With my outlook out of the way, let me turn to another of my responsibilities at the Fed, which is bank regulation and supervision. I am sure that we will have the opportunity to discuss many issues of interest to you during our discussion, but I’d like to mention a pending rulemaking that would update the Community Reinvestment Act.
Although there is considerable uncertainty around this question, various approaches – including our own – suggest that there is some risk that the housing market is overvalued, and our estimates fall in the 10 to 30 per cent range. We experienced housing corrections in the early 1980s and the early 1990s, after periods when prices became overvalued to a similar extent.