US banks borrow record $165 billion from the Fed in a week

American banks, worried about the situation amid the collapse of Silicon Valley Bank (SVB), borrowed a record $165 billion from the Federal Reserve from March 8 to March 15, the agency drew attention Bloomberg with reference to Fed statistics.

Banks borrowed about $152.8 billion in the form of a short-term loan for up to 90 days. The agency recalls that the previous record was set during the 2008 financial crisis. Banks borrowed about $111 billion from the Fed in a week.

Recall that Silicon Valley Bank filed for bankruptcy on March 10. It is the 16th largest bank in the US that has been focused on startups. Its bankruptcy was the largest since the 2008 crisis and the second largest in US history after Washington Mutual Bank.

Later, it was also closed due to systemic risks of Signature Bank. US President Joe Biden promised that the management of bankrupt banks would be fired and held accountable, and supervisory and regulatory measures against the banking sector would be tightened.

The six largest Wall Street banks have lost a total of nearly $165 billion in market capitalization since the start of the month. The triggers for investors to leave the shares of financial companies were concerns about the situation around the Swiss bank Credit Suisse and the collapse of Silicon Valley Bank (SVB).

Read more in the article “Investors have doubts in Wall Street.”

Erdni Kagaltynov