and data provision. these ideas have indeed had a marked effect in practice, and the first tentative conclusion is that they have helped to mitigate the international contagion of adverse shocks. in the financial regulatory and supervisory area the work to strengthen international standards has also been very intense. the key pillar here is the basel core principles for effective banking supervision, released in 1997. the ongoing work on the basel capital accord, known as basel ii, is a well - known initiative for the future. transposing all these standards into national legal and regulatory systems has become a key part of the newly founded fsap, a joint programme of the imf and the world bank. in the anti - money - laundering ( aml ) area, too, the response to the recent challenges has taken the form of more rigorous international standards. the key standards here are the 40 recommendations of the financial action task force ( fatf ), first issued in 1990 and revised twice in 1996 and also this year. after the events in september 2001, eight further recommendations were added, focusing on combating terrorism financing. these recommendations have been accepted by the international financial organisations as a basis for anti - money - laundering criteria in the financial sector. the basel committee published a document entitled “ customer due diligence for banks ” in october 2001 specifying details of the “ know - your - customer ” principle for banks. the imf has added the recommendations to its surveillance work within the fsap missions and offshore financial centre assessments, having developed a methodology for assessing the general principles in practice. these aml standards are thus on a par with all the other international codes and best practices and form an integral part of the strengthened global financial architecture. i should also note that an increased awareness of the crucial role played by the aml regulations in today ’ s world is also apparent among private financial institutions themselves. this has been demonstrated, for example, by their adoption of the “ wolfsberg principles ” and the involvement of the banking associations in many countries in aml issues. the aml regulations require financial institutions to identify their customers in certain transactions, either in suspicious ones, or in standard ones such as opening bank accounts, safety boxes, etc. the growing use of modern communications channels, e. g. telephone banking and e - finance, has made it necessary to ensure that the identification requirement is observed equally strictly for these transactions, too. financial institutions are also obliged to store data that can be used for detecting money laundering and

major central banks. in december the fomc brought its target for the federal funds rate to a historically low range of 0 to 1 / 4 percent, where it remains today. the fomc anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time. with the federal funds rate near its floor, the federal reserve has taken additional steps to ease credit conditions. to support housing markets and economic activity more broadly, and to improve mortgage market functioning, the federal reserve has begun to purchase large amounts of agency debt and agency mortgage - backed securities. since the announcement of this program last november, the conforming fixed mortgage rate has fallen nearly 1 percentage point. the federal reserve also established new lending facilities and expanded existing facilities to enhance the flow of credit to businesses and households. in response to heightened stress in bank funding markets, we increased the size of the term auction facility to help ensure that banks could obtain the funds they need to provide credit to their customers, and we expanded our network of swap lines with foreign central banks to ease conditions in interconnected dollar funding markets at home and abroad. we also established new lending facilities to support the functioning of the commercial paper market and to ease pressures on money market mutual funds. in an effort to restart securitization markets to support the extension of credit to consumers and small businesses, we joined with the treasury to announce the term asset - backed securities loan facility ( talf ). the talf is expected to begin extending loans soon. the measures taken by the federal reserve, other u. s. government entities, and foreign governments since september have helped to restore a degree of stability to some financial markets. in particular, strains in short - term funding markets have eased notably since the fall, and london interbank offered rates ( libor ) - - upon which borrowing costs for many households and businesses are based - - have decreased sharply. conditions in the commercial paper market also have improved, even for lower - rated borrowers, and the sharp outflows from money market mutual funds seen in september have been replaced by modest inflows. corporate risk spreads have declined somewhat from extraordinarily high levels, although these spreads remain elevated by historical standards. likely spurred by the improvements in pricing and liquidity, issuance of investment - grade corporate bonds has been strong, and speculative - grade issuance, which was near zero in the fourth quarter, has picked up somewhat. as i mentioned earlier, conform