Banks borrow more from Fed

Commercial banks borrowed slightly more, while investment firms drew less over the past week from the Federal Reserve's emergency lending programme.

The Fed report showed banks averaged $86.6 billion (Dh318bn) in daily borrowing over the week ending Wednesday. That was up from $86.3bn in average daily borrowing logged over the week that ended on December 24.

Investment firms drew $38.5bn over the past week. That compared with an average of $45.7bn the previous week. This category includes any loans that were made to the US and London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley and Merrill Lynch.

The Fed report also showed that its net holdings of "commercial paper" averaged $332.4bn over the week ending Wednesday, an increase of $6.6bn from the previous week. Under the first-of-its-kind programme started on October 27, the Fed is buying commercial paper – the crucial short-term debt that companies use to pay everyday expenses. The Fed has said about $1.3 trillion worth of commercial paper would qualify. The Fed's balance sheet has ballooned to $2.25trn, from just under $900bn in September, reflecting its many unconventional efforts to mend the financial system.

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