paper issuers. this program appears to have been quite successful. since the cpff was created, commercial paper spreads have returned to near - normal levels, and – as anticipated – borrowings from the cpff have declined sharply, from $ 334 billion at the turn of the year to less than $ 50 billion today. before the crisis, securitization markets were an important conduit of credit to the household and business sectors ; some have referred to these markets as the " shadow banking system. " securitization markets ( other than those for mortgages guaranteed by the government ) were virtually shut down in the crisis, eliminating an important source of credit. 7 to address this the programs for money market funds are the asset - backed commercial paper money market mutual fund liquidity facility, or amlf, and the money market investor funding facility, or mmiff. the shutdown of these markets was traced, in part, to broad concerns about the risks of structured products, particularly those backed by nonprime mortgages. in addition, these difficulties were linked to the evaporation of liquidity from short - term credit markets. in the years leading up to the financial crisis, market participants concern, the federal reserve, in conjunction with the treasury, launched the talf. under the talf, eligible investors may borrow to finance purchases of the aaa - rated tranches of certain classes of asset - backed securities. the program originally focused on credit for households and small businesses, including auto loans, credit card loans, student loans, and loans guaranteed by the small business administration. more recently, we have added commercial mortgage - backed securities to the program, with the goal of mitigating a severe refinancing problem in that sector. the talf has had some success in restarting securitization markets. rate spreads for asset - backed securities have declined substantially, and we are seeing some market activity that does not use the facility. like our other programs, the talf carries little credit risk for the federal reserve, because we lend investors less than the value of the collateral and because capital from the treasury provides additional loss - absorption capacity. unlike the other programs, talf credit outstanding has increased over time, as the loans made under this program are for terms ranging from three to five years. relative to the federal reserve's short - term lending to financial institutions, the cpff and the talf are rather unconventional programs for a central bank. i believe they are justified

direct obligations of housing - related government - sponsored enterprises and mortgage - backed securities backed by fannie mae, freddie mac, and ginnie mae, " press release, november 25 ; and board of governors of the federal reserve system ( 2009 ), " fomc statement, " press release, march 18. board of governors of the federal reserve system ( 2009 ), " fomc statement, " press release, september 23. of treasury securities have served only to bring its holdings of u. s. treasury debt back to roughly the level of before the crisis. the principal goals of our recent security purchases are to lower the cost and improve the availability of credit for households and businesses. as best we can tell, the programs appear to be having their intended effect. most notably, 30year fixed mortgage rates, which responded very little to our cuts in the target federal funds rate, have declined about 1 - 1 / 2 percentage points since we first announced mbs purchases in november, helping to support the housing market. support for specific institutions in addition to the programs i have discussed, the federal reserve has provided financing directly to specific systemically important institutions. in particular, with the full support of the treasury, we used our emergency lending powers to facilitate the acquisition of bear stearns by jpmorgan chase & co. and also to prevent the imminent default of the insurance company aig. slide 5 summarizes the amount of credit outstanding from these episodes. from a credit perspective, these emergency loans obviously carry more risk than traditional provisions of central bank liquidity. two observations on this point are worth making : first, these loans amount to less than five percent of the federal reserve's balance sheet. thus, federal reserve loans that are collateralized by riskier securities are quite small compared with our holdings of assets with little or no credit risk. second, and more important, these financial risks were the result of actions taken to avert what likely would have been a substantial further intensification of the financial crisis, with potentially dire economic consequences. all that said, we undertook these operations with great discomfort and only because the united states has no workable legal framework for winding down systemically critical financial institutions in a way that would allow firms to fail and their creditors to lose money without inflicting massive damage on the financial system. the administration and other regulatory agencies have joined the federal reserve in calling on the congress to develop a special resolution regime for systemically critical nonbank financial institutions, analogous to