Fed's financial system support swells to record

NEW YORK (Reuters) - Liabilities on the U.S. Federal Reserve's balance sheet, stemming from its sundry rescue efforts for the financial system, rose to a record $2.295 trillion in the latest week, Federal Reserve data showed on Thursday.

Yet, U.S. banks' direct borrowing from the Federal Reserve at the discount window fell in the latest week, though was still at hefty levels with banks leaning heavily on the lender of last resort as the biggest credit crisis in more than half a century continued to dislocate lending markets.

Banks' overall borrowings averaged $212.53 billion per day in the week ended December 17, down from an average $240.59 billion per day the week before.

Net portfolio holdings of the Fed's Commercial Paper Funding Facility, which is buying three-month top-rated CP to free up this key area of short-term lending, rose to $318.84 billion as of December 17, from $312.41 billion on December 10.

Banks' primary credit discount window borrowings averaged $88.4 billion per day in the latest week, down from $90.16 billion in the previous week.

Primary dealer and other broker dealer borrowings were $47.34 billion as of December 17, versus $51.59 billion on December 10.

"Other credit extensions," reflecting loans to insurer AIG, were $41.55 billion as of December 17, down from $57.14 billion as of December 10.

The next release of this data series in the H.4.1. release, for the week ending December 24, will be published on December 29, the Fed said in a statement.

(Reporting by John Parry; Editing by Leslie Adler)