Dec. 21 (Bloomberg) -- The Federal Reserve loaned $20 billion in 35-day funds at a rate of 4.67 percent in the second of four special auctions planned by the central bank to boost the amount of cash in the banking system.
The rate was higher than the 4.65 percent received at the initial auction two days ago. Financial institutions submitted $57.6644 billion in bids, resulting in a bid-to-cover ratio of 2.88, lower than the prior auction. There were 73 bidders, compared with 93 banks and securities firms earlier, the central bank said in a statement today.
There is still plenty of demand for these loans, but not as much as the first one. What does that mean? Well, the rate is not much less than the official discount rate so maybe the banks don't need the money that badly.