The ESF does not provide financing to the Federal Reserve System for foreign exchange operations. Rather, the Federal Reserve participates with its own funds. The Treasury reimburses the New York Fed for expenses incurred in carrying out Treasury actions. In warehousing a transaction, the ESF sells foreign currencies to the Federal Reserve for dollars and simultaneously arranges to repurchase them, typically within a year. The dollars are immediately credited to the Treasury's account at the New York Fed, and the Federal Reserve invests the warehoused foreign currency, separate from its regular accounts, to earn a market rate of return.
Any effect warehousing has on domestic bank reserves is offset by open market operations .
ESF accounts and activities are subject to Congressional oversight. The Treasury provides monthly reports on U.S. intervention activities and a monthly financial statement of the ESF to Congress on a confidential basis. In addition, the quarterly report to Congress by the New York Fed's manager of foreign operations, covering Treasury and Federal Reserve foreign exchange operations, is issued publicly by the New York Fed. The ESF was structured to be self-financing. Its resources, which are held in both dollars and foreign currency, include its original Congressional appropriation and retained earnings.