discount window

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Discount window

Facility provided by the Fed enabling member banks to borrow reserves against collateral in the form of government securities or other acceptable paper.

Discount Window

An agency from which member banks of the Federal Reserve can borrow funds. Banks borrow short-term funds at the discount rate from the discount window, and must provide collateral for the transaction. The idea behind the discount window is to provide liquidity to banks when they need it without making them too reliant upon it. The Federal Reserve accomplishes this by raising or lowering the discount rate: a low interest rate indicates that it is trying to promote growth by making liquidity easily available, and a high interest rate shows that the Fed is concerned about inflationary pressures on the economy and trying to reduce the amount of money in the economy. While the discount window provides services electronically now, the term comes from an actual bank where representatives of member banks used to go to borrow money from the Federal Reserve.

discount window

The lending facility of the Federal Reserve through which commercial banks borrow reserves. Federal Reserve policy toward supplying banks with reserves has a major effect on credit conditions and interest rates.
References in periodicals archive ?
Access to central banks' overnight discount windows normally satisfies this requirement.
A comparison of the old and new discount windows shows how those revisions enable--but don't guarantee--the required changes in borrower and lender behavior.
As a result, banks are discouraged and may choose not to borrow from discount windows even when they really need to borrow for urgent cases.
In the early stages of the crisis in the fall of 2007 as short-term funding was drying up, Fed officials encouraged banks to borrow from the discount windows at each regional Fed bank.
Some of the businesses, such as Discount Windows Inc.
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Discount Windows JFC is an FA Charter Standard Football Club with qualified coaches and, due to the success of the under 14's squad, the club is actively looking for experienced strong players from year nine (new term) to strengthen the squad ready for a future tour of Ireland and for this winter season.
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