Subprime crisis not yet over

September 14, 2007 at 1:39 am | Posted in economy | Leave a comment

WASHINGTON – Banks increased their borrowing from the Federal Reserve this week, pushing the one-day level to the highest point since the day following the 2001 terrorist attacks.

The Fed reported Thursday that direct borrowing by commercial banks from the Fed totaled $7.15 billion in primary credit on Wednesday. That was the highest one-day total since the Fed loaned $45.5 billion on Sept. 12, 2001, the day following the terrorist attacks on New York and Washington.

The daily average borrowing from the Fed for the week ending Wednesday totaled $2.93 billion, an increase of $1.83 billion from the average for the previous week.

Treasury Secretary Henry Paulson, meeting with executives of the nation’s top mortgage companies on Wednesday, said that it would take some time before the turbulence that hit financial markets last month is resolved, especially as it relates to subprime mortgages

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