- 1 / 2 times their after - tax income, quite close to the average ratio during the preceding quarter century. roughly five years later, in early 2000, the ratio of wealth to disposable income peaked at more than 6 - - the highest value in the fifty years for which comparable wealth data are available. now, approaching the end of 2001, the wealth - income ratio has fallen back nearly to 5 - - still a bit high by historical standards but well below the peak. the primary driver of these recent developments has been the dramatic advance and partial retreat in the value of publicly traded equities. between early 1995 and the peak in early 2000, the wilshire 5000 stock - price index ( which is a broad measure of equity prices ) tripled, adding nearly $ 12 trillion to the wealth of u. s. households. since the peak, the wilshire 5000 has dropped by about one - third, corresponding to a loss in wealth of roughly $ 6 trillion. not only have the recent movements in u. s. stock prices been extremely large, they have arguably affected more households than did past movements in the stock market because of the broadening ownership of corporate equities in the united states. according to the survey of consumer finances, which is conducted every three years by the federal reserve, roughly 32 percent of american families owned equities in 1989 ( either directly or indirectly through mutual funds, retirement accounts, and other managed assets ). by 1998, 49 percent owned equities in some form. thus, in less than a decade, the united states evolved from a society in which one - third of families owned stocks to one in which one - half of families owned stocks. during the same period, the value of residential real estate rose, but more slowly and more steadily than did the value of equities. ten years ago, the value of residential real estate was about twice the value of the household sector ’ s corporate equities. as stock prices soared in the 1990s, the share of equity holdings in household portfolios surpassed the share of owner - occupied housing. however, the recent combination of a strong housing market and faltering stock market has put aggregate housing wealth back on par with aggregate equity wealth. now let me turn to the influence of these movements in asset prices on the conduct of monetary policy. the fundamental goal of our policy is to achieve maximum sustainable output and employment, which can be reached best in an environment of price stability. therefore,

institutions, other than the regular discount window, is the term asset - backed securities loan facility ( talf ), which has supported the market for asset - backed securities, such as those backed by auto loans, credit card loans, small business loans, and student loans. reflecting notably better conditions in many markets for asset - backed securities, the talf is scheduled to close on march 31 for loans backed by all types of collateral except newly issued commercial mortgage - backed securities ( cmbs ) and on june 30 for loans backed by newly issued cmbs. 2 the exit from these programs is substantially complete : total credit outstanding under all programs, including the regular discount window, has fallen sharply from a peak of $ 1 – 1 / 2 trillion around year - end 2008 to about $ 71 billion last week. the talf extends three - and five - year loans, which will remain outstanding after the facility closes for new loans. the later scheduled closing of the cmbs portion of the facility reflects the board ’ s assessment that conditions in that sector remain highly stressed, as well as the fact that cmbs securitizations are more complex and take longer to arrange than other types. in addition, the federal reserve has been normalizing the terms of regular discount window loans. we have reduced the maximum maturity of discount window loans from 90 days to overnight for nearly all loans, restoring the pre - crisis practice. in mid - february the federal reserve also increased the spread between the discount rate and the upper limit of our target range for the federal funds rate from 25 basis points to 50 basis points. we have emphasized that both the closure of our emergency lending facilities and the adjustments to the terms of discount window loans are responses to the improving conditions in financial markets. they are not expected to lead to tighter financial conditions for households and businesses and hence do not constitute a tightening of monetary policy, nor should they be interpreted as signaling any change in the outlook for monetary policy. the second part of the federal reserve ’ s response to the crisis and recession, besides the provision of liquidity to the financial system, involves both standard and less conventional forms of monetary policy. after reducing short - term interest rates nearly to zero, the federal open market committee ( fomc ) provided additional monetary policy stimulus through largescale purchases of treasury securities, agency mortgage - backed securities ( mbs ), and agency debt. all told, the federal reserve purchased $ 300 billion of treasury securities and will conclude purchases of $ 1. 25