With the COVID-19 crisis, financial education is more important than ever. This was the message conveyed by several financial organisations at an online conference organised by the European Banking Federation (EBF) on Tuesday 24 March on “Building Financial Resilience in Turbulent Times”.
Conference participants were asked to answer the question: Are European citizens financially resilient enough to cope with the economic fallout from the COVID-19 health crisis? 54% answered ‘no’, 18% ‘yes’ and 27% ‘maybe’. Something to set the tone.
According to Annamaria Lusardi, Director of the Global Financial Literacy Excellence Centre, the link between financial fragility and financial education is well established. She has made it a subject of study and believes that countries still have a long way to go in this area, even the most advanced economies.
“More than ever, we need those skills and knowledge to navigate these complex waters”, she said.
For Salvatore Nigro, who heads JA Europe, a network providing employment and entrepreneurship preparation programmes in 40 countries, there are three lessons to be learned from previous economic crises. First of all, financial education should start at a very young age, around 7 years old, according to him. But successful financial education must also be linked to technology and requires collaboration between the public and private sectors, he added.
In the view of participants, the current crisis is now forcing financial education to be placed at the top of the European agenda, focusing on the most vulnerable, especially those who will lose their jobs during the crisis.
According to Chris De Noose, Director-General of the WSBI-ESBG, the European Commission has a special role to play. It should not go so far as to regulate financial education, but could at least play a coordinating role between the different initiatives, he said. InsuranceEurope’s Arthur Hilliard said it could initiate a ‘European Day of Financial Education’ or further explore how to integrate financial education into its legislative proposals. Bernard Delbecque of EFAMA, for his part, suggested that the Commission should allocate funds to support financial education in the Member States.
“Financial education has been knocking at the door of the EU for years now, but the doors have only opened by an inch so far”, lamented Olaf Simonse, who heads the Dutch Ministry of Finance’s ‘Wijzer in Geldzaken’ platform. A situation that he said could soon change, since in a telephone call last week with Portugal, Spain, France, Italy and the Netherlands, the Commission agreed to move forward on this issue, he reported.
For his part, the Director in the Commission’s Directorate-General for Financial Stability, Mario Nava, recalled the limited powers the Commission has in this area. In addition, the Mortgage Credit Directive and the Payment Accounts Directive mention financial education, he said. In addition, the founding regulation of the European Banking Authority provides a mandate for the review and coordination of financial education by the competent authority, he argued.
While Mr Nava acknowledged that more needs to be done, he stressed the need for a “joint effort”. In doing so, he, in turn, sent a message to the industry to simplify financial products and build trust by providing good financial advice. (Original version in French by Marion Fontana)