loans to households and businesses. to support the credit needs of large employers, the federal reserve also established the primary market corporate credit facility ( pmccf ) and the secondary market corporate credit facility ( smccf ). these facilities primarily purchase bonds issued by u. s. companies that were investment grade on march 22, 2020. the two facilities have a combined purchase capacity of up to $ 750 billion and are backed by $ 75 billion in cares act equity. final terms and operational details on the pmccf were announced on june 29, and it stands ready to purchase newly issued corporate bonds and syndicated loans, serving as a backstop for businesses seeking to refinance their existing credit or obtain new funding. the smccf buys outstanding corporate bonds and shares in corporate bond exchange - traded funds ( etfs ) to facilitate smooth functioning of the secondary market. the smccf complements the pmccf, because improvements in secondary - market functioning associated with the smccf facilitate access by companies to bond and loan markets on reasonable terms. the smccf launched with etf purchases on may 12. earlier this month, the facility began gradually reducing purchases of etfs as it started buying a broad and diversified portfolio of individual corporate bonds to more directly support smooth functioning and market liquidity in the secondary market. purchase volumes are tied to market functioning and are currently at very low levels. the facility currently holds a total of about $ 10 billion in bonds and etf shares. following the announcement of the two corporate credit facilities in late march, conditions in the corporate bond market improved significantly. credit spreads on investment - grade bonds retraced much of the widening experienced in february and march, and issuance in the primary 3 / 5 bis central bankers'speeches market rebounded strongly. in the secondary market, liquidity also improved, and by mid - april, flows out of mutual funds and etfs specializing in corporate bonds reversed. 1 the federal reserve also launched the main street lending program, which is designed to provide loans to small and medium - sized businesses that were in good financial standing before the pandemic ; such firms generally are dependent on bank lending for credit because they are too small to tap bond markets directly. under the main street program, banks originate new loans or increase the size of existing loans to eligible businesses and sell loan participations to the federal reserve. the facility is backed by $ 75 billion in cares act equity and can purchase up to $ 600 billion in loan participations.

innovation in historical context. innovation in financial markets has long raised questions about the appropriate role of regulation. of particular concern is how the regulatory framework can serve both to encourage innovation and to support the safety and soundness of financial institutions and broader financial stability. just as important is the need to protect the public from fraud and other abusive behavior. the challenge here begins with a mismatch in timing. innovation often comes quickly, but it takes time for consumers to become aware that they could both gain and lose money on new financial products. it may take time for market participants to understand attendant risks and come up with tools to manage them. likewise, regulation involves a deliberative process — as it should because it needs to balance the risk that over - regulation will stifle innovation with the risk that under - regulation will allow for substantial harm to households and the financial system. long before crypto became an issue for regulation and public policy, i was grappling with how to think about the cycle of innovation in the context of the global financial crisis. new products often develop slowly at first while market participants are unsure of their value or their risks, but excitement and enthusiasm can then lead to rapid “ one in five adults has invested in, traded or used cryptocurrency, nbc news poll shows, ” cnbc, last modified march 31, 2022, https : / / www. cnbc. com / 2022 / 03 / 31 / cryptocurrency - news - 21percent - ofadults - have - traded - or - used - crypto - nbc - poll - shows. html. - 3growth and new products flood the market as a result. 3 participants assume too quickly that they know how the new products work, and novel products can appear both safe and lucrative, particularly if they have not been tested through bouts of market stress. the innovation cycle turns when this mismatch — between perceived understanding of risk and actual underlying risk — becomes apparent. back then, i was talking about some of the causes and consequences of the financial crisis. at that time, new types of financial products had become so intertwined with the banking and broader financial system that the turn in the innovation cycle resulted in devastating consequences for homeowners, workers, businesses, and our economy. today, while the crypto - asset sector is more nascent and less pervasive, the questions about how new financial products will affect the public, the economy, and financial stability