SAN FRANCISCO (MarketWatch) -- U.S. banking giants Citigroup Inc., J.P. Morgan Chase, Bank of America and Wachovia Corp. said on Wednesday that they borrowed $2 billion from the Federal Reserve as part of a new program set up last week to pump cash into the creaking financial system.

Citibank, a unit of Citigroup (CCitigroup, Inc) , said it took out a $500 million, 30-day loan from the New York Fed's discount window program for its clients. The company didn't identify those clients.  "Citibank stands ready to continue to access the discount window as client needs and market conditions warrant," the bank said in a statement. "Citi is pleased to inject liquidity into the financial system during times of market stress and to support creditworthy clients."

Citibank noted it has substantial liquidity and widespread borrowing capacity, along with an AAA rating from Moody's Investors Service and an AA rating from Standard & Poor's.

J.P. Morgan (JPM), Bank of America (BAC) and Wachovia (WB) said in a joint statement that they each borrowed $500 million, including some on a term basis, at the discount window.

"It is important at this time to take a leadership role in demonstrating the potential value of the Fed's primary credit facility and to encourage its use by other financial institutions," the banks said. "The Federal Reserve Board has made clear that it considers the appropriate use of the discount window a sign of strength." 

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By Alistair Barr, MarketWatch

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