US Banks Borrow More from Federal Reserve Program

The Federal Reserve, which is the US central bank, reported on Thursday a slight increase in the amount of emergency loans that commercial banks borrow from the agency in the past week, while at the same time, limiting their use of other incentive programs of the government.

According to the Fed Reserve, the daily emergency lending program used by banks in the past week has reached $22.6 billion. By the end of October 28, US banking systems have borrowed some $32 million worth of emergency funds.

The feds also said that despite the increase in the figures, it was far less than the numbers at the height of the recession, which has reached some $110 billion.It was also the first time that US banking system has increased its borrowing from the US central bank since the first week of September.

However, the department declined to name financial institutions that borrowed money from them. Officials said that these banks will have to pay .50 percent worth of interest for emergency and overnight loans.

Meanwhile, a Fed data showed that banks have slashed sharply their borrowings from a separate government program, designed to boost capability and availability of short-term financing to businesses and people. These short-term financing are usually used to pay salaries and supplies.