##dative financing conditions will make our policy commensurately more powerful. policymakers in the euro area are independent, but the effects of their policies are interdependent. this is why it is ultimately only a combination of policies, that are complementary and mutually consistent, that will allow our policy to reap its full effects – and to bring about a lasting return of both prosperity and stability for the whole euro area. bis central bankers ’ speeches chart 1 : macro and inflation landscape in early 2014 chart 2 : impairments in transmission bis central bankers ’ speeches chart 3 : effect of tltros on determinants of credit supply and demand chart 4 : overall impact of credit easing package bis central bankers ’ speeches chart 5 : macro and inflation landscape in early 2015 chart 6 : inflation landscape in 2009 and 2015 bis central bankers ’ speeches chart 7 : portfolio rebalancing effects chart 8 : macro and inflation landscape in early 2015 bis central bankers ’ speeches

, there have been concerns that very low rates for a prolonged period might penalise savers to the benefit of debtors ; or that rising asset prices as a consequence of our purchases might benefit the wealthy disproportionately and thereby increase inequality. distributional matters are complex, and even more so in the context of a heterogeneous monetary union. i will therefore limit myself to a few remarks on the matter. first of all, it is important to make clear that there are also distributional effects from monetary policy inaction – from the central bank not meeting its mandate or, in other words, more generally, homar and van wijnbergen ( 2014 ) find that recapitalisation and liquidity provision are complementary in speeding up the recovery after financial crises. see homar, timotej and sweder van wijnbergen ( 2014 ), “ on zombie banks and recessions after systemic banking crises : government intervention matters ”, tinbergen institute discussion paper 13 – 039 / iv / dsf54. bis central bankers ’ speeches from realised inflation persistently deviating from the central bank ’ s objective. in the case of an unexpected undershooting of inflation, data for the euro area suggest that younger households ( from 16 to 44 years old ) would be most affected. they tend to be net debtors, with debt denominated in nominal terms, and are therefore most exposed to rising real debt burdens. in contrast, older households tend to have positive net wealth, some of it held in nominal assets. inflation undershooting therefore results in redistribution from younger to older households. this empirical observation applies not only to the euro area as a whole, but also to most individual countries. 4 secondly, there are always distributional consequences to monetary policy decisions. when monetary policy acts to stave off disinflation by lowering interest rates, this has inevitably a distributional effect by reducing the interest income of savers and lowering the debt burden of borrowers. but such interest rate cuts are necessary to raise aggregate demand by encouraging firms and households to bring forward spending decisions – that is, they discourage excessive savings and incentivise investment by lowering the cost of finance. moreover, to the extent that borrowers tend to have higher propensities to consume and invest than lenders, such distributional effects may be helpful for the recovery. i would look at the question of rising asset prices from the same perspective. it is true that