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 ?
The Base Rate is the interest rate forming the foundation upon which the Discount Rates for repurchase transactions through the Discount Window are computed.
This is the origin of the "discount window" lending facility provided by the Federal Reserve Banks.
The Hong Kong Monetary Authority (HKMA) raised the base rate charged through its overnight discount window by 25 basis points to 2.25 per cent.
The Fed provides credit through the discount window using three different programs: primary credit, secondary credit, and seasonal credit.
Aurora, CO, December 13, 2014 --(PR.com)-- Discount Window Focus today announced the launch of www.discountwindowfocus.com as an informational portal that features educational resources on subjects such as property value benefits from shutters, shades and blinds, and many other helpful tips that can save you thousands of dollars in the Aurora Area.
assets, and has access to Hong Kong Monetary Authority's discount window
The central bank originally announced in September 2012 that it would set up the so-called discount window as a way of developing its monetary policy framework.
Analysts had widely expected the State Bank of Pakistan toraise its monetary policy rate - a rate at which banks borrowfrom it through its discount window - at some point this year inorder to tighten Pakistan's monetary supply.
The hike in discount rate would allow institutions to borrow money from the central bank, usually on a short-term basis to meet temporary shortages of liquidity caused by internal or external disruptions, on higher rates through its discount window.
I am sure of this because I remember asking a very young member if he had seen the "discount window." The joke was on me because he actually wanted to see the discount window.
At the height of the financial crisis in 2008, foreign banks, instead of American banks, were the biggest recipient of funds from the Federal Reserve discount window -- known as the lender of last resort.
Abu Dhabi -- The UAE central bank said that preparations to introduce a discount window were proceeding, though it declined to specify when the facility would be ready.