Voice of America News
12 January 2010
The U.S. central bank made a record profit in 2009 due to earnings it accrued through emergency measures aimed at saving the economy from crisis.
In a preliminary report released Tuesday, the U.S. Federal Reserve said it will turn over $46.1 billion to the federal government. That money comes from income the central bank received mostly from its investments in U.S. Treasury bonds and mortgage-related securities.
The Federal Reserve also made money from loans to banks and other firms.
The bank’s profits follow an unprecedented amount of spending in emergency investments. At the end of 2009, the bank was holding more than $1.5 trillion in U.S. government debt and mortgage-related assets.
After paying operating costs, the Federal Reserve turns over all profits to the U.S. Treasury. It returned $34.6 billion in 2007.
In addition to the central bank’s efforts, the Treasury Department set up a $700 billion program, known as TARP to assist troubled financial firms.
A White House official says the Obama administration is now considering charging banks a fee in order to recoup an estimated $120 billion dollars it expects to lose from the program.
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