Why the French Are Still Boosting Their Bank Accounts
In December 2023, bank deposits rose sharply in the euro area, returning to the record pace seen during the lockdown period in April–May 2020. This increase was driven primarily by a sharp rise in household deposits.
December is generally a busy month for household deposits, particularly due to the payment of year-end bonuses or double paychecks, but December 2023 far exceeded the average of previous years. It should be noted that this increase is not attributable to a corresponding rise in new loans.
The increase in deposits can therefore be attributed to a high level of household savings in December, as these savings were not immediately invested in other vehicles (life insurance, securities accounts, PEA accounts, etc.). The typical seasonal pattern of household bank savings in December is therefore more pronounced in 2023 and likely reflects a certain degree of caution on the part of savers before making investment decisions.
It should be noted that this increase in deposits is good news for banks, as a portion of customer deposits is itself placed with the ECB, which currently pays banks a 4% interest rate. Another portion of these deposits can also be invested in money or bond markets, allowing banks to benefit from attractive margins through banking transformation.
