The Myth of Idle Bank Deposits<\/p>\n\n\n\n
While much has been said about euro life insurance policies to re-establish their economic usefulness, the myth of \u201cidle\u201d bank deposits seems to persist. Yet bank deposits can in no way be described as \u201cunproductive.\u201d<\/p>\n\n\n\n
As of mid-2025, total bank deposits amount to about \u20ac2.6 trillion. The total volume of loans granted by credit institutions to French residents stands at around \u20ac2.9 trillion \u2014 \u20ac1.4 trillion to businesses and \u20ac1.5 trillion to households.<\/p>\n\n\n\n
\u2e3b<\/p>\n\n\n\n
An Economic Aberration<\/p>\n\n\n\n
Deposits do not sleep! Banks are massively financing the French economy \u2014 precisely thanks to these bank deposits, whatever their form: checking accounts, term deposits, savings accounts, and so on.<\/p>\n\n\n\n
And while large companies and mid-sized firms can access financial markets directly \u2014 though they still rely partly on bank financing \u2014 small and medium-sized enterprises, self-employed professionals, shopkeepers, artisans, and households can only obtain financing through banks. Bank deposits are therefore indispensable to the French economy and intensely productive.<\/p>\n\n\n\n
To impose a 1% tax on sight deposits \u2014 which earn nothing for their holders but are essential to the economy \u2014 would be an economic and financial absurdity. Rational savers would seek to reduce their sight deposits as much as possible. Alternatively, they might shift their savings to interest-bearing bank products, driving up banks\u2019 funding costs and, consequently, the cost of credit. Such a shift would weigh on economic growth.<\/p>\n\n\n\n
Another predictable consequence would be a transfer of savings to non-bank instruments, forcing banks to reduce lending to the economy \u2014 again hampering growth and employment.<\/p>\n\n\n\n
\u2e3b<\/p>\n\n\n\n
The Same Effect on Term Deposits<\/p>\n\n\n\n
Currently, term deposits yield around 2% over 3\u20136 months, sometimes less. Their remuneration depends on the European Central Bank\u2019s key interest rates. Taxing household deposits held by those subject to the \u201cunproductive wealth tax\u201d (i.e., those with total assets of at least \u20ac1 million) at 1% would wipe out at least half of that return \u2014 before income tax on savings is even applied.<\/p>\n\n\n\n
Since these interest earnings are already taxed at the flat rate, the remaining net return after this double taxation would be negligible. The result would be an inevitable flight of funds.<\/p>\n\n\n\n
\u2e3b<\/p>\n\n\n\n
Let\u2019s Avoid Misunderstanding the Basics of Economic Financing<\/p>\n\n\n\n
As in many aspects of economics, what matters most is balance \u2014 an effective balance between consumption and saving, so that investment can take place and generate healthy, sustainable growth.<\/p>\n\n\n\n
Savings placed in banks, life insurance, equities, or bonds finance the investments of households (in housing) and businesses. Bank deposits and life insurance are therefore not only useful \u2014 they are essential to financing investment and growth.<\/p>\n\n\n\n
The figures, as well as the simple description of economic and financial mechanisms, make this clear. Out of ignorance or excess zeal, let us not create damage for the French economy and for society as a whole.<\/p>\n\n\n\n
\u2e3b<\/p>\n\n\n\n
Olivier Klein is a professor of economics at HEC and a bank C executive.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Myth of Idle Bank Deposits While much has been said about euro life insurance policies to re-establish their economic usefulness, the myth of \u201cidle\u201d bank deposits seems to persist. Yet bank deposits can in no way be described as \u201cunproductive.\u201d As of mid-2025, total bank deposits amount to about \u20ac2.6 trillion. The total volume […]<\/p>\n","protected":false},"author":1,"featured_media":6285,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133,136],"tags":[],"class_list":["post-10202","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economical-and-financial-crisis","category-economical-policy"],"acf":[],"yoast_head":"\n