U.S. banks reduced their borrowing from the Federal Reserve marginally last week, with central bank data on Thursday showing a combined $163.9 billion in outstanding borrowings for the week of March 22, when the Fed implemented its latest 25-basis point hike.
While down from the $164.8 billion from the previous week, this is still a steep amount, indicating that banking institutions are still reliant on the liquidity of the Federal Reserve as they look to weather the storm of the ongoing banking crisis.
$110.2 billion had been borrowed from the Fed’s traditional backstop lending program known as the discount window this past week, down from the record $152.9 billion in outstanding borrowings the previous week. Outstanding borrowings from the Bank Term Funding Program, in contrast, surged to $53.7 billion from the $11.9 billion of last week. The Federal Reserve opened this program on March 12 after declaring emergency conditions after the failures of Silicon Valley Bank and Signature Bank.
While loans from the discount window can be extended for up to 90 days, those from the Bank Term Funding Program can be extended for a year under tighter conditions.