LOW INTEREST TES - DO THEY REVISE HOUSEHOLD SAVING MOTIVES IN THE EURO AREA?

Abstract

This paper presents the impact of decreasing MFI interest rates on household deposits and saving goals in 12 Monetary Union member countries in the years 2009-2015. It analyses tendencies in household deposits (overnight, with agreed maturity and redeemable at noti ce), and att empts to link them with certain household saving moti ves (target, reti rement and precauti onary). The paper identi fi es those deposit categories which appeared as sensiti ve to declining interest rates and indicates the Eurozone countries whose populati ons are expected to revise their savings plans. Precise implicati ons are drawn for target saving moti ves of households in Austria, Cyprus and Malta. However, in the case of two other moti ves, the analysis does not conclude on the impact of decreasing MFI interest rates.