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[Pages:216]OECD-US Treasury International Conference on Financial Education

VOLUME I - Keynote addresses, interventions and main policy recommendations

OECD-US Treasury International Conference on Financial Education

Taking Financial Literacy to the Next Level: Important Challenges and Promising Solutions

PROCEEDINGS

In order to further advance the policy dialogue on financial education, the OECD and the US Treasury co-organised a high-level International Conference on Financial Education, on 7-8 May 2008, in Washington D.C. This successful and particularly well attended global event, and the resulting publications, are an integral part of the OECD Project on Financial Education.

The first volume of the proceedings provides a selection of main speeches delivered and papers presented at the conference. The rich analysis in these papers, and the sharing of experience and good practices of senior governmental and private experts makes this publication a valuable reference tool.

VOLUME I

VOLUME I - Keynote addresses, interventions and main policy recommendations

U.S. Treasury Department

Washington, DC, USA May 7-8, 2008

OECD-US TREASURY INTERNATIONAL CONFERENCE ON FINANCIAL EDUCATION Taking Financial Literacy to the Next Level: Important Challenges and Promising Solutions

Washington D.C. 7-8 May 2008

PROCEEDINGS

VOLUME I Keynote Addresses, Interventions and Main Policy Recommendations

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FOREWORD

On May 7-8, 2008, the U.S. Treasury Department and the Organization for Economic Cooperation and Development (OECD) co-organized a two-day high-level International Conference on Financial Education in Washington, DC. It generated a multinational dialogue on recent developments, innovative methods, and successful tactics for improving financial literacy.

The culmination of this conference was the result of OECD`s ongoing financial education project which started in 2003 and was built on three main pillars: the elaboration of analytical and comparative research reports; the development of international principles and good practices; and the promotion of enhanced international awareness, cooperation and policy dialogue on financial education1.

Through this partnership between the Treasury Department and OECD, the Treasury Department accomplished one of its calls to action outlined in its national strategy entitled, Taking Ownership of the Future: The National Strategy for Financial Literacy2, which was issued in 2006 by the U.S. 20agency Financial Literacy and Education Commission.

Participants included over 200 leaders from governments, universities, businesses, non-profits and international organizations that, in total, represented 43 countries. Through a far-reaching programme, these international high-level policy and decision makers and practitioners shared their approaches, experiences and best practices on most topical and challenging financial education issues including:

Creating and implementing national financial education strategies

New realities of retirement savings

Enhancing awareness of risks transferred to individuals

Credit challenges and opportunities resulting from the mortgage problems

Developing and delivering youth financial literacy programs

Increasing financial access for underserved groups

Identifying efficient practical tools and innovative techniques to implement financial education programs

In his opening address at the conference, the OECD Deputy Secretary-General, Mr. Pier Carlo Padoan stressed that Financial education is not just for investors. It is just as important, if not more so, for the average family trying to balance its budget and save for their children`s education and the parents` retirement. He touched upon upcoming challenges for financial education and concluded by noting that financial education should be considered as a complement to, rather than a substitute for, proper financial market regulation and supervision.

1 For further information, on this project, see the foreword of volume II and the OECD International Gateway for Financial Education (financial-)

2 For more information about the U.S. National Strategy, see .

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The Secretary of the Treasury Department Henry M. Paulson, Jr. in closing the conference stated that as the world has become more connected and financial products have become more complex, there is an even greater need for financial education. He also said people everywhere want to know how to wisely spend, save and invest their money. They want to build a more secure and prosperous future for themselves and for their families.

Among the keynote speakers and moderators of the conference, Dan Iannicola, Jr., Treasury Deputy Assistant Secretary for Financial Education and Executive Director of the President's Advisory Council on Financial Literacy, emphasized that in spite of nations` unique economic characteristics, they share a number of common problems when their populations lack needed financial skills. He said a goal of the conference was to bring countries together to look for common solutions to these problems. Andr? Laboul, head of OECD's Financial Affairs Division, also stressed the need to develop a new culture of financial responsibility and help citizens become financially educated. He said that in a world where financial risks are increasingly transferred to households, financial education has become an essential policy tool.

This volume provides the details of the conference sessions and panel including the main keynote addresses and summary of interventions of speakers as well as specific policy conclusions of moderators for each session3.

The OECD and the Treasury Department would like to especially thank the Organization of American States and its staff for hosting the event. They are also grateful to all the speakers and moderators for their valuable contributions to the success of this conference.

The views expressed here are the sole responsibility of their authors and do not necessarily reflect those of the OECD Committee on Financial Markets, Insurance and Private Pensions Committee and Working Party on Private Pensions, the Secretariat, the Member or non-Member countries. The publication has been prepared by the OECD Financial Affairs Division with the collaboration of the Treasury Department`s Office of Financial Education.

Dan Iannicola

Treasury Deputy Assistant Secretary for Financial Education and Executive Director of the President's Advisory Council on Financial Literacy

Andr? Laboul

Head of the Financial Affairs Division OECD

3 PowerPoint presentations and papers included in this publication as well as bios of moderators and speakers are available on the OECD Conference webpage daf/financialeducation. The conference was transmitted live by the OAS, with the support of the Young Americas Business Trust, and can be viewed through their videos on demand service at .

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TABLE OF CONTENTS

FOREWORD............................................................................................................................... 3

OPENING ADDRESS, IMPORTANCE OF FINANCIAL EDUCATION Pier Carlo Padoan, Deputy Secretary-General of the OECD ............................................... 9

SESSION I- NATIONAL STRATEGIES: CREATION AND IMPLEMENTATION....... 13 Chair: Andr? Laboul, Head of Financial Affairs Division, OECD .............................................

A- Chris Pond, Director of Financial Capability, FSA, United Kingdom ............................................14 B- Paul Clitheroe, Chairman, Financial Literacy Foundation Advisory Board ....................................16 C- Diana Crossan, Retirement Commisson, New Zealand...................................................................27 D- Dan Iannicola, Jr., Treasury Deputy Assistant Secretary for Financial Education and

Executive Director of the President's Advisory Council on Financial Literacy, United States .......30

SESSION II- DIVERSE APPROACHES ............................................................................... 35 Chair: Ursula Menke, Commissioner, Financial Consumer Agency of Canada, Canada

A- Jeanne Hogarth, Manager for the Consumer Education and Research Section, Division of Consumer and Community Affairs, Federal Reserve Board, United States ....................................38

B- Annamaria Lusardi, Professor, Dartmouth College/Harvard Business School, United States ........41 C- Alison O`Connell, OECD Consultant on Methodology to Evaluate Financial

Education Programs, New Zealand .................................................................................................48

GUEST SPEAKER Martin J. Gruenberg, Vice Chairman, Federal Deposit Insurance Corporation and Chair of the Executive Council and President of the International Association of Deposit Insurers .... 49

SESSION III- RETIREMENT SAVINGS: NEW REALITIES FOR CONSUMERS........ 53 Chair: Mr. D. Swarup, Chairman, Pension Fund Regulatory and Development Authority, India

A- Nicolas Blancher, Deputy Division Chief, Monetary and Capital Markets Department, IMF ........57 B- Ambrogio Rinaldi, Chair, OECD Working Party on Private Pensions, Central Director,

COVIP, Italy....................................................................................................................................65 C- Lena Larsson, Annika Sund?n and Ole Settergren, OECD Consultants (see report in Vol. II).......69 D- Jeff Dominitz, Based on joint work with Angela Hung and Joanne Yoong RAND

Corporation...................................................................................................................................... 71

SESSION IV- RISK AWARENESS: ENHANCING EDUCATION AND PROTECTION OF HOUSEHOLDS ON LARGE-SCALE RISKS ..................................... 77

Chair: Manuel Aguilera-Verdusco, Chair of the Comisi?n Nacional de Seguros y Fianzas CNSF, Mexico, Chair of the OECD Insurance and Private Pensions Committee

A- Dr. Rebekah Green, Risk RED, OECD Consultant (see report in Vol. II) ......................................79 B- Dr. Erwann Michel-Kerjan, Managing Director, Wharton School Risk Center, University

of Pensylvannia, Chairman of the OECD High-Level Advisory Board on the Financial Management of Large Scale Catastrophes, United-States ...............................................................81 C- Katsuo Matsushita, General Manager, General Insurance Association of Japan ............................93 D- Semih Y?cemen, Professor and Director, Earthquake Engineering Research Centre, Member of Management Board, Turkish Catastrophe Insurance Pool, Turkey...........................................100

GUEST SPEAKER James Flaherty, Minister of Finance, Canada ......................................................................... 109

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SESSION V- CREDIT: CHALLENGES AND OPPORTUNITIES................................... 115 Chair: Thomas Wieser, Director General for Economic Policy and Financial Markets, Federal Ministry of Finance, Austria, Chair of the OECD Committee on Financial Markets

A- Bruno Levesque, Principal Administrator Financial Education, OECD .......................................116 B- Mary O`Dea, Consumer Director, Irish Financial Regulator, Ireland ...........................................120 C- Faith Schwartz, Executive Director, HOPE Now Alliance, United States ....................................124 D- Jane Nash, Head of Government and Regulatory Affairs ANZ, Australia ....................................128 E- Pete Crear, President & Chief Executive Officer, World Council of Credit Unions .....................134

SESSION VI- TOOLS II ........................................................................................................ 139 Chair: Dan Iannicola, Jr., Treasury Deputy Assistant Secretary for Financial Education and Executive Director of the President's Advisory Council on Financial Literacy, United States

A- Daniel Kosicki, Policy Officer, DG Internal Market and Services, European Commission...................................................................................................................140

B- Marcin Polak, Education Now Foundation, Poland ......................................................................146 C- Kathleen M. Floyd, Executive Director, The Stock Market Game, United States ........................152

SESSION VII- YOUTH FINANCIAL LITERACY: DEVELOPMENT, DELIVERY AND EXECUTION OF PROGRAMS ........................... 155

Chair: Erik Pointillart, Chair of the Institut pour l'?ducation Financi?re and General Director Caisse d'Epargne, France

A- Shaun Mundy, Former Head of Financial Capability Department, Financial Services Authority, UK, and OECD Consultant ..........................................................................................159

B- Koid Swee Lian, Consumer and Market Conduct, Director, Bank Negara, Malaysia...................161 C- Dara Duguay, Director of Citi's Office of Financial Education, Citigroup, United States ............166 D- Roy Thomasson, Chief Executive Officer, Young American Business Trust, Organization

of American States ........................................................................................................................174 E- Klaus Wertenbroch, Professor of Marketing, INSEAD.................................................................176

SESSION VIII- UNDERSERVED GROUPS: GREATER FINANCIAL ACCESS THROUGH EDUCATION........................................ 183

Chair: Christopher F. Egan, U.S. Ambassador to the OECD

A- John Bryant, Founder, Chairman and CEO of Operation Hope, Vice-Chairman, U.S. President's Advisory Council on Financial Literacy, United States ..............................................184

B- Olivia Davids, Head of Consumer Education, Financial Services Board, South Africa ...............186 C- Guillermo Zamarripa, Head of the Banking, Securities and Savings Unit of the Ministry of

Finance and Public Credit of Mexico, Mexico ..............................................................................192 D- Susan L. Rutledge, Regional Coordinator on Corporate Governance and Financial

Consumer Protection, World Bank Programs................................................................................199

CONCLUDING REMARKS Henry M. Paulson, Jr., Secretary of the United States Treasury. ................................. 205

APPENDIX- Programme of the Conference............................................................................ 207

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