Transcription
Like 58 million French people and myself, you probably have a savings book. Perhaps your parents or grandparents opened one for you at birth, or maybe you opened it yourself later to deposit your first savings. I opened mine when I was 16. This typically French savings book is the best-known savings product, but it only holds a small part of the financial wealth of the French, which amounts to 6,500 billion euros. Lately, I have read and heard a lot that the French are the champions of savings in Europe, but that our savings are poorly used. Do the French save too much, Emmanuel? Yes, the French save far too much. Household savings serve a great many purposes. It is the cornerstone of the financial system. So, do the French save poorly? I am Élise Coutenuyan, a video journalist, and welcome to this new macro dedicated to savings. Let's start with an overview of savings in France. The total net worth of French households amounts to nearly 15,000 billion euros in 2024. It is divided into two main categories. Non-financial assets, meaning real estate, housing, and land. This accounts for 58% of gross household wealth, and financial assets, which represent 42% of gross wealth. This second category is household financial savings. This is what interests us for this topic. As Philippe Crevel, director of the Savings Circle, explains, financial savings include the livret A, the livret développement durable et solidaire, life insurance, of course, stocks, and bonds. Household financial savings totaled 6,596 billion euros in the second quarter of 2025. To give you an idea, that's about twice the amount of the French debt. This stock of savings is fed by a flow, meaning what we set aside each month. Economists calculate this with the savings rate. It is the portion of gross disposable income that is not consumed. Currently, in France, it stands at around 18%. That's huge. It's a level not reached since 1979. Usually, it's closer to 15% in France. Since Covid, it's mainly financial savings that have increased. It has doubled from 4% to 9%. While 90% of French households have money set aside, it seems important to me to point out that we often have a misconception about savings, as Marie Laore Barut and Terrington, who deals with these savings issues at the Bank of France, explains to me. When we talk about savings, we often have this idea of the "basine," of the working classes saving pennies, whereas in fact, savings are extremely concentrated. According to INSEE, only four out of ten households manage to set money aside, and naturally, the amounts vary greatly depending on income. The poorest 20% set aside an average of €30 per month, and the richest 20% set aside €1,300 per month. Now that we've said all that, remember that the French are often criticized for saving too much. And indeed, France ranks among the champions of savings in Europe, just behind Germany. But if the French save a lot, it's also because we have fewer expenses than in other countries, thanks to the French social model. In France, we have a state that covers a certain number of expenses for citizens. If I take just health and education, it covers a larger portion than most neighboring countries, including European countries. One of the things that can explain why the French savings rate is so high is that the state actually covers a significant portion of these expenses. These health, education, or retirement expenses covered by the state mean that French people don't have to spend that money from their net income, and therefore, it's money they can save. There is also another advantage to the high savings of the French: it helps to cushion economic shocks. If the French save more out of a precautionary reflex, it also strengthens their financial resilience. And in case of a crisis, we will first draw from savings, and the ranks of those in debt will not swell as we have seen in our country, as we have seen in Spain during the financial crisis, or in Italy, or obviously in the United States, which is often cited as an example. All of this nuances the idea that the French save too much, but what they are also criticized for is saving too cautiously. All the figures show it. What the French prioritize for their savings is capital security and liquidity, meaning that their savings are guaranteed and immediately available in case of need. This is the famous safety net. This prudence is reflected in the financial investments chosen by households. What interests us here is to distinguish between risky and low-risk financial products. It will be a bit technical, but it's important. On one hand, there are interest-rate products, which is when banks use savings to lend money in exchange for interest. This is very low-risk and less profitable. And on the other hand, there are equity products, particularly stocks. This is riskier because it depends on stock market fluctuations, but the returns can be more advantageous, and above all, they allow companies to strengthen their capital. In France, low-risk interest-rate products represent two-thirds of savings. In this category are euro-denominated life insurance and regulated savings accounts, which are the preferred investments of the French. Equity products, on the other hand, represent only one-third of savings. Since Covid, the French have been taking slightly more risks in their investments, for example, with ETFs, but they are traditionally more cautious than Anglo-Saxons. This tradition dates back to the 18th century. Why? Because there was the bankruptcy of the Law bank under Louis XV. It's very, very old. There were the assignats during the French Revolution. There was then the crisis of rentiers in the 1930s. And this accumulation means that today, even 200 years later, something remains, a caution regarding financial systems considered more capitalist. Because of this attraction to low-risk products, we tend to think that French savings are useless. For example, I long believed that the money in my savings book was dormant, as is often said, when in fact, that is far from being the case. To find out how the money in regulated savings accounts, the livret A and its smaller siblings, the LDDS and the livret d'épargne populaire, is invested, I went to the Caisse des dépôts et consignations to meet the financial director of the savings fund, Stéphane Magian. Today, the Caisse des dépôts' savings fund manages 60% of deposits in regulated savings accounts, which is nearly 400 billion euros. This money is used by the savings fund to make loans. We often say that we go where banks don't. We operate on a very long-term basis. We make loans up to 80 years, and these loans finance many very useful things. For the savings fund, the number one priority, which is also mandated by law, meaning it's written at the very top, at the forefront, I would say, of the institution, is "You will finance social housing." So, this is truly our number one objective. My colleague Lady has also made a very good video on social housing. We always finance infrastructure that is essential for the French population, obviously housing. But we can also think of other essential needs. This includes financing sustainable, meaning decarbonized, mobility. The second priority will be the energy renovation of public buildings. We have renovated about 5,000 schools out of the 10,000 in the country. In 2025, the Caisse des dépôts granted 40 billion euros in new loans. So, all of this is possible because the French have confidence in the savings book. Therefore, the savings in the savings book are very stable. Of the 400 billion euros managed by the savings fund, half is used to finance these loans, and the other half is invested in the markets, especially in bonds. The primary role of financial assets is to ensure the liquidity of the fund. If I have lent money for 80 years on one hand, and on the other hand, I have depositors who want to withdraw their money, I need to be able to draw from a pool. This liquidity pool is invested in the markets. And that's why we constantly need to have a liquidity pool to ensure the availability of the savings book. The Caisse des dépôts is a typical example of the unique French model in Europe, which allows savings to finance future projects without necessarily going through financial markets. But regulated savings accounts are only a small part of French savings. In France, we have a tradition of so-called collective, so-called intermediated savings. This means that we entrust our money to bankers, to insurers, who will transform this money to ensure the financing of the economy. In January, the Directorate General of the Treasury released a study that precisely shows what French household savings finance. The first important finding of this study is that household savings primarily finance the French and European economy. Banks, insurance companies, and investment funds use these investments to invest 58% in France and 19% elsewhere in the Eurozone. This study also includes a huge graph that is initially incomprehensible. It details what French savings finance, and fortunately, the Treasury explains how to read it. On average, for every €10 of household financial wealth, €4 is used to hold company equity, €3 to invest in bonds, including €1 of public debt, mostly French, and €2 to make loans. An important clarification on the €4 of company equity: half represents the capital held by entrepreneurs in their own companies. This is what is called professional wealth. For savings invested in loans, it is almost entirely used to finance loans in France. This study partly contradicts the idea that savings hinder growth. What I save, obviously, I don't consume. Economic growth is fueled by consumption. So, if there is less consumption, there is less growth. That's not false in real-time. But if I look at it over time, over a period of several years, it's a bit different because today's savings will enable tomorrow's investments, the day after tomorrow's jobs, and the day after that's growth and activity. So, we need both. But future growth and activity also depend on companies. However, the French invest little in company equity. Remember, it's about one-third of household savings. Investing savings in company equity can be done either through the stock market for listed companies, or by investing directly in unlisted companies or through the unit-linked accounts of life insurance and other slightly riskier financial products offered by banks and insurers. Since it is complicated for individuals to invest directly in unlisted companies, one type of actor that traditionally invests heavily in equity is pension funds. A pension fund's objective is to collect contributions and then return them to retirees in the form of pensions or capital, and in the meantime, it will invest this money, seeking investments that guarantee it can provide income to retirees over time. We see that in the United States, the main vehicles for financing the US markets are pension funds and retirement funds, which fulfill their role as capital providers. The problem we currently have with equity is at the European level. We have European companies that are extremely dependent on bank financing, much more so than on market financing. This is partly because some of our savings go to the United States, but especially because we don't have capital coming in, and the allocation of savings to equity is insufficient. I will dwell a bit on the two important points that have just been made. First, on European savings going to the United States. Every year, 400 billion euros of European savings leave the continent, primarily for the United States, because the American stock market yields more. But this is money that is not invested in Europe, and the savings of Europeans, like those of the French, are mostly placed in low-risk products. Added to this is a second problem. Europe is unable to attract foreign capital that could provide equity to companies. Yet, it is equity that allows companies to innovate. A quarter of a century ago, we created the euro, but we have not actually created a common financial space among the now 21 countries of the Eurozone. We don't have the equivalent of Wall Street in the United States. And so, because we lack this market depth, it is difficult for companies like Mistral, for example, to find financing commensurate with their investment needs. Therefore, providing companies with this market depth across the entire Eurozone and the European Union is a necessity. What is missing at the European level, and this has been well identified, and it is the whole challenge of the Capital Markets Union, is that we must now think on a European scale, not on a French scale, not on the scale of each country. And our European capital market must offer, like that of the United States, depth, liquidity, and consequently, performance. The Capital Markets Union is a European Commission project whose goal is to create, on the one hand, common supervision for investment funds to help them grow on a European scale, and on the other hand, savings products on a European scale as well, which would encourage Europeans to place their savings long-term on financial markets. The goal is for savings to better support the investments of European companies. To achieve this, the European Commission intends to develop retirement savings and pension funds. These pension funds exist in some European countries like the Netherlands, but not in France, as retirement is based on a pay-as-you-go system. According to its proponents, this savings union project could also be advantageous for savers. Overall, if we have greater pooling, if we have a larger financial space, we will have opportunities for higher returns. So, if we create this unified European savings market, as requested by Draghi and as all Eurozone countries have committed to, it will be a win-win-win for the economy and a win for savers. To summarize, the cautious savings of the French are not useless. Through intermediaries like banks or the Caisse des dépôts, it supports the French economy. But our rather hesitant system towards financial markets also has its limits. At the European level, companies lack the equity that is essential for innovation. And that is why Europe is trying to attract European savings towards riskier investments in the hope of creating a virtuous cycle for companies and savers. Thank you very much for watching this new video. I hope you now know a little more about savings, and don't forget to subscribe. An anecdote to finish: I learned while preparing this video that the livret A dates back to 1818. It was created at the same time as the Caisse d'épargne to protect the savings of the French who had been plundered during the Napoleonic wars. Subscribe. Oh.