Liquidity Support Dips For 8th Week, But BTFP Hits New Peak (1/2)

From our latest Fed Balance Sheet Tracker: Bank usage of Fed liquidity facilities saw an 8^th consecutive decline in the week to May 17, with a modest rise in takeup of the new Bank Term Funding Program offset by falls in discount window borrowing and “other” credit extensions.

• Recent "emergency" lending currently totals $305B (when excluding the Pandemic 13-3 Programs), down about $32B over the past 4 weeks. This is suggestive of acute banking sector pressures abating.
• The size of the Bank Term Funding Program hit a new peak of $87B, up $3.9B in the most recent week. This is not a particularly worrying development, with the steady rise more indicative of banks taking advantage of generous financing terms under the program rather than requiring emergency funding.
• Discount window borrowing was basically flat, with the amount outstanding now down to $9.0B ($300mln lower than the previous week), vs a peak of $153B.
• "Other credit extensions" - which is the line item for Fed lending to FDIC bridge bank entities for resolution purposes – continues to pull back from the First Republic Bank-related jump to a $228.2B peak earlier in May, now standing at $208.5B (down $4B on the week).
• Other categories – including FIMA foreign central bank repo takeup and foreign dollar swap line usage – remained flat.