The U.S. Federal Reserve used a non-competitive bid process when it secured the middlemen services of State Street Corp. and JPMorgan Chase & Co. to maintain the liquidity in money market mutual funds during the financial crisis' acute stage.

The Fed's decision resulted in large profits for State Street and JPMorgan by allowing them to borrow $200 billion almost risk-free from the Federal Reserve under a program intended to rescue money market mutual funds, Bloomberg News reported.

The Fed lent State Street a total of $89 billion to buy securities from the funds in 2008 and 2009 after the credit crisis triggered by the collapse of Lehman Brothers, according to Fed data compiled by Bloomberg News from information released in response to Freedom of Information Act requests, related court orders and an act of Congress.

The Fed also also guaranteed against losses on the short-term notes as long as they met eligibility guidelines.

State Street, based in Boston, held the securities to maturity and collected a return of $75.6 million, according to regulatory filings. JPMorgan borrowed and bought $111 billion in securities under the same program, records show.

What's more, while New York- based JPMorgan hasn't disclosed its profit from the transactions, it would've been about $93 million at the same rate of return State Street reported.

Monetary/Public Policy Analysis: On Capitol Hill, there's almost certain to be additional grandstanding, particularly by Tea Party faction members, and other conservatives, regarding the Fed's action.

Still, most investors and members of the general public will view the Fed's action in a different light: it was an emergency decision by the Fed during the acute stage of the financial crisis -- the Fed didn't have months to evaluate competitive bids.

Had the Fed not acted, liquidity conditions in the critical money market sector would've contracted further, and the financial crisis would've worsen. Without question, the Fed made the right call regarding money market funds.