What solutions are available when the economy needs risky financing and savers seek security?

In this Flash we look at the cases of the euro zone and France. The contradiction to be resolved is as follows: Savers seek security; Financing the economy is risky. How can this contradiction be reconciled? Banks and insurers are currently required to hold very large amounts of capital so they can absorb potential losses on risky assets. This solution is inefficient since it requires financial intermediaries to hold significant amounts of costly capital; One solution would be a far more important role for the government or for public-sector banks in the risky financing of the economy; Another solution would be to stimulate savers’ demand for risky assets by reserving tax benefits for risky assets; A last solution would be to reduce the liquidity of financial products (for example life insurance); if a life insurance policy has to be held for a long period of time, the risk associated with holding it is reduced even if the policy is invested in risky assets (equities, corporate bonds).