needs of institutions. these needs may arise from, among other things, future losses or the potential for off - balance - sheet exposures to return to institutions'balance sheets. here, too, we have been discussing our analyses with bankers and ensuring that their own internal analyses reflect a broad range of scenarios and capture stress environments that could impair solvency. we have intensified efforts to evaluate institutions'capital planning and to bring about improvements where needed. our efforts related to capital planning and capital adequacy are embodied in the interagency supervisory capital assessment process, which began in february. we are conducting assessments of selected banking institutions'capital adequacy, based on certain macroeconomic scenarios. for this assessment, we are carefully evaluating the forecasts submitted by each financial institution to ensure they are appropriate, consistent with the firm's underlying portfolio performance, and reflective of each entity's particular business activities and risk profile. the capital assessment program will permit supervisors to assess senior supervisors group ( 2008 ), " observations on risk management practices during the recent market turbulence ", march 6 ; president's working group on financial markets ( 2008 ), " policy statement on financial market developments ", march 13 ; financial stability forum ( 2008 ), " report of the financial stability forum on enhancing market and institutional resilience ", april 7. whether institutions'capital buffers over the regulatory capital minimum are appropriate under more severe but plausible scenarios. to sum up our efforts to improve banks'risk management, we are looking at all areas of risk management – both on an individual and collective basis – to ensure that all institutions have their risk - management practices at satisfactory levels. more generally, where we have not seen appropriate progress, we are aggressively downgrading supervisory ratings and using our enforcement tools. maintaining balance in the supervisory process the federal reserve has long - standing policies and procedures in place to promote sound risk identification and management practices at regulated institutions that also support bank lending and the credit intermediation process. in fact, guidance issued as long ago as 1991, during the commercial real estate crisis that began in the late 1980s, specifically instructs examiners to ensure that regulatory policies and actions do not inadvertently curtail the availability of credit to sound borrowers. 2 the 1991 guidance also states that examiners are to " ensure that supervisory personnel are reviewing loans in a consistent, prudent, and balanced fashion and to ensure that all interested parties are aware of the guidance. " the 1991 policy statement

down operations. it is apparent that all banking institutions have now been impacted in some way by the adverse conditions of the current environment. federal reserve actions since 2007 the federal reserve has responded forcefully to the financial and economic crisis and it will continue to do so. in discussing federal reserve actions, i will first summarize monetary policy actions and those related to liquidity provision, and then highlight our supervisory actions. monetary policy and liquidity provision in terms of monetary policy, the federal reserve has been aggressive. as you know, the federal open market committee ( fomc ) began to ease monetary policy in september 2007, and in december 2008, the committee set a range of 0 to 25 basis points for the target federal funds rate. we have also employed additional tools to ease financial conditions, improve the functioning of credit markets, and thereby support economic activity. to improve mortgage market functioning and support housing markets and economic activity more broadly, the federal reserve has begun to purchase large amounts of agency debt and mortgage - backed securities, and we recently announced substantial additional purchases of such securities through year - end. in addition, the federal reserve announced plans to purchase up to $ 300 billion of long - term treasury securities to help improve conditions in private credit markets. since first announcing such purchases last november, the conforming fixed mortgage rate has fallen more than 1 percentage point. the federal reserve has also established new lending facilities and expanded existing facilities to enhance the flow of credit to businesses and households. in response to heightened stress in bank funding markets, we increased the size of the term auction facility to help ensure that banks could obtain the funds they need to provide credit to their customers, and we expanded our network of swap lines with foreign central banks to ease conditions in interconnected dollar funding markets at home and abroad. last fall, when money markets tightened considerably following the failure of lehman brothers, we established new lending facilities to provide liquidity to money market mutual funds and to support the functioning of the commercial paper market. the u. s. treasury, the federal deposit insurance corporation ( fdic ), and the federal reserve have taken a number of actions to strengthen the financial sector and to promote the availability of credit to businesses and households. this included injecting additional capital into banks, increasing fdic deposit coverage, providing guarantees of selected senior bank obligations and noninterest - bearing deposits, and establishing new liquidity facilities to financial markets. in addition, the federal reserve and the treasury recently launched the term asset - backed securities