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The amount of money that banks are borrowing from the Federal Reserve fell for the first time in two months, but a smattering of institutions under duress still need the central bank’s lifeline.
Total bank borrowing fell by almost $1 billion to $105.3 billion in the seven days ending July 5.
The Fed has been lending money to some banks that suffered a big decline in investor deposits after several regional institutions failed in the spring. Those failures included Silicon Valley Bank and First Republic Bank.
Most of the money the Fed has lent out has come from an emergency borrowing program set up in March after the collapse of SVB. Those loans totaled just a shade under $102 billion last week vs. $103.1 billion two weeks ago.
The goal of the Fed program was to stop a run on banks and prevent additional failures. The program appears to have succeeded — no bank has failed since the end of April. But not every institution has fully recovered.
Total borrowing from the Fed peaked at $164.8 billion in mid-March. The amount of money being borrowed fell to as low as $81.1 billion in early May before beginning to rise again.
The level of borrowing was just $15 billion before the recent bank failures.
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