Credit Risk Management
The Federal Reserve Bank of Cleveland’s Credit Risk Management function consists of three operations: the Discount Window, Payments System Risk, and Reserves Management.
The Discount Window implements the Federal Reserve’s lending programs and serves as a contingency funding source for depository institutions. It acts as a safety valve to relieve pressure in reserves markets and can help ease liquidity strains in the banking system, supporting the general stability of financial markets. All depository institutions that maintain transaction accounts or nonpersonal time accounts subject to reserve requirements may borrow at the discount window.
The Payments System Risk area monitors the Fourth District’s Federal Reserve account activity, including oversight for daylight and overnight overdraft lending activity and conformity with the Board’s payment systems risk policy. It also counsels local depository institutions on their account management performance and monitors the financial health of depository institutions in the District.
The Reserves Management area monitors Regulation D reserve requirements. It counsels institutions on daily reserves positioning, processes “as of” adjustments, and monitors clearing balances.