by Daniel Costello

NPR's Dina Temple-Raston just filed a report highlighting the Fed's news that banks are lining up to borrow from its emergency lending facility. Here's a brief run down:

The London Inter Bank Overnight Rate is the interest rate at which banks lend to each other. It is considered a good barometer of how much banks trust each other — and it has been on the rise for four days. Partly because of that banks and institutional firms are going to the Fed to get cash.

The central bank released a report Thursday showing commercial banks averaged $44.5 billion in daily borrowing over the past week — compared with a little over $39 billion the week before.

 

For the week ending Wednesday, investment firms drew almost $148 billion compared with just $88 billion the week before. Commercial banks often go to the Fed to get emergency loan privileges.

Back in March, the Fed scrambled to avoid a market meltdown by giving investment houses permission to do that too.

This is the broadest use of the central bank's lending power since the Great Depression, Temple-Raston says.