U.S. banks borrowed a record $367.8 billion per day from the Fed Windows

October 2, 2008 by · Leave a Comment
Filed under: Industry News 

Well the Fed’s different credit facilities are now starting to sound like a soup line, except the are giving out treasuries instead of soup and bread. It is honestly hard to believe along with all the additional liquidity in the market we also have over 1/3 of a trillion dollars on loan to keep a bunch of failed bank alive. The derivatives crisis must be much worse than they are admitting to the public. They must really need this bailout plan or its lights out for more bank? We will see if Pelosi and gang can break at least 13 representatives to get the majority needed. My bet is on the will of the people which will or will not be heard depending on if this gets passed after being rejected. Now the media has really stepped up the call for this bank bailout to they state that all happy life will end in America which I don’t subscribe too. One thing we do know is “If you going to make a cock up, make it an enormous cock up so you get bailed out“.

News Piece:

U.S. banks’ borrowed a record $367.8 billion per day from the Federal Reserve in the latest week, as financial institutions relied heavily on the lender of last resort amid the most severe credit crisis since the Great Depression.

With interbank lending markets frozen and commercial paper markets near paralyzed, there is virtually nowhere else where banks can get short term funding except the central bank.

Banks’ discount window borrowings averaged $367.80 billion per day in the week ended October 1, nearly double the previous record daily average of $187.75 billion last week, Federal Reserve data released on Thursday showed.

“Each time it gets more and more stunning,” said Michael Feroli, economist at JPMorgan in New York. “You’re just seeing huge increases across the board. It tells you that the paralysis is massive.”

Primary credit borrowings averaged a record $44.46 billion per day in the latest week, versus $39.36 billion the previous week.

Primary dealers and other broker dealers credit borrowings were $146.57 billion as of Wednesday Oct 1, up from $105.66 billion on September 24.

Loans in the “other credit extensions” category, including loans to insurer AIG were $61.28 billion as of October 1, versus $44.57 billion on September 24.

The Federal Reserve’s lending to U.S. depository institutions and bank holding companies, to finance their purchases of high-quality asset-backed commercial paper from money market mutual funds via a new lending facility the Fed announced on September 19, jumped in the latest week.

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