Fed Modernizes Discount Window to Boost Treasury Market Resilience
Philip N. Jefferson, Federal Reserve Vice Chair, announced the modernization of the central bank's discount window to improve its effectiveness in supporting Treasury market resilience.
The updated system allows banks to access liquidity more easily and reduces pressure on them to sell Treasury securities during periods of stress, according to Jefferson.
More than 60% of discount-window loan requests had been submitted through the online platform Discount Window Direct as of September 22, when Jefferson spoke in New York.
The modernization effort combines business-process improvements, automation, and coordination with the Federal Home Loan Banks. The 12 Federal Reserve districts now use a common collateral framework, loan-valuation models, and processing technology, while accepting electronic signatures.