Bank borrowing from the Federal Reserve's new Bank Term Funding Program grew for the fourth consecutive week since launching March 13, while discount window borrowing continued to drop for the third consecutive week.

Fed data through April 5 showed Bank Term Funding Program (BTFP) borrowing grew by over $14 billion week over week to $79.02 billion, while discount window lending declined by more than $18 billion during that same period to $69.71 billion, maintaining the pattern from the last two weeks.

The BTFP was created in the wake of recent market turmoil following two bank failures that led to concerns about banks' liquidity. The program is intended to ease potential concerns by providing additional liquidity against banks' securities so they do not have to sell those quickly in times of stress.

Discount borrowing is the Fed's traditional lending backstop for eligible banks and offers a wide range of collateral. The newly formed BTFP offers loans of up to one year that allow financial institutions to use US Treasurys, agency debt, mortgage-backed securities and other assets as collateral, which will be valued at par.

The specific banks that have borrowed from the BTFP are unclear since the list of institutions will not be released until March 2025, one year after the program ends.

So far, at least one bank has disclosed its participation. PacWest Bancorp disclosed that as of March 20, it had borrowed $10.5 billion from the discount window and $2.1 billion from the BTFP.