March 4, 2021

Bank of Spain regrets that the level of financial culture remains low

The governor of the Bank of Spain, Pablo Hernández de Cos, lamented this Friday that despite the efforts made from the private sector, from the public sector, and the general increase of the educational level in Spain, there is still "a low level of culture financial, "especially among the youngest and those over 65 years of age.

In this sense, he has warned that most sources of financial knowledge are acquired through real experience, which can lead to "economic costs".

"One of the main sources of financial knowledge of the population is derived from their real experience with financial and credit markets, and economic phenomena." The "risk" is that it also bears "economic costs associated with inadequate decisions, or an absence of decisions, derived from an insufficient understanding of the main financial elements at stake," he said.

Hernández de Cos has participated this Friday in the EduFin Summit 2019, an event that brings together experts in financial education.

In his speech, the governor has insisted on the importance of financial education, since it directly affects the well-being of citizens, their ability to choose, as well as the financial sector's ability to offer its products and strengthen its reputation.

He regretted that despite the efforts made, there is still a low level of financial culture in Spain, especially among the youngest and those over 65.

And is that the Survey of Financial Competences recently developed by the Bank of Spain and the National Securities Market Commission (CNMV), revealed that only one in eight people between 18 and 34 years correctly answer questions on inflation , the interest rate or risk diversification.

"It is especially significant in the case of your familiarity with the effects of inflation," the governor said, since in his opinion, a high percentage of the young population is unaware of the effects that a change in the inflation rate can have on the real value of the payments of a fixed rate mortgage.

"Given that the acquisition of mortgages is common in these ages, doubts arise, again, about whether all the relevant financial factors are being taken into account when financing the purchase of a home," he warned.

(tagsToTranslate) Bank (t) Spain (t) regrets (t) financial (t) culture

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