Financial Education

Maria Silgoner, Senior Expert, OeNB Economic Analysis and Research Department

On December 1-3, 2014, the Oesterreichische Nationalbank (OeNB) organized for the first time a course on Financial Education at the JVI. One of the course directors, Ms. Maria Silgoner, Senior Expert in the OeNB Economic Analysis and Research Department, was happy to answer a few questions.

Maria, is financial education gaining more importance now, since the global financial crisis?
Yes, I absolutely believe so. In recent decades people have been confronted with increasingly complex financial products and economic relationships. The financial crisis was reinforced by the lack of understanding of basic financial concepts on the part of consumers and investors and by their underestimation of risk. At the same time financial activities start at ever-younger ages. Consumers with more financial knowledge are better able to make sound investment and financing decisions, which means they are less likely to fall into a debt trap.

Who are the participants your course targeted, and what did it emphasize?
The target group consisted of medium- to high-level experts at central banks, ministries, and other agencies in charge of coordinating financial education activities for their institutions. We learned during this first offering of the course that how financial education is organized and anchored within institutions can differ substantially, ranging from separate units to informal networks. The three-day course gave an overview of concepts, measures, empirical findings, and new strands of financial literacy and education. But it also devoted a lot of time to discussions and practical examples of initiatives in Austria, the countries of the participants, and beyond at the international level.

In your view, what is the role of central banks, and other public institutions, in financial education?
Central banks in many countries are important providers of financial education and there are good reasons for that. On the one hand, greater financial knowledge among the public supports central banks in fulfilling their mandate of ensuring price stability and the smooth functioning of financial markets. A better-informed population will be better able to understand central bank decisions, will in general support sustainable economic policies, and will have better control over their financial future. On the other hand, central banks are independent entities that are seen as reliable and neutral expert institutions without commercial interests. This makes them natural leaders in financial education. In many countries, central banks have indeed a pivotal role in defining a national strategy for financial education. However, we also learned during the course that the specific setting and division of labor among national institutions can differ substantially from country to country.

Is international cooperation in financial education crucial? And how can it be improved?
Financial education requires economists and financial market experts to cooperate with experts in communications and education strategies. Designing new financial education programs can thus be very challenging and time-consuming. It is our intention to promote collaboration between central banks and to stimulate a fruitful and mutual exchange of experiences. This may also lead to the transfer of successful measures to other countries. The OeNB course at the JVI on Financial Education can help to build new networks. What was interesting for us, too, was that the course not only promoted interaction between participants but also between speakers. Even at the level of euro area countries, there is a lot of scope for closer cooperation!

In 2015, the <link http: www.jvi.org training _blank>OeNB course on Financial Education will be organized during Nov 16-18; the application deadline is Aug 16, 2015.