标题: US govt securities on the Fed`s balance sheet [打印本页] 作者: franzino 时间: 2011-7-13 16:05 标题: US govt securities on the Fed`s balance sheet
Why are the US Govt securities an asset on the Fed`s balance sheet...
The Fed is the banker to the US govt....
The Fed sells US govt securities through the FOMC operations to control the money supply in the US economy.....
Suppose it wants to increase money supply so it will issue Govt securirties and banks and insurance companies or any other institution would buy it....so that T-Bill/T-Note will be a liability on the Fed`s balance sheet as it has to repay the principal amount on the maturity date....作者: btcapital 时间: 2011-7-13 16:05
US Fed and US Treasury are 2 separate entities.
Treasury Bills in the market held by public, are a Liability of US Treasury and not that of US Fed.
In Fed's balance sheet, Treasury Securities appearing there as Assets are the ones that Fed has bought from the market thru Open Market transactions.作者: smartpants 时间: 2011-7-13 16:06
so the US Treasury issues the Govt securirties? i.e. on the behalf of the Govt ?作者: dece2011 时间: 2011-7-13 16:06
Yes, US Teasury issues them. Fed, i guess only acts as their agent in selling them.
