So it was absolutely right to counteract this danger by lowering interest rates and to generally loosen monetary policy in order for us to bring inflation to a level below, but close to, 2%. The ECB has now bought government bonds and other securities amounting to € trillion. Interest rates have been at zero for years. You are offering banks unlimited credit, as long as they can back it with appropriate collateral. The official motivation for taking all these measures was to bring the inflation rate up to just below 2%. That is the ECB’s inflation target. But inflation is currently at 1.5% and the ECB has fallen short of 2% for years. So what is the point of it all? Again, we had to respond to the risk of deflation; and we have come nearer to our aim of maintaining an appropriate level of inflation over the medium term. Our actions have had an effect: lending to households has been boosted just as much as lending to companies. So we have seen an overall rise in the propensity to invest. The negotiated wage agreements also show that our measures are having an impact. Wage growth in the euro area stands at more than 2%, and it is even slightly higher in Germany. That will push up prices. But it is slower than we had thought. Why? The level of economic growth is one factor, but another is the labour market.
You can’t keep on building up debt, sooner or later you will have to repay it. But you are not putting it correctly. Ideally, we would not only pass on our debts to future generations, but also assets that were created from that debt. That can’t work if you are living permanently above your means. When a crisis breaks out, we are pleased if countries have a buffer enabling them to make anticyclical investments and stimulate growth. Only countries that have previously pursued sound economic policies have that buffer. 3/3  BIS central bankers' speeches