Key facts
- US regulators are likely to allow banks to include access to the Federal Reserve discount window in their liquidity coverage ratios (LCR).
- The proposal is expected in the final quarter of 2026.
- The move aims to overcome stigma associated with the discount window and raise lending capacity.
US regulators are likely to permit banks to count access to the Federal Reserve's discount window as part of their liquidity coverage ratios (LCR), according to information obtained by Risk.net. This potential reform is anticipated in a proposal expected during the final quarter of 2026.
Speaking at a closed-doors event in the UK in September, Fed vice-chair for supervision Michelle Bowman indicated that a proposed overhaul of bank liquidity rules could incorporate this change. The intention behind this adjustment is to mitigate the stigma often associated with using the discount window and to enhance banks' overall lending capacity.