Jefferson ties discount window modernisation to Treasury market function
Victoria Shinder2 min readFederal Reserve Vice Chair Philip N. Jefferson spoke on 22 September 2026 at the 2026 U.S. Treasury Market Conference at the Federal Reserve Bank of New York, on discount window modernisation and what it implies for Treasury market functioning.
His framing of the facility is worth quoting in substance: banks reach discount window liquidity overwhelmingly through primary credit, offered on a "no questions asked" basis. The window is as old as the Federal Reserve itself, which turns 113 in December, and has been used both to support banking system liquidity and stability and to implement monetary policy.
Jefferson set out the institutional split: Reserve Banks operate the window in their Districts while the Board provides oversight and sets policy through regulation and guidance. He serves as Oversight Governor for the Division of Monetary Affairs and oversees the Board's discount window policy work. He described the modernisation effort as Systemwide and ongoing — "notable strides" made, "important work to do" — organised around three dimensions, followed by remarks on Treasury securities as collateral for discount window loans.
What it means
The phrase carrying the most weight is "no questions asked". The discount window's operational problem has never been its terms; it is stigma — a bank that borrows fears being read as a bank that needed to. Modernisation work that makes access faster and more routine is an attempt to attack that, because a facility institutions avoid using is not a liquidity backstop regardless of what the rate is.
Placing the speech at a Treasury market conference is the other half. If banks can reliably pledge Treasuries and get liquidity quickly, they can hold Treasuries through stress rather than selling into it — which is the sequence that turns a funding squeeze into a disorderly market. The collateral question is therefore a market-functioning question, not a plumbing detail.
Nothing here is a policy change or a signal about rates: it is a speech describing operational work in progress, and the detail of the three dimensions sits in the speech text itself.