WASHINGTON (MarketWatch) -- In the first significant borrowing from the Fed since it lowered the discount rate last month, U.S. banks borrowed $7.2 billion from the Federal Reserve as of Wednesday, the most since just after the attacks of Sept. 11, 2001, the Fed said Thursday.
The average borrowing for the week was $2.7 billion per day.
The Fed data don't detail the names of the borrowers. The data indicate that $4.9 billion in loans were owed to the Federal Reserve Bank of New York, $1.6 billion to the Cleveland Fed, and $550 million to the Richmond Fed.
Last month, five big banks had borrowed from the discount window in a symbolic show of support for the Fed. The borrowing from the Richmond Fed appears to be a holdover from the symbolic borrowing earlier.
By borrowing from the Fed at 5.75%, the move shows that several U.S. banks could not obtain needed funds from other banks at the federal funds rate, which closed at 5.18% on Wednesday and has averaged 5.01% so far this month.
One analyst said the Fed had forced the banks to borrow the money by deliberately squeezing reserves at the end of the two-week maintenance period, when many banks must borrow funds to prove to the Fed that they are holding adequate reserves against their capital.
"Most of this borrowing was forced," said Lou Crandall, chief economist for Wrightson ICAP. The Fed was "deliberately stingy" ahead of the expiration of the reserve maintenance period on Wednesday, he said.
"It's like a game of musical chairs," Crandall said.
In essence, the Fed forced the banks that were left without enough reserves to borrow at the discount window by temporarily pushing the federal funds rate above the discount rate at the end of the day on Monday, Tuesday and Wednesday, Crandall said. It was cheaper for the banks to borrow from the Fed than to borrow from other banks.
Crandall said that the high for the effective fed funds rate touched 6.5% on Monday, 6% on Tuesday and 6.25% on Wednesday, above the 5.75% discount rate.
Without much success until this week, the Fed had been encouraging banks to use the discount window facility to bring more liquidity into financial markets and to ease the credit crunch.
Forcing the banks to borrow from the discount window could be part of the Fed's effort to get rid of the stigma that's been associated with borrowing from the Fed. By making banks more comfortable with discount-window borrowing, the Fed hopes its plan could still work.
"If the carrot won't work, use the stick," Crandall said.
Borrowing from the discount window has been rare except during extraordinary times. Such loans from the Fed typically carry a stigma because market participants assume that only a desperate situation would compel a bank to use the lender of last resort.
Last month, however, the Fed lowered the discount-rate penalty from one percentage point to a half point, and encouraged banks to borrow as needed to help flood the system with short-term cash. Until this week, there was no evidence of any significant borrowing from the Fed.
This week's borrowing could be related to the seizure in the commercial paper market, said Mike Englund, chief economist for Action Economics. Corporations that cannot roll over their own paper are turning to banks for short-term funds.
Englund speculated that the banks that borrowed from the Fed this past week could be using the Fed as the source of funds for these backstop loans. Under new rules adopted a month ago, the Fed is allowing banks to borrow at the discount window for 30 days at a 5.75% fixed rate.
There was some evidence Thursday that the credit crunch is easing, at least in the very short-term commercial paper market, where corporate securities average 45 days' maturity. The Fed said outstanding paper fell for a fifth straight week, but at a much slower pace than seen earlier. Commercial paper levels are down $306 billion or 13.8% to $1.92 trillion in the past six weeks
41 comentarios:
buenas... salu2
pasandoooo.
aportando! man!! cuidese saludos!
gente estoy de limpieza , si pueden firmen saludos
hijo pase...si podes pasate...voy a hacer limpieza...ahroa me toco a mi :P jiji ...y dejate de hacer el chico english :P;)
aportando!! saludos!!
pasandoooo y sigo de limpieza saludos y pasarla bien
estimados amigos,
les escribo para comunicarles q abandono momentaneamente el acuerdo. la falta de tiempo me ha impedido cumplir los dos ultimos dias con mis obligaciones y veo dificil seguirles siendo fiel en el futuro. quedan liberados de sus responsabilidades hacia mi.
espero poder volver a apoyarlos pronto,
desajustes (martín)
pd: les dejo un ultimo aporte.
pd2: eliminen este comentario.
sale TLC?? paso todos los dias y
colaboro espero lo mismo de vos. Deja un mensaje cuando
pases pero tambien colabora sino no sirve. nos estamos
viendo un saludo
paseeee .
HAY GENTE QUE NO ESTA CUMPLIENDO ASIQUE LOS QUE PASAN FIRMEN PORQUE ARRANCO CON LA LIMPIEZA , PERDON POR LOS QUE PASAN Y FIRMAN .
SALUDOS
aportando man!! nose x q no puedo dejar mensjs en tu chatbox :S
paso todos los dias y colaboro espero lo mismo de vos. Deja un mensaje cuando pases pero tambien colabora sino no sirve. nos estamos viendo un saludo
aportando!! saludozz man!!buen fin de sema
pasando y firmando salu2!!
Hoy firmo que tengo tiempo, pero que no firme no quiere decir que no pase!
Un abrazo
aportando!! saludozz buen comienzo de sema!
hola pasando como siempre, ya hice un chat para los que lo pedian y tambien te agrege en blogs amigos
nos vemos un saludo
hola q haces todo bien tu page esta re buena
Hola, te interesaria hacer un acuerdo de TLC?
Si te interesa entra en el foro en la seccion Negocios y avisame, gracias.
http://www.ojosubjetivo.com/foro/
El tlc no es con mi blog, es con www.ojosubjetivo.com
Hey, What`s up? thats a great BLOG, I like it, really, well c u L8ta
hola como andase andaba por aca y entre
hola como andase andaba por aca y entre
Te interesa hacer TLC?
Avisame en el Blog
Saludos.
Hola soy nuevo,mepresento soy maxi, esta buena tu pagina mañana paso denuevo suerte, me lo recomendo el mano santa
Tiene buena pinta el tuyo, te voy a seguir leyendo Saludos. NOS VEMOS VOY A ANDAR EN LA VUELTA
por las dudas:
como me estan pasando la mitad de mis tlc, si pasas y haces las cosas bien todo bien, pero sino por las dudas: hay que esperar un minuto aprox a que cargue la pagina para hacer el c.... y despues dejar cargar la pagina, y como yo firmo siempre pido lo mismo.
Si pasas siempre todo bien, y si no vas a pasar avisa.
Gracias
SIMON
hola q haces tu blog esta bueno como siempre y yo ya estoy aportando el mano santa me dijo q eras de confianza
ta bueno el blog!!, AGUANTE EL MANO SANTA!!! ;) Nos veremos seguido, me gusta el ingles! :D
hola estoy pasando a diario por tu blog suerte con el, un abrazo
Pasamos...
Un Abrazo
hola como andas anduve en la vuelta y como sabes yo siempre aporto bueno nos bemos
recien paso diego x aca y me dijo q el logo te quedo increible
buenas tengo nuevo blog!!! preferiria que pasaras por el nuevo en ves del que estas pasando actualmente desde ya gracias y perdon por la joda..
http://fivestarss.blogspot.com/
HOLA!!! como estas? soy nuevo y me gustaria unirme a su comunidad, me comento el mano santa
aca saludando espero lo mismo de vos abrazo !
Pah q mugre la tarde de hoy :S
buenas... paso a saludar nomas y a informales que tengo nuevo blog
wwww.fivestarss.blogspot.com pasen por ahi... salu2
hola como andas q lindo dia q hizo yo ando x rocha al dope y anduve x aca bueno nos vemos
Que lindo dia! un saludo
como te trata la lluvia che, esquivando los pingüinos :P ??
se viene el punchi punchi
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