The need for increasing intermediation of savings in the euro zone

Two developments are leading to a shift in the structure of savings in the euro zone towards risk-free assets: The repeated crises and the resulting rise in risk aversion and uncertainty; Population ageing. But the economy will increasingly need risky financing to finance new technologies, reshoring of strategic industries and support for sectors in difficulty after the coronavirus crisis. The conflict between savings that are less and less risky and financing requirements that are increasingly risky will require increasing intermediation of savings (by banks and insurance companies) and a growing capacity of institutional investors to have risky assets and risk-free liabilities: being able to hold high levels of capital and sell less liquid financial assets with longer maturity (for example, life insurance contracts).