Board of Governors of the Federal Reserve System

Data Dictionary

Item Number J783

Call confidentiality applies to FFIEC 031/041.

Data Description:

Represents the net amount of Federal Reserve notes that are outstanding from the Federal Reserve Agent to the Bank. The account consists of the cumulative net issues of the present size currency minus the amount that has been returned for destruction and credit. Currency of the present size (approximately 2.61 inches by 6.14 inches) was issued beginning in July 1929; the outstanding large-size Federal Reserve notes, which were issued from 1914-1929 were removed from Reserve Bank liabilities in 1961 pursuant to the Old Series Currency Adjustment Act and absorbed into the Public Debt. Eleven denominations of Federal Reserve notes make up the outstanding amount. Seven denominations--$1, $2, $5, $10, $20, $50, and $100--are being issued to the Banks currently. Issuance of larger denominations of $500, $1,000, $5,000 and $10,000 was discontinued in July 1969 and the notes are returned for destruction whenever they are received by Reserve Banks from circulation.

Federal Reserve notes are a first and paramount lien on all of the assets of the issuing Reserve Bank. Certain of these assets are also set aside as a specific pledge with the Federal Reserve Agent in order to meet a requirement in Section 16 of the Federal Reserve Act that the notes that are in circulation outside Reserve Banks be fully collateralized. The collateral must consist of legally specified assets, alone or in any combination: (1) gold certificates, (2) U.S. Government and agency obligations, (3) special drawing rights certificates, (4) certain other assets, chiefly loans under Section 13 and foreign currencies acquired under Section 14, and (5) any other asset of a Federal Reserve Bank. The notes are also obligations of the United States Government but the liability of the Government would arise only in the event of the liquidation of the Reserve Banks and then only to the extent that collateral and remaining assets of the Banks were less than the full amount of notes in circulation.

Federal Reserve notes are printed by the Bureau of Engraving and Printing as ordered by the Board of Governors. They are held in the vaults of the Bureau until the Board directs that they be shipped to (1) a Federal Reserve Agent, the Board's representative at the Reserve Bank, or (2) upon authorization from the Agent, to the Reserve Bank cash department. Notes held by the Agent are not monetized--i.e., they are not reported on the balance sheet. They are kept in separate vaults and their status is no different in this respect than if they were still in vaults at the Bureau of Engraving and Printing. There is no advantage in keeping stocks of agent cash at Reserve Banks and in practice all notes are shipped from Bureau of Engraving and Printing facilities in Washington, D.C. or Ft. Worth, Texas, to the cash departments. They are issued to the Reserve Bank on the day of shipment, at which time Federal Reserve Notes Outstanding account is credited and Federal Reserve Notes Held by Bank and Branches account is debited. The reverse occurs when notes are canceled and destroyed,