Reporting from Washington — The Federal Reserve today announced it made a record $46.1-billion profit last year, countering concerns that the central bank has put too much taxpayer money at risk in attempts to stabilize the financial industry.
The Fed said it had paid the profit to the U.S. Treasury, marking an increase of $14.4 billion more than what it paid following 2008. The increase was largely due to higher earnings on securities in 2009 that the Fed had purchased as part of its unprecedented intervention in the financial system.
"The significant increase in earnings on securities was primarily due to increased securities holdings as a result of the Federal Reserve's response to the severe economic downturn," the central bank said.
The previous record was $34.6 billion in 2007. But Federal Reserve officials stressed that the goal of the central bank is stabilizing monetary policy, not earning profits. The Fed is funded by its earnings, and profits are turned over to the federal government.