mario draghi : hearing before the plenary of the european parliament on the occasion of the adoption of the resolution on the ecb ’ s 2010 annual report introductory statement by mr mario draghi, president of the european central bank, at a hearing before the plenary of the european parliament on the occasion of the adoption of the resolution on the ecb ’ s 2010 annual report, brussels, 1 december 2011. * * * president, honourable members of the european parliament, i am delighted to be making my first appearance here as president of the european central bank ( ecb ) and i am honoured to present to you the ecb annual report for 2010. je souhaite tout d ’ abord rendre ici hommage a mon predecesseur. tout au long de son mandat, jean - claude trichet a su entretenir un dialogue fructueux et constructif avec le parlement europeen. dialogue que j ’ entends poursuivre avec tout autant de vigueur. die ezb ist sich ihrer großen verantwortung als huterin der geldwertstabilitat bewusst. die unabhangigkeit der ezb ist und bleibt unverhandelbar. impegno, forte senso di responsabilita e corretta attuazione delle politiche sono condizioni essenziali della partecipazione all ’ unione economica e monetaria. monetary policy decisions in 2010 and 2011 today ’ s session is an opportunity for us to take a wider perspective on ecb policies. in that way, i will also touch on a number of the broader themes of the resolution of the european parliament. let me begin with a few words on the main monetary policy decisions we have taken and the challenges we have faced during 2010 and 2011. as you know, the ecb ’ s monetary policy is constantly guided by the goal of maintaining price stability in the euro area over the medium term. and when i say this, i mean price stability in either direction. this applies to both the setting of official interest rates and the implementation of non - standard measures. this autumn, tensions in financial markets have intensified again with very adverse effects on financing conditions and confidence. downside risks to the economic outlook have increased. the weaker degree of activity

interest rate hikes should also mean that housing prices will not rise as rapidly as has been the case so far. i imagine that we all welcome the fact that inflation has come down to its currently low, stable level. for borrowers it has meant lower interest costs, but the other side of the coin is that they will not be able to amortise their debt solely through the effect of inflation. their loans will take longer to pay off, which could entail the liability side of their balance sheet remaining unchanged while perhaps lower housing prices reduce the value of their assets. many households also appear to be postponing amortisation of their loans, which seems like a short - term decision. perhaps some households need to think about taking a longer - term approach in their loan decisions. estimates of borrowing costs must also hold up when interest rates rise or when the value of the purchased house no longer does. thank you. prices of single - family dwellings and lending to households property prices, index 1986 : 1 = 100 total lending to households, index 1986 : 1 = 100 sources : statistics sweden and the riksbank number of new apartment starts 70 000 60 000 50 000 40 000 forecast 30 000 20 000 10 000 single - family dwellings multi - family dwellings source : statistics sweden. the forecast for 2004 - 2006 is that of the national board of housing, building and planning. household indebtedness per cent debt to income ratio ( lhs ) post - tax interest ratio ( rhs ) sources : statistics sweden and the riksbank households ’ real and financial assets real assets ( billion sek, lhs ) financial assets ( billion sek, lhs ) debt as percentage of total assets ( rhs ) 2004 kv2 sources : statistics sweden and the riksbank. the major banks ’ profits sek billion, prices in 2004 profit before loan losses dec - 04 dec - 02 dec - 00 dec - 98 dec - 96 dec - 94 dec - 92 dec - 90 loan losses, net sources : the banks ’ reports and the riksbank.