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MNI BRIEF: Lawmakers Debate Fed's Lender of Last Resort Role

(MNI) WASHINGTON
USCentral Bank NewsPolicy NewsHomepageFederal ReserveBriefStoryRegionNorth America

Lawmakers in the House of Representatives Thursday debated how to solve issues with the Fed's discount window and whether to adjust emergency lending practices, with some bipartisan criticism of Federal Home Loan Banks' emergency lending to banks.

"Going forward, I support efforts by President Biden's regulators to encourage the use of the Fed's discount window by banks that need liquidity. I also support FHFA's work to ensure Federal Home Loan Banks use their advances to support housing and community development instead of propping up failing banks," said House Financial Services Committee ranking member Maxine Waters, a Democrat from California. Lawmakers also debated limiting the Fed's lending powers in times of an emergency to small and medium-sized businesses. The Fed's discount window saw record use in March last year in the wake of the collapse of Silicon Valley Bank. (See: MNI INTERVIEW: Fed Should Mandate Readiness Of Discount Window)

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Lawmakers in the House of Representatives Thursday debated how to solve issues with the Fed's discount window and whether to adjust emergency lending practices, with some bipartisan criticism of Federal Home Loan Banks' emergency lending to banks.

"Going forward, I support efforts by President Biden's regulators to encourage the use of the Fed's discount window by banks that need liquidity. I also support FHFA's work to ensure Federal Home Loan Banks use their advances to support housing and community development instead of propping up failing banks," said House Financial Services Committee ranking member Maxine Waters, a Democrat from California. Lawmakers also debated limiting the Fed's lending powers in times of an emergency to small and medium-sized businesses. The Fed's discount window saw record use in March last year in the wake of the collapse of Silicon Valley Bank. (See: MNI INTERVIEW: Fed Should Mandate Readiness Of Discount Window)