As a result of this deterioration in loan performance, investors have increased their scrutiny of the credit quality of securitized mortgages, and lenders in turn are evidently tightening the terms and standards applied in the subprime mortgage market.
Therefore, in addition to outlining some of my reflections so far, in my remarks this morning I will outline some of the Bank’s recent activities, as well as what I see as challenges on the horizon. Of course, it will not cover all the issues that will be of interest to the Committee, so I look forward to a wider discussion.