Proposed changes to Federal Reserve discount window operations As you probably know, the Board of Governors recently requested public comment on a proposal to revise the Federal Reserve’s discount window programs. Before I get into details, I’d like to emphasize that implementation of the proposal would not entail a change in the stance of monetary policy.
There is nothing in the proposal that would necessitate a change in the target for the federal funds rate or the level of interest rates more generally. The Board is proposing the establishment of a new type of discount window credit, to be called primary credit, which would replace adjustment credit, currently the Federal Reserve’s main lending program.