Banks were less reliant on Federal Reserve support over the past week, a sign that the stress on the financial sector eased further.
Borrowing from the Fed’s primary credit facility, also known as the discount window, fell by $33.9 billion to $71 billion on average during the seven days ending Wednesday, the Federal Reserve said on Thursday evening. As of Wednesday, the Fed’s discount window loans stood at $69.7 billion.
Prior to March, before the banking sector began to experience a run on deposits, discount window borrowing was just shy of $5 billion.
Borrowing through a new facility created in response to the collapse of Silicon Valley Bank and subsequent stress on other banks rose by $5.5 billion to an average of $68,156 and ended the week at $79 billion. Because the loans extended under this facility are meant to be longer term than discount window loans, these are not expected to fall rapidly until the facility expires next year.
The Fed has also extended loans to the Federal Deposit Insurance Corp. to support its expanded guarantee of deposits of Silicon Valley Bank and Signature Bank. The balance of these loans declined by $2.2 billion to an average of $177.9 billion.