Fed’s Barr Wants Banks Using Discount Window for Liquidity Needs

The Federal Reserve’s top bank watchdog wants lenders to be more comfortable turning to the central bank’s discount window.

Michael Barr, the Fed’s vice chair for supervision, touted the backstop as an important tool for financial stability and monetary policy. In prepared remarks for a European Central Bank event on Friday, he said the lenders should use the window in good times and bad.

“The ability to access funding at a predictable rate through the discount window should figure importantly into banks’ liquidity risk management plans under a range of scenarios,” he said.

Michael Barr, vice chair for supervision at the US Federal Reserve

Photographer: Al Drago/Bloomberg

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