designed to improve the supervision of banking organizations’ practices and to address specific issues that emerged during the 2007–09 financial crisis and, more
recently, the COVID event.14 In 2021, significant activity at the BCBS was focused on COVIDrelated issues, including monitoring related risks and vulnerabilities of the global banking system.
In addition, the BCBS completed a strategic re-organization intended to allow the organization to
become more forward-looking and to spend more time on emerging risks and vulnerabilities and
less on developing new standards.
Some examples of final BCBS documents issued in 2021 include
• Revisions to Market Risk Disclosure Requirements (issued in November and available at https://
www.bis.org/bcbs/publ/d529.htm)
• G-SIB Assessment Methodology Review Process – Technical AmendmentFinalization (issued in
November and available at https://www.bis.org/bcbs/publ/d527.htm)
• Progress Report on Adoption of the Basel Regulatory Framework (issued in October and available
at https://www.bis.org/bcbs/publ/d525.htm)
• Early Lessons from the COVID-19 Pandemic on the Basel Reforms (issued in July and available at
https://www.bis.org/bcbs/publ/d521.htm)
• The Procyclicality of Loan Loss Provisions: A Literature Review (issued in May and available at
https://www.bis.org/bcbs/publ/wp39.htm)
• Climate-Related Financial Risks – Measurement Methodologies (issued in April and available at
https://www.bis.org/bcbs/publ/d518.htm)
• Climate-Related Risk Drivers and Their Transmission Channels (issued in April and available at
https://www.bis.org/bcbs/publ/d517.htm)
• Principles for Operational Resilience (issued in March and available at https://www.bis.org/
bcbs/publ/d516.htm)
14
The BCBS provides a forum for regular cooperation on banking supervisory matters. Its 45 members comprise central
banks and bank supervisors from 28 jurisdictions.
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108th Annual Report | 2021
• Revisions to the Principles for the Sound Management of Operational Risk (issued in March and
available at https://www.bis.org/bcbs/publ/d515.htm)
Some examples of consultative BCBS documents issued in 2021 include
• Principles for the Effective Management and Supervision of Climate-Related Financial Risks
(issued in November and available at https://www.bis.org/bcbs/publ/d530.htm)
• Review of Margining Practices (issued in October and available at https://www.bis.org/bcbs/
publ/d526.htm)
• G-SIB Assessment Methodology Review Process (issued in July and available at https://
www.bis.org/bcbs/publ/d522.htm)
• Prudential Treatment of Cryptoasset Exposures (issued in June and available at https://
www.bis.org/bcbs/publ/d519.htm)
• Minimum Haircut Floors for Securities Financing Transactions (issued in January and available at
https://www.bis.org/bcbs/publ/d514.htm)
A comprehensive list of BCBS publications is available at https://www.bis.org/bcbs/
publications.htm.
Financial Stability Board
In 2021, the Federal Reserve continued its participation in a variety of activities of the FSB, an
organization whose mission is to promote international financial stability. The FSB helps coordinate the work of national financial authorities and international standard-setting bodies, and
shares information on supervisory and regulatory practice. As with the Basel Committee, a significant amount of FSB work in 2021 related to monitoring vulnerabilities and sharing information on
COVID event-related developments. The full range of the Federal Reserve’s Financial Stability
Board activities is discussed in section 3, “Financial Stability.”
The FSB also produces a variety of publications, including progress reports, monitoring reports,
guidance, consultative documents, and compendia of better practice. Recent examples include
• Global Monitoring Report on Non-Bank Financial Intermediation 2021 (issued in December and
available at https://www.fsb.org/2021/12/global-monitoring-report-on-non-bank-financialintermediation-2021/)
• 2021 Resolution Report: “Glass half-full or still half-empty?” (issued in December and available at
https://www.fsb.org/2021/12/2021-resolution-report-glass-half-full-or-still-half-empty/)
• Enhancing the Resilience of Non-Bank Financial Intermediation: Progress Report (issued in
November and available at https://www.fsb.org/2021/11/enhancing-the-resilience-of-non-bankfinancial-intermediation-progress-report/)
Supervision and Regulation
• Lessons Learnt from the COVID-19 Pandemic from a Financial Stability Perspective: Final Report
(issued in October and available at https://www.fsb.org/2021/10/lessons-learnt-from-thecovid-19-pandemic-from-a-financial-stability-perspective-final-report/)
• Cyber Incident Reporting: Existing Approaches and Next Steps for Broader Convergence (issued in
October and available at https://www.fsb.org/2021/10/cyber-incident-reporting-existingapproaches-and-next-steps-for-broader-convergence/)
• G20 Roadmap for Enhancing Cross-Border Payments: First Consolidated Progress Report (issued
in October and available at https://www.fsb.org/2021/10/g20-roadmap-for-enhancing-crossborder-payments-first-consolidated-progress-report/)
• Policy Proposals to Enhance Money Market Fund Resilience: Final Report (issued in October and
available at https://www.fsb.org/2021/10/policy-proposals-to-enhance-money-market-fundresilience-final-report/)
• Regulation, Supervision, and Oversight of “Global Stablecoin” Arrangements: Progress Report on
the Implementation of the FSB High-Level Recommendations (issued in October and available at
https://www.fsb.org/2021/10/regulation-supervision-and-oversight-of-global-stablecoinarrangements-progress-report-on-the-implementation-of-the-fsb-high-level-recommendations/)
• FSB Roadmap for Addressing Climate-Related Financial Risks (issued in July and available at
https://www.fsb.org/2021/07/fsb-roadmap-for-addressing-climate-related-financial-risks/)
• Report on Promoting Climate-Related Disclosures (issued in July and available at https://
www.fsb.org/2021/07/report-on-promoting-climate-related-disclosures/)
• Progress Report to the G20 on LIBOR Transition Issues: Recent Developments, Supervisory Issues
and Next Steps (issued in July and available at https://www.fsb.org/2021/07/progress-reportto-the-g20-on-libor-transition-issues-recent-developments-supervisory-issues-and-next-steps/)
• Outsourcing and Third-Party Risk – Overview of Responses to the Public Consultation (issued in
June and available at https://www.fsb.org/2021/06/outsourcing-and-third-party-risk-overview-ofresponses-to-the-public-consultation/)
• COVID-19 Support Measures: Extending, Amending and Ending (issued in April and available at
https://www.fsb.org/2021/04/covid-19-support-measures-extending-amending-and-ending/)
• Evaluation of the Effects of Too-Big-to-Fail Reforms: Final Report (issued in March and available at
https://www.fsb.org/2021/03/evaluation-of-the-effects-of-too-big-to-fail-reforms-final-report/)
A comprehensive list of FSB publications is available at https://www.fsb.org/publications.
Committee on Payments and Market Infrastructures
In 2021, the Federal Reserve continued its active participation in the activities of the CPMI, a
forum in which central banks promote the safety and efficiency of payment, clearing and settlement activities, and related arrangements.
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108th Annual Report | 2021
The CPMI continued to coordinate with the FSB to advance the G-20 priority to enhance global
cross-border payments. In particular, the CPMI completed fact-finding and analytical exercises for
several building blocks as set out in the FSB roadmap.
In addition, in conducting its work on financial market infrastructure and market-related reforms,
the CPMI often coordinated with the IOSCO. Over the course of 2021, CPMI-IOSCO advanced work
on central bank digital currencies, stablecoin arrangements, client clearing at central counterparties, and fast payments. In addition, CPMI-IOSCO continued to monitor implementation of the Principles for Financial Market Infrastructures.
Some examples of 2021 CPMI publications include
• Central Bank Digital Currencies for Cross-Border Payments (published by CPMI, BIS Innovation
Hub, IMF, and the World Bank in July and available at https://www.bis.org/publ/othp38.pdf)
• Application of the Principles for Financial Market Infrastructures to Stablecoin Arrangements—
Consultative Report (published by CPMI-IOSCO in October and available at https://www.bis.org/
cpmi/publ/d198.pdf)
• Review of Margining Practices—Consultative Report (published by CPMI-IOSCO and BCBS in
October and available at https://www.bis.org/bcbs/publ/d526.pdf)
• A Discussion Paper on Client Clearing: Access and Portability (published by CPMI-IOSCO in
November and available at https://www.bis.org/cpmi/publ/d200.pdf)
• Developments in Retail Fast Payments and Implications for RTGS Systems (published in
December and available at https://www.bis.org/cpmi/publ/d201.pdf)
A comprehensive list of CPMI publications is available at https://www.bis.org/cpmi_publs/.
International Association of Insurance Supervisors
The Federal Reserve continued its participation in 2021 in the development of international supervisory standards for the insurance industry. The Federal Reserve participates actively in standardsetting at the IAIS in consultation and collaboration with state insurance regulators, the National
Association of Insurance Commissioners, and the Federal Insurance Office. The Federal Reserve’s
participation focuses on those aspects most relevant to financial stability and consolidated
supervision.
In 2021, the IAIS made progress on several initiatives while continuing to work remotely. The IAIS
finalized the high-level principles that will inform the criteria for assessing whether the Aggregation
Method provides comparable outcomes to the Insurance Capital Standard. The IAIS previously consulted on this subject in 2020. The IAIS also implemented the Holistic Framework for Systemic
Risk in the Insurance Sector. This implementation was planned for 2020 but was partially delayed
Supervision and Regulation
by the pandemic. The IAIS additionally continued its work on climate risk, including by forming a
new high-level steering group to oversee its work in this area.
The IAIS issued several final and consultative reports in 2021.
Papers and reports:
• Redefining Insurance Supervision for the New Normal (co-authored by the Financial Stability Institute of the Bank for International Settlements) (issued in April and available at https://
www.iaisweb.org/uploads/2022/01/210409-IAIS-FSI-Note-on-redefining-insurance-supervisionfor-the-new-normal.pdf)
• Application Paper on the Supervision of Climate-related Risks in the Insurance Sector (issued in
May and available at https://www.iaisweb.org/uploads/2022/01/210525-Application-Paper-onthe-Supervision-of-Climate-related-Risks-in-the-Insurance-Sector.pdf)
• Application Paper on Resolution Powers and Planning (issued in June and available at https://
www.iaisweb.org/uploads/2022/01/210623-Application-Paper-on-Resolution-Powers-andPlanning.pdf)
• Application Paper on Supervision of Control Functions (issued in June and available at https://
www.iaisweb.org/uploads/2022/01/210623-Application-Paper-on-Supervision-of-ControlFunctions1.pdf)
• Application Paper on Macroprudential Supervision (issued in August and available at https://
www.iaisweb.org/uploads/2022/01/210830-Application-Paper-on-MacroprudentialSupervision.pdf)
• Application Paper on Supervisory Colleges (issued in November and available at https://
www.iaisweb.org/uploads/2022/01/211111-Application-Paper-on-Supervisory-Colleges.pdf)
• Application Paper on Combating Money Laundering and Terrorist Financing (issued in November
and available at https://www.iaisweb.org/uploads/2022/01/211111-Application-Paper-onCombating-Money-Laundering-and-Terrorist-Financing.pdf)
• Issues Paper on Insurer Culture (issued in November and available at https://www.iaisweb.org/
uploads/2022/01/211111-Issues-Paper-on-Insurer-Culture.pdf)
• Global Insurance Market Report 2021 (issued in December and available at https://
www.iaisweb.org/uploads/2022/01/211130-IAIS-GIMAR-2021.pdf)
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108th Annual Report | 2021
Consultative papers:
• Public Consultation on Draft Application Paper on Supervision of Control Functions (issued in
January and available at https://www.iaisweb.org/uploads/2022/01/210125-Draft-ApplicationPaper-on-Supervision-of-Control-Functions.pdf)
• Public Consultation: Draft Application Paper on Macroprudential Supervision (issued in March and
available at https://www.iaisweb.org/uploads/2022/01/210308-Draft-Application-Paper-onMacroprudential-Supervision.pdf)
• Public Consultation: Revised Application Paper on Combating Money Laundering and Terrorist
Financing (issued in May and available at https://www.iaisweb.org/uploads/2022/01/210517Revised-Application-Paper-on-Combating-Money-Laundering-and-Terrorist-Financing-clean.pdf)
• Public Consultation on Draft Revised Application Paper on Supervisory Colleges (issued in June
and available at https://www.iaisweb.org/uploads/2022/01/210623-Draft-Revised-ApplicationPaper-on-Supervisory-Colleges.pdf)
• Public Consultation on Draft Issues Paper on Insurer Culture (issued in June and available at
https://www.iaisweb.org/uploads/2022/01/210623-Draft-Issues-Paper-on-Insurer-Culture.pdf)
• Development of Liquidity Metrics: Phase 2, Public Consultation Document (issued in November
and available at https://www.iaisweb.org/uploads/2022/01/211118-PCD-on-the-Developmentof-Liquidity-Metrics-Phase-2-PUBLIC.pdf)
Shared National Credit Program
The Shared National Credit (SNC) program is an interagency review and assessment of risk in the
largest and most complex credits shared by multiple regulated financial institutions. The SNC program is governed by an interagency agreement among the Board, FDIC, and OCC. SNC reviews are
completed in the first and third quarters of the calendar year. Large agent banks receive two
reviews each year while most other agent banks receive a single review each year.
More information on the 2021 Shared National Credit review is available at https://
www.federalreserve.gov/newsevents/pressreleases/bcreg20220214a.htm.
Bank Secrecy Act and Anti-Money-Laundering Compliance
The Federal Reserve is responsible for examining institutions for compliance with the Bank
Secrecy Act (BSA) and applicable anti-money-laundering (AML) laws and regulations and conducts
such examinations in accordance with the FFIEC’s Bank Secrecy Act/Anti-Money-Laundering Examination Manual.
The Federal Reserve is currently participating in an ongoing interagency effort to update this
manual. Many of the revisions are designed to emphasize and enhance the risk-focused approach
Supervision and Regulation
to BSA/AML supervision and to continue to provide transparency into the BSA/AML examination
process.
Effective January 1, 2021, the Anti-Money-Laundering Act of 2020 (the Act) amended the Bank
Secrecy Act, resulting in the most significant revision of the United States’ framework for antimoney laundering and countering the financing of terrorism (AML/CFT) since 2001. The purpose of
the Act is to improve coordination and information sharing; modernize AML/CFT laws; encourage
technological innovations and the adoption of new technology; reinforce the risk-based approach
to compliance; and establish uniform beneficial ownership information reporting requirements with
a secure, nonpublic database for beneficial ownership information.
The Federal Reserve also participates in the Treasury-led BSA Advisory Group, which includes representatives of regulatory agencies, law enforcement, and the financial services industry.
International Coordination on Sanctions, Anti-Money Laundering, and Counter-Terrorism
Financing
The Federal Reserve participates in a number of international coordination initiatives related to
sanctions, money laundering, and terrorism financing. The Federal Reserve has a long-standing
role in the U.S. delegation to the intergovernmental Financial Action Task Force and its working
groups, contributing a banking supervisory perspective to the formulation of international standards. The Federal Reserve continued to participate in the work of the FSB that resulted in the
publication of a roadmap to enhance cross-border payments in October 2020, and the G-20
follow-up progress report published in October 2021, confirming the next steps of the initiative.
The Federal Reserve also continues to participate in committees and subcommittees through the
Bank for International Settlements. Specifically, the Federal Reserve actively participates in the
AML Experts Group under the BCBS that focuses on AML and countering financing of terrorism
(CFT) issues. In addition, the Federal Reserve participated in meetings and roundtables during the
year to discuss BSA/AML issues with foreign delegations from Mexico, Australia, Central America,
and the United Kingdom. These dialogues are designed to promote information sharing and understanding of BSA/AML issues between U.S. and country-specific financial sectors.
Role of Supervisory Guidance
On March 31, 2021, the Federal Reserve Board finalized a rule that codified, with amendments, an
interagency statement issued in September 2018 confirming the role of supervisory guidance.15
The 2018 statement explained that unlike a law or regulation, supervisory guidance does not have
the force and effect of law. Accordingly, the statement also clarified that examiners will not criticize
15
See final rule on the “Role of Supervisory Guidance,” available at https://www.federalregister.gov/documents/2021/
04/08/2021-07146/role-of-supervisory-guidance.
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108th Annual Report | 2021
a financial institution for a “violation” of supervisory guidance as they would for a violation of a
law or regulation.
The Federal Reserve has taken additional steps since issuance of the statement that further align
with its objectives. For instance, staff has conducted additional examiner training, more closely
reviewed draft supervisory communications to institutions, and coordinated with other banking
agencies on guidance-related practices. The Federal Reserve remains committed to ensuring the
proper role of guidance in the supervisory process.
Regulatory Reports
The Federal Reserve, along with the other member FFIEC agencies, requires banking organizations
to periodically submit reports that provide information about their financial condition and structure.
Federal Reserve Regulatory Reports
The Federal Reserve requires that U.S. holding companies periodically submit reports that provide
information about their financial condition and structure.16 This information is essential to formulating and conducting financial institution regulation and supervision. It is also used to respond to
information requests by Congress and the public about holding companies and their nonbank subsidiaries. Foreign banking organizations and other entities are also required to submit reports periodically to the Federal Reserve. For more information on the various reporting forms, see https://
www.federalreserve.gov/apps/reportforms/.
Effective during 2021, the following regulatory reporting forms had substantive revisions:
• Consolidated Financial Statements for Holding Companies (FR Y-9C)—The Board revised the
report related to the temporary asset thresholds interim final rule and the total loss-absorbing
capacity (TLAC) rulemaking17 applicable to category I and category II banking organizations.18
The Board also revised the report to collect contact information for the holding company’s chief
executive officer (CEO) and identify institutions with 100 or more full-time equivalent employees.
These items will allow the Board’s Office of Minority and Women Inclusion to invite Federal
Reserve-regulated institutions with 100 or more full-time equivalent employees to participate in
an annual, voluntary Diversity and Inclusion Self-Assessment Questionnaire.19 This item also
allows the agencies to communicate important and time-sensitive information to CEOs. An item
16
17
18
19
Holding companies are defined as BHCs, intermediate holding companies (IHCs), SLHCs, and securities holding companies.
86 Fed. Reg. 708 (January 6, 2021), https://www.federalregister.gov/documents/2021/01/06/2020-27046/
regulatory-capital-treatment-for-investments-in-certain-unsecured-debt-instruments-of-global.
Category I standards apply to U.S. global systemically important bank holding companies (G-SIBs). Category II standards
apply to U.S. banking organizations and U.S. IHCs with total consolidated assets of $700 billion or more or crossjurisdictional activity of $75 billion or more that do not qualify as U.S. G-SIBs.
This survey is consistent with the Final Interagency Policy Statement Establishing Joint Standards for Assessing the Diversity Policies of Entities Regulated by the Agencies (80 Fed. Reg. 33,016), which was issued as required by section 342 of
the Dodd-Frank Act. The agencies include the OCC, Board, FDIC, NCUA, CFPB, and SEC.
Supervision and Regulation
was also added to identify early adopters of the standardized approach for counterparty credit
risk (SA-CCR), and two glossary entries were revised to reflect recent changes to FDIC regulations (brokered deposits final rule).20
• Capital Assessments and Stress Testing Information Collection Reports (FR Y-14)—In 2020,
the Board temporarily revised the FR Y-14 to capture data regarding emerging risks arising from
the COVID event. In 2021, these temporary revisions expired and are no longer required to be
reported to the Federal Reserve. In addition to the expiration of these temporary revisions, the
Board also revised the reports to collect data related to the TLAC requirements, adding new
regulatory capital items, and amending the instructions for existing regulatory capital items consistent with the FR Y-9C revisions noted above.
• Statements of Foreign Subsidiaries of U.S. Banks (FR 2314/2314S); Reports of Foreign
Banking Organizations (FR Y-7N/FR Y-7NS); Statements of U.S. Nonbank Subsidiaries of U.S.
Holding Companies (FR Y-11/FR Y-11S)—The Board revised the reports to conform with the
temporary asset thresholds interim final rule, which allows for the use of the lesser of total
assets as of December 31, 2019, or the most recent applicable measurement period to determine the applicability of asset-based filing thresholds through the end of 2021.
• Complex Institution Liquidity Monitoring Report (FR 2052a)—The Board revised the report to
be consistent with the banking agencies’ implementation of the net stable funding ratio rule,
which became effective July 1, 2021. The revisions also improved the Board’s insights into
G-SIB interconnectedness, synthetic prime brokerage exposures, and other liquidity positions.
FFIEC Regulatory Reports
The Federal Reserve, along with the other member FFIEC agencies, requires financial institutions
to submit various uniform regulatory reports.21 This information is essential to formulating and
conducting supervision and regulation and for the ongoing assessment of the overall soundness
of the nation’s financial system. For more information on FFIEC reporting forms, see https://
www.ffiec.gov/ffiec_report_forms.htm.
During 2021, revisions were made to certain FFIEC reporting forms to reflect actions taken by the
member agencies to provide regulatory relief in response to the COVID event and to improve the
agencies’ monitoring of certain deposits and international exposures. The following FFIEC reports
had substantive revisions:
• Consolidated Reports of Condition and Income (FFIEC 031, 041, 051, collectively Call
Reports)—The FFIEC member agencies revised the measurement date used for certain asset
thresholds that trigger additional reporting requirements. The changes, which impacted all three
20
21
86 Fed. Reg. 6,742 (January 22, 2021), https://www.federalregister.gov/documents/2021/01/22/2020-28196/
unsafe-and-unsound-banking-practices-brokered-deposits-and-interest-rate-restrictions.
The law establishing the FFIEC and defining its functions requires the FFIEC to develop uniform reporting systems for
federally supervised financial institutions. See 12 U.S.C. § 3305.
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Table 4.4. Training for supervision and regulation, 2021
Number of enrollments
Course sponsor or type
Federal Reserve System
FFIEC
Rapid Response2
1
2
Instructional time
(approximate
training days)1
Number of course
offerings
6
326
76
190
145
184
46
14,544
1,283
5
39
Federal Reserve
personnel
747
State and federal
banking agency
personnel
Training days are approximate. System courses were calculated using five days as an average, with FFIEC courses calculated using four days
as an average.
Rapid Response is a virtual program created by the Federal Reserve System as a means of providing information on emerging topics to
Federal Reserve and state bank examiners.
versions of the Call Report, provided temporary reporting relief to institutions with asset growth
in 2020 associated with participation in various COVID event-related stimulus activities. The
agencies focused on asset thresholds that could impact a significant number of smaller community institutions. Additionally, the member agencies revised the reporting of certain brokered
deposits and sweep deposits to be consistent with a final rule issued by the FDIC related to
brokered deposits and interest rate restrictions. The agencies made revisions to each version
of the Call Report but tailored the granularity and frequency of the reporting based on the size
and complexity of the respondents.
• Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks
(FFIEC 002)—Consistent with changes made to the Call Reports for insured depository institutions, the FFIEC member agencies revised the report to monitor certain brokered deposits and
sweep deposits at the insured branches and agencies of foreign banks.
• Country Exposure Report for U.S. Branches and Agencies of Foreign Banks (FFIEC 019)—The
agencies removed the five-country limit on the reporting of gross claims on foreign nations to
which the U.S. branch or agency has its largest total exposures of at least $20 million. For consistency, the reporting form was revised to include the list of countries and codes that are
reflected on the FFIEC 009. The agencies also made clarifications to the definitions and treatment of certain items in the instructions to be consistent with the FFIEC 009.
Staff Development Programs
The Federal Reserve’s staff development program supports the ongoing development of nearly
4,000 professional supervisory staff, ensuring that they have the requisite skills necessary to
meet their evolving supervisory responsibilities. The Federal Reserve also provides course offerings to staff at state banking agencies. Training activities in 2021 are summarized in table 4.4.
Supervision and Regulation
Examiner Commissioning Program
An overview of the Federal Reserve System’s Examiner Commissioning Program for assistant
examiners is set forth in SR 17-6/CA 17-1, “Overview of the Federal Reserve’s Supervisory Education Programs.” Three examiner commissioning tracks are available: (1) community banking organization, (2) consumer compliance, and (3) large financial institutions (LFI). On average, individuals
move through a combination of in-person training, self-paced learning, virtual instruction, and
on-the-job training over a period of about three to four years. Achievement is measured by completing the required course content, demonstrating on-the-job knowledge, and passing a professionally validated proficiency examination.
In 2021, 95 examiners passed the proficiency examination (36 in CBO, 21 in consumer compliance, and 38 in LFI). In an effort to ensure minimal disruption to assistant examiners, virtual
delivery of content continued throughout 2021.
Continuing Professional Development
The Federal Reserve provides supervisory staff (and in many cases, state examiners through
existing partnerships with the Conference of State Banking Supervisors and FFIEC) with opportunities to maintain job knowledge after commissioning, learn about emerging concepts and practices,
and expand knowledge into highly specialized supervisory topics. A number of learning and communication solutions are developed or curated, including Rapid Response webinars, podcasts, selfguided learning plans on specialty topics, and other content produced for just-in-time communication to supervisory staff about emerging issues and regulatory policy.
Regulatory Developments
The Federal Reserve carries out its regulatory responsibilities by developing regulatory policy (rulemakings, supervision and regulation letters, policy statements, and guidance) and reviewing and
acting on a variety of applications filed by banking organizations.
Rulemakings and Guidance
The Federal Reserve issues new regulations or revises existing regulations in response to laws
enacted by Congress or because of evolving conditions in the financial marketplace. Over 2021,
the Federal Reserve, working with the other federal banking agencies, announced a variety of
policy actions to promote the safety and soundness, transparency, and efficiency of the financial
system. The Federal Reserve issued the following rules and statements in 2021 (see table 4.5).
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Table 4.5. Federal Reserve or interagency rulemakings/statements/guidance
(proposed and final), 2021
Date issued
Rulemaking/statement/guidance
1/19/2021
Federal Reserve Board finalizes a rule that updates the Board's capital planning requirements to be consistent with other Board rules that were
recently modified.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210119a.htm
1/19/2021
SR 21-2, “Answers to Frequently Asked Questions Regarding Suspicious Activity Reporting and Other Anti-Money Laundering Considerations.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/SR2102.htm
2/9/2021
Federal Reserve Board announces the second extension of a rule to bolster the effectiveness of the Small Business Administration's Paycheck
Protection Program (PPP).
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210209a.htm
2/12/2021
Federal Reserve Board releases hypothetical scenarios for its 2021 bank stress tests.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210212a.htm
2/18/2021
Federal Reserve Board announces final rule intended to reduce risk and increase efficiency in the financial system by applying netting protections
to a broader range of financial institutions.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210218a.htm
2/22/2021
Federal and state financial regulatory agencies issue interagency statement on supervisory practices regarding financial institutions affected by
Texas Winter Storms.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210222a.htm
2/26/2021
SR 21-3 / CA 21-1, “Supervisory Guidance on Board of Directors' Effectiveness.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/SR2103.htm
2/26/2021
SR 21-4 / CA 21-2, “Inactive or Revised SR Letters Related to the Federal Reserve’s Supervisory Expectations for a Firm’s Boards of Directors.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/SR2104.htm
3/5/2021
Federal Reserve Board clarifies guidance as it relates to definitions for minority depository institutions.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210305a.htm
3/9/2021
Federal bank regulators issue rule supporting the Treasury's investments in minority depository institutions and community development financial
institutions.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210309a.htm
3/9/2021
SR 21-7, “Assessing Supervised Institutions' Plans to Transition Away from the Use of the LIBOR.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/SR2107.htm
3/11/2021
Agencies release proposed new interagency questions and answers regarding private flood insurance.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210311a.htm
3/19/2021
Federal Reserve Board announces that the temporary change to its supplementary leverage ratio (SLR) for bank holding companies will expire as
scheduled on March 31.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210319a.htm
3/19/2021
Temporary supplementary leverage ratio changes to expire as scheduled.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210319b.htm
3/25/2021
Federal Reserve announces temporary and additional restrictions on bank holding company dividends and share repurchases currently in place
will end for most firms after June 30, based on results from upcoming stress test.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210325a.htm
3/25/2021
SR 21-6 / CA 21-4, “Highlighting the Federal Reserve System's Partnership for Progress Program for Minority Depository Institutions and Women's
Depository Institutions.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/SR2106.htm
3/29/2021
Agencies seek wide range of views on financial institutions' use of artificial intelligence.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210329a.htm
3/31/2021
SR 2–30, “Financial Institutions Subject to the LISCC Supervisory Program.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/sr2030.htm
3/31/2021
Federal Reserve Board adopts final rule outlining and confirming the use of supervisory guidance for regulated institutions.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210331a.htm
3/31/2021
Federal Reserve Board publishes frequently asked questions (FAQs) comprising existing legal interpretations related to a number of the Board's
longstanding regulations.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210331b.htm
4/8/2021
Federal Reserve Board invites public comment on a proposal to automate non-merger-related adjustments to member banks' subscriptions to
Federal Reserve Bank capital stock.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210408a.htm
4/9/2021
Agencies issue statement and request for information on Bank Secrecy Act/anti-money-laundering compliance.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210409a.htm
(continued)
Supervision and Regulation
Table 4.5—continued
Date issued
Rulemaking/statement/guidance
4/22/2021
Agencies invite comment on proposed rule for income tax allocation agreements.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210422a.htm
5/5/2021
Federal Reserve Board invites public comment on proposed guidelines to evaluate requests for accounts and payment services at Federal Reserve
Banks.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210505a.htm
5/7/2021
Federal Reserve Board invites public comment on proposed changes to Regulation II regarding network availability for card-not-present debit card
transactions and publishes a biennial report containing summary information on debit card transactions in 2019.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210507a.htm
5/14/2021
Federal Reserve Board announces the third extension of a rule to bolster the effectiveness of the Small Business Administration's Paycheck
Protection Program (PPP).
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210514a.htm
5/17/2021
Agencies extend comment period on request for information on artificial intelligence.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210517a.htm
5/21/2021
Agencies issue host state loan-to-deposit ratios.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210521a.htm
6/2/2021
Federal Reserve Board issues final rule amending Regulation D regarding interest on reserve balances.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210602a.htm
6/7/2021
Federal Reserve Board announces that results from its bank stress tests will be released on Thursday, June 24, at 4:30 p.m. EDT.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210607a.htm
6/22/2021
Federal Reserve Board extends comment period on proposed changes to Regulation II regarding network availability for card-not-present debit
card transactions until August 11, 2021.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210622a.htm
6/24/2021
Federal Reserve Board releases results of annual bank stress tests, which show that large banks continue to have strong capital levels and could
continue lending to households and businesses during a severe recession.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210624a.htm
6/25/2021
Agencies release list of distressed or underserved nonmetropolitan middle-income geographies.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210625a.htm
6/30/2021
SR 21-10, “nteragency Statement on the Issuance of the Anti-Money Laundering/Countering the Financing of Terrorism National Priorities.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/SR2110.htm
6/30/2021
SR 21-11, “FFIEC Architecture, Infrastructure, and Operations Examination Handbook.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/SR2111.htm
7/1/2021
Federal Reserve announces it will soon release a new tool to help community banks implement Current Expected Credit Losses (CECL) accounting
standard.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210701a.htm
7/13/2021
Agencies request comment on proposed risk management guidance for third-party relationships.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210713a.htm
7/19/2021
Agencies release public sections of resolution plans for eight large banks.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210719a.htm
7/20/2021
Interagency statement on Community Reinvestment Act joint agency action.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210720a.htm
7/20/2021
Federal Reserve Board statement on the Community Reinvestment Act.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210720b.htm
7/29/2021
SR 21-13 / CA 21-10, “Revised Special Post-Employment Restriction for Senior Examiners and Work Paper Reviews for Departing Examiners.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/SR2113.htm
8/5/2021
Federal Reserve Board announces the individual capital requirements for all large banks, effective on October 1.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210805a.htm
8/11/2021
SR 21-14, “Authentication and Access to Financial Institution Services and Systems.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/sr2114.htm
8/27/2021
Agencies issue guide to help community banks evaluate fintech relationships.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210827a.htm
8/30/2021
Federal and state financial regulatory agencies issue interagency statement on supervisory practices regarding financial institutions affected by
Hurricane Ida.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210830a.htm
(continued)
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108th Annual Report | 2021
Table 4.5—continued
Date issued
Rulemaking/statement/guidance
8/31/2021
Federal and state financial regulatory agencies issue interagency statement on supervisory practices regarding financial institutions affected by
California Wildfires.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210831a.htm
9/7/2021
Agencies extend comment period on proposed risk management guidance for third-party relationships.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210907a.htm
9/9/2021
Federal Reserve published a paper describing landscape of partnerships between community banks and fintech companies.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210909a.htm
10/22/2021
SR 21-17 / CA 21-15, “Interagency Statement on Managing the LIBOR Transition.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/sr2117.htm
10/27/2021
Federal Reserve Board invites public comment on a technical notice of review regarding primary dealers operating in Spain.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211027a.htm
11/18/2021
Agencies approve final rule requiring computer-security incident notification.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211118a.htm
11/19/2021
SR 21-12, “Answers to Frequently Asked Questions on the Transition Away from London Interbank Offered Rate (LIBOR).”
Release: https://www.federalreserve.gov/supervisionreg/srletters/sr2112.htm
11/23/2021
Agencies issue joint statement on crypto-asset policy initiative and next steps.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211123a.htm
11/24/2021
Federal Reserve Board announces members of its Insurance Policy Advisory Committee.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211124a.htm
12/1/2021
Agencies announce threshold for smaller loan exemption from appraisal requirements for higher-priced mortgage loans.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211201a.htm
12/1/2021
Agencies announce dollar thresholds in Regulations Z and M for exempt consumer credit and lease transactions.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211201b.htm
12/1/2021
SR 21-18, “Release of New and Updated Sections of the Federal Financial Institutions Examination Council's Bank Secrecy Act/Anti-Money
Laundering Examination Manual.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/SR2118.htm
12/10/2021
Federal Reserve Board reiterates its supervisory expectations for large banks' risk management with investment funds.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211210a.htm
12/15/2021
Federal and state financial regulatory agencies issue interagency statement on supervisory practices regarding financial institutions affected by
tornadoes.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211215a.htm
12/16/2021
Agencies release annual asset-size thresholds under Community Reinvestment Act regulations.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211216a.htm
12/17/2021
SR 21-20, “Status of Certain Investment Funds and their Portfolio Investments for Purposes of Regulation O and Reporting Requirements under
Part 363 of FDIC Regulations.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/SR2120.htm
12/21/2021
SR 21-21, “Interagency Statement on the Community Bank Leverage Ratio Framework.”
Release: https://www.federalreserve.gov/supervisionreg/srletters/SR2121.htm
Banking Applications
The Federal Reserve reviews applications submitted by bank holding companies, state member
banks, savings and loan holding companies, foreign banking organizations, and other entities for
approval to undertake various transactions and to engage in new activities. In 2021, the Federal
Reserve acted on 1,006 applications filed under the six relevant statutes.
The Federal Reserve publishes the Semiannual Report on Banking Applications Activity, which provides aggregate information on proposals filed by banking organizations and reviewed by the Federal Reserve. The current report as well as historical reports are available at https://
www.federalreserve.gov/publications/semiannual-report-on-banking-applications-activity.htm.
Supervision and Regulation
Public Notice of Federal Reserve Decisions and Filings Received
The Board’s website provides information on orders and announcements (https://
www.federalreserve.gov/newsevents/pressreleases.htm) as well as a guide for U.S. and foreign
banking organizations that wish to submit applications (https://www.federalreserve.gov/
bankinforeg/afi/afi.htm).
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57
5
Payment System and Reserve Bank
Oversight
The Federal Reserve performs key functions to maintain the integrity of the U.S. payment and
settlement system. These functions help keep cash, check, and electronic transactions moving
reliably through the U.S. economy on behalf of households and businesses and the U.S. Treasury.
This section discusses the key payment system and Reserve Bank oversight activities undertaken
by the Federal Reserve during 2021:
• providing payment services to depository and certain other institutions
• distributing the nation’s currency and coin to depository institutions (also see figure 5.1)
• serving as fiscal agents and depositories for the U.S. government and other entities
• serving as a catalyst for payment system improvements
• conducting Reserve Bank oversight to ensure effective internal controls, operations, and
management
Figure 5.1. Unprecedented demand for currency during the COVID-19 pandemic began to normalize by
the end of 2021
During 2021, currency in circulation grew by $212.3 billion, or 11.1 percent, to $2.1 trillion. In contrast, in the three
years preceding the COVID-19 pandemic, the average growth rate of currency in circulation was 6.3 percent. Since the
January 2021 peak, the increase in currency in circulation growth has steadily declined toward more historically normal
rates. For more information on currency in circulation, see “Currency and Coin.”
2.5
Trillions of dollars
Percent
20
Growth rate, year over year
(right scale)
15
2.0
Currency in circulation
(left scale)
10
1.5
5
1.0
2017
2018
2019
2020
2021
0
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108th Annual Report | 2021
Payment Services to Depository and Other Institutions
Reserve Banks provide a range of payment and related services to depository and certain other
institutions; these “priced services” include collecting checks, operating an automated clearinghouse (ACH) service, transferring funds and securities, and providing a multilateral settlement
service (see box 5.1).1
Historically, the Reserve Banks operated payment services as separate business lines, led by a
specific Reserve Bank, and tracked cost recovery accordingly. In 2021, in response to the
changing financial services landscape and the anticipated launch of the FedNowSM Service in
2023, the Reserve Banks commenced a restructuring of payment services under one enterprise,
led by a chief payments executive. This new governance and operating model will enhance the
agility and resiliency of Reserve Bank payment services and provide streamlined support for
depository institution customers across all financial service offerings.
Commercial Check-Collection Service
The commercial check-collection service provides a suite of electronic and paper processing
options for forward and return collections.
In 2021, the Reserve Banks recovered 103.2 percent of the total costs of their commercial checkcollection service, including the related private-sector adjustment factor (PSAF) (see box 5.1). The
Reserve Banks’ operating expenses and imputed costs totaled $105.4 million. Revenue from
operations totaled $109.9 million, resulting in a net income of $4.5 million. Reserve Banks
handled 3.7 billion checks in 2021, a decrease of 2.9 percent from 2020 (see table 5.1). The
average daily value of checks collected by the Reserve Banks in 2021 was approximately
$34.8 billion, an increase of 13 percent from the previous year. However, the Reserve Banks’
check volumes are expected to decline because of substitution away from checks to other payment instruments.
Commercial Automated Clearinghouse Service
The commercial ACH service provides domestic and cross-border batched payment options for
same-day and next-day settlement, enabling depository institutions and their customers to process
large volumes of payments through electronic batch processes.
1
Depository institutions are defined as commercial banks, thrifts, and credit unions. Besides playing an important role in
the broader economy by providing transaction accounts, such as checking accounts, to consumers, households, and
businesses, these institutions play an important role in the Federal Reserve System’s payment and settlement system
function.
Payment System and Reserve Bank Oversight
Table 5.1. Activity in Federal Reserve priced services, 2019–21
Thousands of items, except as noted
Service
Commercial check
Commercial ACH
Fedwire funds transfer
National settlement
Fedwire securities
Percent change
2021
2020
2019
3,657,312
3,766,523
4,389,011
17,895,155
16,548,795
15,583,792
8
6
204,491
184,010
172,435
11
10
2020–21
2019–20
−3
−14
586
551
558
6
−1
4,200
4,600
3,246
−9
42
Note: Activity in commercial check is the total number of commercial checks collected, including processed and fine-sort items; in commercial
ACH, the total number of commercial items processed; in Fedwire funds transfer and securities transfer, the number of transactions originated
online and offline; and in national settlement, the number of settlement entries processed.
In 2021, the Reserve Banks recovered 98.0 percent of the total costs of their commercial ACH
services, including the related PSAF. The Reserve Banks’ operating expenses and imputed costs
totaled $167.4 million. Revenue from operations totaled $165.7 million, resulting in a net loss of
$1.7 million. The FedACH® Service did not achieve full cost recovery because of continued technology modernization and resiliency initiatives. The Reserve Banks continue to invest in platform
capabilities and resiliency initiatives as part of a broader enhancement strategy. The Reserve
Banks processed 17.9 billion commercial ACH transactions in 2021, an increase of 8.1 percent
from 2020 (see table 5.1). The average daily value of FedACH transfers in 2021 was approximately $146.8 billion, an increase of 20.0 percent from the previous year.
FedNow Service
The FedNow Service is a new interbank 24x7x365 real-time gross settlement service being developed by the Federal Reserve to enable depository institutions across the United States to provide
services that support the growing need for instant payments in this country. It is intended to be a
flexible, neutral platform that will support a broad variety of instant payments and allow depository
institutions and their service providers to offer value-added services to their customers, ultimately
enhancing competition in the market for payment services. Development of the FedNow Service is
a high priority of the Federal Reserve and will be available to eligible financial institutions in 2023.
Development of the service is progressing, with several key milestones reached within the past
year: publication of message specifications; implementation of a pilot program with more than
100 participants to support the development, testing, and adoption of the service; and publication
of a proposed set of comprehensive rules that will govern the service. In January 2022, the Federal Reserve announced the pricing approach and transaction value limit for the service. All of
these milestones are important steps that allow depository institutions and service providers to
make preparations to support the FedNow Service’s instant payments.
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108th Annual Report | 2021
Box 5.1. Priced Services and Cost Recovery
The Federal Reserve must (under the Monetary Control Act of 1980) establish fees for “priced services” to recover, over the long run, all the direct and indirect costs associated with its payment and
settlement system service. Costs include those actually incurred as well as the imputed costs that
would have been incurred—including financing costs, taxes, and certain other expenses—and the
return on equity (profit) that would have been earned if a private business firm had provided the services.1 The imputed costs and imputed profit are collectively referred to as the private-sector adjustment factor (PSAF).
From 2012 through 2021, the Reserve Banks recovered 103.0 percent of the total priced services
costs, including the PSAF (see table A). In 2021, Reserve Banks recovered 99.7 percent of the total
priced services costs, including the PSAF (see table A). The Reserve Banks’ operating expenses and
imputed costs totaled $452.8 million. Revenue from operations totaled $456.0 million, resulting in net
income from priced services of $4.4 million. The Check Services and the Fedwire Securities Service
achieved full cost recovery. The FedACH Service and Fedwire Funds® and National Settlement Services
did not achieve full cost recovery because of technology modernization and resiliency initiatives.
Table A. Priced services cost recovery, 2012–21
Millions of dollars, except as noted
Year
Revenue from
services1
Operating
Targeted return
expenses and
on equity3
2
imputed costs
Total costs
Cost recovery
(percent)4
2012
449.8
423.0
8.9
432.0
104.1
2013
441.3
409.3
4.2
413.5
106.7
2014
433.1
418.7
5.5
424.1
102.1
2015
429.1
397.8
5.6
403.4
106.4
2016
434.1
410.5
4.1
414.7
104.7
2017
441.6
419.4
4.6
424.0
104.1
2018
442.5
428.1
5.2
433.3
102.1
2019
444.0
441.2
5.4
446.5
99.4
2020
446.9
434.0
5.9
439.9
101.6
2021
2012–21
456.0
452.8
4.4
457.2
99.7
4,418.8
4,234.8
53.9
4,288.7
103.0
Note: Here and elsewhere in this section, components may not sum to totals or yield percentages shown because of rounding. Excludes
amounts related to development of the FedNow Service.
1
For the 10-year period, includes revenue from services of $4,416.7 million and other income and expense (net) of $2.0 million.
2
For the 10-year period, includes operating expenses of $4,121.6 million, imputed costs of $41.0 million, and imputed income taxes
of $72.2 million.
3
From 2011 to 2012, the PSAF was adjusted to reflect the actual clearing balance levels maintained; previously, the PSAF had been
calculated based on a projection of clearing balance levels.
4
Revenue from services divided by total costs. For the 10-year period, cost recovery is 94.3 percent, including the effect of accumulated other comprehensive income (AOCI) reported by the priced services under ASC 715. For details on changes to the estimation
of priced services AOCI and their effect on the pro forma financial statements, refer to note 3 to the “Pro Forma Financial Statements
for Federal Reserve Priced Services” at the end of this section.
1
According to the Accounting Standards Codification (ASC) Topic 715 (ASC 715), Compensation-Retirement Benefits, the Reserve
Banks recognized a $686.5 million reduction in equity related to the priced services’ benefit plans through 2021. Including this
reduction in equity, which represents a decline in economic value, results in cost recovery of 94.3 percent for the 10-year period. For
details on how implementing ASC 715 affected the pro forma financial statements, refer to note 3 to the pro forma financial
statements at the end of this section.
Payment System and Reserve Bank Oversight
Fedwire Funds and National Settlement Services
In 2021, the Reserve Banks recovered 98.6 percent of their costs of the Fedwire Funds and
National Settlement Service, including the related PSAF. The Fedwire Securities Service did not
achieve full cost recovery because of the timing of a strategic transition to more accurately allocate the costs of providing the service. Revenue from operations totaled $152.7 million, resulting
in a net loss of $0.7 million. The Reserve Banks’ operating expenses and imputed costs totaled
$153.4 million in 2021.
Fedwire Funds Service
The Fedwire Funds Service allows its participants to send or receive domestic time-critical payments using their balances at Reserve Banks to transfer funds in real time.
From 2020 to 2021, the number of Fedwire funds transfers originated by depository institutions
increased 11.1 percent, to approximately 204 million (see table 5.1). The average daily value of
Fedwire funds transfers in 2021 was $4.0 trillion, an increase of 18.9 percent from the previous year.
National Settlement Service
The National Settlement Service (NSS) is a multilateral settlement system that allows participants
in private-sector clearing arrangements to settle transactions using their balances at
Reserve Banks.
In 2021, the service processed settlement files for 11 local and national private-sector arrangements. The Reserve Banks processed 8,675 files that contained about 586,000 settlement
entries (see table 5.1). Settlement file activity in 2021 increased 3.8 percent from 2020, and
settlement entries increased 6.3 percent. The total value of settlement processed by NSS
increased 6.7 percent, to $25.0 trillion.
Fedwire Securities Service
The Fedwire Securities Service is a central securities depository and real-time securities settlement system that allows its participants to transfer electronically to other service participants certain securities issued by the U.S. Department of the Treasury, federal government agencies,
government-sponsored enterprises, and certain international organizations.2 It also provides for
the issuance, safekeeping, and maintenance of those securities.
2
The expenses, revenues, volumes, and fees reported here are for priced-services for securities issued by federal government agencies, government-sponsored enterprises, and certain international organizations. Reserve Banks provide
Treasury securities services in their role as the Treasury’s fiscal agent. These services are not considered priced services. For details, see “Financing and Securities Services” later in this section.
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108th Annual Report | 2021
In 2021, the Reserve Banks recovered 103.8 percent of the costs of their Fedwire Securities Service, including the related PSAF. Revenue from operations totaled approximately $27.7 million,
resulting in a net income of $1.3 million. The Reserve Banks’ operating expenses and imputed
costs totaled $26.4 million in 2021. In 2021, the number of non-Treasury securities transfers processed via the service decreased approximately 8.7 percent from 2020, to approximately 4.2 million (see table 5.1). The average daily value of Fedwire Securities priced-service transfers in 2021
was approximately $72.4 billion, a decrease of 16.5 percent from the previous year.3 The average
daily value of all Fedwire Securities transfers in 2021 was more than $1.2 trillion, a decrease of
approximately 13.7 percent from the previous year.
The Reserve Banks, as fiscal agent for the U.S. Treasury, perform the transfer and settlement of
Treasury securities. In 2021, the number of all Treasury security transfers was approximately
16.0 million, a decrease of 6.1 percent from 2020.
The Reserve Banks, as fiscal agents for Fedwire Securities issuers, facilitate the principal and
interest payments to the Fedwire Securities Service participants holding securities. In 2021, the
total cash value of principal and interest payments in 2021 was $29.3 trillion (a decrease of
3.7 percent from 2020).
The Fedwire Securities Service is the central securities depository for securities issued over the
Fedwire Securities Service. At the end of 2021, there was approximately $102 trillion (par value)
of Fedwire securities held in securities accounts maintained by the Reserve Banks as part of the
service, a 5.5 percent increase from 2020. At the end of 2021, there were 1.4 million unique
securities outstanding on the service, an increase of 2.8 percent from 2020.
FedLine Solutions: Access to Reserve Bank Services
The Reserve Banks’ FedLine Solutions provide depository institutions with a variety of connections
for accessing the Reserve Banks’ payment and information services.
For priced services, the Reserve Banks charge fees for these connections and allocate the associated costs and revenue to the various services. There are currently six FedLine Solutions through
which customers can access the Reserve Banks’ priced services: FedMail, FedLine Exchange,
FedLine Web, FedLine Advantage, FedLine Command, and FedLine Direct. These FedLine Solutions
are designed to meet the individual connectivity, security, and contingency requirements of depository institution customers.
The Reserve Banks continue to focus on increased resiliency and availability of the FedLine Solutions. In 2021, the Reserve Banks advanced the safety and security of FedLine Solutions by
3
These values do not include reversals.
Payment System and Reserve Bank Oversight
making progress on key infrastructure upgrades and network modernization, as well as through
proactive monitoring of an evolving threat environment and by strengthening endpoint security
policies.
Federal Reserve Intraday Credit
The Federal Reserve Board governs the use of Federal Reserve Bank intraday credit, also known
as daylight overdrafts.4 A daylight overdraft occurs when an institution’s account activity creates a
negative balance in the institution’s Federal Reserve account at any time in the operating day. Daylight overdrafts enable an institution to send payments more freely throughout the day than if it
were limited strictly by its available intraday funds balance, increasing efficiency and reducing payment system risk.
Institutions currently hold historically high levels of overnight balances at the Federal Reserve
Banks, while daylight overdrafts remained historically low, as shown in figure 5.2.5
Figure 5.2. Aggregate daylight overdrafts 2007–21
200
Billions of dollars
150
100
Peak daylight overdrafts
Average daylight overdrafts
50
0
2007
2009
2011
2013
2015
2017
2019
2021
Source: Payment Data Repository data, Federal Reserve quarterly payment system risk data.
Fees collected for daylight overdrafts are also at historically low levels.6 Fees as well as the use of
intraday credit are expected to remain relatively low given the historically high levels of overnight
4
5
6
See the Payment System Risk policy: https://www.federalreserve.gov/paymentsystems/psr_about.htm. The Payment
System Risk policy recognizes explicitly the role of the central bank in providing intraday balances and credit to healthy
institutions; under the policy, the Reserve Banks provide collateralized intraday credit at no cost.
Increases in the overnight balances institutions held at the Reserve Banks have decreased the demand for intraday
credit. Use of intraday credit is expected to remain low given the FOMC’s decision to continue to implement monetary
policy within a regime of ample reserves.
In light of disruptions from the coronavirus pandemic, the Board took temporary actions to increase the availability of
intraday credit extended by Reserve Banks. Specifically, the Board temporarily (1) suspended net debit caps for primary
credit institutions, (2) authorized a streamlined procedure for secondary credit institutions to request collateralized
intraday credit under the max cap program, and (3) suspended two collections of information that are used to calculate
net debit caps.
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balances under the ample reserves regime. Additionally, a 2011 policy revision that eliminated
fees for collateralized daylight overdrafts has further contributed to the decrease in fees.
Currency and Coin
The Federal Reserve Board issues the nation’s currency (in the form of Federal Reserve notes) to
28 Federal Reserve Bank offices. The Reserve Banks, in turn, distribute Federal Reserve notes to
depository institutions in response to public demand. Together, the Board and Reserve Banks work
to maintain the integrity of and confidence in Federal Reserve notes.
Federal Reserve transaction volumes in 2021 continued to reflect pandemic trends but moderated
from the unprecedented surge in demand experienced at the onset of the pandemic in early 2020.
All denominations, except for $1s and $2s, experienced a decline in transaction levels from 2020.
In 2021, the Reserve Banks distributed 30.7 billion Federal Reserve notes into circulation, an
8.5 percent decrease from 2020, and received 27.9 billion Federal Reserve notes from circulation, a 0.7 percent decrease from 2020. The larger decrease in payments than receipts resulted
in a net payments decrease of 2.7 billion notes, or a 48.9 percent decrease from 2020, primarily
attributable to lower net payments of $20 notes. While less than 2020 numbers, net payments in
2021 increased about 1.2 billion notes from typical pre-pandemic net payment levels. The value of
Federal Reserve notes issued and outstanding at year-end 2021 totaled $2,187.5 billion, a
7.2 percent increase from 2020. The year-over-year increase is primarily attributable to demand
for $100 notes.
The Reserve Banks also distribute coin to depository institutions on behalf of the U.S. Mint.7 In
2021, Reserve Banks distributed 46.3 billion coins into circulation, a 7.3 percent decrease from
2020, and received 30.4 billion coins from circulation, a 10.7 percent decrease from 2020. The
year-over-year decrease in coin activity is a result of the COVID-19 pandemic, which significantly
disrupted the supply chain and normal circulation patterns for U.S. coins.
Banknote Development
During 2021, Federal Reserve Board staff continued to support efforts related to the development
of the next family of U.S. currency. For example, the Advanced Counterfeit Deterrence (ACD)
Steering Committee, composed of the Treasury, the U.S. Secret Service, and Federal Reserve
System staff, advised on currency design changes to the Secretary of the Treasury, who has sole
statutory authority to approve the final currency design.
7
The Federal Reserve Board is the issuing authority for Federal Reserve notes, while the U.S. Mint, a bureau of the U.S.
Treasury, is the issuing authority for coin.
Payment System and Reserve Bank Oversight
Over the past year, Federal Reserve Board staff, in collaboration with other U.S. currency program
partners (the Bureau of Engraving and Printing, Federal Reserve Financial Services, and the U.S.
Secret Service) worked together in the execution of technology and banknote development. Banknote development focuses on meeting requirements based on user needs, security needs, and
manufacturing capabilities. Technology development focuses on security features that can further
bolster the counterfeit resistance of U.S. currency. To support these development efforts, the Federal Reserve Board, like many other central banks, led an adversarial analysis program to increase
the counterfeit resilience of U.S. currency. The Board also conducted research activities in counterfeit deterrence technologies. These activities work in concert to meet the goal of developing the
next family of banknotes with new, robust security features effectively integrated into the design,
which is easy to authenticate and difficult for counterfeiters to simulate.
In addition to participating on the ACD Steering Committee in 2021, Federal Reserve Board staff
continued to serve on the Central Bank Counterfeit Deterrence Group and the Four Nations, and
chaired the United States Cash Machine Group. The Central Bank Counterfeit Deterrence Group is
a group of central banks that collaborates to prevent digital counterfeiting. The Four Nations is a
group of central banks, including the Board, that works on common projects and uses experience
in banknote design to discuss issues related to security, functionality, and manufacturability of
banknotes. The United States Cash Machine Group works closely with manufacturers of cash
authentication machines to ensure that new and existing banknotes function in commerce. The
Board collaborates with these domestic and international partners to maintain worldwide confidence in U.S. currency.
New Currency Production Facility
In 2021, Board staff continued to work with the Bureau of Engraving & Printing and the U.S. Army
Corps of Engineers to build a new currency production facility in the Washington, D.C., area. The
new production facility will replace the aging buildings in Washington and better position the currency program to produce new currency designs that are more technically complex. The new facility
will be built in Beltsville, Maryland, on a site owned by the Department of Agriculture. The new
facility will produce half of the notes that the Board orders each year as part of the yearly currency
order. Over the past year, the Board and the Bureau of Engraving and Printing established governance procedures and developed a shared vision for the management of this project.
Currency Education
The Federal Reserve Board’s U.S. Currency Education Program (CEP) is responsible for building
confidence in U.S. currency by providing education, training, and information about Federal
Reserve notes to the global public. The CEP works closely with the U.S. Secret Service, the U.S.
Department of State, and the U.S. Department of the Treasury’s Bureau of Engraving and Printing
to raise awareness about the designs and security features of Federal Reserve notes.
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In 2021, the CEP launched the teller toolkit and cashier toolkit to support the program’s domestic
stakeholder outreach. These resources were created to help tellers and cashiers quickly spot
counterfeit currency, protect businesses from loss of revenue, and emphasize the importance of
following company counterfeit-reporting policies. The CEP also launched the Android and iOS versions of Cash Assist, an app designed to support authentication training efforts for professional
cash handlers across industries. The app uses the camera on a user’s phone to identify the
denomination of the bill they are authenticating and display the key security features found on
genuine Federal Reserve notes.
The CEP also hosted multiple virtual counterfeit trainings to instruct stakeholders on currency
authentication and counterfeit detection best practices. Domestically, the CEP hosted counterfeit
trainings for Federal Reserve Bank cash offices that reached program administrators and cash
operators. Internationally, the CEP hosted trainings for cash operations staff and managers from
the central banks globally.
Fiscal Agency and Government Depository Services
The Federal Reserve Banks, upon the direction of the Secretary of the Treasury, act as fiscal
agents of the U.S. government.8 The Reserve Banks, in their role as fiscal agents, provide services such as payment services, financing and securities services, and financial accounting and
reporting services, as well as maintain the Treasury’s operating cash account.
To support further the Treasury’s mission, the Reserve Banks develop, operate, and maintain a
number of automated systems and provide associated technology infrastructure services. The
Reserve Banks also provide certain fiscal agency and depository services to other entities.
Reserve Bank expenses for providing fiscal agency and depository services totaled $768.5 million, an increase of 36.1 million, or 4.9 percent (see table 5.2), which is primarily attributable to
increased demand from the Treasury. The Treasury and other entities reimburse the Reserve
Banks for the expense of providing fiscal agency and depository services. Costs for Treasuryrelated programs accounted for 96.8 percent of expenses, and costs for other entities accounted
for the remaining 3.2 percent.
Payment Services
The Reserve Banks support the Treasury’s payment services by developing, operating, and maintaining electronic systems that allow the public to receive payments from and authorize payments
to federal agencies, and allow the government to prevent and detect improper payments and col8
In accordance with section 15 of the Federal Reserve Act. See https://www.federalreserve.gov/aboutthefed/
section15.htm.
Payment System and Reserve Bank Oversight
Table 5.2. Expenses of the Federal Reserve Banks for fiscal agency and depository services, 2019–21
Thousands of dollars
20211
2020
2019
Payment services
353,030
293,994
292,078
Financing and Treasury securities services
184,535
179,314
191,614
76,970
69,315
65,105
129,339
150,461
139,703
743,874
693,084
688,500
Agency and service
Department of the Treasury
Financial accounting and reporting services
Technology infrastructure services
Total, Treasury
Other entities
Total reimbursable expenses
24,595
39,321
40,471
768,469
732,406
728,971
Note: Service costs include reimbursable pension costs, where applicable. Previous versions of the Annual Report provided a separate line
item for pension expenses.
1
In 2021, the Federal Reserve implemented a new cost accounting framework.
lect past-due debts. The Reserve Banks also provide operational and customer support, agency
outreach efforts, and data analytics. The Reserve Banks process payments, such as federal payroll, Social Security benefits, and veterans’ benefits from the Treasury’s account at the Federal
Reserve and process payments made to the Treasury’s account at the Federal Reserve, which
include collections such as fees owed to the federal government.
Reserve Bank expenses for providing Treasury payment services were $353.0 million in 2021, an
increase of $59.0 million, or 20.1 percent, which is primarily attributable to expanded efforts to
modernize business processes and applications for federal payments and electronic tax collection.
The programs that contributed most to Reserve Bank expenses in 2021 were the Stored Value
Card program, the Pay.gov program, and the Do Not Pay program.
The Reserve Banks work with the Treasury to support the Stored Value Card program, which comprises three military cash-management services: EagleCash, EZpay, and Navy Cash. These programs provide electronic payment methods for goods and services on military bases and Navy
ships. Stored-value cards are in use on more than 80 military bases and installations in 19 countries (including the United States) and on board more than 135 ships. In 2021, the Reserve
Banks continued to provide operations and customer support, replaced legacy equipment, and
piloted new functionality and capabilities for stored-value cards.
The Reserve Banks also work with the Treasury to expand the use of electronic payment services
for payments made to the Treasury’s account at the Federal Reserve. The Reserve Banks operate
and maintain Pay.gov, an application that allows the public to use the internet to initiate and authorize payments to the federal government using a U.S.-held bank account (through ACH Debit), a
credit or debit card, or a digital wallet through services such as PayPal or Amazon Pay. In 2021,
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Pay.gov processed 84.7 million online payments valued at $217.1 billion. In addition, the Reserve
Banks operated applications that facilitated the movement of $28.3 billion in commercial deposits
to the Treasury’s account at the Federal Reserve. The Reserve Banks also processed and settled
178.9 million electronic payment transactions valued at $782.4 billion.
Additionally, the Reserve Banks work with the Treasury to develop, operate, and maintain Do Not
Pay, as well as provide agency outreach and data analytics services. Do Not Pay is designed to
protect the integrity of the federal government’s payment processes by assisting federal agencies
in preventing and detecting improper payments.9 In fiscal year 2021, Do Not Pay assisted more
than 20 agencies in identifying or stopping more than 20,000 improper payments totaling more
than $42.2 million.
Financing and Securities Services
The Reserve Banks work closely with the Treasury in support of the financing needed to operate
the federal government, which includes forecasting, scheduling, auctioning, issuing, settling, maintaining, and redeeming marketable Treasury securities (for example, bills, notes, and bonds). The
Reserve Banks also support the Treasury’s efforts to encourage savings by issuing, maintaining,
and redeeming U.S. savings bonds, as well as providing operations and fulfillment services. The
Reserve Banks provide customer service and operate the automated systems that support marketable Treasury securities and savings bonds.
In 2021, the Treasury, supported by the Reserve Banks, conducted 445 auctions that resulted in
the Treasury’s awarding $17.8 trillion in wholesale Treasury marketable securities to investors.10
The Reserve Banks also supported the issuance and servicing of $158.0 billion in savings bonds
and marketable securities.
Reserve Bank expenses for financing and securities services were $184.5 million in 2021, an
increase of $5.2 million, or 2.9 percent. This increase is primarily attributable to efforts to modernize the applications that facilitate the issuance, maintenance, and redemption of marketable Treasury securities and savings bonds.
Accounting and Reporting Services
The Reserve Banks support the Treasury’s accounting and reporting functions by forecasting,
monitoring, and managing the government’s overall cash requirements, cash flow, and governmentwide accounting services. The Reserve Banks also support the Treasury’s publication of the daily
9
10
Do Not Pay is authorized and governed by the Payment Integrity Information Act of 2019.
In 2021, the Treasury, supported by the Reserve Banks, conducted additional cash management bill auctions to support
the Treasury’s fiscal policy response to the COVID-19 pandemic and the federal debt limit.
Payment System and Reserve Bank Oversight
and monthly Treasury statements; the Combined Statement of Receipts, Outlays, and Balances of
the United States Government; and the Financial Report of the United States Government.11
Reserve Bank expenses for financial accounting and reporting services were $77.0 million in
2021, an increase of $7.7 million, or 11.0 percent, primarily attributable to higher indirect costs.
The programs that contributed most to Reserve Bank expenses in 2021 were the Cash Accounting
Reporting System and G-Invoicing.
The Reserve Banks operate and maintain the Cash Accounting Reporting System, which handles
accounting and reporting for all federal agencies and is the electronic system of record for the government’s financial data. In 2021, the Reserve Banks continued to provide operations support and
implemented application enhancements. In addition, the Reserve Banks operate and maintain the
G-Invoicing application, which is the long-term solution for federal agencies to manage intragovernmental financial transactions. In 2021, the Reserve Banks continued to work with the Treasury to
coordinate outreach and implement system enhancements, which will prepare agencies to meet
the federal government mandate to adopt G-Invoicing.12
Infrastructure and Technology Services
The Reserve Banks design, build, and maintain the technology infrastructures and environments
that host the majority of applications that the Reserve Banks develop, operate, or maintain on
behalf of the Treasury.
In 2021, the Reserve Banks continued to build out and migrate applications to a cloud platform in
alignment with the Treasury's cloud computing strategy.13 The Reserve Banks continued to effectively operate infrastructures, plan for end-of-life issues, increase automation, and strengthen their
systems against a host of new and evolving cybersecurity threats.
Reserve Bank expenses for infrastructure and technology services were $129.3 million in 2021, a
decrease of $21.1 million, or 14.0 percent, primarily attributable to lower-than-budgeted infrastructure investments and project delays.
11
12
13
The Daily Treasury Statement summarizes the U.S. Treasury’s cash and debt operations for the federal government on a
modified cash basis and can be found at https://fiscal.treasury.gov/reports-statements/dts/. The Monthly Treasury
Statement summarizes the financial activities of the federal government and off-budget federal entities and can be
found at https://www.fiscal.treasury.gov/reports-statements/mts/. The Combined Statement of Receipts, Outlays, and
Balances of the United States Government is recognized as the official publication of the government’s receipts and outlays and can be found at https://fiscal.treasury.gov/reports-statements/combined-statement/. The Financial Report of
the United States Government provides the President, Congress, and the American people with a comprehensive view of
the federal government's finances and can be found at https://fiscal.treasury.gov/reports-statements/financial-report/.
Federal agencies must implement G-Invoicing for all buy/sell intragovernmental transactions by October 2022. Additional
information can be found at https://fiscal.treasury.gov/g-invoice/.
The Federal Cloud Computing Strategy—Cloud Smart—is a long-term, high-level strategy to drive Federal agency cloud
adoption. Additional information can be found at https://www.cio.gov/policies-and-priorities/cloud-smart/.
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Services Provided to Other Entities
The Reserve Banks, when permitted by federal statute or when required by the Secretary of the
Treasury, also provide other domestic and international entities with U.S.-dollar-denominated
banking services, which include funds, securities, and gold safekeeping; securities clearing, settlement, and investment; and correspondent banking.
The Reserve Banks also issue and maintain, in electronic form, many federal agency, governmentsponsored enterprise, and certain international organizations securities. The majority of securities
services are performed for the Federal Home Loan Mortgage Association (Freddie Mac), the Federal National Mortgage Association (Fannie Mae), and the Government National Mortgage Association (Ginnie Mae).
Reserve Bank expenses for services provided to other entities were $24.6 million in 2021, a
decrease of $14.7 million, or 37.5 percent, which is driven by the Reserve Banks’ implementation
of a new cost accounting framework.
Evolutions and Improvements to the System
The Federal Reserve performs many functions in the payment system, including payment system
operator, supervisor and regulator of financial institutions and systemically important financial
market utilities, researcher, and catalyst for system improvements.
Digital Innovations
The Federal Reserve views developments in financial technology through the lens of its longstanding public policy goals of safety and soundness of financial institutions, consumer protection, safety and efficiency of the payment system, and financial stability. Within that framework,
the Federal Reserve is actively engaged in supporting responsible innovation while ensuring associated risks are appropriately identified and managed.
The Federal Reserve is studying the implications of emerging financial technologies, including distributed ledger technologies and associated financial products such as cryptocurrencies and
stablecoins. These technologies have raised fundamental questions about appropriate legal and
regulatory safeguards. The Federal Reserve continues to monitor developments and works with
domestic and international counterparts to better understand and manage the implications of
these innovations.
Payment System Regulation
Congress has assigned to the Board responsibility for implementing the Federal Reserve Act and
certain other laws pertaining to a wide range of banking and financial activities, including those
Payment System and Reserve Bank Oversight
Box 5.2. The Federal Reserve’s Research Work on Central Bank
Digital Currency
Like other central banks, the Federal Reserve is engaged in research into central bank digital currency
(CBDC). Its work does not indicate a decision to issue a CBDC; the research focuses on how a CBDC
could improve on an already safe, effective, dynamic, and efficient domestic payments system and recognizes that implications and risks must be thought through very carefully. The design of a CBDC would
raise important monetary policy, financial stability, consumer protection, cybersecurity, legal, and privacy
considerations that would require careful thought and analysis.
The Federal Reserve is engaged in research and experimentation focused on better understanding
technical issues related to CBDC. The Technology Lab at the Federal Reserve Board is looking at digital
currencies broadly with a focus on understanding different technologies and design implications.
Project Hamilton, a collaboration between the Federal Reserve Bank of Boston and the Massachusetts
Institute of Technology’s Digital Currency Initiative, is a multiyear research project to research retail
CBDC designs and gain a hands-on understanding of a CBDC’s technical challenges and opportunities.
The Federal Reserve Bank of New York has established an Innovation Center to facilitate collaboration
with the Bank for International Settlements on financial innovation. These ongoing research and experimentation initiatives are focused on how a CBDC might act as a complement to existing payment
mechanisms—such as cash and bank deposits—not as a replacement for them.
The Federal Reserve is also actively engaged with a wide variety of stakeholders, such as those from
government, academia, and the private sector, to gather perspectives and expertise about potential
CBDC uses, the range of design options, and other considerations. Additionally, the Federal Reserve is
in contact with international counterparts and is closely following developments in other jurisdictions.
The Federal Reserve collaborates with six other central banks and the Bank for International Settlements. The group produced a report on foundational principles for CBDCs continued this work with further analysis of policy options and practical implementation issues.1 The group issued reports in 2021
on system design and interoperability, user needs and adoption, and financial stability implications.2
The Federal Reserve also collaborated with the Group of Seven to produce a set of public policy principles for retail CBDCs.3 It also works with the Group of 20 on ways to improve cross-border payments,
which includes studying how CBDCs might be used for cross-border payments.4
To help stimulate broad conversation, the Federal Reserve Board worked on a discussion paper, issued
in 2022, outlining its current thinking on digital payments, with a particular focus on the benefits and
risks associated with a CBDC in the U.S. context. The paper represents the beginning of what will be a
thoughtful and deliberative process.5
1
2
3
4
5
Bank for International Settlements, Central Bank Digital Currencies: Foundational Principles and Core Features (Basel: BIS,
October 2020), https://www.bis.org/publ/othp33.pdf.
Bank for International Settlements, “Central Banks and the BIS Explore What a Retail CBDC Might Look Like,” press release,
September 2021, https://www.bis.org/press/p210930.htm.
G7, Public Policy Principles for Retail Central Bank Digital Currencies (CBDCs), October 2021, https://
assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1025235/
G7_Public_Policy_Principles_for_Retail_CBDC_FINAL.pdf.
Financial Stability Board, G20 Roadmap for Enhancing Cross-border Payments: First consolidated progress report (Washington: FSB,
October 2021), https://www.fsb.org/wp-content/uploads/P131021-1.pdf.
Board of Governors of the Federal Reserve System, Money and Payments: The U.S. Dollar in the Age of Digital Transformation, January
2022, https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf.
related to the payment and settlement system. The Board implements those laws in part through
its regulations (see the Board’s website at https://www.federalreserve.gov/supervisionreg/
reglisting.htm).
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Other Improvements and Efforts
The Reserve Banks have been engaged in a number of multiyear technology initiatives that will
modernize their priced-services processing platforms. These investments are expected to enhance
efficiency, the overall quality of operations, and the Reserve Banks’ ability to offer additional services, consistent with the longstanding principles of fostering efficiency and safety, to depository
institutions. The Reserve Banks continued to enhance the resiliency and information security posture of the Wholesale Payment Systems through Reserve Bank led cyber initiatives to respond to
environmental threats and cyberthreats. The Reserve Banks also recently implemented a new
FedACH-processing platform to improve the efficiency and reliability of FedACH operations. In
2021, the Reserve Banks advanced the safety and security of FedLine Solutions by making progress on key infrastructure upgrades and network modernization, as well as through proactive monitoring of an evolving threat environment and by strengthening endpoint security policies.
During 2021, the Federal Reserve continued work to replace the aging high-speed currencyprocessing equipment and sensors at the Reserve Banks for deployment through 2028. In 2021,
the Federal Reserve began the production development phase of the project to develop the highspeed currency-processing equipment for delivery beginning in 2025. In advance of the production
rollout, prototype and preliminary equipment will be installed and tested at pilot offices through
2024. A system integration effort was initiated to prepare currency sensors and develop software
for compatibility with the equipment.
The improvement of the efficiency, effectiveness, and security of information technology (IT) services and operations continued to be a central focus of the Reserve Banks. Under the leadership
of the Federal Reserve's National IT organization and CIO, the System IT Strategic Plan was
refreshed in 2021 for 2021–23 to set priorities, align IT direction and resources, and ensure that
IT leaders and team members are working towards a common set of goals. The goals of the plan
are security, simplicity, and productivity, with priorities in ensuring a secure and reliable infrastructure, modernized application delivery, cloud and modern infrastructure, digital work and collaboration, data management and analytics, cybersecurity, and IT workforce skills. National IT continues
to guide the plan and track progress toward the goals. Additional efforts were initiated to
strengthen incident communication requirements across Reserve Bank payment systems and
operating units in response to a significant IT outage that affected the Federal Reserve's payment
systems in February.
The Reserve Banks remained vigilant about their cybersecurity posture, investing in risk-mitigation
initiatives and programs and continuously monitoring and assessing cybersecurity risks to operations and protecting systems and data. The Federal Reserve implemented several cybersecurity
initiatives that enhanced identity and access management capabilities; enhanced the ability to
respond to evolving cybersecurity threats with agility, decisiveness, and speed by streamlining
Payment System and Reserve Bank Oversight
decisionmaking during a cybersecurity incident; and continued to improve continuous monitoring
capabilities of critical assets. Additionally, as ransomware continues to pose a critical operational
and reputational risk to the Federal Reserve, the Reserve Banks began a Systemwide effort in
2021 to strengthen the Federal Reserve’s processes, infrastructure, and controls to prevent ransomware attacks and to respond to and mitigate successful attacks.
Several Reserve Banks took action in 2021 to maintain and renovate their facilities. Major multiyear facility programs at several Reserve Bank offices continued, focused on updating obsolescent
building systems to ensure infrastructure resiliency and continuity of operations. The Philadelphia
Reserve Bank continued construction activities for its multiyear program to replace its entire
mechanical and electrical infrastructure. Other programs addressed the need to update office and
operations areas in support of efficiency and working environment.
For more information on the acquisition costs and net book value of the Reserve Banks and
Branches, see table G.13 in appendix G (“Statistical Tables”) of this annual report.
Oversight of Federal Reserve Banks
The combined financial statements of the Reserve Banks and the financial statements of each of
the 12 Reserve Banks are audited annually by an independent public accounting firm retained by
the Board of Governors.14 In addition, the Reserve Banks are subject to oversight by the Board of
Governors, which performs its own reviews (see box 5.3).
The Reserve Banks use the 2013 framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to assess their internal controls over financial
reporting, including the safeguarding of assets. The management of each Reserve Bank annually
provides an assertion letter to its board of directors that confirms adherence to COSO standards.
The Federal Reserve Board engaged KPMG LLP (KPMG) to audit the 2021 combined and individual
financial statements of the Reserve Banks and the financial statements of the five limited liability
companies (LLCs) that are associated with the Board of Governors’ actions to address the coronavirus pandemic, of which four LLCs are consolidated in the statements of the Federal Reserve
Bank of New York and one LLC is consolidated in the statements of the Federal Reserve Bank of
Boston.15
14
15
See “Federal Reserve Banks Combined Financial Statements” at https://www.federalreserve.gov/aboutthefed/auditedannual-financial-statements.htm.
In addition, KPMG audited the Office of Employee Benefits of the Federal Reserve System (OEB), the Retirement Plan for
Employees of the Federal Reserve System (System Plan), and the Thrift Plan for Employees of the Federal Reserve
System (Thrift Plan). The System Plan and the Thrift Plan provide retirement benefits to employees of the Board, the Federal Reserve Banks, the OEB, and the Consumer Financial Protection Bureau.
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Box 5.3. Payment System Research and Analysis
The Federal Reserve conducts research on a wide range of topics related to the design and activities of
payment, clearing, and settlement systems and financial market infrastructures, as well as the role of
these systems in the commercial activities of consumers, businesses, and governments.
In 2021, topics examined in Federal Reserve research included the following:
• measurement and analysis of short-run developments and long-run trends in the use of new and
established payment methods1
• drivers and potential effects of innovations in the payment system, particularly those related to new
and emerging technologies, such as instant payments and digital assets
• design, oversight, and regulation of financial market infrastructures
• developments related to payments fraud
For more information, see the Board’s Payment Research website at https://www.federalreserve.gov/
paymentsystems/payres_about.htm; see also Federal Reserve Bank Payments Groups at https://
www.federalreserve.gov/paymentsystems/payres_fedgroups.htm.
1
In particular, see information about recent releases by the Federal Reserve Payments Study, available at https://
www.federalreserve.gov/paymentsystems/fr-payments-study.htm.
In 2021, KPMG also conducted audits of internal controls over financial reporting for each of the
Reserve Banks. Fees for KPMG services totaled $9.8 million, of which approximately $2.3 million
was for the audits of the LLCs.16 To ensure auditor independence, the Board of Governors requires
that KPMG be independent in all matters relating to the audits. Specifically, KPMG may not perform services for the Reserve Banks or affiliated entities that would place it in a position of
auditing its own work, making management decisions on behalf of the Reserve Banks, or in any
other way impairing its audit independence. In 2021, the Reserve Banks did not engage KPMG for
significant non-audit services.
The Board’s reviews of the Reserve Banks include a wide range of oversight activities, conducted
primarily by its Division of Reserve Bank Operations and Payment Systems. Division personnel
monitor, on an ongoing basis, the activities of each Reserve Bank, Federal Reserve Information
Technology, and the System’s Office of Employee Benefits (OEB). The oversight program identifies
the most strategically important Reserve Bank current and emerging risks and defines specific
approaches to achieve a comprehensive evaluation of the Reserve Banks’ controls, operations,
and management effectiveness.
The comprehensive reviews include an assessment of the internal audit function’s effectiveness
and its conformance to the Institute of Internal Auditors’ (IIA) International Standards for the Pro-
16
Each LLC will reimburse the Board of Governors for the fees related to the audit of its financial statements from the
entity’s available assets.
Payment System and Reserve Bank Oversight
fessional Practice of Internal Auditing, applicable policies and guidance, and the IIA’s code
of ethics.
The Board also reviews the System Open Market Account (SOMA) and foreign currency holdings
annually to
• determine whether the New York Reserve Bank, while conducting the related transactions and
associated controls, complies with the policies established by the Federal Open Market Committee (FOMC); and
• assess the SOMA-related IT project management and application development, vendor management, and system resiliency and contingency plans.
In addition, KPMG audits the year-end schedule of the SOMA participated asset and liability
accounts and the related schedule of participated income accounts. The FOMC is provided with
the external audit reports and a report on the Board review.
Income and Expenses
Annually, the Board releases the Combined Reserve Banks financial statements with financial
information as of December 31 and includes the accounts and results of operations of each of the
12 Reserve Banks.
In 2021, income was $123.1 billion, compared with $102.0 billion in 2020; expenses totaled
$15.2 billion, compared with $13.6 billion in 2020; and net income before remittances to the
Treasury totaled $107.9 billion in 2020, compared with $88.6 billion in 2020.
Table 5.3 summarizes the income, expenses, and distributions of net earnings of the Reserve
Banks for 2021 and 2020. Appendix G of this report, “Statistical Tables,” provides more detailed
information on the Reserve Banks, including the consolidated LLCs.17 Additionally, appendix G
summarizes the Reserve Banks’ 2021 budget performance and 2022 budgets, budgeting processes, and trends in expenses and employment.
SOMA Holdings
The FOMC has authorized and directed the Federal Reserve Bank of New York to execute open
market transactions to the extent necessary to carry out the domestic policy directive adopted by
the FOMC. The Federal Reserve Bank of New York, on behalf of the Reserve Banks, holds in the
SOMA the resulting securities, which include U.S. Treasuries, federal agency and governmentsponsored enterprise debt securities, federal agency and government-sponsored enterprise
17
Table G.8A is a statement of condition for each Reserve Bank, table G.9 details the income and expenses of each
Reserve Bank for 2021, table G.10 shows a condensed statement for each Reserve Bank for the years 1914 through
2021, and table G.12 gives the number and annual salaries of officers and employees for each Reserve Bank.
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108th Annual Report | 2021
Table 5.3. Income, expenses, and distribution of net earnings of the Federal Reserve Banks, 2021 and
2020
Millions of dollars
Item
Current income
Loan interest income
SOMA interest income
Other current income1
2021
2020
123,059
102,036
229
358
122,326
101,184
504
494
11,008
13,455
Operating expenses
5,092
4,926
Reimbursements
–787
–732
Net expenses
System pension service cost
Interest paid on depository institutions deposits and others
Interest expense on securities sold under agreements to repurchase
Other expenses
Current net income
Net additions to (deductions from) current net income
Treasury securities gains, net
Federal agency and government-sponsored enterprise mortgage-backed securities
(losses) gains, net
Foreign currency translation gains (losses), net
Other additions or deductions
Assessments by the Board of Governors2
For Board expenditures
For currency costs
For Consumer Financial Protection Bureau costs
3
Net income before providing for remittances to the Treasury
Consolidated variable interest entities: Income (loss), net
Consolidated variable interest entities: Non-controlling interest (income) loss, net
954
662
5,333
7,883
414
711
2
4
112,051
88,581
–1,538
2,197
0
2
–35
664
–1,856
1,542
353
–12
2,633
2,295
970
947
1,035
831
628
517
107,880
88,482
975
–1,785
–927
1,854
Reserve Bank and consolidated variable interest entities net income before providing
for remittances to the Treasury
107,928
88,552
Earnings remittances to the Treasury
109,025
86,890
Net income after providing for remittances to the Treasury
–1,097
1,662
Other comprehensive gain (loss)
–1,640
–1,276
Comprehensive income
543
386
109,568
87,276
Dividends on capital stock
583
386
Transfer from surplus and change in accumulated other comprehensive income
–40
0
109,025
86,890
Total distribution of net income
Earnings remittances to the Treasury
1
2
3
Includes income from priced services and securities lending fees.
A detailed account of the assessments and expenditures of the Board of Governors appears in the Board of Governors Financial Statements (see https://www.federalreserve.gov/aboutthefed/audited-annual-financial-statements.htm).
The Board of Governors assesses the Reserve Banks to fund the operations of the Consumer Financial Protection Bureau.
Payment System and Reserve Bank Oversight
mortgage-backed securities, investments denominated in foreign currencies, and commitments to
buy or sell related securities.18
Table 5.4 summarizes the average daily assets (liabilities), current income (expenses), and
average interest rate of the SOMA holdings for 2021 and 2020.
Lending
In 2021, the average daily balance and the average rate of interest earned for Reserve Bank
lending programs were as follows:
• Primary, secondary, and seasonal credit extended was $754 million and 0.25 percent.
• Primary Dealer Credit Facility (PDCF) was $289 million and 0.25 percent.
• Money Market Mutual Fund Liquidity Facility (MMLF) was $1,394 million and 1.25 percent.
• Paycheck Protection Program Liquidity Facility (PPPLF) was $63,379 million and 0.35 percent.
In addition, the Reserve Banks provided loans to special purpose vehicles (SPVs) that were established to administer liquidity programs created in response to the coronavirus pandemic. These
SPVs provided liquidity to market participants through the purchase of assets in accordance with
the terms of each liquidity program.
18
See table G.2 in appendix G for a list of Federal Reserve holdings of U.S. Treasuries and federal agency securities.
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108th Annual Report | 2021
Table 5.4. System Open Market Account holdings and loans of the Federal Reserve Banks, 2021 and
2020
Millions of dollars, except as noted
Average daily assets (+)/liabilities (–)
Item
2021
2020
Year-overyear change
Current income (+)/expense (–)
2021
Year-overyear change
2020
Average interest rate
(percent)
2021
2020
System Open Market Account (SOMA) holdings
Securities purchased under
agreements to resell
162
98,003
–97,841
1
723
–722
0.35
0.74
U.S. Treasury securities, net1
5,456,776
4,061,849
1,394,927
92,610
67,539
25,071
1.70
1.66
Federal agency and governmentsponsored enterprise (GSE)
mortgage-backed securities, net2
2,417,179
1,831,907
585,272
29,619
32,338
–2,719
1.23
1.77
2,622
2,646
–24
134
135
–1
5.11
5.1
Government-sponsored enterprise
debt securities, net1
Foreign currency denominated
investments3
21,294
21,127
167
–45
–40
–5
–0.21
–0.19
Central bank liquidity swaps4
2,178
134,529
–132,351
7
489
–482
0.33
0.36
Other SOMA assets
5
61
74
–13
0.66
0.04
Total SOMA assets
7,900,272
6,150,135
1,750,137
122,326
101,184
21,142
1.55
1.65
Securities sold under agreements to
repurchase: primary dealers and
expanded counterparties
–717,540
–8,749
–708,791
–337
–14
–323
0.05
0.16
Securities sold under agreements to
repurchase: foreign official and
international accounts
–251,068
–226,215
–24,853
–77
–697
620
0.03
0.31
Total securities sold under
agreements to repurchase
–968,608
234,964
–733,643
–414
–711
297
–4,368
–4,188
–180
n/a
n/a
n/a
Other SOMA liabilities6
*
*
–*
0.04
n/a
0.30
n/a
Total SOMA liabilities
–972,976
–239,152
–733,824
–414
–711
297
0.04
0.30
Total SOMA holdings
6,927,296
5,910,983
1,016,313
121,912
100,473
21,439
1.76
1.70
1
Face value, net of unamortized premiums and discounts.
Face value, which is the remaining principal balance of the securities, net of unamortized premiums and discounts. Does not include
unsettled transactions.
3
Foreign currency denominated assets are revalued daily at market exchange rates.
4
Dollar value of foreign currency held under these agreements valued at the exchange rate to be used when the foreign currency is returned
to the foreign central bank. This exchange rate equals the market exchange rate used when the foreign currency was acquired from the foreign central bank.
5
Cash and short-term investments related to the federal agency and government-sponsored enterprise mortgage-backed securities (GSE
MBS) portfolio.
6
Represents the obligation to return cash margin posted by counterparties as collateral under commitments to purchase and sell federal
agency and GSE MBS, as well as obligations that arise from the failure of a seller to deliver securities on the settlement date.
n/a Not applicable.
* Less than $500,000.
2
Payment System and Reserve Bank Oversight
Pro Forma Financial Statements for Federal Reserve
Priced Services
Table 5.5. Pro forma balance sheet for Federal Reserve priced services, December 31, 2021 and 2020
Millions of dollars
Item
2021
2020
Short-term assets (note 1)
Imputed investments
Receivables
Inventory
626.0
569.2
44.4
40.8
0.5
0.7
Prepaid expenses
25.2
12.4
Items in process of collection
76.4
131.7
Total short-term assets
772.5
754.8
Long-term assets (note 2)
Premises
93.2
116.7
Furniture and equipment
44.0
32.8
Leases, leasehold improvements, and long-term
prepayments
69.5
74.7
Deferred tax asset
179.7
Total long-term assets
Total assets
178.1
386.4
402.3
1,158.9
1,157.1
Short-term liabilities (note 3)
Deferred-availability items
Short-term debt
Short-term payables
659.4
701.0
0.0
30.5
37.8
Total short-term liabilities
23.4
697.2
754.8
Long-term liabilities (note 3)
Long-term debt
Accrued benefit costs
Total long-term liabilities
Total liabilities
Equity (including accumulated other comprehensive loss of
$686.5 million and $630.7 million at December 31,
2021 and 2020, respectively)
Total liabilities and equity (note 3)
0.0
6.3
403.7
338.2
403.7
344.5
1,101.0
1,099.2
57.9
57.9
1,158.9
1,157.1
Note: Components may not sum to totals because of rounding. The accompanying notes are an integral part of these pro forma priced
services financial statements.
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Table 5.6. Pro forma income statement for Federal Reserve priced services, 2021 and 2020
Millions of dollars
Item
2021
2020
Revenue from services provided to depository institutions (note 4)
456.0
446.2
Operating expenses (note 5)
448.3
426.9
7.7
19.3
Income from operations
Imputed costs (note 6)
Interest on debt
0.4
Interest on float
–0.1
Sales taxes
0.3
–0.8
3.4
3.7
Income from operations after imputed costs
3.9
3.4
4.0
15.9
Other income and expenses (note 7)
Investment income
0.0
0.7
Income before income taxes
4.0
Imputed income taxes (note 6)
0.8
3.7
Net income
3.2
13.0
Memo: Targeted return on equity (note 6)
4.4
5.9
16.6
Note: Components may not sum to totals because of rounding. The accompanying notes are an integral part of these pro forma priced
services financial statements.
Table 5.7. Pro forma income statement for Federal Reserve priced services, by service, 2021
Millions of dollars
Total
Commercial
check collection
Commercial
ACH
Fedwire
funds
Fedwire
securities
Revenue from services (note 4)
456.0
109.9
165.7
152.7
27.7
Operating expenses (note 5)1
448.3
103.3
166.6
152.3
26.0
Income from operations
7.7
6.6
–0.9
0.4
1.6
Imputed costs (note 6)
3.7
1.0
1.3
1.3
0.1
Income from operations after imputed costs
4.0
5.7
–2.2
–0.8
1.4
Other income and expenses, net (note 7)
0.0
0.0
0.0
0.0
0.0
Income before income taxes
4.0
5.7
–2.2
–0.8
1.4
Imputed income taxes (note 6)
0.8
1.1
–0.5
–0.2
0.3
Net income
3.2
4.5
–1.7
–0.7
1.3
Memo: Targeted return on equity (note 6)
4.4
1.1
1.7
1.5
0.2
99.8
103.2
98.0
98.6
103.8
Item
Cost recovery (percent) (note 8)
Note: Components may not sum to totals because of rounding. Excludes amounts related to development of the FedNow Service. The accompanying notes are an integral part of these pro forma priced services financial statements.
1
Operating expenses include pension costs, Board expenses, and reimbursements for certain nonpriced services.
Payment System and Reserve Bank Oversight
Notes to Pro Forma Financial Statements for Priced Services
(1) Short-Term Assets
Receivables are composed of fees due the Reserve Banks for providing priced services and the
share of suspense- and difference-account balances related to priced services.
Items in process of collection are gross Federal Reserve cash items in process of collection
(CIPC), stated on a basis comparable to that of a commercial bank. They reflect adjustments for
intra-Reserve Bank items that would otherwise be double-counted on the combined Federal
Reserve balance sheet and adjustments for items associated with nonpriced items (such as those
collected for government agencies). Among the costs to be recovered under the Monetary Control
Act is the cost of float, or net CIPC during the period (the difference between gross CIPC and
deferred-availability items, which is the portion of gross CIPC that involves a financing cost), valued
at the federal funds rate. Investments of excess financing derived from credit float are assumed to
be invested in federal funds.
(2) Long-Term Assets
Long-term assets consist of long-term assets used solely in priced services and the priced-service
portion of long-term assets shared with nonpriced services, including a deferred tax asset related
to the priced services pension and postretirement benefits obligation. The tax rate associated with
the deferred tax asset was 20.8 percent for 2021 and 22.1 percent for 2020.
Long-term assets also consist of an estimate of the assets of the Board of Governors used in the
development of priced services.
(3) Liabilities and Equity
Under the matched-book capital structure for assets, short-term assets are financed with shortterm payables and imputed short-term debt, if needed. Long-term assets are financed with longterm liabilities, imputed long-term debt, and imputed equity, if needed. To meet the Federal
Deposit Insurance Corporation (FDIC) requirements for a well-capitalized institution, in 2021 equity
is imputed at 5.0 percent of total assets and 10.5 percent of risk-weighted assets, and 2020
equity is imputed at 5.0 percent of total assets and 10.3 percent of risk-weighted assets.
The Board’s Payment System Risk policy reflects the international standards for financial market
infrastructures developed by the Committee on Payment and Settlement Systems and the Technical Committee of the International Organization of Securities Commissions in the Principles for
Financial Market Infrastructures. The policy outlines the expectation that the Fedwire Services will
meet or exceed the applicable risk-management standards. Although the Fedwire Funds Service
does not face the risk that a business shock would cause the service to wind down in a disorderly
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108th Annual Report | 2021
manner and disrupt the stability of the financial system, in order to foster competition with privatesector financial market infrastructures, the Reserve Banks’ priced services will hold six months of
the Fedwire Funds Service’s current operating expenses as liquid net financial assets and equity
on the pro forma balance sheet and, if necessary, impute additional assets and equity to meet the
requirement. The imputed assets held as liquid net financial assets are cash items in process of
collection, which are assumed to be invested in federal funds. In 2021, an additional balance of
$43 million was imputed to meet sufficient assets and equity requirements. In 2020, there were
sufficient assets and equity such that additional imputed balances were not required.
In accordance with ASC 715, Compensation–Retirement Benefits, the Reserve Banks record the
funded status of pension and other benefit plans on their balance sheets. To reflect the funded
status of their benefit plans, the Reserve Banks recognize the deferred items related to these
plans, which include prior service costs and actuarial gains or losses, on the balance sheet. This
results in an adjustment to the pension and other benefit plan liabilities related to priced services
and the recognition of an associated deferred tax asset with an offsetting adjustment, net of tax,
to accumulated other comprehensive income (AOCI), which is included in equity. The Reserve Bank
priced services recognized a pension liability, which is a component of accrued benefit costs, of
$27.3 million in 2021 and $44.5 million in 2020. The change in the funded status of the pension
and other benefit plans resulted in a corresponding decrease in accumulated other comprehensive
loss of $55.9 million in 2021.
(4) Revenue
Revenue represents fees charged to depository institutions for priced services and is realized
from each institution through direct charges to an institution’s account.
(5) Operating Expenses
Operating expenses consist of the direct, indirect, and other general administrative expenses of
the Reserve Banks for priced services (that is, Check, ACH, FedWire Funds, and FedWire Securities) and the expenses of the Board related to the development of priced services. Board
expenses were $6.6 million in 2021 and $6.7 million in 2020. Operating expenses exclude
amounts related to the development of the FedNow Service.
In accordance with ASC 715, the Reserve Bank priced services recognized qualified pension-plan
service costs of $65.3 million in 2021 and $37.1 million in 2020. Operating expenses also
include the nonqualified service costs of $4.3 million in 2021 and $2.1 million in 2020. In 2019
Reserve Banks adopted an update to ASC 715 requiring disaggregation of other components of
net benefit expense from service costs. The adoption of ASC 715 does not change the systematic
approach required by generally accepted accounting principles to recognize the expenses associated with the Reserve Banks’ benefit plans in the income statement. As a result, these expenses
Payment System and Reserve Bank Oversight
do not include amounts related to changes in the funded status of the Reserve Banks’ benefit
plans, which are reflected in AOCI.
The income statement by service reflects revenue, operating expenses, imputed costs, other
income and expenses, and cost recovery. The tax rate associated with imputed taxes was
20.8 percent for 2021 and 22.1 percent for 2020.
(6) Imputed Costs
Imputed costs consist of income taxes, return on equity, interest on debt, sales taxes, and interest
on float. Many imputed costs are derived from the PSAF model. The 2021 cost of short-term debt
imputed in the PSAF model is based on nonfinancial commercial paper rates; the cost of imputed
long-term debt is based on Merrill Lynch Corporate and High Yield Index returns; and the effective
tax rate is derived from U.S. publicly traded firm data, which serve as the proxy for the financial
data of a representative private-sector firm. The after-tax rate of return on equity is based on the
returns of the equity market as a whole.19
Interest is imputed on the debt assumed necessary to finance priced-service assets. These
imputed costs are allocated among priced services according to the ratio of operating expenses,
less shipping expenses, for each service to the total expenses, less the total shipping expenses,
for all services.
Interest on float is derived from the value of float to be recovered for the check and ACH services,
Fedwire Funds Service, and Fedwire Securities Services through per-item fees during the period.
Float income or cost is based on the actual float incurred for each priced service.
The following shows the daily average recovery of actual credit float by the Reserve Banks for
2021 and 2020, in millions of dollars:20
Daily average recovery of actual float
Total float
Float not related to priced services1
Float subject to recovery through per-item fees
1
2021
2020
−185.2
−248.1
−31.9
−5.4
−153.3
−242.7
Float not related to priced services includes float generated by services to government agencies and by other central bank services.
Float that is created by account adjustments due to transaction errors and the observance of nonstandard holidays by some depository institutions was recovered from the depository institutions
19
20
See Federal Reserve Bank Services Private-Sector Adjustment Factor, 77 Fed. Reg. 67,007 (November 8, 2012),
https://www.gpo.gov/fdsys/pkg/FR-2012-11-08/pdf/2012-26918.pdf, for details regarding the PSAF methodology change.
Credit float occurs when the Reserve Banks debit the paying bank for checks and other items before providing credit to
the depositing bank.
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108th Annual Report | 2021
through charging institutions directly. Float subject to recovery is valued at the federal funds rate.
Certain ACH funding requirements and check products generate credit float; this float has been
subtracted from the cost base subject to recovery in 2021 and 2020.
(7) Other Income and Expenses
Other income consists of income on imputed investments. Excess financing resulting from additional equity imputed to meet the FDIC well-capitalized requirements is assumed to be invested
and earning interest at the 3-month Treasury bill rate.
(8) Cost Recovery
Annual cost recovery is the ratio of revenue, including other income, to the sum of operating
expenses, imputed costs, imputed income taxes, and after-tax targeted return on equity. In 2021,
the Federal Reserve implemented a new cost accounting framework in parallel with a new Enterprise Resource Planning application as part of a broader modernization effort.21
21
The Federal Reserve approved the new Cost Accounting Strategic Planning and Reporting (CASPR), replacing the Planning Control System cost accounting framework that was established in 1977 and refreshed in 2001. CASPR establishes cost accounting policies and provides uniform reporting structure for accumulating and reporting cost data for
priced, reimbursable, assessed, and other central bank services for all Federal Reserve Banks. The framework provides
the rules that serve to ensure the consistent application at all Reserve Banks of cost accounting methodologies, data
comparability, and practical measures of the cost of providing Federal Reserve services.
85
6
Consumer and Community Affairs
The Federal Reserve is committed to promoting fair and transparent financial service markets, protecting consumers’ rights, and ensuring that its policies and research take into account consumer
and community perspectives. The Board supports consumer protection, financial inclusion, and
community development through targeted work in supervision, regulatory policy, and research and
analysis (see figure 6.1). This section discusses the Federal Reserve’s key consumer and community affairs activities during 2021:
• formulating and carrying out supervision and examination policy to ensure financial institutions
comply with consumer protection laws and regulations and meet requirements of community
reinvestment laws and regulations
• writing and reviewing regulations that implement consumer protection and community reinvestment laws
• conducting research, analysis, and data collection to identify and assess emerging consumer
and community development issues and risks to inform policy decisions
• identifying issues and advancing what works in community development by engaging, convening,
and informing key stakeholders
Figure 6.1. The Federal Reserve promoted an inclusive, consumer-focused economic recovery in 2021
The Federal Reserve supported economic stability through broad outreach and regulatory transparency while remaining
responsive to financial challenges created by the pandemic. See box 6.1 for information on Federal Reserve initiatives
to ensure a broad-based recovery.
615
CRA ANPR
comment letters
191
Consumer compliance
bank examinations
5,422
Closed consumer
complaints
187
CRA
examinations
Note: CRA ANPR refers to the Community Reinvestment Act Advance Notice of Proposed Rulemaking, the first step in
CRA modernization efforts.
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108th Annual Report | 2021
In order to better understand the pandemic’s ongoing impact on consumer financial circumstances, the Federal Reserve conducted the yearly Survey on Household Economics and Decisionmaking (SHED) in October 2021. For more information on our consumer and community research,
see “Consumer Research and Analysis of Emerging Issues and Policy” later in this section.
Consumer Compliance Supervision
The Federal Reserve’s consumer protection supervision program assesses compliance by state
member banks with a wide range of consumer protection laws and regulations including, but not
limited to, the Truth in Lending Act (TILA), the Electronic Fund Transfer Act, the Equal Credit Opportunity Act (ECOA), the Fair Housing Act (FHA), and the prohibition on unfair or deceptive acts or
practices (UDAP) in the Federal Trade Commission Act (FTC Act). The program also enforces these
laws and regulations and reviews state member banks’ performance under the Community Reinvestment Act (CRA).
The Board’s Division of Consumer and Community Affairs develops policies that govern and establish requirements for oversight of the Reserve Banks’ programs for consumer compliance supervision and examination of state member banks and bank holding companies (BHCs).
In addition, the Board coordinates with the prudential regulators and the Consumer Financial Protection Bureau (CFPB) as part of the supervisory coordination requirements under the Dodd-Frank
Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and ensures that consumer
compliance risk is appropriately incorporated into financial institutions’ consolidated riskmanagement programs.
The Board also oversees the development and delivery of examiner training and supervisionrelated budget and technology efforts; analyzes bank and BHC applications related to consumer
protection, convenience and needs, and the CRA; and oversees the handling of certain types of
consumer complaints by the Reserve Banks and directly processes certain consumer complaints
such as congressional complaints and appeals.
Consumer Compliance Examinations
Examinations are the Federal Reserve’s primary method of ensuring compliance with consumer
protection laws and assessing the adequacy of consumer compliance risk-management systems
within regulated entities.1 During 2021, the Federal Reserve, in conjunction with the federal and
1
The Federal Reserve has examination and enforcement authority for federal consumer financial laws and regulations for
insured depository institutions with assets of $10 billion or less that are state member banks and not affiliates of covered institutions, as well as for conducting CRA examinations for all state member banks regardless of size. The Federal
Reserve also has examination and enforcement authority for certain federal consumer financial laws and regulations for
insured depository institutions that are state member banks regardless of asset size, while the CFPB has examination
and enforcement authority for many federal consumer financial laws and regulations for insured depository institutions
with over $10 billion in assets and their affiliates (covered institutions), as mandated by the Dodd-Frank Act. For data on
Consumer and Community Affairs
state financial institution regulatory agencies, updated regulations to reflect evolving COVID-19
conditions.
Acknowledging the pandemic’s ongoing economic effects, the Board’s regulatory efforts prioritized
convenient access to funds for both consumers and financial services providers. In April 2020, the
Board published an interim final rule lifting the six-per-month limit on savings deposit transfers and
withdrawals. In March 2021, the Board joined the other Federal Financial Institutions Examination
Council agencies in responding to this regulatory update by announcing the suspension of Regulation D examination procedures.2 This change permits financial institutions to remove the six-permonth limit on savings deposit transfers and to allow customers to make an unlimited number of
withdrawals from savings deposits. Financial institutions that decide to suspend enforcement of
the six-transfer limit will no longer need to monitor savings deposit account transaction activity to
track the number of convenient transfers, notify customers who exceed the maximum number of
transfers, or close savings deposit accounts that repeatedly exceed that maximum. Since the disclosure requirements for deposit accounts under the Truth in Savings Act remain in effect, suspension of the Regulation D examination procedures should reduce financial institutions’ compliance
burden without any reduction in consumer financial protection.
The Federal Reserve continued to monitor financial institutions for regulatory compliance during
the year. The number of examinations the Reserve Banks completed increased from 311 in 2020
to 391 in 2021. The breakdown of consumer compliance examinations completed by Reserve
Banks in 2021 included 191 consumer compliance examinations of state member banks,
187 CRA examinations of state member banks, 13 examinations of foreign banking organizations,
and no examinations of Edge Act corporations or agreement corporations.3
Community Reinvestment Act
The CRA requires that the Federal Reserve and other federal banking regulatory agencies
encourage financial institutions to help meet the credit needs of the local communities where they
do business, consistent with safe-and-sound operations. To carry out this mandate, the Federal Reserve
• examines state member banks to assess their performance under the CRA,
2
3
state member banks and other institutions supervised by the Federal Reserve (including number and assets of), see
section 4, “Supervision and Regulation.”
See https://www.federalreserve.gov/supervisionreg/caletters/caltr2106.htm.
Agency and branch offices of foreign banking organizations, Edge Act corporations, and agreement corporations fall
under the Federal Reserve’s purview for consumer compliance activities. An agreement corporation is a type of bank
chartered by a state to engage in international banking. The bank agrees with the Federal Reserve Board to limit its
activities to those allowed by an Edge Act corporation. An Edge Act corporation is a banking institution with a special
charter from the Federal Reserve to conduct international banking operations and certain other forms of business
without complying with state-by-state banking laws. By setting up or investing in Edge Act corporations, U.S. banks can
gain portfolio exposure to financial investing operations not available under standard banking laws.
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• considers banks’ CRA performance in context with other supervisory information when analyzing
applications for mergers and acquisitions, and
• disseminates information about community development practices to bankers and the public
through community development offices at the Reserve Banks.4
The Federal Reserve assesses and rates the CRA performance of state member banks during
examinations conducted by staff at the 12 Reserve Banks. During the 2021 reporting period, the
Reserve Banks completed 187 CRA examinations of state member banks. Of those banks examined, 27 were rated “Outstanding,” 158 were rated “Satisfactory,” 2 were rated “Needs to
Improve,” and none were rated “Substantial Non-Compliance.”
In addition to annual evaluations, the Board continued to expand CRA guidance in response to
pandemic-related activities that would receive consideration in examinations. Staff also continued
to work to reform CRA regulations, analyze public comments to the Board’s advanced notice of proposed rulemaking, and collaborate with interagency partners. See box 6.1 for more information on
the Division of Consumer and Community Affairs’ 2021 CRA reform efforts and policy guidance.5
Consumer Compliance Enforcement Activities
Fair Lending and UDAP Enforcement
The Federal Reserve is committed to ensuring that institutions it supervises comply fully with the
federal fair lending and consumer protection laws, including the ECOA, the FHA, and the FTC Act,
which prohibits unfair or deceptive acts or practices. The ECOA prohibits creditors from discriminating against any applicant, in any aspect of a credit transaction, on the basis of race, color, religion, national origin, sex, marital status, or age. In addition, creditors may not discriminate against
an applicant because the applicant receives income from a public assistance program or has exercised, in good faith, any right under the Consumer Credit Protection Act. The FHA prohibits discrimination in residential real estate–related transactions, including the making and purchasing of
mortgage loans, on the basis of race, color, religion, sex, handicap, familial status, or
national origin.
The Federal Reserve supervises all state member banks for compliance with the FHA. The Federal
Reserve and the CFPB have supervisory authority for compliance with the ECOA. For state member
banks with assets of $10 billion or less, the Board has the authority to enforce the ECOA. For
state member banks with assets over $10 billion, the CFPB has this authority.
4
5
For more information on various community development activities of the Federal Reserve System, see https://
www.fedcommunities.org/.
During 2021, Governor Lael Brainard released a FedCommunities blog about the necessity of CRA reform and participated in a podcast conversation about CRA modernization with Federal Reserve Bank of Atlanta President Raphael
Bostic. See https://fedcommunities.org/necessity-cra-reform/ and https://www.atlantafed.org/news/conferences-andevents/conferences/2021/01/08/modernizing-the-community-reinvestment-act/podcast.aspx.
Consumer and Community Affairs
Box 6.1. Meeting Consumer Needs and Promoting Financial
Inclusion for Economic Recovery
The economy expanded during 2021, as many businesses and schools began to reopen, and some
COVID-19 restrictions were lifted. The Federal Reserve recognized, however, that the pandemic’s effects
were not evenly felt by all groups and developed activities to understand the disparities. The Board’s
Division of Consumer and Community Affairs (DCCA) conducted analysis of banking practices, reviewed
Community Reinvestment Act (CRA) guidance, and examined financial inclusion to inform policy actions.
Throughout the year, DCCA initiatives, research, and events kept stakeholders apprised of implications
of the pandemic’s impact and changing policies.
Supervision, Regulation, and Reform
Community banks played a crucial role in supporting small businesses, families, and individuals during
the pandemic, underscoring the importance of providing online products and services. To assist community banks in their efforts to serve customers’ financial needs through multiple delivery channels,
the Board issued a variety of publications and guidance on fintech. The first 2021 issue of Consumer
Compliance Outlook featured the article, “Technological Innovation Is Essential to the Future of Community Banking in America,” by Governor Michelle Bowman.1 This article emphasized the significance of
community bank/fintech firm partnerships to keep pace with the evolving financial services landscape.
To ensure community banks understand supervisory expectations related to third-party risk management, the Board issued a fintech due diligence guide with other federal agencies.2 In partnership with
the Division of Supervision and Regulation, DCCA released the paper, “Community Bank Access to Innovation through Partnerships,” an additional resource for banks navigating fintech collaboration.3
During the pandemic, banks were encouraged to be accommodating and innovative in responding to
consumer financial needs.4 DCCA assessed innovative ways that banks can meet the credit needs of
low- and moderate-income communities through CRA guidance. In March, the agencies expanded a set
of CRA frequently asked questions (FAQs) clarifying that certain pandemic-focused loan application processing and virtual community development efforts would qualify for consideration in CRA exams.5
Additional interagency guidance was issued in November to resume supervision and enforcement of
mortgage servicing rules, which had been temporarily lifted in April 2020.6
Research, Policy, and Practice
In 2021, markers of a rebounding economy masked how COVID-19 left those with the fewest financial
resources behind.7 DCCA research analyzed how individuals, families, and communities fared.
Released in May, the Economic Well-Being of U.S. Households in 2020 report examined responses to
the eighth annual Survey of Household Economics and Decisionmaking (SHED).8 The survey showed
that the pandemic’s economic effects were uneven. Slightly less than two-thirds (64 percent) of Black
and Hispanic adults said that they were doing at least okay financially, compared with 80 percent of
White adults and 84 percent of Asian adults. Community Advisory Council members stated that women
were negatively affected by public health policy in response to the pandemic, such as school and
(continued)
1
2
3
4
5
6
7
8
See https://consumercomplianceoutlook.org/2021/first-issue/technological-innovation-is-essential-tothe-future-of-community-banking-in-america/.
See https://www.federalreserve.gov/publications/files/conducting-due-diligence-on-financial-technology-firms-202108.pdf.
See https://www.federalreserve.gov/publications/files/community-bank-access-to-innovation-through-partnerships-202109.pdf.
See https://www.federalreserve.gov/supervisionreg/caletters/2021.htm for supervisory guidance for consumer compliance
issued in 2021.
See https://www.federalreserve.gov/supervisionreg/caletters/caltr2105.htm.
See https://www.federalreserve.gov/supervisionreg/caletters/caltr2116.htm.
Chair Jerome Powell mentioned the SHED findings in his remarks at the 2021 Just Economy Conference sponsored by the National
Community Reinvestment Coalition. See https://www.federalreserve.gov/newsevents/speech/powell20210503a.htm.
See https://www.federalreserve.gov/consumerscommunities/shed.htm.
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Box 6.1—continued
daycare closings. The Federal Reserve engaged stakeholders to better understand inequities in the
pandemic’s financial fallout.
To explore these issues further, DCCA sponsored events, seminars, and publications that underscored
the importance of supporting a diverse and inclusive recovery, particularly with respect to gender differences in economic opportunity. In addition, the Board worked with Reserve Bank partners to redesign
the in-person biennial community development research conference into an online seminar series featuring Board and Reserve Bank seminars under the theme, Toward an Inclusive Recovery. This series
featured sessions on women’s economic participation, the financial fragility of low-income workers, and
housing security.9 In November, DCCA hosted the Gender and the Economy Conference, which analyzed
how gender can influence outcomes over the course of an individual’s lifetime, with particular emphasis
on COVID-related effects.10 Published in conjunction with the conference, the November 2021 issue of
Consumer & Community Context provided insight into the pandemic’s economic impact on women, from
childcare disruptions and the financial fragility of single mothers to the experiences of women-owned
businesses.11
Information on the Federal Reserve’s robust body of work related to economic disparities can be found
on the Board’s website at https://www.federalreserve.gov/newsevents/economic-disparities-work.htm.
9
See https://fedcommunities.org/community-development-research-seminar-series/2021-toward-inclusive-recovery/.
See https://www.federalreserve.gov/conferences/conference-on-gender-and-the-economy.htm.
11
See https://www.federalreserve.gov/publications/consumer-community-context.htm.
10
With respect to the FTC Act, the Federal Reserve has supervisory and enforcement authority over
all state member banks, regardless of asset size and consults with the CFPB with regard to state
member banks over $10 billion in assets.
The Board is committed to ensuring that the institutions it supervises comply fully with the prohibition on unfair or deceptive acts or practices as outlined in the FTC Act. An act or practice may be
found to be unfair if it causes or is likely to cause substantial injury to consumers that is not reasonably avoidable by consumers and not outweighed by countervailing benefits to consumers or to
competition. A representation, omission, or practice is deceptive if it is likely to mislead a consumer acting reasonably under the circumstances and is material, and thus likely to affect a consumer’s conduct or decision regarding a product or service.
When examiners find evidence of potential discrimination or potential UDAP violations, they work
closely with the Board’s Fair Lending or UDAP Enforcement staff, who provide additional legal and
statistical expertise and ensure that fair lending and UDAP laws are enforced consistently and rigorously throughout the Federal Reserve System.
With respect to fair lending, pursuant to the ECOA, if the Board has reason to believe that a
creditor has engaged in a pattern or practice of discrimination in violation of the ECOA, the matter
must be referred to the Department of Justice (DOJ). The DOJ reviews the referral and determines
Consumer and Community Affairs
whether further investigation is warranted. A DOJ investigation may result in a public civil enforcement action. Alternatively, the DOJ may decide to return the matter to the Board for administrative
action. If a matter is returned to the Board, staff ensure that the institution takes all appropriate
corrective action.
In 2021, the Board referred one fair lending matter to DOJ. The matter involved discrimination
based on a pattern or practice of redlining in mortgage lending based on race or national origin.
If there is a fair lending violation that does not constitute a pattern or practice of discrimination
under the ECOA or if there is a UDAP violation, the Federal Reserve takes action to ensure that the
violation is remedied by the bank. The Federal Reserve uses a range of supervisory and enforcement tools, including nonpublic and public enforcement actions, to resolve any ECOA or UDAP violations and ensure that the institution takes appropriate corrective action. For example, the Federal Reserve uses supervisory tools other than public enforcement actions (such as memoranda
of understanding between banks’ boards of directors and the Reserve Banks, or board resolutions) to ensure that violations are corrected. When necessary, the Board can bring public enforcement actions.
The Board terminated two public enforcement actions for UDAP violations in 2021. In
January 2021, the Board terminated a consent order, initially issued in 2017, against a bank for
deceptive practices related to the bank’s balance transfer credit cards. The order required the
bank to pay restitution of approximately $5 million to more than 20,000 affected consumers and
to take other corrective actions.6 In June 2021, the Board terminated a consent order, initially
issued in 2019, against a bank for unfair and deceptive practices related to the bank’s offering of
certain add-on products. The order required the bank to pay restitution of approximately $8.8 million to more than 60,000 customers and to take other corrective actions.7
Given the complexity of this supervision area, the Federal Reserve seeks to provide transparency
on its perspectives and processes to the industry and the public. Fair Lending and UDAP Enforcement staff meet with supervised institutions, consumer advocates, and industry representatives to
discuss fair lending and UDAP issues and receive feedback. Through this outreach, the Board is
able to address emerging fair lending and UDAP issues and promote sound fair lending and UDAP
compliance. This includes staff participation in numerous meetings, conferences, and
training events.
6
7
For more information, see termination announcement at https://www.federalreserve.gov/newsevents/pressreleases/
enforcement20210105a.htm.
For more information, see termination announcement at https://www.federalreserve.gov/newsevents/pressreleases/
enforcement20210610a.htm.
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The Division of Consumer and Community Affairs’ outreach and technical assistance included the
annual Board-sponsored interagency webinar on fair lending supervision, which attracted more
than 5,500 registrants in 2021.8
Flood Insurance Enforcement
The National Flood Insurance Act imposes certain requirements on loans secured by buildings or
mobile homes located in, or to be located in, areas determined to have special flood hazards.
Under the Federal Reserve’s Regulation H, which implements the act, state member banks are
generally prohibited from making, extending, increasing, or renewing any such loan unless the
building or mobile home, as well as any personal property securing the loan, are covered by flood
insurance for the term of the loan. The law requires the Board and other federal financial institution regulatory agencies to impose civil money penalties when they find a pattern or practice of violations of the regulation.
In 2021, the Federal Reserve issued six formal consent orders and assessed approximately
$171,000 in civil money penalties against state member banks to address violations of the flood
regulation.9 These statutorily mandated penalties were forwarded to the National Flood Mitigation
Fund held by the Treasury for the benefit of the Federal Emergency Management Agency.
Mergers and Acquisitions
The Board is required by law to consider specific factors when evaluating proposed mergers and
acquisitions, including competitive considerations, financial condition, managerial resources
(including compliance with laws and regulations), convenience and needs of the community to be
served (including the record of performance under the CRA), and financial stability.
In evaluating bank applications, the Federal Reserve relies on the banks’ overall compliance
record, including recent fair lending examinations. In addition, the Federal Reserve considers the
CRA records of the relevant depository institutions, assessments of other relevant supervisors,
the supervisory views of examiners, and information provided by the applicant and public commenters. If warranted, the Federal Reserve will also conduct pre-membership exams for a transaction in which an insured depository institution will become a state member bank or in which the
surviving entity of a merger would be a state member bank.10
8
9
10
To view the webinar, see “Consumer Compliance Outlook Live” at https://consumercomplianceoutlook.org/outlook-live/
archives/.
To view press releases for enforcement actions, see https://www.federalreserve.gov/newsevents/pressreleases.htm.
In October 2015, the Federal Reserve issued guidance providing further explanation on its criteria for waiving or conducting such pre-merger or pre-membership examinations. For more information, see https://www.federalreserve.gov/
supervisionreg/srletters/SR1511.htm.
Consumer and Community Affairs
The Board provides information on its actions associated with these merger and acquisition transactions, issuing press releases and Board Orders for each.11 The Federal Reserve also publishes
semiannual reports that provide pertinent information on applications and notices filed with the
Federal Reserve.12 The reports include statistics on the number of proposals that were approved,
denied, and withdrawn as well as general information about the length of time taken to process
proposals. Additionally, the reports discuss common reasons that proposals have been withdrawn
from consideration. Furthermore, the reports compare processing times for merger and acquisition
proposals that received adverse public comments and those that did not.
Coordination with Other Agencies
Coordination with the Consumer Financial Protection Bureau
During 2021, staff continued to coordinate on supervisory matters with the CFPB in accordance
with the Interagency Memorandum of Understanding on Supervision Coordination with the CFPB.
The agreement is intended to establish arrangements for coordination and cooperation among the
CFPB and the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Association (NCUA), and the Board of Governors. The
agreement strives to minimize unnecessary regulatory burden and to avoid unnecessary duplication of effort and conflicting supervisory directives amongst the prudential regulators. The regulators work cooperatively to share exam schedules for covered institutions and covered activities to
plan simultaneous exams, provide final drafts of examination reports for comment, and share
supervisory information.
Coordination with Other Federal Banking Agencies
The Board regularly coordinates with other federal banking agencies, including through the development of interagency guidance, in order to clearly communicate supervisory expectations. The
Federal Reserve also works with the other member agencies of the Federal Financial Institutions
Examination Council to develop consistent examination principles, standards, procedures, and
report formats.13 In addition, the Federal Reserve participates in the Joint Task Force on Fair
Lending, composed of all of the prudential regulators, the CFPB, the DOJ, and the Department of
Housing and Urban Development (HUD). See box 6.1 for more information on how the Board
worked with the FDIC and the OCC to issue a guide for community banking organizations conducting due diligence on financial technology companies, as well as proposed guidance designed
to assist banking organizations in identifying and addressing the risks associated with third-party
relationships.
11
12
13
To access the Board’s Orders on Banking Applications, see https://www.federalreserve.gov/newsevents/
pressreleases.htm.
For these reports, see https://www.federalreserve.gov/supervisionreg/semiannual-reports-banking-applicationsactivity.htm.
For more information, see https://www.ffiec.gov/.
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Updating Examination Procedures
In 2021, Board staff worked with other federal banking agencies to develop and revise examination procedures to provide clarity about supervisor expectations regarding consumer compliance.
In March, the Board revised Regulation Z examination procedures to reflect amendments published by the CFPB amending and clarifying the TILA-Real Estate Settlement Procedures Act integrated disclosure rule, as well as amendments to TILA in the Economic Growth, Regulatory Relief,
and Consumer Protection Act (EGRRCPA) that did not require a rulemaking to be effective. Regulation Z ensures that creditors use a uniform system of disclosures about credit terminology and
rates. In October, the Board again revised Regulation Z examination procedures to reflect changes
to Regulation Z’s qualified mortgage provisions published by the CFPB in 2020 and 2021.14
In December, the Board issued revised examination procedures for use in connection with the
Home Mortgage Disclosure Act (HMDA) data collected since January 1, 2021, pursuant to the
CFPB’s rules, amendments to Regulation C, and amendments to HMDA in EGRRCPA.15 This update
clarified the types of transactions that are subject to HMDA and EGRRCPA, as well as the data
that institutions are required to collect, record, and report.
Outreach
The Federal Reserve maintains a comprehensive public outreach program to promote consumer
protection, financial inclusion, and community reinvestment. During 2021, the Board continued to
enhance its program, delivering timely, relevant compliance information to the banking industry,
experienced examiners, and other regulatory personnel.
In 2021, three issues of Consumer Compliance Outlook were released, discussing regulatory and
supervisory topics of interest to compliance professionals.16 This publication is distributed to
state member banks as well as to bank and savings and loan holding companies supervised by
the Federal Reserve, among other subscribers.17 In addition, the Federal Reserve offered one
Outlook Live seminar, “2021 Fair Lending Interagency Webinar.”18
Examiner Training
The Federal Reserve’s Examiner Training program supports the ongoing professional development
of consumer compliance supervisory staff, from an initial introduction to the Federal Reserve
System through the development of proficiency in consumer compliance topics sufficient to earn
14
15
16
17
18
See https://www.federalreserve.gov/supervisionreg/caletters/caltr2114.htm.
See https://www.federalreserve.gov/supervisionreg/caletters/caltr2117.htm.
For more information and to access the publications, see https://consumercomplianceoutlook.org/.
For more information and to download the seminars, see https://consumercomplianceoutlook.org/outlook-live/.
See https://www.consumercomplianceoutlook.org/2021/fourth-issue/2021-interagency-fair-lending-webinar/.
Consumer and Community Affairs
an examiner’s commission and beyond. The goal of these efforts is to ensure that examiners have
the skills necessary to meet their supervisory responsibilities now and in the future.
Consumer Compliance Examiner Commissioning Program
The Consumer Compliance Examiner Commissioning Program is designed to provide an examiner
with (1) a foundation for supervision in the Federal Reserve System and (2) the skills necessary to
effectively perform examiner-in-charge responsibilities at a non-complex community bank.19 On
average, examiners progress through a combination of self-paced online learning, classroom offerings, virtual instruction, and on-the-job training over a period of two to three years. Achievement is
measured by completing the required course content, demonstrating adequate on-the-job knowledge, and passing a professionally validated proficiency examination.
In 2021, 21 examiners passed the Consumer Compliance Proficiency Examination. The combination of multiple training delivery channels offers learners and Reserve Banks an ability to customize learning and meet training demands more individually and cost effectively. Special instructional and curriculum solutions were deployed throughout 2020 and 2021 to ensure uninterrupted
learning for supervisory staff at all levels during the pandemic.
Continuing Professional Development
In addition to providing core examiner training, continuing, career-long learning is offered. Opportunities for continuing professional development include online learning modules, special projects
and assignments, self-study programs, rotational assignments, instruction at System schools,
mentoring programs, and the Consumer Compliance Senior Forum held every 18 months. Staff
have access to continuing professional development resources on a variety of topics, including
learning assets for examiners moving into examiner responsibilities at larger financial institutions
and other curated learning content.
In 2021, the System continued to offer Rapid Response sessions to provide timely training to
examiners through webinars and case studies on emerging issues or to address urgent training
needs that result from, for example, the implementation of new laws or regulations. Two Rapid
Response sessions with an exclusive consumer compliance focus were designed, developed, and
presented to System staff during 2021. An additional 37 Rapid Response sessions were offered
that addressed a broader range of supervisory issues, including consumer compliance topics, to
keep supervision function staff informed of the Federal Reserve’s actions during the pandemic.
19
An overview of the Federal Reserve System’s Examiner Commissioning Program for assistant examiners is set forth in
supervision and regulation (SR)/community affairs (CA) letter SR 17-6/CA 17-1, “Overview of the Federal Reserve’s
Supervisory Education Programs.” See https://www.federalreserve.gov/supervisionreg/srletters/sr1706.htm.
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Responding to Consumer Complaints and Inquiries
The Federal Reserve investigates complaints against state member banks and selected nonbank
subsidiaries of BHCs (Federal Reserve regulated entities), and forwards complaints against other
creditors and businesses to the agency with relevant authority. Each Reserve Bank investigates
complaints against Federal Reserve regulated entities in its District. The Federal Reserve also
responds to consumer inquiries on a broad range of banking topics, including consumer protection
questions.
Federal Reserve Consumer Help (FRCH) processes consumer complaints and inquiries centrally. In
2021, FRCH processed 37,011 cases. Of these cases, 19,658 were inquiries and the remainder
(17,353) were complaints, with most cases received directly from consumers and involving financial institutions other than state member banks supervised by the Federal Reserve. Approximately
9 percent of cases were referred to the Federal Reserve from other federal and state agencies.
Consumers contacted FRCH by a variety of different channels: 51 percent of the FRCH consumer
contacts occurred by telephone, and 47 percent (17,438) of complaint and inquiry submissions
were made electronically (via email, online submissions, and fax). The online form page received
41,788 visits during the year.
Consumer Complaints
Complaints against Federal Reserve regulated entities totaled 5,814 in 2021. Of the total, 93 percent (5,422) were closed, and 7 percent were still under investigation.
Approximately 6 percent of the closed complaints were pending the receipt of additional information from consumers, referred to another regulatory agency, or withdrawn by the consumer.
Complaints about Products and Practices
During 2021, the Federal Reserve monitored consumer complaints by product and common subjects of complaint (see table 6.1).
The Board also tracked complaints that cite discrimination. Twenty-six complaints alleging credit discrimination on the basis of prohibited borrower traits or rights were received in 2021. Seventeen discrimination complaints were related to the race, color, national origin, or ethnicity of the applicant or
borrower. Five discrimination complaints were related to either the age or sex of the applicant or borrower. The remainder were related to handicap and public assistance income. Of the closed complaints alleging credit discrimination based on a prohibited basis in 2021, there were three with a
violation; however, they were not related to illegal credit discrimination.
Consumer and Community Affairs
In 44 percent of investigated complaints
against Federal Reserve regulated entities,
evidence reviewed did not reveal an error or
Table 6.1. Complaints against state member
banks and selected nonbank subsidiaries of
bank holding companies by product and
subject of complaint, 2021
violation. Of the remaining 56 percent of
investigated complaints, 12 percent were iden-
Product/subject of complaint
Percent
Deposit/bank products
44
tified errors that were corrected by the bank;
Fraud/forgery
31
5 percent were deemed violations of law; and
Deposit error resolution
21
the remainder included matters involving litiga-
Funds availability not as expected
17
tion, externally and internally referred com-
Restricted/blocked accounts
14
plaints, complaints resolved by the bank after
Other
17
Prepaid accounts
30
Restricted/blocked accounts
26
Error resolution
21
Inability to withdraw funds on the card
20
Fraud/forgery
14
Other
19
Credit card accounts
19
Inaccurate credit reporting
30
Fraud/forgery
18
Identity theft concerns
18
the consumer filed the complaint with FRCH,
or information was provided to the consumer.
Consumer Laws and
Regulations
Throughout 2021, the Board continued to
administer its regulatory responsibilities with
respect to certain entities and specific statu-
Request to validate the debt owed
tory provisions of the consumer financial ser-
Other
vices and fair lending laws. This included
Other products
5
drafting regulations and issuing compliance
Real estate loans
2
guidance for the industry and the Reserve
Note: Other products include commercial products, non-deposit
products, vehicle loans, customer service, and bank services.
Real estate loans include adjustable-rate mortgages, residential
construction loans, open-end home equity lines of credit, home
improvement loans, home purchase loans, home refinance/
closed-end loans, and reverse mortgages.
Banks and fulfilling its role in consulting with
the CFPB on consumer financial services and
fair lending regulations for which the CFPB has
9
25
rulemaking responsibility.
Interagency Questions and Answers for Flood Insurance Proposal
In March, five federal regulatory agencies, including the Board, issued for public comment new
Interagency Questions and Answers Regarding Private Flood Insurance.20 These proposed Interagency Questions and Answers supplement new and revised Interagency Questions and Answers
the agencies proposed in July 2020.21
20
21
The agencies are the Board of Governors of the Federal Reserve System, the Farm Credit Administration, the FDIC, the
NCUA, and the OCC.
For more information, see Federal Register notice 86 Fed. Reg. 14,696 (March 18, 2021) at https://www.govinfo.gov/
content/pkg/FR-2021-03-18/pdf/2021-05314.pdf and the press release at https://www.federalreserve.gov/
newsevents/pressreleases/bcreg20210311a.htm.
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The proposal is intended to help lenders comply with the agencies’ 2019 rule to implement the
private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012.
The proposal included new questions and answers in the following three areas:
1. Mandatory acceptance
2. Discretionary acceptance
3. Private flood insurance general compliance
The agencies plan to consolidate these proposed private flood insurance questions and answers
with the questions and answers proposed in July 2020 to issue one set of Interagency Questions
and Answers Regarding Flood Insurance.
Updating Annual Indexes for Consumer Regulations
Annual Indexing of Exempt Consumer Credit and Lease Transactions
In December 2021, the Board and the CFPB announced that the dollar thresholds in Regulation Z
(Truth in Lending) and Regulation M (Consumer Leasing) that will apply in 2022 for determining
exempt consumer credit and lease transactions will increase from $58,300 in 2021 to $61,000
for 2022. These thresholds are set pursuant to statutory changes enacted by the Dodd-Frank Act
that require adjusting these thresholds annually based on the annual percentage increase in the
Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Transactions at or
below the thresholds are subject to the protections of the regulations.22
Annual Indexing of Threshold for Small Loan Exemption from Appraisal Requirements for
Higher-Priced Mortgage Loans
In December 2021, the Board, the CFPB, and the OCC announced that the threshold for exempting
loans from special appraisal requirements for higher-priced mortgage loans would increase from
$27,200 for 2021 to $28,500 for 2022.23 The Dodd-Frank Act amended TILA to add special
appraisal requirements for higher-priced mortgage loans, including a requirement that creditors
obtain a written appraisal based on a physical visit to the home’s interior before making a higherpriced mortgage loan. The rules implementing these requirements contain an exemption for loans
of $25,000 or less and also provide that the exemption threshold will be adjusted annually to
reflect increases in the CPI-W.
22
23
For more information, see https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211201b.htm.
For more information, see https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211201a.htm.
Consumer and Community Affairs
Annual Adjustment to Community Reinvestment Act Asset-Size Thresholds for Small and
Intermediate Small Banks
In December 2021, the Board and the FDIC announced the annual adjustment to the asset-size
thresholds used to define small bank and intermediate small bank under the CRA
regulations.24
Financial institutions are evaluated under different CRA examination procedures based on their
asset-size classification. Those meeting the small and intermediate small bank asset-size thresholds are not subject to the reporting requirements applicable to large banks unless they choose to
be evaluated as a large bank.
Annual adjustments to these asset-size thresholds are based on the change in the average of the
CPI-W, not seasonally adjusted, for each 12-month period ending in November, with rounding to the
nearest million.
As a result of the 4.73 percent increase in the CPI-W for the period ending in November 2021, the
definitions of small bank and intermediate small bank for CRA examinations were changed as
follows:
• Small bank means a bank that, as of December 31 of either of the prior two calendar years, had
assets of less than $1.384 billion.
• Intermediate small bank means a small bank with assets of at least $346 million as of
December 31 of both of the prior two calendar years and less than $1.384 billion as of
December 31 of either of the prior two calendar years.
These asset-size threshold adjustments took effect on January 1, 2022.
Consumer Research and Analysis of Emerging Issues
and Policy
Throughout 2021, the Board analyzed emerging issues in consumer financial services practices in
order to understand their implications for the consumer risk analyses and supervisory policies that
are core to the Federal Reserve’s functions. This research and analysis also provided insight into
consumer financial decisionmaking.
Researching Issues Affecting Consumers and Communities
In 2021, the Board explored various issues related to consumers and communities by convening
experts, conducting original research, and fielding surveys as part of its continuing commitment to
24
For more information, see https://www.federalreserve.gov/newsevents/pressreleases/bcreg20211216a.htm.
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gain insights into consumers’ financial and communities’ economic development experiences.
This work during 2021 was essential to informing the Board’s policymaking in responding to the
COVID-19 emergency, particularly as these efforts were aimed at ameliorating conditions for economically vulnerable households and areas.
Household Economics and Decisionmaking
In order to better understand consumer decisionmaking in the rapidly evolving financial services
sector, the Board conducts regular internet panel surveys to gather data on consumers’ experiences and perspectives on various issues of interest through the Survey of Household Economics
and Decisionmaking.
The Board first launched the survey in 2013 to better understand consumer decisionmaking in the
wake of the Great Recession, with the aim of capturing a snapshot of the financial and economic
well-being of U.S. households. In doing so, the SHED collects information on households that is
not readily available from other sources or is not available in combination with other variables of
interest.
Results of the Board’s eighth annual SHED were published in the report Economic Well-Being of
U.S. Households in 2020, released in May 2021.25 The survey results reflected the self-reported
financial conditions of 11,648 respondents at the end of 2020. This report also included discussion of the trajectory of financial well-being over the course of the pandemic, as measured through
the full annual survey in November 2020 as well as smaller surveys conducted in April and
July 2020.
The survey asked respondents about specific aspects of their financial lives, including the following areas:
• employment and informal work
• income and savings
• economic preparedness
• banking and credit
• housing and living arrangements
• K-12 education and higher education
• education debt and student loans
• retirement
25
For the report and related data from the Survey of Household Economics and Decisionmaking, see https://
www.federalreserve.gov/consumerscommunities/shed.htm.
Consumer and Community Affairs 101
The 2020 survey reflected how the pandemic caused substantial disruptions to many people’s
finances as well as how public policy responses appear to have muted many of the effects. Even
though nearly one-fourth of adults said they were worse off financially than they had been in 2019,
most still said that, despite these setbacks, they were managing at least okay financially near the
end of the year and, across several measures, appeared to have financial resources similar to
those observed a year earlier. At the time of the survey, 75 percent of adults reported either doing
okay or living comfortably financially, which was unchanged from 2019 after having fluctuated
through the year. Similarly, 64 percent of adults said they would pay a hypothetical $400 expense
using cash or a cash equivalent, nearly unchanged from 2019.
Although most people were faring reasonably well financially, the results also highlighted areas of
persistent challenges and economic disparities across financial measures, including the substantial disparities in overall well-being by race, ethnicity, and education. See box 6.1 for how SHED
measured the pandemic’s impact by race and gender.
The survey also explored long-run financial circumstances, including returns to education, housing
satisfaction, and retirement savings, as well as several new questions to explore topics that had
not been asked in previous years of the survey. These new topics included experiences with K-12
education and education disruptions, housing changes due to COVID-19, telework experiences, layoffs, and challenges faced when conducting banking transactions. Additionally, the survey continued to monitor emerging issues that may be important to the economy in the future, such as
experiences working in the gig economy.
In addition to fielding and analyzing these surveys, economists in the Division of Consumer and
Community Affairs published articles throughout the year in various publications and journals, contributing to a body of research exploring issues impacting consumers and communities.26
26
For papers by the Federal Reserve Board, see Robert M. Adams, Kenneth P. Brevoort, and John C. Driscoll, “Is Lending
Distance Really Changing? Distance Dynamics and Loan Composition in Small Business Lending,” Finance and Economics Discussion Series 2021-011 (Washington: Board of Governors of the Federal Reserve System, December 2020),
https://www.federalreserve.gov/econres/feds/is-lending-distance-really-changing-distance-dynamics-and-loancomposition-in-small-business-lending.htm; Nathan Blascak and Anna Tranfaglia, “Decomposing Gender Differences in
Bankcard Credit Limits,” Finance and Economics Discussion Series 2021-072 (Washington: Board of Governors of the
Federal Reserve System, November 2021), https://www.federalreserve.gov/econres/feds/decomposing-genderdifferences-in-bankcard-credit-limits.htm; J. Michael Collins, Jeff Larrimore, and Carly Urban, “Does Access to Bank
Accounts as a Minor Improve Financial Capability? Evidence from Minor Bank Account Laws,” Finance and Economics
Discussion Series 2021-075 (Washington: Board of Governors of the Federal Reserve System, October 2021), https://
www.federalreserve.gov/econres/feds/does-access-to-bank-accounts-as-a-minor-improve-financial-capability.htm; Katherine Lim and Mike Zabek, “Women’s Labor Force Exits during COVID-19: Differences by Motherhood, Race, and
Ethnicity,” Finance and Economics Discussion Series 2021-067 (Washington: Board of Governors of the Federal Reserve
System, September 23, 2021), https://www.federalreserve.gov/econres/feds/womens-labor-force-exits-during-covid-19differences-by-motherhood-race-and-ethnicity.htm; and Jeff Larrimore, Jacob Mortenson, and David Splinter, “Earnings
Shocks and Stabilization During COVID-19,” Finance and Economics Discussion Series 2021-052 (Washington: Board of
Governors of the Federal Reserve System, June 29, 2021), https://www.federalreserve.gov/econres/feds/earningsshocks-and-stabilization-during-covid-19.htm.
102 108th Annual Report | 2021
Community Development Research Seminar Series
In 2021, the Board and the Reserve Banks reimagined the biennial Federal Reserve System Community Development Research Conference as a new seminar series. This long-running forum convenes researchers, policymakers, and practitioners across sectors to consider important issues
that low- to moderate-income people and communities face, exploring the latest research to inform
effective strategies to advance opportunity for economically vulnerable households and areas. See
box 6.1 to learn more about how the series’ three sessions considered the 2021 theme, Toward
an Inclusive Recovery.
The seminars featured keynote remarks by Governor Michelle Bowman, Federal Reserve Bank of
Kansas City President Esther George, and Federal Reserve Bank of Atlanta President
Raphael Bostic.
Analysis of Emerging Issues
Board staff analyze data and anticipate trends, monitor legislative activity, form working groups,
and organize expert roundtables to identify emerging consumer risks and inform supervision,
research, and policy.
In 2021, the Board analyzed a broad range of issues in financial services markets that potentially
pose risks to consumers. Topics of interest included
• assessing consumer risk during and after the pandemic,
• tracking housing trends, and
• monitoring credit for small businesses.
The staff hosted a series of virtual events about innovative approaches to financing postsecondary education and conducted outreach with Black and Hispanic small business associations.
The Division of Consumer and Community Affairs also convened a consumer risk-focused workshop series for staff from the Board, Reserve Banks, and other federal agencies in July and
August. The discussion considered pandemic resiliency as well as credit products and policy decisions that help consumers and small businesses recover from financial shocks. In addition to analyzing the small-dollar mortgage market, staff also participated in the Interagency Task Force on
Property Appraisal and Valuation Equity, an initiative to address inequity in home appraisals. In
addition, Division of Consumer and Community Affairs subject matter experts examined credit
availability for smaller firms that may lack the financing options and in-house resources of larger
companies.
Consumer and Community Affairs 103
See box 6.1 to learn more about the Board’s Gender and the Economy Conference, a virtual symposium that explored how gender can influence economic and financial outcomes over an individual’s lifetime, with particular emphasis on COVID-related impacts.
Community Development
The Federal Reserve System’s Community Development function promotes economic growth and
financial stability for underserved households and communities through research and public outreach. Community Development is a decentralized function within the Federal Reserve System,
and the Community Affairs Officers at each of the 12 Reserve Banks design strategies to respond
to the specific needs in their respective Districts. Board staff provide oversight for alignment with
Board objectives and coordination of System priorities.
Perspectives from Main Street
Through its work, the Community Development function works to ensure that the voices of consumers and communities inform policy and research and solicits diverse views on issues affecting
the economy and financial markets. These perspectives help improve research, policies, and
transparency.
To that end, the Board partnered with the Reserve Banks and eight national partners on the 2021
Perspectives from Main Street survey. Through a convenience sampling method that relied on contact databases, the online survey compared conditions in August 2021 with the peak of pandemic
economic distress. Announced in October 2021, the findings provided insight into how COVID-19
was affecting low- to moderate-income people and entities that serve them on the dates the
survey was administered.27 Of respondents, 86 percent indicated COVID-19 was a significant disruption to the economic conditions of the communities they served, while 44 percent reported that
significant disruptions had continued.
Similarly, the Federal Reserve promotes access to credit and financial services for lower-income
communities of color by understanding and promoting the viability of minority depository institutions (MDIs). In collaboration with the Division of Supervision and Regulation, the Division of Consumer and Community Affairs issued SR/CA letter SR 21-6/CA 21-4, “Highlighting the Federal
Reserve System’s Partnership for Progress Program for Minority Depository Institutions and Women’s Depository Institutions” in March 2021. This letter offered policy guidance about how the
Partnership for Progress program defines and supports diverse banks and financial services providers, including eligibility, technical assistance, training, and outreach.28 The Board also released
27
28
See https://fedcommunities.org/data/main-street-covid19-survey-2021/.
See https://www.federalreserve.gov/supervisionreg/srletters/SR2106.htm. For more information about the Federal
Reserve System’s Partnership for Progress, see https://fedpartnership.gov/.
104 108th Annual Report | 2021
Promoting Minority Depository Institutions in July 2021, an annual report informing the public about
Federal Reserve research, events, and other initiatives to preserve and support MDIs.29 During
the semiannual Community Advisory Council (CAC) meetings, council members noted the importance of credit access for women and minority business owners. The Council also shared perspectives on local credit and economic conditions in housing, labor markets, and small businesses.30
29
30
See https://www.federalreserve.gov/publications/2021-july-promoting-minority-depository-institutions.htm.
Records of the meetings of the CAC are available at https://www.federalreserve.gov/aboutthefed/cac.htm.
Appendixes
107
A
Federal Reserve System Organization
Congress designed the Federal Reserve System to give it a broad perspective on the economy and
on economic activity in all parts of the nation. As such, the System is composed of a central, governmental agency—the Board of Governors—in Washington, D.C., and 12 regional Federal Reserve
Banks. This section lists key officials across the System, including the Board of Governors, its officers, Federal Open Market Committee members, several System councils, and Federal Reserve
Bank and Branch directors and officers for 2021.
Board of Governors
Members
The Board of Governors of the Federal Reserve System is composed of seven members, who are
nominated by the President and confirmed by the Senate. The Chair and the Vice Chair of the
Board are also named by the President from among the members and are confirmed by the
Senate. This section lists Board members who served in 2021. For a full listing of Board members
from 1914 through the present, visit www.federalreserve.gov/aboutthefed/bios/board/
boardmembership.htm.
Jerome H. Powell
Randal K. Quarles
Chair
Vice Chair for Supervision
Richard H. Clarida
Michelle W. Bowman
Lael Brainard
Christopher J. Waller
Vice Chair
Divisions and Officers
Fifteen divisions support and carry out the mission of the Board of Governors, which is based in
Washington, D.C.
Office of Board Members
Michelle A. Smith
Lucretia M. Boyer
Jon Faust1
Assistant to the Board
and Director
Assistant to the Board
Senior Special Adviser
to the Chair
Linda L. Robertson
Special Assistant to the Board
for Congressional Liaison
Assistant to the Board
1
2
Jennifer C. Gallagher
Jon Faust served as an adviser to Chair Powell in 2021.
Joshua H. Gallin served as an adviser to Chair Powell in 2021.
Joshua H. Gallin2
Special Adviser to the Chair
108 108th Annual Report | 2021
Legal Division
Mark E. Van Der Weide
Jean C. Anderson
Cary K. Williams
General Counsel
Associate General Counsel
Richard M. Ashton
Benjamin W. McDonough
Deputy Associate
General Counsel
Deputy General Counsel
Associate General Counsel
(through June 6, 2021)
Jason A. Gonzalez
Deputy General Counsel
Reena Sahni
Asad Kudiya3
Laurie S. Schaffer
Associate General Counsel
(as of December 6, 2021)
Assistant General Counsel
(as of November 7, 2021)
Deputy General Counsel
(through February 1, 2021)
Alvin Williams
Jay Schwartz
Associate General Counsel
Assistant General Counsel
(as of November 7, 2021)
Charles Gray
Stephanie Martin
Senior Associate
General Counsel
(through October 1, 2021)
Alicia S. Foster
Assistant General Counsel
Deputy Associate
General Counsel
Alison M. Thro
Deputy Associate
General Counsel
Office of the Secretary
Ann Misback
Michele T. Fennell
Yao-Chin Chao
Secretary of the Board
Deputy Associate Secretary
Assistant Secretary
Margaret M. Shanks
Deputy Secretary
Division of International Finance
Beth Anne Wilson
Paul Wood
Robert Vigfusson
Director
Senior Associate Director
Deputy Associate Director
Shaghil Ahmed
Stephanie E. Curcuru
Andrea De Michelis
Deputy Director
Associate Director
Sally M. Davies
Matteo Iacoviello
Assistant Director
(as of November 7, 2021)
Deputy Director
Associate Director
Jasper Hoek
Brian M. Doyle
Andrea Raffo
Assistant Director
(as of November 7, 2021)
Deputy Director
Associate Director
Carol Bertaut
Jason Wu
Senior Associate Director
Associate Director
Assistant Director
(as of November 7, 2021)
James A. Dahl
Daniel Beltran
Senior Associate Director
Deputy Associate Director
Emre Yoldas
Viktors Stebunovs
Deputy Associate Director
3
Asad Kudiya served as an adviser to Governor Waller in 2021.
Seung Jung Lee
Assistant Director
(as of November 7, 2021)
Federal Reserve System Organization 109
Brett Berger
Ricardo Correa
John H. Rogers
Senior Adviser
Senior Adviser
Senior Adviser (through May 1, 2021)
Andreas W. Lehnert
Luca Guerrieri
David Arseneau
Director
Deputy Associate Director
Assistant Director
Michael T. Kiley
Kent C. Hiteshew
Andrew M. Cohen
Deputy Director
Deputy Associate Director
(through March 25, 2021)
Assistant Director
Senior Associate Director
Namirembe Mukasa
Assistant Director
Elizabeth Klee
Deputy Associate Director and
Chief of Staff
Adele Cecile Morris
Chiara Scotti4
Senior Adviser
(as of October 12, 2021)
Division of Financial Stability
William F. Bassett
Senior Associate Director
John W. Schindler
Deputy Associate Director
Senior Associate Director
Skander J. Van den Heuvel
Ceyhun Durdu
Uzma Wahhab
Deputy Associate Director
Senior Adviser (through
November 6, 2021)
Trevor A. Reeve
Gretchen C. Weinbach
Michiel De Pooter
Director
Senior Associate Director
(through September 1, 2021)
Assistant Director
(through November 19, 2021)
Eric C. Engstrom5
Giovanni Favara
Associate Director
Assistant Director
Christopher J. Gust
Etienne Gagnon
Associate Director
Assistant Director
Senior Associate Director
Mary T. Hoffman
Dan Li
Margaret G. DeBoer
Associate Director
(through July 1, 2021)
Assistant Director
Karen Brooks
Assistant Director
Division of Monetary Affairs
James A. Clouse
Deputy Director
Rochelle M. Edge
Deputy Director
David H. Bowman
Senior Associate Director
J. David Lopez-Salido
Deputy Associate Director
Senior Associate Director
Matthew M. Luecke
Senior Associate Director
Nellisha Ramdass
Senior Associate Director
(as of October 12, 2021)
Min Wei
Senior Associate Director
Laura Lipscomb
Deputy Associate Director
Zeynep Senyuz
Deputy Associate Director
Rebecca Zarutskie
Deputy Associate Director
Brian Bonis
Assistant Director
4
5
6
7
Elizabeth Marx
Antulio Bomfim6
Senior Adviser
Jane E. Ihrig7
Senior Adviser
Don H. Kim
Senior Adviser
Ellen E. Meade
Senior Adviser
(through September 1, 2021)
Chiara Scotti served as an adviser to Vice Chair Clarida in 2021.
Eric C. Engstrom served as associate director in Research and Statistics and Monetary Affairs.
Antulio Bonfim served as an adviser to Governor Bowman in 2021.
Jane Ihrig served as an adviser to Governor Waller in 2021.
110 108th Annual Report | 2021
Edward M. Nelson
Annette Vissing-Jorgensen
Mark Carlson
Senior Adviser
Senior Adviser (as of August 2, 2021)
Adviser (as of December 19, 2021)
Robert J. Tetlow
Egon Zakrajsek
Senior Adviser
Senior Adviser
(through August 1, 2021)
Division of Research and Statistics
Stacey Tevlin
Elizabeth K. Kiser
Marco Cagetti
Director
Associate Director
Jeffrey C. Campione
Timothy A. Mullen
Assistant Director
(as of November 7, 2021)
Deputy Director
Associate Director
Daniel M. Covitz
Erik A. Heitfield
Deputy Director
Deputy Associate Director
William L. Wascher III
Patrick E. McCabe
Deputy Director
Deputy Associate Director
Nicole Bennett
Norman J. Morin
Senior Associate Director
Deputy Associate Director
Eric M. Engen
Karen M. Pence
Senior Associate Director
Deputy Associate Director
Kevin Moore
Joshua H. Gallin
John M. Roberts
Senior Associate Director
Deputy Associate Director
(through May 1, 2021)
Assistant Director
(as of November 7, 2021)
Diana Hancock
Senior Associate Director
David E. Lebow
Senior Associate Director
Michael G. Palumbo
Senior Associate Director
John J. Stevens
Senior Associate Director
Burcu Duygan-Bump
Associate Director
Eric C. Engstrom
Associate Director
J. Andrew Figura
Shane M. Sherlund
Deputy Associate Director
Lillian Shewmaker
Deputy Associate Director
Paul A. Smith
Deputy Associate Director
Deborah Flores
Assistant Director and Chief
Karen Krugman
Assistant Director and Chief
Gianni Amisano
Assistant Director
Associate Director
Shawn Bruckner
Glenn R. Follette
Assistant Director
(as of April 26, 2021)
Associate Director
Celso Brunetti
Assistant Director
(as of November 7, 2021)
Paul Lengermann
Assistant Director
Geng Li
Assistant Director
Byron Lutz
Assistant Director
Raven Molloy
Assistant Director
Matthias Paustian
Assistant Director
Gustavo Suarez
Assistant Director
Clara Vega
Assistant Director
S. Wayne Passmore
Senior Adviser
Jeremy Rudd
Senior Adviser
Steven A. Sharpe
Senior Adviser
Wendy Dunn
Adviser
Charles Fleischman
Adviser
Federal Reserve System Organization 111
Division of Supervision and Regulation
Michael S. Gibson
Anna L. Hewko
Vaishali Sack
Director
Associate Director
Deputy Associate Director
Jennifer Burns
Michael J. Hsu
Robert Sarama
Deputy Director
Associate Director
(through May 8, 2021)
Deputy Associate Director
Shannon Kelly
Deputy Associate Director
Associate Director
(as of December 6, 2021)
Catherine A. Tilford
Kate Fulton
Deputy Director
(as of August 2, 2021)
Arthur W. Lindo
Deputy Director
James Price
Deputy Director
(through June 8, 2021)
Mary L. Aiken
Senior Associate Director
Steven Spurry
Deputy Associate Director
Richard A. Naylor II
Associate Director
Donna Webb
Deputy Associate Director
Uzma Wahhab
Associate Director (as of November 7, 2021)
John Beebe
Suzanne L. Williams
Deputy Associate Director
Dana Burnett
Deputy Associate Director
Assistant Director
Senior Associate Director
(as of September 12, 2021)
Karen Caplan
Anthony Cain
Deputy Associate Director
Assistant Director
Molly Mahar
James Ray Diggs
Juan Climent
Senior Associate Director
Deputy Associate Director
Assistant Director
Richard N. Ragan
Mona Elliot
Keith Coughlin
Senior Associate Director
Deputy Associate Director
Assistant Director
Lisa Ryu
Constance Horsley
Christine Graham
Senior Associate Director
Deputy Associate Director
Assistant Director
Thomas R. Sullivan
Kavita Jain
Eric L. Kennedy
Senior Associate Director
Deputy Associate Director
Assistant Director
Todd Vermilyea
Kathleen Johnson
Brent Richards
Senior Associate Director
Deputy Associate Director
Assistant Director
Kevin M. Bertsch
Ryan P. Lordos
Emily Wells
Associate Director
Deputy Associate Director
Assistant Director
Nida Davis
Lara Lylozian
Norah M. Barger
Associate Director
Deputy Associate Director/
Chief Accountant
Senior Adviser
David K. Lynch
Deputy Associate Director
Senior Adviser
(through February 1, 2021)
Susan Motyka
Fang Du
Marta Chaffee
Christopher Finger
Associate Director
Jeffery Gunther
Associate Director
Barbara J. Bouchard
Deputy Associate Director
Adviser
T. Kirk Odegard
William F. Treacy
Deputy Associate Director
Adviser
112 108th Annual Report | 2021
Division of Consumer and Community Affairs
Eric S. Belsky
Carol A. Evans
Angelyque Campbell
Director
Associate Director
(through October 9, 2021)
Assistant Director
Joseph A. Firschein
Assistant Director
V. Nicole Bynum
Deputy Director
Anna Alvarez Boyd
Senior Associate Director
Benjamin K. Olson
Senior Associate Director
(as of August 30, 2021)
Associate Director
Phyllis L. Harwell
Associate Director
Marisa A. Reid
Amy B. Henderson
Minh-Duc T. Le
Assistant Director
Caterina Petrucco-Littleton
Assistant Director
Associate Director
David E. Buchholz
Deputy Associate Director
Division of Reserve Bank Operations and Payment Systems
Matthew J. Eichner
Jeffrey Walker
Stuart E. Sperry
Director
Associate Director
Deputy Associate Director
Gregory L. Evans
Sonja Danburg
Casey Clark
Senior Associate Director
Deputy Associate Director
Assistant Director
Susan V. Foley
Brian Lawler
Jason Hinkle
Senior Associate Director
Deputy Associate Director
Assistant Director
Lawrence E. Mize
Timothy W. Maas
Travis D. Nesmith
Senior Associate Director
Deputy Associate Director
Assistant Director and Chief
Jennifer K. Liu
Mark Manuszak
Caio Peixoto
Associate Director
Deputy Associate Director
Assistant Director
Jennifer A. Lucier
Mark J. Olechowski
Nick Trotta
Associate Director
Deputy Associate Director
Assistant Director
David C. Mills
Rebecca L. Royer
Associate Director
Deputy Associate Director
Federal Reserve System Organization 113
Office of the Chief Operating Officer
Patrick J. McClanahan
Sheila Clark
Andrew Leonard
Chief Operating Officer
Diversity and Inclusion
Program Director
Associate Director
Phillip C. Daher
Adviser (through June 1, 2021)
Katherine Tom
Chief Data Officer
Steven Miranda
Associate Director
Division of Financial Management
Ricardo Aguilera
Monica Y. Manning
Thomas Murphy
Director and Chief
Financial Officer
Associate Director
Deputy Associate Director
Jeffrey R. Peirce
Kimberly Briggs
Stephen J. Bernard
Associate Director
Assistant Director
Deputy Director
Karen L. Vassallo
Associate Director
Division of Management
Winona Varnon
Donna J. Butler
Stewart Carroll
Director
Deputy Associate Director and
Chief of Staff
Assistant Director
(as of March 28, 2021)
Senior Associate Director
and Chief, LEU
Timothy E. Markey
Catherine Jack
Deputy Associate Director
Assistant Director
Kendra Gastright
Stephen E. Pearson
Tim Ly
Senior Associate Director
Deputy Associate Director
Assistant Director
Tameika L. Pope
Katherine Perez
Leah Middleton
Senior Associate Director
and CHCO
Deputy Associate Director
and Assistant Chief, LEU
Assistant Director
Tara Tinsley-Pelitere
Reginald V. Roach
Senior Associate Director and CTO
Deputy Associate Director
Ann Buckingham
Lewis Andrews
Associate Director
Assistant Director
(as of June 6, 2021)
Curtis B. Eldridge
114 108th Annual Report | 2021
Division of Information Technology
Sharon L. Mowry
Deborah Prespare
Ivan K. Wun
Director
Associate Director
Deputy Associate Director
Lisa M. Bell
Charles B. Young
Amy Kelley
Deputy Director
(through February 2, 2021)
Associate Director
Assistant Director
William K. Dennison
Brian Lester
Raymond Romero
Deputy Associate Director
Assistant Director
Can Xuan Nguyen
Scott Meyerle
Deputy Associate Director
Assistant Director
Jonathan F. Shrier
Langston Shaw
Deputy Associate Director
Assistant Director
Eric C. Turner
Fred Vu
Senior Associate Director
Deputy Associate Director
(through July 1, 2021)
Assistant Director
(as of March 14, 2021)
Sheryl Lynn Warren
Virginia M. Wall
Theresa C. Palya
Senior Associate Director
Deputy Associate Director
Rajasekhar R. Yelisetty
Edgar Wang
Adviser
(through March 1, 2021)
Senior Associate Director
Deputy Associate Director
Deputy Director
Kofi A. Sapong
Deputy Director
Glenn S. Eskow
Senior Associate Director
Stephen Olden
Office of Inspector General
Mark Bialek
Peter Sheridan
Cynthia Gray
Inspector General
Associate Inspector General
Assistant Inspector General
Fred Gibson
Michael VanHuysen
Jacqueline M. Becker
Deputy Inspector General
Associate Inspector General
Senior Adviser
Stephen Carroll
Associate Inspector General
Federal Reserve System Organization 115
Federal Open Market Committee
The Federal Open Market Committee is made up of the seven members of the Board of Governors; the president of the Federal Reserve Bank of New York; and four of the remaining eleven
Federal Reserve Bank presidents, who serve one-year terms on a rotating basis. During 2021, the
Federal Open Market Committee held eight regularly scheduled meetings (see appendix B, “Minutes of Federal Open Market Committee Meetings”).
Members
Jerome H. Powell
Michelle W. Bowman
Charles L. Evans
Chair, Board of Governors
Member, Board of Governors
John C. Williams
Lael Brainard
President, Federal Reserve
Bank of Chicago
Vice Chair, President,
Federal Reserve Bank of New York
Member, Board of Governors
Thomas I. Barkin
Member, Board of Governors
President, Federal Reserve
Bank of Richmond
Mary C. Daly
Raphael W. Bostic
President, Federal Reserve
Bank of San Francisco
Richard H. Clarida
Randal K. Quarles
Member, Board of Governors
Christopher J. Waller
Member, Board of Governors
President, Federal Reserve
Bank of Atlanta
Alternate Members
James Bullard
Loretta J. Mester
Helen E. Mucciolo
President, Federal Reserve
Bank of St. Louis
President, Federal Reserve
Bank of Cleveland
Esther L. George
Kenneth C. Montgomery
First Vice President, Federal Reserve
Bank of New York
(through March 9, 2021)
President, Federal Reserve
Bank of Kansas City
First Vice President, Federal Reserve
Bank of Boston
(as of November 3, 2021)
Naureen Hassan
First Vice President, Federal Reserve
Bank of New York
(as of March 9, 2021)
Eric Rosengren
President, Federal Reserve
Bank of Boston
(through September 30, 2021)
116 108th Annual Report | 2021
Officers
James A. Clouse
Stacey Tevlin
Beverly Hirtle
Secretary
Economist
Associate Economist
Matthew M. Luecke
Beth Anne Wilson
Sylvain Leduc
Deputy Secretary
Economist
Associate Economist
Michelle A. Smith
Shaghil Ahmed
Anna Paulson
Assistant Secretary
Associate Economist
Associate Economist
Mark E. Van Der Weide
David Altig
William L. Wascher
General Counsel
Associate Economist
Associate Economist
Michael Held
Kartik B. Athreya
Lorie K. Logan
Deputy General Counsel
Associate Economist
Richard M. Ashton
Brian M. Doyle
Manager, System Open
Market Account
Assistant General Counsel
Associate Economist
Patricia Zobel
Trevor A. Reeve
Rochelle M. Edge
Economist
Associate Economist
Deputy Manager, System Open
Market Account
Eric M. Engen
Associate Economist
Federal Reserve System Organization 117
Board of Governors Advisory Councils
The Federal Reserve Board uses advisory committees in carrying out its varied responsibilities. To
learn more, visit https://www.federalreserve.gov/aboutthefed/advisorydefault.htm.
Federal Advisory Council
The Federal Advisory Council—a statutory body established under the Federal Reserve Act—
consults with and advises the Board of Governors on all matters within the Board’s jurisdiction. It
is composed of one representative from each Federal Reserve District, chosen by the Reserve
Bank in that District. The president and vice president of the council are selected from amongst
council members. The Federal Reserve Act requires the council to meet in Washington, D.C., at
least four times a year. In 2021, the council met on February 3–4, May 5–6, September 8–9, and
December 1–2. The council met with the Board on February 4, May 6, September 9, and
December 2, 2021.
Members
District 1
District 5
District 9
John R. Ciulla
Brian T. Moynihan
Kevin P. Riley
President and Chief Executive Officer,
Webster Financial Corporation and
Webster Bank, Waterbury, CT
Chairman and Chief Executive Officer,
Bank of America, Charlotte, NC
President and Chief Executive Officer,
First Interstate BancSystem, Inc.,
Billings, MT
District 6
District 2
Rene F. Jones
Rajinder P. Singh
Chairman and Chief Executive Officer,
M&T Bank Corporation, Buffalo, NY
Chairman, President, and Chief
Executive Officer, BankUnited, Inc.,
Miami Lakes, FL
District 3
District 7
Jeffrey M. Schweitzer
Jeffrey J. Brown
Chief Executive Officer,
Univest Bank and Trust Co.,
Souderton, PA
Chief Executive Officer, Ally Financial
Inc., Detroit, MI
District 10
John B. Dicus
President and Chief Executive Officer,
Capitol Federal Financial, Inc.,
Topeka, KS
District 11
Phillip D. Green
District 8
Chairman and Chief Executive Officer,
Cullen/Frost Bankers Inc.,
San Antonio, TX
D. Bryan Jordan
District 12
Chairman, President, and Chief
Executive Officer, First Horizon
National Corporation, Memphis, TN
Nandita Bakhshi
Jeffrey J. Brown
Rene F. Jones
Herb Taylor
President
Vice President
Secretary
District 4
William S. Demchak
Chairman, President, and Chief
Executive Officer, PNC Financial
Services Group, Pittsburgh, PA
President and Chief Executive Officer,
Bank of the West, San Francisco, CA
Officers
118 108th Annual Report | 2021
Community Depository Institutions Advisory Council
The Community Depository Institutions Advisory Council advises the Board of Governors on the
economy, lending conditions, and other issues of interest to community depository institutions.
Members are selected from among representatives of banks, thrift institutions, and credit unions
who are serving on local advisory councils at the 12 Federal Reserve Banks. One member of each
of the Reserve Bank councils serves on the Community Depository Institutions Advisory Council.
The president and vice president are selected from amongst council members. The council usually
meets with the Board twice a year in Washington, D.C. In 2021, the council met on April 1 and
November 18.
Members
District 1
District 5
District 9
Dorothy A. Savarese
Dabney T.P. Gilliam, Jr.
Shari Laven
Chairman, President, and Chief
Executive Officer, Cape Cod 5,
Orleans, MA
President and Chief Executive Officer,
The Bank of Charlotte County,
Phenix, VA
Chief Executive Officer, Viking Bank,
Alexandria, MN
District 2
District 6
Faheem A. Masood
David R. Melville III
President and Chief Executive Officer,
ESL Federal Credit Union,
Rochester, NY
President and Chief Executive Officer,
b1Bank, Baton Rouge, LA
District 10
Jeane M. Vidoni
President and Chief Executive Officer,
Penn Community Bank, Perkasie, PA
Kent A. Liechty
President and Chief Executive Officer,
First Bank of Berne, Berne, IN
T. Michael Price
President and Chief Executive Officer,
First Commonwealth Financial Corp.,
Indiana, PA
Erik Beguin
Founder and Chief Executive Officer,
Austin Capital Bank, Austin, TX
District 12
District 8
District 4
Regional President, Midwest Bank,
Lincoln, NE
District 11
District 7
District 3
Brad Koehn
Marnie Older
Chief Executive Officer and Director,
Stone Bank, Little Rock, AR
Officers
Dorothy A. Savarese
David R. Melville, III
President
Vice President
Janet Silveria
President and Chief Executive Officer,
Community Bank of Santa Maria,
Santa Maria, CA
Federal Reserve System Organization 119
Community Advisory Council
The Community Advisory Council was formed in 2015 to advise the Board of Governors on the economic circumstances and financial services needs of consumers and communities, with a particular focus on the concerns of low- and moderate-income populations. The council is composed
of a diverse group of experts and representatives of consumer and community development organizations and interests, including from such fields as affordable housing, community and economic
development, employment and labor, financial services and technology, small business, and asset
and wealth building. One member of the council serves as its chair. The council first met with the
Board in November 2015, and meets with the Board twice each year. In 2021, the council met
with the Board on May 13 and October 21.
Members
Daniel Betancourt
Darlene Lombos
Bill Schlesinger
President & CEO, Community First
Fund, Lancaster, PA
Executive Secretary-Treasurer, Boston
Labor Council, Boston, MA
Co-Director, Project Vida,
El Paso, TX
Dr. Susan Bradbury
Stephanie Mackay
Arjan Schutte
Professor, Community and Regional
Planning, Iowa State University,
Ames, IA
Board Member, Switchpoint Community Resource CenterSalt Lake City, UT
Founder & Managing Partner, Core
Innovation Capital, San Francisco, CA
Andreanecia Morris
Kendra N. Smith
Adrian M. Brooks
Executive Director, HousingNOLA,
New Orleans, LA
Vice President, Community Health,
Bon Secours Mercy Health, Toledo, OH
Marc Norman
Lora Smith
Associate Professor of Practice,
University of Michigan, Taubman
College of Architecture and Urban
Planning, Ann Arbor, MI
Executive Director, Appalachian Impact
Fund, Hazard, KY
CEO, Memorial Community Development Corporation, Evansville, IN
Tawney Brunsch
Executive Director, Lakota Funds,
Kyle, SD
Joshua Downey
Special Assistant, International Union
of Painters and Allied Trades,
Denver, CO
Dr. Laura Murillo
President & CEO, Houston Hispanic
Chamber of Commerce, Houston, TX
Officers
Marc Norman
Tawney Brunsch
Chair
Vice Chair
Jesse Van Tol
CEO, National Community Reinvestment Coalition, Washington, DC
120 108th Annual Report | 2021
Model Validation Council
The Model Validation Council was established in 2012 by the Board of Governors to provide expert
and independent advice on its process to rigorously assess the models used in stress tests of
banking institutions. The Dodd-Frank Wall Street Reform and Consumer Protection Act required the
Federal Reserve to conduct annual stress tests of large bank holding companies and systemically
important, nonbank financial institutions supervised by the Board. The Model Validation Council
provides input on the Board’s efforts to assess the effectiveness of the models used in the stress
tests. The council is intended to improve the quality of the Federal Reserve’s model assessment
program and to strengthen the confidence in the integrity and independence of the program.
Members
Andrew Atkeson
Victoria Ivashina
Andrew Patton
Professor, University of
California, Los Angeles
Professor, Harvard
Business School
Professor, Duke University
Stijn Van Nieuwerburgh
Professor, Columbia University
Federal Reserve System Organization 121
Federal Reserve Banks and Branches
To carry out the day-to-day operations of the Federal Reserve System, the nation has been divided
into 12 Federal Reserve Districts, each with a Reserve Bank. The majority of Reserve Banks also
have at least one Branch.
Reserve Bank and Branch Directors
As required by the Federal Reserve Act, each Federal Reserve Bank is supervised by a ninemember board with three different classes of three directors each: Class A directors, who are
nominated and elected by the member banks in that District to represent the stockholding banks;
Class B directors, who are nominated and elected by the member banks to represent the public;
and Class C directors, who are appointed by the Board of Governors to represent the public.
Class B and Class C directors are selected with due, but not exclusive, consideration to the interests of agriculture, commerce, industry, services, labor, and consumers. Each Federal Reserve
Bank Branch also has a board with either five or seven directors. A majority of the directors on
each Branch board are appointed by the Federal Reserve Bank, with the remaining directors
appointed by the Board of Governors.
For more information on Reserve Bank and Branch directors, see https://www.federalreserve.gov/
aboutthefed/directors/about.htm.
Reserve Bank and Branch directors are listed below. For each director, the class of directorship,
the director’s principal place of business, and the expiration date of the director’s current term are
shown. Also shown are maps that identify Federal Reserve Districts by their official number, city,
and letter designation. For more information on the Federal Reserve indicator letters, see
https://www.uscurrency.gov/denominations/bank-note-identifiers.
122 108th Annual Report | 2021
District 1–Boston
Covers the states of Maine, Massachusetts, New Hampshire, Rhode Island,
1—A
and Vermont; and all but Fairfield County in Connecticut.
VT
ME
For more information on this District and to learn more about the Federal
MA
NH
RI
CT
Boston
Reserve Bank of Boston’s operations, visit https://www.bostonfed.org/. Information on economic conditions for this District can be found in the Federal
Reserve System’s Beige Book at https://www.federalreserve.gov/
monetarypolicy/beige-book-default.htm. Also find the Reserve Bank’s financial
statements for 2021 at https://www.federalreserve.gov/aboutthefed/files/
bostonfinstmt2021.pdf.
Class A
Class B
Class C
Chandler Howard, 2021
Lauren A. Smith, 2021
Corey Thomas, 2021
Retired President and Chief Executive
Officer, Liberty Bank, Middletown, CT
Chief Health Equity and Strategy
Officer, CDC Foundation, Boston, MA
Chairman and Chief Executive Officer,
Rapid7, LLC, Boston, MA
Bruce Van Saun, 2022
Lizanne Kindler, 2022
Christina Hull Paxson, 2022
Chairman and Chief Executive Officer,
Citizens Financial Group, Stamford, CT
Chief Executive Officer, Talbots,
Hingham, MA
President, Brown University,
Providence, RI
Jeanne A. Hulit, 2023
Kimberly Sherman Stamler,
Roger W. Crandall, 2023
President and Chief Executive Officer,
Maine Community Bank, Biddeford, ME
2023
President, Related Beal, Boston, MA
Chairman, President, and Chief
Executive Officer, MassMutual
Financial Group, Springfield, MA
Federal Reserve System Organization 123
District 2–New York
Covers the state of New York; Fairfield County in Connecticut; and 12 coun-
2—B
ties in northern New Jersey, and serves the Commonwealth of Puerto Rico
NY
CT
and the U.S. Virgin Islands.
Puerto Rico
For more information on this District and to learn more about the Federal
Reserve Bank of New York’s operations, visit https://www.newyorkfed.org/.
Information on economic conditions for this District can be found in the Fed-
NJ
NY
Virgin Islands
New York
eral Reserve System’s Beige Book at https://www.federalreserve.gov/
monetarypolicy/beige-book-default.htm. Also find the Reserve Bank’s financial statements for 2021 at https://www.federalreserve.gov/aboutthefed/files/
newyorkfinstmt2021.pdf.
Class A
Class B
Class C
James P. Gorman, 2021
Scott Rechler, 2021
Vincent Alvarez, 2021
Chairman and Chief Executive Officer,
Morgan Stanley, New York, NY
Chairman and Chief Executive Officer,
RXR Realty LLC, New York, NY
President, New York City Central Labor
Council, AFL-CIO, New York, NY
Douglas L. Kennedy, 2022
Adena T. Friedman, 2022
Denise Scott, 2022
President and Chief Executive Officer,
Peapack-Gladstone Bank,
Bedminster, NJ
President and Chief Executive Officer,
Nasdaq, New York, NY
Executive Vice President, Local
Initiatives Support Corporation,
New York, NY
Vacancy, 2023
Thomas J. Murphy, 2023
Rosa Gil, 2023
President and Chief Executive Officer,
Glens Falls National Bank, Arrow
Financial Corporation, Glens Falls, NY
Founder, President, and Chief
Executive Officer, Comunilife, Inc.,
New York, NY
124 108th Annual Report | 2021
District 3–Philadelphia
Covers the state of Delaware; nine counties in southern New Jersey; and 48
3—C
counties in the eastern two-thirds of Pennsylvania.
PA
NJ
For more information on this District and to learn more about the Federal
DE
Reserve Bank of Philadelphia’s operations, visit https://www.philadelphia
fed.org/. Information on economic conditions for this District can be found
Philadelphia
in the Federal Reserve System’s Beige Book at https://www.federalreserve.
gov/monetarypolicy/beige-book-default.htm. Also find the Reserve Bank’s
financial statements for 2021 at https://www.federalreserve.gov/
aboutthefed/files/philadelphiafinstmt2021.pdf.
Class A
Class B
Class C
Timothy Snyder, 2021
Julia H. Klein, 2021
Sharmain Matlock-Turner,
President and Chief Executive Officer,
Fleetwood Bank, Fleetwood, PA
Chairwoman and Chief Executive
Officer, C. H. Briggs Company,
Reading, PA
2021
President and Chief Executive Officer,
Urban Affairs Coalition, Philadelphia, PA
John Fry, 2022
Anthony Ibarguen, 2022
President, Drexel University,
Philadelphia, PA
Chief Executive Officer, Quench USA,
Inc., King of Prussia, PA
Patricia Hasson, 2023
Madeline Bell, 2023
Retired President and Executive
Director, Clarifi, Philadelphia, PA
President and Chief Executive Officer,
The Children’s Hospital of
Philadelphia–CHOP, Philadelphia, PA
Christopher D. Maher, 2022
Chairman and Chief Executive Officer,
OceanFirst Bank, N.A., Toms River, NJ
Randall E. Black, 2023
Chief Executive Officer and President,
Citizens Financial Services Inc. and
First Citizen’s Community Bank,
Mansfield, PA
Federal Reserve System Organization 125
District 4–Cleveland
Covers the state of Ohio; 56 counties in eastern Kentucky; 19 counties in
western Pennsylvania; and 6 counties in northern West Virginia.
4—D Pittsburgh
PA
OH
For more information on this District and to learn more about the Federal
Reserve Bank of Cleveland’s operations, visit https://www.cleveland
WV
Cincinnati
KY
fed.org/. Information on economic conditions for this District can be found
Cleveland
in the Federal Reserve System’s Beige Book at https://www.federal
reserve.gov/monetarypolicy/beige-book-default.htm. Also find the Reserve
Bank’s financial statements for 2021 at https://www.federalreserve.gov/
aboutthefed/files/clevelandfinstmt2021.pdf.
Class A
Class C
David C. Evans, 2023
Eddie L. Steiner, 2021
Ana G. Rodriguez, 2021
President and Chief Executive Officer,
TESSEC LLC, Dayton, OH
President and Chief Executive Officer,
CSB Bancorp, Inc., Millersburg, OH
Senior Vice President and Chief
Human Resources Officer, The Lubrizol
Corporation, Cleveland, OH
Appointed by the Board of Governors
Dwight E. Smith, 2022
Chairman and Chief Executive Officer,
Jedson Engineering, Cincinnati, OH
Amy G. Brady, 2022
Chief Information Officer and Executive
Vice President, KeyBank,
Cleveland, OH
Dean J. Miller, 2023
President and Chief Executive Officer,
First National Bank of Bellevue,
Bellevue, OH
President and Chief Executive Officer,
Sophisticated Systems, Inc.,
Columbus, OH
Doris Carson Williams, 2023
Class B
President and Chief Executive Officer,
African American Chamber of
Commerce of Western Pennsylvania,
Pittsburgh, PA
Valarie L. Sheppard, 2021
Cincinnati Branch
Retired Controller and Treasurer, Group
Vice President-Company Transition
Leader, The Procter & Gamble
Company, Cincinnati, OH
David Megenhardt, 2022
Executive Director, United Labor
Agency, Cleveland, OH
Heidi L. Gartland, 2023
Chief Government and Community
Relations Officer, University Hospitals,
Cleveland, OH
Appointed by the Federal Reserve Bank
Tucker Ballinger, 2021
Rachid Abdallah, 2021
Holly B. Wiedemann, 2022
Founder and President, AU Associates,
Inc., Lexington, KY
Ashish K. Vaidya, 2023
President, Northern Kentucky
University, Highland Heights, KY
Pittsburgh Branch
Appointed by the Federal Reserve Bank
Vera Krekanova, 2021
President and Chief Executive Officer,
Forcht Bank, N.A., Lexington, KY
Chief Strategy and Research Officer,
Allegheny Conference on Community
Development, Pittsburgh, PA
Darin C. Hall, 2022
Sanjay Chopra, 2022
President and Chief Executive Officer,
Civitas Development Group,
Cincinnati, OH
Alfonso Cornejo, 2023
President, Hispanic Chamber
Cincinnati USA, Cincinnati, OH
Co-Founder and Chief Executive
Officer, Cognistx, Pittsburgh, PA
126 108th Annual Report | 2021
Earl Buford, 2023
Appointed by the Board of Governors
Kathryn Z. Klaber, 2022
President, CAEL, Indianapolis, IN
Dmitri D. Shiry, 2021
Christina A. Cassotis, 2023
Retired Partner Deloitte-Pittsburgh,
Deloitte LLP, Pittsburgh, PA
Managing Partner, The Klaber Group,
Sewickley, PA
Chief Executive Officer, Allegheny
County Airport Authority, Pittsburgh, PA
Suzanne Mellon, 2023
President Emerita, Carlow University,
Pittsburgh, PA
Federal Reserve System Organization 127
District 5–Richmond
Covers the states of Maryland, Virginia, North Carolina, and South Caro-
5—E
Baltimore
lina; 49 counties constituting most of West Virginia; and the District
of Columbia.
MD
VA
WV
NC
Charlotte
For more information on this District and to learn more about the Federal
Reserve Bank of Richmond’s operations, visit https://www.richmond
fed.org/. Information on economic conditions for this District can be
SC
Richmond
found in the Federal Reserve System’s Beige Book at https://
www.federalreserve.gov/monetarypolicy/beige-book-default.htm. Also find
the Reserve Bank’s financial statements for 2021 at https://www.federalreserve.gov/
aboutthefed/files/richmondfinstmt2021.pdf.
Class A
Class C
Brenda Galgano, 2023
James H. Sills, III, 2021
Eugene A. Woods, 2021
Senior Vice President and Chief
Financial Officer, Perdue, Salisbury, MD
President and Chief Executive Officer,
Mechanics and Farmers Bank,
Durham, NC
President and Chief Executive Officer,
Atrium Health, Charlotte, NC
Appointed by the Board of Governors
William A. Loving, Jr., 2022
Chief Executive Officer, EDENS,
Washington, DC
President and Chief Executive Officer,
Pendleton Community Bank,
Franklin, WV
Jennifer LaClair, 2023
Chief Financial Officer, Ally Bank,
Charlotte, NC
Jodie McLean, 2022
Lisa M. Hamilton, 2023
President and Chief Executive Officer,
The Annie E. Casey Foundation,
Baltimore, MD
Baltimore Branch
Class B
Catherine A. Meloy, 2021
President and Chief Executive Officer,
Goodwill of Greater Washington/
Goodwill Excel Center, Washington, DC
Wayne A. I. Frederick, MD,
2022
President, Howard University,
Washington, DC
Robert M. Blue, 2023
President and Chief Executive Officer,
Dominion Energy, Richmond, VA
Appointed by the Federal Reserve Bank
Kenneth R. Banks, 2021
President and Chief Executive Officer,
Banks Contracting Company,
Greenbelt, MD
William J. McCarthy, 2022
Executive Director, Catholic Charities
of Baltimore, Baltimore, MD
Leslie D. Hale, 2023
President and Chief Executive Officer,
RLJ Lodging Trust, Bethesda, MD
Laura L. Gamble, 2021
Charlotte Branch
Regional President Greater Maryland,
PNC, Baltimore, MD
Appointed by the Federal Reserve Bank
Tom Geddes, 2021
George Dean Johnson III, 2021
Partner and Portfolio Manager, Brown
Advisory, Baltimore, MD
Cecilia A. Hodges, 2022
Regional President Greater Washington and Virginia, M&T Bank,
Falls Church, VA
Chief Executive Officer, Johnson
Development Associates, Inc.,
Spartanburg, SC
128 108th Annual Report | 2021
Jerry L. Ocheltree, 2021
Appointed by the Board of Governors
James F. Goodmon Jr., 2022
President and Chief Executive Officer,
United Bank, Lincolnton, NC
Bernett William Mazyck, 2021
President and Chief Operating Officer,
Capitol Broadcasting Company,
Raleigh, NC
Dionne Nelson, 2022
President and Chief Executive Officer,
Laurel Street Residential, Charlotte, NC
Vacancy, 2023
President and Chief Executive Officer,
South Carolina Association for
Community Economic Development,
Charleston, SC
R. Glenn Sherrill, Jr., 2023
Chairman and Chief Executive Officer,
SteelFab Inc., Charlotte, NC
Federal Reserve System Organization 129
District 6–Atlanta
Covers the states of Alabama, Florida, and Georgia; 74
counties in the eastern two-thirds of Tennessee; 38 parishes of southern Louisiana; and 43 counties of southern
6—F
Nashville
TN
AL
Birmingham
MS
Mississippi.
For more information on this District and to learn more
GA
LA
New Orleans
Jacksonville
FL
about the Federal Reserve Bank of Atlanta’s operations,
visit https://www.frbatlanta.org/. Information on economic
Miami
Atlanta
conditions for this District can be found in the Federal
Reserve System’s Beige Book at https://www.federal
reserve.gov/monetarypolicy/beige-book-default.htm. Also find the Reserve Bank’s financial statements for 2021 at https://www.federalreserve.gov/aboutthefed/files/atlantafinstmt2021.pdf.
Class A
Class C
Larry D. Thornton Sr., 2023
Claire W. Tucker, 2021
Claire Lewis Arnold, 2021
President and Chief Executive Officer,
Thornton Enterprises, Birmingham, AL
Founding President and Chief
Executive Officer Emerita, CapStar
Financial Holdings, Inc., Nashville, TN
Chief Executive Officer, Leapfrog
Services, Inc., Atlanta, GA
Appointed by the Board of Governors
Robert W. Dumas, 2022
Former Executive Chair, Bloomin’
Brands, Inc., Tampa, FL
Chairman, President, and Chief
Executive Officer, AuburnBank,
Auburn, AL
Elizabeth A. Smith, 2022
Myron A. Gray, 2023
Kessel D. Stelling, Jr., 2023
Retired President, U.S. Operations,
United Parcel Service, Atlanta, GA
Executive Chair, Synovus Financial
Corporation, Columbus, GA
Birmingham Branch
Class B
Michael Russell, 2021
Chief Executive Officer, H.J. Russell
and Company, Atlanta, GA
Mary A. Laschinger, 2022
Former Chairman and Chief Executive
Officer, Veritiv Corporation, Atlanta, GA
Gregory A. Haile, 2023
President, Broward College, Fort
Lauderdale, FL
Appointed by the Federal Reserve Bank
Christy Thomas, 2021
President and Co-Founder, Thomas
James Co., Birmingham, AL
Merrill H. Stewart, Jr., 2022
President, The Stewart/Perry
Company, Inc., Birmingham, AL
Maye Head-Frei, 2023
Chairman, Ram Tool and Supply
Company, Birmingham, AL
David M. Benck, 2021
Jacksonville Branch
Vice President and General Counsel,
Hibbett, Inc., Birmingham, AL
Appointed by the Federal Reserve Bank
David L. Nast, 2021
President and Chief Executive Officer,
Progress Bank, Huntsville, AL
Brian C. Hamilton, 2022
President and Chief Executive Officer,
Trillion Communications Corp.,
Bessemer, AL
John Hirabayashi, 2021
President and Chief Executive Officer,
Community First Credit Union of
Florida, Jacksonville, FL
Dawn Lockhart, 2021
Director of Strategic Partnerships,
Office of the Mayor, City of
Jacksonville, Jacksonville, FL
130 108th Annual Report | 2021
Paul G. Boynton, 2022
Ana M. Menendez, 2022
New Orleans Branch
Vice Chairman, Rayonier Advanced
Materials, Inc., Jacksonville, FL
Chief Financial Officer and Treasurer,
Watsco, Inc., Miami, FL
Appointed by the Federal Reserve Bank
William O. West, 2023
Keith T. Koenig, 2023
Chief Executive Officer, The Bank of
Tampa, Tampa, FL
Chief Executive Officer, City Furniture,
Tamarac, FL
Appointed by the Board of Governors
Timothy P. Cost, 2021
President, Jacksonville University,
Jacksonville, FL
Nicole B. Thomas, 2022
Hospital President, Baptist Medical
Center Jacksonville, Jacksonville, FL
Edward A. Moratin, 2023
Nashville Branch
Appointed by the Federal Reserve Bank
Katherine A. Crosby, 2021
Board Chair, Fidelity Bank,
New Orleans, LA
David T. Darragh, 2021
Operating Partner, LongueVue Capital,
Metairie, LA
Beth R. Chase, 2021
Vacancy, 2022
Former Senior Managing Director,
Ankura Consulting Group,
Nashville, TN
William G. Yates III, 2023
Leif M. Murphy, 2021
President and Chief Executive Officer,
W.G. Yates & Sons Construction
Company, Biloxi, MS
President, LIFT Orlando, Orlando, FL
Chief Executive Officer, TeamHealth
Holdings, Inc., Knoxville, TN
Appointed by the Board of Governors
Miami Branch
Amber W. Krupacs, 2022
President and Chief Executive Officer,
Performance Contractors, Inc.,
Baton Rouge, LA
Appointed by the Federal Reserve Bank
Abel L. Iglesias, 2021
President and Chief Operating Officer,
Professional Bank, Coral Gables, FL
Eduardo Arriola, 2022
Chairman and Chief Executive Officer,
Apollo Bank, Miami, FL
Daniel Lavender, 2023
Chief Executive Officer, Moorings Park
Institute, Inc., Naples, FL
N. Maria Menendez, 2023
Chief Financial Officer, GL Homes of
Florida Holding, Sunrise, FL
Appointed by the Board of Governors
Michael A. Wynn, 2021
Board Chairman and President,
Sunshine Ace Hardware,
Bonita Springs, FL
Chief Financial Officer and Executive
Vice President, Clayton Homes,
Maryville, TN
John W. Garratt, 2023
Executive Vice President and Chief
Financial Officer, Dollar General,
Goodlettsville, TN
Appointed by the Board of Governors
Thomas Zacharia, 2021
Laboratory Director/ President and
Chief Executive Officer, Oak Ridge
National Laboratory/ UT-Battelle, LLC,
Oak Ridge, TN
Matthew S. Bourlakas, 2022
President and Chief Executive Officer,
Goodwill Industries of Middle
Tennessee, Inc., Nashville, TN
Amanda Mathis, 2023
Chief Financial Officer, Bridgestone
Americas, Inc., Nashville, TN
Art E. Favre, 2021
G. Janelle Frost, 2022
President and Chief Executive Officer,
AMERISAFE, Inc., DeRidder, LA
Michael E. Hicks, Jr., 2023
President and Chief Executive Officer,
Hixardt Technologies, Inc.,
Pensacola, FL
Federal Reserve System Organization 131
District 7–Chicago
Covers the state of Iowa; 68 counties of northern Indiana; 50
7—G
counties of northern Illinois; 68 counties of southern Michigan;
MI
and 46 counties of southern Wisconsin.
For more information on this District and to learn more about the
WI
Detroit
IA
IL
Federal Reserve Bank of Chicago’s operations, visit https://
IN
www.chicagofed.org/. Information on economic conditions for
this District can be found in the Federal Reserve System’s Beige
Chicago
Book at https://www.federalreserve.gov/monetarypolicy/beigebook-default.htm. Also find the Reserve Bank’s financial statements for 2021 at https://www.federalreserve.gov/aboutthefed/files/chicagofinstmt2021.pdf.
Class A
Class C
Sandy K. Baruah, 2023
Christopher J. Murphy III, 2021
Wright L. Lassiter III, 2021
President and Chief Executive Officer,
Detroit Regional Chamber, Detroit, MI
Chairman and Chief Executive Officer,
1st Source Bank, South Bend, IN
President and Chief Executive Officer,
Henry Ford Health System, Detroit, MI
Sandra E. Pierce, 2023
Susan Whitson, 2022
Helene D. Gayle, 2022
Chief Executive Officer, First Bank, and
President, First of Waverly Corporation,
Waverly, IA
President and Chief Executive Officer,
The Chicago Community Trust,
Chicago IL
Senior Executive Vice President,
Private Client Group and Regional
Banking Director, and Chair of
Michigan, Huntington Bank,
Southfield, MI
Michael O’Grady, 2023
E. Scott Santi, 2023
Appointed by the Board of Governors
Chairman, President, and Chief
Executive Officer, Northern Trust,
Chicago, IL
Chairman and Chief Executive Officer,
Illinois Tool Works Inc., Glenview, IL
James M. Nicholson, 2021
Detroit Branch
Class B
Susan M. Collins, 2021
Interim Provost and Executive Vice
President for Academic Affairs,
University of Michigan, Ann Arbor, MI
Linda Jojo, 2022
Executive Vice President, Technology
and Chief Digital Officer, United
Airlines, Inc., Chicago, IL
David Cyril Habiger, 2023
President and Chief Executive Officer,
J.D. Power, Troy, MI
Appointed by the Federal Reserve Bank
Co-Chairman, PVS Chemicals, Inc.,
Detroit, MI
Linda P. Hubbard, 2022
Rip Rapson, 2021
President and Chief Operating Officer,
Carhartt, Inc., Dearborn, MI
President and Chief Executive Officer,
The Kresge Foundation, Troy, MI
Joseph B. Anderson, Jr., 2023
Ronald E. Hall, 2022
Chairman and Chief Executive Officer,
TAG Holdings, LLC, Wixom, MI
President and Chief Executive Officer,
Bridgewater Interiors, LLC, Detroit, MI
132 108th Annual Report | 2021
District 8–St. Louis
Covers the state of Arkansas; 44 counties in southern Illinois;
8—H
IL
MO
AR
Little Rock
KY
IN
Louisville
TN
Memphis
24 counties in southern Indiana; 64 counties in western Kentucky;
39 counties in northern Mississippi; 71 counties in central and
eastern Missouri; the city of St. Louis; and 21 counties in western
Tennessee.
MS
For more information on this District and to learn more about the
St. Louis
Federal Reserve Bank of St. Louis’s operations, visit https://
www.stlouisfed.org/. Information on economic conditions for this District can be found in the Federal Reserve System’s Beige Book at
https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm. Also find the Reserve
Bank’s financial statements for 2021 at https://www.federalreserve.gov/aboutthefed/files/
stlouisfinstmt2021.pdf.
Class A
Class C
Darrin Williams, 2023
Patricia L. Clarke, 2021
Suzanne Sitherwood, 2021
Chief Executive Officer, Southern
Bancorp, Inc., Little Rock, AR
President and Chief Executive Officer,
First National Bank of Raymond,
Raymond, IL
President and Chief Executive Officer,
Spire Inc., St. Louis, MO
Appointed by the Board of Governors
C. Mitchell Waycaster, 2022
President and Chief Executive Officer,
Renasant Bank, Tupelo, MS
President and Chief Executive Officer,
Chism Hardy Investments, LLC,
Collierville, TN
Vice President Finance, Emerging
Payments, Walmart Inc.,
Bentonville, AR
Elizabeth G. McCoy, 2023
James M. McKelvey, Jr., 2023
Millie A. Ward, 2022
Chief Executive Officer, Planters Bank,
Hopkinsville, KY
Founder and Chief Executive Officer,
Invisibly, Inc., St. Louis, MO
Class B
Little Rock Branch
Alice K. Houston, 2021
Appointed by the Federal Reserve Bank
Chief Executive Officer, HJI Supply
Chain Solutions, Louisville, KY
Jeff Lynch, 2021
Louisville Branch
President and Chief Executive Officer,
Eagle Bank and Trust, Little Rock, AR
Appointed by the Federal Reserve Bank
Christopher B. Hegi, 2022
Ben Reno-Weber, 2021
Penelope Pennington, 2022
Managing Partner, Edward Jones,
St. Louis, MO
R. Andrew Clyde, 2023
President and Chief Executive Officer,
Murphy USA Inc., El Dorado, AR
Carolyn Chism Hardy, 2022
Jamie Henry, 2021
President, Stone Ward, Little Rock, AR
Vickie D. Judy, 2023
Chief Financial Officer and Vice
President, America’s Car-Mart, Inc,
Bentonville, AR
Chief Executive Officer, First Financial
Bank, El Dorado, AR
Project Director, Greater Louisville
Project, Louisville, KY
Vincent G. Logan, 2023
Patrick J. Glotzbach, 2022
Chief Financial Officer and Chief
Investment Officer, Native American
Agriculture Fund, Fayetteville, AR
Director, New Independent
Bancshares, Inc., Charlestown, IN
Federal Reserve System Organization 133
Tara England Barney, 2023
Memphis Branch
Appointed by the Board of Governors
President and Chief Executive Officer,
Southwest Indiana Chamber of
Commerce, Evansville, IN
Appointed by the Federal Reserve Bank
Eric D. Robertson, 2021
Beverly Crossen, 2021
President, Community LIFT
Corporation, Memphis, TN
Blake B. Willoughby, 2023
Owner, Farmhouse Tupelo, Tupelo, MS
President, First Breckinridge
Bancshares, Inc., Irvington, KY
R. Davy Carter, 2022
Katherine Buckman Gibson,
Appointed by the Board of Governors
Regional President, Home
BancShares, Inc., Jonesboro, AR
2022
Chief Executive Officer, KBG
Technologies, LLC, Memphis, TN
Emerson M. Goodwin, 2021
Jeff Agee, 2023
Michael Ugwueke, 2023
Senior Vice President of Business
Development, ARcare d/b/a
KentuckyCare, Paducah, KY
Chairman and Chief Executive Officer,
First Citizens National Bank,
Dyersburg, TN
President and Chief Executive Officer,
Methodist Le Bonheur Healthcare,
Memphis, TN
David Tatman, 2022
Henry N. Reichle Jr., 2023
Director of Engineering, Bendix Spicer
Foundation Brake, LLC,
Bowling Green, KY
President and Chief Executive Officer,
Staplcotn, Greenwood, MS
Sadiqa N. Reynolds, 2023
President, Louisville Urban League,
Louisville, KY
134 108th Annual Report | 2021
District 9–Minneapolis
Covers the states of Minnesota, Montana,
9—I
North Dakota, and South Dakota; the Upper
MT
Helena
ND
Peninsula of Michigan; and 26 counties in
MN
SD
MI
northern Wisconsin.
WI
For more information on this District and to
learn more about the Federal Reserve Bank
Minneapolis
of Minneapolis’s operations, visit https://
www.minneapolisfed.org/. Information on
economic conditions for this District can be found in the Federal Reserve System’s Beige Book at
https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm. Also find the Reserve
Bank’s financial statements for 2021 at https://www.federalreserve.gov/aboutthefed/files/
minneapolisfinstmt2021.pdf.
Class A
Paul D. Williams, 2023
Mary Rutherford, 2022
Jeanne H. Crain, 2021
President and Chief Executive Officer,
Project for Pride in Living,
Minneapolis, MN
President and Chief Executive Officer,
Montana Community Foundation,
Helena, MT
President and Chief Executive Officer,
Bremer Financial Corporation,
St. Paul, MN
Brenda K. Foster, 2022
Chairman, President, and Chief
Executive Officer, First Western Bank
and Trust, Minot, ND
Gerald H. Jacobson, 2023
President, Northwestern Bank,
Chippewa Falls, WI
Class B
Sarah Walsh, 2021
Chief Operating Officer, PayneWest
Insurance, Helena, MT
David R. Emery, 2022
Executive Chairman, Retired, Black
Hills Corporation, Rapid City, SD
Class C
Harry D. Melander, 2021
Retired President, Minnesota Building
and Construction Trades Council,
St. Paul, MN
Christopher M. Hilger, 2022
Chairman, President, and Chief
Executive Officer, Securian Financial,
St. Paul, MN
Srilata Zaheer, 2023
Dean, Carlson School of Management,
University of Minnesota, Minneapolis, MN
Helena Branch
Appointed by the Federal Reserve Bank
Jason Adams, 2021
Owner and Consultant, Ace Housing
and Development, LLC, Polson, MT
William E. Coffee, 2023
Chief Executive Officer, Stockman
Financial Corporation, Billings, MT
Appointed by the Board of Governors
Bobbi Wolstein, 2021
Chief Financial Officer, LHC, Inc.,
Kalispell, MT
Alan D. Ekblad, 2023
Senior Status, Montana AFL-CIO,
Helena, MT
Federal Reserve System Organization 135
District 10–Kansas City
Covers the states of Colorado, Kansas, Nebraska,
10—J
Oklahoma, and Wyoming; 43 counties in western
WY
Missouri; and 14 counties in northern New Mexico.
NE
MO
Omaha
CO
For more information on this District and to learn
Denver
KS
more about the Federal Reserve Bank of Kansas
City’s operations, visit https://www.kansas
NM
Oklahoma City
cityfed.org/. Information on economic conditions for
this District can be found in the Federal Reserve
OK
Kansas City
System’s Beige Book at https://www.federal
reserve.gov/monetarypolicy/beige-book-default.htm.
Also find the Reserve Bank’s financial statements for 2021 at https://www.federalreserve.gov/
aboutthefed/files/kansascityfinstmt2021.pdf.
Class A
Class C
Jeffrey C. Wallace, 2022
Kyle Heckman, 2021
Edmond Johnson, 2021
Chief Executive Officer, Wyoming Bank
& Trust, Cheyenne, WY
Chairman, President, and Chief
Executive Officer, Flatirons Bank,
Boulder, CO
President and Owner, Premier
Manufacturing, Inc., Frederick, CO
Rachel Gerlach, 2023 Chief
Patrick A. Dujakovich, 2022
Gregory Hohl, 2022
Credit Officer, Alpine Bank,
Glenwood Springs, CO
President, Greater Kansas City
AFL-CIO, Kansas City, MO
Appointed by the Board of Governors
Chairman and President, Wahoo State
Bank, Wahoo, NE
Patricia J. Minard, 2023
Chairman, President, and Chief
Executive Officer, Southwest National
Bank, Wichita, KS
Class B
Cassandra R. Savage, 2021
Owner and Member, The Savage
Group, LLC, Lenexa, KS
Douglas J. Stussi, 2022
Executive Adviser, Love Family of
Companies, Oklahoma City, OK
Ruben Alonso III, 2023
President, AltCap, Kansas City, MO
Maria Griego-Raby, 2023
President and Principal, Contract
Associates, Albuquerque, NM
Denver Branch
Appointed by the Federal Reserve Bank
Nicole Glaros, 2021
Jacqueline Baca, 2021
President, Bueno Foods,
Albuquerque, NM
Jandel Allen-Davis, MD, 2022
Chief Executive Officer and President,
Craig Hospital, Englewood, CO
Navin Dimond, 2023
Chief Investment Strategy Officer,
Techstars, Boulder, CO
Chief Executive Officer and Chairman,
Stonebridge Companies, Denver, CO
Chris Wright, 2021
Oklahoma City Branch
Chief Executive Officer, Liberty Oilfield
Services, Denver, CO
Appointed by the Federal Reserve Bank
J. Walter Duncan IV, 2021
President, Duncan Oil Properties, Inc.,
Oklahoma City, OK
136 108th Annual Report | 2021
Susan Chapman Plumb, 2022
Omaha Branch
Appointed by the Board of Governors
Board Chair and Chief Executive
Officer, Bank of Cherokee County,
Tahlequah, OK
Appointed by the Federal Reserve Bank
Kimberly A. Russel, 2021
Thomas J. Henning, 2021
Chief Executive Officer, Russel
Advisors, Lincoln, NE
Christopher C. Turner, 2022
President and Chief Executive Officer,
Cash-Wa Distributing Co., Kearney, NE
L. Javier Fernandez, 2022
Chief Operating Officer and Executive
Vice President, The First National
Bank & Trust, Oklahoma City, OK
Brady Sidwell, 2023
Owner and Principal, Sidwell
Strategies, LLC, Enid, OK
Zac Karpf, 2021
President, Platte Valley Bank,
Scottsbluff, NE
Annette Hamilton, 2022
Appointed by the Board of Governors
Chief Operating Officer, Ho-Chunk, Inc.,
Winnebago, NE
Tina Patel, 2021
Dwayne W. Sieck, 2023
Chief Financial Officer, Promise Hotels,
LLC, Tulsa, OK
Managing Principal, Farnam Street
Real Estate Capital, Omaha, NE
Dana S. Weber, 2022
Chief Executive Officer and Chairman
of the Board, Webco Industries, Inc.,
Sand Springs, OK
Katrina Washington, 2023
Owner, Stratos Realty Group,
Oklahoma City, OK
President and Chief Executive Officer,
Omaha Public Power District,
Omaha, NE
Carmen Tapio, 2023
Owner, President, and Chief Executive
Officer, North End Teleservices, LLC,
Omaha, NE
Federal Reserve System Organization 137
District 11–Dallas
Covers the state of Texas; 26 parishes in northern
11—K
Louisiana; and 18 counties in southern New Mexico.
TX
NM
LA
For more information on this District and to learn
El Paso
Houston
more about the Federal Reserve Bank of Dallas’s
operations, visit https://www.dallasfed.org/. Infor-
San Antonio
mation on economic conditions for this District can
be found in the Federal Reserve System’s Beige
Dallas
Book at https://www.federalreserve.gov/
monetarypolicy/beige-book-default.htm. Also find the
Reserve Bank’s financial statements for 2021 at https://www.federalreserve.gov/aboutthefed/
files/dallasfinstmt2021.pdf.
Class A
Class C
Sally A. Hurt-Deitch, 2023
Kelly A. Barclay, 2021
Greg L. Armstrong, 2021
Senior Vice President of Operations,
Ascension, El Paso, TX
President and Chief Executive Officer,
Ozona Bank, Wimberly, TX
Retired Chairman and Chief Executive
Officer, Plains All American Pipeline
L.P., Houston, TX
Appointed by the Board of Governors
Joe Quiroga, 2022
President, Texas National Bank,
Edinburg, TX
Robert A. Hulsey, 2023
President and Chief Executive Officer,
American National Bank of Texas,
Terrell, TX
Thomas J. Falk, 2022
Retired Chairman and Chief Executive
Officer, Kimberly-Clark Corporation,
Dallas, TX
Claudia Aguirre, 2023
President and Chief Executive Officer,
BakerRipley, Houston, TX
Class B
Renard U. Johnson, 2021
President and Chief Executive Officer,
Management & Engineering
Technologies International, Inc.,
El Paso, TX
Cynthia Taylor, 2022
President and Chief Executive Officer,
Oil States International Inc.,
Houston, TX
Gerald B. Smith, 2023
Chairman and Chief Executive Officer,
Smith, Graham & Company Investment
Advisors, L.P., Houston, TX
Tracy J. Yellen, 2021
Chief Executive Officer, Paso del Norte
Community Foundation and Paso Del
Norte Health Foundation, El Paso, TX
Julio Chiu, 2022
Founder and Chief Executive Officer,
Seisa Group, El Paso, TX
Vacancy, 2023
El Paso Branch
Houston Branch
Appointed by the Federal Reserve Bank
Appointed by the Federal Reserve Bank
William Serrata, 2021
President, El Paso Community College,
El Paso, TX
Von C. Washington, Sr., 2022
President, IDA Technology, El Paso, TX
Jill Gutierrez, 2023
Director, Bank 34, Alamogordo, NM
David Zalman, 2021
Chairman and Chief Executive Officer,
Prosperity Bancshares, Houston, TX
Gary R. Petersen, 2022
Managing Partner and Founder, EnCap
Investments L.P., Houston, TX
138 108th Annual Report | 2021
Gina Luna, 2023
San Antonio Branch
Appointed by the Board of Governors
Chief Executive Officer, Luna
Strategies, LLC, Houston, TX
Appointed by the Federal Reserve Bank
Jesús Garza, 2021
Alfred B. Jones, 2021
Retired President and Chief Executive
Officer, Seton Healthcare Family,
Austin, TX
Bhavesh V. Patel, 2023
Chief Executive Officer, LyondellBasell
Industries, Houston, TX
Appointed by the Board of Governors
Director, American Bank Holding Corp.,
Corpus Christi, TX
Charles E. Amato, 2022
Vacancy, 2021
Chairman and Co-Founder, Southwest
Business Corp., San Antonio, TX
Darryl L. Wilson, 2022
Veronica Muzquiz Edwards,
President and Founder, The Wilson
Collective, Houston, TX
2023
Chief Executive Officer, InGenesis,
Inc., San Antonio, TX
Ruth J. Simmons, 2023
President, Prairie View A&M University,
Prairie View, TX
Tyson Tuttle, 2023
President and Chief Executive Officer,
Silicon Labs, Austin, TX
Denise M. Trauth, 2022
President, Texas State University,
San Marcos, TX
Paula Gold-Williams, 2023
President and Chief Executive Officer,
CPS Energy, San Antonio, TX
Federal Reserve System Organization 139
District 12–San Francisco
Covers the states of Alaska, Arizona, California, Hawaii,
12—L
Idaho, Nevada, Oregon, Utah, and Washington, and serves
American Samoa, Guam, and the Commonwealth of the
Northern Mariana Islands.
WA
Alaska
Seattle
Portland
For more information on this District and to learn more
OR
ID
about the Federal Reserve Bank of San Francisco’s operations, visit http://www.frbsf.org/. Information on economic
conditions for this District can be found in the Federal
CA
Reserve System’s Beige Book at https://www.federal
https://www.federalreserve.gov/aboutthefed/files/
Salt Lake
City
UT
Los Angeles
reserve.gov/monetarypolicy/beige-book-default.htm. Also
find the Reserve Bank’s financial statements for 2021 at
NV
Guam
Hawaii
AZ
San Francisco
sanfranciscofinstmt2021.pdf.
Class A
Class C
Wayne Bradshaw, 2022
Greg Becker, 2021
David P. White, 2021
Chairman, Broadway Financial
Corporation, Los Angeles, CA
President and Chief Executive Officer,
SVB Financial Group, Chief Executive
Officer, Silicon Valley Bank,
Santa Clara, CA
Immediate Past Chief Executive
Officer, Chief Negotiator and Strategic
Advisor, SAG-AFTRA, Venture Partner,
Ulu Ventures, Los Angeles, CA
Vacancy, 2022
Rosemary Turner, 2022
Appointed by the Board of Governors
S. Randolph Compton, 2023
Retired President, North California
District, United Parcel Service, Inc.,
Oakland, CA
Anita V. Pramoda, 2021
Tamara L. Lundgren, 2023
Mario Cordero, 2022
Co-Chair of the Board, Pioneer Trust
Bank, N.A., Salem, OR
Class B
Arthur F. Oppenheimer, 2021
Chairman, President, and Chief
Executive Officer, Schnitzer Steel
Industries, Inc., Portland, OR
Theresa Benelli, 2023
Executive Director, LISC Phoenix,
Phoenix, AZ
Chief Executive Officer, Owned
Outcomes, Las Vegas, NV
Executive Director, Port of Long Beach,
Long Beach, CA
Chairman and Chief Executive Officer,
Oppenheimer Companies, Inc.,
President, Oppenheimer Development
Corporation, Boise, ID
Los Angeles Branch
Sanford L. Michelman, 2022
Maritza Diaz, 2021
Chief Executive Officer, Kairos
Investment Management Company,
Chairman of the Board, Pieology
Pizzeria, Rancho Santa Margarita, CA
Chairman, Michelman & Robinson, LLP,
Los Angeles, CA
Chief Executive Officer, iTjuana,
San Marcos, CA
Portland Branch
Karen Lee, 2023
Jack Sinclair, 2021
Appointed by the Federal Reserve Bank
Chief Executive Officer, Sprouts
Farmers Market, Phoenix, AZ
Stacey M.L. Dodson, 2021
Chief Executive Officer, Pioneer Human
Services, Seattle, WA
Carl J.P. Chang, 2023
Appointed by the Federal Reserve Bank
Market President, Portland and
Southwest Washington, U.S. Bank,
Portland, OR
140 108th Annual Report | 2021
Maria Pope, 2022
Deneece Huftalin, 2022
Seattle Branch
President and Chief Executive Officer,
Portland General Electric Company,
Portland, OR
President, Salt Lake Community
College, Tayorsville, UT
Appointed by the Federal Reserve Bank
Hilary K. Krane, 2023
Executive Chairman,
Bodybuilding.com, Boise, ID
Executive Vice President, Chief
Administrative Officer, and General
Counsel, Nike, Inc., Beaverton, OR
Cheryl R. Nester Wolfe, 2023
President and Chief Executive Officer,
Salem Health Hospital and Clinics,
Salem, OR
Jas Krdzalic, 2023
Len E. Williams, 2023
President and Chief Executive Officer,
Altabank, American Fork, UT
Appointed by the Board of Governors
O. Randall Woodbury, 2021
Gale Castillo, 2021
President and Chief Executive Officer,
Woodbury Corporation,
Salt Lake City, UT
President, Cascade Centers, Inc.,
Portland, OR
Russell A. Childs, 2022
Appointed by the Board of Governors
Anne C. Kubisch, 2022
President and Chief Executive Officer,
The Ford Family Foundation,
Roseburg, OR
Graciela Gomez-Cowger, 2023
Chief Executive Officer, Schwabe,
Williamson & Wyatt, Portland, OR
Salt Lake City Branch
Appointed by the Federal Reserve Bank
Lisa Ann Grow, 2021
President and Chief Executive Officer,
IdaCorp & Idaho Power, Boise, ID
Chief Executive Officer and President,
SkyWest, Inc., St. George, UT
Susan D. Morris, 2023
Executive Vice President and Chief
Operations Officer, Albertsons
Companies, Boise, ID
Cheryl B. Fambles, 2021
Chief Executive Officer, Pacific
Mountain Workforce Development
Council, Tumwater, WA
Robert C. Donegan, 2022
President, Ivar’s Inc., Seattle, WA
Carol Gore, 2023
President and Chief Executive Officer,
Cook Inlet Housing Authority,
Anchorage, AK
Laura Lee Stewart, 2023
President and Chief Executive Officer,
Sound Community Bank and Sound
Financial Bancorporation, Seattle, WA
Appointed by the Board of Governors
West Mathison, 2021
President, Stemilt Growers, LLC,
Wenatchee, WA
Sheila Edwards Lange, 2022
Chancellor, University of Washington,
Tacoma, WA
John Wolfe, 2023
Chief Executive Officer, Northwest
Seaport Alliance, Tacoma, WA
Federal Reserve System Organization 141
Reserve Bank and Branch Leadership
Each year, the Board of Governors designates one Class C director to serve as chair, and one
Class C director to serve as deputy chair, of each Reserve Bank board. Reserve Banks also have a
president and first vice president who are appointed by the Bank’s Class C, and certain Class B,
directors, subject to approval by the Board of Governors. Each Reserve Bank selects a chair for
every Branch in its District from among the directors on the Branch board who were appointed by
the Board of Governors. For each Branch, an officer from its Reserve Bank is also charged with the
oversight of Branch operations.
Boston
Christina Hull Paxson, Chair
Corey Thomas, Deputy Chair
Kenneth C. Montgomery,
Interim President and Chief Executive
Officer, First Vice President
New York
Denise Scott, Chair
Rosa Gil, Deputy Chair
John C. Williams, President and
Naureen Hassan, First Vice
Chief Executive Officer
President
Additional office at East Rutherford, NJ
Philadelphia
Madeline Bell, Chair
Patrick T. Harker, President
James D. Narron, First Vice
and Chief Executive Officer
President and Chief Operating Officer
Dwight E. Smith, Chair
Cincinnati
Pittsburgh
Doris Carson Williams,
Rachid Abdallah, Chair
Dmitri D. Shiry, Chair
Rick Kaglic, Vice President
Mekael Teshome, Vice President
and Senior Regional Officer
and Senior Regional Officer
Anthony Ibarguen, Deputy Chair
Cleveland
Deputy Chair
Loretta J. Mester, President
and Chief Executive Officer
Gregory L. Stefani, First Vice
President and Chief Operating Officer
142 108th Annual Report | 2021
Richmond
Eugene A. Woods, Chair
Baltimore
Charlotte
Jodie McLean, Deputy Chair
Kenneth R. Banks, Chair
R. Glenn Sherrill, Jr, Chair
Thomas I. Barkin, President and
Andy Bauer, Vice President and
Matthew A. Martin, Senior Vice
Chief Executive Officer
Baltimore Regional Executive
President and Charlotte Regional
Executive
Elizabeth A. Smith, Chair
Jacksonville
Nashville
Claire Lewis Arnold,
Timothy P. Cost, Chair
Thomas Zacharia, Chair
Christopher L. Oakley, Vice
Laurel Graefe, Vice President and
President and Regional Executive
Regional Executive
Miami
New Orleans
President and Chief Operating Officer
Michael A. Wynn, Chair
Michael E. Hicks, Jr., Chair
Birmingham
Karen Gilmore, Vice President and
Adrienne C. Slack, Vice President
Regional Executive
and Regional Executive
Becky Bareford, First Vice
President and Chief Operating Officer
Atlanta
Deputy Chair
Raphael W. Bostic, President
and Chief Executive Officer
André Anderson, First Vice
Merrill H. Stewart, Jr., Chair
Anoop Mishra, Vice President
Shari Bower, Vice President and
Regional Executive
and Regional Executive
Chicago
E. Scott Santi, Chair
Helene D. Gayle, MD,
Deputy Chair
Charles L. Evans, President and
Chief Executive Officer
Ellen Bromagen, First Vice
President and Chief Operating Officer
Detroit
Joseph B. Anderson, Jr, Chair
Rick Mattoon, Vice President
and Regional Executive
Additional office at Des Moines, IA
Federal Reserve System Organization 143
St. Louis
Suzanne Sitherwood, Chair
Little Rock
Memphis
James M. McKelvey, Jr.,
Jamie Henry, Chair
Katherine Buckman Gibson,
Deputy Chair
James B. Bullard, President
Robert Hopkins, Senior Vice
President and Regional Executive
and Chief Executive Officer
Kathy O. Paese, First Vice
President and Chief Operating Officer
Chair
Douglas G. Scarboro, Senior
Vice President and Regional Executive
Louisville
Emerson M. Goodwin, Chair
Nikki R. Lanier, Senior Vice
President and Regional Executive
Minneapolis
Srilata Zaheer, Chair
Harry D. Melander, Deputy Chair
Neel Kashkari, President and
Chief Executive Officer
Ron J. Feldman, First Vice
Helena
Bobbi Wolstein, Chair
President
Kansas City
Edmond Johnson, Chair
Denver
Omaha
Patrick A. Dujakovich,
Navin Dimond, Chair
Kimberly A. Russel, Chair
Nicholas Sly, Assistant Vice
Nathan Kauffman, Assistant Vice
President and Branch Executive
President and Branch Executive
Deputy Chair
Esther L. George, President
and Chief Executive Officer
Kelly J. Dubbert, First Vice
President and Chief Operating Officer
Oklahoma City
Tina Patel, Chair
Chad R. Wilkerson, Vice
President and Branch Executive
Dallas
Greg L. Armstrong, Chair
El Paso
San Antonio
Thomas J. Falk, Deputy Chair
Tracy J. Yellen, Chair
Jesús Garza, Chair
Meredith N. Black, Interim
Roberto A. Coronado, Senior
Roberto A. Coronado, Senior
President
Vice President in Charge
Vice President in Charge
Robert L. Triplett, III, First Vice
President and Chief Operating Officer
Houston
Darryl L. Wilson, Chair
Daron D. Peschel, Senior Vice
President in Charge
144 108th Annual Report | 2021
San Francisco
Rosemary Turner, Chair
Los Angeles
Salt Lake City
Tamara L. Lundgren,
Anita V. Pramoda, Chair
Russell A. Childs, Chair
Qiana Charles, Vice President and
Becky Potts, Vice President and
Regional Executive
Regional Executive
Portland
Seattle
and Chief Operating Officer
Anne C. Kubisch, Chair
West Mathison, Chair
Additional office at Phoenix, AZ
Ian Galloway, Vice President and
Darlene Wilczynski, Vice
Regional Executive
President and Regional Executive
Deputy Chair
Mary C. Daly, President and Chief
Executive Officer
Sarah Devany, First Vice President
Federal Reserve System Organization 145
Leadership Conferences
Conference of Chairs
The chairs of the Federal Reserve Banks are organized into the Conference of Chairs, which meets
to consider matters of common interest and to consult with and advise the Board of Governors.
Such meetings, also attended by the deputy chairs, were held in Washington, D.C., on May 4 and
5, 2021, and November 16 and 17, 2021. The conference’s executive committee members for
2021 are listed below.8
Conference of Chairs Executive Committee—2021
Greg L. Armstrong, Chair,
Elizabeth A. Smith, Vice Chair,
Eugene A. Woods, Member,
Federal Reserve Bank of Dallas
Federal Reserve Bank of Atlanta
Federal Reserve Bank of Richmond
Conference of Presidents
The presidents of the Federal Reserve Banks are organized into the Conference of Presidents,
which meets periodically to identify, define, and deliberate issues of strategic significance to the
Federal Reserve System; to consider matters of common interest; and to consult with and advise
the Board of Governors. The chief executive officer of each Reserve Bank was originally labeled
governor and did not receive the title of president until the passage of the Banking Act of 1935.
Consequently, when the Conference was first established in 1914 it was known as the Conference
of Governors. Conference officers for 2021 are listed below.
Conference of Presidents—2021
James B. Bullard, Chair,
Douglas Scarboro, Secretary,
Tasnim F. Battles, Assistant
Federal Reserve Bank of St. Louis
Federal Reserve Bank of St. Louis
Secretary, Federal Reserve Bank
of New York
John C. Williams, Vice Chair,
Federal Reserve Bank of New York
8
On November 17, 2021, the Conference of Chairs elected Elizabeth A. Smith, chair of the Federal Reserve Bank of
Atlanta, as chair of the conference’s executive committee for 2022. The conference also elected Eugene A. Woods, chair
of the Federal Reserve Bank of Richmond, as vice chair, and Helene D. Gayle, MD, deputy chair of the Federal Reserve
Bank of Chicago, as the executive committee’s third member.
146 108th Annual Report | 2021
Conference of First Vice Presidents
The Conference of First Vice Presidents of the Federal Reserve Banks was organized in 1969 to
meet periodically for the consideration of operations and other matters. Conference officers for
2021 are listed below.9
Conference of First Vice Presidents—2021
James Narron, Chair,
Josh Silverstein, Secretary,
Jamica Quillin, Assistant
Federal Reserve Bank of Philadelphia
Federal Reserve Bank of Philadelphia
Secretary, Federal Reserve Bank of
Minneapolis
Ron Feldman, Vice Chair,
Federal Reserve Bank of Minneapolis
9
On December 8, 2020, the conference elected James Narron, Federal Reserve Bank of Philadelphia, as chair for 2022
and Ron Feldman, Federal Reserve Bank of Minneapolis, as vice chair. The conference also elected Josh Silverstein, Federal Reserve Bank of Philadelphia, as secretary and Jamica Quilin, Federal Reserve Bank of Minneapolis, as assistant
secretary.
147
B
Minutes of Federal Open Market
Committee Meetings
The policy actions of the Federal Open Market Committee, recorded in the minutes of its meetings, are available in the Annual Report of the Board of Governors pursuant to the requirements of
section 10 of the Federal Reserve Act. That section provides that the Board shall keep a complete
record of the actions taken by the Board and by the Federal Open Market Committee on all questions of policy relating to open market operations, that it shall record therein the votes taken in
connection with the determination of open market policies and the reasons underlying each policy
action, and that it shall include in its annual report to Congress a full account of such actions.
Links to the minutes for each of the eight regularly scheduled meetings held in 2021 are in the
list below.
Meeting Minutes
• Meeting held on January 26–27, 2021
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20210127.pdf
• Meeting held on March 16–17, 2021
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20210317.pdf
• Meeting held on April 27–28, 2021
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20210428.pdf
• Meeting held on June 15–16, 2021
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20210616.pdf
• Meeting held on July 27–28, 2021
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20210728.pdf
• Meeting held on September 21–22, 2021
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20210922.pdf
• Meeting held on November 2–3, 2021
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20211103.pdf
• Meeting held on December 14–15, 2021
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20211215.pdf
The minutes of the meetings contain the votes on the policy decisions made at those meetings,
as well as a summary of the information and discussions that led to the decisions. The descrip-
148 108th Annual Report | 2021
tions of economic and financial conditions in the minutes are based solely on the information that
was available to the Committee at the time of the meetings.
Members of the Committee voting for a particular action may differ among themselves as to the
reasons for their votes; in such cases, the range of their views is noted in the minutes. When
members dissent from a decision, they are identified in the minutes and a summary of the reasons for their dissent is provided.
Policy directives of the Federal Open Market Committee are issued to the Federal Reserve Bank of
New York as the Bank selected by the Committee to execute transactions for the System Open
Market Account. In the area of domestic open market operations, the Federal Reserve Bank of
New York operates under instructions from the Federal Open Market Committee that take the form
of an Authorization for Domestic Open Market Operations and a Domestic Policy Directive. (A new
Domestic Policy Directive is adopted at each regularly scheduled meeting.) In the foreign currency
area, the Federal Reserve Bank of New York operates under an Authorization for Foreign Currency
Operations and a Foreign Currency Directive. Changes in the instruments during the year are
reported in the minutes for the individual meetings.1
For more information about the Federal Open Market Committee’s meetings, statements, and minutes, visit the Board’s website at https://www.federalreserve.gov/monetarypolicy/
fomccalendars.htm.
1
As of January 1, 2021, the Federal Reserve Bank of New York was operating under the Domestic Policy Directive
approved at the December 15–16, 2020, Committee meeting. Two other policy instruments (the Authorization for Foreign
Currency Operations and the Foreign Currency Directive) in effect as of January 1, 2021, were approved by notation vote
on March 19, 2020. The Authorization for Domestic Open Market Operations in effect as of January 1, 2021, was
approved by notation vote on March 31, 2020.
149
C
Federal Reserve System Audits
The Board of Governors, the Federal Reserve Banks, and the Federal Reserve System as a whole
are all subject to several levels of audit and review.
The Board’s financial statements and internal controls over financial reporting are audited annually
by an independent public accounting firm retained by the Board’s Office of Inspector General (OIG).
The public accounting firm also tests the Board’s compliance with certain provisions of laws, regulations, and contracts affecting those statements.
The Reserve Banks’ financial statements are audited annually by an independent public
accounting firm retained by the Board of Governors. In addition, the Reserve Banks are subject to
annual examination by the Board. As discussed in section 5, “Payment System and Reserve Bank
Oversight,” the Board’s examination includes a wide range of ongoing oversight activities conducted on site and off site by staff of the Board’s Division of Reserve Bank Operations and Payment Systems.
The audited annual financial statements of the Board of Governors, the Reserve Banks, and the
Federal Reserve System as a whole are available on the Board’s website at https://
www.federalreserve.gov/aboutthefed/audited-annual-financial-statements.htm.
In addition, the OIG conducts audits, evaluations, investigations, and other reviews relating to the
Board’s programs and operations as well as to Board functions delegated to the Reserve Banks.
Certain aspects of Federal Reserve operations are also subject to review by the Government
Accountability Office.
Office of Inspector General Activities
The OIG for the Federal Reserve Board, which is also the OIG for the Consumer Financial Protection Bureau (CFPB), operates in accordance with the Inspector General Act of 1978, as amended.
The OIG plans and conducts audits, inspections, evaluations, investigations, and other reviews
relating to Board and CFPB programs and operations, including functions that the Board has delegated to the Federal Reserve Banks. It also retains an independent public accounting firm to
annually audit the Board’s and the Federal Financial Institutions Examination Council’s financial
statements. These activities promote economy and efficiency; enhance policies and procedures;
and prevent and detect waste, fraud, and abuse. In addition, the OIG keeps the Congress, the
Board of Governors, and the CFPB director fully informed about serious abuses and deficiencies.
150 108th Annual Report | 2021
Most recently, the OIG has focused significant resources on oversight of the Board’s pandemic
response efforts. Specifically, the OIG has identified a management challenge related to the creation of the Board’s emergency lending programs and facilities and updated three previously identified challenges to account for new aspects presented by the pandemic. The OIG also initiated multiple audits and evaluations, with other work planned, in key risk areas and opened investigations
of alleged fraud related to these programs.
During 2021, the OIG issued 17 reports (table C.1). In addition, the OIG issued to the Board and
to the CFPB eight memorandums on information technology issues and two risk-assessment
memorandums. Because of the sensitive nature of some of the material, six of the information
technology memorandums are nonpublic. The OIG also conducted follow-up reviews to evaluate
actions taken on recommendations for corrective action. Regarding the OIG’s investigative work
related to the Board and the CFPB, 68 investigations were opened and 36 investigations were
closed during the year. OIG investigative work resulted in 38 arrests, 7 criminal complaints,
19 criminal informations, 43 indictments, 38 convictions, and 4 prohibitions from the banking
industry, as well as $24,084,492 in criminal fines, restitution, and special assessments. The OIG
Table C.1. OIG reports issued in 2021
Report title
Month issued
The Board Economics Divisions Can Enhance Some of Their Planning Processes for Economic Analysis
February
Forensic Evaluation of the Bureau’s Vendor Payment Process
February
Federal Financial Institutions Examination Council Financial Statements as of and for the Years Ended
December 31, 2020 and 2019, and Independent Auditors’ Reports
February
Board of Governors of the Federal Reserve System Financial Statements as of and for the Years Ended
December 31, 2020 and 2019, and Independent Auditors’ Reports
March
The Board Can Improve the Management of Its Renovation Projects
March
The Bureau Can Strengthen Its Hiring Practices and Can Continue Its Efforts to Cultivate a Diverse Workforce
March
Independent Accountants’ Report on the Bureau’s Fiscal Year 2020 Compliance With the Payment Integrity
Information Act of 2019
April
The Board’s Payroll Controls Are Generally Effective
June
The Bureau Can Improve Its Controls for Issuing and Managing Interagency Agreements
July
Evaluation of the Bureau’s Implementation of Splunk (nonpublic report)
September
The Board’s Implementation of Enterprise Risk Management Continues to Evolve and Can Be Enhanced
September
The Board Can Improve the Efficiency and Effectiveness of Certain Aspects of Its Consumer Compliance
Examination and Enforcement Action Issuance Processes
October
Independent Auditors’ Report on the Bureau’s Fiscal Year 2021 Compliance With the Digital Accountability
and Transparency Act of 2014
October
2021 Audit of the Board’s Information Security Program
October
2021 Audit of the Bureau’s Information Security Program
October
The Bureau Can Improve Aspects of Its Quality Management Program for Supervision Activities
November
The Bureau Can Further Enhance Certain Aspects of Its Approach to Supervising Nondepository Institutions
December
Federal Reserve System Audits 151
also issued two semiannual reports to Congress. The OIG performed 30 reviews of legislation and
regulations related to the operations of the Board, the CFPB, or the OIG.
For more information and to view the OIG’s publications, visit the OIG’s website at https://
oig.federalreserve.gov. Specific details about the OIG’s body of work also may be found in the
OIG’s Work Plan and semiannual reports to Congress.
Government Accountability Office Reviews
The Federal Banking Agency Audit Act (Pub. L. No. 95–320) authorizes the Government Accountability Office (GAO) to audit certain aspects of Federal Reserve System operations. The Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010, as well as the Coronavirus Aid, Relief,
and Economic Security Act of 2020, directs the GAO to conduct additional audits with respect to
these operations. In 2021, the GAO completed 17 projects that involved the Federal Reserve
(table C.2). Thirteen projects were ongoing as of December 31, 2021 (table C.3).
For more information and to view GAO reports, visit the GAO’s website at https://www.gao.gov.
Table C.2. GAO reports issued in 2021
Report title
Report number
Month issued
Macroprudential Oversight: Principles for Evaluating Policies to Assess and Mitigate
Risks to Financial System Stability
GAO-21-230SP
January
COVID-19: Critical Vaccine Distribution, Supply Chain, Program Integrity, and Other
Challenges Require Focused Federal Attention
GAO-21-265
January
COVID-19: Sustained Federal Action Is Crucial as Pandemic Enters Its Second Year
GAO-21-387
March
Retirement Security: Debt Increased for Older Americans over Time, but the
Implications Vary by Debt Type
GAO-21-170
May
Home Mortgage Disclosure Act: Reporting Exemptions Had a Minimal Impact on Data
Availability, but Additional Information Would Enhance Oversight
GAO-21-350
May
Fair Lending: CFPB Needs to Assess the Impact of Recent Changes to Its Fair Lending
Activities
GAO-21-393
June
Financial Services Industry: Factors Affecting Careers for Women with STEM Degrees
GAO-21-490
June
COVID-19: Continued Attention Needed to Enhance Federal Preparedness, Response,
Service Delivery, and Program Integrity
GAO-21-551
July
National Flood Insurance Program: Congress Should Consider Updating the
Mandatory Purchase Requirement
GAO-21-578
July
Federal Debt Management: Treasury Quickly Financed Historic Government Response
to the Pandemic and Is Assessing Risks to Market Functioning
GAO-21-606
August
Federal Reserve Lending Programs: Credit Markets Served by the Programs Have
Stabilized, but Vulnerabilities Remain
GAO-22-104640
October
COVID-19: Additional Actions Needed to Improve Accountability and Program
Effectiveness of Federal Response
GAO-22-105051
October
Financial Audit: Bureau of the Fiscal Service’s FY 2021 and FY 2020 Schedules of
Federal Debt
GAO-22-104592
November
(continued)
152 108th Annual Report | 2021
Table C.2—continued
Report title
Report number
Month issued
Countering Illicit Finance and Trade: Better Information Sharing and Collaboration
Needed to Combat Trade-Based Money Laundering
GAO-22-447
December
Mortgage Lending: Use of Alternative Data Is Limited but Has Potential Benefits
GAO-22-104380
December
Bank Secrecy Act: Views on Proposals to Improve Banking Access for Entities
Transferring Funds to High-Risk Countries
GAO-22-104792
December
Real Estate Appraisals: Most Residential Mortgages Received Appraisals, but Waiver
Procedures Need to Be Better Defined
GAO-22-104472
December
Table C.3. Projects active at year-end 2021
Subject of project
Month initiated
Status
The housing finance system in the pandemic
August 2020
Closed 1/13/2022
Welfare of federal working dogs
September 2020
Open
Access to banking services
October 2020
Closed 3/7/2022
HMDA loan volume thresholds
October 2020
Open
Financial regulator privacy practices
October 2020
Closed 1/13/2022
Native American Direct Loan program
December 2020
Open
Financial regulatory oversight during COVID-19
April 2021
Open
Trafficking, online marketplaces, and virtual currencies
May 2021
Closed 2/14/2022
403(b) retirement savings plans for nonprofits and public
June 2021
Open
Consumer credit card debt
June 2021
Open
Blockchain in financial services
August 2021
Open
Monitoring and oversight of response to COVID-19 pandemic (January 2022 report)
October 2021
Closed 1/27/2022
Monitoring and oversight of response to COVID-19 pandemic (April 2022 report)
October 2021
Open
153
D
Federal Reserve System Budgets
The Federal Reserve Board of Governors and the Federal Reserve Banks prepare annual budgets
as part of their efforts to ensure appropriate stewardship and accountability.1 This section presents information on the 2021 budget performance of the Board and Reserve Banks and on their
2022 budgets, budgeting processes, and trends in expenses and employment. This section also
presents information on the costs of new currency.
System Budgets Overview
Tables D.1 and D.2 summarize the Federal Reserve Board of Governors’ and Federal Reserve
Banks’ 2021 budgeted, 2021 actual, and 2022 budgeted operating expenses and employment.2
2021 Budget Performance
In carrying out its responsibilities in 2021, the Federal Reserve System incurred $5,047.3 million
in net expenses. Total System operating expenses of $6,980.3 million were offset by
$1,245.0 million in revenue from priced services, claims for reimbursement, and other income.
Total 2021 System operating expenses were $197.7 million, or 3.3 percent, less than the amount
budgeted for 2021.
2022 Operating Expense Budget
Budgeted 2022 System operating expenses of $6,246.9 million, net of revenue and reimbursements, are $511.6 million, or 8.9 percent, higher than 2021 actual expenses. The Reserve Bank
budgets comprise almost three-quarters of the System budget (figure D.1). Budgeted 2022 revenue from priced services is 4.6 percent higher than 2021 actual revenue, primarily reflecting
higher volume from automated clearinghouse (ACH) services and funds transfers offset by lower
volume from check and securities transfers.
1
2
Before 2013, information about the budgeted expenses of the Board and Reserve Banks was presented in a separate
report titled Annual Report: Budget Review. Copies of that report are available at https://www.federalreserve.gov/
publications/budget-review/default.htm.
Each budget covers one calendar year.
Substantially all employees of the Board and Reserve Banks participate in the Retirement Plan for Employees of the
Federal Reserve System (System Plan). Reserve Bank employees at certain compensation levels participate in the Benefit Equalization Plan, and certain Reserve Bank officers participate in the Supplemental Retirement Plan for Select Officers of the Reserve Banks. The operating expenses of the Reserve Banks presented in this section do not include
expenses related to the retirement plans; however, the 2021 claims for reimbursement include the allocated portion of
the pension. Additional information about these expenses can be found in Appendix G, “Statistical Tables.”
Board employees also participate in the Benefit Equalization Plan, and Board officers participate in the Pension
Enhancement Plan for Officers of the Board of Governors of the Federal Reserve System (PEP). The operating expenses
of the Board presented in this section include expenses related to Board participants in the Benefit Equalization Plan
and PEP but do not include expenses related to the System Plan.
154 108th Annual Report | 2021
Table D.1. Total operating expenses of the Federal Reserve System, net of receipts and claims for
reimbursement, 2021–22
Millions of dollars, except as noted
2021
budget
Item
Board
1
2021
actual
Variance
2021 actual to
2021 budget
Amount
Percent
2022
budget
Variance
2022 budget to
2021 actual
Amount
Percent
884.4
863.9
–20.5
–2.3
965.9
102.0
11.8
35.1
33.8
–1.3
–3.7
36.0
2.2
6.5
Reserve Banks
5,029.8
5,047.3
17.4
0.3
5,434.6
387.4
7.7
Currency3
1,136.0
1,035.3
–100.8
–8.9
1,118.3
83.0
8.0
7,085.3
6,980.3
–105.0
–1.5
7,554.8
574.5
8.2
439.1
456.3
17.2
3.9
477.2
20.9
4.6
710.4
786.3
75.9
10.7
829.7
43.4
5.5
2.8
2.4
–0.4
–15.1
1.0
–1.4
–59.0
1,152.3
1,245.0
92.7
8.0
1,307.9
62.9
5.1
5,933.0
5,735.3
–197.7
–3.3
6,246.9
511.6
8.9
Office of Inspector General
2
Total System operating expenses
Revenue from priced services
Claims for reimbursement
5
Other income6
Revenue and claims for
reimbursement7
Total System operating expenses,
net of revenue and claims for
reimbursement
4
Note: Here and in subsequent tables, components may not sum to totals and may not yield percentages shown because of rounding.
1
Reflects the 2021 revised operating budget approved on July 16, 2021.
2
Excludes Reserve Bank assessments by the Board of Governors for costs related to currency and the operations of the Board of Governors,
Office of Inspector General, and the Consumer Financial Protection Bureau.
3
The 2021 and 2022 budgets include Bureau of Engraving and Printing (BEP) facility costs. The 2021 budget includes an additional
$40.2 million that was not part of the original budget. Starting in 2022, the currency budget tracks the BEP facility projects separately as
multicycle total project costs. The 2022 budget for the multicycle projects is $58.3 million.
4
Includes total operating expenses of the Federal Reserve Information Technology support function and the System’s Office of Employee Benefits, the majority of which are in the Reserve Banks.
5
Reimbursable claims include the expenses of fiscal agency. In 2021 actual, the fiscal agency allocated portion of the pension is also
included but is not included for the budget. The fiscal agency budgeted pension expense is $68.3 million in 2021 and $81.0 million
in 2022.
6
Fees that depository institutions pay for the settlement component of the Fedwire Securities Service transactions for Treasury securities
transfers.
7
Excludes annual assessments for the supervision of large financial companies pursuant to Regulation TT, which are not recognized as revenue or used to fund Board expenses. (See section 4, “Supervision and Regulation,” for more information.)
Trends in Expenses and Employment
From the actual 2012 amount to the budgeted 2022 amount, the total operating expenses of the
Federal Reserve System have increased an average of 4.9 percent annually (figure D.2), which is
the same as the 10-year growth rate between 2011 and 2021. The total rate of growth in Federal
Reserve System expenses reflects the staffing increases in information technology (IT) to support
large application development projects, information security efforts, end-user services, and the
central computing environment. Supervision resource levels were augmented to meet requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and to
support portfolio growth (figure D.3).
Federal Reserve System Budgets 155
Table D.2. Employment in the Federal Reserve System, 2021–22
Item
Board
Office of Inspector General
Reserve Banks1
Currency
Total System employment
2021
budget
2021
actual
3,013
2,973
Variance
2021 actual to
2021 budget
Amount
Percent
–41
–1.3
Variance
2022 budget to
2021 actual
2022
budget
Amount
Percent
111
3.7
3,083
136
127
–9
–6.7
133
5
4.3
20,470
20,401
–69
–0.3
21,212
811
4.0
19
16
–2
–11.3
19
3
17.3
23,638
23,517
–122
–0.5
24,447
931
4.0
Note: Employment numbers presented include average number of personnel (ANP) for the Board and headcount for the Reserve Banks. ANP is
the average number of employees expressed in terms of full-time positions for the period and includes outside agency help. Headcount is the
number of active employees in an organization. Headcount is the actual number of people employed (actual) or expected to be employed
(projected) at a given date and includes full-time and part-time staff.
1
Includes employment of the Federal Reserve Information Technology (FRIT) support function and the Office of Employee Benefits (OEB).
Growth in supervision expenses over the past 10 years has been driven by implementation of
expanded responsibilities mandated by the Dodd-Frank Act, changes in the state member bank
portfolio, building out the cybersecurity supervision program, and supporting other strategic
national initiatives. However, supervision growth has moderated because of the Economic Growth,
Regulatory Reform and Consumer Protection Act, and as supervisory conditions improved, efficiencies were found and resources were shifted toward higher-risk activities and emerging risks. In particular, resources were temporarily shifted from supervision to support the credit and liquidity facilities responding to the COVID-19 pandemic in 2020. Supervision expenses for 2021 reflect the
Figure D.1. Distribution of budgeted expenses
of the Federal Reserve System, 2022
Figure D.2. Total expenses of the Federal
Reserve System, 2012–22
8
Board of Governors and OIG
13.3%
Current dollars
Billions of dollars
7
Reserve Banks
71.9%
6
2012 dollars1
5
Currency
14.8%
4
3
2
1
0
2012
1
OIG: Office of Inspector General.
2014
2016
2018
2020
2022
Calculated with the GDP price deflator.
Note: For 2022, budgeted. Includes expenses of the
OIG.
156 108th Annual Report | 2021
Figure D.3. Employment in the Federal Reserve
System, 2011–21
end of this temporary support and the return
of supervision staff from their work for the
credit and liquidity facilities.
25
Thousands of persons
Expense growth in the monetary policy area
23
during the financial crisis has been followed
21
more recently by increased investment in
19
financial stability monitoring, operational
activities, and the dedication of additional
17
resources to regional economic research.
15
2012
2014
2016
2018
2020
2022
Note: For 2022, budgeted. From 2012 to 2018,
employment numbers presented include position
counts for the Board and the OIG and average number
of personnel (ANP) for the Reserve Banks. From 2019
to 2020, employment numbers for all entities are represented in ANP. For 2021 to 2022, employment numbers presented include ANP for the Board and OIG,
and headcount for the Reserve Banks.
Growth in fee-based services is primarily for
investments in the payment infrastructure
modernization efforts, including the FedNowSM
Service initiative, and investments associated
with multiyear technology initiatives to modernize processing platforms for Fedwire and
automated clearinghouse (ACH).3
Expenses for services to financial institutions continue to increase as a result of the nextgeneration currency-processing program (NextGen).4 More recently, increased demand for cash
and social distancing protocols related to the COVID-19 pandemic have resulted in higher personnel costs for cash operations and other related expenses for essential on-site staff, such as
hazard pay, rapid COVID-19 testing, and frequent and in-depth cleaning services. Growth in services to financial institutions and the public is also attributable to the addition of resources in support of the credit and liquidity facilities created in response to the COVID-19 pandemic.
Treasury services expenses have increased to meet expanding scope and evolving needs,
including business and technology modernization of payment services, financing and securities
services, and accounting and reporting services, as well as significant investment in infrastructure
and technology services.
3
4
The Federal Reserve is developing a new round-the-clock, real-time payment and settlement service, called the FedNow
Service, to support faster payments in the United States. The initiative to modernize the ACH processing platform was
completed in early 2021.
The System is implementing a strategy to transition the current fleet of high-speed currency processing machines and
the associated sensor suite from the Banknote Processing System platform to the future next-generation (NextGen) processing technologies (machines and sensor technologies).
Federal Reserve System Budgets 157
2022 Capital Budgets
The capital budgets for the Board and Reserve Banks total $139.0 million and $621.5 million,
respectively.5 As in previous years, the 2022 capital budgets include funding for projects that support the strategic direction outlined by the Board, System leadership, and each Reserve Bank.
These strategic goals emphasize investments that continue to improve operational efficiencies,
enhance services to Bank customers, and ensure a safe and productive work environment.
Board of Governors Budgets
Board of Governors
The Board’s budget is based on the principles established by the Strategic Plan 2020–23 and provides funding to advance the plan’s goals and objectives.6 This functional alignment helps ensure
organizational resources are used to advance the Board’s mission and provide a structure to fund
strategic priorities over the four-year time horizon.
The Board’s budget process is as follows:
• At the start of the budget process, the chief operating officer and chief financial officer meet
with the Committee on Board Affairs (CBA) to recommend a specific growth target for the
Board’s operating budget. For 2022, the recommended growth target included known changes in
the run-rate of the Board’s ongoing operations, the full-year impact of the budget amendment
approved in 2021, long-term space plan, increases to centrally managed retirement and postretirement benefits, strategic priorities for 2022, and the triennial Survey of Consumer
Finances. After endorsement by the CBA, Division of Financial Management (DFM) staff communicate the target to the Executive Committee, which comprises the directors of each division.
• To achieve the CBA’s growth target, divisions allocate resources to their highest priorities and
seek tradeoffs and efficiencies.
• DFM staff review initial budget requests submitted by divisions and collaborate with all divisions
and functional areas to achieve the growth target.7
• The chief operating officer and chief financial officer subsequently brief the CBA on the budget
submissions. Once the budget is finalized, the administrative governor submits the budget to
the full Board for review and final approval.
5
6
7
The capital budget reported for the Board includes single-year capital expenditures and 2021 expected capital expenditures from multiyear projects of the Board and the Office of Inspector General. The capital budget reported for the
Reserve Banks includes the amounts budgeted for the Federal Reserve Information Technology support function and the
Office of Employee Benefits.
The Board approved the plan published in December 2019 and located at https://www.federalreserve.gov/publications/
files/2020-2023-gpra-strategic-plan.pdf.
Monetary Policy and Financial Stability, Supervision, Payment System and Reserve Bank Oversight, Public Engagement
and Community Development, and Mission Enablement (Support and Overhead).
158 108th Annual Report | 2021
• DFM staff monitor expenses throughout the year. Quarterly financial forecasts provide
insight into budgetary pressures. Staff analyze variances and report the variances to senior
management.
Tables D.3, D.4, and D.5 summarize the Board’s 2021 budgeted and actual expenses and its
2022 budgeted expenses by operating area; division, office, or special account; and account classification, respectively. Table D.6 summarizes the Board’s 2021 budgeted and actual authorized
positions and its budgeted positions for 2022. Each table includes a line item for the Office of
Inspector General (OIG), which is discussed later in this section.
Table D.3. Operating expenses of the Board of Governors, by operating area, 2021–22
Millions of dollars, except as noted
2021
budget
Item
1
2021
actual
Variance
2021 actual to
2021 budget
Amount
Percent
2022
budget
Variance
2022 budget to
2021 actual
Amount
Percent
Monetary policy and financial stability
370.5
365.2
–5.3
–1.4
415.5
50.3
13.8
Supervision
390.5
378.8
–11.7
–3.0
420.9
42.1
11.1
Payment system and Reserve Bank
oversight
75.0
72.2
–2.8
–3.7
75.9
3.7
5.1
Public engagement and community
development
48.5
47.7
–0.8
–1.6
53.7
6.0
12.5
884.4
863.9
–20.5
–2.3
965.9
102.0
11.8
35.1
33.8
–1.3
–3.7
36.0
2.2
6.5
Total, Board operations
Office of Inspector General
Note: This table presents financial performance for the Board’s operating areas, which align with the Reserve Banks. Monetary policy and
financial stability aligns with monetary and economic policy within the Reserve Banks; growth in 2022 is driven by strategic priorities and
employment growth. Supervision aligns with supervision and regulation within the Reserve Banks; growth in 2022 is driven by strategic priorities and employment growth. Payment system and Reserve Bank oversight is an operating area unique to the Board. Public engagement and
community development aligns with services to financial institutions and the public within the Reserve Banks. Office of Inspector General
growth in 2022 is driven by employment growth and higher Board support and overhead allocations.
1
Includes the Survey of Consumer Finances.
2021 Budget Performance
Total expenses for Board operations were $863.9 million, which was $20.5 million, or 2.3 percent,
lower than the approved 2021 budget of $884.4 million.8
Personnel services expenses were $4.2 million, or 0.6 percent, higher than the approved budget,
driven by higher pension expenses that fluctuate with changes in actuarial assumptions and demographics, and higher accrued annual leave expenses as staff used less leave as a result of the
COVID-19 pandemic. Goods and services expenses were $24.7 million, or 11.4 percent, lower
than the approved budget as the COVID-19 pandemic resulted in less-than-planned travel and
8
In July 2021, the Board of Governors approved an amendment to the 2021 operating budget to address critical workload and projects. This amendment increased the operating budget from $869.5 million to $884.4 million.
Federal Reserve System Budgets 159
Table D.4. Operating expenses of the Board of Governors, by division, office, or special account,
2021–22
Millions of dollars, except as noted
Division, office, or special account
2021
budget
2021
actual
Variance
2021 actual to
2021 budget
Amount
2022
budget
Percent
Variance
2022 budget to
2021 actual
Amount
Percent
Research and Statistics
93.5
94.1
0.6
0.7
100.3
6.2
6.6
International Finance
37.3
36.6
–0.7
–1.9
40.2
3.6
10.0
Monetary Affairs
42.6
41.5
–1.1
–2.6
45.8
4.4
10.5
Financial Stability
17.0
15.6
–1.4
–8.2
20.3
4.8
30.6
Supervision and Regulation
123.5
118.6
–4.8
–3.9
128.7
10.1
8.5
Consumer and Community Affairs
35.9
35.0
–0.9
–2.6
38.8
3.8
10.9
Reserve Bank Operations and
Payment Systems
46.9
45.6
–1.3
–2.8
49.0
3.4
7.5
Board Members
26.2
26.0
–0.3
–1.0
27.4
1.4
5.5
9.8
9.7
0.0
–0.5
10.4
0.7
6.8
Legal
34.5
33.1
–1.4
–4.1
36.3
3.2
9.7
Chief Operating Officer
15.1
13.5
–1.6
–10.7
15.7
2.2
16.2
Secretary
Financial Management
14.6
14.4
–0.2
–1.3
15.2
0.8
5.7
Information Technology
140.0
136.2
–3.9
–2.8
148.5
12.3
9.0
Management
167.6
168.1
0.5
0.3
185.8
17.7
10.5
Centrally managed benefits1
47.0
58.9
11.8
25.1
55.0
–3.8
–6.5
Extraordinary items2
51.1
33.3
–17.8
–34.8
54.1
20.8
62.3
–20.3
–17.6
2.7
–13.2
–20.3
–2.7
15.5
2.1
1.4
–0.7
–34.8
14.7
13.3
961.1
884.4
863.9
–20.5
–2.3
965.9
102.0
11.8
35.1
33.8
–1.3
–3.7
36.0
2.2
6.5
Savings and reallocations3
Survey of Consumer Finances4
Total, Board operations
Office of Inspector General
1
2
3
4
For 2022, Special Projects and Retirement and Benefits have been merged. Centrally Managed Benefits includes centralized Boardwide
benefit programs, such as accrued annual leave, academic assistance, and relocation, and retirement and post-retirement benefits, which
fluctuate because of changes in actuarial assumptions and demographics.
Includes several strategic projects, including the Martin renovation, replacement of the Board’s human capital, financial management and
procurement systems, and a centralized position pool.
Includes negative adjustments to reflect measured budget risks for large, complex projects and historical under execution. In addition,
includes Board support and overhead allocations to the Office of Inspector General and Currency.
The survey collects information about family incomes, net worth, balance sheet components, credit use, and other financial outcomes, and
is conducted every three years.
training activities, lower utilization of contractual professional services, and lower depreciation
expenses because of the shift in the substantial completion of the Martin Building renovation project.
The Board’s 2021 single-year capital spending was less than budgeted by $4.4 million, or
23.7 percent, driven by lower spending on equipment purchases and life-cycle replacements and
160 108th Annual Report | 2021
Table D.5. Operating expenses of the Board of Governors, by account classification, 2021–22
Millions of dollars, except as noted
Variance
2021 actual to
2021 budget
Amount
Percent
2021
actual
Personnel services
Salaries
Outside agency help1
Retirement/thrift plans
Employee insurance and other benefits
Net periodic benefits costs2
Subtotal, personnel services
503.9
33.9
70.3
43.9
16.5
668.6
501.8
32.6
75.4
42.1
20.9
672.8
–2.2
–1.3
5.0
–1.8
4.5
4.2
–0.4
–3.8
7.1
–4.2
27.0
0.6
535.7
38.3
78.0
45.6
18.5
716.2
33.9
5.7
2.7
3.5
–2.4
43.4
6.8
17.4
3.5
8.4
–11.5
6.5
Goods and services
Postage and shipping
Travel
Telecommunications
Printing and binding
Publications
Stationery and supplies
Software
Furniture and equipment (F&E)
Rentals
Data, news, and research
Utilities
Repairs and alterations—building
Repairs and maintenance—F&E
Contractual professional services
Interest
Training and dues
Subsidies and contributions
All other
Depreciation/amortization
Support and overhead allocations3
IT income4
Income
Subtotal, goods and services
Total, Board operations
0.6
9.4
8.3
0.7
0.3
1.0
29.8
6.9
38.0
18.5
1.7
4.7
5.0
43.5
0.0
4.9
3.2
4.0
56.2
–16.9
–0.3
–3.9
215.8
884.4
0.6
3.6
6.4
0.5
0.4
1.0
27.7
6.6
37.8
18.3
2.3
4.0
4.4
37.2
0.0
2.9
3.1
5.1
50.3
–17.6
0.0
–3.5
191.1
863.9
0.0
–5.9
–1.9
–0.2
0.0
–0.1
–2.1
–0.3
–0.1
–0.3
0.6
–0.6
–0.6
–6.3
0.0
–2.0
–0.1
1.1
–5.9
–0.7
0.3
0.4
–24.7
–20.5
–7.1
–62.0
–22.7
–28.8
11.3
–7.1
–7.2
–4.9
–0.4
–1.4
37.3
–13.3
–12.4
–14.5
–62.8
–41.6
–3.3
28.1
–10.5
3.9
–100.0
–10.7
–11.4
–2.3
0.3
9.2
7.1
0.7
0.3
1.1
35.6
10.0
37.5
35.7
1.9
4.9
5.5
49.2
0.0
6.0
3.2
5.1
59.9
–19.1
0.0
–4.4
249.7
965.9
–0.3
5.6
0.6
0.1
0.0
0.1
8.0
3.4
–0.3
17.4
–0.4
0.9
1.0
12.0
0.0
3.1
0.2
–0.1
9.6
–1.5
0.0
–1.0
58.6
102.0
–51.0
157.0
10.1
24.7
–10.1
14.1
28.8
51.9
–0.8
95.2
–15.7
21.3
23.7
32.2
38.7
109.5
5.1
–1.0
19.1
8.4
0.0
28.3
30.7
11.8
Office of Inspector General
Personnel services
Goods and services5
Subtotal, excluding operating income
Operating income6
Total, OIG operations
31.2
18.9
50.1
–15.0
35.1
29.1
18.4
47.5
–13.7
33.8
–2.1
–0.5
–2.6
1.4
–1.3
–6.7
–2.9
–5.3
–9.0
–3.7
31.2
20.1
51.4
–15.4
36.0
2.1
1.8
3.9
–1.7
2.2
7.4
9.7
8.3
12.7
6.5
Account classification
1
2
3
4
5
6
2022
budget
Variance
2022 budget to
2021 actual
Amount
Percent
2021
budget
For 2022, contractor expenses that met the ANP definition were moved from goods and services (contractual professional services) to personnel services (outside agency help) to provide a more complete view of personnel expenses. This change is in alignment with the Reserve
Banks. For comparability, changes are also reflected for 2021 budget and actual.
Net periodic benefits costs other than services costs related to pension and post-retirement benefits.
Includes a net zero transfer of costs from the Board operating budget to the OIG and Currency operating budgets for Board support and
overhead expenses attributable to the OIG and Currency.
Includes other earned income collected from the Currency budget.
Includes Board support and overhead allocations to the OIG.
The OIG operating budget incorporates earned income from the Consumer Financial Protection Bureau.
Federal Reserve System Budgets 161
Table D.6. Positions authorized by the Board of Governors, by division, office, or special account,
2021–22
Division, office, or special account
2021
budget
2021
actual
Variance
2021 actual to
2021 budget
Amount
2022
budget
Percent
Variance
2022 budget to
2021 actual
Amount
Percent
Research and Statistics
364
364
0
0.0
364
0
0.0
International Finance
166
168
2
1.2
168
0
0.0
Monetary Affairs
186
186
0
0.0
186
0
0.0
Financial Stability
80
80
0
0.0
80
0
0.0
Supervision and Regulation
497
497
0
0.0
497
0
0.0
Consumer and Community Affairs
138
138
0
0.0
138
0
0.0
Reserve Bank Operations and
Payment Systems
187
187
0
0.0
187
0
0.0
Board Members
121
123
2
1.7
123
0
0.0
54
55
1
1.9
55
0
0.0
132
132
0
0.0
132
0
0.0
65
65
0
0.0
65
0
0.0
Secretary
Legal
Chief Operating Officer
Financial Management
72
72
0
0.0
72
0
0.0
Information Technology
418
418
0
0.0
418
0
0.0
Management
485
485
0
0.0
485
0
0.0
14
9
–5
–35.7
9
0
0.0
2,979
2,979
0
0.0
2,979
0
0.0
140
140
0
0.0
142
2
1.4
Extraordinary items1
Total, Board operations
Office of Inspector General
Note: Budget represents authorized position count at the beginning of the year, and actual represents authorized position count at year-end.
1
Centralized position pool used for strategic areas of growth.
supply chain delays that shifted purchases into 2022. Multiyear capital projects spending in 2021
was less than budgeted by $17.2 million, or 10.6 percent, due to delays in building improvement
projects. Table D.7 summarizes the Board’s budgeted and actual capital expenditures for 2021
and 2022.
2022 Operating Expense Budget
The 2022 budget for Board operations is $965.9 million, which is $102.0 million, or 11.8 percent,
higher than 2021 actual expenses. Staff formulated the operating budget to advance the Board’s
strategic priorities, and it includes initiatives that support policy deliberations; promote safety,
soundness, and stability of financial institutions; foster a safe, efficient, and accessible payment
and settlement system; promote broader, ongoing engagement with the public; and optimize
operations.
In addition, the 2022 budget includes growth driven by strategic priorities, employment growth
expected to occur in 2022; funding for the Board’s compensation and benefit programs; ongoing
162 108th Annual Report | 2021
Table D.7. Capital expenditures of the Board of Governors, by capital type, 2021–22
Item
2021
budget
Variance
2021 actual to
2021 budget
2021
actual
Amount
Percent
2022
budget
Variance
2022 budget to
2021 actual
Amount
Percent
Board
Single-year capital expenditures
18.4
14.1
–4.4
–23.7
20.0
6.0
42.5
Multiyear capital expenditures
162.3
145.2
–17.2
–10.6
118.9
–26.2
–18.1
Total capital expenditures
180.7
159.2
–21.5
–11.9
139.0
–20.3
–12.7
Single-year capital expenditures
0.1
0.0
–0.1
–103.4
0.0
0.0
–100.0
Multiyear capital expenditures
0.0
0.0
0.0
n/a
0.0
0.0
n/a
Total capital expenditures
0.1
0.0
–0.1
–103.4
0.0
0.0
–100.0
Board and OIG total capital
expenditures
180.8
159.2
–21.6
–11.9
139.0
–20.3
–12.7
Office of Inspector General
Note: The amount reported for the multiyear capital budget represents the expected expenditure for the budget year.
n/a Not applicable.
facilities and automation projects; and a step-up approach to travel and training expenses, which
were significantly impacted by the COVID-19 pandemic in 2021.
Authorized positions for 2022 are 2,979, consistent with the 2021 authorized number.9
2022 Capital Budgets
The Board’s 2022 single-year capital budget totals $20.0 million, which is $6.0 million, or
42.5 percent, higher than 2021 actual capital expenditures. The increase is driven by supply chain
delays that shifted data center infrastructure purchases from 2021 to 2022. The proposed budget
also includes continued investments in automation projects and routine life-cycle replacements of
equipment and building components.
The Board’s multiyear capital budget is driven by facilities projects. Expected capital expenditures
in 2022 total $118.9 million and reflect the Board’s commitment to provide a secure, modern
environment that meets the needs of the workforce and leverages opportunities to increase collaboration, efficiency, productivity, and sustainability. Table D.7 summarizes the Board’s budgeted
and actual capital expenditures for 2021 and 2022.
9
In July 2021, the Board of Governors approved an amendment to the 2021 operating budget to address critical workload and projects. This amendment increased the authorized position count from 2,883 to 2,979.
Federal Reserve System Budgets 163
Office of Inspector General
The budget for the Board’s OIG is grounded in the goals established in its strategic plan.10 The
goals are to deliver results that promote agency excellence; promote a diverse, skilled, and
engaged workforce and foster an inclusive, collaborative environment; optimize external stakeholder engagement; and advance organizational effectiveness and model a culture of continuous
improvement.
In keeping with its statutory independence, the OIG prepares its proposed budget apart from the
Board’s budget. The OIG presents its budget directly to the Board for approval.
2021 Budget Performance
Expenses for OIG operations, excluding operating income, were $47.5 million, which was $2.6 million, or 5.3 percent, lower than the approved 2021 budget of $50.1 million. Personnel services
expenses were lower than the approved budget amount by $2.1 million, or 6.7 percent, driven by
higher-than-expected vacancy rates.
Goods and services expenses were $0.5 million, or 2.9 percent, lower than the approved budget
amount, driven by the effect of the COVID-19 pandemic on travel, training, software, and contractual professional services spending. Operating income was $1.4 million, or 9.0 percent, lower
than the approved budget amount; the office conducted less work related to the Consumer Financial Protection Bureau than planned because of the ongoing, increased oversight and investigative
responsibilities related to the Board’s programs created in response to the COVID-19 pandemic.
Including operating income, total expenses for OIG operations were $33.8 million in 2021. The
OIG’s single-year capital spending was de minimis in 2021.
2022 Operating Expense Budget
The 2022 budget for OIG operations, excluding operating income, is $51.4 million, which is
$3.9 million, or 8.3 percent, higher than 2021 actual expenses. This increase is driven by
expected employment growth in 2022, funding for the Board’s compensation and benefit programs, and escalations for goods and services. Employment growth is expected to cause accompanying increases in support and overhead expenses. Including operating income, the 2022
budget for OIG operations is $36.0 million. There were no budgeted amounts for the OIG’s singleyear and multiyear capital expenditures for 2022.
The OIG has 142 authorized positions for 2022, an increase of 2 over the authorized number for
2021. The increase in authorized positions is driven by anticipated oversight work associated with
10
The plan is located at https://oig.federalreserve.gov/strategic-plan.htm.
164 108th Annual Report | 2021
the Board’s COVID-19 pandemic response and the continually increasing importance of and risk
associated with cybersecurity and IT operations.
Federal Reserve Banks Budgets
Each Reserve Bank establishes operating goals for the coming year that are aligned with the
System’s key strategic objectives, devises strategies for attaining those goals, estimates required
resources, and monitors results. The Reserve Banks structure their budgets around specific functional areas reflecting the core responsibilities of the Federal Reserve:
• contributing to the formulation of monetary policy and enhancing monetary policy implementation to become more effective, flexible, and resilient, through public communication, outreach,
and economic education
• promoting financial stability through effective monitoring, analysis, and policy development
• promoting safety and soundness of financial institutions through effective supervision
• leading efforts to enhance the security, resiliency, functionality, and efficiency of services provided to financial institutions and the public
The Reserve Bank budget process is as follows:
• The Conference of Presidents, operating through its Committee on Spending Stewardship,
defines, in close consultation with the Board’s Committee on Federal Reserve Bank Affairs
(BAC), key strategic objectives for the System. Considering longer-term environmental trends
and historical growth rates of expense, these governance bodies articulate an aggregate
System-level growth expectation for a multiyear period.
• The Reserve Banks develop budgets that reflect this direction, through framing and making
appropriate trade-offs, and senior leadership in the Reserve Banks reviews the budgets for
alignment with Reserve Bank and System priorities.
• The Reserve Banks submit for Board review preliminary budget information, including documentation to support the budget request.
• Board staff analyzes the Banks’ budgets, both individually and in the context of System initiatives and in the context of areas such as payments and IT, where there is a high degree of cooperation among the Banks to support Systemwide operations and initiatives.
• Expenses associated with services provided to the Treasury require authorization from the
Bureau of the Fiscal Service.
• The BAC reviews the Banks’ budgets.
• The Reserve Banks make any needed changes, and the BAC chair submits the revised budgets
to Board members for review and final action.
Federal Reserve System Budgets 165
• Throughout the year, Reserve Bank and Board staffs monitor actual performance and compare it
with approved budgets and forecasts.
In addition to the budget approval process, the Reserve Banks must submit proposals for certain
capital expenditures to the Board for further review and approval.
Tables D.8, D.9, and D.10 summarize the Reserve Banks’ 2021 budgeted and actual expenses
and 2022 budgeted expenses by Reserve Bank, functional area, and account classification.11 Table D.11 shows the Reserve Banks’ budgeted and actual employment for 2021 and budgeted employment for 2022. In addition, table D.12 shows the Reserve Banks’ budgeted and
actual capital expenditures for 2021 and budgeted capital for 2022.
Table D.8. Operating expenses of the Federal Reserve Banks, by District, 2021–22
Millions of dollars, except as noted
District
2021
budget
2021
actual
Variance
2021 actual to
2021 budget
Amount
Boston
2022
budget
Percent
Variance
2022 budget to
2021 actual
Amount
Percent
312.2
330.7
18.5
5.9
389.2
58.5
17.7
1122.7
1142.3
19.6
1.7
1245.2
102.8
9.0
Philadelphia
210.7
217.6
6.8
3.2
231.9
14.4
6.6
Cleveland
236.4
257.3
20.9
8.9
317.8
60.5
23.5
Richmond
546.2
452.4
−93.7
−17.2
369.3
−83.1
−18.4
Atlanta
425.1
428.8
3.6
0.9
466.9
38.2
8.9
Chicago
453.5
455.8
2.3
0.5
489.2
33.4
7.3
St. Louis
446.8
437.2
−9.6
−2.1
487.4
50.1
11.5
Minneapolis
193.2
201.6
8.4
4.4
223.4
21.7
10.8
Kansas City
381.9
384.5
2.6
0.7
422.8
38.2
9.9
Dallas
258.2
267.4
9.2
3.6
290.8
23.4
8.8
San Francisco
443.0
471.6
28.6
6.5
500.8
29.1
6.2
5029.8
5047.3
17.4
0.3
5434.6
387.4
7.7
New York
Total Reserve Bank operating expenses
Note: Includes expenses of the FRIT support function and the OEB and reflects all redistributions for support and allocation for overhead.
Excludes Reserve Bank capital expenditures as well as assessments by the Board of Governors for costs related to currency and the operations
of the Board of Governors and the Consumer Financial Protection Bureau.
11
In 2021, the Federal Reserve implemented a new cost accounting framework in parallel with a new Enterprise Resource
Planning application as part of a broader modernization effort. Additional information about the operating expenses of
each of the Reserve Banks can be found in Appendix G, “Statistical Tables” (see “Table G.9. Income and expenses of
the Federal Reserve Banks, by Bank”).
166 108th Annual Report | 2021
Table D.9. Operating expenses of the Federal Reserve Banks, by operating area, 2021–22
Millions of dollars, except as noted
Variance
2021 actual to
2021 budget
2021
actual
Amount
Percent
Monetary and economic policy
845.4
851.7
6.3
0.7
902.7
51.0
6.0
Services to the U.S. Treasury and other
government agencies
657.8
626.5
−31.3
−4.8
728.4
101.9
16.3
Services to financial institutions and the
public1
1,384.6
1,404.2
19.6
1.4
1,457.3
53.1
3.8
Supervision and regulation
1,551.2
1,574.7
23.6
1.5
1,670.7
96.0
6.1
590.9
590.2
−0.7
−0.1
675.6
85.4
14.5
5029.8
5047.3
17.4
0.3
5434.6
387.4
7.7
Operating area
Amount
Fee-based services to financial
institutions2
Total Reserve Bank operating expenses3
1
2
3
2022
budget
Variance
2022 budget to
2021 actual
2021
budget
Percent
Services to financial institutions and the public includes cash services.
Includes operating expenses related to development of the FedNow Service.
Operating expenses exclude pension costs, reimbursements, and operating expense of the Board of Governors (see table D.4).
Table D.10. Operating expenses of the Federal Reserve Banks, by account classification, 2021–22
Millions of dollars, except as noted
Account
classification
2021
budget
2021
actual
Variance
2021 actual to
2021 budget
Amount
1
Salaries and other benefits
2022
budget
Percent
Variance
2022 budget to
2021 actual
Amount
Percent
3,800.4
3,776.4
−24.0
−0.6
3,920.1
143.6
3.8
Building
346.9
302.8
−44.1
−12.7
186.4
−116.4
−38.5
Software costs
342.0
357.1
15.1
4.4
416.8
59.7
16.7
Equipment
234.8
231.7
−3.1
−1.3
251.5
19.8
8.6
−381.9
−304.6
77.4
−20.3
−124.7
179.8
−59.0
−137.5
−111.8
25.6
−18.6
−137.8
−26.0
23.3
825.1
791.5
−33.5
−4.1
922.5
130.9
16.5
5029.8
5047.3
17.5
0.3
5434.6
387.4
7.7
Recoveries
2
Expenses capitalized
3
All other
Total Reserve Bank operating expenses
1
2
3
Includes salaries, other personnel expense, and retirement and other employment benefit expenses. It does not include pension expenses
related to all the participants in the Retirement Plan for Employees of the Federal Reserve System and the Reserve Bank participants in the
Benefit Equalization Plan and the Supplemental Retirement Plan for Select Officers of the Federal Reserve Banks. These expenses are
recorded as a separate line item in the financial statements; see “Table G.9. Income and expenses of the Federal Reserve Banks, by Bank”
in Appendix G, “Statistical Tables.”
Includes tenant rent and cash access fee recoveries for 2021 budget and Q1–Q2 of 2021 actuals. Tenant rent is included in building for
Q3–Q4 actuals and 2022 going forward. Cash access fees are not included in Q3–Q4 of 2021 actuals and 2022 going forward.
Includes fees, materials and supplies, travel, communications, and shipping.
Federal Reserve System Budgets 167
Table D.11. Employment at the Federal Reserve Banks, by District, and at FRIT and OEB, 2021–22
Variance
2021 actual to
2021 budget
2021
actual
Amount
Percent
Boston
1,184
1,234
50
4.2
1,323
89
7.2
New York
3,189
3,015
−174
−5.5
3,146
131
4.3
932
902
−30
−3.2
916
14
1.6
Cleveland
1,042
1,172
130
12.5
1,254
82
7.0
Richmond
1,502
1,517
15
1.0
1,545
28
1.8
Atlanta
1,663
1,697
34
2.0
1,726
29
1.7
Chicago
1,708
1,636
−72
−4.2
1,709
73
4.5
St. Louis
1,432
1,442
10
0.7
1,394
−48
−3.3
Minneapolis
1,113
1,085
−28
−2.5
1,145
60
5.5
Kansas City
2,075
2,075
0
0.0
2,146
71
3.4
Dallas
1,331
1,277
−54
−4.1
1,363
86
6.7
District
Amount
Philadelphia
San Francisco
Total, all Districts
Percent
1,790
1,823
33
1.8
1,880
57
3.1
18,961
18,875
−86
−0.5
19,547
672
3.6
1,443
1,462
19
1.3
1,600
138
9.4
66
64
−2
−3.0
65
1
1.6
20,470
20,401
−69
−0.3
21,212
811
4.0
Federal Reserve Information Technology
Office of Employee Benefits
Total, System
2022
budget
Variance
2022 budget to
2021 actual
2021
budget
2021 Budget Performance
Total 2021 operating expenses for the Reserve Banks were $5,047.3 million, which is $17.4 million, or 0.3 percent, more than the approved 2021 budget of $5029.8 million. The expense
overrun is largely driven by additional investments to support the Federal Reserve’s commitment
to modernize the nation’s payment system and establish a safe and efficient foundation for the
future via the FedNow Service initiative. These overruns are partially offset by less than budgeted
expenses in travel and meetings because of the COVID-19 pandemic, and higher than anticipated
turnover. Actual headcount was 20,401, an underrun of 69 headcount, or 0.3 percent, from 2021
budgeted staffing levels.
The Reserve Banks’ 2021 capital expenditures were less than budgeted by $201.1 million, or
33.6 percent, primarily driven by plan changes because of the COVID-19 pandemic, including
timing and scope for building-related initiatives, and project delays because of supply
chain issues.
168 108th Annual Report | 2021
Table D.12. Capital expenditures of the Federal Reserve Banks, by District, and of FRIT and OEB,
2021–22
Millions of dollars, except as noted
District
2021
budget
2021
actual
Variance
2021 actual to
2021 budget
Amount
Percent
2022
budget
Variance
2022 budget to
2021 actual
Amount
Percent
Boston
85.3
30.6
–54.6
–64.1
56.2
25.5
83.2
New York
78.8
53.8
–25.0
–31.7
70.1
16.2
30.2
Philadelphia
54.8
38.7
–16.1
–29.4
24.2
–14.5
–37.4
Cleveland
28.0
23.7
–4.3
–15.4
41.4
17.7
74.7
Richmond
17.7
8.9
–8.9
–50.1
18.6
9.7
109.7
Atlanta
34.2
13.3
–20.9
–61.1
57.2
43.8
329.3
Chicago
32.6
25.4
–7.1
–21.9
54.2
28.8
113.3
St. Louis
19.4
9.2
–10.5
–54.2
22.3
13.4
151.5
Minneapolis
25.6
27.5
1.9
7.4
20.3
–7.2
–26.0
Kansas City
35.9
29.5
–6.4
–17.9
51.0
21.6
73.1
Dallas
26.8
21.3
–5.5
–20.4
31.6
10.3
48.1
San Francisco
82.8
52.9
–29.9
–36.1
91.8
39.0
73.7
521.9
334.5
–187.4
–35.9
539.0
204.4
61.1
76.8
63.1
–13.7
–17.8
82.4
19.3
30.6
0.2
0.2
0.0
–19.1
0.2
0.0
–7.3
598.9
397.8
–201.1
–33.6
621.5
223.8
56.3
Total, all Districts
Federal Reserve Information Technology
Office of Employee Benefits
Total
2022 Operating Expense Budget
The 2022 operating budgets of the Reserve Banks total $5,434.6 million, which is $387.4 million, or 7.7 percent, higher than 2021 actual expenses.12 Growth in monetary policy reflects
increased resources dedicated to regional economic research. The increase in Treasury Services
is primarily attributable to expanded efforts to modernize business processes and applications for
12
On December 13, 2021, the Board conditionally approved the 2022 Reserve Bank operating budgets totaling $5,432.1
million. Conditional approval was necessary because the System was still in the process of implementing the new Enterprise Resource Planning tool and new cost accounting framework. The refinement of costing and budgetary estimates
arising from full implementation of the planning system resulted in a final total of $5,434.6 million, $2.6 million more
than reported in December but well under the material revision threshold of 1 percent that would require additional
Board action. Consequently, the director of the Division of Reserve Bank Operations and Payment Systems approved the
revised 2022 Reserve Bank operating budgets.
Prior to the conditional approval of the 2022 operating expenses, the U.S. Department of the Treasury’s Bureau of the
Fiscal Service (Fiscal Service) had not yet finalized the approved level of funding for fiscal services provided by the
Reserve Banks included in the Reserve Bank budgets. Subsequently, in March 2022, Fiscal Service provided their final
authorization for the 2022 budget. The actual level of Reserve Bank spending for fiscal services is dependent on the
Treasury’s approval of funding and may vary from the budgeted amounts reflected in this report. Additional information is
available at https://www.federalreserve.gov/foia/budgets.htm.
In addition, in consultation with the chair of the Committee on Federal Reserve Bank Affairs, the director of the Division
of Reserve Bank Operations and Payment Systems designated $88.6 million of the 2022 operating expense budget
associated with selected investments in the Treasury for conditional approval.
Federal Reserve System Budgets 169
federal payments and electronic tax collection. Additionally, increases in cash expenses are driven
by the second phase of NextGen. Supervision expenses are increasing primarily because of growth
in the supervisory portfolio. Increases in fee-based services reflect investments in the
FedNow Service.
Total 2022 budgeted employment for the Reserve Banks, Federal Reserve Information Technology
(FRIT), and the Office of Employee Benefits (OEB) is 21,212 headcount, an increase of 811 headcount, or 4.0 percent, from 2021 actual employment levels. A key driver of this increase is IT
resources, largely to support Reserve Bank and Treasury-related cloud architecture initiatives and
configurations. Other primary sources of growth are to support the FedNow Service; efforts to
enable national support functions in procurement, finance, and human resource management; initiatives to support change management and enterprise strategy; and to enhance product offerings
and ensure the security and resiliency of the FedLine Solutions.13
Reserve Bank officer and staff personnel expenses for 2022 total $4,020.5 million, an increase
of $244.1 million, or 6.5 percent, from 2021 actual expenses. The increase reflects expenses
associated with additional staff and budgeted salary administration adjustments.14
The 2022 Reserve Bank budgets include a salary administration program for eligible officers,
senior professionals, and staff totaling $116.8 million and a variable pay program totaling
$255.3 million.
2022 Capital Budgets
The 2022 capital budgets for the Reserve Banks, FRIT, and OEB total $621.5 million.15 The
increase in the 2022 capital budget is $223.8 million, or 56.3 percent, greater than the 2021
actual levels of $397.8 million, largely reflecting ongoing multiyear IT and building strategic initiatives, some of which were paused in 2021 because of the COVID-19 pandemic. Initiatives in the
2022 capital budget support major workspace renovations, address aging building infrastructure
in several Reserve Banks, improve IT infrastructure, and provide application upgrades and
releases.
Capital Expenditures Designated for Conditional Approval
The BAC chair designated projects with an aggregate cost of $81.2 million in 2022 for conditional
approval, requiring additional review and approval by the director of the Board’s Division of Reserve
13
14
15
Enhancements to the FedLine Solutions include a multiyear transformational effort focused on evolving the FedLine network, authentication, and hosting infrastructure to meet customer, industry, and Federal Reserve System needs.
The salary administration program includes a budgeted pool for merit increases, equity adjustments, and promotions.
The Board delegated the approval of the resources for services provided to the Treasury to the director of the Division of
Reserve Bank Operations and Payment Systems pending final authorization from the Bureau of the Fiscal Service. The
2022 capital budget, including those capital expenditures designated for conditional approval, reflect the final authorization from Fiscal Service.
170 108th Annual Report | 2021
Bank Operations and Payment Systems before the funds are committed.16 The expenditures designated for conditional approval include a large-scale building project, NextGen, and a cash infrastructure remodel. Technology projects include investments for FedNow; an initiative to streamline
finance, procurement, and controller processes in the Federal Reserve Bank of New York; and an
initiative to modernize the Markets Group operations platform.
Other Capital Expenditures
Significant capital expenditures (typically expenditures exceeding $1 million) that are not designated for conditional approval include total multiyear budgeted expenditures of $1,167.8 million
for 2022 and future years, of which the single-year 2022 budgeted expenditures are $443.8 million. This category includes mechanical and electrical infrastructure upgrades and office space
renovations. IT projects include ongoing IT infrastructure investments, initiatives that enable better
access to data and enhance cybersecurity and cyber resiliency, and applications to support feebased services, Treasury, supervision, and cash.
Capital initiatives that are individually less than $1 million are budgeted at an aggregate amount
of $96.5 million for 2022 and include building maintenance expenditures, scheduled software and
equipment upgrades, and equipment and furniture replacements.
Currency Budget
The currency budget provides funds to reimburse the Treasury’s Bureau of Engraving and Printing
(BEP) for expenses related to the production of banknotes, and the Board’s activities related to its
role as issuing authority of the nation’s currency in the form of Federal Reserve notes.17 As
issuing authority, the Board works closely with its strategic partners, such as the Reserve Banks,
the Department of the Treasury, the BEP, and the U.S. Secret Service to help maintain the integrity
of and public confidence in our nation’s currency.
The Board works to ensure that the notes meet quality standards from production through destruction, monitors counterfeiting risks and threats for each denomination, contributes to the development of banknote security features and new design concepts, and conducts adversarial analysis
to ensure the banknote security features and designs are robust against counterfeiting. The
budget includes activities that support its issuing authority role, reimbursements to the BEP for
16
17
Generally, capital expenditures that are designated for conditional approval include certain building projects, District
expenditures that substantially affect or influence future System direction or the manner in which significant services
are performed, expenditures that may be inconsistent with System direction or vary from previously negotiated purchasing agreements, and local expenditures that duplicate national efforts.
As mandated by the Federal Reserve Act, section 16, the Board reimburses the BEP for all costs related to the production of Federal Reserve notes. Section 16 of the Federal Reserve Act also requires that all costs incurred for the issuing
of notes shall be paid for by the Board and included in its assessments to the Reserve Banks. Operations and capital
investments of the BEP have been generally financed by a revolving fund that is reimbursed through product sales,
nearly all of which are sales of Federal Reserve notes to the Board to fulfill its annual print order.
Federal Reserve System Budgets 171
banknote printing, the cost of shipping new currency from the BEP to Reserve Banks and fit currency between Reserve Banks, and funds the Currency Education Program (CEP). The CEP aims to
protect and maintain confidence in U.S. currency worldwide by coordinating counterfeit detection
training to Reserve Bank and foreign central bank staff, providing information about banknote
security features, and conducting outreach to key stakeholders on U.S. Currency Program (USCP)
initiatives.
The annual currency budget process is as follows:
• Each year, under authority delegated by the Board, the director of the Division of Reserve Bank
Operations and Payment Systems submits a fiscal year print order for notes to the director of
the BEP. 18
• The BEP forecasts expenses for the single-cycle calendar-year and multicycle project budgets.
The single-cycle budget included fixed and variable costs for printing Federal Reserve notes and
support costs. The multicycle budget includes costs related to facility projects. Board staff
develop budgets for Board expenses in relation to strategic guidance set by Cash leadership.
• The various sections of the budget are independently reviewed by Board staff, who also prepare
a consolidated budget recommendation for BAC and Board approval.
• The BAC reviews the proposed currency budget.
• The BAC chair submits the proposed currency budget to Board members for review and
final action.
2021 Budget Performance
The Board’s 2021 actual single-cycle operating expenses for new currency were $950.4 million,
which was $95.9 million, or 9.2 percent, below the budgeted amount for 2021. The underrun is
primarily due to lower than planned production of notes from the BEP. Additional underruns are due
to fewer shipments of notes from the BEP to Reserve Banks and delays in contracted research
and development support for banknote development.
BEP Single-Cycle Operating Costs
BEP single-cycle operating costs were $894.1 million, which was $86.3 million, or 8.8 percent,
below the budgeted amount for 2021. The budget underrun is primarily attributable to an underrun
in variable printing costs. The budget was based on the delivery of 8.2 billion notes, which was the
mid-range of estimated volume, and the most likely scenario, of the 2021 print order range of
between 7.6 and 9.6 billion notes. However, the BEP delivered 6.8 billion notes during 2021. The
18
The Board delivers the annual print order to the BEP director in August of each year, and copies are available on the
Board’s website at https://www.federalreserve.gov/paymentsystems/coin_currency_orders.htm.
172 108th Annual Report | 2021
lower-than-planned deliveries were a result of delays to note production because of COVID-19 shutdowns at the BEP, weather and adverse event shutdowns, and a complex denominational mix.19
BEP Multicycle Project Operating Costs
The currency budget includes funds for the BEP’s Fort Worth facility expansion and Washington,
D.C., replacement facility.20 The expanded Fort Worth facility will support additional note production needs, and that expansion project is currently approved for a total project budget of
$282.8 million. The new Washington, D.C., replacement facility will replace the existing 100year-old Washington, D.C., facility, which will enable the BEP to meet modern production requirements.21
The 2021 expenses for facility projects were $4.9 million less than budgeted. The Board and BEP
agreed to pause the Washington, D.C., replacement facility’s design and engineering work to implement better governance, program management, and financial control processes to address the
risks of such a large and complex project. However, reimbursements for environmental impact
analysis, site demolition, and site preparation expenses continued.
Board Single-Cycle Operating Costs
Board costs were $9.5 million, or 14.5 percent, under the budgeted amount for 2021. The
underrun is attributable to lower costs for currency transportation and banknote development. The
currency issuance underrun is due to fewer shipments of notes from the BEP to Reserve Banks
than expected, which resulted in decreased BEP shipment costs. This was partially offset by the
increased shipments between Reserve Banks needed to rebalance inventories across the System.
The banknote development underrun is primarily the result of lower membership fees, contract
terminations for banknote studies, and delays for several projects that were affected by the
pandemic.
2022 Budget
Table D.13 summarizes the 2022 single-cycle currency operating budget of $1,060.0 million.22
The 2022 single-cycle operating budget represents an increase of $109.6 million, or 11.5 percent,
19
20
21
22
The 2021 print order included a larger ratio of higher denomination notes, which are more challenging and costly to produce than lower denomination notes.
The BEP facility projects were previously approved on a single-cycle operating budget basis. Funds that were not
expended were not carried over to the next calendar year. In 2021, the Board approved shifting the BEP facility projects
to a multiyear total cost approval to simplify the budgeting process, ensure that the BEP has sufficient cash to pay obligations that span multiple budget years, provide regular reporting of lifetime project costs, and provide flexibility to
manage inherent project changes.
The rationale for the new facility is laid out in a Government Accountability Office (GAO) report published in April 2018;
see BEP, Options for and Costs of a Future Currency Production Facility (Washington: GAO, April 2018), https://
www.gao.gov/products/gao-18-338.
For 2022, the Board approved a $25,000 multicycle capital budget for adversarial analysis laboratory equipment.
Federal Reserve System Budgets 173
from 2021 actual expenses. BEP costs associated with the printing of Federal Reserve notes are
93.3 percent of the operating budget. Board expenses for currency issuance, banknote development, and currency education comprise the remaining 6.7 percent of the operating budget.
Table D.14 provides an overview of the multicycle project budget that funds the BEP’s facility
projects.
Table D.13. Federal Reserve single-cycle currency budget, 2021–22
Millions of dollars, except as noted
2021
budget
Item
2021
actual
Variance
2021 actual to
2021 budget
Variance
2022 budget to
2021 actual
2022
budget
Amount
Percent
Amount
Percent
BEP costs
980.4
894.1
−86.3
−8.8
989.2
95.1
10.6
Printing Federal Reserve notes
975.4
889.4
−86.0
−8.8
983.8
94.4
10.6
BEP fixed printing costs
518.6
518.0
−0.6
−0.1
612.5
94.5
18.2
BEP variable printing costs
456.8
371.4
−85.4
−18.7
371.3
−0.1
0.0
BEP support costs
5.0
4.7
−0.3
–5.9
5.4
0.7
15.4
Currency reader
1.1
0.7
–0.3
–31.9
1.0
0.2
33.8
Destruction and compliance
3.9
3.9
0.0
1.2
4.4
0.5
12.0
65.8
56.1
–9.5
–14.5
70.8
14.5
25.8
Currency issuance
33.6
29.1
–4.5
–13.5
37.6
8.5
29.2
Banknote development2
26.4
21.8
–4.6
–17.3
27.1
5.3
24.2
Board expenses
1
Currency education
2
Operating budget
1
2
5.9
5.4
–0.5
–7.7
6.1
0.7
13.8
1,046.2
950.4
–95.9
–9.2
1,060.0
109.6
11.5
This line item was previously identified as currency transportation. Starting in 2022, the currency issuance category includes transportation,
personnel, and other support costs.
Personnel, travel, and training costs were previously displayed as line items in the budget. These costs are now included in the Banknote
development and Currency education budget categories that they support.
Table D.14. Multicycle projects in the currency budget, 2021–22
Millions of dollars, except as noted
Item
2020 and
prior actual
2021 budget
2021 actual
2022 budget
160.0
40.2
40.2
52.8
0.7
49.6
44.7
5.5
160.7
89.8
84.9
58.3
Project lifetime budget
BEP facility funding
Fort Worth facility expansion
Washington, D.C., replacement facility
Total
1
TBD To be determined.
282.8
TBD1
282.8
174 108th Annual Report | 2021
BEP Single-Cycle Operating Costs
The proposed 2022 budget to fund the BEP expenses associated with the printing of Federal
Reserve notes is $989.2 million, which is $95.1 million, or 10.6 percent, greater than 2021
actual expenses.
Figure D.4. Federal Reserve costs for currency,
2012–22
The proposed budget for fixed printing costs is
$612.5 million, which is $94.5 million, or
18.2 percent, greater than 2021 actual
1200
expenses. The increase is primarily attribut-
Millions of dollars
able to capital purchases aligned with the
1000
long-term capital equipment plan and IT
800
upgrades. There are also increased research
600
and development expenses to support the
400
new security features for the next family
200
of notes.
0
2012
2014
2016
2018
2020
2022
Note: For 2022, budgeted.
Variable printing costs for 2022 align with
2021 actual expenses. Although the BEP
expects to deliver more notes in 2022 than in
2021, 7.2 billion notes compared with 6.8 billion notes, the accompanying variable printing
costs remain stable because economies of scale are realized with increased deliveries.
BEP Multicycle Project Operating Costs
The multicycle project budget includes $52.8 million in 2022 for the Fort Worth facility expansion
to expand the final production area and administrative office space. The BEP plans for this project
to be 85 to 90 percent complete by the end of 2022.
Board approval for the Washington, D.C., replacement facility’s project lifetime budget will be
sought when the BEP’s Project Management Office and U.S. Army Corps of Engineers have finished the work underway to implement the prerequisite governance, program management, and
financial control processes needed for such a large and complex project. The current total project
estimate is $1,988.1 million. The multicycle project budget includes $5.5 million in 2022 funds
for expenses related to environmental impact analysis, site demolition, and site preparation.
Board Single-Cycle Operating Costs
Board costs are estimated to be $70.8 million, which is $14.5 million, or 25.8 percent, more than
2021 actual expenses. The increase is primarily driven by currency issuance and banknote development costs.
Federal Reserve System Budgets 175
The currency issuance budget increases are primarily attributable to increased BEP and intraSystem shipment costs to transport the increased note deliveries, rebalance banknote inventories
across the System, and fund alternative transportation methods.23 Budget increases also include
funds for an additional position and contracts to support upcoming changes to the USCP and the
Board’s strategic priorities.
The banknote development budget increases include membership fee increases and contract services for additional development and testing activities for the newly selected security features.
Beginning in 2022, the Board will conduct studies to gather public perception data to support
banknote development and receive advisory support for redesign efforts. Contract resources will
also provide support on financial management, construction oversight, and program governance
for the Washington, D.C., replacement facility.
In 2022, currency education will continue to broaden its domestic, international, and stakeholder
education outreach, and improve and maintain the currency website and its infrastructure. The
additional funds are attributable to contract price increases for website services and personnel
costs as the team fills its vacancies.
The currency issuance, banknote development, and currency education budget categories also
include personnel, travel, training, and support and overhead costs.24
23
24
Alternative transportation methods include chartered air service, which is more expensive than traditional shipment
options but provides flexibility and resiliency.
The currency budget includes support and overhead costs for enterprise IT, facilities, law enforcement, human
resources, and other services.
177
E
Record of Policy Actions of the Board
of Governors
Policy actions of the Board of Governors are presented pursuant to section 10 of the Federal
Reserve Act. That section provides that the Board shall keep a record of all questions of policy
determined by the Board and shall include in its annual report to Congress a full account of such
actions. This appendix provides a summary of policy actions in 2021. Policy actions were implemented through (1) rules and regulations, (2) policy statements and other actions, and (3) discount rates for depository institutions. More information on the actions is available from the relevant Federal Register notices or other documents (see links in footnotes) or on request from the
Board’s Freedom of Information Office. This appendix also provides information on the Board and
the Government Performance and Results Act.
For information on the Federal Open Market Committee’s (FOMC’s) policy actions relating to open
market operations, see Appendix B, “Minutes of Federal Open Market Committee Meetings.”
Rules and Regulations
Regulation D (Reserve Requirements of Depository Institutions)
Effective July 29, 2021. On May 28, 2021, the Board approved a final rule (Docket No. R-1737)
to eliminate references to an interest on required reserves (IORR) rate and an interest on excess
reserves (IOER) rate and replace them with a single interest on reserve balances (IORB) rate.1 The
final rule also simplified the formula used to calculate the amount of interest paid on balances
maintained by or on behalf of eligible institutions in master accounts at Federal Reserve Banks
and made other minor conforming amendments. (Note: On July 28, 2021, the Board established
the IORB rate, effective July 29, 2021, at 0.15 percent (the level of the IORR and IOER rates in
effect prior to the Board’s action). See “Interest on Reserves” for Board votes on interest on
reserves in 2021.)
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
Regulation I (Federal Reserve Bank Capital Stock)
Effective February 14, 2022. On December 21, 2021, the Board approved a final rule (Docket
No. R-1745) to streamline reporting requirements for member banks related to their subscriptions
1
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-06-04/html/2021-11758.htm.
178 108th Annual Report | 2021
to Federal Reserve Bank capital stock.2 In particular, the final rule reduces the quarterly reporting
burden for member banks by automating the application process for adjusting their subscriptions
to Federal Reserve Bank capital stock, except in the context of mergers.
Voting for this action: Chair Powell, Vice Chair Clarida, and Governors Quarles, Brainard,
Bowman, and Waller.3
Regulation O (Loans to Executive Officers, Directors, and Principal Shareholders
of Member Banks)
Effective February 17, 2021. On February 5, 2021, the Board approved an interim final rule and
request for comment (Docket No. R-1740) to extend, through March 31, 2021, an exception for
Paycheck Protection Program (PPP) loans from the requirements of section 22(h) of the Federal
Reserve Act (FRA) and certain provisions of Regulation O.4 These requirements limit the types and
quantity of loans that certain bank directors, shareholders, officers, and businesses owned by
these persons can receive from their related banks. In April and July 2020, the Board issued
interim final rules to provide exceptions from these requirements to certain loans that were guaranteed under the Small Business Administration’s PPP. The interim final rule approved on
February 5, 2021, extended this relief to PPP loans, including “second draw” PPP loans, made
through March 31, 2021.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
Effective May 21, 2021. On May 7, 2021, the Board approved an interim final rule and request for
comment (Docket No. R-1740) to extend the exception for PPP loans from the requirements of
section 22(h) of the FRA and certain provisions of Regulation O.5 The current interim final rule
extended this relief to PPP loans, including “second draw” PPP loans, made during the period permitted by statute, but in no case later than March 31, 2022.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
Regulation Q (Capital Adequacy of Bank Holding Companies, Savings and Loan
Holding Companies, and State Member Banks)
Effective March 22, 2021. On March 8, 2021, the Board approved an interim final rule and
request for comment (Docket No. R-1741), issued jointly with the Office of the Comptroller of the
2
3
4
5
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2022-01-13/html/2022-00503.htm.
Randal Quarles’s term as Vice Chair for Supervision ended on October 13, 2021. He resigned as a member of the
Board of Governors, effective December 25, 2021.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-02-17/html/2021-02966.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-05-21/html/2021-10711.htm.
Record of Policy Actions of the Board of Governors 179
Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) (together with the Board, “the
agencies”), to support and facilitate the Department of the Treasury’s implementation of the Emergency Capital Investment Program (ECIP).6 Congress established the ECIP to support the efforts of
low- and moderate-income community financial institutions to provide loans, grants, and forbearance to small businesses, minority-owned businesses, and consumers, especially in low-income
and underserved communities. Under the program, Treasury purchases preferred stock or subordinated debt from qualifying minority depository institutions and community development financial
institutions. The interim final rule permits the ECIP-issued preferred stock or ECIP-issued subordinated debt to qualify as additional tier 1 capital or tier 2 capital, respectively, under the agencies’
capital regulation.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
Regulations Q (Capital Adequacy of Bank Holding Companies, Savings and Loan
Holding Companies, and State Member Banks), Y (Bank Holding Companies and
Change in Bank Control), LL (Savings and Loan Holding Companies), and
YY (Enhanced Prudential Standards)
Effective April 5, 2021. On January 16, 2021, the Board approved a final rule (Docket
No. R-1724) updating its capital planning requirements to be consistent with other recently modified Board rules.7 In October 2019, the Board finalized a risk-based prudential framework for large
bank holding companies and U.S. intermediate holding companies of foreign banking organizations. The final rule modifies the capital planning, regulatory reporting, and stress capital buffer
(SCB) requirements for firms in the lowest risk category under this updated framework. In particular, these firms will be subject to a two-year supervisory stress test cycle and will not be subject to company-run stress tests. In addition, the final rule applies capital planning requirements
to large savings and loan holding companies that are not predominantly engaged in insurance or
commercial activities.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
Regulation Y (Bank Holding Companies and Change in Bank Control)
Effective April 1, 2022 (compliance date May 1, 2022). On November 16, 2021, the Board
approved a final rule (Docket No. R-1736), issued jointly with the OCC and FDIC, to improve information sharing about cyber incidents that may affect the U.S. banking system.8 Under the
Computer-Security Incident Notification Requirements for Banking Organizations and Their Bank
6
7
8
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-03-22/html/2021-05443.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-02-03/html/2021-02182.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-11-23/html/2021-25510.htm.
180 108th Annual Report | 2021
Service Providers (subpart N of Regulation Y), a banking organization is required to notify its primary federal regulator of any “computer-security incident” that rises to the level of a “notification
incident” as soon as possible, and no later than 36 hours after the banking organization determines that a notification incident has occurred. The final rule also requires a bank service provider
to notify affected banking-organization customers as soon as possible when the provider determines that it has experienced a computer-security incident that has materially affected, or is reasonably likely to materially affect, banking organization customers for four or more hours.
Voting for this action: Chair Powell, Vice Chair Clarida, and Governors Quarles, Brainard,
Bowman, and Waller.
Regulation EE (Netting Eligibility for Financial Institutions)
Effective March 29, 2021. On February 16, 2021, the Board approved a final rule (Docket
No. R-1661) to reduce risk and increase efficiency in the financial system by applying netting protections to a broader range of financial institutions.9 The final rule applies netting provisions of
the Federal Deposit Insurance Corporation Improvement Act of 1991 to certain new entities,
including swap dealers. In addition, the final rule makes minor changes to the existing activitiesbased test to clarify how it would apply following a consolidation of legal entities.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
Rules of Procedure—Statement Clarifying the Role of Supervisory Guidance
Effective May 10, 2021. On March 25, 2021, the Board approved a final rule (Docket No. R-1725)
that codifies, with amendments, the Interagency Statement Clarifying the Role of Supervisory Guidance issued in September 2018 by the Board, OCC, FDIC, National Credit Union Administration,
and Consumer Financial Protection Bureau.10 The final rule outlines the role of supervisory guidance and confirms that, unlike a law or regulation, supervisory guidance does not have the force
and effect of law.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
Policy Statements and Other Actions
Capital Planning and Stress Testing
On March 25, 2021, the Board approved (1) an extension, through June 30, 2021, of pandemicrelated limits on capital distributions by large bank holding companies and U.S. intermediate
9
10
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-02-26/html/2021-03596.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-04-08/html/2021-07146.htm.
Record of Policy Actions of the Board of Governors 181
holding companies of foreign banks and (2) an extension of time, also through June 30, 2021, to
notify these firms about whether their SCB requirements would be recalculated.11 The Board also
announced that, following completion of the 2021 stress tests, firms whose capital levels were
above minimum risk-based capital requirements would be subject to normal restrictions on capital
distributions under the Board’s SCB framework and would no longer be subject to pandemicrelated restrictions. However, these restrictions would remain in place until September 30, 2021,
for any firm that fell below its minimum risk-based capital requirements in the stress tests. If a
firm’s capital was still below stress test requirements after that date, it would be subject to
stricter limitations on capital distributions under the SCB framework.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
On June 21, 2021, the Board approved a delegation of authority related to SCB requirements and
stress test results. Specifically, the Board delegated to the director of the Division of Supervision
and Regulation and the director of the Division of Financial Stability, with the concurrence of the
Vice Chair for Supervision, the authority to provide firms subject to the Board’s capital plan rule
with notice of their SCB requirement, an explanation of supervisory stress test results, their final
SCB requirement, and confirmation of their planned capital distributions. On June 24, 2021, the
Board announced that pandemic-related restrictions on firms’ capital distributions would end.12
All 23 firms subject to the 2021 stress tests remained above their minimum capital requirements
and would therefore be subject to the Board’s normal SCB framework.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
On August 5, 2021, the Board approved affirmation of the SCB requirement for HSBC North
America Holdings, Inc., in response to its request for reconsideration.13 The Board also directed
staff to conduct a closer examination of issues raised in the reconsideration process to inform
continuing improvements in the stress testing methodology.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
Credit Risk Retention—Determination of Interagency Review
On December 12, 2021, the Board approved a determination of the results of the interagency
review (Docket No. OP-1688), issued jointly with the OCC, FDIC, Federal Housing Finance Agency,
11
12
13
See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210325a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210624a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210805a.htm.
182 108th Annual Report | 2021
Securities and Exchange Commission, and Department of Housing and Urban Development,
required under the Board’s Regulation RR, Credit Risk Retention, and the respective credit risk
retention regulations of the other agencies (collectively, “the credit risk retention regulations”).14
Specifically, the interagency review covered the definition of “qualified residential mortgage
(QRM),” the community-focused residential mortgage exemption, and the exemption for qualifying
three- to four-unit residential mortgage loans, as each is set forth in the credit risk retention regulations. After completing the review, the Board and the other agencies determined not to propose
any changes at this time to the QRM definition or the associated exemptions for communityfocused residential mortgages and qualifying three- to four-unit residential mortgages.
Voting for this action: Chair Powell, Vice Chair Clarida, and Governors Quarles, Brainard,
Bowman, and Waller.
Fedwire Funds Service
On September 30, 2021, the Board approved a notice (Docket No. OP-1613) announcing that the
Federal Reserve Banks will adopt the ISO® 20022 message format for the Fedwire® Funds
Service.15 The new format will allow for increased efficiency due to greater interoperability among
global payment systems as well as a richer set of payment data that may help banks and other
participants comply with sanctions and anti-money-laundering requirements. The Board also invited
public comment on a revised plan for migrating the Fedwire Funds Service to the new message
format on a single day, rather than in three separate phases as previously proposed. This
single-day migration would be targeted for, and would be no earlier than, November 2023.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
Interest on Reserves
On June 16, 2021, the Board approved raising the interest rate paid on required and excess
reserve balances from 0.10 percent to 0.15 percent, effective June 17, 2021.16 This action was
taken to support the FOMC’s decision on June 16, 2021, to maintain the federal funds rate in a
target range of 0 to ¼ percent. Setting the interest rate paid on required and excess reserve balances to 15 basis points above the bottom of the target range for the federal funds rate was
intended to foster trading in the federal funds market at rates well within the FOMC’s target range
and to support smooth functioning of short-term funding markets.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Bowman, Brainard, and Waller.
14
15
16
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-12-20/html/2021-27561.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-10-06/html/2021-21801.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20210616a1.htm.
Record of Policy Actions of the Board of Governors 183
On July 28, 2021, the Board approved establishing the interest rate paid on reserve balances at
0.15 percent, effective July 29, 2021.17 This action was taken to support the FOMC’s decision on
July 28, 2021, to maintain the federal funds rate in a target range of 0 to ¼ percent. As
announced on June 2, 2021, the Federal Reserve Board approved a final rule, effective July 29,
2021, amending Regulation D to eliminate references to an IORR rate and to an IOER rate and
replace them with a single IORB rate.18 Therefore, the Board voted on one rate—the interest on
reserve balances rate—at this meeting and will continue to do so going forward.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Bowman, Brainard, and Waller.
Paycheck Protection Program Liquidity Facility
On March 4, 2021, the Board approved an extension of the Paycheck Protection Program Liquidity
Facility (PPPLF) to June 30, 2021, to enable the facility to provide continued support for the flow of
credit to small businesses through the Small Business Administration’s PPP. 19 Under the PPPLF,
eligible financial institutions could pledge PPP loans as collateral in exchange for term credit.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
On June 25, 2021, the Board approved an extension of the PPPLF to July 30, 2021, in order to
enable financial institutions to pledge to the facility any PPP loans approved by the Small Business
Administration through the June 30, 2021, expiration of the PPP. 20
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard, Bowman, and Waller.
Discount Rates for Depository Institutions in 2021
Under the FRA, the boards of directors of the Federal Reserve Banks must establish rates on
discount window loans to depository institutions at least every 14 days, subject to review and
determination by the Board of Governors. Therefore, about every two weeks the Board considers
proposals by the Reserve Banks for the level of the primary credit rate and for the formulas used
to compute the secondary and seasonal credit rates.21
17
18
19
20
21
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20210728a1.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210602a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20210308a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20210625a.htm.
See the minutes of the Board of Governors discount rate meetings at https://www.federalreserve.gov/monetarypolicy/
discountrate.htm.
184 108th Annual Report | 2021
Primary, Secondary, and Seasonal Credit
Primary credit, the Federal Reserve’s main lending program for depository institutions, is extended
at the primary credit rate. It is made available, with minimal administration, as a source of liquidity
to depository institutions that, in the judgment of the lending Federal Reserve Bank, are in generally sound financial condition. Throughout 2021, the primary credit rate was ¼ percent.
Following changes to the primary credit rate program announced by the Board on March 15, 2020,
in 2021 depository institutions could borrow primary credit for periods as long as 90 days, prepayable and renewable by the borrower on a daily basis. Collectively, maintaining the offering rate and
other terms of primary credit reflected continued efforts by the Federal Reserve to encourage discount window use to support the smooth flow of credit to households and businesses during the
COVID event.22
Secondary credit is available in appropriate circumstances to depository institutions that do not
qualify for primary credit. The secondary credit rate is set at a spread above the primary credit
rate. Throughout 2021, the spread was set at 50 basis points. At year-end, the secondary credit
rate was ¾ percent.
Seasonal credit is available to smaller depository institutions to meet liquidity needs that arise
from regular swings in their loans and deposits. The rate on seasonal credit is calculated every
two weeks as an average of selected money market yields, typically resulting in a rate close to the
target range for the federal funds rate. At year-end, the seasonal credit rate was 0.15 percent (see
table E.1).23
Table E.1. Federal Reserve Bank interest rates on loans to depository institutions, December 31, 2021
Percent
Reserve Bank
All banks
Primary credit
Secondary credit
Seasonal credit
0.25
0.75
0.15
Note: Primary credit is available for very short terms as a backup source of liquidity to depository institutions that are in generally sound financial condition in the judgment of the lending Federal Reserve Bank. Secondary credit is available in appropriate circumstances to depository
institutions that do not qualify for primary credit. Seasonal credit is available to help relatively small depository institutions meet regular seasonal needs for funds that arise from a clear pattern of intra-yearly movements in their deposits and loans. The discount rate on seasonal
credit takes into account rates charged by market sources of funds and is reestablished on the first business day of each two-week reserve
maintenance period.
22
23
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315b.htm.
For current and historical discount rates, see https://www.frbdiscountwindow.org.
Record of Policy Actions of the Board of Governors 185
Votes on Changes to Discount Rates for Depository Institutions
Throughout 2021, there were no changes to the primary credit rate, and the Board approved
proposals by the Reserve Banks to renew the formulas used to compute the secondary and
seasonal credit rates.
The Board of Governors and the Government Performance
and Results Act
Overview
The Government Performance and Results Act (GPRA) of 1993 requires federal agencies to prepare a strategic plan covering a multiyear period and to submit an annual performance plan and
an annual performance report. Although the Board is not covered by GPRA, the Board voluntarily
complies with the spirit of the act and, like other federal agencies, publicly publishes a multiyear
Strategic Plan, as well as an Annual Performance Plan and an Annual Performance Report.24
Strategic Plan, Performance Plan, and Performance Report
On December 27, 2019, the Board published the Strategic Plan 2020–23, which outlines the organization’s priorities across five functional areas—Monetary Policy and Financial Stability, Supervision, Payment System and Reserve Bank Oversight, Public Engagement and Community Development, and Mission Enablement—for maintaining the stability, integrity, and efficiency of the
nation’s monetary, financial, and payments systems. In formulating the Strategic Plan 2020–23,
the Board identified and prioritized the goals and objectives paramount to advancing the organization’s mission while allowing for appropriate flexibility to respond to emerging and evolving challenges.
The Annual Performance Plan sets forth the projects and initiatives in support of the Board’s current Strategic Plan’s goals and objectives during a one-year period. The Annual Performance Plan
helps the organization identify and prioritize investments and dedicate sufficient resources across
the five functions to meet its congressional mandate, while maintaining ongoing operations.
The Annual Performance Report summarizes the Board’s accomplishments throughout the performance year that contributed toward achieving the goals and objectives identified in that year’s
Annual Performance Plan. The Annual Performance Report provides transparency into the organization’s activities and helps the Board to communicate the continued fulfillment of its dual mandate
to the U.S. Congress and the public.
Ultimately, the organization’s planning and reporting processes enable the Board to identify, prioritize, and progress those activities most critical to advancing its mission.
24
The Strategic Plan, Annual Performance Plan, and Annual Performance Report are available on the Federal Reserve
Board’s website at https://www.federalreserve.gov/publications/gpra.htm.
187
F
Litigation
During 2021, the Board of Governors was a party in 5 lawsuits or appeals filed that year and was
a party in 5 other cases pending from previous years, for a total of 10 cases. In 2020, the Board
had been a party in a total of 13 cases. As of December 31, 2021, six cases were pending.
Pending
Bernstein v. Federal Reserve et al., No. 21-cv-8174 (D. Arizona, filed August 3, 2021), is an action
alleging fraud and conspiracy involving multiple defendants.
Fruge v. Board of Governors, No. 20-cv-2811 (D. District of Columbia, filed October 2, 2020), is an
action claiming retaliation for protected disclosures.
Greenspan v. Board of Governors, No. 21-cv-1968 (D. District of Columbia, filed July 20, 2021), is
an action under the Freedom of Information Act.
Junk v. Board of Governors, No. 19-3125 (2d Circuit, filed September 27, 2019), is an appeal
under the Freedom of Information Act.
North Dakota Retail Association et al. v. Board of Governors, No. 21-cv-95 (D. North Dakota, filed
April 29, 2021), is an Administrative Procedure Act challenge to the debit interchange fee provisions of the Board’s Regulation II.
Smith and Kiolbasa v. Board of Governors, No. 21-9538 (10th Circuit, filed April 21, 2021), is a
petition for review of Board prohibition orders under the Federal Deposit Insurance Act.
Resolved
Baylor v. Powell, No. 20-5176 (D.C. Circuit, filed June 22, 2020), was an appeal of an order
granting summary judgment to the Board in an employment discrimination case. On April 23, 2021,
the court of appeals affirmed the district court’s judgment.
Center for Biological Diversity v. Department of Treasury and Board of Governors, No. 20-cv-1322
(D. District of Columbia, filed May 19, 2020), was an action under the Freedom of Information Act.
On May 18, 2021, the plaintiff voluntarily dismissed the case.
188 108th Annual Report | 2021
Center for Popular Democracy v. Board of Governors, No. 16-cv-5829 (E.D. New York, filed
October 19, 2016), was an action under the Freedom of Information Act. On September 30, 2021,
the court entered final judgment.
Estrada v. Federal Reserve et al., No. 21-cv-528 (D. District of Columbia, filed February 24, 2021),
was an action alleging violations of the Federal Reserve Act. On July 13, 2021, the court dismissed the cased.
189
G
Statistical Tables
This appendix includes 13 statistical tables that provide updated historical data concerning Board and
System operations and activities.
Table G.1. Federal Reserve open market transactions, 2021
Millions of dollars
Type of security and
transaction
U.S. Treasury securities
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Total
1
Outright transactions2
Treasury bills
Gross purchases
0
0
0
0
0
0
0
0
0
0
0
0
0
Gross sales
0
0
0
0
0
0
0
0
0
0
0
0
0
84,064
79,292
68,155
93,734
80,179
73,555
98,228
86,855
81,437
79,352
90,021
81,412
996,284
84,064
79,292
68,155
93,734
80,179
73,555
98,228
86,855
81,437
79,352
90,021
81,412
996,284
0
0
0
0
0
0
0
0
0
0
0
0
0
5,916
5,698
40
10,852
3,763
2,012
9,222
3,624
7,213
17,545
1,590
6,948
74,423
0
0
0
0
0
0
0
0
0
0
0
0
0
−12,063
−77,472
−92,435
−66,738
−66,844
−85,643
−19,755 −106,108
−39,394
−9,029 −110,862
−47,763
−734,105
0
0
0
0
0
0
0
0
0
0
0
0
0
43,675
55,509
47,127
43,283
47,149
34,522
50,915
48,002
31,463
47,502
34,061
26,790
509,998
Exchanges
For new bills
Redemptions
Others up to 1 year
Gross purchases
Gross sales
Exchanges
Redemptions
Over 1 to 5 years
Gross purchases
Gross sales
Exchanges
0
0
0
0
0
25
0
0
0
0
25
0
50
5,831
41,180
51,535
40,796
30,769
49,614
9,548
55,348
20,749
4,364
57,185
28,885
395,803
15,896
16,352
10,200
10,353
12,598
21,125
10,084
18,659
15,880
12,432
13,148
10,865
167,592
0
0
0
0
0
0
0
0
0
0
0
0
0
3,820
23,254
29,254
17,674
21,751
24,939
6,256
32,019
13,199
2,859
34,880
12,917
222,821
14,527
15,257
21,578
18,323
14,373
14,356
13,790
16,333
12,458
14,332
12,409
11,604
179,340
0
0
0
0
0
0
0
0
0
0
0
0
0
2,413
13,039
11,646
8,268
14,324
11,090
3,951
18,742
5,446
1,806
18,797
5,961
115,482
Over 5 to 10 years
Gross purchases
Gross sales
Exchanges
More than 10 years
Gross purchases
Gross sales
Exchanges
All maturities
Gross purchases
80,014
92,816
78,945
82,811
77,883
72,015
84,011
86,618
67,014
91,811
61,208
56,207
931,353
Gross sales
0
0
0
0
0
25
0
0
0
0
25
0
50
Redemptions
0
0
0
0
0
0
0
0
0
0
0
0
0
80,014
92,816
78,945
82,811
77,883
71,990
84,011
86,618
67,014
91,811
61,183
56,207
931,303
Net change in U.S.
Treasury securities
(continued)
190 108th Annual Report | 2021
Table G.1—continued
Type of security and
transaction
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Total
Federal agency obligations
Outright transactions2
Gross purchases
0
0
0
0
0
0
0
0
0
0
0
0
0
Gross sales
0
0
0
0
0
0
0
0
0
0
0
0
0
Redemptions
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30,317
63,430
51,470
6,642
52,945
75,367
65,148
53,282
56,631
33,120
43,059
44,668
576,079
110,331
156,246
130,415
89,453
130,828
147,357
149,159
139,900
123,645
124,931
104,242
100,875
1,507,382
0
0
0
0
0
0
0
n/a
Net change in federal
agency obligations
Mortgage-backed securities
3
Net settlements2
Net change in mortgagebacked securities
Total net change in
securities holdings4
Temporary transactions
Repurchase agreements5
1,000
711
261
0
2
Reverse repurchase
agreements5
210,163
208,404
223,861
293,766
498,489
876,277 1,105,167 1,323,559 1,500,444 1,715,668 1,746,798 1,893,030
n/a
Foreign official and
international accounts
209,197
207,162
205,062
227,016
223,006
234,178
256,801
294,095
n/a
966
1,242
18,799
66,751
275,483
642,099
848,367 1,052,735 1,210,888 1,425,761 1,444,900 1,598,935
n/a
Others
270,823
289,556
289,907
301,899
Note: Purchases of Treasury securities and federal agency obligations increase securities holdings; sales and redemptions of these securities decrease
securities holdings. Exchanges occur when the Federal Reserve rolls the proceeds of maturing securities into newly issued securities, and so exchanges
do not affect total securities holdings. Positive net settlements of mortgage-backed securities increase securities holdings, while negative net settlements of these securities decrease securities holdings. Components may not sum to totals because of rounding. See table 2 of the H.4.1 release
(https://www.federalreserve.gov/releases/h41/) for the maturity distribution of the securities.
1
Transactions exclude changes in compensation for the effects of inflation on the principal of inflation-indexed securities. Transactions include the
rollover of inflation compensation into new securities. The maturity distributions of exchanged Treasury securities are based on the announced maturity of new securities rather than actual day counts.
2
Excludes the effect of temporary transactions—repurchase agreements and reverse repurchase agreements.
3
Guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Monthly net change in the remaining principal balance of the securities, reported at face
value.
4
The net change in securities holdings reflects the settlements of purchases, reinvestments, sales, and maturities of portfolio securities.
5
Averages of daily business cash value of agreements, which are collateralized by U.S. Treasury securities, federal agency debt securities, and
mortgage-backed securities. For additional details on temporary transactions, see the temporary open market operations historical search available
at https://www.newyorkfed.org/markets/data-hub.
n/a Not applicable.
Statistical Tables 191
Table G.2. Federal Reserve Bank holdings of U.S. Treasury and federal agency securities,
December 31, 2019–21
Millions of dollars
Description
December 31
Change
2021
2020
2019
2020–21
2019–20
5,652,542
4,688,929
2,328,933
963,613
2,359,996
1–90 days
207,113
191,154
51,763
15,959
139,391
91 days to 1 year
118,931
134,890
117,762
−15,959
17,128
807,747
708,144
303,438
99,603
404,706
More than 1 year through 5 years
2,146,103
1,759,737
893,832
386,366
865,905
More than 5 years through 10 years
1,019,239
836,893
321,591
182,346
515,302
More than 10 years
1,353,409
1,058,111
640,547
295,298
417,564
1
U.S. Treasury securities
Held outright2
By remaining maturity
Bills
Notes and bonds
1 year or less
By type
Bills
326,044
326,044
169,525
0
156,519
Notes
3,748,992
3,063,037
1,290,107
685,955
1,772,930
Bonds
1,577,506
1,299,848
869,301
277,658
430,547
2,347
2,347
2,347
0
0
1–90 days
0
0
0
0
0
91 days to 1 year
0
0
0
0
0
0
0
0
0
0
Federal agency securities1
Held outright2
By remaining maturity
Discount notes
Coupons
1 year or less
More than 1 year through 5 years
More than 5 years through 10 years
More than 10 years
0
0
0
0
0
2,134
1,818
486
316
1,332
213
529
1,861
−316
−1,332
By type
Discount notes
Coupons
0
0
0
0
0
2,347
2,347
2,347
0
0
529
529
529
0
0
1,818
1,818
1,818
0
0
0
0
0
0
0
By issuer
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Federal Home Loan Banks
(continued)
192 108th Annual Report | 2021
Table G.2—continued
December 31
Description
Change
2021
2020
2019
2,615,546
2,039,467
1,408,677
2020–21
2019–20
576,079
630,790
Mortgage-backed securities3, 4
Held outright2
By remaining maturity
1 year or less
More than 1 year through 5 years
More than 5 years through 10 years
More than 10 years
26
4
12
22
−8
1,803
2,016
1,135
−213
881
60,328
72,044
73,528
−11,716
−1,484
2,553,389
1,965,403
1,334,002
587,986
631,401
977,512
667,007
422,087
310,505
244,920
1,075,531
888,260
652,729
187,271
235,531
562,503
484,200
333,861
78,303
150,339
0
1,000
255,619
−1,000
−254,619
By issuer
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Government National Mortgage Association
Temporary transactions
5
Repurchase agreements6
Repo operations
0
0
255,619
0
255,619
FIMA Repo Facility
0
1,000
0
−1,000
−1,000
2,183,041
216,051
336,649
1,966,990
−120,598
278,459
206,400
272,562
72,059
−66,162
1,904,582
9,651
64,087
1,894,931
−54,436
6
Reverse repurchase agreements
Foreign official and international accounts
Primary dealers and expanded counterparties
Note: Components may not sum to totals because of rounding.
1
Par value.
2
Excludes the effect of temporary transactions—repurchase agreements and reverse repurchase agreements.
3
Guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae.
4
The par amount shown is the remaining principal balance of the securities.
5
Contract amount of agreements.
6
Cash value of agreements, which are collateralized by U.S. Treasury securities, federal agency debt securities, and mortgage-backed securities. In
2020, the Foreign and International Monetary Authorities (FIMA) Repo Facility was established. In 2021, the FIMA Repo Facility was converted from
temporary to a standing facility for repurchase agreements.
Statistical Tables 193
Table G.3. Reserve requirements of depository
institutions, December 31, 2021
Requirement
Liability type1
Percentage
of liabilities
Effective
date
Net transaction accounts
0
3/26/2020
Nonpersonal time deposits
0
12/27/1990
Eurocurrency liabilities
0
12/27/1990
Note: The table reflects the liability types and percentages of those
liabilities subject to requirements for the maintenance period that
contains the year end.
1
For a description of these deposit types, see Regulation D.
194 108th Annual Report | 2021
Table G.4. Banking offices and banks affiliated with bank holding companies in the United States,
December 31, 2020 and 2021
Commercial banks1
Type of office
Total
Member
National
State
Nonmember
Savings
banks
Total
Total
4,600
4,368
1,466
757
709
2,902
232
0
0
0
0
0
0
0
Banks
Number, Dec. 31, 2020
Changes during 2021
New banks
Banks converted into branches
Ceased banking operations2
Other3
Net change
Number, Dec. 31, 2021
14
13
3
2
1
10
1
–142
–138
–45
–13
–32
–93
–4
–21
–19
–10
–2
–8
–9
–2
0
0
1
–8
9
–1
0
–149
–144
–51
–21
–30
–93
–5
4,451
4,224
1,415
736
679
2,809
227
75,971
73,665
49,876
37,845
12,031
23,789
2,306
Branches and additional offices
Number, Dec. 31, 2020
Changes during 2021
New branches
Banks converted to branches
Discontinued2
Other3
Net change
Number, Dec. 31, 2021
0
0
0
0
0
0
0
1,174
952
625
470
155
327
222
142
139
66
27
39
73
3
–3,743
–3,675
–2,731
–2,192
–539
–944
–68
0
32
37
555
–518
–5
–32
–2,427
–2,552
–2,003
–1,140
–863
–549
125
73,544
71,113
47,873
36,705
11,168
23,240
2,431
3,906
3,789
1,333
672
661
2,456
117
0
0
0
0
0
0
0
Banks affiliated with BHCs
Number, Dec. 31, 2020
Changes during 2021
BHC-affiliated new banks
Banks converted into branches
Ceased banking operations2
Other3
Net change
Number, Dec. 31, 2021
49
43
10
7
3
33
6
–125
–121
–44
–12
–32
–77
–4
–23
–21
–12
–3
–9
–9
–2
0
0
1
–8
9
–1
0
–99
–99
–45
–16
–29
–54
0
3,807
3,690
1,288
656
632
2,402
117
Note: Includes banks, banking offices, and bank holding companies in U.S. territories and possessions (affiliated insular areas).
1
For purposes of this table, banks are entities that are defined as banks in the Bank Holding Company Act, as amended, which is implemented by
Federal Reserve Regulation Y. Generally, a bank is any institution that accepts demand deposits and is engaged in the business of making commercial loans or any institution that is defined as an insured bank in section 3(h) of the Federal Deposit Insurance Corporation Act.
2
Institutions that no longer meet the Regulation Y definition of a bank.
3
Interclass changes and sales of branches.
Statistical Tables 195
Table G.5A. Reserves of depository institutions, Federal Reserve Bank credit, and related items, year-end
1984–2021 and month-end 2021
Millions of dollars
Factors supplying reserve funds
Federal Reserve Bank credit outstanding
Period
Securities held Repurchase
outright1
agreements2
1984
167,612
1985
1986
Loans and
other credit
extensions3
2,015
3,577
186,025
5,223
205,454
16,005
1987
226,459
4,961
1988
240,628
6,861
1989
233,300
1990
241,431
1991
272,531
15,898
1992
300,423
8,094
1993
336,654
13,212
1994
368,156
10,590
1995
380,831
13,862
1996
393,132
21,583
1997
431,420
23,840
1998
452,478
30,376
1999
478,144
2000
511,833
2001
2002
Float
Other Federal
Reserve
assets4
Total4
Gold stock
Special
Treasury
drawing rights
coin and
certificate
currency
account
outstanding5
833
12,347
186,384
11,096
4,618
16,418
3,060
988
15,302
210,598
11,090
4,718
17,075
1,565
1,261
17,475
241,760
11,084
5,018
17,567
3,815
811
15,837
251,883
11,078
5,018
18,177
2,170
1,286
18,803
269,748
11,060
5,018
18,799
2,117
481
1,093
39,631
276,622
11,059
8,518
19,628
18,354
190
2,222
39,897
302,091
11,058
10,018
20,402
218
731
34,567
323,945
11,059
10,018
21,014
675
3,253
30,020
342,464
11,056
8,018
21,447
94
909
33,035
383,904
11,053
8,018
22,095
223
–716
33,634
411,887
11,051
8,018
22,994
135
107
33,303
428,239
11,050
10,168
24,003
85
4,296
32,896
451,992
11,048
9,718
24,966
2,035
719
31,452
489,466
11,047
9,200
25,543
17
1,636
36,966
521,475
11,046
9,200
26,270
140,640
233
–237
35,321
654,100
11,048
6,200
28,013
43,375
110
901
36,467
592,686
11,046
2,200
31,643
551,685
50,250
34
–23
37,658
639,604
11,045
2,200
33,017
629,416
39,500
40
418
39,083
708,457
11,043
2,200
34,597
2003
666,665
43,750
62
–319
40,847
751,005
11,043
2,200
35,468
2004
717,819
33,000
43
925
42,219
794,007
11,045
2,200
36,434
2005
744,215
46,750
72
885
39,611
831,532
11,043
2,200
36,540
2006
778,915
40,750
67
–333
39,895
859,294
11,041
2,200
38,206
2007
740,611
46,500
72,636
–19
41,799
901,528
11,041
2,200
38,681
2008
495,629
80,000
1,605,848
–1,494
43,553
2,223,537
11,041
2,200
38,674
2009
1,844,838
0
281,095
–2,097
92,811
2,216,647
11,041
5,200
42,691
2010
2,161,094
0
138,311
–1,421
110,255
2,408,240
11,041
5,200
43,542
2011
2,605,124
0
144,098
–631
152,568
2,901,159
11,041
5,200
44,198
2012
2,669,589
0
11,867
–486
218,296
2,899,266
11,041
5,200
44,751
2013
3,756,158
0
2,177
–962
246,947
4,004,320
11,041
5,200
45,493
2014
4,236,873
0
3,351
–555
239,238
4,478,908
11,041
5,200
46,301
2015
4,241,958
0
2,830
–36
221,448
4,466,199
11,041
5,200
47,567
(continued)
196 108th Annual Report | 2021
Table G.5A—continued
Factors supplying reserve funds
Federal Reserve Bank credit outstanding
Period
Securities held Repurchase
outright1
agreements2
Loans and
other credit
extensions3
Float
Other Federal
Reserve
assets4
Total4
Gold stock
Special
Treasury
drawing rights
coin and
certificate
currency
account
outstanding5
2016
4,221,187
0
7,325
–804
206,551
4,434,259
11,041
5,200
48,536
2017
4,223,528
0
13,914
–920
194,288
4,430,809
11,041
5,200
49,381
2018
3,862,079
0
4,269
–770
173,324
4,038,902
11,041
5,200
49,801
2019
3,739,957
255,619
3,770
–643
156,304
4,155,007
11,041
5,200
50,138
2020
6,730,743
1,000
216,669
–567
393,420
7,341,265
11,041
5,200
50,535
2021
8,270,436
0
77,621
–582
389,982
8,737,457
11,041
5,200
50,942
–625
402,272
7,388,276
11,041
5,200
50,564
2021, month-end
Jan.
6,839,945
1,000
145,684
Feb.
6,985,520
500
144,269
–597
393,338
7,523,030
11,041
5,200
50,567
Mar.
7,129,308
0
146,079
–1,050
395,824
7,670,161
11,041
5,200
50,623
Apr.
7,210,316
0
156,469
–350
397,680
7,764,115
11,041
5,200
50,630
May
7,344,623
0
166,169
–674
387,679
7,897,797
11,041
5,200
50,656
Jun.
7,505,369
0
163,572
–1,062
392,067
8,059,946
11,041
5,200
50,712
Jul.
7,653,186
0
152,843
–366
400,842
8,206,505
11,041
5,200
50,782
Aug.
7,804,616
0
137,533
–634
388,101
8,329,616
11,041
5,200
50,838
Sep.
7,930,202
1
105,518
–699
393,943
8,428,965
11,041
5,200
50,867
Oct.
8,057,413
0
94,879
–604
400,602
8,552,290
11,041
5,200
50,838
Nov.
8,160,850
0
82,038
–632
385,489
8,627,745
11,041
5,200
50,894
Dec.
8,270,436
0
77,621
–582
389,982
8,737,457
11,041
5,200
50,942
Note: Components may not sum to totals because of rounding.
1
Includes U.S. Treasury securities, federal agency debt securities, and mortgage-backed securities. U.S. Treasury securities and federal agency debt
securities include securities lent to dealers, which are fully collateralized by U.S. Treasury securities, federal agency securities, and other highly rated
debt securities.
2
Cash value of agreements, which are collateralized by U.S. Treasury securities, federal agency debt securities, and agency mortgage-backed
securities.
3
From 2020–2021, includes only central bank liquidity swaps; primary, seasonal, and secondary credit; Primary Dealer Credit Facility; Money Market
Mutual Fund Liquidity Facility; Paycheck Protection Program Liquidity Facility; and net portfolio holdings of Commercial Paper Funding Facility II LLC,
Corporate Credit Facilities LLC, MS Facilities LLC (Main Street Lending Program), Municipal Facility LLC, and Term Asset-Backed Securities Loan
Facility II LLC. Money Market Mutual Fund Liquidity Facility and Primary Dealer Credit Facility ceased extending loans on March 31, 2021, and all
outstanding loans were repaid by April 6, 2021, and April 15, 2021, respectively. Commercial Paper Funding Facility II LLC and Corporate Credit
Facilities LLC were terminated on July 8, 2021, and December 17, 2021, respectively. From 2015–19, includes only central bank liquidity swaps;
primary, seasonal, and secondary credit; and net portfolio holdings of Maiden Lane LLC. For disaggregated loans and other credit extensions from
1984–2014, refer to “Table 6B. Loans and other credit extensions, by type, year-end 1984–2014 and month-end 2014” of the 2014 Annual Report.
4
As of 2013, unamortized discounts on securities held outright are included as a component of Other Federal Reserve assets. Previously, they were
included in Other Federal Reserve liabilities and capital.
5
Includes currency and coin (other than gold) issued directly by the U.S. Treasury. The largest components are fractional and dollar coins. For details,
refer to “U.S. Currency and Coin Outstanding and in Circulation,” Treasury Bulletin.
Statistical Tables 197
Table G.5A.—continued
Millions of dollars
Factors absorbing reserve funds
Period
Currency in
circulation
Reverse
repurchase
agreements6
Treasury
cash
holdings7
Deposits with Federal Reserve Banks,
other than reserve balances
Term
deposits
Treasury
Treasury
supplementary
general
financing
account
account
Foreign
Other8
Reserve
Other
balances
Federal
with
Required
Reserve
Federal
clearing
liabilities Reserve
balances9
and
Banks
capital4,10
1984
183,796
0
513
n/a
5,316
n/a
253
867
1,126
5,952
20,693
1985
197,488
0
550
n/a
9,351
n/a
480
1,041
1,490
5,940
27,141
1986
211,995
0
447
n/a
7,588
n/a
287
917
1,812
6,088
46,295
1987
230,205
0
454
n/a
5,313
n/a
244
1,027
1,687
7,129
40,097
1988
247,649
0
395
n/a
8,656
n/a
347
548
1,605
7,683
37,742
1989
260,456
0
450
n/a
6,217
n/a
589
1,298
1,618
8,486
36,713
1990
286,963
0
561
n/a
8,960
n/a
369
528
1,960
8,147
36,081
1991
307,756
0
636
n/a
17,697
n/a
968
1,869
3,946
8,113
25,051
1992
334,701
0
508
n/a
7,492
n/a
206
653
5,897
7,984
25,544
1993
365,271
0
377
n/a
14,809
n/a
386
636
6,332
9,292
27,967
1994
403,843
0
335
n/a
7,161
n/a
250
1,143
4,196
11,959
25,061
1995
424,244
0
270
n/a
5,979
n/a
386
2,113
5,167
12,342
22,960
1996
450,648
0
249
n/a
7,742
n/a
167
1,178
6,601
13,829
17,310
1997
482,327
0
225
n/a
5,444
n/a
457
1,171
6,684
15,500
23,447
1998
517,484
0
85
n/a
6,086
n/a
167
1,869
6,780
16,354
19,164
1999
628,359
0
109
n/a
28,402
n/a
71
1,644
7,481
17,256
16,039
2000
593,694
0
450
n/a
5,149
n/a
216
2,478
6,332
17,962
11,295
2001
643,301
0
425
n/a
6,645
n/a
61
1,356
8,525
17,083
8,469
2002
687,518
21,091
367
n/a
4,420
n/a
136
1,266
10,534
18,977
11,988
2003
724,187
25,652
321
n/a
5,723
n/a
162
995
11,829
19,793
11,054
2004
754,877
30,783
270
n/a
5,912
n/a
80
1,285
9,963
26,378
14,137
2005
794,014
30,505
202
n/a
4,573
n/a
83
2,144
8,651
30,466
10,678
2006
820,176
29,615
252
n/a
4,708
n/a
98
972
6,842
36,231
11,847
2007
828,938
43,985
259
n/a
16,120
n/a
96
1,830
6,614
41,622
13,986
2008
889,898
88,352
259
n/a
106,123
259,325
1,365
21,221
4,387
48,921
855,599
2009
928,249
77,732
239
n/a
186,632
5,001
2,411
35,262
3,020
63,219
973,814
2010
982,750
59,703
177
0
140,773
199,964
3,337
13,631
2,374
99,602
965,712
r
2011
1,075,820
99,900
128
0
85,737
n/a
125
64,909
2,480
72,766
1,559,731
2012
1,169,159
107,188
150
0
92,720
n/ar
6,427
27,476
n/a
66,093
1,491,044
r
2013
1,241,228
315,924
234
0
162,399
n/a
7,970
26,181
n/a
63,049
2,249,070
2014
1,342,957
509,837
201
0
223,452
n/ar
5,242
20,320
n/a
61,447
2,377,995
333,447
r
5,231
31,212
n/a
45,320
1,977,163
2015
1,424,967
712,401
266
0
n/a
(continued)
198 108th Annual Report | 2021
Table G.5A—continued
Factors absorbing reserve funds
Period
Currency in
circulation
Reverse
repurchase
agreements6
Treasury
cash
holdings7
Deposits with Federal Reserve Banks,
other than reserve balances
Term
deposits
Treasury
Treasury
supplementary
general
financing
account
account
Foreign
Other8
Reserve
Other
balances
Federal
with
Required
Reserve
Federal
clearing
liabilities Reserve
balances9
and
Banks
capital4,10
2016
1,509,440
725,210
166
0
399,190
n/ar
5,165
53,248
n/a
46,943
1,759,675
2017
1,618,006
563,958
214
0
228,933
n/ar
5,257
77,762
n/a
47,876
1,954,426
r
2018
1,719,302
304,012
214
0
402,138
n/a
5,245
73,073
n/a
45,007
1,555,954
2019
1,807,740
336,649
171
0
403,853
n/ar
5,182
74,075
n/a
44,867
1,548,849
r
r
2,994,932
2020
2,089,224
216,051
28
0
1,728,569
n/a
21,838
194,327
n/a
163,075
2021
2,236,674
2,183,041
65
0
406,108
n/a
9,331
255,263
n/a
69,766
3,644,277
2021, month-end
Jan.
2,096,648
233,752
48
0
1,611,352
n/a
21,849
197,320
n/a
101,035
3,192,989
Feb.
2,101,933
232,994
84
0
1,414,465
n/a
22,350
254,127
n/a
95,275
3,468,547
Mar.
2,144,066
352,177
89
0
1,121,951
n/a
33,209
315,122
n/a
97,615
3,672,702
Apr.
2,164,017
415,000
47
0
970,716
n/a
28,091
323,889
n/a
99,334
3,829,821
May
2,176,566
715,185
37
0
776,700
n/a
26,786
380,629
n/a
99,732
3,788,989
Jun.
2,183,455
1,260,925
41
0
851,929
n/a
5,255
225,002
n/a
88,536
3,511,630
Jul.
2,186,384
1,321,101
48
0
459,402
n/a
5,589
241,839
n/a
89,592
3,969,425
Aug.
2,190,975
1,479,055
43
0
355,984
n/a
5,323
230,153
n/a
90,110
4,044,863
Sep.
2,197,024
1,905,171
51
0
215,160
n/a
5,706
240,769
n/a
72,753
3,859,245
Oct.
2,205,010
1,801,993
52
0
278,023
n/a
5,607
249,565
n/a
74,563
4,004,419
Nov.
2,221,549
1,833,164
71
0
213,153
n/a
5,344
238,141
n/a
70,688
4,112,633
Dec.
2,236,674
2,183,041
65
0
406,108
n/a
9,331
255,263
n/a
69,766
3,644,277
6
Cash value of agreements, which are collaterized by U.S. Treasury securities, federal agency debt securities, and agency mortgage-backed securities.
Coin and paper currency held by the Treasury.
8
As of 2014, includes deposits of designated financial market utilities.
9
Required clearing balances were discontinued in July 2012.
10
In 2010, includes funds from American International Group, Inc. asset dispositions, held as agent. In 2020 and 2021, includes equity investments
in Commercial Paper Funding Facility II LLC, Corporate Credit Facilities LLC, MS Facilities LLC (Main Street Lending Program), Municipal Facility LLC,
and Term Asset-Backed Securities Loan Facility II LLC.
n/a Not applicable.
r Revised.
7
Statistical Tables 199
Table G.5B. Reserves of depository institutions, Federal Reserve Bank credit, and related items, year-end
1918–1983
Millions of dollars
Factors supplying reserve funds
Period
Securities
held
outright1
Federal Reserve Bank credit outstanding
Other
Repurchase
All
Federal
3
Loans
Float
agreements2
other4
Reserve
assets5
0
1,766
199
294
0
Total
Gold
stock6
Special
drawing
rights
certificate
account
Treasury
coin and
currency
outstanding7
1918
239
2,498
2,873
n/a
1,795
1919
1920
300
287
0
0
2,215
2,687
201
119
575
262
0
0
3,292
3,355
2,707
2,639
n/a
n/a
1,707
1,709
1921
1922
234
436
0
0
1,144
618
40
78
146
273
0
0
1,563
1,405
3,373
3,642
n/a
n/a
1,842
1,958
1923
1924
80
536
54
4
723
320
27
52
355
390
0
0
1,238
1,302
3,957
4,212
n/a
n/a
2,009
2,025
1925
367
8
643
63
378
0
1,459
4,112
n/a
1,977
1926
1927
312
560
3
57
637
582
45
63
384
393
0
0
1,381
1,655
4,205
4,092
n/a
n/a
1,991
2,006
1928
1929
197
488
31
23
1,056
632
24
34
500
405
0
0
1,809
1,583
3,854
3,997
n/a
n/a
2,012
2,022
1930
1931
686
775
43
42
251
638
21
20
372
378
0
0
1,373
1,853
4,306
4,173
n/a
n/a
2,027
2,035
1932
1933
1,851
2,435
4
2
235
98
14
15
41
137
0
0
2,145
2,688
4,226
4,036
n/a
n/a
2,204
2,303
1934
1935
2,430
2,430
0
1
7
5
5
12
21
38
0
0
2,463
2,486
8,238
10,125
n/a
n/a
2,511
2,476
1936
2,430
0
3
39
28
0
2,500
11,258
n/a
2,532
1937
1938
2,564
2,564
0
0
10
4
19
17
19
16
0
0
2,612
2,601
12,760
14,512
n/a
n/a
2,637
2,798
1939
1940
2,484
2,184
0
0
7
3
91
80
11
8
0
0
2,593
2,274
17,644
21,995
n/a
n/a
2,963
3,087
1941
1942
2,254
6,189
0
0
3
6
94
471
10
14
0
0
2,361
6,679
22,737
22,726
n/a
n/a
3,247
3,648
1943
1944
11,543
18,846
0
0
5
80
681
815
10
4
0
0
12,239
19,745
21,938
20,619
n/a
n/a
4,094
4,131
1945
1946
24,262
23,350
0
0
249
163
578
580
2
1
0
0
25,091
24,093
20,065
20,529
n/a
n/a
4,339
4,562
1947
22,559
0
85
535
1
0
23,181
22,754
n/a
4,562
1948
1949
23,333
18,885
0
0
223
78
541
534
1
2
0
0
24,097
19,499
24,244
24,427
n/a
n/a
4,589
4,598
1950
1951
20,725
23,605
53
196
67
19
1,368
1,184
3
5
0
0
22,216
25,009
22,706
22,695
n/a
n/a
4,636
4,709
1952
1953
24,034
25,318
663
598
156
28
967
935
4
2
0
0
25,825
26,880
23,187
22,030
n/a
n/a
4,812
4,894
1954
1955
24,888
24,391
44
394
143
108
808
1,585
1
29
0
0
25,885
26,507
21,713
21,690
n/a
n/a
4,985
5,008
1956
1957
24,610
23,719
305
519
50
55
1,665
1,424
70
66
0
0
26,699
25,784
21,949
22,781
n/a
n/a
5,066
5,146
1958
26,252
95
64
1,296
49
0
27,755
20,534
n/a
5,234
(continued)
200 108th Annual Report | 2021
Table G.5B—continued
Factors supplying reserve funds
Period
Securities
held
outright1
Federal Reserve Bank credit outstanding
Other
Repurchase
All
Federal
3
Loans Float
agreements2
other4
Reserve
assets5
41
458
1,590
75
0
400
33
1,847
74
0
Special
drawing
rights
certificate
account
Treasury
coin and
currency
outstanding7
Total
Gold
stock6
28,771
29,338
19,456
17,767
n/a
n/a
5,311
5,398
1959
1960
26,607
26,984
1961
1962
28,722
30,478
159
342
130
38
2,300
2,903
51
110
0
0
31,362
33,871
16,889
15,978
n/a
n/a
5,585
5,567
1963
1964
33,582
36,506
11
538
63
186
2,600
2,606
162
94
0
0
36,418
39,930
15,513
15,388
n/a
n/a
5,578
5,405
1965
40,478
290
137
2,248
187
0
43,340
13,733
n/a
5,575
1966
1967
43,655
48,980
661
170
173
141
2,495
2,576
193
164
0
0
47,177
52,031
13,159
11,982
n/a
n/a
6,317
6,784
1968
1969
52,937
57,154
0
0
186
183
3,443
3,440
58
64
0
2,743
56,624
63,584
10,367
10,367
n/a
n/a
6,795
6,852
1970
1971
62,142
69,481
0
1,323
335
39
4,261
4,343
57
261
1,123
1,068
67,918
76,515
10,732
10,132
400
400
7,147
7,710
1972
1973
71,119
80,395
111
100
1,981
1,258
3,974
3,099
106
68
1,260
1,152
78,551
86,072
10,410
11,567
400
400
8,313
8,716
1974
1975
84,760
92,789
954
1,335
299
211
2,001
3,688
999
1,126
3,195
3,312
92,208
102,461
11,652
11,599
400
500
9,253
10,218
1976
100,062
4,031
25
2,601
991
3,182
110,892
11,598
1,200
10,810
1977
1978
108,922
117,374
2,352
1,217
265
1,174
3,810
6,432
954
587
2,442
4,543
118,745
131,327
11,718
11,671
1,250
1,300
11,331
11,831
1979
1980
124,507
128,038
1,660
2,554
1,454
1,809
6,767
4,467
704
776
5,613
8,739
140,705
146,383
11,172
11,160
1,800
2,518
13,083
13,427
1981
1982
136,863
144,544
3,485
4,293
1,601
717
1,762
2,735
195
1,480
9,230
9,890
153,136
163,659
11,151
11,148
3,318
4,618
13,687
13,786
1983
159,203
1,592
918
1,605
418
8,728
172,464
11,121
4,618
15,732
Note: For a description of figures and discussion of their significance, see Banking and Monetary Statistics, 1941–1970 (Board of Governors of the
Federal Reserve System, 1976), pp. 507–23. Components may not sum to totals because of rounding.
1
In 1969 and thereafter, includes securities loaned—fully guaranteed by U.S. government securities pledged with Federal Reserve Banks—and
excludes securities sold and scheduled to be bought back under matched sale–purchase transactions. On September 29, 1971, and thereafter,
includes federal agency issues bought outright.
2
On December 1, 1966, and thereafter, includes federal agency obligations held under repurchase agreements.
3
In 1960 and thereafter, figures reflect a minor change in concept; refer to Federal Reserve Bulletin, vol. 47 (February 1961), p. 164.
4
Principally acceptances and, until August 21, 1959, industrial loans, the authority for which expired on that date.
5
For the period before April 16, 1969, includes the total of Federal Reserve capital paid in, surplus, other capital accounts, and other liabilities and
accrued dividends, less the sum of bank premises and other assets, and is reported as “Other Federal Reserve accounts”; thereafter, “Other Federal
Reserve assets” and “Other Federal Reserve liabilities and capital” are shown separately.
6
Before January 30, 1934, includes gold held in Federal Reserve Banks and in circulation.
7
Includes currency and coin (other than gold) issued directly by the Treasury. The largest components are fractional and dollar coins. For details refer
to ‘‘U.S. Currency and Coin Outstanding and in Circulation,’’ Treasury Bulletin.
n/a Not applicable.
Statistical Tables 201
Table G.5B.—continued
Millions of dollars
Period
Currency Treasury
in
cash
circulation holdings8
Factors absorbing reserve funds
Deposits with Federal
Reserve Banks, other than
Other
reserve balances
Federal
Reserve
5
Treasury Foreign Other accounts
Required
clearing
balances
Other
Federal
Reserve
liabilities
and
capital5
Member bank reserves9
1918
4,951
288
51
96
25
118
0
0
With
Federal
Reserve
Banks
1,636
n/a
1,585
51
1919
1920
5,091
5,325
385
218
31
57
73
5
28
18
208
298
0
0
0
0
1,890
1,781
n/a
n/a
1,822
n/a
68
n/a
1921
1922
4,403
4,530
214
225
96
11
12
3
15
26
285
276
0
0
0
0
1,753
1,934
n/a
n/a
1,654
n/a
99
n/a
1923
1924
4,757
4,760
213
211
38
51
4
19
19
20
275
258
0
0
0
0
1,898
2,220
n/a
n/a
1,884
2,161
14
59
1925
4,817
203
16
8
21
272
0
0
2,212
n/a
2,256
–44
1926
1927
4,808
4,716
201
208
17
18
46
5
19
21
293
301
0
0
0
0
2,194
2,487
n/a
n/a
2,250
2,424
–56
63
1928
1929
4,686
4,578
202
216
23
29
6
6
21
24
348
393
0
0
0
0
2,389
2,355
n/a
n/a
2,430
2,428
–41
–73
1930
1931
4,603
5,360
211
222
19
54
6
79
22
31
375
354
0
0
0
0
2,471
1,961
n/a
n/a
2,375
1,994
96
–33
1932
1933
5,388
5,519
272
284
8
3
19
4
24
128
355
360
0
0
0
0
2,509
2,729
n/a
n/a
1,933
1,870
576
859
1934
1935
5,536
5,882
3,029
2,566
121
544
20
29
169
226
241
253
0
0
0
0
4,096
5,587
n/a
n/a
2,282
2,743
1,814
2,844
1936
6,543
2,376
244
99
160
261
0
0
6,606
n/a
4,622
1,984
1937
1938
6,550
6,856
3,619
2,706
142
923
172
199
235
242
263
260
0
0
0
0
7,027
8,724
n/a
n/a
5,815
5,519
1,212
3,205
1939
1940
7,598
8,732
2,409
2,213
634
368
397
1,133
256
599
251
284
0
0
0
0
11,653
14,026
n/a
n/a
6,444
7,411
5,209
6,615
1941
1942
11,160
15,410
2,215
2,193
867
799
774
793
586
485
291
256
0
0
0
0
12,450
13,117
n/a
n/a
9,365
11,129
3,085
1,988
1943
1944
20,449
25,307
2,303
2,375
579
440
1,360
1,204
356
394
339
402
0
0
0
0
12,886
14,373
n/a
n/a
11,650
12,748
1,236
1,625
1945
1946
28,515
28,952
2,287
2,272
977
393
862
508
446
314
495
607
0
0
0
0
15,915
16,139
n/a
n/a
14,457
15,577
1,458
562
1947
1948
28,868
28,224
1,336
1,325
870
1123
392
642
569
547
563
590
0
0
0
0
17,899
20,479
n/a
n/a
16,400
19,277
1,499
1,202
1949
27,600
1,312
821
767
750
706
0
0
16,568
n/a
15,550
1,018
1950
1951
27,741
29,206
1,293
1,270
668
247
895
526
565
363
714
746
0
0
0
0
17,681
20,056
n/a
n/a
16,509
19,667
1,172
389
1952
1953
30,433
30,781
1,270
761
389
346
550
423
455
493
777
839
0
0
0
0
19,950
20,160
n/a
n/a
20,520
19,397
–570
763
1954
1955
30,509
31,158
796
767
563
394
490
402
441
554
907
925
0
0
0
0
18,876
19,005
n/a
n/a
18,618
18,903
258
102
1956
1957
31,790
31,834
775
761
441
481
322
356
426
246
901
998
0
0
0
0
19,059
19,034
n/a
n/a
19,089
19,091
–30
–57
1958
32,193
683
358
272
391
1,122
0
0
18,504
n/a
18,574
–70
Currency
and
Required11 Excess11,12
coin10
(continued)
202 108th Annual Report | 2021
Table G.5B—continued
Factors absorbing reserve funds
Period
Currency Treasury
in
cash
circulation holdings8
Deposits with Federal
Reserve Banks, other than
reserve balances
Treasury Foreign
Other
Other
Federal
Reserve
accounts5
Required
clearing
balances
Other
Federal
Reserve
liabilities
and
capital5
Member bank reserves9
With
Federal
Reserve
Banks
Currency
and
Required11 Excess11,12
coin10
1959
1960
32,591
32,869
391
377
504
485
345
217
694
533
841
941
0
0
0
0
18,174
17,081
310
2,544
18,619
18,988
–135
637
1961
1962
33,918
35,338
422
380
465
597
279
247
320
393
1,044
1,007
0
0
0
0
17,387
17,454
2,823
3,262
20,114
20,071
96
645
1963
1964
37,692
39,619
361
612
880
820
171
229
291
321
1,065
1,036
0
0
0
0
17,049
18,086
4,099
4,151
20,677
21,663
471
574
1965
1966
42,056
44,663
760
1,176
668
416
150
174
355
588
211
–147
0
0
0
0
18,447
19,779
4,163
4,310
22,848
24,321
–238
–232
1967
47,226
1,344
1,123
135
653
–773
0
0
21,092
4,631
25,905
–182
1968
1969
50,961
53,950
695
596
703
1,312
216
134
747
807
–1,353
0
0
0
0
1,919
21,818
22,085
4,921
5,187
27,439
28,173
–700
–901
1970
1971
57,093
61,068
431
460
1,156
2,020
148
294
1,233
999
0
0
0
0
1,986
2,131
24,150
27,788
5,423
5,743
30,033
32,496
–460
1,035
1972
1973
66,516
72,497
345
317
1,855
2,542
325
251
840
1,49113
0
0
0
0
2,143
2,669
25,647
27,060
6,216
6,781
32,044
35,268
98
–1,360
1974
1975
79,743
86,547
185
483
3,113
7,285
418
353
1,27513
1,090
0
0
0
0
2,935
2,968
25,843
26,052
7,370
8,036
37,011
35,197
–3,798
–1,10314
1976
1977
93,717
103,811
460
392
10,393
7,114
352
379
1,357
1,187
0
0
0
0
3,063
3,292
25,158
26,870
8,628
9,421
35,461
37,615
–1,535
–1,265
1978
114,645
240
4,196
368
1,256
0
0
4,275
31,152
10,538
42,694
–893
1979
1980
125,600
136,829
494
441
4,075
3,062
429
411
1,412
617
0
0
0
0
4,957
4,671
29,792
27,456
11,429
13,654
44,217
40,558
–2,835
675
1981
1982
144,774
154,908
443
429
4,301
5,033
505
328
781
1,033
0
0
117
436
5,261
4,990
25,111
26,053
15,576
16,666
42,145
41,391
–1,442
1,328
1983
171,935
479
3,661
191
851
0
1,013
5,392
20,413
17,821
39,179
–945
8
Coin and paper currency held by the Treasury, as well as any gold in excess of the gold certificates issued to the Reserve Bank.
In November 1979 and thereafter, includes reserves of member banks, Edge Act corporations, and U.S. agencies and branches of foreign banks. On
November 13, 1980, and thereafter, includes reserves of all depository institutions.
10
Between December 1, 1959, and November 23, 1960, part was allowed as reserves; thereafter, all was allowed.
11
Estimated through 1958. Before 1929, data were available only on call dates (in 1920 and 1922 the call date was December 29). Since
September 12, 1968, the amount has been based on close-of-business figures for the reserve period two weeks before the report date.
12
For the week ending November 15, 1972, and thereafter, includes $450 million of reserve deficiencies on which Federal Reserve Banks are allowed
to waive penalties for a transition period in connection with bank adaptation to Regulation J as amended, effective November 9, 1972. Allowable
deficiencies are as follows (beginning with first statement week of quarter, in millions): 1973—Q1, $279; Q2, $172; Q3, $112; Q4, $84;
1974—Q1, $67; Q2, $58. The transition period ended with the second quarter of 1974.
13
For the period before July 1973, includes certain deposits of domestic nonmember banks and foreign-owned banking institutions held with member
banks and redeposited in full with Federal Reserve Banks in connection with voluntary participation by nonmember institutions in the Federal
Reserve System program of credit restraint. As of December 12, 1974, the amount of voluntary nonmember bank and foreign-agency and branch
deposits at Federal Reserve Banks that are associated with marginal reserves is no longer reported. However, two amounts are reported:
(1) deposits voluntarily held as reserves by agencies and branches of foreign banks operating in the United States and (2) Eurodollar liabilities.
14
Adjusted to include waivers of penalties for reserve deficiencies, in accordance with change in Board policy, effective November 19, 1975.
n/a Not applicable.
9
Statistical Tables 203
Table G.6. Principal assets and liabilities of insured commercial banks, by class of bank,
June 30, 2021 and 2020
Millions of dollars, except as noted
Member banks
Item
Total
Total
National
State
Nonmember
banks
14,678,776
11,645,915
9,396,565
2,249,351
3,032,861
9,605,477
7,286,717
5,832,211
1,454,506
2,318,760
9,602,707
7,285,655
5,831,453
1,454,202
2,317,052
5,073,300
4,359,198
3,564,354
794,845
714,101
U.S. government securities
1,138,339
1,086,636
977,334
109,302
51,703
Other
3,934,961
3,272,562
2,587,020
685,542
662,399
2021
Loans and investments
Loans, gross
Net
Investments
Cash assets, total
Deposits, total
Interbank
Other transactions
Other nontransactions
Equity capital
Number of banks
2,688,909
2,288,041
1,729,892
558,149
400,868
15,882,719
12,860,017
10,322,384
2,537,633
3,022,702
314,706
290,024
240,088
49,937
24,682
4,969,801
4,048,947
3,077,326
971,621
920,854
10,598,212
8,521,046
7,004,971
1,516,075
2,077,167
2,150,922
1,742,540
1,418,401
324,139
408,381
4,327
1,446
754
692
2,881
13,765,027
10,954,457
8,914,500
2,039,957
2,810,570
9,770,773
7,475,330
6,062,612
1,412,718
2,295,442
9,767,267
7,473,435
6,061,184
1,412,251
2,293,832
3,994,254
3,479,127
2,851,888
627,239
515,127
2020
Loans and investments
Loans, gross
Net
Investments
U.S. government securities
Other
Cash assets, total
Deposits, total
Interbank
Other transactions
Other nontransactions
Equity capital
Number of banks
796,738
757,345
668,668
88,677
39,393
3,197,516
2,721,782
2,183,220
538,562
475,734
2,189,495
1,895,397
1,516,092
379,304
294,098
14,393,534
11,725,835
9,593,340
2,132,494
2,667,699
305,176
282,163
235,738
46,425
23,013
2,865,179
2,362,351
1,718,761
643,590
502,828
11,223,179
9,081,321
7,638,841
1,442,480
2,141,858
2,008,374
1,632,683
1,330,807
301,876
375,691
4,421
1,479
778
701
2,942
Note: Includes U.S.-insured commercial banks located in the United States but not U.S.-insured commercial banks operating in U.S. territories or possessions. Data are domestic assets and liabilities (except for those components reported on a consolidated basis only). Components may not sum to
totals because of rounding. Data for 2020 have been revised.
204 108th Annual Report | 2021
Table G.7. Initial margin requirements under
Regulations T, U, and X
Percent of market value
Effective date
Margin stocks Convertible bonds
Short sales,
T only1
1934, Oct. 1
25–45
n/a
n/a
1936, Feb. 1
25–55
n/a
n/a
1936, Apr. 1
55
n/a
n/a
1937, Nov. 1
40
n/a
50
1945, Feb. 5
50
n/a
50
1945, July 5
75
n/a
75
1946, Jan. 21
100
n/a
100
1947, Feb. 1
75
n/a
75
1949, Mar. 3
50
n/a
50
1951, Jan. 17
75
n/a
75
1953, Feb. 20
50
n/a
50
1955, Jan. 4
60
n/a
60
1955, Apr. 23
70
n/a
70
1958, Jan. 16
50
n/a
50
1958, Aug. 5
70
n/a
70
1958, Oct. 16
90
n/a
90
1960, July 28
70
n/a
70
1962, July 10
50
n/a
50
1963, Nov. 6
70
n/a
70
1968, Mar. 11
70
50
70
1968, June 8
80
60
80
1970, May 6
65
50
65
1971, Dec. 6
55
50
55
1972, Nov. 24
65
50
65
1974, Jan. 3
50
50
50
Note: These regulations, adopted by the Board of Governors pursuant
to the Securities Exchange Act of 1934, limit the amount of credit
that may be extended for the purpose of purchasing or carrying
margin securities (as defined in the regulations) when the loan is collateralized by such securities. The margin requirement, expressed as
a percentage, is the difference between the market value of the securities being purchased or carried (100 percent) and the maximum
loan value of the collateral as prescribed by the Board. Regulation T
was adopted effective October 1, 1934; Regulation U, effective
May 1, 1936; and Regulation X, effective November 1, 1971. The
former Regulation G, which was adopted effective March 11, 1968,
was merged into Regulation U, effective April 1, 1998.
1
From October 1, 1934, to October 31, 1937, the requirement was
the margin “customarily required” by the brokers and dealers.
n/a Not applicable.
Statistical Tables 205
Table G.8A. Statement of condition of the Federal Reserve Banks, by Bank, December 31, 2021 and 2020
Millions of dollars
Total
Item
2021
Boston
2020
2021
New York
2020
2021
Philadelphia
2020
Cleveland
2021
2020
2021
Richmond
2020
2021
2020
Assets
Gold certificates
11,037
11,037
335
337
3,604
3,665
313
319
515
524
775
753
Special drawing rights
certificates
5,200
5,200
196
196
1,818
1,818
210
210
237
237
412
412
Coin
1,232
1,563
13
31
22
39
114
130
47
86
180
206
Loans and securities
Loans to depository
institutions
Other loans
Securities purchased under
agreements to resell1
Treasury securities, net
2, 3
Federal agency and
government-sponsored
enterprise mortgagebacked securities, net2
Government-sponsored
enterprise debt
securities, net2, 3
Total loans and securities
555
1,602
32
62
0
876
15
10
0
1
18
49
33,853
54,535
15
4,773
4,713
8,615
48
6,264
6,435
1,559
494
3,083
0
1,000
0
22
0
518
0
23
0
31
0
63
5,917,426 4,955,871
98,885
111,293 3,344,861 2,565,941
124,981
113,067
215,312
155,054
396,515
310,605
2,685,268 2,109,715
44,873
47,378 1,517,864 1,092,321
56,715
48,132
97,706
66,006
179,935
132,224
2,634
44
8,639,712 7,125,357
2,610
143,849
1,364
55
60
95
82
175
165
163,587 4,868,913 3,669,635
59
1,475
181,814
167,557
319,548
222,733
577,137
446,189
Consolidated variable
interest entities: Assets
held, net4
40,171
140,335
29,707
51,790
10,465
88,545
n/a
n/a
n/a
n/a
n/a
n/a
Accrued interest
receivable - System
Open Market Account
30,976
30,057
519
677
17,499
15,548
655
687
1,130
945
2,082
1,895
Foreign currency
denominated
investments, net5
20,330
22,204
923
1,054
6,832
7,462
730
799
1,758
1,897
4,231
4,687
Central bank liquidity
swaps6
3,340
17,883
152
849
1,122
6,010
120
644
289
1,528
695
3,775
Bank premises and
equipment, net
2,610
2,596
108
110
489
491
167
146
138
139
335
355
Items in process of
collection
76
132
0
*
0
*
0
*
0
*
0
*
Deferred asset remittances to
the Treasury
0
926
0
0r
0
1,055
0
3
0
0r
0
0r
Interdistrict settlement account
0
0r
53,573
−4,919
−675,247
167,835
11,693
−8,481
29,613
86,860
119,685
108,472
1,715
2,603
58
1,570
756
229
16
26
75
51
214
178
229,433
r
353,350
r
705,746
566,922r
Other assets
All other assets
Total assets
7
8,756,399 7,359,893
215,282
4,236,273 3,962,332
195,832
162,039
315,000
(continued)
206 108th Annual Report | 2021
Table G.8A—continued
Item
Total
2021
Boston
2020
New York
Philadelphia
Cleveland
Richmond
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
79,284
66,817
750,189
705,757
72,804
61,623
114,939
101,042
172,027
164,169
Liabilities
Federal Reserve notes
outstanding
Less: Notes held by Federal
Reserve Bank
2,436,967 2,192,130
151,855
6,315
4,534
51,657
30,162
10,590
5,594
10,983
7,610
16,921
12,910
Federal Reserve notes
outstanding, net
249,828
2,187,139 2,040,275
72,969
62,283
698,532
675,595
62,214
56,029
103,956
93,432
155,106
151,259
Securities sold under
agreements to
repurchase1
2,183,041
216,051
36,480
4,852 1,233,977
111,862
46,108
4,929
79,432
6,760
146,281
13,541
107,297 1,810,633 1,274,441
85,730
99,375
165,462
207,045
394,655
392,342
n/a
n/a
n/a
n/a
n/a
n/a
78,244
1
1
258
4,020
647
774
109,158 2,278,652 3,081,254
85,731
99,376
165,720
211,065
395,302
393,116
Deposits
Depository institutions
3,644,277 2,994,932
103,751
Treasury, general account
406,108 1,728,569
n/a
n/a
Other deposits8
264,593
217,665
19
1,861
4,314,978 4,941,166
103,770
Total deposits
406,108 1,728,569
61,911
Other liabilities
Accrued remittances to the
Treasury9
4,384
0
51
12r
2,944
0
69
0
32
13r
325
45r
Deferred credit items
659
698
0
0
0
0
0
0
0
0
0
0
Consolidated variable
interest entities: Other
liabilities
156
213
152
187
4
26
n/a
n/a
n/a
n/a
n/a
n/a
Deposit - Treasury funding
of lending facility credit
protection
All other liabilities10
Total liabilities
0
1,500
0
1,500
0
0
n/a
n/a
n/a
n/a
n/a
n/a
5,579
10,143
200
410
2,262
4,876
202
297
236
340
578
799
8,695,936 7,210,046
213,622
178,402r 4,216,371 3,873,613
194,324
160,631
349,376
311,610r
697,592
558,760r
(continued)
Statistical Tables 207
Table G.8A—continued
Item
Total
2021
Boston
2020
New York
2021
2020
1,459
1,470
2021
Philadelphia
2020
Cleveland
Richmond
2021
2020
2021
2020
2021
2020
1,256
1,163
3,311
2,800
6,793
6,738
Capital accounts
Capital paid-in
Surplus (including
accumulated other
comprehensive loss)
33,877
32,376
11,797
10,880
6,785
6,825
292
310
2,363
2,294
252
245
663
590
1,361
1,420
Total Reserve Bank capital
40,662
39,201
1,751
1,780
14,160
13,174
1,508
1,408
3,974
3,390
8,154
8,158
Consolidated variable
interest entities formed
to administer credit and
liquidity facilities:
Non-controlling interest
19,801
110,646
14,060
35,098
5,742
75,548
n/a
n/a
n/a
n/a
n/a
n/a
Total Reserve Bank capital
and consolidated
variable interest entities
non-controlling interest
60,463
149,847
15,811
36,878
19,902
88,722
1,508
1,408
3,974
3,390
8,154
8,158
8,756,399 7,359,893
229,433
215,268
4,236,273 3,962,335
195,832
162,039
353,350
314,987
705,746
566,873
Total liabilities and
capital accounts
Note: Components may not sum to totals because of rounding.
1
Contract amount of agreements.
2
Treasury securities, Government-sponsored enterprise debt securities, and Federal agency and government-sponsored enterprise mortgage-backed
are presented at amortized cost, net of unamortized premiums and unamortized discounts. Prior year unamortized premiums and unamortized discounts were reclassified to align with current year presentation.
3
Treasury securities and Government-sponsored debt securities may be lent to primary dealers to facilitate the effective conduct of open market
operations. Holdings are presented net of securities lent.
4
The Federal Reserve Bank of Boston is the primary beneficiary of MS Facilities LLC (Main Street Lending Program), and the Federal Reserve Bank of
New York is the primary beneficiary of Commercial Paper Funding Facility LLC, Corporate Credit Facilities LLC, Municipal Liquidity Facility LLC, and
Term Asset-Backed Securities Loan Facility II LLC. As a result, the accounts and results of operations of those LLCs are included in the combined
financial statements of the Federal Reserve Banks.
5
Valued daily at market exchange rates.
6
Dollar value of foreign currency held under these agreements valued at the exchange rate to be used when the foreign currency is returned to the
foreign central bank. This exchange rate equals the market exchange rate used when the foreign currency was acquired from the foreign
central bank.
7
Includes depository institution overdrafts. In 2021, furniture and equipment is reported in bank premises and equipment, net. Prior year furniture
and equipment was reclassified to align with current year presentation.
8
Includes deposits of government-sponsored enterprises (GSEs), international and designated financial market utilities. Also includes certain deposit
accounts for services provided by the Reserve banks as fiscal agents of the United States. In 2021, includes foreign official deposit accounts. Prior
year foreign official deposit accounts were reclassified to align with current year presentation.
9
Represents the estimated weekly remittances to the U.S. Treasury.
10
Includes accrued benefit costs and cash collateral posted by counterparties under commitments to purchase and sell federal agency and GSE MBS.
* Less than $500,000.
n/a Not applicable.
r Revised.
208 108th Annual Report | 2021
Table G.8A. Statement of condition of the Federal Reserve Banks, by Bank, December 31, 2021 and
2020—continued
Millions of dollars
Item
Atlanta
2021
Chicago
2020
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Assets
Gold certificates
1,534
1,529
712
713
325
329
183
180
302
297
938
920
1,501
1,471
Special drawing rights
certificates
654
654
424
424
150
150
90
90
153
153
282
282
574
574
Coin
110
154
227
258
18
33
33
43
88
106
154
183
226
293
Loans and securities
Loans to depository
institutions
50
37
161
95
0
1
10
10
23
16
10
47
236
398
Other Loans, net
82
2,120
85
1,403
389
1,383
12,232
7,945
445
4,451
211
1,865
8,706
11,073
0
74
0
16
0
48
0
124
Securities purchased under
agreements to resell1
56
0
16
0
9
0
Treasury securities, net2, 3
346,715 365,230 322,915 276,809
77,147
78,302
45,787
46,837
78,579
78,809 261,678 238,843 604,051 615,084
Federal agency and
government-sponsored
enterprise mortgagebacked securities, net2
157,336 155,478 146,536 117,838
35,009
33,332
20,778
19,938
35,658
33,549 118,747 101,676 274,112 261,841
34
42
20
25
35
504,336 523,133 469,839 396,348 112,579 113,076
78,827
Government-sponsored
enterprise debt
securities, net2, 3
Total loans and securities
Consolidated variable
interest entities: Assets
held, net4
Accrued interest
receivable - System
Open Market Account
153
194
142
147
42
115
127
266
327
74,764 114,740 116,883 380,761 342,606 887,371 888,847
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
1,814
2,213
1,690
1,677
404
475
240
284
411
478
1,369
1,446
3,164
3,732
Foreign currency
denominated
investments, net5
920
1,101
797
862
387
364
173
174
220
234
366
264
2,994
3,306
Central bank liquidity
swaps6
151
887
131
694
64
293
28
140
36
189
60
212
492
2,663
Bank premises and
equipment, net
213
217
206
205
103
106
108
97
246
249
242
239
254
242
Items in process of
collection
76
132
0
*
0
0
*
0
0r
0
17
0
0
0r
97,915 −112,353 135,797
5,189
Other assets
Deferred asset remittances to
the Treasury
Interdistrict settlement account
All other assets
Total assets
7
59
68
34
33
*
11
27,887 −19,246
100
607,782 417,735r 609,857 406,420 142,017
91
*
0
*
9
2,942 −12,985
111
95,682 82,735
77
0
0
*
2
29,550 −12,766
117
113
0
0
*
24
85,680 −31,818
38
39
80,913 −165,789
134
132
62,873 145,863 105,938 469,890 314,397 977,623 735,471r
(continued)
Statistical Tables 209
Table G.8A—continued
Item
Atlanta
2021
Chicago
2020
2021
St. Louis
Minneapolis
Kansas City
Dallas
2021
San Francisco
2020
2021
2020
2021
2020
2021
2020
2020
2021
2020
360,449 302,765 144,134 142,287
70,794
63,686
38,061
63,247
63,274
59,920 220,480 186,470 350,532 301,347
Liabilities
Federal Reserve notes
outstanding
Less: Notes held by Federal
Reserve Bank
9,680
5,845
4,660
4,873
2,680
7,313
Federal Reserve notes
outstanding, net
32,723
21,798
22,227
327,726 280,967 121,907 132,607
64,949
59,026
33,188
33,567
55,961
Securities sold under
agreements to
repurchase1
127,909
12,067
28,461
3,414
16,892
2,042
28,989
149,017 114,835 170,267 140,534
15,922 119,129
4,736
27,361
13,854
53,020
33,638
55,184 193,119 172,616 297,512 267,709
3,436
96,538
10,412 222,845
26,815
Deposits
Depository institutions
47,564
32,260
31,247
26,641
57,295
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2,806 196,455 119,071
11
2
983
88
2,951
6,324
758
4,447
71
27
149,544 117,641 366,722 259,605
47,575
32,262
32,230
26,729
60,246
67
0
55
Treasury, general account
n/a
Other deposits8
527
Total deposits
n/a
n/a
40,311 178,123 125,751 450,533 434,101
46,635 178,881 130,198 450,604 434,128
Other liabilities
Accrued remittances to the
Treasury9
251
68r
148
0
34
0
Deferred credit items
659
696
0
0
0
0
Consolidated variable
interest entities: Other
liabilities
n/a
n/a
n/a
n/a
n/a
n/a
*
n/a
0
n/a
*
n/a
0
90
0
318
57r
3
0
0
0
0
n/a
n/a
n/a
n/a
n/a
Deposit - Treasury funding
of lending facility credit
protection
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
All other liabilities10
370
668
410
604
179
236r
153
200r
193
257
285
463r
514
989
606,459 415,962r 608,316 404,883 141,198 94,938r
82,530
Total liabilities
62,538 145,444 105,515 468,913 313,689 971,793 729,698r
(continued)
210 108th Annual Report | 2021
Table G.8A—continued
Item
Atlanta
2021
Chicago
2020
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
1,284
1,269
682
616
171
275
349
350
814
583
4,857
4,768
Capital accounts
Capital paid-in
Surplus (including
accumulated other
comprehensive loss)
1,102
1,464
221
309
257
267
137
130
34
58
70
74
163
123
973
1,005
Total Reserve Bank capital
1,323
1,773
1,541
1,536
819
746
205
333
419
424
977
706
5,830
5,773
Consolidated variable
interest entities formed
to administer credit and
liquidity facilities:
Non-controlling interest
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Total Reserve Bank capital
and consolidated
variable interest entities
non-controlling interest
1,323
1,773
1,541
1,536
819
746
205
333
419
424
977
706
5,830
5,773
607,782 417,735r 609,857 406,419 142,017 95,684r
82,735
Total liabilities and
capital accounts
62,871 145,863 105,939 469,890 314,395 977,623 735,471r
Note: Components may not sum to totals because of rounding.
1
Contract amount of agreements.
2
Treasury securities, Government-sponsored enterprise debt securities, and Federal agency and government-sponsored enterprise mortgage-backed
are presented at amortized cost, net of unamortized premiums and unamortized discounts. Prior year unamortized premiums and unamortized discounts were reclassified to align with current year presentation.
3
Treasury securities and Government-sponsored debt securities may be lent to primary dealers to facilitate the effective conduct of open market
operations. Holdings are presented net of securities lent.
4
The Federal Reserve Bank of Boston is the primary beneficiary of MS Facilities LLC (Main Street Lending Program), and the Federal Reserve Bank of
New York is the primary beneficiary of Commercial Paper Funding Facility LLC, Corporate Credit Facilities LLC, Municipal Liquidity Facility LLC, and
Term Asset-Backed Securities Loan Facility II LLC. As a result, the accounts and results of operations of those LLCs are included in the combined
financial statements of the Federal Reserve Banks.
5
Valued daily at market exchange rates.
6
Dollar value of foreign currency held under these agreements valued at the exchange rate to be used when the foreign currency is returned to the
foreign central bank. This exchange rate equals the market exchange rate used when the foreign currency was acquired from the foreign
central bank.
7
Includes depository institution overdrafts. In 2021, furniture and equipment is reported in bank premises and equipment, net. Prior year furniture
and equipment was reclassified to align with current year presentation.
8
Includes deposits of government-sponsored enterprises (GSEs), international and designated financial market utilities. Also includes certain deposit
accounts for services provided by the Reserve Banks as fiscal agents of the United States. In 2021, includes foreign official deposit accounts. Prior
year foreign official deposit accounts were reclassified to align with current year presentation.
9
Represents the estimated weekly remittances to the U.S. Treasury.
10
Includes accrued benefit costs and cash collateral posted by counterparties under commitments to purchase and sell federal agency and GSE MBS.
* Less than $500,000.
n/a Not applicable.
r Revised.
Statistical Tables 211
Table G.8B. Statement of condition of the Federal
Reserve Banks, December 31, 2021 and 2020
Supplemental information—collateral held against
Federal Reserve notes: Federal Reserve agents’
accounts
Millions of dollars
Item
Federal Reserve notes outstanding
Less: Notes held by Federal Reserve
Banks not subject to collateralization
Collateralized Federal Reserve notes
2021
2020
2,436,967
2,192,130
249,828
151,855
2,187,139
2,040,275
11,037
11,037
5,200
5,200
Collateral for Federal Reserve notes
Gold certificates
Special drawing rights certificates
U.S. Treasury securities
Total collateral
1
1
2,170,902
2,024,038
2,187,139
2,040,275
Face value. Includes compensation to adjust for the effect of inflation on the original face value of inflation-indexed securities.
212 108th Annual Report | 2021
Table G.9. Income and expenses of the Federal Reserve Banks, by Bank, 2021
Thousands of dollars
Item
Total
Boston
New York
Philadelphia
Cleveland
Richmond
Current income
Interest income
Primary, secondary, and
seasonal loans
Other loans, net
Interest income on securities
purchased under agreements
to resell
1,879
59
627
108
0
33
226,773
5,996
31,976
11,174
31,096
6,511
565
13
293
13
18
35
Treasury securities, net
92,610,283
1,675,573
51,290,598
1,993,732
3,256,152
6,109,103
Federal agency and governmentsponsored enterprise
mortgage-backed securities, net
29,618,781
541,483
16,357,574
639,289
1,036,420
1,949,602
Government-sponsored enterprise
debt securities, net
133,987
2,471
73,823
2,898
4,670
8,804
Foreign currency denominated
investments, net
−44,809
−2,057
−15,058
−1,610
−3,864
−9,358
7,293
343
2,451
262
625
1,535
122,554,752
2,223,881
67,742,284
2,645,866
4,325,117
8,066,265
Central bank liquidity swaps1
Total interest income
Income from priced services
456,257
0
133,470
0
0
0
Securities lending fees
28,780
551
15,688
629
985
1,876
Other income
18,706
306
11,310
354
564
1,067
Total other income
Total current income
503,743
857
160,468
983
1,549
2,943
123,058,495
2,224,738
67,902,752
2,646,849
4,326,666
8,069,208
Net expenses
Salaries and other benefits
3,889,706
251,740
816,948
159,295
191,336
544,812
Building
318,190
31,931
67,735
14,351
16,719
35,249
Equipment
231,296
9,551
20,856
8,338
8,728
103,701
Software costs
357,046
8,030
35,748
4,043
11,109
196,517
−330,906
−41,029
−23,305
−20,493
−6,925
−51,790
−104,236
−14,447
−20,926
−439
−11,573
−3,737
730,576
125,379
272,121
54,564
48,830
−393,591
5,091,672
371,155
1,169,177
219,659
258,224
431,161
954,132
0
954,132
0
0
0
Recoveries
Expenses capitalized
2
Other expenses
Total operating expenses before
pension expense and
reimbursements
3
System pension service costs
Reimbursable services to
government agencies
−786,316
−5,992
−187,011
−2,658
−79,561
−27,990
Operating expenses
5,259,488
365,163
1,936,298
217,001
178,663
403,171
414,273
6,923
234,170
8,750
15,074
27,760
5,332,558
113,761
2,784,931
136,410
241,173
418,908
1,608
31
878
34
55
104
11,007,927
485,878
4,956,277
362,195
434,965
849,943
112,050,568
1,738,860
62,946,475
2,284,654
3,891,701
7,219,265
Interest expense on securities sold
under agreements to repurchase
Interest to depository institutions
and others
Other expenses
Net expenses
Current net income
(continued)
Statistical Tables 213
Table G.9—continued
Item
Total
Boston
New York
Philadelphia
Cleveland
Richmond
0
2
Additions to (+) and deductions from (−) current net income
Profit on sales of Treasury securities
Losses on sales of federal agency
and government-sponsored
enterprise mortgage-backed
securities
23
0
13
0
−34,920
−1,231
−14,384
−928
−696
−1,851
−1,856,034
−86,538
−623,734
−66,734
−159,372
−389,530
Other components of net
benefit cost
366,295
−184
356,877
−25
−659
8,113
Net additions or deductions
−12,882
−8
−11,535
−8
−12
−539
−1,537,518
−87,961
−292,763
−67,695
−160,739
−383,805
Foreign currency translation (losses)
Net additions or deductions to
current net income
Assessments by Board
Board expenditures4
970,000
43,823
325,476
35,742
84,840
201,017
1,035,105
43,295
213,019
40,832
64,191
91,795
627,500
28,485
210,484
23,209
54,946
130,008
2,632,605
115,603
748,979
99,783
203,977
422,820
975,095
804,156
170,939
0
0
0
Non-controlling interest in
consolidated variable interest
entities (income), net
−926,873
−787,991
−138,882
0
0
0
Reserve Bank and consolidated
variable interest entities net
income before providing for
remittances to the Treasury
107,928,666
1,551,461
61,936,791
2,117,175
3,526,985
6,412,639
Earnings remittances to the Treasury
109,024,672
1,544,170
63,221,175
2,102,326
3,418,006
6,393,101
−1,096,006
7,291
−1,284,384
14,849
108,980
19,538
1,639,423
870
1,529,969
13,115
12,918
27,865
543,417
8,161
245,585
27,964
121,898
47,403
583,417
25,776
176,264
21,374
48,880
107,258
Cost of currency
Consumer Financial Protection
Bureau5
Assessments by the Board of
Governors
Consolidated variable interest entities
Net income from consolidated
variable interest entities
Net income after providing for
remittances to the Treasury
Other comprehensive income (loss)
Comprehensive income
Distribution of comprehensive income
Dividends on capital stock
Transferred to/from surplus and
change in accumulated other
comprehensive income
−40,000
−17,615
69,320
6,590
73,018
−59,854
Earnings remittances to the Treasury
109,024,672
1,544,170
63,221,175
2,102,326
3,418,006
6,393,101
Total distribution of
comprehensive income
109,568,089
1,552,331
63,466,759
2,130,290
3,539,904
6,440,505
Note: Components may not sum to totals because of rounding.
1
Represents interest income recognized on swap agreements with foreign central banks.
2
Includes expenses for labor and materials capitalized and depreciated or amortized as charges to activities in the periods benefited.
3
Reflects the effect of the Financial Accounting Standards Board’s Codification Topic (ASC 715) Compensation-Retirement Benefits. Pension service
costs for the System Retirement Plan is recorded on behalf of the System in the books of the Federal Reserve Bank of New York.
4
For additional details, see the Board of Governors Financial Statements at https://www.federalreserve.gov/aboutthefed/audited-annual-financialstatements.htm.
5
The Board of Governors assesses the Reserve Banks to fund the operations of the Consumer Financial Protection Bureau. These assessments are
allocated to each Reserve Bank based on each Reserve Bank’s capital and surplus balances as of the most recent quarter.
214 108th Annual Report | 2021
Table G.9. Income and expenses of the Federal Reserve Banks, by Bank, 2021—continued
Thousands of dollars
Item
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
81
150
6
29
38
66
682
3,755
2,892
3,428
60,347
8,639
3,742
57,215
Current income
Interest income
Primary, secondary, and
seasonal loans
Other loans, net
Interest income on securities
purchased under agreements
to resell
42
32
9
5
9
27
70
Treasury securities, net
5,762,651
5,082,370
1,268,919
754,739
1,288,210
4,183,856
9,944,381
Federal agency and governmentsponsored enterprise
mortgage-backed securities, net
1,857,736
1,626,704
408,519
243,051
414,553
1,341,958
3,201,893
Government-sponsored enterprise
debt securities, net
8,459
7,363
1,858
1,106
1,885
6,085
14,565
−2,075
−1,752
−823
−374
−482
−740
−6,617
356
284
123
58
77
95
1,084
7,631,005
6,718,043
1,682,039
1,058,961
1,712,929
5,535,089
13,213,273
Foreign currency denominated
investments, net
Central bank liquidity swaps1
Total interest income
Income from priced services
230,672
92,115
0
0
0
0
0
Securities lending fees
1,871
1,586
409
244
414
1,321
3,207
Other income
1,043
899
230
137
235
749
1,812
Total other income
Total current income
233,586
94,600
639
381
649
2,070
5,019
7,864,591
6,812,643
1,682,678
1,059,342
1,713,578
5,537,159
13,218,292
Net expenses
Salaries and other benefits
296,023
324,166
239,645
174,529
301,959
212,756
376,498
Building
18,920
32,151
17,715
12,765
19,698
20,500
30,456
Equipment
14,454
13,154
5,890
4,908
11,798
11,306
18,613
Software costs
16,855
7,037
6,735
3,516
31,249
7,411
28,797
Recoveries
−7,905
−22,886
−9,694
−15,323
−43,139
−31,832
−56,586
Expenses capitalized2
Other expenses
Total operating expenses before
pension expense and
reimbursements
3
System pension service costs
−1,797
−4,132
−2,534
−8,358
−19,016
−2,310
−14,969
171,149
80,485
186,340
16,665
33,748
45,921
88,964
507,699
429,975
444,097
188,702
336,297
263,752
471,773
0
0
0
0
0
0
0
Reimbursable services to
government agencies
−28,669
−3,403
−262,239
−42,870
−123,500
−20,163
−2,260
Operating expenses
479,030
426,572
181,858
145,832
212,797
243,589
469,513
24,273
22,607
5,401
3,205
5,501
18,320
42,289
183,042
428,403
59,333
44,332
67,425
195,031
659,809
104
89
23
14
24
74
178
686,449
877,671
246,615
193,383
285,747
457,014
1,171,789
7,178,142
5,934,972
1,436,063
865,959
1,427,831
5,080,145
12,046,503
Interest expense on securities sold
under agreements to repurchase
Interest to depository institutions
and others
Other expenses
Net expenses
Current net income
(continued)
Statistical Tables 215
Table G.9—continued
Item
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Additions to (+) and deductions from (−) current net income
Profit on sales of Treasury securities
Profit Losses on sales of federal
agency and governmentsponsored enterprise
mortgage-backed securities
1
1
0
0
0
1
2
−3,749
−2,050
−767
−463
−759
−1,992
−6,048
−88,765
−72,342
−32,401
−15,040
−19,779
−26,667
−275,132
Other components of net
benefit cost
1,526
−1,008
3,167
555
−4,001
3,283
−1,349
Net additions or deductions
−385
−24
−283
3
9
−39
−60
−91,372
−75,423
−30,284
−14,945
−24,530
−25,414
−282,587
Foreign currency translation (losses)
Net additions or deductions to
current net income
Assessments by Board
Board expenditures4
43,896
37,883
18,322
6,945
10,563
18,841
142,650
152,215
90,103
32,839
19,865
33,526
96,006
157,419
Consumer Financial Protection
Bureau5
28,467
24,477
11,787
4,351
6,830
12,184
92,274
Assessments by the Board of
Governors
224,578
152,463
62,948
31,161
50,919
127,031
392,343
Net income from consolidated
variable interest entities
0
0
0
0
0
0
0
Non-controlling interest in
consolidated variable interest
entities (income), net
0
0
0
0
0
0
0
Reserve Bank and consolidated
variable interest entities net
income before providing for
remittances to the Treasury
6,862,191
5,707,086
1,342,831
819,852
1,352,382
4,927,701
11,371,572
Earnings remittances to the Treasury
6,930,134
5,693,612
1,319,510
850,941
1,352,939
4,879,302
11,319,456
−67,943
13,474
23,321
−31,089
−557
48,399
52,115
9,588
6,912
−350
15,555
10,635
11,219
1,126
−58,355
20,386
22,971
−15,534
10,078
59,618
53,242
29,586
30,611
16,155
8,349
13,887
19,615
85,662
Cost of currency
Consolidated variable interest entities
Net income after providing for
remittances to the Treasury
Other comprehensive income (loss)
Comprehensive income
Distribution of comprehensive income
Dividends on capital stock
Transferred to/from surplus and
change in accumulated other
comprehensive income
−87,941
−10,225
6,817
−23,883
−3,809
40,002
−32,420
Earnings remittances to the Treasury
6,930,134
5,693,612
1,319,510
850,941
1,352,939
4,879,302
11,319,456
Total distribution of
comprehensive income
6,871,779
5,713,998
1,342,482
835,407
1,363,017
4,938,919
11,372,698
Note: Components may not sum to totals because of rounding.
1
Represents interest income recognized on swap agreements with foreign central banks.
2
Includes expenses for labor and materials capitalized and depreciated or amortized as charges to activities in the periods benefited.
3
Reflects the effect of the Financial Accounting Standards Board’s Codification Topic (ASC 715) Compensation-Retirement Benefits. Pension service
costs for the System Retirement Plan is recorded on behalf of the System in the books of the Federal Reserve Bank of New York.
4
For additional details, see the Board of Governors Financial Statements at https://www.federalreserve.gov/aboutthefed/audited-annual-financialstatements.htm.
5
The Board of Governors assesses the Reserve Banks to fund the operations of the Consumer Financial Protection Bureau. These assessments are
allocated to each Reserve Bank based on each Reserve Bank’s capital and surplus balances as of the most recent quarter.
216 108th Annual Report | 2021
Table G.10. Income and expenses of the Federal Reserve Banks, 1914–2021
Thousands of dollars
Transferred
to/from
surplus
Consumer Other
and
compreTransferred
Financial
Dividends
change in
Protection hensive
Interest on to/from
paid
accumu5
income
Costs of Bureau
Statutory Federal surplus
lated
4
currency and Office (loss)
transfers Reserve
other
of
notes
compreFinancial
hensive
3
Research
income6
Assessments by the
Board of Governors
Federal
Reserve
Bank
and
period
Current
income
Net
additions
Net
or
expenses
Board
deductions
expendi1, 2
(−)
tures
Distributions to the
U.S. Treasury
All banks
1914–15
2,173
2,018
6
302
n/a
n/a
n/a
217
n/a
n/a
n/a
1916
5,218
2,082
−193
192
n/a
n/a
n/a
1,743
n/a
n/a
n/a
n/a
1917
16,128
4,922
−1,387
238
n/a
n/a
n/a
6,804
1,134
n/a
n/a
1,134
1918
67,584
10,577
−3,909
383
n/a
n/a
n/a
5,541
n/a
n/a
n/a
48,334
1919
102,381
18,745
−4,673
595
n/a
n/a
n/a
5,012
2,704
n/a
n/a
70,652
1920
181,297
27,549
−3,744
710
n/a
n/a
n/a
5,654
60,725
n/a
n/a
82,916
1921
122,866
33,722
−6,315
741
n/a
n/a
n/a
6,120
59,974
n/a
n/a
15,993
1922
50,499
28,837
−4,442
723
n/a
n/a
n/a
6,307
10,851
n/a
n/a
−660
1923
50,709
29,062
−8,233
703
n/a
n/a
n/a
6,553
3,613
n/a
n/a
2,546
1924
38,340
27,768
−6,191
663
n/a
n/a
n/a
6,682
114
n/a
n/a
−3,078
1925
41,801
26,819
−4,823
709
n/a
n/a
n/a
6,916
59
n/a
n/a
2,474
1926
47,600
24,914
−3,638
722
1,714
n/a
n/a
7,329
818
n/a
n/a
8,464
1927
43,024
24,894
−2,457
779
1,845
n/a
n/a
7,755
250
n/a
n/a
5,044
1928
64,053
25,401
−5,026
698
806
n/a
n/a
8,458
2,585
n/a
n/a
21,079
1929
70,955
25,810
−4,862
782
3,099
n/a
n/a
9,584
4,283
n/a
n/a
22,536
1930
36,424
25,358
−93
810
2,176
n/a
n/a
10,269
17
n/a
n/a
−2,298
1931
29,701
24,843
311
719
1,479
n/a
n/a
10,030
n/a
n/a
n/a
−7,058
1932
50,019
24,457
−1,413
729
1,106
n/a
n/a
9,282
2,011
n/a
n/a
11,021
1933
49,487
25,918
−12,307
800
2,505
n/a
n/a
8,874
n/a
n/a
n/a
−917
1934
48,903
26,844
−4,430
1,372
1,026
n/a
n/a
8,782
n/a
n/a
−60
6,510
1935
42,752
28,695
−1,737
1,406
1,477
n/a
n/a
8,505
298
n/a
28
607
1936
37,901
26,016
486
1,680
2,178
n/a
n/a
7,830
227
n/a
103
353
1937
41,233
25,295
−1,631
1,748
1,757
n/a
n/a
7,941
177
n/a
67
2,616
1938
36,261
25,557
2,232
1,725
1,630
n/a
n/a
8,019
120
n/a
−419
1,862
1939
38,501
25,669
2,390
1,621
1,356
n/a
n/a
8,110
25
n/a
−426
4,534
1940
43,538
25,951
11,488
1,704
1,511
n/a
n/a
8,215
82
n/a
−54
17,617
1941
41,380
28,536
721
1,840
2,588
n/a
n/a
8,430
141
n/a
−4
571
1942
52,663
32,051
−1,568
1,746
4,826
n/a
n/a
8,669
198
n/a
50
3,554
1943
69,306
35,794
23,768
2,416
5,336
n/a
n/a
8,911
245
n/a
135
40,327
1944
104,392
39,659
3,222
2,296
7,220
n/a
n/a
9,500
327
n/a
201
48,410
1945
142,210
41,666
−830
2,341
4,710
n/a
n/a
10,183
248
n/a
262
81,970
1946
150,385
50,493
−626
2,260
4,482
n/a
n/a
10,962
67
n/a
28
81,467
1947
158,656
58,191
1,973
2,640
4,562
n/a
n/a
11,523
36
75,284
87
8,366
1948
304,161
64,280
−34,318
3,244
5,186
n/a
n/a
11,920
n/a
166,690
n/a
18,523
n/a
(continued)
Statistical Tables 217
Table G.10—continued
Transferred
to/from
surplus
Consumer Other
and
compreTransferred
Financial
Dividends
change in
Protection hensive
Interest on to/from
paid
accumu5
income
Costs of Bureau
Statutory Federal surplus
lated
4
currency and Office (loss)
transfers Reserve
other
of
notes
compreFinancial
hensive
3
Research
income6
Assessments by the
Board of Governors
Federal
Reserve
Bank
and
period
Current
income
Net
additions
Net
or
expenses
Board
deductions
expendi1, 2
(−)
tures
Distributions to the
U.S. Treasury
1949
316,537
67,931
−12,122
3,243
6,304
n/a
n/a
12,329
n/a
193,146
n/a
21,462
1950
275,839
69,822
36,294
3,434
7,316
n/a
n/a
13,083
n/a
196,629
n/a
21,849
1951
394,656
83,793
−2,128
4,095
7,581
n/a
n/a
13,865
n/a
254,874
n/a
28,321
1952
456,060
92,051
1,584
4,122
8,521
n/a
n/a
14,682
n/a
291,935
n/a
46,334
1953
513,037
98,493
−1,059
4,100
10,922
n/a
n/a
15,558
n/a
342,568
n/a
40,337
1954
438,486
99,068
−134
4,175
6,490
n/a
n/a
16,442
n/a
276,289
n/a
35,888
1955
412,488
101,159
−265
4,194
4,707
n/a
n/a
17,712
n/a
251,741
n/a
32,710
1956
595,649
110,240
−23
5,340
5,603
n/a
n/a
18,905
n/a
401,556
n/a
53,983
1957
763,348
117,932
−7,141
7,508
6,374
n/a
n/a
20,081
n/a
542,708
n/a
61,604
1958
742,068
125,831
124
5,917
5,973
n/a
n/a
21,197
n/a
524,059
n/a
59,215
1959
886,226
131,848
98,247
6,471
6,384
n/a
n/a
22,722
n/a
910,650
n/a
−93,601
1960
1,103,385
139,894
13,875
6,534
7,455
n/a
n/a
23,948
n/a
896,816
n/a
42,613
1961
941,648
148,254
3,482
6,265
6,756
n/a
n/a
25,570
n/a
687,393
n/a
70,892
1962
1,048,508
161,451
−56
6,655
8,030
n/a
n/a
27,412
n/a
799,366
n/a
45,538
1963
1,151,120
169,638
615
7,573
10,063
n/a
n/a
28,912
n/a
879,685
n/a
55,864
1964
1,343,747
171,511
726
8,655
17,230
n/a
n/a
30,782
n/a
1,582,119
n/a
−465,823
1965
1,559,484
172,111
1,022
8,576
23,603
n/a
n/a
32,352
n/a
1,296,810
n/a
27,054
1966
1,908,500
178,212
996
9,022
20,167
n/a
n/a
33,696
n/a
1,649,455
n/a
18,944
1967
2,190,404
190,561
2,094
10,770
18,790
n/a
n/a
35,027
n/a
1,907,498
n/a
29,851
1968
2,764,446
207,678
8,520
14,198
20,474
n/a
n/a
36,959
n/a
2,463,629
n/a
30,027
1969
3,373,361
237,828
−558
15,020
22,126
n/a
n/a
39,237
n/a
3,019,161
n/a
39,432
1970
3,877,218
276,572
11,442
21,228
23,574
n/a
n/a
41,137
n/a
3,493,571
n/a
32,580
1971
3,723,370
319,608
94,266
32,634
24,943
n/a
n/a
43,488
n/a
3,356,560
n/a
40,403
1972
3,792,335
347,917
−49,616
35,234
31,455
n/a
n/a
46,184
n/a
3,231,268
n/a
50,661
1973
5,016,769
416,879
−80,653
44,412
33,826
n/a
n/a
49,140
n/a
4,340,680
n/a
51,178
1974
6,280,091
476,235
−78,487
41,117
30,190
n/a
n/a
52,580
n/a
5,549,999
n/a
51,483
1975
6,257,937
514,359
−202,370
33,577
37,130
n/a
n/a
54,610
n/a
5,382,064
n/a
33,828
1976
6,623,220
558,129
7,311
41,828
48,819
n/a
n/a
57,351
n/a
5,870,463
n/a
53,940
1977
6,891,317
568,851
−177,033
47,366
55,008
n/a
n/a
60,182
n/a
5,937,148
n/a
45,728
1978
8,455,309
592,558
−633,123
53,322
60,059
n/a
n/a
63,280
n/a
7,005,779
n/a
47,268
1979
10,310,148
625,168
−151,148
50,530
68,391
n/a
n/a
67,194
n/a
9,278,576
n/a
69,141
1980
12,802,319
718,033
−115,386
62,231
73,124
n/a
n/a
70,355
n/a
11,706,370
n/a
56,821
1981
15,508,350
814,190
−372,879
63,163
82,924
n/a
n/a
74,574
n/a
14,023,723
n/a
76,897
1982
16,517,385
926,034
−68,833
61,813
98,441
n/a
n/a
79,352
n/a
15,204,591
n/a
78,320
1983
16,068,362
1,023,678
−400,366
71,551
152,135
n/a
n/a
85,152
n/a
14,228,816
n/a
106,663
1984
18,068,821
1,102,444
−412,943
82,116
162,606
n/a
n/a
92,620
n/a
16,054,095
n/a
161,996
(continued)
218 108th Annual Report | 2021
Table G.10—continued
Transferred
to/from
surplus
Consumer Other
and
compreTransferred
Financial
Dividends
change in
Protection hensive
Interest on to/from
paid
accumu5
income
Costs of Bureau
Statutory Federal surplus
lated
4
currency and Office (loss)
transfers Reserve
other
of
notes
compreFinancial
hensive
3
Research
income6
Assessments by the
Board of Governors
Federal
Reserve
Bank
and
period
Current
income
Net
additions
Net
or
expenses
Board
deductions
expendi1, 2
(−)
tures
Distributions to the
U.S. Treasury
1985
18,131,983
1,127,744
1,301,624
77,378
173,739
n/a
n/a
103,029
n/a
17,796,464
n/a
1986
17,464,528
1,156,868
1,975,893
97,338
180,780
n/a
n/a
109,588
n/a
17,803,895
n/a
91,954
1987
17,633,012
1,146,911
1,796,594
81,870
170,675
n/a
n/a
117,499
n/a
17,738,880
n/a
173,771
1988
19,526,431
1,205,960
−516,910
84,411
164,245
n/a
n/a
125,616
n/a
17,364,319
n/a
64,971
1989
22,249,276
1,332,161
1,254,613
89,580
175,044
n/a
n/a
129,885
n/a
21,646,417
n/a
130,802
1990
23,476,604
1,349,726
2,099,328
103,752
193,007
n/a
n/a
140,758
n/a
23,608,398
n/a
180,292
1991
22,553,002
1,429,322
405,729
109,631
261,316
n/a
n/a
152,553
n/a
20,777,552
n/a
228,356
1992
20,235,028
1,474,531
−987,788
128,955
295,401
n/a
n/a
171,763
n/a
16,774,477
n/a
402,114
1993
18,914,251
1,657,800
−230,268
140,466
355,947
n/a
n/a
195,422
n/a
15,986,765
n/a
347,583
1994
20,910,742
1,795,328
2,363,862
146,866
368,187
n/a
n/a
212,090
n/a
20,470,011
n/a
282,122
1995
25,395,148
1,818,416
857,788
161,348
370,203
n/a
n/a
230,527
n/a
23,389,367
n/a
283,075
1996
25,164,303
1,947,861
−1,676,716
162,642
402,517
n/a
n/a
255,884
5,517,716
14,565,624
n/a
635,343
1997
26,917,213
1,976,453
−2,611,570
174,407
364,454
n/a
n/a
299,652
20,658,972
0
n/a
831,705
1998
28,149,477
1,833,436
1,906,037
178,009
408,544
n/a
n/a
343,014
17,785,942
8,774,994
n/a
731,575
1999
29,346,836
1,852,162
−533,557
213,790
484,959
n/a
n/a
373,579
n/a
25,409,736
n/a
479,053
2000
33,963,992
1,971,688
−1,500,027
188,067
435,838
n/a
n/a
409,614
n/a
25,343,892
n/a
4,114,865
2001
31,870,721
2,084,708
−1,117,435
295,056
338,537
n/a
n/a
428,183
n/a
27,089,222
n/a
517,580
2002
26,760,113
2,227,078
2,149,328
205,111
429,568
n/a
n/a
483,596
n/a
24,495,490
n/a
1,068,598
2003
23,792,725
2,462,658
2,481,127
297,020
508,144
n/a
n/a
517,705
n/a
22,021,528
n/a
466,796
2004
23,539,942
2,238,705
917,870
272,331
503,784
n/a
n/a
582,402
n/a
18,078,003
n/a
2,782,587
2005
30,729,357
2,889,544
−3,576,903
265,742
477,087
n/a
n/a
780,863
n/a
21,467,545
n/a
1,271,672
2006
38,410,427
3,263,844
−158,846
301,014
491,962
n/a
n/a
871,255
n/a
29,051,678
n/a
4,271,828
2007
42,576,025
3,510,206
198,417
296,125
576,306
n/a
324,481
992,353
n/a
34,598,401
n/a
3,125,533
2008
41,045,582
4,870,374
3,340,628
352,291
500,372
n/a
−3,158,808
1,189,626
n/a
31,688,688
n/a
2,626,053
2009
54,463,121
5,978,795
4,820,204
386,400
502,044
n/a
1,006,813
1,428,202
n/a
47,430,237
n/a
4,564,460
2010
79,300,937
6,270,420
9,745,562
422,200
622,846
42,286
45,881
1,582,785
n/a
79,268,124
n/a
883,724
2011
85,241,366
7,316,643
2,015,991
472,300
648,798
281,712
−1,161,848
1,577,284
n/a
75,423,597
n/a
375,175
2012
81,586,102
7,798,353
18,380,835
490,001
722,301
387,279
−52,611
1,637,934
n/a
88,417,936
n/a
460,528
2013
91,149,953
9,134,656
−1,029,750
580,000
701,522
563,200
2,288,811
1,649,277
n/a
79,633,271
n/a
147,088
2014
116,561,512 10,714,872
−2,718,283
590,000
710,807
563,000
−1,611,569
1,685,826
n/a
96,901,695
n/a
1,064,952
2015
114,233,676 11,139,956
−1,305,513
705,000
689,288
489,700
366,145
1,742,745
25,955,921
91,143,493
n/a
−18,571,798
2016
111,743,998 17,262,620
−114,255
709,000
700,728
596,200
−183,232
711,423
91,466,545
n/a
n/a
0
2017
114,193,573 33,397,138
1,932,579
740,000
723,534
573,000
650,808
783,599
80,559,689
n/a
n/a
0
2018
112,861,657 47,353,636
−382,959
838,000
848,807
337,100
41,831
998,703
65,319,280
n/a
n/a
−3,175,000
2019
103,220,435 45,423,825
−169,458
814,000
836,975
518,600
148,923
713,931
54,892,569
n/a
n/a
0
2020
102,036,168 13,454,957
2,266,152
947,000
831,133
517,300
−1,275,509
386,312
86,890,110
n/a
n/a
0
155,253
(continued)
Statistical Tables 219
Table G.10—continued
Transferred
to/from
surplus
Consumer Other
and
compreTransferred
Financial
Dividends
change in
Protection hensive
Interest on to/from
paid
accumu5
income
Costs of Bureau
Statutory Federal surplus
lated
4
currency and Office (loss)
transfers Reserve
other
of
notes
compreFinancial
hensive
3
Research
income6
Assessments by the
Board of Governors
Federal
Reserve
Bank
and
period
2021
Current
income
Net
additions
Net
or
expenses
Board
deductions
expendi1, 2
(−)
tures
Distributions to the
U.S. Treasury
123,058,495 11,007,927 −1,489,296
970,000
1,035,105
627,500
1,639,423
Total
1914–2021 2,084,162,241 287,981,632 39,532,652
583,417 109,024,672
n/a
n/a
−40,000
14,017,118
19,482,577
5,496,877
−930,460
26,402,194 558,222,744 1,198,433,402
−4
12,727,3897
343,552
610,116
1,007,336
244,491
16,241
977,689,395 136,554,303 27,216,053
4,105,218
4,957,821
1,780,947
−1,217,309
792,580
805,781
879,147
324,276
25,483
1,792,803
13,933,479
Aggregate for each Bank, 1914–2021
Boston
New York
Philadelphia
Cleveland
70,617,546
9,313,076
62,987,155
9,343,663
83,035,070
1,156,752
44,842,511
135
500,468
7,492,074 298,926,827 545,077,826
13,316,590
−433
4,793,662
36,308,189
291
418,097
9,033,414
694,154
1,079,213
1,131,760
440,272
36,546
1,979,028
19,517,876
49,612,575
−10
964,710
Richmond
148,492,186 21,093,144
2,272,218
2,729,578
1,674,986
1,167,850
79,076
5,310,948
35,130,242
81,295,580
−72
2,461,326
Atlanta
137,800,678 18,872,326
1,762,528
885,925
2,230,643
303,036
51,427
1,703,512
39,461,437
75,616,315
5
571,214
Chicago
160,992,680 20,096,594
1,896,899
856,585
1,957,707
188,491
24,237
1,549,885
27,781,829 109,806,844
12
673,491
St. Louis
46,966,231
5,696,456
413,475
228,266
667,965
66,206
27,018
419,831
8,917,917
31,149,772
−27
242,440
Minneapolis
26,193,791
5,395,082
419,989
224,366
380,703
32,525
24,336
472,842
4,504,264
15,436,029
65
187,651
Kansas City
51,976,545
8,045,857
575,478
240,913
677,683
55,955
−7,556
461,957
8,392,996
34,476,668
−9
190,587
Dallas
86,126,145 10,556,608
1,120,727
355,674
1,273,259
82,090
30,627
662,432
24,126,628
49,889,286
55
289,028
231,284,809 33,981,110
2,024,999
1,895,486
2,643,565
810,745
−20,585
64,212,662 124,921,807
−17
1,434,718
2,084,162,241 287,981,632 39,532,652
14,017,118
19,482,577
5,496,877
−930,460
26,402,194 558,222,744 1,198,433,402
−4
12,727,389
San
Francisco
Total
3,400,129
Note: Components may not sum to totals because of rounding.
1
For 1987 and subsequent years, includes the cost of services provided to the Treasury by Federal Reserve Banks for which reimbursement was not
received.
2
The Federal Reserve Bank of Boston is the primary beneficiary of MS Facilities LLC (Main Street Lending Program), and the Federal Reserve Bank of
New York is the primary beneficiary of Commercial Paper Funding Facility LLC, Corporate Credit Facilities LLC, Municipal Liquidity Facility LLC, and
Term Asset-Backed Loan Facility II LLC. As a result, the accounts and results of operations of those LLCs are included in the combined financial
statements of the Federal Reserve Banks.
3
Starting in 2010, as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Board of Governors began
assessing the Reserve Banks to fund the operations of the Consumer Financial Protection Bureau and, for a two-year period beginning July 21,
2010, the Office of Financial Research. These assessments are allocated to the Reserve Banks based on each Reserve Bank’s capital and surplus
balances as of the most recent quarter.
4
Represents transfers made as a franchise tax from 1917 through 1932; transfers made under section 13b of the Federal Reserve Act from 1935
through 1947; transfers made under section 7 of the Federal Reserve Act for 1996, 1997, and 2015 to present.
5
Transfers made under section 13b of the Federal Reserve Act.
6
Transfers made under section 7 of the Federal Reserve Act. Beginning in 2006, accumulated other comprehensive income is reported as a component of surplus.
7
The $12,727,389 thousand transferred to surplus was reduced by direct charges of $500 thousand for charge-off on Bank premises (1927);
$139,300 thousand for contributions to capital of the Federal Deposit Insurance Corporation (1934); $4 thousand net upon elimination of section
13b surplus (1958); $106,000 thousand (1996), $107,000 thousand (1997), and $3,752,000 thousand (2000) transferred to the Treasury as
statutorily required; and $1,848,716 thousand related to the implementation of SFAS No. 158 (2006) and was increased by a transfer of $11,131
thousand from reserves for contingencies (1955), leaving a balance of $6,785,000 thousand on December 31, 2021.
n/a Not applicable.
220 108th Annual Report | 2021
Table G.11. Operations in principal departments of the Federal Reserve Banks, 2018–21
Operation
2021
2020
2019
2018
Millions of pieces
Currency processed
Currency destroyed
Coin received
28,172
26,596
33,042
34,312
1,351
r
2,044
5,141
r
4,820r
30,370
33,994
56,101
56,012
131
83
52
53
Checks handled
U.S. government checks1
Postal money orders
Commercial
Securities transfers2
70
74
80
83
3,657
3,767
4,389
4,740
19
21
19
17
204
184
168
158
Commercial
17,895
16,549
15,584
14,692
Government
1,959
1,878
1,704
1,668
Currency processed
657,495
561,278
665,246
659,126
Currency destroyed
20,445
30,560r
84,323r
98,682r
2,811
3,294
5,408
5,387
272,637
205,905
149,337
148,149
20,161
20,558
21,412
21,034
Funds transfers3
Automated clearinghouse transactions
Millions of dollars
Coin received
Checks handled
U.S. government checks1
Postal money orders
Commercial
8,757,539
7,874,721
8,317,894
8,485,159
Securities transfers2
310,827,220
361,728,932
345,813,248
296,335,209
Funds transfers3
991,810,545
840,483,038
695,835,129
716,211,759
Commercial
31,446,232
31,446,232
28,081,631
25,860,072
Government
8,118,875
6,852,715
5,787,018
5,515,114
Automated clearinghouse transactions
1
Includes government checks handled electronically (electronic checks).
Data on securities transfers do not include reversals.
Data on funds transfers do not include non-value transfers.
r Revised.
2
3
Statistical Tables 221
Table G.12. Number and annual salaries of officers and employees of the Federal Reserve Banks,
December 31, 2021
President
Federal Reserve Bank
(including branches)
Boston4
Annual
salary
(dollars)1
Other officers
Number
Employees
Number
Annual
salaries
(dollars)1
Full
time
Part
time
Total
Annual
salaries
Temporary/
(dollars)1, 3
hourly2
Number
Annual
salaries
(dollars)1, 3
0
117
32,667,033
1,091
7
8
144,227,933
1,223
176,894,966
New York
513,400
588
168,501,482
2,351
19
0
340,204,800
2,959
509,219,682
Philadelphia
448,200
73
17,612,000
788
7
19
91,088,224
888
109,148,424
Cleveland
441,400
93
22,349,890
1,013
16
27
108,624,044
1,150
131,415,334
Richmond
418,000
97
22,516,200
1,391
7
9
148,584,060
1,505
171,518,260
Atlanta
430,200
113
27,263,199
1,521
18
27
166,175,331
1,680
193,868,730
Chicago
464,000
148
38,335,628
1,454
23
0
181,297,649
1,626
220,097,277
St. Louis
416,300
107
26,609,700
1,280
18
12
135,880,826
1,418
162,906,826
Minneapolis
448,300
65
15,882,667
963
39
9
98,716,907
1,077
115,047,874
Kansas City
416,500
113
24,165,900
1,919
13
8
174,337,568
2,054
198,919,968
Dallas
5
0
83
20,224,373
1,150
10
21
116,830,072
1,264
137,054,445
497,400
140
38,119,695
1,623
16
19
202,057,942
1,799
240,675,037
Federal Reserve
Information Technology
n/a
79
19,629,300
1,352
1
2
179,947,466
1,434
199,576,766
Office of
Employee Benefits
n/a
17
5,036,800
46
1
0
6,654,260
64
11,691,060
4,493,700
1,833
478,913,867
17,942
195
161
2,094,627,082
20,141
2,578,034,648
San Francisco
Total
Note: Components may not sum to totals because of rounding.
1
Annual salary (excluding outside agency costs) based on salaries in effect on December 31, 2021.
2
Temporary/hourly employees are paid by the Bank, generally work less than 780 hours, and are employed on a temporary basis
(such as interns).
3
Annual salary totals include pandemic premium pay for essential staff as a result of COVID-19.
4
FRB Boston president retired in September 2021.
5
FRB Dallas president retired in October 2021.
n/a Not applicable.
222 108th Annual Report | 2021
Table G.13. Acquisition costs and net book value of the premises of the Federal Reserve Banks and
Branches, December 31, 2021
Thousands of dollars
Federal Reserve
Bank or Branch
Acquisition costs
Land
Buildings
(including vaults)1
Total2
Net book value
Other real estate
Boston
27,293
215,015
242,308
77,945
n/a
New York
68,398
667,323
735,721
368,494
n/a
Philadelphia
8,146
200,294
208,440
112,633
n/a
Cleveland
4,219
165,035
169,254
88,793
n/a
5,126
33,826
38,952
10,350
n/a
32,524
205,747
238,271
105,707
n/a
7,917
44,505
52,422
22,213
n/a
Cincinnati
Richmond
Baltimore
Charlotte
7,884
46,877
54,761
25,726
n/a
25,329
165,748
191,077
117,363
n/a
Birmingham
5,347
13,433
18,780
9,499
n/a
Jacksonville
2,185
28,315
30,500
13,087
n/a
New Orleans
3,789
16,752
20,541
8,314
n/a
Miami
4,664
38,756
43,420
17,446
n/a
Atlanta
Chicago
7,460
267,954
275,414
100,656
n/a
Detroit
13,371
76,869
90,240
62,210
n/a
St. Louis
9,942
156,939
166,881
79,823
n/a
Memphis
2,472
22,382
24,854
6,766
n/a
Minneapolis
28,099
124,960
153,059
90,655
n/a
Helena
3,316
10,398
13,714
6,281
n/a
Kansas City
38,985
220,088
259,073
192,438
n/a
Denver
4,957
17,795
22,752
12,185
n/a
Omaha
4,874
13,936
18,810
11,132
n/a
37,960
160,255
198,215
110,731
n/a
262
6,207
6,469
1,458
n/a
Dallas
El Paso
Houston
32,323
106,261
138,584
96,838
n/a
San Francisco
20,988
153,752
174,740
70,462
n/a
Los Angeles
5,217
80,641
85,858
36,813
n/a
Salt Lake City
1,294
6,508
7,802
1,897
n/a
Seattle
13,101
50,282
63,383
45,305
n/a
Phoenix
1,089
15,401
16,490
9,665
n/a
428,531
3,332,254
3,760,785
1,938,596
n/a
Total
1
Includes expenditures for construction at some offices, pending allocation to appropriate accounts.
Effective January 1, 2021, the Building machinery and equipment asset class was reclassified to furniture and equipment and is no longer included
in premises of the Federal Reserve Banks and Branches.
n/a Not applicable.
2
Find other Federal Reserve Board publications (www.federalreserve.gov/publications.htm) or order
those offered in print (www.federalreserve.gov/files/orderform.pdf) on our website. Also visit the site for more
information about the Board and to learn how to stay connected with us on social media.
www.federalreserve.gov
0722
@FedFRASER