Question

The real the federal reverse charges for loans to commercial banks is called

Answer 1

The Federal Reserve charges for loans to commercial banks are known as the discount rate. The loans are generally used by commercial banks and other institutions to prevent liquidity problems or to prevent a bankrupt. Each of the different discount window programs that the Bank offers, which are primary credit, secondary credit and seasonal credit, has a different interest rate that has been established by the Bank's board of directors. However, as a way of protect the lender's interests, the three programs are collaterized, which means that the loans are secured against property which the lender has the right to if the borrower defaults and can no longer pay back the amount that is due.