US banks are borrowing more money from the Federal Reserve today than in 2008, the year of the financial crisis.
(Photo: Bloomberg)
new York After the collapse of the Silicon Valley Bank, a financing problem apparently set in in the American banking sector. In the last week, the institutions raised a total of $164.8 billion from the Federal Reserve.
Data released by the Federal Reserve showed $152.85 billion in borrowing through the discount window, the traditional liquidity reserve for banks, for the week ended March 15. The record value compares to a volume of $4.58 billion in the previous week. The previous all-time high from the 2008 financial crisis was $111 billion – almost $42 billion less.
The data also showed $11.9 billion in borrowing from the Fed’s new emergency facility, the Bank Term Funding Program, which launched on Sunday.
Overall, the loans provided through the two backstops show that the banking system is still fragile and struggling with deposit churn following the collapses of California’s Silicon Valley Bank and New York’s Signature Bank last week.
Also on the week was $142.8 billion in lending, bringing loans from the Federal Deposit Insurance Corp. in bridge banks for SVB and Signature Bank.
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