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Federal R eserve Bank OF DALLAS HELEN E. HOLCOM B FIRST VICE PRESIDENT AND CHIEF OPERATING OFFICER D ALLAS, TEXAS 752 65 -590 6 February 14, 1997 Notice 97-19 TO: The Chief Operating Officer o f each financial institution and others concerned in the Eleventh Federal Reserve District SUBJECT Preliminary Figures on the Operating Income of the Federal Reserve Banks DETAILS The Board o f Governors o f the Federal Reserve System has announced preliminary figures on the operating income o f the Federal Reserve Banks during 1996. Federal Reserve System income is derived primarily from interest earned on U.S. government securities that the Federal Reserve has acquired through open market operations. ATTACHMENT A copy o f the Board’s press release announcing the preliminary figures is attached. MORE INFORMATION For further information, please contact Claude Davis at (214) 922-5607. For additional copies o f this Bank's notice and the Board’s press release, please contact the Public Affairs Department at (214) 922-5254. Sincerely, For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas: Dallas Office (800) 333 -4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) W: FEDERAL RESERVE press release * • • • • * For immediate release January 13, 1997 Preliminary figures indicate that operating income of the Federal Reserve Banks amounted to $25,163 billion during 1996. Net income before payment of dividends, additions to surplus, and payments to the Treasury totaled $20,974 billion. About $20,083 billion of this net income was distributed to the U.S. Treasury during 199 6. Federal Reserve System income is derived primarily from interest earned on U.S. government securities that the Federal Reserve has acquired through open market operations. Income from the provision of financial services amounted to $787.7 million. Operating expenses of the 12 Reserve Banks and branches totaled $1,781 billion. In addition, earnings credits in the amount of $3 06.8 million were granted to depository institutions under the Monetary Control Act of 1980. Assessments to Reserve Banks for Board expenditures totaled $162.6 million and the cost of currency amounted to $402.5 million. Net deductions from income amounted to $1,639 billion, resulting primarily from unrealized losses on assets denominated in foreign currencies revalued to reflect current market exchange rates. Statutory dividends to member banks were $255.9 million. Under the policy established by the Board of Governors at the end of 1964, all net income after the statutory dividend 2 to member banks and the amount necessary to equate surplus to paid-in capital is transferred to the U.S. Treasury. In October 1996 the Reserve Banks also transferred $106 million from their surplus accounts to the Treasury, as statutorily required. - 0-