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10 August, 06:17

What is the discount rate?

the rate customers of savings banks get for borrowing money

a special rate that member banks of the Federal Reserve get for their financial operations

the amount that a bank must subtract for its reserves

the rate the Fed charges for loans to commercial banks

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  1. 10 August, 06:37
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    The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility--the discount window. The Federal Reserve Banks offer three discount window programs to depository institutions: primary credit, secondary credit, and seasonal credit, each with its own interest rate. All discount window loans are fully secured.
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