More than $88 billion was paid to the U.S. Treasury by the Federal Reserve system in 2020, up $33.3 billion from the previous year, according to a report issued Monday.
In its report on Reserve Bank income and expense data and transfers to Treasury for 2020, the Fed said the increase in the district banks’ net income was mostly attributed to a decrease in interest expense associated with reserve balances held by banks and a decrease in interest expense associated with securities under agreement to resell. Income to the district banks comes mostly from interest income on securities purchased through the system’s open market operations, according to a release by the Fed.
The Fed also noted that district banks realized net income of $405 million from facilities established in response to the COVID-19 pandemic. The Fed said the district banks had interest expense of $7.9 billion primarily associated with reserve balances held by depository institutions, and interest expense of $711 million on securities sold under agreement to repurchase.
The 2020 Fed remittances of $88.5 billion to the Treasury are the largest since 2016 when $91.5 billion was returned.