The structure of financial savings in the euro zone makes it difficult to finance the economy

We look at how euro-zone residents’ financial savings are divided between: Money; Public sector bonds; Other bonds (corporate, bank); Equities. The proportions of liquid and money-market assets and public-sector bonds are high. If euro-zone residents prefer money-market assets and public-sector bonds, then it becomes harder for the private sector to obtain financing, especially in a situation where banks are weakened and find it difficult to transform risk-free deposits into risky loans (their intermediation capacity is reduced).