Overcoming Discount Window Stigma: An Experimental Investigation

• 成果类型: Article
• 署名作者: Armantier, Olivier; Holt, Charles A.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - New York; University of Virginia
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa055
• 发表日期: 2020
• 页码: 5630
• 关键词: Adverse selection; fire sales; field; MODEL; RELUCTANCE; auctions; BORROW

摘要

A core responsibility of the Federal Reserve is to ensure financial stability by acting as the lender of last resort through its discount window (DW). Historically, however, the DW has not been effective because its usage is stigmatized. In this paper, we develop a coordination game with adverse selection, and we test in the lab policies that have been proposed to mitigate DW stigma. We find that lowering the DW cost and making DW borrowing difficult to detect are ineffective, but regular random DW borrowing can overcome DW stigma. Implications for other forms of stigma in finance are discussed.