because a recession allows the expected yields to decline the returns fall in almost all forms of investment. at the same time, in periods of uncertainty, people want to save. then there is significantly more liquidity available overall than is sought for investment. and interest rates come under pressure. in other words, in those circumstances the remaining borrowers who are willing to invest would benefit from the situation, while savers would suffer from falling interest rates. this finding corresponds to a remarkable extent to the development we have seen in recent years. with higher interest rates savers would not have been favoured, as those rates would have contributed to downward risks to price stability, deepened the recession and endangered jobs in germany as well. and if you are jobless you can hardly save for your old age. in the current environment, a more expansionary monetary policy is thus the necessary reaction of the central bank to maintain price stability. the ecb ’ s monetary policy, which will always rigorously fight inflation that is too high or too low, is therefore appropriate. the prosperity of savers in germany in the future depends mainly on the success of reform efforts at the political level throughout the euro area. because – as i said – if the interest rates for savers in germany are in part so low, it ’ s because german government bonds are in demand. other countries in the euro area, however, can only place their securities with investors at relatively high interest rates. although monetary policy can reduce this fragmentation of the markets in the euro area, it cannot completely eliminate it. this can only be done at the political level. europe has to bis central bankers ’ speeches establish a functioning banking union which restores the confidence of markets and savers in all credit institutions. the countries have to return to a sustainable fiscal policy and make efforts to create growth. and then the savings of germans will earn higher interest rates again. bis central bankers ’ speeches

##lding, 15 january 2016. see cœure, b., “ the future of europe : building on our strengths ”, speech at the plenary session on “ the future of europe ” during the fifth german economic forum in frankfurt am main, 6 december 2013. see cœure, b., “ structural reforms : learning the right lessons from the crisis ”, speech at the economic conference organised by latvijas banka in riga, 17 october 2014. public investment in the euro area was 3. 2 % of gdp for 1995 - 2005 compared with 2. 6 % projected for 2016, while private investment in the euro area was 18. 7 % of gdp for 1995 - 2005 compared with 17. 3 % projected for 2016. see european commission, annual macroeconomic database, 2015. bis central bankers ’ speeches the same logic applies to emu. risk reduction on its own will not be sufficient ; we will need to better share the remaining risk as well. the two are complementary. for banking union, this means reducing risks in banks in parallel to establishing a common deposit insurance scheme and a robust fiscal backstop. this is what the commission has proposed, and this is why we support their approach. when we speak about fiscal and economic policies, combining risk sharing and risk reduction means that more pooling of fiscal resources – which i believe is ultimately necessary to provide better insurance against shocks – will have to be accompanied : ( i ) by a new convergence process which ensures that all economies have a similar resilience to shocks ; and ( ii ) by initiatives to restore the credibility of our fiscal rules. these two elements are all about preventing risk sharing from becoming a one - way street, in other words preventing risk sharing from turning into risk shedding. joint decision - making on matters of common concern the second principle we might be able to agree on is that there are policy domains where coordination via rules has run its course and is no longer a viable substitute for joint decisionmaking within common institutions. the argument here has two parts : on the one hand, there should be no doubt that the rules that are in place have to be respected. this is not some kind of theological dogma. this is because it is economically and politically the right thing to do – not only to avoid the macroeconomic instability stemming from excessive imbalances, but also to re - establish mutual trust, which is the precondition for progress. think about the high public debt levels of many member states.