Savings After intermediation: A Summary of Key Findings
This text details how French household savings are channeled through financial institutions and ultimately used to finance the economy. Here’s a breakdown of the key takeaways regarding savings after intermediation (meaning, where the money ends up after going through banks, insurers, etc.):
1.overall Allocation (Q2 2025):
* Shares: €874 billion (held via financial institutions)
* Bonds: €2,022 billion (held via financial institutions)
* Unlisted Shares (Directly Held by Households): €913 billion (a meaningful increase from €570 billion in 2019)
2. Key Intermediaries & Their Roles:
* CDC Savings Fund: €399 billion – Primarily funds social housing and local public sector (49%), with the rest in financial securities (bonds, stocks, cash – 51%).
* banks: €1,728 billion in deposits & savings accounts – 60% goes to loans, 12% to bonds, 5% to stocks, 8% to derivatives, 9% to cash.
* Insurers & Pension Funds: €2,246 billion in investments – 51% debt securities, 34% UCI shares, 10% shares. After transparency, this becomes 65% debt and 25% equities. They are key players in financing the economy (businesses,infrastructure).
3. Shifts in Allocation (2019-2025):
* Increase in Equity Financing: The share of savings financing companies has risen from 36% to 40%, driven by dynamic valuations.
* Decrease in bond Financing: The share of savings going into bonds has decreased, both for sovereign (12% to 11%) and non-sovereign debt (26% to 20%).
* Growth in Unlisted shares: Direct household holdings of unlisted shares have significantly increased (from 10% to 14% of financial assets).
4. Trends & Observations:
* financing the Real Economy: Despite a preference for security and liquidity, French household savings largely contribute to financing businesses, social housing, and public administrations.
* Emergence of New Savers: Online brokerage accounts and neo-brokers are attracting younger, more risk-tolerant savers who view equity investments (and cryptoassets) as short-term and speculative.
* Diversification: Insurers and pension funds are diversifying their investments and reducing their holdings of government debt.
* No Structural balance Sheet Changes: The shifts in allocation are primarily due to arbitrage between asset classes, not fundamental changes in how financial intermediaries operate.
In essence,the text argues against the idea of “sterile” French savings,demonstrating that a substantial portion is actively working to fund the economy through robust financial intermediation,with a growing trend towards equity financing.