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Annex 7

Welcome Speech by Mr. Klaas Knot, President of the Dutch Central Bank Good morning everybody! What a great turnout, and how good to see the young people with us; and all for such a great cause, a cause which one word sums up best: inclusion. In case this never occurred to you: you – and by this I mean Child and Youth Finance International and all participants in this conference – and De Nederlandsche Bank share a common goal! For us as a central bank, our main priority is financial stability. For without a financially stable climate, enterprises and consumers wouldn’t be able to concentrate on economic activities like earning money and spending it. With this objective in mind, • We pursue a policy aimed at an inflation rate that is always close to two percent • We supervise financial institutions • We monitor payment systems. I’m happy to say that this conference in fact has the same priority. Only you start from the bottom up: by seeking ways to familiarize citizens from an early age with financial products, you help to create financial awareness and thus to promote financial stability, on a personal level. And, clearly, in today’s world, your initiative has not come too soon. For financial awareness is more needed than ever before. Responsibility for financial decisions is increasingly being transferred to consumers, as are the risks attached. This trend is partly driven by the gradual withdrawal of the public sector as financier of social systems. As a consequence, consumers are increasingly being required to make important financial decisions for themselves and for their families in areas such as saving for the costs of their children’s education and for their own retirement. At the same time, financial products are becoming more and more sophisticated. The options for households are manifold. Just think of the wide variety of mortgage loans, life insurance policies or pension products available to consumers. However, as a great many surveys have brought home, not every consumer has an adequate understanding of the basic financial principles and products. According to one OECD survey, financial illiteracy is a common problem found throughout the world. This means that a lot of work needs to be done. For financial literacy not only ensures the financial well-being of households but, by preventing financial failures, also the smooth functioning of financial markets and the economy. Several events during the present financial crisis illustrate that problems might have been prevented or at least checked if financial illiteracy and financial knowledge had been more pervasive. It turned out that many consumers had bought financial products that carried risks they were barely aware of. Such as was the case with the residential mortgage loans which, especially in the United States, were issued at variable rates to households whose income was too low for repayment of those loans. Failed share leasing contracts and unit linked policies are another case in point. These examples underscore the importance of good financial education. The question arises where it is best to start with enhancing financial awareness? The answer to this question is clear-cut. It should start with children, for adult behaviour often goes back to behaviour

Children And Youth Reshaping The Future Of Finance

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2012 - The First Annual Child and Youth Finance International Summit & Awards Ceremony 2012  

The report provides an overiew of the sessions and outcomes of CYFI's first International Summit and Awards Ceremony held in Amsterdam from...

2012 - The First Annual Child and Youth Finance International Summit & Awards Ceremony 2012  

The report provides an overiew of the sessions and outcomes of CYFI's first International Summit and Awards Ceremony held in Amsterdam from...