The Joplin Globe, Joplin, MO

National News

November 13, 2009

<img src=" http://www.joplinglobeonline.com/images/zope/friday.gif" border=0> Banks borrow less from emergency Fed program

WASHINGTON (AP) — Banks borrowed slightly less from the Federal Reserve’s emergency lending program over the past week, and reduced their use of other credit programs designed to ease the financial crisis.

The Fed said Thursday that commercial banks averaged $20.8 billion in daily borrowing over the week that ended Wednesday. That’s down $1.81 billion from the week that ended Nov. 5, and far less than the $95.38 billion they borrowed a year ago at the height of the credit crisis.

The drop in borrowing followed a slight increase last week — the first since Sept. 2.

The identities of the financial institutions are not released. They pay just 0.50 percent in interest for the emergency, overnight loans.

Banks also cut their use of a separate program intended to boost the availability of short-term financing crucial for business operations like payroll and supplies. Loss of “commercial paper” financing was a central part of last year’s financial crisis.

Under the program, the Fed’s holdings of commercial paper averaged $14.4 billion for the week, a drop of $1.25 billion from the previous week. At its peak in late January, the Fed had almost $350 billion of commercial paper.

Down steeply was banks’ use of short-term loans from the Fed’s “term auction credit” facility, which averaged $109.46 billion — $29.79 billion less than the previous week.

The limited borrowing shows banks are having a slightly easier time getting short-term loans in private markets.

But the improvement hasn’t necessarily translated into better terms for businesses and individuals. For them, the flow of credit remains weak. That’s one reason Fed Chairman Ben Bernanke and other economists believe the nascent economic recovery will be slow.

Thursday’s report showed a very slight rise in the central bank’s purchases of mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac. Those holdings were valued at an average of $774.83 billion over the past week, up $373 million from the previous week.

The Fed said in September that it would wrap up its effort to buy $1.25 trillion of the securities by the end of March, rather than by the end of this year. The goal of the program is to drive down mortgage rates and prop up the housing market.

The Fed said last week, after a meeting of its governing board, that it will also reduce its buying of Fannie Mae and Freddie Mac securities to $175 billion from $200 billion. The central bank’s weekly balance sheet said it now holds $148.12 billion of those securities, $1.16 billion higher than the previous week.

The Fed’s purchasing programs have been credited with helping to force down mortgage rates.

Rates on 30-year home loans averaged 4.91 percent this week, down from 6.14 percent last year, according to mortgage company Freddie Mac. The rate was 4.98 percent last week.

Text Only
National News
  • nationalnews.jpg Hiring surges in January; jobless rate at 8.3 pct.

    In a long-awaited surge of hiring, companies added 243,000 jobs in January — across the economy, up and down the pay scale and far more than just about anyone expected. Unemployment fell to 8.3 percent, the lowest in three years.

    February 3, 2012 1 Photo

  • Obama pushes for veterans jobs programs

    In an effort to cut the unemployment rate among veterans, President Barack Obama is calling for a new conservation program that would put veterans to work rebuilding trails, roads and levees on public lands.

    February 3, 2012

  • AP sources: Taliban leader sent letter to Obama

    Current and former U.S. officials tell The Associated Press that reclusive Taliban leader Mullah Mohammed Omar wrote to President Barack Obama last year indicating an interest in talks key to ending the war in Afghanistan.

    February 3, 2012

  • Hackers intercept FBI, Scotland Yard call

    Trading jokes and swapping leads, investigators from the FBI and Scotland Yard spent the conference call strategizing about how to bring down the hacking collective known as Anonymous, responsible for a string of embarrassing attacks across the Internet.

    February 3, 2012

  • House panel moves to block high-speed rail for California

    A key House panel late Thursday gave the back of its hand to California’s embattled high-speed rail program.

    February 3, 2012

  • Bernanke defends Fed policies against GOP critics

    Ben Bernanke defended the Federal Reserve’s decision to hold interest rates at record-low levels for the next three years, during a contentious hearing before federal lawmakers.

    February 2, 2012

  • US Archives unveils Magna Carta after repairs

    A 715-year old copy of Magna Carta will soon return to public view at the National Archives after a conservation effort removed old patches and repaired weak spots in the English declaration of human rights that inspired the United States’ founding documents.

    February 2, 2012

  • Solution to crumbling roads, bridges elusive

    The nation’s crumbling roads, bridges and transit systems are at the point of hindering U.S. economic growth, but Congress is struggling to come up with a solution. The problems are numerous.

    February 2, 2012

  • nationalnews.jpg Groundhog wars: Rodents diverge on winter forecast

    Pennsylvania’s Punxsutawney Phil told people to prepare for six more weeks of winter on Thursday, making him the minority opinion among his groundhog brethren who seem to think that spring is coming early.

    February 2, 2012 1 Photo

  • Retailers deliver solid sales gains for January

    Americans were shopping in January, but not every store was feeling the love.

    February 2, 2012

Facebook
Poll

Will the state’s decision not to help fund individual storm shelters following the May 22 tornado keep you from building one?

Yes.
No.
     View Results
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Facebook
Poll

Will the state’s decision not to help fund individual storm shelters following the May 22 tornado keep you from building one?

Yes.
No.
     View Results
Twitter Updates
Follow us on twitter
Follow me on Twitter
NDN Video
Killer of Fla. Girl Found in Landfill Gets Life Army Orders Bradley Manning Court-martial Cancer Charity Revives Breast-screening Grants Heavy Snowstorm Hits Colorado On Its Way East 2nd Teacher From LA School Arrested on Sex Claim Prosecutors Close Armstrong Inquiry, No Charges Sights and Sounds: Football Fans Pour Into Indy Unemployment Rate Down to 8.3% Obama: Still Far Too Many Americans Need Jobs GOP: Jobs Numbers Welcome, Can Do Better Fla. Man Adopts Girlfriend in Legal Battle More Deaths As Egypt Clashes Continue Raw Video: Prince William in Falklands Egpyt Protesters Blame Police for Soccer Deaths 'Lucky' 9-Year-Old Receives 6-Organ Transplant Raw Video: Michelle Vs. Ellen in Pushup Contest First Person: Will Peyton Manning Stay in Indy? Egypt Shaken After Deadly Soccer Riot New Suits, New Starts for New York's Unemployed Hall of Famer Dorsett Speaks Out on NFL Injuries
House Ads