Fed releases financial statements for 2010; Treasury gets a check for $79.3 billion

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The Federal Reserve on Tuesday released its official financial statements for 2010, showing it earned a record net $81.7 billion on the swelling assets it holds on its books, up 53% from the $53.4 billion earned in 2009.

Nearly all of that money was transferred to the U.S. Treasury: The Fed said it paid the Treasury $79.3 billion, up from $47.4 billion in 2009. The figure for 2010 was revised slightly higher from the Fed’s preliminary estimate in early January.

Commercial banks that are members of the Fed earned $1.58 billion in dividends last year on the stock they hold in Fed regional banks, up from $1.43 billion the year before.

The Fed’s operating expenses totaled $5.07 billion in 2010, up 1.8% from 2009. Last year’s figure included $2.72 billion in salaries and benefits for the central bank’s employees, including Washington staff and workers in the 12 regional Fed banks.

The Fed’s earnings have mushroomed since 2008 as the central bank has ramped up purchases of mortgage-backed bonds and Treasury bonds for its own account, in a controversial effort to suppress longer-term interest rates and bolster the economy.

The Fed held $2.43 trillion in assets as of Dec. 31. That total has ballooned from $907 billion in August 2008, just before the financial crisis, as the Fed has created massive amounts of credit from thin air to support the banking system and to buy bonds.

The biggest chunk of the Fed’s income in 2010 came from mortgage bonds. It earned $44.8 billion on those securities, more than double the $20.4 billion earned in 2009.

The Fed in November committed to buying an additional $600 billion in Treasury bonds by the end of June.

-- Tom Petruno

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