## The Federal Reserve System Balance Sheet: What Happened and Why it Matters

_IMF Working Papers, May 1, 2009_

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## Bibliographic details
- Authors: Peter Stella
- Published: May 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451872675.001

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### Summary and central findings
- The recent expansion of the balance sheet of the consolidated Federal Reserve Banks (FRB) is analyzed in an historical context.
- The nature of Fed involvement in U.S. financial markets has changed dramatically.
- The expansion is described as "several orders of magnitude beyond what is usually reported."
- Associated fiscal risks and potential exit strategies are considered.

### Fiscal risks, scenarios, and implications
- Risks are considerable in certain unlikely scenarios.
- Despite those risks, "FRB capital, earnings capacity, and reserves are more than ample to preserve their financial independence."
- However, the occurrence of losses or a significant drop in FRB profit might lead to an eventual curtailment of Fed operational independence.

### Policy considerations and recommended actions
- Consider options to enhance FRB risk management.
- Consider how to assign responsibilities for monetary policy, financial stability, and fiscal policies once the current crisis is overcome.
- Analyze potential exit strategies from the enlarged balance sheet and their fiscal implications.

### Research scope and topical coverage
- Subject areas: Banking, Commercial banks, Credit, Currencies, Financial statements
- Keywords: FRB balance sheet, FRB capital, FRB equity, monetary policy, U.S. dollar, WP

*Source: Peter Stella, "The Federal Reserve System Balance Sheet: What Happened and Why it Matters", IMF Working Papers, May 1, 2009.*

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## Content in this bundle

- **26. Federal Reserve Policy Assets**
  - [26. Federal Reserve Policy Assets (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2009/_wp09120.pdf.md){rel="alternate" type="text/markdown"}
  - [26. Federal Reserve Policy Assets (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2009/_wp09120.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/the-federal-reserve-system-balance-sheet-what-happened-and-why-it-matters-22975_