Fed makes big profit from bailout

By Aaron Smith, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- The Federal Reserve banks that form the backbone of the nation's financial system transferred an extra-large payload to the U.S. Treasury last year, as they reaped interest from Wall Street bailouts.

The 12 Federal Reserve banks reported that their 2009 income totaled $53.4 billion, a jump of $17.9 billion, or one-third, from the year before.

The board of governors of the Federal Reserve system attributed this increase to a surge in the holding of mortgage-backed securities to prop up the devastated housing market.

The banks said they transferred most of this money, $47.4 billion, to the U.S. Treasury in 2009, an increase of 50%, or $15.7 billion, from the amount they transferred in 2008.

The assets of the Federal Reserve banks totaled $2.235 trillion at the end of 2009, a decline of $11 billion from the prior year. The banks reported that the biggest change in their portfolio was an increase of $919 billion in mortgage-back securities.

Federal Reserve chairman Ben Bernanke said the financial disclosure "reaffirms our commitment to transparency and to the responsible stewardship of public resources." To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 18,203.37 -85.26 -0.47%
Nasdaq 4,979.90 -28.19 -0.56%
S&P 500 2,107.78 -9.61 -0.45%
Treasuries 2.12 0.04 1.82%
Data as of 8:13am ET
Company Price Change % Change
Apple Inc 129.36 0.27 0.21%
Ford Motor Co 16.17 0.00 0.00%
Cisco Systems Inc 29.54 -0.65 -2.15%
Microsoft Corp 43.28 -0.60 -1.37%
General Electric Co 25.86 -0.25 -0.96%
Data as of Mar 3
Sponsors

Sections

The historically black school will cover 50% of the cost of a a student's final semester if they graduate early or on time, starting next year. More

Find yourself suddenly holding one big lump sum of cash? Here's what you need to know to make sure your money is invested the way it should be. More