In The United States
In the United States, there are actually several different rates charged to institutions borrowing at the Discount Window. In 2006, these were: the primary credit rate (the most common), the secondary credit rate (for banks that are less financially sound), and the seasonal credit rate. The Federal Reserve does not publish information regarding institutions' eligibility for primary or secondary credit. Primary and secondary credit is normally offered on a secured overnight basis, while seasonal credit is extended up to nine months. The primary credit is normally set 100 basis points (or bp) above the federal funds target and the secondary credit rate is set 50 bp above the primary rate. The seasonal credit rate is set from an averaging of the effective fed funds rate and 90-day certificate of deposit rates.
Institutions must provide acceptable collateral to secure the loan.
Read more about this topic: Discount Window
Famous quotes containing the words united states, united and/or states:
“... the yearly expenses of the existing religious system ... exceed in these United States twenty millions of dollars. Twenty millions! For teaching what? Things unseen and causes unknown!... Twenty millions would more than suffice to make us wise; and alas! do they not more than suffice to make us foolish?”
—Frances Wright (1795–1852)
“It is a curious thing to be a woman in the Caribbean after you have been a woman in these United States.”
—Zora Neale Hurston (1891–1960)
“The one who first states a case seems right, until the other comes and cross-examines.”
—Bible: Hebrew, Proverbs 18:17.