Written by CHRISTOPHER RUGABER-AP Economics Writer
(AP) — Cash-short banks have borrowed about $300 billion in emergency funding from the Federal Reserve in the past week, the Fed announced Thursday.
Nearly half the money — $143 billion — went to holding companies for two major banks that failed over the past week, Silicon Valley Bank and Signature Bank, triggering widespread alarm in financial markets.
An additional $148 billion in lending was provided through a longstanding program called the “discount window,” and amounted to a record level for that program.
The Fed has lent an additional $11.9 billion from a new lending facility it announced on Sunday. The new program enables banks to raise cash and pay any depositors withdrawing funds.
Banks have posted high-quality collateral, such as Treasury bonds, for all the loans. The Fed expects all the loans to be repaid.