, we consult our researchers and add critical information that we learn from our boards of directors, regional councils and community leaders, such as you. at the new york fed, we continually track conditions in our district and have created tools for that purpose. for example, my staff produces monthly indexes of economic activity – essentially local measures of output – for the city, new jersey and new york. we have also started a consumer panel to track local household credit conditions. in addition, we have a new survey about credit and financing for small businesses. almost 900 regional businesses responded to our may 2011 poll – nearly 10 percent from the bronx. if you, as part of a small business, would like to participate in our january poll, please pass your card to my colleagues in the audience. this december we will host a workshop for the new york city metro area ’ s small businesses – to provide information about credit enhancements and loans from the small business bis central bankers ’ speeches administration. i will send your president, mr. caro, details about how to register. i hope to see you in at the new york fed in lower manhattan in december. as you know, even states as wealthy as new york have large pockets of poverty. so, we target some key initiatives specifically to low - and moderate - income groups. we have worked hard to help neighborhoods, including some in the bronx, that face high foreclosure rates. later today, i ’ ll tour some hard - hit areas with the city ’ s commissioner of housing preservation and development. to share what we learn about our diverse district, we have a rich website. i invite you to visit newyorkfed. org to explore our detailed maps and information on small business, credit and housing conditions. finally, and crucially, in the aftermath of the financial crisis, we are working with fed colleagues and other agencies to help put the nation ’ s financial system on a firmer footing. yet, much remains to be done and we are determined to keep at it. i recognize fully that there can be no return to pre - crisis business as usual – whether on the part of the financial sector or on the part of regulators like ourselves. all in all, there is a lot to keep my colleagues busy. national economic conditions now, let me update you on national economic conditions. put simply, growth in 2011 has been disappointing. we entered the year with some momentum, spurred by fiscal and monetary policy stimulus. u. s. economic

loan - to - income or loan - to - value limits. the flexibility of the framework enable banks to take individual borrower circumstances into account. there is an ongoing public debate as to the impact the mortgage measures might have on the demand for owner - occupied housing. but prices have risen substantially, and are now back to 2005 levels in nominal terms, or 2003 in real terms. so the demand is there. what is needed is a sustainable level of supply. supply has started to respond, but it ’ s still below estimates of what is needed. 33 the fact is, a higher level of credit by itself will not build more homes. however it risks the re - emergence of a credit price spiral. if supply is not responding to prices, then any move to increase the level of credit is likely to lead to higher housing costs and higher indebtedness. even if supply were to respond more strongly than we expect, new homes take time to build. we could see a rapid spike in prices, followed by an equally rapid decline. higher indebtedness also brings with it more risk. as i ’ ve discussed today, a lot of demand for housing in ireland comes from people who have moved to find work. ireland ’ s position as a small, open economy means that we are more vulnerable to structural shocks emanating from abroad. 34 it is important that households and borrowers are resilient to shocks that can have quite large, sudden effects on irish employment and wages. we need to ensure that if such a shock does occur, it does not trigger a repeat of 2008. the five years up to 2008 saw the same kind of growth rates we are seeing now. over that time, house prices grew by over 40 per cent for example. 35 the difference is that with that growth came an unsustainable increase in credit. the subsequent crisis dramatically reduced the demand for housing, and over - indebted irish households were left ‘ holding the bag ’, as it were. many of these households had taken on very large debts in order to be competitive in the home purchase market. this was the credit price spiral that mortgage measures today are trying to prevent a re - emergence of. many of these households were financially devastated, indeed continue to struggle, even today. households in mortgage arrears was one effect of the credit price spiral. recall, that in september 2013, one in eight private home dwelling loans were more than three months in arrears on their repayments