26 January 2022

Commissioner McGuiness: Keynote speech at launch event for joint EU OECD-INFE financial competence framework

n this sense this is a very good start to the day because I am very committed to this topic. And what I believe is that we need to talk about money.

So this is really an important morning, and it is a milestone, as far as I am concerned, in the cooperation between the Commission and the OECD – because today we are releasing the financial competence framework for adults in the European Union.

And a huge thank you to the teams in DG FISMA and the OECD for their hard work but particularly for their commitment to this really important project.

I’m also really happy to be joining the OECD Secretary-General, a great collaborator and friend in this work. And I look forward to hearing his message.

The Commission and the OECD share a commitment to financial education and improving financial literacy.

Now I think we need to start by defining that term. So, “financial literacy”, what is it and why is it so important?

Very briefly, financial literacy refers to the knowledge, the skills, and the attitudes we all need to make sound financial decisions.

So what does that look like, then, in concrete terms? How would you recognise someone who is financially literate? How do they operate that is different from those who lack the skills of financial literacy?

So let us take an example of booking a holiday. And maybe because COVID looks like coming under control, and people may start looking more at travelling more freely. And that is our hope and expectation.

But let’s look at that from the point of view of financial literacy.

The first question is how much you can afford to pay for a holiday, for this particular trip.

Maybe you are going to set aside some money for this holiday, so you have a savings goal.

And you start by researching flights and accommodation, checking to see if there are different price comparison websites to make sure you get the best value for you money.

And you might also need to be aware that your browsing history might impact the prices you see.

And you might see that different travel providers offer carbon offsetting, for a price.

So before paying, you look at the fine print to understand the terms and conditions, like the cancellation policy. And again, given our recent experience, that is a key part of our holiday planning.

So then you need to decide how to pay – maybe it’s a debit card, a credit card, a bank transfer, or a new fintech option.

Again, you might be headed outside the Eurozone, so you need to exchange your euros for another currency.

Here you would compare different providers to find the best rate and the lowest fees.

And you are also going to look at travel insurance to cover you against loss, damage or injury while you’re away or indeed as you travel.

And then, before you travel, you would sit down to draw up a holiday budget, and think about the different activities you want to do and what you can afford.

And if you do all of that, all of those decisions will add up to an enjoyable holiday that does not break the bank.

So one holiday requires many financial decisions.

And therefore a lifetime requires many more, and indeed many complex decisions.

Someone who is financially literate can think about the different options, assess the information provided, and make the decisions that are right for them...

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