from standards in the market at the time, so one would not expect any large short - term effects. however, as lending increases with the recovery of the financial sector in the aftermath of the crisis, the measures will come into play and contribute to financial stability. it is too soon to assess what the impact of these measures on the economy has been, as only a small number of loans drawn down have been subject to these rules and as banks may have had some initial difficulties implementing the rules. in fact, the banks have not yet been required to report their compliance with the rules. however, we have seen some evidence that house price expectations have declined, suggesting that the speculative element of the property market has become less important, as buyers recognise that risky mortgage lending will not be allowed to fuel another devastating housing bubble. as argued by ronan lyons in this quarter ’ s daft. ie house price report. bis central bankers ’ speeches

roger w ferguson, jr : central banks and markets speech by mr roger w ferguson, jr, vice - chairman of the board of governors of the federal reserve system, at the bond market association 2002 awards dinner, new york, 9 october 2002. * * * i thank the members of the bond market association for selecting me to receive the 2002 distinguished public service award. i am particularly honored to join the company of previous recipients, who have included my colleagues alan greenspan and bill mcdonough, former treasury secretary rubin, and senators christopher dodd and kay bailey hutchinson. i understand that the proceeds from this dinner will be used to support the work of the bond market foundation, whose mission includes advancing the financial literacy of disadvantaged americans. that this is a high purpose is beyond doubt. i know that i could speak for much longer than you care to listen about why the understanding of economics and finance is crucial for individuals in a market economy. knowledgeable and astute consumers can avoid making those investment errors that come from misunderstanding or being misled. they also promote competition among providers, which benefits us all. personal financial security enhances individual well - being. and, at a more fundamental level, our social fabric and national image are intimately connected to our material aspirations. the united states cannot be the land of opportunity unless all of our citizens have both the tools and the ability to use those tools to improve their livelihoods and lives. fortunately, the increasing supply of services provided by our financial system - and the increasing complexity and diversity of product offerings - have increased consumer demand for improved financial education. the bond market foundation, like the federal reserve, has been looking for new ways to meet that demand. there are numerous other ways in which the federal reserve and the bond market association, and the fixed - income markets more generally, work together to improve the well - being of our fellow citizens. obviously, the impulse of monetary policy is transmitted, in part, through interest rates set by the market. we target only the overnight rate, and traders and investors, such as those represented and serviced by those here this evening, determine longer - term interest rates on treasury and private securities. the resulting structure of rates and spreads in the fixed - income markets can in turn be a valuable tool that we can use when analyzing the current state of macroeconomic conditions and forecasting the future. clearly, however, the roles of the fixed - income markets and the federal reserve are complementary, not identical. your role is to allocate