Europe’s €14tn cash pile benefits banks not retail investors, BlackRock warns

BlackRock’s head of international, Rachel Lord, warned that roughly €14tn of European household savings are parked in bank deposit accounts, benefiting banks via net interest margins while leaving retail investors exposed to low returns. The firm and policymakers are pushing to channel these cash balances into capital markets — particularly ETFs and equities — to improve retirement outcomes and boost local economies. Barclays estimates Britons hold >£600bn of excess cash; AJ Bell analysis shows a £1,000 ISA invested in North America equities in 1999 would now far outperform cash ISAs. Regulators and the UK government have introduced measures (FCA guidance regime, cuts to the cash ISA allowance) and retail investment platforms are increasing access, potentially creating inflows into markets and benefiting asset managers. BlackRock sees early momentum among younger investors, suggesting a bullish potential for equity and ETF demand if policy and education succeed.