how long this “ necessary evil ” is supposed to last. this brings us to the last of the questions we still need to answer – how much longer will things go on like this? first, let ’ s take a look at inflation. as you know, the inflation rate has been very low over the last three years, even slipping below zero in some months. there were several reasons for this, one being the sharp decline in energy prices since the middle of 2014 ; another, the fact that the euroarea economy is only recovering gradually, with some countries still battling the after - effects of the financial and sovereign debt crisis. that being said, inflation has gone up again recently, largely because oil prices have bounced back. if oil prices remain static, the inflation rate might even rise to just under 2 % over the next few months. so we ’ re now a considerable distance away from the deflationary risk that some people perceived in the last few months – and if you ask me, these warnings were always somewhat overstated in any case. the ecb currently projects that it will take until 2019 for the inflation rate in the euro area as a whole to return to its target level of below, but close to, 2 % on a lasting basis. so as far as the outlook for inflation is concerned, it makes sense to leave monetary policy in expansionary mode because the economic upturn in the euro area continues to be drip - fed by monetary policy. but what ’ s also clear is that while it ’ s all well and good to disagree over the scope and design of the monetary policy measures, it is vital for the eurosystem to tighten the monetary policy reins again when the time is right. once we are within striking distance of the inflation target, we must act quickly. ladies and gentlemen, as you have probably already guessed, i cannot tell you exactly when interest rates will start to rise again. that ’ s partly because the central bank can ’ t just go it alone and set interest rates “ willy nilly ", as it were. we set the policy rates and thus indirectly control 6 / 7 bis central bankers'speeches the interest rates in the economic cycle, that ’ s true, but long - term interest rates, in particular, are driven by other factors as well. and they do not depend solely on inflation – or inflation expectations, to be precise – but also on the real interest rate, which is driven primarily by growth expectations. after all, it is ultimately

of the credit cooperatives, are now exposed to heightened interest rate risk. i ’ m not saying that ’ s necessarily a bad thing – after all, taking on that kind of risk is one of the functions they perform in the economy. but it does indicate just how important attentive risk management and capital adequacy are in the banking system. ladies and gentlemen, i believe one thing has become clear. there ’ s no love lost between banks and low interest rates, and that ’ s never going to change. those low rates are shaking financial institutions ’ business models to the core and eroding their earnings. the five traditional levers which institutions could adjust to fight back against their malaise do work, but their effectiveness is limited. that ’ s why credit institutions are so keen to see the back of the low - interest - rate setting. but the exit will need to be managed carefully if banks are to emerge unscathed. 3. impact on consumers : is there any point in saving anymore? you could say the situation that credit institutions find themselves in answers the question i mentioned earlier in my speech – the question my colleague ’ s aunt raised, remember, about the 4 / 7 bis central bankers'speeches risks presented by low interest rates. but let me now turn my attention to consumers. it would make sense to split consumers into two groups, though they may well overlap, of course : borrowers and savers. let ’ s begin with the borrowers. the house builders among you won ’ t be the only ones who know that credit terms are exceptionally favourable at the moment. that, too, is an outcome of the lowinterest - rate setting. one need only consult the mortgage lending statistics to see that this has gone down very well among consumers. mortgage volumes have seen substantial growth since 2009, and the rate of increase even accelerated over the last two years. it makes perfect sense to harness today ’ s attractive credit conditions if you are already planning to make a major investment in the medium term like building a house. but just like credit institutions, consumers, too, should always have one eye on the end of the low - interest - rate period, and consider their capacity to service their debts once interest rates start picking up again. that brings me to the group of savers who, it ’ s safe to say, have been attracting the most attention recently in the public debate over low interest rates. people are increasingly wondering whether there ’ s really any