Reserves arrive without selling the bond
Philip Jefferson told a Treasury market conference at the New York Fed that banks can move Treasury securities from a Fedwire account to the discount window late in the day and take a same-day loan. The paper stays with the bank. The bank receives the window's reserves.[1]
The portal and the pledge paperwork changed
More than 60 per cent of loan requests go through Discount Window Direct, opened in 2024. On 8 September the Reserve Banks simplified the forms and lists used to pledge loans as collateral. Those two steps do not change the window's price. They change how fast a bank can tie collateral to a request for reserves.[1]
The same-day loan writes reserves onto the bank while the Treasury security stays on the balance sheet. Quarter-end rate pressure may instead be met mainly by standing repo operations. Jefferson's speech does not split the volumes of the two channels.[1]
Quarter-end use is the speech's observation
Jefferson said the discount window has seen more use when money-market rates faced temporary upward pressure at quarter-ends. He added that Treasury securities pledged as collateral rose sharply in March 2020. Window use and same-day Treasury pledges when the quarter turns are the observation that shows this channel's share.[1]