The Fed also lowered its emergency discount window lending rate to 1.25%, from 1.75%, on Wednesday.

FORBES: Magazine Article

The Fed even narrowed the penalty banks paid for using discount window money, moving the discount rate closer to the Federal funds rate during the crisis.

FORBES: Surprise! Fed Raises Discount Rate

Late Thursday afternoon, it surprised the markets by raising the discount rate it charges though its emergency window to 0.75% from 0.50% while keeping its targeted Federal funds rate at between zero and 0.25%.

FORBES: Surprise! Fed Raises Discount Rate

The Federal Reserve is preparing to narrow this spread, first by raising the rate it charges on loans through its discount window.

FORBES: FDIC's List of Troubled Banks Grows

It used to be considered bad form to have to tap the Fed's discount window, where rates are about one point over the federal funds rate, or 6.25%.

FORBES: The Fed Primes The Pump

Sure enough, the Fed's actions Sunday, including lowering the rate it charges banks to lend directly from it and opening its discount window to Wall Street brokerages, didn't save Bear Stearns from collapse.

FORBES: After Bear