On 24 March 2020 the European Banking Federation organised a webinar bringing together leading international speakers on financial literacy to mark the launch of the European Money Week 2020. Fostering financial education has become essential for the well-being of citizens especially at times of economic turmoil.
Indeed, this period of crisis reminds us of how important financial education is, so that we can better anticipate its consequences on households during and after these moments of instability and economic uncertainty.
Financially vulnerable populations are particularly exposed and are unfortunately not sufficiently equipped to cope with the crisis. Many households and entrepreneurs will face financial difficulties caused by economic conditions and will risk in the short, even medium term, finding themselves in a situation of financial fragility.
It is therefore urgent to take the necessary measures to increase public awareness of the need to be better informed and armed in terms of knowledge, but also to be able to guide everyone to the appropriate source of support.
The European Commission must clearly provide leadership in financial education. Not to legislate and/or regulate but to coordinate the various national initiatives and actions as well as European-scale projects.
An informal Working Group (WG) has been set up, bringing together representatives from the Netherlands, Portugal, Italy, France and Spain. This WG recently presented its draft action plan to the European Commission (DG FISMA), which has undertaken to monitor this work.
This plan notably plans to redefine what financial education is, to prove through scientific results its effectiveness and to define priorities while focusing on the projects that will have the most impact. On this last point, we know that people with a low level of education are at greater financial risk.
Faced with the crisis we are currently experiencing, the focus should be on those who will face a drop in income in the coming period (people on a fixed-term contract, people who risk losing their jobs e.g.).
Points raised often during the Webinar were
- financial education is part of a global sustainability policy
- technology is an important ally (especially in this period of confinement)
- raising awareness, taking action must be done in parallel with good legislative decisions
- it is necessary to simplify the information dedicated to investors
- it is up to the national regulatory authorities to take the lead in favouring intensive collaboration with all the relevant stakeholders
- collaboration between all the actors concerned is essential if not the key to success, for better financial health for everyone and for the global economy
Building Financial Resilience in Turbulent Times – Webinar material
By Jessica Thyrion – Adviser, Financial Education