Monday, March 8, 2021

Tag: Fed Pays $35 Billion to Banks

Fed Pays $35 Billion to Banks, $6 Billion to Reverse-Repo Counterparties in Interest for 2019, Remits $55 billion to US Treasury

by Wolf Richter, Wolf Street:

Then there are the dividends it pays its member banks.

In addition to a lot of smaller activities, the Federal Reserve does two financially huge things: in 2019, it held about $4 trillion in interest-bearing assets, mostly Treasury securities and mortgage-backed securities (MBS); and it owed banks about $1.5 trillion in interest-bearing reserves. Among its other activities, are its reverse-repo activities, and the costs of its own operations. On Friday, the Fed reported its preliminary results for 2019, including how much it paid the banks ($35 billion), how much it paid the counterparties of its reverse repos ($6 billion), how much it remitted back to the US Treasury Department ($54.9 billion), and how much it paid in dividends.