Draghi: low rates result of savings glut, low productivity
{{#rendered}} {{/rendered}}
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."
{{#rendered}} {{/rendered}}
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.