Abstract

http://ssrn.com/abstract=2429710
 
 

Citations (1)



 


 



The Federal Reserve's Discount Window and TAF Programs: 'Pushing on a String?'


Allen N. Berger


University of South Carolina - Darla Moore School of Business; Wharton Financial Institutions Center; European Banking Center

Lamont K. Black


DePaul University - Driehaus College of Business; Center for Financial Services

Christa H. S. Bouwman


Texas A&M University; Wharton Financial Institutions Center

Jennifer Dlugosz


Washington University in Saint Louis - John M. Olin Business School

October 28, 2015


Abstract:     
The Federal Reserve injected unprecedented liquidity into banks during the recent financial crisis using the discount window and Term Auction Facility. We examine these facilities’ use and effectiveness and have three main findings. First, small bank users were generally weak, large bank users were not. Second, the funds were weak substitutes to other funding sources. Third, these facilities increased aggregate lending, enhancing lending at expanding banks and reducing decline at contracting banks. Small banks increased small business lending, while large banks enhanced large business lending. Loan quality only improved at small banks, while both left loan contract terms unchanged.

Number of Pages in PDF File: 72

Keywords: Banks, Discount Window, Term Auction Facility, Central Bank, Lending

JEL Classification: G21, G28, E58


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Date posted: April 28, 2014 ; Last revised: October 30, 2015

Suggested Citation

Berger, Allen N. and Black, Lamont K. and Bouwman, Christa H. S. and Dlugosz, Jennifer, The Federal Reserve's Discount Window and TAF Programs: 'Pushing on a String?' (October 28, 2015). Available at SSRN: http://ssrn.com/abstract=2429710 or http://dx.doi.org/10.2139/ssrn.2429710

Contact Information

Allen N. Berger
University of South Carolina - Darla Moore School of Business ( email )
1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States
803-576-8440 (Phone)
803-777-6876 (Fax)
Wharton Financial Institutions Center
Philadelphia, PA 19104-6367
United States

European Banking Center
P.O. Box 90153
Tilburg, 5000 LE
Netherlands
Lamont K. Black
DePaul University - Driehaus College of Business ( email )
1 East Jackson Blvd.
Chicago, IL 60604-2287
United States
312-362-5617 (Phone)
312-362-6566 (Fax)
HOME PAGE: http://driehaus.depaul.edu/faculty-and-staff/faculty/Pages/black-lamont.aspx
Center for Financial Services
1 East Jackson Blvd.
Chicago, IL 60604-2287
United States
HOME PAGE: http://driehaus.depaul.edu/about/centers-and-institutes/center-for-financial-services/Pages/default.
Christa H. S. Bouwman (Contact Author)
Texas A&M University ( email )
360H Wehner
College Station, TX 77843-4218
United States
979-845-3514 (Phone)
979-845-3514 (Fax)
HOME PAGE: http://people.tamu.edu/~cbouwman/

Wharton Financial Institutions Center
2306 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104
United States

Jennifer Dlugosz
Washington University in Saint Louis - John M. Olin Business School ( email )
One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
Feedback to SSRN


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