The promise of a good chart is probably all the convincing most of us need. I’ve got plenty of those for you today. I want to talk to you about the evolution of house prices and the underlying determinants of their long-term movements.
Conditions in the banking sector, and in financial markets more generally, have significantly improved since the summer of last year. This is manifested by rising global equity prices and a decline in financial market volatility and global risk aversion. Global capital flows have picked up again. Spreads on sovereign and corporate bonds are narrowing. But we have to remain prudent.