The Federal Reserve Board is seeking public feedback regarding operational practices for its discount window program, which provides short-term credit for banks and credit unions.
The agency said comments gathered in response to this request for information (RFI) process will be considered by the Fed and the nation’s Reserve Banks as they evaluate ways to improve the efficiency and ease of access to discount window and intraday credit.
“The discount window is an effective tool that plays an important role in supporting the liquidity and stability of the banking system,” the Fed said. “By providing ready access to funding against a wide range of collateral, it supports the smooth flow of credit to households and businesses. The Reserve Banks also provide intraday credit to eligible institutions, which supports the safety and soundness of the payments system. While the discount window continues to operate effectively, the board and Reserve Banks seek to be proactive to ensure that it remains effective and efficient as the banking system continues to evolve.”
The RFI is intended to assess specific discount window operational practices and processes, including:
- legal documentation collection;
- pledging and withdrawing collateral;
- requesting, receiving, and repaying discount window loans;
- extending intraday credit; and
- Reserve Bank communication
The comment period will be open for 90 days following the publication of the RFI in the Federal Register.