be held to protect confidence, stability and competition in a bottom - up perspective. indeed, supervisory authorities are tackling the financial education issue as an important element in the wider context of their responsibilities. as the oecd put it in its 2005 report on improving financial literacy, “ financial education provides policymakers with another tool for promoting economic growth, confidence, and stability ”. financial education helps investors to monitor intermediaries. households better acquainted with the notions of risk and return, compound interest and inflation can better identify abuse and fraud as well as understand the real terms of what they are being offered. there are many recent examples where the placement of financial instruments has been largely based on poor understanding of the fact that unusual earnings can be offered only against unusual risks and in ways not necessarily consistent with the risk aversion, financial situation and investment objectives of many investors. for reputational concerns to play a role in checking the behaviour of financial intermediaries, investors must be able to compare different financial products and assess the quality of the services provided by different institutions. financial education can therefore complement the supervisory action of the authorities in fostering enhanced competition. finally, financially literate households are less likely to believe that they have been cheated when that was not the case. thus, financial education helps to sustain confidence in the financial system and can have a beneficial effect on the stability of intermediaries by reducing their legal and reputational risks. indeed, the financial industry is likely to benefit from having more literate customers. for all its merits, however, financial education should not be regarded as a silver bullet by any of the interested parties ( consumers, regulators, industry ). first, knowledge takes time to build. second, evidence on the effectiveness of financial education in improving financial behaviour is mixed, and clearly depends on the kind of programmes provided. third, we should not expect financially literate consumers never to make mistakes : the financial sophistication of the people fooled by bernie madoff, and their numbers, are a sober reminder that financial education does not provide foolproof protection against fraud. indeed, it might even, to some extent, induce overconfidence. but, all said, investing in financial education still seems the safest bet if we want to improve individuals ’ ability to take advantage of the opportunities offered by the financial system. 3. promoting financial education the italian public debt, currently running at around 115 per cent of gdp, is high by international standards. it is well known that most

school students : they will be given, in a standardized way, some notions on the role of the financial system, on sound decision making, on the identification, impact and assessment of risks and returns. before and after the treatment, both the treated students and a control sample will be involved in simulated problems, mimicking the main features of actual financial decisions. the objective is to gauge, through the changes in the quality of the decisions observed, the effectiveness of financial education. while providing financial education initiatives, policymakers could and should cooperate with other parties, in particular consumer and industry associations. the bank of italy is cooperating with the other supervisors and regulators, such as consob, isvap, covip, agcm, which are all represented here today, to define a coordinated national strategy. a single financial education web portal will be developed to pool all the educational material and tools already present in the websites of the individual supervisory authorities. 5. conclusions it is unlikely that a higher degree of financial literacy worldwide would have significantly helped to contain the financial crisis. and it is also unlikely that complex financial decisions could be made by each person becoming their own personal financial adviser. we must use regulation and supervision to make the financial system more resilient to shocks and to enhance efficiency in a more competitive and also a more stable environment. substantial changes are needed, and they need to be introduced through a cooperative and coordinated international process. most likely they will imply less risk - taking and possibly lower returns for the financial industry, but also for its customers. the latter, however, is already a significant reason why investing in financial education is important. some of the non - negligible effects of the crisis could in fact be a substantial loss of trust in the financial industry ; a reluctance to take fundamental and conscious decisions related to saving for retirement ; for some people, discouragement from exploiting even the safest, though not risk - free, investment opportunities, while for others a renewed search for high yields in a world of diminished returns without understanding the higher risks attached ; for most, a wariness concerning the use of debt. thus, while not a panacea, investing in financial education is an important means to perform our institutional duties : protecting savings, ensuring stability and promoting competition. in italy, the fact that financial education programmes are just beginning to see the light can offer the opportunity to build sound future initiatives on the basis of international best practices. we have to identify the financial education needs of