Podcast

Director’s Cut: Making Europe financially literate

This week's guest on the Director’s Cut of ‘The Sound of Economics’, Annamaria Lusardi, raises the urgent need to adopt policies that seek to improve people’s understanding of financial concepts and risks, in conversation with Bruegel deputy director Maria Demertzis.

By: Date: June 19, 2018 Topic: Finance & Financial Regulation

According to Annamaria Lusadi, academic director at the Global Financial Literacy Excellence Center, financial literacy requires both a knowledge of financial concepts and the confidence to make effective financial decisions in order to maximise one’s well-being.

Financial literacy is not only limited to knowledge of monetary calculations, but is also measured by the extent to which individuals understand their financial rights and obligations, in addition to their ability to educate themselves on financial matters.

People are increasingly expected to have the appropriate skills to manage their own financial decisions; however, the rapidly shifting financial environment often proves to be extremely complex to understand and, thus, leaves many with poor financial literacy abilities. The young, the elderly, women, and people with low-education levels are particularly susceptible to the negatives effects of low financial literacy. The consequences of the situation are harmful both for the individual and at a national level.

Just as reading and writing skills are a part of the educational curriculum, Annamaria Lusadi believes that financial literacy courses should now be a requisite part of school programmes. Moreover, the adult population should also have access to workplace and public financial education programmes. All in all, good financial literacy skills have long-term beneficial effects; sound financial decisions take today’s resources and invest them in the future. As a result, policy-makers should redouble their efforts in this area.

Maria Demertzis has co-authored a Bruegel Policy Contribution with Uuriintuya Batsaikhan on financial literacy and inclusive growth in the European Union.

Annamaria Lusardi previously made a presentation at the Bruegel event, ‘The importance of being financially literate’.

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Past Event

Past Event

The importance of being financially literate

This event focused on the importance of financial literacy and the possible policies that could be developed to improve it.

Speakers: Lidia del Pozo, Maria Demertzis, Annamaria Lusardi and Jean-Paul Servais Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 15, 2018
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Policy Contribution

Financial literacy and inclusive growth in the European Union

Financial literacy is financial education, such as basic economics, statistics and numeracy skills combined with the ability to employ these skills in making financial decisions. As more and more households are asked to make their own decisions about such issues, financial illiteracy can become a serious threat to their life-time welfare. The authors of this paper explain why financial literacy matters and suggest, in light of their findings, some policy recommendations.

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By: The Sound of Economics Topic: European Macroeconomics & Governance, Finance & Financial Regulation Date: April 3, 2018
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