Fed Lent $300-B To Bail Out Banks In A Week

Cash-short banks have borrowed about $300 billion from the Federal Reserve in the past week, the central bank announced, Christopher Rugaber reported for the Associated Press (AP).

Photo Insert: The Fed did not identify the banks that received the other half of the funding or say how many of them did so.

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.

The Fed did not identify the banks that received the other half of the funding or say how many of them did so. The holding companies for the two failed banks were set up by the Federal Deposit Insurance Corp. (FDIC), which has taken over both banks.

The money they borrowed was used to pay their uninsured depositors, with bonds owned by both banks posted as collateral.

The FDIC has guaranteed the repayment of the loans, the Fed said. The figures provide a first glimpse of the scale of the Fed’s assistance to the financial sector after the two banks collapsed this past weekend.

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