An interesting effect of the Fed making so many loans to troubled institutions, so long as those loans are paid back, is that the Fed's own income is enhanced. That could become problematic pretty quickly if the loans aren't paid back, because as so many traditional lenders have discovered, it's REALLY tough to make up for loans losses with interest income.
Federal Reserve earned $45 billion in 2009 - washingtonpost.com
Additional earnings are created when the Fed buys Treasury securities, which have nearly quadrupled on its books since last year, in order to keep interest rates low.
Showing posts with label Washington Post. Show all posts
Showing posts with label Washington Post. Show all posts
Tuesday, January 12, 2010
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