“WASHINGTON (AP) — Banks borrowed more over the past week from the Federal Reserve’s emergency lending program, while Wall Street firms took a pass for the fifth week in a row.
A Fed report released Thursday said commercial banks averaged $18.98 billion in daily borrowing over the past week. That compared with a daily average of $18.47 billion in the previous week.
For the week ending Sept. 3, Wall Street firms didn’t take out any loans, the fifth straight period of no action. Their borrowing, however, averaged as high as $38.1 billion a day over the course of a week in early April.
Investment houses in March were given similar loan privileges as commercial banks after a run on Bear Stearns pushed what was the nation’s fifth-largest investment bank to the brink of bankruptcy. The situation raised fears that other Wall Street firms might be in jeopardy.
Bear Stearns was eventually taken over by JPMorgan Chase & Co. in a deal that involved the Fed’s financial backing.
The identities of commercial banks and investment houses that borrow are not released. Commercial banks and investment companies now pay 2.25 percent in interest for the loans.
In the broadest use of the central bank’s lending power since the 1930s, the Fed in March scrambled to avert a market meltdown by giving investment houses a place to go for emergency overnight loans. The Fed has since extended those loan privileges into next year.” (Read more from biz.yahoo.com)
My favorite part is that we taxpayers don’t get to know the identities of the institutions propped up by our largess. Abolish the fed. If rich NY finance types act reckless, let them go out of business.