( 3 ) of the federal reserve act – an authority not used since the great depression – to provide short - term backup funding to certain nondepository institutions through a number of temporary facilities. 5 for example, in march 2008 the federal reserve created the primary dealer credit facility, which lent to primary dealers on an overnight, overcollateralized basis. subsequently, the federal reserve created facilities that proved effective in helping to stabilize other key institutions and markets, including money market mutual funds, the commercial paper market, and the assetbacked securities market. as was intended, use of many of the federal reserve ’ s lending facilities has declined sharply as financial conditions have improved. 6 some facilities were closed over the course of 2009, and most other facilities expired at the beginning of this month. as of today, the only facilities still in operation that offer credit to multiple institutions, other than the regular discount window, are the taf ( the auction facility for depository institutions ) and the term asset - backed securities loan facility ( talf ), which has supported the market for asset - another possible reason that the taf has not suffered from stigma is that auctions are not settled for several days, which signals to the market that auction participants do not face an immediate shortage of funds. in particular, foreign central banks, not the federal reserve, bore the credit risk associated with the foreign central banks ’ dollar - denominated loans to financial institutions. primary dealers are broker - dealers that trade in u. s. government securities with the federal reserve bank of new york. section 13 ( 3 ) of the federal reserve act authorizes reserve banks to lend to individuals, partnerships, and corporations in “ unusual and exigent circumstances ” as determined by the board of governors. the federal reserve invoked section 13 ( 3 ) on two occasions during the 1960s to establish lending facilities for savings associations ; however, no credit was extended through either facility. in designing its facilities, the federal reserve in many cases incorporated features – such as pricing that was unattractive under normal financial conditions – aimed at encouraging borrowers to reduce their use of the facilities as financial conditions returned to normal. in the case of other facilities, particularly those that made available fixed amounts of credit through auctions, the federal reserve has gradually reduced offered amounts. backed securities, such as those that are backed by auto loans, credit card loans, small business loans, and student loans. these two facilities will also be phased out soon : the federal

now concur in forecasting low inflation, whereas previously an inflation rate that was far from the objective was associated with a wide dispersion of expectations. this would suggest that low - flation is no longer regarded as an anomaly, but increasingly as the norm. 29 lower and less widely dispersed inflation expectations entail a risk they will become de - anchored, so that observed future inflation will be more likely to remain low. these trends are reflected in wage negotiations. on several occasions between late 2015 and early 2016, the social partners in italy did not take inflation expectations into account in their negotiations, 30 so that many of the contracts signed at the time either ignored inflation or underutilized labour includes part - time workers ( who would be willing to work longer hours ), job - seekers not immediately available and discouraged workers ( those willing to work but no longer actively job - seeking ). the number of hours worked per employee is still 4 per cent below the pre - crisis average. bulligan, guglielminetti and viviano ( 2017 ). nominal wages grew on average by 1. 3 per cent from 2013, well below the pre - crisis rate. cf. busetti, ferrero, gerali and locarno ( 2014 ). cf. bartiloro, bottone and rosolia ( 2017 ). this is also due to an attempt by firms to recoup at least part of the pay rises paid in 2013 - 15 over and above observed inflation. included automatic ex - post wage indexation. in other cases the renewal of expired agreements was postponed. as a result, less than a fifth of the labour contracts in force at the end of 2016 included expected inflation among the parameters for calculating pay rises. thus, the data indicate that labour is still a widely underutilized factor of production and that inflation expectations reflect the deflationary shocks of recent years. these are cyclical problems, not structural ones. 4. monetary policy implications these considerations explain and justify the eurosystem ’ s current expansionary monetary policy stance, which is designed to stimulate demand, increase factor utilization and exert upward pressure on wages. the goal is to secure a self - sustained return of the inflation rate towards levels that are below but close to 2 per cent, one that is not solely based on current policies or on temporary factors like oil prices. as president draghi has pointed out, this requires trust in the effects of monetary policy, persistence in pursuing the objective, and