barry whiteside : financial literacy speaking notes for mr barry whiteside, governor of the reserve bank of fiji, at the launch of the financial literacy mascot, suva, 19 august 2011. * * * good afternoon ladies and gentlemen, members of the media and fellow staff of the bank, tomorrow marks the opening of the hibiscus festival, and the beginning of the school holidays for our students and teachers around fiji. an enjoyable time for many! this saturday at the rbf hibiscus microfinance village, the official mascot for financial literacy will be making his debut in suva. we have invited you here this afternoon to get a sneak preview, and to seek your support for a very important initiative that is aimed at lifting financial literacy levels in our communities in fiji. financial literacy, ladies and gentlemen, is a life skill that is needed by everyone – some of us may be better at it than others. financial literacy is the ability and understanding that we all need so that we make the best decisions when it comes to managing our money. we believe that if everyone has access to some form of financial education, they are more likely to make better financial choices. developing this a little further, we need to share and talk more often with our children, our families and friends and get a better understanding of the little things we can do to improve our own money management skills. these include such things as planning and budgeting, saving and investing for the medium and longer term, retirement planning and last, but by no means the least, managing our debts. this year the financial literacy working group has once again taken the opportunity to raise public awareness on the importance and need for financial literacy for all our people. the financial literacy working group, ladies and gentlemen, is one of three working groups that report to the national financial inclusion taskforce. these groups, working under the banner of the taskforce, are made up of representatives from the public and private sectors, ngos and various donor agencies. they represent stakeholders working in partnership to ensure that everyone in fiji has access to appropriate financial services and products that they need. coming back to the financial literacy working group, i must say they are all a passionate lot, ably led by mr. narasimhan krishnan. the group has been tasked with three important goals over the next few years. these are : 1. to develop a national strategy towards financial literacy – this would first require a stock - take and assessment of current financial literacy programs out there

in mind, the esfs will establish a network consisting of national financial supervisors and three new european supervisory authorities. the new authorities will replace the existing level 3 committees and cover each financial sector. the european banking authority ( eba ) will be responsible for supervision of the banking sector, the european securities and markets authority ( esa ) will be responsible for supervision of securities markets, and, finally, the european insurance and occupational pensions authority ( eiopa ) will mainly be responsible for the supervision of insurance companies. although the exact design of the new authorities is still under discussion, the current version of the relevant bill would assign them a mostly coordinative role. consequently, the main objective of the new authorities will be to improve cooperation and coordination among member states as well as convergence in supervisory practices. in addition, one of their tasks will be to ensure coordinative action in emergencies. 3. 2. the role of central banks let me now turn to the question of the role which central banks should play in this framework. owing to the close links that exist between the financial system and monetary policy, central banks have a natural interest in safeguarding financial stability. they also have a high level of expertise in monitoring macroeconomic developments that might impact on financial stability. what the financial crisis also demonstrated was the crucial role that central banks play in restoring financial stability once a crisis occurs. moreover, in most countries, central banks are directly involved in banking supervision and thus form a natural link between the micro and the macroeconomic levels of prudential supervision. consequently, they should be adequately represented in the new financial architecture. in line with the latest compromise on the structure of the esrb, the european system of central banks will indeed assume a leading role. with regard to the composition of the general board, for example, the compromise assigns 29 votes out of a total of 33 votes to representatives of the ecb and the national central banks. however, discussions on the final structure of the esrb are still ongoing, and recent results have shown a tendency to weaken the role of central banks. let me emphasise here that retaining the pivotal role for central banks, which was envisaged in the original compromise, is of great importance. regarding the esfs, it is especially the european banking authority where central banks should be adequately represented. this is not yet the case, however. it is planned that only the ecb will be represented on the board. those central banks that are not the sole supervisor but