Publication: Discount window borrowing after 2003: the explicit reduction in implicit costs
Program
KU-Authors
KU Authors
Co-Authors
Publication Date
Language
Type
Embargo Status
Journal Title
Journal ISSN
Volume Title
Alternative Title
Abstract
In 2003, the Federal Reserve introduced primary credit as its main discount window lending program. This program replaced the adjustment credit program, which, subject to a number of restrictions, had generated a stigma associated with borrowing from the Federal Reserve. Lessening the stigma of borrowing was viewed as essential for reducing the reluctance to borrow from the Federal Reserve. We develop a structural model of daily borrowing. Using this model, we estimate the implicit cost associated with borrowing. Our results suggest that the stigma of borrowing is significantly reduced. (C) 2009 Elsevier B.V. All rights reserved.
Source
Publisher
Elsevier Science Bv
Subject
Business, Finance, Economics
Citation
Has Part
Source
Journal of Banking & Finance
Book Series Title
Edition
DOI
10.1016/j.jbankfin.2009.09.013