Discount loans to healthy banks,who may borrow as much as they wish from the Fed,are called

Question

Quizplus · Accepted Answer

Primary credit is the term used for discount loans given directly by the Federal Reserve to healthy banks, which can borrow as much as they need. The interest rate on primary credit is set higher than the Federal Funds Rate to encourage banks to borrow from each other first. Secondary credit is available to banks that are not eligible for primary credit, while seasonal credit is intended to help smaller banks cope with seasonal fluctuations in demand for credit. Lender-of-last-resort credit refers to a broader concept of emergency lending provided by central banks to prevent systemic crisis.

Discount Loans to Healthy Banks,who May Borrow as Much as They