by Calculated Risk on 5/15/2008 06:30:00 PM

From Bloomberg: Fed's Direct Loans to Banks Climb to Record Level

The Federal Reserve's direct loans of cash to commercial banks climbed to the highest level on record in the past week, a sign of continued stress in financial markets that threatens to curtail credit for households and companies.

Funds provided through the so-called discount window for banks rose by $2.8 billion to a daily average of $14.4 billion in the week to May 14, the central bank said today in Washington. Separately, the Fed's loans to Wall Street bond dealers rose by $75 million to $16.6 billion.

The increase indicates financial firms' emergency needs for cash haven't receded.