Policy Note | Weekly Fed Report Still Drives Discount Window Stigma

As banking regulators work to destigmatize the Federal Reserve’s discount window—and fervently so since the 2023 banking crisis—they’ve pointed to several potentially fruitful policy routes. These have included supervisory improvements, regulatory changes, and operational enhancements by both the banks and the Fed. Left off the menu so far have been changes to the Fed’s weekly publications that reveal up-to-date discount window borrowing data by regional geography. Reforms following the Global Financial Crisis of 2007–2009 have made mandatory the disclosure of discount window borrowers on a two-year lag—higher transparency than previously when no disclosure was required. However, bigger banks, such as those that failed or otherwise came under severe market pressure in the Banking Crisis of 2023, remain at risk of their borrowing being disclosed on a weekly basis, despite Fed changes in its reporting in 2020 that were intended to address this risk. This article shows how these weekly Fed balance sheet publications, as structured, still reveal any individual large bank’s discount window borrowing in a particular geography. The pursuant risk of the market’s discovery of such discount window borrowing has further stigmatized discount window use, undermining policymakers’ other destigmatization efforts to encourage its use when appropriate.