Week InReview: March 17, 2023

Borrowing backstop.

Banks borrowed a combined $164.8 billion from two Federal Reserve backstop facilities in the week ended March 15, in a sign of escalated funding strains in the aftermath of Silicon Valley Bank's failure. Federal Reserve data showed a record $152.85 billion was borrowed from the discount window, the traditional liquidity backstop for banks, in the week ended March 15 — way up from $4.58 billion the previous week. And a further $11.9 billion was borrowed from the Fed's new emergency backstop fund, launched Sunday. The credit highlights a banking system that is still fragile and dealing with deposit migration in the wake of the failures of SVB and Signature Bank. Elsewhere, the biggest US banks pledged $30 billion of deposits to rescue First Republic; and SVB is still hunting for a buyer.

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