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

peter praet : interview in expansion interview with mr peter praet, member of the executive board of the european central bank, in expansion, conducted by mr daniel badia gonzalez and mr agustin monzon pena on 25 april 2016 and published on 29 april 2016. * * * after last week ’ s meeting, mario draghi repeated that interest rates cannot be cut indefinitely. are negative interest rates close to their limit? since negative rates were introduced in 2014, they have been very effective. so far, the positive effect of an improvement in financial conditions outweighs any negative effects that may be associated with banks ’ earnings capacity or other financial stability risks. on the other hand, it ’ s clear that negative rates cannot be reduced indefinitely to ever lower levels. we have to monitor how the measure is being transmitted to the broader economy. in march we decided to focus more on the credit easing part of the long - term monetary policy strategy that we started in june 2014. we decided to launch a new series of targeted longerterm refinancing operations ( tltro ii ) where banks can borrow funds at rates that can be as low as – 0. 4 %, on the condition that they lend that money on to the real economy. this is a way to ensure that the easing impact of the negative rates doesn ’ t stay within the interbank money market circuit, but reaches the broad economy. having said this, interest rates remain part of a broader toolbox. but deploying negative rates again in the future would require a distinct worsening of the inflation outlook. as mario draghi himself said, i don ’ t think we ’ re going to see these conditions materialising in the near future. but the instrument is in the toolbox in case risks re - emerge. if the positives outweigh the negatives, why are negative rates coming in for such criticism? i think the banks that are complaining aren ’ t looking at the whole picture. they see the immediate loss associated with the tax on the cash they are holding with the ecb. they see the fall in unit margins if their loan book is indexed to low market rates. what they do not mention is that low interest rates are spurring more demand for loans, so they are able to expand their operations and collect more margins overall. they also don ’ t refer to the fact that, in a better economy, the quality of their loan book improves. spanish banks, for instance, have experienced a dramatic