Banks Borrow More From Emergency Fed Program

CHRISTOPHER S. RUGABER

WASHINGTON (AP) — Banks borrowed slightly more from the Federal Reserve's emergency lending program over the past week, while reducing their use of other credit programs designed to ease the financial crisis.

The Fed said commercial banks averaged $22.6 billion in daily borrowing over the week that ended Wednesday. That's up $32 million from the week ended Oct. 28, but is far less than the $110 billion they borrowed a year ago at the height of the financial crisis.

The increase, while slight, was the first since the week of Sept. 2.

The identities of the financial institutions are not released. They pay just 0.50 percent in interest for the emergency, overnight loans.

The banks sharply cut their use of a separate program intended to boost the availability of short-term financing crucial for paying salaries and supplies.

Under that program, the Fed's net holdings of "commercial paper" averaged $15.6 billion, a drop of $16.6 billion from the previous week. At its peak in late January, the Fed held almost $350 billion of commercial paper.