After the collapse of Silicon Valley Bank, a financing problem has apparently set in in the American banking sector. Last week, the institutions raised a total of $164.8 billion from the Federal Reserve through two facilities.
Data released by the US Federal Reserve showed $15.152 billion in borrowing through the discount window, the traditional liquidity reserve for banks, for the week ending March 85. The record value is compared to a volume of 4.58 billion dollars in the previous week. The previous all-time high from the 2008 financial crisis was $111 billion.
The data also showed $11.9 billion in borrowing from the Fed's new emergency facility, the Bank Term Funding Program launched Sunday.
Deposits are deducted
Overall, the loans granted through the two backstops show that after the collapse of California's Silicon Valley Bank and New York's Signature Bank last week, the banking system is still fragile and struggling to churn deposits.
The week also saw $142.8 billion in lending, reflecting loans from the Federal Deposit Insurance Corp. to bridge banks for the SVB and Signature Bank.
Meanwhile, the New York Times reports that Fed Chairman Jerome Powell apparently did not want to admit the failure of regulators as part of the bailout of Silicon Valley Bank and Signature Bank. The paper's report quotes several people familiar with the matter about the incident.
According to the report, Powell did not allow a sentence to mention the failure of regulators in the bailout in a statement released by the Fed last Sunday.