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

Search for Jobs

Index Last Change % Change
Dow 17,929.99 235.31 1.33%
Nasdaq 4,842.67 63.43 1.33%
S&P 500 2,098.86 28.09 1.36%
Treasuries 1.49 0.01 0.74%
Data as of 4:16am ET
Company Price Change % Change
Bank of America Corp... 13.27 0.08 0.61%
General Electric Co 31.48 0.93 3.04%
Micron Technology In... 13.76 0.57 4.32%
Ford Motor Co 12.57 0.02 0.16%
Apple Inc 95.60 1.20 1.27%
Data as of Jun 30
Sponsors

Sections

Investors are already sifting through the Brexit market rubble for opportunities. Morgan Stanley compiled a list of highly-rated stocks that have limited or no direct exposure to the situation in the U.K. More

The New Jersey Senate and Assembly disagree over which tax cuts should accompany a 23-cent-per-gallon hike in the state's gas tax. As a result the hike won't go into effect Friday. More