Components of Federal Reserve assetsMay 2, 2007, to May 4, 2011 – dollars in trillions

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U.S. Treasury securities

Agency debt+ MBS

Loans tobanks, others

Termauction credit

Other Fed assets

Portfolioholdings

Central bankliquidity swaps

Exh. 1

Components of Federal Reserve liabilitiesMay 2, 2007, to May 4, 2011 – dollars in trillions

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Currency outstanding

Bank deposits at the Fed

Capital

Reverse repos

Treasurydeposits at the Fed

Other Fed liabilities

Exh. 2

Net Treasury Position (NTP)at the FedTreasury securities owned by the Fedminus Treasury deposits at the FedMay 2, 2007, to May 4, 2011 – dollars in trillions

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Exh. 3

Negative position

The Fed balance sheet grew enormously as it intermediated private-sector credit risk

Dollars in billions

Treasury securities 790 606 1,442

Agency debt, MBS 0 510 1,052

Term auction credit 0 373 0

Other loans .154 124 16

Commercial paper 0 143 0

Maiden lane portfolio holdings 0 63 65

Other assets, repo agreements 78 261 148

Total assets 878 2,080 2,723

Currency outstanding 776 869 976

Bank deposits (reserves) 19 845 1,481

Treasury deposits 5 238 130

Other liabilities, reverse repos 45 82 83

Capital 33 46 53

Total liabilities and capital 878 2,080 2,723

6-6-07 6-3-09 5-3-11

1,213 1,133

Exh. 4

Taxpayers historically subsidized Fed activitiesThe Fed’s 2007 subsidy equaled $5.7 billion

Treasury

FederalReserveSystem

$44.46 billion

Interest earnedon Fed’s Treasury

securities –

$40.30 billion

Other interest -- $575 million

Payments tothe Treasury –interest oncurrency –

$34.60 billion

Fee income – $1.51 billion

Trading gains -- $1.89 billion

Other income -- $119 million Dividends to banks – $992 million

Retained by Fed -- $3.13 billion

Operating expense -- $4.38 billion

Interest expense – $1.69 billion

Benefits plans gain – ($.32 billion)

Interest on loans – $71 million

Exh. 5

The Fed made $52.9 billion in 2010 because of credit, market risks it (taxpayers) assumed

Treasury

FederalReserveSystem

$89.82 billion

Interest earnedon Fed’s Treasury

securities –

$26.37 billion

Interest on loans – $3.53 billion

Payments tothe Treasury –interest oncurrency –

$79.27 billion

Fee income – $1.02 billion

Trading gains – $1.34 billion

Other income – $187 million Dividends to banks – $1.58 billion

Retained by Fed – $.89 billion

Operating expense – $5.03 billion

Interest expense – $3.06 billionOther interest – $53.02 billion

Investments – $4.34 billion

Exh. 6

Changes in the Fed’s income statementfrom 2007 to 2010

(Dollars in billions)

Interest income earned on Treasury securities - 13.93

Interest earned on loans + 3.46

Other interest income + 52.45

Trading gains - .55

Investments + 4.34

Fee and other income -.42

Interest expense + 1.37

Operating expenses (including benefit plans) + .97

Retained by the Fed as capital surplus - 2.24

Dividends paid to banks + .59

Payment to the Treasury + 44.67

Inco

me

sid

eE

xpen

se s

ide

Exh. 7

Fed and Treasury balance sheets(As of March 30, 2011, for the Fed and March 31, 2011, for the Treasury – Not to scale)

Federal Reserve System

U.S. Treasury

Assets Liabilities

Assets/deficit Liabilities

Treasuries$1.333 trillion

GSE debt, MBS$1.070 trillion

Credit suppliedto private sector

$84 billionOther: $140 billion

Currencyoutstanding

(non-interest-bearing Treasuries)

$964 billion

Treasury deposits$64 billion

Bank deposits(reserves)

$1.458 trillion

Capital – $53 billion

Repos, other liab.$88 billion

Other – $132 billion

Treasurydebt held

by the publicand the Fed

$9.646 trillion

On deposit at Fed$118 billion

Credit supplied to GSEs and

private sector$712 billion

Other – $115 billion

AccumulatedFederal deficit

$8.833 trillion

=

=

Exh. 8

Consolidated Fed/Treasury balance sheet(As of March 30, 2011 [Fed] and March 31, 2011 [Treasury] – Not to scale)

Assets = Liabilities

GSE debt, MBS$1,212 tiillion

Other credit suppliedto private sector

$247 billion

Student loans – $407 billion

Other assets – $254 billion

AccumulatedFederal deficit

$8.833 trillion

Bank deposits (reserves)$1.458 trillion

Repos, other liabilities$165 billion

Fed capital -- $53 billion

Currency outstanding(non-interest-bear. Treasuries)

$964 billion

Interest-bearingTreasury debt

held by the public

$8.313 trillion

Exh. 9

Consolidated Fed/Treasury balance sheet(As of March 30, 2011 [Fed] and March 31, 2011 [Treasury] – Not to scale)

Assets = Liabilities

GSE debt, MBS$1,212 tiillion

Other credit suppliedto private sector

$247 billion

Student loans – $407 billion

Other assets – $254 billion

AccumulatedFederal deficit

$8.833 trillion

Bank deposits (reserves)$1.458 trillion

Repos, other liabilities$165 billion

Fed capital -- $53 billion

Currency outstanding(non-interest-bear. Treasuries)

$964 billion

Interest-bearingTreasury debt

held by the public

$8.313 trillion

$2,120trillion

$1.676trillion

Exh. 10