Emergency Bank Borrowing Continues To Fade (1/2)

From our Fed Balance Sheet Tracker (full PDF here): Bank usage of Fed liquidity facilities continues to fade from March’s peak, with the latest weekly data to May 3 showing a pullback in key Fed asset categories including the discount window. Indeed this was the 6th consecutive week of declines.

• The Bank Term Funding Program saw takeup fall by $5.5B last week to $75.8B, and this is now down from the $81.3B peak. That's in spite of some expectations upon its announced launch that the BTFP could expand considerably, into the trillions of dollars. And discount window borrowing dropped by $68.5B, with the amount outstanding now down to just $5.3B.
• "Other credit extensions" - which is the line item for Fed lending to FDIC bridge bank entities for resolution purposes - saw a $57.8B jump to a new high of $228.2B. But that was to be expected given the First Republic Bank resolution the previous weekend (which follows SVB and Signature), and “other credit extensions” will eventually be wound down.
• The fall in discount window borrowing and the rise in other credit extensions is related – First Republic was a major borrower from the discount window (it had borrowed $63.5B), and so this borrowing basically shifted from one category to another. First Republic had also borrowed $13.8B via the BTFP. “Other credit extensions” is now the bulk of recent "emergency" lending, which currently totals $310B (when excluding the Pandemic 13-3 Programs).
• With FIMA foreign central bank repo takeup having previously dropped to zero from as much as $60B in March, foreign dollar swap line usage minimal (and moved back to a weekly schedule vs daily during most of March), there isn't much sign of financial system duress from the perspective of the Fed's assets ledger.
• That could change in coming weeks given that regional bank share prices remain volatile, which could portend a renewed bout of weakness underneath the surface.