In spite of this, investment activity is low and corporate savings high. This is the case not only in Denmark but in most advanced economies and no-one can really say when this circle of restrained private consumption and low investment appetite will be broken. It is not purely bad that corporate savings are high.
Other things being equal, a firm is more robust to economic shocks the higher its equity is relative to its total assets. That reduces the risk that the firm will fail. It also reduces the probability that the firm’s bankers will suffer losses on their lending to the firm. Hence, a high solvency ratio has a positive impact on financial stability.