Fed made $275 million from emergency facilities in 2020

FILE PHOTO: FILE PHOTO: The Federal Reserve in Washington
FILE PHOTO: The Federal Reserve building is set against a blue sky in Washington, U.S., May 1, 2020. REUTERS/Kevin Lamarque

March 22, 2021

(Reuters) – The Federal Reserve generated a profit of about $275 million from the clutch of emergency credit facilities set up last year to support businesses, local governments and various bond markets during the height of the coronavirus crisis, the U.S. central bank said on Monday.

The Fed’s Main Street Lending Program was the only one of the facilities to generate a loss, totaling $2.4 billion, due to loan loss provisions, the Fed said.

The data was included in the release of the Fed’s audited annual financial accounts, which also showed its overall net income last year rose by 60% to $88.6 billion from $55.5 billion a year earlier, figures that were originally reported in January. The Fed sends most of its annual profit to the U.S. Treasury, and in 2020 that totaled $86.9 billion, up from $54.9 billion in 2019.

The Main Street facility loss was a result of estimated loan losses from the program, not realized losses. The loss estimate also may change over time given the loans from the program have a five-year term.

(Reporting by Dan Burns; Editing by Paul Simao)