In these times of investment needs, in order to respond to energy, environmental, economic, and budgetary transitions, public opinion is tempted to seek answers (culprits?) among the so-called “wealthy” members of society and “big business.” Nothing new in itself, except for the inclusion of savings in this never-ending quest for new scapegoats.
The age-old debate that divides economists is back in the news, with the question of whether savings (described in France as excessive) – but immutable as a republican virtue – could become a brake on investment, growth, employment and, ultimately, demand itself. This new publication from the REF, which draws on a host of prestigious economists, is timely. In three richly documented chapters, the authors contribute factual elements, context, and a long-term strategic vision to the debate.
The first chapter provides an overview of savings trends in France compared with Europe, while the second chapter examines the heterogeneity of savings behavior in several dimensions (in relation to the holding of risky assets, household characteristics, product life cycles, and the role of public policy). Finally, the third part sheds light on the important issue of mobilizing private savings to benefit the French and European economies.
It should be noted that in France, although individuals save a lot (15% of their income on average, which is higher than in most OECD countries), they do so rather poorly, favoring liquid and less risky assets. Low stock ownership and the increase in foreign stock holdings have negative consequences in terms of sovereignty and competitiveness for our country. The need for regulations that place less emphasis on “safe and liquid” assets is being called for by all financial players and insurers, banks, and asset managers. The authors argue for accelerating the implementation of a genuine “Savings and Investment Union,” identifying four priority areas: redesigning market infrastructure to reduce costs, unifying capital market supervision for better risk sharing, reviving securitization, financing the green transition, and promoting the European venture capital industry that finances innovative companies.
As this remarkable publication shows, the new path that seems to be opening up for savings is full of great promises… no doubt still accompanied for a long time to come by the popular saying: “If you don’t save a penny, you’ll never have two.”
Marie-Laure BARUT-ETHERINGTON is a Deputy GM at the Banque de France. Pierre BOLLON is Director of European Affairs at the EIF.
Jean-louis CHAMBON