The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
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 cprice-sewell on PROD1PC66 with BUDGET PAG 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 ............................................................... VerDate Aug 31 2005 13:01 Jan 26, 2006 Jkt 206762 PO 00000 Cash, cash equivalents ................................................... Other assets ..................................................................... 65 13 283 13 Total assets ............................................................... LIABILITIES: 2202 Interest payable ............................................................... 2203 Debt ................................................................................... 2207 Other ................................................................................. 2,906 3,212 157 8,141 42 236 8,141 89 2999 1999 Total liabilities .......................................................... NET POSITION: 3100 FICO capital stock purchased by FHLBanks ................. 3300 Cumulative results of operations ................................... 3300 FSLIC capital certificates ................................................ 8,340 8,466 680 2,056 –8,170 680 2,236 –8,170 3999 Total net position ..................................................... –5,434 –5,254 4999 Total liabilities and net position ................................... 2,906 3,212 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) 2004 actual Identification code 99–4029–0–3–373 2004 actual Identification code 99–4033–0–3–373 1801 1901 2,736 92 2005 actual 2,916 ....................... Frm 00001 Fmt 3604 2005 actual ASSETS: Investments in US securities: 1102 Principal fund account investment, net ................. 1206 Assessments receivable for interest expense ................ 7,327 886 7,766 888 1999 8,213 8,654 Sfmt 3633 Total assets ............................................................... E:\BUDGET\FVF.XXX FVF 1227 1228 THE BUDGET FOR FISCAL YEAR 2007 FINANCING VEHICLES—Continued RESOLUTION FUNDING CORPORATION—Continued 89.00 90.00 Balance Sheet (in millions of dollars)—Continued 2004 actual Identification code 99–4029–0–3–373 2202 2203 LIABILITIES: Accrued interest payable on long-term obligations ..... Debt ................................................................................... 2999 2005 actual 886 30,079 888 30,078 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 ....... 30,965 30,966 2,513 4,965 –31,286 1,056 2,513 5,405 –31,286 1,056 3999 Total net position ..................................................... –22,752 –22,312 4999 Total liabilities and net position ................................... 8,213 8,654 f BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Program and Financing (in millions of dollars) 2005 actual Identification code 99–4450–0–3–803 2007 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 .......................... 108 5 113 45 115 5 121 48 120 6 125 50 09.09 09.10 Subtotal: Board operating expenses ......................... Office of Inspector General operating expenses ........... 271 4 289 4 301 4 10.00 Total new obligations ................................................ 275 293 305 22.00 23.95 Budgetary resources available for obligation: New budget authority (gross) ........................................ Total new obligations .................................................... 275 ¥275 293 ¥293 305 ¥305 New budget authority (gross), detail: Mandatory: 69.00 Spending authority from offsetting collections (gross): Offsetting collections (cash) ................... Change in obligated balances: 72.40 Obligated balance, start of year ................................... 73.10 Total new obligations .................................................... 73.20 Total outlays (gross) ...................................................... cprice-sewell on PROD1PC66 with BUDGET PAG 2006 est. 275 293 305 26 275 ¥275 26 293 ¥293 26 305 ¥305 Obligated balance, end of year ................................ 26 26 26 86.97 Outlays (gross), detail: Outlays from new mandatory authority ......................... 275 293 305 Offsets: Against gross budget authority and outlays: 88.40 Offsetting collections (cash) from: Non-Federal sources .................................................................. ¥275 ¥293 ¥305 Frm 00002 Fmt 3604 13:01 Jan 26, 2006 Jkt 206762 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. Object Classification (in millions of dollars) 74.40 VerDate Aug 31 2005 Net budget authority and outlays: Budget authority ............................................................ ................... ................... ................... Outlays ........................................................................... ................... ................... ................... PO 00000 2005 actual Identification code 99–4450–0–3–803 2006 est. 2007 est. 11.1 11.3 11.5 Personnel compensation: Full-time permanent .................................................. Other than full-time permanent ............................... Other personnel compensation .................................. 159 3 2 163 3 2 178 3 3 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 ...................................................................... 164 31 6 1 9 2 4 31 4 8 15 168 28 6 1 9 2 4 33 4 11 27 184 33 6 1 10 2 4 34 4 10 17 99.0 Reimbursable obligations ..................................... 275 293 305 99.9 Total new obligations ................................................ 275 293 305 Sfmt 3643 E:\BUDGET\FVF.XXX FVF