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Ministers among richest French, shun risk like most savers

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(Globalpost/GlobalPost)

PARIS (Reuters) - Ministers in Francois Hollande's Socialist government are among the wealthiest French but they share with most households a low-risk investment profile, focused on real estate and very little in shares, a study on Wednesday showed.

Net household wealth in the euro zone's second-largest economy stood at 229,300 euros (196,088 pounds) on average in 2010, the national statistics office showed in a report one week after ministers detailed their assets to quieten a tax fraud scandal.

The richest 10 percent households own over 501,600 euros and the 10 percent poorest less than 1,600 euros, the report showed, while the median household wealth stood at 113,500 euros.

The government's transparency drive, based on 2013 assets, showed most ministers are well above average, with eight millionaires and most with assets around half a million euros, although a few have reported wealth below average.

Like ministers, French households concentrate a large share of their assets on real estate, with two third of household assets being non-financial, most of which in houses and flats.

In a country where people are traditionally wary of investing in stock markets and focus on risk-free, tax-free cash savings, the share of households holding securities dropped even further during the financial crisis.

The proportion of households owning securities - anything from stocks to government bonds and shares in mutual funds - fell to 19 percent in 2010 from 24 percent in 2004, the study showed.

"The fall of market indexes during the 2008 financial crisis seems to have encouraged households to draw out of these risky products," the INSEE statistics office said in its report.

The share of cash and deposits in households' financial assets fell from 38 percent in 1996 to 30 percent in 2011, but most of this went to life insurance contracts, while the share allocated to stocks and mutual funds contracted.

Some 85 percent of households own a tax-free, usually state-guaranteed savings account and 58 percent in mainland France own the flat or house they live in.

(Reporting by Ingrid Melander; editing by Ron Askew)

http://www.globalpost.com/dispatch/news/thomson-reuters/130423/ministers-among-richest-french-shun-risk-most-savers