How did the consolidated balance sheet of the 12 Federal Reserve banks change during the severe recession of 2007–2009?

What will be an ideal response?

The total Fed assets increased from $885 billion in February 2008 to $2317 billion in March 2010 because of the purchase of securities, mortgage-backed securities and other financial assets. Liabilities also increased from $43 billion in February 2008 to $1148 billion in March 2010. This increase came because banks often had the Fed hold their proceeds from the sale of securities to the Fed and the Fed began paying interest on reserves held at the Fed. By March 2010, the Fed held more bank reserves than the total of check able deposits held by banks. This change gave banks extensive lending capacity should they become more certain about financial stability in the future and decide to increase lending. By May 2013, the Fed’s balance sheet had reached $3.3 trillion and was continuing to grow as QE3 continued.