are well aware that maintaining people ’ s trust in the ecb calls for tireless efforts on our side. facing challenging times, we have sought to enhance understanding of our decisions. for instance, since january 2015 the ecb has been publishing regular accounts of the governing council ’ s monetary policy discussions. as the exchanges and conversations we have in this room testify, this additional set of information enables you – and anyone who is interested in the conduct of monetary policy – to enhance scrutiny of the ecb ’ s policies. at the same time, this has provided us with greater opportunities to explain our decisions and demonstrate that we are acting in accordance with our democratic mandate. over the past few years, we have also stepped up our efforts to overcome the key communication challenges posed by the euro area structure, namely reaching out to citizens in 3 / 4 bis central bankers'speeches 19 countries, who naturally have different expectations regarding the ecb. we have thus enhanced our communication strategy, directly addressing a wider range of audiences. in addition to our institutional activities, my fellow executive board members and i have participated in about 180 events over the last two years, a quarter of them in centres of education. if i include think tanks, foundations, non - profit organisations and governmental bodies, we delivered more speeches to these fora than at the ecb and the ncbs. ecb staff members have complemented these efforts with a dedicated outreach programme aimed specifically at secondary schools and universities which goes into the functions and purpose of a central bank in an advanced economy, and also explains the financial crisis and the ecb ’ s role in alleviating its effects on the people of europe. we have covered similar ground in our expanded website, which now features videos, explainers and charts that describe complex issues in an accessible way. we have started using new tools, such as youtube and linkedin, as well as twitter, where we have almost 440, 000 followers. the european parliament, which represents eu citizens, is the key to fostering people ’ s understanding of and trust in ecb decisions. in this sense, it contributes to the effectiveness of our monetary policy. but your contribution, as parliamentarians, does not end here. you, as co - legislators, have a role to play in making sure that europe is well prepared if the risks i mentioned in my introduction were to materialise. we have seen that, far from damaging growth, a strong regulatory framework is essential in ensuring strong long - term economic performance.

. banks have few good lending opportunities, and so they ’ re not trying to attract deposits. as a result, they are keeping nearly $ 1. 6 trillion of reserves at the fed in excess of what they need to back their deposits. in other words, banks have the licenses to create money, but are choosing not to do so. i ’ m confident, though, that at some point in the future, the economy will improve and banks will once again have good lending opportunities. some observers are concerned that once this happens, the banks ’ excess reserves will serve as kindling for an inflationary fire. this concern would have been entirely appropriate three years ago. but in october 2008, congress granted the federal reserve the power to pay interest on bank reserves. right now, that interest rate is 25 basis points, or 0. 25 percent. by raising that rate judiciously, the fed has the ability to deter banks from using their reserves to create money, and through this mechanism, the fed can prevent inflation. the fed ’ s ability to pay interest on reserves means that the old and familiar link between increased bank reserves and higher inflation has been broken. of course, this requires the fed to raise the interest rate on reserves in response to changes in economic conditions. you might well ask : will the fed raise interest rates in a sufficiently timely and effective manner to keep inflation at 2 percent or a little less? but that ’ s always been the key question to ask about fed policy, even when the fed had a much smaller balance sheet. and that ’ s my point : because the fed can pay interest on reserves, the size of its balance sheet does not, in and of itself, undercut the credibility of its commitment to keep inflation at 2 percent or a bit under. i believe that ’ s why both survey and market - based bis central bankers ’ speeches measures of expected inflation over the next five to 10 years have remained remarkably stable as the fed has expanded its liabilities. let me summarize my review of fomc performance since the beginning of the great recession in december 2007. my assessment is that, despite some profound economic shocks, the fomc – led by chairman bernanke – has successfully met its price stability mandate by engaging in imaginative forms of monetary accommodation. these actions have also helped lower the unemployment rate. as part of its accommodative policy, the fomc has greatly expanded its balance sheet. but it is important to understand that this