Europe is facing a double financial challenge: a significant need for long-term investments to spur economic growth and a growing pension gap. Unfortunately, at a time when low interest rates and tightened prudential standards strain the ability of life insurers and pension funds to offer guaranteed returns, Europe lacks both a framework ensuring the quality and accessibility of long-term investment solutions for small retail investors and defined contribution pension plans.
This report offers a potential solution to both problems. Based on the findings of a CEPS-ECMI Task Force on Long-Term Investing and Retirement Savings, the report looks at how to steer household wealth—accounting for over 60% of total financial wealth in Europe—toward long-term investing. This shift could achieve two goals at once: greater economic growth and higher pensions.