So, How Much Money Are Banks Borrowing Thanks To The Mortgage Meltdown?

Here’s a graph from the Federal Reserve Bank of St. Louis that shows, historically, how much money banks have borrowed from the Federal Reserve.

Series: BORROW, Total Borrowings of Depository Institutions from the Federal Reserve [Federal Reserve Bank of St. Louis via Digg]


Edit Your Comment

  1. snazz says:

    is this adjusted for inflation over the years? 1 billion dollars in 1920 was quite different than today.

  2. Nakko says:

    Is that a projected graph over to the right hand side? Or are banks literally borrowing more than a hundred and fifty billion dollars from the Fed??

  3. PsychicPsycho3 says:

    Regardless of inflation the point is clear.

    Is this for real real, though? It look almost fake…

  4. privateer says:

    There are no levels of borrowing anywhere close to what began in December, even within a recent, comparable period. Remarkable, if in fact accurate.

  5. slungsolow says:

    I think even with inflation taken into account the amounts from the past are no where near the current high.

  6. jtheletter says:

    Before all the posts arguing about inflation adjustment, alignment of the recession data, relation to GDP, etc let me just say that what is most important here is the TREND. This is a very new, very large change in our nation’s banking practices. We’re entering untested financial waters here. While it may not be clear what exactly the outcome will be, there is a strong chance that unkowns to the system could disrupt things badly. And there are many unknowns with the current global credit market and CDOs/CDSes. Many economists agree there is a realistic risk of a global depression as these derivatives unwind.

  7. SigmundTheSeaMonster says:

    What goes up…

  8. privateer says:
  9. lotusflwr says:

    Umm… seems pretty high at the end there. I shouldn’t have bought a house, I should have bought a bunker!

  10. ironchef says:

    holy bejeesus.

  11. Ein2015 says:

    Interesting read about the federal funds rate: []

  12. savvy999 says:

    The bigger question is, where is all the money they’re borrowing coming from? Is the Treasury simply printing more?

    In which case, hyper-inflation, here we come.

  13. Hawkins says:

    These are NOT projections, or extrapolations, or some other sort of cheese. The last data point is from June 2008.

    Here’s the raw data:

    This really is rather frightening.

  14. Carso says:

    I’m an economist. This is both accurate and probably about as dire as most people would assume that it is. A couple tips for the foreseeable future:

    1. Take your money out of small, regional banks and credit unions. Put it into large national or international banks with FDIC insurance. If you have more than $100k in a single financial institution, you need to start splitting it up among various institutions, and putting it into long-term jumbo CDs. Then again, if you have more than $100k, you probably already knew that.
    2. Pay down your debts. Interest rates in the US are going to go up to levels exceeding any in living memory. Think 50%+.

  15. mariospants says:

    Part of it comes from the eagerness of the government to loan money to a hugely overpopulated banking system. They’re giving the money to the wrong people, in my opinion.

  16. laserjobs says:

    It is like getting a cash advance on your credit card to pay the minimum balance.

  17. laserjobs says:

    @Carso: Seniors on fixed income will be the ones who have over the FDIC limits and be the most hurt by this debacle.

  18. nightmage61 says:

    Rough calculation based on 1927 price of a gallon of milk (.45cents) and comparing to what I am paying now ($3.50) that makes a roughly 12.8% inflation rate.

    So in 1920 dollars, 1 billion would = about 12.8 billion in today’s dollars. Thus the banks are massively out borrowing more then they ever did in the past.

  19. Lars says:

    @savvy999: Where is it that you suppose money is created? Money creation and regulation of supplies should only be handled by the federal government and not the private banking industry. Banks loan money under a fractional reserve system. They only have to possess 10% of the money they lend out. If our federal government creates money to serve a specified need, then it is not in and of itself inflationary. What private banks just pulled off on the other hand was extremely inflationary. To read more if you’re interested in this topic, visit the American Monetary Institutes website:


  20. hubris says:

    Not sure how much of a difference it makes, but if you look at the weekly borrowing, the numbers are way down: []

    Course, they’ve already borrowed all the money, so the damage is done.

  21. privateer says:

    @Carso: Are you saying that typical credit union accounts (say, under $10,000 balance) insured by the NCUA will not be safe?

  22. savvy999 says:

    @Lars: I know where money comes from, but the issue is (and what the graph is showing) is the unstable rate right now at which it is being produced/created (and then lent to the banks).

    The Treasury is writing checks to the banks that it itself cannot cash… unless it prints more money. Drastically increasing the money supply (fractionally or not) is hyperinflation. []

  23. Carso says:

    @privateer: In terms of what’s “safe” and “not safe”, it’s hard to explicitly say that the NCUA is less or more secure as an insurer than the FDIC. If I had to have my money in one or the other, I’d have it covered by the FDIC over the NCUA, but the choice is not necessarily cut and dry. It’s worth pointing out that in 70+ years since the FDIC was established, and in the 38+ years since the NCUA was established, no insured deposits have ever -not- returned 100 cents on the dollar – indicating a lengthy history of trust and security. But the times they are a-changing, as this graph highlights for us.

    For those of you confused by the FDIC rules regarding maximum quantity of insured deposits (savings, checking, and CD accounts) and the maximum quantity of IRA-type accounts, feel free to do some research. Here’s a site with some accurate (though poorly formatted) basic information.


  24. holocron says:

    Which makes the fact that they stopped publishing the M3 “Money Supply” data some many months ago.

    Makes one wonder why they did that.

  25. Carso says:

    Also, be aware that it is possible to have FDIC insure more than $100k in deposits (up to $50 million per individual, actually) using a system called CDARS. If you are in the category of individuals with large deposits that prefers to keep all their money in a single institution, I would strongly recommend retaining the services of a CFP or CPA in order to obtain CDARS status for your deposit.

  26. Orv says:

    @Carso: Hmm. But aren’t large banks like WaMu more likely to have taken on bad mortgage debt than smaller credit unions? I ask because I’m thinking of moving my money out of WaMu and into a credit union, because it seems likely WaMu will go under. I’m under the FDIC limit, so I’d be made whole, but I don’t want to have to wait eight weeks to get my money.

  27. ARP says:

    I’m not sure I understand. Why are the banks borrowing money from the federal government? The government should not provide these services as they are akin to entitlements. What rates are they getting? If they can get those rates, why can’t I? Aren’t we in the free market?


  28. Techguy1138 says:

    There is something wrong with the graphing software. If you switch to a log scale you see that the number while still huge is somewhere between 5-10 billion dollars.


    So this really isn’t that bad. 150 billion would jump the inflation rate overnight. 5-10 billion not so much.

  29. Techguy1138 says:

    @Techguy1138: Well that link didn’t work. Just click on the log option on that graph to see what is going on.

  30. Orv says:

    @Techguy1138: Yes, but the scale changes to “natural log of billions of dollars.” ln(150)=5, roughly.

  31. ARP says:

    @Orv: THe unfortunate reality is that large banks are quite intentionally “fail-proof.”

    Meaning, they can act as stupid as they want, pay their executives as much as they want, invest in dumb things (sub-prime paper), etc. When the sh*t hits the fan, those free market capitalists who complain all day about “entitlements” and “personal responsibility” and “no government handouts,” will say “we can’t let them fail, it would destabilize our banking system” and give them billions of dollars, so they can do it all over again.

  32. Coelacanth says:

    Ehh, this may be a dumb question, but does these figures include investment banks which have recently been extended the privilege of borrowing against the Fed, or are these strictly traditional banks?

  33. Parapraxis says:


    goddammit, why are you asking so many difficult questions when there are terrorists out there who want to destroy our american way of living!

    Oh wait, we did that to ourselves? Shit.

  34. Techguy1138 says:

    @Orv: You are right.
    Reading is fundamental.
    That is just as bad as it looks.

  35. Lars says:

    @savvy999: My exact point is that the Treasury should be able to cash those checks it’s writing. That the Federal Government should alone have that power. The banks that sent out bad mortgages already created all this money and now the Federal Government is just backing the value of that credit. That is inflationary, but it was done by private banks (without good government oversight), not our government. The alternative is to have the whole system collapse, which is far worse than the inflationary effect. Of course, if we just do the sensible thing and stop letting private interests that are not democratically accountable creating money, we could avoid these problems all together.
    @holocron: You raise an excellent point. The lack of transparency on the part of the Fed is upsetting. The M3 statistics are likely unpublished now as they are provide good information to those unhappy with our current monetary policy. Ralph Nader and the AMI are both calling for the M3 to be published again.

  36. Carso says:

    @Orv: In truth, comparing the amount of “bad debt” banks currently have is one of the major factors rolled into ranking mechanisms, including CAMELS. I feel as though it would be inappropriate for me to comment on the reliability of any particular bank in a public forum, but please feel free to check out what the experts have to say for yourself:


    To answer your question more directly, credit unions are not immune from taking on bad debt, and in some cases would be more likely to do so than larger banks (like WaMu). Typically, in simulated pandemic bank failure scenarios, credit unions fail first.

  37. Orv says:

    @ARP: That didn’t stop IndyMac from failing.

    @Carso: Thanks, I’ll check out some of those tools before I make a decision. At least that way I won’t be in the dark.

  38. Hawkins says:


    Can I ask you to asplain something for me?

    You said:

    Pay down your debts. Interest rates in the US are going to go up to levels exceeding any in living memory. Think 50%+.

    I understand that if there are high interest rates, that new debt is bad. But what if I owe you $100,000 at 6 percent? That’s pretty good, for me, if prevailing rates are 20 percent. If I need to buy a car, maybe I can pay cash, instead of having to borrow, because I didn’t pay you off?

    And if there’s inflation, then isn’t debt GOOD? That $100,000 that I owe you is worth less and less, right? The more inflation, the more fucked YOU are (as the lender), yes?

    This isn’t a challenge. I’m just trying to figure this out.

  39. Orv says:

    @Hawkins: I think your math is good, but the trade off is that having debt limits your financial flexibility. If you pay off your debt, that’s one less obligation to meet should you lose your job.

  40. PirateFrankie says:

    Ok – everyone take a step back, breathe, and calm down. To show the increase in borrowing more accurately this data needs to be displayed as a semi-log graph, so this Fed graph would be more accurate. So, we’re still in rough shape, but nowhere near as bad as the posted graph makes it look. No need to stock the fallout shelter quite yet.
    The commenters over on Digg were having an ongoing debate for why this is important last time I checked.

  41. Carso says:

    @Hawkins: We’re moving into theory territory here, and I’m not sure it’s my place to start holding econ lectures on the Consumerist forums, so I will explain only briefly. The answer to your question is a complicated one, but it can be boiled down thusly:

    Inflation typically causes interest rates to increase. Having pre-existing debt is “good” for the debtor when inflation (and interest rates) start to go up. But having cash on hand is also “good” for the investor when interest rates go up. So while it feels like it’s easier to make your mortgage payments in an inflationary economy, it should also feel like you’re not making as much money as your neighbor who took his $100k and put it into high-yield CDs when interest rates shot up. The next effect on you (the mortgage payee) would be no change in your perception of your actual wealth.

  42. nequam says:

    @jtheletter: I don’t see a trend. I see a vertical line.

  43. Ein2015 says:

    Another useful link: []

  44. thomas_callahan says:

    Notes from the “raw data” link posted above:

    “Data from 2003-01-01 to 2007-11-01 include primary, secondary, and seasonal credit. Data from 2007-12-01 to 2008-02-01 include primary, secondary, seasonal, and term auction credit. Data from 2008-03-01 forward include primary, secondary, seasonal credit, primary dealer credit facility, other credit extensions, and term auction credit.”

    So while that graph is pretty terrifying, it sounds like the two biggest jumps coincide with the reporting of additional data as well, so without those same figures for all time periods involved the comparison is not completely accurate. Here’s to hoping that those additions make up most of the massive jump. Please, someone, say that’s the case?

  45. jtheletter says:

    @nequam: Is that a statistics joke? Cut me some semantic slack. The line is not vertical and represents a number of months, it is not instantaneous. And if you look at a lot of the other graphs of various financial in our economy, normalized medium home prices, loan defaults, derivatives contracts, national deficit, national debt, etc then guess what you start to see? A TREND. All of these graphs are going exponential in the last few years. It should tell you something about what’s going on and how far from the norm we are right now.

  46. yaos says:

    Good job posting a graph without explaining it. They changed the way banks borrow money, which is why the numbers went up. Please stop posting FUD.

  47. milk says:

    @Carso: My freaking credit union wouldn’t even give me a $3500 loan using a car (whose KBB value was higher) as collateral. Brutal, man.

  48. Orv says:

    @yaos: Yes, they changed the way banks borrow money. That’s the point. They changed it so that they could hand out far more money than they ever have in the past. They lend this money at a discount, so what we have here is a huge expansion of a federal subsidy of the banking sector. This is an unprecedented change with consequences that are largely unknown.

  49. ARP says:

    @me and the sysop: It sucks, but I wouldn’t freak out. Banks are buttoned down really tight right now. My guess is that they loosen up their lending rules a bit after a few quarters.

  50. stinerman says:

    I remember in econ 101 our prof stated that borrowing from the fed usually didn’t happen too often and when it did, it wasn’t too much money.

    Looks like I need be reschooled.

  51. othertim says:

    Best image name ever.

  52. Grive says:

    @jtheletter: And you can’t make a good assessment of the trend without inflation-adjusted values.

  53. glorpy says:

    I’m definitely a novice, so economists can feel free to shoot me down, but some of the FRED graphs strike me as odd.

    The non-performing loan ratio was higher in 1988 than it is now. M2 has had linear growth since 1995. M1 has been more or less flat since 2005. MZM has seen exponential growth since 2004. And Real Disposable Personal Income has more or less trended upward for the past few years and when viewed historically, the graph is positively logarithmic.

    What gives?

  54. mac-phisto says:

    @Carso: i appreciate your comments – you seem well versed, but i can’t disagree with you more.
    1) i wouldn’t recommend locking up money – especially in long-term investments during record low rates (5-yr jumbos are what – in the 5% range right now?). if anything, in the event of a massive economic failure, i would think the smart move is to liquefy investments to insure short-term stability & move large cash assets into investments that could weather even a collapse of our monetary system – land, art, precious metals & jewels, etc.
    2) yes, a run exposes small bank/cus much more than large banks, but in terms of solvency, it is apparent that large banks are suffering much more than smaller, regional banks/cus (as others have pointed out, a large reason for the jump is TAF – these loans are almost exclusively for the top 100 banks in america).
    3) there is no real difference between FDIC & NCUA in terms of insurance (FDIC is a US government corporation, NCUA is a US government agency). both pledging to protect deposits puts the US on the hook & both have experience funding failed banks & cus, respectively.

    however, the big difference that does exist is that NCUA is BOTH an insurer AND a regulator of state & federal credit unions. even though FDIC recommendations are afforded considerable weight by regulating authorities, they have no real regulating power of their own.

    there’s different schools of thought on whether this is good or bad – some think NCUA’s dual role creates a conflict of interest while others believe their regulatory authority makes them more responsive to changes in the marketplace. i tend to lean towards the second argument there. i do not know of a single credit union currently in need of TAF funding to ensure their solvency. do you?

  55. mac-phisto says:

    @mac-phisto: & for full disclosure, i am not an economist. i’m whatever the credit union equivalent of a “banker” is (pretty much i just refer to myself as a banker). so, yes, there is possibly some bias in those paragraphs.

  56. Malorkus says:

    This is a relatively old graph and it’s very misleading. See here:


    Basically the quantity being graphed has been redefined recently and after taking this into account, nothing crazy has happened.

    The lesson: Don’t rely on random DIGG submissions to know what the hell they’re talking about.

  57. Malorkus says:

    To quote from the WSJ post linked above:

    Last December, the Fed concluded that open market operations weren’t providing relief to some quarters of the interbank funding market and introduced the TAF. Like open market operations, the TAF enabled the Fed to lend a predetermined amount of funds to the banking system, with the interest rate at which they were lent determined through an auction process. But like the discount window, the money was lent directly to banks rather than primary dealers, and against a wide range of collateral rather than just Treasurys and agency securities. The TAF didn’t add to the money supply because for each dollar lent through the TAF the Fed was careful to liquidate a dollar of its holdings of Treasury bills and bonds to keep its overall balance sheet unchanged. But because the TAF is essentially discount window credit, the Fed decided to classify it as borrowed reserves.

    As Michael Feroli of J.P. Morgan Chase explains, “Defining TAF funds as borrowed reserves is mostly a legal technicality that has allowed the Fed to be more creative in how they enter liquidity into the banking system. Economically, reserves created by repo operations (non-borrowed reserves) and those created by the TAF (borrowed reserves) are both funds lent by the Fed to the public against collateral.”

  58. mac-phisto says:

    @Malorkus: you know, some minor manipulation of your paragraph would also serve as an excellent explanation of how CDOs work. sooooo, what happens when the banks stop paying their mortgage again?

    methinks maybe this isn’t such a great idea after all…

  59. sonneillon says:

    That graph doesn’t show the 100 billion dollars the Fed had to use to bail out the savings and loan debacle of the 80s.

  60. dallasmay says:

    Boy I do not know much about economics. If you change the graph to be “Continuous rate of change” you get something like $3×10^21 borrowed. I’m sure that’s not right.

  61. u1itn0w2day says:

    Ironic that CNBC has been reminding us of Jim Cramer’s infamous rant the last week or so and he patted himself on the back the other night.

    I think he was ranting for the Fed to make rate adustment and borrowing changes-lower/easier.I think he blames the economy on the Fed not being liberal enough with the money.I personally would have let the market correct itself even with bankruptcies.

    I admit there was a lot of creative financing and shakey lending practices but it still comes down to some block head signing for a no money down 300K ARM making 30K year crying I can’t pay let me out.That and the flippers who created artificial desire and housing inflation.

    BUT it is still a reactionary counter move to poor lending practices and over eager consumers not dealing in reality.It just goes to show you how manipulated the economy is and the game it is to many so called experts

  62. I am not well versed in economics at all, but I was watching this:

    yesterday and it really simplified things and explains exactly how we were led to our current economic crisis and why we’re here.

    If someone has seen this already, or if they’ve just watched it now, is this video accurate? If so, man, that’s scary.

  63. steininger says:

    I’m not sure if anyone pointed this out or not. But failure of the Federal Reserve to act as a lender of last resort, or in other words loan a ton of money to the banks when in crisis, during the late 20’s early 30’s is the commonly accepted cause of the Great Depression. Most likely you were taught a different cause for the Great Depression in your high school and even college history classes, but talk to any economist and they will tell you that it was due to mismanagement by the Federal Reserve.

    The point in this being. The lack of a spike in that graph in the late 20’s was the cause of the Great Depression. So the current spike we see is actually the Federal Reserve acting in a responsible and prudent manner to the issues in our current economy.

  64. agency says:

    @mac-phisto: You’re more of an economist than Carso is. Just because somebody comes here and calls themselves an “economist” doesn’t mean they are one or have a clue as for what they’re talking about. About the FDIC as regulator: in certain cases it does regulate banks – ones that are state-chartered but not members of the Fed.

    @Carso: When somebody tells you you’re wrong about an average consumer’s decision as for what to do with loans if higher inflation is anticipated, it does not suddenly become a “theoretical economics” issue that only supposed smartasses like you could fathom; it’s still a topic in personal finance that has a logical, straightforward solution. Try attending some economics classes before thinking you could give a lecture on the subject. Your failure to recognize that inflation and bank interest rates are not as well correlated as may seem to an amateur makes me doubt your background in economics. If you don’t know what the heck you’re talking about, please STOP misleading people.

    Case in point: right now official inflation is at 5% and fed funds rate is 2%. A year and a half ago official inflation was about 2.5% and fed funds was 5.25%. Where’s your correlation? An inverse one in recent history if any. There will be no positive correlation whenever there is a stagflationary period and the fed prioritizes targeting growth with monetary policy rather than fighting inflation. So if you owe money under a fixed rate, say 8%, you know exactly what your real (inflation-adjusted) interest rate will be if inflation goes to say 12% (in this case, you’ll be making effectively 4% per year on the amount owed). You DON’T know how much you’ll be able to earn if you have cash ready to deposit in a CD after the inflation hits. It may be 10% or 2% depending on what the fed does, and may be positive or negative in real terms. If there’s strong inflation, it’s usually negative. Do you think it was as simple for the saver in the Weimar Republic to preserve his money’s worth as keeping his money in a CD? You’re a fool if you do. It’s as clear as the view off Machu Pichu that in a time of hyperinflation, the debtor wins and the creditor loses.

    Now as for your fallacious and idiotic advice to move money into large “FDIC insured” banks. The whole point of FDIC insurance is so the little guy doesn’t have to bother to check the financial condition of his bank. It should be evident that FDIC/NCUA should be more solvent than even the largest financial institution. That means deposits in banks large and small are all equally safe if covered by federal insurance. One’s only concern is then availability of deposits in case of failure. Observation of recent bank failures suggests this is not a problem – both with small banks where the deposits were instantly transferred to another bank and with a larger bank like IndyMac, where the FDIC started running the bank itself right away with little to no disruption to depositors. In fact, if anything, the FDIC would have less of a mess on their hands with a small bank failure rather than a mega-bank failure, so I personally think the FDIC transition would be smoother if anything for a small failed bank rather than a large one. Meanwhile, the dwindling pool of Americans who today actually have meaningful savings has a big problem: today’s average savings account yield no longer beats inflation the way it did just a year ago. For savers, this means it’s time to search the thousands of banks around the country for the one with some of the highest yields that still manages to preserve decent customer service. Not move all their savings to Bank of America where they’ll be lucky to earn a 1% yield if their deposits don’t lost in their system. I know of a federally insured financial institution that pays 7% on the first $25k deposited in an account with them; do you? I’ll give you a hint; it’s not Citibank, Chase, or Washington Mutual.

    Lastly, I don’t know why you’d say FDIC is more reliable than NCUA, but from your post, you effectively reveal that you don’t know why you think that way either.

    DISCLAIMER to all: I am not your financial adviser. The above information is intended as educational material only and is not tailored to the specific financial needs of any individual.

  65. agency says:

    @Carso: Oh, and in the offchance you do hold a position somehow related to economics, if you think that interest rates in the US are going to go to 50%+ anytime soon, I pity your stature among your colleagues.

  66. avantartist says:

    Would it be fair to say: The Fed loans to banks at a rate of 2.00% (+/-), then banks loan that money to the public at a rate of up to 33%?

    What would happen to the economy if the Fed offered a fixed rate consolidation loan to the public directly to pay off higher interest rate bank loans.

    It would seem to me as though it would indirectly provide capital for banks at 0% (when people paid off higher interest rate loans). At the same time reduce the burden of high minimum payments due to high interest rate loans for the public. Thus putting more money in the pockets of the people to stimulate the economy, verse putting more money in the pockets of the banking institutions who’s neglect and irresponsible practices led us to this economy.

  67. agency says:

    @avantartist: If you’re comparing the 2% or so the fed charges banks to what banks charge consumers, that would be anywhere from a 0% markup on promo credit card rates to a 300% markup on a 6% mortgage to a 1000+% markup on subprime credit cards. But we’d be comparing apples and oranges because the fed gives out loans collateralized by hard assets such as treasury bills, mortgages, and credit card debt. Further, banks need to post 2-3 times the market value of the riskier subprime debt per dollar they borrow from the fed. Thus, fed money is a leveraging and/or temporary liquidity tool, not an outright borrow. The outright borrow comes from depositors. The governement would not likely feel safe letting consumers borrow without collateral (although provisions similar to those on federal student loans assuring you can never discharge the debt through bankruptcy could help). Consumers in trouble do not need to leverage themseves the way banks do. The government could for example issue direct to consumer mortgages as a lender of last resort at stiffer terms than the private market to the qualified similar to the way the Department of Ed has stepped up as a lender of last resort for federal education consolidation loans now that the private market for these loans has collapsed. But such a program is essentially socialist, and it becomes an argument of whether the government would be more responsible than wre the banks.

  68. sirellyn says:

    @NigerianScammer: Ok I watched the movie and although I can agree with some of it, the methods they’d like to implement at the end would be terrible. For instance, they talk about how germany had to print money like no tomorrow to fund it’s debt, and how that lead to hyperinflation. Yet they want to support a bill that will allow the backing (and bailout) of all banks so people can keep their homes. Where do you think you’d get the money for that? Oh yes thats right, you’d have to print lots more money! Our hyperinflation is going to be bad enough already. There is NO WAY that should be done.

    People living in houses right now may think thats a better option, but everything else would grind to a standstill if that occurred. You would be better off trying to find a place to rent for now and then buying when you can later.

    Also save your money in commodities (maybe silver or gold, maybe wheat, oil, or whatever. I prefer non perishables personally.) Barter will always be accepted even when currency goes bust.

  69. @sirellyn:
    Alright gotcha.

  70. mikyrok says:

    I would like to point out that due to a change in the rules for borrowing money this is happening. Normally debt had to be repaid overnight, now banks can hold the money for 28 days. This leads to a much higher number as seen. Also more securities are accepted as collateral than ever before. So yes more borrowing is taking place, but just looking at a graph like this is HIGHLY misleading.