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FINANCING VEHICLES AND THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE
This chapter contains descriptions of and data on financing
vehicles and the Board of Governors of the Federal Reserve,
as listed below.
—The Financing Corporation functions as a financing vehicle for the Federal Savings and Loan Insurance Corporation (FSLIC) Resolution Fund. It operates under the supervision and control of the Federal Housing Finance
Board.
—The Resolution Funding Corporation provided financing
for the Resolution Trust Corporation (RTC) and is subject
to the general oversight and direction of the Secretary
of the Treasury.
The Board of Governors of the Federal Reserve System’s
transactions are not included in the Budget because of its
unique status in the conduct of monetary policy. The Board
provides data on its administrative budget on a calendar year
basis, which is included here for information. Its budget
schedules and statements are not subject to review by the
President.

FINANCING VEHICLES
FINANCING CORPORATION

The Financing Corporation (FICO) is a mixed-ownership
Government corporation, chartered by the Federal Home Loan
Bank Board pursuant to the Federal Savings and Loan Insurance Corporation Recapitalization Act of 1987, as amended
(Act). FICO’s sole purpose is to function as a financing vehicle
for FSLIC Resolution Fund, formerly the Federal Savings and
Loan Insurance Corporation. FICO operates under the supervision and control of the Federal Housing Finance Board (Financing Board). Pursuant to the Act, FICO was authorized
to issue debentures, bonds, and other obligations subject to
limitations contained in the Act, the net proceeds of which
were to be used solely to purchase capital certificates issued
by FSLIC Resolution Fund, or to refund any previously issued
obligations. The Resolution Trust Corporation Refinancing,
Restructuring, and Improvement Act of 1991 terminated
FICO’s borrowing authority.
The Act provided formulas pursuant to which the Federal
Home Loan Banks make capital contributions to FICO at
the direction of the Finance Board for the purchase of FICO
capital stock. FICO used the proceeds received from the sales
of such capital stock to purchase non-interest bearing securities for deposit in a segregated account as required by the
Act. The non-interest bearing securities held in the segregated
account are the primary source of repayment of the principal
of FICO obligations. Securities in the segregated account are
kept separate from other FICO accounts and funds but are
not specifically pledged as collateral for the payment of obligations. The primary source of payment of interest on the obligations is the receipt of assessments imposed on and collected
from institutions’ accounts which are insured by the Bank
Insurance Fund and the Savings Association Insurance Fund.
Balance Sheet (in millions of dollars)

ASSETS:
Investments in US securities:
1102
Segregated accounts investment, net .....................
1206 Receivables, net ...............................................................

Cash, cash equivalents ...................................................
Other assets .....................................................................

64
9

281
7

Total assets ...............................................................
LIABILITIES:
2202 Interest payable ...............................................................
2203 Debt ...................................................................................
2207 Other .................................................................................

2,677

2,966

157
8,151
27

236
8,152
70

2999

1999

Total liabilities ..........................................................
NET POSITION:
FICO capital stock purchased by FHLBanks .................
Cumulative results of operations ...................................
FSLIC capital certificates ................................................

8,335

8,458

680
1,832
–8,170

680
1,998
–8,170

3999

Total net position .....................................................

–5,658

–5,492

4999

Total liabilities and net position ...................................

2,677

2,966

3100
3300
3300

f

RESOLUTION FUNDING CORPORATION

The Resolution Funding Corporation (REFCORP) is a
mixed-ownership Government corporation established by Title
V of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). The sole purpose of REFCORP
was to provide financing for the Resolution Trust Corporation
(RTC). Pursuant to FIRREA, REFCORP was authorized to
issue debentures, bonds, and other obligations, subject to limitations contained in the Act and regulations established by
the Thrift Depositor Protection Oversight Board. The proceeds
of the debt (less any discount, plus any premium, net of
issuance cost) were used solely to purchase nonredeemable
capital certificates of RTC or to refund any previously issued
obligations.
Until October 29, 1998, REFCORP was subject to the general oversight and direction of the Thrift Depositor Protection
Oversight Board. At that time, the Oversight Board was abolished and its authority and duties were transferred to the
Secretary of the Treasury. The day-to-day operations of
REFCORP are under the management of a three-member
Directorate comprised of the Director of the Office of Finance
of the Federal Home Loan Banks and two members selected
from among the presidents of the twelve Federal Home Loan
Banks (FHLBanks). Members of the Directorate serve without
compensation, and REFCORP is not permitted to have any
paid employees.
FIRREA, as amended, and the regulations adopted by the
Thrift Depositor Protection Oversight Board and the Secretary
of the Treasury provide formulas pursuant to which the Federal Home Loan Banks made capital contributions to
REFCORP’s Principal Fund and continue to make interest
payments on outstanding REFCORP obligations. FIRREA also
provides that the U.S. Treasury cover any interest shortfall.
Funds designated for the Principal Funds were used to purchase zero-coupon bonds. The zero-coupon bonds are held in
the Principal Fund and are the primary source of repayment
of the principal of the obligations at maturity.
Balance Sheet (in millions of dollars)
2003 actual

Identification code 99–4029–0–3–373

2003 actual

Identification code 99–4033–0–3–373

1801
1901

2,512
92

2004 actual

2,678
.......................

ASSETS:
Investments in US securities:
1102
Principal fund account investment, net .................
1206 Assessments receivable for interest expense ................

6,778
885

1999

2004 actual

7,663

Total assets ...............................................................

7,185
889
8,074

1243
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1244

THE BUDGET FOR FISCAL YEAR 2006

FINANCING VEHICLES—Continued

RESOLUTION FUNDING CORPORATION—Continued
89.00
90.00

Balance Sheet (in millions of dollars)—Continued
2003 actual

Identification code 99–4029–0–3–373

2202
2203

LIABILITIES:
Accrued interest payable on long-term obligations .....
Debt ...................................................................................

2004 actual

885
30,057

2999

888
30,055

Total liabilities ..........................................................
NET POSITION:
3100 Nonvoting capital stock issued to FHLBanks ...............
3300 Cumulative results of operations ...................................
3300 RTC nonredeemable capital certificates ........................
3300 Contributed capital—principal fund assessments .......

30,942

30,943

2,513
4,438
–31,287
1,057

2,513
4,847
–31,286
1,057

3999

Total net position .....................................................

–23,279

–22,869

4999

Total liabilities and net position ...................................

7,663

8,074

f

BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM
Program and Financing (in millions of dollars)
2004 actual

Identification code 99–4450–0–3–803

2005 est.

2006 est.

09.01
09.02
09.03
09.04

Obligations by program activity:
Monetary and economic policy ......................................
Services to financial institutions and the public .........
Supervision and regulation of financial institutions
System policy direction and oversight ..........................

101
5
107
42

109
6
115
45

112
6
119
47

09.09
09.10

Subtotal: Board operating expenses .........................
Office of Inspector General operating expenses ...........

255
4

275
4

284
4

10.00

Total new obligations ................................................

259

279

Budgetary resources available for obligation:
New budget authority (gross) ........................................
Total new obligations ....................................................

259
¥259

279
¥279

288
¥288

The figures presented may differ from other Board financial material because they are prepared in accordance
with OMB guidelines which vary from the Board’s budget and accounting procedures.

The Federal Reserve System operates under the provisions
of the Federal Reserve Act of 1913, as amended, and other
acts of the Congress.
Program.—To carry out its responsibilities under this Act,
the Board determines general monetary, credit, and operating
policies for the System as a whole and formulates the rules
and regulations necessary to carry out the purposes of the
Federal Reserve Act. The Board’s principal duties consist of
exerting an influence over credit conditions and supervising
the Federal Reserve banks and member banks.
Financing.—Under the provisions of section 10 of the Federal Reserve Act, the Board of Governors levies upon the
Federal Reserve banks, in proportion to their capital and
surplus, an assessment sufficient to pay its estimated expenses. The Board, under this Act, determines and prescribes
the manner in which its obligations are incurred and its expenses paid. Funds derived from assessments are deposited
in the Federal Reserve Bank of Richmond, and this Act provides that such funds ‘‘shall not be construed to be Government funds or appropriated moneys.’’ No Government appropriation is required to support operations of the Board.
The information presented pertains to Board operations
only. Expenditures made on behalf of the Federal Reserve
banks for production, issuance, retirement, and shipment of
Federal Reserve notes are not included, since they are reimbursed in full by the Federal Reserve banks.

288

22.00
23.95

Net budget authority and outlays:
Budget authority ............................................................ ................... ................... ...................
Outlays ........................................................................... ................... ................... ...................

Object Classification (in millions of dollars)

259

279

288

72.40
73.10
73.20

Change in obligated balances:
Obligated balance, start of year ...................................
Total new obligations ....................................................
Total outlays (gross) ......................................................

26
259
¥259

26
279
¥279

26
288
¥288

74.40

Obligated balance, end of year ................................

26

26

26

86.97

Outlays (gross), detail:
Outlays from new mandatory authority .........................

259

279

288

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2006 est.

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¥288

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11.3
11.5

Personnel compensation:
Full-time permanent ..................................................
Other than full-time permanent ...............................
Other personnel compensation ..................................

148
3
2

155
3
2

166
3
2

11.9
12.1
21.0
22.0
23.3
24.0
25.1
25.2
25.2
26.0
31.0

Total personnel compensation ..............................
Civilian personnel benefits ............................................
Travel and transportation of persons ............................
Transportation of things ................................................
Communications, utilities, and miscellaneous charges
Printing and reproduction ..............................................
Advisory and assistance services ..................................
Other services ................................................................
Other services ................................................................
Supplies and materials .................................................
Equipment ......................................................................

153
28
5
1
9
2
2
25
4
8
22

160
28
5
2
9
2
4
35
4
9
21

171
30
5
2
10
2
2
31
4
10
21

99.0

New budget authority (gross), detail:
Mandatory:
69.00
Offsetting collections (cash) .....................................

Offsets:
Against gross budget authority and outlays:
88.40
Offsetting collections (cash) from: Non-Federal
sources ..................................................................

2004 actual

Identification code 99–4450–0–3–803

Reimbursable obligations .....................................

259

279

288

99.9

Total new obligations ................................................

259

279

288

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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102