S4 Ep23: Director’s Cut: Making Europe financially literate

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’.