from the federal reserve, some want a continuation of near - zero interest rates for an extended period and greater investments in mortgage instruments. in sharp contrast to that view, others suggest that the financial crisis has exposed a number of critical flaws in our housing policies and mortgage finance system that call for a significant “ re - look ” at how we finance this industry. for instance, paul volcker, who was chairman of the federal reserve during a portion of the 1980s real estate crisis, recently described the u. s. mortgage industry as “ dysfunctional ” and a “ creature of the government ” that needs reform. the options seem to fall out to either rebuilding a system backed by extensive public support, subsidies and other protections, or build a new framework that returns housing finance to greater reliance on private market forces. i support a policy path that returns the housing industry toward greater market discipline and greater long - run stability. this path requires a greatly reduced role for governmental intervention and public subsidies that have distorted the market over recent decades. the american public, including aspiring homeowners and those of you employed in the housing industry, might be best served, over time, by reducing or removing these subsidies as part of our national policy. there are several factors that argue for making such a change in policy. first, the crisis clearly shows that a mortgage finance system based on expanding the incentives and opportunities to take on more debt with little equity places households at significant financial risk and creates unsustainable trends in housing expansion. second, such policies create harmful distortions within the economy, and they are enormously expensive in terms of both their explicit and implicit costs, to both taxpayers and homeowners, especially when things go badly. many of the subsidies directed toward housing have been extremely inefficient, with other parties capturing most of the benefits rather than homeowners. moreover, with the growing federal budget deficits and the many interests that will be intensely competing for public funds, it is unrealistic to expect that all can be accommodated or that housing can continue to command the same portion of public funds and levels of taxpayer support and exposure. in brief, housing policy is badly flawed, and today ’ s budget environment requires reform. fix freddie and fannie what specific steps should we take? the first and most obvious step is to reform the two housing finance vehicles of fannie mae and freddie mac. these two institutions were responsible for more than half of all u. s. mortgages passed through the system

additional documentation or fees. such openness and flexibility is what allowed lithuania to take up the role of a fintech gateway to europe ’ s payments and banking sectors. the lithuanian doorway has been used by fintechs from a broad set of jurisdictions. firms with origins ranging from the us to singapore have established presence in lithuania. recently, we have also been witnessing elevated attention from china. several chinese fintech companies have already entered the european financial market via lithuania, with more currently in the consultative phase. yet there is still plenty of room inside. 3 / 4 bis central bankers'speeches embracing the change dear colleagues, fintech is shaking the foundations of the financial system as we know it. it is also pushing for a shake - up in the regulatory mindset. this is challenging. yet change is never easy. but it does offer substantial benefits. innovations create better, more effective financial services and facilitate their provision on a cross - border basis. under the right circumstances, this may give a new boost to globalisation, which is much - needed in the uncertain times that we live in. to wrap up, i would like to come back to the thought that i mentioned before – opportunity knocking at the door. i am sure that the knock has already been heard – it is fintech. and this is the very moment for us to learn to embrace it. if we do not, we risk missing out on what may be the once - in - a - generation opportunity. thank you for your attention. 4 / 4 bis central bankers'speeches