Euro Area Households Favour Cash Over Capital Markets

The European Central Bank (ECB) has been analyzing why households in the euro area invest differently from those in the United States. According to a recent analysis, around 80% of households in the euro area do not own shares or other financial instruments linked to capital markets.

One-third of household financial assets, approximately €10 trillion, is held in cash and bank deposits with relatively low returns. This is compared to households in the United States, where a substantially larger proportion of wealth is invested in equities and other market-based investments.

Croatia has a unique characteristic when it comes to property ownership. Historically, home ownership has been high, and property has become an important investment vehicle, particularly in areas with strong tourism demand. As a result, real estate represents a significant part of household wealth, rather than financial-market investments.