Financial Literacy in Europe
RESEARCH FINDINGS ON FINANCIAL LITERACY IN EUROPE
HONOURS RESEARCH PAPER
10/31/2010
PALLAVI SOMANI
SYBMS
INDEX
FINANCIAL LITERACY………………………………………….2
EUROPE AND FINANCIAL LITERACY………………………...4
EUROPEAN UNION AND FINANCIAL LITERACY……………9
FRANCE……………………………………………………………15
GERMANY…………………………………………………………18
ITALY………………………………………………………………21
UNITED KINGDOM……………………………………………….24
SPAIN……………………………………………………………….27
OVERVIEW OF FINANCIAL LITERACY IN OTHER
EUROPEAN COUNTRIES ………………………………………...29
WAY AHEAD……………………………………………………….33
CONCLUSION………………………………………………………34
BIBLIOGRAPHY……………………………………………………35
FINANCIAL LITERACY
An individual 's ability to make informed judgments and effective decisions regarding the use and management of their money is called Financial Literacy. It refers to the knowledge required for managing personal finance. It is not formal education in finance. Instead it encompasses an understanding of how to use credit responsibly, manage money, minimize financial risks and derive long-term benefits of savings. Using information and objective advice, they develop the skills and confidence to become more conscious of financial risks and opportunities and make informed choices to advance their financial position. Financial education is increasingly significant, and not only for investors. It is becoming crucial for the average family trying to decide how to balance its budget, buy a house, fund the children’s education and ensure an income when the parents retire. The growing sophistication of financial markets means clients are not just choosing between interest rates on two different bank loans or savings plans, but are rather being presented a variety of complex financial instruments for borrowing and saving, with a large range of options. Simultaneously, the responsibility and peril for financial decisions that will have a major impact on a person’s future life, notably pensions, are being shifted increasingly to workers and
HONOURS RESEARCH PAPER
10/31/2010
PALLAVI SOMANI
SYBMS
INDEX
FINANCIAL LITERACY………………………………………….2
EUROPE AND FINANCIAL LITERACY………………………...4
EUROPEAN UNION AND FINANCIAL LITERACY……………9
FRANCE……………………………………………………………15
GERMANY…………………………………………………………18
ITALY………………………………………………………………21
UNITED KINGDOM……………………………………………….24
SPAIN……………………………………………………………….27
OVERVIEW OF FINANCIAL LITERACY IN OTHER
EUROPEAN COUNTRIES ………………………………………...29
WAY AHEAD……………………………………………………….33
CONCLUSION………………………………………………………34
BIBLIOGRAPHY……………………………………………………35
FINANCIAL LITERACY
An individual 's ability to make informed judgments and effective decisions regarding the use and management of their money is called Financial Literacy. It refers to the knowledge required for managing personal finance. It is not formal education in finance. Instead it encompasses an understanding of how to use credit responsibly, manage money, minimize financial risks and derive long-term benefits of savings. Using information and objective advice, they develop the skills and confidence to become more conscious of financial risks and opportunities and make informed choices to advance their financial position. Financial education is increasingly significant, and not only for investors. It is becoming crucial for the average family trying to decide how to balance its budget, buy a house, fund the children’s education and ensure an income when the parents retire. The growing sophistication of financial markets means clients are not just choosing between interest rates on two different bank loans or savings plans, but are rather being presented a variety of complex financial instruments for borrowing and saving, with a large range of options. Simultaneously, the responsibility and peril for financial decisions that will have a major impact on a person’s future life, notably pensions, are being shifted increasingly to workers and
Bibliography: Author: Ewart S Williams Date: January 31, 2007 Author: Bank of Spain Date: January 25, 2005