Remarks by Angel Gurría, Secretary-General of the OECD, 5 September 2013, St. Petersburg, Russia
Press conference on Financial Education
(As prepared for delivery)
Minister Sulianov, Ladies and Gentlemen,
It is my greatest pleasure to present the latest outcome of OECD’s work on financial education in collaboration with Russia’s G20 Presidency: Advancing National Strategies for Financial Education. Let me commend the Russian Government and Minister Sulianov for their leadership on financial education - including at the G20 level. I also want to thank the Russian Ministry of Finance for its precious support to OECD activities in this domain – including through the Russian Trust Fund.
In Los Cabos last year, G20 leaders endorsed the High-level Principles on National Strategies for Financial Education developed by the OECD and its International Network on Financial Education. The principles provide the framework for the development of effective financial education strategies – i.e. strategies that are tailored to countries’ needs and circumstances and that make an efficient use of dedicated resources. We were then asked by the G20 to elaborate on the practical design and implementation of these strategies. Hence this work - now delivered to Leaders.
The recognition by the G20 of the importance of financial education for social, economic and financial inclusion as well as financial stability derives from the following observations:
- On the one hand, individuals are increasingly responsible for taking key financial decisions in a complex and volatile environment: they are benefiting from an improved access to financial services, but decisions thereon are increasingly complex and sophisticated. People are also confronted with a rapidly evolving welfare system that requires them to make difficult choices.
- On the other hand, the level of financial literacy of most citizens remains appallingly low:
- Surveys show that consumers in most countries have difficulty understanding basic key financial concepts. For example, a survey in my country, Mexico, recently revealed that only 37% of the consumers tested were able to answer a simple question on interest rates;
- Consumers also limit planning ahead: 72% of Dutch employees know nothing about pension schemes;
- They also often fall into debt even at young ages - in the UK, 52% of teenagers have been in debt by the time they are 17.
These are worrying statistics! Let’s not forget that the crisis started as a credit and mortgage crisis and showed how toxic the lack of understanding by consumers of financial products can be.
To address these challenges, the OECD is assisting governments with the development of effective National Strategies for Financial Education, designed in co-ordination and partnership with all relevant stakeholders, including regulators, consumers’ associations and the financial industry. We are presenting today the experience of 21 G20 and invited countries, plus the European Commission.
- It points to encouraging progress in this domain. Among the 21 countries covered by our publication:
- 16 are in the process of implementing, revising or developing a strategy;
- 15 have already established a survey aimed at rigorously measuring the level of financial literacy of their population - and nine will participate in the special financial literacy exercise undertaken as part of the 2015 OECD Programme for International Student Assessment
- Our publication also identifies good practices:
- In Brazil for instance, a coordinating body has been established - including both public and private institutions - to develop an ambitious national strategy;
- In Australia, financial education has been incorporated as part of the regular curriculum;
- And Russia has proven its exceptional commitment to financial education by earmarking more than USD100 million to develop a comprehensive five-year project aimed at improving the financial literacy of Russian citizens, and at providing them with reinforced financial consumer protection.
But challenges remain going forward:
- Resources should be earmarked to public institutions with a clear and specific mandate to promote financial education;
- The partnership with the education system should be reinforced to ensure that financial education can be introduced and mainstreamed into school curricula;
- The role of key private and civil society stakeholders should be strengthened and clarified;
- Programmes of financial education need to be systematically evaluated;
- Last but not least, stronger focus should be laid on vulnerable groups’ needs. This is particularly true for youth, migrants and women, as addressed in the second new OECD publication delivered to G20 Leaders: Women and financial education.
Very concretely also, data on financial literacy that can be compared across countries needs to be more systematically collected: it is essential to identify international benchmarks and to track progress. The OECD is actively working on this with volunteer countries.
Let me conclude by saying that the OECD – together with the membership of the International Network on Financial Education - is committed to supporting further the implementation of national strategies and to providing additional guidance based on good practices developed around the world. We are now preparing, and by the 2014 Summit will deliver, a dedicated policy handbook thereon.
G20 countries step up action to help consumers make informed financial decisions
OECD and the G20