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The Federal Reserve Bank of Cleveland's Credit Risk
Management function consists of the Discount Window,
Payment System Risk, and Reserves Management operations.
The Credit Risk Management staff is customer-oriented
and focused on meeting the needs of our customers and
stakeholders. We are efficient, flexible, and future-focused
with the unique ability to efficiently assimilate and
employ vast amounts of information to better serve our
customers while effectively managing our Reserve Bank's
risk exposure.
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The Federal Reserve's lending at the discount window serves
two key functions:
1) It complements open market operations in managing the
reserves market day to day and in
implementing longer-term monetary policy goals.
2) It facilitates the balance sheet adjustments of individual
banks that face temporary,
unforeseen changes in their asset and liability structure.
The Fed's lending programs include short-term primary credit,
seasonal credit, and secondary credit for depository institutions
that do not qualify for primary credit. Most notably, primary
credit will be available for very short terms as a backup
source of liquidity to depository institutions that are in
generally sound financial condition in the judgement of the
Federal Reserve Bank.
The Reserve Bank extends credit in the form of an advance,
payable on demand, and secured by acceptable collateral. An
institution that expects to borrow must have on file with
their Reserve Bank the necessary authorizing resolutions and
agreements, as described in our Lending Operations Circular
10. A request for an advance may be made by an authorized
employee of the institution, as noted by title in the borrowing
resolutions (one or two may be designated) and identified
on a current signatures record.
The staff who administer the Discount Window assist
depository institutions in establishing borrowing relationships, ensure
appropriate collateral is in place, and extend credit to Fourth District
depository institutions. The Discount Window is administered in accordance
with Regulation A, the Federal Reserve Act (Section 10B), and Operating
Circular 10 - Lending.
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