European Commission initiatives for financial education

1. European Commission initiatives for financial education Magyar Nemzeti Bank Conference on Financial Awareness 2 October 2008, Budapest Daniel Kosicki

2. Outline • Background • Communication on Financial Education • Commission initiatives • Financial education on EU agenda

3. Background • 2005: included in the White Paper on Financial Services Policy (2005-2010): Commission committed to promoting best practice, and potentially facilitating joint projects • 2007 March: Commission’s high level conference on Increasing Financial Capability • 2007 May: included in the Green Paper on Retail Financial Services, as element in “empowering consumers” • 2007 November: repeated in the Single Market Review (communication Single Market for 21st century Europe)

4. Background • DG SANCO: • Dolceta: financial services explained for adults (www.dolceta.eu) • Europa diary: includes information on consumer rights and options, including financial services • DG EMPL: project on "Financial education and its role in combating financial exclusion“. Conference on financial inclusion in Brussels on 28 May & study. Related research on financial education, indebtedness. • DG MARKT: Evers & Jung Study mapping out financial literacy schemes in the EU (November 2007)

5. Commission Communication on Financial Education COM(2007)808 of 18 December 2007 To promote financial education across EU: • Importance and benefits of financial education • Basic principles for provision of high-quality financial education schemes • New Commission’s initiatives

6. Commission Communication on Financial Education • Availability at all stages of life • Targeting to meet the specific needs of consumers • Inclusion in the school curriculum • Raising general awareness on financial issues Principles for financial education provision:

7. Commission Communication on Financial Education • Industry-led programs to be fair, transparent and unbiased • Empowering the teachers • Promoting coordination at national and international level • Need for continuous evaluation Principles for financial education provision (continued):

8. Commission Communication on Financial Education “The Commission invites national administrations, financial services providers, consumer organisations and other stakeholders to develop national strategies on financial education with appropriate financial education programmes with regard to the above principles for financial education.” Principles for financial education provision:

9. Commission Communication on Financial Education • Network of Practitioners - EGFE • New module of Dolceta: providing tools for school teachers • Online database of financial education schemes and research in the EU - EDFE • Patronage to public and private actors organising financial education events and conferences The Commission initiatives:

10. Expert Group on Financial Education (EGFE) • To (1) exchange best practices and (2) advise the Commission • 25 members selected from over 100 candidates (industry, public sector, consumer organisations, academia). The list published on the COM website • Experts acting in a personal capacity (no formal link to institutions or organisations) • Six meetings planned during a 3 year mandate. Chair and secretariat by the Commission. The first meeting planned on 7 October in Brussels • Observers invited from MARKT/H3, SANCO, EAC, EMPL, FIN-USE, UNI-Europa Finance

11. Expert Group on Financial Education (EGFE) - 2 Topics proposedfor discussion by EGFE: • National strategies for financial education (1st meeting) • Financial education at school • How to educate consumers? • Preparing for retirement • Challenges for the industry (e.g. sales vs advice conflict) • Role of the EU and evaluation of COM initiatives

12. Dolceta Module 7: Financial Literacy – Tools for Teachers • To provide materials for teachers to facilitate inclusion of financial literacy in lesson programmes • Translated and adapted to circumstances for all MS – for voluntary use • Sponsor: SANCO in cooperation with MARKT • Contractor: EUCEN, Network of over 200 universities in 43 countries • Expert and Design Teams: developing the content • National Development Teams: adaptations. • Started in April ’08. Launching planned for early 2010.

13. European Database for Financial Education (EDFE) • Online “reference library” of financial education schemes and research in EU Member States by all stakeholders • Based on 180 schemes from the Evers & Jung study • Information categorised by various criteria such as: • provider • geographical base • subject • target audience • method of delivery • Fully searchable & regularly updated by registered users • Publication on the Europa website planned for November

14. European Commission patronage • Information Note on patronage published on COM website (under the Communication) • Offered to national/regional conferences and other events which give visibility and impetus to the financial education issues • Honorary support including a message, the right to use the Commission emblem, participation whenever possible • No financial support possible at this stage • Applications to be addressed directly to DG Internal Market & Services, Unit G1, taking account of the principles outlined in the Commission Communication and including the necessary details.

15. Financial education on EU agenda • Council Conclusions – adopted by Ecofin on 14 May 2008 “[ The Council] INVITES Member States to step up their efforts to provide financial education to citizens, to increase citizens' awareness of its importance in view of future challenges for private finances (pension, health financing, housing finance) and to give consideration to the usefulness of including financial literacy in school curricula, bearing in mind the principles identified in the Commission Communication, including training at all stages of life and programmes targeting the specific needs of each group of recipients, so that financial education consistently fulfils the criteria of transparency and objectivity (…)”

16. Financial education on EU agenda • European Parliament - Iotova Report (Protecting the consumer: improving consumer education and awareness as regards credit) • Rapporteur: Iliana Malinova Iotova (IMCO, PSE-BG) • IMCO vote planned for 7 October; the plenary vote for November • “[The Parliament] asks Member States (...) to establish a networkfor financial education in which both the public and private sector take part, and to encourage cooperation and dialogue between all actors”

17. Financial education on EU agenda [The European Parliament]: • Stresses the importance of establishing (…) the level of financial literacy of any Member State • Encourages Member States to include financial education in the primary and secondary school general curriculum • Encourages Member States to pay special attention to the educational needs of pensioners and workers at the end of their professional career • Calls on the Member States to set up training programmes in economics and financial services for social workers, since they are in contact with persons at risk of poverty and/or excessive debt

18. Conclusions • Financial education is above all a competence of the Member States – they should work out their national strategies • 2008: implementation of the initiatives announced in the Commission’s Communication • Evaluation and reflection on future policy by 2010

19. Contact Daniel Kosicki European Commission DG Internal Market and Services Unit G1 - Financial Services Policy Tel.: +32 (0)2 298 05 70 Fax: +32 (0)2 295 55 52 E-mail: daniel.kosicki@ec.europa.eu