reflecting the downgrading of securitized products and persistent concern about possible further losses at financial institutions. the functioning of markets for securitized products has remained impaired as evidenced, for example, by continued decreases in the amount outstanding of asset - backed commercial paper ( abcp ) issued and sluggish trading of collateralized debt obligations ( cdos ). corporate bonds have been issued at a reasonable pace, but the corporate bond market is still undergoing adjustment as seen in increased issuance spreads. stock markets are still unstable, and stock prices declined substantially around the turn of the year. the volatility in global financial markets seems to reflect a market correction following the laxity in risk evaluation that had developed during the long period of benign economic and financial conditions. this adjustment is therefore expected to require some time to work itself out, and during the process financial institutions will have to bear a certain amount of losses. since summer 2007, organizations such as the international monetary fund ( imf ) and the organisation for economic co - operation and development ( oecd ) have released their estimates of the size of losses incurred from financial products related to subprime mortgage loans, but it is difficult to accurately grasp the amount of final losses, since the correction in the housing market is ongoing. financial institutions in the united states and europe have been posting considerable losses, and many have announced measures to boost their capital to compensate for these losses. how successful these measures are in helping financial institutions and the financial system to restore their credibility will need to be monitored closely. short - term funding markets in the united states and europe were under elevated pressures in late 2007 as financial institutions tried to secure end - of - year funds. to address this situation, on december 12 central banks in the major economies announced joint measures to ensure the stability of global financial markets. the federal reserve established a temporary term auction facility. under this facility program, the federal reserve can auction term funds against a wide variety of collateral, thereby providing funds with longer maturities to more financial institutions. moreover, it established foreign exchange swap lines with the european central bank and the swiss national bank, and based on this, u. s. dollar auctions were carried out in europe. the bank of england and the bank of canada actively conducted operations to provide ample term funds with maturities beyond year - end. the bank of japan and the swedish riksbank welcomed the action and issued a press release stating that they would also appropriately provide liquidity to money markets in

demographic changes on consumption patterns. as the average income level in japan rose, expenditure on durable consumption goods also increased. this trend was observed for ( a ) transportation equipment ( including passenger cars ) and ( b ) tvs and information / communication equipment ( chart 9 ). particularly, expenditure on transportation equipment rose rapidly in the second half of the 1980s, probably reflecting a shift in consumer preferences from motorcycles to passenger cars and from low - quality cars to high - quality cars. since then, expenditure on durable consumption goods has flattened. the number of new passenger - car registrations has declined moderately in recent years ( chart 10 ). the population ’ s declining trend that started in 2011 is likely to reduce the sales volume of durable consumption goods. b. age - driven changes in japan ’ s consumption structure while consumption appears to have peaked owing to the constraints imposed by demographic changes, it is important to pay attention to the changing characteristics of the consumption structure. first, the elderly are becoming a major consumer generation. the share of consumption by households whose heads are aged 65 and over has been rapidly rising and already accounts for more than 30 percent of total consumption ( chart 11 ). if households whose heads are aged 60 and over are added, the share of consumption by elderly households exceeds 40 percent of total consumption. according to analysis based on household survey data, elderly households tend to allocate a greater proportion of their consumption to medical and nursing services, tourism, social expenses, and foods than younger households. meanwhile, elderly households spend less on education and transportation / communication ( including passenger cars ) than younger households. these generally, in the early stage of the demographic dividend households tend to increase their demand for durable consumption goods ( such as cars and home electronics ) and actively conduct residential investment. this is because households belonging to young generation are likely to form families. as a country passes through the demographic dividend period, a growing number of households complete the child rearing stage, and so more money can be allocated to savings for retirement. during the demographic burden period, households, as population aging proceeds, may increase demand for medical care, nursing care, and housekeeping services, as well as recreation, tourism, and cultural activities. bis central bankers ’ speeches consumption patterns make sense since many elderly households have already completed child rearing. other data show that medical and nursing related expenditure in japan increased cumulatively by more than 30 percent between 2000 and 2010. this increase is larger than in other advanced countries. for example,