US banks rushed to take advantage of the Federal Reserve’s emergency lending program this week, borrowing the most since 2008 amid widespread panic over the financial sector, according to CNBC.
The latest data published by the Fed shows that banks have borrowed $11.9 billion in new emergency support, according to a program launched Sunday, March 12th.
The program will provide loans to banks, credit unions and other financial institutions for up to a year on very favorable terms in exchange for guarantees such as Treasury bills and other government-backed securities.
Another $152.8 billion was borrowed from the discount window — the most traditional lending vehicle used to provide liquidity to the US banking system.
That was up from $4.58 billion in the previous week, breaking the record of $111 billion set during the 2008 financial crisis. The discount window only provides loans of up to 90 days.
The Fed did not specify which banks received the roughly $164.8 billion in financing, nor did it say how many requested it.
The Fed’s emergency lending follows the collapse of Silicon Valley Bank SVB last week, the second-largest failure of a US bank since the 2008 global financial crisis.
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