Since 1970, housing finance has undergone a radical transformation due to the securitization of mortgage loans. As the market for mortgage securities continues to grow and develop, this transformation raises a number of important public policy issues.

Remarks at the Westchester County Bankers Association, Tarrytown, New York.

Credit performs the essential function of moving funds from the savers who want to lend to the investors and consumers who wish to borrow. Under ideal conditions, this process ensures that funds are invested by the most skilled and productive individuals, thus improving efficiency and...