The OECD work on Financial Education & Consumer Protection - for whom and for what?



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Executive summary

Since 2003 the OECD has issued several policy recommendations on financial education of workers and households. Its work has gained international recognition including at the G20 level.

The need for greater financial education, particular in the current post-2008 crisis period, is a direct consequence of the growing complexity and sophistication of financial markets and products, which in turn are by-products of past de-regulation and privatisation policies. The case of pension privatisation reforms is telling in this regard. It is also a consequence of the change in the business model of banks, shifting pre-crisis from a “creditor culture” to an “equity culture”. If financial products and services have become more complex and less transparent from a consumer perspective it is perhaps first and foremost because of the trend toward evermore “financial innovation” by banks and other financial services.

Trade unions are key stakeholders of financial education. Educating workers about their rights – including their financial rights – is central to their mission. They are also active in national policy debates on financial education and consumer protection-related issues. Trade unions should promote an alternative approach to financial education based on the experience and expertise accumulated by their members.

A few guiding principles are suggested in the paper. First, financial education should aim at triggering policy and regulatory change to redress, and not support, the current trend toward individualisation of financial risks (credit consumption, mortgage, pensions, other saving schemes). Second, financial education should be treated as a means to achieve community empowerment, including in the informal sector, and to help reduce gender inequalities. Finally trade unions should support greater role and responsibilities for consumer associations, NGOs and other civil society organisation in the delivery of financial education. This is all the more needed given the overwhelming lobbying power of banks and their influence in current international forums on financial education.