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

Allen N. Berger, Lamont K. Black, Christa H. S. Bouwman and Jennifer Dlugosz
Additional contact information
Allen N. Berger: University of SC and University of PA
Lamont K. Black: DePaul University
Christa H. S. Bouwman: Case Western Reserve University and University of PA
Jennifer Dlugosz: Washington University in St Louis

Working Papers from University of Pennsylvania, Wharton School, Weiss Center

Abstract: The Federal Reserve injected unprecedented liquidity into banks during the crisis using the discount window and Term Auction Facility. We examine these facilities' use and effectiveness. We find: small bank users were generally weak, large bank users were not; the funds substituted to a limited degree for other funds; these facilities increased aggregate lending which would have decreased in their absence. The funds enhanced lending of expanding banks and reduced the decline at contracting banks. Small banks increased small-firm lending, while large banks enhanced large-firm lending. Loan quality only improved at small banks, while both left loan contract terms unchanged.

JEL-codes: E58 G21 G28 (search for similar items in EconPapers)
Date: 2014-04
New Economics Papers: this item is included in nep-ban, nep-cba, nep-ger, nep-mac and nep-mon
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:ecl:upafin:14-06

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