Paralyzed debt markets force record borrowing from Fed

10/3/2008 | Reuters

U.S. banks broke records for borrowing from the Federal Reserve as interbank lending and commercial-paper markets dried up, leaving them nowhere else to turn. Banks' borrowing at the Fed's discount window averaged $367.8 billion a day in the week that ended Wednesday, nearly twice the rate of the previous week. "It tells you that the paralysis is massive," said Michael Feroli, an economist at JPMorgan Chase.

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