Which Bank Is Leveraged 104:1?

``Like commercial enterprises, the Federal Reserve banks have an equity cushion to cover losses. But not much of one. The system has a Lehman Brothers-style leverage of 55 to 1. At the New York bank, the one that Timothy Geithner used to run, leverage is 104-to-1... Not to worry, insists Glenn Rudebusch, an economist at the San Francisco Federal Reserve Bank. In a paper published in April he notes that those bonds and mortgage securities are worth more than their purchase prices. The Fed, he proudly recounts, is still gloriously profitable. Perhaps the Fed is profitable on paper, BUT what if the Fed had to sell their holdings? What if the market value of the Fed's holdings plummeted and creditors were less willing to provide financing for all those borrowed funds which the Fed needs given its leverage?''