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FEDERAL RESERVE BANK of NEW YORK

2014 ANNUAL REPORT

FEDERAL RESERVE BANK
OF NEW YORK
Annual Report
For the year ended December 31, 2014

SECOND FEDERAL RESERVE DISTRICT

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

April 2015

To the Depository Institutions in
the Second Federal Reserve District:

It is my pleasure to send you the one-hundredth annual report of the Federal Reserve Bank of New York,
covering the year 2014.
Following the “Letter from the President,” the 2014 Annual Report presents detailed tables, with extensive
notes, on the Bank’s financial condition.
I hope you will find the information we present interesting and useful.

William C. Dudley
President

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

CONTENTS
Letter from the President������������������������������������������������������������������������������������������������������������������������������� 1

Management’s Report on Internal Control over Financial Reporting���������������������������������������������������������� 4

External Auditor Independence��������������������������������������������������������������������������������������������������������������������� 6

Consolidated Financial Statements���������������������������������������������������������������������������������������������������������������� 8

Directors of the Federal Reserve Bank of New York��������������������������������������������������������������������������������� 62

Advisory Groups������������������������������������������������������������������������������������������������������������������������������������������ 65

Officers of the Federal Reserve Bank of New York����������������������������������������������������������������������������������� 71

Map of the Second Federal Reserve District����������������������������������������������������������������������������������������������� 88

CONTENTS

LETTER FROM THE PRESIDENT

PRESIDENT’S LETTER

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

LETTER FROM THE PRESIDENT

Testing for Operational Readiness for Policy
Normalization

am pleased to present the Federal Reserve Bank of
New York’s 2014 Annual Report. This report provides
an overview of our accounting policies, detailed information on our balance sheet, and our audited financial
statements. In this letter, I will share with you some of
our 2014 financial highlights—including changes in the
balance sheet, operational tests and preparations for a
more normalized monetary policy environment, steps
taken to ensure that we have the best financial control
environment in place, and some key milestones in our
crisis interventions. All of this work is in support of the
Federal Reserve’s mission to promote a healthy economy
and a strong financial system.

In October 2014, the Federal Open Market Committee
(FOMC) ended the monthly purchase of longer-term
Treasury securities and agency MBS. To prepare for
the time when monetary policy normalization becomes
appropriate, the New York Fed, beginning in 2013 and
continuing in 2014, implemented a series of preparations
and tests to ensure operational readiness.
Specifically, in 2014 the New York Fed conducted
daily overnight reverse repurchase agreement (RRP) operations and a series of term RRP operations. These exercises were intended to ensure operational readiness and to
test the ability of the FOMC’s tools to set a floor on rates.

Changes in Our Balance Sheet
In December 2008, as evidence of a dramatic slowdown in
the U.S. economy mounted, the Federal Reserve reduced
its target for the federal funds rate—the interest rate that
depository institutions charge each other for borrowing
funds overnight—to nearly zero, to provide stimulus
to households and businesses and to support economic
recovery. With the funds rate near its effective lower
bound, leaving little scope for further reductions, the
Federal Reserve made a series of large-scale asset purchases
(LSAPs) between late 2008 and October 2014.

Internal Control Framework—Improving
Our Processes
As part of our financial management practices, we continue to look for ways to enhance our internal controls
and governance. The New York Fed has voluntarily
complied with Section 404 of the Sarbanes-Oxley Act
since 2004 and, this year, adopted the 2013 Committee
of Sponsoring Organizations (COSO) Internal Control
Framework, a leading model for designing, implementing, and evaluating the effectiveness of internal controls.
We were gratified to receive a favorable opinion from our
external auditor on the effectiveness of these controls,
and we will continue to explore new controls to ensure
that we have a strong financial framework to carry out
our mission.

In recent years, the New York Fed’s balance sheet
has reflected the unconventional measures undertaken
by the Federal Reserve to support economic recovery.
In 2014, the New York Fed purchased, as part of the
LSAP program, $250 billion par value of longer-term
Treasury securities and $200 billion par value of agency
mortgage-backed securities (MBS) for the System Open
Market Account (SOMA). These purchases drove an
overall $472.9 billion increase in domestic SOMA holdings to a total of $4.4 trillion as of year-end. The Bank’s
participated holdings of the domestic SOMA portfolio
increased the Bank’s balance sheet by $524.3 billion to a
total of $2.7 trillion as of year-end.

Milestones for Crisis Interventions
In 2014, we also marked some milestones by winding
down many of the interventions deployed to combat
the financial crisis and restore financial stability. Intense
strains in financial markets during the crisis severely
disrupted the flow of credit to U.S. households and businesses and led to a deep downturn in economic activity

PRESIDENT’S LETTER

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Another crisis intervention program that achieved
a milestone in 2014 was the New York Fed’s extension
of credit to prevent the disorderly failure of American
International Group, Inc. (AIG). In November, the
remaining cash held in reserve by two special purpose
vehicles, Maiden Lane II LLC and Maiden Lane III LLC,
was paid to the New York Fed and AIG, after payment of
final trailing expenses. While profit was not the impetus
for these programs, we were able to return a profit to the
taxpayers of more than $9.5 billion since the inception of
these crisis interventions.

and a sharp increase in unemployment. Consistent with
its statutory mandate to foster maximum employment
and stable prices, the Federal Reserve established lending
programs during the crisis to address the strains in financial markets, support the flow of credit to households and
firms, and foster economic recovery.
One program that was administered by the New York
Fed was the Term Asset-Backed Securities Loan Facility
(better known as TALF). TALF lending ended in June 2010,
after the program had arranged more than $71 billion in
loans to fund consumer and small business credit. This
facility alone supported more than a million auto loans,
several hundred thousand student loans, and tens of
thousands of small business loans. The final TALF loan
was paid down in full in October 2014, and TALF LLC,
a special purpose vehicle related to TALF, made its final
distribution to the New York Fed and the U.S. Treasury
in November 2014. Subsequent to the final distribution,
TALF LLC was legally terminated.

A Look Ahead
These are some of the financial highlights from 2014—all
of which reflect our commitment to the Federal Reserve’s
mission of promoting a healthy economy and a sound
financial system. I am proud of the New York Fed’s work
over the last year, and I am confident in this institution’s
readiness to tackle the challenges of the years ahead.

William C. Dudley
April 3, 2015

PRESIDENT’S LETTER

MANAGEMENT’S REPORT
ON INTERNAL CONTROL
OVER FINANCIAL REPORTING

MANAGEMENT’S REPORT

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Management’s Report on Internal Control over Financial Reporting

To the Board of Directors of
the Federal Reserve Bank of New York:

March 11, 2015

The management of the Federal Reserve Bank of New York (Bank) is responsible for the preparation and
fair presentation of the Statements of Condition as of December 31, 2014 and 2013, the Statements of Income
and Comprehensive Income, and the Statements of Changes in Capital for the years then ended (the financial
statements). The financial statements have been prepared in conformity with the accounting principles, policies,
and practices established by the Board of Governors of the Federal Reserve System as set forth in the Financial
Accounting Manual for Federal Reserve Banks (FAM), and, as such, include some amounts that are based on
management judgments and estimates. To our knowledge, the financial statements are, in all material respects,
fairly presented in conformity with the accounting principles, policies, and practices documented in the FAM and
include all disclosures necessary for such fair presentation.
The management of the Bank is responsible for establishing and maintaining effective internal control over
financial reporting as it relates to the financial statements. The Bank’s internal control over financial reporting is
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external reporting purposes in accordance with the FAM. The Bank’s internal control over
financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and dispositions of the Bank’s assets; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with FAM, and that the Bank’s receipts and expenditures are being made only in accordance with
authorizations of its management and directors; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the Bank’s assets that could have a material
effect on its financial statements.
Even effective internal control, no matter how well designed, has inherent limitations, including the possibility
of human error, and therefore can provide only reasonable assurance with respect to the preparation of reliable
financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
The management of the Bank assessed its internal control over financial reporting based upon the criteria
established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this assessment, we believe that the Bank maintained
effective internal control over financial reporting.

William C. Dudley
President

Christine M. Cumming
First Vice President
MANAGEMENT’S REPORT

Michael Strine
Principal Financial Officer

EXTERNAL
AUDITOR
INDEPENDENCE

EXTERNAL AUDITOR INDEPENDENCE

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

EXTERNAL AUDITOR INDEPENDENCE
The Board of Governors engaged Deloitte & Touche
LLP (D&T) to audit the 2014 combined and individual
financial statements of the Reserve Banks and Maiden
Lane LLC. In 2014, D&T also conducted audits of
internal controls over financial reporting for each of
the Reserve Banks. Fees for D&T’s services totaled
$7 million, of which $0.4 million was for the audit of
Maiden Lane LLC. 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 2014, 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, the OEB, and the Consumer Financial
Protection Bureau.
EXTERNAL AUDITOR INDEPENDENCE

CONSOLIDATED
FINANCIAL
STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Independent Auditors’ Report

To the Board of Governors
of the Federal Reserve System
and the Board of Directors
of the Federal Reserve Bank of New York:
We have audited the accompanying consolidated financial statements of the Federal Reserve Bank of New York
and its subsidiaries (collectively “FRB New York”), which are comprised of the consolidated statements of
condition as of December 31, 2014 and 2013, and the related consolidated statements of income and comprehensive income, and of changes in capital for the years then ended, and the related notes to the consolidated
financial statements. We also have audited the FRB New York’s internal control over financial reporting as of
December 31, 2014, based on criteria established in Internal Control — Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission.
Management’s Responsibility
The FRB New York’s management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles established by the Board of Governors of the
Federal Reserve System (the “Board”) as described in Note 3 to the consolidated financial statements. The Board
has determined that this basis of accounting is an acceptable basis for the preparation of the FRB New York’s
consolidated financial statements in the circumstances. The FRB New York’s management is also responsible
for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud
or error. The FRB New York’s management is also responsible for its assertion of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s Report on Internal Control over
Financial Reporting.
Responsibility
Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the
FRB New York’s internal control over financial reporting based on our audits. We conducted our audits of the
consolidated financial statements in accordance with auditing standards generally accepted in the United States
of America and in accordance with the auditing standards of the Public Company Accounting Oversight Board
(United States) (“PCAOB”), and we conducted our audit of internal control over financial reporting in accordance
with attestation standards established by the American Institute of Certified Public Accountants and in accordance
with the auditing standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material misstatement
and whether effective internal control over financial reporting was maintained in all material respects.
An audit of the consolidated financial statements involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated financial statements. The procedures selected depend
on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers
CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

internal control relevant to the FRB New York’s preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances. An audit of the consolidated financial statements also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. An audit of internal control over financial reporting involves
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered necessary in the circumstances.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Definition of Internal Control over Financial Reporting
The FRB New York’s internal control over financial reporting is a process designed by, or under the supervision of, the FRB New York’s principal executive and principal financial officers, or persons performing similar
functions, and effected by the FRB New York’s board of directors, management, and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial
statements for external purposes in accordance with the accounting principles established by the Board. The FRB
New York’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the FRB New York; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of consolidated financial statements in accordance with the accounting principles established
by the Board, and that receipts and expenditures of the FRB New York are being made only in accordance
with authorizations of management and directors of the FRB New York; and (3) provide reasonable assurance
regarding prevention or timely detection and correction of unauthorized acquisition, use, or disposition of the
FRB New York’s assets that could have a material effect on the consolidated financial statements.
Inherent Limitations of Internal Control over Financial Reporting
Because of the inherent limitations of internal control over financial reporting, including the possibility of
collusion or improper management override of controls, material misstatements due to error or fraud may not be
prevented or detected and corrected on a timely basis. Also, projections of any evaluation of the effectiveness of
the internal control over financial reporting to future periods are subject to the risk that the controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.

CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Opinions
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position of the FRB New York as of December 31, 2014 and 2013, and the results of its operations for the years then ended in accordance with the basis of accounting described in Note 3 to the consolidated financial statements. Also, in our opinion, the FRB New York maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2014, based on the criteria established in
Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission.
Basis of Accounting
We draw attention to Note 3 to the consolidated financial statements, which describes the basis of accounting.
The FRB New York has prepared these consolidated financial statements in conformity with accounting principles established by the Board, as set forth in the Financial Accounting Manual for Federal Reserve Banks, which
is a basis of accounting other than accounting principles generally accepted in the United States of America. The
effects on such consolidated financial statements of the differences between the accounting principles established
by the Board and accounting principles generally accepted in the United States of America are also described in
Note 3 to the consolidated financial statements. Our opinion is not modified with respect to this matter.

March 11, 2015
New York, New York

CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT
Abbreviations:

ABS
ACH
AIG
AIGFP
ASC
ASU
BEP
Bureau
CDO
CDS
CFE
CIP
CMBS
FAM
FASB
Fannie Mae
Freddie Mac
FOMC
FRN
GAAP
GSE
IMF
IMI
JPMC
LLC
MBS
ML
ML II
ML III
MSCI
MTM
RMBS
SBA
SDR
SERP
SOMA
STRIPS
TALF
TBA
TDF
TRS
VIE

Asset-backed securities
Automated clearinghouse
American International Group, Inc.
American International Group, Inc. Financial Products Corp.
Accounting Standards Codification
Accounting Standards Update
Benefit Equalization Retirement Plan
Bureau of Consumer Financial Protection
Collateralized debt obligation
Credit default swaps
Collateralized financing entity
Committee on Investment Performance (related to System Retirement Plan)
Commercial mortgage-backed securities
Financial Accounting Manual for Federal Reserve Banks
Financial Accounting Standards Board
Federal National Mortgage Association
Federal Home Loan Mortgage Corporation
Federal Open Market Committee
Floating rate notes
Accounting principles generally accepted in the United States of America
Government-sponsored enterprise
International Monetary Fund
Investible Markets Index
JPMorgan Chase & Co.
Limited liability company
Mortgage-backed securities
Maiden Lane LLC
Maiden Lane II LLC
Maiden Lane III LLC
Morgan Stanley Capital International
Mark-to-market
Residential mortgage-backed securities
Small Business Administration
Special drawing rights
Supplemental Retirement Plan for Select Officers of the Federal Reserve Banks
System Open Market Account
Separate Trading of Registered Interest and Principal Securities
Term Asset-Backed Securities Loan Facility
To be announced
Term Deposit Facility
Total return swap
Variable interest entity
ABBREVIATIONS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

CONSOLIDATED STATEMENTS OF CONDITION
As of December 31, 2014 and December 31, 2013
(in millions)
2014
ASSETS
Gold certificates
Special drawing rights certificates
Coin
Loans:
Depository institutions
Term Asset-Backed Securities Loan Facility (measured at fair value)
System Open Market Account:
Treasury securities, net (of which $6,840 and $9,512 is lent as of December 31, 2014 and
2013, respectively)
Government-sponsored enterprise debt securities, net (of which $388 and $609 is lent as of
December 31, 2014 and 2013, respectively)
Federal agency and government-sponsored enterprise mortgage-backed securities, net
Foreign currency denominated investments, net
Central bank liquidity swaps
Accrued interest receivable
Other assets
Investments held by consolidated variable interest entities (of which $1,808 and $1,774 is
measured at fair value as of December 31, 2014 and 2013, respectively)
Prepaid pension benefit costs
Bank premises and equipment, net
Deferred asset - remittances to the Treasury
Interdistrict settlement account
Other assets
Total assets
LIABILITIES AND CAPITAL
Federal Reserve notes outstanding, net
System Open Market Account:
Securities sold under agreements to repurchase
Other liabilities
Liabilities of consolidated variable interest entities (of which $41 and $189 is measured at fair
value as of December 31, 2014 and 2013, respectively)
Deposits:
Depository institutions
Treasury, general account
Other deposits
Interest payable to depository institutions
Accrued benefit costs
Deferred credit items
Accrued remittances to the Treasury
Interdistrict settlement account
Other liabilities
Total liabilities
Capital paid-in
Surplus (including accumulated other comprehensive loss of $3,938 and $2,452 at
December 31, 2014 and 2013, respectively)
Total capital
Total liabilities and capital

2013

4,125
1,818
79

3,925
1,818
82

4
-

10
98

1,593,478

1,308,403

24,544
1,098,074
6,720
491
15,715
18

32,786
850,588
7,583
87
13,007
1

1,811
475
923
304
2,748,579

1,926
332
466
166,886
212
2,388,210

418,319

475,077

312,919
509

175,193
738

127

274

1,560,513
223,452
25,392
86
1,495
3
187,283
65
2,730,163

1,518,974
162,399
33,962
70
444
3,328
61
2,370,520

9,208

8,845

9,208
18,416
2,748,579

8,845
17,690
2,388,210

The accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the years ended December 31, 2014 and December 31, 2013
(in millions)
2014
INTEREST INCOME
Loans:
Term Asset-Backed Securities Loan Facility
System Open Market Account:
Treasury securities, net
Government-sponsored enterprise debt securities, net
Federal agency and government-sponsored enterprise mortgage-backed securities, net
Foreign currency denominated investments, net
Central bank liquidity swaps
Investments held by consolidated variable interest entities
Total interest income

INTEREST EXPENSE
System Open Market Account:
Securities sold under agreements to repurchase
Other
Deposits:
Depository institutions
Term Deposit Facility
Total interest expense
Net interest income
NON-INTEREST (LOSS) INCOME
System Open Market Account:
Federal agency and government-sponsored enterprise mortgage-backed securities gains, net
Foreign currency translation losses, net
Other
Consolidated variable interest entities: gains, net
Income from services
Compensation received for service costs provided
Reimbursable services to government agencies
Other
Total non-interest (loss) income

2013

37,733
941
30,664
25
77
69,442

28,691
1,206
20,368
31
7
6
50,315

68
1

34
-

4,797
117
4,983
64,459

3,713
7
3,754
46,561

48
(935)
8
37
95
2
120
7
(618)

28
(402)
12
183
90
3
120
6
40

630
64
18
39
352
189

607
70
18
37
619
202

343
183
1,818

324
180
2,057

Net income before providing for remittances to the Treasury
Earnings remittances to the Treasury
Net income (loss)

62,023
59,625
2,398

44,544
45,941
(1,397)

Change in prior service costs related to benefit plans
Change in actuarial (losses) gains related to benefit plans
Total other comprehensive (loss) income
Comprehensive income

100
(1,586)
(1,486)
912

104
1,919
2,023
626

OPERATING EXPENSES
Salaries and benefits
Occupancy
Equipment
Compensation paid for service costs incurred
Net periodic pension expense
Other
Assessments:
Board of Governors operating expenses and currency costs
Bureau of Consumer Financial Protection
Total operating expenses

The accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
For the years ended December 31, 2014 and December 31, 2013
(in millions, except share data)
Surplus

Balance at December 31, 2012
(174,908,186 shares)

Capital paid-in

Net income
retained

Accumulated
other
comprehensive
income (loss)

8,745

13,220

(4,475)

Total surplus
$

8,745

Net change in capital stock issued
(1,991,511 shares)

100

Comprehensive income:
Net loss
Other comprehensive income
Dividends on capital stock
Net change in capital

100

(1,397)
(526)
(1,923)

2,023
2,023

(1,397)
2,023
(526)
100

Balance at December 31, 2013
(176,899,697 shares)

Net change in capital stock issued
(7,252,697 shares)
Comprehensive income:
Net income
Other comprehensive loss
Dividends on capital stock
Net change in capital
Balance at December 31, 2014
(184,152,394 shares)

8,845

11,297

(2,452)

8,845

363

2,398
(549)
1,849

(1,486)
(1,486)

2,398
(1,486)
(549)
363

9,208

13,146

(3,938)

9,208

The accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED FINANCIAL STATEMENTS

Total capital
$

17,490

100
(1,397)
2,023
(526)
200
$

17,690

363
2,398
(1,486)
(549)
726
$

18,416

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

STRUCTURE
The Federal Reserve Bank of New York (Bank) is part of the Federal Reserve System (System) and is one of the 12
Federal Reserve Banks (Reserve Banks) created by Congress under the Federal Reserve Act of 1913 (Federal
Reserve Act), which established the central bank of the United States. The Reserve Banks are chartered by the
federal government and possess a unique set of governmental, corporate, and central bank characteristics. The
Bank serves the Second Federal Reserve District, which includes the State of New York, the 12 northern
counties of New Jersey, Fairfield County, Connecticut, the Commonwealth of Puerto Rico, and the U.S. Virgin
Islands.
In accordance with the Federal Reserve Act, supervision and control of the Bank is exercised by a board of directors.
The Federal Reserve Act specifies the composition of the board of directors for each of the Reserve Banks.
Each board is composed of nine members serving three-year terms: three directors, including those designated
as chairman and deputy chairman, are appointed by the Board of Governors of the Federal Reserve System
(Board of Governors) to represent the public, and six directors are elected by member banks. Banks that are
members of the System include all nationally-chartered banks and any state-chartered banks that apply and are
approved for membership. Member banks are divided into three classes according to size. Member banks in
each class elect one director representing member banks and one representing the public. In any election of
directors, each member bank receives one vote, regardless of the number of shares of Reserve Bank stock it
holds.
In addition to the 12 Reserve Banks, the System also consists, in part, of the Board of Governors and the Federal
Open Market Committee (FOMC). The Board of Governors, an independent federal agency, is charged by the
Federal Reserve Act with a number of specific duties, including general supervision over the Reserve Banks.
The FOMC is composed of members of the Board of Governors, the president of the Bank, and, on a rotating
basis, four other Reserve Bank presidents.

OPERATIONS AND SERVICES
The Reserve Banks perform a variety of services and operations. These functions include participating in
formulating and conducting monetary policy; participating in the payment system, including transfers of funds,
automated clearinghouse (ACH) operations, and check collection; distributing coin and currency; performing
fiscal agency functions for the U.S. Department of the Treasury (Treasury), certain federal agencies, and other
entities; serving as the federal government’s bank; providing short-term loans to depository institutions;
providing loans to participants in programs or facilities with broad-based eligibility in unusual and exigent
circumstances; serving consumers and communities by providing educational materials and information
regarding financial consumer protection rights and laws and information on community development programs
and activities; and supervising bank holding companies, state member banks, savings and loan holding
companies, U.S. offices of foreign banking organizations, and designated financial market utilities pursuant to
authority delegated by the Board of Governors. Certain services are provided to foreign and international
monetary authorities, primarily by the Bank.
The FOMC, in conducting monetary policy, establishes policy regarding domestic open market operations, oversees
these operations, and issues authorizations and directives to the Bank to execute transactions. The FOMC
authorizes and directs the Bank to conduct operations in domestic markets, including the direct purchase and
sale of Treasury securities, government-sponsored enterprise (GSE) debt securities, and federal agency and
GSE mortgage-backed securities (MBS); the purchase of these securities under agreements to resell; and the
sale of these securities under agreements to repurchase. The Bank holds the resulting securities and agreements
in a portfolio known as the System Open Market Account (SOMA). The Bank is authorized and directed to
lend the Treasury securities and GSE debt securities that are held in the SOMA.
To be prepared to counter disorderly conditions in foreign exchange markets or to meet other needs specified by the
FOMC to carry out the System’s central bank responsibilities, the FOMC has authorized and directed the Bank
to execute spot and forward foreign exchange transactions in 14 foreign currencies, to hold balances in those
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

currencies, and to invest such foreign currency holdings, while maintaining adequate liquidity. The Bank holds
these securities and obligations in the SOMA. The FOMC has also authorized the Bank to maintain reciprocal
currency arrangements with the Bank of Canada and the Bank of Mexico in the maximum amounts of $2 billion
and $3 billion, respectively, and to warehouse foreign currencies for the Treasury and the Exchange
Stabilization Fund in the maximum amount of $5 billion.
Because of the global character of bank funding markets, the System has at times coordinated with other central
banks to provide liquidity. The FOMC authorized and directed the Bank to establish U.S. dollar liquidity and
reciprocal foreign currency liquidity swap lines with the Bank of Canada, the Bank of England, the European
Central Bank, the Bank of Japan, and the Swiss National Bank. The Bank holds amounts outstanding under
these swap lines in the SOMA. These swap lines, which were originally established as temporary
arrangements, were converted to standing arrangements on October 31, 2013, and will remain in place until
further notice.
Although the Reserve Banks are separate legal entities, they collaborate on the delivery of certain services to
achieve greater efficiency and effectiveness. This collaboration takes the form of centralized operations and
product or function offices that have responsibility for the delivery of certain services on behalf of the Reserve
Banks. Various operational and management models are used and are supported by service agreements between
the Reserve Banks. In some cases, costs incurred by a Reserve Bank for services provided to other Reserve
Banks are not shared; in other cases, the Reserve Banks are reimbursed for costs incurred in providing services
to other Reserve Banks. Major services provided by the Bank on behalf of the System for which the costs were
not reimbursed by the other Reserve Banks include the management of SOMA, the Wholesale Product Office,
the System Credit Risk Technology Support function, the Valuation Support team, centralized business
administration functions for wholesale payments services, and three national information technology operations
dealing with incident responses, remote access, and enterprise search.
3.

SIGNIFICANT ACCOUNTING POLICIES
Accounting principles for entities with the unique powers and responsibilities of the nation’s central bank have not
been formulated by accounting standard-setting bodies. The Board of Governors has developed specialized
accounting principles and practices that it considers to be appropriate for the nature and function of a central
bank. These accounting principles and practices are documented in the Financial Accounting Manual for
Federal Reserve Banks (FAM), which is issued by the Board of Governors. The Reserve Banks are required to
adopt and apply accounting policies and practices that are consistent with the FAM. The consolidated financial
statements have been prepared in accordance with the FAM.
Limited differences exist between the accounting principles and practices in the FAM and accounting principles
generally accepted in the United States of America (GAAP), due to the unique nature of the Bank’s powers and
responsibilities as part of the nation’s central bank and given the System’s unique responsibility to conduct
monetary policy. The primary differences are the presentation of all SOMA securities holdings at amortized
cost, adjusted for credit impairment, if any, the recording of all SOMA securities on a settlement-date basis, and
the use of straight-line amortization for Treasury securities, GSE debt securities, and foreign currency
denominated investments. Amortized cost, rather than the fair value presentation, more appropriately reflects
the financial position associated with the Bank’s securities holdings given the System’s unique responsibility to
conduct monetary policy. Although the application of fair value measurements to the securities holdings may
result in values substantially greater or less than their carrying values, these unrealized changes in value have no
direct effect on the quantity of reserves available to the banking system or on the ability of the Reserve Banks,
as the central bank, to meet their financial obligations and responsibilities. Both the domestic and foreign
components of the SOMA portfolio may involve transactions that result in gains or losses when holdings are
sold before maturity. Decisions regarding securities and foreign currency transactions, including their purchase
and sale, are motivated by monetary policy objectives rather than profit. Accordingly, fair values, earnings, and
gains or losses resulting from the sale of such securities and currencies are incidental to open market operations
and do not motivate decisions related to policy or open market activities. Accounting for these securities on a
settlement-date basis, rather than the trade-date basis required by GAAP, better reflects the timing of the
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

transaction’s effect on the quantity of reserves in the banking system. The cost bases of Treasury securities,
GSE debt securities, and foreign government debt instruments are adjusted for amortization of premiums or
accretion of discounts on a straight-line basis, rather than using the interest method required by GAAP.
In addition, the Bank does not present a Consolidated Statement of Cash Flows as required by GAAP because the
liquidity and cash position of the Bank are not a primary concern given the Reserve Bank’s unique powers and
responsibilities as a central bank. Other information regarding the Bank’s activities is provided in, or may be
derived from, the Consolidated Statements of Condition, Income and Comprehensive Income, and Changes in
Capital, and the accompanying notes to the consolidated financial statements. Other than those described
above, there are no significant differences between the policies outlined in the FAM and GAAP.
Preparing the consolidated financial statements in conformity with the FAM requires management to make certain
estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income
and expenses during the reporting period. Actual results could differ from those estimates.
In 2014, the description of certain line items presented in the Consolidated Statements of Condition and the
Consolidated Statements of Income and Comprehensive Income have been revised to better reflect the nature of
these items. Amounts related to these line items were not changed from the prior year, only the nomenclature
for the line item was revised, as further noted below:


The line item “System Open Market Account: Other investments” has been revised in the Consolidated
Statements of Condition to “System Open Market Account: Other assets.”



The line item “System Open Market Account: Foreign currency denominated assets, net” has been revised
in the Consolidated Statements of Income and Comprehensive Income to “System Open Market Account:
Foreign currency denominated investments, net.”

Certain amounts relating to the prior year have been reclassified in the Consolidated Statements of Condition to
conform to the current year presentation. $116 million and $158 million previously reported as of December
31, 2013 as “Consolidated variable interest entities: Beneficial interest in consolidated variable interest entities”
and “Consolidated variable interest entities: Other liabilities,” respectively, have been combined and reported in
a new line titled “Liabilities of consolidated variable interest entities.”
Certain amounts relating to the prior year have been reclassified in the Consolidated Statements of Income and
Comprehensive Income to conform to the current year presentation. $12 million previously reported for the
year ended December 31, 2013 as “Non-interest (loss) income: Other” has been reclassified into a new line
titled “Non-interest (loss) income: System Open Market Account: Other.” $183 million and $0 previously
reported for the year ended December 31, 2013 as “Non-interest (loss) income: Consolidated variable interest
entities: Investments held by consolidated variable interest entities gains, net” and “Non-interest (loss) income:
Consolidated variable interest entities: Beneficial interest in consolidated variable interest entities losses, net,”
respectively, have been combined and reported in a new line titled “Non-interest (loss) income: Consolidated
variable interest entities gains, net.”
Significant accounts and accounting policies are explained below.
a. Consolidation
The consolidated financial statements include the accounts and results of operations of the Bank as well as
several variable interest entities (VIEs), which include Maiden Lane LLC (ML), Maiden Lane II LLC (ML
II), Maiden Lane III LLC (ML III), and TALF LLC. The consolidation of the VIEs was assessed in
accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC)
Topic 810 (ASC 810) Consolidation, which requires a VIE to be consolidated by its controlling financial
interest holder. Intercompany balances and transactions have been eliminated in consolidation. See Note 6
for additional information on the VIEs. The consolidated financial statements of the Bank also include
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

accounts and results of operations of Maiden and Nassau LLC, a Delaware limited liability company (LLC)
wholly-owned by the Bank, which was formed to own and operate the Bank-owned 33 Maiden Lane
building.
The Bank consolidates a VIE if the Bank has a controlling financial interest, which is defined as the power to
direct the significant economic activities of the entity and the obligation to absorb losses or the right to
receive benefits of the entity that could potentially be significant to the VIE. To determine whether it is the
controlling financial interest holder of a VIE, the Bank evaluates the VIE’s design, capital structure, and
relationships with the variable interest holders. The Bank reconsiders whether it has a controlling financial
interest in a VIE, as required by ASC 810, at each reporting date or if there is an event that requires
consideration.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) established the
Bureau of Consumer Financial Protection (Bureau) as an independent bureau within the System that has
supervisory authority over some institutions previously supervised by the Reserve Banks in connection
with those institutions’ compliance with consumer protection statutes. Section 1017 of the Dodd-Frank Act
provides that the financial statements of the Bureau are not to be consolidated with those of the Board of
Governors or the System. The Board of Governors funds the Bureau through assessments on the Reserve
Banks as required by the Dodd-Frank Act. The Reserve Banks reviewed the law and evaluated the design
of and their relationship to the Bureau and determined that it should not be consolidated in the Bank’s
consolidated financial statements.
b. Gold and Special Drawing Rights Certificates
The Secretary of the Treasury is authorized to issue gold certificates to the Reserve Banks. Upon authorization,
the Reserve Banks acquire gold certificates by crediting equivalent amounts in dollars to the account
established for the Treasury. The gold certificates held by the Reserve Banks are required to be backed by
the gold owned by the Treasury. The Treasury may reacquire the gold certificates at any time, and the
Reserve Banks must deliver them to the Treasury. At such time, the Treasury’s account is charged, and the
Reserve Banks’ gold certificate accounts are reduced. The value of gold for purposes of backing the gold
certificates is set by law at $42 2/9 per fine troy ounce. Gold certificates are recorded by the Banks at
original cost. The Board of Governors allocates the gold certificates among the Reserve Banks once a year
based on each Reserve Bank’s average Federal Reserve notes outstanding during the preceding twelve
months.
Special drawing rights (SDR) are issued by the International Monetary Fund (IMF) to its members in proportion
to each member’s quota in the IMF at the time of issuance. SDRs serve as a supplement to international
monetary reserves and may be transferred from one national monetary authority to another. Under the law
providing for U.S. participation in the SDR system, the Secretary of the Treasury is authorized to issue
SDR certificates to the Reserve Banks. When SDR certificates are issued to the Reserve Banks, equivalent
amounts in U.S. dollars are credited to the account established for the Treasury and the Reserve Banks’
SDR certificate accounts are increased. The Reserve Banks are required to purchase SDR certificates, at
the direction of the Treasury, for the purpose of financing SDR acquisitions or for financing exchangestabilization operations. At the time SDR certificate transactions occur, the Board of Governors allocates
the SDR certificates among the Reserve Banks based upon each Reserve Bank’s Federal Reserve notes
outstanding at the end of the preceding calendar year. SDR certificates are recorded by the Banks at
original cost. There were no SDR certificate transactions during the years ended December 31, 2014 and
2013.
c. Coin
The amount reported as coin in the Consolidated Statements of Condition represents the face value of all United
States coin held by the Bank. The Bank buys coin at face value from the U.S. Mint in order to fill
depository institution orders.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

d. Loans
Loans to depository institutions are reported at their outstanding principal balances and interest income is
recognized on an accrual basis.
The Bank has elected the fair value option for all Term Asset-Backed Securities Loan Facility (TALF) loans in
accordance with ASC 825. Recording all TALF loans at fair value, rather than at the remaining principal
amount outstanding, provides the most appropriate presentation on the financial statements by matching the
change in fair value of TALF loans, the related put agreement with TALF LLC, and the valuation of the
beneficial interests in TALF LLC. Information regarding the TALF LLC’s assets and liabilities is presented
in Note 6. Unrealized gains (losses) on TALF loans that are recorded at fair value are reported as a
component of “Non-interest (loss) income: Other” in the Consolidated Statements of Income and
Comprehensive Income. The interest income on TALF loans is recognized based on the contracted rate
and is reported as “Interest Income: Term Asset-Backed Securities Loan Facility” in the Consolidated
Statements of Income and Comprehensive Income.
Loans, other than those recorded at fair value, are impaired when current information and events indicate that it
is probable that the Bank will not receive the principal and interest that are due in accordance with the
contractual terms of the loan agreement. Impaired loans are evaluated to determine whether an allowance
for loan loss is required. The Bank has developed procedures for assessing the adequacy of any allowance
for loan losses using all available information to identify incurred losses. This assessment includes
monitoring information obtained from banking supervisors, borrowers, and other sources to assess the
credit condition of the borrowers and, as appropriate, evaluating collateral values. Generally, the Bank
would discontinue recognizing interest income on impaired loans until the borrower’s repayment
performance demonstrates principal and interest would be received in accordance with the terms of the loan
agreement. If the Bank discontinues recording interest on an impaired loan, cash payments are first applied
to principal until the loan balance is reduced to zero; subsequent payments are applied as recoveries of
amounts previously deemed uncollectible, if any, and then as interest income.
Impaired loans include loans that have been modified in debt restructurings involving borrowers experiencing
financial difficulties. The allowance for loan restructuring is determined by discounting the restructured
cash flows using the original effective interest rate for the loan. Unless the borrower can demonstrate that
it can meet the restructured terms, the Bank discontinues recognizing interest income. Performance prior to
the restructuring, or significant events that coincide with the restructuring, are considered in assessing
whether the borrower can meet the new terms.
e. Securities Purchased Under Agreements to Resell, Securities Sold Under Agreements to Repurchase, and
Securities Lending
The Bank may engage in purchases of securities with primary dealers under agreements to resell (repurchase
transactions). These repurchase transactions are typically settled through a tri-party arrangement. In a triparty arrangement, two commercial custodial banks manage the collateral clearing, settlement, pricing, and
pledging, and provide cash and securities custodial services for and on behalf of the Bank and counterparty.
The collateral pledged must exceed the principal amount of the transaction by a margin determined by the
Bank for each class and maturity of acceptable collateral. Collateral designated by the Bank as acceptable
under repurchase transactions primarily includes Treasury securities (including Treasury InflationProtected Securities, Separate Trading of Registered Interest and Principal of Securities (STRIPS) Treasury
securities, and Treasury Floating Rate Notes (FRN)); direct obligations of several federal and GSE-related
agencies, including Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage
Corporation (Freddie Mac), and Federal Home Loan Banks; and pass-through federal agency and GSE
MBS. The repurchase transactions are accounted for as financing transactions with the associated interest
income recognized over the life of the transaction. These transactions are reported at their contractual
amounts as “System Open Market Account: Securities purchased under agreements to resell” and the
related accrued interest receivable is reported as a component of “System Open Market Account: Accrued
interest receivable” in the Consolidated Statements of Condition.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The Bank may engage in sales of securities under agreements to repurchase with primary dealers and with a set
of expanded counterparties which includes banks, savings associations, GSEs, and domestic money market
funds (Overnight and term reverse repurchase agreements). These reverse repurchase transactions, are
settled through a tri-party arrangement, similar to repurchase transactions. Reverse repurchase transactions
may also be executed with foreign official and international account holders as part of a service offering.
Reverse repurchase agreements are collateralized by a pledge of an amount of Treasury securities, GSE
debt securities, or federal agency and GSE MBS that are held in the SOMA. Reverse repurchase
transactions are accounted for as financing transactions, and the associated interest expense is recognized
over the life of the transaction. These transactions are reported at their contractual amounts as “System
Open Market Account: Securities sold under agreements to repurchase” and the related accrued interest
payable is reported as a component of “System Open Market Account: Other liabilities” in the
Consolidated Statements of Condition.
Treasury securities and GSE debt securities held in the SOMA may be lent to primary dealers, typically
overnight, to facilitate the effective functioning of the domestic securities markets. The amortized cost
basis of securities lent continues to be reported as “System Open Market Account: Treasury securities, net”
and “System Open Market Account: Government-sponsored enterprise debt securities, net,” as appropriate,
in the Consolidated Statements of Condition. Securities lending transactions are fully collateralized by
Treasury securities based on the fair values of the securities lent increased by a margin determined by the
Bank. The Bank charges the primary dealer a fee for borrowing securities, and these fees are reported as a
component of “Non-interest (loss) income: System Open Market Account: Other” in the Consolidated
Statements of Income and Comprehensive Income.
Activity related to securities purchased under agreements to resell, securities sold under agreements to
repurchase, and securities lending is allocated to each of the Reserve Banks on a percentage basis derived
from an annual settlement of the interdistrict settlement account that occurs in the second quarter of each
year.
f. Treasury Securities, Government-Sponsored Enterprise Debt Securities, Federal Agency and GovernmentSponsored Enterprise Mortgage-Backed Securities, Foreign Currency Denominated Investments, and
Warehousing Agreements
Interest income on Treasury securities, GSE debt securities, and foreign currency denominated investments
included in the SOMA is accrued using the straight-line method. Interest income on federal agency and
GSE MBS is accrued using the interest method and includes amortization of premiums, accretion of
discounts, and gains or losses associated with principal paydowns. Premiums and discounts related to
federal agency and GSE MBS are amortized or accreted over the term of the security to stated maturity, and
the amortization of premiums and accretion of discounts are accelerated when principal payments are
received. Gains and losses resulting from sales of securities are determined by specific issue based on
average cost. Treasury securities, GSE debt securities, and federal agency and GSE MBS are reported net
of premiums and discounts in the Consolidated Statements of Condition and interest income on those
securities is reported net of the amortization of premiums and accretion of discounts in the Consolidated
Statements of Income and Comprehensive Income.
In addition to outright purchases of federal agency and GSE MBS that are held in the SOMA, the Bank enters
into dollar roll transactions (dollar rolls), which primarily involve an initial transaction to purchase or sell
“to be announced” (TBA) MBS for delivery in the current month combined with a simultaneous agreement
to sell or purchase TBA MBS on a specified future date. During the years ended December 31, 2014 and
2013, the Bank executed dollar rolls to facilitate settlement of outstanding purchases of federal agency and
GSE MBS. The Bank accounts for dollar rolls as purchases or sales on a settlement-date basis. In addition,
TBA MBS transactions may be paired off or assigned prior to settlement. Net gains (losses) resulting from
these MBS transactions are reported as “Non-interest (loss) income: System Open Market Account: Federal
agency and government-sponsored enterprise mortgage-backed securities gains, net” in the Consolidated
Statements of Income and Comprehensive Income.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Foreign currency denominated investments, which can include foreign currency deposits, securities purchased
under agreements to resell, and government debt instruments, are revalued daily at current foreign currency
market exchange rates in order to report these assets in U.S. dollars. Foreign currency translation gains and
losses that result from the daily revaluation of foreign currency denominated investments are reported as
“Non-interest (loss) income: System Open Market Account: Foreign currency translation losses, net” in the
Consolidated Statements of Income and Comprehensive Income.
Because the Bank enters into commitments to buy Treasury securities, federal agency and GSE MBS, and
foreign government debt instruments and records the related securities on a settlement-date basis in
accordance with the FAM, the related outstanding commitments are not reflected in the Consolidated
Statements of Condition.
Activity related to Treasury securities, GSE debt securities, and federal agency and GSE MBS, including the
premiums, discounts, and realized gains and losses, is allocated to each Reserve Bank on a percentage basis
derived from an annual settlement of the interdistrict settlement account that occurs in the second quarter of
each year. Activity related to foreign currency denominated investments, including the premiums,
discounts, and realized and unrealized gains and losses, is allocated to each Reserve Bank based on the
ratio of each Reserve Bank’s capital and surplus to the Reserve Banks’ aggregate capital and surplus at the
preceding December 31.
Warehousing is an arrangement under which the FOMC has approved the exchange, at the request of the
Treasury, of U.S. dollars for foreign currencies held by the Treasury over a limited period. The purpose of
the warehousing facility is to supplement the U.S. dollar resources of the Treasury for financing purchases
of foreign currencies and related international operations. Warehousing agreements are valued daily at
current market exchange rates. Activity related to these agreements is allocated to each Reserve Bank
based on the ratio of each Reserve Bank’s capital and surplus to the Reserve Banks’ aggregate capital and
surplus at the preceding December 31.
The Bank is authorized to hold foreign currency working balances and execute foreign exchange contracts to
facilitate international payments and currency transactions it makes on behalf of foreign central bank and
U.S. official institution customers. These foreign currency working balances and contracts are not related
to the Bank's monetary policy operations. Foreign currency working balances are reported as a component
of “Other assets” in the Consolidated Statements of Condition and the related foreign currency translation
gains and losses that result from the daily revaluation of the foreign currency working balances and
contracts are reported as a component of “Non-interest (loss) income: Other” in the Consolidated
Statements of Income and Comprehensive Income.
g. Central Bank Liquidity Swaps
Central bank liquidity swaps, which are transacted between the Bank and a foreign central bank, can be
structured as either U.S. dollar or foreign currency liquidity swap arrangements.
Central bank liquidity swaps activity, including the related income and expense, is allocated to each Reserve
Bank based on the ratio of each Reserve Bank’s capital and surplus to the Reserve Banks’ aggregate capital
and surplus at the preceding December 31. The foreign currency amounts associated with these central
bank liquidity swap arrangements are revalued daily at current foreign currency market exchange rates.
U.S. dollar liquidity swaps
At the initiation of each U.S. dollar liquidity swap transaction, the foreign central bank transfers a specified
amount of its currency to a restricted account for the Bank in exchange for U.S. dollars at the prevailing
market exchange rate. Concurrent with this transaction, the Bank and the foreign central bank agree to a
second transaction that obligates the foreign central bank to return the U.S. dollars and the Bank to return
the foreign currency on a specified future date at the same exchange rate as the initial transaction. The
Bank’s allocated portion of the foreign currency amounts that the Bank acquires are reported as “System
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Open Market Account: Central bank liquidity swaps” in the Consolidated Statements of Condition.
Because the swap transaction will be unwound at the same U.S. dollar amount and exchange rate that were
used in the initial transaction, the recorded value of the foreign currency amounts is not affected by changes
in the market exchange rate.
The foreign central bank compensates the Bank based on the amount outstanding and the rate under the swap
agreement. The Bank’s allocated portion of the amount of compensation received during the term of the
swap transaction is reported as “Interest income: System Open Market Account: Central bank liquidity
swaps” in the Consolidated Statements of Income and Comprehensive Income.
Foreign currency liquidity swaps
The structure of foreign currency liquidity swap transactions involves the transfer by the Bank at the prevailing
market exchange rate, of a specified amount of U.S. dollars to an account for the foreign central bank in
exchange for its currency. The foreign currency amounts that the Bank receives are recorded as a liability.
h. Investments Held by Consolidated Variable Interest Entities
The investments held by consolidated VIEs consist primarily of short-term investments with maturities of
greater than three months and less than one year, cash and cash equivalents, commercial mortgage loans,
and swap contracts. Swap contracts consist of credit default swaps (CDS). Investments are reported as
“Investments held by consolidated variable interest entities” in the Consolidated Statements of Condition.
These investments are accounted for and classified as follows:


ML’s investments in debt securities are accounted for in accordance with FASB ASC Topic 320 (ASC
320) Investments – Debt and Equity Securities, and ML elected the fair value option for all eligible
assets and liabilities in accordance with ASC 825. Other financial instruments, including swap
contracts in ML, are recorded at fair value in accordance with FASB ASC Topic 815 (ASC 815)
Derivatives and Hedging.



ML II and ML III qualify as nonregistered investment companies under the provisions of FASB ASC
Topic 946 (ASC 946) Financial Services – Investment Companies, and therefore, all investments are
recorded at fair value in accordance with ASC 946.



TALF LLC follows the guidance in ASC 320 when accounting for any acquired asset-backed
securities (ABS) investments and has elected the fair value option for all eligible assets in accordance
with ASC 825.

i. Bank Premises, Equipment, and Software
Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is calculated on a
straight-line basis over the estimated useful lives of the assets, which range from 2 to 50 years. Major
alterations, renovations, and improvements are capitalized at cost as additions to the asset accounts and are
depreciated over the remaining useful life of the asset or, if appropriate, over the unique useful life of the
alteration, renovation, or improvement. Maintenance, repairs, and minor replacements are charged to
operating expense in the year incurred.
Costs incurred to acquire software are capitalized based on the purchase price. Costs incurred during the
application development stage to develop internal-use software are capitalized based on the cost of direct
services and materials associated with designing, coding, installing, and testing the software. Capitalized
software costs are amortized on a straight-line basis over the estimated useful lives of the software
applications, which generally range from two to five years. Maintenance costs and minor replacements
related to software are charged to operating expense in the year incurred.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Capitalized assets, including software, buildings, leasehold improvements, furniture, and equipment, are
impaired and an adjustment is recorded when events or changes in circumstances indicate that the carrying
amount of assets or asset groups is not recoverable and significantly exceeds the assets’ fair value.
j. Interdistrict Settlement Account
Each Reserve Bank aggregates the payments due to or from other Reserve Banks. These payments result from
transactions between the Reserve Banks and transactions that involve depository institution accounts held
by other Reserve Banks, such as Fedwire funds and securities transfers and check and ACH transactions.
The cumulative net amount due to or from the other Reserve Banks is reflected in the “Interdistrict
settlement account” in the Consolidated Statements of Condition.
An annual settlement of the interdistrict settlement account occurs in the second quarter of each year. As a
result of the annual settlement, the balance in each Bank’s interdistrict settlement account is adjusted by an
amount equal to the average balance in the account during the previous twelve-month period ended March
31. An equal and offsetting adjustment is made to each Bank’s allocated portion of SOMA assets and
liabilities.
k. Federal Reserve Notes
Federal Reserve notes are the circulating currency of the United States. These notes, which are identified as
issued to a specific Reserve Bank, must be fully collateralized. All of the Bank’s assets are eligible to be
pledged as collateral. The collateral value is equal to the book value of the collateral tendered with the
exception of securities, for which the collateral value is equal to the par value of the securities tendered.
The par value of securities sold under agreements to repurchase is deducted from the eligible collateral
value.
The Board of Governors may, at any time, call upon a Reserve Bank for additional security to adequately
collateralize outstanding Federal Reserve notes. To satisfy the obligation to provide sufficient collateral for
outstanding Federal Reserve notes, the Reserve Banks have entered into an agreement that provides for
certain assets of the Reserve Banks to be jointly pledged as collateral for the Federal Reserve notes issued
to all Reserve Banks. In the event that this collateral is insufficient, the Federal Reserve Act provides that
Federal Reserve notes become a first and paramount lien on all the assets of the Reserve Banks. Finally,
Federal Reserve notes are obligations of the United States government.
“Federal Reserve notes outstanding, net” in the Consolidated Statements of Condition represents the Bank’s
Federal Reserve notes outstanding, reduced by the Bank’s currency holdings of $56,971 million and
$38,515 million at December 31, 2014 and 2013, respectively.
At December 31, 2014 and 2013, all Federal Reserve notes outstanding, reduced by the Reserve Bank’s
currency holdings, were fully collateralized. At December 31, 2014, all gold certificates, all special
drawing rights certificates, and $1,282 billion of domestic securities held in the SOMA were pledged as
collateral. At December 31, 2014, no investments denominated in foreign currencies were pledged as
collateral.
l. Liabilities of Consolidated Variable Interest Entities
The liabilities of consolidated VIEs consist primarily of swap contracts, cash collateral on swap contracts, and
beneficial interests. Swap contracts are recorded at fair value in accordance with ASC 815. The VIEs
elected to measure all beneficial interests at fair value in accordance with ASC 825. Liabilities are reported
as “Liabilities of consolidated variable interest entities” in the Consolidated Statements of Condition.
Changes in fair value of the liabilities are recorded in “Non-interest (loss) income: Consolidated variable
interest entities gains, net” in the Consolidated Statements of Income and Comprehensive Income.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

m. Deposits
Depository Institutions
Depository institutions’ deposits represent the reserve and service-related balances in the accounts that
depository institutions hold at the Bank. The interest rates paid on required reserve balances and excess
balances are determined by the Board of Governors, based on an FOMC-established target range for the
federal funds rate. Interest payable is reported as a component of “Interest payable to depository
institutions” in the Consolidated Statements of Condition.
The Term Deposit Facility (TDF) consists of deposits with specific maturities held by eligible institutions at the
Reserve Banks. The Reserve Banks pay interest on these deposits at interest rates determined by auction.
Interest payable is reported as a component of “Interest payable to depository institutions” in the
Consolidated Statements of Condition. There were no deposits held by the Bank under the TDF at
December 31, 2014 and 2013.
Treasury
The Treasury general account is the primary operational account of the Treasury and is held at the Bank.
Other
Other deposits include the Bank’s allocated portion of foreign central bank and foreign government deposits
held at the Bank and those in which the Bank has an undivided interest. Other deposits also include cash
collateral and GSE deposits held by the Bank.
n. Deferred Credit Items
Deferred credit items represents the counterpart liability to items in process of collection. The amounts in this
account arise from deferring credit for deposited items until the amounts are collected. The balance in this
account can fluctuate significantly.
o. Capital Paid-in
The Federal Reserve Act requires that each member bank subscribe to the capital stock of the Reserve Bank in
an amount equal to six percent of the capital and surplus of the member bank. These shares are nonvoting,
with a par value of $100, and may not be transferred or hypothecated. As a member bank’s capital and
surplus changes, its holdings of Reserve Bank stock must be adjusted. Currently, only one-half of the
subscription is paid in, and the remainder is subject to call. A member bank is liable for Reserve Bank
liabilities up to twice the par value of stock subscribed by it.
By law, each Reserve Bank is required to pay each member bank an annual dividend of six percent on the paidin capital stock. This cumulative dividend is paid semiannually.
p. Surplus
The Board of Governors requires the Reserve Banks to maintain a surplus equal to the amount of capital paidin. On a daily basis, surplus is adjusted to equate the balance to capital paid-in. Accumulated other
comprehensive income is reported as a component of “Surplus” in the Consolidated Statements of
Condition and the Consolidated Statements of Changes in Capital. Additional information regarding the
classifications of accumulated other comprehensive income is provided in Notes 9, 10, and 11.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

q. Remittances to the Treasury
The Board of Governors requires the Reserve Banks to transfer excess earnings to the Treasury as interest on
Federal Reserve notes after providing for the costs of operations, payment of dividends, and reservation of
an amount necessary to equate surplus with capital paid-in. Currently, remittances to the Treasury are
made on a weekly basis. This amount is reported as “Earnings remittances to the Treasury” in the
Consolidated Statements of Income and Comprehensive Income. The amount due to the Treasury is
reported as “Accrued remittances to the Treasury” in the Consolidated Statements of Condition. See Note
13 for additional information on earnings remittances to the Treasury.
If earnings during the year are not sufficient to provide for the costs of operations, payment of dividends, and
equating surplus and capital paid-in, remittances to the Treasury are suspended. A deferred asset is
recorded that represents the amount of net earnings a Reserve Bank will need to realize before remittances
to the Treasury resume. Accounting adjustments, including those recorded as of or near the financial
statement date, can also result in suspending remittances to the Treasury and recording a deferred asset. As
of December 31, 2014, such adjustments resulted in recording a deferred asset in the amount of $923
million, which is reported as “Deferred asset – remittances to the Treasury” in the Consolidated Statements
of Condition. The deferred asset is reviewed for impairment and as of December 31, 2014, no impairment
existed.
r. Income and Costs Related to Treasury Services
When directed by the Secretary of the Treasury, the Bank is required by the Federal Reserve Act to serve as
fiscal agent and depositary of the United States Government. By statute, the Treasury has appropriations to
pay for these services. During the years ended December 31, 2014 and 2013, the Bank was reimbursed for
substantially all services provided to the Treasury as its fiscal agent.
s. Income from Services, Compensation Received for Service Costs Provided, and Compensation Paid for Service
Costs Incurred
The Bank has overall responsibility for managing the Reserve Banks’ provision of Fedwire funds and securities
services and, as a result, reports total System revenue for these services as “Income from services” in its
Consolidated Statements of Income and Comprehensive Income. The Bank compensates the applicable
Reserve Banks for the costs incurred to provide these services and reports the resulting compensation paid
as “Operating expenses: Compensation paid for service costs incurred” in its Consolidated Statements of
Income and Comprehensive Income.
The Federal Reserve Bank of Atlanta has overall responsibility for managing the Reserve Banks’ provision of
check and ACH services to depository institutions, and the Federal Reserve Bank of Chicago has overall
responsibility for managing the Reserve Banks’ provision of electronic access services to depository
institutions. The Reserve Bank that has overall responsibility for managing these services recognizes the
related total System revenue in its Consolidated Statements of Income and Comprehensive Income. The
Bank is compensated for costs incurred to provide these services by the Reserve Banks responsible for
managing these services and reports this compensation as “Non-interest (loss) income: Compensation
received for service costs provided” in its Consolidated Statements of Income and Comprehensive Income.
t. Assessments
The Board of Governors assesses the Reserve Banks to fund its operations and the operations of the Bureau.
These assessments are allocated to each Reserve Bank based on each Reserve Bank’s capital and surplus
balances. The Board of Governors also assesses each Reserve Bank for expenses related to producing,
issuing, and retiring Federal Reserve notes based on each Reserve Bank’s share of the number of notes
comprising the System’s net liability for Federal Reserve notes on December 31 of the prior year.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The Dodd-Frank Act requires that, after the transfer of its responsibilities to the Bureau on July 21, 2011, the
Board of Governors fund the Bureau in an amount not to exceed a fixed percentage of the total operating
expenses of the System as reported in the Board of Governors’ 2009 annual report, which totaled $4.98
billion. After 2013, the amount will be adjusted annually in accordance with the provisions of the DoddFrank Act. The percentage of total operating expenses of the System for the years ended December 31,
2014 and 2013 was 12.22 percent ($608.4 million) and 12 percent ($597.6 million), respectively. The
Bank’s assessment for Bureau funding is reported as “Assessments: Bureau of Consumer Financial
Protection” in the Consolidated Statements of Income and Comprehensive Income.
u. Fair Value
Certain assets and liabilities reported on the Bank’s Consolidated Statements of Condition are measured at fair
value in accordance with ASC 820, including TALF loans, investments and beneficial interests of the
consolidated VIEs, and assets of the Retirement Plan for Employees of the System. ASC 820 defines fair
value as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. ASC 820 establishes a three-level fair
value hierarchy that distinguishes between assumptions developed using market data obtained from
independent sources (observable inputs) and the Bank’s assumptions developed using the best information
available in the circumstances (unobservable inputs). The three levels established by ASC 820 are
described as follows:


Level 1 – Valuation is based on quoted prices for identical instruments traded in active markets.



Level 2 – Valuation is based on quoted prices for similar instruments in active markets, quoted
prices for identical or similar instruments in markets that are not active, and model-based
valuation techniques for which all significant assumptions are observable in the market.



Level 3 – Valuation is based on model-based techniques that use significant inputs and
assumptions not observable in the market. These unobservable inputs and assumptions reflect the
Bank’s estimates of inputs and assumptions that market participants would use in pricing the
assets and liabilities. Valuation techniques include the use of option pricing models, discounted
cash flow models, and similar techniques.

The inputs or methodology used for valuing assets and liabilities are not necessarily an indication of the risk
associated with those assets and liabilities.
v. Taxes
The Reserve Banks are exempt from federal, state, and local taxes, except for taxes on real property. The
Bank’s real property taxes were $15 million and $14 million for the years ended December 31, 2014 and
2013, respectively, and are reported as a component of “Operating expenses: Occupancy” in the
Consolidated Statements of Income and Comprehensive Income.
w. Restructuring Charges
The Reserve Banks recognize restructuring charges for exit or disposal costs incurred as part of the closure of
business activities in a particular location, the relocation of business activities from one location to another,
or a fundamental reorganization that affects the nature of operations. Restructuring charges may include
costs associated with employee separations, contract terminations, and asset impairments. Expenses are
recognized in the period in which the Bank commits to a formalized restructuring plan or executes the
specific actions contemplated in the plan and all criteria for financial statement recognition have been met.
In 2014, the Treasury announced plans to consolidate the provision of substantially all fiscal agent services for
the U.S. Treasury at the Federal Reserve Bank of Cleveland, the Federal Reserve Bank of Kansas City, the
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Bank, and the Federal Reserve Bank of St. Louis. The implementation plan associated with this
consolidation is expected to be completed in 2018.
Note 12 describes the Bank’s restructuring initiatives and provides information about the costs and liabilities
associated with employee separations and contract terminations. The costs associated with the impairment
of certain Bank assets are discussed in Note 7. Costs and liabilities associated with enhanced pension
benefits in connection with the restructuring activities for all of the Reserve Banks are recorded on the
books of the Bank and discussed in Note 9. Costs and liabilities associated with enhanced postretirement
benefits are discussed in Note 10.
x. Recently Issued Accounting Standards
In June 2013, the FASB issued Accounting Standards Update (ASU) 2013-08, Financial Services – Investment
Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements. This
update changed the assessment of whether an entity is an investment company by developing a new twotiered approach for that assessment, which requires an entity to possess certain fundamental characteristics
while allowing judgment in assessing other typical characteristics. This update, which is applicable to ML
II and ML III, was effective for the Bank for the year ended December 31, 2014 and did not have a material
effect on the Bank’s consolidated financial statements.
In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property,
Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of
Components of an Entity. This update changes the requirements for reporting discontinued operations,
which may include a component of an entity or a group of components of an entity, or a business or
nonprofit activity. This update is effective for the Bank for the year ending December 31, 2015, and is not
expected to have a material effect on the Bank’s consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This
update was issued to create common revenue recognition guidance for U.S. GAAP and International
Financial Reporting Standards. The guidance is applicable to all contracts for the transfer of goods or
services regardless of industry or type of transaction. This update requires recognition of revenue in a
manner that reflects the consideration that the entity expects to receive in return for the transfer of goods or
services to customers. This update is effective for the Bank for the year ending December 31, 2018, and is
not expected to have a material effect on the Bank’s consolidated financial statements.
In June 2014, the FASB issued ASU 2014-11, Transfer and Servicing (Topic 860): Repurchase-to-Maturity
Transactions, Repurchase Financings, and Disclosures. This update requires changes in the accounting for
repurchase to maturity transactions and repurchase financing transactions. Additionally, this update
provides guidance for the disclosures for certain transfers of financial assets accounted for as sales, where
the transferor retains substantially all of the exposure to economic return on the transferred financial asset;
and repurchase agreements, securities lending transactions, and repurchase to maturity transactions that are
accounted for as secured borrowings. This update is effective for the Bank for the year ending December
31, 2015, and is not expected to have a material effect on the Bank’s consolidated financial statements.
In August 2014, the FASB issued ASU 2014-13, Consolidation (Topic 810): Measuring the Financial Assets
and the Financial Liabilities of a Consolidated Collateralized Financing Entity. This update provides
guidance for the measurement of the financial assets and financial liabilities of a collateralized financing
entity (CFE). A reporting entity that consolidates a CFE may elect to measure the financial assets and
financial liabilities of that CFE using either the fair value or a measurement alternative as prescribed in the
accounting pronouncement. This update is effective for the Bank for the year ending December 31, 2016,
and is not expected to have a material effect on the Bank’s consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

LOANS
Loans to Depository Institutions
The Bank offers primary, secondary, and seasonal loans to eligible borrowers, and each program has its own interest
rate. Interest is accrued using the applicable interest rate established at least every 14 days by the Bank’s board
of directors, subject to review and determination by the Board of Governors. Primary and secondary loans are
extended on a short-term basis, typically overnight, whereas seasonal loans may be extended for a period of up
to nine months.
Primary, secondary, and seasonal loans are collateralized to the satisfaction of the Bank to reduce credit risk. Assets
eligible to collateralize these loans include consumer, business, and real estate loans; Treasury securities; GSE
debt securities; foreign sovereign debt; municipal, corporate, and state and local government obligations; ABS;
corporate bonds; commercial paper; and bank-issued assets, such as certificates of deposit, bank notes, and
deposit notes. Collateral is assigned a lending value that is deemed appropriate by the Bank, which is typically
fair value reduced by a margin. Loans to depository institutions are monitored daily to ensure that borrowers
continue to meet eligibility requirements for these programs. If a borrower no longer qualifies for these
programs, the Bank will generally request full repayment of the outstanding loan or, for primary or seasonal
loans, may convert the loan to a secondary credit loan. Collateral levels are reviewed daily against outstanding
obligations, and borrowers that no longer have sufficient collateral to support outstanding loans are required to
provide additional collateral or to make partial or full repayment.
Loans to depository institutions were $4 million and $10 million as of December 31, 2014 and 2013, respectively,
with a remaining maturity within 15 days.
At December 31, 2014 and 2013, the Bank did not have any loans that were impaired, restructured, past due, or on
non-accrual status, and no allowance for loan losses was required. There were no impaired loans during the
years ended December 31, 2014 and 2013.
TALF
The TALF assisted financial markets in accommodating the credit needs of consumers and businesses of all sizes by
facilitating the issuance of ABS collateralized by a variety of consumer and business loans. Each TALF loan
had an original maturity of three years, except loans secured by Small Business Administration (SBA) Pool
Certificates, loans secured by SBA Development Company Participation Certificates, or ABS backed by student
loans or commercial mortgage loans, which had an original maturity of five years if the borrower so elected.
The loans were secured by eligible collateral, with the Bank having lent an amount equal to the value of the
collateral, as determined by the Bank, less a margin.
The TALF loans were extended on a nonrecourse basis. If the borrower did not repay the loan, the Bank would have
enforced its rights in the collateral and might have sold the collateral to TALF LLC, a Delaware LLC,
established for the purpose of purchasing such assets. Pursuant to a put agreement with the Bank, TALF LLC
had committed to purchase assets that secure a TALF loan at a price equal to the principal amount outstanding
plus accrued but unpaid interest, regardless of the fair value of the collateral.
On October 29, 2014, the final outstanding TALF loan was repaid in full. Over the life of the program, all TALF
loans were repaid in full at or before their respective maturity dates, and as such, the Bank did not incur a loss
on any TALF loan. Subsequent to the repayment of the final outstanding TALF loan, the Bank terminated the
put agreement with TALF LLC. Refer to Note 6 for additional information related to TALF LLC.
At December 31, 2013, the aggregate remaining principal amount outstanding on TALF loans was $97 million. No
TALF loans were over 90 days past due or on nonaccrual status and all TALF loans were classified within
Level 2 of the valuation hierarchy.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

SYSTEM OPEN MARKET ACCOUNT
a.

Domestic Securities Holdings

The Bank conducts domestic open market operations and, on behalf of the Reserve Banks, holds the resulting
securities in the SOMA.
During the years ended December 31, 2014 and 2013, the Bank continued the purchase of Treasury securities and
federal agency and GSE MBS under the large-scale asset purchase programs authorized by the FOMC. In
September 2011, the FOMC announced that the Federal Reserve would reinvest principal payments from the
SOMA portfolio holdings of GSE debt securities and federal agency and GSE MBS in federal agency and GSE
MBS. In June 2012, the FOMC announced that it would continue this reinvestment policy. In September 2012,
the FOMC announced that the Federal Reserve would purchase additional federal agency and GSE MBS at a
pace of $40 billion per month. In December 2012, the FOMC announced that the Federal Reserve would also
purchase longer-term Treasury securities initially at a pace of $45 billion per month after its program to extend
the average maturity of its holdings of Treasury securities was completed in 2012. In December 2013, the
FOMC announced that it would slow the pace of its additional asset purchases. In October 2014, the FOMC
concluded its asset purchase program while maintaining its existing policy of reinvesting principal payments
from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities
and of rolling over maturing Treasury securities at auction.
The Bank’s allocated share of activity related to domestic open market operations was 61.376 percent and 55.454
percent at December 31, 2014 and 2013, respectively.
The Bank’s allocated share of Treasury securities, GSE debt securities, and federal agency and GSE MBS, net,
excluding accrued interest, held in the SOMA at December 31 was as follows (in millions):

No tes
Bo n d s
T o tal T reas u ry s ecu rities

$
$

Par
1,003,472
507,223
1,510,695

2014
Un amo rtize d
Un accreted
p remiu ms
d is co u n ts
$
16,983
$
(4,738)
76,488
(5,950)
$
93,471
$
(10,688)

T o tal amo rtized
co s t
$
1,015,717
577,761
$
1,593,478
$

24,544

1,098,074

GSE d eb t s ecu rities

23,739

805

Fed eral a g en cy an d GSE M BS

1,066,005

32,671

2013
Un amo rtize d
Un accreted
p remiu ms
d is co u n ts
$
18,513
$
(3,160)
71,281
(3,089)
$
89,794
$
(6,249)

T o tal amo rtized
co s t
$
829,103
479,300
$
1,308,403

$
$

No tes
Bo n d s
T o tal T reas u ry s ecu rities

$
$

Par
813,750
411,108
1,224,858

GSE d eb t s ecu rities
Fed eral a g en cy an d GSE M BS

$
$

31,732
826,355

1,055
24,833

$
$

(602)

(1)
(600)

32,786
850,588

The Bank enters into transactions for the purchase of securities under agreements to resell and transactions to sell
securities under agreements to repurchase as part of its monetary policy activities. These operations are for the
purpose of further assessing the appropriate structure of such operations in supporting the implementation of
monetary policy during normalization. In addition, transactions to sell securities under agreements to
repurchase are entered into as part of a service offering to foreign official and international account holders.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

There were no material transactions related to securities purchased under agreements to resell during the years ended
December 31, 2014 and 2013. Financial information related to securities sold under agreements to repurchase
for the years ended December 31 was as follows (in millions):
Allocated to the Bank
2014
2013
Overnight and term reverse repurchase agreements:
Contract amount outstanding, end of year

243,483

Average daily amount outstanding, during the year

Total SOMA
2014
2013

109,664

396,705

$ 197,755

78,586

2,308

130,281

4,161

Maximum balance outstanding, during the year

243,483

109,664

396,705

197,755

Securities pledged (par value), end of year

224,168

104,269

365,235

188,028

Securities pledged (market value), end of year

244,609

109,093

398,540

196,726

113,132

$ 118,169

Foreign official and international accounts:
Contract amount outstanding, end of year
Average daily amount outstanding, during the year

69,436

65,529

61,599

53,133

102,968

95,520

Maximum balance outstanding, during the year

75,022

65,529

122,232

118,169

Securities pledged (par value), end of year

66,504

67,889

108,355

122,424

Securities pledged (market value), end of year

69,436

65,533

113,132

118,175

509,837

$ 315,924

Total contract amount outstanding, end of year

312,919

175,193

Securities pledged as collateral, at December 31, 2014 and 2013, consisted solely of Treasury securities.
The remaining maturity distribution of Treasury securities, GSE debt securities, federal agency and GSE MBS
bought outright, and securities sold under agreements to repurchase that were allocated to the Bank at
December 31, 2014 and 2013 was as follows (in millions):

December 31, 2014:
Treasury securities
(par value)
GSE debt securities
(par value)
Federal agency and GSE

Within 15
days

16 days to
90 days

91 days to
1 year

Over 1 year
to 5 years

Over 5 years
to 10 years

MBS (par value)
Securities sold under
agreements to repurchase
(contract amount)
December 31, 2013:
Treasury securities
(par value)
GSE debt securities
(par value)
Federal agency and GSE
1

MBS (par value)
Securities sold under
agreements to repurchase
(contract amount)
1

2,158

683,073

421,427

Over 10
years

Total

404,034

$ 1,510,695

668

436

2,414

18,780

1,441

23,739

3,960

1,062,037

1,066,005

312,919

321,785

$ 1,224,858

165

423,297

479,513

1,281

4,197

4,806

20,112

1,302

31,732

1,413

824,939

826,355

175,193

The par amount shown for federal agency and GSE MBS is the remaining principal balance of the securities.

Federal agency and GSE MBS are reported at stated maturity in the table above. The estimated weighted average
life of these securities, which differs from the stated maturity primarily because it factors in scheduled payments
and prepayment assumptions, was approximately 5.7 and 6.5 years as of December 31, 2014 and 2013,
respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The amortized cost and par value of Treasury securities and GSE debt securities that were loaned from the SOMA
under securities lending agreements, at December 31 were as follows (in millions):

Allocated to the Bank
2014
Treasury securities (amortized cost)

2013

6,840

Treasury securities (par value)

Total SOMA

2014

9,512

2013

11,144

17,153

6,202

8,566

10,105

15,447

GSE debt securities (amortized cost)

388

609

633

1,099

GSE debt securities (par value)

378

585

616

1,055

The Bank enters into commitments to buy and sell Treasury securities and records the related securities on a
settlement-date basis. As of December 31, 2014, there were no outstanding commitments.
The Bank enters into commitments to buy and sell federal agency and GSE MBS and records the related securities
on a settlement-date basis. As of December 31, 2014, the total purchase price of the federal agency and GSE
MBS under outstanding purchase commitments was $28,692 million, none of which was related to dollar rolls.
The total purchase price of outstanding purchase commitments allocated to the Bank was $17,610 million, none
of which was related to dollar rolls. As of December 31, 2014, there were no outstanding sales commitments
for federal agency and GSE MBS. These commitments, which had contractual settlement dates extending
through January 2015, are principally for the purchase of TBA MBS for which the number and identity of the
pools that will be delivered to fulfill the commitment are unknown at the time of the trade. These commitments
are subject to varying degrees of off-balance-sheet market risk and counterparty credit risk that result from their
future settlement. The Bank requires the posting of cash collateral for MBS commitments as part of its risk
management practices used to mitigate the counterparty credit risk.
Other assets consist primarily of cash and short-term investments related to the federal agency and GSE MBS
portfolio. Other liabilities, which are primarily related to federal agency and GSE MBS purchases and sales,
includes the Bank’s obligation to return cash margin posted by counterparties as collateral under commitments
to purchase and sell federal agency and GSE MBS. In addition, other liabilities includes obligations that arise
from the failure of a seller to deliver MBS to the Bank on the settlement date. Although the Bank has
ownership of and records its investments in the MBS as of the contractual settlement date, it is not obligated to
make payment until the securities are delivered, and the amount included in other liabilities represents the
Bank’s obligation to pay for the securities when delivered. The amount of other assets and other liabilities
allocated to the Bank and held in the SOMA at December 31 was as follows (in millions):
A llo cated to th e Ban k
2014
Oth er as s ets :
M BS p o rtfo lio related cas h an d
s h o rt term in v es tmen ts

Oth er
T o tal o th er as s ets

To tal SOM A

2013

2014

2013

486

732

793

1,320

Oth er liab ilities :
Cas h marg in
Ob lig atio n s fro m M BS
tran s actio n fails

Oth er
T o tal o th er liab ilities

4
$

509

738

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7
$

830

1,331

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Accrued interest receivable on domestic securities holdings was $25,561 million and $23,405 million as of
December 31, 2014 and 2013, respectively, of which $15,688 million and $12,979 million, respectively, was
allocated to the Bank. These amounts are reported as a component of “System Open Market Account: Accrued
interest receivable” in the Consolidated Statements of Condition.
Information about transactions related to Treasury securities, GSE debt securities, and federal agency and GSE MBS
during the years ended December 31, 2014 and 2013, is summarized as follows (in millions):

Notes
Balance at December 31, 2012

Purchases
1
Sales
2
Realized gains, net
Principal payments and maturities
Amortization of premiums and accretion of discounts, net
Inflation adjustment on inflation-indexed securities
3
Annual reallocation adjustment
Balance at December 31, 2013
1
Purchases
1
Sales
2
Realized gains, net
Principal payments and maturities
Amortization of premiums and accretion of discounts, net
Inflation adjustment on inflation-indexed securities
3
Annual reallocation adjustment
Balance at December 31, 2014
Year-ended December 31, 2013
Supplemental information - par value of transactions:
4
Purchases
Sales
Year-ended December 31, 2014
Supplemental information - par value of transactions:
4
Purchases
Sales
1

2
3

640,390

Allocated to the Bank
Total
GSE debt
Treasury
Bonds
securities
securities

Federal
agency and
GSE MBS

$ 373,939

$ 1,014,329

$ 44,560

199,534
(12)
(3,351)
158
(7,616)
$
829,103
97,002
(274)
(3,315)
302
92,899
$ 1,015,717

114,741
(5,285)
357
(4,452)
$ 479,300
50,487
(6,060)
803
53,231
$ 577,761

314,275
(12)
(8,636)
515
(12,068)
$ 1,308,403
147,489
(274)
(9,375)
1,105
146,130
$ 1,593,478

(10,877)
(442)
(455)
$ 32,786
(10,797)
(352)
2,907
$ 24,544

481,230
(152,484)
(3,898)
(7,061)
$ 850,588
277,101
(16)
(122,984)
(4,340)
97,725
$ 1,098,074

198,450
-

$ 102,885
-

301,335
-

466,157
-

98,235
-

$ 49,133
-

147,368
-

267,709
(16)

Purchases and sales may include payments and receipts related to principal, premiums, discounts, and inflation compensation adjustments to the
basis of inflation-indexed securities. The amount reported as sales includes the realized gains and losses on such transactions. Purchases and
sales exclude MBS TBA transactions that are settled on a net basis.
Realized gains, net offset the amount of realized gains and losses included in the reported sales amount.
Reflects the annual adjustment to the Bank's allocated portion of the related SOMA securities that results from the annual settlement of the
interdistrict settlement account, as discussed in Note 3j.
Includes inflation compensation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

532,801

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Total SOMA

Balance at December 31, 2012
1

Purchases
1
Sales
2
Realized gains, net
Principal payments and maturities
Amortization of premiums and accretion of discounts, net
Inflation adjustment on inflation-indexed securities
Balance at December 31, 2013
1
Purchases
1
Sales
2
Realized gains, net
Principal payments and maturities
Amortization of premiums and accretion of discounts, net
Inflation adjustment on inflation-indexed securities
Balance at December 31, 2014
Year-ended December 31, 2013
Supplemental information - par value of transactions:
3
Purchases
Sales
Year-ended December 31, 2014
Supplemental information - par value of transactions:
3
Purchases
Sales

Notes

Bonds

Total
Treasury
securities

GSE debt
securities

Federal
agency and
GSE MBS

$ 1,142,219

$ 666,969

$ 1,809,188

$ 79,479

358,656
(21)
(6,024)
285
$ 1,495,115
165,306
(475)
(5,545)
500
$ 1,654,901

206,208
(9,503)
645
$ 864,319
85,826
(10,132)
1,327
$ 941,340

564,864
(21)
(15,527)
930
$ 2,359,434
251,132
(475)
(15,677)
1,827
$ 2,596,241

(19,562)
(795)
$ 59,122
(18,544)
(588)
$ 39,990

864,537
(273,990)
(7,008)
$ 1,533,860
466,384
(29)
(203,933)
(7,199)
$ 1,789,083

356,766
-

$ 184,956
-

541,722
-

837,490
-

167,497
-

$ 83,739
-

251,236
-

450,633
(29)

950,321

Includes inflation compensation.

b. Foreign Currency Denominated Investments
The Bank conducts foreign currency operations and, on behalf of the Reserve Banks, holds the resulting foreign
currency denominated investments in the SOMA.
The Bank holds foreign currency deposits with foreign central banks and the Bank for International Settlements and
invests in foreign government debt instruments of Germany, France, and Japan. These foreign government debt
instruments are backed by the full faith and credit of the issuing foreign governments. In addition, the Bank
enters into transactions to purchase Euro-denominated government debt securities under agreements to resell for
which the accepted collateral is the debt instruments issued by the governments of Belgium, France, Germany,
Italy, the Netherlands, and Spain, which are backed by the full faith and credit of those issuing governments.
The Bank’s allocated share of activity related to foreign currency operations was 32.156 percent and 31.964 percent
at December 31, 2014 and 2013, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Information about foreign currency denominated investments valued at amortized cost and foreign currency market
exchange rates at December 31 was as follows (in millions):
Allocated to Bank
2014
2013
Euro:
Foreign currency deposits
Securities purchased under agreements to resell
German government debt instruments
French government debt instruments

Japanese yen:
Foreign currency deposits
Japanese government debt instruments
Total

2,231
802
1,185

828
1,674
6,720

Total SOMA
2014
2013

2,407
815
766
766

6,936
2,494
3,687

935
1,894
7,583

2,576
5,207
$ 20,900

7,530
2,549
2,397
2,397

2,926
5,925
$ 23,724

Accrued interest receivable on foreign currency denominated investments was $83 million and $88 million as of
December 31, 2014 and 2013, respectively, of which $27 million and $28 million, respectively, was allocated to
the Bank. These amounts are reported as a component of “System Open Market Account: Accrued interest
receivable” in the Consolidated Statements of Condition.
The remaining maturity distribution of foreign currency denominated investments that were allocated to the Bank at
December 31, 2014 and 2013, was as follows (in millions):

December 31, 2014:
Euro
Japanese yen
Total
December 31, 2013:
Euro
Japanese yen
Total

Within 15
days

16 days to
90 days

91 days to 1
year

Over 1 year
to 5 years

$
$

1,169
886
2,055

2,249
996
3,245

$
$

903
126
1,029

576
121
697

$
$

529
495
1,024

691
598
1,289

$
$

1,617
995
2,612

1,238
1,114
2,352

Total
$
$

$
$

4,218
2,502
6,720

4,754
2,829
7,583

There were no foreign exchange contracts related to open market operations outstanding as of December 31, 2014.
The Bank enters into commitments to buy foreign government debt instruments and records the related securities on
a settlement-date basis. As of December 31, 2014, there were $137 million of outstanding commitments to
purchase foreign government debt instruments, of which $44 million was allocated to the Bank. These
securities settled on January 5, 2015, and replaced Euro-denominated government debt instruments held in the
SOMA that matured on that date. During 2014, there were purchases and maturities of foreign government debt
instruments of $5,494 million and $3,337 million, respectively, of which $1,766 million and $1,072 million,
respectively, were allocated to the Bank. There were no sales of foreign government debt instruments in 2014.
In connection with its foreign currency activities, the Bank may enter into transactions that are subject to varying
degrees of off-balance-sheet market risk and counterparty credit risk that result from their future settlement.
The Bank controls these risks by obtaining credit approvals, establishing transaction limits, receiving collateral
in some cases, and performing monitoring procedures.
At December 31, 2014 and 2013, there was no balance outstanding under the authorized warehousing facility.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

There were no transactions related to the authorized reciprocal currency arrangements with the Bank of Canada and
the Bank of Mexico during the years ended December 31, 2014 and 2013.
Foreign currency working balances held and foreign exchange contracts executed by the Bank to facilitate its
international payments and currency transactions it made on behalf of foreign central banks and U.S. official
institution customers were not material as of December 31, 2014 and 2013.
c.

Central Bank Liquidity Swaps

U.S. Dollar Liquidity Swaps
The Bank’s allocated share of U.S. dollar liquidity swaps was approximately 32.156 percent and 31.964 percent at
December 31, 2014 and 2013, respectively.
The total foreign currency held under U.S. dollar liquidity swaps in the SOMA at December 31, 2014 and 2013, was
$1,528 million and $272 million, respectively, of which $491 million and $87 million, respectively, was
allocated to the Bank.
The remaining maturity distribution of U.S. dollar liquidity swaps that were allocated to the Bank at December 31
was as follows (in millions):

Euro

Within 15
days

2014
16 days to
90 days

Japanese yen
Total

491

Total
$

491

Within 15
days

2013
16 days to
90 days

491
$

491

36
-

Total
$

87
-

Foreign Currency Liquidity Swaps
At December 31, 2014 and 2013, there was no balance outstanding related to foreign currency liquidity swaps.
d. Fair Value of SOMA Assets and Liabilities
The fair value amounts below are presented solely for informational purposes. Although the fair value of SOMA
security holdings can be substantially greater than or less than the recorded value at any point in time, these
unrealized gains or losses have no effect on the ability of the Reserve Banks, as the central bank, to meet their
financial obligations and responsibilities. Because SOMA securities are recorded at amortized cost, cumulative
unrealized gains (losses) are not recognized in the Consolidated Statements of Condition and the changes in
cumulative unrealized gains (losses) are not recognized in the Consolidated Statements of Income and
Comprehensive Income.
The fair value of the Treasury securities, GSE debt securities, federal agency and GSE MBS, and foreign
government debt instruments in the SOMA’s holdings is subject to market risk, arising from movements in
market variables such as interest rates and credit risk. The fair value of federal agency and GSE MBS is also
affected by the expected rate of prepayments of mortgage loans underlying the securities. The fair value of
foreign government debt instruments is also affected by currency risk. Based on evaluations performed as of
December 31, 2014, there are no credit impairments of SOMA securities holdings.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The following table presents the amortized cost, fair value, and cumulative unrealized gains (losses) on the Treasury
securities, GSE debt securities, and federal agency and GSE MBS held in the SOMA at December 31 (in
millions):
Allocated to the Bank
2014

Amortized cost

2013

Fair value

Cumulative
unrealized gains
(losses)

Amortized cost

Cumulative
unrealized gains
(losses)

Fair value

Treasury securities:
Notes

Bonds

1,015,717

1,033,196

577,761

Total Treasury securities

GSE debt securities
Federal agency and GSE MBS
Total domestic SOMA portfolio securities holdings

1,593,478

646,241
$

1,679,437

17,479
68,480

85,959

829,103

479,300
$

1,308,403

831,257

467,110
$

1,298,367

2,154
(12,190)

(10,036)

24,544

26,084

1,540

32,786

34,513

1,727

1,098,074

1,117,384

19,310

850,588

829,356

(21,232)

2,716,096

2,822,905

106,809

2,191,777

2,162,236

(29,541)

Memorandum - Commitments for:
Purchases of Treasury securities

Purchases of Federal agency and GSE MBS
Sales of Federal agency and GSE MBS

17,610

17,678

32,912

32,789

(123)

Total SOMA
2014

Amortized cost

2013

Fair value

Cumulative
unrealized gains
(losses)

Amortized cost

Cumulative
unrealized gains
(losses)

Fair value

Treasury securities:
Notes

Bonds

1,654,901

941,340

Total Treasury securities

GSE debt securities
Federal agency and GSE MBS
Total domestic SOMA portfolio securities holdings

2,596,241

1,683,377
1,052,916

2,736,293

28,476
111,576

140,052

1,495,115

864,319
$

2,359,434

1,499,000

842,336
$

2,341,336

3,885
(21,983)

(18,098)

39,990

42,499

2,509

59,122

62,236

3,114

1,789,083

1,820,544

31,461

1,533,860

1,495,572

(38,288)

4,425,314

4,599,336

174,022

3,952,416

3,899,144

(53,272)

Memorandum - Commitments for:
Purchases of Treasury securities
Purchases of Federal agency and GSE MBS
Sales of Federal agency and GSE MBS

28,692

28,803

111

59,350

59,129

(221)

The fair value of Treasury securities and GSE debt securities was determined using pricing services that provide
market consensus prices based on indicative quotes from various market participants. The fair value of federal
agency and GSE MBS was determined using a pricing service that utilizes a model-based approach that
considers observable inputs for similar securities.
The cost basis of securities purchased under agreements to resell, securities sold under agreements to repurchase,
and other investments held in the SOMA domestic portfolio approximate fair value.
At December 31, 2014 and 2013, the fair value of foreign currency denominated investments was $20,996 million
and $23,802 million, respectively, of which $6,751 million and $7,608 million, respectively, was allocated to
the Bank. The fair value of foreign government debt instruments was determined using pricing services that
provide market consensus prices based on indicative quotes from various market participants. The fair value of
foreign currency deposits and securities purchased under agreements to resell was determined by reference to
market interest rates.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The following table provides additional information on the amortized cost and fair values of the federal agency and
GSE MBS portfolio at December 31 (in millions):
2014
Distribution of MBS
holdings by coupon rate
Allocated to the Bank:
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
Total
Total SOMA:
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
Total

2013

Amortized cost
$

7,849
70,343
315,039
295,407
262,719
95,665
40,229
9,349
1,295
179
1,098,074

12,788
114,609
513,289
481,305
428,047
155,867
65,544
15,232
2,110
292
1,789,083

Fair value
$

7,744
69,642
310,738
300,370
270,795
103,017
43,404
10,074
1,403
197
1,117,384

12,618
113,468
506,280
489,390
441,204
167,844
70,719
16,414
2,287
320
1,820,544

Amortized cost
$

7,869
68,670
289,364
193,917
127,686
103,048
46,188
11,921
1,692
233
850,588

14,191
123,832
521,809
349,689
230,256
185,825
83,290
21,496
3,051
421
1,533,860

Fair value
7,502
65,690
268,551
187,633
128,162
108,402
48,782
12,598
1,788
248
829,356

13,529
118,458
484,275
338,357
231,113
195,481
87,968
22,718
3,225
448
1,495,572

The following tables present the realized gains and the change in the cumulative unrealized gains (losses)
related to SOMA domestic securities holdings during the years ended December 31, 2014 and 2013 (in
millions):
Allocated to Bank
2014

Realized gains1
Treasury securities
GSE debt securities
Federal agency and GSE MBS
Total

48
48

2013

Change in cumulative
unrealized gains (losses)2
$
93,917
(366)
41,329
$
134,880

Realized gains1
$

28
28

Change in cumulative
unrealized gains (losses)2
$
(101,571)
(1,339)
(45,481)
$
(148,391)

Total SOMA
2014

Realized gains
Treasury securities
GSE debt securities
Federal agency and GSE MBS
Total

81
81

Change in cumulative
unrealized gains (losses)2
$
158,150
(605)
69,749
$
227,294

2013

Realized gains
$

51
51

Change in cumulative
unrealized gains (losses)2
$
(183,225)
(2,411)
(81,957)
$
(267,593)

Realized gains are reported in “Non-interest (loss) income: System Open Market Account” in the Consolidated Statements of Income and
Comprehensive Income.
2 Because SOMA securities are recorded at amortized cost, the change in the cumulative unrealized gains (losses) is not reported in the
Consolidated Statements of Income and Comprehensive Income.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The amount of change in cumulative unrealized gains (losses) position, net, related to foreign currency denominated
investments was a gain of $18 million and a loss of $90 million for the years ended December 31, 2014 and
2013, respectively, of which $6 million and $29 million, respectively, were allocated to the Bank.
Treasury securities, GSE debt securities, federal agency and GSE MBS, and foreign government debt instruments
are classified as Level 2 within the ASC 820 hierarchy because the fair values are based on indicative quotes
and other observable inputs obtained from independent pricing services. The fair value hierarchy level of
SOMA financial assets is not necessarily an indication of the risk associated with those assets.
6.

INVESTMENTS HELD BY CONSOLIDATED VARIABLE INTEREST ENTITIES
a. Summary Information for Consolidated Variable Interest Entities
The classification of significant assets and liabilities of the consolidated VIEs at December 31, 2014 and 2013
was as follows (in millions):
2014
ML
Assets:
Short-term investments
Commercial mortgage loans
Swap contracts

Other investments1
Subtotal

1,399
124

11
1,534

Cash, cash equivalents, accrued interest
receivable, and other receivables
Total investments held by consolidated VIEs
Liabilities:
Beneficial interest in consolidated VIEs
Swap contracts2

Cash collateral on swap contracts

Other liabilities2
Total laibilities of consolidated VIEs

530
507
158

10
1,205

277
1,811

2013
ML III

ML II
-

Total
$

530
507
158
10
1,205

527
1,732

63
63

22
22

109
109

721
1,926

116

1
127

3
158

TALF LLC

3
274

Investments with a value of $8 million as of December 31, 2013 were recategorized from “Non-agency RMBS” to “Other investments”
to conform to the current year presentation.
2
Liabilities with a value of $155 million as of December 31, 2013 were recategorized from “Other liabilities” to two new line items labeled
“Swap contracts ” and “Cash collateral on swap contracts,” to conform to the current year presentation.

The Bank’s approximate maximum exposure to loss at December 31, 2014 and 2013 was $1,534 million and
$1,089 million, respectively. These estimates incorporate potential losses associated with the investments
recorded on the Bank’s balance sheet, net of the fair value of subordinated interests (beneficial interest in
consolidated VIEs). Additionally, information concerning the notional exposure on swap contracts is
contained in the ML credit risk section of this Note.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The net income attributable to ML, ML II, ML III, and TALF LLC for the year ended December 31, 2014, was
as follows (in millions):
ML
Interest income: Investments held by consolidated VIEs

ML II
77

Non-interest income:
Realized portfolio holdings gains, net
Unrealized portfolio holdings gains, net
Realized losses on beneficial interest in consolidated
VIEs
Unrealized gains on beneficial interest in consolidated
VIEs
Non-interest income: Consolidated VIEs gains, net
Total net interest income and non-interest income
Less: Professional fees
Net income attributable to consolidated VIEs

TALF LLC
-

Total
$

ML III

(11)

(7)

(98)

(116)

11
-

7
-

98
-

116
37

114
4

110

The net income attributable to ML, ML II, ML III, and TALF LLC for the year ended December 31, 2013 was
as follows (in millions):
ML
Interest income: Investments held by consolidated VIEs

ML II
2

ML III
4

TALF LLC
-

Total
$

Non-interest income:
Realized portfolio holdings gains, net1
Unrealized portfolio holdings gains, net1
Realized losses on beneficial interest in consolidated VIEs
Unrealized gains (losses) on beneficial interest in
consolidated VIEs
Non-interest income (losses): Consolidated VIEs gains
(losses), net
Total net interest income and non-interest income
Less: Professional fees
Net income attributable to consolidated VIEs
1

130

(573)

(1)

574

573

183

(1)

183

185
6

3
1

1
1

189
8

179

181

Portfolio holdings gains for ML with a value of $183 million for the year ended December 31, 2013 were recategorized from “Portfolio
holdings gains, net” to two new line items labeled “Realized portfolio holding gains, net” and “Unrealized portfolio holding gains, net”
to conform to the current year presentation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Following is a summary of the consolidated VIEs’ subordinated financial interest for the years ended December
31, 2014 and 2013 (in millions):

Fair value, at December 31, 2012

ML II
deferred
purchase price

ML III
equity
contribution

TALF
financial
interest
$

Total

786

803

Realized losses

573

Unrealized (gains) / losses

(574)

(573)

Payments
Fair value, at December 31, 2013

Realized losses
Unrealized gains
2

Payments
Fair value, at December 31, 2014
1
2

(687)
$

116

(11)

(7)

(98)

(116)

(11)
$

(7)
$

(98)
$

(116)
$

TALF LLC includes payments of $100 million of principal, $13 million of interest, and $574 million of contingent interest.
ML II includes payments of $11 million of variable deferred purchase price. ML III includes payments of $7 million of excess
amounts. TALF LLC includes payments of $98 million of contingent interest.

b. Maiden Lane LLC
To facilitate the merger of The Bear Stearns Companies, Inc. (Bear Stearns) and JPMorgan Chase & Co.
(JPMC), the Bank extended credit to ML in June 2008. ML is a Delaware LLC formed by the Bank to
acquire certain assets of Bear Stearns and to manage those assets. The assets acquired by ML were valued
at $29.9 billion as of March 14, 2008, the date that the Bank committed to the transaction, and largely
consisted of federal agency and GSE MBS, non-agency residential mortgage-back securities (RMBS),
commercial and residential mortgage loans, and derivatives and associated hedges.
The Bank extended a senior loan of approximately $28.8 billion and JPMC extended a subordinated loan of
$1.15 billion to finance the acquisition of the assets, both of which were repaid in full plus interest in 2012.
The Bank has continued and will continue to sell the remaining assets from the ML portfolio as market
conditions warrant and if the sales represent good value for the public. In accordance with the ML
agreements, proceeds from future asset sales will be distributed to the Bank as contingent interest after all
derivative instruments in ML have been terminated and paid or sold from the portfolio.
The following is a description of the significant holdings at December 31, 2014, and the associated risk for each
holding:
i.

Debt Securities
ML has investments in short-term instruments with maturities of greater than three months and less than one
year when acquired. As of December 31, 2014 and 2013, ML’s short-term instruments consisted of U.S.
Treasury bills.
Other investments are primarily comprised of non-agency RMBS and commercial mortgage-backed securities
(CMBS).

ii.

Derivative Instruments
Derivative contracts are instruments, such as swap contracts, that derive their value from underlying assets,
indexes, reference rates, or a combination of these factors. The ML portfolio is composed of derivative
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

financial instruments included in a total return swap (TRS) agreement with JPMC. ML and JPMC entered
into the TRS with reference obligations representing CDS primarily on CMBS and RMBS, with various
market participants, including JPMC.
On an ongoing basis, ML pledges collateral for credit or liquidity related shortfalls based on 20 percent of the
notional amount of sold CDS protection and 10 percent of the present value of future premiums on
purchased CDS protection. Failure to post this collateral constitutes a TRS event of default. Separately,
ML and JPMC engage in bilateral posting of collateral to cover the net mark-to-market (MTM) variations
in the swap portfolio. ML only nets the collateral received from JPMC from the bilateral MTM posting for
the reference obligations for which JPMC is the counterparty.
The values of ML’s cash and cash equivalents include cash collateral associated with the TRS of $128 million
and $149 million, as of December 31, 2014 and 2013, respectively. In addition, ML has pledged $87
million and $124 million U.S. Treasury bills to JPMC as of December 31, 2014 and 2013, respectively.
The following risks are associated with the derivative instruments held by ML as part of the TRS agreement
with JPMC:
Market Risk
CDS are agreements that provide protection for the buyer against the loss of principal and, in some cases,
interest on a bond or loan in case of a default by the issuer. The nature of a credit event is established by
the protection buyer and protection seller at the inception of a transaction, and such events include
bankruptcy, insolvency, or failure to meet payment obligations when due. The buyer of the CDS pays a
premium in return for payment protection upon the occurrence, if any, of a credit event. Upon the
occurrence of a triggering credit event, the maximum potential amount of future payments the seller could
be required to make under a CDS is equal to the notional amount of the contract. Such future payments
could be reduced or offset by amounts recovered under recourse or by collateral provisions outlined in the
contract, including seizure and liquidation of collateral pledged by the buyer.
ML’s derivatives portfolio consists of purchased and sold credit protection with differing underlying referenced
names that do not necessarily offset.
Credit Risk
Credit risk is the risk of financial loss resulting from failure by a counterparty to meet its contractual obligations
to ML. This can be caused by factors directly related to the counterparty, such as business or management.
Taking collateral is the most common way to mitigate credit risk. ML takes financial collateral in the form
of cash and marketable securities to cover JPMC counterparty risk as part of the TRS agreement with
JPMC. ML remains exposed to credit risk for counterparties, other than JPMC, related to the swaps that
underlie the TRS.
ML has entered into an International Swaps and Derivatives Association, Inc. master netting agreement with
JPMC in connection with the TRS. This agreement provides ML with the right to liquidate securities held
as collateral and to offset receivables and payables with JPMC in the event of default. This agreement also
establishes the method for determining the net amount of receivables and payables that ML is entitled to
receive from or owes to each counterparty to the swaps that underlie the TRS based upon the fair value of
the relevant CDS.
For the derivative balances reported in the Consolidated Statements of Condition, ML offsets its asset and
liability positions held with the same counterparty. In addition, ML offsets the cash collateral held with
JPMC against any net liabilities of JPMC with ML under the TRS. As of December 31, 2014 and 2013,
there were no amounts subject to an enforceable master netting agreement that were not offset in the
Consolidated Statements of Condition.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The following table summarizes the fair value and notional amounts of derivative instruments by contract type
on a gross basis as of December 31, 2014 and 2013, which is reported as a component of “Investments held
by consolidated variable interest entities” in the Consolidated Statements of Condition (in millions, except
contract data):
2014

2013

Gross derivative
assets

Gross derivative
liabilities

Notional
amounts

Notional

Gross derivative
assets

Gross derivative
liabilities

amounts

Credit derivatives:
1,2

CDS
Amounts offset in the Consolidated
Statements of Condition
Counterparty netting
Cash collateral
Net amounts in the Consolidated
Statements of Condition
1

2
3

240

(115)

(74)
(42)
$

632

345

74
-

124

(193)

(120)
(67)

(41)

899

120
-

158

(73)

CDS fair values as of December 31, 2014 for assets and liabilities include interest receivables of $1 million and payables of $4 million. CDS fair values as of
December 31, 2013 for assets and liabilities includes interest receivables of $15 million and payables of $2 million.
There were 210 and 269 CDS contracts outstanding as of December 31, 2014 and 2013, respectively.
Represents the sum of gross long and gross short notional derivative contracts. The change in notional amounts is representative of the volume of
activity for the year ended December 31, 2014.

The table below summarizes certain information regarding protection bought and protection sold through CDS
as of December 31 (in millions):
Maximum potential recovery (payout) / notional
2014
Years to maturity

Credit ratings of the reference obligation
Credit protection bought:
Investment grade (AAA to BBB-)
Non-investment grade (BB+ or lower)
Total credit protection bought
Credit protection sold:
Investment grade (AAA to BBB-)
Non-investment grade (BB+ or lower)
Total credit protection sold

1 year or less

After 1 year
through 3
years

After 3 years
through 5
years

After 5 years

8
8

5
5

$
$

Fair value

Total

22
378
400

(4)
(215)
(219)

27
386
413

(4)
(215)
(219)

$
$

2013

2014

2013

Total

Asset /
(Liability)

56
537
593

(13)
(293)
(306)

239
239

(111)
(111)

$
$

2
327
329

(3)
(188)
(191)

Currency Risk
Currency risk is the risk of financial loss resulting from exposure to changes in exchange rates between two
currencies. Previously, under the terms of the TRS, JPMC was allowed to post cash collateral in the form of
either U.S. dollar or Euro-denominated currencies to cover the net MTM variation in the swap portfolio.
When JPMC posted collateral in Euro currency, this risk was mitigated by daily variation margin updates
that capture the movement in the value of the swap portfolio in addition to any movement in exchange rates
on the swap collateral. In November 2014, the terms of the TRS were amended such that JPMC is no
longer allowed to post cash collateral in Euro currency.
Swap collateral received that is denominated in a foreign currency is translated into U.S. dollar amounts using
the prevailing exchange rate as of the date of the consolidated financial statements. There is no gain or loss
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

associated with this foreign denominated collateral as the asset and liability positions associated with it are
offsetting.
c. Maiden Lane II LLC
The Bank extended credit to ML II, a Delaware LLC formed to purchase non-agency RMBS from the
reinvestment pool of the securities lending portfolios of several regulated U.S. insurance subsidiaries of
American International Group, Inc. (AIG). ML II purchased from the AIG subsidiaries non-agency RMBS
with an approximate fair value of $20.8 billion as of October 31, 2008. ML II financed this purchase by
borrowing $19.5 billion from the Bank and through the deferral of $1.0 billion of the purchase price
payable to the AIG subsidiaries. Both the loan and the fixed deferred purchase price were paid in full plus
interest in 2012.
On March 19, 2012, ML II was dissolved and the Bank began the process of winding up in accordance with and
as required by Delaware law and the agreements governing ML II. As part of that process, during the year
ended December 31, 2014, after paying expenses, ML II distributed its remaining assets to the Bank and to
AIG and its subsidiaries in accordance with the agreement. Distributions were made to the Bank in the
form of contingent interest totaling $53 million and to AIG and its subsidiaries in the form of variable
deferred purchase price totaling $11 million during the year ended December 31, 2014. On November 12,
2014, a certificate of cancellation was filed in the office of the Delaware Secretary of State thereby
terminating the legal existence of ML II.
d. Maiden Lane III LLC
The Bank extended credit to ML III, a Delaware LLC formed to purchase ABS collateralized debt obligations
(CDOs) from certain third-party counterparties of AIG Financial Products Corp (AIGFP). ML III
borrowed approximately $24.3 billion from the Bank, and AIG provided an equity contribution of $5.0
billion to ML III. The proceeds were used to purchase ABS CDOs with a fair value of $29.6 billion as of
October 31, 2008. The counterparties received $26.8 billion net of principal and interest received and
finance charges paid on the ABS CDOs. The LLC also made a payment to AIGFP of $2.5 billion
representing the over collateralization previously posted by AIGFP and retained by counterparties in
respect of terminated CDS as compared to the LLC’s fair value acquisition prices calculated as of October
31, 2008. The aggregate amount of principal and interest proceeds from CDOs received after the
announcement date, but prior to the settlement dates, net of financing costs, amounted to approximately
$0.3 billion and therefore reduced the amount of funding required at settlement by $0.3 billion, from $29.6
billion to $29.3 billion. Both the loan and the equity contribution were repaid in full plus interest in 2012.
On September 10, 2012, ML III was dissolved, and the Bank began the process of winding up in accordance
with and as required by Delaware law and the agreements governing ML III. As part of that process,
during the year ended December 31, 2014, after paying expenses, ML III distributed its remaining assets to
the Bank and to AIG in accordance with the agreement. Distributions were made to the Bank in the form of
contingent interest totaling $14 million and to AIG in the form of excess amounts totaling $7 million during
the year ended December 31, 2014. On November 12, 2014, a certificate of cancellation was filed in the
office of the Delaware Secretary of State, thereby terminating the legal existence of ML III.
e. TALF LLC
As discussed in Note 4, TALF LLC was formed in connection with the implementation of the TALF. TALF
LLC was established for the limited purpose of purchasing any ABS that might be surrendered to the Bank
by borrowers under the TALF or, in certain limited circumstances, TALF loans. Funding for TALF LLC’s
purchases of these securities was derived first through the fees received by TALF LLC from the Bank for
this commitment and any interest earned on its investments. If that funding had proved insufficient for the
purchases TALF LLC had committed to make under the put agreement, the Treasury and the Bank had
committed to lend to TALF LLC. On March 25, 2009, the Treasury provided initial funding to TALF LLC
of $100 million. On January 15, 2013, the Treasury and the Bank agreed to eliminate their funding
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

commitments to TALF LLC. Pursuant to this agreement on February 6, 2013, TALF LLC repaid in full the
outstanding principal and accrued interest on the Treasury loan.
On October 31, 2014, TALF LLC was dissolved and the Bank began the process of winding up in accordance
with and as required by Delaware law and the agreements governing TALF LLC. As part of that process,
during the year ended December 31, 2014, after paying expenses, TALF LLC distributed its remaining
assets to the Treasury and to the Bank in accordance with the agreement. Distributions were made in the
form of contingent interest to the Treasury totaling $98 million and $573 million and to the Bank totaling
$11 million and $64 million during the years ended December 31, 2014 and 2013, respectively. On
November 26, 2014, a certificate of cancellation was filed in the office of the Delaware Secretary of State
thereby terminating the legal existence of TALF LLC.
f. Fair Value Measurement
The consolidated VIEs have adopted ASC 820 and ASC 825 and have elected the fair value option for all
securities and mortgage loans held by ML and TALF LLC. ML II and ML III qualify as nonregistered
investment companies under the provisions of ASC 946, and therefore, all investments are recorded at fair
value in accordance with ASC 820. In addition, the Bank has elected to record the beneficial interests in
ML II, ML III, and TALF LLC at fair value.
The accounting and classification of these investments appropriately reflect the VIEs’ and the Bank’s intent
with respect to the purpose of the investments and most closely reflect the amount of the assets available to
liquidate the entities’ obligations.
i.

Determination of Fair Value
The consolidated VIEs value their investments and cash equivalents on the basis of last available bid prices or
current market quotations provided by dealers or pricing services selected under the supervision of the
Bank’s designated investment manager. To determine the value of a particular investment, pricing services
may use certain information with respect to market transactions in such investments or comparable
investments, various relationships observed in the market between investments, quotations from dealers,
and pricing metrics and calculated yield measures based on valuation methodologies commonly employed
in the market for such investments. The fair value of swap contracts is provided by JPMC as calculation
agent and is reviewed by the investment manager.
Market quotations may not represent fair value in certain instances in which the investment manager and the
VIEs believe that facts and circumstances applicable to an issuer, a seller, a purchaser, or the market for a
particular investment cause such market quotations to not reflect the fair value of an investment. In such
cases or when market quotations are unavailable, the investment manager applies proprietary valuation
models that use collateral performance scenarios and pricing metrics derived from the reported
performance of investments with similar characteristics as well as available market data to determine fair
value.
Due to the uncertainty inherent in determining the fair value of investments that do not have a readily available
fair value, the fair value of these investments may differ from the values that may ultimately be realized
and paid.
The fair value of the liability for the beneficial interests of consolidated VIEs is estimated based upon the fair
value of the underlying assets held by the VIEs. The holders of these beneficial interests do not have
recourse to the general credit of the Bank.

ii.

Valuation Methodologies for Level 3 Assets and Liabilities
In certain cases in which there is limited trading activity for particular investments or current market quotations
are not available or reflective of the fair value of an instrument, the valuation is based on models that use
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

inputs, estimates, and assumptions that market participants would use in pricing the investments. To the
extent that such inputs, estimates, and assumptions are not observable, the investments are classified within
Level 3 of the valuation hierarchy. For instance, in valuing certain debt securities and whole mortgage
loans, the determination of fair value is based on proprietary valuation models when external price
information is not available. Key inputs to the model may include market spreads or yield estimates for
comparable instruments, performance data (i.e. prepayment rates, default rates, and loss severity), valuation
estimates for underlying property collateral, projected cash flows, and other relevant contractual features.
For the swap contracts, all of which are categorized as Level 3 assets and liabilities, there are various valuation
methodologies. In each case, the fair value of the instrument underlying the swap is a significant input
used to derive the fair value of the swap. When there are broker or dealer prices available for the
underlying instruments, the fair value of the swap is derived based on those prices. When the instrument
underlying the swap is a market index (i.e. CMBS index), the closing market index price, which can also be
expressed as a credit spread, is used to determine the fair value of the swap. In the remaining cases, the fair
value of the underlying instrument is principally based on inputs and assumptions not observable in the
market (i.e. discount rates, prepayment rates, default rates, and recovery rates).
iii.

Inputs for Level 3 Assets and Liabilities
The following table presents the valuation techniques and ranges of significant unobservable inputs generally
used to determine the fair values of Level 3 assets and liabilities as of December 31, 2014 (in millions,
except for input values):

Investment
Swap contracts, net

1
2

Fair value
$

125

Principal
valuation technique

Unobservable inputs
1

Discounted cash flows

Credit spreads
Discount rate
Constant prepayment rate
Constant default rate
Loss severity

Weighted

Range of
input values
2,893 bps
5%
0%
0%
40%

average

- 12,683 bps
25%
8%
99%
95%

9,023 bps
17%
1%
6%
52%

Implied spread on closing market prices for index positions.
Weighted averages are calculated based on the fair value of the respective instruments.

The following table presents the valuation techniques and ranges of significant unobservable inputs generally
used to determine the fair values of Level 3 assets and liabilities as of December 31, 2013 (in millions,
except for input values):

Investment
Commercial
mortgage loans

Swap contracts, net

1
2

Fair value
$

507

152

Principal
valuation technique
Discounted cash flows

Discounted cash flows

Unobservable inputs
Discount rate
Property capitalization rate
Net operating income
growth rate
1

Credit spreads
Discount rate
Constant prepayment rate
Constant default rate
Loss severity

Implied spread on closing market prices for index positions.
Weighted averages are calculated based on the fair value of the respective instruments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Weighted

Range of
input values

average

13%

12%
7%

2,259 bps
5%
0%
0%
40%

- 8,870 bps 6,299 bps
25%
15%
17%
3%
30%
6%
95%
54%

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

iv.

Sensitivity of Level 3 Fair Value Measurements to Changes in Unobservable Inputs
The following provides a general description of the impact of a change in an unobservable input on the fair
value measurement and the interrelationship of unobservable inputs.
I.

Commercial mortgage loans

In general, an increase in isolation in either the discount rate or the property capitalization rate, which is the
ratio between the net operating income produced by an asset and its current fair value, would result in a
decrease in the fair value measurement; while an increase in net operating income growth rate, in isolation
would result in an increase in the fair value measurement. For each of the relationships described above, the
inverse would also generally apply.
II.

Swap contracts

For CDS with reference obligations on CMBS, an increase in credit spreads would generally result in a higher
fair value measurement for protection buyers and a lower fair value measurement for protection sellers. The
inverse would also generally apply to this relationship given a decrease in credit spreads.
For CDS with reference obligations on RMBS or other ABS assets, changes in the discount rate, constant
prepayment rate, constant default rate, and loss severity would have an uncertain effect on the overall fair
value measurement. This is because, in general, changes in these inputs could potentially have a different
impact on the fair value measurement of an individual CDS based on the structure, payment status, and
other relevant contractual details of its underlying reference obligation. Additionally, changes in the fair
value measurement based on variations in the inputs used generally cannot be extrapolated because the
relationship between each input is not perfectly correlated.
The following tables present the financial instruments recorded in VIEs at fair value as of December 31, 2014
by ASC 820 hierarchy (in millions):
Level 11
Assets:
Short-term investments
Cash equivalents3
Swap contracts
Other investments
Total assets
Liabilities:
Swap contracts

Level 21

1,399
274
1,673

Netting2

Level 3

6
6

240
5
245

115

Total fair value

(116)
(116)

1,399
274
124
11
1,808

(74)

There were no transfers between Level 1 and Level 2 during the year ended December 31, 2014.
Derivative receivables and payables and the related cash collateral received and paid are shown net when a master netting agreement
exists.
3
Cash equivalents consist primarily of money market funds.
2

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The following tables present the financial instruments recorded in VIEs at fair value as of December 31, 2013
by ASC 820 hierarchy (in millions):
Level 11
Assets:
Short-term investments
Cash equivalents3
Commercial mortgage loans
Swap contracts

Other investments4
Total assets

530
569
1,099

Liabilities:
Beneficial interest in consolidated VIEs
Swap contracts
Total liabilities

Level 21

2
2

116
116

Netting2

Level 3
$

507
345
8
860

193
193

Total fair value

(187)

10
1,774

(120)
(120)

530
569
507
158

116
73
189

There were no transfers between Level 1 and Level 2 during the year ended December 31, 2013.
Derivative receivables and payables and the related cash collateral received and paid are shown net when a master netting agreement
exists.
3
Cash equivalents consist primarily of money market funds.
4
Investments with a fair value of $2 million and $6 million that were classified as Level 2 and Level 3 instruments respectively, as of
December 31, 2013 were recategorized from “Non-agency RMBS” to “Other investments” to conform to the current year presentation.
2

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) as of December 31, 2014 (in millions). Unrealized gains
and losses related to those assets still held at December 31, 2014 are reported as a component of
“Investments held by consolidated variable interest entities, net” in the Consolidated Statements of
Condition.

Fair value
December 31,
2013
Assets:
Commercial mortgage loans
Other investments
Total assets
Swap contracts, net

1
2

Purchases, sales,
issuances and
settlements, net

Net
realized/unrealized
gains (losses)

Gross transfers
in1

Gross transfers
out1,2

16
(4)
12

(523)
4
(519)

507
8
515

152

(48)

Change in
unrealized gains
(losses) related to
financial instruments
held at December
31, 2014

Fair value
December 31,
2014
$

(3)
(3)

5
5

(4)
(4)

125

The amount of transfers is based on the fair values of the transferred assets at the beginning of the reporting period.
Other investments, with a December 31, 2013 fair value of $3 million, were transferred from Level 3 to Level 2 because they are valued at
December 31, 2014 based on non-observable inputs (Level 3). These investments were valued in the prior year based on quoted prices
for identical or similar assets in non-active markets or model-based techniques for which all significant inputs are observable (Level 2).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The following table presents the gross components of purchases, sales, issuances, and settlements, net, shown
for the year ended December 31, 2014 (in millions):

Purchases
Assets:
Commercial mortgage loans
Other investments

Sales

Issuances

Settlements

Purchases, sales,
issuances, and
settlements, net

(523)
3

(523)
4

Total assets

(520)

(519)

Swap contracts, net

(24)

(48)

Includes paydowns

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) as of December 31, 2013 (in millions). Unrealized gains
and losses related to those assets still held at December 31, 2013 are reported as a component of
“Investments held by consolidated variable interest entities, net” in the Consolidated Statements of
Condition.

Assets:
Commercial mortgage loans

Fair value
December 31,
2012

Purchases, sales,
issuances, and
settlements, net

Net
realized/unrealized
gains (losses)

Gross
transfers in1,2

Gross transfers
out1

Fair value
December 31,
2013

Change in unrealized
gains (losses) related to
financial instruments
held at December 31,
2013

466

(163)

204

507

183

Other investments3
Total assets

55
521

(69)
(232)

18
222

4
4

8
515

(4)
179

Swap contracts, net

473

(268)

(53)

152

(53)

The amount of transfers is based on the fair values of the transferred assets at the beginning of the reporting period.
Other investments, with a December 31, 2012 fair value of $4 million, were transferred from Level 2 to Level 3 because they are valued
at December 31, 2013, based on non-observable inputs (Level 3). These investments were valued in the prior year based on quoted
prices for identical or similar assets in non-active markets or model-based techniques for which all significant inputs are observable
(Level 2).
3
Investments with a fair value of $6 million and $0 million as of December 31, 2013 were recategorized from “Non-agency RMBS” and
“CDOs,” respectively, to “Other investments” to conform to the current year presentation. All other associated activity for those same
asset classes was also recategorized to the “Other investments” line.
2

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The following table presents the gross components of purchases, sales, issuances, and settlements, net, shown
for the year ended December 31, 2013 (in millions):

Purchases
Assets:
Commercial mortgage loans
Other investments
Total assets

1
2

Issuances

Settlements

(88)

(75)

(163)

7
7

(79)
(167)

3
(72)

(69)
(232)

(153)

(115)

(268)

Swap contracts

Sales

Purchases, sales,
issuances, and
settlements, net

Includes paydowns.
Investments with net activity of $4 million and $0 million for the year ended December 31, 2013 were recategorized from “ Nonagency RMBS” and “ CDOs,” respectively, to “ Other investments” to conform to the current year presentation. All other activity
for those same asset classes was also recategorized to the “ Other investments” line.

g. Professional Fees
The consolidated VIEs have recorded costs for professional services provided, among others, by several
nationally recognized institutions that serve as investment managers, administrators, and custodians for the
VIEs’ assets. The fees charged by the investment managers, custodians, administrators, auditors, attorneys,
and other service providers, are recorded in “Operating Expenses: Other” in the Consolidated Statements of
Income and Comprehensive Income.
7.

BANK PREMISES, EQUIPMENT, AND SOFTWARE
Bank premises and equipment at December 31 were as follows (in millions):
2014
Bank premises and equipment:
Land and land improvements
Buildings
Building machinery and equipment
Construction in progress
Furniture and equipment
Subtotal

Accumulated depreciation

2013
68
526
104
4
95
797

(322)

68
502
109
6
87
772
(306)

Bank premises and equipment, net

475

466

Depreciation expense, for the years ended December 31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The Bank leases space to outside tenants with remaining lease terms ranging from one to nine years. Rental income
from such leases was $6.4 million and $4.8 million for the years ended December 31, 2014 and 2013,
respectively, and is reported as a component of “Non-interest (loss) income: Other” in the Consolidated
Statements of Income and Comprehensive Income. Future minimum lease payments that the Bank will receive
under noncancelable lease agreements in existence at December 31, 2014, are as follows (in millions):
2015
2016
2017
2018
2019
Thereafter
Total

5
4
3
3
3
10
28

The Bank had capitalized software assets, net of amortization, of $119 million and $108 million at December 31,
2014 and 2013, respectively. Amortization expense was $20 million and $22 million for the years ended
December 31, 2014 and 2013, respectively. Capitalized software assets are reported as a component of “Other
assets” in the Consolidated Statements of Condition and the related amortization is reported as a component of
“Operating expenses: Other” in the Consolidated Statements of Income and Comprehensive Income.
8.

COMMITMENTS AND CONTINGENCIES
In conducting its operations, the Bank enters into contractual commitments, normally with fixed expiration dates or
termination provisions, at specific rates and for specific purposes.
At December 31, 2014, the Bank was obligated under noncancelable leases for premises and equipment with
remaining terms ranging from one to approximately nine years. These leases provide for increased lease
payments based upon increases in real estate taxes, operating costs, or selected price indexes.
Rental expense under operating leases for certain operating facilities, warehouses, and data processing and office
equipment (including taxes, insurance, and maintenance when included in rent), net of sublease rentals, was $4
million and $9 million for the years ended December 31, 2014 and 2013, respectively.
Future minimum lease payments under noncancelable operating leases, net of sublease rentals, with remaining terms
of one year or more, at December 31, 2014, are as follows (in millions):

2015
2016
2017
2018
2019
Thereafter
Future minimum lease payments

Operating leases
$
3
2
2
1
1
4
$
13

Under the Insurance Agreement of the Reserve Banks, each of the Reserve Banks has agreed to bear, on a perincident basis, a share of certain losses in excess of 1 percent of the capital paid-in of the claiming Reserve
Bank, up to 50 percent of the total capital paid-in of all Reserve Banks. Losses are borne in the ratio of a
Reserve Bank’s capital paid-in to the total capital paid-in of all Reserve Banks at the beginning of the calendar
year in which the loss is shared. No claims were outstanding under the agreement at December 31, 2014 and
2013.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The Bank is involved in certain legal actions and claims arising in the ordinary course of business. Although it is
difficult to predict the ultimate outcome of these actions, in management’s opinion, based on discussions with
counsel, the legal actions and claims will be resolved without material adverse effect on the financial position or
results of operations of the Bank.
Other Commitments
In support of financial market stability activities, the Bank may enter into commitments to provide financial
assistance to financial institutions. There were no remaining unfunded contractual commitments related to
commercial mortgage loans in ML at December 31, 2014. The Bank had remaining unfunded contractual
commitments related to commercial mortgage loans in ML of $40 million at December 31, 2013.
9.

RETIREMENT AND THRIFT PLANS
Retirement Plans
The Bank currently offers three defined benefit retirement plans to its employees, based on length of service and
level of compensation. Substantially all of the employees of the Reserve Banks, Board of Governors, and
Office of Employee Benefits of the Federal Reserve System participate in the Retirement Plan for Employees of
the Federal Reserve System (System Plan). Under the Dodd-Frank Act, newly hired Bureau employees are
eligible to participate in the System Plan. In addition, employees at certain compensation levels participate in
the Benefit Equalization Retirement Plan (BEP) and certain Reserve Bank officers participate in the
Supplemental Retirement Plan for Select Officers of the Federal Reserve Banks (SERP).
The Bank, on behalf of the System, recognizes the net asset or net liability and costs associated with the System Plan
in its consolidated financial statements. During the years ended December 31, 2014 and 2013, certain costs
associated with the System Plan were reimbursed by the Bureau.
Following is a reconciliation of the beginning and ending balances of the System Plan benefit obligation (in
millions):
2014
Estimated actuarial present value of projected
benefit obligation at January 1
Service cost-benefits earned during the period
Interest cost on projected benefit obligation
Actuarial loss (gain)
Contributions by plan participants
Special termination benefits
Benefits paid
Estimated actuarial present value of projected
benefit obligation at December 31

2013

10,476
355
530
2,630
5
15
(370)

11,468
407
472
(1,527)
5
6
(355)

13,641

10,476

In October 2014, the Society of Actuaries released new mortality tables (RP-2014) and mortality projection scales
(MP-2014) for use in valuations of benefits liabilities. The adoption of these new mortality tables and new
mortality projection scales, adjusted for the System’s recent mortality experience and the retirement rates of
System retirees, resulted in a net increase of the System Plan projected benefit obligation of approximately $935
million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Following is a reconciliation showing the beginning and ending balance of the System Plan assets, the funded status,
and the accrued pension benefit costs (in millions):

2014
Estimated plan assets at January 1 (of which $10,687 and $9,440 is
measured at fair value as of January 1, 2014 and 2013, respectively)
Actual return on plan assets
Contributions by the employers
Contributions by plan participants
Benefits paid
Estimated plan assets at December 31 (of which $12,608 and $10,687 is
measured at fair value as of December 31, 2014 and 2013, respectively)
Funded status and accrued pension benefit costs
Amounts included in accumulated other comprehensive loss are shown below:
Prior service cost
Net actuarial loss
Total accumulated other comprehensive loss

2013

$ 10,808
1,734
492
5
(370)

$ 12,669

$ 10,808

(972)

(356)
(3,484)
$ (3,840)

9,566
683
909
5
(355)

332

(456)
(1,928)
$ (2,384)

The Bank, on behalf of the System, funded $480 million and $900 million during the years ended December 31,
2014 and 2013, respectively. The Bureau is required by the Dodd-Frank Act to fund the System plan for each
Bureau employee based on an established formula. During the years ended December 2014 and 2013, the
Bureau funded contributions of $12.4 million and $8.9 million, respectively.
Accrued pension benefit costs are reported as a component of “Prepaid pension benefit costs” if the funded status is
a net asset or “Accrued benefit costs” if the funded status is a net liability in the Consolidated Statements of
Condition.
The accumulated benefit obligation for the System Plan, which differs from the estimated actuarial present value of
projected benefit obligation because it is based on current rather than future compensation levels, was $11,985
million and $9,308 million at December 31, 2014 and 2013, respectively.
The weighted-average assumptions used in developing the accumulated pension benefit obligation for the System
Plan as of December 31 were as follows:

Discount rate
Rate of compensation increase

2014
4.05%
4.00%

2013
4.92%
4.50%

Net periodic benefit expenses for the years ended December 31, 2014 and 2013, were actuarially determined using a
January 1 measurement date. The weighted-average assumptions used in developing net periodic benefit
expenses for the System Plan for the years were as follows:

Discount rate
Expected asset return
Rate of compensation increase

2014
4.92%
7.00%
4.50%

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2013
4.00%
6.50%
4.50%

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Discount rates reflect yields available on high-quality corporate bonds that would generate the cash flows necessary
to pay the System Plan’s benefits when due. The expected long-term rate of return on assets is an estimate that
is based on a combination of factors, including the System Plan’s asset allocation strategy and historical returns;
surveys of expected rates of return for other entities’ plans and for various asset classes; a projected return for
equities and fixed income investments based on real interest rates, inflation expectations, and equity risk
premiums; and surveys of expected returns in equity and fixed income markets.
The components of net periodic pension benefit expense (credit) for the System Plan for the years ended December
31 are shown below (in millions):

2014
Service cost - benefits earned during the period
Interest cost on projected benefit obligation
Amortization of prior service cost
Amortization of net loss
Expected return on plan assets
Net periodic pension benefit expense
Special termination benefits
Bureau of Consumer Financial Protection contributions
Total periodic pension benefit expense

2013
355
530
100
101
(759)
327
15
(12)
330

407
472
103
284
(638)
628
6
(9)
625

Estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic pension
benefit expense in 2015 are shown below (in millions):

Prior service cost
Net actuarial loss
Total

93
205
298

Following is a summary of expected benefit payments, excluding enhanced retirement benefits (in millions):

2015
2016
2017
2018
2019
2020 - 2024
Total

418
442
469
499
530
3,126
5,484

The System’s Committee on Investment Performance (CIP) is responsible for establishing investment policies,
selecting investment managers, and monitoring the investment managers’ compliance with its policies. At
December 31, 2014, the System Plan’s assets were held in ten investment vehicles: three actively-managed
long-duration fixed income portfolios, a passively-managed long-duration fixed income portfolio, an indexed

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

U.S. equity fund, an indexed non-U.S. developed-markets equity fund, an indexed emerging-markets equity
fund, a private equity limited partnership, a private equity separate account, and a money market fund.
The diversification of the System Plan’s investments is designed to limit concentration of risk and the risk of loss
related to an individual asset class. The three actively-managed long-duration fixed income portfolios are
separate accounts benchmarked to a custom benchmark of 55 percent Barclays Long Credit Index and 45
percent Citigroup 15+ years U.S. Treasury STRIPS Index. This custom benchmark was selected as a proxy to
match the liabilities of the Plan and the guidelines for these portfolios are designed to limit portfolio deviations
from the benchmark. The passively-managed long-duration fixed-income portfolio is invested in two
commingled funds and is benchmarked to 55 percent Barclays Long Credit Index and 45 percent Barclays 20+
STRIPS Index. The indexed U.S. equity fund is intended to track the overall U.S. equity market across market
capitalizations and is benchmarked to the Dow Jones U.S. Total Stock Market Index. The indexed non-U.S.
developed-markets equity fund is intended to track the Morgan Stanley Capital International (MSCI) World exUS Investible Markets Index (IMI), which includes stocks from 23 markets deemed by MSCI to be “developed
markets.” The indexed emerging-markets equity fund is intended to track the MSCI Emerging Markets IMI
Index, which includes stocks from 21 markets deemed by MSCI to be “emerging markets.” The three indexed
equity funds include stocks from across the market capitalization spectrum (i.e., large-, mid- and small-cap
stocks). The private equity limited partnership invests globally across various private equity strategies and the
private equity separate account invests in other private equity limited partnerships globally across various
strategies. The private equity separate account invests in various private equity funds and coinvestment
opportunities globally in private companies and targets returns in excess of public markets over a complete
market cycle. Finally, the money market fund, which invests in short term Treasury and agency debt and
repurchase agreements backed by Treasury and agency debt, is the repository for cash balances and adheres to a
constant dollar methodology.
Permitted and prohibited investments, including the use of derivatives, are defined in either the trust agreement (for
the passively-managed long-duration fixed income portfolio) or the investment guidelines (for the remaining
investments). The CIP reviews the trust agreement and approves all investment guidelines as part of the
selection of each investment to ensure that the trust agreement is consistent with the CIP’s investment
objectives for the System Plan’s assets.
The System Plan’s policy weight and actual asset allocations at December 31, by asset category, were as follows:

U.S. equities
International equities
Emerging markets equities
Fixed income
Cash
Total

Policy weight
26.3%
18.5%
5.2%
50.0%
0.0%
100.0%

Actual asset allocations
2014
2013
25.8%
29.7%
17.6%
18.3%
4.9%
1.9%
51.2%
49.4%
0.5%
0.7%
100.0%
100.0%

In June 2013, the CIP approved a change in the allocation and benchmarks for the System Plan’s public equity
portfolio. The new benchmark is the MSCI All Country World Investible Markets Index. This benchmark
change has reduced the System Plan’s holdings in U.S. equities, increased the System Plan’s holdings of
developed markets international equities, and added an investment in emerging market equities. The CIP
approved a phased six-month implementation period for these changes, commencing in September 2013 for
developed market equities and November 2013 for emerging market equities.
Employer contributions to the System Plan may be determined using different assumptions than those required for
financial reporting. The System Plan’s anticipated funding level for 2015 is $480 million. In 2015, the Bank
plans to make monthly contributions of $40 million and will reevaluate the monthly contributions upon
completion of the 2015 actuarial valuation. The Bank’s projected benefit obligation, funded status, and net
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

pension expenses for the BEP and the SERP at December 31, 2014 and 2013, and for the years then ended,
were not material.
Determination of Fair Value
The System Plan’s publicly available investments are valued on the basis of the last available bid prices or current
market quotations provided by dealers, or pricing services. To determine the value of a particular investment,
pricing services may use information on transactions in such investments, quotations from dealers, pricing
metrics, market transactions in comparable investments, relationships observed in the market between
investments, and calculated yield measures based on valuation methodologies commonly employed in the
market for such investments.
Because of the uncertainty inherent in determining the fair value of investments that do not have a readily available
fair value, the fair value of these investments may differ significantly from the values that would have been
reported if a readily available fair value had existed for these investments and may differ materially from the
values that may ultimately be realized.
The following tables present the financial instruments recorded at fair value as of December 31 by ASC 820
hierarchy (in millions):
2014
Description

Level 1
2

Short-term investments
Treasury and Federal
agency securities
Corporate bonds
Other fixed income securities
Commingled funds
Private Equity
Total
1
2

Level 2

111
138

Level 3

2,179
2,109
443
7,598
12,423

Total

121

47
47

2,290
2,109
443
7,598
47
12,608

140

14
14

1,603
1,773
362
6,795
14
10,687

There were no transfers between Level 1 and Level 2 during the year.
Short-term investments includes cash equivalents of $63 million.

2013
Description

Level 1
2

Short-term investments
Treasury and Federal
agency securities
Corporate bonds
Other fixed income securities
Commingled funds
Private Equity
Total
1
2

Level 2

38
52

126

1,565
1,773
362
6,795
10,621

There were no transfers between Level 1 and Level 2 during the year.
Short-term investments includes cash equivalents of $78 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Level 3

Total

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The System Plan enters into futures contracts, traded on regulated exchanges, to manage certain risks and to
maintain appropriate market exposure in meeting the investment objectives of the System Plan. The System
Plan bears the market risk that arises from any unfavorable changes in the value of the securities or indexes
underlying these futures contracts. The use of futures contracts involves, to varying degrees, elements of
market risk in excess of the amount recorded in the Consolidated Statements of Condition. The guidelines
established by the CIP further reduce risk by limiting the net futures positions, for most fund managers, to 15
percent of the market value of the advisor’s portfolio.
At December 31, 2014 and 2013, a portion of short-term investments was available for futures trading. There were
$1 million and $8 million of Treasury securities pledged as collateral for the years ended December 31, 2014
and 2013, respectively.
Thrift Plan
Employees of the Bank participate in the defined contribution Thrift Plan for Employees of the Federal Reserve
System (Thrift Plan). The Bank matches 100 percent of the first 6 percent of employee contributions from the
date of hire and provides an automatic employer contribution of 1 percent of eligible pay. The Bank’s Thrift
Plan contributions totaled $27 million and $26 million for the years ended December 31, 2014 and 2013,
respectively, and are reported as a component of “Operating expenses: Salaries and benefits” in the
Consolidated Statements of Income and Comprehensive Income.
10. POSTRETIREMENT BENEFITS OTHER THAN RETIREMENT PLANS AND POSTEMPLOYMENT BENEFITS
Postretirement Benefits Other Than Retirement Plans
In addition to the Bank’s retirement plans, employees who have met certain age and length-of-service requirements
are eligible for both medical and life insurance benefits during retirement.
The Bank funds benefits payable under the medical and life insurance plans as due and, accordingly, has no plan
assets.
Following is a reconciliation of the beginning and ending balances of the benefit obligation (in millions):

2014
Accumulated postretirement benefit obligation at January 1
Service cost benefits earned during the period
Interest cost on accumulated benefit obligation
Net actuarial loss (gain)
Special termination benefits loss
Contributions by plan participants
Benefits paid
Medicare Part D subsidies
Plan amendments
Accumulated postretirement benefit obligation at December 31

2013
343
15
17
35
3
(20)
1
394

382
16
14
(53)
1
3
(20)
1
(1)
343

At December 31, 2014 and 2013, the weighted-average discount rate assumptions used in developing the
postretirement benefit obligation were 3.96 percent and 4.79 percent, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Discount rates reflect yields available on high-quality corporate bonds that would generate the cash flows necessary
to pay the plan’s benefits when due. The System Plan discount rate assumption setting convention uses an
unrounded rate.
Following is a reconciliation of the beginning and ending balance of the plan assets, and the unfunded
postretirement benefit obligation and accrued postretirement benefit costs (in millions):

2014
Fair value of plan assets at January 1
Contributions by the employer
Contributions by plan participants
Benefits paid
Medicare Part D subsidies
Fair value of plan assets at December 31
Unfunded obligation and accrued postretirement benefit cost

2013

16
3
(20)
1
-

394

343

1
(99)
(98)

1
(69)
(68)

Amounts included in accumulated other comprehensive loss are shown below:
Prior service cost
Net actuarial loss
Total accumulated other comprehensive loss

Accrued postretirement benefit costs are reported as a component of “Accrued benefit costs” in the Consolidated
Statements of Condition.
For measurement purposes, the assumed health-care cost trend rates at December 31 are as follows:

Health-care cost trend rate assumed for next year
Rate to which the cost trend rate is assumed to decline
(the ultimate trend rate)
Year that the rate reaches the ultimate trend rate

2014
6.60%

2013
7.00%

4.75%
2019

5.00%
2019

Assumed health-care cost trend rates have a significant effect on the amounts reported for health-care plans. A one
percentage point change in assumed health-care cost trend rates would have the following effects for the year
ended December 31, 2014 (in millions):

Effect on aggregate of service and interest cost components
of net periodic postretirement benefit costs
Effect on accumulated postretirement benefit obligation

One percentage
point increase

One percentage
point decrease

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7
61

(5)
(49)

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

The following is a summary of the components of net periodic postretirement benefit expense for the years ended
December 31 (in millions):
2014
Service cost-benefits earned during the period
Interest cost on accumulated benefit obligation
Amortization of net actuarial loss
Total periodic expense
Special termination benefits loss
Net periodic postretirement benefit expense

2013

15
17
5
37
37

16
14
12
42
1
43

Estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic
postretirement benefit expense in 2015 are shown below:
Prior service cost
Net actuarial loss
Total

$
$

7
7

Net postretirement benefit costs are actuarially determined using a January 1 measurement date. At January 1, 2014
and 2013, the weighted-average discount rate assumptions used to determine net periodic postretirement benefit
costs were 4.79 percent and 3.75 percent, respectively.
Net periodic postretirement benefit expense is reported as a component of “Operating expenses: Salaries and
benefits” in the Consolidated Statements of Income and Comprehensive Income.
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 established a prescription drug
benefit under Medicare (Medicare Part D) and a federal subsidy to sponsors of retiree health-care benefit plans
that provide benefits that are at least actuarially equivalent to Medicare Part D. The benefits provided under the
Bank’s plan to certain participants are at least actuarially equivalent to the Medicare Part D prescription drug
benefit. The estimated effects of the subsidy are reflected in actuarial loss in the accumulated postretirement
benefit obligation and net periodic postretirement benefit expense.
Federal Medicare Part D subsidy receipts were $1.0 million and $0.8 million in the years ended December 31, 2014
and 2013, respectively. Expected receipts in 2015, related to benefits paid in the years ended December 31,
2014 and 2013, are $0.6 million and $0.8 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

Following is a summary of expected postretirement benefit payments (in millions):
Without subsidy
$
18
18
19
19
20
116

2015
2016
2017
2018
2019
2020 - 2024

Total

210

With subsidy
17
17
18
18
19
108

197

Postemployment Benefits
The Bank offers benefits to former or inactive employees. Postemployment benefit costs are actuarially determined
using a December 31 measurement date and include the cost of medical, dental, and vision insurance; survivor
income; disability benefits; and self-insured workers’ compensation expenses. The accrued postemployment
benefit costs recognized by the Bank at December 31, 2014 and 2013, were $41 million and $37 million,
respectively. This cost is included as a component of “Accrued benefit costs” in the Consolidated Statements of
Condition. Net periodic postemployment benefit expense included in 2014 and 2013 operating expenses were
$10 million and $2 million, respectively, and are recorded as a component of “Operating expenses: Salaries and
benefits” in the Consolidated Statements of Income and Comprehensive Income.
11. ACCUMULATED OTHER COMPREHENSIVE INCOME AND OTHER COMPREHENSIVE INCOME
Following is a reconciliation of beginning and ending balances of accumulated other comprehensive income (loss)
as of December 31 (in millions):

Balance at January 1

Amount related
to defined
benefit
retirement plan

2014
Amount related
to
postretirement
benefits other
than retirement
plans

Change in funded status of benefit plans:
Prior service costs arising during the year

(68)

Amortization of prior service cost
Change in prior service costs related to benefit
plans
Net actuarial gain (loss) arising during the year

100

101

(2,452)

(98)

103

284

(1,586)

(3,938)

(2,384)

1
2

103

1
53
1

104
1,625
2

294

1,959
$

(4,475)

1
1

1,856

(1,486)
$

(132)

103
1,572

106

(30)
$

(4,343)

100
100
(1,692)

(30)

(1,456)
(3,840)

Total
accumulated
other
comprehensive
loss

(35)

(1,556)

2013
Amount related
to
postretirement
benefits other
than retirement
plans

100
(1,657)

Amortization of net actuarial loss
Change in actuarial gain (losses) related to
benefit plans
Change in funded status of benefit plans - other
comprehensive income (loss)
Balance at December 31

(2,384)

Total
accumulated
other
comprehensive
income loss

Amount
related to
defined
benefit
retirement
plan

1,919

64
$

(68)

2,023
$

Reclassification is reported as a component of “Operating Expenses: Net periodic pension expense” in the Consolidated Statements of Income and
Comprehensive Income.

Reclassification is reported as a component of “Operating Expenses: Salaries and benefits” in the Consolidated Statements of Income and Comprehensive Income.

(2,452)

Additional detail regarding the classification of accumulated other comprehensive loss is included in Notes 9 and 10.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

12. BUSINESS RESTRUCTURING CHARGES
In 2014, the Treasury announced a plan to consolidate the number of Reserve Banks providing fiscal agent services
to the Treasury from ten to four. As a result of this initiative, the International Treasury Services operations
performed by the Bank will be transitioned to the Federal Reserve Bank of Kansas City.
The Bank had no material business restructuring charges in 2014 or 2013.
13. DISTRIBUTION OF COMPREHENSIVE INCOME
In accordance with Board policy, Reserve Banks remit excess earnings, after providing for dividends and the
amount necessary to equate surplus with capital paid-in, to the U.S. Treasury as earnings remittances to the
Treasury. The following table presents the distribution of the Bank’s comprehensive income in accordance with
the Board’s policy for the years ended December 31 (in millions):
2014
Dividends on capital stock
Transfer to (from) surplus - amount required to
equate surplus with capital paid-in
Earnings remittances to the Treasury
Total distribution

549

363
59,625
60,537

2013
$

526

100
45,941
46,567

14. SUBSEQUENT EVENTS
There were no subsequent events that require adjustments to or disclosures in the consolidated financial statements
as of December 31, 2014. Subsequent events were evaluated through March 11, 2015, which is the date that
the consolidated financial statements were available to be issued.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DIRECTORS OF THE
FEDERAL RESERVE BANK
OF NEW YORK

DIRECTORS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

CHANGES IN DIRECTORS
2015
Member banks in this District have reelected
PAUL P. MELLO a class A director for a three-year
term beginning January 2015. Mr. Mello, who is
President and Chief Executive Officer of Solvay Bank,
Solvay, N.Y., has been serving as a class A director
since March 2012.

The Board of Governors has reappointed
EMILY K. RAFFERTY, President, The Metropolitan
Museum of Art, New York, N.Y., a class C director
for a three-year term beginning January 2015 and
redesignated her Chair of the Board and Federal
Reserve Agent for the year 2015. Ms. Rafferty has
been serving as a class C director since January 2011.

Member banks in this District have reelected
TERRY J. LUNDGREN a class B director for a threeyear term beginning January 2015. Mr. Lundgren,
who is Chairman and Chief Executive Officer of
Macy’s Inc., New York, N.Y., has been serving as a
class B director since August 2011.

The Board of Governors has also redesignated
SARA HOROWITZ, Executive Director, Freelancers
Union, Brooklyn, N.Y., as Deputy Chair for the
year 2015. Ms. Horowitz has been serving as a class C
director since January 2013.

DIRECTORS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

DIRECTORS OF THE FEDERAL RESERVE BANK
OF NEW YORK
DIRECTORS

TERM EXPIRES DEC. 31

CLASS

PAUL P. MELLO
President and Chief Executive Officer
Solvay Bank, Solvay, N.Y.

2014

RICHARD L. CARRIÓN
Chairman and Chief Executive Officer
Popular, Inc., San Juan, P.R.

2015

GERALD H. LIPKIN
Chairman, President, and Chief Executive Officer
Valley National Bank, Wayne, N.J.

2016

TERRY J. LUNDGREN
Chairman and Chief Executive Officer
Macy’s Inc., New York, N.Y.

2014

GLENN H. HUTCHINS
Co-Founder
Silver Lake, New York, N.Y.

2015

DAVID M. COTE
Chairman and Chief Executive Officer
Honeywell International Inc., Morristown, N.J.

2016

EMILY K. RAFFERTY, Chair and Federal Reserve Agent
President
The Metropolitan Museum of Art, New York, N.Y.

2014

SARA HOROWITZ
Executive Director
Freelancers Union, Brooklyn, N.Y.

2015

MARC TESSIER-LAVIGNE
President
The Rockefeller University, New York, N.Y.

2016

DIRECTORS

ADVISORY GROUPS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

ADVISORY GROUPS
ADVISORY COUNCIL ON
SMALL BUSINESS AND
AGRICULTURE
MICHAEL ARNOFF
President
Arnoff Moving and Storage
Albany, N.Y.
ALEJANDRO BALLESTER
President
Ballester Hermanos, Inc.
Cataño, Puerto Rico
STEWART BRUNHOUSE
President
A&A Company, Inc.
South Plainfield, N.J.
WILLIAM M. BYRNE, JR.
Chairman of the Board
Byrne Dairy, Inc.
Weedsport, N.Y.
DAVID CAMPBELL
President and Chief Executive Officer
Ring’s End, Inc.
Darien, Conn.
ERIC CASLOW
President
Acme Smoked Fish Corporation
Brooklyn, N.Y.
MARGARET KRUMHOLZ
President
Disc Graphics Inc.
Hauppauge, N.Y.
DEBORAH LEO
President
Retail Solutions Center
Freeport, N.Y.

COMMUNITY DEPOSITORY INSTITUTIONS
ADVISORY COUNCIL
Chair

MICHAEL J. CASTELLANA
President and Chief Executive Officer
SEFCU
Albany, N.Y.

JAMES W. FULMER
Chairman, President,
and Chief Executive Officer
Tompkins Bank of Castile
Batavia, N.Y.

ROBERT G. ALLEN
President and Chief Executive Officer
Teachers Federal Credit Union
Hauppauge, N.Y.

SALEEM IQBAL
President and Chief Executive Officer
HAB Bank
New York, N.Y.

JOHN R. BURAN
President and Chief Executive Officer
Flushing Bank and Flushing
Financial Corp.
Lake Success, N.Y.

KATHERINE J. LISENO
President and Chief Executive Officer
Metuchen Savings Bank
Metuchen, N.J.

LISA M. CATHIE
President and Chief Executive Officer
Ulster Savings Bank
Kingston, N.Y.
MARTIN A. DIETRICH
President and Chief Executive Officer
NBT Bank, N.A., and
NBT Bancorp, Inc.
Norwich, N.Y.
JOSÉ RAFAEL FERNÁNDEZ
President, Chief Executive Officer,
and Vice Chairman
Oriental Bank and OFG Bancorp
San Juan, P.R.

PETER MAGLATHLIN
Chief Executive Officer
MBI, Inc.
Norwalk, Conn.
PATRICK MAROTTA
President/Chief Executive Officer
Marotta Controls
Montville, N.J.

ADVISORY GROUPS

MARY D. MADDEN
President and Chief Executive Officer
Hudson Valley Federal Credit Union
Poughkeepsie, N.Y.
THOMAS J. SHARA
President and Chief Executive Officer
Lakeland Bank and
Lakeland Bancorp, Inc.
Oak Ridge, N.J.
JOHN F. TRENTACOSTA
President and Chief Executive Officer
Newtown Savings Bank
Newtown, Conn.

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

ECONOMIC ADVISORY
PANEL
ALAN S. BLINDER
Princeton University
JULIA L. CORONADO
Graham Capital Management, L.P.
MICHAEL E. FEROLI
JPMorgan Chase
JEFFREY FRANKEL
Harvard University
MARK GERTLER
New York University
MARVIN GOODFRIEND
Carnegie Mellon University
AUSTAN GOOLSBEE
University of Chicago
JAN HATZIUS
Goldman Sachs & Company
PETER HOOPER
Deutsche Bank Securities, Inc.
GLENN HUBBARD
Columbia University
ANIL KASHYAP
University of Chicago
N. GREGORY MANKIW
Harvard University

WHOLESALE SECURITIES CUSTOMER ADVISORY GROUP
MICHAEL ALBANESE
Executive Director
JPMorgan Chase Bank, N.A.

JANICE HAMILTON
Senior Vice President
The Northern Trust Company

BRENT BLAKE
Vice President
State Street Bank and Trust Company

CHRIS HARPER
Director, Operations
Federal Home Loan Banks – Office
of Finance

TERRY BOUTHILET
Vice President
Wells Fargo Bank, N.A.
MICHAEL J. BROWN
Vice President, Capital Markets
Operations
Fannie Mae
KEVIN CAFFREY
Managing Director
The Bank of New York Mellon, N.A.
DANIEL CROZIER
Vice President, Director of Capital
Markets Operations
U.S. Bank
CARL D’ANGELO
Director, Investments and
Capital Markets
Freddie Mac
JOHN T. DAUGHERTY
Vice President and Deputy Director,
Office of Securities Operations
Ginnie Mae

FREDERIC MISHKIN
Columbia University
CARMEN M. REINHART
Harvard Kennedy School
KENNETH ROGOFF
Harvard University
MICHAEL WOODFORD
Columbia University

ADVISORY GROUPS

ELKE JAKUBOWSKI
Vice President
The Depository Trust and Clearing
Corporation
DEBORAH MERCER-MILLER
Senior Vice President
Citibank, N.A.
ROB RAYMOND
Vice President
Bank of America/Merrill Lynch
DARA N. SEAMAN
Assistant Commissioner, Treasury
Security Services
U.S. Department of the Treasury

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

FEDERAL ADVISORY
COUNCIL

INVESTOR ADVISORY COMMITTEE ON FINANCIAL MARKETS

Second District Member
JAMES P. GORMAN
Chairman and Chief Executive Officer
Morgan Stanley
New York, N.Y.

NICOLE ARNABOLDI
Vice Chairman, Asset Management
Credit Suisse Group
LOUIS BACON*
Chairman, Chief Executive Officer,
and Founder
Moore Capital Management, LP
TIM BUCKLEY
Chief Investment Officer
Vanguard
JAMES CHANOS
Founder and President
Kynikos Associates
MARY CALLAHAN ERDOES
Chief Executive Officer
J.P. Morgan Asset Management
BRITT HARRIS
Chief Investment Officer
Teachers Retirement System of Texas
JOSHUA HARRIS
Founder and Chief Investment Officer
Apollo Management

SCOTT MINERD
Global Chief Investment Officer
and Managing Partner
Guggenheim Partners
MICHAEL NOVOGRATZ
President and Director
Fortress Investment Group LLC
RICK RIEDER
Chief Investment Officer and
Co-Head of Americas Fixed Income
BlackRock, Inc.
JES STALEY
Managing Partner
BlueMountain Capital
Management, LLC
MORGAN STARK
Managing Member
Ramius LLC
DAVID TEPPER
Founder and President
Appaloosa Management L.P.

ALAN HOWARD
Founder
Brevan Howard
DEREK KAUFMAN
Head of Global Fixed Income
Citadel LLC
*At the time of publication, no longer a member of the IACFM.

ADVISORY GROUPS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

MONETARY POLICY
ADVISORY PANEL
MARKUS BRUNNERMEIER
Princeton University
MARK GERTLER
New York University
NOBUHIRO KIYOTAKI
Princeton University
FREDERIC MISHKIN
Columbia University
RICARDO REIS
Columbia University
CHRISTOPHER SIMS
Princeton University
MICHAEL WOODFORD
Columbia University

UPSTATE NEW YORK REGIONAL ADVISORY BOARD
AMINY I. AUDI
President and Chief Executive Officer
L. & J. G. Stickley
Manlius, N.Y.
SCOTT BIELER
President
West Herr Automotive Group, Inc.
Orchard Park, N.Y.
TIM BUSCH
Executive Vice President and
Co-Chief Operating Officer
Nexstar Broadcasting Group, Inc.
Irving, Tex.
GARY CROSBY
President and CEO
First Niagara Financial Group
Buffalo, N.Y.
WILLIAM GISEL
President and Chief Executive Officer
Rich Products Corporation
Buffalo, N.Y.
LAWRENCE KESSLER
Co-Owner and Founder
Kessler Family LLC
Rochester, N.Y.
DR. ANNE KRESS
President
Monroe Community College
Rochester, N.Y.

ADVISORY GROUPS

JAMES P. LAURITO
President
Central Hudson Gas and Electric
Corporation
Poughkeepsie, N.Y.
JORDAN LEVY
New York Partner
SoftBank Capital
Buffalo, N.Y.
MELANIE LITTLEJOHN
Regional Director of Community
and Customer Management
National Grid (Central New York
Division)
North Syracuse, N.Y.
LINDA MCFARLANE
President and Chief Executive Officer
Community Loan Fund of the
Capital Region
Albany, N.Y.
MARTIN MUCCI
President and Chief Executive Officer
Paychex, Inc.
Rochester, N.Y.
ROBERT L. STEVENSON
President and Chief Executive Officer
Eastman Machine Company
Buffalo, N.Y.
CARLOS UNANUE
President
Goya de Puerto Rico, Inc.
Bayamón, P. R.

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

WHOLESALE PAYMENTS ADVISORY GROUP
MICHAEL BELLACOSA
Director
The Bank of New York Mellon

STEVE FULLENKAMP
Vice President
JPMorgan Chase

ROSEANNE ROSENBERGER
Senior Product Manager
KeyBank

KEFEI CHANG
Director
Deutsche Bank

MIGUEL GUERRERO
Vice President
PNC Bank

MARY KATE SAVINI
Assistant Vice President
State Street Bank and Trust Corporation

JITENDRA CHAUHAN
Director
Citigroup

JAMES KENNY
Director
Bank of America

JOHN ZAZZERA
Senior Vice President
TD Bank

MITCHELL CHRISTENSEN
Executive Vice President
Wells Fargo Bank

VANESSA LIN
Senior Vice President
HSBC Bank, USA

JEFFREY DUNN
Vice President
US Bank Corporation

MARIE-JUDE MAIGNAN
Director
UBS

ADVISORY GROUPS

OFF ICERS OF THE
FEDERAL RESERVE BANK
OF NEW YORK

OFFICERS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

OFFICERS OF THE FEDERAL RESERVE BANK OF NEW YORK
As of December 31, 2014

WILLIAM C. DUDLEY
President
CHRISTINE M. CUMMING
First Vice President

THOMAS C. BAXTER, JR.
General Counsel and
Executive Vice President
Legal
WILLIAM T. CHRISTIE
Chief Information Officer
and Executive Vice President
Technology Services
SARAH J. DAHLGREN
Executive Vice President
Financial Institution Supervision
SANDRA C. KRIEGER
Executive Vice President
Risk
JAMES J. MCANDREWS
Director of Research
and Executive Vice President
Research and Statistics

SUSAN W. MINK
Executive Vice President
Human Resources

MICHAEL STRINE
Executive Vice President
Corporate

ALBERTO G. MUSALEM
Executive Vice President
Emerging Markets
and International Affairs

JOSEPH S. TRACY
Senior Advisor to the President
and Executive Vice President
Executive Office

SIMON M. POTTER
Executive Vice President
Markets
EDWARD C. SMITH
General Auditor
and Executive Vice President
Audit
ROSEANN STICHNOTH
Executive Vice President
Financial Services

OFFICERS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

AUDIT GROUP
EDWARD C. SMITH
General Auditor
and Executive Vice President
CLIVE W. BLACKWOOD
Deputy General Auditor
and Vice President
ISAAC SMITH, JR.
Assistant Vice President
AUDREY A. FOSTER
First-Level Officer
DONNA M. GALLO
First-Level Officer

COMMUNICATIONS AND
OUTREACH GROUP
JACK GUTT
Group Head
and Senior Vice President
Digital Strategy
DONA M. WONG
Vice President
ANDREW GIANNELLI
Assistant Vice President
CHRISTINE M. SOMMO
First-Level Officer

CORPORATE GROUP
MICHAEL STRINE
Executive Vice President
MARIA GRACE C. AMBROSIO
Senior Vice President
SCOTT R. GURBA
Senior Vice President
LOLA S. JUDGE
Senior Vice President
LINDA WOLFF AVERY
Senior Vice President

Internal Communications

ROBERT M. BEYER
Vice President

RALPH W. HESSLER
First-Level Officer

NICHOLAS BALAMACI
Vice President

MARIA FRANGELAKI
Vice President

PADMA KUMAR
First-Level Officer

ED CHENEY
First-Level Officer

ROBERT GALLETTA
Vice President

NINA M. LEISER
First-Level Officer
Media Relations
ANDREA R. PRIEST
Assistant Vice President
JONATHAN A. FREED
First-Level Officer
Outreach and Education
KAUSAR HAMDANI
Senior Vice President
ANAND R. MARRI
Vice President
NORA FITZPATRICK
Assistant Vice President
CLAIRE KRAMER MILLS
Assistant Vice President
ANIKA D. PRATT
First-Level Officer
OFFICERS

ANN M. HERON
Vice President
JEFFREY W. MEANEY
Vice President
CHRISTINA X. MILLER
Vice President
THOMAS P. REILLY
Vice President
TAMRA J. WHEELER
Vice President
KENT BAIN
Assistant Vice President
ZACHERY R. BRICE
Assistant Vice President
TAMARA S. DAUGHDRILL
Assistant Vice President

FEDERAL
FEDERAL RESERVE
RESERVE BANK
BANK of
of NEW
NEW YORK
YORK
2014
2014 ANNUAL
ANNUAL REPORT
REPORT

CORPORATE GROUP (CONTINUED)

EMERGING MARKETS
AND INTERNATIONAL
AFFAIRS GROUP

JOSEPH D. J. DEMARTINI
Assistant Vice President

CHRISTIAN A. FACQ
First-Level Officer

AILEEN R. GRIFFITH
Assistant Vice President

BURTON FLEMING
First-Level Officer

ALBERTO G. MUSALEM
Executive Vice President

GARY J. KAPLAN
Assistant Vice President

CHRISTOPHER GRANDICH
First-Level Officer

MICHAEL SCHETZEL
Vice President

JOSEPH J. MARRACCINO
Assistant Vice President

PAUL R. HAMATY
First-Level Officer

MARIA C. MASSEI-ROSATO
Assistant Vice President

MARC S. LEMBERG
First-Level Officer

JOHN J. CLARK, JR.
Senior Vice President

MARIA E. MELENDEZ-WADA
Assistant Vice President

RONALD J. LICARE
First-Level Officer

IDANNA APPIO
Vice President

JOSEPH MEMMOLO
Assistant Vice President

JOHN D. MILUSICH
First-Level Officer

MATTHEW D. HIGGINS
Vice President

GEORGE P. PEREIRA
Assistant Vice President

ELLEN ORMAN
First-Level Officer

HUNTER L. CLARK
Assistant Vice President

ROBERT M. POFSKY
Assistant Vice President

JOANNE R. RUBERTO
First-Level Officer

SETH E. SEARLS
First-Level Officer

RICHARD L. PRISCO
Assistant Vice President

JOHN F. SEARS
First-Level Officer

Financial Markets and Institutions

MARK A. SLAGUS
Assistant Vice President

BRIAN A. WATSON
First-Level Officer

Development Studies
and Foreign Research

B. GERARD DAGES
Senior Vice President
JENNIFER S. CRYSTAL
Vice President

JOSEPH R. COVELLO
First-Level Officer

TRICIA E. KISSINGER
Assistant Vice President
International Affairs
HOWARD J. HOWE
Assistant Vice President

OFFICERS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

EXECUTIVE OFFICE
WILLIAM C. DUDLEY
President
CHRISTINE M. CUMMING
First Vice President
Chief of Staff’s Office
JOSEPH S. TRACY
Senior Advisor to the President
and Executive Vice President

FINANCIAL INSTITUTION
SUPERVISION GROUP
Wholesale Product Office
RICHARD P. DZINA
Senior Vice President and Wholesale
Product Manager
KENNETH S. ISAACSON
Senior Vice President
SARINA PANG
Senior Vice President

JAMES P. BERGIN
Chief of Staff and Vice President

ROBYN A. BRANDOW
Vice President

NATASHA M. ZABKA
Deputy Chief of Staff for Operations
and Assistant Vice President

CHRISTOPHER BURKE
Vice President

Financial Stability
and Regulatory Policy
MARGARET M. MCCONNELL
Director and Senior Vice President
SARAH BELL
Assistant Vice President
SANDRA LEE
Assistant Vice President
Office of Diversity and Inclusion
DIANE T. ASHLEY
Chief Diversity Officer, Director
of the Office of Minority and Women
Inclusion, and Vice President

CARLOS FUENTES
Vice President
ANDREW B. GERSON
Vice President
PEGGY AU
First-Level Officer
LISA R. PACHECO
First-Level Officer
GINA S. RUSSO
First-Level Officer
JOANNA WISNIECKA
First-Level Officer

SARAH J. DAHLGREN
Executive Vice President
Complex Financial Institutions
LUCINDA M. BRICKLER
Senior Vice President
WILLIAM J. BRODOWS
Senior Vice President
MARTHA CUMMINGS
Senior Vice President
CAROLINE FRAWLEY
Senior Vice President
LAUREN A. HARGRAVES
Senior Vice President
STEVEN J. MANZARI
Senior Vice President
DANIEL A. MUCCIA
Senior Vice President
BRUCE T. RICHARDS
Senior Vice President
LANCE W. AUER
Vice President
STEIN E. BERRE
Vice President
ANDREW M. DANZIG
Vice President

PATRICIA DAVEY
First-Level Officer

DANA R. GREEN
Vice President
ALEJANDRO A. LATORRE
Vice President
WENDY NG
Vice President
OFFICERS

FEDERAL
FEDERAL RESERVE
RESERVE BANK
BANK of
of NEW
NEW YORK
YORK
2014
2014 ANNUAL
ANNUAL REPORT
REPORT

FINANCIAL INSTITUTION SUPERVISION GROUP (CONTINUED)
JOHN RICKETTI
Vice President

BARBARA J. YELCICH
Assistant Vice President

F. BARD STERMASI
First-Level Officer

VANDANA SHARMA
Vice President

ABBE SOHNE BENSIMON
First-Level Officer

LILY THAM
First-Level Officer

DANIEL SULLIVAN
Vice President

SUKHPAL BHATTI
First-Level Officer

CHRISTOPHER T. TSUBOI
First-Level Officer

JAMES B. WALL
Vice President

PETER R. DRAKE
First-Level Officer

Cross-Firm Perspective and Analytics

ETHAN S. BUYON
Assistant Vice President

AMY E. FLYNN
First-Level Officer

STEPHANIE J. CHALY
Assistant Vice President

MARK E. GLEASON
First-Level Officer

KEVIN COFFEY
Assistant Vice President

JOHN A. HEINZE
First-Level Officer

LAVERNE CORNWELL
Assistant Vice President

ANNA IACUCCI
First-Level Officer

DANIEL E. ELDER
Assistant Vice President

WILLIAM E. KELLY
First-Level Officer

HAMPTON FINER
Assistant Vice President

YULIYA SPIVAK KEYLIN
First-Level Officer

JUDITH J. GRUTTMAN
Assistant Vice President

JOHNATHON J. B. KIM
First-Level Officer

CHRISTOPHER R. HUNTER
Assistant Vice President

THEONILLA LEE-CHAN
First-Level Officer

JACQUELINE M. LOVISA
Assistant Vice President

JOHN J. LITTLE
First-Level Officer

STEVEN A. MIRSKY
Assistant Vice President

TAMARA MARCOPULOS
First-Level Officer

GLEN J. REPPY
Assistant Vice President

TIMOTHY P. SHERIDAN
First-Level Officer

TODD M. WASZKELEWICZ
Assistant Vice President

GLEN J. SNAJDER
First-Level Officer

OFFICERS

JOHN E. KAMBHU
Vice President
RENATO J. SCINTO
Vice President
MICHAEL E. HOLSCHER
Assistant Vice President
DINA M. MAHER
Assistant Vice President
STACY L. MANUEL
Assistant Vice President
AFSHIN TABER
Assistant Vice President
SHANNON BOZELLI
First-Level Officer
SCOTT W. NAGEL
First-Level Officer
Enterprise Risk Supervision
RONALD CATHCART
Senior Vice President
DAVID A. DUTTENHOFER, JR.
Senior Vice President
JEFFREY INGBER
Senior Vice President
JAMES M. MAHONEY
Senior Vice President

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

FINANCIAL INSTITUTION SUPERVISION GROUP (CONTINUED)
JAINARYAN SOOKLAL
Senior Vice President

LUCETTE PECORARO
Assistant Vice President

DANIELLE VACARR
First-Level Officer

THOMAS FERLAZZO
Vice President

MICHAEL WALSH
Assistant Vice President

L. DARAU JOHNSON
Vice President

ALBERT ALVARADO
First-Level Officer

KATHERYN A. N.
VAN DER CELEN
First-Level Officer

WING Y. OON
Vice President

RANDOLPH BROWN
First-Level Officer

ERIC L. PARSONS
Vice President

BRIAN E. EARLY
First-Level Officer

IAN PRIOR
Vice President

BEVERLY J. JULES
First-Level Officer

KAREN Y. SCHNECK
Vice President

IRENE C. KRAULAND
First-Level Officer

JEANMARIE DAVIS
Senior Vice President

STEVEN R. BLOCK
Assistant Vice President

EUN KYOUNG LEE
First-Level Officer

VIKEN CHAKRIAN
Vice President

LOUIS E. BRAUNSTEIN
Assistant Vice President

HARRY A. MIZRAHI
First-Level Officer

LISA M. JONIAUX
Vice President

COLLEEN A. BURKE
Assistant Vice President

JOHN J. O’SULLIVAN
First-Level Officer

ARI R. COHEN
Assistant Vice President

MINESH PAREKH
First-Level Officer

MARY ELLEN CRAIG
Assistant Vice President

JOHN F. REYNOLDS
First-Level Officer

BRIAN E. HEFFERLE
Assistant Vice President

DENNIS J. RYAN
First-Level Officer

KAREN R. KAHRS
Assistant Vice President

DEBASHISH SARKAR
First-Level Officer

MARTIN LORD
Assistant Vice President

H. CLAY SAYLOR III
First-Level Officer

ANN E. MINER
Assistant Vice President

LOUIS SCOTT
First-Level Officer

BRIAN O’HALLORAN
Assistant Vice President

PATRICK J. STEINER
First-Level Officer
OFFICERS

YANHUI WANG
First-Level Officer
WAI KIU WONG
First-Level Officer
GEORGE WYVILLE
First-Level Officer
Financial Market Infrastructure

DENISE B. SCHMEDES
Vice President
RONALD P. STROZ
Vice President
MAYRA GONZALEZ
Assistant Vice President
KEITH PULSIFER
Assistant Vice President
MARI E. BACA
First-Level Officer
JAMES DEFALCO
First-Level Officer
ROGER R. GRAHAM
First-Level Officer

FEDERAL
FEDERAL RESERVE
RESERVE BANK
BANK of
of NEW
NEW YORK
YORK
2014
2014 ANNUAL
ANNUAL REPORT
REPORT

FINANCIAL INSTITUTION SUPERVISION GROUP (CONTINUED)
JOHANNA M. SCHWAB
First-Level Officer

PETER MORREALE
Assistant Vice President

Regional, Community, and Foreign
Institutions

SEAN M. SULLIVAN
First-Level Officer

GRACE Y. SONE CASSEL
Assistant Vice President

F. CHRISTOPHER CALABIA
Senior Vice President

PAMELA W. YIP
Assistant Vice President

JAN H. VOIGTS
Vice President

MARGARET E. BRUSH
First-Level Officer

LAURENCE C. BONNEMERE
Assistant Vice President

DENISE F. GOODSTEIN
First-Level Officer

ERIC A. CABAN
Assistant Vice President

ERNEST NIZHNER
First-Level Officer

BETTYANN L. GRIFFITH
Assistant Vice President

MARK C. SCAPP
First-Level Officer

WARREN HRUNG
First-Level Officer

Financial Institution Supervision
Executive Office
JAMES R. HENNESSY
Chief of Staff
and Senior Vice President
HOMER C. HILL
Chief Operating Officer
and Senior Vice President
WILLIAM J. CARLUCCI
Assistant Vice President
JACQUELINE M. MCCORMACK
Assistant Vice President
CLAUDIA A. FRANCO
First-Level Officer
BARBARA L. TOMSEY
First-Level Officer
JANE WAKEFIELD
First-Level Officer
Group Operations
JOONHO LEE
Senior Vice President
JEFFREY C. BLYE
Vice President
DANNY BRANDO
Assistant Vice President
PAUL R. COPPOLA
Assistant Vice President

Large International
Financial Institutions
PATRICIA T. MEADOW
Senior Vice President
MARILYN ARBUTHNOTT
Assistant Vice President
S. MICHAEL KOH
Assistant Vice President
REGINA A. STONE
Assistant Vice President
ANNE M. MACEWEN
First-Level Officer
RALPH T. SANTASIERO
First-Level Officer
SHIVAJI C. VOHRA
First-Level Officer

OFFICERS

HUGH J. MORGAN
First-Level Officer
WILMA SABADO
First-Level Officer
DAVID A. SMITH
First-Level Officer
Supervisory Policy
DIANNE K. DOBBECK
Senior Vice President
CHARLES C. GRAY
Vice President
KRISTIN H. MALCARNEY
Assistant Vice President
KATHERINE L. TILGHMAN HILL
Assistant Vice President
EMILY G. YANG
Assistant Vice President

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

FINANCIAL SERVICES GROUP
ROSEANN STICHNOTH
Executive Vice President
WILLIAM N. SCHAEFER
First-Level Officer
Cash and Custody
HELEN E. MUCCIOLO
Senior Vice President
CHRISTOPHER D. ARMSTRONG
Vice President
MARGARET SAXENIAN
Vice President
EILEEN M. GOODMAN
Assistant Vice President
LISA M. BASILE
First-Level Officer
JOHN M. HILL
First-Level Officer
ANTHONY J. MCGUIRK
First-Level Officer

HUMAN RESOURCES
GROUP
Electronic Payments
GAIL R. ARMENDINGER
Vice President

SUSAN W. MINK
Executive Vice President

DONNA J. CROUCH
Vice President

Human Resources Business Partners

CARL P. LUNDGREN
Vice President
ROBERT C. GALLO
Assistant Vice President
TRUPTI AMIN
First-Level Officer
ROBERT S. IMPALLI
First-Level Officer
SARAH L. WEAN
First-Level Officer
BELINDA S. WILLIAMS
First-Level Officer

JOHN ESPOSITO
Assistant Vice President
SUSAN F. FALBE
Assistant Vice President
DANIELLE N. LEVITT
Assistant Vice President
KAREN P. LYNCH
Assistant Vice President
MARGARET M. MULLINS
Assistant Vice President
JENNIFER C. ROTH
Assistant Vice President

International Treasury Services

Human Resources Operations and
Support Service

PATRICIA HILT
Vice President

MATTHEW S. WAGNER
Vice President

BRIAN JACK
Assistant Vice President

CHARLES M. BLUM
First-Level Officer

WILLIAM M. DISENSO
First-Level Officer

OFFICERS

FEDERAL
FEDERAL RESERVE
RESERVE BANK
BANK of
of NEW
NEW YORK
YORK
2014
2014 ANNUAL
ANNUAL REPORT
REPORT

HUMAN RESOURCES
GROUP (CONTINUED)
Talent Management
LOUIS J. SCENTI, JR.
Vice President
NICHOLAS C. MARLIN
Assistant Vice President
STEVEN E. WALKER
Assistant Vice President
TIMOTHY O’KEEFE
First-Level Officer
Total Rewards Health and Wellness
GERALD L. STAGG, M.D.
Medical Director
and Senior Vice President
DAN DIAZ
First-Level Officer

LEGAL GROUP
THOMAS C. BAXTER, JR.
General Counsel
and Executive Vice President
Bank Applications

NEIL BERSON
First-Level Officer
DAVID L. CARANGELO
First-Level Officer

IVAN J. HURWITZ
Vice President

TINA M. STINSON-DACRUZ
First-Level Officer

ROSALIE YEE
Assistant Vice President

KEVIN L. WHITE
First-Level Officer

BRIAN S. STEFFEY
First-Level Officer

Corporate Secretary’s Office

Compliance

MICHAEL A. HELD
Corporate Secretary, Deputy General
Counsel, and Senior Vice President

MARTIN C. GRANT
Chief Compliance and Ethics Officer
and Senior Vice President

RONA B. STEIN
Assistant Corporate Secretary
and Vice President

BARRY M. SCHINDLER
Compliance and Ethics Officer
and Vice President

ROSEMARY A. LAZENBY
First-Level Officer

MARINA I. ADAMS
Assistant Vice President

Federal Reserve Law Enforcement

ROBERT P. ALLER
Assistant Vice President
DAVID K. CLUNE
Compliance and Ethics Officer
and Vice President
AZISH E. FILABI
Assistant Vice President
EDWARD E. SILVA
Assistant Vice President
AJAY BADYAL
First-Level Officer
PINCHAS J. BECKER
First-Level Officer
OFFICERS

NICHOLAS L. PROTO
Chief Investigator
and Senior Vice President
ROBERT N. SAMA
Vice President
KATHLEEN ELLIS
First-Level Officer
Legal
YOONHI GREENE
Assistant General Counsel
and Senior Vice President
JOYCE M. HANSEN
Deputy General Counsel
and Senior Vice President

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

LEGAL GROUP (CONTINUED)
MICHAEL A. HELD
Corporate Secretary, Deputy General
Counsel, and Senior Vice President
STEPHANIE A. HELLER
Deputy General Counsel
and Senior Vice President
HAERAN KIM
Assistant General Counsel
and Senior Vice President
SHARI D. LEVENTHAL
Deputy General Counsel
and Senior Vice President
MICHAEL S. NELSON
Assistant General Counsel
and Senior Vice President
NICHOLAS L. PROTO
Chief Investigator
and Senior Vice President
GREGORY CAVANAGH
Counsel and Vice President
RICHARD E. CHARLTON
Counsel and Vice President
RAYMOND B. CHECK
Counsel and Vice President
DAVID L. GROSS
Counsel and Vice President
CANDACE M. JONES
Counsel and Vice President
MICHELE H. KALSTEIN
Counsel and Vice President
SEAN O’MALLEY
Deputy Chief Investigator–
Enforcement and Vice President

MICHAEL SCHUSSLER
Counsel and Vice President

DAVID G. SEWELL
Counsel and Assistant Vice President

DEBRA F. STONE
Counsel and Vice President

SHAWEI WANG SO
Counsel and Assistant Vice President

JANINE M. TRAMONTANA
Counsel and Vice President

JOSEPH H. SOMMER
Counsel and Assistant Vice President

VALERIE K. WILDE
Counsel and Vice President

SOPHIA R. VICKSMAN
Counsel and Assistant Vice President

JENNIFER A. WOLGEMUTH
Counsel and Vice President

JESSIE CHENG
Counsel and First-Level Officer

ROBERTO G. AMENTA
Investigator
and Assistant Vice President

MEGHANN E. DONAHUE
Counsel and First-Level Officer

JORDAN AVNI
Legal Automation Assistant Vice
President
MARY L. COLON
Legal Administrative Officer
and Assistant Vice President
SHAWN E. DELMHORST
Counsel and Assistant Vice President

MARK GOLD
Investigator and First-Level Officer
SARAH STERKEN JACKSON
Counsel and First-Level Officer
KENNETH H. JONES
Finance and Risk Analysis
and First-Level Officer
ERIN P. KELLY
Counsel and First-Level Officer

TODD R. GREENBERG
Contracts Manager and Assistant Vice
President

NANCY LIAO
Counsel and First-Level Officer

CATHERINE KUNG
Counsel and Assistant Vice President

SHRILAXMI S.
SATYANARAYANA
Counsel and First-Level Officer

KATHERINE S. LANDY
Counsel and Assistant Vice President
MEGHAN MCCURDY
Counsel and Assistant Vice President
ROSANNE NOTARO
Counsel and Assistant Vice President

JOSEPH R. TORREGROSSA
Counsel and First-Level Officer
ERIK C. WALSH
Counsel and First-Level Officer
Records Management
ROSE PATRUNO
Assistant Vice President

BRETT S. PHILLIPS
Counsel and Vice President
OFFICERS

FEDERAL
FEDERAL RESERVE
RESERVE BANK
BANK of
of NEW
NEW YORK
YORK
2014
2014 ANNUAL
ANNUAL REPORT
REPORT

MARKETS GROUP
SIMON M. POTTER
Executive Vice President

DEBRA M. YOUNG
Assistant Vice President

RAYMOND T. TESTA
Chief Operating Officer
and Senior Vice President

DIANNE BUONINCONTRI
First-Level Officer

SUZANNE BENVENUTO
Chief of Staff and Vice President
Business Technology

ANTHONY J. LIGUORI
First-Level Officer
SHA LIU
First-Level Officer

Discount Window and Collateral
ZACHARY S. TAYLOR
Vice President
MICHELE R. WALSH
Vice President
PATRICK O. DWYER
Assistant Vice President
JOHN R. FAULKNER
First-Level Officer

MICHAEL J. BURK
Senior Vice President

KEN R. RUFF
First-Level Officer

MICHAEL J. RECUPERO
Senior Vice President

Central Bank and International
Account Services

PAUL R. KOWALENKO
Vice President

TIMOTHY J. FOGARTY
Senior Vice President

THOMAS I. PIDERIT
Vice President

AMELIA R. MONCAYO
Vice President

ANNE F. BAUM
Senior Vice President

AMANDA WEINBERG
Vice President

ANNMARIE S. ROWE-STRAKER
Vice President

LEON W. TAUB
Senior Vice President

LARISSA EZRA
Assistant Vice President

MATTHEW NEMETH
Assistant Vice President

HOWARD B. FIELDS
Vice President

RYAN L. HIRSCHEY
Assistant Vice President

PETER ROETHEL
Assistant Vice President

ANNA CHANG
Assistant Vice President

MAX HRABROV
Assistant Vice President

ROSE M. UGARTE-GEE
Assistant Vice President

DENLEY Y. S. CHEW
Assistant Vice President

OLEG KOZHUKHOV
Assistant Vice President

ANGELA C. DESOUZA
First-Level Officer

KEVIN D. KRUEGER
Assistant Vice President

SCOTT NEWMAN
Assistant Vice President

ORSON F. KEEYS
First-Level Officer

GERALD M. MCCRINK
Assistant Vice President

PETER J. SEIGEL
Assistant Vice President

CATHERINE LOMAX
First-Level Officer

THOMAS R. BREEN
First-Level Officer

OFFICERS

KRISTINA A. RYAN
First-Level Officer
WENDY WONG
First-Level Officer
Group Shared Services

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

MARKETS GROUP (CONTINUED)

First-Level Officer

ANNA NORDSTROM
Vice President

MATTHEW D. RASKIN
Assistant Vice President

DAVID A. JONES
First-Level Officer

ANGELA L. O’CONNOR
Vice President

JOHN B. ROSE
Assistant Vice President

JOHN C. PARR
First-Level Officer

JULIE A. REMACHE
Vice President

SCOTT SHERMAN
Assistant Vice President

ROBERT P. VOGEL
First-Level Officer

JANET S. RESELE-TIDEN
Vice President

DINA M. T. MARCHIONI
Assistant Vice President

PATRICIA A. ZOBEL
Vice President

MARK O. CABANA
First-Level Officer

KATHRYN B. CHEN
Assistant Vice President

ELIZABETH CAVINESS
First-Level Officer

J. BENSON DURHAM
Assistant Vice President

SAMUEL B. CHEUN
First-Level Officer

MICHELLE L. EZER
Assistant Vice President

MICHAEL B. MCMORROW
First-Level Officer

OLIVER A. GIANNOTTI
Assistant Vice President

RANIA C. PERRY
First-Level Officer

FRANK M. KEANE
Assistant Vice President

JAMIE M. PFEIFER
First-Level Officer

ROBERT H. LERMAN
Assistant Vice President

DEANNA SONG
First-Level Officer

JOSEPH M. BURKE

Market Operations Monitoring
and Analysis
JOSHUA L. FROST
Senior Vice President
LORIE K. LOGAN
Senior Vice President
SUSAN E. MCLAUGHLIN
Senior Policy Advisor
and Senior Vice President
KEVIN J. STIROH
Senior Vice President
NATHANIEL J. N. WUERFFEL
Senior Vice President
CHERYL A. GLEASON
Vice President
DEBORAH L. LEONARD
Vice President

MATTHEW S. LIEBER
Assistant Vice President
JOHN MCGOWAN
Assistant Vice President

OFFICERS

FEDERAL
FEDERAL RESERVE
RESERVE BANK
BANK of
of NEW
NEW YORK
YORK
2014
2014 ANNUAL
ANNUAL REPORT
REPORT

RESEARCH AND STATISTICS GROUP
JAMES J. MCANDREWS
Director of Research
and Executive Vice President

International Research

Capital Markets

MYNYRE AMITI
Assistant Vice President

TOBIAS ADRIAN
Senior Vice President
MICHAEL J. FLEMING
Vice President
RICHARD K. CRUMP
First-Level Officer
EMANUEL MOENCH
First-Level Officer
ERNST SCHAUMBURG
First-Level Officer
Financial Intermediation
BEVERLY J. HIRTLE
Senior Vice President
LINDA S. GOLDBERG
Vice President
JOÃO A. C. SANTOS
Vice President
NICOLA CETORELLI
Assistant Vice President
HAMID MEHRAN
Assistant Vice President
DONALD P. MORGAN
Assistant Vice President
STAVROS C. PERISTIANI
Assistant Vice President
ANNA R. KOVNER
First-Level Officer
JAMES I. VICKERY
First-Level Officer

THOMAS KLITGAARD
Vice President

JOHANNES J. J. GROEN
First-Level Officer

STEFANO EUSEPI
First-Level Officer
Money and Payments Studies
KENNETH D. GARBADE
Senior Vice President
RODNEY J. GARRATT
Vice President

Macroeconomic and
Monetary Studies

ANTOINE MARTIN
Vice President

RICHARD W. PEACH
Senior Vice President

ASANI SARKAR
Assistant Vice President

ARGIA M. SBORDONE
Vice President

MARCO CIPRIANI
First-Level Officer

MARCO DEL NEGRO
Assistant Vice President

ADAM M. COPELAND
First-Level Officer

MARC P. GIANNONI
Assistant Vice President

Office of the Director

ROBERT W. RICH
Assistant Vice President
AYŞEGÜL ŞAHIN
Assistant Vice President
STEFANIA ALBANESI
First-Level Officer
ANDREA TAMBALOTTI
First-Level Officer

ANDREW F. HAUGHWOUT
Vice President
JONATHAN P. MCCARTHY
Vice President
PAOLO A. PESENTI
Vice President
STEPHEN PANEK
First-Level Officer

Microeconomic Studies

Regional Analysis

HENDRIKUS W.
VAN DER KLAAUW
Senior Vice President

JAMES A. ORR
Vice President

GIORGIO TOPA
Vice President
OLIVIER ARMANTIER
Assistant Vice President
OFFICERS

RICHARD M. DEITZ
Assistant Vice President
JAISON R. ABEL
First-Level Officer

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

RESEARCH AND
STATISTICS GROUP
(CONTINUED)

RISK GROUP
SANDRA C. KRIEGER
Executive Vice President

JASON BRAM
First-Level Officer

Collateral Credit Risk Management

Research Services

ADAM B. ASHCRAFT
Senior Vice President

WILLIAM G. SELICK
Assistant Vice President

STEVEN SCHOEN
Vice President

VALERIE D. LAPORTE
First-Level Officer

PATRICK J. COYNE
Assistant Vice President

MARC J. RABIN
First-Level Officer

RITA J. CSEJTEY
Assistant Vice President

Statistics Function

DONALD V. DAVIS
Assistant Vice President

KENNETH P. LAMAR
Senior Vice President
ANTHONY O. CIRILLO
Vice President
GWENDOLYN A. COLLINS
Vice President
PATRICIA SELVAGGI
Assistant Vice President
SCOTT J. SMENTEK
Assistant Vice President
SANDRA Y. GALVAN
First-Level Officer
WILLIAM D. HUNTER
First-Level Officer

Counterparty Credit Risk
MICHAEL L. MASCARENHAS
First-Level Officer
Credit Risk Management
Technology Support
MELANIE L. HEINTZ
Senior Vice President
DAVID L. STEIN
First-Level Officer
Risk and Compliance Group Support
JOSEPH P. HEANEY
First-Level Officer

OFFICERS

Operational Risk
DEBRA L. GRUBER
Vice President
Payments Policy Function
LAWRENCE M. SWEET
Senior Vice President
ALEXANDRA MERLE-HUET
Assistant Vice President
SHARI R. BOWER
First-Level Officer
Risk Analytics
JOSHUA ROSENBERG
Senior Vice President
RACHEL LU
Assistant Vice President
NISSO BUCAY
First-Level Officer

FEDERAL
FEDERAL RESERVE
RESERVE BANK
BANK of
of NEW
NEW YORK
YORK
2014
2014 ANNUAL
ANNUAL REPORT
REPORT

TECHNOLOGY SERVICES GROUP
WILLIAM T. CHRISTIE
Chief Information Officer
and Executive Vice President

MUKUND M. KULKARNI
First-Level Officer

Information Security

JOHN T. LINES
First-Level Officer

ROY D. THETFORD, JR.
Information Security Officer
and Senior Vice President

LEE ALEXANDER
Senior Vice President

SHARONA NOE
First-Level Officer

JEFFREY KLEIN
Vice President

MICHAEL KANE
Senior Vice President

BERNADETTE M. RUSSELL
First-Level Officer

DAVID B. DROSSMAN
Assistant Vice President

YUET-MING CHAN
Vice President

HUALONG WANG
First-Level Officer

JAMIE BERNSTEIN
First-Level Officer

PANKAJ LUTHRA
Vice President

Governance

AMY MAN
First-Level Officer

ANAT GOURJI
Vice President

Program Management Office

IRA KAHNER
Vice President

JOSE L. RODRIGUEZ
Senior Vice President

STEPHEN SILVERMAN
Vice President

RICHARD I. BARRETT
Vice President

DAVID CAPPS
Assistant Vice President

JEAN M. STOLOFF
Vice President

JOHN J. MOSQUERA
Assistant Vice President

RONALD J. ZOLDY
Vice President

JOHN G. BARRA
First-Level Officer

NELL M. COTE
Assistant Vice President

CHERISA L. BURK
First-Level Officer

AMY C. LIU
Assistant Vice President

MARY F. KENNY-FURINO
First-Level Officer

SREEDEVI MANDALAPU
Assistant Vice President

MICHAEL S. RUBIN
First-Level Officer

DIANE PILINKO
Assistant Vice President

Application Development

RICHARD A. WHITE
Vice President
COLIN W. WYND
Vice President
NAHLA S. ALY
Assistant Vice President
DAVID ARZT
Assistant Vice President
LEON FISCHER
Assistant Vice President
TAMARA GOLDBURT
Assistant Vice President
ROBERT GOODMAN
Assistant Vice President
IRVING MYONES
Assistant Vice President
DANIEL ZIEGLER
Assistant Vice President

PERRY SANTACECILIA
Assistant Vice President

ADRIAN I. HODOR
First-Level Officer
OFFICERS

FEDERAL RESERVE BANK of NEW YORK
2014 ANNUAL REPORT

TECHNOLOGY SERVICES GROUP (CONTINUED)
SALVATORE TIDONA
Assistant Vice President

JOSEPH D. LEONARD
Assistant Vice President

SUSIE Y. LEE
First-Level Officer

LEIGH CHAN
First-Level Officer

KENNETH T. NORCROSS
First-Level Officer

ANGELA JORDAN
First-Level Officer

ROMAN REVZIN
First-Level Officer

RITA MILMEYSTER
First-Level Officer

Technology Engineering and
Computing Services

HOWARD MORGASEN
First-Level Officer

SEAN G. MAHON
Senior Vice President

SHLOMO ORBACH
First-Level Officer

LINA GLADSTEIN
Vice President

PETER SCHWAB
First-Level Officer

PAUL R. SANS
Vice President

REN SHEN
First-Level Officer

NICOLAE STANESCU
Vice President

AMBROSE M. STAFYLERAS
First-Level Officer

RAFAEL KOSCIALKOWSKI
Assistant Vice President

JIA Y. YE
First-Level Officer

OFFICERS

Technology Strategy
JEFFREY P. WEINSTEIN
Senior Vice President
ANDREW E. CHANG
Vice President
THOMAS KLEIN
Vice President
BENNY E. NISSAN
Vice President
JORGE L. VIDAL
Vice President
SUSAN R. CHASE
Assistant Vice President
JILL SASSO
Assistant Vice President
TRACEY A. TERRY
Assistant Vice President

MAP OF THE SECOND
FEDERAL RESERVE DISTRICT

MAP

FEDERAL
FEDERAL RESERVE
RESERVE BANK
BANK of
of NEW
NEW YORK
YORK
2014
2014 ANNUAL
ANNUAL REPORT
REPORT

THE SECOND FEDERAL RESERVE DISTRICT

CLINTON
FRANKLIN

ST. LAWRENCE

NEW YORK

N
E

W
ESSEX

JEFFERSON

LEWIS

HAMILTON
WARREN

OSWEGO
NIAGARA

ONEIDA

ORLEANS
MONROE

WAYNE
ONONDAGA

GENESEE
ONTARIO
ERIE

WYOMING
LIVINGSTON

YATES SENECA

CATTARAUGUS ALLEGANY

OTSEGO

CHEMUNG

TIOGA

SARATOGA

RENSSELAER

ALBANY
SCHOHARIE

CORTLAND

STEUBEN

WASHINGTON

MONTGOMERY
SC'NECT'Y

MADISON

CAYUGA

TOMPKINS
SCHUYLER
CHAUTAUQUA

HERKIMER
FULTON

CHENANGO
DELAWARE

GREENE

COLUMBIA

BROOME
ULSTER

PUTNAM
ORANGE
SUSSEX

CONN.

DUTCHESS

SULLIVAN

FAIRFIELD

WESTCHESTER
ROCKLAND

PASSAIC

SUFFOLK

BERGEN

WARREN

HUNTERDON

EROC
MORRIS

ESSEXHUDSON

UNION

SOMERSET

MAP

NASSAU

QUEENS

KINGS
RICHMOND

MIDDLESEX

NEW JERSEY

BRONX

HEAD OFFICE
(NEW YORK)

MONMOUTH
PUERTO RICO

U.S. VIRGIN ISLANDS

Federal Reserve Bank of New York
33 Liberty Street
New York, N.Y. 10045-0001
www.newyorkfed.org