Most of Europe's 37 trillion euros in savings sits in low-yield accounts

A significant portion of the approximately 37 trillion euros in savings held by households in the European Union is kept in low-yield bank accounts. According to Verena Ross, Chair of the European Securities and Markets Authority (ESMA), this situation both slows down wealth accumulation for individuals and limits companies' access to financing sources outside of bank loans.

In her assessment to Euronews, Ross pointed out that capital markets in Europe are still not sufficiently integrated. The ESMA Chair stated, "Today, instead of a single market in Europe, we often have 27 national markets with different rules."

The "Savings and Investment Union" initiative on the European Commission's agenda is also seeking a solution to this problem. The program aims to make capital markets more integrated, reduce companies' dependence on bank loans, and increase cross-border investment options for investors.

INVESTMENT CULTURE AND MARKET DEPTH

According to experts, one of the fundamental differences between Europe and the US lies in investment habits. While individuals in the US more commonly manage their retirement savings through capital markets, the majority of savings in Europe remain in deposit accounts.

Ross noted that this difference is also linked to the structure of pension systems. The fact that state-supported, pay-as-you-go pension systems are more limited in the US compared to Europe encourages individuals to invest more to secure their future income.

According to the ESMA Chair, increasing financial literacy is critical for directing savings in Europe toward productive investments. It is emphasized that there is a need for more understandable information systems and digital platforms where investors can compare investment tools so they can better evaluate risks, costs, and opportunities.

The deepening of capital markets is also important for companies. A significant portion of corporate financing in Europe is still provided through bank loans. In periods when credit conditions tighten, this dependence can increase vulnerability, especially for companies with growth and investment plans.

Ross stated that directing household savings toward more productive areas could create a "win-win" result for both investors and companies. It is noted that a more liquid and investor-friendly capital market could contribute to Europe's growth, innovation capacity, and global competitiveness.

Ross also warned against over-relying on social media influencers and artificial intelligence-based tools for investment decisions. While saying that artificial intelligence can offer opportunities for investors, Ross pointed out that these tools can sometimes produce erroneous or biased information.