[Updated] Banks borrowed record $17.45b per day from Fed
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As the credit crisis continues to affect economy, banks have been relying more and more on Federal Reserve for funds. According to the data release by Fed on Thursday, banks borrowed at the rate of $17.45 billion per day in the latest week, a record figure surpassing last week of record borrowing at the rate of $16.38 billion per day. On the day of July 30, banks’ primary credit borrowings inched lower to $17.38 billion, down from $17.68 billion on July 23. Dealers borrowed $3 billion average per day from the Primary Dealer Credit Facility in the latest week after not borrowing at all the week before.
“It shows there’s a shortage of liquidity in the system,” said Christopher Low, chief economist at FTN Financial in New York.
Secondary credit jumped to $89 million this week compared to $34 million last week.
To see things in perspectivce, here is the graph on bank’s borrowing trends -
