As a result, market participants experienced significant liquidity dislocations, and the demand for reserves grew rapidly. The Federal Reserve accommodated the demand for reserves through a variety of means, the relative importance of which shifted through the week.
On Tuesday morning, shortly after the attacks, the Federal Reserve issued a press release stating that “the discount window is available to meet liquidity needs,” thus reassuring financial markets that the Federal Reserve System was functioning normally. Borrowing by depository institutions surged to a record $ billion by Wednesday.