strong set of rules and respect for those rules. and things have gone very well for germany since the second world war. but this strict approach also has a weakness in times of crisis, particularly when a fast and flexible reaction is required. the reaction to the financial and sovereign debt crisis could have been quicker, and more flexible. that is my personal view. we have learned from the crisis and are in the process of fixing monetary union. but a few more steps still need to be taken. most of all, we need much closer coordination of fiscal policy – and a stabilisation fund that can absorb sudden significant shocks. and the banking union is not yet complete. french president emmanuel macron wants to eliminate those very shortcomings and thereby change the fundamental features of the euro area. his plans include a common european budget, a european finance minister and a common deposit insurance scheme for european banks. can you understand that the german government is resisting many of these plans? i think one of the reasons for hesitation on the part of many european governments is that the euro area is currently going through a phase of very robust economic growth. when times are good, it ’ s always difficult to undertake reforms, because there doesn ’ t seem to be any need. in the past, significant eu reforms were always decided on at the height of a crisis. but that also makes them more expensive. will it take another euro crisis before we have a banking union? you ’ d think that the banking union would be the easiest of these reforms. what we need most of all here is to introduce a common european deposit insurance scheme, so that the savings of bank customers are protected at the european level if a bank fails. that would further strengthen confidence in the euro, because our money essentially consists of bank deposits. right now, germany is balking at the idea of this kind of mutualisation – not least because many italian banks are still harbouring masses of bad loans on their balance sheets. nobody in this country wants to be liable for that. how can this problem be 2 / 4 bis central bankers'speeches solved? it ’ s already being solved. we have started to considerably reduce levels of what are known as non - performing loans in the euro area – by more than €300 billion since 2014. this reduction has come about as a result of the pressure exerted by ecb banking supervision. and that pressure will remain strong. there ’ s another point on which germany stands more or less alone against most other

euro area countries, and that ’ s interest rates. german savers are waiting to receive interest again on the money they have in the bank. i understand their concern. but german savers didn ’ t exactly have it better in the past. they might have got 2. 25 % interest on their deposits before the euro was introduced, but inflation was also much higher back then, at 2. 4 %. so what we call the real interest rate was negative then too. savers ’ money was eroded. but then there is the other side of the coin. low interest rates help public and private borrowers. people in germany are not making use of that. as i said before, the rate of home ownership is pretty low – and has even declined in recent years. that ’ s probably mainly to do with the steep rise in property prices. yes, but only in cities, not everywhere. germans could use the low lending rates to their own advantage. that would mean borrowing somewhat more, but many people just don ’ t want to do that. they could have taken much greater advantage of the situation. does that also apply to savers and investors? yes, people in germany leave too much money in their account instead of investing it in other, higher - yielding assets. all the same, can you give german savers reason to hope that interest rates will finally start to rise again in 2019? the governing council of the ecb decided that the eurosystem will continue to purchase assets at a rate of €30 billion each month until the end of september, and that interest rates should remain at their current levels beyond the end of the purchase programme. market participants currently expect interest rates to change around the middle of next year. as a result of the ultra - loose monetary policy of central banks, stock market prices are rising for the ninth year in a row. can this end without a crash? there will not necessarily be a crash. but history shows that stock markets cannot go up forever. the economy will go into a recession again at some point, and then there will also be a correction in the stock markets. nobody knows how big that correction will be. but no one is expecting a major crisis – unless there is a huge geopolitical crisis. that would be a different situation. the looming trade war could also be a risk for the markets. the import tariffs announced by us president donald trump on european products such as aluminium and steel are due to come into effect on 1 june,