Fed’s discount window comes in from the cold

BTFP offers zero haircuts on collateral, but long-term usage is not recommended

Fed dollars

After years of inertia, the US Federal Reserve’s discount window has sprung to life following deposit flight at US regional banks, even with the creation of a new liquidity facility in direct response to the crisis.

In the week Silicon Valley Bank (SVB) collapsed, just $4.6 billion was drawn from the discount window, but borrowing in the following week soared to $153 billion (see chart). That was despite the establishment of the Fed’s Bank Term Funding Program (BTFP), which was specifically

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