Central Banking

Fed overhauls collateral requirements for discount window

collateral

The Federal Reserve will introduce fresh minimum collateral requirements for loans made through its discount window on July 1 to better account for differences among assets pledged by depository institutions.

As part of the change, the Fed will scrap a policy, which has up until now dictated that the collateral value of loans deposited individually should be "greater than or equal to" that of comparable groups of loans deposited at Federal Reserve Banks.

The new collateral margins could make it

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