housing and mortgage markets. the federal reserve supported placing fannie mae and freddie mac into conservatorship to help stabilize an important source of housing finance. more recently, the federal reserve has announced that it will purchase $ 600billion in debt issued by the housing - related government - sponsored enterprises and in mortgage - backed securities backed by fannie mae, freddie mac, and ginnie mae, which could reduce funding costs for mortgages. it also is supporting foreclosure prevention and neighborhood stabilization efforts, which help reduce unnecessary foreclosures and their costs on communities. limiting foreclosures will also help reduce the risk that house prices will sink significantly below the level justified by fundamentals. the events of the past year and a half have highlighted the need for changes in our financial system. presumably, such changes may include a different balance between bank - based and market - based financial intermediation. as regulators of banks and thrifts, our job is not to determine what this balance should be. rather, our job is, and has been, to create an environment in which, in the short run, banks can step up to fill as much of the gap as possible that has been left by still - dysfunctional markets, consistent with a strong, stable banking system. over time, of course, we will need to work with the congress and the new administration to construct a system of oversight over both markets and institutions that better protects the stability of the financial system and the u. s. economy. see board of governors of the federal reserve system, federal deposit insurance corporation, office of the comptroller of the currency, and office of thrift supervision ( 2008 ), " interagency statement on meeting the needs of creditworthy borrowers ", joint press release, november 12.

mr kelley remarks on y2k readiness in the united states remarks by mr edward w kelley jr, member of the board of governors of the us federal reserve system, before the banking regulators ’ news conference on y2k readiness at the national press club in washington, d. c. on 16 september 1999. * * * i ’ m appearing here today in my role as head of the federal reserve ’ s year 2000 project. as you know, the fed provides the crucial infrastructure that undergirds the nation ’ s banking system. it distributes currency and coins and processes checks and electronic payments. it ’ s vitally important to the nation that this infrastructure functions smoothly through the rollover to the new century. we are confident it will. system readiness by 30 june, 100 % of the fed ’ s mission - critical systems were certified as y2k - ready. that is, they were fixed and are now in daily use. this includes all of the systems that support electronic funds transfer, book - entry securities transfer and check payments. not only are we ready, but the major users of our most critical payments services – depository institutions serving millions of americans – are ready too. they have tested their systems with our system, using the year 2000 date. the results of these tests, involving more than 9, 000 institutions, have assured us that the nation ’ s banks will be able to send and receive funds through the federal reserve on 1 january and thereafter. now, i don ’ t want to imply that this effort has been easy. we estimate we have reviewed and certified 90 million lines of code. as a result of this tremendous amount of very good work, i am convinced that we are as ready for business on 1 january 2000 as we are for business tomorrow. internationally, a test in june of 34 separate national and international payments systems in 19 countries showed a high level of readiness. more than 500 financial institutions successfully completed simulated year 2000 transactions on the systems. liquidity issues in addition to fixing our computer hardware and software, we have taken a number of actions to ensure that both consumers and businesses have access to liquid funds during the rollover. as most of you know, the fed increased its 1999 currency order to the treasury department ’ s bureau of engraving and printing to make sure we had enough cash in our vaults to meet any additional demand related to the date change. we have stressed that we see no need for the public to hold additional cash. we feel strongly that the most sensible