Operating income of the Federal Reserve System totaled $25.2 billion in 1996, the central bank reported Monday.

After expenses and other costs, the 12 Federal Reserve banks made $21 billion last year. After paying dividends and adding to its reserves, the Fed turned over roughtly $20 billion to the U.S. Treasury.

The Fed makes money primarily from interest earned on U.S. government securities it acquires through open market operations. The balance - $788 million in 1996 - comes from service fees charged to financial instititions.

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