Directing savings towards the economy

 

There is an abundance of savings in France but not enough is directed at funding companies’ equity

France has one of the highest household savings rates in Europe, at 16%. But not enough of these savings are directed towards business financing, especially equity (65% of household savings are allocated to property, more than 40% of financial savings are invested in liquid, low-risk investments, etc.) despite historically low interest rates which should theoretically encourage a greater level of risk-taking by investors seeking a return.

The impact of new funding sources is still limited.

  • Promising development of employee savings schemes

A promising but overall limited development of employee savings schemes (€95 billion of assets under management, over 50% of which are invested in shares), with the number of companies with such schemes rising from 165,000 in 2006 to 270,000 in 2012

  • Potential of pension savings and pension funds

There are now two main channels for pension savings: pension-specific products (“Article 83” and “Madelin Law” plans; PERCO, PERP and PERE), and life insurance.

But the French financial marketplace has some areas of excellence

  • We have many assets… 

The Paris marketplace has well-known areas of excellence: asset management; euro bond issues; shares and derivatives based on shares; structured finance; back-office services, with some leading global players – strategic activities that are now threatened by offshoring risks. French investment banks are among the leading banks in Europe and play an essential role in market liquidity (for share, bond and derivative markets) but are penalised by European regulations on their structure and market activities.

  • …And can be strengthened further by specialising in added value

The Paris Marketplace can rely on elements that make it stand out: training, financial skills, research, risk management, regulated environment, etc. and on the capacity for innovation of French players (shown, for instance, by the development of employee share-ownership and employee savings schemes or the French school of derivatives).