1  ‘The future of savings’ conference – 4 November 2016 Introductory speech by François Villeroy de Galhau, Governor of the Banque de France Savings glut, or investment deficit? First and foremost, I would like to warmly welcome you all here at the Banque de France. I am delighted to open this conference dedicated to the future of savings, with such distinguished speakers and panelists: leading academics, bank and insurance industry experts, as well as regulators. Before leaving the floor to them, I would like to share with you a few thoughts on the role that savings can play in the current challenging macroeconomic context. Post-crisis growth has been disappointingly weak, both at the global level, with growth standing only marginally above 3% in 2015 and most likely in 2016 as well; and in Europe, where growth is levelling off. So what is the problem? (slide 2) In the mid-2000s, Ben Bernanke famously coined the term “global savings glut” to refer to the situation of surplus savings in emerging market economies. Savings are still abundant worldwide, but one thing has dramatically changed in recent years: (slide 3) investment, which has sharply dropped as a share of GDP in advanced economies. This is what I call the “investment dearth” or “investment deficit”.
There is also the possibility in the euro area to ask for refinancing by the ESM. Those developments are key for providing a comprehensive response. We still have some work to do to finalise the consolidation of public finances and establish them on a stronger footing. But clearly we are well advanced in the process of doing so, and the same is true of the banks’ capital base, although we may have to finish that with the SIFIs’ capital surcharge as from next year or thereafter, and with banking union which is in the process of being negotiated. BIS central bankers’ speeches  5  EUROWEEK: You’ve made some very strong comments about London. But what role does Paris see itself playing as a financial centre in the European context? Noyer: First, it’s clear that London is and will remain a major financial hub which brings a lot of advantages to the global economy, given its skills base and the capacity of its infrastructure. The comment I made was not a suggestion that Paris should replace London but simply that I do not believe in the trend of financial services concentrating more and more in London. This is something that should not be acceptable from a financial stability perspective by the euro area authorities. Why? Because, in the event of any problems, the central bank needs to be able to provide liquidity without any time lag where and if it is needed, and in a strictly controlled way.