Lesson+17+Discount+Window+Policies

Lesson+17+Discount+Window+Policies - Lesson 17-Discount...

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Lesson 17-Discount Window Policies and Section 13(3) of the Federal Reserve
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When Banks Borrow From The Discount Window Bank Reserves Increase Federal Reserve Banking System assets liabiliies assets liabiliies +Discount Loans +Reserves +Reserves +Due to Fed
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Eligible Collateral for Discount Window Advances 0-5 >5-10 >10 Bill/Notes/Bonds/Inflation Indexed 99% 97% 96% Zero Coupon, STRIPs 98% 96% 92% Bills/Notes/Bonds - U.S. Dollar Denominated 98% 96% 95% Zero Coupon - U.S. Dollar Denominated 97% 95% 91% Government Sponsored Enterprises Bills/Notes/Bonds 98% 96% 95% Corporate Bonds AAA rated - U.S. Dollar Denominated 97% 95% 94% BBB-AA rated - U.S. Dollar Denominated 95% 93% 92% Municipal Bonds U.S. Dollar Denominated 98% 96% 95% Asset Backed Securities AAA rated 98% 95% 83% BBB-AA rated 89% 86% 82% Collateralized Debt Obligations - AAA rated 92% 91% 90% Commercial Mortgage Backed Securities - AAA rated 97% 93% 92% Agency Backed Mortgages Pass Throughs 98% 96% 95% CMOs 98% 96% 90% Minimal Risk Rated 7 87% to 96% 87% Normal Risk Rated 8 63% to 95% 63% Commercial Real Estate Loans Minimal Risk Rated 7 78% to 96% 78% Normal Risk Rated 8 57% to 95% 57% Consumer Loans - Unsecured 60% to 96% 60% 76% to 96% 76% Consumer Loans - Credit Card Receivables 59% Consumer Loans - Subprime Credit Card Receivables 54% Student Loans 83% Collateral Category 2 Margins for Securities (as percentage of estimated fair market value) 3 Margins for Loans (as percentage of estimated fair market value) Duration Buckets Individually Deposited Loans 4, 5 Group Deposited Loans 4
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This note was uploaded on 03/23/2011 for the course ECONOMICS 220 taught by Professor Clare during the Spring '08 term at Rutgers.

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Lesson+17+Discount+Window+Policies - Lesson 17-Discount...

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