some responses to our public consultation [ 16 ], a number of concerns have been raised about the potential impact of a digital euro on the financial system. paradoxically, a digital euro may prove too successful. [ 17 ] if it is not properly designed, its main strengths – safety and liquidity – could affect monetary and financial stability on three fronts : first, financial https : / / www. ecb. europa. eu / press / key / date / 2021 / html / ecb. sp210210 ~ a1665d3188. en. html 4 / 14 10 / 02 / 2021 evolution or revolution? the impact of a digital euro on the financial system intermediation and capital allocation in normal times ; second, financial stability in times of crisis ; and third, the functioning of the international financial system. let me consider each of these in turn. effects on financial intermediation and capital allocation in normal times a digital euro could affect financial intermediation in several ways. it could attract payments activity from banks and reduce their payments - related income and customer information. it could also attract deposits, especially if it were offered without limits on individual holdings and at such attractive conditions that the public moved large amounts of deposits from commercial banks to central banks. the concern is that this could lead to less stable and more costly funding, lower bank profitability and, ultimately, lower lending, constraining the financing of the real economy. i would make two points here. first, the risk of bank disintermediation depends on the design features of a digital euro. we can and should design it in ways that prevent this risk. i will come back to this crucial issue in more detail. second, the ecb does not plan to interact directly with potentially hundreds of millions of users of a digital euro. we simply would not have the capacity or the resources to do so. financial intermediaries – in particular banks – would provide the front - end services, as they do today for cash - related operations. we would provide safe money, while financial intermediaries would continue to offer additional services to users. furthermore, beyond such design adaptations, economic thinking on the possible impact of a digital euro on financial intermediation is not clear cut. in fact, recent analyses emphasise that we should look at the broader economic implications of adopting a cbdc. https : / / www. ecb. europa. eu / press / key / date / 2021 / html

package of measures – also a very important point –, another small input is ultimately being provided and the lower limit has been reached. again, the low interest rates are, unfortunately, justified at this time. it is my conviction that they, of course, also entail risks, and therefore it is also my conviction that, if the conditions improve, then we should, of course, also allow interest rates to rise again. so you can give people a little hope when they look at their savings books and their pensions that things will not remain as they are, that you will also become active again and raise interest rates? well, things will remain as they are as long as the economic conditions remain unchanged. in our projections, inflation is too low over too long a period of time. and that is what we must respond to, because our mandate is price stability, and price stability means upwards as well as downwards. that means, if we have inflation that is too low, with all the dangers that i have already described to you, then we must also respond to that. is there, as a result of the cheap money, a threat of bubbles, for example in the property markets? that is often mentioned as one of the risks. and, yes, there are such side effects. if we are talking about possible bubbles in the german property sector, i can tell you that so far we cannot detect any. nor does the deutsche bundesbank see any. we can detect overheating here and there in certain areas in certain cities in germany. however, a bubble is not generated through rising prices alone, but also through a simultaneous rise in credit growth, which, in the end, is what finances such bubbles and such overheating. and we cannot detect that. i would say that, until the middle of the year at least ( i don ’ t have the latest figures yet ), credit growth in the property sector in germany was not extraordinary, but, rather, at the lower end of the scale. turning away from germany again and looking at europe more widely, for many small and medium - sized enterprises, particularly in southern europe, credit growth is unsatisfactory. for this reason, the ecb has now decided to purchase asset - backed securities ( abss ). this allows banks to clear their portfolios, i. e. what they have issued, from their balance sheets and to grant new loans again. that, i believe, is the basic idea of this