Financial Sector Policy
Lehman Brothers Bankruptcy Loans
Date:
September 15, 2008
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Loans
Maximum Amount:
$138.00 billion Total of two loans from Federal Reserve to J.P. Morgan to promote orderly dismantling of Lehman Brothers assets and trades.
Notes:
Loan was issued by Fed to J.P. Morgan and paid back in its entirety. Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.
Guarantees of Corporate Credit Union Shares
Date:
January 28, 2009
Who:
NCUA
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Government Guarantee
Maximum Amount:
$80.00 billion Guarantee insures all assets in corporate credit union accounts that are above current $250,000 limit. Guarantee effective until Feb. 28, 2009; credit unions given option to renew guarantee until Dec. 31, 2010.
On 3/2/2009 a release from NCUA announced all of the voluntary participants in the program, including over 20 corporate credit unions.
Notes:
Maximum amount indicates approximate total amount of deposits over insurance limit, as reported in the Wall Street Journal on 1/28/2009 (http://online.wsj.com/article/SB123318420520726249.html). Deficit impact unknown.
Forward Term Auction Loan Facility
Date:
September 29, 2008
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Loans
Maximum Amount:
$44.00 billion Total of two auctions for 17-day and 13-day Term Auction Facility (TAF) loans conducted in December, designed to provide market reassurance about availability of TAF funding at year end. Loans came due in late December 2008 and early January 2009 (all already repaid).
Notes:
Maximum amount indicates amount lent across both options. Amount spent indicates net cost of loans.
Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.
FDIC Guarantee of Bank of America Assets
Date:
January 16, 2009
Who:
FDIC
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Government Guarantee
Maximum Amount:
$3.00 billion Part of multi-agency government guarantee of approximately $118 billion in Bank of America assets, most of which it acquired through the purchase of investment bank Merrill Lynch. Under the terms of the agreement, Bank of America is responsible for the first $10 billion in losses on the assets. Remaining losses are divided 90/10 between the government and Bank of America. For the next $10 billion in losses, the Treasury and FDIC split the government’s 90% share, with the Treasury absorbing up to $7.5 billion and the FDIC up to $
Notes:
Maximum amount figure represents FDIC's share of total assets under guarantee.
Deficit impact unknown.
Public-Private Investment Fund
Date:
February 10, 2009
Who:
Treasury
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Loans
Maximum Amount:
$0.00 billion See the companion FDIC entry for the Public-Private Investment Fund
Program first announced by Treasury Secretary Geithner on 2/10/2009.
Purchase of Bank Equity Shares
Date:
October 14, 2008
Who:
Treasury
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Equity Purchase
Maximum Amount:
$0.00 billion
Amount Spent:
$0.00 billion
Deficit Impact:
$0.00 billion Purchase of equity shares of banks by the Department of Treasury, in order to promote lending and market liquidity under the “Capital Purchase Program” of the Troubled Assets Relief Program.
