If markets were highly liquid and investors and lenders were willing to take normal risks and arbitrage across markets, financial conditions wouldn't have tightened so much, intensifying the economic downturn, and adjustments in the federal funds rate could well have sufficed to stabilize the economy.
Conclusion I would like to conclude with some brief thoughts on the economic policy challenges for the medium term. The first is on fiscal sustainability. As we are all aware, the fiscal programme for 2012/2013 is being implemented against the backdrop of unsettled economic conditions globally and several years of negative or negligible domestic growth.