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June 2009
Federal Reserve System Monthly Report onCredit and Liquidity Programs and theBalance Sheet
Board of Governors of the Federal Reserve System
Purpose
The Federal Reserve prepares this report as part of itsefforts to enhance transparency in connection with itsvarious programs to foster market liquidity and finan-cial stability and to ensure appropriate accountability tothe Congress and the public concerning policy actionstaken to address the financial crisis. The report providesdetailed information on the new policy tools that havebeen implemented since the summer of 2007.
1
TheFederal Reserve considers transparency about the goals,conduct, and stance of monetary policy to be funda-mental to the effectiveness of monetary policy. TheFederal Reserve Act sets forth the goals of monetarypolicy, specifically “to promote effectively the goals of maximum employment, stable prices, and moderatelong-term interest rates.” Since the summer of 2007,the Federal Reserve has undertaken a number of impor-tant steps aimed at providing liquidity to important fi-nancial markets and institutions to support overallfinancial stability. Financial stability is a critical pre-requisite for achieving sustainable economic growth,and all of the Federal Reserve’s actions during the cri-sis have been directed toward achieving its statutorymonetary policy objectives.
1. Financial information in this report has not been audited.Audited financial data are prepared annually and are available atwww.federalreserve.gov/monetarypolicy/bst_fedfinancials.htm.
Contents
Overview ................................................................................................................................................1
Recent Developments.............................................................................................................................1
System Open Market Account (SOMA) Portfolio .......................................................................................3
Recent Developments.............................................................................................................................3Background ..........................................................................................................................................3
Liquidity Swaps ......................................................................................................................................4
Recent Developments.............................................................................................................................4Background ..........................................................................................................................................4Dollar Liquidity Swaps...........................................................................................................................4Foreign-Currency Liquidity Swap Lines ....................................................................................................5
Lending to Depository Institutions ............................................................................................................5
Recent Developments.............................................................................................................................5Background ..........................................................................................................................................5
Collateral Pledged by Depository Institutions.............................................................................................6
Recent Developments.............................................................................................................................6Background ..........................................................................................................................................6Collateral..............................................................................................................................................7
Lending to Primary Dealers .....................................................................................................................7
Recent Developments.............................................................................................................................7Background ..........................................................................................................................................7Collateral..............................................................................................................................................8
Other Lending Facilities: Commercial Paper Funding Facility (CPFF).........................................................9
Recent Developments.............................................................................................................................9Background ..........................................................................................................................................9
Other Lending Facilities: Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF)...10
Recent Developments ...........................................................................................................................10Background.........................................................................................................................................10Collateral............................................................................................................................................10
Other Lending Facilities: Term Asset-Backed Securities Loan Facility (TALF)............................................10
Recent Developments ...........................................................................................................................10Background.........................................................................................................................................11Collateral and Risk Management ............................................................................................................12
Lending in Support of Specific Institutions ..............................................................................................12
Recent Developments ...........................................................................................................................12Background.........................................................................................................................................12Bear Stearns........................................................................................................................................13Financial Tables: Maiden Lane LLC....................................................................................................13American International Group (AIG).......................................................................................................13Recent Developments........................................................................................................................13Background .....................................................................................................................................14Financial Tables: AIG Credit Facility...................................................................................................15Financial Tables: Maiden Lane II ........................................................................................................15Financial Tables: Maiden Lane III LLC................................................................................................16Citigroup ............................................................................................................................................16Bank of America..................................................................................................................................16
Financial Tables: Federal Reserve System................................................................................................17
Recent Developments ...........................................................................................................................17Background.........................................................................................................................................17Financial Tables...................................................................................................................................18SOMA Financial Summary.................................................................................................................18Loan Programs.................................................................................................................................19Consolidated Variable Interest Entities (VIEs) .......................................................................................19
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