WASHINGTON (AP) - Banks borrowed slightly more from the Federal Reserve's emergency lending program over the past week.
The Fed said Friday that commercial banks averaged $19.9 billion in daily borrowing over the week that ended Wednesday. That's up $139 million on average from the previous week. However, it is still $73.7 billion lower than the borrowing pace set a year ago at the peak of the financial credit crisis.
Banks' use of the program has been declining for the last several months, reflecting more stability in the banking system. Banks pay just 0.50 percent interest for the emergency, overnight loans.
The identities of financial institutions who make use of the Fed's emergency loan program are not released.
There was a slight decrease in the use of a separate program intended to boost the availability of short-term financing crucial for business operations like payroll and supplies. Loss of such so-called commercial paper financing was a central part of last year's financial crisis.
The Fed's holdings of commercial paper averaged $15 billion for the week ending on Wednesday. That was $72 million less on average than the Fed's holdings in the previous week. At its peak in late January, the Fed held almost $350 billion worth of commercial paper.
Banks' use of short-term loans from the Fed's "term auction credit" facility dropped to an average of $101 billion for the week, down by $8.4 billion on average from the previous week. Compared to a year ago at the height of the financial crisis, this type of bank borrowing is down by $305.5 billion.
The fact that banks are utilizing this emergency program at a sharply lower rate has not translated into increased flows of credit for businesses and individuals. For them, the flow of credit remains weak, one of the factors cited by economists who believe the recovery from the recession, the worst downturn since 1930, will be slow and halting.
The new report showed an increase in the central bank's purchases of mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac. Those holdings were valued at an average of $854.9 billion, up $9.2 billion from the previous week.