Leveraging Financial Markets

Europe faces an annual investment gap estimated between €800 billion and €1.4 trillion to support its clean energy transition, digital infrastructure, and defence. Despite having €37 trillion in household savings in 2023, the region suffers from 'financial plumbing' problems, including fragmented markets and a heavy reliance on bank lending. The report proposes three primary enablers to unlock an estimated €676 billion in annual financing: reviving securitization markets to recycle bank capital, reforming pension systems to provide patient long-term capital, and increasing retail investor participation in capital markets. It highlights the European Commission's Savings and Investments Union (SIU) as the central policy response to integrate the single market for financing and reduce cross-border frictions.

• Europe requires significant additional annual investment to meet strategic priorities, with estimates ranging from €800 billion (Draghi 2024) to as high as €1.4 trillion in more recent analysis.
• The region's investment challenge is a problem of mobilization rather than a lack of funds, as European households held €37 trillion in savings in 2023, but much remains in low-yield assets.
• European companies are disproportionately dependent on bank lending compared to the US, with banks providing over 65% of debt financing to non-financial corporates.
• The EU's public equity markets are significantly shallower than those of the US; by the end of 2024, EU stock market capitalization was approximately 70% of GDP, while the US was approximately 270% of GDP.
• Reviving securitization markets could provide an immediate impact by recycling bank capital, potentially supporting an additional €130–320 billion in annual lending.
• European pension systems are often imbalanced, relying heavily on state-run 'Pillar 1' pay-as-you-go systems, which creates sustainability risks as the old-age dependency ratio is projected to rise to 59% by 2070.
• Retail investment in the EU is constrained by low financial literacy and a preference for cash; if EU households matched the US deposit-to-financial-asset ratio, up to €8 trillion could be unlocked for market-based investment.
• The European Commission's Savings and Investments Union (SIU), launched in March 2025, aims to connect savings with productive investments through four strands: citizens and savings, investments and financing, integration and scale, and efficient supervision.
• European venture capital investment is significantly lower than in the US, averaging just 0.3% of GDP over the past decade, which hinders the ability of European scale-ups to grow domestically.

APA

World Economic Forum (n.d.). Leveraging Financial Markets. https://reports.weforum.org/docs/WEF_Leveraging_Financial_Markets_2026.pdf

Chicago

World Economic Forum. Leveraging Financial Markets. n.d. https://reports.weforum.org/docs/WEF_Leveraging_Financial_Markets_2026.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Leveraging Financial Markets |url=https://reports.weforum.org/docs/WEF_Leveraging_Financial_Markets_2026.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforumndleveraging, author = {{World Economic Forum}}, title = {{Leveraging Financial Markets}}, institution = {World Economic Forum}, url = {https://reports.weforum.org/docs/WEF_Leveraging_Financial_Markets_2026.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }