Discount window
BankingDefinition
Federal Reserve facility where banks can borrow short-term against eligible collateral at the discount rate. Usually a stigmatized last resort — borrowing signals distress.
March 2023 saw record discount window borrowing ($165B+) during the SVB regional bank panic. Fed also created a Bank Term Funding Program (BTFP) that lent against par value of underwater Treasuries — a creative emergency tool.
March 2023 saw record discount window borrowing ($165B+) during the SVB regional bank panic. Fed also created a Bank Term Funding Program (BTFP) that lent against par value of underwater Treasuries — a creative emergency tool.