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.

Date: May 15, 2018, 12:30 pm Topic: Finance & Financial Regulation

video & audio recordings


event materials

Presentation by Jean-Paul Servais

Presentation by Annamaria Lusardi

summary

Financial literacy is of vital importance now compared to the past given the changes occurred in the different sectors of the economy. For instance, there are not only increased opportunities to invest in the financial markets but also to borrow among others. Pension systems, education and healthcare are also transforming. Therefore, the changes tend to be multifaceted and wide spread. The critical question is to what extent people are financially literate given the rising need to make financial decisions in constantly changing circumstances? Indeed, does financial literacy matter for those decisions? If so, in which ways? Moreover, which policies or programmes can influence financial literacy?

Individuals who are financially literate are less likely to be financially fragile and make financial investments. To measure financial literacy so called ‘Big Three questions are usually asked: The first question is about making simple calculations in the context of interest rates. Another one is concerned with what people know about inflation. The last is a question about risk diversification. The selection of the ‘Big Three’ questions is primarily driven by the fact that financial decisions are mostly about the future. Results of the research done on the financial literacy indicate that less than half of the population can answer these three basic questions. Risk diversification is the most difficult concept to grasp.This finding points to the general lack of knowledge of fundamental financial concepts.

There are also some gender differences in the levels of the financial literacy. On average, a higher proportion of men answer the questions correctly, but it does not mean that women are more likely to be incorrect. Women are just more likely to answer “I don’t know” to the financial literacy questions.

Overall, there is a consensus on the fact that developing financial literacy abilities is commensurate to developing reading and writing skills in the modern world. Hence, there is a rising desire to begin financial education from the early age onward.

The development of financial literacy can be seen as a collection of three consecutive steps in the short, medium and long term. The first short-term pillar focuses on the general public, particularly on information sharing and provisions. The second medium-term step revolves around stockholders and education with the primary goal being the co-ordination of projects with partners as well as more investments in scientific research on financial literacy questions. Lastly, the long-term strategy is to use some of the technological advances to enhance financial literacy levels.

 

Event notes by Yana Myachenkova

Speakers

Lidia del Pozo

Director of Community Investment Programs , BBVA

Maria Demertzis

Deputy Director

Annamaria Lusardi

Denit Trust Endowed Chair of Economics and Accountancy, George Washington University School of Business

Jean-Paul Servais

Chairman, FSMA

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Katja Knezevic

katja.knezevic@bruegel.org

Read about event

Past Event

Past Event

Bruegel Annual Meetings 2018

The 2018 Annual Meetings will be held on 3-4 September and will feature sessions on European and global economic governance, as well as finance, energy and innovation.

Speakers: Maria Åsenius, Richard E. Baldwin, Carl Bildt, Barbara Botos, Maria Demertzis, Benjamin Denis, Lowri Evans, Mariya Gabriel, Svend E. Hougaard Jensen, Joanne Kellermann, Jörg Kukies, Emmanuel Lagarrigue, Philippe Lespinard, Rachel Lomax, Dominique Moïsi, Jean Pierre Mustier, Ana Palacio, Jean Pisani-Ferry, Lucrezia Reichlin, Norbert Röttgen, André Sapir, Johan Van Overtveldt, Martin Sandbu, Margrethe Vestager, Reinhilde Veugelers, Nicolas Véron, Thomas Wieser, Guntram B. Wolff and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance, Finance & Financial Regulation, Global Economics & Governance, Innovation & Competition Policy Location: Brussels Comic Strip Museum, Rue des Sables 20, 1000 Brussels Date: September 3, 2018
Read article

Parliamentary Testimony

European Parliament

The role of independent expertise in legislative process

Testimony before the European Parliament Committee on the Internal Market and Consumer Protection (IMCO).

By: Zsolt Darvas and J. Scott Marcus Topic: European Macroeconomics & Governance, European Parliament, Testimonies Date: July 18, 2018
Read about event More on this topic

Past Event

Past Event

Should we revisit the patent system for pharmaceutical products?

Analysis of the legal issues with the current IP system for regulated market authorisations for pharmaceutical products, as well as its economic effects.

Speakers: Arno Hartmann, Christian Jervelund, Margaret K. Kyle, Roberto Romandini, Bruno van Pottelsberghe, Amaryllis Verhoeven and Reinhilde Veugelers Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: July 9, 2018
Read about event More on this topic

Past Event

Past Event

Trade war trinity: analysis of global consequences

Analysis of the long-term impact of the trade war and its three key players: EU, US, and China.

Speakers: Alicia García-Herrero, Ignasi Guardans and Carl B Hamilton Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 28, 2018
Read about event More on this topic

Past Event

Past Event

Euro tragedy: a drama in nine acts

This event featured a presentation by Ashoka Mody of his new book, which argues that the Euro is at the root of the problems the European Union faces today.

Speakers: Maria Demertzis, Ashoka Mody and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 27, 2018
Read about event More on this topic

Past Event

Past Event

EU-LAC Economic Forum 2018

The second edition of the EU-LAC Economic Forum, a high level gathering for in-depth research-based exchanges on economic issues between European, Latin American and Caribbean (LAC) policy makers and experts.

Speakers: Angel Badillo, Federico Bonaglia, Maria Demertzis, Sylvie Durán, Guillermo Fernández de Soto, Alicia García-Herrero, Elisa Grafulla, Gonzalo Gutiérrez, Bert Hoffmann, Juan Jung, Emilio Lamo de Espinosa, Carlos Malamud, J. Scott Marcus, Neven Mimica, Fabio Nasarre de Letosa, Detlef Nolte, Anne Sperschneider and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 26, 2018
Read article More on this topic More by this author

Podcast

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: The Sound of Economics Topic: Finance & Financial Regulation Date: June 19, 2018
Read about event More on this topic

Past Event

Past Event

For a stronger and more integrated Europe

This event will feature the presentation of the Economic Survey of the European Union 2018 and Economic Survey of the Euro Area 2018.

Speakers: Angel Gurría, Zsolt Darvas, Pierre Beynet and Aida Caldera-Sanchez Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 19, 2018
Read article Download PDF More on this topic

Policy Contribution

Is the European Semester effective and useful?

The authors study whether and to what extent EU countries implement recommendations on macroeconomic imbalances given by the EU in the so-called European Semester. Overall implementation of recommendations by EU countries has worsened in the last few years, in particular when it comes to recommendations addressed to countries with excessive macroeconomic imbalances.

By: Konstantinos Efstathiou and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: June 13, 2018
Read about event More on this topic

Past Event

Past Event

What next for banking union?

This event will discuss the future of Banking Union.

Speakers: Maria Demertzis, Philipp Hildebrand and Guntram B. Wolff Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 8, 2018
Read about event More on this topic

Past Event

Past Event

News from the South. Proposal to strengthen the European Monetary Union: Combining fiscal discipline with risk sharing

On 4 June Bruegel, as in previous years, will host the presentation of the Euro Yearbook, a collection of experts’ insights on the construction of the European Monetary Union through 2017.

Speakers: Cristina Cabrera, Maria Demertzis, Fernando Fernandez, Massimo Giuliodori, Javier Méndez Llera and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 4, 2018
Read about event

Past Event

Past Event

Financial services after Brexit - what path for the EU27 and the UK?

How will the European financial services industry develop after Brexit?

Speakers: Dashiell Caldwell, Richard Knox and Francesco Papadia Topic: European Macroeconomics & Governance, Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 30, 2018
Load more posts