A recent report by Efama, the European Fund and Asset Management Association, the European association representing the investment management industry, noted a very significant change in the habits of Italians. Bank accounts are much “emptier” than in the past.
Savings, however, are not decreasing. In contrast, another recent report highlighted an increase. Italians are learning to invest their savings and not leave them in the current account, where there are 1,163 billion euros, equal to a third of the public debt.
Italian current accounts are among the “emptiest” in Europe
Efama used data from Eurostat and OECD to analyze how private European citizens invest their savings. It emerged that on average around 40% of European wealth is held in current accounts. These are purely financial savings, so real estate is not considered.
Italy, surprisingly, is below average. In our country there has always been a great tendency to save and a significant part of the money that families put aside ended up in current accounts. The fact that Italy is below the European average is significant and indicates that something is changing.
Comparison with European countries
The Italian figure becomes even more significant if we consider that only four European countries have a smaller share of private savings in current accounts:
- Sweden at 18%;
- Denmark at 19%;
- Netherlands at 27%;
- Norway at 34%.
Excluding Norway, these percentages are significantly lower than the Italian one. However, if we look at the other side of the ranking, the countries with a greater tendency for private individuals to keep savings in current accounts have shares that are almost double those of Italy:
- Greece at 69%;
- Bulgaria at 70%.
Where Europeans and Italians keep their money
However, Italy also stands out in the tools that families use to save. In Europe the current account is preferred, but then the division of assets is:
- current accounts at 40.1%;
- pension funds at 21.2%
- life insurance at 15.9%;
- investment funds at 13.5%.
Other tools are of marginal relevance. In Italy, however, government bonds appear strongly in this ranking, at 8.1% of total savings.
How the approach to investments is changing
Efama underlines that, although some individual countries such as Italy are experiencing a phase of profound change in the way in which private individuals save, in general Europe is at a standstill:
- in the last 10 years savings in accounts have fallen by 0.4%;
- in the last three years savings in accounts have fallen by 0.7%;
If the long-term trend were followed, in 2036 European families would still have 36% of their wealth in current accounts. For comparison, Americans keep only 12% of their funds in the bank.
European wealth “trapped” in the accounts
For some time now, European institutions have been underlining that this tendency to keep money in Europeans’ bank accounts is limiting the continent’s economic growth. The Draghi Report had also identified the mobilization of this wealth as one of the fundamental strategies for bridging the 800 billion euro investment gap that exists between the EU and the USA.
Among the limits to this mobilization are the difficulties in accessing pension and investment funds, but above all the fragmentation of the European capital market.
In fact, there are 27 capital markets in the EU, one for each country. For an Italian, investing in France is almost as difficult as investing in the USA. This limits the possibilities, scale and investments of the European capital market. The Commission has been trying to change things for years, but resistance from individual countries is slowing down the process.
