March 19, 2020 / 9:24 PM / 19 days ago

Fed 'encouraged' by jump in bank discount window borrowing

WASHINGTON, March 19 (Reuters) - Bank borrowing from the Federal Reserve spiked to more than $28 billion this week after the central bank slashed the cost of loans and encouraged firms to use its discount window to funnel credit into the economy.

“The Federal Reserve Board is encouraged by the notable increase in discount window borrowing this week with banks demonstrating a willingness to use the discount window as a source of funding to support the flow of credit to households and businesses,” the Fed said in a statement released alongside data on bank borrowing for the week.

It was the largest amount taken from the discount window since October 2009, when the U.S. was still climbing out of the 2007 to 2009 recession. (Reporting by Howard Schneider Editing by Chris Reese)

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