This is the third year for this conference, which I consider a milestone. The first time you organize a conference like this, all you can be sure about is that there was indeed enough research and interest for such a conference. The second time it is held, you proved that you could do it again.
1 Introduction Before moving to the main topic, I would like to reinforce remarks made last week by Chairman Bernanke on the recent turbulence in financial markets. In the United States we have seen a fairly sharp downturn in housing markets, and in recent weeks there have been growing investor concerns about mortgage credit performance, particularly with subprime mortgages.