What qualifies your company to be able to borrow from the fed's discount window?

Do you have to show your balance sheet and does it have to be dire for the fed to lend you money? As I understand it, you must be a major bank or investment house?

"The Discount Window is an instrument of monetary policy that allows eligible institutions to borrow money, usually on a short-term basis, to meet temporary shortages of liquidity caused by internal or external disruptions.

The Federal Reserve Banks accept a broad range of assets as discount window collateral. Discount window loans must be collateralized to the satisfaction of the local Reserve Bank.

Applying for Discount Window Access

What documentation & legal agreements are necessary to set up a relationship with the Discount Window?

Operating Circular No. 10 is the lending agreement and promissory Note for Federal Reserve advances. It sets forth the terms under which Reserve Banks will extend credit to a depository institution and the specific procedures to be followed with such an extension. The circular specifies the legal documents that must be filed before a depository institution can borrow from the Discount Window.

Required legal documents include:

* Letter of Agreement
* Authorizing Resolutions for Borrowers
* Certificate
* Official Authorization List

Other agreements are included in Operating Circular No. 10 for special circumstances, such as correspondent relationships and custodial collateral arrangements. "

The Fed takes performing loans including subprime. They will not take loans in current default or currently late.

"The Reserve Banks accept performing mortgages. This could include sub-prime mortgages."

http://www.frbdiscountwindow.org/cfaqrn....

You must be a major commercial bank. As of yesterday brokers can also borrow from the discount window.

You must be a bank (the regular kind like Citibank or an investment bank like Merrill Lynch). You must be facing a liquidity crunch and need cash urgently (you are admitting you are in trouble and are willing to invite additional scrutiny from regulators).

This is not a "bail out". The Fed charges interest (although at a low rate) and requires collateral. The collateral must be first class. They'll take mortgage backed securities, but only the AAA ones, not the sub-prime crap.