doing that. this is an issue all our societies need to look at carefully. the ecb ’ s role in that is to maintain price stability, which prevents unfair redistribution. for example, our research shows that in the euro area too low inflation results in redistribution from younger, more indebted households to older households that are typically net creditors. current retirees are wealthier than ever. what opportunities does this bring to europe? in an ageing society, the fact that retirees are getting wealthier isn ’ t necessarily abnormal – older people need to accumulate more wealth to finance living longer. as they spend their wealth during retirement, it passes back to the younger generations. so wealth creation isn ’ t a zero sum game. what matters is that young people, as they move through life, have the opportunities to build up wealth, too. do you think younger adults today will have as good a standard of living as pensioners today when they come to retire? bis central bankers ’ speeches that ’ s our common choice. our standard of living depends on the strength of our economy. we need a more open, flexible, innovative and business - friendly society. much focus is put on the central bank to raise growth, and it can contribute through price stability and a stable financial system. but in the long run real growth is driven by what the economy can produce. that is much more about ideas, technology, flexibility, motivation, skills. it is up to elected governments to set a growth - friendly environment. you often talk about the need for “ structural reform ” in employment. what do you mean by this? there are lots of forms this can take. just to give one example, the kurzarbeit scheme in germany allowed employers to adjust working time during the crisis without firing people. but there ’ s no one - size - fits - all model. every society has its challenges and preferences. the idea generally is to create a fair and flexible labour market where companies do not fear taking on staff when they need them and specific groups of people are not structurally disadvantaged at times when employers need to cut wage bills. what can central banks / governments do to ease / resolve these issues? everyone has a vital interest in a prospering economy. so bringing down high levels of youth unemployment is a priority for everyone. as i said, the best contribution central banks can make here is to live up to their mandates. we can only encourage elected governments to take the necessary steps to create jobs and make

account for liquidity and credit constraints in macroeconomic models. 9 still, the links and the channels between the financial sector, the real economy and their ultimate impact on output and inflation still leaves many questions open. this is for central bankers and academics to work on in the years to come. second, as you know, our two - pillar monetary policy strategy foresees that we take into account monetary and credit developments – particularly to ensure a medium - to long - run orientation. over time monetary analysis at the ecb has been continuously refined and deepened. in the crisis it was crucial to better gauge short - term risks from financial flows and imbalances. and also in the future, its scope and methodology needs to be kept continuously updated. in particular, the analysis should encompass not only a detailed understanding of banks ’ behaviour, but also developments in the shadow banking sector as provider of private sector liquidity. 10 in order to conduct these types of analyses detailed data on financial intermediaries and their transactions is crucial. and third, a flexible framework to implement monetary policy has allowed us to react swiftly to the instabilities during the crisis. in fact, most of our non - standard measures have focused on providing adequate liquidity to financial institutions and did not require changes to our operational framework. the adjustments were merely on the parameters of the existing framework. yet, the provision of liquidity by central banks needs to be linked to a clear assessment of solvency of the counterparties. only by being able to distinguish solvent from insolvent financial institutions can central banks continue to fulfil their mandate of being lenders of last resort to the financial system. detailed information on the health of financial institutions and the capacity of the central bank to resolve insolvent banks would ensure that liquidity provision is kept to the circle of solvent banks. conclusion let me conclude. during the financial crisis central banks assumed an active role as crisis managers. the ensuing episodes from the subprime crisis with the collapse of lehman brothers to the debt crisis has left the ecb as one of the few actors in guaranteeing stability over the past five years. one may argue that central banks are in an extremely difficult position, that they may suffer from the outcome of the recent crisis and that “ paradise is lost ”. 11 if paradise is lost, it may however be the right time to take on a new and a pro - active role in “ the real world ” or in the “ new normal ”. we will not