Authors: Olivier Armantier and Charles Holt
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Staff Reports
Can Discount Window Stigma Be Cured? An Experimental Investigation
Number 1103
May 2024
May 2024
JEL classification: E58, G01, C92
A core responsibility of a central bank is to ensure financial stability by acting as the “lender of last resort” through its Discount Window. The Discount Window, however, has not been effective because its usage is stigmatized. In this paper, we study experimentally how such stigma can be cured. We find that, once a Discount Window facility is stigmatized, removing stigma is difficult. This result is consistent with the Federal Reserve’s experiences which have been unsuccessful at removing the stigma associated with its Discount Window.
Author Disclosure Statement(s)
Olivier Armantier
I declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Charles Holt
I declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
I declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Charles Holt
I declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Suggested Citation:
Armantier, Olivier, and Charles Holt. 2024. “Can Discount Window Stigma Be Cured? An Experimental Investigation.” Federal Reserve Bank of New York Staff Reports, no. 1103, April. https://doi.org/10.59576/sr.1103
Armantier, Olivier, and Charles Holt. 2024. “Can Discount Window Stigma Be Cured? An Experimental Investigation.” Federal Reserve Bank of New York Staff Reports, no. 1103, April. https://doi.org/10.59576/sr.1103
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