Central banks normally offer a discount window, where commercial banks and other depository institutions are able to borrow reserves from the Central Bank to meet temporary shortages of liquidity caused by internal or external disruptions. This creates a stable financial environment where savings and investment can occur, allowing for the growth of the economy as a whole.
The interest rate charged (called the 'discount rate') is usually set below
short term interbank market rates. Accessing the discount window allows
institutions to vary credit conditions (i.e., the amount of money they have to
loan out), thereby affecting the money supply. Through the discount window, the
central bank can affect the economic environment, and thus unemployment and
economic growth.