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Bank Borrowing From Federal Reserve Fell Last Week

US banks' direct borrowing from the Federal Reserve fell last week, although it remained at very high levels even as the U.S. central bank made its first foray into the commercial lending markets, Fed data showed.

The Fed's new facility has effectively replaced a paralyzed commercial paper market as a method of short-term funding for businesses.

Average daily borrowing at the discount window, which includes loans to banks, securities dealers, money market funds and insurer AIG , retreated to $388.8 billion in the latest week from $418.58 billion a week earlier.

The Fed's newly-minted commercial paper facility pumped an average of $40.8 billion in loans into the financial, recording $144.8 billion on Wednesday alone.

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