This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Banks Trim Borrowing From Fed's Emergency Program


WASHINGTON (AP) ¿ U.S. banks borrowed slightly less from the Federal Reserve's emergency lending program over the past week, a sign credit stresses are easing.

The Fed, in a report issued Thursday, said commercial banks averaged $18.74 billion in daily borrowing over the week that ended Wednesday. That was down from $18.75 billion the previous week.

As financial conditions have improved, banks scaled back their use of the program. They borrowed $110 billion at the height of the credit crisis last year, when banks were having grave troubles getting loans from the private market.

Banks pay interest of just 0.50 percent on the emergency loans. The identities of the banks aren't released.

As another sign of improvement, banks and other institutions have stopped using a separate "commercial paper" program that was created to boost the availability of short-term financing crucial for paying salaries and supplies. At its peak in January, the Fed held almost $350 billion worth of commercial paper.

Banks also have been cutting back on short-term loans drawn from the Fed's "term auction credit" program. Those loans averaged $75.9 billion over the past week, down sharply from $450 billion in early January 2009.

Even with such reductions, the Fed's balance sheet is still $2.2 trillion, which is more than double before the crisis struck.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $132.72 1.90%
FB $82.25 0.88%
GOOG $555.54 -1.70%
TSLA $234.03 7.10%
YHOO $44.46 -0.13%


DOW 18,050.68 -29.46 -0.16%
S&P 500 2,114.36 -3.33 -0.16%
NASDAQ 5,074.0630 -18.0220 -0.35%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs