Federal Reserve banks’ assets rose $491 billion in 2011 to $2.919 trillion, and their net income for the year was $77.4 billion, $75.4 billion of which went to the Treasury, the Fed announced Tuesday in the release of the 2011 combined audited annual comparative financial statements for the Fed banks.

The income, the Fed said in a release, “was derived primarily from $83.6 billion in interest income on securities acquired through open market operations (Treasury securities, federal agency and government-sponsored enterprise ... mortgage-backed securities ... and GSE debt securities).”

The banks’ holdings of Treasury securities rose $683 billion, GSE debt securities holdings fell $45 billion, and federal agency and GSE MBS holdings slid $156 billion.

The balances held under central bank liquidity swap arrangements rose $99.7 billion.

Assets related to credit and liquidity programs dropped $95.8 billion.

“The closing of the American International Group Inc. (AIG) recapitalization plan in January 2011 resulted in asset reductions of $47 billion, inclusive of the full repayment of the revolving line of credit with AIG in the amount of $20.6 billion and the redemption or sale of the Federal Reserve Bank of New York’s ... preferred interests in two AIG-related LLCs in the amount of $26.4 billion,” the release noted.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.