- Image by Getty Images via Daylife
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/11/AR2010011103892.html
“The Federal Reserve made record profits in 2009, as its unconventional efforts to prop up the economy created a windfall for the government.
The Fed will return about $45 billion to the U.S. Treasury for 2009…That reflects the highest earnings in the 96-year history of the central bank. The Fed, unlike most government agencies, funds itself from its own operations and returns its profits to the Treasury.”
It would be one thing if the banks had approached the Fed, hat in hand, for a bailout. But the majority didn’t. The Fed forced most of the TARP recipients to take the money so the ones that actually needed it wouldn’t be stigmatized. I appreciate that approach and how it avoids a run on already troubled banks.
But to force a bunch of banks to take loans, charge them interest and then hand the interest over to the Treasury instead of giving it back to the banks, who never asked for the loan in the first place, seems like, well, chutzpah.
