Series 7: 9.2.1.2.2. Modifying The Discount Rate

9.2.1.2.2. Modifying the Discount Rate

The Fed lends funds to banks and depository institutions directly from its lending facility, called the discount window, at a rate set by Federal Reserve banks and approved by the Board of Governors of the Federal Reserve System. This rate is called the discount rate. The discount rate is the interest rate the Federal Reserve charges banks to borrow money on a short