Keeping you up to date on the latest data releases.
- Federal Reserve’s Balance Sheet
One of the biggest concerns for the balance sheet this week did not appear on the statistical release. A British regulator, the Financial Services Authority (FSA), raised concerns over Prudential’s capital capacity to purchase AIG’s Asian subsidiary AIA, now leaving the deal in doubt. If the deal were to go through, the estimated $35.5 billion price for AIA would go toward repaying the loans that AIG had taken out from the Federal Reserve. Currently, the Fed holds $16.2 billion in preferred interests in AIA, which could be recovered in the event of a sale, as well as an extra $27 billion in outstanding loans to AIG. AIG drew an extra $1.3 billion from its revolving credit facility at the Fed, the second week in a row that the outstanding balance has increased by close to $1 billion. Last week’s report was that the increase was due to adjustments made to the terms of the credit facility. Elsewhere on the balance sheet, the CPFF dropped nearly $4 billion, as more of the remaining outstanding commercial paper in the facility has rolled off. The balance for the CPFF now stands at $2.8 billion. On the liabilities side, excess reserves fell again this week, this time by about $46 billion, but were offset by a $20 billion jump in the Treasury’s general account.