Excess of Saving and Lack of Investment: Which Solutions?

François Villeroy de Galhau Gouverneur, Banque de France


The European economy is facing a real challenge regarding the financing of its growth opportunities. It needs to diversify corporate financing, channel households savings towards long-term and riskier investments and achieve a genuine European capital market. This should be achieved through a real « Investment and Financing Union ». Setting the conditions of an efficient capital allocation of the European financial system is essential to support productive investment. Hence a new significant increase of capital requirements for the banking system must avoided. Increasing equity financing of corporations demands a modification of the saving fiscal rules and the supply of new saving products for households. Financial regulation also has to guarantee a plurality of the different capital financing channels and a better control of the shadow banking institutions is necessary to achieve its stability.


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