cpff has been up and running since late october. under the terms of the cpff, the federal reserve offered to purchase a1 - p1 rated commercial paper at 84 - day maturity from issuers. although a1 - p1 rated paper is the highest quality stuff, it makes up almost all of the cp market. the only catch is that the cpff will only buy at rates that are quite high compared to the rates one would expect in the market during normal times. the fed has to charge a high rate and up - front fees to provide some equity in the fund to offset potential credit losses. this facility has worked extremely well in restoring market function in the commercial paper market. initially, there was a surge of issuance into the facility. commercial paper rates in the market were high and the issuers wanted to extend the maturity of their obligations. but since that time, purchases have slowed sharply. following the introduction of the cpff, commercial paper rates in the marketplace dropped below the rates charged by the cpff. as a result, issuance into the program has collapsed because many issuers can now raise funds more cheaply in the private market. about half of the maturing paper in the cpff has not been rolled over. as a result, the amount of cpff holdings, which peaked at around $ 350 billion in mid - january, has fallen by over $ 100 billion, to below $ 250 billion. to date at least, the cpff has worked as planned and has been very successful in rehabilitating the commercial paper market. second, the term asset - backed security loan facility or talf will provide balance sheet capacity directly to investors beyond the banking and dealer community. this program is designed to restart the securitization markets. the talf is being rolled out in two stages. in the first stage, which i ’ ll call talf version 1. 0, the federal reserve will provide non - recourse loans to investors against aaa - rated consumer asset - backed securities collateral. primary dealers will serve as the contact point with these investors to make it easier for the fed to interface with potentially hundreds of investors. the aaa - rated securities eligible as collateral for this non - recourse lending program are used to fund a wide variety of consumer and business loans, including student, credit card, auto and small business administration loans. the market for these securities had dried up because the traditional investors in these securities – sivs, bank - related conduits

seppo honkapohja : the current economic situation in finland keynote address by mr seppo honkapohja, member of the board of the bank of finland, at the conference “ reform capacity and macroeconomic performance in the nordic countries ”, copenhagen, 20 september 2013. * * * introduction i first want to thank the organizers of this conference for inviting me to deliver the key note speech this evening. my topic is the current economic situation for finland. finland is the only euro area country with an aaa sovereign credit rating and stable outlook from all major rating agencies. finland is known as a country with strong growth, strong competitiveness, strong fiscal balance, and strong banks. a common perception – until recently, at least – has been that the finnish economy is a success story, though exports are currently suffering from the global financial crisis. among finns, the humble attitudes following the deep depression of the early 1990s have long ago given way to a feeling that we are good in almost everything and that we can even teach others how to do things - even how to run an economy. is there a solid basis for such perceptions and attitudes? perhaps you can already guess that the answer is negative. unfortunately, in some important respects, the finnish economy is not doing well. developments during the past 5 years have revealed vulnerabilities in the economy. since the autumn of 2008, finnish growth performance has been disappointing – weaker than the euro area average. finnish gdp is now 5 % smaller than it was in mid - 2008. developments in exports have been particularly poor, as exports are currently about 1 / 5 smaller than before the financial crisis. the well - being of many finns has, however, not been badly hurt by these developments. unemployment has remained relatively low, and household real incomes have mostly been on an upward trend. recently the future has become much more uncertain. there are big problems that need to be solved, and difficult political decisions than need to be made. current difficulties the economy is facing new challenges : exports have remained weak, and the current account has turned negative. after 2007 the decline in exports has been the deepest among all euro area countries. in addition, there is one challenge which has not come as a surprise : the demographic change. three main reasons for the new challenges are ( 1 ) weakness in the international economy, ( 2 ) problems of electronics and paper industries, and ( 3 ) losses in cost competitiveness. weakness in the international economy has hurt finnish exports