The Federal Reserve's Quantitative Easing program may be controversial, but one thing is sure: it's very profitable.

The Fed has generated about $700 billion of profits for the U.S. Government in the period from 2005 to 2015, sending all of that money to U.S. government coffers, according to a study conducted by the Wall Street Journal. The Fed's annual QE profit rose from $21.5 billion in 2005 to $117.2 billion in 2015, mainly due to QE. The Fed has declined to comment.

While the U.S. is by far the largest and most profitable central bank among eight leading developed countries, the other seven also enjoyed rising profitability during this period. The latter seven, as a group, earned a combined $31.8 billion of excess profits in 2015, which were turned over to their governments. By contrast, this figure was only $18.5 billion in 2005.

How Central Banks Make Profits

Like any other bank, central banks lend to borrowers at higher interest rates than they pay out to depositors. For central banks such as the U.S. Fed, their primary customers are other banks, rather than private individuals and businesses. These loans to other banks typically are short-term, and often overnight. Central banks adjust the interest rate that they charge to other banks (in the U.S. this is called the discount rate) to influence the general level of interest rates in the economy. Meanwhile, central banks typically require other banks to keep certain amounts of funds on deposit with them, typically at a zero rate of interest.

Effect of Quantitative Easing

In the aftermath of the financial crisis of 2007 to 2008, central banks around the world, including the U.S. Fed, have attempted to stimulate their economies through a low interest rate policy typically called Quantitative Easing, or QE. In addition to lowering the rates that they charge other banks for short term loans, central banks have been buying government bonds in order to increase the money supply and lower the cost of credit. As interest rates have trended downward, the prices of these bonds held by central banks have increased, adding to their profits. Finally, in the risk averse climate following the financial crisis, banks have pulled back from lending to each other. This has added to central banks' short-term lending activities, and thus their profits.