Monthly Report on Credit and Liquidity Programs
and the Balance Sheet
|Abbreviations||Overview||System Open Market Account|
The Overview section of this report highlights developments in the operations of the Federal Reserve’s credit and liquidity programs and facilities since last month’s report, and presents data describing changes in the assets, liabilities, and total capital of the Federal Reserve System as of October 26, 2011.
GAO Releases Report on Federal Reserve Assistance to AIG
- On October 31, 2011, the U.S. General Accountability Office (GAO) released a report that reviewed the Federal Reserve’s financial assistance to American International Group, Inc. (AIG). The report can be found on the Federal Reserve's audit webpage at www.federalreserve.gov/newsevents/reform_audit_gao.htm. Information about the support provided to AIG, including the Maiden Lane II and Maiden Lane III facilities, can be found in the “Lending in Support of Specific Institutions” section and in Appendixes A and B of this report.
FRBNY Terminates Primary Dealer
- Effective October 31, 2011, the Federal Reserve Bank of New York (FRBNY) terminated MF Global Inc.’s status as a primary dealer. Prior to termination, the FRBNY took progressive and proportionate steps to manage its exposure to MF Global and ensure the ongoing effective implementation of monetary policy through open market operations. These measures included ceasing to do new business with MF Global and requiring the firm to post margin with respect to its $950 million in outstanding agency mortgage-backed securities (MBS) forward transactions with the FRBNY. When the firm was unable to meet a subsequent margin call on these transactions, the FRBNY cancelled the transactions and replaced them with other counterparties. The Federal Reserve did not suffer any loss as a result of the firm’s failure. More information on actions related to MF Global is available at www.newyorkfed.org/markets/ambs/purchasesarchive/purchases_1103_2011.html . The current list of primary dealers is available at www.newyorkfed.org/markets/pridealers_current.html .
Federal Reserve Conducts Another Small-Value TDF Auction
- On November 14, 2011, the Federal Reserve conducted an auction of $5 billion of 28-day term deposits through the Term Deposit Facility (TDF). The ongoing small-value TDF offerings are a matter of prudent planning and have no implications for the near-term conduct of monetary policy. Additional information about term deposits, auction results, and future small-value offerings is available through the TDF Resource Center at www.frbservices.org/centralbank/term_deposit_facility.html .
Federal Reserve System Selected Assets, Liabilities, and Total Capital
Table 1 reports selected assets and liabilities and total capital of the Federal Reserve System and presents the change in these components over the past month and since this time last year.
Figure 1 displays the levels of selected Federal Reserve assets and liabilities, securities holdings, and credit extended through liquidity facilities since 2007.
Table 1. Assets, liabilities, and capital of the Federal Reserve System
Billions of dollars
October 26, 2011
September 28, 2011
October 27, 2010
|Securities held outright||2,634||-9||+596|
|U.S. Treasury securities1||1,678||+13||+840|
|Federal agency debt securities1||108||*||-42|
|Memo: Overnight securities lending3||14||+*||+9|
|Memo: Net commitments to purchase mortgage-backed securities4||21||+21||+21|
|Lending to depository institutions5||*||-*||-*|
|Central bank liquidity swaps6||2||+2||+2|
|Lending through the Term Asset-Backed Securities Loan Facility7||11||-*||-17|
|Net portfolio holdings of TALF LLC8||1||+*||+*|
|Support for specific institutions||40||-7||-28|
|Net portfolio holdings of Maiden Lane LLC9||13||-3||-15|
|Net portfolio holdings of Maiden Lane II LLC9||9||-1||-7|
|Net portfolio holdings of Maiden Lane III LLC9||18||-3||-6|
|Federal Reserve notes in circulation||1002||+6||+80|
|Term deposits of depository institutions||0||-5||-5|
|Other deposits of depository institutions||1,588||-21||+577|
|U.S. Treasury, general account||55||+10||+28|
|U.S. Treasury, supplementary financing account||0||0||-200|
* Less than $500 million. Return to table
1. Face value. Return to table
2. Guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Current face value, which is the remaining principal balance of the underlying mortgages. Does not include unsettled transactions. Return to table
3. Securities loans under the overnight facility are off-balance-sheet transactions. These loans are shown here as a memo item to indicate the portion of securities held outright that have been lent through this program. Return to table
4. Current face value. Includes commitments associated with outright purchases, dollar rolls, and coupon swaps. Return to table
5. Total of primary, seasonal, and secondary credit. Return to table
6. Dollar value of the foreign currency held under these agreements valued at the exchange rate to be used when the foreign currency is returned to the foreign central bank. Return to table
7. Book value. Return to table
8. As of October 26, 2011, TALF LLC had purchased no assets from the FRBNY. Return to table
9. Fair value, reflecting values as of September 30, 2011. Fair value reflects an estimate of the price that would be received upon selling an asset if the transaction were to be conducted in an orderly market on the measurement date. Fair values are updated quarterly. Return to table
Figure 1. Credit and liquidity programs and the Federal Reserves balance sheet