European savings: why they matter, how they’re changing and what more can be done
The desk argues that the ongoing shift in European savings behavior presents an opportunity for increased investment and economic growth. This potential stems from the significant portion of Europeans, specifically 30%, who express interest in transitioning their savings into investments, as highlighted in the recent analysis by Marieke Blom and colleagues . With household financial savings rising to approximately 6% of income post-pandemic, the reinvestment of these funds could enhance household wealth and support a broader economic recovery, particularly vis-à-vis the contrasting performance in the US where household consumption has been buoyed by wealth effects. Rapid adaptation by policymakers could further catalyze this trend.
What the desk is arguing
The desk frames this as an influential moment for European economic resilience, primarily emphasizing that a noticeable 30% of surveyed Europeans would consider investing their savings—a shift that highlights a latent growth potential. Per the full note , the current household savings rate at 6% is about two percentage points higher than pre-pandemic levels and signals a readiness for more proactive investment strategies.
Further analysis indicates that had European households chosen to invest a quarter of their deposits, the additional wealth generated could have surpassed €1.17 trillion over two decades, a significant figure showcasing the untapped investment potential within the region. Thus, the desk posits that sustainable economic growth in Europe hinges not just on the accumulation of savings but on strategic deployment into productive investments.
Where it sits in our coverage
The current consensus target for EUR/USD is 1.075, with a range stretching from 1.04 (BofA) to 1.10 (JPMorgan): - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This insight aligns closely with jpmorgan, which has taken a particularly bullish stance on the euro, while bofa holds a contrasting outlook at the lower limit of the consensus. Given the potential boost from renewed investment activities discussed, the desk's call trends towards the upper boundary of market expectations.
How other firms see it
In general, firms like jpmorgan and others that view the increased prospect for investment as a positive signal align with our thesis regarding the potential uplift for the euro. Conversely, bofa remains skeptical, focusing on the risks to economic performance related to persistently low investment levels.
For traders, tracking EUR/USD offers insights into the market's response to European earnings reports and policy changes, particularly as they pertain to the ECB's strategy on managing interest rates amidst this changing investment landscape.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 0130% of Europeans express interest in moving savings into investments.
- 02Household savings have risen to 6% of income since the pandemic.
- 03Strategic reinvestment in the economy could yield an additional €1.17 trillion in wealth.
- 04BofA maintains a cautious outlook on the euro compared to more bullish stances.
Market implications
Traders should monitor the 1.075 EUR/USD level; a breach above could indicate a bullish consolidation reflecting improved investment sentiment in Europe.
Risks to this view
If monetary policy shifts focus away from encouraging investment or if savings rates revert sharply, it could dampen the expected growth trajectory, negatively impacting the euro.
Reports Report European savings: why they matter, how they’re changing and what more can be done Published 07:59 How Europeans save matters not only for their own finances but also for the broader economy. More investment means more household wealth and more capital to support growth. Our analysis shows substantial untapped potential: 30% of Europeans with savings say they'd consider investing.
The shift is already underway and policymakers can help to speed it up Marieke Blom , Charlotte de Montpellier , Amrita Naik Nimbalkar and Sebastian Franke Download PDF Executive summary Europeans are often perceived as super-savers. But this has only become true in recent years. Our analysis shows that household financial savings (the share of income set aside for financial assets or reducing debt) stand at around 6% of income , roughly two percentage points more than before the pandemic.
That shift has real economic consequences. Had households saved less, demand for goods and services across Europe could have been significantly stronger. Americans, who have benefited strongly from positive wealth effects, have reduced their financial savings relative to historical norms, which has supported demand for US goods and services.
While this doesn't fully explain the recent growth gap between the US and Europe, positive household wealth effects have clearly been an important source of demand in the US economy. The bigger issue, however, is not how much Europeans are saving but how they are putting their savings to work. European households have missed out on significant investment returns over the past two decades.
We calculated how much additional wealth could have been generated if households had allocated just a quarter of the money placed in deposits to investments instead. To do so, we compared the actual returns Europeans made on investment funds, listed equities and deposits between 2002 and 2025. Our estimates suggest that household wealth could have been €1.17 trillion higher, equivalent to 7% of eurozone GDP, over the period if just a quarter of deposit inflows had been directed to investment funds, and as much as €2.79tr higher, or about 18% of GDP, if the money had been invested in listed equities instead.
And there's more. Household savings also matter for what economists call the ‘supply side’. In Europe, people put their money in the bank.
Banks, in turn, use those deposits to finance businesses, but must do so in a way that ensures they can repay their depositors. This model works well for lower-risk activities but is less suited to financing high-risk, high-growth business models. An ample supply of risk-bearing capital is especially important for high-growth sectors, such as technology, which have the potential to boost economic growth in Europe.
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