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Message from the President | 2012 Highlights | Directors | Officers | Advisory Councils | Financial Statements Past Annual Reports | Disclaimer & Privacy | E-mail Alert Message from the President | 2012 Highlights | Directors | Officers | Advisory Councils | Financial Statements In this short video, Bank president Eric Rosengren focuses on three key policy initiatives the Bank pursued in 2012. The first relates to financial stability, and more specifically the run on prime money market funds in the financial crisis. Through statistical studies, editorials, and speeches, the Bank highlighted in 2012 the need to address money market fund policies. The second initiative centers on a regional issue – educational attainment. President Rosengren notes that New England has done much better than the rest of the country, but unfortunately some of our mid-size cities have lagged. The third focuses on a monetary policy issue – how to ensure the economy grows more rapidly than it has over the course of much of this recovery. President Rosengren describes how home sales and auto sales responded to the lower interest rates that stemmed from the Fed’s monetary policy actions in 2012. Past Annual Reports | Disclaimer & Privacy | E-mail Alert Message from the President | 2012 Highlights | Directors | Officers | Advisory Councils | Financial Statements Our work in 2012 was wide ranging. Our work in 2012 was wide ranging, but all of it supported the economy and its financial underpinnings, in the public interest. Some Bank staff analyzed financial stability; others supervised financial institutions. Some did nonpartisan, data-driven research that informed policy. Others worked on the payment services and financial infrastructure that economic activity depends upon. Boston Fed employees also supported various Federal Reserve System initiatives, including financial management, Internet services, and cybersecurity. Some worked to advance economic development in communities, by analyzing problems and convening stakeholders to develop solutions. And others helped the organization run, through a variety of key functions. Amid our varied work, certain themes were prevalent – innovation, partnership, and accessibility… Past Annual Reports | Disclaimer & Privacy | E-mail Alert Message from the President | 2012 Highlights | Directors | Officers | Advisory Councils | Financial Statements In 2012, the Bank implemented new ideas and tools – in pursuit of efficiency, effectiveness, and creative problem solving. Researching monetary policy options to address the nation’s slow economic recovery. Analysis of the economic situation led Bank president Eric Rosengren to call publicly, in August, for the Fed to lead a large-scale asset purchase program. By purchasing assets (e.g., securities), the Fed can reduce market interest rates and stimulate economic growth, and our researchers had been modeling the potential effects on job creation. Conducting data-driven research on financial stability concerns and systemic risks. Using a multitude of publicly available documents, our analysts found that, absent sponsor support, at least 21 prime money market mutual funds would have “broken the buck” during the financial crisis. The research highlighted a variety of potential reforms that could enhance the resiliency of money market mutual funds, and was published in The Stability of Prime Money Market Mutual Funds: Sponsor Support from 2007 to 2011. Supporting federal government operations with innovations in technology, payments, and data management. The Boston Fed developed and operates the Invoice Processing Platform, or IPP, for the U.S. Treasury, providing federal agencies and their suppliers with a web-based system to exchange electronic purchase orders and invoices. At the end of 2012, 56 Federal agencies were using IPP, as well as more than 66,000 vendors – double the number in 2011. The Boston Fed also built a new cash-management system for the U.S. Treasury, projected to yield $3 million in cost savings to the federal government. Helping mobile payments evolve with efficiency, integrity, and accessibility. The rapid profusion of mobile devices and mobile transactions underlined the importance of seeing mobile payments evolve in the public interest. The Boston Fed created a Mobile Payments Industry Workgroup in which more than 40 organizations participated in 2012. Playing key leadership roles in the Federal Reserve System. The Boston Fed manages the Financial Support Office (FSO), which leads accounting and financial management policies, systems, and processes for the Federal Reserve System. Separately, the Boston Fed also had leadership roles in the Federal Reserve System’s Internet gateway protection, network security, secure hosting, and authentication and authorization services. Acting as good stewards of energy and resources. The Bank recycled 186 tons of shredded money (worn-out bills) in 2012, and achieved a 9.2 percent reduction in utility consumption thanks to energy efficiency initiatives. For the fourth consecutive year, our building earned the Energy Star designation. Past Annual Reports | Disclaimer & Privacy | E-mail Alert Message from the President | 2012 Highlights | Directors | Officers | Advisory Councils | Financial Statements Collaborating with public and private partners to support community economic development. The Bank is committed to proactive collaboration with communities, businesses, governments, and organizations, to strengthen New England. In 2012 we convened 10 community development events throughout New England, including three conferences targeting the resurgence of midsized manufacturing-oriented cities. Mid-sized cities are a major focus of our work, as 4.5 million New Englanders live in the Greater Boston metropolitan area or in one of New England’s mid-sized cities Conducting rigorous bank supervision to help identify and mitigate risks. The Boston Fed provided an objective evaluation of financial institutions’ soundness, and their compliance with U.S. banking laws and regulations. Additions to our supervisory portfolio in 2012 included the U.S. operations of one foreign bank, eight New England state chartered banks, and 27 savings and loan holding companies. Addressing the challenge of talent retention in New England. In partnership with the Greater Boston Chamber of Commerce, the Bank hosted more than 100 business, government, and academic representatives to make progress on student internships in New England – which allow students to develop essential skills and help New England business retain talent so they can grow and flourish. Conducting research and analysis that called upon, and strengthened, regional partnerships. Working with the Commonwealth of Massachusetts Commonwealth Corporation, Bank researchers produced eight regional labor market profiles. Regional forums on the Labor Market Profiles attracted about 1,000 attendees. Separately, we partnered with consumers to gather reliable information on the choices they are making about payments. Almost 2,500 respondents reported on their purchases, payments, deposits and withdrawals using the new Diary of Consumer Payment Choice as part of the research conducted by our Consumer Payments Research Center. Convening leaders to advance corporate diversity in New England. The Bank held an inaugural New England Financial Services CEO Roundtable, in which representatives from 13 financial services organizations took part. The goal was to create a discussion among CEOs on the importance of diversity in the senior ranks and on the boards of directors of New England’s financial services companies. Separately the Bank continued to support diverse businesses, increasing our annual spend with minority and womenowned business enterprises. Providing avenues for Bank employees to donate their time and money to community organizations. The Bank’s "First Serve" program coordinated 17 employee volunteer events in 2012, with 200 employees taking part. Employees actively supported the Bank’s United Way campaign. Past Annual Reports | Disclaimer & Privacy | E-mail Alert Message from the President | 2012 Highlights | Directors | Officers | Advisory Councils | Financial Statements Increasing transparency by compiling and sharing new kinds of information. The Bank is committed to communicating openly with the public. In April 2012, Bank president Eric Rosengren began posting his external meetings to our public website. Sharing perspectives on the economy. Bank president Eric Rosengren gave 11 major speeches in 2012, and many smaller talks, to explain his analysis of economic and financial issues. Other Bank economists discussed their research on the economy at more than 70 general audience talks (in addition to many academic presentations) – a 36 percent increase in general audience talks over 2011. Using new communications channels to share information. We actively used the Bank’s Twitter handle, @BostonFed, to share a wide variety of information, and saw our Twitter followers more than double. Separately we produced our first mobile app educational tool, Fed Trivia: Currency. It is available as a free download in the iTunes store. Past Annual Reports | Disclaimer & Privacy | E-mail Alert Message from the President | 2012 Highlights | Directors | Officers | Advisory Councils | Financial Statements The Federal Reserve Act requires that each Reserve Bank have nine directors. Three Class A directors represent member banks in the district, while three Class B directors and three Class C directors are selected with due consideration to the interests of agriculture, commerce, industry, services, labor, and consumers. Member banks elect Class A and Class B directors.The Board of Governors of the Federal Reserve System in Washington, D.C. appoints Class C directors, and from this group designates the Chair and Deputy Chair. Richard Holbrook William Nordhaus Kenneth Montgomery Eric Rosengren Peter Judkins Kirk Sykes Catherine D'Amato Roger Berkowitz Kathryn Underwood Gary Gottlieb John Fish Standing (left to right): Richard Holbrook, William Nordhaus, Kenneth Montgomery, Eric Rosengren, Peter Judkins, Kirk Sykes, Catherine D'Amato Seated (left to right): Roger Berkowitz, Kathryn Underwood, Gary Gottlieb, John Fish Kirk A. Sykes, Chair President & Managing Director Urban Strategy America Fund, L.P. William D. Nordhaus, Deputy Chair Sterling Professor of Economics Yale University Roger S. Berkowitz President & Chief Executive Officer Legal Sea Foods, LLC Catherine D’Amato President & Chief Executive Officer The Greater Boston Food Bank John F. Fish Chairman & Chief Executive Officer Suffolk Construction Company, Inc. Gary L. Gottlieb, MD President & Chief Executive Officer Partners HealthCare System Inc. Richard E. Holbrook Chairman & Chief Executive Officer Eastern Bank Corporation Peter L. Judkins President & Chief Executive Officer Franklin Savings Bank Kathryn G. Underwood President & Chief Executive Officer Ledyard National Bank Federal Advisory Council Representative Joseph L. Hooley (not pictured) Chairman, President, & Chief Executive Officer State Street Corporation About the Board of Directors Kirk A. Sykes, Chair and Class C Director, is President and Managing Director of the Urban Strategy America Fund. He is a Commissioner for the City of Boston’s Civic Design Commission. He also serves as Vice Chairman of the Real Estate Executive Council; Advisory Board Member of the Northeastern University School of Public Policy and Urban Affairs; and on the Board of the Suffolk University Law School Rappaport Center for Law and Public Service. William D. Nordhaus, Deputy Chair and Class C Director, is Sterling Professor of Economics at Yale University. Mr. Nordhaus has been on the Yale faculty since 1967. He also teaches at the Yale School of Forestry and Environmental Studies. He served on the President’s Council of Economic Advisers from 1977 to 1979. Mr. Nordhaus is a Member of the National Academy of Sciences and a Fellow of the American Academy of Arts and Sciences. Roger S. Berkowitz, a Class B Director, is the President and Chief Executive Officer of Legal Sea Foods, LLC. Mr. Berkowitz serves on the leadership council at the Harvard School of Public Health, and is a member of the Board of Overseers of Brandeis International Business School and a Trustee of Suffolk University. He also serves on many non-profit boards including: Dana-Farber Cancer Institute, Boston's Children's Hospital, UNICEF, Boston Children's Museum, Environmental League of Massachusetts, and the Blue Frontier Campaign. Mr. Berkowitz has also served on the Regional Selection Panel for the President’s Commission on White House Fellowships since 2004 and he is a member of the Massachusetts Workforce Training Fund Advisory Committee. Catherine D’Amato, Class C Director, is President and Chief Executive Officer of The Greater Boston Food Bank (GBFB), New England’s largest nonprofit hunger-relief organization. GBFB is a $65MM charitable food distribution business serving 90,000 people a week in 190 cities in the nine counties of eastern Massachusetts. Before coming to the Boston agency in 1995, she was the chief executive at food banks in Western Massachusetts and San Francisco. Ms. D’Amato currently serves on the Board of Directors of the Boston Foundation, the Massachusetts Food Association, and Basic Health International. She was named Vice Chair of the Boston Foundation’s Board of Directors in 2009. John F. Fish, Class B Director, is Chairman and Chief Executive Officer of Suffolk Construction Company, Inc., a privately held firm that provides preconstruction, construction management, design-build and general contracting services to healthcare, science and technology, education, federal government, and commercial clients throughout the United States. Mr. Fish also provides the vision, support, and day-to-day leadership behind the Boston Scholar Athletes program, which currently reaches 4,000 high school student-athletes in 19 Boston Public Schools. He currently chairs the Massachusetts Competitive Partnership (MACP), and also serves on many boards and executive committees to support important community, environmental and social organizations including the Boys & Girls Clubs of Boston, Jobs for Mass, Private Industry Council, The Boston Green Ribbon Commission, Salvation Army, and Catholic Schools Foundation. Gary L. Gottlieb, MD, a Class B Director, is President and Chief Executive Officer of Partners HealthCare System Inc. in Boston. Dr. Gottlieb is a Professor of Psychiatry at Harvard Medical School. Dr. Gottlieb is Chair of the Board of Directors of the Boston Private Industry Council, Boston's workforce investment board. He is also a member of the Institute of Medicine of the National Academy of Sciences, and is governor on the Board of Trustees of the international nonprofit organization Partners in Health. Richard E. Holbrook, Class A Director, is Chairman and Chief Executive Officer of Eastern Bank Corporation and of Eastern Bank and its subsidiaries. Eastern is the largest and oldest mutual bank company in the country. Mr. Holbrook serves on the Executive Committees of the Boston Chamber of Commerce, the American Bankers Association, and the Massachusetts Bankers Association. He is Chairman of the Board of Trustees of the North Shore Medical Center and a Trustee of Partners HealthCare System Inc. Peter L. Judkins, a Class A Director, is President and Chief Executive Officer of Franklin Savings Bank. Mr. Judkins is Immediate Past-Chairman of the Maine Bankers Association and was a member of the Federal Reserve Bank of Boston's Community Depository Institutions Advisory Council. He is a member of the boards of the Franklin Community Health Network and the Ski Museum of Maine. Kathryn G. Underwood, Class A Director, is President and Chief Executive Officer of Ledyard National Bank. She is the Immediate Past Chair of the Board of the New Hampshire Bankers Association and the Federal Delegate on the Board of the Independent Community Bankers of America. Ms. Underwood is on the Board of Kendal at Hanover and Chair of their Strategic Committee, and is also a member of the Upper Valley Corporate Council. About the Federal Advisory Council Representative Joseph L. Hooley, Chairman, President, and Chief Executive Officer of State Street Corporation, is the Federal Advisory Council (FAC) representative for the First Federal Reserve District. The FAC meets quarterly to discuss business and financial conditions with the Federal Reserve Board of Governors in Washington, D.C. It is composed of one banker from each of the 12 Federal Reserve Districts. The First Federal Reserve District comprises all of New England, except Fairfield County, Connecticut. Past Annual Reports | Disclaimer & Privacy | E-mail Alert Message from the President | 2012 Highlights | Directors | Officers | Advisory Councils | Financial Statements Jeffrey Fuhrer Ronald Mitchell Christopher Gale Cynthia Conley Geoffrey Tootell Richard Walker III Robert Whelan James Nolan Jacqueline Palladino James Cunha Roland Marx Standing (left to right): Jeffrey Fuhrer, Ronald Mitchell, Christopher Gale, Cynthia Conley, Geoffrey Tootell, Richard Walker III, Robert Whelan Seated (left to right): James Nolan, Jacqueline Palladino, James Cunha, Roland Marx Eric Rosengren (not pictured) President & Chief Executive Officer Kenneth Montgomery (not pictured) First Vice President & Chief Operating Officer Jeffrey Fuhrer Executive Vice President & Senior Policy Advisor James Nolan Executive Vice President & Director of Supervision, Regulation and Credit Cynthia Conley Senior Vice President & General Counsel James Cunha Senior Vice President Christopher Gale Senior Vice President Roland Marx Senior Vice President & General Auditor Ronald Mitchell, Jr. Senior Vice President Jacqueline Palladino Senior Vice President Geoffrey Tootell Senior Vice President & Director of Research Richard Walker III Senior Vice President & Community Affairs Officer Robert Whelan Senior Vice President Officers Donald Anderson, Jr. Vice President Ronald Adams Assistant Vice President Robert Augusta, Jr. Vice President Patricia Allouise Assistant Vice President & Assistant General Counsel Marques Benton Vice President & Diversity & Inclusion Officer Anthony Bardascino Assistant Vice President Stephen Bernard Vice President & Assistant General Auditor Theresa Barry Assistant Vice President Alan Bloom Vice President Mary Hughes Bickerton Assistant Vice President Prabal Chakrabarti Vice President Krista Blair Assistant Vice President Jon Colvin Vice President & Chief Financial Officer Joseph Cacciola Assistant Vice President Marianne Crowe Vice President Elizabeth Ching Assistant Vice President Patrick de Fontnouvelle Vice President Mary Cottman Assistant Vice President Amina Derbali Vice President Jeannine DeLano Assistant Vice President Kimberly DeTrask Vice President Brian Donovan Assistant Vice President Christopher Haley Donald Foucher Vice President Assistant Vice President Yolanda Kodrzycki Vice President & Director, New England Public Policy Center Patricia Geagan Assistant Vice President John Kroen Vice President Timothy Houston Assistant Vice President Thomas Lavelle Vice President & Public Information Officer Carie Kelleher Assistant Vice President Carl Madsen Vice President Eileen Leighton Assistant Vice President & Discount Officer Leah Maurer Vice President Jeanne MacNevin Assistant Vice President Giovanni Olivei Vice President & Economist Barry Maddix Assistant Vice President & Assistant General Counsel David Park Vice President & Deputy General Counsel Donald McGough Assistant Vice President Joe Peek Vice President & Economist John McKinnon Assistant Vice President Judith Quenzel Vice President Joan Mielke Assistant Vice President James Rigoli Vice President Andrew Olszowy Assistant Vice President Christopher Ritchie Vice President Lisa Perlini Assistant Vice President Joyce Sandvik Vice President Richard Ragan Assistant Vice President Maureen Savage Vice President Aparna Ramesh Assistant Vice President Robert Triest Vice President & Economist Amy Ross Assistant Vice President Dana Warren, Jr. Vice President Astier Sium Assistant Vice President & Assistant Corporate Secretary Michael Watson Vice President Michael Stewart Assistant Vice President Christine Swope Assistant Vice President & Assistant General Counsel Preston Thompson Assistant Vice President Ralph Ventresco Assistant Vice President Joel Werkema Assistant Vice President Lisa Wright Assistant Vice President & Assistant General Counsel Elaine Zetes Assistant Vice President & Corporate Secretary Past Annual Reports | Disclaimer & Privacy | E-mail Alert Message from the President | 2012 Highlights | Directors | Officers | Advisory Councils | Financial Statements Community Depository Institution Advisory Council (CDIAC) The Community Depository Institution Advisory Council (CDIAC) offers a community institution perspective on the economy, credit conditions, regulatory policies, and payments. The members of the First District CDIAC bring information from their local communities to the Federal Reserve Bank of Boston. The 12 members represent commercial banks, thrifts, and credit unions with assets of less than $10 billion. The CDIACs of the Federal Reserve Board and the 12 Reserve Banks were established by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Community Development Advisory Council The New England Community Development Advisory Council (CDAC) provides a forum for representatives of community development organizations from the private, public, and nonprofit sectors to inform, advise, and discuss opportunities to facilitate communication among the sectors to encourage effective use of community development resources in the region. The CDAC serves as a mechanism to convey to the broader Federal Reserve System, indirectly through the Federal Reserve Bank of Boston, perspectives on community development to which the System should be sensitive. External Diversity Advisory Council The External Diversity Advisory Council works collaboratively with the President and the Office of Diversity to provide advice, counsel, thought leadership, and feedback regarding actions, initiatives, and strategies that the Federal Reserve Bank of Boston can undertake. The External Diversity Advisory Council is comprised of recognized diversity business leaders from the New England region. New England Advisory Council The New England Advisory Council (NEAC) is comprised of leaders of small- to mid-size businesses throughout New England. Members advise the Bank and its management on economic matters throughout the Federal Reserve’s First District. Past Annual Reports | Disclaimer & Privacy | E-mail Alert Message from the President | 2012 Highlights | Directors | Officers | Advisory Councils | Financial Statements The Board of Governors engaged Deloitte & Touche LLP (D&T) to audit the 2012 combined and individual financial statements of the Reserve Banks and those of the consolidated LLC entities.1 In 2012, D&T also conducted audits of internal controls over financial reporting for each of the Reserve Banks, Maiden Lane LLC, Maiden Lane III LLC, and TALF LLC. Fees for D&T’s services totaled $7 million, of which $1 million was for the audits of the consolidated LLC entities. To ensure auditor independence, the Board requires that D&T be independent in all matters relating to the audits. Specifically, D&T may not perform services for the Reserve Banks or others 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 2012, the Bank did not engage D&T for any non-audit services. 1In addition, D&T 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, and the OEB. Boston Fed's 2012 Financial Statements (as of and for the years ended December 31, 2012 and 2011) Released on March 15, 2013 Financial Statements of the Federal Reserve System Past Annual Reports | Disclaimer & Privacy | E-mail Alert