##ownership rates fell the most for households with income of $ 20, 000 or less, according to the federal reserve ’ s survey of consumer finances. 4 data from the census bureau show that, over the period from 2004 to 2012, the homeownership rate fell about 5 percentage points for african americans, compared with about 2 percentage points for other groups. 5 homeownership rates fall when existing homeowners lose or leave their properties, when barriers to homeownership increase, or both. in recent years, both factors have been important. as i mentioned, home loss through foreclosure, though down from its peaks, remains an important problem, with lower - income and minority homeowners often being the hardest hit. importantly, foreclosures can inflict economic damage beyond the personal suffering and dislocation that accompany them. foreclosed properties that sit vacant for months ( or years ) often deteriorate from neglect, adversely affecting not only the value of the individual property but the values of nearby homes as well. concentrations of foreclosures have been shown to do serious damage to neighborhoods and communities, reducing tax bases and leading to increased vandalism and crime. thus, the overall effect of the foreclosure wave, especially when concentrated in lower - income and minority areas, is broader than its effects on individual homeowners. a strengthening housing market will help to gradually undo that damage, but the process has only begun. homeownership rates have also declined because fewer households have chosen, or have been able, to become new homeowners in recent years. buying a home usually means obtaining a mortgage, and the data show that the pace of mortgage lending has fallen considerably on a national basis ; the extension of first - lien mortgages to purchase homes fell by more than half from 2006 to 2011 and now stands at the lowest level since 1995. 6 again, this is a staff calculation for 2012 : q2 based on data from the mortgage bankers association ’ s national delinquency survey. see u. s. census bureau ( 2012 ), “ housing vacancies and homeownership ”, webpage, third quarter, historical tables, table 16, available at www. census. gov / housing / hvs / data / histtabs. html. derived from the board ’ s survey of consumer finances. see jesse bricker, arthur b. kennickell, kevin b. moore,

. so it ’ s all the more important that productivity grows. and that makes reforms necessary. 3 / 5 bis central bankers'speeches often productivity improves because of innovations. but for that, it ’ s vital that innovations spread. this occurs, for instance, through competition : new businesses, which can produce better and at lower cost thanks to innovative methods, squeeze out older companies. the economist joseph schumpeter called this “ creative destruction ”. for that to happen, the environment has to be right. in many countries, for instance, entrepreneurs still have to overcome major bureaucratic obstacles simply to set up a business. once they have done that, they need capital and labour in order to grow. that brings us back again to flexible markets, which can react to new and changing demand. and finally, businesses need markets on which they can sell their products. in that context, it is important to complete the common european market. that applies particularly to the digital market, which is set to become even more important in the future. growth and prosperity ladies and gentlemen, we need reforms for the economy in the euro area to grow sustainably. hardly anyone questions that. but is that the end of the debate? will people regain confidence in europe and in the euro when the economy is growing again? i think growth plays an important role, but we also have to look beyond that. theodore roosevelt said : “ the test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have little ”. translated into the language of economics, it means : we must not only pay attention to growth but also to the distribution of the wealth it generates. compared with other regions, income and assets in western europe have traditionally tended to be quite evenly distributed. but as in many other countries, inequality is rising – and has been for decades. there are many reasons for this, ranging from rising unemployment, a larger number of single parents, reduced spending on education through to steady de - industrialisation. rising inequality is a complex phenomenon. some people therefore seek to explain it in simplistic terms by referring, for instance, to globalisation or european integration. that ’ s how we then have a link between the distribution of wealth and criticism of europe, as i mentioned at the start my speech. and indeed, studies are showing that there is a relationship : increasing inequality provides fertile ground for euroscepticism. and inequality is not a