banks have to rethink their activities fundamentally. i mention here digitalization, which is a very big challenge for the banks. it has the potential to change the business model fundamentally. the interest rate is not a favourable factor, but it is one of the factors. and as long as you have a positive impact on the economy from negative rates, you have better growth, fewer npls, so we have seen positive factors for banks. the problem for bis central bankers ’ speeches banks is not 2016, it is the medium term, if the situation becomes persistent and the business model is not adjusted, then profitability becomes a major issue. the staff projections don ’ t include the impact of the new measures. what will be the impact on inflation and growth of the package? the measures we took should bring us close to the 2 per cent target at the end of 2018. but don ’ t forget, the measures we take like the app are supposed to remain in place as long as inflation has not reached a sustainable adjustment in the path of inflation. it must be sustainable. we are not yet there. in the forward guidance we said : we expect the interest rates to be low or lower for an extended period of time, and well past the horizon of our net asset purchases, which currently have an horizon to at least march 2017. can i ask you about what ’ s left in the toolbox? could we see “ helicopter drops ”? there has been a lot of skepticism recently about monetary policy, not only in delivering but in saying “ your toolbox is empty ”. we say, “ no it ’ s not true ”. there are many things you can do. the question is what is appropriate, and at what time. i think for the time being we have what we have, and it is not appropriate to discuss the next set of measures. but in principle the ecb could print cheques and send them to people? yes, all central banks can do it. you can issue currency and you distribute it to people. that ’ s helicopter money. helicopter money is giving to the people part of the net present value of your future seigniorage, the profit you make on the future banknotes. the question is, if and when is it opportune to make recourse to that sort of instrument which is really an extreme sort of instrument. there are other things you can theoretically do. there are several examples in the literature. so when we say we haven

peter praet : interview in la repubblica interview with mr peter praet, member of the executive board of the european central bank, in la repubblica, conducted by mr ferdinando giugliano and ms tonia mastrobuoni on 15 march 2016 and published on 18 march 2016. * * * can you explain why you took such a big package of measures last thursday? you have to put these decisions in the context of heightened risks to our price stability objective. external shocks, mainly originating from emerging markets, high market volatility and the crucial need to avoid second - round effects warranted a strong and comprehensive package to counteract these adverse forces. we don ’ t have a gloomy assessment of the economy, domestic conditions have improved, financial conditions have clearly improved. but it is still very fragile, and external shocks can easily trigger a vicious circle, with further downward pressure on inflation. we wanted to ensure that this did not happen, in line with our mandate. it was decided by the vast majority in the governing council, that we had to act very forcefully to ensure an even more accommodative monetary policy stance. what can be said about the composition of the measures? we discussed the pros and cons of the different measures. on the negative deposit rate : it is clear that it served us very well in the past, it has been quite efficient in easing financial conditions, including the exchange rate, as a natural by - product of differences in the monetary policy stance in the major currency areas. as we proceeded on the path of negative interest rates on our deposit facility, it was also clear we had to look at the impact on the profitability of the banks. banks are very important for the monetary transmission mechanism, so you have to look at what is the impact of the package on the banking sector. against this background, we decided in favour of a package which still made use of changes in the ecb interest rates but increased the weight of measures aimed at credit easing. since the markets had already anticipated three cuts in the deposit rate this year many money markets traders had to turn their positions. however, with a little bit more time to scrutinize and digest the complex package, markets and analysts finally tuned again. were you surprised by the strength of the market reaction? i expected that the short end was going to be repriced but that the rest of the package would dominate. looking through some volatility