let me briefly provide some salient features of each of these policy measures. bis central bankers ’ speeches the adoption of negative policy rates has allowed money market interest rates and the longer end of the yield curve to decline further. while this shares some of the mechanisms of a standard reduction of policy rates when they remain in positive territory, the adoption of negative rates provides additional accommodation by effectively relaxing the non - negative constraint on expectations of future short - term interest rates, thus helping to reduce long - term yields. in the absence of negative rates, when central banks bring short - term interest rates to zero, forward - looking investors start to think that the long - term interest they can earn by investing in a long - term security is too low to compensate for a potential backup in yields. therefore, they start fearing a reversal of the low interest rate policy and prefer to invest and lend for a very short term. in sum, a zero lower bound suggests to investors that short - term rates can only rise and cannot fall further. this scenario was described by john hicks in his 1937 econometrica paper : “ in an extreme case, the shortest short - term rate may perhaps be nearly zero. but if so, the long - term rate must lie above it, for the long rate has to allow for the risk that the short rate may rise during the currency of the loan, and it should be observed that the short rate can only rise, it cannot fall. ” [ 18 ] to this end, we have reiterated in our last governing council communication on 2 june that policy rates would remain at current levels or lower for an extended period of time. with our asset purchase programme ( app ) – launched in january 2015 and successively recalibrated in december 2015 and march 2016 – we have been able to provide substantial additional accommodation over and above the easing via policy rates. and the fact that the scope of our purchase programmes has been calibrated to include a variety of investmentgrade financial assets has meant that our purchases have allowed the compression of several premia across a wide range of markets in which we intervene. via portfolio rebalancing effects, these effects propagate across the whole array of rates, delivering broad - based accommodation. asset purchases interact with the negative deposit facility rate ( dfr ), which acts through what amounts to an effective tax on liquidity held by banks. indeed, the portfolio rebalancing effect is empowered by the negative dfr, as banks with high amounts of excess

elizabeth a duke : stabilizing neighborhoods – lessons learned from the field speech by ms elizabeth a duke, member of the board of governors of the federal reserve system, at the federal reserve real estate owned ( reo ) and vacant properties summit, washington dc, 1 september 2010. * * * good morning. i want to welcome you to the federal reserve board for this two - day summit to examine the problems associated with vacant and abandoned property and to explore innovative approaches to neighborhood stabilization. we are certain to have an informative and thoughtful discussion of these issues as our agenda is full of experts, including shaun donovan, secretary for the department of housing and urban development, who will deliver a keynote address. like you, i am anxious to get started. but before i begin, i would like to recognize and thank the speakers and panelists we will hear from during the conference. i would also like to acknowledge those who contributed to the new volume of papers the federal reserve published in conjunction with this event. many of our panelists contributed to the volume ; their articles give us a look at the issue from every angle, provide great insight, and offer promising solutions. and i would note that a number of participants and contributors are current or former members of the federal reserve consumer advisory council ( cac ). the cac has been instrumental in furthering our understanding of emerging consumer and community issues, including the topic that brings us together today. finally, i would like to thank the federal reserve staff that worked tirelessly on this project. when it became apparent in 2007 that foreclosures were reaching epidemic levels in cities nationwide, the first priority of many community organizations and their public and private partners was to identify ways to mitigate the impact of foreclosure on individual homeowners and their families. to assist in these efforts, the federal reserve deployed a number of resources : we developed tools for community organizations to use in identifying areas with high default rates so that they could target their counseling resources effectively. we helped to organize many foreclosure assistance fairs that brought lenders, counselors, and other resources to individual borrowers. we created foreclosure toolkits for communities. we launched a public information campaign to warn consumers about foreclosure rescue scams. despite these and other efforts to help mitigate foreclosures, however, we also recognized that many homeowners would not be able to remain in their homes and that, in time, the community development