Discount Window Facility

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Bank of England - Sterling Monetary Framework - liquidity insurance.


The Bank of England's Discount Window Facility (DWF) is one of three key components of the liquidity insurance part its Sterling Monetary Framework (SMF).

The DWF is designed for institution-specific stresses needing liquidity of tailored amounts and timing, with time-lagged disclosure to the market.

The DWF's key features are:

  • Initiated on demand by the participating institution.
  • Rollable 30-day term for banks and similar institutions, and five-day for central counterparties.
  • Usually gilts lent against less liquid but high credit quality collateral.
  • Prices based on collateral type and size of drawing.

Disclosure of an institution's use of the DWF risks worsening the original stress which caused the need to use it.

For this reason, disclosure of uses of the DWF is time-lagged and averaged across participating institutions and over a calendar quarter.

The intention is that any drawing under the DWF should have ended before data on it are published.

The other two key facilities in the Bank's liquidity insurance structure are the Contingent Term Repo Facility (CTRF) and the Bank's Indexed Long-Term Repo (ILTR) operations.

See also