we did at some point see a generalised overheating in the economy, it ’ s never a problem for central banks to withdraw excess liquidity. the third concern about our policy is that it takes the pressure off governments to pursue structural reforms. but there are several problems with this argument. for a start, it doesn ’ t work institutionally. it ’ s not the role of the ecb to use its monetary policy to force governments to reform. that ’ s not our mandate in the treaty. and frankly, for us to act in that way would be totally illegitimate as unelected central bankers. it doesn ’ t work empirically either. there ’ s not necessarily any connection between interest rates and reforms. for example, spain started its labour market reforms when interest rates had already gone down. italy passed a labour market reform last year in tranquil market conditions. likewise, france is pursuing the macron reforms with no market pressure. and the argument doesn ’ t work logically. think about the types of reforms that euro area countries really need – reforms to judicial systems, to education, to public administration. such reforms are difficult and can take a decade to bear fruit. enacting them takes personal conviction from politicians and a popular mandate for change. whether interest rates are temporarily higher is immaterial. in fact, what typically happens when interest rates are high is not long - term reforms, but rather short - term fixes to placate the markets. and that normally means consolidating budgets by bis central bankers ’ speeches raising taxes, which makes the recession worse. that in turn creates an even harder environment for structural reforms as the costs are higher in a depressed economy. so if we look at these concerns together, we can see a common theme. while each contains a grain of truth, there ’ s another side to the story which isn ’ t receiving the same attention. and this follows a pattern that we ’ ve seen throughout the crisis. in the course of the last few years some commentators were cautioning that our policies would cause runaway inflation. they didn ’ t. others warned that we were exposing ourselves to heavy losses from expanding our balance sheet and accepting lower - quality collateral. in fact we haven ’ t had a single loss. then those same authorities claimed that our policies were illegal. the european court of justice disagreed. now they warn us about the side - effects and risks of what we ’ re doing. but what i never hear them discuss is

equivalent to €700 billion in extra debt for firms and households at a time when we should be aiming to reduce debt. more fundamentally, meeting our objective is about credibility. if a central bank sets an objective, it can ’ t just move the goalposts when it misses it. confidence comes from every party fulfilling its mandate. and that ’ s what the ecb will do, as the treaty demands of us. questions about the ecb ’ s policy so the ecb is playing – and will continue to play – its part in supporting confidence, price stability and a robust recovery. but i know that our policies are not uncontroversial. the low interest rate environment and our unconventional measures are seen by some as a cause for concern. i would not be surprised if that is the case for many of you here. let me discuss what i see as the three main issues. the first is the perception that low interest rates unfairly punish savers. low interest rates of course lead to lower returns on safe assets, such as deposits. but what matters for savers is what their assets can actually buy – i. e. real returns – and how their overall portfolios are performing. and it turns out that on this metric, the situation isn ’ t nearly as bad as it ’ s often thought to be. as our colleagues at the bundesbank have shown 2, the real return on a typical private portfolio for a german household since 2008 has been around 1. 5 %. that is lower than the pre - crisis average, to be sure. but it ’ s hardly an “ expropriation ” of savers. in fact, it ’ s better than in several repeated periods since the early 1990s. see speech by mario draghi at the european banking congress : monetary policy : past, present and future, frankfurt am main, november https : / / www. ecb. europa. eu / press / key / date / 2015 / html / sp151120. en. html bundesbank monthly report article : german households ’ saving and investment behaviour in light of the lowinterest - rate environment, october 2015 : https : / / www. bundesbank. de / redaktion / en / downloads / publications / monthly _ report _ articles / 2015 / 2015 _ 10 _ households. pdf? _ _ blob = publicationfile bis central bankers ’ speeches a related concern is that low interest rates cause people to save more