fundamentals have caused a sharp deterioration in the credit quality of cre loans on banks'books and of the loans that back commercial mortgage - backed securities ( cmbs ). pressures may be particularly acute at smaller regional and community banks that entered the crisis with high concentrations of cre loans. in response, banks have been reducing their exposure to these loans quite rapidly in recent months. meanwhile, the market for securitizations backed by these loans remains all but closed. with nearly $ 500 billion of cre loans scheduled to mature annually over the next few years, the performance of this sector depends critically on the ability of borrowers to refinance many of those loans. especially if cmbs financing remains unavailable, banks will face the tough decision of whether to roll over maturing debt or to foreclose. see board of governors of the federal reserve system, fdic, 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. see board of governors of the federal reserve system ( 2009 ), " federal reserve board makes announcement regarding the supervisory capital assessment program ( scap ), " press release, november 9. recognizing the importance of this sector for the economic recovery, the federal reserve has extended the talf programs for existing cmbs through march 2010 and newly structured cmbs through june. moreover, the banking agencies recently encouraged banks to work with their creditworthy borrowers to restructure troubled cre loans in a prudent manner, and reminded examiners that – absent other adverse factors – a loan should not be classified as impaired based solely on a decline in collateral value. 5 the job market in addition to constrained bank lending, a second area of great concern is the job market. since december 2007, the u. s. economy has lost, on net, about 8 million private - sector jobs, and the unemployment rate has risen from less than 5 percent to more than 10 percent. 6 both the decline in jobs and the increase in the unemployment rate have been more severe than in any other recession since world war ii. 7 besides cutting jobs, many employers have reduced hours for the workers they have retained. for example, the number of part - time workers who report that they want a full - time job but cannot find one has more than doubled since the recession began, a much larger increase than in previous deep recession

, particularly in the non - manufacturing sector, but also to keep a close eye on the extent to which companies ’ views regarding the economic outlook become more bullish as the recovery continues. outlook for prices and the conduct of monetary policy the japanese economy has been in a recovery phase since the summer of 2003. domestic corporate goods prices have been rising partly due to high crude oil prices. consumer prices, however, have been on a slightly declining trend due to the fact that the rise in corporate goods prices has mostly been offset by higher productivity and labor cost restraint. the bank has been providing ample liquidity in accordance with its commitment to continuing with the quantitative easing policy until the year - on - year rate of change in the consumer price index ( excluding fresh food prices, on a nationwide basis ) registers zero percent or higher on a sustainable basis. the positive impact of the commitment on the economy, acting via interest rates, has increased as the economic recovery has progressed. this impact is expected to become stronger as corporate profits continue to increase in line with the economic recovery. the bank ’ s thinking on the future conduct of monetary policy was explained in the outlook for economic activity and prices published in october 2004. the bank said that if higher productivity and other factors continue to broadly contain the upward pressure on prices as the economy follows a sustainable and balanced growth path, this will give the bank more latitude in conducting monetary policy. here, the “ conduct of monetary policy ” includes monetary policy decisions relating to the timing of the termination of the current monetary policy framework and the pace at which the bank will raise short - term interest rates to keep them consistent with economic conditions at the time. if prices remain less responsive to increased economic activity, the bank can more flexibly and effectively respond to emerging economic situations. for example, it could choose to continue with the quantitative easing policy as long as possible, or it could choose to raise interest rates at a moderate pace after the termination of the policy. whatever policy option is chosen in the future, it seems unlikely that the bank will be required to take precipitate action. it is in this sense that it enjoys “ latitude ” in making monetary policy decisions. as an end to the quantitative easing policy approaches, the bank will further endeavor to offer a lucid explanation of its assessment of the economic situation as well as the thinking behind its conduct of monetary policy. furthermore, the bank will continue to enhance its communication with market participants so that they will be better able to predict the conduct of