External Content

The following content is sourced from external partners. We cannot guarantee that it is suitable for the visually or hearing impaired.

(Bloomberg) -- Once again, it’s the German speakers who pinch their pennies.

At least that’s the conclusion of a European Central Bank working paper by Benjamin Guin. He looked at Switzerland, a country boasting three major linguistic and cultural groups, where most policies and laws such as interest rates or taxes that affect savings rates are set at a national or cantonal level.

That allowed Guin, an economist from the University of St. Gallen now working at the Bank of England, to dig into the nitty-gritty to figure out if people of one language group behaved differently than another. In Zurich, the principal language is German, while in Geneva it’s French. Some cantons, such as Bern, the seat of the government, are bi-lingual.

“I show that low- and middle-income households located in the German-speaking part are more than 11 percentage points more likely to save than similar households in the French-speaking part,” the author concluded. “Empirical evidence suggests that households’ exposure to cultural groups can – at least partly – explain some of the observed cross-country differences in household saving.”

The study is relevant to the euro area, where Germany’s reluctance to invest if it means taking on more debt – at the private and the public level – faces off with piles of non-performing loans in  countries including Italy and Spain.

The cultural difference in peoples’ approach to borrowing didn’t escape former Italian Prime Minister Mario Monti. In a 2015 interview, he acknowledged the two meanings of the world “Schuld.”

“In German, debt is the same word as guilt,” he said.

(For more economic analysis, see Benchmark)

To contact the author of this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net.

To contact the editor responsible for this story: Jana Randow at jrandow@bloomberg.net, Zoe Schneeweiss

©2017 Bloomberg L.P.

Neuer Inhalt

Horizontal Line

subscription form

Form for signing up for free newsletter.

Sign up for our free newsletters and get the top stories delivered to your inbox.

Click here to see more newsletters

The citizens' meeting

The citizens' meeting

The citizens' meeting