Several weeks of reduced borrowing from the Federal Reserve Board's discount window were reversed in the past week as total lending reached $2.14 billion on Wednesday, up from $54 million a week earlier.
The vast majority of the loans — $2.108 billion — were distributed in the form of primary credit to healthy institutions. The surge was centered in the Federal Reserve Bank of New York's district, where borrowing reached $2.1 billion.
No loans were made in the form of secondary credit to weaker financial institutions. The remaining loans were seasonal credit, which supports banks in rural or resort regions.
Loans from the discount window most recently surpassed $1 billion on Nov. 7, when borrowing totaled $1.34 billion for the week. These totals still pale compared with the $7.152 billion that was reported on Sept. 12.
The surge came ahead of a meeting of the Federal Open Market Committee on Tuesday where policymakers will decide whether to keep trimming the rate for loans from the discount window. When the FOMC last met, on Oct. 31, it cut the discount rate by 25 basis points, to 5%.
