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FINANCIAL EDUCATION – Today Stakeholders of EU financial service markets have received both a Communication from the Commission on Financial Education and its Study providing an inventory of schemes in EU that Stakeholders can consider when developing their own financial education programmes. They also stress that financial education only complements provision of information, protection and advice, and admits that such policies ignore the bigger picture of the nature of credit relations themselves as they often only focus on “lack of understanding of product features” See attached documents below.
COMMUNICATION ON FINANCIAL EDUCATION

On 18 December, the Commission adopted a Communication on Financial Education. This Communication underlines the Commission's support for the provision of financial education delivered as close as possible to the citizens that need it, namely through Member State, national and regional authorities, non-governmental agencies and the financial services sector. It sets out the economic, societal and personal benefits of increased financial literacy and gives an overview of the provision of financial education in the EU. The Communication presents some basic principles to guide providers of financial education, based on existing best practices. It also announces some future initiatives in this area. These initiatives range from the publication of an online reference database of financial education programmes and research to an enhancement of the existing Dolceta online education tool to help teachers to incorporate financial matters into the school curriculum.

FINANCIAL SERVICES: COMMISSION ENCOURAGES BETTER FINANCIAL EDUCATION FOR EU CITIZENS

The European Commission has adopted a Communication on Financial Education. The Commission stresses the importance of increasing the ability of Europe's citizens to understand and engage with financial products and services. Enhancing financial education has substantial benefits for consumers, the economy and society. The Commission sets out some basic principles to guide financial educators; and announces some practical initiatives.

Internal Market and Services Commissioner Charlie McCreevy said: "Too many consumers lack a basic understanding of financial products and services. They do not choose the products that best meet their needs or make financial provision for the future. Financial education is a key element in empowering our citizens to take more appropriate financial decisions. I strongly encourage Member States, consumer organisations, the financial industry and other stakeholders to take action to educate citizens on financial matters. The European Commission will also play its role."

Today's Communication sets out some basic principles to guide providers of financial education, based on existing best practices. These include a call to make financial teaching available throughout citizens' lives, starting at school; the need to ensure impartiality and objectivity when delivering financial education; and a recommendation to tailor programmes to the real needs of the target audience.

The Commission will also be taking some initiatives in this area. In particular, it will publish an online reference database of financial education programmes and research and will enhance the existing Dolceta online education tool (http://www.dolceta.eu) to help teachers to incorporate financial matters into the school curriculum.

Financial education should not be seen as the only means to address information asymmetries between consumers and providers, but rather as a complement to adequate consumer protection and to the responsible behaviour of financial services providers.

Today also sees the publication of the results of a wide-ranging study of financial literacy schemes and research in the 27 EU Member States undertaken on behalf of the Commission. This study aims to facilitate learning from existing initiatives and research and highlights the very uneven provision of financial education within the EU.

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SURVEY OF FINANCIAL LITERACY SCHEMES IN THE EU

This survey was carried out by Evers & Jung Financial Services Research and Consulting from January till November 2007. Covering 180 schemes and initiatives, it presents an extensive overview of the financial literacy schemes for the majority of the Member States and provides an accurate picture for some Member States. The study shows that financial literacy is a growing priority, both for the EU institutions and the market players. The survey is presented in three different sortings: scheme provider country, provider status and target group. In the course of 2008 it will be developed into an online database and updated regularly.

See attachment below.

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EU Press release:

Tuesday 18 December: Improving the delivery of the benefits of financial market integration to Europe's citizens - help stakeholders to develop financial education schemes

The news:
The Commission will adopt a communication which is intended to help stakeholders to develop financial education schemes by raising awareness of the need to address low financial education and encourage and promote the provision of high-quality financial education within the EU.
This is just one element in the package of measures on retail financial services set out in the Commission's report on a Single Market for 21st Century Europe, whose aim is to improve the delivery of the benefits of financial market integration to Europe's citizens.

The background:
Financial education is the process by which individuals improve their understanding of financial products and concepts, and develop the skills necessary to make informed financial decisions. It is a life-long issue. Financial education does not replace, but is complementary to, measures aiming to ensure the appropriate provision of information, protection and advice to consumers.
Numerous international surveys have demonstrated a low level of understanding of financial matters on the part of consumers. At the same time, the education of citizens in financial matters is becoming increasingly important as innovation and globalisation are increasing the range and complexity of financial services on offer. The current difficulties in the US sub-prime mortgage market, where many consumers have taken on mortgages beyond their means owing, in part, to a lack of understanding of product features, serve as a reminder of the magnitude of the problem.

ID: 40691
Author(s): iff
Publication date: 18/12/07
   
URL(s):

Link to European Commission website: Information on financial education
 

Created: 18/12/07. Last changed: 21/12/07.
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