Discount window

Updated: Aug 20, 2021

Lending by district Federal Reserve Banks to US depository institutions. When the Federal Reserve System was introduced, the discount window was intended to be the principal instrument for central banking operations. This role is now played by open market operations but the discount window still features in monetary policy as a way of relieving liquidity strains in the banking system.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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