The Federal Reserve Bank of Boston is pleased to release its audited financial statements for 2022, along with several highlights from notable projects and initiatives that demonstrate the breadth of Bank activities that positively impacted the regional and national economies.

The Bank welcomed Susan M. Collins as its president and CEO in 2022. During her first months in the role, Collins served as a voting member of the Federal Open Market Committee. Collins also made it a priority to engage with business and community leaders throughout New England. She heard perspectives about the economy, including its strengths and challenges, from people in sectors across the region.

This year’s financial statements show that the Boston Fed remitted $1.1 billion to the U.S. Treasury – a part of the $76 billion the Federal Reserve System remitted in total to the U.S. Treasury during 2022. 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 and economic research

The Boston Fed participates in U.S. monetary policymaking through the Bank president’s role on the Federal Open Market Committee and by conducting data-intensive research and analysis on a wide range of economic, financial, and behavioral topics. Ultimately, our focus is the dual mandate the Federal Reserve has been given by Congress—formulating monetary policy that seeks growth consistent with stable prices and maximum sustainable employment. Highlights from the year include:

• Timely and relevant policy work in support of the Bank president’s participation in Federal Open Market Committee deliberations
• Convening topical forums to foster discussion and critical engagement among researchers, central bankers, policymakers, and other experts
• A multi-year project on the effectiveness of medication-assisted treatment (MAT) in addressing the region’s opioid crisis. Our published research findings show MAT facilitates the return to employment of those suffering from opioid use disorder.

Payments innovation

The Boston Fed conducts research and collaborates with payments industry stakeholders to support the continued evolution of the U.S. payments system and its underlying technologies and standards. Highlights from the year include:

• The Boston Fed and Massachusetts Institute of Technology’s Project Hamilton completed its research efforts into the technical feasibility of a potential central bank digital currency.
• FedNow^SM Service made tremendous progress on industry visibility and interactions in anticipation of its July 2023 launch.
• The Synthetic Identity Fraud Mitigation Toolkit was released to improve payments security across the banking system.

Regional and community outreach

The Boston Fed works on issues affecting low- and moderate-income individuals and families, including in New England’s smaller cities, rural towns, and regions, with a focus on broad, holistic stakeholder engagement. We also research macroeconomic trends impacting economies in the New England states—providing a ground-level view to help policymakers make informed decisions. Highlights from the year include:

• Expansion of the Working Communities Challenge community development initiative in Maine and Vermont
• Implementation of the programs that were awarded grants through the Leaders for an Equitable Economy initiative, which supports and strengthens leaders who are working to improve economic systems in Massachusetts’ smaller cities
• A joint announcement with community partners launching a multiyear research effort to explore wealth disparities in Greater Boston and Massachusetts

Supervision, regulation, and credit

The Boston Fed supervises banks that are state-chartered members of the Federal Reserve System in the First District, bank holding companies, insurance-focused savings and loan holding companies, and certain large insurance companies. In doing so, we help to maintain the safety and soundness of the financial system. Highlights from the year include:

• Leading Federal Reserve System efforts to identify, monitor, and assess the range of risks arising from bank FinTech activities
• Co-leading Federal Reserve System efforts to develop a framework for mitigating credit risk during the initial years of the FedNow^SM Service when automated risk controls are not yet available
• Contributing to the successful redesign of the Federal Reserve System’s stress testing program

Federal Reserve Bank of Boston Financial Statements
Federal Reserve Banks Combined Financial Statements

The Federal Reserve Board engaged KPMG to audit the 2022 combined and individual financial statements of the Reserve Banks and the financial statements of the three limited liability companies (LLCs) that are associated with the Board of Governors’ actions to address the coronavirus pandemic, of which two LLCs are consolidated in the statements of the Federal Reserve Bank of New York, and one LLC is consolidated in the statements of the Federal Reserve Bank of Boston.¹

In 2022, KPMG also conducted audits of internal controls over financial reporting for each of the Reserve Banks. Fees for KPMG services totaled $9.2 million, of which approximately $1.5 million were for the audits of the LLCs.² 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 affiliated entities 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 2022, the Bank did not engage KPMG for any non-audit services.