Discount window

Examples of Discount window in the following topics:

• The Discount Rate

  • The Fed makes loans to depository institutions and charges different discount rates for each of discount windows.
  • The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from the Fed's lending facility, the discount window.
  • The Fed offers three discount window programs to depository institutions: primary credit, secondary credit, and seasonal credit, each with its own interest rate.
  • All discount window loans are fully secured.
  • (Because primary credit is the Federal Reserve's main discount window program, the Federal Reserve, at times, uses the term "discount rate" to mean the primary credit rate. ) The discount rate on secondary credit is above the rate on primary credit.

• Growth Through Monetary Policy

• Getting over the hurdles

  • Yes, adding more insulation, installing rainwater collectors, fitting higher-quality windows, placing solar panels on roofs and putting passive shading structures over windows can incur extra expenses, but when these improvements eliminate the need for a heating and cooling system the extra costs can be negated.
  • Under-floor ventilation and wiring and super-efficient windows and daylighting are also incorporated.

• Building efficiently

  • Use energy-efficient windows.
  • Energy-efficient windows are fundamental to the overall reduction of a building's energy requirements.
  • Standard glass windows have an efficiency R-value of 1, which means that more heat is lost through a window than an entire exterior wall (a reasonable R-value of an efficient wall is around 25 or 30).
  • Adjustable window glazing allows a building to either deflect unwanted light and heat or capture it like a greenhouse during cooler months.
  • Tower buildings should allow occupants to open their windows, if just a few inches, to promote ventilation.

• Fringe Benefits

  • Other fringe benefits can include employee discount programs at shops, hotels, gyms, movie theaters, and so on.
  • Benefits may also include formal or informal employee discount programs that grant workers access to specialized offerings from local and regional vendors (e.g., movies and theme park tickets, wellness programs, discounted shopping, hotels and resorts, and so on).

• Differential

  • Price differentiation requires market segmentation and some means to discourage discount customers from becoming resellers and, by extension, competitors.
  • For example, airlines routinely engage in price differentiation by charging high prices for customers with relatively inelastic demand (business travelers) and discount prices for tourists who have relatively elastic demand .
  • The airlines enforce the scheme by making the tickets non-transferable, thus preventing a tourist from buying a ticket at a discounted price and selling it to a business traveler (arbitrage).
  • Airlines must also prevent business travelers from directly buying discount tickets.

• Factoring Accounts Receivable

  • Factoring is a financial transaction whereby a business sells its accounts receivable to a third party (called a "factor") at a discount.
  • A company sells its invoices at a discount to their face value when it calculates that it will be better off using the proceeds to bolster its own growth than it would be by effectively functioning as its "customer's bank. "
  • In "advance" factoring, the factor provides financing to the seller of the accounts in the form of a cash "advance," often 70-85% of the purchase price of the accounts, with the balance of the purchase price being paid, net of the factor's discount fee (commission) and other charges, upon collection.
  • The discount fee, the cost associated with the transaction which is deducted from the reserve, along with other expenses, upon collection, before the reserve is disbursed to the factor's client.
  • The seller then sells one or more of its invoices (the receivables) at a discount to the third party, the specialized financial organization (aka the factor), often, in advance factoring, to obtain cash.

• Store Retailers

  • Because chains were so large, they were able to buy a wide variety of merchandise in large quantity discounts.
  • The discounts substantially lowered their cost compared to costs of single-unit retailers.
  • Discount Houses: Cut-rate retailers have existed for a long time.
  • However, since the end of World War II, the growth of discount houses as a legitimate and extremely competitive retailer has assured this type of outlet a permanent place among retail institutions.
  • Discount houses are characterized by an emphasis on price as their main sales appeal.

• The Lender of Last Resort

  • According to the Federal Reserve Bank of Minneapolis, "the Federal Reserve has the authority and financial resources to act as 'lender of last resort' by extending credit to depository institutions or to other entities in unusual circumstances involving a national or regional emergency, where failure to obtain credit would have a severe adverse impact on the economy. " Through its discount and credit operations, Reserve Banks provide liquidity to banks to meet short-term needs stemming from seasonal fluctuations in deposits or unexpected withdrawals.
  • The rate the Fed charges banks for these loans is the discount rate (officially the primary credit rate).

• Causes of the bullwhip effect and counteracting the bullwhip effect

  • Price fluctuations due to inflationary factors, quantity discounts, or sales tend to encourage customers to buy larger quantities than they require.
  • Stabilize prices by replacing sales and discounts with consistent "every-day low prices" at the consumer stage and uniform wholesale pricing at upstream stages.