mario draghi : plenary debate of the european parliament on the ecb ’ s annual report 2013 introductory statement by mr mario draghi, president of the european central bank, to the plenary debate of the european parliament on the ecb ’ s annual report 2013, brussels, 25 february 2015. * * * mr vice - president, mr vice - president of the commission, honourable members of parliament, ladies and gentlemen, i am very pleased to participate in this plenary debate. to lay the ground for our discussion, i would like to discuss three topics : the ecb ’ s monetary policy, focussing on the rationale for our latest monetary policy measures, the ecb ’ s commitment to accountability and transparency, and the progress towards building a deeper economic and monetary union ( emu ). i will thereby address most of the issues which the econ committee highlighted in its draft resolution. the ecb ’ s monetary policy for several quarters now, inflation in the euro area has been on a continuous downward trend. at the same time, in january 2015 market participants were expecting inflation to return to levels closer to our policy aim only over a horizon which stretched well beyond any meaningful definition of medium term. in an environment of weak economic recovery and subdued money and credit developments, risks were increasing that falling inflation expectations would feed back into weakening actual inflation. such a self - reinforcing process could have posed severe downside risks to our price stability objective. against this background, we judged that the degree of monetary accommodation that had been introduced in 2014 was insufficient. a more forceful monetary policy response became necessary. with key interest rates at their lower bound, the governing council of the ecb considered outright purchases of public securities to be the only remaining instrument which could be activated on a sufficient scale to broaden and strengthen the measures already in place. thus, we decided in january to launch an expanded asset purchase programme. under the programme the eurosystem will continue its purchases of simple and transparent asset - backed securities and of covered bonds. in addition, we will start purchasing on the secondary market investment - grade securities issued by euro area governments, public agencies and european institutions. the purchases will start in march. the combined purchases of public and private sector securities will amount to €60 billion per month. the programme is intended to last until end - september 2016. in any case, it will last until the governing council sees a sustained adjustment in the path of inflation which is consistent with its aim of achieving inflation

with less than $ 850 million in assets ). - 3and inflation. they are also not reflective of any changes in a particular bank ’ s activities or risk profile. as a result, many firms that are stable in their growth, business model, and risk profile end up unintentionally crossing regulatory thresholds. as they approach, and certainly once they cross over these asset - size lines, they must comply with additional regulatory and supervisory requirements that were specifically designed and implemented for larger and more complex firms. while the fixed - threshold approach benefits from simplicity, it is necessary to periodically revisit the policy effect of these bright - line thresholds. there are certainly cases in which a bank with assets less than $ 10 billion faces risks that are disproportionate to its asset size, warranting greater supervisory scrutiny. for these firms, asset size may vastly understate their risk profile. often, they do not operate like traditional community banks, relying instead on nontraditional services and engaging in complex activities. therefore, it may be appropriate for a community bank to be subject to additional oversight. this is particularly relevant when a bank has un - remediated, long - standing supervisory issues that require more supervisory monitoring and oversight. in such cases, a community bank supervisory approach is likely not sufficient or appropriate. at the same time, many banks with assets over $ 10 billion do operate like community banks, with a relationship - based straightforward business model, yet they are not regulated or supervised as such. over time, the mismatch in supervisory expectations around this and other asset thresholds becomes more pronounced as economic growth and inflation effectively lower them. this results in potentially overly complex supervisory constructs for banks with a limited traditional community bank risk profile. - 4is it appropriate to impose more restrictive requirements on firms when those heightened requirements are not a deliberate policy choice based on the level of risk? is it appropriate to treat each bank below a regulatory threshold as a traditional community bank? historically, regulators have been willing to push more complex requirements and expectations down to smaller banks — essentially bumping them into a higher risk tier — than moving larger firms into a lower risk tier when that treatment may be more appropriate. one important aspect of this definitional question involves the natural evolution of banking, specifically as it relates to innovation. the “ push down ” of regulatory and supervisory standards often applies when a bank pursues activities that fit under the broad umbrella of “ innovation. ” innovation can be defined