US: Banks increase demand for emergency credit from the Fed again

The amount that US banks borrowed through the rediscount window and the Federal Reserve (Fed) emergency program increased for the second week in a row, a sign that the stress in the financial system has not completely disappeared. Total bank loans increased to $96.1 billion in the week to May 17 from $92.4 billion in the prior period.

The credit mobilized through the rediscount window was reduced from US$9.300 million to US$9.100 million, while the line of the Term Bank Financing Program (BTFP) expanded from US$83.100 million to US$87.000 million with respect to to the previous period. In total, US$96.1 billion in emergency loans were channeled to increase the liquidity of US banks, an amount still far from the peak of US$164.8 billion seen in March.

The “other extensions of credit” category, whose resources are guaranteed by the Federal Deposit Insurance Corporation (FDIC), went from US$212.5 billion to US$208.5 billion. The modality also includes resources from First Republic Bank, sold to JPMorgan. With the moves, the Fed’s total asset balance fell from $8.55 trillion to $8.35 trillion.

Related