means that urgently needed structural reforms can be postponed. this, however, is exactly the wrong approach and, over the long - term, it does not help but rather harms the country in question and the euro area as 2 / 5 bis central bankers'speeches a whole. similarly, due to distorted price signals, there is a growing danger of capital misallocation in the private sector. overall, this leads to false incentives as market pressure is undermined. however, if this pressure to adapt is reduced by a very loose monetary policy, then, in the financial sector, we run the risk of creating zombie banks that would otherwise be unable to survive without an ultra - loose monetary policy. but the low - interest - rate environment also harbours other dangers. in the light of lower earnings from interest business, institutions tend to ramp up their searches for profitable investment opportunities – this is known as the “ search for yield ". this, in turn, raises the danger of an asset price bubble. in this interest - rate environment, it is therefore of critical importance to pay close attention to these risks and to manage them in a systematic way. incidentally, these problems would be even greater if banking supervision were more lenient. however, things can also turn out differently, as seen in the example of scandinavia, where, after some initial hesitation, drastic measures were taken and banks ’ balance sheets were cleaned up. the pain did not last long and the region recovered economically. by contrast, japan continues to wrestle with the consequences of a less courageous intervention. because zombie banks were propped up for years and were offered continued protection, they were actually able to support insolvent enterprises. as a result, the economy fared considerably worse than if authorities had intervened more courageously. what we must learn from this is that staving off economic death with artificial life support only leads to harm in the long run – not least for the sectors of a national economy that are actually healthy. and this brings us to what i call the “ topsy - turvy world ". in europe, we need to take great care that we do not permanently find ourselves in such a topsyturvy world. this threat continues to exist. new lending and growth are suffering under the huge volumes of non - performing loans – npls for short – on the balance sheets of institutions in certain member states. it appears that many npls were not tackled decisively enough by these institutions. the first successes were seen only after

regular consultations on monetary policy decisions with the ecb executive board. that surely exceeds the necessary scope of accountability. this is evidently a matter of subjecting monetary policy to, or at least involving it in, political plans and objectives. yet the treaty consciously envisages not only a supranational but also an unpolitical currency. some may find a parallel between the forthcoming establishment of the european central bank and the beginnings of the bank deutscher lander fifty years ago. then, as now, the primary objective was to rapidly establish confidence in the new currency. however, the conditions are not comparable - thank goodness! the conversion of national currencies to the euro is not a currency reform. no one is going to lose anything because of the conversion. and the european central bank is not starting from scratch. it can carry on the legacy of the past, with all its different facets in the participating countries. in particular, it can - and hopefully will - build on the international reputation and the weight of the dmark as the present anchor currency in europe. hans roeper gave us the much - quoted saying “ from a child of occupation to a world star ”. i do not wish to lapse into adulation. however, i do believe that the central bank council of the deutsche bundesbank has played its due part in this development. all in all, germany ’ s currency has had conscientious stability guardians for fifty years. and the general public has a right to expect that this will remain so when our money is no longer the d - mark but the euro.