with a $ 25 billion allocation toward the smccf. the smccf staggered its launch of etf and bond purchases in order to act as quickly and effectively as possible. through etf purchases beginning on may 12, the smccf provided liquidity to the corporate bond market relatively quickly. the federal reserve began direct corporate bond purchases under the broad market index purchase program on june 16. in its first week of bond purchases, the smccf was purchasing about $ 370 million per day. as of september 18, purchases have been slowed to a current daily pace of approximately $ 20 million of bonds and no etfs, and the total smccf outstanding value has reached $ 12. 8 billion. the smccf ’ s announcement effect was strong, quickly improving market functioning and unlocking the supply of hundreds of billions of dollars of private credit. since late march, more than $ 800 billion in corporate bonds have been issued without direct government or taxpayer involvement. the smccf has materially reduced its pace of purchases over the past few months as a result of the substantial improvements in the functioning of the u. s. corporate bond markets. the pace of purchases going forward will continue to be guided by measures of market functioning, increasing when conditions deteriorate and decreasing when conditions improve. the primary market corporate credit facility the primary market corporate credit facility ( pmccf ) is designed to work alongside the secondary market corporate credit facility ( smccf ) to support the ﬂow of credit to large investment - grade u. s. companies so that they can maintain business operations and capacity during the period of dislocation related to covid - 19. the pmcff supports market liquidity by serving as a funding backstop for corporate debt. under the pmccf, the federal reserve bank of new york lends to an spv. the spv will purchase qualifying bonds and syndicated loans with maturities up to four years either as the sole investor in a bond issuance or as a participant in a loan or bond syndication at issuance, where the facility may purchase a maximum of 25 percent of the syndication. with funding from the cares act, the department of the treasury has committed to make a $ 75 billion equity investment in the spv for the pmccf and smccf, with a $ 50 billion allocation toward the pmccf. as of september 18, there have not been any pmccf transactions, nor have any indications of interest been received. the

kevin m warsh : defining deviancy speech by mr kevin m warsh, member of the board of governors of the us federal reserve system, at the institute of international bankers annual meeting, new york, 16 june 2009. * * * in a seminal essay delivered about 16 years ago, senator daniel patrick moynihan offered a striking view of the degradation of standards in society. 1 he observed that deviancy – measured as increases in crime, broken homes, and mental illness – reached levels unimagined by earlier generations. as a means of coping with the onslaught, society often sought to define the problem away. the definition of customary behavior was expanded. actions once considered deviant from acceptable standards became, almost immaculately, within bounds. 2 society moves on, as it were. well - meaning efforts are periodically made to treat its failings. but if these efforts prove less than successful, citizens and policymakers alike tend to grow increasingly accustomed to the unfortunate statistics. every bit the reformer throughout his decades of public service, moynihan seemed reluctantly resigned to society's construct : " in this sense, the agencies of control often seem to define their job as that of keeping deviance within bounds rather than that of obliterating it altogether. " 3 given the financial crisis, deep contraction in the real economy, and extraordinary fiscal and monetary responses, i cannot help but wonder what constitutes deviance in economic terms in 2009 and beyond. what level of real economic output and unemployment is expected and, more important, accepted? and what level of volatility constitutes the " new normal "? 4 as i will discuss, we must be wary of macroeconomic policies that – in the name of stability – may have the effect of lowering trend growth and employment rates. in moynihan's framework, will we in the official sector be accepting of periods of significant financial and economic distress, however infrequent? that is, will deviancy be defined down with the understanding that a rare crisis is the price for dynamic, robust economic growth? or will the official sector say, " never again – not on our watch, " and become less tolerant of deviations in economic and financial conditions? under the mantle of reforming capitalism, will policymakers instead define deviancy up, and seek to guarantee stability in our economic affairs? i suspect that, for a time, policymakers will be more attracted to this latter path. stability is a fine goal, but it is not a