Discount Window

The Federal Reserve Bank of San Francisco discount window, our primary credit lending program, extends credit to depository institutions. It acts as a safety valve to relieve pressure in reserve markets, helping to alleviate temporary liquidity strains at the individual depository institution level. During times of systemic stress, the discount window also helps ensure basic stability of the payments system by supplying liquidity to the banking sector more generally. Liquidity is provided via collateralized, short-term loans to depository institutions through the primary credit lending program. Other lending programs include Secondary Credit and Seasonal Credit.

About the Discount Rate

The primary credit rate, also known as the discount rate, is the rate the Reserve Bank charges depository institutions to borrow. Each Reserve Bank’s board of directors establishes the rate, subject to the review and determination of the Board of Governors of the Federal Reserve System. See current and previous discount rates.

Borrowing From the Discount Window

In order to borrow from the discount window, an institution must have on file the necessary authorizing resolutions as well as an adequate amount of pre-approved eligible collateral.  For general information on the Federal Reserve’s credit and liquidity programs, please reference the Board of Governors’ Credit and Liquidity Programs and the Balance Sheet.

Collateral Pledging and Inspections

The Discount Window accepts a wide range of securities which can be pledged directly or through custodial accounts.  See collateral types and lending margins.

Loan collateral is generally pledged through the Borrower-in-Custody of collateral (BIC) program, subject to periodic inspections. 

Payment System Risk

Payment System Risk (PSR) policy addresses the risks that payment, clearing, settlement, and recording activities present to the financial system and to the Federal Reserve Banks. In adopting the PSR policy, the Board’s objectives are to foster the safety and efficiency of payment, clearing, settlement, and recording systems (collectively known as financial market infrastructures (FMIs)) and to promote financial stability more broadly.

The Board expects financial system participants will reduce and control settlement and other systemic risks arising in FMIs, consistent with the smooth operation of the financial system. Guidelines for account management are available.

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Discount Rate