economic concepts and a degree of knowledge about monetary policy are essential for inspiring trust in central banks. and trust, ladies and gentlemen, is the core asset of central banks. central banks also rely on people ’ s appreciation of price stability, because, ultimately – as otmar issing, former chief economist at the bundesbank and the ecb, once put it – “ every society gets the rate of inflation it deserves and basically wants ". central banks, then, would be well - advised to promote economic and financial literacy. and let me also mention in this regard that the bundesbank extensively overhauled and revamped its money museum recently. our museum provides information about money, its history and the tasks facing today ’ s central banks in straightforward, generally understandable language. incidentally, one of the most popular exhibits at the new money museum is a 12. 5 kg bar of gold from the bundesbank's vaults, which visitors are invited to touch and feel. while this exhibit may be of minimal educational value, it does show that even in the age of digital finance and dematerialised money, people still appreciate tangible values. 4. the potential impact of digital finance on financial stability ladies and gentlemen there are, of course, other aspects of digital finance which have a bearing on financial stability. herding behaviour, for example, could be amplified by automated advisory services in portfolio management. robo advisors might exacerbate financial volatility and pro - cyclicality if the assets under management reach a significant level, which is not yet the case. traditional banks in many countries are currently suffering from dwindling profitability due, most notably, to the low - interest - rate environment. disintermediation, however, could intensify the problems of narrow profit margins. this might be the flipside of the mounting competition unleashed by the more widespread use of digitised financing. and decentralisation might make it more difficult to tell who is exposed to whom, and to detect where financial risks ultimately lie. 4 / 6 bis central bankers'speeches another point worth noting is that fintech business models have not yet run through an entire credit cycle. experience with digital finance in economic downturns is very limited. that being said, it is quite obvious that regulating fintechs and the entire digital financial industry smartly without hindering financial innovation is warranted. that ’ s why the objectives of the german g20 presidency include taking stock of the different

##quity of cell phones, mobile money accounts have gained popularity, particularly in sub - saharan africa. in some countries, there are even more adults with a mobile money account than a conventional bank account. 1 financial inclusion is thought to be conducive to promoting economic growth and lowering inequality. 2 financially included people are in a better position to start and develop businesses, to invest in their children ’ s education, to manage risks, and to absorb financial shocks. on the other hand, there is a trade - off between financial inclusion and financial stability. expanding access to financial services – especially to credit – at too fast a pace and with too little control exposes economies to stability risks, and households to the risk of overindebtedness. the indian microfinance crisis in 2010 showed us what can happen if too many households have access to credit despite being subprime borrowers. and that is why financial literacy is so crucial. people with access to finance need a basic understanding of financial concepts like compound interest and risk diversification. surveys, however, provide some worrying results. according to an international survey of adult financial literacy competencies, which was commissioned by the g20 and published by the oecd, overall levels of financial literacy, as indicated by knowledge, attitudes and behaviour, are relatively low. 3 3 / 6 bis central bankers'speeches and another study, the s & p global financial literacy survey, which was supported by the world bank, reveals that two out of three adults are not financially literate, albeit with major variations across countries. 4 while more than half of adults are financially literate in most of the advanced economies, that goes for fewer than one - fifth of people in some developing or transformation countries. tomorrow ’ s workshop on “ digitising finance and financial literacy ” moderated by annamaria lusardi, who is one of the authors of the s & p survey, will discuss how financial literacy could be improved. another oecd report on financial literacy among g20 economies will be prepared for release during the course of the german g20 presidency in 2017. financial literacy is of key importance for individuals, for societies, and even for central banks. effective monetary policy communication relies on a basic grasp of concepts such as inflation and interest rates. you can only really follow the monetary policy debate, say, if you understand the idea of the real rate of interest, because real interest rates determine investment and consumption decisions. surveys show that a basic understanding of