The Speed of Discount Window Lending: A Look Back at 1985
Rose, Jonathan D. (2024-05-23)
The 1985 thrift crises in Ohio and Maryland show how the Fed, as a lender of last resort, took proactive steps to enhance the effectiveness of its discount window.
On the Economy

Discussion Paper
Can Discount Window Stigma Be Cured?
Armantier, Olivier (2024-05-31)
One of the core responsibilities of central banks is to act as “lender of last resort” to the financial system. In the U.S., the Federal Reserve has been operating as a lender of last resort through its “discount window” (DW) for more than a century. Historically, however, the DW has been plagued by stigma—banks’ reluctance to use the DW, even for benign reasons, out of concerns that it could be interpreted as a sign of financial weakness. In this post, we report on new research showing that once a DW facility is stigmatized, removing that stigma is difficult.
Liberty Street Economics , Paper 20240531

Journal Article
Federal Reserve: Central Bank Lending Lessons from the 2023 Bank Crisis
Sablik, Timothy (2024-08-13)
In the spring of 2023, a pair of fast-moving bank runs threatened to spark a widespread financial panic. On March 9, the 16th largest bank in the country, Silicon Valley Bank (SVB) in Santa Clara, Calif., lost a quarter of its deposits in a single day. It was set to lose another 62 percent of deposits the following day before it was closed by regulators. On March 10, New York-based Signature Bank experienced a similarly rapid flight of 20 percent of its deposits. It was closed by regulators on March 12.
Econ Focus , Volume 24 , Issue 3Q , Pages 4-7

Report
Discount Window Stigma After the Global Financial Crisis
Armantier, Olivier; Cipriani, Marco; Sarkar, Asani (2024-11-01)
We study Discount Window (DW) stigma, the reluctance to access the Federal Reserve’s lender-of-last resort facility, between 2014 and 2024. Despite increased usage since 2020, we find conclusive evidence that the DW is stigmatized, especially among smaller banks and when financial markets experience disruptions. In particular, evidence of DW stigma emerged months before the 2023 banking turmoil and had not subsided a year later. We also identify new determinants and consequences of DW stigma. The implications of these results for the provision of emergency liquidity are discussed.
Staff Reports , Paper 1137