Federal Reserve made $14 bn profit on loan programmes: Report

Federal Reserve made $14 bn profit on loan programmes: Report
PTI
Comment E-mail Print Share
First Published: Mon, Aug 31 2009. 03 51 PM IST
Updated: Mon, Aug 31 2009. 03 51 PM IST
London: The US Federal Reserve has made a whopping $14 billion profit on loan programmes made in the last two years, says a media report.
Attributing to Fed officials The Financial Times has reported that the Federal Reserve has made a $14 billion profit on loan programmes that provided hundreds of billions of dollars in liquidity to the financial system since the start of the crisis two years ago.
The report said the internal estimate is based on the difference between the fees and interest on the lending facilities and the interest the Fed would have earned had it invested the funds in three-month Treasury bills.
The daily noted that the central bank earned about $19 billion as income by charging interest and fees from financial institutions and investors that tapped the new facilities to obtain much-needed funds during the turmoil.
The interest the Fed would have earned by investing the same amount in Treasury bills was an estimated $5 billion, missing out on a $14-billion gain since August 2007, it added.
According to the report, the calculation by the Fed staff, which has neither been audited, published or risk-adjusted, only deals with its liquidity facilities.
Comment E-mail Print Share
First Published: Mon, Aug 31 2009. 03 51 PM IST