U.S. banks borrow record $165 billion from the Fed in a week
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For the first time since the 2008 crisis, US banks borrowed a record $164.8 billion from the Fed’s two subsidiary funds in the week of March 8-15. About it informs Bloomberg, citing Fed data.
It is specified that banks took $152.8 billion through the discount window (a mechanism that offers short-term loans to commercial banks). At the same time, a week earlier, the volume of borrowed funds did not exceed $4.58 billion. Banks borrowed another $11.9 billion from the bank’s term financing program, which was launched on March 12. The previous record was set during the financial crisis in 2008, when banks borrowed about $111 billion.
On March 10, the collapse of the American Silicon Valley Bank, which ranked 16th among the largest US banks and specialized in working with startups, collapsed. Western publications noted that the collapse of SVB was the second largest bankruptcy in US history after the closure of Washington Mutual in 2008. March 13 also stopped work of Signature Bank because of “systemic risks”.
After that, the international rating agency Moody’s lowered outlook for the US banking system from stable to negative. They said that they expect the Fed to increase the rate, and admitted that by the end of 2023 the US economy will fall into a recession, which will put even more pressure on the banking sector.
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