Erik Thedéen: The road to the EU savings and investment union - do's and don'ts

Speech by Mr Erik Thedéen, Governor of the Sveriges Riksbank, at a conference organised by SEB, Brussels, 3 July 2025.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
10 July 2025

I would like to thank SEB for this invitation and the opportunity to share my thoughts on what is needed for a functioning savings and investment union within the EU, based on experiences from Sweden and the Nordic-Baltic region. 

It will come as no surprise to anyone in this room that financing needs in Europe are substantial. Mario Draghi assesses the need for extra investments in the EU to be almost 5 per cent of GDP per year, for the next 5 years. Both public and private investments will have to increase to satisfy this requirement. A large part of the financing for these investments will need to come through debt and equity capital markets. Unfortunately, it is an equally well-known fact that European capital markets are not yet up to this task. Compared to the US, they are dwarfed, especially our equity markets. For instance, US market capitalisation makes up 60 per cent of global market capitalisation, roughly three times more than the EU. US capital markets are not only bigger, but they are more liquid and vibrant with far more IPOs, both in number and in value.

This is not only problematic for private companies and other actors demanding capital for investment purposes, with all the negative effects on growth and productivity that come with a lack of capital expenditure. It also means that European households are deprived of financial investment opportunities and thus receive a lower long-term return on their savings. This makes them relatively less wealthy than, for instance, their US counterparts, who invest in equities to a much greater extent.