Top Banks Borrow $2B From Fed

Bid to encourage other banks to borrow to shore up credit markets

(Newser) – America's biggest banks—Citigroup, Bank of America, J.P.Morgan Chase and Wachovia— have borrowed a total of $2 billion from the Federal Reserve at the government's so-called discount window. It's an attempt to shore up the faltering credit markets by encouraging smaller banks to borrow from the Fed without stigma, the Wall Street Journal reports.

Deutsche Bank also borrowed from the discount window because it's "important to support the Fed's efforts and the market overall," said a bank statement. All the institutions have substantial liquidity and other funding sources. The Fed cut the interest rate it charges for discount window loans to 5.75% last week. (Read more Federal Reserve stories.)

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