Discount Window Treatment -

Banks often choose to pay high premiums (e.g., 13–44 basis points above the DW rate) to borrow from private markets rather than use the Fed, simply to avoid appearing financially weak.

Federal Reserve Bank of New York Staff Report No. 1137 (Revised March 2026) Key Findings: discount window treatment

(2024): Explores why banks use the window outside of crises, noting that smaller banks with illiquid portfolios are the most frequent users. Banks often choose to pay high premiums (e

(2020): A Richmond Fed Economic Brief that explains how stigma undermines the Fed's role as the "lender of last resort". Quick Definition: The Discount Window Discount Window Stigma After the Global Financial Crisis discount window treatment