The Federal Reserve's Discount Window and TAF Programs: "Pushing on a String?"
Allen N. Berger,
Lamont K. Black,
Christa H. S. Bouwman and
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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
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)
New Economics Papers: this item is included in nep-ban, nep-cba, nep-ger, nep-mac and nep-mon
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