fall in non - performing loans, which would have been unthinkable if we had kept rates higher. it is certainly easy to blame the ecb, but the truth is that the level of the interest rates is not the main problem for many banks. the problems are, rather, the need for some business models to evolve in directions that strengthen banks ’ capacity to successfully face competition, as well as tougher regulation. also in spain, the squeeze on unit margins is not only due to low interest rates, but is also the result of competition. part of this may also be due to the fact that the banking sector in the euro area has not undergone sufficient consolidation. the new measures are improving liquidity conditions for the banking sector, but can they provide solutions to its capital needs? our measures have had a positive impact on banks ’ profitability and thus, indirectly, on their capital positions. for example, the relatively favourable lending conditions enable them to reduce their funding costs. as i said, the new tltros will reinforce these beneficial effects on banks ’ profits. more than in the past, when our long - term liquidity operations were positive mainly for banks ( including of course spanish banks ), the new tltros will benefit both banks and the real economy. bis central bankers ’ speeches do you think the new refinancing operations ( tltros ) will be welcomed by the banking sector? we believe that the new tltros will be even more favourable than the previous series and will be successful in helping to ease financing conditions. even if the banks don ’ t turn to us because they don ’ t want to be overly dependent on the ecb, knowing that they have this option will give them sufficient comfort to keep credit flowing to the economy on attractive terms. the ecb ’ s actions have also provoked criticism from political circles, particularly in germany. how far can the ecb go without political backing? it ’ s our belief that we have a lot of political support in europe. our policies are dictated by decades of monetary thinking and best central bank practices. the deutsche bundesbank has been the champion of this thinking and these practices. central bank independence and low and steady inflation are written into the german founding law. in my opinion, the alternatives proposed by those criticising us are not very credible. if we raised interest rates now, it would no doubt abort the recovery of the economy and compromise the achievement of our objective. and what ’ s your assessment

. so as things stand right now, there is no reason to worry about the euro area recovering in 2015 and 2016. mind you, all these factors are short - term. one possible concern is the ability to boost the potential growth of the euro area, which has been hit hard by the crisis. that ’ s more a long - term issue, though. aren ’ t you afraid that one of the effects of qe will be to create price bubbles for certain assets? does the ecb have the means to combat these side effects? our actions do have an impact on asset prices ; you just have to look at the way markets have risen since the public asset purchases started. we monitor risks to financial stability very closely : tommaso padoa - schioppa used to say this was in central banks ’ dna. but let ’ s not forget that the objective of monetary policy is price stability. financial stability involves different tools. as far as we are concerned, it ’ s a question of bank regulation and “ macroprudential ” tools. there is one effect you didn ’ t mention : this policy cuts governments ’ interest rate costs and potentially gives them room for fiscal manoeuvre again. that is not our objective. monetary policy serves to guarantee price stability and support the productive economy. where countries have room for fiscal manoeuvre, lowering rates bis central bankers ’ speeches increases the scope that can be used to support growth, particularly by increasing investment. where countries do not have this room for manoeuvre, such as france, my advice would be to use the lower rates to lend credibility to debt reduction, rather than to increase spending or cut taxes. however, that ’ s not a matter for the ecb to decide. it ’ s the european commission that is the guardian of the fiscal policy framework in the euro area. would you say that qe is helping immunise the euro area against the risk of an exit by a member state, even if this is not its objective? i wouldn ’ t put it like that. it is certainly reducing the risk of contagion in the euro area, but the context right now is very different from 2012. the problem for countries such as portugal, spain and ireland is no longer an exit from the euro area, far from it. their main concern now is how to capitalise on the return of growth in order to step up the reduction in unemployment and return to normal as quickly as possible. i am