The Federal Home Loan Bank System (“FHLB”) and the Federal Reserve’s discount window are both critical, but distinct, sources of liquidity for banks. CSBS encourages continued efforts by the Fed to modernize and improve discount window operations to ensure it can serve as an effective “lender of last resort.” At the same time, any policy reforms to the discount window should avoid undermining the FHLBs’ important liquidity role and involve coordination with state regulators.