Banks borrowed slightly less from the Federal Reserve's emergency lending program over the past week, but increased their use of other credit programs designed to ease the financial crisis.
The Fed said Thursday that commercial banks averaged $19.8 billion in daily borrowing over the week that ended Wednesday. That's down $1 billion from the week that ended Nov. 11, and $71.8 billion less than what they borrowed a year ago near the peak of the credit crisis.
Banks' use of the program has increased only once since Sept. 2. They pay just 0.50 percent interest for the emergency, overnight loans.
The identities of the financial institutions are not released.
Banks did increase their use of a separate program intended to boost the availability of short-term financing crucial for business operations like payroll and supplies. Loss of such so-called "commercial paper" financing was a central part of last year's financial crisis.
Under the program, the Fed's holdings of commercial paper averaged $15.1 billion, up $712 million from the previous week. At its peak in late January, the Fed held almost $350 billion worth of commercial paper.
Unchanged was banks' use of short-term loans from the Fed's "term auction credit" facility, which averaged $109.46 billion for the second week in a row after falling sharply the previous week. The limited borrowing shows banks are having a slightly easier time getting short-term loans in private markets.
But the improvement hasn't necessarily translated into better terms for businesses and individuals. For them, the flow of credit remains weak. That's one reason Fed Chairman Ben Bernanke and other economists believe the nascent economic recovery will be slow.
Thursday's report showed a steep rise in the central bank's purchases of mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac. Those holdings were valued at an average of $845.69 billion, up $70.87 billion over the previous week.
The Fed said in September that it would wrap up its effort to buy $1.25 trillion of the securities by the end of March, rather than by the end of this year. The goal of the program is to drive down mortgage rates and prop up the housing market.
Rates on 30-year home loans were at their lowest level since late May, averaging 4.83 percent this week, down from 6.04 percent last year, according to mortgage company Freddie Mac. The rate was 4.91 percent last week.
While the Fed said this month that it would reduce its buying of Fannie Mae and Freddie Mac securities to $175 billion from $200 billion, it increased buying this week. The central bank's weekly balance sheet said it now holds $151.74 billion of those securities, $3.62 billion higher than the previous week.