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Federal Reserve Liquidity Facilities Gross $22 Billion for U.S. Taxpayers

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  • Michael Abrahams

Abstract

During the 2007-09 crisis, the Federal Reserve took many measures to mitigate disruptions in financial markets, including the introduction or expansion of liquidity facilities. Many studies have found that the Fed’s lending via the facilities helped stabilize financial markets. In addition, because the Fed’s loans were well collateralized and generally priced at a premium to the cost of funds, they had another, less widely noted benefit: they made money for U.S. taxpayers. In this post, I bring information together from various sources and time periods to show that the facilities generated $21.7 billion in interest and fee income.

Suggested Citation

  • Michael Abrahams, 2012. "Federal Reserve Liquidity Facilities Gross $22 Billion for U.S. Taxpayers," Liberty Street Economics 20121107, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:86836
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    More about this item

    Keywords

    Federal Reserve; Liquidity Facilities; crisis; lenders of last resort;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G1 - Financial Economics - - General Financial Markets

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