Fed needs to fix discount window op risk – ECB official

Suggests the BTFP might have been unnecessary if existing US facility was more reliable

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Current and former central bank officials have called on the US Federal Reserve to fix operational issues around its discount window liquidity facility, following shortcomings exposed by last year’s regional banking crisis.

“We seem to have a market failure there – banks are either unwilling or unable to make use” of the discount window, said Luc Laeven, director-general of research at the European Central Bank: “The second part is very much the Fed’s job, it should be possible for banks to tap

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