These factors will become more acute in an increasingly complex and technologydriven financial system. Financial education has an important role in breaking such barriers. This will require more innovative approaches, broader partnerships and a deeper understanding of the social attitudes. Our own experience in Malaysia through the work of Bank Negara Malaysia and the Credit Counselling and Debt Management Agency (a subsidiary of the Bank) has shown that the impact of financial education strategies depends  2  BIS central bankers’ speeches  on the ability to effectively combine broad-based and targeted strategies, and having a wellcoordinated approach that relies on multiple channels to reach different groups. Financial education is also a lifelong endeavour, from encouraging children to save their pocket money to helping adults attain financial security and independence for their old age. In supporting the inclusion agenda, financial education initiatives in Malaysia are designed as an important life skill, where consumers are exposed to knowledge on financial management during the different periods in their life. An increasing trend is for financial capability to be promoted from an early age through the integration of financial education into the formal school curriculum that covers basic money management, spending and savings, credit and debts, e-payments, financial risk management and consumer responsibilities. For the youth and adult segments of the population, Malaysia has also adopted a life event approach to the development and delivery of financial capability programmes.

Naturally, we may well ask what happens under this scenario to those economies that have witnessed a loss in competitiveness compared with those countries that have implemented reforms, for example those affecting the labour market and those which have provided, along with other factors, for the so-called internal devaluation. In this case, the relative loss of competitiveness has been offset by the monetary policy stimulus and its impact on national demand and on the external sector. The depreciation of the euro accompanying this policy which has, no doubt, partly been one of its consequences, has improved the competitiveness of the area as a whole, stimulating exports and overall activity. Here we should recall that the euro area as a whole runs a most significant surplus on its transactions with non-euro countries. Both excessive deficits and large surpluses entail risks and costs. Accordingly, we believe there is justification behind the calls from several international institutions for those euro area countries that have the leeway to do so to implement policies conducive to the expansion of their domestic demand. I shall sum up with two ideas. First, that the de-anchoring of medium-term inflation expectations entails serious risks to financial stability and growth, risks that may be exacerbated in countries that have to follow a process of macroeconomic adjustment and deleveraging. Second, that monetary policy and structural reforms, when simultaneously applied, may lead to highly positive synergies. And now a few words to make way for the address by my much-respected and dear friend Vitor Constancio.