used in accordance with the house rules, which hang on the door. when you go in, you know what is expected of you. the quantitative easing programme has had an immediate effect on bonds, shares … some fear that a bubble is forming, that risks are not being assessed correctly when granting loans … there is an element of truth about everything that is said regarding a measure which is as unconventional as this one. but sometimes you have to take risks and use such measures, which may have unfortunate consequences. there are, however, tools to address those ( banking supervision, resolution, taxes … ) and the european architecture is also being strengthened further. qe has been an appropriate response to an extraordinarily risky situation that we had not seen for several generations. how do you see the situation in spain? its growth forecasts are among the highest in the eu, but does it serve as an example when levels of unemployment and indebtedness are so high? there are many models : ireland is one, and spain too … employment is a lagging indicator. moreover, unemployment figures, especially youth unemployment, have already fallen to levels below those at the time that the bank bailout was requested. indeed, they are above 2008 levels, but i can still recall the levels of 20 years ago, so it ’ s all relative. they have always been higher than in the rest of the eu, even during the boom years. but i believe the mentality in spain has changed. the ability to acknowledge the reality and to adapt to it shows that it is a mature democracy. that is the type of mortar we need for a monetary union. spain feels particularly underrepresented in the eu since you took, in 2012, the rotating seat on the ecb ’ s executive board, which it had occupied since the institution ’ s creation. do you think that, given its demographic and economic weight, the situation should be corrected? passports should play a minor role in european representation, especially in supranational institutions like the ecb. quotas are inappropriate. when we enter the ecb ’ s governing council meeting room, we leave our passports in the cloakroom. the only conditions laid down by the treaty are competence and reputation. that ’ s quite different however in intergovernmental institutions where appointments are the result of allocation. bis central bankers ’ speeches de guindos in the eurogroup? the ecb does not vote. where i do agree is that making the presidency

effect into effects due to aggregate demand, credit risk, funding costs and the business cycle, the real interest rate that firms have to pay for credit stands out as the factor explaining the largest share of the cross - country variation in credit constraints. such an analysis based on our survey on sme finance indeed suggests that for each 100 basis points by which lending rates decline, access to finance for euro area smes will improve by about 9 %. emerging case studies also support the view that, by weighing on bank balance sheets, the sovereign debt crisis has led banks to tighten credit supply. for example, micro evidence from bank lending to smes in italy suggests that since the start of tensions in sovereign debt markets, lending by banks exposed to sovereign debt has grown by 3 percentage points less than lending by unexposed banks, and that the interest rate they charge has been between 15 and 20 basis points higher. these effects are stronger for banks relying on domestic interbank funding. 8 the bank lending survey by the ecb is another source of information on realised bank lending standards to smes. according to the survey, after a period of rapid tightening, lending standards across the euro area had stabilised by the end of 2009 and the beginning of 2010. however, starting in the second quarter of 2010 credit standards started tightening popov, a., and van horen, n., 2012. the impact of sovereign debt exposure on bank lending : evidence from the european debt crisis. ecb mimeo. for evidence from the u. s., see ivashina, v., and b. becker, 2011, cyclicality of credit supply : firm level evidence, harvard business school working paper 10 - 107. for evidence from the euro area, see de fiore, f., and h. uhlig, 2011, bank finance versus bond finance, journal of money, credit, and banking 43, 1399 – 1421. a credit - constrained firm is a firm which a ) is rejected when applying for a loan, b ) receives less than 75 % of the desired loan amount, or c ) is discouraged from applying because it believes its loan application will be rejected. bofondi, m., carpinelli, l., and e. sette, 2012. credit supply during a sovereign crisis. bank of italy mimeo. bis central bankers ’ speeches again, and in december 2011 overall euro area lending standards to smes were twice as restrictive as two years earlier.