business reporting in our country. i hope your efforts to develop and upgrade the skills of your members will be successful. in this regard, you can count on us at the bangko sentral for support. doris, in her introduction of me, referred to my chinese zodiac sign so let me now complete that by wishing you all a happy new year of the earth rat! it is my understanding that the 2008 rat begins a new 12 - year cycle as such it promises change, new beginnings and new attitudes. on behalf of the bangko sentral, therefore, i wish all the new officers of ejap, as you face a new “ year ”, a fruitful and successful term. mabuhay ang ejap! thank you all and good night.

perspective, 2 percent is an extremely low level for interest rates. but as the financial crisis intensified and the economic outlook grew more dire in the fall of 2008, the fed continued to cut rates. for more than two years now, our policies have held short - term interest rates close to zero. just as the federal reserve used traditional concepts in unconventional ways to provide liquidity to the shadow banking system and stop the panic, once our main short - term interest rate lever was effectively at zero, we moved beyond traditional monetary policy to purchase longer - term assets and push down longer - term interest rates. in november 2008, the fed began purchasing large volumes of longer - term, u. s. government debt and agency mortgage - backed securities, eventually increasing the commitment to more than $ 1. 7 trillion before completing the purchases in march 2010. those purchases put downward pressure on longer - term interest rates generally and helped normalize the spread between mortgage rates and long - term treasury rates, which had widened during the financial crisis. reducing longer - term rates influences the economy in much the same way as lowering the expected path of short - term rates. for instance, the decline in longer - term rates lowers the cost and increases the availability of capital and credit, which in turn encourages business expansion. in the most recent episode, another important result of lower rates has been a reduction in debt service burdens from existing debt. households in particular have significantly reduced mortgage payments through refinancing. and numerous small business owners have told me that they could not have survived the downturn without low rates. in november 2010, recognizing that progress toward the achievement of our dual mandate was disappointingly slow, the fed decided to put additional downward pressure on longerterm interest rates by purchasing longer - term treasury securities with a stated objective to purchase $ 600 billion by the end of june 2011. so far, i have talked about what the federal reserve has done during the time i have been there. but i haven ’ t really told you what the fed is or what it has been like to be a policymaker there. the federal reserve is an independent entity within the federal government in that its decisions do not have to be ratified by the president or any other executive branch official. the congress, through the federal reserve act, sets the federal reserve ’ s goals and oversees it, but the federal reserve decides independently how to achieve its congressionally mandated goals. the ability to make monetary policy decisions that are free of short - term political influence