Items accepted at the donation box aka discount window

Discussion in 'Economics' started by Scribe, Aug 17, 2007.

  1. Scribe


    Acceptable collateral:

    # Obligations of the United States Treasury
    # Obligations of U.S. government agencies and government sponsored enterprises
    # Obligations of states or political subdivisions of the U.S.
    # Collateralized mortgage obligations
    # Asset-backed securities
    # Corporate bonds
    # Money market instruments
    # Residential real estate loans
    # Commercial, industrial, or agricultural loans
    # Commercial real estate loans
    # Consumer loans

    But if you read the fine print it looks like they only be able to borrow around 80 percent of the face value. I guess it buys them some time.

    Details for the curious:
  2. Is there a site where we can see the daily volume of discount window operations, or other summary statistics? I searched but did not find...

  3. Exactly, they still have to offload these mortgages to someone. The fact that CFC setup their credit facility in May further illustrates that they saw this no-bid event as a probable outcome. The second facet of this problem is sustainability of earnings for these underwriters/originators going forward.

    When I look at the situation it's almost as if the game of hot potato ended before they were ready to play.

  4. It will also be interesting to see who steps up to the discount window exposing their vulnerability to the healthy institutions.

  5. Does anyone know how much actually gets borrowed at the discount window?
  6. Of course not, do you think the Fed has even a shread of transparency ? How about the Bush admin in general ? Does anyone really know what is really going on in Wash, DC ?
    One word: BOGUS.
  7. Search and you will find. The Fed's weekly release of reserve balances contains the average daily balance of open market repos and discount window credit outstanding over the past week. It is released on Thursdays.

    For the last week, the average balance of primary credit, the only category affected by this rate cut, was $11 million dollars.

  8. 2ticks


    Taken from the FAQ's from

    9. Does the Federal Reserve share the list of depository institutions eligible for primary and secondary credit with bank regulators? Does the Federal Reserve share information about institutions' use of the discount window with bank regulators?

    As noted above, the Interagency Advisory on the Use of the Federal Reserve's Primary Credit Program in Effective Liquidity Management offsite link(July 23, 2003) encourages depository institutions to consider the discount window as part of their backup liquidity arrangements. The Federal Reserve will provide each federal regulator, at its request, a list showing which of the depository institutions supervised by that regulator have filed borrowing agreements and pledged collateral and thus are prepared to use the primary or secondary credit facilities as a backup source of short-term funds. The Federal Reserve does not routinely share information about institutions' borrowing with regulators. Regulators may, however, obtain information about an institution's borrowing history when they are investigating a potential supervisory problem.

    10. Does the Federal Reserve publish information about which depository institutions are allowed to borrow from the Discount Window at the primary credit rate?

    No. The Federal Reserve will not publish information regarding institutions' eligibility for primary or secondary credit.

    11. How does the Federal Reserve publish data on borrowings under the primary and secondary credit programs?

    Each week, the Board of Governors reports total borrowing under each lending program for the nation as a whole as well as the sum of borrowing under all programs for each Federal Reserve District. The Federal Reserve does not publish information about individual institution's borrowings.
  9. rcj


    Scribe, Sparohok, and 2ticks:

    thanks guys for the info/links. Its this kind of material that can be very helpful in getting a basic understanding of how the Fed works in markets/economy ... at least for me anyway.

    And, its these kinds of posts/threads which makes ET worth reading for me.

  10. Toro KMA

    Toro KMA


    Baseball cards
    Bre-X stock
    Confederate Bonds
    Czarist Russia obligations
    Argentinian bonds c1999
    Enron anything
    Bernie Ebbers checkbook stock
    Albanian ponzi scheme paper

    #10     Aug 17, 2007