Federal Reserve proposes new account type for payment activities without discount window access
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Table of Contents
The Federal Reserve has proposed a change to its rules that would create a new category of accounts called Payment Accounts. These accounts are designed specifically for clearing and settling payments, offering a streamlined alternative to traditional master accounts at Reserve Banks.
Why it matters: This change clarifies the rules for who can access emergency lending at the Federal Reserve. By separating payment services from credit facilities, the Fed aims to reduce moral hazard and protect its balance sheet while allowing non-bank entities or smaller institutions to use Reserve Bank infrastructure for payments without assuming full depository institution status.
Who it affects
- Financial institutions seeking access to Federal Reserve payment systems
This is a proposed rule from the Federal Reserve Board published in the Federal Register; readers should check the original document for full details before relying on any specific provisions.
Agency: Federal Reserve System
Source: Federal Register — read the official document