Question: During 2 0 0 7 - 2 0 0 8 there was a great need for injection of funds into the banking system. One typical

During 2007-2008 there was a great need for injection of funds into the banking system. One typical route for banks to access funding would be from the discount window. However, banks saw a stigma of using it. Explain what that stigma was and why banks were concerned about using the discount window. It appears that the Federal Reserve had a discussion with some of the largest banks in the country to take an enormous number of funds from the discount window in August 2007. How might this action have affected the stigma of using the discount window? Explain.

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