# Discount Window

*Macro & Economy — Finicade finance glossary*

The discount window is the central bank's direct lending facility for banks that need cash against collateral — the lender of last resort in practice. Its problem is stigma: borrowing signals distress, so banks avoid it precisely when the system most needs them to use it. Post-2023 reforms in several countries focused on pre-positioning collateral and normalising use to defuse exactly that reflex.

**Also known as:** lender of last resort, emergency lending facility

**Related terms:** [Federal Reserve](https://finicade.com/glossary/federal-reserve), [Bank Run](https://finicade.com/glossary/bank-run), [Liquidity Risk](https://finicade.com/glossary/liquidity-risk), [Repo (Repurchase Agreement)](https://finicade.com/glossary/repo), [Systemic Risk](https://finicade.com/glossary/systemic-risk)

Source: https://finicade.com/glossary/discount-window