EU Investors Need Better Places for Savings, Asset Managers Say

Household investors need better places to put their savings to work and to backstop the economy, the European Fund and Asset Management Association said in a report today.

The European Union needs to improve companies’ access to financing now that banks face tougher regulation in the aftermath of the euro area’s debt crisis, the Brussels-based group said. The “financing gap” between what firms need and what banks can provide could be addressed through better investor education and other industry efforts, the report said.

Retail investors have higher expectations than ever before at the same time as they remain risk-averse, Christian Dargnat, the fund group’s president, said in the report. Households are looking for capital guarantees or some other form of protection against market volatility, while regulators are adding new constraints in a bid to protect investors, he said.

“European citizens are suffering from misallocation of their savings to non-risky and short-term products and we can provide access to capital markets for all investors and offer long-term, robust, transparent, liquid diversified cost-efficient products,” Dargnat said.

The European Central Bank has identified Europe’s sluggish asset-backed-securities market as one reason for lethargic bank lending. ECB executive board member Yves Mersch signaled this month that policy makers are relying on other institutions to rekindle the ABS market to bolster lending to small companies.

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