Christine Lagarde: The fight against inflation

Speech by Ms Christine Lagarde, President of the European Central Bank, at "Deutscher Sparkassentag 2023", Hanover, 1 June 2023. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Hanover is a city of great significance.

Ludwig Erhard once described it as the emblem of German ambition and vitality. And, over the years, Hanover has been justifiably proud of its role in Germany's industrial development.

Nowhere is this more obvious than at the Hannover Messe.

Since inception in 1947, Hannover Messe has showcased the passion and economic potential of German workers and entrepreneurs to the world. The fair has become a symbol of the German Wirtschaftswunder, intimately linked to post-war German reconstruction and the subsequent economic and industrial success.

Success in which the German savings banks have played a pivotal role.

With a history spanning 200 years, you have consistently served as a reliable financial partner, supporting and promoting the German industry through crises and transformation. It is no wonder that around three out of four businesses in Germany are customers of the savings banks.

And your business is also the intersection point of our monetary policy and the economy.

We depend on banks to transmit our policy to firms and households – in good times and in bad. Our changes to interest rates feed through into bank lending rates, altering people's propensity to spend and invest – and ultimately the path of growth, employment and inflation.

In this sense, even though we have different goals, we are partners in the pursuit of price stability.

Today, inflation is too high and it is set to remain so for too long. We are determined to bring it back down to our 2% medium-term target in a timely manner.