Once I overcame the lethargy brought on by winter evenings, I attended the speech by Lussardi Annamaria, which was part of a series of lectures on financial literacy organized (quite rightly) by the Ramón Areces Foundation.
Annamaria Lusardi teaches at the George Washington University School of Business and is the visible (and thinking) head of the Global Financial Literacy Excellence Center. But above all, she is a visionary. She is not one of those visionary people who always seem to say “I already said that” while pointing their finger in your eye. She makes a close, rigorous, thoughtful speech with room for dialogue.
Her vision of financial literacy is based on numerous studies and her own thesis. In her presentation she especially highlighted the results of a test conducted recently with the U.S. Treasury in twelve OECD countries. The test consisted of asking the public three questions about basic financial concepts. And the result was hair-raising; less than half of the population of developed countries was able to answer these three basic questions.
With this starting point, many other interesting ideas came from Annamaria Lusardi’s speech. Some of the most notable were the following:
- You are your own CFO (Chief Financial Officer). In the future citizens will have to become more involved in knowing how to save and plan their finances. This is mainly due to three factors that are transforming our current situations: pension systems with states that are providing ever fewer guarantees, the labor market and financial markets.
- Financial literacy is the new literacy. Knowing how to manage our finances is already comparable to what being able to read and write was in the past. Therefore, basic financial knowledge should be acquired at an early age, and should even be included as a separate subject in the school curriculum. In addition, workplaces and learning spaces (libraries, museums, etc.) are also suitable for providing information on financial literacy.
- The three groups most in need of learning about financial literacy are women, youths and senior citizens. Strikingly in that test, women did not respond incorrectly, but with a simple “I don’t know”. Perhaps this fact makes them optimal financial advisors.
- Financial institutions should become involved in matters relating to financial literacy to achieve a balance with their customers.
Her speech ended with a warning against wastefulness from the former president of Harvard University, Derek Bok: “If you think education is expensive, try ignorance”.
I approached Annamaria at the end of her speech to congratulate her on her talk. I really wanted to lengthen the speech, the dialogue. I’m not one for using superlatives but the round of questions was extremely short. And if shyness had not prevented me, I would even have invited her to my house for dinner. Everyone knows that Spanish omelet is irresistible to any foreigner. Just imagine: Annamaria Lusardi, financial literacy and Spanish omelet. As a good friend of mine says, how could you say no?