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Fed Loan to AIG

Date: 
October 8, 2008
Policy Area: 
Economic Target: 
Action Type: 
Maximum Amount: 
$37.80 billion

The Federal Reserve took $37.8 billion in investment-grade, fixed-income securities from AIG, in return for cash.

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.

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