innovation and interdependencies, but also that of climate threats and inequality, and all with a worrying weakening, the world over, in public governance. a low price of time is as much a threat as an opportunity : a threat if we give in, in the short term, to the ease of abundant liquidity and allow financial instability to grow ; an opportunity if we use low rates collectively to invest in the future, from the ecological transition to education. you can count on our determination to act on the monetary side. but the battle is broader – it is our political challenge, collectively, as europeans – and it is longer term : it will be the challenge of your generation. i hope each and every one of you can contribute successfully to the fight. thank you for your attention. references : i i would like to thank chahinez benmissi, jean boissinot, adrian penalver, berengere rudelle and giulia sestieri for their help in preparing this speech. ii for a general discussion of the topic, see garnier o., lhuissier s., and penalver a., “ taux d ’ interet bas, quelle responsabilite de la politique monetaire? “, risques no. 120, december 2019. iii wicksell k., interest and prices, 1898. iv rachel l. ; smith t., “ are low real interest rates here to stay? ”, international journal of central banking, september 2017. v excluding energy and food. vi see notably : panel on “ behavioral economics and economic policy in the past and future ” federal reserve bank of boston conference : “ implications of behavioral economics for economic policy ” boston, massachusetts, speech by janet l. yellen, president and ceo, federal reserve bank of san francisco. https : / / www. frbsf. org / our - district / files / 0928. pdf or duca i ; kenny g. ; reuter a., “ how do inflation expectations impact consumer behaviour? ”, ecb paper, august 2016. vii international monetary fund, word economic and market developments, gita gopinath, october 2019. viii see notably rostagno et al. ( 2019 ), a tale of two decades : the ecb ’ s monetary policy at 20 ; hartmann and smets ( 2018 ). ix de pastor r., “ smes and vses in france

thus bolster their lending capacity. if private sources of capital turned out not to be forthcoming, however, u. s. government capital would be available. effect of the stress assessment on confidence in the banking system early last year, when the stress assessment was getting started, some observers had warned that the assessment and, in particular, the public disclosure of the results might backfire. as it turned out, we now can see that the assessment in fact met its objectives of reducing uncertainty about losses and ensuring sufficient capital in the largest banking firms, and that the public disclosure was an important reason for its success. the release of detailed information enhanced the credibility of the exercise by giving outside analysts the ability to assess the findings, which helped restore investor confidence in the banking system. in a demonstration of greater confidence, nearly all of the scap firms that were judged to need additional capital were able to raise that capital in the public markets through new issues or by voluntary conversions of preferred to common shares. and most of the 19 institutions have repaid the government capital that had been injected during the crisis. in all, the assessed firms have added more than $ 200 billion in common equity during the past year, including the $ 75 billion they added to meet the required scap capital buffer. despite sizable new issuance of common equity relative to overall market capitalization, share prices for the scap firms have generally increased. along with access to equity markets, banks ’ access to debt markets and interbank and short - term funding markets also improved following the evaluations. importantly, the assessment program focused not just on levels of capital, but also on the composition of capital. long - standing federal reserve policy holds that common equity should be the dominant component of tier 1 capital because it provides permanent loss absorption capacity and increased flexibility around the timing and amount of dividends and other distributions. at the end of last year, nearly all of the 19 firms had substantially higher tier 1 common measures than a year earlier ; specifically, the average ratio of tier 1 common to risk - weighted assets rose from 6. 7 per cent to 8. 5 per cent. of course, we continue to monitor credit losses and earnings at the scap institutions and to compare those outcomes with the supervisory estimates made a year ago under the more adverse scenario. it is not possible to say precisely at this point whether the assessed banks are performing better or worse than estimated, as the figures we released a year ago covered the 2009 – 2010 period as a whole and did