For my own part, I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s — I didn’t see any of that coming until it happened.
Janet YellenStores don't order merchandise unless they think they can sell it right away. Manufacturers and builders don't produce unless they have buyers lined up. My business contacts describe this as a paradigm shift and they believe it's permanent.
Janet YellenWe need to increase the transparency of shadow banking markets so that authorities can monitor for signs of excessive leverage and unstable maturity transformation outside regulated banks.
Janet YellenMy bottom line is that monetary policy should react to rising prices for houses or other assets only insofar as they affect the central bank's goal variables - output, employment, and inflation.
Janet Yellen