The U.S. Federal Reserve drew back the curtain on its emergency repairs to the financial system on Wednesday, showing $5.3 billion in losses on assets taken over from firms it bailed out in 2008.
In a report on its $2.1 trillion balance sheet, the Fed also said it earned $1.2 billion from loan programs and $4.6 billion in interest on its holdings of Treasury and other securities in the first three months of the year.
The Fed is making more information available about its finances, and its rescues of investment bank Bear Stearns and insurer American International Group (AIG.N) in order to show the public it is using its resources wisely, a senior Fed official said, speaking to reporters on condition of anonymity.
It will issue a monthly report on its balance sheet two weeks after the last Wednesday of every month, another Fed official said during a briefing.
By offering a more detailed glimpse of its holdings, the Fed also hopes to address congressional concerns that it lacks accountability, the senior Fed official said.
The Fed has pumped more than a $1 trillion into the U.S. financial system since the global credit crisis began in August 2007. Members of Congress have questioned some of the Fed’s emergency actions and demanded more information about who has benefitted from loans and support.
However, the senior official said the Fed will still resist making public the names of firms that need to borrow from its emergency loan facilities. Making those names public would stigmatised borrowers and discourage them from taking advantage of last-resort borrowing opportunities, which would defeat the purpose, the official said.
While the special vehicles set up to hold assets from Bear Stearns and AIG have lost value, advisors to the Fed say they are likely to realise gains if held to maturity, the official said.
But you don’t have to stop at Reuters’ description. Read the whole thing right here!