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By law, the Treasury has claim to all income after expenses (and a standard 6% dividend to member banks). This can be found in the US Code ..
TITLE 12 > CHAPTER 3 > SUBCHAPTER VI > § 290
Use of earnings transferred to Treasury
"The net earnings derived by the ... Federal reserve banks shall, in the discretion of the Secretary, be used to supplement the gold reserve held against outstanding United States notes, or shall be applied to the reduction of the outstanding bonded indebtedness of the United States under regulations to be prescribed by the Secretary of the Treasury..."
As an example, let's look at the income statement for the Federal Reserve http://www.federalreserve.gov/boarddocs/…
Note on page 2 under "Combined Statements of Income" it shows
Interest on U.S. Government Securities: $40B
Payment to U.S. Treasury ... $34B
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Who owns the securities at the Federal Reserve?
The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the United States.The Federal Reserve System fulfills its public mission as an independent entity within government. It is not "owned" by anyone and is not a private, profit-making institution.However, the Federal Reserve is subject to oversight by the Congress, which often reviews the Federal Reserve's activities and can alter its responsibilities by statute.
Where does the profit from the federal reserve go?
About 95% of it goes to the Treasury, and the other 5% is for cost of maintenance and payment of emploees.
What are the example of Revenues?
Revenue reserve is created out of revenue Profit . It is created out of Revenue Profit for exaple General Reserve, Dividend equalization reserve, Investment fluctuation reserve etc.
What are the examples of revenue reserves?
Revenue reserve is created out of revenue Profit . It is created out of Revenue Profit for exaple General Reserve, Dividend equalization reserve, Investment fluctuation reserve etc.
Reserve Is a charge against profit or not?
no.it is not charged against profit
How you can increase general reserve when your profit has also decreased?
how can we increase the general reserve
Is the federal reserve a government agency?
The Federal Reserve or Federal Reserve System is part of the U.S. Government and acts as the country's central bank. However, it operates independent of the President, the rest of the Executive Branch, and the Legislative Branch. The Federal Reserve gets its authority from Congress and is subject to congressional oversight. It is compose of 12 Federal Reserve Banks, as well as numerous private banks, a Board of Governors and the Federal Open Market Committee (FOMC). The FOMC establishes monetary policy. There are numerous other functions and responsibilities. See Sources and related links for a detailed description including the duties and responsibilities of the Federal Reserve.
Difference between provision and reserve?
Provisions are charge against profit and Reserves are appropriation of profit.
Who owns the federal reserve bank in the US?
AnswerThe Federal Reserve Bank in the USA is a privately owned cartel: it is not a Government agency."Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders."- The Honorable Louis McFadden, Chairman of the House Banking and Currency Committee in the 1930s"Most Americans are content with believing that the Federal Reserve is just another stuffy government agency that sets our interest rates and that is watching out for the best interests of the American people. But that is not the case at all. The truth is that the Federal Reserve is a private banking cartel that has been designed to systematically destroy the value of our currency, drain the wealth of the American public and enslave the federal government to perpetually expanding debt. ...#1 The Federal Reserve System Is A Privately Owned Banking CartelThe Federal Reserve is not a government agency.The truth is that it is a privately owned central bank. It is owned by the banks that are members of the Federal Reserve system. We do not know how much of the system each bank owns, because that has never been disclosed to the American people.The Federal Reserve openly admits that it is privately owned. When it was defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve stated unequivocally in court that it was "not an agency" of the federal government and therefore not subject to the Freedom of Information Act....[All above quotes taken From "10 Things That Every American Should Know About The Federal Reserve" at http://theeconomiccollapseblog.com/archives/10-things-that-every-american-should-know-about-the-federal-reserve]Who owns the Federal Reserve?The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects. As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.......[Above quote From "Federal Reserve Education Fed Basics" at http://www.federalreserveeducation.org/faq/topics/fed_basics.cfm ]
What method is used by Federal Reserve Banks to determine the amount of credit they extend?
Since the Federal Reserve Banks are not operated for profit, profit considerations have no effect on the amount of credit they extend. With that said, the amount of credit extended is determined primarily by the monetary policy being pursued in the public interest. These monetary policies will either increase or decrease the availability of bank reserves, and thus ultimately affect the amount of credit that can be extended at any particular point in time.
What should be Journal entry for creation of general reserve?
Reserves always created from profit. Therefore the Journal entry will be for creating reserves Dr Profit & Loss A/c CR Reserve A/c
Are taxes the sole source of government income?
No. For example, the Federal Reserve can make a profit that the U.S. Treasury keeps (http://www.washingtonpost.com/wp-dyn/content/article/2010/01/11/AR2010011103892.html).
