peter praet : interview in les echos interview with mr peter praet, member of the executive board of the european central bank, in les echos, conducted by ms isabelle couet on 2 february 2015 and published on 5 february 2015. * * * the greek finance minister came to the ecb yesterday. what do you think of his proposals and what are the margins for negotiation? the ecb is not involved in the discussions between greece and its creditors. we hold greek government bonds, bought on the secondary market to improve the transmission of our monetary policy decisions. but the ecb ’ s position is clear : the treaty does not allow us to take any decision which would entail funding a government through monetary policy. are greek banks in danger? what conditions do they need to meet in order to keep their access to ecb liquidity? the conditions for access to ecb liquidity are clear and published on the ecb website, accessible to everyone. we are transparent about our rules. if the conditions are no longer met, the ecb has to decide on the consequences. how do you envisage the future of the ecb within the troika? the ecb has been led to assume a role that has put a lot of pressure on the institution. we have lived up to our responsibility to ensure that our monetary policy can work. it was a question of stepping into the breach, as europe did not have the appropriate institutions. but that doesn ’ t mean that we are satisfied with the situation as it stands. with regard to the economy, at – 0. 6 %, inflation is sinking into negative territory. has the ecb failed to fulfil its mandate? it is true that there is a heightened risk of too prolonged a period of low inflation. we have deferred the point in time when we expect a return to inflation of below, but close to, 2 % in the medium term, which is our monetary policy objective. and precisely in order to fulfil our mandate, we took a number of important monetary policy decisions, in particular the expanded asset purchase programme announced in january. if the ecb hadn ’ t done what was necessary since 2007, we would today be in the midst of a great depression. this is not the case. and neither has the deflationary scenario materialised. we have never stopped being vigilant and taking the necessary decisions. regarding the launch of quantitative easing ( qe ), why do

: mit press. lusardi, a. ( 2010 ), “ the importance of financial literacy ”, presentation to the conference on household finance and consumption, luxembourg city, 25 – 26 october 2010. bis central bankers ’ speeches another advantage of survey data is the possibility of collecting information on households ’ attitudes, beliefs and expectations. this allows researchers to establish a connection between behavioural traits and observed financial decisions. for example, in the hfcs, households are asked about the amount of risk they are willing to take on when making financial investments or whether over the next year they expect their income to go up more, less or about the same as prices. in the next couple of days we will listen to presentations on how gamblers manage their personal finances or how important are the presence of loss aversion and narrow framing, two of the most prominent aspects of prospect theory, for portfolio choice decisions. the study of household finance has much to say on the causes and consequences for the economy of the current financial crisis. the 2007 crisis, which originated in the us, is labelled the “ sub - prime crisis ”, and it is rooted in the excessive accumulation of debt by households which did not have the appropriate buffers to repay their debt in case of a negative shock. as policy - makers we should be deeply interested in knowing where the risks are concentrated in the household sector, how much of a threat they pose to other agents in the economy, which kind of shocks households are more vulnerable to. and should we, as policy - makers, worry about a house price decline, a rise in unemployment or a stock market bust? how exposed is consumer demand to declines in prices of different assets? how will financial losses of individual households impact on public finances? tomorrow morning we will hear about some of these topics and in particular about the effect of macroeconomic experiences on households ’ risk - taking behaviour and portfolio choice, the effect of credit supply shocks on asset allocation and the consumers ’ demand for cash in an after - crisis scenario of low interest rates. the closing session of the conference will deal with the topic of cross - country wealth comparisons. explaining household wealth differences across countries is not as easy as casual observers might think. there is a plethora of factors involved in the wealth accumulation process. public comments on the first wave of the survey last april confirmed the usefulness of a careful analysis and explanation of cross - country wealth differences, as was done in the explanatory documents. 8 the papers