Financial Sector Policy
Public-Private Investment Fund: FDIC Guarantees
Date:
February 10, 2009
Who:
FDIC
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Government Guarantee
Maximum Amount:
$600.00 billion
Amount Spent:
$0.73 billion See the companion TARP entry for the Public-Private Investment Program (PPIP) and the Fed entry for PPIP.
Program first announced by Treasury Secretary Geithner on 2/10/2009.
Notes:
Maximum risk is value of all debt that could possibly be guaranteed by FDIC under the current restrictions of a 6:1 debt-equity ratio. Amount spent as of 9/16/2009 (http://www.fdic.gov/news/news/press/2009/pr09172.html). Deficit impact unknown.
Fed Line of Credit to AIG
Date:
September 16, 2008
Policy Area:
Financial Sector Policy
Economic Target:
AIG
Action Type:
Loans
Maximum Amount:
$60.00 billion
Amount Spent:
$20.06 billion The Fed originally created a credit-lending facility from which AIG was allowed to draw up to $85 billion.
Notes:
Amount spent is current as of 9/1/2010 (http://www.federalreserve.gov/releases/h41/Current/). Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.
Purchase of Fannie/Freddie Discount Notes
Date:
September 19, 2008
Policy Area:
Financial Sector Policy
Economic Target:
Government and GSEs
Action Type:
Equity Purchase
Amount Spent:
$57.50 billion Purchase of short-term debt obligations of Fannie Mae, Freddie Mac and Federal Home Loan. Banks from primary dealers.
Notes:
Maximum amount limited only by total GSE debt obligations. Amount spent is purchases reported on the Fed balance sheet as of 3/30/2010. Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.
Fed Guarantee of Bank of America Assets
Date:
January 16, 2009
Who:
Fed
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Government Guarantee
Maximum Amount:
$87.00 billion Part of multi-agency government guarantee of approximately $118 billion in Bank of America assets, most of which it acquired through the purchase of investment bank Merrill Lynch. Under the terms of the agreement, Bank of America is responsible for the first $10 billion in losses on the assets. Remaining losses are divided 90/10 between the government and Bank of America. For the next $10 billion in losses, the Treasury and FDIC split the government’s 90% share. 90% of the remaining losses are covered by the Fed through a non-recourse loan.
Notes:
Maximum amount figure represents total potential liabilities.
Money Market Mutual Fund Liquidity Facility
Date:
September 19, 2008
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Loans
Maximum Amount:
$145.89 billion Establishment of Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility to allow Federal Reserve to increases market liquidity by purchasing three month unsecured and asset-backed commercial paper directly from selected corporate issuers.
Notes:
Amount spent indicates outstanding loans as of 10/21/2009 (http://www.federalreserve.gov/releases/h41/Current/). Facility maximum lending amount is unlimited, but never exceeded $416 billion. Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.
Commercial Paper Funding Facility
Date:
October 7, 2008
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Loans
Maximum Amount:
$1,800.00 billion Federal Reserve increases market liquidity by purchasing three month unsecured and asset-backed commercial paper directly from selected corporate issuers.
Notes:
Maximum amount indicates size of the market. Amount spent indicates outstanding loans as of 7/28/2010 (http://www.federalreserve.gov/releases/h41/Current/). Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.
Fed Loan to AIG
Date:
October 8, 2008
Policy Area:
Financial Sector Policy
Economic Target:
AIG
Action Type:
Loans
Maximum Amount:
$37.80 billion The Federal Reserve took $37.8 billion in investment-grade, fixed-income securities from AIG, in return for cash.
Source:
Notes:
On November 10th, upon the Federal Reserve's creation of two new limited liability companies formed to assist AIG with its bad assets, the Fed announced that these security-collateralized loans would be repaid by AIG and terminated.
Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.
Money Market Investor Funding Facility
Date:
October 21, 2008
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Loans
Maximum Amount:
$540.00 billion The Fed will fund private-sector investors to invest in mutual funds, promoting market liquidity. This entity was created by the Fed in response to the current financial crisis.
Source:
Notes:
Potential maximum indicates lending allowance. Maximum amount spent indicates outstanding loans as of 10/21/2009 (http://www.federalreserve.gov/releases/h41/Current/). Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.
Fed Purchase of AIG Mortgage-Backed Securities
Date:
November 10, 2008
Policy Area:
Financial Sector Policy
Economic Target:
AIG
Action Type:
Equity Purchase
Maximum Amount:
$23.00 billion
Amount Spent:
$16.03 billion Federal Reserve provides up to $23 billion in loans to a limited liability company, 'Maiden Lane II,' formed to purchase residential mortgage-backed securities in AIG's portfolio.
Source:
Notes:
Amount spent indicates loans outstanding as of 9/1/2010 (http://www.federalreserve.gov/releases/h41/Current/). Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.
Fed Guarantee of Citigroup Assets
Date:
November 23, 2008
Who:
Fed
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Government Guarantee
Maximum Amount:
$230.00 billion Part of a government guarantee of $301 billion in Citigroup assets by multiple entities (Treasury, FDIC, Federal Reserve). After Citigroup absorbs the first $29 billion in losses, the remaining losses are split 90:10 between the government and Citigroup, with the first $5 billion absorbed by the Treasury with TARP funds, the next $10 billion paid by the FDIC, and the remaining losses covered by the Federal Reserve with a non-recourse loan.
Notes:
Maximum amount figure represents total potential liabilities.
On 1/16/2008, the Treasury revised its figure for total Citigroup guaranteed assets from $306 billion down to $301 billion.
