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December 7, 2022

ASF official: Romania’s financial education not figuratively but literally low, with serious consequences

Financial education in Romania hovers at modest levels, placing the country 124th of 143 in the global ranking of the states by this criterion, Cornel Coca Constantinescu, vice-president of the Financial Supervisory Authority (ASF) responsible for financial instruments and investments told AGERPRES in an interview.

Constantinescu says that the financial education is literally, not figuratively low, with serious economic and social consequences, requiring a plan of various actions in the long run, including information campaigns and courses tailored for particular segments of the adult population.

“Financial education in Romania is at a modest level, as found international surveys that placed Romania 124th of 143 in the global ranking of the states by financial literacy. Against the background of an increasingly complex economic environment, of the internationally increasing degree of financial intermediation and of the decisions the citizens need to take on the management of their incomes and expenditures, financial education has become a priority. Financial supervision institutions and authorities and the companies that operate in the financial markets have lately started consistent and integrated long-term activities and programs aimed at increasing financial education and inclusion.

In recent years ASF has partnered with school inspectorates in several counties and with universities to organize financial education activities in schools, highschools and universities for 39,000 secondary education and 20,000 tertiary education students in various cities.

The poor financial education is visible in the lack of knowledge of simple notions, such as compound interest, or the risks that are covered by a “home insurance”. Many economic sectors are affected to a greater or lesser extent by the lack of knowledge of the specifics and risks of financial instruments, rendering consumers vulnerable, as they are prone to making wrong decisions as well as the financial markets – which fall short of attaining the critical mass of customers that would allow, among others, the reduction of costs and the consolidation of financial institutions.

All that the surveillance authorities can do today is caution against the risk of buying cryptocurrency, as there is no regulation to govern the way this instrument works and protect the consumer to a certain extent, Constantinescu said.

The ASF official added that the home and contents insurance is absolutely necessary, as is the life insurance, which offers death benefit to family members or an income in the event of illness or permanent disability.

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