2015 Year in Review: A message from Eric S. Rosengren, President & CEO, and Kenneth C. Montgomery, First Vice President & COO
We are pleased to share the Federal Reserve Bank of Boston's audited financial statements for 2015. Our financial statements show that the Bank remitted $3 billion to the U.S. Treasury in earnings after expenses and dividends—part of the $117.1 billion the Federal Reserve System as a whole remitted to the Treasury.
As in years past, we will take this opportunity to provide a retrospective of some of the Bank's work over the past 12 months and offer a look ahead.
In 2015, the Bank continued to support smaller cities in New England through the Working Cities Challenge, which helps communities work toward their own resurgence through cross-sector collaboration. Significant progress is being made among the winning cities of Lawrence, Fitchburg, Chelsea, and Holyoke, Massachusetts. Additionally, the Bank launched a second round of the competition in Massachusetts, and announced an expansion of the competition to Rhode Island. Both efforts are now underway.
Recognizing the critical importance of effective information security practices for financial institutions, the Boston Fed embarked on a variety of efforts in the cybersecurity realm aimed at mitigating risk to the overall financial system – through proactive risk management, including cyber-threat and best practice sharing among regional financial institutions.
This year the Bank's economic conference focused on central bankers' use of macroprudential tools to maintain financial stability. Discussions focused on the complexities of the Fed's dual-mandate of price stability and maximum employment; whether or not U.S. monetary policy should have a three-part mandate (adding financial stability); and microprudential and macroprudential supervisory policies.
Additionally, Bank economists' vigorous research contributed to national monetary policy considerations and regional economic analysis.
The Bank also remained engaged in the evolving global payments landscape. Our contributions include studying consumers' payment preferences, mobile and digital payments innovations, and work on security and speed in the context of the Federal Reserve's leadership of the Strategies for Improving the U.S. Payments System ("SIPS").
In addition to efforts in the region, the Boston Fed remained a strong contributor to the Federal Reserve System's work. The Bank continued to effectively deliver on System-level responsibilities including guiding System financial management practices and technology, supporting the U.S. Treasury Bureau of Fiscal Services, and providing national network security services, among others.
In the System's core monetary policy responsibility, December 2015 marked a turning point from the near-zero rates that had prevailed for seven years. Consistent with the Federal Reserve Bank rotations on the Federal Open Market Committee, Boston is a voting member of the Committee in 2016.
This summary serves as a brief overview of some of the important work of the Federal Reserve Bank of Boston. We would like to thank our Bank colleagues, as well as regional stakeholders who partner with us in so many facets of our work. To receive regular updates from the Boston Fed, please consider subscribing to our quarterly newsletter Highlights from the Boston Fed. And please join us in looking forward to a revamped website, bostonfed.org, arriving in summer 2016, which will better serve our stakeholders' needs and interests.
Eric S. Rosengren
President & Chief Executive Officer
Kenneth C. Montgomery
First Vice President & Chief Operating Officer
The Federal Reserve Board engaged KPMG to audit the 2015 combined and individual financial statements of the Reserve Banks and Maiden Lane LLC.
In 2015, KPMG also conducted audits of internal controls over financial reporting for each of the Reserve Banks. Fees for KPMG services totaled $6.7 million, of which $0.4 million was for the audit of Maiden Lane LLC. To ensure auditor independence, the Board requires that KPMG be independent in all matters relating to the audits. Specifically, KPMG may not perform services for the Reserve Banks or others that would place it in a position of auditing its own work, making management decisions on behalf of the Reserve Banks, or in any other way impairing its audit independence. In 2015, the Bank did not engage KPMG for any non-audit services.
In addition, KPMG audited the Office of Employee Benefits of the Federal Reserve System (OEB), the Retirement Plan for Employees of the Federal Reserve System (System Plan), and the Thrift Plan for Employees of the Federal Reserve System (Thrift Plan). The System Plan and the Thrift Plan provide retirement benefits to employees of the Board, the Federal Reserve Banks, the OEB, and the Consumer Financial Protection Bureau.