Some might say that they have taken us close to the limits of the ECB’s mandate. And others might even argue that they have taken us past those limits. At the same time, many people here in Germany argue that the ECB’s policy has many negative effects. They feel that low interest rates penalise savers, hurt banks and destroy wealth.
It is true, of course, that low interest rates have many effects. Some of these are intentional – they make it cheaper to borrow money, spur investment, revive growth and, eventually, stimulate inflation. But they also have unintended side effects. So yes, for savers low interest rates do mean that their money accumulates at a much slower pace than before.