A release entitled, "Federal Reserve's Liquidity Facilities Had Positive Income Impact While Helping Stabilize Financial Markets, says, "The Federal Reserve Bank of New York today released "Income Effects of Federal Reserve Liquidity Facilities," the latest article in its Current Issues in Economics and Finance series." It explains, "One of the key measures taken by the Federal Reserve to support the broader economy in response to the financial crisis was the introduction or expansion of facilities designed to provide liquidity to the funding markets. The intention and impact of these facilities was to foster stable financial conditions and preserve the flow of credit in the economy. In addition to helping stabilize market conditions, this article asserts that the liquidity facilities generated an estimated profit of $13 billion. In this article, authors Michael J. Fleming and Nicholas J. Klagge examine the effects of the liquidity facilities on the Federal Reserve's interest and fee income between August 2007 and December 2009 -- the period of the facilities' greatest usage. Their analysis concludes that the programs contributed an estimated $20 billion to the Federal Reserve's interest and fee income during that period, or $13 billion after taking into account the estimated $7 billion cost of funds.

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