Richmond Fed paper examines use of discount window
Facility not typically used in “life or death” scenarios, researchers find
The Federal Reserve’s discount window is not typically used in “life or death” scenarios and in most cases banks could find other means to deal with specific funding needs, a paper published by the Richmond Fed finds.
Huberto Ennis, Sara Ho and Elliot Tobin examine why banks used the facility from 2010 to 2017, a period of relative calm in financial markets. They cross-reference discount-window borrowing with banks’ financial statements and performance.
The facility provides a backstop source
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