US banks' direct borrowings fall in week

NEW YORK, July 9 (Reuters) - U.S. banks and financial companies borrowed less from the Federal Reserve's discount window in the latest week, data showed on Thursday.

Banks' overall borrowings averaged $116.37 billion per day in the week ended July 8, down from an average $118.88 billion per day the previous week.

The Federal Reserve's balance sheet -- a broad gauge of the central bank's lending to the financial system -- fell to $1.977 trillion on Wednesday from $1.989 trillion a week ago.

Banks' primary credit discount window borrowings averaged $34.97 billion per day in the latest week, down from $35.91 billion the previous week.

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, were $112.89 billion on Wednesday, down from $114.69 billion on July 1.

The Fed's holdings of agency mortgage-backed securities rose slightly to $462.45 billion on July 8 from $462.44 billion on July 1.

The Fed's liquidity swap lines with foreign central banks averaged $109.44 billion per day in the latest week, down from $115.30 billion per day in the prior week, according to Fed data.

The Fed's Term Asset-Backed Securities Loan Facility (TALF) on July 8 was $24.87 billion, down from $25.02 billion the previous week.

Fed holdings of U.S. Treasuries totaled $673.50 billion on July 8, up from $663.47 billion on July 1. (Reporting by Chris Reese: Editing by Chizu Nomiyama)