Federal Reserve Provides $300 Billion in Emergency Funds to Banks

Cash-short banks have borrowed about $300 billion from the Federal Reserve in the past week, with nearly half going to holding companies for two major banks that failed over the past week. The rest of the money was borrowed by banks seeking to raise cash, likely to pay off depositors who tried to withdraw their money. The Fed's lending programs enable financial institutions to post bonds as collateral and borrow against them, rather than having to sell them.