Fed's Barr Suggests Banks Should Rely on Discount Window for Liquidity Solutions

Michael Barr, the Fed’s Vice Chair for Supervision, highlighted the discount window as essential for financial stability and monetary policy. Speaking at an ECB event, he urged banks to use this funding source regularly, not just in crises. His comments follow recent U.S. bank failures and a report recommending Federal Home Loan Banks to guide lenders to the Fed in severe stress. Barr reassured that using the discount window is a positive action and shouldn’t be seen negatively by banks or regulators.