Big Bank Borrowing Rebound Seen as Sign of Alarm on Reserves
- A declining trend in reversed in August, Fed data show
- Lenders ‘not comfortable’ with erosion in reserves: Citi
This article is for subscribers only.
An increase in US commercial banks’ borrowings suggests they’re uncomfortable losing any more reserves as depositors seek better returns elsewhere, according to Citigroup Inc.
After declines in June and July, the largest US banks increased their borrowing in August by 9%, or $70 billion, Federal Reserve data show. Concurrently, the Federal Home Loan Banks system, a general liquidity provider for banks, saw total debt outstanding rise to $1.249 trillion from $1.245 trillion in July.