Financial awareness supports a more rational decision-making process for individuals by improving their literacy against financial risks. Increasing financial literacy will contribute to the more efficient functioning of financial markets, enhancement of financial stability and consequently the social welfare by increasing productivity in the overall economy. Therefore, financial education assumes importance not only for individuals but also for giving depth to the financial system and improving market efficiency. Parallel to increased financial literacy, the volume and variety of information sought by individuals from financial institutions will also increase. This will, in turn, lead to more transparency in financial markets. Besides, consumers’ demands for products and services that meet their needs will enable the development of creative, innovative and competitive financial products and services in financial markets. Moreover, financial education will lead to an increase in the individuals’ propensity to save and create a more efficient social security system. Higher rates of savings will have favorable effects on investment and growth and contribute to economic development and financial stability. I would like to especially underline that financial education is not an abstract concept. As a matter of fact, we clearly witnessed the close relationship between financial education and financial stability in the recent global crisis. I believe that the awareness created by this crisis can be interpreted as an opportunity, as highlighting financial education will be beneficial for policy-makers, individuals and financial markets. In Turkey, many institutions carry out projects with regard to financial education as a part of their responsibilities.

BIS central bankers’ speeches  3  I am pleased to say that both the US and the EU appear now to be inching toward recognition of each other’s implementation of the standards. The threat of fragmentation of the market seems to be receding, even if success is not yet assured. But it is an example of the differences that can arise in implementation even when there is international agreement on standards – a theme to which I will return. On shadow banking, the FSB has identified activities outside the banking sector that can give rise to some of the same risks as banking. And this is beginning to generate proposals for regulatory reform. The US and EU have, for example, developed proposals on regulation of money market funds. And there should be an important first agreement this year on how to manage systemic risks that can arise from securities financing transactions such as in the huge global repo market. Finally, ending “too big to fail”. This may well be the litmus by which the public judges the success of the entire reform programme. Nothing has so incensed public opinion and damaged societal support for the financial sector than the apparent “heads I win, tails you lose” experience of private profits and pay when things went well and public losses when they did not. We will not fully restore public confidence until we can show that we can resolve failing banks – no matter how large – without public support.