The federal bank regulatory agencies today released a statement encouraging banks to use the Federal Reserve’s “discount window” so that they can continue supporting households and businesses.
The discount window provides short-term loans to banks and plays an important role in supporting the liquidity and stability of the banking system. By providing ready access to funding, the discount window helps depository institutions manage their liquidity risks efficiently and avoid actions that have negative consequences for their customers. Thus, the discount window supports the smooth flow of credit to households and businesses.