Transcript
LAEL BRAINARD: The recent turmoil in global financial markets, which many believe was driven by problems in the pricing of risk in the subprime market, has been the most, perhaps, obvious example of how innovations in housing finance over the last quarter century may have altered the role of the housing sector in the business cycle. Of course, then that raises some questions about whether and can and how policymakers should respond.
There is a lot of controversy surrounding these topics right now. It is, of course, of great relevance because policymakers here and internationally are grappling with precisely the set of issues that emanated out of these innovations in the subprime market. And so, the topic that we’re going to discuss today is front and center on international policymakers.
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