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Who is still knocking at the Discount Window?

Eurodollar University

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How Does Collateral Scarcity Affect Small Banks?

Small banks had been using say a GSE mortgage bond as collateral for these FHLB advances that they needed because their cash balances had dwindled. As collateral became more and more scarce, maybe the small banks instead found better use for this collateral outside of posting it with FHLBs for advances. And if they didn't have or had better uses for collateral elsewhere, then these banks would have to go to some other source of funding such as the primary credit window.

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