particular, balance sheet policies have been stimulative by swapping central bank money for assets with duration and credit risk. but over time, if monetary policy continues to withdraw long - dated safe collateral from the market, there is a risk that it has a countervailing effect – i. e. that it exacerbates safe asset hoarding at the long end of the yield curve. as various academics have documented 2, this could eventually put further downward pressure on real equilibrium rates. central banks have responded to this by re - lending their portfolios of securities. but this is only a temporary fix. the first best solution would clearly be for fiscal issuers to generate more safe assets under the conditions outlined above. if this does not happen, central banks may have to use their own balance sheets to satisfy safe asset demand, also at longer maturities. a third complication is that extended use of unconventional measures could come with rising side effects, for instance on financial stability, financial intermediation and international the real neutral rate points to the level of real interest rate where monetary policy is neither stimulating nor restraining economic growth. see caballero, r. j., e. farhi and p - o. gourinchas, 2015, “ global imbalances and currency wars at the zlb ” nber working paper no 21670, october 2015. and caballero, r. j. and e. farhi ( 2015 ), “ the safety trap ”, nber working paper no 19927, february 2015. bis central bankers ’ speeches spillovers. thus far, the benefits of such measures have clearly outweighed their costs, but we cannot rule out a situation where the side effects are such that the negative consequences prevail. when discussing negative interest rates, i have called that tipping point the “ economic ” lower bound, in contrast to the “ physical ” lower bound, where largescale substitution with cash materialises, a point which has clearly not been reached. 3 this could mean a more frequent use of micro - and macroprudential measures to oppose the adverse financial stability effects of very low rates, also in countries affected by international spillovers. it could further accelerate shifts towards non - bank forms of intermediation with the consequences i described above. and it may mean moving towards a regime of greater international cooperation and policy alignment to avoid a situation where the effective lower bound leads to competitive devaluations. conclusion let me conclude.

contributed to this. between 2008 and 2013 the state provided some €144 billion in support to the german financial sector, in the form of capital injections ( around €64 billion ) and relief on assets ( around €80 billion ). 6 state guarantees were of a similar magnitude. roughly 40 % – or €26 billion – of the capital increase can be attributed to the landesbanken. given the large capital buffer, even if earnings decline significantly ( depending on future interest rate developments and german banks ’ willingness to adjust ), i presume that there are no noteworthy risks to financial stability in this country right now. even in a low interest rate environment, returns can be made on savings let me touch briefly on the situation of savers, as this is a theme that repeatedly receives special attention in germany. incidentally, german households hold only slightly more than 40 % of their total financial assets as deposits with banks. that ’ s roughly in line with the average euro area saver – so the german saver isn ’ t really that special. 7 i am well aware that nominal returns on savings deposits are very low right now. the public debate frequently refers to the nominal interest rate. understandably, since financial institutions usually use nominal interest rates for marketing purposes. but what is actually more important is real returns. for example, a deutsche bundesbank study shows that, in the last three years, the real return on households ’ financial assets stood at around 2 %. though below the long - term average of 3. 5 % for the 16 years prior to the financial crisis 8, that is significantly higher than 0 %. indeed, time and again, there were phases of negative real interest rates in the past, for example at the beginning of the 2000s and during the recent financial crisis, and also in the 1970s and at the start of the 1990s – but with significantly higher inflation rates then. if one takes residential property assets into account, during the last five years german households esrb ( 2014 ), “ is europe overbanked? ”, reports of the advisory scientific committee, no 4, june. bundesanstalt fur finanzmarktstabilisierung, historischer uberblick uber die maßnahmen des soffin, maßnahmestand 31. 12. 2015 ; see also the european commission ’ s state aid scoreboard 2014 – aid in the context of the financial and economic crisis. ecb ( 2013 ), “