In addition, the number of mortgages that defaulted in the first year after origination – commonly considered a gauge of poor underwriting – rose appreciably as the bubble approached its peak.4 The “originate to distribute” model of loan origination may have contributed to this decline in underwriting standards.
The title of the session has two elements as to the transformation of the world economy: reflections on policy responses, on one hand, and on the future post-pandemic monetary architecture, on the other. I shall focus mostly on the first part, i.e. policy responses, which is the most burning matter in our time.