All-Time High of U.S. Banks Borrowing From the Federal Reserve

US Federal Reserve data showed that US banks borrowed from the Fed to maintain liquidity reached $164.8 billion, a record high.

The data shows that $152.85 billion of that amount was borrowed during the week to March 15 through a discount window mechanism that allows lenders to borrow money from the central bank to cover their short-term needs in the event of a liquidity squeeze.

According to the US Federal Reserve, the latest borrowing figures are considered the benchmark in the history of the existence of this mechanism and far exceed the levels of borrowing that were during the 2008 financial crisis, when they were at $111 billion during the week.

Notably, during the first week of March 2023, banks borrowed $4.58 billion from the Fed through the discount window and $11.9 billion through the Bank Temporary Funding Program, which is an emergency facility launched by the Federal Reserve on Sunday to support liquidity.

It comes amid the failure of the Silicon Valley Bank in California last week, the largest U.S. bank failure since the 2008 crisis.

Source: News