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2008, No. 27
Posted 2008-10-28

Walter Bagehot, the Discount Window, and TAF


Walter Bagehot—a 19th century English intellectual—summarized the lender of last resort function with the dictum “lend freely at a high rate, on good collateral.” In response to the mortgage-related distress in financial markets, the Fed has implemented a number of new lending programs. Prominent among these is the Term Auction Facility (TAF).