Constantinos Herodotou: Financial literacy and education in Cyprus challenges, lessons from other countries and the way forward Welcome address by Mr Constantinos Herodotou, Governor of the Central Bank of Cyprus, at the International Conference on "Financial Literacy and Education in Cyprus: Challenges, lessons from other countries and the way forward", Limassol, 10 March 2023. *** Your Excellency member of the Parliament Dr Mavrides, Your Excellency Deputy Minister to the President Ms Piki, Dear guests, Ladies and Gentlemen, It is with great pleasure that I welcome you today to the Central Bank of Cyprus International Conference on Financial Literacy and Financial Education in Cyprus. This Conference is a landmark event for our country. It marks the beginning of coordinated and collective efforts to implement the National Strategy for the promotion of financial literacy and education in Cyprus. The National Strategy was adopted by the Council of Ministers last June, following a proposal by the competent Committee, which was headed and coordinated by the Central Bank of Cyprus. This Conference, with its many distinguished participants, highlights the importance of financial literacy for the wellbeing of our citizens, but also for the collective welfare in Cyprus. The Benefits of Financial Literacy – a global perspective At its core, financial literacy refers to the ability of individuals to understand and manage their finances prudently and effectively. It is about the knowledge and skills but also the behaviour and attitudes necessary for the individual to make prudent and informed decisions about financial matters, such as saving, investing and borrowing.

4/5  BIS central bankers' speeches  34 Another field of research work can be around central bank digital currencies, or to use the buzz word, CBDC. Globally, there has been some discussion on the potential implications of CBDCs, but this is still relatively green field thinking. I will not delve more into it as the subject can be a seminar theme in and of itself. Conclusion 35 As you will have realised, I have flagged more questions than answers this evening. I think the post-crisis financial landscape is an exciting time to be an economist, analyst or researcher in support of financial market development, as well as to help shape policy reviews and thinking. Many of the developments I have touched on are rapidly evolving, and are also not mutually exclusive from one another. 36 There is a view that we should accept a more central role incorporating beliefs and expectations to both understand and shape financial market developments. New advances in behavioural economics can provide for tractable and psychologically-founded models of beliefs to be integrated into the standard analytical frameworks in finance and macroeconomics. 37 It is important that policymakers and regulators have a firm grasp of these interactions and develop new techniques to calibrate policies and mitigate risks. 38 The MAS therefore welcomes the opportunity to further engage the research community, hopefully with many of you, so that with your knowledge, expertise and research rigour, we can deepen our collective learning and understanding.