the single resolution mechanism decided that these two banks did not deserve to be resolved, which according to european law means rescuing some part of the banks, and that the banks should go into liquidation. but going into liquidation means that state aid rules apply, so any public money then requires two things. it requires that shareholders and subordinated debt - holders participate in the costs, which is the case in the two banks, because they go to the entity with the bad assets … but not senior bond holders? constancio : no, but the point – if the solution, for instance, under brrd, had been applying 2 / 3 bis central bankers'speeches precautionary recapitalisation in that case also senior bond holders would not have been bailed in. so it ’ s not much difference from a situation of precautionary recap, which is foreseen in the law. it ’ s not an exception. it ’ s not a special privilege. everything was decided according to the two laws that apply in these cases, with, in the case of the brrd, the potential exception of precautionary recap, which is in the law, and state aid rules. this was applied. at the same time, as a result of state aid rules, and logic, policy, the overall capacity of the banking sector in italy went down. so there was downsizing ; there was restructuring. indeed, everything was applied according to european legislation. is that just the beginning now for the italian banking sector? as we all know, it has a huge slab of npls. can we be prepared for more of these kind of … constancio : i don ’ t anticipate anything of that sort. there is the situation which was announced also during these days that is about to be concluded regarding monte dei paschi di siena, but that has been discussed with the european authorities, and very likely it will have, as was stated in the past few days, a solution very soon for that case. 3 / 3 bis central bankers'speeches

equivalent to €700 billion in extra debt for firms and households at a time when we should be aiming to reduce debt. more fundamentally, meeting our objective is about credibility. if a central bank sets an objective, it can ’ t just move the goalposts when it misses it. confidence comes from every party fulfilling its mandate. and that ’ s what the ecb will do, as the treaty demands of us. questions about the ecb ’ s policy so the ecb is playing – and will continue to play – its part in supporting confidence, price stability and a robust recovery. but i know that our policies are not uncontroversial. the low interest rate environment and our unconventional measures are seen by some as a cause for concern. i would not be surprised if that is the case for many of you here. let me discuss what i see as the three main issues. the first is the perception that low interest rates unfairly punish savers. low interest rates of course lead to lower returns on safe assets, such as deposits. but what matters for savers is what their assets can actually buy – i. e. real returns – and how their overall portfolios are performing. and it turns out that on this metric, the situation isn ’ t nearly as bad as it ’ s often thought to be. as our colleagues at the bundesbank have shown 2, the real return on a typical private portfolio for a german household since 2008 has been around 1. 5 %. that is lower than the pre - crisis average, to be sure. but it ’ s hardly an “ expropriation ” of savers. in fact, it ’ s better than in several repeated periods since the early 1990s. see speech by mario draghi at the european banking congress : monetary policy : past, present and future, frankfurt am main, november https : / / www. ecb. europa. eu / press / key / date / 2015 / html / sp151120. en. html bundesbank monthly report article : german households ’ saving and investment behaviour in light of the lowinterest - rate environment, october 2015 : https : / / www. bundesbank. de / redaktion / en / downloads / publications / monthly _ report _ articles / 2015 / 2015 _ 10 _ households. pdf? _ _ blob = publicationfile bis central bankers ’ speeches a related concern is that low interest rates cause people to save more