Banks further reduce borrowing from Fed’s emergency loan program as credit crunch eases

Banks once again cut emergency borrowing from Fed

WASHINGTON — Banks borrowed less from the Federal Reserve’s emergency lending program over the past week, providing more evidence that credit problems are easing.

The Fed says that banks averaged $6.77 billion in daily borrowing for the week that ended Wednesday. That was down from $7.21 billion in average borrowing for the previous weeks.

Banks have been reducing their use of the Fed’s emergency discount window as financial conditions have improved.