Republic Bank of Chicago, Danversbank among Fed borrowers in Q1 '11
NEW YORK (Reuters) - Republic Bank of Chicago and Danversbank were among the largest borrowers from the Federal Reserve's emergency lending program in early 2011, according to data released on Friday.
But overall lending through the discount window in the first quarter of 2011 fell by more than half from the previous quarter, Fed data showed, suggesting banks saw less need for the kind of emergency funds that they tapped during the height of the financial crisis.
Republic Bank of Chicago RPUNCR.UL borrowed a total of $276 million across 10 loans during the first quarter of 2011, the Federal Reserve reported for the January through March period.
The bank wanted to make sure it had enough cash on hand for its clients in check-cashing services as tax refunds began rolling in, president and chief executive William H. Sperling said.
"We wanted to make sure we had enough cash for our customers," Sperling said, adding that the bank did not have liquidity problems.
"We did it just to make sure we weren't caught short," he added.
Sperling said the bank has used the discount window only in much smaller amounts since then to test their systems.
The discount window is the Fed's regular facility for providing emergency cash to banks in difficulty. In normal times it is rarely used, in part because banks fear the stigma of having sought emergency help from the central bank.
Lending ramped up as the financial crisis exploded but has since eased. Banks took a total of $1.6 billion in the first quarter of 2011, less than half the $3.7 billion in the last quarter of 2010.
Also near the top of the latest list was Danversbank in Massachusetts, with $210 million, which was bought by People's United Financial (PBCT.O) later in 2011.
People's United declined to comment.
The Fed began releasing the data earlier last year, albeit with a two-year lag, under the terms of the Dodd-Frank financial reform law. The central bank had lobbied to keep such lending figures private for fear it could create a stigma for emergency loans in the future.
The Fed data can be found at: here
(Reporting by Luciana Lopez; Editing by Chizu Nomiyama)