First, a bank may be reluctant to borrow from the discount window, worrying that such borrowing might come to light and lead market participants and other institutions to draw adverse inferences about the bank's financial condition. This so-called stigma problem may largely account for the extent to which discount window borrowing has generally remained at moderate levels in recent months.
Second, lending through the discount window can pose challenges for keeping the federal funds rate close to its target, especially during periods of financial market disruption.