The Fed Encouraged Discount Window Use, Says US Bancorp Treasurer
Presumably trying to avoid the "stigma" associated with using the Fed's free money window, US Bancorp's Kenneth Nelson wants everyone to know that the Fed actually encouraged this behavior.
Have you ever watched To Catch a Predator? One of the pervs' favorite excuses is that, "Well she asked me to come over!" to which host Chris Hansen will usually respond, "Do you always take your orders from a 13 year old girl?"
This is pretty much just like that except no one was sending pictures of their or someone else's dick:
U.S. Bancorp Treasurer Kenneth D. Nelson said the Federal Reserve’s discount window shouldn’t be seen as a “last resort” because for years the central bank encouraged lenders to use it to square positions at day’s end.I mean, why wouldn't they encourage it? It's free money! Especially if they had a plan to inflate credit and the money supply through unusually loose monetary policy in the exact same period. You know, if that's what they were allegedly trying to do.
“We used the window a small number of times during what everyone is referring to as the financial crisis, and not as a vehicle of last resort, but as another funding option at the end of the day,” Nelson said in a phone interview yesterday. “We have been encouraged by the Fed to use the discount window.”
The Fed started encouraging the window’s use more than a decade ago and continued to do so during the crisis, Nelson said. U.S. Bancorp, the sixth-largest U.S. bank by deposits, borrowed $1.55 billion overnight on Sept. 12, 2007, the Fed records show.
“Twenty or 30 years ago there might have been some sort of a reluctance to use it but certainly not in recent history,” said Nelson, who’s been the treasurer at the Minneapolis-based bank since March 2008. “At least 10 years ago they encouraged us and said there is no stigma.”