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Working Paper
The lender of last resort: lessons from the Fed’s first 100 years
Carlson, Mark A.; Wheelock, David C. (2012)
We review the responses of the Federal Reserve to financial crises over the past 100 years. The authors of the Federal Reserve Act in 1913 created an institution that they hoped would prevent banking panics from occurring. When this original framework did not prevent the banking panics of the 1930s, Congress amended the Act and gave the Federal Reserve considerably greater powers to respond to financial crises. Over the subsequent decades, the Federal Reserve responded more aggressively when it perceived that there were threats to financial stability and ultimately to economic activity. We ...
Working Papers , Paper 2012-056

Discussion Paper
Discount Window Stigma After the Global Financial Crisis
Armantier, Olivier; Cipriani, Marco; Sarkar, Asani (2025-01-17)
The rapidity of deposit outflows during the March 2023 banking run highlights the important role that the Federal Reserve’s discount window should play in strengthening financial stability. A lack of borrowing, however, has plagued the discount window for decades, likely due to banks’ concerns about stigma—that is, their unwillingness to borrow at the discount window because it may be viewed as a sign of financial weakness in the eyes of regulators and market participants. The discount window has been reformed several times to alleviate this problem. Although the presence of stigma ...
Liberty Street Economics , Paper 20250117

Report
Rediscounting under aggregate risk with moral hazard
Martin, Antoine; Chapman, James T. E. (2007)
In a 1999 paper, Freeman proposes a model in which discount window lending and open market operations have different outcomes - an important development because in most of the literature the results of these policy tools are indistinguishable. Freeman's conclusion that the central bank should absorb losses related to default to provide risk-sharing goes against the concern that central banks should limit their exposure to credit risk. We extend Freeman's model by introducing moral hazard. With moral hazard, the central bank should avoid absorbing losses, contrary to Freeman's argument. ...
Staff Reports , Paper 296

Conference Paper
Lessons of the past and prospects for the future in lender of last resort theory
Todd, Walker F. (1988)
Proceedings , Paper 215

Briefing
Who Borrows From the Discount Window in "Normal" Times?
Ennis, Huberto M. (2021-03)
New rules mandate the release of transaction-level data on loans at the Federal Reserve's discount window. This higher level of transparency has created an opportunity to learn more about the role of the discount window outside of crisis periods. These data show that larger and less liquid banks use the discount window more actively and that holdings of bank reserves are negatively correlated with discount window borrowing. Access to the discount window affects bank portfolio decisions, in particular holdings of reserves, in subtle ways.
Richmond Fed Economic Brief , Volume 21 , Issue 09

Conference Paper
Discount window borrowing and liquidity
Gilles, Christian; Labadie, Pamela; Coleman, Wilbur John (1993)
Proceedings , Paper 1, pt. 1

Journal Article
The Fed's Discount Window: An Overview of Recent Data
Ackon, Felix P.; Ennis, Huberto M. (2017-01)
From July 2010 until June 2015, the Federal Reserve made over 16,000 loans to financial institutions through the discount window. Recent regulations mandate the release of detailed information about individual loans two years after their occurrence. We study the newly available loan data and uncover the main patterns that broadly describe activity at the Fed's discount window in recent years.
Economic Quarterly , Issue Q1-Q4 , Pages 37-79

Journal Article
Recent developments in discount window policy
Clouse, James A. (1994-11)
Federal Reserve Bulletin , Issue Nov , Pages 965-977

Journal Article
Walter Bagehot, the discount window, and TAF
Thornton, Daniel L. (2008)
Lend freely at a high rate, on good collateral.
Economic Synopses

Journal Article
Extension of temporary seasonal adjustment program for agricultural banks
anonymous (1987-03)
Federal Reserve Bulletin , Issue Mar , Pages 210

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