What Is the Fed Discount Window? Why Do Banks Use It?: QuickTake

The traditional role of central banks is to be a lender of last resort, and the traditional means by which the US Federal Reserve provides this backstop to the financial system is through what’s known as the discount window. In the tumultuous week ending March 15, banks borrowed $152.85 billion through the discount window, up from $4.58 billion the week before. The previous record was $111 billion, a mark reached during the 2008 financial crisis. Here’s what to know.

1. What is the discount window and how does it work?

It’s the main direct lending facility provided by the Fed ...