Automatic translation: Originally published in Finnish 07/10/2026, 04:51 GMT. Give feedback here.

Euro area households hold nearly 10 BEUR in cash and deposits, yet 80% of them do not own shares or other investment instruments. Households shy away from risk surprisingly much.

The difference between the euro area and the US in the distribution of deposits and investments is striking. Around one-third of euro area households' financial assets are held as deposits, compared to only 11% in the US, according to a recent blog post by the ECB. Most interestingly, the gap widens with wealth. Of the wealthiest quintile, over 65% own shares, bonds, or mutual funds in the US, compared to under 45% in the euro area. This is therefore not just a matter of wealth, but also of habits, product offerings, and the structures of pension systems. This concerns more than just households, as according to Mario Draghi’s report published two years ago, Europe needs significantly more investment in innovation and productivity.

EZ and US: Wealth distribution

Source: ECB blog

In the ECB blog, households are divided into four groups. The largest group consists of homeowners, as over 60% of households are property owners whose wealth is tied up in housing. This sounds familiar to a Finnish ear as well, since locally over half of total wealth is tied up in bricks and mortar. As the second-largest group, around a quarter are mostly low-income deposit savers who save purely for a rainy day. Third, around 10% participate in the market indirectly through pension and insurance products, and finally, only 4% invest a significant portion of their wealth directly in the market via shares and mutual funds.

Somewhat surprisingly, for low-income savers the barrier is often a lack of money, but for those who are better off, the biggest brake is perceived risk. Poor market confidence and deficient financial literacy also keep savings in bank accounts. Age is also a factor: older households favor real estate, while younger ones diversify their savings more broadly across deposits, pensions, and capital market products.

Survey: Reasons for not investing in shares

Source: ECB blog

According to the ECB, solutions must be tailored. Examples mentioned include Slovenia's financial literacy program, the Netherlands' mandatory occupational pension system, and Finland's equity savings account, which has increased household interest in the stock market. At the end of 2024, 37% of Finnish households owned mutual funds, shares, or both, and the share has been on the rise. In this study, therefore, Finland appears in a favorable light.

The ECB blog provides relevant answers as to why Europe has lagged behind in developing capital markets, as viable markets specifically require an active private sector. Household savings are also needed to bridge the current investment gap, which is why savings and investment accounts that assist in their efficient allocation, along with pension reforms, should be swiftly implemented. An experienced investor knows that in the long term, money sitting in a bank account is at the mercy of inflation and is a costly choice. Therefore, greater risk-taking capacity would be welcome.