this credit squeeze is, in turn, a principal cause of the economic slowdown now taking place in many countries. central bankers have been working closely together throughout this period of financial turmoil. personally, i have found the opportunity to share views regularly with president trichet and other leading central bankers at various international meetings extremely valuable. we are all in frequent contact by phone as well. our consultations allow us to keep abreast of developments in other countries, to compare our analyses of developing trends, and to draw on each other ’ s experience and knowledge. the merits of coordinated monetary policies have been discussed by policymakers and academics for decades, but in practice, such coordination has been quite rare. however, on october 8, the federal reserve announced a reduction in its policy interest rate jointly with five other major central banks – the bank of canada, the bank of england, the ecb, sveriges riksbank, and the swiss national bank ( snb ) – with the bank of japan expressing support. last month ’ s joint action was motivated by the abatement of inflationary pressures and increased indications of economic slowing in our respective economies. in addition, the coordinated rate cut was intended to send a strong signal to the public and to markets of our resolve to act together to address global economic challenges. as you know, however, monetary policy actions have not resolved the ongoing strains in financial markets, including interbank funding markets. the federal reserve has responded to the strong demand for funding by banks and primary dealers by dramatically increasing the amount of term funding that it auctions to banks, providing new lending facilities for nonbanks, supplying high - quality securities for use in repurchase agreement ( repo ) markets and for other collateralized lending, and funding purchases of commercial paper. elsewhere, including canada, the euro area, and the united kingdom, central banks have introduced or expanded similar measures to boost the provision of liquidity in their local currencies. in addition to these measures, governments in many countries broadened deposit insurance coverage and announced plans to inject capital into their banking systems and to guarantee bank debts. all of these steps are consistent with the principles agreed to by the group of seven finance ministers and central bank governors in their october 10 communique. although the range of mechanisms we have used has been broad, our provision of liquidity conforms to a central bank ’ s traditional role as the lender of last resort. however, a novel aspect of the current

its role as the central bank, a banking supervisor, and a consumer protection regulator for financial services, the federal reserve takes a multifaceted approach to understanding the consumer financial services market. thus, we recognize the importance of homeownership in building household wealth and we monitor the safety and soundness of mortgage underwriting practices. we also write regulations that help ensure consumers understand the characteristics of financial services and products and that they receive the protections available for these services and products. since the 1960s, congress has enacted several laws to ensure that consumers receive comprehensive information and fair treatment in a broad range of financial transactions. these laws protect consumers in transactions involving credit and debit card accounts ; automated teller machine transactions and other electronic fund transfers ; deposit account activities ; automobile leases ; mortgages and home equity loans ; and lines of credit and other unsecured credit. congress has assigned the federal reserve a considerable role in ensuring that consumers are protected under these laws. for example, the federal reserve writes rules to implement the truth in lending act, which congress enacted to ensure that consumers receive clear information about credit terms and costs. the federal reserve is also responsible for rules that implement fair lending laws, such as the equal credit opportunity act, which prohibits discrimination in credit transactions. in addition, we work with other federal agencies to write joint rules, for example, to ensure that consumers ’ financial privacy is protected. the federal reserve also examines state member banks and foreign banking organizations and exercises its umbrella supervisory authority with respect to bank and financial holding companies to address compliance with consumer protection laws and regulations. the federal reserve is committed to vigorous enforcement of those laws. further, the federal reserve develops consumer education materials, recognizing that well - educated consumers are better able to protect themselves in financial transactions. clearly, to choose wisely from the variety of products and providers available, consumers must have the financial knowledge to navigate today ’ s increasingly complex financial services marketplace. for example, the federal reserve and the office of thrift supervision just revised the consumer handbook on adjustable rate mortgages ( charm ) to include additional information about nontraditional mortgage products. the charm booklet is an important means for delivering information about alternative adjustable rate mortgage products to consumers because creditors are required to provide a copy of the booklet to each consumer who receives an application for an arm. because the booklet is provided at this early stage in the process, it can be useful in encouraging consumers to ask brokers and lenders the right questions to decide if this type of loan is right