WASHINGTON — By its third day of operation, a Federal Reserve Board program to buy unlimited amounts of commercial paper totaled $144.7 billion.
The program, called the Commercial Paper Funding Facility, was started Monday with the goal of unclogging the funding markets. The Fed is not disclosing the number or identities of the companies that sell their short-term debt to the facility.
The Fed's weekly summary of its balance sheet also showed borrowing through the discount window fell 9.4% during the past week, to $369.8 billion.
But borrowing by commercial banks set a new record, increasing 3%, to $110.7 billion. The previous high, reached a week earlier, was $107.5 billion. Lending to investment banks fell 22.4%, to $79.5 billion. No loans were made to weak commercial banks, and the remaining $16 million was distributed to institutions in rural or resort regions.
Most of the discount window loans — $185.1 billion — will mature within 15 days. Another $108.6 billion will come due in 16 to 90 days, and $10.2 billion is to be repaid in 91 days to one year. Finally, $65.848 billion comes due in one to five years.
All the loans made to the commercial paper facility are to be repaid within three months.
To accommodate the growing demand for liquidity from the Fed, the central bank continues to expand its balance sheet. Total assets grew 9.2% in the past week, to nearly $2 trillion.
The Fed also said lending against asset-backed commercial paper held by money market mutual funds fell 11% from a week earlier, to $96 billion.
American International Group Inc., the giant insurer, has borrowed $83.5 billion against the $123 billion pledged by the central bank.