2 distributional effects of unconventional monetary policy the ﬁnding that wealth inequality in germany has not changed substantially since 2014 is remarkable seeing as that time span covers a period of very loose monetary policy. given stubbornly low inﬂation, the eurosystem also adopted unconventional measures, including large - scale purchases of ﬁnancial assets. such measures have raised particular concerns about possible distributional effects. some fear that rich households could beneﬁt from such policies at the expense of less wealthy savers. indeed, research generally tends to ﬁnd that unconventional monetary policy measures increase wealth inequality in the short term by driving up asset prices. [ 34 ] at ﬁrst glance, this conclusion seems straightforward, since wealthy households typically own more bonds and shares. on the other hand, home owners may beneﬁt as well because housing prices will rise, supported by low interest rates. since housing property is more broadly distributed across households in the euro area, this effect could work in the opposite direction, thus reducing wealth inequality. [ 35 ] in germany, however, this may not be the case because the median household here does not own a house house. that said, if the very accommodative monetary policy stance had signiﬁcantly widened the gap between wealthy and less wealthy people in germany, one would have expected this to show up in the inequality measures provided by our survey. in addition, we need to take into account the impact of monetary policy on incomes. but lower interest rates not only reduce households ’ interest income from savings, they also reduce interest payments on their debt. with respect to both, a recent analysis by bundesbank researcher tetti tzamourani ﬁnds that wealthier households in the euro area have incurred the largest losses in terms of forgone interest income. more importantly, accommodative monetary policy has contributed to higher growth in output, employment and wages. low - income households are likely to be the main beneﬁciaries from this indirect channel, as their unemployment rate has probably declined disproportionately in response. these higher labour incomes may have allowed households with fewer assets to step up their saving and accumulate more wealth. and indeed, the proportion of households unable to save due to a lack of ﬁnancial resources has declined, according to our survey. overall, the discussion shows how [UNK] it is to determine which households are affected the most in their asset and income position by monetary policy actions, since monetary policy can in

andreas dombret : total impact – how regulation and crisis management will change the world ’ s financial landscape speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the frankfurt finance summit, frankfurt, 19 march 2013. * 1. * * introduction ladies and gentlemen i am delighted to conclude this year ’ s frankfurt finance summit. for the third year in a row, this event has provided an excellent platform for an exchange of views between high - level experts from politics, academia, as well as the financial and the official sectors to discuss financial market issues of major current importance. today ’ s conference has been asking about the total impact that regulation and crisis management will have on the financial landscape. the keynote speakers and panellists have given wide - ranging and, in some cases, diverging answers to that question. i am pleased to conclude this year ’ s summit by offering my views on some particular aspects of the issues discussed today. 2. future of the european monetary union let me start with the topic of the first panel this morning : the future of european monetary union. the crisis has highlighted shortcomings in the union ’ s institutional framework. let me remind you of three serious flaws. first, the deficit rules of the stability and growth pact were not only circumvented by some member states, but deliberately bent. second, member states ’ borrowing was not effectively curbed because financial markets failed to exert a disciplining effect on public budgets. third, contagion effects transmitted via member states ’ financial systems were largely underestimated. the introduction of the single currency led to a greater integration of european financial markets. the highly integrated market increased the probability of contagion effects occurring via member states ’ financial systems. hence, it amplified the existing close link between risks stemming from a country ’ s public finances and the state of its banking system. these flaws were a major factor in the emergence of the sovereign debt crisis and that fact makes a good case for strengthening the institutional framework of the monetary union. i welcome the measures that have been initiated. the reform of the stability and growth pact and the agreement on the fiscal compact are major steps towards sounder budgetary policies. with the agreement on a european banking union, we have made further progress in one important specific area. a banking union can help to strengthen financial stability by loosening the nexus between banks and sovereigns. a european banking supervisor would benefit from the ability to make cross