to decide on our own future would send a signal that we don ’ t know what we want. germany is being very cautious on europe at the moment. olaf scholz says that a german finance minister is first and foremost a german finance minister. do you find that disappointing? absolutely not. mr scholz is doing his job. and he also said that strengthening europe is very important to the german government. what surprises me about the debate in germany is that the impression is often given that half of europe is after germany ’ s money. isn ’ t that the case? no, above all it ’ s about putting the right rules in place, strengthening the euro area ’ s institutions and making sure that goods, services and capital markets work better. all of this is in germany ’ s interest. and not just because other european countries buy german products, but also because german savings are invested in europe. but the french government is also arguing for a european budget and a european finance minister. that is about the money. i believe that a euro area fiscal capacity can be useful to finance investment, including in economic downturns – provided, of course, that member states respect europe ’ s fiscal rules in the first place. many politicians don ’ t like to be told by the ecb what to do or what not to do. i know that we central bankers sometimes get on politicians ’ nerves. but it is our job to keep the currency stable, and that requires stable political foundations. the conditions for improving these foundations have rarely been as good as they are now, because the economy is doing well. and what if the trade disputes escalate? a fully fledged trade war would have a very negative impact. at the ecb we ’ ve analysed the impact of an increase in tariffs worldwide. the results are pretty bleak. but that ’ s not where we are right now. economic growth has moderated recently, but from exceptionally high levels. so, we are not too concerned at the moment. we expect the economic expansion to continue, and we are increasingly confident that inflation will rise towards our aim of below, but close to, 2 %. so you will soon be able to end your asset purchases? at the end of last year i said that i didn ’ t expect that our asset purchase programme would need to be extended again. i see no reason to change my view. what do you mean exactly? the programme is currently expected to run until september. we still need to have

characteristics of the irish economy imply many vulnerabilities. the openness, heightened volatility, the role of multinationals, pharma and computer services driven export growth, and simply being small. these factors point to the economy, the public finances, businesses and households being more exposed to macroeconomic risk than larger economies. this means that the domestic banking system is – at all points in the cycle – exposed to greater macroeconomic risk than banking systems in larger, more diversified economies. * * * policy responses - building buffers so now let me turn to what can be done about the relatively greater exposure to this macroeconomic risk, about building resilience. 31 resilience to structural shocks can come from many areas. structural features such as flexible labour markets, a skilled labour force or an environment of innovation can help in the face of shocks. today, i will approach resilience through the central bank ’ s remit, macro prudential policy, and address how we can build resilience of households and banks to withstand these shocks. the completion of the macro - prudential framework for bank capital is a central aspect for promoting the resilience of the lenders. it is important that banks hold sufficient buffers to guard against these higher levels of macroeconomic risks which ireland faces. we need to build resilience to these cyclical and structural vulnerabilities i mentioned earlier. cyclical vulnerabilities, are especially important in the context of a strengthening domestic credit environment and strong recovery in domestic asset prices since the crisis. these include the influences of the ebb and flow of the global cycle on the domestic cycle. to guard against cyclical risks, we have implemented the counter cyclical capital buffer. and set this at 1 per cent. the buffer aims to promote the sustainable provision of credit to the economy, and can go up as well as down. it means banks have more capital when times are good, so they can use that to absorb losses in tougher times. however, slow - changing structural characteristics require a different capital buffer, such as a systemic risk buffer. this buffer is designed so that banks have sufficient capital to withstand a shock related to the fundamental structure of the economy. a systemic risk buffer aims to build resilience against the higher probability and larger effect of structural shocks, for example being small and highly - globalized. following our request, over the summer we received confirmation from the minister of finance and public expenditure and