WASHINGTON Banks borrowed slightly more over the past week from the Federal Reserve's emergency lending program while Wall Street firms did not draw any loans for a second straight week.
The Fed reported Thursday that commercial banks averaged $17.70 billion in daily borrowing over the past week. That compared with a daily average of $17.37 billion in the previous week.
Investment houses, however, again did not take out any loans, possibly indicating that pressures on these institutions for short-term credit may be easing.
The Fed, in the broadest expansion of its lending powers, granted investment houses the privilege of getting direct loans from the Fed's emergency loan program back in March. That's when Fed Chairman Ben Bernanke and his colleagues were scrambling to calm turbulent financial markets worried about rising losses from billions of dollars of bad loans on home mortgages.
The action was taken after a run on Bear Stearns which pushed the country's fifth-largest investment bank to the brink of collapse. It was eventually taken over by JPMorgan Chase & Co. in a deal in which the Fed provided significant financial backing.
The Fed recently extended the privilege of borrowing by investment banks into 2009 as the central bank continues to try to calm financial markets that have been roiled by the most severe credit crunch in decades. Originally, the borrowing privilege was scheduled to last only until mid-September.
The Fed also has said that it will allow troubled mortgage giants Fannie Mae and Freddie Mac the privilege of borrowing from the central bank's emergency loan program. There was no indication in the report released Thursday that the two institutions had done so.
For the week ending Aug. 13, the $17.70 billion in average daily borrowings by commercial banks represented an increase of $329 million from the average for the week ending Aug. 6.