Euro zone: What happens when all savings go into bank deposits?

In the recent period in the euro zone, savings have concentrated in bank deposits at the expense of other financial assets (equities, bonds). This results from the fact that the perceived risk of equities is high and long-term interest rates are too low. What happens if savings mainly go into bank deposits? The financing of the economy is increasingly bank-based and decreasingly market-based, leading in particular to greater borrower default risk incurred by banks; Banks’ need for capital will increase sharply, as their risk-taking will increase and their balance sheets will expand again. The concentration of savings in bank deposits will lead banks to finance the economy, but will also mean that they can no longer securitise the loans they have granted. If savings concentrate in bank deposits, the banking sector will therefore play a larger role in the economy but will become risk ier .