Fed Backstop Borrowing Falls Again

Banks continued to avail themselves of Fed liquidity backstops over the last week, but the aggregate amount receded again.

That’s according to the latest balance sheet update, released on Thursday afternoon, as usual.

Discount window usage stood at $67 billion as of Wednesday, down only marginally from the prior week. Lending under the newly-created bank term funding program fell for the first time since it was established last month, but still stood at nearly $72 billion.

Combined, borrowing from the two emergency facilities was around $140 billion. That was the lowest since the onset of the mini-crisis, but it’s still indicative of liquidity demand.

FIMA usage dropped to $30 billion, half of the Credit Suisse panic level. The “other credit extensions” line, which included the bridge bank loans, fell a second week.

Overall, the Fed’s balance sheet fell a third week, and is now more than $100 billion below March 22 levels, when the spike associated with the central bank’s emergency lending peaked.

Generally speaking, the narrative is the same: The situation is stabilizing, but it’s fair to suggest that some trepidation remains.


 

 

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