Taxpayers got a record $47.4 billion last year from the Federal Reserve, new documents released Wednesday showed.
The payment to the Treasury Department is slightly higher than the $46.1 billion first estimated in January. The new figure is based on more complete information contained in audited financial statements for the Fed's 12 regional banks and related units.
The amount handed over to Treasury last year is $15.7 billion more— or a 50 percent increase — from 2008, the Fed says.
The bigger windfall to taxpayers reflects gains from the Fed's efforts to fight the financial crisis and revive the economy. Critics have worried that the Fed's actions could put taxpayers at risk by reducing the amount turned over to Treasury coffers.
The Fed is funded from the interest earned on its vast portfolio of securities. It is not funded by Congress. After covering its expenses, the Fed gives what is left over to the Treasury Department.
The previous record payment turned over to Treasury — $34.6 billion — occurred in 2007.
Interest earned from the Fed's portfolio of mortgage securities came to $20.4 billion last year, one of the factors behind the record payment last year. The Fed had bought mortgage securities from Fannie Mae and Freddie Mac to lower mortgage rates and bolster the housing market. The program — a centerpiece of the Fed's efforts to turn around the economy — ended last month.
Going forward, however, the Fed faces a risk on its big holdings of mortgage securities. It could lose money if it had to sell those securities after their prices had fallen. At some point when the economic recovery is firmly entrenched, the Fed might need to start selling some of the securities to sop up money it pumped into the economy during the crisis.
Two programs the Fed set up during the crisis to ease credit clogs, along with assets it took over with the bailouts of Bear Stearns and American International Group in 2008, generated net earnings of $5.6 billion last year. That marked a turnaround from the net loss of $1.7 billion in 2008.
Of those two crisis-era programs, one involved strengthening the commercial paper market, a crucial short-term financing mechanism companies rely on to pay for everything from salaries to supplies. The other was designed to spur more lending to consumers and small businesses. Virtually all of the Fed's crisis-era programs have wound down. The one program still in place, which aims to aid the troubled commercial real-estate market, will shut down at the end of June.
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