In the fourth quarter of 2006, about 310,000 foreclosure proceedings were initiated, whereas for the preceding two years the quarterly average was roughly 230,000. 4 Subprime mortgages accounted for more than half of the foreclosures started in the fourth quarter. The sharp rise in serious delinquencies among subprime adjustable-rate mortgages (ARMs) has multiple causes.
On the external side, high and volatile oil prices and persistent global imbalances pose downside risks to growth. As regards exchange rates, we confirm our position – expressed when the euro rose sharply – that such moves are unwelcome and undesirable for economic growth.