Discount Window Loans Surge in Atlanta
ATLANTA -- Discount window borrowings at the Federal Reserve Bank of Atlanta surged by $130 million in the week that ended last Wednesday.
The jump suggested worsening liquidity problems at the district's troubled banks.
Loans outstanding at the Atlanta Fed's discount window reached $530 million, up from $400 million on Sept. 4 and $403 million on Aug. 28.
Both Southeast Banking Corp., Miami, and New Orleans-based Hibernia Corp. had previously acknowledged having borrowed from the Fed.
A Southeast spokesman declined to comment Friday. A spokesman for Hibernia could not be reached.
Southeast has classified its discount window borrowing as "extended credit," a term the Fed uses to denote long-term credit to banks suffering serious financial difficulties.
Federal regulators last week received bids from potential acquirers for a recapitalization of Southeast, which has assets of $11.3 billion.
Hibernia, with assets of $7.2 billion, has described its borrowing as short-term borrowing in the "overnight" or "adjustment credit" category.
Until Southeast began borrowing from the Atlanta Fed at the end of the July, the district's weekly discount window activity this year had tended to hover in a range between $4 million and $14 million.