With sources of credit still largely frozen, banks borrowed a record amount from the Federal Reserve in the past week, according to Fed data released Thursday.
The Fed reported that commercial banks borrowed a record $111.9 billion a day, on average, from the Federal Reserve's emergency lending window over the past week. That's up $6.1 billion from the $105.8 billion they borrowed in the previous week.
"Banks literally have an open checkbook to acquire cheap liquidity," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Council. "Borrowing will continue until morale improves."
Investment banks, meanwhile, borrowed $87.4 billion a day, on average, down $23.9 billion from $111.3 billion a week ago. Some analysts believe that investment banks are borrowing less as the federal government gears up its program to invest up to $250 billion in banks.
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