declined. see gordon, r. j., ( 2016 ), “ the rise and fall of american growth : the u. s. standard of living since the civil war ”, princeton u. p. and goodhart c., p. pardeshi and m. pradhan, ( 2015 ), “ workers vs pensioners : the battle of our time ”, prospect magazine, december. 3 adam, k and j. zhu, ( 2014 ), “ price level changes and the redistribution of nominal wealth across the euro area ”, journal of the european economic association, 14 : 871 – 906. 4 deutsche bank research, focus germany – difficult times for german savers, 4 october 2016. 5 bundesbank monthly report october 2015. 6 rostagno m., bindseil, u., kamps, a., lemke, w., sugo, t. and t. vlassopoulos, breaking through the zero line – the ecb ’ s negative interest rate policy, brookings institution, washington dc, 6 june 2016. 7 for a more detailed discussion of the challenges for euro area banks and the interlinkages with monetary policy see praet, p. ( 2016 ), “ monetary policy and the euro area banking system ”, speech at ecmi annual conference, brussels, 9 november 2016. 5 / 5 bis central bankers'speeches

that households with the lowest net wealth, whose debt payments are higher than their financial income, had an unchanged position. households with the highest net wealth, whose financial income is much higher than their debt, had the most marked fall in income. but while net financial income has fallen for the wealthiest households, the same is not true for wealth. wealthier households tend to have a greater amount of housing wealth and house prices have risen since the introduction of negative interest rates. extrapolating the hfcs forward using changes in equity, bond and house price data shows increases in the net wealth for every wealth quintile. 3 / 5 bis central bankers'speeches the ecb ’ s policy measures have been unambiguously positive for euro - area governments. germany alone saved approximately 28 billion euro in 2015 in lower than expected interest payments. such payments would ultimately have been financed from lower spending or higher taxes. broadly speaking, the lower income the household sector has received from income payments from government bonds, either directly or intermediated through the banking sector needs to be offset against lower tax liabilities now or in the future. indeed, research by deutsche bank4 shows that the impact of low and negative interest rates on the returns of german household financial assets has been limited so far. this was in part due to revaluation gains on the back of the ecb ’ s asset purchase programme as well as interest income from investment funds and insurance and pension products. it is still possible for savers to gain positive real returns by holding a diversified portfolio of assets. bank deposits may currently be giving a negative real return, but as research by the bundesbank also shows, negative real returns on bank deposits is the norm, not the exception in germany. 5 but savers are not the only sector potentially affected by negative rates. low and negative rates depress net interest margins for banks since lending rates fall, but there is a floor to deposit rates caused by the effective lower bound. to date, ecb staff estimates show the impact of our policy measures has been net positive for banks. 6 net interest margins have certainly been compressed, but that has been offset by a greater flow of lending as economic activity is higher, lower incidence of non - performing loans, again due to lower servicing costs and greater levels of activity, and revaluations of fixed income portfolios. over time, the revaluation effects will fade and the squeeze on net interest margins may intensify. future expected profitability may