of properties acquired through foreclosure, and the effect of a high percentage of distressed sales on home prices. regardless of how we got here, we, as a nation, currently have a housing market that is so severely out of balance that it is hampering our economic recovery. to many, the story of the recent financial crisis and its aftereffects for the housing market is one mainly attributed to subprime lending. although problems were concentrated initially in subprime mortgages, today about two - thirds of underwater mortgages and loans in foreclosure are actually prime or federal housing administration ( fha ) mortgages. this fact suggests that solutions aimed at righting the wrongs of previous reckless lending in the subprime market are not sufficient to tackle the scale of current problems. clearly, the market is not functioning as it should. despite near - record - low interest rates, credit conditions remain tight for many consumers and investors interested in buying or refinancing residential real estate. moreover, the lack of sufficient numbers of buyers and sellers may limit price discovery, which heightens uncertainty about the “ right ” price for a given piece of real estate and further limits activity. in addition, the large number of foreclosures and a protracted foreclosure process have led to an unprecedented level of bank - owned homes, a level that is likely to persist for some time. so how do we move forward in these difficult circumstances? bis central bankers ’ speeches the economy normally has some self - correcting mechanisms. typically, a drop in prices – whether the price of an apple or the price of a house – stimulates demand and brings new buyers into the market. in the case of houses, price declines often occur in the context of a broad - based weakness in the overall economy. in response to macroeconomic weakness, the federal reserve generally can lower the target federal funds rate, which would be expected to lower mortgage rates. the combination of lower prices and lower mortgage rates makes home purchase more affordable and helps revive the housing market. indeed, most recent recoveries have been led by housing. but for a variety of reasons, these mechanisms are not working fully in today ’ s economy. when crafting solutions, it is helpful to first identify areas where removing some obstacles might enable these self - correcting mechanisms to operate more productively. refinancing existing mortgages at lower rates one way to reduce the flow of foreclosed homes is to

francois villeroy de galhau : parisian momentum speech by mr francois villeroy de galhau, governor of the bank of france, at the bloomberg " future of finance " paris forum, paris, 9 may 2023. * * * ladies and gentlemen, it is a great pleasure for me to give this keynote address at the first future of finance – paris forum organised by michael bloomberg and his team. after the first panel, which gave precious insights on how paris can lead the way in the reshaping of financial markets, it will cover the whole range of most topical issues. this first bloomberg forum in paris is more broadly a very timely and welcome initiative, which echoes financial players'growing interest for the french capital. paris has indeed kept asserting itself as a major financial centre over the last few years, and stands out as unique in the network of european financial centres. i can only invite you to read the excellent bloomberg article published on 18 april, which perfectly captures this multifaceted trend. 1 its title, banks betting on paris say there is life after london, should bring definitive reassurance to other banks, and encourage them to make the same winning bet. so should its content, for instance : " since early 2018, nine of the biggest international banks have increased the assets booked at their eurozone entities more than sixfold to almost €1. 7 trillion " ; " if any city can make claim to being the bloc's new pre - eminent hub, it's paris ", " many executives who spoke to bloomberg said they expect headcount to keep growing from local hiring [ in paris ] ". indeed, paris is the only financial center to offer such a wide range of financial activities, from global asset management to insurance and banking. beyond the large number of subsidiaries established in or relocated to paris since brexit – at least thirty banks, twenty asset managers, several market platforms for instance –, we should also consider the activities performed through branches in paris, especially trading rooms and desks, which are sometimes far more significant than the subsidiaries to which they are legally bound. contrary to other cities, which have attracted one or two kinds of financial services, paris is the only one to have benefited from relocations on all segments of the financial industry. more importantly still, these moves were not one - off events : the momentum has lastingly shifted from london to continental europe. we observe a steady shift, which shows no sign of losing steam. combine this with