Fed emergency lending to banks boosted overall Fed holdings in latest week
2023.03.23 16:57
© Reuters. FILE PHOTO: Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 19, 2019. REUTERS/Leah Millis/File Photo
By Michael S. Derby
NEW YORK (Reuters) – Federal Reserve emergency lending to banks, which hit record levels last week, remained high in the latest week amid ongoing anxiety over the state of the financial system, Federal Reserve data released Thursday showed.
The Fed reported that discount window borrowing, its main source of emergency credit to depository institutions, hit $110.2 billion as of Wednesday, down from the $152.9 billion reported last week. Last week’s level had surged from $4.6 billion on March 8, shredding the $112 billion record set during the fall of 2008, during the global financial crisis’s most perilous phase.
However, as of Wednesday, banks boosted borrowing under the central bank’s newly launched Bank Term Funding Program to $53.7 billion. In its first outing last week the facility had drawn a smaller than expected $11.9 billion in lending. The facility allows eligible financial firms to borrow against a range of bonds without the penalties normal imposed on this type of credit.
