markets participants so they will rebalance the portfolio with other bonds that are not in our portfolio. so the initial effect of our purchases will spread further and the market can still function. can we put it like this : in countries like germany and france with big companies with high ratings, you are helping with corporate bond purchases, and in countries like spain or italy, with less access to this type of measure, you will help via the tltro? it is true that in some jurisdictions you do not have many corporate bonds. but as i just said : the initial effect of our purchases will spread to other assets and other markets. so there will be a reinvestment of the liquidity. those having sold corporate bonds will rebalance by buying other things. some people will question the need for such a measure. they are right in saying that the situation is not dramatic, but i would stress that it is still fragile. yes, we can see that the situation is improving, as, for example, unemployment is coming down. but we have not reached the “ escape velocity ” yet where the rocket is not bound by gravity anymore. on the tltro, some say it is not going to make much difference, because the problem is the demand, not the supply of credit. as shown by our bank lending survey, credit demand is picking up and you also see from actual bank credit growth that the numbers are improving. so we now give a push for these developments to proceed and maybe to accelerate. do not overlook the following : in the last tranches of the tltro i you could borrow for less and less time, as the loans had all the same maturity, that is september 2018, in an environment where the rates were falling. this time it ’ s different : in one year you can still borrow for four years at the conditions prevailing at that time. and, banks can benefit from a negative rate as low as our deposit facility rate if they meet the thresholds for credit growth. all this is quite bold. it will certainly facilitate cheaper funding of banks by replacing more expensive funding instruments by our tltro ii. don ’ t you think that the discussion in germany about how harmful the accommodative stance of the ecb is lacks some analysis on some wrong business models, for example the one of the sparkassen? what we experience in the banking sector is difficult and we have to be very attentive to that, but it is also true that the

yves mersch : digital base money - an assessment from the european central bank's perspective speech by mr yves mersch, member of the executive board of the european central bank, at the farewell ceremony for mr pentti hakkarainen, deputy governor of the bank of finland ( suomen pankki ), helsinki, 16 january 2017. * * * we are living in digital times. the internet and portable online devices have radically transformed the way we use and exchange information, and the way we exchange money. money has been digitalised in many ways and we can now, for instance, transfer bank deposits electronically and pay with e - money. today i will focus on one type of digital money – central bank digital currency, or digital base money ( dbm ). this is money that is characterised by two features : ( 1 ) like banknotes in circulation, dbm is a claim on the central bank ; ( 2 ) in contrast to banknotes, it is digital. of course, dbm already exists. commercial banks and some other types of institution hold digital claims on central banks in the form of deposits. but there has been more recent discussion about whether central banks should provide dbm to a wider range of counterparties, allowing non - banks, including households, to hold accounts at the central bank. the people ’ s bank of china, the bank of england and sveriges riksbank have published on this topic or have indicated that they are conducting some work on it. i see two main reasons why this discussion on dbm has been started. first, electronic payments have become increasingly popular. there are already a number of electronic payment methods provided by the financial industry, such as credit, debit and pre - paid cards. but these methods are based on commercial bank money and people may prefer to hold claims on the central bank to avoid the risk that the commercial bank defaults. from this perspective, an increasing demand for dbm could emerge. second, some technological developments may now render the introduction of dbm much easier and potentially less expensive than ten years ago. this includes distributed ledger technology, or dlt, a variant of which is used for bitcoin. these are good reasons to start a discussion on dbm and for research to understand better the options available for dbm and their implications for central banks in fulfilling their mandates. in some european countries, for instance in sweden and denmark, electronic payments have started crowding out the use of cash. this