The Federal Reserve’s instant liquidity mechanism this Friday approved a record volume of loans to North American banking institutions in response to an apparent shortage of bank balances at the end of October.
The Permanent Replacement Service (SRP) of the Fed, the central bank of the United States, lent a total of 50.35 billion dollars (about 43.406 billion euros) to banks, the largest volume since the system was established in 2021 to provide fast credits secured by assets considered safe, such as Treasury bonds or mortgages.
The injections were approved in two distinct funding rounds, a first worth $30 billion and a second worth $20.35 billion, according to service data published on Friday by the New York Federal Reserve.
The record volume of quick loans occurred on the last day of the month, at a time when bank payments, settlements or obligations tend to skyrocket, and also after the Fed announced on Wednesday that, on December 1st, it will stop withdrawing money from the markets by putting an end to the quantitative adjustment program, aimed at cooling the economy.