Discount Window Borrowing Jumps to $262 BillionSubmitted by SIERRAHPBT on Fri, 09/26/2008 - 17:33
We are apt to shut our eyes against a painful truth... For my part, I am willing to know the whole truth; to know the worst; and to provide for it. --Patrick Henry
Dear Mr. Sinclair:
From American Banker's website this evening:
Discount Window Borrowing Jumps to $262 Billion
American Banker | Friday, September 26, 2008
By Steven Sloan
WASHINGTON During another turbulent week on Wall Street, lending through the Federal Reserve Board's discount window skyrocketed to $262.3 billion on Wednesday, thanks to new lending programs unveiled during the week.
It was the second record in as many weeks and more than double from the previous high water mark.
The heaviest lending was centered on the primary dealer credit facility, which was established in March to give investment banks access to the discount window. The Fed eased terms on the facility on Sunday when it approved requests from Goldman Sachs and Morgan Stanley to convert to bank holding companies.
The Fed said Goldman and Morgan, the last of the major investment banks, could borrow on the same terms as commercial banks and with the same collateral. In response, lending through the PDCF totalled $105.662 billion on Wednesday, from $59.8 billion a week earlier.
Commercial banks were also very active at the discount window. Loans to banks increased 17.7%, to $39.9 billion, a new record.
Meanwhile, the Fed issued loans to weak banks for the second week in a row. These loans increased 5.6%, to $19 million on Wednesday.
Friday should be interesting