WASHINGTON: The Federal Reserve has lent US banks nearly $12 billion under a new one-year lending program unveiled Sunday, as authorities moved to ease stress on the financial system after Silicon Valley Bank's collapse.
The total outstanding amount of all advances under the Bank Term Funding Program reached $11.9 billion by Wednesday, the US central bank announced in a statement on Thursday, reports AFP.
The new liquidity facility made additional funding available "to help assure banks have the ability to meet the needs of all their depositors," the statement read.
According to data made available Thursday, the Fed drew an additional $152 billion in short-term borrowing for banks from its standing loan window, the traditional liquidity backstop for lenders, a dramatic increase against the roughly $5 billion from the previous week.
And with the seizure of failed SVB and Signature Bank -- a second regional-size lender that collapsed at the weekend -- an additional $142.8 billion was poured into the bridge banks created by regulators for the two collapsed entities, pushing the Fed's balance sheet up by about $300 billion in the past week.
US authorities moved swiftly to protect depositors at SVB and Signature Bank as they saw "serious risk of contagion" that could have triggered runs on many banks, Treasury Secretary Janet Yellen told senators in Congress on Thursday.
In the days since SVB's failure, a number of regional lenders led by First Republic Bank have seen their share prices plummet on concerns about their long-term financial health.
The group said in a statement that their actions reflect "confidence in the country's banking system."