Our data indicate that, in recent quarters, borrowers are becoming less likely to fall behind on their mortgages, so fewer households are now entering the foreclosure process. At the same time, though, major lenders have acknowledged serious problems in the processes they have used to repossess homes and announced moratoria on new foreclosures. Taken together, these developments suggest that the situation in housing remains uncertain for the foreseeable future. The Federal Reserve actively encourages efforts to find viable alternatives to foreclosure, like loan modifications, or deeds in lieu. We also support due process and access to legal counsel for homeowners facing foreclosure, for instance through legal aid programs. At the same time, it is important that foreclosures that properly comply with state and federal law can ultimately take place, as this is a necessary part of the adjustment that will eventually return us to more normal conditions in the housing market. At present, the extent of the documentation problem and its wider ramifications are still uncertain. In conjunction with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, the Federal Reserve is therefore seeking to establish the facts through a review of the foreclosure practices, governance and documentation at the major bank mortgage servicers. We want to ensure that the housing finance business is supported by robust back-office operations – for processing of new mortgages as well as foreclosures – so that buyers of homes and investors in mortgage securities have full confidence in the process.

Bond market liquidity has also improved after the swap operation conducted in November 2017, which contributed to the normalisation of the Greek government bond yield curve and also supported increased foreign participation in the bond market. Over the past few months, however, Greek bond yields have remained elevated and volatile, reacting to international and European stress, even after the approval of debt measures by the Eurogroup in June and the upgrade of Greece’s credit rating by the rating agencies. So we should be patient and prudent when assessing market access. Crucially, investor confidence will rely on the continued implementation of reforms and on avoiding backtracking on past improvements. Are you concerned that a crisis, for example in Italy, could jeopardise Greece’s market access? Wouldn’t a precautionary credit line, as Mr Stournaras had suggested, have been useful in this respect? Indeed, a precautionary credit line would have helped to cushion negative spillover effects from 3/4  BIS central bankers' speeches  the international markets and to reinforce the credibility of the Greek sovereign as an issuer. It was therefore a less risky path from a purely financial standpoint. That being said, it would have entailed continued policy conditionality. I respect the government’s judgement that, after eight years under various programmes, it was time for Greece to regain ownership of its policies. Is the ECB concerned about a hostile spirit often expressed by the government toward the Governor of the Bank of Greece, Mr Stournaras, and recently even indirectly towards the former Vice-President of the ECB, Mr Papademos?