Frequently Asked Questions



Collateral

Last Updated: 6/3/2014
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The Federal Reserve Banks accept a broad range of assets as discount window collateral. Extensions of credit must be collateralized to the satisfaction of the local Reserve Bank.

The answers indicated below are intended to provide general guidance; however, depository institutions are encouraged to raise any specific questions with their Reserve Bank's discount window staff.

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  1. What collateral is acceptable to pledge for discount window or PSR purposes?
  2. How can a depository institution monitor its collateral value on an ongoing basis?
  3. For certain types of loans, the collateral margins table lists separate margins for "minimal risk rated" and "normal risk rated" loans. What is the difference between "minimal risk rated" and "normal risk rated" loans?
  4. The collateral margins table shows the margins for loans divided into two groups: "individually deposited" and "group deposited" loans. What is the difference between "individually deposited" and "group deposited" loans?
  5. What if an institution cannot provide its pledged loan listing in a format that is supported by the ALD process?
  6. How does the Federal Reserve determine the collateral value for pledged loans?
  7. How does the Federal Reserve determine the collateral value for pledged securities?
  8. Why are individually deposited loan margins presented as ranges rather than discrete values on the collateral margins table?
  9. May a depository institution pledge asset-backed commercial paper?
  10. May a depository institution pledge subprime mortgages and other subprime consumer debt?
  11. May a depository institution pledge a structured debt obligation containing subprime mortgages in the underlying collateral?

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