Discount Window

Summary of Discount Window

The counter at a Federal Reserve bank or branch at which a member bank may present eligible instruments, such as banker's acceptances, for discount or re-discount; the acceptance of such instruments by the Federal Reserve increases lending power of the commercial bank that has offered the instruments. The discount process results in a loan by the Federal Reserve to the member bank against the collateral of the instruments offered.

(Main Author: William J. Miller)