increasing complexity of mortgage securities, including multiple securitizations of the same loan, which made it virtually impossible for ultimate lenders to monitor the creditworthiness of borrowers – a task they, in effect, had outsourced to credit rating agencies. the absence of investor caution and due diligence was especially noticeable for the highest - rated tranches of securitized debt. elevated leverage in housing markets has meant that as prices have fallen, lenders have had to absorb an unusually high proportion of the losses. as case points out, foreclosures by lenders have added to the downward pressure on those prices. conceptually, such price declines moving down the demand curve for housing services could accelerate and cushion the adjustment in activity necessitated by previous overbuilding. i am encouraged that case the views i express are my own and not necessarily those of other members of the board of governors. the three papers discussed and their authors are as follows : ( 1 ) " financial regulation in a system context, " by stephen morris and hyun song shin, professors of economics at princeton university ; ( 2 ) " beyond leveraged losses : the balance sheet effects of the home price downturn, " by jan hatzius, chief u. s. economist at goldman sachs ; and ( 3 ) " the central role of house prices in the financial crisis : how will the market clear? " by karl case, professor of economics at wellesley college. information about the 2008 fall conference on the brookings papers on economic activity is available at the brookings website. finds the pace of declines abating in a number of markets. however, partly owing to the feedback of price declines on lenders, mortgage conditions have tightened some since the late spring readings he is using for his conclusion, and in my view, the jury is still out on whether housing prices are close to finding a bottom. the heavy involvement of financial intermediaries in amplifying the housing boom and the subsequent economic effects of the bust brings me to the morris and shin paper, which raises a host of important issues related to the systemic aspects of financial intermediation and the lessons from the recent turmoil. as they emphasize, one of the important lessons has been the greater - than - expected vulnerability of secured financing when intermediaries are engaged in maturity, credit, and liquidity transformation. recall that the turmoil first came onto the balance sheets of the banks through the collapse of the asset - backed commercial paper market last fall before it affected

peter praet : europe ’ s economic recovery and implications for monetary policy remarks by mr peter praet, member of the executive board of the european central bank, at the international conference of commercial bank economists ( iccbe ) in france, paris, 6 july 2017. * * * since june 2014, the ecb has introduced a range of unconventional measures, alongside our conventional ones, in pursuit of its price stability objective. together, these measures have proved to be extremely effective in preventing a period of disinflation from spiralling into one of deflation. nearly three years on, the risks of deflation have vanished and the transmission of our policy measures to the real economy is clearly evidenced by the recovery, which has gathered some further momentum recently. before turning to price developments and monetary policy, let me say a bit more about the latest economic developments in the euro area. the solid upswing continues to broaden across sectors and countries. real gdp in the euro area has expanded for 16 consecutive quarters, growing by 1. 9 % year - on - year during the first quarter of 2017, according to eurostat. this compares with the latest potential growth estimates for the euro area of just over 1 %. 1 moreover, recent survey data point to a strong start to the second quarter. for example, the composite output purchasing managers ’ index – which is strongly correlated with growth in the euro area – remains close to six - year highs in june. the forward - looking components of the survey continue to point to growth in the quarters ahead. moreover, economic sentiment is at its highest level in nearly a decade and has increased notably from may to june 2017. 2 unemployment is at its lowest level in eight years. looking ahead, the latest eurosystem staff macroeconomic projections point to a continued economic expansion at a somewhat faster pace than previously expected. the breadth of the economic recovery is also notable. the dispersion of growth rates across both countries and sectors is at its lowest level in two decades, reflecting a convergence of growth rates around higher levels. this is reassuring for the growth outlook because recoveries tend to be firmer and more robust when they are broad - based. it ’ s a similar picture for employment, with dispersion of employment growth rates across euro area countries at its lowest level on record. the increasingly solid cyclical recovery reflects the success of our monetary policy measures, which have worked their way through the financial system and led to a significant easing of financing conditions for consumers