Credit Risk Management

Discount Window

The Discount Window plays a complementary role in monetary policy by functioning as a safety valve in reserve markets. The Window ensures basic stability of the payment system by supplying liquidity during times of systemic stress. By managing the reserves market day to day and implementing longer-term monetary policy goals, it complements open market operations. Additionally, the Window facilitates the balance sheet adjustments of individual banks that face temporary, unforeseen changes in their asset and liability structure.

Payment System Risk

The Payments System Risk staff of Cleveland supports the oversight of Fourth District institution's account activity in the following ways: by overseeing daylight overdraft activity, including authorizing available daylight overdraft borrowing capacity, reviewing daylight credit utilization levels, and counseling institutions regarding their use of credit; by overseeing overnight overdraft activity; by supporting institutions to understand the Federal Reserve account management automated tools and associated policy requirements; and by monitoring the financial health of Fourth District institutions and implements account controls in accordance with Bank and System policies.


The Credit Risk Management staff of Cleveland supports the oversight of Fourth District institution's reserves activity by overseeing daily reserves positioning, including reviewing reports and counseling depository institutions.