Starting Wednesday, the Federal Reserve will begin releasing a monthly report on its finances, including details of the multiple emergency credit and liquidity programs it launched in the last year to help stabilize the financial system.
The new monthly document will supplement existing weekly Fed financial reports, as well as its comprehensive annual report.
Fed officials said the new report was created as part of Chairman Ben Bernanke’s ongoing commitment to improve disclosure and transparency at the central bank, especially with the creation of its complex financial stabilization programs. The officials said the report also meets new mandates from Congress for additional disclosure.
A Fed official said the report is intended to assure people that the Fed is a “careful steward” of its resources and that all borrowings by financial firms in its new programs are “more than adequately covered” by collateral.
Among other items in the report for June, the Fed disclosed that in the first quarter of 2009, it had:
--earned a profit of $4.5 billion on its $1.1 trillion in expanded holdings of U.S. government and other securities
--earned a profit of $1.2 billion on its multiple loan and liquidity programs
--earned a profit of $2.1 billion on its special facility for commercial paper liquidity
--lost $5.3 billion in the value of lower grade investments held in special entities created in the failure of Bear Stearns and near-failure of American International Group (AIG) last year. A Fed official said the losses were generated by write-downs in the values of investments, which are mainly deteriorating commercial and residential mortgages. But he said the investments were taken over by the Fed after they had been written down significantly by Bear Stearns and AIG, and that the Fed expects to hold the investments to maturity or, if for sale, until values recover, to maximize their value.
Fed officials said the increased disclosure in the report is unrelated to recent Freedom of Information Act requests from FOX Business and others seeking details of its new programs.
Federal Reserve Monthly Report for June
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