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Monthly Report on Credit and Liquidity Programs
and the Balance Sheet
| Purpose | Overview | System Open Market Account (SOMA) |
Overview
Recent Developments
- On December 1, 2010, as provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), the Federal Reserve posted detailed information on its public website about entities that received loans or other financial assistance under a Section 13(3) credit facility or that participated in the agency mortgage-backed securities (MBS) purchase program, used Federal Reserve liquidity swap lines, or borrowed through the Term Auction Facility (TAF), between December 1, 2007, and July 21, 2010. This information includes more than 21,000 individual credit and other transactions that were conducted to stabilize markets during the financial crisis, restore the flow of credit to American families and businesses, and support economic recovery and job creation in the aftermath of the crisis. The Federal Reserve followed sound risk-management practices in administering each of these programs, incurred no credit losses on programs that have been wound down, and expects to incur no credit losses on the few remaining open programs. This information is available at www.federalreserve.gov/newsevents/reform_transaction.htm.
- As required by the Dodd-Frank Act, on December 3, 2010, the Federal Reserve posted an audit webpage at www.federalreserve.gov/newsevents/reform_audit.htm. This page will be updated as reports and other information become available.
- On December 8, 2010, American International Group, Inc. (AIG) announced that it has entered into a definitive agreement with ALICO Holdings LLC, AIA Aurora LLC, the Federal Reserve Bank of New York (FRBNY), the U.S. Department of the Treasury, and the AIG Credit Facility Trust (the "Trust") regarding a series of integrated transactions, previously announced on September 30, 2010, to recapitalize AIG (the "Recapitalization"), including the repayment of all amounts outstanding under the revolving credit facility with the FRBNY. The definitive agreement supersedes the agreement in principle, dated as of September 30, 2010, and includes forms of several other agreements governing the Recapitalization.
- On November 29, 2010, the Federal Reserve conducted an auction of $5 billion of 28-day term deposits through its Term Deposit Facility (TDF). The awarded deposits settled on December 2, 2010, and will mature on December 30, 2010. 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. The ongoing small-value TDF offerings are a matter of prudent planning and have no implications for the near-term conduct of monetary policy.
- Table 1 of this report now includes the funds held by the FRBNY as agent from the disposition of AIG's assets in connection with the Recapitalization. This information is also included in table 1 of the H.4.1 statistical release and within "Other liabilities and accrued dividends" in tables 9 and 10 of the H.4.1 statistical release. As of November 24, 2010, the funds held by the FRBNY as agent totaled $26.8 billion.
- Background information about the closed and expired facilities previously included in Appendix B of this report now is available on the Federal Reserve's public website at www.federalreserve.gov/monetarypolicy/bst.htm.
Table 1. Assets, Liabilities, and Capital of the Federal Reserve System
Billions of dollars
| Item |
Current November 24, 2010 |
Change from October 27, 2010 |
Change from November 25, 2009 |
|---|---|---|---|
| Total assets | 2,349 | +50 | +139 |
| Selected assets | |||
| Securities held outright | 2,087 | +48 | +303 |
| U.S. Treasury securities1 | 901 | +63 | +124 |
| Federal agency debt securities1 | 148 | -2 | -7 |
| Mortgage-backed securities2 | 1,038 | -13 | +186 |
| Memo: Overnight securities lending3 | 7 | +2 | +* |
|
Memo: Net commitments to purchase mortgage- backed securities4 |
0 | 0 | -146 |
| Lending to depository institutions5 | 1 | +1 | -19 |
| Central bank liquidity swaps6 | * | 0 | -26 |
| Lending through other credit facilities | 26 | -2 | -34 |
|
Net portfolio holdings of Commercial Paper Funding Facility LLC |
0 | 0 | -15 |
| Term Asset-Backed Securities Loan Facility7 | 26 | -2 | -19 |
| Net portfolio holdings of TALF LLC8 | 1 | +* | +1 |
| Support for specific institutions | 113 | -1 | +3 |
|
Credit extended to American International Group, Inc., net9 |
20 | +1 | -25 |
| Net portfolio holdings of Maiden Lane LLC10 | 28 | -* | +2 |
| Net portfolio holdings of Maiden Lane II LLC10 | 16 | -* | +* |
| Net portfolio holdings of Maiden Lane III LLC10 | 23 | -1 | +* |
|
Preferred interests in AIA Aurora LLC and ALICO Holdings LLC7 |
26 | 0 | +26 |
| Total liabilities | 2,292 | +51 | +135 |
| Selected liabilities | |||
| Federal Reserve notes in circulation | 937 | +15 | +54 |
| Term deposits of depository institutions | 0 | -5 | 0 |
| Other deposits of depository institutions | 1,028 | +17 | -141 |
| U.S. Treasury, general account | 24 | -3 | +11 |
| U.S. Treasury, supplementary financing account | 200 | -* | +185 |
| Other deposits | * | -1 | -2 |
|
Funds from American International Group, Inc. asset dispositions, held as agent11 |
27 | +27 | +27 |
| Total capital | 57 | -* | +4 |
Note: Unaudited. Components may not sum to totals because of rounding.
* 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 November 24, 2010, TALF LLC had purchased no assets from the FRBNY. Return to table
9. Excludes credit extended to Maiden Lane II and III LLCs. Return to table
10. Fair value, reflecting values as of September 30, 2010. 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
11. Pending the closing of the recapitalization plan announced by American International Group, Inc. (AIG) on September 30, 2010, the cash proceeds from the disposition of certain AIG assets will be held by the FRBNY as agent. At the closing of the recapitalization plan, the proceeds will be used first to repay in full the credit extended to AIG by the FRBNY under the revolving credit facility and then to retire a portion of the FRBNY's preferred interests in AIA Aurora LLC and ALICO Holdings LLC (preferred interests). Alternatively, if the recapitalization plan is terminated under the terms of the plan, then the proceeds from the initial public offering of AIA and the sale of ALICO will be used to redeem the preferred interests in accordance with the AIA Aurora LLC and ALICO Holdings LLC limited liability company agreements, and any excess proceeds from these transactions, as well as proceeds from the disposition of other assets, will be used to repay the credit extended to AIG under the revolving credit facility.
Figure 1. Credit and Liquidity Programs and the Federal Reserve's Balance Sheet
