I understand how CB creates money and buys bonds and other assets.
But I couldn’t find anything on what CB does with interest and profit.
In: Economics
Pay their shareholders, rent on buildings they use, insane out of control, out of proportion bonuses for executives..
In the US. The Federal Reserves uses any profits from interest to first pay for its own expenses, then it gives the rest to the US Treasury.
In the US at least, the interest they earn pays for the operating costs of the Federal Reserve. Anything beyond that is given to the US Treasury to fund the government. They gave almost $90 billion to the Treasury last year.
Nothing basically. They create the money they loan out of nothing, so the interest only exists as a mean to limit the amount of loans taken (if everyone could get free loans they’d just take a new free loan to pay off the old one, wich would make it a gift and not a loan)
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