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FEDERAL RESERVE BANK
OF NEW YORK
April 28, 1988
1987 PRICED SERVICES REPORT
To All Depository Institutions, and Others Concerned,
in the Second Federal Reserve District:
Following is the text of a statement issued by the Board of Governors of the Federal
Reserve System:
The Federal Reserve Board has issued a report summarizing developments in the priced
services areas for 1987 and providing detailed financial results of providing those services.
The Board issues a report on priced services annually and a priced service balance sheet
and income statement in the Federal Reserve Bulletin quarterly. The financial statements are
designed to reflect standard accounting practices, taking into account the nature of the Federal
Reserve’s activities and its unique position in this field.
Copies of the report may be obtained upon request directed to our Circulars Division
(Tel. No. 212-720-5215 or 5216).
E.
G e r a l d C o r r ig a n ,
P resid en t.
/? 7 /ON 3 7BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
ANNUAL REPORT ON
PRICED SERVICES ACTIVITIES
1987
PRINTED IN NEW YORK
FEDERAL RESERVE press release
April 12, 1988
The Federal Reserve Board today issued a report smimarizing
developments in the priced services areas for 1987 and providing detailed
financial results of providing those services.
The Board issues a report on priced services annually and a priced
service balance sheet and inccme statement in the Federal Reserve Bulletin
quarterly.
The financial statements are designed to reflect standard
accounting practices, taking into account the nature of the Federal
Reserve's activities and its unique position in this field.
1987 ANNUAL REPORT FOR PRICED SERVICES
I.
OVERVIEW
The Reserve Banks fully recovered their costs of
providing priced services in 1987, as required by the
Monetary Control Act of 1980.
The System recovered 104.6
percent of its operating expenses and imputed costs.
During 1987, the Federal Reserve implemented a
•number of programs to improve the processing of payments and
further refine certain fee structures.
The Board issued for
public comment a series of proposals to implement the
provisions of the Expedited Funds Availability Act passed by
Congress in August.
Additional initiatives to improve the
efficiency and security of the payments system continue to
be pursued by the System.
II.
FINANCIAL PERFORMANCE
The Federal Reserve is required, under the Monetary
Control Act, to establish fees for its priced services.
These fees must, over the long run, cover the full costs of
providing such services, including the cost of float and an
allocation of imputed costs which takes into account the
taxes that would have been paid and the return on capital
that would have been provided had the services been
2
furnished by a private sector firm.
Those costs were fully
recovered in 1987.
Total revenues from Federal Reserve priced services
were $649.7 million in 1987, $22.0 million above 1986
revenues.
Production costs rose by $9.3 million in 1987 to
$506.8 million.
The resulting $142.9 million in income from
operations was reduced by imputed costs totalling $52.7
million and augmented by imputed income from clearing
balances of $5.0 million, yielding income before imputed
income taxes of $95.2 million.
After-tax income for 1987
was $62.9 million, up from $57.6 million in 1986.
A pro
forma balance sheet and income statement for Federal Reserve
priced services are presented in Tables 1 and 2.
The 1987 recovery of 104.6 percent of total costs
compares to 104.2 percent in 1986.
Each Federal Reserve
major service line had pre-tax income that covered total
operating and imputed costs.
System financial performance
by service line is presented in Tc*ole 3.
Table 4 provides
District financial results for locally priced services, and
priced services volumes for 1987 are presented in Table 5.
3
III.
SERVICE HIGHLIGHTS
CHECK COLLECTION SERVICES
Check volume processed by the Federal Reserve
totalled 17 billion items, an increase of 4.8 percent over
1986 volume.
In March 1987, the Board approved a proposal,
issued for public comment in November 1986, to allow Federal
Reserve Banks to provide a redeposit service for low-dollar
checks that are returned because of insufficient or
uncollected funds.
Under this service, Reserve Banks
intercept dishonored checks and redeposit them on behalf of
the collecting institution.
Approximately 60 percent of
these checks are paid when presented for the second time.
This service accelerates the finality of payment and reduces
handling costs in the labor-intensive return process.
In August, Congress passed the Competitive Equality
in Banking Act which, effective September 1, 1988, sets
forth time schedules within which depository institutions
must make funds deposited in customer accounts available for
withdrawal, and requires institutions to disclose funds
availability policies to their customers.
In December, the
Board issued for public comment a series of proposals to
implement the provisions of the Act and to improve the
process of returning unpaid checks to the bank of first
4
deposit.
The Board proposed a group of Federal Reserve Bank
services to expedite the handling and transportation of
return items«
The proposed services, designed to facilitate
compliance with the regulations, include Reserve Bank
acceptance and processing of any returned check and delivery
of returns directly to the depository bank.
The System
engaged in extensive consultation with the banking industry
and consumer groups in formulating the proposals.
Reserve
Banks also plan to speed the processing and reduce the costs
of returned checks by accelerating their internal handling
of the items and by automating the return item process.
An
additional aspect of the December proposal was to implement
as a permanent service the truncation of checks.
This
service has been pilot tested by the Federal Reserve Banks
of Atlanta, Kansas City, Minneapolis, Philadelphia, and
Richmond.
ELECTRONIC PAYMENTS
SERVICES
During 1987, the Federal Reserve System formally
established a project that is intended to set a strategic
direction for the System’s electronic payment services.
The
study is focusing on the business requirements for the
1990s, including operating hours, system reliability, types
of service offerings, and the types of formats used to make
electronic payments.
Extensive market research is being
initiated and meetings with banking industry representatives
5
are being held to provide insight regarding environmental
changes that will affect the Federal Reserve's electronic
payments services in the future.
Because of the disruption that can be caused when
Federal Reserve electronic payment services experience
operating outages, a number of steps were taken in 1987 to
improve availability and the reliability.
Specifically,
quality standards were raised and uptime performance for the
Reserve Bank's Fedwire service improved significantly during
the year.
In addition, steps were undertaken to enhance the
System's contingency processing arrangements.
The Federal
Reserve Bank of New York established a remote contingency
processing center outside of New York City.
Tests have
shown that funds and securities transfer operations can be
restored at this site within four to six hours after
catastrophic outage has been declared.
The Federal Reserve
Banks of Richmond and Atlanta began developing an
arrangement that would permit these two offices to provide
backup for each other.
This approach for providing
contingency processing support is called the "buddy system."
Finally, the Reserve Banks have also been testing methods
for reducing the time that it takes them to restore
operations at the shared contingency site at Culpeper,
Virginia.
Substantial reductions in recovery times have
been achieved.
6
A number of continuing initiatives were also
advanced in 1987 .
The number of institutions with on-line
connections to the Reserve Banks rose to almost 7,000c
Nearly 80 percent of- these connections had been encrypted by
year end and substantial progress was made in converting the
connections with depository institutions to the System
Network Architecture„
Fuads Transfer Service
Fifty-three million funds transfers were processed
in 1987, an increase of 6 08 percent over the 1986 l e v e l 0
While transaction volume growth slowed somewhat in 1987, the
value of funds transfers increased at a rate of nearly 14
percent to $142 t r i l l i o n
Steps to enhance the reliability of funds transfer
operations as well as to improve system security consumed
considerable resources during 1987 „
Reserve Banks'
In addition, the
funds transfer application software was
modified to process the American Bankers Association's
structured third-party transfer message format, which will
reduce the need for manual intervention in handling the
majority of third-party FedwireSo
quarter,
During the fourth
the Reserve Banks began to send transfers using the
format and, beginning April 1, 1988, depository institutions
that do not send third-party messages in the structured
format will be assessed a s u rcharge»
7
Automated Clearing House Services
The volume of automated clearing house
(ACH)
transactions reached a level of 861 million transactions, an
increase of about 21 percent over 1986 volume levels.
Fifty-five percent, or 475 million transactions, were
commercial ACH transactions.
Improvements in the efficiency of return item
processing continued, as more than 50 percent of all return
items deposited with the Reserve Banks were deposited in
automated form.
The ACH application software was enhanced
to provide a number of new features.
An automated system
for balancing ACH files exchanged among the Reserve Banks
was developed and tested.
This feature is expected to
improve the reliability and the accuracy of the ACH service„
The new ANSI X12 compatible, corporate trade exchange format
was accommodated and the Treasury Department's Vendor
Express program was implemented successfully.
Automated
accounting advices were also made available to depository
institutions.
SECURITIES SERVICES
Bookentry Securities
Services
In 1987, the Federal Reserve processed 7.3 million
on-line Treasury bookentry securities transfers as fiscal
agent, a 12.3 percent increase over the 6.5 million
processed in 1986.
Volume of on-line Federal agency
8
bookentry securities transfers was 2.1 million, a 19.9
percent increase over the 1.7 million processed in 1986.
On May 1, 1987, the Board reduced on-line bookentry
securities transfer fees charged to depository institutions
from $3.00 to $2.25, and off-line fees from $10.00 to $7.00,
in order to more closely align costs and revenues in the
priced segment of this service.
Definitive Safekeeping and Noncash Collection
Services
The average monthly volume of definitive
safekeeping issues during 1987 was approximately 163,000, a
decrease of 1.2 percent over 1986.
Noncash collection
annual volume decreased by 11.8 percent, to 3.8 million
items.
Bearer and coupon municipal securities have not been
issued since 1983 tax law revisions, and volumes are
projected to decline steadily into the 1990s.
The 1987 volume declines required Reserve Banks to
continue to emphasize cost control* measures in order to
maintain service levels while matching costs and revenues.
XVo
OUTLOOK FOR
1 988
The Board announced 1988 fees for priced services
in October 1987, with relatively few changes from 1987
levels.
Based on those new fees and projected volumes,
overall recovery is expected to be 101.8 percent of total
costs.
Volumes are generally expected to continue their
9
recent growth patterns, with higher volumes in all areas
except the paper-based securities services.
CHECK COLLECTION SERVICES
Over 90 percent of the check processing fees in
place in 1987 will not change in 1988.
In the Interdistrict
Transportation System (ITS), 70 percent of the 4,300 prices
will not change from 1987 prices.
Of the 30 percent of
prices which will change, 90 percent will be lowered.
Volumes are projected to increase about 3 percent over 1987,
with cost recovery projected at 102.6 percent.
As a result of the Expedited Funds Availability
provision in the Competitive Equality in Banking Act, the
Board has proposed that the Reserve Banks begin to offer new
services to speed the return of unpaid checks beginning
September 1, 1988.
The costs and revenues associated with
the proposed new Federal Reserve Bank Return Item service
are not included in the 1988 estimates.
In the spring of
1988, after the Board has reviewed public comment and
adopted regulations implementing the law, Reserve Banks will
set prices for the new return item services and revise
existing check collection fees accordingly.
Work continues on the project to explore
applications of digitized image technology to the check
collection process.
This project has the potential for
significant future efficiencies and service enhancements in
check and return item processing.
10
ELECTRONIC PAYMENTS SERVICES
During 1988, the Federal Reserve will continue its
work on developing a strategic direction for Federal Reserve
electronic payment services in the 1990s.
Attention will
focus on market research to identify changing service level
requirements, on testing different processing environments,
on studies of alternative methods for implementing message
authentication, and on making improvements in the
reliability of electronic payment services.
Funds Transfer and Net Settlement Services
The basic fee for a funds transfer will be reduced
from $0.50 to $0.47, and the fee for a net settlement entry
will be reduced from $1.30 to $1.00.
The volume of funds
transfers processed is expected to increase 6.4 percent over
the 1987 level.
A recovery rate of 102.7 percent is
projected.
Efforts will focus on improving the reliability of
funds transfer operations by enhancing the automated
operating environment.
In addition, more progress on
improving catastrophic contingency processing arrangements
will be undertaken.
The buddy system will be tested and
alternatives for further improving the usefulness of the
Culpeper contingency site will be initiated.
An operations
status report that was developed in 1987 will also be made
available to depository institutions quarterly so that the
11
System's progress in meeting reliability objects can be
measured.
Automated Clearing House Services
A number of modifications to the ACH fee schedule
will be implemented in 1988.
The interregional transaction
fee will be reduced from $0,018 to $0,017; the night cycle
surcharge for credit transactions will be reduced from $0.03
to $0.02; and the night cycle surcharge for debit
transactions will be reduced from $0.06 to $0,045.
These
reductions reflect the realization of improvements in
automated processing.
On the other hand, the majority of
manual handling fees for the ACH services were increased,
due to higher personnel costs.
The volume of commercial ACH
transactions is projected to increase 21 percent over the
1987 level.
It is anticipated that the Reserve Banks will
recover 100.7 percent of the total costs of providing
commercial ACH services.
During 1988, the automated ACH file balancing
system will be implemented as well as all 1988 rule changes
that were approved by the National Automated Clearing House
Association.
Emphasis will be placed on increasing the use
of electronics for the receipt and delivery of transactions.
In conjunction with steps adopted by the Board of Governors
to reduce risk, new return item services will be offered.
Finally, as in the funds transfer transfer service, an
operations status report will be implemented.
12
SECURITIES SERVICES
Bookentry Securities
Services
The fees for bookentry services will remain the
same in 1988 as in 1987.
Volumes are projected to increase
by 13 percent over 1987 levels, and cost recovery is
projected to be 98 percent.
Price stability following a
1987 price reduction was a high priority.
Definitive Safekeeping and Noncash Collection
Services
Ten Districts will implement price increases in
1988 to offset declining volumes.
Cost recovery is
projected to be 99.7 percent of total costs.
Adjustments to
operations and cost control measures will be pursued, with
further consolidation of the service possible.
-1 3 -
Table 1
Pro Forma Balance Sheet
For Priced Services
Federal Reserve Banks
(in millions)
December 31,
1987
Short-term assets (Note 1)
Imputed reserve requirements
on clearing balances
Investment in marketable
securities
Receivables
Materials and supplies
Prepaid expenses
Net itens in process of
collection (float)
Total short-term assets
$219.6
$251.8
1,610.4
58.3
4.9
6.7
1,846.2
59.7
5.1
6.0
675.7
300.1
$2,575.5
;>ng-tenn assets (Note 2)
Freni ses
Furniture and equipment
Leases and leasehold improvements
Prepaid pension costs
224.5
110.9
3.0
18.7
Total assets
Short-hem liabilities
Clearing balances and balances
arising from early credit
of uncollected items
Short-term debt
Total short-tern liabilities
Decenbar 31,
1986
200.3
118.2
4.3
—
357.1
322.8
$2,932.7
$2,791.6
$2o505.7
69o9
Long-ham liabilities
Obligations under capital leases
Long-term debt
Total long-term liabilities
Total liabilities
Equity
Total liabilities and equity (Note 3)
$2,468.8
$2,398.1
70.7
$2,468.8
$ 2 ,5 7 5 .5
1.2
1.6
107.2
102.1
108.4
103.7
2,684.0
2,572.5
248o7
219.1
$2,932.7
$2,791.6
Details may not add due to rounding.
Accompanying notes are an integral part of these financial statements.
- l li -
Table 2
Pro Foma Income Statement
For Priced Services
Federal Reserve System
For the Years Ending December 31, 1987 and 1986
(in millions)
1987
Income (Note 4) s
Services provided to depository
institutions
1986
$649.7
$627.7
Expenses (Note 5):
Production expenses
506.8
497.5
Inccme fron operations
142.9
130.3
Imputed costs (Note 6):
Interest on float
Interest on debt
Sales taxes
FDIC insurance
$27.4
16.1
7.4
1.8
Income from operations after
imputed costs
Other income and expenses (Note 7) :
Investment income
Earnings credits
52.7
$23.8
13.3
7.3
1.5
90.2
119.1
114.1
5.0
45.8
84.5
114.2
106.3
8.0
Income he fore inccme taxes
95.2
92.4
Imputed income taxes (Note 8)
32.3
34.8
$62.9
$57.6
$29.3
$27.3
Net income
Mono;
Targeted return on equity (Note 8)
Details m y not add due to rmmding.
Accompanying notes are an integral part of these financial statements.
-15-
Motes to the Financial Sfeatessats
The Balance Sheet (Table 1)
Note 1;
Short-tern Assets
The inputed reserve requirerent on clearing balances and
investment in marketable securities reflect the Federal Usserve's treatenant
of clearing balances maintained on deposit with Reserve Banks by depository
institutions.
For balance sheet and incane statement presentation,
clearing balances are reported in a manner carperable to the way
correspondent banks report compensating balances held with them by
respondent institutions. That is, respondent balances held with a
correspondent are subject to a reserve requirement established by the
Federal Reserve.
This reserve requirement must be satisfied with either
vault cash or with non-earning balances maintained at a Reserve Bank.
Following this model, clearing balances maintained with Reserve Banks for
priced service purposes are subjected to irtpubed reserve requirements.
Therefore, a portion of the clearing balances held with the Federal Reserve
is classified on the asset side of the balance sheet as required reserves
and is reflected in a manner similar to vault cash and due from bank
balances nomally shewn on a correspondent bank's balance sheet.
The
rsnainder of clearing balances is assumed to be available for investenant.
For these purposes, the Federal Reserve assmes that all such balances are
invested m thna«=s©nth Treasury bills.
Receivables represent:
1)
amounts due the Reserve Banks for
priced services that have been provided to institutions for which payment
has not yet been received; and, 2)
that share of suspense account and
difference account balances related to priced services.
-
Tha amount
shorn,
16-
for materials and supplies represents the
inventory value of such short-term assets necessary for the ongoing
operations of priced service areas„
Prepaid esq^anses represent items such
as salary advances and travel advances for priced service personnel <,
The account * "Net itsns in the process of collection05 represents
the amount of float as of the balance sheet date and is the difference
between the value of items in the process of collection {including checks*
coupons* securities* wire transfers* and M 3 transactions) and the value of
deferred availability items 0
The cost base for providing services that
must be recovered under the Monetary Control Act includes the cost of float
incurred by the Federal Reserve during the period valued at the Federal
funds rate»
Conventional accounting procedures would call for the gross
amount of itens in the process of collection and deferred availability
ibsns to be included on a balance sheet °
However* because the gross
amounts have no implications for income* costs* or the private sector
adjustetent factor CPSAF) * and because the inclusion of these amounts could
lead to distortions and misinterpretations of the assets (Srployed in the
provision of priced services that must be financed* only the net amount is
shown o
Hote
2%
The net amount represents the assets that involve a financing coste
L o n g - t e m Assets
Long-tesn assets reflected on the balance sheet have bean
allocated to priced services using a direct dstamanatiQn basis 0
The
direct detassdmtion method uses the Federal Reserve °s Planning and Control
System CPACS) to ascertain directly the value of assets used solely in
priced services operations and to apportion the value of jointiy^used
assets between priced and non°prioed services0
Additionally* an estimate
of the assets of the Board of Governors directly involved in the
-17-
development of priced services is included in long-term assets in the
premises account.
An amount for capital leases and leasehold improvements is
included in long-term assets.
"Long-term assets" also includes an
allocation of prepaid pension costs associated with priced services.
The
Federal Reserve Banks implemented Financial Accounting Standards Board
Statement No. 87 —
1, 1987.
Employers' Accounting for Pensions, effective January
In accordance with this statement, the Reserve Banks recognized a
credit to expenses and an increase in this long-term asset account of $18.7
million in 1987.
Note 3:
Liabilities and Equity
A matched-book capital structure for those assets that are not
"self-financing" has been used to determine the liability and equity
amounts.
Short-term assets are financed with short-term debt.
Long-term
assets are financed with long-term debt and equity in a proportion equal to
the ratio of long-term debt and equity of the bank holding companies used
in the PSAF model.
Other short-term liabilities include clearing balances maintained
at Reserve Banks and deposit balances arising from float.
Other long-term
liabilities consist of obligations on capital leases.
The Incane Statement (Table 2)
The income statement reflects income and expenses for priced
services.
Included in these amounts are imputed float costs, imputed
financing costs, and income related to clearing balances.
-
Note 4;
18 -
Income
Income represents charges to depository institutions for priced
services.,
Tills income is realized through one of two methods;
direct
charges to an institution's account or charges against accumilated earnings
credits. Income includes charges for per^itsn fees, fixed fees, package
fees? explicitly priced float, account maintenance fees, shipping and
insurance fees, and surcharges.
Note 5:
Production Expanses
Production expenses include direct, indirect, and otter general
administrative expenses of the Federal Reserve Banks for providing priced
services.
Also included in esqpenses are the expanses of staff of the Board
of Governors working directly on the development of priced services which
amounted to $1.7 million for both 1987 and 1986.
Production expenses were
reduced as a result of the implementation of FASB 87 (See Note 2).
Note 6;
Imputed Costs
Imputed float costs represent the value of float to be recovered,
either explicitly or through per“item fees, during the period.
Float costs
include check, book-entry securities, noncash collection, ACH, and wire
transfer float.
The following table depicts the Federal Reserve's float
performance and float recovery for 1987.
The amonit of float recovered
through charges is valued at the Federal fxmds rate.
The value of this
float is then billed directly to depository institutions or added to the
cost bass subject to recovery for each appropriate service •
Also included in imputed costs is the interest on debt assured
necessary to finance priced service assets and the sales taxes and FDIC
-19-
insurance assessment that the Federal Reserve would have paid had it been a
private business firm*
Float Recovery
Federal Reserve Banks
1987
(Daily average figures in millions)
Total float
Unrecovered float 1 /
Float subject to recovery
Float recovered through:
Incane on clearing balances 2/
As of adjustments 3/
Direct charges 3 /
Per-iten fees 4/
Note 7:
$804„8
48„2
756.6
91.7
350.8
128.7
185.4
Other Incare and Expenses
Other incane and expenses are comprised of incane on clearing
balances and the cost of earnings credits granted to depository institutions on their clearing balances.
Inccme on clearing balances represents
the average coupon equivalent yield on three-month Treasury bills applied
to the total clearing balance maintained, adjusted for the effect of
reserve requirements on clearing balances.
Expenses for earnings
\ j Includes float generated in providing services to government agencies or
in other ©antral bank services.
2 / This amount represents increased income on clearing balances as a result
of reducing imputed reserve requirements through the use of a CIPC
deduction for float when calculating the reserve requirement. This
income then reduces float required to be recovered through other means.
3J Midweek closing float and interterritory check float may be recovered
from depositing institutions through adjustments to the institution's
reserve or clearing balance or by valuing the float at the Federal funds
rate and billing the institution directly.
4/ This float is valued at the Federal funds rate and has been added to the
cost base subject to recovery in 1987.
-2 0 -
ersdits ana derived by applying the average Federal funds rate to the
ZBquired portion of the clearing balances, adjusted for the net effect of
reserve requirements on clearing balances .
Kota 8 s
Incase Taxes and Return on Equity
Ss^uted income taxes are calculated at the effective tax rata
derived from a model consisting of the 25 largest bank holding companies.
The targeted return on equity represents the after-tax rate of
return on equity that the Federal Reserve ^ould have earned had it been a
private business firm based on the bank holding ociTpany model.
Income Statenant by Service (Table 3)
(Note 9)
The income statement by service reflects revenue, operating
e^snsesj, and imputed costs except for income taxes.
The income statsrtsnt
effect of ijxplertenting FA3B 87 (See Note 2) is reported in the Total ooltsm
only on this table and has not been allocated to individual priced
services.
Sxputed costs include float and interest on dsbtff sales taxes
and
the FDIC assessttant.
Float costs are based on the a d ^ m l float incurred in
each priced service.
Other isputed costs are allocated issoog priced
services based on the ratio of the operating costs less shipping costs in
each priced service to the total cost of priced services less total priced
services shipping costs.
Other Income and esqpenses consist of income on clearing balances
and the cost ©f earnings credits for the Federal leserve.
Isaacs® clearing
balances relate directly to the Federal Ieier^a0s offering of priced
services 9 the
mmms
and cost associated with these balances are spread to
-2 1 -
each service based on the ratio of income from each service to total
income.
Taxes and the after-tax targeted rate of return on equity, as
shown on the aggregate incane statement, have not been spread by service
since these elenents relate to the organization as a whole.
Statonent of Revenue and Expanse
For Locally Priced Services (Table 4)
(Note 10)
This table depicts the financial results for each Reserve Bank in
providing locally priced services.
The financial results for each Reserve
Bank do not include the dollars to be recovered through the PSAF and the
net investment on clearing balances.
As such, in order to reconcile Table
4 net revenue data by priced service with that disclosed in Table 3,
adjustments must be made for imputed interest on debt, sales tasses, FDIC
assessment, priced service Board expenses and net income on clearing
balances.
Statement of Priced Services Volumes
(Note 11)
This table shows the absolute volisre and percentage change in the
number of items handled by the Federal Reserve in its priced service
operations.
Wire transfer of funds volume is the number of basic
transactions originated; ACH volume is the total number of ooRinercial items
processed; carmercial check volume reflects the total ccnmercial checks
collected, including both processed and fine sort items; securities
transfers volume consists of the number of basic transfers originated
-2 2 -
on-line; definitive safekeeping is the average number of issues or receipts
maintained; noncash collection volume is the number of itens assessed fees;
and cash transportation volume is the nunber of armored carrier stops.
Income Statement for Priced Services
Federal Reserve System
For the year ending December 31, 1987
(in millions])
Mire
Definitive
Commercial Transfer
Safekeeping
Podk^
Check
and Met
Commercial and Eoncash
Entry
Cash
Total CollectionSettlement
ACH
Collection
Securities Services
Incase fm m services (Eote 9}
$649.7
$500 o(5
$69 o7
$37 o3
$19 o©
$ 8 03
$14.8
50(5 oO
401o0
5 6.(5
30o5
1(5.9
6 03
14.2
Income from operations
142o9
99o<5
13o2
6 07
2.1
2 o0
0.6
Imputed cost®
5 2 07
4(5.1
3o0
2.1
lol
0 o3
0.1
Income from operations
after imputed costs
90o 2
53 o5
10ol
4.(5
loO
1.8
0o6
5o0
5.1
(0.1)
OoO
OoO
(0.0)
(0.05
$4.6
$lo0
$1.8
$0.5
Other income and expenses, net
Income before income
tosses
$95 o2
$58. <5
$10.1
-23-
Operating esqpsnses
Details may not add to totals due to rounding.
Table
Accxm^anying notes are an integral part of these financial statements.
U3
Iteveue a d Expense of Icaally Priced Services at Federal Iteserve Bate, 1907
Millions of Mlara
(N ote 10)
Cbrararaal
Check
Gbllecticn
Tbtal Operatancr Float Tbtal
Cbst
Cbst
Kevsmie Cbst
Not
tome
Definitive Mefeepim
and
NOncBsh Gbllecticn
Tbtal
Tbtal Cgaratiiig Float
Cbst
Gbsfc
Re^erne Oast
C&sEfo Smrkm
Nat
TbtaL
Avenue
Tbtal
Cbst
Net
Ream®
Boston
New todc
Philadelphia
Cleveland
Radmorl
Mamte
Chicago
Stu In ns
Minnsspolis
&nsas City
Dallas
San FcamLax)
35.0
65.6
24o0
^.2
45.6
58.4
6709
23.4
28.6
32.1
35.4
5504
27.4
54o8
17.8
24o0
36.7
46.4
53.4
18.6
23.9
27.3
29.6
39.8
3.8
2.4
1.0
1.2
1.7
0.8
3.1
1.8
(0.1)
0.9
1.2
3.3
31.2
7337
18.8
25.1
38.4
47.2
56.6
20.4
23.8
28.2
30.8
43.1
3.8
8.3
5.2
4.0
7.2
11.2
11.4
3.1
4.8
3.9
4.6
12.3
0.9
3.3
1.3
2.0
0.9
3.0
2.6
1.1
1.2
1.6
1.2
0.0
0.7
2.9
1.1
1.9
1.0
2.4
2.1
1.2
1.0
1.4
1.1
0.1
(0.0)
(0.0)
(0.0)
0.1
(0.0)
0.0
0.0
(0.0)
0.1
0.0
0.0
(0.0)
0.7
2.9
1.1
1.9
1.0
2.4
2.1
1.2
1.1
1.4
1.2
0.1
0.2
0.5
0.2
0.1
(0.1)
0.5
0.5
(0.1)
0.1
0.2
(0.0)
(0.1)
0.6
0.0
1.5
1.9
0.1
0.1
0.7
0.3
2.4
0.4
0.0
6.7
0.6
0.0
1.5
1.7
0.1
0.1
0.7
0.2
2.3
0.4
0.0
6.6
0.0
0.0
0.1
0.1
(0.0)
0.0
0.1
0.0
0.2
(0.0)
0.0
0.1
9ysten Tbtal
500.6
399.7
21.1
420.8
79.7
19.0
16.9
0.0
17.0
2.0
14.8
14.2
0.6
Dstoils smy not edd to totols dus to nuriing.
Table
taaqpmydlng notes m a an integral pert o f those financial statements,
-t-
PRICE) SERVICES VOLUMES
(Items in Thousands)
(Note 11)
Priced Service
Funds Transfers
Commercial ACH
Commercial Checks
Securities Transfers
Definitive Safekeeping
Noncash Collection
Cash Transportation
Percent Change
1987 vb o 1986
7.1%
Percent Change
1986 vso 1985
10.6%
1987
53,278
1986
49,900
475,114
362,557
31 o0
282,528
28 o3
17,007,924
16,225,812
408
15,450,612
5,0
2,061
1,719
19 o9
5,498^
N/A*
163
165
-1.0
159
3,9
3,803
4,312
-11,8
4,637
-7.0
357
363
-1.4
376
-3.6
1985
45,110
♦Effective October 1, 1985, the book-entry transfers of government agency securities only are
considered priced. Since the 1985 figures include U.S. Treasury and government agency
securities for the first three quarters, any comparison of such volumes is not applicable0
Accompanying notes are an integral part of these financial statements.
Table
@FedFRASER