A tightening of monetary policy increases these costs and therefore moderates the demand for housing, which reduces property prices and leads to a fall in construction activity. The decline in property prices also decreases collateral values and banks’ willingness and ability to lend to firms and households. Furthermore, it also reduces households’ wealth perceptions.
I am pleased to be able to be here today, at the Greater Washington $ Coalition's inaugural event, to celebrate Financial Literacy Month 2007 and to say a few words about the importance of financial education.