Goldman Says It Is Testing Fed's Discount Window

Goldman Sachs Group is borrowing money this week from the Federal Reserve as a test of a new program allowing dealers to borrow directly from the central bank, a company spokesman said.

The Federal Reserve said on Sunday that it would allow investment banks to borrow from its discount window using a wide range of investment-grade securities as collateral. Borrowing from the Fed is usually a privilege reserved for commercial banks, but after the collapse of Bear Stearns, once the fifth-largest U.S. investment bank, the Fed is pumping more money into the U.S. financial system to help stabilize it.

Goldman Sachs will use the discount window when doing so makes sense economically, and from the perspective of diversifying funding sources, the spokesman said.