The OECD has unveiled a set of principles and good practices for financial education and awareness in an effort to encourage greater financial literacy.

The principles are designed to encourage financial services firms and organizations such as consumer groups and citizen advice bureaus to do more to educate citizens in this area, the OECD says. They are also aimed at individuals who need to know how to manage mortgage and consumer debt and save effectively for retirement, the group adds.

OECD recommends that governments and others promote unbiased, fair and coordinated financial education. Financial institutions should be encouraged to check that clients read and understand information, especially when related to long-term commitments or services with potentially significant consequences, the OECD says.

Among other proposals are that financial education should start at school, be part of the good governance of financial institutions, be clearly distinguished from commercial advice and codes of conduct for the staff of financial institutions should be developed.

“The combination of increasingly sophisticated financial products and growing individual responsibility for financial decisions means that individuals in OECD countries need a better understanding of how to deal with financial markets,” it says, noting that OECD governments have recognized that they have a responsibility to help them do this.

“Financial education is becoming indispensable as in our societies the responsibility and risk for financial decisions is shifted more and more to individuals”, says Lorenzo Bini Smaghi, the chairman of the OECD’s Committee on Financial Markets which coordinated this work.

Recent surveys in OECD countries show that many people have low levels of financial literacy and even less awareness of the need for financial education, it notes. Without improved financial awareness, Bini Smaghi warns, “we may face serious economic and social problems in the near future.”


www.oecd.org/dataoecd/7/17/35108560.pdf