Stresses continue to linger in the U.S. financial sector following a series of bank failures last month as banks have ramped up their borrowing from the Federal Reserve’s emergency lending facilities for the first time since the immediate aftermath of the spectacular collapse of Silicon Valley Bank (SVB) on March 10.
Usage of the Fed’s emergency backstop for banks exploded to nearly $165 billion in the first week following thenfailure of SVB as banks sought to ensure ample liquidity to meet the demands of worried depositors rushing to withdraw their savings.
As the situation stabilized and deposit outflow pressures waned, emergency bank borrowing then steadily declined for four straight weeks, to around $139 billion in the week ended April 13. But in the latest week of available data (April 20), the falling trend has reversed, and borrowing notched an uptick, to nearly $144 billion….