parents, we are absolutely convinced and determined that we will do our utmost to protect our children. we will give them nothing but the best that we can afford so that they have a good life and a bright future. all of us here would find it unthinkable why any parents would want to give away or mortgage their children. so, why should i choose this subject for tonight ’ s theme? let me explain why the subject is a very timely and relevant topic. war and peace : rising government debts in developed countries since 1980s 5. during world war ii, naturally most governments borrowed huge amounts of debts to finance the warfare. as a result, the public debts shot up and the ratio of public debt to gdp rose to very high levels. in the industrial nations ( e. g. us, uk, france, germany and japan ), the average government debt increased to a peak level of over 200 % of gdp in 1946. huge government borrowings had crowded out the private sector and in any case most industries not related to military supplies production did not have the opportunity to expand their business anyway. after the war, industrial nations began to pay down their public debts as they embarked on the journeys of reconstruction. bis central bankers ’ speeches 6. after two decades of hard work and economic growth, the ratios of government debt to gdp of the industrial nations came down to below 30 % in the 1970s while private sector debts grew steadily to around 85 % of gdp. the total debt, public and private combined, was amounting to 110 % of gdp at that time. 7. a brief word about debt. when one borrows money, whether to fund investments or to finance consumption, it could bring about many beneficial effects. for example, student loans could assist many young people without the necessary means to take up education or training that would benefit their whole lives. business loans could help entrepreneurs, large or small, to build or expand their operations that could eventually benefit not only the shareholders but also the workers and the consumers as a whole. an instalment loan could help us buy a property or consumer goods that would otherwise be inaccessible or unaffordable. while debt can bring about many attractive benefits, it has just one major drawback. that is, debt is a liability that needs to be paid back, with interests, sometime in the future. this means that someone who borrows money needs to use his or her future income to pay for interest and principal at some future time. this being

years ahead. the latest ecb staff projections foresee average inflation at 0. 0 % in 2015, rising to 1. 5 % in 2016 and 1. 8 % in 2017. a key factor for a full recovery of the euro area economy and ensuring that inflation does not remain too low for too long will be the extra stimulus that the governing council decided to introduce in january under the ecb ’ s expanded asset purchase program. this decision was premised on two considerations. first, the momentum supporting the economic recovery was viewed as too weak and fragile to give us sufficient confidence that inflation would return to levels closer to 2 % over a policy relevant medium - term horizon. second, the expansive potential of the monetary policy measures that had been decided between june and october was seen as uncertain. this was because they were largely bis central bankers ’ speeches dependent on banks ’ own decision to borrow eurosystem funds and lend them on to their customers. the cumulative uptake under the first two targeted long - term refinancing operations stood at around €212. 4 billion. therefore, the monetary impulse had to be reinforced and needed to be quantitatively more predictable and controllable to put the economy and the outlook for price stability on a firmer footing. on 9 march, we started purchasing public - sector securities as part of our expanded asset purchase programme, which also comprises interventions in the abs and covered bond markets. overall, our asset purchases will amount to €60 billion per month. the pace of purchases so far puts the overall program on track to reach a total of €60 billion in march. at this point in time we see no signs that there will not be enough bonds for us to purchase. feedback from market participants so far suggests that implementation has been very smooth and that market liquidity remains ample. our interventions have accelerated a trend that had been evident since some time. a steady process of re - integration across financial markets and jurisdictions had been under way since the summer of 2012. what is new today, however, is that lower interest rates in capital markets are increasingly being transmitted through the entire financial intermediation chain. lower funding costs for banks have started to influence the cost of borrowing for households and companies. as bank lending rates are being reduced, new investment projects – previously considered unprofitable – become attractive. in the short - run, this should sustain the demand for credit and investment. indeed, the banks covered in our bank lending survey confirm that the easing of lending conditions