Finance
US Prepares Rule Forcing Banks to Tap Fed Discount Window
- OCC chief says his agency, Fed and FDIC are crafting plan
- Michael Hsu says idea is to create a ‘fire drill’ for trouble
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US regulators are preparing to introduce a plan to require that banks tap the Federal Reserve’s discount window at least once a year to reduce the stigma and ensure lenders are ready for troubled times.
The proposal, which is being drafted behind closed doors by the Office of the Comptroller of the Currency, Fed and Federal Deposit Insurance Corp., is the latest response to last year’s regional-bank crisis. The turmoil spotlighted that some lenders weren’t even set up operationally to quickly borrow from the window in a pinch.