Whoops! Remember the securities the Federal Reserve acquired in the bailouts of Bear Stearns Cos. and American International Group Inc. (NYSE:AIG)? Well, in the first quarter, the Fed lost $5.25 billion on them.
Those losses were mostly due to mortgage-backed securities, and the hope is that those losses will be recovered when the housing market returns, according to the
Federal Reserve System Monthly Report on Credit and Liquidity Programs and the Balance Sheet.
The new report put together by the Fed will keep lawmakers and taxpayers
up to date on how its $1 trillion lending programs designed to stabilize the
economy are working.
So far the Fed has earned more than it's lost. As
The Wall Street Journal points out:
"the Fed had net earnings of $1.2
billion last quarter on loan programs including overnight loans to
banks and investment banks, the Term Auction Facility and Money Market
Mutual Fund Liquidity Facility. It earned another $2.1 billion on the
Commercial Paper Funding Facility and $4.6 billion on its portfolio of
assets."The new report is very informative, however. As
The Washington Post points out, it doesn't identify the banks benefiting from government programs such as the discount window and commercial paper programs. "Fed Chairman Ben S. Bernanke has made publicly, argued that doing so
would make institutions that are fearful of a stigma reluctant to
participate in the programs, thus undermining the Fed's ability to
support the financial system."
Oh ... right. Like TARP?
On Bear Stearns and AIG, though, there have been nothing but losses, it seems. "The cumulative loss on the Bear and AIG holdings come to $16.46 billion since they were taken over last year," according to
Yahoo! Finance. -
Maria Woehr
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