outlook survey, september, www. cfosurvey. org. data collection for the 2007 survey of consumer finances was completed early in 2008 and processing of the data is under way. an article reviewing the highlights of the data is expected to be published in the federal reserve bulletin in the first quarter of 2009. release of the public version of the micro data is expected to follow that publication ( see 2007 survey of consumer finances ). see board of governors of the federal reserve system ( 2003 ), survey of small business finances. lenders that make sba loans have not been able to securitize and sell sba - backed loans to other institutions in the secondary market. turning to credit demand, the nfib survey's results are even more pessimistic than they were in april. for example, the survey's index of small business optimism dropped in october to its lowest level since the monthly surveys began in 1986. this subdued level reflects deterioration in several components of the index, including that the fraction of respondents considering expansion in the next three months and the fraction considering capital expenditures in the next three to six months have fallen to the bottom of their ranges over the past two decades. weak plans for business expansion will likely reduce demand for loans, which could result in future declines in small business loans even without any tightening of credit supply conditions. as noted earlier, although only 5 percent of small businesses in the nfib survey ranked financing conditions as their top concern, some 23 percent of firms indicated that sales were their main concern. these results, when combined with the duke / cfo magazine survey data, suggest that consumer demand concerns generally provide the most serious challenges facing small businesses. policy responses to financial and economic developments and their implications for small business credit access i would now like to turn to a discussion of the policy actions that the federal reserve, the congress, the treasury, and other government agencies have taken in recent weeks to address the overall functioning of financial markets and the weakening of economic activity as well as how these policies should assist small businesses going forward. in response to the escalation in financial market stress that began in late september, policymakers both in the united states and other countries have taken a series of extraordinary actions aimed at restoring market functioning and improving investor confidence. the federal reserve has continued to address ongoing problems in interbank funding markets by expanding its existing lending facilities, increasing the quantity of term funds that it auctions to banks, and accommodating greater demand

for funds from banks and primary dealers. the federal reserve has also implemented several important temporary facilities to alleviate the pressures on money market mutual funds and commercial paper issuers. the emergency economic stabilization act ( eesa ), enacted by congress in early october, provides critically important new tools to address financial market problems. the troubled asset relief program ( tarp ), authorized by the legislation, allows the treasury to provide capital to financial institutions across a wide spectrum of sizes and to purchase or guarantee troubled mortgage - related and possibly other assets held by banks and other financial institutions. the eesa also temporarily raises the limit on the deposit insurance coverage provided by the federal deposit insurance corporation ( fdic ) from $ 100, 000 to $ 250, 000 per depositor and temporarily fully covers non - interest - bearing transactions accounts, such as payroll accounts. as you know, this latter action was aimed particularly at helping small businesses. in response to weakening macroeconomic activity and the increased downside risks to economic growth and employment implied by the recent escalation in financial market stress ( along with diminished upside risks to inflation ), the federal open market committee ( fomc ), in a coordinated effort with other central banks, lowered the target federal funds rate 50 basis points to 1 - 1 / 2 percent on october 8. this cut was followed by a further 50 basis point easing to 1 percent at the october fomc meeting. additionally, on november 12, the federal banking agencies released an interagency statement aimed at ensuring that all banking organizations fulfill their fundamental role in the economy as intermediaries of credit to businesses, consumers, and other creditworthy borrowers. 8 these actions should have a wide range of positive effects across the entire economy, including small businesses. policymakers'actions over the last two months in interbank funding markets, commercial paper markets, and the money market mutual fund industry should help restore market functioning and allow short - term funding to be directed to where the economy most needs it. likewise, the activities permitted as part of the eesa legislation should help rebuild confidence in the financial system, increase the liquidity of financial markets, and improve the ability of a broad range of financial institutions to raise capital from private sources. the expansion in the coverage of deposit insurance provided by the fdic should also bolster public confidence and provide additional liquidity to fdic - insured institutions. the fomc's cumulative 1 percentage point reduction in the federal funds rate in october, combined with previous reductions