Robert Besser
20 Mar 2023, 20:34 GMT+10
WASHINGTON D.C.: The US Federal Reserve Bank has announced that cash-strapped banks throughout the US borrowed some $300 billion during last week.
Almost half the funds, $143 billion, went to holding companies set up by the Federal Deposit Insurance Corporation for Silicon Valley Bank and Signature Bank, two major banks that collapsed over the past week, causing turmoil in financial markets.
The Fed stressed that the FDIC has guaranteed the repayment of the loans.
Since the bank failures last weekend, major banks, such as Bank of America, have reported receiving inflows of funds from smaller banks, so the remaining funds from the Federal Reserve were likely borrowed by these small banks needing to raise cash to pay off depositors who tried to withdraw their money.
Over the past week, an additional $153 billion in borrowing from the Fed came through a longstanding program, called the "discount window," through which banks can borrow from at a discount for up to 90 days.
To allow banks to raise cash and pay depositors withdrawing their money, the Fed has lent an additional $11.9 billion from a new lending facility.
In a research note, Michael Feroli, economist at JPMorgan Chase, said that the Fed's assistance is currently about half what it was during the financial crisis 15 years ago. "But it is still a big number," he said, as quoted by the Associated Press.
Despite Silicon Valley Bank and Signature Bank owning billions of dollars of supposedly safe Treasury and other bonds that paid low interest rates, their collapse required the emergency lending from the Fed.
The Fed said it has received $15.9 billion in collateral, more than the $11.9 billion it has lent, for its new lending facility.
Get a daily dose of Sports Sun news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Sports Sun.
More InformationLOUISVILLE, Kentucky: Two horses that succumbed to their injuries at Churchill Downs have become the 11th and 12th fatalities over ...
LAS VEGAS, Nevada: A bill was introduced in the Nevada Legislature to provide the Oakland Athletics up to $380 million ...
Mike Trout and Shohei Ohtani flashed their power on Wednesday in the sort of one-upmanship that is always welcome for ...
Two teams that have struggled offensively could be heating up at the right time when the defending American League Central ...
The Boston Red Sox like what they've been getting from Chris Sale lately. The left-hander now gets an opportunity to ...
Two years ago, the Arizona Diamondbacks endured one of the worst seasons in franchise history, finishing with 110 losses. The ...
After a nine-month hiatus, Brandt Snedeker has his sights set on returning to the PGA Tour at this week's Memorial ...
The Denver Broncos signed well-traveled Elliott Fry on Wednesday after releasing fellow kicker Brandon McManus last week. Terms were not ...
The agent for Aaron Rodgers requested that the Green Bay Packers either fire their general manager or trade the quarterback ...
The Denver Broncos are signing well-traveled Elliott Fry after releasing fellow kicker Brandon McManus last week, NFL Network and 9News ...
New York Jets coach Robert Saleh on Wednesday provided promising updates on the health of star quarterback Aaron Rodgers and ...
New England Patriots head coach Bill Belichick on Wednesday took responsibility for the team being stripped of two organized team ...