The misallocation of French households' savings

One well-known reason for the misallocation of the savings of the French is their strong preference for liquidity and security, which creates a major discrepancy distance between the structure of savings and the economy’s financing needs. But this is a behavioural bias that must be accepted. Another reason, however, is all the distortions created by tax advantages and the administered setting of interest rates on many financial assets. These distortions lead to a break in the link between return, risk (liquidity, default, income variability) and the intrinsic return on financial assets, and therefore mean that a household's choice to invest in a particular financial asset is no longer guided by the risk characteristics of this asset or the profitability of the projects it finances. Also, the nature of this distortion is not the same for regulated savings and life insurance. This misallocation of savings obviously destroys long-term growth, and is closely linked in France to the extent of regulated financial savings and tax choices .