Economic Report: Fed issued $139.5 billion in emergency loans to banks in latest week, down more than 50% from mid-March

by | Apr 13, 2023 | Stock Market

The numbers: Cash-strapped banks borrowed $139.5 billion in emergency lending from the Federal Reserve in the week ended April 12, according to data released by the central bank Thursday. That was down from $148.7 billion last week and $154 billion two weeks ago. It’s also down from a peak of $300 billion in mid-March, when Silicon Valley Bank collapsed. Key details: Banks borrowed $67.6 billion from the Fed using the traditional “discount window” in the week ended April 12, compared with $69.7 in the prior week.

The Fed lent banks an additional $71.8 billion from a new Bank Term Funding Program set up to prevent further bank runs and failures. That was down from $79 billion in the prior week. Banks can use that program to get emergency loans to pay any depositors who withdraw money, rather than potentially having to sell securities to raise cash that could cause stress in markets. Big picture: The declining amount of bank borrowing adds to the sense that the stress on the banking system is easing, or at least stabilizing. But experts said that there remain serious doubts about the health of the banking system going forward, with estimates of over $600 billion in debt that is underwater on their books. Behind th …

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