For the Fed discount window, destigmatisation starts at home

US supervisors must change tack to encourage central bank liquidity utilisation, writes Bill Nelson

Banks’ willingness to use the Federal Reserve discount window – and to prepare for that usage – partly depends on what reaction they expect from supervisors. To judge from bankers’ own anecdotes, those expectations are not positive.

When asked recently about borrowing from the Federal Reserve’s discount window, a regional bank treasurer who grew up in Bulgaria said the window reminded her of government agencies from her youth – inefficient and unwelcoming. Betsy Duke, former Fed governor and