How Does the Fed’s Discount Window Work? : Planet Money : NPR

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WASHINGTON, DC - JANUARY 26, 2022: A view of the Marriner S. Eccles Federal Reserve Building in Washington, DC. After two days of meetings, Fed officials will announce their January monetary policy decision, which economists predict will likely lead to a rate hike. (Photo credit: Anna Moneymaker/Getty Images)

Anna Moneymaker/Getty Images

In the first half of March, three banks—Silicon Valley Bank, Signature Bank, and Silvergate—all experienced relatively typical runs and collapsed. This triggered some major stress in the banking sector. As a result, the Fed received many requests to use one of its oldest and most important tools to alleviate such problems: the discount window.

The discount window is like a safety net for banks. Lately, a lot of banks have needed it. So what is the discount window? Where did it come from? How does it work? And has it been as effective as it should be during the recent banking turmoil? In this episode, we take a look at the discount window.

Two big indicators: Inside the Fed, then and now

This episode was produced by Emma Peaslee, with assistance from Willa Rubin. Katherine Silva was in charge of planning. Sierra Juarez was in charge of fact-checking, and Sally Helm was in charge of editing. Jess Jiang was our acting executive producer.

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music: “Red Line“”Brooknon,” and”Loose groove“

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