Reviewing 2019, looking ahead to 2020: Eric Rosengren, president & CEO and Kenneth Montgomery, first vice president & COO
The Federal Reserve Bank of Boston is pleased to release audited financial statements for 2019, along with a brief overview of the ways the Reserve Bank impacted the regional and national economy last year.
We look back at 2019, mindful of all that has changed in just these first few months of 2020. The COVID-19 pandemic has created financial hardship in our region and world – and shaken global financial markets. While the extent of the impact of this crisis is still uncertain, we know it will be significant. What is certain is the Fed will continue to take all necessary steps to support the U.S. economy – in 2020, and beyond.
This year’s financial statements show that the Boston Fed remitted $974 million to the U.S. Treasury – a part of the $54.9 billion the Federal Reserve System as a whole remitted to the U.S. Treasury during 2019. Every year, the Federal Reserve remits excess earnings to the U.S. Treasury after expenses, dividends, and reservation of an amount to maintain surplus.
Monetary policy contributions
The Fed Listens events held at Federal Reserve Banks nationwide, including Boston last May, aimed to amplify the public’s voice in monetary policy. The banks invited people from a variety of organizations and walks of life to share experiences and perspectives, to better inform Fed policymakers. These gatherings were prompted, in part, by Boston Fed research that suggested the central bank should gather public input and periodically assess its policy framework.
Also in 2019, Boston Fed President Eric Rosengren was an independent and influential voice among U.S. policymakers as a voting member of the Federal Open Market Committee.
Research that can influence policymaking
Boston Fed economists and analysts explored issues that are at the center of national economic debates. The New England Public Policy Center looked at the consequences of state disinvestment in public higher education, including increasing costs and decreasing opportunity.
At the Bank’s annual economic research conference last October, economists examined geographic disparities across our country. Attendees also asked a challenging and important question: Is it time for policymakers to focus more on improving economic conditions in geographic locations?
Impacting our communities
The Boston Fed expanded to new places and introduced new policy priorities. The Bank has three Working Cities Challenge grant competitions underway in Connecticut, Massachusetts, and Rhode Island, and in 2019 it launched its northern offshoot, the Working Communities Challenge, in Vermont. Four of the six New England states now participate in the challenge, which aims to improve life in post-industrial cities and northern New England’s rural towns and regions by uniting community groups to address chronic problems.
The Boston Fed also began an early child care initiative with the goal of helping working parents face and overcome the so-called "trilemma" of challenges – cost, quality, accessibility – that many encounter obtaining childcare.
Improving the U.S. payment system
The Bank is also at the center of an essential new effort to modernize the U.S. payment system, called the FedNow Service, which is being led by Boston Fed First Vice President Ken Montgomery. FedNow will bring faster payments to the U.S., enabling payments to be settled instantly.
More speed and convenience are clear benefits of faster payments, but they will also help businesses by improving their ability to manage money and allowing them to make time-sensitive payments as needed. Immediate access to funds for individuals will mean fewer fees (late, overdraft, etc.) and a reduction in the need for high-cost borrowing or check-cashing services.
Federal Reserve System contributions
The Federal Reserve began an internal effort to align the platforms and systems used by its human resources, finance, and procurement functions. The project is being led by the Boston Fed Chief Information Officer Don Anderson. The successful completion of the project will bring new efficiency to the Federal Reserve System and enhance efforts to make the Federal Reserve an employer of choice.
Also last year, the Boston Fed’s Supervision, Regulation & Credit division continued to take a leadership role in the System’s Large Institution Supervision Coordinating Committee, which is central to financial reform. The committee is responsible for supervising large banking institutions whose health affects the entire financial system.
Our culture and workforce
The Boston Fed is a community committed to integrity, leadership, diversity and inclusion, and innovation. These core values represent both what the Bank is – and what it aspires to be. That takes a commitment to putting those values into action every day.
The Boston Fed has much to be proud of in 2019. As leaders, we are deeply grateful to the Bank’s dedicated staff, as well as the many partners and stakeholders in the First District who advise us and keep us tuned in to activity in their local communities. The year 2019 was extraordinary, but 2020 is already like nothing we've ever seen. The Bank is at the forefront of providing innovative and needed monetary policy thought leadership, tools, and operations to provide stability during a time of both a global health and financial crisis. It will test all of us. At the Federal Reserve, we believe our past has prepared us for this uncertain future. We are committed to doing all we can to bring our region and nation through it.
President and CEO
First Vice President and COO
The Federal Reserve Board engaged KPMG to audit the 2019 combined and individual financial statements of the Reserve Banks.1
In 2019, KPMG also conducted audits of internal controls over financial reporting for each of the Reserve Banks. Fees for KPMG services totaled $7.2 million. To ensure auditor independence, the Board of Governors requires that KPMG be independent in all matters relating to the audits. Specifically, KPMG may not perform services for the Reserve Banks or affiliates 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 2019, the Bank did not engage KPMG for any non-audit services.