Nearly half the money — $143 billion — went to holding companies for the two major banks that failed over the past week, Silicon Valley Bank and Signature Bank, triggering widespread alarm in financial markets.
The problem with the discount window is it signals to everyone that you're having financial problems which means it'll be even harder for you to get liquidity at competitive rates from the market once its known you're getting help from the fed. So it tends to be underutilized, however with financial stress already being so high it's probably the least bad option for some institutions which is why its seeing so much use currently.
Does anyone know more about the discount window? That's the part the seems like free money, and was also not what was being discussed previously
The problem with the discount window is it signals to everyone that you're having financial problems which means it'll be even harder for you to get liquidity at competitive rates from the market once its known you're getting help from the fed. So it tends to be underutilized, however with financial stress already being so high it's probably the least bad option for some institutions which is why its seeing so much use currently.