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Discount Window Treatment May 2026

(2024): Explores why banks use the window outside of crises, noting that smaller banks with illiquid portfolios are the most frequent users.

Banks often choose to pay high premiums (e.g., 13–44 basis points above the DW rate) to borrow from private markets rather than use the Fed, simply to avoid appearing financially weak. discount window treatment

(2020): A Richmond Fed Economic Brief that explains how stigma undermines the Fed's role as the "lender of last resort". Quick Definition: The Discount Window Discount Window Stigma After the Global Financial Crisis (2024): Explores why banks use the window outside

Despite Fed efforts to encourage usage, the DW remains heavily stigmatized. discount window treatment

Olivier Armantier, Marco Cipriani, and Asani Sarkar

Federal Reserve Bank of New York Staff Report No. 1137 (Revised March 2026) Key Findings:

(2024): Explores why banks use the window outside of crises, noting that smaller banks with illiquid portfolios are the most frequent users.

Banks often choose to pay high premiums (e.g., 13–44 basis points above the DW rate) to borrow from private markets rather than use the Fed, simply to avoid appearing financially weak.

(2020): A Richmond Fed Economic Brief that explains how stigma undermines the Fed's role as the "lender of last resort". Quick Definition: The Discount Window Discount Window Stigma After the Global Financial Crisis

Despite Fed efforts to encourage usage, the DW remains heavily stigmatized.

Olivier Armantier, Marco Cipriani, and Asani Sarkar

Federal Reserve Bank of New York Staff Report No. 1137 (Revised March 2026) Key Findings: