Tuesday, January 12, 2010

Fed Turns Profit on Bailout

Much as the bankster bailouts pissed me off, this is a small bit of good news:
Wall Street firms aren't the only banks that had a banner year. The Federal Reserve made record profits in 2009, as its unconventional efforts to prop up the economy created a windfall for the government.

The Fed will return about $45 billion to the U.S. Treasury for 2009, according to calculations by The Washington Post based on public documents. That reflects the highest earnings in the 96-year history of the central bank. The Fed, unlike most government agencies, funds itself from its own operations and returns its profits to the Treasury.
There are still many ways the Fed can lose money on this, so I'm reserving the champagne. On the other hand, this development cheers me up much more. Don't know what will come of it, maybe nothing, but it's a good first step in cracking down on irresponsible bankster compensation practices.
The FDIC, which collects fees from all banks to repay depositors in failed banks, is considering a plan to impose higher fees on banks with compensation practices that the agency regards as encouraging reckless pursuit of short-term profits without sufficient regard for the risk of long-term losses.

The agency's board voted Tuesday by a narrow 3 to 2 margin to seek public comment on a preliminary version of the proposal, the first step in a process likely to take at least a year.
I'd guess it's more likely to take many years to see fruition but you have to start somewhere. It's not much, but I'll take it.

[More posts daily at The Detroit News]

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