Russian Children For Financial Literacy - Between The USA And France

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Russian Children For Financial Literacy - Between The USA And France
Russian Children For Financial Literacy - Between The USA And France

Video: Russian Children For Financial Literacy - Between The USA And France

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The Ministry of Finance is holding the next week of financial literacy for children and youth. Citizens' interest in it is growing every year, as is the level of their knowledge about the field of finance. In an interview with Izvestia, Deputy Finance Minister Sergei Storchak assessed the government's successes in this direction, spoke about new textbooks and the benefits of “people's bonds” in improving financial literacy. Such securities, which can become an alternative to bank deposits, are planned to be issued in the second half of April.

- The Ministry of Finance has been implementing the project on financial literacy for the past six years. What results have you achieved?

- When we started this project in 2011, there was no infrastructure for teaching financial literacy in Russia, especially in the regions. There were no specialists, no educational programs themselves, there was not even large-scale research, no one really understood what financial literacy was, why it was necessary and how to do it. There were small private initiatives, often of a marketing nature. Over the years, we have developed about 40 large-scale educational programs for the population, starting with preschool children and ending with people of retirement age. We have prepared and tested in the regions educational and methodological kits from the 2nd to the 11th grade of the school, opened financial literacy centers in our pilot regions, launched the national portal "yourfinance.rf", created federal and regional methodological centers for the training of teachers and tutors of all levels of the education system and have already trained thousands of specialists. They also helped Rospotrebnadzor equip their consumer protection centers in the regions and train specialists, sent to the regions a lot of information materials on the most pressing and urgent problems of consumers of financial services.

Now this topic has become popular both among government bodies, various departments, and among financial organizations, non-profit organizations, that is, over the years we have set an important trend and laid the foundations for the systematic development of financial literacy.

- Has all this been reflected in the level of financial literacy of Russians?

- We are just entering the national level with our educational programs - we have tested them in several regions and are now trying to implement them at the national level. Therefore, it is too early to speak about serious long-term results in Russia as a whole. But in pilot regions, such as the Volgograd and Kaliningrad regions, where we started comprehensive work back in 2012, we see good progress among residents in all indicators of financial literacy. In the regions where the implementation of the program began later, we also see an increase in financial literacy and, of course, look forward to even greater growth by the end of next year.

In Russia as a whole, it can be said that, in comparison with other countries, Russian schoolchildren (adolescents of 15 years old) progress very well and show results better than adults. It is explainable. The younger generation already from birth lives in a market economy, is oriented in digital technologies, and it is easier for them to adapt to the modern world - they do not need to be retrained, they learn new information faster. Together with the Ministry of Education and Science and other partners, we are starting to integrate financial literacy into school and out-of-school education, and we are also trying to communicate with this audience during the days of the Children's Financial Literacy Week - through various games, social networks, and other informal communication channels.In an international study by the OECD on assessing the financial literacy of Russian students in 2012, our country took 10th place among 18 participating countries, located between the United States and France.

- The success of schoolchildren is understandable, but what about adults?

- As for adults: in the OECD international study on the assessment of the financial literacy of the population, in which primarily developed countries - members of the OECD and a number of other countries, took part, Russia took 25th place out of 30, in the same range with Eastern European countries, such as Hungary, Belarus, Poland. The 25th place is not a bad result, since the literacy level in all participating countries is low. So, with a possible maximum indicator of the level of financial literacy of 21 points, all countries received from 11.6 to 14.9 points, Russia - 12.2 points. Therefore, all countries, without exception, need to work.

The results of adult Russians are sagging due to low indicators on “calculating compound interest”, understanding “the need to diversify investments and risks,” due to the lack of a “family budget” and “long-term financial planning”. Therefore, we are trying to include these issues in our programs now.

In addition to systematic educational work with the population, we annually hold large-scale educational events as part of the Financial Literacy Week for children and youth in the spring and the Savings Week for adults in the fall, in order to attract attention and increase interest in this topic. The number of participants in these weeks is increasing from year to year, which indicates a growing interest in the topic of financial literacy. In 2016, almost a million young people took part in the Financial Literacy Week for Children and Youth. In 2017, the week runs from April 9-16, and we expect the number of participants to grow even more compared to last year.

- Does the project on financial literacy take into account foreign experience?

- Let's start with the fact that we are implementing the project together with the World Bank, the leader in the field of financial literacy in the world, by the way, this is the largest project of the World Bank on financial literacy from all countries. Before its start, we studied the best international experience, but at the same time, we decided to first test all the developed programs in pilot regions in order to find solutions that are suitable for our conditions.

We ourselves have already begun to represent the best, internationally recognized practices. For example, the Ministry of Finance of Russia received the main international award within the framework of the Global Week of Money for holding the Week of Financial Literacy for Children and Youth in 2016, from 140 countries it was we who were awarded in the famous Nobel Hall in Stockholm for the best results. Neighboring countries are very actively interested in our experience, and we plan to exchange experience in the field of financial literacy with the EAEU and CIS states.

We also conducted large-scale piloting of school educational programs and teaching materials from 2nd to 11th grade in five pilot regions - no one has done this before, and the OECD specifically noted this as a best practice. Thanks to such testing, we were able to check what works and what does not, and begin to refine all our educational and methodological kits, which will be actively distributed in the regions next year.

- How is the work on the National Strategy for increasing the financial literacy of Russians, on which the Ministry of Finance is working together with the Central Bank, proceeding? In what time frame can it be adopted?

- The national strategy is in the final stage of approval, we are finalizing it together with the Central Bank and other partners. The adoption of the strategy at the government level is expected in 2017. It will cover a horizon of five to seven years. I think that less time is not needed for a strategic document. After this period, either it will be prolonged, or a new document will be adopted.

- What will be the funding sources for the strategy?

- The advantage of our project is that when we entered the regions with it, co-financing was provided from the local authorities. Also, for now, we expect that the World Bank will continue to finance the project, but it is quite possible that additional funds will be required as the strategy is implemented.

- Are you planning a large-scale advertising campaign on the topic of financial literacy?

- Yes, we are planning an awareness-raising campaign. This will not be advertising in its pure form, but rather even education - including through educational videos in which we want to remind citizens of the basic rules for dealing with finances.

- And what will it be based on and when will the advertising campaign of the so-called "people's bonds" - OFZ-N, which the Ministry of Finance plans to issue in the second half of April, be launched?

- OFZ-N is one of the tools for increasing the financial literacy of the population. He will be able to expand the range of investment instruments available to the population, and give us interesting indicators on the part of financial literacy. But I want to note that it is not entirely correct to call them "people's bonds".

- These papers were dubbed by the press …

- Yes, the media called them that, but for us these are not “people's bonds”, but bonds for the population. Moreover, for the population, which has current savings.

The success of the financial literacy project, as well as the issuance of bonds, will largely depend on the behavior of the citizens themselves, who will demonstrate a willingness to invest their savings in bonds. We will look at how citizens react to our proposed conditions, what questions they ask agent banks and how intense the demand for these securities is. We will receive all this data from agent banks - to generalize, analyze, and all this will help us in the implementation of the financial literacy strategy.

Returning to the question of the OFZ-N advertising campaign. It will be more educational than stimulating citizens to active purchases. We launched it on April 10 - it will be leaflets, videos on TV and radio, advertising on the Internet, in social networks.

- How much do you plan to spend on an advertising campaign of bonds for the population?

- We will spend practically nothing on educational advertising - except, perhaps, the cost of printing leaflets. And television and radio have kindly provided us with the opportunity to advertise OFZ-N for free. But we will not abuse this, annoying advertising is not planned - there will be several showings of the video a day at a time convenient for the population.

- How would you comment on the results of the survey of the population by the Levada Center, which show that more than 80% of the population are not ready to purchase OFZ-N?

- I do not see anything wrong with these results, especially if we take into account the data that about 56% of citizens do not have bank accounts other than those linked to salary cards. More than half of the population do not have bank accounts and have no savings in principle, so the survey was not surprising - most likely, its results reflect reality.

The point here may also be that we did not really have time to explain to citizens what OFZ-N is and why they are needed. We have not yet connected electronic communications, and this is a very broad information channel.

- Could it be possible to increase the coverage of the population, for example, by expanding the list of agent banks for issuing bonds?

- Maybe. The road will be mastered by the walking one. Therefore, we do not rule out that as the OFZ-N issue is implemented, we will connect new banks. Now only Sberbank and VTB24 work with us - banks with the widest branch networks and with the participation of the state.

But I would like to note that connecting each bank is a very difficult process, there are a lot of pitfalls, because OFZ-N will be issued only in electronic form. This will require computer and software support and a host of other things.

In addition, it will be necessary to see how a certain conflict of interest will be resolved in the banks we have selected - after all, they will sell our instrument, which in many respects competes with bank deposits. At the same time, the task of banks to attract money into deposits does not disappear anywhere.

- According to the rules for issuing these bonds, banks will charge citizens a commission for the sale of OFZ-N. Are you not afraid that in the end the banks will shift their expenses onto the shoulders of the population?

- For now, alas, we cannot do without using citizens' funds in the project in terms of ensuring the functioning of agent banks. But I would like to note that the commissions are structured in such a way that banks do not make money on OFZ-N, they only cover their costs for registration of the purchase and sale of bonds. At least that's what they tell us.

We hope that as the project progresses and the demand for OFZ-N progresses, banks' costs will decrease - hence, commissions will also decrease.

But the option is not excluded, in which, in order to support the demand for securities, we will ask the government to provide budget expenditures to cover the costs of agent banks. If it comes to this, we will have to solve many related issues: administration of budget expenditures, justification of their necessity, and so on.

- Why did the Ministry of Finance decide to reduce the maximum par value of bonds available for purchase from 25 million rubles to 15 million?

- In fact, no decrease has occurred. We assumed that if one person buys bonds worth 15 million from VTB24 and the same amount from Sberbank, then the total will amount to 30 million. And this is almost the same as the previous maximum threshold.

This will allow us to avoid a situation in which too many bonds go into one hand. And we would like that this tool, despite the narrowness of the target market, could be acquired by as many citizens as possible. To what extent we guessed with such a decision and demand, it will be clear only after the first week of OFZ-N circulation.

- When exactly is the start of sales planned?

- During the advertising campaign, we will see how dynamically citizens show their interest in securities. Accordingly, in the second half of April we intend to issue OFZ-N.

- In April last year, the board of directors of the New Development Bank, created by the BRICS countries, approved seven projects with funding for more than $ 1.5 billion. How do you feel the work on them is progressing?

- I cannot comment on these projects, because a lot of people are involved in their discussion and implementation, who may not want publicity. But I will say that the work is not easy. If only because investment projects not only in Russia, but throughout the world have become quite a rarity, they are practically non-existent. In addition, in order to receive funding and return it, each project must first be brought to the market, which is very difficult.

In addition, the New Development Bank is focused mainly on infrastructure projects, but this does not mean that they should not be profitable and successful. Therefore, regulators face a serious challenge to make the infrastructure or its facilities attractive assets that are of interest to investors. Institutional investors have accumulated about $ 80 trillion. This is four times the GDP of the world's largest economy - the United States. This money should not only be distributed, it should be involved in the implementation of infrastructure projects. There is a tendency that institutional investors are ready to invest in infrastructure projects, but so far there is little relevant experience. This is a big, difficult task, and it is in the field of vision of the G20.

- There are infrastructure bonds - green bonds, for example. Can investors be attracted through them?

- These are nice words, but these tools do not work yet. They can start working when the infrastructure project is assessed by investors as an asset class in which you can invest your own and other people's money.And to solve this problem, you need to solve a lot of nuances. There are few such competencies in the world.

Of course, everyone is trying to generalize and adapt the world's best practices. And now, when there are many international development institutions (including more than 20 banks), the question of what can be done to enable multilateral development banks to exchange assets has been raised at the level of the country's finance ministries.

- How are the swaps?

- Swap is a money market instrument. And there is no asset exchange tool, so the corresponding task has been set - to find an opportunity to exchange assets to manage the risks of credit portfolios of development institutions. This will allow for a more balanced portfolio structure. This is a very good idea as an idea, but in practical terms it is still in its infancy.

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