Thank you to the New York Fed for again inviting me to address this prestigious annual seminar where major topical issues are discussed. This year is no exception. The theme of ‘less accommodative policy amid questions about the global order’ has been a key focus of investors and policymakers alike for quite a while already, and clear answers are still not forthcoming.
BIS Review 60/2008  1  subprime borrowers saw their home equity increase and were often able to refinance into more-sustainable mortgages. But when house prices began to stagnate and then fall, many subprime borrowers found themselves trapped in mortgages they could not afford. Because subprime loans were frequently securitized and incorporated into complex structured products, the resulting losses spread throughout the financial system.