Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Index Last Change % Change
Dow 17,706.05 213.12 1.22%
Nasdaq 4,861.06 95.27 2.00%
S&P 500 2,076.06 28.02 1.37%
Treasuries 1.86 0.02 1.14%
Data as of 5:35am ET
Company Price Change % Change
Bank of America Corp... 14.68 0.21 1.45%
Freeport-McMoRan Inc... 11.11 -0.27 -2.37%
Chesapeake Energy Co... 4.05 0.38 10.35%
Apple Inc 97.90 1.47 1.52%
Microsoft Corp 51.59 1.56 3.12%
Data as of May 24
Sponsors

Sections

UCLA and Under Armour reportedly signed a record $280 million deal to outfit teams, which will last for 15 years. More

Coca-Cola announced it had suspended production of Coke in Venezuela and other sugar-sweetened beverages due to a lack of raw sugar. More

A federal sting caught a Romanian man trying to sell weapons to cocaine-smuggling FARC terrorists in Colombia. But during his New York trial he claimed he was actually trying to help the CIA expose an international arms deal. More