(Bloomberg) -- Two Federal Reserve leaders suggested the central bank should assess how readily its emergency lending facility is able to address liquidity...
-- Two Federal Reserve leaders suggested the central bank should assess how readily its emergency lending facility is able to address liquidity needs in the banking system .The facility, known as the discount window , has come under scrutiny following a banking crisis in 2023 that included the failures of Silicon Valley Bank and Signature Bank .
Bowman said some banks have encountered frictions accessing the discount window, which potentially exacerbated the stress they experienced. She said changes were needed to modernize discount window lending and payment services, such as updating the technology banks use to request loans.Earlier Thursday, Logan repeated a plea for all banks to sign up for the Fed’s emergency lending facility, noting that institutions need to continue to test their operational readiness.
Logan noted that more than 5,000 depository institutions have completed the necessary documentation to sign up for discount window access, and that $3 trillion in collateral has been pledged, up $1 trillion from last year.Logan also said the current federal deposit insurance limit may be too low, especially in the wake of the turmoil in the US banking system last year.
The gathering comes after officials at the central bank recently showed other US regulators a three-page document of possible changes to their bank-capital overhaul that could significantly lighten the load on Wall Street lenders. The revisions could alter key parts of the landmark proposal — including one that might have had a large effect on big banks with sizable trading businesses.
Silicon Valley Bank Michelle Bowman Dallas Fed Bloomberg Lorie Logan Federal Reserve Discount Window Banking System Logan
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