US banks borrow less from Fed in latest week - Fed

NEW YORK, Jan 8 (Reuters) - U.S. banks' direct borrowing from the Federal Reserve edged down to still hefty levels in the latest week, showing heavy reliance on the lender of last resort in the biggest credit crisis since the Great Depression, Fed data showed on Thursday.

Banks' overall borrowings averaged $185.80 billion per day in the week ended Jan. 7, down from an average $187.77 billion per day the week before.

Liabilities on the Fed's balance sheet incurred from its massive support lifelines to the financial system fell to $2.122 trillion on Jan. 7, from $2.249 trillion on Dec. 31.

Banks' primary credit discount window borrowings averaged $87.94 billion per day in the latest week, versus $86.55 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 $334.41 billion as of Jan. 7, versus $334.10 billion on Dec. 31. (Reporting by John Parry; Editing by James Dalgleish)