Financial Education a Special Joint G20 Publication by the Government of the Russian Federation and the OECD
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National Strategies for Financial Education A Special Joint G20 Publication by the Government of the Russian Federation and the OECD Advancing National Strategies for Financial Education A Joint Publication by Russia’s G20 Presidency and the OECD Advancing National Strategies for Financial Education A Joint Publication by Russia’s G20 Presidency and the OECD This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. 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MESSAGE FROM RUSSIA’S G20 PRESIDENCY Most financial literacy surveys conducted worldwide, including in G20 countries show that a majority of the population do not have sufficient knowledge to understand even basic financial products and the risks associated with the products. A majority of individuals do not plan for the future and fail to make effective decisions to manage their finances. As the global crisis has shown, this can have a negative impact on financial and economic stability as well as on individuals’ or households’ wellbeing, especially among low-income groups. The financial crisis also triggered demand for financial literacy programmes around the world as well as more comprehensive strategic approaches aimed at wider access to financial products, and increased awareness as well as improved financial literacy and financial consumer protection. We believe financial education supported by effective consumer protection, while not being a panacea, can lessen the magnitude of future crises by enabling individuals to effectively use financial products and services and to make sound choices to protect themselves and fruitfully participate in financial and economic activities. Such measures can also help in promoting economic recovery and growth, supporting small and medium enterprises, boosting the creation of new jobs as well as decreasing poverty. The Russian Government has adopted a long-term strategy to strengthen the financial sector. It includes measures to improve access to financial services of broad segments of the population, and to promote financial consumer protection and financial literacy. With the support of the World Bank, the Ministry of Finance launched in 2011 a comprehensive five-year nationwide financial literacy and financial education programme. Russia has also taken concrete actions to promote financial literacy internationally. The Russian Government funded the Financial Literacy Trust Fund in co-operation with the World Bank and the Organisation for Economic Co-operation and Development (OECD) in order to support international research to measure financial literacy, assess the effectiveness of 3 different approaches to financial education; and disseminate best practices and lessons learned. The final output of this work has recently been presented to the G20 in the framework of the Russia’s Presidency. In continuation of our joint international efforts in this area, I am also pleased to present to you the G20 Publication on National Strategies for Financial Education, prepared in co-operation with the OECD and devoted to the review of G20 and non-G20 countries’ experiences of developing and implementing national strategies in this sphere. I would like to thank all countries and organisations that have contributed to this publication. I would also like to express my sincere gratitude to the OECD for the preparation of this publication and for their constant efforts and leadership in this area. I hope that this publication will be useful to both the countries that are in process of developing their own national strategies as we currently are in Russia, as well as to those that wish to improve the effectiveness of their current strategies. We believe that High-level Principles on National Strategies for Financial Education, developed by the OECD and endorsed by the G20 Leaders in 2012, together with the rich body of experiences and recommendations included in this publication are all very important steps forward which can help us to support financial stability, inclusive development and individual and households’ wellbeing. Anton Siluanov Minister of Finance Russian Federation 4 MESSAGE FROM THE OECD SECRETARY-GENERAL Improving financial literacy has become an essential means towards greater economic, social and financial inclusion and an integral part of financial reform to prevent future crises. In all countries alike, evidence points to worrying low levels of financial awareness, knowledge, attitudes and competencies of large segments of the population. This is especially the case for vulnerable consumers who recently gained access to financial products, as well as for youth, women, migrants and low income groups. Thus, effective financial education can equip our citizens with the skills to take advantage of available financial services and to better assess the (financial) risks they confront. Financial education is also critical to restore trust and confidence in the financial system, promote financial stability and provide the necessary public backing to financial reforms. This is why we welcome the strong leadership and the emphasis the Russian G20 Presidency has put on this issue, and their support to OECD contributions in this field. G20 Leaders have highlighted the importance of financial education and literacy and committed themselves to take action to further advance effective policies. In particular, they endorsed in June 2012 the High-level Principles on National Strategies for Financial Education developed by the OECD and its International Network for Financial Education (INFE). These Principles support the development of nationally co-ordinated and tailored approaches to financial education. The Principles and the follow up actions undertaken by G20, OECD and partner countries are leading to better integration of financial education in national policies, to more effective programmes and enhanced financial reforms. Even though there is no one-size-fits-all model for such strategies, they all seek to better assess the population’s needs for financial literacy, organise stakeholders’ actions around agreed priority objectives, and harness available resources and expertise. In this context, efficiency is an important goal in the design and implementation of National Strategies for Financial Education. 5 This publication “Advancing National Strategies for Financial Education” is the fruit of the co-operation between the G20 Russia Presidency and the OECD, with the enthusiastic participation of G20 members and invited economies. Key outputs of this report include among others the need to: Establish clearer financial education mandates, objectives and resources for relevant public institutions; Assess populations’ s needs for financial literacy and develop internationally comparable evidence; Strengthen the involvement of education systems and ministries of education in financial education through national consultation, dedicated partnership and international dialogue; and, Develop core competencies on financial literacy for adults and youth to better define financial education objectives; define quality standards as well as guidelines on the involvement of private and civil sector in financial education. The Russian Ministry of Finance has been key for the development of more efficient financial education policies, through the Russian/World Bank/OECD Trust Fund for Financial Literacy and Education. We have been honoured to be at the forefront of the international efforts in this domain for a long time. We first launched a dedicated project on financial education in 2002 and have since spearheaded the efforts for the establishment of policy instruments on financial education. Since 2008, the OECD’s extensive activities in this area are developed through the INFE, which currently gathers more than 240 public institutions from 107 countries as well as relevant international organisations. This publication is an important reference for policy makers worldwide. I believe it will contribute to further enhance the financial education agenda and promote its integration in the broader financial reform. Ultimately, it should benefit individuals and households faced with the challenges and opportunities created by today’s financial markets. Angel Gurría Secretary-General Organisation for Economic Co-operation and Development 6 TABLE OF CONTENTS MESSAGE FROM RUSSIA’S G20 PRESIDENCY ............................................... 3 MESSAGE FROM THE OECD SECRETARY-GENERAL ..................................