Courtesy of Pam Martens
Photo of the Trading Floor at the New York Fed (Obtained by Wall Street On Parade from an Educational Video Despite Stonewalling by the New York Fed)
According to KPMG’s 2017 and 2018 audit of the Federal Reserve Bank of New York (New York Fed), which is just one of the 12 regional banks of the Federal Reserve System, it has provided more than half of all monies flowing to the U.S. Treasury from regional Fed banks since President Donald Trump took office. In 2017, the New York Fed shipped off $44.6 billion of the total $80.6 billion of all 12 regional banks that was remitted to the U.S. Treasury. In 2018, the New York Fed’s remittance was $33.6 billion of the total $65.3 billion from the regional Fed banks.
But there was some fancy footwork in two pieces of Congressional legislation that were passed in 2018 that boosted the amount the New York Fed and other regional Fed banks would be shipping off to the Treasury to help reduce the budget deficit by reducing the amount of surplus the Fed banks held. This is how KPMG explained it in the 2018 audit report:
“In accordance with the Federal Reserve Act, the Bank remits excess earnings to the Treasury after providing for the cost of operations, payment of dividends, and reservation of an amount necessary to maintain the Bank’s allocated portion of the aggregate surplus limitation.
“For the year ending December 31, 2017 and through February 8, 2018, the aggregate surplus limitation was $10 billion. On February 9, 2018, the Budget Act reduced the aggregate surplus limitation to $7.5 billion, which required the Reserve Banks to make a lump-sum payment to the Treasury in the amount of $2.5 billion; the payment was remitted to the Treasury on February 22, 2018, and the [New York Fed] Bank’s share of this remittance was $788 million. After making the transfer required by the Budget Act, the Bank’s allocated portion of the aggregate $7.5 billion surplus was $2.4 billion.
“On May 24, 2018, the Economic Growth Act reduced the aggregate surplus limitation to $6.825 billion, which required the Reserve Banks to make a lump-sum payment to the Treasury in the amount of $675 million; the payment was remitted to the Treasury on June 21, 2018, and the Bank’s share of this remittance was $213 million. After making the transfer required by the Economic Growth Act, the Bank’s allocated portion of the aggregate $6.825 billion surplus was $2.2 billion.”
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