MNI BRIEF: Fed Discount Window Use Eases By $22B In Mar 29 Wk

The Federal Reserve's discount window lending receded for the second straight week from previous record highs and its overall balance sheet shrank USD27.8 billion in the week to Wednesday as banks' emergency funding needs stabilized, according to data released Thursday.

Lending at the discount window fell to USD88.2 billion, down from USD110.2 billion last week and the record USD152.8 billion the prior week. Banks have borrowed USD64.4 billion from the Fed's Bank Term Funding Program, up from USD53.7 billion last week and USD11.9 billion the week to March 15. Loans outstanding to the bridge banks as of yesterday stood flat at USD180 billion.

(See: MNI INTERVIEW: Ex-FDIC Chair Downplays Bank Contagion Risk)

Reserve balances increased from the prior week by USD32 billion to USD3.40 trillion. Usage of the Fed's standing swap lines at just over half a billion was flat from the prior week, while usage of the Fed's foreign repo facility or FIMA declined by USD5 billion to USD55 billion. More than USD10 billion in mortgage-backed securities fell off the Fed's balance sheet in the week.