Isabel Ucha: “The form of savings has an impact on company credit”

As savings in Europe are based on bank deposits, companies have access, above all, to bank financing.

The evolution of savings habits, but above all the way people invest their savings, "can make all the difference in recovering the competitiveness, growth and development of the European and Portuguese economy", highlighted Isabel Ucha, president of Euronext Lisbon, at the 13th edition of the Grand Conference 'The Future of Financial Markets', organized by Negócios and Banco Carregosa, with the support of ISCTE Business School. He explained how the different forms of savings in Europe, the United States and China are reflected in the lower competitiveness of European companies and economies.

"We are starting to stop talking about the Capital Market Union, the Savings and Investment Union and, it is no coincidence, that this redenomination is being adopted in the program of the next European Commission and that it should also be adopted in economic policy ", considered Isabel Ucha.

The Draghi report, among other reports from recent years, cites Europe's loss of relative competitiveness compared to the United States and other economic blocs in the world. European citizens, including the Portuguese, have their savings in bank deposits and do not invest in shares, bonds, investment funds or pension funds, instruments that finance the capital of companies in the USA and China.

Read Also

The game that is financial literacy

More savings, less profit

The Draghi report indicates that annual savings in the United States were 850 billion euros in 2022, while in Europe it was 1,400 billion, reflecting a much higher aggregate level of savings. However, in terms of accumulated wealth, "the average American has a much higher level of accumulated wealth than that of Europeans, due to the fact that money does not essentially remain in bank deposits, but is invested in other types of assets and instruments", says Isabel Ucha.

Savings have an impact on the way companies are able to finance themselves, "because there is no investment without having savings in macroeconomic terms", recalled Isabel Ucha.

 

 

In Europe, as savings are concentrated in bank deposits, companies mainly have access to bank financing. The solutions to changing this system involve, above all, "true tax reforms on savings and investment instruments, radical changes that simplify the taxation of savings and, as important as simplification, some incentive. However, perhaps simplification is as relevant as the incentive", highlighted Isabel Ucha.