US banks reportedly borrowed a record $164.8 billion from the Federal Reserve over the past week to mitigate impacts from the fallout of the Silicon Valley Bank closure.
US media reported on Thursday that US banks borrowed a record $152.8 billion from the discount window over the past week, according to Fed Reserve data. The discount window is a liquidity backstop for banks.
In addition, US banks reportedly used $11.9 billion in new facility usage over the first three days of the banking crisis.
This new total is up from the $4.58 billion recorded a week prior to the fallout. The last all-time record reached $111 billion during the 2008 financial crisis.
On Friday, California regulators shut down Silicon Valley Bank, which became the largest US bank to collapse since the 2008 financial crisis.
The bank’s collapse is believed to be linked to the increase in interest rates issued by the Federal Reserve, causing the impairment of assets on the balance sheets of many financial institutions. On Sunday, the authorities also closed New York-based Signature Bank because of systemic risks, which was the third largest bank failure in US history.
US Treasury Secretary Janet Yellen previously mentioned that rising interest rates from the central bank to combat inflation have been the core issue for Silicon Valley Bank.
Federal Reserve rate hikes are killing regional banks and the housing market.