Monday, 11 February 2013

Discount Window Borrowings of U.S. Banks hit 5 year Low as Excess Reserves Remain High

Discount window borrowings for U.S. banks in January 2013 was USD 565 million, the lowest level since February 2008.

Of course, with more than USD 1.5 trillion in excess reserves there is little need for borrowings through the discount window.

The Fed has certainly succeeded in shoring up their banks, which is, after all, its primary task. At the end of 2007, cash as a percent of total assets for U.S. commercial banks was 3.0%. As of January 2013, the percentage was 13.6%. At the end of 2007, the equity to total asset ratio for the commercial banks was 10.4%. In January 2013 this ratio now stands at 11.4%.

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