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August 16, 2013

Transparency and Sources of Information on the Federal Reserve’s Operations, Income, and Balance Sheet

Michael Fleming and Deborah Leonard

This week-long series examined the evolution of the Federal Reserve’s securities portfolio and its performance over time. While the intent has been to enhance understanding of the Fed’s activities, the Federal Reserve has long maintained a commitment to transparency and accountability. The historical information presented in these posts represents the work of New York Fed staff to collect portfolio-related information from annual statements and reports, most of which are public. To enhance public access, the resulting time series we compiled are being provided in downloadable Excel files accompanying each post. In this last post of the series, we review sources of information on the Fed’s operations, income, and balance sheet.


Balance Sheet and Financial Statements
The Fed has been publishing relatively detailed information on its balance sheet and financial statements for some time.
  • The Federal Reserve’s balance sheet is presented on a weekly basis in the H.4.1 statistical release “Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks.” This release presents a balance sheet for each Federal Reserve Bank, a consolidated balance sheet for all twelve Reserve Banks, an associated statement that lists the factors affecting reserve balances of depository institutions, and several other tables presenting information on the assets, liabilities, and commitments of the Federal Reserve Banks. The release has been modified over time to separately present certain line items, including since April 18, 2013, the amount of unamortized premiums and unamortized discounts on securities held outright (which were previously included as components of “other” assets and liabilities, respectively). The H.4.1 is typically published every Thursday around 4:30 p.m. by the Board of Governors. Releases prior to June 27, 1996, are available in the FRASER archive hosted by the St. Louis Fed.

  • The Board of Governors and the Federal Reserve Banks annually prepare and release financial statements reflecting year-end balances and income and expenses for the year then ended. They are available either as stand-alone documents (since 2008) or as part of the Board of Governors’ annual reports (prior to 2008). A full archive of the Board’s annual reports since 1914 is available on the St. Louis Fed’s FRASER archive.

  • Since 2012, unaudited quarterly financial reports present a summary of financial information on the combined financial position and results of operations of the Reserve Banks.

Information on Monetary Policy and the System Open Market Account
The Fed also releases detailed information on its policy decisions, and on the operations and holdings of the System Open Market Account.
  • Federal Open Market Committee (FOMC) policy statements and meeting minutes explain policy decisions and directives given to the New York Fed for the conduct of open market operations. Since April 2011, the Chairman of the FOMC has held press briefings four times per year to present the Committee’s current economic projections and to provide additional context for its policy decisions. Other ad hoc, material actions taken by the Board of Governors or Reserve Banks are announced in press releases.

  • The New York Fed conducts open market operations on behalf of the FOMC in accordance with the Committee’s directives. In addition to publishing statements of the operating policies for conducting open market operations, the New York Fed announces its planned operations in advance and releases aggregate (and some transaction-level) results of its operations in a timely manner. Additional information explaining unconventional policy programs is provided in Frequently Asked Questions.

  • The New York Fed’s Manager of the System Open Market Account submits an annual report to the FOMC, explaining the conduct of domestic open market operations in support of the Committee’s directives.

  • Data detailing the specific dollar-denominated securities held in the System Open Market Account as of each weekly H.4.1 reporting date since 2003 are available on the New York Fed’s website. This information identifies the individual Treasury securities, agency debt securities, and agency mortgage-backed securities (MBS) held in the portfolio and their amounts. A historical data export builder enables users to download a snapshot of the portfolio as of a selected date, a time series of holdings of specific securities, or security-level data in quarterly (for MBS) or monthly (for non-MBS) intervals, as well as a summary of total holdings at weekly intervals.

Information on Crisis-Era Policy Responses and Facilities
The Fed provided significant information during the financial crisis on its policy responses and new facilities, and has reported additional detailed, transaction-level information since the crisis on facility usage.
  • An overview of the Federal Reserve’s credit and liquidity programs and the balance sheet can be found here. This site includes descriptive information about the Fed’s activities, as well as links to financial reports and other transparency-related reports.

  • Detailed information about the credit and liquidity programs and other monetary policy tools that the Federal Reserve used to respond to the financial crisis that emerged in the summer of 2007 is supplied in monthly reports and transaction data.

  • Detailed portfolio and transactional information about the three limited liability companies that were established by the New York Fed to facilitate the acquisition of Bear Stearns by JPMorgan Chase and the government’s restructuring of AIG are also available.

Open Market Transactions and Lending
In addition to the information the Fed has long reported about its operations and on aggregate discount window advances, more detail is now provided in accordance with Section 1103 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
  • Complete details of individual open market transactions and discount window advances conducted after the date of the law’s enactment are published quarterly, approximately two years after the transaction was conducted. Information includes the date and amount of the transaction, the counterparty to the transaction, the price or interest rate at which the transaction was conducted, and other relevant terms.

Disclaimer
The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.





Fleming_michael Michael Fleming is a vice president in the Federal Reserve Bank of New York's Research and Statistics Group.


Deborah Leonard is an assistant vice president in the Bank's Markets Group.

Posted by Blog Author at 07:00:00 AM in Fiscal Policy
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