Philip N Jefferson: The Fed's discount window - 1990 to the present

Speech by Mr Philip N Jefferson, Vice Chair of the Board of Governors of the Federal Reserve System, at the Charlotte Economics Club, Charlotte, North Carolina, 9 October 2024.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you, Steve, for that kind introduction and for the opportunity to talk to this group today. 

Let me start by saying that I am saddened by the tragic loss of life, destruction, and damage resulting from Hurricane Helene in North Carolina, and throughout this region. My thoughts are with the people and communities affected. For our part, the Federal Reserve and other federal and state financial regulatory agencies are working with banks and credit unions in the affected area to help make sure they can continue to meet the financial services needs of their communities.

Yesterday I shared my historical perspective on the discount window at Davidson College. In 1913, when the Federal Reserve was established, the discount window was the main tool it used to provide the nation with a safer, more flexible, and more stable monetary and financial system. More than 110 years later, the discount window continues to play an important role in supporting the liquidity and stability of the banking system, and the effective implementation of monetary policy.

Today I would like to discuss with you how the discount window has evolved in the 21st century, including recent steps the Federal Reserve Board has taken to solicit feedback from the public on discount window operations. Before I address our most recent efforts, however, I will review some important episodes in discount window history that brought us to where we are today.