policies instruments. the society needs to be aware of these instruments, understand them, evaluate stimuli and incentives, and properly respond to them. the important role of consumer behaviour for the policies success is clearly evidenced in the “ rational expectations ” theory. a simple intuition behind this theory is that rational individuals shape their expectations using the available information optimally. they respond to new information by adopting their behaviour to maximise welfare. in this case, individuals “ equipped ” with financial literacy read and understand developments in economic policies and respond to them rationally. this mutual understanding would drive the economy towards the desired direction. the central bank adjusts its policies in response to the actual behaviour of agents, who would adjust their behaviour in line with the central banks policy. for this interaction to happen, both the public and the central bank need to speak the same language and understand each other unequivocally. money management needs this two - way understanding and the active role of individuals. consequently, the trust and confidence of the public is earned, monetary policy objectives are achieved and its reliability is enhanced. thirdly, i would like to underline that financial education of individuals establishes a more stable society on one hand and a stronger and secure banking system on the other. efficient and ongoing financial education is a path trotted by millions of individuals and families in their endeavour to achieve financial goals and accumulate wealth. the positive effect of this process is reflected in a stronger economic and financial stability for the entire society. the banking system has its role to play in this process, mainly through lending to businesses and households. as a regulator, the bank of albania gives its share of contribution ensuring that banks strictly abide by legal and regulatory obligations in relations with their customers. on the other hand, financially literate customers, contribute to the bis central bankers ’ speeches development of the banking system with their increasing demand for financial products and services. therefore, the result is clear : higher efficiency, lower charges, better services and healthier and safer banking system. fourthly, i would like to highlight that financial education, over time, improves the living standard in the long run, including retirement age. in a recent analysis, the essential reason why an individual needs to amplify his financial literacy is that this investment will help him to reach his money management objectives. although personal objectives may vary from an individual to another, on financial education point of view, improvement of society ’ s living standard is guaranteed and confidence for the future is boosted. financially literate

individuals, are capable to make healthy financial plans, from an early stage of their career. their knowledge enables them to plan their finances for retirement, children ’ s education and accumulation of financial assets. these individual behaviours, seemingly irrelevant, bring about great benefits in the national perspective. fifth, i would like to underline that financial education is a long - term process, extended over time, and that the presence of specialised institutions is indispensable. although in financial crisis individuals incur large damage, they continue to be involved in future crisis. the number of individuals, who are familiar with interest rates they either receive or pay in financial transactions, remains low. the same may be said about investment strategies, financial risk identification and assessment, and other elementary money management concepts. many people do not think in financial terms and do not perceive accurately profits and costs resulting from bank loan use, or wealth - related effects originating from home ownership and other similar long - term assets. reasons behind this behaviour are understandable and related to the fact that the majority of the society acquires information circumstantially, hoping that the actual failure becomes a lesson for the future. one way to eradicate circumstantial learning is the introduction of financial reading at an early stage of education. in this view, i would proudly say that, the bank of albania has provided an outstanding contribution. allow me to briefly make an resume of our work in this aspect. the first strategic station of financial education provided by the bank of albania was needs assessment and identification of training priorities. from this point of view, we assessed that it was indispensable to open the bank “ de facto ” to the public. more frequent communications with the market and its important participants, as well as periodic explanations of monetary policy decision - making and risks balance related to inflation and financial stability, are some initiatives that we consider as a very effective education process. i am proud to say that now we have : a public opinion that builds up expectation as regards our decision - making ; a media sector, which has admirably enhanced understanding, interpretation and expectations related to our decision - making ; a banking sector, which reads accurately and responds with high flexibility to the direction oriented by us ; a qualified public critique, where bank of albania finds a mirror of alternative opinions on its adopted decisions and practices. another important aspect is the identification and division of the population according to their demographic, geographic and cultural characteristics. for us, financial education is