Financial institutions took billions in short-term loans this week from the Federal Reserve as the industry copes with a serious crisis of confidence and liquidity, the central bank reported Thursday.
Utilizing tools the Fed rolled out Sunday, banks looking for cash infusions borrowed $11.9 billion from the Bank Term Funding Program.
Under that facility, banks can take one-year loans under favorable terms in exchange for high-quality collateral. Most banks took the more traditional route, using the Fed's discount window under terms slightly less favorable, with borrowing totaling nearly $153 billion.
The discount window provides loans of up to just 90 days, while the BTFP term is for one year. However, the Fed eased conditions at the discount window to make it more attractive for borrowers in need of operating funds.Read more on cnbc.com