Discount window

discount window investment & finance definition
A Federal Reserve Bank's lending facility through which a bank may borrow funds.

Discount window
A figurative expression referring to the Federal Reserve facility for extending credit directly to eligible depository institutions (banks and thrift institutions with transaction accounts or nonpersonal time deposits).

Discount Window Federal Reserve mechanism for making direct loans to financial institutions with deficiencies in their reserve accounts. The institutions borrow funds at the discount rate, which is established by the Federal Reserve Bank.

Discount Window: Facility provided by the Fed which enables banks to borrow at the discount rate.
Disintermediation: The placement of funds directly into securities rather than into a bank or thrift (which acts as an intermediary).

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

Banks hold no more than they are legally required to do, and with any and all cash surplus then lent to other Banks in times of need, usually underneath the Fed Funds rate (Discount Window), it puts additional and unwanted pressure on the system.

the interest rates tied to the cost of money,
the rise in inflation,
the money supply,
reserve requirements over banks,
and discount window lending to commercial banks ...

The new rules permit these institutions to access the Fed's discount window in perpetuity, to build out a nationwide bank network with FDIC-backed deposit accounts, ...

Other methods used include adjusting reserve requirement ratios and changing the terms and conditions for borrowing at the discount window.

See also: Discount, Window, Market, Federal Reserve, Deposit