The risk of "wasting savings" is even greater than before the crisis

- "We use the term "waste of savings" for a situation where countries’ savings are not used to finance useful investments that could generate long-term growth."
- "In fact:
• in Europe, before the crisis, savings financed productive investment and (unfortunately in certain cases) housing investment; in the wake of the crisis, they have financed fiscal deficits;
• in Japan, savings continue to finance the fiscal deficit;
• in the United States, the shortfall in savings (total and household) remains significant;
• prior to the crisis, the excess savings in emerging and oil-exporting countries financed the US and also the UK external deficits, i.e. to a large extent the household borrowing requirement. Since the crisis, they have financed these countries’ fiscal deficits, and perhaps households in the United States once more."
- "The share of savings that finances productive investments in OECD countries is therefore even lower after the crisis than before."
Natixis Flash Economics 344 20100702