Draghi: low rates result of savings glut, low productivity

FILE - In this Thursday, Sept. 8, 2016 file photo, President of European Central Bank Mario Draghi speaks during a news conference in Frankfurt, Germany, following a meeting of the ECB governing council. European Central Bank head Mario Draghi is defending the current low level of interest rates against charges they hurt savers and favor the wealthy. Draghi said in a speech in Berlin on Tuesday Oct. 25, 2016 that low rates are a symptom of underlying weak investment and excess savings, which central banks must take into account. (AP Photo/Michael Probst, File) (The Associated Press)

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The president of the European Central Bank, ECB, Mario Draghi, delivers a speech in Berlin, Tuesday Oct. 25, 2016. European Central Bank head Mario Draghi is defending the central bank’s current low level of interest rates and stimulus measures against charges they hurt savers and favor the wealthy. Draghi said in a speech in Berlin on Tuesday that low rates are a symptom of underlying weak investment and excess savings, which central banks must take into account. He said low rates support consumption and jobs _ benefits that are “always socially progressive.” He said that, overall, “a faster return to full employment should in turn contribute to lower future inequality.” ( Wolfgang Kumm/dpa via AP) (The Associated Press)

The president of the European Central Bank, ECB, Mario Draghi, sits in the audience ain Berlin, Tuesday Oct. 25, 2016. European Central Bank head Mario Draghi is defending the central bank’s current low level of interest rates and stimulus measures against charges they hurt savers and favor the wealthy. Draghi said in a speech in Berlin on Tuesday that low rates are a symptom of underlying weak investment and excess savings, which central banks must take into account. He said low rates support consumption and jobs _ benefits that are “always socially progressive.” He said that, overall, “a faster return to full employment should in turn contribute to lower future inequality.” ( Wolfgang Kumm/dpa via AP) (The Associated Press)

FRANKFURT, Germany – European Central Bank head Mario Draghi is defending the current low level of interest rates against charges they hurt savers and favor the wealthy.

Draghi said in a speech in Berlin on Tuesday that low rates are a symptom of underlying weak investment and excess savings, which central banks must take into account. He said low rates support consumption and jobs — benefits that are "always socially progressive."

He said that, overall, "a faster return to full employment should in turn contribute to lower future inequality."

The ECB has cut its benchmark rate to zero, and pushed down longer-term rates through bond purchases. The steps have frustrated savers seeing low returns on conservative investments, while boosting stocks and other assets that are often held by more wealthy people.