Fed lost $5.3 billion on Bear Stearns, AIG holdings in first quarter
Yahoo News / AP
June 10, 2009
The Federal Reserve lost $5.25 billion in the first quarter on the securities it acquired with last year's bailouts of Bear Stearns and insurer American International Group Inc., according to a report issued Wednesday.
The loss on the holdings, which include mortgage-backed securities, reflected a decline in their value as the recession carried over into the first three months of this year.
The cumulative loss of the Bear and AIG holdings come to $16.46 billion since they were taken over last year.
The Fed is hoping that if it holds onto the securities long enough, they will eventually rise in value once the economy returns to full health again, the housing market heals and the financial and credit crises are past.
The Fed's new report, which will be issued monthly, comes as lawmakers have demanded more information about the bailouts, and a slew of other programs intended spur lending and stabilize the banking system.
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SOURCE:
http://finance.yahoo.com/news/Fed-lo...0345.html?.v=3
