Home MoneyBanks U.S. banks borrow from Fed’s lending programme

U.S. banks borrow from Fed’s lending programme

by Sama Mousa
Federal Reserve

U.S. banks are rushing to borrow from the lending programme of the Federal Reserve this week, as the banks have borrowed $11.9 billion, the largest loan since the 2008 financial crisis, according to Fed’s recent data.

The programme will provide loans for banks, credit unions, and other financial organizations for a year, in exchange for treasury bonds and other government-backed bonds.

Another $152.8 billion were loaned through the discount window, the traditional lending method for providing liquidity in the U.S. economy.

This is an increase of $4.58 billion from last week to break the record high of $111 billion recorded during the 2008 financial crisis.

The Fed did not specify the banks that were given a loan that exceeded around $164.8 billion, nor did it specify the number of banks that requested a loan.

The emergency loans from the Fed are a result of the SVB crash last week, the second major bank crash in the U.S. since the 2008 financial crisis.

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