When will a commercial bank prefer to borrow from the central bank?

1. A bank can raise funds in several ways, for example by issuing certificates of deposit. 2. It compares the discount rate with the cost of those other sources of funds. 3. When the discount rate is the cheaper of the two, the bank borrows from the central bank. 4. It then lends those funds on to customers at a higher rate. 5. The profit is the difference between the rate charged to customers and the rate paid to the central bank. 6. Deposits growing faster than loans leaves a bank with surplus funds, so it has no reason to borrow at all. 7. A bond sale by the central bank drains money from the system, which raises the cost of funds rather than making borrowing attractive. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 15 "Understanding Money and Financial Institutions", section 15.2 The Federal Reserve System_