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.

Olivier Armantier, Marco Cipriani, and Asani Sarkar discount window treatment

Stigma surfaced eight months before the 2023 regional banking crisis and has not significantly subsided since. Other Key Research Papers Banks often choose to pay high premiums (e

Despite Fed efforts to encourage usage, the DW remains heavily stigmatized. (2024): Explores why banks use the window outside

(2024): Explores why banks use the window outside of crises, noting that smaller banks with illiquid portfolios are the most frequent users.

(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